U.S. v. Casperson, s. 84-2085

• Decision Date: 17 September 1985
• Docket Number: 84-2098 and 84-2145,Nos. 84-2085,84-2097,s. 84-2085
• Citation: 773 F.2d 216
• Parties: UNITED STATES, Appellee, v. Jack CASPERSON, Appellant. UNITED STATES, Appellee, v. Bernard Philip PLETCHER, Appellant. UNITED STATES, Appellee, v. Ronald A. SABLOSKY, Appellant. UNITED STATES, Appellee, v. Gerald RUIS, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 216

773 F.2d 216

UNITED STATES, Appellee, v. Jack CASPERSON, Appellant.

UNITED STATES, Appellee, v. Bernard Philip PLETCHER, Appellant.

UNITED STATES, Appellee, v. Ronald A. SABLOSKY, Appellant.

UNITED STATES, Appellee, v. Gerald RUIS, Appellant.

Nos. 84-2085, 84-2097, 84-2098 and 84-2145.

United States Court of Appeals,

Eighth Circuit.

Submitted May 13, 1985.

Decided Sept. 17, 1985.

Richard Braithwaite, Raymond Rosenberg & Patrick J. Kane, Sioux Falls, S.D., for appellants.

David L. Zuercher and Robert A. Mandel, Pierre, S.D., for appellee.

Before LAY, Chief Judge, BRIGHT, Senior Circuit Judge, and ARNOLD, Circuit Judge.

BRIGHT, Senior Circuit Judge.

Jack Casperson, Bernard Philip Pletcher, Ronald A. Sablosky, and Gerald Ruis appeal from their convictions for violations of 18 U.S.C. Secs. 371 (conspiracy), 1341 (mail fraud), 1343 (wire fraud), and 2314 (inducing interstate travel to defraud). For reversal, appellants challenge the district court's failure to give a "good faith" or theory of defense instruction. In addition, Ruis challenges the sufficiency of the evidence supporting his conviction; Casperson, Pletcher, and Ruis claim that the doctrine of merger bars their conviction on both the substantive counts and the conspiracy count; and Sablosky contends that the trial judge erred in denying his request for a continuance. For the reasons discussed below, we reverse Ruis' conviction, and remand to the district court with instructions to enter a judgment of acquittal. The convictions of Casperson, Pletcher, and Sablosky are also reversed and remanded for a new trial.

I. BACKGROUND.

This case involves a loan scheme in which investors were induced to pay an advance fee in order to obtain long-term, low-interest loans which they never received. Although appellants' accounts of the scheme vary with respect to some details, the central issue in this case concerns not the factual sequence of events, but whether appellants had the requisite intent to defraud.

In late 1981, Phil Pletcher went to Florida in an effort to raise money to finance the construction of an ethanol plant in Iowa. While there, he met Jack Casperson, who was seeking financing for a fish preservation process he hoped to distribute. When neither man was successful in obtaining loan money in Florida, Casperson suggested they go to California and meet with Norman Bernard Thirion, who was reputed to be an international financier with access to foreign funds.

Casperson and Pletcher first met with Norman Thirion in Newport Beach, California, in January 1982. They describe Thirion--as do other witnesses who met him--as a charming and impressive man whose office and home were very lavish and whose credentials as a financier seemed equally impressive. Thirion referred to his experience and connections in international finance in both the European and Arabian money markets, and claimed to have been a financial emissary for Howard Hughes' Suma Corporation. He professed to be a close friend of the royal family of Saudi Arabia, and produced photographs of himself with various members of the royal family. He also displayed pictures of himself with President Anwar Sadat of Egypt and with Adnan Khashoggi, one of the richest men in the world. Thirion indicated that he had access to large sums of money available from a $2 billion trust of Arab oil money. In short, he projected an aura of great personal wealth, international banking experience at the highest level, and the ability to obtain international financing in substantial amounts.

At the initial meeting in January 1982, Thirion informed Pletcher, Casperson, and several other persons who were also seeking loans, that he was involved in a project which would make vast sums of Arab oil money available. He told the group that he could secure a block loan of $250 million for them at a low rate of interest, subject to certain conditions. Thirion indicated that he would require an advance fee or "loan contingency fund" of $250,000 (that figure was later reduced to $160,000) to cover the costs and expenses of obtaining the loan. Although various features of the loan have been explained differently, the borrowers apparently were to receive 96% of the loan, approximately $200 million of which was to be invested in "deep-discount" securities which would be used to pay back the interest and principal on the entire $250 million. The amount remaining would be available to the borrowers to be used for their individual projects.

