U.S. v. Ruedlinger
| Decision Date | 15 July 1997 |
| Docket Number | No. 96-40045-01-SAC.,96-40045-01-SAC. |
| Parties | UNITED STATES of America, Plaintiff, v. Douglas O. RUEDLINGER, Defendant. |
| Court | U.S. District Court — District of Kansas |
Richard F. Hayse, Morris, Laing, Evans, Brock & Kennedy, Chtd., Topeka, KS, for Gregory L. Smart.
James M. Yeretsky, Yeretsky & Maher, LLC, Kansas City, MO, Douglas O. Ruedlinger, New Smyrna Beach, FL, Jacqueline A. Cook, Stites, Hopkins, Fair & Riederer, Kansas City, MO, for Douglas O. Ruedlinger.
Richard L. Hathaway, Office of the U.S. Atty., Topeka, KS, for U.S.
On March 10, 1997, trial in this case commenced.1 The second superseding indictment in this case charged Douglas O. Ruedlinger with ten counts of mail fraud, two counts of wire fraud and five counts of money laundering. An eighteenth count seeking forfeiture of certain assets pursuant to 18 U.S.C. § 982 and 21 U.S.C. § 853 was bifurcated prior to trial. On April 7, 1997, the jury returned a verdict finding the defendant, Douglas O. Ruedlinger, guilty of all ten counts of mail fraud, both counts of wire fraud and one count of money laundering (Count 17). A copy of the jury's verdict is attached to this memorandum and order.
This case comes before the court upon Ruedlinger's "Motion for Judgment of Acquittal and/or New Trial" (Dk. 127).2 Ruedlinger's motion primarily challenges the sufficiency of the evidence. Ruedlinger contends, inter alia, that he must be innocent, as FAA members lost no money from their participation in the Partners in Protection ("PIP") agreement. In regard to the money laundering conviction, Ruedlinger contends it must be set aside under the Tenth Circuit's decision in United States v. Johnson, 971 F.2d 562 (10th Cir.1992) and its progeny. In addition, Ruedlinger alleges that several specific errors deprived him of a fair trial.
The government responds, arguing that the evidence overwhelmingly supports the jury's verdict in this case. The government contends that evidence of Ruedlinger's knowing participation in a scheme to defraud — a scheme that enabled him to live an extravagant and lavish lifestyle — was proven by the testimony of several witnesses. In short, the government contends that the evidence made it absolutely clear that despite the fact that Ruedlinger knew that no reserves existed, he continued to inform high school athletic associations who had entered the PIP agreement that their $1.6 million in financial reserves existed and were safely deposited in money market certificates as required by the terms of the agreement. In regard to the trial errors alleged by Ruedlinger, the government contends that no errors occurred and that he received a fair trial.
Although the court did not set a time for filing a reply brief, on June 6, 1997, Ruedlinger filed a pleading titled "Defendant's Reply to Opposition of the Government to the Defendant's Motion for Judgment of Acquittal and/or New Trial." (Dk. 144). In his reply, Ruedlinger suggests that the government's brief "takes wide latitude with numerous facts and/or evidence presented to the Court during the trial in reaching its assertion of `overwhelming evidence.'" Ruedlinger again points to the final audit of FAA which showed a negative reserve balance for the member associations. Ruedlinger also attempts to distance himself from the persons "actually" responsible for the purported misrepresentations. Ruedlinger again argues that he reasonably relied upon the glowing assurances from the persons actually running his companies that everything was being managed in a proper and lawful manner.
The court, having considered the briefs of counsel, the evidence presented at trial and the applicable law, denies the defendant's motion. The court will address the defendant's arguments seriatim.
To review the sufficiency of the evidence supporting a criminal conviction, the court must examine the evidence in the light most favorable to the prosecution to determine whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. United States v. Miller, 987 F.2d 1462, 1464 (10th Cir.1993). In reviewing the sufficiency of the evidence, the court must consider both direct and circumstantial evidence, as well as reasonable inferences to be drawn from that evidence. United States v. Davis, 1 F.3d 1014, 1017 (10th Cir.1993) (citing United States v. Fox, 902 F.2d 1508, 1513 (10th Cir.), cert. denied, 498 U.S. 874, 111 S.Ct. 199, 112 L.Ed.2d 161 (1990)).
" " United States v. Jones, 49 F.3d 628, 633 (10th Cir.1995) (quoting Sunward Corp. v. Dun & Bradstreet, Inc., 811 F.2d 511, 521 (10th Cir.1987) (quoting Daniels v. Twin Oaks Nursing Home, 692 F.2d 1321, 1326 (11th Cir.1982))).
