Source: https://casetext.com/case/us-v-zichettello
Timestamp: 2019-06-18 11:04:34
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Matched Legal Cases: ['§ 1962', '§ 1962', '§ 371', '§ 7201', '§ 1341', '§ 1343', '§ 1341', '§ 371', '§ 1343', '§ 1956', '§ 1512', '§ 371', '§ 7201', '§ 1962', '§ 1962', '§ 1961', '§ 2', '§ 180', '§ 180', '§ 180', '§ 105', '§ 180', '§ 70', '§ 20', '§ 180', '§ 1961', '§ 180', '§ 180', '§ 310', '§ 2', '§ 332', '§ 1962', '§ 1962', '§ 1962', '§ 1962', '§ 1962', '§ 180', '§ 180', '§ 715', '§ 180', '§ 715', '§ 180', '§ 1343', '§ 1', '§ 3', '§ 3', '§ 3', '§ 3', '§ 3']

U.S. v. Zichettello, 208 F.3d 72 | Casetext
208 F.3d 72 (2d Cir. 2000)
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U.S.v.Zichettello
United States Court of Appeals, Second CircuitMar 30, 2000
Nos. 98-1376(L), 98-1377, 98-1378, 98-1379, 98-1380.
TERRANCE G. REED, Reed Hostage, P.C. (Christopher A. Hostage, of counsel), Washington, D.C., for Defendants-Appellants Richard Hartman, James J. Lysaght, and Peter Kramer.
Following a three and one-half month jury trial before Judge Batts, Ronald Reale, the former President of the New York City Transit Police Benevolent Association ("TPBA"), Richard Hartman, a disbarred lawyer who was the TPBA's former labor negotiator and insurance broker, and James J. Lysaght and Peter Kramer, partners in the law firm Lysaght, Lysaght and Kramer ("LLK"), who received millions of dollars in legal fees from the TPBA in return for kickbacks, appeal from their convictions and sentences. These appellants were convicted of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act ("RICO") 18 U.S.C. § 1962, for their role in corrupting the TPBA and transforming it into a RICO enterprise through bribery and other illegal acts. Reale and Hartman were also convicted of various substantive offenses. Frank Richardone, a former Treasurer of the TPBA, pleaded guilty to mail fraud and related crimes. Richardone appeals only from his sentence. (For convenience purposes, "appellants" will refer only to the defendants who went to trial unless otherwise specified.)
This appeal involves a unique set of circumstances. Appellants' opening briefs advanced substantial claims of error based on instructions to the jury concerning aiding and abetting that were found in the official trial transcript. In its brief, the government responded by arguing that the instructions were not error or at least not reversible error. The government thereafter moved this court pursuant to Rule 10(e)(2), see Fed.R.App.P. 10(e)(2), to amend the portion of the trial transcript containing the challenged instructions. The motion was based on evidence that the transcript originally prepared by the court reporter was altered by someone in the district judge's chambers to conform to what was believed to be the version actually read to the jury. We conclude that the trial court committed no reversible error in the unusually lengthy, difficult and complex RICO conspiracy trial that is the subject of this appeal, although we must take a long and arduous detour to arrive at that result. For the reasons set forth below, the government's motion is granted. Because we reject appellants' remaining arguments on appeal, we affirm.
On September 15, 1997, the government filed a thirty-nine count indictment, S5 96 Cr. 1069 (DAB), against Reale, Hartman, Lysaght, and Kramer. Counts One and Two charged them with participating and conspiring to participate in the affairs of the TPBA through a pattern of racketeering in violation of 18 U.S.C. § 1962(c) (d). These counts also alleged that the appellants had committed eleven racketeering acts in furtherance of the charged enterprise, including bribery, mail fraud, wire fraud, money laundering, and witness tampering.
Counts Three through Nineteen charged the appellants with crimes relating to the alleged racketeering acts. Count Three charged them with conspiring to defraud the Internal Revenue Service in connection with the filing of false individual tax returns by three TPBA officers — Reale, Thomas Zichettello, a former TPBA First Vice-President, and Raymond Montoro, a former TPBA Treasurer (sometimes the "TPBA Officers") — in violation of 18 U.S.C. § 371. Counts Four through Eight charged Reale with tax evasion, in violation of 26 U.S.C. § 7201. Counts Nine and Ten charged appellants with mail fraud in connection with monthly bribes of approximately $1,800 and quarterly bribes of approximately $18,000 that Hartman, Lysaght, and Kramer paid to the TPBA Officers during certain time periods, in violation of 18 U.S.C. § 1341, 1346, and 2. Count Eleven charged Reale and Hartman with wire fraud in connection with a kickback Hartman paid to the TPBA Officers in connection with Hartman's designation by the TPBA as broker to sell whole life insurance policies issued by the Metropolitan Life Insurance Company ("Metlife") to TPBA members, in violation of 18 U.S.C. § 1343, 1346, and 2. Counts Twelve through Fourteen charged Reale with mail fraud related to bribes paid to the TPBA Officers by the partners of the law firm Agulnick Gogel ("AG"), in violation of 18 U.S.C. § 1341, 1346, and 2. Count Fifteen charged Reale and Hartman with conspiracy in connection with a fraudulent scheme to obtain matching campaign funds from the New York City Campaign Finance Board ("NYCCFB") for Reale's 1993 campaign to win the Democratic nomination for New York City's Public Advocate, in violation of 18 U.S.C. § 371. Count Sixteen charged Reale and Hartman, and Count Seventeen charged Reale, with wire fraud in connection with the campaign finance scheme, in violation of 18 U.S.C. § 1343 and 2. Count Eighteen charged Reale with money laundering in connection with the campaign finance scheme, in violation of 18 U.S.C. § 1956(a)(1)(B)(i) and 2. Count Nineteen charged Reale with witness tampering, in violation of 18 U.S.C. § 1512(b)(3) and 2.
Counts Twenty through Thirty-Nine charged Hartman and Kramer with conspiracy and substantive tax offenses related to the operation of Hartman's insurance brokerage business and its transfer to a partnership owned by Lysaght's and Kramer's spouses, in violation of 18 U.S.C. § 371 and 2, and 26 U.S.C. § 7201, 7206(1), 7206(2), and 7206(5).
Prior to trial, the district court severed Counts Twelve through Fourteen, which related to bribes AG paid Reale, and the corresponding racketeering acts — Racketeering Acts Six through Eight of Counts One and Two. See United States v. Reale, No. S4 96 CR. 1069, 1997 WL 580778, at *11 (S.D.N.Y. Sept. 17, 1997). The district court also severed Counts Twenty through Thirty-Nine, the tax offenses arising from the transfer of Hartman's insurance business. See id. at *13.
At the close of the government's case, it voluntarily dismissed Racketeering Act One, which related to monthly $1,800 bribes paid by Hartman, Lysaght, and Kramer to Reale, but only insofar as it named Lysaght. The government also voluntarily dismissed Racketeering Act Three, which charged that Hartman, Lysaght, and Kramer had paid a $100,000 bribe to Reale in connection with the life insurance scheme. On appellants' Rule 29 motions, see Fed.R.Crim.P. 29, the district court dismissed Count One — the substantive RICO charge — against Hartman, Lysaght, and Kramer, but not Reale. The district court also dismissed Counts Three, Nine, Ten, Eleven, Seventeen, and Eighteen, and Racketeering Act Ten, which charged Reale with having committed wire fraud and money laundering in connection with the campaign finance scheme.
The redacted and renumbered indictment submitted to the jury contained ten counts. Count One charged Reale with Racketeering from 1990-1996 in violation of 18 U.S.C. § 1962(c). Count Two charged Reale, Hartman, Lysaght, and Kramer with Racketeering Conspiracy from 1990 to 1996 in violation of 18 U.S.C. § 1962(d). The indictment specified six Racketeering Acts: (i) monthly $1,800 cash bribes paid by Hartman and Kramer and received by Reale; (ii) receipt and payment in early 1992 of a $150,000 cash bribe in connection with a $750,000 payment by the TPBA to LL K; (iii) receipt and payment of quarterly $18,000 cash bribes in 1993 and 1994; (iv) receipt and payment of a bribe arising out of the life insurance scheme, against Reale and Hartman; (v) wire fraud in connection with the campaign finance scheme, against Reale and Hartman; and (vi) tampering with a witness during a federal investigation, against Reale. Counts Three through Seven charged Reale with tax evasion. Counts Eight and Nine charged Reale and Hartman with wire fraud conspiracy and wire fraud in connection with the campaign finance scheme. Finally, Count Ten charged Reale with witness tampering.
The government showed that Reale, together with Hartman, Lysaght, and Kramer, used the TPBA as a piggy-bank available to enrich themselves almost at will and to aid Reale's campaign for Public Advocate (the "Reale Campaign"). The evidence offered by the government included the testimony of Montoro, a former TPBA Treasurer, of Zichettello, a former TPBA First Vice-President, and of more than a dozen corroborating witnesses; and thousands of financial and other documents.
