United States v. Helmos Food Product ( 2005 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 04-3609 & 04-3610
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
HELMOS FOOD PRODUCT, INC. and
THEODORE MANTAS,
Defendants-Appellants.
____________
Appeals from the United States District Court for
the Northern District of Illinois, Eastern Division.
No. 00 CR 214—James F. Holderman, Judge.
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ARGUED APRIL 15, 2005—DECIDED MAY 11, 2005
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Before FLAUM, Chief Judge, and BAUER and EVANS,
Circuit Judges.
EVANS, Circuit Judge. Theodore Mantas and Helmos Food
Product, Inc. petitioned the district court for a writ of error
coram nobis, challenging a $250,000 fine imposed on Helmos
Food in a criminal proceeding. They appeal from the denial
of their petition.
In 2001, we heard the direct appeal of Mantas and Helmos
Food from their convictions and sentences for violations of
2 Nos. 04-3609 & 04-3610
21 U.S.C. §§ 458(a)(3), 461(a), and 676(a)—improperly stor-
ing adulterated poultry and meat products held for sale. For
the facts involved in those charges, we refer readers with
strong stomachs to our decision in United States v. Mantas
and Helmos Food Product, Inc., 274 F.3d 1127 (2001). The
sentences in that case included the fine against Helmos
Food, which the defendants now seek to set aside.
In petitioning for a writ of coram nobis, Mantas and
Helmos Food seek an extraordinary remedy. Barnickel v.
United States, 113 F.3d 704 (7th Cir. 1997). It is a remedy
“limited to defects that sap the proceeding of any validity.”
United States v. Keane, 852 F.2d 199, 203 (7th Cir. 1988)
(citations omitted). In order to obtain the writ a petitioner
must demonstrate, among other things, that the claim upon
which the petition is sought could not have been raised on
direct appeal. As we said in Keane, “[c]laims that could have
been raised by direct appeal are outside the scope of the
writ.” See also Barnickel; United States v. John Doe, 867
F.2d 986 (7th Cir. 1989).
Helmos Food was fined under Chapter Eight of the
United States Sentencing Guidelines,1 which determines
sentences for organizations. But, petitioners argue, the
guideline is not applicable in this case because the company
does not meet the definition of “organization.” Rather, they
say, in reality, since 1997, Helmos Food operated as a sole
proprietorship, which is not included in § 8A1.2 and which,
under Illinois law, has no legal status separate from its
owner. They go on to argue that the issue could not have
1
Because this is not a direct appeal but rather a petition for a
writ of error coram nobis, the recent decision in United States v.
Booker, 125 S. Ct. 738 (2005), does not affect our analysis of this
case. See McReynolds v. United States, 397 F.3d 479, 481 (7th Cir.
2005): “We conclude, then, that Booker does not apply retro-
actively to criminal cases that became final before its release on
January 12, 2005.”
Nos. 04-3609 & 04-3610 3
been raised on direct appeal because no one but Mantas had
access to the information about the company’s status and
he, a Greek immigrant and nonlawyer, did not know, and
could not be expected to have known, the significance of the
information for purposes of sentencing under the guide-
lines.
Although the government expresses doubt that Helmos
Food was, in fact, a sole proprietorship, we need not delve
into that issue. We find that even if Helmos Food was a sole
proprietorship, there is no reason that the issue of the
company’s status could not have been raised on direct
appeal. The legal status of Helmos Food was not some
wraith floating through the proceedings unnoticed by
anyone. Throughout trial and the sentencing proceedings,
there were questions raised, which should have alerted
counsel to the fact that Helmos Food’s legal status was the
subject of some debate and relevance. We cannot agree that
Mantas was the only person who knew, or should have
known, the facts. Furthermore, even if Mantas himself did
not understand the consequences of the company’s status,
counsel should have been aware of its importance.
On the first day of trial, even before the jury was sworn,
the judge said, “Let me inquire before the venire comes in
on a question that I had, and that is whether the defendant
Helmos Food Product is a corporation.” Defense counsel
said, “It’s not, Judge.” When asked whether it was ever a
corporation, he answered, probably incorrectly, “no.” The
prosecutor then explained:
That question is something that the government con-
sidered, as well, your Honor. What we can determine is
that at one point in time Helmos Food was, in fact, a
corporation. They were dissolved by the Secretary of
State. They were then, as of March of 1997, licensed by
the City of Chicago as a partnership, and were, at the
time of this offense, a partnership.
