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UNITED STATES v. FRUMENTO

March 1, 1976

UNITED STATES OF AMERICA
v.
ROCCO FRUMENTO, et al. ROCCO FRUMENTO, Movant



The opinion of the court was delivered by: BECHTLE

BECHTLE, J.

 Before the Court are various pretrial motions filed by defendant Rocco Frumento in this multi-defendant criminal case. Frumento is charged in four counts of an eleven-count indictment with violating 18 U.S.C. § 1962(c), conspiring to violate 18 U.S.C. § 1962(c), in violation of 18 U.S.C. § 1962(d), and with fraud and false statements in the making and subscribing of income tax returns for the calendar years 1971 and 1972. This Memorandum will deal with several of the motions to dismiss the indictment filed by Frumento. The grounds asserted are: (1) a lack of jurisdiction over the alleged crimes; (2) the Double Jeopardy Clause of the Fifth Amendment and the doctrine of collateral estoppel; (3) the Government's failure to comply with Department of Justice policy; (4) the improper selection process for the pool from which the grand jurors returning the indictment were chosen; (5) the inability of the grand jury, due to the action or inaction of the Government, to properly assess the credibility of witness Harold Sharp; and (6) prejudicial pre-indictment publicity resulting in grand jury bias. For the reasons stated below, we will deny the motions.

 Lack of Jurisdiction

 The indictment charges that Frumento, in his position as Field Investigator Second Class for the Pennsylvania Department of Revenue's Bureau of Cigarette and Beverage Taxes ("Bureau"), solicited and accepted bribes as part of an alleged cigarette smuggling conspiracy. The Bureau is the arm of the Department of Revenue entrusted with fulfilling the Department's statutory duty to collect the tax imposed by law upon the sale of cigarettes in Pennsylvania. 72 P.S. § 203(n).

 Frumento is charged with violating 18 U.S.C. § 1962(c) by reason of his alleged part in this scheme, and with conspiring to do so, in violation of 18 U.S.C. § 1962(d). Section 1962(c) provides:

 
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.

 Frumento does not dispute that the indictment charges sufficient acts of bribery to constitute a "pattern of racketeering activity" within the meaning of the statute. His first argument questions whether the Bureau, as a government agency, qualifies as an "enterprise" embraced by the prohibitions of Section 1962(c). The Court's position on that issue has been fully and adequately set forth in the Opinion reported at 405 F. Supp. 23 (E.D.Pa. 1975), in this case, dealing with the motions of co-defendant George Collitt. Our rejection of Frumento's argument is based on that discussion.

 Frumento argues further that, even if the Bureau is a statutory "enterprise," the activities of the Bureau do not affect interstate or foreign commerce. We believe that this challenge to the jurisdictional reach of the statute is also without merit. The Government intends to prove at trial, and it is accepted as true for purposes of this motion, that all cigarettes marketed in Pennsylvania are imported from other states and that the Bureau is the sole governmental agency empowered to enforce the Commonwealth's laws respecting the importation of cigarettes. Frumento contends that once the cigarettes have been sold by the out-of-state manufacturer or dealer to the Pennsylvania distributor, the Bureau's enforcement of that distributor's subsequent obligation to make payment of the Pennsylvania cigarette tax before resale does not amount to engaging in or affecting interstate commerce. From the time the Pennsylvania tax is paid, the argument continues, the cigarettes may only be sold legally within Pennsylvania and, thus, the relevant journey of the taxed cigarettes is only intrastate. This argument too narrowly restricts the meaning of the concept "affect interstate commerce." It is obvious that the imposition of the Pennsylvania tax affects the resale price to any purchaser of the taxed cigarettes. It is also basic economic theory that the price of an item usually has a relationship to the unit sales volume of the item. By enforcing the Commonwealth's cigarette tax laws, the Bureau directly affects the price of legitimate cigarettes in Pennsylvania and, thus, the amount of legitimate cigarette sales in Pennsylvania. Since all cigarettes sold in Pennsylvania are originally imported from other states, any activity which influences the amount of cigarette sales in the Commonwealth clearly affects interstate commerce. The jurisdictional prerequisites of the crimes for which Frumento stands accused have been properly alleged.

