Petition — Beck v. United States

80-1723

Office-Supreme Court, U.S.

FILED

I atnigncieddenntcsen

app 18 1981

In the

I-

Supreme Court of the Hnited States

OcToBER TERM, 1980

ROBERT K. BECK,

Appellant,

US.

UNITED STATES OF

AMERICA,

Appellee.

PETITION FOR WRIT OF CERTIORARI

(Questions presented for review)

1. Did the Trial Court err in refusing to dismiss the

entire case as a result of the grant of immunity which Ap-

pellant had received from the State of Colorado?

2. Did the Court err in denying a Motion for Judg-

ment of Acquittal because the evidence presented at trial

was insufficient to support a conviction?

J. Terry WiIcGcINs

710 East Speer Boulevard

Denver, Colorado 80203

(303) 777-1773

Attorney for Appellant.

gl tt oe ae

i

TABLE OF CONTENTS

Page

(Reports of the case in the Court below) 2

(Grounds on which the jurisdiction of this

Count i: ivebed). x... ee

(Citations of law involved in this case) __. con

(atements of the case)... ee 4-6

(Arguments for allowance of the Writ) _.. 6-12

Appendix

a. Partial Opinion of the United States

Court of Appeals 0... AEA

b. Reporter's Transcript of Oral Argument

on Post-Trial Motions

(Court's Ruling) ee

c. Reporter’s Transcript of

fey Fe eee Cl -C-9

—

bt

ll

TABLE OF AUTHORITIES

Cases: Page

Kastigar v. United States, 406 U.S. 441, 32

L.Ed.2d 212, 92 S.Ct. 1653 (1972) 7, 8

Maxfield v. United States, 360 F.2d 97

(10th Cir. 1966) ; — ey!

Murphy v. The Water Front Commission of

New York, 378 U.S. 52, 12 L.Ed. 2d 678,

84 S.Ct. 1591 (1964) 6

New Jersey v. Portash, 440 U.S. 450 (1979) 8

United States v. Foshee, 578 F.2d 629

(5th Cir. 1978) Bato . 1]

United States v. Greene, 497 F.2d 1068

(7th Cir. 1974) : 10

United States v. Nance, 502 F.2d 615

(8th Cir. 1974) - - ae 10

Wheeler v. District Court, 519 P.2d 327 (1974) 6

Other Authorities:

Colorado Revised Statutes 13-90-118

(1973 as amended) pebeeess ‘ 2, 3, 6

Title 18, United States Code, §2 3, 4

Title 18, United States Code, §1341 2, 4

Title 28, United States Code, §1254(a) 2

Rules 17 and 20, Rules of the Supreme Court

of the United States __- os EE FBR 2

IN THE

Supreme Court of the United States

OcToOBER TERM, 1980

ROBERT K. BECK,

Appellant,

vs.

UNITED STATES OF

AMERICA,

Appellee.

PETITION FOR WRIT OF CERTIORARI

(Questions presented for review)

1. Did the Trial Court err in refusing to dismiss the

entire case as a result of the grant of immunity which Ap-

pellant had received from the State of Colorado?

2. Did the Court err in denying a Motion for Judg-

ment of Acquittal because the evidence presented at trial

was insufficient to support a conviction?

2

1. (Reports of the case in the Court below)

Appellant, Beck, was convicted in a jury trial on three

counts of a six-count indictment for mail fraud in violation

of Title 18 U.S.C. §1341 and 2. Appellant was convicted

in the United States District Court for the District of Colo-

rado, and judgment against Appellant was entered on Janu-

ary 19, 1978. Certain matters had been reserved for decision

until after trial, and on February 21 and 22, 1978, various

defense motions were heard and denied. On May 12, 1978.

Appellant, Beck, was sentenced to the custody of the At-

torney General for a period of two years. An appeal was

taken to the United States Court of Appeals for the Tenth

Circuit and assigned number 78-1508, and an opinion of

the Court of Appeals was filed on November 6, 1980, and

not designated for publication.

2. (Grounds en which the jurisdiction of this Court

is invoked)

The date of the judgment sought to be reviewed was

filed in the United States Court of Appeals for the ‘Tenth

Circuit on November 6, 1980. Petititon for Rehearing

With Suggestion for Rehearing En Banc was filed in the

United States Court of Appeals for the Tenth Circuit on

November 20, 1980. The Petition for Rehearing was de-

nied by the United States Court of Appeals for the Tenth

Circuit on February 20, 1981. The jurisdiction of this

Court is invoked under Title 28 U.S.C. §1254(a) and Rules

17 and 20 of the Rules of the Supreme Court of the United

States.

3. (Citations of law involved in this case)

Colorado Revised Statutes 13-90-118 (1973 as

amended)

“When in the judgment of any district attorney,

attorney general, or special prosecutor of the state

of Colorado the testimony of any witness or the

3

production of any books, papers, or other evidence

by any witness in any case or proceeding before

any court of the state of Colorado or before any

grand jury of the state of Colorado, upon the con-

sent of such grand jury, involving any violation of

the penal laws of the state is necessary to the pub-

lic interest, he may make application to the court

that the witness be instructed to testify or produce

evidence subject to the provisions of this section.

Upon order of the court, the witness shall not be

excused from testifying or from producing books,

papers, or other evidence on the grounds that

the testimony or evidence required of him may

tend to incriminate him or subject him to a

penalty or forfeiture; but no such witness may be

prosecuted or subjected to any penalty or for-

feiture for or on account of any transaction, mat-

ter, or thing concerning which he is compelled,

after having claimed his privilege against self-

incrimination, to testify or produce evidence, nor

may testimony so compelled be used as evidence

in any criminal proceeding against him in any

court, except a prosecution for perjury in the

first degree or contempt committed while giving

testimony or producing evidence under compul-

sion as provided in this section.”

Title 18 United States Code G2

“(2) Whoever commits an offense against the

United States or aids, abets, counsels, com-

mands, induces or procures its commission, is

punishable as a principal.

(b) Whoever willfully causes an act to be done

which if directly performed by him or an-

other would be an offense against the United

States, is punishable as a principal.

4

Title 18 United States Code §1341

“Whoever, having devised or intending to devise

any scheme or artifice to defraud, or for obtain-

ing money or property by means of false or frau-

dulent pretenses, representations, or promises, or

to sell, dispose of, loan, exchange, alter, give away,

distribute, supply, or furnish or procure for un-

lawful use any counterfeit or spurious coin, obli-

gation, security, or other article, or anything rep-

resented to be or intimated or held out to be

such counterfeit or spurious article, for the pur-

pose of executing such scheme or artifice or at-

tempting so te do, places in any post office or au-

thorized depository for mail matter, any matter

or thing whatever to be sent or delivered by the

Postal Service, or takes or receives therefrom, any

such matter or thing, or knowingly causes to be

delivered by mail according to the direction there-

on, or at the place at which it is directed to be

delivered by the person to whom it is addressed,

any such matter or thing, shall be fined not more

than $1,000 or imprisoned not more than five

years, or both.”

4. (Statement of the case)

Appellant was charged in the United States District

Court for the District of Colorado with mail fraud in vio-

lation of Title 18 U.S.C. $1341 and 2. Original jurisdiction

in the United States District Court was acquired in the first

instance by the allegations of violations of Federal Criminal

Statutes.

Before the trial in this matter, Appellant filed a Mo-

tion for dismissal of the case, the basis of which was that

5

Appellant had previously been granted immunity from

prosecution by the State of Colorado.

All rulings were reserved on the Motion until! after the

trial had concluded. On February 21 and 22, 1978, a hear-

ing was held.

