Estes v. United States
This text of 254 F. Supp. 314 (Estes v. United States) is published on Counsel Stack Legal Research, covering District Court, W.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
BREWSTER, District Judge.
This proceeding involves a civil post-conviction motion seeking to vacate movant’s conviction in this Court on four counts alleging mail fraud and on one count charging conspiracy to commit mail fraud and the interstate transportation of fraudulent securities, and a motion for new trial in the criminal case itself on the ground of newly discovered evidence. The conviction was appealed and upheld. Estes v. United States, 5 Cir., 335 F.2d 609 (1964), cert. den. 379 U.S. 964, 85 S.Ct. 656, 13 L.Ed.2d 559, reh. den. 380 U.S. 926, 85 S.Ct. 884, 13 L.Ed. 2d 814. While there is only one pleading, it is expressly presented in the dual capacity just mentioned. The civil phase of the motion is based upon the claim that the government knowingly used perjured testimony to obtain the conviction, or that, if the government did not actually solicit such testimony, it knowingly permitted it to stand uncorrected. The motion in the criminal case alleges the recent discovery of evidence of a conversation in a long distance telephone call from Richard Feuille of El Paso to Hilbert Kreeger, Jr., of Wilmette, Illinois, of another conversation in a call from Harry Moore of El Paso to Kreeger, and of a letter dated December 12, 1961, from Kreeger to Robert Graham, an official of General Leasing of Fort Wayne, Inc., all of which evidence movant contends was theretofore unknown and unavailable to him and would now result in a verdict of acquittal.
The thrust of each part of the motion is that the new evidence will better enable movant to substantiate his defense that there could be no scheme to defraud, due to the fact that all of the parties1 [316]*316involved in the anhydrous ammonia tank transactions 2 knew that the tanks listed as security in their chattel mortgages or as rental property in their leases were fictitious, by establishing that Kreeger, a government’s witness on the criminal trial, knew of the non-existence of the tanks at the time of the purchases by him of about $7,000,000.00 of tank paper for his employer, Walter' E. Heller & Co., one of the “finance companies” listed in the bill of particulars as a victim of the scheme.3 He also says that it shows that Kreeger perjuriously testified that he had no such knowledge and that he did not discuss tank transactions with J. C. Williamson, one of the mortgagors or lessees, in a long distance telephone conversation in early December, 1961.
To a large extent, the same evidence is material to both aspects of the motion, and by agreement the entire matter has been tried in one hearing.
A detailed treatment of the civil action is made unnecessary by the concession of able counsel for movant4 at the conclusion of this hearing that relief was not justified on that phase of the motion because of failure of the evidence to show any misconduct on the part of the government in connection with the [317]*317alleged perjury.
It is fundamental that a conviction obtained by the knowing use of perjured testimony is in violation of due process of law under the federal constitution. Mooney v. Holohan, 294 U.S. 103, 55 S.Ct. 340, 79 L.Ed. 791, 98 A.L.R. 406 (1935); Pyle v. State of Kansas, 317 U.S. 213, 63 S.Ct. 177, 87 L.Ed. 214 (1942); Alcorta v. State of Texas, 355 U.S. 28, 78 S.Ct. 103, 2 L.Ed.2d 9 (1957); Napue v. People of State of Illinois, 360 U.S. 264, 79 S.Ct. 1173, 3 L.Ed.2d 1217 (1959); and Annotations in 2 L.Ed.2d 1575 and 3 L.Ed.2d 1991. The essential elements of an action to set aside a conviction on this theory are, first, that material perjured testimony was actually given, and, second, that the prosecution either knowingly used it or allowed it to go uncorrected. See also: Smith v. United States, 5 Cir., 252 F.2d 369 (1958), cert. den. 357 U.S. 939, 78 S.Ct. 1388, 2 L.Ed.2d 1552; Lott v. United States, 5 Cir., 262 F.2d 332 (1958); Sears v. United States, 5 Cir., 265 F.2d 301 (1959); Enzor v. United States, 5 Cir., 296 F.2d 62 (1961), cert. den. 369 U.S. 854, 82 S.Ct. 940, 8 L.Ed.2d 12; Tilghman v. Hunter, 10 Cir., 167 F.2d 661 (1948); Ryles v. United States, 10 Cir., 198 F.2d 199 (1952); Hickman v. United States, 8 Cir., 246 F.2d 178 (1957), cert. den. 355 U.S. 874, 78 S.Ct. 126, 2 L.Ed.2d 78; United States v. Branch, 2 Cir., 261 F.2d 530 (1958); Wilkins v. United States, 104 U.S.App.D.C. 337, 262 F.2d 226 (1958). The “prosecution” includes investigating officers as well as attorneys, and it is under an affirmative duty to make prompt disclosure of any information known to it which might have a material bearing on the truthfulness of any evidence adverse to the accused. Alcorta and Napue cases, both supra; Curran v. State of Delaware, 3 Cir., 259 F.2d 707 (1958), cert. den. 358 U.S. 948, 79 S.Ct. 355, 3 L.Ed.2d 353. The burden is on the movant to prove the essential elements of his action. Smith v. United States, Enzor v.
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BREWSTER, District Judge.
