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UNITED STATES v. PALERMO

April 14, 1995

UNITED STATES OF AMERICA
v.
NICHOLAS FRANK PALERMO



The opinion of the court was delivered by: MCLAUGHLIN

 McLAUGHLIN, J.

 Defendant Nicholas Frank Palermo was indicted on November 30, 1994 for alleged bank fraud in violation of 18 U.S.C. ยงยง 1344 and 2. In essence, the indictment avers that Defendant, together with another individual, executed or attempted to execute a scheme and artifice to fraudulently obtain funds from Marine Bank, a federally insured financial institution, by knowingly depositing stolen checks into Defendant's savings account at Marine Bank and later withdrawing the proceeds. The alleged loss of funds to Marine Bank as a result of these events is $ 98,143.83.

 Presently before the Court is Defendant's motion to suppress various incriminating statements allegedly made by him in conversations with agents for the Federal Bureau of Investigations and during a civil deposition. The bases for this motion are that the alleged statements were taken in violation of Defendant's various rights under the Fifth and Sixth Amendments to the United States Constitution. Both parties have submitted memoranda in support of their respective positions and the Court held an evidentiary hearing on March 13, 1995. For the reasons stated more fully below, the Court will deny Defendant's motion to suppress.

 I. BACKGROUND

 At the March 13, 1995 hearing, evidence was presented regarding Defendant's various contacts with two FBI agents, Andrew Palumbo and Eugene Zorn. Special Agent Palumbo is a supervisory agent operating out of the FBI's Newark, New Jersey division and specializing in white collar crime. (TR 14-15.) He testified to having had approximately nine separate contacts with Defendant -- by telephone, mail, and in-person meetings -- between December 9, 1992 and February 8, 1993. Agent Zorn is assigned to the FBI's Erie, Pennsylvania off ice and likewise specializes in white collar criminal matters. (TR 58-59.) He testified about three interviews with Defendant which occurred during the months of February and September of 1993. Much of the evidence concerning Defendant's contacts with the two agents is not in dispute.

 For example, Agent Palumbo testified that Defendant initially telephoned him on December 9, 1992 and related at that time that Defendant was sending a package containing copies of various checks which had been stolen from an armored vehicle in Buffalo, New York. (TR 15.) Agent Palumbo received the package on December 15, 1992. The package did indeed contain photocopies of a series of checks, although only the front sides of the checks were photocopied. (TR 16-17.) According to Agent Palumbo, this information was not particularly useful to the FBI because, without seeing the reverse sides of the checks, Agent Palumbo was unable to verify whether or not the checks were actually stolen. (TR 17.) Agent Palumbo testified that the front sides of the photocopied checks match those which are the subject of Defendant's present indictment. (Id.)

 On or around the day he received the package of photocopied checks, Agent Palumbo also received a telephone call from Defendant. At that time Defendant provided the name of the individual who had given him the stolen checks, one Dana Dolson. *fn1" (TR 18.) Agent Palumbo testified that, during this same conversation, Defendant indicated his awareness that the subject checks had been stolen. Agent Palumbo further testified that he specifically instructed Defendant not to cash the checks because "it would be a violation of law." (TR 18-19.) *fn2"

 Two days later, Defendant again telephoned Agent Palumbo. The purpose of this telephone call was apparently to provide Agent Palumbo the full name of the stolen check supplier, that being Dana Adolphson. (TR 20.)

 On January 15, 1993, Defendant again contacted Agent Palumbo, requesting that the two meet in Newark, New Jersey. At this meeting, Defendant informed Agent Palumbo that he had opened a checking account with a New Jersey bank and that he intended to deposit approximately $ 45,000 into the account. Defendant showed Agent Palumbo a bank book evidencing the newly opened account and further informed Agent Palumbo that the intended $ 45,000 deposit consisted of proceeds from the stolen checks which had been placed into Defendant's Erie bank account. (TR 20-21.) Defendant was again advised by Agent Palumbo that he should not follow through with this course of action, as it would be a violation of law. (TR 21.)

 Notwithstanding this advice, at some point after the January 15, 1993 meeting Agent Palumbo received a letter from Defendant via the U.S. mail at his Newark office. This letter described five checks which had been deposited into various accounts. Agent Palumbo testified at the suppression hearing that at least three of these checks form the basis of the present indictment. (TR 23.)

 Agent Palumbo next met with Defendant on February 7, 1993 in Piscataway, New Jersey. Once again, this meeting was arranged at Defendant's request. Agent Palumbo described the substance of this meeting as follows:

 
... Mr. Palermo told me that he had been in contact with Dana [Adolphson], and that he was offered additional checks, checks he described only as from a steel mill company, not further identified, and also Woolworth Company checks. He said he was going to process these checks and he was going to work out a 70-30 split with Dana [Adolphson] as a result of the proceeds.
 
Q. Did you give him any advice regarding the handling of these checks?
 
A. I reiterated the importance that he could not cash these checks because it was a ...

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