Bankruptcy Fraud, Obstruction of Justice, and Possession of Child Pornography—Gary Peel

A Glen Carbon, Illinois attorney has been indicted by a federal grand jury on allegations that he committed bankruptcy fraud, obstructed justice, and possessed child pornography.^[1] According to the indictment, Gary Peel allegedly tried “to coerce his ex-wife with sexually explicit photos he snapped in 1974 of her 16-year-old sister.”^[2] The charges stem from “an FBI surveillance in January that … Deborah Peel helped arrange.”^[3] Mr. Peel allegedly told Ms. Peel that “he had an affair with the teen and threatened to send the pictures he took to their parents if [Ms.] Peel didn’t stop pursuing assets in a bankruptcy case.”^[4] They got divorced in 2003, and in 2005, Mr. Peel went to bankruptcy court, “seeking to annul the settlement he made” with Ms. Peel; she objected and filed an action in bankruptcy to preserve the settlement.^[5] That is when he called her, told her of the affair, “and said he placed the photos in her mailbox, where she later found them. They met 11 days later and he told her he would give her the originals if she signed a new settlement, the charges say. ‘At the conclusion of the meeting, agents of the Federal Bureau of Investigation retrieved the envelope and original photographs from the person of Gary Peel,’ the indictment states.”^[6]

Most of the attention in the case is on the pictures, which is contentious for two reasons: one is the age of the photographs (which may be irrelevant), and the second is the interstate component.^[7] Prosecutors are claiming federal jurisdiction because the “photos were printed on paper made outside Illinois,”^[8] and because the printer on which the photos were printed was manufactured outside the state of Illinois.^[9]

The possession of child pornography charges come under 18 U.S.C. § 2252A(a)(5)(B), which makes it a crime for a person to knowingly possess any material that contains an image of child pornography that was produced using materials that have been mailed or transported in interstate or foreign commerce. This law was first passed in 1996, but that would only be relevant for the actual creation of the alleged child pornography. Like conspiracy, possession can be a long-running offense.

There is an affirmative defense in section 2252A(c). A person cannot be convicted of an offense under subsection (a)(5) if either the alleged child pornography was produced using an actual person engaging in sexually explicit conduct and each person was actually an adult at the time the material was produced, or the alleged child pornography was not produced any actual minor or minors. Furthermore, under section 2256(8), the definition of “child pornography” is any visual depiction, of sexually explicit conduct, where—

• the production of such visual depiction involves the use of a minor engaging in sexually explicit conduct;
• such visual depiction is a digital image, computer image, or computer-generated image that is, or is indistinguishable from, that of a minor engaging in sexually explicit conduct; or
• such visual depiction has been created, adapted, or modified to appear that an identifiable minor is engaging in sexually explicit conduct.

According to prosecutors, the pictures depicted the sister “naked and in various poses, including a lascivious display of the genitals and pubic area.”^[10]

The prosecution will have to prove that the pictures are indeed of a minor. If the pictures were taken in 1976 or 1977, when the sister would no longer be 16, then the picture cannot constitute child pornography. The pictures would likely be graded on the Tanner Scale, which “was developed through analysis of many children both in the United States and throughout the world and provides a basis for estimating a person’s stage of physiological development.”^[11] If the prosecution is successful in that, then a defense could be made that the pictures do not constitute “sexually explicit conduct,” because they involve primarily poses. Some courts have dismissed images which do not contain “lascivious displays of the genitals or pubic area,” because they do not necessarily suggest sexual activity or exploitation, even if the “subject’s upper body is nude.”^[12] Thus, some of the charges related to the images could be dropped.

The bankruptcy fraud charges come under 18 U.S.C. § 152(6), which makes it a crime for a person to knowingly and fraudulently give, offer, receive or attempt to obtain any money or property, remuneration, compensation, reward, advantage, or promise thereof for acting or forbearing to act in any bankruptcy case.^[13] According to the government, the fraudulent acts concern the alleged blackmail with the photos. This is an interesting theory. Seemingly, the only reason the pictures became an issue is because Ms. Peel attempted to stop Mr. Peel from annulling their divorce settlement. The government will have to prove that his alleged attempts to negotiate a new divorce settlement and have her withdraw her bankruptcy filings were fraudulent activity within a bankruptcy case.

We previously discussed obstruction of justice on March 22.

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[1] Michael Shaw, Indictment: Lawyer Attempted to Coerce Ex-Wife With Explicit Photos, St. Louis Dispatch, Mar. 23, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] United States v. Peel, No. 3:06-cr-30049, Indictment at 3 (S.D. Ill. 2006).
[10] Id. at 3.
[11] United States v. Hilton, 286 F.3d 13, 15 (1st Cir. 2004)
[12] United States v. Hilton, 257 F.3d 50, 58 (1st Cir. 2001) (overruled, in part, on other grounds Ashcroft v. Free Speech Coalition, 535 U.S. 234 (2002)).
[13] See also, Peel, supra note 9, at 4.