651 F.2d 1188 (6th Cir. 1981), 79-5203, United States v. Robinson
|Citation:||651 F.2d 1188|
|Party Name:||UNITED STATES of America, Plaintiff-Appellee, v. Edward J. ROBINSON, Defendant-Appellant.|
|Case Date:||June 09, 1981|
|Court:||United States Courts of Appeals, Court of Appeals for the Sixth Circuit|
[Copyrighted Material Omitted]
Argued April 11, 1980.
Sharon Edwards, George Edwards, Detroit, Mich., for defendant-appellant.
James K. Robinson, U. S. Atty., Martin Reisig, Detroit, Mich., Thomas H. Sear, Asst. U. S. Atty., New York City, for plaintiff-appellee.
Before ENGEL and JONES, Circuit Judges, and CECIL, Senior Circuit Judge.
NATHANIEL R. JONES, Circuit Judge.
Edward J. Robinson, Arnold Aronoff and Jerome Castle were indicted in the Southern District of New York for fraudulently inducing Penn-Dixie Industries, Inc., to purchase undevelopable swampland in Putnam County, Florida. Robinson's trial was severed from that of his co-defendants and transferred to the Eastern District of Michigan. He appeals from his jury conviction for aiding and abetting a mail and a wire fraud in violation of 18 U.S.C. §§ 1341, 2 and 1343, 2, respectively. Robinson argues that: (1) the three-count indictment relating to him is multiplicitous and duplicitous; (2) the district court erred by failing to
grant a directed verdict on the substantive offenses due to an acquittal on a conspiracy count; (3) the mail fraud for which he was convicted is independent of the underlying fraud alleged in the indictment; and (4) the Assistant United States Attorney's closing argument improperly commented on his failure to testify and present a defense. Because we hold that these and other allegations of error are without merit, the conviction is affirmed.
In 1967, Edward J. Robinson was appointed Executive Director of the Metropolitan Detroit Citizens Development Authority (MDCDA). MDCDA was a coalition of citizens working to develop comprehensive urban redevelopment strategies. In 1971, Robinson met Arnold Aronoff, an experienced real estate investor who served as a Trustee of MDCDA. Shortly thereafter, Robinson terminated his employment and formed two businesses. The E. J. Robinson Company specialized in real estate development and federally-subsidized multi-family housing programs. The Detroit Equity Group marketed real estate tax shelters for wealthy individuals.
In early 1971, Aronoff hired Robinson to prepare a comprehensive "feasibility study" of the economic, legal and social factors for a 2,000-acre development in Deerfield Park, Florida. Robinson's final report was submitted to the federal government to obtain loan guarantees. Robinson also participated in a 120-plat single-family home and 200-acre campground development. Aronoff, as grantor of a trust, participated as one of Robinson's partners in the campground development. Additionally, Robinson served as a director of PAXCO, a company specializing in land development in Florida. As a result, Robinson became a sophisticated, experienced businessman, expert in real estate development and Aronoff's close personal friend.
During this time period, Aronoff was the principal owner of Levy and Company, a Michigan-based corporation marketing ready-mix concrete. Levy and Company was Penn-Dixie's major Michigan account. Penn-Dixie is a publicly-held steel and cement company, headquartered in New York City. Since 1967, Penn-Dixie and Levy and Company have been involved in numerous complex financial transactions together. Jerome Castle, who controlled Penn-Dixie, and Aronoff were business partners and intimate friends for many years.
Having introduced the major actors in this case, and set as a backdrop their symbiotic business and personal relationships, the scheme to defraud Penn-Dixie of several million dollars unfolds. In the spring of 1973, Aronoff, through a foreign trust he controlled, obtained an option to purchase a 12,500-acre tract in Putnam County, Florida. The eastern 5,500 acres is primarily mosquito- infested swampland; the land in the western 7,000 acres is higher, drier and had several buildings on it. The option price for the 12,500 acres was $5,250,000. Aronoff, Castle and Robinson devised a scheme by which Penn-Dixie was to purchase the relatively worthless eastern 5,500-acres for $5,800,000 or $550,000 more than the price paid by Aronoff for the entire 12,500 acres. Robinson provided false validity to the notion that the eastern 5,500 acres were developable and could be quickly resold by Penn-Dixie for a handsome profit.
On May 30, 1973, Robinson sent the following letter on the stationery of the Edward J. Robinson Company to Penn-Dixie outlining a proposed development of the eastern 5,500 acres:
It has been brought to my attention that you have under your control a sizeable track of vacant land in Putnam County, Florida....
