Petition — Hedman v. United States

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~ S Court, U.S.

() 9 96 ave: :

No. JEG Y 1980

MICHAEL RODAK, JR., CLERK

In the

Supreme Court of the United States

OcToBER TERM, 1980

JOHN HEDMAN, MICHAEL JERCICH,

THOMAS KARNICK and HENRY LARSEN,

Petitioners,

vB.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

EDWARD J. CALIHAN, JR.,

ANNA R. LAVIN,

538 W. Jackson Boulevard,

Chicago, Illinois 60604

| Attorneys for Petitioners,

* John Hedman, Michael Jercich,

and Henry Larsen

JULIUS LUCIUS ECHELES

35 E. Wacker Drive

Chicago, Illinois 60601

Attorney for Petitioner

Thomas Karnick

‘seaonemerer

UNITED STATES LAW PRINTING CO., CHICAGO, ILLINOIS 60618 (312) 525-6581

THE QUESTIONS PRESENTED FOR REVIEW

1. When a public official obtains property from another

on the charge under Title 18 U.S.C. $1951, that it was ob-

tained solely ‘‘under color of official right’’, must in-

ducement for the payment come from the official, or is the

mere fact of receipt sufficient for conviction?

2. Since Title 18 U.S.C. $1951, concerning the obtain-

ing of property ‘‘under color of official right’’ allows of

at least two permissible interpretations, is it constitutonal?

3. Is the Seventh Circuit’s interpretation of such sec-

tion, when viewed together with other subsisting federal

laws, consistent with a reasonable effectuation of Con-

gressional intent?

4. When two permissible interpretations of a statute

are feasible, if not entirely reasonable, does not the policy

of lenity foreclose the Seventh Circuit interpretation?

o. May the initiator and giver of a bribe to a public

official be, at the same time in the same transaction, the

victim of an extortion by the public official he was indicted

for, and pleaded to, bribing.

6. When a person has been charged with a material

misrepresentation on his tax return (26 U.S.C. $7206(a))

in that he stated his gross income to be a certain amount,

‘‘when he then and there knew and believed, his income

was substantially in excess of that sum,”’ is it consistent

with the Fifth Amendment that conviction may rest on

any material misrepresentation?

7. When the Congress has deemed guidance necessary

in defining ‘‘substantial understatement’’ in the Internal

Revenue Code for purposes of minor civil disadvantages,

may a jury find felonious guilt, without any guidance,

except its own perceptions of what substantial under-

statement means when it is criminally charged?

8(A). Where petitioner Karnick was named in only 2

of 19 counts, was the subject of 167 of some 1279 pages

of evidentiary trial material, was the only defendant not

charged with tax offenses, and where his co-defendants

were charged in 17 separate substantive offenses—8 of

which were Hobbs Act charges naming ‘‘extortees’’ with

which petitioner Karnick is not even alleged to have been

connected—and where different defense tactics of his co-

defendants resulted in the court advising the jury (over

Karnick’s objection) that no inference may be drawn from

any defendant’s failure to testify, as well as in the review-

ing court condoning as ‘‘invited response,’’ certain pro-

secutorial argument attacked by Karnick on appeal, though

the invitation was from a co-defendant’s counsel, was the

totality of the circsumstances such that severance was

required in the interest of justice, under F.R.Cr.P. 14,

rendering the trial court’s denial of Karnick’s motion for

severance an abuse of discretion?

8(B). Alternatively, was joinder improper from the

outset under F.R.Cr.P. 8, entitling Karnick to a reversal,

for the conspiracy count failed to encompass any of the

counts 6 through 19, none of which named or otherwise

involved him?

8(C). May petitioner Karnick’s convictions stand af-

firmed on the basis that Karnick failed properly to have

labelled his motion for severance?

LIST OF PARTIES TO THIS PROCEEDING

All of the captioned Petitioners seek this review.

iil

LIST OF PARTIES TO THIS PROCEEDING

All of the captioned Petitioners seek this review.

TABLE OF CONTENTS

Official and Unofficial Reports of Opinions Below .... 1

INI TO OND canard Sete tecerncneees 2

Constitutional and Statutory Provisions ....000000000...... 2

eee GG 0 SS i ees 3

MEINE 2. cascitandons oss catehetananis Sid) oodocnaeohanteaeaiadnc arene om ae

Appendix—

A. Opinion of the United States Court of

MIE 2 yorcscxccocatelabeemcnintadeemcenendeaoaie App. 1

B. Order Denying Petition for Rehearing ........ App. 34

C. Constitutional and Statutory Provisions and

NN TIONG vi5gs ss rents ceaceessaarncccnieniena App. 36

i iar 0 oo en Poe ee 40

AUTHORITIES CITED

Cases

PAGE

Adamo Wrecking Co. v. United States, 434 U.S. 275

UI se Ri da tsa oidta dle hsiclanpcaadaceemenieeenmianmiacencvaiacmna 23

Bill v. United States, 349 U.S. 81 (1955) _00.. 23

Chubet v. United States, 414 F.2d 1018 (8 Cir., 1969) .. 32

Glasser v. United States, 315 U.S. 60 (1942) 00000000... 28

Ingram v. United States, 272 F.2d 567 (4 Cir., 1959) ... 32

Rewis v. United States, 401 U.S. 808 (1971) —..0000000.... 23

Russell v. United States, 369 U.S. 749 (1962) ............ 27

Schaffer v. United States, 362 U.S. 511 (1960) ........ 34

United States v. Adcock, 558 F.2d 397 (8th Cir.,

(2 RNASE st SOREL oy ol EEO Oe eT SRA 16, 24

United States v. Addonizio, 451 F.2d 49 (3rd Cir., 1972) 18

United States v. Bass, 404 U.S. 336 (1971) 000... 23

United States v. Braasch, 505 F.2d 139 (7th Cir.,

EAR aaa GRO aR ne AEST POA ce a alee OREN rae mM Cec 16, 19

United States v. Brewster, 506 F.2d 62 (C.A.D.C., 1975 23

United States v. Brown, 540 F.2d 364 (8th Cir., 1976) 16, 17

United States v. Crawford, 581 F.2d 489 (5 Cir. 1978) 34

United States v. Crowley, 504 F.2d 992 (7th Cir., 1974) 16

United States v. Culbert, 435 U.S. 371 (1978) 0000... 20, 28

United States v. DeLuna, 308 F.2d 140 (5 Cir. 1962) ..38, 39

United States v. Donaway, 447 F.2d 940 (9 Cir., 1971) 36, 37

United States v. Foutz, 540 F.2d 733 (4 Cir., 1976) ... 37

PAGE

United States v. Gentile, 495 F.2d 626 (4 Cir., 1974) ... 33

United States v. Gougis, 374 F. 2d 758 (7 Cir., 1967) .... 32

United States v. Grabiec, 563 F.2d 313 (7 Cir., 1977) ..37, 39

United States v. Gritzer, 498 F.2d 1160 (4th Cir. 1974) 21

United States v. Hall, 536 F.2d 313 (10th Cir., 1976) ..16, 17

United States v. Harding, 563 F.2d 299 (6th Cir.,

TEED | silussnsiseesssmssenisigntnsasniniaiesnsinametadiaaaaaa 16, 17

United States v. Hathaway, 534 F.2d 386 (1st Cir.,

8 RI EMERY RLM Se Se SLIT Malet kee 16, 17

United States v. Hyde, 448 F.2d 1295 (7th Cir., 1971) 18-19

United States v. Lrali, 503 F.2d 1295 (7th Cir., 1974) .... 16

United States v. Johnson, 515 F.2d 730 (7 Cir. 1975) 35

United States v. Johnson, 478 F.2d 1129 (5 Cir. 1973) .. 34

United States v. Kelly, 349 F.2d 720 (2 Cir., 1965) ..36, 37

United States v. Kuta, 518 F.2d 947 (7th Cir., 1975) ... 18

United States v. Mardian, 546 F.2d 973 (D.C. Cir.

Sl A ENS LEM RET 36, 37

United States v. Marionneaux, 514 F.2d 1244 (5 Cir.,

TEU. sicivcessnscestcseslenisidetinmeintanics hnastennosieadieessatniaanmedaaacaniee aie 31

United States v. Mazzei, 521 F.2d 630 (3rd Cir., 1975) 18

United States v. Nettles, 570 F.2d 547 (1978) ~....0........ 33

United States v. Price, 507 F.2d 1849 (4th Cir., 1974) 16,17

United States v. Quinn, 565 F.2d 256 (7 Cir., 1966) .... 32

United States v. Reilly, 456 F.Supp. 211; Aff’d 601

oe ee CONG GR TOPE hte 16

United States v. Shelton, 573 F.2d 921 (6th Cir., 1978) 24

United States v. Sopher, 362 F.2d 523 (7th Cir., 1966) 16

PAGE

United States v. Spector, 326 F.2d 345 (7 Cir., 1963) 32

United States v. Staszeuk, 502 F.2d 875 (7th Cir.,

a RE AE CRIES Ne YEE AC SS AEN os 24, 25

United States v. Trotta, 525 F.2d 1096 (2nd Cir.,

RCN I Deca 5 ERr—~ LOT ATED ORCA On SNARE aE 16, 18

United States v. Turnipseed, 272 F.2d 106 (7 Cir., 1959) 35

United States v. Wasson, 568 F.2d 1214 (5 Cir,

RES RR Ea Selah Oe nmol Re MO NMS 36, 37

United States v. Wright, 588 F.2d 31 (2nd Cir. 1978) .. 18

Wangrow v. United States, 399 F.2d 106 (8 Cir., 1968) 31

Ward v. United States, 289 F.2d 877 (D.C. Cir., 1961) 32

Other Authorities

Fifth Amendment to United States Constitution ..21, 26, 27

Sixth Amendment to United States Constitution ....21, 26,

27, 29

Ot ia onesephceoxsmnses asec cadiaconslonason 22

Title 18 U.S.C. § 201(©) eeccccscescccccssoccscecccsssssescoscemesseeseees 22

Title 18 U.S.C. $201(£) Or () ccccescccccssssssseeeessossssesseeeee 22-23

Title 21 U.S.C. § 849(e)_ ......... A aan ae 28

ie ie oe, acer ea 22

| is 2” ae anne 15, 20, 22, 23

Titel 18 U.S.C. §1951(b) (2) cececccccssssssccsessssecseeeeee 16, 20, 22

re OE 8 Oe on ce ee 26

ie OAs tO oo 27-28

Vil

PAGE

Me Cs OO cinchictcéctaccsstacanstccnsssvaeancnsinn ees 28

ee es, OD ooo icsas aac estslabeweesnctnes 28

RN an OMI |S vswiiecicsipsaanrsadbinettunncuecteamedaiananets 27

I cantina Gatecbetemcsnnaeatil 29, 30, 32, 33, 34, 35

SNS I aalciic cin sitpsestiitis'ssecatennnoad 29, 30, 34, 35, 37, 38, 39, 40

BNI WIAD’ ~ scinsascticensconseasocsneansbannilgnandecasiacceeasandeanmunal 31, 32

EIS SUMED Diichcadciiuanisostigiliiaisotaiseendademiasbibbiaieienndia hastened 31

1 Wright Federal Practice and Procedure, § 227 at 470

SINE) cil. nicvanssansnncsscineieleoasrimpacuiase iceadeeiantubaanbischaanabiae 34

In the

Supreme Court of the United States

Octrosper TERM, 1980

No.

JOHN HEDMAN, MICHAEL JERCICH,

THOMAS KARNICK and HENRY LARSEN,

Petitioners,

VS.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

To The Honorable: The Chief Justice and Associate Jus-

tices of the Supreme Court of the United States:

Petitioners, JOHN HEDMAN, MICHAEL JERCICH,

TOM KARNICK and HENRY LARSEN, pray that a

Writ of Certiorari issue to review the opinion of the

United States Court of Appeals entered in this cause.

OFFICIAL AND UNOFFICIAL REPORTS OF THE

COURT BELOW

The Opinion of the United States Court of Appeals

for the Seventh Circuit affirming the convictions of your

Petitioners is not officially reported but is printed in the

Appendix hereto (Appendix A). The Order of said Court

denying rehearing will probably not be reported, but is

printed in the Appendix hereto (Appendix B).

GROUNDS FOR JURISDICTION

The said Opinion and judgment of the Court of Appeals

for the Seventh Circuit was filed on August 29, 1980

(Appendix A). A Petition for Rehearing, timely made,

was denied on October 30, 1980 (Appendix B). No fur-

ther orders granting extensions of time were sought, nor

entered. This Petition is filed within 60 days of the denial

of the Petition for Rehearing by the Court below. The

jurisdiction of this Court is conferred by Title 28 U.S.C.

§1254(1).

CONSTITUTIONAL AND STATUTORY PROVISIONS

AND RULES INVOLVED

Amendment 5 Constitution of the United States

Amendment 6 Constitution of the United States

Title 18 U.S.C. §201(c)

Title 18 U.S.C. §201(f) & (g)

Title 18 U.S.C. $371

Title 18 U.S.C. §872

Title 18 U.S.C. §1951

Title 18 U.S.C. $1952

Title 21 U.S.C. $849(e)

Title 26 U.S.C. $6501(e)(1)(A)

Title 26 U.S.C. $7206(a)

Rule 8(a) Federal Rules of Criminal Procedure

Rule 8(b) Federal Rules of Criminal Procedure

Rule 14 Federal Rules of Criminal Procedure

All above set forth in Appendix C appended hereto.

STATEMENT OF THE CASE

The court of first instance herein was the United States

District Court for the Northern District of Illinois, Eastern

Division, and this action was commenced by the filing of an

indictment charging violations of Title 18 U.S.C. §371 and

$1951 and Title 26 U.S.C. $7206. Cast in nineteen counts,

the petitioners were jointly charged only in Count I, which

alleged a conspiracy under Title 18 U.S.C. §371, to violate

the provisions of Title 18 U.S.C. $1951. The jurisdiction

of that Court derives from the provisions of Title 18

U.S.C. §3231.

The Court of Appeals made a thorough delineation of

the facts, except it assumed the payments made by the

dealers to Petitioners were illegal, though there was no

evidence at all as to the agreement, if any, under which

the moneys were delivered. We therefore, consider the

redundant use of the term ‘‘payoffs’’ to be inaccurate, and

have substituted ‘‘payments’’ therefor. Such portions,

and unnecessary portions (as Interstate Commerce, which

is no element of this Petition) are deleted. All deletions

are noted by asterisks for comparison, if deemed necessary.

On June 13, 1978, the Federal Grand Jury returned a

nineteen count indictment charging the Petitioners, John

ITedman, Michael Jercich, Thomas Karnick and Henry

Larsen, with various violations of federal statutes arising

from the acceptance of monies allegedly extorted by them

in their capacities as Building Inspection Supervisors as-

signed to the Construction and Technical Inspection Bureau

of the City of Chicago. Count One of the indictment

charged all four Petitioners with conspiracy to commit

extortion through the wrongful use of their official posi-

tions, in violation of 18 U.S.C. $1951. Counts Two through

Thirteen of the indictment charged the Petitioners indi-

vidually with substantive violations of Section 1951 by

the extortion of money from various building contractors

under color of official right. Counts Fourteen through

Nineteen charged Petitioners Hedman, Jercich and Larsen

with the failure to report the income received from these

* * * activities on their federal income tax returns for the

years 1973 and 1974, in violation of 26 U.S.C. $7206(1).

* * * At the conclusion of a two week jury trial, the jury

returned guilty verdicts against each Petitioner on all

counts of the indictment, with the exception that Michael

Jercich was found not guilty in Count Twelve. On De-

cember 19, 1978, Judge Bua sentenced Petitioners, Hed-

man, Jercich and Larsen each to one year in the custody

of the Attorney General, three years’ probation, and im-

posed a $5,000 fine. Thomas Karnick was sentenced to

one year of custody on a work-release program, three

years’ probation, and received a $1,000 fine.

*** The Petitioners commenced their employment with

the City of Chicago during the 1950’s as inspectors for the

Department of Buildings. In 1969 and 1970, they were

promoted to the positions of Supervisor. In those posi-

tions, the Petitioners were responsible for supervising the

inspection, by six district inspectors, of all new construc-

tion and remodeling in the geographical areas of the City

of Chicago to which they had been assigned. The Chicago

Building Code requires that anyone who undertakes any

construction work, structural repairs, additions or re-

modeling in the city, secure a building permit from the

Department of Buildings. The fee for such permits varies

with the type of construction undertaken. For example,

the permit fee for a frame garage was $24 in 1971 and

$47.50 in 1976. Once the permit is obtained, the construc-

tion may proceed. At various stages of the construction

a building inspector from the City of Chicago inspects

the project to insure compliance with the building code.

