U.S. v. Valenzeno

• Decision Date: 13 August 1997
• Docket Number: No. 95-4203,95-4203
• Citation: 123 F.3d 365
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Alan J. VALENZENO, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 365

123 F.3d 365

UNITED STATES of America, Plaintiff-Appellee, v. Alan J. VALENZENO, Defendant-Appellant.

No. 95-4203.

United States Court of Appeals Sixth Circuit.

Argued May 1, 1997.

Decided Aug. 13, 1997.

Robert E. Bulford (argued and briefed), Office of U.S. Attorney, Akron, OH, for Appellee.

Timothy A. Smith (argued and briefed), Cincinnati, OH, for Appellant.

Before: WELLFORD, MOORE and COLE, Circuit Judges.

WELLFORD, J., delivered the opinion of the court, in which COLE, J., joined. MOORE, J. (pp. 371-374), delivered a separate opinion concurring in part and dissenting in part.

OPINION

WELLFORD, Circuit Judge.

Defendant, Alan J. Valenzeno, acting as a tax preparer, ¹ and his co-defendant, Donald Bilbrey, acting as an unlicensed private investigator, were engaged in an illegal scheme to defraud Valenzeno's "clients" by requesting large sums of money in exchange for their promise to resolve the clients' problems with the Internal Revenue Service ("IRS"). Valenzeno and Bilbrey were charged in a thirteen-count indictment with extortion under the Hobbs Act (18 U.S.C. § 1681), conspiracy to commit that crime, obtaining consumer credit information under false pretenses under the Federal Credit Reporting Act (15 U.S.C. § 1681), and with filing false tax returns for 1991 (26 U.S.C. § 7206(1)). Valenzeno, whose appeal is the only one before us, was convicted on five counts in the indictment, was acquitted as to one count, and a mistrial was declared as to the other counts. On this appeal, he challenges his convictions under the Hobbs Act and under the Federal Credit Reporting Act; he does not challenge his conviction for the income tax violation.

A. Background

Connie Sickle learned that she and her husband were being audited by the IRS for failing to report about $10,000 in income. Upon her attorney's recommendation, Sickle contacted Valenzeno for his assistance with the audit. Valenzeno requested that she supply him with her social security number and other identifying information. Co-defendant Bilbrey, acting in concert with Valenzeno and using an alias, "Frank," informed the Sickles that they needed $3,500 in order to help the Sickles out of their tax troubles. Valenzeno and Bilbrey told the Sickles that the money would be used for so-called "public relation" purposes, which was apparently a euphemism for payments (probably illegal) to certain IRS representatives to avoid or prevent asserted criminal prosecutions against these clients for tax evasion. After being pressed for the money, Sickle professed an inability to pay that amount. Valenzeno had checked Sickles' credit information and advised Sickle that she could obtain the $3,500 through a cash advance on her MasterCard account. Valenzeno and Bilbrey told the Sickles that Mr. Sickle would likely go to jail if the problem was not cleared up. The Sickles promptly obtained the money through MasterCard and paid it over to Valenzeno. Within a month, defendant demanded another $3,000 to deal with the same tax problem, and the Sickles became suspicious.

The Sickles later contacted their attorney and related what had transpired. The attorney turned the information over to the proper authorities, and an investigation of Valenzeno and Bilbrey ensued. It was discovered that no IRS criminal investigation of the Sickles was then taking place, and that Valenzeno and Bilbrey had been engaged in "persuading" a number of Valenzeno's clients to make substantial payments to them for the so-called "public relation" purposes. As was admitted in Valenzeno's brief, he and Bilbrey split the proceeds bilked from his unfortunate clients instead of using the money to bribe some unknown representative of the IRS.

B. Hobbs Act Violations (18 U.S.C. § 1951)

Valenzeno claims that the Hobbs Act is unconstitutional. The Act proscribes the following:

Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section....

18 U.S.C. § 1951(a). The defendant, having been charged with extortion, maintains that the conduct described in the indictment is "non-commercial activity" with no effect on interstate commerce, and is thus beyond the authority of Congress to regulate, citing United States v. Lopez, 514 U.S. 549, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995). We review this constitutional issue de novo.

We agree with the position of the government and the district court that the legislation at issue is clearly "directed at protection of interstate commerce against injury from extortion." United States v. Green, 350 U.S. 415, 420, 76 S.Ct. 522, 526, 100 L.Ed. 494 (1956). The Supreme Court has held:

[T]he statutory language [of the Hobbs Act] sweeps within it all persons who have 'in any way or degree ... affect[ed] commerce ... by robbery or extortion.' 18 U.S.C. § 1951(a) (1976 ed.). These words do not lend themselves to restrictive interpretation; as we have recognized, they "manifest ... a purpose to use all the constitutional power Congress has to punish interference with interstate commerce by extortion, robbery or physical violence," Stirone v. United States, 361 U.S. 212, 215, 80 S.Ct. 270, 272, 4 L.Ed.2d 252 (1960). ² United States v. Culbert, 435 U.S. 371, 373, 98 S.Ct. 1112, 1113, 55 L.Ed.2d 349 (1978) (emphasis added).

