U.S. v. Caldwell

• Decision Date: 17 August 1976
• Docket Number: No. 75-2149,75-2149
• Parties: UNITED STATES of America, Appellee, v. Theodore J. S. CALDWELL, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 691

544 F.2d 691

UNITED STATES of America, Appellee, v. Theodore J. S. CALDWELL, Appellant.

No. 75-2149.

United States Court of Appeals Fourth Circuit.

Argued Feb. 4, 1976.

Decided Aug. 17, 1976.

Zane Grey Staker, Kermit, W. Va., for appellant.

Frank E. Jolliffe, Asst. U. S. Atty., Charleston, W. Va. (John A. Field, III, U. S. Atty., Charleston, W. Va. and Michael F. Pezzulli, Third Year Law Student, on brief), for appellee.

Before WINTER, RUSSELL, and WIDENER, Circuit Judges.

WINTER, Circuit Judge:

Theodore J. S. Caldwell, Chairman of the Board of Directors of the First Huntington National Bank of Huntington, West Virginia (bank), was convicted on each count of a twelve-count indictment, and he appeals. Together with John H. Kelly, State Treasurer Defendant's attack on the validity of his convictions is limited to the contentions that (a) each count of the indictment is legally insufficient to charge him with an offense against the United States, (b) the evidence adduced against him was legally insufficient to show either the existence of a scheme or artifice to defraud or that the use of the mails constituted an essential step in the execution of the scheme, and (c) the evidence adduced against him was legally insufficient to show a willful misapplication of bank funds with specific intent to injure or defraud the bank. We find merit in none of these contentions and we affirm.

of West Virginia, Joseph F. Rykoskey, Assistant State Treasurer of West Virginia, and Coleman Trainor (as to whom the government subsequently dismissed the indictment), defendant was indicted on four counts of mail fraud in violation of 18 U.S.C. § 1341 (Counts One-Four) and eight counts of misapplication of bank funds in violation of 18 U.S.C. §§ 656 and 2 (Counts Five-Twelve). The theory of the prosecution was that the several codefendants used the mails to perpetrate a scheme to bribe Kelly and Rykoskey (who were alleged to be clothed with authority, under state law, to designate state depositories and to determine the amounts of state funds to be deposited in each) to prefer the bank in the deposit of state funds in non-interest- bearing accounts, and misapplied bank funds in payment of these bribes. ¹

I.

Before discussing defendant's specific contentions, we state the basic proof which the government adduced.

Viewed in the light most favorable to the government, the evidence showed that, pursuant to a practice which began as early as 1961 or 1962, the State Treasurer and the Assistant State Treasurer of West Virginia would attend the West Virginia Bankers Association meetings at the Greenbrier, White Sulphur Springs, West Virginia, a luxury resort hotel, at the invitation of the chairman of the board of the bank and at the bank's expense. Defendant became chairman in 1968, and from then until 1973 he invited Kelly and Rykoskey and their wives to attend the meetings, and he caused their expenses to be paid out of the funds of the bank. No limitation was placed on the duration of the stay nor the expenses that could be incurred.

Under state law, but subject to certain restrictions, Kelly had the authority and duty to deposit all funds of the State of West Virginia in financial institutions of his selection and to decide whether these funds would be deposited in interest-bearing or non-interest-bearing accounts. Rykoskey handled day-to-day deposits.

During the Christmas seasons of 1971, 1972 and 1973, defendant visited Kelly and Rykoskey at their offices and gave each a dozen golf balls and cash in varying amounts from $400 to $500. Defendant also gave Kelly a political contribution of $3,000 in 1972. The making of this contribution is not a subject of prosecution and, indeed, it is not suggested that the making of it was in itself illegal.

Kelly and Rykoskey testified that as a result of the payment of their expenses at the Greenbrier and the other gifts, they favored the bank with large deposits in non-interest-bearing accounts. Kelly specifically stated that he favored the bank in daily decisions as to where to deposit funds and that he kept the deposits at this bank at a high level. Additionally, he would receive and honor defendant's telephone requests, which were usually made in late December of each year, to make additional deposits to better the bank's year-end financial reports.

The records of the bank showed that the Greenbrier expenses of Kelly and Rykoskey for a number of years, including 1970-73, were paid by the bank from its funds; and there was testimony that checks in payment

were mailed to the Greenbrier in the normal course of business. The bank's records showed that West Virginia maintained a general and a welfare account at the bank. The balance in the general account was normally maintained at several million dollars. In December, 1973, total deposits to this account exceeded $11,000,000; a deposit of over $2,600,000 and a deposit of over $3,000,000 were made on December 19 and 28, respectively. The overall balance in the account was reflected in the bank's financial statement as of December 31, 1973.

