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United States v. Hubbard

July 21, 1995

UNITED STATES OF AMERICA,

PLAINTIFF-APPELLEE,

v.

FREDDIE HUBBARD,

DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.

No. 92 CR 941--William T. Hart, Judge.

Before FLAUM, EASTERBROOK, and ROVNER, Circuit Judges.

ROVNER, Circuit Judge.

ARGUED DECEMBER 9, 1994

DECIDED JULY 21, 1995

Samuel Gibson was arrested after delivering a kilogram of cocaine to an undercover police officer. Gibson agreed to cooperate with the authorities and to expose his supplier, Freddie Hubbard. Eventually, Hubbard was arrested and charged with distributing cocaine and conspiring to do so, as well as with the unlawful possession of a firearm by a felon. A jury convicted Hubbard of the firearm charge but could not render a verdict as to the narcotics charges. A second jury convicted Hubbard on the conspiracy charge, and the distribution charge was dismissed. Hubbard appeals, raising a number of issues that we take up seriatim after a summary of the evidence presented below.

I.

Gibson was, of course, central to the government's case against Hubbard. Gibson and Hubbard had been friends since they played basketball together on the same high school team. By 1990, according to Gibson, they had also become associates in the narcotics trade. In early December of that year, after being contacted by a Columbian cocaine supplier, Gibson telephoned Hubbard to ask if he was interested in purchasing cocaine. Hubbard was, and he agreed to pay $29,000 in exchange for one kilogram. By Gibson's account, he and the supplier (George Marin) subsequently met Hubbard in a Toys-R-Us parking lot on Chicago's south side. The two entered Hubbard's Cadillac and showed Hubbard the cocaine. Hubbard then directed Marin to retrieve the money from a hidden compartment in the rear of the car and to leave the cocaine in the same compartment. Two days later, Gibson and Marin delivered a second kilogram to Hubbard in the same fashion and in the same location.

In May of the following year, Gibson sought to purchase a kilogram of cocaine from Hubbard for re-sale to two of his own customers, Robert Warren and Mark Henry. Unbeknownst to both Gibson and Hubbard, Henry was a special agent with the Illinois state police and Robert Warren (one of Hubbard's business partners) was cooperating with the FBI. According to Gibson, Hubbard agreed to sell him the cocaine for $23,000. Gibson had sold cocaine to Warren and Henry on three prior occasions beginning in August of 1990, but this was the first time he obtained the cocaine from Hubbard. On May 15, 1991, Gibson paged Hubbard and arranged to complete the exchange on the following day in the same Toys-R-Us parking lot.

Gibson left his home the following morning (unaware that he had a surveillance team in tow) and eventually stopped at a currency exchange to purchase money orders. While there, he was paged by Hubbard. Gibson left the exchange and proceeded to the Toys-R-Us parking lot. There he returned Hubbard's page and informed him he was waiting at the lot. Hubbard arrived moments later in a black Ford Bronco, which he parked behind Gibson's car. FBI Agent James Brown, a surveillance photographer, saw Gibson leave his car and get into Hubbard's Bronco. Hubbard then drove the Bronco to another area of the parking lot and stopped for about 15 to 20 seconds. Photos that Brown took while the Bronco was stopped showed Gibson leaning into the rear of the Bronco. Gibson testified that Hubbard had hit a button on the dashboard of the car which opened a compartment hidden behind a speaker in the back of the Bronco on the driver's side. Gibson had retrieved the cocaine from that compartment and put it into a bag he had brought with him. Hubbard then drove Gibson back to his own car. Gibson assured him that he would have the money for the cocaine in two or three hours. Brown witnessed Gibson leave the vehicle with a black bag that appeared to have something stuffed into it. Gibson entered his own car and left the lot. Subsequently, Brown noticed Hubbard exit the Bronco, walk to the rear, and meet with an individual Brown had seen watching the vehicle earlier.

Gibson proceeded to a restaurant parking lot to meet Henry and Warren. When he displayed the cocaine, he was arrested and questioned. (The cocaine was later determined to be 88 percent pure.) Gibson quickly agreed to lend his assistance in the investigation of Hubbard. Later in the day he paged Hubbard, leaving him an FBI telephone number. When Hubbard called back, Gibson said that his wife had been involved in an automobile accident and that consequently he had been unable to complete the transaction. Hubbard agreed to give Gibson a couple of days "[t]o get his money." Tr. II 67. *fn1 The conversation was recorded.

