United States of America, Appellant, v. Uzzolino, Joseph P., Appellee, 651 F.2d 207 (3d Cir. 1981)

In June, 1980, appellee, Joseph P. Uzzolino, was charged under 18 U.S.C. § 371 (1976) with conspiracy to receive kickbacks in violation of 18 U.S.C. § 1954 (1976), and conspiracy to embezzle pension fund assets in violation of 18 U.S.C. § 664 (1976). In addition to the conspiracy count, the defendant was also charged with eleven counts of specific violations of sections 664 and 1954. A jury found Uzzolino guilty of conspiracy, but acquitted him on the substantive crimes of embezzlement and receiving kickbacks. The trial court, believing the verdicts to be inconsistent, granted appellee's Fed. R. Crim. P. 29(c) motion and set aside the jury's verdict on the conspiracy count. On July 24, 1980, the district court entered a judgment of acquittal for the appellee.

The Government appeals from that judgment. It argues that even under the wording of the indictments in this case, conspiracy is a separate offense from the substantive acts in furtherance of that conspiracy. The Government therefore asserts that it was within the province of the jury to find the defendant guilty of one and not the other. We agree. Therefore, we will reverse the district court's judgment and order appellee's conspiracy conviction to be reinstated.

FACTS

Background

Appellee was charged with conspiring to embezzle Pension and Welfare Fund assets; conspiring to receive kickbacks as trustee of the fund; accepting kickbacks; and embezzling Pension Fund assets. The alleged offenses occurred during Uzzolino's tenure as President and Business Agent of Local 478, an employee organization entrusted with the management of an Employee Pension Benefit Plan. In November, 1975, appellee met at a roadside diner with Sam Mor, the owner of Towers Transportation, Inc. ("Towers"), a company owing approximately $80,000 to the Pension and Welfare Fund. At that meeting, Mor offered to pay appellee $10,000, in $2,500 installments, if appellee would use his influence as President and Business Agent of the Fund to help Mor escape payment of the $80,000 debt. He also offered to pay appellee $1,000 a month if he would turn his back on Mor's use of non-union owner-operators.

The next day appellee agreed to Mor's proposal. After receiving the cash, appellee instructed Albert S. Parsonnett, attorney for the Fund, not to seek collection of the Towers' debt. Shortly thereafter, the Fund's billing statement to Towers ceased to reflect Towers substantial delinquency to the Fund. The Fund also decided not to strike Towers, as it had done before, in an attempt to force payment of the delinquent Welfare Fund contribution. Towers never paid its delinquent contributions and it failed to keep up its current contributions to the Fund. Consequently, the Company's insurance lapsed and some of the workers were forced to pay their own hospital bills. Still, the Fund did not press Towers for payment.

Finally, in May 1976, Mor and appellee discussed a plan to change the corporate shell of Towers. Mor changed the name of the trucking firm to Far East Truck Leasing ("Far East"). Far East, the same company as Towers except for the changed name, was never asked to pay the Towers obligations, including the judgment on a suit which had been initiated prior to appellee's agreement with Mor. Far East eventually defaulted on its contributions to the Fund causing the employees' insurance to be cancelled for non-payment.

The Indictment

The Government brought an eleven count indictment against appellee. Count 1, described by the trial judge as a conspiracy indictment, charged in part:

From in and around November 1975 until approximately in and around the end of 1976 at Elizabeth in the District of New Jersey and elsewhere, the defendants

JOSEPH P. UZZOLINO,

JOSEPH A. UZZOLINO and

JOSEPH AMENDOLA

did knowingly and wilfully combine, conspire, confederate and agree with each other and with others to commit offenses against the United States, that is to receive fees, kickbacks, commissions, gifts, loans, money and things of value because of and with the intent to be influenced with respect to actions, decisions and other duties relating to questions and matters concerning the Welfare Fund and the Pension Fund in violation of Title 18, United States Code, Section 1954.

Redacted Indictment at 2, reprinted in Appendix at 26 (emphasis added). The conspiracy charge was broken down into two parts. Paragraphs 12 and 13 of Count 1 of the indictment discussed the payments to hinder collection of the $80,000 debt; paragraphs 14 and 15 outlined the conspiracy to permit use of non-union owner-operators in return for a monthly $1,000 payment. Finally, the last section of Count 1 described the alleged overt acts committed by appellee and his co-conspirator in furtherance of the conspiracy.

Counts 2 through 9 of the indictment then charged specific violations of section 1954 by the appellee.¹  In drafting these counts, the Government tracked substantially the language of section 1954 which states, in relevant part, "Whoever ... receives or agrees to receive ... any ... kickback ... shall be fined not more than $10,000 or imprisoned not more than three years, or both ..." 18 U.S.C. § 1954 (1976).²  For example, in Count 2 of the indictment, the Government alleged:

1. Paragraphs 1 through 10 of Count 1 are hereby realleged and incorporated as though set forth in full herein.

2. In and around December 1975 at Elizabeth in the District of New Jersey and elsewhere the defendants

JOSEPH P. UZZOLINO

JOSEPH A. UZZOLINO

did knowingly, wilfully and unlawfully receive and agree to receive kickbacks, money and things of value from Sam Mor and his business associates, that is, approximately $2,500.00 in cash because of and with intent to be influenced with respect to their actions, decisions and duties relating to questions and matters concerning the Pension Fund and the Welfare Fund namely, the collection of the contributions and debt due to those Funds from Towers Transportation, Inc.

