U.S. v. Marley

Decision Date14 February 1977
Docket NumberNo. 76-1759,76-1759
Citation549 F.2d 561
PartiesUNITED STATES of America, Appellee, v. Harry Don MARLEY, Appellant.
CourtU.S. Court of Appeals — Eighth Circuit

J. Patrick Green, Omaha, Neb., for appellant; Thomas McQuade, Omaha, Neb., on brief.

Daniel E. Wherry, U. S. Atty., Omaha, Neb., for appellee.

Before MATTHES, Senior Circuit Judge, and STEPHENSON and WEBSTER, Circuit Judges.

STEPHENSON, Circuit Judge.

Appellant Harry Don Marley appeals from his conviction by the district court 1 of one count (Count XXVI) of wire fraud in violation of 18 U.S.C. §§ 1343 and 2. 2 The subject of the count was a telephone communication which occurred November 11, 1974, between Marley and Marion Bonham of York, Nebraska, made in furtherance of a scheme to defraud Nebraska grain elevator operators. Appellant Marley alleges there was insufficient evidence to support the district court's findings that Marley either knew that the statements he made to Bonham were untrue or that he acted in reckless disregard of the truth, and that Marley knew at the time the statements were made that a scheme to defraud was afoot, and the statements were made for the purpose of executing the scheme. We affirm.

The parties at trial stipulated to the existence of a scheme to defraud grain elevator operators. The scheme consisted of people coming from Oklahoma to Nebraska and making purchases of grain. The conspirators would establish credit or financial stability with those intended to be defrauded through one or more legitimate grain commodity transactions. After credit had been established, further grain purchases would be made. Payments for the subsequent purchases would be made by checks drawn on the account name "Redwood Farms" on banks in rural areas of Oklahoma. Prior to the presentation of the checks to the bank upon which they were drawn, the parties to the schemes would stop payment on the checks. The central figure in this scheme was Elvin Floyd Woody.

Until late in October 1974 the Redwood Farms account was at the First National Bank of Sallisaw, Oklahoma. On October 25, 1974, an account in the name of Redwood Farms was opened by Woody in the Sequoyah State Bank in Muldrow, Oklahoma. Appellant Marley was then president of the Sequoyah State Bank. On November 11, 1974, Marion Bonham, president of the First National Bank in York, Nebraska, at the request of his customer Coulter, who was in the process of selling grain to Redwood Farms, telephoned appellant Marley to verify the status of the Redwood Farms balance. Bonham testified at trial to Marley's unequivocal statement that the Redwood Farms account was "good" and that checks totalling $55,000 written on the account for grain would clear when presented through regular banking channels. The evidence showed that the balance of the account at the time of the call was only $13,489. These false representations made by Marley by wire across state lines formed the basis of the count upon which Marley was convicted.

Appellant Marley contends that there is insufficient evidence to support the district court's finding that Marley falsely represented that the $55,000 in checks was backed by sufficient funds and would clear when presented for payment because he knew, or acted in reckless disregard of the truth, when he failed to disclose that the Redwood Farms account contained substantially less than the amounts for which Woody had issued checks. A similar argument is made by appellant that there is insufficient evidence to support the district court's finding that Marley knew by November 11, 1974, that the account was being used for fraudulent purposes and that his statements would aid the scheme.

At the outset we note that in criminal cases tried to the court, factual findings made by the trial judge must stand unless determined to be clearly erroneous, at least where such findings concern matters other than the ultimate question of guilt. United States v. Rischard, 471 F.2d 105, 107 (8th Cir. 1973); Kilcrease v. United States, 457 F.2d 1328, 1331 (8th Cir. 1972). In this case the district court made factual findings concerning Marley's knowledge of the falsity of his statements and his knowledge concerning the fraudulent scheme. These factual determinations, along with the court's determination of Marley's specific intent to carry out an essential step in the scheme to defraud at the time the statements were made, were the only issues really contested by Marley, since the existence of the scheme to defraud had been stipulated, the falsity of the credit information provided by Marley was unquestioned, and the interstate element of the telephone call was essentially uncontradicted. Therefore, the resolution of these factual issues was the equivalent of a determination of guilt. When the determination of a question of fact is also determinative of the ultimate question of guilt, it is the duty of this court to determine whether or not there is substantial evidence, taking the view most favorable to the government, to support the fact determination by the trial court. United States v. Rischard, supra, 471 F.2d at 107.

It should also be noted that criminal intent and guilty knowledge relate to the condition of the mind. Since the condition of the mind is rarely susceptible of direct proof, recourse must be had to all pertinent circumstances. United States v. Smallwood, 443 F.2d 535, 541 (8th Cir. 1971); United States v. Prionas, 438 F.2d 1049, 1053 (8th Cir.), cert. denied, 402 U.S. 977, 91 S.Ct. 1683, 29 L.Ed.2d 144 (1971); Moses v. United States, 297 F.2d 621, 624 (8th Cir. 1961); Brickey v. United States, 123 F.2d 341, 344 (8th Cir. 1941).

It must also be noted that the courts have long recognized that scienter may be established where reckless disregard of truth or falsity is present. Spurr v. United States, 174 U.S. 728, 735, 19 S.Ct. 812, 43 L.Ed. 1150 (1899); United States v. Henderson, 446 F.2d 960, 966 (8th Cir. 1971). "One who acts with reckless indifference as to whether a representation is true or false is chargeable as if he had knowledge of its falsity." Irwin v. United States, 338 F.2d 770, 774 (9th Cir. 1964), cert. denied, 381 U.S. 911, 85 S.Ct. 1530, 14 L.Ed.2d 433 (1965).

With these standards in mind, the government argues convincingly that there is sufficient evidence establishing Marley's knowledge of the falsity of the statements uttered by him on November 11, 1974, and his knowledge that the Redwood Farms account was being used for fraudulent purpose, and despite such knowledge, he intentionally provided false credit information about the account, thereby aiding and abetting execution of the scheme to defraud. For instance, the evidence established that the week preceding the November 11 telephone call, Wendell Coulter, the Pflug Grain Elevator manager, had been dealing with a Redwood Farms driver in relation to a potential grain sale to Redwood Farms. Pursuant to the driver's suggestion, Coulter called the Sequoyah State Bank and was told by a bank employee that he could accept a check for approximately $25,000 drawn on the Redwood Farms account. On November 7, the trucks were loaded with grain sold for $25,917.48. Since the trucks were planning to return for more purchases, Coulter contacted his banker in York, Nebraska, for another verification of the Redwood Farms' financial condition. An employee of the York bank was informed that the check taken by Coulter would not clear. Coulter thereupon refused to sell any more grain to Redwood Farms.

On November 9, 1974, Elvin Woody telephoned Coulter, protesting his refusal to sell any more grain to Redwood Farms. After Coulter informed Woody of the specific problem, Woody replied, "I'll have my banker call you on Monday and he will get this all cleared up." The...

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