# Opposition — Berg v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition
- **Published:** January 1, 1980
- **Citation:** 449 U.S. 919

## Text

Supreme Co.!t, 4. S. |

FILED
No. 80-132 sp 25 1900

MICHAEL RODAK, JR., CLERK

In the Supreme Court of the Wnit

OCTOBER TERM, 1979

GERALD W. BERG, PETITIONER
Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS FOR
THE FOURTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

WADE H. McCreg, JR.
Solicitor General

PHILIP B. HEYMANN
Assistant Attorney General

Louis M. FISCHER
Attorney

Department of Justice
Washington, D.C. 20530
(202) 633-2217

In the Supreme Court of the United States
OCTOBER TERM, 1979

No. 80-132
GERALD W. BERG, PETITIONER
V.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS FOR
THE FOURTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

QUESTIONS PRESENTED

1. Whether application of the forfeiture provision of
the Organized Crime Control Act of 1970 (18 U.S.C.
1963) results in an impermissible forfeiture of estate.

2. Whether petitioner’s sentence is invalid under the
Double Jeopardy Clause.

3. Whether the Organized Crime Control Act of 1970,
18 U.S.C. 1961 et seqg., applies only to persons commonly
regarded as “racketeers.”

4. Whether petitioner’s conviction should be reversed
because the government’s chief witness at trial was
represented by the United States Attorney’s former law
firm.

II

TABLE OF CONTENTS

Page
SID BIBI vases snscnbisicenicdisssiliciitisssedbicosaegrianiees |
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COI i scisthinichsssieiittcirs nisreesictciiaiilat aa aig esata 8
TABLE OF AUTHORITIES
Cases:
Calero-Toledo v. Pearson Yacht Leasing Co.,
GG SE, Ge seatincccinvislisnectkstbanticatenibaincnssseaee 3, 4
Goldsmith-Grant v. United States, 254 U.S.
TOD sscindiatinisiiiasisihaiiintedbtleisidertaaat aia isa 4
Mandel v. United States, No. 79-1029, cert.
denied, (Apr. 14, 1980) ou... eeeeeeseeeeseseeeesseeees 3
One Plymouth Sedan v. Pennsylvania, 380
BS Fp, GW -inkincntbsundictbinedhescbiincsciccdaieiatestinbatbaibiias 4
Shaffer v. Heitner, 433 U.S. 186 o....ccccececcccceseeeeeees 4
United States v. Aleman, 609 F. 2d 298 ..........c0008 5
United States v. Campanale, 518 F. 2d
352, cert. denied, 423 U.S. 1050 ................0000 5, 6
United States v. Chovanec, 467 F. Supp.
Ge ssapissiciadevianiscindiaiidiadéritiainhiciielninkoleiameiainties 5
United States v. Culbert, 435 U.S.
SEA. sigusiinapideiobsadigieanidsddinaticinreeabiibiatantaciaitits 6, 7

United States v. Forsythe, 560 F. 2d
SEAT nctinnstctesdinedatinienvacimpbaavecatiateincatdsttedsactebehicidletns 5

III

Page
Cases—Continued:
United States v. Huber, 603 F. 2d 387, cert.

denied, No. 79-896 (Mar. 17, 1980) ........ccseceseees 4
United States v. L’Hoste, 609 F. 2d 796,

petition for cert. pending, No. 79-1898 ..........00 4
United States v. Mandel, 415 F. Supp.

CT cadcaccdasenasenpmaccabuievundshekcdabanebaitanadebonebetiia 3, 5, 7
United States v. Rubin, 559 F. 2d 975 .........seceeees 3
United States v. Swiderski, 593 F. 2d 1246,

cert. demied, 441 U.S. 933 oo... eceececeseceeeeeeees 5
United States v. Vignola, 464 F. Supp.

PUTT. icsvcisnusbabebcadladsncidasdabisinwsesusenacemcetapasaeanlas 5
Whalen v. United States, No. 78-5471

CR Bi BR Beets vcsihsnstsnnenepapcitiniseccesateanesactiias 5

Constitution and statutes:
United States Constitution:
Ast. BEE, @ Fj GRIDS ccscicsccessccnsscccgsccdsccsceveaerens 3
Fifth Amendment (Double Jeopardy
SE seat dhdibindchisasteneciunecsuintindtcninbaemediuntiaks 5

Eighth Amendment .................:csssssssssssseeseeeeeeees 3
Be Saw OF inceeaaddstsadidinasssnesnickiaidesicadbaacmmaaiaeiains 4
Be WEaiilacs NE diibdicdscnscnctnnstanessaatannpbemstanebiasans 1, 4
UD Rimes: RatUIEY wilianiuiihbbenniiiscapeavennesssieepenecusiiaeanmnanel l
PO Rimi ire: BIE ME I kchenctincsshnnsscnteeniionestunnetons 3, 5

