# Petition — Bernstein v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_0084%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1976 - **Citation:** 429 U.S. 998 ## Text IN THE Supreme Court of the United States October Term, 1976 No. .. 7 5- ] v4 9 8 HARRY BERNSTEIN, ROSE BERNSTEIN, and EASTERN SERVICE CORPORATION, Petitioners, vs. UNITED STATES OF AMERICA, Respondent. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT FRANK G. RAICHLE, Attorney for Petitioners, 10 Lafayette Square, Buffalo, New York 14203, Tel. No. (716) 852-7587. Raicuiz, Bannina, Weiss & HaLrern, of Cownsel. BATAVIA TIMES, APPELLATE COURT PRINTERS ep A. GERALD KLEPS, REPRESENTATIVE 20 CENTER ST., BATAVIA, H. ¥. 14080 716-343-0487 R., Ci ERK PAGE SE. Suc ls Wa cdaee habs rena bkeccreencees 2 UE. 4-00'c o ode cugadaaheeh -o4n4n6s 6aeune ¥e ae 2 Questions Presented with Respect tu the False State- S RED sa nk Canc dues Ceasddes. Cds eee uneeeIE 2 Questions Presented with Respect to Briber, Couats.. 3 es rin one Ned ik onas dk ee. NN PORTE OTe ee er Free 5 PE AOU en boda ctUbnand feb bag hous ee on Cds ebnewes 6 With Respect to the First Question Presented ........ 10 With Respect to the Second Question Presented ...... 12 With Respect to the Third Question Presented ........ 14 With Respect to the Fourth Question Presented ...... 14 With Respect to the Fifth Question Presented ........ 15 Reasons for Granting the Writ ..................... 16 APPENDICES: —- A—Order denying rehearing for appellants arry Bernstein, Rose Bernstein and Eastern Ser- vice Corporation dated May 14, 1976 in case at bar... Al Appendix B—Order denying suggestion that the action be reheard in bane for appellants Harry Bernstein, Rose Bernstein and Eastern Service Corporation dated May 14, 1976 in case at bar .................. Bl Appendix C—Opinions of Second Circuit Court of I 0 0 bk bndes nk oe cus Senin oss Cl Appendix D—Opinion of Sixth Circuit in United States Vs MC GOR 6h o's coc nde eeucé on sx Beeeecents D1 Appendix E—Portion of District Court’s charge referred to in Judge Van Graafeiland’s dissenting Se ITED 06 6c Se ntndsnccchaeedneneens El ——— F—Judgment of Second Cireuit Court of ppeals in case at bar dated March 4,1976......... Fl Il. TABLE oF CasEs. 7 PAGE Giaccio v. Pennsylvania, 382 U.S. 397 (1966) ......... 14 Jacobs v. United States, 359 F.2d 960 (8th Cir. 1966) .. 12 Ue Wi Gs OE boon ipecccucsnssupecscces 20 Smith v. Goguen, 415 U.S. 566 (1974) ................ 14 United States v. Cohen Grocery, 255 U.S. 81 (1921) .. 14 United States v. George, 228 U.S. 14 (1913) ......... 11, 12 United States v. Guterma, 281 F.2d 742 (2d Cir.), cert. denied, 364 U.S. 871 (1960) ........... ccc eee eeeee . 10 United States v. Standard Brewery, Inc., 251 U.S. 210 EE Oe ered cue Oude Ci ace eke wel s canenes 12 Viereck v. United States, 318 U.S. 236 (1942) ......... 12 STaTuTEs. ee I 654550 0 0b sn'ed 0 d64 bh ch diese in 12 IS U.S.C.: SRR OQHEr rE peng re Dee hey | mami anni ae mye on ] Se Cac lund Gut Cena peek dee aa ad ee o 4 Meeks Ae 1,4 Dc auets Se eha cee ene neni wans anne ue lnees 5 SEE ec winkbe ds 5.ced ed Dicsis ben dibas tcchvunesbaekan 1,5 RN occcsed ik dda s 6 dante anecnes 1, 4, 5, 11, 12, 15, 16 a a a ee eee ee wa ct 2 RULEs. Rule 22(2) of the Rules of the Supreme Court of the REE SEE ER yeas» eee 2 CONSTITUTION. Sections 1 and 2 of Article IIT of the Constitution of the EE cb-cb bata Vena sehdeecceeasecwee sss: 2 ——— IN THE Supreme Court of the United States October Term, 1976 A IS a HARRY BERNSTEIN, ROSE BERNSTEIN and EASTERN SERVICE CORPORATION, Petitioners, vs. UNITED STATES OF AMERICA, Respondent. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT The petitioners Harry Bernstein, Rose Bernstein and Eastern Service Corporation pray that a writ of certiorari issue to review the judgment (App. F)* of the United States Court of Appeals for the Second Circuit dated March 4, 1976 affirming the judgments of conviction of said petitioners of the crimes of conspiracy, 18 U.S.C. § 371, bribery, 18 U.S.C. § 201 and 18 U.S.C. § 2, and false state- ment offenses, 18 U.S.C. § 1010 and 18 U.S.C. § 2. * Refer to Appendix F. 2 The petitioners petitioned the Court of Appeals for a rehearing, together with a suggestion for a rehearing in banc. The Court of Appeals denied petitioners’ application for a rehearing and a rehearing im banc on May 14, 1976. The order denying the petition for rehearing is printed as App. A. The order denying a rehearing im banc is printed as App. B. Opinion Below Neither the majority opinion, written by Judge Oakes of the Court of Appeals, nor the dissenting opinion of Judge Jan Graafeiland, has yet been officially reported. Judge Oakes’ opinion is printed in App. C. Judge Van Graafeiland’s dissenting opinion is included in App. C at (53 et seq. Jurisdiction The jurisdiction of the Supreme Court to review the judgment herein by writ of certiorari is conferred by Sec- tions 1 and 2 of Article ITI of the Constitution of the United States; 28 U.S.C. § 1254(1); and Rule 22(2) of the Rules of the Supreme Court of the United States. Questions Presented with Respect to the False Statement Counts: We preface our statement of the questions presented with the observation that the majority opinion of the Court be- low states that such questions are “troublesome” and that the dissenting opinion refers to a “series of erreurs in the District Court’s charge which fairly cry for revers. ” The questions presented include the following : 1. Whether it was error for the trial court to charge the Jury that it was a question of “fact” for the jury to deter- ot 3 mine if the FHA placed an affirmative duty on Eastern Service Corporation and its officers to exercise “proper eredit judgment” with respect to statements made in the mortgage insurance applications and to “insure that such statements were true.” (App. F.) 2. Whether it was error for the trial court in its charge to equate an alleged failure to exercise “proper credit judg- ment” with a false statement.* (App. E.) 3. Whether a statement by a mortgagee that “to the hest of its knowledge and belief” no information contained in a mortgage application in behalf of others is untrue is the equivalent of an unqualified assurance that all the state- ments made by such others are in fact true. 4. Whether the indictments involved in the false state- ment counts against the petitioners under which they were convicted failed sufficiently to charge a crime. Questions Presented with Respect to Bribery Counts: 5. Whether convictions on the bribery counts were multiplicitous. The point in this connection is that while on occasions it is claimed that only one payment of money was made, petitioners were charged with several separate briberies for several separate appraisals claimed to have been induced by a single payment. See majority opinion, App. C51. 6. Whether there was an impermissible joinder of par- ties and counts. All questions were preserved by timely and vigorous ob- jections (21662-21623); see also (21521, 2 C609, 10, 21538, (C626-8). *The phrase “proper credit judgment” was not defined by the court, 4 Statutes Involved 18 U.S.C. § 1010 § 1010. Department or Hovsine anp Ursan Deveror- MENT AND F'eperaL Hovstne ADMINISTRATION TRANSACTIONS Whoever, for the purpose of obtaining any loan or advance of credit from any person, partnership, asso- ciation, or corporation with the intent that such loan or advance of credit shall be offered to or aceepted by the Department of Housing and Urban Development for insurance, or for the purpose of obtaining any extention or renewal of any loan, advance of credit, or mortgage insured by such Department, or the aceep- tance, release, or substitution of any security on such a loan, advance of credit, or for the purpose of influ- encing in any way the action of such Department, makes, passes, utters, or publishes any statement, knowing the same to be false, or alters, forges, or counterfeits any instrument, paper, or document, or utters, publishes, or passes as true any instrument, paper or document, knowing it to have been altered, forged, or counterfeited, or willfully overvalues any security, asset, or income, shall be fined not more than $5,000 or imprisoned not more than two years, or both. 18 U.S.C. § 201 § 201. Brisery or Pusiic OrrictaLs anp WITNESSES (b) Whoever, directly or indirectly, corruptly gives, offers or promises anything of value to any public official or person who has been selected to be a public official, or offers or promises any public official or any person who has been selected to be a public official to give anything of value to any other person or entity, with intent— (1) to influence any official act; or (2) to influence such public official or person who has been selected to be a public official to commit or or aid in committing, or collude in, or allow, any fraud, or make opportunity for the commission of any fraud, on the United States; or (3) to induce such public official or such person who has been selected to be a public official to do or omit to do any act in violation of his lawful dutv . .. . ee 4) Statement of the Case On June 25, 1974, in the Eastern District of New York the defendant Harry Bernstein was convicted of conspiracy, 16 counts of bribery and one count of submitting false state- ments to the Federal Housing Administration in connection with applications for mortgage insurance in violation of Title 18, United States Code, Section 371, Section 201(b) (1) and Section 1010. On October 4, 1974, the defendant Harry Bernstein was sentenced to five years imprisonment and fined a total of $175,000. On June 25, 1974, the defendant Rose Bernstein was convicted of conspiracy and four counts of bribery in violation of Title 18, United States Code, See- tion 371 and Section 201(b)(1). On October 4, the defen- dant Rose Bernstein was sentenced to four years imprison- ment and fined a total of $50,000. On June 25, 1974, the de- fendant Eastern Service Corporation was convicted of con- spiracy, 18 counts of bribery and 18 counts of submitting false statements to the Federal Housing Administration in connection with applications for mortgage insurance in vio- lation of Title 18, United States Code, Section 371, Section 201(b)(1) and Section 1010. On October 4, 1974, the de- fendant Eastern Service Corporation was fined a total of $460,000. The defendants-petitioners appealed to the United States Court of Appeals for the Second Circuit which, by a divided court, on March 4, 1976 affirmed the judgments of conviction, App. F’. The trial of this unwieldly and unmanageable case com- menced on October 15, 1973. The case was submitted to the jury on June 17, 1974. The Court began its charge to the jury on June 13, 1974 and concluded it in the afternoon of June 17, 1974. 6 Although we contend that the case, as conceived, struc- tured and tried, in the very nature of things deprived defen- dants-petitioners of a fair trial and, further, that during the trial a host of errors calling for reversal was committed hy the District Judge, for present purposes we urge pri- marily the far-reaching fundamental errors in the Court’s charge, particularly those made in submitting the 18 false statement counts to the jury. After nine months and at the end of the trial the jurors were told to determine as a question of fact what duty was owed by the defendants- petitioners and, for the first time, the District Court equated lack of proper credit judgment to false statements without charging any standards by which to determine proper credit judgment. Since the transcript, consisting of upwards of 25,000 pages, is not now before the Court, we have printed as App. EF, the pertinent portion of the Court’s charge, on the false counts. It is also printed in ‘he margin of the dissent- ing opinion, (55 et seq., because we refer to it both under our heading of “Questions Presented” and our heading “Reasons for Granting the Writ.” The numbers in ( ) refer to pages of the transcript. Facts The defendant-petitioner Eastern Service Corporation, of which the defendant-petitioner Harry Bernstein is the president and who, through an intermediate holding com- pany is the sole stockholder, is and for many years las( past has been an approved mortgagee of the Federal Hous- ing Administration (FHA) (2214-2217). It is engaged in the business of making loans as an initial or interim lender to assist purchasers of homes (2220). It takes mortgages execulgy by such purchasers covering houses purchased by them and discounts such mortgages with permanent att 7 lenders—savings banks, pension funds, ete. (10636). It aids purchasers who might otherwise not be able to pur- chase a home. by advancing the funds beyond a down payment to effect the purchase. If the purchaser in a given instance is unable to make a down payment sufficiently large to justify the down payment required in connection with conventional financing, Eastern Service Corporation assists such purchaser in making application to the FHA for mortgage insurance, covering a mortgage which will enable him to make the purchase. In this connection the purchaser or applicant furnishes, through Eastern Service Corporation and to the FHA detailed information concern- ing himself (2365, 2397) and the property involved (2364). Eastern Service Corporation then requests and obtains a credit report covering the applicant furnished by a credit reporting agency approved by the FHA, such as Dun & Bradstreet.* When the credit report, which is paid for by.Eastern Service Corporation, is received, it is associated with the information furnished by the applicant, which infor- mation is processed for completeness and placed on forms furnished by the FHA. The “package” ** (2362) of papers is then forwarded by Eastern Service Corporation to the FHA (2225) with a certification that the information which has been furnished by the applicant is true to the best of the “knowledge and belief” of Eastern Service Corporation. Upon receipt of the application and credit report (not made by Eastern but by Dun and Bradstreet) the FHA causes an appraisal to be made of the property by either a staff appraiser (one on the regular payroll of MHA) or an *Dun & Bradstreet furnished all of the credit reports involved in this case. It is the most prestigious reporting agency in the United States. ** This is the term often used throughout the testimony (2359, 21386). 