U.S. v. Harty

• Decision Date: 26 April 1991
• Docket Number: Nos. 89-2641,89-2642,89-2672,89-2671,s. 89-2641
• Citation: 930 F.2d 1257
• Parties: 32 Fed. R. Evid. Serv. 1010 UNITED STATES of America, Plaintiff-Appellee, v. Thomas Edward HARTY, Walter Lesczynski, Paul DiCaro, Michael Gurgone, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1257

930 F.2d 1257

32 Fed. R. Evid. Serv. 1010

UNITED STATES of America, Plaintiff-Appellee, v. Thomas Edward HARTY, Walter Lesczynski, Paul DiCaro, Michael

Gurgone, Defendants-Appellants.

Nos. 89-2641, 89-2642, 89-2671, 89-2672.

United States Court of Appeals, Seventh Circuit.

Argued May 10, 1990.

Decided April 26, 1991.

Stephen D. Anderson, Dept. of Justice, Chicago Strike Force, Chicago, Ill., for plaintiff-appellee.

William Hedrick, Skokie, Ill., Marvin Bloom, Miriam F. Miquelon, Debra R. Bernard, Keck, Mahin & Cate, Philip Krasny, Schlesinger & Krasny, Chicago, Ill., for defendants-appellants.

Before COFFEY and KANNE, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

COFFEY, Circuit Judge.

Thomas Harty, Walter Lesczynski, Paul DiCaro and Michael Gurgone were convicted by a jury for participating in a conspiracy to commit robbery and attempted robbery in violation of the Hobbs Act, 18 U.S.C. Sec. 1951, ¹ and the use of a firearm during the commission of a felony in violation of 18 U.S.C. Sec. 924(c)(1) and 18 U.S.C. Sec. 2; ² they appeal. Michael Gurgone also appeals his seven-year sentence as being excessive and disproportionate to the other defendants. We affirm.

I. BACKGROUND

On November 28, 1983, eight men attempted to burglarize the vault at Balmoral Park Race Track, a horseracing facility in Crete, Illinois. ³ The attempt was foiled when two security guards made a routine but unexpected inspection of the premises. The would-be robbers restrained the guards, but after learning that the guards were required to check in every 15 minutes, the robbers abandoned their quest and released the guards, since the unexpected security check deprived them of the five hours of uninterrupted time they anticipated they would have to crack the safe.

In the investigation of the attempted armed robbery, the government discovered that one Paul Panczko was involved in the conspiracy to commit armed robbery. ⁴ The government persuaded Panczko to assist the FBI investigation of the Balmoral armed robbery attempt to cut down on his jail time exposure. ⁵ Further, he was directed to wear a "wire" while engaging his co-conspirators in conversations. After acquiring the evidence against James Basile over Panczko's "wire," the government confronted Basile with the evidence, and he decided to enter into a plea agreement. ⁶ Prior to signing the plea agreement, Basile received a letter from the United States Department of Justice stating that they would request that the court grant Basile immunity from prosecution for any evidence that may be developed during the trial regarding his participation in any other organized crime activity. Upon the completion of their investigation, including the information received from the informants, Panczko and Basile, as well as the tape-recorded conversations between Panczko and the defendants, the government obtained criminal indictments against the other six alleged participants in the attempted armed robbery. The jury returned a verdict convicting the four appellants of conspiracy to commit armed robbery and attempted armed robbery. ⁷

II. DEFENDANTS' APPEAL OF JURISDICTION AND THE ADMISSIBILITY OF EVIDENCE

The appellants challenge the district court's jurisdiction under 18 U.S.C. Sec. 1951, alleging that the conspiracy to commit armed robbery and the attempted armed robbery did not involve interstate commerce; thus the crime is not under the Hobbs Act. They also assert that the admission of the taped co-defendant conversations violates Federal Rule of Evidence 804(b)(3) and the Confrontation Clause of the Sixth Amendment, as the tapes allegedly lack adequate indicia of reliability.

