Opinion ID: 777541
Heading Depth: 1
Heading Rank: 2

Heading: sufficiency of the evidence

Text: 6 Under 18 U.S.C. § 892, Whoever makes any extortionate extension of credit, or conspires to do so, shall be fined ... or imprisoned not more than 20 years, or both. Federal law also proscribes willfully advanc[ing] money ... to any person, with reasonable grounds to believe that it is the intention of that person to use the money ... for the purpose of making extortionate extensions of credit.... 18 U.S.C. § 893. An extortionate extension of credit is 7 [a]ny extension of credit with respect to which it is the understanding of the creditor and the debtor at the time it is made that delay in making repayment or failure to make repayment could result in the use of violence or other criminal means to cause harm to the person, reputation, or property of any person. 8 18 U.S.C. § 891(6). Recognizing that direct evidence of the understanding of the parties concerning the consequences of delayed repayment or non-repayment may be difficult to obtain, Congress enumerated four factors which, if all present, would constitute prima facie evidence that the extension of credit was extortionate. 18 U.S.C. § 892(b). The factors are (1) that repayment is unenforceable through civil judicial process; (2) that the loan requires interest greater than 45% per year; (3) that the loan exceeds $100; and (4) that the debtor reasonably believes that the lender either has used [extortionate means] to collect other debts or has a reputation for doing so. United States v. Zannino, 895 F.2d 1, 11 (1st Cir.1990) (summarizing 18 U.S.C. § 892(b)). 9 Instead of alleging that Perrotta's loan to Folco was extortionate, the government tried to implicate Perrotta as a participant in Folco's extortionate loan to Regine. Count One of the indictment charged that Perrotta had conspired with Folco to make extortionate extensions of credit to Regine, in violation of 18 U.S.C. § 892. To win a conviction on this count, the government had to prove that Perrotta and Folco agreed and intended that Folco would make an extortionate extension of credit to Regine (that is, that Regine would understand that Folco would, if necessary, resort to violence or other criminal means to collect). United States v. Escobar-de Jesus, 187 F.3d 148, 175 (1st Cir.1999) (To prove the elements of a conspiracy, the government must show beyond a reasonable doubt that the defendant and one or more coconspirators intended to agree and ... to commit the substantive criminal offense which was the object of their unlawful agreement. (internal quotation marks omitted)). 10 Count Three charged that Perrotta had aided and abetted Folco in making extortionate extensions of credit to Regine, in violation of 18 U.S.C. § 892 and § 2. To win a conviction on this count, the government was required to prove that Perrotta knew that Folco's extensions of credit to Regine were extortionate and that Perrotta intended to assist Folco in making the extortionate loans. See United States v. Rosario-Diaz, 202 F.3d 54, 62 (1st Cir.2000) (to support a conviction for aiding and abetting, the government must prove, in addition to the commission of the offense by the principal, that the defendant consciously shared the principal's knowledge of the underlying criminal act, and intended to help the principal.). 11 Count Two charged Perrotta with financing extortionate extensions of credit from Folco to Regine in violation of 18 U.S.C. § 893. To win a conviction on this count, the government had to establish that Perrotta had advanced money to Folco with reasonable grounds to believe that Folco would use the money to make an extortionate extension of credit. Id. If we conclude in evaluating the evidence that it was sufficient to establish that Perrotta knew of Folco's extortionate practices, we necessarily also conclude that he had reasonable grounds to believe that Folco would employ such practices. 12 Perrotta does not deny having loaned $50,000 to Folco, or that Folco then loaned the $50,000 to Regine. Nor does he dispute the government's claim that Folco's loan of $50,000 to Regine was extortionate. His sole contention is that the evidence was insufficient to support a finding that Mr. Perrotta knew of the intention of Mr. Folco to employ violence in his collection efforts.
