Petition for Writ of Certiorari — Neal v. United States

83-1695 [i

ON

C8 - Supreme Court, U.S

I fe

Guthe Supreme Court of the Wnited States

OcTOBER TERM, 1983

HERB NEAL,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

GENE STIPE

Counsel of Record

MITCHELL LEE

Stipe, Gossett, Stipe, Harper, Estes,

McCune and Parks

323 East Carl Albert Parkway

Post Office Box 1368

McAlester, Oklahoma 74502

(918) 423-0421

Attorneys for Petitioner

April, 1984

YY pp

QUESTION PRESENTED FOR REVIEW

Whether the United States Court of Appeals for the

Tenth Circuit, and the United States District Court for the

Western District of Oklahoma erroneously expanded or ig-

nored this Court’s prior holdings requiring that a mailing

be sufficiently closely related to an alleged scheme to de-

fraud pursuant to Title 18 U.S.C. Section 1341.

a on

TABLE OF CONTENTS

oes PAGE

QUESTION PRESENTED __.. i

OPINION BELOW __. : 1

JURISDICTION . 1

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED IN THIS CASE 2

STATEMENT OF THE CASE -_. )

A. Procedural Background of the Case —_..._ H)

B. Relevant Facts Underlining the Petitioner’s

TENE EDT DON ye AE OOO 6

EXISTENCE OF JURISDICTION BELOW 8

REASON FOR GRANTING THE WRIT:

I. The finding of the Trial Court and the Court of

Appeals that the mailings in Petitioner’s case

were an integral part of a scheme to defraud is

in direct conflict with this Court’s decisions 9

CONCLUSION -___... 22

APPENDIX A—

Opinion of the United States Court of Appeals for

the Tenth Circuit.

APPENDIX B—

Petition for Rehearing

APPENDIX C —

Order Overruling Petition for Rehearing

—ili—

TABLE OF AUTHORITIES

Cases PAGE(S)

Kann v. United States, 323 U.S. 81 (1944) ss —i(ti«id

Parr v. United States, 363 U.S. 370 (1960) _... 13, 15

Pereira v. United States, 347 U.S. 1 (1954) 14

United States v. Bottom, 638 F.2d 781 (5th Cir. 1981) 19-20

United States v. Lynn, 461 F.2d 759 18

United Sttaes v. Maze, 44 U.S. 395 (1974) 8, 14-18, 19, 20

United States Code

a ceuivsamuaannletkal 2, 5, 8, 13, 22

ie eo sn chopeboncbliuiniincila. 5

Statutes

19 OS. § a3 __ ; 2-4, 15-16

os 9 | ; sees Cin cabanas POE Se 2 oN nC ee ANT 4-5, 16

In the

Supreme Court of the United States

OcTOBER TERM, 1983

HERB NEAL,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

The Petitioner, Herb Neal, requests that a Writ of

Certiorari issue to review the judgment of the United States

Court of Appeals for the Tenth Circuit entered on Septem-

ber 30, 1983, rehearing denied February 17, 1984.

OPINION BELOW

The opinion of the United States Court of Appeals for

the Tenth Circuit is published at 718 F.2d 1505 (10th Cir.

1983). No opinions were rendered by the Trial Court.

JURISDICTION

The Petitioner is seeking a Writ of Certiorari to the

United States Court of Appeals for the Tenth Circuit to

review its opinion affirming the Trial Court’s conviction of

the Petitioner. Jurisdiction is invoked under 28 U.S.C. Sec-

tion 1254.

=

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

IN THIS CASE

Title 18 Section 1341 United States Code states:

“Whoever, having devised or intending to devise any

scheme or artifice to defraud, or for obtaining money or

property by means of false or fraudulent pretenses,

representations, or promises, or to sell, dispose of, loan,

exchange, alter, give away, distribute, supply or fur-

nish or procure for unlawful use any counterfeit or

spurious coin, obligation, security, or other article, or

anything represented to be or intimated or held out to

be such counterfeit or spurious article, for the purpose

of executing such scheme or artifice or attempting so to

do, places in any post office or authorized depository

mail matter, any matter or thing whatever to be sent

or delivered by the Post Office Department, or takes

or receives therefrom, any such matter or thing, or

knowingly causes to be delivered by mail according to

the direction thereon, 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, cr both. June 25, 1948, c. 645, 62 Stat. 763; May

24, 1949, c. 139 Section 34, 63 Stat. 94.”

Title 19 Section 339 Oklahoma Statute further states:

“They shall have power:

1. To make all orders respecting the real property of

the county, to sell the public grounds of the county

and to purchase other grounds in lieu thereof; and for

the purpose of carrying out the provisions of this sec-

tion it shall be sufficient to convey all the interests of

the county in such grounds when an order made for

the sale and a deed is executed in the name of the

county by the chairman of the board of county com-

~—

missioners, reciting the order, and signed and acknowl-

edged by him for and on behalf of the county.

2. To audit the accounts of all officers having the care,

management, collection or disbursement of any money

belonging to the county or appropriated for its benefit.

3. To construct and repair bridges and to open, lay

out and vacate highways: Provided, however, that

when any state institution, schoo] or department shall

own, lease or otherwise control land on both sides of

any established highway, the governing board or body

of the same shall have the power to vacate alter or re-

locate said highway adjoining said property in the fol-

lowing manner:

If it should appear that it would be to the best use

and interest of such institution, school or department

to vacate, alter or relocate such highway, the gover-

ning board or body shall notify the board of county

commissioners, in writing, of their intention to hold

a public hearing and determine whether to vacate,

alter or relocate such highway, setting forth the lo-

cation and terminals of said road, and all data con-

cerning the proposed right-of-way if changed or re-

located, and shall give fifteen (15) days notice of such

hearing by publication in some newspaper in the county

or counties in which the road is located, and such hear-

ing shall be held at the county seat of the county in

which the road is located, and if a county line road,

may be heard in either county. At such hearing testi-

mony may be taken, and any protests or suggestions

shall be received as to the proposed measure, and at

the conclusion thereof if the governing board or body

shall find that it would be to the best use and interest

of such institution, school or department, and the pub-

lic generally, they may make an appropriate order

either vacating, altering or relocating said highway,

which order shall be final; provided further, that such

~~

institution, school or department may by agreement

share the cost of changing any such road; and provided

further that no property owner shall be denied access

to a public highway by such order.

4. Until January 1, 1983, to furnish necessary blank

books, plats, blanks and stationery for the clerk of the

district court, county clerk, register of deeds, county

treasurer and county judge, sheriff, county superin-

tendent of schools, county surveyor and county at-

torney, justices of the peace, and constables, to be paid

for out of the county treasury; also a fire-proof vault

sufficient in which to keep all the books, records, vouch-

ers and papers pertaining to the business of the county.

5. To set off, organize and change the boundaries of

townships and to designate and give names therefor:

Provided, that the boundaries of no township shall be

changed within six (6) months next preceding a gen-

eral election.

6. To do and perform such other duties and acts that

the board of county commissioners may be required by

law to do and perform.”

