Petition for Writ of Certiorari — Dellacroce v. United States

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Questions Presented ...............5.2 202 eeeeeeeeee

Constitutional Provisions Involved .................--

Statutes Involved ..................+.45- eee

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Reasons For Granting The Writ

Point I — The government failed to affirmatively

establish an independent source of evidence for

petitioner’s federal indictment after he had been

before a state grand jury. ................--.+--+:-

Same Prosecutor in Both Cases .................--

The Kastigar Rule . EI Ree saree

SRE AER AT aie Rn cscucuucacepeaid xe

. Point II — The petitioner was unconstitutionally con-

victed of tax evasion for failure to report the alleged

receipt of stock never registered in his name, never

possessed by him, and which was being held in escrow

subject to adverse claimts. ..............--.----++-

Point II] — The government's refusal to allow full

disclosure of facts needed to impeach the prosecution's

chief witness denied petitioner due process of law. ... .

Appendix B — Statutes Involved .................-. :

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Table of Cases

Big Lake Oil Company v. Commissioner, 95 F.2d 573

si oe een ce raguanse ee she 0s 15

Brady v. Maryland, 378 U.S. 83 (1963) .............. 18

Commissioner v. Edwards Drilling Co., 95 F.2d 719 (5th

MME sb clued etek eats cas be - Sa pasees 16

Daniel H. Deutsch, 26 T.C.M. 649 (1967) ............ 15

Estate of Jacob M. Eisenberg, 6 T.C.M. 771 (1967) .... 15

Estate of Margaret Allen Fairbanks, 3 T.C. 260 (1944) . 15

ars v. United States, 360 U.S. 672 (1959) ......... 16

In re Cardassi, 351 F. Supp. 1080 (D. Conn. 1972) ..... 12

_ Inre Minkoff, 349 F. Supp. 154 (D.R.Is. 1972) ....... 12

Kastigar v. United States, 406 U.S. 441 (1972) ........ 6, 9

Lubin v. United States, 313 F.2d 419 (9th Cir. 1963) ... 16

O’Kelley v. United States, 116 F.2d 966 (8th Cir.1941). 16

United States v. Alter, 482 F.2d 1016 (9th Cir. 1973)... 12

United States v. McDaniel, 482 F.2d 305 (8th Cir.1973) 12 _

United States v. Seifert, 463 F.2d 1089 (5th Cir.1972) . 12

United States v. Terranova, S.D.N.Y., 71 Crim. 332 .... 18

Ventimiglia v. United States, 242 F.2d 620 (4th Cir.

ANIELLO DELLACROCE,

Petitioner,

us.

UNITED STATES OF AMERICA

=

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

The petitioner, Aniello Dellacroce, prays that a Writ of

Certiorari issue to review the judgment of the United States

Court of Appeals for the Second Circuit entered on January 21,

1974.

Opinion Below

The opinion of the Court of Appeals is not yet reported but is

reprinied in our Appendix A.

NRA ea pe eaneten, coer aremy PR i ne ee

ees

Jurisdiction

Following a jury tria! in the United States District Court for

the Southern District of New York, petitioner was found guilty

on January 24, 1973 under a three-count indictment charging

income tax evasion, the filing of a false return and conspiracy to

evade taxes in violation of 26 U.S.C. §§7201, 7206 and 371 of

Title 18. On April 2, 1973 the petitioner was sentenced to five

years’ imprisonment. “

On January 21, 1974 the Court of Appeals for the Second

Circuit affirmed petitioner’s conviction. This Court extended the

time for filing a petition for certiorari until March 22, 1974. The

jurisdiction of the Court is invoked under 28 U.S.C. §1254 (1).

Questions Presented

1. Whether the government failed to affirmatively establish an

independent source of evidence for petitioner’s indictment after

he had been granted transactional immunity and testified fully

before a state grand jury.

2. Whether the petitioner was unconstitutionally convicted of

tax evasion for failure to report the alleged receipt of stock never

registered in his name, never possessed by him, and which was

being held in escrow subject to adverse claims.

3. Whether the government’s refusal to allow full disclosure of

facts neeiied to impeach the prosecution’s chief witness denied

petitioner the right of confrontation.

PR or erga LE eet . ; ereersesag

Constitutional Provisions Involved

Amendment V —

No person shall be held to answer for a capital, or otherwise

infamous crime, unless on a presentment or indictment of a

Grand Jury, except in cases arising in the land or naval forces, or

in the Militia, when in actual service in time of War or public

danger; nor shall any person be subject for the same offense to

be twice put in jeopardy of life or limb; nor shall be compelled in

any criminal case to be a witness against himself, nor be

deprived of life, liberty, or property, without due process of law;

nor shall private property be taken for public use, without just

compensation.

Amendment VI

In all criminal prosecutions, the accused shall enjoy the right

to a speedy and public trial, by an impartial jury of the State and

district wherein the crime shall have been committed, which

district shall have been previously ascertained by law, and to be

informed of the nature and cause of the accusation; to be

confronted with the witnesses against him; to have compulsory

process for obtaining witnesses in his favor, and to have the

Assistance of Counsel for his defense.

Statutes Involved

Sections 7201 and 7206 of Title 26 and Section 371 of Title

18 of the United States Code pertain to this case and are

reprinted in our Appendix B.

4

Statement of Facts

In 1970 petitioner was called before a New York County

grand jury investigating, among other things, his acquisition of

and state tax liability fcc certain corporate stock (GJ 860).! Full

transactional immunity was granted petitioner, who was forced

to testify concerning: his employment with the other named

conspiraturs in his federal tax case; meetings at'the Ravenite

Social Club in New York City; his work efforts and how he

supported himself, and whether he maintained bank accounts

and safe deposit boxes; the times and places of his meetings with

other. named conspirators; and whether he arranged “labor

peace” and received shares of stock that he appropriated to his

own use (GJ 945, 942, 988) ;

After petitioner furnished this information to the state grand

jury, the Assistant District Attorney in charge of that in-

vestigation joined the Justice Department and presented

petitioner’s tax case to a Southern District federal grand jurv.

Petitioner was thereafter indicted for income tax evasion.

The Tax Case

The government claimed that in 1968 petitioner received

22,500 shares of Yankee Plastics stock for arranging ‘labor

peace.” In 1968 Yankee Plastics, Inc. and Mr. Hanger, Inc.

merged. Both were manufacturers of plastic hangers for the

garment industry in New York City. During the merger

negotiations, Lawrence Rosen was striving to gain control of the

newly formed company (1203).2 To achieve this purpose,

Rosen acquired 22,500 shares of stock and registered it in the

name of a nominee (Preston Smith) to escape certain restrictions

Refers to pages of Defendant's Exhibit A, petitioner's grand jury testimony

before New York County grand jury.

2Refers to petitioner's appendix in the Second Circuit Court of Appeals.

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on its resale (1199-1200, 1532-1533). This is the very same

stock that the government charged petitioner owned.

Rosen testified that he was {ree to do with this stock as he

pleased, and that he did not know the petitioner and has never

met him (1535, 1538). He swore he never heard that these

shares were being held for petitioner. Rosen has continuously

endeavored to recover these shares, which he claims belong to

him (1553).

