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United States v. Carter

June 19, 2008

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
MORRIS CARTER, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Northern District of Indiana, Hammond Division. No. 04 CR 104-Rudy Lozano, Judge.

The opinion of the court was delivered by: Flaum, Circuit Judge.

ARGUED JANUARY 25, 2008

Before FLAUM, ROVNER, and SYKES, Circuit Judges.

Defendant Morris Carter, who served as the elected Recorder for Lake County, Indiana, was convicted for three counts of extortion in violation of the Hobbs Act, 18 U.S.C. § 1951(a), and sentenced to 51 months' incarceration. Carter now raises three issues before this Court on appeal. First, Carter challenges the sufficiency of the evidence for his convictions, claiming that the government failed to prove that his actions affected interstate commerce or that he acted under color of right. Carter's second claim is that the Government engaged in an improper line of questioning during his cross-examination. For the reasons discussed below, we affirm the district court's judgments on these two issues, but remand for resentencing based on Carter's final claim that the district court misapplied the proper post-Booker standards for sentencing.

I. Background

A. Defendant's Criminal Conduct

Carter was elected to two consecutive terms as the Lake County Recorder, with his second term concluding in December 2004. The acts of extortion for which Carter was convicted all occurred during the summer of his last year in this office. Central to the Government's case was the assistance it received from Peter Livas, an FBI informant. Livas owned three Indiana-based Subchapter S corporations-GIN Development, B & L Construction, and API Construction, Inc.-all of which were real estate rehab and development companies. Livas first came into contact with Carter through a mutual acquaintance, Javier Miranda, a subcontractor. During a conversation between Livas and Miranda in 2004, Livas told Miranda that he was trying to refinance his personal residence in order to free up more money for him to purchase properties. When Livas explained that this process had stalled due to a lien on the house, Miranda indicated that he would be able to help him with that. Miranda then set up a lunch meeting with Carter and Livas. During this meeting, Livas discussed the lien on his house with Carter, as well as his interest in buying vacant land in Gary, Indiana. The three individuals also discussed becoming partners based on what they each could do for each other, with Carter having an inside connection to foreclosure sales, Miranda and Livas having rehab expertise, and Livas having the funds to purchase properties. Carter, however, testified at trial that he told Livas and Miranda that due to his position as Lake County Recorder, he could only be brought in as a consultant on retainer. After this lunch meeting, Livas contacted the FBI about the matter. Livas agreed to cooperate with the FBI and for the rest of the investigation, he wore a wire or a video recorder during all face-to-face communications with Carter.

The first audio recorded meeting between Carter, Livas, and Miranda occurred on June 2, 2004 in Gary, Indiana, where Carter had arranged for Livas to look at some properties. During this meeting, the three discussed two things Livas sought: a contractor's license for building in unincorporated areas of Lake County, and lists of homes in foreclosure that would be placed on sheriff's tax and commissioner's sales. With respect to the lists of homes, Carter maintained that he could get "the first look at the list" since he was "taking care of" a woman working in the department that had access to the lists. Livas was later told that these lists would cost $1,000.

Carter, Livas, and Miranda next met on June 11, 2004. This conversation was videotaped by the Government. At this meeting, Livas paid Carter $1,000, which Livas testified at trial was for the property lists, although Carter maintained that this money was for work he had already done as part of their consulting relationship. Carter then supplied Livas with the tax and commissioner's lists. Carter explained to Livas that he had access to the list because "[t]he girl who's got the list is a personal friend of mine," and when told by Livas to "treat her nice," Carter stated that "what I do is, I always kick these people out . . . what they ask for." Although at trial, Carter claimed that these lists were publicly available at the time, at the June 11 meeting, Carter told Livas that "[n]obody has this list." Additionally, Livas later told FBI Agent Bradley Showalter, who testified at trial, that he gave the lists to Livas before they were made public, and that his connection with the woman in the Auditor's Office who provided him with the lists stemmed from his work resolving a conflict between the Auditor's Office and the Recorder's Office.