Title 19 Section 347 Oklahoma Statute states:

“Tt shall be unlawful for the board of county commis-

sioners to issue any certificate of indebtedness, in any

form, in payment of or representing or acknowledging

any account, claim or indebtedness against the county,

or to make any contracts for or incur any indebtedness

against the county in excess of the amount then un-

expended and unencumbered of the sum appropriated

for the specific item of estimated needs for such purpose

theretofore made, submitted, and approved or author-

ized for such purpose by a bond issue. All warrants

upon the county treasurer, for a county purpose, shall

be issued upon the order of the board of county com-

missioners, drawn by the county clerk, signed by the

ee a

chairman of the board, and attested by the signature of

the county clerk, with the county seal attached. Each

warrant shall designate the fund, department and ap-

propriation account, and shall further show the nature

of the indebtedness acknowledged by the allowance

of the claim so paid. Whenever a county officer holding

an elective office will not immediately succeed himself

in said office, it shall be unlawful for the board of

county commissioners, during the first six months of

the fiscal year in which said term of office expires, to

approve claims for the operation of said office totaling

in excess of one-half the amount allocated for the op-

eration of said office during said fiscal year, unless

approval in writing is obtained from the county excise

board and any claim in excess thereof in any warrant

issued pursuant thereto shall be null and void.”

STATEMENT OF THE CASE

A. Procedural Background of the Case

The Petitioner herein, Herb Neal, was initially indicted

on April 8, 1982, by a Federal Grand Jury in the Western

District of Oklahoma. Thereafter, on May 7, 1982, a super-

seding indictment was returned, charging Petitioner with

thirty-four (34) Counts of having devised and intending

to devise a scheme to defraud the Counties of the State of

Oklahoma, and using the mails in furtherance of this fraud,

in violation of Title 18, U.S.C. Sections 1341 and 1342.

The trial of the case commenced on August 16, 1982,

and the jury returned its verdict of guilty on Counts 1

through 22 and 24 through 34 on August 24, 1982. The jury

returned a finding of not guilty as to Count 23.

On October 14, 1982, the Honorable Fred Daugherty,

United States District Judge, sentenced the Petitioner to

_ a

the custody of the Attorney General on Count 1 for a period

of five (5) years and a One Thousand Dollar ($1,000.00)

fine; on Count 2 for five (5) years consecutive to Count 1

with a One Thousand Dollar ($1,000.00) fine; and on Counts

3 through 22 and Counts 24 through 34 to run concurrent to

Count 1.

The Petitioner thereinafter timely filed his appeal to

the United States Court of Appeals for the Tenth Circuit

which rendered its opinion affirming the trial court on

September 30, 1983. A copy of the opinion of the United

States Court of Appeals for the Tenth Circuit is attached

hereto as Appendix “A”.

The Petitioner herein timely petitioned the Court of

Appeals for a rehearing in his case, with the Petition for

Rehearing being denied by the Court of Appeals on Feb-

ruary 17, 1984. A copy of the Petition for Rehearing and

the Tenth Circuit Opinion overruling same are attached

hereto as Appendices “B” and “C”.

B. Relevant Facts Underlining the

Petitioner’s Conviction

The Petitioner’s case is one of many that arose from an

extensive investigation by the F.B.I., the LR.S., and the

United States Attorneys for Oklahoma in the payment to

numerous County Commissioners of kickbacks, by suppliers

of equipment or matericis purchased by the various counties

in Oklahoma for road and bridge building and maintenance.

During the period set forth in the indictment, the Petitioner

worked as a salesman for three companies in Ponca City,

Oklahoma, that supplied such materials. The 34-Count in-

dictment which charged the Petitioner was based upon

‘nile

allegations that the Petitioner herein, and others, devised

and intended to devise a scheme and artifice to defraud

the counties and the citizens of these counties in the State

of Oklahoma by depriving them of their right to have

county business conducted openly, honestly, impartially,

and free from corruption and undue influence by their

elected County Commissioners, and to use the United States

Mails in furtherance of the scheme.

The indictment alleged, and the proof at trial showed,

that the alleged use of the mails in furtherance of the al-

leged scheme was the payment of County Warrants or

checks, to the suppliers for whom the Petitioner worked.

The source of the alleged kickback money was never al-

leged, nor proven, to bear any relationship to either the

purchase price of the equipment, or the mailing of the

County Warrants.

Indeed, the Government’s allegations as set forth in the

indictment, relative to the mailings, was as follows. The

Petitioner would submit invoices to the counties which

claimed the sale and delivery of road and bridge building

and maintenance materials or supplies, thereby causing

the County Clerk’s Offices to encumber funds as approved

by the Commissioner and thereafter send through the U.S.

Mails envelopes containing County Warrants as payment

for supplies that were delivered. Further, that at some

point in time, the Petitioner would pay cash kickbacks to

various County Commissioners.

The Petitioner moved for a Judgment of Acquittal at

the close of the Government’s case in the trial court, claim-

ing that the evidence had failed to show that the mailings

willie

were an integral part of any scheme. The Motion was over-

ruled, and was subsequently renewed at the close of all the

evidence, and was again overruled. Finally, after the ver-

dict, the Petitioner moved for a judgment of Acquittal or

in the alternative for a new trial, asserting the same argu-

ment relative to the failure of the Government’s evidence

to show that the mailings were an integral part of the

scheme as alleged and proven. This argument was sub-

mitted to the United States Court of Appeals for the Tenth

Circuit, which also rejected same. The Petitioner argued

in the trial court, and on appeal, that under this Court’s

decision in United States v. Maze, 414 U.S. 395 (1974), the

allegations as contained in the indictment, and proof ad-

duced at trial, clearly showed that the mailings involved

in Petitioner’s case were not an integral part of any scheme _

to defraud the citizens of the counties of the State of Ok-

lahoma.

EXISTENCE OF JURISDICTION BELOW

Petitioner was convicted in the United States District

Court for the Western District of Oklahoma on 33 Counts

of a 34-Count indictment charging a violation of Title 18

U.S.C. Section 1341.

a

REASON FOR GRANTING THE WRIT

The United States Court of Appeals for the Tenth Cir-

cuit, in affirming the trial court, has sanctioned a departure

of the trial court from the accepted and usual course of

judicial proceedings in that both the trial court and the

Court of Appeals seemingly ignored this Court’s applicable

decisions.

I. THE FINDINGS OF THE TRIAL COURT AND THE

COURT OF APPEALS THAT THE MAILINGS IN

PETITIONER’S CASE WERE AN INTEGRAL PART

OF A SCHEME TO DEFRAUD IS IN DIRECT CON-

FLICT WITH THIS COURT’S DECISIONS.

As stated above, the Petitioner herein was charged

with devising a scheme to defraud counties and the citizens

of the counties of the State of Oklahoma by depriving them

of their right to have county business conducted openly,

honestly, impartially, and free from corruption and undue

influence by their elected County Commissioners. It was

further alleged that the Petitioner used the United States

Mail in furtherance of the scheme. Count 1 of the indict-

ment, which is essentially identical to the remaining Counts,

is as follows:

“The Grand Jury charges:

COUNT 1

1. During the period commencing on or about Jan-

uary 1, 1975, and continuing thereafter to on or

about April of 1981, the exact daies of which are

to the Grand Jury unknown, in the Western Dis-

trict of Oklahoma, and elsewhere,

———HERB NEAL————

the defendant herein, while acting as a salesman

for Evans and Associates Construction Co., Inc.,

aa Te

Redstone Industries, Inc., and Stewart Supply

Company, Inc., (hereinafter referred to as “The

Companies”), all of Ponca City, Oklahoma, com-

panies engaged in the business of selling road and

bridge building and maintenance materials and

equipment to county governments, devised and in-

tended to devise a scheme and artiface to defraud

the counties and the citizens of these counties in

the State of Oklahoma by depriving them of their

right to have county business conducted openly,

honestly, impartially and free from corruption and

undue influence by their e'ected County Commis-

sioners and to use the United States Mails in fur-

therance of the scheme.

