Opinion ID: 379997
Heading Depth: 1
Heading Rank: 3

Heading: Cannatella

Text: 31
32 On appeal, Cannatella argues that the bankruptcy fraud charges against him were improperly joined under Federal Rule of Criminal Procedure 8(b) with the securities fraud counts charged in the indictment against the other defendants. However, we find that the joinder was proper, substantially for the reasons set forth by Judge Sweet. United States v. DePalma, 461 F.Supp. 778, 787-90 (S.D.N.Y.1978). 33 Rule 8(b) permits the joint trial of defendants who are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. This requirement is met by the RICO count of the indictment. As previously noted, the jury could properly find that Weisman engaged in a pattern of racketeering activity that included, but was not limited to, the predicate acts of bankruptcy fraud with which Cannatella was charged. If, as we have already concluded, the acts of bankruptcy fraud could properly be considered part of a pattern of racketeering activity, we see no reason why they could not similarly constitute part of a series of acts or transactions constituting an offense within the meaning of Rule 8(b). Indeed, a construction of Rule 8(b) that required a closer relationship between transactions than that necessary to establish a pattern of racketeering activity under RICO might possibly prohibit joinder in circumstances where Congress clearly envisioned a single trial. 34 While we conclude that the RICO count alleges a sufficient nexus between the counts of securities fraud and bankruptcy fraud to establish that they were part of the same series of acts or transactions, appellant Cannatella is in a somewhat unusual position because he was not indicted on the unifying RICO count, but was instead only charged with the various counts of bankruptcy fraud. However, this does not affect the propriety of joinder under Rule 8(b). The Rule specifically provides that all of the defendants need not be charged in each count and this language has generally been construed to permit joinder in cases where individual defendants are charged with some but not all counts of the indictment. See, e. g., United States v. Wofford, 562 F.2d 582, 585 (8th Cir. 1977), cert. denied, 435 U.S. 916, 98 S.Ct. 1471, 55 L.Ed.2d 507 (1978); United States v. Scott, 413 F.2d 932, 934-35 (7th Cir. 1969); Haggard v. United States, 369 F.2d 968, 973-75 (8th Cir. 1966). Thus, Cannatella's indictment for the various counts of bankruptcy fraud, which also were properly charged as predicate acts of racketeering under the unifying RICO count, made joinder under Rule 8(b) appropriate. 35 Cannatella responds, however, that even if the bankruptcy fraud and securities fraud claims were properly joined under Rule 8(b), he was nonetheless entitled to a severance of trial pursuant to Federal Rule of Criminal Procedure 14. Admittedly, Cannatella entered only during the Theatre's closing scenes, and for several reasons would understandably prefer to have been tried separately from Weisman and the remaining co-defendants. Weisman's criminal activities extended far beyond those of Cannatella, and it was only during that portion of the trial dealing with the securities fraud charges that the peripheral association of reputed mobster Carlo Gambino with the Theatre, as well as the prior criminal records of DePalma and Fusco, came to light. 36 Thus, Cannatella was concerned over possible evidentiary spillover from portions of the trial unrelated to the bankruptcy fraud counts, and may conceivably have had a better chance of acquittal had his motion for severance been granted. Nonetheless, the decision to grant or deny a severance pursuant to Rule 14 is within the broad discretion of the trial court and will not be overturned on appeal absent some showing that the defendant suffered substantial prejudice due to the joint trial. See United States v. Ochs, 595 F.2d 1247, 1260 (2d Cir.), cert. denied, 444 U.S. 955, 100 S.Ct. 435, 62 L.Ed.2d 328 (1979). In the instant case, consideration of judicial economy weighed heavily in favor of a single trial, and we find no countervailing indications of actual prejudice to Cannatella that would mandate a severance. Before trial, the district judge carefully questioned prospective jurors concerning their knowledge of Gambino and excused those whose impartiality was in doubt. Furthermore, during the trial Judge Sweet repeatedly admonished the jury to evaluate the offenses charged and the evidence presented against each defendant separately, and the acquittal on all counts of co-defendant Nersesian, who was charged with stock fraud violations, indicates that the jury was able to do so. The danger of evidentiary spillover was further diminished by the fact, implicit in Cannatella's challenge to joinder under Rule 8(b), that there was little overlap at trial between the evidence pertaining to the securities fraud counts and that concerning the bankruptcy fraud counts. Accordingly, we find no error in the refusal to sever. 37
38 Appellant Cannatella also challenges the sufficiency of the evidence on two grounds. Appellant first contends that under this court's decision in United States v. Geaney, 417 F.2d 1116 (2d Cir. 1969), cert. denied, 397 U.S. 1028, 90 S.Ct. 1276, 25 L.Ed.2d 539 (1970), there was insufficient non-hearsay evidence of Cannatella's involvement in the alleged bankruptcy fraud conspiracy to permit the introduction into evidence of incriminating hearsay statements of Cannatela's co-conspirators. Under Geaney, before a court may admit into evidence the out-of-court declarations of a defendant's co-conspirator, it must first find by a fair preponderance of the evidence independent of the hearsay utterances that the defendant participated in the conspiracy. Id. at 1120. The district court, in ruling that the Geaney test had been met, relied primarily on tape-recorded phone conversations on June 1, 1977 between Cannatella and DePalma and on July 7, 1977 between Cannatella and Fusco. The court, however, also noted the presence of additional evidence connecting Cannatella with the conspiracy. We have reviewed the record, and we hold that the district court's determination that the Geaney standard had been met was correct. The telephone conversations noted by the district court clearly suggest that Cannatella knew of and was participating in the conspiracy to commit bankruptcy fraud by skimming the Theatre's receipts. Appellant argues, in elaborate detail, that each conversation is susceptible of an innocent interpretation. That may be, but in each instance the judge and the jury could reject it (and they both obviously did), see United States v. Stanchich, 550 F.2d 1294, 1300 (2d Cir. 1977), particularly when, as here, the proffered interpretation is implausible. 39 Appellant also asserts that even if the Geaney standard was met and the hearsay declarations of his co-conspirators were properly admitted, the evidence was insufficient to prove his guilt beyond a reasonable doubt. Our review of the evidence, however, persuades us that the jury reasonably could conclude that after 1976 Cannatella was exercising primary financial control over the Theatre, that the skimming of Theatre revenues continued unabated, and that Cannatella participated in the division and distribution of the skimmed revenues. Accordingly, the jury could reasonably find that Cannatella was guilty of the offenses charged.