U.S. v. Kaplan

• Decision Date: 22 January 1998
• Docket Number: No. 95-4908,95-4908
• Citation: 133 F.3d 826
• Parties: 11 Fla. L. Weekly Fed. C 985 UNITED STATES of America, Plaintiff-Appellee, v. Barry KAPLAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 826

133 F.3d 826

11 Fla. L. Weekly Fed. C 985

UNITED STATES of America, Plaintiff-Appellee, v. Barry KAPLAN, Defendant-Appellant.

No. 95-4908.

United States Court of Appeals Eleventh Circuit.

Jan. 22, 1998.

Bruce A. Zimet, Ft. Lauderdale, FL, for Defendant-Appellant.

Kendall Coffey, Dawn Bowen, Anne Ruth Schultz, Kathleen M. Salyer, Lawrence D. LaVecchio, U.S. Atty., Miami, FL, for Plaintiff-Appellee.

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

Before ANDERSON and BIRCH, Circuit Judges, and WOODS ^*, Senior Circuit Judge.

BIRCH, Circuit Judge:

This case requires us to determine whether a potential transfer of funds from a point outside the United States to a point inside a State, for the purpose of paying an extortion demand, establishes an effect on commerce sufficient to support federal jurisdiction under the Hobbs Act. See 18 U.S.C. § 1951. The district court held, and the government contends on appeal, that the simple payment of an extortion demand in interstate commerce, without any further effect on commerce, is sufficient to support a conviction under the Hobbs Act. We REVERSE.

BACKGROUND

In 1984 and 1985, defendant-appellant, Barry Kaplan, a resident of Miami, Florida, placed several hundred thousand dollars into two Panamanian bank accounts with the assistance of Pablo Arosemena, a Panamanian lawyer. Kaplan also gave Arosemena power of attorney over the two bank accounts for the ostensible purpose of disguising his ownership of the money and thus evading taxation in the United States. Thereafter, Kaplan sought access to those funds, but Arosemena refused to return the money. In January 1989, Kaplan met with Arosemena in his Panamanian office, where Kaplan claims Arosemena admitted that he had stolen the money. Kaplan also contends that Arosemena brandished a firearm during their conversation as he asked Kaplan what he was going to do about the theft.

Kaplan consulted another Panamanian lawyer, Mario Fonseca, to attempt to recover his money. Fonseca conducted an investigation into the matter and confirmed that Arosemena had stolen the money from the Panamanian accounts. When Fonseca met with Arosemena, Arosemena refused to deny the theft and warned Fonseca that he would report Kaplan's off-shore funds to the United States Internal Revenue Service if Kaplan pursued the matter. Fonseca immediately communicated this threat to Kaplan by letter, calling Arosemena's tactics "blackmail."

Fonseca testified that Kaplan could have brought a civil suit against Arosemena or sought criminal charges against him in Panama. ¹ Fonseca explained, however, that a civil suit would have served no purpose because Arosemena claimed to have no assets. Moreover, as a criminal prosecution certainly would have caused Arosemena to lose his license to practice law, thereby eliminating his primary means of earning money, any such course of action also would have defeated Kaplan's objective of repayment.

Next, Kaplan discussed his predicament with Roy Gelber, then a Dade County Circuit Judge. Gelber had served as Kaplan's lawyer on another matter while he was still in private practice. Gelber volunteered to contact Raymond Takiff, a Florida lawyer who had represented General Manuel Noriega, then the de facto leader of Panama. Kaplan, Gelber, and Takiff began to discuss this matter in June 1989 and continued until the early part of 1990. Neither Kaplan nor Gelber, however, were aware that Takiff had begun to cooperate with the federal government in an attempt to resolve his own criminal problems. Takiff became an informant for the government on or about August 4, 1989, and he began to record his conversations with Kaplan and Gelber. ² During these conversations, Takiff offered to contact high ranking individuals in the Panamanian Defense Forces ("PDF") who could retrieve the money from Arosemena in Panama. Although Takiff stated that his contacts would not kill Arosemena, the record shows that he expected those contacts to resort to violence or the Kaplan also decided that he would receive the money by accepting a check, in Florida, payable to a Bahamian attorney and referenced to another off-shore bank account. Although the transaction never took place, it is clear that Kaplan sought access to these funds because he had exhausted his personal assets and the record supports the inference that he would have made some attempt to use the money in Florida. Moreover, the record establishes that Gelber and Takiff were to receive a portion of the extortion demand as payment for their efforts.

threat of violence to obtain the money. On September 7, 1989, Takiff explained to Gelber and Kaplan that PDF soldiers would force Arosemena to sign cards to withdraw approximately $300,000 from a Panamanian bank account. Kaplan agreed to the details of the plan and was aware that violence would play a part in the transaction.

