U.S. v. Henson
| Decision Date | 15 June 1988 |
| Docket Number | 87-5138,Nos. 87-5132,87-5144,s. 87-5132 |
| Citation | 848 F.2d 1374 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. J. Clenton HENSON (87-5132); Sheila Henson Lutz (87-5138); & C. Alan Henson (87-5144), Defendants-Appellants. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Thomas L. Osborne (argued), Paducah, Ky., for J. Clenton Henson.
Gary R. Haverstock (argued), Murray, Ky., for Sheila Henson Lutz.
Roger William Perry (argued), Long and Perry, Benton, Ky., for C. Alan Henson.
Joseph Whittle, U.S. Atty., Louisville, Ky., David Grise (argued), Terry M. Cushing, for U.S.
Before NELSON and BOGGS, Circuit Judges, and EDWARDS, Senior Circuit Judge.
J. Clenton Henson and Sheila Henson Lutz, his daughter, were convicted by a jury of one count of conspiracy to commit mail fraud, in violation of 18 U.S.C. Sec. 371 (1982). Clenton Henson was also found guilty of six counts of giving, or causing a transferor to give, a false odometer statement to a transferee of an automobile, in violation of 15 U.S.C. Secs. 1988(b) and 1990c (1982). C. Alan Henson, Clenton's son, pled guilty to the conspiracy charge and to one count of mail fraud, in violation of 18 U.S.C. Secs. 2 and 1341 (1982). Finding no merit to the contentions raised on appeal, we affirm the convictions and the sentences.
We will briefly review the pertinent facts, supplementing our discussion as we consider the various contentions raised. We, of course, view the evidence in the light most favorable to the government. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979). The government must be given the benefit of all inferences which can reasonably be drawn from the evidence. United States v. Adamo, 742 F.2d 927, 932 (6th Cir.1984) (), cert. denied sub nom. Freeman v. United States, 469 U.S. 1193, 105 S.Ct. 971, 83 L.Ed.2d 975 (1985).
The government presented evidence that the defendants, Clenton Henson, Sheila Lutz and Alan Henson, were involved in an extensive odometer-tampering scheme. Clenton Henson, Ralph Lutz (Clenton's son-in-law) and others associated with the Henson organization purchased large numbers of late-model, high-mileage automobiles in California, Indiana, Missouri and Tennessee, using such names as Dennis Used Cars, Gary Ray's Used Cars and Ron Walston Auto Sales. Ralph Lutz testified that although these names represented real dealers, none of them had any connection with the automobiles bought in their names. The money used to purchase these vehicles came from accounts in these dealers' names, which Sheila Lutz had established at the Bank of Marshall County, but the Hensons owned and controlled the funds therein.
The Hensons purchased used cars with "sight drafts." Richard Guyer, general manager of the Auto Dealers Exchange in Indianapolis, Indiana, explained the sight draft process as follows:
Purchases by sight draft [are] just another form of payment for a vehicle. The sight draft, by definition, is an envelope-type form that has basic information and spaces on the front, description of the vehicle, the price paid for the vehicle. It's signed much as a check is. Being in the form of an envelope for payment, the auction must take a transferral statement, title and odometer statement, ... insert them in the draft and they are forwarded to the purchaser's bank for subsequent payment.
According to Guyer, the sight drafts would be sent by mail from the auction to the purchaser's bank.
When the Hensons purchased automobiles at auction, the sight drafts would be sent to the Hensons' bank, the Bank of Marshall County, for payment. Edna Collins, a bank employee who dealt extensively with the Hensons, testified that when the sight drafts arrived, she would call Sheila Lutz or one of her co-workers (Carol Lindsey or Sheila Tinsley) to verify the draft. According to Collins, they would open the drafts and make sure that the title and everything is correct. And then whenever they okay the draft they either pay me by check or pick up the draft, or sometimes they would bring several checks in all from auto auctions, to pay them and I in turn would issue a cashier's check and mail back to the bank that I got the drafts from.
Sheila Lutz handled the sight drafts for Gary Ray's Used Cars, Ron Walston Auto Sales and other dealers, but Collins understood that the funds drawn on these dealers' accounts belonged to Clenton Henson.
