Opposition — Cheiman v. United States

No. 78-423 NOV 26 1910

— Sas ae CLERK |

In the Supreme Court o of the Vnited States

OCTOBER TERM, 1978

FRED CHEIMAN and NICHOLAS SARDELIS, JR., PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES

IN OPPOSITION

WADE H. McCrEE, JR.

Solicitor General

PHILIP B. HEYMANN

Assistant Attorney General

SIDNEY M. GLAZER

PATTY ELLEN MERKAMP

Attorneys

Department of Justice

Washington, D.C. 20530

In the Supreme Court of the Hnited States

OCTOBER TERM, 1978

No. 78-423

FRED CHEIMAN and NICHOLAS SARDELIS, JR., PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES

IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. la-10a)

is reported at 578 F. 2d 160.

JURISDICTION

The judgment of the court of appeals was entered on

June 26, 1978, and a petition for rehearing was denied on

August 18, 1978. The petition for a writ of certiorari was

filed on September 13, 1978. The jurisdiction of this

Court is invoked under 28 U.S.C. 1254(1).

QUESTIONS PRESENTED

i. Whether the government may appeal a judgment of

acquittal entered after the jury has returned a guilty

verdict.

(1)

2. Whether the district court improperly deferred ruling

on petitioners’ motion for a judgment of acquittal.

3. Whether collection of an extension of credit by

extortionate means, in violation of 18 U.S.C. 894(a)(1),

requires proof of “loansharking” or connection with

organized crime.

STATEMENT

Following a jury trial in the United States District

Court for the Eastern District of Michigan, petitioner

Cheiman was convicted on one count and petitioner

Sardelis on two counts of attempting to collect an

extension of credit by extortionate means, in violation of

18 U.S.C. 894(a)(1).

1. The evidence at trial showed that petitioner Cheiman

was part-owner of a drug store, which had incurred

operating losses of close to $9,000 between its opening on

March 4, 1974, and August 31, 1974. In September 1974

Cheiman hired Arthur Sklar to work as a pharmacist on

the understanding that Sklar might later buy a 25%

interest in the store for $15,000 to $18,000, if both agreed.

In October, Cheiman threatened to fire Sklar if he did not

invest in the operation. Two of Sklar's paychecks bounced

and Sklar decided not to invest, but he did not tell

Cheiman (Tr. 30-36, 213, 219; Pet. App. Sa).

On November 3, 1974, in response to written instruc-

tions left by one of Cheiman’s partners, Sklar prepared a

package of pharmaceuticals for transfer to another of

Cheiman’s stores and placed the package, worth between

$100 and $200, on a shelf beneath the pharmacy counter.

That evening Cheiman told Janice Lefton, an employee at

the pharmacy, to “[kJeep her eyes opened,” which she

interpreted to mean that she should watch Sklar. Lefton

noticed the package of pharmaceuticals and showed it to

Cheiman (Tr. 55-56, 513-514, 570-575).

On November 6, 1974, Cheiman told petitioner Sardelis

and another man that he suspected Sklar of stealing from

his store. The three men confronted Sklar with the

package of pharmaceuticals in a back room of the store

and accused him of stealing $7,000 worth of drugs.' Skiar

denied the accusation. At that point Sardelis, whom

Sklar had never seen before, grabbed Sklar around the

neck, pushed him, and tapped him on the shoulder with a

baseball bat. Cheiman demanded that Sklar sign a paper

previously drafted by Cheiman in which Sklar would

admit to having stolen $7,000 worth of drugs and promise

to “make full restitution for said sum, either by return of

the drugs or full cash payment for same” (Gov't Exh. |,

Tr. 64). When Sklar refused, Sardelis pointed a gun at

Sklar’s chest and showed Sklar a bullet, saying that it was

a soft lead bullet and “that it goes in very small but it

comes out real big” (Tr. 59-60, 259-261). Frightened,

Sklar signed the note and also made out a check for

$7,000, although he told petitioners that he did not have

funds to cover the check. Sardelis took $20 to $30, an

American Express card, and a driver's license from Sklar's

wallet. Sardelis told Sklar that he could help him obtain a

mortgage to pay the $7,000 and warned that if he went to

the police or did not pay, Sardelis might harm Sklar’s

family and would prevent Sklar from keeping any job

with another pharmacy. Cheiman fired Sklar and told

Sklar that if he did not pay within a week he would hear

from them (Tr. 58-65, 242-250; Pet. App. Sa-6a).

