Opposition Brief — Tillem v. New Jersey

Citas one

TABLE OF CONTENTS

PAGE

CouNTER-S SATEMENT OF THE CASE 1

CouNTER-STATEMENT OF FACTs ... 3

LecaL ArGUMENT—N.J.S.A. 2A:119A-2 is neither

vague nor repugnant to the Due Process Clause of

the Fourteenth Amendment to the United States

Constitution 11

ConcLusIon 15

Cases Cited

Connally v. General Construction Co., Ine., 269 U. S.

385 (1926) 12

Giaccio v. Pennsylvania, 382 U. 8. 399 (1966)... 12

Lanzetta v. New Jersey, 306 U. S. 451 (1929)... 12-15

McGowan v. Maryland, 366 U. S. 420 (1961)... 12,15

State v. Lair, 62 N. J. 388, 301 A. 2d 748 (1973).......... 13

State v. Monteleone, 36 N. J. 93, 175 A. 2d 207 (1961) 13

State v. Moretti, 52 N. J. 182, 244 A. 2d 499 (1968)... 13

State v. Tillem, 127 N. J. Super. 421, 317 A. 2d 738

(App. Div. 1974) 2,14

United States Constitution Cited

Fourteenth Amendment 1l

Statutes Cited

N.J.S.A. 2A:119A-1 (New Jersey Loan Sharking

Act) 1, 2, 11, 14

N.J.S.A. 2A :119A-3 1, 11,14

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IN THE

Supreme Court of the United States

Octoser Term, 1974

No. 74-60

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GERALD TILLEM,

Petitioner,

vs.

STATE OF NEW JERSEY,

Respondent.

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

Counter-Statement of the Case

in late November or early December 1972, the State

Grand Jury returned Indictment No. SGJ 9-72-10A charg-

ing the defendant, Gerald Tillem, in eight separate counts

with violations of the New Jersey Loan Sharking Act,

N.J.S.A. 2A:119A-1 et seq. Count One of the indictment

charged the defendant with engaging in the business of

making usurious loans in violation of N.J.S.A. 2A:119A-3.

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Counts Two through Eight charged the defendant with

making seven separate loans with an interest rate in ex-

cess of 50% per annum in violation of N.J.S.A. 2A:119A-1.

On December 20, 1972, defendant entered a plea of not

guilty to the charges.

On May 2, 1973, the trial of this indictment was com-

menced before the Honorable Patrick J. McGann, Jr.,

J.S.C., and a jury. On May 3, 1973, Judge McGann de-

clared a mistrial when the defense counsel, Robert I.

Ansell, learned that his partner had represented a prose-

cution witness in a bankruptcy proceeding.

The trial of the indictment was re-listed for May 21,

1973 in order to give defendant a chance to engage new

counsel. Present counsel, Robert A. Coogan, represented

defendant at his trial on May 21, 22, and 23, 1973 before

Judge McGann and a jury.

The jury returned verdicts of guilty as charged on

all eight counts of the indictment. On June 8, 1973, Judge

McGann sentenced defendant to the New Jersey State

Prison for a term of not less than two nor more than three

years on each of Counts Two thru Eight, and not less

than ten nor more than fifteen years on Count One. All

sentences were to run consecutively to each other (Dal0,

11). On the sentence date defendant filed his Notice of

Appeal from the conviction and sentence (Dal2).

On appeal to the Appellate Division of the Superior

Court the convictions for the individual loans were held

to be lesser included offenses of the engaging in the busi-

ness Offense. Thus, the convictions on the individual loans

were reversed and the sentences imposed thereon were

vacated. State v. Tillem, 127 N. J. Super. 421, 317 A. 2d

738 (App. Div. 1974).

On June 18, 1974, the Supreme Court of New Jersey

denied the defendant’s Petition for Certification. On July

3

29, 1974, defendant’s application for a stay in the execu-

tion of his sentence pending the outcome of his petition

for a writ of certiorari was denied by Justice William

J. Brennan, Jr. Defendant’s Petition for Certiorari was

filed on August 3, 1974.

