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U.S. v. DiSalvo

filed: August 31, 1994.


Appeal from the United States District Court for the Eastern District of Pennsylvania. (D.C. Crim. No. 91-00569-02). (D.C. Crim. No. 91-00569-01).

Before: Mansmann, Lewis and Seitz, Circuit Judges.

Author: Mansmann


MANSMANN, Circuit Judge.

In this consolidated appeal of Anthony DiSalvo and Robert F. Simone, we examine the appellants' affiliation with the hierarchy of the Philadelphia La Cosa Nostra (LCN) to determine whether their proven participation in LCN activities is sufficient to sustain their convictions on various offenses.

Following a jury trial in the United States District Court for the Eastern District of Pennsylvania, both DiSalvo and Simone were convicted of conspiring to collect a debt by extortionate means and of the substantive offense of extortionate collection of an extension of credit. Simone was also convicted of conspiring to conduct the affairs of an enterprise through a pattern of racketeering activity in violation of the Racketeer Influenced and Corrupt Organization Act ("RICO"), a substantive RICO charge and conspiring to affect interstate commerce through extortion.

We are asked to address a number of issues spanning the range of criminal jurisprudence -- statute of limitations, sealing of the indictment, pre-trial publicity, the type, weight, reliability, and probative worth of evidence, after-discovered evidence, jury instructions, the effect of extra-record information upon the jury and the court's post-trial voir dire of the jurors. While we discuss all of the issues, of most concern is the question of the sufficiency of the evidence of implied threats which supports the convictions of using extortionate means to collect a debt.

In order to review these allegations of error, we must first set forth the facts proven at trial in their appropriate context. We must view the facts in the light most favorable to the government since its view prevailed at trial.



A. Background

Members of the Scarfo family, and its nefarious affairs, are not strangers to our court.*fn1 This RICO enterprise was highly structured and governed by a distinct chain of command. At the top rung of the family ladder, the boss, Nicodemo Scarfo, oversaw the family activities. Directly below were the assistant managers -- the underboss (second-ranking member) and consigliere (advisor). On the next level were the capos (captains), each of whom commanded a cadre of criminal soldiers. The top leadership, capos and soldiers were "made men", that is, formally initiated members of the LCN. The "made" members were assisted by associates -- uninitiated colleagues answerable to their sponsoring LCN member. Associates were afforded a degree of protection from the sponsor they were "with," conditioned upon obtaining their superior's approval before conducting criminal ventures, giving an accounting and sharing resulting profits. Income was generated from illegal businesses such as gambling, loansharking, extortion and collection of a street tax (the "elbow") from non-LCN competitor criminals.

If family rules were violated, orders of the enterprise hierarchy disregarded or enterprise operations otherwise compromised, serious revenge was exacted. In fact, during the relevant time period, the Scarfo family committed numerous murders and attempted murders, numbering "made men," associates and outsiders as victims.

B. Simone and the LCN

Simone became acquainted with two members in the Scarfo organization, Nicholas Caramandi and Thomas DelGiorno, in the 1970's. Simone met Philip Leonetti in 1978 when Simone was retained to represent Leonetti on murder charges. Leonetti, Scarfo's nephew, was promoted to the underboss position in the Scarfo family in 1986. It was the testimony of Leonetti, now turned government witness, which provided the substance of the evidence against Simone and DiSalvo on the charges before us here.

Leonetti testified that shortly after Scarfo's ascension to leadership, Scarfo asked Simone to become a "made member" of the family. Although Simone declined, Scarfo told Simone that various bookmakers and loansharks to whom Simone was indebted would be instructed to forgive Simone's outstanding debts.

Leonetti chronicled other instances indicating Simone's closeness to the family. First, Simone never charged Leonetti and Scarfo fees for the extensive legal services he rendered for the family's inevitable run-ins with law enforcement authorities. Then, in May 1981, after Greek drug dealer Steve Bouras was murdered on Scarfo's orders, another dealer who was "with" Simone, George Botsaris, asked Simone to find out if Scarfo planned to kill him. When Simone relayed Botsaris' fears of being killed, Scarfo assured him that, as long as Botsaris took care of Simone, his life was not in jeopardy.

In 1987, while Scarfo and Leonetti were both in prison, Simone became concerned that his own life was in peril. Simone had represented George Martorano on drug charges. George pled guilty and received a sentence of life without parole. George's father, LCN member Raymond "Long John" Martorano, was displeased with Simone's representation of his son and Simone feared that Long John Martorano would seek retribution upon his release from prison. When Simone communicated his concerns to Scarfo, Scarfo allayed these fears by informing Simone that he had arranged to have Martorano killed if he was released.