13 In weighing Perrotta's challenge to the sufficiency of the evidence against him, we view the evidence in the light most favorable to the verdict, and draw all reasonable inferences in favor of the verdict. United States v. Benjamin, 252 F.3d 1, 5 (1st Cir.2001). There was ample evidence at trial that Folco was a loan shark, including a notebook in which Folco had recorded the principal amount, interest rate, and payment schedule of over a dozen debts owed to him. The interest Folco charged on these loans was two to three percent per week. There was extensive evidence that it was Folco's practice to use violence and threats of violence to collect debts. For example, Folco explained to Gary Cedroni (a Folco associate) that one of his debt collectors, who had just got out of the can and was half fucking nuts, would crack a debtor in order to scare him enough to secure payment. 1 In a second conversation, Folco told Cedroni that one of his debt collectors had cracked [a debtor] on the mouth on Folco's behalf and said `You better have the money by six o'clock or else.' In a third conversation, George Melillo (another Folco associate) indicated to Folco that the next time he encountered a certain debtor, Melillo would smash him in the mouth ... [k]nock him out cold. Folco suggested that the debtor be warned that if payment was not made within a week, he and his father would get a beating. The surveillance tapes contained several other accounts of Folco's extortionate techniques.
14 On April 22, 1995, Folco agreed to loan Regine $25,000 at an interest rate of two percent per week. Regine needed this money to pay off other loan sharks who were charging him even higher rates of interest. 2 Folco told Regine that he would get the money from a third party, who turned out to be Perrotta, and Regine expressed his understanding that Folco would charge me a point, that is, one percent per week, on top of the interest the third party (Perrotta) would be charging Folco. 15 On April 24, Folco told Cedroni that he had said to the old man (Perrotta was 52 years old in 1995) that he might need ... 50,000 more. Folco reported that he had asked Perrotta who am I gonna go to if I need that kind of money?, and the old man had responded: Me! Come to me.... I'll give you anything you want. That same day, Perrotta telephoned Folco, and the following conversation ensued: 16 Perrotta: Hey, I got you a putter for ya. 17 Folco: Yeah. 18 Perrotta: Do you want me to bring it over tomorrow? 19 Folco: Yeah. 20 They agreed that Perrotta would deliver the putter at 8:30 the next morning. Also on April 24, Folco told Regine [o]ne guy is gonna give me 25 G's tomorrow morning. Folco also indicated that he could get Regine an additional $25,000 in the near future. 21 At 8:19 a.m. on April 25, Folco told Regine (by telephone) that guy's coming at eight thirty.... He's gonna bring me that — package. Perrotta arrived at Folco's home at 8:33, without a golf putter. Perrotta asked Folco, You want to count it? Folco replied, No, no, I'll let him [presumably Regine] count it.... There is 25 there? 3 Perrotta indicated that there was. Folco explained his understanding of the terms of the loan: that'll be 250 [one percent of $25,000] I'll give you every Tuesday. Perrotta indicated his assent. 22 Three minutes after Perrotta departed, Regine arrived at Folco's residence. He thanked Folco and explained that he would take it [the $25,000] to ... Joe, another loan shark to whom Regine was indebted at an even higher rate of interest. In an apparent reference to the second $25,000 loan which Folco and Regine had discussed, Folco said: I talked to a guy, gonna get back to me. Gave me the bullshit, Jesus, ahh ... I want a point and a half [one and a half percent], he give me that shit. Folco told Regine that he had rejected this proposal, but that he expected to hear from the guy before the end of the week. 23 Indeed, Perrotta phoned Folco two days later about a second putter: 24 Perrotta: You didn't like that, you didn't like that ah that putter I got yah, I got you another one. 25 Folco: Alright. 26 Perrotta: You know and then you you whichever one you like ah you keep and ah the one you don't like you can give it to me back so I can give it to somebody else. 27 Folco: I'll be here. 28 Later that day, Perrotta showed up at Folco's residence, again without a golf putter. In what the jury could have found was a reference to the schedule for interest payments, Folco said to Perrotta [e]very Wednesday, and there was evidence that Folco and Perrotta in fact met on subsequent Wednesdays. Folco also said I'll be like ten weeks, that's all, which the jury could have found was a statement of the term of the loan. 29 The following day Regine came to Folco's home. Folco reported that [t]he guy that brought me the money yesterday[] had supplied [a]ll twenties. The two men counted the money and determined that it indeed amounted to 25 thousand. Regine promised to pay Folco the other five [hundred] [two percent of $25,000] Tuesdays (earlier in the conversation he had reiterated his existing obligation to give Folco five on Tuesday for the original $25,000). In other words, Folco got his money on Tuesday and Perrotta got his on Wednesday. 