United States v. Stromberg (268 F.2d 256, 1959)

HINCKS, Circuit Judge.

Fifteen defendants in this case appeal from judgments of convictions entered against them upon a jury verdict. The indictment, in a single count, charged forty-six defendants and sixteen others under 18 U.S.C.A. § 371 with conspiring to violate 18 U.S.C.A. § 212 (bribery of customs officials), 21 U.S.C.A. §§ 173, 174 (narcotics laws) and to defraud the United States of its right to have the Customs Service administered free from corruption.

Before the trial, two defendants entered guilty pleas. The Government consented to the motions of three defendants for severance and itself moved for severance as to eleven more. Another eleven are fugitives from justice or unidentified. The remaining nineteen were tried together, although a number of them made timely motions for separate trial. The opinion of Judge Palmieri,. D.C., 22 F.R.D. 513, deals in part with the severance motions, as well as with other pretrial motions. At the end of the Government’s case, a judgment of acquittal was directed by the court in favor of one defendant. The jury returned verdicts of guilty against the other eighteen, and fifteen are now before us on appeal.

At the trial, the Government’s case depended principally upon the testimony of three witnesses. The first of these, one Lafitte, a Government employee and informer, testified to conversations with a number of the alleged conspirators during the first part of the conspiracy; the whole conspiracy, the indictment charged, continued from 1950 to 1956. In July, 1952, Lafitte met one Aron, who ran several corporations and maintained offices in New York City. Through Aron, Lafitte met a number of the defendants named in the indictment: Gelb, LaBonte,3 Baruche,3 and Bris-bois 2 whom Aron described as his Canadian representative. This group met frequently at lunch, dinners and at Aron’s office; their conversations, according to Lafitte, frequently involved the narcotics trade. In one of these conversations, Gelb told Baruche he was paying too much for heroin in France. There was also discussion of a transaction “with the Boston people” in which $80,000 had been lost; it was generally agreed that a trip to Boston was necessary because the Boston people “would have to be straightened out.” Also, the purchase of a coalyard in Boston was under consideration, through which narcotics might be smuggled. Finally, in November, 1952, Aron and Lafitte went to Boston with two others, not accused in the indictment: Gelb did not go because too closely identified with traffic in narcotics. In Boston, they met Brisbois, Moffie,3 and Bucelli and there was general discussion relating to the smuggling of narcotics. It appeared from the conversations that narcotics had already been smuggled through a Boston coal-yard. The success of these further negotiations with the Boston group does not appear in the testimony. Shortly thereafter, however, Aron and Lafitte returned to New York. There the social contacts between Lafitte and Baruche, Gelb and Aron continued. Upon one occasion, Lafitte met Behrman,2 whose name figures largely in the alleged conspiracy in its later stages. He also testified that he met Samnick2 and Dan-is,2 Customs Inspectors, upon various occasions, in the company of Aron, Gelb and Baruche; and each made a remark about the ease of smuggling goods through Customs. Aron described Sam-nick to Lafitte as “one of his Customs men.” And the active assistance of Customs Inspectors was used as a talking point by Baruche in attempting to persuade Lafitte to join them in the narcotics business. Lafitte chose to remain unpersuaded, however; and, after he had reported his findings to the Government, some time’ early in 1953, it was apparently thought advisable to let his contact with the Aron group lapse.

Several aspects of Lafitte’s testimony were corroborated by minor witnesses not named as defendants. Montfiore testified of dealings with Aron frequently after 1949, at the time when Aron was engaged in importing resistors for television tubes; that in Aron’s office, he frequently saw Gelb, Baruche, Danis and Samnick; and that Aron told him that the Customs Inspectors were useful to him in avoiding red tape in getting in resistors by air. He testified further that although Aron said, once, that he owed Samnick and Danis money, he never saw any money passed; but did once see a postdated check, which Aron said' was for Samnick. Also that Aron had in 1952 or 1953 described a transaction between Gelb and Baruche in which “Gelb had taken $30,000 from Baruche,” Aron remarking that he was “very glad he was out of it.”

