U.S. v. Italiano, No. 87-3201

CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)
Writing for the CourtBefore VANCE and HATCHETT; HATCHETT; Justice Stevens in dissenting addressed the effect of McNally 's holding on cases involving intangible rights other than the general right of the citizenry to a fair and impartial government. Addressing, in partic
Citation837 F.2d 1480
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Nelson ITALIANO, Defendant-Appellant.
Docket NumberNo. 87-3201
Decision Date22 February 1988

Page 1480

837 F.2d 1480
UNITED STATES of America, Plaintiff-Appellee,
v.
Nelson ITALIANO, Defendant-Appellant.
No. 87-3201.
United States Court of Appeals,
Eleventh Circuit.
Feb. 22, 1988.

John R. Lawson, Jr., Richard W. Reeves, Stephen O. Decker, Lawson, McWhirter, Grandoff & Reeves, Tampa, Fla., for defendant-appellant.

Robert W. Merkle, U.S. Atty., David H. Runyan, Terry A. Zitek, Asst. U.S. Attys., Tampa, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Florida.

Before VANCE and HATCHETT, Circuit Judges, and OWENS *, Chief District Judge.

HATCHETT, Circuit Judge:

In this criminal appeal, we are called upon to determine whether the Supreme Court's recent interpretation of the federal mail fraud statute in McNally v. United States, 483 U.S. ----, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987) is applicable in a slightly different factual scenario. Holding that McNally applies, we vacate the conviction and judgment.

FACTS

Appellant, Nelson A. Italiano worked for Coaxial Communications of the Suncoast, Inc. (Coaxial Communications), a corporation formed for the purpose of obtaining a cable television franchise contract with the city of Tampa, Florida. In seeking to obtain the city of Tampa franchise, Coaxial Communications decided to establish a presence in the area by securing franchises in the neighboring city of Temple Terrace and in Hillsborough County. Although

Page 1481

less lucrative, Coaxial Communications' management believed that the establishment of these franchises would enhance the company's chances of obtaining the city of Tampa franchise.

In the spring of 1980, Italiano approached Charles F. Bean, a Hillsborough County commissioner, and indicated to Bean that Coaxial Communications was interested in obtaining a cable television franchise. Italiano told Bean that the owner of Coaxial Communications was a wealthy man and that Bean might anticipate amassing great wealth if he supported Coaxial Communication's efforts to obtain the cable television franchise. After having conversations with fellow-commissioners Robert Curry and Jerry Bowmer, Bean learned that Curry and Bowmer were also committed to supporting Coaxial Communication's efforts to be awarded the franchise.

On June 11, 1980, by a margin of three-to-two, the Hillsborough County Board of County Commissioners voted to grant a cable television franchise to Coaxial Communications. County Commissioners Bean, Curry, and Bowmer voted for Coaxial Communications; Commissioners Platt and Davin voted against Coaxial Communications. On July 23, 1980, the Hillsborough County Commission ratified the contract between Hillsborough County and Coaxial Communications by an identical three-to-two vote.

Between the time of the awarding of the franchise contract and its ratification, Italiano gave Bean envelopes containing $2,500 in cash on at least two occasions. On each occasion, Italiano told Bean that the money was from Dennis McGillicuddy, a principal of Coaxial Communications.

Ultimately, Coaxial Communications did not obtain the cable television franchise for the city of Tampa. Coaxial Communications, having obtained the franchise for the county of Hillsborough, sold that franchise and left the area.

PROCEDURAL HISTORY

In May, 1985, a federal grand jury in the Middle District of Florida returned a forty-five count indictment charging twenty-five individuals and five corporations with racketeering, fraud, extortion, obstruction of justice, and several Travel Act offenses relating to a widespread bribery scheme within Hillsborough County, Florida. The grand jury charged appellant, Italiano, with a single count of mail fraud in violation of 18 U.S.C. Sec. 1341.

On July 10, 1985, Italiano moved to dismiss the indictment on the ground that the mail fraud statute "was only intended to reach schemes that have as their goal an economic loss suffered by the victims and not an intangible right to good government." The district court, on December 10, 1985, denied that motion, along with all others which were pending. A jury found Italiano guilty of mail fraud, as charged in Count IV of the indictment. The district court sentenced him to two years confinement in the custody of the Attorney General.

