United States v. Sinclair

• Decision Date: 22 April 1977
• Docket Number: Crim. A. No. 76-56.
• Citation: 433 F. Supp. 1180
• Parties: UNITED STATES of America, Plaintiff, v. Phillippe Andre SINCLAIR, Defendant.
• Court: U.S. District Court — District of Delaware

433 F. Supp. 1180

UNITED STATES of America, Plaintiff, v. Phillippe Andre SINCLAIR, Defendant.

Crim. A. No. 76-56.

United States District Court, D. Delaware.

April 22, 1977.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

James W. Garvin, U. S. Atty., and Jack Beam, Asst. U. S. Atty., Dept. of Justice, Wilmington, Del., for plaintiff.

Morton Richard Kimmel and Paul H. Spiller of Kimmel & Spiller, Wilmington, Del., for defendant.

MURRAY M. SCHWARTZ, District Judge.

Phillippe Andre Sinclair ("defendant") was charged with conspiracy to violate the Federal Mail Fraud Statute, 18 U.S.C. §§ 371, 1341, and the federal statute prohibiting fraudulently inducing persons to travel in interstate commerce as part of a scheme to defraud, 18 U.S.C. §§ 371 and 2314.¹ The defendant also was charged with violations of the substantive offenses described in 18 U.S.C. §§ 1341, 2314. Subsequent to his conviction on all counts submitted to the jury, the defendant moved for judgment of acquittal or, alternatively, a new trial.² Those motions presently are before the Court.³

I. The Indictment

On April 28, 1976, the Grand Jury returned a six count indictment against the defendant and Charles Dobson Delcher ("Delcher").⁴ The criminal allegations centered around the purchase of a recreation resort in Maryland, known as Great Oaks, by the defendant and two others, J. Wesley Blackwell ("Blackwell") and Thomas Mallan ("Mallan").

The conspiracy count (Count VI) of the indictment alleges that the defendant and Delcher conspired to use the mails to execute a scheme to defraud Blackwell and Mallan. Further, the Count alleges that they conspired to induce Mallan and Blackwell to travel in interstate commerce as part of a scheme to defraud. The scheme to defraud described in the indictment consists of the defendant inducing Blackwell and Mallan to invest more than $22,000 each toward the purchase of Great Oaks. Allegedly, as his role in this scheme, the defendant falsely represented his financial resources and his experience as a manager of a resort area. Delcher's participation in the scheme allegedly was to use his position as Vice-President of Farmers Bank, a Delaware bank, to transfer the money from Blackwell and Mallan to the defendant and to remain silent about any financial problems the defendant had had with Farmers Bank. The indictment alleges as overt acts in furtherance of the conspiracy numerous meetings and conversations between the defendant and Blackwell and Mallan.

The remaining counts in the indictment concern the substantive offenses. Count I alleges that on or about October 10, 1972, the defendant in furtherance of the scheme to defraud placed a letter in the mails addressed to Thomas Mallan. Count II alleges that on or about October 17, 1972, the defendant in furtherance of the scheme to defraud caused a letter to be placed in the mails addressed to the defendant. Count III alleges that on or about October 25, 1972, the defendant and Delcher in furtherance of the scheme caused a letter to be placed in the mails addressed to Blackwell. Finally, Count V alleges that on or about November 4, 1972, the defendant and Delcher in furtherance of the scheme induced Blackwell and Mallan to travel from the State of New York to the State of Maryland.

The trial of the defendant consumed 13 days between September 27 and October 18, 1976.⁵ At the close of the Government's case, the Court dismissed Count IV of the indictment on motion of the United States.⁶ Motions for judgment of acquittal on the remaining counts were denied.⁷ On October 18, 1976, the jury found the defendant guilty on the remaining five counts.⁸

II. Motion for Judgment of Acquittal

As noted above, the defendant has moved for a judgment of acquittal on each of the counts on which he was convicted. Rule 29, F.R.Crim.P. establishes one ground for a judgment of acquittal: "the evidence is insufficient to sustain a conviction . .." See United States v. Wolfson, 322 F.Supp. 798, 806 (D.Del.1971), aff'd 454 F.2d 60 (3d Cir.), cert. denied 406 U.S. 924, 92 S.Ct. 1792, 32 L.Ed.2d 124 (1972). The elements necessary for conviction are different for each of the statutory violations alleged in the indictment. The requirement common to all is that the Government prove beyond a reasonable doubt the existence of a scheme to defraud. In examining whether there was sufficient evidence for a jury to find a scheme to defraud, it is necessary to initially summarize the evidence introduced at trial.

