U.S. v. Wayman

• Decision Date: 03 April 1975
• Docket Number: No. 73--3664,73--3664
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Paul L. WAYMAN, Paul Howard Noe alias H. P. Knowles, Robert L. Hutcheson, andVictor M. Moore, Jr., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1020

510 F.2d 1020

UNITED STATES of America, Plaintiff-Appellee, v. Paul L. WAYMAN, Paul Howard Noe alias H. P. Knowles, Robert

L. Hutcheson, andVictor M. Moore, Jr.,

Defendants-Appellants.

No. 73--3664.

United States Court of Appeals, Fifth Circuit.

April 3, 1975.

Theodore S. Worozbyt, Atlanta, Ga. (Court appointed), for Moore.

Austin T. Smith, Los Angeles, Cal., for Hutcheson.

Hugh M. Dorsey, III, Atlanta, Ga. (Court appointed), for Noe.

John W. Stokes, U.S. Atty., William P. Gaffney, Anthony M. Arnold, Asst. U.S. Attys., Atlanta, Ga., for plaintiff-appellee.

Appeals from the United States District Court for the Northern District of Georgia.

Before GODBOLD and MORGAN, Circuit Judges, and BOOTLE, District Judge.

BOOTLE, District Judge:

On a fifty-three count indictment, alleging violations of 18 U.S.C. § 371 (conspiracy to violate federal law), § 1341 (mail fraud), § 1343 (fraud by wire), and § 2314 (fraudulent inducement of interstate travel), the jury returned verdicts of guilty on various counts against appellants, Paul L. Wayman, Paul Howard Noe, Robert L. Hutcheson, and Victor M. Moore, Jr.; two other persons were found guilty and filed notices of appeal but have not prosecuted their appeals. Appellants raise various issues, but we have determined that no reversible error was committed. We affirm.

I. FACTS

The record in this seven-week trial is voluminous, and it is neither necessary nor desirable to recount all of the facts of the fraudulent scheme as it was perpetrated upon each of the twenty-one victims. Instead, we give the following scenario (drawn from the government's brief) as typical of the procedure which was repeated with each victim, with slight variations from time to time.

Allied Mortgage Consultants, Inc. (Allied Mortgage) advertised through the Wall Street Journal that it had $200,000,000 available for loan commitments to borrowers. The victim, a developer or builder seeking a commitment for permanent financing in order to secure construction financing, encouraged by the advertisement, contacts Allied Mortgage and is asked to forward a complete loan package on his proposed project.

The victim then receives a letter from Allied Mortgage advising that the loan committee has expressed favorable interest and that commitment intent was being made, subject to final approval of evaluation and credit. The letter also states that to complete the package for final committee action, the results of site inspection and evaluation recommendations would have to be prepared and submitted to the loan committee by Allied Mortgage's independently contracted evaluator. The victim is also informed in this letter of the cost of the evaluation inspection.

The victim then forwards his cashier's check to Allied Mortgage to cover the inspection and evaluation fee. The inspection is made by an allegedly independent evaluator, in most instances an individual employed by Allied Mortgage for this purpose. No project was ever turned down by the evaluator or Allied Mortgage.

The victim then receives a latter from Allied Mortgage, advising of the committee's approval and allowing the victim approximately fifteen days to conclude formal application and place one percent of the desired loan amount in escrow prior to the commitment offer. The victim is asked to travel to the Atlanta office of Allied Mortgage with a certified or cashier's check for one (to three) percent of the loan amount in order to meet with Allied Mortgage personnel, negotiate an escrow agreement, and deliver the check to the escrow agent.

The 'independent' escrow agent then advises the victim by mail that he has a firm loan commitment and that the agent will furnish a certified copy for an additional one to three percent of the loan amount. The victim is finally allowed a limited amount of time to obtain the actual commitment from the escrow agent by furnishing payment of the final fee of three to four percent of the loan amount. At this point, or at whatever point negotiations between Allied Mortgage and the victim are broken off, the 'independent' escrow agent disburses to Allied Mortgage the funds held in escrow, allegedly pursuant to the escrow agreement. ¹

With this understanding of the scheme, we proceed to a discussion of the issues raised by appellants.

