# Petition for Writ of Certiorari — Kramer v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1976
- **Citation:** 424 U.S. 909

## Text

NOL i.

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In The | pies
Supreme Court of the United States
October Term, 1975

Oo-

No. ..... YW 5 ~ 6 5 ()

4)
Vv —

EARL L. KRAMER,
Petitioner,
Vs.
UNITED STATES OF AMERICA,

Respondent.

a ~--—— -Q-- - -—$————

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

Louis M. Fiscuer

1115 Grant Street

Denver, Colorado 80208

Max A. Wuintsonx

Suite 100, 1860 Lineoln St,

Denver, Colorado 80203

Counsel for Petitioner
October, 1975

COCKLE PRINTING CO., 1822 ST. MARY'S AVE... OMAHA

INDEX
Pages
Opinion Below .. .... ; 2
Pee GER PRE sekiaadcanadh 2
Questions Presented —. 2
Constitutional Provisions Involved —. ; 3
Statement of the Case pie ee eae 3

Reasons for Granting the Writ
1. The decision below raises important ques-
tions concerning the administration of jus-

~]

tice in conspiracy prosecutions.

2. The decision below raises important ques-
tions concerning the conduct of U. S. attor-
neys and defendants’ rights to a fair trial... 13
Conclusion —....... inbsasBishina diosa ine Nace rones oahalecal RGR a
Appendix
Opinion and Judgment of Court of Appeals... A-1
Order Denying Petition for Rehearing —— .....A-18
TABLE OF CITATIONS
Cases
Berger v. United States, 295 U.S. 78 (1935) . .... 18,15

California v. Green, 399 U. S. 149 (1970) — 9, 10,11, 12

Carbo v. United States, 314 F. 2d 320 (CA 9 1963),
out. Genlea Sty t. &. He)

Dutton v. Evans, 400 U. S. 74 (1970) ... .....7,9, 10,11, 12

il

TABLED OF CITATIONS—Continued
Pages
Krulewiteh v. United States, 336 U.S. 440 (1949)...7, A-11
Lutwak v. United States, 344 U. S. 604 (1953)... i
Mooney v. Holohan, 294 U. 8. 103 (1935) ....-..... 18
United States v. Ash, 413 U.S. 300 (1973) 2.0 00... 18

United States v. Bowen, 500 F. 2d 41 (CA 6 1974)
cert. denied 419 U. S. 1003 (1974). eeencnenee = 16

United States v. Calvert, 498 F. 2d 409 (CA 6

United States v. Grey, 422 F. 2d 1043 (CA 6 1970). 15
United States v. Gullo, 502 F. 2d (CA 3 1974) 15

United States v. Harrell, 436 F. 2d 606 (CA 5
NSE AS eet hehe ital siete ante eee OI

United States v. Malizia, 503 F. 2d 578 (CA 2
1974), cert. denied 420 U.S. 912 (1975) 14

United States v. Morton, 483 F. 2d 573 (CA 8

United States v. Nixon, 418 U. S. 683 (1974) WW... 10
United States v. Perry, 512 F. 2d 805 (CA 6

United States v. Santos, 385 F. 2d 43 (CA 7 1967)
cert. denied 390 U. S. 954 (1968) 0. cecum 8

United States v. Soecony-Vacuum Oil Co., 310 U.S.

RESET RIS ei SEERA oO SOME I

ili

TABLE OF CITATIONS—Continued

Pages
United States v. Spanos, 462 F. 2d 1012, 1014
(CA 9 1972) SER at GONE a ea Far ED UL NR 8
United States v. Vaught, 485 F. 2d 320 (CA 4
BNI tinh iis nay els nicecas ce ENE NEO OE
Wynn v. United States, 180 U. S. App. D. C. 60,
oe Bs eae emma |
Constitutional Provisions
U. S. Constitution, Amendment V ............. 3
U. S. Constitution, Amendment VI 3

Other Authorities

A.B.A. Standards for Criminal Justice Relating to the

Pressenen Pumten $2.2 2. CU

Prosecution Function §5.6(b) 2.0... ce ee 14
Davenport, The Confrontation Clause and the Co-

Conspirator Exception in Criminal Prosecutions:

A Functional Analysis, 85 Harv. L. Rev. 1378

RU toe ati can orn at, Se 8, 9, 12, A-11
2. Wigmore, Evidence § 286 (3d ed. 1940) , 14
kN TAR >) Seana enone amaa 2
18 U.S.C. § 371 ..... SN EA AA SE.
18 U.S.C. § 1001 ...... RUE ae 3, 4, A-2, A-3, A-12

I hie Sabicea ahccoctecepeaschabpndieemeabamanhoes:. ae

In The
Supreme Court of the United States
October Term, 1975

ray
—

NSPE

EARL L. KRAMER,
Petitioner,
vs.
UNITED STATES OF AMERICA,
Respondent. +.

ray
st

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

—
Vv

The Petitioner, Earl L. Kramer, respectfully prays
that a writ of certiorari issue to review the judgment and
opinion of the United States Court of Appeals for the
Tenth Circuit entered in this proceeding on January 6,
1975.

