U.S. v. Treadwell

Decision Date30 April 1985
Docket NumberNo. 84-5425,84-5425
PartiesUNITED STATES of America v. Mary TREADWELL, a/k/a Mary T. Barry, a/k/a Mary T. Williams, Appellant.
CourtU.S. Court of Appeals — District of Columbia Circuit

John W. Nields, Jr., Washington, D.C. (appointed by this court), with whom Sara E. Johnson was on the brief, for appellant. Robert G. Joseph, Washington, D.C., also entered an appearance for appellant.

Helen M. Bollwerk, Asst. U.S. Atty., Washington, D.C., with whom Joseph E. diGenova, U.S. Atty., Michael W. Farrell, William D. Pease, Stephen R. Spivack, and Melanie G. Dorsey, Asst. U.S. Attys., Washington, D.C., were on the brief, for appellee.

Before TAMM and BORK, Circuit Judges, and McGOWAN, Senior Circuit Judge.

Opinion for the court filed by Circuit Judge TAMM.

TAMM, Circuit Judge:

In 1982, the grand jury for the District of Columbia indicted appellant Mary Treadwell, Robert E. Lee, Joan M. Booth, Charles W. Rinker, Jr., and Ronald S. Williams on one count of conspiracy, 18 U.S.C. Sec. 371 (1982), sixteen counts of making false statements, 18 U.S.C. Sec. 1001 (1982), seven counts of mail fraud, 18 U.S.C. Sec. 1341 (1982), and one count of wire fraud, 18 U.S.C. Sec. 1343 (1982). Appellant was also charged with three counts of income tax evasion, 26 U.S.C. Sec. 7201 (1982). 1

On July 29, 1983, a jury found Treadwell guilty of one count of conspiracy and seven counts of making false statements and acquitted her of three counts of tax evasion, one count of wire fraud, and nine counts of making false statements. United States District Judge John G. Penn denied her subsequent motions for a judgment of acquittal and a new trial. 594 F.Supp. 831. The court sentenced Treadwell to three years' imprisonment and imposed a fine of $40,000.

Treadwell appeals, claiming, inter alia, that the trial court erred by: (1) denying her motion for acquittal on the conspiracy count because the evidence was insufficient; (2) delivering misleading and prejudicial jury instructions regarding the object of the conspiracy and the use of co-conspirator statements; and (3) denying her motion for a new trial because a document not in evidence was sent to the jury room. For the reasons given below, we affirm the conviction.

A. The Government's Case

Appellant in the mid-1970s was the chief executive officer of P.I. Properties ("P.I."), a nonprofit real estate ownership and management firm. Co-conspirators Robert Lee and Joan Booth, Treadwell's sister, served on P.I.'s Board of Directors and were employed as project managers. Co-conspirator Ronald Williams, appellant's fiance, and later, husband, at one time was engaged by P.I. to perform accounting services. The government claimed that the conspirators used P.I. to acquire control of Clifton Terrace, a government-sponsored housing project, to misuse the project's assets for the enrichment of themselves and their other businesses, and to conceal these activities from government authorities.

Clifton Terrace is a low-income housing project in northwest Washington, D.C., presently owned by the United States Department of Housing and Urban Development ("HUD" or "the Department"). It has always suffered from a variety of problems typical of such projects--high crime, low tenant morale, and rental receipts inadequate to cover project expenses. Trial Transcript (Tr.) 2053-56, 2074-76. Hoping to revitalize the project, the Department in the spring of 1974 agreed to sell Clifton Terrace to P.I. Properties. Tr. 1961-63, 2133-35. After passage of title, however, the property remained subject to a forty-year, HUD-held mortgage and a regulatory agreement providing the Department with a measure of control during the mortgage period. The agreement required the project to submit monthly financial reports and annual audited financial statements and prohibited it from taking certain actions, including the collateralization of rents and tenant security deposits, without Department approval. Gov. Exh. 624.

Treadwell did not supervise the daily operations of P.I. or Clifton Terrace but instead delegated those responsibilities to Robert Lee. He supervised an on-site staff consisting principally of Joan Booth and Zellene Laney, the bookkeeper. Treadwell exercised general supervisory authority and provided specific instructions regarding the project by holding regular meetings with Lee and Booth. Tr. 2403-04. Treadwell Treadwell's other businesses enjoyed substantial benefits as a result of P.I.'s acquisition of Clifton Terrace. 3 PEE benefitted the most conspicuously. In November 1974, P.I. began providing management services to the PEE-owned Buena Vista apartments, using the Clifton Terrace office staff, supplies, and facilities to do so. Clifton Terrace paid P.I. a monthly management fee of seven percent of gross income as compensation for its services. Buena Vista, however, paid no fee because PEE, its owner, was $200,000 in debt and could not afford it. Tr. 2432-35. Instead, PEE's directors, appellant among them, passed a resolution to compensate P.I. by a transfer of PEE stock. Tr. 2964-65. In effect, however, Clifton Terrace directly subsidized Buena Vista's management costs. 4

did not personally manage Clifton Terrace because, in addition to P.I., she was the chief executive officer of four other corporations: Youth Pride, Inc. ("Pride"), Pride Economic Enterprises ("PEE"), Pride Environmental Services ("PES"), and T. Barry Associates ("T. Barry"), the last three for-profit organizations. 2