This proceeding involves a civil post-conviction motion seeking to vacate movant’s conviction in this Court on four counts alleging mail fraud and on one count charging conspiracy to commit mail fraud and the interstate transportation of fraudulent securities, and a motion for new trial in the criminal case itself on the ground of newly discovered evidence. The conviction was appealed and upheld. Estes v. United States, 5 Cir., 335 F.2d 609 (1964), cert. den. 379 U.S. 964, 85 S.Ct. 656, 13 L.Ed.2d 559, reh. den. 380 U.S. 926, 85 S.Ct. 884, 13 L.Ed. 2d 814. While there is only one pleading, it is expressly presented in the dual capacity just mentioned. The civil phase of the motion is based upon the claim that the government knowingly used perjured testimony to obtain the conviction, or that, if the government did not actually solicit such testimony, it knowingly permitted it to stand uncorrected. The motion in the criminal case alleges the recent discovery of evidence of a conversation in a long distance telephone call from Richard Feuille of El Paso to Hilbert Kreeger, Jr., of Wilmette, Illinois, of another conversation in a call from Harry Moore of El Paso to Kreeger, and of a letter dated December 12, 1961, from Kreeger to Robert Graham, an official of General Leasing of Fort Wayne, Inc., all of which evidence movant contends was theretofore unknown and unavailable to him and would now result in a verdict of acquittal.
The thrust of each part of the motion is that the new evidence will better enable movant to substantiate his defense that there could be no scheme to defraud, due to the fact that all of the parties1 [316]*316involved in the anhydrous ammonia tank transactions 2 knew that the tanks listed as security in their chattel mortgages or as rental property in their leases were fictitious, by establishing that Kreeger, a government’s witness on the criminal trial, knew of the non-existence of the tanks at the time of the purchases by him of about $7,000,000.00 of tank paper for his employer, Walter' E. Heller & Co., one of the “finance companies” listed in the bill of particulars as a victim of the scheme.3 He also says that it shows that Kreeger perjuriously testified that he had no such knowledge and that he did not discuss tank transactions with J. C. Williamson, one of the mortgagors or lessees, in a long distance telephone conversation in early December, 1961.
To a large extent, the same evidence is material to both aspects of the motion, and by agreement the entire matter has been tried in one hearing.
A detailed treatment of the civil action is made unnecessary by the concession of able counsel for movant4 at the conclusion of this hearing that relief was not justified on that phase of the motion because of failure of the evidence to show any misconduct on the part of the government in connection with the [317]*317alleged perjury.
It is fundamental that a conviction obtained by the knowing use of perjured testimony is in violation of due process of law under the federal constitution. Mooney v. Holohan, 294 U.S. 103, 55 S.Ct. 340, 79 L.Ed. 791, 98 A.L.R. 406 (1935); Pyle v. State of Kansas, 317 U.S. 213, 63 S.Ct. 177, 87 L.Ed. 214 (1942); Alcorta v. State of Texas, 355 U.S. 28, 78 S.Ct. 103, 2 L.Ed.2d 9 (1957); Napue v. People of State of Illinois, 360 U.S. 264, 79 S.Ct. 1173, 3 L.Ed.2d 1217 (1959); and Annotations in 2 L.Ed.2d 1575 and 3 L.Ed.2d 1991. The essential elements of an action to set aside a conviction on this theory are, first, that material perjured testimony was actually given, and, second, that the prosecution either knowingly used it or allowed it to go uncorrected. See also: Smith v. United States, 5 Cir., 252 F.2d 369 (1958), cert. den. 357 U.S. 939, 78 S.Ct. 1388, 2 L.Ed.2d 1552; Lott v. United States, 5 Cir., 262 F.2d 332 (1958); Sears v. United States, 5 Cir., 265 F.2d 301 (1959); Enzor v. United States, 5 Cir., 296 F.2d 62 (1961), cert. den. 369 U.S. 854, 82 S.Ct. 940, 8 L.Ed.2d 12; Tilghman v. Hunter, 10 Cir., 167 F.2d 661 (1948); Ryles v. United States, 10 Cir., 198 F.2d 199 (1952); Hickman v. United States, 8 Cir., 246 F.2d 178 (1957), cert. den. 355 U.S. 874, 78 S.Ct. 126, 2 L.Ed.2d 78; United States v. Branch, 2 Cir., 261 F.2d 530 (1958); Wilkins v. United States, 104 U.S.App.D.C. 337, 262 F.2d 226 (1958). The “prosecution” includes investigating officers as well as attorneys, and it is under an affirmative duty to make prompt disclosure of any information known to it which might have a material bearing on the truthfulness of any evidence adverse to the accused. Alcorta and Napue cases, both supra; Curran v. State of Delaware, 3 Cir., 259 F.2d 707 (1958), cert. den. 358 U.S. 948, 79 S.Ct. 355, 3 L.Ed.2d 353. The burden is on the movant to prove the essential elements of his action. Smith v. United States, Enzor v. United States, United States v. Branch, Ryles v. United States, all supra. Movant has failed to prove either one of the necessary elements of his civil action based on use of perjured testimony, and that theory of his action must be rejected.
