United States v. Weiner

August 26, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 92-1708
UNITED STATES,

Appellee,

v.

SIDNEY WEINER,

Defendant, Appellant.

ERRATA SHEET

The opinion of this Court issued on August 23, 1993, is amended
as follows:

On cover sheet under Attorneys' names "Mazer" should be corrected

to read "Mezer."

Dinisco should be corrected to read "DiNisco". On page 4,

paragraph 2, "Santiago" should be corrected to read "Santiano."

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 92-1708
UNITED STATES,

Appellee,

v.

SIDNEY WEINER,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Edward F. Harrington, U.S. District Judge]

Before

Torruella, Circuit Judge,

Feinberg,* Senior Circuit Judge,

and Boudin, Circuit Judge.

Harry C. Mezer for appellant.

Sean Connelly, Attorney, United States Department of Justice,

with whom A. John Pappalardo, United States Attorney, Ernest S.

DiNisco, Assistant United States Attorney, and Todd E. Newhouse,

Assistant United States Attorney, were on brief for appellee.

August 23, 1993

*Of the Second Circuit, sitting by designation.

BOUDIN, Circuit Judge. Sidney Weiner, together with

other defendants, was charged in a multi-count indictment

revolving around loansharking and illegal debt collection.

In the nineteen counts directed at Weiner, he was accused of

mail fraud, 18 U.S.C. 1341, conspiracy to collect

extensions of credit by extortionate means, 18 U.S.C. 894,

and conducting and conspiring to conduct the affairs of an

enterprise through a pattern of racketeering activity or

collection of unlawful debt, in violation of the Racketeer

Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C.

1962(c), (d).

Weiner's case was severed for reasons relating to his

health, and he stood trial alone.1 At the close of the

government's case, the trial court granted Weiner's motion

for acquittal as to all of the mail fraud counts and all but

four counts charging conspiracy to collect an extension of

credit through extortion. The jury convicted Weiner of

conspiring to violate, and violating, RICO, and of three

counts of extortion conspiracy under 18 U.S.C. 894; it

acquitted Weiner on the remaining count under 18 U.S.C.

894. The district court then sentenced Weiner to a term of

two years' imprisonment. Weiner now appeals. We affirm.

1Other defendants were tried and convicted in United

States v. Oreto, appeals pending, No. 91-1769, et al., 1st

Cir.

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I.

The gist of the government's case, so far as pertinent

here, was that Weiner, a bank official, associated himself

with a loanshark enterprise headed by one Frank Oreto, Sr.;

that the loanshark enterprise encouraged debtors to obtain

bank loans, sometimes unlawfully, to pay off prior loanshark

debts; that new bank debts were collected by loanshark

enforcers using extortion; and that Weiner used his banking

position and properties he owned to facilitate the

enterprise's affairs. Because Weiner challenges the

sufficiency of the evidence, we summarize the government's

proof in some detail. Construed in a light favorable to the

verdict, see United States v. Rivera-Santiano, 872 F.2d 1073,

1078-79 (1st Cir.), cert. denied, 492 U.S. 910 (1989), the

government's evidence permitted the jury to find the

following.

In 1982, Weiner, a director, consultant and stockholder

of Capitol Bank and Trust Company of Boston ("Capitol"),

hired Oreto to collect certain loans in default that were

made by Capitol. Oreto headed a loanshark operation that

loaned cash to borrowers at interest rates as high as seven

percent per week, and that employed tall, physically imposing

men who used threats of violence to collect from debtors who

fell behind in their payments. Through Weiner, Capitol

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compensated Oreto, with off-the-record cash payments from the

bank, for his services in collecting Capitol's own loans.

The three extortion conspiracy counts for which Weiner

was convicted involved debts owed by Frank Falzone, Fred

Lambert, and Chun Hing "Joe" Wong. Falzone and Lambert each

obtained a $2500 loan from Capitol by paying kickbacks to

Fred Dandrow and Ron Browder. Dandrow introduced Falzone and

Lambert to Browder, a Capitol loan officer. Browder

instantly approved their loan applications and issued bank

checks in the amount of the loans. Lambert borrowed the

money on his bookmaker's instructions to consolidate his

bookmaking debts.