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OPINION BELOW

The opinion of the Court of Appeals, which has not
yet been reported, appears in the Appendix hereto. No
opinion was rendered by the District Court for the District
of Colorado.

JURISDICTION

The judgment of the Court of Appeals for the Tenth
Cireuit was entered on January 6, 1975. A timely petition
for rehearing was denied on October 2, 1975, and this pe-
tition for writ of certiorari was filed within 30 days of
that date. This Cou jurisdiction is invoked under 28

U.S.C. § 1254(1).

QUESTIONS PRESENTED

1. Is a defendant denied his right to confrontation
or his right to a fair trial when, in a conspiracy prosecu-
tion, an incriminating hearsay declaration of an alleged
co-conspirator is admitted into evidence and the declarant
is never asked whether he made such a statement, although
he testifies as a government witness?

2 Did the tactie of the prosecutor below, in introdue-

ing the hearsay declaration of an alleged co-conspirator
but failing to inquire of the declarant, who testified as a
government witness, whether he had made such a statement

we)

constitute improper conduct on the part of the prosecution
so as to warrant reversal of petitioner’s conviction?

CONSTITUTIONAL PROVISIONS INVOLVED

Constitution of the United States, Amendment V, pro-
vides in pertinent part:

‘*No person shall * * * be deprived of life, liberty,

or property without due process of law; * * *.”’

Constitution of the United States, Amendment VI,
provides in pertinent part:

‘*In all criminal prosecutions, the accused shall enjoy

the right * * * to be confronted with the witnesses
against him; * * *.’’

STATEMENT OF THE CASE

Petitioner was charged in a two-count indictment filed
in the District Court for the District of Colorado with
having conspired (18 U.S.C. § 371) to violate 18 U.S.C.
§ 1001 by knowingly making or causing to be made a false
representation in an application to the Small Business
Administration for the guarantee of a bank loan to a
potato company, and with having committed the substan-
tive offense of making such a false statement. The trial
court entered a judgment of acquittal as to the substantive
count at the close of the government’s case, and Petitioner
was convicted by the jury on the conspiracy count. Upon
direct appeal pursuant to 28 U.S.C. § 1291, the Court of

Appeals for the ‘Tenth Cirenit affirmed the judgment of
the District Court.

The Court of Appeals interpreted the ‘trambhug and
prolix’’ indietment to charge Petitioner with conspiracy
to vielate IS ULS.C. § LOOT by the making of false repre
sentations in an application to the SBA in either of two
material faets, (a) the financial condition of the potato
company, or (b) the intended purposes of the loan, i. e., that
petitioner Was to reeeive a portion ef the proceeds. Ap.
pendix, at po AL Two unindiected co eonspirators were
also named in the inmhetment: Anthony Simeone, the

company owner, and Jacek Biges, an SBA loan otheer,

Testimony at trial showed that in August, 1970, Sim
cone and his aecountant went to Kramer's home te formu
late an appheation for an SBA loan guarantee in the
amount of STS0,000 to be lonned through Kramer's bank.
There was evidence that Kramer suggested that certain

assets and liabilities earried on the company books should
be left out of the application because they did uot direetly
relate to the potato business. ‘The accountant testified that
this was proper procedure, and he completed the actual
application, The government attempted to show at trial

RO

that the removal of these assets and liabilities disguised
the true value of the company and resulted in more faver.
able consideration of the application by the SBA than
would have oeeurred had the appheation contained these
items,

The accountant was not charged in the indictment, nor
was he named co-conspirator, The Court of Appeals found
that there was no evidence to suggest that Biges had any
knowledge or participation in the making of the applica.

tion, or that Petitioner had done anything with respect to
the making ef the appheation other than to suggest the
legitimate procedure of leaving out certain items that did
not relate to the potato business. Wale Simeone attended
the August meeting and signed the application, he testified
that he had relied upon the accountant for what was con
tained in the application, The Court of Appeals therefore
held that there was no evidence to suppert a finding that
two or more persons agreed to Knowingly make or cause
to be made false statements in the application concerning
the tinaneial condition of the company. Appendix, at pp.
A-S- ALM,

