*3 port heavy trucks flooding. and resist The ANDERSON, Before HILL and Circuit construction patrol contract for the road *, Judges, and GARZA Senior Circuit originally awarded Journagan to Con- Judge. Company struction (“Journagan”). Journagan problems encountered soon GARZA, Judge: Senior Circuit after began. construction of the road It juryA convicted William M. Conover and had Journagan been assumed that would Anthony R. conspiring Tanner of to de- be able to use sand located the area fraud the United States in violation of 18 where the being road was built. As it committing U.S.C. various acts § out, however, turned the sand would not of mail fraud connection with the con- compact density to a support sufficient to spiracy in violation of 18 U.S.C. light-weight even vehicles. Seminole hired Conover and appealed, argu- Tanner have engineering consulting firm of Ross ing that the district court abused its discre- (“Ross”) and Associates to evaluate the refusing investigate tion in allegations to suggested situation. Ross that the natural juror misconduct; conspiracy material, primary sands be used as the fill count of the charge indictment failed to topped sand-clay and then with a mixture against States; crime the United that the which would be more cohesive and stable. support evidence is insufficient to the mail Journagan began implement this meth- convictions; fraud and that the district od, difficulty but soon encountered in ob- evidentiary rulings court made various taining clay. sufficient amounts of which warrant reversal. We affirm the meeting A Tampa was held at Seminole’s convictions. office in March 1981. The meeting was to ways discuss of acceler- ating the construction project. prob- Cooperative, obtaining
Seminole Electric Inc. lem adequate fill materials for (“Seminole”), corporation is a Florida patrol road was During also discussed. * Garza, Reynaldo Honorable G. U.S. Circuit tion. Circuit, Judge sitting by designa- for the Fifth Sherrill, meeting, Journagan longer working Seminole’s With no Richard on road, patrol construction of the it became engineering, in-
supervisor of transmission necessary to award a new contract for the to locate sources of fill structed Conover patrol through construction of the road Journagan representatives indi- material. competitive bidding pro- formal Seminole’s attempted locate they had not cated cedure. decided Seminole award They also indi- alternative fill materials. just patrol project one contract for the road price that the contract would have to cated Instead, Journagan. as it had done with substantially in order for be increased company sepa- decided to bid out two Journagan’s complete them to the road. provide rate contracts: one to fill material subsequently terminated. contract was provide spreading one to Following meeting, called Conover specifications fill material. The for the fill mine, Tanner owned a limerock Tanner. material described the contract were real estate and was also involved up by procurement drawn Seminole’s de- *4 development business. Tanner and Con- partment. specifications The stated that using possibility the of lim- over discussed the fill material had to have a limerock erock and limerock overburden as an alter- twenty percent. content of at least This fill Limerock native material. overburden requirement worked favor of Tanner for generally First, in a material which is found several reasons. the Citra Mine was is, relatively deposits. undeveloped. above limerock On March That there was great a present deal overburden still request, engi- at Conover’s Seminole deposits; consequently, above the limerock neer Ken Bachor examined the fill material easy it would be for Tanner to remove the available at Tanner’s Citra Mine. Bachor overburden, only then mix in the minimum material later advised Sherrill that necessary amount of limerock to meet the adequate project. would be for the Sherrill specifications required by the contract. subsequently purchase a issued order to Second, specifications the contract excluded acquire enough limerock overburden to contractors who could have made had bids keep underway. construction Conover did required the contract the use of a sand and investigate any not other sources of alter- clay mixture rather than a limerock mix- native fill materials. Additionally, ture. one contractor com- friends, Tanner and Conover were and plained period that the time in which bids gone fishing trips together. had on several had to be submitted was too short. Tanner They together had flown to Bahamas submitted the lowest of several bids made private plane May Tanner’s in 1980. In contract, on the fill and was awarded the purchased a Conover condominium job. Tanner also made the lowest bid on Investors, Crystal company from River a contract, spreading and was awarded owned Tanner. Tanner loaned Conover job as well. so that Conover close on the $6000 could problems began More arose after Tanner condominium; money repaid in this was working on the road. First there was a Previously, January June 1981. dispute party, as to which Seminole or Tan- per- Conover had contracted with Tanner to ner, required was to maintain the access landscaping sprin- form work and install a leading patrol roads to the road. Conover complex system kler at the condominum employee and another Seminole advised $13,750. approximately for a fee of On Bachor, manager Kenneth Seminole’s 9, gave March Tanner Conover engineering, transmission that the contract $10,035 allegedly