Appellant demonstrated at the hearing that he had

been given witness immunity by State authorities in ex-

change for his testimony before a Special Grand Jury in

the State Courts which was investigating the very same

series of transactions that ultimately became the basis for

this prosecution. Appellant also demonstrated that as a re-

sult of his Grand Jury testimony the state had made use of

his immunized testimony in the issuance of search warrants

tor the books and records of O'Keefe, Baldwin and Asso-

ciates. Use of Appellant's immunized testimony was demon-

strated by the fact that the United States Attorney's Office

had in their possession the transcript of the Grand Jury tes-

timony during cross-examination of Appellant during trial.

The immunized testimony was also used by the State au-

thorities in providing the postal authorities with a list of

names and address of various witnesses. At the conclusion

of the evidence the Motion to Dismiss was denied by the

Trial Court as he found that the evidence was “free of

taint’. The Court, however, did find that Appellant had

in fact received witness immunity

At the close of the prosecution's case, and again at the

close of all of the evidence, Appellant moved for a judg-

ment of acquittal alleging in part that the evidence was in-

sufficient to support a conviction in this case. From the re-

turn of inconsistent verdicts, it is clear that the jury did not

decide that the sales program was a scheme or artifice to

defraud. Despite the verdicts returned, the Court found

the sales method to be a fraudulent scheme. Appellant was

not allowed to present any evidence of the value of the real

6

property at issue: evidence that was essential to a deter-

mination of whether the alleged victims were defrauded

out of money or some other thing of value. Because of the

fact that the Appellant was precluded from presenting

evidence about value, he was deprived of his right to pre-

sent a defense which would have shown the lack of any

intent to defraud the alleged victims. The Court, however,

denied the Motion.

5. (Arguments for allowance of the Writ)

I.

At the post-trial hearing, two representatives of the

Colorado Bureau of Investigation testified regarding an

investigation that had previously been concluded by the

State of Colorado. The testimony of Officer Ralph Ruzicka

and Special Prosecutor, Harold Haddon, who was conduct-

ing the Grand Jury in Pueblo, Colorado, makes it apparent

that Appellant, Beck, was assured witness immunity in ex-

change for his testimony before the Special Grand Jury.

The ~ rial Court determined that the Appellant, Beck, had

in fact been granted witness immunity even though it was

done informally and without benefit of a State Court Order.

Under the Colorado Revised Statutes, 13-90-118 (1973

as amended), witness immunity under state law can only

be transactional immunity. See Wheeler v. District Court,

519 P.2d 327 (1974). In Murphy v. The Water Front Com-

mission of New York, 378 U.S. 52, 79, 12 L.Ed.2d. 678,

84 S.Ct. 1591 (1964), this Court decided that a state wit-

ness could not be compelled to give testimony which could

be used by Federal officials in connection with a Federal

criminal prosecution, deciding in effect that even the grant

of transactional immunity in State Court amounts to a grant

of both use and derivative use immunity if the same trans-

action or series of transactions is to be prosecuted in Fed-

=

‘

eral Court. In theory, this leaves a Defendant in the same

position relative to the Federal authorities that he was

in prior to the time he received immunity. Aastigar :

United States, 406 U.S. 441, 32 L.Ed. 212, 92 S.Ct. 1655

(1972).

rhe testimony in the post-trial hearing held in this

case indicates that all of the records of O'Keefe, Baldwin

and Associates came into the custody of the State authori

ties as the result of search warrants and that part of the in-

formation used to obtain those search warrants was acquired

from Appellamt, Beck. Testimony also established that

there were meetings between the State and Federal author

ities regarding coordinating the investigations that were

being carried on by both sovereigns. The hearing is replete

with testimony that all records in the hands of the State

authorities were available to the postal authorities at any

time to rumage through those records and find anything

that might be helpful to their case. Agent Williams of

the Colorado Bureau of Investigation further testified that

he gave the name of Terry Robinson, and the names of

other witnesses to the postal authorities in reference to

the Federal investigation of this case. Terry Robinson and

his wife Rose were two of the government's key witnesses

in attempting to put this case together. Agent Williams

also testified that the file on Don Adams, who was the

alleged victim in Count I of the Indicament, was given to

postal authorities as well, but it is unclear where this file

came from.

In addition, the evidence is clear that the United

States Attorney's Office acquired a copy of the Grand

Jury testimony of Appellant, Beck, ofter his direct exam.

ination at trial.

It is Appellant's contention that the United States

Court of Appeals lor the Tenth Circuit erred in its find

ing that possession alone of a transcript of immunized

testimony docs not constitute a use, and hence is not

tainted.

Based upon the facts and case law in this area, such

a distinction as the Court has applied would render the

Appellant's Fifth Amendment right as meaningless.

In Aastigar v. United States, supra, the Court found

that a grant of immunity will serve as a total substitution

for the original Fifth Amendment right. It would be a

fallacy to believe that Appellant was in the same position

relative to the Federal authorities that he was in prior to

the tume he received immunity. Certainly his position has

been changed by the fact that the government prosecutor

sat at counsel table reviewing a transcript of immunized

testimony in a trial where Appellant was called as a witness.

Undoubtedly, the government prosecutor would not

have had such transcript, but for the fact that Appeliam

had testified before the Grand Jury. The availability and

possession of such transcript by the government prosecutor

at trial undermines the very concept of a grant of immunity

and thus should constitute a use

In New Jersey v. Portash, 440 US. 450 (1979) the

Supreme Court decided that any use of immunized Grand

Jury testimony against the person so immunized would

violate the United States Constitution.

Viewed as a whole the evidence demonstrates that cer.

tain information was received by Federal authorities from

the state investigation, and from immunized testimony. In

Kastigar v. United States, supra, at pp. 460, 461, the Court

held that the prosecutor has an affirmative duty to prove

that it derived its evidence from legitimate sources, and

goes on to find that this burden of proof is substantial.

It is the contention of Appellant that the government

has failed to meet their burden of proof in that they have

9

failed to prove the sources of the Federal information

which overlapped with information given them by the

State authorities.

In the original hearing on the Motion to Dismiss, the

District Judge found that although “. . . there is some

disagreement factually here about what Mr. Velthone,

(postal inspector) did or did not do with respect to the

records made available to him . . . the Federal govern.

ment had met the burden to show its evidence free of

taim. The United States Court of Appeals for the Tenth

Circuit found in their opinion that “. . . the evidence sup-

ports inferences that the government had independent

sources for such information or did not use the evidence

in question...”

Appellant contends, however, that inferences of in-

dependent sources is not a sufficient standard of proof to

meet the government's substantial burden. It is not enough

to merely deny acquiring information from the state au-

thorities, but instead the government should have been

required to prove with certainty its independent, legit

imate source of evidence presented at trial. The govern.

ment has failed to meet the standard of proof that the

courts should have applied in this matter to determine

whether the government made use or derivative use of the

immunized testimony.

Ii.

Appellant, Beck, contends that the jury verdict was

not amply supported by the record and that the District

Court erred in denying a judgment of acquittal.

The main thrust of the Indictment in this case and

the evidence as presented by the government. was that

supposed equity in each parcel of real property was the

basis of this scheme to defraud.

10

Both defendants admitted that they used the sales

pitch which had been developed by O'Keefe, yet the jury

found Beck not guilty on three counts and found his co

defendant not guilty on all counts. It must logically follow

that the jury did not find that the sales pitch regarding

equity was a part of a scheme to defraud. Had the jury

made such a finding it would have been required to follow

the instructions and return verdicts of guilty regarding

both defendants on all counts.

