U.S. v. Clark

• Decision Date: 09 February 1977
• Docket Number: 76-1176,Nos. 76-1145,s. 76-1145
• Citation: 546 F.2d 1130
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Lonnie D. CLARK, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellant, v. Lonnie D. CLARK, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1130

546 F.2d 1130

UNITED STATES of America, Plaintiff-Appellee, v. Lonnie D. CLARK, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellant, v. Lonnie D. CLARK, Defendant-Appellee.

Nos. 76-1145, 76-1176.

United States Court of Appeals Fifth Circuit.

Feb. 9, 1977.

Thomas G. Sharpe, Jr., Brownsville, Tex., for Lonnie D. Clark.

Michael P. Carnes, U. S. Atty., Dallas, Tex., Bob D. Slough, Asst. U. S. Atty., Lubbock, Tex., for United States.

Appeals from the United States District Court for the Northern District of Texas.

Before AINSWORTH and CLARK, Circuit Judges, and HUGHES, ^* District Judge.

HUGHES, District Judge:

On April 16, 1975, a 40 count indictment was issued, with each count charging that Defendant Lonnie D. Clark had violated 15 U.S.C. § 714m(a) ¹ and 18 U.S.C. § 2 ² by making or causing to be made false statements for the purpose of obtaining payments under the 1973 Upland Cotton Allotment program, established pursuant to the Agricultural Act of 1970. ³ A jury returned a verdict of guilty on 37 counts ⁴ and not guilty on 3 counts. ⁵ Defendant's Motion in Arrest of Judgment, based on the lack of specificity in the indictment, was granted in part by the trial court, which thereupon entered a Judgment of Acquittal on Counts 2-27 and 29-38. A Judgment of Conviction was entered on Count 40, and Clark was sentenced to 3 years imprisonment and assessed a $10,000 fine. In No. 76-1145 Clark has appealed his conviction on Count 40, and in No. 76-1176 the United States has appealed the Judgment of Acquittal entered on the other 36 counts. The two causes have been consolidated on appeal.

Clark argues that Count 40 was not sufficiently specific and that he relied in good faith upon assurances from the Agricultural Stabilization and Conservation Service (ASCS) that his actions were legal, such reliance constituting a defense to Count 40. The United States argues that the requisite degree of specificity was present in each of the 36 counts on which the trial court entered a Judgment of Acquittal, as well as in Count 40. Also, the United States disputes the good faith reliance defense. Finding ourselves in agreement with the United States on all points, we affirm in No. 76-1145 and reverse in No. 76-1176.

Under the 1973 Upland Cotton Allotment program, the federal government, through the Commodity Credit Corporation (CCC), paid cotton producers an amount equal to the cotton yield per acre of their farmland (based on the land's farming history) times a certain sum per pound times the number of acres of cotton allotment given the land. The 1970 Act's § 101(1) limited the annual payments to no more than $55,000 per "person." Regulations promulgated by the Secretary of Agriculture included the following definition of "person":

"Subject to the provisions of (7 C.F.R. Part 795), the term 'person' shall mean an individual, joint stock company, corporation, association, trust, estate, or other legal entity. In order to be considered a separate person for the purpose of the payment limitation, in addition to the other conditions of (Part 795), the individual or other legal entity must:

(a) Have a separate and distinct interest in the land or the crop involved,

(b) Exercise separate responsibility for such interest, and

(c) Be responsible for the cost of farming related to such interest from a fund or account separate from that of any other individual or entity." 7 C.F.R. § 795.3. ⁶

A person could "divide, sell, transfer, rent, or lease his property" if the parties to the transaction were bound legally by it. However, "(a)ny change in farming operations that would otherwise serve to increase the number of persons for application of the payment limitation (had to) be bona fide and substantive." 7 C.F.R. § 795.13(a).

To establish a context for evaluation of the indictment, we now consider Clark's actions against this statutory backdrop. Through the purchase and consolidation of three tracts of land, combined with a transfer of the cotton allotment to the consolidated farm (Serial No. F-429), Clark acquired a large, high cotton yield farming operation which, without the $55,000 limitation, would have brought in over a million dollars in cotton payments. Presumably thinking the $55,000 limitation too onerous, Clark next undertook a scheme designed to increase the lucrativeness of his farming investment.