Counter-Statement of Facts

The State introduced four witnesses all of whom testi-

fied that the defendant had loaned them money on very

similar terms and under very similar conditions. Richard

Grabowski testified that in March 1970 he was under heavy

financial pressure and “voiced it around . . . that he was in

need of money.” (T30-17 to 25). One day a man whom

Grabowski had never seen before entered the liquor store

where Grabowski worked, asked for Grabowski by name

and said that he heard Grabowski needed $500 (T31-20

to 32-4). Grabowski identified the defendant, Tillem, as

the man who came to Town Liquors and offered to lend

him $500 (T31-8 to 24). The remainder of their con-

versation concerned the terms of the loan (T32-17 to 20).

The $500 had to be repaid in one lump sum (T33-3 to 9),

and the interest was to be $35 per week to be paid every

week until the principal was repaid (T33-3 to 9). Gra-

bowski accepted these terms and was given the $500 that

same day (T33-10 to 19). The defendant called himself

“Tommy” (133-24 to 34-3). The witness made his first

interest payment the following day in cash at Town Liquors

(T34-12 to 23). After he had paid for two weeks at

Town Liquors (T35-6 to 8), the defendant asked him to

drop the money off at Vinnie’s Luncheonette on Broadway

in Long Branch (T35-9 to 14). Grabowski was instructed to

put the money in an envelope and put the name “Frankie”

on the outside of the envelope (T35-15 to 20). Grabowski

made eight or ten payments at Vinnie’s Luncheonette to

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a short, sandy haired man whom he assumed was Vinnie

(T36-6 to 11). The only other person he normally saw

at the luncheonette was a red-haired woman (T36-23 to

25). He paid approximately $350 to $400 in interest on

those ten or twelve payments (T38-10 to 15). In June

of 1972 Grabowksi repaid the entire principal by dropping

the money off in a plain envelope at Vinnie’s Luncheonette

(T38-16 to 39-34; 47-11 to 14). After refreshing his

memory by referring to a previous statement, marked

S-1 for identification, Grabowski testified that defendant

told him that he had other customers (T41-14 to 42-1).

Grabowski never pledged anything or signed anything for

the loan (T42-2 to 7). He was not acquainted with Martin,

Latona, or Schaaff, the other State’s witnesses (T42-8 to _

14).

As its next witness, the State called Vincent Cannella,

the owner of Vinnie’s Luncheonette (T55-21 to 56-3). Can-

nella admitted that his luncheonette was in operation in

the spring and summer of 1970 (T56-4 to 8), and that the

defendant was his nephew through marriage (T56-12 to

14). The defendant told him that somebody was going to

drop something off at his luncheonette, and asked him to

hold it for him (T56-17 to 57-7). Defendant asked Can-

nella to do him this favor in the spring and summer of

1970 but he could not remember the exact date (T56-17 to

18, T57-13 to 15). A day or two after Tillem asked the

witness to do him this favor a man came in with an en-

velope (T58-20 to 59-3). Cannella put the envelope under

the counter and held it until the defendant came in (T59-

6 to 18). This situation repeated itself “about seven or

eight times, maybe nine.” (T59-19 to 22). He never gave

the envelopes to anyone other than the defendant. He did

not think that there was ever an occasion where the de-

fendant failed to pick up an envelupe that had been de-

livered for him (T60-20 to 22). The witness could not

5

identify the man who dropped off the envelope (T62-15 to

17).

Thomas Martin, a stock broker with the firm of Fahne-

stock and Company, testified that he asked Donald Latona,

an associate of his whom he knew had a loan outstanding,

to arrange a loan for him also (T68-13 to 19, 69-9 to 22).

A meeting was arranged with Martin, Latona, and defend-

ant in the parking lot near Fahnestock (T69-3 to 8, 23 to

25). Martin then identified the defendant in open court

(T68-20 to 69-2). The purpose of the meeting was to dis-

cuss the arrangements for a $2000 loan. The interest pay-

ments on principal were to be $5 per $100 per week with

the interest being paid once a week (T70-13 to 18). Thus,

Martin’s interest payment was $100 a week. There was

no discussion as to how the principal was to be repaid

(T70-2 to 8). Martin was contacted about three days later

by telephone (T71-9 to 18). The same evening that he re-

ceived the call from Tillem, he met the defendant in the

parking lot outside Falnestock and received the $2000

(171-19 to 72-16). That meeting took place on a Monday

night (T72-3), and the first interest payment was due that

Friday (172-20 to 25). Interest payments were to be

made in cash at the same parking lot where the two prior

meetings had occurred (T73-1 to 6). Martin made an in-

terest payment of $100 that Friday (T73-7 to 14). The

interest was delivered by Martin to Tillem usually at the

same location (T74-1 to 8). The loan occurred in August

of 1971 and Martin paid approximately $1600 in interest

on the loan (T74-9 to 22). The principal was repaid in

early January 1972 (174-23 to 75-4). Martin paid $3600

on the original $2000 loan (T75-5 to 7).

