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UNITED STATES v. SHIELDS

July 25, 1991

UNITED STATES OF AMERICA, Plaintiff,
v.
DAVID J. SHIELDS and PASQUALE F. DELEO, Defendants.


ROVNER


The opinion of the court was delivered by: ILANA DIAMOND ROVNER

MEMORANDUM OPINION AND ORDER

I. INTRODUCTION

 In Count Five of the superseding indictment in this case, defendants David J. Shields and Pasquale F. DeLeo are charged with causing FBI undercover agent James Nixon to travel in and use the facilities of interstate commerce from August 24, 1988 to August 29, 1988 in order to facilitate unlawful activity (namely, bribery) in violation of the Travel Act, 18 U.S.C. ยง 1952. Shields has moved to dismiss this count of the indictment, contending that the facts underlying the charge reveal no effort on his part to cause Agent Nixon to travel in or use the facilities of interstate commerce. DeLeo has moved to dismiss on the same grounds. For the reasons set forth below, defendants' motions are denied. *fn1"

 II. FACTS

 The facts, for purposes of this motion, are not in dispute. They are alleged in detail in the indictment, and further fleshed out by the tape recordings and transcripts of electronically monitored conversations involving the defendants. As it must on a motion to dismiss, the Court has assumed the allegations of the indictment to be true, and has drawn all inferences which reasonably arise from the indictment and the recorded conversations in favor of the government. See United States v. Barta, 635 F.2d 999, 1002 (2d Cir. 1980). However, the Court means to express no opinion as to the merits of the government's case against the defendants; the Court's task here is solely to determine whether the indictment states a legally cognizable Travel Act charge against the defendants.

 The undercover investigation which produced the indictment in this case was conducted through a mock lawsuit filed in the Circuit Court of Cook County, Illinois, Chancery Division in 1988. (Indictment P1(e).) That case, Nichols v. Wilson, No. 88 CH 6337, was randomly assigned to defendant Shields, presiding judge of the Chancery Division. *fn2" ( Id.) Robert J. Cooley, an attorney cooperating with the FBI in its investigation, posed as the plaintiff's attorney, and Nixon posed as the plaintiff (Nichols). (Id.) Other FBI agents assumed the roles of the defendant (Wilson) and his attorney, Judson Doss. (See id.) Nixon was based in the State of Washington, and thus was required to travel to Illinois when court appearances in the Nichols case were necessary.

 On August 19, 1988, Cooley moved before Shields for a temporary restraining order on behalf of his client. *fn3" According to the indictment, Cooley had previously met with DeLeo, who had represented that Shields would rule favorably to Cooley's client in exchange for money. (Indictment PP4- 5.) Cooley had agreed to pay DeLeo $ 2,500 for delivery to Shields in exchange for favorable treatment on Cooley's forthcoming motion for a temporary restraining order. (Id. P5.) Cooley delivered the money to DeLeo prior to the hearing on August 19. (Id. P6.) Cooley subsequently appeared before Shields, who granted his motion. (Id. P7.) Only Cooley and Nixon were present at that hearing. At that time, a preliminary injunction hearing was scheduled for August 29, 1988.

 The indictment alleges that Cooley met with DeLeo again on August 24, 1988. (Indictment PP9-10.) It further alleges:

 
When Cooley told defendant PASQUALE F. DELEO that the attorney for Wilson, Cooley's opponent, was planning to ask for a hearing and that Cooley's client, (Nichols) was in Seattle, defendant PASQUALE F. DELEO told Cooley that Cooley did not need to avoid a hearing: "let this guy [defendant DAVID J. SHIELDS] rule he's going to keep the money locked up . . . get in touch with your client, tell him to be there, I'll make sure this guy [defendant DAVID J. SHIELDS] rules in your favor." Cooley and defendant PASQUALE F. DELEO discussed paying defendant DAVID J. SHIELDS "another two bits" [$ 2500] for his continuing assistance.

 (Id. P10.)

 On August 29, 1988, the date previously scheduled for the preliminary injunction hearing, Cooley appeared before Shields on behalf of Nichols. Barbara Newhouse, an FBI agent posing as Doss' secretary, appeared on behalf of Wilson. Newhouse explained that Doss was out of town, but would be returning that evening. (Transcript at 2, Tape No. 177, Aug. 29, 1988.) Cooley reported that his own client was also out of town in Seattle, but upon inquiry from Shields, indicated that he "will have him back tomorrow." (Id. at 3.) Shields continued the hearing until the following day, and indicated that the temporary restraining order would remain in effect until that time. (Id.)

 The parties (including Nixon) appeared before Shields on the following day. After holding a conference with them in an attempt to settle the case, Shields granted a preliminary injunction in favor of Cooley's client. (Indictment P12.) Allegedly, Cooley then paid $ 2,500 to DeLeo, who in turn paid Shields. (Id. PP13, 14.)

