United States v. Marchesani

• Decision Date: 05 April 1972
• Docket Number: No. 71-1620 and 71-1621.,71-1620 and 71-1621.
• Citation: 457 F.2d 1291
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Bernard MARCHESANI, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Clarence STEPHANS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

457 F.2d 1291 (1972)

UNITED STATES of America, Plaintiff-Appellee, v. Bernard MARCHESANI, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Clarence STEPHANS, Defendant-Appellant.

Nos. 71-1620 and 71-1621.

United States Court of Appeals, Sixth Circuit.

April 5, 1972.

Philip Gillis, Detroit, Mich., for defendants-appellants; Louisell & Gillis, Detroit Mich., on brief.

Shirley Baccus-Lobel, Atty., Dept. of Justice, Washington, D. C., for plaintiff-appellee; Sidney Glazer, Atty., Dept. of Justice, Washington, D. C., James H. Brickley, U. S. Atty., Detroit, Mich., on brief.

Before PECK, McCREE and BROOKS,^* Circuit Judges.

JOHN W. PECK, Circuit Judge.

Defendants-appellants Marchesani and Stephans were convicted under Count I of a four-count indictment which charged them with conspiring to use extortionate means in attempting to collect an extension of credit in violation of 18 U.S.C. § 894.¹ Marchesani was also found guilty under Count III of the indictment which charged the use of extortionate means on or about October 30, 1968, in attempting to collect an extension of credit. Verdicts of acquittal were returned by the jury in the trial court as to Counts II and IV. Both appellants were sentenced to twenty-years imprisonment under Count I and Marchesani received an additional twenty-year sentence under Count III, the sentences to run concurrently. They raise seven issues for reversal on this appeal.

The convictions herein stem from Marchesani's and Stephans' alleged participation in the so-called "juice" racket. The "juice" racket involves the extension of loans to individuals at illegal interest rates followed by the use of fear tactics to coerce the victims into paying the interest, or "juice," when due. The victim in the present case, as charged in the indictment, was one Phillip Jebrail, who borrowed money on a series of loans evidenced by notes from Marchesani from 1964 through 1968. The period of the conspiracy was stated in the indictment to run from December 1, 1965, to March 6, 1969, as this was the period during which Marchesani was alleged to have conspired with Stephans and with a third co-conspirator, Salvatore Agosta, to extort the illegal interest from Jebrail. Agosta was not named as party defendant in the present case because, according to the Government, there was no evidence that he continued to participate in the conspiracy past the date of enactment of 18 U.S.C. § 894, which was May 29, 1968.

Jebrail testified at trial that he paid the illegal interest to Marchesani until sometime in 1966, when Agosta began making the collections. Then in the spring of 1967, Stephans started working with Marchesani in collecting the money and this continued into 1969. The testimony at trial indicated that Jebrail paid the following approximate amounts as interest over this period: $3,530.00 in 1965, $12,790.00 in 1966, $21,180.00 in 1967 and $24,500.00 in 1968.

For each of the loans during the above period, Jebrail was paying interest at the rate of 10% per month. Appellants had him sign notes for the loans, however, which reflected an interest rate of 6% annually. Prior to 1967, the notes had been returned to Jebrail upon repayment of a loan. Beginning in that year, the procedure was changed and either Marchesani or Stephans would destroy the note of a repaid loan in Jebrail's presence. Several times they showed the appropriate note to Jebrail and then burned it. On one occasion, Stephans and and Jebrail went to the washroom of a restaurant where Stephans tore up one of the notes and flushed it down a toilet.

Jebrail stated that during this period, Marchesani and Stephans conveyed numerous implied and direct threats to him which put him in a state of fear as to the safety of both himself and his family. At times, Marchesani and Stephans informed him of the fate of other persons who had failed to make similar interest payments.

One such incident which was related to Jebrail involved threats made to another victim, Ed Scott and his family. Marchesani and Stephans told Jebrail that when Scott was delinquent in his payments, they went to his house and put a gun "on his head." They slapped Scott and made threats against his wife. Scott thereupon promised to keep his payments current. Jebrail stated that after being informed of this incident he felt fear and anxiety for himself and his wife. Mrs. Scott testified at trial concerning the loans which she and her husband had made from Marchesani and confirmed that he and some other men had come to their place of business and made threats against them.