The scheme to defraud was in substance, as follows:

2. As apart of said scheme, HERB NEAL,, did cause

to be submitted invoices to the counties which

claimed the sale and delivery of road and bridge

building and maintenance materials or supplies,

thereby causing the County Clerk’s Offices to en-

cumber funds as approved by the Commissioner

and thereafter send through the U.S. Mails en-

velopes containing County Warrants as payment

for supplies that were delivered.

3. As part of said scheme, HERB NEAL paid cash

kickbacks to various County Commissioners, in-

eluding Dwight William Hughey of Alfalfa County;

George O’Neil Gray of Alfalfa County; James Leon

Roe of Payne County; Leonard Johanning of Grant

County; Clifton C. Honeyman of Grant County;

and Robert Forbes White of Payne County; in con-

nection with sales of road and bridge building and

maintenance materials from The Companies.

4. It was a further part of the scheme that HERB

NEAL, while acting as a salesman for The Com-

panies, would enter into lease-purchase agreements

—j_

for the road building and maintenance equipment

with certain counties and in connection therewith

did pay certain County Commissioners cash kick-

backs for their purchase of said equipment. As a

further part of the scheme, the lease-purchase

agreements would be assigned to a bank doing

business with the County and thereafter said

County would make regular payments to the bank

through the mailing of County Warrants through

the U.S. Mails to the bank.

4. That on or about April 2, 1979, the exact date of

which is to the Grand Jury unknown, in the West-

ern District of Oklahoma,

————HERB NEAL—————

the defendant herein, for the purpose of executing

the aforesaid scheme to defraud, and atetmpting

so to do, did cause to be placed in an authorized

mail depository to be sent and delivered by the

U.S. Postal Service from Alfalfa County, Okla-

homa, to Stewart Supply Company, Inc., Ponca

City, Oklahoma, an envelope containing Warrant

Number 815, in the amount of $852.95 and War-

rant Number 861, in the amount of $100.00, and

did pay a cash kickback to George O’Neil Gray;

all in violation of Title 18 United States Code,

Section 1341 and 2.”

As stated by the indictment, it is alleged that the Pe-

titioner, a material supplier, somehow caused the County

Clerk’s Offices to encumber funds. Thereinafter, the var-

ious counties would send County Warrants for payments

of the delivered supplies. These County Warrants would

be mailed to the supplier, when a sales transaction was con-

summated, or would be set to a bank, in the event of a

lease-purchase arrangement.

aaliiinn

The evidence presented by the Government showed

that the Petitioner worked for Stewart Supply, relative to

Counts 1 through 9 and 11 through 21 of the indictment.

One witness for the Government, Dorothy Griffin, testified

that she had met with Ralph Stewart, owner of Stewart

Supply, to discuss making invoices for Stewart Supply, in

order that Stewart Supply would have money to operate

on with Commissioners. The substance of this alleged

scheme was that Dorothy Griffin, owner of Griffin Lumber

Company, would supply vendors with phony invoices to

cover sales of non-existent materials to counties. A vendor-

supplier would then give Griffin a check for the non-exis-

tent material which she would cash. She would thereinafter

return 90 to 95% of the money to the vendor-supplier and

keep the remaining 5 to 10%. Griffin testified that during

her meeting with Ralph Stewart, the Petitioner herein was

present, but took no part in the conversation. The Govern-

ment’s theory, relative to the time period when Petitioner

worked for Stewart Supply, apparently was that the source

of any funds for kickbacks paid by the Petitioner were the

phony invoices from Dorothy Griffin. It is important to

note, however, that these alleged phony invoices were not

involved with any Oklahoma Counties or bogus sales to

any Counties.

Other than Griffin’s testimony that she was creating

invoices for Stewart Supply, there was absolutely no proof

offered, that the Petitioner had any access to any alleged

funds supplied by Griffin. Indeed, Ralph Stewart, the

owner of Stewart Supply, testified that the Petitioner was

given no money from Stewart Supply to pay kickbacks.

(Trial transcript Volume 3, page 716, lines 19-22). No other

=

evidence was presented by the Government to indicate any

source of funds potentially available to the Petitioner while

working at Stewart Supply other than through the invoices

with Dorothy Griffin.

In regard to Redstone Industries and Evans & Associ-

ates, relative to Counts 10 and 22 through 29 of the indict-

ment, the Government’s evidence completely failed to show

from what source alleged kickbacks were paid, except pos-

sibly from Petitioner’s own personal funds. The testimony

of the witnesses from Redstone and Evans refuted any

theory that potential funds for kickbacks came from either

employer. (Trial transcript Volume 1, page 236, lines 3

through 11, 17 through 19, and page 238, line 7). Addi-

tionally, it was shown that Petitioner received only a salary

while working for these entities and was paid no commis-

sion for his sales. As the evidence showed that funds for

kickbacks were not related to payment by the county to

Stewart Supply, Redstone or Evans, the mailing of the

County Warrants simply was not shown to have been the

funds for the payment of the kickbacks, or in furtherance

of any scheme to defraud.

As this Court is well aware, the Federal Mail Fraud

Statute, Title 18 U.S.C. Section 1341, does not purport to

reach all frauds, but only those limited instances in which

use of the mails is an integral part of the execution of the

fraud, leaving all other cases to be dealt with by the appro-

priate State law. Kann v. United States, 323 U.S. 83, 56 S.Ct.

148, 89 L.Ed. 88 (1944); Parr v. United States, 363 U.S. 370,

80 S.Ct. 1170 (1960).

The Petitioner would submit that the dispositive issue

in this case is simply whether the mailings were sufficiently

snilltiian

closely related to the alleged scheme, as opposed to whether

the mails were used remotely in relation to the alleged

scheme. As this Court stated in United States v. Maze, 414

U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974):

“T1] In Pereira v. United States, 347 U.S. 1, 8-9, 74 S.Ct

358, 363, 98 L. Ed. 435 (1954), the Court held that one

‘causes’ the mails to be used where he ‘does not act

with knowledge that the use of the mails will follow

in the ordinary course of business, or where such use

can reasonably be foreseen, even though not actually

intended. .. .” We assume, as did the Court of Appeals,

that the evidence would support a finding by the jury

that Maze ‘caused’ the mailings of the invoices he

signed from the out-of-state motels to the Louisville

bank. But the more difficult question is whether these

mailings were sufficiently closely related to respon-

dent’s scheme to bring his conduct within the statute.”

(At page 648).

It would appear, therefore that the Government must

contend that the mailings of the warrants were an integral

part of the scheme, it is clear, however, that the alleged

scheme was not contingent upon the mailing. As related

in the indictment, the purported scheme devised by the

Petitioner was to deprive the citizens and the counties of

the State of Oklahoma of their right to have county busi-

ness conducted openly, honestly, impartially, and free from

corruption and undue influence by their elected County

Commissioners, and the use of the United States Mails in

furtherance of the scheme. In other words, to fall under

the Federal Mail Fraud Statute, the mailing of the County

Warrants must have been an integral part of the scheme to

defraud, with the mailing sufficiently closely related to the

purported scheme.

=

The Petitioner would submit that it was immaierial to

the scheme as alleged and proven, whether any County

Warrants were ever actually mailed. As stated hereinabove,

the Government wholly failed to show that County War-

rants were the source of any money for kickbacks. In-

deed, the evidence presented showed that the only poten-

tial source of founds for kickbacks was either Dorothy

Griffin, or the Petitioner’s own money. There was never

any proof shown by the Government that the goods sold

in each Count of the indictment were either overpriced, or

not delivered. It would appear clear that the failure of

proof logically relates to the nebulous scheme alleged in the

indictment. Obviously, if the Government had any proof

that the Warrants were in fact the source of the kickbacks,

the scheme would have alleged that the Petitioner paid

kickbacks, and was able to pay kickbacks, because of the

mailings of padded, or bogus County Warrants. Not one

Count of the indictment does so.

