In the

United States Court of Appeals

For the Seventh Circuit ____________

Nos. 00-3719, 00-3720, 00-3721, 00-3731, 00-3740, 00-3865,

00-4344, 00-4345 & 01-1683

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

CARL J. WARNEKE, DAVID KADLEC, LESLIE J. JENSEN,

ROBERT A. KRUPPSTADT, RANDALL E. MILLER, RICHARD

E. MROCH, KEVIN P. O’NEILL, HARVEY E. POWERS, and

JAMES W. SCHNEIDER,

Defendants-Appellants.

____________

Appeals from the United States District Court

for the Eastern District of Wisconsin.

No. 97-CR-98—J.P. Stadtmueller, Judge.

____________

ARGUED OCTOBER 17, 2002—DECIDED NOVEMBER 12, 2002

____________

Before EASTERBROOK, MANION, and KANNE, Circuit

Judges.

EASTERBROOK, Circuit Judge. Warfare broke out between

the Outlaws and Hell’s Angels motorcycle gangs during the

1990s when the Angels began to establish a presence in the

Midwest by absorbing the Hell’s Henchmen, another motorcycle “club.” The conflict seems to have been more about

control of criminal activities (such as drug sales) than about

divergent methods of motorcycle maintenance or incompati-
2 Nos. 00-3719 et al.

ble bikes (both groups favor Harleys). The record in this

criminal prosecution establishes that members of the

Outlaws used murderous force to ward off the threat, and

the Angels replied in kind. Outlaws preferred sneak attacks

(using bombs) to open ones but were not averse to other

weapons. The Outlaws acquired and used at least one AK-47

assault rifle, along with many other guns. An elderly couple

with no connections to either group is among the dead, and

three police officers were injured when a bomb exploded as

it was being dismantled.

A grand jury charged that the Outlaws were a criminal

“enterprise” that the nine defendants operated through a

pattern of racketeering (including shootings, bombings,

robbery, drug sales, and passing counterfeit money), violating the Racketeer Influenced and Corrupt Organizations

Act, 18 U.S.C. §§ 1961-68. James Schneider pleaded guilty

and was sentenced to 45 years in prison. The other eight

went to trial and were convicted. Five of the eight were

sentenced to life imprisonment; the rest received long terms

of years. The evidence against each of these eight is overwhelming, and we do not discuss individual challenges to

its sufficiency. Nor does the defendants’ complaint about

trying seven of them together (a last-minute problem with

counsel led the judge to give Harvey Powers a separate

trial) require analysis beyond a citation to Zafiro v. United

States, 506 U.S. 534 (1993), and the observation that the

judge did not abuse his discretion.

Considerable evidence came from transmitters inside

lamps in the homes of Outlaws Kevin O’Neill and David

Wolf. A warrant authorized agents to hear and record the

communications. Nonetheless, defendants contend, the

evidence should have been suppressed because not only

installation of the bugs but also a determination that one

was functional preceded issuance of the warrant—and the

judge was not told that these things had occurred.
Nos. 00-3719 et al. 3

Neither the installation of the bugs nor the receipt of a

signal from one violated the fourth amendment: the former

because the Constitution does not protect criminals against

the risk that their associates will assist the police, see

Hoffa v. United States, 385 U.S. 293, 300-03, 310-12 (1966),

and the latter because the agents did not intercept any

communication prematurely. It is the private information,

not knowledge that a device is working, that the fourth

amendment safeguards. See United States v. Karo, 468 U.S.

705 (1984). Placement of these microphones was the result

of good police work plus luck. The informant was Patricia

Wolf, David’s wife, who set up two lamps, one containing a

microphone. Visiting the Wolf home, O’Neill said that he

liked the lamps. Patricia then swapped the inactive lamp

for a second bugged lamp. When O’Neill repeated his

admiration of the lamps and asked if he could have one,

Patricia graciously assented. O’Neill took one of the lamps

(it did not matter which) and thus bugged his own home.

But he didn’t plug it in, and without electricity it was

useless. So Patricia Wolf paid O’Neill’s girlfriend a friendly

visit and helped her improve the lighting in O’Neill’s office.

