UNITED STATES OF AMERICA, Plaintiff-Appellee, Cross-Appellant, versus WILLIAM MICHAEL ADKINSON, ANN POWELL MINKS, f.k.a. Ann Powell, et al., Defendants-Appellants, Cross-Appellees. UNITED STATES OF AMERICA, Plaintiff-Appellee, versus RONALD D. PEEK, ANN POWELL MINKS, et al., Defendants-Appellants.
No. 92-2872
IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
February 23, 1998
PUBLISH; D. C. Docket No. 91-03052-RV; No. 95-2061; Appeals from the United States District Court for the Northern District of Florida
*Honorable John R. Gibson, Senior U.S. Circuit Judge for the Eighth Circuit, sitting by designation.
HILL, Senior Circuit Judge:
Defendants appeal from the denial of their motion for a new trial and from their convictions and sentences upon multiple counts of conspiracy, bank, mail and wire fraud, interstate transportation of stolen property and money laundering. The government appeals the district court‘s determination that the sentencing guidelines do not apply to these defendants. For the following reasons, all convictions and sentences WILL BE REVERSED AND VACATED.1
I.
Confronted with a situation similar to the one presented here, a judge wisely wrote:
Although there is ample ground for argument that the Supreme court has doubts about Lau‘s continued vitality, a requiem may be premature and, in any event, should not be sung by this choir.
Had this admonition been taken to heart at the outset of this case, a most troublesome path would have been avoided.
II. Background
This case began as a basic bank fraud case arising out of alleged false statements and misrepresentations made to procure loans for a land development project and that large amounts of loan proceeds were allegedly diverted for personal use. Somewhere along the line, the case mutated into a broad conspiracy against the government involving wire, mail, and tax fraud, interstate transportation of
William Adkinson, a Houston real estate developer, had expanded a modest business of acquiring and renovating foreclosed homes into a complex series of interlocking corporate entities under the umbrella of The Development Group, Inc. (DGI). Adkinson named Ronald Peek president of DGI. During this time, Adkinson met Keith Cox, a London solicitor. Cox represented a group of Kuwatis who invested internationally through a multi-billion dollar company called Compendium Trust. After several successful business ventures with Cox, Adkinson began to engage in large, complex real estate transactions.
Adkinson employed Robert Alligood, then president of the engineering firm of Reynolds, Smith & Hills (RS&H), to help Peek and him negotiate the purchase from St. Joe. Alligood had a relationship with the principals of St. Joe that Adkinson hoped would help in the negotiations. In addition, RS&H performed engineering studies on the feasibility of developing the property. Alligood and RS&H were to receive a broker‘s commission of $3 million through its real estate subsidiary, Plantec Realty Corp.
A contract was ultimately negotiated, providing for $50 million in cash for approximately 780 acres, a tax-free property exchange of 18,000 interior acres, and an additional 2,000+ acres purchased on a seller-financed note and mortgage for $132 million. The contract provided for the immediate release of portions of the beach front and a staged release of the other land as mortgage payments were made.
On October 3, 1985, the contract was entered into by St. Joe and Panhandle Coast Investors, Inc. (Panhandle), a Florida corporation, formed at the request of
The contract required a deposit of $2.1 million in earnest money with Imperial Title Company, a title company owned by Collins and Ann Powell Minks. Adkinson sent two DGI checks to Minks, totaling $2.1 million, to establish the escrow account. On October 7, 1985, Minks communicated to St. Joe receipt of the deposit. On October 9, 1985, Panhandle assigned its interest in the land purchase contract to DGI. Funding for the land purchase was originally to be provided by a bank with which Adkinson had done business over several years. That bank, however, backed out. In order to cover the DGI checks, Adkinson moved the escrow account to West Belt National Bank (Bank) and that bank honored the checks based upon an agreement by Sandsend Financial Consultants, Ltd. (Sandsend), the lending arm of Cox’ Compendium Trust, to fund the escrow from a certificate of deposit. The Bank confirmed that the total escrow was on deposit as of March 12, 1986, and Minks and Collins communicated this fact to St. Joe.4
In April of 1986, Adkinson secured a purchase money loan from Hill Financial Savings Association (Hill) of Red Hill, Pennsylvania. As structured by Hill, the loan would be to a joint venture comprising a DGI subsidiary, FSD Group, Inc. (FSD), and a subsidiary of Hill. The joint venture would be called Emerald Coast Joint Venture (Emerald Coast), which would take the property in its name and execute the loan document. Ronald D. Peek, president of DGI, was also president of FSD.5
Subsequently, Hill became concerned that the loan might be considered an investment, which by law it was not permitted to make. Hill retained the accounting firm of KPMG Peat Marwick to perform an accounting investigation of the loan, which included a close examination of the borrower, DGI, and its principal, Adkinson. Richard Sundheim, of Main Hurdman now Peat Marwick, performed the audit.