In violation of Title 18, United States Code, Section 1954 and 2.

Redacted Indictment at 5, reprinted in Appendix at 29 (emphasis added). Counts 2 through 9 of the indictment, referred to by the district court as the "substantive counts" of the indictment,³  were drafted to detail the specific payments received by Uzzolino for the exercise of his influence.

The jury returned a verdict of guilty against appellee on Count 1 only. Following the jury's verdict, the district court directed special interrogatories to the jury. It asked them to verify whether the Government had proved the averments of paragraphs 12 through 15 of the indictment, which state:

12. It was a further part of said conspiracy that the defendants and co-conspirators agreed to use their influence to delay, obstruct and hinder the collection of in excess of $80,000 in debts already accrued and due from Towers Transportation, Inc. to the Pension Fund and the Welfare Fund in return for cash to be paid to the defendants and co-conspirators.

13. It was a further part of said conspiracy that $10,000 was delivered to the defendants and co-conspirators in return for their aid in delaying and obstructing and hindering the action of collection of the outstanding debt of in excess of $80,000 to the Pension Fund and the Welfare Fund due for the period prior to November 7, 1975.

14. It was a further part of said conspiracy that co-conspirators would permit Towers Transportation, Inc. and Far East Truck Leasing, Inc. to employ a large number of owner-operators of trucks who were not members of Local 478 and for whom contributions to the Pension Fund and the Welfare Fund were not required, without interference in return for cash and other items of value to be paid to the defendants and co-conspirators.

15. It was a further part of said conspiracy that from approximately February through September 1976, the defendants and co-conspirators were paid at least $1,000 per month.

The jury answered that it has "found unanimously that the United States had proved paragraph 12 beyond a reasonable doubt, but never has reached an agreement concerning paragraph 13." Transcript of Proceedings, reprinted in Appendix at 2241. It answered "no", however, to the trial court's question of whether the United States proved the averments of paragraphs 14 and 15.

In a post-verdict motion under F.R.Crim.P. 29(c),⁴  appellee argued that the jury's verdict on Count 1 of the indictment must be vacated because the government had not proven the crucial element of the conspiracy charge an agreement between appellee and his alleged co-conspirators to receive kickbacks. Appellee contended that the jury's acquittal on Counts 2 through 9 demonstrated that he had not "agreed to receive" the payments and therefore precluded a finding under Count 1 that appellee was involved in an unlawful agreement or conspiracy.⁵  The government took the position that it now takes on appeal; it argued that the jury's verdict and responses to the special interrogatories indicated only that the jury could not agree as to whether the transfers of money had actually taken place or had taken place with the requisite specific intent for the crimes, not whether the defendant and co-conspirators agreed to an illegal arrangement. The district court granted appellee's motion; it entered a judgment of acquittal for appellee on Count 1. The Government appeals.

DISCUSSION

Jurisdiction

Before we decide the merits of the Government's appeal, we must first determine whether we have jurisdiction to hear this case. This court's power to hear appeals from the Government in criminal cases is set forth in 18 U.S.C. § 3731 (1976):

In a criminal case an appeal by the United States shall lie to a court of appeals from a decision, judgment, or order of a district court dismissing an indictment or information as to any one or more counts, except that no appeal shall lie where the double jeopardy clause of the United States Constitution prohibits further prosecution.

Section 3731 has been interpreted to apply to post-verdict acquittals under Federal Rule of Criminal Procedure 29(c), as well as to dismissals of indictments or informations. United States v. Schoenhut, 576 F.2d 1010 (3d Cir.), cert. denied, 439 U.S. 964, 99 S. Ct. 450, 58 L. Ed. 2d 421 (1978). See also United States v. Wilson, 420 U.S. 332, 95 S. Ct. 1013, 43 L. Ed. 2d 232 (1975). As long as double jeopardy does not bar the government's appeal, this court is free to review the district court's post-verdict acquittal.⁶  United States v. Scott, 437 U.S. 82, 85, 98 S. Ct. 2187, 2190, 57 L. Ed. 2d 65 (1977); United States v. Martin Linen Supply Co., 430 U.S. 564, 568, 97 S. Ct. 1349, 1353, 51 L. Ed. 2d 642 (1976); Schoenhut, 576 F.2d at 1018 n.7.

We hold that double jeopardy does not bar this appeal. In Schoenhut, this court held:

(D)ouble jeopardy is not implicated in an appeal from a judgment of acquittal entered after a jury verdict of guilty because there is no possibility that the defendant will have to stand trial again for the same offense .... If the Government prevails in this appeal, the jury's guilty verdict will be reinstated.

