United States v. Salvatore Cioffi

493 F.2d 1111, 1974 U.S. App. LEXIS 9661
CourtCourt of Appeals for the Second Circuit
DecidedMarch 14, 1974
Docket696, Docket 73-2612
StatusPublished
Cited by56 cases

This text of 493 F.2d 1111 (United States v. Salvatore Cioffi) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second 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. Salvatore Cioffi, 493 F.2d 1111, 1974 U.S. App. LEXIS 9661 (2d Cir. 1974).

Opinion

MEDINA, Circuit Judge:

The jury, after a trial presided over by Judge Motley, found Salvatore Cioffi guilty on both counts of an indictment charging him with conspiracy to obstruct justice and with the obstruction of justice by endeavoring to influence Perry Scheer, described as “a witness in the United States District Court for the Southern District of New York, having been duly subpoenaed to appear before a Grand Jury duly empaneled and sworn in that Court,” and he appeals from the judgment of conviction. He was sentenced to concurrent terms of eighteen months imprisonment on each count and is enlarged on bail pending the determination of this appeal.

A thorough examination of the entire transcript, the exhibits and the sealed envelopes containing a quantity of alleged 3500 material that was withheld from counsel for Cioffi has convinced us that there is no merit in any of the claims of error, and that there was ample proof sufficient to sustain the verdict. We affirm the judgment appealed from.

The simplicity of the basic issue will, we think, be brought into focus if we first describe the background leading to the alleged conspiracy and then follow chronologically the acts and conversations of Cioffi that were found by the jury to have constituted the commission of the substantive crime of violating the Obstruction • of Justice Act, 18 U.S.C., Section 1503. 1

I

Background

As so often in the past we are again in this case dealing with a so-called brokerage house operating on the New York Over-the-Counter Exchange. This firm of Kelly, Andrews & Bradley when the market was “hot” made a specialty of floating numerous underwritings of new issues of stocks of little or no value and by various deceptive and illegal practices mulcting investors. There is testimony that there was no Kelly, no Andrews and no Bradley. In any event the three persons in charge of operations at first' were Stuart Schiffman, known as Stuie, Fred Miller and Perry Scheer, who turned out to be the principal witness against Cioffi. These three were all “registered representatives,” which *1114 meant that they were licensed to buy and sell securities.

The activities of the firm evidently attracted the attention of Joseph Marando who decided to muscle in and who knew just how to do this. So, in October 1970 we find Marando making a loan of $25,000 to Schiffman, Miller and Scheer. This, however, was no ordinary loan but was a clear violation of the New York Criminal Law, New York General Obligations Law, Section 5-501, because it was agreed that interest at the rate of 104% per annum should be paid in weekly amounts of $500 or 2% each, in cash. The language of the professional criminal element in New York City was well known to all these people and cash was called “green” and the extortionate interest was called vigorish or “vig.” This is reminiscent of what we read in the testimony in United States v. Corallo, 413 F.2d 1306 (2d Cir.), cert. denied, 396 U.S. 958, 90 S.Ct. 431, 24 L.Ed.2d 422 (1969) and United States v. Callahan, 439 F.2d 852 (2d Cir. 1971). In his testimony Scheer, in his colorful way, always referred to this as a “shy-lock” loan. In any event, it is right in the center of the case against Cioffi. From the cases we have had before us in the past we think it is pretty clear that such extortionate loans are often made to those making quick profits from criminal enterprises of one kind or another, and, when the “vig” is not promptly paid something is apt to happen.

The following, is Scheer’s description of what happened when the “vig” on this $25,000 loan was not forthcoming:

Q What happened after October 1970 with respect to payments on that loan?

A The firm paid the weekly interest rate and when the first (sic) had difficulties, as many brokerage firms did, Mr. Marando became very violent and very upset that the interest always had to be met no matter what happened and he voiced threats of physical harm and violence and he always sat in Mr. Schiffman’s seat and he threw everything off the desk, the blotters, the notes, the telephone, the telephone book, the coffee, whatever was there violently, saying that if we were ever late, which we were from time to time, he would send collectors to our home to take our wives or our furniture, whatever he could get. The money had to be paid on time.

Q By the way, had you discussed your wife’s medical condition with Marando ?

A Yes, he was very aware of it.

We shall hear further references to the health of Scheer’s wife, who had cancer and was “totally disabled.”

In August or September of 1971 Mar-ando took over the day to day operations of Kelly, Andrews & Bradley and he had to find buyers for the stocks. One of these was a Mr. Simon who did not pay for the stock he bought. Scheer testified to a telephone conversation he heard in the office when Marando asked for the money that was due. Marando asked Simon on what floor he was located. When told it was the 27th or 30th floor Marando said that is how far you will bounce unless you come over immediately and pay for the stock you bought. Scheer says then Simon came over as requested. Judge Motley permitted the testimony as to these events, which preceded' the first overt act of March 30, 1972 as alleged in the conspiracy count of the indictment. Judge Motley ruled that such testimony was allowed as background information so that the jury could understand the charges against the defendant.

As things went from bad to worse and it was necessary to give some support to the capital structure of the firm, Maran-do sent over 90,000 shares of Brooklyn Poly Industries stock to be subordinated and kept intact for the protection of the firm’s creditors. These shares were in street names so Schiffman promptly siphoned off part of the value by using the stock as collateral for a loan from a Boston bank to satisfy a *1115 personal debt and Scheer made off with about $25,000 more by representing to the Bank of North America that the stock belonged to him and pledging it with the bank for a loan in this amount which Scheer put in his pocket. This was plain, ordinary stealing.

It should come as no surprise that the brokerage firm became bankrupt and it ceased doing business in October 1971. It had probably been insolvent as early as the time of the $25,000 Marando “shyloek” loan in October 1970. The collapse of Kelly, Andrews & Bradley was immediately followed by investigations by the SEC and by the United States Attorney in the Southern District of New York.

In early November 1971 the SEC got in touch with Scheer and so did a representative of the prosecutor’s office in the Southern District of New York. At about this time Marando visited the brokerage firm’s mid-town office at 747 Third Avenue and told Scheer, in the presence of Miller, that an investigation was under way.

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Bluebook (online)
493 F.2d 1111, 1974 U.S. App. LEXIS 9661, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-salvatore-cioffi-ca2-1974.