II.

Defendant's attack on the legal sufficiency of each count of the indictment is divided into two parts an attack on Counts One-Four and an attack on Counts Five-Twelve. Counts One-Four are identical except as to dates and years. Count One is appended as an appendix to this opinion.

Similarly, Counts Five-Eleven are identical except as to dates, years and amounts. Count Five is set forth in the appendix of this opinion. Although defendant includes Count Twelve in his attack on the legal sufficiency of the counts founded upon 18 U.S.C. §§ 656 and 2, it is somewhat different from Counts Five-Eleven, and it, too, is set forth in the appendix.

Defendant raised no question of the legal sufficiency of any count prior to trial; nor did he seek particulars. Only after the jury's verdict of guilty on each count did he move in arrest of judgment, asserting legal insufficiency. The district court denied that motion.

A. Mail Fraud Counts (One-Four).

Defendant argues that Counts One to Four set forth "a grossly divagative and shadowy charge of an illusively asserted 'scheme or artifice,' alleged to have been entered into or begun about January 1, 1966, and ending about January 1, 1975, without mention or reference to date, time, place, act or suggestion of act by defendant in implementation or consummation thereof." The counts are further criticized for failing to allege a connection between the scheme and the mailings. Overall, it is asserted that these counts are so vague that defendant was "required to joust with a shadow in his undertaking to defend" himself against the indictment returned against him.

We disagree. We think that these counts are legally sufficient. Rule 7(c) (1), F.R.Cr.P., requires that an indictment "shall be a plain, concise and definite written statement of the essential facts constituting the offense charged." Under this rule, an indictment is sufficient if it provides the defendant with sufficient facts intelligently to plan his defense. 8 Moore's Federal Practice P 7.04; 1 Wright Federal Practice and Procedure § 125 (1969). In alleging a scheme or artifice to defraud, as well as in alleging the connection between the scheme and the mailings, the indictment here satisfied this requirement. The scheme alleged was (a) to bribe Kelly and Rykoskey to put funds in defendant's bank in non-interest-bearing accounts in violation of their statutory duty to act dispassionately in the performance of their duties, the bribes being, in part, the payment of the costs of certain living and vacation expenses of the codefendants and their wives, (b) to misappropriate bank funds to be paid for the personal use and benefit of the codefendants, and (c) for the codefendants to accept funds in violation of law. The mails were allegedly used to make payment of such expenses and to transmit the misappropriated funds.

Unlike the indictment in United States v. Curtis, 506 F.2d 985 (10 Cir. 1974), on which defendant relies, much more was pleaded than the statutory language of § 1341. To the end of alleging the crime charged, Counts One-Four meticulously and with particularity set forth defendants' positions, the applicable West Virginia statutes, the nature of the scheme to defraud, the actions taken by each defendant to carry out the scheme and the specific use of the mails, including the date and addressee of each mailing, in furtherance of the scheme.

The indictment in the instant case is like the indictments which were upheld in

United States v. Isaacs, 493 F.2d 1124 (7 Cir.), cert. denied, 417 U.S. 976, 94 S.Ct. 3183, 41 L.Ed.2d 1146 (1974), and United States v. Faser, 303 F.Supp. 380 (E.D.La.1969). Its theory falls within the rationale of Sushan v. United States, 117 F.2d 110 (5 Cir.), cert. denied,313 U.S. 574, 61 S.Ct. 1085, 85 L.Ed. 1531 (1941). Moreover, to the extent that defendant may have considered that he was not fairly apprised of the charges against him, he could have sought a bill of particulars under Rule 7(f), F.R.Cr.P. Having failed to do so, he is largely foreclosed from the present attack by the rule recognized in United States v. Chinn, 5 F.R.D. 226 (S.D.W.Va.), aff'd 157 F.2d 1013 (4 Cir. 1946), that an indictment is to be construed more liberally after judgment than before, so that if the indictment contains allegations which clearly express what was meant to be charged although not technically in the language of the statute, any technical deficiency was cured by the conviction and judgment.

B. Misapplication Counts (Five-Twelve)

With respect to these counts, defendant's argument is that they are fatally defective, first, in failing to identify the funds allegedly misapplied. Defendant recognizes that the language of these counts is "said funds," but he asserts that "said" must mean funds identified in that count and not funds identified in any other count, and...