Frank Terranova, the government's chief witness, stated that

Martin Goldman told him that the 22,500 shares were being

held for petitioner for assistance with some labor problems

(157). However, Terranova sold 7,500 shares of this stock as his. _.

own, for which he received $22,261.85 (252). He admitted

before the SEC that he used that money for his own purposes

(395).

During 1968 and 1969 at least three other persons claimed

the siock: Larry Rosen, the Chairman of the Board of Yankee

Plastics, Inc.; Joseph Abrams, a former shareholder; and

Frank Terranova. Terranova deposited the shares remaining

from the sale with his attorney, stating that these were his

certificates (1020). Terranova’s lawyer held his stock for over a

year. He then released it to Terranova’s wife based upon his

written authorization, which provided in part:

“Upon the sale of these certificates by my wife, it is

requested that you make arrangements for the payment

of federal and state taxes.”” (Govt. Exh. G-11)

Terranova’s wife then delivered the shares to Martin Goldman

who surrendered them to his attorney where they have remained

ever since.

Unquestionably, petitioner never physically received the

stock, nor did he ever possess it. The stock has never been sold,

nor has anyone, save Terranova, profited from it. Nevertheless,

petitioner has been sentenced to five years’ imprisonment for

failing to report the 22,500 shares of stock as income in the year

1968.

SSR a ARON TICE

Y

6

REASONS FOR GRANTING THE WRIT

POINT I

The government failed to affirmatively

establish an independent source of evidence

for petitioner's federal indictment after he

had been granted transactional immunity

and testified fully before a state grand jury.

The issue which dominates this case involves petitioner’s state

grant of immunity, which the government violated by using that

compelled testimony to obtain a federal income tax indictment.

The Second Circuit's approval of the government’s shameful

tactics used in this case has gravely undermined this Court's rule

in Kastigar v. United States, 406 U.S. 441 (1972). Thus, the

fifth amendment has suffered a staggering setback under the

impact of the Second Circuit's decision.

It is uncontroverted that petitioner was compelled to disclose

the following facts under a state grant of immunity:

(1) that he worked for Martin Goldman (a named

conspirator in his federal tax case) and that he had

known him for about five years and worked for him

personally ;

(2) that he met Martin Goldman through Michael

Catalano (another named conspirator in the federal tax

case) and that he had met with Martin Goldman at the

Ravenite Social Club ‘many times’ (GJ 884, 891,

901);3

(3) that he was paid $200 a week and reported directly

to Goldman;

(4) that he had no other source of income, and that he

maintained no bank accounts or safe deposit boxes ;

3Each of these crucial omissions appears as an overt act in petitioner's federal

indictment.

(S) that he met with the conspirators named in his

federal indictment at particular times and places (GJ

988);

(6) that his job duties with Goldman were discussed at

the Ravenite Social Club (GJ 940); 4

(7) that he had been to the offices of the 20th Century

Industzies with Michael Catalano;

(8) that he was asked whether he arranged labor peace

for these companies and whether he had received shares

of stock and appropriated them to his own use (GJ 945,

942).5

These facts are illustrative only and by no means exhaust the

state grand jury testimony. Petitioner testified for a full day

before a state grand jury and answered over 278 questions. See

Defendant's Exhibit A.

Same Prosecutor in

Both Cases

The same New York prosecutor, William Aronwald, who

interrogated petitioner before the state grand jury later became

the government attorney who presented petitioner's tax case to a

federal grand jury and later prosecuted the indictment in federal

court. Before the Justice Department hired Aronwald, they

discussed with him his earlier experience in the state in-

vestigation of petitioner. He was assigned to petitioner's tax

investigation because of his “familiarity” with the state

proceedings (89).

Aronwald admitted that while he was conducting petitioner’s

state investigation he knew there was a federal tax investigation

4These meetings at the Ravenite Club played a prominent part in petitioner's

The government's tax indictment charged him with receiving 22,500 shares of

stock for arranging labor peace between these New York firms.

PRS ET PS I Pao. as

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pending against him (9). He conceded that during the state

investigation he exchanged information with the federal

authorities concerning their joint efforts against petitioner (9).

Perhaps the most harrowing and revealing fact to emerge

from this grim record is Aronwald’s admission that after he

began prosecuting petitioner's federal tax case, he returned to

the New York prosecutor’s office and obtained all the records

relating to that investigation and transported them to the federal

prosecutor’s office.© Defense counsel, stunned by this revelation,

asked:

“The reason for that, to bring that over to the federal

jurisdiction, was, of course, to assist you in your in-

vestigation and the culmination of that investigation in

the federal jurisdiction, isn’t that true? A. That is

correct.” (48, 49)

In view of the shocking circumstances of this case, petitioner

moved to dismiss the tax indictment because his constitutional

privilege against self-incrimination was breached by the use of

his state grand jury testimony in obtaining the federal tax in-

dictment and conviction. A hearing was conducted to investigate

these claims and William Aronwald denied, with a straight face,

that he ever used any of the information acquired from

petitioner before the state grand jury (12). He gratuitously

volunteered that he already knew most of the information

supplied by petitioner to the state grand jury (12).

©Many other witnesses were questioned before the state grand jury subseqr -nt to

petitioner's appearance (54). Aronwald was asked whether they were call d after

petitioner (54, 55). It was shown that after petitioner testified these of xer wit-

nesses were called and questioned about the same subject matter (58). Counsel

unsuccessfully demanded the diaries and records taken from the New York

County District Attorney's office relating to this case on the grounds that they

directly related to the claims here and because the witness testified he did not use

any leads from these materials.

9

The Kastigar Rule

In Kastigar this Court demonstrated an awareness that

persons testifying under a grant of “use” immunity risk ambush

by other law enforcement groups lurking nearby. The Court,

therefore, placed a very heavy burden on prosecutors requiring

them to demonstrate that the immunized testimony was not used

in any way, and warned them in unmistakable language:

“This burden of proof, which we reaffirm as ap-

propriate, is not limited to negation of taint; rather, it

imposes on the prosecution the affirmative duty to prove

that the evidence it proposes to use is derived from a

legitimate source wholly independent of the compelled

testimony.” (406 U.S. at 460)

The Court was careful to point out that a person accorded

immunity and subsequently prosecuted “... is not dependent

for the preservation of his rights upon the integrity and good

faith of the prosecuting authorities.” (406 U.S. at 460.)7

‘This Court's disenchantment with government assurances of this nature is

probably based upon the history of undisclosed electronic surveillance wherein

times dozens of persons who work on a prosecution has somehow used the

protected testimony. Kastigar v. United States, 406 U.S. 441, 469 (1972),

dissenting opinion of Mr. Justice Marshall.

10

In direct defiance of the Kastigar rule, the government here

merely denied their use of petitioner’s compelled testimony and

asked the court to rely upon its good faith. ®

Here, the state prosecutor, who was privy to petitioner’s

compelled testimony and all the leads derived therefrom,

became the prosecutor who presented petitioner’s case to the

federal grand jury and convicted him in federal court. The very

reason he was assigned to petitioner’s case was his “familiarity”’

with the state prosecution.

-In Kastigar this Court stressed in tough-minded language as

follows:

**. .. total prohibition on use provides a comprehensive

safeguard, barring the use of compelled testimony as an

‘investigatory lead,’ and also barring the use of any

evidence obtained by focusing investigation on a witness

as a result of his compeiied disclosures.” (406 U.S. at

460; footnorc » mitted.)

