U.S. v. Starnes, s. 80-1437

• Decision Date: 20 March 1981
• Docket Number: 80-1438,Nos. 80-1437,s. 80-1437
• Citation: 644 F.2d 673
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Noble R. STARNES and Clifford Roland, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 673

644 F.2d 673

UNITED STATES of America, Plaintiff-Appellee, v. Noble R. STARNES and Clifford Roland, Defendants-Appellants.

Nos. 80-1437, 80-1438.

United States Court of Appeals Seventh Circuit.

Argued Nov. 7, 1980.

Decided March 20, 1981.

Julius L. Echeles, Jeffrey B. Steinback, Chicago, Ill., for defendants-appellants.

Clifford J. Proud, Asst. U. S. Atty., East St. Louis, Ill., for plaintiff-appellee.

Before CUMMINGS and WOOD, Circuit Judges, and CAMPBELL, Senior District Judge. ^*

HARLINGTON WOOD, Jr., 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 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. ¹

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. Alternatively, 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 an acquaintance, Donald Murphy, ² 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 Roland 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 members worked for some of Tri-No's suppliers, but not directly 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, ³ 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 before with Roland at Roland's bar.

Starnes informed them that he wanted the entire building 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 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 constitute a crime because, he says, the government did not prove that he helped set the fire with the intent to defraud an insurer, as required under relevant Illinois law. Ill.Rev.Stat. Chap. 38, § 20-1(b). ⁴ 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 defendant'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, 97 S.Ct. 2641, 53 L.Ed.2d 250 (1977); People v. Berland, 74 Ill.2d 286, 308, 24 Ill.Dec. 508, 385 N.E.2d 649 (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 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, People v. Berland, supra, 74 Ill.2d at 308-09, 24 Ill.Dec. 508, 385 N.E.2d 649.

Our attention turns, then, to whether the evidence sustains 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 sufficient 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 relationship 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 reasonable to conclude that from his own experience he knew that commercial buildings usually are insured. The jury was justified in concluding that 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 loss, 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 gimmick, or any other reason, unless Starnes had insurance 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 building." The testimony does not suggest that either Shurman or Roland expressed surprise that an insurance claim was involved. Given Roland'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 contend 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 indictable under federal mail fraud laws or federal laws that prohibit interstate travel with intent to...