U.S. v. Bowdach

• Decision Date: 20 September 1974
• Docket Number: No. 71-2304,71-2304
• Citation: 501 F.2d 220
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Gary BOWDACH, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 220

501 F.2d 220

UNITED STATES of America, Plaintiff-Appellee, v. Gary BOWDACH, Defendant-Appellant.

No. 71-2304.

United States Court of Appeals, Fifth Circuit.

Sept. 20, 1974, Rehearing Denied Oct. 21, 1974.

Daniel S. Pearson, Miami, Fla. (Court-appointed), for defendant-appellant.

Robert W. Rust, U.S. Atty., Miami, Fla., James H. Walsh, Atty., Dept. of Justice, Tampa, Fla., John J. Robinson, Atty., Dept. of Justice, Washington, D.C., Gary Betz, Asst. U.S. Atty., Dept. of Justice, Strike Force, Miami, Fla., for plaintiff-appellee.

Before TUTTLE, GEWIN and THORNBERRY, Circuit Judges.

TUTTLE, Circuit Judge:

A grand jury for the Southern District of Florida indicted Gary Bowdach, Louis Joseph ('Chick') Cicchini, Stanley ('Sonny') Brock and Gaetano Thomas ('Tom') Milici on November 19, 1970, for twenty-three violations of the Extortionate Credit Transactions Act, 18 U.S.C. 891 et seq. Appellant Bowdach moved to dismiss the indictment on the ground that Rule 6(d) of the Federal Rules of Criminal Procedure had been violated by the presence of an unauthorized person in the Grand Jury room, and on February 13, 1971, the motion was granted. United States v. Bowdach, 324 F.Supp. 123 (S.D.Fla.). A new grand jury returned a superseding indictment, charging the same defendants with the same violations, on March 4, 1971. Bowdach was the only defendant brought to trial, and he was tried on fifteen counts. After trial by jury, he was convicted on one count of conspiracy to violate section 892 ¹ (count 1) and six counts of substantive violations of sections 892 (counts 2, 12, 14 and 16) and 894 (counts 3 and 17). ² The government dismissed seven counts against Bowdach, and the jury found him not guilty on one count. He was sentenced to concurrent terms of fifteen years imprisonment on each count. On appeal, Bowdach raised for the first time the issue of validity, under Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. 2510 et seq., of procedures used to secure wiretaps used as evidence that led to his conviction. We remanded the case to the district court for an evidentiary hearing, in light of this Court's en banc decision in United States v. Robinson, etc., 472 F.2d 973 (1973), to determine whether the wiretap applications were properly authorized under 18 U.S.C. 2516(1). See United States v. Bowdach, 474 F.2d 812 (5 Cir. 1973). On remand, the district court held (1) that the Attorney General had personally authorized the request for the application for the wiretap order, and (2) that the disparity between the 'authorizing individual' designated in the application for the order and in the subsequent order was not fatal to the validity of the procedure. United States v. Bowdach, 366 F.Supp. 1368 (S.D.Fla.1973).

We have held this case pending decision by the United States Supreme Court in United States v. Chavez, 416 U.S. 562, 94 S.Ct. 1849, 40 L.Ed.2d 380, on the wiretap issue. Bowdach challenges his convictions not only on the ground that they were obtained with the fruits of invalidly approved wiretaps, but also on the grounds inter alia that certain provisions of the Extortionate Credit Transactions Act (the 'Act) are unconstitutional and that certain evidence was inadmissible.

We affirm.

I. FACTS

At the time of his arrest, Bowdach was employed as a used-car salesman in Miami. There is ample evidence that he frequently made extortionate cash loans on the side, many to others in the usedcar business. His conviction for conspiring to violate section 892 of the Act, which prohibits making extortionate extensions of credit, ³ was based primarily on the evidence of transcribed wire-tapped conversations between him and Cicchini. His convictions on the substantive counts of violating sections 892 and 894, which prohibit collections of extensions of credit by extortionate means, ⁴ were based on the testimony of several debtors-- principally Joseph S. Leal Richard ('Rick') Moore, and James Bell-- and of a Mrs. Margaret Stallard.

It is unnecessary to review the wiretap evidence, because appellant complains only of the procedures used to obtain it and not of its sufficiency; however, the evidence of the three debtors named above and of Mrs. Stallard requires specific attention. Count 12 of the indictment pertained to loans made to Leal; counts 2 and 3 pertained to loans made to Moore; counts 14, 16 and 17 pertained to loans made to Bell. Appellant was convicted on each of these counts. Mrs. Stallard did not borrow money from the appellant; she testified of threats amde to her by the appellant in a dispute over a car sold to her by him, and of a threatening message he asked her to deliver to Bell.