Viewed in the light most favorable to the government, see United States v. Joyner, 201 F.3d 61, 67 (2d Cir. 2000) (citing Glasser v. United States, 315 U.S. 60, 80 (1942)), the evidence demonstrated that: (i) between 1990 and 1994, Hartman, Lysaght, and Kramer paid the TPBA Officers more than $400,000 in cash bribes in exchange for the TPBA's paying to LLK more than $2 million in legal and consulting fees; (ii) Hartman paid bribes to the TPBA Officers so that he could be named the "broker of record" to sell whole life insurance policies to TPBA members; and (iii) in 1993, during the Reale Campaign, Reale used TPBA funds to pay campaign expenses and both Reale and Hartman were involved in schemes whereby they paid individuals to make sham contributions totaling tens of thousands of dollars to the campaign so that Reale could obtain matching funds from the New York City Campaign Finance Board ("NYCCFB"). A more detailed description of the evidence against the appellants follows.
Before Reale became President of the TPBA in 1989, the law firm Agulnick Gogel ("AG") served as its general counsel. However, Zichettello, as TPBA First Vice-President in the Reale administration, sought new attorneys. In the course of his search, Zichettello met Hartman, a disbarred lawyer who was a labor negotiator for several law enforcement unions in Nassau and Suffolk counties in New York. Hartman offered to provide labor negotiation services to the TPBA, quoting a fee that amounted to $100 per member and recommending LLK to Zichettello as new legal counsel. LLK was the law firm into which Hartman's legal practice merged when he was disbarred. Hartman told Zichettello that LLK could represent transit police officers who were sued for conduct in the line of duty if and when the NYCTA declined to represent such officers.
As a result, the CLDF did not exist during the 1987-1990 contract period, but Reale, who saw a profitable use for it, promised to bring it back if elected. After Reale's election, Zichettello and Hartman signed a contract providing that if the NYCTA reestablished the CLDF, LLK would receive a fee of $50 per officer annually for legal representation pursuant to the CLDF. Any CLDF amount in excess of $50 per member paid by the NYCTA to the CLDF would be retained by the TPBA. At approximately the same time, Reale authorized and made a $314,000 pre-payment to LLK for CLDF-related services even though the NYCTA had not yet agreed to restore the CLDF.
In 1990, Lysaght and Kramer assigned an associate at their firm to monitor civil lawsuits against transit police officers for actions in the course of their employment. They did this presumably to create the appearance of valuable services being rendered in return for the $314,000. The monitoring consisted of obtaining documents filed in such lawsuits, filing them, and sending form letters to the officers involved in the cases advising them of the existence and nature of the lawsuit. There was no heavy legal lifting, however, and, from 1990 until November 1991, LLK never actually represented any transit officer for the CLDF. Nevertheless, restoring the CLDF was a key provision of the contract that Lysaght and Hartman negotiated on behalf of the TPBA with New York City in late 1991 and early 1992. As a result of those negotiations, the TPBA allocated approximately $840,000 of credit to the CLDF, representing payments retroactive to 1987. Reale promised the TPBA membership to use this money as a "reserve" for the future.
Reale advised Montoro and Zichettello about the upcoming receipt of a large sum of money representing the retroactive CLDF payment. Reale and Hartman agreed that $750,000 of that payment was to be paid to LLK and that Reale, Montoro, and Zichettello would receive $150,000 cash in return. The TPBA received $840,482.42 on March 11, 1992, and, shortly thereafter, Reale, Montoro, and Zichettello met with Kramer and gave him a $750,000 check. Kramer in turn gave them a large envelope stuffed with slightly under $150,000 in cash. Lysaght's and Kramer's bank records corroborated the testimony of Montoro and Zichettello regarding the $150,000 kickback.
Some time later, Hartman presented the TPBA Officers with a back-dated agreement between LLK and the TPBA to portray the $750,000 payment as a legitimate fee. The new back-dated retainer agreement provided that LLK would receive $75 per member — an increase of $25 over the original agreement — for CLDF services as of July 1990.
In August 1992, Hartman came to the TPBA offices and demanded that Montoro make an immediate payment to LLK of an additional $150,000 — money allegedly due under the terms of the back-dated agreement. Montoro issued two checks totaling $150,000 for CLDF-related services. Because the CLDF fund had been reduced to only $70,000, Montoro was forced to take money from the TPBA's general fund to make the payment.
B. LLK's Monthly Bribes to TPBA Officers
In 1990, at the end of the first year of Reale's presidency, the TPBA retained LLK for $40,000 annually to replace AG as legal counsel to a number of health and welfare benefit funds. By February 1991, Hartman was earning approximately $14,000 a month in labor relation and consulting fees from the TPBA. Thereafter, Hartman informed the TPBA that he would no longer perform labor negotiation services and requested that the TPBA retain LLK to replace him. Reale, Zichettello, and Montoro agreed, and the TPBA began paying LLK the monthly fees that Hartman had been receiving. Several months later, Reale and Hartman advised Montoro that the labor consulting fees were going to be increased by approximately $3,000 dollars a month. Reale assured Montoro that "there would be something in it for us." Hartman said that the TPBA Officers would personally receive $1,800 each month from LLK and that Kramer would deliver the money. When Hartman left, Reale and Montoro agreed that the bribe would be split evenly among themselves and Zichettello. Montoro and Kramer subsequently arranged a monthly meeting so that Montoro could give Kramer the monthly retainer check in return for an envelope of cash containing $1,800. This arrangement continued until approximately March 1993.
C. LLK's Quarterly Bribes
Sometime in 1992, Reale sought and received bribes from partners at AG. As part of that effort, Reale decided to award AG the TPBA's CLDF-related "work." Reale set up a meeting with Hartman and Lysaght to notify them that LLK was being replaced by AG. Hartman and Reale met in private and agreed to raise LLK's monthly retainer for labor relations work from approximately $17,400 to $20,000 and to have the TPBA pay LLK an additional $200,000 annually, on a quarterly basis, for the law firm's handling of contract negotiations. In exchange, Kramer would deliver $18,000 in cash to the TPBA Officers each time the TPBA made a $50,000 quarterly payment. After Lysaght arrived, he reassured Montoro that they could prevent disclosure of the scheme. Thus, beginning in April 1993, the TPBA issued quarterly $50,000 checks to LLK for its labor relations work, and Kramer delivered $18,000 in cash to Montoro in return. Montoro split the money with Reale and Zichettello. These quarterly payments continued at least until Montoro retired in 1994.
Hartman also played a role in misappropriating TPBA funds to pay for the Reale Campaign. Reale told Oliva that Hartman was going to provide contacts for donations and that Hartman thereafter produced some contributions. Actually, Hartman told Montoro to issue a $25,000 check to LLK that Hartman would convert into campaign contributions from another police organization with which he was affiliated. Montoro did as told and issued a $25,000 check from the TPBA's insurance fund. A few weeks earlier, Montoro had issued a check to LLK for $35,000. The circumstantial evidence offered by the government strongly supported its theory that Hartman used these funds — the $25,000 and $35,000 checks — to generate sham contributions to the Reale Campaign.
After the 1993 election, a federal investigation of the Reale Campaign's funding began. As a result, Reale had his wife prepare a list of all campaign contributions. Montoro showed Hartman the list. In reviewing it, Hartman commented that certain contributions on the list were "mine."
C. Reale's Campaign Debts
We turn first to the unusual issue briefly described in the introduction to this opinion — a very serious and troubling dispute over the content of the jury instructions given by the district court.
[T]he principal predicate offense allegation for the RICO conspiracy charges against these defendants is that they bribed, or aided and abetted in the bribery, of a labor official in violation of New York law, a crime which could only become a federal offense by virtue of RICO's definition of certain state offenses, including bribery, as RICO predicates if they are "chargeable under State law and [are] punishable by imprisonment for more than one year." 18 U.S.C. § 1961(1)(A). Obviously, outside of the RICO counts in the Indictment, the prosecution did not, and could not, have prosecuted these defendants in federal court for violating New York law. When the court instructed the jury as to the New York bribery charges, however, it amended the Indictment by characterizing these predicate offenses as including a conspiracy to violate New York Penal Law 180.15. (App. 0616-19). In particular, the court instructed the jury that "In connection with the racketeering acts," these defendants were also charged with:
Whoever conspires to commit an offense against the United States, or aids, abets, counsels, commands, induces or procures its commission in the conspiracy to commit, is punishable as a principal.[5]
fn[5] As enacted by Congress, the relevant provision of section 2 provides:
This instruction is an inaccurate rendition of the federal aiding and abetting statute, 18 U.S.C. § 2(a), and the underlined language concerning conspiracies cannot be found in the statute which Congress enacted. This language was not included in the court's draft charge. Draft Jury Charge, (App. 0531-33). The addition of this language to the federal aiding and abetting statute effectively transformed it into a general conspiracy statute whereby conspiracy, or even aiding and abetting a conspiracy to violate N.Y. Penal Code § 180.15, became a predicate RICO offense. This was error.
The balance of the court's charge regarding these state predicate bribery offenses demonstrates that this was not simply a judicial transcription error, but rather an intentional effort to implement the new statute, as amended. The court immediately followed this charge language with repeated instructions to the jury that it could find these defendants guilty if the government only proves that these defendants aided and abetted a conspiracy to violate N.Y. Penal Code § 180.15. (App. 0616-20) (Judge's charges).[6]
fn[6] "A person who aids, abets, counsels or induces another person to conspire or commit an offense is just as guilty of that offense as if he had conspired or committed it himself.
The redrafting of federal statutes, however, is not the proper province of the judiciary, and "[f]ederal crimes are defined by Congress, not the courts." United States v. Lanier, 117 S.Ct. 1224, 1226 n. 6 (1997) (citing cases).
