U.S. v. Neal

• Decision Date: 30 September 1983
• Docket Number: No. 82-2309,82-2309
• Citation: 718 F.2d 1505
• Parties: 14 Fed. R. Evid. Serv. 291 UNITED STATES of America, Plaintiff-Appellee, v. Herb NEAL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1505

718 F.2d 1505

14 Fed. R. Evid. Serv. 291

UNITED STATES of America, Plaintiff-Appellee, v. Herb NEAL, Defendant-Appellant.

No. 82-2309.

United States Court of Appeals, Tenth Circuit.

Sept. 30, 1983.

Rehearing Denied Feb. 17, 1984.

Gene Stipe, Oklahoma City, Okl. (Robert K. McCune, Oklahoma City, Okl., with him on brief) of Stipe, Gossett, Stipe, Harper, Estes, McCune & Parks, Oklahoma City, Okl., for defendant-appellant.

Susie Pritchett, Asst. U.S. Atty., Oklahoma City, Okl. (William S. Price, U.S. Atty., Oklahoma City, Okl., also on brief), for plaintiff-appellee.

Before HOLLOWAY, McWILLIAMS and SEYMOUR, Circuit Judges.

HOLLOWAY, Circuit Judge.

This is a direct appeal by the defendant-appellant Herb Neal from his convictions on thirty-three counts of a thirty-four count indictment charging him with mail fraud and aiding and abetting mail fraud, in violation of 18 U.S.C. Sec. 1341 and 18 U.S.C. Sec. 2. ¹ Neal was sentenced to terms of five years' imprisonment on each of his convictions, Count II to run consecutively to Count I and Counts III through XXII and XXIV through XXXIV to run concurrently to Count I. He was also fined $1,000.00 for each of the first two counts.

Viewing all the evidence, direct and circumstantial, together with all reasonable inferences therefrom, in the light most favorable to the Government as we must on this appeal from a guilty verdict, United States v. Twilligear, 460 F.2d 79, 81-82 (10th Cir.), the evidence tended to show the following:

I

Background

This case is one of many that arose from an extensive investigation by the F.B.I., the I.R.S., and the United States Attorneys for Oklahoma into payment to numerous county commissioners of kickbacks, by suppliers of equipment or materials purchased by the counties for road and bridge building and maintenance. During the period covered by the indictment Neal worked as a salesman for three companies in Ponca City, Oklahoma, that supplied such materials. All thirty-four counts were premised on allegations that Neal and others devised a scheme to defraud various counties and the citizens thereof "by depriving them of their right to have county business conducted openly, honestly, impartially, and free from corruption and undue influence by their elected County Commissioner and to use the ... mails in furtherance of the scheme." (I R. 93). Cf. United States v. Mandel, 591 F.2d 1347, 1362 (4th Cir.), cert. denied, 445 U.S. 961, 100 S.Ct. 1647, 64 L.Ed.2d 236 (bribery of public official satisfies fraud element of the mail fraud statute); United States v. Gann, 718 F.2d 1502, 1503 n. 2 (10th Cir.).

Seven different county commissioners testified at trial that they had received kickbacks from Neal. ² (E.g., V R. 248-50; VI R. 322-24, 409, 483, 547-48, and 573). Some stated that they had received kickbacks on every purchase from Neal while others testified that the kickbacks were only occasional. Moreover, some commissioners testified that not all suppliers gave kickbacks but they always tried to do business with suppliers like Neal who did give kickbacks. (E.g., V R. 325). The payments generally approximated 10% of the purchase price. Some commissioners further testified that they had accepted "50-50 splits" from Neal, also known as "split" or "blue-sky" deals, in which the commissioner would order materials or supplies from Neal, the county clerk would issue a warrant, i.e., check, to Neal as payment for the goods, the goods would not be delivered, and the commissioner and Neal would split the amount of the warrant between themselves.

Oftentimes the kickback was agreed to before a purchase was consummated, but generally the agreement was tacit that a kickback would be forthcoming. The kickback payment generally occurred after the county clerk had mailed the warrant to Neal and the material or supplies were delivered. Furthermore, the kickbacks were paid in cash and in a surreptitious manner with no one present but Neal and the commissioner, frequently while the parties were alone in Neal's car. In addition, six county clerks testified that warrants in payment for materials or supplies were always mailed unless the supplier was local and personally picked up the warrant. (V R. 43, 50, 110, and 183). With respect to the counts on which these convictions resulted, mailing of the warrants was proved.

In his defense, Neal offered the testimony of several county commissioners to the effect that he never offered or paid them kickbacks, and that of several character witnesses who testified that Neal had a good reputation in his community. Neal also took the stand and testified that he had never paid a kickback, that the Government's witnesses were lying, and that some of the Government's witnesses had told him that they were simply going to tell the F.B.I. whatever they wanted to hear.

