Opinion ID: 699206
Heading Depth: 2
Heading Rank: 2

Heading: The Extortionate Extension of Credit.

Text: 41 We review de novo a district court's finding that the evidence presented at trial was ultimately insufficient to support a jury's verdict. United States v. Hamilton, 978 F.2d 783, 785-86 (2d Cir.1992). In general, when reviewing a conviction for sufficiency of evidence, all available inferences and all issues of credibility are viewed in favor of the jury's verdict. United States v. Teitler, 802 F.2d 606, 614 (2d Cir.1986). A defendant who bases an appeal on insufficiency of the evidence bears a very heavy burden. United States v. Ragosta, 970 F.2d 1085, 1089 (2d Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 608, 121 L.Ed.2d 543 (1992). 42 The district court's judgment dismissing this claim rests upon the language of 18 U.S.C. Sec. 894: 43 (a) Whoever knowingly participates in any way, or conspires to do so, in the use of any extortionate means 44 (1) to collect or attempt to collect any extension of credit, or 45 (2) to punish any person for the nonrepayment thereof,shall be fined ... or imprisoned not more than 20 years, or both. 46 (Emphasis added.) The extension of credit is a defined term: 47 To extend credit means to make or renew any loan, or to enter into any agreement, tacit or express, whereby the repayment or satisfaction of any debt or claim, whether acknowledged or disputed, valid or invalid, and however arising, may or will be deferred. 48 18 U.S.C. Sec. 891(1). These provisions were directed primarily at persons engaged in loan-sharking and organized crime, see Perez v. United States, 402 U.S. 146, 147, 91 S.Ct. 1357, 1358, 28 L.Ed.2d 686 (1971), though they are not specifically limited to such situations. See United States v. Bufalino, 576 F.2d 446, 452 (2d Cir.), cert. denied, 439 U.S. 928, 99 S.Ct. 314, 58 L.Ed.2d 321 (1978). We have acknowledged that the statute is a broad one, reflect[ing] Congress's desire to craft a flexible set of tools for prosecutors to wield with 'vigor and imagination'.... United States v. Scotti, 47 F.3d 1237, 1244 (2d Cir.1995) (citing H.R.Conf.Rep. No. 1397, 90th Cong., 2d Sess. 31, reprinted in 1968 U.S.C.C.A.N. 2021, 2029). 49 There is no doubt that the government presented evidence that would have supported a finding that the defendant used extortionate means in an attempt to collect money from Capri. However, we agree with the district court that these extortionate means were not used to collect on any extension of credit that fits the definition prescribed in Sec. 891. Since the evidence cannot be viewed to show a loan between Wallace and Capri, the government argues that Wallace and Capri had (in the words of the statute) enter[ed] into [an] agreement, tacit or express, whereby the repayment or satisfaction of any debt or claim, whether acknowledged or disputed, valid or invalid, and however arising, [was] deferred. 18 U.S.C. Sec. 891. According to the government, such an extension of credit was made, because (in the words of the indictment) defendants and their co-conspirators would and did sell illegitimate checks to a cooperating witness ... on a credit basis. 50 However, there was no evidence of a sale on credit. The closest commercial analog to the check transaction is a consignment in which the obligation to pay is contingent and no title passes. There was no indication that Capri would pay Wallace for the checks if the scheme to defraud the bank had failed. The parties merely agreed to split the proceeds of a transaction if the transaction succeeded. 51 Although Wallace demanded payment of the money after the scheme appeared to succeed, we agree with the district court that none of the evidence presented at trial amounted to the formation of a credit agreement, because Wallace and his representatives never agree[d] to defer[ ] the collection of their money. After making their threats, they merely (and temporarily) left Capri intact. As Judge Knapp observed, forcing these facts to fit into the words of the statute would tend to convert[ ] every common law extortion into a federal loansharking offense ... 856 F.Supp. at 847. 4 52 The government relies on Bufalino, 576 F.2d 446, to support its reading of Secs. 894 and 891. In that case, a jeweler engaged Bufalino to collect by threats $25,000 due on the sale of some diamonds. Id. at 448. Defendants argued on appeal that, under Secs. 894 and 891, the jeweler had extended no credit to the purchaser, who had obtained the diamonds through deceit and never had any intention of paying for them. Id. at 452. We rejected this argument, emphasizing that Congress has taken an exceedingly broad view of what it is 'to extend credit' . Id. (emphasis added). The government now argues that, as in Bufalino, Wallace had a tacit agreement to extend credit to Capri. 53 Bufalino differs from this case precisely because credit was extended in Bufalino : 54 [A] singularly credulous New York jeweler named Herbert Jacobs entered into a number of transactions with one Jack Napoli wherein some $25,000 worth of diamonds were transferred to Napoli in exchange for a series of promises and a worthless check. Some of Napoli's success derived from repeated unauthorized invocations of the name of Russell Bufalino, who evidently constituted an impressive credit reference with Jacobs. 55 Bufalino, 576 F.2d at 448 (emphasis added). Part of the consideration accepted by Jacobs was a series of promises. Napoli's promises evidently included assurances of future payments, because Jacobs required some assurance of creditworthiness. Thus Napoli used Bufalino's reputation and prestige as a credit reference. On the strength of these assurances, Jacobs extended credit to Napoli long before the extortionate collection methods were employed. 56 We conclude that no act committed by Wallace constituted an agreement to extend credit. Wallace engaged in extortionate conduct, but Wallace never enter[ed] into an agreement to delay or forbear on any terms. As the district court found, the evidence established no more than that the defendant and his coconspirators by making wild threats and inflicting actual damage ... kept constant pressure--without a moment's respite--upon the cooperating witness. 856 F.Supp. at 849. Although Wallace several times tolerated a delay in payment, this impatient forbearance was no more than a reprieve on his extortionate threats to injure Capri, or turn him into condensed soup, unless immediate payment was made. We could not accept the government's position without deleting the extension of credit element of Sec. 894 and the agreement requirement of Sec. 891. We affirm the district court's decision to set aside the jury's verdict on counts three and four of the indictment.