The line between a reasonable inference that may permissibly be drawn by a jury from basic facts in evidence and an impermissible speculation is not drawn by judicial idiosyncrasies. The line is drawn by the laws of logic. If there is an experience of logical probability that an ultimate fact will follow from a stated narrative or historical fact, then the jury is given the opportunity to draw a conclusion because there is a reasonable probability that the conclusion flows from the proven facts.
Jones, 49 F.3d at 632 (quoting Tose v. First Pennsylvania Bank, N.A., 648 F.2d 879, 895 (3d Cir.), cert. denied, 454 U.S. 893, 102 S.Ct. 390, 70 L.Ed.2d 208, (1981)). "Additionally, `the essential requirement is that mere speculation be not allowed to do duty for probative facts after making due allowance for all reasonably possible inferences favoring the party whose case is attacked.'" Jones, 49 F.3d at 632 (quoting Galloway v. United States, 319 U.S. 372, 395, 63 S.Ct. 1077, 1089-90, 87 L.Ed. 1458 (1943)).
The court must accept the jury's resolution of conflicting evidence and its assessment of the credibility of witnesses. Davis, 1 F.3d at 1017 (citing United States v. Youngpeter, 986 F.2d 349, 352 (10th Cir.1993)).
A court may grant the defendant a new trial "if required in the interest of justice." Fed.R.Crim.P. 33. Courts view motions for new trial with disfavor and grant them only with great caution. United States v. Chatman, 994 F.2d 1510, 1518 (10th Cir.), cert. denied, 510 U.S. 883, 114 S.Ct. 230, 126 L.Ed.2d 185 (1993); United States v. Leeseberg, 767 F.Supp. 1091, 1093 (D.Kan.1991). The defendant has the burden of proving the necessity of a new trial. United States v. Davis, 15 F.3d 526, 531 (6th Cir.1994); United States v. Cooley, 787 F.Supp. 977, 984 (D.Kan.1992), vacated in part on other grounds, 1 F.3d 985 (10th Cir.1993). For purposes of this case, the relevant rule is that a new trial should be granted upon "[a]ny error of sufficient magnitude to require reversal on appeal." 3 Charles A. Wright, Federal Practice and Procedure § 556 (1982); see United States v. Stiner, 765 F.Supp. 663, 664 (D.Kan.1991), aff'd, 952 F.2d 1401 (10th Cir.1992) (Table); United States v. Suntar Roofing, Inc., 709 F.Supp. 1526, 1530 (D.Kan.1989), aff'd, 897 F.2d 469 (10th Cir.1990). The decision of whether or not to grant a new trial is committed to the sound discretion of the district court. See United States v. Patterson, 41 F.3d 577, 579 (10th Cir.1994).
Although this court has handled criminal matters involving as many as 81 counts, this was one of the most complex criminal cases this court has heard. This complexity was due in part to the fact that the second superseding indictment alleged a scheme to defraud spanning almost a decade in time. Despite this general observation, the court believes that the jury's verdict is supported by sufficient evidence and that none of the errors alleged by Ruedlinger deprived him of a fair trial.
Before turning to the arguments of the parties, the court will briefly comment on the conduct of counsel during trial. Counsel for both the government and the defendant were extremely well prepared. Although a large number of bench conferences were held during trial, the complexity of this case and the pendency of the second case justified most of those discussions. Counsel for the government presented a mass of evidence regarding the defendant's activities in an efficient and intelligible manner.3 Counsel for the defendant zealously represented the interests of his client in a very professional manner. Both counsel are to be commended for their conduct during this trial. The court attributes the jury's verdicts of guilty to the substantial weight of the evidence against the defendant and not any deficiency in his counsel's performance.
In relevant part, the second superseding indictment substantially states:
INTRODUCTION
That at all times material to this indictment:
1. The defendant DOUGLAS O. RUEDLINGER, transacted business within the state of Kansas as and through Wheatland Group Holdings, Inc. ("WGHI"), and his affiliated subsidiary companies; including, but not limited to, Fund Administrators Association, Inc. ("FAA"), of Topeka, Kansas. RUEDLINGER owned 100% of the stock of WGHI. In turn, WGHI owned 100% of the stock of the affiliated companies domiciled in the state of Kansas.
2. RUEDLINGER agreed to administer a program called Partners in Protection Program ("PIP") through his company, FAA. This program was devised and promoted to state school activities associations by RUEDLINGER as a means of providing liability protection for the school associations. Any school activities association, such as the Kansas State High School Activities Association, participating in this program, was required to make an annual deposit to RUEDLINGER, the administrator of the PIP Program. RUEDLINGER was entitled to...
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