606 NYS2d 942 | N.Y. Sup. Ct. | 1993
OPINION OF THE COURT
These defendants are the remainder of a group of 14 who were jointly indicted for enterprise corruption (Penal Law § 460.20 [1] [a]) and related crimes. Five of the original defendants, including a corporate defendant, pleaded guilty, and one of them, Robert Perrino, is a fugitive.
The indictment describes the criminal enterprise as the "Post Circulation Crew” (hereinafter identified as the Crew), which allegedly existed for the purpose of controlling the circulation department of the New York Post by means of extortion, coercion, the falsification of business records, larceny, bribery and other crimes for financial gain. The evidence before the Grand Jury established that the Bonnano crime organization employed the structure of the Post’s delivery department to conduct a variety of unlawful schemes. The Crew included the superintendent of delivery of the Post, Robert Perrino, who is also an associate of the Bonnano crime organization. An eavesdropping device, installed inside Perrino’s office at the Post, intercepted conversations which revealed the hierarchy within the criminal enterprise. Tapes show that Perrino received instructions from Salvatore Vitale, an unindicted coconspirator and the acting boss of the Bonnano crime organization. Perrino remitted portions of the proceeds of the Crew’s illicit activities to Vitale. Perrino conducted various criminal schemes on the premises of the Post, using his position as superintendent of delivery to fur
The indictment also alleges an agreement to commit a scheme to defraud Post advertisers by inflating Post circulation figures and thereby influencing the rate which advertisers paid for circulation. Members of the circulation department, including the defendant Michele created fictitious delivery routes to support inflated circulation figures. Drivers were assigned at random to these nonexistent routes, and supporting documentation including bank accounts were created in these drivers’ names without their knowledge. However two of these drivers, the defendants Turzio and Torre, were chosen by the conspirators, at the direction of their superiors in the circulation department, to misrepresent to circulation auditors that these delivery routes existed. The defendant DiSario, also a Post driver, delivered 2,000 papers nightly to Citiwide drivers, who in turn delivered to vendors, substituting the 2,000 papers for earlier editions of the Post in an attempt to make it appear to auditors that papers were in fact being distributed to the vendors.
The indictment charges each of these defendants with committing enterprise corruption by engaging in certain criminal acts to further a criminal enterprise, which criminal acts are
The defendants first argue that the statute is vague and the prosecution unconstitutional under the Due Process Clause of the Fourteenth Amendment (US Const 14th Amend). In enacting the enterprise corruption statute, the Legislature sought to define the scope of enterprise corruption more rigorously than comparable Federal statutes. (Penal Law § 460.00, 4th para; People v Capaldo, 151 Misc 2d 114 [Sup Ct, NY County 1991]; People v Moscatiello, 149 Misc 2d 752, 754-755 [Sup Ct, NY County 1990]; cf, H.J. Inc. v Northwestern Bell Tel. Co., 492 US 229, 239 [1989].) The court rejects the defendants’ argument in light of the definition sections of the statute, which render this statute significantly more definite in its scope than the comparable Federal RICO statute (18 USC § 1961 et seq.) which has been upheld as constitutional (see, People v Wakefield Fin. Corp., 155 Misc 2d 775, 783-784 [Sup Ct, NY County 1992]).
The defendants next argue that the statute requires proof that each of them participated in three separate criminal transactions, or in other words in three separate criminal conspiracies (see, e.g., People v Ruiz, 130 Misc 2d 191, 195-196 [Sup Ct, NY County 1985]). This argument is based upon the statutory requirement that each defendant "intentionally * * * participate[ ] in the affairs of an enterprise by participating in a pattern of criminal activity” (Penal Law § 460.20 [1] [a]) and upon the statutory definition of a pattern of criminal activity as "conduct engaged in by persons charged in an enterprise corruption count constituting three or more criminal acts that”, inter alia, "are neither isolated incidents, nor so closely related and connected in point of time or circumstance of commission as to constitute a criminal offense or criminal transaction, as those terms are defined in section 40.10 of the criminal procedure law”. (Penal Law § 460.10 [4] [b].)
