Opinion
Civil Action No. 94-158, Section "N".
March 14, 2001
ORDER AND REASONS
Before the Court is petitioner Sebastian Salvatore's Petition for a Writ of Coram Nobis. For the following reasons, Salvatore's petition is GRANTED IN PART and DENIED IN PART.
A. BACKGROUND
In 1994, a federal grand jury sitting in the Eastern District of Louisiana returned a fifty-one count indictment against seventeen defendants. This indictment, which charged the defendants with defrauding the State of Louisiana of video poker licenses, defrauding Bally's Gaming, Inc. ("Bally's") of money, and conducting illegal gambling businesses, did not name petitioner Sebastian Salvatore as a defendant. On December 28, 1994, a forty-eight count superseding indictment was returned charging Salvatore with RICO violations, conspiracy to commit RICO violations, mail fraud, operation of illegal gambling businesses, wire fraud, and interstate travel in the aid of racketeering.
Salvatore was convicted on all charges and sentenced to a term of imprisonment of eighteen months, followed by three years of supervised release. Salvatore was ordered to pay a $1,400.00 special assessment fee to the United States and $25,000.00 in restitution to Bally's. Salvatore has already served his sentence and supervised release. He has paid his special assessment in full, and has paid $1,300.00 in restitution and executed a promissory note to Bally's for $23,700.00.
Salvatore appealed his conviction, contending that the mail fraud counts were invalid because the video poker licenses he was accused of obtaining through fraud were not "property" of the State under 18 U.S.C. § 1341. The Fifth Circuit, while recognizing that other courts of appeals had held that similar licenses did not constitute "property" under § 1341, held that "video poker licenses constitute money or property as required by the mail fraud statute." United States v. Salvatore, 110 F.3d 1131, 1143 (5th Cir. 1997).
In Cleveland v. United States, 121 S.Ct. 365 (2000), the Supreme Court ruled that when a state issues a license as a result of fraudulent misrepresentation, the state has not been deprived of "property," and hence there has been no violation of 18 U.S.C. § 1341. Specifically, the Court held "that § 1341 requires the object of the fraud to be `property' in the victim's hands and that a Louisiana video poker license in the State's hands is not `property' under § 1341." Id. at 374. Accordingly, the Supreme Court's holding in Cleveland contradicts the Fifth Circuit's holding that Salvatore's convictions were proper under the mail fraud statute.
Salvatore now moves the Court to vacate his mail fraud convictions and sentences on the grounds that the conduct as alleged in the indictment and established by the Government at trial does not violate the statute under which he was convicted. In addition, Salvatore asks the Court to set aside his other convictions on the grounds that the defective mail fraud counts tainted the rest of the indictment.
B. LAW AND ANALYSIS
Since Salvatore is no longer in custody, he cannot file a motion to vacate his sentence under 18 U.S.C. § 2255. Therefore, he has brought the instant petition for relief under a writ of error coram nobis, pursuant to 28 U.S.C. § 1651. In the Fifth Circuit, such a writ is available to a person suffering civil disabilities as a consequence of a criminal conviction, when the challenged error is of sufficient magnitude to justify extraordinary relief. See United States v. Marcello, 876 F.2d 1147, 1154 (5th Cir. 1987). Like the petitioner in Marcello, Salvatore has "appealed his case at each stage in the proceedings and, being denied all relief, served his sentence." Id. Accordingly, the "only meaningful remedy available to [Salvatore] is that provided by the writ of coram nobis." Id.
Both the Government and Salvatore agree (1) that his mail fraud convictions and sentences should be vacated, (2) that Counts 3, 4, 5, 6, 7, 9 and 10 (the mail fraud counts) of the superseding indictment should be dismissed, and (3) that Salvatore should be refunded the $350.00 special assessment fee he paid in connection with those counts. Salvatore, however, contends that all his other convictions and sentences should be set aside because the invalid mail fraud counts tainted the entire trial.
1. The RICO Counts.
Salvatore first argues that the invalidation of the mail fraud convictions specifically undermines the basis of his RICO convictions. Salvatore was convicted of both a substantive RICO violation and of conspiring to violate RICO. To establish Salvatore's RICO violation, the Government was required to prove the existence of an enterprise, Salvatore's employment by or association with that enterprise, and Salvatore's conduct of or participation in the conduct of the enterprise's affairs through a pattern of racketeering activity. See United States v. Cauble, 706 F.2d 1322, 1331 (5th Cir. 1983). A pattern of racketeering activity requires two or more predicate acts and a demonstration that the racketeering predicates are related and pose a threat of continued criminal activity. See St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 441 (5th Cir. 2000).
