Opposition Brief — Vulpis v. United States

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Nos. 91-1619 and 91-1620

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In the Supreme Court of the Ane

OCTOBER TERM, 1991

ANTHONY VULPIS, ET AL., PETITIONERS

v.

UNITED STATES OF AMERICA

ANGELO PACCIONE, ET AL., PETITIONERS

v.

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

KENNETH W. STARR

Solicitor General

ROBERT S. MUELLER, III

Assistant Attorney General

RICHARD A. FREIDMAN

Attorney

Department of Justice

Washington, D.C. 20530

QUESTIONS PRESENTED

1. Whether petitioners were denied a fair trial by the

use of an anonymous jury.

2. Whether petitioners’ fraud involved the obtaining of

money or property within the scope of the mail fraud

statute, 18 U.S.C. 1341.

3. Whether the district court erred by admitting cer-

tain evidence pursuant to Fed. R. Evid. 404(b).

4. Whether the district court correctly determined pe-

titioner Vulpis’s sentence under the Sentencing Guide-

lines.

TABLE OF CONTENTS

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TABLE OF AUTHORITIES

Cases:

Fisher v. United States, 474 U.S. 819 (1985) ............00..00. 11

John Doe Corp., In re, 675 F.2d 482 (2d Cir. 1982) .......... 12

McNally v. United States, 483 U.S. 350 (1987) .....00.00...... 8, 13

Persico v. United States, 486 U.S. 1022 (1988) ................ 11

Sealed Case, In re, 832 F.2d 1268 (D.C. Cir. 1987) ........... 12

Toulabi v. United States, 875 F.2d 122 (7th Cir. 1989) .... 14

Tutino v. United States, 493 U.S. 1081 (1990) ............. uae 11

United States v. Allen, 930 F.2d 1270 (7th Cir. 1991) ...... 15

United States v. Ayers, 924 F.2d 1468 (9th Cir. 1991) ..... 15

United States v. Burk, 912 F.2d 225 (8th Cir. 1990) ........ 15

United States v. Dray, 901 F.2d 1132 (1st Cir.), cert.

I BEE OR Gree BU CRUIOD sececncecesccssceceacossncasesesacsseescs 13

United States v. Evans, 844 F.2d 36 (2d Cir. 1988) ......... 14

United States v. Geer, 923 F.2d 892 (1st Cir. 1991) .......... 15

United States v. Gelb, 881 F.2d 1155 (2d Cir.), cert.

SS MI RPE, PE CRUIIUED occ ccscnsinscvsasccseccsnsssseseccosecvecs 13

United States v. Helmsley, 941 F.2d 71 (2d Cir. 1991) ..... 13

United States v. Maldonado-Rivera, 922 F.2d 934 (2d

Cir. 1990), cert. denied, 111 S. Ct. 2858 (1991) .............. 11

United States v. Novod, 923 F.2d 970 (2d Cir. 1991) ....... 9

United States v. Persico, 832 F.2d 705 (2d Cir. 1987),

cert. denied, 486 U.S. 1022 (1988) .....................cseccceeeess 7

United States v. Porcelli, 865 F.2d 1352 (2d Cir.), cert.

denied, 493 U.S. 810 (1989) .............cccccccccosscscsscceccescsecee 13

(III)

ell

IV

Cases—Continued:

United States v. Scarfo, 850 F.2d 1015 (3d Cir.), cert.

I, re rai Ie IE wrcccccntnncecivconcouvcnccnscusoarsnccassuscns

United States v. Schwartz, 924 F.2d 410 (2d Cir. 1991) ..

United States v. Sells Engineering, Inc., 463 U.S. 418

TUE shlisusaaincadscandundamsdesaitadasapumutavaiasdieitentaokiidetamiassoakes

United States v. Thomas, 757 F.2d 1359 (2d Cir.), cert.

I, Ee Art CH ED Sse deceenddeeesoonstanacrctencccveaisenesss

United States v. Tutino, 883 F.2d 1125 (2d Cir. 1989),

cert. denied, 493 U.S. 1081 (1990) .......... cece eects eens

United States v. Vario, 943 F.2d 236 (2d Cir. 1991), cert.

Gee, TER TB, CE; GEE CIID vccscsncccnccssxivncnesesscevsvacsssvacss

Statutes, regulations and rule:

Racketeer Influenced and Corrupt Organizations Act, 18

U.S.C. 1961 et seq.:

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1]

In the Supreme Court of the Giuted States

OCTOBER TERM, 1991

No. 91-1619

ANTHONY VULPIS, ET AL., PETITIONERS

Vv.