8 outside appraiser (one retamed on a fee basis from time to time to make particular appraisals). Upon receipt of the appraisal report and other information (2374-2376), includ- ing, importantly, the Dun and Bradstreet credit report (2376), constituting part of the application for an insured mortgage, the FHA makes a determination as to whether or not the application for an insured mortgage should be granted (2226, 2397-2453). Eastern makes no such deter- mination. It makes no judgment and exercises no discretion. [ts work is ministerial and routine. Eastern Service Corporation, which serviced between 2,500 and 4,000 applications per vear (20459-60), had approximately 140 employees at the times pertinent to this case. Sometime in the summer of 1967 one Ortrud Kapraki, a real estate broker, commenced to make applications for insured loans through Eastern Service Corporation. In the course of time false and exaggerated statements began to creep into various of Mrs. Kapraki’s customers’ state- ments. These false statements, most of them pertaining to the financial status of the applicants, became more extensive and aggravated as time went on (3224-28, 3251, 3255, 3262, 3270, 3285). There was no evidence, in fact no claim by the government, that any of the above named petitioning defendants had actual knowledge of the false statements (20640-41, 18742). The charges against Mr. Bernstein and Eastern Service Corporation on the false statement counts of the indictment are that they were negligent in not dis- covering such false statements and, further, that the certifi- cation that the information furnished was not untrue ‘to the “knowledge and belief” of Eastern Service Corporation was the equivalent of an assurance that such statements, though made by others, were true. —— oN 9 On an unrelated phase of the case it developed that wholly apart and completely separate from his interest in Eastern Service Corporation, the defendant-petitioner Harry Bern- stein was financially interested in several pieces of property on his own account (12144-13002). With respect to some of these properties he owned the fee. In other instances he owned the mortgage, sometime. a second mortgage. On occasions applications were made for mortgage insurance on mortgages covering these properties.” On occasions and apropos of applications for mortgage insurance covering mortgages on these properties, an FILA staff appraiser by the name of Edward Goodwin made appraisals. Good- win testified to some payments to him for “getting Mr. Bernstein the top dollar” in the way of mortgage insurance for mortgages on these properties by inflating their value in his appraisals (11965, 12545, 12653). These payments are charged as bribes and are the subject of many of the so-called bribery counts in the indictment on which Mr. Bernstein and Eastern Service Corporation were convicted. They had nothing to do with the false statement counts. The government charged an over-all comprehensive con- spiracy which included not only Mr. and Mrs. Bernstein, Eastern Service Corporation and Mrs. Kapraki (and vari- ous of her employees), but Dun & Bradstreet, the manager of its Hicksville office and certain other FHA personnel as well. The jury disagreed as to Dun & Bradstreet and its office manager. It acquitted the FHA personnel, other than Goodwin whose case was severed and, like Mrs. Kapraki, testified for the Government. In view of the dis- agreement and acquitta!s, we do not marshal the facts with * No one of these applications is alleged to contain false state- ments and no one of these properties is involved in the so-valled false statement counts of the indictment. 10 respect to these defendants, although weeks and months of testimony was offered and received with respect to their claimed participation in the alleged conspiracy. With Respect to the First Question Presented: The District Court charged in substance that it was for the jury to determine as a question of fact the nature and extent of the duty of Eastern Service Corporation and its officers. In this connection, among other things, the Court charged, “Now, it is a question of fact for you as jurors to de- termine * * * if the FHA, of the Housing and Urban Development, places an affirmative duty on certain of the defendants in this case.” 2 * * “You may find that the FHA program places a duty on the mortgagee to investigate and exercise proper credit judgment with respect to statements contained in applications for mortgage insurance submitted to the FHA.” (Emphasis added.) (App. E.) In doing this the judge gave the jury an undertaking prop- erly his own, United States v. Guterma, 281 F. 2d 742, 751- 52 (2d Cir.), cert. denied, 364 U.S. 871 (1960). The duty of Eastern and its officers, whatever it may be, was imposed by law and certainly was not a question of fact to be de- termined by the jury. As stated by Judge Van Graafeiland in his dissent : “This was not a question of fact; it was a question of law. The construction of statutes and regulations is for the court, not the jury. United States v. Santi- ago, F. 2d (2d Cir. 1976), slip op. 6577, 6583 ; United States v. Guterma, 281 F. 2d 742, 751-52 (2d Cir.), cert. denied, 364 U.S. 871 (1960); United States v. Gillilan, 288 F. 2d 796-97 (2d Cir.), cert. denied sub nom. Apex Distributing Co. v. United States, 368 U.S. 821 (1961); Caldwell v. United States, 218 F. 2d 370, — ~ 11 372 (D.C. Cir. 1954), cert. denied, 349 U.S. 930 (1955). If this were not so there would be as many rules as there are verdicts. Northern Pacific Railway Co. v. Finch, 225 F. 676, 678 (D.N.D. 1915).” As the dissent points out, “We do not know what legal duties were imposed upon these defendants by the jury; no other court will ever know and hundreds of other FHA mortgagees who would like to comply with the law will be equally at sea. . .” (Emphasis added.) (App. C.) This statement demonstrates the importance of a correct resolution of the question here presented. There is no ease in the books allowing a jury to in effect legislate or create a crime not prescribed by the legislature. Unless corrected this case will occasion great confusion and doubt. Defendants were indicted on conspiracy and substan- tive counts for alleged violations of 18 U.S.C. § 1010, which provides in pertinent part as follows: “Whoever . . . for the purpose of influencing in any way the action of [the Federal Housing Administra- tion], makes, passes, utters, or publishes any statement, knowing the same to be false, . . . shall be fined [and/ or imprisoned ].” Defendants were not indicted for violation of a “pro- gram” or instructions contained in the FHA manual or mortgagee’s handbook.* Nor could they be. This Court has, time and again, pointed out the difference between duties imposed legislatively and those imposed administra- tively and has held that “[w]here the charge is of crime, it must have clear legislative basis.” [’nited States v. George, * Although the District Court used the term “regulations”, tes- timony introduced by the Government indicated that the procedures outlined in the FHA manual and mortgagee’s handbook were not regulations, but rather instructions. | 12 228 U.S. 14, 22 (1913). The contents of an administrative manual or handbook “cannot add to the terms of an act of Congress and make conduct criminal which such laws leave untouched,” United States v. Standard Brewery, Inc., 251 U.S. 210, 220 (1920). One may be convicted only for wrong- ful conduct “defined by statute or by regulation having legislative authority, and then only if punishment is author- ized by Congress,” Viereck v. United States, 318 U.S. 236, 241 (1943). As Mr. Justice Blackmun succinctly put it, while on the bench of the Eighth Circuit, “mere violation of a {Commodity Credit Corporation] ‘policy’ is not equivalent to a violation of [15 U.S.C.] § 714m (a).” Jacobs v. United States, 359 F. 2d 960, 966 (Sth Cir. 1966). 18 U.S.C. § 1010 places no affirmative duty upon a mort- gagee forwarding a mortgagor’s application to investigate and exercise proper credit judgment concerning the finan- cial status of the mortgagor described in the application." The majority opinion in the case at bar, on the contrary, does exactly that. To equate defendants’ failure to exer- cise this “proper credit judgment” with a reckless disre- gard of the truth, and thus with the knowledge of falsity required by § 1010, is to read something into the statute which is otherwise totally absent. No one can know what the court meant by proper credit judgment. Certainly the jury could not know. With Respect to the Second Question Presented: It was error for the court to equate a failure to exercise “proper credit judgment” with a false statement. Espe- cially is this so, because the Court nowhere in its charge or elsewhere instructed the jury as to the meaning of the * Eastern Service Corporation could not grant insurance or even recommend it. 13 term “proper credit judgment.” We have no idea show these 12 untutored laymen defined it and yet, this phrase, undefined, unexplained and uninterpreted, constitutes the basis of the government’s case on the false statement counts as it was presented to the jury by the district judge. ‘Without regard to any other factor in the confusing and erroneous instruction to the jury on this subject, the most aggravated was the Court’s reference to “proper credit judgment.” It was bad enough—error in itself—to let ‘the jury determine the existence of defendant’s duty but to suggest a new theory as did the District Court and intro- duce a new and undefined standard or possible requirement was the last straw.* We repeat nowhere did the Court de- fine the term “proper eredit judgment.” In diseussing proper credit judgment, it should be kept in mind that the whole purpose of the National Housing Act is to provide homes for the poor and the indigent; in- deed, to those who really have no credit standing (13570- 13584). Good credit judgment in the conventional sense of the term applied to most applicants would undoubtedly defeat the object of the legislation. Nowhere in any statute, nowhere in the indictment and nowhere in the bill of particulars is there a mention of proper credit judgment or the lack of it. Nowhere in law or in any regulation having the effect of law is such a burden imposed upon a mortgagee or any of its officers or directors. The exercise of credit judgment, good or bad, as we have said in each instance, was that of the FHA and not that of the mortgagee. Nowhere in law or in any regu- lation having the effect of law has it been provided that the lack of good credit judgment or good business judgment * One not even argued by the government. 14 constitutes a crime and the basis for a conviction on an unending series of counts charging separate crimes each time a lay jury could find with the benefit of hindsight that the judgment used was, in the jury’s opinion, not good. Even a statute or an otherwise valid regulation couched in the language of the Court’s charge would be unconstitutionally vague and lacking in standards by which a defendant’s guilt could be determined in a criminal case. Smith v. Goguen, 415 U.S. 566 (1974); Giaccio v. Pennsylvania, 382 U.S. 397 (1966) : United States v. Cohen Grocery, 255 U.S. 81 (1921). With Respect to the Third Question Presented: The holding of the trial Court, affirmed by the majority opinion of the Second Circuit, that the certification of the mortgagee that “to the best of its knowledge and belief”, no information in the mortgage application is untrue, is the equivalent of an unqualified assurance that all state- ments are true is the clearest of error. See discussion under heading “Reasons for Granting of the Writ”, infra. With Respect to the Fourth Question Presented: With respect to the fourth question presented, no one of the charges set forth in the 18 false statement counts specified or identified the statements claimed to be false, nor was it alleged that the claimed false statements were false to the knowledge of defendants-petitioners charged. The consequences of such failure to specify or identify the statements claimed to be false permitted the United States attorney, for the purpose of the trial, to assign as a false statement comprehended by the respective counts any 15 one or more of the many statements contained in the. docu- ments cited in the ecounts.* 18 USC § 1010 makes it a crime to pass, utter or publish false statements “knowing the same to be false.” The false statement counts against Eastern and Mr. Bernstein do not charge the element of knowledge that the statements were false when made.* With Respect to the Fifth Question Presented: We can point up the fifth question best by quoting in part from Judge Oakes’ opinion, as follows: “Finally, and this is a point on which my brothers and I disagree, appellants Harry Bernstein and ESC argue that certain of the bribery counts were multi- plicitous (appellants use erroneously the term ‘duplici- tous’). On four different occasions Bernstein paid Goodwin a lump sum for several property appraisals at $50 per appraisal, thus, for example, paying him $350 on October 6, 1967, for seven property appraisals. The problem is that while only one payment of money was made on this occasion, appellants were c in five counts (and incidentally Bernstein fined $10,000 for each count and ESC $20,000 for each, note 1 supra). In totality four lump sum payments resulted in con- victions on 11 counts. The question—one as to which * Count 25 of the indictment, illustrative of all the false statement counts, charged as follows: “On or about the 3rd day of April 1969, within the Eastern District of New York, the defendants Rose Bernstein, also known as Rose Shorenstein, Harry Bernstein, Florence Behar, Ortrud Kapraki, Melvin Cardona and Eastern Service Corporation, for the purpose of influencing the Federal Housing Administra- tion of the Department of Housing and Urban Development to insure a loan and advance of credit by the defendant Eastern Service Corporation, did knowingly make, pass, utter and pub- lish false statements in an application for mortgage insurance on property located at 416 52nd Street, Brooklyn, New York (Title 18, United States Code, § 1010 and § 2).” 16 there are no cases directly in point—is whether each lump sum payment constituted one crime or several, a single transaction or many. Wane argue, and the writer agrees, that under 18 U.S.C. 4 201(b) it is the corrupt gift which is the essential criminal act on the part of the donor, though it be with the intent to induce several criminal acts (and might be punished severally under 18 U.S.C. § 201(¢) on the part of the donee.)”’ (Emphasis added.) Reasons for Granting the Writ: Importantly, the decision of the Second Circuit, entered on March 4, 1976, which we ask this Court to review, is in direct conflict with decisions of other circuits, particularly with a decision of the Sixth Circuit not as yet reported en- tered eight days after the decision in our case on March 12, 1976 in the case of United States v. Ekelman, App. D. Both our ease and the Ekelman case directly involve the question of the duty and obligation of a mortgagee under iS U.S.C. § 1010 when forwarding applications of mort- gagors for mortgage insurance to the FHA and the Veterans Administration for action by those agencies. In our case, as we have pointed out, the District Court errone- ously left it to the jury to determine the nature and extent of such duty and obligation. In the Ekelman case the duty and obligation of such a mortgagee were defined as a matter of law by the Court. In the case at bar, the Court charged the jurors that they could find an “affirmative duty to insure that statements made in the application were true.” In the Ekelman ease the Sixth Cireuit held that there was no such duty. In the Ekelman case in a unanimous opinion, the Sixth Cireuit said: “Thus, the law of this Circuit requires a showing of actual knowledge to establish liability under the False Claims Act. This appears to be the preponderant view. 17 See, eg United States v. Aerodex, Inc., 469 F. 2d.1003 Sth Cir. 1972); United States v. Mead, 426 F. 2d 118 9th Cir. 1970); Eastern School v. United States, 381 DE) 421 (Ct. Cl. 1967).” (Emphasis added.) (App. There was not even a claim by the government in our case that the defendants-petitioners had actual knowledge of any false statements; in fact, it was specifically stated hy government counsel that there was no such claim. Notwithstanding the government’s disavowal of any claim that the petitioning-defendants had “actual knowl- edge” of any fraudulent statements, the prevailing opinion of the Second Circuit said: “It is our view that delimiting those duties by defining them as duties ‘to investigate’ and to use ‘good credit judgment’ was a fair description of the responsibilities inherent in the relationship between the defendants and the FHA, as we have above described it.” (App. C.) This is directly contrary to the holding of the Sixth Cireuit in the Ekelman case and, as the Sixth Circuit stated, con- trary to the “preponderant view.” (App. D5.) There is a further and even more far-reaching conflict between the case at bar and the preponderant view, as expressed by the Sixth Circuit. [In the case at bar the Sec- ond Circuit has held that the certificate of the mortgagee that the information contained in the application is “true and complete to the best of its knowledge and _ belief” amounts to a verification of the truth of the statements and gives rise to the affirmative duty to investigate and to exer- cise proper credit judgment, whereas the Sixth Circuit places no such construction on the certificate. The importance of resolving the conflict between the majority opinion of the Second Cireuit in the case at bar and the decisions of the Fifth and Sixth Cireuits in similar 18 cases cannot be exaggerated. Hundreds, nay thousands, of applications are being presented year by year to both the FH.\ and to the Veterans Administration by mortgagees for insurance. In each instance the information contained in the application is furnished by the mortgagor, not the mortgagee. In each instance the mortgagee, relying upon the mortgagor and the report of a credit agency (im our case Dun and Bradstreet), merely states that the information contained in the application is true to the best of its “knowledge and belief.” The Second Cireuit has held in the case at bar that this is the equivalent of “verifying the truth of the information in the applications.” The Sixth Cireuit, to the contrary in the Ekelman cave, heid the follow- ing: “The certification of truth ‘to the best of my knowledge and belief’ is a qualified assertion of facts represented. It does not represent that the party making the asser- tion has personal knowledge of the facts and is not the equivalent of an assertion such as: ‘I certify that this veteran is indebted to others in the amount of $5,000.’ ” and, further, “In certifying the truth of the information in the application ‘to the best of its knowledge and belief’ Franklin [the mortgagee] did no more than assert that it had no knowledge of, nor intention to make, mis- representations.” (App. D8.) Such should have been the holding in our case. Numerous statements to the best of one’s “knowledge and belief” are being made everyday by many people in various contexts. If, now, such statements are in law to amount to an unqualified assertion of the truth to the peril of one mak- ing the statement, the bench and bar sheald know such fact and the rule should be of universal application. 19 The far reaching implications of the conflict between the Second Cireuit decision in our case and the Sixth Circuit decision in the Ekelman case (cases decided within eight days of each other) become more apparent as one reads the prevailing and dissenting opinions in our case and the Sixth Circuit opinion in the Ekelman case. The government has stated that upwards of $200 million to $300 million of insurance loans have been made by the FHA and that this agency is continuing to make additional loans. As observed vy the dissenting opinion in our case, : “We do not know what legal duties were imposed upon these defendants by the jury; no other court will - so know, and hundreds of other FHA mortgagees who would like to comply with the law will be equally at sea.”” (Emphasis added.) (App. C63.) Thus far we have discussed the reasons for granting the writ which involve the false statement counts. We submit that there are equally good reasons for granting the writ which stem from the Court’s handling of the bribery counts. As pointed out in Judge Oakes’ opinion, the Second Cir- cuit divided on the law pertaining to certain of the bribery counts.” As to these counts Judge Oakes agreed with us, whereas the other two judges did not. As Judge Oakes said, “The problem is that while only one payment of money was made on this occasion, appellants were in five counts (and incidentally Bernstein fined $10,000. for each count and ESC $20,000 for each, . . .). In totality four lump sum payments resulted in conviec- tions on 11 counts. The question—one as to which there are no cases directly in point—is whether each lump sum payment constituted one crime or several, a single transaction or many.” (Emphasis added. (App. C51.) , ein * But, there was a realignment of the judges. 20 Although Judge Oakes is correct in his statement that there are no cases directly in point, we call attention to the decision of the Court of last resort of the State of New York in People v. Cox, 286 N.Y. 137, where the New York Court of Appeals held that repeated thefts of nickels and dimes from the Independent Subway System of the City of New York, amounting to $25 or $30 each on separate occasions over a period of 11 months but more than $100 in the aggregate constituted one crime (grand larceny). The Court said at 142: “Where the property is stolen from the same owner and from the same place by a series of acts, if each taking is the result of a separate independent impulse, each is a separate crime; but if the successive takings are all pursuant to a single, sustained, criminal im- pulse and in execution of a general fraudulent scheme, they together constitute a single larceny, regardless of the time which may elapse between each act.” and further at 144: “When defendant, along with the various station agents, once agreed together to ‘belt’ the turnstiles, and thereafter carried out that purpose by stealing the nickels, the acts necessary to constitute the offense of larceny were united and the resulting crime was single although there may have been a number of takings.” Time and space, let alone the instructions of this Court, do not permit of the development of all the reasons why a writ of certiorari should be granted. The same prosecu- torial mismanagement of the 9-months trial which preju- diced the defendants on the trial and interfered with an adequate presentation before the Court of Appeals inhere to make a complete argument in support of a writ of certio- rari impossible, but if the writ is granted we desire to pre- serve for argument the points presented. 21 For the foregoing reasons the writ of certiorari should issue to review the judgment and opinion of the Second Cir- cenit. Respectfully submitted, FRANK G. RAICHLE, Attorney for Petitioners. Raicuuie, Bannine, Weiss & Hatpern, Of Counsel. ee Al APPENDIX A wis be Order denying rehearing for appellants Harry Bernstein, “re Rose Bernstein and Eastern Service Corporation dated May 14, 1976 in case at bar UNITED STATES COURT OF APPEALS Seconp Circuit At a Stated Term of the United States Court of Ap- | peals, in and for the Second Circuit, held at the United States Court House, in the City of New York, on the fourteenth day of May, one thou- sand nine hundred and seventy-six. | Present: HON. WILFRED FEINBERG, HON. JAMES L. OAKES, | HON. ELLSWORTH VAN GRAAFEILAND, Circuit Judges. UNITED STATES OF AMERICA, Plaintiff-Appellee, v. HARRY BERNSTEIN, ROSE BERNSTEIN, a/k/a ROSE SHORENSTEIN, EASTERN SERVICE COR- PORATION, DUN & BRADSTREET, INC., HERBERT CRONIN, FLORENCE BEHAR, FRANK FEY, ARTHUR PRESCOTT, ORTRUD KAPRAKI, MEL- VIN CARDONA, PATRICIA BUCKLY, EDWARD GOODWIN, JOSEPH JANKOWITZ, FRANK DREIS, GREVILLE HARVEY, ROSE COHEN, JOSEPH MONTI, IRVING FIGOWITZ, RALPH GONITAS, HAROLD KELLER, MANUEL CARPIO, DOUGLAS HOLLENBACH and RICHARD E. BELL, Defendants, HARRY BERNSTEIN, ROSE BERNSTEIN, a/k/a ROSE SHORENSTEIN, EASTERN SERVICE COR- PORATION, FLORENCE BEHAR, MELVIN CAR- A, . — Defendants-Appellants. 74-2328 A2 Appendix A—Order denying rehearing for appellants Harry Bernstein, Rose Bernstein and Eastern Service Corporation dated May 14, 1976 in case at bar | A petition for a rehearing having been filed herein by counsel for the appellants Harry Bernstein, Rose Bern- stein and Eastern Service Corporation. Upon consideration thereof, it is Ordered that said petition be and hereby is DENIED. A. DANIEL FUSARO, Clerk. Se Bl APPENDIX B Order denying suggestion that the action be reheard in banc for appellants Harry Bernstein, Rose Bernstein and Eastern Service Corporation dated May 14, 1976 in case at bar UNITED STATES COURT OF APPEALS Seconp Circuit At a stated term of the United States Court of Ap- peals, in and for the Second Circuit, held at the United States Court House, in the City of New York, on the fourteenth day of May, one thou- sand nine hundred and seventy-six. UNITED STATES OF AMURICA, Plaintiff-A ppellee, V. HARRY BERNSTEIN, ROSE BERNSTEIN, a/k/a ROSE SHORENSTEIN, EASTERN SERVICE COR- PORATION, DUN & BRADSTREET, INC., HERBERT CRONIN, FLORENCE BEHAR, FRANK FEY, ARTHUR PRESCOTT, ORTRUD KAPRAKI, MEL- VIN CARDONA, PATRICIA BUCKLY, EDWARD GOODWIN, JOSEPH JANKOWITZ, FRANK DREIS, GREVILLE HARVEY, ROSE COHEN, JOSEPH MONTI, IRVING FIGOWITZ, RALPH GONTAS, HAROLD KELLER, MANUEL CARPIO, DOUGLAS HOLLENBACH and RICHARD E. BELL, Defendants, HARRY BERNSTEIN, ROSE BERNSTEIN, a/k/a ROSE SHORENSTEIN, EASTERN SERVICE COR- PORATION, FLORENCE BEHAR, MELVIN CAR- DONA, Defendants-A ppellants. B2 Appendix B—Order denying suggestion that the action be reheard in banc for appellants Harry Bernstein, Rose Bernstein and Eastern Service Corporation dated May 14, 1976 in case at bar A petition for rehearing containing a suggestion that the action be reheard in bane having been filed herein by coun- sel for the appellants, Harry Bernstein, Rose Bernstein and Kastern Service Corporation, and no active judge or judge who was a member of the panel having requested that a vote he taken on said suggestion, Upon consideration thereof, it is Ordered that said petition be and it hereby is DENTED. IRVING R. KAUFMAN, Chief Judge. Ee eee ~ Ch APPENDIX C Opinions of Second Circuit Court of Appeals in case at bar UNITED STATES COURT OF APPEALS For THE Seconp Circuit Nos. 941, 942, 943, 945—September Term, 1974. (Argued June 9, 1975 Decided March 4, 1976.) Docket Nos. 74-2328-29, 74-2462-64 UNITED STATES OF AMERICA, Appellee, v. HARRY BERNSTEIN, ROSE BERNSTEIN, EASTERN SERVICE CORPORATION, FLORENCE BEHAR and MELVIN CARDONA, Appellants. Before: FEINBERG, OAKES and VAN GRAAFEILAND, Circuit Judges. Appeal from judgments of conviction of conspiracy, 18 U.S.C. § 371, bribery, 18 U.S.C. § 201 and 18 U.S.C. § 2, and false statement offenses, 18 U.S.C. § 1010 and 18 U.S.C. § 2, in connection with applications for mortgage insurance loans from the FHA, by a jury in the United States District Court for the Eastern District of New York, Anthony J. Travia, Judge, challenging judge’s failure to recuse himself ; sufficiency of indictment ; disqualification of counsel, joinder C2 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar and denial of severance motions; sufficiency of the evidence ; existence of single conspiracy; alleged prosecutorial mis- management; instructions of and interrogation by court; and multiplicity of counts. Frank G. Raichle, Buffalo, N. Y. (Raichle, Banning, Weiss & Halpern, R. William Stephens, of counsel), for Appellants Bernstein and Eastern Service Corp. Henry J. Boitel, New York, N. Y., for Appellant Behar. John A. Kisek, New York, N. Y., for Appellant Cardone. Ronald E. DePetris, Assistant United States Attorney (David G. Trager, United States Attorney for the Eastern District of New York, Paul B. Bergman, Assistant United States Attorney, of counsel; Gale A. Drexler, on the brief ), for Appellee. OAKES, Circuit Judge: This appeal is from convictions for “white collar” crimes in connection with the obtaining of Federal Housing Administration (FHA) guarantees on mortgage loans. For proof of the crimes involved, such a multiplicity of small transactions was necessary to be shown that the trial in the United States District Court for the Eastern District of New York, Anthony J. Travia, Judge,* took over eight months with a resultant 25,000-page transcript. The three types of offenses of which appellants were found guilty include conspiracy, 18 U.S.C. § 371, substantive bribery * Now retired. C3 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar offenses, 18 U.S.C. § 201 and 18 U.S.C. § 2 and substantive false statement offenses in applications for mortgage in- surance in violation of 18 U.S.C. § 1010 and 18 U.S.C. § 2. All appellants were convicted of conspiracy, all appellants except Melvin Cardona of bribery, and all appellants except Rose Bernstein of false statements.' The appellants 1 The conspiracy count in the redacted indictment was Count 1; the false statement counts submitted to the jury on which there were findings of guilty were 2, 4, 5, 7, 9, 10, 12, 14, 16-18, 20, 21, 23, 25, 26, 27 and 31; the bribery counts on which there were find- ings of guilty were 35-39, 41, 42, 44, 46, 48, 50, 51, 53, 55, 57, 59, 63 and 65. Eastern Service Corp. (ESC) was acquitted on bribery Counts 29, 33 and 61, Harry Bernstein was likewise, Rose Bernstein was acquitted on bribery Counts 29, 33 and 