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United States v. Tonelli

argued: March 27, 1978.

UNITED STATES OF AMERICA
v.
JAMES R. TONELLI, APPELLANT



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY (D.C. Crim. No. 75-57).

Hunter, Weis and Garth, Circuit Judges.

Author: Weis

WEIS, Circuit Judge.

In preparing a true-false test, perceptive teachers, while aware of the possibility of pure chance-guessing, will phrase the false statement to be so close to the truth that students are required to be precise in making their choice. In drafting an indictment for perjury, however, a grand jury must take exactly the opposite tack. No guessing is tolerated and the indictment must set out the allegedly perjurious statements and the objective truth in stark contrast so that the claim of falsity is clear to all who read the charge. In the appeal at hand, the indictment and evidence adduced failed to meet that standard. Accordingly, we must vacate the conviction of the defendant for false swearing before a grand jury.

The defendant, James R. Tonelli, was indicted for making false statements to a grand jury in violation of 18 U.S.C. § 1623.*fn1 At the conclusion of a bench trial, the district judge found defendant guilty and sentenced him to two years in prison and a $500 fine. He then suspended the sentence and placed defendant on two years probation.

The case grew out of an investigation by a federal grand jury in Newark, inquiring into possible criminal violations in connection with the management and investment of funds belonging to the Paper Industry Union Management Fund.*fn2 The inquiry disclosed that persons seemingly not connected with the Union or the Pension Fund had approached various banks and offered to deposit the Fund's monies in exchange for business or personal loans. Government agents discovered that the defendant had been involved with the Fund's purchase of three $100,000 certificates of deposit from the Lugoff, South Carolina branch of the American Bank and Trust Company. Although the defendant was not affiliated with either the Union or the Fund, his father was president of the International Union and his cousin, James Fabio, was Administrator of the Pension Fund.

Defendant was served with a subpoena duces tecum and appeared before the grand jury on October 21, 1974. He testified he had recommended the Lugoff bank to Fabio, but denied he had sought remuneration from the bank in exchange for placing funds with it. On November 8, 1974, at his request, defendant again appeared before the same grand jury to correct certain inaccurate testimony, unrelated to the deposit of Pension Fund monies, that he had given on his initial appearance. A few months later, in a one-count indictment, defendant was charged with violating § 1623 by knowingly making false and material declarations in response to certain questions propounded to him during the October 21st grand jury proceedings.

Essentially, the indictment listed false answers dealing with three issues. The first two were whether Tonelli was involved with the placement of Pension Fund money with the American Bank and Trust Company and whether he had personally handled the transmission of one or more Fund checks to the bank; the third was whether defendant had discussed placement of Pension Fund monies with Ray Clark, an officer of the bank, in order to obtain a loan for himself. The district judge found that there had been inadequate proof as to the third issue but was satisfied that falsity with respect to the first two had been proven.

The defendant contends that we should dismiss the indictment because he was not told he was a target of the grand jury probe and had not been advised of his rights under the Fifth and Sixth Amendments. Although recognizing the thrust of Supreme Court holdings in United States v. Washington, 431 U.S. 181, 52 L. Ed. 2d 238, 97 S. Ct. 1814 (1977), and United States v. Wong, 431 U.S. 174, 52 L. Ed. 2d 231, 97 S. Ct. 1823 (1977), that there is no constitutional right to receive special warnings before testifying before the grand jury, defendant urges us to exercise our supervisory powers as did the court in United States v. Jacobs, 531 F.2d 87 (2d Cir. 1976), remanded for reconsideration, 429 U.S. 909, 97 S. Ct. 299, 50 L. Ed. 2d 277 (1976), on remand, 547 F.2d 772 (2d Cir.), cert. granted, 431 U.S. 937, 97 S. Ct. 2647, 53 L. Ed. 2d 254 (1977). We note that on December 16, 1977 the Justice Department adopted a grand jury practice of warning a putative defendant on the record before he testifies and in light of this recent development, we see no need to exercise our supervisory powers at this time.

We do, however, perceive more merit to another contention raised by the defendant. In United States v. Slawik, 548 F.2d 75 (3d Cir. 1977), we said:

"[A] conviction under 18 U.S.C. § 1623 may not stand where the indictment fails to set forth the precise falsehood alleged and the factual basis of its falsity with sufficient clarity to permit a jury to determine its verity and to allow meaningful judicial review of the materiality of those falsehoods." 548 F.2d at 83-84.

We find the same prosecutorial deficiency which undermined the Slawik conviction - the failure to specifically allege in the indictment the precise falsehoods charged - exists here. See United States v. Crocker, 568 F.2d 1049 (3d Cir. 1977). This defect is compounded because the Assistant United States Attorney failed to ask specific, unambiguous questions while interrogating defendant in the grand jury room. Since the district court found only two of the three allegations had been established by the prosecution, we review only those items. Of necessity, a detailed description of the indictment and the testimony before the grand jury is required.

I.

We discuss first the issue of participation in the placement of pension funds.

Summarizing defendant's pertinent testimony before the grand jury, the district court stated "when asked if he 'participated in the placement of pension fund monies for the purchase of certificates of deposit . . . including within that concept making recommendations to any individual as to any bank or other financial institution from which certificates of deposit could be purchased,' Tonelli replied that he had recommended the American Bank and Trust, Lugoff branch, to James Fabio."

Paragraph 8 of the indictment charges that, in response to certain questions, Tonelli made false declarations:

Q. Mr. Tonelli, did you ever have occasion to participate in the placement of funds of the Paper Industry Union Management Pension Fund? By placement, I mean purchase of certificate of deposits [ sic ] with pension fund moneys?

A. No, sir.

Q. Mr. Tonelli, in connection with these certificates of deposit that the Pension Fund purchased at the American Bank & Trust Company in Lugoff, South Carolina, did you ever in any way assist Mr. Fabio to make those ...


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