U.S. v. Stauffer

• Decision Date: 14 September 1990
• Docket Number: No. 89-10581,89-10581
• Citation: 922 F.2d 508
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Jon Darrell STAUFFER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 508

922 F.2d 508

UNITED STATES of America, Plaintiff-Appellee, v. Jon Darrell STAUFFER, Defendant-Appellant.

No. 89-10581.

United States Court of Appeals, Ninth Circuit.

Submitted Sept. 14, 1990 ^*.

Decided Dec. 21, 1990.

Meridith J. Watts, San Francisco, Cal., for defendant-appellant.

Matthew B. Pavone, Asst. U.S. Atty., San Francisco, Cal., for plaintiff-appellee.

Before FARRIS and THOMPSON, Circuit Judges, and MUECKE, District Judge. ^**

MUECKE, District Judge:

Jon Darrell Stauffer appeals his conviction for conspiracy to distribute drugs, interstate transporation in aid of a racketeering enterprise, and collection of extensions of credit by extortionate means. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Defendant/Appellant, Jon Darrell Stauffer, was prosecuted as a peripheral participant in a drug ring headed by Richard Stuart Wallstrum. The Government charged Stauffer with four counts of an eight count indictment. Count One charged a conspiracy to possess with intent to distribute, and distribution of cocaine. 21 U.S.C. Sec. 846 ("the drug distribution count"). Count Two charged a conspiracy to use extortionate means to collect an extension of credit from an individual in Hawaii. 18 U.S.C. Sec. 894 ("the Hawaii extortion count"). Count Three charged travel in interstate commerce to carry out the charged Hawaii extortion scheme. 18 U.S.C. Sec. 1952 ("the travel count"). Finally, Count Six charged a conspiracy to use extortionate means to collect an extension of credit from an individual in Nevada. 18 U.S.C. Sec. 894 ("the Nevada extortion count").

The basis for the interstate travel charge contained in Count Three stems from Wallstrum having hired Stauffer and Stauffer's brother to travel to Hawaii to locate a man named Kevin Heinold. Wallstrum had loaned money (money derived primarily from drug trafficking) to Heinold. Wallstrum wanted the money back, but he could not find Heinold. Wallstrum selected the Stauffers because he felt they would be discreet about his drug trafficking activities. The brothers traveled to Hawaii to find Kevin. During their unannounced visit to Heinold's mother's house, Stauffer's brother said they were not there to hurt her son; they just wanted to talk to him about the missing money. Despite this comment, Mrs. Heinold had the impression that the Stauffers had bad intentions. A few days later Stauffer's brother returned and made threatening remarks to Mrs. Heinold about what would happen to her and her son if Kevin did not return the money.

After leaving Hawaii, Stauffer attempted to collect another debt in Nevada from a different individual. This undertaking led to the extortion charge contained in Count Six. Wallstrum had loaned approximately $5,000-10,000 of his drug proceeds to Anthony Fiori. Fiori was initially to invest the money with Charles Leonard in a sports gambling bar in Carson City. Sometime later, however, Fiori decided to back out of the investment and he asked for the money back. Fiori apparently gave Leonard some time to pay. Leonard made three installment payments, but then stopped paying. Wallstrum and Fiori arranged to have Stauffer try to get the rest of the money back. Stauffer confronted Leonard at Leonard's place of work, again unannounced, and threatened Leonard and Leonard's family over the repayment of the money.

In addition to the activities mentioned above, the following evidence relates to the charge of conspiracy to distribute drugs contained in Count One. On two or three occasions, Stauffer drove from Santa Cruz to Santa Rosa where he met his brother. Then, Stauffer and his brother met Beginning on June 5, 1989, Stauffer was tried in a three day jury trial before the Honorable William W. Schwarzer, U.S. District Court for the Northern District of California. On June 7, 1989, the jury returned its verdict.

Wallstrum alone in a car, and Wallstrum distributed cocaine directly to Stauffer's brother. Later, Stauffer delivered money to Wallstrum in payment for the cocaine previously "fronted" by Wallstrum in the automobile. When his brother left town, Stauffer told Wallstrum to contact him if Wallstrum needed anything.

The verdict form reflected convictions on the drug distribution conspiracy, Hawaii extortion, and travel counts, and an acquittal on the Nevada extortion count. Post-verdict interviews of several jurors, initiated by Stauffer's counsel, determined that the jury had made a clerical error. The jury apparently became confused concerning the numbering of the counts on their copy of the superseding indictment. They had intended to acquit on the Hawaii extortion count, and convict on the Nevada extortion count. The trial court solicited affidavits from the jurors. All the jurors attested to the clerical error.