Because the very same prosecutor who conducted the state

grand jury investigatiun undertook the federal prosecution,

there was a grave danger that his intimate understanding of

petitioner's grand jury testimony either consciously or un-

consciously influenced the “focusing” of the federal tax in-

vestigation. ?

8Mr. Justice Douglas and Mr. Justice Marshall expressed their grave misgivings

about the workability of this rule and predicted dire consequences flowing from

the rule's application. The melancholy forecast registered in their dissents has

all too soon been fulfilled. For clearly here the prosecution has run roughshod

over this Court's carefully constructed rule and left it in a shambles.

°F or instance, petitioner in 25 pages of grand jury testimony, was required to

describe in detail his duties while working for Goldman. After this thorough

investigation by Aronwald, one could reasonably expect that he had no fear that

petitioner would be able to explain what he did for the $200 a week received

from Goldman. Petitioner's testimony on that subject effectively foreclosed him

from iaking the stand.

[Foetnote continued on following page]

1]

The Second Circuit’s Misconstruction

of the Kastigar Rule

The Second Circuit has regrettably misconstrued the

Kastigar rule by stating, “[T]he previous grant of immunity

places upon the government a heavy burden of proving that the

indictment did not stem from the information given to the grand

jury.” (Appendix A at A-5.) Thus, their reliance upon this faulty

premise undermines that court's ultimate conclusion. For this

Court decreed in Kastigar that the compelled evidence must not

be used in any fashion. And the prosecution never produced any

evidence establishing an independent source of evidence to

support petitioner’s tax charges.

The Second Circyit’s suggestion that the government

“carrlied] the affirmative burden of proving a legitimate in-

dependent source of evidence” is both inaccurate and disap-

pointing. The government merely denied ever using petitioner’s

grand jury testimony.!0

[Footnote continued from preceding page]

Furthermore, petitioner was forced to admit before the state grand jury that he

had not been employed since he left Martin Goldman's company in April of the

previous year; that he had no bank accounts, no safe deposit boxes, nor any

bank accounts in his wife’s name; had no money ; and was living on the money

he had saved (GJ 944, 946). Thus Aronwald was virtually assured that

petitioner could not testify in his income tax trial. Other ways this information

was effectively used are innumerable. These are but a few of the most obvious

examples of how petitioner's testimony was effectively used to indirectly obtain

his conviction.

10The Court of Appeals’ unusual proposal that Aronwald’s asking of leading

questions verified his pre-existent knowledge of certain facts is ill-considered.

Any lawyer worth his salt will often ask leading questions in hope of obtaining an

answer favorable to his cause without knowledge of the answers sought. This is

particularly true in an investigatory setting. In any event, the asking of a

leading question hardly sustains the “heavy burden” of demonstrating an in-

dependent source of evidence for petitioner's tax indictment. And even if

Aronwald knew of some of the information supplied to the grand jury,

petitioner's certification of that evidence was surely valuable to the prosecution.

The Second Circuit's suggestion that petitioner was circumspect in answering

questions before the grand jury is irrelevant. Petitioner was asked and answered

278 questions before the state grand jury and was convicted of contempt for

refusing to answer only five. His declining to answer a number of those questions

was on the advice of counsel and based uyon constitutional grounds.

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Conflict in Circuits

The Second Circuit stands alone :n its serious modification of

this Court’s rugged rule in Kastigar. Both the Eighth and Fifth

Circuits have reached the opposite conclusion in identical cases.

In United States v. McDaniel, 482 F.2d 305 (8th Cir. 1973),

the defendant obtained transactional immunity under state law

and was subsequently prosecuted by federal authorities for

related matters. Prior to the federal indictment, the United

States Attorney read McDaniel’s state grand jury testimony. In

McDaniel the government produced voluminous FBI reports

showing a completely independent source of the evidence ad-

duced at McDaniel’s trial. However, the Eighth Circuit con-

cluded that those reports failed to satisfy the government's

heavy burden of proving that the prosecutor, who had read

McDaniel’s grand jury testimony, did not use it in some

significant way short of introducing the tainted evidence in his

trial.!! Our case is no different.

In United States v. Seiffert, 463 F.2d 1089 (5th Cir. 1972),

the defendant was convicted of misappropriating funds of a

federally-insured bank. The Fifth Circuit decided that the

prosecutor’s conclusory statements that no use was made of

defendant's immunized bankruptcy testimony was insufficient

to sustain the government's burden under Kastigar.!° Both the

Fifth and Eighth Circuits have adhered closely to the Kastigar

rule, whereas the Second Circuit has slipped its moorings and

has drifted dangerously far away from this constitutional

principle.

11 The Eighth Circuit stressed :

“... such use could conceivably include assistance in focusing the_in-

vestigation, deciding to initiate the prosecution, refusing to plea bargain.

interpreting evidence, planning cross-examination, and otherwise generally

planning trial strategy.” (482 F.2d at 311)

12See also United States v. Alter, 482 F.2d 1016 (9th Cir. 1973); In re Cardassi,

351 F. Supp. 1080 (D. Conn. 1972); and In re Minkoff, 349 F. Supp. 154

(D.R.Is. 1972), where courts dealing with different factual situations have

. adhered to the strong burden of proof imposed upon the government under

Kastigar.

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The only way the Kastigar rule can be effectively enforced

where the same prosecutor has participated in both federal and

state investigations is by complete exclusion. Thus in this case,

because of their failure to prove an independent source of

evidence the indictment must be dismissed. Otherwise, the

Kastigar rule is emasculated.'* Once it is established that the

same prosecutor has been made privy to the state and federal

investigations, and in particular, something as critical as grand

jury testimony, the hazards of unconscious use of this in-

formation are obvious. Understandably, the Court must distrust

a prosecutor’s wide-eyed assurances that he never used this

information, for such a statement defies reality.

It is a dreadful situation where a state prosecutor, after

forcing a person to tesuly before a stzte grand jury under a grant

of immunity concerning his tax liability, races across the street

and secures a federal indictment for income tax evasion. This

sad spectacle hardly instills a sense of confidence in the doctrine

of use immunity conceived by this Court to leave the witness

“... in substantially the same position as if the witness had

claimed the fifth amendment privilege.” If this Court gives in te

the government’s dismantling of the use immunity rule, there

will be no end to the debasement of that doctrine.

This case confirms our worst suspicions of how use immunity

grants can be abused by the government. The only protection

against this form of subversion lies in the strict adherence to the

well-formulated rule forged by this Court requiring the

government affirmatively to establish all independent sources of

evidence and not to use in any way the compelled testimony.

13s a practical matter, it would seem the only way to guarantee the government

did not profit in any way from the witness’ testimony would be to require that the

government be limited in a subsequent prosecution to evidence obtained prior to

the granting of immunity. Short of that, at a minimum, the transcript cf im-

munized testimony must not be available to the U.S. Attorney actually preparing

and prosecvting the case. See Standards for Exclusion in Immunity Cases After

Kastigar and Zicarelli, 82 Yale L.J. 171 (1972); The Scope of Testimonial

Immunity Under the Fifth Amendment; Kastigar v. United States, 6 Loyola L.

Rev. 350 (1973).

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14

Unless this Court reinforces the doctrine of use imriunity and

strikes down the Second Circuit’s decision, no witness will ever

be safe. F ox all these reasons the petition for certiorari should be

granted.