Petitioner would also submit that once the goods were

delivered to the county, that the mailing of the Warrants

were, in effect, compelled by State law. As such, this case,

and the other County Commissioner cases, are strikingly

similar to Parr v. United Stutes, 363 U.S. 370, 80 S.Ct. 1170

(1960). In any event, as hereinabove mentioned, the fru-

ition and execution of the purported scheme to defraud was

not shown to depend on any mailings of County Warrants.

The Petitioner would submit that the circumstances in

the instant case are similar to the Parr case in the follow-

ing respects. Oklahoma State law compels County Commis-

sioners to purchase materials, supplies and equipment to

maintain and build their roads and bridges. Title 19 O.S.

= =

Section 339. State law further requires payment for the

county obligations to be made by County Warrant. Title

19 O.S. Section 347. Since the county is compelled to issue

Warrants for payment of its obligations, the County Clerk

is compelled to use the mails to perform his or her legal

duties. All purchases made by the county for county pur-

poses are paid for by County Warrants. Under Oklahoma

law, there is simply no other way a county in the State of

Oklahoma can pay its bills. Therefore, the mailings of

County Warrants, for payment of county obligations, can-

not be said to be unlawful and a plot incident to an essen-

tial part of a scheme within the Mail Fraud Statute, even

assuming a kickback is allegedly paid after the Warrant is

cashed. The mailings are made, not for purpose of execut-

ing a scheme to defraud, but for the purpose of paying the

counties’ bills.

Admittedly, if the Government had alleged and proven

that Petitioner’s sales to the various counties relative to

the indictment were based upon non-existent equipment,

whereby the county received no supplies or materials, then

it could be argued that the mailings of the County War-

rants would clearly be unlawful under the Mail Fraud

Statute.

In relation to the Counts of the indictment relating to

equipment sales through lease-purchase agreements, Counts

30 through 34 of the indictment, the alleged scheme was

even more unrelated to the mailing of the Warrants. In

those Counts, the Warrants were mailed to the bank for

payment of the equipment, subsequent to receipt by the

vendor of the proceeds from the sale (T.T. Vol. 1, p. 225,

lines 22-25, p. 256, lines 1-11). Assuming arguendo, the

_—

existence of a scheme, neither the Petitioner nor his em-

ployers would care whether County Warrants were ever

mailed to the banks (T.T. Vol. I, p. 161, lines 7-20).

In the Maze case, this Court determined that the “mail-

ing” must be for the purpose of executing the scheme in

a criminal case brought under the Mail Fraud Statute. In

Maze, the defendant obtained a credit card belonging to

another, and obtained food and lodging at motels in Cali-

fornia, Florida and Louisiana. Each of these businesses sent

to the Citizens Fidelity Bank & Trust Company in Louis-

ville, which had issued the card, invoices representing goods

and services furnished to the defendant. The defendant was

convicted under the Mail Fraud Statute; however, the Court

of Appeals reversed the verdict and this Court affirmed the

decision determining that the mailing by the establishments

to the bank did not constitute a mailing for the purpose of

executing the scheme. In that case, the Government con-

tended that the delay in mailing the invoices to the bank

allowed for additional use of the card without detection.

In affirming the Circuit Court’s decision, this Court stated:

“We do not believe that Sampson sustains the Govern-

ment’s position. The subsequent mailings there were

designed to lull the victims into a false sense of se-

curity, postpone their ultimate complaint to the author-

ities, and therefore make the apprehension of the de-

fendant less likely than if no mailings had taken place.

But the successful completion of the mailing from the

motel owners here to the Louisville bank increased the

probability that respondent would be detected and ap-

prehended. There was undoubtedly delay in transmit-

ting invoices to the Louisville bank, as there is in the

physical transmission of any business correspondence

between cities separated by large distances. Mail serv-

estilo

ice as a means of transmitting such correspondence

from one city to another is designed to overcome the

effect of the distance which separates the places. But

it is the distance, and not the mail service, which causes

the time lag-in the physical transmission of such cor-

respondence. . . . Congress could have drafted the mail

fraud statute so as to require only that the mails be

in fact used as a result of the fraudulent scheme. But

it did not do this; instead, it required that the use of

the mails be ‘for the purpose of executing such scheme

or artifice ...’ Since the mailings in this case were

not for that purpose, the judgment of the Court of Ap-

peals is affirmed.”

The Maze case was preceded by a similar credit card

case determined by the United States Court of Appeals for

the Tenth Circuit. In United States v. Lynn, 461 F.2d 759

(10th Cir. 1972), the defendants obtained a credit card,

owned by another party, and charged purchases in the State

of Wyoming. Subsequent thereto, invoices were mailed

from the establishments where goods and services were

obtained to the issuing bank for payment. As in and prior

to Maze, s' pra, the United States Court of Appeals for the

Tenth Circuit reversed the defendant’s conviction on the

mail fraud count determining that the mails were not used

for execution of the scheme. There, the Court stated:

“The gist of the offense of mail fraud lies in the use of

the mails to obtain money or property by fraudulent

means. Utilization of the mails after the scheme has

been fully consummated and completed in all of its

parts cannot supply the essential ingredients for this

offense. An examination of Tenth Circuit decisions

affirming convictions of violation cases consciously

availed themselves of the use of the mails in comple-

tion of their scheme. We view the transaction in Little

ee

—

America and Cheyenne, Wyoming, by use of the Ros

credit card, as completed when the goods were received

in exchange for the credit card sales drafts. It is im-

material what method the retail establishments chose

to collect from BankAmericard. Use of the mails was

not an essential element of this scheme. The Federal

Mail Fraud Statute does not purport to reach all frauds,

but only those instances in which the use of the mails

is a part of the execution of the fraudulent scheme.

All other cases are to be dealt with by appropriate

state law.”

It should be noted that, in both cases, the Court de-

termined that the scheme had been completed; however,

that fact alone is not determinative as other cases have

held mailing may be an integral part of the scheme even

though subsequent to fruition of the scheme. The usual

premise of alleging that the scheme was completed, prior

to the mailings, arises solely from the inference that a mail-

ing could not be “integral” if the scheme was already com-

pleted.

The Government, in its response to the Petitioner’s

Motion for New Trial, relied on the case of United States v.

