Opposition Brief — McMahan v. United States

INDEX i

| Page

Oeieines GE |e A fen ra 1

_ Jurisdiction ..:........... jSeils duaebupnen Spates 1

Questions presented ............. eects PE ear er 2

TEIN oo Sicinidcess viva b 1A Acasa eee oe

Argument ............... se eeeeat eo eucaiee: eee me 4

| Le eR ER NET I he NT Ee

CITATIONS ae nat

Cases: ,

Blumenthal v. United States, 332 U.S.

DI cs neskceghderdeag son lee ee 8-9

Bruton v. United States, 391 U.S. 128 ..... 6

Chapman v. California, 386 U.S. 18......... 5

Frazier v. Cupp, 391 U.S. 128 ........... ce 6

Kotteakos v. United States, 328 U.S. 750. 9

. Mason v. United States, 95 F. 2d 612... 10

- Mims v. United States, 254 F.2d 654 _... ~ 10

- Ryno v. United States, 232 F. 2d 581 ...... 5

Stoneking v. United States, 232 F. 2d 385,

certiorari denied, 352 U.S. 835 ............ : 10

Tillery v. United States, 411 F. 2d 644..... 10

United States v. Kahn, 381 F. 2d 824,

certiorari denied, 389 Ri PI i cca scans 10

United States v. “Randolph, 403 F. 2.

Be HRA IT Rh, Rete inners Oe 5

United States v. Socony Vacuu “mM y OF Co.,

310 U.S. 150... A Seeasaeae aires 8

Statutes and Rules: | 2

15 U.S.C. 77e(a) ........ PTOI eee Pa om

‘SS She Norco oes 2

ce ED”. Beene netted eet ce ee ee

. Reise 36, FR. Crt. P. o.oo 5s ka 9

‘ Rule 52. F.R: Crim. P. as aeons recon 9

| ‘Int the Supreme Court of the United States

"OCTOBER TERM, 1970

No. 317

Louis E. MCMAHAN, PETITIONER

| "ay, |

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO THE

- UNITED STATES COURT OF APPEALS FOR

' THE SEVENTH CIRCUIT

a

al

| BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court. of appeals vias App. A)

is Leccorhuies at 424 F. 2d 1216.

J URISDICTION

The judgment of the court of appeals was entered

on March 3, 1970 (Pet. App. B). A petition for re-

_ hearing was denied on April 27, 1970. Mr. Justice

Brennan extended the time for the filing of a petition |

for a writ of certiorari to and including June 26,

" e

(1)

° 2

1970, and the. petition was filed on June 25, 1970.

The jurisdiction of this Court is invoked under 28 —

U. S.C. 1254(1).

QUESTIONS PRESENTED

1.. Whether reversible error ssaianlk from the in- ’

troduction of certain evidence claimed to be irrele-

vant and prejudicial. a

- Whether certain instructions of the trial judge

constituted plain error. oe

STATEMENT

A sixteen-count indictment anne in the United

States District Court for the Southern District of

Illinois charged petitioner and five others. with -viola-

_tions of the Securities Act, mail fraud, and conspiracy

to commit such acts (App. 13- 44)’ Prior to trial

six of these counts (3, 7,°8, 13, 14, and 15) were

dismissed on the motion of the government (Tr. 3).°

Co-defendants Vernon Mendenall,. Charles Barbre,

“Malcolm Rudolph and Glen }eCowen all entered

pleas of guilty to certain counts of the indictment and

testified as government witnesses. The jury found.

petitioner guilty on four counts (1, 11, 12; and 16),

1“ App.” pore to appellant’s printed Appendix, a copy of

which is on file with the Clerk of this Court.

2“Tr.” refers to the nine-volume transcript of the trial testi-.

mony; which we are lodging with the Clerk of this Court.

’ Count 1 charged a violation of 15 USC. 77q(x) by de-

frauding purchasers of Southern United Life Insurance Com-

pany stock; Count 11 charged a violation of 18 U.S.C. 1341

in causing to be mailed certain insurance (Stock certificates;

[7

3

and not guilty on the remaining six (App. 8). On

December 9, 1968, petitioner was sentenced to impris-

onment for fovr yéars on Count 1, fined $5,000 on

Count 11, $1,000 on Count 12, and placed on proba-

tion fof five years on Count 16 (theonspiracy

count) (App. 44-45). On i tian the conviction was

affirmed. |

The evidence, outlined” in the opinion below (Pet.

