Appendix — Natale v. United States

SERS 2527 cn a a NT A RE ONE TERS a RSE ER ENS RE ST

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APPENDIX A

Decision and Opinion of the

United States Court of Appeals

for the Second Circuit

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Nos. 307-08—September Term, 1975

(Argued October 6, 1975 Decided November 28, 1975)

Docket Nos. 75-1276, 75-1298

UNITED STATES OF AMERICA,

Appellee,

V.

JOSEPH NATALE AND FRANK RUSSO,

Appellants.

Before:

WATERMAN, OAKES and MESKILL,

Circuit Judges.

Appeal from judgments of conviction of conspiracy to use, and

use of, extortionate means, to collect extensions of credit, 18

U.S.C. §§894 and 2, by the United States District Court for the

Southern District of New York, Lloyd F. MacMahon, Judge,

challenging instructions of and_ interrogation by court;

Prosecution’s failure to produce grand jury testimony of, and

examination of, chief defense witness; admissibility of notebook

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seized at time of arrest; and admissibility of evidence of other

crimes.

Affirmed.

RONALD J. KLEINBERG,

New York, N.Y.

for Appellant Natale

WILLIAM SONENSHINE, EVERSOFF & SONEN-

SHINE, Brooklyn, N.Y., for Appellant Russo.

STEVEN K. FRANKEL, Special Attorney, United

States Department of Justice (Paul J. Curran, United

States Attorney for the Southern District of New York,

John D. Gordan, III, Assistant United States Attorney,

of counsel), for Appellee.

OAKES, Circuit Judge:

This criminal appeal involves a number of trial court rulings

but no question of sufficiency of the evidence of applicability of

the statute. Joseph Natale and Frank Russo appeal from

judgments of conviction entered on May 15, 1975, after a jury

trial in the Southern District of New York before Judge Lloyd F.

MacMahon. They were tried, along with a codefendant, John

Conti, under a three count indictment which charged them with

a conspiracy to collect extensions of credit by extortionate

means, with the substantive crime of using such means to collect

such extensions, 18 U.S.C. §§2 and 894,! and with an attempt to

1. 18 U.S.C. §894(a) provides:

whoever knowingly participates in any way, or conspires to do so, in the use

of any extortionate means

(1) to collect or attempt to collect any extension of credit, or

(2) to punish any person for the non-repayment thereof,

shall be fined not more than $10,000 or imprisoned not more than 20 years, or

both.

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» gece

obstruct commerce by extortion, in violation of 18 U.S.C.

§1951.2 The jury found appellants Natale and Russo guilty on

the obstructing commerce count. Defendant Conti was acquitted

on all counts. Judge MacMahon sentenced the appellants to

concurrent terms of five years’ imprisonment on each guilty

count. We affirm.

The heart of the crime for which Natale and Russo have been

convicted is the use, or threatened use, of force or violence to a

person, his reputation or his property, as a means of collecting

money lent.See 18 U.S.C. §891[7]. The transactions which

come under the purview of this statute are normally usurious

and. therefore. are unenforceable in courts of law.3 It is the

effort of usurious money lenders. or “loan sharks,”’ to seek

extra-legal methods of enforcing their unconscionable

agreements which this statute is designed to restrain.4 And it is

just such efforts which have been proved at trial in this case.

The phrase “extortionate means” ts defined to include ‘‘any means which

involves the use, or an express or implicit threat of use. of violence or other

criminal means to cause harm to the person. reputation, or property of any

person.” 18 U.S.C. §891(7).

2. 18 U.S.C. §1951(a) provides:

Whoever in any way or degree obstructs. delays. or affects commerce

or the movement of any article or commodity in commerce, by robbery

or extortion... or commits or threatens physical violence to any

person or property in furtherance of a plan or purpose to do anything

in violation of this section shall be fined not more than $10,000 or

imprisoned not more than twenty years or both.

3. Usurious loans are illegal under New York law. N.Y. Penal Law §190.30

(McKinney 1975), and usurious contracts are unenforceable, N.Y. Gen. Obl.

Law §S-S11 (McKinney 1975).

4. The question of the constitutionality of this federa! regulation of intrastate

“loan-sharking” has been previously decided affirmatively by this court in

United States v. Manarite. 434 F.2d 1069 (2d Cir. 1970), cert. denied, 402 U.S.

972 (1971). and in United States \. Perez. 426 F.2d 1073 (2d Cir. 1970). aff'd.

Frank Russo had a neighbor, Peter Amato. who, during 1974

and the first part of 197S, worked as the bookkeeper for Barbara

Creations. Inc., a Manhattan manufacturer of bridal veils.

Barbara Creations was having cash flow problems late in 1974

and Amato evidently proposed to its owner, Murray Weiss, that

Amato loan a sum to the corporation to assist it in its financial

Straits. Weiss agreed to accept temporary loans from Amato of

$7.000 on December 3, 1974, $3,000 on January 24, 1975, and

$5.000 on January 31, 1975.

Apparently unbeknownst to Weiss, the source of these funds

was not really Amato, but was Joseph Natale and Frank Russo.

