Alexander v. Thornburgh

• Decision Date: 30 October 1991
• Docket Number: Nos. 89-5364,90-5417,s. 89-5364
• Citation: 943 F.2d 825
• Parties: -5734, 91-2 USTC P 50,550 Ferris ALEXANDER, Appellant, v. Richard THORNBURGH, in his official capacity only as Attorney General of the United States, Appellee. UNITED STATES of America, Appellee, v. Ferris Jacob ALEXANDER, Sr., a/k/a Pete Saba, Peter Saba, Paul Saba, John Thomas, Bob Olson, Jim Nelson, Jim Peterson, James Peterson, Robert Carlson, Frank Netti, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 825

943 F.2d 825

68 A.F.T.R.2d 91-5734, 91-2 USTC P 50,550

Ferris ALEXANDER, Appellant, v. Richard THORNBURGH, in his official capacity only as

Attorney General of the United States, Appellee.

UNITED STATES of America, Appellee, v. Ferris Jacob ALEXANDER, Sr., a/k/a Pete Saba, Peter Saba, Paul Saba, John Thomas, Bob Olson, Jim Nelson, Jim

Peterson, James Peterson, Robert

Carlson, Frank Netti, Appellant.

Nos. 89-5364, 90-5417.

United States Court of Appeals,

Eighth Circuit.

Submitted March 13, 1991.

Decided Aug. 30, 1991.

Rehearing and Rehearing En Banc

Denied Oct. 30, 1991.

Michael Mayock, Pasadena, Cal., for appellant.

Paul A. Murphy, Minneapolis, Minn., for appellee.

Before JOHN R. GIBSON and WOLLMAN, Circuit Judges, and FLOYD R. GIBSON, Senior Circuit Judge.

JOHN R. GIBSON, Circuit Judge.

Following a four-month trial, a jury convicted Ferris J. Alexander, Sr., on 24 counts ¹ of a 41-count indictment. The counts included conspiracy to defraud the IRS, the sale of obscene magazines and videos, tax evasion, and RICO violations. Alexander appeals from his convictions and the application of the forfeiture provisions of 18 U.S.C. § 1963 (1988). Alexander argues that his conviction of engaging in a conspiracy to defraud the IRS should be reversed because: (1) the indictment alleged and the evidence showed, if anything, multiple conspiracies and not one conspiracy; and (2) the count was defective because it charged a general conspiracy rather than a conspiracy to violate a specific statute. He also argues that his convictions for transporting obscene materials must be reversed because the jury's verdicts are inconsistent. He also attacks the district court's ² application of the forfeiture provisions of RICO, arguing that the application of RICO: (1) unconstitutionally criminalized non-obscene expressive material; and (2) violated the first and eighth amendments to the United States Constitution. He further argues that the obscenity standards set forth in Miller v. California, 413 U.S. 15, 93 S.Ct. 2607, 37 L.Ed.2d 419 (1973), violate his due process and first amendment rights. He also claims that the evidence was insufficient to support his convictions of filing a false income tax return, violating RICO, using a false social security number, and on all other counts. Finally, in a separate appeal, he appeals from the district court's ³ entry of summary judgment in his civil suit filed against the government arguing that the use of obscenity as a predicate to RICO violated his first amendment rights. We affirm the convictions, and the orders of summary judgment and forfeiture.

The evidence presented at the four-month trial was far-reaching and spanned a thirty year period. Only a brief outline of that evidence is necessary for our purposes, and we will provide further details as required in analyzing the issues on appeal.

Alexander was in the adult entertainment business for more than 30 years selling magazines, showing movies, and eventually selling and leasing video cassettes. The evidence at trial established that Alexander set up sham corporations and operated many of his businesses using false names and names of employees.

For example, evidence showed that from 1959 to 1976, Alexander used the name of an employee, Kenneth LaLonde, to conduct his businesses under the name of Kenneth LaLonde Enterprises. In 1969, Alexander hired an attorney, Robert J. Milavetz, who incorporated several corporations under the name of Kenneth LaLonde Enterprises. Alexander obtained licenses required for these businesses and opened bank accounts under LaLonde's name. Reports were also sent to the State of Minnesota under the name of Kenneth LaLonde Enterprises. The businesses were reported on LaLonde's individual tax return, and no corporate tax returns were filed.