One Adatto, a nephew of Baruche’s who worked for Aron, corroborated the fact that Samnick and Danis were often in Aron’s office; he testified that he once sought Samnick’s help to expedite the entry of some electronic material for Aron and that he once took part in transferring funds from Gelb and Aron to Baruche in Europe through several Swiss bank accounts.

Finally, one Brenner, Aron’s secretary, testified to frequent visits at Aron’s office by Gelb, Baruche, Samnick and Danis.

After the period covered by Lafitte’s testimony, which described events up to the end of 1952, evidence of the conspiracy breaks off until the ehd of 1953, when James Ewing, the second major prosecution witness, appeared on the scene. Ewing, himself a dealer in narcotics in Detroit, began to buy narcotics in New York from Vellucei,5 delivered to him by Tedesco. In answer to a complaint that the narcotics supplied were overly diluted, Vellucei said, according to Ewing, that he was going to deal with the “mob around 50th and Broadway.” Aron’s office, at this time was at 49th St. Somewhat later, Ewing testified, Vellucei began to purchase from Behr-man and Gelb, to whom Ewing was introduced. He testified to one purchase in which the money he paid Vellucei was passed directly on to Gelb.

In March, 1954, Gelb was arrested by Federal Narcotics Agents. Government agents testified to the discovery of huge, amounts of narcotics in two apartments used by Gelb where there was also discovered a letter from Baruche to Gelb. And the landlord at one of the apartments testified that Behrman was a frequent caller. According to one witness, Behrman was also seen at Federal Detention Headquarters talking to Gelb, after Gelb’s arrest; and there was evidence that a letter was passed, by another witness, from Behrman to Ba-ruche.

The arrest of Gelb and the seizure of the huge cache of narcotics, Ewing testified, made it necessary for Vellucei and Behrman to raise from another source at least $50,000 to pay for a shipment of narcotics shortly to arrive from France. Ewing testified that to meet this need they obtained the aid of Strom-berg,2 who advanced them money; that later repayments were made on several occasions, varying in amount from $10,-000 to $25,000; that present at these meetings was Teitelbaum, who was a constant companion of Stromberg; that the money obtained from Stromberg was delivered to “Gene’s [Baruche’s] partner’s house”; that he, Ewing, accompanied the deliverer to 39 E. 78th Street, a building in which Aron’s apartment was also located, and that after the shipment of narcotics arrived Stromberg was paid off, in installments. According to Ewing, Stromberg continued to finance the imports and once agreed to take steps to settle a jurisdictional dispute with another distribution ring; on one occasion in Ewing’s presence money was paid by Vellucei to Teitelbaum for delivery to Stromberg; and after consultation with Stromberg and Vellucei, Behr-man made the arrangements with Ba-ruche, the European supplier, passing on to him complaints about the quality of narcotics, and, on one occasion, going to Europe himself.

Ewing testified that Vellucei told him, “We have Customs men paid off,” and that Vellucei handled the distribution in New York. In the summer of 1954, Ewing’s relationship with Vellucei became closer: while carrying on the distribution of narcotics in Detroit, through agents, he nonetheless managed to spend a great deal of time in New York. He began driving for Vellucei and was present at a number of meetings with retailers, including De Saverio,2 the Lessa brothers,2 Puco,2 Seto,2 and Di Palermo, at which orders were placed and cash, for earlier deliveries, was received. In June or July of 1955, Ewing met Baruche, who had come to the United States in answer to complaints that one shipment of heroin was bad. When the shipment was tested and found bad, in the presence of Vellucei and Behrman, Baruche agreed to bear the expense of replacement. In August of 1955, Ewing was summoned to New York from Detroit by Vellucei; they drove to Hobo-ken, where they met a Customs Inspector, identified by Ewing as Snyder,2 who delivered to them two suitcases. Vellucci told Ewing that the suitcases contained heroin; and shortly thereafter, Ewing was paid off for his help, in heroin.

