United States v. Anthony J. Leisure, United States of America v. Charles M. Loewe, United States of America v. David R. Leisure, United States of America v. Paul John Leisure, A/K/A John Paul Leisure, United States of America v. Steven T. Wougamon

Citation: 844 F.2d 1347Docket: 85-1590

Court: Court of Appeals for the Eighth Circuit; July 8, 1988; Federal Appellate Court

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Anthony J. Leisure, Charles M. Loewe, David R. Leisure, Paul John Leisure, and Steven T. Wougamon appealed their convictions from the Eastern District of Missouri, where a jury found them guilty of multiple offenses including racketeering, obstruction of justice, and unauthorized creation of destructive devices. The charges stemmed from a superseding indictment that included violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) under counts for both substantive violations (Count I) and conspiracy (Count II). Additional counts included obstruction of justice (Counts III and IV) and unauthorized manufacture of destructive devices (Counts V and VI).

The trial lasted thirty-four days, with the jury deliberating for twelve days. The jury convicted Paul and David Leisure and Wougamon on all counts against them, while Anthony Leisure was convicted on the RICO counts but had mistrials on others. Loewe was found guilty on the RICO counts but not on obstruction. Sentences for the appellants ranged from thirty-six to fifty-five years.

The appellants raised nine points of error for reversal, including issues related to the denial of a motion to suppress recorded conversations, prosecutorial misconduct, and evidentiary challenges. Wougamon presented four additional points, focusing on jury instruction amendments, indictment sufficiency, evidence support for his RICO conspiracy conviction, and the denial of a new trial based on new evidence.

All convictions of Anthony Leisure, Charles Loewe, David Leisure, and Paul Leisure are affirmed. Steven Wougamon's convictions for Counts II and III are affirmed, while those for Counts I and IV are reversed, his sentences on Counts II and III vacated, and the case remanded for resentencing. 

The case, set against a backdrop reminiscent of a Mario Puzo novel, involves Paul Leisure and his associates' attempts to control two labor unions and the criminal underworld in St. Louis, Missouri, beginning in 1964. Paul and Anthony Leisure were linked to James Michaels, Sr., head of the Syrian organized crime family, during which time their cousin Richard was murdered by associates of Michaels, Sr. The Leisures later discovered a coverup surrounding the murder. In 1968, they allied with Anthony Giordano of the Italian organized crime family, forming a hierarchy in Local 110 of the Laborers' International Union.

As the Leisures sought to establish their own power base, Paul and Anthony founded LN.P Tire Service, while Anthony became a business agent for Local 110. Following the death of the union’s business manager in 1977, Anthony assumed the role of assistant business manager, effectively controlling the union. Tensions escalated in the late 1970s as a power struggle ensued within Local 110 and another local, Local 42, exacerbated by the inclusion of Giordano's family members in union management. A pivotal moment occurred when Giordano and Michaels, Sr. demanded the firing of Anthony's ally, Joe Broderick, and Giordano sought to strengthen his position in Local 42. This rivalry culminated in the murder of John Paul Spica, a Giordano associate, in a bombing on November 9, 1979.

The Leisures sought to strengthen their control over Local 110 after Anthony Giordano's death in June 1980, perceiving less threat from the Italian faction led by John Vitale. They targeted Michaels, Sr. for assassination, initially planning a shooting but ultimately opting for a car bombing, which was executed on September 17, 1980, as he drove on Interstate 55 in St. Louis County. Key participants in the murder included Paul, Anthony, and David Leisure, along with Fred Prater, Charles Loewe, Joe Broderick, and John Ramo. Following Michaels, Sr.'s death, the Leisures successfully ousted Michaels, III from Local 110 and Paul Leisure gained a managerial position in Local 42.

Fearing retaliation from the Michaels faction, Paul Leisure took precautions, including starting his car remotely. An attempt on his life occurred on August 11, 1981, when a bomb exploded under his vehicle, implicating Michaels, III and others in the attack. While Paul recovered, Anthony Leisure orchestrated retaliatory plans against members of the Michaels group. After failing to kill Robert Peters due to suspicious circumstances during a planned ambush, Anthony and others attempted to target the Michaels family farmhouse, but no one was home and a proposed dynamite attack was not executed.