Bottom, 638 F.2d 781 (5th Cir. 1981), a Fifth Circuit case

to distinguish the case at bar from Maze, supra, and Lynn,

supra. In Bottom, the defendants were convicted subse-

quent to an alleged scheme whereby, they as County Com-

missioners, participated in receiving money from “padded”’

and “bogus” invoices. In that scheme, pipe was sold by a

vendor, Baldwin, to the county in instances where less pipe

was delivered exhibited on delivery tickets and where no

pipe was delivered. In each of these instances, the County

Commissioner was paid, in cash, for one-half of the profits

from such sales. The County Commissioners were paid

-_—

prior to receipt of checks from the county for the pur-

chases and the defendants alleged that the scheme was

completed prior to the mailing of checks to Baldwin for

the sales. Unfortunately for the defendants, one act re-

mained for completion of the scheme. The. county paid on

the 10th of the month and subsequent to these payments,

the County Commissioners initialed the checks when re-

turned from the bank to finally approve the sale and pay- —

ment. The Court rejected the arguments of the defendants

and their reliance of Maze, supra, by distinguishing the cir-

cumstances. The Court went on to hold:

“The fraudulent scheme in the instant case employed

mailings which were integral to the execution of the

fraudulent plans and which were not made after the

fruition of the fraud but were necessary to complete

the scheme. The scheme was not complete when Baid-

win paid the defendants ‘up-front’ the bogus or padded |

amounts in the invoices because Baidwin still needed |

the assistance of the defendants, who were the only |

ones who knew about the fraud and who had control

of all the paperwork in their districts, to initial copies

of the checks which reflected payment of the phony

invoice attached to it. Furthermore, the county was

not defrauded by the commissioners, the money re-

leased and the checks mailed to Baldwin. From the

beginning of the scheme the defendant commissioners,

who knew that the invoices were bogus or padded,

were also aware that Baldwin would be paid by a

check mailed to him by the county. Therefore, in this

case, the mailing of the checks was an essential step |

integral to the completion or fruition of the scheme.” |

At first blush, it appears that the Bottom case is more

closely akin to the case at bar than Maze, supra. However,

it must be remembered that, in the case at bar, the various

—)

banks were the recipients of the County Warrants, and not

Stewart or Redstone. Again, in the case at bar neither

Petitioner nor his employers would care if the bank was

ever paid the monthly installments, as they had already

received their proceeds from the bank. It is also clear that

the invoices in the Bottom case were padded or bogus.

Petitioner would submit that the trial court and the

Circuit misconstrued or ignored the Maze, Parr, and Kann

cases. Not because the scheme was completed prior to the

mailing, but simply because the mailing of the monthly

lease-purchase payment was totally unrelated and not an

integral part of the alleged scheme.

Although this theory is more easily realized in lease-

purchase situations, the same theory applies in relation to

the sales of materials by the Petitioner. The mailings of

the County Warrants to the vendors, Redstone and Stewart,

were unnecessary for completition of the alleged scheme

as the Government’s evidence does not indicate any county

funds were the source of Petitioner’s alleged kickbacks.

Obviously, the mailings of these Warrants were remotely

related to the transactions, however, such use of the mails

was not an integral part of the scheme and played no role

in its completion.

Although the circumstances pertaining to the Counts

of the indictment in which sales of materials were made,

are different in that the Petitioner paid the alleged kick-

backs subsequent to the mailings, this fact alone does not

result in a reasonable determination that they were a step

toward completion of the scheme. Under the Government’s

evidence, the scheme would reach fruition even though

Warrants were never mailed to the vendors.

ia

=

CONCLUSION

The opinion of the United States Court of Appeals for

the Tenth Circuit affirming the Trial Court’s conviction of

the Petitioner herein erroneously ignores or expands this

Court’s prior holdings which require that a mailing, for

purposes of Title 18 U.S.C. Section 1341, be sufficiently

closely related to the alleged mail fraud.

For the reasons set forth hereinabove, the Petitioner

requests that the Writ of Certiorari be granted.

Respectfully submitted,

GENE STIPE

Counsel of Record

MITCHELL LEE

Stipe, Gossett, Stipe, Harper, Estes,

McCune and Parks

323 East Carl Albert Parkway

Post Office Box 1368

McAlester, Oklahoma 74502

(918) 423-0421

Attorneys for Petitioner

April, 1984

APPENDICES

APPENDIX A

PUBLISH

[Filed Sept. 30, 1983]

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA, )

Plaintiff-Appellee. )

V. ) No. 82-2309

)

HERB NEAL, )

)

Defendant-Appellant.

APPEAL FROM THE UNITED STATES DistrIcT COURT

WESTERN DISTRICT OF OKLAHOMA

(D.C. No. CR-82-101-D)

Gene Stipe (Robert K. McCune with him on the brief) of

Stipe, Gossett, Stipe, Harper, Estes, McCune and Parks,

Oklahoma City, Oklahoma, for Defendant-Appellant.

Susie Pritchett, Assistant United States Attorney, (William

S. Price, United States Attorney, Oklahoma City, Oklahoma,

was also on the brief) for Plaintiff-Appellee

Before HOLLOWAY, McWILLIAMS and SEYMOUR,

Circuit Judges

HOLLOWAY, Circuit Judge

This is a direct appeal by the defendant-app¢« ‘lant Herb

Neal from his convictions on thirty-three counts of a thirty-

four count indictment charging him with mail fraud and

aiding and abetting mail fraud, in violation of 18 U.S.C.

2a

[APPENDIX]

§ 1341 and 18 U.S.C. § 2.1 Neal was sentenced to terms of

five years’ imprisonment on each of his convictions, Count

II to run consecutively to Count I and Counts III through

XXII and XXIV through XXXIV to run concurrently to

Count I. He wsa also fined $1,000.00 for each of the first

two counts.

Viewing all the evidence, direct and circumstantial,

together with all reasonable inferences therefrom, in the

light most favorable to the Government as we must on this

appeal from a guilty verdict, United States v. Twilligear,

460 F.2d 79, 81-82 (10th Cir.), the evidence tended to show

the following:

I

Background

This case is one of many that arose from an extensive

investigation by the F.B.I., the I.R.S., and the United States

Attorneys for Oklahoma into payment to numerous county

commissioners of kickbacks, by suppliers of equipment or

materials purchased by the counties for road and bridge

building and maintenance. During the period covered by

the indictment Neal worked as a salesman for three com-

panies in Ponca City, Oklahoma, that supplied such ma-

terials. All thirty-four counts were premised on allegations

that Neal and others devised a scheme to defraud various

counties and the citizens thereof “by depriving them of their

right to have county business conducted openly, honestly,

impartially, and free from corruption and undue influence

by their elected County Commissioner and to use the...

mails in furtherance of the scheme.” (I R. 93). Cf. United

States v. Mandel, 591 F.2d 1347, 1362 (4th Cir.), cert. denied,

445 U.S. 961 (bribery of public official satisfies fraud ele-

ment of the mail fraud statute); United States v. Gann,

No. 82-1581, _.... F.2d .. , .—. n.2 (10th Cir.).

1 Neal was found not guilty on count twenty-three. (VII R. 1007-08).

Fe eke et ie en a ee ee a oe

|

|

b |

;

3

4

|

3a

[APPENDIX]

Seven different county commissioners testified at trial

that they had received kickbacks from Neal.? (E.g., V R.

248-50; VI R. 322-24, 409, 483, 547-48, and 573). Some stated

that they had received kickbacks on every purchase from

Neal while others testified that the kickbacks were only

occasicnal. Moreover, some commissioners testified that not

all suppliers gave kickbacks but they always tried to do

busine’. with suppliers like Neal who did give kickbacks.

(E.g., V R. 325). The payments generally approximated

10% of the purchase price. Some commissioners further

testified that they had accepted “50-50 splits” from Neal,

also known as “split” or “blue-sky” deals, in which the

commissioner would order materials or supplies from Neal,

the county clerk would issue a warrant, 1.e., check, to Neal

as payment for the goods, the goods would not be delivered,

and the commissioner and Neal would split the amount of

the warrant between themselves.

Oftentimes the kickback was agreed to before a pur-

chase was consummated, but generally the agreement was

tacit that a kickback would be forthcoming. The kickback

payment generally occurred after the county clerk had

mailed the warrant to Neal and the material or supplies

were delivered. Furthermore, the kickbacks were paid in

cash and in a surreptitious manner with no one present but

Neal and the commissioner, frequently while the parties

were alone in Neal’s car. In addition, six county clerks

testified that warrants in payment for materials or supplies

were always mailed unless the supplier was local and per-

sonally picked up the warrant. (V R 43, 50, 110, and 183).

