Petition — Starnes v. United States

tice Supreme Court, U.S.

Nn ( i ki LED

Ue UY

MAY 27 1981

No.

ze GIEVAS,

In the

Suprene Court of the United States

Octoser Term, 1980

CLIFFORD ROLAND,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

EDWARD M. GENSON

JEFFREY B. STEINBACK

134 North LaSalle #300

Chicago, Illinois 60602

(312) 726-9015

Attorneys for Petitioner

Of Counsel:

WILLIAM H. STEVENS

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

QUESTIONS PRESENTED

1. Whether the Court of Appeals erred in concluding

that there was sufficient evidence of intent to defraud to

sustain Petitioner’s convictions under 18 U.S.C. 1962(d)

and 1952(a).

2. Whether the Court of Appeals improperly extended

the racketeer influenced and corrupt organizations act in

contravention of well recognized rules of statutory inter-

pretation, established precedent and principles of double

jeopardy, in concluding that the evidence supported the

conclusion that Petitioner conspired to participate in the

affairs of Tri-No Enterprises, Inc. through a pattern of

racketeering activity.

INDEX

PAGE

Questions Presented .......sccsscsiscssscessesasapasassshessemoenseienssacen i

Opinion Bebow | ....0:0cs:csossrsecsesssesesscechequnemesetiaisidinatsinipaaniaes 1

SUPIITROUIE - ccchiccinoraresvohnemniiedi 7 2

Constitutional Provisions and Statutes Involved ........ 2

Statement Of te OMB nacccsicssasceensnsariocseemnantsbensotamnineain 4

Reasons for Granting the Writ:

1. The Court of Appeals erred in concluding

that there was sufficient evidence of intent to de-

fraud to sustain Petitioner’s convictions under 18

U.S.C. 1962(d) and 1952(a) ...0.......ssccccccessccecececserere 6

2. The Court of Appeals improperly extended

the racketeer influenced and corrupt organizations

act in contravention of well recognized rules of

statutory interpretation, established precedent and

principles of double jeopardy, in concluding that

the evidence supported the conclusion that Peti-

tioner conspired to participate in the affairs of

Tri-No Enterprises, Inc. through a pattern of

racketeering QOUVEEG ....cccccssmnsescntenscainiecscvessiciscnnamibveia 9

Conclusion ...... = snusesiinneaanteliiesiianespiieiaiaalte 13

Appendices :

A Order of the District Court for the Southern

District of Illinois dated February 15, 1980 ....App. 1

B Opinion of the United States Court of Appeals

for the Seventh Circuit dated March 20, 1981 ..App. 9

C Order denying Petition for Rehearing with

en bane suggestion dated April 21, 1981 ....... App. 24

iv

AUTHORITIES CITED

Cases

PAGE

Huddleston v. United States, 415 U.S. 814 (1974) ........ 11

North Carolina v. Pearce, 395 U.S. 711 (1969) ................ 10

People v. Berland, 74 Ill.2d 286, 385 N.K.2d 649 (1978) 5

People v. McAleer, 34 Ill.App.3d 821, 341 N.E.2d 72

(1st Dist, 1975) .ecccecsssssssese PO A ee

Simpson v. United States, 435 U.S. 6 (197) ............ 10, 11

United States v. Elliott, 571 F.2d 880 (5 Cir., 1978) .... 12

United States v. Field, 432 F.Supp. 55 (1977) .......... 12

United States v. Morris, 532 F.2d 436 (5 Cir., 1976) ..... 11

United States v. Nerone, 563 F.2d 836 (7 Cir., 1977) ..... 12

United States v. Parness, 503 F.2d 430 (2 Cir., 1974) .... 11

United States v. Resnick, 299 U.S. 207 (1936) ................ 11

United States v. Sutton, 605 I'.2d 260 (6 Cir., 1979),

rehearing en banc granted November 7, 1979 .......... 12

United States v. Weatherspoon, 581 F.2d 595 (7 Cir.,

1978) 11, 12

Other Authorities

CRIA: OEE sevsinntcnsaspenmsctresinne siauiidiaaanteidaanecieiis 4,11

BP Sie NUD | cccecocnscicnsrietnieainens “ . 2,6

I. MN ccc scenepislnstssntrdeneasiiicsatanascaeticiciieldeden 4

Be CR PLO RICIOD cennncestetvescncemrnsiessntecinemnctamitanseviinn 3,11

Be eres SII Ts EOD siceccésnediicanstisandeccblastoadcnemmeessssionnte 3,12

PAGE

18 U.S.C. 1962(c) _........... 3, 6, 13

18 U.S.C. 1962(d) _.............. ..8, 6, 13

SII IIE ‘vs oihaisecsshicahpcasienuptbihiestoiadjuskaasasdaocsmeensuenda 11

NP I RENT - sasrencsniecsioesusdsneticnsiacatansnition one

Fifth Amendment to United States Constitution. ........ 2,10

Illinois Revised Statutes, Chapter 38, Sec. 20-1 ............ 3, 4

Iu the

Supreme Court of the United States

Octoser TeRM, 1980

No.

CLIFFORD ROLAND,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Petitioner Clifford Roland prays that a writ of certiorari

be issued to review the judgment of the United States

Court of Appeals for the Seventh Circuit.

OPINIONS BELOW

The order of the District Court for the Southern Dis-

trict of Illinois is appended to this petition as Appendix

A. The published opinion of the United States Court of

»)

Appeals for the Seventh Circuit is appended hereto as

Appendix B. The order denying Petitioner a rehearing is

likewise appended to this petition as Appendix C.

JURISDICTION

The order of the Court of Appeals was entered on March

20, 1981. Petitioner’s Petition for Rehearing with en bane

suggestion, timely filed, was denied on April 21, 1981. The

jurisdiction of this court is invoked pursuant to 28 U.S.C.

1254(1) and Rule 20(1) and (4) of the rules of this court.

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

The Fifth Amendment to the United States Constitution

provides, in pertinent part:

‘‘No person shall be .. . subject for the same offense

to be twice put in jeopardy of life and limb... nor

be deprived of = liberty, or property, without due

process of law...

18 U.S.C. 1952 (“Travel Act’’) provides in pertinent

part:

‘“(a) Whoever travels in interstate .. . commerce

or uses any facility in interstate . . . commerce, in-

cluding the mail, with intent to—...

**(3) Otherwise promote, manage, establish, carry

on, or facilitate the promotion, management, establish-

ment, or carrying on, of any unlawful activity, and

thereafter performs or attempts to perform any of

the acts specified ... (above), shall be fined not more

than $10,000 or imprisoned for no more than five

years, or both.

‘*(b) As used in this section ‘unlawful activity’

means... (2)... arson in violation of the laws of the

state in which they are committed or of the United

States.”’

3

18 U.S.C. 1961 (‘*RICO’’) provides in pertinent part:

‘*As used in this chapter—

**(1) ‘Racketeering activity’ means (A) any act

... involving... arson... which is chargeable under

state law and punishable by imprisonment for more

than one year; (B) any act which is indictable under

any of the following provisions of Title 18, U.S.C.:

. .. Section 1341 (relating to mail fraud), ... Section

1952 (relating to racketeering) .. .

‘*(4) ‘Enterprise’ includes any individual, part-

nership, corporation, association, or other legal entity,

and any union or group of individuals associated in

fact although not a legal entity;

**(5) ‘Pattern of racketeering activity’ requires at

least two acts of racketeering activity .. .’’

18 U.S.C. 1962 (‘*RICO’’) provides in pertinent part:

‘*(¢) It shall be unlawful for any person employed

by or associated with any enterprise engaged in, or the

activities of which affect, interstate . . . commerce, to

conduct or participate, directly or indirectly, in the

conduct of such enterprise’s affairs through a pattern

of racketeering activity ...