BG UB, SRDEGED scccssrcccecssssotnccsncessccessenstobasebenns 4, 6

IV

Constitution and statutes—Continued:

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BO MUTE BOUIN oa ccscscssescoscsscsacevscoscocscoseesees
io scshcsssnmiboueousen
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MIN ae cicscsccssinsoticvconsoubocmsinalicbceata’
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Miscellaneous:

Congressional Statement of Findings and
Purpose, P.L. 91-452, Section 1;

Se es SE GED ccinccnscncscenecenscoccncssonenne

116 Cong. Rec. (1970):

EE ES a a ee
Mali IID co ccctecrctesssevvevoncsosetsnasencsie

S. Rep. No. 91-617, 91st Cong.,

BUR TEGED. CIGD cccseccscescsessccocccenesccssesccccconces

OPINION BELOW

The opinion of the court of appeals (Pet. App. la-28a)
is reported at 620 F. 2d 1026.

JURISDICTION

The judgme..t of the court of appeals was entered on
April 21, 1980 (Pet. App. 29a). A petition for rehearing
was denied on May 29, 1980 (Pet. App. 30a). On June 24,
1980, the Chief Justice extended the time for filing a
petition for a writ of certiorari to and including July 28,
1980, and the petition was filed on that date.

STATEMENT

Following a jury trial in the United States District
Court for the District of Maryland, petitioner was
convicted on one count of engaging in a pattern of
racketeering activity (18 U.S.C. 1962(c)), 12 counts of
mai! fraud (18 U.S.C. 1341), and one count of obstructing
a criminal investigation (18 U.S.C. 1510). He received a
concurrent sentence on all counts of four years’ imprison-
ment and a $15,000 fine. In addition, his interest in Buzz
Berg Wrecking Company, Inc., was ordered forfeited
pursuant to 18 U.S.C. 1963(a). The court of appeals
reversed the conviction for obstructing a criminal
investigation, but otherwise affirmed (Pet. App. la-28a).

The evidence at trial showed that from January 1968 to
July 1976, petitioner participated in a scheme by which he
and certain other demolition contractors in Baltimore
insured that they received the City’s demolition business
at fixed and artificially inflated prices. Petitioner and the
other contractors enlisted the aid of co-defendant Ottavio
Grande, who was director of the city department

2

responsible for awarding demolition contracts.’ Grande
also had authority to award contracts for the removal of
fire hazards on an informal bidding basis (Pet. App. 2a-
3a). By collusion and use of confidential information
provided by Grande, the contractors succeeded in
obtaining contract awards at prices higher than the prices
that would have resulted from true competitive bidding.

The evidence showed that Grande provided the group
with the City’s appraisal of the cost per cubic foot for
each demolition project (Pet. App. 4a; Tr. 439, 442).
From this information, petitioner and the other contrac-
tors were able to determine the maximum “low” bid that
could be made without causing the City to reject the bids
and readvertise the project (Pet. App. 4a). The group
members then agreed to alternate as the “low” bidder,
with the others either bidding larger amounts or
refraining from bidding at all (ibid.). Grande was paid
approximately five percent of each contract that was
awarded pursuant to this scheme (ibid.). Petitioner and his
co-defendants also took steps to maintain the effectiveness
of their bid-rigging activities by coopting outsiders. Thus,
when Andrew and Edgar Hawthorne, who owned a
Philadelphia demolition company, began making legitimate
bids for contracts, they were approached by the group (Tr.
1052) and were soon persuaded to join it (Pet. App. |2a-13a;
Tr. 1064, 1066).

'The other contracters were Joseph Tuller, Andrew and Edgar
Hawthorne, Pietro Castagna, Charles Collison, Roland Larkin,
Julius Hoffman, Harry Milzman, and C. Gordon Spielman. Co-
defendants Tuller, Andrew and Edgar Hawthorne, Castagna, and
Grande were convicted at trial on various charges resulting from their
participation in the scheme. Tuller did not appeal. The convictions of
Grande and Castagna were affirmed along with petitioner’s
conviction on appeal, while those of Andrew and Edgar Hawthorne
were reversed. The remaining contractors testified as government
witnesses at trial.

3

ARGUMENT

Petitioner’s first three arguments concern the scope and
application of the RICO statute, 18 U.S.C. 1961 et seq.
No federal court has accepted any of these contentions,
many have rejected them, and this Court denied review of
three virtually identical claims in Mandel v. United States,
No. 79-1029, cert. denied, April 14, 1980. There is no
reason for a different result here.