Thereafter Cheiman spoke to Sklar by phone on several

occasions and said that the matter was now out of his

hands and had been turned over to “Nick.”? Cheiman

'After his arrest Cheiman admitted that he had no idea how

much Sklar had taken and could not explain how he arrived at the

$7,000 figure (Tr. 375-379).

2Cheiman also told Sklar that the other investors in the pharmacy

wanted to know why they were losing money, and that in response

Cheiman had explained that Sklar was a thief. He told Sklar, “I'm off

the hook. You're on it” (Pet. App. 6a).

always refused to tell Sklar what Sardelis’ surname was

(Pet. App. 6a).

On November 12, 1974, Sardelis called Sklar’s home

and told Sklar’s son that Sklar’s time was about up. On

November 14, Sardelis called again and this time spoke to

Sklar’s wife. He warned: “You can just tell Art he had

better make good on his debts real quick” (ibid.).

2. The jury convicted both petitioners of attempting to

collect an extension of credit by extortionate means on

November 6, 1974, and convicted Sardelis alone of

committing the same offense on November 14, 1974.3

The district court thereafter set aside the verdicts on the

ground (1) that attempts to obtain restitution for a

theft are not, as a matter of law, prohibited by 18 U.S.C.

894 and (2) that the evidence of an agreement to pay and

of attempts to collect the debt was, in any event,

insufficient to support the verdict. The court of appeals

reversed. It held that petitioners’ conduct was prohibited

by 18 U.S.C. 894; the court refused to read into the

statute a requirement that petitioners must be loansharks

or members of organized crime (Pet. App. 4a, 6a-9a). It

also held petitioners’ argument attacking the sufficiency of

the evidence to be “insubstantial” (Pet. App. 10a n.17).

ARGUMENT

1. Petitioners first contend (Pet. 12-14) that the Double

Jeopardy Clause precludes the government's appeal in this

case.

The Double Jeopardy Clause is primarily directed at

the threat of multiple prosecutions and does not bar

government appeals where a new trial or other fact-

finding proceedings would not be required if the

government prevailed on appeal. United States v. Scott,

‘Petitioners were acquitted on the conspiracy count (Pet. App.

17a).

No. 76-1382 (June 14, 1978), slip op. 3, 8 & n.7; United

States v. Martin Linen Supply Co., 430 U.S. 564, 569-570

(1977); United States v. Jenkins, 420 U.S. 358, 365, 370

(1975). Where, as here, “reversal on appeal * * * * merely

reinstate[d] the jury’s verdict * * *,” United States v.

Wilson, 420 U.S. 332, 344-345 (1975), and did not give

the prosecution a second opportunity to supply evidence

(Burks v. United States, No. 76-6528 (June 14, 1978), slip

op. 16), the Double Jeopardy Clause does not bar the

appeal.

The appealability of judgments of acquittal entered

after a guilty verdict has been rendered is also uniformly

supported by the decisions of the courts of appeals. See,

e.g., United States v. Schoenhut, 576 F. 2d 1010 (3d

Cir.), cert. denied, No. 78-13 (Nov. 13, 1978);4 United

States v. Burroughs, 564 F. 2d 1111, 1117-1119 (4th Cir.

1977); United States v. Ramos, 558 F. 2d 545, 546 (9th

Cir. 1977); United States v. Hemphill, 544 F. 2d 341, 343

(8th Cir. 1976), cert. denied, 430 U.S. 967 (1977); United

States v. Cravero, 530 F. 2d 666, 670-671 (Sth Cir. 1976);

United States v. De Garces, 518 F. 2d 1156, 1159 (2d Cir.

