Opinion ID: 6500514
Heading Depth: 3
Heading Rank: 1

Heading: Admission of LCN Evidence35

Text: Prior to trial, the government moved for permission to introduce evidence of Scarfo’s and Pelullo’s association with organized crime, including an explanation of the hierarchy of LCN and the custom of paying superiors within the organization. The government presented two alternative arguments in support of its request: first, the evidence was intrinsic to the charged offenses; and second, even if not intrinsic, the evidence was admissible as evidence of prior bad acts pursuant to Federal Rule of Evidence 404(b). Over the Defendants’ objections, the District Court permitted introduction of the LCN evidence as “classic 404(b) evidence.”36 (JAB at 2343.) It reasoned that the evidence was 35 We review decisions to admit evidence for abuse of discretion, and such discretion is construed especially broadly in the context of Rule 403. United States v. Moreno, 727 F.3d 255, 262 (3d Cir. 2013) (“In order to justify reversal, a district court’s analysis and resulting conclusion must be arbitrary or irrational.” (citation omitted)). “However, to the extent the District Court’s admission of evidence was based on an interpretation of the Federal Rules of Evidence, the standard of review is plenary.” United States v. Bobb, 471 F.3d 491, 497 (3d Cir. 2006). 36 The District Court disagreed with the government’s 55 “relevant because it explain[ed] how and why the takeover occurred” and was “offered … to show motive and control[.]” (JAB at 2343.) The Court also decided the evidence was “sufficiently probative under [Rule] 403 because it … provide[d] an explanation as to why people would do what they [allegedly] did in this case,” and that, although the evidence of mob ties may have been prejudicial, that prejudice did not “significantly outweigh[] the relevance of the testimony about the membership in La Cosa Nostra.” (JAB at 2343.) Consistent with that ruling, Agent Kenneth Terracciano testified at trial about the hierarchy of LCN, Scarfo’s father’s involvement in LCN, the attempted murder of Scarfo in 1989, and Scarfo’s subsequent status with the Lucchese family. Terracciano did not testify that Scarfo had committed any crimes on behalf of the Lucchese family and did not even mention Pelullo. The government instead sought to establish Pelullo’s allegiance to LCN by introducing evidence of, among other things, his close relationship with Scarfo and Scarfo’s father, including during the takeover of FirstPlus, and his efforts to get Scarfo’s father released from prison. Throughout the trial, the District Court repeatedly provided limiting instructions to the jury. Namely, each time LCN or organized crime was mentioned, the Court informed the jury that “[t]here [was] no evidence and the government [did] not allege that any defendants, other than Scarfo and Pelullo, were associates in any organized crime organization.” alternative argument that the evidence of LCN ties was intrinsic to the indicted crimes and hence not subject to Rule 404(b). 56 (JAC at 1750-51; see also JAC at 711-13, 5434-35.) The Court made clear it was up to the jurors to decide whether Scarfo or Pelullo “were so associated or whether they made use of, sought the benefit of or benefited from their association with La Cosa Nostra, and whether either of them used those associations to further the unlawful goals of the RICO enterprise alleged in this case.” (JAC at 1750-51; see also JAC at 711-13.) The jury was also instructed that none of those associations could be considered “as proof that … Scarfo and Pelullo had a bad character or any propensity to commit crime.” (JAC at 1751; see also JAC at 712-13, 1473.) Under Federal Rule of Evidence 404(b), evidence of a defendant’s prior crimes, wrongs, or other acts “is not admissible to prove a person’s character in order to show that on a particular occasion the person acted in accordance with the character” – in other words, it may not be used to show that a person had a propensity for crime. Fed. R. Evid. 404(b)(1). Such evidence is admissible, however, “for another purpose, such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident.” Fed. R. Evid. 404(b)(2). We have explained that 404(b)(2) evidence is admissible “if it is: (1) offered for a non-propensity purpose; (2) relevant to that identified purpose; (3) sufficiently probative under Rule 403 so its probative value is not [substantially] outweighed by any inherent danger of unfair prejudice; and (4) accompanied by a limiting instruction, if requested.” United States v. Garner, 961 F.3d 264, 273 (3d Cir. 2020) (citation and internal quotation marks omitted). “In a conspiracy case, evidence of other bad acts, subject always to the requirements of Rule 403, can be admitted to explain the background, formation, and development of the illegal relationship.” United States v. Escobarde Jesus, 187 F.3d 148, 57 169 (1st Cir. 1999); accord United States v. Reifler, 446 F.3d 65, 91-92 (2d Cir. 2006) (“Evidence that a defendant had ties to organized crime may be admissible in a variety of circumstances[,]” including to explain “how the illegal relationship between [co-conspirators] developed[.]” (citation omitted)). The Defendants contend that the District Court abused its discretion by admitting the organized crime evidence. More specifically, they allege that the evidence was not relevant, was not offered for a non-propensity purpose, and was unduly prejudicial. All three arguments lack merit. First, the District Court correctly deemed the LCN evidence relevant. Federal Rule of Evidence 402 states “[i]rrelevant evidence is not admissible.” As the Court noted, the LCN evidence explained “how and why the takeover [of FirstPlus] occurred.” (JAB at 2343.) So the evidence was relevant. And proving motive is a proper purpose for evidence under Rule 404(b). Virtually everything in this case traces back to the conspirators’ decision to seize control of the company, which was motivated at least in part by Pelullo’s and Scarfo’s LCN