Court Opinion

ID: 2996931
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:32:29.810295+00
Date Added: 2024-06-11T12:04:09.776044
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 02-3589
UNITED STATES OF AMERICA,
                                             Plaintiff-Appellee,
                              v.

JAMES F. HANDLIN,
                                         Defendant-Appellant.

                        ____________
          Appeal from the United States District Court
               for the Central District of Illinois.
          No. 01 CR 30079—Jeanne E. Scott, Judge.
                        ____________
    ARGUED FEBRUARY 9, 2004—DECIDED MAY 3, 2004
                   ____________

 Before BAUER, MANION, and EVANS, Circuit Judges.
  BAUER, Circuit Judge. Illiopolis, Illinois, a small town
with a population of 916, was the site of a combustible
criminal conspiracy that raged for a period of years. Be-
tween the years of 1991 and 1997, the area in and around
this small town saw eight successful acts of arson and one
failed attempt. It is a wonder that there was anything left
standing in the area when the ashes finally settled. The
story is as follows:
 Late in 1990 or January of 1991, Defendant James F.
Handlin and Jack Skaggs purchased on a contract for
2                                                No. 02-3589

deed basis what would be called J&J’s Company Store from
Lawrence “Joe” Hamm. Shortly after gaining possession of
the store, Handlin and Skaggs increased the insurance
coverage on their new store. Around this same time, Hamm
purchased another convenience store/gas station and began
operating it under the name Joe’s Company Store. The
opening of Joe’s Company Store was bad news to its
competition, Johnson’s Red Fox Grocery, which was located
across the street from Joe’s.
   Johnson’s Red Fox Grocery erupted in flames on February
first or second, 1991. The fire was started by John W.
“Billy” Rogers when he poured a quantity of gasoline down
a roof vent. The gasoline was then followed by a lit road
flare. Johnson’s Red Fox was leveled by the fire and the
insurance company paid the owners approximately
$800,000. Rogers received $2,500 from Hamm for the arson
job.
  On February 16, after the insurance had been raised,
J&J’s was destroyed by fire. While separate investigations
by the State Fire Marshall’s Office and the insurance
company were unable to determine the cause of the fire,
Rogers’ testimony at the trial, which would commence much
later, showed that Rogers and Danny Dennison were paid
$500 to burn the store. The insurance company paid out a
total of $51,000. Of these funds, Hamm received $42,000 as
a result of a provision in the contract for sale, Handlin’s
attorney received $2,500, and the balance was used for
“clean up.”
  After putting his direct competitor out of business, on
August 15, 1991, Hamm hired Rogers to burn down Hamm’s
own business, Joe’s Company Store. Hamm supplied Rogers
with a key so as to facilitate the arson. Unfortunately for
Hamm and Rogers, the fire did not completely destroy the
building. It turned out that the flare used to ignite the blaze
caused a water pipe to rupture which extinguished the
No. 02-3589                                                 3

flames. Hamm made an insurance claim of $42,936 but was
only paid $28,529. Because the building was not totally
destroyed, Hamm refused to pay Rogers for his work.
  After this failed arson attempt, Rogers complained to
Handlin about a shortage of cash. Handlin suggested that
Rogers use the key that Hamm had given him to steal
cigarettes from Joe’s Company Store. Apparently, Rogers
was in the midst of a string of bad luck; the theft failed and
he was arrested. As might be expected, Hamm tried to have
the charges dropped.
  Business must have been good for a while because there
was not another fire for approximately three years, but on
June 5, 1994, Rogers was paid $500-$600 by Hamm to burn
down Granny’s Pub and Grub, another competitor of Joe’s
Company Store. Although he failed to level Granny’s Pub
and Grub, he did succeed in causing extensive fire damage
to the interior of the building. Granny’s insurance company
paid out approximately $37,000. There was then another
break in the setting of fires.
   In 1996, Hamm and Handlin approached Rogers with
a plan to prevent Green Oil Gas Station from competing
with Joe’s Company Store. Located across the street from
Joe’s Company Store, Green Oil had been newly remodeled
with fiberglass-lined gas tanks, a new canopy, concrete,
lighting and a convenience store. Hamm and Handlin’s plan
was to provide Rogers with a cordless drill, a drill bit, and
two steel rods to extend the drill bit so that he could
puncture the underground gas tanks. Rogers completed the
plan and was paid $500 for his work after Handlin told
Hamm of their success. Their success, however, was short-
lived. The owner of the Green Oil Gas Station repaired the
tanks and stayed in business.
  Having failed to eliminate his competition by more subtle
means, Hamm reverted to the tried-and-true method of
arson. Rogers was paid $1000 to burn down Green Oil and
4                                               No. 02-3589

