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UNITED STATES v. VLAHOS

February 7, 1995

UNITED STATES OF AMERICA, Plaintiff,
v.
DEAN S. VLAHOS, et al., Defendants.



The opinion of the court was delivered by: GEORGE M. MAROVICH

 Defendant Dean Vlahos ("Vlahos") was charged with criminal contempt for violating a court order requiring him to discontinue engaging in certain advertising practices without first posting a performance bond. After a contempt hearing on December 8, 1994, this Court found Vlahos in contempt for violating the order. Vlahos now raises numerous post-trial motions challenging this judgment. First, Defendant moves this court to vacate the order discharging standby counsel pursuant to 7th Circuit Rule 4 and United States v. Howell, 37 F.3d 1207 (7th Cir. 1994). Second, Defendant moves this court for acquittal, or in the alternative for a new trial. Defendant's motion for acquittal is based on his contention that the evidence was insufficient to establish a violation of the order or to establish contumacious intent beyond a reasonable doubt. Defendant's motion for a new trial rests on his belief that his Fifth and Sixth Amendment Rights have been violated. Third, Defendant moves this court for an arrest of judgment pursuant to Fed. R. Crim. P. 34 alleging that this Court lacked jurisdiction to hold the contempt hearing. For the following reasons, we deny all of Defendant's post-trial motions.

 BACKGROUND

 On June 28, 1991, the Federal Trade Commission ("FTC") filed a Complaint against Defendants Dean Vlahos and U.S. Sales Corporation ("U.S. Sales") based on evidence that Defendants were engaging in unfair and deceptive advertising practices. The Defendants were using radio and television commercials to advertise, among other things, ways to purchase cars that had been confiscated and repossessed by the government.

 On January 31, 1992, the district court entered summary judgement on behalf of the FTC and against Defendants on Counts II and III of the Complaint. The court held that the advertisements at issue constituted unfair and deceptive practices and granted a permanent injunction and consumer redress in excess of nine million dollars. The court ordered the parties to submit proposed orders for the entry of permanent injunction.

 On February 28, 1992, the court entered an order which prohibited certain practices, required the posting of a bond and provided for a money judgment. The court's order required the Defendants to discontinue "engaging or practicing, directly or in concert with others, advertising in the media of any automobile auction or credit card information service unless they first obtain a performance bond in the principal sum of Seventy-Five Thousand Dollars ($ 75,000)." The order also required the Defendants to "provide a copy of such performance bond to the Director of the Chicago Regional Office of the Federal Trade Commission . . . prior to the commencement of any business for which the bond is required."

 On September 29, 1992, a petition was filed for a rule to show cause why the Defendants should not be held to answer criminal contempt charges for violating the court order entered on February 28, 1992. Judge Shadur entered an order granting the rule to show cause on October 30, 1992. Judge Shadur also ruled that the Defendants' alleged violation of the order was not excused or permitted because the order was not on its face "transparently invalid."

 In June 1994, the Defendant moved to disqualify the assigned Assistant United States Attorney. Judge Duff granted the motion and further disqualified the entire Department of Justice for what he perceived to be a conflict of interest between the Justice Department and the FTC. The United States appealed Judge Duff's decision to the Seventh Circuit. On August 24, 1994, the Court of Appeals reversed the district court's decision and remanded the matter to another district judge for trial. This Court was later assigned to preside over the trial.

 On December 21, 1994, Vlahos filed a motion to vacate the order discharging standby counsel, a motion for acquittal, a motion for a new trial, and a motion for arrest of judgment.

 DISCUSSION

 I. Responsibility of Standby Counsel

 The Defendant moves this court to vacate the order discharging standby counsel pursuant to 7th Circuit Rule 4 and United States v. Howell, 37 F.3d 1207 (7th Cir. 1994). Circuit Rule 4 requires that "trial counsel in a criminal case, whether retained or appointed by the district court, is responsible for the continued representation of the client desiring to appeal unless specifically relieved by the court of appeals upon a motion to withdraw for good cause." Cir. R. 4. The Seventh Circuit in United States v. Howell held that a "defendant in a direct criminal appeal has the right to the continuous representation of appointed counsel," even when filing a petition for certiorari. Id. at 1209.

 While Circuit Rule 4 and United States v. Howell clearly explain the responsibilities of appointed counsel in a criminal case, they do not support the Defendant's argument because he was not represented by appointed counsel at trial. Instead, the Defendant ...


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