United States v. Joseph H. Fleischli

Citations: 305 F.3d 643; 2002 WL 31029282Docket: 01-2703

Court: Court of Appeals for the Seventh Circuit; October 23, 2002; Federal Appellate Court

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Joseph Fleischli was convicted on multiple counts related to firearms offenses, including possession and manufacture of machine guns, and possession of firearms as a felon, leading to a 120-month prison sentence and three years of supervised release. Prior to his indictment, Fleischli had four felony convictions, two for firearms-related offenses and two for drug offenses. In 1998, an informant reported to the ATF that Fleischli possessed a mini-gun and had taken it to Missouri for firing. An associate of Fleischli, Donald Gibbs, made a request to the Macoupin County Sheriff's Department for a letter to the Treasury Department to facilitate a demonstration of a Steyr machine gun, linking Fleischli to attempts to acquire firearms despite his felony record. The ATF, already aware of Fleischli's prior attempts to obtain a federal firearms license and explosives privileges, initiated an investigation. Recorded phone calls between Deputy Malone and Fleischli revealed discussions about Fleischli's firearms business and ownership of machine guns. A planned demonstration of the mini-gun on August 11, 1998, resulted in the ATF seizing the weapon. The court affirmed Fleischli's conviction and sentence after he appealed on various legal grounds.

Fleischli claimed ownership of a minigun belonging to SAS, a company he stated was run by Tobias, while asserting his position as an employee. He admitted to possessing other machine guns at Otto American Boiler and firearms at his home. After being informed by an ATF agent that he couldn't secure a federal firearms license in his wife’s name, he opted to use his father-in-law’s name instead. During investigations, Tobias contended that SAS was Fleischli's concept and that he merely partnered with him, while asserting that Fleischli purchased all firearms registered to SAS. Medlock distanced himself from responsibility, stating he was asked to be secretary/treasurer of SAS without pay or active involvement.

On the same day, ATF agents executed search warrants at Otto American Boiler, SAS, and Fleischli’s residence, recovering around seventy-five firearms, including machine guns and explosive devices. Registration forms related to the guns were also found in Fleischli's office. Following these seizures, evidence regarding a prior shooting demonstration in Missouri was collected, leading to a six-count indictment against Fleischli. He moved to suppress the seized evidence and to dismiss the indictment, arguing the search warrants lacked probable cause due to the unreliability of informant Danny Dapron, who claimed to have seen the guns on February 1, 1998, while actually being in jail at that time. The court denied the motion to suppress, citing multiple sources supporting the warrant, including corroborative statements from Fleischli himself during recorded conversations. The district court also rejected Fleischli’s dismissal arguments. A jury convicted Fleischli on all counts, sentencing him to 120 months' imprisonment with a two-level sentence increase for his managerial role in the illegal operation. Fleischli is now appealing the conviction.

Fleischli challenges his conviction with eleven points and his sentence, totaling twelve challenges. His key arguments include: 

1. **Lack of Probable Cause**: He claims the warrants for searching his home and business on August 11, 1998, lacked probable cause, asserting that the affidavit by ATF Agent Robert Schmidt relied on information from an unreliable informant, Danny Lee Dapron.
   
2. **Exemption from Firearm Regulations**: Fleischli argues he is exempt from section 922(o)(1) due to section 922(o)(2) as an authorized agent of a licensed firearms manufacturer.

3. **Commerce Clause Issues**: He contends that section 922(o)(1) and section 922(g)(1) exceed Congressional authority under the Commerce Clause, particularly regarding his possession of firearms in his home and business.

4. **Possession and Interstate Commerce**: He argues the government failed to prove that his possession of firearms substantially affected interstate commerce.

5. **Manufacture of Machine Guns**: Fleischli asserts that section 5862 does not apply to his actions as he was acting as an agent of a licensed manufacturer.

6. **Definition of Machine Gun**: He claims that the minigun does not qualify as a machine gun under section 5845, as it does not fire automatically.

7. **Vagueness of Law**: He argues that the term 'similar device' in the definition of 'destructive device' in section 5845 is unconstitutionally vague.

8. **Destructive Devices Classification**: He states that the four alleged destructive devices seized were used only as fireworks and thus do not fall under section 5845(f).

9. **Transportation of Firearms**: Fleischli contends he cannot be convicted for transporting firearms under section 922(g)(1) since he was merely a passenger in the vehicle.

10. **Admissibility of Evidence**: He claims that evidence of his firearm possession in Missouri violated the Sixth Amendment, requiring trial in the state and district where the crime occurred.

11. **Sentencing Enhancement**: He argues that a two-level enhancement for his role in the offense was erroneous due to the absence of other participants.

Fleischli maintains that the warrants were improperly issued, asserting that Dapron was unreliable and that his information was stale, leading to a lack of probable cause and a request to suppress the evidence obtained from the searches.

