U.S. v. Arvanitis

• Citation: 902 F.2d 489
• Decision Date: 03 May 1990
• Docket Number: Nos. 88-2319,88-2890 and 88-2891,88-2321,88-2546,s. 88-2319
• Parties: 30 Fed. R. Evid. Serv. 363 UNITED STATES of America, Plaintiff-Appellee, v. Peter ARVANITIS, Stanley Peters, John Yannakis, Perikles Panagiotaros, and Robert Richards, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 489

902 F.2d 489

30 Fed. R. Evid. Serv. 363

UNITED STATES of America, Plaintiff-Appellee, v. Peter ARVANITIS, Stanley Peters, John Yannakis, Perikles

Panagiotaros, and Robert Richards, Defendants-Appellants.

Nos. 88-2319, 88-2321, 88-2546, 88-2890 and 88-2891.

United States Court of Appeals, Seventh Circuit.

Argued April 11, 1989.

Decided May 3, 1990.

Rehearing and Rehearing En Banc Denied in No. 88-2321 Sept. 5, 1990.

Ted S. Helwig, Matthew R. Bettenhausen, Steve Miller, James R. Ferguson, and David J. Stetler, Asst. U.S. Attys., Office of the United States Attorney, Chicago, Ill., for U.S.

Allan A. Ackerman, Chicago, Ill., for Peter Arvanitis.

Patrick A. Tuite, Tuite, Mejia & Giacchetti, Chicago, Ill., for Stanley Peters.

William H. Theis, Chicago, Ill., for John Yannakis.

Kent R. Carlson, Ronald D. Menaker, Chicago, Ill., for Perikles Panagiotaros.

Kent R. Carlson, Thomas J. Royce, Chicago, Ill., for Robert Richards.

Before BAUER, Chief Judge, and FLAUM and EASTERBROOK, Circuit Judges.

BAUER, Chief Judge.

On July 13, 1987, a United States Grand Jury sitting in the Northern District of Illinois returned a twenty-eight count indictment against eleven defendants for their participation in a worldwide arson and extortion ring. Thereafter, the grand jury returned a superseding indictment on February 1, 1988. The superseding indictment alleged that Peter Arvanitis, Perikles Panagiotaros, Robert Richards and Peter Leventopoulos directed the activities of a racketeering enterprise ("the enterprise" or "the RICO enterprise") engaged in the business of performing contract bombings and arson on behalf of individuals who sought to destroy their businesses in order to defraud their insurance companies. The indictment further alleged that the enterprise used threats of violence and actual violence for the purpose of extorting money and property from their victims. Arvanitis, Panagiotaros, and Richards entered guilty pleas to several of the counts with which they were charged. ¹ Arvanitis then brought a direct appeal, alleging that his counsel was constitutionally deficient and that the district court abused its discretion in ordering full restitution. We reject his first contention but remand the order of restitution to the district court for recalculation of the amount of loss suffered by the Zurich Insurance Company (Zurich), one of the insurance companies defrauded by the enterprise.

Panagiotaros and Richards did not file a direct appeal. Instead they filed a motion in the district court to vacate their pleas pursuant to 28 U.S.C. Sec. 2255 and, like Arvanitis, claimed that they were denied effective assistance of counsel. The court denied their motion and they appeal. On appeal, they also add that the court improperly ordered them to pay restitution. We affirm the district court's determination with respect to the ineffective assistance issue, but remand for the court to determine whether Panagiotaros and Richards can establish cause for their failure to raise on direct appeal the court's incorrect calculation of Zurich's loss.

The other defendants indicted were allegedly "clients" of the RICO enterprise. They owned the businesses destroyed by arson or bombings and fraudulently submitted insurance claims on those businesses. Two of these defendants have brought appeals to this court. After a bench trial, Stanley Peters (a.k.a. Stelios Panagiotaros), the brother of Perikles Panagiotaros, was found guilty of procuring the destruction of his business and of the counts related to this charge. On appeal, he claims that the district court committed reversible error by admitting certain hearsay testimony. Although we find that the court incorrectly admitted the contested evidence, the error was harmless and we therefore affirm Peters' conviction.

Like Peters, John Yannakis originally was charged with arranging the destruction of his business through the services of this racketeering enterprise. The government later dropped these charges and filed a superseding information which charged Yannakis with one count of mail fraud. Yannakis pled guilty to this count. On appeal, he contends that the district court erroneously ordered that he pay restitution. We agree and reverse.

This court consolidated the appeals of these five defendants upon its own motion.