Several aspects of Ewing’s story were corroborated by other witnesses. Hart, a woman living with Ewing during the period, testified that she had received a number of deliveries of heroin from Te-desco, Vellucci’s agent. And both she and Frank, a Detroit police officer in Ewing’s pay, corroborated Ewing’s account of a trip to New York and a meeting with Vellucei during which Vellucei showed Ewing how to test cocaine.

The last principal Government witness was one Basile, a narcotics retailer. His testimony related mainly to his source of supply, Di Palermo, whose business was operated in a candystore at 46 Prince Street. A Narcotics Agent testified that he had followed Vellucei and Behrman, in October, 1955, to the same address. Basile testified that he and his partners, Yacono3 and Maimone,2 had been supplied with both cocaine and heroin by Di Palermo; that one Greenberg 3 offered to introduce him to Behrman, who would sell him heroin for $7,500 a kilo, which was less than he was then paying Di Palermo; that when apprised of this competition, Di Palermo agreed to sell to him, Basile, for $7,000 a kilo, if Basile would buy in quantity, admitting that Behrman was his source. According to Basile this course of dealing continued without incident, except when a delivery of narcotics at about the beginning of September proved to be inferior. Di Palermo then told him “it’s Natie Behrman’s goods, its got to be o. k.” Somewhat later, Basile talked to Behrman and Vellucci, who said they had “got hit with a bad batch.” On one occasion, Basile saw Di Palermo turn over money to Vellucci. Basile also implicated Mirra and Paradise, who regularly bought narcotics from him.

Upon this evidence, the Government maintains that a single conspiracy, as charged in the indictment, was properly found by the jury and that the convictions must be upheld. More specifically, it urges that Aron and Baruche, operating behind the facade of a legitimate importing business, were the central figures in a syndicate engaged in importing narcotics into this country. The Government maintains that Baruche served as the purchasing agent of narcotics in France throughout the life of the conspiracy; Samnick and Danis, working through Aron, assisted the combine in smuggling narcotics into the country through New York; Bucelli handled the Boston branch of the smuggling operation; Brisbois distributed narcotics through Canada; and Gelb financed the group’s activities and handled the New York distribution. This was the opening phase of the conspiracy which, the Government maintains, was established by the testimony of Lafitte. Subsequent importing and distributing operations were part of the same continuing conspiracy enlarged to include additional members. Thus, after Gelb’s arrest, Stromberg became the financier and Vellucci and Behr-man became the chiefs of the distributing apparatus. The testimony of Ewing and Basile, it is argued, ties in the other defendants as links in the conspiratorial chain in the later period.

The appellants’ main defense consists of an attack on the Government’s assertion that a single and continuing conspiracy was proved. They point to the time gap, between December, 1952, when Lafitte’s testimony ends, and December, 1953, when Ewing’s begins. In this contention, they rely principally upon United States v. Russano, 2 Cir., 257 F.2d 712.

It is true that many of the actors in the group described by Lafitte are not seen again after December 1952: Brisbois, Bucelli, Samnick and Danis do not reappear, and the evidence connecting Aron to the later period is slight. The links mainly relied upon by the Government are Baruche, Gelb and Behrman. We think Behrman’s one reported appearance at Aron’s office is hardly strong enough to tie him to the conspiracy before 1953; but Baruche and Gelb were both central participants in each phase, until Gelb’s arrest in early 1954. In United States v. Russano, supra, there was some positive evidence that the first conspiracy had ceased between 1952 and 1955, when the second commenced. We find no parallel evidence here: Gelb and Baruche’s activities, central to both phases, were exactly the same after the gap in testimony as before, and no intervening change was shown. See United States v. Liss, 2 Cir., 137 F.2d 995, certiorari denied 320 U.S. 773, 64 S.Ct. 78, 88 L.Ed. 462. A conspiracy, once established, is presumed to continue until the contrary is shown. United States v. Cohen, 2 Cir., 145 F.2d 82, certiorari denied 323 U.S. 799, 65 S.Ct. 553, 89 L.Ed. 637; Hyde v. United States, 225 U.S. 347, 32 S.Ct. 793, 56 L.Ed. 1114; Poliafico v. United States, 6 Cir., 237 F.2d 97, certiorari denied 352 U.S. 1025, 77 S.Ct. 590, 1 L.Ed.2d 597; Marino v. United States, 9 Cir., 91 F.2d 691, 113 A.L.R. 975. We hold there was sufficient evidence to go to the jury as to the existence of a single continuing conspiracy.

