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United States v. Forsythe

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT


argued: June 17, 1977.

UNITED STATES OF AMERICA, APPELLANT
v.
FORSYTHE, ROBERT E., FRANCISCUS, CHARLES J., BLASKOVICH, JOHN J., FRANCE, EDWARD J., PROSSER, EDWIN F., SNEE, EDWARD T., JOYCE, THOMAS, SHANTA, MICHAEL, THOMPSON, GEORGE B., MUSSMAN, JOHN L., ALCORN, CARL W. (D.C. CRIM. NO. 76-162-1/11). UNITED STATES OF AMERICA, APPELLANT V. MEYERS, SAM, MEYERS, GUS, LEVITT, STEPHEN C., MAZZEI, FRANK, ISAAC, MICHAEL C., GROSS, ARTHUR A/K/A "RED", WEBER, WALTER, GALACK, MARVIN, (D.C. CRIM. NO. 76-163-1/8). UNITED STATES OF AMERICA, APPELLANT V. PANTONE, ALBERT C., BRUNO, FRANK, CHANDLER, JOHN, WASKO, JOHN, CHAPAS, JOHN, BIONDI, RALPH, CHESNOS, AL, CRAWSHAW, WILLIAM, DOWNEY, WILLIAM E., HERMAN, RICHARD P., KUMER, JOHN, MORGAN, LAWRENCE, MCCANN, JAMES J., ROMANO, DOMINICK (D.C. CRIM. NO. 76-164-1/14). UNITED STATES OF AMERICA, APPELLANT V. BARBOUR, SAMUEL, DUPREE, FRANK, HIERONIMUS, EARL, ESTERBERG, GARY, SMITH, RONALD, EDKINS, THOMAS, CASHDOLLAR, RICHARD, SHEFFLER, GEORGE, KEISLING, CHRIS, MYSELS, MAURICE, DILUCENTI, BRUNO (D.C. CRIM. NO. 76-198-1/11). UNITED STATES OF AMERICA, APPELLANT V. WILLIAMS, JACOB A/K/A "JAKE", GOODS, LEONARD, JOHNSON, JAMES, WHITING, OTHA T., OWENS, FRED A/K/A "LUKEY", ARDUINI, ART, VELIKOFF, GERALDINE, BRYANT, LEVI, MCCLENDON, HARRY VIRGIL SR., MOORE, MELVIN, MATTHEWS, ELIOTT, HANEY, JOHN (D.C. CRIM. NO. 76-199-1/12). UNITED STATES OF AMERICA, APPELLANT V. NAIRN, REGIS, MCHUGH, WILLIAM, GRAHAM, DANIEL, CICCO, GUY, GILLINGHAM, MYLES E., ZANELLA, JOSEPH, PHILLIPS, EUGENE, HERMAN, STEPHEN M., BATKINS, JOHN C., TROSKY, JAMES R., REGRUT, JAMES, ADAMS, JOHN Q., LA QUINTA, RICHARD, WILLIAMS, ROBERT F. A/K/A "BUCK", BAEHR, THEODORE A/K/A "TEDDY" (D.C. CRIM. NO. 76-200-1/15). UNITED STATES OF AMERICA, APPELLANT V. ESTERBERG, GARY (D.C. CRIM. NO. 76-198-4). UNITED STATES OF AMERICA, APPELLANT V. MEYERS, SAM, MEYERS, GUS, ISAAC, MICHAEL C., GROSS, ARTHUR A/K/A "RED", GALACK, MARVIN (D.C. CRIM. NO. 76-163-1/2, 5/6, 8). UNITED STATES OF AMERICA, APPELLANT V. WEBER, WALTER (D.C. CRIM. NO. 76-163-7). UNITED STATES OF AMERICA, APPELLANT V. MAZZEI, FRANK (D.C. CRIM. NO. 76-163-4)

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA.

Adams, Van Dusen and Gibbons, Circuit Judges.

Author: Van Dusen

VAN DUSEN, Circuit Judge.

This appeal is from a district court order suppressing evidence obtained from a search conducted pursuant to warrant and dismissing indictments against sixty-nine out of a total of seventy-one defendants charged with conspiracy and substantive violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), Title IX of the Organized Crime Control Act of 1970, Chapter 96 of Title 18 U.S.C. § 1961 et seq. Because the record does not support the district court's ruling that the search warrant was invalidly executed, and because the district court judge's interpretation of RICO as applied to these facts was contrary to congressional intent in enacting the statute, as well as for all the reasons stated in this opinion, we reverse and remand.

