United States v. Azzarelli Const. Co.

• Decision Date: 18 September 1978
• Docket Number: Crim. No. 78-00020-D.
• Citation: 459 F. Supp. 146
• Parties: UNITED STATES of America, Plaintiff, v. AZZARELLI CONSTRUCTION COMPANY, Loitz Bros. Construction Company, Kankakee Paving Corporation, Central States Engineering, Inc., Joseph I. Azzarelli, John F. Azzarelli, Defendants.
• Court: U.S. District Court — Eastern District of Illinois

459 F. Supp. 146

UNITED STATES of America, Plaintiff, v. AZZARELLI CONSTRUCTION COMPANY, Loitz Bros. Construction Company, Kankakee Paving Corporation, Central States Engineering, Inc., Joseph I. Azzarelli, John F. Azzarelli, Defendants.

Crim. No. 78-00020-D.

United States District Court, E. D. Illinois.

September 18, 1978.

COPYRIGHT MATERIAL OMITTED

James R. Burgess, Jr., U. S. Atty., E. D. Illinois, East St. Louis, Ill., Richard J. Braun, Steven M. Kowal, Alan N. Grossman, Dept. of Justice, Antitrust Division, Chicago, Ill., for plaintiff.

Willis Ryan, Ryan & Cini, Mattoon, Ill., for defendant Azzarelli Const. Co.

William A. Barnett, Gerald Risner, Chicago, Ill, for defendant Joseph Azzarelli.

George Cotsirilos, Robert M. Stephenson, George J. Cotsirilos & Associates LTD, Chicago, Ill., for defendant John F. Azzarelli.

George D. Crowley, Richard Manning, Warren Fuller, Chicago, Ill., for defendant Central States Engineering, Inc.

ORDER

FOREMAN, Chief Judge:

The indictment in this case arises from an alleged bid-rigging scheme involving highway construction on federal aid routes 18 and 26. Count I charges that the defendants conspired to rig the bidding on certain contracts offered by the State of Illinois in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. Counts 2 through 13 charge that the defendants conspired to defraud the State of Illinois by submitting rigged bids and that in furtherance of this scheme the defendants used the United States mails in violation of 18 U.S.C. § 1341. Presently before the Court are a variety of pretrial motions filed by various parties.¹ The Court will rule on these motions seriatim.

I. Defendant Joseph Azzarelli's motion to dismiss Count 1; Defendant John Azzarelli's motion to dismiss indictment; Defendant John Azzarelli's Additional Motion to Dismiss the Indictment.

The defendants collectively have moved to dismiss the indictments on six grounds. They first contend that Count I which alleges a violation of the Sherman Act must be dismissed because it fails to allege the requisite intent, an essential element of the offense.

In United States v. United States Gypsum Co., ___ U.S. ___, 98 S.Ct. 2864, 57 L.Ed.2d 854 (1978), the Supreme Court held that the government must prove either that the defendant acted with knowledge that his acts would have probable anticompetitive effects or that the defendant acted with the purpose of producing anticompetitive effects. Count I charges that the defendants entered into a conspiracy, the essential terms of which were to suppress and eliminate competition for the construction of at least one specific portion of a public federal-aid highway project let by the State of Illinois on July 29, 1975, in unreasonable restraint of the above described interstate commerce and trade.

The requirement that an indictment contain a clear delineation of the offense charged is to provide (1) notice adequate to permit preparation of a defense; and (2) protection against double jeopardy. United States v. Willis, 515 F.2d 798, 799-800 (7th Cir. 1975). These objectives are satisfied even though the indictment does not state in haec verba the requisite mental state but fairly implies knowledge or intent. Willis, supra; United States v. Arteaga-Limones, 529 F.2d 1183 (5th Cir. 1976). The Court finds that the charge in Count I alleging a conspiracy to eliminate competition implies that the defendants acted with intent to accomplish that objective. Frohwerk v. United States, 249 U.S. 204, 39 S.Ct. 249, 63 L.Ed. 561 (1919); Williams v. United States, 208 F.2d 447, 449 (5th Cir. 1953). Therefore, the defendants' motion to dismiss Count I on this ground is DENIED.

The defendants next contend that Count I must be dismissed because it charges two separate and distinct offenses in paragraphs 13 and 15(f). A fair reading of the indictment supports the government's position that paragraph 13 generally describes the conspiracy and paragraph 15 including section (f) lists some of the acts performed to effectuate the conspiracy. The mere fact that the overt act charged is also criminal in nature does not make Count I duplicitous. Accordingly, this ground to dismiss Count I is also without merit.

