U.S. v. Anderson
| Decision Date | 12 September 1980 |
| Docket Number | 79-1827,Nos. 79-1809,s. 79-1809 |
| Citation | 626 F.2d 1358 |
| Parties | 6 Fed. R. Evid. Serv. 581 UNITED STATES of America, Appellee, v. Leslie ANDERSON and Leonard Mooney, Appellants. |
| Court | U.S. Court of Appeals — Eighth Circuit |
H. David Blair, Murphy, Blair, Post & Stroud, Batesville, Ark., and William R. Wilson, Jr., Little Rock, Ark., for appellants; Herbert L. Ray, Salem, Ark., on brief.
Kenneth F. Stoll, and Robert L. Neighbors, Asst. U. S. Attys., Little Rock, Ark., for appellee; George W. Proctor, U. S. Atty., Little Rock, Ark., on brief.
Before HEANEY, Circuit Judge, GIBSON, Senior Circuit Judge, and STEPHENSON, Circuit Judge.
Leslie Anderson and Leonard Mooney appeal their convictions pursuant to jury verdicts finding them guilty on all counts in which they were named of a twenty-eight-count indictment alleging that, while county judges in Arkansas, Anderson and Mooney devised a scheme to defraud and to obtain money from their county treasuries by means of false and fraudulent pretenses, representations, and promises.
Counts I and II of the indictment charged violations of Title IX of the Organized Crime Control Act of 1970, Pub.L. 91-452, § 901(a), popularly known as the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962(c) and (d) (1976). Counts V, VI, IX, and XVI charged violations of 18 U.S.C. §§ 2 and 1952 (1976) by interstate travel in aid of the unlawful activity of public servant bribery in violation of Arkansas law, Ark.Stat.Ann. § 41-2703 (1977). The remaining counts of the indictment charged mail fraud in violation of 18 U.S.C. § 1341 (1976).
The District Court 1 sentenced defendant Anderson to one year's imprisonment on Count I, to run concurrently with one-year sentences on Counts II, III, and V. Also on Count V, the court imposed a fine of $5,000. The court suspended imposition of sentence on the remaining counts in which Anderson was named and placed him on probation for a period of two years, to run consecutively to the term of imprisonment imposed on Count I.
The District Court sentenced defendant Mooney to six months' imprisonment on Count I, to run concurrently with six-month sentences on Counts II, XVI, and XVII. Also on Count XVI, the court imposed a fine of $7,000. On all remaining counts in which Mooney was named, the court suspended imposition of sentence and placed him on probation for a term of two years, to run consecutively to the term of imprisonment on Count I.
On appeal, defendants jointly assert six errors on the part of the District Court: (1) permitting the application of RICO; (2) failing to grant severance of the trial; (3) allowing the Government to introduce testimony regarding Anderson's previous felony conviction; (4) forcing the defense to reveal the names of the prospective defense witnesses during the voir dire; (5) improper rulings regarding the selection of jurors; and (6) not granting a change in venue.
We agree with the defendants that the District Court erred in permitting RICO to be applied to the activities of defendants charged in the indictment, but find the remaining assertions of error meritless. We therefore reverse the convictions on Counts I and II and affirm the convictions on the remaining counts. 2
At all times relevant to the indictment, Anderson served as the county judge for Sharp County, Arkansas, and Mooney served as the county judge for Fulton County, Arkansas. In these capacities they acted as administrators for the counties. Among their duties they managed the fiscal functions of their respective counties by approving and authorizing payment of bills and accounts. They were not judicial officers. Paul Baldwin, having already been convicted of paying bribes and kickbacks to county judges, acted as the Government's principal witness during the trial. According to his testimony, he operated ostensibly as a salesman of culverts, grader blades, oil, creosote, and other similar items. He sold his wares to county judges in Arkansas and county commissioners in other states. In the event he sold merchandise to one of these customers, he usually wrote out a sales slip setting forth the items to be shipped and the price. He would charge, on the sales slip, the list price, then rebate personally to the purchasing agent ten percent of the net amount of the price shown on the sales slip. 3 Sometimes he entered into a prior arrangement with the purchasing agent that no merchandise would be shipped. They would prepare a bogus voucher which would have the same documentation as a bona fide voucher, but he would give the purchasing agent fifty percent of the net amount instead of ten. The purchasing agent would sign for the goods at the time the voucher was prepared.
