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United States v. Local 560 of International Brotherhood of Teamsters

December 26, 1985

UNITED STATES OF AMERICA
v.
LOCAL 560 OF THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN, AND HELPERS OF AMERICA, SALVATORE PROVENZANO, PRESIDENT, JOSEPH SHERIDAN, VICE-PRESIDENT, JOSEPHINE PROVENZANO SEPTEMBRE, SEC-TREASURER, J. W. DILDINE, RECORDING SECRETARY, THOMAS REYNOLDS, SR., TRUSTEE, STANLEY JARONKO, TRUSTEE, TRUCKING EMPLOYEES OF NORTH JERSEY WELFARE FUND, INC. SALVATORE PROVENZANO, EMPLOYEE TRUSTEE, THOMAS REYNOLDS, SR., EMPLOYEE TRUSTEE LOCAL 560 OFFICERS AND EMPLOYEES SEVERANCE PAY PLAN, SALVATORE PROVENZANO, TRUSTEE AND ADMINISTRATOR, JOSEPHINE P. SEPTEMBRE, TRUSTEE AND ADMINISTRATOR ANTHONY PROVENZANO, INDIVIDUALLY, NUNZIO PROVENZANO, INDIVIDUALLY, STEPHEN ANDRETTA, INDIVIDUALLY, THOMAS ANDRETTA, INDIVIDUALLY, GABRIEL BRIGUGLIO, INDIVIDUALLY, SALVATORE PROVENZANO, JOSEPH SHERIDAN, JAY DILDINE, JOSEPHINE PROVENZANO, THOMAS REYNOLDS, MICHAEL SCIARRA AND STANLEY JARONKO, APPELLANTS LOCAL 560 OF THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN, AND HELPERS OF AMERICA, SALVATORE PROVENZANO, PRESIDENT JOSEPH SHERIDAN, VICE-PRESIDENT JOSEPHINE PROVENZANO SEPTEMBRE, SEC-TREASURER, J.W. DILDINE, RECORDING SECRETARY, THOMAS REYNOLDS, SR., TRUSTEE, STANLEY JARONKO, TRUSTEE, TRUCKING EMPLOYEES OF NORTH JERSEY WELFARE FUND, INC. SALVATORE PROVENZANO, EMPLOYEE TRUSTEE, THOMAS REYNOLDS, SR., EMPLOYEE TRUSTEE, LOCAL 560 OFFICERS AND EMPLOYEES SEVERANCE PAY PLAN, SALVATORE PROVENZANO, TRUSTEE AND ADMINISTRATOR, JOSEPHINE P. SEPTEMBRE, TRUSTEE AND ADMINISTRATOR, ANTHONY PROVENZANO, INDIVIDUALLY, NUNZIO PROVENZANO, INDIVIDUALLY, STEPHEN ANDRETTA, INDIVIDUALLY, THOMAS ANDRETTA, INDIVIDUALLY, GABRIEL BRIGUGLIO, INDIVIDUALLY, LOCAL UNION NO. 560, APPELLANTS



On Appeal from the District Court for the District of New Jersey, D.C. Civil No. 82-0689

Author: Garth

BEFORE: GARTH and BECKER, Circuit Judges, and ROSENN, Senior Circuit Judge

Opinion OF THE COURT

GARTH, CIRCUIT JUDGE:

This appeal culminates a lengthy and complex civil action brought pursuant to the Racketeer Influenced and Corrupt Organizations ("RICO") Act, 18 U.S.C. §§ 1961, et seq., by the United States against several defendants who allegedly acquired an interest in, and effectively dominated, Local 560 of the International Brotherhood of Teamsters ("Local 560"). The district court, concluding that Local 560 was a "captive labor organization," enjoined certain defendants from any future contacts with Local 560, and removed the current members of the Local 560 Executive Board, replacing the Executive Board with a temporary trusteeship until free elections could be held. The district court's opinion appears at 581 F. Supp. 279 (D.N.J. 1984). The district court stayed its injunction pending appeal to this Court. We not affirm.

I.

