U.S. v. Zichettello, Docket Nos. 98-1376

• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Citation: 208 F.3d 72
• Docket Number: Docket Nos. 98-1376
• Parties: (2nd Cir. 2000) UNITED STATES OF AMERICA, Appellee, v. THOMAS ZICHETTELLO, Defendant, FRANK RICHARDONE, RONALD REALE, RICHARD HARTMAN, JAMES J. LYSAGHT, and PETER KRAMER, Defendants-Appellants. (L), 98-1377, 98-1378, 98-1379, 98-1380
• Decision Date: 01 August 1998

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208 F.3d 72 (2nd Cir. 2000) UNITED STATES OF AMERICA, Appellee,
v.
THOMAS ZICHETTELLO, Defendant, FRANK RICHARDONE, RONALD REALE, RICHARD HARTMAN, JAMES J. LYSAGHT, and PETER KRAMER, Defendants-Appellants. Docket Nos. 98-1376 (L), 98-1377, 98-1378, 98-1379, 98-1380
August Term, 1998 UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT Argued: June 8, 1999
Decided: March 30, 2000

Appeal from convictions and sentences in a multi-defendant, RICO conspiracy case entered in the Southern District of New York (Deborah Batts, Judge). The government moves to amend the trial transcript on the ground that someone in the chambers of the trial judge incorrectly altered a portion of the transcript of jury instructions. The government's motion is granted. Appellants' arguments on the merits are rejected. We therefore affirm.

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MICHELE HIRSHMAN, Special Assistant United States Attorney, and CHRISTINE H. CHUNG, Assistant United States Attorney (Mary Jo White, United States Attorney for the Southern District of New York, Ping C. Moy, Michael S. Schachter, Alexandra A.E. Shapiro, Lewis J. Liman, Assistant United States Attorneys, of counsel), New York, New York, for Appellee.

TERRANCE G. REED, Reed & Hostage, P.C. (Christopher A. Hostage, of counsel), Washington, D.C., for Defendants-Appellants Richard Hartman, James J. Lysaght, and Peter Kramer.

BARRY D. LEIWANT, The Legal Aid Society, Federal Defender Division, Appeals Bureau, New York, New York, for Defendant-Appellant Ronald Reale.

MARTIN B. ADELMAN, New York, New York, for Defendant-Appellant Frank Richardone.

Before: WINTER, Chief Judge, OAKES, and SACK, Circuit Judges.

Judge Oakes dissents in a separate opinion.

WINTER, Chief Judge:

Following a three and one-half month jury trial before Judge Batts, Ronald Reale, the former President of the New York City Transit Police Benevolent Association ("TPBA"), Richard Hartman, a disbarred lawyer who was the TPBA's former labor negotiator and insurance broker, and James J. Lysaght and Peter Kramer, partners in the law firm Lysaght, Lysaght and Kramer ("LL&K"), who received millions of dollars in legal fees from the TPBA in return for kickbacks, appeal from their convictions and sentences. These appellants were convicted of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act ("RICO") 18 U.S.C. 1962, for their role in corrupting the TPBA and transforming it into a RICO enterprise through bribery and other illegal acts. Reale and Hartman were also convicted of various substantive offenses. Frank Richardone, a former Treasurer of the TPBA, pleaded guilty to mail fraud and related crimes. Richardone appeals only from his sentence. (For convenience purposes, "appellants" will refer only to

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the defendants who went to trial unless otherwise specified.)

This appeal involves a unique set of circumstances. Appellants' opening briefs advanced substantial claims of error based on instructions to the jury concerning aiding and abetting that were found in the official trial transcript. In its brief, the government responded by arguing that the instructions were not error or at least not reversible error. The government thereafter moved this court pursuant to Rule 10(e)(2), see Fed. R. App. P. 10(e)(2), to amend the portion of the trial transcript containing the challenged instructions. The motion was based on evidence that the transcript originally prepared by the court reporter was altered by someone in the district judge's chambers to conform to what was believed to be the version actually read to the jury. We conclude that the trial court committed no reversible error in the unusually lengthy, difficult and complex RICO conspiracy trial that is the subject of this appeal, although we must take a long and arduous detour to arrive at that result. For the reasons set forth below, the government's motion is granted. Because we reject appellants' remaining arguments on appeal, we affirm.

BACKGROUND

a) The Charges

Given the number of defendants and charges against them, we are obliged to describe those charges at length, although the reader may prefer to skip this section and use it for reference only where needed.

On September 15, 1997, the government filed a thirty-nine count indictment, S5 96 Cr. 1069 (DAB), against Reale, Hartman, Lysaght, and Kramer.¹ Counts One and Two charged them with participating and conspiring to participate in the affairs of the TPBA through a pattern of racketeering in violation of 18 U.S.C. 1962(c) & (d). These counts also alleged that the appellants had committed eleven racketeering acts in furtherance of the charged enterprise, including bribery, mail fraud, wire fraud, money laundering, and witness tampering.

