United States v. Liborio Bellomo, Also Known as Barney, James Ida, Also Known as Jimmy, Also Known as Little Jimmy, Also Known as the Little Guy, and Nicholas Frustaci, Also Known as Nicky the Blond, Thomas Cestaro, Also Known as Gigali, Also Known as Gigalese, Thomas Barrett, John Schenone, Also Known as Big John, Anthony Pisapia, Also Known as Tony Waterguns, Also Known as Fat Tony, Louis Zacchia, Also Known as Louis Zack, Anthony Coiro, Michael Autuori, Leonard Cerami, Louis Ruggiero, Sr., Colombo Saggese, Also Known as Edward, Joseph Pisacano, James Pisacano, Albert Setford, Also Known as Spike, Vincent Batista, Also Known as Skippy, Vincent Romano, and Michael Generoso, Also Known as Mickey Dimino

Citations: 176 F.3d 580; 83 A.F.T.R.2d (RIA) 2328; 1999 U.S. App. LEXIS 8285Docket: 97-1332

Court: Court of Appeals for the Second Circuit; April 30, 1999; Federal Appellate Court

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James Ida and Nicholas Frustaci appeal their convictions following a jury trial in the Southern District of New York for multiple charges, including violations of the RICO Act, murder, conspiracy to murder, illegal gambling, extortion, and fraud against the IRS. The court affirms the forfeiture of Ida's property and upholds both Ida's and Frustaci's convictions. The indictment characterized the Genovese Family of La Cosa Nostra as a RICO-defined enterprise, part of a national organization known as 'the Mafia.' The government's case relied heavily on testimony regarding the hierarchical structure of La Cosa Nostra, which includes roles such as boss, underboss, and capos, with explicit rules for sharing criminal proceeds among members. Testimonies from former mob leaders D'Arco and Sessa provided insights into these structures, allowing the jury to evaluate their relevance to the Genovese Family's organization.

Defendants argue that various organizational rules were violated, including drug dealing by D'Arco and members improperly stating their rank. There is a conflict between D'Arco's assertion that gambling operation proceeds do not need to be shared with a capo and a government expert's contrary testimony, leaving the jury to assess credibility and the regularity of rule adherence. Defendants also challenge evidentiary rulings regarding hearsay, specifically citing the Gigante standard, which requires proof of a specific criminal conspiracy for coconspirator statements to be admissible under Fed. R. Evid. 801(d)(2)(E). Some challenged statements were not hearsay as they were commands directly heard by witnesses, such as Sessa’s testimony about orders from Persico and D'Arco’s account of his conversation with Amuso regarding his role as acting boss, which included gestures that conveyed meaning. Additionally, Sessa's statement about the motive for Dominick Somma's murder was considered to reflect his state of mind rather than truth of the matter, and D'Arco's testimony regarding his knowledge of the crime families was similarly reflective of his state of mind. Testimonies regarding Sessa's own actions and conversations were also deemed non-hearsay.

Sessa testified to executing a murder order by shooting an informer multiple times and subsequently reported the incident to the acting boss of the Colombo Family with a brief statement to ensure no record existed. Ida objected to the admission of this report, but the testimony was deemed appropriate since it was Sessa’s own statement. D'Arco also provided testimony regarding a narcotics transaction and reported seeing Dilorenzo with a federal informer, despite hearsay objections. The testimony was relevant to the murder conspiracy involving Ida, supported by independent evidence. Both appellants raised general objections regarding testimonies about murders by other crime families, arguing it could mislead the jury regarding the Genovese Family's behavior. The court determined that such evidence was relevant and within its discretion to admit, especially as defense counsel had already attacked the credibility of the witnesses. 

The court found that no hearsay evidence significantly impacted the defendants' rights, affirming the statute that allows for judgment despite minor errors. Ida contested the sufficiency of the government's evidence on all counts related to racketeering and RICO violations, with the court reviewing the challenges individually. D'Arco's testimony regarding conversations about Dilorenzo's activities and plans to address a potential informer was allowed, as it fell under the coconspirator exception to hearsay rules.