Counsel for movant still strenuously insist that he is entitled to have his motion in the criminal case granted on the ground of newly discovered evidence. The Court is of the opinion that that motion should be overruled because: (1) The evidence regarding the long distance telephone calls in June, 1961, one between Kreeger and Moore and the other between Kreeger and Feuille, could have been discovered in time for use in the criminal trial by the exercise of due diligence on the part of movant and his counsel. Reno v. United States, 5 Cir., 340 F.2d 307 (1965); Ferina v. United States, 8 Cir., 302 F.2d 95 (1962), cert. den. sub. nom. Cardarella v. United States, 371 U.S. 819, 83 S.Ct. 35, 9 L.Ed. 2d 59; Pitts v. United States, 9 Cir., 263 F.2d 808 (1959), cert. den. 360 U.S. 919, 79 S.Ct. 1438, 3 L.Ed.2d 1535; Fernandez v. United States, 9 Cir., 329 F.2d 899 (1964). (2) The evidence is not such that it would probably produce a different result. Weiss v. United States, 5 Cir., 122 F.2d 675 (1941), cert. den. 314 U.S. 687, 62 S.Ct. 300, 86 L.Ed. 550, reh. den. 314 U.S. 716, 62 S.Ct. 478, 86 L.Ed. 570; Ledet v. United States, 5 [319]*319Cir., 297 F.2d 737 (1962); Reno v. United States, supra.
A review of the facts is necessary to an understanding of the questions presented by this motion. Some of the background appears in the following quotation from the opinion of the Court of Appeals by Judge Grooms on the appeal in the criminal case:
“In short summary the evidence with some variation between the various transactions discloses that appellant, by himself or by agents, would approach various farmers and business men and persuade them to enter into conditional sales contracts, chattel mortgages and leases for the purchase or lease of specific, anhydrous ammonia tanks and related equipment from the Superior Manufacturing Company of Amarillo, Texas, and the Lubbock Machine and Supply Company of Lubbock, Texas. The tanks were described by serial number on the various instruments and were to serve as collateral thereto. These tanks did not exist but were represented to those with whom appellant and his agents had their dealings as being in existence and that they would constitute such collateral. After the instruments were executed they were sold and assigned to various finance and investment companies. A substantial portion of the money disbursed by such purchases was paid to appellant through his agents or through middlemen.
“Appellant and those associated with him paid to the parties executing the instruments a sum equivalent to ten percent of the face value of the instruments to induce them to execute the paper. For the same reason they also agreed to lease back from said parties the tanks and related equipment for a term of years co-extensive with the maturity of the paper, to pay the parties the same amount of monthly payments as they were required to pay as makers, and to save them harmless from having to pay out any of their own funds in making the payments required by the instruments. In some cases the makers of the instruments executed statements that the tanks had been delivered to them.
“Superior Manufacturing Company was under the domination and control of appellant and his co-defendants.
“The prosecution contends that the various transactions in all their ramifications constituted a gigantic scheme and conspiracy to defraud with the use of the mails to those ends. The counts upon which a conviction was had are so couched.
“More than $20,000,000.00 was involved in the purchase of Superior tank paper. Most of this is unpaid and in default.” ' 335 F.2d at 612.
The fact that the tanks were non-existent was easy to conceal. Under the plan presented to the victims, it was contemplated that the tanks would go directly to the possession of movant, as lessee or as sub-lessee, for immediate use in his far-flung and widespread farming and fertilizer enterprises. Even though it was intended by movant and his co-defendants that the tanks would never be manufactured, Superior Manufacturing Company did currently make up and deliver to movant plates bearing serial numbers corresponding to those listed on the tank paper, so that they could be attached to some of his own tanks in the event of a check on the security. Movant actually owned 1500 tanks scattered over a wide area of West Texas to which plates could be attached to make it appear that any tanks listed on the paper actually existed.5
[320]*320Counsel for movant say that they learned of the two telephone calls and the letter as a result of developments in the trial of a civil action in the state court in Pecos, Texas, at about the time movant was taken into federal custody in Janu[321]*321ary, 1961, to begin service of his sentence. The Barnes group 6 filed the suit against Billie Sol Estes, Walter E. Heller & Co., and others to challenge the validity of their obligations under the tank paper signed by them. Walter E. Heller & Co. cross-filed against the Barnes group seeking recovery of the unpaid amount of the obligation evidenced by the tank paper they had signed. One of the issues in that case was whether Walter E. Heller & Co. knew that the security for the paper was fictitious. The Barnes group produced Feuille, George Lutich’s El Paso attorney, and he testified that on June 17, 1961, he had his secretary place a call from El Paso to Kreeger at his home in Wilmette, Illinois; that while he did not know Kreeger personally, a man answered the phone and identified himself as Kreeger; that he told Kreeger he was representing George Lutich who had signed some paper leasing some anhydrous ammonia tanks; that Lutich was not going to honor the paper; that “there was no consideration for the transaction in that the tanks were not delivered and were not expected to be delivered”; that in his opinion the transaction was bogus and fraudulent; and that he demanded the return of the paper signed by Lutich.7 Kreeger, offered as a [322]*322•witness by Walter E. Heller & Co., testified that he had no knowledge of the nonexistence of the tanks during the time his company was buying the paper; that while it was remotely possible that Feuille called him, he had no recollection of the call; that he believed he would remember Feuille's calling him at his home, as he did not get many long distance calls there.8 A telephone bill of [323]*323Feuille’s law firm showing a charge for a call to Wilmette, Illinois on Saturday, June 17, 1961, and a piece of scratch paper from the firm’s file on Lutich bearing handwritten notations of Kreeger’s office and home telephone numbers, were introduced to corroborate Feuille’s testimony.
