Caywood v. United States

• Decision Date: 11 June 1956
• Docket Number: February. 10,No. 14417.,1956.,14417.
• Citation: 232 F.2d 220
• Parties: C. W. CAYWOOD, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

232 F.2d 220 (1956)

C. W. CAYWOOD, Appellant, v. UNITED STATES of America, Appellee.

No. 14417.

United States Court of Appeals Ninth Circuit.

February. 10, 1956.

Rehearing Denied March 20, 1956.

Writ of Certiorari Denied June 11, 1956.

Douglas H. Clark, Shute & Elsing, W. T. Elsing, Phoenix, Ariz., for appellant.

Jack D. H. Hays, U. S. Atty., Everett L. Gordon, Asst. U. S. Atty., Phoenix, Ariz., for appellee.

Before STEPHENS, POPE and FEE, Circuit Judges.

Writ of Certiorari Denied June 11, 1956. See 76 S.Ct. 1051.

JAMES ALGER FEE, Circuit Judge.

Under the provisions of the Federal Property and Administrative Services Act of 1949, 40 U.S.C.A. § 471 et seq., the Administrator of General Services is authorized to transfer, on the basis of need, to state departments of education such equipment or supplies under the control of any federal executive agency as shall have been determined to be surplus. In Arizona, distribution of such surplus property to the schools and institutions was carried out by the Arizona Educational Agency for Surplus Property. Caywood was Assistant Superintendent of Public Information for Arizona. In this capacity, he was authorized to sign requisitions for necessary surplus property. Requisitions were made on government DP-2 forms. These required the donee to certify in part that the property was destined for a school, college, or university operated by the state, and that the property donated would be used solely for educational purposes, also, that the request was reasonable and proper in view of the use to be made thereof.

On January 18, 1954, Caywood and one Tompkins were indicted,¹ charged with conspiracy "(1) to commit offenses against the United States of America, and (2) to defraud the United States of America and certain agencies thereof, in that said defendants conspired to violate 18 U.S.C.A. Sec. 1001", "by knowingly and wilfully falsifying, concealing and covering up by tricks, schemes and devices, material facts" by making false writings in the execution of certain DP-2 forms, and conspiracy to defraud the United States by depriving the United States of its right to have donable surplus property distributed to eligible institutions in violation of 40 U.S.C.A. § 484. The gravamen of the charge to defraud the United States under § 371 is found in the paragraph of the indictment reading as follows:

"That the defendants, conspired, confederated and agreed together to defraud the United States of America, and the agencies thereof, by depriving said United States of its right, under the laws and regulations appertaining to the disposal of donable surplus property of the United States to have all such property disposed of according to the applicable laws and regulations and to defraud the United States by preventing it from distributing its surplus property to eligible educational institutions, and to defraud the United States by diverting and converting its donable surplus property from eligible educational institutions for which allocated to the use of said defendants and others."

Caywood was also charged with embezzlement by separate indictment, but the court did not submit this charge to the jury. The bill of particulars carries forward the idea that evidence would be offered tending to show that there was a conspiracy to defraud the government by depriving the United States of the power to distribute its surplus property according to law and regulations.

The indictment alone and as defined by the bill of particulars charged and was clearly intended to charge a continuing conspiracy. The concert of action was contemplated as extending from the formulation of the unlawful agreement through the filing of the DP-2 forms, through the receipt of the specified items by Caywood, as Assistant Superintendent of Schools for the State of Arizona, and Tompkins, his co-conspirator, until the placement of each item thereof into the hands of a bona fide purchaser for value and without notice who was not authorized by Congress to receive such property. The transfer of any such item would deprive the United States of the right to have this property distributed to an eligible educational institution, in violation of 40 U.S.C.A. § 484, thereby defrauding the government in the manner charged.

A jury found Caywood and his confederate, Tompkins, guilty of the crime of conspiracy. Caywood alone appeals. Since all members of the Court agree he is guilty, the verdict should not be vacated unless for vital error of law.