This conclusion is not invalidated by the absence of evidence to show that some of the “New York members” of the alleged conspiracy, including the Customs officers, knew of the existence of the “Boston members” or their operations in Boston or Canada, and vice versa. For this is not the case of a “circle conspiracy” such as was involved in Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557, or of a single transaction such as in United States v. Peoni, 2 Cir., 100 F.2d 401. Here the evidence plainly supported a "chain” type conspiracy7 such as was involved in Blumenthal v. United States, 332 U.S. 539, 556-557, 68 S.Ct. 248, 92 L.Ed. 154; United States v. Bruno, 2 Cir., 105 F.2d 921, reversed on other grounds 308 U.S. 287, 60 S.Ct. 198, 84 L.Ed. 257; United States v. Cohen, supra; United States v. Rich, 2 Cir., 262 F.2d 415; United States v. Carminati, 2 Cir., 247 F.2d 640, certiorari denied 355 U.S. 883, 78 S.Ct. 150, 2 L.Ed.2d 113; United States v. Tramaglino, 2 Cir., 197 F.2d 928, certiorari denied 344 U.S. 864, 73 S.Ct. 105, 97 L.Ed. 670. For here there was evidence of a core of conspirators (Aron, Baruche and Gelb) who were buying, importing, and distributing narcotics for sale in large quantities in successive transactions. As the cases above cited show, from such evidence it might rationally be inferred that one joining such a conspiracy knew that it had a scope and that, for its successful operation, it required a widespread organization, more comprehensive than may have been disclosed by any contact or transaction of which he had knowledge through his actual personal participation. Thus activities by Boston conspirators in Boston were not outside the scope of the conspiratorial agreement merely because not shown to have been specifically known to certain of the New York conspirators, and vice versa. Each defendant, once found to be a member whatever the level of his participation may have been, might be found intentionally to have contributed to the success of the overall conspiracy.

The appellants also contend that the convictions should be reversed because obtained in “a mass trial” in which so many defendants were involved that, especially in view of the complex issues and the volume of evidence received “subject to connection,” the jury could not properly evaluate and apply the evidence to the individual defendants. Here too we disagree. In so holding, we do not rest upon the fact that the mere number of defendants on trial, or of alleged conspirators involved, was no greater than in other cases in which convictions have been affirmed, such as the Bruno and Cohen eases, cited above. United States v. Falcone, 2 Cir., 109 F.2d 579, affirmed 311 U.S. 205, 61 S.Ct. 204, 85 L.Ed. 128. Nor do we think it determinative that no abuse of discretion was shown in denying below pretrial motions for severance. We place our holding squarely on the fact that, in the context of this trial, nothing in the issues, the evidence or the rulings warrants a conclusion that the number of the defendants prevented the jury from appraising the independent evidence against each defendant and meting out individual justice under the law.

Broadly viewed, the Government’s case rested on the testimony of three witnesses, Lafitte, Ewing and Basile, whose credibility was vigorously assailed by the defendants. Surely it was not beyond the capacity of the jury to decide whether these witnesses were to be believed. And once it was determined that these witnesses were to be believed and that the acts and declarations of the defendants and their alleged coconspirators, to which these witnesses had testified, had indeed been made, we think it by no means a task of insuperable difficulty for the jury to comply with the judge’s instructions and determine as to each defendant the issue of membership in a single continuing conspiracy on the basis of the independent evidence — i. e., the evidence as to his own acts and admissions.