App. A, 3- 4), showed that in 1962 petitioner and

some associates purchased a charter for Southern

‘ United Life Insurance Company in Little Rock, Ar-

kansas,, with petitioner being appointed president of |

the company (Tr. 454-463). Thereafter, petitioner

and some associates went to Mount Vernon, Illinois, ~

met with. co-defendant Vernon Mendenall, who was

“an insurance agent, ana arranged for the sale of

Southern steck. At that time there- was left with

Mendenall 10,500 shares of stock for which he-was

‘to pay $.70 per share and sell it for $1. 25 (Tr. 21- .

'24,-172). |

Subsequently, Mendenall set up & Sales organiza-

tion in ‘which - co- defendants Barbre, Rudolph, and

' McCowen participated The salesmen sold - Southern

United Stock to ‘a number of investors who: testified

regarding their purchases.’ Petitioner made repre- -

~ Count 12 charged a violation of 15 U.S\C. 77e(a) in caus-

ing to be mailed certain stock certificates which had not been _

registered with the Securities and Exchange’ Commission:

and Count 16 charged a conspiracy to violaté the above stat-

utes (see Pet. App. A, 2 -3).

‘See, e.9., Tr. 26-29, 173, 231-282, 542- 545, 563-564, 607,

629-631, 665-666, 780, 1018- -1020, 1056-1060, 1085-1086, 1112-

1118, 1231, 1241, 1247-1248, 1257-1258. - ;

@

sentations to various persona, including investors and

_ stock’ salesmen, that Southern ‘United was very pros-

-perous, when in ‘fact the company» was in very poor

financial condition, requiring the investment of new

- eapital (Tr. 69-71, 78-79, 97, 156-157, 550, 557, 559-

560, 978-980, 989). The salesmen, basing their rep- —

resentations on statements made by petitioner, in-

formed various potential customers that the company

was very prosperous and represented a good invest-

ment opportunity (Tr. 188, 401; 557-561, 771- 772, |

1233). .

When sales of Southern United stock were made,

the proceeds would be sent to petitioner at the hotne .,

office in Little Rock (Tr. 29-30, 398-400). The mails.

- were used in the collection of various checks involved _

and in sending out stock certificates which had been

purchased (Tr. 721-727, 845-846, 1094-1095, 1254-

— 1255). The stock of Southern United. was not regis- -

tered with the Sequrities and Exchange Commission,

‘nor was it registered with officials of the State of.

: Illinois. On February 5, 1963, the Secretary of State .

of Illinois issued an order requiring Southern United

to .cease and desist. from the - of its stock (Tr.

949-950). —

( _ ARGUMENT,

A variety of allegations are made regarding the —

admissibility of evidence, the validity of the conspir-

acy charge and the adequacy of certain instructions

given to the jury. None of the claims warrants. ple-

= review by this Court.., |

"ae «*

-

1. Petitioner contends that the government intro-

duced ‘irrelevant and prejudicial evidence as to two |

matters—the Arkansas State Life Insurance Com-

pany and the Columbia. Investment. Company (Pet...

18-23). }

a Mrs. Gie eking, a ee a of tesaibiinin United |

stock, - testified that in January 1963 co-defendant —

’ McCowen (who had entered a guilty plea prior to

trial) told her that he knew that she had stock in

Southern United and that he was selling Arkansas

State Life Insurance Company stock (Tr. 1266- 1267 ae

“Mrs. Gieéseking Adentified Government Exhibits 141 ©

and 142, whichshowed that She and her husband

purchased stock in Arkansas Stat® Life (Tr. 1266,

1268).° ‘Arkansas State Life and Southern United

later entered into a — ewe (Tr. 1001- ;

— | :

5 Petitioner seeks (Pet. 19-22) to find a certiorari question

in the fact that the court of appeals pointed out petitioner’s .

failure to meet his burden of showing prejudice. in these cir-

cumstances (Pet. App..A, 5). But the situation here is ..

wholly unlike the situation where “highly prejudicial evi-

dence” in violation of constitutional rights casts upon the gov-

ernment (the offending party) the burden of showing lack of

- prejudice. See Chapman Vv. California, 386.U.S. 18, 24. Here .

the error was clearly of a minor nature and non-constitutional

in character; it was incumbent upon petitioner. to show—as

he failed to do\that it fatally prejudiced the jury. See Ryno

. Vv. United States, 232 F. 2d 581, 584 (C.A. 9). Moreover, the

situation here is entirely different from that in United. States:

v. Randolph, 403 F. 2d 805 (C.A. 6) (see Pet. 20), where gov-

‘ernment counsel on cross-examination of the -accused im-

properly asked if he had partivipated in an unrelated crim-

inal act, and the record did not. disclose any factual basis for

as question.

x

f

¢

6

-Defense counsel moved for a mistrial on the ground oa

' that the government was introducing evidence of an-.