Amato had contacted his neighBor Russo, from whom he had

previously borrowed at usurious rates, in November of 1974, and

informed him that if Russo could loan him a substantial sum of

money he would be able to use it to solidify his position at

Barbara Creations. Apparently Amato led Russo to believe that

Amato held an ownership interest in the company. Russo told

Amato to meet with him and Frank Natale in Russo’s office at

1430 Broadway in New York to discuss a possible loan. At their

meeting. Amato provided Natale and Russo and their attorney,

Harris Lapin, with information concerning Barbara Creations

and its officers. On December 3, 1974, Russo and Natale gave

Amato $10,000 in cash, with the understanding that a weekly

payment of $300 interest (“‘vigorish’’) would be due until the

principal was repaid in full. On the basis that no collateral had

been provided to secure the loan, Russo asked Amato to leave

$3,000 of the amount lent with him, as a “‘token’’ for the favor of

the loan. Amato agreed and deposited the remaining $7,000 in

the Barbara Creations bank account. Three hundred dollars per

week on a net $7,000 loan approximate 222 per cent interest per

annum. even without compounding.

402 U.S. 146 (1971). Perez was affirmed by the Supreme Court on the basis

that Congress's finding that local loan-sharking has a substantially adverse

effect on interstate commerce indicated that the legislation is rationally in

furtherance of Congress's Article I authority over commerce.

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On January 22, 1975, Amato again contacted Russo with a

request to borrow funds for Barbara Creations. He told Russo

that the corporation was overdrawn at the bank and needed

money to cover the checks it was writing.» Russo agreed to loan

Amato $3,000, with the understanding that repayment in the

amount of $4,000 was to be made in three weeks. Amato repaid

this loan a few weeks later with money provided by Barbara

Creations’ president, Weiss.

On January 31, 1975, the corporation’s account again became

overdrawn, and Amato, once again flirting with the loan sharks’

jaws, sought a loan of $5,000 from appellants. He met with them

in Russo’s office that day. Amato was given the $5,000, but with

instruction to pay back $6,500 no later than February 6, 1975. It

was the failure to repay this loan, as well as delay in repayment

of a portion of the December, 1974, advance, which led to the

offense charged in this case.

When Amato began to fall behind on his payments, he was

given a series of extensions which culminated in a deadline of

10:00 a.m. on February 11. On the morning of the 11th Russo

met his neighbor Amato as he was leaving his home. He was

friendly enough to tell Amato that he had better come up with

the money by 10:00 a.m. or that Natale ‘‘will just waste you, and

not worry about the money at all.’’ Amato decided to report this

threat to the police. An officer was assigned to the case, and the

officer and Amato went to Russo's office in Manhattan. The

officer posed as a friend of Amato’s who was trying to help him

raise money to repay the loan. While the officer was there, and in

Russo's presence Natale told Amato that if he kept “giving me

this kind of story about not paying me back . . . then the money

won't matter. I will just kill you.”

5. One factor contributing to Barbara Creations’ chronic cash flow problems

was the extraordinary fact, admitted by Amato, that he was padding the

payroll and taking money out of the corporation's petty cash account. He

extracted approximately $12,000 out of the firm before his activities were

discovered by the president, Weiss, on February 8, 1975, at which time Amato

was fired. Thus we have the rather bizarre spectacle of a fellow borrowing

money at usurious rates to lend it to a corporation from which he was stealing.

————————————oeer—————

Pat AR LALO i.

iat Pad eB ctetd BG Rates bo

The next day, Russo called Amato on the telephone at work

and threatened to take Weiss’ car and Amato’s house if the loan

wasn't repaid immediately. On the 14th, Amato had obtained

$3,000 to repay part of his loan and took it to Russo’s office.

When he arrived Natale and John Conti were waiting along with

Russo. Amato paid over the money which was handed by Russo

and Natale to Conti. Later that day, Russo told his neighbor

Amato that Conti was a “hit man . . . there to size you up” in

case Amato hadn't paid.

The final chapter in this saga occurred on February 19, 1975.

Russo and Natale went to the offices at Barbara Creations to

meet with Weiss and Amato. At this meeting, Weiss -informed

the appellants that Amato had no ownership interest in Barbara

Creations, that he had been stealing from the company, that

Weiss was not responsible for any of Amato’s debts and ac-

cordingly would not pay them anything. Apparently this was a

surprise to Russo, for later that day he went to Amato’s home

and told him, ““What’s it going to be?—-you lied and now you are

in trouble and to put you in their good eyes is going to cost you

$5,000 extra for lying to them, stringing them along all this

time.”” Amato testified that ‘Russo said to me if I did not come

up with this money that Joey will come into my house, do a job

on my wife and children in front of me, while I watched.”

For the above series of events, Russo and Natale were con-

victed of the use of extortionate means to collect extensions of

credit. On this appeal they urge seven separate grounds for

reversal of their conviction.

I. Charge to the Jury on the Elements of the Offense. The

judge at trial instructed the jury that there are three separate

elements of the §894 substantive offense charged in this case.

The Government must prove (1) that there was principal or

interest outstanding on the loans, (2) that the defendants ac-

tually collected or attempted to collect sums due, and (3) that the

defendants employed extortionate means to collect same. Judge

MacMahon stated that, as to the first two elements of the of-

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fense. “I don't think there is any dispute in the evidence. . . “

Appellants claim that this charge amounted to a directed verdict

on those two elements of the offense and that they are entitled.

therefore, to a new trial.

