U.S. v. Huntsman, 91-2549

• Decision Date: 26 March 1992
• Docket Number: No. 91-2549,91-2549
• Citation: 959 F.2d 1429
• Parties: UNITED STATES of America, Appellant, v. Wayne HUNTSMAN and Ralph Huntsman, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1429

959 F.2d 1429

UNITED STATES of America, Appellant, v. Wayne HUNTSMAN and Ralph Huntsman, Appellees.

No. 91-2549.

United States Court of Appeals Eighth Circuit.

Submitted Dec. 9, 1991.

Decided March 26, 1992.

Sandra W. Cherry, Little Rock, Ark., argued, for appellant.

Samuel A. Perroni, Little Rock, Ark., argued (Roxanne T. Wilson, on the brief), for appellees.

Before LAY, ^* Chief Judge, WOLLMAN and HANSEN, Circuit Judges.

WOLLMAN, Circuit Judge.

The district court dismissed with prejudice the indictment against Wayne Huntsman and Ralph Huntsman and granted their motion for judgment of acquittal notwithstanding the jury's verdict. The government appeals. We reverse and remand.

I.

This case involves the agricultural commodities price support and adjustment program administered by the Commodity Credit Corporation (CCC) through the Agricultural Stabilization and Conservation Service (ASCS). Under the program, if the average market price for wheat, feed grain, certain types of cotton, or rice falls below the target price set by Congress, the government makes up the difference by paying money--"deficiency payments"--to participating farmers. Agricultural Act of 1949, ch. 792, Title IV, §§ 401 et seq. (codified as amended principally at 7 U.S.C.A. §§ 1421 et seq. (West 1988 & Supp.1991)).

Participants in the program could also borrow money from the government, using their crops for collateral ("commodity loan"). If the farmer decides not to repay the loan, he may simply keep the money and let the government keep the collateral.

Applicable regulations provide that, to be eligible for payments under the program, one must be a "producer" on a farm that is in compliance with certain reporting and other requirements. 7 C.F.R. § 713.50 (1984 and 1985) (redesignated at 7 C.F.R. § 1413). To be a "producer," one must be "a person who shares in the risk of producing the ... crop in the current year (or shares in the proceeds therefrom) ... or would have shared in the crop if it had been produced...." 7 C.F.R. § 713.50(c).

For the years 1982-85, each "person" could receive no more than $50,000 in annual deficiency payments. Agricultural Act of 1981, Pub.L. No. 97-98, 95 Stat. 1213, 1263 (codified as amended at 7 U.S.C.A. § 1308 (West 1988 & Supp.1991)). Regulations provide that an individual or legal entity is a "person" entitled to receive deficiency payments only if he: 1) has a separate and distinct interest in the crop or the land on which the crop is produced; 2) exercises separate responsibility for that interest; and 3) is responsible for paying the cost of farming related to that interest from a fund or account separate from that of any other individual or entity. 7 C.F.R. § 795.3 (1984 and 1985).

Thus, a landlord and a tenant could each be eligible to receive up to $50,000 in deficiency payments. To qualify, each would have to fulfill two requirements. First, each would have to be a producer in order to participate in the program at all. Second, each would have to be a separate person. To take part in the program, both the landlord and the tenant would sign a "Contract to Participate in Price Support and Production Adjustment Programs" ("Contract") with the ASCS. The landlord would sign the Contract as the "operator," defined in the Contract's appendix as "the person who is in general control of the entire farming operation on the farm" during the relevant year. The tenant would sign the Contract as a "producer," defined in the Contract's appendix as "a person who, as owner, landlord, tenant, or sharecropper shares, or would have shared had the crop been produced, in the risk of producing the crop (or shares in the proceeds therefrom)...."

During 1984 and 1985, several tenants entered written lease agreements with Huntsman Farms, Inc. ("Huntsman Farms") to rent rice or wheat land. Each tenant also signed a Contract with the ASCS to participate in the price support program, representing themselves as producers, with their landlord, Huntsman Farms, as the operator. The government brought a seven count indictment against Wayne and Ralph Huntsman, charging that they had caused the tenants to misrepresent their status to the ASCS in order to qualify for the program. Count I of the indictment charged that, between 1984 and 1987, Wayne and Ralph Huntsman conspired with each other and with other persons to cause the tenants to falsely represent that the tenants were "producers," when in fact Huntsman Farms was the true producer. Count I further charged that, as part of the conspiracy, Wayne and Ralph Huntsman used the tenants to circumvent the "separate person" requirement, and that Wayne and Ralph Huntsman diverted the program payments from the tenants to themselves and to Huntsman Farms in circumvention of applicable regulations.