At a final post-trial hearing on November 9, 1989 the District Court switched the verdicts on the two extortion counts to correct the jury's mistake and denied Stauffer's post-trial motions concerning the sufficiency of the evidence on the drug distribution and travel counts. Judgment was entered accordingly and Stauffer received a sentence of five years in prison (Counts One and Six running concurrently), followed by five years of probation (Count Three).

On appeal, Stauffer argues that the Government presented insufficient evidence to support his convictions for conspiracy to distribute drugs (Count One), and for interstate travel from California to Hawaii for the purpose of carrying out extortion (Count Three). On Count Six (Nevada extortion), Stauffer argues that the Government failed to prove an essential element of the crime, i.e., an "extension of credit," and that judgment on Count Six violates his right against being placed in double jeopardy.

DISCUSSION

I. Whether a Demand, after Money has Changed Hands, for Return of the Money and Deferral of Repayment, is Sufficient to Establish an "Extension of Credit" Pursuant to 28 U.S.C. Sec. 891(1) and Sec. 894 for Purposes of Proving the Nevada Extortion Count.

A. Standard of Review

Stauffer did not make a motion for acquittal directed to the Nevada extortion count at the close of the evidence. Therefore, he has waived any claim for reversal based on insufficiency of the evidence. The court's review of this issue is proper only to avoid a manifest miscarriage of justice or plain error. United States v. Mora, 876 F.2d 76, 77 (9th Cir.1989).

B. "Extension of Credit"

Stauffer was convicted under 18 U.S.C. Sec. 894(a) ¹ for conspiracy to use extortionate means to collect an extension of credit. Stauffer contends that the financial transaction between Anthony Fiori and Charles Leonard did not constitute an "extension of credit."

Title 18 U.S.C. Sec. 891(1) defines an extension of credit:

To extend credit means to make or renew any loan, or to enter into any agreement, tacit or express, whereby the repayment or satisfaction of a debt or claim, whether acknowledged or disputed, valid or invalid, and however arising, may or will be deferred.

In addition, Sec. 891(6) defines an extortionate extension of credit as "any extension of credit with respect to which it is the understanding of the creditor and the debtor at the time it is made that delay in making repayment or failing to make repayment could result in the use of violence or other criminal means to cause harm to the person...." In drafting the Extortionate Credit Transaction legislation, Congress intended to recognize "a criminal offense to collect an indebtedness by extortionate means, regardless of how the indebtedness arose." Conf.Rep. No. 1397, 90th Cong., 2d. Sess., reprinted in 1968 U.S.Code Cong. & Ad.News 1962, 2028. The legislative history is clear that Congress created this statute as "a weapon to be used with vigor and imagination...." Id. at 2029.

Courts have consistently recognized Congressional intent that the extortionate credit statutes be broadly interpreted to encompass many types of "credit extensions" besides traditional loans. ² For example, in United States v. Bonanno, 467 F.2d 14 (9th Cir.1972), cert. denied, 410 U.S. 909, 93 S.Ct. 964, 35 L.Ed.2d 271 (1973), a drug smuggler had been given $5000.00 up front to purchase drugs for his partner. However, the venture went awry when the drugs were lost while being flown in from Mexico. When the partner made threats in an effort to regain his "investment," the Ninth Circuit determined that "[these] activities were clearly within the ambit of the Act's proscriptions and it would be inconsistent with the spirit of the Act to find otherwise." Id. at 16-17.

Similarly, in United States v. Andrino, 501 F.2d 1373 (9th Cir.1974), the defendant made demands for repayment after individuals playing cards had incurred large debts. Id. at 1375-76. Again, the Ninth Circuit read the statute broadly, upholding the conviction even though the transactions lacked the typical formalities of standard loans, such as specified interest rates and their myriad other legal characteristics. Id. at 1377.

Stauffer admits that the definition given to "extension of credit" is very broad. Nevertheless, he argues that the evidence presented at trial does not fall within the broad definition. Stauffer relies on United States v. Polizi, 801 F.2d 1543 (9th Cir.1986), a case where one of the defendants claimed that no extension of credit had been made to a Mr. Hall, because Hall had defrauded defendant into making the loan. This Court stated that whether the transaction in question involved "a simple loan, an investment in an illegal scheme, or outright embezzlement, there was an extension of credit as long as there was at least a tacit agreement to defer repayment." Id. at 1557. According to Stauffer, proof concerning a tacit agreement is lacking in the instant case; the evidence presented at trial suggests that Anthony Fiori gave money to Charles Leonard for investment purposes rather than a loan. Thus, Stauffer argues, the Government failed to establish an extension of...