Under New York law, both by statutory and common law, conspiracies are treated as lesser offenses than aiding and abetting violations. People v. McGee, 19 N.Y.S.2d 48, 424 N.Y.S.2d 157, 399 N.E.2d 1177 (N.Y. 1979), cert. denied, 446 U.S. 942 (1979). A violation of N.Y. Penal Code § 180.15 is categorized as a class D felony, but a conspiracy to violate a class D felony is only a misdemeanor. N.Y. Penal Code § 105.05. More specifically, a conspiracy to violate N.Y. Penal Code § 180.15 is a conspiracy "in the fifth degree" which is a class A misdemeanor punishable by imprisonment which "shall not exceed one year" under N.Y. Penal Code § 70.15(1).[7]
fn[7] The same result is reached if the allegation is one of aiding and abetting a conspiracy. Under New York law, an aider and abettor only faces the same potential punishment as a principal. N.Y. Penal Law § 20.00. If the principal offense is conspiracy, then one who aids and abets a section 180.15 conspiracy would likewise only commit a Class A misdemeanor.
Because a conspiracy to violate N.Y. Penal Code § 180.15 is not a state bribery offense "punishable for more than one year," within the meaning of RICO's definition of permissible state predicate offenses, 18 U.S.C. § 1961(1), the jury was improperly instructed that it could convict these defendants based upon criminal conduct which is not a RICO predicate. The defect lies not in the indictment, which limited the predicate allegations to substantive or aiding and abetting New York bribery offenses, but in its expansion through the Court's charge to the jury, which told the jury that it could find defendants guilty based solely upon a finding that they conspired, or even only aided and abetted a conspiracy, to violate N.Y. Penal Law § 180.15, both of which are only class A misdemeanors, and therefore are not federal RICO predicates. The jury was further prompted to convict these defendants based upon a misdemeanor conspiracy to violate N.Y. Penal Law § 180.15 by the special verdict form (Special Verdict Form, at 9) (App. 0671), which asked the jurors to check any of the listed predicate acts which they found defendants "agreed or conspired with others to commit."
Obviously, this argument had colorable force because the challenged instructions did indeed misquote the federal aiding and abetting statute and in other ways compounded the misquotation by, for example, including language about aiding and abetting a conspiracy.
The government's brief was filed on March 24, 1999. It did not dispute that the challenged instructions had been given but rather argued that: (i) defense counsel had not objected to the instructions at trial and they were not plain error; (ii) under Salinas v. United States, 118 S.Ct. 469 (1997), a defendant can be convicted of a RICO conspiracy without proof that he or she committed a predicate racketeering act and the instructions were therefore harmless; and (iii) the instructions in question, when read in conjunction with other instructions, were substantially correct or harmless. The government faced an uphill battle on this issue because the instructions did include, inter alia, a sua sponte amendment of a federal statute. Moreover, the case went to the jury on a pre- Salinas legal theory that focused the jury's attention on the alleged predicate acts. It would therefore be difficult to unravel after the fact the erroneous instructions and determine them to be harmless. See infra note 13 and accompanying text.
On April 9, after the government's brief had been filed, the government moved to "correct the record so that it reflects the charge given to the jury and [to] strike Point One [ — the argument concerning the indictment being amended by the district court's aiding and abetting charge — ] of appellants' brief." Appellee's Mot. To Correct R. and To Strike. In its motion, the government asserted that when the prosecutors responsible for the trial reviewed Point I of the Hartman, Lysaght, and Kramer brief, "they did not recall that the District Court's aiding and abetting charge included the highlighted and challenged language, which was not in the Draft [Charge]. . . . and all of them believed that they would have noticed such a deviation from the Draft [Charge]." Pomerantz Affirm. ¶ 8. However, none of them could say with "absolute certainty" that the district court had not delivered the charge as reflected in the official transcript. Id. Accordingly, and because the government was under "significant time pressure to file a factually complex and lengthy brief," the government decided to submit a brief responding to appellants' Point I on the merits. Id.
Three days after the government's brief was filed, the person who had served as the trial judge's law clerk ("Law Clerk") during the trial — he had left in September 1998, after two years of service, see Law Clerk Affirm. ¶ 2 — encountered a former Assistant United States Attorney ("AUSA") who had been one of the lead prosecutors in the case. See id. ¶ 11; Hirshman Aff. ¶ 2. The occasion was a social event at Fordham Law School. See Hirshman Aff. ¶ 2. The AUSA and her husband, a Fordham law professor ("Law Professor"), depicted the ensuing conversation as follows. The AUSA told the Law Clerk that she did not remember the district judge giving the instructions described in Point I of the appellants' brief. See id. The Law Clerk said that he also did not remember them. See id. The Law Professor recalled the Law Clerk also saying he had actually returned to the judge's chambers and found that the instructions in the "script" read to the jury by the judge were different from those in the transcript upon which the appellants' brief relied. See Pearce Aff. ¶ 3. The Law Clerk recalls the conversation with the AUSA and remembers telling her that he believed that the charge described by appellants was correct on the law. See Law Clerk Affirm. ¶ 11. He does not recall mentioning a script or saying that the language in question was not in the script. See id.
This conversation prompted the government to inquire further into the charge issue. Days later, the government communicated with the court reporter, Vincent Bologna, who had transcribed the jury instructions. See Pomerantz Affirm. ¶ 10. Bologna told the government that the language challenged by appellants was not, in his view, actually read to the jury. See Bologna 4/99 Aff. ¶¶ 2, 4, 6. Based on this and documents provided by Bologna, the government concluded that there was compelling evidence that the record certified to this court was in error on an issue material to the appeal. See Pomerantz Affirm. ¶ 12.
The AUSA contacted the attorneys who represented appellants at trial and asked them whether they remembered hearing the challenged language during the jury charge. The attorneys all stated in substance that they did not remember whether the district court actually uttered the challenged words. See id. ¶ 13. The government thereafter contacted appellants' appellate counsel to seek their consent to amend the transcript and strike Point I of the Hartman, Lysaght, and Kramer brief. Understandably, appellate counsel did not consent to the request. See id. ¶ 14. Accordingly, the government filed the present motion to amend in this court. We thereafter invited the district judge to submit her version of events in writing. She responded with an affidavit and submitted as well an affidavit of the Law Clerk.
The first relevant version is an eighty-five page draft ("Draft Charge") given by the court to the parties and discussed at a charge conference on January 12, 1998. The Draft Charge contained a standard charge on aiding and abetting taken almost verbatim from Sand's Modern Federal Jury Instructions. See 1 L. Sand et al., Modern Federal Jury Instructions ¶ 11.01, Instr. 11-1 11-2. No party objected to it. It of course contained none of the language that is the subject of contention in Point I of the Hartman, Lysaght, and Kramer brief.
— Did he participate in the crime charged as something he wished to bring about?
— Did he associate himself with the criminal venture knowingly and wilfully?
— Did he seek by his actions to make the criminal venture succeed?
While the jury instructions were being given, Bologna prepared stenographic notes "based upon what [he] heard the judge say." Bologna 4/99 Aff. ¶ 2. As he did so, the notes were recorded by a stenograph machine onto a paper tape and a computer diskette. We will style the hard copy of this the "Court Reporter's Charge." At the same time, his notes were converted into readable text and immediately transmitted on the district court's and the parties' laptop computers by the "real-time" process. This version cannot be printed and is available only on the court reporter's computer. However, its contents are not in dispute. We will style this version the "Real Time Charge." Neither the Court Reporter's Charge nor the Real Time Charge contain the disputed language except for a single reference to the word "conspiracy" in a paragraph that is in the Court Reporter's Charge and Real Time Charge but in neither the Draft Charge nor the Final Draft Charge. No lawyer — for the prosecution or defense — objected to any part of the disputed portion of the charge when it was read to the jury on January 22, 1998.
The dispute over the instructions arose from the version of the charge kept in the district judge's chambers. According to her affidavit, it is her regular practice to read the jury charge verbatim from "a finalized document." District Ct. Affirm. ¶ 3. Generally, "the charging conference takes place within a day or two of the delivery of the charge to the jury, and any subsequent changes made are handwritten by me in colored pen, so that I may easily see and incorporate them as" they are read to the jury. Id. Occasionally, the district judge "may make changes in the charge while reading to the jury, and pause to write these changes on the copy from which I read. . . . so that my law clerk has what is actually read . . ., including all last minute revisions, in order to correct the draft charge accurately when received from the court reporters." Id.
It is also the district judge's regular practice to have her law clerks "take the version of the jury charge that the Judge read to the jury from the Bench and place it in a looseleaf binder in Chambers where the charges from other trials were put after a jury reached its verdict." Law Clerk Affirm. ¶ 8. In this case, the Law Clerk affirms that he recalls "taking the version of the jury charge that Judge Batts read to the jury and placing it in the binder in Chambers." Id. The version in the binder is predictably styled the "Binder Charge." The Binder Charge contained numerous, substantive handwritten changes to the aiding and abetting portion of the jury charge that the district judge says were written by her. See Neiman Aff. Ex. C; District Ct. Affirm. ¶ 9. These include changes to the very language of the aiding and abetting statute itself. A photocopy of the pertinent portion of the Binder Charge is attached to this opinion as Appendix A. The Binder Charge also had a handwritten post-it note placed on page 1 by the Law Clerk that stated, "[t]hese corrections [ i.e., the district court's handwritten changes] need to be entered into [the] computer file." Law Clerk Affirm. Ex. 2.