We recognize that inconsistent verdicts have held to

be acceptable in the Federal courts, Maxfield v. United

States, 360 F.2d 97 (10th Cir. 1966), United States v.

Greene, 497 F.2d 1068 (7th Cir. 1974), however. the ver

dicts of not guilty in this case cannot be ignored. If the

sales program itself was not a violation of the mail fraud

statute, then the proof presented by the government in

support of this indictment is at variance with the indict-

ment and will not support a conviction on these charges.

There was insufficient evidence to support the verdicts

of guilty or inference that Appellant, Beck, took any part

in devising a scheme to defraud and that any acts he dia

perform were done with the willful intent to defraud any.

one. The government failed to show any scheme to defraud

and failed to show guilty knowledge and fraudulent intent

from the onset in order to prove mail fraud. United States

v. Nance, 502 F.2d 615 (8th Cir. 1974).

In order to prove the fraud in the first instance, it

was necessary for the government to prove that the alleged

victims were defrauded out of money or some other thing

of value. The government did not prove that the real prop

erty was worth less than what the prospective purchasers

were told and when Appellant attempted to present evi.

dence regarding the value of the real property at issue, he

was foreclosed from presenting such evidence by a ruling

1]

of the Trial Court indicating that such evidence would be

collateral to the issues before the jury. Such testimony, had

it been permitted, would have demonstrated that the real

property was in fact worth the amount it was represented

to be worth at that time.

It is the contention of Appellant that the issue of

value is central and certainly not collateral to the case. If

the government was to meet their burden of proof beyond

a reasonable doubt, it was crucial for them to prove that

the alleged victims paid a price in excess of the value and

consideration received. Without such proof of value, it is

impossible to determine if in fact the alleged victims were

defrauded.

The question of a defendant’s intent is of paramount

importance. United States v. Foshee, 578 F.2d 629 (5th

Cir. 1978) . There is no question that the government was

required to prove that intent as an element of the charge

in this case. The Court’s preclusion of Appellant’s evidence

of a professional appraisal of the property in question also

precluded the Appellant from showing lack of any intent

to defraud the alleged victims. This had the effect of de-

priving Appellant of his right to present a defense which

fairly met the allegations contained in the Indictment.

The government presented no evidence to indicate

that Beck had any knowledge whatever of the manner in

which the land was originally purchased by O’Keefe, Bald-

win and Associates. To support a conviction in this matter,

the government should have been required to prove that

Beck took part in devising this sales program and that

when he did devise the program he had an intent to

defraud potential purchasers. No such evidence was pre-

sented, and no evidence was presented from which such

an inference could be drawn.

Based upon the above circumstances, this Court is

urged to grant a Writ of Certiorari so that it may review

the conviction of the Appellant below.

Respectfully submitted,

J. Terry WicGINs, #4316

710 East Speer Boulevard

Denver, Colorado 80203

(303) 777-1773

A-]

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF

AMERICA,

Plaintiff-A ppellee,

- L No. 78-1508

ROBERT K. BECK, |

Defendant-A ppellant. |

APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF COLORADO

(D.C. No. 77-CR-250)

J. Terry Wiggins, Attorney, Denver, Colorado, for De-

fendant-Appellant

Richard S. Vermeire, Assistant United States Attorney,

Denver, Colorado (Joseph Dolan, United States Attorney,

Denver, Colorado was on the brief) for Plaintiff-Appellee

Before SeTH, Chief Judge, and HoLLoway and McWILL-

IAMS, Circuit Judges

Hotioway, Circuit Judge

A-2

This is a direct appeal by the defendant-appellant

Robert kK. Beck from his jury conviction on three counts of

a six-count indictment charging Beck, Gilbert J. Szajna, and

three others with mail fraud in violation of 18 U.S.C. §$

1341 and 2. Szajna, who was tried with the defendant, re-

ceived a judgment of acquittal from the district court on

the sixth count at the close of the government's case-in-chiet

and was acquitted by the jury on the other five counts. For

the three counts on which he was found guilty defendant

was sentenced to concurrent two (2) year terms for each

count, and he appeals.

Defendant's basic contentions on appeal are that the

trial court erred: (1) in refusing to dismiss the entire case

as a result of the grant of immunity which he had received

from the State of Colorado; (2) in refusing to dismiss the

indictment due to selective prosecution by the government;

(3) in refusing to dismiss the case because of pre-indictment

delay; and (4) in denying a motion for judgment of acquit-

tal, the evidence being insufficient to support the convic-

tions.

I

Viewing all the evidence, together with all reasonable

inferences therefrom in the light most favorable to the

government as we must on this appeal from a guilty ver-

dict, United States v. Twilligear, 460 F.2d 79, 80-81 (10th

Cir.) , the evidence tended to show the following facts.

In March 1973 co-indictee Danny O'Keefe and Charles

Baldwin, acting through a Colorado corporation named

O’Keelfe, Baldwin & Associates, Inc., purchased from an in-

vestment company 2 Colorado cattle ranch of more than

13,000 acres. Although the property was purchased at ap-

proximately $66.00 per acre, it was determined by O'Keefe

_ and Baldwin, the sole corporate stockholders, that the cor-

poration would subdivide and resell the property in 40 acre

A-3

tracts at approximately $5,600 with a list price of approxi-

mately $8,000.

Shortly thereafter defendant was hired by O'Keefe and

Baldwin as the office and sales manager of the Project. Ini-

tially defendant helped organize the office, find office

space, and hire the salesmen. In addition, he had substan-

tial responsibility for developing the sales brochure for the

project by taking pictures of the land to be sold, gathering

information about the surrounding area, setting up the

brochure’s format, writing the textual material, and review-

ing the brochure’s preliminary proofs. He also organized

the development of a plat map for the project, the initial

surveying and subdividing of the ranch land, and the con-

struction of access roads within the project.

In April 1973 the sale of forty acre parcels began in

earnest. Variations on an advertisement which had been

developed by O’Keete were prepared, paid for, and sent

by defendant to newspapers throughout the country. The

ads generally indicated that to purchase a forty acre parcel,

which originally sold tor $8,400, the prior owner's equity

of $1,700 could be purchased by making two back payments

and by assuming the principal balance of approximately

$6,700 from the prior owner. The ads gave fictitious names

and a telephone number and interested parties were in-

structed to call collect. When prospective customers called,

defendant and the other salesmen would provide a fav-

orable description of the property and would tell the cus-

tomers, inter alia, that the prior owner had _ financial

troubles and was unable to continue making the monthly

payments and that they would be getting the benefit of

the prior owner's equity in the property for only two

back payments.

If the customer was still interested then a sales bro-

chure was mailed out the same day along with a sales con-

A-4

tract which contained the legal property description of a

forty acre parcel. When the customer returned a signed

contract with the two “back payments” defendant, who was

also vice president of the company, would execute the con-

tract for the company. A warranty deed would then be

drafted and mailed along with the executed sales contract

to a Colorado bank which would hold the documents in

escrow until all the payments were made by the customer.

Included in the sales contract was a provision which

permitted the buyer to obtain a refund of his payments if

he disliked the property after inspecting it within a speci-

fied number of days after signing the contract. When

buyers came to inspect their property, defendant and the

other salesmen kept the customers separated from each

other, did not allow a customer to listen to a sales presen-

tation made to another customer, and did not tell the cus-

tomer how the other property was being sold. ‘These pre-

cautions were taken to prevent individual buyers from

knowing that other buyers could purchase identical size

parcels under the same terms. When it appeared that an

inspecting Customer was going to ask for a refund, defen-

dant and the other salesmen emphasized that the other lots

had sold for the original purchase price of $8,400 and that

the customer was getting a bargain when he assumed a

principal balance of $6,700 and obtained the prior owner's

equity for only two back payments.

