U.S. v. Glaeser
| Decision Date | 17 March 1977 |
| Docket Number | 75-3626,Nos. 75-3611,s. 75-3611 |
| Citation | 550 F.2d 483 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. George Louis GLAESER, Jr. and Mechmetals Corporation, Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. Anthony Edward O'CARROLL, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Morton H. Boren, appeared, Los Angeles, Cal., for defendants-appellants in No. 75-3611.
James P. Cantillon, argued, Cantillon & Cantillon, Los Angeles, Cal., for defendant-appellant in No. 75-3626.
William D. Keller, U. S. Atty., Wilfred A. Hearn, Jr., argued, Asst. U. S. Atty., Los Angeles, Cal., for plaintiff-appellee.
Appeal from the United States District Court for the Central District of California.
Before CHAMBERS and KENNEDY, Circuit Judges, and JAMESON, * District Judge.
Defendants appeal from their convictions after a jury trial of conspiring to defraud the Government in violation of 18 U.S.C. § 371, and of fraud by wire in violation of 18 U.S.C. § 1343. Defendants present three arguments on appeal, the most serious of which is whether an entrapment instruction should have been given to the jury. We affirm.
Defendant Mechmetals Corporation (Mechmetals) and Mechanized Science Seals, Incorporated, (MSS) were rival corporations, each manufacturing an item known as a "pivot" to be used in the gyro-compass assembly of the United States Air Force's F-4 Phantom Jet and TFX aircraft. The two corporations submitted individual bids to produce this pivot to the Department of Defense. Defendant Glaeser was president of Mechmetals and defendant O'Carroll worked in a sales capacity for Glaeser. O'Carroll had previously worked for MSS for a short time as a sales representative before being discharged. A Mr. Hamren was president of MSS and a Mr. Heesch was secretary-treasurer. In mid-1974, Tinker Air Force Base issued a request for bids to produce the pivot. Both Mechmetals and MSS submitted bids, and Mechmetals' was lower. MSS believed that Mechmetals was not qualified to make the pivot and therefore filed a protest with the Air Force. This protest was subsequently denied.
The Government's evidence at trial revealed that defendant O'Carroll telephoned Hamren on October 21, 1974, and indicated that Mechmetals would secure the Air Force contract since it was low bidder. Hamren informed O'Carroll of the protest filed by MSS. O'Carroll then stated that he had a solution whereby for payment of $50,000.00, Mechmetals would withdraw its low bid so that MSS would secure the contract, and that if MSS did not go along with the scheme, Mechmetals could put MSS out of the pivot business by continually underbidding it. Hamren, sensing a possible extortion plot, notified Heesch of this occurrence. Later the same day, O'Carroll returned a telephone call from Heesch, who recorded the conversation. In a lengthy conversation, O'Carroll in vague terms indicated that he could see to it that MSS received the contract and that he could arrange for MSS to be guaranteed all future contracts on the pivot by influencing Mechmetals to either not bid or to bid higher than MSS.
The next day, October 22, 1974 Heesch attended the conference at Tinker Air Force Base concerning MSS' protest over Mechmetals' pivot-producing capabilities. This protest was denied, but Heesch never learned of that denial. On October 23, Heesch informed an FBI agent friend of his about the October 21 telephone conversation with O'Carroll. Heesch met with the agent on October 24, and the agent instructed Heesch to include a witness in future meetings with O'Carroll.
On October 25, 1974, defendant O'Carroll met with Heesch and Hamren of MSS. In an unrecorded conversation, O'Carroll told them that he wanted $50,000.00 as a down payment after MSS secured this contract, and that he wanted ten percent on future pivot contracts for the next five years. O'Carroll also discussed a method whereby, through exchanging information, MSS could be assured of being low bidder. On the following day, October 26, after meeting with defendant Glaeser, O'Carroll met with Heesch and Hamren again and indicated in another unrecorded conversation that Glaeser would go along with the plan and split the proceeds with O'Carroll. O'Carroll also discussed how "cover" sales representative contracts could be drawn up so as to make the payment from MSS look legal. On October 29, O'Carroll showed Heesch a wire and letter signed by defendant Glaeser and addressed to Tinker Air Force Base which would be sent to withdraw Mechmetals' bid. In a recorded conversation, O'Carroll went over the cover contracts again and reiterated that Glaeser was to receive a share of the proceeds from MSS.
