U.S. v. Patterson, s. 80-1213

Decision Date15 April 1981
Docket NumberNos. 80-1213,80-1214,s. 80-1213
Citation644 F.2d 890
Parties8 Fed. R. Evid. Serv. 253 UNITED STATES of America, Appellee, v. Preston T. PATTERSON, Defendant, Appellant. UNITED STATES of America, Appellee, v. Benjamin DEMAGISTRIS, Defendant, Appellant.
CourtU.S. Court of Appeals — First Circuit

Joseph J. Balliro, Boston, Mass., for appellant Preston Patterson.

Morton Berger, Spring Valley, N. Y., for appellant Benjamin DeMagistris.

Paul E. Troy, Asst. U. S. Atty., Boston, Mass., with whom Edward F. Harrington, U. S. Atty., Boston, Mass., was on brief, for appellee.

Before CAMPBELL and BOWNES, Circuit Judges, and HOFFMAN, * Senior District Judge.

LEVIN H. CAMPBELL, Circuit Judge.

Benjamin DeMagistris and Preston Patterson appeal from their convictions on eleven counts of mail fraud, in violation of 18 U.S.C. §§ 1341 and 1342, and one count of conspiracy to commit mail fraud, in violation of 18 U.S.C. § 371.

Patterson maintained an office in Washington, D. C., where he acted as the exclusive agent of the Peerless Insurance Agency for issuing the performance bonds required in connection with bids by truckers seeking to be awarded contracts (Star Routes) for the transportation of mail. Peerless, according to testimony of a Postal Service employee, writes more such performance bonds than any of the few bonding companies in this field. DeMagistris was owner and president of Rodlac Trucking & Leasing Co., Inc., a postal route bidder and contractor. Patterson and DeMagistris were charged with having engaged in a fraudulent scheme whereby Patterson would leak the amounts of bids to DeMagistris, who would then submit a lower bid of his own and thus obtain the contract for his company.

I. Sufficiency of the evidence

Appellants contend the district court erred in denying their motion for acquittal on all counts because the Government failed to present evidence sufficient to sustain their convictions. 1 Appellants argue that the Government failed to offer evidence that Patterson entered into any agreement with DeMagistris. Without such evidence, they argue, no conspiracy could be found; and the substantive counts must fall along with the conspiracy counts, since the scheme to defraud, as alleged in the indictment, depended upon an agreement between Patterson and DeMagistris.

In reviewing denial of a motion for judgment of acquittal, we consider the evidence as a whole, taken in the light most favorable to the Government, together with all legitimate inferences to be drawn therefrom, to determine whether a rational trier of fact could have found guilt beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789-2790, 61 L.Ed.2d 560 (1979); United States v. Davis, 623 F.2d 188, 195 (1st Cir. 1980); United States v. Indelicato, 611 F.2d 376, 384 (1st Cir. 1979); United States v. Mora, 598 F.2d 682, 683 (1st Cir. 1979). Where conspiracy is charged, the essential element to be proved is agreement. Ingram v. United States, 360 U.S. 672, 678, 79 S.Ct. 1314, 1319, 3 L.Ed.2d 1503 (1959); Pereira v. United States, 347 U.S. 1, 11, 74 S.Ct. 358, 364, 98 L.Ed. 435 (1954). A conspiratorial agreement may be proven by circumstantial as well as direct evidence, Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942). The Government need not exclude "every reasonable hypothesis inconsistent with guilt" with respect to each piece of circumstantial evidence. Rather, "the question is merely whether the total evidence, including reasonable inferences, when put together is sufficient to warrant the jury to conclude that defendant is guilty beyond a reasonable doubt." Dirring v. United States, 328 F.2d 512, 515 (1st Cir. 1964). See also Holland v. United States, 348 U.S. 121, 139, 75 S.Ct. 127, 137, 99 L.Ed. 150 (1954).

In this case, both sides agree that the Government's strongest evidence of conspiracy between Patterson and DeMagistris, as well as of the substantive counts, was the testimony of Alex Mancone, particularly his account of statements made to him by defendant DeMagistris. Mancone, an employee and friend of DeMagistris who later became a competitor of DeMagistris in bidding for routes, recounted several conversations in which DeMagistris told him, directly or indirectly, that Patterson was supplying DeMagistris with bid information. Mancone testified to having been in a car with DeMagistris and overhearing the latter talk on a telephone with someone called "Pat," whom DeMagistris identified as Patterson. While talking, DeMagistris wrote figures on a clipboard. According to Mancone, DeMagistris "said the figures for the Queens run, he was writing down the figure so he could put a bid on it." Recounting a later conversation, Mancone testified that DeMagistris had said "that he was going to Washington, D.C. to Mr. Patterson's office. He would take the bid packages up there to get the prices to get somebody else's prices, so he would be the lowest bidder and win the contract .... He would go down at the last minute. This way he could put the lowest bid in to get the contract." The substance of these conversations was reiterated and elaborated during cross-examination.