**(d) It shall be unlawful for any person to con-

spire to violate any of the provisions of subsections

(a), (b) or (c) of this section.’’

Illinois Revised Statutes, Chapter 38, Sec. 20-1 (‘‘Ar-

son’’) provides, in pertinent part:

‘*A person commits arson when, by means of fire or

explosive, he knowingly:

‘*(b) with intent to defraud an insurer, damages

any property or any personal property having a

value of $150 or more.’’

STATEMENT OF THE CASE

Petitioner Clifford Roland was charged in twe counts

of a two count indictment. Count I charged Petitioner, to-

gether with Noble Starnes, Gerald Rodney Shurman and

Donald Wayne Murphy, with conspiracy to use a pattern

of racketeering activity in the conduct of the affairs of an

enterprise engaged in interstate commerce, in that Roland,

Murphy and Shurman would travel in interstate commerce

to commit an arson in violation of Illinois law; that Shur-

man and Murphy would commit the said arson; that

Starnes, as President of Tri-No Enterprises, Inc., a cor-

poration engaged in interstate commerce, would make a

false claim for damages on behalf of the said company,

under a certain insurance policy; and that Starnes would

commit mail fraud in violation of 18 U.S.C. 1341 by caus-

ing the use of the mail as part of said conspiracy to de-

fraud the insurance company via the false claim. Count

II of the indictment charged Petitioner Roland, together

with Gerald Rodney Shurman and Donald Wayne Murphy,

with travel in interstate commerce with intent to promote,

manage, establish, carry on and facilitate the promotion,

management, carrying on and establishment of unlawful

activity, said unlawful activity being an arson in violation

of Chapter 38, Section 20-1(b), Illinois Revised Statutes,

all in violation of Title 18, U.S.C., See. 1952(a) (3).

Petitioner Roland and co-defendant Noble Starnes were

tried together before a jury, the Honorable James L. Fore-

man, judge presiding, in the District Court for the South-

ern District of Illinois. The evidence at trial is summarized

in part I of the Court of Appeals’ slip opinion, appended

hereto as Appendix B, and is not repeated here to avoid

unnecessary duplication. Additional facts material to the

consideration of the questions presented are set forth

5

within the relevant portions of the Reasons for Granting

the Writ.

At the close of all the evidence, the jury found both Ro-

land and Starnes guilty as charged. Motions for judgment

of acquittal or, alternatively, for a new trial were denied

in a written order attached hereto as Appendix A. Peti-

tioner Roland was sentenced on Count I to a term of six

years imprisonment and a $5,000 fine, and on Count II to

a term of five years imprisonment and a $5,000 fine, the

terms of imprisonment and the fines to be concurrent.

Petitioner appealea the judgment of the District Court

to the United States Court of Appeals for the Seventh

Circuit pursuant to 28 U.S.C. 1291. The Court of Appeals

affirmed in a judgment and order dated March 20, 1981,

attached hereto as Appendix B. Petitioner’s petition for

rehearing with en banc suggestion, time!» filed, was denied

in an order dated April 21, 1981, attached hereto as Ap-

pendix C. The instant petition for writ of certiorari

follows.

6

REASONS FOR GRANTING THE WRIT

1. The Court of Appeals erred in concluding that there

was sufficient evidence of intent to defraud to sustain

Petitioner’s convictions under 18 U.S.C. 1962(d) and

1952(a).

The factual basis for the convictions in the present case

is a fire in the offices of Tri-No Enterprises, Inc. located

in the Royal Oaks Business Complex in Herrin, Illinois.

On the basis of this single fire, Petitioner Roland and co-

defendant Noble Starnes were convicted of conspiracy to

participate in the conduct of Tri-No’s affairs through a

pattern of racketeering activity, to-wit: traveling across

state lines to commit arson, arson with intent to defraud,

and mailing a fraudulent insurance claim with the insurer

of the burned premises, all in violation of 18 U.S.C. 1962

(c) and (d). In addition, Petitioner was convicted of a

separate count of traveling across state lines to commit

the arson in violation of the Travel Act, 18 U.S.C. 1952(a).

An essential element of all three alleged racketeering

acts, including Petitioner’s violation of the Travel Act,

is the intent to defraud an insurer. The Seventh Circuit

improperly concluded, on the basis of a highly selective

and speculative reading of the facts, that there was suffi-

cient evidence from which the jury could infer that both

Roland and Starnes possessed an intent to defraud

Starnes’ insurance company.

The Seventh Circuit concluded that there was sufficient

evidence-of Starnes’ intent based on evidence that his busi-

ness was in need of cash, he recently had increased his

insurance coverage, and he had an adjuster file a claim with

7

the insurer after the fire, even though he was aware that

he had no basis for the claim. (Appendix B, at App. 12-13).

In fact, there was no evidence that Starnes was in financial

difficulties. James Jacoby testified for the government

that Starnes had not paid him for the November 1977

portion of a coal shipment. Another government witness,

Keith Bodkins, testified that he hauled Jacoby’s coal for

Starnes and Starnes owed him for this. Jacoby and Bod-

kins never offered any explanation as to why they had not

been paid. Jacoby and Bodkins never testified that Tri-No

was in financial straits. Starnes’ debts to Jacoby and Bod-

kins, by themselves, are not evidence of financial difficulty,

they are merely evidence of debts. Without some idea of

the reason for the nonpayment or some idea of Starnes’

total income and the nature of his business affairs in Texas

and elsewhere, it is impossible to tell whether Starnes was

in financial difficulty or not. The government produced

absolutely no evidence of such a nature.

The Seventh Circuit also ignored the evidence at trial

in relying on the fact that Starnes had recently increased

his insurance coverage and that a claim was filed with

Starnes’ insurer after the fire. In fact, although Starnes

did increase his insurance coverage on the Tri-No build-

ing, government witness Caveness testified that he, Cave-

ness, recommended the increase following the expiration

of Starnes’ prior policy. Further, government witness

William Boyd, the adjustor who presented the insurance

claim to Starnes’ insurer, testified that he, Boyd, contacted

Starnes, Starnes did not contact him.

In addition, the court overlooked or ignored the testi-

mony of government witness Barcley, a police officer, who

stated that only hours before the fire Starnes reported to

the police threats against his property because of rumors

that Starnes was hauling coal from Kentucky.

§

The evidence considered by the Seventh Cireuit to sup-

port its conclusion that Starnes had the requisite intent

is nowhere near the evidence considered sufficient in Peo-

ple v. Berland, 74 Tll.2d 286, 385 N.E.2d 649 (1978), cited

by the court on Page 4 and 5. In Berland,

‘*Prior to the fire the building was two-thirds va-

cant. Rent revenues had fallen from $650 per month

to $250 per month. The building had been cited for

thirty-five violations of the Municipal Code of Chi-

cago. The building was losing money, and Berland

had tried to sell it on contract on three occasions. The

purchasers reneged.’’

While the evidence does show that Noble Starnes knew

that the building was insured and the evidence also shows

that an insurance claim was subsequently filed, these facts

alone are insufficient proof of intent to defraud. A person

may certainly destroy his own property, whether insured

or not, without fear of criminal liability. One is only

criminally liable if he destroys his property with the con-

temporaneous intent to injure, cheat or defraud the insur-

ance company. The kind of evidence required to prove a

contemporaneous intent to defraud, suggested in People

v. Berland, supra, and in People v. McAleer, 34 Ill.App.3d

821, 341 N.E.2d 72 (1st Dist., 1975), is utterly lacking in

the present case. The evidence against Starnes might be

sufficient to prove an act of mail fraud after the fire, but

it is plainly insufficient to prove the existence of a con-

spiracy previous to the fire.