Consequently, as one of the conditions of the loan, Hill required Emerald Coast to pre-sell approximately 130 acres of the property. In order to satisfy this
Adkinson and Cox chose Crossview Development Company, owned by a Kuwati investor, a client of Cox, as one of the entities. Two others were former DGI subsidiaries, First Western Equity, Inc. and Development Mortgage Group, Inc. (DMG), which were in the process of being sold off to their respective presidents, Barney Van Huss and Gilbert G. Dufilho. Both Van Huss and Dufilho agreed on behalf of their respective companies to participate in the transactions. The fourth company, suggested by Corson, was Ferguson/C & D, Inc., owned by Robert Ferguson.
On May 26, 1986, a new brokerage agreement was executed between Adkinson and Plantec in which Plantec and Koshkin would share one-third and two-thirds, respectively, in a 5% or $9.1 million brokerage commission. The agreement was backdated to August, 13, 1985, by Plantec‘s president.
On June 1, 1986, Cox and Adkinson entered into an agreement that Sandsend would lend DGI $30 million to be used to purchase the contract rights to approximately 268 acres of the Walton County land purchase from Panhandle. In
On June 2, 1986, the four loans from Vision Banc to the above-named entities were closed in Houston. Adkinson‘s lawyers, Robert Collins and Daniel Kistler, were present. A newly formed Florida corporation, Walton County Investors, Inc. (Walton) acted as the initial purchaser of the 130 acres from St. Joe. It then sold off tracts of the 130 acres to the four entities for an aggregate price of $48 million, of which $20.4 million was provided by Vision Banc.
On June 3 through June 5, 1986, the Hill loan transaction closed in Jacksonville, Florida. At closing, however, Hill demanded material changes in the structure of the loan transaction. Hill required Adkinson to purchase certain real estate owned by Hill, cede a greater equity share (75%) of the Florida purchase to it, and transfer to Hill 7,300 acres of the most valuable property as a loan fee. Adkinson objected, but chose to close.
The land was conveyed by four separate deeds. Crossview took 260 acres directly; a second deed went to Emerald Coast; a third to Hill for the 7,300 acres it had demanded at the last minute; and the fourth deed was to Walton for the 130
After closing, Adkinson sued Hill, claiming usury and bad faith relating to its eleventh-hour modifications to the loan agreement. The suit was settled; Hill agreed to convey to the joint venture the 7,300 acres it had taken as a fee and to make an additional $12 million loan.
Some time later, Sandsend acquired all of Adkinson‘s DGI stock in a foreclosure. Sandsend continued to develop and market the property, including an effort to sell portions to the State of Florida. Political contributions were made to
Ultimately, the sale to the State was not successful, and mortgage payments were not made in a timely fashion. St. Joe sued for foreclosure, and settled for the return of 2,000 acres. Vision Banc released any remaining liability in exchange for transfer of the mortgaged property. Adkinson declared personal bankruptcy.