The court finds that the defendants’ proposed interpretation of the statute is too narrow and is not supported by the wording of the statute or by legislative history. The defen
In order to establish enterprise corruption, the prosecution must first establish the existence of a criminal enterprise. Penal Law § 460.10 (3) defines criminal enterprise as a group of persons sharing a common purpose of engaging in criminal conduct, associated in an ascertainable structure distinct from a pattern of criminal activity, and with a continuity of existence, structure and criminal purpose beyond the scope of individual criminal incidents. By this definition, a pattern of criminal activity does not necessarily establish a criminal enterprise (see, People v Moscatiello, supra, 149 Misc 2d, at 756). The enterprise refers to the "group of persons” whose "common purpose” is to engage in criminal conduct. The pattern of criminal activity defined in Penal Law § 460.10 (4) is the "conduct engaged in by persons charged in an enterprise corruption count”. In other words, the pattern is the criminal conduct engaged in by the group, not by the individual defendant.
Under the enterprise corruption statute, the criminal enterprise must be proven to exist apart from the pattern of its criminal activity. That is, the enterprise must have (1) an ascertainable structure distinct from an association entered into for the purpose of carrying out the pattern of criminal activity, and (2) a continuity of existence, structure and criminal purpose "beyond the scope of individual criminal incidents”. (Penal Law § 460.10 [3].) The quoted phrase apparently refers to the statutory definition of a criminal incident contained in CPL 40.10 (2) (a), which consists of criminal acts "closely related and connected in point of time and circumstance of commission”. Thus the enterprise must continue in existence beyond the time required to commit any individual criminal incident, and must be distinct from any ad hoc association entered into for the purpose of carrying out one or more of the criminal incidents relied upon to establish its existence. It is notable that the Legislature did not define criminal enterprise as having a continuity of existence and criminal purpose beyond the scope of the pattern of criminal activity. Thus the structure of the enterprise must be greater
The significance of the language of Penal Law § 460.10 (4) (b), relied upon by the defendants, becomes clearer when one recalls that the Legislature was concerned not only with defining organized crime by what it does, but also with limiting the scope of the statute to the threat of organized criminal activity. The legislative definition of a "pattern of criminal activity”
The continuity component of the pattern requirement requires proof that the members of the enterprise as a group engaged in at least three separate criminal transactions. The relatedness component requires that the three transactions all have been committed by associates of the enterprise or their accomplices (Penal Law § 460.10 [4] [c] [ii]). However, the relatedness component also brings within the pattern all
Once the reason that three separate transactions must be proven to establish the pattern requirement is understood, it is apparent that the prosecution need not prove that every defendant participated in all three separate criminal transactions. Penal Law § 460.20 (2) requires proof that each defendant (1) having knowledge of the existence of the criminal enterprise; (2) while employed by or associated with the enterprise; (3) intentionally conduct or participate in the affairs of the enterprise by participating in a pattern of criminal activity. Unlike the Federal RICO statute, the enterprise corruption statute defines participation in a pattern of criminal activity.
A person participates in a pattern of criminal activity when, with intent to participate in or advance the affairs of the criminal enterprise with which he is associated, he "engages in conduct constituting or is criminally liable [as an accomplice] for * * * at least three of the criminal acts included in the pattern”, two of which are felonies other than conspiracy (Penal Law § 460.20 [2]). It is notable that the statute does not require proof that the defendant engaged in conduct constituting a pattern of criminal activity, but only in three criminal acts "included in the pattern”. As previously discussed, acts which are part of a common criminal scheme or plan are included within the pattern of criminal activity where there are other unrelated acts sufficient to establish the required continuity of criminality. Therefore, it is possible for the defendant to participate in the criminal enterprise, with knowledge of its existence and of the nature of its activities,
This interpretation is also supported by the legislative history. In his transmittal letter, designed "to clarify legislative intent” with regard to the enterprise corruption legislation (L 1986, ch 516), then Assemblyman Miller who was one of the authors of the statute, noted that under the contemporary amendment to the joinder statute (CPL 200.40 [1] [d]), "the criminal conduct joined will, in almost all cases, be the kind of conduct which would have been joinable under current law requirements of a common scheme or plan” (Letter of Assemblyman Miller, July 16, 1986, at 3). One purpose of the legislation noted by the Governor in his memorandum of approval was to enhance penalties for criminal acts which represent an organized "division of labor, specialization [and] diversification” (Governor’s Mem approving L 1986, ch 516, 1986 McKinney’s Session Laws of NY, at 3176). Clearly, specialization and division of labor suggest that individual defendants who engage in one aspect of the criminal enterprise are to be held responsible for the conduct of the larger enterprise where they commit criminal acts with intent to advance the known criminal purposes of the enterprise. To construe the statute so as to require proof that each defendant engaged in multiple criminal transactions would undermine this legislative purpose. The legislative findings state that "these definitions should be given their plain meaning, and should not be construed either liberally or strictly, but in the context of the legislative purposes set forth in these findings” (Penal Law § 460.00, 7th para).
