U.S. v. Burreson

• Decision Date: 01 April 1981
• Docket Number: 78-1912 and 78-1774,Nos. 78-1782,s. 78-1782
• Citation: 643 F.2d 1344
• Parties: Fed. Sec. L. Rep. P 97,982, 7 Fed. R. Evid. Serv. 1357 UNITED STATES of America, Plaintiff-Appellee, v. Rodney H. BURRESON, Ronald L. Laraneta, Thomas L. Channell, Defendants- Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1344

643 F.2d 1344

Fed. Sec. L. Rep. P 97,982, 7 Fed. R. Evid. Serv. 1357

UNITED STATES of America, Plaintiff-Appellee, v. Rodney H. BURRESON, Ronald L. Laraneta, Thomas L. Channell,

Defendants- Appellants.

Nos. 78-1782, 78-1912 and 78-1774.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Sept. 16, 1980.

Decided Feb. 9, 1981.

As Modified on Denial of Rehearing April 1, 1981.

Russell J. Frackman, Los Angeles, Cal., argued for Burreson.

Joel Levine, Los Angeles, for Laraneta.

Richard L. Rosenfield, Los Angeles, for Channell.

Dean Allison, Asst. U. S. Atty., Los Angeles, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before TRASK and SKOPIL, Circuit Judges, and SOLOMON, ^* District Judge.

SOLOMON, District Judge.

Rodney Burreson, Ronald Laraneta, and Thomas Channell were indicted for various violations of the Investment Company and Investment Advisers Acts of 1940, securities fraud, and mail fraud, 15 U.S.C. §§ 80a-1 et seq. and 80b-1 et seq., 77q, 1341; and for conspiracy, 18 U.S.C. § 371. The Investment Acts make it unlawful for the managers of mutual funds to convert those funds; to engage in self-dealing in financial transactions; or to engage in fraudulent, deceptive, or manipulative practices. 15 U.S.C. §§ 80a-36, 80a-17, 80b-6. All appellants were charged and found guilty on the conspiracy count. Burreson was charged in six substantive counts and was found guilty on three of them. Channell was charged in three substantive counts and was found guilty on all of them. Laraneta was charged in fifteen substantive counts and was also found guilty on all of them. Burreson and Channell were given two year concurrent sentences. Laraneta was given a three year concurrent sentence. Each appellant was fined. Appellants do not contest the sufficiency of the evidence convicting them, but raise many other grounds for their appeals.

We affirm.

FACTS

Appellant Channell was the President and Chief Executive Officer of California Banker's Trust Company. Appellants Burreson and Laraneta were clients of the Trust Company.

Burreson was the President of Burreson and Co. and Burreson Petro-Gas Co. Both needed financing.

Laraneta was the Chairman of the Board of Charter, an investment adviser,; two other investment adviser firms and three mutual funds. Laraneta wanted financing to acquire other investment firms.

The evidence at trial showed three fraudulent transactions. In the first transaction, which took place in July of 1973, Channell arranged for Laraneta's mutual funds to The second and third transactions also involved investments by Laraneta's companies. In October of 1973, one of Laraneta's mutual funds invested in Oh Boy! Industries, which returned some of that money to Laraneta in the form of a loan. In July of 1974, another Laraneta fund invested in Burreson Petro-Gas Co., and Burreson lent some of the money to Laraneta.

invest in Burreson and Co. Burreson used part of that loan to purchase a Certificate of Deposit which provided security for a bank loan to Charter.

CONTENTIONS

Appellants contend that they were improperly joined in the same indictment, and that their motions to sever should have been granted.

Appellants also contend that the Government included three separate conspiracies in one conspiracy count, and that they were therefore prejudiced by evidence concerning transactions in which they were not involved. They assert that the proof at trial established multiple conspiracies, and that the jury should have been given a multiple conspiracy instruction.

There is no merit in these contentions. The evidence at trial showed three interconnected fraudulent transactions. The transactions involved the same group of people, the same group of mutual funds, the same method, and a common participant (Laraneta).

Joinder

Rule 8(b) of the Federal Rules of Criminal Procedure allows joinder of defendants "if they are alleged to have participated ... in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count."

In United States v. Roselli, 432 F.2d 879 (9th Cir. 1970), cert. denied, 401 U.S. 924, 91 S.Ct. 883, 27 L.Ed.2d 828 (1971), we held that as long as all defendants participated in the same series of transactions, defendants may be joined even though not all defendants participated in every act. See also United States v. Ford, 632 F.2d 1354, 1370 (9th Cir. 1980).

