Gordon v. United States

• Citation: 438 F.2d 858
• Decision Date: 30 March 1971
• Docket Number: No. 25973.,25973.
• Parties: Milton GORDON, Martin D. Von Zamft, William Fanning, William Crandall, William Marmorstein, Vincent DeLalla, Franklyn Levenson, Joseph H. Dixon, Marve A. Dubin and Irvin Burl Schikevitz, Appellants, v. UNITED STATES of America, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

438 F.2d 858 (1971)

Milton GORDON, Martin D. Von Zamft, William Fanning, William Crandall, William Marmorstein, Vincent DeLalla, Franklyn Levenson, Joseph H. Dixon, Marve A. Dubin and Irvin Burl Schikevitz, Appellants, v. UNITED STATES of America, Appellee.

No. 25973.

United States Court of Appeals, Fifth Circuit.

January 13, 1971.

Rehearing Denied and Rehearing Denied March 30, 1971.

COPYRIGHT MATERIAL OMITTED

William L. Kaplan, Hyattsville, Md., for Gordon; Feissner, Kaplan & Smith, Hyattsville, Md., of counsel.

Robert L. Parks, Miami, Fla., for Dixon.

Richard M. White, Miami, Fla., for Dubin.

Edward Mark Kay, Hollywood, Fla., for Schikevitz.

Martin D. Von Zamft, pro se.

Herbert L. Kaplan, Miami, Fla., for Fanning.

Harold Ungerleider, Miami Beach, Fla., for Marmorstein.

Lawrence E. Hoffman, Hoffman & St. Jean, Miami Beach, Fla., for Crandall.

E. David Rosen, Miami, Fla., for Levenson.

Barry L. Garber, Miami, Fla., for DeLalla.

Robt. W. Rust, U. S. Atty., Michael J. Osman, Asst. U. S. Atty., Miami, Fla., Robt. B. Serino, Atty., Dept. of Justice, Washington, D. C., for appellee.

Before JOHN R. BROWN, Chief Judge, and GEWIN and THORNBERRY, Circuit Judges.

Rehearing Denied and Rehearing En Banc Denied March 30, 1971.

GEWIN, Circuit Judge:

The ten defendants before us were convicted under an indictment charging conspiracy to misapply funds of the Five Points National Bank in violation of 18 U.S.C. 656, 1005 and 371; and of making false entries in the records of the bank with intent to defraud in violation of 18 U.S.C. 2 and 656. After a trial lasting almost five weeks in the Southern District of Florida, before judge and jury,¹ all appellants were convicted on all counts pertinent to them and were sentenced for periods ranging from five years imprisonment to five years probation.² For the reasons set forth below, we reverse the conviction of appellant Levenson and remand the case against him on the issue of insanity. We affirm in all other respects the judgments of conviction against the remaining appellants.³

The indictment, which originally named fourteen defendants,⁴ was filed August 16, 1967 and contained eight counts, Count I charged all of the appellants with conspiring to misapply funds of a national bank and specified 49 overt acts committed pursuant to the conspiracy. Counts II through Count VI charged certain officers and directors of the bank and various other defendants as aiders and abettors in making loans, alleged to be sham, the proceeds of which were converted to the use of the various defendants or others. Counts VII and VIII charged an officer of the bank with misapplication of funds by cashing checks known to be drawn on accounts with insufficient funds.

Since the facts which gave rise to this criminal prosecution are complicated, a capsule summary of the transactions will be given before proceeding to a more complete recitation of the relevant evidence as needed in our discussion of each alleged error. The evidence in general showed that certain of the appellants negotiated to purchase controlling interests in the Five Points National Bank from June 1964 until November 5, 1964.⁵ To finance the purchase agreement, money was borrowed from local banks, and then as these loans matured fraudulent loans were arranged at the Five Points Bank to generate the funds to pay for the stock.