The court conducts a de novo review of the district court's finding of probable cause for a search warrant, while historical facts are reviewed for clear error, giving weight to local law enforcement's inferences. The review focuses on Special Agent Schmidt's detailed affidavit, which includes corroborated information from informant Dapron, a long-time family friend of Fleischli. Dapron's knowledge about Fleischli’s family connections, firearms, and safe storage locations enhances the reliability of the affidavit. This information is further supported by Fleischli's own statements to Deputy Malone, confirming his participation in shooting events and ownership of specific firearms. Additional corroboration comes from Delmar Tobias, who indicated that a minigun was stored in Fleischli's safe. The court notes that when an affidavit includes an informant's tip, the issuing judge must evaluate the totality of circumstances to ascertain probable cause, which is defined as a reasonable belief that evidence at the search location will result in arrest or conviction.

Probable cause exceeds mere suspicion but does not require absolute certainty. Special Agent Schmidt's affidavit contains reliable information supporting probable cause, drawing from multiple sources, including statements from Dapron and Fleischli, a confidential informant, and law enforcement investigators. Dapron, despite having a criminal history and minor inconsistencies, displayed detailed knowledge of Fleischli's possessions, corroborated by others, which justified the warrant for a search of Fleischli’s premises. Fleischli was convicted of two counts of machine gun possession under 18 U.S.C. § 922(o)(1) and argues on appeal that he is exempt under § 922(o)(2) due to his actions being authorized by a licensed manufacturer. He claims his corporate status allows him to evade liability for possessing machine guns despite being a felon. However, the court interprets that a felon cannot escape prosecution for firearm possession through corporate protection, deeming Fleischli's defense insufficient.

SAS would not have received a firearms manufacturing or dealing license if it had disclosed its association with a convicted felon, as per 18 U.S.C. 923(d)(1). The statute stipulates that an applicant, including those representing corporations, cannot be prohibited from receiving firearms under sections 922(g) and (n). If Fleischli had presented himself as SAS's president during the licensing process, the application would have been denied. The law is designed to prevent convicted felons from using corporate structures to access strictly regulated firearms, such as machine guns. Furthermore, legal precedents establish that an agent cannot avoid criminal liability simply because their principal authorized their actions, as seen in cases like McNamara v. Johnston and United States v. Floyd. Therefore, a convicted felon cannot legitimately acquire access to firearms by creating a sham corporation.

Fleischli also argues that Congress overstepped its authority under the Commerce Clause with section 922(o)(1), although he acknowledges that prior rulings, such as United States v. Kenney, have already upheld its validity. He claims Kenney conflicts with the Supreme Court’s decision in United States v. Morrison, which invalidated a federal civil remedy for gender-motivated violence due to its lack of substantial effect on interstate commerce. However, the court finds no conflict between Morrison and the validity of section 922(o)(1), reaffirming its previous analysis in Kenney and upholding section 922(o) against similar challenges. Consequently, Fleischli's convictions on Counts 1 and 3 are affirmed.

Fleischli contests his conviction under 18 U.S.C. § 922(g)(1), asserting that the government should have been required to demonstrate that his firearm possession significantly impacted interstate commerce. He acknowledges that this argument has been previously rejected, citing Gillespie, 185 F.3d at 705, and claims that the ruling cannot stand following Jones v. United States, 529 U.S. 848 (2000). However, the court reaffirms its prior stance, noting that Fleischli has provided no compelling reason to reconsider, referencing cases such as United States v. Mitchell and United States v. Wesela, which established that possession of firearms previously in interstate commerce satisfies the Commerce Clause requirement.

Fleischli also argues that § 922(g)(1) does not apply to firearms kept in his home or business, asserting that such possession is not commercial activity and thus exceeds Congress's powers under the Commerce Clause. This argument contradicts his earlier claim that he did not personally possess the firearms, but held them as an agent of a licensed manufacturer, SAS, suggesting that in that role, he would acknowledge the impact on commerce. The court views this as a variation of his previous argument regarding the necessity of proving a substantial effect on interstate commerce.

Lastly, Fleischli challenges his conviction under 26 U.S.C. § 5822, likely intending to reference § 5861(f), which makes it unlawful to manufacture firearms in violation of the law. He argues that § 5822, which outlines the application process for firearm manufacturing permits, does not apply to him as he was operating under SAS, a licensed manufacturer. He contends that since SAS was licensed under § 5802, it was exempt from the requirements of § 5822, and therefore, his actions should not be prosecutable under that section.

Fleischli's argument that he is not subject to section 922(o)(1) due to his role as an agent of a licensed manufacturer is rejected. The court reasons that SAS would not have obtained a license if it had revealed Fleischli's status as a convicted felon. Additionally, he cannot use a corporate structure to engage in activities he is prohibited from doing as an individual, which would create a loophole allowing felons to access firearms through corporations. This interpretation contradicts the intent of Congress to prevent firearm access to convicted felons, as indicated by the statutory framework.

Fleischli also challenges his convictions for possessing and manufacturing a machine gun, arguing that his minigun does not meet the statutory definition of a machine gun under 26 U.S.C. 5845(b) because it does not fire automatically and lacks a trigger. He defines automatic firing in a way that suggests only certain mechanisms qualify, drawing from the definition of semiautomatic weapons. He further likens his minigun to a Gatling gun, which is not classified as a machine gun according to an IRS ruling, and claims it operates via an electrical switch rather than a trigger. However, the Supreme Court's interpretation of "automatic" and "semiautomatic" weapons clarifies that a machine gun fires repeatedly with a single pull of the trigger, which undermines Fleischli's arguments.

