U.S. v. Whittington

• Decision Date: 27 February 1986
• Docket Number: No. 84-4813,84-4813
• Citation: 783 F.2d 1210
• Parties: 20 Fed. R. Evid. Serv. 171 UNITED STATES of America, Plaintiff-Appellee, v. Richard A. WHITTINGTON, Richard Wolfe and W. Lewis DeMoss, Jr., Defendants- Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1210

783 F.2d 1210

20 Fed. R. Evid. Serv. 171

UNITED STATES of America, Plaintiff-Appellee, v. Richard A. WHITTINGTON, Richard Wolfe and W. Lewis DeMoss, Jr., Defendants- Appellants.

No. 84-4813.

United States Court of Appeals, Fifth Circuit.

Feb. 27, 1986.

Rehearing Denied April 2, 1986.

Bobby D. Sutton, Shreveport, La., for Whittington.

Richard Wolfe, pro se.

McNulty, O'Connor, Stakelum & Anderson, James J. O'Connor, New Orleans, La., for Wolfe.

W. Lewis DeMoss, Jr., pro se.

Wellborn Jack, Jr. (Court-appointed), Shreveport, La., for W. Lewis DeMoss, Jr.

Joseph S. Cage, Jr., D.H. Perkins, Jr., Asst. U.S. Attys., Shreveport, La., for the U.S.

Appeals from the United States District Court for the Western District of Louisiana.

Before RUBIN, RANDALL, and WILLIAMS, Circuit Judges.

ALVIN B. RUBIN, Circuit Judge:

The defendants were convicted in a bench trial of various offenses revolving around the alleged submission of a false claim for benefits under the federal Dairy Production Stabilization Act of 1983. In this appeal, they contend that the district court improperly admitted in evidence a document crucial to the government's case, the evidence was insufficient to support their conviction, and the prosecution was guilty of misconduct in threatening to indict potential defense witnesses for perjury with the result that the witnesses claimed the protection of the fifth amendment and refused to testify. We hold that the district court acted within its discretion in admitting the document, the evidence was sufficient to support the conviction of each of the three defendants, and the prosecution did not violate the defendants' rights by its actions. We therefore affirm the judgment of conviction.

I.

The Dairy Production Stabilization Act ¹ was enacted in 1983 to subsidize qualifying milk producers that contracted with the federal government to reduce milk production. To qualify for the subsidies, a milk producer had to be in production as of November 29, 1983, and establish a marketing history of production in the 1982 calendar year or earlier. ² Louisiana Pacific Resources, Inc., a company tht had been engaged in the dairy business under the name of Riverland Dairy, received payments totaling $139,741.70 under the Act. One of the defendants, Richard C. Whittington, was president of that company and a member of its board of directors; another, Lewis DeMoss, a CPA, was a member of its board and employed part-time as its comptroller. The third defendant, Richard Wolfe, was an entrepreneur who had not been connected previously with the company.

By August 1983, before the Act was passed, Louisiana Pacific's dairy operations had become increasingly unprofitable and its financial condition was critical. The company owed a substantial amount of money to Bossier Bank and Trust Company, and was badly in debt to other creditors. Louisiana Pacific's chief asset was 1,600 acres of land that it used in its dairy operation, and Bossier Bank began advising, indeed, urging, Whittington to sell the dairy property.

Wolfe became interested in buying the property for real estate development. His interest hinged, however, on averting foreclosure by the first mortgagee, so that the mortgage, which bore an attractive 9% interest rate, could be assumed, and on satisfying the second mortgage in favor of the Farmers Home Mortgage Administration for an amount less than the balance due. Whittington and Wolfe began negotiations in the summer of 1983. Meanwhile, it was imperative for Louisiana Pacific to satisfy its creditors and to continue its operations while the negotiations with Wolfe and its mortgagees continued. Louisiana Pacific hoped in part to increase revenues by qualifying for payments under the milk diversion program that was then pending in Congress. Although passage of the act was expected, exactly who would receive payments and on what basis was not known until after November 1983, the month of its enactment. Whether Louisiana Pacific was the operator of the dairy on November 29 later became the determining factor in its eligibility for government benefits, but no one then knew that it would be.