62, and Flor- ence Behar was acquitted on Count 33. False statement Counts 2 and 20 were dismissed as to Harry and Rose Bernstein and Counts 25 and 50 as to Kose Bernstein. The jury disagreed with respect to the defendants Dun & Brad- street, Inc. (conspiracy and ten false statement counts), Arthur Prescott (conspiracy and ten false statement counts) and H: bert Cronin (conspiracy and 11 overvaluation counts). One false state- ment count had been dismissed on consent against the defendants Dun & Bradstreet, Inc., and Prescott at the end of the Govern- ment’s case. The jury acquitted the defendant Joseph Jankowitz (conspiracy and two bribery counts). The jury was discharged by the court on July 5, i9%4. Thereafter, by order dated Novem- ber 25, 1974, the court granted motions by the defendants Dun & Bradstreet, Inc., and Prescott for a judgment of acquittal on the conspiracy and ten false statement counts as to which there was a hung jury. On October 4, 1974, appellant Harry Bernstein was sentenced to a term of imprisonment of five years on the conspiracy count, five years on each of the 16 bribery counts, and two years on the false statement count, the terms to run concurrently. He was also fined $10,000 on the conspiracy count, $10,000 on each of 16° bribery (Footnote continued on following page) C4 Appendix C—Opinions of Second Circuit Court of Appeals mm case at bar have launched a multiple attack on the convictions, their claims ranging, inter alia, from disqualification of the trial court and prosecutorial mismanagement to erroneous ad- mission of evidence, insufficiency of evidence and erroneous instructions to the jury. While we find some of their argu- ments troublesome, we find none of them meritorious, and affirm the convictions. I. Statement of Facts. The FHA is a division of the Department of Housing and Urban Development (HUD). FHA has a loan guarantee program well known to the public whereby it grants mortgage insurance to a lender- mortgagee who is thereby insured against loss if the mort- gagor is unable to pay off the loan. The mortgage insur- ance in the instances here involved was obtained in a two- step procedure. The first step was for the mortgagee to (Footnote continued from preceding page) counts, and $5,000 on one false statements count, all fines to run consecutively (making a total fine of $175,000). Appellant Rose Bernstein was sentenced to a term of imprisonment of four years on each count to run concurrently, and a fine of $10,000 on the con- spiracy count and $10,000 on each of four bribery counts to run con- secutively (making a total fine of $50,000). Appellant ESC was fined $10,000 on the conspiracy count, $5,000 on each of the 18 false statement counts, and $20,000 on each of the 18 bribery counts, all fines to run consecutively (making a total fine of $460,000). Ap- pellant Behar was sentenced to a term of imprisonment of two years on each count to run concurrently and a fine of $1,000 on each of three bribery and 18 false statement counts to run consecutively (making a total fine of $21,000). Appellant Cardona was sen- tenced to a term of imprisonment of two years on each count to run concurrently and a fine of $1,000 on each of 17 false statement counts to run consecutively (making a total fine of $17,000). Execu- tion of sentence was staved, and the appellants have been free on hail pending this appeal. C5 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar apply to the FHA for an appraisal of the property; this was made on a “Form 2800.” The second was the mort- gagee’s application for approval of the mortgagor's credit; this was made on a “Form 2900” and includes certain necessary information and exhibits including a credit re- port, verification of employment form, and the like. If an appraisal of the property is up to sufficient value, the FHA will issue a conditional commitment which it then makes firm if the mortgagor’s credit is satisfactory and approved. Eastern Service Corporation (ESC) was a lending insti- tution wholly owned by appellant Harry Bernstein. It would initially loan money to home buyers and subse- quently sell the mortgage loans to permanent lenders, such as savings banks, pension funds, and the Federal National Mortgage Association, while being retained, however, to perform the administrative tasks involved in servicing the mortgage. ESC made its profit from two major sources—the origi- nation and sale of loans and the servicing of loans. On loan closings there was an origination or processing fee of one “point,” i.e., one per cent of the mortgage amount. In addition the corporation would charge a certain number of “points” to the real estate broker or speculator who sold the home and, after the loan closed, the mortgage would be sold by ESC to a permanent lender at a discount of a certain number of points. Thus the profit for ESC was the difference between the points charged to the broker or speculator and the points at which the loan was dis- counted, plus the processing fee and any servicing fee, less expenses. C6 Appendix C—Opinions of Second Circuit Court of Appeals in case at ba~ The Government’s case, boiled down to the bare essen- tials, was that the Bernsteins procured on behalf of ESC favorable FHA appraisals by virtue of bribes to FHA staff appraisers working out of the Hempstead, New York, regional office. KSC also obtained approvals of individual mortgagors’ credit by virtue of a number of false credit statements submitted and certified or processed by Flor- ence Behar, who was an assistant vice president of ESC in charge of the processing section. A number of these were solicited by Melvin Cardona, one of approximately 12 to 14 mortgage solicitors employed by KSC, who also obtained false financial reports on the mortgagors’ behalf. Government proof on the bribery counts went to the very heart of the FILA office involved, located, as it happened, in the same building with ESC. One FHA staff appraiser receiving the bribes was Edward Goodwin, who performed and reviewed appraisals in Brooklyn; he was assigne«| appraisal applications from time to time by coconspirator Rose Cohen and his appraisals were reviewed by defendant Joseph Jankowitz, a senior FHA staff appraiser. Defen- dant Ilerbert Cronin, the chief underwriter of the FHA office, was responsible for overseeing all appraisals, and had the “chief underwriter’s prerogative” (CUP) by which an FHA appraisal might be increased in his discretion up to a maximum of $500 on a particular property. One of two principal real estate speculators active in Brooklyn and involved in the case was Jet Warehouse, Inc. (Jet), another wholly owned corporation of Harry Bern- stein. Jet held second mortgages on a number of properties which were later refinanced by way of FHA-insured mort- C7 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar gages. Jet also loaned money to various real estate specu- lators to purchase properties, on which applications would be submitted to the FHA. The other such speculator was Ortrud Kapraki, who, along with Goodwin, was a chief Government witness and who in 1968-70 had approximately 200 closings at ESC, amounting to about five per cent of ESC’s business in FHA-insured mortgages. ESC was an FHA “approved mortgage lender” and as such, lending on an interim basis, it was able to make considerable profits with very little risk and with a limited use of capital. In the nature of economic life, once FHA mortgage insurance has been procured only low down pay- ments are required, a permanent lender is readily available to purchase the mortgage from the interim lender, and if the mortgage goes into foreclosure the interim lender knows that the FHA will pay virtually full value on the outstanding loan so that there is no great risk of fore- closure. The risk is, in fact, for all practical purposes after assorted points are charged, close to zero. The Go, ~nment proof adduced was also to the effect that at least as to the second phase of the mortgage insurance process—the mortgagor’s creuit—the FHA is dependent upon the approved mortgagee, and we may say upon the latter’s integrity. This is so because only the mortgagee personally interviews the mortgagor and it is the mortgagor which has the obligation to obtain verification of employment and income and to obtain other credit information regarding a mortgagor’s employment and income. It was after the inner city riots in 1966 and FHA inter- vention to improve the inner cities that KSC and Jet C8 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar really went into what was a new market. Government proof adduced was to the effect that after an initial approach by Harry and Rose Bernstein to Edward Goodwin, the latter, with the approval of Chief Underwriter Cronin but contrary to FHA policy, went to the Bernstein office, supposedly to pick up some keys to properties. In reality he was there approached with an arrangement whereby he would obtain $50 per property on any Bernstein “2800” form applications for appraisal. When Cronin asked Goodwin how he made out on the business of the “keys,” Goodwin replied that there was no problem. After that meeting in March, 1967, Goodwin was “on the take” and he and Bernstein arranged a plan whereby in order to tell which houses were Jet's, Bernstein would identify them as “ORE,” meaning “our real estate,” not what the parties were to mine out of the federal government. According to Goodwin’s testimony, Rose Bernstein encouraged him to accept the $200 proffered by Harry Bernstein for the first four top dollar appraisals. This was only the beginning, and Government proof was that bribes were proffered by the Bernsteins and taken by Goodwin on many occasions. Providing an initial high appraisal was only part of the bribed services rendered, however, because in several cases when ESC submitted a request for a reevaluation Cronin would return the files to Goodwin, ask him to take another look at the value, saying in words to the effect of “Is that all it’s worth? Take another look.” Goodwin would take it to his desk, increase the value, and return the file to Cronin’s ofiice. Cronin would then exercise his prerogative, the CUP, and increase the value an additional $500 more. Kor four years, and through hundreds of these appraisals, C9 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar ESC and the Bernsteins would obtain high initial appraisal, frequent upward reevaluation, and then the almost omni- present CUP. On each of the bribery counts on which the various appellants other than Cardona were convicted, the Government proof established this with some clarity.” Evidence indicated that Jet held second mortgages on nine and owned three of the properties involved in the bribery counts. Bribery also occurred in refereace to applications for appraisals on a number of the so-cailed Kapraki properties. In the summer of 1968 the other real estate speculator, Kapraki, began to submit an increased number of applica- tions for appraisals to ESC, and appellant Behar told her that she should have the right appraiser and introduced her to the Bernsteins. Behar told her that it was important to pay the appraisers at the going rate of $50 per property and advised the Bernsteins that since Kapraki was a volume dealer she should have staff men, i.e., fulltime FHA appraisers like Goodwin, to handle her properties. Both Harry Bernstein and Rose Bernstein informed Kapraki that she would have to take care of the appraisers. There- after Kapraki would tell Behar when she wanted the “right appraiser,” and Behar either alone or with Kapraki would speak to the Bernsteins. The Bernsteins would arrange to have either Jankowitz or Goodwin do the appraising, an« either Rose Bernstein or Behar would notify Kapraki that Jankowitz or Goodwin would be appraising her properties on certain dates. Pursuant to their suggestions, Kapraki * The properties referred to in the substantive counts may not have been the only properties as to which Goodwin received payments from ESC and Harry Bernstein. See note 3 infra. C10 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar would meet the appraiser each time and pay him $100 per property. As for the method by which the “right” appraisers were assigned, there was ample evidence to show that ESC appraisal applications were delivered to Herbert Cronin, who would give them to Goodwin or to Rose Cohen, with a direction to assign them to Goodwin or Jankowitz. There was evidence, indeed, that for at least two years Rose Cohen, who testified for the Government, was receiving bribes from Rose Bernstein to assign cases to particular appraisers, especially Goodwin and Jankowitz. On four of the bribery counts on which the appellants were convicted there was proof linking Rose Bernstein and Behar to Goodwin appraisals for Kapraki that were “right” and on three of those there was proof indicating Harry Bernstein’s involvement with Kapraki’s requests for the “right” appraiser. The false statement counts on which ESC, Behar, Cardona and Harry Bernstein were convicted all concern false representations of employment or self-employment in ESC applications for approval of mortgage credit, supported either by an accountant’s false financial statements verify- ing self-employment or by false verifications of employers. Government evidence established that Kapraki originally had been solicited on behalf of ESC by way of appellant (Cardona, the commissioned mortgage salesman for ESC, who explained the basic FHA application procedures ‘. her. It was in March, 1968, after a number of Kapraki’s pur- chasers had been turned down by the FHA, that Cardona and Behar offered to assist her. Kapraki indeed offered to pay Behar $50 to $75 per ease—an internal bribe—to get FHA approvals. WMapraki, with Cardona’s assistance, ee = Cll Appendix C—Opinions of Second Circuit Court of Appeals in case at bar thus commenced to create false appearances of sufficient income on FHA mortgage credit applications. After Cardona suggested various means of obtaining false verifi- cations of nonexistent part-time jobs for Kapraki’s appli- cants, Kapraki herself began to obtain these until she heard in September-October of 1968 that she was getting a “reputation” around town for such a service. Cardona then told Kapraki that they could utilize an accountant in the Bronx, Walter Blow, who would make false financial state- ments as to self-employment for the use of the applicants. The availability of Blow, in effect, had been announced by Cardona’s sales manager at a sales meeting at ESC at which Harry Bernstein was present. In March, 1969, when Blow’s statements came to be questioned, Cardona recruited another accountant, later a Government witness, to perform Blow’s service. Cardona also advised Kapraki regarding assorted other techniques to insure FHA approval, such as submitting false affidavits to substantiate exaggerated down pay~ents, forging lawyer’s signatures for false escrow letters, and minimizing the number of dependents, or altering the age of the mortgagor in the application forms. Kapraki gave Cardona $95 for each set of the accountant’s false financial statements and $145 for such a set plus false income tax returns, paying him usually in cash but some- times by check, with Cardona pocketing some of the money for himself. Appellant Behar, who took, as we said, a special interest in Kapraki’s applications, no doubt because of their volume and profitability to ESC, assigned an experienced processor, one Pat Buckley, whom Kapracki agreed to pay at the rate of $50 per case, to handle them. For Behar’s own aid C12 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar in expediting applications, Kapraki paid $50 or $75 per property to begin with, then up to $200 per property, and finally $250 by June, 1969. Usually Kapraki left the money in cash in an envelope in Behar’s desk drawer, but in a number of instances by way of checks payable to Cash, or to Kapraki with her endorsement. These checks, with Behar’s endorsements, were introduced in evidence. Behar’s assistance in expediting applications went beyond a passive acceptance of their content. Behar told Kapraki to have her mortgagors sign the applications in advance in blank and, knowing that they were certifying to the truth and completeness of information which was only later typed in by Kapraki, Behar as the chief supervising processing ofticer of ESC would nevertheless sign the mortgagee’s certification to the FHA verifying the truth of the infor- mation in the applications. Cardona and Behar also gave Kapraki blank verification of employment forms, in viola- tion of FHA requirements. When Behar called Kapraki to tell her that Dun & Bradstreet, ESC’s credit report service, was inquiring why so many of Kapraki’s mortgage applicants worked at the “Bocar” service station, Behar asked, “They all work there, don’t they?’ But she never sent an employee of ESC out to check with this supposed employer. Cardona simply told Kapraki not to use the same place all the time. One of the ESC people, Frank Fey, a vice president who pleaded guilty and testified for the Government, was inquisitive as to Kapraki’s many delinquencies and the coincidence of her use of the same accountant, Blow, to verify so many self-employments. In late 1968, Fey told Behar, “Florence, let’s stop the bullshit, you know as well C13 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar as I that these deals are phonies.” Behar continued to sign the mortgagee’s certificates and, despite intermittent ques- tions, even by the FHA, concerning potentially implausible information in the Kapraki applications, Behar never checked the validity of the representation beyond Kapraki’s word. Fay mentioned his concerns about fraud being involved in Kapraki’s transactions to his bosses, Harry and Rose Bernstein. Despite his urging them to stop processing Kapraki’s applications both of them took the position that it was better to do the business and let the FHA decide, especially in view of the number of points ESC was charging Kapraki. The Government proof was in effect that at least by the spring of 1969 Harry and Rose F ~nstein were content to have ESC process applications which their supervisur, Behar, their salesman, Cardona, and their vice president, Fey, knew were phony. IT. Pretrial Motion to Disqualify. Appellants timely moved with supporting affidavits to disqualify Judge Travia because he had accepted guilty pleas under other indictments and made certain comments in respect to other defendants, some of whom were named as codefendants and covonspira- tors of ESC, Harry Bernstein and Rose Bernstein.2 They contend that under 28 U.S.C. §144,* they presented a * The instant indictment was one of 1% returned by a grand jury against ESC and the Bernsteins, containing a total of about 800 counts and naming 50 defendants. These and several other FHA- related indictments from the same grand jury were assigned to Judge Travia. Eleven defendants involved in these prosecutions pleaded guilty prior to March 22, 1973; eight of these were codefendants and coconspirators of ESC and the Bernsteins, and six were sentenced. (Footnote continued on following page) C14 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar “sufficient affidavit’ of Judge Travia’s “personal bias or prejudice,” so as to have required his recusal. See Berger v. United States, 255 U.S. 22 (1921). The question is whether the supporting affidavit is legally sufficient, i.e., alleges facts which support the charge of bias and prejudice, and whether such bias and prejudice stem from an extrajudicial source. Wolfson v. Palmieri, 396 F.2d 121, 124 (2d Cir. 1968) ; Rosen v. Sugarman, 357 F.2d 794, 797-98 (2d Cir. 1966). The remarks of the judge which allegedly reveal prejudice were made in the course of Rule 11 questioning of ecodefendants Goodwin, Kapraki, Cohen and Fey at the time of taking their pleas and in the course of sentencing, see note 3 supra. he questioning related to the nature of (Footnote continued from preceding page) It was on that date that appellants ESC, Behar and the Bernsteins filed the affidavit supporting the motion for recusal, citing excerpts from the sentencing proceedings and from the guilty plea inquiries pursuant to Fed. R. Crim. P. 11. 428 U.S.C. § 144 provides: Whenever a party to any proceeding in a district court makes and files a timely and sufficient affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against him or in favor of any adverse party, such judge shall proceed no further therein, but another judge shall be assigned to hear such proceeding. The affidavit shall state the facts and the reasons for the be- lief that bias or prejudice exists, and shall be filed not less than ten days before the beginning of the term at which the proceed- ing is to be heard, or good cause shall be shown for failure to file it within such time. A party may file or * one such affi- davit in any ease. It shall be accompanied by a certificate of counsel of record stating that it is made in good faith. C15 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar the conspiracy and the role of various conspirators, includ- ing the Bernsteins and ESC. The judge in those remarks characterized the conspiracy as “this terrible scheme” and “a great big scheme,” and stated, “I am sure this conspiracy has cost society millions of dollars by way of payment of taxes and otherwise, and the people who get involved in these houses were dealt with very sharply. You cannot close your eyes to these things.’’® Each of the comments made by the judge was in the course of a judicial proceeding in the context of discussions with the defendants before him. None of them appears to have arisen from an extrajudicial source or “resulted in the formulation of an opinion on the merits not based upon what the judge has learned by his participation in the proceedings... .” United States vy. Sclafani, 487 F.2d 245, 255 (2d Cir.) (reference at sentencing of codefendant to 5 Appellants take particular umbrage at Judge Travia’s reference to the “whole scheme” costing the Government “upwards of two or three hundred million dollars, and who’s paying for that?,” and answering his own question, “Joe Blow, the guy on the street is paying for the high living of many.” They now claim that the amount of money referred to was taken from an extrajudicial source, a press report, and that there was no evidence that the Bernsteins engaged in “high living.” The affidavit, however, was by no means so specific ; it merely alleged that the judge had formed an opinion derived from “some speculation or information outside the record.” Hodgson v. Liquor Salesmen’s Union Local No. 2 of State of N.Y., 444 F.2d 1344, 1348-49 (2d Cir. 1971). None of the statements relate to guilt or innocence of these appellants and were simply responses to the explanations or pleas for clemency of those pleading guilty or heing sentenced. Moreover, the press reports referred to on appeal were part of the papers attached to motions for dismissal of the indictments on the ground of prejudicial pretrial publicity. C16 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar remaining defendants as “people who have poisoned your existence and placed you on the road of delinquency,” id. at 252), cert. denied, 414 U.S. 1023 (1973). See United States v. Grinnell Corp., 384 U.S. 563, 583 (1966). The rule of law, without belaboring the point, is that what a judge learns in his judicial capacity—whether by way of guilty pleas of codefendants or alleged coconspirators, or by way of pretrial proceedings, or both—is a proper basis for judicial observations, and the use of such information is not the kind of matter that results in disqualification. Rules against “bias” and “partiality” can never mean to require the total absence of preconception, predispositions and other mental habits, as Judge Frank said so much more felicitously in Jn re Linahan, Inc., 138 F.2d 650, 651-52 (2d Cir. 1943). Of course such judicially acquired infor- mation or those natural preconceptions may lead a judge to feel a bias or prejudice that requires him to disqualify himself—this was still, or at least until December 5, 1974, when new 28 U.S.C. § 455 was enacted, however, a matter for the individual judge subjectively to determine. Judge Travia made no such determination here; a petition to this court for a writ of mandamus on this issue was indeed denied. The point is of no avail.® Ill. Sufficiency of the False Statement Counts. Harry Bernstein, ESC, Behar and Cardona contend that the false ® Neither the judge’s conduct of the trial, see Part VIII infra, nor anything we said in Winters v. Travia, 495 F.2d 839 (2d Cir. 1974), is to the contrary. C17 Apnendiz C—Opinions of Second Circuit Court of Appeals in case at bar statement counts under 18 U.S.C. § 1010" under which they were convicted failed sufficiently to charge a crime. More specifically, appellants argue that these counts fail to specify or identify the specific statements alleged to be false and fail to allege the essential element of knowledge that the statements were false. For all practical purposes we can treat the assorted counts as identical since their form is the same and they differ only as to the date, the particular defendants named and the property address to which the application relates. Taking Count 25 as an example (because it is the only count in which four of these appellants were charged and convicted), we set it out in the margin.* We note that 718 U.S.C, § 1010 provides : Whoever, for the purpose of obtaining any loan or advance of credit from any person, partnership, association, or corporation with the intent that such loan or advance of credit shall be of- fered to or acceyted by the Department of Housing and Urban Development for insurance or for the purpose of obtaining any extension or renewal of any loan, advance of credit, or mort- gage insured by such Department, or the acceptance, release, or substitution of any security on such a loan, advance of credit. or for the purpose of influencing in any way the action of such Department, makes, passes, utters, or publishes any state- ment, knowing the same to be false, or alters, forges, or counter- feits any instrument, paper, or document, or utters, publishes, or passes as true any instrument, paper, or document, knowing it to have been altered, forged, or counterfeited, or willfully over-values any security, asset, or income, shall be fined not more than $5,000 or imprisoned not more than two years, or both. *Count 25 of the redacted indictment (originally Count 20 of the superseding indictment here, 72 Cr. 587) charged as follows: On or about the 3rd day of April 1969, within the Eastern District of New York, the defendants Rosk BERNSTEIN, also (Footnote continued gp following page) C18 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar Count 25 identifies the particular false document involved, that is, an application for mortgage insurance with respect to a particular property. It may also be noted that the Government provided a bill of particulars which specifically identified the statements in the documents which the Gov- ernment would seek to prove false at trial. A copy of the “Form 2900” for each false statement count was submitted to the jury with the statements alleged to be false circled in red by the court. We do not find any violation of either the Fifth or Sixth Amendment tu the United States Constitution or of Fed. R. Crim. P. 7(¢)(1). We have “consistently sustained in- dictments which tracked the language of the statute and, in addition, do little more than state time and place in approximate terms.” United States v. Salazar, 485 F.2d 1272, 1277 (2d Cir. 1973), cert. denied, 415 U.S. 985 (1974) ; United States v. Trotta, No. 75-1267 (2d Cir. Nov. 10, 1975), slip op. 473, 477; United States v. Tramunti, 513 F.2d 1087, 1113 (2d Cir.), cert. denied, 44 U.S.L.W. 3201 (U.S. Oct. 7, 1975). The indictments here in issue do just that. (Footnote continued from preceding page) known as Rose Shorenstein, Harry BErRNSTEIN, FLORENCE Benak, Ortrup KaprakKi, MeLVvVIN CaRDONA and EasTERN Servick Corporation, for the purpose of influencing the Fed- eral Housing Administration of the Department of Housing and Urban Development to insure a loan and advance of credit by the defendant Eastern Servick Corporation, did knowingly make, pass, utter and publish false statements in an applica- tion for mortgage insurance on property located at 416 52nd Street, Brooklyn, New York. (Title 18, United States Code, § 1010 and § 2). C19 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar The counts are particular in that they specify the prop- erty involved which serves to fix and identify the particu- ’ Jar false document. It is the submission of the false docn- ment which constitutes the separate crime. Tripp v. United States, 381 F.2d 320, 321 (9th Cir. 1967); Bins v. United States, 331 F.2d 390, 393 (5th Cir.), cert. denied, 379 U.S. 880 (1964). See Cohen v. United States, 178 F.2d 588, 591 (6th Cir. 1949), cert. denied, 339 U.S. 920 (1950). While some identification is required, United States v. Borland, 309 F. Supp. 280, 287-89 (D. Del. 1970); United States v. Devine’s Milk Laboratories, Inc., 179 F. Supp. 799 (D. Mass. 1960), it is not necessary that the indictment itself go into evidentiary matters. The offense was fully and clearly charged, since the indictment specified the time and place of the transaction and the submission of a particular false application