United States v. Holt, 6987.
| Decision Date | 13 January 1940 |
| Docket Number | No. 6987.,6987. |
| Citation | 108 F.2d 365 |
| Parties | UNITED STATES v. HOLT. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Homer Elliott, of Martinsville, Ind., and William H. Dieterich, of Beardstown, Ill., for appellant.
Val Nolan, U. S. Atty., and B. Howard Caughran and Paul A. Pfister, Asst. U. S. Attys., all of Indianapolis, Ind., for appellee.
Before EVANS, SPARKS, and KERNER, Circuit Judges.
The appellant and ten others were jointly indicted for a conspiracy to defraud the United States under Section 37 of the Criminal Code (R.S. § 5440; 18 U.S.C.A. § 88). The case was tried to a jury. At the close of all the evidence, the court sustained motions for a directed verdict as to three defendants. The jury returned verdicts of not guilty as to two of the defendants, verdicts of guilty as to appellant and defendants George Mix, Carl J. Broo, George H. Morrow, Mel Good and Lincoln F. Record, and judgments were rendered upon the verdicts. Appellant was sentenced to imprisonment for a term of fifteen months and ordered to pay a fine of $5,000. He alone appeals.
The indictment in substance charged that the Works Progress Administration of the United States government was engaged in the conduct and operation of approved projects in Kokomo, Indiana, for which the United States government employed and paid for the services of laborers, truck drivers, foremen, and others; that Holt, Mix, Broo, Morrow and Good were officers and employees of the city of Kokomo and, as such officers and employees, had charge and supervision of the buying of materials for the city of Kokomo and the payment therefor, with moneys of the city; that Record was an employee of the Works Progress Administration and had charge and supervision of said laborers employed and paid by the Works Progress Administration; that it was a part of the conspiracy that Mix would purchase and acquire brick structures in Kokomo, whereupon, without lawful authority so to do and with the use of the services and labor of said laborers who were in the employ of and being paid by the United States to conduct and operate the approved Works Progress Administration projects, the defendants would cause said structures to be demolished and razed, and would cause the bricks thereof to be removed, hauled to other sites and cleaned, processed and made marketable as used brick, it being a part of the conspiracy, by the use of the services of said laborers of the Works Progress Administration, to increase materially the market value of said bricks over and in excess of the market value thereof while they formed a part of said structures; that when said bricks were cleaned and made marketable, the defendants would cause the city of Kokomo to purchase them from Mix at prices materially in excess of their value before they had been cleaned.
The indictment further charged that as part of the conspiracy the defendants, without lawful authority so to do, and notwithstanding that said laborers were in the employ of and were being paid by the United States government to work exclusively on and to operate the approved Works Progress Administration projects, diverted said laborers from said projects and used their services on the aforesaid enterprises. The indictment also alleged as overt acts Holt's approval of the claims filed with the Board of Public Works.
In his appeal appellant asserts and urges consideration of the following assigned errors: (1) denying his motion for a directed verdict of not guilty; (2) overruling motion for a new trial; (3) improper admission of evidence; and (4) prejudicial remarks of the District Attorney.
Appellant was the Mayor, Good city clerk, Morrow city engineer and Broo city attorney, for the city of Kokomo. Mix was assistant city engineer and Record was a Works Progress Administration project supervisor on street projects. Neither appellant, Good, Morrow, Broo nor Mix testified at the trial.
There were four projects sponsored by the city of Kokomo and accepted by the Works Progress Administration. The projects were constructed with labor furnished by the Works Progress Administration and included the relaying and correcting of grade lines, the rebuilding of manholes of storm and sanitary sewers, the repairing and the improvement of public streets and alleys.
According to the project proposals, Morrow (the city engineer) prepared the plans and specifications, and also superintended the work performed by employees of the Works Progress Administration. Among other things, the projects called for large quantities of brick, and these materials the city of Kokomo furnished.
In turn the city was required to purchase the brick necessary for the projects, and the purchases were made in this way. Mix (the assistant engineer) would buy certain brick buildings from owners on the following terms: he would raze the buildings, remove the bricks, and pay $4 per thousand for them. On one occasion, while negotiating for the purchase of bricks, Mix refused to accept an offer of cleaned bricks at $7 per thousand, stating that he could buy uncleaned bricks at $4 per thousand. This statement is interesting in view of the fact that the city of Kokomo made its purchase through Mix at $10 per thousand.
The task of razing and removing the bricks was done by the Works Progress Administration employees under the direction and bidding of Record (the Works Progress Administration project supervisor). Record, formerly an employee of the city of Kokomo, had accepted the job of supervisor. Although he worked under and was paid by the Works Progress Administration, he continued to receive $75 per month from the city, the $75 claim purporting falsely to represent rental on equipment used. It is to be noted that no sooner had Record been discharged by the Works Progress Administration than he was employed again as an employee of the city by the appellant (the mayor).
After the bricks were razed and removed, they were cleaned and made marketable, again by Works Progress Administration labor and consequently at the expense of the United States. Then the bricks were sold by Mix to the city at $10 per thousand. To obtain payment for the bricks, it was necessary for Mix to file claims with the city. First, the claims were sworn to before Good (the city clerk). Then, the claims were presented to the Board of Public Works for approval.
As soon as the Mix claims were approved in writing by the Board of Public Works, consisting of the appellant (the mayor) and his co-defendants Broo and Morrow (city attorney and engineer, respectively), they were paid. The testimony of Thomas G. Heady is significant in connection herewith. Mix had asked to use Heady's name in the filing of claims. According to Heady, Mix gave the following reason for the request to use Heady's name: the Board of Public Works had warned Mix that it was dangerous to sign the brick claims in Mix's name; the Board had suggested, therefore, that Mix should file and sign the claims in another name, so that the public would not suspect anything.
Denying His Motion for a Directed Verdict of Not Guilty.
This assignment of error in effect raises the question whether there was any substantial evidence to incriminate appellant in a conspiracy to defraud the United States as charged in the indictment, warranting submission of the case to the jury.
At the outset we are met with the contention that the indictment charges a conspiracy to commit an offense against the United States in violation of Section 9 of the Emergency Relief Appropriation Act of 1935 (49 Stat. 118). We cannot agree. In our opinion the indictment charges a conspiracy to...
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