he did so in the fall of 1996. The loss was valued at nearly
$175,000.
  Later, in October 1996, Handlin approached two of his
employees, Chad Bennett and James Clapp, and asked if
they would be interested in setting fire to Habits and Vices
Tavern. This bar was located about one block from Joe’s
Company Store. They did not give an answer immediately
and when they did agree, Handlin told them it was too late.
Rogers had beaten them to the punch.
  At the same time that Handlin solicited Bennett and
Clapp to perform the arson, Hamm talked to Rogers. Rogers
agreed to set fire to Habits and Vices Tavern for $1000 and
on October 1, 1996 he did so. Habits and Vices Tavern’s
insurer paid out $160,000 as a result of the fire.
  The conspirators then hatched yet another scheme to
defraud their own insurance companies. In the fall of 1996,
Handlin and Hamm approached Rogers with a plan to stage
a vehicular accident. Rogers was to steal a rental truck
from a Decatur business and ram Handlin’s and Hamm’s
unoccupied and parked vans. Rogers refused to participate;
apparently, the prospect of stealing a U-Haul during the
daylight hours was too much risk for Rogers. Undaunted,
Handlin went to the second-stringers, Clapp and Bennett,
and discussed the same scheme. Clapp and Bennett agreed
to participate.
  In the evening hours of December 6, 1996, Clapp and
Bennett stole a U-Haul rental truck from a Decatur busi-
ness and drove it to a country road near Illiopolis. The plan
was simple in its execution. Handlin’s van was parked just
short of a stop sign and Hamm’s van was parked directly
behind Handlin’s. When Handlin gave the signal, Bennett
accelerated to 55 m.p.h. and rammed the rearend of
Hamm’s van. Handlin and Hamm called 911 to report the
accident as Clapp and Bennett made their getaway. The
911 report was not the only one that Hamm and Handlin
No. 02-3589                                                5

made. Hamm claimed that he was hit while on a business
errand for which his insurance company paid him approxi-
mately $470,000. Handlin claimed that he suffered injuries
as a result of the accident and received $40,000 from his
insurance company. Clapp and Bennett were paid $1000 by
Handlin and promised that more would be paid when the
insurance claims were settled.
  Around the same time that the conspirators were plan-
ning and executing the staged vehicle accident, they were
also planning to burn down Joe’s Company Store and
Christine’s Lounge, another establishment located across
the street from Joe’s Company Store (a particularly danger-
ous part of town it seems). Clapp, Bennett, Hamm, and
Handlin met at a restaurant to discuss the plan.
  A few days prior to setting the fires at Joe’s Company
Store and Christine’s Lounge, Handlin, Clapp, and Bennett
removed goods and furniture from Joe’s. On the night of
December 12, 1996, Bennett and Clap set fire to Joe’s while
Rogers attempted to ignite a blaze in Christine’s Lounge.
The idea behind setting fire to both buildings was to force
the firefighters to choose which building they would save.
Hamm assumed that the emergency response teams would
attempt to extinguish the fire at Christine’s Lounge first
because there were antique cars inside. Rogers’ attempt to
ignite a blaze within Christine’s was foiled this time due to
a damp flare. Nevertheless, Joe’s Company Store was so
extensively damaged that Hamm’s insurance company paid
the policy limits in claims. Handlin paid Clapp and Bennett
for their parts in the arson.
  To “take some of the heat off” of Illiopolis, Handlin and
Hamm hired Clapp and Bennett to set fire to the Corn Crib
Tavern in Latham, Illinois, about fourteen miles
from Illiopolis. After the tavern was completely destroyed,
Handlin paid Clapp and Bennett $1000 for the job. When
Clapp and Bennett complained that they had been promised
6                                               No. 02-3589

