Parr v. United States, 17071.

• Decision Date: 06 April 1959
• Docket Number: No. 17071.,17071.
• Citation: 265 F.2d 894
• Parties: George B. PARR, D. C. Chapa, B. F. (Tom) Donald, Jr., Jesus G. Garza, Santiago Garcia, Octavio Saenz, Jesus Oliveira, O. P. Carrillo, Oscar Carrillo, Sr., Texas State Bank of Alice, Alice, Texas, and San Diego State Bank, San Diego, Texas, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

265 F.2d 894 (1959)

George B. PARR, D. C. Chapa, B. F. (Tom) Donald, Jr., Jesus G. Garza, Santiago Garcia, Octavio Saenz, Jesus Oliveira, O. P. Carrillo, Oscar Carrillo, Sr., Texas State Bank of Alice, Alice, Texas, and San Diego State Bank, San Diego, Texas, Appellants, v. UNITED STATES of America, Appellee.

No. 17071.

United States Court of Appeals Fifth Circuit.

April 6, 1959.

T. Gilbert Sharpe, Brownsville, Tex., Percy Foreman, Houston, Tex., Luther E. Jones, Jr., Corpus Christi, Tex., and Sharpe, Cunningham & Garza, for appellants.

Malcolm R. Wilkey, Asst. Atty. Gen., William B. Butler, U. S. Atty., Edgar O. Bottler, Sp. Asst. Atty. Gen., Houston, Tex., for appellee.

Before TUTTLE, JONES and BROWN, Circuit Judges.

TUTTLE, Circuit Judge.

Appellants were convicted of violating the United States Mail Fraud Statute, 18 U.S.C.A. § 1341.¹ This was the second trial under the indictment, the first having resulted in no convictions on any of the 20 counts, verdicts of acquittal as to two of the defendants on 19 out of 20 counts, verdicts of acquittal on several other counts as to several other defendants, and a mistrial as to the remaining defendants on all twenty counts. The 20th count was a conspiracy count.

This trial, vigorously contested, involving several weeks of testimony before the jury, produced 16 volumes of printed record, containing nearly 6,000 pages. The reiterated argument of counsel here that the record does not support the findings of the jury as to each of the defendants on each count included in the verdict has caused us to read carefully the extensive oral testimony in the case.

We can best state the case by briefly stating the facts upon which we conclude the jury could legally find all but two of the defendants guilty on counts 1-19. We shall thereafter discuss the legal points urged by appellants, some 30 in number.

Competent oral testimony and documentary evidence properly admitted on the trial would permit the jury to find the existence of the following scheme to defraud beginning in 1948 and concluding in 1954.

The Benevides Independent School District (hereafter B.I.S.D.) was a Texas school district that operated schools in the small Texas town of Benevides of several thousand population and in Freer, a town of approximately the same size. The population of Benevides was more than 90% of Latin derivation, whereas that of Freer was mostly "Anglo," as the saying goes in Duval county in which both towns, as well as Alice, the county seat, were situated. The Texas law provided for a board of seven trustees to run the district. Actually a majority of four of Latin derivation lived in Benevides and three "Anglos" lived in Freer, and the seven rarely met as a board. Each group ran its own school and prepared its own budget which, when combined under the direction of the Benevides group, resulted in the district budget on which tax assessments and collections were made. The office of the district was, until July 1, 1951, outside of the district in the Parr Building, in the town of San Diego, the home town of defendant, George B. Parr. Parr was the principal stockholder and president of the Texas State Bank of Alice, the official depository for the school district, so designated by the Texas school authorities, and he was also president and principal stockholder of the San Diego State Bank, San Diego, Texas.

Among the other defendants was a majority of the Benevides trustees, Octavio Saenz, the president of the board, Jesus G. Garza and Santiago Garcia. Defendant Oscar Carrillo, Sr. was secretary of the board and D. C. Chapa was the board-appointed Tax Assessor and Collector. He was the father of board member Oscar Carrillo and of defendant O. P. Carrillo, who became the paid lawyer for the board. The difference in names is accounted for from the fact that Mr. D. Carrillo Chapa took to the name Chapa, whereas his sons preferred Carrillo. The defendant Jesus Oliveira was a director of the Texas State Bank of Alice, and, though not a bona fide employee of B.I. S.D., the recipient of substantial board funds paid to him at the rate of $100 per month. Defendant B. F. Donald was the cashier of the Texas State Bank of Alice, of which Parr was president.

