Court Opinion

ID: 2995979
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:24:00.965322+00
Date Added: 2024-06-11T09:33:54.336192
License: Public Domain

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 mo-
torcycle “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), vio-
lating 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 over-
whelming, 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 obtain-
ing the warrant did they listen to any conversation. Be-
cause 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 real-
ized 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 convic-
tions. 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 under-
lying conspiracy, for at most one predicate offense, rather
than multiple conspiracies with different criminal objects.
This presented a jury question, resolved adversely to de-
fendants at trial on the basis of ample evidence. We do not
discuss this theme further.) Objections to the use of con-
spiracies 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 in-
clude “any act or threat involving murder, kidnapping,
Nos. 00-3719 et al.                                         5

gambling, arson, robbery, bribery, extortion, dealing in ob-
scene 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 pun-
ishable by imprisonment for more than one year”. Conspir-
acy 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—con-
crete steps toward the substantive crime, steps that them-
selves 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 of-
fense under §1962(a), (b), or (c) from a RICO conspiracy un-
der §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 predi-
cate offense for purposes of the Continuing Criminal Enter-
prise 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 con-
duct 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, man-
aged, 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 abet-
ter 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 conspir-
acy 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 require-
ment 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 pas-
sage 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, di-
    rectly 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 ital-
icized 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 elabora-
tion 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 vio-
lence 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 vol-
uminous record. Yet counsel had six months for this pur-
pose—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 instruc-
tion 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 treat-
ment 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 po-
tentially 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. Providen-
tially, the district judge asked the jury to return special
verdicts, one for each predicate act, even in the pre-
Apprendi 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 imprison-
ment. 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 mur-
dered 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 threat-
ens 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 plan-
ning. 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 imprison-
ment. 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 find-
ing 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