******* In connection with the Racketeering Acts I have just discussed, Defendants HARTMAN, LYSAGHT, and KRAMER are also charged with aiding and abetting the conspiracy to commit [commission of] those crimes. The aiding and abetting statute, section 2(a) of Title 18 of the United States Code, provides that:
The Southern District of New York follows a practice that is unusual and perhaps unique. See Pomerantz Affirm. ¶ 11; Bologna 4/99 Aff. ¶ 3; Leiwant Decl. After jury instructions are given in a case, the court reporter submits a transcript of the instructions to the district judge for review. See Pomerantz Affirm. ¶ 11; Bologna 4/99 Aff. ¶ 3. The court reporter does not release a transcript to the parties until after the judge reviews, and in some cases corrects, it. See Pomerantz Affirm. ¶ 11; Bologna 4/99 Aff. ¶ 3. Presumably, the purpose of this practice is to allow a judge to correct minor stenographic errors or typos. Because the parties receive only a printed transcript that incorporates the judge's revisions, the parties are not informed of such revisions.
Following this practice, Bologna printed his stenographic notes of the jury instructions and hand-delivered that version — the Court Reporter's Charge — to the district judge's chambers on January 23, 1998, one day after the charge was given. See Bologna 4/99 Aff. ¶ 3. On or about March 9, 1998, more than six weeks later, the district court returned the Court Reporter's Charge to Bologna with numerous handwritten changes. See id. The majority of changes were stylistic or corrected spacing, typographical errors, and acronyms. See Neiman Aff. Ex. E. There were also, however, extensive handwritten revisions to the aiding and abetting portion of the charge. See id. at 6155-56. We will style the transcript returned to the reporter with the handwritten revisions the "Revised Charge." A photocopy of the pertinent portion appears in Appendix B. But for an insertion reading "see pg. 70," the Court Reporter's Office incorporated the handwritten changes into the transcript and released a hard copy of this version to the parties. See Bologna Aff. ¶ 5. Compare Neiman Aff. Ex. E at 6154-56 with id. Ex. G at 6154-56. We will style this final version the "Official Revised Charge."
Although we analyze the affidavits of the district judge and the Law Clerk in detail infra, we briefly summarize them here. The district judge has no independent recollection of reading any particular version of the aiding and abetting charge to the jury. See District Ct. Affirm. ¶ 2. However, she states that it is her "regular practice" to read jury charges verbatim from a finalized document that may include last minute handwritten revisions that may not have been given either to counsel or the court reporter. See id. ¶¶ 3-4. The finalized document with notations is used by law clerks to compare with, and correct, transcripts received from court reporters. See id. ¶ 4. Her laptop computer notes also indicate a discussion with the Law Clerk during a lunch break immediately after the disputed portion of the charge regarding aiding and abetting had been delivered. In this discussion, she expressed doubt over the correctness of that portion of the charge. See District Ct. Affirm. Ex. C. That doubt concerned the fact that the charge "deal[t] with substantive crimes and not conspiracy." Id. These laptop notes are Appendix C to this opinion.
From the district judge's laptop notes, it is not clear whether the discussion with the Law Clerk occurred during the 3:00 lunch break or during some subsequent recess. See District Ct. Affirm. Ex. C. The Law Clerk affirmed that the discussion occurred in the robing room "some time after Judge Batts read [the aiding and abetting] portion of the charge to the jury [when] the Court took a break." Law Clerk Affirm. ¶ 7. Most likely, this conversation occurred during the lunch break, some ten to fifteen minutes after the aiding and abetting portion of the charge was read to the jury. See Moy Affirm. ¶¶ 24-25 n. 11; Neiman Aff. Ex. E at 6154-56, 6163. Time data from the Real Time Charge indicate that the court took only a two and one-half minute break and a one minute pause between the time that the court resumed giving the charge after lunch and the time that the jury retired to deliberate. See Moy Affirm. ¶ 25. Regardless of when the conversation occurred, however, it is absolutely clear that it took place at some point after the aiding and abetting portion of the charge was read to the jury.
The Law Clerk's affidavit states that, because he never deviated from the practice of placing the charge given by the judge in the proper looseleaf binder and because he remembers doing so in the present case, he is certain that the Binder Charge was the one read to the jury. See Law Clerk Affirm. ¶ 8. Moreover, he "vividly recall[s] Judge Batts using the conspiracy language when she charged the jury on aiding and abetting" because of his lunch-break discussion with her regarding this portion of the charge. According to him, she asked him to draft by hand another version of the aiding and abetting charge "without some of the conspiracy language." Id. ¶ 7. He states that he did so and has provided us with a copy of that revision. A photocopy of his handwritten proposed revision is Appendix D to this opinion.
As the clerk responsible for "editing" the Court Reporter's Charge, the Law Clerk compared it to the, in his words, "original charge" — the Binder Charge. Id. ¶ 9. However, he states that he did not edit the Court Reporter's Charge "fully and accurately," id., and, as a result, there are significant differences between the Binder Charge and the Official Revised Charge, differences discussed in detail infra.
The government's motion to amend is governed by Fed.R.App.P. 10(e), which reads:
Tension arguably exists between Rule 10(e)(1) and (e)(2) as to whether parties must initially seek relief from the district court or whether they have the option to proceed in the court of appeals. In our view, parties should generally seek relief initially from the district court. Nevertheless, the rule plainly states that either court has the power to resolve a dispute over the record in the first instance. See generally 20 James Wm. Moore et al., Moore's Federal Practice § 310.40[1], at 310-33 (3d ed. 1999). Considering the unique circumstances in this case — chambers revisions to transcribed jury instructions without notice to the parties — it would not be appropriate to require the government now to seek relief from the district court. Moreover, the district court and the Law Clerk provided their version of events.
Having concluded that we have the power to decide the motion and that it is appropriate for us to exercise it, we next address the legal standard to be applied in circumstances in which the district judge has affirmed that she has "no reason to believe that the charge actually given to the jury on January 22, 1998, was anything other than what is reflected" in the Official Revised Charge. District Ct. Affirm. ¶ 2. We of course give great deference to the district court's view and "must accept the [district] court's reconstruction of the record under Federal Rule of Appellate Procedure 10[e] unless it was intentionally falsified or plainly unreasonable." United States v. Keskey, 863 F.2d 474, 478 (7th Cir. 1988); see also United States v. Mori, 444 F.2d 240, 246 (5th Cir. 1971) (trial court's "determination, absent a showing of intentional misrepresentation or plain unreasonableness, is conclusive").
The district court's belief that the Binder Charge was actually given is based solely on the chambers' practice of the law clerk placing the copy of the instructions read by the judge in the proper looseleaf binder. She does not claim to remember what she actually said, a lack of recollection that is entirely understandable because more than fourteen months passed between the giving of the charge and the government's motion. However, her contemporaneously typed notes on her laptop computer cannot be squared with the speculation that the Binder Charge was read to the jury. Those notes state that the lunch break on January 22, 1998 took place at 3:00 p.m., after the disputed aiding and abetting instructions had been given. See Appendix C; see also Neiman Aff. Ex. E at 6154-56, 6163 (lunch recess taken shortly after aiding and abetting charge given); Moy Affirm. ¶¶ 24-25 n. 11 (same). The notes go on to state that the judge then had a discussion with the Law Clerk over whether the aiding and abetting charge just given was "right [sic] since it deals with substantive crimes and not conspiracy." Id. But see supra note 8 and accompanying text (discussion not necessarily at lunch break but clearly after aiding and abetting charge was given). However, it is precisely the charge as originally transcribed by the reporter that "deals with substantive crimes and not conspiracy," and the Official Revised Charge — incorporating the Binder Charge — that introduces the language regarding conspiracy. Moreover, the notes make clear that the district court had given the charge as proposed by the government, see id., which did not include the language regarding conspiracy.
We turn then to the Law Clerk's recollection of events, namely that he edited the Court Reporter's Charge based on his practice of taking from the bench the instructions from which the judge read, inserting them in a looseleaf binder, and comparing the transcript supplied by the court reporter with what was found in the proper binder. See Law Clerk Affirm. ¶¶ 8-9. He also "vividly recall[s]" the Binder Charge being given because of the district court's concern expressed at the lunch break regarding the just-given aiding and abetting charge, a concern causing her to ask him to draft revisions to the charge that eliminated the conspiracy language. See id. ¶ 7. Problems abound in the Law Clerk's version of events.
Second, the Law Clerk's version of the lunch-break discussion is entirely at odds with the judge's contemporaneous notes. As discussed above, the district judge's notes indicate that her concern over the instructions just given had been the lack rather than presence (as the Law Clerk recalls) of the conspiracy language. Because her notes were written at the time and he is recalling events that took place over a year before, the notes would ordinarily be deemed more reliable than his conflicting affidavit. However, additional examination of the Law Clerk's submission resolves all doubt. A reading of the Law Clerk's handwritten proposed revisions — drafted at the judge's request — clearly demonstrates that they were intended to add, not eliminate, the conspiracy language. The Binder Charge and the Law Clerk's handwritten proposed revision are remarkably similar in relevant text. Compare Appendix A with Appendix D. Critically, in only one place is there conspiracy language in the Binder Charge that is absent from the Law Clerk's draft, i.e., in his draft's (correct) quoting of 18 U.S.C. § 2(a). The remainder of the Law Clerk's draft basically mirrors the Binder Charge, including virtually all of the district court's handwritten changes. Indeed, in two places the Law Clerk's proposed revision omits language referring to the commission of the substantive offense that is in the Binder Charge, leaving only conspiracy language, a result that flatly contradicts the Law Clerk's recollection that he eliminated such language. Thus, the contemporaneous notes of both the district court and the Law Clerk are powerful support for the government's position.
