Source: https://law.justia.com/cases/federal/appellate-courts/F2/430/106/462858/
Timestamp: 2020-07-14 16:45:40
Document Index: 648398005

Matched Legal Cases: ['§ 402', '§ 401', '§ 501', '§ 2321', '§ 96', '§ 641', '§ 645', '§ 654', '§ 655', '§ 656', '§ 657', '§ 658', '§ 659', '§ 660', '§ 661', '§ 80', '§ 186']

United States of America, Appellee, v. Milton Silverman, Defendant-appellant, 430 F.2d 106 (2d Cir. 1970) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 1970 › United States of America, Appellee, v. Milton Silverman, Defendant-appellant
United States of America, Appellee, v. Milton Silverman, Defendant-appellant, 430 F.2d 106 (2d Cir. 1970)
US Court of Appeals for the Second Circuit - 430 F.2d 106 (2d Cir. 1970) Argued January 26, 1970
COPYRIGHT MATERIAL OMITTED Simon H. Rifkind, New York City, (Paul, Weiss, Goldberg, Rifkind, Wharton & Garrison, New York City, Edward N. Costikyan, and Theodore W. Striggles, New York City, of counsel), for defendant-appellant.
" [T]he defendant, unlawfully, wilfully and knowingly, directly and indirectly, did embezzle, steal, abstract and convert, to his own use, and the use of another monies, funds, securities, property and other assets of a labor organization of which he was an officer and by which he was employed, to wit, Local 810, International Brotherhood of Teamsters and Local 1614, International Brotherhood of Electrical Workers, as hereinafter set forth.
The policy underlying the requirement of specificity in the indictment is similar to that which forbids the amendment of an indictment without resubmission to a grand jury. It is to prevent the usurpation of power by the court and prosecutor in allowing a defendant to be convicted "on the basis of facts not found by, and perhaps not even presented to, the grand jury which indicted him." Russell v. United States, 369 U.S. 749, 770, 82 S. Ct. 1038, 1050, 8 L. Ed. 2d 240 (1962). This policy is effectuated by preventing the prosecution from modifying the theory and evidence upon which the indictment is based. See generally, 8 Moore, Federal Practice ¶ 7.05 [3]. The question presented on this appeal is whether the indictment reveals that all the essential elements for conviction were presented to the grand jury, and deliberated upon and charged by them. We must also decide whether the prosecutor has attempted to rely at the trial upon theories and evidence that were not "fairly embraced in the charges made in the indictment." Russell v. United States, 369 U.S. 749, 793, 82 S. Ct. 1038, 1062 (1962) (Harlan, J., dissenting).
The indictment uses the term of art, "labor organization," and then specifies two particular labor organizations by referring to Locals 810 and 1614.2 An indictment must be read to include facts which are necessarily implied by the specific allegations made. United States v. Martell, 335 F.2d 764, 765-766 (4th Cir. 1964); United States v. Varlack, 225 F.2d 665, 669-670 (2d Cir. 1955); Hewitt v. United States, 110 F.2d 1, 5-6 (8th Cir.), cert. denied, 310 U.S. 641, 60 S. Ct. 1089, 84 L. Ed. 1409 (1940); Hagner v. United States, 285 U.S. 427, 431-433, 52 S. Ct. 417, 76 L. Ed. 861 (1932); Grant v. United States, 291 F.2d 746, 748-749 (9th Cir.), cert. denied, 368 U.S. 999, 82 S. Ct. 627, 7 L. Ed. 2d 537 (1961); Gonzales v. United States, 286 F.2d 118, 120 (10th Cir.), cert. denied, 365 U.S. 878, 81 S. Ct. 1028, 6 L. Ed. 2d 190 (1960); Finn v. United States, 256 F.2d 304, 306-307 (4th Cir. 1958).3 Just as the use of the words "labor organization" in the statutory section defining the criminal offense involved necessarily implies the fact that the labor organization is engaged in an industry affecting commerce pursuant to 29 U.S.C. § 402(i), so the use of that term of art in the indictment necessarily implies that the essential element of interstate commerce is charged in the indictment. To contend otherwise would be to argue that the defendant was not sufficiently informed of the charges against him to allow preparation of a defense and that he could not be protected from being later placed in jeopardy for the same acts. Such arguments are concededly not presented by this case since Silverman was not prejudiced in such a manner. We must conclude that the indictment, as drafted, was sufficient to charge the essential element of interstate commerce.