On September 11, 1981, Anthony Leisure shot John Charles Michaels and his associate Dennis Day outside the Edge Restaurant, resulting in injuries but no fatalities. Following this, the Leisures tracked down George 'Sonny' Faheen, involved in the earlier car bombing, and killed him on October 16, 1981, using a bomb in his vehicle. The planning and execution of these violent acts involved multiple members of the Leisure group in both the attacks and subsequent cover-ups.

Following the murder of Faheen, the Leisure group's situation deteriorated as federal and state investigations intensified. Kornhardt was arrested the day after the murder, prompting Ramo, Loewe, and David Leisure to flee St. Louis to evade arrest. In March 1982, Termine was arrested in Illinois and agreed to testify against Kornhardt concerning his involvement in the murder. Concerns arose among the Leisures that Kornhardt might cooperate with federal authorities. On July 31, 1982, Kornhardt was found murdered by Carbaugh, assisted by Wougamon, after Paul Leisure allegedly promised them union jobs in exchange for the killing. Shortly before the murder, Wougamon was enrolled in a union, and Carbaugh became a member days after the act. Despite Kornhardt's death, David Leisure was arrested on August 4, 1982, related to the Faheen murder. Fred Prater contacted federal authorities on August 16, 1982, offering to cooperate, and provided damaging testimony to a federal grand jury three days later. On November 9, 1982, Wougamon's brother-in-law, Innes Anderson, agreed to cooperate but faced threats from Wougamon after discussing the investigation. Anderson and his family subsequently left St. Louis under government protection. The appellants were indicted in April 1983, with a superseding indictment issued in December 1983. The jury reached a verdict on April 2, 1985, leading to sentencing for all except Wougamon, who was sentenced later due to a post-trial motion. The case progressed to appeal, focusing on nine points raised by appellants Paul, Anthony, and David Leisure, and Charles Loewe. A significant issue raised was the admissibility of tape recordings obtained through electronic surveillance initiated after the Faheen murder. The surveillance, authorized by a court order on February 8, 1982, spanned seven months and included the LN.P office and Paul Leisure's home, which the appellants contested.

Appellants challenge the LN.P surveillance on four grounds: 1) insufficiency of the affidavits supporting the surveillance application; 2) necessity for the surveillance; 3) lack of restrictions on the surveillance's intrusiveness; and 4) the district court's failure to grant a hearing under Franks v. Delaware. 

Regarding the affidavit's sufficiency, appellants argue it fails to establish probable cause that Paul Leisure and others committed or were about to commit RICO offenses, that communications related to those offenses would be intercepted, and that the LN.P offices were involved in or commonly used for these communications. The court agrees that establishing probable cause is essential for electronic surveillance orders under Title III of the Omnibus Crime Control and Safe Streets Act, which aligns with Fourth Amendment requirements. 

The court emphasizes that affidavits should be evaluated holistically, applying a commonsense approach rather than a hypertechnical analysis. It rejects the appellants' request to dissect the affidavit paragraph-by-paragraph, asserting that the overall evidence was sufficient to support a reasonable belief that criminal evidence would be obtained. The reviewing court must ensure the magistrate had a substantial basis for concluding probable cause existed, affording deference to the magistrate's determination. After thorough review, the court finds no clear error in the district court's decision regarding probable cause.

The affidavit establishes probable cause that the Leisure group was involved in racketeering, supported by a series of violent incidents including multiple murders and attempted murders from 1979 to 1981, notably involving car bombings and shootings. The interconnectedness of the victims and the use of car bombs suggest a retaliatory motive. Nine reliable confidential informants provide corroborative details regarding the Leisure group's history, their links to various murders, and attempts to control labor unions. Additionally, law enforcement's independent investigations, including telephone records and physical evidence, reinforce the informants' information. Appellants argue that the affidavit lacks substance and relies on uncorroborated informants, but the court asserts that such scrutiny is overly technical and not warranted. The Supreme Court's precedent emphasizes the importance of evaluating the totality of the circumstances rather than isolated facts. The court concludes that the affidavit adequately demonstrates probable cause for RICO activities by the Leisure group and that the LN.P office was a known meeting point for planning such activities, validating the district court's findings on probable cause.