Eventually, Milavetz had a falling out with Alexander and Alexander began using other attorneys, including Randall Tigue. In 1976, Tigue witnessed LaLonde's signature as the incorporator of two more corporations. Alexander consolidated the operation of his theaters and bookstores under these corporations, and on May 1, 1977, the name of LeRoy Wendling was substituted as the front name used to conduct Alexander's businesses. Alexander opened bank accounts for these corporations under the name of Wendling, another Alexander employee. These corporations were also reported to state and federal agencies showing Wendling as the owner. Corporate tax returns were filed and signed with a signature stamp of Wendling's name.

Wendling filed his personal tax returns listing Alexander's income. This arrangement continued until the end of 1980, when Wendling was fired, and the name "John Thomas" was substituted on some of these records and placed on the Wendling bank account. Alexander admitted that the name "John Thomas" was "the name [he] used."

On December 27, 1984, In Sok Na, another Alexander employee, executed, as incorporator and first director, the articles of incorporation for ten different corporations. In Sok Na was a Korean immigrant and spoke little English. Alexander testified that he formed these corporations to avoid potential civil liability. The names of six of the corporations were in Finnish and four were in a dialect of the Philippines. ⁴ None of these corporations filed tax returns. Two of the corporations were used to buy real estate and a bookstore.

In addition to using the names of LaLonde, Wendling, and Na, Alexander used a number of other names in operating bank accounts, obtaining licenses, and complying with various state and federal reporting regulations.

The government's evidence showed several examples of the lengths to which Alexander went to conceal his identity as the owner and operator of his various businesses. During the time Alexander ran his businesses under the name of LaLonde Enterprises, Alexander sent Milavetz to unemployment compensation hearings and instructed Milavetz to appear on behalf of Kenneth LaLonde or Kenneth LaLonde Enterprises. In one instance, LaLonde signed a license application for one of the theatres known as the "Flick." LaLonde appeared before the St. Paul City Council in the licensing application proceedings acting as the "owner" of the business. After the City Council balked at granting the license, Tigue advised the Council that he represented Alexander and LaLonde and a lease existed between the two. Subsequently, Tigue filed a lawsuit in the United States District Court against the City of St. Paul and its council members on behalf of Alexander and LaLonde stating that a lease existed between LaLonde and Alexander. The city council subsequently granted the license in LaLonde's name. LaLonde testified that he became aware of the lawsuit by reading about it in the newspaper, that he never had a lease on the business, and that his signature verifying the complaint, notarized by Tigue, was a forgery. In later years, licenses were issued in LaLonde's name without his knowledge, but with the participation of Tigue, and continued after LaLonde left Alexander's employ.

The revenues generated from Alexander's retail and rental stores were brought to him at the central warehouse and main office where the cash was commingled and taken to various banks. Alexander deposited some of the cash in various accounts and converted the rest into large denomination bills, cashier checks, and money orders. The cashier checks and money orders were payable to various individuals and entities. All expenses were paid out of Alexander's primary bank accounts, and all merchandise was shipped from California to his warehouse, where it was wrapped, priced, and boxed for distribution to Alexander's retail outlets. Because of disorganized and incomplete records, the government had a difficult time attempting to calculate Alexander's income. Nevertheless, the government estimated that Alexander underreported his 1982 gross receipts by $1,322,135 and $1,416,883 in 1983.

Alexander testified about many of these details. He confirmed that he used LaLonde, Wendling, and other individuals' names in the operation of his businesses, and that revenues from the businesses were reported on LaLonde's and Wendling's personal tax returns. He admitted that he purchased properties and submitted reports to state and federal agencies in other people's names. He attributed many of these decisions to Tigue and stated that he had no knowledge of some of the various businesses. Alexander also admitted that he signed a form on a Paine Webber investment account using a social security number that was not his social security number.

The jury found four magazines and three videos to be obscene, and these findings were the basis for convicting Alexander of transporting obscene material for the purpose of sale, selling obscene materials, and the RICO counts.

After the return of guilty verdicts, the district court reconvened the same jury to hear a portion of the forfeiture proceeding under 18 U.S.C. § 1963(a)(2). The jury heard additional evidence, including Alexander's testimony regarding the forfeitability of his interest in the enterprise and the property that afforded him a source of influence over the enterprise. Thereafter, the district court reconvened without a jury for a further evidentiary hearing as to forfeiture of any interest Alexander had acquired or maintained in violation of section 1962 and of any property constituting proceeds obtained directly or indirectly from racketeering activity. The government offered additional evidence of 30 magazines and 16 videos purchased or seized by the FBI during its criminal investigation, and an additional 418 videos and 9 magazines were admitted through the testimony of witnesses who had appeared as representatives of Alexander's wholesale sources.

The court sentenced Alexander to terms of imprisonment ranging from 36 to 72 months, all terms to run concurrently. United States v. Alexander, No....