With respect to the counts on which these convictions re-

sulted, mailing of the warrants was proved.

2 Each of these witnesses testified that they had entered into an agree-

ment with the United States Attorney to fully cooperate with the in-

vestigation in exchange for being allowed to plead guilty to one count of

conspiracy to commit mail fraud and to tax evasion, thus relieving the

commissioners of the threat of numerous prosecutions based on their in-

dividual transactions. (See e.g., III R. Pl. Exh. 47).

40

[APPENDIX]

In his defense, Neal offered the testimony of several

county commissioners to the effect that he never offered or

paid them kickbacks, and that of several character wit-

nesses who testified that Neal had a good reputation in his

community. Neal also took the stand and testified that he

had never paid a kickback, that the Government’s witnesses

were lying, and that some of the Government’s witnesses

had told him that they were simply going to tell the F.B.I.

whatever they wanted to hear.

For reversal, Neal asserts that the trial court erred

(1) in denying his motion for judgment of acquittal or in

the alternative for a new trial because the evidence was

insufficient to prove that the mails were used in furtherance

of a scheme or artifice to defraud; (2) in overruling his

motion in limine regarding evidence of the relationship be-

tween a Government witness and two of Neal’s in-laws;

(3) in not granting a pretrial request for a change of venue

based on prejudicial pretrial publicity, and; (4) in denying

his motion in limine concerning the introduction of evidence

outside the times and places set forth in the indictment.

II

At the close of the Government’s case Neal moved for

a judgment of acquittal, claiming that the evidence had

failed to show that the mailings were an integral part of

the scheme. (VII R. 702-09). The motion was overruled,

and then renewed at the close of all the evidence, and

again overruled. (I R. 163-69; VII R. 710-11 and 958-59).

Again, after the verdict Neal moved for a judgment of ac-

quittal or, in the alternative, for a new trial, asserting the

same argument. (I R. 187-91); see F.R.Crim.P. 29(c). On

appeal Neal asserts that the trial court erred in overruling

these motions in that the evidence failed to show that the

use of the mails was an integral part of the scheme. (Brief

of Appellant at 5 and 9).

Neal devotes the majority of his argument on this issue

to Counts XXX through XXXIV, Counts that charged kick-

1 iv ewtabae™s

.

:

§

i

;

da

[LAPPENDIX)

backs from lease-purchase transactions rather than direct

purchases.* Relying on United States v. Maze, 414 U.S. 395

(1974), Parr v. United States, 363 U.S. 370 (1960), Kann

v. United States, 323 U.S. 88 (1944), and United States v.

Lynn, 461 F.2d 759 (10th Cir.), inter alia, Neal contends

that the mailings by the counties to the banks of monthly

lease-purchase payments were “totally unrelated and not

an integral part of the scheme,” reasoning that the kick-

backs had been paid prior to the use of the mails and thus

the mailings played no role in the completion of the scheme.

(Brief of Appellant at 9-10). Furthermore, Neal contends

that the Government’s proof as to the us2 of the mails was

inadequate in the counts alleging kickbacks on direct pur-

chases as well. (Id.).

We see no need to delve into these arguments in detail

as we have considered and rejected them in related cases

filed today. See United States v. Primrose, No. 82-1842, __.

F.2d ___, (10th Cir.); United States v. Gann, No. 82-1591,

_.. F.2d __.. (10th Cir.); and see United States v. Whitt,

No. 82-2231, _.. F.2d ___, (10th Cir.); United States v. Bos-

ton, No. 82-1323, ... F.2d _. (10th Cir.).

In Primrose we held that the mailing of the warrants

from the county clerk to the vendor was an essential part

of the scheme, regardless of whether the kickback was paid

before or after the mailing. Primrose, supra, at ___, slip op.

at 10-12. There, the defendant was a country commissioner

and the argument that the scheme was complete upon re-

cept of the kickback was rejected. Here, Neal being the

salesman for various vendors, the mailing of warrants to

the vendors is even more closely within the scheme. Like-

wise in Gann, a case involving a lease-purchase agreement,

3 In the case of a lease-purchase agreement the county would lease

equipment from the suppiier with an option to purchase the equipment

at the end of the lease. The supplier would assign its rights under the

lease to a bank, Neal would pay a kickback to a county commissioner,

and the county would issues monthly payments (warrants) to the bank.

6a

{APPENDIX}

we found the mailing of a warrant from the county clerk

to a bank to be an integral part of the entire transaction

and in furtherance of the scheme to defraud. Gann, supra,

at __ , slip op. at 5-6.

The circumstances in the instant case are similar to

those in Primrose, Gann, Whitt, and Boston and the mail-

ings in all these cases were sufficient to bring the charges

within the purview of § 1341. Viewing the evidence in the

light most favorable to the Government as we must in

reviewing the Distirct Court’s refusal to grant a motion for

judgment or acquittal, United States v. Tager, 481 F.2d 97,

100 (10th Cir.), cert. denied, 415 U.S. 914, we conclude that

the trial court did not err and that Neal’s argument that

the evidence was insufficient to support the mail fraud con-

victions is without merit.

Ill

Neal next contends that the court erred in refusing to

grant his pretrial motion in limine by which he asked the

trial court to direct the Government not to refer to evidence

concerning relationships between Government witness Dor-

othy Griffin and Neal’s father-in-law, Ralph Stewart, or

brother-in-law, Monty Stewart.* (I R. 144). The motion

was overruled. (I R. 146).

Griffin testified that she was the owner of a lumber

company that frequently did business with county commis-

sioners and other suppliers to county commissioners. (III

R. 657). Griffin stated that her company provided a “serv-

ice” to other vendors, among them Stewart Supply Com-

pany. The “service” provided was as follows: a supplier

4 Ralph Stewart was the owner of Stewart Supply Company, one of

the three supply companies which employed Neal as a salesman during

the period covered by the indictment. Monty Stewart was Ralph Stewart's

son and was also employed by Stewart Supply Company.

7a

[APPENDIX)

would give her a check for the purchase of materials or

supplies which neither party ever intended to be delivered,

Griffin would cash the check and return ninety to ninety-

five percent of the cash to the supplier along with a bogus

invoice for the undelivered goods, and Griffin would keep

the balance of the cash as her commission. (VI R. 658-61).

The supplier then used the invoices as a record, which was

false, of the supplier’s expenditures, and as a means of ob-

taining cash to pay kickbacks.

Griffin stated that she provided this “service” for Stew-

art Supply Company while Neal worked there and identi-

fied some eighteen bogus invoices made for Stewart Supply

totalling approximately $80,000.00 worth of goods, as well

as numerous checks from Stewart Supply used to pay for

the invoices. (III R. Pl. exhs. 57, 57A through Q, 58, and

58A through X). Among the checks, Griffin identified one

(III R. pl. exh. 58P), signed by Neal, used as payment for

three phony invoices. (III R. Pl. exhs. 57M, N, and QO;

VI R. 671-74). Indeed, some of the invoices were made out

for materials, such as steel pipe, that were not even sold

by Griffin’s lumber company. She further testified to meet-

ing Ralph Stewart and Neal in an Oklahoma City coffee

shop where Stewart indicated that he wanted some bogus

invoices so that “he would have some money to operate on

with his Commissioners.” (VI R. 662). This was the only

time Griffin ever met Neal. (VI R. 661). She identified him

at trial. (Id.).

