U.S. v. Sedovic

• Decision Date: 07 June 1982
• Docket Number: No. 80-2080,80-2080
• Citation: 679 F.2d 1233
• Parties: UNITED STATES of America, Appellee, v. Rudolph SEDOVIC a/k/a Rudy Sedovic, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1233

679 F.2d 1233

UNITED STATES of America, Appellee, v. Rudolph SEDOVIC a/k/a Rudy Sedovic, Appellant.

No. 80-2080.

United States Court of Appeals Eighth Circuit.

Submitted March 13, 1981.

Decided June 7, 1982.

Arthur S. Margulis, St. Louis, Mo., for defendant-appellant.

Robert D. Kingsland, U. S. Atty., Edward L. Dowd, Jr., Asst. U. S. Atty., Thomas E. Dittmeier, U. S. Atty., St. Louis, Mo., for appellee.

Before HEANEY, HENLEY ^* and McMILLIAN, Circuit Judges.

McMILLIAN, Circuit Judge.

Rudolph Sedovic appeals from a final judgment entered in the District Court ¹ for the Eastern District of Missouri after a bench trial finding him guilty of three counts of mail fraud in violation of 18 U.S.C. § 1341. The district court sentenced appellant to a total of two years imprisonment and five years probation. For reversal appellant argues that the district court erred in (1) admitting evidence produced by court-authorized electronic surveillance, (2) finding sufficient use of the mails, and (3) finding that appellant "devised" the scheme to defraud. For the reasons discussed below, we affirm the judgment of the district court, 500 F.Supp. 515.

Appellant was the chief auditor in the License Collector's Office of the City of St. Louis from 1975 through mid-1979. In July, 1979, appellant was indicted for mail fraud. The indictment charged appellant with helping businesses unlawfully obtain city business licenses on the basis of false business tax returns. Under the scheme businesses submitted false business tax returns by reporting reduced inventory, production, and sales figures. In exchange for gifts or cash, appellant conducted sham tax audits for the License Collector's Office. Upon completion of the sham audit and payment of a reduced tax, the License Collector's Office then mailed a city business license to the particular business.

I. Electronic Surveillance

Appellant first argues that the district court erred in admitting into evidence thirteen recorded conversations obtained as a result of two court-authorized periods of electronic surveillance of the License Collector's Office during the late spring of 1979. Having received prior authorization from the Assistant Attorney General, the government requested the first electronic surveillance order on April 25, 1979. The government's application was supported by the detailed affidavit of FBI Special Agent Martin J. Weber. The authorizing district judge ² found there was probable cause to believe that appellant, others named in the application, and persons unknown in the License Collector's Office had committed and were committing offenses involving extortion by public officials, bribery, racketeering, mail fraud, obstruction of justice, and conspiracy to commit those offenses. The district court then granted the government's application for twenty days of electronic surveillance, with periodic progress reports. On May 21, 1979, upon application by the government, the district judge authorized continued electronic surveillance for an additional thirty days, subject to periodic progress reports.

Appellant argues that electronic surveillance was unlawfully used to investigate an offense-mail fraud-not specifically listed in 18 U.S.C. § 2516. We disagree. As in a similar case decided by this court, United States v. Daly, 535 F.2d 434 (8th Cir. 1976), "(w)e find that (electronic surveillance) may be used to investigate mail fraud under certain circumstances present in this case." Id. at 439. ³

Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510-2520, imposes a general ban on the electronic interception and disclosure of wire and oral communications, but it authorizes electronic interception, upon prior application and approval by a judge of competent jurisdiction, by state or federal law enforcement officers investigating particular offenses listed in 18 U.S.C. § 2516. By developing such a list of offenses, Congress intended to restrict the government's use of electronic surveillance in the investigation of crime to particular offenses which involve national security or are "intrinsically serious or ... characteristic of the operations of organized crime." S.Rep.No.90-1097, 90th Cong., 2d Sess., reprinted in (1968) U.S.Code Cong. & Ad.News 2112, 2186; see 18 U.S.C. § 2516(1).

Appellant correctly argues that mail fraud, 18 U.S.C. § 1341, is not listed in 18 U.S.C. § 2516. Thus, the government could not have received authorization to conduct electronic surveillance on the basis of probable cause of mail fraud alone. However, as held in Daly, the government may lawfully use evidence of mail fraud-an offense not listed in 18 U.S.C. § 2516-obtained by electronic surveillance where the electronic surveillance was authorized to investigate racketeering involving mail fraud. 535 F.2d at 439. In the present case, as in Daly, the government sought to investigate mail fraud in connection with racketeering offenses in violation of Title IX of the Organized Crime Control Act of 1970, Pub.L.No.91-452, § 901(a), 84 Stat. 941 (1970), codified at 18 U.S.C. §§ 1961-1968. Title IX is popularly known as the Racketeer Influenced and Corrupt Organizations Act or RICO.

