United States v. Corallo
| Decision Date | 08 July 1969 |
| Docket Number | No. 331-334,Dockets 32686-32689.,331-334 |
| Citation | 413 F.2d 1306 |
| Parties | UNITED STATES of America, Appellee, v. Antonio CORALLO, Henry Fried, Daniel J. Motto and S. T. Grand, Inc., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Second Circuit |
Douglas S. Liebhafsky, Asst. U. S. Atty., New York City (Michael S. Fawer, Arthur A. Munisteri, Charles P. Sifton, Asst. U. S. Attys., and Robert M. Morgenthau, U. S. Atty., for the Southern District of New York, New York City, on the brief), for appellee.
Jacob Kossman, Philadelphia, Pa., for defendant-appellant Antonio Corallo.
Arthur Karger, New York City (Alfred Donati, Jr., and Zoloto, Karger & Zurkow, New York City, on the brief), for defendants-appellants Henry Fried and S. T. Grand, Inc.
James M. LaRossa, New York City, (Herald Price Fahringer, Buffalo, N. Y., on the brief), for defendant-appellant Daniel J. Motto.
Before MEDINA, WATERMAN and KAUFMAN, Circuit Judges.
Antonio Corallo, Henry Fried, Daniel J. Motto and S. T. Grand, Inc. appeal from judgments convicting them of conspiracy to use the telephone as an interstate facility with intent to violate the New York State bribery laws. The federal statutes involved are the general conspiracy law, 18 U.S.C. Section 371, and 18 U.S.C. Section 1952, which makes it a crime against the United States to use an interstate facility with intent to "promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity," including bribery in violation of state law. The indictment, handed down December 18, 1967 charged appellants together with James Marcus, Herbert Itkin and Charles Rappaport. Carl D'Angelo, Jr., is named as a co-conspirator but not as a defendant. Before the trial Marcus pleaded guilty and the case against Itkin was severed. After a jury trial presided over by Judge Edward Weinfeld, Rappaport was found not guilty and appellants were convicted. The principal, but not the only witnesses for the prosecution were Marcus and Itkin.
While the meetings, conversations and acts of the conspirators, and the various maneuverings, developments, sub-plots and backings and fillings are complicated and cover an extended period of time, the charge itself is a simple one. It is that Marcus, as Water Commissioner of the City of New York, had the sole discretionary power to award, without public bidding, on a cost-plus basis, a contract involving an estimated cost of $500,000 to $1,000,000, for the cleaning of the Jerome Park Reservoir in the Bronx; that appellants conspired with Marcus to arrange a kickback from Fried and S. T. Grand, Inc., Fried's company, if Marcus awarded the contract to Grand; and that the interstate use of the telephone was reasonably in the contemplation of the conspirators because of the nature of the negotiations and the necessity for caution and secrecy incident upon the collection of the kickback, as Motto, a principal negotiator, was a resident of Connecticut.
THE CONSPIRACY AND APPELLANTS' PARTICIPATION IN IT.
ALLEGED ERRORS IN THE INSTRUCTIONS TO THE JURY AND IN REFUSALS TO CHARGE AS REQUESTED.
Proof of Events After the Award of the Contract to Fried on November 23, 1966 Was Relevant to the Crime Charged in the Indictment.
Whatever May Have Been Itkin's Contact With the FBI Nothing in This Record Supports Appellants' Claim That He Participated in the Conspiracy as a Government Agent.
Itkin's Participation in This Conspiracy Was Wholly on His Own. The Record Does Not Sustain Appellants' Claim That Itkin Participated as a Government Agent Pretending to Be a Conspirator.
The Request for Instructions on the Subject of Entrapment Was Properly Denied.
The Trial Judge Properly Charged That in Prosecutions in Federal Courts for the Commission of Federal Crimes the Testimony of an Accomplice Requires No Corroboration to Sustain a Conviction.
The Requests to Charge on the Subject of Extortion Were Properly Denied.
AFTER CONSIDERING "ALL THE EVIDENCE IN THE CASE" THE JURY WAS WARRANTED IN FINDING THAT FRIED AND GRAND PARTICIPATED IN THE CONSPIRACY WITH REASONABLE ANTICIPATION THAT THE INTERSTATE TELEPHONE WOULD BE USED BY THE CONSPIRATORS OR SOME OF THEM TO EFFECT THE PURPOSES OF THE CONSPIRACY.
THE CONDUCT OF THE TRIAL.
The Grand Jury Testimony of Fried and Motto Was Properly Received and It Was Not an Abuse of Discretion to Deny the Motions for a Severance.