However, the Court of Appeals took a diferent view
With respeet to its alternative aspeet of the conspiracy
count, Le, the misrepresentation of the intended purposes
of the loan, ‘Thore was evidence that after the proceeds ot
the loan were disbursed, Sumeone sent a Sld,000 cheek to
Dant Slack, a potato dealer in Western Colorado and a
creditor of Simeone, Several days after receiving the
eheek, Slack obtained a $15,000 cashier’s cheek and sent
it by airplane to Sameone in Denver. Simeone cashed the
vheek and gave the $14,000 in one hundred dollar bills, to
Petitioner, The evidence showed that Petitioner deposited
$7,000 in eash in his personal account and also purchased
a $7,000 participation in the unsecured lo of the SBA
loan. This latter transaction was alse completed in exsh,
The Court of Appeals teld that these cireumstances, cou
pled with the fact that the SBA appheation stated that
the proceeds of the loun were for inventory eapital and
the purehase and maintenance of machinery and equip
ment (and made no mention of any participation by Pe
titiener), were suffierent to demonstrate an agreement to

Ma ree ee eee eo

Dicer eri Hii niin oe

6

misrepresent the intended purposes of the loan and to
divert the proceeds. Appendix, at pp. A-9 and A-10.

The Court of Appeals was very troubled, however, by
a government tactic at trial. The prosecutor was not con-
tent to rest on the above facts.' Slack testified, over vig-
orous objection, that Simeone told him that ‘‘he Si-
meone) said he had to give (Petitioner) $15,000 to get the
loan.*? (Record on Appeal, vol. II, pp. 150-151.) Simeone
was later called as a government witness, and though he
testified that Petitioner may have mentioned to him that
the loan might ‘‘cost something,’’ he was never asked
whether he had made the statement attributed to him by
Slack. (Record on Appeal, vol. II, pp. 248-249.) The
Court of Appeals recognized the danger of free applica-
tion of the co-conspirator hearsay rule, but it nonetheless
found that independent evidence of the conspiracy existed
so that the hearsay statement of Slack was properly ad-
mitted. Appendix, at pp. A-10, A-11. At the same time,
the court below stated that the tactic of the government
in failing to ask Simeone whether the hearsay statement
was true ‘‘betrays the truthfinding function of the prose-
cution, and we cannot condone it.’? The court still af-
firmed, for it could find no legal or ethical rule to con-
demn the tactic, and it did not consider the hearsay state-
ment to be so prejudicial that it required reversal mere-
ly on that basis. Appendix, at p. A-12.

|. Both parties focused at trial ard on appeal on the first prong
of the indictment as construed wy the Court of Appeals. The
prosecutor told the trial court that the money conveyed through
Slack was not the crux of the charge, but rather the August
meeting was the essence of the indictment. Record on Appeal,
Vol. Ill, pp. 280-281.

“~J]

REASONS FOR GRANTING THE WRIT

1. The decision below raises important questions
concerning the administration of justice in con-
spiracy prosecutions.

The tacties of the assistant U.S. attorney below, in
introducing the hearsay declaration of Simeone through
Slack, and then failing to inquire of Simeone whether he
had made such a statement, even though Simeone testi-
fied as a government witness, raise grave questions for
the administration of justice in the federal courts. If
such a tactic is allowed to go uncorrected, the scope of
evidentiary exceptions in conspiracy prosecutions will be
dangerously widened, and defendants’ rights to con-
frontation and to a fair trial will be seriously jeopardized.

This Court has previously restricted the admissibility
of hearsay declarations by a co-conspirator to those made
in the course of and in furtherance of the conspiracy.
Lutwak v. United States, 344 U.S. 604 (1953); Arule-
witch v. United States, 336 U.S. 440 (1949). Further-
more, this

‘limited scope of the hearsay exception in federal
conspiracy trials is a product, not of the Sixth
Amendment, but of the Court’s ‘disfavor’ of ‘at-
tempts to broaden the already pervasive and wide-
sweeping nets of conspiracy prosecutions.’ Grune-
wald v. United States, 353 U.S. 391, 404.°° Dutton
v. Evans, 400 U.S. 74, 82 (1970).

The hazard of loose applications of the rules of evi-
dence, as warned against by Justice Jackson in Arule-
witch v. United States, supra, at 453, is not lessened by
the order of proof that often takes place in conspiracy

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trials, where hearsay declarations, properly admitted only
upon an independent demonstration of the existence of
the agreement, often bootstrap the proof of the conspiracy
itself, for trial courts are permitted discretion as to the
order of proof’

2. While the trial judge must make a preliminary determination
that there is substantial, independent evidence of the agreement,
at least enough to establish a prima facie case, United States v.
Vaught, 485 F. 2d 320, 323 (CA 4 1973); United States v. San-
tos, 385 F. 2d 43, 45 (CA 7 1967), cert. denied, 390 U. S. 954
(1968); United States v. Morton, 483 F. 2d 573, 576 (CA 8
1973); United States v. Spanos, 462 F. 2d 1012, 1014 (CA 9
1972): Carbo v. United States, 314 F. 2d 718, 737 (CA 9 1963),
cert. denied 377 U.S. 953 (1964), the order of proof is left up
to the trial court. The dangers of the order of proof problem
have been pointed out by Justice Jackson in Krulewitch v.
United States, supra, at 453:

(A) conspiracy often is proved by evidence that is ad-
missible only upon assumption that conspiracy existed.”