On March 9, 1982, the government filed its civil complaint naming as defendants twelve individuals, Local 560, and Local 560's Welfare Fund and Severance Pay Plan. The government alleged that five of the named defendants: Anthony Provenzano, Nunzio Provenzano, Steven Andretta, Thomas Andretta and Gabriel Briguglio, were members of an ongoing criminal confederation - the Provenzano Group*fn1 - which, through acts of exortion and murder, effectively acquired an interest in, and control of, Local 560, an enterprise within the meaning of RICO, in violation of 18 U.S.C. § 1962(b).*fn2 The government also charged these defendants, as the Provenzano Group, with unlawfully participating, directly and indirectly, in the conduct of Local 560's affairs through a pattern of racketeering activity in violation of 18 U.S.C. § 1962(c)*fn3 and with conspiring to violate the above two provisions of RICO (§§ 1962(b) and (c)) in contravention of 18 U.S.C. § 1962(d).*fn4

Finally, the government charged the remaining seven individual defendants: Salvatore Provenzano, Joseph Sheridan, Josephine Provenzano, J.W. Dildine, Thomas Reynolds, Michael Sciarra, and Stanley Jaronko, who, at the time the suit was brought, constituted the Executive Board of Local 560, with aiding and abetting the Provenzano Group in violating 18 U.S.C. § 1962(b) and (d).*fn5

As stated above, the government avers that the Provenzano Group, aided and abetted by past and present members of the Executive Board of Local 560, violated 18 U.S.C. § 1962(b) by acquiring an interest in and control of Local 560 through a pattern of racketeering activity. The Provenzano Group's racketeering activity, the government argues, consisted of various acts of murder and extortion, the extortion element consisting of:

the wrongful use of actual and threatened force, violence and fear of physical and economic injury in order to create within Local 560 a climate of intimidation which induced the members thereof to consent to the surrender of certain valuable property in the form of their union rights as guaranteed by the provisions of Sections 157 and 411 of Title 29 of the United States Code [the Taft-Hartley Act, 29 U.S.C. § 157 and the Labor Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. § 411].

App. at 174A. Specifically, paragraph 12(a) of the Complaint alleged that The Provenzano Group extorted the membership's rights to vote, speak, and assemble freely by systematic acts of intimidation, including, as the district court summarized:

(1) the June 1961 murder of Anthony Castellitto; (2) the August 1961 appointment of Salvatore Provenzano to the position of Trustee formerly occupied by Castellitto; (3) the September 1961 appointment of Salvatore Briguglio -- the alleged murderer of Castellitto -- to the position of Business Agent; (4) the February 1963 appointment of Nunzio Provenzano to the position of Business Agent following his January 1963 conviction for exortion; (5) the May 1963 murder of Walter Glockner; (6) the 1964 appointment of Robert A. Luizzi to the position of Business Agent in spite of a record of criminal convictions; (7) the May 1967 appointment of Luizzi to the position of Trustee; (8) the February 1969 appointment of Salvatore Briguglio to position of Business Agent following completion of a term of imprisonment for extortion; (10) the 1970 appointment of Nunzio Provenzano to the position of Business Agent; (11) the 1971 appointment of Thomas Reynolds, Sr. to the position of Business Agent in spite of a record of criminal activity; (12) the 1972 appointment of Nunzio Provenzano to the position of Fund Trustee; (13) the 1972 appointment of Salvatore Briguglio to the position of Fund Trustee; (14) the allowance of frequent visitations by Armand Faugno and Thomas Andretta to the offices of Local 560; (15) the January 1963 appointment of Nunzio Provenzano to the position of Secretary-Treasurer; (16) the 1973 appointment of Reynolds to the position of Fund Trustee; (17) the 1974 resumption of duties as Business Agent by Salvatore Briguglio following completion of a term of imprisonment for counterfeiting; (18) the 1974 appointment of Luizzi to the position of Fund Trustee; (19) the November 1975 appointments of Anthony and Nunzio Provenzano to the positions of Secretary-Treasurer and President, respectively, in spite of a record of convictions for extortion; (20) the February 1977 appointment of Reynolds to the position of Trustee; (21) the July 1978 appointment of Josephine Provenzano to the position of Secretary-Treasurer following Anthony Provenzano's conviction for the Castellitto murder; (22) the July 1981 appointment of Salvatore Provenzano to the position of President following Nunzio Provenzano's forced resignation as a condition of bail of a labor racketeering conviction; (23) the Executive Board's failure to recover monies wrongfully converted by Anthony Provenzano; (24) the retention of Marvin Zalk as Fund Administrator in spite of payments accepted by him from an insurance company representative during the 1950's; (25) the retention of Ralph Torraco as the Fund's independent certified public accountant in spite of his federal indictment for systematically overbilling the Fund; (26) the extortion of contributions to the defense funds of the Provenzanos and Michael Sciarra from union members; (27) the 1981 appointment of Luizzi to the position of Business Agent; and (28) associations by some of the defendants with Frank "Funzi" Tieri and Matteo Alfredo Ianniello, reputed to be organized crime members.