When Falzone and Lambert defaulted on their loans,

Dandrow was summoned to Oreto's house to meet with Oreto and

Weiner. At the meeting, Oreto said that Dandrow would be

held responsible for any outstanding debt on the loans

secured by kickbacks, and Dandrow agreed to contact the

borrowers. At a second meeting with Oreto which Weiner did

not attend, Dandrow was introduced to "Beardsy" Santiago and

told to bring Santiago to the borrowers' homes. Santiago is

6'4" tall, weighs between 230-280 pounds, and was described

by Dandrow as resembling "a motorcycle gang member." Dandrow

later met with Weiner and Dennis Petrosino, another of

Oreto's collectors. Weiner told Dandrow to work with

Petrosino in collecting the loans.

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Dandrow went to Falzone's home, accompanied by Santiago

and Petrosino, and asked Falzone to get inside a car to

discuss repayment of his loan. Inside the car, Petrosino

told Falzone that his loan "wasn't going to go away" and that

Falzone's parents would have to pay the loan if Falzone did

not come up with the money. Falzone testified that he was

"pretty scared" and "just wanted to get out of the car." On

another occasion, Santiago drove Falzone to a house for a

meeting with Oreto, and Oreto told Falzone to make weekly

payments at Gateway Rent-A-Car, a business owned by Weiner.

Falzone left the meeting "scared" and made two subsequent

payments at Gateway. Eventually Falzone's mother contacted

Capitol to arrange a repayment schedule with the bank.

Lambert first came into contact with the Oreto

organization after receiving a phone call instructing him to

go to Gateway Rent-A-Car. There, he met "two big guys" who

said they "wanted their money." Lambert began to make weekly

payments of $25 which he paid to Oreto's men who would come

to his home in Winthrop to collect. Lambert stopped making

payments after he moved to another town. When he later moved

back to Winthrop, he was visited late one night by two

different "big," "heavy" men. In a discussion held in the

men's car, Lambert agreed to resume payment and handed over

$25 on the spot.

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When the payments later ceased, Lambert was summoned to

a meeting with Oreto at the Fasad's nightclub, another

business owned by Weiner. Lambert thereafter made weekly

payments on a consistent basis. He testified that Oreto and

his men scared him. The Lambert loan was discussed by Weiner

and Oreto's "collection manager," John Costa, in an

intercepted telephone conversation. When Costa said that

Lambert had been located and Costa proposed to "get back in

action with him," Weiner approved this plan.

Wong obtained his loan from the Community Cooperative

Bank ("Community"), where Weiner was also a director.

Community was later acquired by Capitol. Wong had heavy

gambling debts which he paid off by borrowing money from

Oreto at weekly interest rates of five percent. Wong's

repayments to Oreto were made at Gateway Rent-A-Car. Wong

then obtained a $30,000 loan from Community in order to pay

off his debt to Oreto. With Oreto's knowledge, Wong put up

his parent's house as collateral for the loan and signed his

parents' names to the loan papers supplied by Oreto. The

loan from Community was approved by Weiner.

Oreto required Wong to make weekly payments of $500 on

the loan. When Wong fell behind on his payments, Oreto sent

Petrosino and another man to the restaurant where Wong

worked. The men grabbed Wong, who was hiding in the kitchen,

took him outside, and told him that Oreto was mad and wanted

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to see him. In a meeting at Fasad's the next day, Oreto told

Wong, "it's not nice, you don't pay . . . I can beat you up

with a baseball bat." Wong fled to New Hampshire and had his

wife make further payments on the loan. Wong's parents

eventually learned that a mortgage had been placed on their

house without their consent. After they contacted Community

to report the problem, Weiner agreed to purchase the loan

from the bank.