Congress intended Title III to restrict electronic surveillance to specific offenses outlined in 18 U.S.C. Sec. 2516, and the appellants argue that the affidavit did not adequately allege a crime listed in that section. However, RICO violations are included as offenses eligible for electronic surveillance. The appellants claim the affidavit failed to establish a distinct 'enterprise' necessary for a RICO violation, as it did not show continuity and common purpose among participants. Despite this, the affidavit contained ample evidence indicating that the Leisure group operated as an enterprise aiming to control the St. Louis underworld through intimidation.

The appellants also contest the necessity of the surveillance, arguing that the affidavit did not sufficiently prove the government’s need for electronic monitoring. Title III mandates that applications for surveillance must detail any previous investigative techniques attempted and their outcomes. The affidavit indicated that conventional methods—such as physical surveillance and the use of informants—were ineffective or too dangerous, which was deemed adequate by the court.

Concerns were raised regarding the specificity of the surveillance order, as Title III requires a particular description of the communications to be intercepted. While the court recognizes the challenge of predicting specific content of conversations prior to interception, it also acknowledges that overly broad descriptions could hinder the effectiveness of Title III. Given the broad nature of RICO conspiracies, the court concluded that requiring extreme particularity in describing potential communications would undermine the statute's purpose.

The affidavit detailed the communications to be intercepted, specifically focusing on oral communications related to planned murders, attempted murders, and conspiratorial agreements involving employees or associates of the enterprise. It aimed to identify individuals involved in these acts, their associations, and operational details of the enterprise. The application was deemed to provide sufficient particularity under 18 U.S.C. Sec. 2518(4)(c) given the severity of the offenses in question.

Appellants challenged the surveillance application, claiming that the government used false information and omitted material exculpatory details, which warranted a Franks hearing. According to the Franks standard, a defendant must allege that the affiant made deliberately false statements or acted with reckless disregard for the truth, providing supporting evidence. The district court, however, found that the appellants' allegations regarding the relationships and details of certain individuals were peripheral and did not undermine the affidavit's establishment of probable cause. 

Additionally, the appellants' claim that the omission of a confidential informant's identity warranted a Franks hearing was dismissed as speculative and unsupported. Consequently, the court upheld the validity of the initial surveillance order and denied the motion to suppress evidence obtained from it, ruling that subsequent extensions of the surveillance order were also valid and not subject to suppression as the 'fruit of the poisonous tree.'

Appellants challenge the application and affidavit for electronic surveillance of Paul Leisure's home on three grounds: (1) the affidavit lacked probable cause; (2) it did not demonstrate the necessity for electronic surveillance; and (3) it included reckless and deliberate falsehoods and omissions that warranted a Franks hearing.

Regarding probable cause, the court reviewed whether the magistrate had a substantial basis for concluding that probable cause existed, referencing Illinois v. Gates. The surveillance order, granted on April 23, 1982, was supported by two months of recorded conversations at the LN.P office, which established probable cause for the Leisure group's involvement in RICO activities. The affidavit included corroborated information from multiple confidential sources about criminal discussions at Leisure's home and a specific upcoming meeting between Paul Leisure and Sorkis Webbe, Sr. Physical surveillance confirmed visits to Leisure's home by known associates, which collectively established probable cause for the belief that evidence of criminality would be obtained from the surveillance.

On the necessity of electronic surveillance, appellants argued that prior evidence of crime uncovered by LN.P surveillance precluded further investigation. The court rejected this claim, asserting that discovering evidence does not limit the government's ability to expand its investigation to fully uncover a criminal enterprise.

Lastly, appellants contended that the affidavit was flawed due to omissions and false statements, arguing for a Franks hearing. They cited two omissions: Webbe's legitimate relationship with Leisure and Leisure's intoxication during a conversation. However, the court found that appellants did not prove the government was aware of these facts, and even if they were, the omissions were not material enough to undermine the affidavit's established probable cause.

Appellants contend that the affidavit used to justify electronic surveillance misled the magistrate into thinking that prior LN.P electronic surveillance had failed. However, the government had relied on the successful results of that surveillance to establish probable cause for criminal activity at Paul Leisure's residence. The district court's denial of the appellants' motion to suppress evidence from this surveillance is upheld.