1. Petitioner first contends (Pet. 12-18) that forfeiture
of his interest in the business firm used in the bid rigging
scheme constitutes a “forfeiture of estate” in contraven-
tion of Art. III, § 3, Clause 2, and the EighthAmendment
to the Constitution.

The common law doctrine of forfeiture of estate
required surrender of the defendant’s estate and chattels
upon conviction of treason and certain other felonies.
Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S.
663, 682 (1974). By contrast, as the Senate Committee on
the Judiciary noted in explaining Section 1963, “the
concept of forfeiture as a criminal penalty [is] limited in
Section 1963(a) to one’s interest in the enterprise which is
the subject of the specific offense involved here, and
[does] not extend[] to any other property of the convicted
offender * * *.” S. Rep. No. 91-617, 91st Cong., Ist Sess.
80 (1969). The Committee emphasized that the purpose of
the forfeiture statute was to divest persons engaged in
criminal activities of their interests in organizations
acquired or operated through racketeering methods. /d. at
79-80; see United States v. Rubin, 559 F. 2d 975, 991-992
(Sth Cir. 1977).

There is nothing novel about forfeiture statutes that
operate in this fashion. Following adoption of the
Constitution, Congress enacted statutes providing for
forfeiture of many types of property that have been used

4

in the conduct of a criminal enterprise. See, e.g., 15
U.S.C, 6; 21 U.S.C. 824(f); 26 U.S.C. 7301; 49 U.S.C. 781-
783. Because the object of these forfeiture statutes is to
penalize the commission of an offense against the law,
they are deemed quasi-criminal in nature. One Plymouth
Sedan v. Pennsylvania, 380 U.S. 693, 700 (1965). This
Court repeatedly has affirmed application of such
forfeiture statutes even when—in contrast to the present
case—they visit.a forfeiture on a property owner who has
not himself used the property for criminal purposes. See,
e.g., Calero-Toledo vy. Pearson Yacht Leasing Co., supra,
416 U.S. at 683; Goldsmith-Grant v. United States, 254
U.S. 505, 510-513 (1921).

Petitioner’s claim (Pet. 14-17) that Section 1963 gives
rise to a constitutionally impermissible in personam
forfeiture is also without merit. It is, of course, true that
the statute imposes a forfeiture directly upon a defendant
following his conviction, rather than after a formally
separate proceeding in rem against the offending
property. But because both procedures are designed to
penalize the commission of an offense and result in an
identical forfeiture of the property involved in the
criminal enterprise, there is “no substantial difference
between an in rem proceeding and a forfeiture proceeding
brought directly against the owner.” United States v.
Huber, 603 F. 2d 387, 397 (2d Cir. 1979), cert. denied, No.
79-896 (Mar. 17, 1980); see also United States v. L’ Hoste,
609 F. 2d 796, 813 n.15 (Sth Cir. 1980), petition for cert.
pending, No. 79-1898; see also Shaffer v. Heitner, 433
U.S. 186, 207 n.22 (1977).

2. Petitioner next argues (Pet. 18-21) that his separate
convictions under the RICO statute (18 U.S.C. 1961) and
under the mail fraud statute (18 U.S.C. 1341) resulted in
impermissible “multiple punishment” in violation of the

5

Double Jeopardy Clause as construed by this Court in
Whalen v. United States, No. 78-5471 (Apr. 16, 1980).

While we wholly disagree with petitioner’s discussion of
this issue, there is no occassion to consider it here, since
the issue is simply not presented by the sentence imposed
on petitioner. He was sentenced, under the RICO count,
to four years’ imprisonment, a $15,000 fine, and forfeiture
of his interest in the wrecking company. This sentence was
well within the limits provided by the RICO statute. All
of the sentences on the other counts on which petitioner
was convicted were concurrent with the RICO sentence.
Accordingly, petitioner was not cumulatively punished,
regardless of whether the RICO and mail fraud counts are
the “same” for constitutional or statutory purposes.

3. Petitioner also claims (Pet. 22-24) that the RICO
statute, 18 U.S.C. 1961 et seqg., was intended to reach only
“professional racketeers” or persons engaged in organized
crime. That contention has been correctly rejected by
every court that has considered it.?