Thirion invited Pletcher, Casperson and the others to check his bank references, which included the Canadian Permanent Trust Bank, where Thirion said he maintained a trust account for the receipt of overseas funds, and a Mr. Ernest Roark, who, according to Thirion, was vice president of the Bank of America. Pletcher called the Canadian bank and confirmed that Thirion maintained a trust account there. He also called Ernest Roark at Bank of America, who gave a favorable account of Thirion's financial activities. ¹ Several others present at the January meeting decided to opt out of the transaction after being told that Thirion would not place the advance money in escrow, and after receiving unfavorable information when they checked on Thirion's background. However, Pletcher and Casperson decided to pursue the loan.

In February 1982, Pletcher and Casperson formed a corporation, International Financial Services Group (IFSG), through which they entered into a written agreement with Thirion, acting on behalf of his company, International Banking Services (IBS), for a $250 million, twenty-year loan to be made upon receipt of $160,000. ² Because Pletcher and Casperson could not come up with that amount themselves, they decided to make a portion of the loan money available to other investors who were also looking for loans and who could afford to put up the money necessary to cover the loan contingency fee. To this end, they held a series of meetings with potential investors in February, March, and April of 1982 in Iowa, Minnesota, South Dakota, and California. Those who attended the meetings were told that the $250 million available to IFSG through Thirion was greater than needed; that the excess was being made available to others to enable IFSG to raise a required $160,000 advance fee; that an advance fee of $20,000 was required for every $1 million the investor wished to borrow; that the advance fee would be returned when the loan was obtained (generally in six to eight weeks); and that investors were to pay 10 3/4% interest, which was 1% more than IFSG was paying for the money and considerably less than the prime rate then being charged by commercial lenders. Investors were also told that the return of their advance fees would be guaranteed by commissions and proceeds from a separate venture involving the sale of large quantities of Mexican tuna fish. ³

Appellant Gerald Ruis was employed by IFSG in March of 1982. He performed certain clerical duties for the corporation, attended several of the meetings IFSG held for potential investors, and explained the loan program to one prospective investor and his wife at a meeting in Adrian, Minnesota.

By April of 1982, investors had paid more than $400,000 in advance fees, an amount considerably in excess of the $160,000 IFSG supposedly needed to obtain the loan. Although the original time for completion of the loan was supposed to be the end of April, that date passed and Thirion produced no loan money and returned none of the advance fees. Months went by without results, but Thirion always managed to come up with some plausible excuse for the delay. Casperson, Pletcher, Thirion, and attorney Ronald Sablosky, who was vice president and corporate counsel for IBS, conveyed these excuses to investors, explaining, among other things, that the delay was due to the Iran-Iraq war, problems caused by the Ayotollah Khomeni or the Palestinians, Israeli invasions of one country or another, Moslem religious holidays, and the royal wedding in England. In addition to these and other excuses, investors received various documents sent in an effort to reassure them that their advance fees were not at risk. These included documents about the Mexican tuna transaction, the proceeds of which were supposedly intended to secure the advance fees, a promissory note to each investor from Casperson, and a June 1982 letter from Thirion to the investors explaining that IBS was fully guaranteeing Casperson's promissory notes to protect their advance fees. In addition, Sablosky wrote to investors stating that he held securities sufficient to cover the IBS guarantee in his attorney trust account.

On September 14, just before the notes issued by Casperson and guaranteed by Thirion's company, IBS, came due, Sablosky wrote the investors again explaining that, because of unstable conditions in the Mid-East, Thirion had not yet obtained the loans although he was still "working on it." Sablosky advised the investors that they could cancel their loan request and IBS would refund 90% of their advance fee (the remaining 10% was to be returned at a later time if possible). He attached a form for obtaining a refund, and IBS repaid several investors who returned the form during the month of October. However, other investors who requested a refund in November were not paid because, according to Sablosky, no money remained in company accounts. In all, IBS refunded less than $100,000.

Thirion left the United States in late fall of 1982 and did not return. ⁴ It became apparent that no loans were forthcoming, that Casperson's guarantees were based on commissions and proceeds from a Mexican canned tuna transaction that never took place, and that the securities Sablosky purportedly held in trust to cover IBS' guarantee of Casperson's promissory notes were worthless.

In December 1983, a federal grand jury indicted appellants, charging them with conspiracy, mail fraud, wire fraud,...