Ginsburg v. U.S., 89-1288

• Decision Date: 03 August 1990
• Docket Number: No. 89-1288,89-1288
• Citation: 909 F.2d 982
• Parties: Richard A. GINSBURG, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 982

909 F.2d 982

Richard A. GINSBURG, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee.

No. 89-1288.

United States Court of Appeals Seventh Circuit.

Argued Jan. 25, 1990.

Decided Aug. 3, 1990.

Jeffrey B. Steinback, Marc W. Martin, Genson, Steinback & Gillespie, Chicago, Ill., for petitioner-appellant.

Thomas M. Durkin and Matthew M. Schneider, Asst. U.S. Attys., Office of U.S. Atty., Crim. Receiving, Appellate Div., Chicago, Ill., for respondent-appellee.

Before WOOD, Jr., CUDAHY, and COFFEY, Circuit Judges.

HARLINGTON WOOD, Jr., Circuit Judge.

In early 1984, a jury found Richard A. Ginsburg guilty of 19 counts of mail fraud under 18 U.S.C. Sec. 1341 and one count of racketeering under 18 U.S.C. Sec. 1962(c), all of which stemmed from Ginsburg's payments to fix cases while practicing before the Cook County Board of Tax Appeals ("the Board"). Following the Supreme Court's decision in McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), Ginsburg filed his section 2255 petition seeking to vacate and set aside the judgment and sentence. ¹ On January 10, 1989, the district court entered an order granting his petition. The government subsequently filed a motion to reconsider in light of our decision in United States v. Doe, 867 F.2d 986 (7th Cir.1989), and on February 2, 1989, the district court granted the government's motion and dismissed Ginsburg's petition on the merits. For the reasons discussed below, we affirm the dismissal of Ginsburg's section 2255 petition.

I. BACKGROUND

Ginsburg's convictions flow from a scheme that began in 1975 in which he and Theodore J. Schmidt, who was then his law partner, made payments in cash to employees of the Board in order to have real estate tax assessments reduced on properties owned by their clients. A reduction in a real property tax assessment requires the concurrence of both commissioners of the Board. Under the scheme, the deputy commissioners, with the aid of other Board employees, granted reductions in select cases by forging the approval initials of one commissioner and processing the files through the other commissioner's office without his review. Ginsburg paid Deputy Commissioner Donald Erskine ten percent of the legal fees Ginsburg obtained in connection with these tax reductions. During the life of the scheme, Ginsburg made cash payments to Erskine approximately twenty-five times for a total amount of $18,000. Ginsburg also made cash payments totalling approximately $2,500 to hearing officer Jimmie Smith in return for his assistance in fraudulently processing complaints through the Board. In the 1975 tax year Ginsburg was successful in eighty-four percent of his cases before the Board, in the 1976 tax year he was successful in ninety-one percent of his cases, and in the 1977 tax year he was successful in seventy-two percent of his cases. After the federal investigation of the Board began in 1978, Ginsburg's success rate dropped to forty-five percent.

After Ginsburg was convicted, the Supreme Court decided McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). McNally held that while the mail fraud statute, 18 U.S.C. Sec. 1341, clearly protects property rights, schemes to defraud the citizenry of the intangible right to good government do not fall within the statute's scope. Id. at 356, 107 S.Ct. at 2879. Relying on McNally, Ginsburg challenges his conviction for mail fraud on three grounds: (1) the indictment failed to state an offense, (2) the jury instructions demonstrate that he was convicted under an "intangible rights" theory, ² and (3) the government did not attempt to show, and the jury could not have found, that the mail fraud scheme operated to cause a loss of money or property.

II. ANALYSIS

A. The Indictment

Ginsburg contends that he is entitled to relief under section 2255 because he was charged in the indictment with a mail fraud violation under the "intangible rights" theory, which is no longer a viable theory of prosecution after McNally. Section 2255 provides relief for a prisoner "claiming the right to be released upon the ground that the sentence was imposed in violation of the Constitution or the Laws of the United States." Custody that is the result of an indictment that fails to state an offense violates the laws of the United States. United States v. Keane, 852 F.2d 199, 204 (7th Cir.1988), cert. denied, --- U.S. ----, 109 S.Ct. 2109, 104 L.Ed.2d 670 (1989).

