U.S. v. Masters

• Decision Date: 06 February 1991
• Docket Number: Nos. 89-2851,89-2872 and 89-2873,s. 89-2851
• Citation: 924 F.2d 1362
• Parties: 32 Fed. R. Evid. Serv. 408 UNITED STATES of America, Plaintiff-Appellee, v. Alan MASTERS, Michael J. Corbitt, and James D. Keating, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1362

924 F.2d 1362

32 Fed. R. Evid. Serv. 408

UNITED STATES of America, Plaintiff-Appellee, v. Alan MASTERS, Michael J. Corbitt, and James D. Keating,

Defendants-Appellants.

Nos. 89-2851, 89-2872 and 89-2873.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 14, 1990.

Decided Feb. 6, 1991.

Rehearing Denied in No. 89-2872

March 28, 1991.

Thomas Scorza, Barry R. Elden, Asst. U.S. Attys., Crim. Receiving, Appellate Div., Chicago, Ill., for U.S.

Patrick A. Tuite, Tuite & Associates, Chicago, Ill., for Alan Masters.

Jeffrey B. Steinback, Genson, Steinback & Gillespie, Chicago, Ill., for Michael J. Corbitt.

William P. Murphy, Murphy, Peters, Davis & O'Brien, Chicago, Ill., for James Keating.

Before BAUER, Chief Judge, and POSNER and KANNE, Circuit Judges.

POSNER, Circuit Judge.

Alan Masters and James Keating were charged in 1988 with, among other things, having "conduct[ed an] ... enterprise's affairs through a pattern of racketeering activity" in violation of 18 U.S.C. Sec. 1962(c), and (along with Michael Corbitt) of having conspired to do so, in violation of Sec. 1962(d); both are, of course, provisions of the RICO (Racketeer Influenced and Corrupt Organizations) statute. The statute provides that "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." Sec. 1961(4). The statutory term "pattern of racketeering activity" "requires at least two acts of racketeering activity," Sec. 1961(5), defined as violations of various federal and state statutes. The jury found Masters and Keating guilty on both counts and Corbitt guilty on the conspiracy count--the only one he had been charged with, because the statute of limitations had expired on his substantive violations. The judge gave Masters and Keating consecutive prison sentences of 20 and 20, and 20 and 15, years, respectively, and Corbitt 20 years. The judge also fined Masters $250,000 on the conspiracy count and ordered all three defendants to forfeit criminal proceeds of $42,000. These are all pre-Sentencing Guidelines sentences. There were other counts in the indictment besides the two RICO counts, but the jury acquitted the defendants on those counts.

There is no challenge to the jury instructions, so we must construe the facts as favorably to the prosecution as the trial record and the jury verdict permit. The facts are a lurid mixture of corruption and murder in a west suburban Chicago setting. Masters was a lawyer, Keating a lieutenant in the Cook County Sheriff's Police Department who commanded the vice squad and later the criminal investigative unit, and Corbitt the chief of police of Willow Springs. The RICO enterprise, as the government conceives it, was an informal association among the three defendants and three other entities (so a total of six in all): Masters' law firm (a professional corporation of which he was the sole shareholder and which employed another lawyer) and the two police departments. Between 1970 and June 1982, when Corbitt lost his job as chief of police of Willow Springs, Masters bribed Corbitt to refer persons arrested, ticketed, or investigated by the Willow Springs Police Department to Masters for legal assistance. Masters had similar kickback schemes with other police officers in the area. Keating entered the picture in 1972, two years after Corbitt. Between then and August 1984 Masters was the middleman in a scheme in which illegal bookmakers in Cicero, Illinois bribed Keating and officers under Keating's command to leave them alone.

In 1981 Masters discovered that his wife, Dianne, was having an affair. He asked a friend in the Cook County Sheriff's Police Department who would be in charge of any investigation arising out of events at Masters' home, and was disappointed when told that it would not be Keating. In January 1982 Dianne Masters hired a lawyer to file for a divorce. She let it be known that she hoped to obtain custody of her and Masters' four-year-old daughter. Masters hired a former police officer, Ted Nykaza, to install recording equipment in the Masters household for the purpose of eavesdropping on telephone conversations between Dianne and her paramour. Listening, with Nykaza and a Cook County Sheriff's Police sergeant, to one of the recorded conversations, Masters thought he heard Dianne and her paramour reminisce about the paramour's inserting a wine bottle into Dianne's vagina as part of their sex play. Masters exploded with anger and declared that he would have Dianne killed. Later he told a friend that he would ask Keating to kill her. Keating offered a former Cook County Sheriff's Police officer $25,000 to kill Dianne on Masters' behalf, explaining that Corbitt was unwilling to do the killing himself but had agreed to dispose of the body.

