U.S. v. American Grain & Related Industries

• Decision Date: 24 July 1985
• Docket Number: Nos. 83-2587,s. 83-2587
• Citation: 763 F.2d 312
• Parties: 18 Fed. R. Evid. Serv. 730 UNITED STATES of America, Appellee, v. AMERICAN GRAIN & RELATED INDUSTRIES, Appellant. UNITED STATES of America, Appellee, v. R.P. KEVLIN, Appellant. UNITED STATES of America, Appellee, v. Jack M. WYARD, Appellant. UNITED STATES of America, Appellee, v. Tom WILLIAMSON, Appellant. to 83-2590.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 312

763 F.2d 312

18 Fed. R. Evid. Serv. 730

UNITED STATES of America, Appellee, v. AMERICAN GRAIN & RELATED INDUSTRIES, Appellant.

UNITED STATES of America, Appellee, v. R.P. KEVLIN, Appellant.

UNITED STATES of America, Appellee, v. Jack M. WYARD, Appellant.

UNITED STATES of America, Appellee, v. Tom WILLIAMSON, Appellant.

Nos. 83-2587 to 83-2590.

United States Court of Appeals,

Eighth Circuit.

Submitted June 14, 1984.

Decided May 23, 1985.

As Modified on Denial of Rehearing July 24, 1985.

Thomas Mulroy; Mark Pennington, Theodore Duffield and Raymond Rosenberg, Des Moines, Iowa, for appellant.

John Bannon, for appellee.

Before HEANEY and FAGG, Circuit Judges, and COLLINSON ^*, Senior District Judge.

FAGG, Circuit Judge.

American Grain & Related Industries (AGRI) and several of its employees appeal from convictions on a one count indictment for criminal conspiracy to remove, dispose of, and convert grain owned by or pledged to the Commodity Credit Corporation (CCC), an agency of the federal government, in violation of 15 U.S.C. Sec. 714m(d). The potential conspirators involved are limited by dismissal and acquittal of three employees at trial to indicted and convicted defendants AGRI, R.P. Kevlin, Jack Wyard, and Tom Williamson, and unindicted AGRI employees B.J. O'Dowd and Joe Lee Duncan. Among numerous grounds of attack, all defendants claim that the United States failed to present sufficient evidence to sustain their convictions. After a careful review of the record, we hold that the United States failed to present sufficient evidence to support Kevlin's conviction for conspiracy, and consequently we reverse his conviction. We are also compelled to reverse the convictions of AGRI, Wyard, and Williamson and remand their cases to the district court for a new trial because of the jury's exposure to and consideration of certain prejudicial hearsay evidence.

The essence of a conspiracy is an agreement to commit an illegal act. Ianelli v. United States, 420 U.S. 770, 777, 95 S.Ct. 1284, 1289, 43 L.Ed.2d 616 (1975); United States v. Snider, 720 F.2d 985, 988 (8th Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 1613, 80 L.Ed.2d 142 (1984). The agreement need not be formal or express, and it may be no more than a tacit understanding among the participants. See United States v. Mohr, 728 F.2d 1132, 1135 (8th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 148, 83 L.Ed.2d 87 (1984). Circumstantial evidence, especially evidence of concerted activity directed toward achievement of a common goal, is as probative as direct evidence. United States v. Michaels, 726 F.2d 1307, 1311 (8th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 92, 83 L.Ed.2d 38 (1984); United States v. Richmond, 700 F.2d 1183, 1190 (8th Cir.1983).

To prove that an individual is a member of a conspiracy, the United States must prove that the particular individual knowingly contributed his or her efforts in furtherance of the objective of the conspiracy. Michaels, 726 F.2d at 1311; United States v. Burchinal, 657 F.2d 985, 990 (8th Cir.), cert. denied, 454 U.S. 1086, 102 S.Ct. 646, 70 L.Ed.2d 622 (1981). Mere knowledge of an illegal act or association with an individual engaged in illegal conduct is not enough. Richmond, 700 F.2d at 1190. The United States must demonstrate, with respect to each individual defendant, " 'some element of affirmative cooperation or at least an agreement to cooperate' in the object of the conspiracy." Id. (quoting United States v. Brown, 584 F.2d 252, 262 (8th Cir.1978), cert. denied, 440 U.S. 910, 99 S.Ct. 1220, 59 L.Ed.2d 458 (1979)).

The United States has taken the position that this case involves a conspiracy to ship CCC grain stored at Fort Worth for AGRI's use in Houston and to conceal the shortage at Fort Worth by the purchase of replacement grain. In light of our primary role in reviewing the sufficiency of evidence offered to support a criminal conviction, Hamling v. United States, 418 U.S. 87, 124, 94 S.Ct. 2887, 2911, 41 L.Ed.2d 590 (1974), we have studied the testimony and exhibits with great care. In doing so, we view the evidence in the light most favorable to the jury's verdict, accepting all reasonable inferences tending to support that verdict. United States v. Sopczak, 742 F.2d 1119, 1121 (8th Cir.1984).