Id. See also Martin Linen Supply, 430 U.S. at 569-70, 97 S. Ct. at 1353; Wilson, 420 U.S. at 342, 95 S. Ct. at 1018; United States v. Jenkins, 420 U.S. 358, 367-368, 95 S. Ct. 1006, 1011-1012, 43 L. Ed. 2d 250 (1975); United States v. Cahalane, 560 F.2d 601, 603 n.2 (3d Cir. 1977), cert. denied, 434 U.S. 1045, 98 S. Ct. 890, 54 L. Ed. 2d 796 (1978); United States v. Davis, 560 F.2d 144, 146-47 (3d Cir.), cert. denied, 434 U.S. 839, 98 S. Ct. 133, 54 L. Ed. 2d 102 (1977). As in Schoenhut, no new trial will be required in the instant case if the Government prevails upon appeal. See also United States v. Brandon, 633 F.2d 773, 778-79 (9th Cir. 1980). Rather, the jury's guilty verdict on Count 1 will be reinstated. Accordingly, the Government's appeal is in harmony with the double jeopardy clause and there is jurisdiction under section 3731 for this appeal.

Consistent Verdicts

The trial judge granted appellee's Rule 29(c) motion because he believed that the jury, by acquitting Uzzolino on Counts 2 through 9, may have determined that the appellee never entered into an unlawful agreement to receive kickbacks.⁷  Counts 2 through 9 of the indictment included the words "received and agreed to receive." The court viewed the conspiracy in Count 1 as a mere collection of the individual agreements alleged in Counts 2 through 9.⁸  Thus, the jury's finding that appellee never made the individual agreements alleged in Counts 2 through 9 could not be reconciled with its finding on Count 1 that there had been a conspiracy or agreement to receive illegal payments.

After reviewing the indictments in the instant case, we come to a different conclusion. First, we note, as did the trial court,⁹  that even if a jury's verdicts are inconsistent, inconsistency alone is not an appropriate legal basis to reverse an otherwise valid jury verdict. See Hamling v. United States, 418 U.S. 87, 101, 94 S. Ct. 2887, 2899, 41 L. Ed. 2d 590 (1973); United States v. Continental Group, Inc., 603 F.2d 444, 455 (3d Cir. 1979), cert. denied, 444 U.S. 1032, 100 S. Ct. 703, 62 L. Ed. 2d 668 (1980). The general rule is that inconsistent verdicts will be left to stand as a hallmark to the jury's "assumption of a power which they had no right to exercise, but to which they were disposed through lenity." Dunn v. United States, 284 U.S. 390, 393, 52 S. Ct. 189, 190, 76 L. Ed. 356 (1931) quoting Steckler v. United States, 7 F.2d 59, 60 (2d Cir. 1925).¹⁰  Only in a rare case will such verdicts demonstrate that there was no legal basis for the jury's decisions. See, e. g., United States v. Hannah, 584 F.2d 27 (3d Cir. 1978).¹¹  Certainly, where, as in this case, there is some question as to whether the verdicts are inconsistent, the jury's verdicts will not be disturbed. See United States v. Varkonyi, 611 F.2d 84, 86 (5th Cir.), cert. denied, 446 U.S. 945, 100 S. Ct. 2173, 64 L. Ed. 2d 801 (1980).

Second, and perhaps more importantly for the instant case, we disagree with the trial judge that there is an inconsistency which demonstrates that the jury did not believe that there was sufficient evidence to support the conspiracy charge. If one looks to the indictments submitted to the jury in this case, it appears that the jury may have believed that it was required to find the existence of two elements: (1) an agreement to receive those kickbacks; and (2) the receipt of unlawful kickbacks in order to hold appellee guilty on counts 2 through 9.¹²  An acquittal on counts 2 through 9 may well have represented the jury's belief that there was insufficient evidence to prove at least one of the elements. The trial judge assumed that the jury found that the first element was missing; that is, that the government had not proved beyond a reasonable doubt that appellee had agreed to receive the kickback payments. It therefore viewed the jury's acquittal on counts 2 through 9 as undermining its finding on Count 1 that there was an unlawful arrangement.

There is, however, a second plausible interpretation of the jury's acquittal on counts 2 through 9. The jury may have acquitted appellee on the substantive counts because it found that the government failed to prove that appellee actually received the alleged illegal payments. Indeed, the jury's answers to the special interrogatories seem to suggest that it did just that. The jury found unanimously that the United States proved that there was a conspiracy. It never reached an agreement, however, on whether "$10,000 was delivered to the defendants ...." See text accompanying note 4 supra.

We believe that the jury's acquittal on the substantive counts is logically consistent with its conviction on Count 1. While appellee entered into an agreement to receive illegal kickbacks, the government was never able to prove that the payments were made. Based on the wording of the indictments and the facts of this case, we find no grounds for holding that the jury believed that there was insufficient evidence to support the conspiracy conviction.¹³ 

CONCLUSION

Accordingly, we will reverse the lower court's judgment and order appellee's conviction on Count 1 to be reinstated. We remand this case to the lower court for further proceedings in accordance with this judgment.