Heald v. United States

• Decision Date: 28 July 1949
• Docket Number: No. 3793.,3792,No. 3791,3791,3793.
• Citation: 175 F.2d 878
• Parties: HEALD v. UNITED STATES (three cases).
• Court: U.S. Court of Appeals — Tenth Circuit

175 F.2d 878 (1949)

HEALD v. UNITED STATES (three cases).

Nos. 3791, 3792, No. 3793.

United States Court of Appeals Tenth Circuit.

July 7, 1949.

Rehearing Denied July 28, 1949.

Isaac Mellman, Denver, Colo., for appellants.

Henry E. Lutz, Assistant United States Attorney, Denver, Colo. (Max M. Bulkeley, United States Attorney, Wray Colo., on the brief), for appellee.

Before PHILLIPS, Chief Judge, and BRATTON and HUXMAN, Circuit Judges.

HUXMAN, Circuit Judge.

Appellants were indicted, tried, and convicted in the United States District Court for the District of Colorado under 18 U.S. C.A. § 88 now § 371. The indictment charged them with conspiring to violate the False Claim Statute, 18 U.S.C.A. § 80 now §§ 287, 1001, and with conspiring to violate Title III, Servicemen's Readjustment Act, 38 U.S.C.A. §§ 694 and 694a. Numerous assignments of error are urged for reversal.

It is first contended that the indictment was insufficient to state an offense in that it merely alleged conclusions and not facts as to the objects of the conspiracy and that the violation of the Servicemen's Readjustment Act is not an offense against the United States. Abbreviated, the indictment charged that appellants conspired, combined, confederated, and agreed together and with each other to defraud the Government by violating the provisions of Title 18, Sections 80 and 88, and Title 38, Sections 694 and 694a, U.S.C.A. It charged in substance that the defendants, as owners or brokers of those certain residential premises mentioned therein, conspired and agreed that they would, by the fraudulent means set out, cause the United States, acting by and through its Veterans Administration, an agency of the United States, to guarantee in part a loan under the provisions of Sections 694 and 694a, Title 38 U.S.C.A., in the sum of $9,600 to be made by the Silver State Savings and Loan Association of Denver, Colorado; that they would knowingly, willfully, falsely and fraudulently represent to the Silver State Savings and Loan Association that they would sell the house to John C. Hess, a veteran, eligible for the benefits of Subchapter II of the Servicemen's Readjustment Act, 38 U.S. C.A. §§ 694-964j, and his wife, for $10,600 when in truth and in fact they would be and were selling it to him for the sum of $11,500, which loan the United States, acting through the Veterans Administration, would not guarantee were the true facts known; that appellants conspired by fraudulent means, set out, to impair and obstruct the Veterans Administration in the exercise of its governmental function of guaranteeing loans for homes to Veterans under Sections 694 and 694a, Title 38, United States Code Annotated; that the Silver State Savings and Loan Association was a member of the Federal Home Loan Bank system; that the permitted selling price of the premises in question, as fixed and appraised by the Veterans Administration, was $10,600, as the appellants well knew; that they would exhibit to the Loan Association an alleged pretended contract with Hess, dated June 14, 1947, calling for the sum of $10,600 as the selling price, although they would also then and there have in their possession another and different contract dated June 13, 1947, providing for the payment by Hess of $11,500, and that by means of exhibiting such fictitious and pretended contract the said defendants would procure the Silver State Savings and Loan Association to make a loan of $9,600 on the premises and would cause the United States, acting by and through the Veterans Administration, to guarantee such loan to the extent of $4,000. The indictment then set out specific overt acts which it is alleged were committed in furtherance thereof.

18 U.S.C.A. § 88, provides: "If two or more persons conspire either to commit any offense against the United States, or to defraud the United States in any manner or for any purpose, and one or more of such parties do any act to effect the object of the conspiracy, each of the parties to such conspiracy shall be fined not more than $10,000, or imprisoned not more than two years, or both."

38 U.S.C.A. § 694, relates to the eligibility of Veterans for loans, and Section 694a describes the condition under which such a loan will be guaranteed. Thus, among other things, it provides: "That the price paid or to be paid by the veteran for such property or for the cost of construction, repairs, or alterations does not exceed the reasonable value thereof as determined by proper appraisal made by an appraiser designated by the Administrator."