UNITED STATES OF AMERICA

No. 91-1620

ANGELO PACCIONE, ET AL., PETITIONERS

v.

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. Al-

A60)! is reported at 949 F.2d 1183. The opinions of the

district court denying a motion to dismiss the

| References to “Pet. App.” are to the appendix to the peti-

tion in No. 91-1619.

(1)

2

indictment (Pet. App. B1-B79), denying a motion for

judgment of acquittal (Pet. App. C1-C76), and regard-

ing sentencing (Pet. App. D1-D22) are reported at 738

F. Supp. 691, 749 F. Supp. 784, and 751 F. Supp. 368,

respectively.

JURISDICTION

The judgment of the court of appeals was entered on

November 15, 1991. A petition for rehearing was de-

nied on January 10, 1992. Pet. App. E1-E2. The peti-

tions for a writ of certiorari were filed on April 9,

1992. The jurisdiction of this Court is invoked under

28 U.S.C. 1254(1).

STATEMENT

After a jury trial in the United States District

Court for the Southern District of New York, peti-

tioners were convicted of participating and conspiring

to participate in the conduct of the affairs of an

enterprise through a pattern of racketeering activity

(Counts 1-2), in violation of the Racketeer Influenced

and Corrupt Organizations Act (RICO) statute, 18

U.S.C. 1962(c) and (d), and five counts of mail fraud

(Counts 5-9), in violation of 18 U.S.C. 1341. Petitioner

Paccione also was convicted of an additional mail

fraud offense (Count 12). Petitioners Vulpis and Pac-

cione were each sentenced to 151 months’ imprison-

ment to be followed by three years’ supervised

release. With respect to forfeitures, fines, and res-

titution, petitioners entered into a court-approved

agreement to pay the government $22 million. Pet.

App. A13-A15.

1. During 1988, Vulpis and Paccione controlled

much of the private trash carting business in the New

York City boroughs of Brooklyn and Queens. Pac-

cione was the president and majority shareholder of

petitioners August Recycling, Inc., National Carting,

I i ia i i i i lg Sd

3

Inc., and Stage Carting, Inc. Vulpis owned 50% of

petitioners Rosedale Carting, Inc., and Vulpis Broth-

ers, Ltd. Together, those entities had an income of

approximately $23 million per year. Between May and

September 1988, petitioners illegally operated a full-

scale commercial dump on a 110-acre site called

Arlington Yard on Staten Island, 72 acres of which

belonged to CSX Realty Corporation (CSX). Al-

though CSX had not given petitioners permission to

use its land, trucks filled with rotting garbage,

construction and demolition debris, medical waste,

and asbestos dumped their loads into recently exca-

vated pits at the site. When the pits were filled, more

waste was heaped on, creating a plateau 20-30 feet

high. The mound was then covered with a thin layer

of the “clean” dirt that had been excavated to create

the pits, so that the dump appeared to consist entirely

of clean fill.2 Pet. App. A4-A7.

In June 1988, Paccione wrote to CSX, falsely reas-

suring it that no dumping was occurring on CSX

land. Later, petitioners ignored an injunction ob-

tained by CSX to halt the dumping. In July 1988, in-

spectors of the New York City Department of Sanita-

tion (CDOS) found garbage in petitioners’ dump.

Petitioners falsely assured the CDOS inspectors that

the dump did not contain any prohibited waste and

that a comprehensive sampling protocol was being

followed. By dumping garbage at the Arlington Yard

site, petitioners violated the requirement that all

waste other than clean fill that is disposed of within

New York City be dumped at a City-owned landfill.

They also avoided the payment of fees to the City for

2 Clean fill consists of earth, ashes, dirt, concrete, rock,

gravel, stone, or slag, and may be used to upgrade building

sites. Pet. App. Ad.

4

dumping each cubic yard of waste. Before the

Arlington Yard dump was shut down by the New York

State Department of Environment Conservation

(SDEC), petitioners illegally dumped at least 550,000

cubic yards of refuse and thereby avoided paying the

City some $4,625,000 in dumping fees. Pet. App. A5-

AQ.