Upon completion of the construction, the inspector vali-

dates the permit.

A. Counts One through Five

These counts alleged the receipt of extortionate pay-

ments by the Petitioners from Danley Lumber Company,

an Illinois corporation whose principal business is the con-

struction of residential garages. * * *

Since its inception in 1959, Danley has constructed a

substantial number of garages in Chicago that violated the

Building Code, usually because the garages were too large

or too close to the lot line. On such occasions, Danley

would either fail to obtain a building permit or obtain one

through the submission of a false application. * * *

** * From the mid-1960’s until 1976, the task of making

payments on construction that violated the Chicago Build-

ing Code was handled by Bentley Weitzman’s father,

Harry Weitzman. When a job did not violate the building

code, Harry Weitzman would file a permit application and

pay the required fee to the City of Chicago.

A routine procedure was established at Danley for

processing non-conforming garages. When a job violated

the Building Code, the emp-oyee at Danley who processed

that job order would give Harry Weitzman a slip of paper

indicating the address of the job and a notation that a

violation existed. Weitzman would then write the name

of the area supervisor for that job on the slip, and return

the slip to the job file. At the same time, Weitzman woul

make an entry on a list he maintained of all non-conforming

jobs. When the garage was being built, the slip would be

returned to Weitzman. He aceumulated slips for several

days and then gave them to Irving Lazarus, Vice Presi-

dent of Danley. Lazarus would * * * place $25 per slip

in an envelope with the slips, and give the money and

slips to Weitzman. * * *

When Harry Weitzman received the cash and slips from

Lazarus, he would delete the job addresses from his list.

He would then write the name of the supervisors on

separate envelopes, place the appropriate amount of money

in each envelope, and personally deliver them to all four

Petitioners at either offics in City Hall or their homes.

On occasion, Weitzman would give to one supervisor au

envelope to be delivered to another supervisor.

From 1968 or 1969 until 1976, Harry Weitzman kept a

diary of these payments. At the top of some pages of the

notebook, Weitzman wrote the first name of a supervisor,

e.g., ‘‘Mike,’’ ‘‘Tom,’’ ‘‘Hank,’’ and ‘‘John.’’ Also listed

on these pages were the addresses of the non-conforming

job sites, as well as the amount, the dates, and the places

of the payments made to each supervisor for those jobs.

The diary detailed payments that were made to all four

Petitioners individually, as well as payments that were

made to one supervisor for delivery to another.

B. Counts Six through Eight

These counts related to the extortionate payments al-

legedly received by Hedman, Jercich and Larsen from the

All State Lumber Company. * * *

Like the Danley Lumber Company, All State built

garages that violated the Chicago Building Code. On such

occasions, All State would not obtain a building permit,

but would instead make a payment to the Building In-

spection Supervisor assigned to the district in which the

garage was constructed.

When All State commenced a job that violated the Build-

ing Code, either the garage superintendent or the remodel-

ing superintendent would telephone the appropriate super-

visor and give him the address of the non-conforming job

site. The All State employee would then give a slip of

paper to the assistant bookkeeper, indicating the job name,

the address, the supervisor, and the amount of money to be

paid to the supervisor. The bookkeeper would then write

the name and address of the job on a separate piece of

paper and place it, along with $25, into an envelope bear-

ing the supervisor’s name. The envelope often contained

several job slips and amounts of money ranging from $25

to $100. The supervisors would then stop by the All

State office and pick up the envelopes bearing their names.

Three of the petitioners, John Hedman, Michael Jercich,

and Henry Larsen, received payments in this fashion from

All State. On occasion, one supervisor would pick up the

envelopes addressed to another supervisor.

The money used for the payments was obtained from

the All State petty cash fund and was recorded on All

State’s books as a ‘‘permit fee.’’ Thus, each entry in the

All State accounts of $25 for a ‘‘permit’’ reflected a pay-

ment. By comparing the assignment maps of the Depart-

ment of Buildings to the address of each payment, it was

possible to approximate the amount of money paid to each

of the three supervisors. Between 1971 and 1974, approxi-

mately $11,575 was paid collectively to the supervisors by

the All State Lumber Company.

C. Counts Nine through Ten

These counts related to payments allegedly made to

petitioners Hedman and Jercich by the Ashland Building

and Improvement Company, a firm engaged in general

repair work and specializing in porch construction. * * *

On a number of occasions, Ashland would start a job

before a permit was obtained or complete a job in viola-

tion of the Building Code and fail to secure a permit.

For these jobs, Ashland would pay money to Building

Inspection Supervisors for the City of Chicago who were

in charge of inspection for the districts where the non-

conforming jobs were located. Frank Spatz, the President

of Ashland, would either telephone the approvriate supervi-

sor at his home or at City Hall, or the supervisor would

visit Ashland’s corporate offices. Spatz would inform the

supervisor of the job violation and its location. After

talking with Spatz, the supervisor would stop by Ashland’s

offices and receive the payment from Spatz, or if Spatz

was not in the office at the time, the money would be left

in an envelope for the supervisor to pick up. Payments

to the supervisors would be made either in cash or by a

check. Ashland checks were written to both John Hedman

and Michael Jercich in the amounts of $100 each. In

several instances, Michael Jercich directed that the checks

issued to him be made payable to other payees.

Spatz maintained a written record of the payments that

were owed, and after a pay ment was made he destroyed the

record. * * * A job order number was inscribed on each

check to indicate the job for which the payment had been

made, and the checks were recorded on Ashland’s books as

‘‘finder’s fees.’’ Spatz would then place the money in a

drawer in his office before paying the supervisors or would

give it to his secretary for delivery in his absence.

D. Counts Eleven and Twelve

These counts involved payments allegedly made to Peti-

tioners Hedman and Jercich by Airoom, Ine. <Airoom is a

construction company that specializes in building room

additions in Chicago and its suburbs. * * *

Airoom would sometimes begin construction in Chicago

before a building permit was obtained, or would perform

the work without ever obtaining a permit. On these oe-

easions, the construction superintendent of Airoom were

authorized to make payments to building inspectors. Bur-

ton Klein, President and owner of Airoom, testified that

he would telephone petitioner Hedman and provide him

with the name and address of the non-permit job. Hedman

would then telephone Klein to arrange a meeting at either

Airoom’s offices or at a restaurant. At these meetings,

Klein would pay Hedman in cash from his Airoom salary.

Klein paid Hedman for approximately ten jobs built by

Airoom in Chicago. The payment was usually $25 for a

job commenced without a permit and $50 for a job com-

pleted without a permit. * * *

E. Count Tirteen

This count relates to payments allegedly made to John

Hedman by Solar Construction Company. Solar builds

garages and room additions in Chicago and the surround-

ing suburbs.

Between 1972 and 1974 Solar completed approximately

sixty-five jobs in Chicago without obtaining building per-

mits. On other occasions, Solar would obtain a building

permit but construct a garage that did not conform to the

permit. In either of these cases, Robert Pareti, owner of

Solar, would telephone Hedman at City Hall or at his

home to advise him of the deficiency. In most instances,

Hedman would give his consent over the telephone and

Pareti would make a notation on the job file. Pareti would

then arrange for a Solar check payable to a fictitious

payee or to ‘‘cash’’ to be sent to Hedman’s residence.

These payments were recorded on Solar’s books as ‘‘per-

mit’’ expenses.

F. Counts Fourteen through Nineteen

These counts charged Petitioners Hedman, Jercich and

Larsen with the failure to report the payments received

from the above contractors on their federal income tax

returns for 1973 and 1974.

John Hedman filed a federal income tax return for

1973 in which he stated that his income was $16,426. In

his 1974 tax return, Hedman stated that his income was

$19,214. On both returns, Hedman listed as his sources

of income wages and mileage reimbursements from the

City of Chicago, interest income, and an income tax re-

fund from the State of Illinois. He did not report as in-

come the approximately $1,125 in payments in 1973 and

the approximately $1,575 received in 1974.

Henry Larsen stated on his 1973 and 1974 federal in-

come tax returns that his income was $18,703 and $20,-

977.63, respectively. He did not report $1,125 received as

payments in 1973 or the $800 he received in 1974.

Similarly, Michael Jercich failed to include as income

the payments he received for 1973 and 1974. His adjusted

gross income for 1973 was reported as being $18,087.72,

which did not include $1,925 received as payments. His

adjusted gross income for 1974 was $17,343.45, which did

not include $1,850 he received in payments during that

year. (App. A, pp. 2 through 10)

Of particular pertinence though not noted in the Court

of Appeals ‘‘Statement of Facts’’ is that each of the

‘‘victim’’ companies recited in the first thirteen counts

of this indictment have been indicted for bribery and con-

victed on pleas of guilty, in the same pleaded circum-

stances as are reflected in these statutory extortion charges

brought against these Petitioners (Tr. 746-749; 787; 848;

937; Defendant Jercich lxhibits 3, 4, 5, 6 and 7). Those

indictments, as well as this indictment, were all returned

by the same Special November 1975 Grand Jury.

Chere are also two instructions that were given the jury

that are essential to consideration of this Petition. With-

out detail, there is no argument made to this Court that

was not advanced to the trial court, and the Court of

Appeals in respect thereof including, as to the §1951

counts, the necessity of proving ‘‘inducement’’, and

differentiating between ‘‘extortion’’, bribery and gra-

tuity, and alternative instructions were proffered and de-

clined. In respect of the Internal Revenue Counts, and

particularly the allegations of Counts Fourteen through

Nineteen that the respective Petitioner had reported

‘‘substantially’’ less than the gross income received, an

instruction was tendered giving the only apposite defini-

tion in the Internal Revenue Code, which articulated the

meaning of ‘‘substantial omission’’, which was refused.

The complained of instructions are:

comp

he jury is further instructed that extortion un-

der color of official right means the obtaining of

money by a public official through wrongful use of

his office when the money obtained was not lawfully

due and owing to him or to the office which the public

official represented.

‘*It does not matter whether the public official in-

duces the payment to perform his duties or not to

perform his duties. Extortion under color of official

right does not require proof of specific acts by the

public officials demonstrating foree, threats, or the

use of fear so long as the victim consented because

of the office or position held by the official who ob-

tained the money.

“Tf the public official knows the motivation of the

victim focuses on the public official’s office and money

is obtained by the public official which was not law-

fully due and owing to him or the office he repre-

sented, that is sufficient to satisfy the requirements

of the law of extortion under color of official right.

‘The mere voluntary payment of money would not

constitute extortion.

‘‘Furthermore, that the transaction may also have

constituted bribery is of no consequence in consider-

ing whether extortion under color of official right was

committed.

‘‘The same transaction may constitute bribery by

the person paying the money and extortion under

color of official right by the public official who receives

it. Tr. at 1568-69.’’ (App. A. pp. 15-16, fn 4)

and

‘‘The jury is further instructed that each of the

tax counts alleges that the particular defendant re-

ceived substantial other income in addition to the

total income reported on the return. It is not neces-

sary for the government to prove the exact amount of

the additional income. It is sufficient if the govern-

ment proves beyond a reasonable doubt that the de-

fendant had income substantially in excess of the

total income he reported on his return.’’ (App. A. p.

19, fn 6).

Facts re Karnick’s Motion for Severance

Defendant Karnick’s pre-trial motion for severance

from his co-defendants for trial was denied. (Tr. 13)

During the course of the trial, the prosecution asked

Bentley Weitzman whether, ‘‘from 1959 until the mid-

1960’s did you follow a regular procedure personally with

regard to these jobs that violated the Building Code?’’

(Tr. 124) Upon Karnick’s objection that he did not be-

come a Building Code Supervisor until January, 1970,

(Tr. 124), the court received the evidence, instructing the

jury not to consider this evidence as to Karnick or Hed-

man. (Tr. 129)

KKarnick renewed his motion for severance, and, upon

denial, moved for mistrial, also denied. (Tr. 130)

Arthur W. Malina, an employee of Allstate Lumber Co.,

gave testimony regarding defendants Jercich, Larsen and

Hedman. (Tr. 381-525) Karnick moved for a severance

because the government completed its evidence with re-

spect to Danley Lumber Co. and on the conspiracy count

1. (Tr. 389-90) The court overruled the motion for sever-

ance, directing the jury not to consider the prospective

evidence against Karnick. (Tr. 396)

oA ~ »

During the testimony of another employee of Allstate

Lumber Co., one Anthony Lamantia, (Tr. 526), counsel

for Karnick indicated there would be motions for sever-

ance with respect to all future witnesses because the tes-

timony would not be applicable to Karnick. (Tr. 553, 556).

The court instructed the jury that ‘‘... all testimony you

will hear from here on end until the government closes its

ease will not relate to Mr. Karnick .. .’’ (Tr. 556)

# * *

Still other circumstances pertaining to whether Karnick

could receive a fair trial absent a severance from the co-

defendants include the following:

As the trial progressed, Karnick was disadvantaged by

being ‘‘at odds’’ with his co-defendants concerning vari-

ous ‘‘trial strategy’’ decisions, such as: The co-defendants

wanted a ‘‘no inference from failure to testify’’ instruc-

tion, which Karnick did not want, but had no choice, in

the joint trial, but to have the jury so advised. (Tr. 1346).

Other examples of situations unfair to Karnick which

simply would not have developed, had his motion for sev-

erance been allowed, are found in the conference on in-

structions. (See, e.g., Tr. 1386-87, 1389.)

Similarly, Karnick was prejudiced when the Court of

Appeals excused the government’s argument on the basis

it was ‘‘invited response’’ to defense argument (App.

28); however, it was counsel for a co-defendant, not for

Karnick, who did the inviting.

* Si x

Finally, Karnick was named in 2 of 19 counts, and only

some 167 of 1279 pages of evidentiary trial material per-

tained to Karnick.

ARGUMENT

We respectfully request this Court to issue its Writ of

Certiorari to review the judgment of the Court of Appeals

in this case on the following grounds:

1. There are conflicts among the Circuits as to whether

inducement and the initiative for the obtaining of property

must come from the public official to sustain a conviction

for “extortion”, as it is used in §1951, when that conviction

rests solely on “color of official right”.

The Court of Appeals for the Seventh Cireuit has held

in this case that:

‘*It is settled law in this Cireuit as well as others

that in a Hobbs Act presecution for extortion under

color of official right it is unnecessary to show that

the defendant induced the extortionate payment or

that the payor was entitled to the benefit obtained

from such payment. The government is merely re-

quired to prove that a public official obtained money

to which he was not entitled and which he obtained

only because of his official position.’’ (App. A, p. 17-18)

The decision also provides that when, as here, no proof

is adduced as to the conditions or agreement (if any there

were) in the passage of the property, it is a permissible

legal inference that the public official was ‘‘not entitled’’

to the money.

‘‘No testimony was elicited on either direct or

cross-examination that the money was owed to Hed-

man,' the Department of Buildings, or the City of

' “Hedman” is referred to only in a generic sense, and apparently

intended to apply to all Petitioners.

Chicago. In the absence of such evidence, together

with the fact that the money was paid only when con-

struction was started before a permit was obtained

or when no permit was obtained, the jury could have

reasonably found that the money was not lawfully due

Hedman or the City of Chicago.’* (App. A, p. 15-16)

Thus, the decision of the Seventh Circuit is a holding

that when a public official receives money, it will be factu-

ally inferred he was not entitled to it, and that he re-

ceived it only because of his official position. Aside from

endorsing an illegal factual inference, the ruling is that

whenever a public official receives money, be it gift, con-

tribution, bribery or whatever, such receipt constitutes

‘‘extortion . . . under color of official right’’ as defined

in Title 18 U.S.C. §1951(b)(2). It stands for the proposi-

tion that, no matter if it was freely given and unsolicited,

the fact of receipt of money by a public official is statutory

extortion. No case heretofore has ever stood for such a

proposition,” and the holding is in clear conflict with de-

cisions of other circuits, and rulings.

*It is important that the extortion charged here was charged

only on “color of official right,” without the statutory alternatives

of “force, violence or fear.”

While other courts have discussed the meaning of ‘‘under color

of official right,” they have affirmed convictions on the alternative

finding that “fear of economic loss” is present. United States v.

Sopher, 362 F.2d 523 (7th Cir., 1966) ; United States v. [rali, 503

F.2d 1295 (7th Cir., 1974); United States v. Crowley, 504 F.2d

992 (7th Cir., 1974); United States v. Price, 507 F.2d 1349 (4th

Cir., 1974) ; United States v. Brown, 540 F.2d 364 (8th Cir., 1976) ;

United States v. Adcock, 558 F.2d 397 (8th Cir., 1977); United

States v. Reilly, 456 F.Supp. 211; Aff’d 601 F.2d 577 (3rd Cir,

i979). Others have come to a determination that bribery and ex-

tortion are not necessarily mutually exclusive. United States v.