check for which was ambiguous, and should was that Seminole partial payment money made in up pay; paying Seminole ended the costs of landscaping owed under the contract. Con- maintaining Subsequent- the access roads. $15,000 under the over received a total complained provided ly, REA that the bond landscaping The does not unacceptable contract. record Tanner was because $15,000 profit. bonding company Treasury not on the reflect how much of the was was approved list of sureties. In Department’s II 17, 1981, July a letter dated Conover told Appellants’ first contention is that bonding company patrol that the another refusing district court erred in to conduct “essentially” completed, road had been evidentiary hearing for the performed had the work been investigating jury claims of misconduct. In satisfactory manner. another letter dat- The factual underpinnings supporting this July fifty stated that ed Conover contention are somewhat Allega- unusual. jury tions of misconduct percent completed. originally of the road had been were pressed by appellants fact, while their In the road was less than half finished mo- tion for new trial pending. was still In a at time. It also learned that affidavit, attorney sworn Tanner’s stated wet; limerock weakens when it becomes that he phone received an unsolicited call consequently, the limerock mixture could juror. from a juror The told Tanner’s at- subject used in be areas water flood- torney that several jury members of the result, ing. As a “clean sand” had to be drinking during recess, had been the lunch high-water substituted areas. Tanner jurors and that several had fallen asleep charged yard for each cubic of fill $4.75 during the trial. The district court con- spread; Journagan material delivered and affidavit, arguments sidered heard on charging only per had been cubic $3.82 matter, and denied the motion for new yard pure spread. sand delivered and trial. patrol completed road was in October Subsequently, appeal while court, pending case was in this Tanner *5 completed, Prior to the time the road was filed, in, joined Conover a motion for 1981, representatives in June the of Withla- newly new trial based on discovered evi- Inc., Cooperative, coochie Rural Electric jury dence of misconduct. In another affi- coop- which was member of the Seminole davit, attorney Tanner’s stated that on Oc- erative, demanded that Seminole terminate 13, 1984, tober he received an unsolicited all relations business with Tanner. This (at residence) juror. visit his from a second alleged improprieties demand was based on juror formally interviewed, This pre- was in the manner which the contracts with sumably request at the of Tanner’s attor- Tanner had been awarded. Federal author- ney, by private investigators two on Octo- investigating by ities were the situation transcribed; ber 15. The interview was subsequent- November 1981. Conover was transcript by the juror, was sworn to the ly suspended, demoted, violating then for and attached to the motion for new trial. policies. Seminole’s conflict of interest interview, During juror the the made a Tanner and Conover were first indicted alarming allegations concerning number of in June 1983. The six week trial that fol- jurors. the conduct of the He said that hung jury, lowed resulted and a mis- jury big party,” “the was one and that trial was declared. Tanner and Conover included, jurors, several himself drank beer subsequently were reindicted on a five marijuana during and smoked the noon re- alleged count indictment. Count I that jurors cess. He also stated that two of the conspired Tanner and Conover had to de- injested during had on cocaine the occasion fraud the United States violation of 18 recess, noon and that he had learned that 371; through alleged counts II V U.S.C. § jurors one of these two had offered to sell separate instances of mail fraud viola- quarter-pound marijuana. the other a of 18 tion U.S.C. Conover was § voluntarily He also indicated that he had on all Tanner convicted counts. was con- come forward with this information to clear I, II, IV, on counts conscience, victed V. Two his and that he had not received allegations trial motions new based on promised any type or been remuneration filed; jury misconduct were both were for his statement. The trial court denied denied. the motion new trial based on this persons conspire either to first If two or more without evidence
newly discovered
any
against
commit
offense
the United
evidentiary hearing.
conducting an
States,
States,
or to defraud
investigate allega
to
The decision
any agency
any
thereof in
manner
or
rests within
jury misconduct
tions of
any purpose, and one or more of
or for
the district court. See
sound discretion
persons
any
do
act to effect
such
1508, 1540
F.2d
Darby, 744
U.S. v.
conspiracy, each shall be
object of the
requir
Cir.1984).
per
rule
“[Tjhere is no
se
$10,000
impris-
or
fined not more than
every instance.”
Id.
ing
inquiry in
an
years,
more than five
or both.
oned not
Barshov, 733 F.2d
(quoting U.S. v.
added).
(emphasis
The Su-
18 U.S.C. 371
evidentiary
(11th Cir.1984)).
When
section 371 as
preme Court has construed
conducted,
inquiry
is limited
hearing is
purpose
reaching “any conspiracy for the
preju
extraneous
determining “whether
defeating
impairing, obstructing, or
brought
improperly
dicial information
any department of
lawful
function of
any
or
out
jury’s
attention whether
States,
government.” Dennis v. United
improperly brought to
influence was
side
1840, 1844,
384 U.S.
any juror.”