Petitioner A&A realized approximately $2.6 million

of income from the fees it charged to companies to

dump their garbage. Paccione received $315,610 from

those fees; Vulpis received $286,728. CSX’s property,

which had an estimated value of $20 million for resi-

dential development before petitioners’ crimes, lost

its potential for that use and required a clean-up

costing an estimated $15 million. Pet. App. A9.

During approximately the same period, petitioners

and others engaged in an unlawful scheme with

respect to the disposal of infectious medical waste.

They established a company called New York Envi-

ronmental Contractors, Inc., which advertised itself,

through the mail and otherwise, as being properly li-

censed, ethically motivated, and fully competent to

engage in the heavily regulated disposal of infectious

medical waste. In fact, the company operated on

permits that were bogus or obtained by forgery and

fraud. It unlawfully stored, transported, and disposed

of medical waste, subjecting the persons who gener-

ated that waste to legal sanctions under New York’s

regulatory scheme for medical-waste disposal. Sev-

eral of those persons or entities were required to pay

civil penalties for the unlawful disposal of medical

waste. The company also defrauded its customers of

the substantial disposal fees charged by petitioners to

dispose of their medical waste. Pet. App. A9-A13.

2. a. On the government’s motion, the court im-

posed procedures designed to secure the anonymity of

5

the jury empaneled to hear the case. The court

limited voir dire to prevent disclosure of the names,

home addresses, and places of employment of the

jurors. It also required, during trial, that the jurors

be kept together during lunch recesses and accompa-

nied by a United States Marshal. At the end of each

trial day, the jurors were taken to an undisclosed

central location from which they could go home.

Petitioners consented to most of those procedures on

the condition that the jurors be carefully instructed

that the procedures were intended to protect them

against intrusion by the media, but they objected that

the nondisclosure of the jurors’ names and employers

would deprive them of a fair trial. Pet. App. A16-A17.

b. During trial, Vulpis’s principal defense was that

he had no intention to operate the Arlington Yard

dump illegally and that any illegal dumping at the site

was due to accident or mistake. In its rebuttal case,

the government sought to show that Vulpis was

aware of the illegality of his operation. Over Vulpis’s

objection, the government was allowed to introduce

evidence that Vulpis offered SDEC officers bribes for

them not to close the facility. SDEC officer Baker

testified that when he told Vulpis that he was operat-

ing illegally and risked penalties of $25,000 per day,

Vulpis responded, “I’m losing $75,000 a day every day

the place is closed. How about $100,000, you just go

away.” Similarly, SDEC officer Milewski testified

that on the same day Vulpis told him he was “losing

approximately $80,000, and how about $50,000.” Pet.

App. A33.

ec. On October 3, 1990, the district court sentenced

Paccione and Vulpis to 151-month terms of imprison-

ment. In calculating the applicable sentencing range,

the district court applied Sentencing Guidelines

§ 2Q1.2, which deals with environmental offenses, to

6

find an offense level of 26. The court also used the

multiple-count rules found in Guidelines § 3D1.2 to

increase the offense level by two levels to 28. Pet.

App. D10-D14. Alternatively, the district court found

that the provision of the Guidelines for mail fraud,

Sentencing Guidelines § 2F1.1, did not adequately

take into account the massive environmental harm

caused by petitioners’ scheme to defraud and that an

upward departure from the mail fraud Guidelines

offense level, to reach offense level 28, would be

justified under the circumstances. Pet. App. D10 n.4.

The district court then further departed upward

from level 28 by four levels: it increased the sentenc-

ing range by two levels based on the combination of

ingredients of more than minimal planning, multiple

victims of the scheme to defraud, and violation of a

court order; and it increased the sentencing range by

another two levels after finding that petitioners

entered into a forfeiture agreement without any

intention of making payment.’ Pet. App. D16-D19.

The resulting offense level of 32 yielded a sentencing

range of 121-151 months. 7d. at D19. The district

court sentenced Paccione and Vulpis at the top of that

range due to “the tremendous harm [that they] caused

8 After the case was submitted to the jury but before the

verdict, the parties entered into a forfeiture agreement. That

agreement removed from the jury any issue of RICO forfeiture

and provided that Paccione, Vulpis, and the corporate petition-

ers, if convicted of the RICO offenses, would be jointly and

severally liable to the government for $22 million, in satisfac-

tion of forfeiture, court-imposed fines, and restitution. The

agreement established a periodic payment schedule and re-

quired payment in full within 90 days. The agreement was

approved by the district court on the same day as the jury’s

verdicts of conviction, June 8, 1990. Petitioners made none of

the payments required under that agreement. Pet. App. D59-

D638.