III. Indictment and Pre-Trial Proceedings
On September 27, 1991, a grand jury empaneled by the United States District Court for the Northern District of Florida, Pensacola Division, returned a 115-page, fifteen count indictment against fourteen defendants. Count I of the Indictment alleged a conspiracy to commit an offense against the United States in violation of
Defendants moved to dismiss Count I pointing out that four of the five conspiratorial objectives alleged in Count I did not state an offense. The then-controlling law of this circuit required the United States to be the victim of a
Several defendants also moved for severance, arguing that dismissal of the improper bank fraud conspiracy from Count I would require their severance since their joinder was predicated upon allegations of a broad bank fraud conspiracy. These defendants argued that the tax fraud which would remain the sole object of
At the hearing on the motion, the government admitted that the bank fraud conspiracy alleged in Count I did not, under Hope I and Hope II, state a violation of
The government pointed out that, in July of 1991, a panel of this court, following Hope I and Hope II, had reversed convictions under
Your Honor,... may I suggest one other alternative, the bold, high level, high risk approach, and that is to simply leave the indictment as is and if Hope is sustained let them take it up on appeal and have it reversed. (emphasis added)
The court noted this invitation to error:
[I]f we treat [the motion to dismiss] as not having been granted and the evidence is admitted as if all those other purposes were part of the conspiracy and then the Eleventh Circuit decides that Hope is still the law, I think we‘ve got an almost virtual certainty for a mistrial. (emphasis added)
In its written order the next day, the court elected not to dismiss the bank fraud conspiracy.11 On the government‘s assurance that Falcone would legitimize
IV. The Trial
The trial lasted five months; 115 witnesses generated more than 85 volumes and 17,500 pages of transcript; 1,447 exhibits were admitted. Although the court had indicated that the government should refrain from mentioning objects 2-5 in its opening statement, the court itself during voir dire told the jury:
The indictment charges that the defendants conspired among themselves and with others to violate the law in a number of respects. . . it includes an allegation to defraud these lending institutions and to impede the Internal Revenue Service. . .
Over the next five months, defendants objected to a mass of evidence on the grounds that it was, under Hope I and Hope II, irrelevant, and certainly would be irrelevant if the court ultimately dismissed the bank fraud conspiracy from Count
The “high risk” strategy did not pay off.13 The requiem for Hope I and Hope II remained unsung by the Eleventh Circuit choir and the en banc decision in Falcone did not issue by the time the government rested its case. The defendants, of course, renewed their objections to being tried for “non-crimes.”
At this point the district court was in exactly the position it had predicted it would be in if the en banc Falcone decision had issued “and . . . the Eleventh Circuit decides that Hope is still the law, . . . an almost virtual certainty for a mistrial.” Defendants did move for the mistrial the court had predicted, arguing that the nature of the Indictment and trial had changed midstream. Even though the court had forecast a mistrial under these circumstances, it denied the motion.
There was also a highly unusual in camera proceeding involving another important government witness. One of the major allegations regarding the bank fraud was that these defendants conspired to avoid the restrictions on loans to “one borrower” by arranging for some of the Vision Banc loans to go to companies controlled by Adkinson, but with “sham” owners. There being no competent
After five months of trial, nine defendants were convicted on various counts.19 Several defendants moved for a new trial, alleging juror misconduct in
discussing the defendants’ alleged threats to witnesses. They also argued that the in camera proceeding which resulted in the government‘s witness being allowed to carry a gun, which they only learned about after trial, was Brady and Jencks material.20 They asserted prosecutorial misconduct in that the government knew or should have known of the perjury by Sundheim and Van Huss (and other) witnesses. The denial of this motion is appealed.21
Defendants raise some seventeen issues on direct appeal. First and foremost, they challenge the fundamental fairness of their trial. They assert the failure to dismiss the bank fraud conspiracy from Count I before trial was error and led to the erroneous admission of extensive evidence which confused and misled the jury. IX, mail fraud. Collins was convicted of money laundering as charged in Count XIII. The remaining counts were either dismissed or no convictions were obtained. Count VII was dismissed upon motion of the government. No one was convicted on Counts IV, V, X, XI, XIV, and XV.
V. Count I
Defendants assert that the district court‘s refusal to dismiss the allegations of a bank fraud conspiracy from Count I before trial was reversible error. We need not decide this issue,23 however, because the initial inclusion of these allegations,
coupled with their subsequent dismissal after the government‘s case created a
The allegations of a conspiracy to defraud the banks were insufficient to sustain a conviction under
[I]f we treat [the motion to dismiss] as not having been granted and the evidence is admitted as if all those other purposes were part of the conspiracy and . . . Hope is still the law, I think we‘ve got an almost virtual certainty for a mistrial.
