Opinion ID: 379997
Heading Depth: 1
Heading Rank: 2

Heading: Weisman

Text: 7
8 Weisman directs his most pointed attack against his conviction for violating the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 et seq., commonly known as RICO. For convenience, we have reproduced the relevant sections of RICO as Appendix A. The RICO count charged that Weisman, along with DePalma and Fusco, violated § 1962(c) by conducting the affairs of the Theatre through a pattern of racketeering activity that included the various predicate acts of securities fraud and bankruptcy fraud alleged elsewhere in the indictment. Weisman contends that his conviction on this count was invalid in three respects. 9 Weisman first argues that Judge Sweet's charge on the relationship between the various predicate acts of racketeering necessary to establish a violation of section 1962(c) was incorrect. That section prohibits the operation of any enterprise engaged in interstate or foreign commerce through a pattern of racketeering activity. A pattern of racketeering activity is defined by section 1961(5) to require the commission of at least two acts of racketeering within a ten-year period, and section 1961(1)(D) specifies both fraud in the sale of securities and bankruptcy fraud as acts of racketeering. Weisman, however, unsuccessfully requested that the jury be charged that even if it found that he had committed two or more predicate acts of racketeering within a ten-year period, an unlawful pattern of racketeering activity would not be established unless the predicate acts were also found to be related to each other through a common scheme, plan or motive so as to constitute a pattern of activity. 10 Weisman renews this claim on appeal, arguing that a requirement of relatedness between predicate acts is implicit in the meaning of the word pattern and should have been explained further, as he requested. Appellant further argues that such an interpretation is necessary in order to prevent the application of RICO to instances of sporadic and unrelated criminal activity that Congress clearly did not intend the statute to cover. 2 Finally, appellant relies heavily on the analysis of the district court in United States v. Stofsky, 409 F.Supp. 609 (S.D.N.Y.1973), aff'd on other grounds, 527 F.2d 237 (2d Cir. 1975), cert. denied, 429 U.S. 819, 97 S.Ct. 65, 50 L.Ed.2d 80 (1976). In Stofsky, the court noted that the language of RICO did not embody any express requirement of relatedness between predicate acts. The court nonetheless concluded, as appellant argues here, that the word pattern should be construed to require that the predicate acts of racketeering be connected with each other by some common scheme, plan or motive in order to prevent the application of the statute to isolated and sporadic criminal acts. 409 F.Supp. at 614. The court found further support for its interpretation of pattern in the language of 18 U.S.C. § 3575, the provision of the criminal code dealing with Dangerous Special Offenders. Section 3575 characterizes as special offenders those who, inter alia, commit a felony as part of a pattern of criminal conduct, and subsection (e) specifies that a pattern of criminal conduct exists when criminal acts . . . have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events. Since RICO and section 3575 were both enacted as part of the Organized Crime Control Act of 1970, the Stofsky court concluded that the interpretation of the word pattern under both provisions should be similar. 11 While these arguments are far from frivolous, we affirm Judge Sweet's refusal to give the requested charge, substantially for the reasons set forth in his ruling on appellant's challenge to the indictment before the first trial, which raised the same arguments. United States v. DePalma, 461 F.Supp. 778, 781-85 (S.D.N.Y.1978). As noted in Stofsky, supra, the statutory language does not expressly require that the predicate acts of racketeering be specifically related to each other and we find no affirmative evidence in the legislative history from which we should infer such a requirement. 3 Furthermore, the broad spectrum of predicate acts of racketeering enumerated in section 1961(1) belies any intent on the part of Congress to require that such predicate acts of racketeering must possess a unitary character. While we agree with appellant Weisman that RICO was not intended to apply to sporadic and unrelated criminal acts, see S.Rep.No.91-617, 91st Cong., 1st Sess., pp. 122, 158 (1970), we find that the statute was generally designed to avoid such an application. Most importantly, the predicate acts constituting a pattern of racketeering activity must all be done in the conduct of the affairs of an enterprise. 18 U.S.C. § 1962(c). Thus, the enterprise itself supplies a significant unifying link between the various predicate acts specified in section 1961(1) that may constitute a pattern of racketeering activity. See United States v. Elliott, 571 F.2d 880, 899 & n.23 (5th Cir. 1978). In addition, the statute requires that the predicate acts be temporally related in that they must occur within a ten-year period. Moreover, we do not believe that the extensive definition of pattern in section 3575 requires a district court to give a parallel charge concerning the meaning of pattern under RICO. Indeed, the fact that the two sections were enacted simultaneously yet embody different definitions of pattern would seem to indicate that Congress intentionally chose to use the term differently in different contexts. 