United States v. Gill

• Decision Date: 28 December 1973
• Docket Number: No. 72-1689,72-1690.,72-1689
• Citation: 490 F.2d 233
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Frank J. GILL and James Fahey, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

490 F.2d 233 (1973)

UNITED STATES of America, Plaintiff-Appellee, v. Frank J. GILL and James Fahey, Defendants-Appellants.

Nos. 72-1689, 72-1690.

United States Court of Appeals, Seventh Circuit.

Argued February 14, 1973.

Decided December 28, 1973.

COPYRIGHT MATERIAL OMITTED

Anna R. Lavin, John J. Muldoon, Julius Lucius Echeles, Chicago, Ill., for defendants-appellants.

James R. Thompson, U. S. Atty., William T. Huyck, Asst. U. S. Atty., Chicago, Ill., Sidney M. Glazer, Robert J. Vedatsky, Attys., Dept. of Justice, Washington, D. C., for plaintiff-appellee.

Before SWYGERT, Chief Judge, HASTINGS, Senior Circuit Judge, and KILEY, Circuit Judge.

SWYGERT, Chief Judge.

Defendants Frank J. Gill and James Fahey appeal from their convictions of extortion and perjury, having been found guilty of these crimes by a jury. Gill was convicted of extortion in violation of the Hobbs Act, 18 U.S.C. § 1951, and of making a false material declaration before the grand jury in violation of 18 U.S.C. § 1623. Fahey was also convicted for the same violations. Gill received two four-year concurrent sentences and Fahey received two three-year concurrent sentences.

The evidence viewed most favorable to the Government establishes the following. Gill was a lieutenant and Fahey a sergeant with the Chicago Police Department. Stojan Kovacevic was the licensee of a combination tavern and liquor store called the Chicago-Oak Liquors. His brother, Boris, was a bartender there. Sometime in early July 1971, Chicago police officer Reddon entered the liquor store and told Kovacevic that he had sold beer to a minor. Kovacevic could not recall the sale so Officer Reddon left the store and returned shortly with the minor to whom the beer had been sold. After a conversation between Kovacevic and Reddon, Reddon left with the minor.

A short time later Lieutenant Gill and Sergeant Fahey entered the liquor store. Gill told Kovacevic that he had sold liquor to a minor. Kovacevic said he could not recall this and suggested that the officers search the minor for another identification card. Gill and Fahey then left and returned shortly and told Kovacevic that they did not find any other identification on the minor. Kovacevic said that he still did not believe it. Gill asked him what he was going to do; Kovacevic replied that he did not know. Gill then said that he would have to appear before the Liquor Commissioner. Kovacevic asked if something could be done; Gill asked what he meant. Kovacevic then offered Gill $150, but Gill countered with a demand for $500. They finally agreed on $300. Kovacevic told his brother, Boris, that he was giving the money because he feared the loss of his license as well as his business.

Constantine (Dino) Sanichas was in the tavern during the time in question and saw Fahey, with whom he was acquainted. Sanichas approached Fahey and asked what was happening. Fahey said that the owners were caught selling liquor to minors and asked Sanichas if he knew the owners. Sanichas said that he did. Fahey then asked Sanichas to talk to them and explain that "it would be $500 for the owners to be given a pass, excused." After Fahey left, Sanichas spoke with Boris and told him that the police officer wanted $500; Boris said that he couldn't pay it. Sanichas then suggested $300, to which he agreed. After Fahey had returned to the tavern, Sanichas told him, "He's willing to pay $300, to give $300 for the pass, so he won't be arrested." Fahey then told Sanichas to get the money and meet him on the corner. Fahey left. Sanichas told Boris that Fahey would accept $300, whereupon Boris produced the $300. Sanichas left the bar, met Fahey on the prearranged corner, and gave him the $300. About four to five weeks later Fahey met Sanichas and gave him $40.

Both Gill and Fahey were called before the grand jury. Gill denied asking the owner or anyone else for money when he was in the Chicago-Oak Liquors. Fahey denied receiving money from Sanichas.

Subsequently, they were jointly indicted in Count I for extortion. Gill was charged in Count II and Fahey in Count III for false declarations to the grand jury.

I

The first contention made by the defendants is that the commerce affected by the extortion was not of an interstate nature. They argue that there was no evidence that the beverages sold to the tavern and liquor store came from a distributor or manufacturer from outside of Illinois, despite a stipulation that the beverages were manufactured in a state other than Illinois. It is maintained that the beverages, citing Brown v. Houston, 114 U.S. 622, 5 S.Ct. 1091, 29 L.Ed. 257 (1885), were no longer in interstate commerce, having come to rest at the distributor's warehouse in Chicago before they were resold to Chicago-Oak Liquors.

