United States v. Curcio

• Citation: 310 F. Supp. 351
• Decision Date: 24 February 1970
• Docket Number: Crim. No. 12625.
• Court: U.S. District Court — District of Connecticut
• Parties: UNITED STATES of America v. Francis CURCIO and John Mento.

310 F. Supp. 351

UNITED STATES of America v. Francis CURCIO and John Mento.

Crim. No. 12625.

United States District Court, D. Connecticut.

February 24, 1970.

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J. Daniel Sagarin, Asst. U. S. Atty., New Haven, Conn., for government.

Jacob D. Zeldes and Elaine S. Amendola, of Goldstein & Peck, Bridgeport, Conn., for defendant Curcio.

TIMBERS, Chief Judge.

Defendant Francis Curcio, together with defendant John Mento, has been charged in a two count indictment with knowingly having used extortionate means to collect an extension of credit and conspiring so to do, in violation of 18 U.S.C. § 894 (Supp. IV, 1965-68) and 18 U.S.C. § 2 (1964).

Defendant Curcio's motion to dismiss the indictment raises a number of distinct claims, each of which will be separately discussed.¹

I CLAIM OF UNCONSTITUTIONALITY OF TITLE II OF CONSUMER CREDIT PROTECTION ACT

Defendant claims that Title II of the Consumer Credit Protection Act, 18 U. S.C. §§ 891-96 (Supp. IV, 1965-68) (the Act), which deals with extortionate credit transactions and on which the indictment is based, is unconstitutional on several grounds. In passing upon defendant's claim in this respect, the Court necessarily must be guided by the well established principle that a strong presumption of validity attaches to an Act of Congress. United States v. National Dairy Corp., 372 U.S. 29, 32 (1963); United States v. Rumely, 345 U.S. 41, 45 (1953); Crowell v. Benson, 285 U.S. 22, 62 (1932).²

(A) Absence Of Basis For Federal Criminal Jurisdiction

Defendant's primary claim is that the Act and the indictment upon which it is based violate the Fifth and Tenth Amendments because of the asserted absence of any basis for federal criminal jurisdiction in the Act and the absence of jurisdictional allegations in the indictment.

In passing the Act, Congress relied on its power under the Constitution to "regulate Commerce with foreign Nations, and among the several States", to "establish . . . uniform Laws on the subject of Bankruptcies throughout the United States," and to "make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers." U.S.Const. art. I, § 8, cl. 3, 4, 18.

Moreover, the Act contains a strikingly articulate statement of congressional findings and declaration of purpose, as set forth in the margin,³ the thrust of which is to show the direct relationship between organized crime and extortionate credit transactions, and the determination of Congress to strike at such evils through the exercise of its commerce and bankruptcy powers.

The Act clearly is sustainable as a valid exercise of the power of Congress to regulate interstate commerce on the basis of its findings that extortionate credit transactions of the kind proscribed by the Act adversely affect interstate commerce. These findings were based on the evidence before Congress; they have a rational basis; and as such they are not open to question by this Court. United States v. Gainey, 380 U. S. 63, 66-68 (1965); Katzenbach v. McClung, 379 U.S. 294, 303-304 (1964); Tot v. United States, 319 U.S. 463, 466 (1943).

The fact that the Act makes certain extortionate credit transactions purely intrastate in character the basis of a criminal offense does not render the Act an invalid exercise of Congress' commerce power. Such intrastate activities may affect interstate commerce, as Congress specifically found: "Even where extortionate credit transactions are purely intrastate in character, they nevertheless directly affect interstate and foreign commerce." Supra note 3. As the Supreme Court pointed out in United States v. Wrightwood Dairy Co., 315 U.S. 110 (1942):

"The commerce power is not confined in its exercise to the regulation of commerce among the states. It extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the granted power to regulate interstate commerce." 315 U.S. at 119.

Accord, Katzenbach v. McClung, supra, at 301-303; Wickard v. Filburn, 317 U. S. 111 (1942).

Defendant concedes that Congress in the exercise of its commerce power can proscribe extortionate credit transactions which affect interstate commerce as criminal; but he maintains that jurisdictional facts must be alleged and proven on a case by case basis and he objects to the Act's failure to provide for a case by case determination that particular extortionate credit transactions affect interstate commerce. Defendant argues that as a consequence the Act may result in prosecutions for transactions which in no way affect interstate commerce; and that this would constitute regulation of conduct solely within the province of the states to regulate.