I

In the summer of 1975, the FBI began an investigation directed at the lower level of the criminal justice system in Allegheny County, Pennsylvania. The information received indicated that a bail bond agency in Pittsburgh known as the Steve Levitt Agency had been making systematic money payments to various magistrates,*fn1 constables, minor Allegheny County court employees and other law enforcement officials in return for the referral to the Steve Levitt Agency of defendants who had been brought before the magistrates for the setting of bail.

On September 23, 1975, the FBI agents obtained a search warrant authorizing them to conduct a search of the agency premises for business records evidencing the above described bribery scheme. The affidavit upon which the warrant was issued contained information supplied by a confidential informant and two former employees of the Agency. The warrant was signed at 7:45 p.m. by the Chief Judge of the United States District Court for the Western District of Pennsylvania and the search of the Agency premises began at 8:12 p.m. Records reflecting the business of the Agency and evidence of the payoff-referral scheme were seized.

On July 23, 1976, three indictments charging a total of 33 defendants with violations of RICO were returned by a grand jury.*fn2 On August 27, 1976, three more indictments were returned against an additional 38 defendants.*fn3 Numerous motions to suppress the evidence seized during the September 23rd search and to dismiss the indictments were filed. On February 22, 1977, the district court judge, having heard testimony and argument on the motions, issued a memorandum and order suppressing the evidence and dismissing the indictments against all but two*fn4 of the defendants. United States v. Forsythe, 429 F. Supp. 715 (W.D. Pa. 1977).

II

A. Validity of the Search Warrant

The initial question on this appeal is whether the search warrant was properly issued. Appellee Frank Mazzei*fn5 contends there was not sufficient probable cause for issuance because the facts in the affidavit on which the warrant was based were stale as of the date the warrant was signed. One informant ceased employment with the Agency in August of 1975 and the other (a former partner) had left in 1974. Mazzei argues that the informant's statements do not tend to show that the documents they described were on the Agency premises as of September 23, 1975, the date the warrant was issued.

The district court judge observed that a month long time lapse might be significant had the items been of a volatile or fugitive nature, such as narcotics or stolen cars. 429 F. Supp. at 725. He found, however, that the Agency's business, involving bail bonds valid for considerable periods of time, was such that there was reason to believe that the documents would, in all probability, be preserved for more than one month. Id.

The Supreme Court recently upheld a warrant against a similar argument in a case where there had been a three-month delay between the completion of the transactions on which the warrants were based and the ensuing search. See Andresen v. Maryland, 427 U.S. 463, 478, n.9, 49 L. Ed. 2d 627, 96 S. Ct. 2737 (1976).*fn6 In the instant case, as in Andresen, the records sought were prepared in the ordinary course of the Agency's business and it was reasonable to believe that they would be maintained there for a period of time of over one month. Moreover, the agents had reason to believe that the Agency had been conducting its bribery operations over a five year period, and there was no reason to believe that this operation had ceased. We hold, therefore, that there was no error in the district court's finding that the warrant was properly issued.

B. Execution of the Search Warrant

The district court held that the evidence seized during the search must be suppressed because the search warrant was invalidly executed. He so concluded because the warrant stated that the search was to be conducted "in the daytime" and it was undisputed that the search began at 8:12 p.m. 429 F. Supp. at 723.

Federal Rule of Criminal Procedure 41 governs searches and seizures in the federal system. Section (h) of Rule 41 provides that "the term 'day-time' is used in this rule to mean the hours from 6:00 A.M. to 10:00 P.M., according to local time." It is plain that a search beginning at 8:12 p.m. is a daytime search within the meaning of Rule 41(h).

The district court further found that the warrant was invalidly executed because the search was conducted in an "unreasonable, surreptitious and clandestine manner." This description is not supported by the record. The FBI agents were admitted to the Agency premises by the building security guard after exhibiting the warrant to him and after the guard, pursuant to the agents' instructions, had notified Michael Isaac that a search was being conducted.*fn7 The record indicates that Mr. Isaac arrived at the Agency about an hour later. Agent Vidovich testified that:

"Approximately one hour after we began searching, Mr. Levitt and Mr. Isaac arrived, whereupon, we identified ourselves to them and had a short discussion, showing them our search warrant and the fact that Judge Weber had signed it and told them, generally what we were going to do."

On January 4, 1977, Isaac testified:

"Q. Now, you do recall, do you not, the evening of the search?

"A. Yes. About five minutes after eight the security guard called me at my house.