In Lopez, the Court struck down the recently enacted Gun Free Zones Act of 1990 as beyond Congress's commerce clause power because the Act had "nothing to with 'commerce' or any sort of economic enterprise, however broadly one might define those terms." Lopez, 514 U.S. at 561, 115 S.Ct. at 1630-31. Congress, furthermore, made no reference to interstate commerce in the statute stricken; it contained "no express jurisdictional element [that would] limit its reach to a discrete set of firearm possessions [having] an explicit connection with or effect on interstate commerce." Id. at 561, 115 S.Ct. at 1631.

The Hobbs Act, unlike the Gun Free Zones Act, has been repeatedly upheld in its constitutionality. See, e.g., United States v. Peete, 919 F.2d 1168 (6th Cir.1990); see also United States v. Jarrett, 705 F.2d 198 (7th Cir.1983); Carbo v. United States, 314 F.2d 718 (9th Cir.1963); Nick v. United States, 122 F.2d 660 (8th Cir.1941). We stated in Peete:

While regulating attempts to affect interstate commerce may occasionally result in the Hobbs Act being employed to combat bribery and extortion in what are purely intrastate contexts, the reach of Congress's authority to enact such a statute has been upheld by the Supreme Court. "Extortionate credit transactions, though purely intrastate, may in the judgment of Congress affect interstate commerce...."

Peete, 919 F.2d at 1174 (quoting Perez v. United States, 402 U.S. 146, 154, 91 S.Ct. 1357, 1361, 28 L.Ed.2d 686 (1971)).

Congress intended that the Hobbs Act's protection of interstate commerce extend as far as the Constitution permits and no farther. Stirone v. United States, 361 U.S. 212, 215, 80 S.Ct. 270, 272, 4 L.Ed.2d 252 (1960). If Lopez indicates that the Commerce Clause gives Congress less power than was previously thought to be the case, the proper remedy would be to give the statute a narrower interpretation, or to require a more substantial jurisdictional nexus, not to hold facially invalid an Act of Congress. See Bass, 404 U.S. at 350, 92 S.Ct. at 523-24 (avoid federalism question by holding that ambiguous statute contained jurisdictional element and reversing conviction where government failed to prove nexus with interstate commerce). Compare United States v. Harrington, 108 F.3d 1460, 1470 (D.C.Cir.1997) (holding that robbery's effect of removing $1,000 from interstate bank transfer satisfied Hobbs Act jurisdictional element), with id. at 1473 (Sentelle, J., dissenting) (arguing that robbery had too small an effect on interstate commerce to satisfy constitution after Lopez ); United States v. Woodruff, 941 F.Supp. 910, 928 (N.D.Cal.1996) (granting judgment of acquittal of Hobbs Act charge because robbery had insufficient effect on commerce to withstand Lopez attack). ³ The Hobbs Act, which was enacted in order to protect interstate commerce, is a valid exercise of Congress' power to regulate and protect such commerce. Accord United States v. Bolton, 68 F.3d 396, 399 (10th Cir.1995); United States v. Stillo, 57 F.3d 553, 558 n. 2 (7th Cir.1995). Accordingly, we reject Valenzeno's attack on the constitutionality of the Hobbs Act.

Valenzeno also contends that there was insufficient proof of his acts of extortion as defined in the statute, 18 U.S.C. §§ 1951(a) and (b)(2). We review a sufficiency of the evidence claim by determining whether, "after viewing the evidence in a light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Collins, 78 F.3d 1021, 1030 (6th Cir.) (quoting Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979)), cert. denied, --- U.S. ----, 117 S.Ct. 189, 136 L.Ed.2d 127 (1996).

Valenzeno argues that what was involved with the Sickles and with other victims was more akin to bribery, a crime with which he was not charged, than to extortion. There is no dispute that Valenzeno misrepresented to the Sickles and to the other victims that he was going to use the money he extracted from them to bribe unidentified IRS representatives to eliminate their real or feared tax problems. Valenzeno, did not, in fact, bribe anyone; instead he extorted ⁴ money from those who relied upon his supposed tax service and expertise through fraud and misrepresentation. ⁵

Defendant's argument that his actions were more akin to bribery than extortion is based on a distinction between the two crimes as described...