POINT IL

The petitioner was unconstitutionally

convicted of tax evasion for failure to report

the alleged receipt of stock never registered

in his name, never possessed by him, and

which was being held in escrow subject to

adverse claims.

Petitioner’s conviction raises the gravest constitutional doubts

because it imposes criminal tax liability on a person for the

receipt of stock which was held in trust for someone else. The

government’s evidence indisputably demonstrated that

petitioner never possessed or controlled the Yankee Plastics

scock and others continuously asserted adverse claims to those

very shares. The government was bound to prove beyond a

reasonable doubt: Aue

(1) that the stock was actually received by petitioner or

that he had control of it not subject to substantial

limitations or restrictions; and =.

(2) that it was received as compensation for services

performed in 1968.14

14The government completely failed to prove that petitioner performed any ser-

vices fer this stock. Proof showing Michael Catalano’s assistance in settling

certain minor labor grievances, for which he was paid a salary, could not be

imputed to petitioner. An¢ Terranova admitted that he did not know what

services petitioner supposedly performed for the stock (191). Since the stock

became income only if it was “compensation for services,” and since no services

were shown, the stock was not income even if it had been received. Internal

Revenue Code, §61(a)(1).

Internal Revenue Code, §61 (gross income defined) provides in pertinent part:

“Except as otherwise provided in this subtitle, gross income means all

income from whatever source derived, including (but not limited to) the

following items:

(1) Compensation for services, including fees, commission, and similar

items; ....”

ty Ow P RB EY STP TR REO TARY E ES

ed a

15

Throughout the taxable year of 1968, the stock was registered

in the name of a nominee for several persons other than

petitioner. Even Terranova conceded on direct examination that

the stock was being held in trust for Joseph Abrams.

After Lawrence Rosen, a “‘control person” who admitted that

the stock was his to do with as he pleased (1555), had a dispute

with Joseph Abrams in the Lewisburg Federal Penitentiary, the

stock was placed in “escrow or in trust” for Abrams until his

release from prison (1585). That view was confirmed by

Richard Bertoli (1163).15

Regrettably, the Court of Appeals erroneously applied a

theory of constructive receipt to uphold petitioner’s conviction.

However, the government's own reguiations make this position

untenable. !©

!Sin light of this compelling proof developed by the government, the trial court was

prompted to ask:

“I am troubled by something today, Mr. Aronwald. Is it the government's

position that when those 22,500 shares were acquired from Meyers in 1968

they were then under the dominion and control of Aniello Dellacroce?

Because that is what you have charged him with. [Prosecutor answered

yes.]. . . But you are bringing out all this stuff about an unsettled situation.

... What you are bringing out now is that the matter seems not to have

heen settled.”’ (1456-1457)

16Internal Revenue Code Regulation, §1.451-2(a) states the general rule as

follows:

“Income although not actually reduced to a taxpayer's possession is

constructively received by him in the taxable year during which it is

credited to his account, set apart for him, or otherwise made available so

that he may draw upon it at any time or so that he could have drawn upon it

during the taxable year if notice of intention towithdraw had been given.

However, income is not constructively received if the taxpayer's control of

its receipt is subject to substantial limitations or. restrictions.” (Emphasis

added.) -

This regulation is so clear that few cases have ever arisen since its adoption in

1957. Where an existing dispute prevents the taxpayer from having complete

control over the property, it cannot become income to him until the controversy

is resolved. Estate of Margaret Allen Fairbanks, 3 T.C. 260 (1944); Daniel H.

Deutsch, 26 T.C.M. 649 (1967). See also, Estate of Jacob M. Eisenberg, 6

T.C.M. 771 (1947); Big Lake Oil Company v. Commissioner, 95 F.2d 573 (

Cir. 1938).

16

In Commissioner v. Edwards Drilling Co., 95 F.2d 719, 720

(Sth Cir. 1938), the court stressed that: “strained construction

in administrative efforts to accrue income should be avoided.”

Here the government's uncontradicted proof showed :

(1) the stock was not registered in petitioner’s name;

(2) petitioner never possessed the stock ;

(3) from April 2 until August 2, 1968 the stock was

owned by Rosen and under his exclusive control ;

(4) from August 2, 1968 into 1969 the stock was held

by Goldman in trust for Joe Abrams;

(5S) in 1968 the stock could not be sold because of the

stop order that had been placed against it;

(6) petitioner was unable to exercise any control over

the stock.

Even Terranova’s testimony showed that all attempts to sell

the stock in 1968 proved unsuccessful because it was being held

in trust to settle Abrams’ claim. These steel-hardened facts

compel the conclusion that this stock certainly did not belong to

petitioner and, consequently, he was not responsible for its tax.!7

Whei . it is impossible to violate the substantive charge in an

indictment, any related conspiracy charge must also fail. !8

If this conviction is allowed to stand undisturbed, our judicial

history of the tax law will never recail any episode so critical in

character and so expansive in scale. Such a decision is bound to

carry implications and give direction far beyond the facts of this

case. For all these reasons the petition for certiorari should be

granted.

17 Had Aniello Dellacroce in 1969 consulted with the most able tax lawyer in New

York concerning his obligation to pay a tax on this stock being held in trust for

someone else, it is inconceivable that he would have been advised to report shis

stock as income.

18See Ingram v. United States, 360 U.S. 672 (1959); Lubin v. United States, 313

F.2d 419 (9th Cir. 1963); Ventimiglia v. United States, 242 F.2d 620 (4th Cir.

1957); O’Kelley v. United States, 116 F.2d 966 (8th Cir. 1941).

17

POINT III

The government's refusal to allow full

disclosure of facts needed to impeach the

prosecution’s chief witness denied petitioner

due process of law.

Throughout petitioner's trial there were many occasions when

the court stevd by the government’s defiance of defense

counsel's efforts to secure information critical to the im-

peachment of Frank Terranova — the only witness who in-

volved petitioner in these tax charges. At the close of

Terranova’s direct testimony, the government developed that he

was under indictment for accepting bribes as a government

procurement officer. E.eryone i: the courtroom, including the

trial judge, was stunned when the government asked Terranova

whether he was guilty of those charges. Terranova brazenly

replied that he was “not guilty!”!9 Consequently, defense

counsel could not avoid a full scale attack against the govern-

ment’s irresponsible effort to bolster their sole witness’

credibility. 2°

Each of the defense attempts to chtain information that

would have seriously, if not conclusively, disabled Terranova’s

19Terranova had been indicted by the United States Attonicy’s office in the

Southern District of New York fur unlawfully accepting bribes in the amount of

$30,000 as a GSA procurement officer (341).

20These efforts included :

(1) service of a subpoena upon the government to produce their file, is.

cluding the investigation of Terranova's criminal conduct;

(2) a demand and subpoena for the records of Jody Associates, a firm partly

owned by Terranova which received the $30,000 charged in the bribery

indictment;

(3) an attempt to cross-examine Terranova with an FBI statement con-

cerning his relationship with Dellacroce, in which he never mentioned any

meetings with Dellacroce at the Ravenite Club;

(4) a demand for surveillance logs maintained by Agent McGinley con-

cerning his observation of the Ravenite Club and persons meeting there.

18

credibility was frustrated by the government and the court.

Terranova’s credibility was the most important issue raging in

this trial, and the defense desperately needed all this evidence to

show petitioner’s complete lack of involvement in these charges.

