United States v. Salvatore ( 2002 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-30376
UNITED STATES OF AMERICA,
Plaintiff - Appellee
VERSUS
SEBASTIAN SALVATORE, also known as Buster, also known as Harry,
Defendant - Appellant
Appeal from the United States District Court
For the Eastern District of Louisiana
No. 94-CR-158-18-N
April 2, 2002
Before ALDISERT*, DAVIS, and PARKER, Circuit Judges.
PER CURIAM:**
The long and winding road upon which this case has traveled
continues to unfold in this appeal from the district court’s
*
Circuit Judge of the Third Circuit Court of Appeals, sitting
by designation.
**
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
1
partial denial of appellant’s petition for a writ of coram nobis.
Although two main issues are raised, our primary task is to
consider whether the jury’s decision to convict the appellant,
Sebastian Salvatore (“Salvatore”), on twenty non-mail fraud counts
was prejudiced by the jury’s consideration of seven vacated mail
fraud counts. Because we find that no prejudicial spillover
occurred, we affirm.
I. BACKGROUND AND PROCEDURAL HISTORY
In 1994, a federal grand jury indicted Salvatore and sixteen
codefendants for operating a criminal enterprise that subverted the
licensing requirements of the Louisiana Video Poker Law. The case
against Salvatore was tried to a jury. The jury found Salvatore
guilty of 27 counts. They included one count of violating the
Racketeer Influenced Corrupt Organizations Act (RICO), one count of
conspiracy to violate RICO under 18 U.S.C. § 1962, seven counts of
mail fraud under 18 U.S.C. § 1341, two counts of conducting an
illegal gambling business (“IGB”) under 18 U.S.C. § 1955, sixteen
counts of wire fraud under 18 U.S.C. § 1343, and one count of
interstate travel and communication in aid of racketeering (“ITAR”)
under 18 U.S.C. § 1952. Salvatore was sentenced to eighteen months
of imprisonment, to be followed by three years of supervised
release, and ordered to pay restitution.
After conviction, Salvatore appealed to our court and raised
three arguments. First, he contended that the video poker license
2
he was accused of fraudulently obtaining was not property under 18
U.S.C. § 1341, and thus the mail fraud charges should be
overturned. Second, he asserted that the evidence was insufficient
to uphold his convictions. Third, he claimed that the district
court erred in empaneling an anonymous jury. We rejected each of
these contentions and therefore upheld all the convictions. See
United States v. Salvatore, 110 F.3d 1131 (5th Cir. 1997). With
respect to Salvatore’s first argument, we specifically held as a
matter of first impression that “video poker licenses constitute
money or property as required by the mail fraud statute.” Id. at
1143.
Three years later, the Supreme Court ruled on the video poker
license as property issue in Cleveland v. United States, 531 U.S.
12 (2000). The Cleveland Court held that Ҥ 1341 requires the
object of the fraud to be ‘property’ in the victim’s hands and that
a Louisiana video poker license in the State’s hands is not
‘property’ under § 1341.” Id. at 25-26. Thus, after Cleveland, it
became clear that Salvatore’s seven mail fraud convictions were
improper despite our holding to the contrary.
By 2001, Salvatore had served his sentence, complied with the
terms of his supervised release, and had paid his assessment fees.
On January 5, 2001, he filed a petition for writ of error coram
nobis in the district court asking the court to vacate all of his
convictions. He argued that his mail fraud convictions must be
3
vacated based upon the Cleveland ruling. He also contended that
the RICO convictions should be overturned because the two IGB
counts, the remaining sub-predicate acts upon which the RICO
convictions were based after the three sub-predicate acts of mail
fraud were erased, were invalid. He asserted that the video poker
business he was involved in was not “illegal” if the licenses were
not obtained by fraud and there was no way to tell whether he had
been convicted of the IGB counts directly or only vicariously.
Finally, he asked the court to set aside his other convictions on
the grounds that the defective mail fraud counts impermissibly
tainted the entire trial.