The day to day work of the school district office was done by a group consisting of one W. M. Benson, the auditor, (until July, 1950,) and Diego Heras, bookkeeper and "acting" secretary, and several women clerks. There were offices for George B. Parr, Chapa, and for Oscar Carrillo, Sr., the secretary. Although Parr was not a member of the Board, he attended the principal meetings of the board and completely dominated its activities. After July 1, 1950, he personally countersigned substantially all the Board checks. He also controlled the Texas State Bank at Alice, the Board's depository and the San Diego State Bank which cashed many Board checks without endorsement. Under the direction of defendant Parr, Heras or Benson frequently made out checks on the B.I.S.D. account payable to non-existent persons² and to actual payees for work that was not performed. These checks were signed at different times by Saenz, D. C. Chapa, Heras (he signed none after July, 1951) and Oscar Carrillo, Sr. (after July, 1951), and, until July, 1950, were countersigned by Benson and thereafter by George B. Parr. During the years involved such proven checks amount to approximately $190,000. Many of these checks were cashed at the Alice State Bank by or at the express direction of Donald, without endorsement of the payee, and the cash proceeds were delivered to Parr and occasionally to Chapa. Others of the fraudulent checks (those made out to names similar to the names of relatives of defendants) were cashed by the payee and still others were cashed by some of the defendants upon forged endorsements.

With the exception of Jesus Oliveira and O. P. Carrillo, who were convicted on the conspiracy count only, and whose cases will be separately discussed, each of the individual defendants participated directly in the preparation and negotiation of the fraudulent checks or was a substantial beneficiary from the practice, or both. Proof was introduced from which the jury could find that the two, Oliveira and Carrillo, were recipients of board money illegally.

The fraudulent scheme which the jury could find existed included the necessary steps of so keeping the board's records and so making its annual reports to the appropriate Texas school agency as to produce the board's annual share of state funds (approximately $140,000 per year) and included the necessary steps of assessing and collecting the taxes which the board had the legal power to levy. Thus enough money was collected to provide for the legitimate operation of the schools to the relative satisfaction of the school patrons, and enough additional was brought in to provide the funds to be looted.

An additional source of funds to the board tax assessor and collector Chapa, one of the most important figures in the scheme, was his billing of taxes to nonresident owners of mineral interests whose names did not appear on the tax rolls, and his personally cashing of the tax checks when received, at the San Diego State Bank, where the jury could believe his personal loans were credited with the proceeds.

The foregoing is the barest outline of the scheme which we have said the jury could find was concocted and participated in by all of the defendants, other than the two already mentioned, and of the evidence from which they also found that all were guilty of a conspiracy to do these acts. Counsel for the appellants, by the most vigorous cross examination of Diego Heras, sought to show that he too profited by the scheme and that his testimony was in conflict with earlier sworn statements and testimony. The jury could have believed both that Heras had feathered his own nest at the expense of the board³ and that his testimony was far from trustworthy. The fact that he also participated in the scheme and was an important actor in carrying it out, if he was, did not, of course, prevent the jury from believing his testimony, much of which was corroborated by other testimony and circumstances.⁴ Benson's testimony was also attacked by appellants, since he was the countersigner of most of the fraudulent checks prior to July 1, 1950. The court charged that Heras was an accomplice as a matter of law, and that the jury could find Benson an accomplice on the record.

Of course, the weight to be attributed to the witnesses' testimony on such a trial is exclusively for the jury. We conclude that the evidence fully warranted the jury's findings that this group of defendants did concoct a scheme to take over the operation of the Benevides Independent School District and operate the schools in such a manner as to enable them to siphon off from the school funds brought in by their false representations to the state and their illegal⁵ assessments and levies against taxpayers in excess of $200,000 for themselves.

The gist of a mail fraud case is the placing or causing something to be placed in the mails or taking or causing something to be taken from the mails "for the purpose of executing such scheme * * *" The jury could believe that the nineteen different deposits in, or takings of mail from, the United States mail in the Houston Division of the Southern District of Texas, occurred as testified. We discuss below the legal question as to the causal relationship of the appellants and the persons who thus used the mails and also the issue of wilfulness in connection with causation.

Appellants contend here that such a scheme, if proved, does not vest jurisdiction in the Federal courts under the mail fraud statute. They say that this was a public body authorized and obligated by law to assess property in the District for taxation and levy taxes thereon for the legal operation of the schools. They say that the mailings in counts 1...