U.S. v. Redmond, Nos. 75-1767

• Decision Date: 04 January 1977
• Docket Number: Nos. 75-1767,75-1781 and 75-1782
• Citation: 546 F.2d 1386
• Parties: UNITED STATES of America, Appellee, v. Virgil REDMOND et al., Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1386

546 F.2d 1386

UNITED STATES of America, Appellee, v. Virgil REDMOND et al., Appellants.

Nos. 75-1767, 75-1781 and 75-1782.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted Sept. 21, 1976.

Decided Jan. 4, 1977.

Herbert W. DeLaney, Jr., Denver, Colo. (Richard J. Leedy, Salt Lake City, Utah, on the brief), for appellant, Virgil Redmond.

Sumner J. Hatch, Hatch, McRae & Richardson, Salt Lake City, Utah, for appellant, Carl Powers.

Walter R. Ellett, Murray, Utah, for appellant, Francis Lund.

Richard W. Beckler, Atty., Crim. Div., Dept. of Justice, Washington, D. C. (Ramon M. Child, U. S. Atty., Salt Lake City, Utah, and Ronnie L. Edelman, Atty., Crim. Div., Dept. of Justice, with him on the brief), for appellee.

Before LEWIS, Chief Judge, and BREITENSTEIN and SETH, Circuit Judges.

SETH, Circuit Judge.

The defendants, Virgil Redmond, Carl Powers, and Francis Lund, together with a corporate defendant, were charged under 15 U.S.C. §§ 77q(a) and 77x with the use of the mails in the fraudulent sale of securities. The case was tried to a jury, and each defendant was found guilty on eight counts. The court sentenced the individual defendants to a total of eighteen years. Each defendant was also fined $40,000.00.

The Government sought to prove that the defendants engaged in a scheme to defraud investors by selling stock following various mergers between Rio de Oro Mining Company and other corporations controlled by the defendants, or some of them. The Government also sought to show a scheme to defraud buyers of Rio de Oro stock by false representations as to a coal lease on Indian lands, as to coal reserves, and as to a power plant. These representations were made in an investment publication, Univest, and by taking potential investors to the mine location. The Government sought to prove that fraudulent representations and false publications were also made as to a joint venture between Rio de Oro and CMI, another corporation controlled by the defendants, as to gold and uranium mining and mineral reserves. As to the "sale" aspect of the Government's case, its witnesses testified as to distribution of stock by the defendants to nominees and the transfer of shares to persons in exchange for goods and services. The Government witnesses testified to the sale by the defendants of some 5.4 million shares of stock.

On this appeal the defendants raise several points as to pretrial events which will be first considered. They also urge as error a number of matters which concern what they consider to be an excessive participation by the trial judge in the questioning of witnesses, and as to statements made by the judge in the presence of the jury, which they assert exceeded proper comment. The defendants raise several other issues as to the admissibility of evidence, instructions, motions during trial, and the sentences received.

I.

The defendants argue that the delay was excessive between the time the events took place, which serve as a basis for the charges, and the date of the indictment. Reliance is placed on United States v. Marion, 404 U.S. 307, 92 S.Ct. 455, 30 L.Ed.2d 468. The defendant Redmond acknowledges that the Court in Marion did not directly decide the issue. The Court did however there hold that before consideration be given to preindictment delay, it must be shown to have been deliberately caused by the prosecution to gain a tactical advantage. We do not consider that the decision in Marion is here applicable in the absence of an indication that the delay was intentional. The issue is also without substance because the statements as to prejudice are conclusionary only. See United States v. Hauff, 395 F.2d 555 (7th Cir.). We considered the standards in United States v. MacClain, 501 F.2d 1006 (10th Cir.), and the showing here made does not meet the requirements therein stated.

II.

The defendants also urge that they were denied a speedy trial. The standards are now well established and, of course, include prejudice to the defendant, and the length and reason for the delay. Strunk v. United States,412 U.S. 434, 93 S.Ct. 2260, 37 L.Ed.2d 56; Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101; United States v. Latimer, 511 F.2d 498 (10th Cir.); United States v. Goeltz, 513 F.2d 193 (10th Cir.); United States v. Mackay, 491 F.2d 616 (10th Cir.).