Even though the indictment is drafted to charge the essential elements, the question remains whether on its face it presents evidence which assures us that such essential elements were presented to the jury and deliberated upon by them in returning the indictment. Cf. Russell v. United States, 369 U.S. 749, 770-771, 82 S. Ct. 1038, 8 L. Ed. 2d 240 (1962). The presence of such evidence would insure that the defendant is not tried upon a theory or evidence which was not fairly embraced in the facts upon which the grand jury based its charges. The events described in the indictment were quite specific as to the dates of the transactions, the amounts involved and the parties from whom the funds were taken. Such allegations were sufficient to guard against giving improper discretion to the court and the prosecutor to vary the trial proof from the theory upon which the indictment was based. This is not a case wherein the indictment alleged facts showing one violation of federal law (interference with interstate importation of sand) and proof was allowed at trial of another violation (interference with interstate importation of steel). Stirone v. United States, 361 U.S. 212, 80 S. Ct. 270, 4 L. Ed. 2d 252 (1960). A situation similar to Stirone would be presented if the indictment had alleged that Silverman was an officer of Local 810 only and a conviction were permitted on proof that funds of Local 1614 had been embezzled. Nor is this a case wherein the grand jury might have relied upon specific evidence showing a violation of federal law (deception of the Comptroller of the Currency) which the trial judge permitted to be stricken from the indictment at trial. Ex parte Bain, 121 U.S. 1, 7 S. Ct. 781, 30 L. Ed. 849 (1886). A situation similar to Bain would be presented if the trial judge had amended the indictment at trial to delete reference to one of the two Locals. No one could suppose that the prosecutor would be free to roam at large in proving elements of the crime so explicitly stated. This statement is also true with respect to the allegation of interstate commerce. The connection with interstate commerce upon which the indictment must rest is that the specific unions named were "labor organizations" in the statutory sense. The specification of the unions involved protects Silverman from the evils of facing charges not made before the grand jury.
In section 501 Congress defined "in the broadest terms possible the duty which the new federal law imposes upon a union official." Highway Truck Drivers and Helpers Local 107 v. Cohen, 182 F. Supp. 608, 617 (E.D. Pa.), aff'd per curiam, 284 F.2d 162 (3d Cir. 1960), cert. denied, 365 U.S. 833, 81 S. Ct. 747, 5 L. Ed. 2d 744 (1961). Section 501(c) created "a new Federal crime of embezzlement of any funds of a labor organization." Colella v. United States, 360 F.2d 792, 799 (1st Cir.), cert. denied, 385 U.S. 829, 87 S. Ct. 65, 17 L. Ed. 2d 65 (1966). The crime is defined with the use of traditional terms and may be committed by several means. It was the plain intention of Congress to hold officers and employees strictly responsible as fiduciaries for the union funds entrusted to them and this intention should not be subverted by the use of indirect methods. United States v. Harrelson, 223 F. Supp. 869 (E.D. Mich. 1963).