Salvatore cites United States v. Marcello for the proposition that invalidating one predicate act eliminates the basis for a RICO conviction. The Court, however, finds Salvatore's case distinguishable from Marcello. Marcello was charged with conspiring to violate RICO and with bribery, mail fraud, wire fraud, and interstate travel act violations. The bribery, mail fraud, wire fraud, and travel act allegations also served as predicate acts for the RICO charge. Because the jury returned a general verdict of guilty on the RICO conspiracy count but returned verdicts of not guilty on most of the substantive charges, the Fifth Circuit held that "it [was] not possible to discern what decision the jury made with respect to the various predicate acts." Marcello, 876 F.2d at 1153. Since there was no indication that the jury rested Marcello's RICO conviction on two legally sufficient predicate acts, the court reversed Marcello's conviction.
In the instant case, however, the jury's finding of guilt on the RICO and RICO conspiracy counts was based on a special verdict form that tracked exactly which predicate acts were proven, and which were not proven. The special verdict form indicates that the jury found Salvatore committed two predicate acts of racketeering. Racketeering Act #1 consisted of the sub-predicate acts of mail fraud and conducting an illegal gambling business. See Verdict Form at 4. Racketeering Act #2 consisted of two sub-predicate acts of mail fraud and one act of conducting an illegal gambling business. Id. The jury found that Salvatore committed all five acts.
Fifth Circuit precedent makes clear that RICO and RICO conspiracy counts will not be overturned if they are based on special verdict responses that ensure the defendant committed at least two predicate acts of racketeering. In United States v. Peacock, 654 F.2d 339 (5th Cir. 1981), vacated in part on other grounds, 686 F.2d 356 (5th Cir. 1982), the defendants were charged with racketeering in connection with an arson ring. The arson ring allegedly engaged in a pattern of racketeering activity which included ten arsons, one murder, 22 acts of mail fraud, and obstruction of justice. The defendants were convicted of all charges, but 8 of the mail fraud convictions were reversed on appeal. Like Salvatore, the Peacock defendants argued that the reversal of any of the predicate acts of racketeering required a reversal of the entire RICO conviction because "it is impossible to determine upon which two counts the jury relied in returning a guilty verdict." Id. at 348 (citing United States v. Brown, 583 F.2d 659, 669 (3d Cir. 1978)). However, because a special verdict form demonstrated that the jury found the defendants guilty of at least two predicate acts other than the reversed mail fraud charges, the Peacock court upheld the RICO convictions. Similarly, because the special verdict form in the instant case proves the jury specifically determined that Salvatore committed two predicate acts of conducting illegal gambling businesses, the Court finds that Salvatore's RICO convictions must be upheld.
Although the special verdict form specifically referred only to Count 1, the substantive RICO count, the Court finds that the jury's determination on this form applies equally to the Count 2, the RICO conspiracy count, because both counts allege the same predicate acts.
Salvatore further argues that the illegal gambling business counts are invalid as predicate acts because it is unclear whether he was convicted of the illegal gambling activities vicariously through the mail fraud counts, or directly based on the evidence. However, in accordance with the Fifth Circuit's pattern jury charges, the jury was instructed that "[e]ach count, and the evidence pertaining to it, should be considered separately." Fifth Circuit Pattern Jury Instructions, Criminal, § 1.23 (West, 1990); see also, Court's Jury Charge at 9. "Cautionary instructions of precisely this sort have been held `sufficient to cure any possibility of prejudice.'" United States v. Manges, 110 F.3d 1162, 1175 (5th Cir. 1997) (quoting United States v. McCord, 33 F.3d 1434, 1452 (5th Cir. 1994)). Accordingly, based on these instructions, the Court finds that the jury convicted Salvatore of conducting illegal gambling businesses directly based on the evidence.
The Court instructed the jury that "A separate crime is charged against one or more of the defendants in each count of the indictment. Each count, and the evidence pertaining to it, should be considered separately. Also, the case of each defendant should be considered separately and individually. The fact that you may find one or more of the accused guilty or not guilty of any of the crimes charged should not control your verdict as to any other crime or any other defendant. You must give separate consideration to the evidence as to each defendant." Court's Jury Charge at 9.
