U.S. v. Riebold

• Decision Date: 14 June 1977
• Docket Number: Nos. 76-1170,76-1171,s. 76-1170
• Citation: 557 F.2d 697
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. E. M. "Mike" RIEBOLD and Donald T. Morgan, Defendant-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 697

557 F.2d 697

UNITED STATES of America, Plaintiff-Appellee, v. E. M. "Mike" RIEBOLD and Donald T. Morgan, Defendant-Appellants.

Nos. 76-1170, 76-1171.

United States Court of Appeals Tenth Circuit.

Argued and Submitted March 15, 1977.

Decided May 25, 1977.

Petition for Rehearing Denied June 14, 1977.

Lyman G. Sandy, Asst. U. S. Atty., Albuquerque, N. M. (Victor R. Ortega, U. S. Atty., Albuquerque, N. M., on the brief), for plaintiff-appellee.

James Patrick Quinn and Philip F. Cardarella, Kansas City, Mo., for defendant-appellant Riebold.

Peter Everett, IV, of Parker, Francis & Everett, Albuquerque, N. M., for defendant-appellant Morgan.

Before SETH, BARRETT, Circuit Judges, and KERR, District Judge. ^*

BARRETT, Circuit Judge.

E. M. "Mike" Riebold (Riebold) and Donald T. Morgan (Morgan) ¹ have been found guilty by a jury of receipt of a fee for procuring a loan, aiding and abetting, misapplication of bank funds, false statement in a securities registration statement, wire fraud, interstate transportation of property obtained by fraud, securities, fraud, conspiracy, and mail fraud. ² On the verdicts, the trial judge entered judgments convicting appellants and sentencing them, from which they appeal.

Appellants were initially charged on December 20, 1974, by an 84 count indictment. This indictment was superseded by a subsequent 84 count indictment filed on April 29, 1975. After three co-defendants entered guilty pleas, appellants proceeded to trial on the 75 counts of the indictment bearing charges relating to them. Riebold was convicted on 72 counts. Morgan was convicted on 71 counts.

Riebold was engaged in the business of mineral development involving oil, gas, and coal. He was the controlling stockholder of several corporations, including American Fuels, Inc., Garfield Mines, Inc., Auqua Pura, and United States Lime. Through numerous bank loans and loans from private investors, as will be developed, infra, Riebold was able to project an image of immense wealth.

Morgan was a vice-president and a chief loan officer of the First National Bank of Albuquerque, New Mexico (First National). Morgan initially approved loans to Riebold because he "had thought for some time that our bank, as the second largest bank in the state, ought to achieve a certain expertise in oil and gas lending that didn't exist in New Mexico banks at that time." Thereafter, he continued to approve loans to Riebold because he felt "trapped" and because he believed that additional loans were necessary if First National was to recover any of the money it had advanced.

The trial consumed more than thirty days. The Government introduced an overwhelming amount of evidence which established the manner in which appellants defrauded First National and a number of private investors. Loans were generally acquired for Riebold and his companies by misrepresentations made by appellants relating to the value of Riebold's assets and the manner in which the monies were to be expended.

The Government proved that Riebold's companies were, for all practical purposes, dormant; that the companies generated little or no income, had negative net worths, and were unable to pay their obligations on a timely basis; that loans advanced by Morgan and private investors allowed the companies to exist; that loans advanced for specific exploration activities were diverted to pay salaries, telephone bills, costs incurred in operating Riebold's airplane, entertainment expenses, work on Riebold's home, and in payment of existing loans and overdrawn bank accounts.

The Government established that Morgan utilized his position as senior vice-president of First National to: loan Riebold approximately three million dollars ($3,000,000.00) at a time when Morgan's authorized lending limit was $150,000; make loans to Riebold that other bank officers would not have made; loan Riebold monies after being warned not to do so because of Riebold's poor payment history; loan Riebold monies without first obtaining a credit check or securing adequate and proper collateral; conceal loans made to Riebold which he knew would not be approved; assure other officers that the Riebold loans would all be repaid shortly; repay some $2.8 million of Riebold's loans by fraudulently completing a signed blank check of a corporate depositor; continue to make loans to Riebold after being expressly admonished by his superiors not to make any further loans to him. Morgan made these loans in a relatively unnoticed manner because of the high position of influence and authority he held and further because he was much respected within First National. His co-employees and associates were disinclined to challenge his loans. Riebold rewarded Morgan for his help by bestowing financial favors upon him.