We agree. Mountains of details relevant only tangentially, if at all, to the ultimately charged scheme to defraud the IRS certainly must have confused the jury. Furthermore, under the circumstances of this case, this evidence obviously invited the jury to convict for conduct not, ultimately, even alleged to be a crime.27 The defendants’ objections to this evidence were overruled upon the government‘s “inextricably intertwined” theory. Before the dismissal of the improper objectives, however, it was impossible to rule correctly since no one knew with what charges the evidence was “intertwined.” After the deletion of objectives 2-5, it was clear that much of the evidence was not “intertwined” since the bank fraud conspiracy had been dismissed.28
Then, after all this evidence was in the record, the government conceded, as, of course, it had known all along, that the allegations of a bank fraud conspiracy did not violate
A most damaging prejudice was to the ability of these defendants to mount a coherent defense. Defendants were forced to defend themselves against charges which were not offenses under the prevailing law. They made decisions about cross-examination, whether to testify and to object, and how to explain the case to the jury without knowing what the ultimate charges would be. Defendants asked the court for a ruling on whether they had to defend against charges that they actively conspired to defraud institutions other than the federal government, and the court answered “maybe.” The court continued to give this answer for the next four months during the government‘s case. Only at the end of the government‘s case, with all of its evidence in, did the court grant the motion to dismiss the improper conspiracy from the Indictment. Nothing that had occurred during the trial affected this ruling; the outcome was the same as it would have been had it been made before trial. The only difference was that it was only at this point that these defendants knew the charges against them.30
The “inability of a defendant adequately to prepare his case skews the fairness of the entire system.” Doggett v. United States, 505 U.S. 647, 654 (1992) (quoting Barker v. Wingo, 407 U.S. 514, 532 (1972)). “An indictment must sufficiently warn the defendant of the charges against him so that he may adequately prepare his defense.” United States v. Alford, 516 F.2d 941, 945 (5th Cir. 1975). In this case, the defense was put in the position of both defending against, and not defending against, the central conspiracy charges -- precisely what the right to indictment was meant to prevent. Id. Like an indictment which fails to allege an essential element, the district court‘s failure to rule on the motion to dismiss the improper objectives from Count I forced the defendants to go to trial with the chief issue undefined. After a trial which had as its centerpiece allegations that the defendants conspired to defraud Hill and Vision Banc, the district court decided that was not what the trial had been about after all. After the trial, the court determined that the only conspiracy upon which convictions lawfully could have been based all long was the tax conspiracy.
Ill-defined charges leave “the prosecution free to roam at large -- to shift its theory of criminality so as to take advantage of each passing vicissitude of the trial and appeal.” See Russell v. United States, 369 U.S. 749, 768 (1962). For example, the government was permitted to put in extensive evidence regarding the subsequent failure of Hill, Vision Banc, West Belt and other banks and S& L‘s in support of its conspiracy allegations. This evidence was not only ultimately irrelevant, but improper since it might have misled the jury into thinking that these defendants were on trial for causing these banks’ ultimate failure. See United States v. Wicker, 933 F.2d 284, 290 (5th Cir. 1991) (failure of bank irrelevant to bank fraud charge).
Furthermore, the merits of defendants’ motions for severance would have been substantial if the bank fraud conspiracy had been dismissed prior to trial. Tinsley, Kistler, and Dufilho are not even named in the tax conspiracy.31 Kistler and Dufilho had no dealings with Hill. The initial motions for severance were denied predicated upon the government‘s bank fraud conspiracy theory. If this conspiracy had been dismissed pre-trial, severance of these defendants into two or more smaller cases would likely have been required since the prejudice to them of being joined when they were charged with no conspiratorial objectives was substantial. See Kotteakos v. United States, 328 U.S. 750, 775 (1946) (error to deny substantial right not to be tried en masse for a conglomeration of distinct and separate offenses committed by others).
At the conclusion of the government‘s case in chief when the bank fraud conspiracy was dismissed, defendants again moved for severance based upon prejudicial misjoinder. The court denied these motions.
Generally, misjoinder will not be found after dismissal of a count in an indictment during trial. See United States v. Ong, 541 F.2d 331, 337 (2d Cir. 1976).
This misjoinder was not harmless. In a trial of this duration and size, guilt by association is always a threat. Kotteakos, 328 U.S. at 762. The only way all of these defendants were tied together at all in this far-flung series of events was by the allegation of a violation of
The circumstances underlying the trial of Count I were fundamentally unfair. With full knowledge that it was contrary to recent and controlling precedent, the government induced the grand jury to charge these defendants in Count I with a violation of
VI. Counts II and III
Defendants also challenge their convictions on Counts II and III,35 alleging that these counts are defective for two reasons: first, the counts fail to allege “execution” of the bank fraud; and, second, Counts II and III are unsupported by allegations of an underlying bank fraud “scheme.” Both of these claims have merit.
