People v. Whitlow

• Decision Date: 08 July 1980
• Docket Number: No. 78-33,78-33
• Parties: , 44 Ill.Dec. 888, Blue Sky L. Rep. P 71,566 The PEOPLE of the State of Illinois, Plaintiff-Appellee, v. Forest P. WHITLOW, John L. Brewer, Joseph P. Delfino, Truman K. Gibson, Jr., and James Marando, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

Page 1354

411 N.E.2d 1354

86 Ill.App.3d 858, 44 Ill.Dec. 888, Blue

Sky L. Rep. P 71,566

The PEOPLE of the State of Illinois, Plaintiff-Appellee, v. Forest P. WHITLOW, John L. Brewer, Joseph P. Delfino, Truman K. Gibson, Jr., and James Marando, Defendants-Appellants.

No. 78-33.

Appellate Court of Illinois, Third District.

July 8, 1980.

Donald B. Mackay, Melbourne A. Noel, Jr. and Bernard Hoffman, Asst. Attys. Gen., William J. Scott, Atty. Gen., Chicago, for plaintiff-appellee.

Anton R. Valukas and Jeffrey D. Colman, Jenner & Block, Chicago, for Truman K. Gibson, Jr.

David L. Thompson, Moline, Peter M. Soble, Rock Island, for James marando.

Matthias A. Lydon, Chicago, for Forest P. Whitlow.

F. Jack Nathan, Spector & Tappa, Rock Island, for Delfino and Brewer.

SCOTT, Justice:

After a lengthy trial in Rock Island County the defendants Whitlow, Brewer, Delfino, Gibson and Marando were all found to be guilty of the offenses charged in a twelve count indictment. Briefly summarized, the twelve counts charged that all the defendants sold stock in a corporation known as Royal National Investment and Mortgage Corporation and that in selling the stock they made false statements and omitted to inform prospective purchasers of material matters relating to the stock and the company. Counts I through V charged the defendants with conspiracy and substantive violations of the Illinois Securities Law and specifically Illinois Revised Statutes 1973, chapter 1211/2, paragraph 137.12(F)(G)(I) and paragraph 137.14. Count I charged the defendants with conspiracy to violate the Securities Law. Count VI charged the defendants with conspiracy to commit the offense of theft in violation of Illinois Revised Statutes 1973, chapter 38, paragraph 8-2(a). Counts VII through XII charged the defendants with theft by deception in violation of Illinois Revised Statutes 1973, chapter 38, paragraph 16-1(b)(1).

All of the defendants with the exception of Marando were officers and directors of Royal National. Marando was a salesman of the corporation who was paid a commission on the stock sales he made.

After approximately three weeks of trial the trial of the defendant Marando was severed from that of the other defendants when it became apparent that his defense was antagonistic to that of the other defendants. He later pleaded guilty to Counts II through V (Securities Law violation) of the indictment and was sentenced to concurrent terms of not less than one nor more than three years of imprisonment.

Subsequent to the jury return of guilty verdicts against the defendants Whitlow, Brewer, Delfino and Gibson on all twelve counts of the indictment, the trial judge vacated and dismissed judgments on Counts I, VI and XII. The order dismissing Counts I and VI (the conspiracy counts) was entered pursuant to Illinois Revised Statutes 1973, chapter 38, paragraph 8-5, which mandates that judgment shall not be entered on substantive counts as well as a conspiracy count. Count XII was dismissed on the grounds that it did not properly allege an offense.

The trial court permitted the judgments of guilty on the remaining nine counts to stand. The defendant Gibson was sentenced to concurrent terms of imprisonment of not less than one nor more than three years on each count and was further fined in the amount of $20,000. The defendants Whitlow, Brewer and Delfino were sentenced to concurrent terms of imprisonment of not less than one nor more than three years on each count.