On appeal, Neal contends that this testimony was both

irrelevant and prejudicial in violation of Rules 401 and 403

of the Federal Rules of Evidence. Specifically he claims

that the prejudice “arose from the prosecutor’s ability to

inject Ralph Stewart into the trial of this action in order

to attempt to prove that Herb Neal paid kickbacks because

it was company policy.” (Brief of Appellant at 11-12). We

cannot agree.

In order for evidence to be relvant it need only “[tend]

to make the existence of any fact that is of consequence

»

8a

[APPENDIX]

to the determination of the action more probable or less

probable than it would be without the evidence.” Rule 401

F.R.E. Here, the Government had to establish use of the

mails in furtherance of a scheme to defraud in order to

meet its burden in proving a violation of § 1341. A portion

of the scheme alleged was that Neal would pay cask kick-

backs to various county commissioners. The Griffin testi-

mony indicated that Neal was present when Griffin and

Ralph Stewart, Neal’s father-in-law, discussed the purchase

of bogus invoices used as a means of obtaining funds for the

payment of kickbacks. Furthermore, the documentary evi-

dence introduced during Griffin’s testimony showed Neal’s

signature on a check from Stewart Supply Company to

Griffin’s lumber company for more than $4,000.00 worth of

materials and supplies that were never delivered.

The trial court is granted broad discretion in ruling on

the relevance of evidence, see Hackbart v. Cincinnati Ben-

gals, Inc., 601 F.2d 516, 525-26 (10th Cir.), cert. denied, 444

U.S. 931, and this court will not disturb that discretion ab-

sent a clear showing of abuse. Texas Eastern Transmission

v. Marine Office-Appleton & Coax, 579 F.2d 561, 566-67 (10th

Cir.). We feel the questioned testimony and documentary

evidence was probative of a scheme to defraud and find

no abuse of discretion in the trial court’s ruling in that

respect.

We are mindful, however, that relevant evidence should

be excluded if its probative value is substantially out-

weighed by the danger of unfair prejudice.® As with Rule

401, a trial court has broad discretion under the Rule to

determine whether the probative value of the evidence is

* Rule 403 F.R.E. provides:

Although relevant, evidence may be excluded if its probative

value is substantially outweighed by the danger of unfair prejudice,

confusion of the issues, or misleading the jury, or by considerations

of undue delay, waste of time, or needless presentation cf cumula-

tive evidence.

9a

LAPPENDIX)

substantially outweighed by the danger of unfair prejudice.

See Rule 403 F.R.E.; United States v. Franklin, 704 F.2d

1183, 1187 (10th Cir.); United States v. Nolan, 551 F.2d 266,

271 (10th Cir.), cert. denied, 434 U.S. 904. Our review of

the record reveals that the trial transcript includes more

than one thousand pages and Griffin’s testimony covered

only 46 of those pages. Griffin testified that the only time

she met Neal was at her meeting with Ralph Stewart and

that Neal did not play an active role in that meeting. Under

these circumstances we cannot say the trial judge abused

his discretion in admitting this testimony.

IV

Neal argues further that the trial court erred in deny-

ing his pretrial motion to transfer the case to another dis-

trict due to excessive pretrial publicity, citing Sheppard v.

Maxwell, 384 U.S. 333 (1966), inter alia.

In Sheppard, the defendant, who was suspected of mur-

dering his wife, was exposed to extensive pretrial publicity

including a three day televised inquest before an audience

of hundreds of persons, publication of the names and ad-

dresses of the potential jurors in the major local news-

papers more than three weeks prior to trial, and heavy

newspaper, television, and radio coverage calling for the

defendant’s arrest, detailing an extra-marital iove affair,

and revealing that Sheppard had repeatedly refused to take

a lie detector test, among other things.

Except as otherwise permitted by statute or the rules,

a criminal prosecution is to be conducted “in a district in

which the offense was committed.” Rule 18, F.R.Crim.P.

In instances of pretrial publicity, however, Rule 21(a),

F.R.Crim.P., provides as follows:

For Prejudice in the District. The court upon mo-

tion of the defendant shall transfer the proceeding as

to him to another district whether or not such district

is specfied in the defendant’s motion if the court is

10a

[APPENDIX]

satisfied that there exists in the district where the

prosecution is pending so great a prejudice against the

defendant that he cannot obtain a fair and impartial

trial at any place fixed by law for holding court in that

district.

Under the rule, the grant or denial of a motion for a

change of venue in a criminal case is within the trial court’s

discretion and, absent an abuse of that discretion, the ruling

will not be disturbed on appeal. See United States v.

Hunter, 672 F.2d 815, 816 (10th Cir.); United States v. Jobe,

487 F.2d 268, 269-70 (10th Cir.), cert. denied, 416 U.S. 955.

Unlike the Sheppard case, here Neal cites no specific

instance of prejudcial publicity. In addition, defendant can-

didly admits that “[t]here has been little pretrial publicity

concerning the particular appellant, Herb Neal. . .” (Brief

of Appellant at 12). Defendant contends, nevertheless, that

here the publicity “was even more insidious because the

publicity was administered in such a broad and bold stroke

that all defendants in these cases were tainted.” Id. at 12.

However, “... when publicity is about the event, rather

than directed at individual defendants, this may lessen any

prejudicial impact.” United States v. Hueftle, 687 F.2d 1305,

1310 (10th Cir.). Here defendant Neal submitted no evi-

dence to make a record about the pretrial publicity which

we can review. Moreover, “the proper occasion for determ-

ining juror partiality is upon voir dire examination.” United

States v. Lamb, 575 F.2d 1310, 1315 (10th Cir.), cert. denied,

439 U.S. 854. Neal has not designated the voir dire tran-

script as part of the record and we cannot speculate as to

what the record of that examination might reveal as to any

prejudicial effect on the venire.

On the record before us we see nothing to indicate that

the triai court abused its discretion in denying the venue

change, especially in a case such as this where, by Neal’s

admission, the publicity was not generally directed at him.

See United States v. Hueftle, supra, 687 F.2d at 1310.

ie

a I a Ra i a a nt eR Se A

[APPENDIX]

V

Neal’s final argument is that the trial court erred in

denying his motion in limine by which he attempted to

prevent the introduction of any evidence as to a scheme to

defraud or as to the payment of kickbacks which occurred

outside the times and places charged in the indictment. In

his brief in support of the motion he argued that such evi-

dence “would be prejudicial and cumulative” and unneces-

sary to prove the existence of a scheme in that evidence

as to the thirty-four counts charged should suffice. (I R.

143).

Here again our holding is guided by a companion opin-

ion which considered and rejected a similar argument. In

United States v. Primrose, No. 82-1842, _. F.2d ..... (10th

Cir.), where defendant-appellant Primrose was charged

with thirty-eight counts of mail fraud, among other things,

and substantial evidence of a scheme outside the time frame

charged in the indictment was admitted, we found no abuse

of discretion on the part of the trial court. As in the Prim-

rose case, here the court gave a cautionary instruction each

time such evidence was admitted (see e.g. VI R. 488) and,

in his charge to the jury, the judge instructed that evidence

of crimes concerning offenses not charged in the indictment

might be considered for the limited purpose of proof of

“motive, opportunity, intent, preparation, plan, knowledge,

identity or absence of mistake or accident... .” (VII R.

986; see also Rule 404(b) F.R.E.). Slip op. at 15-17. On the

reasoning in Primrose, we conclude that Neal’s argument

is without merit.

VI

The defendant appellant has demonstrated no rever-

sible error in the record of his trial and accordingly the

judgment is

AFFIRMED.