When the prosecutor dramatically chose to have Terranova

assert his innocence before the jury, he assumed the risk that his

file would have to be disclosed under Brady v. Maryland, 378

U.S. 83 (1963). The government forfeited certain rights of non-

disclosure which ordinarily might have prevailed when they

- made this drastic choice.2! At the very least, the defense was

entitled to have the court examine the file and divulge that which

would have been helpful in cross-examination. Washington v.

_ Texas, 388 U.S. 14 (1967).?2

Until government prosecutors are taught that these tactics

will not be tolerated, no defendant is secure. If equal protection

of the law is to have any meaning at all, this petition should be

granted.

21Keeping in mind the government's astounding record for convictions in the

Southern District, we must assume that it had within its file ample evidence to

prove Terranova’s guilt beyond a reasonable doubt. Significantly, on Apri! 30,

1973, after petitioner's trial, the United States Attorney in charge of the

prosecution of Frank Terranova stated in open court to Judge Edelstein, ‘‘I

offered to in effect throw open the entire file of the government on this specific

case” to Mr. Lipson (Terranova's defense counsel) and he “has on numerous

occasions been down to my office to take advantage of that opportunity ... ."’

(United States v. Frank Terranova, S.D.N.Y., 71 Crim. 332; T-8) It is hard to

understand why the same courtesy was not extended to defense counsel here.

221n Washington the Court wrote:

“‘Just as an accused has the right to confront the prosecution's witnesses for

the purpose of challenging their testimony, he has the right to present his

own witnesses to establish a defense. This right is a fundamental element of

~~ due process of law.” (388 U.S. at 19)

—_—

eves HF

ROA PEARED TINY

19

This Court’s recent decision in Davis v. Alaska, US.

, 14 Cr.L. 3117, decided February 27, 1974, compels the

grant of this petition. In Davis the Court concluded that

petitioner was denied his right under the confrontation clause to

adequately cross-examine the prosecution’s chief witness. In

reversing Davis’ conviction the Court emphasized :

“‘Cross-examination is the principal means by which the

believability of a witness and the truth of his testimony

are tested. ... A more particular attack on the witness’

credibility is effected by means of cross-examination

directed toward revealing possible biases, prejudices, or

ulterior motives of the witness as they may relate directly

to issues or personalities in the case at hand.... We

have recognized that the exposure of a witness’

motivation in testifying is a proper and important

function of the constitutionally protected right of cross-

examination.” (14 Cr.L. at 3120)

This Court decided in Davis that, “... the State’s policy

’ interest in protecting the confidentiality of a juvenile offender's

record cannot require yic'ding of so vital a constitutional right as

the effective cross-examii: :tion for bias of an adverse witness.”

(14 Cr.L. at 3121.)

Our situation is the same. The guvernment’s interest in

keeping confidentisi their file containing the evidence of

Terranova’s criminality cannot be withheld in derogation of

petitioner's right of confrontation. This is particularly so when

ihe prosecution is instrumental in having the witness assert his

innocence. Surely the policy considerations present in Davis

were far more compelling than those urged by the government

here. Consequently, the petition for certiorari should be granted.

Respectfully submitted,

Herald Price Fahringer, Esq.

One Niagara Square

Buffalo, New York 14202

(716) 856-8400

Joseph Panzer, Esq.

305 Broadway

New York, New York 10007

(212) 962-2243

Counsel for Petitioner

Lipsitz, Green, Fahringer ’

Roll, Schuller & James

Of Counsel.

APPENDICES

LT RAS ee

A-l

Court of Appeals Opinion

UNITED STATES COURT OF APPEALS

For tHe Seconp Cimcurr

Nos. 199, 237, 303—September Term, 1973.

(Argued September 26,1973 Decided January 21, 1974.)

Docket Nos. 73-1559, 73-1984, 73-1985

-_--s

or

Unrtep States oF AMERICA,

Appellee,

—against—

Micwaet Catauano, Martix GoLpman, and

Aynretto Detacroce,

Defendants-Appellants.

Circuit Judges.

_—

Appeal from judgments of conviction for conspiring to

evade income taxes and, in the case of appellant Dellacroce,

for evading income taxes and for filing a false return,

entered in the United States District Court for the South-

ern District of New York, after a trial before Arnold

Bauman, Judge, and a jury.

Affirmed.

=

Hersert I. Hanpman, New York, N. Y., for Ap-

pellant Catalano.

Neat J. Hurwirz, New York, N. Y., for Appel-

lant Goldman.

A-2

Appendix A

Heravp Price Faurincer, Buffalo, N. Y. (Joseph

Panzer, New York, N. Y. of counsel), for

Appellant Dellacroce.

Surman Neman, Assistant United States Attor-

ney, New York, N. Y. (Paul J. Curran,

United States Attorney for the Southern

District of New York, New York, N. Y.,

Robert P. Walton, James E. Nesland, Mi-

chael B. Mukasey, Richard Wile, John W.

Nields, Jr., Assistant United States Attor-

neys, of counsel), for Appellee.

_

er

Moore, Circuit Judge:

Aniello Dellacroce, Michael Catalano and Martin Gold-

man appeal from judgments of conviction entered against

them in the United States District Court for the Southern

District of New York after a jury trial and from orders

denying motions for a new trial. The indictment con-

tained three counts. Count ONE charged a conspiracy

amongst the three defendants and certain non-defendant

co-conspirators to evade income taxes due from Dellacroce

to the United States for the calendar year 1968 (26 U.S.C.

§7001, 18 U.S.C. 4371). Count TWO charged Dellacroce

with filing a false tax return for that year (26 U.S.C.

§7201). Count THREE charged Dellacroce with making

and subscribing a false tax return wherein “wages, salaries,

tips, etc.” were stated as $10,400 whereas in fact and to

his knowledge they were $134,500 (26 U.S.C. §7206(1)).

All three defendants were convicted of conspiracy; Della-

eroce, in addition, was found guilty of false filing and

tax evasion.

Many trial errors are asserted by the defendants; many

overlap. To the extent that they are claimed to apply only

A-3

Appendix A

to one of the defendants, they will be considered as to

him alone.

The Conspiracy

The gist of the conspiracy to enable Dellacroce to de-

fraud the government of income taxes is that in 1968 Del-

lacroce allegedly received 22,500 shares of Yankee Plastics,

Ine. stock (valued at approximately $123,000) for services

rendered by Dellacroce and Catalano (1) to help Yankee

Plastics, Inc. acquire a company known as Mr. Hanger,

Ine. and (2) to insure “labor peace” for Mr. Hanger, Inc.

In order to avoid showing this stock as income to Della-

croce (and hence to evade a tax to him), devious means

were employed. The 22,500 shares were placed in the

name of a nominee, Preston Smith. The certificates rep-

resenting these shares were never in the physical posses-

sion of Dellacroce. Thus the government’s case is based

upon his dominion and control of the shares and his re-

sultant constructive possession.

To trace the physical custody of the 22,500 shares re-

quires the introduction of other persons, Rosen, Goldman,

Terranova and Catalazo.

