U.S. v. Grzywacz

• Decision Date: 22 August 1979
• Docket Number: Nos. 78-2301,78-2302 and 78-2303,s. 78-2301
• Citation: 603 F.2d 682
• Parties: , 4 Fed. R. Evid. Serv. 1240 UNITED STATES of America, Plaintiff-Appellee, v. Ronald GRZYWACZ, Edward Goclan and Richard Krieshok, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 682

603 F.2d 682

52 A.L.R.Fed. 800, 4 Fed. R. Evid. Serv. 1240

UNITED STATES of America, Plaintiff-Appellee, v. Ronald GRZYWACZ, Edward Goclan and Richard Krieshok Defendants-Appellants.

Nos. 78-2301, 78-2302 and 78-2303.

United States Court of Appeals Seventh Circuit.

Argued May 31, 1979.

Decided Aug. 22, 1979.

Lawrence J. Fleming, St. Louis, Mo., for defendants-appellants.

Thomas W. Turner, Asst. U. S. Atty., Springfield, Ill., for plaintiff-appellee.

Before SWYGERT, GEWIN ^* and SPRECHER, Circuit Judges.

GEWIN, Circuit Judge.

On March 31, 1978 appellants Grzywacz, Krieshok and Goclan, former police officers of Madison, Illinois, were each indicted on one count of conspiring to violate § 1962(c) of the Racketeer Influenced and Corrupt Organizations statute (RICO) in violation of 18 U.S.C. § 1962(d) and one count of making false declarations to a federal grand jury in violation of 18 U.S.C. § 1623. They were tried by a jury and found guilty on all counts. The district court sentenced Grzywacz to 12 years imprisonment on the conspiracy count and 5 years on the perjury charge, the sentences to be served concurrently. Goclan and Krieshok each received 7 year sentences on the conspiracy counts and 5 years imprisonment for perjury, to be served concurrently.

In these consolidated appeals the three appellants assert various alleged errors which they claim warrant a new trial. Finding the contentions to be without merit, we affirm the convictions.

Appellants were alleged to have conspired to violate the RICO statute by conducting and participating in the conduct of an enterprise, the Madison, Illinois Police Department, through a pattern of racketeering activity. ¹ The indictment under which they were charged alleged as the essence of the conspiracy that the officers used their official positions as members of the police department to solicit and accept bribes and sexual favors from business establishments in the city of Madison and Madison County in exchange for acquiescence in and protection of certain illegal activities by the establishments, including prostitution, and operating after closing hours. ² The indictment also charged that appellant Ronald Grzywacz used his relationship with the Madison County sheriff's office to solicit and accept bribes from similar businesses in Madison County.

Prior to trial appellants moved to strike the portions of the indictment referring to those acts occurring outside the city limits of Madison, beyond which the municipal police department had no jurisdiction. They argued that the "Madison County" evidence was irrelevant, prejudicial and without relationship to the conduct of the affairs of the police department alleged in the indictment. The government responded that these activities were part of the overall conspiracy and the court accordingly overruled appellants' motion.

At trial the government adduced substantial evidence relating exclusively to certain acts committed jointly and separately by all three appellants in the city of Madison. This proof, consisting of statements by the appellants and testimony by police officers, operators of business establishments and the Mayor of Madison, indicated that the three officers, with the assistance of tavern owner Jenny Huey, ³ engaged in a pattern of securing monetary payments and sexual favors from city tavern and tow company operators and employees in return for "protection" of certain illegal activities by the businesses. In addition a significant amount of evidence relating to appellant Grzywacz's activities in Madison County was offered and admitted. The evidence tended to show that at the time the three officers were collecting bribes in the city of Madison, Grzywacz in coordination with members of the Madison County sheriff's office was engaged in similar "shakedowns" of tavern operators in the county, outside the Madison police department's jurisdiction. The proof implicated Grzywacz only; none of it showed involvement by Goclan and Krieshok in the solicitation and acceptance of bribes in the county.