With respect to the court’s conclusion regarding Peti-

tioner Roland’s intent, it is only necessary to review the

court’s reasoning to see the insufficiency in the proof. The

court reasons that Starnes had the requisite intent, Starnes

talked to Roland, and therefore Roland probably had the

requisite intent. (Appendix B, at App. 13). Further, the

court reasons, Roland was a businessman, businessmen

9

know you don’t burn office records for ‘‘some farfetched

public relations gimmick,’’ therefore Roland knew that

Starnes would make it financially worthwhile by defrauding

his insurance company. ‘‘Moreover,’’ the court reasons,

‘‘several weeks after the blaze Roland told Shurman that

the latter would receive full payment ‘after the insurance

settlement was made on the building,’ ’’ (emphasis added),

Appendix B at App. 14, and Roland did not express sur-

prise! Proof of this nature is plainly insufficient to over-

come the presumption of innocence and establish proof be-

yond a reasonable doubt that Roland intended to defraud

Starnes’ insurance company when he crossed the Indiana-

Illinois border on February 19, 1978, or at any time before

or after that date. There is simply no evidence that Peti-

tioner intended to do anything more when he traveled to

Illinois than help Noble Starnes burn Starnes’ office at his

request and with his consent, a wholly innocent and lawfui

activity.

As there was insufficient evidence to prove Petitioner

Roland guilty beyond a reasonable doubt of the offenses

of conspiracy and violation of the Travel Act, his convic-

tions should be reversed.

2. The Court of Appeals improperly extended the

Racketeer Influenced and Corrupt Organizations Act in

contravention of well recognized rules of statutory inter-

pretation, established precedent and principles of double

jeopardy in concluding that the evidence supported the

conclusion that Petitioner conspired to participate in the

affairs of Tri-No Enterprises, Inc. through a pattern of

racketeering activity.

The conspiracy convictions in the present ¢ #2 are based

on an almost magical foundation. In the opinion of the

Court below, the burning of Tri-No Enterprises, Inc. in-

volved four offenses: conspiracy to y \rticipate in the

10

affairs of Tri-No, arson with intent to defraud an insurer,

interstate travel with intent to commit arson, and use of

the mails in furtherance of the scheme to defraud. And

yet, in concluding that the evidence was sufficient to sup-

port the convictions, the opinion of the Court of Appeals

makes it appear as if the only crime committed was burn-

ing with intent to defraud an insurer. The baffling nature

of the present case, and the opinion below, arises from the

unusual identity between the four offenses involved. In

view of the identical nature of the offenses involved, Peti-

tioner’s conspiracy conviction is clearly inconsistent with

the Fifth Amendment prohibition against double jeopardy

and the plain language of the Racketeer Influenced and

Corrupt Organizations Act regarding participation in the

conduct of an enterprise’s affairs through a pattern of

racketeering activity.

The double jeopardy clause of the Fifth Amendment

‘*protects against multiple punishments for the same of-

fense.’’ North Carolina v. Pearce, 395 U.S. 711, 717 (1969).

‘*Cases in which the government is able to prove violations

of two separate criminal statutes with precisely the same

factual showing . . . raise the prospect of double jeopar-

dy.’’ Simpson v. United States, 435 U.S. 6, 11 (1978). In

the present case, it is evident that all four alleged offenses

are in fact one offense. The hallmark of all three alleged

racketeering acts and of the RICO count is the intent to

defrand an insurer. Proof of one is proof of all. The

opinion of the court below, and of the District Court below

attached hereto as Appendix A, make this fact quite clear:

upon finding sufficient evidence of an intent to defraud an

insurer, the court summarily concluded that the jury could

reasonably have found the defendants guilty of all four

crimes. The double jeopardy problem presented by the

unusual application of the RICO statute in the present case

was not even considered by the court below.

11

In addition to the aforementioned conflict with the

double jeopardy clause, it is readily apparent that the

facts in the present case do not constitute participation

in the affairs of an enterprise through a pattern of racke-

teering activity within the common meaning of those

words. It is equally apparent that the facts in the instant

case do not involve activity on the part of organized crime,

the original target of the RICO statutes. The court below

concluded that RICO applied to the fucts in the instant case

based on a narrow interpretation of the definition of

racketeering activity in 18 U.S.C, 1961(1) and (5), and a

broad interpretation of participation in the affairs of an

enterprise. The authority relied on by the court is simply

too insubstantial to support the unprecedented application

of RICO in the present case, particularly in light of well

recognized rules of statutory construction requiring the

strict interpretation of criminal statutes in favor of the

accused,* and requiring doubt to be resolved against turn-

ing a single transaction into multiple offenses.**

The unusual nature of the so-called ‘‘pattern’’ of

racketeering activity in this case is indicated by a com-

parison of the facts in this case with the facts in several

other cases. In United States v. Weatherspoon, 581 F.2d

595 (7 Cir., 1978), for example, the court held that several

mailings, each of which was an indictable act under 18

U.S.C. 1341, was sufficient evidence of a pattern. United

States v. Parness, 503 F.2d 4380 (2 Cir., 1974), involved a

pattern of three violations of 18 U.S.C. 2314. United States

v. Morris, 532 F.2d 436 (5 Cir., 1976) involved a pattern

of several card games involving cheating techniques.

* Huddleston v. United States, 415 U.S. 814, 830-831 (1974) ;

United States v. Resnick, 299 U.S. 207, 209 (1936).

** Simpson v. United States, 435 U.S. 6, 15 (1978).

12

United States v. Elliott, 571 F.2d 880 (5 Cir., 1978) in-

volved a criminal enterprise in a pattern including arson,

car theft, fencing stolen goods, murdering a key witness,

and dealing in narcotics. Petitioner is aware of no RICO

case interpreting as a pattern a single course of conduct

such as that in the present case.

The Court of Appeals’ reliance on the definitional sec-

tion of the RICO Act, 1961(1)(A) and (B), which denomi-

nates arson, mail fraud and violations of 18 U.S.C. 1952,

as racketeering activity, and the court’s conclusion, based

on United States v. Weatherspoon, 581 F.2d 595 (7 Cir.,

1978) that ‘‘the fact that there is but one objective under-

lying the separate acts does not diminish the applicability

of RICO to those acts,’’ ignores the plain meaning of the

word ‘‘pattern’’. If the Court of Appeals were correct,

then any ‘wo acts would constitute a pattern. Such a result

is plainly absurd. RICO applies to the facts in the present

case, if at all, only because the definitional section of the

statute has assumed a life of its own, divorced from the

original intention of the legislature.

The Court of Appeals’ conclusion that the burning of

the Tri-No offices constituted participation in the affairs

of the enterprise is simply not warranted by the ordinary

meaning of the word participation. The court might as

well have construed an assault and battery as a personal

relationship. Further, the court’s conclusion is inconsistent

with numerous cases requiring that participation be in

furtherance of the enterprise’s purposes. See, for example,

United States v. Sutton, 605 F.2d 260, 270 (6 Cir., 1979),

rehearing en bane granted November 7, 1979; United States

v. Nerone, 563 F.2d 836, 851-2 (7 Cir., 1977). But Cf. United

States v. Field, 432 F.Supp. 55 (1977).

As the application of RICO to the facts in the present

case contravenes the prohibition against double jeopardy

13

and is plainly not warranted by the plain meaning of the

RICO Act or any precedent, Petitioner’s conviction for

conspiracy in violation of 18 U.S.C. 1962(c) and (d) should

be reversed.

CONCLUSION

For all the foregoing reasons, the Petition for Writ of

Certiorari should be allowed to review the instant decision

of the United States Court of Appeals for the Seventh

Circuit.