Rosen and Goldman, using Preston Smith as a nominee,

purchased 15,000 shares of Mr. Hanger, Inc. which, upon

its merger with Yankee Plastics, became 22,500 shares of

that company’s stock. In the summer of 1968, Goldman

told Terranova, the government’s chief witness and through

whom these transactions became known, that the shares

were being held for Dellacroce in Smith’s name so that

Dellacroce would not have to report them as income. Gold-

man requested Terranova to replace Smith as nominee.

Accordingly, the single certificate for the 22,500 shares

in Smith’s name was cancelled and forty-five 500-share

certificates, issued in Smith’s name but endorsed by Smith

A-4

Appendix A

with a signature guarantee, were delivered by Goldman

to Terranova. The stock was now in negotiable form.

Goldman and Terranova then opened an account, still

using Smith’s name, with Francis I. duPont and Company

and deposited the 22,500 shares there.

Catalano enters the picture, according to Terranova’s

testimony, as an accomplice and employee of Dellacroce.

During the ensuing months, there were many meetings

between Goldman and Terranova on the one hand and

Dellacroce and Catalano on the other, at which the stock,

still in the brokerage account, was discussed. Dellacroce

was advised not to sell since it was thought that Yankee

Plastics was doing well. However, the stock was eventu-

ally removed from the duPont account and kept in offices

at 312 Fifth Avenue, maintained by a company operated

by Goldman and Terranova. In May 1969 they (Terra-

nova and Goldman) put 7,500 shares into an account with

First Hanover Corporation. In June 1969 4,000 shares

were sold, realizing some $21,000. The remaining 3,500

shares were delivered to Terranova. In November 1969

the balance of the 22,500 shares (37 certificates for 500

shares each) were delivered into the custody of a private

attorney, and in March 1971 they were released to Terra-

nova’s wife who, in turn, gave them to Goldman. The 37

certificates finally reappeared via Goldman’s attorney at

the trial, ostensibly from Goldman.

The theory of the government’s case is that Dellacroce

received the stock in 1968 in payment for services ren-

dered by him and his assistant, Catalano, to insure labor

“peace” and to aid in the merger of Mr. Hanger and

Yankee Plastics. Despite the many resting places of the

stock and the inferentially suspicious character of the

methods employed, the fundamental appellate question is

centered around the testimony that the stock was given

to Dellacroce for his services and was handled in such a

A-5

Appendix A

way as would enabie him to evade income taxes thereon.

There was much embellishing proof which would support

inferences to this effect but essentially the case rests

upon jury belief or disbelief in Terranova’s testimony.

It chose to believe. It also chose to believe the invelve-

ment of Goldman and Catalano. Each appellant, however,

raises particular points of alleged trial error which must

be considered separately.

Dellacroce

Dellacroce argues that in his previous appearance be-

fore a New York County grand jury he received trans-

actional immunity regarding events relating to the sub-

ject matter of the present indictment. This previous grant

of immunity places upon the government a heavy burden

of proving that the indictment did not stem from infor-

mation given to the grand jury. If this were not so, a

defendant’s Fifth Amendment rights would be consider-

ably abrogated, Kastigar v. United States, 406 U.S. 441

(1972). The problem is complicated in this case by the

fact that the County Assistant District Attorney who in-

terrogated Dellacroce before the grand jury transferred

from the County to the Federal prosecutor’s office and in

part presented this case to the Federal grand jury. In

this case, however, that burden was met. Dellacroce’s

testimony before the grand jury was circumspect in the

extreme; so much so that he was cited for contempt.

Further, the large bulk of the questions were of a lead-

ing nature from which it may be concluded that the prose-

cutor knew what the response would be. This conclusion

is buttressed by an affidavit of Goldman dated before the

grand jury hearings, covering the subject matter of several

of the questions.

A hearing on Dellacroce’s motion to dismiss the indict-

ment led the Court to conclude that nothing material had

Ee a ee DAES ES LEELA OTS AREER LON ORLA TS

A-6

Appendix A

been disclosed in Deilacroce’s County grand jury testimony

which provided the Federal prosecutor’s office with either”

information or leads. In keeping with the mandate of

Kastigar the proof, which included testimony by the former

County (and later Federal) prosecutor, not only negatived

any possibility of taint, but also carried the affirmative

burden of proving a legitimate, wholly independent source

of evidence. In the face of this showing Dellacroce would

have us hold that access to grand jury testimony ipso facto

prevents the government from carrying its burden under

Kastigar. This we decline to do. Neither Murphy v. Water-

front Commission, 378 U.S. 52 (1964), nor Kastigar v.

United States, 406 U.S. 441 (1972), purports to establish

such a peremptory rule. United States v. McDaniel, 482

F.2d 305 (8th Cir. 1973), relied upon by Dellacroce, is

clearly distinguishable. The defendant there, in his prior

testimony before the State grand jury, had poured forth

three volumes of self-incriminating testimony. The court

sensibly concluded that the United States Attorney who

read this testimony in its entirety could not wholly oblit-

erate it from his mind in his preparation and trial of the

federal case. Furthermore, unlike the present case, the

United States Attorney there made no attempt to show that

he had prior knowledge of the information revealed by the

grand jury testimony and his offer of F.B.I. reports as

proof of an independent source failed to satisfy the burden

of showing that he had not used the testimony in some sig-

nificant way short of introducing it. By way of contrast

the prosecutor here established that he had prior knowledge

of substantially all the information covered in the Della-

erece testimony, thus foreclosing the possibility that he

made “any use, direct or indirect, of the compelled testi-

mony and any information derived therefrom.” Kastigar

v. United States, 406 U.S. at 460. A review of the record

supports this conclusion. The Kastigar rule is aimed at

IA GE LS EE Oe OES : orem somes SR A ERS ERT AARP OR INR OER Be. A

aPmegt pens es

MSOC Sh hs

A-7

Appendix A

preventing the misuse of information gained under a grant

of immunity; it does not require information not gained

in this fashion to be discarded. The motion to dismiss the

indictment was properly denied.

Dellacroce next argues the question which to him “dom-

inates this appeal” (Dellacroce Br. p. 27). He states that

he “cannot be convicted of income tax evasion for failure

to report the alleged receipt of stock which was not regis-

tered in his name, which was never possessed by him, and

which was being held in escrow subject to adverse claims.”

He is, of course, correct that he is not taxable for income

that he never received. However, the test of receipt is not

the registering of the stock in one’s name. This contention

ignores the entire theory of conspiracy and of constructive

possession. Were Dellacroce’s contention correct, anyone

wishing to shelter income could have it paid to a nominee

and kept in the custody of another. Thus, it was for the

jury to decide whether he possessed it or not. Likewise, the

contention that the stock was subject to adverse claims,

sufficient to prevent his constructive possession, was one

properly submitted to the jury and decided by them.

Dellacroce further alleges that there was error in the

admission of a statement by Goldman which stated in part

that he knew Dellacroce, employed him, met with him at the

Ravenite Club, knew him to meet there with Catalano, and

knew the relationship between Dellacroce and Catalano.

It is contended that under the rule of Bruton v. United

States, 391 U.S. 123 (1968), this statement should have

been excluded. However, this argument disregards the fact

that independent evidence was presented to support each

factual proposition made by Goldman, linking Dellacroce

to the conspiracy. Bruton extends only to situations where

“the testimony concerning the complaining co-defendant is

clearly inculpatory . .. and (2) the testimony is vitally

Dea ete ee once _ ——

AB

Appendix A

important to the government’s case.” United Siates v. Cas-

sino, 467 F.2d 610, 623 (2d Cir. 1972), cert. denied, 410

U.S. 928 (1973). In this case the complained-of testimony

was merely repetitive of other evidence, and the careful

admonitions of the judge that the jurors consider the Gold-

man statement only against him makes any improper use

of the statement highly unlikely.