Cases such as United States v. Howard, 506 F.2d 1131 (2d Cir.

1974), and United States v. Fields, 466 F.2d 119 (2d Cir. 1972).

have reestablished that failure to charge each separate element

of an offense may be plain error. Such “errors go directly to a

defendant's right to have the jury told what crimes he is actually

being tried for and what the essential elements of those crimes

are." United States v. Fields, supra, 466 F.2d at 121. Failure to

charge each element of the offense may be reversible error even

where the elements not charged have been wholly uncontested by

the defendant. United States v. Howard, supra, S06 F.2d at

1134. The plea of not guilty places every issue in doubt. and not

even undisputed fact may be removed from the jury’s con-

sideration, either by direction or by omission in the charge. See

United Brotherhood of Carpenters and Joiners of America v.

United States, 330 U.S. 395, 408 (1947); Roe v. United States,

287 F.2d 435, 440 (Sth Cir.). cert. denied, 368 U.S. 824 (1961).

But cf. United States v. Pravato, SOS F.2d 703 (2d Cir. 1974)

(court’s inadvertent and erroneous statement that stipulation

covered one element not plain error where all elements charged

and no objection as matter of trial strategy).

In this case, however, the trial judge did charge each element

of the offense. His indication that he did not “think” there was

any dispute in the evidence as to the first two elements of the

offense fell far short of an actual directicn to the jury that these

essential facts had been proven beyond a reasonable doubt. A

trial judge is permitted to comment upon the evidence if he does

so fairly and makes clear to the jury that all matters of fact are

submitted for their determination. See. e.g.. Horning v. District

of Columbia, 254 U.S. 135, 138 (1920) (Holmes, J.); Gant v.

United States, 506 F.2d 518. 520 (8th Cir. 1974), cert. denied,

420 U.S. 1005 (1975); United States v. Tourine, 428 F.2d 865.

869 (2d Cir. 1970). cert. denied, 400 U.S. 1020 (1971). When

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commenting on the evidence, Judge MacMahon gave the

standard or pattern instructions that the jurors were the sole |

judges of facts and not bound by his opinions, informing the jury

that it alone was to decide the weight, effect and value of the

evidence and that the court had no opinions on the evidence.®

See Quercia v. United States, 289 U.S. 466, 469 (1933); United

States v. DeLaMotte, 434 F.2d 289, 292 (2d Cir. 1970), cert.

denied, 401 U.S. 921 (1971). The judge’s expressed opinion as to

the absence of dispute over the first two elements of the offense

was not in any sense unfair. The evidence that a debt existed and

that efforts at collection had been made was, in fact, not

disputed by the defense.’ Rather, their position at trial was that

the financial transactions involved here were wholly amicable

and legitimate. Since the trial court's comment, in its context. |

was fair, and since the jury's role as finder of facts was

repeatedly and accurately explained by the trial court, we find no

error in the challenged instructions. Cf United States v.

Pravato, supra.

6. Additional statements to the same effect were made at least twice more in

the judge's instructions to the jury.

7. It should be noted that Judge MacMahon did not charge that there was

uncontradicted evidence on the clements of the offense which “as a matter of

law” foreclosed jury deliberations on the issues. See United States v. Gollin.

166 F.2d 123, 125 (3d Cir.). cert. denied, 333 U.S. 875 (1948). Rather, the

judge suggested that he did not “think” the evidence adduced by both parties

was “in dispute” as to two of the elements. This is not tantamount to a

direction that the evidence “not in dispute” proves the elements of the offense

beyond a reasonable doubt.

8. Appellants argue that they had informed Weiss, after their meeting with

him in his office on February 18, 1975, that he was not legally liable on the

loans they had made Amato, They suggest in their briefs that the jury might

have concluded that this was also their posture toward Amato, But it does not

follow that because appellants felt Weiss was not obligated on Amato's debt.

they also felt Amato owed them nothing. There is no evidence of a willingness

to forgive the debt. In fact, the evidence of their belief that Amato remained

indebted to them is not disputed in the trial record,

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More troublesome is appellant Natale’s contention that the

trial court's charge to the jury was inadequate because it failed to

require the jury to find that the threats employed by Russo and

Natale had actually placed Weiss or Amato in fear of harm. The

judge charged the jury that the Government must prove from the

evidence that ‘‘an ordinary person would have been put in fear of

immediate bodily harm or future bodily harm from anything

that the defendant said or did to Weiss or Amato... ."’ It is

true that this charge did not require the jury to find that the

persons threatened had actually been placed in fear, but it is the

threat of harm which is prohibited by 18 U.S.C. §894, and

actual fear is not an element of the offense. But see United States

v. Biondo, 483 F.2d 635, 643 (8th Cir. 1973), cert. denied, 415

U.S. 947 (1974) (since ‘‘victim’s state of mind is an essential

clement of the crime charged,’’ 18 U.S.C. §1951, hearsay

evidence regarding state of mind admissible). To be convicted,

the defendant must have intended to make a ‘“‘threat of use, of

violence or other criminal means, to cause harm to the person,

reputation, or property of [another] person.’’ 18 U.S.C. §891(7).

