United States v. Hanhardt, William A.

In the

United States Court of Appeals

For the Seventh Circuit

____________

Nos. 02-2253, 02-2254,02-2465,02-3091 & 02-3625

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

WILLIAM HANHARDT, JOSEPH BASINSKI,

GUY S. ALTOBELLO, and WILLIAM R. BROWN,

Defendants-Appellants.

____________

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 00 CR 853—Charles R. Norgle Sr., Judge.

____________

ARGUED SEPTEMBER 5, 2003—DECIDED MARCH 16, 2004

____________

Before BAUER, POSNER, and DIANE P. WOOD, Circuit

Judges.

BAUER, Circuit Judge. William Hanhardt, Joseph

Basinski, Sam DeStefano, Paul Schiro, and Guy Altobello

were indicted for one count of racketeering conspiracy

in violation of 18 U.S.C. § 1962(d). In a second count,

Hanhardt, Basinski, Schiro, and William Brown were

charged with conspiracy to transport stolen property

in interstate commerce in violation of 18 U.S.C. § 371.

The indictment also contained a forfeiture allegation

seeking forfeiture of $4,845,000, miscellaneous jewelry,

2 Nos. 02-2253, et al.

gems and watches, and certain real estate of Hanhardt and

DeStefano. All of the defendants pleaded guilty and were

sentenced to imprisonment for periods ranging from 25

months to 188 months. There are several issues raised on

appeal relating to the sentencing decisions of the district

court.1 We affirm in part, reverse in part, and remand for

new sentencing consistent with this opinion.

BACKGROUND

Count One

Between 1980 and April 1998, William Hanhardt, Joseph

Basinski, Paul Schiro, Sam DeStefano, and Guy Altobello

engaged in an organized nationwide scheme to identify and

target for theft more than 100 jewelry salespersons travel-

ing in interstate commerce with lines of jewelry valued in

excess of $40 million. Throughout this period, the conspira-

tors committed at least nine jewelry thefts totaling more

than $5 million in at least seven states, including Arizona,

California, Michigan, Ohio, Texas and Wisconsin.

Hanhardt, the leader of the enterprise, supervised

Basinski and together they directed the activities of the

other conspirators. Hanhardt directed in the gathering of

information regarding potential jewelry theft targets and in

the surveillance of such individuals to determine the best

time and place to steal jewelry from cars and hotels. He also

used Chicago police officers to run searches on law enforce-

ment computers to find information about jewelry salesper-

sons. He also had a private investigator gather personal

information on targets. Hanhardt retired from the Chicago

Police Department in 1986. However, while he was a sworn

1

The district court properly used the 1997 version of the Federal

Sentencing Guidelines and therefore citations in this opinion refer

to that version.

Nos. 02-2253, et al. 3

officer, Hanhardt committed at least one theft with

Basinski and other conspirators; an October 8, 1984 theft of

one hundred eighty Baume & Mercer watches valued at

approximately $310,000 from Paul Lachterman in Glendale,

Wisconsin.

Basinski identified potential targets by doing physical

surveillance, making telephone calls and running database

searches. He also recruited additional members for the

organization and fenced stolen jewelry. Altobello provided

other members with information about jewelry salespersons

who conducted business with Altobello Jewelers, Inc., a

Chicago area retail jewelry store, including, information

regarding the identity of such persons, the nature and

quality of their goods, and the most opportune time to steal

from them.

Count Two

In October 1996, Brown joined Hanhardt, Basinski, and

Schiro in a scheme to steal watches valued at $500,000 from

Illinois jewelry salesman Paul Lachterman. They planned

to steal the watches while Lachterman traveled through

Wisconsin and Indiana and then to transport the stolen

watches back to Illinois. Hanhardt and Basinski had

already stolen from Lachterman in 1984 and decided to

target him again. Between April and September of 1996,

they stalked Lachterman, gathered more information on

him and managed to make a duplicate key to the trunk of

his car. Basinski contacted Schiro in Phoenix who drove

to Chicago, bringing Brown with him, to assist in the

theft. On October 1, 1996, the four conspirators followed

Lachterman in two cars as he drove to Wisconsin and met

with customers. On October 2, 1996, they followed him

as he drove to Indiana. There, while Lachterman was in a

restaurant, Basinski and the others used the duplicate key

and stole a case of watches valued at $58,000, which had

4 Nos. 02-2253, et al.

been provided by the FBI. Realizing that the case contained

only a fraction of the value they expected, the conspirators

returned the case to the trunk.

