U.S. v. McConnell, s. 83-1178

• Decision Date: 10 December 1984
• Docket Number: 83-1179,Nos. 83-1178,s. 83-1178
• Citation: 749 F.2d 1441
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James H. McCONNELL and Raymond H. Starns, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1441

749 F.2d 1441

UNITED STATES of America, Plaintiff-Appellee, v. James H. McCONNELL and Raymond H. Starns, Defendants-Appellants.

Nos. 83-1178, 83-1179.

United States Court of Appeals Tenth Circuit.

Dec. 10, 1984.

Stephen P. Learned, U.S. Dept. of Justice, Washington, D.C. (Layn R. Phillips U.S. Atty., N.D.Okl., Tulsa, Okl., with him on brief), for plaintiff-appellee.

Morton Berger, Spring Valley, N.Y., for defendants-appellants.

Before SETH, Circuit Judge, DOYLE, Circuit Judge, and BOHANON, Senior District Judge. ^*

BOHANON, Senior District Judge.

James H. McConnell and Raymond H. Starns appeal jury verdicts convicting them on numerous counts of a twenty count indictment. The indictment alleged a conspiracy to commit four separate kinds of substantive offenses against the United States: 1) the use of the mails for fraudulent purposes in violation of 18 U.S.C. Sec. 1341; 2) the use of wire communications transmissions for fraudulent purposes in violation of 18 U.S.C. Sec. 1343; 3) inducing individuals to travel in interstate commerce for the purpose of defrauding such individuals in violation of 18 U.S.C. Sec. 2314; and 4) causing checks to be transported in interstate commerce for fraudulent purposes in violation of 18 U.S.C. Sec. 2314. The defendant McConnell was convicted of conspiracy and all but four of the substantive counts. The defendant Starns was convicted of conspiracy and all but three of the substantive counts.

On appeal the defendants raise three allegations of error, claiming 1) that the trial court improperly denied McConnell's motion for a severance, 2) that the trial court erroneously ruled that if McConnell testified during the trial, the government would be permitted to cross-examine him with respect to certain past wrong-doing and with respect to a statement he made to the F.B.I. in 1974; and 3) that the defendant Starns was deprived of his Sixth Amendment right to counsel by the trial court's denial of his motion for a severance. We find these allegations to be without merit and therefore affirm.

I. THE FACTS

Both parties on appeal have devoted considerable space in their briefs to summarizations of the testimony at trial. We fail to see, however, that a lengthy rehashing of some 15 volumes of trial transcript is necessary or efficacious for a determination of whether the pretrial rulings here contested were erroneous. With respect to the challenge to the trial court's "ruling" on whether the government could cross-examine McConnell as to certain matters, on the facts in this case we need only consider so much of the record as will demonstrate whether such a ruling was ever in fact made and the issue properly preserved for appeal.

In January, 1979, appellant James McConnell purchased a natural gas gathering line in Craig County, Oklahoma, and some 10,000 acres of adjacent leases. McConnell's gathering line was connected to a transmission line owned by the Cities Service Gas Company. McConnell and appellant Raymond Starns then formed a partnership, called Wagon Wheel Energy (hereinafter "Wagon Wheel"), to acquire further leases in the area, operate McConnell's line and sell turn-key natural gas wells to investors. The gas from the wells drilled for investors was to be transported through McConnell's line and sold to Cities Service. McConnell and Starns also formed, with two Tulsa real estate promoters, Fox Henderson and Sam Medley (both not charged in this case), the Pyramid Energy Corporation (hereinafter "Pyramid") to solicit investors for Wagon Wheel. In addition, McConnell and Starns directly solicited investors for Wagon Wheel without benefiting Pyramid, apparently in contravention of promises made to Henderson and Medley.

The government alleged that the Canadian and American investors who spent approximately $3.5 million on Wagon Wheel wells were victimized by McConnell and Starns in numerous ways and, for the most part, ended up owning uncompleted or otherwise worthless wells. To perpetrate this fraud, McConnell and Starns employed the following devices, among others: they furnished false production information to a petroleum engineer and then used the resulting false engineer's report to lure investors; they paid production royalties when none were due; they had an employee falsify open-flow test charts; and they created a fictitious letter from Cities Service addressed to McConnell which was used to divert investors from obtaining information directly from Cities Service that contradicted McConnell's and Starns' own statements. There was also evidence that on at least one occasion they directed an employee to put dry ice and acid into a well in an unsuccessful attempt to persuade an investor that the well pressure was greater than it actually was. ¹ McConnell and Starns also knowingly gave investors false information about the amount of McConnell's and Starns' investment in Wagon Wheel and the manner in which McConnell and Starns were to profit from investments made in the partnership's wells. Although they represented that their economic gain was to be derived from a transmission fee charged for transporting gas from producing wells through McConnell's pipeline and from reversionary interests in the investors' wells, McConnell and Starns in fact diverted more than $1.2 million of the investors' money directly to themselves with the result that many of the wells they did drill became encumbered by liens.