more, Handlin told them to take it up with Hamm.
  Shortly after the conspirators had reduced the Corn Crib
Tavern to ashes, they began to plan another scheme to steal
two truckloads of cigarettes from W.F. Brockman and
Company, a wholesale distributer of tobacco, candy, and
paper goods. Handlin approached Bennett and Clapp with
the plan. Clapp refused, but Bennett agreed to participate.
Hamm then approached Rogers who also agreed to par-
ticipate in the theft. Handlin made two trips, one with
Bennett, the other with Hamm and Rogers, to Brockman’s
premises in order to case the area.
  In the early morning hours of February 1997, Handlin,
Bennett, and Rogers met near Brockman and Company.
Handlin dropped Bennett and Rogers off within walking
distance of the Brockman lot and then parked across the
street as a lookout. Rogers and Bennett took longer than
anticipated to hot-wire one truck. As a result, the plan to
steal two trucks was ditched. Calling Handlin on their
radio, Bennett and Rogers made sure that the front of
the Brockman lot was clear. Hearing that it was, they
attempted their getaway. Unfortunately (or fortunately,
depending on the perspective), the act of hot-wiring loos-
ened the steering wheel to such a point that it fell off when
Rogers drove over a set of railroad tracks. Rogers lost
control of the truck and ended up crashing into a ditch.
Bennett and Rogers ran back to Bennett’s truck, which was
parked nearby, and radioed Handlin with the news. The
three drove back to Illiopolis empty handed. Empty handed
is how Rogers and Bennett left this job because Hamm
refused to pay them for their botched work.
  The authorities must have noticed the fact that the area
in and around Illiopolis was slowly being reduced to ashes
and in April 2001, the government convinced Bennett to
cooperate with them. Wearing a wire, Bennett met with
No. 02-3589                                                 7

Handlin.
   Bennett told Handlin that he had been arrested for arson
and explained that the government tried to induce his co-
operation by presenting evidence of various arsons and the
staged accident. He also told Handlin that Clapp had made
a statement to the government about the Corn Crib Tavern
fire and that the statement included facts that could only be
known to the conspirators; i.e., that Handlin was responsi-
ble for soliciting Clapp and Bennett and that he would pay
the torches, not Hamm. Bennett then reminded Handlin
about his promise to supply a lawyer should the need arise.
Handlin, among other inculpatory statements, said, “You
see my [expletive deleted] business. I’m right in the middle
of this [expletive deleted]!” When Bennett wondered why
the government only asked about Handlin and Hamm,
Handlin said, “Well, no, most likely they’re after me and
Joe [Hamm].”
  On July 11, 2001, Handlin, Hamm, Bennett, and Clapp
were indicted. Handlin was charged with a total of eight
counts, including conspiracy to defraud the United States,
18 U.S.C. § 371, use of explosives in the commission of a
felony, 18 U.S.C. § 844(h), and mail fraud, 18 U.S.C. 1341.
Handlin filed various pretrial motions including motions to
sever his trial from that of his co-conspirators, to sever the
“various conspiracy counts,” to suppress the use of his
grand jury testimony, and to exclude evidence of other bad
acts. The district court granted the motion to sever the trial
from the other defendants but did not rule on the motion to
sever the various conspiracy counts. The court further
allowed the use of the grand jury testimony for impeach-
ment purposes only. The motion to suppress was granted in
part but the court allowed evidence relating to the drilling
of Green Oil’s gas tanks and the attempted thefts of
cigarettes.
  At the close of a six day trial, Defendant Handlin was
8                                                No. 02-3589

found guilty of all the charges against him. His motions for
a new trial and judgment of acquittal were denied by a
written order. Handlin was sentenced to 180 months in
prison, three years of supervised release, and ordered to pay
$655,639.06 in restitution and $800 in special assessments.
Defendant Handlin appealed.

