653 F.2d 1343 (9th Cir. 1981), 79-1738, United States v. Walker

Docket Nº:79-1738.
Citation:653 F.2d 1343
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. George E. WALKER, Defendant-Appellant.
Case Date:August 17, 1981
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 1343

653 F.2d 1343 (9th Cir. 1981)

UNITED STATES of America, Plaintiff-Appellee,

v.

George E. WALKER, Defendant-Appellant.

No. 79-1738.

United States Court of Appeals, Ninth Circuit

August 17, 1981

Argued and Submitted Sept. 5, 1980.

Page 1344

Norman Sepenuk, Portland, Or., for defendant-appellant.

Margaret G. Halpern, U. S. Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Appeal from the United States District Court for the District of Oregon.

Before ALARCON and CANBY, Circuit Judges, and HOFFMAN [*], District Judge.

WALTER E. HOFFMAN, District Judge:

Defendant appeals from a jury conviction for conspiring to defraud the United States by bid-rigging a timber sale by the United States Forest Service in violation of 18 U.S.C. § 371. The same jury acquitted him of a Sherman Act § 1 antitrust charge of conspiring to restrain trade in violation of 15 U.S.C. § 1 as to the same timber sales. 1 He was sentenced to a term of two years, but only required to serve 90 days and pay a $10,000 fine, with a five-year probationary period to follow his confinement.

Walker first argues that the indictment, which was returned on January 24, 1979, was barred the the applicable statute of limitations 2 as having been returned more than five years after the commission of the offense. He claims the defrauding offense was committed when he filed a false certificate that no bid-rigging had taken place in connection with his bid on the two timber sales in June, 1972. The conspiracy ended, he claims, when the Forest Service awarded Walker the two contracts in reliance upon the false representations in the certificates. The Government, on the other hand, sees the conspiratorial offense as being extended each time Walker cut timber, which was only finished in August and September, 1975, and paid off his co-conspirators, some of which payoffs occurred well within the five-year period. The second error Walker cites is unfair prejudice at trial as a result of alleged multiplicity in the conspiracy indictment. He contends that two conspiracies may not be alleged where only one agreement is involved, albeit to violate two distinct statutes. The Government answers that Walker cannot protest prejudice from multiplicity unless convicted on both counts and thereafter given cumulative sentences, and that, even if he could, the two conspiracy charges neither amounted to prosecutorial abuse nor were multiplicious where two specific conspiracy statutes were violated. We agree with the Government on both issues and uphold Walker's conviction based on our conclusion that the defrauding charge was not time-barred and that the indictment was not multiplicious.

On June 23, 1972, the Forest Service opened sealed bids from six companies or individuals on the timber to be cut from two tracts of land in Oregon. The bidders were Walker; the Murphy Company (Murphy), for whom Walker's co-defendant Smejkal acted as an agent; Coos Head Timber Company (Coos Head); West Coast Orient Company (W.C.O.); and two other companies not involved in this case. Each bid was accompanied by a Certificate of Independent Price Determination. All the written bids except Walker's were for the minimum acceptable price set by the Forest

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Service, and no oral bids were offered at the auction. Therefore, Walker's offer of five cents per thousand board feet over the minimum was successful. The Government contended that Walker rigged bids with three other bidders Smejkal, Coos Head, and W.C.O. and two who regularly bid for Port Orford cedar 3 but did not bid on the Sucker Creek and Tellim sales Matthews and Ocean Terminals Company (O.T.). Its contention was backed up by circumstantial evidence offered at trial of payments to these five companies and individuals, allegedly payoffs for their presale agreement with Walker that his would be the only bid over the minimum, thus forcing the Forest Service to sell the timber at an artificially deflated price.

The day after the sale Walker and Matthews entered into a joint-venture agreement to share all profits and costs of the two sales, but Walker failed to honor the agreement, instead sharing profits with Smejkal and selling all the Port Orford cedar to W.C.O. for resale to Japan. Walker's and Smejkal's profit-sharing agreement on the sales was dated three days before the actual sale. Walker had W.C.O. pay Murphy the money actually went to Murphy's agent, Smejkal $25 per thousand board feet cut on the two tracts, for a total of $100,000, as shown on Walker's statements to W.C.O. Matthews testified that Walker told him the payments were to keep Murphy from bidding at the two sales. Walker sold the Douglas fir to Coos Head for $90 per thousand board board feet, $40 under its $130 market value. A W.C.O. official testified Walker said this procedure saved him from having to write checks to Coos Head for the $40 amount. Walker insisted that W.C.O. use O.T. for loading and storing the logs W.C.O. bought from him, even though O.T.'s charge was $23.50 per thousand board feet and W.C.O.'s usual log handler only charged $12.50. W.C.O. only agreed to do so on condition that the excess payments be subtracted from the sale price W.C.O. paid to Walker. 4