Compare Binder Charge, Appendix A ("[Y]ou may find a particular Defendant guilty if you find, beyond a reasonable doubt, . . . that another person or persons actually committed the crime, or conspired to commit the crime, and that the Defendant aided, [or] abetted, . . . the conspiracy. . . . [T]he first requirement is that another person has committed or conspired to commit the crime charged. . . . [N]o one can be convicted of aiding and abetting the conspiracy to commit of others if there was no conspiracy to commit the crime by the other person in the first place.") with Law Clerk's Handwritten Proposed Revision, Appendix D ("[Y]ou may [find] a particular Defendant guilty if you find, beyond a reasonable doubt, . . . that another person or person[s] conspired to commit the crime and that the Defendant aided, [or] abetted, . . . the conspiracy. . . . [T]he first requirement is that another person has conspired to commit the crime charged. . . . [N]o one can be convicted of aiding and abetting the commission of a conspiracy if there was no conspiracy to commit the crime by the other person or persons in the first place.").
Third, the pertinent portions of the Binder Charge and the Revised Charge containing the handwritten revisions are similar but by no means identical, as would have been the case if the chambers' practices described above had been followed. The Revised Charge contains the paragraph mentioned earlier that appears for the first time in the Court Reporter's Charge. See supra note 6 and accompanying text. The Binder Charge does not. See Appendix A. The Law Clerk states that he should have deleted that paragraph because it was not in the Binder Charge and, therefore, in his view not delivered by the judge. See Law Clerk Affirm. ¶ 9. Also, the Binder Charge brackets words three times, while the Revised Charge includes the bracketed words on two occasions but deletes a bracketed word on the third. Compare Appendix A with Appendix B. A revision in the very first sentence of the Binder Charge is not in the Revised Charge, compare Appendix A with Appendix B, an omission for which no explanation is offered.
Also, in the next-to-last paragraph, the Revised Charge omits twenty words inserted by hand in the Binder Charge. Compare Appendix A with Appendix B. Near but not exactly where some of the insertions would go, the Revised Charge contains a handwritten notation with an insertion mark stating "see pg 70." See Appendix B. The Law Clerk's affidavit explains that the notation refers to the second page of the Binder Charge — marked page 70 — and "was to remind me to insert the language in the [Revised Charge] that appears on the [relevant page of the Binder Charge]." Law Clerk Affirm. ¶ 10. If the Law Clerk wrote the notation, as his affidavit implies, this explanation makes little sense because he inserted language from the Binder Charge in the preceding paragraph, in the next-to-last paragraph itself, and in the final paragraph. He offers no reason why he would make all those revisions while omitting similar additional revisions in the next-to-last paragraph but with a reminder to himself to make them later.
Finally, all the other evidence in the record also powerfully supports the conclusion that the Binder Charge was not read to the jury. First, the alternative hypothesis posits that Bologna, over the course of two pages of transcript, failed to hear and record 60 words, erroneously recorded 37 other words, and hallucinated or fabricated an entire paragraph of text, which appears in no other version. Compare Appendix A with Appendix B. Bologna swears that the Court Reporter's Charge is based on his stenographic notes and that he transcribed, as he always does, the words that he heard spoken by the district court. See Bologna 4/99 Aff. ¶ 2. No sustainable explanation has been given as to how a court reporter could have made so many mistakes, much less make virtually the same mistake — omitting the conspiracy language — many times over, while also inserting a paragraph apparently drawn from thin air.
Certainly, the evidence does not support a conclusion that Bologna simply copied the Final Draft Charge as given to him by the district court. Indeed, it is the judge's practice to advise reporters not to rely on the draft given them because she frequently alters it before reading it to the jury. See District Ct. Affirm. ¶ 6. Moreover, an examination of the Court Reporter's Charge in this matter in fact shows that it was in many critical respects not a verbatim copy of the Final Draft Charge. For example, the Court Reporter's Charge includes spontaneous comments that the district court injected in the course of reading the charge, e.g., "which I will tell you later," see Neiman Aff. Ex. E at 6121 1.9; "Bear with me one minute, ladies and gentlemen," see id. at 6111 1.24; and "which was the substantive count we just discussed in Count One," see id. at 6137 ll. 2-3. Nor was Bologna listening only for such spontaneous injections and assuming that the substantive portions of the draft were unchanged. The Court Reporter's Charge also contains minor deviations from the Final Draft Charge that have to have reflected what was said rather than written, e.g., "pleaded" rather than "pled," compare id. Ex. B at 30 with id. Ex. E at 6102 1.5, "a defendant" rather than "the defendant," compare id. Ex. B at 24 with id. Ex. E at 6096 1.21, "exhibits are charts" rather than "exhibits were charts," compare id. Ex. B at 9 with id. Ex. E at 6083 1.7, and, "conspiracy charge" rather than "conspiracy count," compare id. Ex. B at 73 with id. Ex. E at 6160 1.8. The Real Time Charge further demonstrates that Bologna transcribed what he heard rather than what he read. For example, the Final Draft Charge uses "$18,000" whereas the Real Time Charge uses "$18,000," as it would have been spoken. See Moy Affirm. ¶ 20. Finally, the unexplained paragraph transcribed by Bologna is neither in the Final Draft Charge nor in the Binder Charge, although it is right in the middle of the disputed portion of the transcript. Thus, we can conclude only that Bologna transcribed the charge as actually given.
Moreover, there were at least nine lawyers — three prosecutors and six defense attorneys — present when the charge was read, but none objected to it. Each had the Draft Charge used at the charge conference. In addition, each had before him or her the Real Time Charge, the court reporter's version of what was then being said. None gave any hint that the court made the unannounced and undiscussed changes at issue notwithstanding the self-evident importance, and error, of those changes, including a patent misquoting of the aiding and abetting statute, language familiar to all lawyers who practice criminal law. Nor did any attorney note that, as was contemporaneously reflected on the Real Time Charge, the reporter was omitting material portions of the court's instructions while fabricating other portions. None of this resulted from counsels' inattentiveness. See Neiman Aff. ¶ 27. After the charge, one of the defense attorneys objected to the court's use of the phrase "despite the arguments of defense counsel," and another counsel objected to the court's modification of a sentence from the Draft Charge. See id. ¶ 26. We believe that it is highly likely that at least one of these attorneys would have objected to the challenged language if indeed it had been uttered.
We simply cannot conclude that the Law Clerk's recollection is even remotely sufficient to counter the evidence to the contrary, including the contemporaneous writings of the judge and the Law Clerk themselves. Indeed, the hypothesis that the Binder Charge — actually a charge somewhat similar to the Binder Charge — was read to the jury suffers from a lack of any plausible explanation, while the hypothesis that Bologna correctly transcribed what was said suffers from no such deficiency. Drafts of various kinds with handwritten notations, deletions, and insertions abound in chambers and may be carried around and mixed up with other papers. The explanation in the present matter could no doubt be as simple as the district court's tinkering at the lunch break with revisions to the already-given aiding and abetting charge and then carrying those pages onto the bench in anticipation of objections by counsel. That revised version could have been mistakenly placed in the looseleaf binder, becoming the Binder Charge.
We therefore grant the government's motion to correct the transcript. We see no need to strike Point I of the Hartman, Lysaght, and Kramer brief, however, rather than rejecting the argument as meritless.
The problem in the instant case has led lawyers on both sides to highlight a problematic practice in the Southern District of New York and has prompted one of them to ask this court to order that the practice be eliminated. See Leiwant Decl. at 2. According to lawyers for both the government and defense, as well as Bologna, the "standard practice" in the Southern District is for a court reporter to submit the transcript of jury instructions to the district court before releasing it to the parties. See id.; Pomerantz Affirm. ¶ 11; Bologna 4/99 Aff. ¶ 3. The district court is free to alter the transcript, and any changes are incorporated in the "official" transcript without disclosing such changes to the parties. See Bologna 4/99 Aff. ¶ 3. According to counsel, the Southern District is somewhat unique in this practice. See Leiwant Decl. at 2.
Courts do not have power to alter transcripts in camera and to conceal the alterations from the parties. Given the issues that arose in this case as a direct result of this practice, there appears to be little justification for continuing the practice in its present form. To be sure, a procedure that corrects obvious mistakes in transmission is useful, and the parties have little interest in closely monitoring such a procedure so long as the alterations are cosmetic. Monitoring by the parties, however, provides some assurance that only cosmetic changes will be made or, if not, that changes will correctly reflect what transpired in the particular proceeding. Moreover, there is little cost in informing the parties of cosmetic changes or at least of directing court reporters to give parties access to the original transcript when they request it.
For several reasons, we do not agree with our dissenting colleague that the government waived its right to move to correct and/or to modify the transcript on appeal. First, Fed.R.App.P. 10(e) does not contain a time limitation regarding such a motion. Second, such a motion would have to do far more than state that a transcript does not comport with the recollection of counsel for the movant; it would have to state affirmatively how a correct transcript would read. In this case, the district judge did not provide counsel with a copy of the draft instructions that she was going to read. The Final Draft Charge was provided only to the court reporter and even that did not correspond exactly to any of the various versions of the disputed charge. Because of the district court's actions, the government did not, therefore, have a correct document that might be compared with the transcript produced. Third, waiver involves the knowing abandonment of a right. Because the district court did not notify the parties that it had made substantial alterations to the transcript produced by the court reporter after trial — the Court Reporter's Charge — the government had little reason and no grounds to challenge the Official Revised Charge as not being the court reporter's version of what was said. It was only when the AUSA and her husband understood the Law Clerk to say that the charge did not correspond to the "script" retained in chambers that the government was for the first time on notice that someone might have altered the transcript. It acted expeditiously thereafter.
