U.S. v. Provenzano

• Decision Date: 16 January 1980
• Docket Number: 361,Nos. 221,D,s. 221
• Citation: 615 F.2d 37
• Parties: UNITED STATES of America, Appellee, v. Anthony PROVENZANO, a/k/a "Tony Pro", Appellant. ockets 78-1251, 79-1247.
• Court: U.S. Court of Appeals — Second Circuit

Page 37

615 F.2d 37

UNITED STATES of America, Appellee, v. Anthony PROVENZANO, a/k/a "Tony Pro", Appellant.

Nos. 221, 361, Dockets 78-1251, 79-1247.

United States Court of Appeals Second Circuit.

Argued Sept. 17, 1979.

Decided Jan. 16, 1980.

Gerald L. Shargel, New York City (Maurice Edelbaum, Jay Goldberg, John Pollok, and Fischetti & Shargel, and Hoffman, Pollok, Mass & Gasthalter, New York City, on the brief), for appellant.

Barbara S. Jones, and Steven K. Frankel, Asst. U.S. Attys., New York City (Robert B. Fiske, Jr., U.S. Atty., and Howard W. Goldstein, Asst. U. S. Atty., New York City, on the brief), for appellee.

Before FRIENDLY, TIMBERS and VAN GRAAFEILAND, Circuit Judges.

TIMBERS, Circuit Judge:

On this appeal from a judgment entered after a seven day jury trial in the Southern District of New York, Charles M. Metzner, District Judge, convicting appellant of conspiracy to pay a kickback to a union pension and welfare fund trustee to obtain favorable action on a loan proposal, in violation of 18 U.S.C. §§ 371 and 1954 (1976), we find the following to be the principal questions raised on appeal:

(1) Whether the evidence was sufficient to support the conviction;

(2) Whether the district court erred in its charge to the jury; and

(3) Whether the district court erred in denying appellant's motions for a new trial based on asserted non-compliance by the government with the disclosure requirements of Brady v. Maryland, 373 U.S. 83 (1963), and the Jencks Act, 18 U.S.C. § 3500 (1976).

For the reasons below, we affirm.

I.

The essence of the crime of which appellant was convicted was that he and co-defendant Anthony Bentro ¹ conspired to pay a kickback to Rocco DePerno ("Rock"), a union pension and welfare fund trustee, to obtain DePerno's favorable action on a proposed mortgage loan to the Woodstock Hotel in Manhattan. DePerno's kickback, as well as substantial sums ² for Bentro, Provenzano and other conspirators, were to come from so-called "bonus points", i. e. large, under-the-table amounts to be paid by the borrower in addition to legal interest.

In view of appellant's challenge to the sufficiency of the evidence, we summarize here in some detail those facts believed to be necessary to an understanding of our rulings on the legal issues raised.

A.

The instant indictment resulted from "Operation Cleveland", a special joint federal-city undercover project which was established to investigate corruption and organized crime in the garment center of New York City. Toward that end, the Gerro Trucking Company was set up as a front for the investigation. An FBI informant, Herman Goldfarb, was installed as the trucking company's president. Before long, Goldfarb was approached by one Lawrence Paladino, who later was named as an unindicted conspirator. He offered the Gerro company labor tranquility in exchange for extortion payments of $150 a month.

Those in charge of the investigation decided to pay the sum demanded. They hoped to use Paladino as an entree to other criminal groups preying on the clothing industry. They were not disappointed. Paladino and Goldfarb soon began to discuss arranging loans for various parties from labor union funds. Paladino and Goldfarb were to retain substantial sub rosa "commissions" for their efforts. Paladino told his new business associate that Provenzano "Tony Pro" would be able to obtain the mortgage money required for their loans.

During a March 6, 1974 conversation, for example, Paladino told Goldfarb that he had informed Provenzano of a possible.$2.5 million loan deal. Paladino said he would arrange a meeting for Goldfarb to talk the matter over with Sam Provenzano, a New Jersey union leader and appellant's brother. ³ Paladino and Goldfarb had discussed charging 12 per cent interest for the loan itself, plus "13 points" of "bonus money", or $325,000, for themselves. Paladino stated, however, that "over there I don't know what the percentage is". He urged Goldfarb to be candid with "Sammy", suggesting that "we split down the middle." ⁴

The Woodstock Hotel mortgage loan transaction was first discussed in June 1974. At that time Goldfarb learned through Hyman Schwartz, a mutual friend, that one of the hotel's new owners, Gilbert Federbusch, was seeking a mortgage loan for refurbishing and to retire old debts. The three men met at the Gerro office shortly thereafter. Federbusch agreed to the terms outlined by Goldfarb: a.$2.5 million mortgage loan would be obtained from a union, with interest of one per cent a month plus a 13 per cent "bonus".