Convictions have been sustained under this statute even where

the person threatened has denied at trial that he was put in fear

by the threat. United States v. DeLutro, 435 F.2d 255 (2d Cir.

1970), cert. denied, 402 U.S. 983 (1971). The approach chosen

by the trial judge, to define the word ‘“‘threat’’ in the statute by

reference to the reasonable apprehensions of an “ordinary

person,” gives the statute a proper construction since it focuses

the jury’s attention on the evil being attacked—the defendant's

conduct. Acts or statements constitute a threat under 18 U.S.C.

§891(7) “if they instill fear in the person to whom they are

directed or are reasonably calculated to do so in light of the

surrounding circumstances... . '' United States v. Curcio, 310

F, Supp. 351, 357 (D. Conn. 1970) (Timbers, J.) (emphasis

added). It is this ‘‘calculated"’ use of threatening gestures or

words to collect credit extensions which Congress has made

criminal. Actual fear need not be generated, so long as the

defendants intended to take actions which reasonably would

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induce fear in an ordinary person.? In other words, it is the

conduct of the defendant, not the victim's individual state of

mind, to which the thrust of the statute is directed. We have no

doubt that Congress meant to protect not only the weak and

timid from extortionate threats, but the strong and intrepid as

well. See United States v. Alsop, 479 F.2d 65, 67 (9th Cir. 1973);

United States v. Epps, 438 F.2d 1192 (4th Cir. 1971). See also

United States v. Brown, 412 F.2d 381, 384 (8th Cir. 1969).

Accordingly, we reject the claim that actual fear is a necessary

element of this offense. !

Charge to the Jury on Intent and Entrapment. Appellants

argue that the portions of Judge MacMahon's charge to the jury

which dealt with criminal intent and entrapment were

prejudicial. The appellants’ first claim is that the judge's

comments on the matter of intent to threaten use of force were

too one-sided and indicated a conviction on the judge’s part that

9. We should also observe that the appellants failed to make timely objection

to the instructions pursuant to Fed. R. Civ. P. 30. They cannot, therefore,

object to any mistakes in the charge which are not “plain error.’ In light of our

holding that the instructions given were proper, we need not consider this

alternative ground for affirming the judgment. We should note, however, that

at least once in the charge the judge instructed the jury that it must find that

the threats did arouse or were intended to arouse fear in Amato or Weiss. See

note 11 infra. Thus, any error in the charge was at least partially moderated in

its total context.

10. Appellants’ argument on this point under 18 U.S.C. $894 was somewhat

contused. They cited to us the requirement that actual fear be shown to have

existed in convictions under 18 U.S.C. §892 for “‘making extortionate ex-

tensions of credit."’ In prosecutions under that statute, unlike those under

§894. the Government must show a prior “understanding of the creditor and

debtor... that delay in making repayment . . . could result in the use of

violence . . . to cause harm to the person, reputation, or property of any

person.”” 18 U.S.C. §891(6). Since this understanding will exist only where the

debtor tears that the threat of force is genuine, the state of mind of the victim

would appear an essential element of that offense to be proved by the

Government. See United States v. DeCarlo, 458 F.2d 358, 367 n, 12 (2d Cir.),

cert, denied, 409 U.S, 843 (1972).

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the appellants were guilty. While impartiality is, of course,

required in the judge’s summation, Quercia v. United States.

supra, 289 U.S. at 470, he has discretion to choose which facts

he will mention in his comments, so long 2s the overal! thrust of

the charge is fair to both sides. E.g.. United States v. Tourine,

supra, 428 F.2d at 869. Judge MacMahon noted that the jury

should consider, in determining whether a conspiracy to use

extortionate means existed, ‘‘whether [the persons involved] kept

the usual business records of checks, etc., or whether they dealt

in large sums of cash and currency." But these are perfectly

proper comments which do not, on their face. amount to the sort

of repetitious, one-sided summary that unfairly prejudices the

defendants and requires a new trial. This short comment on the

evidence was given in the context of instructions which carefully

protected the jury's independent right to evaluate the entire case,

and we find that appellants were not prejudiced by it. Compare

United States v. Tramunti, 513 F.2d 1087, 1119-20 (2d Cir.

1975), cert. denied. 44 U.S.L.W. 3201 (U.S. Oct. 7, 1975), with

Boatright v. United States, 105 F.2d 737, 739 (8th Cir. 1939), 11

In the course of instructing the jury, the trial judge informed

them that the defense of entrapment is not available where the

defendants have the intention, readiness and willingness to

commit the crime. The appellants claim that this was a

gratuitous side reference which indicated the judge's belief in

their guilt. In fact, however, a short explanation of that defen’ =,

and its applicability to this case, was made necessary by defense

11. The charge given by Judge MacMahon on the subject of the defendants’

intent to use extortionate means was as follows:

| T]he essential question for you is whether the defendant knowingly

and intentionally aroused or instilled or attempted to arouse or instill a

reasonable fear of bodily harm or economic loss in Weiss or Amato by

creating a menacing atmosphere of intimidation and threats. It is not

necessary for the victim to become terrified, panic stricken, hysterical

or show the least sign of fright.