On a few occasions Martin was instructed to leave his

interest payments at Little Silver Pizza instead of at the

parking lot (T75-8 to 12). These instructions were given

to him by Tillem. He was instructed to put the money in

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an envelope, write his own name on it, the defendant’s

name and Icave it with “Albie” (T75-13 to 18). This hap-

pened two or three times (T75-22 to 25). The $2000 re-

payment of principal was also made at Little Silver Pizza

(T76-13 to 20). When Martin made the $2000 payment,

Albie was not’ there. The man working at the pizza place

asked if the envelope was for Gerry. Martin answered

that it was (T76-7 to 10).

This loan was repaid in January 1972. In February,

Martin again approached Tillem about a loan (T77-9 to

13). Martin asked for a $1000 loan and Tillem said he

would let him know (T77-14 to 18). Later, defendant con-

tacted Martin and they met in the parking lot near Fahne-

stock (T77-9 to 25). At this meeting Martin asked the de-

fendant for $2000, $1000 for himself and $1000 for Latona

(T78-1 to 6). The loan was made in February 1972 with

the same terms as the prior loan (T78-12 to 21). The in-

terest payments were made in the same way, but now the

loan was being shared by Martin and Latona (T78-22 to

79-3, 79-11 to 15). As in the prior loan there was never

any pledge, note, promise, or even any discussion about

what recourse defendant would have should the borrowers

default (T76-25 to 77-8, 79-16 to 20). About 12 interest

payments were made on this loan, the last one in May

1972. At the time of the trial the entire principal was

still due and owing (T79-21 to 80-9, 82-12 to 18). At this

point Martin was contacted by Detective Castellano of the

New Jersey State Police (TS80-10 to 15). Tillem, aware of

this fact, contacted Martin and told him that some other

way to make the payments would have to be arranged

“because the heat was on and he (Tillem) knew that there

was some pressure.” (T81-4 to 10).

After this conversation with Tillem, Martin made three

more interest payments of $100 each, all of which sud-

denly applied to the principal, thus reducing the principal

to $1700 (TS81-16 to 82-1). Interest payments had never

before in Martin’s dealings with Tillem been applied to

principal (82-2 to 5). Tillem contacted Martin several

times about making payments on the principal, but Mar-

tin made no payments (T83-4 to 12).

The State called Jimmy Lee Boughten as its next wit-

ness. Boughten testified that he was employed at the

Little Silver Pizzeria in Little Silver, New Jersey in 1971

(T96-7 to 16). The witness stated that he knew the de-

fendant from working at the pizzeria and identified him

in open court (T97-2 to 7). During November or Decem-

ber 1971, various individuals came into the Little Silver

Pizzeria and left envelopes with “Albie” for the defend-

ant (197-14 to 98-15). The envelopes had the name Gerry

written across the front (T98-17 to 19). Some of the en-

velopes had the name Tom in one corner of the envelope

(T99-1 to 7). He was familiar with the people who left

these envelopes for the defendant and they were separate

individuals (T99-20 to 24). One of the individuals was

named Tom and the other Art (T100-3 to 4). Boughten

knew that there was money in the envelopes because de-

fendant, whose voice he recognized, called the store and

asked him if there was any money for him. Boughten an-

swered that there was just an envelope and Tillem re-

sponded, “Well, that’s it. I'll be in later to pick it up.”

(1101-2 to 5, 101-15 to 102-15). Tillem was the only one

who picked up the envelopes and to the best of the wit-

ness’ recollection he picked up every single envelope that

was left at the store (T102-22 to 103-2).

The State called Harold Schaaff as its next witness.

