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LEFEVOUR v. UNITED STATES

August 29, 1990

RICHARD F. LEFEVOUR, Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant


Charles R. Norgle, United States District Judge.


The opinion of the court was delivered by: NORGLE

CHARLES R. NORGLE, UNITED STATES DISTRICT JUDGE

 Before the court is the 28 U.S.C. § 2255 petition of Richard F. LeFevour. On July 13, 1985, after a seven week trial, LeFevour was convicted of 53 counts of committing mail fraud, *fn1" five counts of filing false tax returns, *fn2" and one count of violating the Racketeering Influenced and Corrupt Organizations Act *fn3" ("RICO"). On August 27, 1985, LeFevour, in poor physical health, was sentenced to an aggregate of twelve years in the custody of the Attorney General -- three year concurrent sentences on each mail fraud count, two year concurrent sentences on each tax count, and seven years on the RICO count. The Seventh Circuit rejected LeFevour's direct appeal. See United States v. LeFevour, 798 F.2d 977 (7th Cir. 1986). Now, through this habeas corpus petition, LeFevour collaterally challenges his mail fraud convictions as resting solely on the "intangible rights" theory invalidated in McNally v. United States, 483 U.S. 350, 107 S. Ct. 2875, 97 L. Ed. 2d 292 (1987).

 FACTS

 LeFevour was a judge of the Circuit Court of Cook County, Illinois from 1968 to 1984. He gained notoriety as the central figure in the corruption of the state courts in Cook County, exposed in an undercover operation known as "Operation Greylord". The evidence admitted at his trial compelled the conclusion that LeFevour was a corrupt judge, who, not content with "selling his own robe" on a daily basis, urged and facilitated the corruption of not only lawyers and court personnel, but also of other judges under his supervision, for his own profit.

 For nearly his entire tenure on the bench, LeFevour engaged in a number of bribery schemes, taking cash and a variety of services. A brief description of certain of them is in order. From 1969 until 1981, when he left Traffic Court, he accepted bribes for favorable dispositions of drunk driving cases. His "going rate" was $ 100, and he received this on hundreds of occasions between 1969 and 1972 from numerous different corrupt lawyers, most of whom have been convicted in separate cases.

 Between 1978 and 1981, LeFevour also accepted bribes for dismissing the parking tickets of multiple violators. In this scheme the "going rate" was usually one-half of the total amount owed on all tickets issued to a given violator. The basic structure of the parking ticket scheme was simple. LeFevour had three Chicago policemen working as his bagmen. Each contacted parking violators with at least ten outstanding tickets, informed the violators that they could arrange for the tickets to be dismissed for approximately one-half the total amount of money due, and then brought LeFevour both the cash collected from the violators and the necessary papers so that he could dismiss the tickets. LeFevour dismissed hundreds of parking tickets in this manner. The cash payments were usually handed to LeFevour in his court chambers, and he put the cash into his pockets or his desk. Traffic fines are normally paid to the Circuit Court, with the funds collected on tickets issued by the City of Chicago passed along to the municipal authorities. See Ill. Rev. Stat. ch. 95-1/2, para. 16-105. Although the violators often were given the impression and professed to actually believe that they were properly paying their parking fines, when LeFevour dismissed tickets in exchange for a bribe no money was received by the Clerk of the Court, the City of Chicago, or any other public treasury. LeFevour, by way of his bagmen, diverted the money paid by the parking violator from the court and the municipality, keeping it all for himself and his underlings. Id. Where the parking violator had already been arrested and posted a cash bond, LeFevour also arranged for the return of the cash bond refund.

 LeFevour was also not adverse to accepting payment "in kind." He engaged in a variation on his parking ticket scheme in exchange for the free use of new automobiles from an auto leasing company. When individual lessees received parking tickets, the leasing company was ultimately responsible for the tickets. From 1976 to 1982, LeFevour disposed of these tickets by impleading the individual lessees as defendants. Once the individual lessees were impled, it was the policy of the City not to require payment from the leasing company. In return for effectively letting the leasing company off the hook, LeFevour received free use of a new car each year. The leasing company was clearly able to pay substantial fines.