Currently I represent an experienced development group that desires to undertake a large scale community project in Florida.... I also represent investors who are interested in equity positions in large scale developments. I have talked with some of them tentatively about this development. These gentlemen include Mr. Arnold Aronoff, Vice President of the Edward C. Levy Company, Harold McGregor, Director of Lear Siegler Corporation,
John, Joseph & Jerry Steward of Fabristeel Products & Multifastener.
On a preliminary basis I would like to discuss with you a joint venture which would provide your firm with considerable return on your investment .... your company would have a substantial partnership equity interest in the profits of this development....
The letter was false in several material aspects. First, Robinson knew that Penn-Dixie did not "control" the property but was considering its purchase at $1,050 per acre. Second, Robinson had not determined the feasibility of the development of the property. Indeed, there is every indication that Robinson knew much of the eastern 5,500 acres were undevelopable swamp. Third, the "investment group" was fictitious. Robert Bowen, Harold McGregor, and the Stewards testified at trial that they neither talked to Robinson about the development nor authorized him to represent them. Fourth, Robinson knew, but did not disclose, that Aronoff owned the entire 12,500 acres and planned to sell only the eastern 5,500 acres.
On June 27, 1973, a more detailed letter regarding the development of the eastern 5,500 acres was sent to Penn-Dixie. 1
Though the letter was on Robinson's company's stationery and bore the apparent manual signature of Robinson, it was dictated by Aronoff and signed by his secretary. Robinson received a copy of the letter for his file. The letter listed prominent corporate executives as members of Robinson's proposed development group. Several of the executives testified at trial that they neither talked to Robinson about the proposal outlined in the letter nor authorized the use of their names.
Robinson's involvement in the fraudulent scheme continued. He had a professional study of the development of the 5,500 acres prepared to convince Penn-Dixie's board of directors that the eastern 5,500 acres could be quickly resold at a substantial profit. Robinson's brother-in-law, Thomas Bosse, an associate of Interscience, Inc., a research and consulting firm, supervised the preparation of a "feasibility report." The feasibility report was materially false and misleading. Based upon data supplied by only Robinson, the feasibility report assumed that the eastern 5,500 acres were a rural utopia: "gently rolling with sandy hills." Penn-Dixie's projected profit from the development of the 5,500 acres exceeded $60 million. Conspicuously absent from the feasibility report were cost estimates attendant to developing swampland. Neither Robinson nor Bosse's names appeared within the feasibility report. One individual whose name was listed as providing data testified that he had not participated in the preparation of the feasibility report.
Interscience's feasibility report was completed on June 15, 1973, and transmitted shortly thereafter. Penn-Dixie's chief financial officer presented Robinson's letters and Interscience's feasibility report to Penn-Dixie's banks to obtain approval of the purchase of the eastern 5,500 acres. On August 13, 1973, Castle signed an agreement of sale to purchase the eastern 5,500 acres from "Erwin Ziegelman, Trustee." Though Ziegelman was trustee for Aronoff's trust, Castle told Penn-Dixie's board of directors that Ziegelman was trustee for the estate of an unassociated individual. Various members of Penn-Dixie's board of directors received copies of Robinson's letters and Interscience's feasibility report. Based upon such documents, on August 13, 1973, Penn-Dixie's board of directors unanimously ratified the agreement of sale. On October 9, 1973, Erwin Ziegelman, as trustee for Aronoff's trust, exercised his option and purchased the entire 12,500 acre tract for $5,700,000.
A. Wire Fraud
On October 10, 1973, Ziegelman, as trustee, sold the eastern 5,500 acre tract to Penn-Dixie. A $1,025,000 downpayment was made by a wire transfer from a bank in New York City to Ziegelman's trust account at a bank in Detroit, Michigan. Mortgage notes were signed for the balance.
B. Mail Fraud
In August 1973, Robinson asked his friend, Stephen Miller, for assistance in obtaining a payment from Penn-Dixie. Miller lived in Washington, D.C. and was associated with Holmes, Harmon, a real estate financing firm. Robinson told Miller that he (Robinson) had arranged for the preparation of a feasibility report for Penn-Dixie for a $34,000 fee, but that he had received only $17,000. At Robinson's request, Miller agreed to bill Penn-Dixie $17,000 for a review of Interscience's feasibility report. Miller was to...
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