1. Execution
Counts II and III of this Indictment never allege that these defendants actually executed a bank fraud scheme. Instead, these counts omit this essential element of the offense and charge incorrectly that the offense of bank fraud was and can be committed through “devising or intending to devise” a scheme to defraud. See United States v. Lemons, 941 F.2d 309, 318 (5th Cir. 1991) (bank fraud statute imposes punishment only for each execution of the scheme).37 When the case was submitted and the jury charged, they were instructed by the judge no less than five times that the charges against the defendants were those set forth in the Indictment. Although the court did read an instruction to the jury containing the execution element of bank fraud, the Indictment was then given to the jury for their
“[A] general verdict must be set aside if the jury was instructed that it could rely on any of two or more independent grounds, and one of those grounds is insufficient, because the verdict may have rested exclusively on the insufficient ground.”
United States v. Elkins, 885 F.2d 775, 782 (11th Cir. 1989) (quoting Zant, 462 U.S. at 881). Accord United States v. Ochs, 842 F.2d 515 (1st Cir. 1988). These counts invited the jury to convict for conduct not an offense.
Even if the failure to allege an execution is not fatal,38 however, Counts II and III suffer from an even more serious deficiency which is the direct result of the “high-risk” strategy urged upon the court by the government.
2. The Scheme
The Indictment which ultimately charged these defendants contains no description of the bank fraud scheme they were alleged to have perpetrated. Count II charges that defendants devised a scheme to defraud Hill; Count III charges that defendants devised a scheme to defraud Vision Banc. Originally, a scheme to defraud Hill and Vision Banc had been described in Count I and incorporated by reference into Counts II and III. Count I‘s introductory section alleged the bank fraud conspiracy, and then it was divided into Sections A-E. Section A, headed “Scheme,” described a broad conspiracy to defraud Hill and Vision Banc. Section B briefly described the St. Joe property. Section C, “Defendants, Entities and Other Persons,” identified fifty-four individuals and institutions in the case and described how they were alleged to fit into the conspiracy. Section D set forth the “Manners and Means by Which the Conspiracy was Carried Out,” in thirty-six paragraphs describing the conspiratorial scheme. Finally, Section E, the “Overt Acts” section, recited 227 discrete overt acts which were said to be part of and pursuant to the conspiracy but with no explanation of how they fit into the alleged scheme.
The dismissal of the bank fraud conspiracy from the introductory section of Count I led the district court to redact the Indictment by eliminating all description of that conspiracy from the rest of the count. Of the forty-eight pages originally describing the scheme in Count I, there remains a single paragraph describing a scheme to evade taxes on fraudulently obtained money. All allegations of the bank fraud scheme were removed from Section A, the “Scheme.” Twenty-nine of the original thirty-six paragraphs in Section D‘s “Manner and Means” were removed. The seven remaining paragraphs charged only a narrow scheme to distribute and conceal the proceeds of the Vision Banc loans.39 Hill was no longer even mentioned. Vision Banc is mentioned, but the “new” indictment essentially picks up the story after the funds have been obtained from Vision Banc and focuses on their distribution and concealment from IRS.40
A redaction of an indictment is permissible so long as the elements of the offense charged are fully and clearly set out in what remains. United States v. Miller, 471 U.S. 130, 136 (1985); United States v. Bissell, 866 F.2d 1343, 1356 (11th Cir. 1989). An indictment may not, however, be so severely redacted that any of the elements of the offense are expunged. United States v. Doherty, 867 F.2d 47, 55 (1st Cir. 1989).
The allegation of a scheme is an essential element of the offense of bank fraud.
The essential requirement, indeed, all the particulars constituting the offense of devising a scheme to defraud, are wanting. Such particulars are matters of substance, and not of form, and their omission is not aided or cured by the verdict.
See also United States v. Goldsmith, 109 F.3d 714, 715 (11th Cir. 1997) (bank fraud statute requires the government to establish that a scheme existed in order to obtain money from the bank); United States v. Stavroulakis, 952 F.2d 686, 694 (2nd Cir. 1992) (bank fraud statute makes an individual criminally culpable for devising and executing or attempting to execute a scheme with the intent to defraud a bank).
After the redaction of this Indictment, the target of the scheme set forth in Count I is the IRS. Hill is not mentioned at all. Nor does a fair reading of the redacted Indictment adequately describe how the Vision Banc loans were fraudulently procured or even that the Vision Banc was a target of fraud in any way.