- other crime ‘for which petitioner was not charged,

_.and that the court’ could not cure-- this prejudice by

an instruction to the jury -(Tr. 1268- 1269). The

court denied the motion © and promptly charged. the

"jury “positively ; te disregard any testimony about Ar .

kansas State Life Insurance Company”; that it had

no connection ‘with’ petitioner ; ; and that it was “not

to be considered in any wise as part of this case” (Tr.

1273). Petitioner to the contrary (Pet. 18-21), the

district court’s unconditional and prompt instruction |

cured any error in the introduction of this single piece

_ of evidencé inthis lengthy case. See Frazier v. Cupp,

394 U.S. 731, 735-736; Bruton v. United States, 391

U.S. 123, 135. That the jury was particularly sensi- |

tive to its duties is underscored by. its selective ver-

os dict. " ° s- .

b. One. Hastings, an attorney-examiner for the

Securities Division of the State of llinois, testified

that he was in court by reason of a subpoena duces

i tecum to produce records pertaining to Southern

United; including a restraining order issued to South-

ern United by the State of Illinois. With regard to

his apparently inconsistent testimony as ‘to whether,

in response to another subpoena, he had brought a

cease and desist order relating to Columbia Invest-

ment Company (Tr. 414-417), defense counsel moved

for a mistrial, which was denied (Tr. 417-422).

Thereafter, without any defense objection, the prose-

cution offered for identification by this witness the

~__ cease and desist order issued to prohibit the sale of

securities ‘in mpg Columbia Investment Com-

pany (G. Ex. 2 422). Other government eX-*

hibits (Govt. Exs. 23-25) concerning Columbia’ In-

; vestment Company were also introduced — in evidence

without any defense objection (Tr. 423- 424). Imme-

- diately after Hastings’ testimony, the :government

called’ one Horton. to testify, in an attempt to tie

" petitioner into Columbia Investment. When govern-

ment.counsel inquired as to Horton’s purpose in tray-

eling to St. Louis:to meet petitioner in December

1960, defense counsel objected: “It’s irrelevant and

_ immaterial, it isn’t within the scope’ of the indict- -

. ment, starts- in-+-October 1, 1961 [the date the in-

, dictment alleged the conspiracy began].’”. After the

_ ‘court overruled the objection, Horton answ ered? “In

| connection. with Columbia Investment Corporation”

(Tr. 433- 434). Horton testified that while in St.

Louis he learned that the Illinois Securities Depart-

ment had issued’ a cease and desist order against

~ Columbia Investment: Company (Tr. 435- -436); and

that. petitioner was connected with Columbia Invest-

~*~ ment Company (Tr. 438-446). Horton further testi-

fied that on January 29, 1962, he went to the. Securi-’

ties Department office at Springfield, Illinois, ‘to in- ©

vestigate Columbia Investment Company’s possible

violation of Illinois laws relating to securities (Tr.

447). Horton testified that petitioner was not named

‘ in the cease and desist order against Columbia (Tr.

‘478). No specific objection was raised by =

counsel on the ground that reference to Columbia as

irrelevant.

4

4 ries ? “8

From the foregoing recitation it is cieaide argu-" |

able that the court below did not err in ruling that —

no objection had been :made to the introduction of

| ‘4 the challenged évidence at the tPial on the ground

rid

that reference to Columbia was irrelevant (see Pet. —

App. A, 4-5). At all events, the further ruling of the: .

court below—that no plain error requiring reversal

--was shown—was plainly correct. Petitioner was “not.

~ named in the cease and desist. order; nor was there

vahy proof adduced at trial that he had any knowledge.

- of the order or any possible violations by Columbia .

» Investment: Company in Illinois, Mere “minor aber-

rations in a prolonged, trial” such as that involved.

_. here, do not warrant reversal. United.States v. So-

‘cony Vacuum Oil Co., 310 U.S. 150, 239-240..

.2. a. Petitioner’s “ Pontenition that the court’s =

charge to the jury impreperly. failed to require a find-

ing of a single-conspiracy—{Pet. 24-26) is insubstan- -——- -

tial. Viewed realistically, the charge did require a

finding of.a single conspiracy.’ It stated that Count.

