United States v. Viola

35 F.3d 37, 1994 U.S. App. LEXIS 25868
CourtCourt of Appeals for the Second Circuit
DecidedJuly 28, 1994
DocketNos. 1257, 1343, 913 and 1344, Docket 93-1272(L), 93-1291, 93-1405, and 93-1583
StatusPublished
Cited by105 cases

This text of 35 F.3d 37 (United States v. Viola) 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. Viola, 35 F.3d 37, 1994 U.S. App. LEXIS 25868 (2d Cir. 1994).

Opinion

WALKER, Circuit Judge:

Defendants-appellants appeal from judgments of conviction and sentence entered by the United States District Court for the Eastern District of New York (Sterling Johnson, Jr., Judge), after a jury trial. They were convicted of substantive and conspiracy violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(e) and (d), as well as substantive and conspiracy violations arising from their involvement in a drug and stolen property importation and distribution ring. The indictment arose out of an investigation of criminal activity on the Brooklyn, New York waterfront that uncovered a scheme by defendant Anthony Viola to use his influence to facilitate the importation of cocaine and marijuana into the country, and to steal goods from the pier and adjacent warehouses and then sell them. Viola was the proprietor of Blue Chip Coffee, a wholesale coffee company in Brooklyn, and the other appellants were associated with him in different ways. Louis Gazzoli was a warehouseman who conducted business with Viola. Gaetano Izzo was a forklift operator at the Cargo Transport warehousing company, but sometimes worked evenings for Viola. Michael Formi-sano performed odd jobs for Viola, mostly consisting of light clean-up and maintenance work.

As a result of the investigation, a grand jury indicted seventeen individuals, five of whom were joint defendants in the trial in the district court, in a multi-count indictment charging offenses committed from 1984 until July 23, 1991. The government presented extensive evidence at trial in support of the charges, most of which is not relevant to the issues addressed in this opinion. In summary, the indictment charged that Viola and the other defendants assisted narcotics dealers in their efforts to import drugs into the United States through the Brooklyn water[40]*40front. The drug owners would contact Viola who, in turn, would use his influence and access to information to locate the drugs and remove them from the pier in circumvention of United States Customs regulations governing inspection of imported goods. The indictment also alleged that the defendants purloined cargo from the waterfront and then sold the goods on the black market. The government’s case consisted of approximately forty witnesses, including three cooperating witnesses, and extensive recorded conversations obtained through over one year’s electronic surveillance of Viola’s office.

All appellants were convicted of violating and conspiring to violate RICO, 18 U.S.C. § 1962(c) and (d). In addition to the RICO counts, the jury convicted Formisano of receiving and possessing property stolen from interstate commerce in violation of 18 U.S.C. § 659, and Izzo of attempting to possess and conspiring to possess marijuana and cocaine, of importing and conspiring to import marijuana, and of being an accessory after the fact to other defendants’ crimes.

Of the five defendants who stood trial below, one was acquitted and the remaining four—Viola, Izzo, Formisano, and Gazzoli— appealed. We announced our decision in an unpublished order affirming the convictions and sentences of all appellants except Izzo and Formisano, see United States v. Viola, 33 F.3d 50 (2d Cir.1994) (table ease), and write to detail our reasoning on two points raised in that order. First, we consider Formisa-no’s claims that he did not participate in the operation or management of the RICO enterprise as is required to support a conviction under 18 U.S.C. § 1962(c), see Reves v. Ernst & Young, — U.S. —,—, 113 S.Ct. 1163, 1172-73, 122 L.Ed.2d 525 (1993), and that the government did not prove knowledge of the RICO conspiracy sufficient to convict him under § 1962(d). Second, we address Izzo’s claim that the district court improperly assessed a two-point offense level enhancement based on his alleged abuse of a position of trust. See U.S.S.G. § 3B1.3 (1992). Consistent with our earlier order, we reverse Formisano’s convictions on the two RICO counts and Izzo’s sentence enhancement for abuse of a position of trust, and affirm in all other respects.

DISCUSSION

I. Formisano’s RICO Convictions

Formisano challenges his conviction under both the substantive and conspiracy provisions of RICO. With respect to the substantive count under § 1962(c), he claims the district court erroneously instructed the jury that he could be convicted of conducting or participating in the conduct of a RICO enterprise even if he played “no part” in the operation or management of the enterprise. With respect to the conspiracy count under § 1962(d), he challenges the sufficiency of the evidence regarding his knowledge of the existence of the RICO conspiracy.

A. The “Conduct” or “Participate” Instruction

1. Application of the Reves standard

Section 1962(c) makes it “unlawful for any person employed by or associated with” a RICO enterprise “to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity.” Under the previously settled law of this circuit, a defendant did not have to operate or manage a RICO enterprise in'order to conduct or participate in the conduct of the enterprise’s affairs. See United States v. Scotto, 641 F.2d 47, 52-53 (2d Cir.1980), cert. denied, 452 U.S. 961, 101 S.Ct. 3109, 69 L.Ed.2d 971 (1981). However, we have recently recognized that the Supreme Court’s holding in Reves—that at a minimum the defendant must “have some part in directing [the enterprise’s] affairs,” — U.S. at-, 113 S.Ct. at 1170—is irreconcilable with the relevant portion of our decision in Scotto. See Napoli v. United States, 32 F.3d 31, 34-35 (2d Cir. Aug. 4, 1994).

In Reves, the Court adopted an “operation or management” test to gauge whether a defendant had a sufficient connection to the enterprise to warrant imposing liability under § 1962(c). Under the Court’s interpretation, simply aiding and abetting a violation is not sufficient to trigger liability even though [41]*41§ 1962(c) punishes those who participate “directly or indirectly” in the enterprise’s affairs. This is so because “aiding and abetting liability extends beyond persons who engage, even indirectly, in a proscribed activity; aiding and abetting liability reaches persons who -do not engage in the proscribed activity at all, but who give a degree of aid to those who do.” Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., — U.S. —, —, 114 S.Ct. 1439, 1447, 128 L.Ed.2d 119 (1994).

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Bluebook (online)
35 F.3d 37, 1994 U.S. App. LEXIS 25868, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-viola-ca2-1994.