United States v. Makris

• Decision Date: 07 September 1973
• Docket Number: No. 72-2915.,72-2915.
• Citation: 483 F.2d 1082
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Michael A. S. MAKRIS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

483 F.2d 1082 (1973)

UNITED STATES of America, Plaintiff-Appellee, v. Michael A. S. MAKRIS, Defendant-Appellant.

No. 72-2915.

United States Court of Appeals, Fifth Circuit.

August 14, 1973.

Rehearing Denied September 7, 1973.

David H. Berg, Houston, Tex., for defendant-appellant.

Anthony J. P. Farris, U. S. Atty., James R. Gough, Asst. U. S. Atty., Houston, Tex., for plaintiff-appellee.

Before GOLDBERG, CLARK and RONEY, Circuit Judges.

CLARK, Circuit Judge:

Michael A. S. Makris was convicted in a non-jury trial on three counts of perjury in violation of 18 U.S.C. § 1621. On appeal Makris makes three primary contentions: (1) his sworn answers to questions propounded by an examiner for the Securities and Exchange Commission were not perjurious; (2) the evidence was insufficient to support the court's finding that he was sane at the time of the alleged offenses; and (3) he was improperly denied a hearing under 18 U.S.C. § 4244 to determine his competency to stand trial.

We find that the court below erred in denying Makris the full procedural rights mandated by 18 U.S.C. § 4244, and therefore remand for further proceedings in respect to the appellant's ability at the time of trial to participate in his own defense.¹ Regardless of the outcome of this required procedure, the remaining points raised ought to be reached now. If Makris was competent to stand trial, then such rulings end the cause. If he was not competent, the resolutions will guide any retrial that may be had.

PERJURY

In December 1970 Makris appeared before officers of the Securities and Exchange Commission to testify concerning his connection with National Bankers Life Insurance Company and Ling & Company. Information available to the Commission indicated that Makris had been a promoter of securities transactions involving the two companies under investigation. The first transaction involved Frank Sharp, a Houston banker, real estate developer, and principal party in both the Sharpstown State Bank and the National Bankers Life Insurance Company. The indications were that in contacts with Sharp, Makris had offered to obtain access to a large fund of bonds and other blue-chip securities of major American corporations which were reportedly held by bankers in Switzerland. The alleged scheme entailed the purchase of the securities, worth up to $200,000,000, for as little as ten percent of their face value. The SEC also thought that Sharp and Makris had contacted members of the Jesuit Order for the purpose of obtaining "seed" money for the purchase of the securities. The second and less grandiose transaction involved the purchase of control in a small West Virginia oil company, Red Rock Petroleum, and the fraudulent inflation of the market value of its stock in order to finance the acquisition of a Houston-based food processing company and restaurant chain.

Makris was convicted on three counts of perjury in regard to his testimony before the SEC.² He now contends that as to each count the evidence was insufficient to establish the knowing falsity of his sworn responses required to sustain a conviction under 18 U.S.C. § 1621.³

The basic element of the crime of perjury is that the challenged sworn testimony must be false. No one may be lawfully convicted of perjury where he gives an answer which is "literally accurate, technically responsive, or legally truthful." United States v. Wall, 371 F.2d 398, 400 (6th Cir. 1967); Smith v. United States, 169 F.2d 118, 121 (6th Cir. 1948). It is the obligation of the government to prove to a moral certainty that the defendant "purposefully misstated the fact knowing it to be false and untrue." Van Liew v. United States, 321 F.2d 674, 679 (5th Cir. 1963).

In Count I Makris was convicted on the basis of the following testimony concerning his business dealings with Frank Sharp:

Q. All right. In connection with — let\'s call it the securities aspect here — have you ever indicated to Mr. Sharp — we were talking about this trust fund, so to speak, of securities allegedly deposited by refugees of Nazi Germany — that you might be able to obtain an interest for him in this or to bring these securities to the United States for his benefit?

