Ward v. U.S.

• Decision Date: 10 May 1988
• Docket Number: No. 87-2659,87-2659
• Parties: John J. WARD, Petitioner-Appellee, v. UNITED STATES of America, Respondent-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1459

845 F.2d 1459

John J. WARD, Petitioner-Appellee, v. UNITED STATES of America, Respondent-Appellant.

No. 87-2659.

United States Court of Appeals, Seventh Circuit.

Argued March 31, 1988.

Decided May 10, 1988.

Lawrence E. Rosenthal, Asst. U.S. Atty., Anton Valukas, U.S. Atty., Chicago, Ill., for respondent-appellant.

Patrick A. Tuite and Brent D. Stratton, Chicago, Ill., for petitioner-appellee.

Before WOOD, Jr., POSNER, and EASTERBROOK, Circuit Judges.

POSNER, Circuit Judge.

The Justice Department in recent years has devoted substantial resources to prosecuting corrupt public officials. An important weapon in this campaign has been the "intangible rights" doctrine of federal mail and wire fraud (18 U.S.C. Secs. 1341, 1343), a doctrine whereby public officials who accept bribes are deemed by doing so to have defrauded the public of its right to the honest provision of public services. Last year, in a stunning setback for the Department, the Supreme Court rejected the intangible-rights doctrine. McNally v. United States, --- U.S. ----, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). The Department has tried to minimize the blow by pressing the federal courts, including this court, to interpret the McNally decision as narrowly as possible--so narrowly, in fact, as to save convictions that had been obtained before McNally under the intangible-rights approach. We confronted one such effort in United States v. Holzer, 840 F.2d 1343 (7th Cir.1988). Holzer was an Illinois state court judge who had been convicted of mail fraud for having deprived the people of the state of their right to the honest administration of justice, by soliciting and accepting bribes. The Department tried to save the conviction by arguing that under Illinois law the state had a constructive trust in the bribe moneys received by Holzer, so that by failing to turn them over to the state he deprived it of its tangible right to them. We were not persuaded, and vacated the conviction.

The present case involves another, and closely related, effort to save a pre-McNally intangible-rights conviction. John Ward, an attorney, was indicted in 1986 and convicted in 1987 (shortly before the McNally decision) of two counts of mail fraud. The fraud arose out of Ward's representation of David Washington, who had been charged with drunken driving and whose case was pending before an Illinois state court judge, John McCollom, in Chicago. McCollom was known to take bribes. His "bagman," Chicago policeman Ira Blackwood, would receive the cash bribe from the attorney wanting a case fixed and would pass the money on to McCollom. Through the good offices of Blackwood, Ward agreed with McCollom on a $500 bribe in exchange for a favorable disposition of the case against Washington. Ward gave Blackwood $600 in cash and Blackwood passed $500 on to McCollom, keeping the rest as compensation for his services in the transaction. When Washington's case was called, McCollom, having forgotten about the bribe, sentenced Washington to 364 days in jail. Ward complained to Blackwood, who spoke to McCollom, who ordered Washington released from jail.

Washington had posted two cash bail bonds, totaling $700, to secure his appearance in court on the drunk-driving charge. Under the Illinois bail law (the constitutionality of which was upheld by the Supreme Court in Schilb v. Kuebel, 404 U.S. 357, 92 S.Ct. 479, 30 L.Ed.2d 502 (1971), over objections based on the due process and equal protection clauses), this money is returned to the defendant upon the disposition of his case, minus any fine or costs imposed, and minus 10 percent for the costs of the bail bond. See Ill.Rev.Stat. ch. 38, p 110-7. McCollom had not imposed any fine or costs when he sentenced Washington to jail. When, having been reminded of the bribe, McCollom ordered Washington released from jail, he also ordered the cash bonds (minus the 10 percent bail bond costs) refunded, by checks made payable and mailed to Ward rather than to Washington. A criminal defendant's lawyer will often look to the refund of the cash bond as the source of payment of his attorney's fee, and, if the defendant consents, the court may order that the refund be made to the defendant's lawyer, in whole or part. See Ill.Rev.Stat. ch. 38, p 110-7(f). These two mailings are the two counts of mail fraud with which Ward was charged and of which he was convicted. Ward used the refunds to reimburse himself for the bribe money. He also collected some $2,400 from Washington in attorney's fees.

For his part in the scheme to bribe McCollom and Blackwood, Ward was given a suspended sentence of a year and a day followed by probation. McCollom and Blackwood were convicted separately for their roles in the scheme. (All these convictions, like that of Holzer, were fruits of the Justice Department's "Graylord" investigation, an investigation of judicial corruption in the state courts of Cook County, Illinois.) After the Supreme Court decided McNally, Ward filed a motion to vacate his conviction and sentence under 28 U.S.C. Sec. 2255. The district court granted the motion and the government appeals. Although Ward had not questioned the intangible-rights theory at trial, the government does not argue that he has waived the challenge, or that this is not the kind of challenge that can be raised in a collateral attack on a conviction. Its only argument is that this is not (or not only) an intangible-rights case, because the state had a property right in the cash bonds and Ward converted that property right when as part of the scheme Judge McCollom had the cash bonds refunded to Ward.

The requirement of posting a cash bail bond has a dual purpose: to increase the cost to the defendant of failing to appear for trial, and to provide security for the payment of costs and fines in the event of conviction (and also to provide security for the payment of the defendant's attorney, but that is not an interest of the state, at least in a narrow sense). People v. Dale, 112 Ill.2d 460, 98 Ill.Dec. 39, 493 N.E.2d 1060 (1986). A security interest is a property right, United States v. Security Industrial Bank, 459 U.S. 70, 75-76, 103 S.Ct. 407, 410-11, 74 L.Ed.2d 235 (1982); 1 Anderson on the Uniform Commercial Code Sec. 1-201:188 (3d ed. 1981), and the Supreme Court's post-McNally decision in Carpenter v. United States, --- U.S. ----, 108 S.Ct. 316, 98 L.Ed.2d 275 (1987), holds that taking a property right by fraud will support a conviction under the mail-fraud statute, provided the other statutory elements are present. The government argues that the state's interest in the cash bail bond is that of a possessory lien creditor--a dubious contention, cf. Restatement of Security Sec. 59 (1941), but not one we need explore. The problem is not that the state lacks the sort of interest in cash bonds that is tangible enough to support a prosecution under the mail or wire fraud statutes as interpreted in McNally or Carpenter, but that Ward did not deprive the state of its interest. The state held on to the bonds until Washington was convicted and sentenced, and since no fine or costs were imposed its security...