                       DISCUSSION
Fatal Variance
   Handlin first argues that the evidence showed multiple
conspiracies as opposed to the one charged in the indict-
ment. Although there is some question as to whether the
defendant forfeited this claim, a properly preserved claim
of fatal variance will be treated as an attack on the suffi-
ciency of the evidence. United States v. Williams, 272 F.3d
845, 863 (7th Cir. 2001). Even if the evidence at trial shows
the existence of multiple conspiracies, a fatal variance will
not be found if a reasonable juror could have found beyond
a reasonable doubt that the defendant was part of the
single, charged conspiracy. Id. We view the evidence in the
light most favorable to the government. Id. Furthermore,
Handlin must show that the variance worked to prejudice
his defense. Id.
  The defendant was charged with conspiracy to commit
arson and mail fraud. In his brief to this court he rightly
points out, “[t]o join a conspiracy, then, is to join an agree-
ment, rather than a group.” Citing United States v.
Townsend, 924 F.2d 1385, 1390 (7th Cir. 1991). An agree-
ment need not be explicit; a tacit agreement may support a
conspiracy conviction. United States v. Clay, 37 F.3d 338,
341 (7th Cir. 1994). The agreement may be proved by cir-
cumstantial evidence. Id. Such evidence may be aimed at
showing that the co-conspirators embraced the criminal
objective of the conspiracy, United States v. Severson, 3 F.3d
1005, 1010 (7th Cir. 1993), the conspiracy continued onward
No. 02-3589                                                   9

towards its common goal, United States v. Mojica, 185 F.3d
780, 787 (7th Cir. 1999), there were prolonged and/or
cooperative relationships, United States v. Collins, 966 F.2d
1214, 1221-24 (7th Cir. 1992); Severson, 3 F.3d at 1010, or
the various transactions followed a similar sequence of
events, Severson, 3 F.3d at 1010. Elements of each and
every one of these factors can be found in this conspiracy.
  As the number of individual incidents increased, so too
did the evidence pointing to a single conspiracy. The evi-
dence shows a conspiracy designed to generate income to
the individuals involved by means of arson and mail fraud.
Every single incident served to further the scheme, be it
by generating money to the conspirators, wiping out com-
petition, or covering up the existence and/or actions of the
conspiracy.1 When viewed in light of this more specific
purpose, it is clear that the co-conspirators embraced the
common goal of the conspiracy and continued towards that
goal over a period of years.
  Although all of the individual incidents are similar, they
are not identical. However, the level of trust, cooperation,
and delineation of duties among the various participants
overcomes any doubt that this was anything other than a
single, broad conspiracy. See Severson, 3 F.3d at 1010;
Collins, 966 F.2d at 1221-24. The conspiracy lasted for
a number of years with a clear pattern of “doing business,”
and a small cast of characters. Either Handlin or Hamm
would hire someone to do the more risky work. The hired
individual would then be paid after the work was com-
pleted. In fact, by 1996 this process had solidified into
Handlin hiring Rogers or Bennett and/or Clapp to carry out

1
  We note however, that Roger’s attempt to steal cigarettes from
Joe’s Company Store falls outside of the goal of the conspiracy.
Nevertheless, it was relevant to show Handlin’s knowledge of and
participation in the conspiracy.
10                                              No. 02-3589

the job. When the job was finished, Handlin would pay
Rogers, Bennett, and/or Clapp. The evidence also shows
that at least some of the fires were started in a similar
manner—with a flare. This and other evidence shows,
among other things, that the co-conspirators trusted each
other enough to rely upon the promises made to each other;
e.g., to pay after work was completed or to supply
an attorney if someone was to get caught. The long-term
coordination is illustrated by the repeated use of the same
individuals in the conspiracy over a number of years. Fi-
nally, there is a clear division of labor which is shown by
the fact that Hamm and Handlin acted as managers or
foremen, while Rogers, Bennett, and Clap act as employees
of those managers. Reviewing the evidence in the light most
favorable to the government, as we must, we find that a
reasonable juror could well have found the existence of a
single conspiracy beyond a reasonable doubt.