It is difficult to see how the alleged offense could be more clearly charged. The gist of the offense charged was that appellants conspired to defraud the United States by inducing the Veterans Administration, through fraudulent representations, to guarantee, in part, a loan to Hess on a house he was purchasing from them, which loan it would not and could not guarantee were the true facts known. In order to be eligible for a guaranteed loan under the above Act, the price paid by the veteran must not exceed the reasonable value thereof as determined by a proper appraisal made by an appraiser designated by the Administrator. Concealing the actual selling price for the purpose of obtaining a guaranteed loan which could not be obtained were such price known, impairs the functions of the Veterans Administration and conspiring to do so states an offense against the United States. Haas v. Henkel, 216 U. S. 462, 30 S.Ct. 249, 54 L.Ed. 569, 17 Ann. Cas. 1112. Hammerschmidt v. U. S., 265 U.S. 182, 44 S.Ct. 511, 68 L.Ed 968. This is true even though pecuniary or property loss to the Government is not contemplated or does not result. Berenbeim v. U. S. 10 Cir., 164 F.2d 679.

It is true, as contended by appellants, that the sale of the house was not a matter which was within the jurisdiction of the Veterans Administration, but passing upon applications for guaranteed loans in connection with such sales was within its jurisdiction, and the false representations which appellants caused to be made pertained to matters within its administration as an agency of the United States. Todorow v. United States, 9 Cir., 173 F.2d 439.

Neither is there any merit in the contention that no deception was practiced on the United States and as a consequence it was not defrauded. In Berenbeim v. United States, supra 164 F.2d 683, we said: "* * * A scheme designed to interfere with or obstruct a department or an agency of the government in respect of one or more of its lawful functions by deceit, craft, chicanery, or trickery, attended by an overt act of one or more of the conspirators in furtherance of the purpose, comes within the statute, even though pecuniary or property loss to the government is not contemplated and does not result."

It is next urged that the evidence was insufficient to submit the case to the jury and that the court erred in overruling appellants' motion for a directed verdict at the conclusion of the government's evidence and again at the conclusion of all of the evidence. True, there was no direct evidence of an agreement among the appellants. But as has been said times without number, conspiracies rarely, if ever, are established from direct evidence. Conspiracies by their very nature must generally be established in large part from conversations, admissions, conduct, and the natural inferences to be drawn therefrom,¹ and it is sufficient if the circumstances, acts, and conduct of the parties are of such character that the minds of reasonable men can conclude therefrom that an unlawful agreement or understanding exists.²

Tested by this rule there is ample evidence in the record not only to warrant submitting the case to the jury but also to sustain its verdict. A brief resume shows these facts.

E. Clifford Heald and Louise B. Heald are husband and wife, and Bradley Heald is their son. E. Clifford Heald is a lawyer. Bradley Heald was the builder and seller of some 40 houses known as the Heald project. Louise B. Heald was the sales agent of the houses, on commission, and executed as broker one of the sales contracts pertaining to the house in question. E. Clifford Heald, along with one Ginsberg owned the lots on which the houses were built and these two from time to time deeded the houses to Bradley Heald so as to enable him to execute deeds to persons.

By letter to the Veterans Administration dated February 20, 1947, Bradley Heald requested an appraisal of the 40 houses in the Heald Project, the letter stating that the houses were being constructed under Priorities Regulation 33 for preferential sale to veterans. The houses were all appraised by the Veterans Administration on March 17, 1947, and the reasonable value of each was appraised at $10,600 by the official appraisers. The Healds were notified of this appraisal April 4, 1947.

Pursuant to an advertisement in a local paper offering these houses for sale, John C. Hess, a veteran, contacted Louise B. Heald on June 12, 1947, and asked her if the houses would take a G. I. loan. He received an affirmative reply. She represented the sale price to be $11,500, and Hess immediately gave her a check for $500 as a down payment and arranged to see E. Clifford Heald the next day to complete the deal. On June 13, 1947, Hess went to the office of E. Clifford Heald where a receipt and option agreement, prepared prior to his arrival, calling for a consideration of $11,500 was signed by Hess and E. Clifford Heald. The contract recited that the option was to be exercised provided the buyers could obtain a loan for $9,600. It was signed, "Heald Investment Company, Broker, by E. C. Heald." Hess testified that he signed several other documents at the same time which E. Clifford Heald advised him were copies of the $11,500 contract. It developed, however, that on this occasion Hess actually had signed another and different contract bearing the date of June 14, 1947, calling for a...