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United States v. Peskin

decided: December 10, 1975.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
BERNARD M. PESKIN, DEFENDANT-APPELLANT



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division No. 73 CR 765 FRANK J. McGARR, Judge.

Clark, Associate Justice,*fn* Fairchild, Chief Judge, and Sprecher, Circuit Judge.

Author: Fairchild

FAIRCHILD, Chief Judge.

Appellant Peskin was indicted on 14 counts of a 23 count indictment charging conspiracy to violate the Travel Act, 18 U.S.C. § 371, substantive violations of the Travel Act, 18 U.S.C. § 1952, and tax fraud, 26 U.S.C. §§ 7201, 7206(1). The indictment alleged that Peskin, representing Kaufman & Broad, Inc. (K & B) (a home builder of national stature headquartered in California) had passed money to public officials of the Village of Hoffman Estates, Illinois in return for approval of a K & B zoning proposal. Peskin's coindictees, K & B, the former Mayor of Hoffman Estates (Roy Jenkins), and five other village officials (James Sloan, Howard Noble, Gerard Meyer, Herbert Gibson and Edward Pinger), pleaded guilty. Peskin was convicted by a jury on the conspiracy count, five substantive Travel Act counts, and one count of making a false statement on an income tax return.

On appeal Peskin contests the sufficiency of the evidence to establish the federal jurisdictional elements of the Travel Act, the denial of suppression of evidence, certain evidentiary rulings, and other alleged errors. For the reasons that follow, we affirm his conviction on all counts.

I. THE PAYOFF

Peskin, an attorney, handled various real estate matters for K & B. In November, 1967 Peskin advised Edward Stulberg, a K & B vice-president, that Rossmoor Corporation was about to sell a large tract of real estate in Hoffman Estates, Illinois. With a view toward residential development, K & B negotiated and agreed to purchase two parcels, one of 320 acres and the other of 90 acres. The sale was contingent on K & B obtaining satisfactory rezoning of the property.

Over the summer of 1968, the Village Zoning Board of Appeals held hearings on the proposed K & B rezoning, ultimately recommending approval of the plan to the Board of Trustees.*fn1 The evidence indicates that during this period Peskin approached Mayor Jenkins offering money to obtain approval of the rezoning. The evidence also shows that several village officials demanded $25,000 in return for approval of the K & B proposal. By late September K & B was prepared to pay at least $100,000 for zoning approval.

On October 10, 1968, the Board of Trustees adopted the Board of Appeals' recommendation to approve the K & B plan, but at a meeting the following week the Board voted against the ordinance effecting the change, giving a basis for an inference that the village officials were squeezing K & B for more money. Before the next Board meeting Jenkins and Peskin met with those trustees who had opposed the ordinance to persuade them to change their votes. At a Board meeting October 24, at which Peskin and Stulberg were present, the Board voted to reconsider, and the matter was placed on the agenda for October 30.

Sometime in October, agreement was reached on the amount of the payoff and manner of payment: K & B would pay through Peskin $35,000 in cash to be distributed among Jenkins, Noble, Sloan, Meyer, Gibson and Pinger at the time the rezoning was accomplished. An additional $35,000 would later be paid to these officials as occupancy permits were issued as construction of the housing development progressed. There was also talk of a transfer of a gasoline station site in the new development as a part of the payoff.

Since the K & B payment was to appear to be a fee for Peskin's services, it would be necessary to increase the payment from K & B to Peskin sufficiently to cover Peskin's liability for income tax thereon.

With a mutually acceptable price established, approval of the ordinance followed. At the October 30 meeting, Peskin, with Stulberg in attendance, presented the K & B position. In response, the local school board and several residents expressed opposition to the rezoning fearing that the increase in population resulting from the proposed development would overcrowd the schools. Nevertheless, the proposed ordinance rezoning the 320 acre parcel was approved. On November 14, the Board adopted the ordinance rezoning the 90 acre parcel.

Sometime between October 30 and November 30, Peskin paid Jenkins $35,000 in cash. Jenkins in turn distributed $5,000 to each of the other officials. Since the officials either declined to run for reelection or were defeated in elections the following April, the $35,000 balance was never paid. The transfer of the filling station site was never accomplished, though included in a Deutsch and Peskin bill to K & B as part of attorney fees (Jan. 27, 1969), and mentioned by Peskin to a K & B official in 1971.

Payment to Peskin was made by an Illinois subsidiary of K & B, as follows:

Nov. 14, 1968 $10,000.

Jan. 14, 1969 $25,000.

