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United States v. Powers

decided: September 12, 1972.


Pell and Stevens, Circuit Judges, and Laramore,*fn* Senior Judge. Stevens, Circuit Judge (dissenting).

Author: Pell

PELL, Circuit Judge.

Harvey J. Powers, an attorney, and his client, Guido Fidanzi, were named in an eight-count indictment charging in the first seven counts various fraudulent acts of federal cognizance and in the eighth count, conspiracy concerning the fraudulent acts. Fidanzi pleaded guilty prior to trial. Powers was tried in a jury trial and was found guilty on Count II only, in connection with alleged mail fraud pursuant to 18 U.S.C. ยง 1341, pertaining primarily to one Bennie Beaird. This appeal followed.

The briefs of both Powers and the Government, presumably for differing influential purposes, have provided us with a scenario of the trial testimony showing the machinations of the defendants with numerous individuals and corporations. The parade of names and events, mostly having nothin to do with the points involved on this appeal, reads like an inadequate translation of a Tolstoi novel.

Some of the operations at least were handled through a corporation modestly named World Wide Mortgage Company. The extent of the financing as reflected by the evidence appears to have been the securing of advance finder's fees from persons who desired capital for high-risk business ventures, following which the further efforts to secure the loan evaporated along with the advance payment.

The specific count on which Powers was convicted involved an aborted loan to Beaird, a Peoria businessman. He sought to borrow $100,000 to buy stock in a fast food franchise operation which sold "barbecued pork things." Beaird testified that he had several meetings with Fidanzi and Powers as to the possibility of arranging such a personal loan; that Powers had always participated extensively in the discussions, often referring to what substantial sums of money World Wide had access to; and that after negotiations they had agreed on a $112,000 loan ($100,000 principal and $12,000 as a finder's fee, i.e., "12 points"). On December 12, 1964, Beaird and his partner, Lester Shallenberger, met Fidanzi and Powers and signed a loan agreement contract which provided that the advance fee less $100 would be refunded if World Wide failed to obtain the loan. Beaird and Shallenberger each gave Powers a certified check for $1120 (totaling $2240, or 2% of $112,000). Powers put the checks in his coat pocket and that was the last Beaird ever saw of either Powers or Fidanzi.

In order to tie Powers into the fraud as an active participant and not just as the attorney for Fidanzi and/or World Wide, the Government adduced the testimony of Donald Blazavier.

Blazavier, whose testimony displays an excessively consistent guilelessness and a continuing willingness to part with his own or his mother's money in exchange for unkept promises, was apparently an employee of World Wide in December, 1964, although it is not clear that he was ever on the payroll. During the period of his association with World Wide, Fidanzi gave the Beaird checks to Blazavier to cash at a nearby bank -- specifically telling him not to mention World Wide. After endorsing the checks, Blazavier was told by a teller that she could not cash them. Blazavier then returned the checks to Fidanzi.

At this point in his testimony, we reach one of the points raised on this appeal. In an earlier trial of Fidanzi for filing a fraudulent income tax return and for wilful failure to file returns*fn1 (No. 67 CR 561, aff'd, United States v. Fidanzi, 411 F.2d 1361 (7th Cir. 1969), cert. denied, 396 U.S. 929, 90 S. Ct. 265, 24 L. Ed. 2d 227), Blazavier had testified, "Mr. Fidanzi put both of those checks [following the unsuccessful bank sortie] into his wallet and that was all I heard of it."

However, in the trial below, he testified that conversations with his wife had refreshed his recollection and that a few days later he had been given the checks again by Fidanzi and told to take them up to his hometown bank in Kenosha, Wisconsin, to cash them. This he did and he then turned over the proceeds, less $100 he had held out for his services, to Powers who was driving through, purportedly on the way to a closing in Milwaukee where the money was to be used. Blazavier was subjected to a searching cross-examination on this inconsistency.

The following then occurred:

MR. BAILEY: I have a few more questions, Judge, about that trial.

BY MR. BAILEY: Q. Were you aware when you testified there of the nature of that trial, sir? Did you know what the charge was?

MR. SKINNER: I object to that.

THE COURT: The objection is sustained.

THE COURT: * * * I don't mean by my ruling to prevent you from asking other questions, but the question that you've asked is objectionable and I sustained the objection, and I'm only ruling on the question that was asked, nothing further.

If you have other questions in mind, proceed and I'll rule on any objections that may be made.

MR. BAILEY: I have no further questions.

Subsequently, before the witness was excused, but while no question was pending, the following side bar colloquy occurred:

MR. BAILEY: Well, Judge, what I think your Honor doesn't know is that the case against Guido Fidanzi was an income tax case for unreported income.

The Government in that case based on the testimony of this witness, that the checks went in his pocket, stuck Guido Fidanzi with this money as unreported income to him and used that evidence as the basis of a criminal conviction and a five-year sentence. I don't think the Government can stand up in one court in this building and say Guido got the money and then come and stand up in another court in this building and say Powers got the money.

THE COURT: All right, you've laid the foundation for impeachment and proceed accordingly. That is all I can rule on here. I can't rule on anything else.

MR. BAILEY: What I wanted to know is whether this witness knows what is happening?

THE COURT: We are not concerned with what he knows.

MR. SKINNER: The jury evaluates the evidence.

THE COURT: Your question was objectionable and I ...

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