Movant says that the investigation by his counsel of the George Lutich transaction following the Pecos trial also developed that on June 15, 1961, Harry Moore, Lutich’s banker at the El Paso National Bank, had a long distance telephone conversation with Kreeger, wherein he told him that an attorney had raised some question about the consideration for the Lutich papers, and asked him to hold up any advance of money on the paper until the question was ironed out.9
Finally, the motion alleges that movant and his attorneys first learned of the letter of December 12, 1961, as a result of its having been offered in evidence by the Barnes group in the trial in Pecos. In answer to questions on cross-examination by defense counsel in the criminal case in El Paso, Kreeger testified that he had a telephone conversation with J. C. Williamson sometime in December, 1961, about a grain elevator ;10 that he had no [324]*324recollection of a discussion of tank transactions in that conversation, and believed there was none; that'he did not make the statement to Williamson on that occasion that there was something fishy about the tank paper or the transactions.11 Williamson, one of the lessees who had previously been offered by the government to establish his transactions with movant, was later recalled by the defense to contradict Kreeger’s testimony. He said that they did talk about tank transactions; that Kreeger “lit into Billie Sol pretty heavy”; that Kreeger did use the words, “something fishy”; and that Kreeger said that his company was not going to take any more tank paper.12 Movant admitted in this hear[325]*325ing that he was in Williamson’s office during all of the conversation, and on an extension line listening to both parties during part of it. Movant says that the letter of December 12, 196113, from Kreeger to Graham14 corroborates Williamson’s version of the conversation.
A brief resume of the George Lutich transactions is necessary at this point. Lutich was a prosperous farmer in the irrigated farming area of the Rio Grande Valley just below El Paso. His accountant, who was apparently hustling tank deals for movant, got him interested in them. He executed three separate sets of paper on May 10, 1961, whereby he leased from Leasing, Inc., of Fort Wayne, Indiana, a total of 486 one thousand gallon anhydrous ammonia tanks for a period of sixty months for a rental of $495,-000.00, payable in equal monthly installments. Movant then leased the tanks from Lutich on the same terms as Lutich had rented them from Leasing, Inc. As further assurance that he would be protected against loss, Superior Manufacturing Company gave him a letter agreeing to take over the deal and hold him harmless "at any time that Mr. Billie Sol Estes should default on payment of said tanks.” Leasing, Inc. was supposed to have bought the tanks from Superi- or Manufacturing Company. Lutich thought the tanks existed, but never expected them to be delivered to him. He thought they would go directly to movant’s possession. Movant gave his check to Lutich for the ten per cent rake-off, and then stopped payment on it.15 Lutich went to' his banker, Moore, to inquire about the procedure for collecting on the check. The bank was financing Lutich’s farming enterprises, and Moore frowned upon his becoming heavily obligated in collateral transactions. Moore told him to go to see his lawyer, Feuille-, to see if he could get him off the leases. Moore did not suspect that there was any fraud in the transactions. His interest was in seeing that Lutich’s borrowing ability at the bank was not impaired. Lutich did consult with Feuille, and Feuille’s telephone call of June 17th to Kreeger followed. Moore’s call to Kreeger was made two days before Feuille’s. Kreeger stated in the telephone conversation with Feuille that the Lutich papers would have to be returned to the channels from which he had received them. Lutich then went to see movant in Pecos on June [326]*32622nd. They spent three hours together, and movant had Lutich to his home for lunch. Lutich told movant of his problem with the bank, and asked for his help in getting his paper back. Movant called Moore from Pecos to El Paso, and tried to reassure him that Lutich was safe in signing the paper as movant “was going to be primarily liable for the leasing of the equipment.” After failing to change the banker’s mind, two typewritten letters dated June 22, 1961, were prepared for Lutich’s signature, one addressed to Bob Graham of Leasing, Inc. and the other to Harold Orr of Superior Manufacturing Company, asking that the tank paper be returned to Lutich as he had decided to do his financing in another way. Each one of the letters acknowledged that the tanks had been delivered and were satisfactory. When movant and Lutich parted, movant remarked that he had given Lutich “more time than he would Harry Truman.” An interoffice memorandum dated July 7, 1961, found in movant’s files in the possession of the trustee in bankruptcy, from movant’s office manager to movant, stated that Lutich had told him the night before “that he would keep things in good shape until something could be worked out.” The paper was finally returned to Lutich in October, 1961, with a letter of transmittal on the letterhead of Billie Sol Estes Enterprises and purporting to be signed by movant, which contained the statement, “These contracts are being returned to you as they were not used.”
The conclusion as to whether newly discovered evidence would likely produce a different result on a new trial must be reached by an evaluation of such evidence, not just in and of itself on a unit or a cumulative basis, but in the light of the entire record made in the trial on the merits and in the hearing of the motion for new trial. When the alleged newly discovered evidence is so reckoned up, it fails to meet the standard required for granting a new trial.