The other matter discussed at the June 11 meeting was the county contractor's license Livas sought, the receipt of which partially depended upon passing a written test. Carter instructed Livas to report to Carter's office on June 16, 2004, where Carter would "hook up" Livas with a "guy," who Livas later found out was Jan Donald Allison, the person who administered the test and served as the Assistant Lake County Building Administrator. Carter instructed Livas not to discuss money with the "guy," but instructed Livas to bring $500 to Carter's office at the June 16 meeting.

The June 16 meeting at Carter's office was also videotaped. Once both Miranda and Livas had arrived, Carter started the meeting by warning them not to use his name when calling him, and pointed out a recent newspaper article discussing criminal charges related to tax sales in Lake County. Carter made clear that "things have to be done a certain way" because he "don't want nobody to get the wrong impression" and "ain't trying to go to jail." The three then turned to discussing Carter's contractor's license. With respect to the $500 Carter was charging Livas for the license (the license itself only cost $150), Livas explained that he would have the money after he got paid for one of his rehabbing projects. In response, Carter instructed Livas to pay him by giving the money to Miranda, who would then pass it along to Carter. Carter then called Allison and sent Livas and Miranda upstairs to meet with him, instructing Livas not to mention money with Allison. Carter had told Allison that Livas was a "friend" and asked if Allison could "help" Livas get a contractor's license. During the meeting with Allison, Livas received a license application, which he later completed on behalf of B & L Construction and submitted along with a $50 application fee drawn from B & L's bank account.

On June 24, a hidden camera captured Livas paying Miranda the $500 for the contractor's license, which Miranda then passed along in full to Carter. Approximately one month later, on July 23, Livas took the contractor's license exam. Livas intentionally failed the exam and Allison, when grading it, filled out a new examination with a passing score. Later that day, Allison went to Carter's office to tell Carter that Livas had passed the test. Carter later sent Allison a thank you card which included $100 in cash.

Less than a week after taking the contractor's exam, on July 28, Carter and Livas had a videotaped discussion regarding the lien on Livas's home. Carter conceded at trial that he had asked the Recorder's Office in-house counsel to research Livas's lien (although the attorney never knew Carter was doing this for money), since the Recorder's Office was already dealing with a flurry of similar cases due to the refinancing craze at the time. Based on this research, Livas informed Carter at their meeting that the lien had expired and all that was required was a purge of lien document that would reflect its expiration. The two then agreed that Livas would stop by Carter's office the next day to pick up the Purge of Lien Notice, and the meeting ended with Livas paying Carter $400 in cash. The next day, Livas picked up and signed the Purge of Lien Notice that Carter had prepared. Carter and Livas then took the document to a woman at the office who filed the Purge of Lien Notice. Carter told Livas that he would take care of the $17 filing fee, and Livas received a receipt stating that the fee had been paid. The Purge of Lien Notice did not actually purge the lien, however, but instead only provided notice that it had apparently expired. When Livas later hired an attorney to validly purge the lien, it was discovered that the lien had never been valid to begin with.

B. Trial

On December 1, 2004, Carter was indicted on three counts for violations of the Hobbs Act, 18 U.S.C. § 1951(a), and aiding and abetting under 18 U.S.C. § 2. The first count charged Carter with extorting $400 from Livas, under color of right, for purging the lien. Count 2 was against both Carter and Allison, charging them with extorting $500 in exchange for them, under color of right, providing Livas with a contractor's license. The final count charged Carter with extorting $1,000 in exchange for property lists that Carter held out as being unavailable to the general public.

Allison pled guilty to Count 2 in the indictment on March 9, 2005, and as part of his plea agreement, agreed to cooperate with the Government in its case against Carter. Allison detailed his and Carter's involvement in procuring Livas's license to the FBI after Allison found out from the FBI ...


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