U.S. v. Freeman, 74-1431

Citation514 F.2d 1184
Decision Date28 April 1975
Docket NumberNo. 74-1431,74-1431
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Francis B. FREEMAN, Jr., Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

L. Thomas Elliston, Webb City, Mo. (Joseph W. Amick, Kansas City, Mo., and Larry J. Austin, Overland Park, Kan., on brief), for defendant-appellant.

Bruce Miller, Asst. U. S. Atty. (Robert J. Roth, U. S. Atty., Glen S. Kelly, Asst. U. S. Atty., Kansas City, Kan., on brief), for plaintiff-appellee.

Before HILL, SETH and BARRETT, Circuit Judges.

HILL, Circuit Judge.

Appellant Francis B. Freeman, Jr., was convicted by a jury in the United States District Court for the District of Kansas of violating 18 U.S.C. § 2314, 1 causing or inducing a person to travel in interstate commerce in the execution or concealment of a scheme to defraud that person of money or property having a value of $5,000 or more. On appeal, numerous grounds for reversal are proffered.

First, appellant contends the trial court erred in overruling his motions for judgment of acquittal because the evidence adduced at trial was insufficient to sustain his conviction. In deciding this issue we must view the evidence presented in the light most favorable to the government and give it the benefit of all legitimate inferences to be drawn therefrom. United States v. Twilligear, 460 F.2d 79 (10th Cir. 1972). Such evidence may be summarized as follows.

In 1969, appellant organized and became president of Freeman Construction Company, Inc. (Company), a telephone cable-laying business operating out of Archie, Missouri. The Company acquired construction equipment and vehicles necessary for its business operations by purchases financed through area banks or by leasing equipment and vehicles.

Acting on behalf of the Company, appellant leased numerous items from Manley Leasing Corporation (Manley) of Kansas City, Kansas. He obtained written options to purchase leased equipment and verbal options to purchase leased vehicles. The leases provided, inter alia, that the Company would not "do or permit anything . . . which may encumber, impair or cloud . . . title to said lease property."

In the spring of 1972, Robert Miller, the assistant vice president in charge of the equipment finance and leasing department of the Columbia Union National Bank & Trust Co. (Columbia), in Kansas City, Missouri, met with appellant to discuss a loan for the Company. The purpose of the loan was to pay off the Company's existing equipment loans and lease purchase options and consolidate them into one loan from Columbia. It was determined that a loan of approximately $200,000 would be needed to achieve this result.

Columbia wanted, as collateral, a security interest in equipment and vehicles having a purchase price value of twice the amount of the loan. Miller met with appellant on several occasions to determine if the Company had enough property to meet this requirement. Appellant supplied Miller with an outdated list of the Company's equipment and vehicles. From this list and from information verbally supplied by appellant, Miller made a current list of the Company's property, the purchase price value of which totaled over $441,000.

Appellant advised Miller that the Company owned some of the items on the list free and clear, that various lienholders to be paid off had an interest in some of the items, and that some of the items were leased. He also informed Miller that it would take approximately $17,000 to purchase equipment and vehicles leased from Manley, when in actuality the Company's lease purchase obligations may have been over $100,000. Miller verified some of the pay-off figures but accepted appellant's word on the amount needed to pay off Manley and did not verify it.

On June 16, 1972, appellant, acting on behalf of the Company, obtained a $192,687.72 loan from Columbia. 2 As collateral, Columbia took a blanket security interest in all of the Company's equipment and vehicles appearing on the property list supplied by appellant. Liens on the property were paid off and Columbia gave appellant a $17,264.44 check, payable to Manley and the Company, to pay off Manley and purchase the leased equipment. Once Manley was paid off, the Company would own all of the items on the property list, subject to Columbia's security interest.

Appellant used this check to make the Company's current lease payments to Manley of approximately $5,000, and received a check from Manley for the overage. Columbia was not informed that the Company had not purchased the leased equipment from Manley, and Manley was not informed that Columbia had loaned the Company money to purchase the leased items or that it had taken a security interest therein.