On May 18, Gibson was wired with a body recorder and transmitter in anticipation of meeting with Hubbard to pay for the cocaine. Gibson contacted Hubbard by page and, in another recorded conversation, told him that he had the money. The two agreed to meet at "the Cottage," which meant the gasoline station that Hubbard operated at 87th Place and Cottage Grove Road. Gibson was then given $23,000 in "serialized" bills, *fn2 which he carried in a Dunkin' Donuts bag. Agents followed him to the service station, where Gibson met Hubbard in his office. Gibson testified that he put the $23,000 on Hubbard's desk, an action that the surveillance agents could not confirm as they could not see into the office. Gibson also told Hubbard that "I need one Monday and maybe another one Tuesday," meaning he required another two kilograms of cocaine. Tr. II 80. Hubbard agreed to sell him the additional two kilograms at $23,000 apiece. He told Gibson: "Beep me and we will do it at the same place." Tr. II 81. Apparently, however, Gibson did not follow up, and he made no further purchases from Hubbard.

Hubbard was arrested in October 1992. (The record does not reveal the reason for the delay.) DEA Special Agent Timothy McCormick searched Hubbard's Bronco at that time and discovered the compartment that Gibson had described. The compartment was opened by depressing a red button on the dashboard while the interior lights and rear window defogger of the vehicle were turned on. In the compartment McCormick discovered two fully loaded 45-caliber firearms and a brown paper bag containing $3,000 in currency. Three pagers were found elsewhere in the vehicle. In a subsequent inspection of the vehicle, a narcotics detection dog alerted to the scent of narcotics on the speaker cover that camouflaged the hidden compartment.

At trial, Hubbard attempted to demonstrate that he was a legitimate businessman who, thanks to Gibson's deception, had been mistaken by the authorities for a drug dealer. Toward that end, Hubbard called a series of witnesses whose testimony indicated that the nature of Hubbard's gasoline service stations required him to take in and deliver large amounts of cash.

William McEnery was president of Gas City, Ltd., the company that owned the three Chicago stations that Hubbard operated. McEnery testified that these stations operated on a cash-only basis in May of 1991, when the relevant transaction between Hubbard and Gibson purportedly took place. The stations took in between $15,000 and $30,000 per day (occasionally up to $40,000); and every day either Hubbard or, more frequently, one of his employees would deliver the cash taken in for gasoline sales during the previous twenty-four hours to Gas City's office in Frankfort, Illinois. (Hubbard kept the receipts for the grocery "mini-marts" located on the premises of the stations.) McEnery suggested that the stations were located in high-crime areas of the city and recalled that until Hubbard assumed operation of the stations, Gas City's drivers had encountered threats when they delivered gasoline to the stations.

Muhammed Judeh, a wholesale grocer, sold up to $15,000 in cigarettes, tobacco, groceries, and other merchandise to Hubbard each week (more than $700,000 annually) for resale in the mini-marts at the stations he operated. About three times weekly, Hubbard or an employee would pick up the goods from Judeh in what Judeh recalled as a black, four-wheel drive vehicle. A day after each pickup, Hubbard would call Judeh to confirm the bill; later he would deliver the cash to Judeh himself. Typically the money was wrapped in a brown paper bag.

A number of individuals were aware of the secret compartment contained in the rear of Hubbard's Bronco. Willie McCaney, an auto mechanic and Hubbard's friend, said that it was his idea to create the compartment as a safe place for the money when Hubbard was transporting it from his stations. He explained that he created the compartment behind a speaker in the rear of the Bronco on the driver's side and installed a safe deposit box inside. Vancie Hubbard Catchiens, Hubbard's sister, worked parttime at the Cottage Grove station. She confirmed that Hubbard's cash receipts had to be transported to Frankfort in order to pay Gas City for the gas he pumped. She was also aware of the hidden compartment in Hubbard's Bronco and said she used it herself in transporting cash deposits to the bank for him. She also knew that Hubbard carried a beeper, but contended that he used this in the conduct of his business as a service station operator. Curtis Robertson, who had done remodeling work on a number of the rental properties that Hubbard owned and on one of the gasoline stations, often delivered Hubbard's daily gasoline receipts to Gas City's Frankfort office, occasionally in Hubbard's company. Robertson confirmed that Hubbard had him put the money in the secret compartment for safe keeping, typically in a brown paper bag. His testimony also suggested that Gibson might have discovered the compartment when he accompanied Hubbard on an errand in January or February 1991 to deliver $1,000 for a dumpster that Hubbard needed.

