Suhl v. United States

• Decision Date: 18 March 1968
• Docket Number: No. 20672.,20672.
• Parties: B. L. SUHL et al., Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

390 F.2d 547 (1968)

B. L. SUHL et al., Appellant, v. UNITED STATES of America, Appellee.

No. 20672.

United States Court of Appeals Ninth Circuit.

February 6, 1968.

Rehearing Denied March 18, 1968.

Ernest R. Utley (argued), of Utley & Houck, Los Angeles, Cal., John A. Mac Dowell, Lynwood, Cal., for appellant.

Rothwell B. Mason (argued), Asst. U. S. Atty., Cecil F. Poole, U. S. Atty., Sacramento, Cal., for appellee.

Before BROWNING and DUNIWAY, Circuit Judges, and BYRNE^*, District Judge.

DUNIWAY, Circuit Judge:

B. L. Suhl and Margaret Wierman were each convicted on all counts of a six-count indictment and they appeal. We affirm.

Named as co-defendants were Ronald Vaughn and Richard Gibson. Counts one through four charge violations of 18 U. S.C. § 1341, mail fraud; count six charges a conspiracy to violate the same section; count five charges violation of 18 U.S.C. § 656, misapplication of bank funds. The first four counts all charge a "`check kite' scheme, whereby false credit would be obtained by exchange and passing of worthless checks between two banks." Count one states that the scheme was that checks were drawn on the account of Suhl at a Los Angeles branch of the Bank of America and deposited in the account of Vaughn at the Frontier Bank of Covelo, in Mendocino County, California, when Suhl's account did not contain sufficient funds to cover them, and that checks were drawn on Vaughn's account at Covelo and deposited in Suhl's account at Los Angeles when Vaughn's account did not contain sufficient funds to cover them. It then alleges that these two defendants "utilized the span of time involved in the normal passage of mails between Covelo and Los Angeles * * * to accomplish delay in the posting of checks to the * * * respective accounts." Finally, it charges that Suhl, on November 13, 1963, deposited in his Los Angeles account a check drawn by Vaughn on his Covelo account in the sum of $55,000, and caused the Los Angeles bank to send it by mail to Covelo at a time when Vaughn's Covelo account contained less than $600. Wierman and Vaughn are charged with aiding and abetting Suhl. Count two is identical except that its specific charge is that Wierman, on November 18, 1963, deposited to Vaughn's Covelo account a Suhl check drawn on his Los Angeles account in the sum of $55,000, when Suhl's balance was less than $200. Suhl and Vaughn are charged as aiders and abettors of Wierman.

Counts three and four are similar, but involve Suhl, Wierman and Gibson. The specific act charged in count three is the deposit by Suhl, in Los Angeles, on October 28, 1963, of a Gibson check drawn on the Covelo bank for $50,000, when there was less than $50 in the Gibson account. Wierman and Gibson are named aiders and abettors. The specific act charged in count four is the deposit by Wierman in the Gibson account at Covelo on October 31, 1963 of a Suhl check drawn on his Los Angeles account for $50,000, when there was less than $13,000 in the Suhl account. Gibson and Suhl are named as aiders and abettors.

Count six charges all four defendants with conspiracy, and alleges four overt acts by Wierman: (1) Ordering an employee of the Covelo bank on October 2, 1963, to hold a check for $10,800, purportedly drawn on the account of one Yates; (2) having in her possession, during September-December, 1963, at the Covelo bank, a book of blank checks, signed by Suhl; (3) causing a check signed by Suhl to be filled out, on December 10, 1963, for $132,000 and deposited in Vaughn's account; (4) causing a check signed by Suhl to be filled out, on October 1, 1963, for $17,780, and deposited in Gibson's account.

Count five charges that in the period September-December, 1963, Wierman misapplied funds of the Covelo bank by causing a series of Suhl checks, drawn on his Los Angeles account, to be credited to Vaughn's account, knowing that Suhl's account did not have sufficient funds to cover, and causing withdrawals of the same amounts from Vaughn's account, knowing that his account had insufficient funds. Suhl and Vaughn are named aiders and abettors.

The evidence is voluminous, and, when examined in the light most favorable to the government, is sufficient to sustain the convictions on all counts. We state only so much as is necessary to explain our disposition of the points raised on appeal, which we will consider separately.

