US v. Quintanilla

• Decision Date: 07 February 1991
• Docket Number: No. 90 CR 772.,90 CR 772.
• Parties: UNITED STATES of America, Plaintiff, v. Carlos QUINTANILLA, Joseph Monreal, and Leticia Gutierrez, Defendants.
• Court: U.S. District Court — Northern District of Illinois

760 F. Supp. 687

UNITED STATES of America, Plaintiff, v. Carlos QUINTANILLA, Joseph Monreal, and Leticia Gutierrez, Defendants.

No. 90 CR 772.

United States District Court, N.D. Illinois, E.D.

March 4, 1991.

Nunc Pro Tunc February 7, 1991.

COPYRIGHT MATERIAL OMITTED

Fred Foreman, U.S. Atty., Scott T. Mendeloff, Bradley E. Lerman, Asst. U.S. Attys., Chicago, Ill., for plaintiff.

Nan R. Nolan, Chicago, Ill., for defendant Quintanilla.

Jo-Anne F. Wolfson, Chicago, Ill., for defendant Gutierrez.

Gerald P. Boyle, S.C., Thomas Wilmouth, Milwaukee, Wis., for defendant Monreal.

AMENDED MEMORANDUM OPINION AND ORDER

CONLON, District Judge.

Stripped of pleading intricacies, this case basically involves an alleged scheme by a former G. Heileman Brewing Company employee and two other persons to defraud the company of over $700,000. In a forty-count "First Superseding Indictment" ("the indictment"), defendants Carlos Quintanilla, Joseph Monreal and Leticia Gutierrez are charged with a barrage of offenses arising from essentially the same alleged course of conduct, including violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"); mail and wire fraud; transporting stolen property in interstate commerce; conspiracy to defraud the Internal Revenue Service; money laundering; and theft or embezzlement from federal employment and training funds. Quintanilla moves to dismiss Count One of the indictment.¹ In a separate motion, Gutierrez moves to dismiss the entire indictment. In addition, Gutierrez requests a Kastigar hearing.

BACKGROUND

I. Facts Pertinent to Count One of the Indictment

On a pretrial motion to dismiss, the court must determine whether the allegations in the indictment are sufficient to charge an offense, regardless of the strength or weakness of the government's case. United States v. Sampson, 371 U.S. 75, 78-79, 83 S.Ct. 173, 175, 9 L.Ed.2d 136 (1962); United States v. Risk, 843 F.2d 1059, 1061 (7th Cir.1988). For purposes of the motions to dismiss, the court accepts as true the factual allegations in the indictment.

The G. Heileman Brewing Company, Inc. ("Heileman") brews, markets and sells alcoholic beverages. Heileman hired Monreal as a sales representative in April 1983; Monreal was promoted to Director of Hispanic Market Development in September 1984. As part of its marketing efforts, Heileman awarded sponsorship funds to various community group programs in areas that included Chicago and Milwaukee. Id. In order to receive Heileman's funding, the community groups were required to submit proposals detailing the program to be funded, the amount of money needed, and the way in which the money would be spent. It was Monreal's job to screen each particular funding request and make preliminary recommendations as to whether Heileman should award the funds requested by the community group.

One such community group was Operation Search, an Illinois not-for-profit organization. Operation Search's articles of incorporation stated that it was organized:

to encourage, promote, and advance charitable and civic activity by providing meaningful and effective employment services to low and moderate income residents residing primarily in the Westtown and Humboldt Park communities of Chicago....

Indictment Count One, ¶ 1(A). At all relevant times, Quintanilla served as executive director of Operation Search. Quintanilla controlled all aspects of Operation Search, including the organization's financial dealings.

The indictment alleges that beginning in September 1983 and continuing through July 1987, Quintanilla, Monreal and Gutierrez² conspired in a scheme to defraud Heileman of substantial sums of money earmarked for Heileman's sponsorship of community programs. According to the indictment, the defendants accomplished their scheme by submitting to Heileman several false and inflated funding requests on behalf of Operation Search. Each time Heileman awarded funds to Operation Search, Monreal received all or some of the money in kickbacks. Gutierrez also is charged with receiving some of the fraudulently obtained money. The indictment additionally alleges that the three defendants conspired to submit to Heileman fraudulent funding requests on behalf of other Hispanic organizations.

In addition to the fraud perpetrated on Heileman, the indictment further alleges that Quintanilla devised a scheme to defraud the City of Chicago of federal Job Training and Partnership Act ("JTPA") funds. Quintanilla accomplished this scheme by causing Operation Search to submit false vouchers and other documentation to the Chicago office in charge of administering and distributing JTPA funds.