 Agent Nixon's travel to Illinois for purposes of the August 30, 1988, hearing is the foundation for the Travel Act violation alleged in Count Five. Shields challenges his liability for that purported violation on two grounds: (1) The circumstances underlying the Travel Act charge in this case do not fall within the intended scope of the Act; and (2) the government manufactured federal jurisdiction under the Travel Act by employing an out-of-state agent in its undercover investigation. Emphasizing that neither he nor DeLeo are alleged to have engaged in interstate activity themselves, Shields contends that he can only be held liable under the Travel Act to the extent he actively encouraged the interstate conduct of Nixon in furtherance of the bribery alleged in the indictment. Shields argues that the facts here do not reveal any such encouragement, because the decisions to file a case in Illinois court and to use an out-of-state agent were made by the government, not by Shields or DeLeo. "Having made these decisions, travel by Nixon to Chicago was a foregone result, and, under the circumstances, there was very little or nothing that Shields or DeLeo could have done to prevent such travel." (Shields Mem. at 10.) Shields contends that the only influence he might have exercised with respect to Nixon's travel was to schedule the hearings for which Nixon would inevitably have to travel to Chicago, and these dates he set at the parties' (i.e. the government's) convenience. Thus, in Shields' view, he did nothing to encourage Nixon's interstate travel and cannot properly be held liable under the Travel Act. The government contends that in light of what transpired on August 24, 1988, the Travel Act charge against Shields and DeLeo is well founded. Because the government's argument rests principally upon the exchange between Cooley and DeLeo on that date, it is useful to quote in full from the relevant portion of the transcript of this conversation: n4 DELEO: What you doin? COOLEY: Not much. The ah, this thing is due back up on Monday at 11:00 for a hearing. I talked to (IA) attorney and he's obviously hot now that I locked up the account without him being there. They weren't there the last time when I got the account locked up. His client is furious because his client needs some money right now. DELEO: Ok COOLEY: Apparently the guy needs like a hundred thousand to do something and he came back into town and went to the bank and couldn't touch the money. Got a hold of the lawyer and then blew up. Blew up ski-hi. The thing is set for eleven o'clock Monday. My thing is if we can avoid, in other words, if I can avoid a hearing, if we have a hearing the judge is liable to have to give him something at a hearing. If I can avoid having a hearing, the judge told me to take a ten day date he said. He said mark down a date in ten days so I talked to his clerk and I got the twenty-ninth which is next Monday. If we can get this thing put over for a couple of weeks,the hearing for two or three weeks, this guy's got to work a deal with me then. The other guy needs some money out of the account. The only way (IA) get the money be . . . DELEO: Well why, let me ask you a question, why do you think you'd lose the hearing? COOLEY: I don't know, I mean I just don't know what he'll do. (IA) who knows if the other guy screams and yells, if the judge, if the guy even cops a plea and says to him you know judge let me take out twenty or thirty or fifty thousand, he might even say let me take out a hundred thousand dollars because at least half of that money is mine, you know what I'm sayin, and if he does that then I'm fucked. Then I can't squeeze this guy. Then my thought was if my client doesn't show up on Monday, if my client's not there on Monday and I ask for a continuance for that reason, because my client's not there . . . DELEO: No, see that won't work. 'Cause you're locking up the guys account . . . COOLEY: Yeah I know and that's the whole thing Patty if I can lock his account up I can collect, you know I can force him to pay me some money. DELEO: That doesn't work. COOLEY: Well I may have a problem then because my guy maybe can't come in on Monday. You know they gave us the date and my guys in Seattle right now, and he's got something doing out there. He's got some big meeting set up out there where he can make a ton of money and I doubt if he can get in. DELEO: Oh I doubt if you (IA) put it over for two weeks. COOLEY: But I mean you see Pat what I'm saying is the longer I can put it over the better off I am. DELEO: I understand that. COOLEY: If, you know, if it's put over for a week this guy can maybe survive, if its a couple weeks, I can maybe . . . DELEO: Oh look (IA) comin' (IA). COOLEY: . . . I can maybe cut a deal then right now with this guy and get a big package of money out of the deal, you know what I'm saying. If he's hurtin for the money, if he has to get the money (IA) I'm just saying, well tell me what do you think I should do? What would be the best way to try to do something to squeeze this guy? DELEO: Try to have your guy in and go to hearing and let this guy rule that he's going to keep the money locked up. COOLEY: What if I have (IA) in an affidavit from my guy. (IA) My guy can't be there, if I drop an affidavit. DELEO: The reason why, what was the reason why you're holding the money? (IA) COOLEY: Because we claimed that we're entitled. DELEO: (IA) COOLEY: (IA) it was it was. The money was, this guy took two hundred fifty thousand dollars out of both their accounts. It was out of both of