U.S. v. McMahan

• Decision Date: 08 November 1984
• Docket Number: No. 84-1082,84-1082
• Citation: 744 F.2d 647
• Parties: UNITED STATES of America, Appellee, v. Roy L. McMAHAN, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 647

744 F.2d 647

UNITED STATES of America, Appellee, v. Roy L. McMAHAN, Appellant.

No. 84-1082.

United States Court of Appeals,

Eighth Circuit.

Submitted June 11, 1984.

Decided Sept. 28, 1984.

Rehearing Denied Nov. 8, 1984.

James R. Wyrsch, Koenigsdorf, Kusnetzky & Wyrsch, Kansas City, Mo., for appellant.

Robert G. Ulrich, U.S.Atty., J. Whitfield Moody, Asst. U.S. Atty., Kansas City, Mo., for appellee.

Before LAY, Chief Judge, ARNOLD, Circuit Judge, and DUMBAULD, ^* Senior District Judge.

LAY, Chief Judge.

Roy L. McMahan appeals from his conviction, under 18 U.S.C. Secs. 894(a)(1) and (2), for using extortionate means to collect an extension of credit.

After a jury trial, McMahan was convicted on two counts of a four-count indictment. On appeal, he asserts that (1) the government failed to prove that McMahan extended credit; (2) a material prejudicial variance, or constructive amendment, of the indictment occurred as a result of the evidence presented at trial; (3) the government withheld information regarding one of its witnesses; (4) one of the jurors did not disclose his true residence during voir dire; and (5) the sentence imposed on him is unconstitutional under the Eighth Amendment. McMahan alternatively requests amendment of his presentence report.

I. Extension of Credit

McMahan's principle contention on appeal is that the government failed to prove that he extended credit, as required by 18 U.S.C. Sec. 894 (1982).

McMahan is a Kansas City auto dealer and owner of several used car auction lots. James Crouch is a used car wholesaler in Kansas City who was having serious financial problems in early 1979. On May 3, 1979, McMahan gave checks to Crouch in the amount of $7,900. The testimony was not entirely clear or consistent, but the jury could reasonably have found that McMahan loaned Crouch the $7,900 to enable Crouch to pay off bank loans he had on two cars. The understanding between McMahan and Crouch was that Crouch would sell these cars through McMahan's auto auction. Upon the sale, McMahan would recover the principal of the loan, in addition to one-half of the profit realized by Crouch. However, that same day, Crouch sold the cars without going through McMahan's auction. Crouch then wrote checks to McMahan in the amount of $7,900 as a repayment of the loan; the checks were not good and the loan remained outstanding.

The jury also might have believed Crouch's testimony that a $7,500 check which he gave McMahan in mid-May, 1979, was a "hold" check. By accepting the check and agreeing to hold it until Crouch had sufficient funds to pay it, McMahan allowed Crouch to defer payment on the debt owed. This would create a credit transaction even if the original transaction did not involve an extension of credit. The jury was instructed that "extension of credit" means "to make or renew any loan, or to enter into any agreement, tacit or express, whereby the repayment or satisfaction of any debt or claim, whether acknowledged or disputed, valid or invalid, and however arising, may or will be deferred."

Accepting a check is sufficient to satisfy the statutory requirement that there be an extension of credit. Section 891 defines extension of credit very broadly and the application of section 894 has been broadly construed. United States v. Dennis, 625 F.2d 782, 802-03 (8th Cir.1980); United States v. Schaffer, 539 F.2d 653, 654 (8th Cir.1976); United States v. Horton, 676 F.2d 1165, 1171 (7th Cir.1982), cert. denied, 459 U.S. 1201, 103 S.Ct. 1184, 75 L.Ed.2d 431 (1983); United States v. Mase, 556 F.2d 671, 673-74 (2nd Cir.1977), cert. denied, 435 U.S. 916, 98 S.Ct. 1472, 55 L.Ed.2d 508 (1978). Credit is a chose in action. See Walz v. State Bank of Greenwald, 211 Minn. 317, 1 N.W.2d 375, 377 (1941); 21 C.J.S. Credit (1940). The writing of a check is a grant of a chose in action to the payee. See U.C.C. Sec. 3-802. Accepting a check as payment is an extension of credit because the payee or indorsee obtains a chose in action. If the payee or indorsee does not wish to extend any credit, he or she can insist on a cash payment. See, e.g., U.C.C. Sec. 2-702. In this case, the jury reasonably could have found that McMahan accepted payment from Crouch in the form of one or more checks and, in so doing, extended credit to Crouch.