FED.R.EVID.
upon
See
bear
The Court has also
L.Ed.2d
606(b).
supporting appel
The affidavit
are contem-
explained
types
what
of fraud
allege
trial does not
motion for new
lants’
plated by the statute:
brought to
information was
prejudicial
conspire to defraud the United States
To
Similarly, it does not
jury’s
attention.
primarily to cheat the
means
influence was
allege
outside
money,
it
property
but
also
out
if
upon any juror. Even
brought to bear
one
means to interfere with or obstruct
allegations of substance abuse were
governmental
by
functions
of its lawful
showing of
true,
“adequate
no
there is
deceit,
trickery,
at least
craft or
pre
to overcome the
extrinsic influence
are dishonest.
It is not nec-
means that
Barshov,
jury impartiality.”
sumption of
government shall
sub-
essary that the
be
Thus,
court
the district
Count pro- loan guaranteed of its violating 18 371. Sec- forcement lants with U.S.C. § twenty-five alleged part: gram.” Count also provides in relevant tion 371 assertion, require approval. appellants REA Had the tracts did not with this 1. In connection excluding knowing required argue erred in a been to show a that the district court Harry rule, representative proce- regulation, from an REA to letter violation of an REA Wright, general manager. dure, The letter Seminole’s clearly been admissi- the letter would have required to obtain contention, stated that Seminole was not light rejection of that ble. In of our had approval two of the contracts which REA however, the error in its exclu- we fail to see The letter also states been awarded to Tanner. sion. bidding procedures used for those con- the that
771
REA,
of the
guaranteed by
overt acts committed
furtherance
the
which is also
conspiracy.
among
acts
an agency
government.
Listed
these overt
of the federal
questionable
supports
were the
business transac-
evidence
the conclusion that Tan-
gave rise
tions which
to this case. The ner
engaged
and Conover
in collusive and
clearly
evidence
sufficient
the
support
practices.
is
dishonest business
This consti-
conclusion that
these
oc-
transactions
tuted a fraud on the United States under
curred.
section 371.
Appellants suggest
that
these
IV
showed,
most,
transactions
at the
violations
Appellants next
that
the
contend
evi-
policy,
Seminole’s conflict of interest
dence
support
is insufficient to
their convic-
conspiracy
the existence of a
to defraud the
the
tions on
mail
alleged
fraud violations
reject appellants’
REA. We
contention
through
II
counts
V. The mail fraud
charge
that the indictment failed to
a crime
statute,
1341,
prohibits
U.S.C.
the use
require
under section 371. There is no
of the mails for
the
of executing
statute,
or in
ment
the cases constru
any scheme or artifice to defraud. The
statute,
ing
that the object
of the con
charged
indictment
appellants
used
spiracy
to cause a
must be
financial loss to
(1)
purposes
mails
defrauding
government.
an
“the
by impeding,
impairing,
(5th
Burgin,
States v.
621 F.2d
obstructing
defeating
and
the lawful func-
Cir.1980);
Anderson,
United States v.
tion of
its administration and
[REA]
Cir.),
denied,
F.2d
cert.
guaranteed
enforcement of its
pro-
loan
U.S.
the indictment
a
violation
materials,
procurement
equipment
rules, regulations,
proce
agency’s
honestly
and services run
deceit____”
and free from
designed
protect
dures. The
is
statute
“to
integrity
the United
and its
States
agencies, programs,
policies.”
argue
and
Bur
Appellants
that the convictions on
gin,
Moreover,
through
upheld only
at
counts II
V can be
if
“[t]he
they
States has
fundamental interest
the evidence establishes that
used the
projects receiving
effectuating
manner in which
its mails in
a scheme to defraud
so,
contend,
aid are
is not
appellants
conducted. This interest
Seminole. This is
strictly
accounting
charge,
limited
for United because the indictment did not
and
establish,
in the
Government funds invested
did not
evidence
violation of
project,
seeing
extends to
the en
already rejected
but
371. We have
U.S.C. §
project
honestly
Thus,
tire
is administered
and this proposition.
we need not reach
efficiently
without
corruption
question
of whether the evidence estab-
*7
Hay,
waste.” United States v.
F.2d
use of
the purpose
527
lishes the
the mails for
990,
(10th Cir.1975),
denied,
effectuating
998
425
cert.
a scheme to defraud Semi-
935,
1666,
U.S.
176 nole. The
S.Ct.
