US v. LOCAL 1804-1, INTERN. LONGSHOREMEN'S ASS'N

• Decision Date: 14 April 1993
• Docket Number: 90 Civ. 5618 (LBS).,No. 90 Civ. 0963 (LBS),90 Civ. 0963 (LBS)
• Parties: UNITED STATES of America, Plaintiff, v. LOCAL 1804-1, INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, et al., Defendant. Donald CARSON and Peggy Carson, Plaintiffs, v. LOCAL 1588, INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, its Officers, Executive Board, and Trustees, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

812 F. Supp. 1303

UNITED STATES of America, Plaintiff, v. LOCAL 1804-1, INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, et al., Defendant.

Donald CARSON and Peggy Carson, Plaintiffs, v. LOCAL 1588, INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, its Officers, Executive Board, and Trustees, et al., Defendants.

Nos. 90 Civ. 0963 (LBS), 90 Civ. 5618 (LBS).

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

January 14, 1993.

As Amended February 17, 1993.

As Amended April 14, 1993.

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Otto G. Obermaier, U.S. Atty., S.D.N.Y. (Chad A. Vignola, Claude M. Millman, New York City, Asst. U.S. Attys., of counsel), for U.S.

Frederic J. Gross Law Firm, Mount Ephraim, NJ (Frederic J. Gross, of counsel), for Donald Carson.

Anthony Gallagher, pro se.

Freeman, Nooter & Ginsberg, New York City (Lou Freeman, of counsel), for George Lachnicht.

Goldman & Hafetz, New York City (Frederick P. Hafetz, Susan R. Necheles, of counsel), for Venero Mangano.

Vladeck, Waldman, Elias & Engelhard, P.C., New York City (Seymour M. Waldman, Julian Birnbaum, of counsel), for ILA Local 1909.

Gleason & Mathews, New York City (Thomas W. Gleason, Ernest L. Mathews, Jr., Kevin Marrinan, of counsel), for ILA Locals 824, 1809.

Bogucki & Scotto, Garden City, NY (Robert H. Bogucki, of counsel), for ILA Local 1814.

Donna Newman, Jersey City, NJ, Law Office of Larry Bronson, Bayonne, NJ, Larry Bronson, for ILA Local 1588.

OPINION

SAND, District Judge.

On February 14, 1990, the government instituted this civil action pursuant to the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. ("RICO"), alleging a pervasive influence of organized crime over the Port of New York and New Jersey (the "Waterfront"). The complaint named as defendants six locals of the International Longshoremen's Association (the "ILA")¹, several union officers, several purported members of the Genovese and Gambino organized crime families, two waterfront employers, and two waterfront employers' organizations.² In total there were more than eighty individuals and entities named as defendants in the complaint.

The non-jury trial in this case began on April 15, 1991, and consumed approximately ten trial weeks over an eleven month period.³ Before, during, and after the trial, most of the defendants in this case either defaulted or entered into consent decrees or consent judgments with the government. As a result, only four individual defendants remain in the case today: Donald Carson, Anthony Gallagher, George Lachnicht, and Venero Mangano (collectively the "remaining defendants").

In its demand for relief, the government seeks to enjoin the remaining defendants from participating in (1) any activities on the New York/New Jersey Waterfront; (2) the affairs of the ILA, any of its locals, or any other labor organization about any matters which relate directly or indirectly to the affairs of the ILA, any of its locals, or any other labor organization; and (3) in the ownership, operation or employment of or by any Waterfront employer. The complaint also seeks to enjoin the defendants from committing any acts of racketeering activity and from associating, directly or indirectly, with any member of La Cosa Nostra. Finally, the government seeks a disgorgement of the proceeds of any violations of the civil RICO statute. Amended Complaint at 120-24.

The task before the Court is to determine whether these four defendants participated in a criminal enterprise and are liable for civil penalties set forth in the RICO statute. We must also consider the issues raised in Carson v. Local 1588, 769 F.Supp. 141 (1991), a consolidated case in which defendant Donald Carson claims entitlement to pension benefits. After careful consideration of all the evidence in this case — including live testimony which comprised more than 5000 pages in transcript form, deposition testimony, and more than ten thousand trial exhibits — this Court concludes that the Government has proved by a preponderance of the evidence the existence of the RICO enterprise. We also conclude that the government proved defendants Carson, Gallagher, Mangano, and Lachnicht's participation in the enterprise by the commission of two predicate acts. Finally, this Court concludes that defendant Carson is not entitled to pension benefits from Local 1588. This Opinion constitutes the Court's decision, and includes the Court's findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a).⁴

DISCUSSION

The government asserts that it is entitled to the civil remedies set forth in 18 U.S.C. § 1964 because the defendants violated 18 U.S.C. § 1962(c), which provides, in pertinent part:

It shall be unlawful for any person employed by or associated with any enterprise engaged in ... interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity.

