When a “sightseeing vacation” that results in “unpleasant hard dealing” in collecting a debt is actually criminal extortion

Previous posts here that have focused on the Hobbs Act have dealt primarily with robberies affecting commerce.  But the Hobbs Act also makes it a crime to engage in extortion affecting commerce, and defines extortion as “obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right.”  18 U.S.C. 1951(b)(2).  Moreover, it is a crime to attempt or conspire to violate the Hobbs Act, and conspiracy law generally requires not merely an agreement to commit a crime but also an intent to form such an agreement and to join in the object of the conspiracy.  Finally, there remains a very important aspect of federal conspiracy law: once you become a co-conspirator, you are guilty not just for being a part of the conspiracy, but for any substantive crime that is committed by any other member of the conspiracy, as long as that crime is reasonably foreseeable and within the scope of the conspiracy – even if you did not know that the crime was being committed.  The Government, then, has a substantial interest in proving that all co-conspirators were part of a single overarching conspiracy – like, for example, a “hub-and-spoke” or “wheel” conspiracy, in which various co-conspirators (the spokes), share a common design or purpose with the nerve center (the hub) of the conspiracy, which relationship forms a rim connecting everyone together.

So, when is an attempt to collect an actual debt a violation of the Hobbs Act, where it does not involve explicit threats?  And when does one join a conspiracy to do this, when he was not part of the original group that formed the unlawful agreement?

Here are the facts of an interesting new decision from the United States Court of Appeals for the Seventh Circuit.  Union Transport of Las Vegas, Alcan Graphics of Wisconsin, and Concrete Media of New Jersey all owed money to American Litho, a printing company located in Illinois.  American Litho’s owner is Mark Dziuban.  After trying unsuccessfully to collect the debts, Dziuban asked for the help of Frank Orlando, who worked for American Litho.  Orlando then asked for help from Paul Carparelli and George Brown (a bareknuckle boxer).  These four hatched a scheme to fly to Las Vegas and obtain the money from the owner of Union Transport, Joe Visciano, and it was implied that violence and threats would be used.  They were unsuccessful in finding Visciano.

Then, the group met with Vito Iozzo (sans Carparelli this time) and hatched a similar plan to collect the debt from the owner of Alcan in Wisconsin.  During a meeting between Dziuban and David Jacek, the owner, Brown and Iozzo showed up and explained their next moves to Jacek, who could only offer up an antique car to pay part of the debt.  Iozzo asked for the Jacek’s driver’s license and address, and told Jacek that they now knew where he lived.

The final collection trip was to New York (where they now had an address for Visciano, the Union Transport owner) and New Jersey (where Concrete Media is located).  Brown and Iozzo went, along with Robert McManus (and again, without Carparelli).  When they arrived in Jersey, they watched Concrete Media’s parking lot and McManus wore a disguise.  Brown then entered the office of Concrete Media’s VP of Sales, Adam Goldenberg, while Iozzo and McManus stood by the door.  Brown stood over Goldenberg and said the men were there to collect the debt, and would not leave until they did.  After Goldenberg said he could not discuss the debt because of pending litigation, Brown took the man’s business card and said they would return, after which he shook hands with Goldenberg.  Then when they went to New York, they still could not find Visciano.

Brown then began cooperating with the FBI, which resulted in recorded conversations between Brown, Carparelli, and Orlando about the scheme.

McManus was indicted for, and convicted of, conspiracy to violate the Hobbs Act and attempt to violate the Hobbs Act, and received two 60-month sentences (concurrent).  McManus challenged his convictions in the Seventh Circuit.  He said he did not know that he was part of a larger extortion conspiracy and that there was no attempted extortion – this was mere “unpleasant hard dealing,” but nothing more.  The Seventh Circuit rejected each of McManus’s challenges.

First, the court held, a reasonable jury could have determined that McManus was more than just a spoke who had a separate and distinct agreement.    He went in disguise with two men who had participated in the other extortion efforts and who used the same methods and had the same goal as with previous trips.  Moreover, McManus went with Brown and Iozzo to New York to find Visciano, even though McManus was not part of the original trip to Las Vegas.  This, coupled with the common characteristics of each extortion trip, help to form the relevant connection between McManus, the other conspirators, and the overarching extortion scheme.

Second, there was sufficient evidence of attempted extortion.  McManus, who first tried to explain this trip as a “sightseeing vacation,” says the visit to Concrete Media was short, that Brown did not engage any violence or make any explicit threats, and that Brown and the VP shook hands.  But the court said that even in the absence of an explicit threat, extortion can occur where there is wrongful exploitation of fear.  That is what happened here.  The district court described it this way, according to the Seventh Circuit: “‘George Brown is, simply put, a living, breathing version of a Sherman tank.'”  In light of these intimidating physical attributes, and Brown’s conduct that day, it was reasonable for a jury to conclude that Goldenberg feared physical violence if his company did not pay the debt owed.

In the same case, Orlando challenged his 46-month sentence, which the Seventh Circuit affirmed.

The opinion in United States v. Orlando and McManus is here.

 

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