Bossier Bank was pressing for progress in the negotiations between Whittington and Wolfe. The defendants contend that, by August 1983, the negotiations had advanced to the point that they were jointly considering ways to continue dairy operations while the negotiations continued. Wolfe did not want to be a dairy operator, but was willing to cooperate with Whittington to find a means to keep the dairy in business pending the sale. At the request of one of the defendants, a Shreveport lawyer had drafted a proposed commercial lease agreement. The defendants assert that this was for discussion only. After a weekend of negotiations, on September 9, 1983, Whittington, acting for Louisiana Pacific, and Wolfe, acting for a company named Triple Crown Farms of Louisiana, Inc., agreed upon a document confected by Wolfe's California lawyer, entitled "Addendum for Notification (sic) of Commercial Lease Agreement," which stated it was effective September 1, 1983.

The government contends that this document was intended to be and was a lease in law and in fact. The defendants maintain that this document was never intended to have legal effect, but represented only "an interim effort" to accommodate the competing interests of Wolfe, who wanted to buy land but not a dairy, and Whittington, who was under pressure from the bank to demonstrate progress in negotiations. They further contend that Wolfe agreed to execute the document only under several "suspensive" conditions, a type of condition that under Louisiana law prevents a contract from becoming binding unless the conditions are fulfilled. ³ The conditions were never fulfilled, they argue, and the lease was never consummated. Instead, Wolfe and Whittington agreed orally, they say, on or about September 1, 1983, that Triple Crown would manage Riverland Dairy for Louisiana Pacific.

The defendants maintain that Triple Crown continued to manage Riverland Dairy under the oral agreement until February or March, 1984, when a written management agreement was executed and backdated to reflect the management relationship purportedly in effect since September 1983. In the meantime, in January, 1984, Louisiana Pacific applied for subsidies with the United States Department of Agriculture. In April 1984, Louisiana Pacific received $139,741.40 in subsidy payments under the milk diversion program.

The government contends that Louisiana Pacific was ineligible to receive the milk subsidies because, although it could establish a base period of production for the 1982 calendar year, it was no longer in production on November 29, 1983, having by then leased the dairy to Triple Crown. Triple Crown was itself ineligible for the subsidies because it could not establish a 1982 base period. The defense asserted by the defendants was that Triple Crown had not leased the dairy, but was simply managing it for Louisiana Pacific who remained eligible for the milk subsidy benefits.

The government indicted each defendant on four counts. Count one charged DeMoss, Whittington, and Wolfe with a conspiracy in violation of 18 U.S.C. Sec. 371 (1982) to knowingly use false material statements and representations to the Bossier Parish Agricultural Stabilization and Conservation Service (ASCS) office, the United States Department of Agriculture, to influence that service regarding Louisiana Pacific's eligibility to participate in and to receive payments under the Dairy Production Stabilization Act in violation of 18 U.S.C. Sec. 1001 (1982), and also with knowingly making false and fraudulent claims with the United States Department of Agriculture in violation of 18 U.S.C. Sec. 287 (1982).

Counts two through four charged the defendants with the underlying substantive offenses. Count two charged them with the violation of 18 U.S.C. Sec. 1001 in willfully causing false statements and representations to be made to the Department of Agriculture purporting to establish the existence of a farm management contract rather than a lease agreement between Louisiana Pacific and Triple Crown. Count three charged all three defendants with presenting to that department a claim for payment of $139,741.70 on behalf of Louisiana Pacific, knowing that it was not actually engaged in milk production on November 29, 1983, in violation of 18 U.S.C. Sec. 287. And count four charged that all three knowingly and willfully made a false writing in the form of a letter dated April 18, 1984, representing the management contract to have been effective since September 1983, when they knew that Triple Crown was the lessee of Riverland Dairy at that time, in violation of 18 U.S.C. Sec. 1001.

The district court found DeMoss and Whittington guilty on all four counts, and Wolfe guilty on counts one and four.

II.

To prove that Louisiana Pacific was not the dairy's operator on November 29, but had by then leased the dairy to Triple Crown, the government sought to introduce the contested lease as Exhibit G-1. The multi-page document was itself a photographic copy of papers used to confect it, prepared in part by original typing and in part by assembling excerpts from other documents. It purported to bear the signatures of Whittington and Wolfe. Sharon Renee Pope, an employee of Bossier Bank, had signed the document as a witness. She identified her signature, as well as that of Murray Lynn, a vice president of the bank, who had also signed as a witness, Belinda Keener, another bank employee, and Richard Whittington. Although she had not actually seen Whittington sign G-1, she had signed the document as a witness because she was familiar with his signature. Belinda Keener had notarized the document. She testified that Lynn had brought G-1 to her and asked her to notarize it. While she said she did not remember whether she was present when the...