 Double Jeopardy and Collateral Estoppel

 Frumento contends that this federal prosecution is barred by the Double Jeopardy Clause of the Fifth Amendment to the Constitution. In June, 1972, Frumento was tried and acquitted in Philadelphia Municipal Court on charges of bribery, extortion and conspiracy to accept bribes and avoid payment of the Pennsylvania cigarette tax. The state indictment was based on the same alleged activity as the present federal indictment, which charges that Frumento violated 18 U.S.C. § 1962(c) by engaging in the conduct of the Bureau's affairs through a pattern of racketeering activity. In relevant part, "racketeering activity" is defined by the statute as "any act or threat involving . . . bribery, [or] extortion, . . . which is chargeable under State law and punishable by imprisonment for more than one year . . . ." 18 U.S.C. § 1961(1) (A). Proof of a "pattern of racketeering activity," which is an essential element of the charged offense, requires a showing of at least two separate instances of racketeering activity. 18 U.S.C. § 1961(5). *fn1"

  Frumento argues that the holding of Abbate v. United States, 359 U.S. 187, 3 L. Ed. 2d 729, 79 S. Ct. 666 (1959), that successive state and federal prosecutions for the same acts are not barred by the Double Jeopardy Clause, is no longer valid. While the doctrine of dual sovereignty has been eroded somewhat by more recent Supreme Court decisions, such as Murphy v. Waterfront Commission, 378 U.S. 52, 12 L. Ed. 2d 678, 84 S. Ct. 1594 (1964), and Elkins v. United States, 364 U.S. 206, 4 L. Ed. 2d 1669, 80 S. Ct. 1437 (1960), this Court believes that the Abbate rule has continuing vitality. United States v. Johnson, 516 F.2d 209, 212 (8th Cir.), cert. denied, 423 U.S. 859, 96 S. Ct. 112, 46 L. Ed. 2d 85 (1975); United States v. Fernandez, 497 F.2d 730, 747 n.10 (9th Cir. 1974) (Hufstedler, J., concurring specially), cert. denied, 420 U.S. 990, 43 L. Ed. 2d 670, 95 S. Ct. 1423 (1975). In fact, Chief Justice Burger, joined by Justices White and Rehnquist, recently addressed the issue and stated specifically that they believe Abbate remains "good law." Watts v. United States, 422 U.S. 1032, 1038, 45 L. Ed. 2d 688, 95 S. Ct. 2648 (1975) (dissenting opinion).

 Our ruling that Abbate v. United States, supra, is controlling here leads directly to the rejection of the second prong of Frumento's argument. Frumento contends that since an essential element of the federal crimes for which he stands indicted is proof of violations of state law, for which a state court has already acquitted him, the doctrine of collateral estoppel bars this prosecution. See generally Ashe v. Swenson, 397 U.S. 436, 25 L. Ed. 2d 469, 90 S. Ct. 1189 (1970). The doctrine of collateral estoppel prevents the relitigation of a once-determined issue of ultimate fact by the same parties in a subsequent action. Ashe v. Swenson, supra at 443. The state and federal governments, as separate sovereigns, are not the same party. Therefore, federal prosecution for a violation of federal law, which happens to incorporate within its provisions state law for which there has already been a state prosecution, does not offend the established collateral estoppel rule of federal criminal law. See United States v. Kerrigan, 514 F.2d 35, 37 n.1 (9th Cir.), cert. denied, 423 U.S. 924, 96 S. Ct. 266, 46 L. Ed. 2d 249 (1975); United States v. Smaldone, 485 F.2d 1333, 1343 (10th Cir. 1973), cert. denied, 416 U.S. 936, 40 L. Ed. 2d 286, 94 S. Ct. 1934 (1974). The principle of Ashe v. Swenson, supra, does not apply in the separate sovereign context. United States v. Fernandez, supra, 497 F.2d at 747 n.10 (Hufstedler, J., concurring specially).

 Department of Justice Policy

 The Department of Justice has an internal policy against "duplicating federal-state prosecutions." Petite v. United States, 361 U.S. 529, 4 L. Ed. 2d 490, 80 S. Ct. 450 (1960). It has recently been articulated as "the Department of Justice policy of not prosecuting individuals previously tried in a state court for offenses involving the same acts, unless there exist 'most compelling reasons,' and then only after the specific approval of the appropriate Assistant Attorney General has been obtained." Watts v. United States, supra, 422 U.S. at 1033 ...


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