United States v. Tremont, 7555.

• Decision Date: 12 October 1970
• Docket Number: No. 7555.,7555.
• Citation: 429 F.2d 1166
• Parties: UNITED STATES of America, Appellee, v. Jerome TREMONT, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

429 F.2d 1166 (1970)

UNITED STATES of America, Appellee, v. Jerome TREMONT, Defendant, Appellant.

No. 7555.

United States Court of Appeals, First Circuit.

June 29, 1970.

Certiorari Denied October 12, 1970.

James D. St. Clair, Boston, Mass., with whom William E. Bailey and Hale & Dorr, Boston, Mass., were on brief, for appellant.

Joseph A. Lena, Asst. U. S. Atty., with whom Herbert F. Travers, Jr., Boston, Mass., was on brief, for appellee.

Before ALDRICH, Chief Judge, McENTEE and COFFIN, Circuit Judges.

Certiorari Denied October 12, 1970. See 91 S.Ct. 63.

McENTEE, Circuit Judge.

Defendant Tremont was convicted for violating 18 U.S.C. § 1010 by "making and causing to be made" a false statement in an FHA loan application. The single count of the indictment is reproduced in the margin.¹

It is undisputed that on April 15, 1968, Gertrude Collins,² in the presence of the defendant, signed an FHA application at the Lynn Safe Deposit and Trust Company. The application represented that the loan proceeds would be used to remodel the kitchen and bedroom of her house. Defendant's principal contention on appeal is that the government failed to sustain the burden of proving that a false statement was made, because when Miss Collins executed the application she fully intended to use the money for the designated purpose. Absent proof of this essential element, it is argued, the conviction cannot stand. Carvahlo v. United States, 113 U.S.App. D.C. 253, 307 F.2d 394 (1962). This theory overlooks critical facts brought out at trial.

On April 12, Tremont paid a visit to the bank and met with Kenneth Smith, the loan officer. At that time, according to Smith's testimony, Tremont filled out the FHA form, including the portion stating the purpose for which the loan was to be used. When Miss Collins went to the bank on April 15, all she did was sign her name to the completed form.³

While very possibly Miss Collins did not read the paper she signed, in our opinion the jury could reasonably find that in point of fact she did not have the affirmative intention to use the proceeds of the loan for the purposes specified.⁴ Although we do not reject this as a ground for our decision we rely principally on other grounds.

We find that the defendant's actions fit precisely within the words of the statute which applies to anyone who "for the purpose of influencing in any way the action of the Department of Housing and Urban Development makes * * * any statement knowing the same to be false, * * *" The fact that the defendant was not the borrower is of no consequence. Ross v. United States, 180 F.2d 160, 164 (6th Cir. 1950); Hartwell v. United States, 107 F.2d 359, 361 (5th Cir. 1939).

In Ross, the defendants worked a swindle by approaching homeowners and convincing them to allow siding to be placed on their homes as a model on the understanding that they would be paid commissions for every sale made to their neighbors due to their cooperation. Each family to whom the pitch was successfully made was sworn to secrecy, enabling the defendants to gull many people in the same community. The applicants were persuaded to sign blank FHA forms and promissory notes, which were later filled in with false information to make their financial situation appear more attractive. The notes were discounted by a credit corporation and insured by the FHA.

The court rejected the defense that the statute applies only to borrowers, on the ground that such a narrow construction would defeat the objectives of the Act. We see no material distinction between obtaining a signature through duplicity and then adding false information, as in Ross, and making a false statement prior to getting the signature, as was done here.⁵

Defendant argues that the statement contained in the loan application that the proceeds would be used to remodel the kitchen and bedroom could not be proved false merely because the money was used for other purposes as well. But there was ample evidence on which the jury could find that insofar as the defendant was concerned, the statement was indeed false.

Smith testified that the defendant told him he needed money to buy into a business. They had discussed the matter in the spring of 1968, but the bank could not help him because he lacked investment capital. Smith had the authority to approve FHA loans, and they discussed the possibility of the defendant's obtaining such loans. In April the defendant called Smith to tell him that he had someone he thought would qualify. That person turned out to be Miss Collins, and the loan was made on April 15. In exchange for his helpfulness, Smith testified there was a possibility that he would go to work for the defendant's new business.

As soon as the defendant and Miss Collins left the bank she endorsed the check over to the New Boston Realty Trust, of which the defendant was trustee. Prosecution witnesses traced disbursements from this account over a two week period, and testified to the various purposes, unrelated to home improvements, for which the money was spent.

The defendant contends that in due course work was subsequently done on Miss Collins' house. This was done so long after the event, and so much less than had been indicated, that the jury was clearly warranted in rejecting it as proof of the intent existing when the paper was signed. In light of this record, we deem the defendant's contention to be without merit.

Lastly, defendant argues that the failure of the court to give his requested instruction that § 1010 does not require a loan applicant to segregate the loan proceeds from his personal funds was prejudicial, when coupled with the evidence tracing the disposal of the loan proceeds for personal...