United States v. Benjamin Clemente, Joseph Demolfetto, Thomas Albunio, Pasquale D. Mirenda, Anthony Cassera, James Sharkey and Leonard Messana

Citations: 22 F.3d 477; 1994 U.S. App. LEXIS 8356Docket: 93-1187

Court: Court of Appeals for the Second Circuit; April 20, 1994; Federal Appellate Court

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Appellants Joseph Demolfetto, Thomas Albunio, Pasquale D. Mirenda, Anthony Cassera, James Sharkey, and Leonard Messana are appealing convictions from the U.S. District Court for the Eastern District of New York, following a five-week jury trial where they were acquitted of RICO-related charges but convicted of conspiracy to commit extortion under the Hobbs Act. The convictions stem from a four-year investigation into corruption within the New York City Department of Buildings (DOB), which involved 22 inspectors pleading guilty to extortion or racketeering. The defendants contend that inconsistencies in jury responses to special interrogatories warrant reversal of their convictions and challenge the admission of evidence regarding uncharged acts as well as the court's jury instructions, arguing they effectively amended the indictment. The court affirmed the convictions.

The defendants were part of the DOB's construction division, responsible for issuing certificates of occupancy (CO) that certify compliance with construction codes and allow buildings to be legally occupied. The process for obtaining a CO is complex and can lead to significant financial consequences for builders, including delays that can result in substantial losses. Builders must first secure work permits and undergo inspections, with any violations needing resolution before a CO is issued. Delays in this process can hinder sales, rentals, or refinancing of properties.

Inspectors within the Department of Buildings (DOB) exploited financial pressures on builders by demanding payoffs for expediting the issuance of certificates of occupancy (COs) and preventing delays in paperwork. Payoffs varied from $50 to $20,000, becoming so commonplace that standard rates emerged, with some builders routinely paying without solicitation. Corruption was facilitated among inspectors, who often shared illicit payments with supervisors and exchanged information about compliant builders. 

A 124-count indictment was filed against six defendants, who served as inspectors or supervisors, charging them with RICO conspiracy, substantive RICO, Hobbs Act conspiracy, and substantive Hobbs Act violations, identifying the construction division of the DOB as the RICO enterprise. The indictment detailed a pattern of racketeering, listing 43 extortion acts, with 26 involving the defendants. Each act specified an unlawful payment for issuing a CO for a particular property and was incorporated into both the RICO conspiracy and Hobbs Act charges.

Prior to trial, the government informed the court it would present evidence of additional uncharged extortion acts, which Judge Glasser permitted to establish the existence of the enterprise and the relationships among participants, citing their relevance to the Hobbs Act charges for demonstrating knowledge and intent.

The jury was tasked with determining the validity of 40 racketeering acts and found none were proved, resulting in acquittals on the substantive RICO and RICO conspiracy counts. The only conviction came from the Hobbs Act conspiracy charge, which accused the defendants of unlawfully conspiring to extort money under the guise of their official positions.

Judge Glasser's jury instructions clarified that count 124 charged the defendants with conspiracy to commit extortion related to racketeering acts outlined in count 2 of the indictment. He indicated that the jury could find a defendant guilty of conspiracy while acquitting them of the substantive offense of extortion. He emphasized that the trial focused only on the charged crimes and that any evidence of uncharged conduct was admitted solely to demonstrate the defendants' intent, not as grounds for conviction.

The jury convicted six of the eight defendants of Hobbs Act conspiracy. On appeal, the defendants argue that the jury's responses were inconsistent, claiming this inconsistency undermined the sufficiency of the evidence for their convictions and suggested a constructive amendment of the indictment due to uncharged acts being admitted as evidence. The government contends that the jury's responses were consistent, that ample evidence supported the conspiracy convictions, and that the indictment was not amended.