The evidence tended to show that these representa-

tions about the equity in the property made to customers

during phone conversations and inspection tours, along

with other representations concerning the adequacy of

zoning regulations and the availability of utilities, water,

and access roads within the development, were false or mis-

leading. Further evidence will be detailed as necessary in

discussing defendant’s appellate contentions, to which we

now turn.

II

The claim of witness immunity given to defendant

Prior to trial defendant moved to dismiss the indict-

ment on the ground that the “United States Government

is collaterally estopped from retusing to recognize .. . [his:

immunity from prosecution in this case.” I R. 13. Defen-

dant alleged, inter alia, that he had been “compelled to

testify before the State Grand Jury fof Colorado) which

was investigating substantially similar events”; that he

had been “informed that as a result of his cooperation and

tesumony, he would not be prosecuted in any State case

arising from the events being investigated by the State

Grand Jury”; that in furtherance of the state prosecutor's

promise not to prosecute him, the prosecutor intentionally

did not inform him of his constitutional rights prior to

taking the stand at the state grand jury proceeding: and

that the state's actions “estopped fit) from denying. that

.. fhe} was, in effect, granted Immunity from prosecu-

tion.” Jd.

At a pre-trial hearing and again at the beginning of

the trial the district court refused to rule on the motion

to dismiss and informed the parties that the motion could

be raised if necessary after the trial. After trial, defendant

moved for a judgment of acquittal or, in the alternative,

for a new trial based in part on “the grant or intended

grant of state immunity.” After an evidentiary hearing and

arguments by counsel the district court found that im-

munity had been granted “very informally” by the State.

XXIII R. 20. It was found, however, that the federal gov-

ernment had met its burden of showing that its evidence

was “free of taint.” 7d. at 21, 24. Accordingly, the district

court denied this part of defendant’s motion. /d. at 24.

On this appeal defendant argues “that the trial court's

ruling in this matter is error in light of the evidence pre-

A-6

sented at the hearing, and the circumstances under which

(he) tesufied.” Brief of Appellant at 12. In essence, defen-

dant challenges the sufficiency of the evidence to support

the trial court's finding that the evidence presented at trial

by the government was free of taint. The government con-

tends that the “[f ederal prosecution of a state immunized

witness is not fundamentally unfair” and that it “met its

burden of proving that defendant's testimony before the

State Grand Jury was not used in the federal investigation.”

Briet of Appellee at 9.

A state’s grant of immunity does not ipso facto pre-

clude a federal prosecution based on related matters. See

United States v. Anzalone, 555 F.2d 317, 320 (2d Cir.),

cert. denied, 434 U.S. 1015; United States v. Barker, 542

F.2d 479, 482, (8th Cir.). There are, however, Fifth

Amendment protections which circumscribe a federal pros-

ecution once a state has granted immunity to an individual.

Fundamental fairness and the federal constitutional guaran-

tee against self-incrimination mandate that state immunized

testimony and its fruits not be used, directly or indirectly,

to prosecute a federal charge. See Murphy v. Waterfront

Comm n, 378 U.S. 52, 79; accord Kastigar v. United States,

406 U.S. 441, 457; see also United States v. First Western

State Bank, 491 F. 2d 780, 782-83 (8th Cir.) , cert. denied,

419 U.S. 825. “Once a defendant demonstrates that he has

testified, under a state grant of immunity, to matters re-

lated to the federal prosecution, the federal authorities

have the burden of showing that their evidence is not

tainted by establishing that they had an independent, le-

gitimate source for the disputed evidence.’ Murphy v.

‘Citing Colo. Rev. Stat. § 13-90-118 (1973), defendant argues that

“witness immunity under state law can only be transactional im-

munity.” Brief of Appellant at 13. Our record does not show that

the steps outlined in this statute for granting immunity were

taken, but no question is raised about the finding that immunity

was granted.

A-7

Waterfront Comm'n, supra, 378 U.S. at 79 n. 18. This

burden “is not limited to a negation of taint; rather, it im-

poses on the prosecution the affirmative duty to prove

that the evidence it proposes to use is derived from a legiti-

mate source wholly independent of the compelled testi-

mony.” Kastigar, supra, 406 U.S. at 460.

Here the district court rejected detendant’s conten-

tions and found, after noting a discrepancy in the evi-

dence, that the government had met the “heavy burden”

of showing that its evidence was “free of taint.” XXIII

R. 21, 24. Unless clearly erroneous, we must accept this

finding of fact by the district court. See, e.g., United States

v. Romano, 583 F.2d 1, 7 (Ist Cir.); see generaily 2 C.

Wright, Federal Practice and Procedure §374 at 188 n. 72.

There was evidence tending to show that the govern-

ment began its investigation shortly after receiving a letter

dated March 22, 1974, from a land purchaser who com-

plained about a transaction which he had entered into with

Las Animas Ranch — the successor corperation to O'Keefe,

Baldwin & Associates. After a preliminary investigation in-

cluding the questioning of former employees of O'Keefe,

Baldwin & Associates, a determination was made by the

postal service to refer the case to a major fraud specialist

within the service for further investigation. On or about

February 12, 1975, almost two years prior to defendant's

testimony before the state grand jury in January 1977, fed-

eral authorities subpoenaed all the records of the land trans-

actions held by a Colorado bank which was acting as an es-

crow agent for the sales project. The subpoena produced

approximately 500 files containing installment sales con-

tracts for sales of 40 acre parcels. These contracts and re-

lated documents contained in the bank files had the names

and addresses of the individual purchasers and the names

of the salesman involved in the transaction. See, e.g., III R.

18, 25, 42, 74-75; X R. 64-65; XII R. 105.

A-8

In June 1975 a questionnaire was prepared and sent

to a random sample of 100 persons whose names appeared

on the installment sales contracts. XX R. 93-98; XXI R.

2, 103-04. As responses to the postal service questionnaire

came back, files were developed on potential witnessess.

The information obtained during this period preceded the

state grant of immunity and therefore should be available

for use by the government. See United States v. First West-

ern State Bank, supra, 491 F.2d at 783; see also United

States v. Romano, supra, 583 F. 2d at 8.

Further information and leads to other potential vic-

tims were obtained by postal inspectors from Baldwin who

had sent questionnaires of his own to purchasers of the forty

acre parcels. Baldwin was interviewed by postal inspectors

in August 1977, approximately seven months after defen-

dant’s state grand jury appearance, and at that time Bald-

win permitted postal authorities to copy the information

which he had received as a result of his questionnaires. De-

tendant claims that this information is “indirectly derived

from ... {his} Grand Jury testimony” since Baldwin “might

not have been charged in state court and giving informa-

tion at all if it had not been for .. . [his] Grand Jury testi-

mony.” Brief of Appellant at 15. While the possibility

exists that the immunized testimony of one individual may

cause another person to cooperate and give information

which is subsequent!v used to help convict the first person,

see United States v. Romano, supra, 583 F.2d at 9; we be-

lieve that such a claim in this case is tenuous, and that the

argument does not show that the trial court erred in its

general finding that the Government had met the burden

of showing that its evidence was free of taint. (XXIII R.

21).

Defendant also points to testimony which, he says, “in-

dicates that all the records of O'Keefe, Baldwin & Associ-

ates came into the custody of state authorities as the result

A9

of a search warrant, and that part of the information used

to obtain that search warrant was acquired from the De-

fendant . . . .” Additionally he claims that state officials

met several times with federal postal authorities and gave

them information on several witnesses, and a file on Don

Adams, the alleged victim in count one of the indictment.