Each of the defendants pleaded guilty to the charges and

were sentenced to between 25 months and 188 months of

imprisonment. They appeal these sentences.

ANALYSIS

I. Responsibility of Hanhardt and Basinski for the 1995

Armed Robbery of Esagh Kashimallak

Hanhardt and Basinski challenge the court’s finding that

they were responsible for the 1995 robbery. At the sen-

tencing of both Hanhardt and Basinski, the government

presented evidence that the conspiracy charged in the first

count of the indictment had included the armed robbery

of Esagh Kashimallak in 1995. Based on the facts of that

incident, the government sought an enhancement for the

physical restraint of a victim (§ 3A1.3) (2 levels) and an up-

ward departure for use of a weapon in the commission of a

crime (§ 5K2.6) (6 levels) and bodily injury to a victim

(§ 2B3.1) (2 levels). CGV16; Tr4/29/02//60-659;5/2/02//719-

21; Tr5/6/02//12.34. After hearing sworn testimony from the

victim and FBI Special Agent Edward McNamara,

the district court judge found by a preponderance of the

evidence that Hanhardt was responsible for the armed

robbery. Tr5/1/02//667. However, the court declined to im-

pose either the upward departure or the enhancement and

sentenced Hanhardt to the high end of the guideline range

(151-188 months). Tr5/2/02//725-26. A week later, the court

found Basinski also responsible for the 1995 armed robbery

and sentenced him to the high end of the guideline range

(87-108 months), declining to impose the upward departure

or the enhancement. Tr5/6/02//37, 58-66. The court did not

Nos. 02-2253, et al. 5

specifically attribute the high end sentence to the finding

that Hanhardt and Basinski were responsible for the armed

robbery. Id.

The district court’s findings that Hanhardt and Basinski

were responsible for armed robbery of Kashimallak is a

factual finding reviewed for clear error. United States v.

Ross, 905 F.2d 1050, 1054 (7th Cir. 1990). The court’s

finding that Kashimallak and the FBI agent were credible

is entitled to due deference. Id; U.S.C. § 3742(d). The court

did not increase either defendant’s offense level and there

is no indication in the record that the court’s finding of

responsibility had any bearing on its decision to sentence

them at the high end of the applicable guideline range.

Where a defendant does not request specific findings

pursuant to 18 U.S.C § 3553(c) at the time of sentencing,

this court has held that the issue is waived. United States

v. Caicedo, 937 F.2d 1227, 1236 (7th Cir. 1991); United

States v. Burns, 128 F.3d 553, 556 (7th Cir. 1997). In this

case, the defendants had the opportunity to ask the court to

make clarifications and did not. Therefore, the district

court’s ruling on this issue will not be disturbed.

II. Increased Offense Levels Based on Obstruction of

Justice for Hanhardt and Altobello

The court sentenced both Hanhardt and Altobello to a

higher offense level based on a determination that both ob-

structed justice. This court reviews the district court’s ap-

plication of sentencing guidelines de novo. United States v.

Williams, 272 F.3d 845, 864 (7th Cir. 2001). The sentencing

court’s determination that a defendant has obstructed

justice is a finding of fact to be reviewed under the clearly

erroneous standard. United States v. Teta, 918 F.2d 1329,

1332 (7th Cir. 1990); United States v. Jackson, 935 F.2d

832, 849 (7th Cir. 1991). We find that the obstruction of

justice enhancements applied to both Hanhardt and

Altobello were clearly erroneous.

6 Nos. 02-2253, et al.

A. Hanhardt

Hanhardt’s trial was set only a few weeks after he had

undergone testicular cancer surgery, for October 16, 2001.