Even if the Court were to accept movant’s theory that the evidence of the telephone calls and the letter goes to the extent of showing knowledge of Kreeger of the non-existence of the security from the time Walter E. Heller & Co. started purchasing tank paper, only that company’s transactions would be eliminated.16 There were nine other finance [327]*327companies and over a hundred mortgagors and lessors. It would not follow that the mere fact that a jury was convinced that one or more of the finance companies had knowledge of the fictitious nature of the security would make them ignore the many individuals who were enticed to obligate themselves to an extent that would wipe out the life’s savings of the most prosperous of farmers. It would be hard to conceive how a jury could conclude that a mortgagor or lessee like J. C. Williamson, for instance, signed papers obligating himself for a large sum of money with full knowledge that the security was non-existent. Such a conclusion would be inconsistent with the fact that he tried to make a thorough investigation, not just alone, but with the personal help of his C.P.A., before deciding to go into the tank transactions. The jury could believe that all the finance companies were in with movant on the scheme, and yet be more than justified in convicting on account of the swindling of any one or more of the mortgagors or lessees. This situation brings the question within the rule announced in Reno v. United States, supra, where the Court said:
“ * * * Even assuming that Wright never transferred the money to appellant, appellant would not be exonerated, since the affidavits themselves establish that Wright received the money as appellant’s agent and since receipt of the money was only one of several overt acts comprised in the conspiracy. And even expunging Wright’s testimony in its entirety, there was an abundance of other evidence which fully established appellant’s guilt.” 340 F.2d at p. 309.
There is even less merit to movant’s argument under the view the Court takes of what the facts are in this connection. Feuille’s conversation with Kreeger was limited to the George Lutich transactions. A consideration of the conversation from the standpoint of Kreeger is necessary in determining the extent of knowledge imputed to him of even the Lutich transactions alone.17 Lutich’s banker had called him two days before. He mentioned only lack of consideration, and did not remotely suggest anything about fraud or non-delivery of the tanks. Kreeger then got the call from a man he did not know, who said Lutich would contest his obligation on the paper for lack of consideration, and who offered the opinion that the transaction was fraudulent because Lutich had not received delivery of the tanks and probably [328]*328would not get them. To offset this statement of opinion or suspicion about the nondelivery of the tanks, Kreeger had before him at that time the signed statement of Lutich that the tanks had been delivered. It would be stretching it to say that such a conversation put Kreeger on notice of the non-existence of the tanks in the Lütich transaction; but there was nothing whatever about the statements made that imputed knowledge that the security in all the other transactions was likewise non-existent. There is nothing unusual about having some dispute over a few items where many similar transactions are being purchased, but that does not necessarily mean that all the apples are bad. If it were otherwise, it would be almost impossible to assemble a block of oil leases, for it frequently happens that there is a question about the validity of the title to one of the proposed component tracts when the titles to all of the rest are acceptable. The mere fact that the assembler of the block is notified that a deed to one small tract is forged does not mean that he is on notice that there is a question about the title to all the other unrelated tracts. So it was here. Kreeger got notice that there was a dispute over the legality of Lutich’s obligation under his tank papers. He could and did send them back without being put in the position of having knowledge that all other tank transactions were likewise tainted.
The claim based on the letter of December 12, 1961, has no merit either. The mention of “our previous phone conversations” obviously refers to ones between Kreeger and Graham, the parties to the letter, and not to the one between Kreeger and Williamson, as contended by movant. The postscript, “Per Williamson’s request he wants the documentation he signed sent back to him”, does not indicate whether the request came to Kreeger in the telephone conversation between him and Williamson, or in some other manner such as being relayed through Graham’s conversations with Kreeger. There is certainly nothing about the letter that would verify or indicate that Kreeger used the words, “something fishy”, in his conversation with Williamson. In addition to being subject to all the other weaknesses already pointed out, the value of this item is seriously diminished by the time factor. The telephone conversation with Williamson occurred after Kreeger had been buying tank paper for his company for about seven months. The end for movant’s enterprises was fast approaching. Kreeger could have had knowledge at that late date that something was fishy, and have been acting in good faith in purchasing the tank paper during the preceding months.18
Movant argues that the judgment in favor of the Barnes group in the case at Pecos is conclusive on the effect that this alleged newly discovered evidence would have in his criminal ease. Only excerpts from the record in the Pecos case were offered on this hearing; but there are several obvious reasons why movant’s contention is unsound. The parties and the issues are not the same in the two cases. The Pecos case involved only one finance company, five mortgagors or lessees, and a small number of tank transactions. Even if it were conceded in the criminal case that all of the parties in the civil suit had the knowledge contended by movant, there would still be many more victims of the scheme to defraud left in the criminal case entirely unaffected by that knowledge.
The movant further claims that the length of the jury’s deliberations and their difficulty in arriving at a verdict show that it would not take much to tip the scales in his favor. From the record of the reports and the requests the [329]*329jury sent to the court during their deliberations, it is evident that whatever difficulty they were having was due to a lack of understanding of the charge on the part of some of them. There is nothing to indicate that the only thing standing between movant and an acquittal on all counts was a determination of the question of knowledge on the part of Walter E. Heller & Co. of the non-existence of the tanks.