Government counsel now argues that the missing scheme to defraud the banks can be located among the 227 overt acts remaining in Count I. The overt acts, however, are there to support the allegations of a conspiracy, not to describe an alleged scheme to defraud. United States v. Mercer, 133 F. Supp. 288, 290-91 (N.D. Cal. 1955) (indictment charging defendant with wire fraud supported only by overt acts and no particulars of the scheme insufficient). Furthermore, the overt acts describe no coherent scheme. In the original Indictment, the overt acts were put into context by the detailed descriptions of the scheme contained in Parts A, C, D and the introductory section of Count I. When the court redacted all of these sections except as they related to the narrow tax scheme, it left the overt acts without context. Standing alone, they do not indicate the nature of the scheme to defraud, and so cannot supply the missing allegations of a scheme or artifice to defraud the banks. See Mercer, 133 F. Supp. at 290. (“Even if the overt acts charged in count one were to be considered, they do not indicate the nature of the scheme to defraud.“).
Finally, even if the overt acts could supply the missing “scheme,” the jury, having no description of a bank fraud scheme, was left free to pick and choose that “scheme” from wherever they wished among the 227 overt acts. Under such circumstances, the probability that the resulting verdict was not unanimous would be overwhelming. For example, Juror A may have located the scheme in overt acts 1-10, while Juror B found the scheme in acts 2-20 only. Although both voted to convict, they had different schemes in mind.
Therefore, even if the overt acts could supply the missing scheme, the failure of the jury to unanimously agree on which of the 227 overt acts constituted the scheme would violate these defendants’ right to a unanimous verdict. United States v. Gipson, 553 F.2d 453, 458 (5th Cir. 1977) In Gipson, the Fifth Circuit reversed a conviction where the jurors were instructed that they could convict the defendant if they found that he had performed any of the six acts prohibited by the statute. The court held that such an instruction violated the defendant‘s constitutional right to a unanimous verdict since it authorized a guilty verdict despite the fact that some jurors may have believed that the defendant had committed certain of the acts, while other jurors were convinced that he committed different ones of the prohibited acts. Id. The court wrote that “[r]equiring the vote of twelve jurors to convict a defendant does little to insure that his right to a unanimous verdict is protected unless this prerequisite of jury consensus as to the defendant‘s course of action is also required.” Id. See also United States v. Grandlund, 663 F.2d 534, 544 (5th Cir. Unit B 1981) (conviction reversed where impossible to tell if jurors agreed that defendant committed same act which could properly support conviction for mail fraud and conspiracy).
Although defendants’ did not request a more specific jury instruction,42 after having redacted away the scheme, the failure of the district court to instruct the jury that they must unanimously agree on the acts constituting defendants’ scheme was
plain error. See Gipson, 553 F.2d at 458. Therefore, even if the missing scheme could be located among the 227 overt acts as the government now argues, we would reverse the convictions on Counts II and III for violation of these defendants’ substantial right to a unanimous verdict.In summary, the failure of Counts II and III to sufficiently allege the underlying scheme to defraud Hill and Vision Banc respectively is fatal.43 To the extent that the overt acts allege any scheme, the defendants’ right to jury unanimity as to this scheme was unconstitutionally impaired. See United States v. Huls, 841 F.2d 109, 112 (5th Cir. 1988) (reversal required where indictment fails to allege essential element of the offense). All convictions on these counts will be reversed.
VII. Counts VI, VIII, IX and XIII
We hold that under the circumstances described above, defendants’ convictions on these counts must be reversed. All of these offenses require allegations of an underlying scheme. See
VIII. Sufficiency of the Evidence
As already apparent, the case has presented troublesome issues often difficult to grasp. We come now to another.
We must, as seen, remand the case for further proceedings generally expected to include retrials under more traditional and less gambling processes. Yet, we have not decided which of the defendants remain exposed to trial. Strenuous argument is advanced by and on behalf of each that, in the trial from
Adjudicating such claims is not usually of great difficulty. It can be tedious. Citations to transcripts of witnesses’ testimony and to exhibits are required, but ought not be hard to do. Here, however, we encounter well-nigh insurmountable difficulties.