On that morning, his counsel asked for a continuance

because of his client’s inability to be in court. It later came

to light that the defendant had attempted suicide by drug

overdose and was in the hospital. Based on that informa-

tion, the court found that Hanhardt was responsible for his

failure to appear in court as required by his bond. The court

issued an arrest warrant, staying it until October 20, 2001,

when the defendant was due in court. If Hanhardt did not

show up on the 20th then the warrant was to have been

executed.

On October 18, 2001, the parties returned to court on the

government’s emergency motion to inform the court that

Hanhardt had made arrangements to be admitted to an in-

patient program at another hospital. The new hospital

required him to stay five to ten days which would cause him

to miss his scheduled day in court. The government argued

that Hanhardt was intentionally arranging to violate the

court’s order to be in court on the 20th. The court ordered

the execution of the warrant and set a trial date for the

25th of October.

At that time, the court stated:

The court also notes that Hanhardt apparently had

no intention of appearing in court on October 20th,

as he was planning to be hospitalized as part of an

inpatient mental health treatment program. This anti-

cipated non-appearance causes the court to order im-

mediate execution of the arrest warrant to ensure

Hanhardt’s appearance.

R239//6.

At sentencing, the court imposed a two-level enhancement

of Hanhardt’s offense level for obstruction of justice under

Nos. 02-2253, et al. 7

U.S.S.G. § 3C1.1. The court based the enhancement on its

finding that Hanhardt acted willfully and with the specific

intent not to be present in court as ordered both on October

16 and October 20 and that he had the intent to impede the

prosecution of his case. The court stated:

He voluntarily, knowingly, and with reckless disregard

placed controlled substances into his own body. That he

may have taken more than prescribed was his own

decision. He did it alone. It was a voluntary act on his

part. He caused the result. It was his intention then not

to be in the courtroom to enter his plea of guilty or to

appear for trial. That he may have other reasons in

addition to those for doing what he did is not of major

consequence.

Tr4/29/02//50-60. The court found authority for its ruling in

the Federal Sentencing Guidelines. Section 3C1.1 of the

guideline states: “If the defendant willfully obstructed or

impeded, or attempted to obstruct or impede, the adminis-

tration of justice during the investigation, prosecution, or

sentencing of the instant offense, increase the offense level

by 2 levels.” U.S.S.G. § 3C1.1.

We find that the court’s decision to impose an obstruction

of justice enhancement based on Hanhardt’s attempted

suicide to be clearly erroneous. “A finding of fact is clearly

erroneous only if, after reviewing the entire evidence, we

are left with the definite and firm conviction that a mistake

has been committed.” United States v. McGill, 32 F.3d 1138,

1143 (7th Cir.1994);2 quoting United States v. Beal, 960

2

Evidence that the defendant was found in his cell standing on

top of the toilet with his head protruding through a hole in ceiling

tiles supported an enhancement of sentence for two levels for

obstruction of justice; we held the trial court’s conclusion that

defendant was attempting to escape rather than attempting sui-

(continued...)

8 Nos. 02-2253, et al.

F.2d 629, 632 (7th Cir.), cert. denied, 506 U.S. 880 (1992).

After reviewing all the evidence, we believe that a mistake

has been made in this case.

We do not believe that an attempted suicide can be con-

sidered an obstruction of justice. In the United States v.

McGill, we affirmed an enhancement because the district

court had determined that the defendant had tried to

escape rather than commit suicide, a finding that was not

erroneous. 32 F.3d at 1143. Implicit in that decision is the

understanding that suicide would not be an obstruction. Id.

The defendant argues that Hanhardt’s attempted suicide

reflects his specific intent to die, rather than his intent not

to appear in court the following day. The U.S. Probation

Officer explained that:

If the defendant’s intention was solely to miss the court

hearing, he could have simply failed to appear or even

fled from this district. In this case, the defendant chose

a more drastic and potentially fatal action. It is there-

fore the assessment of the undersigned that the defen-

dant’s legitimate, albeit wilfull, attempt to commit

suicide transcends the desire to miss a court hearing. .

..

(HBr 31) (R362-17 at 48; R306 at 16). The nature of suicide

does not lend itself to a clear understanding of an individ-

ual’s motivation other than the obvious intent to end his

life. We agree with U.S. Probation’s characterization of the

defendant’s actions and reverse the district court’s decision

to enhance his sentence based on an obstruction of justice.