L.Ed.2d
convictions can be affirmed if
(1976) (citing
Thompson,
States v.
use of
evidence establishes the
(6th Cir.1966),
denied,
effectuating
has whether actually The district court did occurred. HILL, Judge, specially JAMES C. Circuit excluding not err in this evidence. concurring: Although
Appellants next contend
do
believe U.S.C. §
penalize
conspir
improperly
district court
limited their cross- should be construed to
case,
acy proved in this
I concur in the
examination of
witness Albert
panel
During
judgment
the cross-examination of
of the court because this
is
Guthrie.
*8
Guthrie,
brought
by
the Fifth Circuit in
the defense
out
bound
the decision of
being investigated
Burgin,
for criminal
v.
Section 371 criminalizes
“to the funds it was providing would be uti-
States,
any agency
defraud the United
lized.
Intellectual honesty compels me to
any
any purpose.”
thereof in
manner or for
find those facts sufficient
bring
to
the
conspiracy
It
not criminalize a
does
to de-
fraud
in
committed
this case within the
private party.
fraud a
in
evidence
this
371,
ambit of section
as that statute was
prove
sufficient
case was
to
that the de-
by
construed
the Fifth Circuit in Burgin v.
conspired
fendants
to defraud Seminole
States,
United
In Burgin
view,
my
however,
In
prose-
Electric.
the
government proved
the
the defend-
prove
conspiracy
cution did not
a
to de- ants,
senator,
who included a state
con-
government
fraud the
of the United States.
spired to use
position
the senator’s
in state
long
It
prose-
has
been the case that the
government to exert
upon
undue influence
any monetary
cution need not show
agency
officials of the state
responsible property
government
loss to the federal
to
administering a
training pro-
Head Start
conspiracy
sustain a conviction for
to de- gram in that state. The
quite aptly
court
the
fraud
United States under section 371. described the scheme designed and exe-
Henkel,
462, 479,
Haas
216 U.S.
30 S.Ct.
by
cuted
the defendants as
ped-
“influence
249, 253,
774
govern
parably
vagueness”
federal
function of the
venerable “void
authorized
ment,
entity-
than as a non-federal
doctrine of constitutional
rather
law.
statute
“[A]
form of federal assistance.
receiving
requires
doing
some
either forbids or
which
of a
Complete ownership or control
nom
vague
of an act in terms so
that men of
govern
the federal
inally private entity
intelligence
necessarily
common
must
might
as evidence of such a
ment
serve
guess
meaning
at its
and differ as to its
Walter,
relationship.
v.
See United States
application,
violates
first essential of
10, 11,
15, 18,
68 L.Ed.
44 S.Ct.
263 U.S.
process
Connally
due
of law.”
v. General
conspir
(1923)(holding statute reached
137
Co.,
385, 391,
Construction
269 U.S.
Emergen
acy
the United States
to defraud
126, 127,
(1926).
S.Ct.
has appellants’ be construed to reach acts. VERDERANE,
Edward J.
Claimant-Respondent,
v. SHIPYARDS,
JACKSONVILLE INC. AND
AETNA CASUALTY SURETY
COMPANY,
Employer/Carrier-Petitioners,
DIRECTOR, OFFICE OF WORKERS’ PROGRAMS,
COMPENSATION Labor, Department Party-In- of Respondents.
Interest —
No. 84-3777. Appeals,
United States of Court
Eleventh Circuit.
Sept. 1985. Chapter 47 of of the Title 18 intent that such or advance loan of credit Code, statements, concerning accepted fraud and false Depart be shall offered to or variety examples. general provides a wide A Housing Development ment of and Urban for penalizes knowing provision and willful insurance, purpose obtaining any or for the false, making or use of fictitious or otherwise loan, any extension or renewal of credit, advance of any "in matter fraudulent statements within the mortgage Depart or insured such jurisdiction any department or (1982). ment.” 18 U.S.C. 1010 Federal § law (1982). States.” 18 U.S.C. Other § prescribes penalties knowingly criminal for specific. federal statutes are more It is a feder making purpose false for the statements of in any "any person entry crime al to make false fluencing various of F.D.I.C. actions or Federal book, any report, [any or statement of Feder Savings Corporation and Loan Insurance in bank, bank, Reserve al member national bank institutions, (1982), sured 18 U.S.C. Corporation (F.D. Deposit Federal or Insurance knowingly making false statements "with I.C.) injure insured bank] with intent or de character, respect quality, quantity, to the or bank, any company, body such fraud politic or other any performed performed, cost or to work be corporate, person.” or or individual furnished, or to be materials furnished (1982). U.S.C. § Another section crimi any high connection with the construction of making passing nalizes the of statements way project approved by or related the Secre obtaining to be false known any "for the tary Transportation.” 18 U.S.C. § 1020 any person, loan or from advance of credit association, corporation partnership,