 Once LeFevour left Traffic Court to become Presiding Judge of the First Municipal District in 1981, he began engaging in a new bribery scheme known as the "Hustlers' Club." A hustler is a corrupt lawyer who seeks out persons who have been arrested and posted cash bonds. In violation of Circuit Court of Cook County rules, the hustler approaches these criminal defendants as they arrive for court appearances, offering to represent them and implying a favorable result if they will sign over to the hustler the cash bond refunds ("CBR's"). The defendants are entitled to the CBR's at the end of their cases, if their case is disposed of favorably to them and the money the CBR's represent not totally depleted by fines or court costs. Under the Hustlers' Club scheme, a number of corrupt lawyers paid monthly cash bribes to LeFevour, in exchange for the "privilege" of hustling clients. Obtaining the CBR's was an essential part of the hustling scheme, since these bribes were funded, in part, by the CBR's. Therefore, LeFevour, using his power as Presiding Judge, took the extra step of making sure that the judges assigned to Hustlers' Club courtrooms would cooperate with the scheme. To ensure their cooperation, these judges were also paid bribes by members of the Hustlers' Club. From May 1981 until the hustling scheme ended in August, 1983 (when Operation Greylord was made public), LeFevour received $ 2,000 in bribes each month from the Hustlers' Club lawyers.

 In order to cover up his illegal conduct and effectively increase his "income", LeFevour concealed from the Internal Revenue Service the income he received from these bribery schemes by filing false income tax returns. From 1978 to 1982, LeFevour failed to report over $ 90,000 in income, and falsely reported approximately $ 61,000 in bribes as income from gambling and art sales. Finally, LeFevour also covered up his schemes by failing to report his income from these bribery schemes on the statements of economic interest he was required to file each year with the Illinois Supreme Court. From 1972 through 1984, LeFevour reported on his annual economic interest statements that he had no economic interests or relationships that might create a substantial conflict of interest for him as a judge. Never did he report any payments from attorneys to influence his official duties, nor did he report that he had received the use of free automobiles and also office equipment for personal use.

 DISCUSSION

 LeFevour's mail fraud convictions are based upon two of the separate bribery schemes discussed above; taking money or payment in kind in exchange for dismissing parking tickets (Counts 2 through 36), and taking money in exchange for permitting attorneys to hustle clients. (Counts 37 through 54). LeFevour contends that the indictment, evidence, and jury instructions relating to both the parking ticket and the hustling schemes were consistent only with an intangible rights theory, thereby rendering his convictions invalid under McNally.4 If LeFevour prevails, his aggregate sentence would be reduced from twelve to nine years incarceration.

 The mail fraud statute prohibits the use of the United States mails to execute "any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, . . ." 18 U.S.C. § 1341. In McNally, the Supreme Court unexpectedly held that "the mail fraud statute clearly protects property rights, but does not refer to the intangible right of the citizenry to good government." 107 S. Ct. at 2879. Thus, while the fraudulent deprivation of property, whether it be tangible or intangible, see Carpenter v. United States, 484 U.S. 19, 98 L. Ed. 2d 275, 108 S. Ct. 316 (1987), falls within the purview of the mail fraud statute, the fraudulent deprivation of the intangible right of good government or "faithful service", or other intangible rights, does not.

 Because the rule announced in McNally applies retroactively, see Messinger v. United States, 872 F.2d 217, 220 (7th Cir. 1989) (citing United States v. Folak, 865 F.2d 110, 113 (7th Cir. 1988); Magnuson v. United States, 861 F.2d 166, 167 (7th Cir. 1988)), the Courts of Appeal have been called upon to review numerous pre-McNally mail fraud cases, such as this one, prosecuted under an intangible rights theory. McNally has not been treated as a rule of pleading, United States v. Wellman, 830 F.2d 1453, 1563 (7th Cir. 1987), for to do so would render infirm every case prosecuted under an indictment alleging fraudulent deprivation of the right to good government. Instead, the Seventh Circuit has recognized that "the legal characterization the indictment places on the scheme should not obscure the fact that the specific conduct alleged in the indictment is clearly proscribed by the mail fraud statute." United States v. Cosentino, 869 F.2d 301, 306 (7th Cir. 1989) (quoting Wellman, 830 F.2d at 1462) Thus, the inquiry is of the specific acts alleged, focusing not on the language used to describe them, but on the substance of the actions. See Messinger, 872 F.2d at 221. Consequently, the presence of intangible rights language is not necessarily fatal. See Id. Often the same scheme may simultaneously work a deprivation of an intangible right and a deprivation of a property right, see United States v. Doe, 867 F.2d 986, 988-89 (7th Cir. 1989), or create a substantial potential to deprive another of property. See United States v. Keane, 852 F.2d 199, 205 (7th Cir. 1988). A true intangible rights case is one that only involves "rights whose violation would ordinarily result in no concrete economic harm; . . ." United States v. Bailey, 859 F.2d 1265 (7th Cir. 1988).

 If it is determined that the scheme defrauded another of a property right, then the reviewing court must determine whether despite the fact that the case was prosecuted under an intangible rights theory, the jury necessarily had to convict the defendant for defrauding another of a property right. This entails examining the ...


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