(...continued)

cide was not clearly erroneous. United States v. McGill, 32 F.3d

1138 (7th Cir. 1994).

Nos. 02-2253, et al. 9

B. Altobello

At sentencing, the court applied a two-level increase to

Altobello’s sentence based on an obstruction of justice en-

hancement provided for in U.S.S.G § 3C1.1. The obstruction

of justice sentencing guideline at issue provides:

If the defendant willfully obstructed justice or impeded,

or attempted to obstruct or impede, the administration

of justice during the course of an investigation, prosecu-

tion, or sentencing of the instant offense, increase the

offense level by 2 levels.

U.S.S.G. § 3C1.1 (1997). The government sought this en-

hancement based on unsworn false statements Altobello

made to law enforcement officers in 1998.

On March 10, 1998, Altobello was confronted by FBI

agents. After hearing a tape-recording of an intercepted

conversation, Altobello admitted that his voice was on the

tape, that he had done a “bad thing.” FBI 3.02, GSSS, Ex.C.

(report summarizing FBI interview with Altobello). How-

ever, at that time, Altobello did not admit committing any

other crime and denied criminal associations with certain

individuals.

Because information regarding the extent of Altobello’s

involvement later contradicted his unsworn statements, the

district court determined that Altobello had impeded the

investigation and therefore obstructed justice. We disagree

and vacate the enhancement.

The district court judge believed that “there must be some

consequence to what Altobello said or failed to say” when

confronted by the FBI agents in 1998. Tr. 62; App. 18. This

court has held that “the obstruction of justice enhancement

does not apply to any and all obstructive conduct that a

defendant may have attempted or committed.” United

States v. Polland, 994 F.2d 1262, 1269 (7th Cir. 1993).

There is not a presumption in favor of an obstruction

10 Nos. 02-2253, et al.

enhancement when a defendant makes unsworn, out-of-

court false statements to law enforcement officers. In fact,

Note 4(b)3 states that “making false statements, not under

oath, to law enforcement officers” is included in the “list of

examples of the types of conduct that, absent a separate

count of conviction for such conduct, do not warrant applica-

tion of this enhancement, but ordinarily can appropriately

be sanctioned by the determination of the particular

sentence within the otherwise applicable guideline range.”

U.S.S.G. § 3C1.1, Application Note 4(b) (emphasis added).

However, if the defendant’s false statement “significantly

obstructed or impeded the official investigation or prosecu-

tion,” the obstruction enhancement may be imposed.

U.S.S.G. § 3C1.1, Application Note 3 (1997).4

Significant and actual obstruction or impediment must be

shown by the government. See United States v. Shriver, 967

F.2d 572, 575 (11th Cir. 1992). The government failed to

establish that Altobello’s unsworn statements significantly

impeded its investigation. The government only offered the

conclusory claim that Altobello’s statements “significantly

obstructed or impeded the official investigation of Basinski,

Hanhardt and the co-conspirators.” (Government’s Consoli-

dated Version of Offense (CGV) 36-37). This was an insuffi-

cient basis for an obstruction increase. See United States v.

Jackson, 935 F.2d 832, 850 (7th Cir. 1991) (“the govern-

ment’s brief statement that it ‘expended resources . . . only

to find out that Gines’ information was misleading’ does not

itself suffice to establish that Gines hampered the investi-

gation in any significant way”).

3

Application note (4)(b) in the 1997 version of § 3B1.1 of the

Federal Guidelines is identical to note (5)(b) in the 2003 version.

4

Application Note 3 is identical to Application Note 4 in the 2003

version of the guidelines.

Nos. 02-2253, et al. 11

In the government’s supplemental sentencing submission,

it essentially relies on the potential for Altobello’s state-

ments to have impeded the investigation, rather than

evidence of actual impediment or hindrance. No government

agents testified at Altobello’s sentencing or otherwise say

that his statements resulted in significant and actual

investigative impediment. Consequently, we vacate the ob-

struction of justice enhancement from Altobello’s sentence.