In April 1975, appellant and Lee created a new PEE division, the Special Police, in order to obtain a contract to provide security services for Clifton Terrace. 5 Fees paid to the Special Police from Clifton Terrace funds were a substantial source of revenue for the conspirators and their businesses. 6 Tr. 2661-76, 3262. In addition to their Clifton Terrace duties, the Special Police were regularly used to perform personal services for the conspirators 7 and to provide security services at Buena Vista and Kenesaw. 8

Tr. 2642, 2648, 2654, 3129-32, 3192, 3206. No other security personnel covered the needs of Clifton Terrace when the guards performed these additional tasks during their assigned shifts. Tr. 2654-55, 3133, 3195, 3200, 3209, 3211. In addition to the Special Police contract, PEE's landscaping division received a total of $18,617 in payments from Clifton Terrace, in some instances for work either wholly or partially unperformed. Tr. 2612-20.

Between June and December 1976, P.I. obtained three bank loans by improperly pledging Clifton Terrace tenant security deposits as collateral. Two of the loans were deposited in PES bank accounts and used to fund new business ventures. A portion of another loan was used to acquire property for Sticks and Stones, the for-profit housing rehabilitation company set up by Treadwell and Lee in 1976. Neither the loans nor the collateralization of the security deposits were reported to HUD on the project's monthly accounting reports ("the ABC's"). 9 Tr. 3354-95, 3455-73, 3943-56.

Booth and Lee routinely helped themselves to Clifton Terrace funds for a plethora of personal and non-project purposes. Heating oil for Buena Vista was paid for on several occasions with Clifton Terrace operating funds, while Clifton Terrace tenants were often without heat during the same periods. Tr. 2460, 2483-84, 2499, 2500-11, 3138, 3200-01. Project funds were used to pay Booth's legal fees in a child custody suit and for painting and carpeting the offices of the Kiosk Advertising Agency, another company owned by appellant. Significantly, neither Booth nor Lee had any ownership or other interest in Kiosk. 10 In addition, Lee on several occasions misappropriated checks sent to Clifton Terrace by the company owning the project's coin-operated washers and dryers. Tr. 2601, 3003-05. Zellene Laney testified that after she brought the matter to Booth's attention, the latter telephoned appellant in Laney's presence to inform her of Lee's misconduct. Immediately thereafter, Booth told Laney that appellant was aware of Lee's activities and that she told her (Booth) that she (appellant) and Lee were going to start a new business with the money. Tr. 2601-03. Many of these improper expenditures were either misreported or not reported on the monthly ABC reports.

By the summer of 1976, the Department had become increasingly concerned about the financial health of the project. P.I. was behind in its mortgage payments and had provided HUD with neither a 1975 audited financial statement or the monthly ABC's required by the regulatory agreement. Tr. 3552-57, 3560-61, 3699-3700. Appellant responded to HUD's increased scrutiny by employing her fiance, Ronald Williams, an accountant, and two of his professional associates to review the project's books in preparation for an audit.

Tr. 2470-71, 3418-24, 3430, 3435-38. Williams and his associates were not qualified to conduct such an audit under HUD rules, Tr. 3426-27, 3441-42, and appellant did not reveal her personal relationship with Williams to HUD. Tr. 3654-55, 3710-13. Although Williams never performed the audit and HUD later informed appellant that Williams would not be an acceptable auditor under its rules, three payments totaling $5,304 were made to Ronald Williams as compensation for his accounting services. Tr. 2581-89, 3778-81.

Despite repeated requests from HUD and repeated promises by appellant, no audit was forthcoming and the conspirators frequently resisted HUD's efforts to monitor the project's books. Tr. 3638-46, 3781-82. Laney testified that appellant and the co-conspirators in late 1976 and early 1977 destroyed and altered invoices and checks to conceal the various non-project disbursements in the event HUD conducted an audit. Tr. 2471-72, 2476, 2780-82.

Its patience exhausted, the Department finally conducted a partial audit in the spring of 1977. 11 In...

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