Counts II through VII each charged that Wayne and/or Ralph Huntsman caused a particular tenant to misrepresent his status as a "producer" in 1984 and/or 1985, when in fact Wayne and Ralph Huntsman knew that Huntsman Farms would be the true producer. ¹ Counts II through VII did not incorporate by reference the allegations contained in Count I. Each of Counts II through VII did, however, specify that each tenant made the misrepresentation when he identified himself as a "producer" on the Contract he entered into with the ASCS.

At the court's direction, the government later amended the indictment by filing a bill of particulars. The bill of particulars described the program's requirement that each "person" receive no more than $50,000.00 under the program and recited that the false statements alleged in the indictment were made to circumvent the definition of the term "person."

The government's proof of the misrepresentations varied for each tenant. Essentially, the government sought to prove that even though each tenant signed a lease with Huntsman Farms that was valid on its face, each lease arrangement was in reality a sham. The government sought to show that each tenant signed up at the behest of Wayne and/or Ralph Huntsman, that each simply funneled to Wayne or Ralph Huntsman or to Huntsman Farms the money he received under the program, and that Wayne and/or Ralph Huntsman so manipulated the transactions with the tenants that the four tenants were not in actuality entitled to share in the proceeds from the crops produced on the leased land.

The first of the four tenants, Bill Long, had leased land from Huntsman Farms on which to grow soybeans prior to 1984. Those leases had been on a crop share basis, i.e., Long paid a portion of the crop as rent. Long stated that he controlled the planting, harvesting and sale of the beans grown on land subject to his lease.

Long signed a Contract with the ASCS to participate in the price support program for the years 1984 and 1985. He represented to the ASCS that he would lease 500 acres of rice land from Huntsman Farms during 1984 and 350 acres in 1985, for $150 per acre. Long testified that he did not intend to grow rice either year, and in fact did not although he knew that someone grew rice on the land subject to his lease during 1984 and 1985. Long testified that he signed up for the rice program because "Wayne asked me if I would participate in the program ... [b]ecause of the government limitations they had on the payment."

Long stated that he received none of the proceeds from the sale of the rice crop produced on the land to which his lease applied, and incurred none of the expenses. Long testified that he did, however, receive a $27,996.91 check for deficiency payments under the program in 1984. Long stated that he gave the check to Wayne Huntsman according to an agreement between the two. Long was entitled to receive an additional $22,003.09 in deficiency payments in 1984, but that money was withheld to pay money that he owed to the government. In 1985, Long received several checks under the program. One of the checks he kept as a loan from Wayne Huntsman, but he directed that the remainder of the checks be deposited in his wife's account and their proceeds paid to Wayne Huntsman.

The second tenant, Roy Crowder, had worked for Ralph Huntsman as an employee and had sharecropped rice and bean land under oral agreements with members of the Huntsman family prior to 1984. The only leases which were written, he stated, were those he entered in conjunction with the price support program. When Crowder had grown beans on land leased from the Huntsmans, Crowder handled the transport and sale himself.

Crowder signed leases with Huntsman Farms for 500 acres in 1984 and 350 acres in 1985, at $150 per acre. Crowder testified that he thought that price to be very high, and that one could not make any money farming rice on such terms. In his opinion, $75 per acre would be a fair price. Crowder did not control the storage and sale of the rice grown on the land subject to the written lease with Huntsman Farms. As far as Crowder knew, Wayne Huntsman made the decisions regarding sale of the rice.

Crowder testified that he signed up for the program at Wayne's behest. He did not realize that he would qualify for money from the government; he thought that his signing up was necessary to prevent the government from reducing the Huntsman's allotment of land for rice farming.

The record reveals several instances where Crowder received money from the program, then either gave it to one of the Huntsmans directly or deposited it in his own account before writing checks to the Huntsmans. In 1984, for example, Wayne Huntsman told Crowder that they needed to go to the ASCS office to pick up a check. After the pair retrieved the check (a commodity loan check for more than $112,000.00), Wayne Huntsman offered to deposit it for Crowder. The check was never deposited in Crowder's account. In 1985, Crowder received a $50,000.00 rice deficiency check from the program and deposited it in his account. The day after Crowder deposited the check, one...