II. ALLEGED JUROR BIAS

Subsequent to trial, appellant Noe moved for a new trial on the ground that he had been deprived of his constitutional right to a fair and impartial jury panel, due to the presence of Dennis Lee Cash as a juror. In support of his allegation of bias, Noe submitted the affidavit of Walter Foster, president of a company which (according to the affidavit) 'indirectly controlled' Cash's employer. Noe had transacted business with Foster, and as a result Foster's company had suffered a substantial monetary loss. No other factual allegations were made to support the argument of bias. When the court asked on voir dire whether any of the jurors had had any business or social dealings with any of the defendants, Cash remained silent.

There are several problems with Noe's argument. There is nothing to indicate that juror Cash ever recognized Noe during the trial; Noe concedes that he never recognized Cash but that someone else pointed out to him Cash's identity. The business transaction took place four years before the trial. The affidavit shows that Foster was biased against Noe, but the quantum leap from Foster's bias to the conclusion that Cash must also have been biased is a jump we are not prepared to make. ² We note that Noe did not file an application for the court to question jurors and thereby determine whether Cash knew Noe or was in any degree biased; instead Noe chose to rely upon Foster's conclusions as contained in his affidavit. ³

In any trial there is the presumption that the jury is impartial and unbiased; it is incumbent upon the defendant to prove otherwise. Beck v. Washington, 369 U.S. 541, 82 S.Ct. 955, 8 L.Ed.2d 98 (1962); United States v. Robbins, 500 F.2d 650 (5th Cir. 1974). This court stated in United States v. Cashio, 420 F.2d 1132 (5th Cir. 1970) that prejudice will not be presumed but that the defendant has the burden of proving prejudice by a preponderance of credible evidence. This burden must be sustained "not as a matter of speculation but as a demonstrable reality." Beck v. Washington, supra. Noe has fallen far short of rebutting the presumption of impartiality. The district court did not err in denying the motion for a new trial based upon the allegation of juror bias.

Appellant Hutcheson also cites as error the alleged bias of juror Cash as to appellant Noe. For the reasons already given, inter alia, his argument is not persuasive.

III. DENIAL OF MOTIONS FOR SEVERANCE, MISTRIAL, AND DISMISSAL

Appellants Wayman, Noe, Moore, and Hutcheson contend that the trial court erred in denying their various motions after the witness J. Wayne Schilling testified that he had had dealings with Wayman and a company called Franchise Funding International but that he had never had any contact with Allied Mortgage. ⁴ Defendant Shaffer's attorney moved for a severance on the ground that the nature of the case (fifty-three counts, sixteen named defendants) was too complicated to allow a fair trial. Defendants Fitzpatrick and Donahue joined in this motion and added that, in the alternative, the motion be for a mistrial. Defendant Smith joined in the motion and added the additional ground of mutually harmful defense tactics by different defendants. Appellant Hutcheson moved for a dismissal on the ground that the indictment improperly joined a number of conspiracies in one count charging a single conspiracy. Defendants Fitzpatrick and Donahue amended their motion to include this general ground. Appellant Noe adopted all these motions. The trial court denied all these motions.

Under Rule 8, Federal Rules of Criminal Procedure, defendants may be joined in the indictment and at trial if 'they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses.' Once the requirements of Rule 8 have been satisfied, it is then within the sound discretion of the trial court whether the defendants will be tried separately or jointly. The appellant has a heavy burden of showing prejudice when a severance is not granted. United States v. Iacovetti, 466 F.2d 1147 (5th Cir. 1972); United States v. Harris, 441 F.2d 1333 (10th Cir. 1971). The mere fact that the conspiracy involved multitudinous and complex transactions is no reason for this court to reverse the denial of the motion to sever or the alternative motion for a mistrial, or the motion to dismiss.

The testimony of Schilling and that of the later witness Anna Harrison was evidence pointing toward a conspiracy other than that charged in the indictment. However, appellants' reliance upon Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946) is misplaced. There the Supreme Court held that the government could not prove one overall conspiracy by showing that there were eight smaller conspiracies; the only nexus among the smaller conspiracies was that one man participated in all of them. The case before us shows at most simply a variance from the indictment, in that there was evidence of a smaller conspiracy in addition to the bigger, overall conspiracy. Proof of multiple conspiracies does not automatically constitute a fatal variance from a single offense as charged in the indictment. 'The true inquiry . . . is not whether there has been a variance of proof, but whether there has been such a variance as to 'affect the substantial rights' of the accused.' Berger v. United States, 295 U.S. 78, 82, 55 S.Ct. 629, 630, 79 L.Ed. 1314, 1318 (1935). This point was recognized by the Court in Kotteakos: 'Leeway there must be for such cases as the Berger situation and for others where proof may not accord...