The fiduciary role that labor officials must occupy is defined in section 501(a) to include a duty to hold the union's property solely for the benefit of the union and to expend it only in accordance with its constitution, by-laws and resolutions. Decisions finding violations of the criminal provision of section 501(c) have also emphasized the elements of appropriate union benefit and proper union authorization. Section 501(c) is read as requiring an intent to deprive the union of the use of its funds and either a lack of union benefit from the expenditure or a lack of proper authorization for the expenditure. In Harrelson, supra, the violation of section 501(c) "consisted in the use of union funds for political purposes with knowledge that such use was unauthorized and with the intent to deprive the union of its use of the funds." 223 F. Supp. at 871. The opinion gives no indication as to whether there was an issue as to union benefit from the expenditure, but there can be no doubt that it was unauthorized. In Woxberg v. United States, 329 F.2d 284 (9th Cir. 1964), the court affirmed one conviction because the jury could have concluded the issues of union approval and fraudulent intent adversely to the appellants, id. at 293, and reversed certain other convictions since there was no evidence of the required intent, id. at 294.
Silverman argues that the basis of the Dibrizzi decision is that in no circumstances could a labor organization have the power to authorize payments of the personal non-union expenses of its officers. His rationale, stated in broader terms, would be that in every case where there is no union benefit, the authorization is ultra vires the union. Analogy is drawn to the Highway Truck Drivers case, supra, wherein an expenditure for legal expenses incurred by union officials in defending against criminal charges was enjoined under section 501(b). Such an expenditure was held to be outside the legitimate aims and purposes of the union as expressed in its constitution and as inconsistent with the aims, purposes and spirit of the Act. 182 F. Supp. at 620. If the interpretation of section 501(c) urged by Silverman were adopted, then every violation of that section would always involve both a lack of union benefit and a lack of authorization. The absence of benefit to the union would be the sine qua non of the offense and absence of a lawful authorization would become a concomitant element — present only through logical necessity. I would reject this interpretation of section 501 (c). The purpose of Congress in enacting the Act was to preserve "high standards of responsibility and ethical conduct." 29 U.S.C. § 401(a). This purpose can only be fulfilled if the lack of authorization which indicates that the official's action is in breach of his fiduciary responsibilities is interpreted to include not only purported authorizations which are ultra vires but also those which are sham or procured through fraud upon the union membership. Under this broader view of unlawful authorization, a lack of union benefit will not always be accompanied by a lack of authorization. Indeed, cases may present themselves where a union benefit is present and yet the fact that the authorization was a sham or procured through fraud would make section 501(c) applicable.
Silverman states that a charge under § 501(c) is not supported by "a showing of bad judgment in pursuing union ends even if the pursuit were unauthorized." Applt's Brief at 34. Cited as authority for this statement is a cryptic passage in Colella v. United States, 360 F.2d 792, 804 (1st Cir.), cert. denied, 385 U.S. 829, 87 S. Ct. 65, 17 L. Ed. 2d 65 (1966). That case involved a padded expense account as to which the jury was charged that it must find the items to have "not been spent for a union purpose." The defendant claimed that he was prejudiced by the omission of the words, "whether such expenditures were or were not authorized." If the jury found that there was a union benefit and yet no authorization, the defendant would have been acquitted under the instruction as given. Therefore, the court said there was no prejudice in the charge. This could have been for either of two reasons: (1) It is a correct statement of the law that the presence of a benefit takes the act out of the prohibition of the statute whether authorized by the union or not, or (2) The presence of a union benefit does not immunize an act when the act is unauthorized and is done with fraudulent intent, but defendant was not prejudiced since the charge was more favorable than that to which he was entitled. I prefer the latter interpretation of the case.
The charge given the jury in this case presented the issues of intent, authorization and benefit fairly and accurately (Tr. 1127-32, 1191). Silverman does not object on appeal that these instructions were in error. His objection is that under no theory were the facts sufficient to support the jury's verdict. In deciding whether, as a matter of law, the evidence presented no question for the jury, we must look at the evidence in a manner most favorable to the prosecution. Woxberg v. United States, supra, 329 F.2d at 293; Glasser v. United States, 315 U.S. 60, 62 S. Ct. 457, 86 L. Ed. 680 (1942).
