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UNITED STATES v. LORE

April 20, 1998

UNITED STATES OF AMERICA
v.
JOSEPH LORE, GIACOMO GUAGLIARDO, KENNETH BRITT



The opinion of the court was delivered by: RODRIGUEZ

OPINION

 RODRIGUEZ, District Judge

 This matter is before the court on the motions of defendants Joseph Lore, Giacomo Guagliardo and Kenneth Britt for judgment of acquittal pursuant to Rule 29 of the Federal Rules of Criminal Procedure. After considering the submissions of the parties, and for the reasons set forth below, the Court grants the motions as to Counts V and VI, and grants the motions as to Count VII in part.

 BACKGROUND

 This case arises out of the illegal activities of Giacomo "Jake" Guagliardo, Joseph Lore, and Kenneth Britt, all of whom played different parts in a loansharking ring from the late 1980's through the early 1990's. Guagliardo was the lending agent, conducting business at Grace's Luncheonette in Bayonne, New Jersey. Lore's role in the organization was its financial backer, and the person from whom Guagliardo sought approval for the loans he brokered. Britt served as Guagliardo and Lore's collection agent.

 The activities charged in the Indictment began in August, 1987 when John Antos, a construction worker, received a $ 3,500 loan from Guagliardo at Grace's Luncheonette. Antos planned to use the money to support a tree-trimming business that he owned and operated. For this loan, he was required to make weekly interest payments ("vigorish" or "vig") equivalent to 3% of the principal loan. Antos met these interest payments, paid off the principal within a year, and then took out a second loan from Guagliardo in October of 1988 in the amount of $ 5,500. After several months, however, Antos became delinquent in his interest payments causing Guagliardo and Lore to make several unannounced Sunday morning visits to his home to demand payment. While he tried to meet his obligations, he kept falling short. As a result, the truck that Antos purchased with the proceeds of the loan was set afire in April of 1990, and he was physically beaten by three or four unidentified men on May 11, 1990. *fn1" At this point, Antos contacted law enforcement authorities. Undercover detective Dennis Vecchiarelli stepped in to assume Antos' payments and to investigate defendants' criminal activity.

 Through Antos, Vecchiarelli (posing as a part-time carpenter named Dennis Vallardi) began to forge a relationship with Guagliardo at Grace's Luncheonette. Vecchiarelli's many conversations with Guagliardo were electronically recorded. After fully repaying Antos' outstanding loan and its vigorish, Vecciarelli received his own loan from Guagliardo in the amount of $ 2,000. He was given the money by defendant Britt, *fn2" who explained the weekly repayment terms of the loan interest, suggesting that "problems" might arise if Vecchiarelli were to become delinquent. *fn3" Vecchiarelli repaid the entire principal after a few months of timely interest payments. The investigation began to reveal that defendant Lore was the financial backer of these loans, and Guagliardo's superior. On March 28, 1991, Vecchiarelli asked for another loan, this time for the amount of $ 6,000. Guagliardo gave him the money on April 11, 1991. Vecchiarelli repaid this loan by May 23, 1991. A month later, on June 27, 1991, Vecchiarelli asked Guagliardo for a third loan of $ 4,000. Since Guagliardo was going to be out of town, he referred Vecchiarelli to a third party who provided him with the money. *fn4"

 On July 8, 1991, Vecchiarelli asked Guagliardo for another loan of $ 3,000, and also asked to renegotiate a lower vigorish than the 3% he had been paying. Guagliardo agreed to offer Vecchiarelli an interest rate of 2 1/2% for both the $ 4,000 and $ 3,000 outstanding loans. The loans were repaid by September 3, 1991. The payments were made regularly and without incident. Later that month, Vecchiarelli asked Guagliardo for a much larger loan of $ 20,000. Guagliardo considered Vecchiarelli a "good payer" and attempted to secure the loan from Lore. The loan was never extended because Vecchiarelli sensed that Lore was beginning to get suspicious of him, and suspended the investigation.

 A criminal indictment was returned in June of 1996, charging the defendants with loansharking activity from 1987 through 1991. Specifically, the indictment contained counts for conspiracy to make extortionate extensions of credit in violation of 18 U.S.C. § 892 (Count I: Antos' two loans and Vecchiarelli's four loans); conspiracy to collect extensions of credit by extortionate means in violation of 18 U.S.C. § 894 (Count II: Antos' two loans and Vecchiarelli's four loans); making an extortionate extension of credit in violation of 18 U.S.C. § 892 (Count III: Vecchiarelli's third loan of $ 3,000; and Count IV: Vecchiarelli's fourth loan of $ 4,000); and collecting an extension of credit by extortionate means in violation 18 U.S.C. § 894 (Count V: Vecchiarelli's third loan of $ 4,000; Count VI: Vecchiarelli's fourth loan of $ 3,000; and Count VII: Antos' second loan of $ 5,500). A jury trial began on May 19, 1997. At the close of the government's case and again after the defense rested, all defendants moved for a judgment of acquittal pursuant to Fed. R. Crim. P. 29, alleging insufficiency of the evidence. The Court reserved ruling on these motions. On June 18, 1997, the jury returned verdicts of guilty against defendants Lore, Guagliardo and Britt on all counts.

 DISCUSSION

 Defendants' Rule 29 motion is based on, among other things, the charges under 18 U.S.C. § 894 for the use of extortionate means in the collection of a loan (Counts V, VI, and VII). *fn5" Defendants maintain that the evidence produced at trial does not support the convictions under § 894 because the victim (undercover detective Vecchiarelli) voluntarily repaid the loans and defendants never made any affirmative extortionate acts to collect them. In response, the government argues that the initial threat given when the first loan was extended "carried over" to each payment. The government reasons that even though the single extortionate act was made during the initial extension of the loan and not during any attempted collection, § 894 is satisfied because each payment was made with the understanding that negative consequences could occur if the payments were not made. *fn6"

 A. Standard for Judgment of Acquittal

 Federal Rule of Criminal Procedure 29 states that:

 
The court on motion of a defendant or of its own motion shall order the entry of judgment of acquittal of one or more offenses charged in the indictment or information after the evidence on either side is closed if the evidence is ...

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