A. Jurisdiction over the Hobbs Act Charges

For federal jurisdiction to exist over a Hobbs Act violation, the government must demonstrate that there is a nexus between interstate commerce and the alleged conspiracy to commit the armed robbery and the attempted armed robbery. The requisite nexus may be established through a slight impact on commerce: "an effect on interstate commerce will be shown even if the actual impact on commerce is de minimis, or, in the absence of proof of actual impact, if there is a realistic probability that the [robbery] will have some effect on interstate commerce." United States v. Glynn, 627 F.2d 39, 41 (7th Cir.1980) (citation omitted); see also, e.g., United States v. Hocking, 860 F.2d 769, 777 (7th Cir.1988); United States v. Anderson, 809 F.2d 1281, 1286 (7th Cir.1987); United States v. Tuchow, 768 F.2d 855, 870 (7th Cir.1985). This court has previously found a nexus with interstate commerce under a "depletion of assets" theory. Under the "depletion of assets" theory, "commerce is affected when an enterprise, which either is actively engaged in interstate commerce or customarily purchases items in interstate commerce, has its assets depleted through [robbery], thereby curtailing the victim's potential as a purchaser of such goods." United States v. Blakey, 607 F.2d 779, 784 (7th Cir.1979) (quoting United States v. Elders, 569 F.2d 1020, 1025 (7th Cir.1978)); see also United States v. O'Malley, 796 F.2d 891, 902 (7th Cir.1986).

The government argues that the required nexus between interstate commerce and the alleged conspiracy to commit armed robbery and attempted armed robbery is established through the aforementioned depletion of assets theory. In United States v. Blakey, we held "that the removal of $1,000 from [the victim's] pocket could curtail his purchases ... in interstate commerce ... [and] that [extorted] payments much smaller than $1,000 have at least a de minimis impact on interstate commerce." 607 F.2d at 784 (citations omitted). Thus, the government argues that if the extortion of less than $1,000 can impact interstate commerce, certainly an attempted theft of over $500,000 will provide the requisite nexus.

Conversely, the appellants contend that the government failed to demonstrate that the conspiracy to commit armed robbery and attempted armed robbery had a nexus with interstate commerce. They concede that the business of operating Balmoral Racing Club, Inc. has an impact on interstate commerce, but they assert that the monies in Balmoral's vault on the night of the armed robbery attempt was not the property of Balmoral because from October 2, 1983, to November 27, 1983, the day before the robbery attempt, Balmoral Racing Club, Inc. leased the racetrack and the $500,000 bank roll to Cloverleaf Racing Club, Inc. ⁸ The appellants argue that "[i]n the absence of testimony that the license agreement expired prior to the next day of racing (which according to the general manager would have been November 30, 1983), it is reasonable to conclude that Cloverleaf was still the lessee or owner of the funds in the vault...." Thus, according to the appellants' theory, the theft of the money would have impacted Cloverleaf rather than Balmoral, and the government presented no evidence that Cloverleaf's business activities were of such a nature that they qualified to establish the required nexus within the limits of the Hobbs Act. Although challenges to subject matter jurisdiction may be raised at any time, cf. Fed.R.Civ.P. 12(h)(3), the appellants' argument regarding the ownership of the money is a factual challenge not raised before the district court. "[T]his court has repeatedly stated that arguments raised for the first time on appeal are waived." Colon v. Schneider, 899 F.2d 660 (7th Cir.1990). Since the defendants failed to raise this argument before the district court which would have given the government a reason to establish the precise ownership of the money in the vault, we refuse to consider the argument at this late date.

Moreover, the appellants' jurisdictional challenge must fail regardless of who owned the money, for when Cloverleaf leased the racetrack from Balmoral, Cloverleaf's operation of the track impacted interstate commerce the same as if Balmoral were conducting the races. Approximately twenty-five percent of the horses and owners came from states other than Illinois, and many of the customers traveled to Illinois from the states of Michigan, Ohio, Indiana and Wisconsin. Furthermore, some of the racetrack's essential services (e.g., parimutuel betting machines and advertising) as well as some of the necessary supplies were delivered from out-of-state firms, and the use of telephones to obtain those services and supplies also involved interstate commerce. Balmoral's general manager testified (and the appellants do not deny) that the presence of the $500,000 bank roll, which Balmoral provided for parimutuel betting, was an integral part of the operation of the racetrack regardless of who operated it. Given these circumstances, had this attempted armed robbery been successful, it would obviously have impacted on interstate commerce because without the bank roll the racetrack would have been unable to operate (change money and accept wagers), thus curtailing its very operation regardless of the technical ownership and control of the property (money) in the vault. The district court's exercise of jurisdiction over the Hobbs Act charges was appropriate.

B. Admissibility of the Harty Tapes

As pointed out earlier, during the course of the government investigation, informant Panczko engaged and recorded the conversations of Harty, DiCaro and Gurgone regarding the attempted armed robbery. The defendants objected to the admission of this evidence, in particular the tapes of the conversations between Panczko and Harty. The petitioners contend that the receipt of these tapes in evidence violated Rule 804(b)(3) (because they lacked the requisite indicia of reliability) as well as their Sixth Amendment right to confront and cross-examine their accuser. ⁹

Rule 804(a) and (b)(3) provide for the admissibility of hearsay evidence when (1) the declarant is unavailable, and (2) the statement "at the time of its making ... so far tended to subject...