APPENDIX B

[Received Court of Appeals, Oct. 14, 1983]

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA, )

Appellee, )

vs. ) No. 82-2309

)

HERB NEAL, )

Appellant. )

PETITION FOR REHEARING

COMES NOW the Appellant, and Petitions this Court

for a Rehearing. In support of his Petition for Rehearing,

Appellant would point out to the Court that it has appar-

ently overlooked or misconstrued certain arguments raised

by Appellant in his Appeal.

Corcerning the examination of prospective Jurors, this

Court held that Voir Dire conducted by the Trial Court to

test the Jurors’ impartiality was not an abuse of discretion

and that the nature of the publicity in the County Commis-

sioner cases did not mandate greater care than was taken

so as to insure impartiality. The Court seemed to place

emphasis on the fact that none of the articles explicitly dealt

with the Appellant alone, and thus distinguish this case

from the Silverthorne case cited by Appellant in his Brief.

Appellant contends that it was not necessary for the

Pre-Trial publicity to be focused on him alone. The Thrust

and gist of the Pre-Trial publicity as evidenced by the

newspaper articles made part of the record was that there

was massive and widespread corruption among County

Commissioners and suppliers in the State of Oklahoma. In

fact, the scientific survey submitted into the record by the

Appellant, indicated that over ninety-four (94) per cent

of the people in the State of Oklahoma were aware of the

— Ee

2b

[APPENDIX]

Federal investigation into County Commissioner kickbacks

and that over sixty-two (62) per cent of the people of the

State of Oklahoma felt that there was widespread corrup-

tion among County Commissioners. This information alone

should have put the Trial Court on notice that there would

be people on the prospective Jury Panel with pre-formed

opinions. Yet the Trial Court failed to conduct a very

searching Voir Dire to discover whether there were any

persons on the Panel with pre-formed opinions. The Trial

Court, as does this Court, concluded that the Voir Dire was

sufficient because each Juror assured the Court that they

could be fair and impartial.

The Court has thus overlooked the thrust of the holding

in the recent case of United States v. Blanton, 700 F.2d 298

(6th Cir. 1983). The Blanton case was incorporated into

all the County Commissioner briefs and arguments by way

of subsequent letter to this Court. The Sixth Circuit con-

cluded from a survey of cases from nearly every Circuit

that perhaps not so much deference should be given to a

Juror’s assessment of his own impartiality. The Blanton

case involved a public figure and substantial Pre-Trial pub-

licity, as does the instant case. As in the instant case, the

Trial Court in Blanton failed to inquire into the nature and

extent of the Jurors’ exposure to Pre-Trial publicity. The

Court found that the Voir Dire conducted by the Trial

Court was not sufficient to determine the percentage of the

veniremen who had a preconceived opinion and was further

insufficient to determine the strength of the opinions, de-

spite the assurances by the Jurors that they could be fair

and impartial.

Appellant contends that the assurances of a Juror that

he can be fair and impartial should not be afforded much

deference in cases of substantial Pre-Trial publicity. That

at a minimum, a Trial Court should at least inquire into

the extent and sources of a Juror’s exposure to Pre-Trial

publicity. Only then will Counsel for Defendants be able

to adequately assess a Juror’s impartiality, and then in-

3b

CAPPENDIX)

telligently exercise pre-emptory challenges and challenges

for cause.

Appellant contends that his case was a proper one for

a more searching Voir Dire. He was a County Commis-

sioner in the State of Oklahoma at the time of Trial. There

had been widespread and massive publicity about the Fed-

eral Investigation into the so called kickback scandal in-

volving County Commissioners in the State of Oklahoma.

Evidence was introduced through Pre-Trial Motions that

a majority of the people in the State of Oklahoma thought

there was widespread corrvytion among County Commis-

sioners. The fact that the Appellant was not named spe-

sifically in these articles should not be determinative of

this issue, for the reasons heretofore cited.

WHEREFORE, the Appellant respectfully requests this

Court to grant a Rehearing on the issue of adequacy of the

Trial Court’s Voir Dires so thet he may further advance

the arguments cited in this Petition for Rehearing.

Appellant further contends that this Court has mis-

construed the Supreme Court’s holding in the Parr case.

The Court distinguishes Parr from the instant case appar-

ently because the persons who did the mailing in Parr were

not participants in the scheme. The Court states that the

Appellant’s reliance on Parr is misplaced because it rests

on his view of the vendors as outsiders rather than as par-

ticipants in the scheme. The Court states that if the scheme

is properly viewed as including the vendor’s receipt of

County business as well as the Appellant’s receipt of kick-

backs, then the analogy to Parr breaks down, yet the Court

fails to state why this is so.

Appellant contends that the Parr case is applicable to

the instant case for the reason that the mailing in each in-

stance are only incidental or collateral to the scheme, and

not for purposes of executing the alleged scheme. The

offenses involved in Parr and the instant case are of the

type that should be dealt with by appropriate State law.

4b

[APPENDIX]

They involve local officials misappropriating local funds.

The mails are not used to further the scheme to defraud

nor are they used to delay the detection of the scheme to

defraud. The fraud is executed when the County Commis-

sioner and the vendor meet and agree that a kickback

should be paid. That meeting of the minds is the gist of

the offense. How that fraud is achieved or carried out is

only a collateral matter. This type of scheme is unlike the

typical mail fraud scheme wherein the mails are used to

initiate or execute the fraud itself. In this case, the fraud

is executed without the use of the mails. The mailing of

the County Warrants or Invoices had no real affect on this

scheme for the reason that the scheme could have just as

easily taken place if the warrants and invoices had been

picked up by the supplier as they were in many instances.

In conclusion, the Appellant contends this Court has

broadened the mail fraud statute beyond the scope intended

by Congress. It has turned what is essentially a State or

Local offense into a Federal crime. The Supreme Court has

addressed a case similar to the one at bar and has held that

the mailings in question were not sufficient to invoke the

mail fraud statute.

Appellant respectfully requests this Court to reconsider

its holding in this case and reverse the mail fraud convic-

tions.

WHEREFORE, the Appellant respectfully requests this

Court to grant his petition for Rehearing and to hold fur-

ther argument in this case or in the alternative to reverse

the convictions on all counts for the above cited reasons

and if necessary, to remand this case to the District Court

for further proceedings.

Respectfully submitted,

HERB NEAL, Appellant

5b

[APPENDIX]

STIPE, GOSSETT, STIPE, HARPER, ESTES,

McCUNE AND PARKS

Post Office Box 1368

McAlester, Oklahoma 74502

918/423-0421

By: (s) Gene Stipe

Gene Stipe & Anthony M. Laizure

Attorneys for Appellant.

[Certificate of Mailing omitted this printing]

APPENDIX C

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

JANUARY TERM—February 17, 1984

Before Honorable William J. Holloway, Jr., Honorable Rob-

ert H. McWilliams and Honorable Stephanie K. Seymour,

Circuit Judges.

UNITED STATES OF AMERICA, )

Plaintiff-Appellee. )

vs. ) No. 82-2309

)

HERB NEAL, )

Defendant-Appellant. )

This matter comes on for consideration of appellant’s

motion for leave to file petition for rehearing out of time

and appellant’s petition for rehearing.

Upon consideration whereof, the application to file pe-

tition for rehearing out of time is granted to and including

October 14, 1983.

It is further ordered that appellani’s petition for re-

hearing is denied.

HOWARD K. PHILLIPS, Cierk

By (s) Robert L. Hoecker

Chief Deputy Clerk