Columbia asked appellant for original titles to all of the Company's rolling stock (which included items still owned by, and titled to, Manley) to perfect its security interest. After several such requests were made appellant notified Columbia that he had mailed the titles to it but that they apparently had been lost in the mail.

In January, 1973, Miller terminated his employment with Columbia and went to work for the Company as a bookkeeper. While opening some of its mail he observed monthly bills from Manley for items of leased equipment. He questioned appellant about the bills and appellant stated he would take care of it.

The Company encountered financial difficulties and defaulted on its loan. In February, 1973, Columbia deemed itself insecure and decided to repossess the Company's property and initiate foreclosure proceedings. It needed a place to store the property and contacted Sam Clark, the owner of a construction company in Olathe, Kansas. Clark owned a rock quarry near Olathe and Columbia asked if it could store the property there.

Clark became interested in purchasing some of the property and went to Columbia to ascertain the type and amount of property. Columbia showed him a copy of the Company's property list and told him about the Company. He mentioned the possibility of going into business with appellant and Columbia put the two men in contact.

Thereafter, Clark met with appellant and had several discussions with him about buying into the Company. Appellant represented that the Company owned all of the property on the list Clark had seen at Columbia. Clark and appellant decided to form a partnership in which Clark would own 51% of the business and appellant would own the remaining 49%. They agreed that, to pay off the Company's loan from Columbia, Clark would come up with $75,000 and appellant would come up with $85,000. Clark was then going to borrow enough money to satisfy the remainder of the loan, which was then around $186,000.

On March 16, 1973, appellant flew from Archie, Missouri, to the Johnson County, Kansas, airport, where he met Clark. The purpose of the meeting was to pay off Columbia and each man was supposed to bring his share of the money to do so. However, appellant advised Clark that he had been unable to obtain his portion of the money, and he asked Clark to purchase all of the Company's property. They discussed the matter en route to Columbia, in Kansas City, Missouri, and agreed that Clark would purchase all of the Company's equipment and vehicles and lease them back to the Company, and that they would still operate as a partnership.

Columbia agreed to loan Clark the funds to purchase the Company's property. Clark obtained a personal loan in his name and the Company's loan was marked paid. Columbia, of course, wanted collateral for the loan and so it took a security interest in some of the property Clark was purchasing. A bill of sale was drawn up only for these items. Appellant stated that he did not want to give Clark a bill of sale for everything at that time because he wanted to inspect the equipment to ensure that the bills of sale showed the correct equipment serial numbers.

Clark subsequently learned that some of the equipment he had purchased was owned by Manley and others, and that some was nonexistent.

Based upon this evidence we believe a jury could find, beyond a reasonable doubt, that appellant was guilty of the crime charged. There was ample evidence that he devised a scheme to defraud and obtain money or property by false or fraudulent representations; that he induced Clark, the intended victim, to travel in interstate commerce; and that he did so with the intent to defraud Clark out of money or property having a value of $5,000 or more.

Appellant contends the evidence is nonetheless insufficient because of fatal variances between allegations contained in the indictment and the proof at trial. Specifically, he argues the fraudulent scheme alleged in the indictment was not proven because it charged that (a) he leased equipment and obtained a loan when the evidence showed these acts were done in the Company's name; (b) the leased equipment was "pledged" to Columbia when the evidence showed that Columbia took a "security interest" in equipment; and (c) he conveyed title to all of the Company's equipment when the evidence showed that only sixteen items were conveyed.

A variance is not fatal unless a defendant could not have anticipated from the indictment what the evidence would be at trial or unless a conviction based on the indictment would not bar a subsequent prosecution for the same offense. See, e. g., United States v. Cowley, 452 F.2d 243 (10th Cir. 1971). We do not believe the variances appellant complains of are so substantial or material as to meet these standards. They are merely technical imperfections which did not obfuscate the scheme or prejudice appellant by misleading him as to the evidence to be adduced at trial. He knew exactly what offense he was charged with and the indictment provided sufficient detail thereof so that a conviction necessarily would bar a subsequent prosecution for the same offense. Other variances proffered by appellant are similar in nature and are also...

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