The Oreto loanshark operation itself was the subject of

extensive evidence, certain of its records having been seized

by the authorities. The seized records revealed that "Sid,

the bank" paid part of the weekly salary of Costa, Oreto's

collection manager, for about 38 weeks in 1984-85. In

addition to hiring Oreto to collect bank loans, Weiner

allowed Oreto to conduct his loansharking business at Gateway

Rent-A-Car and Fasad's nightclub, both properties held in

Weiner's name.2 Oreto was Weiner's silent partner in the

ownership and operation of Fasad's.

II.

The evidence just recited is the core of the

government's effort to show that Weiner had conspired, in

violation of 18 U.S.C. 1984, to use "extortionate means" in

2Wong testified that Oreto at one point told him, "We
are not working in Gateway anymore. We have a new place
called Fernwood restaurant. Next time you come up to pay me,
you should go to Fernwood." Fernwood was later renamed
"Fasad's".

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seeking to collect an extension of credit, or more precisely,

three loan debts owed respectively by Falzone, Lambert and

Wong. Weiner argues that the evidence was insufficient,

focusing on the element of extortion. "Extortionate means"

includes "the use," or "an express or implicit threat of

use," of "violence or other criminal means" to harm any

person or property. 18 U.S.C. 891(7). Weiner argues that

the evidence did not permit a rational jury to conclude

beyond a reasonable doubt that extortionate means were proved

or that he conspired to have the loans collected through such

means. We disagree.

Falzone and Lambert were not expressly threatened with

violence but implicit threats suffice under the express terms

of the statute. The evidence showed, among other things,

that Falzone and Lambert were confronted by large, physically

imposing men; that these men showed up at their homes, on one

occasion late at night; and that Falzone and Lambert were

directed to get into a car to discuss payment of the loans.

Both Falzone and Lambert testified that they were frightened,

with Falzone at one point hiding in his house. The jury

could rationally conclude that the two men had good reason to

be afraid. As for Wong, Oreto's statement about a beating

with a baseball bat is about as plain and direct a threat as

one can imagine.

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A rational jury could also conclude beyond a reasonable

doubt that Weiner knowingly conspired to collect the debts

through extortion. An agreement may "be implicit in the

working relationship between the parties that has never been

articulated but nevertheless amount to a joint criminal

enterprise." United States v. Moran, 984 F.2d 1299, 1300

(1st Cir. 1993). In proving a conspiracy, the government may

rely entirely on circumstantial evidence. United States v.

Ortiz, 966 F.2d 707, 711 (1st Cir. 1992), cert. denied, 113

S.Ct. 1005 (1993). Once again, we think that the evidence of

Weiner's knowing complicity may not be overwhelming but that

it was assuredly adequate.

In this case, there is no reasonable doubt that Weiner

employed Oreto to collect bank debts so the only open issue

is whether Weiner knew of the means to be employed. Here

Weiner's connections with Oreto were extensive, and Oreto

operated from properties owned by Weiner or held in his name.

"Sid," "Sid, the bank" and "Sid Weiner" were mentioned in the

records of the loanshark business, and Weiner consulted

directly with Costa, the collection manager, about the

Lambert loan. Weiner paid Oreto with off-the-record bank

funds, and when the Wong parents threatened to disclose the

forgery, Weiner took over the loan from the bank.

This evidence was sufficient to permit a rational jury

to conclude beyond a reasonable doubt that Weiner was

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conscious of the means to be used by the Oreto organization

and hired Oreto for just that reason. Weiner testified and

offered the jury a different interpretation of the evidence.

He said that Oreto was hired merely to locate loan

defaulters, that the payments to Oreto were ordered by the

bank president, and that he (Weiner) was dismayed when he

later learned of Oreto's loansharking activities. The jury

was entitled not to credit the thrust of this testimony.