Therefore, the court holds that where the defendant, knowing of the existence of the criminal enterprise and the nature of its activities and being associated with the enterprise, with intent to participate in or to advance the affairs of the enterprise, commits or is otherwise criminally liable for any three criminal acts included within the pattern, the defendant commits enterprise corruption even though the acts may be part of a single criminal transaction.
The court finds that the evidence before the Grand Jury sufficed to establish the existence of a criminal enterprise within the meaning of Penal Law § 460.10 (3). The Crew was a group of persons sharing a common purpose of engaging in criminal conduct, having an ascertainable structure distinct from the pattern of its criminal activity. The structure consisted of a chain of command and profit sharing. The Bonnano crime organization employed the Post’s circulation department to commit crimes. Although the structure of the criminal enterprise encompassed the structure of the Post’s circulation department, the criminal enterprise was larger, including the hierarchy of the Bonnano organization, and the corporate defendant, Citiwide News, an independent newspaper distributor. The hierarchy of the criminal enterprise was independent of the hierarchy of the legitimate enterprise. For example, although Richard Cantarella wielded considerable influence within the criminal hierarchy, he was on the Post payroll as a laborer, and did not in fact work for the Post. Perrino explained to Cantarella that the defendant John Vispisiano was included in the scheme at the direction of the organization.
The enterprise engaged in a pattern of criminal activity within the meaning of the statute (Penal Law § 460.10 [4]). The pattern of criminal activity included more than three unrelated criminal transactions. Among these where two larceny schemes involving falsified "returns” credit, having separate structures and involving different people: the Citiwide scheme operated by Perrino, Michele and Joe Torre; and the "J&J” scheme operated by Perrino, Vispisiano and Joe Steo. Salvatore Vitale shared in the proceeds of these larcenies. Perrino also created and operated two payroll scams: one of which involved placing a nonexistent person on the Post payroll and collecting the salary paid; and the other placing Bonnano member Richard Cantarella on the Post payroll for work he did not perform. The members of the enterprise thus engaged in numerous criminal acts within the enterprise corruption statute (Penal Law § 460.10 [1]) constituting a number of separate criminal transactions (CPL 40.10) using the payroll of the Post, the means of distribution of Post papers, the NMDU and the independent distribution company, to obtain money unlawfully from the Post. Evidence showed that various members of the criminal enterprise directly profited from the operation of these schemes.
The structure of the Crew was distinct from any ad hoc
Having determined that the evidence established the existence of a criminal enterprise within the meaning of the statute, the court must consider whether the evidence further establishes reasonable cause to believe that the individual defendants remaining before the court, committed the offense of enterprise corruption (Penal Law § 460.20). Each defendant is charged with having knowledge of the existence of the criminal enterprise and of the nature of its activities, and while being associated with the enterprise, having committed or having been an accomplice to a number of criminal acts, termed "pattern acts” by the indictment, with intent to participate in or advance the affairs of the criminal enterprise. The statute limits the criminal acts which may be considered participation in a criminal enterprise to those felonies or to conspiracy or attempt to commit those felonies specifically enumerated in section 460.10 (1) (a) and (b). In order to establish a prima facie case, the evidence must establish that the defendant committed or is otherwise liable for at least three such criminal acts. .