II. Gutierrez' Statement of Facts

Gutierrez submitted a statement of facts in support of her motion to dismiss the indictment. Because the government "intentionally does not advance any additional facts either to contest the assertions Gutierrez makes or to place her representations in context," see Government's response at 25, the court accepts Gutierrez' representations as true for the purpose of this motion.

In 1983, Gutierrez was assistant manager and administrator of the Mexico Medical Center on West 26th Street in Chicago, and was well-respected in Chicago's Hispanic community. During 1983, Gutierrez fell in love with Monreal. Because she loved Monreal, Gutierrez "ghost-wrote" proposals that Monreal submitted to Heileman as his own work. According to Gutierrez, Monreal took advantage of Gutierrez' intellect and position in the community for nearly three years before she realized how foolish she had been to assist him in "his crimes." Gutierrez' statement of facts at 2.

In June 1986, Gutierrez revealed to Heileman's legal department that Monreal had received kickbacks from Heileman's funding program in an amount "probably totalling six figures." Id. at 2-3. Heileman's personnel referred Gutierrez to the Illinois Attorney General's office, where she related her information to investigators of the United States Department of Labor. Gutierrez eventually gave her story to an Assistant United States Attorney ("AUSA"). From late 1986 until May 1990, Gutierrez cooperated with AUSA Scott Mendeloff and other AUSAs in their investigation of Monreal's conduct in securing kickbacks from Heileman's funding program. In 1987, she made monitored telephone calls to Monreal and others, and she wore a concealed electronic recording device while meeting with Monreal and other persons under investigation. Gutierrez cooperated with Mendeloff in this way despite the fact that Monreal had threatened Gutierrez and her children.

On August 17, 1987, Mendeloff issued a subpoena directing Gutierrez to appear before a federal grand jury and bring records relating to funds received from Heileman, Operation Search and Quintanilla. Before her grand jury appearance, Patrick Reilly, an attorney, telephoned Mendeloff and asked if Gutierrez would receive immunity in exchange for her past and continued cooperation with the investigation. See Mendeloff's notes of August 31, 1987, attached to Gutierrez' statement of facts. Mendeloff told Reilly that no immunity would be forthcoming and that the government was prepared to indict Gutierrez for her role in the kickback scheme. Mendeloff further stated that if she was convicted, the government would immunize Gutierrez to obtain her testimony against others. Reilly then asked whether the government would consider granting Gutierrez immunity if the government was able to convict "the big fish." Mendeloff informed Reilly that he could not guarantee anything, that the government "may not prosecute, but probably would have to." Id. Mendeloff further stated that he would inform the sentencing court of "every iota of Gutierrez' cooperation." Id.

Later in August 1987, Reilly telephoned Mendeloff and said that he had discussed the situation with Gutierrez, and that Gutierrez intended to cooperate because "she doesn't have much choice." Id. Mendeloff told Reilly that if the government decided to prosecute Gutierrez, Mendeloff would tell the court "in great detail every single thing she did" to cooperate. Id.

Gutierrez continued to cooperate with the government through May 1990. Apparently, Gutierrez believed that Mendeloff would not (or could not) prosecute her after she faithfully and diligently worked to provide Mendeloff with the information and evidence he needed. Mendeloff, however, was careful not to promise Gutierrez anything in return for her efforts; he also periodically informed Gutierrez that she was entitled to have an attorney present when she met with Mendeloff and other AUSAs. Gutierrez apparently decided it was not necessary to be represented by an attorney in her dealings with the United States Attorney's office.

In April 1990, Mendeloff again served Gutierrez with a grand jury subpoena, this time requesting records pertaining to the Hispanic Community Center, a project Gutierrez developed beginning in August 1986. In May 1990, Gutierrez refused to read to the grand jury a statement apparently prepared by Mendeloff.

The original indictment naming Monreal and Quintanilla was returned on September 6, 1990. That indictment contained only four counts charging mail fraud and interstate transportation of funds obtained by fraud. Gutierrez was not indicted. However, on October 18, 1990, a superseding indictment was returned naming Gutierrez and charging 36 additional statutory violations for essentially the same alleged course of conduct. Three separate RICO counts were added. Monreal, the central figure in the scheme to defraud Heileman, has pleaded guilty to only two counts under an agreement with the government. Monreal has agreed to testify against Quintanilla and Gutierrez.

DISCUSSION

I. Quintanilla's Motion to Dismiss Count One of the Indictment

Count One of the indictment lumps all of the alleged wrongdoing by each defendant into a single RICO conspiracy charge under 18 U.S.C. § 1962(d...