US v. Analytis, 87 Cr. 902 (DNE).

• Decision Date: 24 May 1988
• Docket Number: No. 87 Cr. 902 (DNE).,87 Cr. 902 (DNE).
• Citation: 687 F. Supp. 87
• Parties: UNITED STATES of America, v. Constantinos ANALYTIS, Defendant.
• Court: U.S. District Court — Southern District of New York

687 F. Supp. 87

UNITED STATES of America, v. Constantinos ANALYTIS, Defendant.

No. 87 Cr. 902 (DNE).

United States District Court, S.D. New York.

May 24, 1988.

Rudolph W. Giuliani, U.S. Atty. S.D.N.Y. (James J. McGuire, Asst. U.S. Atty., of counsel), for U.S.

Montell, Trakas & Marciano, Long Island City, N.Y. (Edward C. Montell, of counsel), for defendant.

MEMORANDUM AND ORDER

EDELSTEIN, District Judge:

Defendant Constantinos Analytis moves to dismiss the indictment against him on the ground that the conduct alleged by the government does not constitute a violation of the criminal statute cited in the indictment.¹ Defendant also seeks to have the instant indictment dismissed on the ground that the filing of this federal indictment violates fundamental principles of comity and federalism and thus constitutes a violation of the defendant's fifth amendment right to due process of law. For the reasons set forth below, the motion is denied.

BACKGROUND

The instant indictment arises from the allegation that the defendant bribed a federal agent in an effort to have him assist in illegally discharging a New York State tax liability. The government asserts that Eletherios Stavrakis, a businessman and a Greek Orthodox priest, had approached Internal Revenue Service ("IRS") Special Investigator Robert Balcerzak with the intent that Balcerzak fix certain federal tax liabilities. In late 1984, Balcerzak introduced Stavrakis to IRS Special Investigator Harry F. Norman. Norman, posing as a corrupt IRS employee, indicated that he would indeed assist Stavrakis in fixing tax liabilities.

In early 1985, Norman, acting in an undercover capacity, was paid by Stavrakis for fixing a number of federal tax liabilities. During that period, Stavrakis introduced Norman to Vasilios Apostolatos, the defendant's accountant. Apostolatos, indicated that, on behalf of his clients, he would be interested in securing the illegal discharge of both federal and state tax liabilities. Accordingly, in May 1985, the undercover operation was expanded to include New York State Department of Taxation and Finance Confidential Investigator Richard Bower, who posed as a corrupt New York State employee. Thereafter, Stavrakis, Norman, and Bower reached an agreement by which bribe money would be distributed. It was agreed that Norman and Stavrakis would both receive one-half of the bribe when a federal liability was discharged. When a state tax liability was discharged, Stavrakis, Norman, and Bower would each share equally in the bribe.

On September 25, Apostolatos met with Stavrakis, Norman, and Bower and asked that Bower fix a state tax liability on behalf of the defendant. On October 9, 1985, without Bower being present, Norman met with Stavrakis and Apostolatos. At that meeting, Apostolatos questioned Norman concerning the status of Analytis' tax liability. On October 16 and 17, 1985, Norman and Stavrakis telephonically discussed the fixing of Analytis' taxes.

On October 22, 1985, Norman, Bower, Stavrakis, and Apostolatos met. The four discussed the amount of the fixed state liability and the undercover agents let it be known that they would not fix any assessments of any kind unless the defendant taxpayer was willing to meet with them personally. On November 5, and 12, 1985, Stavrakis spoke on the telephone with Norman regarding the defendant. In the former conversation, Stavrakis indicated he had the pay-off money, and in the latter conversation, informed Norman that Analytis would attend a meeting with the four the next day. On November 13, 1985, the four met, but Analytis did not attend. At that meeting, Stavrakis gave Norman approximately 14,000 dollars in bribe money of which 4,000 dollars was earmarked for the fixing of the defendant's state tax liability. Stavrakis, Norman and Bower equally divided the 4,000 dollar sum.

On December 12, 1985, the defendant met with Stavrakis, Norman and Bower. Norman informed Analytis that he and Bower had worked together in fixing the defendant's state taxes, and Analytis confirmed that he wanted the taxes fixed. On February 5, 1986, Stavrakis, Apostolatos, Norman, and Bower met. At that meeting, Stavrakis reiterated to Norman that the 4,000 dollars delivered on November 13, 1985 was for the fixing of the defendant's previously discussed state tax liability.

Failure to Make Out a Violation of the Statute

Section 201(b)(3) of Title Eighteen of the United States Code, as it existed at the times relevant to the indictment, see supra note 1, provided:

Whoever, directly or indirectly, corruptly gives, offers or promises anything of value to any public official or person who has been selected to be a public official, or offers or promises any public official or any person who has been selected to be a public official to give anything of value to any other person or entity, with intent — to induce such public official or such person who has been selected to be a public official to do or omit to do any act in violation of his lawful duty.