By way of background, Wierman and Suhl are mother and son. They owned the Frontier Bank of Covelo. Covelo is a small country town in a remote section of northern California, several hundred miles from Los Angeles, a fact that contributed substantially to the success of the check kite scheme. Wierman was president of the bank. They had other irons in the fire, among them two companies engaged in the money order business, Security Currency Services, Ltd., a California corporation ("Security") and American Security Currency, Ltd., an Arizona corporation ("American"). They owned 80% of the stock of Security and 100% of the stock of American. Vaughn was the husband of Wierman's step-daughter and an employee of Security in Los Angeles. Gibson was a friend of Suhl and frequently acted as pilot of his airplane. Suhl did not have a checking account at the Frontier Bank. Vaughn and Gibson each did.

Suhl claimed a net worth of $800,000. He had plunged rather heavily in the stock market. Among his investments was a large block of stock of a corporation called Royal Properties, and in late 1963 the price of the stock was falling. He was in danger of being wiped out. He undertook to borrow from every possible source, and he was negotiating to sell the Frontier Bank and Security and American. His account at the Bank of America was overdrawn, and this was the beginning of the check kite scheme.

Vaughn, in Los Angeles, and at Suhl's request, wrote several checks on Vaughn's account at the Frontier Bank, payable to Suhl, when that account contained insufficient funds to cover the checks. Suhl immediately deposited the checks in his account at the Bank of America and used the money in his stock market activities. When one of Vaughn's checks arrived at the Frontier Bank, it was brought to the attention of the cashier, Robert Goodwin. A check drawn on Suhl's account at the Bank of America and payable to Vaughn was then prepared at Covelo and deposited in Vaughn's account, and Vaughn's check to Suhl was paid. In at least three cases, the Vaughn check to Suhl was held in what was called the "rejected check register" for one to three days before payment. The Suhl check to Vaughn was then sent to the Bank of America where it was, with the exception of the last check, paid upon receipt. The delay incident to sending the checks through the mails enabled Suhl to enjoy the use of cash in the amount of the various Vaughn checks for several days.¹

The Suhl-Gibson transactions were somewhat different. Between September, 1963, and January, 1964, Gibson, at Suhl's request, signed several checks drawn on his Frontier bank account, some payable in blank and some payable to brokerage houses. The checks were used by Suhl for the purchase of stocks. One $50,000 Gibson check, payable to the Bank of America, was deposited in Suhl's Los Angeles account. The Gibson checks were for large amounts, but the average balance in the Gibson account was not over $100. The reason for using Gibson's Frontier bank account was to extend the time necessary for the checks to clear. When a Gibson check was presented for payment at the Frontier Bank, it was handled in substantially the same manner as the Vaughn checks, although wire transfers from Suhl were also used to cover some Gibson checks.

A third transaction, alleged as one of the overt acts in count six, involved one Yates, who was an acquaintance of Suhl's and had had occasion to use money orders of Suhl's company. Yates had purchased a large block of Royal Properties stock on margin. Suhl suggested to Yates, in Los Angeles, that he clear the margin account and demand delivery of the stock, the purpose being to force short sellers to buy in and thus raise the price of the stock. Yates had insufficient funds to clear the margin account and Suhl suggested that Yates execute a money order for the necessary amount. He then suggested that Yates apply for a loan from the Frontier Bank to cover the money order, using the stock as collateral. Yates executed the money order for the stock and filled out an application for a loan at the Frontier Bank. He also signed a signature card for a checking account at that bank. He then gave to Suhl a check drawn on the Frontier Bank to cover the money order. Suhl promptly deposited Yates' check in his account at the Bank of America. The loan application and the signature card were then mailed to the Frontier Bank, where an account was to be established for Yates after the loan was granted. The loan was not approved because Yates lived out of the bank's "loan area." Suhl then wired funds to Covelo in the amount of the requested loan for deposit to Yates' "account." Yates' check, which had been held in the rejected check register, was then paid. Suhl then secured for Yates a loan at a Hollywood bank and Yates repaid Suhl.

We turn to the points raised on appeal.

1. Was Wierman entitled to a judgment of acquittal?

Wierman argues that her conviction must rest on the testimony of Goodwin, the cashier of the Frontier Bank. She then urges that he was an accomplice, obviously interested in cooperating with the prosecution, that he perjured himself on the stand, and that his testimony is unworthy of belief.

We start with the established rule that "in federal courts a conviction may be based on the uncorroborated testimony of an accomplice * * * even though the accomplice is in a position to gain favors from the government by his testimony * * *, and even though there are inconsistencies in his story, * * * so long as it is not `incredible or unsubstantial on its face.' * * *...