Respectfully submitted,

Evwarp M. Genson

Jerrrey B. Srernpack

134 North LaSalle #300

Chicago, Illinois 60602

(312) 726-9015

Altorneys for Petitioner Roland.

APPENDIX

APPENDIX A

IN THE

DISTRICT COURT OF THE UNITED STATES

FOR THE SOUTHERN DISTRICT OF ILLINOIS

UNITED STATES OF AMERICA,

Plaintiff,

vs. Criminal No. 78-02018-01-B

78-02018-03-B

NOBLE STARNES,

CLIFFORD ROLAND,

Defendants.

ORDER

FOREMAN, Chief Judge:

Before the Court are defendants Starnes’ and Roland’s

motions for judgment of acquittal, or, alternatively, for a

new trial or for arrest of judgment.

In July, 1978, the Grand Jury returned a two count in-

dictment against defendants Noble Starnes, Clifford Ro-

land, Gerald Shurman and Donald Murphy. In Count I,

the four defendants were charged with conspiracy to par-

ticipate in the conduct of an enterprise through a pattern

of racketeering activity in violation of 18 U.S.C. §1962(C)

in that defendants Roland, Murphy and aurman traveled

across state lines from Gary, Indiana to Herrin, Illinois

with the intent to commit arson in violation of Illinois

App. 2

Revised Statutes c. 38, §20-1(b); that defendants Murphy

and Shurman burned the building in violation of Illinois

Revised Statutes c. 38 §20-1(b) and that defendant Starnes

caused a false claim to be mailed and filed with the insurer

of the burned premise in violation of 18 U.S.C. $1341.

Count two charged defendants Shurman, Roland and

Murphy with crossing state lines with the intention of

committing arson in violation of Illinois Revised Statutes

ce. 38 §20-1(b) and that they did in fact commit arson. On

January 3, 1979, the defendants Starnes and Roland were

tried by a jury in this Court and found guilty of the counts

as charged in the indictment.’ Defendants Starnes and

Roland now move for judgment of acquittal, or, alterna-

tively, a new trial or an arrest of judgment and in support

thereof, present three grounds.

The defendants first assert that the government failed

to produce sufficient evidence to show that the defendants

conspired to commit a pattern of racketeering activity.

Specifically, they contend that the government failed to

prove that the defendants agreed to burn the office com-

plex of Tri-No Enterprises for the purpose of defrauding

an insurer.

The standard by which this Court must test defendants’

motion for judgment of acquittal is whether substantial

evidence taken in the light most favorable to the govern-

ment, tends to show that the defendant is guilty beyond a

reasonable doubt. United States v. Fearn, 589 F2d 1316

(7th Cir. 1978); Glasser v. United States, 315 U.S. 60

(1942). Thus, the trial judge must determine whether upon

the evidence, ‘‘giving full play to the right of the jury to

determine credibility, weigh the evidence and draw justifi-

1 Defendants Shurman and Murphy pursuant to a plea agreement

had previously pleaded guilty to Count I.

App. 3

able inferences of fact, a reasonable mind might fairly

conclude guilt beyond a reasonable doubt.’’ United States

v, Yeoman-Henderson, Inc., 193 F2d 867, 869 (7th Cir.

1952).

In Count I, the defendants were convicted of conspiring

to participate in the conduct of an enterprise through a

pattern of racketeering activity. The gist of this conspir-

acy is that the defendants agreed to burn an office complex

in Illinois with the intent to defraud an insurer. The de-

fendants candidly concede that the government produced

sufficient evidence to show that they agreed to leave Indi-

ana and travel to Illinois in order to burn the Tri-No En-

terprise building. The issue, therefore, is whether the

government produced sufficient evidence to show that they

agreed to burn the building with the intent to defraud an

insurer.

Under conspiracy law, it is fundamental that a convic-

tion cannot be sustained unless there is proof of an agree-

ment to commit the offense. Ingram v. United States, 360

U.S. 672 (1959). Although there need not be proof that

the conspirators were aware of the criminality of their

objective or each and every detail of the plan, there must

be clear and unequivocal evidence of the defendants’

knowledge of the purpose of the conspiracy. Such knowl-

edge, however, may be inferred from the circumstances,

acts and conduct of the parties. Ingram, supra at 678,

United States v. Fellabaum, 408 F2d 220 (7th Cir. 1969).

Conspiracy to commit a particular substantive offense can-

not exist without at least the degree of criminal intent

necessary for the substantive offense itself. Ingram, supra

at 678. Thus, in order to be guilty of conspiracy, the de-

fendants must know what kind of criminal conduct is in

fact contemplated. United States v. Gallishaw, 428 F2d 760

App. 4

(2d Cir. 1970). A mere willing participation in acts with

alleged co-conspirators, knowing in a general way that

their intent was to break the law, is insufficient to estab-

lish a conspiracy. United States v. Purin, 486 F2d 1363 (2d

Cir. 1978).

In applying these principles to the present case, the

Court initially notes that part of the ultimate underlying

substantive offense is arson or burning with the intent to

defraud an insurer. Thus, in order to assess the sufficiency

of the evidence of the defendants’ intent to defraud an

insurer, the Court has surveyed the law of arson in Illinois

and various other states.

In Illinois, as well as several other states, an agent who

burns the owner’s building at the request of the owner

cannot be guilty of arson. Ill Rev Stat c. 38 §20-1. Thus,

if an owner of a building desires to rid himself of a build-

ing by burning and can limit the fire to his own building,

either he or one he hires may legally do so unless they

intend to defraud an insurer. Thus, intent to defraud an

insurance company is the very essence of this type of

arson. This intent cannot exist without knowledge that

the property is insured. State v. Greer, 243 Mo. 599, 147

S.W. 968 (1912). Ordinarily, when one purposely or de-

signedly performs an unlawful act, the law presumes that

he intends the natural consequences of such act. However,

this rule does not apply in arson cases where the building

is burned with the consent of the owner because no crime

can be committed by the mere burning of the building. Con-

sequently, to convict a defendant of arson with intent to

defraud an insurer, it is necessary to prove that he had

knowledge that the property was insured. Greer, supra at

970. This knowledge may be proven by circumstantial

evidence. State v. Bersch, 276 Mo. 397, 207 S.W. 809 (1918).

The substance of the evidence in the present case was

that defendants Roland, Murphy and Shurman met at de-

App. 5

fendant Roland’s bar in Gary, Indiana, on February 12,

1978. At that meeting, these defendants agreed to do a

‘torch job’’ in Southern Illinois after defendant Roland

had consulted his ‘friend in Dallas.’’ Toll calls records

showed that calls were made from defendant Roland’s bar

to defendant Starnes’ phone in Aledo, Texas. Although

the term ‘‘torch job’’ was defined as burning a building,

defendant Shurman stated that it was understood that it

was to be an office fire to destroy records and it was re-

lated to the coal miners. Before the meeting was con-

cluded, defendant Roland gave defendants Shurman and

Murphy $100.00 with which to purchase lacquer thinner.

The defendants also agreed that Shurman and Murphy

were to be paid $2,000.00 for their services.

On February 19, 1978, the evidence showed that defen-

dants Roland, Murphy and Shurman left Gary, Indiana

and traveled to Christopher, Illinois, where they met de-

fendant Starnes. Defendants Starnes and Roland had a

conversation and then the four defendants traveled to the

building owned by Tri-No Enterprises, Inc., whose presi-

dent was Noble Starnes. At that time, defendant Starnes

told defendants Shurman and Roland that the whole build-

ing had to be destroyed completely, that it was no longer

a situation where the office was to be burned. Defendant

Shurman testified that he understood the fire was to be

blamed on the United Mine Workers. Defendant Starnes

then removed various records, office equipment and riding

lawnmowers as the other three defendants prepared for

the fire. Defendant Starnes then left for the airport in

order to give him an alibi. Later that evening defendants

Shurman and Murphy burned the building as planned,

eluded the police and around 2:00 A.M. the three defen-

dants left Southern Illinois and returned to Gary, Indiana,

App. 6

Defendant Shurman testified that on the afternoon of

the fire he received $1,400.00 and was informed he would

receive the balance of the money later. Upon their return

to Indiana, defendant Shurman testified that no additional

money would be forthcoming because the fire had not badly

damaged the building. Defendant Shurmnan testified he

later learned that the building had been substantially dam-

aged. He thereafter talked with defendant Roland who

then indicated that the balance of money would be paid

after the insurance settlement on the building was made.