Additionally, appellants argue that their convictions should be reversed due to prosecutorial misconduct involving both federal and state attorneys. David Leisure, a defendant in state proceedings, filed a motion to dismiss the federal indictment based on claims that federal prosecutors violated his procedural rights in state court. This argument is rejected, as the district court determined that such relief should be sought in state court.

Leisure also alleged that federal agents interviewed a potential defense witness without the witness's attorney present, but this claim is dismissed because Leisure lacked standing to assert a third party's Sixth Amendment rights. In a supplemental motion, Leisure accused federal agents of consulting individuals, including former defendants, to gather confidential defense strategies. Although a hearing was held, key witnesses did not appear due to witness protection status, and the magistrate concluded their absence did not hinder the appellants' case.

To succeed on this allegation, appellants must demonstrate actual government acquisition of confidential defense information and show significant prejudice or threat thereof. The magistrate found no evidence that any confidential defense strategy was improperly shared with federal prosecutors, leading to the conclusion that the allegations were unsubstantiated.

The district court upheld the magistrate's recommendation to deny the appellants' motion to dismiss based on claims of prosecutorial misconduct, concluding that the appellants failed to prove their allegations. During the trial, attorney Irl Baris, representing David Leisure, was restricted from cross-examining former clients (witnesses Prater, Broderick, and Ramo) regarding privileged information due to attorney-client confidentiality. The court had informed Leisure of this restriction six months prior to trial, and Baris did not present an offer of proof to clarify what evidence he sought to introduce. Consequently, the court found no abuse of discretion in limiting Baris's cross-examination.

Additionally, the appellants contended that their convictions should be overturned because the government did not provide handwritten notes taken during initial witness interviews, which were destroyed after being summarized into typewritten notes. The typewritten summaries were disclosed under the Jencks Act, but the handwritten notes were shredded beforehand. The court assessed the Jencks Act challenge by evaluating the good faith of the agents in destroying the notes, the potential material differences between the handwritten and typewritten notes, and whether the destruction of the notes prejudiced the appellants.

Appellants in United States v. Hoppe did not present evidence to show that the government's destruction of handwritten notes was done in bad faith or that the typewritten notes materially differed from the originals. Consequently, the court found no violation of the Jencks Act and ruled that the appellants were not prejudiced by the lack of handwritten notes. Additionally, the appellants claimed a Jencks Act violation for not receiving a statement from Kenneth Loewe, who confessed involvement in a car bombing but did not implicate the appellants. The court deemed this statement insufficiently exculpatory to merit a new trial. 

The admissibility of tape-recorded conversations between Paul Leisure and his associates was also challenged, with appellants arguing the statements did not further the conspiracy. The court applied a broad interpretation of the "in furtherance" requirement and found that the conversations, while discussing past and future plans, contributed to the conspiracy's objectives. Therefore, the court upheld their admission under the hearsay exception for co-conspirators. 

Lastly, appellants contended that the district court erred by not granting a mistrial when Fred Prater mentioned David Leisure's state indictment related to the Faheen bombing. This reference was intended to provide context for a subsequent discussion about Loewe's potential cooperation with authorities. Although the mention of the indictment could be seen as prejudicial, the court concluded that any potential error was harmless and did not necessitate a mistrial.

Prater provided testimony implicating David Leisure in the murder of Faheen, noting admissions from Leisure and his associates. This testimony was supported by additional witnesses and recorded conversations, establishing overwhelming evidence of Leisure's involvement. 

The appellants argued that the district court incorrectly denied a mistrial motion from Charles Loewe following government cross-examination of James Curtis, Loewe's alibi witness. Prater had previously testified that Loewe supplied a remote control device used in a bombing, which he obtained from a friend who bought it at a hobby store. During cross-examination, the prosecutor asked Curtis whether he was referred to as "Pigface" and if he had purchased remote control devices for Loewe, a question that had no prior basis in testimony. Defense counsel objected, and the question was retracted the following day, with the court instructing the jury to disregard it. Loewe subsequently rebutted the implication by denying he sent Curtis for such purchases.

The district court's discretion in handling potentially prejudicial questions was upheld, as the question was withdrawn before being answered, and a curative instruction was issued. The court found that the potential prejudice from the question was far outweighed by the strong evidence against Loewe, including Prater's direct testimony and corroborating statements. Ultimately, the court concluded that the jury would have reached the same verdict without the questioned inquiry, affirming the denial of the mistrial motion. The appellants also questioned the sufficiency of the RICO evidence against them.

