United States v. James R. Lowenberg, Randall E. Campbell, and Michael Palumbo, Defendants- Apellants

853 F.2d 295
CourtCourt of Appeals for the Fifth Circuit
DecidedSeptember 23, 1988
Docket87-1610
StatusPublished
Cited by55 cases

This text of 853 F.2d 295 (United States v. James R. Lowenberg, Randall E. Campbell, and Michael Palumbo, Defendants- Apellants) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth 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. James R. Lowenberg, Randall E. Campbell, and Michael Palumbo, Defendants- Apellants, 853 F.2d 295 (5th Cir. 1988).

Opinion

E. GRADY JOLLY, Circuit Judge:

Three defendants challenge their convictions for multiple counts of use of the mails to facilitate prostitution in violation of 18 U.S.C. § 1952(a) and (b). 1 They were found guilty by the jury, and, although these defendants raise myriad issues, we find no basis for reversing that verdict and affirm their convictions.

I

Lowenberg and Campbell leased buildings in Dallas, Texas and then sublet them for use as nude modeling studios. Palum-bo was Campbell’s employee. The relationship between Lowenberg and Campbell and their relationships with the studios was contested at trial, but it is clear that they worked together in the operation of nude modeling studios in Dallas; Lowenberg referred to Campbell as his “partner.” As to their relationship with the respective studios, at trial the government presented evidence that they hired managers and otherwise, directly and indirectly, supervised these studios that served as fronts for prostitution. The government also presented evidence from which the jury could reasonably infer that all three defendants were aware that acts of prostitution regularly took place at the studios.

The ease against these defendants is the result of a sting operation by the Colorado Bureau of Investigation (CBI). The CBI created a fictional business entity, Investment Mortgage and Credit (IMAC), to process credit card vouchers for businesses such as nude modeling studios that are frequently fronts for prostitution. Although the motivation for the Colorado agency to set up a nationwide sting operation is unclear, IMAC randomly sent solicitation letters to several hundred such businesses, including several in the Dallas area. One of the letters reached Lowenberg, who then arranged a meeting with an IMAC representative, undercover CBI agent Hag-erty. Lowenberg and Hagerty agreed that IMAC would process credit card vouchers for five nude modeling studios owned by Lowenberg and Campbell. They assigned the studios fictitious names for use on the credit card vouchers in order to avoid attracting the attention of local police and the Internal Revenue Service.

On several occasions during 1986, Low-enberg sent to IMAC, through the United States mail, credit card vouchers for charges at the studios. Vouchers from studios holding leases from Campbell were turned over to Campbell and then to Low-enberg, who sent the vouchers to IMAC. Palumbo collected vouchers from the studios for Campbell. Customers usually signed the vouchers in pairs: one for the “nude modeling session” and one for a “tip,” which usually was for a standard amount that considerably exceeded the session fee. Purchases were generally described on the vouchers as “services” or “cash.” Lowenberg claims to have charged studios a five percent fee for pro *299 cessing the vouchers, but one of the studio managers testified that Lowenberg charged twenty percent on the “tip” charges. Campbell also apparently charged this twenty percent fee on the “tips.” Checks for the amount of the vouchers, less IMAC’s fees, were issued by Capital-Capital Limited (an alter-identity for IMAC) and were usually made payable to the order of Lowenberg or Palumbo. Checks payable to Palumbo were deposited into Campbell’s business account, Rahab Investments Corp.

The defendants were tried to a jury on a fifteen-count indictment. Lowenberg was convicted on thirteen of the fifteen counts. Campbell and Palumbo, who were tried for aiding and abetting, were each convicted on four counts. The district court sentenced all defendants to five years' imprisonment, fined Lowenberg and Campbell, but suspended in favor of probation all of Palum-bo’s sentence and all but six months of Lowenberg’s and Campbell’s sentences.

II

The defendants raise several issues on appeal. We will address the issues that each raises separately before resolving those that may affect all three.

A.