While the stated purpose of the Organized Crime Act,
of which RICO is a part, is to eradicate organized crime,
the statute does not require proof that a defendant is
connected with organized crime. United States v. Aleman,
supra, 609 F. 2d at 304. The defendant’s behavior, not his
status, determines the applicability of the statute. See,
e.g.. United States v. Swiderski, 593 F. 2d 1246, 1249
(D.C. Cir. 1978), cert. denied, 441 U.S. 933 (1979); United

2See United States v. Aleman, 609 F. 2d 298, 302-305 (7th Cir.
1979), certiorari denied, No. 79-1009 (Mar. 24, 1980); United States v.
Campanale, 518 F. 2d 352, 363-364 (9th Cir. 1975), cert. denied, 423
U.S. 1050 (1976); United States v. Chovanec, 467 F. Supp. 41, 44-45
(S.D. N.Y. 1979); United States v. Vignola, 464 F. Supp. 1091, 1096
(E.D. Pa. 1979); United States v. Mandel; 415 F. Supp. 997, 1018 (D.
Md. 1976). See also United States v. Forsythe, 560 F. 2d 1127, 1135-
1136 (3d Cir. 1977).

6

States v. Campanale, supra, 518 F. 2d at 364. Thus, on its
face, Section 1962(b) punishes anyone who, through a
“pattern of racketeering activity,” maintains an interest in
or controls an enterprise engaged in interstate commerce.
Section 1962(c) similarly prohibits conducting the affairs
of an enterprise engaged in interstate commerce through a
“pattern of racketeering activity.” ‘Racketeering activity”
is, in turn, defined to include violations of a number of
federal criminal statutes, including the federal mail fraud
statute. See 18 U.S.C. 1961(1). And “pattern of racketeer-
ing activity” is defined as “at least two acts of racketeering
activity, one of which occurred after the effective date of
this chapter and the last of which occurred within ten
years *** after the commission of a prior act of
racketeering activity.” 18 U.S.C. 1961(5). In short,
Congress has enacted a comprehensive statutory scheme
designed to punish “any person” who engages in a pattern
of explicitly defined acts of racketeeiing. Nothing on the
face of the statute suggests that, in addition to these
requirements, its application is limited to persons engaged
in “organized crime.” See United States vy. Campanale,
supra, 518 F. 2d at 364; see also United States v. Culbert,
435 U.S. 371 (1978).3

3The Act’s legislative history confirms that it should be given the
broad interpretation its terms command. While Congress’s primary
concern in enacting the statute was to cure the corruption of business
enterprises and democratic processes by organized crime (see
Congressional Statement of Findings and Purpose, P.L. 91-452, Section
1; 18 U.S.C. 1961 note), Congress also made it clear that the statute
“shall be liberally construed to effectuate its remedial purposes.” Pub. L.
91-452, Section 904; 18 U.S.C. 1961 note. In keeping with its desire to
assure liberal construction, Congress rejected suggestions that a
definition of organized crime be added to the statute (see 116 Cong. Rec.
35343-35344 (1970)), preferring to provide the Attorney General
maximum flexibility in effectuating its broad remedial objectives (116
Cong. Rec. 35302 (1970) (Remarks of Rep. Celler)). Congress’s actions
offer convincing evidence that it Jid not intend that some connection

7

4. Petitioner also contends (Pet. 24-25) that his
conviction should be reversed because the United States
Attorney’s former law firm represented the chief govern-
ment witness at petitioner’s trial. This claim is without
merit for the reasons explained by the court of appeals
(Pet. App. 7a-8a). The U.S. Attorney submitted an
affidavit to the district court confirming that he had
recused himself from any decisions involving the witness.
The two prosecutors in charge of the case also filed
affidavits stating that the U.S. Attorney made no
decisions concerning the witness and that the U;S.
Attorney knew nothing of their own arrangements with
the witness (see Pet. App. 7a-8a). Under these cir-
cumstances, the court below was correct in concluding (id.
at 8a) that there was no “evidence of an appearance of
impropriety.” Further review of that factual issue is not
warranted.

with organized crime be demonstrated as a prerequisite to conviction.
United States v. Mandel, supra, 415 F. Supp. at 1019. Had Congress
intended that membership in organized crime be an element under the
racketeering statute, it certainly would have defined the expression
“organized crime,” since “the highly subjective and prejudicial
connotations of that term [] would simply render the statute
unenforceable, a result plainly not in the contemplation of Congress.”
United States v. Mandel, supra, 415 F. Supp. at 1018-1019; see also
United States v. Culbert, supra, 435 U.S. at 373-374.

8

CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.

WADE H. McCreg, JR.
Solicitor General

PHILIP B. HEYMANN
Assistant Attorney General

Louis M. FISCHER
Attorney

SEPTEMBER 1980

DOJ-1980-09

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0154%3A2. Public record. Not legal advice.