U.S. v. Williams, 87-2929

• Decision Date: 24 May 1989
• Docket Number: No. 87-2929,87-2929
• Citation: 874 F.2d 968
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Douglas WILLIAMS, a/k/a "Doug," Buford Salter, a/k/a "Red," Ronald K. May, a/k/a "Ronny," Buddy LeDoux, Kenneth Tyler, Larry Wiggins, and Dugan Phillips, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 968

874 F.2d 968

58 USLW 2042

UNITED STATES of America, Plaintiff-Appellee, v. Douglas WILLIAMS, a/k/a "Doug," Buford Salter, a/k/a "Red," Ronald K. May, a/k/a "Ronny," Buddy LeDoux Kenneth Tyler, Larry Wiggins, and Dugan Phillips, Defendants-Appellants.

No. 87-2929.

United States Court of Appeals Fifth Circuit.

May 24, 1989.

Rehearing and Rehearing En Banc Denied June 22, 1989.

Ronald S. Liebman, Jean V. MacHarg, Mitchell R. Berger, Deborah M. Lodge, Washington, D.C., for defendants-appellants.

Mervyn Hamburg, Atty., U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Texas.

Before RUBIN, KING, and GARWOOD, Circuit Judges.

GARWOOD, Circuit Judge:

Defendants-appellants Douglas Williams (Williams), Buford "Red" Salter (Salter), Ronald May (May), Buddy LeDoux (LeDoux), Kenneth Tyler (Tyler), Larry Wiggins (Wiggins), and Dugan Phillips (Phillips) appeal from their convictions for obstruction of justice under 18 U.S.C. Sec. 1503. The jury found Williams guilty of corruptly, and with the intent of impeding the due administration of justice, endeavoring to influence a subpoenaed grand jury witness to give false testimony. The remaining appellants were convicted under section 1503 for endeavoring to obstruct the due administration of justice by giving specified false testimony before a grand jury in a manner that blocked the flow of truthful information and impeded justice. All of the appellants received probated confinement sentences and were assessed fines ranging from $2,500 to $10,000. ¹

Counsel for Douglas Williams has filed a Suggestion of Death advising that Williams died on or about May 6, 1989, after submission of this appeal on oral argument but while decision was still pending. We accordingly hereby sever Williams' case from that of all the other appellants and remand Williams' case to the district court with instructions to vacate his judgment of conviction and sentence and to dismiss the indictment as to him because of his death. See United States v. Welborn, 849 F.2d 980, 985 (5th Cir.1988); United States v. Pauline, 625 F.2d 684, 685 (5th Cir.1980).

The remaining appellants (hereafter collectively "appellants") claim that their convictions should be overturned because (1) there was prosecutorial abuse of the grand jury process; and in any event, (2) there was insufficient evidence to support their convictions since it was not shown that their grand jury testimony had the effect of impeding justice or entirely closing off avenues of the grand jury's inquiry. We find that the prosecutor did not abuse the grand jury process in a manner that justifies overturning these appellants' convictions, and that there was sufficient evidence to support their convictions. We accordingly affirm as to them.

Facts and Proceedings Below

Appellants' convictions are the remaining vestiges of a forty-seven-count indictment against members of the Fredeman family, their companies, and employees for alleged violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. Sec. 1961 et seq., and related offenses, primarily in relation to the Fredeman companies' "midstream" fueling operations. ² The Fredemans, of Port Arthur, Texas, own and operate several companies that engage in the towing and fueling of vessels in the coastal waters of East Texas, Louisiana, and to some extent, Mississippi and Alabama. ³

The Fredeman business began in the 1940s when William "Cap" Fredeman, Sr. converted a shrimp boat to a towboat and began Port Arthur Towing Company (PATCO). The company prospered in the post-World War II boom, and in 1957 Cap Fredeman opened one of the first "midstream" fueling operations, Channel Marine Fueling Service. In 1968, the Fredemans established another midstream fueling company, Palmer Midstream. ⁴ The Fredemans rapidly became the dominant presence in the area's marine fueling industry. ⁵

Refueling a customer vessel generally involved attaching a hose from a Fredeman supply vessel to the fuel hatch of the customer vessel. A meter on the Fredeman vessel recorded the fuel dispensed; however, many of the customers' vessels did not have devices to accurately record the fuel they received. Allegedly in about ninety percent of their fueling transactions the Fredemans underdelivered fuel to their customers' vessels.