ISSUE

The sole issue in this appeal is whether the district court erred by denying Italiano's motion to dismiss the indictment on the ground that it failed to allege that the county or state was deprived of property or money by the alleged scheme.

DISCUSSION

Italiano, relying upon the Supreme Court's recent pronouncement in McNally v. United States, 483 U.S. ----, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987) that the federal mail fraud statute is not implicated based on the intangible right of the citizenry to good government, argues that the district court erred by not dismissing the indictment. Italiano argues that the indictment charged that he violated the mail fraud statute, but did not charge that the state or county was deprived of any money or property as a result thereof.

In response, the government admits that the indictment does not charge a deprivation of money or property. It argues, however, that a state bribery violation is still actionable under the mail fraud statute,

Page 1482

even in light of McNally, if it is calculated to deprive its victim of money or property.

A. The Indictment

"A grand jury indictment must set forth each essential element of an offense in order for a resulting conviction to stand." United States v. Outler, 659 F.2d 1306 (11th Cir.1981) (citing Russell v. United States, 369 U.S. 749, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962)). This rule serves a twofold function. First, it comports with the sixth amendment requirement that each criminal defendant "be informed of the nature and cause of the accusation." Inclusion of the essential elements of the offense in an indictment will provide the accused with the minimal information necessary to satisfy this requirement. Second, and more relevant to the facts of this case, is that the fifth amendment right to an indictment for defendants charged with serious crimes is only furthered where the grand jury is able to properly perform its fact-finding function. As we stated in Outler, "[a] grand jury can perform its function of determining probable cause and returning a true bill only if all elements of the offense are contained in the indictment." Outler, 659 F.2d at 1310.

With this view in mind, we review Count IV of the indictment in which Italiano is charged with mail fraud in violation of 18 U.S.C. Sec. 1341. 1 The essential elements of a mail fraud prosecution are (1) a scheme to defraud and (2) the use of the mails in execution or furtherance of that scheme. Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 362, 98 L.Ed. 435 (1954); United States v. Sawyer, 799 F.2d 1494, 1501-02 (11th Cir.1986), cert. denied, --- U.S. ----, 107 S.Ct. 961, 93 L.Ed.2d 1009 (1987).

Prior to the Supreme Court's pronouncement in McNally, several circuit courts of appeals had affirmed mail fraud convictions under expansive interpretations of the mail fraud statute. One theory which emerged as a result of liberal interpretation of the mail fraud statute is the "intangible rights doctrine." This doctrine, based on the theory that citizens have a right to honest and impartial government, has historically served as a vehicle by which the government has sought mail fraud convictions against government officials. See, e.g., United States v. Von Barta, 635 F.2d 999, 1005-06 (2d Cir.1980), cert. denied, 450 U.S. 998, 101 S.Ct. 1703, 68 L.Ed.2d 199 (1981); United States v. Keane, 522 F.2d 534 (7th Cir.1975), cert. denied, 424 U.S. 976, 96 S.Ct. 1481, 47 L.Ed.2d 746 (1976); United States v. States, 488 F.2d 761, 766 (8th Cir.1973), cert. denied, 417 U.S. 909, 94 S.Ct. 2605, 41 L.Ed.2d 212 (1974).

As explained by the Sixth Circuit in United States v. Gray, 790 F.2d 1290 (6th Cir.1986), rev'd sub nom., McNally v. United States, 483 U.S. ----, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), these cases

are premised on an underlying theory that a public official acts as 'trustee for the citizens and the State ... and thus owes the normal fiduciary duties of a trustee, e.g., honesty and loyalty' to the citizens and the State. The logic continues that, as the cestui, the public is entitled to the faithful and disinterested services of government servants and employees, and a public official may not deprive the public of its rights.

Gray, 790 F.2d at 1294 (quoting United States v. Mandel, 591 F.2d 1347, 1363 (4th Cir.), aff'd in relevant part, 602 F.2d 653 (4th Cir.1979) (in banc), cert. denied, 445 U.S. 961, 100 S.Ct. 1647, 64 L.Ed.2d 236 (1980) (citation omitted)).