Braasch, 505 F.2d 139 (7th Cir., 1974); United States v. Trotta,

525 F.2d 1096 (2nd Cir., 1975); United States v. Hathaway,

534 F.2d 386 (1st Cir., 1976) ; United States v. Hall, 536 F.2d 313

(10th Cir., 1976); United States v. Harding, 563 F.2d 299 (6th

Cir., 1977).

We need only refer to the bases cited by the Seventh

Circuit as constituting ‘‘settled law... that... it is un-

necessary to show that the defendant induced the extor-

tionate payment .. .’’ (App. A., p. 18 and fn. 5) to put

the lie to that extravagant statement. Of those cited for

reliance, we start with United States v. /larding, 563 F.2d

299 (6th Cir., 1977) (where the defendant ‘‘suggested he

could assist Ms. Johnson in passing her broker’s exami-

nation by selling her a copy of the questions and answers

for $3800”’ (568 F.2d at 301); we continue with United

States v. Hathaway, 534 F.2d 386 (1st Cir., 1976) where

the Court said clearly the ‘Trial Court had correctly

charged that the incentive and the initiative for the pay-

ment must come from, or is made on the part of, the pub-

lie official, and not the voluntary payment on the part of

the so-called victim, which instruction the First Cireuit

held ‘‘clearly precluded conviction based upon passive

receipt of the money’’ (534 F.2d at p. 394). The case

implies joint inducement might suffice but the inducers

must include him who has or pretends to ‘‘official right’’.

We continue with United States v. Brown, 540 F.2d 364

(8th Cir., 1976), where defendant required his lady

friend’s apartment be financed by the contractor in ex-

change for getting on the bid list. In United States v.

Hall, 536 F.2d 318 (10th Cir., 1976), the governor of the

State of Oklahoma agreed to use his influence to sell cer-

tain notes to the Oklahoma Retirement System but ‘‘He

demanded, however, $100,000 to be divided between him

and Mooney’? (536 F.2d at p. 317); United States v. Price,

507 F.2d 1849 (4th Cir., 1974) concerned a payment ‘‘of

$12,000 in cash to Price in exchange for the latter’s assur-

ance that the motel would receive its occupancy permit,’’

which the Court characterized, even in its brief Apinion as

‘‘appellant’s corrupt offer {which} played upon his ap-

prehension [of financial injury] was certainly inferable,

if not obvious’? (507 F.2d at p. 1350). United States v.

Maeezei, 521 F.2d 630 (3rd Cir., 1975), was a case in which

the defendant informed a lessor, hopeful of obtaining the

State as a tenant that ‘‘it was the practice on all state

leases that a ten per cent of the gross amount of the

rentals would be paid to a senate finance re-election com-

mittee .. .’’ (521 F.2d at p. 641) The final case, cited by

the opinion, United States v. Trotta, 525 F.2d 1096 (2na

Cir., 1975) is a reversal of a dismissal of a Hobbs Act

indictment for insufficiency, holding ‘‘it is the use of the

power of the public office itself to procure the payments

of moneys not owed to the public official or his office that

constitutes the offense.’’ (Our emphasis)*

Not one of these cases relied on stood for the proposi-

tion that ‘‘it is unnecessary to show that the defendant

induced the extortionate payment .. .’’ Each cited case

clearly showed such inducement.

Other cases, too, make undeniable implications that de-

mand or threat by the official is necessary to bring the

transaction within contemplation of Hobbs. United States

v. Wright, 588 F.2d 31 (2nd Cir., 1978); United States v.

Addonizio, 451 F.2d 49 (3rd Cir., 1972); requiring initia-

tive to come, at least in part, from the official, and affirma-

tively precluded a passive receipt of money; United States

’ Another case relied on as authority, though not directly on this

point is United States v. Kuta, 518 F.2d 947 (7th Cir., 1975), where

the defendant, as a Chicago Alderman, agreed not to object to a

zoning variance. When the payor came to see him at his request,

he responded $1,500, when the payor suggested he owed the

Alderman “something”.

v. Hyde, 448 F.2d 815 (5th Cir., 1971), implying that some

element of coercion or intimidation must be present, even

though it may consist of a threat to exert valid official

power. It should be noted that the Braasch case (United

States v. Braasch, 505 F.2d 139 (7th Cir., 1974), upon

which this decision places principal reliance follows the

exact reasoning of Hyde stating ‘‘It matters not whether

the public official induces payment to perform his duties

or not to perform his duties, or even, as here, to perform

or not to perform acts unrelated to his duties which can

only be undertaken because of his official position.’’ (our

emphasis). Inducement by the official remains an inpera-

tive. Nonetheless, in respect thereof, the Court below

stated the issue made:

‘* . . The appellants claim it was error to refuse

their tendered instructions which in substance would

have required the government to show that the ap-

pellants were the initiators or inducers’ of the alleged

payments. . .’’ (App. A, p. 16-17)

Instead, it approved the charge to the jury that ‘‘It

does not matter whether the public official induces the

payment to perform his duties or not to perform his

duties’’ (idem)

Coupled with the fact that the Court below recognized

no evidence that the payments were in anyway induced by

petitioners, this instruction cannot be read other than that

inducement is an unnecessary element of proof, and that

any monies paid to a public official, coupled with the

payor’s being motivated, at least in part, by the official

position held, constitutes statutory exiortion. This, we

submit, is in conflict with the many cireuits above cited

and with the intent of Congress‘, or, alternatively, the

statute is unconstitutional.

2. This case demonstrates that the Federal Criminal

Statute (18 U.S.C. $1951) admits of two diverse interpreta-

tions, and its intended meaning is rendered debatable, at

least. This Court should issue its Writ of Certiorari to

review the Statute, because its Constitutionality is in doubt.

The wide divergence of interpretation of the ‘‘color of

law’’ portion of $1951, demonstrated by the equally wide

conflicts in the Circuits, can be traced directly to and from

the terms of the Statute ($1951(b)(2)), which provide:

‘‘The term ‘extortion’ means the obtaining of prop-

erty from another, with his consent induced by wrong-

ful use of actual or threatened force, violence, or fear,

or under color of official right.’’ (Title 18 U.S.C.

§$1951(b) (2))

4In 1978 this Court in United States v. Culbert, 435 U.S. 371

had occasion to cite portions of the legislative history of the Hobbs

Act. At page 379, the following appears:

“Indeed, many Congressmen praised the bill because it set

out with more precision the conduct that was being made

criminal. As Representative Hobbs noted, the words robbery

and extortion ‘have been construed a thousand times by the

courts. Everybody knows what they mean.’ 91 Cong.Rec.

11912 (1945). See also id. at 11906 (remarks of Rep.

Robinson) ; id., at 11910 (remarks of Rep. Springer) ; id., at

11914 (remarks of Rep. Russell). In the wake of the Court's

decision in Teamsters, moreaver, a paramount congressional

concern was to be clear about what conduct was prohibited :

‘We are explicit. That language is too general, and we thought

it better to make this bill explicit, and leave nothing to the

imagination of the court.’ 91 Cong.Rec. 11904 (1945) (remarks

of Rep. Hancock).

See id. at 11912 (remarks of Rep. Hobbs).”’

The conflicts arise from two possible readings of the

statute, when stripped of impertinent material:

(a) ‘‘(2) The term ‘extortion’ means the obtaining

of property from another with his consent, in-

duced . . . under color of official right.”’

-OFr-

(b) ‘‘(2) The term ‘extortion’ means the obtaining

of property from another, with his consent .. .

under color of official right.’’

Such possible diverse interpretations would and do, we

submit, render the statute impermissibly vague, and,

therefore, unconstitutional. Demonstrably, the perimeters

of the ‘‘color of law’’ portion of the statute are specula-

tive, and state public employees or officials’ are not given

fair warning of whether their activities are criminal or

not. A fair reading of the statute is that receipt of prop-

erty by them must have been induced by them. It lacks

the essential fairness required by our constitution to find

at the conclusion of trial by their peers that ‘‘it is un-

necessary to show the defendant induced the extortionate

payment’? (App. A, p. 18). On the contrary ‘‘[iJ]t is

settled that when the law is vague or highly debatable,

a defendant—actually or imputedly—lacks the requisite

intent to violate it.’* United States v. Gritzer, 498 F.2d

1160, 1162 (4th Cir., 1974).

We submit this statute is clearly shown to be capable

of at least two interpretations, and that at least two di-

verse interpretations have been applied to it among the

circuits. It thus offends the Fifth and Sixth Amendments

and is unconstitutional, and so this Court should de-

elare it.

* We know of no federal employees or officials that have been

prosecuted under the Act, though fairly included in its terms.

—

3. The present determination by the Court of Appeals

for the Seventh Circuit that any receipt of money or other

valuable by a State official or employee, without any evi-

dence of its purpose or of the agreement or arrangement

under which it was delivered, violates the “color of official

right” portion of the statute, merits this Court’s inquiry

into whether Congress could, consistent with other sub-

sisting laws, have intended such an interpretation, and this

Court, in exercise of its supervisory powers, should man-

date logical restraint in application.

In this consideration, we ask the Court to re-examine

the second permissible reading of $1951(b)(2), submitted

under point 2 of this Argument.® On that permissible

reading, prosecution is authorized against any official. It

eliminates inducement. It eliminates ‘‘color of .. . right,’’

and the decision would include classic common law extor-

tion, bribery, gratuities and contributions, and apply to

federal as well as state officials.’ However, except for

contributions, the Congress has simultaneousiy existing

statutes directed to the activities of federal officials, which

delineate and emphasize the distinctions between activi-

ties, which under the decision of the Seventh Circuit here,

have been molded into the cloak of extortion ‘‘under color

of official right,’’ and all carrying substantially lesser

penalties than § 1951. They are: Extortion, Title 15

U.S.C. §872, maximum penalty 3 years and $5,000; Brib-

ery, 18 U.S.C. §201(c), maximum penalty 15 years and 3

times the payoff or $20,000; Illegal Gratuity, 18 U.S.C.

“(b)“(2) The term ‘extortion’ means the obtaining of property

from another, with his consent . . . under color of official right.”

‘ See footnote 5 supra.

$201(f) or (g), maximum penalty 2 years and $10,000.

For distinction among the three, see United States v.

Brewster, 506 F.2d 62 (C.A.D.C., 1975). Yet the most

minor state official for any conduct similar to any of the

three is uniformly subject to a maximum penalty of 20

years and $10,000, under this permissible reading of $1951.

We submit that respect for the wisdom of Congress

should preclude this interpretation which treats an official

with such disparity, depending on which sovereign is his

employer, or through which plebiscite he secured his

office.

This Court should exercise its supervisory power to

prevent attributing such irrationality to the Congress.

4. In the face of two permissible readings of a statute,

the failure to exercise the policy of lenity conflicts with

prior decisions of this Court.

This issue is plain. One reading of a highly penal fed-

eral criminal statute requires proof of defendants’ ‘‘in-

ducement’’ of payment as an essential element, the other

does not. While the former reading seems patently more

sensible, we cannot say the latter is not grammatically

permissible.

It is in just such situations and to avoid the ultimate

rebuff of a declaration of unconstitutionality that the

policy of lenity*’ was born. There can be no clearer case

in which it should be direeted by this Court to be applied.

8 Adamo Wrecking Co. v. United States, 434 U.S. 275, 285

(1978) ; United States v. Bass, 404 U.S. 336, 348 (1971); Rewis

v. United States, 401 U.S. 808, 812 (1971); Bill v. United States,

349 U.S. 81, 83 (1955).

24+

5. The concept advanced by this case that there is no

distinction between bribery and statutory extortion under

color of official right is in conflict with the Eighth Circuit

decision in United States v. Adcock, 558 F.2d 397 (8th Cir.,

1977), and the Sixth circuit decision in United States v.

Shelton, 573 F.2d 921 (6th Cir., 1978) and corrupts the

intent of United States v. Staszcuk, 502 F.2d 875 (7th Cir.,

1974), upon which latter case it purports to rely.

Though, as emphasized before, on the proof of this case,

no one can say on what terms the money passed to peti-

tioners, it is beyond peradventure that the so-called ex-

tortees admitted to bribery under the identical cireum-

stances. If there was any evidence in this case, it was

those admissions of bribery.

The Third Circuit in United States v. Shelton, 573 F.2d

917 (6th Cir., 1978) excluded the passive acceptance of a

bribe as grounds for conviction of extortion ‘‘under color

of official right’’ (573 F.2d at p. 921). An instruction di-

rectly reproduced from that case was refused here (Pro-

posed Instruction A-3). In United States v. Adcock, 558

F.2d 379 (8th Cir., 1977), the trial court cautioned the

jury that the defendant could not be convicted for bribery,

and the Court of Appeals agreed that ‘‘Bribery . . . con-

notes a voluntary offer to obtain gain, where extortion

connotes some form of coercion. Under the indictment de-

fendant could not be convicted of bribery’’ (558 F.2d at

p. 404).° Yet here that is exactly what was invited, what

occurred, and what was condoned by the Seventh Circuit.

The jury was instructed:

‘‘Wurthermore, that the transaction may also have

constituted bribery is of no consequence in consider-

*° The distinction was tendered as an instruction (Proposed In-

structions A-5 & A-26), and refused.

ing whether extortion under color of official right was

committed.

“The same transaction may constitute bribery by

the person paying the money and extortion under

color of official right by the public official who re-

ceives it.’? (App. A, p. 17, fn 4)

Kfforts toward qualification of that unfortunate quota-

tion from United States v. Stuszcuk, 502 F.2d 875 (7th

Cir., 1974)" so as to accord with the Sixth and Highth

Circuits were repelled (‘T'r. 1361-1362).

Hiven the Braasch case is abused by this out-of-context

quotation, as is made clear by Judge Campbell’s concur-

ring opinion, which was never disavowed by the Court:

‘“‘That is not to say, however, that, as the govern-

ment contends in the instant case, there is no dis-

tinction between the acceptance of a bribe by a public

official and extortion under color of official right. For

example, assume that a public official has been paid

a sum of money to induce him to use his position and

influence to obtain a building permit on behalf of an

applicant who is clearly not entitled under the law to

such a permit. In such a case, the money which the

publie official receives is not being paid to prevent

the coercive use of his office, but rather to assist the

payor in his efforts to obtain something to which he

is not lawfully entitled. As the Court stated in United

States v. Pranno, 385 F.2d 387, 390 (7th Cir. 1967) ‘it

might be solely a bribe and not extortion if the record

showed that the issuance of the permit was illegal

..?? (502 F.2d at p. 883).

If this record shows anything, it shows such pure brib-

ery. If the Congress meant pure bribery to be the equiva.

"We recognize Stassuck has been quoted frequently but as

we pointed out (supra), in none of those cases including Staszcuk

has conviction been founded on color of official right without in-

ducement or the added charge of fear.

lent of extortion under color of official right, it could have

said so. It uses the term ‘‘bribery’’, without embarrass-

ment, as close as the next section ($1952). This Court,

together with resolving the conflict, should exercise its

supervisory power to preclude punishment for activities

that Congress has not seen fit to make crimes.

6. The Court should grant Certiorari in this case be-

cause, in respect of the charges made under the Internal

Revenue Code, the Fifth Amendment requirement that a

person shall not be called upon to answer other than to a

charge by the grand jury, and the Sixth Amendment re-

quirement that an accused be advised of the nature and

cause of the accusation against him were violated.

Three of your four Petitioners were charged (each in

two counts) with making a false statement on his income

tax return in that he, the individual petitioner, reported

taxable income in [a stated amount] whereas he ‘‘then

and there well knew and believed, his total income was

substantially in excess of that sum.’’ (Indictment Counts

xiv through xix)

The only definition of ‘‘substantial understatement’’ in

the Internal Revenue Code is found at Title 26 U.S.C.

§$ 6501 (e)(1)(A), which requires that an understatement

to be substantial must be at least 25% of the gross income

reported. The three interested Petitioners asked the trial

Court to instruct the jury of this sole Internal Revenue

Code definition. In endorsing the trial Court’s refusal to

instruct as requested, the Court of Appeals gave as a

primary basis that the statute ‘‘does not require that a

false statement on an income tax return be substantial,’’

but only that it be material (App. A, p. 20-21). Thus, it may

be concluded that so long as the proof showed the accused

had made some material misrepresentation (whether that

which the grand jury charged or not), conviction, so long

as it was within the terms of the statute—as opposed to

the term of the indictment—would be sustained and wheth-

er the proof showed the false statement consisted in a

substantial understatement of income as the grand jury

charged, was immaterial, because, under the statute, the

false statement does not necessarily have to be an under-

statement of income. It could be many things: false em-

ployment; overstatement of deductions; overstatement of

dependents; false capital bases, ad infinitum, but because

it is ad infinitum, descent to particulars is an integral

part of the charge, and failure to prove as the grand jury

charged is destructive of Fifth Amendment guarantee;

and conviction despite failure to prove as charged is viola-

tive of Sixth Amendment guarantee. The interpretation

given by the Seventh Circuit rendering the grand jury

specification as mere surplusage is inappropriate. The

many ways this statute (26 U.S.C. § 7206(a)) is capable

of violation negates the possibility of merely repeating

the words of the statute to make a valid charge, since the

statutory language fails to apprise a defendant ‘‘with rea-

sonable certainty of the nature of the accusation against

him.’’ Russell v. United States, 369 U.S. 749, 765 (1962).