Schaaff testified that in February 1970 he operated a

flower shop at 1568 Broadway, Long Branch (T112-11 to

113-4). Ife was in need of operating capital for his busi-

ness and contacted the defendant to arrange a loan in

March 1970 (T113-5 to 1% 21 to 23). Schaaff borrowed

8

$500 with a $25 per week interest payment which did not

reduce the balance of the principal (T115-6 to 21). The

interest payments were made to the defendant at Schaaff’s

store (T116-22 to 116-8). In November 1970, Schaaff again

asked for a $500 loan with the $500 prinicpal of the first

loan still outstanding (T116-19 to 117-14). The interest

payments on the second loan were the same as the first,

with the result that Schaaff paid $50 per week in interest

payments from November 1970 on (T117-15 to 118-1). In

March of 1971, Schaaff requested a third $500 loan (T118-

8 to 14). Tillem made this loan also, but the interest pay-

ments were $30 a week instead of $25. Thus, Schaaff was

paying $80 per week in interest on the three loans with

$1500 in principal still due and owing (T118-21 to 119-15).

The last interest payment that Schaaff made was in May

1972.

The witness calculated that he made 110 interest pay-

ments on the first loan (T120-12 to 17), for a total of

$2750 (T121-2 to 5). He made 72 interest payments on

the second loan which amounted to $1800 total interest

(T121-6 to 13). He made 22 payments on the third loan

for a total of $1500 in interest (T121-14 to 21). Schaaff

had not repaid any of the principal on any of the three

loans (T122-4 to 6). He was contacted by Detective Cas-

tellano of the New Jersey State Police in May of 1972

(T122-7 to 14). The witness told defendant about his

meeting with Castellano (T122-15 to 18), and defendant

told him that he realized he was under a lot of pressure

and he wouldn’t have to pay any money now (T122-

19 to 22). The defendant also told Schaaff that if he was

questioned he should say that he had never borrowed any

money from the defendant (T123-4 to 8, 21-24). Schaaff

made no payments of principal or interest after May 1972

(1123-25 to 124-5). S-2 for identification was a journal

identified by the witness as his notes on his interest pay-

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ments (1124-15 to 125-1). He then read S-2 to the jury

(T125-8 to 127-12). Prior to these proceedings Schaaff

had never met Latona, Grabowski, or Martin (T127-17

to 128-1). Schaaff never put up any collateral to secure

the loans (T128-6 to 9).

Detective Raymond Castellano of the New Jersey State

Police testified that in May and June 1971 he conducted a

surveillance of the defendant. During the course of that

surveillance he took a series of photographs of defend-

ant’s meetings with Donald Latona (T145-4 to 146-20).

These photographs were admtited into evidence. In May

1972 he conducted a surveillance of the parking lot ad-

jacent to Fahnestock and Company in Red Bank, New

Jersey (T148-19 to 149-5). At that time Castellano saw

Latona leave the brokerage house and meet defendant in

the parking lot (T149-6 to 11).

As its next witness the State called Donald Latona. ;

Latona testified that he met the defendant in the summer -

of 1971 and in late May 1971 asked him for a loan (T160-

17 to 24). Tillem told Latona that he would let him

know about the loan in a week. At the end of a week

the defendant came back and loaned Latona the $4000 he

had requested (T161-3 to 10). The terms of the loan

were $50 of interest per $1000 of principal per week.

Thus, Latona paid $200 a week in interest (T161-17 to

22). The interest payments did not reduce the principal

(1161-25 to 162-1). The loan was incurred in, the first

week of June 1971 and his interest payments were made

once a week on Friday (T162-2 to 15). Latona made

six or seven months of the $200 interest payments (T163- “

2 to 9). No weekly interest payment was ever less than f

$200 (1163-18 to 19). He paid back the $4000 in January

or February 1972 (1163-22 to 25). On a few occasions

Latona left envelopes addressed to Tiilem at the Little

Silver Pizzeria in Little Silver, New Jersey (T164-11 to

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Latona testified that he introduced Martin to the de-

fendant at Martin’s request (T165-2 to 17). Martin

wanted to meet Tillem because he needed some money

(T166-2 to 8). At times Latona made interest payments

for Martin to Tillem. In February 1972 Martin contac-

ted Latona again and said that he was going to borrow

another $1000 from the defendant. Latona asked Mar-

tin to see if he could get another $1000 for him also

(T166-7 to 167-1). Martin did get the $2000 and both

Martin and Latona paid $50 a week interest on that loan

(T167-4 to 12). Latona made about 14 or 15 weeks of

interest payments on the second loan (T168-1 to 4). In

May of 1972 Latona was contacted by Detective Castel-

lano of the New Jersey State Police (T168-5 to 9). On

the same day that Latona saw Detective Castellano he

also saw the defendant in the parking lot next to Fahne-

stock (T168-16 to 25). Two days later the detective re-

turned to Fahnestock to interview Latona (T169-17 to

23). Tillem wanted to know what was said at that inter-

view and any subsequent interviews (T169-24 to 170).