McNally has emasculated the vitality of the intangible rights doctrine. In McNally, a public official of the Commonwealth of Kentucky and another person were indicted for engaging in a kickback scheme whereby the government official, acting on behalf

Page 1483

of the commonwealth, used his political influence to direct governmental insurance business to insurance companies in which the defendants had undisclosed financial interests. After a jury convicted the defendants on mail fraud and conspiracy counts and the court of appeals affirmed those convictions, the defendants appealed on the ground that the alleged kickback scheme was not cognizable under the federal mail fraud statute. 2

The Supreme Court in McNally observed that the sparse legislative history underlying section 1341 "indicates that the original impetus behind the mail fraud statute was to protect the people from schemes to deprive them of their money or property." McNally, 483 U.S. at ----, 107 S.Ct. at 2879, 97 L.Ed.2d at 300. Furthermore, the Court continued, Durland v. United States, 161 U.S. 306, 16 S.Ct. 508, 40 L.Ed. 709 (1896), "the first case in which [the] Court construed the meaning of the phrase 'any scheme or artifice to...

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25 practice notes
  • Borre v. U.S., No. 90-1632
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • August 5, 1991
    ...F.2d 1280, 1285 & n. 6 (11th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 246, 112 L.Ed.2d 205 (1990); see United States v. Italiano, 837 F.2d 1480, 1492-93 (11th Cir.1988) (Owens, C.D.J., dissenting) (citing 27 FLA.JUR.2D Franchises From Government Sec. 2 (1981)). The state law in this ca......
  • U.S. v. Dynalectric Co., No. 87-8451
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • November 21, 1988
    ...that the mail fraud statute did apply to schemes to defraud a victim of intangible property rights. See United States v. Italiano, 837 F.2d 1480 (11th Cir.1988) (extensive discussion of McNally and Carpenter and the ramifications of these cases on the application of the mail fraud The rule ......
  • U.S. v. Marcello, Nos. 88-3138
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • June 23, 1989
    ...States v. Dadanian, 856 F.2d 1391 (9th Cir.1988); United States v. Shelton, 848 F.2d 1485 (10th Cir.1988); United States v. Italiano, 837 F.2d 1480 (11th Marcello and Roemer maintain that McNally compels the vacating of their convictions because the indictment, proof at trial, and jury inst......
  • State v. Jess, No. 28483.
    • United States
    • Supreme Court of Hawai'i
    • March 31, 2008
    ...all elements of an offense, including extrinsic enhancers, logistically problematic as the process may be.16 United States v. Italiano, 837 F.2d 1480, 1482 (11th Cir.1988) ("`[A] grand jury can perform its function of determining probable cause and returning a true bill only if all elements......
  • Request a trial to view additional results
25 cases
  • Borre v. U.S., No. 90-1632
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • August 5, 1991
    ...F.2d 1280, 1285 & n. 6 (11th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 246, 112 L.Ed.2d 205 (1990); see United States v. Italiano, 837 F.2d 1480, 1492-93 (11th Cir.1988) (Owens, C.D.J., dissenting) (citing 27 FLA.JUR.2D Franchises From Government Sec. 2 (1981)). The state law in this ca......
  • U.S. v. Dynalectric Co., No. 87-8451
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • November 21, 1988
    ...that the mail fraud statute did apply to schemes to defraud a victim of intangible property rights. See United States v. Italiano, 837 F.2d 1480 (11th Cir.1988) (extensive discussion of McNally and Carpenter and the ramifications of these cases on the application of the mail fraud The rule ......
  • U.S. v. Marcello, Nos. 88-3138
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • June 23, 1989
    ...States v. Dadanian, 856 F.2d 1391 (9th Cir.1988); United States v. Shelton, 848 F.2d 1485 (10th Cir.1988); United States v. Italiano, 837 F.2d 1480 (11th Marcello and Roemer maintain that McNally compels the vacating of their convictions because the indictment, proof at trial, and jury inst......
  • State v. Jess, No. 28483.
    • United States
    • Supreme Court of Hawai'i
    • March 31, 2008
    ...all elements of an offense, including extrinsic enhancers, logistically problematic as the process may be.16 United States v. Italiano, 837 F.2d 1480, 1482 (11th Cir.1988) ("`[A] grand jury can perform its function of determining probable cause and returning a true bill only if all elements......
  • Request a trial to view additional results

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