Gollaher v. United States

• Decision Date: 08 December 1969
• Docket Number: No. 21633.,21633.
• Citation: 419 F.2d 520
• Parties: Robert E. GOLLAHER and Gollaher Construction, Inc., a corporation, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

419 F.2d 520 (1969)

Robert E. GOLLAHER and Gollaher Construction, Inc., a corporation, Appellants, v. UNITED STATES of America, Appellee.

No. 21633.

United States Court of Appeals Ninth Circuit.

August 19, 1969.

Certiorari Denied December 8, 1969.

Earl Klein (argued), and Gerald H. Gottlieb (argued), Beverly Hills, Cal., for appellants.

Michael Heuer (argued), Asst. U. S. Atty., Wm. M. Byrne, Jr., U. S. Atty., Robert L. Brosio, Asst. U. S. Atty., Crim. Div., Los Angeles, Cal., for appellee.

Before BARNES and HAMLEY, Circuit Judges, and STEPHENS, District Judge.

Certiorari Denied December 8, 1969. See 90 S.Ct. 434.

STEPHENS, District Judge:

The District Court had jurisdiction of the within case pursuant to Title 18 U. S.C. §§ 307, 1001 and 1010. This court has jurisdiction pursuant to Title 28 U. S.C. § 1291.

A fifteen count indictment was brought against Robert Gollaher and Gollaher Construction, Inc. and Evelyn Barbee. Barbee withdrew her plea of not guilty, entered a plea of guilty to Count Two and testified for the government at the trial. A verdict was returned on the first six counts only. After the verdict, Barbee was allowed to enter a plea of nolo contendere to Count Two. She was sentenced to one year in prison, but this was suspended and she was placed on probation for one year. All remaining counts against her were dismissed.

Appellants Robert Gollaher and Gollaher Construction were found guilty on Counts One through Six. Count One charged a conspiracy to commit an offense against the United States or an agency thereof. 18 U.S.C. § 371. Other persons were named as co-conspirators, but were not indicted.

Count Two charged a violation of 18 U.S.C. § 1010, which provides that "whoever, for the purpose of obtaining any loan or advance of credit * * * with the intent that such loan or advance of credit shall be offered to or accepted by the Federal Housing Administration for insurance * * * makes, passes, utters or publishes any statement, knowing the same to be false * * *" has committed an offense against the United States.

Robert Gollaher was denied probation and was sentenced to two years' imprisonment on each count, the sentences to run concurrently. Gollaher was also fined $5,000.00 on each count for a total fine of $30,000.00, with a condition that if the fine were paid within the first year, one year of his sentence would be suspended. Gollaher Construction, Inc. was ordered to pay a fine of $1,000.00 on each of the six counts for a total fine of $6,000.00.

Robert Gollaher was a contractor building homes in the Fresno area. He did business through three companies, to wit, Design Homes by Robert E. Gollaher, Inc., Gollaher Construction, Inc., and G & B Construction, Inc. To obtain financing, Gollaher instructed Evelyn Barbee, an employee of Gollaher Construction, Inc. to find persons who could qualify for mortgage insurance from the Federal Housing Administration (hereafter F.H.A.) or were entitled to loan guarantees from the Veterans Administration (hereafter V.A.). Persons who could qualify were paid to sign application forms which were used to secure F. H.A. insurance or V.A. loan guarantees for persons desiring to purchase one of Gollaher's homes, but who were not entitled to either F.H.A. or V.A. financing. The application forms contained statements of intent to purchase and occupy the homes, when in fact the qualified persons who signed the applications never intended to purchase or occupy the homes involved. See 38 U.S.C. § 1804(c) and 18 U.S.C. § 1010. Deposit receipts were also prepared and submitted with the applications for financing, indicating that a deposit had been made toward the purchase of the homes involved, when in fact no such deposit had been received.

Financing was arranged through T. J. Betts Company and Central Securities Mortgage Company. These companies would transmit the documents to the V. A. and F.H.A. and would then make F. H.A. insured or V.A. guaranteed loans in the names of the persons who could qualify for F.H.A. insurance or V.A. guarantee. Actually the loans were obtained for Gollaher's prospective purchasers who were not qualified for V.A. or F.H.A. financing.

On December 23, 1965, the Veterans Administration notified Gollaher and Gollaher Construction, Inc. that the V.A. would refuse to appraise any properties owned, sponsored or to be constructed by them and all persons acting on their behalf. The Administrator was authorized by 38 U.S.C. § 1804(b) to take such action upon finding that the methods or practices pursued in relation to the marketing of such properties were unfair or unduly prejudicial to veteran purchasers. Appellants were also notified that they had a right to a hearing upon request. On December 28, 1965, Gollaher and Gollaher Construction, Inc. were notified by the F.H.A. that all further applications for mortgage insurance submitted by them would be rejected on the ground that they had been suspended by the Veterans Administration.