Finally, Salvatore argues that his RICO convictions must be vacated because the Government based its case on the infirm theory that video poker licenses in the hands of the state are property. However, in United States v. Neder, 527 U.S. 1, 18 (1999), the Supreme Court held that an appellate court may affirm a conviction even where the case was submitted to the jury on a legally invalid theory if it is "clear beyond a reasonable doubt that a rational jury would have found the defendant guilty absent the error." In the case at bar, since the jury specifically found that Salvatore committed two predicate acts entirely independent from the mail fraud charges, the Court finds that Salvatore's RICO convictions are unaffected by the Supreme Court's decision in Cleveland.
In a related argument, Salvatore argues that the Court's use of a Pinkerton jury instruction mandates the reversal of his RICO convictions because the instruction may have allowed the jury to base his RICO convictions on the invalid mail fraud counts. See Pinkerton v. United States, 328 U.S. 640 (1946). The Court disagrees. A Pinkerton instruction tells a jury it can find guilt for substantive offenses based on a joint enterprise theory. It does not, as Salvatore argues, allow a jury to use substantive counts, such as mail fraud, to construct guilt of other crimes, such as RICO violations. Accordingly, the Court finds that Salvatore's Pinkerton argument is inapplicable to the instant case.
Because the jury specifically found that Salvatore committed two predicate acts other than the vacated mail fraud charges and because the jury was explicitly instructed to consider each charge separately, the Court finds that vacating the mail fraud convictions has no effect on Salvatore's RICO convictions. Accordingly, the Court denies Salvatore's motion to vacate his RICO and RICO conspiracy convictions.
2. The Trial as a Whole.
Along with the RICO and RICO conspiracy charges in Counts 1 and 2, the superseding indictment charged Salvatore with mail fraud in Counts 3-7 and 9-10, conducting illegal gambling businesses in Counts 8 and 11, wire fraud in Counts 16-31, and interstate travel in the aid of racketeering in Count 37. The jury convicted Salvatore of all 28 counts. Salvatore contends that vacating his mail fraud convictions compels the reversal of all his other convictions, because the Cleveland mail fraud counts and the related evidence impermissibly tainted the jury's verdicts on the remaining counts.
Because the Court has vacated some, but not all, of the counts of Salvatore's multicount conviction, the Court "must determine if prejudicial spillover from evidence introduced in support of the reversed count requires the remaining convictions to be upset." United States v. Rooney, 37 F.3d 847, 855 (2d Cir. 1994). In evaluating a claim of prejudicial spillover of evidence, courts look to several factors in determining whether the totality of the circumstances requires reversal of some or all of the remaining counts.
"First, we examine whether the evidence on the reversed count would have tended to incite or arouse the jury into convicting the defendant on the remaining counts." Id. at 855. The Court finds that the evidence related to the mail fraud counts, which involved technical information about the video poker license application process, is not the sort of evidence that might have influenced the jury to convict Salvatore of the other charges. See United States v. Holzer, 840 F.2d 1343, 1350 (7th Cir. 1998) (holding that "evidence of mail fraud was not of the inflammatory sort that might have swayed the jury to convict Holzer of the other charges . . .")
Second,
it is appropriate to look to the similarities and differences between the evidence on the reversed count and the remaining counts. Courts have concluded that where the reversed and the remaining counts arise out of similar facts, and the evidence introduced would have been admissible as to both, the defendant has suffered no prejudice.Rooney, 37 F.3d at 855. In the instant case, because the evidence leading to Salvatore's conviction on the mail fraud charges was related to the evidence surrounding his other convictions, the Court does not find that Salvatore was prejudiced by the presentation of evidence on the Government's invalid mail fraud theory.
Finally, "as is routine when examining potential prejudice in any criminal case, it is appropriate to look to the strength of the government's case on the counts in question." Rooney, 37 F.3d at 856. As stated above, the jury was repeatedly instructed to consider each crime separately and did in fact make specific findings of guilt for each crime. Accordingly, the Court finds no weaknesses in the Government's case on the non-Cleveland charges and finds no basis to overturn the jury's verdict on any counts except the mail fraud convictions.
C. CONCLUSION
IT IS ORDERED that
(1) petitioner Sebastian Salvatore's mail fraud convictions and sentences are VACATED;
(2) Counts 3, 4, 5, 6, 7, 9 and 10 (the mail fraud counts) of the superseding indictment are DISMISSED; and
(3) the United States should immediately repay the $350.00 special assessment fee levied against Salvatore in connection with those counts.
IT IS FURTHER ORDERED that petitioner Salvatore's motion for writ of coram nobis on his other convictions is DENIED.