Anthony Fazio Jr. leaves federal court after his sentencing in August 2012.
Anthony Fazio Jr. leaves federal court after his sentencing in August 2012. ()

A ruling that permitted evidence that three men accused of extortion against business owners had ties to organized crime did not taint the trial that ended in their convictions, a federal appeals court ruled.

The U.S. Court of Appeals for the Second Circuit said evidence that Anthony Fazio, Sr., Anthony Fazio, Jr. and John Fazio were believed by victims to have ties to the Mafia was relevant as to their state of mind when they made payments to the Fazios to win union peace.

The Fazios, who ran Local 348 of the United Food and Commercial Workers International Union, were accused of demanding that business owners pay them thousands of dollars a year to ensure good relations with the union in a scheme that ran from 1989 to 2011.

At trial in 2010 before Southern District Judge Katherine Forrest (See Profile), the prosecution was allowed to introduce tapes of recorded phone calls between Mark Cohen, the owner of Shoe Mania who did not testify at trial, and John Fazio.

In one recorded call, before Fazio picked up, Cohen could be heard telling his comptroller that the reason Fazio could solve his labor issues was “Mafia, Jimmy, Mafioso.”

In another call, Cohen tells Fazio his lawyer had asked about the union and learned that it was “M-O-B, mafia union.”

John Fazio responded “That’s what he said?” and, after Cohen said “Yeah, something like that,” Fazio responded “Yeah.”

All three Fazios were convicted of racketeering conspiracy, racketeering, extortion conspiracy in violation of the Hobbs Act and receiving unlawful labor payments. The elder Anthony Fazio and John Fazio were also convicted of a money laundering conspiracy in violation of the Hobbs Act and the elder Fazio was convicted of witness tampering.

Forrest sentenced the elder Fazio to 12 years and seven months in prison, Anthony Fazio, Jr. to five years and John Fazio to 11 years and three months.

At the circuit in United States v. Fazio, 12-3786-cr, argued on Sept. 20, 2013, the defendants’ counsel urged Judges John Walker (See Profile), Pierre Leval (See Profile) and Richard Wesley (See Profile) to vacate the convictions, claiming Forrest erred in admitting evidence of organized crime ties and should have given a charge to the jury that the “fear” element of extortion cannot be satisfied by a threat of loss of economic advantage to which the victim was not entitled.

But in an opinion issued Wednesday, Walker said the defendants’ argument that the reputation evidence was inadmissible absent some corroborative evidence they were actually part of organized crime was “without merit.”

First, when Cohen told Fazio Local 348 had a reputation as being a mafia union, Walker said, “John Fazio did nothing to refute the allegation. By letting the assertion stand, John Fazio effectively endorsed it and thus exploited it.”

Second, Walker said, “whether the Fazios were actually connected to organized crime is not dispositive of the admissibility of reputation evidence that tends to show the reasonableness of the victims’ fear.”

After upholding Forrest’s refusal to give the family members separate trials, the Second Circuit then affirmed her decision not to give the jury the charge sought by the defendants.

Hobbs Act extortion under 18 U.S.C. §1951(b)(2) is defined as the “obtaining of property of another, with his consent, induced by wrongful use of actual or threatened force, violence, fear, or under color of official right.”

Walker said the requested instruction “barred jurors from finding the ‘fear’ element of extortion unless the victim feared losing an advantage to which he was legally entitled.”

“This requested instruction misstates the law,” Walker said. “None of our precedents require that the economic advantage that the victim fears losing to have been legally obtained by the victim.”

Instead, he said, “Our cases require simply that the victim be coerced into making the payments out of a reasonable fear of economic harm.”

“And our cases draw a distinction between such payments and payments made, not out of fear of loss, but to receive an advantage,” Walker said. “The former payments are extorted; the latter are bribes.”

Richard Ware Levitt of Levitt & Kaiser argued for Anthony Fazio Jr.

Marc Fernich argued for Anthony Fazio, Sr.

“I’m very disappointed that,13 months after argument, my client’s arguments were rejected as simply meritless,” Fernich said. “A client facing a lengthy prison sentence deserves some explanation of why his substantial legal claims were deemed meritless.”

Ronald Fischetti and Phyllis Malgieri of Fischetti & Malgieri and Barry Bohrer and Eli Mark of Schulte Roth & Zabel represented John Fazio, Jr.

“We had very, very important issues that the court seemed to recognize during the argument and the fact that this opinion didn’t address any of those issues [in depth] after 13 months is, in my opinion, just mystifying,” Fischetti said.

Southern District Assistant U.S. Attorneys Chi T. Steve Kwok argued for the government with Assistant U.S. Attorneys Peter Skinner, Brian Blais and Justin Weddle on the brief.

@|Mark Hamblett can be reached via email or on Twitter @MarkHamblett1.