The appellants claim that the instruction is insufficient because actual fear

must have been proven as part of this offense. In light of our discussion above,

we cannot accept that view,

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counsel's closing argument which had suggested that Amato had

tried to ‘entrap’ Russo and Natale to protect himself from

embezzling charges. In this situation it was entirely appropriate

for Judge MacMahon to have provided a brief explanation of the

nature of the defense to assure that the jury was not sidetracked

by matters wholly undeveloped in the record and a defense never

really asserted.

Il. Trial Court's Intervention at Trial. In several instances

the trial judge intervened in the conduct of the trial to ask

questions of various witnesses. We have time and again

cautioned that the judge should be careful to preserve an at-

titude of impartiality and guard against communicating to the

jury any impression that the court is of the opinion that the

defendant is guilty. E.g., United States v. Nazzaro, 472 F.2d 302

(2d Cir. 1973). Our review of the record convinces us that Judge

MacMahon was doing no more than asking such questions as

would serve the ends of justice by assisting the jury in un-

derstanding the evidence. United States v. Cuevas, S10 F.2d

848, 850 (2d Cir. 1975); United States v. Boatner, 478 F.2d 737,

740 (2d Cir.). cert. denied, 414 U.S. 848 (1973); United States v.

Pellegrino, 470 F.2d 1205, 1206-07 (2d Cir. 1972), cert. denied,,

411 U.S. 918 (1973).

The complaint of excessive intervention by the trial judge is

focused on the examination of Harris Lapin, the chief defense

witness and attorney who assisted Russo and Natale at their

February 19, 1975, meeting with Weiss and Amato. !2 Lapin was

being cross-examined regarding Amato's ability to provide

collateral for the loans, when the trial judge asked two questions

about whether Lapin knew what the terms of the loans were to

be. He also asked Lapin whether he knew that the loan

arrangement was usurious, 3 and therefore that any collateral

12. In that meeting Lapin advised Russo and Natale that Weiss and Barbara

Creations were not obliged to repay to the appellants any sums which Amato

had borrowed, even though Amato had lent the money in turn to the cor-

poration.

13. The transaction then being discussed was a loan of $5,000 with

repayment of $6,500 one week later. Even without compounding of interest,

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arrangement would be unenforceable. The appellants contend

that this “hostile” line of questioning was intended to ridicule

their witness and to discredit their defense that their relations

with Amato were conducted as normal business transactions. It

is obvious from the record, however, that the court’s questions

were intended to assist the jury in its evaluation of the nature of

the transactions in this case. This limited interjection by the trial

judge was well within his active responsibility to assure that the

issues were clearly presented to the jury. See United States v.

Brandt, 19% F.2d 653, 655 (2d Cir. 1952). A reading of the

examination of witness Lapin in toto establishes that the claim of

prejudice cannot be sustained; we therefore reject appellants’

claim of error. See United States v. Newman, 481 F.2d 222, 224

(2d Cir. 1973) (per curiam).

IV. Refusal to Produce Grand Jury Testimony of Witness

Lapin. Appellants claim that the trial court erred in refusing to

require the Government to produce the grant jury testimony of

the witness Lapin prior to his being called as a defense witness.

The contention is that this constituted a suppression of ex-

culpatory evidence in violation of the rule of Brady v. Maryland,

373 U.S. 83, 87 (1963) (suppression by prosecution of evidence

favorable to accused upon request violates due process where

evidence is material, irrespective of good or bad faith of

prosecution). The gloss which appellants would have us read

upon Brady is that the prosecution must provide evidence

favorable to the defense which is given by a witness before the

grand jury even though the witness is one who testifies at trial for

the defense.!4 This we decline to do.

this indicates an interest rate of over 1500 per cent per year. On redirect Lapin

denied knowing the duration of the loan, but the amount of the interest ap-

parently did not trouble him or raise any questions in his mind, and this is what

the judge's questions concerned.

14. The appellants, of course, have no right to obtain Harris Lapin's grand

jury testimony under the Jencks Act, since Lapin was not a ‘Government

witness or prospective Government witness... . " 18 U.S.C. §3500(a). See

generally United States v. Dioguardi, 428 F.2d 1033 (2d Cir.), cert. denied. 400

U.S. 82S (1970). Lapin was called as a witness by, and his testimony was

favorable to, the defense.

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“The heart of the holding in Brady is the prosecution's

suppression of evidence’’ favorable to the accused. Moore v.

Illinois, 408 U.S. 786, 794 (1972). The concept of ‘‘suppression”’

implies that the Government has information in its possession of

which the defendant lacks knowledge and which the defendant

would benefit from knowing. See Giles v. Maryland, 386 U.S.

66, 96 (1967) (White, J., concurring). Here, as in United States

v. Ruggiero, 472 F.2d 599, 604 (2d Cir.), cert. denied, 412 U.S.