"Q. The security guard from where?

"A. For - for the Lawyers Building.

"Q. O.K. Now the security guard called you. Did you go to the office?

"A. No, excuse me, the answering service called me and told me "the security guard wanted you urgent. Call the security guard in your building; urgent."

"Q. O.K.

"A. The answering service called me. I am sorry. O.K. I called the security guard. He say, 'Michael, some people here - some FBI people want to get to your office.' I say, 'Go ahead, That's ok.'

"The Court: Did you say that you told the security guard that it was all right for the FBI men to go ahead?

"The Witness: Yes sir, I did.

By Mr. Scarlata:

"Q. Did he indicate whether or not they had a warrant or anything like that?

"A. They told me they got some paper a warrant. Yea, I think so.

"Q. Did the security guard tell you, is my question?

"A. I don't remember that. But he told me there was some people with paper here and they want to get to my office."

The Constitution condemns only unreasonable searches. This search was instituted and conducted in a reasonable manner. See Mengarelli v. United States, 426 F.2d 985, 987-88 (9th Cir. 1970).

The appellees assert that the search was unconstitutional because the agents seized some items not listed in the search warrant.*fn8 They argue that because of this, all the evidence seized should be suppressed. The district court implicitly rejected this argument and correctly so. See Andresen v. Maryland, supra at 482 n.11. The Supreme Court has stated that the exclusionary rule has never been interpreted to proscribe the introduction of illegally seized evidence in all proceedings or against all persons. Stone v. Powell, 428 U.S. 465, 486, 49 L. Ed. 2d 1067, 96 S. Ct. 3037 (1976); United States v. Calandra, 414 U.S. 338, 348, 38 L. Ed. 2d 561, 94 S. Ct. 613 (1974). Assuming arguendo that the seizure of the items not listed in the warrant was illegal, this does not justify suppression of highly probative evidence consisting of those documents and records which were legally seized pursuant to a valid warrant. See Stone v. Powell, supra at 485.

III

A. The Statute of Limitations

The court below granted motions to dismiss indictments against some defendants because the indictments were returned after the state statute of limitation had expired.*fn9 We hold that the applicable period of limitations is governed by federal, rather than state law.*fn10 Title 18 U.S.C. § 3282 provides that:

"Except as otherwise expressly provided by law, no person shall be prosecuted, tried or punished for any offense, not capital, unless the indictment is found . . . within five years next after such offense shall have been committed."

Had Congress intended state statutes of limitations to apply to a federal criminal statute it would have so stated. An examination of the legislative history of Title IX of the Organized Crime Control Act, Title 18, U.S.C., Section 1961, et seq., reveals that the original proposed legislation now embodied in Title 18, U.S.C., Section 1962 included a proposed subsection (e). Proposed Section 1962(e) provided that:

"A violation of this section shall be deemed to continue so long as the person who committed the violation continues to receive any benefits from the violation." S. Rep. 91-617 (1969).

The legislative history of proposed Section 1962(e) is instructive:

"Subsection (e) provides that a violation is a continuing offense so long as one of the acts in the pattern produces a benefit to the offender. While the general criminal statute of limitations is five years, 18 U.S.C., Section 3282, certain offenses which produce a continuing result are also treated as continuing offenses. Conspiracy is such an offense. See United States v. Borelli, 336 F.2d 376 (2d Cir. 1964), cert. denied, 379 U.S. 960, [85 S. Ct. 647, 13 L. Ed. 2d 555] (1965); see also, Bramblett v. United States, 97 U.S. App. D.C. 330, 231 F.2d 489 (9th Cir. 1958)."

For another statutory provision making an offense continuing, see 18 U.S.C. § 3284.

The fact that proposed § 1962(e) was not enacted as part of RICO indicates that Congress intended to rely on 18 U.S.C. § 3282.

RICO is a federal law proscribing various racketeering acts which have an effect on interstate or foreign commerce. Certain of those racketeering, or predicate acts violate state law and RICO incorporates the elements of those state offenses for definitional purposes. State law offenses are not the gravamen of RICO offenses. RICO was not designed to punish state law violations; it was designed to punish the impact on commerce caused by conduct which meets the statute's definition of racketeering activity. To interpret state law offenses to have more than a definitional purpose would be contrary to the legislative intent of Congress and existing state law.*fn11

B. The Scope of RICO

The district court granted motions to dismiss the indictments against all the magistrate defendants and the constable defendants because, as he interpreted § 1962(c) of RICO, the independent status of these defendants removed them from the statute's purview. Section 1962(c) provides that:

"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 enterprises' affairs through a pattern of racketeering activities . . . ."