III. District Court’s Denial of Downward Adjustments for

Acceptance of Responsibility for Hanhardt and Altobello

At sentencing the court denied downward adjustments for

acceptance of responsibility for both Hanhardt and

Altobello. We review the district court’s finding as to

whether a defendant has accepted responsibility for his

criminal activity for clear error. United States v. Taliaferro,

211 F.3d 412, 414 (7th Cir. 2000). Whether a defendant has

accepted responsibility is a “context-specific” inquiry.

United States v. Frykholm, 267 F.3d 604, 610 (7th Cir.

2001); quoting United States v. Branch, 195 F.3d 928, 937

(7th Cir. 1999). Upon review, the determination of the

sentencing judge is entitled to great deference. U.S.S.G. §

3E1.1, Application Note 5. Absent an abuse of discretion, we

will not disturb a sentencing judge’s decision. United States

v. Lange, 312 F.3d 263 (7th Cir. 2002). We find the district

court did not abuse its discretion in this instance and affirm

the denial of acceptance of responsibility points.

A. Hanhardt

Hanhardt entered a blind plea to the indictment on

October 25, 2001, nine days after the case was scheduled to

begin trial. He was the last of the five defendants then

before the court to enter a guilty plea. His lawyer read a

one and a half page statement to the court that admitted to

12 Nos. 02-2253, et al.

the elements of the offense. After the government detailed

the evidence that would have been presented against him,

Hanhardt responded, “I don’t agree with everything he

(Assistant United States Attorney Scully) said.”

Tr10/25/01//41. When the court asked Hanhardt whether he

was pleading guilty to Count One as alleged in the indict-

ment, Hanhardt responded, “In its entirety, no, sir.” Id.

Section 3E1.1 of the sentencing guidelines is designed to

award a defendant who demonstrates contrition through an

honest and full account of his offense conduct. United States

v. Larkin, 171 F.3d 556, 559 n. 4 (7th Cir. 1999). The

sentencing court can require that the defendant provide a

candid and full explanation of the circumstances surround-

ing the offense of conviction. United States v. Hammick, 36

F.3d 594, 600-01 (7th Cir. 1994).

In addition, the act of pleading guilty does not automati-

cally entitle a defendant to the reduction. Id.; U.S.S.G.

§ 3E1.1, Application Note 3. The sentencing judge is also

required to look beyond “formalistic expressions of cul-

pability and to determine whether the defendant has

manifested an acceptance of personal responsibility for his

offense in a moral sense.” Id. at 601; see also United States

v. Beserra, 967 F.2d 254, 256 (7th Cir. 1992). Based on the

foregoing, we affirm the district court’s decision to deny

Hanhardt’s downward departure for acceptance of responsi-

bility.

B. Altobello

Altobello was denied a downward adjustment for accep-

tance of responsibility because he falsely denied the extent

of his involvement in the theft conspiracy. Tr5/28/02//60-68.

On September 26, 2001, Altobello pleaded guilty, admitting

that his role in the enterprise was to provide information

Nos. 02-2253, et al. 13

about traveling jewelry salespersons who came to his son’s

retail jewelry store, Altobello’s Jewelers, Inc. Tr9/26/01//14-

17. He admitted that the information he provided to

Basinski included salespersons’ names, the kind of mer-

chandise they were carrying, the types of vehicles they were

driving and the license plate for those vehicles, and how

often they came to the store. Id. He also claimed that he

had provided such information only on three salespersons

in 1996, a period in which the government had substantial

evidence including a recorded telephone conversation

between Altobello and Basinski and telephone records

showing substantial contact with Basinski. In other words,

Altobello admitted only to that which was impossible to

deny. The court believed the government’s argument that

Altobello had been in contact with the conspirators since

1993, offering information for the first Kashimallak rob-

bery.

The district court judge denied Altobello’s downward

departure for acceptance of responsibility because he did

not believe that he was truthful about the extent of his

involvement in the conspiracy. There is no indication of an

abuse of discretion, so we affirm the district court’s denial

of acceptance of responsibility.

