U.S. v. Thomas

• Decision Date: 23 February 1984
• Docket Number: Nos. 79-5175,s. 79-5175
• Citation: 728 F.2d 313
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Harry THOMAS (79-5271) and Anthony L. Romano (79-5175), Defendants-Appellants. /5271.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 313

728 F.2d 313

UNITED STATES of America, Plaintiff-Appellee, v. Harry THOMAS (79-5271) and Anthony L. Romano (79-5175),

Defendants-Appellants.

Nos. 79-5175/5271.

United States Court of Appeals, Sixth Circuit.

Argued Nov. 11, 1982.

Decided Feb. 23, 1984.

D. Shannon Smith, argued, Cincinnati, Ohio, for Romano.

Robert C. Green, U.S. Atty., Grand Rapids, Mich., Joel M. Gershowitz, argued, U.S. Dept. of Justice, Washington, D.C., for U.S.A.

Michael Y. Sandborn, argued, Sandborn & Theophelis, Harry Thomas, Lansing, Mich., for Thomas.

Before MERRITT and JONES, Circuit Judges, and WEICK, Senior Circuit Judge.

NATHANIEL R. JONES, Circuit Judge.

Appellant Harry Thomas was convicted after a jury trial of one count of transporting fraudulently obtained money in interstate commerce in violation of 18 U.S.C. Secs. 2314 and 2 ("Count 9") and one count of conspiracy to commit bank fraud in violation of 18 U.S.C. Secs. 371 and 1014 ("Count 10"). In the same trial, appellant Anthony Romano was also convicted of conspiracy to commit bank fraud ("Count 10"). On appeal from these convictions appellants assign as error the following points: (1) the district court erred in permitting their retrial after a mistrial had been granted upon their motion because of an improper reference to a prior conviction in violation of the double jeopardy clause; (2) the district court erred in not severing the trial; (3) the district court erred in allowing the misconduct of the United States Attorney prosecuting their case to deprive them of a fair trial; and (4) the district court erroneously instructed the jury on the issue of intent. Appellant Thomas further asserts that the evidence was insufficient to support his conviction for transporting fraudulently obtained money in interstate commerce. For reasons which follow, we reject the assignments of error asserted and affirm the convictions of both appellants.

In April 1969, one Bartoli and his brother-in-law, Ronald Henry, purchased the Green Meadows Golf Course in Lansing, Michigan. Subsequently, in 1973, these same individuals began construction on a 36-lane bowling alley located on the golf course. After substantial work had been completed on the structure, the financing for this project fell through. To make matters worse, in July of that year, vandals destroyed 13 of 18 greens on the golf course, ending the use of the facility for the golfing season.

Fearful of losing his investment, Bartoli began to seek other sources of financing. Eventually, Bartoli entered into an agreement with defendant Thomas to provide funding for the troubled venture. The exact nature of this agreement is in dispute. The government asserts that Bartoli arranged for Thomas to assume his brother-in-law's fifty percent interest in the business in return for either a full or partial payment of $30,000. Thomas on the other hand, asserts that the $30,000 advance was a loan, establishing him as a creditor. A new corporation was formed and entitled Green Meadows Links and Lanes with Bartoli as its president and Thomas as its treasurer. These individuals subsequently engaged in a pattern of conduct giving rise to their criminal liability.

Shortly after Thomas' entry into the business, the firm began to obtain interim loans. For example, an application to the Metropolitan Savings and Loan Association was submitted for a $2 million loan purportedly to complete construction of the bowling alley and to pay off the firm's existing debts. The bank issued a commitment of $1.6 million, but there was some delay in the closing of the loan. In need of funds, Thomas and Bartoli obtained a renewal of a $75,000 personal loan to Bartoli from the Bank of Commerce of Lansing, Michigan. In addition, on June 3, 1974, they obtained a $105,000 loan, on behalf of the corporation, from the Bank of Lansing. In connection with the renewal of the $75,000 loan, Bartoli submitted a financial statement of Thomas which recited that he (Thomas) owned a sizeable amount of assets (land and stocks). In reality, Thomas had, by the date of the financial statement, divested himself of these assets. In support of the $105,000 loan, Bartoli submitted Thomas' personal guarantee, a power of attorney from Thomas to Bartoli, two assignments of Evans Industries notes owned by the defendant Thomas, and a hypothecation agreement pledging the Evans notes as collateral. Although each of these documents was allegedly signed by Thomas, it was later discovered that they were, in fact, signed by Edward Magnotta, an employee of the Green Meadows corporation.