See also Davenport, The Confrontation Clause and the Co-
Conspirator Exception in Criminal Prosecutions: A Functional
Analysis, 85 Harv. L. Rev. 1378, 1389 (1972) (hereinafter re-
ferred to as ''Davenport’’).

The dangers of this problem are present in this case. The
trial court admitted Slack’s hearsay account of Simeone's al-
leged statement that he had to give fifteen thousand dollars
to Petitioner because the court felt that the agreement had been
proved by the August, 1970 meeting at Petitioner's home. (Rec-
ord on Appeal, vol. Il, pp. 147-148.) Yet the Court of Appeals
found that all Petitioner had done at the August meeting was
to suggest the entirely proper procedure that certain items
that did not directly relate to the potato business be removed
from the SBA application. Appendix, at p. A-8. While the
Court of poet did find sufficient evidence to establish a
conspiracy. it did so because of evidence that Petitioner had
told Simeone that the loan might ‘cost something," and be-
cause Petitioner was given fifteen thousand dollars by Simeone.
However this testimony did not occur until Simeone himself had

(Continued on next page)

The tactics below raise more than mere problems of
the relaxation of the hearsay exception in conspiracy
trials. Rather, the purposes of the Confrontation Clause
would also appear to be threatened:

‘The decisions of this Court make it clear that the
mission of the Confrontation Clause is to advance a
practical concern for the accuracy of the truth-deter-
mining process in criminal trials by assuring that
‘the trier of fact (has) a satisfactory basis for eval-
uating the truth of the prior statement.’ California
v. Green, 399 U.S., at 161." Dutton v. Evans, supra,
at 89.

Indeed, the basis of our system of justice is the full
development of all relevant facts:

‘“We have elected to employ an adversary system of
criminal justice in which the parties contest all issues

(Continued from previous page)

testified, several witnesses after Slack had testified, Slack did
establish that Simeone had sent him a check for fifteen thousand
dollars and that he returned the fifteen thousand, via a cashier's
check, to Simeone. The only evidence to establish an agree-
ment at the time Slack testified was the August meeting. Under
these circumstances, it is difficult to see how anything but the
following occurred:

"There is a distinct possibility that the independent evidence
and the conditionally admitted hearsay will bootstrap each
other into legitimacy in the eyes of the jury, the hearsay
lending credence to otherwise insufficient independent evi-
dence, with the independent evidence then turning around
and legitimizing the use of the hearsay.’ Davenport, supra,
85 Harv. L. Rev., at 1389.

Here, of course, this problem was compounded because the
hearsay declaration was not even conditionally admitted. I+ was
simply allowed to sit in the minds of the jurors and poison any
possibility of an objective determination of whether the crime
charged was in fact proved.

gts alin at lie Fah

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10

before a court of law. The need to develop all rele-
vant facts in the adversary system is both funda-
mental and comprehensive. The ends of criminal jus-
tice would be defeated if judgments were to be found-
ed on a partial or speculative presentation of the
facts. The very integrity of the judicial system and
public confidence in the system depend on full disclos-
ure of all the facts, within the framework of the rules

of evidence.”? United States v. Nixon, 418 U.S. 683,

709 (1974).

The two most recent interpretations of the Confron-
tation Clause by this Court are in California v. Green, 399
U.S. 149 (1970); and Dutton v. Evans, supra. In both
eases this Court held that there was no violation of the
Confrontation Clause, but those cases did not present the
factual situation of the instant case.

California v. Green, supra, involved a statute which
permitted the introduction of previous testimony without
violation of the hearsay rule. This Court there stated
that the Confrontation Clause is not congruent with the
hearsay rule, 399 U.S., at 155-156, and it was held that
the previous testimony there in question, which had oc-
curred at a preliminary hearing, where the witness was
under oath and cross-examination took place, was suffi-
ciently reliable for constitutional purposes so as to allow
its admission into evidence when the witness, who was
present at trial, acknowledged that he had testified at
the preliminary hearing and was subject to cross-examina-
tion at the trial. Unlike that situation, however, the de-
clarant below was never asked whether he had made the
statement to Slack. Under these circumstances, the ad-
mission of the hearsay statement was virtually tanta-
mount to those eases in which the declarant is absent.