The argument is that federal authorities secured leads and

derived evidence from state officials who not only were

exposed to defendant's immunized testimony, but who also

derived much of their own information from the fruits of

a state search warrant issued pursuant to an affidavit based

in part on information acquired from the defendant. See

Brief of Appellant at 14-17.

- The evidence presented at the post-verdict hearing

shows that Ralph Ruzicka, an agent for the Colorado Bu-

reau of Investigation (CBI), attended the state grand jury

proceeding at which defendant testified and that he subse-

quently filed a probable cause affidavit for a search warrant

which led to the seizure of records belonging to O'Keefe,

Baldwin & Associates. Although Ruzicka was told by the

state’s special prosecutor “to use only conversations he had

outside the Grand Jury room as a basis for the search war-

rant,” Ruzicka did indicate at several points during his tes-

timony that the search warrant was “a result of” the grand

jury testimony of several individuals, including defendant.

XX R. 19, 40. We feel, however, that the evidence supports

inferences that the government had independent sources

for such information, or did not use the evidence in ques-

tion, as explained below.

The evidence shows that federal authorities deter-

mined that their investigation and any charges arising

therefrom should not overlap with any state investigation

or charges. Mr. Velthoen, a postal inspector, did meet with

a state CBI investigator and obtained a copy of the state's

indictments, with attached witness lists. Velthoen also ob-

A-10

tained a copy of an appraiser's report on the value of the

land which had been sold, a file on a customer named

Richard Young, and an address on Terry and Rose Robin-

son, two past employees of O'Keefe, Baldwin & Associates

who subsequently testified for the government at defen-

dant’s trial.’ At a second meeting, Velthoen obtained an-

other file on a customer named Don Adams. Aside from

this information, the postal inspectors received nothing

further from state investigators.

We are satisfied that the record supports the conclu-

sion that the federal government either made no use or

derivative use of this information or had a legitimate, in-

dependent source for the information that was subsequent-

ly used in the prosecution of the defendant.’ Mr. Velthoen

testified that the file on Young was never used and that

this purchaser was never contacted. This was corroborated

by Velthoen’s investigative report to the U.S. Attorney's

office. With respect to the information on Adams, the

alleged victim in count one of the indictment who testified

for the government at defendant's trial, there was evidence

that the postal inspectors initially obtained his name from

Charles Baldwin — a legitimate, independent source of in-

formation. Moreover, Robinson, another postal inspector

working with Velthoen, contacted Adams who said that he

had previously sent his own file to the state attorney gen-

eral’s office. Adams gave permission to the postal inspectors

to secure a copy of that file from state authorities. XX R.

113; XXI R. 99-100, 110-11; see also IV R. 34-38, 46-48.

Thus the evidence derived by the government was shown

to be legitimately developed by the government following

its lead to Adams from Baldwin.

*Terry Robinson's testimony was a very important part of the gov-

ernment’s case and quite ing to defendant.

*On this appeal, defendant does not specifically mention the state's

indictment, the attached witness lists, and the appraiser's report.

All

With respect to the information acquired by the postal

inspectors on Terry and Rose Robinson, two major prose-

cution witnesses, the evidence shows that a state CBI in-

vestigator did give the address of Terry Robinson to postal

inspector Velthoen. However the postal inspectors already

had Robinson's name as a result of information derived

from Charles Baldwin and from the subpoena of the bank

records. The evidence presented at trial shows that Terry

Robinson was the leading salesman for O'Keefe, Baldwin

& Associates (IX R. 64) and thus had his name on many

of the contracts which were eventually subpoenaed trom

the bank and that Charles Baldwin knew both Terry and

Rose Robinson. Again the trial court's finding that the

government's evidence was free of taint is not undermined.

Finally, defendant contends that the United States

Attorney's office “acquired a copy of . . . [his) Grand Jury

testimony after his direct examination in the trial of this

case,” and that proof of this fact “is sufficient to show

tain.” Brief of Appellant at 16.

It has been held that the government's heavy burden

of establishing a legitimate, independent source for its

evidence is not sustained where its prosecutor has been

exposed to a defendant's prior immunized testimony. See,

e.g.. United States v. McDaniel, 482 F.2d 305, 311 (8th

Cir.) ; United States v. Rice, 42) F. Supp. 871, 877 (E.D.

Ill.) . We believe, however, that these cases are distinguish-

able. There the prosecuting attorney had extensive expos-

ure to the defendant's immunized testimony before a for-

mal charge was filed against the defendant. In such a situa-

tion, the Eighth Circuit found “the government's burden

of proof . . . virtually undischargeable.”” United States v.

McDaniel, supra 482 F.2d at 312.

Such a situation is not presented in this case. Here

the defendant's immunized grand jury testimony was ob-

tained by the government at a very late stage in the crim-

A-l2

inal proceeding. The evidence clearly shows that the at-

torneys prosecuting the case acquired a copy of defendant's

immunized grand jury testimony sometime during the

cross-examination of the defendant — long after the gov-

ernment had rested its case.“ The defendant does not con-

tend that the postal inspectors investigating the case ob

tained a copy of or had knowledge of the contents of his

grand jury testimony. Moreover, defendant does not say

that the prosecuting attorneys actually used his grand jury

testimony in the course of cross-examining him. Defendant

would have us hold that merely “obtaining a copy of the

Grand Jury transcript is sufficient to show taint,” so that

the government could not demonstrate a lack of taint.

Under the facts of this case, we decline to make such a

holding. See United States v. Bianco, 534 F. 2d 501, 511

n. 14 (2d Cir.), cert. dented, 429 U.S. 822: United States

v. Catalano, 491 F.2d 268, 272 (2d Cir.) . cert. denied, 419

U.S. 825; United States v. Henderson, 406 F. Supp. 417,

427 (D. Del.).

In sum, we find no error in the trial court's tinding

and its ruling rejecting the contentions concerning the

immunity issue.

(III and TV omitted because not applicable)

Vv

The sufficiency of the evidence

Defendant argues that the evidence was insulficient

to support his convictions and that consequently the trial

“The testimony of the government prosecutors indicates that they

obtained a copy of the transcript at that time so that it could be

available “for use or assisiance in crossexamining Mr. Beck”

XXIR. 66; see also NNIL R. 506. This possibility would now

appear to be foreclosed by the Supreme Court's decision in New

Jersey v. Portash, AW US, 450 which held “that a person's testi

mony before a grand jury under a grant of immunity cannot con

stitutionally be used to impeach him when he is a defendant in

a later criminal wial.” Jd. at 439-60,

A-13

court erred in denying a judgment of acquittal. More

specifically he says that the evidence failed to show that

the equity marketing plan was part of a scheme to defraud,

that he “took any part in devising a scheme to defraud,”

and that he had the requisite “knowledge and fraudulent

intent from the outset’’ to defraud the customers of the

land sales project. Brief of Appellant at 26-29. Defendant

admits that he used the equity sales promotion with pro-

spective purchasers and that he caused the mails to be

used to further the land sales project. Brief of Appellant

at 6, 27. Defendant testified, inter alia, that he did not

make any misrepresentations concerning water, uiilities,

or access roads.

