U.S. v. Tamargo, 80-5049

• Decision Date: 17 February 1981
• Docket Number: No. 80-5049,80-5049
• Citation: 637 F.2d 346
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Ray TAMARGO, Linda Gail Bowling Scott and Angelo Cannata, Defendants-Appellants. . Unit B
• Court: U.S. Court of Appeals — Fifth Circuit

Page 346

637 F.2d 346

UNITED STATES of America, Plaintiff-Appellee, v. Ray TAMARGO, Linda Gail Bowling Scott and Angelo Cannata Defendants-Appellants.

No. 80-5049.

United States Court of Appeals, Fifth Circuit.

Unit B

Feb. 17, 1981.

Walter M. Lopez, Jr., John R. Lawson, Jr., Tampa, Fla., for Ray Tamargo; Ray Tamargo, pro se.

Gerald R. Herms, Rhea F. Law, Tampa, Fla., for Linda Gail Bowling Scott; Linda Gail Bowling Scott, pro se.

Gregory, Cours, Paniello, Johnson, Hayes & Hoft, Paul B. Johnson, J. Michael Hayes, Tampa, Fla., for Angelo Cannata.

Gary L. Betz, U. S. Atty., Eleanore J. Hill, Asst. U. S. Atty., Tampa, Fla., Mervyn Hamburg, Joan M. Azrack, Attys., Crim. Div., Appellate Sec., U. S. Dept. of Justice, Washington, D. C., for plaintiff-appellee.

Appeals from the United States District Court for the Middle District of Florida.

Before TUTTLE, GODBOLD and HILL, Circuit Judges.

TUTTLE, Circuit Judge:

This is an appeal from the conviction of the three appellants, each on several charges of violating the Federal Mail Fraud statute and for the misapplication of funds granted under the Comprehensive Employment and Training Act, in violation of 18 U.S.C. § 665(a). Appellant Bowling also appeals from her conviction on two counts of making false statements to a federal agency, in violation of 18 U.S.C. § 1001. The appellants were also charged with conspiracy to defraud the United States in violation of 18 U.S.C. § 371, but, the jury being unable to reach a unanimous verdict on that charge, the court declared a mistrial as to it.

The appellants present the following issues in their appeals here:

1. Whether the statute governing the misapplication of CETA funds, 18 U.S.C. 665, is constitutional.

2. Whether the evidence was sufficient to support the convictions of each of the appellants.

3. Whether the district court or the prosecutor improperly commented on appellant Bowling's failure to take the stand.

4. Whether the district court erroneously excluded a defense exhibit on hearsay grounds.

5. Whether the district court's instructions to the jury were erroneous.

I. STATEMENT OF THE CASE

A careful study of the record reveals that there was evidence from which the jury could find beyond a reasonable doubt the following facts:

Prior to June 1975, one Eugene O'Steen owned a group of 11 bars in Tampa. In June he sold them to a company named Spigrin, Inc. Nine of these bars were what were known and identified by the witnesses as "black bars" which, according to all of the testimony, had the peculiar characteristic of not selling mixed drinks. Instead, they served a primarily black clientele on a "package store" basis. That is, they sold beer, wine, and liquor by the bottle or in packages from which the drinks could then be poured by the purchaser at tables or at the bar. Purchasers who wished to concoct their own mixed drinks could obtain the necessary bottled ingredients from an icebox, together with such ice as they wished to take. At the time of the purchase, appellant Tamargo, an attorney, was a shareholder, an officer, and the operating manager of Spigrin. The corporation had four other shareholders, one of whom was Cesar Rodriguez, with whom appellant Cannata, had a business relationship. ¹ At this time Cannata was the executive director of the Hillsborough-Tampa Comprehensive Employment Program (TCEP) which held the contract with the CETA officials to administer the federal funds for the county of Hillsborough and city of Tampa.

At the time of the sale, O'Steen had a manager and several barmaids in each bar. Initially, he went through the operation with each new manager he hired so that the new employee would understand the sales and inventory system that was used. He would show the new employees how to work the cash register, how to check the cash register out, how to count the money, and how to keep the inventory. The operation of the bars was "fairly simple." He could go through the entire procedure with a new employee in a single day. The nine "black bars" used what was known as a "perpetual inventory" system by which the items sold were replaced. The tag listing the brand name was placed on each bottle. When the bottle was sold the tag was taken off and placed on a metal spindle next to the cash register, so that these would show at the end of the day how much of each item had been sold. The beer and mixer inventory was kept according to the number of cases sold. At the end of each day, the quantities sold were calculated according to the number of tags on the spindle and depletion of beer and chaser boxes. The sales for the day were then recorded on a preprinted inventory sheet; then the tags, cash register tapes and the inventory sheets were sent daily to the main office. From there the tags and inventory sheets were sent to the warehouse where the inventories were then replenished according to the amount sold the previous day.