For reversal, Neal asserts that the trial court erred (1) in denying his motion for judgment of acquittal or in the alternative for a new trial because the evidence was insufficient to prove that the mails were used in furtherance of a scheme or artifice to defraud; (2) in overruling his motion in limine regarding evidence of the relationship between a Government witness and two of Neal's in-laws; (3) in not granting a pretrial request for a change of venue based on prejudicial pretrial publicity, and; (4) in denying his motion in limine concerning the introduction of evidence outside the times and places set forth in the indictment.

II

At the close of the Government's case Neal moved for a judgment of acquittal, claiming that the evidence had failed to show that the mailings were an integral part of the scheme. (VII R. 702-09). The motion was overruled, and then renewed at the close of all the evidence, and again overruled. (I R. 163-69; VII R. 710-11 and 958-59). Again, after the verdict Neal moved for a judgment of acquittal or, in the alternative, for a new trial, asserting the same argument. (I R. 187-91); see F.R.Crim.P. 29(c). On appeal Neal asserts that the trial court erred in overruling these motions in that the evidence failed to show that the use of the mails was an integral part of the scheme. (Brief of Appellant at 5 and 9).

Neal devotes the majority of his argument on this issue to Counts XXX through XXXIV, Counts that charged kickbacks from lease-purchase transactions rather than direct purchases. ³ Relying on United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974), Parr v. United States, 363 U.S. 370, 80 S.Ct. 1171, 4 L.Ed.2d 1277 (1960), Kann v. United States, 323 U.S. 88, 65 S.Ct. 148, 89 L.Ed. 88 (1944), and United States v. Lynn, 461 F.2d 759 (10th Cir.), inter alia, Neal contends that the mailings by the counties to the banks of monthly lease-purchase payments were "totally unrelated and not an integral part of the scheme," reasoning that the kickbacks had been paid prior to the use of the mails and thus the mailings played no role in the completion of the scheme. (Brief of Appellant at 9-10). Furthermore, Neal contends that the Government's proof as to the use of the mails was inadequate in the counts alleging kickbacks on direct purchases as well. (Id.).

We see no need to delve into these arguments in detail as we have considered and rejected them in related cases filed today. See United States v. Primrose, 718 F.2d 1484 (10th Cir.); United States v. Gann, 718 F.2d 1502 (10th Cir.); and see United States v. Whitt, 718 F.2d 1494 (10th Cir.); United States v. Boston, 718 F.2d 1511 (10th Cir.).

In Primrose we held that the mailing of the warrants from the county clerk to the vendor was an essential part of the scheme, regardless of whether the kickback was paid before or after the mailing. Primrose, supra, at 1488 - 1489. There, the defendant was a county commissioner and the argument that the scheme was complete upon receipt of the kickback was rejected. Here, Neal being the salesman for various vendors, the mailing of warrants to the vendors is even more closely within the scheme. Likewise in Gann, a case involving a lease-purchase agreement, we found the mailing of a warrant from the county clerk to a bank to be an integral part of the entire transaction and in furtherance of the scheme to defraud. Gann, supra, at 1504.

The circumstances in the instant case are similar to those in Primrose, Gann, Whitt, and Boston and the mailings in all these cases were sufficient to bring the charges within the purview of Sec. 1341. Viewing the evidence in the light most favorable to the Government as we must in reviewing the district court's refusal to grant a motion for judgment of acquittal, United States v. Tager, 481 F.2d 97, 100 (10th Cir.), cert. denied, 415 U.S. 914, 94 S.Ct. 1410, 39 L.Ed.2d 469, we conclude that the trial court did not err and that Neal's argument that the evidence was insufficient to support the mail fraud convictions is without merit.

III

Neal next contends that the court erred in refusing to grant his pretrial motion in limine by which he asked the trial court to direct the Government not to refer to evidence concerning relationships between Government witness Dorothy Griffin and Neal's father-in-law, Ralph Stewart, or brother-in-law, Monty Stewart. ⁴ (I R. 144). The motion was overruled. (I R. 146).

Griffin testified that she was the owner of a lumber company that frequently did business with county commissioners and other suppliers to county commissioners. (III R. 657). Griffin stated that her company provided a "service" to other vendors, among them Stewart Supply Company. The "service" provided was as follows: a supplier would give her a check for the purchase of materials or supplies which neither party ever intended to be delivered, Griffin would cash the check and return ninety to ninety-five percent of the cash to the supplier along with a bogus invoice for the undelivered goods, and Griffin would keep the balance of the cash as her commission. (VI R. 658-61). The...