Agents drove by O’Neill’s residence to find out if this

worked; they learned from detecting a carrier signal that it

had. Only then did they seek a warrant; only after obtaining the warrant did they listen to any conversation. Because the agents did not intercept any communications

until after the warrant had issued, installation of the

devices (and determination that they were live) did not

violate statutory limits on eavesdropping; until listening

began, the bugs were nothing but “tracking devices” under

18 U.S.C. §3117(b). See also 18 U.S.C. §2510(12).

We may suppose (without deciding) that when seeking

authorization to listen to conversations the agents should

have told the judge that the lamps were already in place,

but this does not matter. It is not conceivable that the judge

would have said anything like: “Because you used an
4 Nos. 00-3719 et al.

informant to install one microphone and tricked O’Neill

into bugging his own home, I will deny you permission to

listen even though you have established probable cause to

believe that the bugs will reveal evidence of crime.” Cf.

Franks v. Delaware, 438 U.S. 154 (1978). Perhaps the judge

would not have authorized clandestine entry had he realized that bugs already were in place. Prosecutors say that

they sought authority to enter in case the lamps should be

unplugged or not transmit signals strong enough to be

recorded; the judge might have required prosecutors to

show one of these problems before authorizing an entry.

But in the event no entry was made. So there is no causal

chain from the omission to any evidence used against the

defendants, and no basis for suppression.

Defendants press several objections to their RICO convictions. One that affects all defendants is a contention that

conspiracies may not be included among the predicate

racketeering offenses. Defendants contend first that no

inchoate offense can be “racketeering activity” as 18 U.S.C.

§1961(1)(A) defines that term, and second that use of

conspiracy as a predicate is particularly inappropriate

when the federal crime is a RICO conspiracy violating

§1962(d). (They also contend that there was one big underlying conspiracy, for at most one predicate offense, rather

than multiple conspiracies with different criminal objects.

This presented a jury question, resolved adversely to defendants at trial on the basis of ample evidence. We do not

discuss this theme further.) Objections to the use of conspiracies as predicate crimes have been made in other

circuits, uniformly without success. See United States v.

Ruggiero, 726 F.2d 913, 918-20 (2d Cir. 1984); United States

v. Manzella, 782 F.2d 533, 537-38 (5th Cir. 1986); United

States v. Licavoli, 725 F.2d 1040, 1044-45 (6th Cir. 1984).

We agree with these decisions.

Section 1961(1)(A) defines “racketeering activity” to include “any act or threat involving murder, kidnapping,
Nos. 00-3719 et al. 5

gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance or listed

chemical (as defined in section 102 of the Controlled

Substances Act), which is chargeable under State law and

punishable by imprisonment for more than one year”. The

indictment listed 34 predicate acts of racketeering activity,

some of which were (or included) conspiracies to do one or

more of these things—for though the Outlaws carried out

many malevolent acts, sometimes their plans went awry

and only inchoate crimes could be proven. It is no stretch to

describe a plot to blow up a Hell’s Henchmen clubhouse

(with members inside) as an “act or threat involving

murder . . . which is chargeable under State law and punishable by imprisonment for more than one year”. Conspiracy means agreement, and agreement is an “act” rather

than just a thought. Conspiracies are illegal because of

what they portend (that is, what the conspirators threaten

to do). What is more, all of the state-law conspiracies listed

as predicate offenses depend on proof of overt acts—concrete steps toward the substantive crime, steps that themselves qualify as predicate offenses. The prosecutor did not

charge as predicate offenses any conspiracy that may be

established without proof of an overt act—such as a drug

conspiracy under federal law, see United States v. Shabani,

513 U.S. 10 (1994).

There’s no reason to distinguish the substantive RICO offense under §1962(a), (b), or (c) from a RICO conspiracy under §1962(d) when it comes to use of inchoate offenses as

predicates. The definition in §1961(1)(A) does not vary with

the choice of subsection in §1962. See United States v.

Neapolitan, 791 F.2d 489, 501 (7th Cir. 1986). True enough,

we held in United States v. Baker, 905 F.2d 1100 (7th Cir.