11

See, e.g., California v. Green, supra, at 161. Nor was
Simeone under oath or subject to cross-examination at
the time he allegedly made the statement to Slack. Final-
. ly, unlike the situation in Green, the prosecution did not
ake ‘‘every effort to introduce its evidence through the
live testimony of the witness” Simeone. 399 U.S., at 167.

In Dutton v. Evans, supra, also a state prosecution,
the hearsay statement of a non-appearing co-conspirator
was admitted at Evans’ trial. This Court held that the
hearsay statement was admitted under circumstances that
did not violate the Confrontation Clause because the state-
ment carried no express assertion of past fact, thus affeet-
ing its weight, and its content was abundantly established by
other testimony at the trial, including that of another co-
participant, who testified under immunity on behalf of the
state. 400 U. S. at 89. The hearsay statement was thus,
in the opinion of the plurality, neither ‘‘erucial’’ nor
**devastating.” Id. at 87. Here, these indicia of reliabil-
ity are abundantly lacking, particularly since the alleged
declarant, Simeone, was present and testified as a govern-
ment witness. It was the government’s burden to produce
this evidence, id. at 102 n. 4 (Marshall, J., dissenting),
yet the prosecutor chose not to do so. Furthermore, the
evidence was both ‘‘erucial’’ and ‘‘devastating.’? It was
the crucial piece of evidence to establish the offense,
namely the diversion of the loan proceeds) Had Simeone
been questioned about the statement, then he could have
been tested as to whether he in fact made it, what he
meant by it, and whether it was true. The jury could
then have evalvated these and other matters in light of
Simeone’s demeanor, and the truth-finding process would
have been markedly aided.

Both California v. Green, supra; and Dutton v. Ev-
ans, supra, Were decisions under the Confrontation Clause.
This Court is free in this case to go beyond those de-
cisions, if it wishes, and impose higher standards in fed-
eral trials under its supervisory powers in order to insure
that trials are more fair and fully serve the truth-deter-
mining process.

It has been suggested that the reliability and pro-
bativeness of co-conspirator hearsay statements would be
increased if the present rule were to be modified. See
Davenport, supra, 85 Harv. L. Rev. at 1391-1407. In
order to guard against the situation in the instant case,
a declaration ostensibly against the declarant’s penal in-
terest or ostensibly an act of the conspiracy should be
inadmissible to the extent it implicates someone other
than the declarant in the criminal enterprise. Such a
statement is lacking in indicia of reliability, for it could
have been made to impress or brag, or could have been
deliberately false. Davenport, supra, at 1396-1397, 1400-
1401. The only way to insure the reliability of the state-
ment is to question the declarant—which could have been
very easily done here, since he was a government witness.

It is therefore submitted that in order to facilitate
the search for truth and to afford defendants in similar
situations their rights to confrontation and fundamental
fairness, this Court should adopt a standard requiring
that an available co-conspirator be the only souree for
the introduction of hearsay statements. Otherwise, as
here, the prosecutio? will be permitted to broaden the
already dangerous hearsay exception in conspiracy cases,
and the truth-determining process will be undermined.

—V
26
—_

Because of the importance of this question to the admin-
istration of justice, and because of the likelihood of this
problem recurring in other cases, this Court should grant
the writ to review the judgment below.

2. The decision below raises important questions
concerning the conduct of U. S. attorneys and
defendants’ rights to a fair trial.

This Court long ago held that due process prohibits
the prosecution from taking any action that offends ‘‘fun-
damental conceptions of justice.”’ Mooney v. Holohan,
294 U.S. 103, 112 (1935). Accord, United States v. Ash.
413 U.S. 300, 320 (1973). This Court also many years
ago stated the ethical responsibilities of a federal prose-
cutor:

“The United States Attorney is the representative
not of an ordinary party to a controversy, but of a
sovereignity whose obligation to govern impartially
is as compelling as its obligation to govern at all:
and whose interest, therefore, in a criminal prosecu-
tion is not that it shall win a case, but that justice
shall be done. As such, he is in a peculiar and very
definite sense the servant of the law, the twofold
aim of which is that guilt shall not escape or inno-
cence suffer. He may proseente with earnestness and
vigor—indeed, he should do so. But, while he may
strike hard blows, he is not at liberty to strike fou!
ones. It is as much his duty to refrain from im-
proper methods calculated to produce a wrongful
conviction as it is to use every legitimate means to
bring about a just one."’ Berger v. United States.
295 U.S. 78, 88 (1935).

The conduct of the Assistant U. S. Attorney below
did not fulfill these requirements, and the effects of his

14

failure to ask Simeone, the declarant of the hearsay state-
ment admitted through Slack, about the statement de-
prived Petitioner of his right to a fair trial.