IV. Two-Level Enhancement as to Hanhardt, Basinski, and

Altobello for Theft from the Person of Another

Under 18 U.S.C § 3742(e), a court of appeals reviewing a

sentence imposed under the sentencing guidelines shall

accept the findings of fact of the district court unless they

are clearly erroneous and shall give due deference to the

district court’s application of the guidelines to the facts.

United States v. Mallon, 345 F.3d 943, 945 (7th Cir. 2003).

The district court enhanced the defendants’ sentences

pursuant to § 2B1.1(b)(2) based on evidence of the circum-

stances surrounding two separate thefts. On June 30, 1992,

14 Nos. 02-2253, et al.

Melvin Draftz, a traveling jewelry salesman was distracted

by a bump from behind. Shortly after, he realized his

briefcase, containing his $1.3 million jewelry line, was gone

from the floor by his side. On May 7, 1994, Roland Naftule

was similarly victimized when he was bumped from behind

causing his bag of jewelry to slip from his grasp and

disappear.

A. Factual Finding Regarding Theft from a Person.

The district court judge determined the facts warranted

the theft of person enhancement provided for in § 2B1.1 of

the sentencing guidelines. Theft from the person of another

“means theft, without the use of force, of property that was

being held by another person or was within arms’ reach.

Examples include pick-pocketing and non-forcible purse-

snatching, such as the theft of a purse from a shopping

cart.” U.S.S.G. § 2B1.1, Application Note 1 (emphasis

added).

Whether or not the victims’ bags were within arms’ reach

is a factual determination and is reviewed for clear error.

See United States v. Mijangos, 240 F.3d 601, 604 (7th Cir.

2001). We believe it is a reasonable determination, based on

these facts, that the victims’ bags were within their reach

and so affirm the district court’s finding.

B. Application of the Enhancement to Altobello

In addition, Altobello challenges the court’s application of

this enhancement to him because he claims he was not part

of these specific thefts. He argues that the court misapplied

the principles of conspiracy law. At sentencing, the court

stated:

[It] was foreseeable that there would be theft from

the person, and it was, therefore, foreseeable by Mr.

Altobello that someone would take from the person of

Naftule the jewelry that was contained in the bag that

he had at arm’s reach. He need not have known spe-

Nos. 02-2253, et al. 15

cifically the name of Mr. Naftule, but that other con-

spirators were personally robbing from the persons of

others was clearly foreseeable to Mr. Altobello. And in

fundamental Pinkerton conspiracy law, he is account-

able.

Tr4/29/02//78.

Altobello persists that there was no evidence that he

agreed to a theft from Naftule’s person and therefore that

theft was beyond the scope of his conspiratorial agreement.

Altobello is incorrect. A defendant need not know of a co-

conspirator’s actions for those actions to be reasonably

foreseeable to the defendant. United States v. Hernandez,

325 F.3d 811, 817 (7th Cir. 2003). The court’s finding that

the circumstances of the Naftule theft were foreseeable to

Altobello was not clearly erroneous and so to apply the en-

hancement to Altobello was not an abuse of discretion.

V. Organized Crime Upward Departure for Basinski,

Altobello, and Brown

We review the district court’s application of sentencing

departures de novo, but factual findings are reviewed for

clear error. 18 U.S.C. § 3742(e); Mallon, 345 F.3d at 946.

A. Background

It has long been understood that organized crime derives

much of its power through illegal endeavors, including the

theft and fencing of property. United States v. Turkette, 452

U.S. 576, 588 (1981). The Chicago Outfit (hereinafter the

“Outfit”) is one of the organized criminal enterprises in the

United States. United States v. Rainmone, 32 F.3d 1203,

1209 (7th Cir. 1994). The Outfit “is the clearest example of

a gang operating on such a scale, with such success, over

such a long period of time that the danger it poses to society

is not adequately reflected in the guideline range.” Id.

16 Nos. 02-2253, et al.

The Outfit operates through “street crews,” United States

v. Salerno, 108 F.3d 730, 733 (7th Cir. 1997); United States

v. DiDomenico, 78 F.3d 294, 297-98 (7th Cir. 1996), and

several of the conspirators in this case, including all three

of the defendants who challenge the organized crime

upward departure on appeal, were members of the Ogden/

Grand Avenue crew controlled by Joseph Lombardo.

