United States v. McCrae, Crim. No. 71-684.

• Decision Date: 21 July 1972
• Docket Number: Crim. No. 71-684.
• Citation: 344 F. Supp. 942
• Parties: UNITED STATES of America v. John McCRAE.
• Court: U.S. District Court — Eastern District of Pennsylvania

344 F. Supp. 942

UNITED STATES of America v. John McCRAE.

Crim. No. 71-684.

United States District Court, E. D. Pennsylvania.

July 21, 1972.

C. Oliver Burt, III, Asst. U. S. Atty., Philadelphia, Pa., for plaintiff.

David F. Maxwell, Charles B. Burr, II, Philadelphia, Pa., for defendant.

OPINION

LUONGO, District Judge.

John McCrae was convicted by a jury on two counts charging (1) concealment, in a document required by the Welfare and Pensions Plan Disclosure Act, of the fact that a one million dollar Certificate of Deposit (C/D), issued by Provident Bank and owned by the Carpenters Health and Welfare Fund, had been loaned for use as collateral for a loan by Provident Bank to a Vanderbilt Corporation, for which a fee of $10,500 had been paid to the Fund; and (2) embezzlement of the $10,500 fee, property of the Fund, in violation of 18 U.S.C. § 1027 and § 664.

There is now before the court defendant's motion for new trial, in support of which three grounds are asserted:

1. The government denied defendant due process of law by withholding evidence which would have been favorable to defendant;

2. The court permitted improper cross-examination of a character witness; and

3. Government counsel violated defendant's Fifth Amendment privilege against self-incrimination by improper comment on defendant's failure to testify.

The evidence, viewed in the light most favorable to the verdict winner, the government, disclosed the following facts:

Two employee benefit plans (including the Health and Welfare Fund, hereinafter Fund) were set up by employer building contractors and the Carpenters' Union. The plans were administered by four Trustees, two representing the employer building contractors and two representing the Union. McCrae was employed by the Trustees as the salaried supervisor of the plans responsible for day to day operations and supervision of other employees of the plans who kept the books and records of receipts and disbursements.

On January 30, 1969, pursuant to arrangements earlier made, the Vanderbilt Corporation borrowed from the Fund a one million dollar C/D for use as collateral for a loan and caused a check of Systems Capital Corporation in the amount of $10,500 to be delivered to representatives of the Fund as the fee for use of the C/D. McCrae was present at the Provident Bank when the C/D was turned over by two of the Trustees of the Fund. The $10,500 check was delivered either to McCrae or jointly to McCrae and one of the Trustees.

Under the terms of the plans, bank accounts could be opened only upon authorization of all four Trustees. On March 20, 1969, an account entitled "Investment Fund" (an account not authorized by the four Trustees) was opened at City Bank with the deposit of the $10,500 check. The account card bore the signature conceded to be that of John McCrae. There was no activity in the account until June 13, 1969 when it was closed by the cashing of a check drawn on that account bearing the alleged signature of John McCrae as maker and drawn to the order of a Joseph Gallagher. There were only two Joseph Gallaghers who were members of the Carpenters' Union at the time in question and each appeared and testified that he had not received the proceeds of that check.

James O. Whitall, who was the president of City Bank, testified that McCrae had approached him about opening an account as a means of diverting the $10,500 fee from the Fund. Whitall testified that although he knew it was illegal, he cooperated with McCrae because he didn't want to lose the Carpenters' Union business. He arranged to withhold statements for the account and he (Whitall) was present in the bank on June 13, 1969 when the check closing the account was cashed. Whitall verbally authorized the cashing of the check and when he did so, he saw McCrae standing at the teller's window.

There was no record in the books of the Fund of the loan of the C/D or of the fee earned for the loan. Such transactions should have been recorded in the books and, if recorded, would have been noted by the Fund's auditor in his report since such loan would have been beyond the powers of the Trustees under the terms of the plans. The forms required to be filed under the Welfare and Pension Plans Disclosure Act were prepared from the books and records of the Fund and failed to disclose the transaction or the fee.