in respect to a particular piece of prop- erty. United States v. Alo, 439 F.2d 751, 756 (2d Cir.) (indictment for obstructing justice by giving “false and evasive answers” before SEC sufficient although not speci- fying the false and evasive answers), cert. denied, 404 U.S. 850 (1971). See also United States v. Weiss, 491 F.2d 460, 466 (2d Cir.), cert. denied, 419 U.S. 833 (1974) (indictment for obstruction of justice by failing to produce documents before grand jury sufficient though it fails to specify in what way conduct was done corruptly). It is, of course, for just this reason that bills of particu- lars to be furnished pursuant to Fed. R. Crim. P. 7(f) may be sought, United States v. Debrow, 346 U.S. 374, 376-78 (1953), and must be provided to make certain that there is adequate notice under the Sixth Amendment. See United States vy. Alo, swpra, 439 F.2d at 756 n.13. The indictment C20 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar as amplified by the bill of particulars made clear to the appellants what was the nature and cause of the Govern- ment’s case and gave them ample opportunity to prepare their defense. See United States v. Sperling, 506 F.2d 1323, 1344-45 (2d Cir. 1974), cert. denied, 420 U.S. 962 (1975). Appellants also argue, however, that failure to specify the particular false statements in each of the separate counts allows no way of idetermining whether each false statement for which they were prosecuted was indeed the false statement that was considered by the grand jury. They rely on Russell v. United States, 369 U.S. 749 (1962), and Stirone v. United States, 361 U.S. 212 (1960), neither _ of which, however, would require the indictments here to be held defective for failing to specify each false statement. Stirone held improper the admission of evidence of an activity geographically different from that specifically charged in the indictment, but no such departure in proof from the specific allegations of the appellants’ acts oc- curred here. Russell required that where the specific sub- ject matter of a question refused answer by a defendant was central to every prosecution under 2 U.S.C. § 192, be- cause it constituted “the very core of criminality” to be proved, the indictment must specify the particular subject matter involved. Under 18 U.S.C. § 1010, however, the critical element of the offense is the mental state of know- ingly making false statements. Since the “core of crimi- nality” is not the substance of the false statements but rather that knowing falsehoods were submitted to the FHA, appellants have not heen subjected to second guessing by C21 — Appendiz C—Opinions of Second Circuit Court of Appeals in case at bar the prosecutor or the trial jury on the particular and essen- tial subject matter of this offense, that is, the existence of ‘ falsehoods in specific documents for specific properties.® [V. Disqualification of Appellant Behar’s Cownsel. Appellant Behar argues that she was unconstitutionally denied representation by counsel of her choice when the court found that an actual conflict of interest existed and refused to accept a waiver of any potential conflict of interest, ordering appellant’s attorney to terminate his representation of her. It was the Bernsteins’ attorney, Abraham Brodsky, who told Behar that he would get a lawyer for her, and indeed he did refer her to Henry Boitel, Esq. With her knowledge and consent Mr Boitel’s fee was being paid by the Bernsteins and ESC. Since Behar was a co-defendant, however, there was every possibility of a conflict of interest. A hearing was held, Mr. Boitel with- drew, appellant waived any conflict of interest, and the *° As we said in United States v. Fortunato, 402 F.2d 79, 82 (2d Cir. 1968), cert. denied, 394 U.S. 933 (1969), “the omission of the means by which the offense was committed does not render the in- dictment insuflicient.” Cf. Rosen v. United States, 161 U.S. 29, 34 (1896) (defendant not entitled to know particular parts of docu- ment which grand jury had found to be obscene); United States v. Ciramy, 510 F.2d 69, 73 (2d Cir. 1975) (manner of attempted evasion of income taxes not essential to indictment). Moreover, as we have said, the court’s charge on the question of false state- ments was perfectly proper because the jury was instructed to limit itself to determining whether there were false statements in any par- ticular application concerning employment and income therefrom and the mortgagee’s certificate; for the jury’s consumption in the jury room the court circled in red the particular statements which were alleged to be false. As appellant Behar explicitly concedes in her brief, “there was never any issue as to the fact that the statements were false . . . .” The only real issue was as to knowledge. C22 Appendix C—Opinions of Second Circuit Court of Appeals im case at bar court found that the waiver was not knowing and intel- ligent. The court then asked appellant Behar to retain new counsel, and if she was unable to do so to return and the court would appoint counsel for her. When she reappeared and said she could not afford to retain counsel herself, the court assigned Richard Rosenkrantz, Esq., as her attorney. Mr. Boitel has, it may be stated, ably represented her on appeal. We have repeatedly held, as have other courts, that representation free from conflicting interests is an essential part of the Sixth Amendment right to the effective assis- tance of counsel. See Glasser v. United States, 315 U.S. 60 (1942); United States v. DeBerry, 487 F.2d 448, 452 (2d Cir. 1973); United States ex rel. Hart v. Davenport, 478 F.2d 203, 209-10 (3d Cir. 1973); United States v. Foster, 469 F.2d 1, 4-5 (1st Cir. 1972); Lollar v. United States, 376 F.2d 243 (D.C. Cir. 1967). Choice of counsel should not be unnecessarily obstructed by the court, United States v. Sheiner, 410 F.2d 337, 342 (2d Cir.), cert. denied, 396 U.S. 825 (1969), but where there is a serious possibility that a definite conflict of interest will arise, the necessities of sound judicial administration require the court to take command of the situation. United States v. Dardi, 330 F.2d 316, 335 (2d Cir.), cert. denied, 379 U.S. 845 (1964). The standards of the American Bar Association have become increasingly strict on this subject. See ABA Standards Relating to the Prosecution Function and the Defense Function 43.5, at 211, 213 (Approved Draft 1971). See also P. Wilson, Pattern Rules of Court and Code Provisions 38-39 (prepared for the Committee on Implementation of Standards for the Administration of Criminal Justice of the Section of Criminal Justice of the ABA, 1975). C23 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar Plainly here there was a probability of conflicting and inconsistent defenses based upon corporate and individual ’ liability, since as an employee of ESC Behar could well take the stand and present a defense that her employers were the guilty ones because she was only obeying the orders of her superiors and following standard office pro- cedure. On their part, they could assert the defense that Behar had acted ultra vires and on her own. Indeed, these were the ultimate defenses advanced by each. Since the codefendants were underwriting Behar’s defense, this readily apparent conflict could be seen by the court to indicate a significant probability of prejudice. The freedom of the attorney, whether in cross-examination or assertion of the defense of lack of authority, could have been in- hibited and a full and uncompromised defense of his clients’ interests have been seriously impaired. While neither Judge Travia nor this court in any manner questioned the integrity of Mr. Boitel or his assurance that he would give Behar full and proper representation regardless of who was paying him, the court had a special duty to make certain that any waiver was knowingly and intelligently made."° Judge 'Travia’s questioning showed great sensitivity to the need for gauging the “knowing and intelligent” qualities of appellant Behar’s waiver, and it must have been statements of hers such as the following which gave him pause : I am in a frightening position so far as I am concerned. I have never before been a defendant and this case has changed, certainly, my life and my husband’s life . . . this is an involved case. If an attorney is appointed and we have about two month’s left—it is so comprehensive, there is so much to digest, T don’t know if it can be done to my comfort. (Footnote continued on following page) C24 Appendix C—Opimons of Second Circuit Court of Appeals m case at bar See United States v. DeBerry, supra, 487 F.2d at 452-54. But cf. United States v. Wisniewski, 478 F.2d 274, 285 (2d Cir. 1973). A waiver in this regard is not quickly or lightly to be found. See Glasser v. United States, supra, 315 U.S. at 70-71. The court’s interrogation of Mrs. Behar estab- lished that she was not prepared to have the court stand by and do nothing in the event an actual prejudicial action on the part of her lawyer arose. In other words, her waiver was not without strings. The district court handled the matter, we think, quite correctly, and Mr. Boitel withdrew quite correctly. See United States v. DeBerry, supra; Umted States v. Dardi, supra. We find nothing in the record to indicate that Mr. Rosenkrantz did anything other than what highly competent counsel would do, and nothing to indicate prejudice to appellant from his short infrequent absences. On this lengthy trial all counsel pinch-hit to a limited extent for one another; daily copy of the proceed- ings was available and the district court kept all counsel well informed and left open the right to make any motion as counsel wished. V. Impermissible Joinder and Denial of Severance Motions. Appellants Harry Bernstein, Rose Bernstein and ESC all contend that their convictions on the bribery counts should be reversed on the grounds of both impermissible ( Footnote continued from preceding page) I .m willing to sign a waiver because [ know the type— at least, | feel I know the type Mr. Boitel is. In addition, he has been part of this case for sixteen months. The new attorney, whoever he might be, is an unknown factor to me. I know Mr. Boitel well and as I say, | am exceedingly frightened. C25 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar joinder of offenses and of defendants and erroneous denial of their severance motions. But it is well established that ’ under Fed. R. Crim. P. 8(b)" joinder of multiple defen- dants is proper if they are alleged to have participated in the same series of acts which are part of a common scheme or plan, or connected together. Here joinder of a conspiracy count and the substantive counts arising out of the conspiracy is proper since the charge of conspiracy provides a common link and demonstrates the existence of a common plan. C. Wright, Federal Practice and Procedure (Criminal) § 144, at 322 (1974). See Schaffer v. United States, 362 U.S. 511, 514 (1960); United States v. Miley, 513 F.2d 1191, 1209 (2d Cir. 1975); United States v. Gran- ello, 365 F.2d 990, 993-95 (2d Cir. 1966), cert. denied, 386 U.S. 1019 (1967). Joinder here was clearly proper since all the substantive counts were alleged as overt acts in the conspiracy count. On the question of severance, again the matter is one for the trial court’s discretion. See Fed. R. Crim. P. 14; United States v. Projansky, 465 F.2d 123, 138 (2d Cir.), cert. denied, 409 U.S. 1006 (1972). See also United States v. Miley, supra; United States v. Papadakis, 510 F.2d 287, 300 (2d Cir. 1975); United States v. Granello, swpra, 365 1! Fed. R. Crim. P. 8 provides: (b) Joinder of Defendants. Two or more defendants may he charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count. C26 Appendix C—Opinions of Second Circuit Court of Appeals im case at bar F.2d at 944. Before trial the Government and the court had been scrupulous in cutting down the indictment and severing defendants therefrom. See note 3 supra. This indictment originally named 21 individual and two corpo- rate defendants and consisted of 211 counts. After assorted pretrial procedures, pleas of guilty, nolo contendre and assorted severances, the case went to trial with nine defen- dants. Furthermore, as a result of a motion by the Gov- ernment to sever various counts and upon direction by the court to limit the number of counts, the number of counts was reduced to 65. We believe in this regard that, subject only to the legal questions whether there was here charged and proved a single conspiracy and whether there was a prejudicial variance from such a charge and the actual proof, the basic underlying admonitions of United States v. Sperling, supra, 506 F.2d at 1340-41, have been followed. VI. Sufficiency of the Evidence. ESC contends that there was insufficient evidence to establish an intent to benefit it so as to support its conviction on the substantive counts charging bribery on Jet properties and aiding and abetting briberies on Kapraki properties. Appellant Rose Bern- stein contends there was a failure of proof to support her conviction of aiding and abetting Kapraki’s payment of bribes to Goodwin. Appellant Behar contends that there was insufficient evidence to establish the element of know]- edge required to support her conviction on the substantive false statement counts. And appellant Cardona claims that his convictions were based entirely on the testimony of accomplices and asks us to reconsider our prior holdings in this regard. C27 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar Four substantive bribery counts, on each of which one or more of the appellants were convicted, involved Kapraki properties. In each case, Kapraki directly paid a $100 bribe to Goodwin. ESC contends that these bribes were solely for the benefit of Mrs. Kapraki, and hence that ECS could not have been found to have aided and abetted them. While these payments did help to secure Goodwin’s ser- vices to her, the ultimate intent of the parties was to encourage Kapraki to process her applications through ESC, which would then benefit therefrom in the “points” it charged for each deal closed. Kapraki’s testimony estab- lishes that both Rose and Harry Bernstein and Florence Behar counseled Kapraki to bribe Goodwin on these prop- erties, and our recital of the facts indicates that the testi- mony from Kapraki, Goodwin, Cohen and Fey established the method used by the Bernsteins to arrange for Goodwin to be assigned to appraise these properties. By aiding and abetting the bribery, ESC and the Bernsteins successfully helped Kapraki to procure FHA approvals, and secured and kept her as a profitable client. ESC claims that appellant Harry Bernstein intended only to benefit himself and not ESC in connection with the 14 counts