Information from confidential informants identified

Basinski and Brown, along with Schiro and D’Antonio, as

members of Joseph Lombardo’s Grand Avenue Crew of

the Chicago Outfit and described that group as an orga-

nized crime jewelry theft crew that worked closely with

Hanhardt. CGV 45-52. A witness and an informant iden-

tified Altobello as a jewelry fence for organized crime.

CGV39, 53.

Hanhardt stipulated at sentencing that as to the RICO

conspiracy and the jewelry theft conspiracy, the conspira-

tors used organized crime connections in the commission of

the crimes. DeStefano agreed in his written plea agreement

to a two-level enhancement because organized crime

connections were used in the commission of the RICO

offenses. Tr55/1/02//640-46. Schiro is not appealing that

finding. The court found an organized crime connection for

which Basinski, Altobello, and Brown received a two-level

upward departure. Tr/5/6/02//21, 26; 5/28/02//166-67;

7/31/02//41-42.

Where membership in or association with the Outfit is

used to further the criminal activity for which a defendant

is convicted, an upward departure under the guidelines is

appropriate. United States v. Zizzo, 120 F.3d 1338, 1361

(7th Cir. 1997); United States v. Scheihs, 971 F.2d 1302,

1316-17 (7th Cir. 1992).

The defendants dispute their connection or membership

with organized crime and argue that the unsworn state-

ments of informants, the identity of whom has not been

Nos. 02-2253, et al. 17

disclosed by the government, cannot provide a sustainable

basis for an upward departure. We disagree. Due Process

does not prohibit the use at sentencing of out-of-court

declarations by unidentified informants where those state-

ments are supported by sufficient corroboration. United

States v. Fatico, 579 F.2d 707, 713 (7th Cir. 1978). The

Hanhardt stipulation, DeStefano’s agreement, the crimes,

and the participants in them, all corroborated the infor-

mants. Id. By all this evidence, it is more likely than not

that the conspirators are participants in organized crime.

Id. Therefore, we affirm the upward departure for connec-

tion to organized crime as to Basinski, Altobello, and

Brown.

VI. Basinski’s Role as a Leader and an Organizer

At sentencing the district court judge added a four-level

adjustment to Basinski’s sentence based on his role in the

conspiracy. Guideline § 3B1.1(a) permits this adjustment if

the defendant was an organizer or leader of criminal

activity that involved five or more participants or was

otherwise extensive. U.S.S.G § 3B1.1. Whether Basinski

was a leader in the conspiracy for purposes of § 3B1.1 is

a question of fact which we review for clear error. United

States v. Vivit, 214 F.3d 908, 922 (7th Cir. 2000).

To be classified as an organizer or leader, a defendant

“may simply have organized or in some way directed”

another member of the conspiracy. United States v.

Mustread, 42 F.3d 1097, 1104 (7th Cir. 1994). The upward

adjustment is applicable to each leader in a conspiracy and

more than one conspirator may qualify as an organizer or

a leader. United States v. McClinton, 135 F.3d 1178, 1191

(7th Cir. 1998). See U.S.S.G § 3B1.1(a), Application Note 4.

The wiretap that intercepted the conversations of

Hanhardt and Basinski showed that both exercised deci-

sion-making authority. The two organized and planned the

18 Nos. 02-2253, et al.

identification and stalking of jewelry salespersons and the

theft and sale of jewelry. Basinski recruited and supervised

knowing accomplices and unknowing participants to assist

in the theft of jewelry and the sale of stolen jewelry. In

dozens of recorded conversations, Hanhardt and Basinski

decided whom to target in addition to planning and organiz-

ing the commission of the thefts.

Basinski insists that the district court rejected the three-

level enhancement determined by the probation officer,

made no findings to support its conclusion, and reached its

conclusion based upon only a brief statement by the

government at sentencing. We disagree. The record is clear

that the court relied on the entire record in reaching its

decision. The court stated:

It may well be that Mr. Hanhardt was the ultimate

leader, but clearly he and Mr. Basinski were simulta-

neously the leader[s] and organizers of the conspiracy.