939 (1973), this essential prerequisite to invocation of the Brady

rule is lacking. There was no “suppression” involved in the

Government’s turning over Lapin’s grand jury testimony to the

trial court for his decision on the disclosure motion. Nor were the

appellants lacking access to the information which they sought

to obtain from the grand jury minutes. Lapin, who had

represented both of them, was continually available for in-

terviewing, or, had he proved suddenly uncooperative, for

subpoena. !5 In fact, Lapin appears to have cooperated fully

throughout the trial with them. They have failed to advance any

plausible suggestion of prejudice to them from the jury’s ruling,

so that we conclude that there has been no suppression what-

soever of any favorable evidence in this case. See United States v.

Ruggiero, supra, 472 F.2d at 604-05.

V. Examination of Witness Lapin by the Prosecutor. Ap-

pellants claim that the prosecutor improperly discredited the

testimony of witness Lapin by asking, on cross-examination,

whether Lapin recalled “testifying before a grand jury under

immunity on the 13th of March of this year.”’ This is said to have

ineluctably led the jury to the conclusion that the witness’s

1S. If a subpoena had been necessary to secure the witness's testimony, and

that testimony had surprisingly been unfavorable, the defense would have been

entitled to examine and use the grand jury transcript to refresh the witness's

recollection or to impeach his testimony. See Dennis v. United States, 384 U.S.

85S, 868-70 (1966); United States v. Youngblood, 379 F.2d 365 (2d Cir. 1967).

But here the witness appeared voluntarily and was cooperative with the defense

at trial. On this basis. the appellants’ claim that the grand jury minutes may

have been useful for potential impeachment purposes is plainly frivolous.

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credibility was suspect because grand jury testimony had to be

forced out of him over a claim of Fifth Amendment privilege.

Where a prosecutor directly asks a defense witness at trial

whether the witness refused to answer questions at the grand jury

proceedings because the answers might have tended to in-

criminate him, courts have found prejudicial error and reversed

the convictions. See, e.g., United States v. Williams, 464 F.2d

927 (8th Cir. 1972); cf: United States v. Glasser, 443 F.2d 994,

100S (2d Cir.), cert. denied, 404 U.S. 854 (1971). Such direct

efforts to impeach a defense witness are improper under

Grunewald v. United States, 353 U.S. 391 (1957), where the

Supreme Court reversed a conviction because the prosecutor had

improperly cross-examined a defendant as to the assertion of his

Fifth Amendment privilege before a grand jury. The salutary

ruling of Grunewald was based on the view that the question

prejudiced the credibility of the defendant without sufficiently

bearing on the truth of the testimony he had given at trial. /d. at

423-24. Mr. Justice Black’s concurrence in Grunewald took an

even harsher stance toward such questioning: “I can think of no

special circumstances that would justify use of a constitutional

privilege to discredit or convict a person who asserts it.”” Jd. at

425. This circuit has taken the view that any direct questioning

as to whether a witness had previously invoked his constitutional

right to refuse to testify at a grand jury proceeding constitutes

trial error. However, the error may be harmless if (1) the wit-

ness’s testimony were remote from the crime charged and (2)

there were no likelihood of confusion in the jury’s mind which

would link the defendants to the witness’s assertion of the

privilege. See United States v. Glasser, supra, 443 F.2d at 1006;

United States v. Sing Kee, 250 F.2d 236, 240-41 (2d Cir. 1957),

cert. denied, 355 U.S. 954 (1958).

This case differs from Grunewald and its progeny, however,

because here the reference to the constitutional privilege was

neither direct nor clear. This incidental reference to immunity

provided before the grand jury was not itself framed as a

question, but rather was contained in the question being asked.

It was not flagged before the jury as it was in Grunewald and

Williams. It was not even objected to at trial. The prosecutor’s

naughty words were in effect a flyspeck on this record, not a blot.

Furthermore, it is postulating far too great a sophistication on

the part of the jurors to conclude that, from the fact that im-

munity was provided to Lapin before the grand jury, they drew

the inference that he had exercised his Fifth Amendment

privilege to refuse to testify there. The fact that immunity is

provided does not always imply that a Fifth Amendment refusal

to testify has first occurred. For example, under the New York

Criminal Procedure Law §190.40 (McKinney 1967) all witnesses

are granted immunity automatically by reason of their ap-

pearance before the grand jury unless the immunity is

specifically waived. It would be wholly speculative to attribute to

these lay jurors an understanding of the reference to immunity

en passant as anything more than a description of the grand jury

procedure. Here, moreover, the trial judge after only three

questions and answers read by the prosecutor from the grand

jury testimony (bearing on Lapin’s representation of appellants

and acquaintance with Conti) struck the line of inquiry

altogether. Accordingly, we find no error in this questioning and

need not reach the issue whether any putative error was harmless

under United States v. Glasser, supra.

VI. Admission at Trial of a Notebook Seized at Arrest. The

Government introduced into evidence at trial a black notebook

which had been seized at the arrest of the appellants. As the

police entered russo’s office to make the arrest, they found this

notebook lying on the table in front of Russo. The notebook was

in plain view, approximately a foot and a half from where ap-

pellant Natale was standing at the time of the arrest. The book

was lying shut on the desk, but when opened it was seen to be

filled with apparently incriminating records of usurious tran-

sactions, including the ones involved in this case.

There are two objections which have been raised to the ad-

mission of this evidence. The first is that the seizure of the

notebook, though incident to the valid arrest of the appellants,

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was in violation of the Fourth Amendment. The validity of such

a search is to be determined under the criteria of Cnimel v.

