U.S. v. Huntley, 75-1871

• Decision Date: 29 July 1976
• Docket Number: No. 75-1871,75-1871
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Robert Everett HUNTLEY and Gipson F. Hemphill, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1400

535 F.2d 1400

UNITED STATES of America, Plaintiff-Appellee, v. Robert Everett HUNTLEY and Gipson F. Hemphill, Defendants-Appellants.

No. 75-1871.

United States Court of Appeals, Fifth Circuit.

July 29, 1976.

Richard L. Rosenfield, Alan J. Weil, Los Angeles, Cal., for defendants-appellants.

Frank D. McCown, U. S. Atty., Michael P. Carnes, Asst. U. S. Atty., Fort Worth, Tex., Judith A. Shepherd, Asst. U. S. Atty., Dallas, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before TUTTLE, GODBOLD and GEE, Circuit Judges.

GEE, Circuit Judge:

Appellants were convicted on seven counts of interstate transportation of forged or falsely made securities, nine counts of interstate transportation of securities of the value of $5,000 or more knowing the same to have been stolen, converted or taken by fraud, one count of making false material statements to a federally insured bank for the purpose of influencing the bank to approve a loan, and one count of conspiracy to commit these substantive offenses. The unusual feature of their trial was that individuals who allegedly excelled in the clever but illegal use of documents were convicted in a proceeding conducted almost entirely by document. Finding no reversible error in this combination of poetic and legal justice, we affirm.

I. The Facts: A Brief Documentary

Robert Huntley and Gipson Hemphill were partners in the R. E. Huntley Cotton Company (the Huntley company), which both bought and sold cotton for its own account as a broker and operated warehouses. In the summer of 1970, they opened an account in the name of the Altus Cotton Company at the First National Bank, Altus, Oklahoma. The authorized signatures for this account were R. E. Huntley and S. B. Marlin. Also in the summer of 1970, appellants stopped cancelling their warehouse receipts when the cotton represented by the receipts was shipped out of the warehouses. Rather than being destroyed, the receipts were collected in the Huntley company office in Vernon, Texas. Soon a torrent of documents circulated between the Huntley company account in the First State Bank, Vernon, Texas (the Vernon bank), the Altus Company account in Altus, and three other accounts in Quanah, Texas, Frederick, Oklahoma, and Greenwood, Mississippi. Between January 1971, and the discovery of the scheme in July 1973, over $500,000,000 of deposits were made in these accounts, and over 80% of these deposits were solely attributable to transactions between the five participating accounts. Many of the deposits were made by sight drafts drawn on one of the participating depositors with the worthless warehouse receipts from the Huntley company office in Vernon attached. These drafts were frequently paid by the deposit of other drafts, drawn on another of the depositors and accompanied by more Huntley company cotton warehouse receipts. Part of the flow of documents consisted of checks drawn on the Altus Cotton Company and signed with the name "S. B. Marlin." Both appellants helped prepare drafts with the worthless warehouse receipts attached and signed "S. B. Marlin" on checks.

After this scheme was exposed and appellants indicted on the 18 counts on which they were convicted, a jury trial commenced. One witness, a bank examiner for the State of Texas, testified to the manner in which he conducted the investigation of the Vernon bank which led to its closing. At this juncture, the appellants waived their right to a jury trial. The district court examined each of them on the record to verify their understanding of this waiver and their agreement to their counsel's proposal to submit the case on stipulated testimony. The trial was briefly reconvened twice thereafter, with appellants present, to monitor progress on the stipulations. At the conclusion of the second of these sessions, both sides rested, having submitted all the remaining evidence through stipulations signed by both appellants, their counsel, and the prosecutor. The court reached its decision in chambers, and appellants did not reappear in open court until their sentencing. On appeal, appellants challenge the sufficiency of the evidence, the procedure of the district court, and the adequacy of their trial counsel's representation.

