U.S. v. Quintanilla

• Decision Date: 20 August 1993
• Docket Number: 91-2224,Nos. 91-2223,s. 91-2223
• Citation: 2 F.3d 1469
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Carlos QUINTANILLA and Leticia Gutierrez, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1469

2 F.3d 1469

UNITED STATES of America, Plaintiff-Appellee, v. Carlos QUINTANILLA and Leticia Gutierrez, Defendants-Appellants.

Nos. 91-2223, 91-2224.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 28, 1993.

Decided Aug. 20, 1993.

Barry R. Elden, Asst. U.S. Atty., Kathleen T. Murdock, Asst. U.S. Atty., argued, Criminal Receiving, Appellate Div., Chicago, IL, for plaintiff-appellee in Nos. 91-2223 and 91-2224.

Nan R. Nolan, argued, Robinson, Curley & Clayton, Kenneth G. Mason, Chicago, IL, for defendant-appellant in No. 91-2223.

Robert S. Bailey, argued, Chicago, IL, for defendant-appellant in No. 91-2224.

Before RIPPLE and KANNE, Circuit Judges, and WOOD, Jr., Senior Circuit Judge.

KANNE, Circuit Judge.

This case involves a scheme to defraud the G. Heileman Brewing Company through the submission of false funding proposals to the company's corporate sponsorship program. Carlos Quintanilla and Leticia Gutierrez, two participants in the scam, were convicted of conspiring to violate the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Sec. 1962(c), and of transporting stolen property in interstate commerce, 18 U.S.C. Secs. 2 and 2314. In addition, Gutierrez was convicted of money laundering, 18 U.S.C. Sec. 1956(a)(1)(A) and (B)(i), conspiracy to defraud the IRS, 18 U.S.C. Secs. 2 and 371, and failure to file income tax returns, 26 U.S.C. Sec. 7203. The defendants appeal their convictions, alleging assorted errors. We affirm.

I.

As part of its marketing strategy, G. Heileman Brewing Company of Wisconsin operates a nationwide corporate sponsorship program. Under the program, Heileman funds activities, such as sporting events and neighborhood festivals, at which it can advertise and promote its various brands of beer. Organizations seeking Heileman's financial assistance must submit proposals describing the event to be sponsored with a request for the necessary funds. The funds awarded under the program are to be used exclusively for the proposed event.

In 1983, Heileman made Joseph Monreal its Director of Hispanic Market Development. As part of his job, Monreal screened proposals for corporate sponsorship funds and made preliminary recommendations. At the time, Monreal, who lived in Milwaukee, was romantically involved with Leticia Gutierrez, the assistant manager and administrator of the Mexico Medical Center in Chicago.

In late summer 1983, Monreal devised a scheme to defraud Heileman using the corporate sponsorship program. Gutierrez agreed to help him. Monreal approached officials of several Chicago-area Hispanic organizations, persuading them to allow Gutierrez to draft proposals on behalf of their groups. Once the proposals were submitted to Heileman, Monreal would recommend they be funded. In return, the officials would kick back a portion of the award to Monreal. Gutierrez cashed the kickback checks.

Carlos Quintanilla, who had met Monreal in 1982, was the founder and executive director of Operation Search, a not-for-profit community organization providing employment services to low and moderate income residents in the Westtown and Humboldt Park communities of Chicago. Quintanilla joined Monreal's scheme; in return for favorable recommendations on proposals submitted on behalf of Operation Search, Quintanilla would give Monreal a cut of the award.

From 1983 to 1987, in addition to the Operation Search proposals, Monreal and Gutierrez drafted and submitted fraudulent funding requests for seven other community organizations in the Chicago area. Some proposals inflated the amount requested; others sought funding for nonexistent events. As a result of Monreal's scheme, Heileman authorized expenditures totalling $693,964. Of this amount, Monreal pocketed $295,054. Through Operation Search, which he controlled, Quintanilla received $175,000. Gutierrez received $38,000, and obtained another $12,400 for certain friends of hers.

Gutierrez's relationship with Monreal turned sour and, in June 1986, she informed Heileman's General Counsel about Monreal's scheme. The matter was eventually referred to the Office of the United States Attorney for the Northern District of Illinois and, from late 1986 to May 1990, Gutierrez cooperated with the Assistant United States Attorneys ("AUSAs") investigating Monreal. ¹ In 1987, Gutierrez made monitored phone calls to Monreal, and wore a concealed electronic recording device during conversations with him. She also produced copies of relevant documents.

