United States v. Gotti
459 F.3d 296, 180 L.R.R.M. (BNA) 2199 (2006)
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Rule of Law:
Extortion under the Hobbs Act, 18 U.S.C. § 1951, includes the obtaining of intangible property rights, provided the defendant's actions go beyond merely depriving the victim of the right and include an attempt to acquire and exercise, transfer, or sell that right for the defendant's own benefit.
Facts:
- Anthony Ciccone, a captain in the Gambino Organized Crime Family, exercised control over the International Longshoremen’s Association (ILA) by dictating to union officials, such as Local 1814 President Frank Scollo, how to vote in elections and manage union affairs.
- Through their control over the ILA, members of the Gambino Family directed union trustees on the ILA's national health plan (MILA) to award a lucrative pharmaceutical contract to GPP/VIP, a company that paid kickbacks to Ciccone.
- Ciccone and Richard Bondi used intimidation to control officials of another ILA chapter, Local 1. Ciccone ordered another associate to take Bondi to the home of Local 1 delegate Louis Saccenti to threaten him into compliance.
- Ciccone extorted regular cash payments from Carmine Ragucci, owner of the Howland Hook Container Terminal, and from Frank Molfetta, a trucking company owner, by demanding they pay him instead of their previous business partners.
- Ciccone and his associates attempted to extort film actor Steven Seagal by demanding he enter into a business relationship with a Gambino associate, Jules Nasso, and pay them $150,000 for every movie he made.
- Ciccone and Bondi forced Eduard Alayev, a Brooklyn café owner, to install their illegal gambling machines in his business and later controlled the sale of the café, taking a portion of the proceeds for themselves.
- Proceeds from these and other illegal activities were collected by lower-ranking members of the Gambino Family and delivered as regular cash "tribute" payments up the hierarchy to Peter Gotti, the acting boss. Richard G. Gotti acted as an intermediary in collecting these payments.
Procedural Posture:
- Peter Gotti, Richard G. Gotti, Anthony Ciccone, Richard Bondi, and others were charged in a 68-count indictment in the United States District Court for the Eastern District of New York, a federal trial court.
- Following a jury trial, the defendants-appellants were convicted on numerous counts, including racketeering, money laundering, and various extortion-related offenses under the Hobbs Act.
- The district court entered judgments of conviction and sentenced the defendants to terms of imprisonment.
- The defendants-appellants, Peter Gotti, Richard G. Gotti, Anthony Ciccone, and Richard Bondi, appealed their convictions and sentences to the United States Court of Appeals for the Second Circuit.
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Issue:
Does the Hobbs Act, following the Supreme Court's decision in Scheidler v. National Organization for Women, Inc., permit a conviction for extortion of an intangible property right when the defendant's goal is not merely to deprive the victim of the right, but to acquire and exercise that right for themselves?
Opinions:
Majority - Katzmann, Circuit Judge.
No. The Hobbs Act, following Scheidler v. National Organization for Women, Inc. (Scheidler II), permits a conviction for extortion of an intangible property right when the defendant seeks to acquire and exercise that right. Scheidler II did not invalidate extortion charges based on intangible property; it merely clarified the meaning of 'obtaining' property under the statute. The Supreme Court distinguished between coercion (merely depriving a victim of a right, as when protestors shut down a clinic) and extortion (depriving a victim of a right in order to acquire it for oneself). The key difference is the defendant's acquisitive intent. In this case, the Gambino Family defendants did not simply seek to deprive union members of their democratic rights or business owners of their decision-making rights. Instead, they sought to acquire and exercise those rights for themselves to control union contracts, jobs, and business profits, which constitutes 'obtaining' property under the Hobbs Act.
Analysis:
This decision provides critical clarification on the scope of the Hobbs Act in the wake of the Supreme Court's ruling in Scheidler II. It solidifies the viability of using extortion charges to prosecute organized crime's interference with intangible rights, such as union governance and business operations. By establishing a clear distinction between purely coercive acts and acquisitive extortion, the court provides a durable framework for future prosecutions. This precedent ensures that schemes aimed at taking over the control and economic benefit of an entity, rather than simply shutting it down, remain punishable as extortion.
