State v. West

• Decision Date: 30 November 1977
• Docket Number: No. 11874,11874
• Citation: 260 N.W.2d 215
• Parties: STATE of South Dakota, Plaintiff and Appellant, v. Frank WEST, Defendant and Respondent.
• Court: South Dakota Supreme Court

Page 215

260 N.W.2d 215

STATE of South Dakota, Plaintiff and Appellant, v. Frank WEST, Defendant and Respondent.

No. 11874.

Supreme Court of South Dakota.

Nov. 30, 1977.

Thomas J. Welk, Asst. Atty. Gen., Pierre, for plaintiff and appellant; William J. Janklow, Atty. Gen., Pierre, on brief.

Harvey C. Jewett of Siegel, Barnett, Schutz, O'Keefe, Ogborn & Jewett, Aberdeen, James P. Linn of Linn, Helms, Kirk & Burkett, Oklahoma City, Okl., for defendant and respondent.

ZASTROW, Justice.

This is an appeal by the state (pursuant to SDCL 23-51-2(2)) from the trial court's order granting the defendant's motion to compel the election of counts and the defendant's motion to dismiss all charges based upon a former judgment of acquittal. We affirm in part and reverse in part.

The defendant, Frank West (West), was president of American Beef Packers, Inc. (ABP), once the second largest packing company in the United States with assets of over $100,000,000 on June 30, 1974; by January 7, 1975, ABP, because of financial setbacks, had filed for a chapter XI bankruptcy. The bankruptcy was caused by an inability of ABP to obtain the long-term financing necessary for the construction costs of a new packing plant in Dumas, Texas. As the result of the lack of operating funds and the filing of the bankruptcy, a large number of producers in thirteen midwestern and western states were unpaid for over $20,000,000 worth of livestock shipped to ABP's six slaughter houses.

One of these producers was Dalton Docter (Docter) of Amherst, South Dakota. As a result of eleven separate sales of cattle by Docter to ABP between December 19, 1974 and January 4, 1975, criminal charges were filed against West, Tom Clark, ¹ W. G. Myers, ² and Myron Ousley. ³ The charges against Clark, Myers and Ousley were ultimately dismissed, and they were granted immunity by the state in return for their testimony against West. After the dismissal of several alternative counts by the state, West stood charged with four counts of grand larceny, four counts of obtaining property by false pretenses, and seven counts of issuing a large check against insufficient funds.

West and ABP were also indicted by a federal grand jury in the United States District Court in Omaha, Nebraska, charging them in one hundred five counts with violations of 18 U.S.C. § 1341 (mail fraud), § 1343 (wire fraud), § 2314 (interstate transportation of stolen property), § 371 (conspiracy), and § 2 (aiding and abetting). These federal charges will be discussed in more detail later in the opinion.

The complicated financial problems of ABP which led to the bankruptcy and these criminal charges are outlined in the decisions of United States v. West, D.C.Neb., 407 F.Supp. 1148, and United States v. West, 8 Cir., 549 F.2d 545. The financial difficulties of this multimillion dollar business led West, ABP and several of its employees to become involved in an elaborate bookkeeping scheme which allowed ABP to divert funds belong to its primary financial backer General Electric Credit Corporation (GECC). This scheme had been in operation since December 1973, and was not discovered by GECC's auditors until December 16, 1974, when the diversion had reached over $5,000,000. The discovery of this diversion led to a substantial disagreement between ABP and GECC over the daily loans it made to ABP to cover checks issued by ABP for the purchase of livestock. After several days of financial difficulties and GECC's refusal to make a $15,000,000 loan, ABP was unable to provide sufficient funds to cover all of the checks presented to its various banking accounts, principally the Seattle First National Bank (Seattle Bank) and the Wachovia Bank and Trust Company (Wachovia Bank) of Winston-Salem, North Carolina. On January 3, 1975, after covering checks to the extent of the funds available, these banks began returning checks presented for payment for insufficient funds. The ABP plants were advised by the corporate officers to delay sending any checks still in their possession. More checks were returned by the banks on the next business day, January 6, 1975. ABP finally stopped issuing checks on January 6, and on January 7 filed for a chapter XI bankruptcy in the United States District Court in Omaha, Nebraska.

To present the facts in chronological order, we begin with count IX of the state's information. Count IX, as do counts X through XV, charged that West, with the intent to defraud, drew checks against a bank account with insufficient funds for the payment of the checks, in violation of SDCL 22-41-1.1.