involving his Jet properties, as to each of which SSC and Bernstein were convicted of bribing Goodwin. Bernstein, however, was the president and sole stockholder of ESC as well as the sole owner of Jet. Clearly he did intend to benefit himself, but his bribery had the neat effect of benefiting his interests in both capacities. ESC argues that Bernstein had two completely separate businesses, namely, operating ESC and speculating in real estate C28 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar through Jet, and that his bribes may be viewed only as acts with the intent to further Jet’s and thus his own profits. But evidence of the reality of an inextricably dual intent could not have been ignored by the jury: that is the intent to benefit ESC’s interests as well as Jet’s interests, both of whose profits would inevitably inure to Bernstein’s personal benefit. Here again ESC was the approved mort- gagee used to process Jet’s applications, and if they were approved by the FHA, ESC would stand to make a gross profit on each property; it was in the interests of ESC to obtain a favorable appraisal from Goodwin and to have each deal closed. Furthermore, the greater the evaluation of each property, the higher the mortgage amount might become, and accordingly the more gross profit ESC would stand to make in points charged. There was sufficient evi- dence for the jury to find an intent by Bernstein to further the interests of ESC, and thus to convict ESC on the Jet bribery counts. Our summary of the evidence established clearly that Behar, who had the responsibility of signing the mort- gagee’s certificate on behalf of ESC, acted in the very least with a reckless disregard whether the statements made in the Form 2900 credit reports were false. She gave Kapraki blank verification of employment forms in violation of FHA regulations; she accepted Kapraki’s statements that a coincidentally large number of her applicants were em- ployed at the Bocar gas station; she ignored the warning of an experienced processor, Fey, who told her that she was accepting phony applications. She was receiving money on the side from Kapraki on each particular property; she C29 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar was concerned about getting the “right” man in the credit section to examine and approve Kapraki’s applications, and getting the “right” appraiser for her also; she never sent anyone out to check on the truth of the representations she was verifying, even when they were questioned by FHA or Dun & Bradstreet credit examiners. See United States v. Levinson, 405 F.2d 971, 986 (6th Cir. 1968), cert. denied, 395 U.S. 958 (1969). Although Behar may not have had the authority to stop processing Kapraki’s applica- tions, she did have authority to report irregularities. Her failure to do so in the face of Kapraki’s delinquency rate and heavy use of the same accountant, Blow (whose finan- cial statements were in March, 1969, declared permanently unacceptable at ESC by Fey), together with the other evidence outlined above, was sufficient to support Behar’s conviction on the false statement counts. Appellant Cardona seeks a ruling that a guilty verdict may not rest upon the uncorroborated testimony of ac- complices, in light of our decision in Umited States v. Taylor, 464 F.2d 240 (2d Cir. 1972). In Taylor, however, this court expressly limited itself to overruling United States v. Feinberg, 140 F.2d 592 (2d Cir.), cert. denied, 322 U.S. 726 (1944), which had held that the quality of evidence necessary to send a case to the jury in a criminal case was the same as in civil cases. There was no discussion in Taylor concerning the use of accomplice testimony, and, indeed, this court has consistently held that conviction upon such testimony is proper. See, e.g., United States v. Mes- sina, 481 F.2d 878, 881 (2d Cir. 1973), cert. denied, 414 U.S. 1145 (1974); United States v. Ferrara, 458 F.2d 868, C30 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar 871 (2d Cir.), cert. dened, 408 U.S. 931 (1972). Ap- pellant has presented no arguments as to why our prior holdings should be overruled. The testimony of Kapraki and accountant Abad was corroborated here by documen- tary evidence, moreover, including specifically checks rep- resenting some of Kapraki’s payments to Cardona for the false financial statements concerning self-employment. VII. Single Conspiracy and Variance. All appellants argue vigorously that while the indictment charged only a single conspiracy the proof at trial showed multiple con- spiracies. All appellants except Cardona contend that the court failed to charge the jury properly on the single con- spiracy issue. Appellant Cardona claims that since he was not involved in the bribery of FHA appraisers he is en- titled to a new trial even if a single conspiracy is found. Presumably all of these arguments would be all the more vigorous in the light of our decision a short time ago in United States v. Bertolotti, No. 75-1107 et seq. (2d Cir. Nov. 10, 1975), slip op. 6409. There we reversed a convic- tion obtained in a narcotics case on the basis of a single conspiracy on the ground that the proof showed none such but rather a series of smaller conspiracies with a resultant material variance and a spillover effect involving the trans- fer of guilt from members of one conspiracy to another. But see United States v. Steinberg, No. 75-1150 (2d Cir. Nov. 10, 1975), slip op. 6433, 6444. We think that the proof here was such as to entitle the jury to find but a single conspiracy. See United States v. Tramunti, supra, 513 F.2d at 1105-07; United States v. Sperling, supra. C31 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar The conspiracy count charged was a single one, to de- fraud the FHA by obtaining mortgage insurance on inner ‘city properties. The two objects charged, or the two steps by which the principal object of the conspiracy were ob- tained, were to bribe FHA officials in connection with their appraisals and to submit to the FHA false statments of the putative mortgagor’s credit, employment or income in order to obtain approval of the mortgage insurance applications. Appellants contend that the transactions sur- rounding the Kapraki properties constituted a different conspiracy from those concerning the Jet properties, and that these conspiracies had unrelated purposes and no connection between them. Here, however, it is not the case that two groups, one organized by Kapraki for her benefit and another by Harry Bernstein for his, existed indepen- dently of each other with the coincidence that both of them used the services of the same FHA employee, Goodwin. The pattern of conspiracy here thus does not resemble that of the independent conspiracies in Kotteakos v. Umited States, 328 U.S. 750 (1946), and appellants’ reliance on Kotteakos is foreclosed by the substantial evidence of a single conspiracy. As our review of the facts reveals, it was Harry Bern- stein as president of ESC and its principal officer who was at the very center or top of the conspiracy. It was Harry and Rose Bernstein who initiated the bribery rela- tionship with Goodwin at the ESC office and who then provided Goodwin’s services to their own client Kapraki. They were able to obtain the assignment of appraisals to Goodwin because of friendly relationships with Cronin and C32 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar Cohen in the FHA office, indeed, on Cohen’s part, a rela- tionship founded in further bribery. The Bernsteins would activate this use of Goodwin upon the requests of Behar, who together with the Bernsteins informed Kapraki that she could get the “right” appraiser, but that they would have to be taken care of, that is, bribed for a high appraisal. There was ample evidence to indicate that the bribery of Goodwin and the induction of Kapraki into using his ser- vices was done with the intent to benefit ESC in profits from points charged Kapraki. ESC, it should be noted, as Jet’s processor, benefited in the same way from Jet prop- erty overevaluations. Although Rose Bernstein was neither an officer nor an employee of ESC, she was intimately involved in its affairs and operations, and, whether the properties were Jet’s or Kapraki’s, she participated with her husband in obtaining the unlawful services of Goodwin to inflate values. The desires of the Bernsteins to facilitate Kapraki’s FHA approvals, for the benefit of ESC, extended to aequiesc- ing in the submission of false statements, which activity was participated in most directly by ESC emplovees Behar and Cardona. Harry Bernstein closed his eyes to any irre- ularities in the Kapraki applications despite two instances of their integrity being questioned by his vice president, Fey. When Fey reported to both Bernsteins that he be- lieved the Blow financial statements were frauds, they told him that it was up to the FHA to realize this, and Rose Bernstein reminded him of the number of points ESC was charging Kapraki for its processing. Here, unlike Kot- teakos, supra, not only were the Bernsteins and ESC the central pivots of the scheme to defraud the FILA, but their C33 Appendiz C—Opinions of Second Circuit Court of Appeals in case at bar activities and those of their coconspirators were linked through the common means of using the same FHA officials to achieve their common goal of benefiting ESC by defraud- ing the FHA. It is immaterial that Kapraki entered the scheme after it had started and that in connection with her properties there were additional elements of false statements which evolved. As the Court in Blumenthal v. United States, 332 U.S. 539 (1947), indicated, “[C]on- spiracies involving such elaborate arrangements generally are not born full-grown. Rather they mature by successive stages which are necessary to bring in the essential par- ties.” Id. at 556. Appellant Behar argues that even assuming the evidence established a single conspiracy there was insufficient evi- dence that her participation went beyond the applications of Mrs. Kapraki. She argues that the so-called “single act doctrine” is applicable to her. See United States v. Sperl- ing, swpra, 506 F.2d at 1342; United States v. Torres, 503 F.2d 1120, 1123 (2d Cir. 1974). But Behar was involved in a number of acts. Indeed, she was convicted of 18 false statement and three bribery counts. Her connection was, moreover, near the center of the conspiracy as head of the processing section of ESC. She played an active role in bringing Kapraki into the bribery phase of the conspiracy, making it clear to Kapraki that she should get the “right appraiser.” The evidence is clear that she was aware of the Bernsteins’ similar arrangements with respect to non- Kapraki properties. Since she was thus aware that the scheme was broader than her participation as an individual, she is bound by the acts of her co-conspirators. See e¢.g., ans C34 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar United States v. Edwards, 366 F.2d 853, 867 (2d Cir. 1966), cert. denied, 386 U.S. 908 (1967). Appellant Cardona claims that since the Government produced no evidence connnecting him with the bribery- overevaluation aspect but only with the false statement phase of the conspiracy, he was substantially prejudiced by the bribery evidence and is entitled to a new trial. There was, however, ample evidence of a common goal by all the conspirators to thwart the operation of the FHA loan guaranty program in obtaining FHA insurance of ESC processed mortgages. , This is not the first time we have been presented with a single conspiracy in the furtherance of which different crimes were committed, or, indeed, in which one cocon- spirator joined in one of the illegal objects of the con- spiracy but not in others. See United States v. Levinson, supra (VA home loan guaranty program). See also United States v. Kelly, 349 F.2d 720, 755-56 (2d Cir. 1965), cert. denied, 384 U.S. 947 (1966); United States v. Ben- jamin, 328 F.2d 854, 864 (2d Cir.), cert. denied, 377 U.S. 953 (1964) (two aspects of single scheme—selling un- registered securities and defrauding in sale of securities). As we said in United States v. Borelli, 336 F.2d 376, 384-87 (2d Cir. 1964), cert. denied, 379 U.S. 960 (1965), where the evidence is ambiguous as to the scope of the agreement made by a particular defendant and the issue has practical importance, the court must ap- propriately focus the jury’s attention on that issue rather than allow it to decide on an all or nothing basis as to all defendants. Cau Appendix C—Opinions of Second Circuit Court of Appeals im case at bar 336 F.2d at 386 n. 4. This is exactly what the trial court did in our case, just as it had omitted to do in Borelli. Judge Travia charged the jury that it could find Cardona to be a member of the conspiracy if the scope of his agree- ment included one of the objects of conspiracy, provided that the jury first found that the single conspiracy charged did exist and that the seope of agreement made by at least two of the conspirators included both objects of the con- spiracy. See United States v. Levinson, supra, 405 F.2d at 989 ; United States v. Dardi, supra, 330 F.2d at 327; United States v. Benjamin, supra, 328 F.2d at 864. Cf. United States v. Papadakis, swpra, 510 F.2d at 297; United States v. Arroyo, 494 F.2d 1316, 1318-19 (2d Cir.), cert. denied, 419 U.S. 827 (1974). The jury was instructed repeatedly by the court that there was no evidence in the case con- necting Cardona with the bribery object of the conspiracy. Here there was sufficient evidence to find a single continuing conspiracy by coconspirators including the Bernsteins, ESC, Behar and Kapraki, and to find that Cardona had joined with Kapraki, Abad and Blow, in a portion of the single conspiracy, the products of his frauds going unquestioned, indeed, by Behar, ESC and the Bernsteins. Here, as in Borelli, supra, what were required were appropriate instructions as to the scope of the agreement made by Cardona. These instructions were given here, and they were proper. As for any prejudice to Cardona, there was overwhelming evidence of his participation in the false statement frauds, making this hardly the case “where a minor participant in one conspiracy was forced to sit through weeks of damaging evidence” relating to others. United States y. Miley, supra, 513 F.2d at 1209. C36 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar Cardona points out that one month at trial concerned the CUP prerogative of Cronin and one month the bribing of Goodwin. Cronin, it should be noted, was not convicted, and Cardona’s own participation in the false statement scheme was so substantial that in a nine month trial we cannot find any significant prejudice from bribery testimony which the jury was instructed