Id.

The defendant notes that the ultimate object of the bribe in the instant case was the illegal discharge of a New York State tax liability. As Norman, the federal agent who was allegedly bribed, had no authority regarding state tax matters, defendant argues that any bribe could not have been intended to prompt a "violation of ... lawful duty." 18 U.S.C. § 201(b)(3)(1982). Therefore, the defendant concludes that the conduct described by the government does not constitute a federal crime.

Early federal case law interpreting the predecessor statute to 18 U.S.C. § 201 indicates that when the behavior sought to be influenced by a bribe is unconnected to the government employee's official duties, no violation of the statute occurs. See In re Yee Gee, 83 F. 145 (D.Wash.1897); United States v. Gibson, 47 F. 833 (N.D.Ill.1891). For example, in United States v. Gibson, 47 F. 833 (N.D.Ill.1891), an Internal Revenue officer was bribed to set fire to a distillery located in Chicago, Illinois. Although the federal officer was empowered to make inspections of the distillery in order to guarantee that appropriate taxes were being paid on the alcohol there produced, he, of course, was not empowered to commit arson. In quashing the indictment in that case, the judge ruled "to bribe or induce such an officer to do an act not connected with his line of duty impinges upon no United States law, and does not subject the offender to indictment and punishment in the United States courts." Id. at 834.²

More recent federal decisions, however, call for a broader understanding of what conduct might constitute a violation of lawful duty.³ For example, it is now clear that to support a conviction for federal bribery, it is not necessary that the bribee have the authority to actually achieve the object of the bribe. See e.g., United States v. Gjieli, 717 F.2d 968, 973 (6th Cir.1983), cert. denied, 465 U.S. 1101, 104 S.Ct. 1595, 80 L.Ed.2d 127 (1984); United States v. Johnson, 621 F.2d 1073, 1076 (10th Cir.1980); United States v. Jacobs, 431 F.2d 754, 759-60 (2d Cir.1970), cert. denied, 402 U.S. 950, 91 S.Ct. 1634, 29 L.Ed.2d 120 (1971). Further, it has been held that the object of the bribe need not even be within the general scope of federal, as opposed to state, power. See United States v. Gjieli, 717 F.2d 968 (6th Cir.1983), cert. denied, 465 U.S. 1101, 104 S.Ct. 1595, 80 L.Ed.2d 127 (1984).

In United States v. Gjieli, 717 F.2d 968 (6th Cir.1983), cert. denied, 465 U.S. 1101, 104 S.Ct. 1595, 80 L.Ed.2d 127 (1984), the Sixth Circuit upheld a conviction under 18 U.S.C. § 201(b)(3) in a situation analogous to that presented in the instant indictment.⁴ In Gjieli, the defendant sought to bribe an agent of the Bureau of Alcohol, Tobacco and Firearms of the United States Treasury Department to assist a prisoner to escape from a Michigan State prison. The federal agent, as he explained to the defendant at the time of the initial bribe offer, had no authority or influence over state prison facilities. Nevertheless, the Appellate Court upheld the finding that the bribe was calculated to cause a breach of the agent's lawful duty. In reaching its decision, the court noted that the federal agent, if he had assisted in the escape, would have violated Michigan State law. Under 31 C.F.R. §§ 0.735-56, 0.735-30(f), the federal agent was under a duty not to engage in criminal activities. Similarly, under 28 C.F.R. § 45-735 (Appendix-Code of Ethics for Government Service, ¶ 2), the agent was under a duty to uphold the laws of all governments within the United States. Therefore, the court was able to uphold the decision that there had been a bribe calculated to prompt a breach of the federal agent's lawful duties.

Contrary to the view espoused in Gjieli, the defendant argues that a claim of breach of duty cannot be predicated on a violation of those federal regulations governing the conduct of federal employees. In support of this proposition, defendant cites United States v. Morlang, 531 F.2d 183 (4th Cir.1975). In that case, the Fourth Circuit reviewed a trial court's jury charge on lawful duty. Defendant is correct in asserting that the Appellate Court ruled that it would be incorrect to charge that a violation of "broad ethical and moral precepts" would support a conviction for a violation of section 201. The Morlang court, however, drew a distinction between specific mandates and indefinite moral instructions. While a violation of the latter could not support a finding of a breach of a lawful duty, a violation of the former certainly could constitute such a breach. As an example of a specific mandate, the court cited the ethical prohibition against using public office for private gain. As an example of an unacceptably indefinite moral prohibition, the court cited the duty not to "impede Government efficiency or economy." 24 C.F.R. § 0.735-202.

The decision in Morlang did not reject the view that a...