Deschenes v. United States, 5054.

• Decision Date: 09 July 1955
• Docket Number: No. 5054.,5054.
• Citation: 224 F.2d 688
• Parties: Norman J. DESCHENES, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

224 F.2d 688 (1955)

Norman J. DESCHENES, Appellant, v. UNITED STATES of America, Appellee.

No. 5054.

United States Court of Appeals Tenth Circuit.

July 9, 1955.

A. D. Weiskirch, Wichita, Kan. (A. Lewis Oswald, Hutchinson, Kan., on the brief), for appellant.

William C. Farmer, Wichita, Kan. (Milton P. Beach, Oskaloosa, Kan., Selby S. Soward, Topeka, Kan., Chas. W. Ward, Peabody, Kan., and Royce D. Sickler, Topeka, Kan., on the brief), for appellee.

Before PHILLIPS, Chief Judge, MURRAH, Circuit Judge, and WALLACE, District Judge.

MURRAH, Circuit Judge.

The appellant, Norman J. Deschenes, and his co-defendants Lowell F. Reinhardt and LeRoy O. Kretzer, were prosecuted upon an indictment consisting of eight counts, each charging the use of the mails for the purpose of effecting a scheme or artifice to defraud in violation of 18 U.S.C. § 1341. Reinhardt and Kretzer pleaded guilty, were placed on probation and testified against appellant at his trial. Upon a jury verdict of guilty, the appellant was sentenced to three years imprisonment on each of the eight counts, the sentences to run concurrently. Appellant does not deny his role in the "scheme" alleged in the indictment, but assigns numerous errors in the trial of his case, based on alleged erroneous admission of evidence, prejudicial conduct of the trial court and of the United States Attorney, and erroneous instructions of the court to the jury.

The alleged scheme to defraud as developed by the evidence consisted of a "check kiting" scheme. Appellant, a public accountant, was retained, among other clients, by the Salt City Electric Company of Hutchinson, Kansas. Co-defendant Kretzer was a partner in the Company. In the early part of 1952, the Company was in a precarious financial condition with insufficient funds to meet its payroll and other expenses. As a result of a discussion concerning the matter between appellant and Kretzer, appellant contacted co-defendant Reinhardt, a relative by marriage, who lived at Bison, Kansas. Reinhardt agreed to help save the Company from bankruptcy and the "kiting" plan was devised. Knowing that both Reinhardt and the Company had insufficient funds in their respective accounts, Reinhardt and the appellant agreed that Reinhardt would furnish the Company his personal checks in exchange for checks of like amounts from the Company. The Company would deposit the Reinhardt checks from time to time in the Central State Bank of Hutchinson, and for the period of time required for the Reinhardt checks to clear through the normal banking channels through the United States mails and be delivered to the Bison State Bank to be charged against Reinhardt's account, the Company would receive credit from the Hutchinson Bank. When the Reinhardt checks arrived at the Bison Bank, he would immediately deposit Company checks of like amount to cover them.

This check exchange continued from March 1952 until about September 1952, when a State Bank Examiner at the Bison Bank became suspicious and discovered the scheme. During the life of the scheme, the face amount of the kited checks totalled $713,350, and the largest overdraft in the Company and Reinhardt accounts was $14,155.83.

Appellant first contends that no scheme to defraud is shown since it was intended at all times to ultimately pay the kited checks; and that in any event, the mails were not used in furtherance of such scheme since any alleged crime was committed and completed immediately upon depositing the checks in the respective banks before they were placed in the mail for clearance and collection. United States v. Lowe, 7 Cir., 115 F.2d 596, 598, is a complete and conclusive answer to this contention. Under indistinguishable facts, the court held that the plan was to obtain checking account credit from the bank, and that such credit "is a thing of value." And, the court went on to say, "The defendant included in his scheme the use of a banking practice which necessarily required the forwarding of the deposited check for collection, a practice which would enable the defendant to utilize, at least temporarily, the credit given him by the Chaseburg Bank; and the utilization of this practice was as much a part of the scheme to obtain credit as the drawing and presenting of the worthless check."

Clearly, the appellant here knew and intended that the mails would be used in transferring the checks from one bank to the other in the regular course of business. In fact, the time consumed by such transfer was the very essence of the scheme which made it possible, and this practice constitutes a violation of the mail fraud statute. Federman v. United States, 7 Cir., 36 F.2d 441; United States v. Feldman, 2 Cir., 136 F.2d 394.

At the beginning of the trial, the court, when examining the jury, asked if any of them were then or had been peace officers, to which juror Miller replied that he had been a guard or employee at some penal institution. No objection was made to this juror and he subsequently became foreman of the jury. After the trial, appellant learned for the first time that Miller was a member of the Wichita, Kansas Crime Commission, and contends that since the fact was admittedly known to the trial court on voir dire, the juror should have been dismissed as a "peace officer". When this matter was presented in an argument on a motion for new trial, the trial court was of the view that being a member of the Wichita Crime Commission did not make Miller a peace officer. In his brief, appellant describes the Wichita Crime Commission as a group of voluntary citizens organized for the purpose of detecting and suppressing crime, but we can find nothing in the record to show the nature or functions of the Commission or the members thereof. Certainly there is nothing from which we can conclude that its members were peace officers. The trial court did not so consider the juror and we will not infer it from the statements in the brief. It cannot be said that membership in the Wichita Crime Commission was "so obvious a disqualification or so inherently prejudicial as a matter of law * * * as to require the court * * * to set the verdict aside and grant a new trial." Frazier v. United States, 335 U.S. 497, 513, 69 S.Ct. 201, 210, 93 L.Ed. 187; See, also, Cavness v. United States, 9 Cir., 187 F.2d 719.

On several occasions when appellant was testifying, the court admonished him to "eliminate those side remarks. Now I mean what I am telling you. * * * Well, we are going to conduct this case in a dignified and orderly manner. * * * You answer counsel's question instead of asking counsel questions yourself. * * * Now, that is not an answer, you are arguing with counsel again, the very thing that I have told you that I won't permit * * *." Appellant contends that these remarks made as he attempted to testify in his own behalf confused and intimidated him to his prejudice before the jury. It was of course within the province of the trial court as the governor of the trial to admonish witnesses to answer questions fairly propounded, and not to engage in argumentative discourses. Harris v. United States, 5 Cir., 8 F.2d 841; Brink v. United States, 6 Cir., 60 F.2d 231. A review of the testimony shows that the admonitions of the court were clearly justified in the interest of an orderly trial.

Appellant also complains of the conduct of the United States Attorney in the examination and interruption of character witnesses for the appellant. The United States Attorney asked preliminary questions of these witnesses as to whether they had talked to anyone in the community...