US v. Derrick

• Decision Date: 07 August 1991
• Docket Number: Crim. No. 3:91-00091.
• Citation: 778 F. Supp. 260
• Parties: UNITED STATES of America v. Paul Wayne DERRICK.
• Court: U.S. District Court — District of South Carolina

778 F. Supp. 260

UNITED STATES of America v. Paul Wayne DERRICK.

Crim. No. 3:91-00091.

United States District Court, D. South Carolina, Columbia Division.

August 7, 1991.

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E. Bart Daniel, U.S. Atty., Columbia, S.C., for the U.S.

James H. Lengel, Vinton D. Lide, Columbia, S.C., for defendant.

ORDER

HAWKINS, Chief Judge.

This matter is before the court on the motion of the defendant for judgment of acquittal, or in the alternative, for a new trial. For the reasons set forth below, the motions of the defendant must be denied.

I. FACTS

On May 11, 1991, a jury convicted Paul Derrick on two counts of Hobbs Act violations in connection with what has popularly become known as "Operation Lost Trust." On May 20, 1991, the defendant filed a motion for a new trial and judgment of acquittal. In his motions, the Defendant seeks a judgment of acquittal on three grounds: 1) the government failed to establish the required nexus with interstate commerce; 2) the government failed to prove extortion because the Defendant did not "induce" the payments; and 3) the government failed to prove a conspiracy because Ron Cobb was a government agent at the center of a "hub" conspiracy.

The Defendant also bases his motion for a new trial on several grounds: 1) the verdict was against the weight of the evidence; 2) misconduct affecting the jury; 3) inadequate time to prepare for trial; 4) failure to provide discovery; 5) exclusion of evidence; 6) admission of improper evidence; and 7) variance between indictment and proof.

Subsequent to the defendant's filing of his briefs, the U.S. Supreme Court handed down their opinion in McCormick v. United States, ___ U.S. ___, 111 S.Ct. 1807, 114 L.Ed.2d 307 (1991). As a result, the defendant argued at the hearing for a new trial or judgment of acquittal on the grounds that McCormick requires that the jury must find a quid pro quo to return a guilty verdict in a Hobbs Act case. Specifically, the defendant alleges that the court's charge that the jury need not find a specific quid pro quo was error.

II. MOTION FOR JUDGMENT OF ACQUITTAL

The standard of review for a motion under Fed.R.Crim.P. 29(c) is simply that "the verdict of the jury must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it." United States v. Steed, 674 F.2d 284, 286 (4th Cir.1982), cert. denied, Steed v. United States, 459 U.S. 829, 103 S.Ct. 67, 74 L.Ed.2d 68.

A. Interstate Commerce

The defendant attacks the interstate element of the Hobbs Act on two levels. First, the defendant argues that there was no evidence that the actions of the defendant had any impact on interstate commerce because the bill in question was never passed and the Alpha Group was a fictitious entity.

In United States v. Brantley, 777 F.2d 159, 162 (4th Cir.1985), cert. denied, Ingram v. United States, 479 U.S. 822, 107 S.Ct. 89, 93 L.Ed.2d 42 (1986), the issue was whether the F.B.I. could manufacture jurisdiction by establishing a sham gambling den to investigate corruption against certain local officials. The court concluded that jurisdiction could not be manufactured for a substantive violation of the Hobbs Act; however, the court upheld the convictions on the conspiracy counts.

The holding of Brantley, 777 F.2d 159, is clear and is indisputably the law of the Fourth Circuit

Upon a charge of conspiracy or an attempt to violate the Hobbs Act, it is simply irrelevant that, because of facts unknown to the conspirators or to the actor, an actual effect upon commerce was impossible.... If one "purposely engages in conduct which would constitute the crime if the attendant circumstances were as he believes them to be," the actor is guilty of a criminal attempt.

Brantley, 777 F.2d at 164 (citations omitted).

In addition, as the government points out in their brief, the defendant's case is directly analogous to the case of United States v. Nelson, 486 F.Supp. 464 (W.D.Mich. 1980). In Nelson, the defendant, a state legislator, was indicted for accepting a $5,000 bribe from a lobbyist for sponsoring legislation designed to legalize dog racing in Michigan. The Nelson holding is important because the Court held that the effects on commerce may be "merely potential." Id. at 471. Further, the Court held that it is the proper function of the jury to determine whether the defendant's conduct had the potential of affecting interstate commerce. Id. at 473.