There was nothing particularly complicated about the independent evidence which connected each defendant to the conspiracy. Its application involved the usual jury task of collating the separate items of independent evidence relating to each defendant and determining whether in sum total it warranted the inference of membership. To be sure, because of the number of the defendants and the exigencies of trial the several items of direct evidence relating to a particular defendant were interspersed throughout a record comprehensive enough to cover all. But even if it might have taxed the capacity of a jury single-handed, with memory of the evidence unrefreshed, to filter out and collate the several items of evidence relating to the connection of each defendant, this jury had the aid of a summary of such evidence given by the judge in his charge. Notwithstanding the number of defendants, we are confident that aided by the judge’s charge the jury had in mind the evidence unconditionally received against each defendant which linked him with the conspiracy.

It is true, that in addition to the independent evidence of the acts and declarations of the individual defendants, there were before the jury, subject to connection, numerous incriminating hearsay declarations of coconspirators which under the judge’s charge were competent only against such defendants as were found by the jury to be linked to the conspiracy by independent evidence and only if made in the furtherance of the conspiracy. The appellants contend that with so many defendants on trial the jury could not keep these two categories separate. But as Judge Hand pointed out in United States v. Dennis, 2 Cir., 183 F.2d 201, 230-231, affirmed on other grounds 341 U.S. 494, 71 S.Ct. 857, 95 L.Ed. 1137, it was, at least under the preferred doctrine, a preliminary question for the judge to decide as to each defendant whether, if the Government’s witnesses were believed, he and the various declarants were engaged in a common conspiracy which the declarations helped to realize: it was for the jury on all the evidence “to decide whether they believed the witnesses beyond a [reasonable] doubt.” In this view of the law, if the judge, taking the testimony of the Government witnesses as true, decides that a given declarant and a given defendant were engaged in a common conspiracy, which the declarations helped to realize, the declarations of the coconspirators are left “to the jury to use like any other evidence * * * ” And there is no need for the jury “to keep their minds in isolated compartments” as would be the case if the preliminary question were left to the jury. See also Glasser v. United States, 315 U.S. 60, 74, 62 S.Ct. 457, 86 L.Ed. 680; United States v. Pugliese, 2 Cir., 153 F.2d 497; United States v. Com-pagna, 2 Cir., 146 F.2d 524, certiorari denied 324 U.S. 867, 65 S.Ct. 912, 89 L.Ed. 1422. Accordingly, once the judge by his denial of motions for judgments of acquittal made at the close of the Government’s case had himself decided the preliminary question as to whether the declarations of coconspirators in the execution of the conspiracy had been connected under the rule of the Dennis and Pugliese cases, there was no need for the jury to keep the evidence of declarations conditionally received in “isolated compartments” of their minds.

Here, as Judge Hand suggested in his opinion in the Dennis case, the charge was overly favorable to the defendants. For the judge, by denying the motions for acquittal, himself decided as to each defendant the preliminary question of connection to the conspiracy by independent evidence. Yet he instructed the jury that only if it also decided the preliminary question adversely to a defendant could it proceed to consideration of the ultimate issue of his guilt beyond a reasonable doubt on all the evidence. The error, since in favor of the defendants, is of course not ground for reversal.

Moreover, we must not lose sight of the fact that the difficulties which the appellants envisage stem from the number of conspirators rather than the number of defendants on trial. The same evidence would have been admissible similarly subject to connection and the same problems would have arisen if each of the appellants had been tried separately. In the one situation as in the other, the number of conspirators would have been the same. United States v. Carminati, supra. And of course conspirators are not entitled to immunity merely because there number is great. United States v. Cohen, supra; Kotteakos v. United States, supra. Indeed, broadly considered, the large conspiracies are potentially more dangerous than the small ones.

The foregoing holdings, however, do not finally dispose of the objections of a number of the individual defendants that the evidence was insufficient to support a finding that each was a member of the conspiracy. Most of these objections are directed at the credibility of the principal Government witnesses. In so far as this is the case, they will be disregarded, for of course it is not the function of an appellate court to redetermine controverted issues already decided by the jury. Cramer v. United States, 325 U.S. 1, 65 S.Ct. 918, 89 L.Ed. 1441; United States v. Markman, 2 Cir., 193 F.2d 574; United States v. Compagna, supra; United States v. Manton, 2 Cir., 107 F.2d 834, certiorari denied 309 U.S. 664, 60 S.Ct. 590, 84 L.Ed. 1012. But it is incumbent upon us to examine contentions that even if the Government witnesses are believed the independent evidence connecting each defendant with the conspiracy is insufficient to sustain his conviction. Glasser v. United States, supra.