~

The essential elements which the government must

prove in a mail fraud prosecution are (1) a scheme to de-

fraud and (2) the use of the mails to execute or further

this scheme. United States v. Allen, supra, 554 F.2d at 408:

United States v. Blosser, 440 F.2d 697, 700 (10th Cir.) In

conjunction with proof of the existence of a scheme to

defraud, the government must also show that the defen-

dant was part of that scheme. United States v. Pearlstein,

576 F.2d 531, 537 (3d Cir.) . The essential matter of proof

in the govenrment’s case is the knowing participation by

the defendant in a scheme to defraud in which the mails are

used. Hofmann v. United States, 353 F.2d 188, 191 (10th

Cir,).

The fraudulent scheme

As to the existence of a fraudulent scheme,’ the proof

favorable to the government overwhelmingly tended to

show that defendant and the other salesmen used news-

paper advertisements and a sales pitch which erroneously

‘A scheme is fraudulent “if it is reasonably calculated to deceive

persons of ordinary prudence and comprehension.” Gusow v.

United States, 347 F.2d 755, 756 (10th Cir.) , cert. denied, 382 U.S.

906.

as

A-14

led purchasers to believe that they were obtaining a de-

faulting prior purchaser's equity in a specific forty acre

parcel, see e.g., II R. 45; VIL R. 49-50; XIV R. 91-92;

XV R. 49-61; that there was in fact no equity in the prop-

erty being sold as claimed by the salesmen, e.g., III R. 45,

101-02; X R. 10-12, 122; XIV R. 92; and that most of the

13,000 acres were sold using this marketing scheme, II R.

54: III R. 49; XV R. 32. There was also evidence that

defendant and the other salesmen misrepresented the facts

concerning the availability of utilities, water, and access

roads to the individual parcels. ‘hey led customers to be-

lieve that utility lines such as electric, gas, and telephone

would be available to their property lines at no cost to

them, when in fact no lines currently existed to each parcel

and there were no plans for the company or the local

electric company to construct such lines. They also told

customers that water was available by wells at 20 to 100

feet in depth, when in fact the average depth currently

existing windmill wells ranged from 100 to 200 feet, and

water for household use was only available at depths of

225 to 510 feet.

With respect to access roads to the individual forty

acre parcels, various customers were told that the company

would provide a “‘feasible access’’ into the parcels, that the

roads would be ‘‘hardsurface-type roads,” or that the roads

would be brought up to “county specifications” with the

county maintaining them. Under the general heading of

“Location,” the sales brochures told customers that “‘access

by county and state roads is excellent,’’ and while defendant

explained at trial that this statement referred to “the access

to the ranch,” there was nothing in the brochure to indi-

cate that access to the individual parcels would be any

different. The roads which were eventually put in by the

company were merely bladed roads where the grass was

cut down to the soil. These were not gravel roads and

A-15

they deteriorated into mud after each rain or storm. In

fact, the company never intended to provide the customer

with anything other than a bladed access road to his in-

dividual parcel and defendant, who was responsible for

the road development, never contacted the county about

accepting or maintaining the roads.

In addition, the salesmen were instructed not to bring

up the subject of zoning to the customers despite the fact

that the property being sold had been zoned by the county

for one family dwelling per 320 acres and that the com-

pany’s rezoning petitions had been denied. While some

customers were not informed of the zoning problem, others

were told that there were no zoning restrictions on the

property.

A scheme is fraudulent within the meaning of 18

U.S.C. §1341 if it is effected by deceitful statements ot

half-truths or the concealment of material facts. United

States v. Allen, supra, 554 F.2d at 410. Where the scheme

to defraud includes false representations conveyed through

salesmen, proof of the same misrepresentations being made

to different persons by numerous salesmen in the same

period tends to prove that the scheme existed and that the

particular salesmen were carrying it out. See United States

v. Krohn, 573 F.2d 1382, 1388 n. 8 (10th Cir.), cert.

denied, 436 U.S. 949. We are convinced that the evidence

was sufficient for a finding beyond a reasonable doubt that

a fraudulent scheme existed and that it was carried on by

defendant and the other salesmen.

Fraudulent intent.

We must also consider whether there is sufficient evi-

dence establishing that defendant's participation in the

scheme was willful and with knowledge of its fraudulent

nature, and with the intent that its illicit objectives be

A-16

achieved. See United States v. Pearlstein, supra, 576 F. 2d

at 537, 540-41. Because the requisite knowledge and intent

are often difficult to prove by direct evidence, these ele-

ments may be interred from the statements and activities

of the participating individual, see United States v. Sea-

sholtz, supra, 435 F.2d at 8, or “from a pattern of conduct

or a series of acts, aptly designated as badges of fraud.”

United States v. Krohn, supra, 573 F.2d at 1386. In mail

fraud cases, where the evidence shows that the individual

acted with “reckless indifference” as to whether a represen-

tation was true or false, he is chargeable as if he had knowl-

edge of its falsity. See United States v. McDonald, 576 F.2d

1350, 1358 (9th Cir.) , cert. denied, 439 U.S. 830; Elbel v.

‘United States, 364 F.2d 127, 134 (10th Cir.) , cert. denied,

385 U.S. 1014.

The defendant admitted at trial that he used the equity

sales promotion on customers, that he knew the newspaper

advertisements and such sales talk led customers to believe

they were receiving the prior owner’s equity in the property,

and that he left O’Keefe, Baldwin & Associates because of

his dislike for the equity sales approach in which he told cus-

tomers “something that might not have been true.” XII R.

147-48. There was also testimony from a salesman that de-

fendant told him that “people had the tendency more to

respond to greed,” and that if people “thought they was get-

ting what someone else had already got that they would be

more apt to pick up the land.” IX R. 26.

One significant factor in evaluating defendant's know-

ledge of the scheme to defraud is his role in the overall

operation. United States v. Pearlstein, supra, 576 F. 2d at

542; see also United States v. Krohn, supra, 573 F.2d at

1388. As noted, the evidence showed that defendant as sales

and office manager had a significant role in organizing the

sales office, hiring the sales personnel, and instructing the

staff on the sales presentation. He also had significant re-

A-17

sponsibility for the creation of the sales brochure which,

according to the testimony of one salesman, contained at

least one misleading picture of the land to be sold. IX R.

62-63.

To rebut the inference that he was culpably involved

and knowingly furthered the fraudulent scheme, defendant

introduced evidence at trial and argues here that he relied

on information from O'Keefe that a lawyer had approved

the sales program due to the way in which the ranch had

been purchased by O'Keefe, Baldwin & Associates; and that

he also relied on legal advice from O'Keefe’s attorney “that

the zoning situation was not in fact a problem and that the

County Commissioners . . . were incorrect in their view of

the zoning.” Brief of Appellant at 5, 8-9, 29; XII R. 87,

124, 130, 134-35, 138; XIV R. 11-12, 76, 114-15.

Reliance on an attorney's advice concerning the legal-

ity of a transaction is a fact to be considered with other cir-

cumstances on the question of the defendant's good faith

in a mail fraud case. See Linden v. United States, 254 F. 2d

560, 568 (4th Cir.) ; see United States v. Seasholtz, supra,

435 F.2d at 7-9; see generally Williamson v. United States,

207 U.S. 425, 453. It does not, however, “‘under all circum-

stances constitute an impregnable wall of defense.” See

Linden v. United States, supra, 254 F.2d at 568. Instead,

it merely presents a question of good faith which is to be

determined by a properly instructed jury. See United

States v. Blosser, 440 F.2d 697, 700 (10th Cir.) ; United

States v. Seasholtz, supra, 435 F.2d at 8-9; Hawley v. United

States, 133 F.2d 966, 970 (10th Cir.). There is substantial

evidence in the record from which the jury could have

found beyond a reasonable doubt that defendant knowingly

or recklessly made misrepresentations to prospective pur-

chasers concerning utilities, water and access roads, as well

as on the equity in the properties and zoning, and that he

made these misrepresentations to further the fraudulent

A-18

scheme. Consequently the jury’s rejection of the good faith

defense is supported by the record.

