State v. Crews, 10894
| Citation | 799 P.2d 592,110 N.M. 723,1989 NMCA 88 |
| Decision Date | 26 October 1989 |
| Docket Number | No. 10894,10894 |
| Parties | , RICO Bus.Disp.Guide 7616 STATE of New Mexico, Plaintiff-Appellee, v. Robert CREWS, Scott Crews and Whitfield Bus Lines, Inc., Defendants-Appellants. |
| Court | Court of Appeals of New Mexico |
This matter is before us on rehearing. On rehearing, the previous opinion is withdrawn and the following is substituted.
Defendants appeal from convictions for conspiracy to commit fraud, fraud, and racketeering following a jury trial. Nine issues are raised as grounds for reversal: (1) validity of contractual provisions; (2) sufficiency of evidence; (3) claim of variance; (4) prosecutorial argument to the jury; (5) denial of due process; (6) invalidity of statement of facts; (7) claim of prosecutorial misconduct; (8) invalidity of charge of racketeering; and (9) claim of cumulative error. We affirm in part and reverse in part.
The criminal charges against each of the defendants arose, in part, out of defendants' actions and conduct relating to monies received by them pursuant to school bus transportation agreements entered into by defendants with the Las Cruces School District No. 2 (District) and the State Board of Education. During the period from July 1980 through May 31, 1986, Whitfield Bus Lines, Inc. (Whitfield), was awarded a series of contracts by the District, and the State Board of Education, State Transportation Division (Division), to transport children. Defendant Robert Crews was the president of the Whitfield corporation and is the father of defendant Scott Crews. Scott Crews was the vice president of Whitfield and participated in its operation.
For several years prior to 1980, and during the years 1980 through 1986, the District and Whitfield entered into annual contracts to provide school transportation. The contracts were on forms prepared by the Division and were subject to its final approval. The State Board of Education, through the Division, oversees school bus transportation throughout New Mexico. Each of the transportation contracts for the years in question specified that funds for payment of transportation services would be provided by the state and paid to the contractor through the District. The amounts payable to defendants under the contracts were determined by the contracts and a statewide transportation formula prepared by the Division, based in part on information supplied by defendants. Under the contracts, payments to Whitfield were subject to routine audit by the state. The contracts also provided that Whitfield was to maintain records of its transportation operations, including cost reports as required by NMSA 1978, Section 22-8-28 (Repl.1986).
Payments to Whitfield under the state transportation formula were computed on the basis of the length and type of each school bus route, the age, type and size of the bus used, and other related factors. Each year the payment formula was revised according to the availability of funds and the needs of the District. Under the contracts, defendants were to receive specific payments for services rendered in transporting children on each bus route. The amounts payable to a contractor under the contracts included, among other things, profit on operational revenue, the cost of fuel, drivers' salaries, special education aides' salaries, gross receipts tax, depreciation allowance, operation and maintenance allowance, and employee fringe benefits. The contracts entered into by defendants for the period 1980 through 1986 specified that payments to defendants would be based in part on the adjusted total of the transportation formula for the routes serviced by the contractor.
Following a state audit of payments made to defendants under the school bus transportation contracts and which included the period of 1982 through 1986, numerous financial discrepancies were found and defendants were subsequently indicted and charged with conspiracy to commit fraud, fraud, and racketeering. Defendants were alleged to have committed fraud by claiming that certain of the buses supplied by them were gasoline operated and subject to a higher fuel allowance, when in fact they were diesel-powered and subject to a lower fuel allowance; falsifying the date of the buses' manufacture in order to qualify for a greater depreciation allowance; and misrepresenting that they were paying drivers the aggregate amount of money specified in the contracts and in accordance with the state formula. Defendants were also charged in separate counts for different contract years with having falsely misrepresented to the District and Division that they were entitled to receive in excess of $20,000 for each contract year intending to deceive or cheat the state and District concerning the cost of providing special education aides on buses transporting handicapped children. The state also alleged that because of the misrepresentations by defendants, they improperly obtained funds in excess of $20,000 for each contract year for special education aides.
