Of the Northern District of Indiana, sitting by designation. ^

In the

United States Court of Appeals

For the Seventh Circuit

No. 09-2672

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

v.

JULIO LEIJA-SANCHEZ,

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 07 CR 224—Rebecca R. Pallmeyer, Judge.

ARGUED FEBRUARY 12, 2010—DECIDED APRIL 8, 2010

Before EASTERBROOK, Chief Judge, HAMILTON,

Circuit Judge, and SPRINGMANN, District Judge.

^

EASTERBROOK, Chief Judge. An indictment returned in

2007 alleges that Julio Leija-Sanchez was the kingpin of

an organization that produced fraudulent Social Security

cards, driver’s licenses, green cards, and other documents

for aliens living in the United States unlawfully. The
2 No. 09-2672

prosecutor believes that the organization generated

revenues exceeding $2.5 million a year. The indictment

alleges that many of the organization’s employees and

future customers were recruited in Mexico and smuggled

into this country.

Leija-Sanchez moved to dismiss Count III, which charges

him with violating 18 U.S.C. §1959 by arranging and

paying for the murder of Guillermo Jimenez Flores

(known as Montes), a former employee who had gone

into competition with his organization. Assassins in LeijaSanchez’s employ found Montes in Mexico and killed

him there. Montes was a Mexican citizen; so are the

assassins. The district court dismissed this count, concluding that §1959 does not apply extraterritorially. The

United States has appealed under 18 U.S.C. §3731 ¶1.

Meanwhile the rest of the criminal prosecution is in

abeyance.

The prosecutor relies on United States v. Bowman, 260

U.S. 94 (1922), for the proposition that criminal statutes

apply even when one or more elements occurs abroad or

on the high seas. See also United States v. Vasquez-Velasco, 15

F.3d 833 (9th Cir. 1994). Leija-Sanchez contends that

Bowman is no longer good law, in light of EEOC v. Arabian

American Oil Co., 499 U.S. 244 (1991) (Aramco), and other

decisions establishing a presumption that civil statutes

do not apply to activity outside the United States. What

Bowman had said is that “the same rule of interpretation

should not be applied to criminal statutes which are, as a

class, not logically dependent on their locality for the

Government’s jurisdiction”. 260 U.S. at 98.
No. 09-2672 3

Civil decisions such as Aramco cannot implicitly

overrule a decision holding that criminal statutes are

applied differently. The main reason for requiring a clear

legislative decision before applying a civil statute to

activity outside our borders is that nations often differ

with respect to acceptable conduct. See 499 U.S. at 248.

Title VII of the Civil Rights Act of 1964, the statute at

issue in Aramco, forbids religious discrimination, but

other nations may impose religious tests. After Aramco

discharged one of its workers in Saudi Arabia, the EEOC

contended that Aramco (which has its headquarters in

the United States) must apply Title VII to its work force

worldwide. The Supreme Court concluded that the law

of the place of employment governs; that way employers

can comply fully with the laws of all nations where

they conduct operations. (A contrary conclusion might

have had the practical effect of ending the multinational

operations of businesses based in the United States, or

forcing them to move their headquarters to some other

nation.)

Nations differ in the way they treat the role of religion

in employment; they do not differ to the same extent in

the way they treat murder. They may use different approaches to defenses, burdens of proof and persuasion,

the role of premeditation, and punishment, but none

of these is at stake here. It is not as if murder were forbidden by U.S. law but required (or even tolerated) by

Mexican law. The crime in Bowman was fraud; the Court

observed that fraud was unlawful in all of the places

where Bowman’s scheme was implemented.
4 No. 09-2672

Whether or not Aramco and other post-1922 decisions

are in tension with Bowman, we must apply Bowman

until the Justices themselves overrule it. “If a precedent

of this Court has direct application in a case, yet appears

to rest on reasons rejected in some other line of decisions,

the Court of Appeals should follow the case which

directly controls, leaving to this Court the prerogative

of overruling its own decisions.” Rodriguez de Quijas v.