As to the appellants Samnick and Danis, we are unable to find evidence which warranted submission to the jury. Much of the evidence relating to them was hearsay: Lafitte testified that Aron described each as one of his Customs men, but not in their presence; a check, drawn by Aron payable to cash was said by him to be for Samnick, again not in his presence. Each, to be sure, was frequently in Aron’s office and was frequently entertained; and Samnick, upon at least one occasion, was called to expedite the entry of resistors for Aron’s apparently legitimate importation business. But mere association with conspirators is insufficient basis for a finding of participation. United States v. Di Re, 332 U.S. 581, 68 S.Ct. 222, 92 L.Ed. 210; Aikens v. United States, 98 U.S. App.D.C. 66, 232 F.2d 66; United States v. Moloney, 7 Cir., 200 F.2d 344. The only proof which could possibly be considered independent evidence of participation consists of the statements, one by each of these two defendants, made to Lafitte. As to one of these statements, it is not clear that the subject-matter was narcotics rather than resistors. And each might not unreasonably be construed only as hypothetical comment: after all, there was no evidence whatever that either Samnick or Danis had ever actually used the smuggling technique which they mentioned. It may seem strange that narcotics conspirators should discuss such techniques at luncheon with friends not members of the conspiracy. But no inference unfavorable to these defendants may be drawn from this fact: Lafitte’s own testimony shows that they discussed their nefarious business with him knowing that he was not a coconspirator. As to these two defendants, the independent evidence was too slight to warrant the admission of hearsay declarations and too slight to submit to the jury. Their motions for a directed verdict should have been granted.

We also think that the conviction of the appellant Snyder must be reversed. At the trial, it was stipulated that Snyder had been introduced to either Aron or Baruche in 1949, before the conspiracy began. Aside from this, which standing alone was insufficient to support a conviction, the only incident connecting Snyder with the conspiracy is the delivery of two suitcases, later found to contain heroin, to Vellucci and Ewing in Hoboken. In United States v. Reina, 2 Cir., 242 F.2d 302, certiorari denied sub nom. Moccio v. United States, 354 U.S. 913, 77 S.Ct. 1294, 1 L.Ed.2d 1427 we held that participation in a single isolated transaction was an insufficient basis upon which to bottom an inference of continuing participation in a conspiracy. For aught that appears in this record, this was Snyder’s only transaction with the group; under the reasoning of the Reina case, the evidence is insufficient to support the inference that Snyder knew or accepted the conspiratorial aims or that his participation went beyond the single transaction.

The appellants De Saverio and Seto also invoke the Reina decision. But the evidence against both of these appellants was not limited to a single transaction. As to De Saverio, Ewing testified to a conversation between De Saverio and Vellucei about the amount of money, $12,-000, owed to Vellucei “for the balance of a kilo and part .on a kilo that he had not paid for.” Taking the conversation in context, we think that, in the light of the evidence of the amount of narcotics involved and the manner of payment, a jury might reasonably infer the two were discussing payment for more than a single sale and that both understood that the narcotics involved were bought for distribution at retail. Moreover, upon another occasion Ewing was present when De Saverio paid Vellucei money. This aspect of the case was fairly put to the jury by the trial judge’s charge. And to Seto also, we think, the Reina decision is inapplicable. For Ewing testified to an order by Seto from Vellucei in the summer of 1954 and to a second order in May, 1955. And he described these as two of half a dozen transactions in all.

De Saverio also insists that it was error for the judge to refuse a charge as to evidence relating to his attempted impeachment of Ewing’s testimony against him. Ewing had testified that the transactions between Vellucei and De Saverio took place in De Saverio’s club in 1954 and on cross-examination he had described the layout and furnishings