Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 82 CR 389 -- George N. Leighton, Judge.
Bauer and Cudahy, Circuit Judges, and Beatty, District Judge.*fn*
The defendant, a former Deputy Commissioner of the Cook County Board of (Tax) Appeals, was found guilty following a jury trial of mail fraud in violation of 18 U.S.C. § 1341 (1982), racketeering in violation of 18 U.S.C. § 1962(c) (1982) ("RICO") and obstruction of a federal criminal investigation in violation of 18 U.S.C. § 1510 (1982). We affirm the conviction on all counts.
The defendant, Stephen T. Gorny, served as a Deputy Commissioner of the Cook County Board of (Tax) Appeals ("the Board") from May 1, 1978 to June 3, 1982. The Board is an agency of Cook County empowered to receive, hear and review complaints relating to real estate property tax assessments.*fn1 One of the two elected commissioners of the Board or one of their deputies would review a complaint challenging a property tax assessment. If the first reviewing official determined that an assessment was correct, the file received no further treatment. If the first official determined to lower the assessment, a new figure was entered on the file, and then the other commissioner or a deputy reviewed the file, although the second review was often pro forma. There are virtually no criteria specified in Illinois law to be applied in determining a real estate assessment, and thus each commissioner and deputy enjoyed broad discretion in deciding the merits of individual cases. When a real estate tax assessment reduction was granted, the lowered assessment was reflected on the second installment of the taxpayer's real estate bill.
During the approximately four years that Gorny served as a deputy commissioner on the Board, he received several payments in cash and other personal advantages, primarily through his outside law practice which he was permitted to maintain, from attorneys who practiced before the Board. At trial, the government presented testimony from several practitioners who had given cash or other benefits to Gorny and some of whom had previously been indicted, pled guilty and so were cooperating with the government.
This testimony revealed that, unlike some of Gorny's predecessors, Gorny did not receive payments based on the outcome of any specific case nor was the amount he received based on a percentage of the reduction of an assessment. See United States v. McManigal, 708 F.2d 276, 278-80 (7th Cir.), vacated on other grounds, 464 U.S. 979, 78 L. Ed. 2d 355, 104 S. Ct. 419, reaffirmed on other grounds, 723 F.2d 580 (7th Cir. 1983) ("McManigal "). Nevertheless, two attorneys (Jay Witt and Marshall Fleischman) who had practiced before the Board testified that they gave Gorny approximately $2,000 in cash over the period of Gorny's employment at the Board so that he would deal favorably with their files (Tr. 253-69, 1077-83). An appraiser, Lawrence Starkman, who was a partner in a real estate partnership with several Board practitioners, testified that their partnership employed Gorny to help with a real estate tax assessment case in Kane County. Gorny, who was permitted to handle real estate tax matters outside of Cook County, received a fee of $1,085 for little more than a phone call and despite the fact that the tax reduction actually granted was less than the figure which had previously been used to calculate Gorny's fee (Tr. 864-68, 904-06). Finally, Gorny received $4,000 in cash from Robert Berger, the president of a tax consulting group, ostensibly as a referral fee, while, in fact, Gorny had not made any referral (Tr. 378-403).
Not only did Gorny receive approximately $9,000, mostly in cash payments, during his approximately four years of employment at the Board, but these funds were received under somewhat suspicious circumstances. The payment from Starkman was received in the form of a personal check which was blank as to the amount. Gorny's friend, Zachary Stanger, who will be discussed below, ultimately came to fill in the amount (Tr. 868-98). Witt gave four payments of $500 each to Gorny and, on at least one occasion, passed the cash to Gorny in a white envelope under the table at a restaurant (Tr. 253-69). Fleischman made one of his cash payments of $1,000 by handing Gorny an envelope in the men's room of a club where they were having lunch (Tr. 1082). None of the payments from Witt and Fleischman was included on Gorny's statement of economic interest which required that he list any individuals or partnerships from whom he had received a gift or gifts aggregating more than $500 during a single year (Tr. 1176-78).
While Gorny's receipt of these funds could not be linked directly to any action on a particular real estate assessment file, these practitioners enjoyed an unusually high rate of success in their practice before the Board. While the average success rate was 35%, Witt, for example, enjoyed a success rate of nearly 80% (Tr. 1207) and Fleischman a rate of approximately 93% (Tr. 1214). The overwhelming majority of the cases on which these practioners received favorable treatment were handled by Gorny as the first reviewing official.
The twelfth count, for obstruction of a federal criminal investigation, was based on several conversations including one in which Gorny warned Witt that his files at the Board had been subpoenaed (Tr. 266-67). On another occasion, Gorny seems to have briefly attempted to encourage Witt to alter his account of the nature of the gifts he had given to Gorny (Tr. 273). The racketeering count, count eleven, was based on the pattern and practice of Gorny's conduct in accepting bribes, including both the previously described activities which underlay the ten counts of mail fraud and other similar incidents on which either the government declined to prosecute or Gorny received a directed verdict of acquittal.
Gorny appeals his conviction on the ten mail fraud counts on the ground that the evidence was insufficient to support a conviction. This contention is based primarily on two assertions: first, that the evidence was insufficient to establish bribery or a cognizable scheme to defraud; second, that the mailing of the second tax statement reflecting the reduction granted by Gorny was insufficient to establish mail fraud. We shall examine each of these contentions.
Gorny argues that the money and business referrals he received were not bribes but rather were presents neither given nor taken with intent to influence the exercise of discretion in his work at the Board. The government, however, asserts that it demonstrated that Gorny received ten payments totalling approximately $9,000 from five lawyers and tax consultants who practiced before the Board and who achieved remarkably high rates of success in their practices. Thus, there was sufficient evidence for the jury to conclude that both Gorny and the various practitioners had the intent to influence official conduct improperly. Several of the witnesses, in fact, testified that they gave Gorny money or referrals with the intent to receive some form of favorable treatment from Gorny. See Tr. 385 (testimony of Berger), 275 (testimony of Witt), ...