12 It may well be, as appellant argues, that the statutory requirements that predicate acts of racketeering must occur in the conduct of a single enterprise within a ten-year period in order to constitute a pattern of racketeering activity are by themselves inadequate to bar some hypothetical prosecutions under RICO that are clearly beyond the intended scope of the statute. See note 2 supra. In United States v. Huber, 603 F.2d 387 (2d Cir. 1979), cert. denied, --- U.S. ----, 100 S.Ct. 1043, 62 L.Ed.2d 770 (1980), we noted that the potentially broad reach of RICO poses a danger of abuse where a prosecutor attempts to apply the statute to situations for which it was not primarily intended and we went on to caution strongly against undue prosecutorial zeal in invoking RICO. Id. at 395-96. We reiterate this warning, but are content to rule on actual, as opposed to hypothetical, applications of the statute, and we find that the RICO indictment in the present case was clearly appropriate. The evidence in the record reveals that the affairs of the Theatre, from its inception until its eventual collapse and bankruptcy, were conducted through a variety of racketeering activities enumerated in the indictment. Indeed, a more appropriate application of the statute would be difficult to imagine. 4 Accordingly, we find no error in the court's refusal to adopt Weisman's extended definition of pattern in charging the jury. 13 Weisman also objects to the RICO conviction on the ground that the district court incorrectly charged the jury that the two conspiracy counts alleged in the indictment could constitute the predicate acts of racketeering necessary to establish a pattern of racketeering activity under section 1962(c). In support, appellant notes that violations of 18 U.S.C. § 371, the conspiracy statute, are not listed as predicate acts of racketeering under section 1961. Appellant also infers a specific congressional intent to exclude conspiracy as a predicate act from the fact that original versions of the bill that ultimately became RICO did include conspiracy as a predicate act, but the statute as enacted did not. Finally, appellant suggests that the inclusion of conspiracy as a predicate act would again raise the specter of an unintended hypothetical application of RICO; specifically, appellant argues that commission of a single substantive offense enumerated in section 1961 could nonetheless result in a RICO violation if conspiracy to commit that offense were also charged as a predicate act of racketeering. Such a prosecution, appellant contends, would be directly contrary to Congress's intent to restrict the application of RICO to situations in which two or more separate predicate acts of racketeering are committed. 14 While these arguments are not without force, we think that conspiracy can properly be charged as a predicate act of racketeering under RICO, at least when it involves any of the substantive offenses listed in section 1961(1)(D). That provision states that  '(r)acketeering activity' means . . . any offense involving (bankruptcy) fraud . . ., fraud in the sale of securities, or the felonious manufacture, importation, concealment, buying, selling, or otherwise dealing in narcotic or other dangerous drugs, punishable under any law of the United States. (Emphasis supplied). This language is certainly broad enough on its face to include conspiracies involving securities and bankruptcy fraud and drug related offenses. The deletion of conspiracy from earlier drafts of RICO does not undermine this conclusion. In those drafts, the conspiracies chargeable as predicate acts could relate to a broad number of offenses now listed in subsections (A) to (C) of section 1961. While this specific reference to conspiracy was deleted from the final version of RICO, the expansive language quoted above was retained in a separate section section 1961(1)(D). Thus, the alterations of section 1961(1) are most logically interpreted as an attempt to restrict the conspiracies chargeable as predicate offenses to those involving offenses listed in subsection (D). This conclusion is bolstered by the fact that subsections (B) and (C), which list most of the other predicate acts chargeable under RICO, conspicuously lack the broad any offense involving language of subsection (D) and, in fact, require that the act be indictable under specifically enumerated sections of the criminal code. Finally, the present indictment is not rendered invalid simply because some hypothetical prosecutions under the statute as presently interpreted would fall beyond the pale of intended application. 15 Even if our conclusion that the two conspiracy counts could be charged as predicate acts of racketeering is incorrect, Weisman's conviction under the RICO count is nonetheless valid. In addition to convicting Weisman on the conspiracy counts, the jury also found him guilty of nine counts of bankruptcy fraud, all of which were also charged as predicate acts of racketeering under the RICO count, and nine counts of fraud in the sale of securities, which the district court also charged could constitute a single predicate act of racketeering under the RICO count. 