U.S. v. Antico

• Citation: 275 F.3d 245
• Decision Date: 05 April 2001
• Docket Number: No. 00-1446,00-1446
• Parties: (3rd Cir. 2001) UNITED STATES OF AMERICA, v. FRANK ANTICO, APPELLANT. Argued:
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 245

275 F.3d 245 (3rd Cir. 2001)

UNITED STATES OF AMERICA, v. FRANK ANTICO, APPELLANT.

No. 00-1446

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued: April 5, 2001

November 28, 2001

On Appeal From the United States District Court For the Eastern District of Pennsylvania (D.C. Crim. No. 98-242-01) District Judge: Honorable Jan E. DuBois

[Copyrighted Material Omitted] Thomas Colas Carroll, Esquire (Argued), and Mark E. Cedrone, Esquire Carroll & Cedrone Suite 940 Public Ledger Building 150 S. Independence Mall West 6th and Chestnut Streets Philadelphia, PA 19106, for Appellant, Frank Antico, Sr. Michael R. Stiles, Esquire United States Attorney, Eastern District of Pennsylvania. Robert E. Courtney, Esquire Assistant United States Attorney Chief, Organized Crime Division, Walter S. Batty, Jr., Esquire Assistant United States Attorney, and Richard P. Barrett, Esquire (Argued) Assistant United States Attorney 615 Chestnut Street, Suite 1250 Philadelphia, PA 19106, for Appellee, United States of America.

Before: Scirica, Ambro And GIBSON^* Circuit Judges

OPINION OF THE COURT

Ambro, Circuit Judge

Frank Antico, Sr. ("Antico") appeals his conviction and sentence in the United States District Court for the Eastern District of Pennsylvania ("District Court") on one count of racketeering in violation of 18 U.S.C. S 1962(c)--part of the Racketeer Influenced and Corrupt Organizations Act ("RICO"),¹ nine substantive counts of extortion in violation of 18 U.S.C. S 1951 (known as the Hobbs Act), and eight substantive counts of wire fraud in violation of 18 U.S.C. S 1343.

On appeal, Antico asserts that he is entitled to a new trial for three reasons: (1) the District Court's failure to instruct the jury, during its charge on Hobbs Act extortion, of the necessity of finding an inducement or a quid pro quo; (2) the failure of the Government to prove a scheme to defraud the citizens of Philadelphia of their intangible right to his honest services; and (3) the insufficiency of the District Court's jury instruction on materiality as an element of wire fraud. We reject these allegations of error and affirm Antico's conviction on Counts One through Sixteen of the superseding indictment.

Antico also argues that his conviction of wire fraud on Counts Seventeen and Eighteen, which involve his securing permits for a prostitution business after he left the City of Philadelphia's Department of Licenses and Inspections, should be reversed as a result of the Supreme Court's ruling in Cleveland v. United States, 531 U.S. 12 (2000), that such a permit does not constitute property within the meaning of the wire fraud statute. We agree, and reverse Antico's conviction on these counts.

Finally, Antico challenges the District Court's enhancement of his sentence for a leadership role in an otherwise extensive criminal extortion activity and its loss computation on the wire fraud counts. In light of our reversal of conviction on two of the wire fraud counts, and for other reasons stated in this opinion, we vacate Antico's sentence and remand to the District Court for resentencing.

I. Factual and Procedural Background

Antico's indiscretions, which we summarize in this section, expose a pervasive abuse of government services. In the following recitation of the schemes on which Antico's conviction was based, we construe the facts in the light most favorable to the Government, as we must following the jury's guilty verdict. Glasser v. United States, 315 U.S. 60, 80 (1942).

Between 1983 and January, 1996, Antico held various positions at the Department of Licenses and Inspections ("L&I") for the City of Philadelphia (the "City"). L&I's function is to administer and enforce the City's code requirements, including building, electrical, fire, health, housing, business, and zoning regulations. Officials of L&I are empowered to issue zoning and use permits and licenses according to a first-come-first-served policy, conduct inspections, and enforce applicable codes and regulations through citations and cease and desist orders. Persons aggrieved by these decisions may appeal to the Zoning Board of Adjustment ("ZBA"). Antico worked at L&I at various times as a Zoning Examiner, a Code Administrator, and the Business Regulatory Enforcement Director. In these positions, he had the discretionary authority to approve zoning and use permits and licenses, and to cite and close businesses for violations of the City's ordinances and the laws of Pennsylvania, particularly those governing adult cabarets and topless bars. The extortion and wire fraud schemes that Antico concocted while he was a public official at L&I and after he left its employ are detailed below.