A. None at all.

Q. All right.

A. Not at all. Mr. Sharp, like I say, is a very quiet person.

Q. Yes.

A. I had no conversation with him about it.

Makris contends that the government failed to prove the falsity of his negative responses to the specific question propounded by the SEC interrogator. Precise testimony was adduced at the trial below showing that Makris had discussed with Frank Sharp a scheme to obtain an interest in securities Makris represented were deposited in European banks. However, the specific question which is the basis of Count I is whether Makris had promised to obtain an interest in, or to return to the United States, a particular group of securities, specifically characterized as ". . . this trust fund . . . of securities allegedly deposited by refugees of Nazi Germany. . . ." The immediately preceding portion of the transcript indicates that "this trust fund" refers to a group of securities ". . . deposited in Zurich, Switzerland."⁴

During his extensive trial testimony, Frank Sharp was asked at least twice whether Makris had ever identified the location of the fund of securities discussed. On each occasion Sharp stated that Makris had merely said that the securities were "on the Continent." Father Kennelly, who had been present on one occasion when Makris discussed the trust fund with Sharp, likewise testified that Makris described the securities as being "in Europe." Furthermore, Sharp testified that Makris characterized the beneficiaries or depositors of this trust fund not as refugees of Nazi Germany but as persons who lived "behind the Iron Curtain." The only other evidence bearing on whether Makris offered Sharp an interest in a Zurich-based trust deposited by refugees of Nazi Germany is the testimony of two agents, one a promoter and one a priest, whom Sharp directed to go to Switzerland to investigate the purported securities-trove. Jimmy Day, the promoter, testified that Sharp had directed him to go to Zurich to arrange for the purchase of stocks and bonds. Similarly, Father Alchediak testified that he had been instructed to travel to Geneva to assist Sharp and the Jesuit Order in obtaining securities which were held in Zurich. However, since neither Day nor Alchediak was able to testify directly to discussions between Makris and Sharp, their testimony is at best inferential evidence that Makris may have indicated to Sharp that the interest he was discussing was in a trust fund located in Zurich. Furthermore, neither Day nor Alchediak offered any evidence that Makris had discussed with Sharp a trust "deposited by refugees of Nazi Germany." To the contrary, both testified that when they received their instructions from Sharp to travel to Switzerland, they had been told that the trust property belonged to Makris' family. To further wrap the riddle in mystery Day testified that he was approached in Zurich by a man identifying himself as a member of the Jewish underground who warned him to have nothing to do with the securities because they had been stolen from Jews by the Nazis and that these instruments belonged to the people of Israel.

At trial the government recognized the weakness of its proof of the specific falsity of the Count I testimony. The government contended, however, that it merely needed to show that the defendant intended to make a false and misleading answer to the substance of the question propounded, towit: whether he had offered Sharp an interest in any securities trust similar to the one described. This approach would, of course, eliminate the variance between the exact terms of the SEC interrogatory and proof of specific dealings between Makris and Sharp. See United States v. Laite, 418 F.2d 576 (5th Cir. 1969). Laite was the primary case relied upon by the court below. However, it is clearly distinguishable.

In Laite the defendant was convicted of perjury in a wage and hour proceeding for responding negatively to the question "Did you ever tell anybody that you would . . . let them work more than eight hours and just pay them straight time?" This court held it to be legally immaterial whether or not Laite had used the exact words "more than eight hours" since the jury could reasonably infer that Laite had intended a false answer to the substance of the question, towit: whether he had told the workers that they could work "overtime" for straight time pay. In the case sub judice, Makris was indicted for a negative response to a question which described a particular trust fund with specific characteristics of ownership and location. The proof not only failed to pinpoint the location of the trust which Makris offered to Sharp, but also, more importantly, it described a different group of persons — communist interns — as the beneficiaries.

In argument to the court below, the government emphasized that the evidence strongly indicated that Makris had intended to deceive the Commission. The court obviously found this factor persuasive. In the interval between Makris' conviction and this appeal, the Supreme Court has unanimously rejected the suggestion that a defendant may be convicted for perjury solely on the basis of his deceptive intentions. In Bronston v. United States, 409 U.S. 352, 93 S.Ct. 595, 34 L.Ed.2d 568 (1973), the defendant had given a sworn answer which was deliberately misleading but literally true. The court held that regardless of the defendant's intention to deceive or mislead the examiner, there could be no perjury so long as the witness spoke the literal truth. In the present case, while the proof was clear that Makris had offered to obtain for Sharp some securities in Europe, the government failed to prove beyond a reasonable doubt that Makris uttered a falsehood when he stated that he had never offered...