Before trial the state voluntarily dismissed some of the fraud counts and by stipulation of both sides, the remaining counts of the indictment were renumbered.1 Following a jury trial, defendants were acquitted of the counts which charged fraud in connection with the "depreciation allowance" of vehicles and each defendant was convicted of seven counts of fraud over $20,000, one count of fraud over $2,500, and one count each of conspiracy and racketeering.
Each defendant, including the corporation, was convicted of four counts of fraud over $20,000, contrary to NMSA 1978, Sections 30-16-6 and 30-1-13 (Repl.Pamp.1984), for fraudulently misrepresenting that defendants were paying to their bus drivers the aggregate amount of monies provided for in the annual transportation contracts and generated for drivers' salaries by the Division's distribution formula for the school years 1982-83 through 1985- 86. Defendants were charged both as principals or as accessories.
Defendants argue that during the applicable time periods there was no state regulation, statute, or other legal provision authorizing the contractual provisions contained in the transportation contracts requiring payment by them of the aggregate amount of monies provided in the contracts and which had been generated for drivers' salaries by the Division's distribution formula. Defendants contend that absent a valid statute, regulation, or other authority, they are not subject to criminal culpability and that the contract provisions regarding drivers' salaries are legally unenforceable.
Defendants assert that the contractual provisions in question were placed by the Division in all school bus transportation contracts because of language incorporated in the 1972 General Appropriations Act, 1972 N.M.Laws, Chapter 98. The pertinent language of that statute provided, "The state board of education shall promulgate and enforce regulations which will ensure that the total salaries paid to school bus drivers by a school bus contractor or school district shall be at least equal to the amount provided for that purpose under the distribution formula * * *." 1972 N.M.Laws, ch. 98, Sec. 4, p. 698-9.
Since 1972, all contracts with school bus providers contained provisions stating that the contractor was obligated, through development of a salary schedule, to expend for drivers' salaries at least the aggregate amount of money generated for drivers' salaries by the Division's distribution formula. Although the phrasing of these provisions varied in part from 1982 to 1987, the substance of such contractual provisions was not materially changed.
Defendants contend that this contractual provision is void and that the challenged language contained in the 1972 General Appropriations Act violates Article IV, Section 16 of the New Mexico Constitution because the constitution limits what an appropriation act may properly contain. Defendants argue, among other things, that the 1972 Appropriations Act purported to require the State Board of Education to adopt regulations governing future appopriations of state funds expended for school bus transportation, that the act attempted to establish as a permanent policy a requirement that future years' appropriations be restricted regarding the use of drivers' salary funds, and that such provision is invalid. We do not agree. An equally reasonable interpretation of the contested provisions of the 1972 General Appropriations Act is that the language requiring the distribution of the entire drivers' salary aggregate was intended by the legislature to apply only to that fiscal year. The inclusion of this provision in each of the school bus transportation contracts for the ensuing years was not dependent for its enforceability upon the existence of a statutory provision or a state board of education regulation.
Even if we were to assume, arguendo, the merit of defendants' argument regarding the unconstitutionality of the 1972 Appropriations Act, an interpretation we do not determine to be meritorious, this would not require dismissal of the fraud charges against defendants. Defendants cite to three out-of-state cases where a contract provision was voided because it was based on an unconstitutional statute. See State ex rel. State Highway Comm'n v. City of St. Louis, 575 S.W.2d 712 (Mo.App.1978); Hartford Ins. Group v. Town of North Hempstead, 127 Misc.2d 72, 485 N.Y.S.2d 436 (N.Y.Sup.Ct.1984); City of Cleveland v. Clements Bros. Constr. Co., 67 Ohio St. 197, 65 N.E. 885 (1902). We conclude that these cases are distinguishable from the facts of the instant case because they do not involve...
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