We note that, under 28 U.S.C. § 332(d)(1), the judicial council can "make all necessary and appropriate orders for the effective and expeditious administration of justice within its circuit."
Hartman, Lysaght, and Kramer attack their RICO conspiracy convictions for violating 18 U.S.C. § 1962(d) on several grounds.
Hartman, Lysaght, and Kramer first contend that their convictions for RICO conspiracy must be reversed because of the Supreme Court's decision in Reves v. Ernst Young, 507 U.S. 170 (1993), and our decision in United States v. Viola, 35 F.3d 37 (2d Cir. 1994). Relying upon the district court's statement that they "did not operate or manage, directly or indirectly, the enterprise" in dismissing the substantive RICO violation charged in the indictment, appellants contend that Reves precludes a RICO conspiracy conviction for "outsiders" not involved in the operation or management of the enterprise. Alternatively, they contend that a conviction for RICO conspiracy requires a showing that such outsiders knew about and agreed to all the racketeering activity of the enterprise, including racketeering acts in which they were not personally involved. Appellants thus argue that because they did not know the TPBA Officers were accepting bribes from other vendors, they cannot be guilty of RICO conspiracy. We disagree.
Appellants' reading of Reves is simply incorrect. Reves ruled only that for a defendant to be convicted of a substantive RICO violation under Section 1962(c), the defendant must have taken some part in directing the enterprise's affairs. See Reves, 507 U.S. at 179. No such requirement exists under Section 1962(d), however. See Salinas, 118 S.Ct. at 477 ("A person . . . may be liable for conspiracy even though he was incapable of committing the substantive offense."); Napoli v. United States, 45 F.3d 680, 683-84 (2d Cir. 1995) ("[Defendant] was convicted only on the RICO conspiracy charge, and that conviction is unaffected by the Reves error."); Viola, 35 F.3d at 43; see also Goren v. New Vision Int'l, Inc., 156 F.3d 721, 731 (7th Cir. 1998) ("[W]e have held that a defendant can be charged under § 1962(d) even if he cannot be characterized as an operator or manager of a RICO enterprise under Reves. . . .").
To argue that Reves controls the instant case confuses substantive RICO crimes with conspiracy. "A defendant can be guilty of conspiring to violate a law, even if he is not among the class of persons who could commit the crime directly." Viola, 35 F.3d at 43. The "straightforward language of § 1962(d) provides: `It shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.'" Id. (quoting 18 U.S.C. § 1962(d)). A RICO conspiracy charge "is proven if the defendant `embraced the objective of the alleged conspiracy,' and agreed to commit . . . predicate acts in furtherance thereof." Id. (quoting United States v. Neapolitan, 791 F.2d 489, 495 (7th Cir. 1986)). Assuming that a RICO enterprise exists, the government must prove only "that the defendant[s] . . . know the general nature of the conspiracy and that the conspiracy extends beyond [their] individual role[s]." United States v. Rastelli, 870 F.2d 822, 828 (2d Cir. 1989). In applying this analysis, we need inquire only whether an alleged conspirator knew what the other conspirators "were up to" or whether the situation would logically lead an alleged conspirator "to suspect he was part of a larger enterprise." Viola, 35 F.3d at 44-45; see also Salinas, 118 S.Ct. at 478 (upholding conviction under Section 1962(d) where defendant "knew about and agreed to facilitate the scheme").
When this trial began, it was governed by our ruling in Viola. Viola held that to prove a violation of 18 U.S.C. § 1962(d), the government must prove that "the defendant `embraced the objective of the alleged conspiracy,' and agreed to commit two predicate acts in furtherance thereof." 35 F.3d at 43 (quoting Neapolitan, 791 F.2d at 495). Accordingly, the indictment thus alleged that each appellant knowingly agreed to join the conspiracy and agreed to commit at least two predicate acts.
During the trial, the Supreme Court ruled in Salinas that Section 1962(d) does not require proof that each co-conspirator agreed to commit two predicate acts. See 118 S.Ct. at 478. Nevertheless, the district court instructed the jury on the pre- Salinas standard, thus heightening the government's burden beyond what the statute required. The government argues that in addressing appellants' various challenges to their conspiracy conviction, we should follow Salinas. We generally agree. We note that doing so does not raise any due process concerns. Because circuits were divided on the proper interpretation of Section 1962(d), the Supreme Court's decision in Salinas was sufficiently foreseeable to defeat any due process challenge to its retroactive application. See United States v. Rodgers, 466 U.S. 475, 484 (1984) ("[A]ny argument . . . against retroactive application . . . of our present decision . . . would be unavailing since the existence of conflicting cases from other Courts of Appeals made review of that issue by this Court . . . reasonably foreseeable."); United States v. Seregos, 655 F.2d 33, 36 (2d Cir. 1981).
No theory requires co-conspirators to have such knowledge. To be convicted as a conspirator, one must be shown to have possessed knowledge of only the general contours of the conspiracy. See, e.g., Rastelli, 870 F.2d at 828 ("[T]he government need not prove that a [RICO] conspirator-defendant agreed with every other conspirator, or knew all the other conspirators, or had full knowledge of all the details of the conspiracy."). Accordingly, the district court properly instructed the jury that the government did not have to prove "full knowledge of all the details of the conspiracy" but only that each defendant "was aware of the general nature of the conspiracy and that the conspiracy extended beyond the defendant's individual role." While we have held that too little knowledge may undermine a conspiracy conviction, see, e.g., Viola, 35 F.3d at 44-45, there is no requirement that a defendant must have been omniscient.
The evidence easily suffices to support the jury's finding that the appellants were aware of the general nature of the conspiracy. Hartman, Lysaght, and Kramer each knew that the kickback schemes extended beyond themselves individually and involved at least each other, Reale, Zichettello, Montoro, and AG.
Appellants identify three categories of evidence that, in their view, created a prejudicial variance from the indictment: (i) proof that AG paid bribes to the TPBA Officers, for which appellants had no responsibility; (ii) evidence of sixteen or more bribery schemes unrelated to appellants in which Zichettello and Montoro participated; and (iii) evidence of forty or more instances of campaign fraud perpetrated on the NYCCFB but unrelated to appellants.
With regard to the AG bribes, the indictment included racketeering acts and substantive counts against Reale based upon his receipt of kickbacks between 1992 and 1994 from AG. However, Hartman, Lysaght, and Kramer were not charged in any of the racketeering acts or substantive counts involving AG. Before trial, Hartman, Lysaght, and Kramer moved to sever Reale from their trial, arguing that the jury's consideration of their guilt would be tainted by proof of Reale's involvement with AG. See Reale, 1997 WL 580778, at *12. The district court denied the motion. See id. Over the government's objection, however, the district court granted the application to sever those racketeering acts and counts related to Reale's receipt of bribes from AG. See id. at *13. The government thereafter moved in limine to admit evidence of these acts for certain limited purposes. The district court granted the motion on the ground that the evidence was probative.
We see no error in that ruling. The evidence was admitted only to show that AG had already done some of the work for which LLK received $750,000 and that, when AG in turn replaced LLK in 1992, AG did so because it, like LLK, was paying bribes. The evidence was, therefore, relevant to the conspiracy charges against Hartman, Lysaght, and Kramer. Moreover, Hartman, Lysaght, and Kramer themselves introduced much of the evidence concerning AG's bribes to further their defense that only AG needed to pay bribes.
Although appellants advance this argument as involving the multiple conspiracy doctrine, it is really a garden-variety claim of unfair prejudice outweighing relevance under Fed.R.Evid. 403. A multiple conspiracy challenge to a conspiracy conviction must be predicated upon a contention that the defendant was found "guilty of membership in a conspiracy other than the one charged." United States v. Friedman, 854 F.2d 535, 562 (2d Cir. 1988); see also United States v. Aracri, 968 F.2d 1512, 1520 (2d Cir. 1992). The essence of such a claim is that evidence showing that the defendant played a role in a conspiracy different as a matter of law from the one charged in the indictment wrongly convinced the jury to convict the defendant of the charged conspiracy. See United States v. Sutherland, 656 F.2d 1181, 1189-91 n. 6 (5th Cir. Unit A Sept. 1981).
This is not, however, a case in which the jury could plausibly have convicted appellants of a conspiracy other than the one with which they were charged. In the case of the evidence involving the other bribes and campaign fraud described above, the non-involvement of Hartman, Lysaght, and Kramer — save for Hartman's role in the campaign finance scheme — was clear, as were the independent probative purposes of that evidence. Finally, appellants do not challenge the admission of any of this evidence at issue on appeal, and our independent review of the district court's admission of this evidence shows no abuse of discretion.