About two weeks later the defendant informed Latona

and Martin that they no longer had to pay any interest

on their loans; every payment became a reduction of

principal (T170-10 to 22). Neither Martin nor Latona

ever paid off their loans (T170-23 to 171-1). Latona

never signed a note, or pledged any security against de-

fault on either loan (T171-7 to 16).

The State then introduced Leon Wojna, an accountant

employed by the State of New Jersey, as an expert wit-

ness (T185-14 to 186-8). Wojna testified in answer to a

hypothetical question that where $500 was loaned for a

period of ten weeks with the debtor paying interest in

the amount of $350, the rate of interest was 364 per cent

(T190-1 to 15). Where $3000 was loaned for 16 wecks

with an interest payment of $1600, the rate of interest

1l

was 268 per cent (190-16 to 191-1). On a loan of $2000

for 12 weeks, with an interest payment of $1200, the rate

of interest was 260 per cent (T191-12 to 15). On a loan

of $500 with a time period of 72 weeks, and a total inter-

est payment of $1800, the rate of interest was 260 per

cent (T191-19 to 21). On a loan of $500 for 52 weeks,

with interest of $1560, the rate of interest was 312 per

cent (T191-22 to 25). On a loan of $4000 for a period

of 28 weeks with the total payment of $5600, the rate of

interest was 260 per cent (T192-1 to 4).

At the conclusion of Wojna’s testimony the State rested

its case (T206-8). The defense rested its case without

calling any witnesses (T219-9 to 11).

LEGAL ARGUMENT

N.J.S.A. 2A:119A-3 is neither vague nor repugnant

to the Due Process Clause of the Fourteenth Amend-

ment to the United States Constitution.

Defendant argues, as he did at trial and in the appel-

late courts, that the language of N.J.S.A. 2A:119A-3 is

so unconstitutionally vague as to be in violation of the

Due Process Clause of the Fourteenth Amendment.

N.J.S.A. 2A:119A-3 reads as follows:

“Any person who engages in the business of mak-

ing loans or forebearances prohibited by section 1

of this act, or who conspires so to do, shall be

guilty of a high misdemeanor and shall be punished

by a fine of not more than $10,000.00, or by imprison-

ment for not more than 25 years, or both.”

N.J.S.A. 2A:119A-1, incorporated by reference in the

above-quoted statute, reads as follows:

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12

“Any person who, not being authorized or permitted

by law so to do, charges, takes or receives any

money, property or other thing of value as in-

terest on the loan or forbearance of any money

or other property at a rate exceeding 50% per

annum or the equivalent rate for a longer or shorter

period, is guilty of a misdemeanor and shall be

punished by a fine of not more than $5,000.00 or by

imprisonment for not more than 5 years, or both.”

Defendant argues that the act does not provide a defini-

tion for “engaging in the business” of making the pro-

hibited loans and is therefore unconstitutional. The State

believes that this contention is without merit.

It is true that no definition of “engaging in the busi-

ness” appears in the statute itself. However, that failure

is not dispositive of the issue raised herein. It is well

settled that the language of the statute “must be sufficiently

explicit to inform those who are subject to it what con-

duet on their part will render them liable to its penalties.”

Connally v. General Construction Co., Inc., 269 U.S. 385,

391 (1926). “(A) statute which either forbids or requires

the doing of an act in terms so vague that men of com-

mon intelligence must necessarily guess at its meaning

and differ as to its application” violates the Due Process

Clause. Jd. The crime, and the elements constituing it,

must be so clearly expressed that the ordinary person

can intelligently choose, in advance, what course it is

lawful for him to pursue. /d. at 393. No one may be

required at peril of life, liberty or property to specu-

late as to the meaning of penal statutes. Lanzetta v.