During this period of negotiations, the purchasing appellants used their influence to insure that certain associates would be made directors of the bank, while other associates would be placed on the loan committee. As a result, from November 5, 1964 when some of these appellants acquired control of the bank, until the end of March 1965 when the Federal Bank authorities initiated daily supervision and curtailed further loan activity, appellants, with fraud and strategem, manipulated the assets of the bank to serve their own interests. The following fraudulent practices are illustrative of the numerous transactions which led to the collapse of the bank: (1) new unsecured loans were extended to cover old unsecured loans already in default; (2) loans were granted to virtual strangers, some of whom were nonresidents of the State of Florida, based on false financial statements, and substantial portions of the loan proceeds were used for the benefit of the appellants; (3) appellants obtained unsecured loans for themselves and others to promote fictional business investments; (4) loans were obtained and disbursed in the name of certain persons without their knowledge or consent, enabling the appellants to withdraw the proceeds of such loans on forged signatures; (5) appellants privately arranged excessive, unsecured loans for themselves and their associates and then entered false minutes in the bank records to represent that such loans had been approved by the loan committee; (6) many other devious methods and subterfuges were employed in connection with loans and their disbursement: checks were cashed without endorsement by the payee, loans were made to persons whose accounts were overdrawn, false addresses were given for out-of-state borrowers, false loan applications were submitted, forged corporate resolutions were used, loans were made to fictitious borrowers, and the proceeds of many substantial loans were withdrawn immediately, often in cash. In all, appellants authorized or arranged several hundred thousand dollars in fraudulent loans during the short four and one-half months of their control of the Five Points bank. Only a small portion of these loans was ever recovered.

I Conduct of the Trial

Appellants assert that they were denied a fair trial because (1) the court frustrated, harassed and disparaged counsel for the defense; (2) the court's extensive colloquy with counsel and witnesses alike created an atmosphere extremely prejudicial to appellants; (3) cross-examination was unduly restricted; and (4) the impaired ability of the court to hear the testimony of the witnesses and the objections of counsel was highly prejudicial to appellants.

At the outset it should be noted that this case involved eleven defendants each having his own attorney. The trial of the case lasted four and one-half weeks, with the court receiving into evidence the testimony of some sixty witnesses, and approximately 650 documents. Obviously, in a trial of this magnitude and complexity, the trial judge is entitled to a great deal of latitude in order to make certain that it progresses in an orderly and efficient manner.⁶ Appellants contend, however, that the court overstepped the bounds of judicial propriety by harassing and humiliating counsel, in the presence of the jury, thereby depriving them of a fair and impartial trial. In considering these contentions, we advert to the following basic principles set forth by this court in Posey v. United States:⁷

The conduct of the trial judge must be measured by a standard of fairness and impartiality. He is not, however, a mere moderator. It is his duty to conduct an orderly trial and to make certain, as far as possible, that there is no misunderstanding of the testimony. The comments of the court were often necessary to keep the trial on the proper footing, to expedite the trial, to avoid repetition in testimony and to properly restrict examination of witnesses by multiple counsel.⁸

Applying these standards to the conduct of the trial in its entirety, we are convinced that the appellants received a fair and impartial trial with every safeguard to which they were entitled. Nevertheless, the record as a whole serves as a chastening reminder of how easily impatience in a judge can produce the appearance of unfairness. In this regard what Judge Learned Hand said in United States v. Liss⁹ is pertinent:

It may perhaps have been true that at times his manner was not as urbane as could have been wished, and counsel may have occasionally smarted under his admonitions; but we can find no evidence that he improperly cut short their examination, and certainly none whatever that he expressed even indirectly an opinion as to the guilt of the accused.¹⁰

The trial judge's actions indicate a persistent, but nonpartisan effort to limit the evidence to that which was relevant to the issues created by the indictment and the pleas of the defense. At times the court was abrupt though never severe in its treatment of counsel for both the Government and the appellants. But nothing appears in the record to indicate that the judge did or said anything that prejudiced appellants or their counsel with the jury. Moreover, the record amply refutes appellants' contention that the court summarily denied all of their objections and clearly demonstrates that the court sought to provide them the opportunity to develop the case fully and to assert every defense which the court felt was legally available to them. The frustration of counsel that resulted from this steadfast adherence to the issues of the case and the rules of evidence does not provide a basis for reversal.¹¹

However, appellants argue specifically that the court demonstrated ineradicable bias and thereby committed reversible error by injudiciously reprimanding counsel for appellant Crandall. The disputed incident occurred during cross-examination of a Government witness when counsel asked whether the United States Attorney had instructed him to implicate one of the appellants. Following this question the trial judge called a bench conference to inquire whether counsel had any factual basis for the question. When counsel informed the court that he had no such basis, the judge pointed out that the question contained "an obnoxious insinuation" against Government counsel, and stated that he would not tolerate questions which case aspersions on other people unless based on some factual foundation. After the bench conference, the trial judge made this statement to the jury:

The court excludes the question that was asked by counsel as improper

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