"The generally held essentials for a new trial based on newly discovered evidence are the following: (1) the evidence must have been discovered since the trial; (2) it must be material to the factual issues at the trial, and not merely cumulative nor impeaching the character or credit of a witness; (3) it must be of such a nature that it would probably produce a different verdict in the event of a retrial. United States v. Costello, 255 F.2d 876 (2d Cir.), cert. denied, 357 U.S. 937, 78 S. Ct. 1385, 2 L. Ed. 2d 1551 (1958)."
The test of the materiality of the evidence stated above, "it would probably produce a different result," may be likened in certain cases to the test stated in Larrison v. United States, 24 F.2d 82, 87-88 (7th Cir. 1928), "the jury might have reached a different conclusion." The application of this latter test has been said to be limited to cases of "recantation or where it has been proved that false testimony was given at the trial." United States v. Hiss, 107 F. Supp. 128, 136 (S.D.N.Y. 1952), aff'd, 201 F.2d 372 (2d Cir.), cert. denied, 345 U.S. 942, 73 S. Ct. 830, 97 L. Ed. 1368 (1953); United States v. Miller, 411 F.2d 825, 830 (2d Cir. 1969); United States v. Costello, supra, 255 F.2d at 879. In the case before us there was neither recantation by Chlystun of his testimony nor proof satisfactory to the trial court that his testimony was false. A motion for a new trial is addressed to the discretion of the district judge and our scope of review is accordingly limited. Factual determinations made by the trial court in passing on a motion for a new trial based on newly discovered evidence may not be set aside unless the findings are "wholly unsupported by evidence." United States v. Johnson, 327 U.S. 106, 111-112, 66 S. Ct. 464, 90 L. Ed. 562 (1946). We cannot disturb the trial court's finding of a lack of the persuasiveness and solidity of the affidavits in establishing falsity in Chlystun's testimony.
This is not a case where we need determine whether an exception to the general rule given above may exist where the prosecutor has suppressed evidence. See United States v. Miller, supra; United States v. Polisi, supra. Silverman does not claim that evidence was suppressed. He implies that the government was less than candid in supplying particulars on count fourteen, yet he makes no direct attack on the government's position that giving too many details of the transaction would identify its witness and perhaps subject him to unseemly pressure. No claim of surprise was made after Chlystun's identity was revealed at trial. The defense knew that the charge under count fourteen involved a direct embezzlement of cash. It is hard to understand how any conduct by the prosecution could have prevented defense counsel from investigating and presenting a defense of alibi before the end of the trial. Cf. Brown v. United States, 333 F.2d 723 (2d Cir. 1964); United States v. Edwards, 366 F.2d 853, 873 (2d Cir. 1966), cert. denied, Lipka v. United States, 387 U.S. 935, 87 S. Ct. 2061, 18 L. Ed. 2d 997 (1967).
As we stated in Colton v. United States, 306 F.2d 633, 639 (2d Cir. 1962), cert. denied, 371 U.S. 951, 83 S. Ct. 505, 9 L. Ed. 2d 499 (1963):
" [T]he attorney-client privilege protects only those papers prepared by the client for the purpose of confidential communication to the attorney or by the attorney to record confidential communications * * *."
"However, * * * there is no privilege for so much of a lawyer's letter, report or opinion as relates to a fact gleaned from * * * a public document such as a patent, cf. Edison Electric Co. v. United States Electric L [ighting] Co., [44 F. 294 (C.C.S.D. N.Y.1890)]."
United States v. United Shoe Machinery Corp., 89 F. Supp. 357, 359 (D. Mass. 1950).
In view of the position we adopt with respect to the confidentiality of the content of the communication revealed by the attorney's report, we need not determine whether the report was otherwise admissible under the theory that the client's purpose in consulting an attorney was in furtherance of a crime to be committed, e. g., United States v. Bob, 106 F.2d 37, 39-40 (2d Cir.), cert. denied 308 U.S. 589, 60 S. Ct. 115, 84 L. Ed. 493 (1939); Clark v. United States, 289 U.S. 1, 15-16, 53 S. Ct. 465, 77 L. Ed. 993 (1933). Nor do we need to make a finding, which the trial court failed to make, as to whether Friedland was the attorney of Local 810 and not of Silverman, therefore leaving Silverman without standing to assert error in the ruling by the trial judge. 8 Wigmore, Evidence § 2321 (McNaughton rev. ed. 1961); McCormick, Evidence § 96 at 196 (1954).