The evidence also showed that defendant Starnes was

having financial difficulties during this period and shortly

before the building was burned, increased his insurance

coverage. After the fire, defendant Starnes contracted with

Associated Adjusters of Michigan to file a claim with Com-

mercial Union Insurance Company of Massachusetts.

Upon consideration of this evidence, the Court finds

that it was sufficient for the jury to infer that the defen-

dants agreed to burn the building with the intent to de-

fraud an insurance company. Defendant Starnes was presi-

dent of Tri-No Enterprises and procured the services of

his friend, Mr. Roland, to aid him in setting the fire. De-

fendant Starnes was having financial difficulties and in-

creased his insurance coverage. Before the fire, he re-

moved numerous items from the building and emphasized

that the building must be completely destroyed. After the

fire, he contacted a private adjustor to file an insurance

claim.

Defendant Roland was a friend of defendant Starnes

and he secured the services of Shurman and Murphy to

aid him in the project. Defendant Roland coordinated the

project and drove from Indiana to Southern Illinois where

they met defendant Starnes. Upon their return to Indiana,

defendant Roland informed Shurman and Murphy no addi-

App.7

tional money would be forthcoming because the building

had not been badly damaged. Finally, defendant Roland

later told Shurman that the balance would be paid upon

receipt of the insurance money.

Similarly, the Court also finds sufficient evidence for

the jury to infer that defendant Roland, along with Shur-

man and Murphy, crossed state lines with the intent to

burn defendant Starnes’ building for the purpose of de-

frauding an insurer. Accordingly, the defendants’ motions

for judgment of acquittal for lack of sufficient evidence is

DENIED.

The defendants next assert that the evidence fails to

show that the defendants conspired to commit a pattern

of racketeering activity. The pattern of racketeering ac-

tivity charged is that the defendants agreed to travel

from Indiana to Illinois with intent to commit arson, that

they committed the arson and that a false insurance claim

was sent through the mail in order to defraud the insurer.

Thus, the defendants’ claim that the one series of transac-

tions, although technically three violations, is insufficient

to constitute a pattern. This Court disagrees with that

conclusion.

18 U.S.C. §1961(5) defines a ‘‘pattern’’ of racketeering

activity as at least two acts of racketeering activity.

Racketeering activity is defined in 18 U.S.C. §1961(1) as

‘fany act... involving... arson... chargeable under

state law and punishable by imprisonment for more than

one year; any act which is indictable under . . . section 1341

(relating to mail fraud), . . . section 1952 (relating to

racketeering).’’ Accordingly, the defendants engaged in

a pattern of racketeering activity within the meaning of

18 U.S.C. §1961(5) because they jointly committed two or

more acts of ‘‘racketeering activity.’’ See, United States

v. Weatherspoon, 581 F2d 595 (7th Cir. 1978).

App. 8

Finally, the defendant Roland has moved for an acquit-

tal, or alternatively, a new trial because he contends that

the government failed to prove that the defendants par-

ticipated in the conduct of an enterprise. The Court also

disagrees with this contention. The evidence at trial

showed that Tri-No Enterprises, Inc., was a corporation

which transacted business in interstate commerce. Defen-

dant Starnes was the president of Tri-No Enterprises,

Ine., and Tri-No was the contracting party on the insur-

ance policy. Defendant Roland conspired with defendant

Starnes and apparently was to be paid out of Tri-No funds.

Consequently, both defendants participated either directly

or indirectly in Tri-No’s affairs through a pattern of

racketeering activity. United States v. Elliott, 571 F2d 880

(5th Cir. 1978).

In sum, defendants’ motions for judgment of acquittal

or for a new trial or for arrest of judgment are DENIED.

IT IS SO ORDERED.

DATED: Feb. 15, 1980,

/s/ James L, Foreman

CHIEF JUDGE

App. 9

APPENDIX B

Nos, 80-1437, 80-1435

Unitep States or America,

Plaintiff-Appellee,

v.

Nose R. Starnes and Cuirrorp Rovanp,

Defendants-Appellants.

Appeal from the United States District Court for the

Eastern District of Illinois, Benton Division.

No. 78-Cr-02018—James L. Foreman, Judge.

ArGcuEep Novemser 7, 1980—Decipep Marcu 20, 1981

Before Cummineos, Woop, Circuit Judges, and CAMPBELL,

Senior District Judge.*

Woop, Circuit Judge. Defendants Noble Starnes and

Clifford Roland appeal from a jury verdict that found

them guilty of violating 18 U.S.C. § 1962(d), a provision

of the Racketeer Influenced and Corrupt Organizations

Act (RICO). The indictment charged that Starnes and

Roland violated RICO by conspiring to engage in a

pattern of racketeering in connection with a scheme to

commit arson with intent to defraud an insurer, in

violation of Illinois law. The arson consisted of setting

fire to a building that housed Tri-No Enterprises, Inc., a

* Honorable William J. Campbell, Senior District Judge of the

Northern District of Illinois, is sitting by designation.

App. 10

business of which Starnes was president. In addition,

the jury found Roland guilty on a separate count of

violating the Travel Act, 18 U.S.C. § 1952(a), by travelling

across state lines to commit the arson.’

Defendants do not contest that they arranged to set

the fire and that Starnes filed a claim for the resulting

damage with Tri-No’s insurer. Instead, Starnes and

Roland argue that the evidence is insufficient to establish

the intent necessary to sustain their convictions. Alterna-

tively, they contend that if the requisite intent existed a

RICO prosecution cannot be brought in connection with a

single instance of arson. Defendants also argue that their

rights were violated when the prosecution failed to procure

for them handwritten notes allegedly taken by an FBI

agent while questioning a witness. In addition, Starnes

and Roland claim that the district judge was unfairly

biased against them, and Starnes asserts that he failed to

receive effective assistance of counsel. We affirm.

I,

In 1977, Roland operated a tavern in Gary, Indiana,

and also conducted a legitimate demolition business.

During December of that year, Roland told Gerald

Shurman about a friend of Roland’s who wanted to set

fire to an office in Illinois in order to destroy records

contained in the office. Shurman is a former policeman

who was convicted of a felony prior to the events in this

case. He had on occasion worked with Roland in the

latter’s demolition business. Roland offered Shurman

approximately two thousand dollars in return for his

services in setting the fire. Shurman enlisted the aid of

* Starnes was sentenced to six years imprisonment and fined

$5000.00. Roland received the same sentence as Starnes on the

RICO charge, and a concurrent term of five years imprisonment

and $5000.00 fine on his conviction under the Travel Act.

App. 11

an acquaintance, Donald Murphy,’ and the two men met

with Roland at the latter’s tavern to work out the details

for the destruction of the office. During the conversation

at the tavern, Roland received and made telephone calls

purportedly to the individual who wanted the office burned.

Telephone toll records introduced at trial showed that

the calls were made to and from a telephone subscribed

by Starnes in Texas. ,

As a result of the meeting, Shurman, Murphy and Ro-

land agreed to travel to southern Illinois where they would

set the fire as discussed. They anticipated that the fire

would be blamed on the United Mine Workers who were

on strike in southern Illinois at the time. The union mem-

bers worked for some of Tri-No’s suppliers, but not di-

rectly for Tri-No. It was agreed that the fire had to be

set soon, since there was news that the strike would end

within a few days.