In late 1988, after being released from prison, Dilorenzo was seen with D'Arco, a member of the Lucchese Family, and other associates. D'Arco warned his family to avoid Dilorenzo, suspecting him of being an informant. D'Arco later met with Ida, who expressed concern over Dilorenzo's connections and suggested they need to eliminate him, stating, "We are going to whack him." On November 25, 1988, Dilorenzo was shot to death at his home. Witnesses reported seeing a man shoot into his house and a suspicious car parked outside. Four collect calls were made from a public phone to Ida's home shortly after the murder, indicating possible involvement. Evidence suggests that Dilorenzo, as a member of the Genovese Family, was at risk if perceived as an informant. Ida, a capo in the Genovese Family, actively warned others about Dilorenzo and made statements indicating a conspiracy to murder him. Reasonable inferences from the communications and actions point to Ida's participation in the plan to kill Dilorenzo, aligning with the interests of the Genovese Family.

The murder of Dilorenzo is presented as an overt act by the conspirators, evidenced by four collect telephone calls made from West New York to Ida's residence on the night of the murder. Although the jury did not know the identities of the caller or the recipient, they could reasonably infer a connection to the murder due to the unusual nature of the calls and the absence of any other calls at that time. Possible alternative explanations for these calls, including unrelated criminal activity or involvement by the Lucchese Family, are dismissed as unsupported hypotheticals. The jury could conclude that the persistence of the calls indicated a connection to the murder, as well as the credibility of D'Arco, who implicated the Genovese Family.

Additionally, John Schenone, an associate of the Genovese Family, threatened to kill Dominic Tucci after discovering his affair with Schenone's girlfriend. Schenone consulted Richard Sprague about carrying out the murder but stated he needed Ida's permission, which was ultimately denied. Tucci, in response to the threat, moved in with his mother, who had connections to the Genovese Family, but was reassured by a family member not to worry about Schenone's threat.

Schenone expressed anger over Tucci's affair and discussed plans to murder him with Sprague, specifying that the act could not occur at Tucci's mother’s house. Schenone instructed Sprague to retrieve a gun, which was later seized by the FBI, preventing the murder. The jury inferred that Ida had obtained the boss's approval for Tucci's murder, indicating an agreement with Schenone. Ida's inquiry about the “Dominic [Tucci] thing” suggested his involvement and intent to resolve a conflict benefiting the Genovese Family's interests in the racketeering enterprise. A majority of the court found sufficient evidence of Ida’s conspiracy to murder Tucci, while Judge Noonan dissented, citing a lack of intent and purpose to further the racketeering enterprise.

Ida was also convicted of mail fraud against the City of New York related to the Feast of Saint Gennaro in 1993 and 1994. The Society of Saint Gennaro, a tax-exempt organization, organized the feast and collected license fees based on vendor contracts. Ida’s crew collected cash from vendors, diverting approximately $2,600 per stand from the Society. Ida led this scheme as a member of the Genovese Family. Evidence included testimony from D'Arco, who confirmed that organized crime controlled the Feast, detailing how the Genovese Family, particularly Ida, managed operations since the late 1980s.

A rational juror could conclude that Ida was aware of and benefitted from cash payments made by vendors to his crew, indicating his knowledge that the Society required permits from the City, which involved fees based on rental income. Evidence suggests that Ida was aware the Society was not reporting these cash payments, which were not subject to the City’s 20% tax, thereby facilitating a scheme to defraud through false reports to the City. This intent to conceal cash income from the City is essential for proving mail fraud and conspiracy to commit mail fraud, as highlighted by the case United States v. Bortnovsky.

Ida was also convicted of conspiring to defraud the United States by obstructing the Internal Revenue Service (IRS) under 18 U.S.C. § 371, known as a 'Klein conspiracy' after United States v. Klein, which involves acts of concealing income to impair the IRS. Ida's concealment included causing the Society to file false Tax Exempt Organization Returns, corroborated by his control over vendor collections and the Society’s Treasurer, Zacchia. Additionally, Ida's own 1994 tax return failed to account for income from the Feast, supporting a conspiracy to hide income from the IRS.

Ida faced charges for operating two illegal bookmaking operations, one at Tazza di Caffe from 1991 to 1995 and another at an East 53rd Street apartment from 1994 to 1995. Evidence included recorded bets and betting slips, with more than five individuals employed at each location, satisfying the requirements of 18 U.S.C. § 1955. Although Ida contested the sufficiency of evidence linking him to these operations, it was established that Thomas Cestaro, a member of his crew, managed the Tazza di Caffe, and crew members were expected to share proceeds with their capo. The connection to the East 53rd Street operation was circumstantial but reinforced by an employee's expectation that Cestaro would pay for legal representation after a raid.

