788 F.2d 210 (4th Cir. 1986), 84-5215, United States v. Stockton

Docket Nº:84-5215.
Citation:788 F.2d 210
Party Name:UNITED STATES of America, Appellee, v. Ellison M. STOCKTON, Appellant.
Case Date:April 09, 1986
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

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788 F.2d 210 (4th Cir. 1986)

UNITED STATES of America, Appellee,


Ellison M. STOCKTON, Appellant.

No. 84-5215.

United States Court of Appeals, Fourth Circuit

April 9, 1986

Argued Nov. 8, 1985.

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Jack L.B. Gohn (Gerard P. Martin, Baltimore, Md., on brief), for appellant.

James Barr Moorhead, Asst. U.S. Atty. (Catherine C. Blake, U.S. Atty., Barbara S. Sale, Asst. U.S. Atty., Baltimore, Md., on brief), for appellee.

Before HALL, MURNAGHAN and WILKINSON, Circuit Judges.

MURNAGHAN, Circuit Judge:

Ellison Stockton appeals from his conviction of embezzlement of the assets of a labor union in violation of 29 U.S.C. Sec. 501(c). 1 Stockton makes four arguments: (1) that the district court's instructions to the jury incorrectly stated the elements of the statutory violation; (2) that there was insufficient evidence to support the jury's verdict; (3) that certain testimony claimed to be prejudicial should not have been admitted; and (4) that a new trial should have been granted on the basis of newly discovered evidence.


At the time of the events in question here, Ellison Stockton was the president of Local 239 of the United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW), a labor organization with over 5,000 active members in the Baltimore area. Stockton was first elected to the presidency of the local in 1961, and remained in office until 1967. In 1969, he was reelected to the presidency, an office he retained until the time of his conviction.

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The building housing the union's offices was owned and managed by an affiliated corporation called the Local 239 Holding Company. The union's Executive Board also served as the board of directors of the Holding Company, and Stockton acted as chairman of the Holding Company board. The Holding Company board met approximately once each year. Stockton apparently had great influence over the other Holding Company directors. Members of the Holding Company board who testified at trial could recall no instance in which the board had defeated a proposal made by Stockton.

Members of the Holding Company board also testified that the board had effectively delegated to Stockton the authority to make decisions concerning the day-to-day cleaning and maintenance of the building. Their testimony indicated that the members of the board did not inquire into such matters as long as things were running smoothly.

In late 1976, the union contracted with Herbert Branch Janitorial Service, Inc., for cleaning the union offices. Branch's monthly charge was $694.00, plus $291.00 for an initial cleaning. Branch submitted monthly invoices and was paid by checks sent through the mail. After only two months, the union terminated its contract with Branch. Stockton notified his office staff that he had engaged the M. Woods Janitorial Service to perform maintenance services at the union offices. Stockton instructed his secretary to draw checks payable to M. Woods in the amount of $200.00 per week. The checks were co-signed by the vice-president of the local, Rodney Trump, and left on Stockton's desk to be picked up by M. Woods.

The government's evidence tended to show that the M. Woods Janitorial Service was fictitious. Stockton never provided his staff or other members of the Holding Company board with an address or telephone number for M. Woods. No written contract was signed, and the office staff never prepared any forms or records relating to the janitorial service. There was no telephone listing for an M. Woods Janitorial Service in the greater Baltimore area. No corporate charter was registered under the name with the Maryland Department of Assessments and Taxation. No witness ever observed a vehicle or other equipment bearing the name "M. Woods Janitorial Service." One union member's grand jury testimony, which was introduced at trial, indicated that, to her knowledge, the M. Woods Janitorial Service was a "joke," and that the cleaning was being done by union members. The prosecution also established that all of the checks drawn to the order of the M. Woods Janitorial Service were deposited in one of Stockton's three bank accounts. There was expert testimony that at least one of the "M. Woods" endorsements was written by Stockton's wife, Mildred. Mildred Stockton had used the surname Woods before her marriage.

The evidence indicated that regular cleaning of the union offices was performed by someone. However, there was testimony that the level of cleaning during the tenure of the M. Woods Janitorial Service was not always satisfactory.