A similar argument, however, was rejected by the Supreme Court in Katzenbach v. McClung, supra. At issue there was the constitutionality of a federal statute prohibiting segregation and discrimination in public accommodations on the ground that such segregation and discrimination adversely affects interstate commerce. The Court held that the statute was not an invalid exercise of Congress' commerce power because it failed to provide for a case by case determination that racial discrimination in a particular restaurant adversely affected interstate commerce. Katzenbach v. McClung, supra, at 302-303. The Court stated:

"Where we find that the legislators, in light of the facts and testimony before them, have a rational basis for finding a chosen regulatory scheme necessary to the protection of commerce, our investigation is at an end." 379 U.S. at 304.

Assuming arguendo that the Act were not a valid exercise of Congress' commerce power, it is sustainable as a valid exercise of Congress' power to establish uniform laws on the subject of bankruptcy on the basis of its findings that extortionate credit transactions of the kind prohibited by the Act impair the effectiveness and frustrate the purposes of the federal bankruptcy laws. Congress' findings with respect to the effect of extortionate credit transactions upon the bankruptcy laws, like its findings with respect to their effect on interstate commerce, have a rational basis and are not open to question. Thus, Congress may regulate such transactions in the exercise of its bankruptcy power.

In addition to his attack upon the jurisdictional basis of the Act, defendant's attack upon its constitutionality is directed at specific provisions of the Act.

(B) Prohibition Against "Implicit Threat" is Void for Vagueness

Defendant claims that 18 U.S.C. §§ 891 and 894 are unconstitutional on the ground, among others, that the inclusion of the term "implicit threat" in these sections renders them so vague as to be void under the due process clause of the Fifth Amendment. Section 894(a) makes it a criminal offense to collect any extension of credit by "extortionate means" which Section 891 defines as any means involving "the use, or an express or implicit threat of use, of violence . . . to cause harm to the person, reputation, or property of any person". Sections 894(b) and (c) specify the types of evidence which are admissible under certain circumstances to prove an "implicit threat". Defendant contends that an act or statement constituting an implicit threat under these sections may be entirely innocent to all outward or objective appearances; that the Act does not adequately differentiate superficially innocent acts from truly innocent acts; and therefore the provisions are void for vagueness.

When Congress proscribed the use of implicit threats — that is, acts or statements falling short of explicit threats — in the statute here in question, it simply incorporated well established federal decisional law of extortion into the Act. United States v. Palmiotti, 254 F.2d 491, 495 (2 Cir.1958); see Carbo v. United States, 314 F.2d 718, 740-41 (9 Cir.1963), cert. denied, 377 U.S. 953 (1964); Bianchi v. United States, 219 F.2d 182, 189-90 (8 Cir.1955), cert. denied, 349 U.S. 914 (1955), United States v. Compagna, 146 F.2d 524, 528 (2 Cir. 1944), cert. denied, 324 U.S. 867 (1944). By prohibiting the use of implicit threats, the Act does not make innocent acts or statements criminal. Acts or statements constitute implicit threats only if they instill fear in the person to whom they are directed or are reasonably calculated to do so in light of the surrounding circumstances and there is an intent on the part of the person who performs the act or makes the statement to instill fear. See United States v. Tropiano, 418 F.2d 1069, 1081 (2 Cir. 1969), cert. denied, 397 U.S. 1021 (1970).

(C) Admission Of Evidence Of Defendant's Prior Conduct, Character And Reputation

Defendant also claims that Section 894 is unconstitutional on the ground that it permits introduction of evidence of defendant's prior conduct, character and reputation. Section 894(b) provides that evidence tending to show that "one or more extensions of credit by the creditor were, to the knowledge of the person against whom the implicit threat was alleged to have been made, collected or attempted to be collected by extortionate means" may be introduced to show the use of an implicit threat as a means of collection of an extension of credit. Section 894(c) provides that evidence "tending to show the reputation of the defendant in any community of which the person against whom the alleged threat was made was a member at the time of the collection or attempt at collection" may be introduced under certain circumstances to show the use of an express or explicit threat as a means of collection of an extension of credit.

Defendant contends that admission of evidence of defendant's prior conduct, character and reputation in accordance with these provisions of the Act would violate the Fifth Amendment's due process clause and...