At the conclusion of the trial, ⁴ the government tendered an instruction stating that the Madison County evidence could not be considered against Goclan and Krieshok but was admissible as evidence of prior misconduct against Grzywacz to show motive, opportunity, intent, preparation, plan, knowledge, identity or absence of mistake or accident. Contending that the government no longer considered the Madison County activities to be part of the conspiracy, appellants moved to strike all references in the indictment to Madison County and to strike all evidence relating to those activities. They further moved for a mistrial on grounds that the trial court erroneously admitted the evidence. The court struck portions of the indictment relating to the county but denied the motion for mistrial, finding the evidence admissible for the purposes advanced by the government. In his final instructions the trial judge warned the jury that the evidence was to be considered only as to Grzywacz to show motive, intent, plan, opportunity, etc.

As their initial contention on this appeal appellants maintain that they could not be charged with conspiracy under 18 U.S.C. § 1962(d), the RICO statute, because the Madison, Illinois police department is not an "enterprise" within the meaning of 18 U.S.C. § 1961(4). Appellants presented this ground in a pretrial motion to dismiss the conspiracy count but the trial court rejected it.

Section 1962(c) provides that:

It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.

"Enterprise" as used in § 1962(c) is defined in 1961(4) to include:

any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity;

According to appellants, a public entity such as a municipal police department can not constitute an "enterprise engaged in . . . interstate or foreign commerce. . . ." They submit that Congress in enacting the Racketeer Influenced and Corrupt Organizations statute (18 U.S.C. §§ 1961-1968) intended primarily to combat the infusion of organized racketeering into the activities of legitimate Private businesses. In contrast there was no legislative intent to apply the statute to acts of corruption by public employees or officials. In support of this view, appellants advert to the civil remedies provided by section 1963 of the statute. These include a private action for treble damages and actions by the United States Attorney General for divestiture, dissolution or reorganization of the enterprise, and restrictions on investments by persons therein. Appellants contend these statutory remedies are peculiar to violations by private organizations and therefore public entities were meant to be excluded from the statute's range of coverage.

Consideration of past precedent, legislative history, and the plain words of the statute convince us that the RICO statute admits of a broader, less constricted interpretation. We believe that public entities and individuals may constitute § 1961(4) enterprises through which racketeering is conducted. Both the Third and Fifth Circuits have so held. In United States v. Frumento, 563 F.2d 1083 (3d Cir. 1977), Cert. denied sub nom. Millhouse v. United States, 434 U.S. 1072, 98 S.Ct. 1256, 55 L.Ed.2d 775 (1978), the Court of Appeals for the Third Circuit determined that the act was designed to prevent organized crime from infiltrating public and private entities which have some relationship with the economy. 563 F.2d at 1090. To this end Congress authored flexible legislation offering the various civil remedies cited above as well as criminal penalties ⁵ to protect from racketeering individuals and organizations in different and diverse areas of American life. Id. at 1090-91.

In a case highly similar to the cause before us, the Fifth Circuit in United States v. Brown, 555 F.2d 407 (5th Cir. 1977), Cert. denied, 435 U.S. 904, 98 S.Ct. 1448, 55 L.Ed.2d 494 (1978), held that the Macon, Georgia municipal police department constituted an enterprise within the meaning of the statute. The Brown court rejected the appellants' contentions that the statute encompassed only private corporations and labor organizations as overly narrow and unsupported by legislative history. 555 F.2d at 415. The court noted that the actual language of § 1961(4) defines enterprise as any "legal entity" or "group of individuals associated in fact although not a legal entity." Id. From this broad language it concluded that a police department may be, at the least, a group of individuals associated in fact, if not a "legal entity." Id.

Scrutinizing the pertinent legislative history, the court recognized that Congress enacted the Organized Crime Control Act of 1970, of which the RICO statute was a portion, to reduce the flow of illegal activities into organizations which corrupt "democratic processes" and "threaten domestic security." Id. Finally the court relied on the explicit language that the provisions of the Organized Crime Act of 1970 were to be "liberally construed" to achieve "their remedial purpose." Id. at 416.

Our view is in accord with that of the Third and Fifth Circuits. As the Fifth Circuit noted in Brown, Congress articulated that the statute is to be liberally construed to effectuate its remedial purposes. Organized Crime Control Act, Pub.L.No. 91-452 § 904, 84 Stat. 922. Yet, even a restricted reading of the expansive definition of "enterprise" permits the application of § 1962(d) to public entities such as police departments. Section 1961(4) draws no distinctions between the public and private...