It can be inferred from the failure of the prosecutor
to ask Simeone about the statement that his response
would not have been favorable to the government’s case.

‘‘(A) party’s failure to utilize a witness ‘peculiarly
within his power to produce * * * whose testimony
would elucidate the transaction’ permits an inferrence
that the testimony would have been unfavorable.”’
Wynn v. United States, 130 U. S. App. D. C. 60, 397
F. 2d 621, 625 (1967).

The inference is based not upon mere non-production
or non-utilization of a witness, but rather upon ‘‘non-
production when it would be natural for (a party) to
produce the witness if the facts known by him had been
favorable.’’ 2 J. Wigmore, Evidence, § 286 (3d ed. 1940).
Accord, United States v. Malizia, 503 F. 2d 578, 581 (CA
2» 1974); cert. denied, 420 U. S. 912 (1975).

The inference is applicable here, for Simeone was a
government witness. It is therefore fair to infer that
Simeone could not have substantiated the statement that
the money was for Petitioner in order to get the loan.
This means that the conduct of the prosecutor was more
than a ‘‘betray(al) (of) the truth finding function of the
prosecution.” Appendix, at p. A-12. Rather, it was a
successful attempt to introduce improper evidence—a vio-
lation of the A. B. A. Standards for Criminal Justice Re-
lating to the Prosecution Function §5.6(b). In analogous
cireumstanees, other Courts of Appeals have found viola-

—=> ome

lo

tions of the standards of Berger v. United States, supra.
See United States v. Gullo, 502 F. 2d 759 (CA 3 1974),
where the government attorney improperly asked a wit-
ness whether he was aware that a co-defendant had
pleaded guilty. When objection was made, the prosecutor
promised to bring the co-defendant in as a witness. The
trial court then gave a sua sponte instruction to the jury
that. the plea was not evidence of guilt of the other de-
fendants. The defense then reluctantly called the co-
defendant as a witness, and he repudiated, in an uncon-
vincing manner, his guilty plea. While the Court believed
the representation of the prosecutor that he did not know
the question was improper, the Court still found a viola-
tion of the Berger standard. I/d. at 762-763. See also
United States v. Harrell, 436 F. 2d 606, 614-615 (CA 5
1970) (evidence of guilty plea by co-conspirator) ; United
States v. Calvert, 498 F. 2d 409 (CA 6 1974) (evidence
of prior criminal record of defendant when he did not
testify and did not put his character in issue); United
States v. Perry, 512 F. 2d 805, 806-807 (CA 6 1975) (at-
tempting to prove misconduct on other occasions when
not probative of particular offense and when defendant’s
character not in issue); United States v. Grey, 422 F. 2d
1043 (CA 6 1970) (injection of racial issue into bank
robbery case).

In all the above circumstances the courts found the
Berger standards to be violated. See also the commentary
to the A. B. A. Standards, the Prosecution Function, § 1.1,
at p. 44.

The hearsay statement involved here was crucial to
the outcome of the case. The other evidence was hardly

overwhelming,’ rather, this was a close case, so. the
admission of the statement cannot be considered harmless
error, Ct, United States v, Socony-Vacuum Oil Co,, 310
U.S. 150, 289-240 (1940); United States v. Bowen, 500
I’. 2d 41, 42 (CA 6 1974); cert. denied, 419 U.S. 1008
(1974). The jury was not given a cautionary instruction,
nor Was the statement conditionally admitted. Under these
circumstances, it is clear that Petitioner was denied his
right to a fundamentally fair trial. In order to insure the
fairness of federal trials, this Court should grant. the
writ to review the Judgment below, else other courts will
be left with violations without remedies.

CONCLUSION

For these reasons, a writ of certiorari: should issue to
review the judgment and opinion of the Tenth Cireuit.

Respectfully submitted,

Lours M. Fiscuer

1115 Grant Street

Denver, Colorado 80203
Max A, Wuinson

Suite 100, 1860 Lineoln St.
Denver, Colorado 802038
Counsel for Petitioner

October, L75

A-l

APPENDIX
Opinion and Judgment of Court of Appeals

United States Court of Appeals, Tenth Cireuit
No, 74-1108
Kiled January 6, 1975

United States of America,
Plaintiff-A ppellee,
Vs.
marl LL. Kramer,

Defendant-A ppellant.

Appeal from the United States Distriet Court
for the District of Colorado
(D.C. No, 78-CR-288)

John W. Madden III, Special Assistant United States
Attorney, Denver, Colorado (James L, Treece, United
States Attorney, on the brief), for Plaintiff-Appellee,

Lawrence M, Henry, Denver, Colorado, for Defendant-
Appellant.