Hartman, Lysaght, and Kramer raise an additional contention aimed solely at their RICO conspiracy convictions. They argue that they were not guilty of one of the predicate acts alleged in the indictment, bribery of a labor official pursuant to N.Y. Penal Law ("NYPL") § 180.15. NYPL § 180.10 defines a labor official as, inter alia, "any duly appointed representative of a labor organization." Appellants argue that because the TPBA is excepted from the New York Labor Law as a public sector organization, it does not fall within the Penal Law. We address this issue notwithstanding the Salinas decision holding that a RICO conspiracy conviction need not be based on agreeing to commit two predicate acts. See supra note 13 and accompanying text. Obviously, as the case went to the jury, the legality of the payments to the TPBA Officers was of significance to the jury's consideration of whether appellants conspired to violate RICO. However, the payments were in violation of the Penal Law.
Section 715 of the Labor Law states only that provisions of this article shall not apply to:
(1)employees of any employer who concedes to and agrees with the board that such employees are subject to and protected by the provisions of the national labor relations act or the federal railway labor act; or (2) employees of the state or of any political civil subdivision or other agency thereof.
N Y Lab. Law § 715 (emphasis added). While the TPBA is clearly excluded by Subsection (2) of this provision, the carve-out specifically applies only to "this article," which does not include NYPL § 180. Indeed, under appellants' logic, bribes to officials of organizations within Subsection (1) of N.Y. Lab. Law § 715 would also not be criminalized under NYPL § 180.15 — a palpably unreasonable result that would exclude from the prohibition on bribes virtually all officials of all labor unions representing employees in the private sector, which, together with the exclusion of Subsection (2), would exclude almost all, if not all, labor union officials.
Hartman, Lysaght, and Kramer claim that the government knowingly admitted perjured testimony regarding the date on which Montoro began accepting bribes from AG. We disagree.
Appellants' claim fails because they have not established that Montoro committed perjury. Appellants knew of the purported discrepancy in Montoro's testimony and the evidence offered in support of that testimony. They argued to the jury that their version of when the bribes actually occurred was correct. The jury was thus aware of the dispute and obviously believed Montoro. Appellants having had "ample opportunity to rebut [Montoro's] testimony and undermine his credibility," Blair, 958 F.2d at 29, we will not supplant the jury as the "appropriate arbiter of the truth" and "sift falsehoods from facts," United States v. Hemmer, 729 F.2d 10, 17 (1st Cir. 1984). The discrepancies in the evidence do not, therefore, establish that the government offered perjured testimony, knowingly or not.
Under Brady, "suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment." Id. at 87; see United States v. Zackson, 6 F.3d 911, 917 (2d Cir. 1993). Evidence is material only if "there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different." Kyles v. Whitley, 514 U.S. 419, 433-34 (1995). Even if evidence is material and exculpatory, it "is not `suppressed'" by the government within the meaning of Brady "if the defendant either knew, or should have known, of the essential facts permitting him to take advantage of any exculpatory evidence." Zackson, 6 F.3d at 918 (quoting United States v. LeRoy, 687 F.2d 610, 618 (2d Cir. 1982)).
The material the appellants claim was suppressed was a Special Agent's Report that the government initially refused to disclose. However, before the Special Agent testified, the government provided the report to the defense. Appellants were therefore able to use this material, and there is not even a remote possibility that the outcome of the trial would have been affected had they received it earlier. See United States v. Rivalta, 925 F.2d 596, 597-98 (2d Cir. 1991) (no Brady violation where omission not "sufficient to `undermine confidence in the outcome'" of trial). We have considered appellants' other contentions concerning the government's alleged suppression of exculpatory evidence and find them to be without merit.
Hartman, Lysaght, and Kramer contend that admission of their bank records as evidence was an abuse of discretion. However, the district court properly concluded that the records were relevant to show how appellants structured financial transactions to pay bribes. Although evidence as to appellants' wealth was also admitted to some degree through these records, the district court gave a limiting instruction, explaining to the jury that these records in no way shifted the burden to the appellants to "explain or prove the reason for, or the disposition of, this cash." Accordingly, this evidence was not improperly introduced. See, e.g., United States v. Ebner, 782 F.2d 1120, 1126 (2d Cir. 1986) (upholding admission of evidence against Fed.R.Evid. 403 challenge in light of limiting instructions and "presumption that juries will follow [them]") (quoting Watkins v. Sowders, 449 U.S. 341, 347 (1981)).
Lysaght contends that the district court's decision to disqualify his attorney, Gerald Lefcourt, constitutes reversible error. Lefcourt had at various times provided representation concerning relevant matters to Kramer and Hartman, LLK, employees at LLK (one of whom the government expected to call at trial), and (at the time of the government's motion to disqualify) the insurance business that was the subject of other charges.
"[I]n challenging the sufficiency of the evidence to support his conviction, a defendant bears a heavy burden." United States v. Giraldo, 80 F.3d 667, 673 (2d Cir. 1996). The evidence must be viewed "`in the light most favorable to the government,' drawing all inferences and resolving all issues of credibility in the government's favor." Id. (citations omitted); see also United States v. Desimone, 119 F.3d 217, 223 (2d Cir. 1997), cert. denied, 119 S.Ct. 174 (1998); United States v. Gordon, 987 F.2d 902, 906 (2d Cir. 1993). Moreover, the evidence must be viewed as a whole, not in isolation. See United States v. Podlog, 35 F.3d 699, 705 (2d Cir. 1994). If the evidence "suffices to convince any rational trier of fact of the defendant's guilt beyond a reasonable doubt, then [the] conviction must stand." United States v. Martinez, 54 F.3d 1040, 1042-43 (2d Cir. 1995). We address Lysaght's and Hartman's arguments in turn.
Lysaght and Kramer were the only partners of LLK and thus shared the $750,000 equally; Lysaght knew that services of such (or any) value were never provided by LLK, and his bank records showed structured withdrawals in amounts and methods and at times that connected them to the $150,000 bribe.
As to the $18,000 quarterly payments, Lysaght again directly benefitted from the $2,600 increase in monthly retainer and $200,000 annual payment for labor relations work arranged just as Reale was about to send CLDF work to AG. When these rearrangements were negotiated, moreover, Lysaght indicated to Montoro his strong intentions to conceal the scheme, evidencing consciousness of guilt regarding the agreement to make quarterly payments. The evidence therefore supported the jury's finding that Lysaght was a member of the conspiracy.
Hartman also challenges the sufficiency of the evidence of use of interstate wires. See 18 U.S.C. § 1343. It is true that there was no evidence Hartman himself used interstate wires in furtherance of the conspiracy. To sustain the conviction, however, the government need prove only knowledge that a co-conspirator would use the wires in an interstate transmission in furtherance of the conspiracy or that such use of the wires was reasonably foreseeable. See United States v. Muni, 668 F.2d 87, 89 (2d Cir. 1981) (citing Pereira v. United States, 347 U.S. 1, 9-10 (1954)). That test was met in the present case. Facsimiles in furtherance of the campaign finance scheme were sent from New York to New Jersey by someone in the Reale Campaign. Even if Reale did not personally send these faxes, they were clearly sent by campaign workers on behalf of the Reale Campaign. As long as Reale acted "with knowledge that the use of the [wires] w[ould] follow in the ordinary course of business, or [if] such use c[ould] reasonably [have been] foreseen, even though not actually intended, then he `caused' the [wires] to be used." Pereira, 347 U.S. at 8-9. Because the evidence supports a finding that Reale "caused" the facsimiles to be sent, Hartman, his co-conspirator, is deemed jointly responsible for them. See United States v. Toney, 598 F.2d 1349, 1355 (5th Cir. 1979) (cited favorably in United States v. Bortnovsky, 879 F.2d 30, 37 (2d Cir. 1989)).
Hartman, Lysaght, Kramer, and Reale contend that the district court abused its discretion in refusing to remove Juror IV, who managed a portfolio that included the NYPD's pension fund. We disagree. District courts have broad discretion in deciding whether to replace a juror at any time before the jury retires for deliberation. See United States v. Purdy, 144 F.3d 241, 247 (2d Cir.), cert. denied, 119 S.Ct. 548 (1998); United States v. Agramonte, 980 F.2d 847, 850 (2d Cir. 1992). Indeed, the district court is in "the best position to evaluate the juror's demeanor and to determine . . . whether the juror could fairly and impartially hear the case." United States v. Garcia, 936 F.2d 648, 653 (2d Cir. 1991) (quoting United States v. Ploof, 464 F.2d 116, 118 (2d Cir. 1972)).
A. Hartman Reale
As to the campaign finance scheme, Hartman is liable as a co-conspirator for "all reasonably foreseeable acts and omissions" in furtherance of the conspiracy. U.S.S.G. § 1B1.3(a)(1)(B). Because there was evidence that Hartman was well aware of the larger scheme, the district court did not err in finding that Hartman was liable for the entire loss suffered by the NYCCFB.
Hartman and Reale also contend that the four-level enhancement they received for their roles in the various schemes was improper. See U.S.S.G. § 3B1.1(a). "The sentencing court's findings as to the defendant's role in the offense will be overturned only if they are clearly erroneous." United States v. Farah, 991 F.2d 1065, 1068 (2d Cir. 1993). Contrary to Hartman and Reale's contentions, they are subject to the enhancement even if they each managed only one other participant, not five. See U.S.S.G. § 3B1.1, Application Note 2; United States v. Payne, 63 F.3d 1200, 1212 (2d Cir. 1995). As to both appellants, the district court adopted the factual findings of the Presentence Report, which provided an ample basis to support the enhancements. See United States v. Escotto, 121 F.3d 81, 85-86 (2d Cir. 1997), cert. denied, 522 U.S. 1060 (1998).
