U.S. v. Steed, 79-5294

• Decision Date: 25 March 1982
• Docket Number: No. 79-5294,79-5294
• Citation: 674 F.2d 284
• Parties: 10 Fed. R. Evid. Serv. 147 UNITED STATES of America, Appellant, v. Daryls Foster STEED, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 284

674 F.2d 284

10 Fed. R. Evid. Serv. 147

UNITED STATES of America, Appellant, v. Daryls Foster STEED, Appellee.

No. 79-5294.

United States Court of Appeals Fourth Circuit.

Argued Oct. 6, 1981.

Decided March 25, 1982.

John S. Edwards, U. S. Atty., Jean B. Weld, Asst. U. S. Atty., Roanoke, Va., for appellant.

Craig T. Redinger, Charlottesville, Va., for appellee.

Before WINTER, Chief Judge, and BUTZNER, RUSSELL, WIDENER, HALL, PHILLIPS, MURNAGHAN, SPROUSE, ERVIN and CHAPMAN, Circuit Judges.

BUTZNER, Circuit Judge:

The United States appeals from the district court's judgment of acquittal of Darlys Foster Steed after a jury found her guilty of mail fraud and furnishing a false statement to a government agency. We reach the following conclusions with respect to the four issues the appeal raises: (1) we have jurisdiction to hear the appeal; (2) we can review the district court's assessment of the sufficiency of the evidence; (3) the district court erred when it held that the evidence was insufficient to sustain the jury's verdict; (4) the district court did not err in the admission of evidence, and its alternative grant of a new trial is unwarranted. Consequently, we vacate the judgment of acquittal and remand the case for reinstatement of the verdict of the jury and entry of judgment against Steed. ¹

I

Although the Supreme Court has not decided the precise jurisdictional question raised by this appeal, its decisions construing the Criminal Appeals Act of 1970, 18 U.S.C. § 3731, and the double jeopardy clause of the fifth amendment dispense with the need for extended discussion. The Court has held that by enacting § 3731 Congress "intended to remove all statutory barriers to Government appeals and to allow appeals whenever the Constitution would permit." United States v. Wilson, 420 U.S. 332, 337, 95 S.Ct. 1013, 1018, 43 L.Ed.2d 232 (1975). Thus, the meaning of the double jeopardy clause becomes critical to the government's right of appeal.

Recently in the course of reviewing the principles derived from this clause, the Court pointed out that "the Double Jeopardy Clause does not bar a Government appeal from a ruling in favor of the defendant after a guilty verdict has been entered by the trier of fact." United States v. DiFrancesco, 449 U.S. 117, 130, 101 S.Ct. 426, 433, 66 L.Ed.2d 328 (1980). To illustrate this dictum, the Court cited two cases that held that the government could appeal judgments of acquittal based on the insufficiency of the evidence to sustain the verdicts of guilty. ² The Court explained the rationale for this principle in United States v. Wilson, 420 U.S. at 344-45, 95 S.Ct. at 1022-23:

(W)here there is no threat of either multiple punishment or successive prosecutions, the Double Jeopardy Clause is not offended. In various situations where appellate review would not subject the defendant to a second trial, this Court has held that an order favoring the defendant could constitutionally be appealed by the Government. Since the 1907 Criminal Appeals Act, for example, the Government has been permitted without serious constitutional challenge to appeal from orders arresting judgment after a verdict has been entered against the defendant.... Since reversal on appeal would merely reinstate the jury's verdict, review of such an order does not offend the policy against multiple prosecution.

We therefore conclude that we have jurisdiction to hear the government's appeal, and we turn next to the question of the standard governing our review of the district court's judgment of acquittal.

II

At the outset, we cannot accept the suggestion that we must accord absolute deference to the district court's determination that the evidence is insufficient. This standard of review, now pressed by Steed on rehearing, initially was prescribed by the panel for reasons cogently stated in its opinion. ³ Admittedly, this practice would achieve symmetry in the disposition of all judgments of acquittal based on insufficiency of the evidence whether granted before the case is submitted to the jury or after the verdict. ⁴ But the attainment of this goal would be at the expense of interests the Congress deemed important. By enacting 18 U.S.C. § 3731 to enable the government to appeal adverse judgments unless the "Constitution prohibits further prosecution," Congress did not act on the basis of any perception that the trial judge should be permitted to assess the evidence conclusively. On the contrary, it expressed its preference for appellate review to the extent permitted by the double jeopardy clause. In short, insofar as the Constitution permits, Congress granted the government an appeal of right no less expansive than that accorded to defendants. This change in policy, wrought by the Criminal Appeals Act of 1970, cannot be given effect by creating a standard of review that defers absolutely to the trial judge's assessment of the evidence.

