## Facts

- Reginald J. Holzer, an Illinois state trial judge, took a long series of bribes, often disguised as “loans” he did not intend to repay, from lawyers with matters before him and from persons seeking appointments as receivers.
- The mail-fraud counts were tried on the theory that Holzer schemed to deprive the State, its citizens, and litigants of the right to honest government and impartial administration of justice.
- The prosecution did not attempt at trial to prove that the alleged victims (the State, citizens, litigants, or nonbribing lawyers) lost money or property; the payments came from the bribing lawyers and receivers.
- Holzer was convicted in federal district court of mail fraud (18 U.S.C. § 1341), Hobbs Act extortion (18 U.S.C. § 1951), and RICO (18 U.S.C. § 1962), and received concurrent sentences, including 18 years on extortion and RICO.
- The Seventh Circuit previously affirmed the convictions, but the Supreme Court vacated and remanded for reconsideration in light of McNally v. United States, which limited mail fraud to schemes targeting money or property.

## Issues

1. Whether mail-fraud convictions tried solely on an “intangible right to honest government” theory could be upheld after McNally by reframing the bribes as “money or property” of the State under a constructive-trust theory.
2. Whether the RICO conviction could stand when some charged predicate acts were mail-fraud offenses now invalid after McNally and the jury returned a general verdict not specifying which predicates it relied on.
3. Whether McNally affected the separate Hobbs Act extortion conviction.
4. What remedy, including retrial and resentencing, was required after vacating some counts.

## Decision

- The court vacated the mail-fraud convictions because the case was tried and submitted to the jury on an intangible-rights theory foreclosed by McNally.
- The court rejected the government’s attempt on remand to salvage the mail-fraud counts by asserting the State had a property interest in the bribe proceeds via constructive trust, because that was not the theory tried to the jury and was too attenuated to substitute post hoc.
- The court vacated the RICO conviction and remanded for a new trial on that count because the jury’s general verdict made it impossible to know whether the pattern finding rested on legally invalid mail-fraud predicates.
- The court affirmed the Hobbs Act extortion conviction as independent of the mail-fraud theory and unaffected by McNally.
- The court ordered resentencing on the remaining extortion conviction because the original sentence operated as a package likely influenced by the vacated mail-fraud counts and the vacated-and-remanded RICO count.

## Legal Principles

- The mail-fraud statute reaches schemes to obtain money or property; it does not criminalize schemes aimed solely at depriving the public of intangible rights to honest government.
- A conviction cannot be sustained on appeal by substituting a materially different “property” theory for the theory charged, proved, and presented to the jury at trial.
- When a RICO conviction may rest on multiple predicate acts and a general verdict does not reveal which predicates the jury used, the conviction cannot stand if any predicates are legally invalid.
- McNally’s limitation of mail fraud does not alter Hobbs Act extortion, which separately criminalizes obtaining property under color of official right.
- When some counts in a multi-count “sentencing package” are vacated, resentencing on remaining counts is appropriate to reflect the changed set of convictions.

## Conclusion

The Seventh Circuit applied McNally to set aside mail-fraud convictions based on an intangible-rights theory, declined to uphold them through a new constructive-trust property rationale, vacated and remanded the RICO count for retrial due to uncertain reliance on invalid predicates, affirmed Hobbs Act extortion, and required resentencing on the surviving count.


United States v. Holzer (Holzer II), 840 F.2d 1343 (7th Cir. 1988)