Defendant argues that it was necessary to prove the

fraudulent intent required by the mail fraud statute “by

showing that the land was not in fact worth what was being

ask tor it.” He maintains that the evidence showed that the

purchasers were getting “a good buy” and “that the prop-

erty was in fact worth the amount it was represented to be

worth.” He also argues that the value of the property was

of utmost importance in this case, that the prosecution

totally failed to present any evidence whatever concerning

the value of the Las Animas County property, and that the

trial judge precluded the defense from presenting such

evidence through an expert appraisal. Brief of Appellant

at 29-30.

Of course, the value of an item sold as a result of a

fraudulent scheme may be relevant in proving a defendant's

intent. See, e.g., Holmes v. United States, 134 F.2d 125,

133 (8th Cir.), cert. denied, 319 U.S. 776. However, it is

not the only evidence which shows that the defendant had

the requisite intent to defraud customers when he pro-

moted the sale of land for O'Keefe, Baldwin & Associates.

By his misrepresentations on other specific matters, made

knowingly or recklessly, and which were false and mis-

leading, defendant induced customers to purchase some-

thing other than what they bargained for and something

other than what was represented to them. See Mesch vw.

United States, 407 F.2d 1286, 1289-90 (10th Cir)., cert.

denied, 395 U.S. 979. This was enough to make out the

mail fraud charge.

In rejecting the appraisal evidence of the defense on

the value of the property the trial judge said he was not

going to turn the case into a land values case, that his re-

jection was based in part on Rule 403, FRE on “collateral-

A-19

ness,” that whatever relevance the evidence might have was

“way outweighed by the collateralness problem it presents,”

and that the question was whether the defendants “lied in

making sales or attempting to make sales.” V R.7. We find

no error in the trial court’s ruling and no defect in the

government's case due to the lack of proof on the value of

the land, in view of the specific misrepresentations which

were sufficiently shown, as discussed earlier.

In sum, we believe that the jury’s verdict is amply

supported by the record and that the district court did not

err in denying a judgment of acquittal.

We have examined the remainder of defendant's con-

tentions and find that they require no further discussion.

We are satisfied that no reversible error is demonstrated.

Accordingly the judgment is

AFFIRMED.

B-1

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Criminal Action No. 77-CR-250

UNITED STATES OF REPORTER'S

AMERICA TRANSCRIPT

Plaintiff, OF

ORAL ARGUMENT

US. ON

ROBERT K. BECK and POST-TRIAL

GILBERT J. SZAJNA, MOTIONS

Defendants. | April 26, 1978

Proceedings before the HoNoraBLe RICHARD P.

Matscu, Judge presiding, Courtroom ““B”, United States

District Court for the District of Colorado, U.S. Court-

house, Denver, Colorado, and a Jury of twelve, beginning

at 1:30 p.m. on the 26th day of April, 1978.

APPEARANCES:

For the Plaintiff: JAMES NESLAND, Esq.

Assistant U.S. Attorney

323 U.S. Courthouse

Denver, Colorado 80294

For the Defendant: BERNARD D. MORLEY

2250 S. Oneida #201

Denver, Colorado 80224

B-2

COURT'S RULING

And in this case, most particularly one because of the

manner in which it was granted in the state, very informal-

ly, and were, as I am sure as testified by Mr. Beck, some

considerable uncertainty on his part, as to whether he was,

when he went before the Grand Jury a special Grand Jury.

Here, again, however, the law is clear that the federal

government is not bound by such grants of immunity with

the state government and the sole issue that I have authority

to rule upon is whether the prosecutors here, the federal

government has met the burden, the heavy burden, as the

case has described it, and proved that the evidence pre-

sented was not tainted by the use of the immunized testi-

mony before the Grand Jury.

Now there is some disagreement factually here about

what Mr. Velthone did or did not do with respect to the

records that were made available to him. But, based upon

my record of that recollection of the testimony and, of

course, the record will show it, it did not constitute a use

of the testimony of Mr. Beck before the State Grand Jury

in either the development of the investigator in the pre-

sentation of the case.

My finding is a finding of fact is that the government,

the federal government has met the burden to show its evi-

dence free of taint. (See Reporter's Transcript of Oral Argu-

ment on Post-Trial Motions, pp. 20 & 21).

The finding that I am making when I say that the

government has met its burden of showing that its evidence

was free of taint includes not just direct but, also, indirect

use of that State Grand Jury. (See Reporter's Transcript of

Oral Argument on Post-Trial Motions, p. 24.)

C-1

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Criminal Action No. 77-CR-250

UNITED STATES OF

AMERICA, een a ae

Plaintiff, | Leanne atcled

| TRANSCRIP

US. OF

ROBERT K. BECK AND a vs

GILBERT J. SZAJNA, = |_— January 19, 1978

Defendants. |

Proceedings before the HoNnorasLe RICHARD P.

Matscu, Judge presiding, Courtroom “B”, United States

District Court for the District of Colorado, U.S. Court-

house, Denver, Colorado, and a Jury of Twelve, beginning

at 2:45 p.m., on the 19th day of January, 1978.

APPEARANCES:

For the Plaintiff: James E. NESLAND, Esy.

Assistant U.S. Attorney

Room C-330

U.S. Courthouse

Denver, CO 80204

For the Defendant: BERNARD D. Mor-ey, Eso.

Robert K. Beck ; 2250 South Oneida

Suite 201

Denver, CO 80224

For the Defendant: MicHAe- S$. Axt, Eso.

Gilbert J. Szajna i961 Stout Street

Suite 2024

Denver, CO 80294

C2

PROCEEDINGS

P. M. SESSION

JANUARY 19, 1978

2:45 P. M.

THE COURT: Both defendants present, all counsel

present, bring in the jury.

(WHEREUPON, the tollowing proceedings were had

in open court in the presence and hearing of the jury:)

THE COURT: Mr. Collinson has the jury now ar-

rived at a verdict?

MR. COLLINSON: Yes. Your Honor.

THE COURT: Please pass the verdict forms to the

marshal.

(WHEREUPON, the foreman complied.)

THE COURT: Members of the jury, you will please

listen to the reading of your verdict.

United States of America versus Robert K. Beck. We

the jury upon our-oaths say that we find as follows as to

Defendant Robert K. Beck:

Count I, not guilty. Count I, not guilty. Count IIL,

guilty. Count IV, not guilty. Count V, guilty. Count VI.

guilty. Dated January 19, 1978. Thomas R. Collinson,

Foreperson,

United States v. Gilbert J. Szajna. We the jury upon

our oaths say that we find as follows as to the Defendant

Gilbert J]. Szajna:

Count I, not guilty. Count II, not guilty. Count II,

not guilty. Count IV, not guilty. Count V. not guilty,

January 18, 1978. Thomas R. Collinson, Forepersen.

Were they and are they your verdicts, Mr. Foreperson?

C-3

THE FOREPERSON: Yes, sir.

THE COURT: So say you all?

THE JURY: (Jury replied in affirmative.)

THE COURT: Would you like to have the jury

polled?

MR. MORLEY: Yes, please.

THE COURT: Johnny Lee Wilson, were these and

are these your verdicts?

THE JUROR: Yes.

THE COURT: Ruth J. Saderquist, were these and

are these your verdicts?

THE JUROR: Yes, sir.

THE COURT: Thomas R. Muldoon, were these and

are these your verdicts?

THE JUROR: Yes, Your Honor.