This question of the probability of a different result on a new trial is seen in its true perspective when movant’s testimony on this trial and the developments in connection therewith are considered. The movant did not testify in the trial of the criminal case. He raised the question of knowledge of the nonexistence of the tanks through the testimony of two of his former private pilots, Lewsader and Hartman. Lewsader was also contract pilot for Superior Manufacturing Company during the heyday of the tank transactions. He admitted flying boxes of plates, each bearing a serial number of a non-existent tank, to various locations for Superior and movant, and he knew plates were being changed on tanks owned by movant. Hartman also admitted such knowledge. He was further involved with movant in a scheme to manipulate cotton allotments of landowners in other .states so that they could be improperly acquired and used by movant on his irrigated farms in the Pecos area. The combined effect of the testimony of those two witnesses was that one or the other of them was present when mention was made in the presence of each of the finance companies, and some of the mortgagors and lessees, that the tanks were non-existent. The testimony they gave in that trial corroborated movant’s story given in this hearing about meeting Kreeger in person on two occasions and discussing the nonexistence of the tanks with him. The movant, apparently recognizing that the testimony of his two implicated confederates would be inadequate, through his counsel and his own testimony insisted that he would clinch the point by being a witness for himself on a new trial. He took the witness stand in this hearing to give the Court the benefit of what his testimony would be. He said that he discussed the non-existence of the tanks with Kreeger in two long distance telephone conversations in the first half of 1961, and in two personal meetings with him in May, 1961. Kreeger had testified on the trial of the criminal case that he made one trip to Texas in 1961 to acquaint himself generally with the type of farming in far West Texas and the general economy of that area, as his company had no background for passing on the new type of financing that was developing from farming on irrigated land fertilized with anhydrous ammonia. He gave a detailed itinerary of that trip that lasted about a week and took him from El Paso to Amarillo. He said that he and another representative of his company landed in El Paso on the night of May 23, 1961, rented a car and stayed all night there; that they went to Pecos on the afternoon of the next day and stayed there the night of May 24th; that they went from there to Seminole, to Plainview, to Amarillo, with stops in between. He mentioned going into the coffee shop at the Hilton Hotel while in Plainview. On this hearing, movant testified that Kreeger came to his home in Pecos by appointment around six o’clock on the morning of May 24th, and conferred with him about an hour; that they met again by appointment a day or two later in the coffee shop of the Hilton Hotel in Plainview for further talk about tank transactions; that on each occasion they discussed in detail the plan of the tank transactions, including the fact that the tanks would be fictitious. Hartman testified on the criminal trial that he was present at the conference in Pecos.19 Lewsader said on that trial that he saw movant and Kreeger together in the cof[330]*330fee shop in the Hilton Hotel in Plainview. It was proved beyond any question that all of this testimony was perjury in the raw. The flight log of movant’s private plane showed that he and his entire family left Pecos on that plane at 10:15 A.M. on May 24th and went to Dallas, where they took a Braniff plane to Washington, D. C. The hotel records established that they stayed there the entire week. A car rental contract signed at the El Paso airport showed that Kreeger and his companion flew into El Paso around 9:00 P.M. on May 23rd. Their hotel bills showed that they stayed all night in El Paso. Harry Moore testified Kreeger was in his office on the morning of May 24th. That was confirmed by a letter written on June 6, 1961, to Moore by Kreeger after his return to Chicago, which referred to their meeting on the morning of May 24th. A mercantile store receipt showed that Kreeger bought a tape for his dictating machine in El Paso on May 24th. Pecos and El Paso are about two hundred miles apart, and are in different time zones. When movant’s plane left Pecos at 10:15 A.M., C.S.T., it was 9:15 A.M., M.S.T., in El Paso. It is obvious that Kreeger could not have been in El Paso during banking hours or during store business hours on the morning of May 24-th and also have been in Pecos for the conference, as movant and Hartman swore he was. It is just as true that movant could not have been in Washington for a week beginning with May 2Hh, and have had the meeting with Kreeger in the Hilton Hotel coffee shop on May 25th or 26th, as movant and Lewsader said he did. These were lies from the whole cloth, trumped up by movant to try to fit into Kreeger’s intinerary. They are the foundation for the whole claim that Kreeger had knowledge of the non-existence of the security. It now appears that movant also tried to bribe a witness to help him out on this defense. These facts would leave no question in a jury’s mind about the fallacy of movant’s claim as to Kreeger’s knowledge, and about his guilt on the counts on which he was convicted. Innocent men do not have to resort to perjury and subornation of perjury.
