U.S. v. Herring
| Decision Date | 24 September 1979 |
| Docket Number | No. 78-5654,78-5654 |
| Citation | 602 F.2d 1220 |
| Parties | 4 Fed. R. Evid. Serv. 1429 UNITED STATES of America, Plaintiff-Appellee, v. Robert L. HERRING, and Jerry D. Dorminey, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
C. Nathan Davis, Albany, Ga. (court-appointed) for Robert L. Herring.
Peter Zack Geer, Albany, Ga., for Jerry D. Dorminey.
Samuel A. Wilson, Jr., Asst. U. S. Atty., Macon, Ga., for United States.
Appeals from the United States District Court for the Middle District of Georgia.
Before SIMPSON, TJOFLAT and HILL, Circuit Judges.
Robert L. Herring and Jerry D. Dorminey appeal their convictions for racketeering activity affecting interstate commerce, 18 U.S.C. § 1962(c) (1976), 1 and for interstate transportation of securities procured by fraud, 18 U.S.C. §§ 2, 2314 (1976). 2 They contend that the trial court erred in evidentiary rulings and its charge to the jury; Herring also challenges the sufficiency of the indictment, the refusal of the court to sever his case from Dorminey's, and the quality of his legal representation. After reviewing each of their claims of error, we affirm both convictions.
The salient facts in this case embroil the appellants and their companies in a scheme of financing fraud. Herring was the head of Herco Corporation (Herco), a Georgia corporation involved in heavy equipment sales. Dorminey was the head of Dean's Power Oil, Inc. (Dean's Oil), a Georgia corporation involved in the retail sale of gasoline. As part of his business, Herring would obtain financing for heavy equipment sales. This ordinarily involved the sale of the equipment under an installment sale contract, which Herco would discount with a financing company in order to receive directly large sums of money. Herring and Dorminey fraudulently obtained in excess of $1,200,000 from five different financial institutions, supposedly to finance the sale of heavy equipment by Herco to either Dean's Oil, Dorminey personally, or another party.
The heavy equipment that was the subject of these "sales" and that supposedly secured the financing was in fact owned by others in various places from Puerto Rico to Algeria and in one instance was non-existent. Representatives from the financial institutions testified that only because these transactions had been structured as "sales" did the financial institutions not require an independent inspection of the equipment; had they been cast as "loans," an inspection of the collateral would have revealed the absence of the equipment and resulted in no money for Herring and Dorminey. The funds obtained in this manner from the financiers were divided between Herring and Dorminey; Dean's Oil then made payments on the installment sales contracts, at times with funds supplied by Herco.
Herco eventually went into bankruptcy and Dean's Oil filed for a Chapter XI arrangement. At the trial, each defendant attempted to place the blame on the other. Herring, attempting to negate any intent to defraud, contended that he was merely assisting Dorminey, as a favor, to obtain loans on equipment he believed Dorminey owned. Dorminey also denied any intent to defraud; he testified that Herring had told him that Herco owned the equipment serving as the security for the loans and that the transactions were legitimate. The jury was not persuaded by their inculpative defenses and found defendant Herring guilty of seven counts and Dorminey guilty of six counts of interstate transportation of securities procured by fraud under 18 U.S.C. § 2314 and each guilty of one count of racketeering activity under 18 U.S.C. § 1962(c).
On appeal, Herring and Dorminey each challenge the fairness of his trial. We turn to the points of error each has raised.
Herring contends that the indictment improperly charged a violation in the count brought under 18 U.S.C. § 1962(c) and failed to allege the essential elements of a crime in any of the 18 U.S.C. § 2314 counts. Section 1962(c) makes illegal interstate activities that are conducted through a pattern of racketeering activity. "Racketeering activity" is defined in section 1961 to include violations of certain sections of Title 18 of the United States Code, among them section 2314. 3 In listing these code sections, section 1961 provides explanatory parentheticals for the types of crimes incorporated into the definition of racketeering activity. Drawing on the explanatory parenthetical following the listing of section 2314, Herring contends the indictment does not charge a violation of 18 U.S.C. § 1962(c).