Under the Racketeer Influenced and Corrupt Organizations Act (RICO), it is a crime for individuals associated with an enterprise engaged in interstate or foreign commerce to participate in the enterprise's affairs through racketeering activity or unlawful debt collection. The existence of such an enterprise is a separate element that the government must prove. The court has established that a RICO enterprise must demonstrate three characteristics: a common purpose, continuity of structure and personnel, and an ascertainable structure distinct from the racketeering activities. 

In this case, the jury found that the Leisure group exhibited these characteristics. They acted with a shared purpose to dominate local labor unions and engaged in violent measures against opponents. The group's structure was consistent, led by Paul Leisure, with members actively participating in the criminal activities. The Leisure group also had a distinct structure based on familial and social ties that supported their objectives, separate from the crimes committed. The evidence indicated that the group was not merely a temporary alliance for criminal activity but a cohesive enterprise with a defined organizational pattern. 

Additionally, Paul Leisure, David Leisure, and Steven Wougamon contested the sufficiency of evidence related to their obstruction of justice convictions under 18 U.S.C. § 1510, which remains to be evaluated.

Appellants were convicted of obstructing justice by murdering Michael Kornhardt on July 31, 1982, to prevent him from communicating information about RICO violations to federal officials. They argued that there was no evidence of an ongoing federal investigation or that Kornhardt had communicated or was about to communicate with agents. However, it was sufficient under 18 U.S.C. § 1510 that the appellants believed Kornhardt might provide information to federal officials. Evidence indicated they feared Kornhardt would testify against them, reinforced by statements from Kornhardt’s friend, Wougamon, who warned that Kornhardt would speak to the FBI after his arrest. This evidence supported the obstruction of justice convictions for Anthony Leisure, Paul Leisure, Charles Loewe, David Leisure, and Stephen Wougamon.

Wougamon faced additional charges in Count IV for obstructing justice through threats against Innes Anderson on November 9, 1982. However, a statutory amendment effective October 12, 1982, removed the terms related to intimidation from 18 U.S.C. § 1510, rendering his actions under that statute no longer prosecutable. The government contended that Wougamon's conduct fell under a different statute, 18 U.S.C. § 1512, which prohibits using intimidation or threats. Thus, Wougamon's pretrial motion to dismiss Count IV was relevant to the interpretation of the applicable law following the amendment.

Hindering or delaying communication to law enforcement regarding a federal offense is punishable under 18 U.S.C. Sec. 1512(b). The district court accepted the government’s position, removing the reference to 18 U.S.C. Sec. 1510 from Count IV of the indictment and instructed the jury on Sec. 1512 despite defense objections. Wougamon contends that his conviction for obstruction of justice must be overturned because he was convicted of an unindicted crime. This position is supported by established federal law that prohibits amending an indictment's substance without resubmission to the grand jury, except for minor formal changes. Historical precedents emphasize the importance of grand jury indictments as a safeguard for defendants' rights. The court's ability to modify indictments could undermine the constitutional protections intended to limit prosecution to charges approved by a grand jury. While formal amendments are permissible, substantive changes are not, as affirmed in multiple cases.

The amendment to the indictment significantly altered its substance, changing the charge against Wougamon from a violation of 18 U.S.C. Sec. 1510 to a violation of 18 U.S.C. Sec. 1512. The key difference lies in the mens rea required: Sec. 1510 necessitates a "willfully" standard, while Sec. 1512 requires a "knowingly" standard. Although these terms are related, they encompass different elements of intent, with "knowingly" requiring that a defendant acted with knowledge and "willfully" necessitating deliberate action, potentially involving a higher standard of intent.

In this case, the original indictment under Sec. 1510 only charged "endeavoring" to obstruct communication, whereas the conviction under Sec. 1512 involved "attempting" to obstruct communication. Legal precedents indicate that "endeavor" implies a lesser degree of engagement than "attempt." Courts have interpreted "endeavor" as encompassing efforts that do not meet the technical requirements of an "attempt," suggesting a lower threshold for culpability. Therefore, the distinction between "endeavor" and "attempt" raises critical questions regarding the sufficiency of proof required for the respective charges, with "endeavor" being less stringent than "attempt."

