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United States v. Herman

decided: February 12, 1980.



Before Adams, Hunter and Higginbotham, Circuit Judges.

Author: Higginbotham


In 1976 Richard Herman, a former court magistrate in Allegheny County, Pennsylvania, was indicted along with thirteen other individuals and charged with conspiring to accept bribes from a bail bonding firm, in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). 18 U.S.C. §§ 1961-1968. He was tried in January, 1978 and was found guilty; his conviction was affirmed on appeal. United States v. Herman, 589 F.2d 1191 (3d Cir. 1978), cert. denied, 441 U.S. 913, 99 S. Ct. 2014, 60 L. Ed. 2d 386 (1979). At his trial Herman proposed to call as witnesses four constables who had worked in his office. He asserted that their testimony would show that he had not participated in the bribery scheme. When he attempted to call the constables all of them indicated that they would not testify, asserting the privilege against self-incrimination.

The statute of limitations on the constables' offenses has now expired. As a result, Herman has requested a second trial on the RICO offenses at which the constables will not be permitted to assert a fifth amendment privilege. Herman initiated this request with a motion for a new trial before the district court, pursuant to Rule 33, Fed.R.Crim.Proc.*fn1 The district court denied the motion. Herman has appealed on the ground that the district court abused its discretion by not holding an evidentiary hearing and on the ground that the district court should have granted the motion on the merits.

Herman's conviction grew out of a kick-back scheme run by Stephen C. Levitt, owner and operator of a bail bonding firm in Allegheny County. Levitt was the government's chief witness at Herman's trial. Earlier Levitt had pled guilty to a violation of 18 U.S.C. § 1962(d) (RICO). In our decision affirming his conviction on direct appeal we described Herman's involvement in the kick-back scheme.

Levitt testified that from February of 1970 through May of 1975 he operated a bail bond agency in Pittsburgh, Pennsylvania, writing surety bonds for persons charged with crimes throughout Western Pennsylvania. The principal and qualified surety for the agency was Stuyvesant Insurance Company, to whom Levitt was required to pay 2% of the face amount of each valid bond issued by the agency. Early in 1970 he made an arrangement with certain magistrates in Allegheny County to pay a kickback of 50% of the surety bond premium to magistrates who referred bail bond business to his newly established agency. When a defendant was referred to him by one of these magistrates, Levitt would usually post an invalid bond with the court. . . . If the case was dismissed at the preliminary hearing he would split the gross premium with the magistrate. If the case was held for court he would deduct the cost of obtaining a valid power of attorney, and split the remainder of the premium. . . . Relying upon the Levitt Agency files, which listed individual bond transactions by date and name of defendant, Levitt illustrated how he had calculated the specific sums paid to Herman . . . on account of each bond. He further testified that on each such occasion he had placed the money in an envelope with (Herman's) name on it, and had either personally delivered the envelope to the magistrate or one of his employees, or directed that it be so delivered.

Victor Kozlowski, a former bailbondsman at the Levitt Agency, testified under a grant of immunity. He corroborated Levitt's testimony, and stated that at Levitt's direction he personally had delivered kickbacks to Herman . . . for cases in which he had written the bail bonds at their office. Mary Hupert, formerly a secretary at the Agency, also testified under an immunity grant. She stated that she had observed, and later prepared, envelopes directed to Herman . . . and that she had received phone calls from . . . magistrates and their staffs referring bail bond clients to the Levitt Agency. She further testified that she recalled an occasion on which Magistrate Herman's son had picked up a payment envelope at the Levitt Agency. . . .

Special Agent Marinaro of the FBI testified that during a lengthy interview with the FBI on February 25, 1976, Herman had admitted that he had sent his son to pick up an envelope containing several hundred dollars from the Levitt Agency as kickback payments on bonds written in cases heard before him.

United States v. Herman, 589 F.2d at 1194-95.

Herman's defense strategy was aimed at showing that the bribery conspiracy was carried on by members of his staff and that he had not participated in the kickback scheme.

At trial, Herman put on four witnesses. Three former constables in his office James Regrut, Robert Williams, and William McHugh testified that they had never split with Magistrate Herman any funds received from Levitt. . . . (McHugh asserted his fifth amendment rights when asked if he divided monies from Levitt with other constables.) Herman's secretary, Josephine Howe, testified that she had never made any referrals to bail bond agencies; that, to her knowledge, it was not Magistrate Herman's policy to make such referrals; and that, to her knowledge, Magistrate Herman had never taken any bribes or kickbacks in the performance of his duties.

Id. at 1199.

In addition, Herman proposed to call John Batkins, James Trosty, and Richard La Quinta, former constables in his office and to cross-examine McHugh further. Relying on statements the four men had given to either the F.B.I. or the grand jury, he claimed their testimony would "establish that some payments from the Levitt Agency with respect to bail bond business originating out of Herman's office went to one or more of the constables, who split the money among themselves without passing any along to him." Id. As we noted above, they all refused to ...

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