In this case, Dr. Martin and Ms. Bennett testified as to the impact of the pari-mutuel bill on interstate commerce. Further, there was testimony that the defendant knew that the money was coming from Ohio based on a conversation with Robert Kohn. Thus, there was clear and convincing testimony sufficient for the jury to find that a reasonable probability existed that had the defendant's actions been successful and pari-mutuel bill had passed that interstate commerce would have been affected. See United States v. Spagnolo, 546 F.2d 1117 (4th Cir.1976), cert. denied, 433 U.S. 909, 97 S.Ct. 2974, 53 L.Ed.2d 1093 (1977).

Second, the defendant argues that commerce must be affected "adversely" for the act to come within the parameters of the Hobbs Act. The act does not specify a positive or negative effect, it merely uses the word "affect." The defendant has cited to no case for the proposition that the "interference" with commerce must be adverse. Further, the cases indicate that the effect need not be adverse. For example, in McCormick, the legislation in question was bringing foreign third year medical students into West Virginia to aid impoverished families. U.S. v. McCormick, 896 F.2d 61, 63 (4th Cir.1990), rev'd on other grounds, ___ U.S. ___, 111 S.Ct. 1807, 114 L.Ed.2d 307 (1991). While it can be argued that there is a negative effect in that West Virginia doctors have business taken away, it is clear from the case that there were not enough doctors in the rural areas of the state to meet the demand. Thus, the legislation had a positive effect by bringing resources into the state.

As stated above, in Nelson, 486 F.Supp. 464 (W.D.Mich.1980), the bill would have legalized greyhound racing. The court held that there need be no actual effect on commerce, the terms of the Act are satisfied if there is "a realistic probability that an extortionate transaction will have some effect on interstate commerce." Id. at 472 (emphasis added). Like this case and McCormick, the legislation would have had a positive economic impact on the local economy. These cases indicate that either an adverse or positive effect on interstate commerce will satisfy the requirements of the act. Thus, the defendant's motion must fail.

B. Extortion

Next, the defendant argues that the government failed to prove extortion because there was no evidence that the defendant induced the payment. For this proposition they have cited to United States v. O'Grady, 742 F.2d 682 (2d Cir.1984) (en banc). Nevertheless, the Fourth Circuit has specifically held that inducement is not an essential element of the offense. U.S. v. Paschall, 772 F.2d 68, 71 (4th Cir.1985), cert. denied, Paschall v. United States, 475 U.S. 1119, 106 S.Ct. 1635, 90 L.Ed.2d 181 (1986). In Paschall, the Fourth Circuit specifically mentioned O'Grady and distinguished it. The concern in O'Grady was that an official could violate the Hobbs Act by merely taking something of insignificant value. In this regard, the opinion mirrored the concerns of the Court in McCormick that legitimate campaign contributions should be protected. In Paschall, the jury had been instructed that they could convict only if the defendant had taken something of significant value, therefore, O'Grady was inapposite. Similarly, in this case, $1,000 can hardly be considered insignificant. Although the Supreme Court has granted certiorari in an inducement case,¹McCormick specifically declined to rule on the inducement question. To this extent, Paschall remains the law of the Fourth Circuit and the defendant's motion must fail.

C. Conspiracy

The defendant's final ground for judgment of acquittal is that under the Sears rule, Sears v. United States, 343 F.2d 139 (5th Cir.1965), the defendant could not be guilty of conspiracy because there was no evidence that the defendant conspired with anyone else other than Ron Cobb, the government agent at the hub of the conspiracy. Every court which has considered the issue, including the Fourth Circuit, United States v. Chase, 372 F.2d 453, 459 (4th Cir.1967), cert. denied, Chase v. United States, 387 U.S. 907, 87 S.Ct. 1688, 18 L.Ed.2d 626, has adopted the Sears rule. See, e.g., United States v. Barboa, 777 F.2d 1420, 1422 n. 1 (10th Cir.1985).

The defendant concedes that the government need only present evidence that he conspired with any of the members, or "spokes," of the hub conspiracy. There was sufficient evidence, however, for the jury to make such a finding. As the government demonstrates in their brief, there is Randy Lee's conversation with Ron Cobb concerning the defendant and the conversation which Lee had on the phone with Dr. Derrick in the presence of Cobb. There is also the conversation which Mr. Kohn had with Mr. Lee which Kohn related to Cobb. Both of these conversations are on the April 24, 1990 tape. The key is that neither Kohn nor Lee were working for the F.B.I. at the time of these conversations. As a result, they were relaying a conversation which they had with a co-conspirator. Finally, there is the defendant's conversation with Tom Limehouse, on how he was going to characterize the money on his report, and his conversation with the F.B.I., in which he was vague and elusive about lobbyists giving cash campaign contributions, around the time that the investigation went public, all of which strongly suggest that he knew about the conspiracy and was trying to cover-up. Therefore, there appears to have been ample evidence for the jury...