Feb. 25, 1969 $10,000.

April 10, 1969 $55,000.

On December 24, 1968, Peskin's partner Deutsch wrote two checks for $20,000 each to two young lawyers, ostensibly as fees. The payees cashed the checks, kept part for taxes, and returned the balance. Deutsch testified he did this in order to obtain $25,000 in cash for Peskin, who said he needed it for the village officials.

II. THE TRAVEL ACT

A. Count 5

Count 5 of the indictment charged that Peskin and the other original defendants caused Stulberg to travel from Detroit to Chicago on or about October 22, 1968 with intent to promote the unlawful activity of bribery and thereafter they performed acts to promote the carrying on of that unlawful activity in Illinois. Peskin asserts that since Stulberg came to Chicago for reasons in addition to his interest in the Hoffman Estates zoning, his travel was incidental to the bribery. However, section 1952 does not require that a defendant's travel be solely in pursuit of criminal activity, United States v. Gooding, 473 F.2d 425, 428 (5th Cir. 1973), cert. denied, 412 U.S. 928, 37 L. Ed. 2d 155, 93 S. Ct. 2752, and since Stulberg traveled to participate in the rezoning scheme, it cannot seriously be contended that his travel was incidental. Stulberg attended the meeting of the village Board October 24, at which the trustees appeared to change their direction to a favorable one. This meeting, and Stulberg's presence, could well be deemed very significant in bringing about the unlawful activity of bribery.

Peskin further argues that Count 5 is defective because Stulberg's travel cannot be attributed to him and there is no proof that he caused the travel. Unlike Rewis v. United States, 401 U.S. 808, 28 L. Ed. 2d 493, 91 S. Ct. 1056 (1971), the interstate travel at issue here was the travel of an essential, knowing and deliberate participant in the crime. It is well established that co-conspirators are responsible for the acts of their cohorts in furtherance of the crime. United States v. Joyce, 499 F.2d 9, 16 (7th Cir. 1974), cert. denied, 419 U.S. 1031, 95 S. Ct. 512, 42 L. Ed. 2d 306, 43 U.S.L.W. 3306. Therefore, even apart from the probability that Peskin requested Stulberg's presence in Chicago in order to attend the meeting, Peskin is liable for Stulberg's travel because it furthered their common purpose. United States v. Chambers, 382 F.2d 910, 913-14 (6th Cir. 1967). See United States v. Lee, 448 F.2d 604, 607 (7th Cir. 1971), cert. denied, 404 U.S. 858, 30 L. Ed. 2d 100, 92 S. Ct. 107.

As an adjunct to his causation argument, Peskin contends that even though the indictment is couched in causal language, the failure to cite 18 U.S.C. § 2(b) precludes Peskin's conviction under section 1952 for what is essentially an aiding and abetting charge. This argument is clearly without merit, the indictment informed defendant of the offense charged. It alleged that he, and others, wilfully did cause Stulberg to travel. There was nothing misleading about the charge. Omission of a statutory citation is not fatal "if the error or omission did not mislead the defendant to his prejudice." Rule 7(c)(3), Fed. R. Crim. P.

There is no question but that Peskin acted to promote the intended bribery after the Stulberg travel.

B. Counts 6-9

Counts 6, 7, 8 and 9 charged defendants with using and causing to be used facilities in interstate commerce with intent to promote the unlawful activity of bribery. The facilities were alleged to be various banks and the carrier system between Chicago and Detroit. In each count it was alleged that a check drawn upon a K & B account in a Detroit bank and payable to a K & B Chicago subsidiary was deposited in its account in Chicago; and that the check was transmitted from bank to bank until it reached the drawee bank in Detroit and charged to the K & B account. In each count it was charged that Peskin and others thereafter performed acts to promote the carrying on of the unlawful activity of bribery in Illinois.

The proof showed, as before stated, that Peskin was paid $100,000 by checks of the subsidiaries on four dates. These were in payment of billings by Peskin directed to Stulberg for attorney fees. In fact, the total sum was to cover the $35,000 Peskin paid the village officials, Peskin's income tax liabilities on the sum transferred, and his fee for services. On the day or the day after each of these checks to Peskin was drawn, one of the checks in these four counts was drawn and deposited. There was evidence that without such deposits, there were insufficient funds in the subsidiary's account to cover the checks drawn to Peskin. Thus it is clear that these K & B checks, and their interstate transmission in the process of clearing, were essential in transferring to Peskin the funds necessary to carry out the arrangements between Stulberg and himself. There is no evidence that Peskin was specifically aware of these checks. He contends on appeal that the use of interstate commerce facilities was minimal and incidental and therefore insufficient under the Travel Act, and, additionally, that the violation of state law was completed before such use.

