Peel's sentence to be shortened, appeals court rules

By Steve Korris | Feb 18, 2010


CHICAGO – Blackmailer Gary Peel deserves prison time but not 12 years, the U.S. Seventh Circuit Court of Appeals decided on Feb. 12.

Seventh District judges upheld jurors who convicted former lawyer Peel, but they remanded his sentencing to District Judge William Stiehl in East St. Louis.

Stiehl sentenced Peel twice for the same crime, Circuit Judge Richard Posner wrote.

Verdicts for obstruction of justice and bankruptcy fraud depended on the same facts, Posner wrote.

Stiehl must choose between the crimes as he sets the sentence.

He must also shorten the sentence by recalculating losses Peel intended to cause when he tried to blackmail former wife Deborah Peel.

Although Peel achieved some relief on appeal, he failed to overturn his conviction for possession of child pornography.

He mixed blackmail and child porn in 2006, by copying photographs he had taken of Deborah's sister in 1974 and sticking the pictures in Deborah's mailbox.

He had threatened to make them public if she kept trying to enforce their divorce agreement through his bankruptcy proceedings.

She called postal authorities, who called federal prosecutors.

Agents wired her and sent her to meet Gary, who proposed to swap his photos for her signature on a settlement.

Arrest and conviction followed.

On appeal, Peel argued that the state didn't prove fraud or obstruction.

He claimed he would have disclosed the photos to the bankruptcy court.

Posner wrote, "That is a distortion of the deal he tried to make with his ex-wife."

"Peel's expectation of secrecy was disappointed because his ex-wife went to the police," Posner wrote.

"So there was no actual obstruction of justice, merely an attempt; but the statute punishes the attempt equally with the achieved obstruction."

Peel's appeal of the child porn conviction didn't please Posner either.

Peel argued the photos weren't illegal when he took them, and he spotted a grandfather clause in statute for pornography that was legal when created.

Posner wrote, "The statute is confused, but not that confused."

He wrote that a grandfather clause was the least plausible interpretation.

Peel insisted he didn't know in 2006 that Deborah's sister was under 18 when he photographed her.

"He had known her since she was in the fourth grade, had spent a great deal of time with her at the time of his marriage to her sister, when she was in high school, and years later had represented her (the defendant is a lawyer) in her divorce proceeding," Posner wrote.

Though Peel convinced Seventh Circuit judges that he faced double jeopardy, he didn't convince them that Stiehl must vacate the verdict on obstruction of justice.

"It is a matter committed to the trial judge's discretion because functionally it is a decision concerning the length of the defendant's sentence," Posner wrote.

Stiehl must also adjust the sentence to account for his error in tagging Peel with an intended loss of $611,000 among other creditors in his bankruptcy proceedings.

"None of the other creditors (or anyone else) would have been hurt had the blackmail attempt succeeded; nor was it any part of the defendant's intention to hurt them," Posner wrote.

Peel also trimmed his time behind bars by prevailing on a claim that Stiehl miscalculated Deborah's intended loss.

Stiehl multiplied $2,500 a month, Gary's payment under the divorce agreement, by 17.5 years, Gary's life expectancy, and came up with $525,000.

Peel argued that Stiehl should have discounted the value of future payments.

Posner agreed, but he added a twist.

He wrote that the nature and circumstances of a crime might limit the utility of discounting to present value.

"A blackmailer is apt not to stick to his deal with the victim but instead to come back for more," he wrote.

"True, if Peel were to give all the photos back to his ex-wife, as he promised to do, he could not have blackmailed her further," he wrote.

"But there would have been no assurance that he would do that, since she didn't know how many of the photos he had," he wrote.

"And even if the blackmailer doesn't return for more, the victim is apt to be in constant fear of such a return, adding to the cost of a crime," he wrote.

He left it to Stiehl's discretion whether to discount the loss to present value "and how best to weigh that determination in deciding on an appropriate sentence."

Circuit Judges Daniel Manion and David Hamilton joined Posner's opinion.

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