1990), that a drug conspiracy may not be used as a predicate offense for purposes of the Continuing Criminal Enterprise statute, 21 U.S.C. §848. But this was because any

drug conspiracy would be a lesser included offense of the
6 Nos. 00-3719 et al.

crime defined by §848. By contrast, a conspiracy to commit

murder is not a lesser included offense of the RICO crime,

which is defined as operating or managing an enterprise

through a pattern of racketeering activity. It is possible to

manage an enterprise without killing anyone (or conspiring

to do this), so using a conspiracy as a predicate offense does

not entail double counting.

Powers offers a wrinkle on these arguments. He starts

from the fact that §1962(c) makes it “unlawful for any

person employed by or associated with any enterprise . . .

to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of

racketeering activity”. In order to “conduct or participate”

in the enterprise, one must have “some part in directing” its

affairs. See Reves v. Ernst & Young, 507 U.S. 170, 179

(1993); United States v. Swan, 250 F.3d 495, 498-99 (7th

Cir. 2001). Yet the conspiracy charge under §1962(d) did

not require the jury to find that Powers had directed, managed, or otherwise conducted the enterprise. Relying on

Neibel v. Trans World Assurance Co., 108 F.3d 1123, 1128-

29 (9th Cir. 1997), Powers insists that only a person who

participates in an enterprise’s management or operation

may be guilty of conspiracy under §1962(d). And although

Powers was convicted of a substantive RICO offense, he

contends that the jury instructions for this crime were

incorrect so that the jury did not necessarily find that he

managed or conducted any of the Outlaws’ operations.

Neibel is an unsatisfactory decision. It assumes that only

a person who has committed the substantive crime can be

guilty of conspiracy and then holds that this principle

applies to RICO too. Yet there is no such principle. As cases

such as Standefer v. United States, 447 U.S. 10 (1980), and

United States v. Pino-Perez, 870 F.2d 1230 (7th Cir. 1989)

(en banc), show, one may be a conspirator or aider and abetter even if one cannot be convicted as a principal. Example:

a person can conspire to distribute drugs without actually
Nos. 00-3719 et al. 7

distributing drugs, indeed without ever having acquired

drugs to distribute. One may commit the crime of conspiracy even though it is impossible to perform all of the acts

constituting the substantive offense. See, e.g., United States

v. Feola, 420 U.S. 671, 694 (1975); Hyde v. United States,

225 U.S. 347, 365 (1912). “A conspirator must intend to

further an endeavor which, if completed, would satisfy all

of the elements of a substantive criminal offense”. Salinas

v. United States, 522 U.S. 52, 65 (1997). But this requirement will be met whenever the conspirator joins forces with

someone else who manages or operates the enterprise.

Section 1962(d) is not limited to a conspiracy among the top

dogs. So we held in Brouwer v. Raffensperger, Hughes &

Co., 199 F.3d 961, 967 (7th Cir. 2000), and reiterated in

Swan, 250 F.3d at 499. Nothing in Neibel persuades us to

change course. Indeed, the ninth circuit seems not to have

recognized that it was going against the Supreme Court’s

view of what is necessary to prove a criminal conspiracy. It

claimed to be following United States v. Antar, 53 F.3d 568

(3d Cir. 1995), and United States v. Quintanilla, 2 F.3d

1469 (7th Cir. 1993), but Quintanilla has nothing to do with

this subject, and the third circuit has disavowed the passage in Antar to which Neibel referred, and disagreed with

Neibel’s holding too. See Smith v. Berg, 247 F.3d 532, 536-

38 (3d Cir. 2001). Every other circuit that has considered

this subject likewise has disapproved Neibel. See United

States v. Zichettello, 208 F.3d 72, 98-99 (2d Cir. 2000);

United States v. Posada-Rios, 158 F.3d 832, 857 (5th Cir.

1998). See also United States v. Starrett, 55 F.3d 1525, 1547

(11th Cir. 1995) (a pre-Neibel RICO prosecution of other

Outlaws in which the court held that the RICO conspiracy

offense does not require proof that the defendant operated

or managed the enterprise). We shall stick with Brouwer.

