U.S. v. Conner
| Citation | 752 F.2d 566 |
| Decision Date | 04 February 1985 |
| Docket Number | Nos. 84-3008,84-3018,s. 84-3008 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. James L. CONNER, E. Wyllys Taylor, W. Burns Hayter, B. Homer Darby, Sr., Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. E. Wyllys TAYLOR, et al., Defendants, James L. Conner, Defendant-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (11th Circuit) |
Gibson & Connor, Kenneth L. Connor, Lake Wales, Fla., for Taylor.
Robert E. Puterbaugh, Lakeland, Fla., for Hayter.
T.W. Weeks, III, Weeks, Ruster & Mislovic, Peter K. Mislovic, Lakeland, Fla., for Darby.
Judy S. Hoyer, J. Kirk Brandfass, Asst. U.S. Attys., Tampa, Fla., for plaintiff-appellee.
Appeals from the United States District Court for the Middle District of Florida.
Before GODBOLD, Chief Judge, CLARK, Circuit Judge, and THOMAS *, District Judge.
These consolidated cases involve a multi-count indictment charging six defendants with racketeering in violation of Title 18, Sec. 1962(c) and conspiracy to engage in racketeering in violation of Title 18, Sec. 1962(d) and wire fraud in violation of Title 18, Secs. 1341, 1343 and Title 18, Secs. 2 and 2314.
Count One charged defendants, Taylor, Darby and Conner with engaging in a pattern of racketeering activity involving two separate real estate transactions referred to as "Farmland-Duval Transaction" and "Farmland-IMC Transaction." This Count Count Two charged the same three defendants with conspiracy.
charged the three defendants with schemes involving breaches of fiduciary duties resulting from the non-disclosure by defendant-employees of their financial interest in real estate transactions involving their employers. The acts of racketeering charged revolved around mail and wire fraud statutes.
Counts Three through Eight charged defendant, Conner, with having received secret proceeds and kickbacks which were not disclosed to his employer, Farmland. The defendants Taylor and Darby were charged as having been participants in an enterprise which schemed to conceal Conner's receipt of the secret proceeds and kickbacks.
Count Nine charged Taylor, Darby, Conner, Cleghorn, Hayter and Jennings with obtaining money by false pretenses in violation of Title 18, Sec. 1343.
Counts Ten through Twelve charged Hayter with a scheme to defraud IMC by means of false pretenses in violation of Title 18, Sec. 1343.
Counts Thirteen and Fourteen charged Hayter and Darby with defrauding IMC by means of false pretenses in violation of Title 18, Sec. 1343.
Count Fifteen charged Hayter and Cleghorn with transporting money in Interstate Commerce in violation of Title 18, Secs. 2 and 2314.
At the conclusion of the testimony, the Court granted judgments of acquittal as to Taylor, Darby and Conner under Count Two (conspiracy) and as to Hayter and Cleghorn under Count Fifteen and as to Cleghorn and Jennings on all counts. The jury returned a verdict of guilty as to Taylor in Counts One, Three through Nine; Hayter in Counts Nine through Fourteen; Conner, Counts One, and Three through Nine; and Darby in Counts One, Three through Nine, Thirteen and Fourteen. In view of the convictions on Count One (racketeering), the Court then submitted to the jury the issue of whether or not the funds which were the subject of various mailings and wire transactions described in the indictment should be forfeited to the Government, 18 U.S.C. Sec. 1963. The jury by its verdict determined that the funds described in the indictment should be forfeited and judgments in the following amounts were rendered separately against the three defendants found guilty under Count One, namely, Taylor, $1,403,288.72; Darby, $1,364,974.86; and Conner, $1,007,823.88.
The defendant, E. Wyllys Taylor, at all times pertinent to this case, was Chairman of the Board of the American Bank of Lakeland, Florida. (He will hereinafter be referred to as Taylor or "the banker").
The defendant, B. Homer Darby, Sr., at all times pertinent to this case was a retired employee of Mississippi Chemical Company. He was also President of the Hub Chemical Company, the business owned entirely by members of his family.
The defendant, James L. Conner, at all pertinent times, was Vice-President in charge of fertilizer manufacturing of Farmland Industries, Inc. (He will hereinafter be referred to as Conner or Vice-President Farmland).
The defendant, W. Burns Hayter, at all pertinent times, was Vice-President of International Minerals and Chemical Corporation (IMC) and was Vice-President and General Manager of International Minerals and Chemical Development Corporation (IMCD), a wholly owned subsidiary of IMC. (He will hereinafter be referred to as Hayter.)