Ignoring specifications as unnecessary has the same effect.

7. When the Congress has found it necessary to define

in the Internal Revenue Code what constitutes “substan-

tial omission” (25%) in the sense of civil vulnerability in

the same context as proposed in this case involving po-

tential criminal vulnerability, and has also found such

definition necessary in a criminal context also involving a

“substantial source of income” (50%), the Sixth Amend-

ment requires in its mandate that a defendant be informed

of the nature and cause of the accusation that, at least, the

lesser of the two definitions be implied in the charge.

It is obvious from the gross disparity between what

‘‘substantial’’ means in respect of income under Title 26

U.S.C. §6501 (25%), and what it means in respect of

Title 21 U.S.C. $849(e) (50%) that ‘‘substantial’’ in the

context of income is a vague, elastic term. If definition

is needed for guidance of the Courts and the Internal

Revenue Service in the civil context, it is imperative in

the criminal context, particularly when the sole definition

of ‘‘substantial’’ in the same context is defined in the

same Subtitle F of the Internal Revenue Code under which

this prosecution was brought.

In implementation of a criminal statute that is not of

itself of sufficient definiteness, (see Point 6 above), an

indictment undefined as to its terms ‘‘might well violate

the ‘first essential of due process of law’: It would forbid

‘the doing of an act so vague that [persons] of common

intelligence [would] necessarily have to guess at its mean-

ing and differ as to its implications’ [citing authority].’’

United States v. Culbert, 435 U.S. 371, 374 (1978)

In this case, taking the evidence in the light most favor-

able to the government (Glasser v. United States, 315 U.S.

60 (1942), and without the incursions made by cross-ex-

amination, the ‘‘substantial’’ understatements varied be-

tween 3.8% and an edge over 10%, but mostly in the area

of 6 and 7%. (See App. A, p. 10)

The Court below endorsed the Trial Court’s refusal to

adopt the sole definition in the same sub-title of the same

Internal Revenue Code saying merely that ‘‘appellant’s

[sic] reliance on Section 6501 (e) of the Internal Revenue

Code, which defines substantial for purposes of civil lia-

bility as a misstatement in excess of twenty-five percent

of the amount of the gross income reported on the return,

is clearly misplaced in the context of a criminal prosecu-

tion under Section 7206(1).’’ (App. A, pages 20-21)

We submit that such a holding that admits the disparity

is not sufficient to incur the least disadvantage civilly (ex-

tended statute of limitations), but approves the stamp of

felon, makes mockery of the traditional code of American

justice, and, the exercise of this Court’s supervisory power

to enforce the mandate of the Sixth Amendment that the

‘‘cause’’ of an accusation be related in understandable

terms, but also that the value of freedom and reputation

be not subordinated to the value of more modest monetary

disadvantage in that traditional code.

8. The trial court’s denial of Karnick’s motion for sev-

erance from his co-defendants for trial amounted to an

abuse of discretion under the circumstances. The situation

materialized as defendant had anticipated, that is, he could

not receive a fair jury trial joined to the co-defendants,

not only for the “usual” reasons, but also because during

trial, he constantly found himself at odds with his co-

defendants. In this case, where defendant Karnick is

named in only 2 of 19 counts, is the only defendant not

charged with tax offenses, and where his co-defendants are

charged in no less than 17 separate substantive counts—8

of which are Hobbs Act charges naming “extortees” with

which defendant Karnick is not even alleged to have been

connected—the totality of the circumstances was such that

severance was required in the interest of justice, under

F.R.Cr.P. 14.

Alternatively, joinder was improper from the outset

under F.R.Cr.P. 8, and defendnt Karnick is entitled to a

reversal, for the conspiracy count failed to encompass any

of the counts 6 through 19, none of which named or other-

wise involved him.

oo)

The Seventh Circuit’s affirmance—grounded on Karnick’s

failure to have labelled his motion for severance as one

under F.R.Cr.P. 8—misapprehends the prejudicial realities,

overlooks persuasive authority for reversal, and ignores

arguments concerning the jury’s inability to compartment-

alize its thinking and the differences, if not actual conflicts,

between the tactics of the various defendants.

Defendant Karnick’s motion for severance from his co-

defendants for trial was denied. (Tr. 13)

The applicable Federal Rules with respect to joinder

and severance, Rules 8 and 14, are set out at Appendix p.

43-44, infra. Rule 8 defines the outer limits of permissible

joinder of offenses, while Rule 14 requires severance for

trial even of offenses technically joinable under Rule §

if joinder is prejudicial.

Despite our overwhelming arguments militating in favor

of reversal on the severance question, the Seventh Circuit

has affirmed on grounds defendant Karnick failed to label

his motion for severance as having been made pursuant to

Rule 8. (App. 29-30).

““BY ANY NAME...”

The Seventh Circuit first disposes of the mandatory-

severance-due-to-misjoinder argument simply by noting

that Karnick made no motion under Rule 8 prior to trial,

thus precluding consideration of this aspect of the sever-

ance issue on review. (App. 29-30) The label on the Motion

must not be deemed dispositive, where—as here—the con-

tents of the motion, while framed under Rule 14 | Relie?

From Prejudicial Joinder—what could be more explicitly

applicable?], clearly stated facts demonstrating that join-

der was improper under Rule 8; for the Motion asserted,

inter alia, that wholly unrelated (perjury and tax) offenses

against the co-defendants were wrongly included.

In relying wholly on the label at the expense of the

realities, the reviewing court has chosen to ignore cases

to the effect that the contents, not the label, of a motion

for severance should govern. For example, in Wangrow

v. United States, 399 F.2d 106, 109-10 (8 Cir. 1968)—as at

bar—the motion for severance specified Rule 14 only, but

the supporting affidavit asserted both misjoinder and

prejudicial joinder. There, the reviewing court reached

the merits of the Rule 8 aspects of the motion, as the

panel should have done here. Similarly, in United States

v, Marionneaua, 514 F.2d 1244, 1248-49 (5 Cir. 1975), de-

fendant’s pre-trial motion for severance framed only in

terms of Rule 8(a) was held to justify and require sever-

ance on the basis of Rule 8(b), despite the ‘‘wrong’’ char-

acterization in the motion.

In short, the court chose to foreclose consideration of

the substantial argument that joinder was initially im-

proper on the inappropriate ground that Karnick misla-

beled his motion.

Severance Under Rule 8

In the case at bar, the trial court’s denial of Karnick’s

motion for severance was, under the circumstances, re-

versible error. In addition to the posture of the case just

from the face of the indictment, as the situation developed

at trial, defendant Karnick was extremely disadvantaged

by being forced jointly to trial with other defendants, who

additionally were charged with a total of 17 counts that

did not even peripherally purport to involve him.

” . .

That each of counts 2 through 13 charges an alleged vio-

lation of the Hobbs Act does not in and of itself render

the offenses charged of ‘the same or similar character”’

within Rule 8(a)."

While the decision whether to grant severance under

Rule 14 may be a matter of discretion, severance is man-

datory where joinder is improper under Rule 8:

‘‘In other words, where multiple defendants are

charged with offenses in no way connected, and are

tried together, they are prejudiced by that very fact,

and the trial judge has no discretion to deny relief.’’

United States v. Gougis, 374 F. 2d 758, 762 (7 Cir.

1967), quoting from Ingram v. United States, 272 F.2d

567, 570 (4 Cir. 1959)."*

In Chubet v. United States, 414 F. 2d 1018, 1020 (8 Cir.

1969), the reviewing court reversed one defendant’s con-

viction because ‘‘there was no allegation linking the de-

fendant with ... [certain of the counts]. The information

neither alleged that the transactions were connected nor

that they were common to a conspiracy.’’ Likewise, while

a conspiracy is charged here, that conspiracy is alleged

only to encompass payments from agents of the Danley

Lumber Co., and thus counts 6 through 19 are entirely un-

connected to Counts 1 through 5 so far as defendant Kar-

nick is concerned. While the presence of a conspiracy

count in some cases may provide the necessary nexus to

obviate reversal under Rule 8 (improper joinder), here the

specifically limited scope of the conspiracy must itself de-

" See United States v. Quinn, 365 F.2d 256, 263-64 (7 Cir. 1966),

where the Court held that two counts of banking law violations

arising out of one set of circumstances were not properly joinable

with two other counts of banking law violations under the same

statutes as the first two but arising out of a different set of cir-

cumstances.

'2 Accord, United States v. Spector, 326 F.2d 345 (7 Cir. 1963) ;

Ward v. United States, 289 F.2d 877, 878 (D.C. Cir. 1961).

fine the extent to which any of the other counts may prop-

erly be joined for trial.

In a similar factual situation, the Fifth Cireuit in

United States v. Nettles, 570 F. 2d 547 (1978), found im-

proper joinder and reversed pursuant to Rule 8, holding:

‘*There was no substantial identity of acts or partici-

pants... The involvement of the same police officers

in each count does not provide the necessary relation-

ship required by Rule 8(b).’’ 7d. at 552.

An additional holding of Nettles is persuasive here, sup-

porting the logic of our analysis of the Chubet case, supra.

The Court in Nettles continues:

‘‘Where a substantive count is within the scope of

a conspiracy charged then their joinder is proper. See

United States v, Gentile, 495 F. 2d 626, 632 (Sth Cir.

1974). That is the situation as to Counts One and

Four, Counts T'wo and Five, and Counts Three and

Six. However, there is no overlapping which would

allow each of these groups to then be joined under

Rule 8(b).’’ bid.

Here, under Rule 8, the Count 1 conspiracy charge could

allow Counts 2 through 5 to be joined for a trial of all

four defendants. And while we could concede that Kar-

nick might conceivably have a fair trial with his co-defen-

dants at a trial limited to Counts 1 through 5, joining that

group of counts to any or all of the remaining counts (6

through 19) could never be proper.

In United States v. Gentile, 495 F. 2d 626 (4 Cir. 1974),

the court reversed for improper joinder, holding:

‘*While it is true that the alleged existence of a con-

spiracy will frequently permit joinder of offenses when

it would otherwise be impermissible, . . . the conspir-

acy allegation in the instant case does not remedy the

discrepancy. For a conspiracy to properly tie sepa-

rate events together so as to permit joinder of defen-

dants, the substantive offenses alleged in the indict-

ment must fall within the scope of the conspiracy.’’

Id. at 631-32. (Emphasis added.)

In both Nettles and Gentile, the reviewing court re-

versed because the substantive offenses—with which the

co-defendants alone were charged—were not within the

scope of the conspiracy charge, and the conspiracy charge

was the only arguably connecting factor. Here, the same

result should follow, where Count 1 charged all four de-

fendants with extortion from Danley Lumber Co., Inc., but

where each of the other charges in the count 6 through 19

group names a defendant other than Karnick in a count

outside the scope of the conspiracy charge.

Rule 8 does not authorize the sweeping joinder of this

indictment.

Severance Under Rule 14

‘‘In deciding whether to grant a severance the trial

court must balance the possible prejudice to the de-

fendants against the government’s interest in judicial

economy. .... ’’ United States v. Crawford, 581 F.2d

489, 491 (5 Cir. 1978), (reversing)

‘Tf the appellate court is left with a definite and firm

conviction that a defendant may have been prejudiced

by the refusal to give him relief from joinder, it must

reverse the conviction.’’ l/nited States v. Johnson, 478

F.2d 1129, 1134, n.8 (5 Cir. 1973), quoting 1 Wright,

Federal Practice and Procedure, § 227 at 470 (1969).

‘‘Under Rule 14 the trial court’s duty to sever when

prejudice appears continues throughout the trial.’’

United States v. Crawford, supra, at 492; see Schaffer

v. United States, 362 U.S. 511 (1960).

Aside from the mandatory Rule 8 factors pointed out

above, severance should have been allowed at bar under

Rule 14. Because he was forced to go to trial with his

co-defendants upon the entire 19-count indictment, defen-

dant Karnick was deprived of his right to have the jury

impartially consider the singular question of his guilt or

innocence. ‘Che unavoidable ‘‘spill-over’’ effect’® of hav-

ing the jury listen to evidence against the co-defendants

which is not applicable to him" was increased, for the co-

defendants also were charged with having made perjuri-

ous statements on their income tax returns during two

separate tax years, while Karnick was charged only in

Counts 1 and 4 with conspiracy and violation of the Hobbs

Act.

Because only some 167 of 1279 pages of evidentiary trial

material pertained to Karnick, and because he is charged

only in 2 of 19 counts, Karnick’s situation is comparable

to and should be governed by principles stated in an un-

wavering line of cases specifically dealing with prejudice

due to joinder where there is great disparity of the volume

18 Cf. United States v. Johnson, 515 F.2d 730 (7 Cir. 1975), and

see especially (partially) dissenting opinion of Judge Swygert, td.

at 736-41.

14 Defense counsel for Karnick renewed the motion for severance

and for mistrial when evidence was admitted against co-defendants

which did not pertain to him. See, e.g., Tr. 130, 396, 553, 556.

The Seventh Circuit has recognized (and, so understanding, has

reversed, even in a bench trial) :

‘Where a number of defendants are tried together and evidence

is received as to some but not as to the others, it usually is

quite difficult for a trial judge to recall at the end of the trial

just what evidence was used as against each of the defendants.”

United States vy. Turnipseed, 272 F.2d 106, 107-08 (7 Cir.

1959).

and weight of the evidence against the moving defendant

as compared with that against the others.

Determining Prejudice

Defendant Karnick has argued in the trial and in the

reviewing court that the evidence is insufficient, as a

matter of law, to support his conviction. In the alter-

native, even if the evidence be deemed technically

‘‘sufficient,’’ clearly it was ‘‘not so overwhelming’’ that

the extreme bulk of additional evidence against his co-

defendants did not ‘‘tip the scales’? against Karnick."®

* * ow”

It is highly unlikely that Karnick was not prejudiced

hy jointly being tried with the other defendants and with

the unrelated counts. For example, even government

counsel has confounded portions of the evidence and ap-

plied it in violation of the court’s admonition, in arguing

to the reviewing court that certain testimony of Bentley

Weitzman is the basis for inferences of fact necessary to

convict defendant, although the trial court had limited

such evidence and ordered that it not be used against

defendant. (Tr. 131; G. Br. p. 28.) How, then, can the

jury be expected properly to consider the evidence against

the specific defendants, as directed by the court?

See United States v. Kelly, 349 F.2d 720, 759 (2 Cir. 1965) ;

IJnited States v. Mardian, 546 F.2d 973, 977 (D.C. Cir. 1976);

United States v. Wasson, 568 F.2d 1214, 1223 (5 Cir. 1978).

In United States vy. Donaway, 447 F.2d 940 (9 Cir. 1971), less

than 50 pages of the government’s 2,300 page case in chief per-

tained to defendant. The reviewing court agreed that severance

should have been granted, stating:

“We find it impossible to conclude on the fact here that ap-

pellant was not severly prejudiced by the evidence relevant

only to the co-defendants.” Jd. at 943.

6 See United States v. Wasson, 568 F.2d 1214, 1223 (5 Cir.

1978) (quotation reproduced at p. 38, infra).

The disparity of evidence against the various defendants

militates against a finding that the jury was able to follow

the court’s limiting instructions. In an analogous situa-

tion, one reviewing court, reversing, has remarked:

‘*... we cannot presume that the jury adhered to limit-

ing instructions and properly ‘segregate[d] [the] evi-

dence into separate intellectual boxes,’ Bruton v.

United States, 381 U.S. 123, 181... (1967) ...”

United States v. Foutz, 540 F.2d 733, 738 (4 Cir.

1976).

* * *

“GUILT BY ASSOCIATION .. .”’

