U.S. v. Freeman

• Decision Date: 25 June 1980
• Docket Number: No. 79-5044,79-5044
• Citation: 619 F.2d 1112
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Richard Daniel FREEMAN, Robert Temp and Alaine Carter Temp, Defendants- Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1112

619 F.2d 1112

UNITED STATES of America, Plaintiff-Appellee, v. Richard Daniel FREEMAN, Robert Temp and Alaine Carter Temp Defendants- Appellants.

No. 79-5044.

United States Court of Appeals Fifth Circuit.

June 25, 1980.

Steven M. Kipperman, Jeffrey S. Ross, San Francisco, Cal., John Wilson Reed, New Orleans, La., for Temp & Temp & Freeman.

Le Roy Morgan Jahn, Asst. U. S. Atty., San Antonio, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before VANCE, POLITZ and RANDALL, Circuit Judges.

VANCE, Circuit Judge:

Richard Daniel Freeman, Robert Temp, and Alaine Carter Temp appeal their convictions in a jury trial for mail fraud, 18 U.S.C. §§ 1341 and 2, and for interstate transportation of fraudulently taken property, id. §§ 2314 and 2. They raise numerous challenges to the indictment, evidentiary rulings, the jury instructions, other trial events, and the cumulative effect of these alleged errors. We affirm.

I. THE FRAUDULENT SCHEME

Freeman and Mr. Temp entered an agreement in 1970 with Walter Wilson Carter, Jr., who also was indicted, but testified for the government. Freeman and Temp would locate and deal with California investors, primarily physicians and other professional persons, through Temp's business, Diversified Monetary Systems, Inc. (DMS). Carter would obtain and operate the oil and gas properties through his partially owned corporation, Independence Drilling Corp. (IDC). DMS induced the investors to enter purchase acquisition contracts with IDC for oil property leases, workover contracts, and remedial work on the wells. DMS, itself, entered financial management contracts with the investors for a substantial annual fee. DMS sent the purchase amounts and workover charges to Carter, who acquired the leases and arranged for necessary remedial work.

Because Carter's operations lost money, Temp and Freeman formed Continental Pacific Corp. (CPC) in 1972, with Temp as president. CPC took over all production operations and investor records by contract with IDC. Mrs. Temp ¹ established and ran the CPC office in Texas; she approved all correspondence, read all incoming mail, and reviewed the accounting books. Mr. Temp moved from California to Texas in 1973 to oversee the field work with Carter and to take part in running CPC and IDC.

IDC owned around 100 leases on oil and gas property at a time. The appealed convictions arise from the sale to investors of seven leases that Carter, IDC, and CPC never owned, although Carter had negotiated to buy them. Between July 1971 and December 1974 Freeman and, in a few cases, Mr. Temp sold those seven leases for a total of $767,447.99 to about forty-five investors. Mrs. Temp knew of these sales and prepared the paperwork accompanying the leases sent to the investors. In connection with the nonowned leases appellants also charged investors workover fees of $814,610.00 purportedly to maximize the petroleum production, and sent completion letters to the investors even though appellants did not expend that money on those particular properties. Mrs. Temp directed preparation of the completion letters. In fact, IDC and CPC commingled all the investors' funds in the general operating fund and apparently arbitrarily fixed net production returns to approximate the investors' payments on loans incurred in buying the leases. Appellants sent the investors production reports on the seven nonowned wells, although some did not produce oil or gas and none of the product accrued to the investors' benefit.

The superseding indictment charged Freeman, Mr. Temp, Mrs. Temp, and Carter with sixteen counts of mail fraud and twelve counts of interstate transportation of fraudulently taken property. After a five-week trial, the jury convicted all three appellants of eight counts of mail fraud and seven counts of interstate transportation; it also convicted Mr. Temp and Mrs. Temp of one other count of mail fraud and one of interstate transportation. The mail fraud convictions were based on transmission through the mail of production memoranda and another document about the nonowned properties from IDC to four investors in 1974 and 1975. The interstate transportation convictions were based on transfer of checks for interests in the nonowned properties from four investors to IDC in 1973 and 1974. ²

II. THE INDICTMENT

Appellants argue that the indictment did not charge an offense and that it lacked the necessary specificity. They did not raise these objections in the court below. Their contention that the indictment did not charge an offense may still be raised, Fed.R.Crim.P. 12(b)(2), but it is without merit. The indictment charged that appellants made false, fraudulent, and misleading statements that IDC owned or operated several nonowned leases and would spend the workover charges on those specific lease interests to produce income for the investors, and it alleged that appellants sold those nonowned leases to the investors and failed to apply the workover charges to those properties. The indictment also listed particular mailings to those investors and check transfers across state lines from those investors. In assessing the sufficiency of the indictment, we reprint appellants' own summary of the first count of the indictment in the margin ³ and refer to it in the remainder of this section.

