Flinn v. State

• Citation: 563 N.E.2d 536
• Decision Date: 27 November 1990
• Docket Number: No. 49S00-8805-CF-507,49S00-8805-CF-507
• Parties: RICO Bus.Disp.Guide 7638 Bernard P. FLINN, Appellant, v. STATE of Indiana, Appellee.
• Court: Supreme Court of Indiana

Page 536

563 N.E.2d 536

RICO Bus.Disp.Guide 7638

Bernard P. FLINN, Appellant, v. STATE of Indiana, Appellee.

No. 49S00-8805-CF-507.

Supreme Court of Indiana.

Nov. 27, 1990.

S. Sargent Visher, Choate Visher & Haith, Indianapolis, for appellant.

Linley E. Pearson, Atty. Gen., Gary Damon Secrest, Deputy Atty. Gen., Indianapolis, for appellee.

GIVAN, Justice.

A jury trial resulted in the conviction of appellant of one count of Corrupt Business Influence, a Class C felony; seven counts of Theft, a Class D felony; and three counts of Unlawful Loan Brokering, a Class D felony. He was sentenced to enhanced terms of eight (8) years for the Class C felony count and four (4) years for each of the ten Class D felony counts, all terms to be served consecutively for a total executed sentence of forty-eight (48) years.

The facts are: Between 1982 and 1985, a number of people responded to a Yellow Pages advertisement for "Harvey Investment Co. Inc./High Risk Loans," which put them in contact with appellant, who represented himself as a loan broker. In late December of 1982, Granville Hall contacted appellant seeking financing to purchase a bowling alley for $200,000. While refusing to discuss the identity of his investors, appellant assured Hall that he could secure him a loan for a finder's fee of $1900. Hall paid appellant that amount and a brokerage agreement was executed, but a few days later appellant told Hall an additional $3500 was needed to secure the loan. Hall supplied the additional money. In February of 1983, appellant informed Hall he had secured his loan, provided Hall could come up with yet another $5000. Hall managed to borrow the $5000 and when he paid it to appellant, a new brokerage agreement was executed reciting an interest rate, monthly payment, and closing date of March 4, 1983. On that date, however, appellant could not be found and the closing for the loan fell through, as did the purchase of the bowling alley. Hall never received a loan nor a refund of any of his $10,400 from appellant.

Later in 1983, Norma Murrell was told by appellant that he was "one hundred per cent successful" in obtaining second mortgage loans, but after paying him a $300 broker's fee, she received neither a loan nor a refund. In 1984, Robert Moore needed a loan to buy a house. Appellant promised to buy the house and resell it to Moore on contract if Moore paid him $3400. Moore did so, but on the agreed "closing" date, nothing happened. The house eventually was sold to someone else. Appellant promised Moore a refund, but neither a loan nor a refund ever were forthcoming.

In late 1984 and early 1985, Troy Hale was attempting to buy a log home. He paid appellant $5000 to obtain financing, but on the scheduled "closing" date, appellant could not be found. When Hale finally was able to contact him, appellant said another $5000 was needed. Hale never received a loan nor a refund. In early 1985, Vickie Reynolds paid appellant $700 to obtain a $30,000 loan to expand her carpet business inventory. Claiming he had found investors, appellant promised Reynolds a $40,000 loan if she tendered an additional $1300, which she did. She never, however, received either a loan or any refund.

Sally Nees Parton needed $8500 to retire an accelerated mortgage on her mobile home. On May 17, 1985 she borrowed $1000 and paid it to appellant for "collateral" upon his assurance he would obtain a loan within thirty days or refund her money. After thirty days passed with no financing from appellant, she demanded a refund but instead got only appellant's usual run-around. In July of 1985, Lisa Alderson contacted appellant seeking financing to purchase a tavern. Appellant said there would be no problem obtaining investors if she paid him $5000 in "earnest money," which she did. As with the other transactions, appellant explained to Alderson that if she backed out of the deal, she would lose the $5000, but if he could not find an investor, it would be refunded to her.

Over the next few weeks, appellant responded to Alderson's inquiries by claiming he "was working on it." Finally, appellant told her she needed to pay him $3000 more to secure the loan and if she did not, she would be backing out and would forfeit the $5000 already paid. When Alderson paid the additional $3000, appellant told her to proceed with closing on the tavern. No financing, however, was forthcoming from appellant, and when Alderson demanded a refund, he refused and maintained it was not his problem the tavern had been sold to someone else.