A. Application of Rule 801(d)(2)(E)

DeMagistris's statements, as recounted by Mancone, were admissions and, as such, admissible against DeMagistris. Fed.R.Evid. 801(d)(2)(A). The same statements, however, could be used against Patterson only if in compliance with Fed.R.Evid. 801(d)(2)(E), which allows statements by a party's coconspirator made during the course and in furtherance of the conspiracy. Defendants contend that the standards applicable to such statements laid down in United States v. Petrozziello, 548 F.2d 20 (1st Cir. 1977), were not met, and that the statements were therefore not admissible against Patterson. Defendants' arguments under Petrozziello are four: (1) that hearsay was admitted against both defendants before the Petrozziello standards were addressed at all; (2) that the court erred in its finding that the existence of a conspiracy had been shown by a preponderance of the evidence; (3) that the court erred in making the Petrozziello findings during the Government's case, rather than at the end of all the evidence; and (4) that after the district court made the Petrozziello ruling, it implicitly revealed its finding to the jury, to the prejudice of the defendants.

1. Admission of hearsay before the Petrozziello findings

Defendant Patterson complains that on certain occasions the district court denied his requests for limiting instructions when witness Mancone testified to statements of DeMagistris, even though the court had yet to rule that the existence of a conspiracy, to which Patterson was linked, had been established as required in Petrozziello. Patterson cites as an example Mancone's account of DeMagistris's telephone conversation in the car, in which DeMagistris referred to the person on the other end of the line as "Pat." Patterson sought a limiting instruction, but the court denied the request, observing that "For whatever it is worth, the jury may have it." Later, however, the district court expressly made a ruling, and declared that the statements of DeMagistris could be considered as to Patterson. If this ruling was proper, a question we resolve in the affirmative, see infra, there was no lasting prejudice in the court's having allowed in the statements without initial limiting instructions. The subsequent ruling had the effect of validating the earlier admission, and no harm was done.

2. Correctness of the Petrozziello ruling

As Petrozziello explains, statements of co-conspirators are admissible under Fed.R.Evid. 801(d)(2)(E) only if the district court finds, on the basis of independent evidence, that "it is more likely than not that the declarant and the defendant were members of a conspiracy when the hearsay statement was made, and that the statement was in furtherance of the conspiracy." Id., at 23. Here the district court stated, "I think the government has established the standard that it is more probable than not that a conspiracy existed and that the two defendants could well be found to be members of that conspiracy." 2 Defendants contend this finding was not supported by a preponderance of the evidence.

We must accept the district court's finding of fact in applying the Petrozziello test unless it is clearly erroneous. See Campbell v. United States, 373 U.S. 487, 493, 83 S.Ct. 1356, 1360, 10 L.Ed.2d 501 (1963) (clearly erroneous standard applied in review of district court's finding that a statement was adopted by a witness for purposes of the disclosure requirements of the Jencks Act); United States v. Gypsum, 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948) (clearly erroneous standard applied in review of district court's finding of no conspiracy in civil antitrust case); United States v. Strahl, 590 F.2d 10, 13 (1st Cir. 1978), cert. denied, 440 U.S. 918, 99 S.Ct. 1237, 59 L.Ed.2d 468 (1979) (clearly erroneous standard applied to district court's finding of fact on Jencks Act issue); United States v. Botero, 589 F.2d 430, 433 (9th Cir. 1978) (clearly erroneous standard applied to district court's finding of fact made after a suppression hearing); United States v. Welp, 469 F.2d 688 (9th Cir. 1972) (clearly erroneous standard applied to findings of fact after suppression hearing). Cf. Fed.R.Civ.P. 52(a) (clearly erroneous standard for review of district court's findings of fact in civil cases); 2 C. Wright, Federal Practice & Procedure § 374 at 18 (clearly erroneous standard for review of district court's findings in jury-waived criminal trials). The district court cited generally the evidence that most impressed it: "the testimony of Mancone, Makris, and Vitti, the testimony concerning calls made in front of Mancone and the fact that Patterson and...

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