1975).

2. Petitioners moved for a judgment of acquittal on all

three counts at the close of the government's case in chief.

They now contend (Pet. 14-16) that the district court

improperly reserved ruling on this motion until the jury

reached its verdict, in violation of Fed. R. Crim. P. 29a).°

‘Contrary to petitioners’ assertion (Pet. 14). this case has not “been

docketed for decision” by this Court.

SRule 29(a) provides in relevant part:

The court on motion of a defendant or of its own motion shall

order the entry of judgment of acquittal of one or more offenses

charged in the indictment or information after the evidence on

either side is closed if the evidence is insufficient to sustain a

conviction of such offense or offenses.

But the court did rule on the sufficiency of the evidence

to support the substantive counts, denying petitioners’

motions as to Counts 2 and 3 (Tr. 451; see also Tr. 444-

445). It adopted, for purposes of its ruling, the

government’s construction of 18 U.S.C. 894, that proof of

‘oansharking or organized crime connections is not

.equired by the statute (discussed in point 3, infra).

While the court did reserve a ruling on the correctness

of the government's construction of the statute (Tr. 451),

petitioners did not object to this delayed ruling on the

government's legal theory. They therefore can now

complain at most of plain error. And since the court of

appeals ultimately determined that the government's

construction of the statute was correct, petitioners in fact

received a timely ruling applying the correct legal theory.

They suffered no injury® other than the loss of an unjust

ruling in their favor,’ and they accordingly have no

cognizable grievance regarding the reasonable approach

adopted by the district court, which comported with that

approved by this Court in Scott, supra (slip op. 17 n.13)

and United States v. Ceccolini, 435 U.S. 268, 271 (1978).

3. Petitioners concede that 18 U.S.C. 894 “was meant

to and does extend coverage beyond the classical loan-

sharking case” (Pet. 17) but argue (Pet. 16-18) that in

*Petitioners claim injury because the government could not have

appealed the trial court's decision if the court had decided the legal

issue against the government, and entered a judgment of acquittal, at

the time of their initial motion. But petitioners’ claim amounts only

to a complaint that they were denied the benefit of an erroneous

ruling of law to which they can hardly claim a legal right.

‘The court also deferred ruling on the sufficiency of the evidence as

to the conspiracy count. But since petitioners were both acquitted on

that count, the propriety of the court's action is no longer at issue.

Petitioners do not contend that the evidence offered after the

reservation of the, issue on Count | somehow improperly affected the

jury’s deliberations on the other counts.

this case the court of appeals improperly applied the

statute to “the owner of a small business [who] confronts

a customer or an employee, whom he believes to be a

thief and obtains a confession and [a] promise of restitu-

tion from him.” The short answer ‘9 this contention is

that while the statute probably does not apply to the case

posited by petitioners, that hypothetical is not this case.

Petitioners did not simply obtain a “confession” and a

promise of payment; they used “extortionate means” to

attempt to collect from Sklar, including not only verbal

threats but also threats with a baseball bat and a gun.

This clearly brought petitioners within the statute, which

prohibits “knowingly participat[ing] in any way, or

conspir{ing] to do so, in the use of any extortionate means

(1) to collect or attempt to collect any extension of credit

***” 18 U.S.C. 894(a). “Extortionate means” is defined

as “any means which involves the use, or an express or

implicit threat of use, of violence or other criminal means

to cause harm to the person, reputation, or property of

any person.” 18 U.S.C. 891(7).