Baldwin testified that he had dealt with both Anderson and Mooney in this manner. Both defendants took the stand and denied having ever taken a bribe from Baldwin. They admitted having placed orders with Baldwin and having approved payment on the orders, but contended that the business dealings had always been legitimate. Pursuant to the alleged scheme, by the use of purely bogus invoices the citizens of Sharp County were defrauded of $4,842.25, and the citizens of Fulton County of $7,179.60.
Appellants have presented a tangle of arguments challenging the application of RICO, 18 U.S.C. § 1962, to the facts of this case as alleged in the indictment. We address only the issue of the statutory interpretation of the term "enterprise" as used in RICO. Since we find that the RICO counts as charged in the indictment cannot stand under the definition of the term "enterprise" as it is used in the RICO statute, we find it unnecessary to decide the other issues raised in connection with RICO.
Count I of the indictment charges violation of 18 U.S.C. § 1962(c), alleging that
LESLIE ANDERSON and LEONARD MOONEY were persons associated with an enterprise engaged in, and the activities of which affected, interstate commerce, namely each of the said defendants and Paul A. Baldwin were associated in fact to defraud, and to obtain money by means of false and fraudulent pretenses, representations and promises from Sharp and Fulton Counties, Arkansas, and the people of said counties, and the said defendants, LESLIE ANDERSON and LEONARD MOONEY, did knowingly and willfully conduct and participate directly and indirectly in the conducting of such enterprise's affairs through a pattern of racketeering activity as defined in Title 18, United States Code, Section 1961, * * *.
The pattern of racketeering activity is described in thirty-two subsequent paragraphs alleging separate violations of Arkansas and Federal law. All activity charged as "the pattern of racketeering" pertains to the scheme to defraud the two counties by the judges' agreeing with Baldwin to prepare and submit bogus invoices and to approve payment for them, knowing that the merchandise would never be received by the counties.
Count II of the indictment charges violation of 18 U.S.C. § 1962(c) and (d), alleging that
LESLIE ANDERSON and LEONARD MOONEY, defendants herein, being associated with an enterprise engaged in and whose activities affect interstate commerce, as defined in Section 1961 of Title 18, United States Code, that is the association in fact with Paul A. Baldwin, d/b/a The "Lisco" Company, did knowingly and willfully conspire, confederate and agree together and with each other, to conduct and participate in, directly and indirectly, conduct of subject enterprise's affairs, through a pattern of racketeering activity * * *.
All events allegedly constituting the "pattern of racketeering" activity, as well as those alleged as the overt acts in furtherance of the conspiracy, pertain to the scheme to defraud charged in Count I. 4
This is the first time this circuit has confronted the problem of defining the scope of RICO. Several other courts have had occasion to address this issue, and have tortuously developed a history of case law construing the complicated statutory language. This history focuses primarily upon the terms "enterprise" and "pattern of racketeering activity." A close examination of the statutory language utilizing these terms is necessary.
Title 18 U.S.C., section 1962, provides in relevant part:
(c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
(d) It shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.
The definition of "enterprise" as used in RICO appears in section 1961(4): " 'enterprise' includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." Section 1961 also sets forth definitions of "racketeering activity" 5 and "pattern of racketeering activity." 6
The scope of the term "enterprise" was first questioned in a federal court of appeals in United States v. Parness, 503 F.2d 430 (2d Cir. 1974), cert. denied, 419 U.S. 1105, 95 S.Ct. 775, 42 L.Ed.2d 801 (1975). In Parness, the Second Circuit held that a foreign corporation fell within the definition of "enterprise" and that the defendant's acquisition of a foreign corporation, with funds derived from criminal activity, fell within the ambit of RICO, 18 U.S.C. § 1962(a). In reaching this result, the court stated:
"(E)nterprise" is defined in section 1961(4) to include "any . . . corporation." On its face the proscription is all inclusive. It permits no inference that the Act was intended to have a parochial application. The...
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