Silverman argues that his convictions should be reversed because of misconduct of the prosecutor in questioning witnesses as to whether they would have testified without having been granted immunity from prosecution and as to the identity of their lawyer. He asserts that it was the intention of the prosecutor to use the grants of immunity and the use of a common counsel "to imply general union misconduct — that defendant's associates had been guilty of immunizeable wrongdoing — and therefore defendant, who allegedly dominated them, had surely done something wrong." Applt's Brief at 54. Relying upon cases in which the prosecutor has placed a witness on the stand, knowing that he would validly invoke the privilege against incrimination, e. g., United States v. Maloney, 262 F.2d 535 (2d Cir. 1959), Silverman contends that the government has made "a conscious and flagrant attempt to build its case out of inferences arising from * * *" the grants of immunity. Namet v. United States, 373 U.S. 179, 186, 83 S. Ct. 1151, 1154, 10 L. Ed. 2d 278 (1963).
Neither was there error in permitting the government to bring out the grants of immunity or the common counsel on its direct examination of the witnesses. United States v. Brill, 350 F.2d 171, 174 (2d Cir. 1965). A grant of immunity, to government witnesses, just as the prior criminal record of its witness, United States v. Murray, 297 F.2d 812 (2d Cir. 1962), or a plea of guilty by the witness with sentencing awaiting the giving of testimony for the government, United States v. Del Purgatorio, 411 F.2d 84, 87 (2d Cir. 1969), or an invocation of the Fifth Amendment before the grand jury with a subsequent promise of no prosecution in return for a promise to testify for the government, United States v. Brill, supra, may be brought out on direct examination, provided the jury is cautioned that the testimony is not evidence of the defendant's guilt. As we stated in United States v. Freeman, 302 F.2d 347, 350 (2d Cir. 1962), cert. denied, 375 U.S. 958, 84 S. Ct. 448, 11 L. Ed. 2d 316 (1963):
There was no objection to the questions concerning the identity of the witness' counsel and the grant of immunity at the time these questions were asked. No objection was made to the instruction that failure to testify except upon a grant of immunity allows the inference that the testimony was given "with reluctance." Nor were there requests at trial for a more explicit instruction that neither the grants of immunity nor the use of a common counsel would support an inference as to the guilt or innocence of the defendant. In the absence of such objections and after having found, in the context of the whole case, that the failure to give more explicit instructions is not plain error within Fed. R. Crim. P. 52(b), we find no reversible error. United States v. Indiviglio, 352 F.2d 276 (2d Cir. 1965), cert. denied, 383 U.S. 907, 86 S. Ct. 887, 15 L. Ed. 2d 663 (1966).
In its consideration of the use of prior arrests in the cross-examination of character witnesses, the Supreme Court stated that the trial judge must have broad discretion. Reversal by appellate courts occur "rarely and only on clear showing of prejudicial abuse of discretion." Michelson v. United States, 335 U.S. 469, 480, 69 S. Ct. 213, 221, 93 L. Ed. 168 (1948).
This is not a case wherein the trial judge either was affirmatively mistaken in his view of the law as established in Michelson, supra, or misconceived the permissible inquiry allowed by that decision. See Roberson v. United States, 237 F.2d 536, 541 (5th Cir. 1956), cert. denied, 356 U.S. 919, 78 S. Ct. 704, 2 L. Ed. 2d 715 (1958); Wilcox v. United States, 387 F.2d 60, 64 (5th Cir. 1967). In the absence of a demand for a demonstration out of the hearing of the jury of the good faith of the prosecutor in asking questions about actual events which were likely to arise in community discussion of the defendant's character and reputation, we cannot conclude that the trial judge erroneously failed to satisfy himself that such requirements were met.