The three men purchased thirty gallons of flammable

lacquer thinner with money supplied by Roland, and set

out from Gary at dawn for their destination,* a building

in the Royal Oaks business complex in Herrin, Illinois.

Starnes greeted them when they arrived at the building.

Shurman recognized Starnes as a person he had seen be-

fore with Roland at Roland’s bar.

Starnes informed them that he wanted the entire build-

ing destroyed rather than just a single office. The men

removed a number of items from the building and obtained

additional flammable liquids. They delayed igniting the

fire until darkness, leaving Starnes the opportunity to

board an airplane flight out of state in order to establish

an alibi. The fire then was set.

Starnes had increased his insurance coverage on the

building shortly before the fire. Two of Tri-No’s

2Shurman and Murphy testified at trial. They were named

with Roland in both Counts of the indictment. Shurman pleaded

guilty to Count I. Murphy pleaded guilty to Count II. arges

on the remaining Count for each of the men were still pending

at the time of trial.

*The exact destination apparently was kept from Shurman and

Murphy until they were nearly there.

App. 12

creditors testified that Tri-No was not paying its bills to

them and that the creditors had filed suit to recover the

money due.

II.

A. Roland first argues that his actions did not con-

stitute a crime because, he says, the government did not

prove that he helped set the fire with the intent to de-

fraud an insurer, as required under relevant Illinois law.

Ill. Rev. Stat. Chap. 38, § 20-1(b).* Starnes contends that

he also did not have the requisite intent, and that even

if he did he cannot be convicted of conspiracy since none

of the others thought that the office fire was started for

the purpose of defrauding Starnes’s insurer. He argues

that he cannot be convicted for conspiring to defraud an

insurer with people who do not possess the requisite intent

to commit the crime. Defendants’ contentions thus depend

on whether or not they possessed the intent required by

law.

Circumstantial evidence may be used to prove a defen-

dant’s intent; indeed, that usually is the only evidence

available to show intent. United States v. Haldeman, 559

F.2d 31 (D.C. Cir. 1976), cert. denied, 431 U.S. 933 (1977) ;

People v. Berland, 74 Ill. 2d 286, 308 (1978) (arson case).

There was sufficient evidence to show Starnes’s intent

to defraud the insurance company. His business was in

need of cash to pay its bills. Starnes, who was president

of Tri-No, was well aware that the building was insured

and that he recently had increased the insurance

coverage. A successful fire was a convenient solution to

‘Til, Rev. Stat. Chap. 38, § 20-1 (“Arson”) provides, in pertinent

part:

A person commits arson when, by means of fire or explosive,

he knowingly :

* * *

(b) With intent to defraud an insurer, damages any property

or any personal property having a value of $150 or more.

App. 13

his financial problems. He had an adjuster file a claim

with the insurer after the fire, even though he was aware

he had no basis for the claim under the policy since he

was responsible for the fire being set. Taken together, this

was ample evidence from which the jury could infer that

Starnes possessed the requisite intent. See generally, Peo-

ple v. Berland, supra, 74 Ill. 2d at 308-09.

Our attention turns, then, to whether the evidence sus-

tains the jury’s determination that Roland organized the

setting of the fire with intent to defraud an insurer and

thus conspired with Starnes and the others as charged.

As with Starnes, we conclude that the evidence was suffi-

cient to sustain the jury verdict.

Shurman testified that he had seen Starnes and Roland

at the latter’s bar long before the arson was contemplated.

Roland was the ‘‘middle man’’ in this operation and

played the key role in obtaining the services of those who

would set the fire. He was in telephone contact with

Starnes while Shurman and Murphy laid plans with him

for burning the office. This evidence suggests that Roland

was privy to Starnes’s reasons for setting the fire.

In addition to the evidence regarding Roland’s rela-

tionship with Starnes, there are other circumstances

from which the jury could infer Roland’s criminal intent

as charged. Roland was a businessman and it is rea-

sonable to conclude that from his own experience he

knew that commercial buildings usually are insured.

The jury was justified in concluding thet Roland would

know that Starnes expected to recoup his losses on the

building by collecting insurance money. Setting fire to a

building, even if intended to be confined only to records

in a single office, entails tremendous risk of financial

Joss, especially considering the amount of flammable

liquid the conspirators originally purchased. <A jury

could reasonably infer that it must have been obvious to

Roland that Starnes would not be paying him to cause

him (Starnes) great financial loss by burning his own

business down for some farfetched public relations

App. 14

gimmick, or any other reason, unless Starnes had insur-

ance to cover the property loss and otherwise make it all

financially worthwhile.

Moreover, several weeks after the blaze Roland told

Shurman that the latter would receive full payment

‘‘after the insurance settlement was made on the build-

ing.’’ The testimony does not suggest that either Shur-

man or Roland expressed surprise that an insurance claim

was involved. Given Rolend’s business background, the

context of his statement to Shurman supplies additional

support for the jury’s conclusion that Roland intended to

defraud Starnes’s insurer.

That Roland told Murphy and Shurman only that the

United Mine Workers were to be blamed for the fire does

not alter the sufficiency of the evidence as to his intent.

Murphy and Shurman did not testify that blame was to

be placed on the union solely for the purpose of making

that organization look bad. Rather, their testimony more

plausibly suggests that the strike provided a convenient

cover for those who burned the Tri-No offices, diverting

attention from the real reasons for the fire. That was why

defendants had to move fast in order to take advantage

of the timing of the strike, which was about to end.

The evidence sustains the jury’s conclusion that Starnes

and Roland intended to defraud Starnes’s insurer when

they conspired to set the fire.

B. Starnes and Roland argue that they could not have

conspired to conduct a ‘‘pattern’’ of racketeering activity

under RICO since a pattern requires at least two separate

racketeering acts as defined by the statute. They sontend

that since the offense charged involves a single instance

of arson no ‘‘pattern’’ of racketeering exists in this case.

Acts of racketeering under RICO include arsons

punishable under state law by imprisonment for more

than one year, 18 U.S.C. § 1961(1)(A), and crimes indict-

able under federal mail fraud laws or federal laws

that prohibit interstate travel with intent to commit

App. 15

arson, 18 U.S.C. § 1961(1)(B). Each of those acts is a

separate instance of racketeering activity under RICO.

When two or more of those acts are connected to each

other in some logical manner so as to effect an unlawful

end, a pattern of racketeering exists. 18 U.S.C. §§ 1961

(5), 1962(d). H.g., United States v. Stofsky, 409 F.Supp.

609, 614 (S.D.N.Y. 1973). See United States v. Weather-

spoon, 581 F.2d 595, 601 n.2 (7th Cir. 1978). The RICO

provisions are violated when there is a conspiracy to com-

mit more than one of those acts, i.e., a pattern of racketeer-

ing directed at an enterprise’s affairs.

Defendants’ argument that RICO cannot apply to a

conspiracy to commit a single arson ignores the statutory

scheme just described. While there may indeed have been

a single scheme or objective of the conspiracy—the arson

--it turned out that several acts of racketeering were con-

templated to achieve that objective. Under RICO, the

conspiratorial objective is a matter different than the acts

contemplated by the conspirators. Those acts in this case

include Roland’s travelling with Shurman and Murphy

from Indiana to Lllinois so they could set the fire in order

to defraud the insurer; actually setting the fire in order

to defraud the insurer; and then using the mails to com-

plete the fraudulent scheme. Mach is a separate act of

racketeering.