The defendants next argue that the filing of a criminal antitrust charge precludes the filing of additional charges for mail fraud arising from the same transaction. Thus, they contend that Counts 2 through 13 should be dismissed because (a) Count I charges an antitrust violation and Congress intended to limit the maximum penalty proscribed by the Sherman Act thereby foreclosing prosecution under any other statute that would increase the ceiling of that penalty; (b) Congress did not intend the mail fraud statute to cover conduct that is criminal only by virtue of government prohibition; and (c) Congress never intended the mail fraud statute to be extended to areas already covered by other comprehensive statutes such as the Sherman Act.

The Court notes, at the outset, that the counts in the indictment allege separate and distinct offenses which are violations of separate statutes with different elements. United States v. Brighton Bldg. & Maintenance Co., 435 F.Supp. 222 (N.D.Ill.1977). Thus, unless the Court finds that Congress intended the statutes to be mutually exclusive, no bar to prosecution under both statutes exists.

The Court has considered defendants' interpretation of both the mail fraud statute and the Sherman Act and hereby finds no implied intent to preclude prosecution under both statutes. While the Court agrees that the Sherman Act is specifically directed to the conduct charged here, the Court does not discern any clear indication that Congress intended it to be the only statute under which such conduct should be prosecuted if in fact the conduct also violates a separate statute with additional or different elements. Congressional silence in this regard at best indicates a decision to leave such matters in the discretion of the prosecuting authorities and the mere fact that this discretion to prosecute was not exercised until recently cannot be used to bolster defendants' argument.

The defendants' reliance on United States v. Henderson, 386 F.Supp. 1048 (S.D.N.Y. 1974) and United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974) is also misplaced. In Henderson, the defendant was charged with income tax evasion and mail fraud, the mail fraud count being based on the defendant's mailing his tax return to the Internal Revenue Service. Although the Court dismissed the mail fraud count, it specifically noted that schemes to defraud governmental units involving the purchase or sale of commodities or services is within the purview of the mail fraud statute. In the present case, unlike Henderson, supra, the alleged scheme concerns the purchase of services by the State of Illinois. Similarly, the Supreme Court in Maze, supra, upheld the reversal of the defendant's conviction for mail fraud because the Court found that the mailings occurred after the defendant had already obtained the object of his fraud. The alleged mailings in the present case occurred prior to the time the defendants received the proceeds of the alleged fraud. See, Brighton Bldg., supra at 229 n. 8. Accordingly, the defendants' motion to dismiss Counts 2 through 13 is DENIED.

The defendants next contend that the indictment is vague and ambiguous and, as such, they are unable to prepare a defense. The two criteria by which the sufficiency of an indictment is to be judged is whether it contains the elements of the offense intended to be charged and sufficiently apprises the defendant of what he must be prepared to meet and in case any other proceedings are taken against him for a similar offense, whether the record shows with accuracy to what extent he may plead a former acquittal or conviction. Russell v. United States, 369 U.S. 749, 763-64, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962). Considering these standards, this ground is also without merit.

The defendants next contend that the mailings charged in the indictment occurred after the low bidder had been agreed upon and thus, cannot support the mail fraud scheme charged in the indictment because these were not in furtherance of that scheme. The defendants, therefore, contend that the alleged scheme was complete once the respective companies chose the low bidder. A mailing in furtherance of the collection of proceeds from a fraudulent scheme is sufficient to support a conviction for mail fraud. United States v. Keane, 522 F.2d 534, 552 (7th Cir. 1975). The mailings charged in this indictment consist of executed copies of contracts and warrants for payment. The mailings, therefore, were in furtherance of the alleged fraudulent scheme. Accordingly, the motion to dismiss Counts 2 through 13 for this reason is also DENIED.

Defendants finally move to dismiss the indictment because of improper interrogation of the defendant John Azzarelli before the grand jury. The defendant John Azzarelli states that he informed the government, prior to being called to testify, that he intended to exercise his Fifth Amendment right to questions regarding his participation in the present case. He contends that the government nevertheless persisted in calling him to testify and, thereby, tainted the grand jury by asking prejudicial questions. The government defends its actions on the basis that defendant's counsel informed him that defendant would invoke his privilege with respect to some questions but not all. Moreover, the government states that defendant was given an opportunity to voluntarily present any exculpatory evidence and the grand jury was instructed to draw no inference from a witness's invocation of his Fifth Amendment privilege.

The Court agrees that defendants are entitled to a fair and impartial grand jury. Cassell v. State of Texas, 399 U.S. 282, 70 S.Ct. 629, 94 L.Ed. 839 (1950). The Court, however, has examined defendant ...