Co-Conspirator Statements
  Handlin next complains about co-conspirator statements
that were introduced against him at trial. Specifically, he
takes issue with “those statements attributed to the co-de-
fendant Hamm regarding the 1991 arsons, the 1994 arson,
and the October, 1996 arsons [which] could never be ad-
mitted against Handlin because he was not a member of
those conspiracies.” We review a district court’s evidentiary
rulings for abuse of discretion. United States v. Henderson,
337 F.3d 914, 918 (7th Cir. 2003). Federal Rule of Evidence
801(d)(2)(E) defines nonhearsay as “a statement by a
coconspirator of a party during the course and in further-
ance of the conspiracy.” We note that it is irrelevant when
the defendant joined the conspiracy, so long as he joined it
at some point. United States v. Sophie, 900 F.2d 1064, 1074
(7th Cir. 1990). Since there is no serious attempt to argue
that Handlin was not part of the conspiracy at some point,
No. 02-3589                                                    11

his argument depends upon whether there were multiple
conspiracies, and not a single, overarching conspiracy.
Because we rejected his fatal variance argument, we also
reject this argument. The co-conspirator statements were
nonhearsay.

Severance of Counts
 Prior to trial, Handlin filed a Motion to Sever Counts and
Defendants.2 Although there is also some question as to
whether he forfeited this claim, we will address it on the
merits.
  Federal Rule of Criminal Procedure 8(a) allows joinder of
multiple counts if they are “of the same or similar char-
acter, or are based on the same act or transaction, or are
connected with or constitute parts of a common scheme or
plan.” This court reviews the district court’s denial of a
motion to sever counts de novo. United States v. Quilling,
261 F.3d 707, 713-14 (7th Cir. 2001). Handlin must show
that the joinder created actual prejudice that served to
deprive him of a fair trial. United States v. Rollins, 301 F.3d
511, 519 (7th Cir. 2002). Furthermore, it is clear that
“prejudice requiring severance is not shown if evidence on
the severed counts would be admissible in the trial of the
remaining counts.” Id. at 519 (quoting United States v.
Rogers, 475 F.2d 821, 828 (7th Cir. 1973)).
  There is no reason to sever the conspiracy count from the
counts related to the Joe’s Company Store fire or those
related to the staged accident. The fire at Joe’s and the

2
  It is Handlin’s position that there should have been three sep-
arate trials; one for the conspiracy, one for the staged accident,
and one for the conduct related to the 1996 fire at Joe’s Company
Store.
12                                               No. 02-3589

staged accident involving a stolen U-Haul were listed as
overt acts in the conspiracy count of the indictment. We
have previously found that the evidence adduced at trial
supported a finding of one conspiracy of which Handlin was
a part. See discussion supra “Fatal Variance.” Therefore, as
the district court held, the evidence proving the substantive
counts of which Handlin complains could have been intro-
duced as evidence of the conspiracy charge in any event.
Clearly, the failure to sever the counts did not serve to
unfairly prejudice the defendant. See Rollins, 301 F.3d at
519.