7

to both individuals, agencies and our environment.”

Id, at D21.

3. The court of appeals affirmed. Pet. App. A1-A60.

First, the court rejected petitioners’ argument that

the use of an anonymous jury deprived them of a fair

trial. Relying on extensive Second Circuit precedent

dealing with the use of anonymous juries, the court

stated that a district court “should not order the

empaneling of an anonymous jury without (a) con-

cluding that there is strong reason to believe the jury

needs protection, and (b) taking reasonable precau-

tions to minimize any prejudicial effects on the

defendant and to ensure that his fundamental rights

are protected.” Jd. at A17, citing United States v.

Tutino, 883 F.2d 1125, 1132 (2d Cir. 1989), cert. denied,

493 U.S. 1081 (1990); United States v. Persico, 832

F.2d 705, 717-718 (2d Cir. 1987), cert. denied, 486 U.S.

1022 (1988); United States v. Thomas, 757 F.2d 1359,

1365 (2d Cir.), cert. denied, 474 U.S. 819 (1985). The

court of appeals found that those standards were met

here. Pet. App. A18-A20.

As to the need for anonymity, the court of appeals

determined that the government’s submissions were

sufficient to justify the district court’s conclusion

that the jurors’ identities should be protected against

disclosure. The government had submitted an affir-

mation stating that Fred E. Weiss, an owner of a

portion of the Arlington Yard property and a co-de-

fendant in this case, had been murdered in circum-

stances that strongly suggested a connection to the

indictment and to certain of the petitioners. More-

over, the government submitted in camera informa-

tion from a confidential reliable source that Paccione

was a “made” member of the Gambino Crime Family,

that Vulpis had strong ties to organized crime, that

various persons had been threatened by Vulpis and

8

his associates, and that a government witness had

received a middle-of-the-night anonymous telephone

call telling him that he would be safe so long as he

“remembered nothing.” Pet. App. A18-A19.

As to the precautions taken to avoid prejudice, the

court of appeals noted that petitioners did not ques-

tion the adequacy of the voir dire in the selection of

the jury. Pet. App. A19. The court also found that the

explanation given to the jury for the procedures—to

avoid media attention—prevented prejudice to peti-

tioners. Jd. at Al9-A20. Moreover, although some

jurors were concerned about possible threats by

petitioners, the court observed that the combination

of verdicts of acquittal and conviction after long

deliberation “strongly indicates that those measures

did not induce any lack of objectivity.” Jd. at A20.

Second, the court of appeals rejected petitioners’

argument that the mail fraud counts failed to charge a

scheme for “obtaining money or property” within the

meaning of the mail fraud statute, 18 U.S.C. 1341.

Pet. App. A20-A29. Applying the rule of McNally v.

United States, 483 U.S. 350, 360 (1987), that Section

1341 is “limited in scope to the protection of property

rights,” the court found a clear allegation and proof of

the deprivation of property to support each of the mail

fraud convictions. The court explained that Counts 5-

7 involved petitioners’ scheme to defraud New York

City of “revenues from licensing fees and dumping

fees to be derived from the lawful disposal of waste

materials at the City-owned landfill,” Pet. App. A24;

Counts 8 and 9 charged petitioners with a scheme to

defraud CSX of the value of its Arlington Yard prop-

erty, id. at A25-A26; and Count 12 charged petitioners

with defrauding doctors of the high fees they paid

9

petitioners for disposal of their infectious medical

waste, id. at A26-A29.4

Third, the court of appeals rejected Vulpis’s claim

that the district court erred in admitting, during the

government’s rebuttal case, evidence that Vulpis had

offered SDEC officers bribes. The court held that

Vulpis’s attempt to bribe a law enforcement official

was relevant to rebut his defense that he did not

intend the Arlington Yard operations to violate the

law and that the dumping operation was a result of

accident or mistake. The court found no abuse of

discretion in the district court’s weighing of the

prejudice and relevance of that evidence under Fed. R.

Evid. 404(b). Pet. App. A82-A35.