App. at 10-12.

In addition to committing acts of murder and extortion and the purpose of dominating Local 560, the individual members of the Provenzano Group, according to the government's complaint, allegedly committed several other illegal acts in its participation in the conduct of the affairs of the Local 560 enterprise in violation of 18 U.S.C. § 1962(c). The predicate illegal acts which comprised the Provenzano Group's "pattern of racketeering activity" under § 1962(c) as alleged in the government's Complaint were summarized by the district court as follows:

(1) the extortion of $17,000 from Walter Dorn and his company (Dorn Transport, Inc. of Rensselaer, New York), in return for "labor peace"; (2) the wrongful conversion by defendant Anthony Provenzano, aided and abetted by successive defendant members of the Local 560 Executive Board of approximately $223,785 in Local 560 funds "by means of false and fraudulent pretenses, representations, and promises, and pursuant to a scheme and artifice to defraud. . .;" (3) the wrongful receipt by Provenzano Group members of payments, loans and other things of value from certain employers (Interocean Services, Inc. and Di-Jub Leasing, Inc.) in exchange for "labor peace"; (4) the unlawful receipt by defendant Anthony Provenzano, aided and abetted by Salvatore Briguglio, of certain fees, kickbacks, gifts or things of value in the form of certain Florida real estate because of, and with intent to be influenced with respect to, his actions and decisions relating to the Benefit Fund; and (5) the wrongful receipt by defendant Nunzio Provenzano, together with Irving Cotler and others, as associates of the Provenzano Group, of "labor peace" payments by certain employers, specifically Pacific Intermountain Express Company, Mason and Dixon Lines, Inc., T.I.M.E. - DC, Inc. and Helms Express.

App. at 13.

In its demand for relief, the government sought only injunctive and equitable remedies. The government asked that the district court (1) enjoin Anthony Provenzano, Nunzio Provenzano, Stephen Andretta, Thomas Andretta, and Gabriel Briguglio (the members of the Provenzano Group) from having any dealings, directly or indirectly, with any officer or employee of the Local 560 enterprise or any other labor organization or employee benefit plan; (2) enjoin Salvatore Provenzano, Joseph Sheridan, Josephine Provenzano, J.W. Dildine, Thomas Reynolds, Sr., Michael Sciarra, and Stanley Jaronko (the members of the Executive Board) from acting in any official capacity for or on behalf of Local 560 or its funds; (3) appoint one or more trustees to discharge all duties and responsibilities of the Executive Board of Local 560 until such time as free elections can be held; and (4) after the membership participation in a free election, permanently enjoin all individual defendants from having any future dealings of any nature whatsoever, directly or indirectly, with any officer, agent, representative, or employee of Local 560 or any other labor organization.

Before trial, the government entered into consent orders with defendants Anthony Provenzano, Nunzio Provenzano, and Thomas Andretta. The consent orders bar these three defendants from, among other things, (1) associating with any enterprise (within the meaning of 18 U.S.C. § 1961) which seeks to dominate control, or otherwise influence the affairs of any labor organization or any employee benefit plan and (2) acting as an officer, organizer, administrator, or representative for any labor organization or any employee benefit plan. In exchange, the government agreed to "not pursue any further civil claims against the defendant[s] based upon the transactions which are specifically enumerated in the Verified Complaint . . . ." App. at 164A. Accordingly, pursuant to these consent orders, Anthony Provenzano, Nunzio Provenzano, and Thomas Andretta were removed as defendants prior to trial.