In August of 1985, Michael Welp went to appellant to finance the $13,000 purchase price of a mobile home. He paid $1000 in "earnest money" to appellant, who promised Welp that if the loan was not arranged within two weeks, or if the mobile home was sold to another, his $1000 would be refunded. After waiting over four weeks with no loan forthcoming, the owner sold the trailer to someone else. When appellant then refused to refund Welp's $1000, Welp threatened to call the police and to get a lawyer and sue. Appellant replied, "Do what you want; the law can't touch me."

On October 11, 1985, Sally Nees Parton contacted the Lawrence Police Department regarding appellant's activities. Pursuant to a search warrant, the records of Harvey Investment Co. were seized by investigators. The files relevant to this appeal contained the loan applications and brokerage agreements drawn up between appellant and his customers but no documents to indicate appellant had ever attempted to secure financing for his customers.

Appellant contends the trial court erred in denying his motions to dismiss the counts charging him with committing corrupt business influence and with unlawful loan brokering. He argues the Indiana Racketeer Influenced and Corrupt Organizations (RICO) statute, Ind.Code Sec. 35-45-6-1 et seq., is unconstitutionally vague and overbroad in that it fails to provide notice of precisely what conduct is prohibited. He points out that such vagueness violates due process, citing Grayned v. City of Rockford (1972), 408 U.S. 104, 92 S.Ct. 2294, 33 L.Ed.2d 222 for the proposition that a law must afford persons of reasonable intelligence the opportunity to know what is prohibited.

He maintains the statute is vague because the legislature, in specifying what may constitute a "pattern of racketeering activity," failed to define what it meant by two incidents of racketeering activity having "the same or similar" intent, result, accomplice, victim, or method of commission. He thus reasons that absent parameters to define "similar in what respect," prosecutors have virtually unlimited discretion to file a racketeering charge against anyone committing within a five-year period any two of the twenty-seven predicate offenses enumerated in the RICO statute.

In construing a statute, a court must start with the assumption that the legislative purpose is expressed by the ordinary meaning of the words used. H.J. Inc. v. Northwestern Bell Telephone Co. (1989), --- U.S. ----, 109 S.Ct. 2893, 106 L.Ed.2d 195. Clearly, any "person of reasonable intelligence" would understand that committing a series of thefts, one of the predicate offenses listed in the RICO statute, by the repeated solicitation and retention of up-front money in exchange for false promises to secure or attempt to secure financing, would constitute repeated incidents of theft having "the same or similar" intent, method of commission, and result such as to amount to a "pattern" of such criminal activity. The statute as applied in the case at bar is not impermissibly vague.

Moreover, any danger that a racketeering conviction could result merely from the commission of two predicate offenses within a five-year period is obviated not only by the interrelatedness requirement of Ind.Code Sec. 35-45-6-1 discussed above, but also by the requirement of Sec. 35-45-6-2 that once a pattern of racketeering activity has been established, it must be connected to an interest in or control of real property or an enterprise, to constitute the offense of corrupt business influence. Here, that connection was shown by appellant's use of Harvey Investment Co., Inc. to perpetrate his thefts. The RICO statute is not impermissibly overbroad.

Appellant also maintains the statute is indefinite as to what constitutes a "violation" of the listed crimes for predicate offense purposes. He cites a representation made by the Indiana Attorney General in the case of J.N.S., Inc. v. City of Indianapolis (7th Cir.1983), 712 F.2d 303, that "violation" means "conviction," and this Court's holding in 4447 Corp. v. Goldsmith (1987), Ind., 504 N.E.2d 559, rev'd. on other grounds, Fort Wayne Books, Inc. v. Indiana, 489 U.S. 46, 109 S.Ct. 916, 103 L.Ed.2d 34, that a predicate offense need not be a prior conviction. We note Sec. 1 of the statute defines an incident of "racketeering activity" as "to commit, or attempt to commit, or to conspire to commit a violation, or aiding and abetting in a violation, of" any of the listed offenses. One thus is put on notice that he risks RICO prosecution by, inter alia, the commission of the listed predicate offenses; once committed, the perpetrator's chance of subsequent conviction for a predicate offense already has been taken. We thus find no vagueness defect in this aspect of the statute, and note besides that the trial court in the instant case instructed the jury that they must convict appellant of the predicate offenses charged before finding him guilty on the count of corrupt business influence.

Appellant also urges the RICO count should have been dismissed as defective because it charged the commission of numerous counts of criminal conversion, which is not listed in the statute as a predicate offense, as incidents of racketeering activity. However, this defect in the information was cured when it was amended to charge the predicate offenses as theft.

Appellant argues the counts of unlawful...