their, I mean it was an account in both their names. He moved it over here . . . DELEO: You had that. COOLEY: Pardon. DELEO: You had that. COOLEY: Yeah. DELEO: Get in touch with your client and tell him to be here. COOLEY: Ok DELEO: I'll n5 make sure this guy rules in your favor. COOLEY: Ok DELEO: And call me Monday morning so I could walk over there and see him. COOLEY: Alright well tell where to you know, give me an idea to . . . DELEO: We'll talk about 9:30. COOLEY: Alright, but I mean, with him (IA) was he happy with what I gave him before. n6 COOLEY: Ok, as long as he's happy that's the, you know that's the main thing. DELEO: He say look, (IA) me (IA) comin up later I says, I don't know with the way it's going all we want (IA) lock it up right. COOLEY: In fact, give me, give me a figure on what I, I need to get this think done lets do it. I'd like to work this whole thing. If this guy, if, I don't care what it costs, Pat I mean to an extent, I mean you know . . . DELEO: No I . . . Bob. COOLEY: . . . to an extent. DELEO: Bob, you know, what the fuck (IA) I'm in, I'm in with you for the fees so I don't give a fuck (IA). COOLEY: He's gotta, he's gotta, he's gotta take . . . . . . COOLEY: . . . You tell me, you know again, you know I know he'll take some heat from the other side. If he can get me couple weeks date Pat, we can probably get this whole thing done. In other words if he can get me a couple weeks date. DELEO: (IA) Let's give him another two bits. COOLEY: Alright fine if thats fair with him, will he, will he give about a two week date then, without my guy being here, I mean . . . DELEO: No COOLEY: can he do it without . . . DELEO: You gotta have your guy. (IA) COOLEY: What if I bring an affidavit. DELEO: No because (IA) your guy's here then he could say, you know its (IA) be made much better. COOLEY: Oh I know that I mean sure, if, but if I bring an affidavit from my guy indicating (IA) emergency, if I make an emergency, I don't want to say death in the family they can prove that's bullshit but if I make some other family emergency. DELEO: I don't know, I don't know, I (IA) I think. COOLEY: I know, I know (IA) DELEO: You know you've been (IA) COOLEY: (IA) Hopefully he'll take a little bit of heat, you know, I mean the other, the other side will be screamin bloody murder, but I mean, then if I even ask for a week, even a week, we'll probably get . . . DELEO: (IA) for two weeks. COOLEY: Well I'll ask for two weeks DELEO: But you're not gonna have your guy here? COOLEY: Well I don't think he can make it Pat that's the problem with it. This guy can make a ton of money on something else. DELEO: (IA) You're gonna say (IA) this money was taken from a partnership account. COOLEY: It was taken from a joint account in both their names. But (IA) tell him not to give this guy any fuckin money I mean this guy's gonna ask to take a hundred thousand or fifty thousand. DELEO: (IA) COOLEY: Tell him that you know no money for him. DELEO: Tell me (IA) tell me Monday mornin. COOLEY: Alright well its eleven o'clock I'll meet you up there then if its no problem. DELEO: No but call me like about 9:00 so I can walk over and see him. COOLEY: Ok great. I'll give you a call for sure Monday and then well go from there. DELEO: Yeah COOLEY: Alright. Pat listen if, if ahead of time you think it's a real problem I mean, (IA) see I can't get this guy in. DELEO: I'll try to get up and see him. COOLEY: You know. DELEO: (IA) If the guy was here it'd be so much better. COOLEY: This guy's gonna pay me big money to do something for me if I can do without him being here . . . DELEO: (IA) want him to say to me you know what the fuck, your (ui) your fuckin' guy's client wasn't even there. DELEO: (IA) you know, you know . . . DELEO: You know giving him an out. COOLEY: I, I, I understand, but I mean that's why . . . DELEO: See he thinks if . . . COOLEY: If it's gonna take more so be it. DELEO: He thinks there's a lot of stuff so I don't think, he wants to do it. COOLEY: Pat there is a lot of money involved. DELEO: Well I know that but I don't want to give him an opportunity to back out, I don't think he will because I think he wants to be, stay in. COOLEY: Ok DELEO: Ok? COOLEY: Alright.

 (Transcript at 1-7, Tape No. 170, Aug. 24, 1988.) *fn7" In the government's view, the transcript makes clear that it was DeLeo who repeatedly pressed Cooley to bring his client in from Washington for the forthcoming hearing, while Cooley kept searching for some means to excuse his client's presence yet keep the injunction in effect. Consequently, the government argues, there is no doubt that it was DeLeo, not Cooley or the government, who caused Agent Nixon to travel to Chicago. (Gov. Mem. at 14.) The government further contends that because Nixon's presence at the hearing was sought as a means to justify a ruling in Cooley's favor, for which Shields was to be paid, there is also no question that the interstate travel facilitated the bribery. (Id. at 15.) Finally, because DeLeo and Shields were co-conspirators (Indictment P2), the government argues, DeLeo's acts of facilitating Nixon's interstate travel may be attributed to Shields. (Gov. Mem. at 15.)

 A. Liability under the Travel Act

 In relevant part, the Travel Act provides:

 
(a) Whoever travels in interstate or foreign commerce or uses the mail or any facility in interstate or foreign commerce, with intent to --
 
(1) distribute the proceeds of any unlawful activity; or
 
(2) commit any crime of violence to further any ...

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