A brief summary of the facts which resulted in the defendants' convictions is as follows: The evidence adduced at the trial of the defendants disclosed that after the incorporation of Royal National they personally and/or with the assistance of their salesman, the defendant Marando, proceeded to sell stock. The stock was sold for $1.00 per share and in most instances a minimum purchase of 10,000 shares was required. In opening statement the State informed the jurors that when selling the stock it was represented to a number of prospective purchasers that the corporation would engage in the acquisition of "sludge" which would be transported to the Bahamas or other Caribbean islands for use as fertilizer on non-productive soil. The term "sludge" is used in referring to processed wastes, primarily human wastes, the disposal of which is presenting a problem to large municipalities. Other possible ventures mentioned were the building of condominiums in the Bahamas, a program to train Bahamanian people for various types of employment and the ownership of a scholarship research program. The record further establishes that the defendant Gibson was interested in and did do a considerable amount of investigation, research and other activities in regard to the "sludge" program. A great portion of his time for a one and one-half year period was devoted to promoting a sludge project. He worked with officials from the Metropolitan Sanitary District of Chicago which is engaged in a sludge project. He also had numerous contacts with officials from the Bahamian government and the United States. The sludge project never materialized and the jury was confronted with a factual question as to how much if any of defendant Gibson's activities relating to sludge were performed on behalf of Royal National. Ultimately approximately $220,000 was realized from the sale of Royal National's stock, a great portion of which was disbursed to the defendants Whitlow, Brewer, Delfino and Gibson as payment of salaries and for the reimbursement for alleged expenses. The defendant Marando received a comparatively smaller amount for commissions earned. None of the investors ever realized any financial gain but on the contrary all suffered losses.

The defendant Gibson prior to and at the time of the incorporation of Royal National was a lawyer. From August, 1971, to July, 1974, he maintained an office on North Michigan Avenue in the city of Chicago. From May, 1973, to January, 1974, defendants' office space was also used by Royal National which entered into a rental agreement with a company known as Tuesday's Publications, the owner of the office building or the entity in charge of renting the same. While Royal National used the office facilities they were also used by defendant Gibson in handling business other than that of Royal National.

This appeal presents a multiplicity of issues, so a further recitation of additional facts will be set forth if and when they become pertinent.

Attention is first directed to the defendants Whitlow, Brewer, Delfino and Gibson's contention that they should receive a new trial because of prejudicial misconduct throughout the trial on the part of the prosecutor.

A number of incidents occurred during the trial which are claimed by the defendants to have resulted in misconduct on the part of the prosecutor of such a serious nature as to require a reversal of their convictions and a remandment for the purpose of a new trial. Those incidents complained of occurred in the prosecutor's opening statement, voir dire examination and closing argument. This court will consider them sequentially.

The defendants contend that in the opening statement the prosecutor claimed that the evidence to be adduced would prove that the investors were told of certain matters which would influence a reasonable investor in arriving at his decision as to whether or not he should purchase stock. Specifically the defendants cite the following comment made by the prosecutor:

"They (the investors) were never told that the one legitimate bill ever incurred by Royal National, a bill to send something (sic) to the Bahamas to see if some of these projects might be feasible, a bill for $2500.00, a bill amounting to not even one percent of the total income of Royal National never was paid and goes unpaid to this date."

Evidence disclosed that a bill was owed by Royal National to Dr. W. J. Bauer, a consulting engineer. Dr. Bauer's business was contacted and retained by James Braxton, an official of the Metropolitan Sanitary District, to conduct a study in certain areas of the Bahamas as to the feasibility of a sludge operation in the areas designated. Braxton and defendant Gibson had frequently met and worked together in regard to a sludge project. It is evident that Braxton, who employed Bauer's business, was acting for Gibson. Bauer was to testify that he assigned Dr. Tom Hinsley of the University of Illinois to journey to the Bahamas and make the requested study. Hinsley did so in the summer of 1974. It was Bauer's further testimony that the bill was for $1,200 rather than $2,500, but in any event it remained unpaid as of the dates of the trial.

The defendants correctly argue that it would have been impossible to advise the prospective purchasers of the unpaid bill since it was not incurred until long after the sales of stock.

This court has stated:

"Assumptions and statements of fact which are not based upon evidence admitted at trial, may not properly be argued to the jury. (People v. Beier, 29 Ill.2d 511, 194 N.E.2d 280.) Upon similar reasoning the prosecutor cannot comment during his opening statement upon what testimony will be introduced at trial and then fail to produce such testimony. Such arguments and comments effectively asserts the prosecutor's own unsworn testimony in lieu of competent evidence." People v. Rogers (1976), 42 Ill.App.3d 499, 1 Ill.Dec. 287, 290, 356 N.E.2d 413, 416.

It is the State's contention that the complained of comment was merely made in an incorrect context. It is difficult if not impossible to perceive a context where such a comment would be justified and permissible because it is not susceptible of proof. The State's other response to the defendants' claim of error is that prejudice was eliminated as the result of the trial court advising the jury that opening statements as well as closing arguments were not evidence in this case. The record supports the State's...