The interpretation of "endeavor" in Section 1503 is relevant to Section 1510, leading to the conclusion that the grand jury required less evidence for an indictment under Section 1510 than the petite jury needed for a conviction under Section 1512. Consequently, the indictment amendment was impermissible, as Wougamon's conviction could not be substantiated by a grand jury indictment. Therefore, his conviction on Count IV is reversed and dismissed without prejudice, allowing the government to resubmit the charge to the grand jury.

Wougamon also contests his substantive and conspiracy RICO convictions following the indictment amendment from 18 U.S.C. Section 1510 to Section 1512. For a substantive RICO conviction, the government must prove a "pattern of racketeering activity," defined as at least two acts. The indictment alleged Wougamon committed two acts: the murder of Michael Kornhardt (state law violation) and a threat to Innes Anderson (under Section 1510). However, since the amended indictment did not properly state a violation of Section 1510 and instead referenced Section 1512—which was not classified as a racketeering act during Wougamon's trial—the indictment failed to allege the necessary two acts, resulting in the reversal of Count I RICO conviction.

Conversely, Count II RICO conspiracy conviction is upheld, aligning with the majority circuit view that a RICO conspiracy conviction only requires an agreement to join the conspiracy, not to commit two racketeering acts. Evidence indicates Wougamon agreed to participate in the Leisure RICO enterprise with awareness of other members committing at least two acts.

In conclusion, convictions for Anthony Leisure, Charles Loewe, David Leisure, and Paul Leisure are affirmed. Wougamon's convictions on Counts II and III are affirmed, while those on Counts I and IV are reversed, and his sentences on Counts II and III are vacated, with a remand for resentencing.

The United States District Judge for the Eastern District of Missouri, Edward L. Filippine, noted that a jury could not reach a verdict on Counts I, II, and III for defendant Robert Carbaugh, who later pled guilty to a RICO conspiracy charge. Anthony, David, and Paul Leisure received additional sentences for the murder of James A. Michaels, Sr., which was a predicate act in the RICO case—Anthony and Paul received life sentences without parole, while David was sentenced to death. Charles Loewe is awaiting trial for the same murder.

Robert Carbaugh, John Ramo, and Joe Broderick were indicted, with Ramo and Broderick entering guilty pleas for cooperation after the indictment. The affidavit in question cited violations under 18 U.S.C. Secs. 844(d), (i), and 372 regarding the interstate transportation of explosives, but the court focused on the sufficiency of the RICO allegations.

Further details regarding the relationship between Paul Leisure and Sorkis Webbe, Sr. are referenced in a previous case. The court dismissed the appellants' argument about the timing of a scheduled meeting between Webbe, Sr. and Paul Leisure, stating that it did not affect the probable cause determination at the time of the application.

Given the violent tendencies of the appellants, the court found it appropriate to permit examination of protected witnesses through interrogatories, though it did not rule on the appropriateness of this practice in other contexts. The court also noted that it would not address the issue of attorney-client privilege waiver due to Baris's failure to present an offer of proof, acknowledging that the witnesses were thoroughly cross-examined.

The judge expressed concern over the practice of shredding initial interview notes after preparing typewritten summaries, warning that it could hinder a defendant’s ability to access potentially exculpatory evidence. The judge suggested retaining handwritten notes for trial use, citing precedent that emphasizes the importance of maintaining evidence that could be beneficial to the defense.

Shredding handwritten notes does not currently violate the Jencks Act, but future practices may prompt a revised standard of review. The government's claim that the trial context was less prejudicial due to a witness's non-response is dismissed, as rhetorical questions lacking foundation are unacceptable. The district court mistakenly included a now-irrelevant essential element of a Section 1510 offense in the jury instructions for a Section 1512 offense. The text references the parallel provisions of 18 U.S.C. Sec. 1503 regarding attempts to corruptly influence or intimidate. Additionally, 18 U.S.C. Sec. 1512 was incorporated into the racketeering activity definition by the 1986 Criminal Law and Procedure Technical Amendments Act. Case law citations include several appeals and denials from various circuits, noting a minority position on the issue. Finally, due to the reversal of certain convictions, the court finds it unnecessary to evaluate a motion for a new trial based on newly discovered evidence, as it would not likely result in an acquittal on the remaining charges.