The other reason why the motion should be denied is that the defense in the criminal case failed to use due diligence to discover the evidence in question. The bill of particulars put the defense on notice that George Lutich and J. C. Williamson were among the parties contemplated by the terms “mortgagors” and “lessors” used in the indictment. Movant was not interrogated by his counsel about the transactions involving George Lutich at any state of the preparation for the criminal trial. The movant did not give them the information he had about them. Each of the transactions was such as to make a lasting impression on movant. The problem with Lutich was serious enough that he gave him “more time than he would Harry Truman.” The inter-office communication of July 6, 1961, indicates that he was having his office manager keep him posted on Lutich’s attitude. He not only had a man whose banker was crowding him to get his paper back, but he had one who was holding checks for over twenty thousand dollars on which movant had stopped payment. Any' discussion between counsel and movant would have led to an interview with Lutich and Moore, and in turn with Feuille. Counsel for movant say that Moore might have been reluctant to talk to them on account of the fact that he was trustee in bankruptcy in the Billie Sol Estes matter, and further that the connection of Feuille’s firm with some of the civil litigation involving the tank paper would have made him hesitant to tell about his telephone conversation with Kreeger. Both Moore and Feuille are honest, reputable men. Their telephone conversations with Kreeger were not privileged. If Moore had been asked about his knowledge of the Lutich transaction, he would have disclosed it to counsel for movant. It was well documented by memoranda in his file. If Feuille had been asked by counsel for defendant about his call, they would have got the information about it. If movant had [331]*331told his counsel of his long distance telephone conversation with Moore in Lutich’s presence, that would have been another lead to an interview with Moore about the Lutich transaction, and in turn to an inquiry of Feuille about his call. The Williamson transaction was likewise important enough to movant for him to remember it. He needed to get Williamson on some more paper. Movant claims Williamson called Kreeger about the possibility of getting financing. Movant was present during all of the conversation, and listened in on some of it. If Williamson gave a correct recollection of the conversation, as movant claims, then movant knew that Kreeger would not accept the Williamson paper he had, and that it would be returned. It seems only reasonable that if movant had made a full disclosure to his counsel of his knowledge of the Williamson transaction, that they would have asked Kreeger on cross-examination about the existence of any letters he might have written in connection with the return of that paper. When the question of due diligence is presented in connection with a motion for new trial based on newly discovered evidence, the court is not limited to a consideration of the knowledge and conduct of defense counsel alone. That question is decided on the basis of the composite knowledge and diligence of both the accused and his counsel. When the two are put together in this case, the conclusion is that the defense failed to úse due diligence.
Counsel for movant seek to excuse their lack of inquiry into the Lutich and Williamson transactions by saying that they looked on the list in the bill of particulars only for those individuals whose names were connected with the letters described in the various counts. That is no justification. They knew that the persons alleged to have been defrauded by the scheme were not limited to those named in connection with the letters which figured in the misuse of the mails. They did think enough of the list to ask their witness Hartman about his acquaintanceship with many of the persons named on it, including Williamson and Lutich, but that was the extent of their interrogation of anybody, in court or out, about the transactions involving those mortgagors and lessees. Due diligence required more.
The argument is made that the government and the movant stand on the same footing in this case when it comes to judging due diligence in the investigation ; and that if the government was diligent, the movant was too. That contention overlooks the advantage of the superior knowledge of the movant, himself. The government’s investigation was not limited to tank transactions. The “Billie Sol Estes Enterprises” covered a wide field of endeavor, scattered over a large geographical area. Government grain storage contracts and illegal cotton allotments were involved. There were, therefore, many facets of the investigation. It is only reasonable that many items of evidence, both large and small, might have been susceptible on their surface of more than one interpretation. The very nature of the matters involved required that the government make whatever investigation was necessary to determine the correct meaning. The movant knew most of those things without investigation. He certainly knew the significance of the more important transactions like those involving Lutich and Williamson.
The movant claims that the testimony of Fred Morton brings this case within the rule laid down in Mesarosh v. United States, 352 U.S. 1, 77 S.Ct. 1, 1 L.Ed.2d 1 (1956). The question is not close enough to require much discussion. Morton was an Assistant United Státes Attorney who actively participated in the prosecution of the criminal case. He was in the private practice of the law when this hearing was held. In this proceeding, he testified that during the criminal trial he had some doubts about Kreeger’s testimony that he had no knowledge of the non-existence of the [332]*332tanks.20 He said that such doubt was due to two things: (1) the inherent difficulty of proving knowledge of a negative thing; and (2) the fact that movant did actually have some tanks in his possession caused him to wonder whether some of them might have been ones covered by the tank paper. This witness was not in the courtroom at any time during this hearing except when he was giving testimony, and he therefore had no opportunity to observe the demeanor of the witnesses. Questions propounded to him by counsel for movant were based on an interpretation of the testimony of Feuille with which the Court does not agree. Questions asked him by counsel for movant also failed to distinguish between an incorrect statement and a deliberate falsehood by Kreeger. When his testimony is read as a whole, it shows that by the end of the trial he was convinced that Kreeger was telling the truth.21 The following testi[333]*333mony summarizing his feelings about Kreeger as a witness clearly shows that this case is distinguishable from Mesarosh:
“MR. JOHN COFER: No I don’t want to argue about it. I think he was arguing with me. I am asking you about your opinion.
“A Let me state it this way. If I were Solicitor General I would not confess error in the Supreme Court because I would have such a doubt about Mr. Kreeger’s credibility that it would be against my conscience as a representative of the Sovereign to allow the conviction to stand.”