We Find Nothing Improper or Prejudicial in Certain Comments by the Trial Judge.
In View of the Direct Examination of Fried and His Testimony on Cross-Examination by Counsel for Other Appellants to Which No Objection Was Raised on Fried's Behalf it Was Proper for the Trial Judge to Ask Fried Whether Prior to the Trial He Had Informed the Prosecutor that Part of His Testimony Before the Grand Jury Was False.
THE CONSPIRACY AND APPELLANTS' PARTICIPATION IN IT.
Even a superficial study of the record indicates a substantial basis for the findings of the jury that there was in fact such a conspiracy and that each of the appellants was a knowing participant in it. Fried testified and admitted that he told Itkin he had paid $40,000. There was proof of the extensive use of the telephone both to Motto and his Connecticut residence and from Motto in Greenwich, Connecticut, to various members of the conspiracy in New York City, corroborated in many instances by telephone toll slips produced by the Telephone Company. Moreover, the web of association between the appellants and Marcus and Itkin is clearly established. With this in mind, we turn to our chronological statement of the facts, based upon the view of the testimony and exhibits most favorable to the prosecution.
James Marcus began his career in city politics by serving as an assistant campaign manager to John Lindsay as Lindsay ran for election as Mayor of New York in the Summer and Fall of 1965. In June or early July, 1965, Marcus was introduced to Herbert Itkin, a lawyer with connections in labor circles. He came to see Itkin frequently, until, after the election, he saw him practically every day. Itkin, in turn, introduced Marcus, in July, to Daniel Motto who was President of Local #350 of the Bakery & Confectionery Workers Union in Long Island City, and head of the Labor Non-Partisan League. Marcus hoped to gain an endorsement of Lindsay by Motto and by Motto's union supporters. With this end in view Marcus saw Motto several times during the campaign. After Lindsay's election in November of 1965, Marcus continued to see Motto and at one such meeting, in December of that year, when they went to a diner next door to Motto's Long Island City office for a cup of coffee, Motto introduced Marcus to Antonio Corallo, describing him simply as "my cousin Tony." In that same month, Itkin and Marcus, with several others, formed Conestoga Investments, Ltd., to discover and promote the financing of investments in foreign countries.
In January of 1966, as the new administration took office, Marcus was given an office at the Municipal Building, in the Water Department. Marcus acted for a time as a liaison between the new administration and the Water Department, and, once he was sworn in as Assistant to the Mayor in March, 1966, he began to oversee the activities of the Department. In the course of this supervision, in March, he learned from Abraham Groopman, then Deputy Chief Engineer of the Department, that the Jerome Park Reservoir in the Northern Bronx was in bad shape. The previous fall, in November of 1965, heavy winds had roiled the reservoir and an accumulation of sludge that lay at the bottom of the basin had risen to the top and gone out into the water distribution system of the Bronx. There were many complaints of dirty water, odors and bad tastes. Temporary measures were taken but, as the problem recurred, more drastic measures became necessary. The reservoir had not been cleaned since its opening in 1905 and its huge size — 97 acres in surface area and 750 million gallons of water in capacity — as well as the apparently huge amount of sludge presented difficulties beyond the resources of the Water Department to remedy.
An emergency contract was proposed by the engineers of the Department to Marcus. By this procedure a qualified contractor is selected by the Commissioner to perform the job. The contractor is paid his costs plus an allowance for overhead and a specified profit, subject, of course, to audit and revision by the Comptroller's office. The letting of the contract is within the sole discretion and is the sole decision of the Commissioner, but he normally takes into consideration the advice and recommendation of his engineers. Emergency contracts are used when, as in the Jerome Park situation, the job is too large for the Department, the scope and method of work are not fully determinable, and the operation must be performed within a limited amount of time, that is to say, in the Winter of 1966-1967, so the reservoir could be back in service in the Spring of 1967. Accordingly, in the Spring and Summer of 1966, discussions and consultations occurred within the Department concerning the best method to be used and the best contractor to do the job.
Marcus, meanwhile, in April, 1966, purchased 2,000 shares of Xtra stock at an average cost of about one hundred dollars a share. He purchased the stock on margin, which meant that he had to put up only a small portion of the purchase price in cash and the balance would be financed by the brokerage house, in this case Koenig & Co.
Shortly after the purchases, the stock went down drastically, falling to the low eighties. Koenig & Co. called repeatedly for more money to cover the stock purchases. Itkin had invested $6,000 of his wife's money in the stock and Marcus turned to him for advice. Itkin suggested...
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