Count IX specifically involves the purchase by ABP cattle buyer Loren Lorenzen of 233 head of livestock from Docter on December 19, 1974. The cattle were shipped to the ABP plant in Oakland, Iowa, and were slaughtered on December 21, 1974. Because the final price was based upon the grade and yield of the carcass, the check in the amount of $86,807.29 was not drawn on the ABP account at the Seattle Bank and mailed to Docter until December 21, 1974. This check was deposited at the Britton Branch of the First National Bank of Aberdeen (Britton Branch Bank) on December 30, 1974. It was among the many checks returned by the Seattle Bank after January 3, 1975.

Counts X and XI of the information involve the purchase by ABP buyer Myron Ousley of 36 heifers and 9 steers from Docter on December 26, 1974, which were slaughtered on December 28, 1974. Two checks were drawn for $11,785.76 and $3,050.31 on the Wachovia Bank and mailed to Docter on December 28. A third check, on the same bank, for $405.33 was drawn and mailed on December 31. These three checks were deposited at the Britton Branch Bank on January 6, 1975, and, ultimately, returned for insufficient funds about January 16.

Count XII involves the purchase by Ousley on December 30, 1974, of 4 heifers from Docter which were slaughtered on December 31, and a check in the amount of $1,292.32 was drawn on the Wachovia Bank. It was presented for payment and ultimately returned for insufficient funds about January 17. Count XIII involves Ousley's purchase on December 28, 1974, of 33 heifers for which a $12,230.17 check was issued by ABP on December 31, 1974. Presentation Counts I through IV of the information charge West with grand larceny by fraud in violation of SDCL 22-37-1 and 22-37-2. Counts V through VIII allege that at the same time, West violated SDCL 22-41-4 by obtaining property, i. e., livestock, by false pretenses. The testimony at the preliminary hearing indicated that on January 2, 1975, Myron Ousley contacted Jack Edmundson, one of the two main cattle buyers for ABP at Omaha, and was advised to make purchases of cattle for ABP. Ousley then contacted Docter's feedlot manager and arranged for the purchase of three loads of cattle consisting of 39 steers, 29 heifers and 184 steers. The shipment of 39 steers went to the Council Bluffs plant of ABP where they were slaughtered on January 3. Counts I and V of the information are based upon this shipment. The other two shipments went to the Oakland, Iowa plant where they were slaughtered on January 3. Counts II and VI are based upon the shipment of 29 heifers and counts III and VII upon the shipment of 184 steers. On January 4, 1975, Ousley similarly purchased 40 steers which were slaughtered at Council Bluffs, Iowa, on January 6, 1975. Counts IV and VIII are based upon this shipment. The value of the shipments was estimated at $12,750, $9,021, $68,874 and $15,375, respectively. Payment for these cattle was never received by Docter.

for payment was refused and the check was returned for insufficient funds by the Wachovia Bank on January 20, 1975. Counts XIV and XV involve two sales by Docter to ABP of 48 animals each for which checks were issued on January 2, 1975, drawn on the Wachovia Bank, one for $17,013.16 (count XIV), and the other for $15,614.09 (count XV). These checks were returned on January 17, 1975, by the Wachovia Bank for insufficient funds.

Turning to the federal indictment, count XVI thereof alleged that on or about January 3, 1975, West and ABP, for the purposes of carrying out the scheme to defraud the livestock producers, transmitted a telephone communication between ABP in Omaha, Nebraska, and Myron Ousley in Yankton, South Dakota. This count was based upon the "buy order" from Jack Edmundson to Myron Ousley which led to the purchases alleged in counts I through VIII of the state's information.

Count XVII of the federal indictment alleges that West and ABP "did transport and cause to be transported in interstate commerce from Amherst, South Dakota * * * to Council Bluffs, Iowa * * * and passed through the State of Nebraska on Highway 73 * * * livestock, of the value of $5,000.00 or more, knowing the same to have been stolen, converted and taken by fraud * * *." Count XVII of the federal indictment refers to the same shipment of 39 steers referred to in the state's information in counts I and V.

Count XVIII of the federal indictment alleges that West and ABP "did transport and cause to be transported in interstate commerce from Amherst, South Dakota * * * to Oakland, Iowa * * * and passed through the State of Nebraska on Highway 73 * * * livestock, of the value of $5,000.00 or more, knowing the same to have been stolen, converted and taken by fraud * * *." This particular transaction refers either to the 29 heifers referred to in the state's information (counts II and VI) or the 184 steers alleged in the state's information (counts III and VII).

Count XIX of the federal indictment alleges that ABP and West "did transport and cause to be transported in interstate commerce from Dalton Docter, Amherst, South Dakota * * * to Oakland, Iowa * * * and passed through the State of Nebraska on Highway 73 * * * livestock, of the value of $5,000.00 or more, knowing the same to have been stolen, converted and taken by fraud * * *." Again, this refers to the transactions alleged in counts II...