California, 395 U.S. 752, 762-63 (1969), which restricts searches

of the scene incident to arrest to the area that must be searched

to ensure the protection of the officers and the preservation of

easily disposable evidence. We are by no means convinced that

the seizure of the notebook in this case was necessary either to

protect the officers or to preserve the evidence from destruction.

See Coolidge v. New Hampshire, 403 U.S. 443, 472 (1972). But

cf. United States vy. Robinson, 414 U.S. 218 (1973) (search of

person incident to arrest valid even as to cigarette package; no

need to protect evidence or arresting officer must be shown). We

realize that some courts have chosen to water down the Chimel

requirements, and have accepted justifications for searches

incident to arrest which fall short of the ““emergency”’ context in

which this exception to the warrant requirement developed. See

United States v. Nevarez-Alcantar, 495 F.2d 678, 682 (10th

Cir.), cert. denied, 419 U.S. 878 (1974) (at arrest for disorderly

conduct, search of locked suitcases valid); Note, The United

States Court of Appeals: 1973-1974 Term Criminal Law and

Procedure, 63 Geo. L.J. 331, 370 (1974). In this case, however,

we need not determine the applicability of Chimei to the cir-

cumstances of this arrest. The reason is that the appellants have

raised this claim that the notebook should be suppressed for

Fourth Amendment violations for the first time at this appeal.

United States v. Mauro, SO7 F.2d 802, 805-807 (2d Cir. 1974),

cert. denied, 420 U.S. 991 (1975) (failure to raise suppression

claim prior to trial makes motion to suppress at trial untimely

under Fed. R. Crim. P. 12(b) and 41(f) ).

The appellants did validly raise at trial, and have therefore

preserved for this appeal, a different objection to the admission

of the notebook. The argued that there was nothing in the record

to show that the notebook was the property of either Natale or

Russo, and that absent authentication the document should be

excluded. See, e.g., McGowan v. Armour, 248 F. 676 (8th Cir.

1918); 7 J. Wigmore, Evidence §2129 (3d ed. 1940); Mc-

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Cormick’s Handbook on the Law of Evidence §§218-26 (2d ed.

1972). The trial court’s rejection of this argument was proper.

Proof of the connection of an exhibit to the defendants may be

made by circumstantial, as well as direct, evidence. The

prosecution need only prove a rational basis from which the jury

may conclude that the exhibit did, in fact, belong to the ap-

pellants. See United States v. Sutton, 426 F.2d 1202, 1207 (D.C.

Cir. 1969) (while “‘mere contents” are ordinarily insufficient

evidence of genuineness, contents may be considered in con-

junction with other circumstances); United States v. Montalvo,

271 F.2d 922, 925 (2d Cir. 1959), cert. denied, 361 U.S. 961

(1960). In the words of Rule 901(a) of the new Federal Rules of

Evidence (not yet effective at the time of trial),

[t]he requirement of authentication or identification as a

condition precedent to admissibility is satisfied by

evidence sufficient to support a finding that the matter

in question is what its proponent claims.

Among the facts which support the finding of authenticity here

are the presence of Natale and Russo at the place where the

notebook was discovered, the fact that the office in which the

arrest occurred and the notebook was seized was the same one in

which Amato had held numerous meetings with Russo and

Natale, Russo’s admission that the office was his, and an entry in

the notebook which referred to the $5,000 loan for $6,500 made

to Amato. See United States v. Sutton, supra, 426 F.2d at 1207-

08; 7 J. Wigmore, supra + '/2/'%«— (authentication by contents).

These same facts also reveal the probative value of the exhibit as

a record of the transactions testified to by Amato between Amato

and the appellants.!6 Thus we hold that the document was

sufficiently authenticated, was of significant probative value.

and was therefore properly admitted into evidence by the trial

court.

16. The entries in the notebook were. of course. evidence that an outstanding

debt remained to be paid by Amato. The validity of this evidence was not

disputed by the appellants, a fact which undercuts their argument in Part I of

this opinion, supru. See especially text at notes 7-8 supra.

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VII. Use of “Other Crimes’ Evidence and Instructions

Thereon. The appellants contend that it was improper to allow

into evidence certain testimony and documentary proof which

tended to show that Natale and Russo had been engaged in

several usurious transactions both before and during the period

of the conspiracy here charged. The appellants were not, of

course, charged with usury at this trial. Therefore, evidence of

their usurious transactions should not have been admitted if it

were introduced so/ely to show that the defendants had criminal

characters. United States v. Papadakis, 510 F.2d 287, 294 (2d

Cir.), cert. denied, 421 U.S. 950 (1975). But if this proof of

“other crimes” was used at trial for any valid purpose other than

to show the appellants’ criminal character, then it should have

been admitted so long as its probative value outweighs its

potential prejudice. United States v. Torres, 519 F.2d 723, 727

(2d Cir. 1975); United States v. Papadakis, supra. The

Government contends that this evidence was adniissible to show

the ‘‘background and development” of the conspiracy to use

extortionate means to collect credit extensions. See United

States v. Torres, supra; United States v. Colasurdo, 453 F.2d

585, 591 & n.3 (2d Cir. 1971), cert. denied, 406 U.S. 917 (1972).

