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United States v. Scandifia

decided: January 31, 1968.


Moore, Friendly and Kaufman, Circuit Judges.

Author: Kaufman

IRVING R. KAUFMAN, Circuit Judge:

The question presented on this appeal is whether the defendant Michael J. Scandifia "wilfully caused" the interstate transportation of counterfeit securities in violation of Title 18, United States Code, Sections 2314 and 2.*fn1

The indictment, filed on September 30, 1965, was in 11 counts, each of which charged that on a specific day, between November 11, 1960 and November 30 of that year, Scandifia caused the interstate transportation of counterfeit Shell Union Oil Corporation bonds between New York City and Monmouth County, New Jersey. Following a mistrial because the jury was unable to reach a verdict, a second trial was held before Judge Tenney and a jury. Scandifia was found guilty of 9 counts -- 2 counts having been severed at the government's request before the first trial -- and was sentenced to concurrent terms of 6 years' imprisonment on each count. For the reasons set forth below, we affirm.

In order to keep in focus the major question on appeal, we will first describe Scandifia's scheme as the jury might have found it viewing the facts and the inferences to be drawn therefrom in the light most favorable to the government, United States v. Edwards, 366 F.2d 853 (2d Cir. 1966), cert. denied, sub nom. Jakob v. United States, 386 U.S. 908, 87 S. Ct. 852, 17 L. Ed. 2d 782 (1967); United States v. Kahaner, 317 F.2d 459 (2d Cir.), cert. denied, 375 U.S. 836, 84 S. Ct. 73, 11 L. Ed. 2d 65 (1963); and then detail the facts relating to the individual counts.

Despite the sparse briefs and appendices, we glean from the record that a number of people who had invested in the Hersch Trading Company (company) were pressing to be repaid. One Morton Rosenberg, who seemed to be one of those principally responsible for financial matters, explained to Leon Hersch and Irving Cohen, his partners in the company, that he had no funds at the present time because he had invested sums of money in a Brooklyn garage owned by Scandifia. Hersch was determined to verify Rosenberg's tale and, accordingly, telephoned Scandifia, who put the lie to Rosenberg and denied flatly that the latter had invested in the garage. In any event, we discover that some time later, Hersch -- with the consent of the company's investors -- entered into an agreement with Scandifia for the latter's aid in collecting what Rosenberg owed. For his services, Scandifia was to receive 10 per cent of the total amount due and was given a deposit of 1 per cent in advance. His inability to collect the debts did not exhaust his resourcefulness or deter him from turning this failure into a venture in his own behalf. Despite the news that even he could not get blood from a stone, he presented an appealing plan whereby the investors could obtain ready cash while he continued to pressure Rosenberg. And so, at a meeting at Hersch's New Jersey home in the latter part of October 1960 -- attended by Cohen and Jerome Lasky, Leonard Ledwitz and Sam Serkin, 3 of several investors -- Scandifia exhibited to the group what purported to be legitimate Shell Union Oil bonds. He refused to explain how he had secured them, but he did state that the purpose of the display was to assure all concerned that ultimately they would recover the monies Rosenberg owed. Indeed, he added that if the investors wanted to make more money, this was an opportunity, and explained how they could reap profits by negotiating loans with bonds as collateral.

With the hook thus baited, in early November 1960, Hersch and Scandifia met in a New York City restaurant where Scandifia explained the full details of his plan. He envisaged the investors obtaining short term loans on Scandifia's Shell Union Oil bonds. They could retain any amount they were able to borrow in excess of 60 per cent of the face value of the bonds, but 60 per cent of face value was to be returned to Scandifia as his share. Scandifia went on to explain that when he succeeded in collecting the monies owed by Rosenberg, the short term loans would be paid off. In the interim, all concerned would have had the use of large sums of money even though Rosenberg's debt was uncollected.

Scandifia failed, however, to tell Hersch that the bonds were counterfeit. But Hersch was skeptical about their validity, and arranged to have them examined at a bank in the vicinity. The bank, failing to detect the counterfeit, informed Hersch that they were acceptable as collateral for a loan. Hersch's concern thus alleviated, he agreed to cooperate in the execution of Scandifia's plan.

Accordingly, counterfeit bonds, having a face value of $410,000, were pledged at various unsuspecting banks in New York and New Jersey during November 1960. Scandifia received over $168,000 as his share of the loans before it was discovered that the bonds were counterfeit.

The circumstances under which the bonds were transported between New York and New Jersey vary. Accordingly, they will be described separately.*fn2

The Aaron Starr Transaction -- Count Three. The first loan was successfully negotiated at a Brooklyn bank on November 9, 1960 to the delight of all concerned. On November 12, Scandifia gave Hersch 30 bonds for Aaron Starr, one of the investors who lived in Freehold, New Jersey. Hersch, who also lived in New Jersey, drove out to Starr's home to show him the bonds and to explain the plan. Starr found the plan acceptable and on November 14 the two men drove to New York City where Starr obtained a loan from a local bank by pledging the 30 bonds. The bonds were in the trunk of the car during the trip from New Jersey to New York. Count three charged Scandifia with having caused the transportation of these bonds to New York.

Leonard Ledwitz Transactions -- Counts Two, Four, Nine and Eleven. Hersch gave Scandifia his share of the Starr loan, and received in return 20 bonds for Ledwitz, who lived in New Jersey. Scandifia had met Ledwitz at a previous conference in Hersch's home. On November 14, Hersch took these bonds from New York City to Ledwitz' home (count two) and 2 days later Hersch and Ledwitz returned to New York with the bonds at which time Ledwitz negotiated a loan (count four).*fn3 Several days later, Ledwitz asked Hersch for more bonds. Hersch relayed the request to Scandifia, who gave him 30 additional bonds. Once again Hersch took them to New Jersey (count nine), but Ledwitz never made use of them.

The various parties had arranged to meet at Hersch's New Jersey home on November 30. Prior to the meeting, however, Ledwitz told Hersch that his bank claimed that the bonds were counterfeit. Acting under instructions from Scandifia, Hersch advised Ledwitz to bring his remaining bonds to the meeting. At this gathering Ledwitz insisted that he wanted his money back; Scandifia assured him he would have it within a day or two. Ledwitz then returned the bonds to Scandifia who left with them, stating that he was going to New York to make arrangements for the return of the money (count eleven).

The Solomon Rabstein Transactions -- Counts Five, Six, Seven and Ten. Sometime earlier, Hersch had spoken to another investor who had been at the first meeting at Hersch's home, one Sam Serkin, who agreed to obtain a loan on 50 bonds. Following the familiar pattern, Scandifia gave Hersch the bonds and Hersch took them to Serkin at his New Jersey office. On November 21, Serkin attempted to pledge the bonds, but was unable to negotiate a loan on satisfactory terms. He then suggested that the bonds be turned over to Solomon Rabstein, a creditor of his who might be able to arrange better terms.*fn4 Hersch agreed, but Rabstein insisted on having the bonds examined in New York at the Irving Trust Company, the trust agent for Shell Union Oil bonds. On November 23, he and Hersch took the bonds to New York (count five); the bank failed to detect that the bonds were counterfeit. Hersch and Rabstein then returned to New Jersey where Rabstein negotiated a loan (count six). Later that evening, Hersch telephoned Scandifia in Brooklyn and told him that since nighttime was approaching he did not want to drive to Brooklyn (in order to deliver his share of the Rabstein loan). Scandifia agreed to come to New Jersey and a meeting was arranged at a restaurant close to South Amboy. On that occasion Scandifia received his share of the Rabstein loan and turned over 100 more bonds to Hersch.*fn5 On November 25, Hersch ...

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