In the fall of 1974, Bartoli went to Florida to obtain Thomas' signature on the documents that supported the $1.6 million loan from Metropolitan Savings, including an assignment to the bank of 15,000 shares of Chrysler stock owned by Thomas. This assignment also called for the signature of Howard Victor, a representative of the Bache & Co., which possessed considerable equity in the Chrysler stock. Thomas signed both his own name and that of Victor, albeit without authority. Subsequently, Metropolitan Savings notified Bartoli that it was freezing the proceeds of the loan because of irregularities in the construction plan. Upset, Thomas informed Bartoli that he was sending defendant Romano to take over the general management of the project.

Soon thereafter, in what later proved to be his last official act, Bartoli obtained, on behalf of the corporation, a $70,000 loan and, once again submitted the forged unlimited personal guarantee of Thomas. This same document was submitted in support of a $40,000 corporate loan from the Bank of Lansing. Subsequently, and in reaction to so-called threats, Bartoli was "forced" to leave his office and to "give" Romano ten percent of his stock.

In October 1974, Thomas was required to meet frequent and very large margin calls in order to preserve his interest in Ryder System stock which he had substituted for the Chrysler stock pledged as collateral for the $1.6 million loan. Subsequently, in order to obtain a $50,000 corporate loan, Bartoli and Romano offered the Bank of Lansing Thomas' equity in the Ryder stock (previously pledged) as collateral. The bank accepted this offer. After Bartoli signed Thomas' name on a number of documents including a hypothecation, the proceeds were issued. Thereafter, Romano drew a check on the account of the corporation in the amount of $15,000 which was made payable to Bartoli, who subsequently drew on these funds to pay the margin account for Thomas, although the defendants had represented that the proceeds were to be used by the corporation solely for working capital. It was these transactions which gave rise to the appellant's criminal prosecution.

On March 16, 1978, a grand jury returned a ten-count indictment against Bartoli, Magnotta, Thomas and Romano alleging that these defendants had conspired to commit numerous acts of bank fraud, had committed the substantive offense of bank fraud, and had transported fraudulently-obtained money in interstate commerce. Prior to trial, co-defendants Bartoli and Magnotta entered pleas of guilty and were subsequently granted immunity in exchange for their testimony. Defendants Thomas and Romano were then tried jointly though Romano's trial had been severed prior to the guilty pleas.

Jury trial began on December 11, 1978, for appellant and then codefendant Harry Thomas, in Grand Rapids, Michigan. During the direct examination of former codefendant Edward B. Bartoli, on December 13, 1978, reference was made to a prior conviction of appellant Thomas. Appellant Thomas' trial counsel immediately objected and moved for a mistrial which was granted on December 13, 1978. The conviction that was mentioned was 14 years old, and the defense counsel had filed a motion in limine, which had not been ruled upon. Rather, the court had instructed the government to give notice before any evidence of prior crimes would be introduced, so that the court could rule on the motion. The reference made to this conviction was not invited by question, and appears to have been unsolicited.

A second trial began on January 23, 1978, and ended February 21, 1978, with the convictions challenged on these appeals. Appellant Thomas was sentenced to concurrent terms of seven years and five years on his two-count conviction, and fined $10,000. He is presently free on bail of $100,000 pending appeal. Appellant Romano was sentenced to 18 months imprisonment and fined $1,000. He is free on his own recognizance pending appeal.

I. DOUBLE JEOPARDY

Several months prior to defendants' first trial, Thomas moved the district court for an order directing the United States Attorney and all prosecution witnesses to refrain from alluding to Thomas' 14 year-old convictions for tax evasion pursuant to Rule 609 of the Federal Rules of Evidence. The district court held this motion in abeyance and reasoned:

In this case, the parties have failed to advise the Court, by affidavit or otherwise, of relevant considerations under Rule 609(b). While defendant's motion alludes to a plea entered "almost fourteen (14) years" ago, the Court has been provided with no information on the date or circumstances of the plea or the sentence imposed. Since the ten year period prescribed in Rule 609(b) is calculated from the date of release, this information is essential to a proper consideration of the motion. Defendant has the burden of providing the court with this information. United States v. Brown, 476 F.2d 933 (D.C.Cir.1973).

Moreover, assuming that the 10 year period has elapsed, the Government has neither presented the Court with "specific facts and circumstances" demonstrating that the probative value of such evidence "substantially outweighs" its prejudicial effect, nor, as far as the Court can determine, has it served defendant with a written notice of its intent to use such evidence.

In the absence of the information prescribed by Rule 609 and...