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UNITED STATES v. CATALDO CALEGRO DE LUTRO

January 14, 1970

UNITED STATES of America,
v.
Cataldo CALEGRO DE LUTRO and Stanley Loren, Defendants


Mansfield, District Judge.


The opinion of the court was delivered by: MANSFIELD

MANSFIELD, District Judge.

Defendants are charged in a three-count indictment with conspiracy (18 U.S.C. § 371) to violate the so-called "loan sharking" law, 18 U.S.C. §§ 891-894 (use of extortion to collect extensions of credit) and the "Hobbs Act," 18 U.S.C. § 1951 (obstructing commerce through use of force or violence) and with substantive violations of the foregoing statutes. They move for dismissal of the indictment, discovery of defendants' statements, striking of aliases alleged in the indictment, inspection of fingerprints, and a bill of particulars. To the extent that defendants' motion to dismiss is based upon failure of the indictment to name or identify the victims of the alleged extortion, see United States v. Agone, 302 F. Supp. 1258 (July 22, 1969) (decision by Frankel, J.), the issue has been rendered moot by the grand jury's filing of a new indictment in which the victims are named or identified.

 Motion to Dismiss Counts 1 and 2

 Title 18 U.S.C. § 894(a), the constitutionality of which is attacked by defendants, provides:

 
"(a) Whoever knowingly participates in any way, or conspires to do so, in the use of any extortionate means
 
(1) to collect or attempt to collect any extension of credit, or
 
(2) to punish any person for the nonrepayment thereof, shall be fined not more than $10,000 or imprisoned not more than 20 years, or both."

 Count 2 of the indictment charges that on May 12, 1969 defendants unlawfully participated in use of extortionate means, including threats of violence, to collect extensions of credit and to punish certain named persons for non-payment of extensions of credit. Count 1 charges a conspiracy to do so and to violate the Hobbs Act, 18 U.S.C. § 1951.

 Defendants' principal contention is that § 894 must be held unconstitutional for the reason that it exceeds the power of Congress to regulate trade pursuant to the Commerce and Bankruptcy clauses of the Constitution. More specifically defendants first argue that the language of the statute is too broad and fails to limit itself to prohibition of conduct affecting interstate commerce, with the result that it prohibits not only interstate conduct but intrastate conduct, the regulation of which is reserved to the states under the Tenth Amendment. Whatever may have been thought of this argument 40 years ago, it has long since been rejected and it no longer represents a viable basis of attack. It is now well settled that Congress, in the exercise of the power granted to it by the Constitution to "regulate commerce with foreign Nations and among the several States," Constitution, Art. I, § 8, may regulate intrastate activities affecting interstate commerce even where their impact on the latter is minimal. Maryland v. Wirtz, 392 U.S. 183, 88 S. Ct. 2017, 20 L. Ed. 2d 1020 (1968); Heart of Atlanta Motel v. United States, 379 U.S. 241, 85 S. Ct. 348, 13 L. Ed. 2d 258 (1964); Katzenbach v. McClung, 379 U.S. 294, 85 S. Ct. 377, 13 L. Ed. 2d 290 (1964); Wickard v. Filburn, 317 U.S. 111, 63 S. Ct. 82, 87 L. Ed. 122 (1942); United States v. Wrightwood Dairy Co., 315 U.S. 110, 62 S. Ct. 523, 86 L. Ed. 726 (1942); United States v. Darby, 312 U.S. 100, 61 S. Ct. 451, 85 L. Ed. 609 (1941); White v. United States, 399 F.2d 813 (8th Cir. 1968).

 Defendants next argue that even assuming constitutional authority, there was no evidence in the record before Congress to support the conclusion that loan sharking activities affect interstate commerce. See United States v. Five Gambling Devices, 346 U.S. 441, 74 S. Ct. 190, 98 L. Ed. 179 (1953). This argument simply ignores the record.

 In the introductory portion of the statute under consideration, Title II of the Consumer Credit Protection Act, 18 U.S.C. §§ 891-896, Congress made the following pertinent finding:

 
"(1) Organized crime is interstate and international in character. Its activities involve many billions of dollars each year. It is directly responsible for murders, willful injuries to person and property, corruption of officials, and terrorization of countless citizens. A substantial part of the income of organized crime is generated by extortionate credit transactions. * * *
 
* * *
 
"(3) Extortionate credit transactions are carried on to a substantial extent in interstate and foreign commerce and through the means and instrumentalities of such commerce. Even where extortionate credit transactions are purely intrastate in character, they nevertheless directly affect interstate and foreign ...

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