The fallacy in the argument is that the Hobbs Act not only forbids extortion which interferes with interstate commerce but also extortion which affects interstate commerce. Congress' power to regulate interstate commerce is very broad. Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 253-258, 85 S.Ct. 348, 13 L.Ed.2d 258 (1946); Wickard v. Filburn, 317 U.S. 111, 118-129, 63 S.Ct. 82, 87 L.Ed. 122 (1942).

The defendants make the alternative argument that the extortion of $300 from the tavern owner had, to say the least, a de minimis effect on commerce. Stated differently, they say it is unreasonable to infer that the owner's depletion of funds to the extent of $300 could have affected his ability to transact business, including the purchase of liquor from out of the state. An identical argument was made in the recent case of United States v. DeMet, 486 F.2d 816 (7th Cir., 1973). There this court, speaking through Judge Fairchild, rejected the argument:¹

Although King\'s business was primarily local, depletion of King\'s assets by the goods and money extorted, or the cessation of his business if he did not yield and his fears were realized, would tend to reduce the demand for and amount of beer and liquor moving into Illinois. The effect on interstate commerce would exist, though small by most standards, and only indirectly caused by defendant\'s acts.

* * * * * *

Section 1951 clearly contemplates a full application of the commerce power. It proscribes extortion which "in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce. . . ."

* * * * * *

Because Congress has seen fit to exercise its full power under the commerce clause, extortionate conduct having any arguably de minimis effect on commerce may nevertheless be punished. At pp. 821-822.

Fahey raises the additional issue that the Twenty-first Amendment has precluded the enforcement of the Hobbs Act in this case since the amendment gave to the states the power to regulate traffic in intoxicants. Section 2 of the Twenty-first Amendment prohibits any state-restricted transporting or importing of liquor for use or delivery therein which crosses state lines. This state preemption in regulating liquor does not preclude the federal government from prohibiting extortion which affects interstate commerce under authority of the Commerce Clause.

II

Defendants next contend that the Government proved bribery and not extortion. They rely heavily on Stojan's testimony that he offered Gill $150 without any demand by the police officers. The offer of the $150 came after Gill had asked Stojan what he was going to do and told him that he would have to appear before the Liquor Commissioner. After Stojan offered $150, Gill said, "No, I will take $500." Fahey approached Sanichas and asked him to tell the owners that "it would be $500 for the owners to be given a pass, excused." The jurors could reasonably have inferred from the evidence that the money was obtained through fear of economic loss and that Stojan offered to pay the $300 because he reasonably feared that if he did not, he would be cited for liquor violations or lose his license. Extortion, not bribery, was proved. See United States v. DeMet, at p. 820.

Defendants argue that extortion and bribery are mutually exclusive crimes and rely primarily on United States v. Kubacki, 237 F.Supp. 638, 641-642 (E. D.Pa.1965), for this proposition. Since there is sufficient evidence for the jury to have found extortion, it is not necessary to deal with this argument.

III

Defendants allege that the trial judge failed to instruct on an essential element of the crime, namely, commerce. They say that the judge withdrew this element to be proved from the jury and made the determination himself. The defendants stipulated at trial that Stojan's distributors would testify that the liquor and beer they sold to him came from outside Illinois. The judge told the jurors that the defendants had agreed that the stipulated testimony proved that the beer and liquor came from out of state. Defendants, who never objected to the judge's statement and who never attempted to refute the stipulated testimony, argue on appeal that the judge improperly withdrew the question from the jury as to whether the liquor had been in interstate commerce. Counsel for Gill specifically approved and counsel for Fahey did not object to the following instruction:

In reference to the requirements of the statute that commerce or the movement of any article or commodity in commerce be obstructed, delayed or affected you are hereby instructed that alcoholic beverages were shipped to various liquor distributors in Chicago, Illinois, from locations outside of the State of Illinois, and the Chicago-Oak Liquor distributors sold these alcoholic beverages to the Chicago-Oak Liquor Store in Chicago, Illinois.

It was not error for the judge to fail to define "commerce" since the defendant had agreed that the liquor sold to Stojan had come from out of state. To define "commerce" under 18 U.S.C. § 1951(b) (3) as defendants now argue would be a meaningless instruction since the jury was not called upon to make...