U.S. v. Staszcuk

• Decision Date: 23 December 1974
• Docket Number: No. 73-1869,73-1869
• Citation: 502 F.2d 875
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Casimir STASZCUK, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 875

502 F.2d 875

UNITED STATES of America, Plaintiff-Appellee, v. Casimir STASZCUK, Defendant-Appellant.

No. 73-1869.

United States Court of Appeals, Seventh Circuit.

Argued April 4, 1974.

Decided Sept. 10, 1974, Rehearing En Banc Granted Dec. 23, 1974.

Sherman C. Magidson, Warren D. Wolfson, Chicago, Ill., for defendant-appellant.

James R. Thompson, U.S. Atty., Gary L. Starkman, Asst. U.S. Atty., Chicago, Ill., for plaintiff-appellee.

Before PELL and SPRECHER, Circuit Judges, and CAMPBELL, ^* Senior District Judge.

SPRECHER, Circuit Judge.

In 1967 defendant was elected alderman from the 13th ward in the City of Chicago. According to the evidence viewed in a light most favorable to the government, defendant accepted three payments of $3,000 each from a 'zoning consultant,' Al C. Allen. Allen testified he made the payments on behalf of his clients in return for defendant's agreement not to oppose their applications for zoning amendments relating to three pieces of property in the 13th ward.

Defendant was convicted by a jury on three counts of Hobbs Act violations, ¹ four counts of mail fraud, ² and two counts of filing false income tax returns. ³ He was sentenced to nine concurrent sentences of eighteen months each.

I. Hobbs Act Counts

The indictment charged defendant with obstructing, delaying and affecting commerce 'by means of extortion,' in that he 'obtained property not due either him or his office . . . with (Allen's) consent being induced under color of official right.' The indictment specified that Allen feared he would be unable to procure the zoning changes 'unless he compensated defendant to refrain from objecting to such . . . change(s) as a member of the Chicago City Council . . ..'

Apparently this is one of the first prosecutions under section 1951 to rely solely on subsection b(2)'s definition of extortion as 'the obtaining of property from another, with his consent, induced . . . under color of official right.' ⁴ All reported Hobbs Act cases charging extortion relied on the 'wrongful use of actual or threatened force, violence, or fear' section of the definition. The only exception is United States v. Kenny, 462 F.2d 1205 (3d Cir.), cert. denied, 409 U.S. 914, 93 S.Ct. 233, 34 L.Ed.2d 176 (1972), in which defendants were charged with extortion through wrongful use of fear or under color of official right.

Defendant concedes, as we believe he must, ⁵ that under the Hobbs Act 'color of official right' may replace the coercion of 'force, violence, or fear.'

Defendant argues, rather, that his acceptance of three $3,000 payments for not opposing the zoning changes was not under color of official right because it was not related to his official functions. An alderman need not oppose or favor a particular zoning application, and defendant offered some evidence that the City Council does not always act consistent with an alderman's position on a zoning change in his ward. His only authorities for this proposition are People v. Samuels, 188 Misc. 607, 71 N.Y.S.2d 562 (1947), and Collier v. State, 55 Ala. 125 (1876). In Samuels a tax collector was charged with extortion for accepting a fee to 'straighten out' a claim which he had no power to settle, compromise or influence. The court held that the statute covered only situations where the service provided by the official was within the scope of his public employment. In Collier a county attorney accepted fees for giving professional advice as a private attorney. The court held he may have accepted money under false pretenses, but since the fees did not relate to his official function he had not committed extortion.

The government presented sufficient evidence of an alderman's influence ⁶ over zoning applications in his own ward that the jury could conclude defendant's official functions encompassed the unbiased consideration and treatment of all zoning applications. The payments were made to defendant to influence his exercise of the political power he held as alderman over zoning applications. To accept money in return for an agreement not to oppose such applications-- in effect to suspend independent judgment on the merits of such zoning changes-- constitutes obtaining property from another, with his consent, induced under color of official right. The evidence supports defendant's convictions for extortion.

Conviction under the Hobbs Act, however, requires proof that the extortion had at least an arguably de minimus effect on interstate commerce. United States v. DeMet, 486 F.2d 816 (7th Cir. 1973), cert. denied, 416 U.S. 969, 94 S.Ct. 1991, 40 L.Ed.2d 558 (1974). To satisfy this jurisdictional element of the crime, the government presented evidence that on the rezoned properties in counts I and II were built apartment buildings that could not have been constructed under the previous zoning. Certain materials used in the construction of these buildings were shipped in interstate commerce. Because the rezoning, procured through extortion, created a demand for construction materials to be shipped into Illinois, the effect on interstate commerce ⁷ in counts I and II was direct and demonstrable. ⁸

The property in count III had to be rezoned to permit construction of an animal hospital. Once the zoning change was made, however, the veterinarian for whom the hospital was to be built backed out of the deal. The owner instead erected buildings which were proper under the previous zoning. To show the rezoning's effect on interstate commerce under count III, the government presented the testimony of one of three potential contractors, who said his company would have used materials from interstate commerce if it had been awarded the contract to construct the animal hospital.