obligations. That is most relevant to Pelullo (and Scarfo), but it is relevant to the Maxwells too. The Maxwells may have boarded the conspiracy for their own reasons, but they still got on. The ties to LCN help explain how and why the railroad was being operated. In that vein, the evidence shed light on Scarfo’s and Pelullo’s relationship, explaining why Pelullo was subservient to Scarfo even though Pelullo was the operational leader of the 58 FirstPlus scheme.37 See United States v. King, 627 F.3d 641, 649 (7th Cir. 2010) (affirming admission of gang evidence that “helped establish the relationship among [the co-conspirators and] the rank of those men within the gang,” which “was central to the government’s theory”). It also explained Scarfo’s need to pay off the Lucchese crime family. And, contrary to the Defendants’ arguments, it is immaterial whether Scarfo and Pelullo also engaged in the conspiracy for personal reasons – namely, a desire to line their own pockets – in addition to doing so to meet their LCN obligations. “[T]he law recognizes that there may be multiple motives for human behavior[,]” and evidence of other motives does not render irrelevant the evidence of Scarfo’s and Pelullo’s LCN ties. See United States v. Technodyne LLC, 753 F.3d 368, 385 (2d Cir. 2014) (citing Anderson v. United States, 417 U.S. 211, 226 (1974) (“A single conspiracy may have several purposes, but if one of them – whether primary or secondary – be the violation of a federal law, the conspiracy is unlawful[.]”)). So, the evidence was offered for, and relevant to, a nonpropensity purpose. Even then, it still had to survive Rule 403’s balancing test. And it did. The District Court said that 37 To only highlight a few examples indicating Pelullo’s subservience to Scarfo, Pelullo ensured that Scarfo received $33,000 per month plus expenses through a sham consulting agreement under which Scarfo did nothing of value, and he fraudulently obtained a mortgage for Scarfo’s wife. In addition, evidence indicated that Pelullo was driven by his fear of not being able to pay Scarfo’s father. (See JAD at 1468 (“[W]hatta we gonna do without that money they’re they’re [sic] dead. … [M]y uncle is gonna f[]in’ kill me.”).) 59 it was sure there was some prejudice to Pelullo and Scarfo from the introduction of the evidence, but it found that the prejudicial effect did not substantially outweigh the probative value of the organized crime evidence because that evidence helped explain why the Defendants did what they did. (JAB at 2343.) Pelullo argues that the balancing was “insufficient and substantively improper[,]” but he does not specify what else the Court should have considered or why the Court’s reasoning was deficient. (SP Reply Br. at 23-24.) Because the Court “engage[d] in a Rule 403 balancing and articulate[d] on the record a rational explanation,” the 403 challenge fails. 38 United States v. Sampson, 980 F.2d 883, 889 (3d Cir. 1992). The Maxwells make a related prejudice argument. They contend that, due to the admission of LCN evidence, “Scarfo’s 38 Pelullo makes an additional Rule 403 argument on a separate piece of evidence. He says the District Court improperly admitted testimony from FirstPlus secretary David Roberts that, shortly after the FirstPlus takeover, Pelullo told him, William Maxwell, and John Maxwell “that if we ever rat, our wives will be f[]ed by the N word and our children will be sold off as prostitutes.” (JAC at 1848.) The Court determined that the threat was probative in showing that Pelullo wanted to “drive home the point that he was threatening harm and he obviously thought that … the listener [would have understood he] was in grave danger.” (JAB at 2402.) The Court concluded that any prejudicial effect from the disgusting phrasing of the threat was outweighed by the relevance of proving Pelullo’s state of mind. Because the Court conducted 60 proverbial blood spilled all over” them, resulting in a “taint [that] could not be washed away or otherwise cle[a]nsed.” (JM Opening Br. at 37.) But the District Court, in addition to weighing the evidence under Rule 403, provided clear instructions to the jury that only Scarfo and Pelullo, not any of the other defendants, were associated with LCN and the Lucchese family. Limiting instructions are an appropriate way to ensure that a jury understands the purpose for which evidence of prior acts may be considered, and such instructions are generally sufficient “to cure any risk of prejudice[.]” Zafiro v. United States, 506 U.S. 534, 539 (1993); see also United States v. Lee, 612 F.3d 170, 185 (3d Cir. 2010) (upholding a decision to admit evidence under Rule 404(b) in part because the district court gave a limiting instruction). There is particular reason to think that the jury followed those instructions here because some of the Maxwells’ codefendants – Adler, McCarthy, and Manno – were acquitted, despite also being associated with the FirstPlus takeover. See, e.g., United States v. Greenidge, 495 F.3d 85, 95 (3d Cir. 2007) (noting “the fact that the jury acquitted [a codefendant] is critical proof that the jury was ‘able to separate the offenders and the offenses’” (citation omitted)); United States v. Sandini, 888 F.2d 300, 307 (3d Cir. 1989) (finding claim of prejudice “without merit” where a codefendant was acquitted of some charges, “a fact indicating that the jury carefully weighed the evidence relating to each an appropriate Rule 403 balancing analysis and reached a rational conclusion, we discern no error in the admission of that evidence. United States v. Sampson, 980 F.2d 883, 889 (3d Cir. 1992). 61 defendant and each charge”); United States v. Solis, 299 F.3d 420, 441 (5th Cir. 2002) (“[T]he jury acquitted some of the alleged co-conspirators, supporting an inference that the jury sorted through the evidence … and considered each defendant and each count separately[.]”). We thus see no reason to stray from “the almost invariable assumption of the law that jurors follow their instructions[.]” Richardson v. Marsh, 481 U.S. 200, 206 (1987).