Before Murran, Seri, and Bannerr, Cireuit Judges.

Murran, Cirenit Judge,

A-2

Upon a trial to a jury appellant Kramer was convicted
and sentenced on a charge of conspiracy (18 U.S.C,
‘ 371) to violate 18 U.S.C. § 1001! by knowingly making
or causing to be made false, fieticious and fraudulent
representations in an application to the Small Business
Administration for the guaranty of a bank loan to the
Simeone Brothers Potato Company, Inc. As we read the
rambling and prolix indictment, it alleges the making of
false representations in the application as to material
facts, to wit, (1) the financial condition of the Potato
Company and (2) the intended purposes of the loan, It
charges that these false representations caused the SBA
to consider more favorably the guaranty of 90% of a
$180,000 loan to the Potato Company by the First Nation-
al Bank of Fleming, Colorado, of which Kramer was
president; that, as part of the conspiracy, Kramer would
receive $15,000 of the loan proceeds; and that his personal
interest in these proceeds would be concealed from the
SBA. Twenty-two overt acts are alleged in furtherance

of the conspiracy between Kramer and two unindieted co-

een 2 ee ee

|. The statute in full reads: “Whoever, in any matter within the
jurisdiction of any department or agency of the United States
knowingly and willfully falsifies, conceals or covers up by any
trick, scheme, or device a material fact, or makes any false,
fictitious or fraudulent statements or representations, or makes
or uses any false writing or document knowing the same to con-
tain any false, fictitious or fraudulent statement or entry, shall
be fined not more than $10,000 or imprisoned not more than
five years, or both.”

A-3

conspirators, company owner Anthony Simeone and SBA
loan officer Jack L. Biggs.’

The Court’s instructions were not brought forward
on this record, and we shall proceed on the premise that
they correctly stated the law of the case. Sutfice it to
say, for our purposes, that it was incumbent upon the
government to prove to the satisfaction of the jury beyond
a reasonable doubt that Kramer, Simeone, and Biggs
formed an agreement, however clandestine or informal,
to violate 18 U.S.C. § 1001 by the making of false repre-
sentations in an application to the SBA concerning a
material fact—i.e., either (1) the financial condition of
the Potato Company or (2) the intended purposes of the
loan;> and that someone committed an overt act in further-
ance of this object. Kramer argues that the evidence was
insufficient as a matter of law to support the finding of
his guilt, especially in view of the erroneous admission
of hearsay evidence,

2. The second count of the indictment charged Kramer with the
substantive violation 18 U.S.C. § 1001 by the same false rep-
resentations in the application pertaining to the Potato Com-
pany's financial condition. The court directed a verdict on this
count holding in effect that the evidence was insufficient to
take the case to the jury on the substantive offense but suffi-
cient on the conspiracy offense.

3. 18 U.S.C, § 1001 embraces in the disjunctive the separate
offenses conjunctively charged in the indictment as one offense
so that proof of a conspiracy to make a false representation in
the application as to either the financial condition of the Potato
Company or the intended purposes of the loan will warrant a
conviction on this indictment. Turner v. United States, 396 U.S.
398, 420 (1970); United States v. Dinneen, 463 F. 2d 1036
(10th Cir, 1972); Troutman v. United States, 100 F. 2d 628
(10th Cir. 1938).

We are mindful that the government’s case has sur-
vived motions to dismiss and for directed verdict for the
insufficiency of the evidenee by the rulings of an able
and experienced trial judge. In this posture, we should
not disturb the verdict unless convinced that the evidence,
considered in its most favorable light, is wholly insuffi-
cient to take the case to the jury. See United States v.
Kramer, No, 73-1925 (10th Cir. August 20, 1974).

This brings us to an analysis of the facts of record.
In essential outline, the proof was to the effect that the
Simeone brothers owned a number of closely knit incorpo-
rated businesses, one of which was a wholesale potato
company. Apparently, the Simeones interchanged assets
and liabilities between these corporate businesses as best
suited their personal and business convenience,

Faced with a financial crisis in early 1970, the Simeones
turned to their long-time friend and banker, Kramer.
On several occasions, Kramer and the Simeones discussed
the financial condition of the Company. Kramer indicated
that he knew someone at the SBA and might be able to
arrange an SBA loan guaranty. At some time during the
discussions and negotiations Kramer told Simeone that
the loan might ‘‘cost something.’’ As a result of these
discussions, Anthony Simeone and Walter Meisel, the
Company's long-time accountant, traveled to Kramer's
home with pertinent Company records in August, 1970.
There, the three of them discussed the Company’s finane-
ial affairs and roughed out an application for an SBA
vuaranty on a $180,000 loan to be made by Kramer's
bank. In the course of this three hour conference, they
discussed certain assets and liabilities on the Company

Pa eS ee

re A-D

hooks which were not directly related to the wholesale
potato operation. Kramer suggested that if these assets
and liabilities were shown on the application, the Potato
Company would not have a ‘‘good chance to get the loan’’
and that they should ‘‘come out.’? Meisel, who assumed
the responsibility for preparing the application, then pen-
cilled an abbreviated notation of the assets and liabilities
that were to come out.