On appeal, McConnell and Starns do not challenge the sufficiency of the evidence produced at trial to convict them of the crimes charged.

II. McCONNELL'S MOTION FOR SEVERANCE

The appellants were indicted on June 24, 1982. On August 9, 1982, McConnell moved for a severance. His motion was supported by an affidavit from Starns who stated that if the severance was granted and Starns was tried first, he would waive his fifth amendment privilege and give exculpatory testimony at McConnell's trial. The affidavit set forth in some detail the testimony Starns would give. This motion was denied at the August 30 pretrial conference. On October 8, 1982, McConnell renewed his motion and submitted an additional affidavit from Starns indicating that Starns was willing to drop his original requirement that he be tried first and would testify on behalf of McConnell so long as the severance was granted, regardless of the order of the two trials. This renewed motion, too, was denied, on November 12, 1982, three days before trial.

This court made a detailed summary of its holdings applicable to severance motions in United States v. Petersen, 611 F.2d 1313, 1331 (10th Cir.1979), as follows:

It is axiomatic that defendants may be charged jointly in the same indictment where they are alleged to have participated in the same act or series of transactions. Rule 8(b), Fed.Rules Crim.Proc., 18 U.S.C. Defendants charged jointly in such indictments "are not entitled to separate trials as a matter of right." Bailey v. United States, 410 F.2d 1209 (10th Cir.1969) cert. denied sub nom., Freeman v. United States, 396 U.S. 933, 90 S.Ct. 276, 24 L.Ed.2d 232 (1969). If prejudice either to the Government or a particular defendant is shown by the joinder, the court may, in its discretion, "grant a severance of defendants or provide whatever other relief justice requires." Rule 14, Fed.Rules Crim.Proc., 18 U.S.C. In determining the merits of a motion for severance, the trial court must weigh the prejudice to a particular defendant caused by joinder against the obviously important considerations of economy and expedition in judicial administration. United States v. Walton, 552 F.2d 1354 (10th Cir.1977), cert. denied, 431 U.S. 959, 97 S.Ct. 2685, 53 L.Ed.2d 277 (1977). Inasmuch as severance is a matter of discretion and not of right, the defendant must bear a heavy burden of showing real prejudice to his case. United States v. Parnell, supra [581 F.2d 1374 (10th Cir.1978) ]; United States v. Ready, 574 F.2d 1009 (10th Cir.1978). A decision to deny separate trials under Rule 14 will not be disturbed on appeal in the absence of an abuse of discretion. United States v. Eaton, 485 F.2d 102 (10th Cir.1973).... "To establish abuse of discretion more is required than that separate trials might have offered a better chance for acquittal of one or more of the accused." United States v. Knowles, 572 F.2d 267 (10th Cir.1978). Rather, it must be shown that the joinder of either defendants or offenses causes actual or threatened deprivation to an individual's right to fair trial. United States v. Butler, supra [494 F.2d 1246 (10th Cir.1974) ]. Of course, a trial court has a continuing duty to insure that prejudice does not occur, and if it does to sever defendants or offenses. Schaffer v. United States, 362 U.S. 511, 80 S.Ct. 945, 4 L.Ed.2d 921 (1960).

With reference to the specific kind of circumstances involved here, that is, where a defendant bases his motion for severance upon a claim that he needs a co-defendant's testimony, an analysis of the cases from several circuits discloses some incongruity with respect to the considerations deemed necessary to the evaluation of such a motion. Considering the cases together, however, the following factors appear relevant: 1) the likelihood that the co-defendant would in fact testify at the movant's severed trial and waive his Fifth Amendment privilege; 2) the significance of the testimony in relation to the defendant's theory of defense; 3) the exculpatory nature and effect of such testimony; 4) the likelihood that the co-defendant's testimony would be impeached; 5) the extent of prejudice caused by the absence of the testimony; 6) the effect of a severance on judicial administration and economy; 7) the timeliness of the motion. United States v. Parodi, 703 F.2d 768, 779 (4th Cir.1983); United States v. Johnson, 713 F.2d 633, 640-41 (11th Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 1447, 79 L.Ed.2d 766 (1984); United States v. Butler, 611 F.2d...