In United States v. Patterson, 455 F.2d 264 (9th Cir. 1972), we held that when the transactions are basically the same, and when one person serves as a common link between the transactions, joinder under Rule 8(b) is proper.

As in Patterson, the appellants here were involved in an "intricate and highly sophisticated" scheme to divert mutual funds. In each transaction, part of the proceeds of the investment was returned to Charter, in the form of a loan. In each transaction, an intermediary was used, and in each there was fraudulent documentation, to cover up the return of at least part of the money to Charter.

We hold that joinder was appropriate.

Severance

Channell and Burreson assert they were prejudiced by testimony on transactions in which they were not involved, and that their motions to sever under Rule 14 of the Federal Rules of Criminal Procedure were improperly denied.

There is no indication here that appellants were prejudiced by being tried together. Each was represented by independent counsel, and the jury was instructed to consider the evidence separately for each defendant. United States v. Camacho, 528 F.2d 464 (9th Cir.) cert. denied, 425 U.S. 995, 96 S.Ct. 2208, 48 L.Ed.2d 819 (1976). In fact, on several charges, the jury found one or more defendants guilty, and another defendant not guilty, on the same charge. See United States v. Campanale, 518 F.2d 352, 359 (9th Cir. 1975), cert. denied, 423 U.S. 1050, 96 S.Ct. 777, 46 L.Ed.2d 638 (1976).

There was no abuse of discretion here. The appellants' motions to sever were properly denied.

Conspiracy

The evidence showed that Laraneta was a direct participant in each transaction and the loans were made to and by his mutual funds.

Channell was also involved in each of these transactions. In the first, he arranged for Laraneta to invest in Burreson's company. In the second, as custodian for the mutual funds, he handled the paperwork for the investment. The loan to Laraneta was used to repay the loan Channell had arranged for Charter in the first transaction. In the third, Channell arranged for the return of Charter stock to Laraneta, which was a precondition to Laraneta's investment in Petro-Gas. In addition, Channell had an overall interest in the transactions, because both Burreson and Laraneta were his clients.

Burreson's companies were directly involved in the first and third transactions. Burreson may not have been directly involved in the second transaction, but Laraneta's concern for his earlier investment in Burreson and Co. motivated this transaction.

In any event, it is not necessary for each defendant to participate in all of the overt acts in a single conspiracy. A single conspiracy may exist even though each defendant plays a different role in it. United States v. Camacho, supra; United States v. Jones, 425 F.2d 1048, 1051 (9th Cir. 1970), cert. denied 402 U.S. 950, 91 S.Ct. 44, 27 L.Ed.2d 51 (1971). Here, each appellant participated significantly in the overall conspiracy. There was substantial evidence to support the government's theory of a single conspiracy. United States v. Perry, 550 F.2d 524 (9th Cir.), cert. denied, 431 U.S. 918, 97 S.Ct. 2182, 53 L.Ed.2d 228 (1977). There was no variance.

All appellants contend they were prejudiced because the jury was not given an instruction on separate conspiracies and the jury was therefore precluded from finding that the proof established separate conspiracies. They argue that such an instruction is required by Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946).

In Kotteakos, a single conspiracy was charged where thirty-two defendants were charged with conspiracy to violate the National Housing Act. Each defendant individually participated in a fraudulent loan scheme with Brown, the only defendant who participated in all of the fraudulent transactions. No connection between the defendants was established other than that each obtained his fraudulent loan through Brown. The government conceded that the proof established several conspiracies, and the Supreme Court reversed the appellate court's determination that the failure to give a multiple conspiracy instruction in that situation was not prejudicial.

Unlike defendants in Kotteakos, appellants here were connected to each other through their financial transactions, and the transactions themselves were interrelated. Under these facts it was not error for the trial judge to refuse to give a multiple conspiracy instruction. The proof clearly established a single conspiracy. United States v. King, 472 F.2d 1 (9th Cir.), cert. denied, 414 U.S. 864, 94 S.Ct. 37, 38 L.Ed.2d 84 (1973).

In our view, the instructions were adequate when considered as a whole. Even if it might have been desirable for the court to give an instruction on multiple conspiracies, we do not believe it caused any harm, and does not require reversal. United States v. Perry, supra, at 533; United States v. Lutz, 621 F.2d 940, 942-943 (9th Cir. 1980).

Evidentiary Rulings

Prudence of Investments. Appellants contend that the testimony on the prudence of Laraneta's investments was irrelevant and that they were prejudiced by this testimony. We disagree. The indictment itself put the worth of the investments in issue, and the evidence tended to establish motive for the appellants' participation in the transactions. United...