United States v. Glenn W. McMurray R. Glade Whiting, and Robert H. Wilstead, Defendants

656 F.2d 540, 5 Fed. R. Serv. 972, 1980 U.S. App. LEXIS 19924
CourtCourt of Appeals for the Tenth Circuit
DecidedMarch 5, 1980
Docket78-1928 to 78-1930
StatusPublished
Cited by11 cases

This text of 656 F.2d 540 (United States v. Glenn W. McMurray R. Glade Whiting, and Robert H. Wilstead, Defendants) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Glenn W. McMurray R. Glade Whiting, and Robert H. Wilstead, Defendants, 656 F.2d 540, 5 Fed. R. Serv. 972, 1980 U.S. App. LEXIS 19924 (10th Cir. 1980).

Opinions

WILLIAM E. DOYLE, Circuit Judge.

On February 8,1977, in the United States District Court for the District of Utah, an indictment was returned against Glenn W. McMurray, R. Glade Whiting, Donn E. Cas-sity and Robert H. Wilstead. The indictment alleged that the Small Business Administration (SBA), an agency of the United States, required to administer the Small Business Investment Act of 1958 which codified a previous Act, 15 U.S.C. §§ 661-696, was defrauded by the defendants.

Appellants McMurray, Whiting and Wil-stead were convicted following a trial (in August, 1978) to a jury, the Honorable William Juergens presiding. They were found guilty on one conspiracy count and additional substantive counts for making false entries in books and accounts. Counts V and VI were dismissed during the trial.

It is important to mention that McMur-ray and Whiting are described throughout the case, as far as the conspiracy is concerned, as “hub” defendants. On the other hand, Wilstead, for purposes of the conspiracy count, was a so-called “spoke” defendant. This appeal by McMurray and Whiting obtains to the contention that the conspiracy is barred by the Fifth Amendment doctrine of double jeopardy.

Wilstead, McMurray and Whiting assert various other errors with respect to the case which is here being reviewed, which case is No. Cr.-77-ll in the United States District Court for the District of Utah.

The Utah Capital Corporation (UCC) was a small business investment company (SBIC) licensed by the SBA pursuant to 15 U.S.C. § 681. Glenn W. McMurray, it was alleged in the indictment, was the president and chairman of the board of directors of Utah Capital Corporation; Donn E. Cassity was legal counsel, and R. Glade Whiting was the vice president and a director of Utah Capital Corporation.

The SBA sought to make available to small businesses private funds. At the same time, it sought to insure the private financial interest of the owners of small business investment companies such as UCC. To achieve the purposes, so it was further alleged, it guaranteed payments on debentures issued by SBICs subject to the restriction that the total amount of debentures guaranteed at any time from an SBIC was not to exceed 200 percent of the combined private paid-in capital and paid-in surplus of the company.

Following the grand jury investigation, four indictments were returned charging a total of 11 defendants. Three of these, McMurray, Whiting and Cassity, who have been referred to here as “hub” defendants, were charged in each of the four indictments. Wilstead and the other seven defendants, all of whom have been referred to as “spoke” participants in the conspiracy cases, were charged in one indictment each. The several indictments describe distinct transactions, conspiracies to defraud the government, and substantive offenses involving false entries in the books and records of the Utah Capital Corporation.

In each indictment, a group was charged with the making and receiving of distinct sham investments in UCC. The monies [543]*543were not retained by UCC, but were immediately returned to the contributing defendants in the form of sham loans to certain business entities. The sham investment money was used for the purpose of misleading the SBA as to the capital or the assets of the SBIC, Utah Capital Corporation, here referred to as UCC. In furtherance of the conspiracy, false entries were made in the books and records of UCC showing purported assets and facially legitimate loans.

As a result of the sham capitalization which is described in each of the indictments, UCC qualified for 200 percent of the amount of the capital increase in the form of government-guaranteed loans. Unbeknownst to the government, each of the “spoke” defendants — the “spoke” groups differed in each indictment — would be given accommodation loans as consideration for their participation in this scheme. In the case that we are now reviewing, the one-time defendant was, of course, Wil-stead, and he received an accommodation loan for his services. It is to be noted that the defendants-appellants, McMurray and Whiting, were, as far as the four indictments are concerned, “hub” defendants in that they were the originators of the schemes, and took the initiative in pushing through the independent sham investments with the help of the “spoke” defendants.

The essence of the indictment in this case, as far as the “hub” defendants and principals were concerned, was conspiracy to increase UCC’s paid-in capital and surplus, at least temporarily, in the amount of $725,-000. We are referring, of course, only to the transactions that are described in the indictment in this case. There were other similar transactions described in the other indictments. It was alleged in the indictment in this case that Wilstead provided, on a highly temporary basis, the sum of $725,-000, all of which was used to mislead the SBA.

The above descriptions have pertained for the most part to Utah case No. Cr.-77-ll. However, a case involving a separate indictment was tried two months prior to the trial in Cr.-77-ll. In Cr.-76-126, the allegations are quite similar to those that are found in the case at bar. The “hub” defendants and principals were charged with conspiracy to fictitiously increase UCC’s paid-in capital and surplus in an amount different than that in the case at bar. The amount in that instance was $550,000. This amount was furnished by different “spoke” defendants. It is to be recalled that Wil-stead was the sole provider in the case that is before us, whereas in Cr.-76-126, the $550,000 was provided by defendants Lind-quist, Nemelka and Solomon. However, the money was reflected on UCC’s books as an investment by Robert Solomon. The $550,000 became part of a larger $2,185,000 bank deposit on May 21, 1973, and a certified letter was presented to the SBA showing this deposit. Within a short time, however, the $550,000 was withdrawn. The funds in Cr-76-126 were returned to Solomon and Lindquist through a series of bogus loans made to sham corporations which were controlled by Solomon, Lindquist, and Nemelka.

The same procedure was followed in the case at bar with the exception that Wil-stead was the cooperating “spoke” defendant. His $725,000 was deposited and almost immediately withdrawn from UCC’s control and returned to him through the use of sham loans to corporations controlled by him. Thereafter, Wilstead was compensated by receiving other payoff loans from UCC.

We have detailed, to some degree at least, the circumstances in these two cases because as far as the conspiracy in Count I is concerned, it is the position of the appellants McMurray and Whiting that their conviction on the conspiracy count was barred by their having been convicted of a conspiracy count in Cr.-76-126. They say that these transactions, although occurring at different times, were part of one large conspiracy.

What might be described as the Solomon, Nemelka and Lindquist transaction was perpetrated in May 1973. What might be described as the Wilstead transaction involved two applications, the one in May and the one in September. Wilstead furnished $200,000 which was reflected in the May [544]*544application to the SBA.

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Bluebook (online)
656 F.2d 540, 5 Fed. R. Serv. 972, 1980 U.S. App. LEXIS 19924, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-glenn-w-mcmurray-r-glade-whiting-and-robert-h-ca10-1980.