In determining whether an indictment charges an offense under McNally, we are required to look beyond how the scheme is legally characterized in the indictment and "examine whether 'the specific conduct alleged in the indictment is clearly proscribed by the mail fraud statute.' " Doe, 867 F.2d at 988 (citation omitted), see also Bateman v. United States, 875 F.2d 1304, 1308 (7th Cir.1989); United States v. Bonansinga, 855 F.2d 476, 480 (7th Cir.1988); United States v. Wellman, 830 F.2d 1453, 1463 (7th Cir.1987). An indictment alleging a deprivation of property rights is not defective under McNally just because it also alleges a deprivation of intangible rights. United States v. Folak, 865 F.2d 110, 113 (7th Cir.1988); see also Ranke v. United States, 873 F.2d 1033, 1035 (7th Cir.1989); Doe, 867 F.2d at 988-89. For example, McNally does not require setting aside the conviction "where a single set of facts establishes both a scheme to defraud a victim of money or property, as well as a deprivation of some intangible right." Folak, 865 F.2d at 113.

Finally, we recognize that our review of the sufficiency of the indictment is limited. An indictment cannot be questioned under section 2255 "unless it is so defective on its face as not to charge an offense under any reasonable construction." Burchfield v. United States, 544 F.2d 922, 924 (7th Cir.1976), cert. denied, 430 U.S. 956, 97 S.Ct. 1602, 51 L.Ed.2d (1977). More generally, a court reviewing the sufficiency of an indictment "should consider the challenged count as a whole and should refrain from reading it in a hypertechnical manner." United States v. Mosley, 786 F.2d 1330 (7th Cir.) (quoting United States v. Gironda, 758 F.2d 1201, 1209 (7th Cir.), cert. denied 474 U.S. 1004, 106 S.Ct. 523, 88 L.Ed.2d 456 (1985)), cert. denied, 476 U.S. 1184, 106 S.Ct. 2919, 91 L.Ed.2d 548 (1986). An indictment must be read to include facts that the allegations it contains necessarily imply. With these principles in mind, we must consider the indictment itself. ³

Paragraph 7 alleges an intangible rights theory of mail fraud, a point with which the government does not disagree. The indictment's sufficiency thus turns on whether other of its paragraphs describing the scheme to defraud Cook County ("the County") allege a cognizable offense after McNally.

In particular, the allegations in paragraphs 12 through 15 describe a scheme pursuant to which Ginsburg paid bribes to various officials at the Board in return for their fraudulently processing tax complaints that Ginsburg filed for his clients and fraudulently reducing assessments. The indictment further alleges that under this scheme, Ginsburg obtained fraudulent assessment reductions for his clients in approximately 650 cases.

Our decision in United States v. Doe controls this case. In Doe, we held that an indictment charging Stephen Gorny for offenses connected with his participation in the same scheme in which Ginsburg was involved was not invalidated by McNally. The indictment in Doe, substantially similar to the one in the present case, included "intangible rights" language as well as the substantive allegation that Gorny reduced the tax assessments of persons represented by attorneys in return for bribes offered to him by those attorneys. In reversing the district court's grant of section 2255 relief in Doe, we distinguished Magnuson v. United States, 861 F.2d 166 (7th Cir.1988), a case upon which Ginsburg heavily relies. We explained that the indictment in Magnuson "alleged only an intangible rights violation ... [while the indictment in Doe] included not only 'intangible rights' language but also the substantive allegation that Gorny received and accepted bribes from attorneys who appeared before the Board in return for which Gorny reduced the tax assessments of individuals represented by those attorneys." Doe, 867 F.2d at 988 n. 1. ⁴

Nonetheless, Ginsburg contends that Magnuson rather than Doe should govern this case. To support this claim, Ginsburg points to the district court's statement in its original memorandum opinion and order ("Ginsburg I") that "Magnuson's indictment was strikingly similar to that against Ginsburg." 705 F.Supp. at 1310, 1318. Ginsburg, however, ignores the district court's discussion of Doe in its second supplement to Ginsburg I issued just after Doe was decided. There the district court stated that "[i]n factual terms Doe necessarily presents a closer parallel to Ginsburg's case than the similar pattern of corruption ... that produced the conviction in Magnuson...." Id. at 1326. More importantly, the court found that "the money-or-property allegations in the indictment in Doe correspond directly to the allegations in Ginsburg's Indictment [sic ] pp 8, 12 and 14...." Id. at 1327. We agree with the district court's conclusion that Doe "plainly controls this case." Id. at 1328. ⁵ Ginburg's indictment, like the indictment in Doe, alleges a scheme to defraud the County and its citizens of the intangible right to good government and faithful service (paragraph 7), and it also alleges a scheme to defraud the County of the tangible right to revenues by fraudulently reducing real estate property tax assessments (paragraph 12).

Ginsburg also argues that the indictment does not allege a deprivation of property as required by McNally on the ground that fraudulent tax assessments do not result in a decrease in tax revenues to the County. Ginsburg relies on the district court's...