We agree that this evidence helps to establish that Natale and

Russo had continuing debtor-creditor relations with Amato and

others, relations of a type which could not be enforced legally, 17

and therefore might well have been grounded in extra-legal

methods of enforcement. Thus we have no trouble in concluding

that the evidence of usurious behavior was relevant to the proof

of a conspiracy to employ extortionate means to collect on such

loans. Admission of this evidence was well within the discretion

of the trial court.

Appellants’ final contention is that the failure of the trial court

to give cautionary instructions to the jury as to the limited use of

the “other crimes’ evidence was reversible error. However, the

appellants’ counsel failed to request such a limiting instruction

17. See note 3 supra.

42

either at trial or at the close of the case in the charge to the jury.

Failure to have asserted this claimed right below precludes

review here. See United States v. Papadakis, supra, 510 F.2d at

295; United States v. Bozza, 365 F.2d 206, 214 (wd Cir. 1966).

Having considered and rejected all of the appellants’

arguments, we affirm the judgment below.

Judgment affirmed.

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APPENDIX B

United States Constitution

Fifth Amendment

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 offence 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.”

Sixth Amendment

“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 defence.”’

UNITED STATES CODE 18 U.S.C. 891

CRIMES AND CRIMINAL PROCEDURE

CHAPTER 42. EXTORTIONATE CREDIT TRANSACTIONS

Sec. 891. Definitions and rules of construction.

892. Making extortionate extensions of credit.

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893. Financing extortionate extensions of credit.

894. Collection of extensions of credit by extortionate means.

896. Effect on State laws.

1970 Amendment. Pub. L. 91-452, Title II, Section 223(b),

Oct. 15, 1970, 84 Stat. 929, struck out item 89S “Immunity of

witnesses’’.

§891. Definitions and rules of construction

For the purposes of this chapter:

(1) To extend credit means to make or renew any loan, or to

enter into any agreement, tacit or express, whereby the

repayment or satisfaction of any debt or claim, whether

acknowledged or disputed, valid or invalid, and however arising,

may or will be deferred.

(2) The term “‘creditor”’, with reference to any given extension

of credit, refers to any person making that extension of credit, or

to any person claiming by, under, or through any person making

that extension of credit.

(3) The term “‘debtor”, with reference to any given extension

of credit, refers to any person to whom that extension of credit is

made, or to any person who guarantees the repayment of that

extension of credit, or in any manner undertakes to indemnify

the creditor against loss resulting from the failure of any person

to whom that extension of credit is made to repay the same.

(4) The repayment of any extension of credit includes the

repayment, satisfaction, or discharge in whole or in part of any

debt or claim, acknowledged or disputed, valid or invalid,

resulting from or in connection with that extension of credit.

(S) To collect an extension of credit means to induce in any

way any person to make repayment thereof.

(6) An extortionate extension of credit is any extension of

credit with respect to which it is the understanding of the

creditor and the debtor at the time it is made that delay in

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making repayment or failure to make repayment could result in

the use of violence or other criminal means to cause harm to the

person, reputation, or property of any person.

(7) An extortionate means is any means which involves the

use, Or an express or implicit threat of use, of violence or other

criminal means to cause harm to the person, reputation, or

property of any person.

(8) The term ‘‘State’’ includes the District of Columbia, the

Commonwealth of Puerto Rico, and territories and possessions

of the United States.

(9) State law, including conflict of laws rules, governing the

enforceability through civil judicial processes of repayment of

any extension of credit or the performance of any promise given

in consideration thereof shall be judicially noticed. This

paragraph does not impair any authority which any court would

otherwise have to take judicial notice of any matter of State law.

Added Pub. L. 90-321, Title II, §202(a), May 29, 1968, 82

Stat. 159.

18 U.S.C. 894

Section 894. Collection of extensions of credit by extortionate

means

(a) Whoever knowingly participates in any way, or conspires to

do so, in the use of any extortionate means

(1) to collect or attempt to collect any extension of

credit, or

(2) to punish any person for the nonrepayment

thereof,

shall be fined not more than $10,000 or imprisoned no more

than 20 years, or both.

(b) In any prosecution under this section, for the purpose of

showing an implicit threat as a means of collection, evidence

may be introduced tending to show that one or more extensions

46

of credit by the creditor were, to the knowledge of the person

against whom the implicit threat was alleged to have been made,

collected or attempted to be collected by extortionate means or

that the nonrepayment thereof was punished by extortionate

means.

(c) In any prosecution under this section, if evidence has been

introduced tending to show the existence, at the time the ex-

tension of credit in question was made, of the circumstances

described in section 892(b) (1) or the circumstances described in

section 892(b) (2) and direct evidence of the actual belief of the

debtor as to the creditor's collection practices is not available,

then for the purpose of showing that words or other means of

communication, shown to have been employed as a means of

collection, in fact carried an express or implicit threat, the court

may in its discretion allow evidence to be introduced tending to

show the reputation of the defendant in any community of which

the person against whom the alleged threat was made was a

member at the time of the collection or attempt at collection.

Added Pub. L. 90-321, Title II, §202(a), May 29, 1968, 82

Stat. 161.

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