Section 2516, as amended in 1970, includes within the list of specific offenses for which interception of wire (and oral) communications is permitted, the activities penalized by 18 U.S.C. § 1963.... Section 1963 penalizes any pattern of racketeering activity affecting interstate commerce proscribed by 18 U.S.C. § 1962. Section 1961(1)(B), which defines the activities subject to the racketeering provisions, specifically refers to the mail fraud statute, 18 U.S.C. § 1341. (Mail fraud is a predicate offense for RICO purposes. See 18 U.S.C. §§ 1961(1)(B), 1961(5), 1962(c).)

Thus, (the district court's) order permitted interceptions specifically authorized by section 2516-interceptions of conversations relating to mail fraud racketeering activities violative of 18 U.S.C. §§ 1961 et seq.

United States v. Daly, supra, 535 F.2d at 439.

In addition, we note that appellant does not challenge the district court's finding of probable cause to believe that appellant and others had committed and were committing offenses involving extortion, bribery, racketeering, mail fraud, obstruction of justice, and conspiracy. We have reviewed the government's electronic surveillance application and supporting affidavit and agree with the district court's finding of probable cause. In particular we note that appellant was convicted of participation in precisely the mail fraud scheme involving the handling of city business licenses by the License Collector's Office described in the application and supporting affidavit. In fact, at trial three specific instances of mail fraud were proven.

In both Daly and the present case evidence obtained as a result of electronic surveillance authorized to investigate racketeering activity involving mail fraud was introduced in a prosecution for mail fraud. See id. at 440 n.6. We do not find Daly distinguishable from the present case on the ground that in Daly, in addition to being charged with mail fraud, the defendant had earlier "pleaded guilty to participating in a pattern of racketeering under § 1962(c) as a result of the wiretap." Id. at 439 (emphasis in original). Here, although appellant was not charged with racketeering, racketeering was one of the offenses under investigation. The decision to charge a particular defendant with one offense and not another is a matter within the discretion of the prosecuting authorities. This is especially true in racketeering investigations because racketeering is a crime composed of predicate offenses. 18 U.S.C. §§ 1961(1)(B), 1961(5), 1962(c); e.g., United States v. Anderson, 626 F.2d 1358, 1362-64 (8th Cir. 1980), cert. denied, 450 U.S. 912, 101 S.Ct. 1351, 67 L.Ed.2d 336 (1981).

In view of our holding that the district court did not err in admitting evidence of mail fraud obtained as a result of electronic surveillance authorized to investigate racketeering activity involving mail fraud, we do not reach appellant's alternative argument that disclosure of the mail fraud evidence was not authorized by 18 U.S.C. § 2517(5). ⁴

II. Use of Mails as Integral Part of Scheme

Appellant next argues that the district court erred in finding that the use of the mails was an integral part of the scheme or artifice. Appellant contends that because the mailings upon which the government relies occurred after the alleged receipt of payment, the mails were not used in furtherance of the scheme but were merely collateral or incidental to it. In support of his argument appellant relies upon United States v. Edwards, 458 F.2d 875, 880-83 (5th Cir.), cert. denied, 409 U.S. 891, 93 S.Ct. 118, 34 L.Ed.2d 148 (1972), which held that a clear and definite relationship must exist between the fraudulent scheme and the use of the mails. ⁵

To establish a violation of § 1341 ⁶ the government must prove a scheme to defraud and the mailing of a letter or other instrument for the purpose of executing the scheme. Although "it is not necessary that the scheme contemplate the use of the mails as an essential element," it is necessary for the mailings to be "sufficiently closely related to (appellant's) scheme to bring his conduct within the statute." If the appellant's scheme reached fruition prior to the mailings as did the respondent's in United States v. Maze, (414 U.S. 395, 402, 94 S.Ct. 645, 649, 38 L.Ed.2d 603 (1974) ), the mailings were not sufficiently related to the scheme to bring his conduct within the statute.

United States v. Cooper, 596 F.2d 327, 329 (8th Cir. 1979) (citations omitted).

Appellant's argument fails because, although he had been paid prior to the mailing of the bogus business licenses, the scheme was not complete until the merchants or manufacturers were in receipt of their licenses. United States v. Edwards, supra, ...