The government‘s brief is supposed to refer us to volume and page of transcribed testimony where, it is said, we shall find evidence sufficient to support these convictions. There are some such references. However, the government‘s brief incorporates a novel citation scheme. Instead of advising the reader where certain testimony can be found in the record, the brief identifies witnesses and
These invitations to us to read entire volumes of transcript on the chance that we shall discover the testimony upon which the prosecutor relies are not merely occasional. From page ten through page thirty-nine of the government‘s brief, we count no less than eighty-three (83) such references! Eliminating duplications, we count forty volumes of record transcripts called to our attention followed by the Latin word “passim” (“everywhere“). Apparently, the United States Attorney depends on us to search through these volumes looking for what we believe the government proffers as supporting evidence on the fact issue being discussed.
We shall not undertake to do this. Appellants say that they cannot find testimony tending to prove guilt in these volumes. Perhaps they have overlooked something. Left to sift through the pages by ourselves, unguided by an advocate, we might overlook it, too. The government allocates too much advocacy to the court. To guard against this sort of happening, the court fashioned a rule:
In the statement of the case, as in all other sections of the brief, every assertion regarding matter in the record shall be supported by a reference to the volume, document number and page number of the original record where the matter relied upon is to be found.
11th Cir. R. 28-2 (1).45
Therefore, this appeal will remain in the breast of the court until further order or judgment. A separate order will issue from the Clerk of Court directing compliance with Eleventh Circuit Rule 28-2 (i).
IX. Conclusion
The circumstances surrounding the allegations in Count I of a bank fraud conspiracy denied these defendants a fair trial on this count. The convictions under Count I WILL BE REVERSED. Counts II, III, VI, VIII, IX and XIII are insufficient as a matter of law for failure of the redacted Indictment to allege an essential element of these offenses and all WILL BE REVERSED. By separate order to the Clerk of Court, we DIRECT further documentation on the sufficiency
ORDER WILL ISSUE BY CLERK OF COURT; JUDGMENT TO FOLLOW FURTHER PROCEEDINGS.
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA PENSACOLA DIVISION
UNITED STATES OF AMERICA, v. WILLIAM MICHAEL ADKINSON, KEITH ALAN COX, ROBERT L. COLLINS, ROBERT ALLIGOOD a/k/a BOB ALLIGOOD, RONALD D. PEEK, ROBERT E. BROCKMAN, RICHARD A. TINSLEY, DANIEL D. KISTLER, BENJAMIN L. KOSHKIN, ANN POWELL MINKS f/k/a ANN POWELL, MARY CATHERINE FAWCETT, GILBERT G. DUFILHO
PCR 91-03052/RV
SUPERSEDING INDICTMENT
THE GRAND JURY CHARGES:
At all times relevant to the indictment:
COUNT I
From on or about June 1, 1985, and continuously thereafter up to and including the date of this indictment, in the Northern District of Florida, and elsewhere, WILLIAM MICHAEL ADKINSON, KEITH ALAN COX, ROBERT L. COLLINS, ROBERT ALLIGOOD a/k/a BOB ALLIGOOD, RONALD D. PEEK, ROBERT E. BROCKMAN, BENJAMIN L. KOSHKIN, ANN POWELL MINKS f/k/a ANN POWELL the defendants herein, willfully and knowingly did combine, conspire, confederate, and agree together and with one another and with other individuals, both known and unknown to the grand jury, to accomplish the following:
The defendants, WILLIAM MICHAEL ADKINSON, KEITH ALAN COX, ROBERT L. COLLINS, ROBERT ALLIGOOD a/k/a BOB ALLIGOOD, RONALD D. PEEK, ROBERT E. BROCKMAN, BENJAMIN L. KOSHKIN, ANN POWELL MINKS f/k/a ANN POWELL conspired to defraud the United States by impeding, impairing, frustrating, obstructing, and defeating the lawful governmental functions of the Internal Revenue Services of the Treasury Department in the ascertainment, computation, assessment, and collection of the revenue of the United States; to wit: Federal income taxes of one or more persons or entities.
As it relates to the tax conspiracy, the purpose of the conspiracy to impede and impair the Internal Revenue Service was to defraud the United States (1) by concealing and causing to be concealed income generated from the proceeds of certain false and fraudulent loan transactions, which proceeds were purportedly applied to real estate transactions but were in actuality diverted and distributed among a number of persons and entities and which proceeds constituted taxable income to the one or more persons or entities receiving and possessing said proceeds, and (b) by either failing to file federal income tax returns which if truthfully filed would have disclosed the existence of said income or by filing false tax returns that failed to report income derived from the proceeds of the false and fraudulent loans, all so as to impeded, impair, frustrate, obstruct and defeat the lawful governmental functions of the Internal Revenue Service in the ascertainment, assessment, collection and computation of revenue of the United States, to wit: federal income taxes of one or more persons or entities.