A. The Facts

In the spring of 1972, the defendant contacted Blackwell, a former prep school classmate.⁹ Over the next several months, the defendant spoke with Blackwell on several occasions. In the course of these conversations, the defendant described himself as the successful owner and operator of several businesses, including a computer programming business and a Delaware hotel.¹⁰ The defendant also stated on several occasions that his income was in "six figures."¹¹

Late in the summer of 1972, the defendant informed Blackwell that the Great Oaks resort was for sale and he invited Blackwell to view the property.¹² Mrs. Blackwell testified that early in September she received an envelope in the mail containing an appraisal of the Great Oaks property. A few days later, the defendant telephoned her to ask if the appraisal had been received, and to discuss the property and investment opportunity with her.¹³

Early in October, 1972,¹⁴ the Blackwells traveled to Wilmington where they were met by the defendant and driven to Great Oaks. During the weekend, the defendant introduced the Blackwells to the owner of the property, Frank Russell ("Russell"), and a real estate agent, Phillip Widing ("Widing"). The Blackwells toured the property with the defendant and Widing and discussed the possible development of Great Oaks.¹⁵

At one point, Blackwell expressed concern about his ability to oversee an investment in Maryland while working as a stock salesman in New York. He was reassured by the defendant that he (the defendant) had hotel experience derived from his operation of a hotel he owned in Puerto Rico. Moreover, the defendant stated that if difficulties arose in connection with the operation of Great Oaks, he would transfer the manager of his Puerto Rico hotel to Great Oaks.¹⁶

On his return to New York, Blackwell discussed his trip to Great Oaks with Mallan, a close friend. Mallan on the next day, October 9, 1972, traveled to Wilmington, was met by the defendant and driven to Great Oaks. During the trip to Great Oaks, the defendant repeated to Mallan many of the representations concerning his business background that he had made to Blackwell, including that he owned a computer business, the Deer Park Hotel in Newark, Delaware, and the Golden Beach Hotel in Puerto Rico and that his net worth was several million dollars. As with Blackwell, the defendant showed Mallan around the property and introduced him to Russell and Widing. The defendant emphasized his desire to form a partnership to purchase the property and his experience in hotel management.¹⁷

Two days after Mallan visited Great Oaks, Blackwell and he received letters addressed to "Wes and Tom," each a duplicate of the other.¹⁸ The letter described in rough outline the defendant's suggestions for setting up a corporation to operate the property and for the division of stock. The defendant also referred to a conversation he had had with Mallan regarding strategy in dealing with the owner Russell and asked Mallan to relate the details to Blackwell.

Mallan and his wife drove to Great Oaks on the following Saturday (October 14, 1972) to look at the property. The defendant was not there and the Mallans did not stay overnight.¹⁹

The next weekend (October 21-22, 1972) Blackwell and his wife and Mallan and his wife went to Great Oaks. The two men met with the defendant and discussed the proposed partnership and division of stock based on the "Wes and Tom" letter. The defendant reassured Mallan and Blackwell of his vast financial holdings and extensive experience in running hotels. During the weekend, Blackwell and Mallan also met Delcher for the first time.²⁰

The defendant introduced Delcher as his personal banker and friend. The two gave the outward impression that Delcher and the defendant were good friends, more than just business acquaintances. Delcher toured the property with the three men and emphasized the investment opportunity it presented. At one point, Mallan asked Delcher about the defendant's reputation. Delcher vouched for the defendant's reputation and his good credit standing with the Farmers Bank. The remainder of the weekend was spent discussing the purchase and operation of Great Oaks and the partnership.²¹

A few days after the weekend meeting, the defendant met with Blackwell and Mallan in New York.²² After further discussion of the purchase of Great Oaks and the further representation by the defendant of his wealth and hotel experience, the defendant suggested that they would need $50,000 as operating capital to run Great Oaks ($16,666 from each partner) and $6,000 from each of them to be placed in an escrow account as the down payment for Great Oaks. Subsequently, Mallan and Blackwell each gave the defendant a check for approximately $16,666 payable to the defendant and a check for $6,000 payable to Sinwellan Corporation.²³ Mallan testified that he left the date on his checks blank, but he was sure he completed them on October 25, 1972 (Wednesday following the weekend meeting at Great Oaks).²⁴ Blackwell's cashier's checks, issued by Morgan Guaranty Trust, are also dated October 25, 1972. (GX 39, 40)

The defendant received from each authorization to act as their agent in the purchase of Great Oaks.²⁵ Both men testified that although the authorizations were dated October 17, they actually were drafted about a week after that and were back dated. The apparent purpose was to provide proof to Russell that ...