repeatedly did not connect Cardona to the conspiracy. The appellants Harry and Rose Bernstein, ESC and Behar also argue that the trial court failed properly to instruct the jury that it must find a single conspiracy and not multiple conspiracies. However, the court explained the essential elements of the crime of conspiracy, focused the jury’s attention in compliance with Borelli on the importance of determining whether each defendant became a member of the conspiracy and the scope of his or her agreement, and instructed the jury that it might find all, none or some of the defendants guilty or not guilty on the conspiracy count. The court instructed the jury that Count 1 “charges a single conspiracy having two objects or goals, and the burden is upon the Government to prove that charge as it’s made beyond a reasonable doubt.” In dis- cussing membership in the conspiracy the court again emphasized that the jury must find that the single con- spiracy charged in the indictment existed,’ and in dis- 12 The court’s exact words were : Now, in order to find that a particular defendant has become a member of the conspiracy, it is not necessary to find that the defendant knew or was aware of both objects of the alleged con- spiracy if you find bevond a reasonable doubt that the scope of (Footnote continued on following page) C37 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar cussing the overt act element of the conspiracy the court reminded the jury that to convict it must find beyond a reasonable doubt that the single conspiracy having two objects as charged had been proved. VIII. Prosecutorial Mismanagement. The claim is that the appellants were deprived of a fair trial by the sheer length of the trial allegedly caused by prosecutorial mis- management. We have already stated, however, that the Government and the court here anticipated what was said in United States v. Sperling, supra, after the instant trial had commenced, by severing a number of defendants, reducing the number of counts, and making the case relatively manageable. See note 3, supra. It is, of course, always true that there can be some spillover and prejudice resulting when the conspiracy net is cast too wide, and draws in too many participants and too many hearsay statements. See Kotteakos v. United States, swpra, 328 U.S. at 773. See also United States v. Dardi, supra, 330 F.2d at 329. The ultimate question is whether the number of defendants and complexity of the cause prevents the jury from appraising the independent evidence against each defendant and meting out individual justice under the law. See Umted States v. Stromberg, 268 F.2d 256, 264-65 (2d Cir.), cert. dened, 361 U.S. 863 (1959). Here it was, of course, necessary, to present both a good deal of back- ( Footnote continued from preceding page) the particular defendant’s agreement included one of the ob jects of the conspiracy provided that you first find that the single conspiracy charge in the indictment exists, and that the scope of the agreement made by at least any two of the defend- ants included both objects of the conspiracy. The charge on conspiracy was atlapted from suggested instructions concerning multiple conspiracies in E. Devitt & (. Blackmer, Fed- eral Jury Practice and Instructions ¢¢ 29.14, 29.15 (1970 ed.). C38 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar ground evidence to show the operations of the FHA and the context in which these criminal activities took place, and it was also necessary to introduce evidence as to a substantial number of transactions in order to present the true nature and scope of the criminal scheme. The bribery issues, on the other hand, ultimately boiled down to ques- tions of credibility of the witnesses; on the false statement counts knowledge of falsity was the key issue, which was in turn dependent to a great extent on the credibility of the "overnment witnesses. While it is not always necessarily wise to draw conclu- sions after the fact, the jury in this case does seem to have acted with extraordinary conscientiousness and sophistica- tion. From time to time it asked for the relevant exhibits, for parts of the charge to be read, and even specifically for the charge regarding particular counts and particular de- fendants, indicating that it focused on each count and each defendant separately. The jury acquitted one defendant and was not able to reach a unanimous verdict as to three other defendants’ who were not central figures in the scheme. Appellant ESC and appellants Harry Bernstein and Rose Bernstein were each acquitted on three bribery counts. Appellant Behar was acquitted on one bribery count. Such a performance by the jury belies appellants’ claims that the length of the trial and the volume and com- plexity of the evidence disabled its members from evaluat- ing and applying the evidence to the individual defendants. This kind of crime is, furthermore, extraordinarily diffi- cult to prove. It must be proven in bits and pieces. If it 13 See note 1 supra. C39 Appendix C—Opinions of Second Circuit Court of Appeals im case at bar is broken down into too many charges, too isolated trans- actions, too many fragments, the concept of the crime is impossible to comprehend. We think that a conscientious prosecution managed to delimit the issues, narrow the trial and yet satisfactorily demonstrate a pattern which consti- tuted the overall crime. The claim of prosecutorial mis- management is, in our view, utterly without ‘merit. IX. The District Court’s Interrogation of Mrs. Cardona. Appellant Cardona argues that he was deprived of a fair trial as a result of the court’s interrogation of Mrs. Car- ilona. Compare United States v. Nazarro, 472 F.2d 302, 304 (2d Cir. 1973), with United States v. Miley, supra, 513 F.2d at 1205. See also United States v. Natale, No. 75-1276 (2d Cir. Nov. 28, 1975), slip op. 793, 804-06. This interrogation concerned events taking place after the FBI commenced its investigation of this case. In August, 1971, Cardona had met at his home with an agent of the FBI, one James Sniegocki. Later that day Kapraki came to Cardona’s house in response to the latter’s call and Mrs. Cardona began to relate, on direct examination, the substance of the conversation between Kapraki and Cardona. We attach extracts of this testimony in the margin.* Cardona asserts that the court’s subsequent intervention was a “vicious” cross-examination, indicated disbelief in the witness’s testi- mony and was an attempt to put words in her mouth. *Q. What, if anything else happened during that conversation ? A. My husband keep asking her to please to talk to the FBI and to do it without her lawyer and they kept— The Court: To do it, what? The Witness: Without her lawyer. The Court: Whose lawyer? (Footnote continued on following page) C40 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar In our estimation, in these passages the court was not indicating its belief in the defendant’s guilt or its disbelief in the witness’s testimony, nor was it pushing Mrs. Car- dona into altering that testimony. The testimony was un- clear and it needed clarifying. At one point the court either (Footnote continued from preceding page ) The Witness: Kapraki’s lawyer. The Court: In other words, your husband was telling her what to do without his lawyer? The Witness: Without her lawyer. The Court: Without her lawyer? The Witness: According to the conversation that my husband had with Agent Sniegocki. The Court: He wanted Mrs. Kapraki to tell Agent Sniegocki what your husband told Sniegocki, is that what you mean? The Witness: My husband asked Ortrud Kapraki, in his own words he said, “Please, Ortrud, if you have done something wrong, it’s better that you talk to the FBI by yourself, because this way you will feel better.” The Court: ‘Then you said something in accordance with— The Witness: Because— The Court: Did you say that? The Witness: Yes. The Court: Your husband said, “In accordance with my conver- sation [sic]. The Witness: You want me to repeat it? The Court: Yes. The Witness: Yes, you want me to repeat the conversation with my husband, with Sniegocki— The Court: I’m only interested right now in the conversation between Mrs. Kapraki, vour husband and you in your living room or parlor, as vou call it. The Witness: All right. He—he said to Ortrud Kapraki that it was better for her—It was—It was better for her to confess to the FBI without her lawver. (‘41 Appendix C—Opinions of Second Circuit Court of Appeals mm case at bar misunderstood or did not hear the witness clearly, surely not an unforgivable sin in the course of a lengthy trial with, so far as appears, a witness who might have been difficult to understand.’* The witness’s phrase “according to the conversation that my husband had with agent Snie- goeki” was also susceptible to assorted interpretations. The court was trying to determine whether Cardona was telling Mrs. Kapraki to tell the FBI what he had told the FBI agent or whether Cardona had told Kapraki that she would he better off if she confessed without a lawyer. When the court said “no, no.”"* the judge was simply indicating that he wanted the witness to testify as to the conversation with *® See note 14 supra regarding the context of the interrogation where the court inquired as to whose lawyer Kapraki was told to speak to the FBI without. Throughout the testimony of Mrs. audibility and comprehension evidently were made difficult by a soft voice, rapid speech, a language barrier or a combination of these. She was asked to speak up at least five times in the course of her testimony. ont Following the colloquy cited, note 14 supra, the court went on to The Court: You said earlier something about, he told her something about the FBI, something in accordance with the way I og him, what did you mean by that? Fitness: According to w legocki one aden ng hat the Agent Sni asked The Court: No, no. Mr. Klein: 1 submit, your Honor, that is an answer. The Witness: Yes, your Honor. a Court: Say that again. Witness: According to what A i simone 2 ng t Agent Sniegocki have asked The Court: ‘That is what vour husband told her ? The Witness: Yes. The Court: You may proceed, Mr. Klein. C42 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar Kapraki, not the conversation with Sniegocki. In the end even with the attempts at clarification the matter was so muddled that Cardona’s counsel went over the entire con- versation again. A federal district judge has, as we have repeatedly said, a duty to attempt to clarify the witness’s testimony and to get the jury to understand the evidence. See United States v. Natale, swpra. Judge Travia’s limited intervention can sustain no claim of prejudice by Cardona. X. The Charge on the False Statement Counts. Perhaps appellants’ strongest argument is, especially if we Judge by the dissent, in respect to the charge on the false statement counts. ESC, Harry Bernstein and Behar all contend that the trial court’s charge on the element of “knowledge” applicable to the false statement counts and the false statement object of the conspiracy was erroneous. The court alternatively charged “knowledge” in terms of “con- scious avoidance” and “recklessness” and it is the “reckless- ness” portion here attacked. 17 The conscious avoidance charge given was proper under United States v. Brawer, 482 F.2d 117, 128-29 (2d Cir. 1973), cert. denied, 419 U.S. 1051 (1974), and United States v. Jacobs, 475 F.2d 270, 287-88 (2d Cir.), cert denied, 414 U.S. 821 (1973). However, there is no way of knowing on which basis the jury decided the case so that if the recklessness charge were erroneous the false statement counts and conspiracy count must fall. We should add that use of the “reckless disregard” charge in this case is not inconsistent with United States v. Bright, 517 F.2d 584 (2d Cir. 1975). Bright requires that a charge that knowledge of falsity can be inferred from reckless disregard of the truth must be “balanced” by a charge that actual belief in the truth of the state- ment negates knowledge of falsity. The record shows that Judge Travia expressly gave this “balanced” charge twice (C463, C511). We do not think that he had to do this again. (43 Appendix C—Opinions of Second Circuit Court of Appeals im case at bar Following proper instructions that specific intent was necessary and proof of mere negligence insufficient to convict, the court charged that the element of knowledge was satisfied by proof beyond a reasonable doubt that a defendant recklessly stated as fact things of which he was ignorant or acted with « reckless disregard of whether the statements made were true. Despite appellants’ vigorous protestations to the contrary we have no difficulty in find- ing such a charge just as proper here as in the case of Securities Act violations. See United States v. Benjamin, supra, 328 F.2d at 862-63. See United States v. Squires, 440 F.2d 859, 863-64 (2d Cir. 1971) (in areas of fiduciary responsibility under the securities laws “persons issuing statements are under an affirmative duty to investigate, and it is entirely appropriate to include ‘should have known’ within the definition of ‘know’”). ESC, Bernstein and Behar knew that the FHA was relying on the Form 2900’s submitted, and the mortgagee’s certificate’s declaration that the information was “true and complete to the best of its knowledge and belief” carries this obligation at least. The problem is that the court went on to attempt to describe the duty of the parties, of ESC as an FHA- approved mortgage lender and of Bernstein and Behar as key officers of such, with the evident purpose to give the jury some standard for determining whether there was such a reckless disregard of the facts as to amount to knowledge of the falsity of the Form 2900’s. Judge Travia originally said that the duty was “to insure” that the statements made in the application were true, apparently borrowing the phrase from our opinion in United States v. Andreadis, 366 F.2d 423, 430 (2d Cir. 1966) (an alternative ground in (44 Appendix C—Opinions of Second Circuit Court of Appeals in case at bar holding that the Government proved knowledge of falsity was that the defendant failed totally to discharge “affirma- tive duty to insure” advertising claims were true), cert. denied, 385 U.S. 1001 (1967). Conceiving, correctly we think, that a “duty to insure” rather overstates the mort- gagee’s responsibility—“reasonably to assure itself” would be more accurate—the judge below proceeded to clarify the nature of the mortgagee’s duty, describing it as “a duty to investigate and exercise proper credit judgment.” It is this portion of the charge to which the strongest objection is lodg [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_0084%3A1. Public record. Not legal advice.