Weiner's next objection concerns the testimony of FBI

Special Agent Raymond Stirling, whom the government called as

an expert witness. Stirling, a specialist on loansharking,

reviewed the accounting ledgers and other documents seized

from the Oreto organization. His testimony explained

transactions reflected in the documents, loanshark

terminology, and other matters of a similar nature. Expert

testimony is allowed pursuant to Fed. R. Evid. 702 if it will

help the jury to understand the evidence or to decide a

particular fact in issue in the case. We have upheld the use

of an expert witness to explain matters pertaining to

loansharking. United States v. Lamattina, 889 F.2d 1191,

1193-94 (1st Cir. 1989).

Weiner objects to one aspect of the testimony in

particular. Over objection, Stirling testified that, based

on documents showing the same telephone number next to

references in the records to "Sid," "Sid, the bank," and "Sid

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Weiner," it was his opinion that these persons were one and

the same. Weiner argues that this opinion reflected no

special expertise but was a routine inference that the jury

could draw on its own. We agree, but regard the error as

harmless. The inference was compelling that the references

(all to "Sid"), together with identical phone numbers,

referred to the same person. Stirling's opinion "connecting

the dots" added little or nothing.

Weiner next contends that the district court erred in

its treatment of evidence relating to the counts that it

dismissed prior to the verdict. As earlier noted, the

district court directed judgments of acquittal on the mail

fraud counts and on other counts charging conspiracy to

collect other loans through extortion. The dismissed counts,

involving other loanshark debtors, were also incorporated in

the RICO counts as predicate acts of racketeering. The

district court entered verdicts of acquittal on these counts

because in its view the government had failed to adequately

link Weiner to the charged activity. Weiner moved for a

mistrial, alleging prejudicial spillover of the evidence

introduced to support the dismissed counts.The district court

denied the motion but agreed to instruct the jury in the

closing charge to disregard this evidence. Although finding

the evidence relevant to the remaining RICO charges, the

court ordered the evidence stricken and the indictment re-

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written to exclude reference to the corresponding RICO

predicate acts because it thought the jury might otherwise be

confused about which counts remained in the case. In the

charge, the court neglected to instruct the jury to disregard

the stricken evidence, and Weiner's lawyer failed to object

to this omission.

Weiner now argues that the district court erred in

denying his motion for mistrial or, alternatively, that the

judge should have told the jury not to consider the evidence

relating to the dismissed counts. The problem is that Weiner

was not entitled to have this evidence excluded from the

jury's consideration. As the district court correctly

perceived, evidence of other loan collections by Oreto's

organization was relevant to the remaining RICO charges

against Weiner, regardless of whether Weiner was personally

involved in the racketeering acts underlying the dismissed

counts. As the Second Circuit has explained in the analogous

context of severance:

"[T]he government must prove an
enterprise and a pattern of racketeering
activity as elements of a RICO violation.
Proof of these elements may well entail
evidence of numerous criminal acts by a
variety of persons, and each defendant in
a RICO case may reasonably claim no
direct participation in some of those
acts. Nevertheless, evidence of those
acts is relevant to the RICO charges
against each defendant . . . because it
tend[s] to prove the existence and nature
of the RICO enterprise . . . ."

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United States v. DiNome, 954 F.2d 839, 843 (2d Cir.), cert

denied, 113 S.Ct. 95 (1992). Thus, despite the dismissal of

the separate counts, the jury was entitled to consider this

evidence in support of the RICO counts. Accord United States

v. Mitchell, 777 F.2d 248, 260 n.3 (5th Cir. 1985), cert.

denied, 476 U.S. 1184 (1986); United States v. Morelli, 643

F.2d 402, 412 (6th Cir.), cert. denied, 453 U.S. 912 (1981).

Of course, the evidence, although relevant, might have

been overly prejudicial. See Fed. R. Evid. 403. Of the few

examples cited in Weiner's brief, only one is worth

mentioning: In an intercepted conversation played for the

jury, one of Oreto's operatives says he should "cut out" a

debtor's eyes. The statement is graphic, to be sure, but

extortion through threats of violence is not a pretty crime.