Dellacroce next contends that evidence concerning a

gambling trip allegedly made by him to Puerts Rico in

1968 under an assumed name was irrelevant to the present

case and thus improperly admitted. The government argued

that the evidence was proper in that it was probative of

Dellacroce’s intent to evade taxes, certainly an important

element of the charged offense and, on this basis, it was

admitted. A gambling “junket” usually has one of two

results—profit or loss. If profit were the result, an alias

would be useful to hide the gain from scrutiny by the

LR.S. Thus, it might well be that the use of an alias during

a gambling trip made in the year of the alleged tax evasion

bears on the intent to evade tax. Of course, there might

be several alternative reasons why Dellacroce may have

used an assumed name. His counsel was free to suggest

any of these or to offer evidence that Dellacroce did not

go to Puerto Rico at all in that year or that he did not do

so under an assumed name. However, the fact remains that

the use of an alias under the circumstances is relevant to

an intent to evade taxes although it is certainly far from

conclusive. The degree of relevancy required for admissi-

bility is one that generally is determined in the discretion

of the trial court—a discretion correctly employed here.

An allied argument raised by Dellacroce is that the

prejudicial implications of this evidence outweighs its

probative worth. It is stated that “[t]his condemning evi-

dence became a ‘damned spot’ on appellant’s case of which

ne ye et oe eed YG IG OI ELEY FL ~ ba

2

— a

ERP a | arama gerne SIR

A-9

Appendix A

he could not rid himself.” (Dellacroce Br. p. 42). Cer-

tainly, potential prejudice to the defendant is a factor to

be considered in weighing the pros and cons of admitting

a particular piece of evicence. For this reason evidence

of a prior crime may only be introduced in limited cir-

cumstances, C. McCormick, A Handbook of the Law of

Evidence, §157 (1954). In this case, however, the actions

of Dellacroce did not constitute a crime since he did not,

in fact, win any money. Thus, the trial judge was not

faced with the problem of a prior criminal act. This,

however, did not relieve him of his general duty to bal-

ance probative worth against potential prejudice. The

lengthy dialogue between judge and prosecutor (312a-319a)

concerning this bit of evidence, the instruction to the

jury at the time of its submission to them (936a), and

the charge to the jury on this matter (1701a) reveal the

careful consideration given to the possibility of prejudice.

Dellacroce contends that “. .. the prosecutor strategi-

cally waiting until the very end of the summation, lashed

out at the jury with his highly volatile evidence [the trip

to Puerto Rico], searing it into their minds.” (Dellacroce

Br. p. 40). Nonetheless, the probative worth of this evi-

dence, far from being “frivolous” as it was characterized

by appellant, was properly presented for jury considera-

tion. In general, it is for the trial judge to do the balanc-

ing required here and it cannot be said that his discretion

was misused.

Another issue raised is whether Dellacroce’s motion for

a new trial based on newly discovered evidence was prop-

erly dismissed without a hearing. This evidence consisted

of testimony suggesting that Dellacroce did not make the

trip to Puerto Rico in 1968. The judge, after learning

the nature of the evidence and its source, denied the mo-

tion without . hearing on the grounds that the evidence

was not newly discovered. Motions of this sort are not

PN FOGA! AOS TT Ol ae Oe WY YOO “Pree gR: ) REGEN A MRM OR INES

A-10

Appendix A

held in great favor. United States v. Costello, 255 F.2d

876 (2d Cir.), cert. denied, 357 U.S. 937 (1958). In light

of the facts in this case, there is no reason to believe

that the court erred.

Finally, Dellacroce contends that the OAS im-

properly withheld information that would have helped to

impeach Terranova, the government’s chief witness. The

information consisted of a government file on Terranova,

gathered in relation to an unconnected bribery indictment

against him, the records of Jody Associates, which also

related to this indictment, and the logs of surveillance

made in 1967 and 1968 on the Ravenite Club, a meeting

place of the alleged conspirators. In addition there is a

claim of error in regard to sustaining a government ob-

jection to a defense question put to Terranova in an at-

tempt to impeach him. To deal with the files relating to

the bribery indictment, the trial court, after a represen-

tation by the government that their file contained nothing

on the defendant’s guilt or innocence, and after its own

inspection of the corporate files which also revealed

nothing, denied the request for inspection. There is no

doubt that this decision was proper. The defense had

had a full opportunity to examine Terranova at length

concerning his alleged misdeeds. There was no abuse of

discretion in the judge’s preventing another case being

tried in his court as part of an attempt to impeach a

witness.

The surveillance logs, which were reqzested under 18

U.S.C. §3500, the Jencks Act, are related to the testimony

in this trial of the agent who prepared them. He testified

_ on his own recollection that the defendants frequented

the Ravenite Club. The defense wanted the logs in an at-

tempt to prove that Dellacroce did not attend the Raven-

ite Club on a particular occasion with Goldman, a meet-

ing testified to by Terranova. The judge denied the

Ng PE WE TIP LOPLI LONE APE BEL APE AINE SH ME ff

RRP ens: ep: oman im cegneymncwaCOrspome

A-11

Appendix A

request for inspection of these logs on the grounds that

they were not verbatim or substantially verbatim reports

of statements m.de by a witness as required by $3500.

The purpose of the Jencks Act was to provide the de-

fense with the means of impeaching a government wit-

ness by means of a prior inconsistent statement, United

States v. Aaron, 457 F.2d 855 (2d Cir. 1972), while not |

allowing an unrestrained search through government files.

The determination of whether a particular document is

within the ambit of §3500 is ordinarily one for the trial

court whose ruling should not be disturbed unless clearly

erroneous, Caiaday v. United States, 354 F.2d 849 (8th

Cir. 1966). In this instance, since the Agent did not testify

that Dellacroce was present at the time stated by Terra-

nova, the logs would be useless to impeach the Agent on

this point. Further, these documents were not used to re-

fresh the witness’s memory before his testimony. The

witness, in fact, admitted that he did not recall certain

matters that could be found in the logs. Thus, it may be

seen that these research surveillance logs are of the same

nature as the Agent’s diary as to the people he met with

which has been held to, be outside 63500 in Canaday v.

United States, 354 F.2d 849 (8th Cir. 1966). Therefore,

there was no error here.

With respect to the question put to Terranova as to

which the objection was sustained, Terranova had been

interviewed by an F.B.I. Agent on July 13, 1970. The

Agent had recorded in writing his version in summary

form of that interview (GX30 for identification). Terra-

nova, after reading the statement, still persisted in his

lack of recollection concerning the question being asked.

