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UNITED STATES v. LOWELL

May 12, 1980

UNITED STATES OF AMERICA, Plaintiff,
v.
ARTHUR S. LOWELL and ANTHONY PIONZIO, Defendants.



The opinion of the court was delivered by: WHIPPLE

On November 29, 1979 defendant Arthur S. Lowell was convicted of conspiracy to defraud the United States in violation of 18 U.S.C. § 371. Codefendant Anthony Pionzio was convicted of conspiracy and of three counts of violating the Travel Act, 18 U.S.C. § 1952(a)(3). This matter is presently before the Court on motion of defendant Lowell for a judgment of acquittal, or in the alternative for a new trial. Defendant Pionzio joins in several portions of the motion as indicated infra.

Defendant Lowell was for some years a business advisor to firms doing business with the General Services Administration (GSA). He was charged as the prime mover in a conspiracy to bribe GSA employees in order to secure favorable treatment for a government contractor, Atlas Paint and Varnish Company (Atlas). Lowell left the employ of the company in 1971, yet the bribery payments continued until 1977. In 1977 Lowell allegedly made a phone call in which he told one Michael Foncellino, an employee of Atlas and an unindicted co-conspirator, to be careful because an investigation of codefendant Pionzio, a GSA employee, was underway. The investigation ended with the indictment of Lowell, Pionzio and Joseph Montalbano, another GSA employee alleged to have taken bribes. Montalbano pleaded guilty. Dennis Tepperman, president of Atlas and another unindicted co-conspirator, was granted immunity from prosecution to become the chief witness for the Government. Foncellino also testified for the Government.

 I. MOTION FOR A JUDGMENT OF ACQUITTAL

 At the conclusion of the Government's case the defendants moved for a judgment of acquittal pursuant to Fed.R.Crim.P. 29(a). They grounded their argument upon Judge Prettyman's general analysis in Curley v. United States, 81 U.S. App. D.C. 389, 160 F.2d 229, 232-33 (D.C.Cir.1947):

 After carefully applying this analysis to the Government's case, it was ruled that sufficient evidence had been presented upon which a reasonable minded juror could fairly conclude guilt beyond a reasonable doubt. Therefore, the motions were denied. After the defense presented its case, the jury returned guilty verdicts on all counts of the indictment. Defendants now renew their motion for a judgment of acquittal pursuant to Fed.R.Crim.P. 29(c).

 A. CREDIBILITY

 The first ground for the motion is the alleged incredibility of the Government's chief witness, Dennis Tepperman. As this Court has previously held, the final decision concerning the believability of Government witnesses rests with the jury. United States v. Gross, 375 F. Supp. 971, 973 (D.N.J.1974), aff'd, 511 F.2d 910 (3d Cir.), cert. denied, 423 U.S. 924, 96 S. Ct. 266, 46 L. Ed. 2d 249 (1975), citing United States v. Allard, 240 F.2d 840 (3d Cir. 1957). See also United States v. Morris, 308 F. Supp. 1348, 1351 (E.D.Pa.1970). However, since the trial court was also in a position to view and evaluate the witnesses, in post-trial motions it is appropriate for the Court to re-examine the transcripts and to decide whether the jury's evaluation of the evidence and the resulting guilty verdict constituted a miscarriage of justice. United States v. Gross, supra. The Court has conducted such a re-examination, bearing in mind that in a motion for a judgment of acquittal the evidence must be viewed in the light most favorable to the Government. United States v. Greenlee, 517 F.2d 899, 907 (3d Cir. 1975); United States v. Armocida, 515 F.2d 29, 46 (3d Cir.), cert. denied, 423 U.S. 858, 96 S. Ct. 111, 46 L. Ed. 2d 84 (1975); United States v. Snead, 447 F. Supp. 1321, 1326 (E.D.Pa.1978). The Court holds that, with respect to the testimony and veracity of Dennis Tepperman, the jury did not stray beyond its proper role as the finders of credibility and fact.