On November 1, 1982, prior to trial, the district court denied Local 560's 12(b)(6) motion to dismiss paragraph 12(a) of the government's complaint for failure to state a cause of action. United States v. Local 560, 550 F. Supp. 511 (D.N.J. 1982). Paragraph 12(a), as previously noted, charged the Provenzano Group and the Executive Board with extorting members' rights to vote, speak, and assemble. The district court held that the extortion of intangible rights guaranteed to union members by the LMRDA's Bill of Rights, 29 U.S.C. § 1951, and thus, would properly serve as a predicate act under RICO. The district court also rejected Local 560's argument that the LMRDA remedies are the exclusive remedies available in combatting the extortion of member's rights under that statute.

On January 25, 1983, the bench trial of this cause commenced. The trial lasted until May 17, 1983, comprising 51 days of testimony. On March 16, 1984, the district court entered its final order granting the government's requested injunctive relief in all respects. At the same time, the district court withheld the appointment of a trustee because it stayed its order pending appeal. See Fed. R. Civ. P. 62. All of the defendants except alleged Provenzano Group members Stephen Andretta and Gabriel Briguglio filed timely notices of appeal.

II.

The district court's analysis of the defendants' RICO Act violations in the instant case differed from the analysis on which the government's Complaint was based. The government's complaint referred to Local 560 as the "enterprise" for both its section 1962(b) and (c) counts. Thus, the government alleged in its complaint that the individual associates of the Provenzano Group violated 18 U.S.C. § 1962(c) by participating in the conduct of the affairs of the Local 560 enterprise through a pattern of racketeering activity. Although the district court made findings consonant with this theory, it also held that the individual members of the Provenzano Group violated 18 U.S.C. § 1962(c) by unlawfully participating in the conduct of the affairs of the Provenzano Group (not Local 560), which the district court held was the "enterprise" for purposes of 18 U.S.C. § 1962(c).

In addition, although the government initially alleged separate and distinct predicate criminal offense under sections 1962(b) and 1962(c), the district court held that there were several predicate offenses committed by the Provenzano Group members which served as the underlying predicate acts for both the section 1962(b) and section 1962(c) counts. Specifically, the district court, while attributing other predicate acts to either 1962(b) or 1962(c), see, e.g., n.6, infra, held that following crimes, among others, constituted predicate acts under both of the above subsections of the RICO Act:

(1) Dorn: Between approximately January 1, 1952 and June 1, 1959, Anthony Provenzano (leader of the Provenzano Group), while an official of Local 560, extorted payoffs from Walter Dorn and his company, Dorn Transport, Inc., in exchange for "labor peace." Anthony Provenzano was subsequently convicted on one count of Hobbs Act extortion under 18 U.S.C. § 1957 for his part in the Dorn labor peace payoffs. App. at 24, 69.

(2) Castellitto: In 1961, Anthony Provenzano recruited Harold Konigsberg and Salvatore Briguglio to kill Anthony Castellitto, who was a popular member of Local 560 and who posed a threat to Anthony Provenzano's control of the union. On June 6, 1961 Konigsberg, Briguglio, Salvatore Sinno, and others, committed the murder. Salvatore Briguglio was killed while under indictment for the Castellitto murder, and on June 21, 1978, Anthony Provenzano was sentenced to life imprisonment for his part in the murder of Castellitto, App. at 24-25, 30, 70-71.

(3) Braun: Between November 30, 1961 and December 12, 1961, Nunzio Provenzano and Salvatore Briguglio attempted to extort labor peace payments (the Braun Payoff Demand case) from the Braun Company in violation of New York Penal Law § 560 and § 1294 (Conspiracy and attempted grand larceny). Nuncio Provenzano and Salvatore Briguglio were convicted and incarcerated for approximately 2-1/2 years in New York. App. at 25-26, 29, 69.