As for the jury instructions in Powers’s trial concerning

the substantive RICO offense: The judge told the jury that
8 Nos. 00-3719 et al.

[a] person “conducts or participates in the conduct

of the affairs of an enterprise” if that person uses

his position in, or association with, the enterprise to

perform acts which are involved in some way in

the operation or management of the enterprise, directly or indirectly, or if the person causes another

to do so.

According to Powers, the language we have italicized

waters down the statutory requirement that the person

“conduct” or “participate in” the operation or management

of the enterprise. Under the instruction given, for example,

a secretary who types a letter for a manager might violate

§1962(c) even though the letter had nothing to do with any

predicate offense, because sending letters is “involved in

some way” in the operation or management of the business.

Reves and Swan hold that to violate RICO the person must

have a real operational (or managerial) role, while the italicized language sweeps up peripheral figures.

This is a good point in principle. It would be better for a

district judge to use language of the kind suggested in

Swan, or just use the statutory language. Section 1962(c)

declares that it is “unlawful for any person employed by or

associated with any enterprise . . . to conduct or participate,

directly or indirectly, in the conduct of such enterprise’s

affairs through” a pattern of specified predicate acts. The

phrase “directly or indirectly” already contains enough flex

that the addition of phrases such as “involved in some way”

may move jurors too far from the law itself. The terms in

the statute are not abstruse legalisms; attempts at elaboration may not improve the accuracy of decisions. But the

language the district judge used does not vitiate the

conviction, because other parts of the instructions made it

clear that only those who personally carry out the “pattern

of racketeering activity” may be convicted. Secretaries,

lamp dealers, and other peripheral figures who might be

swept in by the phrase “involved in some way” are swept
Nos. 00-3719 et al. 9

right out again by the racketeering-activity element. There

was no risk that a harmless functionary would be convicted

under the full set of instructions given to Powers’s jury, and

the evidence was ample to show that Powers “conducted”

the affairs of his chapter of the Outlaws through a pattern

of bombings, shootings, and other violence, for which he

was awarded a special commendation that he wore openly,

proclaiming his role as an enforcer. (Powers wore a patch

bearing a skull and crossed pistons, with an “SS” insignia

awarded only to members who had committed acts of violence on the group’s behalf. After becoming a full member

of the Outlaws in fall 1994, and receiving the SS insignia

for his role in killing LaMonte Mathias, Powers committed

several additional murderous acts and participated in other

criminal activities to boot.)

Defendants individually and collectively make a passel of

additional arguments. Powers, for example, wanted more

time so that his new lawyer could work through the voluminous record. Yet counsel had six months for this purpose—and the invaluable benefit of watching the other

seven defendants’ trial. That preview of the evidence and

strategy was worth many additional months of preparation

time. Most of the defendants complain about the limiting

instructions that the judge gave. They essentially wanted

the judge to remind the jury incessantly that particular

evidence might have value against one defendant but not

others, or might have value contingent on a finding that the

defendants were co-conspirators. See United States v.

Martinez de Ortiz, 907 F.2d 629 (7th Cir. 1990) (en banc).

Perhaps this could have been handled better, but too many

reminders get irksome and jurors will tune them out. At the

close of the case defense counsel did not ask for an instruction recapping the tasks of separation that the jurors

needed to perform—but the arguments of counsel drove

home the nature of the task. Each defendant’s lawyer

reminded the jurors (without contradiction from judge or
10 Nos. 00-3719 et al.

prosecutor) that guilt must be assessed individually, using

only evidence about what that defendant did or said. We

could go on, saying a few words about each remaining line

of argument, but the trials were well handled by the

district judge and it suffices to say that we have considered

these arguments and find no abuse of discretion.

The only other contentions that require individual treatment are those based on Apprendi v. New Jersey, 530 U.S.

466 (2000). Seven defendants were tried before Apprendi;

Powers was tried afterward, and in his case the jury was

asked to (and did) determine beyond a reasonable doubt

whether the circumstances that raised the maximum

punishment to life imprisonment had been established.

