United States v. Louis Daidone

Citations: 471 F.3d 371; 2006 U.S. App. LEXIS 31073; 2006 WL 3703175Docket: 04-3784-

Court: Court of Appeals for the Second Circuit; December 14, 2006; Federal Appellate Court

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The case involves Louis Daidone, a member of the Luchese organized crime family, who was convicted on five counts, including racketeering and conspiracy to commit extortionate loans, among others. The appellate court affirmed the district court's judgment, which sentenced Daidone to multiple life terms and additional years for his crimes. The charges stemmed from his orchestration of two murders—Thomas Gilmore and Bruno Facciolo—alongside his involvement in loansharking activities.

The indictment included:
1. Participation in a racketeering enterprise (Count One).
2. Racketeering conspiracy (Count Two).
3. Witness tampering by murder (Count Three).
4. Conspiracy to make extortionate loans (Count Four).
5. Conspiracy to collect loans by extortionate means (Count Five).

The ruling highlighted Daidone's role in the murders; Gilmore was killed under Daidone's directive after suspicions arose about him, while Facciolo was murdered to prevent him from cooperating with law enforcement. Daidone’s actions, including the staging of Facciolo’s murder and the symbolic gesture of placing a dead canary in his mouth, were indicative of the violence and intimidation employed by the Luchese family. The court underscored the sufficiency of evidence presented for the RICO charges, confirming the relatedness of the criminal acts as required by law.

Daidone was implicated in extensive loansharking activities beginning in 1988, with evidence showing he had around $80,000 in loans owed to him while incarcerated in June 1996. Between 1997 and 1999, he was involved in multiple extortionate loans ranging from $25,000 to a proposed two million dollars. On appeal, Daidone raises several arguments: 

1. He contends that his conviction for witness tampering by murder (Count Three) should be overturned due to statute of limitations issues and the jury not being instructed on premeditation.
2. He claims that the Southern District of New York was an improper venue for Count Three.
3. Daidone challenges the admission of uncharged racketeering acts as prejudicial and unnecessary.
4. He argues that the Sentencing Guidelines used for his sentence violated his constitutional rights.
5. He asserts that if his RICO convictions are overturned, the resulting "spillover prejudice" necessitates the reversal of the loansharking charge.

Central to his appeal is the assertion that the government did not prove a "pattern of racketeering activity" required under 18 U.S.C. § 1962(c) or (d). Daidone argues that the alleged racketeering acts—including two murders and loansharking—were unrelated, occurring years apart, involving different individuals, and motivated by distinct reasons, thus failing to demonstrate the necessary horizontal and vertical relatedness. He cites the Supreme Court's decision in H.J. Inc. v. Northwestern Bell, emphasizing that predicate acts must share similar characteristics or be interrelated, which he claims is absent in his case. Daidone argues that the government's reliance on the same evidence to meet both relatedness requirements undermines the proof standards established by the Supreme Court for racketeering activity.

A "pattern of racketeering activity" under the RICO statute necessitates at least two acts of racketeering, with one act occurring after the statute's effective date and the last within ten years of a prior act, excluding any imprisonment period (18 U.S.C. § 1961(5)). The courts have broadly interpreted this term, allowing for multiple predicate acts that can be part of a single scheme, provided they are related and indicate a likelihood of ongoing criminal activity (United States v. Indelicato, 865 F.2d 1370, 1373; United States v. Reifler, 446 F.3d 65, 91). Evidence of connections to organized crime is permissible to substantiate a RICO offense (United States v. Coiro, 922 F.2d 1008, 1016).

The Supreme Court established that to prove a pattern, the prosecutor must demonstrate that the predicate acts are related and pose a threat of continued criminal activity (H.J. Inc. 492 U.S. at 239). In this case, continuity is not contested; only relatedness is in question. Criminal acts form a related pattern when they share similar purposes, results, participants, methods, or distinguishing characteristics (Id. at 240). The requirement of relatedness includes both horizontal (predicate acts related to each other) and vertical (predicate acts related to the RICO enterprise) dimensions (United States v. Minicone, 960 F.2d 1099, 1106).

To establish vertical relatedness, the government must show that the defendant's commission of predicate offenses was enabled by their role in the enterprise or that the offenses relate to the enterprise's activities. Horizontal relatedness can be indicated by demonstrating that each predicate act is linked to the enterprise (United States v. Polanco, 145 F.3d 536, 541). The courts have a substantial body of case law addressing the requirements for a racketeering pattern, indicating that while "pattern of racketeering activity" lacks a precise definition, sufficient legal precedent exists to clarify relatedness requirements. The interpretation of H.J. Inc. by Daidone, which suggests distinct requirements for horizontal and vertical relatedness, is viewed as overly rigid, with the court considering the criteria outlined in H.J. Inc. as general guidance rather than strict, separate elements necessary for establishing a pattern of racketeering activity.

The overall pattern requirement in RICO prosecutions, which includes relatedness, serves to prevent the application of RICO to isolated or sporadic criminal acts. To establish a pattern of racketeering activity, predicate acts must demonstrate both vertical and horizontal relatedness to each other and to the enterprise. Predicate crimes often share common goals, victims, and participants, making complex criminal organizations like the Luchese crime family typical targets for RICO. While proving relatedness is essential for RICO liability, it is not a barrier to conviction if evidence overlaps in establishing both relatedness and connection to the enterprise. The government successfully demonstrated that Daidone's three predicate acts—two murders and loansharking—were interconnected and related to the Luchese enterprise, thus fulfilling the relatedness requirement. Regarding venue, 18 U.S.C. § 1512(i) permits venue in the district where the official proceeding was intended to be affected or where the alleged offense occurred. Daidone contends that, since the murder of Facciolo was linked to a California investigation and occurred outside the Southern District of New York, the venue in that district was improper.

A defendant waives venue objections unless specifically articulated in a motion for acquittal. In this case, defense counsel raised venue objections for Counts One, Two, Four, and Five but failed to do so for Count Three. Despite the district court's inquiry about Count Three, defense counsel did not present any objection, leading to the forfeiture of this issue on appeal. Regarding sentencing, Daidone's conviction on Count Three mandated a minimum life sentence, leaving no discretion for the judge to impose a lesser sentence post-Booker. All other arguments presented by Daidone were found to lack merit and did not warrant further discussion. Consequently, the judgment of the district court was affirmed.