Two of Hubbard's other friends offered explanations for the guns found in his Bronco. Harold Harvey said that the Sig Sauer automatic was his and that he loaned it to Hubbard on occasion for target practice at a local gun dealer. He acknowledged, however, that Hubbard had kept the gun "for some time" prior to his arrest. Tr. I 1567. Robert Florida, another target practice companion, claimed ownership of the other gun found in the vehicle. Like Harvey, however, Florida conceded that he had left the gun with Hubbard in either December of 1990 or the Spring of 1991.

Beyond proffering an innocent explanation for his possession of large amounts of cash, the secret compartment in the Bronco, and the two guns, Hubbard also sought to discredit certain points testified to by the surveillance agents who had tracked Gibson's meetings with Hubbard. For example, Chicago police officer James Jackson, who was among the surveillance agents who followed Gibson to the Cottage Grove gasoline station on May 18, had testified that he pumped his own gas after entering the mini-mart to visually confirm Gibson's meeting with Hubbard. However, Charlotte Wanatowicz, an employee of the City Clerk's office, testified that the Cottage Grove station was licensed only as a full-service station during 1991. McEnery confirmed that the station's pumps remained full-service as long as Hubbard operated the stations. He did concede, however, that nothing about the pumps would prevent a customer from pumping his or her own gas. Thomas Varga, a Gas City pump repairman, also thought that the station remained full-service throughout 1991; yet he too agreed that it was possible for customers to pump their own gas. He also acknowledged that he had been called to the station to repair damage occasioned by a customer driving off with a pump nozzle still in the gasoline tank, something he agreed was more likely to occur when customers pumped their own gas. Other witnesses who had occasion to be present or to observe the station more frequently also insisted that the station did not become self-serve until after May of 1991. These included Curtis Robertson, Vancie Catchiens, Lou Pillar, who lived in the area, and Roosevelt Watson, an attendant at the Cottage Grove station.

Pillar called into question another aspect of the surveillance agents' testimony as well. Pillar, who lived four blocks away from the Cottage Grove station, testified that 87th Place, on which the station was located, was a oneway street permitting westbound traffic only. Yet Officer Jackson had testified that he had driven eastbound on 87th Place on his way to the station to observe the meeting between Hubbard and Gibson. Despite Pillar's testimony, however, Sergeant James Linzy of the Chicago Police confirmed that he had seen Jackson drive eastbound on 87th Place, pull into the Cottage Grove station, and pump his own gas. Linzy observed no attendants on the premises during his surveillance.

On another point, Hubbard called to the stand Leon Dorn, a traffic engineer with the City of Chicago. FBI Agent George Randolph had testified that on May 16 (the day Gibson obtained the cocaine from Hubbard), fellow agents apprised him that Gibson had exited the northbound Dan Ryan Expressway at 63rd Street. Randolph had then intercepted Gibson and followed him to the currency exchange where Gibson would receive Hubbard's page. But Dorn testified that there was no exit from the Dan Ryan Expressway for northbound traffic at 63rd Street. Dorn also corroborated Pillar's testimony that 87th Place was a one-way westbound street.

Finally, Emmett Petty, Hubbard's accountant, testified as to Hubbard's finances. Petty had prepared Hubbard's corporate income tax returns, and he confirmed that Hubbard took in large sums of cash from the service stations he operated--in excess of $2 million in 1989 and 1990 and around $1.6 million in 1991. He also noted that Hubbard owned several residential rental properties. According to Petty, Hubbard disclosed all of his income to the IRS and paid all taxes due on that income. An IRS employee verified that Hubbard had filed income tax returns for the years 1989-91.

Hubbard was tried on all three charges in January and February 1993. Although he was convicted on the firearms charge, the jury deadlocked on the two narcotics charges. After the district court declared a mistrial on the narcotics counts, Hubbard was retried in April 1993. The second jury found him guilty on the conspiracy charge, but deadlocked on the distribution charge. A mistrial was declared on that remaining count and it was dismissed on the government's motion. The district court sentenced Hubbard in July of 1993 to concurrent prison terms of 160 months on Count I (the conspiracy charge) and 130 months on Count III (the firearms charge) and fined Hubbard $175,000. The court also ordered Hubbard to forfeit an additional $23,000 (the "buy money" with which Gibson had paid for the kilogram of cocaine) as well as his Bronco.

II.

A. Comment on Hubbard's Failure ...


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