On October 31, 1974, defendant Glaeser for the first time visibly entered the picture when he and O'Carroll met with Heesch, Hamren and a third principal of MSS. At this meeting, which was recorded and surveilled by the FBI, both Glaeser and O'Carroll acknowledged that they understood the deal to be for Mechmetals to withdraw its bid in exchange for $50,000.00, thereby guaranteeing the contract to MSS as the sole remaining bidder, and for ten percent of all future pivot orders to go to the defendants. In return, defendants were to see to it that MSS always won the contract and thus would be unhindered in raising its prices. At the end of this meeting, a $50,000.00 check was given to the defendants, who then proceeded to send a wire cancelling Mechmetals' bid. Defendants were then arrested.
Testimony by defendants O'Carroll and Glaeser on their own behalf varied considerably from the Government's proof. O'Carroll contended that he was initially contacted by MSS and not vice versa, and that his subsequent contacts and discussions with MSS were merely to investigate the possibility of being reinstated as a sales representative for MSS. The main point of his initial meetings with MSS, according to O'Carroll, was to see whether MSS might want to do some subcontracting work for Mechmetals should the latter secure the pivot contract. 1 O'Carroll alleged that at the October 25 meeting, it was Heesch who suggested that Glaeser withdraw his bid and receive a subcontract from MSS for pivots at a higher price (rather than MSS doing subcontract work for Mechmetals, as O'Carroll allegedly had suggested). According to O'Carroll, the idea of having Glaeser withdraw his bid originated with Heesch and Hamren after they learned that Mechmetals would not do subcontract work under MSS. O'Carroll testified that he thought his persuading Glaeser to withdraw the Mechmetals' bid was a condition precedent to his own reinstatement as a sales representative for MSS. The $50,000.00 apparently was to be a loan to O'Carroll to be paid back from his future commissions as sales representative for MSS. O'Carroll denied any intention of sharing any money from MSS with Glaeser or of promising Glaeser anything for his withdrawal of the Mechmetals' bid.
According to both defendants, Glaeser had actually decided to withdraw the Mechmetals' bid before October 21 because of his doubts about Mechmetals' capabilities, but O'Carroll urged him to hold off and Glaeser did so for O'Carroll's benefit (to aid O'Carroll in obtaining the sales representative position with MSS). Glaeser claimed to have played along by leading MSS to believe that O'Carroll was persuading him to withdraw the Mechmetals' bid, when in fact he had planned to do so all along. Both defendants claimed that the tape recorded conversations, which were played to the jury at trial, were taken out of context and that they had not really meant what they said.
Defendants' primary allegation of error is the district court's refusal to give their requested entrapment instruction. The district court initially agreed to give the instruction for defendant O'Carroll since there was conflicting testimony as to whether MSS contacted O'Carroll first or vice versa, and as to the subject matter and course of discussion at certain meetings that admittedly took place and others that O'Carroll claimed to have occurred but which the MSS' witnesses denied. 2 The district court, however, later changed its mind and decided not to give the entrapment instruction when the Government brought our court's Eastman case and its progeny to the district court's attention. Eastman v. United States, 212 F.2d 320 (9th Cir. 1954). Eastman required a defendant to admit the commission of the offense charged before being able to raise the entrapment defense, and here the defendants did not expressly do so. For that reason, the district court refused to give the instruction. Subsequently, Eastman was overruled by United States v. Demma, 523 F.2d 981 (9th Cir. en banc 1975), which held that a defendant cannot be required to admit the act charged before asserting the entrapment defense. After Demma came down, the defendants here moved for judgment of acquittal or for a new trial in district court primarily because of that court's refusal to give the entrapment instruction. The district court denied the defendants' motions, even though it conceded that it probably would have given the instruction after Demma through an "overabundance of precaution." In denying the motions, however, the court also declared that it could "find no substantial evidence, no credible evidence, that would justify any reasonable jury in finding entrapment under the circumstances," and that defendants' convictions were supported by "overwhelming evidence." In the district court's view, O'Carroll's version of the story, which arguably gave rise to a claim of entrapment, was completely belied by his own recorded statements.
Although the district court refused the defendants' requested entrapment instruction before...
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