U.S. v. Beasley

• Decision Date: 08 April 1977
• Docket Number: 75-4147,75-1929,Nos. 75-2223,s. 75-2223
• Citation: 550 F.2d 261
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Joseph D. BEASLEY, M.D., Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Oscar E. KRAMER, Jr., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 261

550 F.2d 261

UNITED STATES of America, Plaintiff-Appellee, v. Joseph D. BEASLEY, M.D., Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Oscar E. KRAMER, Jr., Defendant-Appellant.

Nos. 75-2223, 75-4147, 75-1929.

United States Court of Appeals Fifth Circuit.

April 8, 1977.

Rehearing and Rehearing En Banc Denied May 9, 10, 1977. See

553 F.2d 100, 101.

Arthur A. Lemann, III, William J. O'Hara, III, New Orleans, La., for defendant-appellant in Nos. 75-2223 and 75-4147.

Gerald J. Gallinghouse, U.S. Atty., Don M. Richard, Asst. U.S. Atty., New Orleans, La., for plaintiff-appellee in Nos. 75-2223, 75-4147 and 75-1929.

James D. Carriere, Asst. U.S. Atty., New Orleans, La., for plaintiff-appellee in Nos. 75-2223 and 75-1929.

John Volz, Federal Public Defender (Court-Appointed), Richard T. Simmons, New Orleans, La., for defendant-appellant in No. 75-1929.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before GOLDBERG, SIMPSON and FAY, Circuit Judges.

FAY, Circuit Judge:

These appeals arise from the convictions and lower court's denial of post-trial motions of two appellants who were tried by juries and found guilty of violating the general conspiracy statute, 18 U.S.C. § 371 and § 2, and of filing or causing to be filed false claims, as proscribed by 18 U.S.C. § 287 and § 2. ¹ Finding no merit in any of the many assignments of error, we affirm.

More specifically, Count I charged Dr. Joseph Beasley, Oscar Kramer, and other named persons with conspiracy to defraud the United States through the United States Department of Health, Education and Welfare (HEW), of its right to have its program under Title IV-A of the Social Security Act administered fairly, honestly and free from corruption, deceit, trickery, and dishonesty. The means by which the Counts II and III charged Beasley, Kramer and others with substantive violations of 18 U.S.C. § 287 and § 2. Count II alleged that the defendants made and presented claims of approximately $52,800 to the United States through the State of Louisiana knowing the claims to be false, fictitious, and fraudulent in that they did not form any part of the purchase price of mobile modular clinics and constituted no legitimate authorized expenditure under the contract between the Foundation and the State of Louisiana.

defendants accomplished the conspiracy were: (1) by presenting claims for approximately $659,580 to the State of Louisiana allegedly representing construction costs for 15 mobile modular clinics which were never constructed and the money diverted to other purposes, knowing that the State of Louisiana would be reimbursed for a substantial portion of the money by the United States; (2) by adding to the cost of 27 mobile modular clinics approximately $4,400 each, knowing that the added cost, totaling approximately $118,800 did not form any part of the purchase price of the clinics and constituted no legitimate authorized expenditure under the existing contract between the Foundation and the State of Louisiana, and then presenting claims for the added cost to the State of Louisiana knowing that the State would be reimbursed by the United States for a substantial portion of the money claimed; (3) by falsifying, concealing, and covering up by trick, scheme, and device material facts concerning the mobile modular clinic transactions from the federal auditors.

Count III alleged another violation of 18 U.S.C. § 287 and § 2 involving claims of approximately $66,000. The false, fictitious, and fraudulent nature of these claims was the same as alleged in Count II. ²

BACKGROUND

Dr. Beasley and Mr. Kramer went to trial on January 10, 1975. After completion of the government's case, Kramer was called as a witness by and testified on behalf of Beasley. A mistrial was then declared as to Kramer. The trial of Beasley continued, but it resulted in a mistrial when the jury was unable to return a verdict.

The government brought Kramer to trial for the second time and on March 11, 1975, the jury returned a verdict of guilty as to all three counts. The defendant was subsequently sentenced to serve two years on each count to run concurrently. Kramer appeals this conviction.

The retrial of Dr. Beasley began on March 12, the day following Kramer's verdict, and on March 17, Beasley was found guilty and later received the same sentence. Subsequently, Beasley filed an alternative motion to dismiss the indictment or for new trial, and from the district court's denial of this motion, Beasley appeals.