"By design, all evidence is meant to be prejudicial; it is

only unfair prejudice which must be avoided." United States

v. Rodriguez-Estrada, 877 F.2d 153, 156 (1st Cir. 1989).

Here, the evidence was pertinent in depicting the nature of

Oreto's organization; and, as a mere threat, with no actual

known victim, it assuredly did not overwhelm the jury.

Finally, Weiner objects to the district court's failure

to give several instructions requested by Weiner and to the

instruction it actually gave on the elements of a RICO

offense. One request was for a "good faith reliance"

instruction based on Weiner's claim that he hired Oreto at

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the direction of the bank president, a retired state probate

judge. The instructions on specific intent given by the

district court were sufficient; no separate "good faith"

instruction was required. See United States v. Dockray, 943

F.2d 152, 154-55 (1st Cir. 1991). Two other instructions

sought, and refused, aimed to refine the extortion concept;

but one was potentially misleading and the other a comment

upon the evidence.3

Weiner's challenge to the RICO instruction is two-fold

and requires more discussion. Section 1962(c) of the RICO

statute makes it a crime to conduct or participate in the

conduct of the affairs of an enterprise affecting interstate

or foreign commerce "through a pattern of racketeering

activity or collection of unlawful debt." 18 U.S.C. 1962(c)

(emphasis added). The three predicate counts for which

Weiner was convicted each charged extortion, which is a

racketeering act under the statute. See 18 U.S.C. 1961(1).

Of these three counts, one count (the usurious loan to Wong)

involved an unlawful debt as well.

3The requested charge that "demands for money alone are
simply not threats" could easily be misunderstood to mean
that something more need be demanded; and the further request
that "any anxiety experienced by the four debtors . . . could
be ordinary anxiety [of a debtor called upon to pay]" is a
comment on the evidence. The fact that these statements were
made by appellate courts in commenting on evidence in
particular cases does not convert them into required
instructions.

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The district court in this case instructed the jury that

RICO liability could be predicted upon a pattern of

racketeering activity or, alternatively, "upon the collection

of a single unlawful debt, i.e., the single loanshark debt

owed by Wong." Weiner takes issue with the latter, quoted

portion of the instruction because, he says, section 1962(c)

requires a "pattern" of collection of unlawful debts, and

this precludes RICO liability on the basis of a single

instance of collection of an unlawful debt. The objection

was duly presented at trial. Although one might at first

think that the three extortion convictions automatically

showed a pattern and mooted the issue of statutory

construction, the government (correctly) makes no such

argument.4

We turn, then, to the construction of the statute. If

one focused only on section 1962(c)'s language and structure,

one might well read the phrase "pattern of racketeering

activity or collection of unlawful debt" and think that the

word "pattern" modifies "collection of unlawful debt" as well

as "racketeering activity." The imprecise wording of section

1962(c), together with the rule of lenity in construing

4The "pattern" offense involves requirements of
connection between the offenses, which need not be described
here, but no such requirements exist if one unlawful debt
collection is enough. Under the "single debt" instruction
given by the court, it is possible (at least in theory) that
the jury could have made no finding of "pattern" at all and
relied solely on the Wong debt.

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criminal statutes, might favor the interpretation urged by

Weiner if our inquiry stopped with section 1962(c). But the

matter becomes more complicated, and the opposite result is

suggested, when other parts of the statute are consulted.

Section 1962(c), although the most commonly invoked

provision of RICO, is only one of four categories of

proscribed conduct. Subsection (a) in pertinent part

prohibits the use or investment in an enterprise of income

derived "from a pattern of racketeering activity or through

collection of an unlawful debt." 18 U.S.C. 1962(a)

(emphasis added). Subsection (b) similarly makes it a crime

to acquire or maintain an interest in an enterprise "through

a pattern of racketeering activity or through collection of

an unlawful debt." Id. 1962(b) (emphasis added). It is

thus clear that the collection of a single unlawful debt is

enough under subsections (a) and (b). Weiner has suggested

no reason why Congress might have intended that a single act

of collection suffice as a source of criminal investment or

to gain an interest in an enterprise but that criminally

conducting the enterprise's affairs required multiple acts of

collection.