The period of time between the date of the indictment and trial was seventeen months. The principal cause of delay in the prosecution of the case came about from the necessity of starting extradition proceedings to return defendant Lund from Canada. He did return in January 1975, and his counsel entered his appearance in March. It was necessary that the codefendants be tried together and no other defendants then objected to the Lund delay. There was a delay of eight months thereafter. There were problems with a crowded calendar and illness of the judge; however, a substantial part of the delay arose from the pretrial motions filed by the defendants. Some thirty motions were considered, and this procedure caused much delay. These were extraordinary motions. There were no motions filed for a speedy trial until the motion of defendant Redmond to dismiss. This was filed very shortly before trial.

The defendants assert as to particular facts causing prejudice that a witness had died before trial, and certain documentary material was not available because of the delay. However, there is no assertion that an attempt was made to obtain the corporate records, and the defendants were free on bond before trial. As to the deceased witness, the record shows that he died before the indictment was handed down.

We find no basis for the objection to lack of a speedy trial.

III.

The defendants urge that the prosecution by special attorneys, and their appearance before the grand jury, was not authorized. The Attorney General through his delegate appointed the special prosecutors, and special experience was required. We find no basis for the objections raised to this use of special prosecutors under 28 U.S.C. § 515(a). United States v. Katz,535 F.2d 593 (10th Cir.).

IV.

The trial judge actively questioned the prospective jurors and excused a substantial number. He excused those with certain stockholdings, generally those employed by the Government, and any who were acquainted with any of the attorneys. These exclusions we cannot say were arbitrary or were excessive. They did not in any way result in a lack of a fair trial nor with a jury not impartial by destroying the initial selection under the Jury Selection Act. The trial judge acted with the discretion to be exercised in the jury selection procedure. United States v. Porth, 426 F.2d 519 (10th Cir.).

V.

We have carefully examined the rulings on evidence complained of by the defendants, and we find no reversible error. The defendants complain also of the manner in which the rulings were made, and the comment by the trial judge which accompanied the rulings. These comments will be considered hereinafter. These trial rulings include those as to the Government witness Litchfield, who was apparently excused. Defendants had expected to use him but had not subpoenaed him. The trial judge acted within his discretion in not delaying the trial to permit the defendant to obtain the presence of this witness. We also considered the hearsay testimony of a deceased witness which was offered and excluded, and found no error.

VI.

The appellants urge as error the refusal of the trial court to grant motions for acquittal as to certain counts. This objection is basically an argument that there was not evidence that defendants were "sellers" or themselves sold some of the securities in question, or they were not "sellers" as to certain count transactions.

The record shows that the large number of shares, over eight million, which were issued following the merger of Rio de Oro with Midwest Petroleum Company and Tiger Oil Company went in large part to nominees who endorsed the certificates, and returned them to the defendants who disposed of them for their own accounts. There was also testimony that shares were issued to persons who sold them for the defendants for a percentage of the sales price.

Shares were also transferred or issued to individuals in exchange for goods and services. There is ample evidence to meet the statutory elements. The showing of the general scheme, with sales of stock generated by defendants, together with the use of the mails, is sufficient. United States v. Mackay, 491 F.2d 616 (10th Cir.).

The trial court considered the evidence in the standard applicable, and correctly refused the defendants' motions for judgment.

VII.

The defendants further object to certain instructions given to the jury. They first point out that the court gave all the instructions requested by the Government. This cannot be, of itself, a valid objection. Obviously if the instructions given are each correct and in all cover the issues tried, there can be no objection as to their source.

The court clearly instructed as to the use of the mails, and emphasized the need by the Government to show such use in furtherance of the scheme. United States v. Mackay, 491 F.2d 616 (10th Cir.)

The defendant Lund urges that he was only acting as attorney for Rio de Oro. The record shows however that his participation was an active one, and not as an attorney for the firm. This evidence was sufficient to warrant the refusal of the instructions he tendered as to mistake of law or fact by an attorney.

The defendant Redmond urges that the court should have given the instructions he requested on good faith and on withdrawal from the activities....