Finally, the court of appeals upheld the 151-month

sentences of incarceration imposed on petitioners

Vulpis and Paccione. Pet. App. A40-A60. The court

noted that the question whether the district court

should have applied the Sentencing Guidelines provi-

sion applicable to fraud or that applicable to environ-

mental offenses was complicated by apparently

conflicting directions within the Guidelines and

4 With respect to one of the mail fraud offenses charged as a

predicate act in the RICO counts, the court of appeals found

that the allegations and proof failed to encompass conduct

within the mail fraud statute. Pet. App. A30-A31. That act

alleged that petitioners sought to defraud the State of a license

to transport medical waste. The court noted that Second Cir-

cuit precedents held that a license is not “property” within the

scope of the mail fraud statute. /d. at A30; see United States v.

Schwartz, 924 F.2d 410, 417 (2d Cir. 1991); United States v.

Novod, 923 F.2d 970, 973 (2d Cir. 1991). Although that predi-

cate act was invalid, the court held that its invalidity did not

require reversal of the RICO convictions. The jury’s special

verdict showed that only Paccione was found to have commit-

ted that predicate act, and he was found to have committed

eight other valid predicate acts. Pet. App. A80-A31.

10

changes to the Guidelines since the 1988 version that

was in effect on the date of petitioners’ offenses. Pet.

App. A43-A47. The court found it unnecessary to

decide that question, however, because it upheld the

district court’s alternative rationale that, even if the

fraud provision were applicable, the district court

would depart upward to reach the same offense level

as achieved by applying the environmental crimes

provision. /d. at A47. Likewise, while the court of

appeals suggested that it agreed with petitioners’

contention that the district court improperly applied

the multiple-count rules to reach a base offense level

of 28, the court again upheld the district court’s al-

ternative rationale that it would have departed

upward to the same level. Jd. at A47-A48.°

ARGUMENT

1. Petitioners contend (91-1620 Pet. 6-22) that the

court of appeals improperly upheld the district court’s

decision to empanel an anonymous jury. They assert

that the factual basis underlying the district court’s

order was inadequate and that the procedure “bur-

dened the presumption of innocence” (91-1620 Pet. 12).

That claim does not warrant this Court’s review.

As petitioners acknowledge, an anonymous jury is

permissible in cases. in which there is a sufficient

showing that the defendants may interfere with the

jury’s free deliberations. See 91-1620 Pet. 9-10. The

standards to be applied in reviewing a trial court

order empaneling an anonymous jury are well settled.

As the court of appeals explained, an anonymous jury

* The court of appeals also upheld the district court’s two-

level upward departure based on petitioners’ entry into the

forfeiture agreement with no intention of making the required

payment, which the district court properly analogized to ob-

struction of justice. Pet. App. A48-A60.

1]

ordinarily should not be empaneled unless “there is

strong reason to believe the jury needs protection”

and procedures are employed to minimize any risk of

prejudice to the defendant. Pet. App. A17 (citing

cases); see also United States v. Vario, 943 F.2d 236,

239-242 (2d Cir. 1991), cert. denied, 112 S. Ct. 882

(1992); United States v. Maldonado-Rivera, 922 F.2d

934, 971 (2d Cir. 1990), cert. denied, 111 S. Ct. 2858

(1991); United States v. Scarfo, 850 F.2d 1015, 1021-

1026 (3d Cir.), cert. denied, 488 U.S. 910 (1988). Peti-

tioners do not contend that there is a conflict among

the circuits with respect to those standards. Rather,

they suggest (91-1620 Pet. 21-22) that this Court

should grant review to clarify the standards for

empaneling an anonymous jury. This Court has re-

peatedly denied certiorari in cases involving that

issue,® and there is no reason for a different result

here.

Nor did the court of appeals misapply the governing

standards. The court correctly held that the district

court had strong reason to believe that the jury

needed protection.*? The government provided infor-

mation indicating that petitioners were involved in

the murder of one of the participants in the offenses,

that a government witness had been threatened to

® See, e.g., Tutino v. United States, 493 U.S. 1081 (1990):

Persico v. United States, 486 U.S. 1022 (1988); Fisher v.

United States, 474 U.S. 819 (1985).

’ Petitioners quarrel with that conclusion (91-1620 Pet. 14-

16), but cite no authority indicating that the matters presented

to the district court were insufficient to justify an anonymous

jury. Moreover, the very things that petitioners say would

warrant an anonymous jury—allegations of witness tampering,

participation in a violent criminal organization, participation in

violent crime (91-1620 Pet. 20)—were present here. See Pet.

App. A18-A19.