DISCUSSION

The three grounds asserted by defendant in support of the motion for new trial will be discussed separately. Considered separately or in combination, they do not merit a new trial and the motion will therefore be denied.

1. Withholding of evidence favorable to defendant.

This contention is made under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). Defendant argues that the government knew or could have ascertained that City Bank was equipped with two surveillance cameras; that the cameras operated during the Bank's working hours in alternating thirty second cycles; that the film for June 1969 does not picture McCrae in the Bank, and more specifically, does not picture him standing at the window of teller No. 3 (whose symbol appears on the cashed check); and that the film for March 1969 "does not picture defendant going to or coming from Whitall's office or standing at any of the teller's windows where he allegedly deposited the check in question on March 20, 1969." (Defendant's Brief, p. 5)

In Brady v. Maryland, Brady and a companion, Boblit, were convicted of murder in separate trials and sentenced to death. At Brady's trial, he took the stand and admitted participation, but claimed that Boblit did the actual killing. Brady's counsel, in summation, conceded that Brady was guilty of murder in the first degree and sought only to avoid the death penalty. Prior to trial, Brady's counsel had asked the prosecution to permit him to examine Boblit's extra-judicial statements. Several were shown, but one in which Boblit admitted that he had done the actual killing was withheld. The Supreme Court held that

". . . the suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution." 373 U.S. 83, 87, 83 S.Ct. 1194, 1196.

The rule of Brady was not violated in the instant case. The government points out, in answer to defendant's contention, that several months prior to trial, six photos developed from film from bank surveillance cameras for June 1969 depicting McCrae in City Bank were shown to defendant's counsel.¹ The government asserts that it was not in possession of, nor was it interested in, any photos or developed film for March 1969. The film was then in its undeveloped state in the custody of Federal Deposit Insurance Company, receiver for City Bank. In view of the other evidence which the government had, it made no effort to obtain the March film. It is the prosecuting attorney's position that he had disclosed the fact that bank surveillance film existed and revealed all he knew and was under no obligation affirmatively to ascertain what said film did or did not show.

There is no contention by defendant that there was a knowing withholding of information by the prosecution here² as there was in Brady. Defendant's position really is that the government is under the affirmative obligation to investigate all possible sources of information, exculpatory as well as incriminatory, and to reveal to defendant anything, including that of a negative nature, that could conceivably be of benefit to defendant. This, in my view, goes far beyond the requirements of Brady. Defense counsel had been advised of the existence of surveillance film. There was available to him, just as there was to the government attorney, the opportunity to investigate to determine what such films disclosed or failed to disclose.

At oral argument and in the "Reply Brief in Support of Defendant's Motion for New Trial," replacement counsel has suggested that if the court should conclude, as it has, that the prosecuting attorney had discharged the government's obligation by revealing the existence of bank surveillance films, then defendant's trial counsel was incompetent for failing to investigate further. This argument demonstrates once more the keenness of hindsight, but hindsight is not the measure of counsel's competence. As was stated by the late Judge Freedman in Moore v. United States, 432 F.2d 730, 736 (3d Cir. 1970):

". . . the standard of adequacy of legal services as in other professions is the exercise of the customary skill and knowledge which normally prevails at the time and place.

A retrospective examination of a lawyer's representation to determine whether it was free from any error would exact a higher measure of competency than the prevailing standard." (Footnotes omitted).

The court is able to attest, from the first hand experience of having had to consider and rule upon trial counsel's pretrial motions, that defendant's trial counsel was most competent and diligent in the pretrial preparation of defendant's case.

More important, from the standpoint of the merit of counsel's Brady contention, I have serious doubt as to the evidential value of the film. In the first place the films were apparently not kept by specific day and date, the rolls of film being replaced every few weeks as it was thought they were needed. They did not operate constantly throughout the work day; they did not cover all parts of the Bank; and there is an indication that if the cameras were not shut off at night, as sometimes happened, the film ran out before the time for scheduled replacement with the result that the cameras sometimes operated without film. In the second place, McCrae's presence in the Bank was not crucial to either of the counts. The first count, failure to disclose information required by the Welfare and Pension Plans Disclosure Act, was...