Finally, recorded conversations between Simone and FBI cooperative, David Kurzband, an Atlantic City casino junket operator, established Simone's familiarity with both the members and the functioning of the Scarfo operation.

C. Simone and DiSalvo

Leonetti testified that he had known DiSalvo since the 1970's and that they socialized on occasion. Leonetti described DiSalvo as a loanshark who was "with" the Scarfo family and, specifically, "with" Simone.

When Scarfo became the family boss, Simone asked Scarfo not to extract money from DiSalvo's loanshark business, i.e., to exempt him from payment of the "elbow." This arrangement continued for a while, but Simone eventually told Scarfo and Leonetti that DiSalvo should begin to share the proceeds from his business; Scarfo told Simone to instruct DiSalvo that a portion of the monies collected by DiSalvo would be split equally among Scarfo, Simone and Chuckie Merlino, Leonetti's underboss predecessor.

D. The Pelullo Loan Transaction

Leonard, Arthur and Peter Pelullo are three brothers with ties to the Scarfo family. Arthur and Peter Pelullo were "with" the Scarfo family, thus, any dealings by or with them had to be cleared with Leonetti or Scarfo. At a December 1985 meeting among DiSalvo, Simone and Leonetti, DiSalvo informed Leonetti that he was having trouble contacting Leonard Pelullo regarding a $200,000 debt owed by Leonard to DiSalvo. DiSalvo offered Leonetti one-half of the proceeds collected if Leonetti would intercede and ask Pelullo to pay the debt.

Leonetti and Scarfo met with Leonard Pelullo at Scarfo's Florida residence. Leonetti outlined the meeting's agenda:

My uncle [Scarfo] was telling [Leonard] that Tony DiSalvo reached out for us and he needed help collecting this money, that he had to pay this $200,000. And Leonard Pelullo was telling him that he had a lot problems right now, . . . he was going to be indicted for robbing $14 million from banks down there in Florida and he was having a little problem getting the money. But my uncle told him it wasn't his problem, that he would have to come up with this money. So Leonard Pelullo told him, "Well, Nick, give me a couple of days and I'll get back to you."

App. at 717a-18a. Shortly thereafter, Leonard Pelullo, Leonetti and Scarfo met and agreed that the debt would be dissolved if Pelullo paid $120,000 to DiSalvo. When by February 1986, Leonard Pelullo had not paid the $120,000, Leonetti met with Arthur Pelullo and explained his brother's situation. Arthur offered to pay Leonard's debt by turning over one of his restaurants but Scarfo declined this counteroffer.

Leonetti then approached Peter Pelullo about his brother's debt. Peter personally guaranteed payment of the debt and in February or March of 1986, DiSalvo was paid $90,000. Because DiSalvo was to receive 50% of the $120,000, Scarfo directed DiSalvo to keep $60,000 as total satisfaction of the debt. The remaining $30,000 was given to Leonetti who turned over $10,000 to Simone.

Pelullo was not asked for the $30,000 balance until January, 1987 when Scarfo was arrested and needed to fund his legal defense. Leonetti approached Peter Pelullo for payment and it was agreed that Pelullo would pay $10,000 per month for the next three months. Pelullo did pay $10,000 in each of the next two months. When in April, 1987, Leonetti was arrested, Pelullo paid the third installment to Leonetti's cousin. Simone received his one-third split from each of the final payments.

E. The Rouse Extortion

After Rouse and Associates, a construction and real estate development entity, was chosen in May 1985 to construct a multi-million dollar project in the Penn's Landing area of Philadelphia, Leland Beloff, the City Councilman representing the Penn's Landing district, and his legislative aide, Robert Rego, sensed an opportunity ripe for extortion. Before construction could begin, two bills to facilitate funding for the program had to pass through the Philadelphia City Council. Beloff was responsible for introducing the legislation and shepherding it through the legislative process.

Beloff and Rego approached Nicholas Caramandi, a made member of the Scarfo family, to discuss the parameters of the scheme. Despite Beloff's status "with" Scarfo, it was his understanding that protocol demanded clearance with Simone.

Caramandi, Simone, Beloff, and Rego met a few weeks later. Simone conveyed Scarfo's approval of the plan and indicated that he was to receive a cut from the proceeds of the extortion.

On June 4, 1986, Rego set up a meeting with Peter Balitsaris, the Rouse employee charged with responsibility for the Penn's Landing project, and Caramandi, who presented a million dollar demand in exchange for Beloff's legislative "assistance." Immediately after the meeting, Balitsaris and Rouse contacted federal authorities and agreed to cooperate in an investigation of the extortion scheme.