Shearson/American Express, Inc., 490 U.S. 477, 484 (1989). See

also, e.g., State Oil Co. v. Khan, 522 U.S. 3, 20 (1997). The

Supreme Court has neither overruled Bowman nor suggested that the courts of appeals are free to reconsider

its conclusion.

Bowman does not hold that criminal statutes always

apply extraterritorially. It concludes that judges must

consider the language and function of the prohibition. The

statute in Bowman was designed to prevent fraud by

military contractors during and in the aftermath of World

War I. The Justices observed that, because military operations in that war took place throughout the world, the

statute must reach frauds hatched abroad. The United

States makes a similar argument about §1959, which

provides:

(a) Whoever, as consideration for the receipt of, or

as consideration for a promise or agreement to

pay, anything of pecuniary value from an enterprise engaged in racketeering activity, or for the

purpose of gaining entrance to or maintaining or

increasing position in an enterprise engaged in

racketeering activity, murders, kidnaps, maims,
No. 09-2672 5

assaults with a dangerous weapon, commits assault resulting in serious bodily injury upon, or

threatens to commit a crime of violence against

any individual in violation of the laws of any State

or the United States, or attempts or conspires so

to do, shall be punished—[details omitted].

(b) As used in this section—

(1) “racketeering activity” has the meaning set

forth in section 1961 of this title; and

(2) “enterprise” includes any partnership,

corporation, association, or other legal entity,

and any union or group of individuals associated in fact although not a legal entity, which

is engaged in, or the activities of which affect,

interstate or foreign commerce.

Criminal businesses may be international in scope; the

indictment alleges that Leija-Sanchez’s organization

was. Section 1959 applies to enterprises that engage in

or affect “foreign commerce”; this rule cannot be implemented if the existence of activities abroad prevents

application of §1959 to those acts and effects that occur

in the United States.

Leija-Sanchez assumes that a crime happens in one

place only—wherever the last element occurs. The final

element of Count III was the murder in Mexico, so on this

understanding the crime was “in” Mexico. The view that

a crime necessarily has just one situs has its basis in the

common law, see Wayne R. LaFave, Substantive Criminal

Law §§ 4.2(d), 4.4 (2d ed. 2003), but has been modified by
6 No. 09-2672

statute. Suppose Leija-Sanchez had arranged in Illinois

for Montes to be killed in Texas. He could have been

prosecuted in either state for that offense, because elements occurred in each. See 18 U.S.C. §3237(a) ¶1 (crime

“begun in one district and completed in another, or

committed in more than one district” may be prosecuted

“in any district in which [it] was begun, continued, or

completed.”); United States v. Rodriguez-Moreno, 526

U.S. 275 (1999).

If a crime occurs in the state where it is arranged and

paid for when the killing occurs in Texas, it equally occurs

in the state where it was planned when the murder is

accomplished in Mexico. Because §1959 forbids attempts

as well as completed crimes, Leija-Sanchez could be

found culpable under that statute even if Montes had

survived. (Putting out the contract, and arranging

for payment, are substantial steps that could support a

conviction for attempt.) Section 1959 forbids certain acts

in furtherance of a racketeering enterprise; the §1959

offense is not murder (or some other crime) in isolation,

but the multiple acts by which a crime such as murder

facilitates a criminal enterprise. And many of those acts,

as well as the enterprise that Leija-Sanchez sought to

advance, were located in Illinois.

Bowman itself shows that the Supreme Court does not

use a “last act” rule for defining a crime’s location. The

master of a vessel indirectly owned by the United States

decided to enrich himself by overbilling for expenses.

While in the port of Rio de Janeiro, the master bribed a

supplier to give a receipt showing that the vessel had
No. 09-2672 7

loaded (and paid for) twice as much fuel oil as it actually

purchased. The receipts were submitted by telegram

from the ship while at sea, and the Treasury paid too

much for the fuel. The last act of this scheme, cashing the

Treasury’s check, likely occurred in the United States

(Bowman is not clear on this), and at all events the

injury occurred in the United States, whose funds were

depleted. Yet Bowman thought that there was a question

about extraterritorial application because some of the

elements occurred in Brazil or at sea. The Court concluded that U.S. law applies even though essential steps

occurred outside its borders.

