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United States v. Lynch

decided*fn*: September 3, 1982.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 81-Cr-97 -- Nicholas J. Bua, Judge.

Wood and Eschbach, Circuit Judges, and Campbell, Senior District Judge.*fn**

Author: Per Curiam

The defendant, Joan Lynch, appeals her conviction on nine counts of mail fraud under 18 U.S.C. § 1341 and one count of conspiracy to commit racketeering under 18 U.S.C. § 1962(d).*fn1 Underlying these charges was her participation with her husband, Ronald Lynch, now deceased, Joseph Armato, James Woodlock, and Jimmie Smith in a scheme to bypass administrative procedures at the Cook County Board of Appeals ["the Board"] in order to obtain reductions in Cook County property tax assessments for clients of the R.M. Lynch Company. The defendant and her husband, before his death, owned the company, which was in the business of representing property owners appealing real estate tax assessments before the Board.

The R.M. Lynch Company functioned by bribing employees at the Board to forge the initials of Board of Appeals Commissioners indicating approval of reductions. The Commissioners were authorized by law to reduce property tax assessments, but this scheme bypassed all administrative review of the assessments. It was implemented by passing lists of R.M. Lynch Company cases to Board employees. The lists itemized the company's cases pending before the Board and distinguished between cases where reductions were sought and cases where they were not. Employees at the Board received and forwarded the lists to Deputy Commissioners, Thomas Lavin and Donald Erskine. Lavin and Erskine, in turn, forged the Commissioners' initials. Thus, property tax reductions were obtained for R.M. Lynch Company clients without any review of the initial tax assessments. The R.M. Lynch Company paid an estimated $111,000 in bribes to Board employees over five years to effectuate this scheme.

The defendant first argues that the evidence presented at trial, even taken in the light most favorable to the government, Glasser v. United States, 315 U.S. 60, 80, 86 L. Ed. 680, 62 S. Ct. 457 (1942), does not show her knowledge of the scheme or her participation in it. Despite the defendant's contentions, substantial evidence supported the jury's conclusion.

In addition to secretarial duties at this small family-owned company, the defendant was the bookkeeper. She kept the financial records, wrote checks, and billed clients during the period before her husband's death. The government introduced evidence to show that the company may have bribed employees at the Board with funds withdrawn from eight different bank accounts. The defendant prepared the checks and recorded the withdrawals in account records as "cash" or "draw." She also typed the lists informing Board employees of the company cases where reductions were sought. The defendant argues that this evidence hardly implicates her in the bribery scheme. She contends that the activities were entirely consistent with her secretarial and bookkeeping responsibilities at the company.

Other evidence introduced at trial, however, belies this contention. One month after her husband's death, the defendant personally paid James Woodlock, a computer supervisor at the Board and a major figure in the scheme, $500 in cash. Asking for the money, Woodlock explained only that it was a debt Ron Lynch owed him. The defendant gave him the funds without further question. Woodlock testified that this payment followed a previous conversation with Joseph Armato, a company employee, which occurred in the defendant's presence and after her husband's death. Armato told Woodlock "you know, everything is going to keep going, the company, everything will be going. The deal that we have will still be there." The defendant concedes that she acquiesced. In addition, the defendant personally authorized nearly $3000 in payments to Woodlock and Jimmie Smith, another participant in the scheme.

Finally, the defendant admitted to an FBI agent that she was aware that her husband bribed officials at the Board and that she continued the practice herself. The defendant dismisses the significance of both statements. The defendant contends that, because neither statement demonstrates when she first discovered the bribery scheme the government failed to implicate her in the conspiracy before her husband's death. Though the statement, considered in isolation, may not demonstrate the defendant's early participation in the conspiracy, combined with the other evidence introduced at trial, the admission gives rise to the plain inference that the defendant knew of the scheme before and after her husband died.*fn2

The defendant was also convicted on one count under 18 U.S.C. § 1962(d). The jury found that, with others at the R.M. Lynch Company, the defendant engaged in a pattern of racketeering activity by committing multiple acts of bribery and mail fraud.*fn3 The government alleged Board employees Jimmie Smith, James Woodlock, and Thomas Lavin received bribes from the Company.

The defendant argues that the government presented insufficient evidence to support this conviction. The defendant asserts that the funds paid Jimmie Smith were not bribes under Illinois law because they were not intended to influence him in his official capacity. The defendant claims that Smith, who was a hearing examiner at the Board, was paid a weekly "gratuity" to monitor the status of the R.M. Lynch Company cases. Once or twice weekly, Joseph Armato passed Smith lists of pending appeals and Smith would apprise the company of the status of those cases. The defendant contends this was not illegal. See People v. Jordan, 15 Ill. App. 3d 672, 304 N.E.2d 713 (1973).

The jury, however, had ample evidence from which to conclude that Smith's role in the scheme was broader than the defendant depicts it and that he acted in his official capacity during that time. Smith's responsibilities, as a hearing officer, included indicating on Board files that no tax reduction should accrue when a property owner did not appear personally or by counsel at the Board hearing to contest the assessment. After attending several meetings where Lavin, Erskine, Woodlock, and others discussed the means to fraudulently process appeals of assessments, Smith treated R.M. Lynch Company and other cases where taxpayers did not appear as if they had. Thus, assessments in these cases were reduced even though the taxpayers or their representatives never appeared before the Board. Erskine paid Smith for these services. In addition, Smith passed the lists of the R.M. Lynch Company cases to Erskine and other conspirators. Finally, the defendant regarded Smith as acting in his official capacity since she authorized large payments to induce him to increase his efforts on behalf of the R.M. Lynch Company at the Board. The evidence at trial clearly established that Smith's activities surpassed simply monitoring the company's cases and demonstrated that Smith ignored established policies of the Board on behalf of the R.M. Lynch Company.

Further, the defendant argues that the evidence at trial did not establish the knowlege or intent necessary to engage in bribery. She contends that all bribes paid Deputy Commissioner Lavin occurred before her husband's death, when she was unaware of the scheme, and that in giving $500 to Woodlock after his death, she genuinely believed that it was repayment for a debt. This is the same argument presented previously. Having concluded that substantial evidence supported the conclusion that the defendant knew of the scheme and participated in it, we need not consider the argument again in a related context.

Moreover, the defendant asserts, for the first time in the reply brief, that a fatal variance existed between the proof offered at trial and the allegations raised in the indictment. The defendant argues that although the indictment charged that a single conspiracy existed to bribe employees at the Board from 1975 to 1979, the evidence at trial established the existence of two separate conspiracies to effectuate this goal. One conspiracy operated before her husband's death, when Lynch, Lavin, Erskine, and others participated. The second operated after Lynch's death, when Lavin and Erskine no longer participated and Woodlock became the principal figure in the scheme at the Board. The argument is meritless. The mere fact that some conspirators withdraw from a conspiracy or that the methods used to perpetrate the scheme changed slightly does not indicate that one conspiracy has ended and that another has begun or that a fatal variance exists when the indictment alleges the existence of a single conspiracy. See United States v. Lyons, 670 F.2d 77 (7th Cir. 1982).

The defendant next argues that the district court erred by declining to instruct the jury that "neither association with conspirators or knowledge of a law violation is sufficient to make the defendant a conspirator." The defendant proposed the instruction and argues that the failure to give it allowed the jury to presume the defendant's participation in the conspiracy from her close relationship with the other conspirators. The defendant argues that an additional instruction informing the jury that "no person can intentionally avoid ...

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