Richard Cantarella
Richard Cantarella was intercepted acting as representative of Salvatore Vitale in regard to Vitale’s interest in a scheme whereby a home delivery service which received unredeemable newspapers at discount, would redistribute these papers to Post drivers who in turn would redeem the papers as unsold copies of newspapers routinely delivered by the drivers to news vendors. The drivers received 33 cents for each unsold paper. Evidence seized pursuant to a search warrant revealed that the home delivery service, run by the
In addition to Richard Cantarella’s involvement in this larceny, the prosecution relies as further proof of Cantarella’s participation in the pattern of criminal activity, upon his possession of an unregistered firearm at his home on Staten Island. Possession of the firearm is a felony encompassed within the enterprise corruption statute (Penal Law § 460.10 [1]) in light of Cantarella’s previous criminal convictions (Penal Law § 265.02 [1]). The firearm was discovered during execution of a search warrant for Cantarella’s home. One of the elements of enterprise corruption is that the defendant has engaged in the criminal act alleged as part of the pattern, with intent to participate in or advance the affairs of the criminal enterprise (Penal Law § 460.20 [2]). The enterprise alleged here is the Crew, not the Bonnano crime syndicate. There is no evidence that the defendant’s possession of the firearm at his home furthered or was intended in any manner to further the affairs of the Crew. There is no evidence that guns were used by anyone to further the criminal enterprise defined in the indictment. Accordingly, the court finds that Richard Cantarella’s possession of the firearm at his residence is not properly alleged as a criminal act of participation in the pattern of criminal activity encompassed by the enterprise.
The evidence also establishes that Richard Cantarella engaged in a no-show job scheme whereby he collected a paycheck from the Post for working as a tailman, unloading
The court notes that the enterprise corruption statute does not include petit larceny within the criminal acts which may be considered as part of a pattern of criminal activity. Generally, multiple larcenies may be considered as a single offense where the property is taken from the same owner by a series of acts which are pursuant to a single intent and in execution of a common fraudulent scheme (see, People v Cox, 286 NY 137, 145 [1941]; cf., People v Thiel, 26 AD2d 897 [4th Dept 1966]). A series of petit larcenies from the same owner, governed by a common fraudulent scheme, extending over a period of time may be charged as a single grand larceny (see, e.g., People v Rosich, 170 AD2d 703 [2d Dept 1991]; cf., e.g., People v Perlstein, 97 AD2d 482, 484 [2d Dept 1983]). The decision whether to charge such conduct in the aggregate is for the prosecution. The prosecution properly chose to aggregate the defendant’s larcenies into grand larceny which is a criminal act within the enterprise corruption statute. However, in the court’s view, considering the severity of the penalties imposed by the enterprise corruption statute and the adequacy of the penalties imposed by the larceny statutes, once the prosecution has elected to aggregate the defendant’s larcenies, it may not arbitrarily exercise this discretion to aggregate only portions of a continuous series of petit larcenies undertaken from a single owner pursuant to a common
Since the evidence before the Grand Jury establishes only two criminal acts committed by Richard Cantarella having the necessary connection to the criminal enterprise, the count of enterprise corruption is dismissed as to Richard Cantarella.
Vincent DiSario
Vincent DiSario is charged with enterprise corruption based upon allegations that he twice possessed loaded firearms on the premises of the Post, that he committed grand larceny in connection with one of the returns schemes, and that he engaged in a scheme to defraud and falsified business records in connection with the circulation fraud. These allegations are sufficient on their face to establish enterprise corruption by DiSario.
However, in order to prove enterprise corruption, there must be evidence sufficient to establish each element of each pattern criminal act (Penal Law § 460.10 [1]), and the defendant’s commission of each crime (Penal Law § 460.20 [2]). Here the evidence before the Grand Jury fails to support the criminal acts alleged.