In the office preparation of the application and under
%(¢e), entitled *‘Surplus Analysis or Net Worth Reeoncili-
ation,’’ in the column for ‘*Withdrawals,’? Meisel entered
the words **Net Assets’? and the amount of $57,287 in
parentheses (apparently indicating deduction from total
net worth). On trial, he explained in some detail that
this sum of $57,287 was arrived at by deducting the liabil-
ities ‘left off’? from the assets ‘‘left off,’? as shown on
the business records of the Potato Company. These were
the items which were discussed at the conference and
which Kramer had suggested should come out. NG

A-7

check cleared the Potato Company account when the only
funds available in the account were the SBA loan pro-
ceeds. On December 28, Slack purchased a $15,000 eash-
ier’s check and on the same date sent it by airplane to
Simeone in Denver. Simeone and Kramer went to the
airport, picked up the check, and Simeone cashed it the
same day, receiving $15,000 in $100 bills, all of which
Simeone gave to Kramer. On December 29, Kramer de-
posited $7,000 in currency in his personal savings account
at a Sterling, Colorado, bank; and on December 30, he
purchased a $7,000 participation in the unguaranteed 10%
of the SBA loan in a cash transaction using all $100 bills.
Cross examination developed the fact that Simeone had
been a participator with Kramer in the unguaranteed por-
tion of two other loans; that Simeone had ‘‘given Mr.
Kramer a lot of money over the years and that he [Kram-
er] put it where he thought best’’; and that he expected
a return of the money from Kramer.

From all the evidence, Kramer argues that the govern-
ment failed to make a case. He maintains that his only
participation in the preparation of the application was to
diseuss certain unrelated items (assets and liabilities) and
to recommend that they be left out of the application:
that this recommendation had the purpose and effect of
rausing the application to speak the truth and was in
nowise false. He points to the fact that the application
was made by the experienced C. P. A. Meisel who testified
that it accurately represents the financial records of the
Potato Company. He challenges the record for evidence
to justify the inferenee that he agreed with anyone to
make false representations as to any material fact in the
application,

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A-12

evidence that the payment of loan proceeds was to be

Kramer in return for his
assistanee in obtaining the loan.

made and was in fact made to
And this evidence was
produced at trial before the admission of the hearsay evi-
dence bearing on the same issue. Under these cireum-
stances, Slack’s hearsay testimony comes within the nar-
row bounds of the exception to the hearsay rule.

The failure of the government to inquire of Simeone
concerning the truth of the hearsay statement ean be jus-
tified only in terms of trial strategy, a matter within the
competence of counsel and not revealed on this reeord.
Such a tactic betrays the truth-finding function of the
prosecution, and we cannot condone it. But we know of
no legal or ethieal rule to condemn it. And we cannot say
that it was so prejudicial as to require reversal on that
ground alone.

We conclude that the evidence was sufficient to justify
the inference that Kramer and Simeone conspired to vio-
late 18 U.S.C. § 1001 by falsely representing in the SBA
application the purposes for which the loan guaranty was
to be made. The hearsay evidence which was admitted
to support the prosecution’s case comes within the narrow
exception for co-conspirator’s declarations. In these cir-
cumstances, We cannot say that the trial court was clearly
wrong in submitting the case to the jury, and we will not
disturb the verdict.

The judgment is affirmed.

A-13

Order Denying Petition for Rehearing
SEPTEMBER TERM—OCTOBER 2, 1975

Before The Honorable Alfred P. Murrah, Senior Judge,
The Honorable Oliver Seth and The Honorable
James EK. Barrett, Cireuit Judges

No. 74-1108

UNITED STATES OF AMERICA,
Plaintiff-Appellee,
Vs.
KARL L. KRAMER,
Defendant-A ppellant.

This matter comes on for consideration of the appel-
lee’s motion to supplement the record and request that
the Court amend its opinion, as well as the appellant’s
petition for rehearing.

Upon consideration whereof, it is ordered that the
appellee’s motion and request are denied. It is also
ordered that the petition for rehearing is denied.

HOWARD K. PHILLIPS, Clerk

By: /s/ Robert L. Hoecker
Chief Deputy Clerk
SEAL

By /s/ Mary A. Sherman, Deputy Clerk

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_1799%3A1. Public record. Not legal advice.