, ... . . . . Ihe Court did not get the impression ?. ,. , . that the doubt this witness mentioned m , his testimony was ever substantial or .. . „ . , , . reasonable. A fair and honest prosecu- , . , , ,. , . , tor ought to be skeptical about witnesses offered by him, m order to be ever alert to any developments that might affect the integrity of the trial. The mam , ., . source of this doubt, weak as it was, has , . . . ’ . . . ’ „ een c eare up m is earing y e testimony of movant about the some 1500 an s m is possession. e says a they were his own, and that all the ones listed as security on the tank paper were fictitious. There need be no worry now about the possibility that at least some of the tanks listed on the paper might have been actually manufactured and delivered to movant.
It is not an unusual situation for the recollections of witnesses to differ. There would be no need to provide for triers of fact if there were no conflicts in evidence. An accused is entitled to demand and receive only a fair trial, not a perfect one. United States ex rel. Weber v. Ragen, 7 Cir., 176 F.2d 579, 586 (1949); State v. Smith, 119 W.Va. 347, 193 S.E. 573 (1937); State v. Case, 247 Iowa 1019, 75 N.W.2d 233, 240 (1956). That means that he has no gro1und to comPlam where hls trial can" not withstand a post-conviction lint pick-Process trying to make constitutional questions out of small imperfections that could not Possibly have affected the result The trial of the crimmal case under consideration here had no more conflicts, inconsistencies and mis- , , ,, ,, takes m the testimony than would nor- , , , . „ ., , ,, mally be expected m one of its length , „ , ... and complexity. There was nothing , , ,, , ,, , , about them, however, that passed the „Une of to]erable imperfection„ and fell ^ „the fidd of fundamental unfair. ness". 22 The movant had a fair trial - . , , under the distinguished judge who prei . ,. . . , XT . sided m his criminal case. No ímproper advantage was taken of movant by the prosecution. The factfl do not raise any question about the integrity of the crim^,jaj
Judgment will be entered in the civil action denying and dismissing the petition to vacate the conviction. An order wil1 be entered in the criminal case overruling the motion for new trial for newly discovered evidence.
This opinion will serve as findings of fact and conclusions of law.
. The following occurred during the oral argument of Mr. John Cofer, chief counsel for movant:
“THE COURT: Let me ask you a question here. Right at the outset, your son, Mr. Hume Cofer, said in effect that he was satisfied from the evidence that the government had no knowledge of the Feuille telephone conversation at the time of this trial. He was also satisfied, or at least he anticipated that it would probably be found that they did not fail to use diligence in their investigation, any more than that you failed to use diligence. Now are you in agreement with him on that?
“MR. JOHN COFER: Yes, sir, I am in agreement.
“THE COURT: All right, go ahead.
“MR. JOHN COFER: I will say, Your Honor, when the petition was drawn, it was drawn because of the conversation with Mr. Fred Morton, which seems to be unequivocal, when he said that when they used Mr. Kreeger that he had doubts about whether he was telling the truth or not.
“THE COURT: Of course, the prosecutor is supposed to be a little bit skeptical, isn’t he?
“MR. JOHN COFER: Yes, sir.
“THE COURT: He is not much good as a public servant unless he is skeptical about everything.
“MR. JOHN COFER: Yes, sir, but the prosecutor is supposed to represent not only the government in securing a conviction, all fairly and impartially, but he is also supposed to look after the principles, so if he had a doubt, he ought to say to the attorney for the defendant, T am using this witness because the government feels justified in doing it, but I have some doubts on it.’
“THE COURT: It would depend on the extent of his doubt.
“MR. JOHN COFER: I think that’s right. But at that time, when this petition was drawn — you can’t -delay these matters. You have got to draw them immediately.
“THE COURT: Well, as I understand it now, after hearing the testimony, you are satisfied the prosecution had no actual knowledge of this transaction?
“MR. JOHN COFER: That’s right.
“THE COURT: All right. Well, I wanted to be sure that matter was set-tied.
“MR. JOHN COFER: Of course, they don’t have to have actual knowledge, if they are negligent, and I think the Court would he justified in saying they were not guilty of negligence.
“THE COURT: Well, now, that was the second point I had in mind. As I understand it from Mr. Hume Cofer’s argument, he thought it was down to just tiie question of who had the better opportunity, or superior knowledge about it, and—
“MR. JOHN COFER: —I think you misunderstand—
“THE COURT: —And that he passed up the question of actual knowledge or negligence. Now that was the reason I was trying to get at this.
“MR. JOHN COFER: Well, I will say now that I don’t think the Court should find negligence.
“THE COURT: All right.
“MR. JOHN COFER: I think that what Mr. Hume Cofer was saying was if you find that the government was not negligent and was diligent, then you simply have to find that we were diligent, because they had the better opportunity.
“THE COURT: Well, he didn’t put any ‘ifs’ about it. Of course, he claimed I ought to find you all were diligent too; but I understand his argument to assume that the evidence shows that the government was diligent, so I was just trying to get down to the real issues.
“MR. JOHN COFER: I will say, Your Honor, that I don’t think the evidence justifies relief under 2255. That ought to cover the whole thing. (Emphasis supplied).
“THE COURT: All right, go ahead.”
Related
Cite This Page — Counsel Stack
254 F. Supp. 314, 1966 U.S. Dist. LEXIS 8317, Counsel Stack Legal Research, https://law.counselstack.com/opinion/estes-v-united-states-txwd-1966.