Campbell claims that the district court erred when it permitted the prosecutor to ask government witness Larry Jensen, on redirect examination, about a suitcase the witness lost in Colorado valued at $50,000, which allegedly belonged to Campbell and which, it was brought out on recross, probably contained drugs. Campbell argues that this testimony was evidence of an extraneous offense and therefore inadmissible under rules 403 and 404(b) of the Federal Rules of Evidence. 2 Although the defendant presents this as a Rule 404(b) issue, the extrinsic evidence rule is clearly not the issue here. Instead we examine whether Campbell was unfairly prejudiced under the circumstance in which this admittedly irrelevant and nonprobative evidence was allowed.

Larry Jensen, the government witness who had previously been associated with Campbell and Palumbo, was on the witness stand. Palumbo’s attorney was completing his cross-examination of him, and parted with the question, “Mr. Jensen, what did you lose in Colorado that cost $50,000?” Jensen responded that he lost a suitcase. Although the reason for this “denoument” to the cross-examination is not perfectly clear, apparently Palumbo’s attorney was seeking to impeach the testimony of Jensen by focusing on his involvement in suspicious activities. He did not ask him to whom the suitcase belonged or why it was worth $50,000. The prosecutor on redirect attempted to minimize whatever negative impression the statement might have left by bringing out testimony, over the objection of Campbell’s attorney, that the mysterious suitcase belonged to Campbell, not Jensen. When asked what was in the suitcase worth $50,000, Jensen replied that he thought it was drugs. Of course, Campbell’s attorney pressed his strenuous objection. The cross-examination, however, had clearly opened the door to the government’s follow-up question about the ownership and the contents of the suitcase. United States v. Lemaire, 712 F.2d 944, 948 (5th Cir.), cert. denied, 464 U.S. 1012, 104 S.Ct. 535, 78 L.Ed.2d 716 (1983). Once the answer to the question indicated that drugs were in the suitcase, however, the trial court called the issue a “red herring,” ruled it irrelevant and carefully instructed the jury to disregard the remark. In the light of the district court’s ruling and in *300 struction, there was no violation of Fed.R. Evid. 403.

B.

Similarly, Campbell complains that the court erred when it permitted Jensen to testify that Campbell had previously ordered Palumbo to beat up Tony Jacobs, a manager at one of the studios, because Jacobs was holding back profits. Again he argues that this evidence was highly prejudicial and should have been excluded under Rules 403 and 404.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

United States v. Cockerell
140 F.4th 213 (Fifth Circuit, 2025)
United States v. Stuart
132 F.4th 892 (Fifth Circuit, 2025)
United States v. Shah
84 F.4th 190 (Fifth Circuit, 2023)
United States v. Weldon
Fifth Circuit, 2022
Maggett v. Middlebrooks
N.D. Mississippi, 2022
United States v. Kidd
385 F. Supp. 3d 259 (S.D. Illinois, 2019)
United States v. Davis
609 F.3d 663 (Fifth Circuit, 2010)
United States v. Garcia-Gracia
324 F. App'x 286 (Fifth Circuit, 2009)
United States v. Yong Ping Liu
288 F. App'x 193 (Fifth Circuit, 2008)
United States v. Mendoza
522 F.3d 482 (Fifth Circuit, 2008)
United States v. Bennett
258 F. App'x 671 (Fifth Circuit, 2007)
United States v. Pando Franco
503 F.3d 389 (Fifth Circuit, 2007)
United States v. Fletcher
237 F. App'x 991 (Fifth Circuit, 2007)
United States v. Insaulgarat
Fifth Circuit, 2004
United States v. Luis Enrique Insaulgarat
378 F.3d 456 (Fifth Circuit, 2004)
United States v. Gamez-Gonzalez
319 F.3d 695 (Fifth Circuit, 2003)
United States v. Ikner
Fifth Circuit, 2002
United States v. Muriel
Fifth Circuit, 2002
United States v. Smith
Fifth Circuit, 2002

Cite This Page — Counsel Stack

Bluebook (online)
853 F.2d 295, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-james-r-lowenberg-randall-e-campbell-and-michael-ca5-1988.