U.S. v. Bethea, s. 80-7651

• Decision Date: 17 March 1982
• Docket Number: 80-7756 and 80-7841,Nos. 80-7651,s. 80-7651
• Citation: 672 F.2d 407
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Anthony Wentworth BETHEA, Kenneth Jerome Bragg, Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. Kenneth Jerome BRAGG, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Roy Carson FUGATE, Defendant-Appellant. . Unit B *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 407

672 F.2d 407

UNITED STATES of America, Plaintiff-Appellee, v. Anthony Wentworth BETHEA, Kenneth Jerome Bragg,

Defendants-Appellants.

UNITED STATES of America, Plaintiff-Appellee, v. Kenneth Jerome BRAGG, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Roy Carson FUGATE, Defendant-Appellant.

Nos. 80-7651, 80-7756 and 80-7841.

United States Court of Appeals, Fifth Circuit.

Unit B ^*

March 17, 1982.

Faulk & Landreau, Bob Faulk, Phenix City, Ala., Hornsby & Schmitt, A Professional Corp., Ernest C. Hornsby, Tallahassee, Ala., for Bragg.

David B. Byrne, Jr., Montgomery, Ala. (Court-appointed), for Bethea.

D. Broward Segrest, 1st Asst. U. S. Atty., Charles R. Niven, Asst. U. S. Atty., Montgomery, Ala., for plaintiff-appellee.

Appeals from the United States District Court for the Middle District of Alabama.

Before MORGAN, TJOFLAT and ANDERSON, Circuit Judges.

R. LANIER ANDERSON, III, Circuit Judge:

These consolidated appeals arise out of the prosecution of five persons under the Mail Fraud and Racketeering Influenced Corrupt Organization ("RICO") Acts and related forfeiture proceedings. Appellants Kenneth Jerome Bragg ("Bragg"), Anthony Wentworth Bethea ("Bethea"), Roy Carson Fugate ("Fugate") and two others were each charged in a seven-count indictment, including five counts of mail fraud under 18 U.S.C.A. § 1341 (West Supp.1981), one count alleging violation of the substantive racketeering provision of RICO, 18 U.S.C.A. § 1962(c) (West Supp.1981), and one count of conspiracy to violate RICO, under 18 U.S.C.A. § 1962(d) (West Supp.1981). After a trial of almost three weeks, a jury convicted Bragg on all counts, convicted Bethea on both RICO counts and on two counts of mail fraud, and acquitted Fugate and the two other defendants on all counts. The district judge fined Bragg a total of $50,000, sentenced him to six years imprisonment on each of the RICO counts and to five years imprisonment on each of the mail fraud counts, all to run concurrently, and ordered forfeiture of Bragg's interest in Delcher Moving and Storage, Inc. and in the Howe Richardson Truck Scales, located at the Torch 280 Truck Stop. Bethea was sentenced to concurrent three-year terms on each of the four counts under which he was convicted, with all but four months of these sentences suspended in lieu of three years probation. Both Bragg and Bethea appeal from their convictions, raising a myriad of arguments for reversal. Bragg and Fugate appeal separately from the denial of their motions for indemnification-from the assets of the forfeited Delcher Moving and Storage, Inc.-of their legal expenses incurred in connection with this prosecution. We have carefully reviewed the twenty-two volumes of the record in this case and conclude that there is insufficient evidence to support the convictions of Bethea, and therefore they are reversed. Bragg's convictions must fall as well because of insufficient evidence and other reasons set forth below. In view of this disposition of the case, the separate appeals of Bragg and Fugate are dismissed as moot.

I. FACTS

Although the facts are set out in greater detail in our discussion of the sufficiency of the evidence, a few words of introduction are necessary. An indictment was returned by a federal grand jury in the Middle District of Alabama, on February 21, 1980, charging Bragg, Bethea, Fugate and two others on the mail fraud and RICO counts described above. Bragg is the owner and president of Delcher Moving and Storage, Inc. ("Delcher"), a company which was qualified to provide moving and storage services for the Department of Defense at Fort Benning, Georgia. Bethea was the chief of the Household Goods Section of the Transportation Office at Fort Benning. Fugate was the operations manager at Delcher. The two other defendants were a secretary at Delcher and the operator of a truck stop whose truck scales were used by Delcher to weigh its trucks.

The allegations in the mail fraud counts of the indictment charged that the defendants had engaged in a scheme to defraud the government by overcharging in cases where Delcher handled the moving and storage needs of armed service members. The devices allegedly employed in this scheme included charging for storage-in-transit at origin ("SITO") where the service member had not requested it, inflating weights on which charges for moving and storage were based, charging for accessorial services not performed, and charging for packing materials not utilized. Bethea's participation in the alleged scheme was limited to the authorization of SITO.