The Government introduced detailed evidence establishing the manner by which appellants were able to defraud a number of private investors out of an amount in excess of $2,000,000.00. This is well summarized in the Government's brief: "Riebold's usual method of doing business with these investors and others was to impress them with his apparent wealth, including his lavish mansion and jet planes, which he used to fly investors to various properties. He boasted of his many companies and properties which he falsely represented to be worth many millions of dollars, and told tales of huge deals that were always just about to be closed."

Riebold and Morgan testified and they presented evidence supportive of their defense which "was a general denial of any intent by Riebold or Morgan to pay or receive any 'kickbacks', or misapply bank funds, or defraud anyone." Whether appellants intended to defraud or injure First National is, of course, immaterial in an 18 U.S.C.A. § 656 prosecution. In United States v. Tokoph, 514 F.2d 597 (10th Cir. 1975), we said:

. . . This evidence is said to indicate Weil and appellant did not intend to injure or defraud the Bank. Whether or not the loans were repaid or the Bank actually suffered a loss is not material to a § 656 charge. "The offense occurred and was complete when the misapplication took place." United States v. Acree, supra (466 F.2d 1114 (10 Cir.)).

514 F.2d, at 604.

On appeal appellants do not directly challenge the sufficiency of the evidence. They contend that the trial court erred in: (1) refusing to grant a continuance; (2) denying their motion for a mistrial during the testimony of the Government's chief witness; (3) allowing the jurors to take notes; (4) permitting their trial on a patently biased indictment; and (5) inadequately instructing the jury.

I.

(a)

Morgan contends that the trial court erred in refusing to grant a continuance in that his motion was not dilatory but was necessary to prepare for "such a complex and lengthy trial" and that with additional time he could have produced evidence which would have materially benefited his defense.

Morgan was originally indicted on December 20, 1974. He had the services of retained counsel at that time and for some time prior thereto in the course of First National's investigation. Morgan then retained other counsel who represented him throughout the period that the second indictment was brought (April 29, 1975), during the many hearings on motions that arose thereafter and until August 8, 1975, when his counsel assumed a state district judgeship. This, of course, precluded him from further representation of Morgan.

His counsel had informed Morgan about July 8, 1975, almost one month prior to his assumption of the judgeship, that he had been so appointed and would be unable to further represent him. Even so, it was four weeks later when Morgan retained new counsel, who entered his appearance in this case on August 13, 1975. At that time, trial had been scheduled for September 8, 1975. The trial court had granted two continuances at that time.

Following his entry of appearance as Morgan's newly retained counsel, he filed for yet another continuance. He contended, inter alia:

5. The undersigned is informed and believes that the trial in this cause will last from two to three months and as a result of the complexities of the case, the number of witnesses and exhibits to be offered by the Government and the Defendant, the undersigned respectfully moves the Court for a continuance in order to properly acquaint himself with the case and prepare a defense for the defendant . . .

(R., Vol. I, p. 167.)

Morgan argues that the denial of the continuance placed an insurmountable burden upon his newly retained counsel in that it was impossible for him to prepare for the trial to commence September 8, 1975. On this predicate, Morgan alleges that he was effectively denied assistance of counsel and due process of law. We hold that the trial court acted well within its discretion in denying the continuance.

A trial court's determination to deny a motion for a continuance will not be set aside absent proof of a manifest injustice resulting from its denial. In United States v. Hill, 526 F.2d 1019 (10th Cir. 1975), cert. denied, 425 U.S. 940, 96 S.Ct. 1676, 48 L.Ed.2d 182 (1976), we said:

Consideration of these contentions is based on the well-established rule that "(t)he trial court is vested with discretion as to granting a continuance. Its exercise will not be disturbed on appeal in the absence of a clear showing of abuse resulting in manifest injustice." United States v. Spoonhunter, 476 F.2d 1050 (10th Cir. 1973). Our review of the record convinces us no abuse of discretion occurred in denying this motion for continuance. One attorney had entered his appearance on November 27, 1973, two other attorneys had entered their appearances on January 24, 1974. Services of a court-appointed investigator were utilized. No showing of inadequate time to investigate and prepare for trial is made. See United States v. Harris, 441 F.2d 1333 (10th Cir. 1971). The record does not show any injustice resulting from the denial of...