New Jersey, 306 U. S. 451, 453 (1929). This rule has

been reiterated time and time again in this Court and

in the New Jersey Supreme Court. See especially, Giaccio

v. Pennsylvania, 382 U.S. 399 (1966); WeGowan v. Mary-

13

land, 366 U. S. 420 (1961) ; Lanzetta v. New Jersey, supra;

State v. Lair, 62 N. J. 388, 301 A. 2d 748 (1973); State

v. Moretti, 52 N. J. 182, 244 A. 2d 499 (1968); State v.

Monteleone, 36 N. J. 93, 175 A. 2d 207 (1961). The State

submits that the language of N.J.S.A. 2A:119A-3 does not

run afoul of this rule.

In support of its argument that the language of the statute

is clear, witness the following excerpt of the trial court’s

charge to the jury:

“Now, what does the statute mean by someone

who engages in the business of making loans? What

do we mean by business? Well, business as used

in the statute pertains in a very broad sense to all

gainful activity. A business could be called occu-

pation or work of some sort in which a person is

engaged on a regular basis.

If a person engages in a certain type of transac-

tion once and that’s all, you certainly wouldn’t con-

sider that person to be in the business. If, how-

ever, that type of conduct is repeated to the extent

that there is a certain regularity to that type of

conduct, then it could be inferred properly that

that person was in that business. It’s in that sense

that we use the term business that I have just

read to you.” (T288-25 to 290-6).

The appellate court quoted this portion of the charge with

approval and added a similar explanation.

“Giving the statutory words their common, ordi-

nary, common sense construction, they can be de-

fined as meaning one who carries on an enterprise,

a business or a profession for profit or improve-

ment over a period of time, as distinguished from

—

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14

one who commits or occasionally participates in a

single act or transaction.” State v. Tillem, 127 N. J.

Super. at 425.

Thus, the trial court, the appellate court and the jury all

agreed that the meaning of the allegedly vague phrase was

abundantly clear.

The facts of the instant case provide an even more com-

pelling argument that defendant was not misled by the

language of the statute. The State proved beyond a doubt

that defendant made seven separate loans to four indi-

viduals over a period of approximately two years. For

each loan the debtor was required to make a weekly in-

terest payment which on oceasion involved a mecting with

the defendant. This continuous ongoing activity involving

a substantial amount of time and effort makes it very

clear that defendant was, in fact, engaged in the business

of making usurious loans.

Moreover, defendant ignores the facet that each indi-

vidual loan was clearly proscribed by N.J.S.A. 2A:119A-1.

Thus, defendant is in effect arguing that he knew each

individual loan was a criminal act, but could only guess

what combination of those individual illegal acts econsti-

tuted engagirg in the business as proscribed by N.J.S.A.

2A:119A-3. Such a position smacks of sophistry, and robs

defendant’s argument of any force.

In support of his argument defendant attempts to com-

pare the loansharking statute to New Jersey's former

anti-gangster statute struck down by this Court in Lan-

cetta v. New Jersey, supra. The State submits that such

a comparison is specious. In Lau:etta, the common every-

day meaning of the word gang was properly held to be

ambiguous in the absence of a precise statutory definition.

Lacking such a definition the act was deciared unconstitu-

15

tional. Lanzetta, at 458. It is interesting to note that the

Lanzetta court listed many possible meanings for the word

“vangs” and “gangster”. However, defendant has failed to

offer one example of a confused or vague meaning for the

phrase “engaging in the business.” Thus, it is clear that

the statute is not void for vagueness.

In conclusion, it should be stressed that the New Jersey

Loan Sharking statute is neither vague nor unclear and

there is no real danger that the statute can be misinter-

preted. Thus, there is no compelling reason why this

Court should grant defendant’s petition.

CONCLUSION

For the aforementioned reasons, respondent, State

of New Jersey, respectfully prays that the petition for

a writ of certiorari sought in the abcve named petition

pending before this Court not issue.

Respectfully submitted,

Witimm F. Hyianp

ATTORNEY GENERAL OF NEW JERSEY

By: Micnart A. Granam

Deputy Attorney General

MicuaEt A. GraHaM

Deputy Attorney General

Division of Criminal Justice

Of Counsel and on the Brief