This circuit previously has considered the position

defendants advance. In United States v. Weatherspoon,

supra, the defendant argued that all the mailings for

which she was indicted under RICO arose from a single

scheme to defraud the Veterans Administration, and thus

were not a part of a ‘‘pattern’’ of racketeering. 581 F.2d

at 601-02. The court disagreed, finding no support for

the argument that RICO ‘‘requires[s] a showing of

separate and unrelated schemes, as a precondition for

finding two indictable ‘acts’ under 18 U.S.C. § 1341

{mail fraud] that would constitute a ‘pattern of racketeer-

ing activity’ under [RICO].’’ 581 F.2d at 601 n.2. Thus,

the fact that there is but one objective underlying the

separate acts does not diminish the applicability of RICO

to those acts.

App. 16

Other courts that have considered the application of

the ‘‘pattern’’ provisions of RICO have interpreted the

statute in the same manner as we do. For example, in

United States v. Chovanec, 467 F.Supp. 41 (S.D.N.Y.

1979), the court concluded that a single objective to de-

fraud a single victim constituted a RICO offense, when

the objective was carried out through several incidents of

wire fraud. 467 F.Supp. at 44. Compare United States v.

Parness, 503 F.2d 430 (2d Cir. 1974) (interstate transport

of stolen securities as part of single scheme to defraud).

Cf. United States v. Anderson, 626 F.2d 1358, 1371 (8th

Cir. 1980), cert. denied, ...... US. ......, 49 U.S.L.W. 3617

(No. 80-766 Feb. 24, 1981) (dictum disapproving ‘‘The

Government’s view . . . [which] leads to the conclusion

that almost any two criminal acts affecting interstate com-

merce would fall within the ambit of RICO’’).

We reject defendants’ argument that the acts involved

in this case do not support the jury’s verdict that Starnes

and Roland conspired to engage in a pattern of racketeer-

ing activity.

C. Defendants contend that there existed no legiti-

mate enterprise in the affairs of which they participated

as required by RICO.’ Starnes and Roland argue that

they conspired only to set the fire, which activity they

seek to distinguish from participation in Tri-No’s

business affairs. Their association, they say, was for a

wholly illegitimate purpose. Thus, defendants focus on

an interpretation of RICO that would exclude associa-

tions for purely illegitimate purposes from the coverage

of the statute. Compare United States v. Aleman, 609

F.2d 298 (7th Cir. 1979), cert. denied, 445 U.S. 946

5 The pertinent RICO provision is contained in 18 U.S.C.

§ 1962(c), and reads as follows:

It shall be unlawful for —, person employed by or associated

with any enterprise engaged in, or the activities of which

affect, interstate or foreign commerce, to conduct or partici te,

pcb 4 or wt in the conduct of such enterprise’s affairs

ke ghd pattern of racketeering activity or collection of un-

ebt.

App. 17

(1980) (RICO covers wholly illegitimate enterprises) with

United States v. Turkette, 632 F.2d 896 (1st Cir. 1980),

cert, granted, ...... US. ......, 49 U.S.L.W. 3525 (No. 80-808

Jan. 27, 1981) (RICO covers only infiltration of legitimate

organizations).

The government maintains here, as it did at trial, that

the ‘‘enterprise’’ involved in this case is Tri-No itself.

The focus of the government’s case is on the conspiracy

as it affected Tri-No’s business operations. Starnes par-

ticipated directly in Tri-No’s affairs, says the government,

since he was president of the corporation and the arson

conspiracy affected business property and insurance cover-

age. Roland was involved indirectly in Tri-No’s affairs,

the government contends, because the damage to the build-

ing was meant to affect the conduct of corporate business.

The government argues that since this case was tried on

the basis of the conspirators’ participation in the affairs

of a legitimate business, there is no reason to consider

whether as association solely for illegitimate purposes

falls within the terms of RICO. We agree with the govern-

ment’s position and conclude that the evidence is sufficient

to establish that Starnes and Roland participated in Tri-

No’s affairs sufficiently to bring them within the grasp of

RICO.®

The evidence shows Roland knew that the arson was

meant in a literal way to affect the conduct of Tri-No’s

business. To begin with, Roland had known Starnes for

some time and was aware from the start that it was Tri-

No’s office complex that was to be the site of the arson.

It obviously is difficult to operate a business from a

burned-out office. Even if we were to assume that the

purpose of the arson was only to embarrass the striking

union by placing blame for the fire upon it—as

defendants argue and we reject—the conspiracy still

® Defendants would fare no better ev.1 if we accepted their

promise that this case concerns the activities only of an illegitimate

enterprise. As noted, this circuit has held that RICO covers the

activities of a wholly unlawful association. United States v. Aleman,

supra, 609 F.2d at 304-05. There is ample evidence to sustain the

conviction on the basis of participation in an illegitimate under-

taking.

App. 18

would be directed to at least one aspect of Tri-No’s busi-

ness conduct: namely, its relations with union-staffed sup-

pliers. As it is, the destruction of Tri-No’s business prop-

erty in order to unlawfully obtain an insurance settlement

bears significantly on the corporation’s affairs, especially

in light of financial difficulties the firm was experiencing.

The participation in the conspiracy of people who were

not on the legitimate payroll of Tri-No does not mean

those people were not participating in its affairs. The

nature of racketeering connections to an otherwise legiti-

mate business suggests that elements outside a company

may assist in obtaining the company’s illegal goals. Thus

‘*(t]he substantive proscriptions of the RICO statute ap-

ply to insiders and outsiders—those merely ‘associated

with’ an enterprise—who participate directly and indirect-

ly in the enterprise’s affairs through a pattern of rack-

eteering activity. [Citations omitted.] Thus, the RICO net

is woven tightly to trap even the smallest fish, those peri-

pherally involved with the enterprise.’’ United States v.

Elliott, 571 F.2d 880, 903 (5th Cir.), cert. denied sub nom.,

Delph v. United States, 439 U.S. 953 (1978) (emphasis in

original).

Tri-No was the enterprise involved in this case.

Starnes participated in its affairs directly, including the

arson, as the corporation’s president. Roland’s part in

the conspiracy involved his role in Tri-No’s unorthodox

disposition of its business property and the corporation’s

resulting insurance claim. The acts of racketeering re-

quired the conspirators’ direct and indirect participation

in the conduct of Tri-No’s affairs, and fell within the pro-

scriptions of RICO.’

7Starnes and Roland also contend that application of RICO

ties is inconsistent with the B sagen ge | underlying a recent

upreme Court case considering the use of ty enhancement

provisions in the context of double jeopardy claims. As _ this

court previously has noted, RICO is a penalty enhancement scheme

unique unto itself and must be interpreted in the context of the

evils it seeks to redress—racketeering activity indictable under

separate laws. United States v. Aleman, 609 F.2d 298, 304, 306

(footnote continued)

App. 19

D. Roland claims that he did not travel interstate with

the requisite intent to promote the arson and thus his con-

viction under Count II of the indictment for a violation

of the Travel Act cannot stand. The circumstances of the

conspiracy as discussed earlier show that Roland travelled

from Indiana to Illinois in order to set the fire with the

intent to defraud Tri-No’s insurer. There is sufficient evi-

dence to support Roland’s conviction under Count II of

the indictment. ,

Il.

A. Roland and Starnes contend that their rights

were violated when the prosecution failed to turn over

the original handwritten notes allegedly taken by an

FBI agent during interviews with the government’s

witness, Shurman. The prosecutor apparently did not

have the notes in his possession even if they still existed.