Farmland Industries, Inc., is a cooperative corporation, the members of which are local farmer's cooperatives, principly in the mid-west. The members of the local cooperatives are individual farmers. In broad terms, the overall purpose of Farmland is to improve the economic well being of its farmer members. Its membership includes approximately 2200 local cooperatives comprised of approximately one-half million farmers. Farmland management desired In March 1976, Taylor, the banker, requested that Moore handle the transaction in his, Moore's, name so that Taylor's name would not be associated with the deal. On March 26th, Taylor and Darby went to Houston to meet with Douglas Bourne, the Vice-President of Duval. In September of 1976, Taylor instructed Moore to attend a meeting at Duval Headquarters in Houston. Conner, Vice-President of Farmland, accompanied the Farmland's attorney and represented Farmland at the meeting. On December 20, 1976, simultaneous closings between Duval and S. Thomas Moore Partnership and between S. Thomas Moore and Farmland were recorded. S. Thomas Moore Partnership was composed of S. Thomas Moore, E. Wyllys Taylor and B. Homer Darby, Sr. Essentially Duval sold its entire interest in approximately 6,700 acres of land along with its rights under the so-called "Coca Cola Option" for a total of $36,000,000.00. Duval took back a mortgage at 6 1/2% interest. The Moore group then deeded the mineral rights only of the property it had acquired from Duval to Farmland for the same price at 8 1/2% interest. The proceeds of the sale which went to the S. Thomas Moore Partnership was sent by wire from Missouri to Texas to Florida, then disbursed according to the partnership agreement. Moore received approximately 5%; two thirds of the remainder going to Taylor and approximately one-third going to Darby. Taylor in turn distributed the monies which he received in accordance with the provision of E. Wyllys Taylor partnership agreement, splitting the funds between Colonial Industries, the Taylor Family Partnership and Timberline Industries, the Conner Family partnership.
that the company become "basic" or "vertically integrated" in the field of fertilizer manufacture. This means the power to control every phase of the product's development from its source of supply to marketing the finished product. Toward this end, Farmland got into phosphate operation in the early 1960's. Prior to 1976, attempts to obtain phosphate reserved had proved unsuccessful. In 1975 the Duval Company decided to sell its phosphate holdings in Hardee County, Florida. There seems to be some difference in the interpretation of the testimony as to whether or not Conner, Vice-President of Farmland, learned of this decision through one of Farmland's employees, Murphy, or whether he was advised of it by the defendant, Darby. Suffice it to say, the sale was ultimately consummated through the middleman known as Hardee Properties. Murphy, in substance testified as follows. In January 1976, Farmland, through employee Murphy, learned that the Duval Property was for sale. Murphy advised Conner, Vice-President of Farmland, of the availability of this land on January 27, 1976, at a meeting in Conner's office in Kansas City. Murphy suggested that he, Murphy, on behalf of Farmland, contact Duval directly. Conner, however, said that he, Conner, would make the contact. Conner later told Murphy that he had contacted Duval and was advised that the property was not for sale. However, in May of 1976, Conner advised Murphy that Farmland had entered into an agreement with Hardee Properties to buy the Duval Property. Conner stated that he, Conner, did not know the identity of Hardee Properties, other than S. Thomas Moore. Murphy was surprised that an unknown entity called Hardee Properties was involved in the middle of what was essentially a land transaction between two large corporations, namely, Farmland and Duval. Murphy, over Conner's objections, made sufficient inquiries to learn that Wyllys Taylor, the banker, was involved in Hardee Properties. Murphy knew of the close personal relationship between Taylor and Conner and was concerned that Taylor's involvement might prove embarrassing to Conner. However, Conner showed no reaction to this information. Murphy did not advise anyone else in Farmland of Taylor's involvement because he considered Conner the key man at Farmland and the one on whom Farmland's Board would depend to get the best possible deal.
Farmland had a written conflict of interest policy, requiring disclosure by all top level employees of any such conflict. Conner
consistently failed to disclose his receipt of these funds to Farmland. It was brought out in the trial that the defendants, Taylor and Darby had each received approximately $1,000,000.00 from this transaction and Conner more than $700,000.00. According to the terms of the mortgages which ran through 1984, the total amount of monies which they expected to receive was in excess of $6,000,000.00.
The Carlton interest wished to sell property owned by it known as the Limestone Land Property....
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