U.S. v. Fagan
| Decision Date | 30 June 1987 |
| Docket Number | No. 86-2284,86-2284 |
| Citation | 821 F.2d 1002 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Ralph G. FAGAN, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Richard V. Burnes, Alexandria, La., for defendant-appellant.
James R. Gough, Asst. U.S. Atty., Houston, Tex., Henry K. Oncken, U.S. Atty., Houston, Tex., for plaintiff-appellee.
Appeal from the United States District Court for the Southern District of Texas.
Before RANDALL, GARWOOD, and DAVIS, Circuit Judges.
Defendant-appellant Ralph Fagan was convicted of aiding and abetting on nine counts of mail fraud, 18 U.S.C. Sec. 1341, one count of witness intimidation, 18 U.S.C. Sec. 1512(a), and one count of transmitting a threat in interstate commerce, 18 U.S.C. Sec. 875(b). The district court imposed concurrent two-year sentences on each count. We affirm.
Ralph Fagan owned two Louisiana corporations--Toddell Enterprises, Inc. and Fagan Boat Service, Inc.--engaged in leasing work boats (used to transport heavy equipment to offshore drilling platforms) and crew boats (smaller boats used for ferrying crews and supplies) to offshore drilling companies. Sometime late in 1980 or early in 1981, Fagan was introduced to Donald L. Riley, who at that time was drilling superintendent of Texoma Production Company, a wholly-owned subsidiary of Mid-Continent Petroleum. As drilling superintendent Riley made the initial choice of the companies from which to lease boats for a given drilling project. The drilling superintendent sent his selection for approval to the manager of drilling; from there the recommendation went to Texoma's vice president for drilling and production, and finally the recommendation was sent to Texoma's president.
Apparently, Riley leased some boats from Fagan's companies shortly after their first meeting. Soon thereafter, Riley was promoted to manager of drilling. He hired Jeffrey Reid Hughes to fill his former job as drilling superintendent.
Sometime in the first half of 1981, Fagan and Riley--who was by then the manager of drilling--agreed to a kickback scheme. Fagan would pay Riley $100 a day for each boat that Texoma leased from Fagan's companies. Beginning in August 1981 and continuing until May 1983, Fagan or his companies paid Riley about $165,000 in twelve checks made payable to C & D Consultants, Inc., a corporation created by Riley at least partially to hide the kickbacks from Texoma. All the checks were mailed from Larose, Louisiana, a town not too far from New Orleans, in the Eastern District of Louisiana, to Spring, Texas, a town near Houston, in the Southern District of Texas.
When the scheme had been in place just a short time, Riley told Hughes about it and urged him to set up a dummy company so he could receive part of the kickbacks Fagan was paying to Riley. Hughes agreed, and Riley split his kickbacks with Hughes on four occasions, but stopped doing so without explanation, even though Riley continued receiving kickbacks from Fagan.
Each of the twelve checks was the basis of a separate count charging Fagan, Hughes, and Riley with mail fraud. At trial the government dropped three of the counts (counts 5, 7, and 9) because on three occasions two checks were mailed together. Thus there were only nine mailings. See United States v. Blankenship, 746 F.2d 233, 236 (5th Cir.1984) (). In exchange for Riley's testimony and cooperation at trial and his plea of guilty to four counts, the government dropped the remaining counts against him and also promised not to seek charges against Riley arising from other illegal activities in which he was involved, including at least one other kickback arrangement. Fagan was convicted on all nine mail fraud counts. The jury acquitted Hughes.
Sometime after the last kickback was sent, Texoma fired Riley. He had violated company policy by leasing a computer for Texoma from his son's company. At this point, Texoma's parent, Mid-Continent, still did not know about the kickback scheme, but for several months Mid-Continent auditors had been suspicious of the informality of the relationship between Fagan's companies and Texoma. Large sums of money were being paid by Texoma to lease Fagan's boats, yet there was little documentation that Texoma had solicited bids from other companies. Mid-Continent eventually discovered the kickback scheme and caused Texoma to file a civil action against Fagan and others. At all times material, the suit was pending in the United States District Court for the Southern District of Texas, Houston Division. In connection with this civil suit, the final important character in this appeal, Thomas Woolsey, comes on the scene.
Woolsey was a friend of Fagan's, to whom he had been introduced by Riley. At the time, Riley and Woolsey were also friends, but they later had a falling out over Riley's decision to lease a computer for Texoma from his son's company rather than from Woolsey.