5 Thus, even excluding the conspiracy counts as predicate acts, the convictions for securities fraud and bankruptcy fraud could also constitute ten separate predicate acts of racketeering, any two of which would be sufficient to sustain the conviction on the RICO count. This assumes, of course, that the jury also found that these substantive offenses occurred in the conduct of an enterprise engaged in interstate or foreign commerce, as required by section 1962(c). While in some situations it may be doubtful that this assumption is established as a matter of law, in the present case the jury could not have rationally concluded that the conspiracies to commit bankruptcy and securities fraud occurred in the conduct of the Theatre's affairs without also finding that the substantive offenses carried out in the course of the conspiracies also took place in the conduct of the Theatre's affairs. Thus, even if the conspiracy counts were excluded, the jury verdict conclusively established a RICO violation and therefore any error in the inclusion of these counts in the RICO charge was harmless. For this reason, the decision in United States v. Brown, 583 F.2d 659, 669 (3d Cir. 1978), cert. denied, 440 U.S. 909, 99 S.Ct. 1217, 59 L.Ed.2d 456 (1979), heavily relied upon by appellant, is distinguishable. In Brown, where there was no conspiracy charge, the jury found defendant guilty of four substantive counts and also of a RICO count in which the four counts were charged as predicate acts of racketeering. The Third Circuit reversed the convictions on two of the substantive counts for insufficient evidence. However, unlike the present case in which the conspiracy counts covered the substantive offenses charged as predicate acts, in Brown the substantive offenses charged as predicate acts were distinct and hence it was arguably impossible to determine from the verdict which offenses the jury relied upon in finding a pattern of racketeering. Accordingly, the Third Circuit also invalidated the RICO conviction. But see United States v. Parness, 503 F.2d 430, 438 (2d Cir. 1974), cert. denied, 419 U.S. 1105, 95 S.Ct. 775, 42 L.Ed.2d 801 (1975). 16 Finally, appellant attacks the RICO conviction because the judge charged that the securities fraud counts could be a predicate act of racketeering. Weisman argues that because the Theatre was not constructed and in operation until 1975, it was not an enterprise in 1973 when the acts of securities fraud took place. Consequently, the argument goes, securities fraud could not constitute a predicate act of racketeering through which Weisman conducted the affairs of an enterprise, within the meaning of section 1962(c). We reject this view as an overly restrictive interpretation on these facts of the meaning of enterprise within the context of that section. While that provision is apparently inapplicable to acts of racketeering occurring before the creation or acquisition of an enterprise, 6 we believe that there was sufficient evidence to allow the jury to conclude that an enterprise was in existence well before the acts of securities fraud in 1973. For example, after its incorporation in 1971, the Theatre adopted bylaws, secured counsel and hired employees, established offices, sought a construction loan, entered negotiations with a real estate firm for a construction site, and began entering performance contracts with various entertainers. The procurement of additional funds through the 1973 public offering was thus simply another, admittedly crucial, part of the Theatre's continuing affairs, and the jury could therefore conclude that the fraud that occurred in connection with the public offering constituted an act of racketeering activity undertaken in the conduct of the Theatre's affairs. 17
18 Weisman also argues that the district court erred in not suppressing certain statements he made to the government on September 19, 1977. Weisman had been arrested three days before pursuant to a warrant issued against him and his wife for allegedly making false statements on a bank loan application in violation of 18 U.S.C. § 1014, a charge unrelated to the present indictment. Weisman was advised of his Miranda rights and, after signing a waiver of rights form, was questioned by Assistant United States Attorney Nathaniel Akerman. The focus of the interrogation, however, soon shifted from the alleged bank loan fraud to possible criminal activities engaged in by Weisman in connection with the Theatre's operations. Akerman outlined the already substantial evidence against Weisman and suggested that he faced a twenty-year prison term for racketeering. Weisman was informed that if he cooperated in the grand jury's ongoing investigation of the Theatre's operations, the fact of his cooperation would be brought to the attention of the judge. Apparently as a further incentive, the government declined to execute the arrest warrant for Weisman's wife on the bank loan fraud charges. Weisman agreed to cooperate; after answering questions for several hours, he was released on his own recognizance. 19 The following day, the Weisman was formally arraigned before United States District Judge Knapp on the bank loan fraud charges and, with the government's consent, was again released from custody. Two days later, on September 19, 1977, Weisman again met with Akerman and several government agents. After being advised of his rights and signing a second waiver form, Weisman continued to answer questions concerning the operation of the Theatre. On October 2, 1977, the complaint against the Weismans concerning the fraudulent bank loan application was dismissed on the government's motion. Weisman, however, subsequently declined to cooperate further in the Theatre investigation. 