Another of the incidents testified to by Jebrail occurred on August 15, 1968. On that date, Jebrail went to Marchesani's house to discuss a payment of $1,300.00 which was due four days later. He testified that Marchesani warned him:

"You\'re going to pay that money or you\'re dead. You see what happened to Louis Silas. Both of his eyes are still black and his face will never be the same. He wound up in the hospital, and he\'ll still have to pay the money. Worse things can happen to you. You\'ve got a nice family and a couple of kids."

Thereafter, around October 30, 1968, Jebrail again met with Marchesani and Stephans concerning the payment of interest on the loans. He testified that Marchesani again told him:

"* * * You know you got to pay or you\'re dead. There\'s no way out. * * * Remember what I told you about Silas. He still isn\'t right. There\'s a lot of worse things. You\'ve got a nice family and you got two nice kids. * * * Just try to bring it down and get the money or you\'re dead."

Jebrail testified that at this point he was desperate and had nowhere to turn. He was continually late in the interest payments and had no way of obtaining the money to make them. He stated that out of fear for the safety of himself and his family, he decided to contact the Federal Bureau of Investigation whose subsequent investigation of the case led to the present prosecutions.

At trial, the defense attempted to show that Jebrail went to the F.B.I., not out of fear of reprisals by Marchesani and Stephans, but rather with an offer to testify against them in order to avoid a pending federal prosecution against him for use of interstate facilities in connection with bookmaking operations. Jebrail was questioned extensively by both the prosecution and the defense in the present case as to these gambling activities. He admitted that throughout the entire period of the alleged extortion herein, he was a heavy gambler, engaged primarily in race track betting, and that he needed the loans from Marchesani to finance these activities. Although he was never employed during these years, he was receiving a pension from the Federal Government for an illness he sustained as a member of the Armed Services during World War II. Jebrail's family also was receiving income from his wife's job.

Accompanying the gambling charges against Jebrail was a forty-three page affidavit which purported to detail Jebrail's activities with a particular bookmaker. At one point in the cross-examination of Jebrail by defense counsel, the Government objected to use of the affidavit in the framing of the questions. The District Court sustained the objection and limited the cross-examination by refusing to permit "a line by line detailed examination of the contents" of the affidavit and stated that Jebrail's background and his activities during the period of the affidavit had already been fully explored. The Court ruled that any facts relevant to the testimony of Jebrail could be pursued, but that defense counsel would not be permitted to, in effect, put the witness on trial for these other charges due to the possibility of confusion of the issues in the minds of the jurors.

Also brought out at trial was Jebrail's extensive involvement with fraudulent schemes through which he sought to secure the funds to pay Marchesani and to gamble. In one such scheme, Jebrail would purchase television sets on credit and then sell them as "hot" or stolen merchandise. He admitted that in the latter part of 1968 when he was so fearful of what Marchesani would do to him, he was willing to and did resort to any new way to steal or rob to get the money necessary for the payments. These schemes were fully exposed in detail during trial.

I.

We turn now to the arguments pressed by Marchesani and Stephans in this Court. They first contend that the indictment in the present case was defective because it charged the existence of a conspiracy commencing prior to the effective date of 18 U.S.C. § 894 and was, therefore, an attempt to apply that statute retroactively. As previously stated, Section 894 became law on May 29, 1968. Yet, at trial, testimony of events occurring as early as 1964 was introduced to establish the conspiracy between Marchesani, Stephans and Agosta as charged in Count I of the indictment.

We cannot agree that receipt of this evidence effected a retroactive application of the statute. The indictment itself alleged the occurrence of two overt acts, one by Marchesani on or about October 30, 1968, and the other by Stephans on or about November 14, 1968, to show that the conspiracy continued after the statute was passed. Moreover, the District Court repeatedly reminded the jury during trial that an essential element of the conspiracy charge required a finding that during the existence of the conspiracy, one of the overt acts alleged was knowingly committed by one of the conspirators in furtherance of some object or purpose of the conspiracy. The Court instructed the jury as follows:

"* * * The statute that is alleged to have been violated in count one * * * is Title 18 of the United States Code, Section 894, which became effective May 29, 1968. Therefore, in order to find either of the defendants guilty of count one, you must find that some overt act in furtherance of the conspiracy charged was committed after May 29, 1968."

Marchesani...