U.S. v. Tashjian, s. 79-1447

• Citation: 660 F.2d 829
• Decision Date: 30 September 1981
• Docket Number: 79-1448,Nos. 79-1447,s. 79-1447
• Parties: UNITED STATES of America, Appellee, v. Charles TASHJIAN, Appellant. UNITED STATES of America, Appellee, v. James CAMPBELL, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 829

660 F.2d 829

UNITED STATES of America, Appellee, v. Charles TASHJIAN, Appellant.

UNITED STATES of America, Appellee, v. James CAMPBELL, Appellant.

Nos. 79-1447, 79-1448.

United States Court of Appeals, First Circuit.

Argued Jan. 7, 1981.

Decided Sept. 30, 1981.

James P. Duggan, Boston, Mass., for appellant Charles Tashjian.

Robert A. Stolzberg, Boston, Mass., with whom Dangel & Sherry, P.C., Boston Mass., was on brief, for appellant James Campbell.

Louis M. Fischer, Atty. Dept. of Justice, Washington, D.C., with whom Edward F. Harrington, U.S. Atty., Stephen H. Jigger, Boston, Mass., and Stanley Greenidge, Washington, D.C., Sp. Attys., Dept. of Justice, were on brief, for appellee.

Before COFFIN, Chief Judge, BOWNES and BREYER, Circuit Judges.

BOWNES, Circuit Judge.

Charles Tashjian and James Campbell appeal their convictions on one count of receiving stolen property in violation of 18 U.S.C. § 2315 and one count of fraudulently transferring property in contemplation of bankruptcy in violation of 18 U.S.C. § 152. Campbell also appeals his conviction on one count of mail fraud in violation of 18 U.S.C. § 1341 and one count of using a fictitious name in furtherance of mail fraud, contrary to 18 U.S.C. § 1342. ¹ As the principal grounds for reversal, the appellants assert, (a) that various counts of the indictment were impermissibly and prejudicially joined for a single trial and (b) that numerous incidents during the proceedings below, some the result of prosecutorial misconduct, so tainted the proceedings as to deny them a fair trial. In addition, Campbell challenges his convictions on a variety of other grounds.

Tashjian and Campbell were among fifteen defendants ² named in a twenty-four count indictment. ³ The core of the indictment, Count One, charged all of the defendants and five unindicted individuals conspired over a five-year period to operate a bust out bankruptcy fraud enterprise in violation of Title IX of the Organized Crime Control Act, known as the Racketeer Influenced and Corrupt Organization Act (RICO), 18 U.S.C. § 1962. ⁴ The remaining counts charged different subgroups of the defendants with the actual commission of mail frauds, extortion, bankruptcy frauds, and the transportation and receipt of stolen goods. These alleged offenses were characterized by the Government as specific instances of the "pattern of racketeering activity," see 18 U.S.C. § 1961(1), (5), and § 1962(c), through which the bust out enterprise would pursue its objective. Although the jury acquitted both Tashjian and Campbell on Count One, we first briefly describe the central events of the alleged, though unproven, conspiracy as the context for the appellants' challenge to their convictions on other counts.

As portrayed by the Government, the conspiracy began in May, 1974, when Tashjian and Campbell met with Kenneth Weiner, ⁵ who was then operating Abington Discount of Abington, Massachusetts, as a bust out, obtaining merchandise on credit with no intention of paying for it and selling it at below "cost" prices. ⁶ Tashjian proposed to Weiner that in exchange for a guaranteed fifty percent of the invoice price, ⁷ Weiner sell his goods exclusively to him. After checking with business associates about Tashjian, Weiner readily accepted. For the next three months, Weiner sold most, though not all, of his bust out to Tashjian at the agreed price. During this same period, Weiner introduced Tashjian to the operators of other bust out stores, including defendants Thomas DeChane, Ronald Davies and Allan Klein. Tashjian purchased bust out goods from these operators and supplied most of them at different times with false credit references to facilitate their fraudulent orders from various manufacturers. Sales to Tashjian by the bust out operators, including Weiner, were subject to a ten percent protection fee exacted by another defendant, Richard DeVincent, who often delivered Tashjian's payments to the operators. DeVincent's allegedly extortionate transactions with Weiner and Allan Klein were the source of two counts in the indictment not directly at issue in this appeal.

In August of 1974 Tashjian learned through his subordinate, Michael DellOrfano, that Weiner desired to sell Abington Discount. Tashjian offered to buy the store, Weiner agreed, and from then until December, 1974, when Abington filed in bankruptcy, Tashjian and Campbell, assisted by DellOrfano and defendant Frederick Benjamin, operated the store as a bust out. At the time he bought Abington, Tashjian arranged with DellOrfano to have DellOrfano's parents serve as straw owners of the corporate stock.