(4) Seatrain: Between December of 1969 and June of 1977, Anthony Provenzano, Stephen Andretta, Thomas Andretta, and Gabriel Briguglio unlawfully received "labor peace" payoffs from Interocean Services, Inc. and Di-Jub Leasing Inc. (Seatrain Labor Peace Payoffs) in violation of 18 U.S.C. § 186(b). Anthony Provenzano and Thomas Andretta each received 20 years imprisonment for their part in the Seatrain payoffs, and Stephen Andretta and Gabriel Briguglio received 10 and 7 years imprisonment, respectively. App. at 22-23, 25, 28, 77.

(5) Romano: Between 1974 and 1977, Anthony Provenzano, aided and abetted by Salvatore Briguglio and Stephen Andretta, received kickbacks in connection with loans made by the union's Passaic and Bergen Funds to Thomas and Frank Romano in violation of 18 U.S.C. § 1954. App. at

(6) City-Man: Between January of 1971 and July of 1980, Nunzio Provenzano, Irving Cotler, and other individuals unlawfully received labor peace payoffs (the City-Man payoffs) from Pacific Intermountain Express Company, Mason and Dixon Lines, Inc. T.I.M.E. - DC, Inc., and Helms Express in violation of 28 U.S.C. § 186(b). On May 5, 1981, Nunzio Provenzano was convicted on RICO charges stemming from these City-Man labor peace payoffs and was sentenced to 10 years imprisonment. App. at 26, 82-83.

Although the district court concluded that the crimes recounted above constituted predicate acts for purposes of both sections 1962(b) and 1962(c), the district court also held that the Provenzano Group's extortion of the LMRDA rights of union members -- which was the only predicate act aided and abetted by the Local 560 Executive Board defendants -- was a predicate act only for purposes of section 1962(b).*fn6

The district court held that the extortion of the membership's democratic rights in violation of the Hobbs Act, 18 U.S.C. § 1951, was accomplished by fostering a general climate of intimidation within Local 560. The district court stated that the failure to develop any political opposition to the leadership of Local 560 during the past 20 years demonstrated this climate of intimidation. The district court identified several discrete actions taken by the Provenzano Group and the Executive Board of Local 560 which helped nurture this climate of intimidation, and which resulted in numerous instances of extortion.

The actions taken by the Provenzano Group and the Executive Board, as found by the district court, included (1) the repeated appointments of convicted criminals and persons reputed to be involved in criminal activity to positions of trust and responsibility within Local 560; (2) the expenditure of Local 560 assets in the form of increased salary and pension benefits to Anthony Provenzano, who has committed three criminal offenses while a member of Local 560's Executive Board; (3) permitting the presence of convicted criminals and reputed criminals in the officials of Local 560; and (4) the failure of the Executive Board to counter perceptions on the part of Local 560's membership that it was unwise for the members to voice dissatisfaction with Executive Board policy.

III.

We address first the issue which concerns both the Provenzano Group defendants and the Executive Board defendants: namely, whether the district court properly found a violation of section 1962(b) of the RICO Act. The district court held that the Provenzano Group members, aided and abetted by the Executive Board, acquired an interest in and control of Local 560 through a pattern of racketeering activity. See 18 U.S.C. § 1962(b) n.2 supra.

Central to the district court's section 1962(b) analysis is its finding that the Provenzano Group and the Executive Board extorted the membership's LMRDA rights to democratic participation in their union's affairs. LMRDA rights apply to every member of a labor organization. These rights include the right to nominate Union leaders; to vote in union elections; to meet and assemble freely with other members; and to express any views, arguments, or opinions at union meetings. 29 U.S.C. § 41(a)(1) & (2) provides:

(a)(1) Equal rights. -- Every member of a labor organization shall have equal rights and privileges within such organization to nominate candidates, to vote in elections or referendums of the labor organization, to attend membership meetings, and to participate in the deliberations and voting upon the business of such meetings, and to participate in the deliberations and voting upon the business of such meetings, subject to reasonable rules and regulations in such organization's constitution and bylaws.