12

prevent him from testifying truthfully, and that

Vulpis and his associates had been involved in various

instances of threatening activity associated with the

case. Pet. App. Al9. Petitioners err in contending

(91-1620 Pet. 16-19) that it was improper for the dis-

trict court to rely on an affidavit submitted by the

government in camera. The need to protect grand

jury secrecy, see United States v. Sells Engineer-

ing, Inc., 463 U.S. 418, 424-425 (1983), justifies the use

of that process. Cf. In re Sealed Case, 832 F.2d 1268,

1274 (D.C. Cir. 1987); In re John Doe Corp., 675 F.2d

482, 490 (2d Cir. 1982).

Moreover, as the court of appeals explained, the

district court crafted procedures to minimize the risk

of prejudice. The court conducted voir dire of the

jurors, the adequacy of which petitioners have never

challenged. The court also informed the jury that the

precautions taken to conceal the jurors’ identities and

addresses were for the purpose of insulating them

from media attention. In light of those precautions,

petitioners have failed to show that the anonymous

jury technique burdened the presumption of inno-

cence.®

2. Petitioners claim (91-1619 Pet. 24-38; 91-1620

Pet. 22-35) that the mail fraud offenses of which they

were convicted did not involve the obtaining of

“money or property” within the meaning of 18 U.S.C.

1341. Their principal argument is that, since there

was no law requiring them to dump their garbage in

New York City, the government failed to prove that

the City was deprived of revenue from their operation

® As the court of appeals noted, the jurors actually acquitted

petitioners on particular counts, thus confirming that the

jury’s “objectivity” was not compromised by their anonymity.

Pet. App. A20.

13

of an illegal dump on Staten Island. Petitioners’ claim

is without merit.

In McNally v. United States, 483 U.S. 350 (1987),

this Court held that the “money or property” lan-

guage of the mail fraud statute does not encompass a

scheme to deprive the citizenry of honest govern-

ment. Since McNally, numerous courts have held

that a scheme to deprive a government of revenue

comes within the “money or property” limitation of

the statute. See, e.g., United States v. Helmsley, 941

F.2d 71, 94 (2d Cir. 1991) (scheme to deprive State of

income taxes), cert. denied, 112 S. Ct. 1162 (1992);

United States v. Dray, 901 F.2d 1132, 1141-1142 (1st

Cir.) (scheme to evade required fees for municipal

building permits), cert. denied, 111 S. Ct. 245 (1990);

United States v. Porcelli, 865 F.2d 1352, 13859-1362 (2d

Cir.) (same re state sales taxes), cert. denied, 493 U.S.

810 (1989); United States v. Gelb, 881 F.2d 1155, 1162

(2d Cir.) (same re postal revenue from mass mailings),

cert. denied, 493 U.S. 994 (1989).

Contrary to.petitioners’ suggestion, their actions

deprived the City of revenue even though, as a theo-

retical matter, they could conceivably have dumped

their refuse outside of New York City and thereby

avoided paying any municipal fees. Petitioners did not

dump their refuse outside the City. Their scheme en-

tailed dumping on land within the City. Having done

So, petitioners were required to pay the City revenue

by dumping in the City’s own landfill. As the court of

appeals observed, Pet. App. A25, the evidence showed

that the City’s revenues at its landfill “declined

® Moreover, in response to McNally, Congress amended the

mail fraud statute to encompass schemes “to deprive another of

the intangible right of honest services.” 18 U.S.C. 1346. That

amendment considerably reduces the importance of the

“property” issue that petitioners present.

14

precipitously” during the course of petitioners’

illegal operation. It was within the province of the

jury to determine from the evidence that, but for

petitioners’ illegal dumping operation, much of the

garbage illegally dumped at the Arlington Yard

property would have been legally dumped in the City

landfill, thus generating revenue for the City."

Petitioners also argue (91-1620 Pet. 31-34) that the

scheme to defraud customers who paid to dispose of

medical waste and the scheme to defraud CSX of the

value of its land by improperly dumping garbage on it

did not defraud those victims of money or property.

The court of appeals correctly rejected those argu-

ments. The customers who paid to have medical waste

disposed of were clearly defrauded of their money

when petitioners dumped the waste in Arlington

Yard; the customers “did not get what they paid for,”

and were exposed to civil liability for the improper

disposal of medical waste. Pet. App. A29. And, as the

court of appeals noted, the suggestion that CSX was

not defrauded in its property rights when petitioners,

without CSX’s authorization, dumped tons of garbage

on CSX land and caused CSX millions of dollars in

damage, is “frivolous.” Jd. at A26.