Fleischli argues that the Court's interpretation of 'automatic' does not apply to his minigun, which he claims does not qualify as a machine gun under the National Firearms Act because it is activated by an electronic switch rather than a traditional trigger. The Court counters that the term 'trigger' should be broadly understood as any mechanism that initiates a firing sequence, including an electronic switch, thereby classifying the minigun as a machine gun since it fires continuously until the switch is turned off or ammunition is depleted. The Court dismisses Fleischli's narrow interpretation as overly technical and potentially allowing circumvention of firearm regulations.

Additionally, the Court addresses Fleischli's conviction for possessing unregistered firearms, specifically under 26 U.S.C. 5845(f), which defines 'destructive device' to include various explosive items and 'similar devices.' Fleischli contends that the term 'similar' creates vagueness, making it unclear how closely a device must resemble the listed items to fall under the statute. He argues this vagueness renders the statute unconstitutional. However, the Court maintains that the definitions and precedents provide sufficient clarity regarding what constitutes a destructive device.

Three circuits have determined that the statute in question is not unconstitutionally vague, as established in cases such as United States v. Markley, United States v. Ross, and United States v. Morningstar. These courts concluded that a person of ordinary intelligence would understand the statute to encompass any combination of parts intended for use as a bomb or weapon. The case involves Fleischli, who argues that the devices he possessed were intended as fireworks, not weapons. He contends that the jury was not instructed that the government must prove the devices were designed or redesigned for weapon use. The jury was informed that if a device's design indicates it lacks legitimate social or commercial purpose, the defendant's intent is irrelevant. Conversely, if a device could serve both legitimate and illegitimate purposes, the jury could consider the defendant’s intent. This instruction was deemed correct, allowing Fleischli to argue his case, but the jury did not find his argument credible.

Fleischli also challenges the sufficiency of the evidence, asserting the government failed to prove the devices were weaponized. Evidence presented included four assembled devices containing blasting caps, PETN, and fuses, which could cause significant explosions. An ATF expert testified that the assembled devices had no known commercial use as fireworks, reinforcing the government's position. This evidence sufficiently supported the conviction under section 5861(d). The court found no errors in the jury instructions or the evaluation of the evidence presented.

Fleischli was convicted of violating 18 U.S.C. 922(g)(1) for transporting firearms in interstate commerce. The district court instructed the jury that a person "transports" a firearm when they transport or cause the firearm to be transported in a vehicle. The case involved the transport of a minigun from Illinois to Missouri in 1998, where the gun was towed in a trailer behind a van driven by Kevin Traeger, in which Fleischli was a passenger. Fleischli argued, citing *Muscarello v. United States*, that only the driver could be legally liable for transportation, asserting he did not "transport" the gun as a mere passenger. He acknowledged, however, that he agreed to bring the minigun to Missouri, oversaw its loading and unloading, and demonstrated it at a shooting event. 

The *Muscarello* decision clarified that "carry" can include transporting firearms in a vehicle and that "transport" encompasses a broader range of activities. The court rejected the notion that a distinction between passenger and driver exists in the statute's language. It emphasized personal agency and possession as key factors in determining the meaning of "carry," noting that Fleischli had significant involvement in the transport of the gun. The court concluded that the evidence supported Fleischli's role in transporting the gun, aligning with the district court's instruction that he could be found liable for causing the firearm to be transported.

Additionally, despite Fleischli's objections, the government presented evidence of his possession of firearms in Missouri, which he argued violated his Sixth Amendment right to be tried in the district where the crime occurred. However, possession is a continuing offense that can be prosecuted in any district where it occurs, as established in preceding case law.

Fleischli was properly charged with possession of a firearm in both Illinois and Missouri, and the court correctly admitted evidence of his gun-related activities in Missouri. He faced additional charges for transporting a firearm from Illinois to Missouri, with evidence of his possession in Missouri being pertinent to this charge. Fleischli challenged his sentence, arguing that the district court mistakenly applied a two-level enhancement under U.S.S.G. 3B1.1(c) for his role in the offense. He claimed this enhancement should only apply when more than one person is criminally responsible for the offense. The definition of "participant" includes anyone criminally responsible, regardless of conviction status, and since he was the sole responsible party, he contended the enhancement was improperly applied.

However, the district court recognized that the enhancement under section 3B1.1(c) is applicable only with other participants. Instead, the court opted for an upward departure based on Application Note 2, which permits such a departure if the defendant managed the operations of a criminal organization without having other participants. The court cited evidence from the trial indicating that Fleischli orchestrated illegal weapons manufacturing, arranged sales, and used others to conduct transactions on his behalf. The court concluded that these actions justified the upward departure. 

The decision to depart upward was reviewed for abuse of discretion, and it was determined that there was none. The court found that Fleischli established a sham corporation to circumvent legal firearm acquisition and directed illegal activities involving firearms. Consequently, the court affirmed both the conviction and the sentence.