U.S. v. Stanchich

Decision Date06 January 1977
Docket NumberNo. 502,D,502
Citation550 F.2d 1294
Parties1 Fed. R. Evid. Serv. 575 UNITED STATES of America, Appellee, v. Eric STANCHICH, Defendant-Appellant. ocket 76-1407.
CourtU.S. Court of Appeals — Second Circuit

David J. Gottlieb, New York City (William J. Gallagher, and The Legal Aid Society, New York City, of counsel), for defendant-appellant.

Edward J. Levitt, U. S. Dept. of Justice, Washington, D. C. (Robert B. Fiske, Jr., U. S. Atty., S. D. N. Y., and Lawrence B. Pedowitz, Asst. U. S. Atty., New York City, of counsel), for appellee.

Before KAUFMAN, Chief Judge, and FRIENDLY and OAKES, Circuit Judges.

FRIENDLY, Circuit Judge:

Eric Stanchich was convicted, after trial before Judge Pierce and a jury in the District Court for the Southern District of New York, on two substantive counts of an indictment for counterfeiting. One count charged him and Alan Michael Fitzgerald with having possessed, passed and attempted to sell a $100,000 counterfeit treasury bill in violation of 18 U.S.C. §§ 472 and 2; another count charged them with transferring and delivering the same bill in violation of 18 U.S.C. §§ 473 and 2. At the end of the prosecution's case the court dismissed a count charging the defendants with conspiring to commit the substantive crimes, in violation of 18 U.S.C. § 371. Although both defendants were convicted and appealed, Fitzgerald's appeal was separated on his request. The grounds of Stanchich's appeal are that, in view of the dismissal of the conspiracy count, it was error for the court to allow the jury to consider against Stanchich on the substantive counts what are claimed to have been inadmissible hearsay statements by Fitzgerald and that even with, or particularly without, the alleged hearsay statements, the evidence against Stanchich was insufficient to warrant submission of the substantive counts.

Although the chain of events resulting in the conviction began in October 1975, two significant pieces of background were before the jury. In August 1974 one Alan Lurie, who was seeking to finance a business venture, endeavored to enlist Stanchich's aid. Stanchich offered counterfeit treasury bills to be used as collateral but Lurie refused. In March 1975 one Robert Della Porta, with an associate, attempted to pass counterfeit treasury bills to Lurie. Knowing that Stanchich and Della Porta were acquainted, Lurie asked Stanchich whether he was aware of Della Porta's attempt to pass the counterfeit; Stanchich replied that Della Porta had told him.

In the evening of October 28, 1975, after Lurie had decided to cooperate with the Government, he placed a tape-recorded call to Stanchich's home at the Secret Service's request. When no one answered, Lurie placed a tape-recorded call to Fitzgerald. He told Fitzgerald that he had a "home" with a banker friend for very large quantities of the things that Stanchich's friend, Della Porta, had previously discussed with him. He asked Fitzgerald to arrange a meeting with Stanchich; Fitzgerald reported that Stanchich was in Europe but that Fitzgerald would call Lurie the following day.

Stanchich returned on October 30. On November 3 Fitzgerald telephoned Lurie that he had not yet spoken to Stanchich but had spoken to "his (Fitzgerald's) people" who told him a sample counterfeit bill was available. When Fitzgerald exhibited a counterfeit $100,000 treasury bill to Lurie the next day, Lurie asked if he could show the bill to "his banker." Fitzgerald replied that he would have to obtain permission from "his people." They met again later in the morning. Fitzgerald handed Lurie the $100,000 bill and said that "his people" wanted $20,000 for it. Lurie indicated this price would probably be acceptable; they arranged to meet again at 2:00 p. m. for Fitzgerald to pick up the bill.

Fitzgerald later agreed to postpone the return of the bill until the evening. After the bill had been photographed by the Secret Service, Lurie and Agent McDonnell, who was to pose as the "banker," met Fitzgerald. They returned the bill, with McDonnell pointing out that the word "payable" was misspelled. McDonnell told Fitzgerald he wished to deal in approximately $3,000,000 of bills. Fitzgerald quoted a price of 25% of face value with 10% payable on delivery; he agreed to speak with his people and arrange to close the deal in a week.

In the morning of November 10 Fitzgerald went to Lurie's office. He said that the spelling correction had been made and that "his people" had gone to a lot of trouble and expense in printing the $3,000,000 of bills and would want $20,000 to $25,000 immediately. Fitzgerald gave Lurie a sample of the corrected bill.