In August 1987, AUSA Scott Mendeloff issued a subpoena directing Gutierrez to appear before a federal grand jury impanelled to investigate Monreal's doings. She was advised of her right to counsel, and consulted Patrick Reilly, an attorney with whom she had previously worked on a Hispanic community project to build a soccer stadium. Reilly called Mendeloff to ask if Gutierrez would receive immunity in exchange for her cooperation in the investigation. Mendeloff told Reilly that no immunity would be granted, indicating that Gutierrez had admitted to her participation in the scheme and that her signature was on all the kickback checks. Mendeloff further stated that he was prepared to indict, convict, and, if necessary, immunize Gutierrez at a later date in order to obtain testimony against other participants.

Reilly then asked Mendeloff if the government would consider granting Gutierrez immunity if it were able to convict "the big fish." Mendeloff's notes of the conversation indicate he told Reilly that, in such a situation, he did not know what the government would do, adding that it "may not prosecute [Gutierrez], but probably would have to." The conversation ended with Mendeloff saying that he would inform the sentencing court of "every iota of [her] cooperation." In a second phone call that day, Reilly told Mendeloff that he had consulted with Gutierrez, who had decided to continue cooperating with the authorities because "she doesn't have much choice." Mendeloff replied that he would do what he could for her, iterating that he would inform the court "in great detail" of her cooperation.

In November 1987, Gutierrez phoned Mendeloff, stating that she was upset over the case and had contemplated suicide. She asked if conversations with her doctor were privileged. Mendeloff advised her that he was not her attorney, and explained that conversations with her doctor were privileged as long as she did not disclose the contents to others. Gutierrez subsequently continued to cooperate with the AUSA without obtaining counsel.

In April 1990, Gutierrez was served with a second grand jury subpoena. The next month she met with Mendeloff to review a draft of a grand jury statement prepared by the AUSA and based on Gutierrez's previous statements about the scheme to defraud Heileman as well as documents she had provided. Gutierrez was also presented with a draft of a plea agreement pertaining to charges against her being considered by the grand jury. When she asked what would happen to her, Gutierrez was told that "in all likelihood the government would charge her with crimes," but that her cooperation would be made known to the sentencing court. Gutierrez said that perhaps she should get a lawyer; Mendeloff offered to obtain one for her and called the Federal Defender's Office. Mendeloff gave Gutierrez the name of the attorney on duty at the Defender's Office and told her she could go downstairs to see him. Gutierrez subsequently indicated that she did not think she would get a lawyer, stating, "I did wrong and I knew I did wrong from the beginning." As she left Mendeloff's office, Gutierrez stated that she would continue to cooperate and "see what happens." She never testified before the grand jury.

In September 1990, the grand jury issued a four count indictment listing Monreal and Quintanilla as defendants. The next month, the grand jury returned a forty count superseding indictment that added Gutierrez as a defendant. Monreal pleaded guilty to RICO conspiracy and eventually testified against Quintanilla and Gutierrez. Gutierrez filed a pre-trial motion to dismiss the indictment or, in the alternative, for a hearing under Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972), to determine whether the indictment was tainted by the improper use of statements she believed should be immunized. The district court denied the motion. United States v. Quintanilla, 760 F.Supp. 687, 694-96 (N.D.Ill.1991).

The case proceeded to trial, and the jury convicted Quintanilla and Gutierrez of the aforementioned crimes. The district court sentenced each defendant to six months in prison on the RICO conspiracy count, and five years of probation on each remaining count. ² Both defendants timely appealed their convictions.

II. Carlos Quintanilla

Quintanilla challenges his convictions on five counts of interstate transportation of stolen property ("ITSP") under the National Stolen Property Act, 18 U.S.C. Sec. 2314, and for conspiracy to violate RICO, 18 U.S.C. Sec. 1962(d). According to his first argument, his ITSP convictions should be reversed because the government amended the indictment during trial, thus depriving him of his Fifth and Sixth Amendment rights. ³ We recount the events necessary to address this claim.

After some of the counts charged in the superseding indictment had been severed on motion by the defendants, Quintanilla went to trial on charges of RICO conspiracy, mail and wire fraud, interstate transportation of funds obtained by fraud, and conspiracy to defraud the IRS. At the close of the government's case-in-chief, the district court granted Quintanilla's motion for judgment of acquittal on the mail fraud count (Count Four) and the wire fraud count. The government voluntarily dismissed as multiplicitous five of the ITSP counts. Then, after the defense had rested but before the jury was instructed, the government, over objection by Quintanilla's cou...