THE COURT: Debra Dale, were these and are these

your verdicts?

THE JUROR: Yes.

THE COURT: Ward Richard Kenny were these and

are these your verdicts?

THE JUROR: Yes, sir.

THE COURT: Buck Allen Burgett, were these and

are these your verdicts?

THE JUROR: Yes, sir, Your Honor.

THE COURT: Thomas Richard Collinson, were

these and are these your verdicts?

THE JUROR: Yes, sir.

C4

THE COURT: Frank Edward Brown, were these and

are these your verdicts?

THE JUROR: Yes, sir.

THE COURT: Thelma Jean Sanquist, were these

and are these your verdicts?

THE JUROR: Yes, Your Honor.

THE COURT: Martin John Lohmann, were these

are these your verdicts?

THE JUROR: Yes, Your Honor.

THE COURT: Katheryn R. Dunston, were these and

are these your verdicts?

THE JUROR: Yes, Your Honor.

THE COURT: Stan Morris Lauthan, were these and

are these your verdicts?

THE JUROR: Yes, Your Honor.

THE COURT: The jury has been polled. The ver-

dicts are received.

Members of the jury, you have now completed the

task which was given to you in this case.

We, the public and the Court wish to express appre-

ciation for your service in this case recognizing that it was

long, somewhat difficult and that it required something

more than ordinary efforts to accomplish. I will tell you a

couple of things that were kept from you in this case. One

is that the Defendant O'Keefe did plead guilty pursuant

to a plea agreement in this court in which the Government

permitted him to plead guilty to one count and dismiss the

other counts. On that plea of guilty I sentenced him to five

years in prison. With respect to the Defendant Baldwin —

or not defendant, but the participant Baldwin, you heard

C-5

from him what happened with respect to him. The other

defendant Short will be giving a plea agreement, as I under-

stand it, to plead to a charge in Arizona; is that right, Mr.

Nesland?

MR. NESLAND: Yes, under Rule 20, Your Honor

THE COURT: And the case against him here in

Colorado will be dismissed, this by agreement with the

Government.

Understand when we talk about plea agreements, they

do not involve the Court, but the prosecuting authority.

So that’s a part of the story that was kept from you in the

case, and necessarily so because we didn't want you in-

tluenced by them. And keeping you from contact with the

other communications, the disposition with respect to Mr.

Beck was mentioned in one of the stories that was out in

the newspaper. You are now dismissed from further service

on the jury panel. In view of the length of this case, we

are not going to call on you for any further service in any

other trials during your jury panel.

We do understand this disruption in your ordinary

lives and particularly those of you from out of town, quite

a ways out of town, it's somewhat inconvenient. But you

have performed the highest obligation there is of citizen-

ship in the United States.

With our appreciation you are now excused.

(WHEREUPON, the jury was excused.)

THE COURT: We will make a record.

The article, I think that you gave to me, Mr. Morley,

trom the Rocky Mountain News for Sunday, January 15,

1978, mark that Court Exhibit 2. That will be made a part

of the record.

The counsel will note that the one verdict was dated

yesterday, January 18th, with respect to Mr. Szajna and the

C-6

verdict with respect to Mr. Beck is dated today. I do wish

to make some further record here.

It’s my practice in all jury trials to make sure the record

reflects and counsel and the accused know everything that

I know about the jury. In this case at the time of the recess

yesterday afternoon -— well, first of all, 1, of course, called

the jurors in and recessed them without asking them if they

had arrived at any verdict or might in the near future. And,

when the jury was back in the jury room and my staff, that

is to say, Mr. Tobaski (phonetic) and Miss DeLuca went

in to pick up the exhibits from the jury as we routinely do

and the verdict forms having no idea that anything had

been written on any verdict form, Mr. Tobaski received

from the jury the verdict forms, brought them into my

chambers. I looked and saw something had been written

on one.

Without reading them, I immediately turned them

over and directed Mr. Tobaski to seal them which was

accomplished in an envelope which we will mark Court

Exhibit 3, and of course, instructed Mr. Tobaski that he

was to communicate to no one what, if anything, he had

read on the verdict forms as he received them.

This morning without consultation with any lawyer

in the case, I caused a communication to be sent to the

jury by placing it on the sealed envelope in which the

verdict forms were which said as follows: “The verdict

forms have been seen only by the Clerk who received them

from you at the time of the recess and who sealed them

in this envelope without revealing their contents to any-

one. Your verdicts are not final until they are returned in

open court.”

And I signed that communication sending it to the

jury. And counsel, of course, are free to inspect the verdict

—=

C-7

forms. They do not show any strike throughs or changes

at all on them and they are completed in ink.

Mr. Tobaski is here in the courtroom and would

answer any questions we have as to what he saw if you

have any?

MR. MORLEY: I don’t think so, Your Honor.

THE COURT: All right, do you have any questions

of me? I mean, I have told you everything I know about it.

MR. MORLEY: That's the same verdict, there has

only been one piece of paper?

THE COURT: Only one form has been handed to

them and these are the forms that have been handed to

me that afternoon. I would just ask Mr. Tobaski to say if

there is anything inconsistent with what you recall when

you took them from the jury last night?

MR. TOBASKI: Not at all. That’s what I read.

THE COURT: The entry is, of course, Mr. Szajna

is on this verdict discharged in the case.

With respect to Mr. Beck, the entry of judgement on

the verdict will be deferred pending the presentence investi-

gation and report. Also, as I indicated in the handling of

the motion for dismissal for preindictment delay, I will

provide an opportunity, if you wish it, Mr. Morley, to sub-

mit additional evidence with respect to that motion and I

will give you a few days to decide what you want to do

about that. You don’t have to decide it in the moment here.

MR. MORLEY: Thank you, Judge.

THE COURT: Additionally, I am going to ask, as a

part of the presentence report, we will go ahead and start

the presentence investigation, as a part of that I am going

ad

C-8

to ask the probation officers to inquire into the state grand

jury proceeding and what with respect to Mr. Beck’s testi-

mony, what he was promised there. And if you wish it,

this again is something you can think about, I will provide

you an opportunity to call to the witness stand here before

me the special state prosecutor or anyone else you wish

to have called on the subject of that state grand jury pro-

ceedings because I think in terms of what has happened

here and the differences among the persons, not this verdict,

but the different agreements that have been made with

respect to Mr. Baldwin and Mr. Short and Mr. O’Keefee,

that I would like to know more about the state grand jury

proceeding before I determine the sentence with respect

to Mr. Beck.

MR. MORLEY: Thank you, Your Honor.

THE COURT: All right, is there anything further

at this time?

The defendant, of course, there is no objection to con-

tinuing the bond?

MR. NESLAND: No, Your Honor.

MR. MORLEY: There was not a bond, Your Honor.

It was done by summons.

THE COURT: All right, the same terms and condi-

tions, whatever they were.

Very well, on this matter the court’s in recess. We will

be in recess in the trial for five more minutes.

(WHEREUPON, the court was in recess at the hour

of 3:00 p.m.)

C-9

REPORTER’S CERTIFICATE

1, JOSIE HUTSELL, Registered Professional Re-

porter and Substitute Official Reporter to this Court, do

hereby certify that I was present at and reported in short-

hand the proceedings in the foregoing matter; that there-

after my shorthand notes were reduced to typewriting

under my supervision, comprising the foregoing official

transcript; further, that the foregoing official transcript 1s

a full and accurate record of the proceedings in this matter

on the date set forth.

DATED at Denver, Colorado, this 19th day February,

1979.

Josie HUTSELL, RPR

Josie Huttsell, RPR