The proper standard of review is enunciated in Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942): "The verdict of a jury must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it." This is the familiar standard for review of a defendant's claim that the evidence is insufficient to sustain the jury's verdict of guilty. Whether the assessment of the evidence is at the behest of the government or the defendant, the function of the reviewing court is unchanged and consequently the same standard of review is appropriate. This, too, is the conclusion reached by other courts that have reviewed post-verdict judgments of acquittal. ⁵

III

The jury found Steed guilty of furnishing a false statement to the Department of Housing and Urban Development (HUD) in violation of the Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1717. ⁶ She also was found guilty of mail fraud for causing the false statement to be mailed to HUD in violation of 18 U.S.C. § 1341.

After return of the verdict, the district court entered a judgment of acquittal because "no rational finder of fact could have found proof of guilt beyond a reasonable doubt on the evidence that was before the jury...." ⁷

To sustain the charge of violating 15 U.S.C. § 1717, the government had to prove that Steed willfully made an untrue statement of material fact in her application to HUD. See United States v. Steinhilber, 484 F.2d 386, 389-90 (8th Cir. 1973). To sustain the charge of mail fraud, the government was required to prove that Steed participated in a scheme to defraud and that she caused the mails to be used to execute or further the scheme. See Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 362, 98 L.Ed. 435 (1954). Both statutes require proof of a specific intent to defraud.

The Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1701, et seq., is a comprehensive statute requiring subdivision developers, unless exempt, to furnish prospective purchasers pertinent information about lots offered for sale. ⁸ Among other things, the developer must disclose a description of access to the property, the availability of facilities for sewage, water, and other utilities, and the nature of the improvements to be installed by the developer. The Act subjects developers who furnish false information to both civil liability and criminal penalties.

Section 1702 authorizes the Secretary of HUD to exempt developers from complying with the Act if he finds enforcement is not necessary for the public interest because of the "small amount involved or the limited character of the public offering." Pursuant to this authority, the Secretary promulgated 24 C.F.R. § 1710.14 (1974) exempting subdivisions of less than 300 lots that met certain other conditions. In addition to releasing the developer from complying with the Act, exemption substantially reduces the filing fee.

Steed was president and sole stockholder of Parkway Development Corporation, which was formed to sell 86 lots comprising a subdivision carved from a 460 acre tract owned by Thomas Beasley. Parkway, as a result of representations made by Steed that only 86 lots were involved, received an exemption from HUD. To procure this exemption Steed certified: "There is no additional land owned or under option or other consideration for purchase by the developer that might be offered as part of a common promotional plan." The indictment alleged that this statement was false.

Steed contends that the evidence was insufficient to show a common promotional plan and that even if there were such a plan, it evolved after she made the certification. Consequently, she asserts, the evidence was insufficient to show that she acted with fraudulent intent. At the most, she protests, she was simply a figurehead for her husband's and Beasley's enterprise.

Neither Steed nor her husband testified, so the jury had to ascertain from circumstantial evidence the extent of her knowledge about a common promotional plan to sell lots in more than one subdivision and whether she had a fraudulent intent when she applied to HUD for the exemption. The proof established that Steed had experience in the promotion and advertising of subdivision lots. She owned and operated Incentive Productions, Inc., a Memphis, Tennessee, company which engaged in this business. Her company received more than $66,000 from the sale of Parkway lots. In addition, she received over $40,000 in commissions and reimbursement for expenses.

The evidence also disclosed that if Beasley's 460 acre tract were marketed as a single subdivision, it would not qualify for exemption from the Act. To procure exemption, Beasley ultimately used three development corporations to offer lots in contiguous subdivisions. The first of these corporations was Parkway of which Steed was the president and sole stockholder. She did not own stock in the other two. Parkway was allotted 86 lots, and Steed agreed that Beasley was to receive...