Uncharged Bad Acts
  Prior to trial, Handlin joined in Hamm’s motion in limine
which sought to exclude evidence of uncharged “bad acts.”
The government responded that the acts were intricately
related to the charged offenses. After the court’s ruling, the
government was allowed to introduce evidence on two of
those bad acts; specifically, the 1991 cigarette theft from
Joe’s Company Store and the 1997 theft of cigarettes from
Brockman and Company. Handlin claims that this was
error.
  It should be noted that there was some confusion as
to when the motion was decided. The facts of the two
cigarette thefts were, for some reason, presented in the
motion in limine as one theft with factual components of
each of the two actual thefts. The government asserted that
it would present evidence that Hamm submitted false
insurance claims as a result of the cigarette thefts. This
assertion turned out to be wrong in that there was no evi-
dence that Hamm submitted an insurance claim for the
cigarette thefts. Nevertheless, the trial court affirmed its
pre-trial finding in its decision denying the defendant’s
motion for a new trial, stating that the incidents were
probative of the relationships among the co-conspirators.
No. 02-3589                                               13

The judge wrote:
      In Defendant Handlin’s trial, Rogers testified that
    Handlin told him to steal cigarettes from Hamm’s
    business. That testimony indicated that Handlin told
    Rogers to do this since Hamm had not paid Rogers
    in full for the Joe’s Company Store arson in 1991. It
    showed the relationship of the conspirators and was
    intricately related to the evidence of the arson of Joe’s
    Company Store. Additionally, Bennett and Rogers
    testified about participation in an attempted cigar-
    ette theft from Brockman’s. The government failed to
    present evidence, however, that Hamm received any
    insurance settlement as a result of these incidents. The
    court finds that this evidence is still probative of the
    relationship among the alleged co-conspirators. United
    States v. Kellum, 42 F.3d 1087, 1093 (7th Cir. 1994).
    The testimony concerning the theft attempt
    at Brockman’s also demonstrated the relationship be-
    tween the alleged co-conspirators. It clearly showed the
    pecking order within the conspiracy; Hamm and
    Handlin gave the orders while Bennett, Clapp, and
    Rogers took the greatest risks. Therefore, such evidence
    was properly admitted, apart from the reason stated in
    the April 8, 2002, Order [regarding defendant’s motion
    in limine], because it showed the relationship of the co-
    conspirators and their intent in acting in concert.
(App. at 50-1.) We agree with and find no error in this well-
reasoned finding.

Use of Grand Jury Testimony at Trial
  Handlin testified before the grand jury. The government
did not provide Handlin with Miranda-styled warnings or
otherwise inform him that he was a target of the grand
jury’s investigation. The district court refused to allow the
government to use that testimony in their case-in-chief
14                                              No. 02-3589

but did allow it for impeachment. When Handlin took the
stand at his trial, he testified that he did not move any
items out of Joe’s Company Store shortly before the 1996
arson of that establishment and that Clapp was not present
when the items were moved. His grand jury testimony
directly contradicted this testimony and the government
impeached him with his prior statements. Handlin claims
this was error. It was not.
  Assuming, without deciding, that there was a Miranda
violation, suppression of evidence by reason of a Miranda
violation is a shield, not a sword. see Harris v. New York,
401 U.S. 222 (1971). The Fifth Amendment privilege
against self-incrimination does not give a defendant license
to perjure himself. Id. at 225. “Having voluntarily taken
that stand, [the defendant] was under an obligation to
speak truthfully and accurately, and the prosecution here
did no more than utilize the traditional truth-testing de-
vices of the adversary process.” Id.
  Handlin also argues that his grand jury testimony cannot
be used for any purpose because it was “compelled” by the
“broad coercive power” of the grand jury subpoena.
In support of this argument, he cites to New Jersey v.
Portash, 440 U.S. 450, 459 (1979). His reliance is misplaced.
The defendant in Portash had received immunity and
therefore, his testimony was compelled whereas Handlin’s
was not. Handlin makes no real argument that his testi-
mony was coerced or otherwise involuntary. We find no
error in the district court’s ruling.

                     CONCLUSION
  In conclusion, we find no error in the district court’s
findings or rulings.
                                                 AFFIRMED.
No. 02-3589                                        15

A true Copy:
      Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit

               USCA-02-C-0072—5-3-04