In December, 1978, Stockton told the Holding Company directors that the janitorial service had asked for an advance payment to finance the purchase of new equipment. The board authorized Stockton to issue an advance in an amount somewhere between two and three thousand dollars. Stockton made other "advances" to the janitorial service which were not cleared by the board. When the union vice-president, Rodney Trump, questioned Stockton about several checks payable to M. Woods in large amounts, he was told that the checks were advances to the janitorial company for the purchase of equipment. Each of the large "advance" checks was deposited into one of Stockton's bank accounts. In almost every instance, Stockton drew on the deposit immediately to pay personal expenses.

In August, 1982, Stockton terminated the union's arrangement with the M. Woods Janitorial Service. Genevieve Kruhl, the

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mother of a union member, was hired to clean the offices at $200.00 per week.

Stockton's version of the facts differed in several respects. He testified that there was indeed an M. Woods who performed cleaning services. He stated that Woods' first name was Mark, and provided a physical description of him. Stockton testified that Woods had been recommended to him by a former union official who had died in 1981. He claimed that the checks had been deposited to his accounts because he had cashed the checks and paid Woods in cash.

On February 16, 1984, Stockton was indicted on eleven counts of embezzlement of the assets of a labor union in violation of 29 U.S.C. Sec. 501(c). The case was tried before a jury. During the trial, the government called as a witness Sandra Simmons, a union member and longtime acquaintance of Stockton and his wife. Before the grand jury, Simmons had testified that she had been aware that the M. Woods Janitorial Service was a "joke" and that the cleaning of the offices was being done by union members. Her testimony was otherwise at trial and unsatisfactory from the government's point of view. The government sought to impeach her trial testimony by introducing into evidence her prior contradictory statements before the grand jury. Simmons' earlier testimony further indicated that she had been threatened by associates of Stockton at the time of the grand jury proceedings. She had testified that a union member had removed the battery from her car on the day she was scheduled to testify before the grand jury, and that Mildred Stockton had told her that a "bodyguard" would "take care of" anyone who harmed Stockton in connection with the grand jury investigation. The court carefully instructed the jury that the grand jury testimony was admitted solely for the purpose of impeaching the credibility of Simmons' trial testimony, and added that the evidence should not be considered "for the purpose in any way of connecting Mr. Stockton with any such statements, because there is absolutely no evidence that if any such statements were made that Mr. Stockton had anything whatsoever to do with them."

At the close of the government's evidence, and again at the end of trial, Stockton moved for a judgment of acquittal pursuant to Fed.R.Crim.P. 29. Both motions were denied. On May 4, 1984, the jury found Stockton guilty on all counts. The court sentenced Stockton to concurrent prison terms of one year and one day for the first six counts. For the remaining counts, the court gave Stockton a suspended sentence and placed him on probation for five years. As a condition of his probation, Stockton was required to make restitution to the labor union in the amount of the lesser of $23,250 (the aggregate amount of the embezzlement charged in the indictment) or fifteen percent of his income over the five-year period.


We have not previously had occasion to address the interpretation of 29 U.S.C. Sec. 501(c) as it applies to cases like the one presently before us. The courts that have considered the issue have adopted a variety of approaches, from which emerges a complicated and at times confusing pattern. 2

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Because for the purposes of the present case, at least, we are persuaded that the answer to the problem is simpler than application of broad principles may make it appear, we pursue an independent analysis of Sec. 501(c).

The specific question presented by the case now before us is the proper construction of the statutory concept of embezzlement. Although Sec. 501(c) reaches other theft offenses as well, it is clear that embezzlement is the statute's primary concern. The section is captioned "embezzlement of assets," and its legislative history refers to it as a provision designed to impose a federal punishment for embezzlement. S.Rep. No. 187, 86th Cong., 1st Sess. (1959), reprinted in U.S.Code Cong. & Ad.News 2318, 2329, 2359, 2401; H.R.Rep. No. 741, 86th Cong., 1st Sess. (1959), reprinted in U.S.Code Cong. & Ad.News 2424, 2432. Moreover, as the present case has been tried, it appears that...

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