After busting out Abington Discount, Tashjian, assisted by Campbell, devoted most of his commercial efforts to the operation of Gerry's Bargain Center, located in Whitman, Massachusetts. Throughout 1975 and 1976, Tashjian purchased merchandise from various bust out operators. His sources for bust out goods included Allan's Tape and Stereo, owned by Allan Klein; Warren's Gift Co. and Warren's Enterprises, operated by defendants Ronald Davies and Thomas DeChane; Gallant Discount, operated by defendant Joseph Ricci (who also had some connection with Warren's Enterprises); Cinema Sport and Music Co., operated primarily by Ricci with some aid from Davies; Village Discount, operated by Ann and Barry Silver (with assistance from their partners Davies and Ricci); and Bapi Services Co., operated by Campbell and defendant Gerald Dyer. Campbell joined Dyer at Bapi Services in 1976 after leaving Gerry's Bargain Center because of an unexplained disagreement with Tashjian. As in his dealings with Weiner, Tashjian apparently paid these bust out operators a maximum of fifty percent of the operator's invoice price. In order to assure exploitable credit terms with their suppliers, the operators obtained false credit references both from Tashjian and from each other. Tashjian and the bust out operators also shared their knowledge as to which suppliers were particularly easy marks for obtaining merchandise on credit.

Except for several deals between Tashjian and Village Discount early in 1977, we are left in the dark about the activities of the alleged conspiracy during that year. In 1978 Tashjian secured a new source of bust out goods when approached in August by defendant Walter Downing, who was operating Vangel Marketing, Inc., as a bust out. Because of Tashjian's fear that he was the subject of a criminal investigation, which proved to be well-founded, he arranged for Downing to sell his goods to Pete's Discount, which was operated by defendants Larry Martin and Mitchell Weissman. Although Downing actually sold his bust out goods to Martin and Weissman, not Tashjian, it was Tashjian he turned to for relief when Martin and Weissman fell substantially behind in their payments. For reasons not important to this appeal, several months after his initial conversation with Tashjian, Downing decided to cooperate with the FBI in its investigation of bust out bankruptcy frauds. In February, 1979, a grand jury returned the indictment that initiated this case.

Severance

Both Tashjian and Campbell unsuccessfully moved before trial to sever their cases from those of the other defendants and renewed these motions several times during the trial. On appeal, they contend that the initial joinder exceeded the limits imposed by Federal Rule of Criminal Procedure 8(b). Campbell also argues that the district court abused its discretion in refusing to grant a severance pursuant to Federal Rule of Criminal Procedure 14.

The appellants charted their course on this issue in light of our decision in United States v. Turkette, 632 F.2d 896 (1st Cir. 1980), in which we held that Title IX of the Organized Crime Control Act, known as the Racketeer Influenced and Corrupt Organization Act (RICO), 18 U.S.C. §§ 1961-1968, applies only to "legitimate" enterprises. See 18 U.S.C. §§ 1961(4) ⁸ and 1962. According to the appellants, many of the counts that comprised the indictment could not have been joined under Rule 8(b) ⁹ if it were not for Count One, which, because the enterprise it alleged was wholly illegitimate, must be adjudged invalid in light of Turkette. Since oral argument of this appeal, however, the Supreme Court has completely undercut the appellants' position. In United States v. Turkette, --- U.S. ----, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981), the Court concluded that the proscriptions of RICO reach all enterprises, both legitimate and illegitimate, and thus reversed our decision.

With the problem of RICO's scope resolved adversely to the appellants, we see no reason to question the validity of the joinder under Rule 8(b). Count One embraced all of the acts and transactions upon which the other twenty-one counts were based, thus providing the link necessary for joinder of those counts. See United States v. Weisman, 624 F.2d 1118, 1129 (2d Cir. 1980), cert. denied, --- U.S. ----, 101 S.Ct. 209, 66 L.Ed.2d 91 (1980), United States v. Luna, 585 F.2d 1, 4 (1st Cir.), cert. denied, 439 U.S. 852, 99 S.Ct. 160, 58 L.Ed.2d 157 (1978); United States v. Adams, 581 F.2d 193, 197 (9th Cir., cert. denied, 439 U.S. 1006, 99 S.Ct. 621, 58 L.Ed.2d 683 (1978). Neither the appellants' brief nor our review of the record reveals any evidence that the Government acted in bad faith in bringing Count One. The breadth of the alleged conspiracy does not in itself evidence an impermissible prosecutorial objective, but rather simply reflects the fact that RICO enables the Government to cast a wider net than was possible under traditional conspiracy principles. See United States v. Elliott, 571 F.2d 880, 902-03 (5th Cir.), cert. denied, 439 U.S. 953, 99 S.Ct. 349, 58 L.Ed.2d 344 (1978). Nor does the jury's acquittal of Tashjian and Campbell on Count One undermine the district court's implicit conclusion that there was a sufficient factual basis to Count One to permit joinder of the twenty-two counts. See ...