Clenton Henson was in the business of financing automobiles, and the vehicles he purchased at auction were available to local automobile dealers for possible resale to the public. Clenton charged these dealers two types of fees. The financing fee cost $50 and was required of dealers who could not afford to pay for an automobile in full. The false odometer fee, which was an additional $50 or $100, entitled the dealer to a false odometer statement. Charles Haley, a wholesale automobile dealer, testified that he would often pay an extra $50 for a false odometer statement. Haley would write on his financing check the number of miles he wanted on the automobile odometer and Sheila Lutz would copy that number on the odometer statement. 1
Clenton Henson asked Ralph Lutz to alter an odometer on one occasion, but mostly Joey Galloway did the dirty work. Galloway testified that Alan Henson and Ralph Lutz would call and tell him what mileage to put on each car. Galloway would receive $10 for his labors.
The Hensons used a variety of methods to conceal the rollback scheme. One such method was to alter the original title certificates, which reflected the accurate mileage. On some occasions, the defendants erased or typed over the mileage printed on the title documents. Ralph Lutz testified that he saw both Alan Henson and Sheila Lutz slicing the mileage off California titles.
The Hensons would also conceal the scheme by transferring vehicle ownership from one dealer (usually a coconspirator) to another. This method required the fabrication of title certificates, bills of sales, and odometer statements. The Hensons kept a stack of signed, blank odometer statements for this purpose. Sheila Tinsley, a part-time secretary for the Hensons, testified that she saw Sheila Lutz and Alan Henson forge dealers' names on bills of sale, odometer statements, automobile titles and registration forms. She admitted writing false bills of sale, signing the names of Ron Walston and Gary Ray. She also filled out false odometer statements, using such dealers' names as Bud Swink, Charlie Aldridge, Gary Ray, Ron Walston and others, and occasionally forged the name of a notary public. Carol Lindsey, another secretary for the Hensons, made similar comments. At the behest of Alan Henson and Sheila Lutz, she filled out false odometer statements, title certificates and bills of sale.
When document alterations were not feasible, the Hensons would obtain a new title certificate (from Nevada or Mississippi) through a Tennessee company called APCO Leasing. According to Sheila Tinsley, the Hensons would pay APCO Leasing to "get the miles off the title." She would use Alan Henson's checking account to pay APCO Leasing, even though the cars were in the names of Dennis Used Cars, Ron Walston Auto Sales and others. Ron Walston stated that when he wanted a title "washed" through APCO Leasing, Alan Henson and Sheila Lutz would do it for him.
In order to provide legitimacy to their scheme, the Hensons enlisted the unwitting assistance of the Marshall County Sheriff's Office. Under Kentucky law, a car dealer can pay the local sheriff's office to verify the vehicle identification number (VIN) and the odometer reading. The sheriff issues an inspection slip after comparing the VIN and the mileage listed on the title certificate with those of the car.
The Hensons requested hundreds of inspections between 1983 and 1984. Either Clenton Henson, Alan Henson or Sheila Lutz would tell the sheriff's deputies which cars to inspect. They would request that the inspection slips be issued in the names of Dennis Used Cars, Gary Ray's Used Cars or Ron Walston Auto Sales.
Despite the simplicity of the inspection process, deputies were often told that automobiles were not ready for inspection. Deputy Bill Bryant testified that he remembered being told that certain cars were not ready for inspection, even though he was in the process of examining the documents, because the titles had not yet come in the mail. In those instances where he was asked to inspect the vehicle later, he found "a discrepancy" in the mileage reading from the time he first viewed the vehicle.
On May 22, 1985, federal and state law enforcement officials executed a search warrant at the Hensons' business address on East Fourth Street in Benton, Kentucky. Postal Inspector Joe Edwards's affidavit supported the warrant. In executing the search warrant, the officers seized automobile title documents, blank odometer statements, record books, checkbooks, other papers and computer equipment.
On March 4, 1986, the defendants were indicted along with three others, Dennis Henson, Gary Ray and Ralph Lutz. 2 Count one charged a conspiracy to commit mail fraud, in violation of 18 U.S.C. Sec. 371; counts two through six charged mail fraud, in violation of 18 U.S.C. Secs. 1341 and 2; and counts seven through sixteen charged Clenton Henson with giving, or causing a transferor to give, a false odometer statement in violation of 15 U.S.C. Secs. 1988(b) and 1990c.
Before trial, Alan Henson pled guilty to the conspiracy count and a substantive mail fraud count. He was tried on the remaining charges. Clenton Henson and Sheila Lutz pled not guilty to all counts. On January 1, 1987, the jury convicted Clenton Henson and Sheila Lutz of conspiracy to commit mail fraud. Clenton Henson was also convicted of six counts of giving, or causing a transferor to give, a...
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