Counts Three through Nineteen charged the appellants with crimes relating to the alleged racketeering acts. Count Three charged them with conspiring to defraud the Internal Revenue Service in connection with the filing of false individual tax returns by three TPBA officers -- Reale, Thomas Zichettello, a former TPBA First Vice-President, and Raymond Montoro, a former TPBA Treasurer (sometimes the "TPBA Officers") -- in violation of 18 U.S.C. 371. Counts Four through Eight charged Reale with tax evasion, in violation of 26 U.S.C. 7201. Counts Nine and Ten charged appellants with mail fraud in connection with monthly bribes of approximately $1,800 and quarterly bribes of approximately $18,000 that Hartman, Lysaght, and Kramer paid to the TPBA Officers during certain time periods, in violation of 18 U.S.C. 1341, 1346, and 2. Count Eleven charged Reale and Hartman with wire fraud in connection with a kickback Hartman paid to the TPBA Officers in connection with Hartman's designation by the TPBA as broker to sell whole life insurance policies issued by the Metropolitan Life Insurance Company ("Metlife") to TPBA members, in violation of 18 U.S.C. 1343, 1346, and 2. Counts Twelve through Fourteen charged Reale with mail fraud related to bribes paid to the TPBA Officers by the partners of the law firm Agulnick & Gogel ("A&G"), in violation of 18 U.S.C. 1341, 1346, and 2. Count Fifteen charged Reale and Hartman with conspiracy in connection with a fraudulent

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scheme to obtain matching campaign funds from the New York City Campaign Finance Board ("NYCCFB") for Reale's 1993 campaign to win the Democratic nomination for New York City's Public Advocate, in violation of 18 U.S.C. 371. Count Sixteen charged Reale and Hartman, and Count Seventeen charged Reale, with wire fraud in connection with the campaign finance scheme, in violation of 18 U.S.C. 1343 and 2. Count Eighteen charged Reale with money laundering in connection with the campaign finance scheme, in violation of 18 U.S.C. 1956(a)(1)(B)(i) and 2. Count Nineteen charged Reale with witness tampering, in violation of 18 U.S.C. 1512(b)(3) and 2.

Counts Twenty through Thirty-Nine charged Hartman and Kramer with conspiracy and substantive tax offenses related to the operation of Hartman's insurance brokerage business and its transfer to a partnership owned by Lysaght's and Kramer's spouses, in violation of 18 U.S.C. 371 and 2, and 26 U.S.C. 7201, 7206(1), 7206(2), and 7206(5).

Prior to trial, the district court severed Counts Twelve through Fourteen, which related to bribes A&G paid Reale, and the corresponding racketeering acts -- Racketeering Acts Six through Eight of Counts One and Two. See United States v. Reale, No. S4 96 CR. 1069, 1997 WL 580778, at *11 (S.D.N.Y. Sept. 17, 1997). The district court also severed Counts Twenty through Thirty-Nine, the tax offenses arising from the transfer of Hartman's insurance business. See id. at *13.

At the close of the government's case, it voluntarily dismissed Racketeering Act One, which related to monthly $1,800 bribes paid by Hartman, Lysaght, and Kramer to Reale, but only insofar as it named Lysaght. The government also voluntarily dismissed Racketeering Act Three, which charged that Hartman, Lysaght, and Kramer had paid a $100,000 bribe to Reale in connection with the life insurance scheme. On appellants' Rule 29 motions, see Fed. R. Crim. P. 29, the district court dismissed Count One -- the substantive RICO charge -- against Hartman, Lysaght, and Kramer, but not Reale. The district court also dismissed Counts Three, Nine, Ten, Eleven, Seventeen, and Eighteen, and Racketeering Act Ten, which charged Reale with having committed wire fraud and money laundering in connection with the campaign finance scheme.

The redacted and renumbered indictment² submitted to the jury contained ten counts. Count One charged Reale with Racketeering from 1990-1996 in violation of 18 U.S.C. 1962(c). Count Two charged Reale, Hartman, Lysaght, and Kramer with Racketeering Conspiracy from 1990 to 1996 in violation of 18 U.S.C. 1962(d). The indictment specified six Racketeering Acts: (i) monthly $1,800 cash bribes paid by Hartman and Kramer and received by Reale; (ii) receipt and payment in early 1992 of a $150,000 cash bribe in connection with a $750,000 payment by the TPBA to LL&K; (iii) receipt and payment of quarterly $18,000 cash bribes in 1993 and 1994; (iv) receipt and payment of a bribe arising out of the life insurance scheme, against Reale and Hartman; (v) wire fraud in connection with the campaign finance scheme, against Reale and Hartman; and (vi) tampering with a witness during a federal investigation, against Reale. Counts Three through Seven charged Reale with tax evasion. Counts Eight and Nine charged Reale and Hartman with wire fraud conspiracy and wire fraud in connection with the campaign finance scheme. Finally, Count Ten charged Reale with witness tampering.

b) Evidence at Trial

At all pertinent times, the TPBA was a labor union that represented, in...