20 Prior to trial on the present indictment, Weisman moved to suppress his statements of September 16 and 19 as the products of an illegal arrest. Judge Sweet ruled that the arrest had been improper because of lack of probable cause and because it was partially motivated by a desire to obtain Weisman's cooperation in the grand jury investigation of the Theatre. Accordingly, the judge suppressed Weisman's statements of September 16. The court nonetheless declined to suppress the September 19 statements, concluding the intervening circumstances had sufficiently dissipated the taint of the original arrest. See United States v. DePalma, 461 F.Supp. 800, 831-35 (S.D.N.Y.1978). 21 Weisman now contends that the failure to suppress the September 19 statements was erroneous under the Supreme Court's controlling decision in Brown v. Illinois, 422 U.S. 590, 95 S.Ct. 2254, 45 L.Ed.2d 416 (1974). In Brown, the Court noted that statements obtained after an illegal arrest need not be excluded at trial if the causal connection between the arrest and the statements was broken. The Court specifically noted that the administration of Miranda warnings, the temporal proximity of the arrest and the statements, the presence of intervening circumstances, and the purpose and flagrancy of the official misconduct were all factors relevant to a determination of whether the statements were obtained through exploitation of an illegal arrest. Id. at 603-04, 95 S.Ct. at 2261-2262. In the present case, Judge Sweet assessed Weisman's September 19 statements in light of the Brown criteria and concluded that they were the result of a voluntary and informed decision by Weisman to cooperate with the government rather than the direct fruit of the September 16 illegal arrest. DePalma, supra, 461 F.Supp. at 835. Specifically, the court noted the three-day lapse between statements, the formal arraignment of Weisman before Judge Knapp, the release of Weisman on his own recognizance and the accompanying opportunity to consult with counsel, the general lack of governmental intimidation, and Weisman's informed waiver of his rights prior to the September 19, 1977 discussions. The judge concluded that these created a sufficient break in the steam of events to insulate the later statements. Id. 22 We agree with this analysis. Although Weisman was never entirely free of the shadow of the illegal arrest, we believe that the facts cited by Judge Sweet were sufficient to dissipate the coercive impact of that arrest. Nor do we find the government's misconduct so flagrant as to require a prophylactic invocation of the exclusionary rule. Although the arrest was held to lack probable cause and was designed, at least in part, to obtain Weisman's cooperation in the Theatre investigation, the district court did not find the government's action to have been in bad faith or without any evidentiary justification. In the absence of such indications of government misconduct, we have held that the exclusionary rule need not automatically be invoked if the taint of the original arrest had been purged by intervening circumstances. See United States ex rel. Pella v. Reid, 527 F.2d 380, 382-83 (2d Cir. 1975). Accordingly, we find that Weisman's September 19 statements were admissible. 23
24 Weisman also argues that his convictions on the securities fraud and obstruction of justice counts should be reversed because of the government's improper refusal to grant use immunity to two defense witnesses who allegedly would have exculpated him. In so arguing, Weisman seeks to take advantage of a favorable ruling by Judge Sweet on a similar claim raised by Weisman's co-defendant, Leonard Horwitz. Following his conviction, Horwitz moved for a new trial, arguing that he had been denied due process by the government's refusal to grant use immunity to two of his witnesses, who themselves were under a continuing government investigation for their role in the Theatre's affairs and who were therefore unwilling to testify unless immunized. Judge Sweet granted the motion for a new trial at which, he indicated, the testimony of the government's immunized witnesses would be suppressed if Horwitz's witnesses were not similarly immunized. 7 25 Weisman now argues that Judge Sweet's ruling on Horwitz's motion for a new trial should be extended to him since the same transactions and testimony are supposedly involved. However, we find it unnecessary to determine whether Weisman falls within the ambit of Judge Sweet's ruling, or to assess the validity of the ruling itself, since we conclude that Weisman waived any such claim by failing to raise it properly in the district court. Although the issue of reverse immunity was raised by Horwitz in both trials and in his post-conviction motion for a new trial, Weisman never moved during either trial to immunize any potential defense witnesses and never sought post-conviction relief from the district court on this ground. However, after he had filed a notice of appeal from his conviction and after the district court had ruled favorably on Horwitz's motion for a new trial, Weisman by motion requested the district court to clarify the record to indicate that he too had raised the reverse immunity claim. The court denied the motion, and Weisman subsequently sought and obtained an order from this court remanding the case to the district court for the limited purpose of determining whether Weisman had raised the reverse immunity issue on the record. 