Thereupon, the cross-examiner asked:

“Mr. Terranova, I ask you this question and if you will,

please, answer it yes or no, if you can. You have just had

oceasion to read this F.B.I. report dated the 13th of July,

A-12

Appendix A

1970. Isn’t it true that nowhere in this statement do you

mention anything about meetings at the Ravenite Club on

Mulberry Street with Mr. Dellacroce?” The government’s

objection to the question was sustained. The report was

not in evidence. There was no foundation laid to show that

Terranova had told the Agent about any meetings or that

the Agent had recorded verbatim the interview. And the

Agent, himself, could have been asked whether the report

recorded all that was said. Furthermore, Dellacroce’s at-

torney was given full opportunity to ask Terranova whether

he had told the Agent about the meetings, of which oppor-

tunity he took advantage by asking specifically about three

meetings inside the Ravenite Club, as follows:

“T ask you, Mr. Terranova, on July 13, 1970, when you

spoke with Agent Hughes in the parking lot in Hicksville

on that day, on July 13 for about 20 minutes, you did not

tell him, did you, anything about three meetings inside

the Ravenite Club with Mr. Dellacroce? Yes or no.”

The answer was, “I sincerely don’t recall, sir.”

Dellacroce suffered no prejudice from this incident.

Goldman —

Turning now to the arguments of appellant Goldman, it

is contended that testimony given by a government witness

to the effect that Goldman had committed a prior similar

act to the one charge was improperly admitted. William

Stone, the witness in question, testified that in 1965 he had

been hired by Goldman for the sum of $200,000, payable in

stock, to handle a labor dispute between the Teamster’s

Union and one of Goldman’s companies. Shortly after that

conversation, in a meeting with Catalano and Goldman,

Stone was told that Catalano would handle the matter and

that Stone should not pursue it further, The judge in-

structed the jury that this testimony could be considered

a a a ee - <TR eS Ry a OEP see te

A-13

Appendix A

only as probative of Goldman’s intent to censpire. Gold-

man contends that this evidence was irrelevant to the case

at hand in that there was no labor dispute at all at Yankee

Plastics, and that the testimony of Stone in no way sug-

gests that Goldman knew of any intent to help Dellacroce

or Catalano evade taxes. It is argued further that this evi-

dence was highly prejudicial in that it revealed a prior

criminal act. The governmest’s response chiefly lies in

the contention that this evidence had a direct bearing on

whether Goldman intended the Yankee Plastics stock for

Dellacroce and not for the various alternative purposes

suggested by the appellants. Thus, it could well be argued

the transfer would constitute income to Dellacroce and the

various machinations with the stock could be taken as show-

ing Goldman’s knowledge of, and participation in, Della-

croce’s attempt to evade taxes. On this theory, the evi-

dence was properly admitted, United States v. Glasser,

442 F.2d 994 (2d Cir.), cert. denied, 404 U.S. 854 (1971).

Goldman further contends that the prosecutor failed to

disclose to his attorney evidence allegedly suggesting that

the witness Stone had been paid for his testimony. The

evidence consisted of tapes of several phone conversations

between Stone and a government agent and one conversa-

tion between Stone and the prosecutor. These tapes came

to light when Stone offered to sell them to Goldman for

use in his efforts to reverse his conviction. It would serve

+ no purpose to set out the contents of the tapes. It is suffi-

cient to say that the judge below found that there was no

merit in Goldman’s claims and that such a finding is not

unwholly supported by the evidence, United States v. Kahn,

472 ¥.2d 272, 287 (2d Cir.) cert. denied, —— U.S. ——

(1973). Sertainly there is no satisfactory proof that the

government deliberately suppressed this evidence that

would merit tae application of a less stringent rule, Id. In

5 se

aes .

Saree cence oneness eraeer

A-14

Appendix A

light of the evidence presented, it is reasonable to conclude,

as did the trial court, that Stone, by offering the tapes, was

attempting to “shake down” Goldman for their price.

Goldman argues that he was denied a fair trial because

of prejudicial publicity during the trial. Certainly the trial

did gain some notoriety. However, a reading of the record

reveals the great care of the judge in insuring that the

jurors were not exposed to such publicity. There was no

evidence that any juror saw any publicity or commentary

on the case which affected his or her judgment, unlike the

eases of Sheppard v. Maxwell, 384 U.S. 333 (1966) and

United States v. Rattenni, —— F.2d —~— (2d Cir. 1973)

cited by appellant. Appellant’s reference to Estes v. Tezas,

381 U.S. 532 (1965) is equally inapposite.

Goldman’s fourth contention is that there was insufficient

evidence of, and an incorrect charge on, the issue of his

knowledge and intent. As to the issue of proof there was

direct testimony on this point by Terranova. If the jury

chose to believe him, they certainly had the right to do so,

The charge was equally proper. The court stated in part:

To find a defendant guilty of conspiracy you must find

that he knowingly and willfully joined the conspiracy

with the specific intent and purpose of furthering its

objective.

This read in light of the nature of the conspiracy was suffi-

cient to apprise the jurors uf the elements of the offense.

Goldman’s fifth allegation of error centers around the

court’s refusal to charge the jury that they must find, be-

yond a reasonable doubt, that an overt act, alleged in the

indictment, occurred in the Southern District of New York.

However, venue need not be proven beyond a reasonable

doubt, United States v. Trenary, 473 F.2d 680, 682 (9th Cir.

1973) ; see also United States v. Brawer, 450 F.2d 799, 804

mas - eR ET APS EE I I AO ELT ETI ve

A-15

Appendix A

nll (2d Cir. 1971), cert. denied, 405 U.S. (1972). And in

the present record there is abundant evidence from which

a jury could find proper venue in the Southern District.

Thus, thie contention of Goldman’s is also without merit.

Finally, Go!dman contends that the government violated

the rule of Brady v. Maryland, 373 U.S. 83 (1963) in that it

failed to reveal an alleged deal with Terranova. This point

has been covered in the discussion of the final argument

raised by Dellacroce and nothing more is necessary here

than to reaffirm the propriety of the judge’s action.

Catalano

Turning finally to the contentions of appellant Catalano

who adopts all the arguments considered above and spe-

cifically reiterates and stresses the second argument raised

by Goldman concerning alleged prosecutorial misconduct,

for the reasons above stated we find that they do not consti-

tute reversible error.

In conclusion, each argument raised by the respective ap-

pellants has been considered and found to be without merit.

The judgment and the orders appealed from are affirmed.

=

Oakes, Circuit Judge (concurring) :

I concur in the result.

Reet,

AP tren sen eae

B-1

APPENDIX B

Statutes Involved

Title 18 United States Code, § 371. Conspiracy.

If two or more persons conspire either to commit any

offense against the United States, or to defraud the

United States, or any agency thereof in any manner or

for any purpose, and one or more of such persons do any

act to effect the object of the conspiracy, each shall be

fined not more than $19,000, or imprisoned not more

than five years, or both.

If, however, the offense, the commission of which is

the object of the conspiracy, is a misdemeanor only, the

punishment for such conspiracy shall not exceed the

maximum punishment provided for such misdemeanor.

Title 26 United States Code, § 7201. Attempt to evade or defeat

tax.

Any person who willfully attempts in any manner to

evade or defeat any tax imposed by this title or the

payment thereof shall, in addition to other penalties

provided by law, be guilty of a felony and, upon con-

viction thereof, shall be fined not more than $10,000, or

imprisoned not more than 5 years, or both, together with

the costs of prosecution.

Title 26 United States Code, § 7206(1). Fraud and false

statements.

Any person who —

(1) Declaration under penalties of perjury. —

Willfully makes and subscribes any return, statement, or

other document, which contain or is verified by a

written declaration that it is made under the penalties of

perjury, and which he does not believe to be true and

correct as to every material matter ;

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