II. The Sufficiency of the Evidence: Forged Documents

Appellants challenge the sufficiency of the evidence supporting each of the 18 counts on which they were convicted. We have reviewed the evidence supporting the convictions on Counts 7, 11, 14, and 16, and finding it sufficient, we affirm those convictions. Since the ten-year sentences on those four counts were concurrent with each other and with the sentences received on the remaining fourteen counts, and envisioning no additional collateral consequences from the convictions on the other counts, we decline to review the remaining counts. ¹

Counts 7, 11, 14, and 16 involve the offense of causing the interstate transportation of forged or falsely made securities in violation of 18 U.S.C. § 2314 (1970). In each of these counts, the forged or falsely made security in question is a check drawn on the Altus Cotton Company account and signed on behalf of the company by "S. B. Marlin." Each of these checks was deposited in the Huntley company account in the Vernon bank. The Huntley company received immediate credit, and this credit was promptly used to pay Huntley company checks which were being held by the Vernon bank.

The convictions on these four counts are proper if the government proved either that these checks were "forged" or that they were "falsely made." E. g., United States v. Anderson, 527 F.2d 442 (5th Cir. 1976). Although this circuit has previously remarked that the two statutory terms have different meanings, it has never indicated the outer limits of the term "falsely made." Stinson v. United States, 316 F.2d 554 (5th Cir. 1963), the seminal case recognizing that "forged" and "falsely made" have different meanings, merely shows that it is not necessary to prove the technical elements of a forgery to sustain a conviction on an indictment which alleges transportation of a falsely made security. We approach the question of whether the "S. B. Marlin" checks were within the scope of the third paragraph of 18 U.S.C. § 2314 without clear guidelines from binding precedent.

We think it apparent that the purpose of the term "falsely made" was to broaden the statute beyond rigorous concepts of forgery and to prohibit the fraudulent introduction into commerce of falsely made documents regardless of the precise method by which the introducer or his confederates effected their lack of authenticity. See United States v. Tucker, 473 F.2d 1290, 1294 (6th Cir.), cert. denied, 412 U.S. 942, 93 S.Ct. 2785, 37 L.Ed.2d 402 (1973). Although this circuit has never faced a case precisely like this one involving use of a check in a spurious name which was the duly authorized signature for an actually existing bank account the issue has arisen in three other circuits. Each has held that § 2314 condemns such checks. See United States v. Seay, 386 F.Supp. 550 (E.D.Ill.1974), aff'd, 518 F.2d 646 (7th Cir.) (per curiam), cert. denied, --- U.S. ----, 96 S.Ct. 421, 46 L.Ed.2d 368, 44 U.S.L.W. 3330 (1975) (check written by fictitious drawer on company account); United States v Scott, 457 F.2d 848 (10th Cir.), cert. denied, 409 U.S. 866, 93 S.Ct. 160, 34 L.Ed.2d 114 (1972) (check on company account drawn in fictitious name); United States v. Metcalf, 388 F.2d 440 (4th Cir. 1968) (check on individual account opened in fictitious name). These three circuits apparently employ a broad definition of forgery, so their conclusions that such checks are forged may be untenable in this circuit. ² We nonetheless find them persuasive on the issue of whether the "S. B. Marlin" checks fall within the broader class of "falsely made" securities whose interstate transportation is forbidden by § 2314. The well-known decreased availability and use of blank check forms has made the establishment of a dummy bank account in a fictitious name an almost essential element of any substantial false document circulation scheme. We therefore conclude that § 2314 is violated by the kind of use of a spurious name with fraudulent intent which this record demonstrates.

There is no dispute that the name "S. B. Marlin" on the checks, whether or not totally fictitious, does not correspond to any actual person involved in these transactions. Moreover, there is no indication that either appellant made regular use of the "S. B. Marlin" name as an alias. The factual background previously discussed furnishes ample evidence, particularly when viewed in the light most favorable to the government as required by Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942), that the appellants' intent was fraudulent when they opened the Altus Cotton Company account, when they signed the spurious name on the checks, and when they caused the checks to be transported in interstate commerce. ³ While particular proof of reliance on the signature is not necessary to sustain a conviction on "falsely made" securities, ⁴ we note that the use of the "S. B. Marlin" signature was obviously material to the success of the fraudulent scheme because it contributed to the appearance that the checks were based on arms-length transactions with an independent business entity.

Finally, appellants argue that the evidence is insufficient because there is no showing that they were not authorized to use the name "S. B. Marlin." They rely on Parker v. United States, 297 F.2d 135 (5th Cir. 1961). That case, which dealt with signing the name of another, real person to checks, is completely inapposite. The absence of any "S. B. Marlin" from the scene of appellants' operations eliminates the need to prove lack of authorization as a

separate element of the offense. III. Rendition of Judgment

from the...