Leal borrowed money twice from Cicchini, $100 in January, 1970 and $300 in March or May, 1970. The interest on each loan was '6, 7 or 8%' per week. Leal reluctantly admitted that he knew at the time of the first loan that if he didn't repay it, he would 'get a broken leg or something.' He said he knew at the time the second loan was made that Cicchini had a reputation for violence concerning the lending of money. Leal was instructed twice by Cicchini to make his payments to the appellant, and Leal paid off the final installments of principle and interest on each loan to the appellant.

Moore borrowed a total of $300 to $350 from the appellant in two transactions early in 1970. Interest was $14 per week for one year on the $200 transaction. Moore said that at the time of the loans he knew the appellant had a reputation for violence in his collection practices.

Bell took out two loans from the appellant, for $200 in early 1970 and for $50 a few months later. Interest was $20 per week. Bell said that he 'understood' at the time of the first loan that 'if I didn't pay somebody comes around and beats you up.' In April, 1970, Bell left Miami while still owing the appellant $250.

Mrs. Stallard testified that she had purchased a car from the appellant for $1,005 in early 1970, paid $300 down and arranged with the appellant to make weekly payments of $15. The car did not run properly, and Mrs. Stallard returned it to the appellant but continued to make weekly payments. At one point, she threatened to go to the State Attorney over the transaction, but the appellant told her '. . . you got those two kids to think about, if you do this (complain to the State Attorney), a lot of harm can come to you and those kids.' Mrs. Stallard also testified that after Bell left Miami, the appellant telephoned her and asked her to relay a message to Bell: 'He (the appellant) said that he had men looking for Bell in North Carolina and that they were going to bring him back and shoot him and cut his balls off and hang them in the Dolphin's Locker (a bar where she worked).' She added that the appellant also told her that he had held a gun on Moore and cut him with a knife. Mrs. Stallard relayed the message to Bell.

II. VALIDITY OF THE WIRETAPS

Appellant contends that the evidence obtained from wiretaps on three telephones at his place of business should have been suppressed at trial, because the procedures used in obtaining the taps did not comport with 18 U.S.C. 2516(1), ⁵ which requires authorization for wiretaps to be made by the 'Attorney General, or any Assistant Attorney General specially designated by the Attorney General,' and 18 U.S.C. 2518(1)(a), (4)(d), ⁶ which requires that the individual authorizing the application and order for a wiretap must be identified to the issuing judge. When the point was raised for the first time on appeal, we remanded for evidentiary hearing to determine whether then Attorney General Mitchell had personally authorized the application or whether he had designated then Assistant Attorney General Will Wilson to undertake the discretionary act of authorization. See United States v. Bowdach, 474 F.2d 812, 814.

The facts developed at the hearing were almost identical in effect with those in the Supreme Court case of United States v. Chavez, supra. The wiretap phase of the case has therefore been decided adversely to Bowdach's contentions.

III. USE OF REPUTATION EVIDENCE IN SECTION 892 CONVICTIONS

Appellant challenges his convictions for substantive violations of section 892 on the grounds that the admission of evidence as to his reputation for violence in credit practices was not statutorily authorized and not constitutionally permissible.

A. Statutory Authorization

Appellant contends that the admission of reputation evidence was not authorized under 892(c), because the prerequisite was not met of showing that 'direct evidence of the actual belief of the debtor as to the creditor's collection practices is not available.' It is unnecessary to meet this contention, however, because the admission of such evidence was clearly authorized under 892(b)(3)(B), which allows evidence of the debtor's reasonable belief that the 'creditor had a reputation for the use of extortionate means' in his collection practices.

Although reputation evidence is allowed under both 892(b)(3)(B) and 892(c), the operation of the two sections is not identical and it may be helpful at this point to note the differences. 892(c) allows the introduction of evidence of the creditor's reputation in collection practices, provided three prerequisites are met:

1) evidence has been introduced tending to show that the loan would be legally unenforceable, and

2) that the annual rate of interest exceeded 45 per cent, and

3) 'direct evidence of the actual belief of the debtor as to the creditor's collection practices is not available.' Where the requirements are satisfied reputation evidence may be introduced 'for the purpose of showing the understanding of the debtor and the creditor' at the time of the loan. ⁷ There are no prerequisites, however, for the introduction of reputation evidence under 892(b)(3)(B). Such evidence is merely one of four factors that must be established to make out a prima facie...