Defendants contend that this violated their rights under

the Jencks Act, 18 U.S.C. § 3500, and Brady v. Mary-

land, 373 U.S. 83 (1963). They argue that since the with-

holding of exculpatory evidence may be reversible error

even if done by someone other than the prosecutor, the

(footnote continued)

(7th Cir. 1979), cert. denied, 445 U.S. 946 (1980). See generally

W. Hurst, Statutes 1n Court 141-43 (1970). Defendants’

citation of Busic v. United States, 446 U.S, 398 (1980), is in-

apposite in this case.

The Busic case held that if a statute defining a felony provides

for enhanced penalties for use of a weapon in committing the

crime, a sentence given under that statute may not be further

enhanced by application of separate statutory provisions permitting

enhanced ties generally for such use of a weapon. The Court

in Busic did not question the penalty-enhancement provision as

applied to the underlying felony. Nor did the Court question the

constitutionality of the separate penalty-enhancement provision as

— to a felony law lacking its own enhancement clause.

uble-enhancement is not present in this case. Rather, we deal

here with a single statute aimed at enhancing the usual penalties

available under state or federal law for acts associated with

racketeering. Aleman, supra, 609 F.2d at 306-07. There is no

Busic situation implied by the facts of this case.

App. 20

prosecutor’s statement was inadequate to safeguard their

rights.

During his testimony, Shurman mentioned that Agent

Little had taken notes while interviewing him. The formal

FBI report on those interviews had been turned over to

Roland and Starnes before trial. When defendants sought

production of the original notes to supplement the single

report already obtained, the prosecutor responded that

‘*It)]hey have every piece of information that the United

States Attorney’s Office has, Your Honor, and [the single

report is] the only one we have.’’ The district judge then

told counsel that ‘‘maybe we can have a hearing on it or

something, out of the presence of the jury, of what to do

if [the prosecutors] don’t have it.’’ There is no indication

in the record that defendants ever sought such a hearing,

and none was held. The record also does not disclose any

other effort by defendants to discover whether or not the

notes in fact existed, a doubt implied by the prosecutor’s

comment that he also did not have the notes. Agent Little

was not called by the defense to answer questions on this

matter, although the district court clearly presented that

possibility to defendants. FBI Agent Dueker, the chief

agent on the case, was called as a defense witness but he

was not asked about the existence or whereabouts of the

original notes.

There is nothing in this record that suggests the notes

could be in some way material to issues involved in the

case, as required under Brady. See United States v.

Crowell, 586 F.2d 1029 (4th Cir. 1978). Nor did Roland

and Starnes attempt to determine that the notes were

still in existence and thus obtainable by the prosecutor.

The record here is insufficient to establish an issue as to

a violation of defendants’ Brady rights. We decline to

decide the question. Cf. United States v. Gray, 611 F.2d

194, 197 (7th Cir. 1979), cert. denied, 446 U.S. 911 (1980)

(declining review where factual basis for constitutional

claims not before district court).

The record does not support the contention that the

notes would have been producible under the Jencks Act.

App. 21

That Act would require production in this case only if

the notes were a substantially verbatim transcript of

Shurman’s remarks, or were his own written statements

adopted or approved by him. 18 U.S.C. § 3500(e). If

anything, the record indicates that the notes did not fall

within either category, and thus there was no error under

the Jencks Act in defendants’ failure to obtain the notes.

B. Starnes argues that he was denied the effective

assistance of counsel. The only evidence of ineffective

assistance to which he directs our attention is his counsel’s

jocular comment outside the presence of the jury during

an instruction conference that Starnes’s defense was

‘*temporary insanity.’’

While Starnes is correct that loyalty and respect must

underlie the attorney’s relationship to his or her client,

there is no indication that those qualities were not present

in this case. The offending comment apparently was made

to ease the course of a lengthy discussion on the propriety

of certain jury instructions. It does not represent such an

‘utter perversion of the attorney-client relationship’’ that

we need not consider counsel’s actual trial performance.

Messelt v. Alabama, 595 F.2d 247, 251 (5th Cir. 1979) (at-

tempt by counsel to have additional charges brought

against his client ‘‘in an effort to gain more leverage in

collecting his fees’’).

The record taken as a whole does not indicate that

Starnes’ counsel lacked the experience or ability to

adequately represent Starnes so as to fail to meet the

‘‘minimum standard of professional representation.’’

United States ex rel. Williams v. Twomey, 510 F.2d 634,

641 (7th Cir. 1975), cert. denied sub nom., Sielaff v.

Williams, 423 U.S. 876 (1976); United States v. Chaussee,

536 F.2d 637 (7th Cir. 1976). To the contrary, the rec-

ord shows that counsel conducted deft examination of

the witnesses, was attentive to and took successful ad-

vantage of opportunities to object to the admission of

damaging evidence, and presented the facts favoring his

client in a thorough and professional manner during

App. 22

opening statements and closing arguments. His state-

ment during the instructions conference does not justify

a finding that Starnes did not have the effective assistance

of counsel at trial.

C. Defendants argue that the district judge’s inquiry

about the possibility of defendants’ pleading guilty de-

prived them of a fair trial. The judge’s comments were

made out of hearing of the jury during a discussion of

the admissibility of certain evidence. The claim of preju-

dice is without merit.

The district judge’s first comment as to the possibility

of a plea, to which he did not receive a clear reply, was

directed at determining whether or not an extensive voir

dire of Shurman would be necessary on the subject of

payments made to him by Roland. The evidence was to

apply to Roland on Count II of the indictment, which did

not name Starnes. Shurman himself had not pleaded

guilty on that Count, although he had pleaded guilty on

Count I.

Judge Foreman was concerned that the evidence, which

could be prejudicial to both Starnes and Shurman, should

not be presented if a plea was in the offing. Nothing in the

trial record or argument on appeal suggests that Judge

Foreman was expressing a view on Roland’s and Starnes’s

guilt.

Shortly after his first question regarding pleas (two

pages later in the trial transcript and still out of the jury’s

hearing), Judge Foreman again asked whether a plea was

likely. This was not unreasonable, since counsel had not

answered him the first time and the evidentiary question

had been only tentatively resolved.

While it is true that a judge’s attitudes may have

subtle as well as overt influence upon a jury, the record

does not indicate the possibility of either sort of influ-

ence to the prejudice of defendants. Judge Foreman’s

remarks were made out of the jury’s hearing, and the

record indicates that his rulings throughout the trial

were even-handed and solicitous of defendants’ rights.

App. 23

Thus, the case before us is unlike United States v. Dellin-

ger, 472 F.2d 340, 386-89 (7th Cir. 1972), cert. denied, 410

U.S. 970 (1973), cited by defendants, where the judge’s

prejudicial comments were made before the jury, pervaded

the trial, and were reflected in less than even-handed evi-

dentiary and other rulings. Compare Bollenbach v. United

States, 326 U.S. 607 (1946) (broad hints to jury, clearly

prejudicial to the defendant, that they must quickly return

a verdict rather than remain deadlocked).

AFFIRMED.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circt..t

App. 24

APPENDIX 0

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

April 21, 1981.

Before

Hon. Walter J. Cummings, Circuit Judge

-- Hon. Harlington Wood, Jr., Circuit Judge

Hon. William J. Campbell, Senior District Judge*

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

Nos. 80-1437, 80-1438 vs.

NOBLE R. STARNES and CLIFFORD ROLAND,

Defendants-Appellants.

Appeal from the United States District Court for the

Eastern District of Illinois, Benton Division.

No. 78-Cr-02018

James L. Foreman, Judge.

ORDER

On consideration of the petitions for rehearing and sug-

gestion for rehearing in banc filed in the above-entitled

cause by counsel for the defendants-appellants Noble R.

Starnes and Clifford Roland, 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,

IT IS ORDERED that the aforesaid petitions for re-

hearing be, and the same are hereby, DENIED.

* Honorable William J. Campbell, Senior District Judge of the

Northern District of Illinois, is sitting by designation.