Pagan pulls guilty plea

MCs in the News
CHARLESTON, W.Va. -- The government's case against the Pagans Motorcycle Club suffered another setback Tuesday when a defendant backed out of his anticipated guilty plea after a federal judge questioned the factual basis of his plea.

Joseph J. "Hard Rock" Schmidt, 37, a union heavy-equipment operator from Marcus Hook, Pa., was on the verge of pleading guilty to aiding and abetting the transportation of proceeds of an illegal motorcycle raffle across state lines.
But U.S. District Judge Thomas E. Johnston balked when he looked over the stipulation of facts intended to form the factual basis of Schmidt's confession.

"It's unclear to me from this stipulation exactly what Mr. Schmidt did," he said. "Was he delivering raffle proceeds on behalf of his club president?"
This led to a discussion among Johnston, Assistant U.S. Attorney Steve Loew and defense attorney Anthony F. List as to whether Schmidt -- who conceded that he gave $100 in raffle proceeds to the treasurer of his chapter of the Pagans, knowing that the money would end up in the hands of Pagans national Vice President Floyd "Jesse" Moore -- had committed a federal crime.

Moore, 64, of St. Albans, pleaded guilty to federal racketeering charges in December. As a member of the Pagans' governing mother club, Moore oversaw a broad area of the gang's territory, including West Virginia and Pennsylvania.

In October, Schmidt, Moore and 53 other defendants were named in a sweeping 44-count indictment that charged members of the Pagans and smaller, associated motorcycle clubs of violating federal racketeering laws by using violence and intimidation to control territory that spanned from New Jersey to Florida.

To date, 18 defendants have pleaded guilty to various charges, including racketeering, extortion, helping stockpile explosives as part of an ongoing feud between the Pagans and the Hell's Angels Motorcycle Club and selling drugs.
Schmidt indicated Tuesday that he turned over the money in Pennsylvania before traveling separately to St. Albans to attend a mandatory event for all Pagans in April 2008.

Loew said that under the government's theory of the crime, Schmidt intended for the proceeds to travel interstate, up the Pagans chain of command to Moore. It didn't matter if Schmidt knew whether he was breaking Pennsylvania state law by participating in an illegal raffle, Loew said.

Every year, the mother club ordered Pagans members to sell a total of 5,000 tickets for $10 each as part of an annual motorcycle raffle that raised funds for the club, according to prosecutors. Different chapters were responsible for various amounts of tickets, depending on their size.
List said that Schmidt did not feel that he had broken the law by selling raffle tickets to himself, and he was struggling with pleading guilty to a felony, which would result in his expulsion from the union.

"The sentiment seems to be, the Pagans are not loved in West Virginia, they are not loved in this area, and he is scared to roll the dice with a jury," List said.

"I don't care about the tactical decision," Johnston said. "I'm not going to take a plea without a factual basis. Period."
Loew maintained that by turning over the money and then traveling to West Virginia, Schmidt aided and abetted in the distribution of the gambling proceeds.

"Respectfully, you honor, so what? Is that a federal offense?" List countered. He said the government was overreaching, and he had trouble seeing how Loew made that legal argument with a straight face.
List asked Johnston to dismiss the charge against Schmidt, but Johnston said he wasn't prepared to decide that issue before a March 15 motions hearing.

Schmidt then formally withdrew his guilty plea, and the hearing ended.
In the wake of Tuesday's developments, Monday's hearing on various pretrial motions looms large.
In addition to questioning the validity of the charges of interstate transportation of gambling proceeds, multiple defendants have motions pending asking Johnston to throw out other charges.

Some maintain that the indictment unfairly overcharges certain defendants by repeating alleged behavior under the umbrella of a racketeering charge. Others say that the indictment accuses them of behavior -- such as carrying properly permitted guns while associating with Moore, who as a convicted felon could not legally carry one himself -- that does not constitute a crime.
The government's use of confidential informants also promises to be a point of contention. Defendants are already assailing the credibility of two informants in particular.

Last month, Loew disclosed that one informant bought and used illegal drugs repeatedly without prior permission from his handlers, and that he also sold guns to several defendants during the investigation. Defense attorneys also maintain that a second informant, who has been paid almost $200,000 by the government and is described in court records as a convicted murderer, instigated and escalated crimes to bolster and protect his standing with his handlers.
With charges against 37 defendants still pending, Johnston's rulings on these motions will likely reshape the course of the prosecution.

Sentencing hearings that had been scheduled for this week were postponed at the last minute, although it was not clear why. It could indicate that several defendants who have pleaded intend to provide information against other defendants, and don't want to be sentenced until they can receive credit from the government for their cooperation. It also may mean that defendants do not want to start prison sentences until Johnston has ruled on issues that may affect their own convictions.

List said he was concerned that prosecutors would put pressure on other defendants to admit to crimes that would address the apparent deficiencies in the case against his client.
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