US v. Falzone, No. Cr-89-141A.

• Decision Date: 24 May 1991
• Docket Number: No. Cr-89-141A.
• Citation: 766 F. Supp. 1265
• Parties: UNITED STATES of America v. Leonard FALZONE, Salvatore "Sammy" Spano, Joseph Sacco, Gasper "Gabby" Cino, Charles Nigro, Defendants.
• Court: U.S. District Court — Western District of New York

766 F. Supp. 1265

UNITED STATES of America v. Leonard FALZONE, Salvatore "Sammy" Spano, Joseph Sacco, Gasper "Gabby" Cino, Charles Nigro, Defendants.

No. Cr-89-141A.

United States District Court, W.D. New York.

May 24, 1991.

William J. Knapp, Asst. U.S. Atty., Buffalo, N.Y., for U.S.

Harold J. Boreanaz, Buffalo, N.Y., for defendant Leonard Falzone.

Joseph LaTona, Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria, Buffalo, N.Y., for defendant Salvatore "Sammy" Spano.

Joseph DeMarie, Buffalo, N.Y., for defendant Joseph Sacco.

Robert M. Murphy, Buffalo, N.Y., for defendant Gasper "Gabby" Cino.

Joseph Terranova, Buffalo, N.Y., for defendant Charles Nigro.

DECISION AND ORDER

ARCARA, District Judge.

INTRODUCTION

The defendants, Leonard Falzone and Salvatore "Sammy" Spano, are charged by indictment with various violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c), (d). Defendant Spano is also charged with money laundering and conspiracy to launder money in violation of 18 U.S.C. §§ 1956, 371, respectively, and three counts of filing false tax returns in violation of 26 U.S.C. § 7206.

Defendant Falzone is represented in this action by Mr. Harold Boreanaz, Esq., of the law firm of Boreanaz, Carra and Boreanaz. Defendant Spano is represented by Mr. Paul J. Cambria, Jr., Esq., of the law firm of Lipsitz, Green, Fahringer, Roll, Salisbury and Cambria ("Lipsitz, Green"). The government has moved to disqualify both Mr. Boreanaz and Mr. Cambria. The government argues that disqualification is required because Mr. Boreanaz and Mr. Cambria, either personally or through their respective firms, had prior attorney-client relationships with three of the government's witnesses: Ronald Fino, John "Jack" Fortune and Philip LaRosa.

More specifically, the government alleges that Mr. Cambria had a prior attorney-client relationship with Fino and that members of his firm, Lipsitz, Green, had prior attorney-client relationships with Fortune. The government also argues that Mr. Cambria should be disqualified because a current member of the Lipsitz, Green firm, Mr. Joseph B. Mistrett, Esq., was formerly an Assistant United States Attorney ("AUSA") who assisted LaRosa with his admission into the Federal Witness Protection Program. With regard to Mr. Boreanaz, the government alleges that he had prior attorney-client relationships with both Fino and LaRosa.

Both Fino and Fortune have joined in the government's motion for disqualification. LaRosa, on the other hand, has waived any attorney-client privilege and has declined to join in the government's disqualification motion.

Concerning Fino, the defendants have previously argued that Judge Elfvin's decision in the case of United States v. Joseph P. Rosato, Cr. 88-66E, 1989 WL 153790, dated December 7, 1989, denying a similar motion by the government to disqualify both Mr. Boreanaz and Mr. Cambria based on the anticipated testimony of Fino as a government witness, should act as collateral estoppel here. The Court considered this argument separately and, in a decision dated January 24, 1991 (the "Collateral Estoppel Decision"), held that Judge Elfvin's decision in Rosato has preclusive effect in this case with regard to Mr. Boreanaz. Thus, the Court denied the government's motion to disqualify Mr. Boreanaz based on the anticipated testimony of Fino. The Court further found, however, that Rosato did not have preclusive effect in this case with regard to Mr. Cambria.

The government has moved the Court to reconsider its Collateral Estoppel Decision as it relates to Mr. Boreanaz. The government, however, has failed to present any new facts or cite any new controlling case law. It simply raises the same arguments that the Court has already considered and rejected. Thus, the government's motion for reconsideration of the Collateral Estoppel Decision is denied.

With regard to the remainder of the disqualification motion, the parties were given ample opportunity to brief their respective positions and a hearing was conducted on November 12, 19 and 26, 1990. After considering the testimony of the witnesses at the hearing, reviewing the exhibits and submissions of the parties and hearing oral argument from counsel, the Court grants the joint-motion to disqualify Mr. Cambria and Lipsitz, Green based on their prior representation of Ronald Fino and Jack Fortune. The Court denies the government's motion to disqualify Mr. Boreanaz.