With regard to the pattern crimes of criminal possession of a weapon (Penal Law § 265.02 [1]), the People failed to prove the operability of the two weapons. Moreover, there is no evidence that the weapons possession constituted participation in the criminal enterprise alleged in the indictment. Even under the Federal RICO statute, a crime unrelated to the criminal enterprise is not a predicate act simply by virtue of its commission on the premises of the legitimate enterprise.
With regard to the alleged grand larceny, construing the evidence most favorably to the People, the Grand Jury could infer that Vispisiano paid DiSario on one occasion for 2,000 papers which were returned to the Post for cash at 33 cents apiece. However, this evidence fails to prove that DiSario was an accomplice to grand larceny, as opposed to petit larceny. To prove grand larceny, the evidence must establish that DiSario aided in stealing more than $1,000 (Penal Law § 155.30 [1]). Here the evidence only establishes that DiSario aided in the theft from the Post of at most $660 (.33 X 2,000).
Similarly, the evidence is insufficient to support the crimes of conspiracy to commit a scheme to defraud, scheme to defraud or falsifying business records on the part of DiSario in regard to the circulation scheme. DiSario was chosen by the conspirators, his superiors in the circulation department, to deliver 2,000 papers nightly to Citiwide drivers, who in turn delivered these papers to vendors, substituting the 2,000 papers for earlier editions of the Post in an attempt to make it appear to auditors that papers were in fact being distributed for sale by the vendors named to the auditors. The evidence before the Grand Jury showed that DiSario returned the substituted papers to the Post where they were destroyed. While these deliveries may have been unusual, there is no evidence that the defendant DiSario was aware of the reason for the deliveries or of the alleged conspiracy to inflate circulation figures.
Therefore, since the evidence fails to establish that three pattern criminal acts were committed by DiSario in furtherance of the affairs of the criminal enterprise, the enterprise corruption count is dismissed as to him.
Anthony Michele
The defendant Michele, as director of circulation at the Post, intentionally aided in the creation of false delivery routes in order to deceive the auditors into verifying daily circulation of 50,000 papers which did not in fact exist. The evidence sufficed to establish the criminal acts of conspiracy to commit a scheme to defraud in the first degree (Penal Law §§ 105.05, 190.65) and falsifying a business record in the first degree (Penal Law § 175.10). However, there is insufficient evidence from which the Grand Jury could infer that Michele committed these crimes for the purpose of participating in the affairs of the criminal enterprise (Penal Law § 460.20 [1] [a]). Michele and other members of the Post circulation department who had no proven connection to the criminal enterprise, agreed to inflate the Post’s circulation figures apparently in an attempt to protect the Post’s advertising revenue following the settlement of a strike against the Daily News. This agreement was made independently of and without the knowledge of Perrino or his "Crew”. Michele created the fictitious delivery routes and assigned five Post drivers at random, three of whom coincidentally were members of the
Anthony Turzio
The Grand Jury was justified in finding that the defendant Turzio committed the pattern criminal act of conspiracy to commit a scheme to defraud in the first degree (Penal Law §§ 105.05, 190.65). However, as previously discussed, the conspiracy was intended to defraud Post advertisers, and there is no evidence that this conspiracy was committed in order to further the affairs of the criminal enterprise (Penal Law § 460.20 [2]).