(2) Freedom of speech and assembly. -- Every member of any labor organizations shall have the right to meet and assemble freely with other members; and to express any views, arguments, or opinions; and to express at meetings of the labor organization his views, upon candidates in an election of the labor organization or upon any business properly before the meeting, subject to the organization's established and reasonable rules, pertaining to the conduct of meetings: Provided, That nothing herein shall be construed to impair the right of a labor organization to adopt and enforce reasonable rules as to the responsibility of every member toward the organization as an institution and to his refraining from conduct that would interfere with its performance of its legal or contractual obligations.

Indeed, it is upon these predicate acts of extortion that the district court based its finding of liability.

A.

(1)

As a threshold matter, there are certain evidentiary questions which this court must resolve that bear upon the extortion of LMRDA rights. At trial, the government, in attempting to prove that the Provenzano Group and the Executive Board of Local 560 extorted the LMRDA rights of union members, submitted various proofs to establish that many union members were fearful of exercising their statutory right to participate in the affairs of Local 560. As part of these proofs, the government sought to admit into evidence numerous newspaper and magazine articles,*fn7 spanning a twenty-year period, which reported the criminal activities of Provenzano Group members. The government argued that these articles were relevant and admissible, not to demonstrate the truth of the statements in the articles, but to demonstrate the perceived reputation of Provenzano Group members in the community.

The government further maintained that it was proper for the district court to infer that these articles were read by Local 560's membership and that the reputation of the Provenzano Group members intimidated the membership into surrendering their LMRDA rights. The district court, adopting the government's position, admitted the newspaper and magazine articles into evidence,*fn8 holding that "it may be a fair inference that the members kept abreast of certain events and that having read these articles they feared violence or economic retaliation if they exercised their LMRDA rights." App. at 1400.

The defendants argue that the district court improperly admitted these newspaper accounts into evidence for reputational purposes. Specifically, the defendants maintain that the government did not establish a sufficient foundation to allow in this evidence: namely, that the government did not introduce evidence, along with these articles, to indicate that members of Local 560 actually read the articles in question, and as a result of reading the articles, had developed a fear of the leadership of Local 560.

The district court, in admitting the evidence, relied principally on Webb, the plaintiffs brought a products liability tort suit for injuries sustained from using a facial hormone cream sold to the plaintiffs by the defendant. At trial, the plaintiffs sought to introduce articles discussing the dangers of certain hormones. The trial court disallowed the evidence. This Court reversed, holding that, since the defendant had a duty to warn of the dangers of the face cream if it knew or should have known that the product could be injurious, the articles were admissible for the purpose of proving whether the defendant should have alerted the plaintiffs to possible hazards. Although, in Webb, this court did not discuss the foundation necessary for the introduction of the articles, presumably, the plaintiffs there demonstrated that the articles were in a publication that the defendant, at the very least, should have been reading.*fn9

In the instant case, unlike in Webb, in order for the articles to be admitted into evidence it must have been demonstrated, not that the members of Local 560 should have read the articles in question, but that members of Local 560 actually read these articles. The government at trial, however, did not develop this necessary foundation. Indeed, only one Local 560 member testified that he had ever read anything in the papers about the Provenzano Group and Local 560. August Muller, a Local 560 member who had been assaulted by Executive Board member Stanley Jaronko, stated that "[i]n the papers it said that there was an argument involved the prior night, and the man [Glockner] was dead the next morning. . . .I don't want anything to happen to me. . . ." App. at 7668. We hold that this isolated reference to a single newspaper article afforded an insufficient foundation for the admission into evidence of several articles covering a period of twenty years.

(2)

Another evidentiary question involving the extortion of membership rights concerned the testimony of Raymond Wren. Wren, a Special Agent of the Department of Labor, testified at trial as to the reputation for violence and economic retribution of several former and current members of the Executive Board of Local 560. Wren based his testimony on interviews he had with 15 former and current members of Local 560. The defendant argue that the district court abused its discretion in admitting Wren's testimony because Wren did not base his testimony on a random sample of the Local 560 members, but rather interviewed only members whom he knew to be opponents of the Provenzano Group and the current ...


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