 B. THE STATUTE OF LIMITATIONS

 Defendant Lowell asserts a defense based upon the statute of limitations for conspiracy prosecutions. He asserts that he withdrew from the conspiracy more than five years before his indictment, and that his 1977 telephone call advising unindicted co-conspirator Foncellino that codefendant Pionzio was under investigation was by itself insufficient as a matter of law to constitute re-entry into the continuing conspiracy. Lowell's argument has two parts: (1) his split from Atlas Paint & Varnish late in 1971 constituted a withdrawal from the conspiracy as a matter of law, and therefore the jury could not validly have found him to have participated in the conspiracy at any time between 1971 and 1977; and (2) his 1977 telephone call could not as a matter of law have constituted entry or re-entry into the conspiracy. Defendant's brief treats these two issues and the facts which underlie them as if they should be considered separately. For reasons which shall become clear, I analyze the issues and their underlying facts as closely interrelated.

 A conspirator may withdraw from a continuing conspiracy and thereby avoid prosecution for acts committed by remaining members at a later date if he proves that he performed "(affirmative) acts inconsistent with the object of the conspiracy and communicated in a manner reasonably calculated to reach co-conspirators . . . ." United States v. United States Gypsum Co., 438 U.S. 422, 464, 98 S. Ct. 2864, 2887, 57 L. Ed. 2d 854 (1978); accord, Hyde v. United States, 225 U.S. 347, 369, 32 S. Ct. 793, 803, 56 L. Ed. 1114 (1912); United States v. Continental Group, Inc., 603 F.2d 444, 466-67 (3d Cir. 1979); United States v. Gillen, 599 F.2d 541, 548 (3d Cir.), cert. denied, 444 U.S. 866, 100 S. Ct. 137, 62 L. Ed. 2d 89 (1979); United States v. D'Andrea, 585 F.2d 1351, 1355 n.3 (7th Cir. 1978), cert. denied, 440 U.S. 983, 99 S. Ct. 1795, 60 L. Ed. 2d 244 (1979); United States v. Abraham, 541 F.2d 1234, 1237 & n.3 (7th Cir. 1976); United States v. Heckman, 479 F.2d 726, 729 (3d Cir. 1973); United States v. Nowak, 448 F.2d 134, 139 (7th Cir. 1971); United States v. Cantone, 426 F.2d 902, 905 (2d Cir. 1970); Glazerman v. United States, 421 F.2d 547, 551 (10th Cir. 1970); United States v. Goldberg, 401 F.2d 644, 649 (2d Cir. 1968), cert. denied, 393 U.S. 1099, 89 S. Ct. 895, 21 L. Ed. 2d 790 (1969); United States v. Schwenoha, 383 F.2d 395, 396-97 (2d Cir. 1967); United States v. Borelli, 336 F.2d 376, 388 (2d Cir. 1964), cert. denied, 379 U.S. 960, 85 S. Ct. 647, 13 L. Ed. 2d 555 (1965). The burden of proof as to withdrawal is on the defendant. See, e.g., Gillen, supra at 548. Mere cessation of activity is not sufficient to constitute permanent withdrawal as a matter of law. See, e.g., Continental Group, supra at 467. Specifically, the Second Circuit, in what remains the leading opinion on withdrawal, has held that a finding that one defendant terminated his association with his co-conspirators outside the period of limitations did not constitute withdrawal as a matter of law if the substantive activity which was the precise object of the conspiracy before his split with the others continued after his split. Borelli, supra at 389.

 In the instant case, although Lowell's termination of his association with Atlas presented a jury issue as to withdrawal, a judgment of acquittal is not required for two reasons. First, as in Borelli, the jury heard admissible testimony that the activities which were the object of the conspiracy as it existed prior to Lowell's termination namely, bribery of GSA officials continued after his departure, and therefore it could have concluded that his departure did not by itself amount to complete withdrawal. Second, and more importantly, in considering whether Lowell permanently withdrew, the jury was clearly entitled to consider all of the facts which were proved concerning that defendant, both before and after his departure from Atlas. Thus, the jury was entitled to consider the 1977 phone call as relevant to the question of whether Lowell had permanently withdrawn in 1971. The mere fact that Lowell departed in 1971 and that the Government did not offer proof of overt acts committed by him between 1971 and 1977 does not establish that his participation ended in 1971. See, e.g., Cantone, supra at 905. To the contrary, evidence of the 1977 phone call taken with evidence of Lowell's participation prior to 1971 would have allowed the jury to infer that Lowell's withdrawal was only temporary and not, as is required for acquittal, permanent. See Continental Group, supra at 467; D'Andrea, supra at 1355 n.3; Abraham, supra at 1237 n.3; Heckman, supra at 729-30; Nowak, supra at 139; cf. Goldberg, supra at 649 (evidence established that one defendant permanently abandoned conspiracy at a date outside period of limitations; no evidence of any contacts between him and other conspirators thereafter); Glazerman, supra at 551-52 (same).