18 U.S.C. § 1962(c). See Amended Complaint ¶¶ 71-106.⁵ The government alleges a number of predicate acts for each of the defendants.⁶ See Id., ¶¶ 73-106.

The terms "enterprise," "racketeering activity" and "pattern of racketeering activity," are defined in § 1961 as follows:

(1) "racketeering activity" means (A) any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in narcotic or other dangerous drugs, which is chargeable under State law and punishable by imprisonment for more than one year; (B) any act which is indictable under any of the following provisions of Title 18, United States Code: Section 201 (relating to bribery) ... section 664 (relating to embezzlement from pension and welfare funds) ... section 1341 (relating to mail fraud), section 1343 (relating to wire fraud) ... section 1951 (relating to interference with commerce, by robbery or extortion), section 1952 (relating to racketeering) ... (C) any act which is indictable under title 29, United States Code, section 186 (dealing with restrictions on payments and loans to labor organizations) or section 501(c) (relating to embezzlement from union funds)

* * * * * *

(4) "enterprise" includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity;

(5) "pattern of racketeering activity" requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity.

18 U.S.C. §§ 1961(1), (4), and (5).

Since the government is seeking civil remedies — rather than criminal penalties — under the RICO statute, it must prove each element of the statute by a preponderance of the evidence. Liquid Air Corp. v. Rogers, 834 F.2d 1297, 1302 (7th Cir.1987), cert. denied, 492 U.S. 917, 109 S.Ct. 3241, 106 L.Ed.2d 588 (1989); United States v. Local 560, 780 F.2d 267, 279-80 n. 12 (3rd Cir.1985), cert. denied, 476 U.S. 1140, 106 S.Ct. 2247, 90 L.Ed.2d 693 (1986); United States v. Local 359, 705 F.Supp. 894, 897 (S.D.N.Y.), aff'd in part, remanded in part, 889 F.2d 1232 (2d Cir. 1989); see also Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 491, 105 S.Ct. 3275, 3282, 87 L.Ed.2d 346 (1985) ("That the offending conduct is described by reference to criminal statutes does not mean that its occurrence must be established by criminal standards.").

With these standards in mind, the Court will now consider whether the government has met its burden of proving each element of a civil RICO claim. In Part I, the Court will determine whether the government has proved the existence of a RICO enterprise. In Part II, the Court will determine whether the government offered sufficient evidence to demonstrate a "pattern of racketeering activity." In Part III, the Court will summarize each defendant's alleged participation in the RICO enterprise. Finally, in Part IV, the Court will determine whether the predicate acts allegedly committed by each defendant have been proved.

I. THE WATERFRONT ENTERPRISE

This Court must first determine whether the government has adduced sufficient evidence to prove the existence of an "enterprise," for "the essence of the violation is the commission of racketeering acts in connection with the conduct of an enterprise." Sedima, 473 U.S. at 497, 105 S.Ct. at 3285. The Complaint alleges that the RICO enterprise in this case is the "Waterfront" which the government defines as the "unholy alliance" among ILA, ILA union officials, Waterfront businessmen, members of the Genovese organized crime family in New Jersey, and members of the Gambino organized crime family and their henchmen, the Westies, in Brooklyn and Manhattan. Government's Amended Proposed Findings of Fact & Conclusions of Law ("Govt's PFF & CL") ¶ 3; Amended Complaint ¶¶ 6970. According to the government, the objective of the enterprise was "the corrupt control and influence of Waterfront industries and labor unions by the defendants in order to enrich themselves and their associates." Complaint ¶ 70. This objective was allegedly accomplished through a cooperative arrangement between the Gambino and Genovese crime families, whereby each recognized and respected the other's sphere of influence and control on the Waterfront. Id.

Before the Court sets forth its findings of fact with regard to the existence of a Waterfront enterprise, a few observations are in order regarding the nature of the task confronting the Court.

Several of the parties have expressed concerns about the breadth of the factual findings that this Court is required to make. ILA locals 824, 1588, 1809, 1814, and 1909 — all of which were named as defendants in the complaint but subsequently entered into consent judgments in complete settlement of the...