STATUTE OF LIMITATIONS

The general rule on when time limits begin to run on conspiracy charges was stated by the Supreme Court in Grunewald v. United States, 353 U.S. 391, 397, 77 S.Ct. 963, 970, 1 L.Ed.2d 931 (1957):

(T)he crucial question in determining whether the statute of limitations has run is the scope of the conspiratorial agreement, for it is that which determines both the duration of the conspiracy, and whether the act relied on as an overt act may properly be regarded as in furtherance of the conspiracy. (Emphasis supplied)

The scope of Walker's agreement with his co-conspirators must be inferred from the circumstantial evidence, there being no direct testimony as to what was agreed upon.

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From that evidence 5 a jury could have concluded that one aim of the agreement was for Walker to repay each co-conspirator who agreed not to bid or to bid only the minimum, and, that being an aim of the conspiracy, that it lasted through the division of the excess profits Walker made on the sale among the co-conspirators. 6

Walker argues that, as a matter of law, the essence of a conspiracy such as this one is the filing of a false statement to defeat a legitimate government function and thus his offense is not chargeable under § 371 as a conspiracy to defraud the United States, which charge he calls a ploy to apply a longer statute of limitations. He sees the criminal objective here as accomplished with the award to Walker in reliance on the filing of false certificates with the Forest Service. He cites as authority Bridges v. United States, 346 U.S. 209, 73 S.Ct. 1055, 97 L.Ed. 1557 (1953), in which the Court held the defendants' crime to be the substantive one, time barred, of obstructing the proper administration of naturalization laws by making false statements, not that of conspiracy to defraud the government under the predecessor statute to § 371. "The use in Count I of language copied from the second (defrauding) clause of the conspiracy statute merely cloaks a factual charge of conspiring to cause, or knowingly to aid, Bridges to make a false statement....", id. at 224, 73 S.Ct. at 1063. Fraud was not "an essential ingredient of the offense of making a false material statement under oath in a naturalization proceeding," id. at 222, 73 S.Ct. at 1062 and thus Bridges could not be charged with defrauding the government in violation of § 371. In addition, the Wartime Suspension of Limitations Act that the government sought to apply to toll the time period for the indictment only applied "where the fraud (was) of a pecuniary nature or at least of a nature concerning property." Id. at 215, 73 S.Ct. at 1059.

The Court later explained its decision in Bridges as based on an unwillingness to allow prosecutorial sleight-of-hand. In Dennis v. United States, 384 U.S. 855, 863, 86 S.Ct. 1840, 1845, 16 L.Ed.2d 973 (1966), the Court said, "The decision there (in Bridges) did not turn upon construction of § 371." The sole purpose of characterizing the charge in Bridges as a § 371 conspiracy to defraud was "to revive a stale prosecution" by use of the Wartime Act, which was only intended to suspend time limits on pecuniary fraud or fraud on property. Id. The defendants in Dennis, in contrast, who conspired to file false non-Communist affidavits with the National Labor Relations Board in order to be able to employ its services, were properly charged under § 371 with conspiracy to defraud the government, although they also could have been indicted for a § 371 conspiracy to violate 18 U.S.C. § 1001, forbidding the filing of false statements with a government agency. Id. at 863-64 n. 8, 86 S.Ct. at 1845-46 n. 8. Both charges were applicable to defendants' conduct; the choice of a § 371 defrauding action was not an attempt to escape a time bar, as either action would have been timely as long as one overt act took place within the necessary time span. Id. As in Dennis, the fraud here involved a false statement to a government agency and the later enjoyment of the fruits of that deception and was properly charged as a § 371 fraud. Therefore, the last overt act of this conspiracy was not the filing of the false certificates, because the agreement itself aimed beyond merely defeating the government

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process of competitive bidding and encompassed the ultimate objective of making excess profits to be shared among the co-conspirators. This reading of the extension of Walker's conspiracy is buttressed by the decision in Bramblett v. United States, 231 F.2d 489, 491 (D.C.Cir.), cert. denied, 350 U.S. 1015, 76 S.Ct. 658, 100 L.Ed. 874 (1956), in which the District of Columbia Circuit found a falsification scheme by a...

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