Contrary to petitioners’ suggestion (Pet. 16-17), the

government need not show involvement of organized

crime in the transaction. As is the case with the Hobbs

Act, 18 U.S.C. 1951, which this Court recently construed

in United States v. Culbert, 435 U.S. 371 (1978), and

which also prohibits extortionate transactions, “[nJothing

on the face of the statute suggests a congressional intent

to limit its coverage to persons who have engaged” in

racketeering (id. at 373}. To the contrary, the statutory

language “sweeps within it” (ibid.) all persons who have

“in any way” participated in the use of any extortionate

means to collect an extension of credit. As with the

Hobbs Act, the statute here “carefully defines its key

terms” (ibid.), such as “exten[sion of] credit,” “collect[ion

of] extension of credit,” and “extortionate means.” 18

U.S.C. 891(1), (5), (7). Congress has “conveyed its

purpose clearly,” and there is no need “to limit the

statute’s scope by reference to an undefined category of

conduct” (United States v. Culbert, supra, 435 U.S. at

379, 380) such as loansharking or organized crime

connections.*

The legislative history of 18 U.S.C. 894 shows that

Congress did not intend to limit the statute to loanshark-

ing. An amendment offered by Congressman Poff that

would have defined the offense of extortionate collection

of loans in terms of loansharking (see 114 Cong. Rec.

1606 (1968)) was adopted by the House (id. at 1610), but

the reference to loansharking was omitted by the

conferees. See H.R. Rep. No. 1397, 90th Cong., 2d Sess.

10 (1968). See also Perez v. United States, 402 U.S. 146,

149 (1971). And there is no indication -that Congress

required a showing of connection with “organized crime,”

whatever that may include.? Rather, Congress was

well aware that the statute would not be confined to

interstate transactions but would permit “prosecution in

Federal as well as State courts of a typically State

offense.” 114 Cong. Rec. 1610 (remarks of Rep.

Eckhardt).

The court below therefore was correct in following the

other courts that have considered the question and

declining to read a requirement of loansharking or

connections with organized crime into the statute. See,

e.g., United States vy. Annerino, 495 F. 2d 1159, 1164-1165

(7th Cir. 1974); United States v. Bonanno, 467 F. 2d 14,

16-17 (9th Cir. 1972), cert. denied, 410 U.S. 909 (1973);

‘As this Court noted in Culbert, when the Congress wanted to

make racketeering an element of an offense, as in 18 U.S.C. 1961 ef

seq., it knew how to do so. See 435 U.S. at 378 n.9.

%As was the case in Culbert, if the courts read in a requirement of

loansharking or organized crime connections in the absence of a

statutory definition of such language, the result might be a statute

whose meaning was so vague as to be constitutionally defective.

United States v. Culbert, supra, 435 U.S. at 374.

United States v. Briola, 465 F. 2d 1018 (10th Cir. 1972),

cert. denied, 409 U.S. 1108 (1973); United States v.

Keresty, 465 F. 2d 36 (3d Cir.), cert. denied, 409 U.S. 991

(1972); cf. United States v. Sears, 544 F. 2d 585 (2d Cir.

1976), '0

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

WapDE H. McCREE, Jr.

Solicitor General

PHILIP B. HEYMANN

Assistant Attorney General

SIDNEY M. GLAZER

PATTY ELLEN MERKAMP

Altorneys

NOVEMBER 1978

(

‘Petitioners contend (Pet. 18-19) that the court of appeals should

not have reversed the trial court's rulings that the government had

presented insufficient evidence of an agreement to defer payment and

of an attempt to collect the debt by extortionate means.

The court of appeals was correct in rejecting petitioners’ arguments

as to the strength of the evidence as “insubstantial” (Pet. App. 10a

n.17). The statute covers an agreement to defer payment of claims

whether the claims are acknowledged or disputed, valid or invalid (18

U.S.C. 891(1)). Here, Sklar and petitioners agreed to defer payment

of a claim, and the fact that Sklar disputed the validity of the claim is

not material. Similarly, the record clearly shows attempt to collect the

debt by “express or implicit threat of use, of violence” (18 U.S.C.

891(7)): threats were made both immediately after Sklar agreed to

pay petitioners on November 6 and during subsequent telephone

conversations between petitioner Sardelis and Sklar and Sklar's wife.

DOJ-1978-11