The district court vacated the seven mail fraud counts based
upon Cleveland, but denied relief on all other grounds. The court
concluded that the RICO violations survived Cleveland because the
special jury verdict form showed that, irrespective of the mail
fraud convictions, Salvatore committed two predicate racketeering
acts. The court also rejected the argument that the IGB
convictions occurred vicariously as a result of the mail fraud
convictions because the court specifically instructed the jury to
consider the evidence for each count separately. The court further
concluded that the mail fraud evidence did not impermissibly taint
the other convictions.
Salvatore filed a timely notice of appeal from the district
court’s order. We have jurisdiction to hear the appeal pursuant to
4
28 U.S.C. §§ 1291 and 1294.
II. STANDARD OF REVIEW
At the outset, we note that this type of writ is typically
granted only to correct errors which result in a complete
miscarriage of justice. United States v. Morgan, 346 U.S. 502,
506-512 (1954). To obtain coram nobis relief, Salvatore must
demonstrate that “1) there are circumstances compelling such action
to achieve justice, 2) sound reasons exist for failure to seek
appropriate earlier relief, and 3) the petitioner continues to
suffer legal consequences from his conviction that may be remedied
by granting of the writ.” United States v. Mandanici, 205 F.3d
519, 524 (2nd Cir. 2000). On appeal, we review factual findings
for clear error and questions of law de novo. The ultimate
decision whether to deny or grant coram nobis relief, however, we
review for abuse of discretion. Id.; See also Alikhana v. United
States, 200 F.3d 732, 734 (11th Cir. 2000) (citations omitted).
III. ANALYSIS
A. RICO and RICO Conspiracy
Salvatore argues that once the mail fraud convictions are
withdrawn, the RICO and RICO conspiracy counts all collapse. We
disagree.
To convict Salvatore of the RICO violation, the government had
to prove that Salvatore unlawfully conducted and participated in
the affairs of an enterprise through a pattern of racketeering
5
activity. A pattern of activity requires two or more predicate
acts and a demonstration that the racketeering predicates are
related and amounted to or pose a threat of continued criminal
activity. St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425,
441 (5th Cir. 2000). Therefore, the RICO and RICO conspiracy
counts cannot be overturned if Salvatore committed at least two
valid predicate acts of racketeering.
At trial, the district judge utilized a special verdict form
which allowed the jury to determine which predicate acts were
proven and which were not proven. Racketeering Act #1 consisted of
the sub-predicate acts of mail fraud and conducting an IGB.
Racketeering Act #2 consisted of two sub-predicate acts of mail
fraud and one act of conducting an IGB. The jury specifically
found that Appellant committed all five sub-predicate acts.
After Cleveland, the three mail fraud predicate acts can no
longer support the RICO counts. However, the special jury verdict
conclusively demonstrates that the jury found Salvatore guilty of
the two remaining sub-predicate acts involving the IGB counts.
Therefore, we will not overturn the RICO and RICO conspiracy
convictions.1 See United States v. Peacock, 654 F.2d 339, 348 (5th
1
We also reject Salvatore’s claim that the two predicate acts
are invalid because the government did not meet the requirements
for proving violations of 18 U.S.C. § 1955. To make out a
violation of § 1955, the government had to prove that Salvatore
conducted an illegal gambling business. 18 U.S.C. § 1955(b)(1)
states that an “illegal gambling business” means a gambling
business which -(i) is a violation of the law of a State or
6
Cir. 1981) (upholding RICO convictions because a special verdict
form demonstrated that the jury found the defendants guilty of at
least two predicate acts other than the reversed mail fraud
charges).
B. Prejudicial Spillover
Salvatore contends that there was prejudicial spillover from
the mail fraud counts which tainted the convictions on the other
counts. In essence, he argues that the presence of the seven mail
fraud counts, and the convictions on those counts, prejudiced the
jury against him, and mandates the reversal of the other 20 counts.