26 In an opinion dated November 26, 1979, Judge Sweet concluded that Weisman failed to properly raise the issue of reverse immunity prior to the time of appeal. The court acknowledged that during both trials a motion made by one defendant was deemed to be adopted by all defendants. Judge Sweet, however, went on to note that this practice was employed primarily on evidentiary objections and did not extend to post-trial proceedings. Hence, Horwitz's request for immunity for his witnesses during trial and his post-conviction motion for a new trial on this ground did not raise a similar claim on behalf of Weisman. In addition, the district court noted that because Weisman was in a somewhat different evidentiary position with respect to the securities fraud and obstruction of justice counts, it would have been incumbent upon (him) . . . to address the proof as it applied to him in order to advance the same claim of deprivation of constitutional right. 27 We see no reason to disturb this ruling. The district court's practice of treating motions made by one defendant during trial as covering all defendants cannot logically be extended to particularized requests after trial by a single defendant that do not relate to the group of defendants as a whole. Horwitz's demand for use immunity for his witnesses constituted such a particularized request, since it derived from the nature of the government's evidence against him and the potential availability of evidence exculpating him. As the district court noted, Weisman was inevitably in a somewhat different evidentiary posture than Horwitz, and hence the burden was properly upon him to show why he would be denied due process if his witnesses were not immunized. Indeed, a contrary rule would force the district judge to determine on his own initiative and without assistance which particularized requests of one defendant should be extended to other co-defendants. Alternatively, Weisman asks us to overlook his failure to press the point below and to invoke the plain error doctrine. The government, however, strongly asserts that there was no error in the district court's failure to immunize Weisman's witnesses and that even if the failure to order use immunity was erroneous, this is a particularly inappropriate case to notice an error not objected to below. See United States v. Calfon, 607 F.2d 29, 31 (2d Cir. 1979). The government asserts that if the argument had been made to Judge Sweet and if he had held that his reverse immunity ruling should apply to Weisman, the government might have decided to try Weisman separately, without the evidence furnished by its immunized witnesses. It is true that the government's evidence against Weisman on the other aspects of the stock fraud not involving Horwitz's transactions was very strong; consequently, it is not an implausible claim that the government might have altered its trial strategy in the face of a timely reverse immunity request by Weisman. Under all the circumstances, we reject the invitation to find plain error. Thus, because Weisman never asserted or argued in a timely fashion that Horwitz's reverse immunity claim applied to him, we affirm Judge Sweet's holding that Weisman waived the claim. See U. S. v. Indiviglio, 352 F.2d 276, 280 (2d Cir. 1965), cert. denied, 383 U.S. 907, 86 S.Ct. 887, 15 L.Ed.2d 663 (1966). 28
29 As previously noted, a substantial portion of the government's evidence against Weisman consisted of tape-recorded conversations obtained through court-ordered electronic surveillance and the body recorder worn by government informant Brodsky. At trial, Weisman requested the district court, pursuant to Federal Rule of Evidence 106, to compel the government to play in their entirety tapes, portions of which the government intended to use. Weisman also sought to admit into evidence, pursuant to Rules 803(24) and 804(b)(5), tape recordings that the government did not intend to use at trial. 30 The district judge denied both requests. He concluded that Rule 106 did not require the government to play tapes in their entirety if the omitted portions were not necessary to clarify, or make not misleading, that which is introduced. 8 Subsequently, the district court ruled on numerous specific applications under Rule 106, granting some and denying some. Judge Sweet also concluded that those tapes not played by the government should not be admitted under Rules 803(24) and 804(b)(5), the residual exceptions to the hearsay rule. 9 The court reasoned that the recordings failed to satisfy the requirements of the Rules, since the recordings did not embody the necessary circumstantial guarantees of trustworthiness and were not more probative than other evidence that could be procured by Weisman, including his own testimony. We find the district court's ruling on both evidentiary issues to be well within the discretion necessarily exercised by a trial judge, and see no reason to elaborate further on the analysis set forth in the judge's memorandum opinion, dated November 21, 1978.