The Seventh Circuit has ignored the extent of the evi-

dentiary disproportion, considering, as is evident from the

panel’s statement, that Karnick’s position was merely

‘‘that since he was charged in only two of the nineteen

counts in the indictment, he was prejudiced by the disparity

between the evidence against him and the evidence against

his co-defendants.’’ (\pp. 31) That is far from a fair state-

ment of defendant Karnick’s position as to the Rule 14 sev-

erance issue; for, in addition to the 2 versus 19 count situa-

tion, only some 167 of 1279 pages of evidentiary trial ma-

terial pertained to Karnick. Relying solely on United States

v. Grabiec, 563 F.2d 313 (7 Cir. 1977), (App. 31), the re-

viewing court ignored the factual realities at bar, and

also refused to consider the applicable holdings, con-

sidering the factual framework, in such cases as United

States v. Kelly, 349 F.2d 720 (2 Cir. 1965); United States

v. Mardian, 546 F.2d 973, 977 (D.C. Cir. 1976); United

States v. Donaway, 447 F.2d 940, 948 (9 Cir. 1971); and

United States v. Wasson, 568 F.2d 1214, 1223 (5 Cir.

1978), all reversing for failure to grant Rule 14 severance.

The mere ‘‘sufficiency’’ of the evidence, as perceived by

the reviewing court, is not adequate reason for denying

the validity of an otherwise persuasive motion for sever-

ance under Rule 14; for, as astutely noted by the Wasson

court:

‘¢Although the evidence was sufficient to support the

verdict ..., it was not so overwhelming that the

obvious guilt of Kennedy did not tip the scales against

Littrell.’’ Jd. at 1223.

So, too, at bar.

‘ANTAGONISTIC DEFENSE TACTICS ...”’

The reviewing court has ignored Karnick’s arguments:

(i) that he was prejudiced by his co-defendants’ insis-

tence on a ‘‘no inference from failure to testify’’ instruc-

tion; United States v. De Luna, 308 F.2d 140 (5 Cir.

1962); and (ii) that the government characterized certain

prejudicial argument as ‘‘invited response’’ to an argu-

ment by a co-defendant.

Indeed, the panel swallowed whole the government’s

position re invited reply, excusing the comment complained

of as ‘‘invited response,’’ while conveniently not specify-

ing which defendant did the inviting. In fact, it was coun-

sel for a co-defendant, not counsel for Karnick.’’

4s the trial progressed, defendant Karnick had the ad-

ditional and onerous disadvantage of being ‘‘at odds”’

with his co-defendants. Frequently, his co-defendants

would take a position contrary to his on many ‘‘trial

'7 See App. 28, where the court condones the prosecutor's com-

ments as “invited response” without specification as to at whose

invitation. As noted by defendant Karnick, who claimed prejudice

due to such argument, it was a co-defendant’s counsel who invited

the response, not counsel for defendant Karnick.

strategy’’ decisions. Faced with varying defense motions

and requests, the trial court more often than not sided

with the majority, and Karnick had to tolerate judicial

decisions and situations which simply would not have

arisen, had his initial motion for severance been allowed.

Tor example, the co-defendants wanted a ‘‘no inference

from failure to testify’’ instruction, and although Karnick

did not want such an instruction, he was forced to have

the jury so advised'* (Tr. 1346) Persual of the confer-

ence on instructions and of the closing arguments illus-

trates in microcosm how unfairly this scenario unfolded.

(See, z.e., Tr. 1386-7, 1389)

While this is not quite what one properly could call a

case of ‘‘antagonistie defenses’’ in the classic sense, these

repeated disadvantages, considered in the light of the ex-

treme disproportion of the evidence against Karnick as

compared with that against the co-defendants, rendered it

highly unlikely that Karnick could receive that fair trial

to which he is constitutionally entitled.

While these factors alone might not suffice to require a

Rule 14 severance, considered together with all the fore-

going, they emphasize and magnify the prejudice suffered

here by defendant Karnick, serving to remove this cause

from the rule of the sole (Grabiec)” case relied on by the

Seventh Circuit.

» * *

'* Query: Does not the giving of such an instruction over ob-

jection—at least theoretically—amount to constitutionally forbidden

comment on failure to testify, since it calls attention to defendant's

silence, if (by his objection) he is willing to waive the instruction,

which is, after all, supposed to protect the defendant?

If a defendant has a right to such an instruction, he must also

have a right to give up that right.

See United States v. DeLuna, 308 F.2d 140 (5 Cir. 1962).

See App. 31; United States v. Grabiec, 563 F.2d 313 (7 Cir

1977).

Utilizing its supervisory powers, this Court should grant

certiorari so as to clarify the applicable standards under

F.R.Cr.P. 8 & 14 for determining whether a motion for

severance should be allowed, with particular emphasis on

whether a technically correct label is essential, and what

criteria are involved where a ‘‘disparity of the evidence’’

argument is raised.

CONCLUSION

Wherefore for the above and foregoing reasons, it is

respectfully prayed that this Court issue its Writ of

Certiorari to the United States Court of Appeals for the

Seventh Circuit.

Respectfully submitted,

Epwarp J. CaLiHAN, JR.

Anna R, Lavin

53 W. Jackson Boulevard

Chicago, Lllinois, 60604

Attorneys for Petitioners,

Joun Hepman, MicHae. JERCICH

and Henry Larsen

Juuivs Lucius ECHELES

35 E. Wacker Drive

Chicago, Illinois 60601

Attorney for Petitioner,

Tuomas Karnick

APPENDIX

APPENDIX A

au the

United States Court of Appeals

Hor the Seventh Circuit

Nos. 78-2617, 78-2618, 78-2619 and 78-2654

Unirep States or AMERICA,

Plaintiff-Appellee,

Joun HepmMan, Micuagni Jercrcu, ‘’HomAS Karnick and

Henry Larsen,

Defendants-Appellants.

Appeal from the United States District Court for the

Northern District of Illinois, Kastern Division.

No. 78 CR 394—Nicholas J. Bua, Judge.

Argued September 24, 1979—Decided August 29, 1980

Before Swycert, Pe_t, and Bauer, Circuat Judges.

Bauer, Circuit Judge. Defendants-appellants in these

consolidated cases appeal from the judgments of convic-

tion entered upon the jury verdicts finding them guilty

of conspiracy to commit extortion and extortion under

color of official right in violation of the Hobbs Act. Ap-

pellants also appeal from their convictions for filing

App. 2

fraudulent tax returns in violation of the federal income

tax laws. We affirm.

I, FACTS

On June 13, 1978, the federal grand jury returned a

nineteen count indictment charging the defendants, John

Hedman, Michael Jercich, Thomas Karnick and Henry

Larsen; with various violations of federal statutes arising

from the acceptance of monies allegedly extorted by them

in their capacitics as Building Inspection Supervisors as-

signed to the Construction and Technical Inspection Bu-

reau of the City of Chicago. Count One of the indictment

charged all four defendants with conspiracy to commit

extortion through the wrongful use of their official posi-

tions, in violation of 18 U.S.C. § 1951.’ Counts Two

' The Hobbs Act provides, in pertinent part:

(a) Whoever in any way or degree obstructs, delays, or af-

fects commerce or the movement of any article or commodity

in commerce, by robbery or extortion or attempts or conspires

so to do, or commits or threatens physicial violence to any

person or property in furtherance of a plan or purpose to do

anything in violation of this section shall be fined not more

than $10,000 or imprisoned not more than twenty years, or

both.

(b) As used in this section—

x *

(2) The term “extortion” means the obtaining of property

from another, with his consent, induced by wrongful use of

actual or threatened force, violence, or fear, or under color of

official right.

(3) The term “commerce” means commerce within the Dis-

trict of Columbia, or any Territory or Possession of the United

States; all commerce between any point in a State, Territory.

Possession, or the District of Columbia and any point outside

thereof; all commerce between points within the same State

through any place outside such State; and all other commerce

over which the United States has jurisdiction.

18 U.S.C. §§ 1951 (a)-(b)(2), (3).

App. 3

through Thirteen of the indictment charged the defen-

dants individually with substantive violations of Section

1951 by the extortion of money from various building

contractors under color of official right. Counts Fourteen

through Nineteen charged defendants Hedman, Jercich

and Larsen with the failure to report the income received

from these extortionate activities on their federal income

tax returns for the years 1973 and 1974, in violation of

26 U.S.C. § 7206(1).

All four defendants were tried jointly before a jury

with the Honorable Nicholas J. Bua presiding. On No-

vember 15, 1978, at the conclusion of a two week trial, the

jury returned guilty verdicts against each defendant on

all counts of the indictment, with the exception that

Michael Jercich was found not guilty in Count Twelve.

On December 19, 1978, Judge Bua sentenced defendants

Hedman, Jercich and Larsen each to one year in the cus-

tody of the Attorney General, three years’ probation, and

imposed a $5,000 fine. Thomas Karnick was sentenced to

one year of custody on a work-release program, three

years’ probation, and received a $1,000 fine.

In view of the numerous claims of error asserted on

appeal, and because many of the contentions raised con-

cern the quality and sufficiency of the evidence, a sum-

mary recitation of the evidence adduced at trial is war-

ranted. Other pertinent factual material necessary to an

understanding of our resolution of these claims is appro-

priately set forth in the discussion that follows.

The evidence at trial showed that the defendants com-

menced their employment with the City of Chicago dur-

ing the 1950’s as inspectors for the Department of Build-

ings. In 1969 and 1970, they were promoted to the posi-

tions of Supervisor. In those positions, the defendants

were responsible for supervising the inspection, by six

App. 4

district inspectors, of all new construction and remodeling

in the geographical areas of the City of Chicago to which

they had been assigned. The Chicago Building Code re-

quires that anyone who undertakes any construction work,

structural repairs, additions or remodeling in the city,

secure a building permit from the Department of Build-

ings. The fee for such permits varies with the type of

construction undertaken. For example, the permit fee for

a frame garage was $24 in 1971 and $47.50 in 1976. Once

the permit is obtained, the construction may proceed. At

various stages of the construction a building inspector

from the City of Chicago inspects the project to insure

compliance with the building code. Upon completion of

the construction, the inspector validates the permit.

A. Counts One through Five

These counts alleged the receipt of extortionate pay-

ments by the defendants from the Danley Lumber Com-

pany, an Illinois corporation whose principal business is

the construction of residential garages. In the course of

its business, Danley annually purchases approximately

$1,000,000 in building materials from manufacturers out-

side the State of Illinois.

Since its inception in 1959, Danley has constructed a

substantial number of garages in Chicago that violated

the Building Code, usually because the garages were too

large or too close to the lot line. On such occasions, Dan-

ley would either fail to obtain a building permit or obtain

one through the submission of a false application. For

these jobs, Danley would make illegal payoffs to the de-

fendants.

Between 1959 and the mid-1960’s, Bentley Weitzman,

the President of Danley, would pay $25 to the building

inspector for the district in which the non-conforming

App. 5

garage was being erected. The money for these payoffs

was obtained from the receipts for construction work that

was performed but not recorded on Danley’s books. Weitz-

man testified that these receipts were also not reported

on Danley’s tax returns. From the mid-1960’s until 1976,

the task of making payoffs on construction that violated

the Chicago Building Code was handled by Bentley Weitz-

man’s father, Harry Weitzman. When a job did not vio-

late the building code, Harry Weitzman would file a per-

mit application and pay the required fee to the City of

Chicago.

A routine procedure was established at Danley for

processing non-conforming garages. When a job violated

the Building Code, the employee at Danley who processed

that job order would give Harry Weitzman a slip of paper

indicating the address of the job and a notation that a

violation existed. Weitzman would then write’ the name

of the area supervisor for that job on the slip, and- return

the slip to the job file. At the same time, Weitzman would

make an‘entry on a list he maintained of all non-conform-

ing jobs. When the garage was being built, the slip would

be returned to Weitzman. He accumulated slips for sev-

eral days and then gave them to Irving Lazarus, Vice

President of Danley. Lazarus would obtain cash from a

walk-in safe located in Danley’s offices, place $25 per slip

in an envelope with the slips, and give the money and

slips to Weitzman. Bentley Weitzman testified that, on

occasion, he also provided the cash to his father.

When Harry Weitzman received the cash and slips from

Lazarus, he would delete the job addresses from his list.

He would then write the name of the supervisors on sepa-

rate envelopes, place the appropriate amount of money in

each envelope, and personally deliver them to all four de-

fendants at either their offices in City Hall or their homes.

On occasion, Weitzman would give to one supervisor an

envelope to be delivered to another supervisor.

App. 6

From 1968 or 1969 until 1976, Harry Weitzman kept

a diary of these payoffs. At the top of each page of the

notebook, Weitzman wrote the first name of a supervisor,

e.g., ‘‘Mike,’’ ‘‘Tom,’’ ‘‘Hank,’’ and ‘‘John.’’ Also listed

on these pages were the addresses of the nonconforming

job sites, as well as the amounts, the dates, and the places

of the payments made to each supervisor for those jobs.

The diary detailed payments that were made to all four

defendants individually, as well as payments that were

made to one supervisoy for delivery to another.

B. Counts Sia through Evght

These counts related to the extortionate payments al-

legedly received by Hedman, Jercich and Larsen from

the All State Lumber Company. All State is an Illinois

corporation engaged in the construction of garages and

obtains building materials from manufacturers and sup-

pliers located outside of [llinois.

Like the Danley Lumber Company, All State built ga-

rages that violated the Chicago Building Code. On such

occasions, All State would not obtain a building permit,

but would instead make a payotf to the Building Inspec-

tion Supervisor assigned to the district in which the garage

was constructed.

When All-State commenced a job that violated the

Building Code, either the garage superintendent or the

remodeling superintendent would telephone the appropri-

ate supervisor and give him the address of the non-con-

forming job site. The All State employee would then give

a slip of paper to the assistant bookkeeper, indicating the

job name, the address, the supervisor, and the amount of

money to be paid to the supervisor. The bookeeper would

then write the name and address of the job on a separate

-»

App. 7

piece of paper and place it, along with $25, into an enve-

lope bearing the supervisor's name. The envelope often

contained several job slips and amounts of money ranging

from $25 to $100. The supervisors would then stop by the

All State office and pick up the envelopes bearing their

names. Three of the defendants, John Hedman, Michael

Jereich, and Henry Larsen, received payoffs in this fa-

shior from All State. On occasion, one supervisor would

pie’ the envelopes addressed to another supervisor.

‘

'.he money used for the payoffs was obtained from the

All State petty cash fund and was recorded on All State’s

books as a ‘‘permit fee.’’ Thus, each entry in the All

State accounts of $25 for a ‘‘permit’’ reflected a payoff.

By comparing the assignment maps of the Department of

Buildings to the address of each payoff, it was possible

to approximate the amount of money paid to each of the

three supervisors. Between 1971 and 1974, approximately

$11,575 was paid collectively to the supervisors by the All

State Lumber Company.

(. Counts Nine and Ten

These counts related to payoffs allegedly made to de-

fendants Hedman and Jercich by the Ashland Building

and Improvement Company, a firm engaged in general

repair work and specializing in porch construction. Ash-

land purchased building materials and supplies from Lee

Lumber, which acquired these materials from out of state

manufacturers.

On a number of occasions, Ashland would start a job

before a permit was obtained or complete a job in viola-

tion of the Building Code and fail to secure a permit.

For these jobs, Ashland would pay money to Building

Inspection Supervisors for the City of Chicago who were

in charge of inspection for the districts where the non-

App. 8

conforming jobs were located. Frank Spatz, the President

of Ashland, would either telephone the appropriate super-

visor at his home or at City Hall, or the supervisor would

visit Ashland’s corporate offices. Spatz would inform the

supervisor of the job violation and its location. After

talking with Spatz, the supervisor would stop by .\shland’s

offices and receive the payoff from Spatz, or if Spatz was

not in the office at the time, the money would be left in an

envelope for the supervisor to pick up. Payments to the

supervisors would be made either in cash or by a check.

Ashland checks were written to both John Hedman and

Michael Jercich in the amounts of $100 each. In several

instances, Michael Jercich directed that the checks issued

to him be made payable to other payees.

Spatz maintained a written record of the payoffs that

were owed, and after a payment was made he destroyed

the record. The source of the funds for the payotfs was

Spatz’s personal salary and expense account at .\shland.

When a payoff was to be made, Spatz would withdraw

the amount to be paid in cash from an envelope kept in

a safe at Ashland’s offices or direct his secretary to pre-

pare a check in the appropriate amount. .\ job order num-

ber was inscribed on each check to indicate the job for

which the payment had been made, and the checks were

recorded on Ashland’s books as ‘‘finder’s fees.’* Spatz

would then place the money in a drawer in his office be-

fore paying the supervisors or would give it to his seere-

tary for delivery in his absence.

D. Counts Eleven and Twelve

These counts involved payotls allegedly made to defen

dants Hedman and Jercich by Airoom, Inc. Airoom is a

construction company that specializes in building room

additions in Chicago and its suburbs. Airoom purchased

EE ——EO

App. 9

lumber for its construction projects from Rubenstein

Lumber, which in turn purchased all of its lumber from

suppliers outside of Illinois.