Nonetheless, the evidence does establish Turzio’s participation in another aspect of the affairs of the criminal enterprise sufficiently to sustain the count of enterprise corruption with regard to him. Turzio is charged with committing, as an accomplice, the pattern crime of conspiracy to commit the crime of grand larceny in the second degree (Penal Law § 105.10 [1]; § 155.40 [1]) based on the theft of more than $50,000 from the Post paid in salary to one Anthony Murro. In addition, Turzio is charged as pattern crimes with 21 acts of forgery in the second degree (Penal Law § 170.10 [1]) based upon his endorsement of paychecks issued to "Murro”. The evidence established that Turzio signed "Anthony Murro” to payroll checks issued in Murro’s name. Other evidence established that Perrino possessed documents placing the name
Accordingly, the count of enterprise corruption is sustained as to Turzio based upon his commission of the 20
Gerard Bilboa, Corey Ellenthal, Michael Fago
Each of the remaining defendants is charged with enterprise corruption based upon his commission of conspiracy to commit grand larceny pursuant to the Murro payroll scheme, and upon the pattern crimes of forgery, possession of a forged instrument and falsifying business records. Each of these
However in light of the evidence presented, the legal instruction to the Grand Jury was misleading in regard to the crime of forgery. These defendants each endorsed in his own name, one or more payroll checks issued to Murro. A witness testified that it was common practice for a day foreman at the Post to cash payroll checks issued to night workers with the Post cashier, since the cashier was not open during the night shift. The witness testified that the company required these foremen to endorse their own names on these checks. The money was then placed in an envelope bearing the employee’s name and left in the safe for the night foreman. A witness who had endorsed and cashed checks issued to Murro testified that he did not know that Murro was fictitious, and that day foremen often did not know the names of night employees. There was evidence that Ellenthal, Fago and Bilboa held supervisory positions, but no evidence that they knew or should have known that Murro was not employed by the Post, or was in fact the deceased Murro. In every instance of alleged forgery as to these defendants, the endorsement was in the defendant’s own name. Ellenthal endorsed two checks, Fago and Bilboa one check each.
Generally, a person cannot commit forgery by signing his own name, since the person is both the actual and ostensible maker of the instrument thus created (see, People v Levitan, 49 NY2d 87, 90, supra). An endorsement is considered both a complete written instrument and part of the main instrument in which it is contained (Penal Law § 170.00 [2]). Forgery requires evidence that the written instrument was falsely altered, completed or made with intent to defraud, deceive or injure another (Penal Law § 170.10). Where considered a false making (Penal Law § 170.00 [4]), an endorsement is only a forgery where it purports to be an authentic creation of its ostensible maker, but is not either because the ostensible maker is fictitious or the defendant has misrepresented that
Since the enterprise corruption statute requires the grand jurors to find that the defendant "engage[d] in conduct constituting, or, is criminally liable for” (Penal Law § 460.20 [2]) three pattern criminal acts, the prosecution must necessarily instruct the Grand Jury as to the elements constituting the alleged pattern criminal acts with the same degree of precision as would be required to obtain an indictment for those criminal acts (see, People v Calbud, Inc., 49 NY2d 389, 394-397 [1980]). Here the charge as to the forgery counts was so incomplete as to deprive the grand jurors of the information necessary to assess the defendants’ culpability. Therefore, the prosecution may not rely upon the alleged pattern crimes of forgery or of criminal possession of a forged instrument as to those defendants who signed their own names to the Murro checks, in the absence of any other evidence of intent to defraud (cf, People v Briggins, 50 NY2d 302, 307 [1980]). Therefore, the count of enterprise corruption is dismissed as to Ellenthal and Fago.
The evidence of forgery was sufficient as to the defendant Bilboa, however, despite his use of his own name to endorse the Murro check, since the Grand Jury could infer from Bilboa’s act of depositing Murro’s paycheck into his own account, that Bilboa knew Murro did not exist and therefore,
For the foregoing reasons, the enterprise corruption count is dismissed as to all of the remaining defendants with the exception of Anthony Turzio.
[Portions of opinion omitted for purposes of publication.]
. The definition of pattern of criminal activity (Penal Law § 460.10 [4]) reads as follows:
"4. 'Pattern of criminal activity’ means conduct engaged in by persons charged in an enterprise corruption count constituting three or more criminal acts that:
"(a) were committed within ten years of the commencement of the criminal action;
"(b) are neither isolated incidents, nor so closely related and connected in point of time or circumstance of commission as to constitute a criminal offense or criminal transaction, as those terms are defined in section 40.10 of the criminal procedure law; and
"(c) are either: (i) related to one another through a common scheme or plan or (ii) were committed, solicited, requested, importuned or intentionally aided by persons acting with the mental culpability required for the commission thereof and associated with or in the criminal enterprise.”
. Two of the forgeries alleged as pattern criminal acts refer to the same check.