4 Nos. 04-3609 & 04-3610
The judge asked who the partners were and was told they
were Mr. Mantas and his wife. Still curious, the judge asked
whether the entity was a partnership in 1998. Defense
counsel said, “[I]t was a partnership with one of the part-
ners deceased, I guess, so I guess it’s a sole— .” The judge
asked whether Mrs. Mantas died before 1998 and defense
counsel said, “No, I’m sorry, I stand corrected. She was still
alive, Judge. She died last year” (that is, in 1999).
Later, Paul Wolseley, a compliance officer with the United
States Department of Agriculture, testified, without objec-
tion, that Helmos Food was a “licensed partnership within
Cook County, Illinois.” In the instructions, also without
objection, the jury was told that “Helmos Food Product is a
partnership.”
It is hardly surprising, then, that Helmos Food was sen-
tenced under § 8A1.2 of the guidelines. The application notes
to that section make clear that it applies to “corporations,
partnerships, associations, joint-stock companies, unions,
trusts, pension funds, unincorporated organizations, govern-
ments and political subdivisions thereof, and on-profit org-
anizations.” According to the government, the presentence
investigation report described Helmos Food as a “licensed
partnership between Theodore Mantas and his wife Mary.”
There was no objection to the determination, even though
it was clear from the colloquy on the first day of trial that
defense counsel knew Mrs. Mantas was deceased. It is true
that at the sentencing hearing there was some confusion
about Helmos Food’s status. The company was often re-
ferred to as a corporation, even to the point that defense
counsel tried to establish that the corporation, not Mantas,
would be responsible for paying the fine, to which the judge
remarked that piercing the corporate veil would be a means
of obtaining payment from Mantas:
[DEFENSE COUNSEL]: And I just want to be clear
that while he is an officer of the now defunct corpora-
tion, it is the corporation that’s responsible to pay that
fine, correct?
Nos. 04-3609 & 04-3610 5
THE COURT: It is the corporation’s responsibility,
but, of course, there could be a piercing of the corporate
assets for the purpose of obtaining that, can there not?
Whether this was an attempt on the part of Mantas to
avoid paying the fine or not, it was enough for the prosecu-
tor to step in and remind everyone that Helmos Food was
a partnership so there would be no need to pierce the corp-
orate veil to make Mantas responsible for payment. The
prosecutor also remarked that Mr. Mantas’s wife was “the
other partner. So Mr. Mantas is the sole remaining partner.”
The references to Helmos Food as a corporation were
unfortunate but not significant. Whether the company was
a corporation or a partnership would not make a difference
in the application of the guideline. Like a corporation, a part-
nership, as the application notes show, is an organization
for purposes of §§ 8A1.1 and 1.2. So there is no prejudice
arising from the confusion about whether the company was
a corporation or a partnership.
But the confusion has considerable relevance as to
whether the issue that Helmos Food was a sole proprietor-
ship could have been raised on direct appeal. At both trial
and sentencing, attention was directly focused on Helmos
Food’s status, and it was quite clear that Mr. Mantas was
going to be responsible for the fine. Counsel should have
been alerted that if there was a way to prevent the imposi-
tion of a fine—by proving that Helmos Food was a sole
proprietorship, for instance—there was no time like the
present. In addition, at sentencing, both parties had avail-
able Mantas’s 1997 and 1998 tax returns, specifically
schedule C to form 1040, which is entitled “Profit or Loss
from Business (Sole Proprietorship).” The information from
which to argue that Helmos Food was not subject to guide-
line § 8A1.2 was available; it just was not used at trial or on
direct appeal.
6 Nos. 04-3609 & 04-3610
Under these circumstances, that the issue was not ad-
dressed does not mean it could not have been or that
coram nobis is appropriate. Many potential issues are over-
looked during trials and sentencing proceedings, some
deliberately, some not. But the fact that those issues were
not raised does not mean that years later extraordinary
remedies can be invoked to uncrack the egg. The decision of
the district court denying the writ is AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—5-11-05