At a meeting on July 2 Paladino told Goldfarb that arrangements for the mortgage had been completed. He stated, however, that the 13 per cent bonus would have to be split with others. He informed Goldfarb that he planned to funnel the loan "through Utica", the home of DePerno's local. He warned Goldfarb not to "even mention Tony Pro."

On July 11 a meeting took place in a midtown Manhattan office. Goldfarb, Provenzano, Bentro, Paladino and others were present. They discussed several transactions, including the Woodstock mortgage. Viewing this discussion in the light most favorable to the government, as we must at this stage of the case, ⁵ the jury could have found that the following is substantially what took place. ⁶

There was a brief initial discussion of the Woodstock deal. Provenzano interjected questions about the hotel's name and location. Goldfarb outlined the supporting documentation for the deal. He explained the tax advantage the hotel owner was obtaining. Then Bentro, addressing Provenzano, said that "Rock" had told him, "I gotta give it to Harold Silverberg" for approval. Silverberg was the accountant for DePerno's pension fund. Provenzano asked Bentro whether the reference to an accounting approval indicated a lack of interest on the part of Bentro. The latter replied, "Oh, Rock, I can't." Provenzano warned, "He's gonna take ten", referring to Rock. Bentro then stated that he anticipated that the accountant's scrutiny of the transaction would be purely pro forma. According to Bentro, "Harold puts the okay. Harold puts the okay if it's good. Not good. If it's on the line he'll take it an' say okay."

Provenzano then established through questioning of Bentro and others that DePerno would finance "The whole thing." After a brief discussion of restaurant concessions in Utica, the men turned to the matter of what additional documentation would be needed to close the Woodstock deal. Goldfarb wanted some guarantee of the loan before spending "a few thousand bucks" for a realtor's appraisal of the property. Bentro explained that before he could provide a letter of intent he had to "get some approval, half ass approval from the board", adding, "with Rock DiPerna (sic) from the board."

Bentro told Goldfarb to see the accountant Silverberg the following day. He assured him that Rock was fully familiar with the details of the deal legitimate and otherwise:

"See, I told Rock the whole bit . . .. I gave it to Rock, and I told him, look at the numbers . . . (unintelligible), thirteen per cent plus monthly . . . (unintelligible) . . . whatever they want." (emphasis added).

Paladino was alarmed. He feared that Bentro had agreed that DePerno would get the entire "bonus". Paladino said to Bentro, "Thirteen, you told him he was gonna get thirteen?" Bentro replied that the legal interest rate on the loan would be 12 per cent. There was further discussion, initiated by Paladino, regarding "the percentage over here that we're gonna make under", referring to the bonus points.

Bentro then commented on the large amount of money at DePerno's disposal in the pension and welfare fund, and the relatively few governmental restrictions on its use. There was further discussion of the bonus money and its division. Bentro assured Paladino and Goldfarb that, although "the ten" that DePerno would likely seek was "the going rate", ⁷ Tony (Provenzano) would talk to the trustee because "Tony can do (unintelligible) . . . with Rock." As Bentro had stated earlier on this matter:

"So you, you tell Tony what you're gettin' an' Tony'll tell you what you gonna give away, whatever he can cut off comes back."

Shortly after the July 11 meeting Paladino brought good news to Goldfarb. The latter testified at trial that Paladino told him that their share of the bonus had been upped from five to eight "points", with the remaining five going to the union, i. e. to DePerno. At a meeting on July 17 Paladino again confirmed that "his side" would be getting eight points. He also explained, "(T) here's three on their side . . . Tony, Tony and another guy (unintelligible)", to which Goldfarb replied, "Must be DePerna (sic)." Paladino responded, "I don't even want to know. That's who I'm speaking of. Don't go into that." (emphasis added).

B.

The mortgage loan transaction for the Woodstock Hotel never was consummated. By October 1974 the government had closed down Operation Cleveland and had sold the Gerro Trucking Company.

On December 9, 1975 a Southern District grand jury returned indictment 75 Cr. 1194 which charged Provenzano and Bentro with a conspiracy to offer DePerno, a union official, a kickback to influence actions in his official capacity. A superseding indictment, also 75 Cr. 1194, was returned on September 21, 1977 naming the same two defendants.

The history of the indictments in 75 Cr. 1194 is set forth in Judge Bonsal's opinion of November 11, 1977. United States v. Provenzano, 440 F.Supp. 561 (S.D.N.Y.1977). The upshot was that Judge Bonsal, upon motions by both defendants, ordered the original and superseding indictments in 75 Cr. 1194 dismissed without prejudice to the government's seeking a new indictment. Between the time of informant Goldfarb's cooperation and his testimony before the second grand jury, he had had a change of heart about the case. In a letter dated October 7, 1977 to Barbara Jones, the Assistant United States Attorney...