The use of storage-in-transit is often necessary when the goods of service members are moved to a new duty station. After a service member receives orders to report to a different facility, the member applies at the transportation office at his present duty station for shipment and/or storage of his goods. At that time, the service member meets with a transportation counselor who assigns the member a pack-up date, a pick-up date and a delivery date for his goods. Moving companies generally have a period of several days, known as "transit time," during which they may deliver the service member's goods to his new address. Depending upon the needs of the member, storage-in-transit may be authorized at origin ("SITO") or at destination ("SITD") in order to insure that the goods are picked up and delivered at the requested times. Each service member is entitled to ninety days of storage-in-transit in connection with permanent changes of duty stations.

Generally, SITO is authorized at the request of a member. A Certified Transportation Agent ("CTA") must approve the use of SITO, by determining whether SITO would be in the "best interests of the member and the Government." ¹ As the chief of the Household Goods Section, Bethea was the immediate supervisor of the CTAs. In this official capacity, Bethea was in a position to authorize or facilitate the authorization of the use of SITO in connection with moves of service members. The indictment alleged that Bethea and Bragg, as part of the scheme to defraud, caused SITO to be authorized without the knowledge or request of the service member and therefore contrary to Department of Defense Regulations. The mailings alleged in the mail fraud counts, Counts III-VII, related only to alleged improper authorization of SITO. There is no evidence that the moves to which these mailings pertain were infected with any of the other alleged irregularities listed as devices to defraud in the indictment.

The RICO counts of the indictment, Counts I and II, charged the defendants with conspiracy to participate in the affairs of an enterprise through a pattern of racketeering activity, in violation of 18 U.S.C.A. § 1962(d) (West Supp.1981), and actual participation in the affairs of an enterprise through a pattern of racketeering activity in violation of 18 U.S.C.A. § 1962(c) (West Supp.1981). In sum, the indictment alleged that all defendants had conspired to and had participated, directly or indirectly, in the conduct of the affairs of Delcher Moving and Storage, Inc. through a pattern of mail fraud. Listed as overt acts under Count I were specific incidents of alleged overcharges with respect to moving and storage services which Delcher provided for the government between January 1, 1967 and February 21, 1980, the date of the indictment. In Count II, the overt acts consisted of mailings which related to certain alleged overcharges made by Delcher. The alleged mailings which occurred before February 21, 1975, related to moves in which the full range of alleged devices to defraud the government were present; the five mailings that occurred after February 21, 1975, were the same mailings alleged in the individual counts of mail fraud, Counts III-VII, and related only to incidents involving SITO.

II. SUFFICIENCY OF THE EVIDENCE-MAIL FRAUD

The essential elements of a violation of the mail fraud statute, 18 U.S.C.A. § 1341 (West Supp.1981), ² were recently set forth in United States v. Goss, 650 F.2d 1336 (5th Cir. 1981). There, we stated:

To establish a mail fraud violation, the government must prove the existence of a scheme to defraud that involved use of the mails for the purpose of executing the scheme. The evidence must demonstrate the defendant's specific intent to commit fraud.

Id. at 1341 (citing United States v. Freeman, 619 F.2d 1112, 1117 (5th Cir. 1980), cert. denied, 450 U.S. 910, 101 S.Ct. 1348, 67 L.Ed.2d 334 (1981); United States v. Zicree, 605 F.2d 1381, 1384 (5th Cir. 1979), cert. denied, 445 U.S. 966, 100 S.Ct. 1656, 64 L.Ed.2d 242 (1980); United States v. Kent, 608 F.2d 542, 545 n.3 (5th Cir. 1979), cert. denied, 446 U.S. 936, 100 S.Ct. 2153, 64 L.Ed.2d 788 (1980)). Appellants Bragg and Bethea argue that the evidence adduced at trial was insufficient to establish that the authorization of SITO was part of a scheme to defraud and insufficient to prove that the defendants had the requisite specific intent to defraud. We now turn to a review of the sufficiency of the proof offered by the government.

The standard for appellate review of criminal convictions for sufficiency of the evidence is well established. This court

must view the evidence, direct or circumstantial, in the light most favorable to the government and must accept all reasonable inferences and credibility choices that tend to support the jury's verdict. The standard of review is whether a jury could reasonably find that the evidence is inconsistent with every reasonable hypothesis of innocence or, put another way, whether a reasonably-minded jury must necessarily entertain a reasonable doubt of the defendant's guilt.

United States v. Marx, 635 F.2d 436, 438 (5th Cir. 1981), quoted in United States v. Glasgow, 658 F.2d 1036, 1040 (5th Cir. 1981) (citations omitted). For a conviction to stand, it must be supported by substantial evidence. United States v. Goss, 650 F.2d at 1343 n.3, ...