Some of the purchasers who were not qualified for the government financing moved into homes purchased from Gollaher and received payment books in which the name of a qualified applicant would appear. Payments were made in the name of the qualified applicant. In several cases, the actual purchasers defaulted in the payments and after foreclosure, a deficiency existed. The government then looked to the veterans or other qualified persons whose names appeared on the application forms.

The various reasons assigned for reversal are separately considered below:

Gollaher's Testimony before the Grand Jury

Appellants contend that "the conviction must be reversed because appellant Gollaher was compelled to testify before the grand jury after suspicion had already focused on appellants."

Appellants argue that Gollaher was in reality a defendant compelled by subpoena to testify. His position before the grand jury is equated with the position of a defendant undergoing custodial interrogation. It is contended that Escobedo v. Illinois, 378 U.S. 478, 84 S.Ct. 1758, 12 L.Ed.2d 977 (1964), and Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), demand that the same safeguards be provided to witnesses before the grand jury as to persons in custody. Appellants maintain that Gollaher was not properly advised of his privilege against self-incrimination, that he was not permitted to have counsel present while testifying before the grand jury and that, therefore, the prosecution should not have been allowed to use his grand jury testimony at the trial.

It should also be noted that no objection was made to the questions on cross-examination which elicited this testimony. What the cross-examination would be on this subject was well known to defense counsel and what the testimony would be was equally well known. There is no excuse for not interposing timely objection so that the trial court could rule in the context of the examination. This point was not preserved for appeal. Appellants argue that the pretrial motion to dismiss the indictment because of what took place before the grand jury sufficiently raised the objection and preserved it on appeal. It is too apparent to require exposition that the motion was made in an entirely different context.

The argument is made that Gollaher's testimony before the grand jury was used not only to impeach Gollaher, but as affirmative evidence. In fact, the testimony was introduced as impeachment and it was effective for this purpose. The affirmative weight of this evidence was incidental to its principal purpose. Its admission into evidence was not error.

The statements made by Gollaher before the grand jury were admissible to impeach the testimony he gave at the trial. Walder v. United States, 347 U.S. 62, 74 S.Ct. 354, 98 L.Ed. 503 (1954); United States v. Armetta, 378 F.2d 658 (2nd Cir., 1967); Inge v. United States, 123 U.S.App.D.C. 6, 356 F.2d 345; United States v. Curry, 358 F.2d 904 (2nd Cir., 1965); Bailey v. United States, 117 U.S.App.D.C. 241, 328 F. 2d 542 (D.C.Cir., 1964).

It was not error to deny defendant's motion to dismiss the indictment. The record shows that Gollaher was adequately advised as to his Fifth Amendment rights and he was not entitled to have counsel present with him while he testified before the grand jury. See Rule 6(d) of the Federal Rules of Criminal Procedure and the following cases: In re Groban, 352 U.S. 330, 333, 77 S.Ct. 510, 1 L.Ed.2d 376 (1957); United States v. Luxenberg, 374 F.2d 241 (6th Cir., 1967); Jones v. United States, 119 U.S.App.D.C. 284, 342 F.2d 863, 882 (D.C.Cir., 1964); United States v. Wolfson, 282 F.Supp. 772, 775 (S.D.N.Y., 1967); In re Weiss, 279 F.Supp. 857, 859 (S.D.N.Y., 1967); United States v. Kane, 243 F.Supp. 746, 753 (S.D.N.Y., 1965).

We are not here called upon to reexamine the rule announced by this court in Groshart v. United States, 392 F.2d 172 (9th Cir., 1968), pertaining to the use, for impeachment purposes, of statements obtained from a defendant in violation of the rule announced in Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694. Appellant, while present before the grand jury pursuant to a subpoena, was not then in police custody and the Miranda rules were for that reason not applicable to his grand jury interrogation.

Double Jeopardy

Appellants' next alleged error is that placing them on trial after suspension by the Veterans Administration constituted double jeopardy, double punishment, and cruel and unusual punishment.

The homes which were being constructed were in a price range which did not attract ordinary bank financing. Financing depended upon availability of F.H.A. mortgage insurance and V.A. loan guarantees. After the suspension by the V.A., appellants requested a hearing. The United States Attorney, however, requested that the hearing be held in abeyance until the criminal aspects of the case were concluded. The Chief Benefits Director, pursuant...