16 charged “a conspiracy” (Tr. 1560) and that to

convict petitioner the government had to prove beyond _

a reasonable doubt the, existence of “a conspiracy”

(Tr. 1561, 1563,°1564). Moreover the indictment ~-

charged only one conspiracy (namely that relating

in Count 16 to sales to investors in Southern United

Life Insurance Company (App. 34-45): ‘The overt.

acts pertain “almost exclusively to Southern. United,

and the count refers several times to “said conspir-

acy” (in the singular) (App. 39). The ‘evidence also

discloses only the single conspiracy relating to sales

to investors in Southern United. Contrast Blumen-

a

thal v. United States, 332 .U.S, 539, 558-559, which

is here.controlling,- with® étteakos v. United States,

328 U.S. 750; upon. which petitioner improperly re-.

lies (Pet. 17, 24). os

' 6. In its final charge, the court, without; defense

objection, instructed in per tinent part as follows (tr,

1550- 1551) : 3

It is the’ pr ovince of the Jury to deter mine ie ‘

credibility of each witness and the weight. to *be

given to his testimony. In weighing the testi--

mony of each witness, the Jury should consider °

* * * the extent, to Which he has been corrobo- ~*

‘rated or contr adicted, if at all, by other credible |

evidence.

If the Jury believes that a .witness has wile

fully. sworn falsely to a material fact in the case,

the jury. may disregard his testimony in whole .

or in part, except insofar as it may have been

corroborated by other credible’ evidence, i in the

case.

We point out initially that, “having failed to Gu ject

“to these instructions at tial, petitioner should not

" now be heard to claim error thereon. Rule 30, F.R.

. Crim. P. Nor, as it is now asserted, did-this instruc-~

- tion constitute “plain” error. afecting substantial:

~~ rights: Rule 52° (b),. F.R. Crim. P. Petitioner reads

_ the last paragraph of this instruction as not” requir-

’ ing the jury “to disregard that portion of a witness’

testimony which they believe Lis] false” (Pet-27). This os

_ is a’ strained construction: which wholly overlooks the

paragraph immediately preceding. The more natural

interpretation is that the jury was told it could con-

sider that part of a witness’ testimony which it be-

10

lieved to be true ‘wliere it has been cor roborated, even

es though it believed other testimony which he has given

~ to be false and not’ to be credited. See United States’ .

(fy. Kahn, 381 F. 2d 824, 835-836 (C.A. 7), certiorari - ,

_{ denied,: 389 U.S. 1015; ‘Mason. ‘v. United States, 95 ;

. Fi 2d 612, 614 (C.A, 5).

c. There is no basis to petitioner’s conteition that

the court committed plain errorin failing to instruct

that testimony of the co-defendant accomplices shou]d |

be received with caution. Petitioner made no request

at the trial for such an instruction (Pet. : 28-29).

Moreover, ‘it is’ not reversible: error to fail to give--

~ such an instruction, particularly ‘where, as here, there

was corroboration of the accomplices’ evidence by rea- —

son of testimony of defrauded investors (see, ¢.g.,

- Tr. -1056-1060, 1085- 1086, 1112- 1113, 1241, 1247-

1248, 1257-1258). Mims v. United States, 254 F.2d

654, 655-658 (C.A.. 9); Stoneking v. United States,

232 F. 2d 385, 390- 392 a 8), | certiorari denied,

352 U.S: 835. ~. ;

Tillery v. United. States, 411 F. 2d 644 (CA. 5),

isenot in conflict since there the testimony of the ac-

_ complice was not corroborated and was’ thought by

the court of appeals to be unreliable by reason of

previous conflicting statenients concerning his knowl-

edge of the crime. In Tillery, moreover, the court

recognized that “[t]he failure to warn a jury about

accomplice testimony is, not necessarily ‘reversible

error in all cases” (411 F. 2d at 647),..~°

For the reasons ‘stated it is respectfully submitted

that the petition sfor. a writ of certiorari should be

denied.

JULY 1970.

me : fe

CON CLUSION

>

_ Erwin _N. GRISWOLD,

' Solicitor General:

WILL WILSON,

_ Assistant Attorney General.

pk _ JEROME M. = M. Fern,

ROBERT._G.. MAYSACK,

‘Attorneys.

.

- ees

%

co

° 7

a

Ke

Se,

- .

*

.

<i

G

fe

é “a 4

_

wv U. S. GQ@VERNMENT PRINTING OFFICE; 1970

Nets

1H.