That approach satisfied the due process clause, even though

the indictment did not include all of the details that potentially affected the sentence. See United States v. Cotton,

122 S. Ct. 1781, 1785-87 (2002); United States v. Smith, No.

00-4184 (7th Cir. Oct. 16, 2002), slip op. 19-24. Providentially, the district judge asked the jury to return special

verdicts, one for each predicate act, even in the preApprendi trial. For six defendants these special verdicts

show that the jury found, beyond a reasonable doubt, events

that justify a punishment as high as life imprisonment. With respect to these six there is no Apprendi

problem. With respect to Carl Warneke, however, a problem

remains.

The maximum penalty following a RICO conviction

depends on the maximum penalty for the most serious

predicate offense. For Warneke, that offense was murder

committed in Illinois. Illinois authorizes life imprisonment

(or capital punishment) for killing with certain aggravated

circumstances, such as “exceptionally brutal or heinous

behavior indicative of wanton cruelty” or premeditated

murder. See 730 ILCS §5/5-8-1(a)(1)(b). Lesser degrees of

murder may have lower maximum sentences. The problem
Nos. 00-3719 et al. 11

lies in Predicate Act 20, which alleged that an Outlaw murdered Jack Castle in a drive-by shooting. Act 20 included

two subparts: generic conspiracy to commit murder (Act

20A) and premeditated murder (Act 20B). The latter carries

a life sentence; the former does not. The jury instructions

did not call on the jurors to determine whether Act 20A or

Act 20B (or both) had been committed; the special verdict

referred to Act 20 as a unit. The prosecutor contended that

Warneke, though not the shooter, had directed the murder

and thus was accountable as a principal under Illinois law,

but the jury did not find this explicitly.

But neither did the district court commit plain error in

sentencing Warneke to life imprisonment. Because he did

not make an Apprendi-like argument in the district court,

and did not ask for a special verdict distinguishing Act 20A

from Act 20B, only plain error could justify reversal now.

See Fed. R. Crim. P. 52(b); United States v. Bjorkman, 270

F.3d 482 (7th Cir. 2001); United States v. Nance, 236 F.3d

820 (7th Cir. 2000). Plain error means error that not only

is apparent in retrospect (as this error is) but also threatens an injustice—which this error did not. For although the

jury did not find that Warneke was the brains behind this

premeditated murder (one carried out by lying in wait), the

record demonstrates this. Several witnesses testified in

detail about this murder and Warneke’s role in its planning. Warneke did not dispute the evidence that Castle’s

execution was carefully planned. Instead Warneke denied

that he took part in that planning. That argument the jury

considered, and rejected beyond a reasonable doubt, when

it found that Warneke was responsible for Predicate Act 20.

The important finding was made by the jury, on the right

standard. So no injustice has been done; the error turns out

to have been wholly formal.

Schneider has a distinct theory: because he bypassed the

jury when pleading guilty, no one found anything beyond a

reasonable doubt. We inquired at oral argument whether
12 Nos. 00-3719 et al.

Schneider wants to withdraw his plea and go to trial, on the

rationale that he would not have pleaded guilty had he

known that he was giving up the right to have the jury

determine beyond a reasonable doubt those circumstances

that fix his maximum punishment. Counsel answered no.

By pleading guilty and assisting the prosecutor, Schneider

reduced his punishment. The likely result of withdrawing

the plea and going to trial would be a life sentence. What

Schneider wants instead is to retain the benefit of the plea

while avoiding any exposure to a penalty exceeding 20

years (the “minimum maximum” for every RICO conviction).

This is not an available outcome. What actually happened

certainly is not plain error (the standard for Schneider, as

for Warneke, because no timely argument was made in the

district court). The predicate acts to which Schneider

confessed as part of his plea expose him to life imprisonment. Schneider certainly wasn’t “denied his right to a jury

trial,” as his reply brief says; he waived his right to a jury

trial. His own admissions resolved all important matters

against him. An admission is even better than a jury’s finding beyond a reasonable doubt; it removes all contest from

the case. See United States v. Broce, 488 U.S. 563, 570

(1989).

AFFIRMED

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—11-12-02