B. Property
The property is located south of Highway 98, east of Sandestin, and consists of approximately 21,000 acres of unimproved land in the Walton County, Florida, within the Northern District of Florida. The property is located on the south side of Highway 98, and runs adjacent to the Gulf of Mexico, and contains several miles of pristine beach-front land.
C. Defendants, Entities and Other Persons
[completely redacted, including the title]
28. It was further part of the conspiracy to arrange purported real estate transactions that involved the creation of documentation to give the appearance of arms-length transactions, including the purchase by Walton County Investors, Inc. Of real estate from St. Joe Paper Company and a subsequent resale by Walton County Investors, Inc. Of certain parcels of such property to Robert Corson as Trustee; Crossview Development Company, Inc.; Development Mortgage Group, Inc. Ferguson C & D, Inc. and First Western Equity, Inc.
29. It was further part of the conspiracy to create fictitious and fraudulent commissions, fees and loans in connection with the false real estate transaction and to prepare and execute false documentation in furtherance thereof, so as to divert, misappropriate and distribute to certain persons and entities the income derived from the sham Vision Banc Savings Association loans and for all such persons and entities to conceal from the Internal Revenue Service the true income character of these misappropriated proceeds of the sham Vision Banc Savings Association loans.
30. It was further part of the conspiracy that the misappropriate proceeds of the Vision Banc Savings Association sham loans were transmitted directly to Imperial Title Company and thereafter disbursed to the benefit and gain of, inter alios, WILLIAM MICHAEL ADKINSON, ROBERT ALLIGOOD a/k/a BOB ALLIGOOD, The Development Group, Inc. and Sandsend Financial Consultants, Ltd.
31. It was further part of the conspiracy that the aforementioned diversion of the Vision Banc Savings Association sham loan proceeds was concealed through the use of shell corporations, nominees and fraudulent loan transactions.
32. It was further part of the conspiracy that all of the corporate entities that received or transmitted any of the income generated by the sham Vision Banc Savings Association loan proceeds either (a) failed entirely to file federal tax returns, including Development Group, Inc. Walton County Investors, Inc. Sandsend Financial Consultants Limited; Crossview Development Company, Inc. Development Mortgage Group, Inc. Ferguson C & D, Inc. and First Western Equity, Inc., or (b) filed false federal tax returns that failed to report receipt or possession of said income, including Reynolds, Smith & Hills and its subsidiary, Plantec Realty Company.
33. It was further part of said conspiracy that WILLIAM MICHAEL ADKINSON and BENJAMIN L. KOSHKIN did not file a federal tax return in 1986 and both ROBERT ALLIGOOD a/k/a BOB ALLIGOOD and ROBERT L. COLLINS filed false federal tax returns that failed to report their receipt of income derived from the sham Vision Banc Savings Association loan proceeds.
THERE FOLLOW 50 UNREDACTED PAGES ASSERTING 227 OVERT ACTS SAID TO HAVE BEEN COMMITTED IN FURTHERANCE OF THE CONSPIRACY ORIGINALLY ALLEGED IN THE PAGES STRICKEN AND, POSSIBLY, IN FURTHERANCE OF OTHER CHARGED CONDUCT.
Notes
Preliminarily, let me just say that this has probably been the most difficult case to try to understand what is charged and what the evidence is of any criminal case that I have ever dealt with, and I suspect most of you can say the same thing. Part of the problem is that the government has attempted to turn a bank fraud case into a case that includes an income tax case and a mail fraud and wire fraud, and everything else, and the pieces simply don‘t fit together very well; and, when you have as far-reaching factual circumstances that are in this case, it makes it extremely difficult to try to deal with all of the defendants and all of these charges that, for the most part, are not even related.
[T]here‘s been some serious doubt in my mind as to what really has been established by the government in connection with the stated purpose of the remaining portion of the conspiracy. In truth, there really has not been much evidence that there was a conspiracy to conspire or frustrate the IRS function in this case. . . .
Part of the problem is that the government has attempted to turn a bank fraud case into a case that includes an income tax case and a mail fraud case, and everything else, and the pieces simply don‘t fit together very well.
The district court went on, however, to uphold the convictions.