In the fall of 1984 Fagan repeatedly expressed concern to Woolsey about what Riley's testimony might be in Texoma's civil suit against Fagan and others. According to Woolsey, Fagan said he could not afford to have Riley testify against him and that a no-show by Riley would be worth $20,000. Woolsey testified that he understood this to be an offer by Fagan to pay him or anyone else to obtain Riley's silence by any means, including murder.
On December 26, 1984, Woolsey, slightly inebriated, went to Riley's home near Houston. Woolsey testified he intended to beat Riley up if he would not agree not to testify about the kickback scheme. Riley was not home, but Woolsey stayed for some time, frightening Riley's wife and daughter with his behavior and threats of violence to Riley. While there Woolsey also spoke to Riley on the telephone, threatening and attempting to bribe Riley not to testify in the suit. Nothing was resolved except that the two agreed to discuss the matter later. After talking to Riley, Woolsey, the same day, called Fagan from the Riley house and later from a pay phone. Woolsey testified that both times he told Fagan that he thought that bribery, as opposed to other means, would suffice to cause Riley not to testify.
Woolsey's December 26 threats frightened Riley, and he sought protection for himself and his family from the FBI. The FBI instructed him to record his subsequent telephone conversations with Woolsey, and Riley complied. On December 28 and again on December 30, Woolsey, then in the Southern District of Texas, called Riley, then in the Western District of Louisiana. The transcripts of Riley's recordings of those conversations were introduced as evidence.
Although in neither of the latter two conversations does Woolsey explicitly threaten to kill Riley, in both conversations the threat of violence is clearly implicit, particularly in light of the events of December 26. The conclusion of the December 30 conversation was that Riley would accept $50,000 not to testify.
Immediately after his December 30 conversation with Riley, Woolsey called Fagan, who told him to have no further contact with Riley because Fagan suspected that Riley was cooperating with the government. Fagan was arrested a few weeks later. He was indicted in December 1985 and tried in February 1986. The jury found him guilty of the nine counts of mail fraud (counts 1, 2, 3, 4, 6, 8, 10, 11, and 12; 18 U.S.C. Secs. 1341, 2). It also found him guilty of inducing and procuring (18 U.S.C. Sec. 2) Woolsey to transmit a threat in interstate commerce (count 14; 18 U.S.C. Sec. 875(b)) and to intimidate a witness (count 13; 18 U.S.C. Sec. 1512(a)), each in respect to Woolsey's December 30 telephone call to Riley. The district court convicted Fagan on all eleven counts and sentenced him thereon to eleven concurrent two-year prison terms and imposed a $50 special assessment on both threat-related counts.
On this appeal, Fagan raises several challenges to his convictions.
Fagan's first contention is that the district court erred in refusing to sever the mail fraud counts from the interstate threat and witness intimidation counts. The relevant rules of procedure governing this issue are Fed.R.Crim.P. 8(a) and 14.
Rule 8(a) allows the joinder of offenses against a single defendant "if the offenses ... are of the same or similar character or are based on the same act or transaction or on two or more acts or transactions connected together or constituting parts of a common scheme or plan." We review de novo the district court's denial of a Rule 8(a) motion. United States v. Davis, 752 F.2d 963, 971 (5th Cir.1985); United States v. Forrest, 623 F.2d 1107, 1114 (5th Cir.); cert. denied, 449 U.S. 924, 101 S.Ct. 327, 66 L.Ed.2d 153 (1980); cf. United States v. Lane, 474 U.S. 438, 106 S.Ct. 725, 732 n. 12, 88 L.Ed.2d 814 (1986) ().
In rejecting Fagan's motion to sever, the district court did not violate Rule 8(a). Joinder was clearly appropriate under the third clause of Rule 8: "two or more acts ... connected together or constituting parts of a common scheme or plan." Fagan argues that the mail fraud counts involve a different scheme than the witness intimidation counts. We disagree. The threat and intimidation were related to the fraudulent scheme. From Fagan's point of view, the scheme could not be considered a success if it or his part in it were to be established on the public record or if he were to be held civilly liable for it. Fagan's participation in intimidating Riley was an integral part of his continuing effort to ensure nondisclosure and retain the benefits of his fraud.
On similar facts we reached the same conclusion in United States v. Davis, 752 F.2d 963 (5th Cir.1985). The defendant was...
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