The defendants assert that the jury's 'Not Proved' responses regarding the racketeering acts contradict their guilty verdicts on count 124, arguing that without proving these acts, there is insufficient evidence for the conspiracy convictions. However, the court clarified that unlike a substantive Hobbs Act offense, a conspiracy charge does not require proof of overt acts or the actual commission of extortion. The government need only demonstrate that an agreement to commit extortion existed, independent of whether any extortion was successfully executed. Thus, the jury's belief that the defendants conspired to obtain illicit payments—despite finding the alleged racketeering acts unproven—does not indicate a lack of consistency in their verdicts. Consequently, the court concluded that the jury's responses were indeed consistent.

Jury responses on the verdict sheet were deemed consistent, but it is crucial to verify that convictions were based on appropriate grounds. Defendants contend that evidence of uncharged extortion acts, combined with insufficient judicial instructions, resulted in a constructive amendment of the indictment, allowing for convictions based on different grounds than those presented to the grand jury. The defendants argue that count 124 of the indictment limited the Hobbs Act conspiracy to the acts listed under count 2, while the government argues that the listed acts were merely illustrative of the conspiracy's operation and not restrictive.

Throughout the trial, all parties, including the trial judge, assumed that the Hobbs Act conspiracy was confined to the acts charged in the indictment, with Judge Glasser affirmatively instructing the jury that they were only to consider the crimes specifically charged. A defense attorney expressed concern about potential jury misunderstanding, requesting clarification that count 124 pertained solely to the charged predicate acts, but the judge declined to provide further instructions, asserting that the jury had already been adequately informed.

Even if count 124 limited the conspiracy to the acts charged in count 2, the resolution of whether the admission of uncharged evidence constructively amended the indictment remains unresolved. The jury found that none of the racketeering acts in count 2 were proven, leading defendants to argue that their convictions must be based on the uncharged evidence. However, it was not necessary for the jury to conclude that any extortion acts occurred to establish guilt for Hobbs Act conspiracy. Thus, the limitation of count 124 does not conclusively address the constructive amendment claim.

Under the Fifth Amendment, defendants are entitled to be tried only on charges specified in the grand jury indictment. A constructive amendment occurs when the indictment's terms are altered, and such amendments are per se violations of the Fifth Amendment, warranting reversal without requiring proof of prejudice to the defendant.

A constructive amendment of an indictment occurs when evidence and jury instructions alter essential elements of the charged offense, creating a significant risk that the defendant could be convicted of an uncharged crime. Key cases illustrating this principle include Stirone, where the defendant was charged under the Hobbs Act for obstructing interstate commerce with sand, but the jury was improperly instructed that they could convict based on interference with steel shipments, leading to a reversal. Similarly, in Mollica, the indictment was found to be constructively amended when jury instructions allowed for a broader interpretation of conspiracy beyond income tax offenses, potentially leading to a conviction for money laundering instead.

In the current case, defendants argue that the introduction of evidence regarding uncharged payoffs risks a constructive amendment of their indictment. However, the court distinguishes this case from Stirone and Mollica, asserting that the proceedings did not amend the indictment. The defendants were adequately notified of the core charges and had two months' notice about the uncharged acts. The court also highlights that it is permissible to admit evidence that does not directly prove an element of the charged offense, with the trial court holding broad discretion in such matters. No reversal is deemed necessary as there was no risk of amending the indictment.

Judge Glasser allowed the admission of testimony regarding certain uncharged acts to demonstrate the existence of an enterprise in relation to the RICO counts and to prove knowledge, intent, and absence of mistake concerning the Hobbs Act counts, consistent with Federal Rule of Evidence 404(b). Previous case law supports the admissibility of such evidence for showing intent and the existence of an enterprise. The judge provided appropriate limiting instructions on the use of this testimony. 

Defendants contended that the jury charge improperly expanded the grounds for conviction by not clearly stating that the conspiracy was limited to the racketeering acts specified in the indictment. However, the court found that the jury instructions did not broaden the basis for conviction. The judge explicitly informed the jury that the defendants were only on trial for the crimes charged and reiterated this during the Hobbs Act conspiracy count. Additionally, the instructions clarified that the uncharged acts were admitted solely to demonstrate knowledge and intent. Overall, the court determined that the jury instructions adequately prevented any constructive amendment of the indictment. Other claims by the defendants were found to lack merit, leading to the affirmation of the district court's judgment.