The government cites several cases for the proposition that any potential effect on commerce satisfies the Hobbs Act. In United States v. Pranno, 385 F.2d 387 (7th Cir. 1967), cert. denied, 390 U.S. 944, 88 S.Ct. 1028, 19 L.Ed.2d 1132 and 390 U.S. 972, 88 S.Ct. 1094, 19 L.Ed.2d 1183 (1968), there was no delay in construction because the extortion money was paid and the building permit issued. The court upheld the Hobbs Act convictions because 'it was only necessary to prove that delay would have been caused had the owner and contractor refused payment and defendants carried out their threat to withhold the permit.' 385 F.2d at 390. But here the result of the extortion payment was exactly the same as if no extortion or rezoning had occurred: no shipment of materials in interstate commerce.

The court in United States v. Hyde, 448 F.2d 815, 836 (5th Cir. 1971), cert. denied, 404 U.S. 1058, 92 S.Ct. 736, 30 L.Ed.2d 745 (1972), made the point that there is no requirement 'the company be engaged in an interstate transaction at the moment of the extortion to support federal jurisdiction.' But the victim companies did participate in interstate activities within a year of the payoffs which permitted them to stay in business.

The victim in United States v. Tropiano, 418 F.2d 1069 (2d Cir. 1969), cert. denied, 397 U.S. 1021, 90 S.Ct. 1258, 25 L.Ed.2d 530 (1970), purchased trucks from an out-of-state corporation. By surrendering his right to solicit additional customers in response to extortionate threats by a competitor, the victim 'automatically limited his future orders' for the trucks. ⁹ The owner of the count III property, however, was not engaged in interstate commerce at the time of the extortion; the rezoning did not promote any future interstate activities because he never built the animal hospital.

We agree that the effect of the extortion on commerce does not have to be simultaneous with the extortion. Indeed, it followed the extortion by some months in counts I and II. But when the effect never materializes-- despite the failure or success of the extortion-- the commerce element of the Hobbs Act is not established. ¹⁰ Cf. United States v. Critchley, 353 F.2d 358 (3d Cir. 1965).

The convictions on counts I and II are affirmed; the conviction on count III is reversed.

II. Mail Fraud Counts

Applications for zoning changes are introduced before the City Council and referred to the Committed on Buildings and Zoning. The committee sets a date for a public hearing and sends form notices to occupants of buildings within 150 feet of the subject property. ¹¹ Four such notices are the mailings charged in the four mail fraud counts. Defendant argues that the committee's mailing of these notices was not in furtherance of his scheme to defraud.

We begin with the proposition that 'statutes such as section 1341 should be carefully and strictly construed in order to avoid extension beyond the limits intended by Congress.' United States v. Kelem, 416 F.2d 346, 347 (9th Cir. 1969), cert. denied, 397 U.S. 952, 90 S.Ct. 977, 25 L.Ed.2d 134 (1970). To support federal criminal jurisdiction, the mailing must be, in the words of the statute, 'for the purpose of executing such scheme or artifice.' The connection between the fraud and the use of the mails 'must be real and proximate, not merely abstract or remote.' United States v. Brickey,296 F.Supp. 742, 748 (E.D.Ark.1969).

The requisite connection was established in Pereira v. United States, 347 U.S. 1, 74 S.Ct. 358, 98 L.Ed. 435 (1954), where the victim used the mails to procure the cash she turned over to defendants. A letter or inquiry in response to a newspaper advertisement satisfied the statutory requirement in United States v. Hopkins, 357 F.2d 14 (6th Cir.), cert. denied, 385 U.S. 858, 87 S.Ct. 107, 17 L.Ed.2d 84 (1966). And the mailing of an I.R.S. interest-payment notice to legitimize a fictitious loan was considered integral to the pretense in United States v. Isaacs, 493 F.2d 1124, 1151 (7th Cir.), cert. denied, 417 U.S. 976, 94 S.Ct. 3184, 41 L.Ed.2d 1146 (1974).

But a use of the mails that is not a step toward receipt of the fruits of the scheme is not covered by section 1341. United States v. Maze,414 U.S. 395, 94...