United States v. Gale Nace and Nathan J. Warren, Sr., United States of America v. Ned Warren, Sr., and Gale Nace

561 F.2d 763
CourtCourt of Appeals for the Ninth Circuit
DecidedNovember 8, 1977
Docket76-1794, 75-3183 and 75-3509
StatusPublished
Cited by70 cases

This text of 561 F.2d 763 (United States v. Gale Nace and Nathan J. Warren, Sr., United States of America v. Ned Warren, Sr., and Gale Nace) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth 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. Gale Nace and Nathan J. Warren, Sr., United States of America v. Ned Warren, Sr., and Gale Nace, 561 F.2d 763 (9th Cir. 1977).

Opinions

OPINION

GOODWIN, Circuit Judge:

Gale Nace and Nathan Warren, Sr., appeal their convictions under 18 U.S.C. § 894 for using extortionate means to collect an extension of credit. The separate appeals have been consolidated because of the similarity of many of the issues.

This prosecution grew out of alleged threats made by Warren and Nace in their attempt to collect a loan from Edward Dennis Kelly. The record shows that Kelly and Warren were associated in several business ventures. They agreed to acquire and jointly manage several bars through corporate entities. After the bars were acquired, Kelly informed Warren that the operations needed an $8,000 loan. Warren arranged for Kelly to borrow $8,000 from Nace. On August 29, 1973, Nace advanced the funds to Kelly in exchange for a promissory note and a security interest in certain liquor licenses.

Kelly and Warren sold two of the bars. While awaiting the receipts from the sales, Kelly suspended payment on the $8,000 loan. Nace demanded his money and told Kelly that he was not concerned with Kelly’s arrangements with Warren. During the second week in October, 1973, Nace approached Kelly and told him that if he did not pay Nace could have an arm broken for $50, two arms broken for $100, two arms and a leg broken for $150, and for $200 he could get the whole package done. Nace also stated that “People who don’t pay, don’t last long.”

Kelly informed Warren of these threats but Warren stated that Kelly should take up the matter with Nace. A few days later, Kelly, accompanied by his bodyguard, met with Warren. As he was leaving Warren’s office, Kelly was confronted by Nace, who told him that this was a syndicate now, it wasn’t the little league, and Kelly would pay.

A month later, Warren called Kelly and demanded payment on the balance of the $8,000 note. When Kelly did not comply, Warren again called him and said: “If you don’t, I would hate to pay the consequences.” The following day Kelly received several phone calls from both Warren and Nace.

Kelly then contacted the police and allowed them to record a subsequent meeting he had with Warren and Nace. During that conversation Warren said: “I happen to like you or I would’ve broken your neck because I’ve been cheated on the whole deal.” When Nace entered, Warren stated: “He just walked in here saying he’s not paying you Gale.” Nace replied, “I don’t care, I have a bad deal, and its bad; I’ll [767]*767guarantee you I’ll put you in the hospital for 8 grand, it will cost you that.”

In October of 1974, Kelly, accompanied by two friends, again went to Warren’s office. Warren confronted them with a tape recorder and Kelly stated on the tape that Warren had never threatened him.

The investigation continued for another year. On November 13, 1974, a three-count indictment was returned against Nace. On June 11,1975, a superseding indictment was filed against Nace and Warren. After a jury trial, Warren and Nace were convicted on all counts charged.

Appellants argue first for a new trial, claiming that the prosecution violated Fed.R.Evid. 103(c) by introducing prejudicial, nonadmissible evidence in front of the jury. Specifically, appellants accuse the prosecution of improperly asking a question that would plant in the jury’s mind the suggestion of a syndicate murder “contract”.

References to “syndicate” operations surfaced several times during the trial. The issue first arose at pretrial when appellants made a motion to dismiss the indictment because, they argued, the Extortionate Credit Transactions Act, 18 U.S.C. § 891 et seq., applied only to organized crime and to those seeking to enforce debts which had their origins in illegal activity. Warren and Nace argued that the government’s evidence showed only threats between two legitimate businessmen.

While the government always contended that Warren and Nace were involved in organized crime, it had little proof. The prosecution argued at pretrial that 18 U.S.C. § 894 covered any attempt to collect a debt by extortionate means. The trial court reserved its ruling on this motion.

Reference to the “syndicate” next surfaced when Kelly, the victim of the alleged extortion, testified that appellant Nace had told him that “this was a syndicate now and it wasn’t little league and I would pay.”

During the defense case-in-chief, appellant Warren testified that he had no connections with the so-called syndicate, the Costra Nostra, or Mafia.

His cross examination produced the following:

“Q: Mr. Warren, Mr. Flynn asked you, I believe during your direct examination, if you had any association with the Mafia or the Cosa Nostra or the syndicate and you answered — no—?
A: That’s correct.
Q: Did you ever tell Dennis Kelly that you had any such connections?
A: No, never.
Q: Have you ever told any one that you placed a contract with any such organization?
A: What do you mean?
Q: Did you ever tell any one that you had placed a $5,000 contract with the people in Detroit or Chicago?
A: I don’t know people in Detroit or Chicago.
Q: Did you ever make that statement?
A: No.
Q: Do you know Mr. Richard Frost?
A: Yes, sir.
Q: Did you ever tell Mr. Frost that you lost $5,000 to people in Chicago because—
A: —No, I don’t even know anybody in Chicago, to the best of my knowledge.
Q: The question, sir, is —did you ever tell Mr. Frost that you lost $5,000 because you placed a contract with people in Chicago to kill Mr. Frost?
[Defense Counsel]: I’m going to object, if the Court please, because it is entirely immaterial and highly prejudicial.
[Prosecutor]: Well, if your Honor please,—
[Defense counsel]: —Just a moment, please, if I may have the Court’s ruling on that.
THE COURT: Well, the Court is inclined to sustain your objection unless you will avow that you have evidence to that effect.
[Prosecutor]: I will go forward, if your Honor please.
[768]*768THE COURT: You will have someone to testify to that?
[Prosecutor]: Yes, your Honor.
[Defense counsel]: At this moment, I would request a hearing in the absence of the Jury on this particular matter.
[Prosecutor]: Your Honor, I will avow to the Court that I have evidence that will impeach this witness’s testimony as to placing the contract and I see no reason to go into any thing out of the presence of the Jury.

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Bluebook (online)
561 F.2d 763, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-gale-nace-and-nathan-j-warren-sr-united-states-of-ca9-1977.