Basically two methods of cheating were employed. The "hit" valve method involved diverting fuel back to the Fredeman supply vessel through a concealed hose that ran under the supply vessel's deck and back into its supply tank. The other method involved running up the meter before attaching the hose to the customer's fuel hatch. Several former Fredeman employees testified, before the grand jury and at trial, that the company goal was to steal ten to fifteen percent of the customer's "purchased" fuel. ⁶

The appellants were all long-time employees of the Fredeman companies. ⁷ Each of them, at various times throughout their employment, was in a position to observe and participate in the fuel thefts. Some of the appellants were in a position to direct other employees to steal fuel and to instruct employees in the methods of stealing fuel. Salter was a dock manager in Louisiana, Mississippi, and Alabama. LeDoux had worked as a deckhand, mate, boat captain, and also as a dock manager in Louisiana before he assumed an office position. May was a boat captain and later a dock manager. Tyler was a deckhand, boat captain, and later a dock manager. Wiggins was a deckhand, tankerman, and boat captain. Phillips was a deckhand, boat captain, and later a dock manager. ⁸

While the Fredemans' profits grew, many of their competitors' profits withered. ⁹ In 1983, one of the Fredemans' primary competitors filed a federal antitrust suit against the Fredemans charging the Fredemans with monopolization of fuel sales by theft, bribes, and fraud. ¹⁰ In this civil suit, all of the appellants were deposed in 1983 and each denied any knowledge of such activity within the Fredeman organization. Early in 1984, the district court that was presiding over the civil suit referred the allegations of wrongdoing to a federal grand jury for investigation. ¹¹

The grand jury investigation continued through 1985 and into 1986. On October 2, 1985, Stephen Landry, a former Channel Fueling employee, testified that fuel thefts had occurred. This was in direct contradiction to his earlier deposition testimony in the civil suit where he had denied knowledge of any thefts.

LeDoux, Salter, May, Wiggins, Tyler, and Phillips testified before the grand jury in January and February 1986. ¹² They each denied any knowledge of the intentional fuel underdeliveries or thefts--a position that was consistent with their civil suit depositions testimony. Prior to giving their grand jury testimony, the prosecutor at the grand jury proceedings told each appellant that he was not currently a target of the investigation. The prosecutor advised each appellant that he was subpoenaed as a witness to provide any information that he possessed with regard to the general investigation into the fuel underdeliveries. ¹³ The appellants were also cautioned that they could be charged with perjury for each false statement they made under oath. In addition, the prosecutor told the appellants that they had the right to consult their attorney at any time during the questioning, ¹⁴ and the majority of the appellants were advised in the presence of the grand jury of their Fifth Amendment rights. ¹⁵

On April 17, 1986, the federal grand jury returned a forty-seven-count indictment charging the Fredemans, the Fredeman Companies, and several Fredeman employees with violations of RICO and related statutes. The appellants were charged with RICO conspiracy and substantive RICO violations. In addition, the appellants were charged with obstruction of justice in violation of 18 U.S.C. Sec. 1503 by "knowingly, intentionally and corruptly endeavor[ing] to obstruct the due administration of justice by testifying falsely under oath to the Grand Jury, in a manner that blocked the flow of truthful information" and "impeded justice."

After four months of trial, eighteen counts were submitted to the jury for deliberation. The jury found each of the appellants guilty of one count of obstructing justice under 18 U.S.C. Sec. 1503. The jury acquitted all appellants on two counts ¹⁶ and was unable to reach a verdict on the remaining counts. The appellants were later sentenced, and they timely bring this appeal.

Discussion

Appellants claim that there was prosecutorial abuse of the grand jury process that requires reversal of their convictions under the due process clause of the Fifth Amendment or in the exercise of our supervisory power. They also assert there was insufficient evidence to support their convictions because, they contend, it is not shown that their grand jury testimony had the effect of impeding justice or entirely closing off avenues of the grand jury's inquiry.

I. Abuse of the Grand Jury Process

Appellants assert that the charges against them for obstruction of justice under 18 U.S.C. Sec. 1503 were "manufactured" by the prosecution. They claim that the prosecutor, believing that he could prove that they had lied in their civil depositions induced them to commit perjury before the grand jury by telling them they were not targets of the grand jury investigation. Allegedly, the prosecutor induced the perjury in order to create obstruction of justice counts that would bolster the government's RICO case. ¹⁷

Appellants state that the record demonstrates that the sole reason that appellants were subpoenaed before the grand jury was to trap them into committing perjury. ¹⁸ The district court did note that the prosecutor engaged in some questionable practices. In particular, it questioned the prosecutor's practice of advising appellants that they were not targets...