It should be noted that this Court entertains no doubt as to the many good things accomplished by the Family Health Foundation and the appellants. Their work for the individual, the scientific and professional communities, and society as a whole is admirable and commendable. Nonetheless, their greed provoked criminal actions which cannot be ignored or excused.

Appellants were involved with a social-economic welfare program funded by federal-state cooperation. Pursuant to Title IV-A of the Social Security Act (42 U.S.C. § 601 et seq.), states that provide family planning services to families receiving benefits through the Aid to Dependent Children program may be reimbursed from federal funds for 75% of the cost until January 1, 1973, and for 90% of the cost after that date. Louisiana, with the approval of HEW, contracted with the non-profit corporation, Family Health Foundation, to provide these services for its citizens. The Foundation would incur an expense and bill the state, the state would pay the Foundation During the time covered in the indictment, Dr. Beasley was the chief executive officer of the Foundation and Kramer, an attorney, was director of the Louisiana Family Planning Program, comptroller of the Foundation, and later a paid consultant of the Foundation. The executive assistant to appellant Beasley during the period of time covered by the indictment was Eugene Wallace, Jr., also an attorney and originally a co-defendant. ⁴

and the state would then be reimbursed by the federal government. ³

Pursuant to its contract, the Foundation presented to the state claims for thirty-seven mobile modular clinics. The indictment alleged and the verdicts of the juries indicate they found that these claims were, in effect, submitted to an agency of the federal government, namely HEW, and that they were false or fraudulent in that (a) $4,400, which formed neither part of the purchase price nor any other legitimate expense, was "added-on" to the construction price of twenty-seven of the thirty-seven clinics and (b) fifteen of the twenty-seven clinics were never constructed. The government's theory is that appellants' procedure of inflating claims was part of a scheme to channel $50,000 to one Sherman Copelin ⁵ through a New York consulting firm, Scholarship, Education and Defense Fund for Racial Equality (SEDFRE). ⁶ The government also proved that the conspirators concealed the above transactions by later submitting certain false reports in response to the federal auditor's questions concerning the transactions. ⁷

ASSIGNMENTS OF ERROR

The first two assignments of error in Beasley's appeal concern the third appearance of Ronnie Moore before the Grand Jury in December, 1974, subsequent to appearances in November, 1973, and on March 19, 1974, the date of the indictment. Beasley contends that the primary purpose of the Grand Jury proceedings in December of 1974 was to secure the trial testimony of Moore. Beasley argues that the government's employing the Grand Jury for investigative purposes against the defendants ten months after indictment and one month prior to trial was a misuse of the Grand Jury and deprived him of his rights to due process and a fair trial. Beasley further contends that Moore's recantation at the December Grand Jury proceeding was not proper under the provisions of Title 18, U.S.C. § 1623(d), and that his appearance and subsequent trial testimony were the result of a "deal" that should have been disclosed to the court, jury and defense counsel.

Subsection (d) of § 1623, the recantation statute, reads:

Where, in the same continuous court or grand jury proceeding in which a declaration is made, the person making the declaration admits such declaration to be false, such admission shall bar prosecution under this section if, at the time the admission is made, the declaration has not substantially affected the proceeding, or it has not become manifest that such falsity has been or will be exposed.

We find that Moore's appearance before the Grand Jury in December was proper under this statute. When the government suspected that Moore had not told the truth during his first two appearances before the Grand Jury, they informed him that they were going to ask the Grand Jury to consider a false statement indictment against him, unless he appeared and recanted his prior false testimony. Moore had every right under 18 U.S.C. § 1623(d) to appear and recant in order to "save his own neck." There is nothing improper about the government continuing its investigation after an indictment is filed, with obvious limitations, of course. For example, the government cannot contact the defendant after an indictment is filed against him. Similarly, prosecutorial agents may not use the Grand Jury for the primary purpose of strengthening its case on a pending indictment or as a substitute for discovery, although this may be an incidental benefit. See Beverly v. United States, 468 F.2d 732 (5th Cir. 1972). However, it is not improper and indeed totally consistent with the duty of assistant United States attorneys to advise a witness that there exists a serious doubt or question about that witness' testimony.

Appellant suggests that Moore's recantation was not legitimate under § 1623(d) since the government was aware of the falsity of Moore's original testimony before he offered to recant. The statute presents two conditions...