On June 11, 1986, one day before the deadline for passage of the bills, Balitsaris met with Rego and, later, with Caramandi. Balitsaris recorded the conversations during which Caramandi repeated the extortion plan and demanded a $100,000 payment from Rouse as a good faith measure. Balitsaris then introduced Caramandi to FBI Agent James Vaules, posing as an employee of Rouse and Associates. Vaules produced $10,000, withholding the remaining $90,000 until the required legislation was passed. When Beloff placed the bills before Philadelphia City Council, Caramandi delivered $5,000 to Beloff's aide, Rego. Although Rego questioned the reduced amount, he accepted the money.

Caramandi reported to the family leadership the receipt of $10,000 and detailed the 50% split to Beloff and Rego. When Scarfo, Leonetti and Simone met, Scarfo reduced Beloff's and Rego's cut to 33% and ordered a 10% share for Simone. Simone was instructed to oversee Caramandi and Beloff to insure against unwanted intervention by law enforcement officials.

On June 17, 1986, Caramandi, Simone and others met to discuss a change in the split to Beloff and Rego. The conversations were recorded by John Pastorella, a government informant. Simone told Caramandi that Scarfo reduced Beloff and Rego's combined take to 33% of the extortion money. On June 21 or 22, 1986, Scarfo ordered Beloff's and Rego's shares further reduced, reiterated that Simone would receive 10%, and that the remainder would be split among the Scarfo family.

On June 23, 1986, Agent Vaules told Caramandi that Rouse wanted a signal that Beloff was a player in the scheme before he would make further payments. Vaules was to observe Beloff at City Hall "pledging allegiance to the flag." When Caramandi could not be present at the appointed place and time, the signal was aborted. After Vaules left City Hall, FBI agents observed Beloff and Rego meet with Simone near the Hershey Hotel.

Simone's legal advice was sought on utilizing the "flag pledging" signal. Simone approved the signal, indicating that it was not a problem since it was nonverbal and public.

The signal was eventually given, but Vaules did not produce the payoff money. At a meeting at DiLullo's bar in Philadelphia, Caramandi related to Beloff, Rego and Simone his suspicions that Vaules might be a law enforcement agent. Simone, in turn, became concerned that agents had gathered outside their meeting place and immediately left the bar. When an FBI agent entered the bar, he observed only Rego, Beloff and Caramandi.

Despite his misgivings, Caramandi did not cancel his next meeting with Vaules. The evening before the scheduled meeting, DelGiorno told Caramandi not to meet with Vaules. The next morning, Caramandi told Simone that he would not meet with Vaules and that the legislation would be killed. Beloff put the bills on hold.

The following day, Caramandi, Beloff and Rego were arrested. Simone expressed his distress to DelGiorno over Rego's arrest, fearing he would be implicated. DelGiorno cautioned Simone to receive permission from Scarfo before any damage control action be taken. When Scarfo and Leonetti met with Simone, Scarfo was angry about the arrest, blaming Simone for the indiscreet use of the signal. Nonetheless, the charges were eventually dismissed and Scarfo praised Simone for telling Caramandi not to pick up the money from Vaules. Simone, apparently believing the accolades were justified, replied, "I saved you a case."

F. Indictment and Trial

In October, 1991, Simone was indicted in the U.S. District Court for the Eastern District of Pennsylvania and charged in a six-count indictment with: (1) conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(d); (2) conducting or participating in a RICO organization, 18 U.S.C. § 1963(c); (3) conspiracy to interfere with commerce by extortion, 18 U.S.C. § 1951; (4) attempted interference with commerce by extortion; (5) conspiracy to collect extensions of credit by extortionate means, 18 U.S.C. §§ 894, 892; and (6) collection of extension of credit by extortionate means, 18 U.S.C. § 894, 892. The RICO counts, six predicate racketeering acts, and two collections of unlawful debts arise from Simone's involvement with the Scarfo enterprise. The extortionate collection of credit claims deal exclusively with the Pelullo loan. Finally, the Rouse extortion provides the backdrop for the interference with commerce counts.

DiSalvo was also indicted and charged with four of these counts: the conspiracy and substantive RICO counts and the conspiracy and substantive counts concerning the collection of the Pelullo loan.

The RICO counts incorporate counts three and four in the indictment as predicate racketeering act one; counts five and six of the indictment substantiate predicate racketeering act two.*fn2

On December 16, 1992, the jury found DiSalvo guilty only on the counts relating to the Pelullo loan. Simone was convicted on the RICO counts, the Rouse extortion conspiracy count and both counts concerning the Pelullo loan transaction. Simone was acquitted on the substantive Rouse extortion count and racketeering acts three, six and seven. DiSalvo was sentenced to imprisonment for one year and one day followed by three years probation. Simone was sentenced to a four-year prison term of incarceration and a four-year period of probation.

Both DiSalvo and Simone filed timely notices of appeal from their judgments of sentence. Our jurisdiction is pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a). The appellants ...

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