## Facts

- The FBI investigated a “street tax” extortion scheme connected to the Chicago Outfit targeting adult-video businesses in Illinois.
- William R. Wemette owned an adult-video store and was compelled to make payments under threats that his business would be shut down if he did not pay.
- Frank John Schweihs, identified as an Outfit figure, intervened and appointed Anthony F. Daddino to collect Wemette’s payments.
- In 1987, Wemette began cooperating with the FBI and recorded dealings with Schweihs and Daddino; some payments were made under FBI supervision.
- The government charged several substantive counts as Hobbs Act “attempts” on the theory that FBI reimbursement of the paid money could prevent actual depletion of the business’s assets and thus prevent consummation of a completed Hobbs Act offense.
- After the FBI directed Wemette to stop paying, Daddino warned that a “more dangerous” collector might come; when Wemette told him not to return, Daddino said “Okay, buddy” and did not come back.
- Schweihs thereafter collected payments himself.
- Evidence at trial included recordings reflecting threats and repeated payments, and proof that Wemette’s business purchased inventory that moved in interstate commerce.

## Issues

1. Whether defendants may be convicted of attempted Hobbs Act extortion when the victim’s payments are reimbursed by the FBI, potentially preventing actual depletion of assets and an actual effect on commerce.
2. Whether the evidence was sufficient to prove extortion by wrongful use of fear and the required nexus to interstate commerce.
3. Whether Daddino’s cessation of collections and departure (“Okay, buddy”) constituted withdrawal from the conspiracy requiring a withdrawal jury instruction.
4. Whether evidentiary rulings and jury instructions warranted reversal.

## Decision

- The Seventh Circuit affirmed the convictions.
- The court held that FBI reimbursement did not preclude Hobbs Act attempt liability where defendants intended extortion and took substantial steps to obtain money through threats.
- The court found sufficient evidence that payments were induced by fear, including fear of economic harm (e.g., shutting down the business or sending a more dangerous collector).
- The interstate-commerce element was satisfied because extortionate depletion (or attempted depletion) of a business purchasing goods that traveled in interstate commerce has at least a realistic potential effect on commerce.
- The court held Daddino was not entitled to a withdrawal instruction because he did not take affirmative, unequivocal steps to disavow or defeat the conspiracy.
- The court found no reversible error in the challenged evidentiary rulings or in the instructions considered as a whole.

## Legal Principles

- Hobbs Act liability extends to attempts and conspiracies to commit extortion affecting interstate commerce. 18 U.S.C. § 1951.
- Attempt requires intent to commit the offense and a substantial step toward its commission; actual completion or actual depletion of assets is not required.
- “Extortion” includes obtaining (or attempting to obtain) property with consent induced by the wrongful use of fear, including fear of economic harm.
- The Hobbs Act commerce element is met by a realistic potential effect on interstate commerce; effects may be minimal where the target business participates in interstate purchasing.
- Withdrawal from a conspiracy requires affirmative action to disavow or defeat the conspiracy (e.g., notifying authorities or clearly communicating withdrawal to co-conspirators); mere cessation of activity is insufficient.

## Conclusion

The court upheld Hobbs Act conspiracy and attempt convictions arising from a street-tax scheme, ruling that FBI reimbursement of the victim’s payments did not defeat attempt liability, the minimal commerce nexus was satisfied by the business’s interstate purchasing, and a conspirator’s withdrawal requires clear affirmative steps rather than simply stopping participation.


United States v. Schweihs, 971 F.2d 1302 (7th Cir. 1992)