Dianne Masters disappeared in the early morning of March 19, 1982. Her body was recovered from the trunk of her car nine months later when the car was discovered submerged in a canal near Willow Springs. She had been beaten and shot. Probably Corbitt had driven the car into the canal, though the jury's findings on this point are ambiguous. In the following months Keating used his position in the Cook County Sheriff's Police Department to obstruct the investigation of Dianne Masters' disappearance. Masters collected the proceeds of a $100,000 policy on Dianne's life. No one was ever charged with the murder.

The jury found that Masters had planned and solicited the murder of Dianne, that Keating had aided and abetted Masters' planning and solicitation, that Keating had obstructed the investigation, that (subject to our earlier qualification) Corbitt had sunk the car in the canal, and that all three defendants had agreed to conceal their actions relating to Dianne's murder indefinitely.

There is no question that the jury found, on sufficient and indeed abundant evidence, that defendants Masters and Keating committed, and all three defendants conspired to commit, two or more criminal acts that constitute "racketeering activity" within the meaning of the RICO statute. There were many distinct acts of bribery, criminal solicitation, and other crimes that come within the broad statutory definition of racketeering activity. The questions relate to the statutory requirements of "enterprise" and of "pattern." The alleged enterprise is an informal consortium of a law firm and two police departments with the three individuals who are the defendants. The defendants argue that a RICO enterprise, unless it is a legal entity such as an individual, a partnership, or a corporation, can only be a "union or group of individuals " (emphasis added), which Masters' law firm, the Willow Springs Police Department, and the Cook County Sheriff's Police Department are not. The argument has repeatedly and we think correctly been rejected, illustrative decisions being United States v. Feldman, 853 F.2d 648, 655 (9th Cir.1988), and United States v. Perholtz, 842 F.2d 343, 352-53 (D.C.Cir.1988) (per curiam). The statute says " 'enterprise' includes"--not " 'enterprise' means." The point of the definition is to make clear that it need not be a formal enterprise; "associated in fact" will do. Surely if three individuals can constitute a RICO enterprise, as no one doubts, then the larger association that consists of them plus entities that they control can be a RICO enterprise too. Otherwise while three criminal gangs would each be a RICO enterprise, a loose-knit merger of the three, in which each retained its separate identity, would not be, because it would not be an association of individuals. That would make no sense.

The next question is whether the acts of this enterprise formed a pattern. That rarely is a problem with a criminal enterprise, as distinct from a lawful enterprise that commits occasional criminal acts. The business of a criminal enterprise is crime. The crimes form a pattern defined by the purposes of the enterprise. United States v. Pungitore, 910 F.2d 1084, 1104 (3d Cir.1990); United States v. Angiulo, 897 F.2d 1169, 1180 (1st Cir.1990); United States v. Indelicato, 865 F.2d 1370, 1383 (2d Cir.1989) (en banc) ("two racketeering acts that are not directly related to each other may nevertheless be related indirectly because each is related to the RICO enterprise"). The main purpose of the enterprise in this case was to bring under Masters' influence (for a price of course) the principal police agencies operating in his area of activity. He used this influence to obtain law business and to protect his clients. Like many a small businessman, legal and illegal, Ianni, A Family Business: Kinship and Social Control in Organized Crime 112, 127, 142 (1972), he did not make a rigid division between his business and his personal affairs. So when his wife's adultery and projected divorce brought about a personal crisis that he believed could best be resolved through murder, it was natural for him to "hire" his own criminal enterprise to help with the job. If it could protect bookmakers, maybe it could protect a murderer.

A criminal enterprise is more, not less, dangerous if it is versatile, flexible, diverse in its objectives and capabilities. Versatility, flexibility, and diversity are not inconsistent with pattern. The systematic corruption of law enforcement in the west Chicago suburbs brought about by the Masters enterprise could be used for a variety of purposes without destroying the integrity, the rationale, of the enterprise. The acts of a criminal enterprise within the scope of the enterprise's evolving objectives form pattern enough to satisfy the requirements of the RICO statute.

The most difficult issue relating to enterprise and pattern in this case is whether the two are separate. If the "enterprise" is just a name for the crimes the defendants committed, or for their agreement to commit these crimes that was...