0 Petitioners’ suggestion (91-1619 Pet. 36) that the decision

in this case conflicts with United States v. Evans, 844 F.2d 36

(2d Cir. 1988), is misplaced. Evans involved a scheme to

deprive the government of the right to control the transfer of

weapons, which the court of appeals thought was not a

property right. This case, in contrast, involves depriving the

government of revenues. In any event, an intracircuit conflict

with Evans would not warrant this Court’s attention. Nor is

there a conflict with Toulabi v. United States, 875 F.2d 122,

125-126 (7th Cir. 1989), see 91-1620 Pet. 26 n.12, in which the

defendant fraudulently caused the issuance of a taxi license,

but did not deprive the government of fees.

- 15

3. Vulpis argues (91-1619 Pet. 538-43) that the

district court erred by admitting evidence that Vulpis

offered bribes to SDEC officers to prevent them from

taking adverse action. Petitioners assert that the

evidence was ambiguous about whether bribes were

offered, and even the SDEC officers involved were not

clear that an attempt at bribery was being made.

Whatever petitioners’ interpretation of this evidence,

however, the district court did not abuse its broad

discretion in allowing the jury to consider whether

Vulpis was offering a bribe when he said to SDEC

officer Baker, “How about $100,000, you just go

away,” and when he made a similar offer to SDEC

officer Milewski." Pet. App. A33. The admissibility of

such evidence depends on whether its probative value

outweighed its potential for unfair prejudice. /d. at

A52-A34. The factbound question of whether that

balance was properly struck in this case does not

warrant review by this Court.

4. Finally, Vulpis argues (91-1619 Pet. 43-47) that

the district court erred in calculating his offense

level under the Sentencing Guidelines. He reiterates

his claim that the court should not have referred to

the environmental offense Guidelines provision in

determining his offense level.

The court of appeals, however, did not affirm

Vulpis’s sentence by upholding the district court’s

'! A reviewing court will not find error in the admission of

evidence under Fed. R. Evid. 404(b) unless the district court

clearly abuses its discretion. See, e.g., United States v. Allen.

930 F.2d 1270, 1273 (7th Cir. 1991) (“clear abuse”); United

States v. Ayers, 924 F.2d 1468, 1472 (9th Cir. 1991); United

States v. Geer, 923 F.2d 892, 896 (ist Cir. 1991) (court will re-

verse only in “exceptional circumstances”); United States v.

Burk, 912 F.2d 225, 228 (8th Cir. 1990) (court will reverse only

if evidence had “no bearing on any of the issues involved”).

es

16

reference to the environmental offense provision.

Rather, the court of appeals upheld the district

court’s alternative rationale that a departure from

the fraud Guidelines provision was warranted because

the offense level it produced understated the serious-

ness of Vulpis’s offense conduct in a manner not ade-

quately taken into account by the Guidelines. Pet.

App. A47. The determination of the courts below that

a departure was appropriate, which petitioner does

not contest,'2 makes it irrelevant whether the fraud

or environmental sentencing provisions apply to

petitioner. Under either approach, petitioner’s sen-

tence would have been the same. In any event, as the

court of appeals noted, Pet. App. A44-A45, because

pertinent aspects of the Guidelines have been

amended since the time of petitioner’s offense, the

issue of whether the former Guidelines provisions

permitted reference to the environmental offense

provision is of no continuing importance.

'2 Sentencing Guidelines § 5K2.0 provides that the “sen-

tencing court may impose a sentence outside the range estab-

lished by the applicable guideline, if the court finds ‘that there

exists an aggravating * * * circumstance of a kind, or to a de-

gree, not adequately taken into consideration by the Sentenc-

ing Commission in formulating the guidelines that should result

in a sentence different from that described.’ ” In formulating

the punishment for mail fraud, the Guidelines take account of

the value of the monetary loss caused by the scheme to de-

fraud. As the court of appeals explained, however, “there is no

indication that when it formulated punishments for mail fraud,

the Commission took into account the possible causation of

massive environmental damage such as that proven here.” Pet.

App. A47. In those circumstances, the district court did not

abuse its discretion in its departure.

17

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

ROBERT S. MUELLER, III

Assistant Attorney General

RICHARD A. FREIDMAN

Attorney

JUNE 1992