Ida's involvement in illegal gambling also led to his conviction for conspiring to defraud the United States by concealing income from these operations, evidenced by his failure to report earnings on his 1994 and 1995 tax returns and Cestaro's role as the front for the gambling enterprises.

Local 46 of the Mason Tenders Union, comprised of unskilled laborers at construction sites in Queens, was historically controlled by the Lucchese and Genovese Families. As a union election approached in 1989, the Lucchese Family's candidate, Joe Luciano, faced opposition from the Genovese Family, which backed Ed Diovisalvo. Accusations surfaced that Luciano was a government informer, but these were retracted, and he was elected president. The negotiations between the crime families revealed a disregard for democratic processes, leading to convictions for Ida and Messera for conspiracy to commit extortion under 18 U.S.C. § 1951, as their actions aimed to transfer control of the union through threats of violence. The right of union members to participate in elections is recognized as property under the Hobbs Act.

Ida was also convicted of attempted extortion due to Diovisalvo's actions during the negotiations, where he extorted contractors associated with Local 46. A specific case involved P. Chimento Trucking, which paid annual fees to a Genovese capo but refused to sign contracts with Lucchese-controlled unions. Ida intervened to assert Genovese control over Chimento, and after a strike led by Lucchese unions, Chimento ultimately paid $110,000 to end the strike, resulting in Ida's conviction for conspiracy to commit extortion for the Lucchese Family.

Ida contends on appeal that there is no evidence supporting claims of extortion from Chimento Trucking for the Lucchese Family's benefit, portraying himself as a supporter of the company during its strike. The government argues, supported by the district court's comments on Ida's acquittal motion, that the jury could reasonably infer Ida's involvement in securing payments to leverage negotiations or ensure the Genovese Family maintained control over Chimento. The court noted that there was sufficient evidence for the jury to believe Ida participated in a conspiracy involving extortion from Chimento Trucking.

Additionally, Ida was charged with transporting stolen property across state lines, specifically a Caterpillar loader valued over $5,000, between November 1994 and April 1995. Schenone, a co-defendant, was convicted in this matter, and evidence suggested that Ida, as Schenone’s crew leader, would share in the criminal proceeds. The conspicuous nature of the stolen machinery supported the inference that it was transported out of New York to evade detection.

The government established racketeering under 18 U.S.C. § 1962(c) and (d) by proving two predicate acts, including mail fraud, illegal gambling, extortion, and transportation of stolen property. The majority of the court also found sufficient evidence for a conspiracy to murder Tucci as part of the racketeering enterprise.

Ida requests a retroactive misjoinder finding regarding any predicate acts insufficiently proved. The court agreed that the conspiracy to murder Ralph Desimone was inadequately supported. Evidence revealed that in 1991, Ida provided a list of potential Genovese Family members to D'Arco, the Lucchese Family acting boss, who identified Desimone as a government informant. Following discussions involving Ida and other mob leaders, Generoso indicated that Desimone would be dealt with, leading to Desimone's murder later that year, with his body discovered in a car at LaGuardia airport. The government implicated Louis Ruggiero, a friend of Desimone, as the murderer in a related racketeering trial.

The jury could reasonably conclude that leaders of the Genovese Family, including Ida, conspired to have Desimone killed based on D'Arco's testimony. However, Ida argued on appeal that there was insufficient evidence of an overt act by the conspirators to execute this plan. The manner of Desimone's death suggested it was a professional murder, with money left in his wallet indicating robbery was not the motive. Although Ruggiero was acquitted of the racketeering charge related to the murder, the district court found him to be the murderer. The government claimed Ruggiero was a long-time associate of the Genovese Family, supported by evidence of his connections to Dilorenzo and Desimone, as well as his visits to the Palma Boys Social Club. Nevertheless, this evidence did not definitively establish Ruggiero's affiliation with the Genovese Family or his role in their conspiracy to murder Desimone.

While a jury could infer that the Genovese Family's decision to murder Desimone was followed by the act of murder itself, the evidence did not allow a reasonable jury to conclude beyond a reasonable doubt that this murder was the overt act of the conspirators. Desimone's death occurred at least four months after the alleged conspiracy, making it difficult to establish a direct connection. Consequently, Ida's conviction on this count could not be upheld.

Despite this, the court found no reason to order a new trial for the remaining convictions. The conspiracy charge was potentially inflammatory, but since the jury determined Ida was involved in two murder conspiracies, it was speculative whether a third would have had a greater impact. The counts were distinct and did not overlap in evidence. Other objections raised by Ida were deemed without merit, and he did not contest his life imprisonment sentence. Following his conviction, a jury trial was held regarding the criminal forfeiture of Ida's property.