That afternoon McDonnell met with Fitzgerald in a Manhattan restaurant and returned the corrected counterfeit bill which Lurie in the interim had given to the Secret Service for photographing. Fitzgerald renewed his demand for $25,000, claiming he had told "his people" that he had been promised this. McDonnell insisted on doing the whole $3,000,000 deal at once. Fitzgerald agreed to endeavor to convince "his people" to that end. He was to meet McDonnell at the restaurant that evening and have an answer. The evening meeting proved inconclusive and Fitzgerald agreed to phone on November 12 at 9:15 a. m.

McDonnell left the restaurant on the north side of East 45th Street. He was followed by one Vincent Napoli. At the intersection of 45th Street and Madison Avenue, Napoli crossed to the south side and met Stanchich. Napoli then returned to the north side and continued to follow McDonnell while Stanchich proceeded on the south side. On reaching the Grand Central Station area McDonnell succeeded in evading Napoli and Stanchich; they conversed briefly, looked up and down Vanderbilt Avenue, then walked a short distance east on 45th Street, separated briefly, and then met again on the southwest corner of 45th Street and Madison Avenue.

At 8:45 a. m. on November 12, Stanchich, Napoli and Fitzgerald met and conferred for a half hour at a diner. After Stanchich and Napoli entered an automobile, Fitzgerald phoned McDonnell that he was having some difficulty. They agreed to meet at 11:00 a. m. at a downtown restaurant. Fitzgerald then entered the automobile and the three men drove downtown. Fitzgerald met McDonnell in a booth at the restaurant; Stanchich and Napoli sat two booths away. The conversation between McDonnell and Fitzgerald on the issue of immediate payment of $25,000 again proved inconclusive; Fitzgerald agreed to try again and call McDonnell at 12:15 p. m. McDonnell left the restaurant, walking east on Morris Street; he was followed shortly by Fitzgerald, who in turn was followed by Stanchich and Napoli.

Shortly before noon Fitzgerald and Napoli were seen having a heated discussion in the lobby of 2 Broadway. Stanchich joined them a few minutes later. Shortly after noon Stanchich and Napoli were observed arguing there.

About 12:15 p. m. Fitzgerald telephoned McDonnell. He refused to deliver the $3,000,000 package at one time. It was agreed that he would deliver one $100,000 counterfeit treasury bill at 2:00 p. m. at the Blarney Stone bar, also in downtown New York, in return for $25,000 which he would give to his people; the remaining $2.9 million would come later.

In the interval before the agreed time for delivery, Stanchich and Napoli strolled around the Wall Street area, with Fitzgerald walking nearby. About 1:30 p. m. Stanchich returned to the garage where the car was parked and entered after some reconnoitering. At 2 o'clock McDonnell and Fitzgerald met outside the Blarney Stone bar. Fitzgerald took an envelope out of his jacket, gave it to McDonnell and told McDonnell that it contained the $100,000 treasury bill. They entered the bar and McDonnell opened the envelope.

McDonnell then remarked that he had seen Stanchich at the restaurant where they had met that morning and also had seen an unknown man with Stanchich and asked if they were in on the deal. Fitzgerald told McDonnell not to ask questions about his end of the deal. McDonnell persisted, however, and suggested that if Stanchich and the other person were in on the deal, Fitzgerald should call them in so that McDonnell could attempt to persuade them to do the entire $3 million package at one time. Fitzgerald refused, telling McDonnell that he would get rid of the two persons by the time McDonnell returned from the bank with the $25,000. McDonnell gave a prearranged signal and Fitzgerald was arrested. Meanwhile, shortly after McDonnell and Fitzgerald entered the Blarney Stone bar, Stanchich removed his car from the garage and began to circle the area where the bar was located. About 2:05 p. m. Secret Service agents stopped the car and arrested him.

Stanchich's principal argument on appeal is that it was error for the judge to admit against him on the substantive counts what he contends to have been hearsay statements that could be properly admitted only if made by a fellow conspirator during the course of and in furtherance of the conspiracy, see F.R.Ev. 801(d)(2)(E) a condition which he claims to have been negated by the court's dismissal of the conspiracy count.

Although Stanchich's counsel speaks of a "welter" of hearsay, he singles out for special notice Fitzgerald's October 28 statement that Stanchich was in Europe, his frequent statements that he would talk to "his people," and his statement in the Blarney Stone bar, immediately before his arrest, that he would get rid of Stanchich and the other person (Napoli) before McDonnell returned. The Government answers that the Europe statement was not admitted against Stanchich; that no objection was made to the majority of the "his people" references either when offered or at the time of the charge on the admissibility of evidence; that any error in the admission of the statements was harmless; that none of the statements were hearsay; and that in any event admission of the statements was...

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