Airoom would sometimes begin construction in Chicago

before a building permit was obtained, or would perform

the work without ever obtaining a permit. On these occa-

sions, the construction superintendents of Airoom were

authorized to make payoffs to building inspectors. Burton

Klein, President and owner of Airoom, testified that he

would telephone defendant Hedman and provide him with

the name and address of the non-permit job. Hedman

would then telephone Klein to arrange a meeting at either

Airoom’s offices or at a restaurant. At these meetings,

Klein would pay Hedman in eash from his Airoom salary.

Klein paid Hedman for approximately ten jobs built by

Airoom in Chicago. The payment was usually $25 for a

job commenced without a permit and $50 for a job com-

pleted without a permit. Finally, Klein testified that he

met with defendants Hedman and Jercich in late 1975,

and that Hedman advised him to destroy any records

that might relate to jobs for which payoffs had been made.

EK. Count Thirteen

This count relates to payoffs allegedly made to John

Hedman by Solar Construction Company. Solar, which

builds garages and room additions in Chicago and the

surrounding suburbs, acquired its building materials from

the Maher Lumber and Hardware Company of Llinois.

Maher in turn purchased all of its building materials and

supplies from businesses located outside of Illinois.

Between 1972 and 1974 Solar completed approximately

sixty-five jobs in Chicago without obtaining building per-

mits. On other occasions, Solar would obtain a building

permit but construct a garage that did not conform to

App. 10

the permit. In either of these cases, Robert Pareti, owner

of Solar, would telephone Hedman at City Hall or at his

home to advise him of the deficiency. In most instances,

Hedman would give his consent over the telephone and

Pareti would make a notation on the job file. Pareti would

then arrange for a Solar check payable to a fictitious

payee or to ‘‘cash’’ to be sent to Hedman’s residence.

These payoffs were recorded on Solar’s books as ‘‘permit”’

expenses.

F. Counts Fourteen through Nineteen

These counts charged defendants Hedman, Jereich and

Larsen with the failure to report the payoffs received

from the above contractors on their federal income tax

returns for 1973 and 1974.

John Hedman filed a federal income tax return for

1973 in which he stated that his income was $16,426. In

his 1974 tax return, Hedman stated that his income was

$19,214. On both returns, Hedman listed as his sources

of income wages and mileage reimbursements from the

City of Chicago, interest income, and an income tax re-

fund from the State of Illinois. He did not report as in-

come the approximately $1,125 in payoffs he received in

1973 and the approximately $1,575 received in 1974.

Henry Larsen stated on his 1975 and 1974 federal in-

come tax returns that his income was $18,703 and ¥$20,-

977.63, respectively. He did not report $1,125 received

as payoffs in 1973 or the $800 he received in 1974.

Similarly, Michael Jercich failed to include as income

the payoffs he received for 1973 and 1974. His adjusted

gross income for 1973 was reported as being $18,087.72,

which did not include $1,925 received as payoffs. Ilis ad-

justed gross income for 1974 was $17,343.45, which did

not include $1,850 he received in payoffs during that year.

App. 11

II. SUFFICIENCY OF THE EVIDENCE

In their first principal argument on appeal, appellants

contend the evidence adduced at trial was insufficient to

sustain the jury’s verdicts. We conclude that the evidence

cited above, viewed in the light most favorable to the

government, clearly supports the jury’s findings. United

States v. Guevara, 598 F.2d 1094, 1096 (7th Cir. 1979).

A. Conspiracy

Appellants argue the evidence was insufficient to per-

mit a finding that they were guilty of conspiracy to com-

mit extortion, as charged in Count One of the indictment.

A conspiracy consists of a combination or confederation

between two or more persons formed for the purpose of

committing, by their joint efforts, a criminal act. An agree-

ment is the primary element of a conspiracy, but a formal

agreement need not be demonstrated. United States v.

Varelli, 407 F.2d 735 (7th Cir. 1969). Although proof of

knowledge on the part of the participant in the conspiracy

is also an essential element of the offense, circumstantial

evidence is sufficient to connect an alleged co-conspirator.

with the conspiracy. l/nited States v. Page, 580 F.2d 916

(7th Cir. 1978).

Applying these principles to the evidence of conspiracy

adduced at trial, it is clear that the government presented

sufficient evidence to sustain the jury’s verdict. Count One

related to extortionate payments made by Danley Lumber

Company to all four defendants. The evidence showed

that from approximately 1968 until 1973, the defendants

were the only area supervisors in the New Construction

Bureau of the Department of Buildings. During that pe-

riod of time, each defendant received illegal payoffs from

Danley in the same amount, in the same manner, for the

———————— SL —_—— LL cr a

App. 12

same reason, and from the same individual, Ilarry Weitz-

man. It was further established that on over 80 occasions,

one of the defendants would accept illegal payments on

behalf of the other defendants. All four defendants there-

fore acted as conduits for the others. Moreover, on such

oceasions, the conduit would also receive an illegal pay-

ment thereby negating the hypothesis that the conduit did

not know the contents of the envelopes destined for others.

Weitzman’s payment procedure involved advising a defen-

dant of the address to which a payment related and the

address for which the defendant would be paid in the

future. Thus, from Weitzman's testimony that, with one

exception, no defendant ever complained of not receiving

a payment, the jury could infer that each conduit payment

was completed.

Accordingly, the evidence established the elements of

conspiracy to commit extortion under ‘‘color of official

right’? by showing a joint venture to obtain illegal pay-

ments through the use of the defendants’ official positions.

B. Interstate Commerce

Appellants also contend that the evidence failed to

prove the requisite effect on interstate commerce under

the Hobbs Act. The government relied on the ‘depletion

of assets’’ theory to establish that element at trial. Under

this theory, commerce is affected when ‘tan enterprise,

which either is actively engaged in interstate commerce

or customarily purchases items in interstate commerce,

has its assets depleted through extortion, thereby curtail-

ing the victim's potential as a purchaser of such goods.”

United States v. Elders, 569 F.2d 1020, 1025 (7th Cir.

1978). We conclude that the evidence was sufficient to

establish the jurisdictional nexus between the extortionate

conduct and interstate commerce.

App. 13

Appellants first argue that because the net long-term

effect of the extortionate payments was to increase the

assets of the companies involved, there was no depletion

of assets shown. This argument ignores the fact that

Hobbs Act convictions sustained under this theory in-

volved payments to obtain a financial benefit or to avoid

a financial loss. See, e.g., United States v. Craig, 573 F.2d

513 (7th Cir. 1978); United States v. DeMet, 486 F.2d 816

(7th Cir. 1973), cert. denied, 416 US. 969 (1974). The

focus of the ‘‘depletion of assets’’ theory is the payment

itself. [f that money is derived from a source which other-

wise could be devoted to the purchase of interstate ma-

terials, the law presumes a potential effect on commerce

sufficient to satisfy that element of the offense. United

States v. Elders, supra at 1024.

Appellants further argue that the depletion of assets

theory was not proved by the government’s evidence. We

disagree. The evidence showed that each of the companies

which made payments to the defendants purchased build-

ing materials which were manufactured outside of Illinois.

Danley Lumber Company purchased approximately one

million dollars worth of various building materials, in-

cluding lumber, garage doors and siding, each year. Simi-

larly, All State Lumber Company purchased thousands of

dollars worth of various building materials from manu-

facturers outside of Illinois. Ashland Building and Supply

Company acquired lumber, doors and windows from Lee

Lumber, which acquired these materials from suppliers

outside of Lllinois. Rubenstein Lumber supplied Airoom,

Ine. with building materials which were not manufactured

in Illinois. Finally, the evidence showed that Solar Con-

struction Company acquired certain of its building ma-

terials from the Maher Lumber and Hardware Company,

whose suppliers were also located outside of Illinois dur-

ing the time period alleged in the indictment.

App. 14

Evidence was also presented by the government which

showed that the extortionate payments were made either

directly or indirectly with company funds which could

otherwise have been used to purchase interstate building

materials. Danley Lumber Company made payments to

all four defendants. Bentley Weitzman, the President of

Danley, testified that the monies paid to the defendants

on the occasions that he provided payoff money were

from corporate funds obtained from Danley’s unreported

gross receipts. All of the payoffs charged in the indict-

ment were made by his father, Harry Weitzman, who

testified that most of the payoff monies were given to

him by Irving Lazarus, the Vice President of Danley.

The evidence showed that the funds Lazarus provided

Harry Weitzman came from a walk-in safe located at

Danley’s corporate offices. The fact that the money was

kept in Danley’s safe, together with the testimony of

Bentley Weitzman that whenever he provided payoff

money it was from corporate funds, was sufficient for

the jury to infer that the money taken from the safe was

also Danley’s money.’

2 Appellant Karnick argues in his reply brief that the evidence

failed to show that the payments he allegedly received were from

Danley’s corporate funds because the trial court specifically in-

structed the jury not to consider the testimony of Bentley Weitz-

man as evidence in the case against Karnick. Tr. at 131. However,

Betty Jan Mack, who was employed as the office manager and

secretary for Danley, testified that between 1972 and 1975 she

observed Irving Lazarus remove cash from the walk-in safe, place

the cash in an envelope, and give it to Harry Weitzman approxi-

inately once a week. Thus, independent of Bentley Weitzman’s tes-

timony, this evidence was sufficient to enable the jury to conclude

that the monies taken from the safe by Lazarus were corporate

finds used for business purposes.

App. 15

The evidence as to the source of funds used by the

other companies showed that All State Lumber Com-

pany’s assistant bookkeeper, Marci Pugno, would use

money taken from All State’s petty cash fund to make

payoffs to Hedman, Jercich and Larsen. Payments from

Ashland Building and Improvement Company were made

either by Ashland checks or with cash taken from Ash-

land’s safe and charged to the personal salary and ex-

pense account of Frank Spatz, the sole owner of Ashland.

Airoom, Inc. payments to the defendants were made in

cash by its President and owner, Burton Klein, from the

salary he received from Airoom. Solar Construction Com-

pany’s payments were made by checks drawn against

Solar’s account, and these payments were recorded in

Solar’s cash disbursement journals and job ledgers.

Thus, from the evidence indicating that each construc-

tion company purchased building materials manufactured

outside of Illinois and the evidence indicating that the

money used for the extortionate payments came either

directly or indirectly from the assets of these companies,

the jury properly could have concluded that commerce had

been affected under the depletion of assets theory because

there was a ‘‘realistic probability’? that these monies

would have been used to purchase materials that were

part of interstate commerce. l/nited States v. Staszcuk,

517 F.2d 53, 60 (7th Cir.) (en banc), cert. denied, 423 U.S.

837 (1975).

C. Ezatortion

Finally, the appellants contend the government’s proof

of extortion was defective because the evidence failed to

show that the monies received by appellant Hedman were

monies that were ‘‘not due them’’ as alleged in the indict-

ment. Burton Klein, president and sole shareholder of

App. 16

Airoom, Ine. testified that $25 would be paid to Hedman

on jobs that were commenced without a permit and $50

would be paid on jobs that were completed without a

permit. No testimony was elicited on either direct or

cross-examination that the money was owed to Hedman,

the Department of Buildings, or the City of Chicago. In

the absence of such evidence, together with the fact that

the money was paid only when construction was started

before a permit was obtained or when no permit was ob-

tained, the jury could have reasonably found that the

money was not lawfully due Hedman or the City of Chi-

cago.

Appellants urge a similar contention with regard to

the monies paid to Hedman by Solar Construction Com-

pany. The evidence showed that Robert Pareti, the owner

of Solar, paid Hedman $25 when a job was to be done

without a permit. Absent testimony or other evidence to

the contrary, the jury was entitled to conclude that the

money was not lawfully owed to Hedman, the Department

of Buildings, or the City of Chicago.

We also find no merit in the contention that extortion

was not shown regarding the All State Lumber Company

because its owner, Frank Spatz, was ‘‘happy’’ to make

the payments. As this Court observed in United States v.

DeMet, 486 F.2d 816 (7th Cir. 1973), cert. denied, 416 U.S.

969 (1974): ‘‘The fact that relations between the victims

and the extorters were often corial is not inconsistent with

extortion.’’ 7d. at 820 (citation omitted).

We therefore conclude that the evidence adduced at

trial, viewed in the light most favorable to the govern-

ment, was sufficient to establish each element of each

count of the indictment beyond a reasonable doubt.

App. 17

Ill. JURY INSTRUCTIONS

In their second principal argument on appeal, the ap-

pellants contend that the trial court erred in certain of

its instructions to the jury. We find the arguments ad-

vanced in support of this contention to be without merit.

A. Color of Official Right

Appellants Hedman, Jercich and Larsen argue that the

jury was improperly instructed on the elements of extor-

tion ‘‘under color of official right.’’* Specifically, the ap-

pellants claim that it was error to refuse their tendered

instructions which in substance would have required the

government to show that the appellants were the ‘‘initia-

tors’’ or ‘‘inducers’’ of the alleged payments and that

the payors were not seeking that to which they were not

entitled.‘ Absent these elements, the appellants contend

that bribery rather than extortion was established and

* Appellant Karnick raises an analogous argument that the evi-

dence adduced at trial was insufficient to sustain his conviction

under the Hobbs Act because the government failed to establish

those same elements which the defendants were unable to present

to the jury through their tendered and refused instructions.

‘ The trial court instructed the jury as follows:

The jury is further instructed that extortion under color of

official right means the obtaining of money by a public official

through wrongful use of his office when the money obtained

was not lawfully due and owing to him or to the office which

the public official represented.

It does not matter whether the public official induces the

payment to perform his duties or not to perform his duties.

Extortion under color of official right does not require proof of

specific acts by the public officials demonstrating force, threats,

or the use of fear so long as the victim consented because of

the office or position held by the official who obtained _the

(footnote continued)

oS,"

App. 18

that accordingly, the government failed to prove a viola-

tion of the Hobbs Act.

It is settled law in this Circuit as well as others’ that

in a Hobbs Act prosecution for extortion under color of

official right it is unnecessary to show that the defendant

induced the extortionate payment or that the payor was

entitled to the benefit obtained from such payment. The

government is merely required to prove that a public offi-

cial obtained money to which he was not entitled and

which he obtained only because of his official position.

As this Court stated in United States v. Braasch, 505 F.2d

139 (7th Cir. 1974):

(footnote continued)

money.

If the public official knows the motivation of the victim

focuses on the public official's office and money is obtained by

the public official which was not lawfully due and owing to

him or the office he represented, that is sufficient to satisfy

the requirements of the law of extortion under color of official

right.

The mere voluntary payment of money would not constitute

extortion.

Furthermore, that the transaction may also have constituted

bribery is of no consequence in considering whether extortion

under color of official right was committed.

The same transaction may constitute bribery by the person

paying the money and extertion under color of official right

by the public official who receives it.

Tr. at 1568-69.

>See United States v. Harding, 563 F.2d 299, 305, 307 (6th

Cir. 1977); United States v. Hathaway, 534 F.2d 386, 393 (lst

Cir. 1976); United States v. Brown, 540 F.2d 364, 372 (8th Cir.

1976) ; United States v. Hali, 536 F.2d 313, 321 (10th Cir. 1976) ;

United States v. Price, 507 F.2d 1349, 1350 (4th Cir. 1974) (per

curiam); United States v. Mazzei, 521 F.2d 639, 643 (3d Cir.

1975) ; United States v. Trotta, 525 F.2d 1096, 1098-1099 (2d Cir.

1975).

App. 19

Appellants, however, overlook the fact that the evi-

dence shows that the conspirators used the power and

authority vested in them by reason of their office to

obtain money not due them or due the office. The use

of office to obtain payments is the crux of the statu-

tory requirement of ‘‘under color of official right’’,

and appellants’ wrongful use of official power was

obviously the basis of this extortion. See United States

v. Stasecuk, 502 F.2d 875 (7th Cir. 1974). It matters

not whether the public official induces payments to

perform his duties or not to perform his duties, or

even, as here, to perform or not to perform acts un-

related to his duties which can only be undertaken

because of his official position. So long as the motiva-

tion for the payment focuses on the recipient’s office,

the conduct falls within the ambit of 18 U.S.C. § 1951.

That such conduct may also constitute ‘‘classice bri-

bery’’ is not a relevant consideration.

Id. at 148. See United States v. Kuta, 518 F.2d 947, 950

(7th Cir.), cert. denied, 423 U.S. 1014 (1975); United

States v. Crowley, 504 F.2d 992, 995 (7th Cir. 1974);

United States v. Gill, 490 F.2d 233 (7th Cir. 1973).

Since the instruction given by the court in this case

complied with this standard, we find no error.

B. Interstate Commerce

Appellants next argue that the trial court improperly

instructed the jury on the element of the effect on inter-

state commerce required under the Hobbs Act. The ap-

pellants contend, and their instructions rejected by the

court stated, that the government was required to prove

an adverse effect on commérce. Neither the literal lan-

guage of the statute nor the case law supports this con-

tention.