Shortly after the sale, Cannata's office suggested to the head of the recruitment program, one Didier, that he should approach Spigrin as a potential employer under the TCEP plan. After a short delay in the production of a contract with Spigrin, Cannata inquired about it, but was told that Didier's staff had had a difficult time reaching Tamargo. Thereupon, Tamargo showed up in Cannata's office where Mrs. Belliveau, having charge of the contract, negotiated with Tamargo in Cannata's presence for the original CETA authorization. This authorization consisted of an agreement by TCEP to pay 50 percent of the salaries of the "trainees" with a specified training period (here six weeks) for the three categories of employees, bar managers, accounting clerks and carpenters. ²

It was highly unusual for an employer contract to be prepared or negotiated in the executive director's office. ³

At the time of the sale, O'Steen had used an employer named Ed Gilley to supervise the nine "black bars." Spigrin engaged Gilley to continue performing that same service. At about the time Gilley took over for Spigrin, Tamargo told him that the bars were not doing well financially and that they had to cut the payroll. He directed Gilley to fire most of the managers who had worked for O'Steen, and to replace them with managers hired through TCEP. Tamargo told Gilley that TCEP would be paying one-half the managers' salaries. He did not tell Gilley that the new employees were to be trained or that TCEP was a training program. He did not give Gilley any instructions for establishing supervision for the trainees. Thereafter, any applicant for employment was referred by Gilley to TCEP. They were then referred back to Spigrin as trainees. Gilley would brief the new employees on the bar operation and then leave them to begin work managing Spigrin bars by themselves, without any person being present either to supervise or train them. Gilley never trained anyone. Spigrin referred several of the persons who were employed as managers to TCEP and TCEP referred them back to Spigrin as trainees. When they were assigned as "bar managers" they got from 10 minutes to one hour's instructions in the operation of the bar from Gilley, or from a barmaid, or from some other trainee. They received either no training whatever or no training more than the few minutes given them by Gilley. Thereafter, they had no regular contact with the Spigrin operation, except for an occasional visit by Gilley.

The same lack of training was apparent in the case of a "carpenter" trainee and an "accountant clerk" trainee subsequently hired by Tamargo. The carpenter, a man named Mathias, had previously fixed up a bar for Cesar Rodriguez; Tamargo had seen the work and was pleased with it and when Mathias applied to him for a job as carpenter, Tamargo indicated that he was willing to employ him because of the quality of the carpentering that he had seen done by Mathias. Thereafter, he did remodeling work at the Spigrin bars. He had no training and no supervision.

Linda Bowling showed up at TCEP to apply for a job training certification to work for Spigrin as an "accounting clerk." Linda Bowling had been a secretary to Cannata who was then director of TCEP, for about a year some five years previous to this occurrence. She went to work in May, 1975 for Spigrin, at which time Tamargo sent her to the O'Steen offices to familiarize herself with the O'Steen business operations before they were taken over by Spigrin. She worked under O'Steen's bookkeeper, whom Tamargo had asked to show Bowling the bookkeeping, payroll, and accounting systems. She worked there for approximately one month before the sale was completed. Upon completion of the sale, the O'Steen bookkeeper's daughter who had been working there also, joined the Spigrin staff as an accountant clerk, not under the TCEP program. Shortly thereafter, Bowling made her appearance seeking TCEP approval for a job. After discussion with Cannata, Didier decided that Bowling was eligible for a training job as "accounting clerk." She started work on July 23 as head of the Spigrin office, receiving no further training from anyone and reporting to no one other than Tamargo, as the owner of the business. There was no one employed by Spigrin who either purported to, or actually did, give her any training.

In making application for the job with TCEP, Bowling signed two documents in connection with her application, on one of which she stated that she had been unemployed for 20 weeks, with the last date of employment on March 25, 1975, and on the other of which she stated that her last employer had been the Hillsborough County Museum, where she had served as public relations director. She made no reference to her prior employment with Spigrin, the company for which she had just received a month's training under the former owner.

Shortly after the beginning of the six weeks period, Tamargo approached Didier requesting an extension of the subsidized training periods from six weeks to six...