We first treat the argument that the use of interstate facilities was minimal and incidental.

Although the Travel Act, 18 U.S.C. § 1952,*fn2 was enacted to combat organized crime, United States v. Nardello, 393 U.S. 286, 290-91, 21 L. Ed. 2d 487, 89 S. Ct. 534 (1969), its language and scope are not so limited. United States v. Archer, 486 F.2d 670, 678-80 (2d Cir. 1973); United States v. Phillips, 433 F.2d 1364, 1367 (8th Cir. 1970), cert. denied, 401 U.S. 917, 27 L. Ed. 2d 819, 91 S. Ct. 900; United States v. Roselli, 432 F.2d 879, 885 (9th Cir. 1970), cert. denied, 401 U.S. 924, 91 S. Ct. 883, 27 L. Ed. 2d 828. Nevertheless, we are mindful that Congress did not intend "a broadranging interpretation of § 1952." Rewis v. United States, 401 U.S. 808, 812, 28 L. Ed. 2d 493, 91 S. Ct. 1056 (1971).

Peskin argues that he neither knew of nor solicited the interstate transfer and that the source of the funds was immaterial to him as well as to the bribery. Citing United States v. Isaacs, 493 F.2d 1124 (7th Cir. 1974), cert. denied, 417 U.S. 976, 94 S. Ct. 3184, 41 L. Ed. 2d 1146; United States v. Altobella, 442 F.2d 310 (7th Cir. 1971); and United States v. McCormick, 442 F.2d 316 (7th Cir. 1971), he concludes that the use of interstate facilities to clear the Detroit checks was "minimal" and "incidental" and thus insufficient to invoke the Travel Act.

The transmission of funds to Mr. Peskin was essential to the carrying on of the illegal activity. Although he had advanced the first payments, others were contemplated, and no one would expect him to complete the plans if he were not reimbursed in the first instance. The deposit and interstate clearance of the Detroit checks were essential in fact to the payment of Peskin, though he and perhaps Stulberg were unaware of the details. We do not consider this use of interstate facilities "minimal" and "incidental" as those terms have been used in this context.

The significance of the use of interstate facilities in this case differs markedly from that in the cases relied upon. Altobella held that the clearance of an out-of-state check used by the victim of an extortion to raise cash with which to make payment even though followed by the distribution of the proceeds among the wrongdoers was minimal and insufficient to invoke federal jurisdiction. In McCormick an operator of a purely local gambling activity advertised for salesmen. A few of the newspapers containing the advertisements were mailed to out-of-state subscribers. This court held "there was no showing that defendant's lottery in any way depended upon or included interstate operations." McCormick, supra, 442 F.2d at 318. In Isaacs, three checks were drawn in Illinois on an Illinois bank, to distribute the proceeds of unlawful activity. They were deposited in Illinois banks, but cleared through the Federal Reserve Bank in St. Louis. Noting that checks which would have cleared through Chicago could just as easily have been utilized, the court held that the use of interstate facilities which in fact occurred "was so minimal, incidental, and fortuitous, and so peripheral to the activities" of defendants, that it was error to submit the counts to the jury. Isaacs, supra, 493 F.2d at 1146. Rewis v. United States, 401 U.S. 808, 28 L. Ed. 2d 493, 91 S. Ct. 1056 (1971) was a case where customers crossed a state line to patronize an otherwise local unlawful gambling activity of defendants. The Supreme Court held that, at least in the absence of a finding that defendants "actively sought interstate patronage," the interstate travel of the customers did not provide grounds for prosecution of defendants under the Travel Act.

Here, as already noted, the clearance of the Detroit checks was necessary in fact to complete reimbursement of Peskin for the bribe money he had advanced, and such reimbursement furthered the contemplated later illegal activity.

That Peskin was not specifically aware of the interstate transfer is unimportant. The use of interstate facilities provides the basis for federal jurisdiction. The statute does not expressly provide that the defendant must knowingly use interstate facilities. United States v. LeFaivre, 507 F.2d 1288, 1297 (4th Cir. 1974), cert. denied, 420 U.S. 1004, 95 S. Ct. 1446, 43 L. Ed. 2d 762; United States v. Hanon, 428 F.2d 101, 108 (8th Cir. 1970) (en banc), cert. denied, 402 U.S. 952, 29 L. Ed. 2d 122, 91 S. Ct. ...


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