And in making this determination the Court has

considered the 165-page Santiago proffer, as well as the

information in support of the Title III tapes. And the

Court has considered the plea agreements of certain

defendants, as well as, indeed, the blind plea of Mr.

Hanhardt to Count 1 and Count 2. As the Court has

examined all these submissions, including the sub-

missions of Mr. Basinski himself, it is clear that both he

and Hanhardt were leaders and organizers of the

conspiracy.

Tr5/06/02//12-13. It is clear that the district court consid-

ered the entire record before deciding. The district court’s

conclusion that Basinski was a leader and an organizer is

supported by the record and therefore not clearly erroneous.

Nos. 02-2253, et al. 19

VII. Denial of a Downward Adjustment for Minor Role for

Altobello

Altobello was denied a two-level downward adjustment

for minor participation pursuant to § 3B1.2(b) of the

guidelines. A district court’s decision to deny a defendant a

downward adjustment for mitigating role in criminal

activity under § 3B1.2 is a factual determination that is

reviewed for clear error. E.g., Schetz v. United States, 901

F.2d 85, 87 (7th Cir. 1990).

According to § 3B1.2(b), if the sentencing court finds that

the defendant was a “minor participant” in the offense, his

sentence may be decreased by two levels. United States v.

Corral, 324 F.3d 866, 874 (7th Cir. 2003). We have often

held that a minor participant is “one who is substantially

less culpable than the other participants.” Id.; United States

v. Jones, 55 F.3d 289, 293 (7th Cir. 1995). However, we

make this determination by examining “whether the

defendant was a minor participant in the crime for which he

was convicted, not whether he was a minor participant in

some broader conspiracy that may have surrounded it.” Id.;

quoting United States v. Brown, 136 F.3d 1176, 1185-86

(7th Cir. 1998). Though we apply this reduction infre-

quently, a defendant who seeks it must establish by a

preponderance of the evidence that he is entitled to it.

United States v. Soto, 48 F.3d 1415, 1423 (7th Cir. 1995);

Corral, 324 F.3d at 874.

In this case, the district court found that Altobello played

an instrumental role in the offense by providing information

to the other conspirators that enabled them to target the

victims he identified. The principle means by which the

conspirators identified their victims was by gaining access

to industry trade shows and surveilling the traveling

wholesale jewelers who attended those shows. Altobello was

a significant source of information about salespersons who

came to Altobello Jewelers, Inc. He provided information

20 Nos. 02-2253, et al.

about at least five salespersons who carried with them in

excess of $2 million in jewelry and precious stones. In

addition to identifying salespersons, Altobello provided

information about the type and quality of merchandise they

carried and how it was transported, their schedules, the

vehicle license plates, and the type of vehicles they drove.

The district court found that Altobello identified victims

and provided crucial information about them to the other

conspirators, making him an important and a significant

contributor to the conspiracy.

Altobello’s argument that he is significantly less culpable

than the others because he did not participate in all of the

conspiratorial activity is not enough to meet his burden.

The district court’s finding as to Altobello’s role in the con-

spiracy is reasonable and not clearly erroneous. Therefore,

we affirm the denial of a downward adjustment for a minor

role for Altobello.

The district court’s determination that Altobello joined

the conspiracy at least as early as the 1993 robbery of

Kashimallak and that all thefts from that point were

reasonably foreseeable to him is reviewed for clear error.

United States v. Zarnes, 33 F.3d 1454, 1474-75 (7th Cir.

1995). Based on all the evidence that was before the district

court, including circumstantial evidence of his involvement

in the 1995 Kashimallak theft and robbery, the district

court correctly determined that the evidence of Altobello’s

words and actions showed that he was a member of the

conspiracy from at least 1993 and that he demonstrated a

degree of commitment to the objectives of the conspiracy

that made all thefts from 1993 reasonably foreseeable to

him. Tr5/28/02//77-81, 86-87. The finding is not clearly

erroneous and is affirmed.

Based on the foregoing reasons, we AFFIRM in part,

REVERSE in part, and REMAND for new sentencing consis-

tent with this opinion.

Nos. 02-2253, et al. 21

A true Copy:

Teste:

________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit

USCA-02-C-0072—3-16-04