The forfeiture provision under 18 U.S.C. § 1963(e) does not define the burden of proof required for a jury. The court instructed the jury that the government must demonstrate its case for forfeiture by a preponderance of the evidence, leading to a jury verdict of forfeiture. The district court subsequently issued an order to forfeit $1,000,000 of Ida's property. On appeal, Ida argues that the jury was incorrectly instructed and that the standard should have been proof beyond a reasonable doubt. However, the Supreme Court has established that criminal forfeiture is considered part of the sentencing process, where fact-finding is evaluated by a preponderance of the evidence, as confirmed by multiple circuit court decisions. Thus, the jury instruction was appropriate.

Nicholas Frustaci was convicted of two predicate acts of racketeering related to conspiracy to commit extortion and running an illegal gambling business, in violation of 18 U.S.C. §§ 1962(c) and 1962(d), as well as conspiracy to commit extortion under 18 U.S.C. § 1951 and conspiracy to defraud the IRS under 18 U.S.C. § 371. His membership in the Genovese Family was not contested during the appeal. 

Frustaci's involvement in a conspiracy to extort N.Y. Tech Windows, prompted by a meeting with Lucchese Family capo Peter Chiodo, is detailed. Following N.Y. Tech’s termination of a business arrangement with Summit Restoration, Chiodo asserted ownership over Summit’s assets and demanded a payment of $100,000. Through negotiations, Frustaci helped reduce this payment to $25,000, which was paid in cash. Evidence from recorded conversations supports the conclusion that Frustaci conspired with Chiodo to extort N.Y. Tech. Frustaci also objected to a closing argument by the prosecutor regarding payments made by the company for a car used by him, suggesting the company was coerced into making such payments.

The prosecutor's inference regarding Frustaci's involvement was deemed reasonable despite contradicting the government's witness. The jury's acquittal of Frustaci on the extortion charge suggested they focused solely on his agreement with Chiodo. The conspiracy was linked to racketeering, and Frustaci argued on appeal that the jury was improperly charged. However, he did not object to the jury instructions at trial, leading to a plain error review. The charge required the defendant to have a role in the enterprise's operation, which was supported by evidence of Frustaci's involvement with the Genovese Family.

Frustaci's claim that the trial judge's questioning of a witness was improper was dismissed as frivolous; the judge's inquiries were seen as enhancing clarity. Evidence of Frustaci's involvement in illegal gambling was established through a police raid in March 1991, where significant gambling paraphernalia was found, and Frustaci was identified as a co-owner. The admission of five prior gambling convictions was upheld as relevant to proving the enterprise's size and legality. Objections by Frustaci's counsel regarding the relevance and hearsay of these judgments were either properly overruled or forfeited due to lack of contemporaneous objection. The judgments effectively demonstrated the involvement of five or more individuals in the gambling enterprise, supporting the government's case.

The trial's integrity was upheld despite a procedural shortcut that went unchallenged at the time. Frustaci did not meet the plain error standard, so the court did not address the potential error of admitting state convictions. He argued he was denied the opportunity to claim that guilty pleas may occur for reasons unrelated to guilt, such as avoiding trial costs; however, he provided no evidence to support this claim regarding his gambling pleas. The district court correctly rejected his unsupported argument during jury deliberation. 

Frustaci's conviction for illegal gambling, as a second racketeering act, was substantiated by evidence, and he did not contest the government's proof of the other RICO elements, confirming his violation of 18 U.S.C. § 1962(c) and (d). Additionally, he was convicted for conspiracy to defraud the United States by concealing income from his gambling activities, violating 18 U.S.C. § 371. Evidence included his employees destroying records and his misrepresentations about income to the Veterans’ Administration from 1991 to 1994, coupled with his failure to file a federal tax return.

Frustaci contended that the only evidence of gambling income was prior to March 1991, suggesting his indictment on June 10, 1996, was barred by the five-year statute of limitations. This objection was not previously raised and was thus forfeited. Furthermore, it lacked merit as the applicable limitation period is six years under 26 U.S.C. § 6531(1) and (8), with related acts occurring within this timeframe. Frustaci did not contest his five-year prison sentence followed by three years of supervised release. The judgment against Ida was partially affirmed and partially reversed regarding a conspiracy to murder charge, while Frustaci's judgment was affirmed.