The cautionary instruction given at the end of the trial gave full and fair treatment to the problems presented by the use of prior arrests in impeaching a character witness. Silverman's complaint that this was "too late" is untenable in view of the proper presentation of the questions before the jury and the absence of a request for instructions at the time the questions were asked. United States v. Giddins, 273 F.2d 843, 846 (2d Cir.), cert. denied, 362 U.S. 971, 80 S. Ct. 955, 4 L. Ed. 2d 900 (1960).
When Congress in 1959 subjected to criminal sanctions "any person who embezzles, steals, or unlawfully and willfully abstracts or converts to his own use, or the use of another" any of the assets of a labor organization of which he is an officer or employee, it was not inventing new language. The phraseology resembles that used in defining many "larceny-type" offenses in the criminal code. See, e.g., 18 U.S.C. § 641 (public money, property or records), § 645 (court officers), § 654 (officer or employee of United States embezzling or converting money or property of another), § 655 (theft by bank examiner), § 656 (theft, embezzlement, or misapplication by bank officer or employee), § 657 (employees of various lending, credit and insurance institutions), § 658 (property mortgaged or pledged to farm credit agencies), § 659 (interstate or foreign shipments by carrier), § 660 (carrier's funds derived from interstate commerce), § 661 (personal property within maritime and territorial jurisdiction); 15 U.S.C. § 80a-36 (assets of registered investment companies). These statutes have gone beyond the common law offense of larceny and the old statutory crime of embezzlement because "gaps or crevices have separated particular crimes of this general class and guilty men have escaped through the breaches," Morissette v. United States, 342 U.S. 246, 271-272, 72 S. Ct. 240, 254, 96 L. Ed. 288 (1952). But, as was there held, despite minor variations in language the common thread is that the defendant, at some stage of the game, has taken another person's property or caused it to be taken, knowing that the other person would not have wanted that to be done. See Brown v. Bullock, 294 F.2d 415, 418-420 (2 Cir. 1961). Congress subjected union officers or employees to the same test of criminal liability as government employees, bank officers and the like — not to a lower one. See Colella v. United States, 360 F.2d 792, 798 n.4 (1 Cir.), cert. denied, 385 U.S. 829, 87 S. Ct. 65, 17 L. Ed. 2d 65 (1966), and the legislative history there cited.
We distinguish United States v. Cox, 285 F. Supp. 367 (E.D. Wis. 1968) and Walker v. United States, 342 F.2d 22, 26-27 (5th Cir.), cert. denied, 382 U.S. 859, 86 S. Ct. 117, 15 L. Ed. 2d 97 (1965), cited by the defendant, upon the ground that there was no allegation present in those cases from which the essential element in question could be necessarily implied. We do not regard United States v. Pearce, 275 F.2d 318, 324 (7th Cir. 1960) or United States v. Gordon, 253 F.2d 177, 179-180 (7th Cir. 1958) to be contrary to the result here because the allegations of interstate commerce in the questioned counts are not implied by reference to another count, i. e., count eighteen, but rather by the presence of an allegation in the challenged counts themselves. In United States v. Psoinos Construction Co., 282 F. Supp. 473 (D. Mass. 1968) the indictment alleged that an employer had employees employed in an industry affecting interstate commerce, but failed to allege that the union sought to represent those employees who were so employed. Since the union may have sought to represent only those employees not so employed, the indictment was held insufficient to charge a crime under 29 U.S.C. §§ 186(a) (2), (d) (1964). This case is not contrary to our result since the allegation in question could not be necessarily implied by those present in the indictment
We are not relying upon this allegation in count eighteen to supply any allegations in the other counts of the indictment. See note 3 supra and accompanying text. Such allegation is merely evidence of what was before the grand jury when they indicted.