United States v. Cocchiola

358 F. App'x 376
CourtCourt of Appeals for the Third Circuit
DecidedDecember 23, 2009
DocketNo. 08-1976
StatusPublished
Cited by4 cases

This text of 358 F. App'x 376 (United States v. Cocchiola) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Cocchiola, 358 F. App'x 376 (3d Cir. 2009).

Opinion

OPINION

SLOVITER, Circuit Judge.

Appellants Mark Cocchiola and Steven Venechanos challenge procedural aspects of their criminal trial in which they were convicted by a jury of conspiring to commit and committing multiple financial crimes. Cocchiola also challenges the sentence he received from the District Court. We will affirm.1

I.

Cocchiola and Venechanos (“defendants”) were key players in Suprema Specialties, Inc. (“Suprema”), a company that manufactured and processed cheese for sale to supermarkets, other retail establishments, and food service industry distributors. Suprema was a New York corporation with headquarters in Paterson, New Jersey, and with wholly-owned subsidiaries in several locations throughout the United States.

The superseding indictment details an intricate scheme in which defendants, along with others, inflated Suprema’s sales and misrepresented its inventory through, among other things, fraudulent accounting practices and mislabeled products. As a result, Suprema was able to borrow large sums of money from Fleet Bank (now Bank of America) and the other banks that participated in its “revolving loan agreements.” Venechanos App. at 57.

In addition, defendants made false representations to the Securities and Exchange Commission (“SEC”) in the annual and quarterly reports that Suprema filed. These misrepresentations were also passed on to investors and other members of the public through press releases. Lastly, in connection with a November 2001 Suprema stock offering, defendants made false representations to the SEC, some of which were disseminated to potential investors.

Approximately three months after this stock offering, Suprema filed a voluntary petition for reorganization under Chapter [378]*37811 of the Bankruptcy Code, which was soon converted to a Chapter 7 liquidation. Bank of America filed documentation to prove that it lost over $75 million from the revolving loan agreement. Suprema’s investors were also victims of the scheme, as Suprema stock became almost worthless after the company liquidated.

The Government charged defendants with conspiracy, seventeen counts of bank fraud, nine counts of making false statements in reports required to be filed with the SEC, six counts of wire fraud, and four counts of mail fraud. Cocehiola was charged with an additional count of wire fraud.

Both defendants pled not guilty and proceeded to trial. The jury heard twenty-two days of testimony and convicted both defendants on all counts. The District Court sentenced Venechanos to 96 months imprisonment and Cocehiola to 180 months imprisonment. Defendants jointly challenge several rulings made at trial. Cocchiola challenges his sentence.2 Also, Venechanos asserts that he was deprived of a fair trial due to misconduct by the prosecutors.3

II.

Because we write primarily for defendants, who are well aware of the relevant facts, we refer to those facts only as necessary in discussing their contentions. Defendants contend that they were denied a fair trial when the District Court granted the Government’s motion in limine to exclude defendants’ expert witness, Frederick Martens, who was to testify on “(1) the structure of an organized crime family within the Italian mafia, (2) the elements of a mafia bust-out scheme, and (3) [a co-conspirator’s] connection to the Bonanno crime family.” Cocehiola App. at 119-20. Martens’ proposed testimony would have explained to the jury the way in which “bust-out” schemes commonly involve infiltration by criminals into “position[s] of authority within a legitimate company to implement a fraudulent billing and invoicing scheme” with the assistance of various shell companies, for the purpose of looting the assets of the company and driving it into bankruptcy. Cocehiola App. at 120. Defendants assert that this testimony would have been significant because the fraud that occurred at Suprema was a classic “bust-out” scheme perpetrated without the knowledge of Cocehiola and Venechanos. Defendants argued that expert testimony about “bust-out” schemes generally would be “helpful to the jury in terms of understanding” that defendants were ignorant of the wrongdoing at Suprema. Cocehiola App. at 157.

The Government filed a motion in limine to exclude Martens’ testimony, arguing that there was no evidentiary basis to connect the case to organized crime, and that, in any event, testimony about “bust-out” schemes was irrelevant to the ultimate issue, which was defendants’ knowledge of and participation in the fraudulent scheme. [379]*379The Government further argued that even if Martens’ proposed testimony were relevant, its probative value would be substantially outweighed by its potential to confuse the jury.

The District Court granted the Government’s motion in limine, referring to Federal Rule of Evidence 702. It first determined that there was “insufficient evidence and, indeed, no admissible evidence which established] any relationship between the subject matter of [the] lawsuit and organized crime.” Cocchiola App. at 3-4. The District Court also concluded that Martens’ proposed testimony would not “assist the trier of fact to understand the evidence or to determine a fact in issue,” Cocchiola App. at 6, and that such testimony would likely confuse the jury.

Defendants argue that the District Court’s ruling was erroneous, and that the unjustness of the decision was enhanced when the Government “exploited [the] lack of evidence,” Cocchiola Br. at 25, by stating to the jury in its rebuttal summation, “[t]here’s ... no evidence really to tell us what a bust-out is.... ” Cocchiola App. at 360. The admission of expert testimony vel non falls within the broad discretion of the trial court, and we will reverse only for an abuse of discretion. See Pineda v. Ford Motor Co., 520 F.3d 237, 243 (3d Cir.2008).

We have no basis to disturb the District Court’s ruling. We agree with the District Court that a description of “bust-out” schemes generally would be unlikely to affect whether the jury believed defendants were either guilty participants in such a scheme or unwitting scapegoats. Also, the District Court’s concern with the potential for confusion that testimony about the mafia could engender was reasonable.

The argument that the Government exploited the lack of evidence on “bust-out” schemes is also unavailing because even without Martens’ testimony, defendants provided evidence and vehemently argued that defendants may have been victims of a “bust-out” scheme. For example, defendants made clear from the outset that they intended to prove that the fraud was hidden from them as much as it was hidden from the banks and investors. Defendants repeatedly questioned witnesses about the roles of others in the fraud. After hearing such evidence and argument, the jurors were qualified to determine, without the aid of expert testimony, whether the fraud was driven by outsiders and thus whether defendants’ theory of the case was credible.

Defendants next contend that the District Court abused its discretion in giving a Fioravanti instruction in response to a note from the jurors to the Court stating that, after deliberating for five days, they were “hopelessly deadlocked.”4 Cocchiola

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Bluebook (online)
358 F. App'x 376, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-cocchiola-ca3-2009.