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United States v. Fedroff

argued: February 2, 1989.

UNITED STATES OF AMERICA
v.
JOE FEDROFF, JOSEPH FEDROFF, APPELLANT



On Appeal from the United States District Court for the District of New Jersey, D.C. Criminal No. 87-00308-01.

Author: Scirica

Opinion OF THE COURT

SCIRICA, Circuit Judge.

Joseph Fedroff appeals his convictions for mail fraud, extortion, and accepting kickbacks. The issue raised by this appeal is whether the defendant is entitled to a new trial in light of Mathews v. United States, 485 U.S. 58, 108 S. Ct. 883, 99 L. Ed. 2d 54 (1988). Because we find that the defendant is entitled to a jury instruction on entrapment, we will vacate the convictions and remand for a new trial.

I.

In 1985, the Federal Bureau of Investigation commenced an investigation into payoffs to public works officials in New Jersey. Columbian Steel Company, Inc. ("Columbian Steel"), a municipal supply firm, had been identified as a source of kickbacks. Based on this information, the FBI compiled a list of affected municipalities, which included North Arlington, New Jersey. Special Agent Edward Dustman was assigned to pose as a Columbian Steel salesman to solicit contracts from municipal employees and to offer kickbacks.

Dustman proceeded to contact employees of North Arlington's Department of Public Works. His first business dealings were with a mechanic, Philip Uchrin. In return for Uchrin's orders with Columbian Steel, Dustman paid him certain kickbacks. After several payments, Dustman learned that Uchrin was planning to discard certain tire chains owned by the municipality. Dustman offered to sell the tire chains and divide the proceeds. According to Dustman, they agreed that the sale proceeds would be split between Uchrin, Dustman, and Uchrin's superior, defendant Joseph Fedroff, Acting Superintendent of Public Works. Dustman never spoke to Fedroff about the sale of tire chains, but testified that Uchrin mentioned that Fedroff was aware of the transaction. Fedroff had been hired by the North Arlington Department of Public Works in February, 1985 as a repairman, and was promoted to acting superintendent in September, 1985.

On February 20, 1986, Dustman met Joseph Fedroff for the first time at a local bar, where he paid Fedroff $65 as his share of the proceeds from the fictitious tire chain sale. Dustman told Fedroff that if he "came up with something else," to let him know. Upon leaving the bar, Dustman handed Fedroff another $100 in an envelope, saying that it was in appreciation for the business that Fedroff had provided to Columbian Steel.

On February 27, 1986, Dustman met Fedroff at a diner. Dustman gave Fedroff $60, representing his share of money from a second fictitious sale of tire chains. Dustman suggested that Fedroff introduce him to other municipal officials with whom he could do business. Dustman told Fedroff that he would be given a finder's fee. Fedroff said he would talk to a purchasing agent at the Board of Education to "find out who . . he buys from."

Dustman and Fedroff next met on April 9, 1986, again at a local bar. Dustman told Fedroff that he had purchased 20% of Columbian Steel, and that he would be splitting his sales territory with a new salesman. At the end of their conversation, Dustman handed Fedroff $100, stating, "Here's a hundred bucks many thanks Joe. . . . We appreciate your business you guys are super O.K." Dustman again mentioned Fedroff's county contacts, to which Fedroff responded that they "could work something out."

The next contact took place on June 5, 1986 at a local diner. Dustman introduced Fedroff to Special Agent John Lewis, who was to replace Dustman as the "salesman" for Columbian Steel.*fn1 Dustman described Lewis as a person who would "do business whatever way he can," who understood what was happening, and who was "blending in very nice." At the meeting, Dustman gave Fedroff $50, saying that it was in appreciation for an order that Fedroff had placed with Columbian Steel.

On August 5, 28, and October 1, 1986, Fedroff again met with Lewis. On these three occasions, Fedroff accepted cash payments from Lewis totalling $235. Lewis explained to Fedroff that the payments constituted a percentage of the business Fedroff had provided for Columbian Steel. On October 21, 1986, Lewis bought Fedroff lunch at an expensive restaurant. They discussed the kickback scheme, but no money changed hands. One month later, on November 21, 1986, Fedroff and his wife attended the 1986 League of Municipalities Convention in Atlantic City. Lewis paid for their condominium rental and a $350 dinner, had them chauffeured in a government rented limousine, and hosted a night of gambling at the Trump Castle and Casino. Before he checked out of the condominium, Fedroff accepted $450 cash from Lewis.

II.

Fedroff was indicted on October 30, 1987, and charged with mail fraud (18 U.S.C. 1341, 2), extortion (18 U.S.C. 1951), and accepting kickbacks (18 U.S.C. ...


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