In addition, the term "pattern of racketeering activity"

is defined in section 1961's definitional provisions as

requiring at least two acts of racketeering activity

occurring within a specified period of time. 18 U.S.C.

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1961(5). But there is no counterpart definition of a

"pattern of collection of unlawful debt," as one would expect

if such a pattern were an element of one of RICO's core

provisions. Instead, section 1961 simply lists "unlawful

debt" which is defined as "a debt" incurred under certain

conditions, including usury. Id. 1961(6). This further

confirms that section 1962(c) was unartfully drafted but must

be construed in pari materia with sections 1962(a) and (b).

The three circuit courts to have considered this issue

have held that a single collection of an unlawful debt

satisfies section 1962(c)'s "collection of unlawful debt"

requirement. United States v. Giovanelli, 945 F.2d 479, 490

(2d Cir. 1991); United States v. Vastola, 899 F.2d 211, 228

n. 21 (3d Cir.), vacated and remanded on other grounds, 497

U.S. 1001 (1990); United States v. Pepe, 747 F.2d 632, 645

(11th Cir. 1984). Viewing the RICO statute as a whole, we

agree. See also H.J. Inc. v. Northwestern Bell Telephone

Co., 492 U.S. 229, 232 (1989) (stating that "[e]ach

prohibited activity is defined in 18 U.S.C. 1962 to

include, as one necessary element, proof either of `a pattern

of racketeering activity' or of `collection of an unlawful

debt.'").

Lastly, Weiner contends that the district court's

instruction on the type of participation required under

section 1962(c) is at odds with the Supreme Court's decision

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in Reves v. Ernst & Young, 113 S.Ct. 1163 (1993), a recent

case decided after Weiner's trial. In Reves, the Court held

that the phrase "to conduct or participate . . . in the

conduct" of the affairs of a RICO enterprise, as used in

section 1962(c), means that the defendant must have

participated in the "operation or management" of the

enterprise. 113 S. Ct. at 1170.

In this case the jury was instructed that "the terms

`conduct' and `participate' in the conduct of the affairs of

the enterprise include the intentional and deliberate

performance of acts, functions or duties which are related to

the operation or management of the enterprise." Weiner's

objection, as we understand it, is that the word "include" in

the instruction could suggest that lesser conduct fostering

the enterprise in any form is enough to convict. As this

objection was not made in the district court, we review for

plain error, see United States v. Georgacarakos, 988 F.2d

1289, 1294 (1st Cir. 1993), and we find none.5

Aside from the word "include," there is nothing in the

instruction nor in any other part of the court's charge which

5Arguably, no waiver should be inferred, and no plain
error requirement imposed, where the Supreme Court's ruling
comes out of the blue and could not have been anticipated.
See Castringano v. E.R. Squibb & Sons, Inc., 900 F.2d 455,

461 (1st Cir. 1990). Here, however, Reves resolved a split

between circuits (apparently the First Circuit had not ruled
on the issue) so the objection could easily have been made at
trial.

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suggests that something less than involvement in the

operation or management of the enterprise will do. And to

the extent that the jury was given specific guidance, that

guidance precisely mirrored the "operation or management"

test subsequently approved in Reves. Plainly there was no

"miscarriage of justice." Georgacarakos, 988 F.2d at 1297.

We think that the district court should be commended for its

prescience.

III.

Because litigants stress only the material pertinent to

their claims on appeal, appellate courts normally receive a

series of snapshots of a case rather than the full canvass of

the trial. It may be true in Weiner's case that the evidence

showed only that he was loosely confederated with Oreto, and

true also that a low level of threat was employed in the

three debt collections connected to Weiner. But by their

very nature criminal conspiracies are masked, and veiled

threats are the hallmark of intelligent extortion. The

outcome here was within the bounds of reason.

Affirmed.

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