Although a closer question, we also reject Richardone's second challenge to his sentence. Richardone pleaded guilty to a count alleging participation in a mail fraud scheme. The scheme involved Richardone's paying false invoices to a car dealer who leased cars to the TPBA. The dealer in turn provided cars to Richardone and Zichettello. The dealer also sold cars at large discounts to members of the TPBA selected by Richardone and to Richardone's family and friends. Richardone received a two-level enhancement for his role based on a finding that he was "an organizer, leader, manager, or supervisor in any criminal activity . . ." U.S.S.G. § 3B1.1(c); see also United States v. Djelevic, 161 F.3d 104, 106 n. 3 (2d Cir. 1998) ("Section 3B1.1(c) provides for a two-level enhancement if the criminal activity involves [fewer] than five participants."). There is no dispute that selected TPBA members and Richardone's friends and relatives were able to buy cars at discounted prices from the auto dealer as a direct result of Richardone's larceny from the TPBA.
The issue is whether any of the selected TPBA members or Richardone's family and friends who benefitted may be considered a "participant" in Richardone's offense for purposes of the Sentencing Guidelines. "A `participant' is a person who is criminally responsible for the commission of the offense, but need not have been convicted. A person who is not criminally responsible for the commission of the offense ( e.g., an undercover law enforcement officer) is not a participant." U.S.S.G. § 3B1.1, Application Note 1.
We held in United States v. Melendez, 41 F.3d 797 (2d Cir. 1994), that individuals who had received stolen money from a defendant could not be deemed "participants" because none of the individuals were "alleged to have been involved with the crime to which [defendant] pleaded guilty; rather, they were convicted of receiving stolen property." Id. at 800. Because there was " no evidence that the . . . individuals had advance knowledge of the theft, much less participated in its planning or execution[,] . . . [and] the record [does not] indicate that they expected to receive the proceeds of the theft[,]. . . . [they] cannot be considered participants for purposes of § 3B1.1(a)." Id. (emphasis added) (citing United States v. Colletti, 984 F.2d 1339, 1346 (3d Cir. 1992) (holding that receiver of stolen property is not deemed participant in theft where robbery was completed before receiver became involved in any way, or even became aware of criminal enterprise)).
Melendez is distinguishable from the instant matter. The individuals whom the district court determined were "participants" in Richardone's scheme were other TPBA officers and Richardone's family and friends. Unlike the recipients of stolen property in both Melendez and Colletti, the district court had an evidentiary basis to conclude that at least one of these individuals was criminally involved in Richardone's scheme.
For example, the TPBA Recording Secretary was allowed to purchase a new vehicle at an 80% discount. The purchase was clearly part of the ongoing criminal scheme to which Richardone pleaded guilty. The Recording Secretary had to have known from the size of the discount that some illegitimate quid pro quo involving the TPBA Treasurer was the catalyst for the transaction. We review the district court's factual findings for clear error, see United States v. Brinkworth, 68 F.3d 633, 641 (2d Cir. 1995); United States v. Mortimer, 52 F.3d 429, 437 (2d Cir. 1995), and under that standard the uncontested facts are sufficient to render the TPBA Recording Secretary a participant and to justify the enhancement. We thus need not address the issue with regard to Richardone's friends and family.
We therefore affirm. Pursuant to Rule 10(e)(2), we hereby correct the record and certify that the aiding and abetting portion of the jury charge shall conform to the Court Reporter's Charge as set forth in infra note 15 and shall not contain the additions made by the district court subsequent to trial.
The relevant aiding and abetting portion of the Official Transcript — that portion which appears in the Official Revised Charge beginning at page 6154 line 22 and ending on page 6156 at line 17 — shall be amended to read as follows:
[168] OAKES, Senior Circuit Judge, dissenting.
I dissent despite the tremendous effort of the panel majority in attempting to fathom what is, to me, an almost unfathomable record. I do so not because I disagree with the interpretation of Federal Rule of Appellate Procedure ("F.R.A.P.") 10 that the district court's reconstruction of the record may be corrected only if it is "plainly unreasonable." This is true even though that language originated and has been perpetuated in cases uniformly upholding, rather than abrogating as the majority does here, a district court's reconstruction. See, e.g., United States v. Keskey, 863 F.2d 474, 478 (7th Cir. 1988) (accepting district court's reconstruction of the record under F.R.A.P. 10(e) unless "intentionally falsified" or "plainly unreasonable."); see also Rogan v. Menino, 175 F.3d 75, 79-80 (1st Cir. 1999) (applying the standard to F.R.A.P. 10(c)); Barilaro v. Consolidated Rail Corp., 876 F.2d 260, 263-64 (1st Cir. 1989) (same); United States v. Mori, 444 F.2d 240, 246 (5th Cir. 1971). I dissent because a sensible application of this doctrine requires us to accept the district court's reconstruction of the record where, as here, the challenge to the record was raised at too late a time without an adequate explanation for the delay.
In the instant case, the charge was delivered to the jury on January 22, 1998. After a process of editing by the district court, the charge that contained the critical interlineations that appellants challenge on appeal was returned to the court reporter. This version, the so-called "Official Revised Charge," was released to the parties in March of 1998. See Neiman Aff. ¶ 54. When the government and defense counsel received this version of the charge, neither party claimed that it inaccurately reflected what was read to the jury at trial. On appeal, appellants argued that the language contained in the charge was improper and, consequently, the conspiracy convictions should not stand. The government proceeded to answer the appellants' brief on the basis that the Official Revised Charge was read to the jury. At no point in its brief did the government state that the challenged language was different from that read to the jury. Not until after the government's appellate brief was filed and an AUSA on the case had a discussion with the district court judge's former law clerk at a social event did the government set about to check on the questioned language. See Neiman Aff. ¶ 55, n. 18. Although "the government acknowledges that it would have been possible to investigate the matter of whether the challenged language was ever given" earlier than April 1999, the only explanation in the record for the lapse is: "To be sure, the AUSAs who were present at trial did not recall, more than a year later, the language being delivered, nor did they think that they would have failed to notice the deviations from the 1/12/98 Draft Charge." Id.
[w]hen appellants attack the validity of the record in this case, they seek to undermine the administration of appellate justice — justice that depends upon the crucial assumption that records and transcripts are accurate reflections of the facts pertinent to the issues on review. Moreover, we discern nothing unfair about requiring that the adequacy of the record be challenged in accordance with Rule 10(e), so that the matter can be resolved at a time, soon after trial, when the statements and conduct of the trial participants are still fresh in the minds of any bystanders who might be called on for evidence and appellate review can be conducted on an honest record. Doing otherwise converts direct appeal into a farce.
Here, the government should have moved to correct the record in March of 1998 when it first received the "Official Revised Charge" that contained language the government now claims was never read to the jury. Even accepting the government's excuse that it had no reason to question the charge at that point, when a notice of appeal was filed and the parties compiled the record on appeal, the government should have set about fulfilling its duty as appellate counsel to insure the record on appeal was accurate. Finally, there is simply no excuse whatsoever for the government's failure to examine the record after appellants' brief was filed and before the government filed its response. It is hard to believe that bells did not go off for any of the AUSAs after reading the appellants' brief that centered an argument around the disputed language. Indeed, a close reading of the Pearce Affidavit supports the conclusion that at least one AUSA who had been present in the district court when the charge was read suspected an inconsistency between the instruction as it was set forth in the appellants' brief and as it was read at trial before she was tipped off by the district court's former law clerk. See Pearce Aff. ¶ 3 (recalling that AUSA Hirshman brought her suspicion of a discrepancy up to the former law clerk before the law clerk mentioned his own suspicion).
In light of the foregoing, I am not convinced that the government did not waive its F.R.A.P. 10(e) argument. In U.S. v. Quiroz, 22 F.3d 489, 490-91 (2d Cir. 1994) ( per curiam), the government petitioned for a rehearing of our decision that the district court had wrongly denied the defendant's motion to suppress post-arrest statements. The government's petition was based on its discovery, made after our decision was rendered, that the appeal had been decided on a mistaken record and that the defendant had, in fact, waived his right to object to the admission of the statements. See id. at 490. In Quiroz, we reasoned that where counsel, whose name was on the appellate brief, was present in the courtroom when the defendant failed to object and "the transcript showing objection by [the defendant] was in error," counsel should have known it. See id. In such a situation we concluded there is "no excuse for the government's failure to assert in a timely fashion that [defendant] had failed to preserve his objection." See id. We therefore ruled that the government could not obtain a rehearing of the appeal based on the true record because the government had waived its waiver argument by failing to raise it on appeal. See id. at 491.
In this case, as in Quiroz, a number of AUSAs on the appellate brief were also present in the district court when the jury instructions were read. The same AUSAs received a copy of the "Revised Official Version" of the instructions that contained the disputed language shortly thereafter and were alerted to the possible inconsistency again when the appellants' brief was filed. Under Quiroz, the explanation set forth by the government in this case — that the AUSAs simply did not remember — is no excuse for its failure to assert in a timely fashion that the jury instruction was not correctly set forth in the record. Ordinarily, failure to include an argument in the appellate brief waives the argument on appeal. See Frank v. United States, 78 F.3d 815, 832-33 (2d Cir. 1996); Quiroz, 22 F.3d at 490; United States v. Babwah, 972 F.2d 30, 34 (2d Cir. 1992).