Likewise here: some of the acts (planning and payment)

occurred in the United States, one (the killing) occurred

abroad; and the objective (reduced competition for LeijaSanchez’s syndicate) was realized in the United States.

See also Pasquantino v. United States, 544 U.S. 349 (2005)

(use of federal wire fraud statute to block interstate

communications, in the United States, designed to

defraud Canada of tax revenues is not an impermissible

extraterritorial application); Ford v. United States, 273 U.S.

593, 622–24 (1927) (if a criminal enterprise is carried out

in part within the United States, all of the participants,

including foreigners whose activities were entirely outside the United States, may be penalized). Cf. Pinkerton v.

United States, 328 U.S. 640, 647 (1946); United States v.

Macey, 8 F.3d 462, 468 (7th Cir. 1993).

Even in civil litigation, the Supreme Court has held that

the laws of this nation may be applied to multi-national

operations that have substantial effects in this nation. For
8 No. 09-2672

example, F. Hoffmann-La Roche Ltd v. Empagran S.A., 542

U.S. 155 (2004), concludes that this nation’s antitrust

laws apply to the domestic effects of foreign cartels—

though not to foreign effects that are independent of

the domestic effects. When an international cartel has

effects both within and without our borders, American

law applies to at least the domestic effects, even when

many (if not all) of the acts producing those adverse

effects occur abroad. The Court thought that this approach adequately avoided unnecessary interference

with other nations’ laws, which may tolerate (within

their own territories) effects that our antitrust laws condemn, while ensuring that this nation can achieve its

own ends within its territory. Cf. Restatement (Third) of

Foreign Relations §402(1) (concluding that the United

States may apply its law to conduct that either takes place

“in substantial part” within the United States or has a

“substantial effect” in this nation).

The indictment alleges that Leija-Sanchez’s conduct

took place “in substantial part” in this nation—indeed, all

of the conduct ascribed to Leija-Sanchez took place here.

And the indictment alleges that the goal of the contract

killing was to advance Leija-Sanchez’s interests in

this country by curtailing competition to his criminal

organization. This is not an antitrust case; the United

States is not trying to preserve competition in the business

of producing bogus credentials, so that aliens can buy

phony documents at lower prices. Federal policy is

instead to stamp out counterfeit-document mills. But the

principle of Hoffmann-La Roche that the United States

may redress effects in this nation of conduct abroad still
No. 09-2672 9

applies. By rubbing out Montes, Leija-Sanchez removed

not only a rival (allowing him to charge higher prices

for his illegal wares) but also a potential witness in a

prosecution such as this one. So we have both significant conduct in the United States and significant

consequences here. Applying §1959 to this contract

killing does not violate any rule of international law and

is compatible with the norms that govern the application

of criminal statutes to international criminal enterprises.

Any international repercussions of the decision to

prosecute Leija-Sanchez are for the political branches to

resolve with their counterparts in Mexico, rather

than matters for the judicial branch. That diplomacy

has occurred already. Leija-Sanchez fled to Mexico,

which extradited him to the United States to face all of the

indictment’s charges. The United States promised not

to seek or impose the death penalty for the murder;

Mexico was satisfied with that undertaking and saw no

reason why the United States should not apply its substantive rules. Given the holding of United States v. AlvarezMachain, 504 U.S. 655 (1992), that prosecution in the

United States is permissible even if the defendant

arrives by kidnapping rather than formal extradition,

this prosecution is easy to support. The substantive

offense in Alvarez-Machain was the murder in Mexico, by

a Mexican national, of two persons who were helping to

enforce U.S. drug laws; the statute said to be violated in

Alvarez-Machain was 18 U.S.C. §1959, because the murders

helped an international drug ring continue in business.

The Supreme Court was not asked to hold in AlvarezMachain that applying §1959 in this fashion would have
10 No. 09-2672

been impermissibly extraterritorial, so its decision is not

direct authority. But we conclude that what the parties

assumed in Alvarez-Machain—that §1959 applies to

a murder in another nation designed to facilitate the

operation of a criminal enterprise in the United States—is

indeed the law.

REVERSED

4-8-10