I. Arvanitis, Panagiotaros and Richards

The superseding indictment of February 1, 1988 alleged that Arvanitis, Richards, Panagiotaros and Leventopoulos were the core co-conspirators in an arson and extortion enterprise. Count 1 charged Arvanitis, Richards, Panagiotaros and Leventopoulos with participation in an enterprise which engaged in a pattern of racketeering activity in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. Sec. 1962(c). ² Count 2 charged them with conspiracy to engage in the pattern of racketeering activity charged in Count 1 in violation of 18 U.S.C. Sec. 1962(d). The indictment also charged these four defendants with numerous other violations of federal law. ³

Arvanitis, Panagiotaros and Richards entered into a plea agreement with the government. All three defendants agreed to plead guilty to Count 2 of the superseding indictment, charging them with conspiracy in violation of 18 U.S.C. Sec. 1962(d). In addition, Arvanitis agreed to plead guilty to Count 25 which charged him with extorting money from John Katsamangas and Chris Ralides through threats of violence and actual use of violence in violation of 18 U.S.C. Sec. 1951. Richards and Panagiotaros each agreed to plead guilty to Count 7 of the indictment which alleged that Panagiotaros set fire to the Arrowhead Restaurant and that he and Richards caused a false claim for insurance to be delivered to the insurer in violation of 18 U.S.C. Sec. 1341. The agreement further provided:

The government, at the time of sentencing, will recommend substantial incarceration against each of the defendants. The United States will bring all matters in aggravation and mitigation to the sentencing court. [The government] will move to dismiss the remaining counts of the indictment at the time of sentencing. As is [the government's] duty under the [Victim Witness and Protection Act, 18 U.S.C. Secs. 3663, 3664], [the government] will call to the Court's attention the identity of all victims and their monetary losses and whatever restitution is required to make them whole. [The government] will call that to the attention of the sentencing court.

The defendants thereafter pled guilty to the charges specified in the agreement.

The court then ordered the preparation of pre-sentence investigation (PSI) reports. The original PSI reports estimated that under Parole Commission guidelines, each defendant would receive a category five offense severity rating. Prior to the sentencing hearing, the probation department submitted a supplemental report, raising its estimate of the applicable offense severity rating to a category six. The defendants filed objections to the PSI reports, including an objection to the increase in the estimate of the offense severity rating. The court ordered the government to respond to the defendants' objections prior to the sentencing hearing.

At the sentencing hearing, the defendants again objected to the probation department's supplemental report and also to the government's response to the report. The defendants alleged that the severity rating of five induced their pleas. The court, however, found that the offense severity rating was not part of the defendant's plea agreements with the government. The court then asked whether the defendants wished to withdraw their guilty pleas. After a brief recess, in which defense counsel consulted with their clients, the attorneys returned, stating that the defendants would be satisfied if the court sentenced them on the basis that they would receive an offense severity rating of five.

The district court then sentenced Arvanitis to serve twelve years in the custody of the Attorney General on Count 2, to be followed by five years probation on Count 25. It sentenced Richards to serve fifteen years on Count 2, to be followed by five years probation on Count 7, and it sentenced Panagiotaros to serve nine years on Count 2, to be followed by five years probation on Count 7. The court also ordered Arvanitis, Panagiotaros and Richards to pay restitution to various insurance companies for four of the arsons in which they were involved. The court found that these three defendants caused losses of $315,783.87, and it imposed joint and several liability upon them pursuant to the Victim and Witness Protection Act of 1982 ("VWPA"), 18 U.S.C. Secs. 3579, 3580 (recodified at 18 U.S.C. Secs. 3663, 3664, effective November 1, 1986).

After the defendants had been sentenced and tendered to the custody of the Attorney General, the Parole Commission concluded that the offense severity ratings for Arvanitis, Panagiotaros and Richards should be a category seven. Arvanitis then filed a direct appeal. On appeal, he alleges that his counsel's performance was constitutionally deficient because his counsel erroneously advised him that he would receive an offense severity rating of five. He also alleges that the district court abused its discretion in ordering him to make full restitution.

Panagiotaros and Richards filed a motion to withdraw their guilty pleas, and like Arvanitis, claimed they were denied effective assistance of counsel. This motion, however, was filed after sentencing, and the avenues to attack the guilty pleas therefore were limited to a direct appeal or a motion under 28 U.S.C. Sec. 2255. Fed.R.Crim.P. 32(d). Rather than filing a direct appeal, Panagiotaros and Richards asked the court to treat their motion as one brought pursuant to 28 U.S.C. Sec. 2255. The district court thereafter issued an opinion, rejecting their ineffective assistance of counsel claim and denying their petition for relief. 694...