The essential elements of an indictment for mail fraud, 18 U.S.C. § 1341, are "(1) a scheme to defraud (2) which involves a use of the mails (3) for the purpose of executing the scheme." United States v. Kent, 608 F.2d 542, 545 (5th Cir. 1979). See United States v. Maze, 414 U.S. 395, 399, 94 S.Ct. 645, 647, 38 L.Ed.2d 603 (1974). The indictment need not specifically charge, but the government must prove, "a specific intent to commit fraud," United States v. Kent, 608 F.2d at 545 n. 3, and that "the thing mailed was an integral part of execution of the scheme," id. at 546. The present indictment in count one clearly alleged a scheme to defraud in paragraphs 1 and 3; use of the mails in paragraph 2(o) and in each mail fraud count; and the purpose of executing the scheme in each mail fraud count. ⁴ The mail fraud counts of the indictment are therefore sufficient.

The essential elements of an indictment for interstate transportation of fraudulently taken checks (or similar property), 18 U.S.C. § 2314 (paragraphs 1 and 2), are (1) interstate transportation of a stolen, converted, or fraudulently taken check of at least $5,000 value (2) with fraudulent intent. See United States v. Driscoll, 454 F.2d 792, 797 (5th Cir. 1972). The present indictment in each interstate transportation count alleged (1) interstate transportation of a fraudulently taken check for more than $5,000 and (2) fraudulent intent in terms of "wilfully and knowingly caus(ing the check) to be transported in interstate commerce" and "knowing the same to have been taken by fraud." ⁵ The interstate transportation counts of the indictment are therefore sufficient. The aiding and abetting allegations, 18 U.S.C. § 2, within those same counts are similarly sufficient.

Appellants' contention that the indictment lacked the specificity required by the sixth amendment was waived by their failure to object before trial. United States v. Varner, 437 F.2d 1195, 1197 (5th Cir.), cert. denied, 404 U.S. 825, 92 S.Ct. 52, 30 L.Ed.2d 52 (1971) (mail fraud); Fed.R.Crim.P. 12(f). Even if they could object for the first time at this late date, we would reject their argument that the indictment's reference to particular events that "included, but were not limited to, the following" vitiated the indictment, United States v. Caine, 441 F.2d 454, 456-57 (2d Cir.), cert. denied, 404 U.S. 827, 92 S.Ct. 59, 30 L.Ed.2d 55 (1971) ("among others"), although the district court should have treated that language as surplusage, Marsh v. United States, 344 F.2d 317, 322 (5th Cir. 1965) ("the following and other offenses"); see Fed.R.Crim.P. 7(d). We also disagree with appellants' argument that "any of several acts conceivably underlay the Grand Jury's indictment," because that argument "confuses the Defendants' constitutional right to know what offense is charged with his need to know the evidentiary details establishing the facts of such offense" that can be provided through a motion for bill of particulars. Van Liew v. United States, 321 F.2d 664, 670 (5th Cir. 1963) (emphasis omitted).

Appellants also charge that all twelve jurors may not have found proof of any particular fraudulent scheme, see United States v. Gipson, 553 F.2d 453, 457-58 (5th Cir. 1977), but that some jurors might have found a single scheme while other jurors found a multiple conspiracy, see United States v. Nettles, 570 F.2d 547, 551-52 (5th Cir. 1978). Appellants did not raise their objection at trial, but contend that the court's failure to give jury instructions requiring unanimous agreement on one scheme was plain error. See United States v. Cook, 586 F.2d 572, 579 (5th Cir. 1978), cert. denied, 442 U.S. 909, 99 S.Ct. 2821, 61 L.Ed.2d 274 (1979); Fed.R.Crim.P. 30, 52(b). The instructions, however, required both that a guilty verdict be unanimous and that all essential elements be present "with respect to a particular count" of mail fraud or "with regard to a particular count" of interstate transportation of fraudulently taken property. Unlike the elements of 18 U.S.C. § 2313 in Gipson, the elements of each offense in this case do not fall into "two conceptual groupings" so that some jurors may have "thought the defendant committed only an act in the first conceptual grouping while others believed he committed an act only in the second." 553 F.2d at 458. The hearsay instructions that referred to a "conspiracy or scheme," which we discuss below, uniformly contemplated only a single combination.

Freeman, Mr. Temp, and Mrs. Temp also argue that "this court cannot say that the offense proved was the offense...