In evaluating Salvatore’s claim of prejudicial spillover of
evidence from the vacated mail fraud counts, we look at the
political subdivision in which it is conducted; (ii) involves five
or more persons who conduct, finance, manage, supervise, direct, or
own all or part of such business; and (iii) has been or remains in
substantially continuous operation for a period in excess of thirty
days or has gross revenue of $2,000 in any single day. Here, the
state law at issue, the Louisiana Video Poker Devices Control Law,
requires that all prospective licensees and those who are given a
license must satisfy “suitability” criteria. La. Rev. Stat.
27:310. The government claims that Salvatore and his co-
conspirators violated the Louisiana suitability law when (1) they
had Christopher Tanfield and Steve Bolson act as “front men” to
obtain the licenses for their corrupt organization, and (2) when
they ignored the continuing duty to inform the Louisiana Gambling
Division of the true character and associations the licensees had.
Based upon the evidence presented at trial, we conclude that the
jury could properly find that Salvatore conducted a gambling
business which violated the Louisiana Video Poker Law and thus
could also properly find that Salvatore violated the federal IGB
statute. Consequently, the two IGB counts serve as valid predicate
acts for the RICO counts. The jury’s findings as to these two
predicate acts are sufficient to support the RICO convictions and
will not be disturbed.
7
totality of the circumstances. To guide us in this inquiry, we
apply a three-part test: (1) whether the evidence on the vacated
counts was inflammatory and tended to incite or arouse the jury to
convict the defendant on the remaining counts; (2) whether the
evidence on the vacated counts was similar to or distinct from that
required to prove the remaining counts; and (3) the strength of the
government’s case on the remaining counts. See United States v.
Naiman, 211 F.3d 40, 50 (2nd Cir. 2000).
Applying this test, we find that no prejudicial spillover
occurred. First, the evidence concerning the mail fraud counts
involved technical information about the video poker license
application process. The evidence presented involved Salvatore’s
role in setting up a “front man” to get the license to lease the
video poker machines. Although this evidence tended to show
Salvatore in a pejorative light, it is not the type that is so
inflammatory that it would incite the jury to convict Salvatore on
the other counts. Moreover, the specificity of the jury verdict
form and the district judge’s instructions to the jury to
separately consider each count, and the evidence pertaining to it,
militates against a determination that the jury was incited to
convict on the remaining twenty counts.
Second, courts have stated that “where the vacated and
remaining counts emanate from similar facts, and the evidence
introduced would have been admissible to both, it is difficult for
8
the defendant to make a showing of prejudice.” Naiman, 211 F.3d at
50; United States v. Morales, 185 F.3d 74, 82 (2nd Cir. 1999). We
agree with this statement. Here, the evidence relating to
Salvatore’s mail fraud convictions was related to his other
convictions and would have been properly admissible even without
the mail fraud counts. Thus, the second factor also weighs against
Salvatore.
Finally, we note that the government’s case against Salvatore
on the remaining counts is strong enough to prevent us from finding
prejudicial spillover. FBI Agent Richard McHenry testified about
the numerous conversations that took place between members of the
conspiracy which included Salvatore. Moreover, Christopher
Tanfield’s testimony inculpated Salvatore as participating in the
efforts to both hide the mob connections of LRO and Worldwide
Gaming and defraud Bally Gaming of hundreds of thousands of dollars
in advances and loan payments.
IV. CONCLUSION
The two IGB counts were valid predicate acts which support the
RICO and RICO conspiracy counts. The use of the special verdict
form, the similarities between the evidence on the vacated counts
and remaining counts, the technical nature of the evidence
presented concerning mail fraud, and the strength of the
government’s case lead us to conclude that the twenty non-mail
fraud counts should not be overturned on the basis of prejudicial
9
spillover. Consequently, we affirm the district court’s decision
in all respects.
AFFIRMED.
10