30 Consistent with the evidence summarized above, a notebook found in Folco's residence contained entries that the jury could have found were a record of two loans of $25,000 each from Perrotta to Folco. FBI expert Jerome Simpson offered the opinion that these loans, at an interest rate of one percent per week — below the rate of all of the other loans in this [notebook], and ... below the rate of any other loan that I've ever seen for a loan shark to make, putting money out on the street — were probably loans from one loan shark to another. As Folco explained his financial arrangements to Regine, the guys I go see that lend money, I guarantee that money out. 31 This was not the first time Perrotta had advanced money to Folco, as evidenced by the following conversation between Folco and Eddie Lato, one of his business partners: 32 Lato: You know, what he [Perrotta] does sometimes ... you ask him for two [thousand] he freezes. He's got something about ... I don't know if he thinks you're gonna try and rob him.... 33 Folco: Today it wasn't that. Last time I asked him, Ya, anything you want? Took ten off him, remember. 4 34 In addition, Folco made reference in a recorded conversation to an earlier deal he had done (for a point) with the source of the $50,000 he was lending to Regine. 35
36 A search conducted on June 23, 1995, turned up $4,703 in cash on Perrotta's person, $4,800 in cash around Perrotta's house, two handguns and ammunition in a nightstand in a first-floor bedroom, a third handgun, brass knuckles, a fake bomb in Perrotta's garage, and a billy club in his car. The next day, Folco had the following conversation with Lato: 37 Lato: Um. Perrotta, they got. I'm afraid. 38 Folco: What they [unintelligible] on him? 39 Lato: Bombs, guns, everything. 40 Folco: He ain't worried about [unintelligible]. If he blows up. Hm. [Unintelligible] he's dead. 5 41 Lato then informed Folco that (presumably the police) [t]ook 10 off of Perrotta, consistent with the seizure the day before of $9503 from Perrotta. Lato reported that he had spoken to Perrotta after the raid, and that either he or Perrotta had said to the other: it's over for us. 6 Folco expressed concern that [s]omebody will rat. Lato agreed: And they gonna say that we, we, we bankrolled the whole fucking thing. 42
43 First, there was evidence tending to show that Perrotta had repeated dealings with Folco in relation to Folco's money-lending operation. The jury could have inferred from Folco's report to Cedroni that he had told the old man that he might need ... 50,000 more  (emphasis added) that Perrotta was an ongoing participant in Folco's loan sharking business. The same inference is supported by Folco's reference to a previous deal he had done with the source of the $50,000, and by the conversation in which Lato and Folco discussed what Perrotta sometimes does when asked for money. Based on this evidence, the jury could have concluded that Perrotta was more than an unwitting, peripheral participant in Folco's loan sharking business. That inference could have been reinforced for the jury by the concern Lato expressed to Folco, after the search of Perrotta's home, that they got Perrotta, I'm afraid ([b]ombs, guns, everything), and by the statement by Lato or Perrotta that it's all over for us. 44 Second, if the jury found that Perrotta knew that Folco was re-lending the $50,000 to a third person — as Folco's statement to Perrotta, I'll let him [presumably Regine] count it [the money Perrotta had just delivered], suggests — it could also have concluded that Perrotta must have realized that Folco and that person understood that violence or other criminal collection techniques might be used. This is because, for Folco to turn a profit, he would have had to charge interest in excess of the one percent per week he was paying Perrotta, which would make the obligation legally unenforceable in Rhode Island. See United States v. Oreto, 37 F.3d 739, 752-53 (1st Cir.1994) (fact that loan was grossly usurious was a factor indicating violence might be used to collect). The jury could have credited Simpson's testimony that, in his opinion, the loan from Perrotta to Folco at the relatively low rate of one percent per week was probably a loan from one loan shark to another, and that Folco's role in the transactions was, as he explained to Regine, to guarantee [Perrotta's] money out. If the jury believed that Perrotta himself was a loan shark, it could have reasoned that he must have realized that Folco was one too, and that Folco might use extortionate methods to collect the $50,000 he had borrowed from Perrotta and loaned to Regine. 45 In sum, while there was no direct evidence that Perrotta understood the extortionate nature of Folco's transactions with Regine, there is enough circumstantial evidence to support a jury finding that he must have realized how Folco would enforce, if necessary, Regine's repayment obligations.