App. 20

It has been held that the Hobbs Act prohibits interfer-

ence with commerce ‘‘in any way or degree,’’ United

States v. Stirone, 361 U.S. 212 (1960), and that it ‘‘should

be given an expansive interpretation to cover a wide range

of extortionate activity.’’ United States v. Elders, 569

F.2d 1020, 1025 (7th Cir. 1978). Thus, this Court has

found the commerce element to be satisfied where the

actual impact on commerce is de minimis, United States

v. Crowley, supra, or where, in the absence of proof of

an actual impact, there is a realistic probability that the

extortionate transaction will have some effect on inter-

state commerce. United States v. Blakey, 607 F.2d 779, 783

(7th Cir. 1979). Moreover, evidence establishing a posi-

tive or beneficial impact on commerce has been held to

be sufficient to sustain federal jurisdiction under the

Hobbs Act. United States v. Staszcuk, supra at 878;

United States v. Kuta, supra at 950-951. Accordingly, the

appellants were not entitled to an instruction requiring

the jury to find that the extortionate conduct charged in

the indictment constituted an adverse effect on interstate

commerce.

©. Tax Evasion

Finally, the appellants argue that the trial court im-

properly instructed the jury on the law concerning the

income tax counts charged in the indictment. We find no

error.

The indictment alleged that appellants Hedman, Jercich

and Larsen made materially false statements on their

federal income tax returns for 1973 and 1974 by sub-

stantially understating their incomes for those tax years,

in violation of 26 U.S.C. $ 7206(1). The appellants of-

App. 21

fered an instruction which defined the term ‘‘substantial’’

as meaning a misstatement of gross income in excess of

twenty-five percent of the amount of gross income re-

ported on the tax return. The trial court refused the

instruction on the ground thai the question of what con-

stitutes a subsi nutial misstatement is a question of fact

for the jury to decide.®

Section 7206(1) does not require that a false statement

on an income tax return be substantial; it merely requires

“ The trial court instructed the jury as follows:

To convict a defendant, the government must prove each

of the following three elements beyond a reasonable doubt:

1. the willful making and subscribing of a return filed

with the Internal Revenue Service that was incorrect as

to a material matter.

2. that the return contained a written declaration that

it was made under the penalty of perjury; and

3. that the defendant did not believe the return to be

true and correct as to the material matter charged in

the indictment.

The jury is further instructed that each of the tax counts

alleges that the particular defendant received substantial other

income in addition to the total income reported on the return.

It is not necessary for the government to prove the exact amount

of the additional income. It is sufficient if the government

proves beyond a reasonable doubt that the defendant had income

substantially in excess of the total income he reported on his

return.

The false statement alleged in each of the tax counts is that

the total income reported on the return involved did not con-

tain substantial other income purportedly received by the

particular defendant. The Court instructs you that a state-

ment of total income on a tax return is material as a matter

of law.

Tr. at 1572-1573.

App. 22

that the misstatement be material.’ This Court has pre-

viously held that false statements relating to gross income,

irrespective of the amount, constitute a material mis-

statement in violation of Section 7206(1). United States

v. Clavey, 578 F.2d 1219 (7th Cir. 1978) (en banc) (adopt-

ing by reference the panel opinion at 565 F.2d 111 (7th

Cir. 1977) on this point); see also United States v.

Di Varco, 484 F.2d 670, 673 (7th Cir. 1973), cert. denied,

415 U.S. 916 (1974). Moreover, appellant’s reliance on

Section 6501(e) of the Internal Revenue Code, which de-

fines substantial for purposes of civil liability as a mis-

statement in excess of twenty-five percent of the amount

of the gross income reported on the return, is clearly mis-

placed in the context of a criminal prosecution under

Section 7206(1). We therefore conclude that the trial

court properly instructed the jury with respect to the tax

counts alleged in the indictment.

IV. FAIR TRIAL ISSUES

Appellants next contend that they were denied a fair

trial, citing numerous trial errors relating to the admis-

sibility of certain evidence and prosecutorial misconduct.

Appellants also challenge their convictions on certain

counts of the indictment as time-barred by the statute

of limitations. We consider these contentions, and facts

relevant therto, seriatim.

7 Section 7206(1) provides, in pertinent part:

Fraud and false statements

Any person who—

(1) Declaration under penalties of perjury. — Willfully

makes and subscribes any return, statement, or other docu-

ment, which contains or is verified by a written declaration that

it is under the penalties of perjury, and which he does not

believe to be true and correct as to every material matter: ... .

App. 23

A. Admissibility of Diary

In presenting its evidence related to the counts in-

volving the Danley Lumber Company, the government

offered into evidence a diary kept by Harry Weitzman,

the Danley employee responsible for making payoffs to

(hicago Building Inspection Supervisors. Over the vig-

orous objections of the appellants, the trial court ad-

mitted the diary as a business record under Rule 803(6)

of the Federal Rules of Evidence.* Appellants have

renewed their objection on appeal.* We conclude that the

*Rule 803(6) of the Federal Rules of Evidence provides:

Records Of Any Regularly Conducted Activity: A memoran-

dum, report, record, or data compilation, in any form, of acts,

events, conditions, opinions, or diagnoses, made at or near the

time by, or from information transmitted by, a person with

knowledge, if kept in the course of a regularly conducted busi-

ness activity, and if it was the regular practice of that business

activity to make the memorandum, report, record, or data

compilation, ail as shown by the testimony of the custodian or

other qualified witness, unless the source of information or the

method or circumstances of preparation indicate lack of trust-

worthiness. The term “business” as used in this paragraph

includes business, institution, association, profession, occupation,

and calling of every kind, whether or not conducted for profit.

® Subsequent to the submission of briefs and oral argument in this

case, the appellants filed with the Court a “Motion To Remand

To The Trial Court For Further Proceedings” on the ground that

they had received information concerning an Internal Revenue Ser-

vice investigation into ‘‘certain improper statements made by Special

Agent Wayne Buback,” which purported to impugn the integrity

of the diary. The government, in response to his motion, filed

with the Court a sealed copy of the Report of the Investigation

conducted by the Internal Revenue Service. Upon an in camera

examination of the Report, we conclude that no information con-

tained therein need be produced pursuant to Brady v. Maryland,

373 U.S. 88 (1963). Accordingly. the motion is denied.

App. 24

trial court did not abuse its discretion in admitting the

diary into evidence.

Harry Weitzman testified that after several years of

making payoffs on behalf of Danley to Building Inspection

Supervisors, he began recording these payoffs in a small

notebook. The notebook contained an entry for every

payoff he had made from 1968 or 1969 until 1976. An

entry would be recorded in the office after a payment

had been made. Harry Weitzman kept the diary in his

desk at work and did not make the diary available to

other employees at Danley. Weitzman further testified

that the reason for maintaining the diary was to »rovide

documentation if Irving Lazarus, the Vice President of

Danley, ever demanded an accounting of the payments

made to the supervisors. Despite objections by defense

counsel that the diary was inadmissible under Rule 803(6)

because it was not used or relied on by other Danley

employees, nor required to be kept by Weitzman, and

contained inaccuracies, Judge Bua admitted the diary on

the basis of the foundation testimony, stating:

THe Court: I have heard enough. Mr. Newman, I

think the key here in deciding this matter is whether

the books record a regularly conducted business ac-

tivity as opposed to some personal matter that the

serivener or the one who keeps the record is record-

ing, and while it is a close case, I think it comes within

the purview of 803(6).

The court takes the position that really this goes—

all of your arguments of the defense go, good argu-

ments, go to the weight rather than to the admis-

sibility, and the diary may be introduced into the

record pursuant to the provisions of 803(6) of the

Federal Rules of Evidence.

Tr. at 281-282.

App. 25

We agree with the district court that the diary was

admissible. In that connection, our decision in United

States v. McPartlin, 595 F.2d 1321 (7th Cir. 1979), is es-

pecially pertinent. In McPartlin, the government sought

to admit into evidence desk calendar-appointment diaries

authored by and containing records of the daily business

activities of a witness. The diaries were kept strictly for

the use of the witness and the entries therein were re-

corded at or near the time of the activity. The defen-

dants in McPartlin objected to the admissibility of the

diaries as business records because the entries were not

made in sequence and because the diaries were relied on

only by the witness. We upheld the admissibility of the

diaries under Rule 803(6) on the grounds that they were

records kept as part of a business activity and the en-

iries were made with regularity at or near the time of

the described event, and that verification by persons other

than the one making the entry was unnecessary to es-

tablish verification. Moreover, we noted that since the

witness had to rely on the entries made, there would be

little reason for him to distort or falsify the entries.

Finally, we observed that the degree of reliability neces-

sary for the admission of diaries under the business

record exception to the hearsay rule was greatly reduced

because the declarant testified and was available for

cross-examinotion. McPartlin, supra at 1347-1351.

The ratio decidendi of McPartlin is equally applicable

to the contested admissibility of the diary in this case.

Harry Weitzman testified that he kept the diary as part

of a business activity. The entries were recorded with

regularity at or near the date of the payoffs. Since

Weitzman believed that he would be required to account

to Lazarus for the payments, it was unlikely that he

would have made false entries. Similarly, the fact that

App. 26

Weitzman was not told to keep the diary and did not

make it available to others at Danley does not affect its

admissibility under Rule 803(6). Finally, in this case, as

in McPartlin, that the diaries recorded illicit business

dealings is of no consequence; the illegal nature of those

activities were nevertheless part of the normal business

of Danley. McPartlin, supra at 1349.

B. Admissibility of Immunity Testimony

Appellants also challenge the admissibility of testimony

elicited by the government on direct examinations of

Bentley Weitzman, Harry Weitzman and Betty Mack,

employees of the Danley Lumber Company, concerning

the fact that they had been granted immunity. Appel-

lants objected at trial that this testimony was inadmis-

sible because it was used to enhance the credibility of

these witnesses rather than to impeach it.

Rule 607 of the Federal Rules of Evidence provides

that ‘‘[t]he credibility of a witness may be attacked by

any party including the party calling him.’’ The govern-

ment introduced the challenged testimony for purposes

of impeachment because it anticipated that defense coun-

sel would cross-examine the witnesses on the issue of

immunity. This Court prevoiusly endorsed such a pro-

cedure in United States v. Craig, 573 F.2d 513 (7th Cir.

1978), wherein we observed:

Defendants further argue that questions and an-

swers concerning the immunized witness’ understand-

ing of the terms of immunization convey to the jury

the impression that the prosecutor is in a position to

personally know whether or not a witness is truthful,

and that consequently, the jury is given the appear-

ance of a witness whose veracity is vouched for by

the government.

App. 27

We find nothing improper about the question of the

witness’ understanding of the terms of the immunity

order in this case. There was no insinuation by the

prosecutor, direct or otherwise, that the government

possessed knowledge to the exclusion of the jury on

the issue of the immunized witness’ veracity. Cf.

TTnited States v. Creamer, 555 F.2d 612 (7th Cir.

1977). Further, we believe that the jury’s function

of assessing credibility and weighing testimony is

aided by evidence of an immunized witness’ under-

standing of the terms under which he or she is tes-

tifying. Indeed, such questions by the prosecution

frequently provide a convenient opening for more

exploration of a fertile area on cross-examination.

537 F.2d at 519. We are aware of no persuasive authori-

ty to the contrary. The testimony concerning immunity

in this case fails to reflect an implication that the govern-

ment possessed knowledge to the exclusion of the jury

on the issue of the immunized witnesses’ veracity. More-

over, the trial court instructed the jury that the credibility

of the immunized witnesses was susceptible to special

scrutiny. Tr. at 1557. Accordingly, we find no impropriety

in the admission of this testimony into evidence.

(. Prosecutorial Misconduct

Appellants next argue that they were deprived of a

fair trial on the basis of prosecutorial misconduct during

the government’s closing arguments. Specifically, the ap-

pellants object to statements of the prosecutor during

rebuttal argument that the ‘‘victims’’ in this case were

the citizens of Chicago because the city had been denied

revenues by the appellants’ extortionate activities. This

comment was engendered by defense counsel’s assertion

during closing argument that the government’s proof failed

to establish that the Danley Lumber Company and others

App. 28

were victims, as charged in the indictment, because these

companies profited from the alleged extortionate acti-

vities of the defendants. Since the indictment did not

allege the existence of any ‘‘victim,’’ the prosecutor’s re-

buttal argument clearly constituted invited response. It

is well settled that where defense counsel makes state-

ments in closing argument that invite the government

to respond, the prosecutor may, on rebuttal, enter into

areas that would otherwise constitute improper argu-

ment. Malone v. United States, 94 F.2d 281, 288 (7th Cir.),

cert. denied, 304 U.S. 562 (1938); United States v. Lawler,

413 F.2d 622, 628-629 (7th Cir. 1969), cert. denied, 396

U.S. 1046 (1970). Moreover, the trial court exercised its

discretion by limiting the scope of the argument and the

prosecutor promptly complied with the limitations imposed

by the court. The trial court also instructed the jury

that closing arguments did not constitute evidence. These

actions served to minimize any prejudice claimed by the

appellants to have resulted from the government’s re-

butal argument. See United States v. Alpern, 564 F.2d

755, 760 (7th Cir. 1977).

D. Defective Indictment

Appellants also contend they were denied a fair trial

because Counts One through Thirteen improperly charged

the appellants with offenses that were time-barred by

the five year statute of limitations prescribed in 18 U.S.C.

§ 3282. The government concedes that each of these

counts alleged an offense commencing on a date outside

the statute of limitations, but asserts that the indictment

was not defective because each count also alleged an

offense continuing until a date after June 13, 1973, five

years prior to the date of the return of the indictment.

App. 29

An indictment under the Hobbs Act alleging a single,

continuous plan of extortion with multiple payments be-

gun outside the statute of limitations, but continuing to

a date within the statute was upheld in United States v.

Provenzano, 334 F.2d 678 (3d Cir.), cert. denied, 379 U.S.

947 (1964). The evidence adduced at trial in this case

showed that the appellants engaged in a single, continu-

ous plan of extortion envisioning multiple payments over

several years from each named company. These pay-

ments began in October 1968 and continued through May

1976, nearly three years after the statute of limitations

date. Furthermore, the jury was specifically instructed

that the defendants could not be convicted for any of-

fense committed prior to June 13, 1973. We therefore

find no impropriety in the charges alleged in the indictment.

V. SEVERANCE AND SENTENCING

Appellant Karnick raises two further issues for review.

First, he contends that his joinder with the other defen-

dants named in the indictment was improper from the

outset under Rule 8 of the Federal Rules of Criminal

Procedure. Alternatively, Karnick asserts that his mo-

tions for severance pursuant to Rule 14 of the Federal

Rules of Criminal Procedure were improperly denied by

the trial court. Finally, Karnick challenges the sentence

he received on the ground that the district court’s de-

cision constituted an abuse of its discretion.

A. Jowder and Severance

Rule 8 of the Federal Rules of Criminal Procedure

provides for the joinder of offenses and defendants in ap-

propriate cases. Improper joinder under Rule 8 requires

mandatory severance. United States v. Spector, 326 F.2d

345 (7th Cir. 1963). However, a defendant must present

App. 30

a motion to sever based on misjoinder in order for the

trial court to address itself to the issue. See Fed.R.Cr.P.

12(f). If the defendant fails to challenge joinder pursuant

to Rule 8 prior to trial, he waives his right to raise mis-

joinder on appeal. United States v. Papadakis, 510 F.2d

287, 299-300 (2d Cir.), cert. denied, 421 U.S. 950 (1975).

Since in this case neither Karnick nor any of his co-

defendants contested joinder under Rule 8, we deem the

question waived for purposes of this appeal.

Appellant Karnick did file a pretrial motion, subse-

quently renewed at trial, for severance under Rule 14 of

the Federal Rules of Criminal Procedure.’”® He now con-

tends that the trial court erred in denying these motions.

We find no error.

It is settled that a decision to grant or deny a sever-

ance under Rule 14 is discretionary and subject to reversal

only upon a showing of clear abuse of that discretion.

Umted States v. Papia, 560 F.2d 827, 840 (7th Cir. 1977).

Our previous decisions have also emphasized that the

question of whether a joint trial infringes upon the de-

fendant’s right to a fair trial depends on ‘‘whether it is

within the jury’s capacity, given the complexity of the

case, to follow admonitory instructions and to keep sepa-

rate, collate and appraise the evidence relevant only to

Rule 14 of the Federal Rules of Criminal Procedure provides,

in pertinent part:

Relief From Prejudicial Joinder

If it appears that a defendant or the government is prejudiced

by a joinder of offenses or of defendants in an indictment or

information or by such joinder for trial together, the court

may order an election or separate trials of counts, grant a

severance of defendants or provide whatever other relief jus-

tice requires... .