 As should be clear from the foregoing, the Court regards evidence of Lowell's 1977 telephone call as relevant to and proper in considering whether Lowell withdrew in 1971. Accordingly, the Court declines to take defendant's approach to that call as it relates to the issue of membership in the conspiracy.

 Defendant analyzes the telephone call as if it were the sole peg upon which the Government can hang its claim that Lowell was a member of the conspiracy in 1977. Defendant's argument assumes that Lowell's split with Atlas in 1971 constituted a permanent, legally effective withdrawal from the conspiracy. Defendant then proceeds to argue that the 1977 phone call could not constitute an act of reentry into the conspiracy as it then existed. However, because this Court treats the two events the 1971 split and the 1977 phone call together, it is unnecessary to decide whether the latter event could, in a vacuum, constitute an act of entry into a conspiracy.

 Defendant's argument that the phone call is insufficient to make him a member of the conspiracy rests upon a case in which there was no proof that the defendant in question had any connection with the conspiracy prior to the date of the act which arguably constituted entry. See Roberts v. United States, 416 F.2d 1216, 1220-21 (5th Cir. 1969). In Roberts there was no evidence that defendant Bookout had any involvement with the conspiracy prior to her overhearing a plan to pass counterfeit money and her subsequent destruction of that contraband. However, in the instant case the jury heard testimony of substantial involvement by Lowell prior to the 1977 telephone call, namely in 1969-71. The crucial distinction, then, is that in Roberts the court was confronted with the question of whether an individual as to whom there was no proof of any prior involvement could be found to have entered a conspiracy solely on proof that she associated with the conspirators and warned and aided one of them; here, on the other hand, the question of whether the phone call, taken alone, could constitute entry into the conspiracy is a red herring, for, as noted above, it assumes that the call was the first act connecting the defendant to the unlawful scheme.

 The Court regards as equally inapposite to the issue of the 1977 phone call those cases which state that in order to be found a member of a conspiracy a defendant must in some sense promote the venture himself or have a stake in its outcome. See United States v. Di Re, 159 F.2d 818, 819-20 (2d Cir. 1947), aff'd, 332 U.S. 581, 68 S. Ct. 222, 92 L. Ed. 210 (1948); United States v. Falcone, 109 F.2d 579, 581 (2d Cir.), aff'd, 311 U.S. 205, 61 S. Ct. 204, 85 L. Ed. 128 (1940). Defendant's argument is that after 1971 Lowell no longer had a stake in the outcome of the conspiracy, and therefore the 1977 phone call cannot be regarded as an act in furtherance of the conspiracy. Once again, the crucial distinction between defendant's case and the cases of Falcone and Di Re is that the latter opinions addressed the question of what a complete stranger to a conspiracy must do, as a matter of law, to become a member. There is no suggestion in those cases that in order to convict the Government must show that a defendant continued to have a substantial, active interest in the outcome of the conspiracy throughout its life once it has been proved that at some earlier time the defendant had such an interest. As already noted, temporary cessation of activity related to the conspiracy does not constitute withdrawal.

 Having concluded that the 1971 split and the 1977 phone call presented a jury issue as to whether defendant Lowell withdrew from the conspiracy in 1971, there remains the question of whether the 1977 phone call could reasonably have been viewed by the jury as an act in furtherance of the conspiracy. The Court concludes that if the jury found on the basis of the 1977 call that the 1971 split was not an effective withdrawal, then the phone call ...


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