The record reveals the following facts. AGRI, headquartered in Des Moines, Iowa, is a farmer-owned cooperative primarily engaged in the merchandising and storage of grain. AGRI owns several grain storage facilities, including one in Fort Worth, Texas, and one in Houston, Texas. Each AGRI facility is licensed by the federal government. A federal license requires its holder to keep sufficient grain on hand to meet the obligations of the licensed facility. AGRI does a considerable amount of business storing grain for the CCC.

On the evening of May 4, 1983, a blending error occurred while loading a freighter at AGRI's Houston facility. As a result, the Houston facility no longer had a sufficient quantity of high quality wheat to finish loading the freighter and AGRI faced contract penalties for any delay in loading the wheat. Upon learning of the situation on the morning of May 5, 1983, Jack Wyard, AGRI vice president in charge of wheat and milo purchases and sales, decided to move wheat from AGRI's Fort Worth facility to the Houston loading dock. Wyard ordered Joe Lee Duncan, whose job is to arrange transportation for grain other AGRI employees buy and sell, to ship 87,000 bushels of wheat from Fort Worth to Houston. Duncan protested that AGRI had insufficient wheat at Fort Worth to cover its other obligations and refused to carry out Wyard's order. Wyard insisted that AGRI had plenty of wheat. Still reluctant, Duncan insisted they obtain authorization for the shipment from Duncan's boss, Tom Williamson, AGRI's vice president in charge of transportation.

Duncan informed Williamson that he did not believe AGRI had "enough ownership at Fort Worth to fill [Wyard's] request." Wyard, on the other hand, stated that AGRI had plenty of wheat in Texas, that he had everything covered, and that he would take full responsibility for the decision. Williamson did not make an immediate decision but rather stated that he would discuss the matter with executives across the hall. Among others, B.J. O'Dowd and Kevlin have offices across the hall from Williamson.

Upon finding these executives away from their offices, Williamson told Duncan to load the wheat in railroad cars. At that time, however, Williamson did not give Duncan permission to allow the cars to be removed from AGRI's Fort Worth facility. Wyard prepared a rail shipping request for the 87,000 bushels of wheat. Later in the day, Duncan prepared and Wyard signed a second rail shipping request for 49,500 bushels of wheat to cover wheat in the first request that failed grade inspection. Duncan had the railroad cars loaded in conformity with Williamson's orders. Under authority of the two shipping requests signed by Wyard, the railroad picked up one trainload of wheat on the afternoon of May 5 and a second trainload on the morning of May 6.

Wyard and Williamson claim that the evidence is insufficient to allow a rational jury to conclude that they conspired to convert CCC grain. We have previously held that

[t]o convict a defendant of criminal conspiracy, the government is obligated to prove that "the individual entered an agreement with at least one other person, that the agreement had as its objective a violation of the law, and that one of those in agreement committed an act in furtherance of the objective."

Michaels, 726 F.2d at 1310-11 (quoting United States v. Evans, 697 F.2d 240, 244-45 (8th Cir.), cert. denied, 460 U.S. 1086, 103 S.Ct. 1779, 76 L.Ed.2d 352 (1983)). Wyard contends that he lacked the criminal intent required to prove the charge of conspiracy to convert because he ordered the shipment based on an honestly mistaken interpretation of AGRI's grain storage licenses. Williamson contends that regardless of Wyard's intent, the shipments were accomplished without Williamson's authorization and thus he did not agree to accomplish a common criminal objective with Wyard. In support of his position, Williamson contends that his last participation in the events of May 5 was to order the cars loaded but held in Fort Worth.

We conclude that a rational jury could find that Wyard and Williamson were aware, from their experience in the grain industry and the protests of Duncan on May 5, that the grain at Fort Worth belonged to the CCC. The evidence also supports the jury's rejection of Williamson's claim that he did not authorize the shipments. Duncan testified that he shipped the wheat because he "knew Jack [Wyard] had approval." There is no evidence that Wyard sought anyone's approval but Williamson's. Duncan also testified several times that he would not cooperate in the shipment without Williamson's authorization, and Duncan did cooperate in the shipment. Finally, Duncan testified that he eventually cooperated in the shipment of grain that he knew AGRI did not own because he "was under orders to do it by [his] boss and superior." The jury could rationally conclude that in referring to his boss and superior, Duncan was referring to Williamson. On the basis of all the evidence, a rational jury could legitimately conclude that Wyard and Williamson discussed the shipment, that they knew the grain belonged to CCC and not AGRI, and that together they prevailed over Duncan's reluctance to ship the grain to Houston. These actions suffice to demonstrate the affirmative cooperation necessary to support a conviction for conspiracy. See Richmond, 700 F.2d at 1190.

We do not believe the evidence supports a similar conclusion with respect to Kevlin. Initially, the United States claims that Kevlin and B.J. O'Dowd, the president of AGRI, joined the conspiracy to ship grain on May 5. The independent evidence shows, however, that Kevlin, executive vice...