App. 31

each defendant.’’ United States v. Kahn, 381 F.2d 824,

839 (7th Cir. 1967). See also United States v. Cervantes,

466 F.2d 736, 739 (7th Cir.), cert. denied, 409 U.S. 886

(1972).

Karnick claims that since he was charged in only two

of the nineteen counts in the indictment, he was prejudiced

by the disparity between the evidence against him and the

evidence against his co-defendants. We rejected a similar

argument in United States v. Grabiec, 563 F.2d 313 (7th

Cir. 1977), in which we held:

Although the evidence of culpability was clearly pro-

portionately greater against [co-defendant] Wall than

Grabiec, we have pointed out earlier that there was

sufficient evidence for a jury to have convicted Gra-

biec. Also, we have emphasized that the jury was

repeatedly instructed to consider evidence regarding

other transactions only as it applied to Wall. Under

these circumstances, the denials of Grabiec’s requests

for severance were not errors.

963 F.2d at 319.

The considerations found controlling in Grabiec are

equally applicable to this case. As stated earlier, there

was sufficient evidence to support the jury’s verdicts

against Karnick. Furthermore, the jury was repeatedly

instructed to consider evidence introduced on the other

counts only against the defendants charged in those counts.

Finally, the jury’s verdict of acquittal for appellant

Jercich on Count Twelve of the indiétment reflects its

adherence to those admonitory instructions.

B. Sentencing

Karnick also appeals from the sentence imposed by

the district court on the grounds that the court abused

App. 32

its discretion in unduly emphasizing the deterrent effect

upon others of the appellant’s incarceration.

The sentencing function has traditionally been con-

sidered to be within the exclusive province of the trial

court, and the exercise of that discretion ‘‘will not be dis-

turbed on appeal except on a plain showing of gross

abuse.’’ United States v. Willard, 445 F.2d 814, 816 (7th

Cir. 1971) (citation omitted).

An examination of the trial court’s remarks at sentenc-

ing reveals no abuse of the court’s discretionary role.

The court indicated that in arriving at sentences he had

weighed three factors: (1) the possibility of rehabilitation ;

(2) the societal interest in retribution; and (3) the deter-

rence of others. These factors were endorsed by the

Supreme Court in Williams v. New York, 337 U.S. 241

(1949).

Consideration of these factors with respect to the de-

fendants led the court to conclude that it favored ‘‘rela-

tively stiff sentences.’’ Since the defendants were con-

victed of ‘‘white collar’’ crimes, Judge Bua stated that

he was not concerned with rehabilitation in the usual

sense, although he did note ‘‘the failure of these defen-

dants to acknowledge guilt or display any remorse what-

ever.’’ As to the societal interest, the court regarded

the crime of extortion to be one of the most serious

prosecuted in the federal courts and further observed

that acts of extortion teach the public that ‘‘corruption,

greed and lawlessness’’ are accepted behavior in govern-

ment. Finally, Judge Bua expressed his view that the

conviction and sentencing of such criminals would serve

the salutary purpose of deterrence. It is within this con-

text that the court made the ‘‘message to City Hall’’

App. 83

statement which appellant assails as an abdication of the

court’s mandatory discretionary role.”

We find this objection devoid of merit. The court con-

sidered the fact that the defendants may have been in-

fluenced by an environment in which corruption seemed

prevalent and acceptable to be a mitigating circumstance.

The court therefore indicated that it would not impose

a harsh sentence, but that future defendants should be

on notice as to the court’s attitude and should not expect

similar light sentences. Viewing the discretionary sen-

tencing process in light of the reasons articulated by

Judge Bua for imposing a sentence of one year under a

work-release program and a $1,000 fine, when the statutory

maximum permitted a sentence of 20 years imprisonment

and/or a $10,000 fine, it cannot be said that the court

committed a gross abuse of its discretion.

VI. REMAINING ISSUES

We have carefully considered the arguments advanced

in support of the appellants’ other assignments of error

on appeal, and in view of the record, find them to be

equally without merit. For the foregoing reasons, the

judgments appealed from are affirmed and the Clerk of

this Court is directed to enter judgment accordingly.

AFFIRMED.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

The court stated:

It is a part of my duty in sentencing these men to send a

message to their fellow workers that all city workers know

that justice is swift and sure in the Federal Court, and those

who are convicted will be sentenced to jail.

Tr. of Dec. 19, 1978, at 16.

App. 34

APPENDIX B

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

October 30, 1980

Before

Hon. Lurner M. Swycerr, Circuit Judge

Hon. Witpur F. Pet, Jr., Circuit Judge

Hon. Wrui1amM J. Bauer, Circuit Judge

Nos. 78-2617, 78-2618, 78-2619 & 78-2654

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

vs.

JOHN HEDMAN, MICHAEL JERCICH, THOMAS

KARNICK and HENRY LARSEN,

Defendants-Appellants.

On Petition for Rehearing and Suggestion for

Rehearing En Bane.

ORDER

On consideration of the petition for rehearing and sug-

gestion for rehearing en banc filed in the above-entitled

cause by the Defendants-Appellants, John Hedman,

Michael Jercich, Thomas Karnick and Henry Larsen, no

judge in active service has requested a vote thereon, and

all of the judges on the original panel have voted to deny

a rehearing. Accordingly,

App. 35

IT IS ORDERED that the aforesaid petition for re-

hearing be, and the same is hereby, DENIED.*

* During the pendency of the petition for rehearing, defendants-

appellants filed a motion to reconsider en banc the denial of the

motion for remand and a supplement to that motion. The defendants-

appellants’ original motion to remand was denied in this Court’s

slip opinion of this appeal, decided August 29, 1980. Slip op. at

21. n.9. The panel has reviewed the subsequent motion and sup-

plement filed by defendants-appellants and has determined to deny

tne motion and reaffirm the original decision on this matter con-

tained in the slip opinion, without however precluding renewed con-

sideration of this issue in post-conviction proceedings. We note

also that no judge in active service has requested a vote to recon-

sider this panel’s denial of defendants-appellants’ original motion

to remand.

App. 36

APPENDIX C

Constitution and Statutory Provisions

and Rules Involved

Amendment V, Constitution

No person shall be held to answer for a capital, or other-

wise infamous crime, unless on a presentment or indict-

ment of a Grand Jury, except in cases arising in the land

or naval forces, or in the Militia, when in actual service

in time of War or public danger; nor shall any person

be subject for the same offense to be twice put in jeopardy

of life or limb; nor shall be compelled in any criminal

case to be a witness against himself, nor be deprived of

life, liberty, or property, without due process of law; nor

shall private property be taken for public use, without

just compensation.

Amendment VI, Constitution

In all criminal prosecutions, the accused shall enjoy the

right to a speedy and public trial, by an impartial jury

of the State and district wherein the crime shall have been

committed, which district shall have been previously as-

certained by law, and to be informed of the nature and

cause of the accusation; to be confronted with the wit-

nesses against him; to have conpulsory process for ob-

taining witnesses in his favor, and to have the Assis-

tance of Counsel for his defence.

Title 18 U.S.C. § 201(c)

to be a public official, directly or indirectly, corruptly asks,

demands, exacts, solicits, seeks, accepts, receives, or agrees

App. 37

{o receive anything of value for himself or for any other

person or entity, in return for:

(1) being influenced in his performance of any

official act; or

(2) being influenced to commit or aid in commit-

ting, or to collude in, or allow, any fraud, or make

opportunity for the commission of any fraud, on the

United States; or

(3) being induced to do or omit to do any act in

violation of his official duty; or

* + a

Shall be fined not more than $20,000 or three times the

monetary equivalent of the thing of value, whichever is

greater, or imprisoned for not more than fifteen years,

or both, and may be disqualified from holding any office

of honor, trust, or profit under the United States.

Title 18 U.8.C. § 201(f) and (g)

(f{) Whoever, otherwise than as provided by law for

the proper discharge of official duty, directly or indirectly

gives, offers, or promises anything of value to any public

official, former public official, or person selected to be a

public official, for or because of any official act performed

or to be performed by such public official, former public

official, or person selected to be a public official; or

(g) Whoever, being a public official, former public

official, or person selected to be a public official, otherwise

than as provided by law for the proper discharge of

official duty, directly or indirectly asks, demands, exacts,

solicits, seeks, accepts, receives, or agrees to receive any-

thing of value for himself for or because of any official

act performed or to be performed by him; or

* a. *

App. 38

Shall be fined not more than $10,000 or imprisoned for

not more than two years, or both.

Title 18 U.S.C. § 371

If two or more persons conspire either to commit any

offense against the United States, or to defraud the

United States, or any agency thereof in any manner or

for any purpose, and one or more of such persons do any

act to effect the object of the conspiracy, each shall be

fined not more than $10,000 or imprisoned not more than

five years, or both.

If, however, the offense, the commisison of which is

the object of the conspiracy, is a misdemeanor only, the

punishment for such conspiracy shall not exceed the

maximum punishment provided for such misdemeanor.

June 25, 1948, c. 645, 62 Stat. 701.

Title 18 U.S.C. § 872

Whoever, being an officer, or employee of the United

States or any department or agency thereof, or represent-

ing himself to be or assuming to act as such, under color

or pretense of office or employment commits or attempts

an act of extortion, shall be fined not more than $5,000 or

imprisoned not more than three years, or both; but if

the amount so extorted or demanded does not exceed $100,

he shall be fined not more than $500 or imprisoned not

more than one year, or both.

Title 18 U.8.C. § 1951

(a) Whoever in any way or degree obstructs, delays,

or affects commerce or the movement of any article or

commodity in commerce, by robbery or extortion or at-

tempts or conspires so to do, or commits or threatens

App. 39

physical violence to any person or property in further-

ance of a plan or purpose to do anything in violation of

this section shall be fined not more than $10,000 or im-

prisoned not more than twenty years, or both.

(b) As used in this section—

(1) The term ‘‘robbery’’ means the unlawful

taking or obtaining of personal property from the

person or in the presence of another, against his will,

by means of actual or threatened force, or violence,

or fear of injury, immediate or future, to his person

or property, or property in his custody or possession,

or the person or property of a relative or member of

his family or of anyone in his company at the time of

the taking or obtaining.

(2) The term ‘‘extortion’’ means the obtaining of

property from another, with his consent, induced by

wrongful use of actual or threatened force, violence,

or fear, or under color of official right.

(3) The term ‘‘commerce’’ means commerce within

the District of Columbia, or any Territory or Pos-

session of the United States; all commerce between

any point in a State, Territory, Possession, or the

District of Columbia and any point outside thereof;

all commerce between points within the same State

through any place outside such State; and all other

commerce over which the United States has juris-

diction.

modify or affect section 17 of Title 15, sections 52, 101-115,

151-166 of Title 29 or sections 151-188 of Title 45.

App. 40

Title 18 U.S.C. § 1952

(a) Whoever travels in interstate or foreign commerce

or uses any facility in interstate or foreign commerce,

including the mail, with intent to—

(1) distribute the proceeds of any unlawful ac-

tivity ; or

(2) commit any crime of violence to further any

unlawful activity; or

(3) otherwise promote, manage, establish, carry

on, or facilitate the promotion, management, es-

tablishment, or carrying on, of any unlawful activity,

and thereafter performs or attempts to perform any of

the acts specified in subparagraphs (1), (2), and (3),

shall be fined not more than $10,000 or imprisoned for

not more than five years, or both.

(b) As used in this section ‘‘unlawful activity’’ means

(1) any business enterprise involving gambling, liquor on

which the Federal excise tax has not been paid, narcotics

or controlled substances (as defined in section 102(6) of

the Controlled Substances Act), or prostitution offenses

in violation of the laws of the State in which they are

committed or of the United States, or (2) extortion, brib-

ery, or arson in violation of the laws of the State in which

committed or of the United States.

volving liquor shall be conducted under the supervision

of the Secretary of the Treasury.

Title 21 U.S.C. § 849(e)

(e) A defendant is a special drug offender for pur-

poses of this section if—

(1) the defendant has previously been convicted

in courts of the United States or a State or any politi-

App. 41

cal subdivision thereof for two or more offenses in-

volving dealing in controlled substances, committed

on oceasions different from one another and different

from such felonious violation, and punishable in such

courts by death or imprisonment in excess of one year,

for one or more of such convictions the defendant has

been imprisoned prior to the commission of such

felonious violation, and less than five years have

elapsed between the commission of such felonious vio-

lation and either the defendant’s release, or parole or

otherwise from imprisonment for one such conviction

or his commission of the last such previous offense or

another offense involving dealing in controlled sub-

stances and punishable by death or imprisonment in

excess of one year under applicable laws of the United

States or a State or any political subdivision thereof ;

(2) the defendant committed such felonious viola-

tion as part of a pattern of dealing in controlled sub-

stances which was criminal under applicable laws of

any jurisdiction, which constituted a _ substantial

source of his income, and in which he manifested

special skill or expertise; or

(3) such felonious violation was, or the defendant

committed such felonious violation in furtherance of,

a conspiracy with three or more other persons to

engage in a pattern of dealing in controlled substances

which was criminal under applicable laws of any

jurisdiction, and the defendant did, or agreed that

he would initiate, organize, plan, finance, direct, man-

age, or supervise all or part of such conspiracy or

dealing, or give or receive a bribe or use force in

connection with such dealing.

App. 42

A conviction shown on direct or collateral review or at the

hearing to be invalid or for which the defendant has been

pardoned on the ground of innocence shall be disregarded

for purposes of paragraph (1) of this subsection. In

support of findings under paragraph (2) of this sub-

section, it may be shown that the defendant has had in his

own name or under his control income or property not

explained as derived from a source other than such dealing.

For purposes of paragraph (2) of this subsection, a sub-

stantial source of income means a source of income which

for any period of one year or more exceeds the min-

imum wage, determined on the basis of a forty-hour week

and fifty-week year, without reference to exceptions, un-

der section 206(a)(1) of Title 29 for an employee engaged

in commerce or in the production of goods for commerce,

and which for the same period exceeds fifty percent of the

defendant’s declared adjusted gross income under section

62 of Title 26. For purposes of paragraph (2) of this sub-

section, special skill or expertise in such dealing includes

unusual knowledge, judgment or ability, including manual

dexterity, facilitating the initiation, organization, planning,

financing, direction, management, supervision, execution

or concealment of such dealing, the enlistment of accom-

plices in such dealing, the escape from detection or appre-

hension for such dealing, or the disposition of the fruits

or proceeds of such dealing. For purposes of paragraphs

(2) and (3) of this subsection, such dealing forms a pat-

tern if it embraches criminal acts that have the same or

similar purposes, results, participants, victims, or methods

of commission, or otherwise are interrelated by distinguish-

ing characteristics and are not isolated events.

App. 43

Title 26 U.S.C. § 6501(e) (1) (A)

(e) Substantial omisison of items.—Except as other-

wise provided in subsection (¢c)—

(1) Income taxes.—In the case of any tax imposed

by subtitle A—

(A) General rule.—If the taxpayer omits from

gross income an amount properly includible there-

in which is in excess of 25 percent of the amount

of gross income stated in the return, the tax may

be assesed, or a proceeding in court for the col-

lection of such tax may be begun without assess-

ment, at any time within 6 years after the re-

turn was filed.

Title 26 U.S.C. § 7206(1)

Any person who—

(1) Declaration under penalties of perjury.—Will-

fully makes and subscribes any return, statement, or

other document, which contains or is verified by a

written declaration that it is made under the penalties

of perjury, and which he does not believe to be true

and correct as to every material matter;

* * *

shall be guilty of a felony and, upon conviction thereof,

shall be fined not more than $5,000, or imprisoned not

more than 3 years, or both, together with the costs of

prosecution.

Rule 8(a) Federal Rules of Criminal Procedure

Joinder of Offenses. Two or more offenses may be

charged in the same indictment or information in a separate

count for each offense if the offenses charged, whether

App. 44

felonies or misdemeanors or both, are of the same or

similar character or are based on the same act or trans-

action or on two or more acts or transactions connected

together or constituting parts of a common scheme or

plan.

Rule 8(b) Federal Rules of Criminal Procedure

Joinder of Defendants. Two or more defendants may

be charged in the same indictment or information if they

are alleged to have participated in the same act or trans-

action or in the same series of acts or transactions con-

stituting an offense or offenses. Such defendants may be

charged in one or more counts together or separately and

all of the defendants need not be charged in each count.

Rule 14 Federal Rules of Criminal Procedure

If it appears that a defendant or the government is

prejudiced by a joinder of offenses or of defendants in

an indictment or information or by such joinder for trial

together, the court may order an election or separate

trials of counts, grant a severance of defendants or

provide whatever other relief justice requires.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.