Assignments of error as to the instructions given and refused and as to the indictment will first be noticed. None is well taken. The charge of the court sufficiently covered knowledge of the accused by requiring the jury to find the defendants "joined together in a mutual enterprise knowingly and criminally with the full understanding on the part of each other of what they were doing." It is complained that a specific intent was not proved and that the court refused an instruction that such intent was an essential. The excerpt above set out and the context of the whole charge sufficiently advised the jury that criminal intent was a necessary element. Ordinarily, intent will be inferred from the nature of the combination. Landen v. United States, 6 Cir., 299 F. 75. "Conspiring to defraud the United States is in itself `inconsistent with an honest purpose.'" Razete v. United States, 6 Cir., 199 F.2d 44, 50.

It is objected that the substantive offenses were not defined by instruction. It is good practice to define specifically the substantive offenses, but here the essential elements thereof were adequately covered by the instruction as a whole. The next assignment was the giving by the court of an instruction which included the phrase "any improper interference with the United States Government in the discharge of its activities is deemed a fraud on the government." The balance of the instruction made it entirely clear that the court was charging that, if the defendants conspired to prevent the government from distributing this surplus property to eligible educational institutions by diverting it therefrom into the hands of persons unauthorized to receive it, a criminal agreement was charged, irrespective of the fact that the government was not thereby deprived of any property or property right.²

While then defendant Caywood was convicted by a jury after a fair and impartial trial presided over by a competent judge, it is now contended the conviction should be reversed, because the Statute of Limitations had run against the charge. We hold: (1) The indictment stated a crime of conspiracy with several overt acts alleged to have occurred within the period of three years before the finding thereof. (2) The conspiracy and these specified overt acts were proved by overwhelming evidence. (3) The defendant Caywood, after a prima facie case of continuing conspiracy had been proved, did not accept the burden of going forward with evidence to show that he took affirmative steps to cease cooperation or to show that the overt acts charged and proven had no connection therewith. He requested no instructions as to the continuance of the conspiracy and none as to the running of time.

The proof was conclusive that the object of the conspirators was to transfer illegally this property to unauthorized persons in order to obtain the proceeds and prevent distribution according to law in fraud of the government. The overwhelming evidence established the existence of continuous criminal concert of action by Caywood and Tompkins from the time of illegal agreement until each of the transfers charged in the indictment and proved by the evidence had been made. It was clearly shown that each of these transfers, alleged as overt acts, was made to an innocent person for value in violation of 40 U.S.C.A. § 484 and was in fraud of the government. The evidence of a continuing conspiracy up to consummation of the last of these illegal transfers was therefore uncontroverted.

Furthermore, the evidence showed no substantive crime of any kind had been committed until completion of the first transfer of an item of this property to an unauthorized innocent purchaser for value. It was proved and the jury found that the DP-2 forms were executed by Caywood, as Assistant Superintendent of Schools of the State of Arizona, who alone had the right to execute them by virtue of his official position. It was shown that the property was received in Arizona and came into possession of the State of Arizona and Caywood, as its agent. Caywood, it was proved and found by the jury, had possession of all of this property as a perquisite of his official position. It is true the record shows Tompkins had these items at his ranch. But his custody for Caywood would not have prevented the United States from compelling distribution to eligible educational institutions. The record establishes that the DP-2 forms were on their face true when filed. They were not false until an illegal transfer was made. The representations of Caywood therein that the items of property would be conveyed according to law were promissory in nature. Only when a conveyance was effectuated to an unqualified person by the conspirators was the substantive crime defined by 18 U.S.C.A. § 1001 committed. Although the filing was not illegal when done, that act could be used as an overt act in an indictment, but it could never be proved to be "in pursuance of the criminal design" until shown false by the unauthorized transfer. The acts of the conspirators up to the time of an illegal conveyance were on their face perfectly legal. The unlawful agreement contemplated the commission of crime by transfer, but no one can be convicted of a criminal design without more.

If Caywood had then carried out the provisions of law and the regulations and representations contained in the DP-2 forms, even if the property were at the time on Tompkins' ranch, and had...