United States v. Daniel M. Paradies, the Paradies Shops, Inc., Paradies Midfield Corporation, Ira Jackson

98 F.3d 1266
CourtCourt of Appeals for the Eleventh Circuit
DecidedNovember 6, 1996
Docket94-8485
StatusPublished
Cited by128 cases

This text of 98 F.3d 1266 (United States v. Daniel M. Paradies, the Paradies Shops, Inc., Paradies Midfield Corporation, Ira Jackson) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Daniel M. Paradies, the Paradies Shops, Inc., Paradies Midfield Corporation, Ira Jackson, 98 F.3d 1266 (11th Cir. 1996).

Opinion

*1271 WELLFORD, Senior Circuit Judge:

Defendants Ira Jackson, 1 Daniel Paradies, The Paradies Shops, Inc., and Paradies Midfield Corp., 2 were convicted pursuant to a 133 count indictment charging them with various offenses arising out of the operation of the concessions at the Atlanta Hartsfield International Airport. The bullí of the charges involved mail fraud (18 U.S.C. §§ 1341,1346, and 2), conspiring to make corrupt payments to public officials (18 U.S.C. §§ 371, 666), and tax fraud (26 U.S.C. § 7206). The defendants challenge their convictions and their sentences, which were imposed after a lengthy jury trial, on several grounds.

Two fraudulent schemes were involved in the indictment. In the first, the government alleged that Jackson and D. Paradies, the largest subconcessionaire at the Atlanta airport, conspired to profit from Jackson’s influence as an Atlanta City Council member and as the Commissioner of Aviation. According to the government’s theory, Jackson used his political position to reduce the rent of the concessionaires, including the Paradies defendants, by very substantial amounts. In return Jackson, who allegedly owned an interest in the Paradies businesses, reaped benefits through payments from D. Paradies, which purported to be fees and dividends. In the second alleged scheme, which was much less complicated, D. Paradies and another subconcessionaire, Harold Echols, regularly gave cash to Jackson and other City Council members for favorable votes in matters before the Council in which the Paradies defendants (and other concession operators) had an interest.

The particulart circumtances suroundingfraudulent schemes were fervently disputed at trial. The facts set out below are those which the jury might reasonably have found from the evidence properly admitted at trial.

I. STATEMENT OF THE CASE

A. The Airport Concessions Program

The City of Atlanta owns and controls the Atlanta airport. From its opening in 1980, Dobbs Paschal Midfield Corp. (“Dobbs”) was the principal concessionaire, managing all the airport concessions under contract with the City. Dobbs contracted with various subcon-cessionaires, including the Paradies defendants, to provide food, merchandise, and services. The subconcessionaires paid rent to Dobbs based on the greater of a percentage of sales or a guaranteed minimum. In turn, Dobbs agreed to pay the city a percentage of sales or a guaranteed minimum of $240 million over the first 15 years of operation. Dobbs’ agreement with the City required that at least twenty percent of the total dollar volume of the concessions program be produced or controlled by minority controlled enterprises. That contractual provision provided the defendants an incentive to work out their schemes. 3

D. Paradies was president and principal shareholder of Shops, a major gift shop chain at airports across the country. D. Paradies was also president of Midfield, a company which contracted to operate exclusively the gift shops in the airport in 1979. Shops owned sixty-five percent of Midfield’s stock, *1272 and the other thirty-five percent was owned by minority controlled businesses in accordance with the minority participation requirement. 4 That thirty-five percent was comprised of three corporations that were wholly owned by black persons, Mack Wilb-ourn, 5 Nathaniel Goldston, and Joanne MeClinton. Wilbourn’s business, Kinley Enterprises, Inc. (“Kinley”), held 18.3% of Midfield stock; Goldston’s business, Airport Enterprises, Inc. (“AEI”), held 13.7%; and McClinton’s business, Estate Management (“Estate”), held 3%. As was provided for in the shareholder agreements, the minority members supposedly received a management fee of 1.1% of Midfield’s gross receipts. Midfield also paid Shops a management fee of 9% by mailing checks on a monthly basis.

B. Jackson’s Loan/Purchase from Goldston and Wilboum

By the spring of 1985, D. Paradies’ relationship with the first minority shareholders group soured. At that point, the government contends, D. Paradies sought to include defendant Jackson as a minority participant in Midfield. D. Paradies and Jackson were close personal friends. In 1980, Paradies and Echols hosted the wedding reception for Jackson and his bride, Maudestine “Mimi” Simmons. 6

In April of 1985, Paradies wrote a “personal and confidential” letter to Jackson requesting Jackson’s assistance in obtaining space for additional shops in the airport. If the space was obtained by October 1, 1985, Paradies stated, the minority shareholders would receive an increase in management fees to 2%. If the space were not obtained, the fee would remain at 1.1% for those shareholders. Under the government’s theory, D. Paradies’ letter was an invitation to Jackson to capitalize on a near doubling of the minority participants’ management fee increase. Soon thereafter, Jackson began to negotiate with Goldston to purchase his interest in Midfield.

Goldston told Jackson that he was experiencing financial difficulty, and purportedly offered to sell Jackson his stock in Midfield for $50,000. Jackson made a “loan” to Gold-ston for $50,000 through his wife Mimi, operating as Metro Consultants, Inc. 7 The government maintained that the purported loan was, in fact, a purchase by Jackson of Gold-ston’s interest. Indeed, Jackson’s check to Goldston on his personal checking account specified: “For Metro Consultants — Purchase Stock.” The government also introduced agreements which purportedly transferred Goldston’s Midfield stock in the name of AEI to Metro Consultants. On October 1, 1985, moreover, Midfield terminated its management agreement with Goldston and entered into a new comparable agreement with Jackson’s wife. Mrs. Jackson was to render administrative assistance in return for her portion of the 1.1% management fee. Also, in order to qualify as a minority business, Metro Consultants had to be certified as a minority-owned company. Jackson asked the Atlanta Office of Contract Compliance to expedite the certification for Metro Consultants because his wife wanted to “buy out” Goldston and Wilbourn.

After Jackson had already distributed the “loan proceeds,” he appeared before the City’s Board of Ethics for an opinion on the propriety of his “loan.” Jackson told the Board that he had loaned $50,000 to Gold-ston, and that his wife wished to purchase Goldston’s and Wilbourn’s interests in Midfield. He also stated that Wilboum’s “asking price” was $275,000.

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Bluebook (online)
98 F.3d 1266, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-daniel-m-paradies-the-paradies-shops-inc-paradies-ca11-1996.