The district court held that the magistrates and constables were not "associated" with the enterprise within the meaning of the statute, concluding that § 1962(c) covers only those "inside" the enterprise rather than "outside". 429 F. Supp. at 725-26.

We note at the outset that Congress specifically directed that the provisions of RICO "shall be liberally construed to effectuate its remedial purposes."*fn12 The Courts have interpreted RICO in accordance with this Congressional mandate.*fn13 The legislative intent was to make RICO violations dependent upon behavior, not status. See United States v. Mandel, 415 F. Supp. 997, 1018 (D. Md. 1976). Section 1962(c) prohibits any person from engaging in the proscribed conduct, and defines the term "associated with" as direct or indirect participation in the conduct of the enterprise. At the least, the activities of the magistrates and constables as described in the indictments constitute indirect participation in the Agency's affairs. Indeed, a strong argument may be made that the allegations in the indictments, if true, rendered the defendants employees of the Agency who participated directly in its affairs.*fn14 This is so because without the referrals from the magistrates and the assistance of the constables, the Agency's business and its income would have been less than it was during the period from 1970 to 1975. Moreover, it is alleged that these defendants were paid directly by the Agency in return for referral of clients, just as salesmen or agents would be paid a commission for like services. Under either viewpoint, we hold that the activities specified an offense under § 1962(c) and we reverse the dismissal of the indictments against the magistrate and constable defendants.*fn15

C. The Role of State Law in RICO Offenses

The district court dismissed the indictments against the former employees and owners of the Agency to the extent that they alleged acts occurring prior to June 6, 1973. The district judge reasoned that since the former Pennsylvania bribery statute*fn16 provided for a term of imprisonment not exceeding one year for one convicted of offering a bribe (a bribor),*fn17 such offenses were not cognizable under RICO, which provides that the state offense must carry a penalty exceeding one year's incarceration.*fn18

We note that prior to the recodification of the state bribery statute, 18 P.S. § 4304 punished a person engaging in "corrupt solicitation" by imprisonment of not more than two years.*fn19 Following the "occupation or profession" of corrupt solicitation was also punishable by imprisonment not exceeding two years.*fn20 The indictment at Criminal No. 76-163 charged the former employees of and partners in the Agency with the practice or occupation of corrupt solicitation in violation of 18 P.S. § 4305 and, accordingly, states a predicate offense under § 1961(1) of RICO for those acts occurring prior to June 3, 1973.

We note further that by systematic paying of bribes to public officials and employees, those making payments committed "act[s] . . . involving . . . bribery" within the meaning of 18 U.S.C. § 1961(1)(A). The word "involving" utilized in the statutory definition of racketeering activity is broad enough to reach the conduct of owners and employees of a corrupt enterprise. The legislative history of 18 U.S.C. § 1961(1)(A) specifically states that "State offenses are included by generic designation."*fn21 This statement manifests the legislative intent to incorporate the Supreme Court's holding in United States v. Nardello, 393 U.S. 286, 21 L. Ed. 2d 487, 89 S. Ct. 534 (1969), into the RICO statute. Nardello stands for the proposition that alleging a state violation which falls within the generic category of the predicate offense is adequate to charge a violation of the Travel Act.*fn22 The test for determining whether the charged acts fit into the generic category of the predicate offense is whether the indictment charges a type of activity generally known or characterized in the proscribed category, namely, any act or threat involving bribery. See 18 U.S.C. §§ 1961(1) and 1962(c) quoted at note 2 above. The Court stated that ". . . the inquiry is not the manner in which States classify their criminal prohibitions but whether the particular state involved prohibits the extortionate activity charged." 393 U.S. at 295. We conclude that under former Pennsylvania law there were several offenses fitting within the generic category of bribery*fn23 and carrying prison terms in excess of one year. These were common law bribery*fn24 and the above-mentioned offenses of corrupt solicitation and the practice of corrupt solicitation.*fn25 Indeed, when the statute was recodified, all of these offenses were included in the new statute.*fn26 For these reasons, we conclude that the indictments charge offenses under 18 U.S.C. § 1962(c) and (d).*fn27

IV

In conclusion, we hold that the district court erred in suppressing the evidence and dismissing the indictments. We find the indictments to be sufficient, both on the conspiracy and the substantive counts, and reverse their dismissal by the district court. The case is remanded to the district court for further proceedings in accordance with this opinion.


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