STATEMENT OF FACTS

The RICO and RICO conspiracy charges set forth in the indictment cover a period of time from approximately September, 1985 through August, 1989 during which the defendants are alleged to have been members of an enterprise that engaged in the business of collecting unlawful debts, i.e., "loansharking." The unlawful nature of the debts stems from the extremely high interest rates that were charged on the money.

The government asserts that evidence of defendant Spano's efforts to collect payments from various victims will be introduced at trial. Among the victims that the government will call at trial are Philip LaRosa and Jack Fortune. The government also intends to call Ronald Fino as a witness. The government asserts that Fino's testimony will deal with the criminal relationship between Falzone and Spano.

Fino has filed an affidavit dated September 25, 1990, in which he joins in the government's motion for disqualification. Fortune, during his testimony at the hearing on November 12, 1990, also joined in the government's motion. LaRosa, on the other hand, has declined to join in the government's motion and has waived any attorney-client privilege he may have had with Mr. Boreanaz or Mr. Mistrett.

Mr. Boreanaz has been defendant Falzone's attorney for about 30 years. Mr. Cambria, on the other hand, was retained by Spano specifically for defense of the pending criminal charges. There was no attorney-client relationship between Mr. Cambria and Spano prior to this case. Both Falzone and Spano have made informed waivers of their rights to conflict free counsel.

Fino

From 1973 through 1988, Ronald Fino was the business manager for Buffalo Laborers Local 210 (the "Union"). During his tenure as business manager, the Union was represented by the Lipsitz, Green law firm. Fino consulted with Mr. Cambria and various other members of Lipsitz, Green regarding Union business on a regular basis throughout this period. Mr. Cambria also represented Fino during this period in several personal, non-Union civil and criminal matters.

In 1977, Fino retained Mr. Cambria for the purpose of collecting monies owed to Sno-Go, a company with which Fino was associated. The company was allegedly owed monies by the City of Buffalo for snow removal services.

In 1979, Fino retained Mr. Cambria to represent him with regard to a grand jury investigation of Onyx Corporation, a minority business enterprise with which Fino was associated. On November 19, 1981, as a result of this investigation, Fino, along with three other individuals, was indicted for a variety of crimes, including conspiracy, mail fraud, making false statements, obtaining false bank loans and obstruction of justice. The case went to trial and, on September 28, 1983, a mistrial was declared. The case was retried and, on March 27, 1985, another mistrial was declared. On November 19, 1985, Fino entered a plea of guilty to a misdemeanor conspiracy charge. During this entire period, from the initial investigation in 1979 until the final plea in November, 1985 and the subsequent sentencing, Fino was represented by Mr. Cambria.

Fino testified at the hearing that, in 1980, Mr. Cambria also represented him on a speeding ticket he received in Watertown, New York. Further, Fino discussed problems that he had with the Internal Revenue Service with Mr. Cambria. With regard to this tax matter, however, he was subsequently represented by another attorney in the Lipsitz, Green firm.

In 1982, Fino sought Mr. Cambria's representation with regard to injuries he suffered from a fire occurring in the MGM Grand Hotel in Las Vegas, Nevada. Mr. Cambria referred Fino to an attorney in Las Vegas, Nevada.

Fino was also called as a witness before a federal grand jury in the Western District of New York in the case of United States v. John R. Catanzaro, Cr. 88-67. He was represented by Mr. Cambria on this matter. Fino appeared before the grand jury but asserted his Fifth Amendment right not to testify.

During Fino's tenure as the Union's business manager, from 1973 to 1988, he was also serving as an informant for the FBI. He provided the FBI with information concerning Union activities and other criminal matters. Some of this information came from conversations that Fino had with Mr. Cambria and Mr. Boreanaz.

It is noted that a similar motion to disqualify Mr. Boreanaz and Mr. Cambria, based on their prior representation of Fino, was made by the government on behalf of Fino as a prospective witness in the case of United States v. Rosato, Cr. 88-66E. As stated earlier, Judge Elfvin denied the government's motion in a Memorandum and Order dated December 7, 1989.

Furthermore, a motion citing similar grounds was made before this Court in the case of United States v. John R. Catanzaro, Cr. 88-67A. The Court conducted an extensive hearing on the issue in March, 1989 and became very familiar with the facts relevant to the government's motion. However, the Cantanzaro case was transferred to Judge Curtin and resolved by plea without the disqualification motion having been decided.

Finally, another motion to disqualify Mr. Cambria, based on his prior representation of Fino, was made before Judge McAvoy of the Northern District of New York in the case of United States v. Pavlisak, et al., Cr. 89-194, 1990 WL 208705. Judge McAvoy denied the motion in an Order dated December 7, 1990.

Fortune

In late 1986, Jack Fortune retained Mr. Herbert L. Greenman, Esq., in connection with an...