From F-429, Clark carved out and leased several tracts of 530 acres each which, under the cotton allotment formula, were entitled to about $55,000 each in payments. Next, at the behest of Clark or someone acting on Clark's behalf, the lessees signed three ASCS forms ⁷ and a form giving Clark their power of attorney.

Pursuant to the lessees' assignments of payments, the CCC deposited the lessees' payments in bank accounts. Using his power of attorney, Clark then transferred these funds into the account for the Clark Trust, such transfers being made as purported lease payments and reimbursements for farming expenses. Clark hired the people to clear, plow, and plant the land, and none of the lessees participated in the farming operations on the leaseholds. ⁸ Eventually, the lessees personally received a small portion, perhaps $3,000, of the CCC payment.

After all this, Clark (or the Clark Trust) had accumulated funds far in excess of the $55,000 per person limitation, with the flow of the funds being from the CCC, briefly through the lessees' assigned accounts, to the Clark Trust. The indictment ensued, alleging that false statements had been made to obtain the CCC payments, and, on appeal, the principal issue is whether the indictment alleged the false statements with the necessary specificity. ⁹

In Hamling v. United States, 418 U.S. 87, 117-18, 94 S.Ct. 2887, 2907, 41 L.Ed.2d 590 (1974), the Supreme Court said: "(A)n indictment is sufficient if it, first, contains the elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and, second, enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense . . . ' (T)he language of the statute may be used in the general description of an offence, but it must be accompanied with such a statement of the facts and circumstances as will inform the accused of the specific offence . . . with which he is charged.' " (Citations omitted). See also Russell v. United States, 369 U.S. 749, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962). More recently, an admonishment has come from this Circuit: "The validity of an indictment is determined from reading the indictment as a whole . . . and . . . must be determined by practical, not technical, considerations." United States v. Markham, 537 F.2d 187, 192 (5th Cir. 1976), cert. denied, 45 U.S.L.W. 3457 (Jan. 11, 1977) (citations omitted).

The indictment, a representative count of which is set out in the margin, ¹⁰ clearly contained the elements of the charged offense. It alleged that: (1) there was a statement; (2) it was false; (3) Clark made it or caused it to be made with knowledge that it was false; and (4) Clark made it or caused it to be made for the purpose of influencing CCC action or for the purpose of obtaining a thing of value under an act applicable to the CCC. These allegations embraced the elements of the offense. See Jacobs v. United States, 359 F.2d 960 (8th Cir. 1966).

The controversy is over whether the indictment sufficiently pointed out what the false statement was which was being alleged. The trial court felt it did not in Counts 2-27 and 29-38. Apparently, the trial court thought that the indictment alleged that a false statement had been made within the four corners of the ASCS forms, a reading encouraged by the indictment's wording which said that a written statement was made on an ASCS form. If the indictment is read this way, the trial court's Judgment of Acquittal was understandable since nowhere does the indictment indicate which statement was false.

However, the United States argues that the indictment's allegations were misconstrued, an argument we adopt. Paraphrasing the representative Count 5, note 10 supra, Clark made a written statement on the Assignment of Payment form, assigning payments said to be due Leslie Aiken as a producer, which payments Aiken was not entitled to receive in the first place. The very submission of the form constituted a written representation by Clark that Aiken had something to assign. This representation, not some word or words on the form, was the "statement" with which the indictment was concerned. Furthermore, its falsity was alleged specifically when the indictment said that Aiken was not entitled to the payments being assigned. In other words, Aiken had nothing to assign, yet indicated he did. (The other counts concerning the two other forms Forms ASCS-516 and ASCS-580 are subject to similar analyses). The indictment's mention of the lessees' non-entitlement to cotton payments put Clark on notice that the crux of the government's case would be the invalidity of the lease arrangements. For practiced counsel such as Clark's to have read the indictment without such insight is too unlikely to seriously consider. The notice clearly afforded Clark and his counsel a fair opportunity to prepare his case to try to show the validity in fact or law of the arrangements by which F-429 was split up. Therefore, Clark had notice of the specific offense he was said to have committed. Additionally, the indictment's specificity was such that Clark was protected from possible double jeopardy problems since no future prosecutions could be brought against Clark based on the forms' submission. See Hamling, supra.

That the indictment could have been more specific is certain. For instance, the indictment could have included allegations as to why the named producer or operator was not entitled to the payments. The indictment could have read that a written statement was made by the submission of an...