The defendant relies on United States v. Boulahanis, 677 F.2d 586 (7th Cir.), cert. denied, 459 U.S. 1016, 103 S.Ct. 375, 74 L.Ed.2d 509 (1982), in arguing there was no extension of credit. However, Boulahanis involved defendants who attempted to extort protection payments by beating a nightclub owner and wrecking his club. Id. at 587. There was no underlying business transaction and no money changed hands except under duress. Id. In the present case, the transfers of checks were entirely voluntary. This case is quite similar to United States v. Horton, 676 F.2d 1165 (7th Cir.), cert. denied, 459 U.S. 1201, 103 S.Ct. 1184, 75 L.Ed.2d 431 (1982), where defendant, a heroin dealer, received bad checks and used extortionate means to attempt to collect on them. Id. at 1168. The court had no difficulty finding an extension of credit. Id. at 1171. Our examination of the record reveals substantial evidence upon which the jury might have based its finding that McMahan extended credit to Crouch.

II. Variance or Amendment of Indictment

McMahan alleges that the evidence at trial was substantially different from that alleged in the indictment and that this constituted a prejudicial variance or constructive amendment of the indictment. First, McMahan points out that the indictment alleged a loan of "approximately $7,100.00 * * * on or about April, 1979 * * *." From the evidence at trial it appears that the actual amount involved was $7,500 and the transaction occurred in early May of 1979. Second, defendant criticizes the language of the indictment, calling it "duplicitous" and "confusing." In effect, McMahan is challenging the sufficiency of the indictment.

The Supreme Court has stated:

[A]n indictment is sufficient if it, first, contains the elements of the offense charged and fairly informs a defendant of a charge against which he must defend, and, second, enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense. * * * It is generally sufficient that an indictment set forth the offense in the words of the statute itself, as long as "those words of themselves fully, directly, and expressly, without any uncertainty or ambiguity, set forth all the elements necessary to constitute the offense intended to be punished."

Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 2907, 41 L.Ed.2d 590 (1974) (citations omitted). See also Russell v. United States, 369 U.S. 749, 763-64, 82 S.Ct. 1038, 1046-1047, 8 L.Ed.2d 240 (1962); United States v. Schaffer, 539 F.2d 653, 655 (8th Cir.1976). The indictment basically tracked the language of the statute, see 18 U.S.C. Sec. 894 (1982), and fairly informed McMahan of the charge against which he had to defend. Quite properly, defendant first raised the objection in pre-trial motions which resulted in an order by Magistrate Hamilton for the government to file a bill of particulars. The government complied with the order and defendant made no further requests for particularization.

A variance between facts alleged in the indictment and evidence offered at trial does not necessarily constitute an amendment of the indictment. See, e.g., Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946); Berger v. United States, 295 U.S. 78, 55 S.Ct. 629, 79 L.Ed. 1314 (1935). Of course, neither the prosecutor nor the trial court may constitutionally amend a federal indictment. Ex Parte Bain, 121 U.S. 1, 9-10, 13, 7 S.Ct. 781, 785-786, 787, 30 L.Ed. 849 (1887). However, a variance is constitutional so long as it does not deprive the defendant of due process. See Kotteakos, 328 U.S. at 760-62, 765, 66 S.Ct. at 1245-1246, 1248; Berger, 295 U.S. at 81-82, 55 S.Ct. at 630-631; Washington & Georgetown R. Co. v. Hickey, 166 U.S. 521, 531-32, 17 S.Ct. 661, 665, 41 L.Ed. 1101 (1897); United States v. Crocker, 568 F.2d 1049, 1059 (3rd Cir.1977). In this case, the variance regarding the amount in controversy and the date of the transaction was insignificant. The indictment was sufficient so as to apprise the defendant of the charges against him and to allow counsel to prepare for trial effectively.

III. Exculpatory Evidence

Defendant contends that the government failed to disclose exculpatory evidence concerning its witness James Lichty. It appears that the evidence the government had did not tend to exculpate McMahan but, rather, may have provided a basis for impeachment of Lichty. Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), does not require the government to provide defendants with all information it has regarding each of its witnesses. United States v. Agurs, 427 U.S. 97, 103-14, 96 S.Ct. 2392, 2397-2402, 49 L.Ed.2d 342 (1976). In the present case, a general request was made by defendant's counsel for all impeaching material the government had concerning any of its witnesses. After McMahan's conviction, his counsel discovered that the government was investigating Lichty for possible crimes unrelated to the present case. Defendant contends that this information should have been disclosed to him.

The duty of the prosecutor to disclose evidence is measured "by the 'materiality' of the evidence to the question of the defendant's guilt or innocence." Scurr v. Niccum, 620 F.2d 186, 189 (8th Cir.1980). When a general request for disclosure is made, as in this case, the standard by which the materiality of the undisclosed evidence is measured is whether "the omitted evidence creates a reasonable doubt that did not otherwise exist * * *." Agurs, 427 U.S. at 112, 96 S.Ct. at 2402. The trial court, in considering defendant's motion for a new trial, specifically found that the...