Kaplan, appeals his conviction for attempted extortion and conspiracy to commit extortion under the Hobbs Act and argues that the evidence the government presented at trial was insufficient to show any effect on commerce as contemplated by the statute. Kaplan presented this issue to the district court in a motion for a judgment of acquittal and new trial pursuant to Fed.R.Crim.P. 29(a) & 33, but the district court denied relief. Although Kaplan challenges his conviction on a number of additional grounds, since we hold that the district court erred by finding an effect on commerce on the facts of this case, we limit our discussion to that issue.

DISCUSSION

The Hobbs Act provides for the federal prosecution of a defendant who attempts or conspires to extort property in a manner that obstructs or affects commerce. See 18 U.S.C. § 1951(a). ³ The language of the statute, as well its historical context, demonstrate that Congress did not intend to transform every extortionate transaction into a federal crime. Instead, the Hobbs Act applies only to those extortionate acts that affect interstate commerce. See generally United States v. Staszcuk, 517 F.2d 53 (7th Cir.1975) (en banc ) (providing an excellent history of the Hobbs Act). As a result, the government must prove both extortion and an effect on commerce as the two essential elements of a Hobbs Act crime. See Stirone v. United States, 361 U.S. 212, 218, 80 S.Ct. 270, 274, 4 L.Ed.2d 252 (1960) ("The charge that interstate commerce is affected is critical since the Federal Government's jurisdiction of this crime rests only on that interference."). Although the Hobbs Act's definition of commerce is intended to be broad, and we have held that the required effect on commerce need only be minimal, some effect on commerce nevertheless must exist to support federal jurisdiction. See United States v. Castleberry, 116 F.3d 1384, 1386 (11th Cir.) (reaffirming that the government need only show that "the extortionate activity has a minimal effect on interstate commerce ...."), cert. denied, --- U.S. ----, 118 S.Ct. 341, 139 L.Ed.2d 265 (1997).

Kaplan argues that the government failed to provide evidence of how the extortion scheme in which he was involved could have produced an effect on commerce sufficient to support his conviction under the Hobbs Act. In reviewing the sufficiency of the evidence, we "consider the evidence in the light most favorable to the Government and draw all inferences and credibility choices in favor of the jury's verdict." Id. at 1387-88. We, therefore, must affirm Kaplan's conviction if any reasonable construction of the evidence would have permitted the jury to find guilt beyond a reasonable doubt. See id. at 1388. As the courts have recognized, however, proving an effect on The government advances two theories to support the conclusion that Kaplan's plan, if completed, would have affected interstate commerce. First, the government argues that it has satisfied the Hobbs Act's jurisdictional prerequisite because if Kaplan's extortion demand had been successful the ensuing transfer of money from Panama to Florida would have constituted a transaction in interstate commerce. ⁵ In direct support of the government's argument, the Hobbs Act specifically defines commerce to include "all commerce between any point in a State ... and any point outside thereof...." 18 U.S.C. § 1951(b)(3). Nevertheless, the government has cited no case in which the victim's payment of an extortion demand, standing alone, provided the effect on commerce necessary to support a conviction under the Hobbs Act. The typical Hobbs Act case involves some element of commerce independent and apart from the transaction of paying an extortionist's demand. Indeed, the courts have gone to great lengths to identify how a defendant's actions affected that independent, preexisting commerce, rather than looking to the form of the extortion payment. See, e.g., United States v. Hollis, 725 F.2d 377, 380 (6th Cir.1984) (basing jurisdiction on a preexisting interstate contract between the parties rather than on the movement of the extorted funds across state lines). This approach is consistent with the language of the Hobbs Act, which criminalizes extortion that "obstructs, delays, or affects" commerce rather than extortion that itself constitutes commerce. 18 U.S.C. § 1951(a). Congress enacted the Hobbs Act (and its statutory predecessor) to "eliminate the 'levy of blackmail upon industry' " and therefore intended the statute to "remove artificial restraints on the free flow of goods." Staszcuk, 517 F.2d at 57, 58. This legislative emphasis on protecting industry and business explains the judicial focus on the victim's connection to interstate commerce rather than the form or structure of the extortion payment.

commerce when an individual rather than a business entity is the target of the extortion is no simple matter. See United States v. Collins, 40 F.3d 95, 99-100 (5th Cir.1994). ⁴

The government's argument, however, would require that we...