United States v. Cioffi, 696
| Decision Date | 14 March 1974 |
| Docket Number | No. 696,Docket 73-2612.,696 |
| Parties | UNITED STATES of America, Appellee, v. Salvatore CIOFFI, Appellant. |
| Court | U.S. Court of Appeals — Second Circuit |
COPYRIGHT MATERIAL OMITTED
John Timbers, Asst. U. S. Atty., New York City (Paul J. Curran, U. S. Atty. S. D. N. Y., Elliot G. Sagor and S. Andrew Schaffer, Asst. U. S. Attys., New York City, on the brief), for appellee.
Irving Anolik, New York City, for appellant.
Before MEDINA, MOORE and OAKES, Circuit Judges.
The jury, after a trial presided over by Judge Motley, found Salvatore Cioffi guilty on both counts of an indictment charging him with conspiracy to obstruct justice and with the obstruction of justice by endeavoring to influence Perry Scheer, described as "a witness in the United States District Court for the Southern District of New York, having been duly subpoenaed to appear before a Grand Jury duly empaneled and sworn in that Court," and he appeals from the judgment of conviction. He was sentenced to concurrent terms of eighteen months imprisonment on each count and is enlarged on bail pending the determination of this appeal.
A thorough examination of the entire transcript, the exhibits and the sealed envelopes containing a quantity of alleged 3500 material that was withheld from counsel for Cioffi has convinced us that there is no merit in any of the claims of error, and that there was ample proof sufficient to sustain the verdict. We affirm the judgment appealed from.
The simplicity of the basic issue will, we think, be brought into focus if we first describe the background leading to the alleged conspiracy and then follow chronologically the acts and conversations of Cioffi that were found by the jury to have constituted the commission of the substantive crime of violating the Obstruction of Justice Act, 18 U.S.C., Section 1503.1
As so often in the past we are again in this case dealing with a so-called brokerage house operating on the New York Over-the-Counter Exchange. This firm of Kelly, Andrews & Bradley when the market was "hot" made a specialty of floating numerous underwritings of new issues of stocks of little or no value and by various deceptive and illegal practices mulcting investors. There is testimony that there was no Kelly, no Andrews and no Bradley. In any event the three persons in charge of operations at first were Stuart Schiffman, known as Stuie, Fred Miller and Perry Scheer, who turned out to be the principal witness against Cioffi. These three were all "registered representatives," which meant that they were licensed to buy and sell securities.
The activities of the firm evidently attracted the attention of Joseph Marando who decided to muscle in and who knew just how to do this. So, in October 1970 we find Marando making a loan of $25,000 to Schiffman, Miller and Scheer. This, however, was no ordinary loan but was a clear violation of the New York Criminal Law, New York General Obligations Law, Section 5-501, because it was agreed that interest at the rate of 104% per annum should be paid in weekly amounts of $500 or 2% each, in cash. The language of the professional criminal element in New York City was well known to all these people and cash was called "green" and the extortionate interest was called vigorish or "vig." This is reminiscent of what we read in the testimony in United States v. Corallo, 413 F.2d 1306 (2d Cir.), cert. denied, 396 U.S. 958, 90 S.Ct. 431, 24 L. Ed.2d 422 (1969) and United States v. Callahan, 439 F.2d 852 (2d Cir. 1971). In his testimony Scheer, in his colorful way, always referred to this as a "shylock" loan. In any event, it is right in the center of the case against Cioffi. From the cases we have had before us in the past we think it is pretty clear that such extortionate loans are often made to those making quick profits from criminal enterprises of one kind or another, and, when the "vig" is not promptly paid something is apt to happen.
The following is Scheer's description of what happened when the "vig" on this $25,000 loan was not forthcoming:
We shall hear further references to the health of Scheer's wife, who had cancer and was "totally disabled."
In August or September of 1971 Marando took over the day to day operations of Kelly, Andrews & Bradley and he had to find buyers for the stocks. One of these was a Mr. Simon who did not pay for the stock he bought. Scheer testified to a telephone conversation he heard in the office when Marando asked for the money that was due. Marando asked Simon on what floor he was located. When told it was the 27th or 30th floor Marando said that is how far you will bounce unless you come over immediately and pay for the stock you bought. Scheer says then Simon came over as requested. Judge Motley permitted the testimony as to these events, which preceded the first overt act of March 30, 1972 as alleged in the conspiracy count of the indictment. Judge Motley ruled that such testimony was allowed as background information so that the jury could understand the charges against the defendant.
As things went from bad to worse and it was necessary to give some support to the capital structure of the firm, Marando sent over 90,000 shares of Brooklyn Poly Industries stock to be subordinated and kept intact for the protection of the firm's creditors. These shares were in street names so Schiffman promptly siphoned off part of the value by using the stock as collateral for a loan from a Boston bank to satisfy a personal debt and Scheer made off with about $25,000 more by representing to the Bank of North America that the stock belonged to him and pledging it with the bank for a loan in this amount which Scheer put in his pocket. This was plain, ordinary stealing.
It should come as no surprise that the brokerage firm became bankrupt and it ceased doing business in October 1971. It had probably been insolvent as early as the time of the $25,000 Marando "shylock" loan in October 1970. The collapse of Kelly, Andrews & Bradley was immediately followed by investigations by the SEC and by the United States Attorney in the Southern District of New York.
In early November 1971 the SEC got in touch with Scheer and so did a representative of the prosecutor's office in the Southern District of New York. At about this time Marando visited the brokerage firm's mid-town office at 747 Third Avenue and told Scheer, in the presence of Miller, that an investigation was under way. He asked Scheer if he had been subpoenaed, and when he said "no," Marando told him "please don't hurt me, I am sick, please don't hurt me." This was the beginning of the conspiracy. As we shall see, Cioffi joined the conspiracy in March, 1972. There was another conversation at the office in early January 1972, at which Marando in the presence of Miller said to Scheer, that he had been subpoenaed and had already appeared in the federal courthouse. On this occasion he again said to Scheer "Please don't hurt me, I am sick." Scheer testified before the Grand Jury on January 25, 1972.
Judge Motley permitted Scheer to testify to these conversations with Marando even though they occurred before the date of the conspiracy alleged in the indictment. Since Marando was named in the bill of particulars as a co-conspirator, evidence of these events preceding the conspiracy was admissible to prove the intent, purpose and aim of the parties to the conspiracy. United States v. Cohen, 489 F.2d 945 (2d Cir., 1973).
Judge Motley instructed the jury:
The triple-headed investigation, by the SEC, the federal prosecutor and the FBI, at first related generally to the affairs of the brokerage firm and particularly to the manipulation of an issue of stock of All-State Metal Stamping Co., but it soon proliferated. Information about the $25,000 "shylock" loan by Marando must have trickled in slowly. But Marando had been alerted to the danger. This brings us to the activities of Cioffi and his involvement in the conspiracy to tamper with Perry Scheer, who Marando expected would be called to testify before the Grand Jury as a witness. Marando, of course, knew that Scheer would be a key witness as the loan was made to him and his two associates Schiffman and Miller, he had signed the demand note and he had repeatedly seen the "vig" paid in "green" to Marando. Scheer had personal knowledge of just about everything there was to know about the $25,000 loan.
Perry Scheer had...
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