A. Extortion Schemes -- RICO Acts 1-13, 15, 16 and Extortion Counts 2-10

1. Extortion of Westside Check Cashing

On December 22, 1994, L&I closed for zoning violations one of Westside Check Cashing's stores, located at 5th and Lehigh Avenues in Philadelphia. The controller of the check cashing business met with Antico the next day to discuss reopening the business. Antico explained that Westside had to file a new application for a zoning and/or use registration permit and make other changes.

Several days later, Antico called the controller and the owner of the business and told them he wanted a piece of jewelry to give to his wife for their anniversary. They selected some items, including a diamond pendant appraised at $3,275, and sent them to Antico's office by courier. The owner and his controller testified that they decided to send the jewelry to Antico and not bill him for it because of Antico's position with L&I. The zoning issue that led to the store closing on December 22 was still pending and they were concerned that Antico would use his position with L&I to keep the business closed. They understood from their conversation with Antico that he did not intend, nor did he ever offer, to pay for the jewelry. Once the conditions of the permit were satisfied, Antico permitted the store to reopen.

2. Extortion of Maureen McCausland²

Maureen McCausland met Antico in 1983 when Antico was working in L&I's zoning section. McCausland approached Antico to obtain a zoning and/or use permit registration for a prostitution business at 2132 Market Street in Philadelphia. Her zoning application read "nude modeling studio" and Antico advised her instead to call the business a "modeling studio" on the application. McCausland did so, and she received the license. She later paid Antico $500 for getting the permit for her.

This began a pattern of Antico receiving payments from McCausland for approval of zoning and/or use registration permits for a number of other prostitution businesses she opened over the years. She paid Antico $500 when she applied for the permit and $500 when she received it. McCausland also paid Antico additional sums of money and had sex with him so that he would use his position at L&I to protect her business. For example, when Antico was placed in charge of enforcement, he alerted her to the police department's efforts to close her business. McCausland estimated that Antico extorted approximately $8,000 from her during the period covered by the superseding indictment.

McCausland's testimony was corroborated by the applications for zoning and use registration permits introduced into evidence. These applications were prepared by Antico and listed the use as "modeling studio" or "physical therapy."

3. Extortion of Adult Cabarets in Philadelphia-- Wizzards, Pin Ups, Tattletales and Teazers

Between 1993 and 1995, Antico served as the Business Regulatory Enforcement Director for L&I, supervising the unit that enforced compliance with the zoning code. Most pertinent to this scheme, Antico was responsible for regulating adult cabarets and their compliance with the zoning code.

The Philadelphia Code defines an adult cabaret as"[a]n adult club, restaurant, theater, hall or similar place which features topless dancers, go-go dancers, exotic dancers, strippers, male or female impersonators or similar entertainers exhibiting specified anatomical areas or performing specified sexual activities." Philadelphia Code S 14-1605. A business that meets this definition is considered a regulated use and is prohibited from operating within 1,000 feet of another regulated use or within 500 feet of a residential area. According to L&I policies, all adult cabarets are required to be licensed or to receive a variance from the ZBA. In addition, the dancers at a licensed cabaret (or a cabaret permitted to operate as such while it sought a license) cannot perform in a lewd or obscene manner.³

a. Wizzards

The scheme with respect to Antico's extortion of Wizzards began with John Messina, John Meehan, and Frank Antico, Jr. (Antico's son) forming Pan Enterprises, Inc. to operate Wizzards, an adult cabaret located at 38th and Chestnut Streets in Philadelphia. Initially, Messina provided the start-up money and held 89% of the corporation. Messina gave 10% and the manager position to Meehan because of his experience in operating topless clubs. Meehan, in turn, introduced Messina to Antico, Jr.

Meehan and Antico, Jr. told Messina that if Antico, Jr. received a 1% interest in Pan Enterprises and a position as a weekend manager, defendant Antico would use his position with L&I to help Wizzards operate. Messina agreed to this arrangement and to paying Meehan and Antico, Jr. part of their weekly salaries in cash without reporting it to the taxing authorities.

Antico guided Wizzards through the permitting and licensing process at L&I. In addition, when Wizzards opened for business on September 23, 1993, Antico arranged to have two competing clubs shut down for code violations. After Wizzards opened, Antico frequented the club and received complimentary drinks, food, and parties for himself and his friends. While Antico was present, the dancers violated the code restrictions on lewd dancing, yet Antico...