The explanatory parenthetical for section 2314 states "(relating to interstate transportation of stolen property)." See note 3 Supra. In this case, however, the section 2314 conduct that allegedly constituted a section 1962(c) pattern of racketeering was not described as interstate transportation of Stolen property; rather, the conduct pertained only to securities Converted or taken by fraud. The explanatory parenthetical, Herring argues, limits the kind of section 2314 conduct that constitute a pattern of racketeering activity for section 1962(c) purposes to interstate transportation of Stolen property. The interstate transportation of securities Converted or taken by fraud, as charged in this case, is not included; therefore, Herring submits, the section 1962(c) count fails to allege an offense.
The Organized Crime Control Act of 1970, Pub.L. 91-452, 84 Stat. 922, was enacted to further the eradication of organized crime. Id. §§ 1, 904. Such a restrictive reading of the statute as that suggested by Herring would undermine the remedial purposes that Congress intended. If Congress had intended to exclude the interstate transportation of property obtained by fraud from its definition in section 1961, it specifically could have limited the incorporation of section 2314 as it did the incorporation of section 659, where only felonious acts under section 659 are included. See note 3 Supra. We hold that the reference to the interstate transportation of stolen property in the parenthetical following the citation of section 2314 in the section 1961 definition of racketeering activity was intended merely to aid the identification of section 2314 rather than to limit the proscriptions of that section. Because of this, the indictment properly charged a crime under 18 U.S.C. § 1962(c).
Herring attacks the counts of the indictment based on section 2314 by claiming that they fail to allege the essential elements of a crime. He contends that the lack of the words knowingly, willfully, or unlawfully is a fatal infirmity. We cannot agree. In addressing the requirements of the same part of section 2314 involved here, this court has stated: "To sustain a conviction under this statute it is necessary to prove that the accused transported the goods in interstate or foreign commerce, that the value of the goods so transported was $5,000 or more and that he knew they had either been stolen, converted or taken by fraud." Johnson v. United States, 207 F.2d 314, 319 (5th Cir. 1953), Cert. denied, 347 U.S. 938, 74 S.Ct. 632, 98 L.Ed. 1087 (1954). See United States v. Franklin, 586 F.2d 560, 564 (5th Cir. 1978), Cert. denied, --- U.S. ----, 99 S.Ct. 1536, 59 L.Ed.2d 789 (1979). Each count of the indictment in this case alleges that the defendants knew that the checks had been taken by fraud and is sufficient to charge a crime. The authorities cited by Herring are not apposite since they deal with the requirements of different statutes or different subsections of section 2314. Similarly, we cannot accept Herring's contention that the indictment failed to inform him of the nature of the charges against him. Here the indictment sufficiently specified the transactions out of which the charges arose and traced the language of the statutes allegedly violated. See Grene v. United States, 360 F.2d 585, 586 (5th Cir.) (per curiam), Cert. denied,385 U.S. 978, 87 S.Ct. 522, 17 L.Ed.2d 440 (1966).
Herring next contends that he was not adequately represented by his retained counsel at trial and thus was denied his right to effective assistance of counsel. 4 This claim stems from the trial court's failure to grant Herring's motion for continuance filed four days prior to trial, in which his counsel stated that he had not had sufficient access to Herring to prepare a defense and thus was unable to provide him effective representation. Herring, however, has not specified one instance at trial where he was not adequately represented. Moreover, the record indicates that Herring's counsel filed numerous pretrial motions and was successful in obtaining a change of venue. The record also reveals that counsel was familiar with the dealings of Herring and Herco, having represented them in business affairs, in Herco's voluntary petition for bankruptcy, and in other civil and criminal actions arising out of the transactions involved in this prosecution. 1st Supp. Record, vol. 4, at 11-17. Herring simply has not carried his burden of proving that his retained counsel was ineffective. See Marino v. United States, 600 F.2d 462, 464 (5th Cir. 1979) (per curiam).
The trial court did not grant Herring's motion to sever his trial from that of Dorminey, although it did sever one count of the indictment pertaining to bribery. 5 Herring now claims that he was denied his right to a fair trial because of the trial atmosphere in which each defendant attempted to place the blame on the other. Defendants charged in the same indictment for their participation in the same crimes may be tried together; it is only when the trial court determines that a party is prejudiced that a severance should be granted. Fed.R.Crim.P. 13, 14. The trial court's decision to deny a motion for severance will not be disturbed...
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