United States v. Michael A. Rush

666 F.2d 10, 1981 U.S. App. LEXIS 18999

• Court: Court of Appeals for the Second Circuit
• Decided: March 20, 1981
• Docket: 889, Docket 80-1446
• Status: Published

Opinions

PER CURIAM:

Appellant Michael Rush was charged with a single count of conspiracy to import marijuana into the United States with intent to distribute it in violation of 21 U.S.C. § 841(a)(1) (1976). He was tried before T. F. Gilroy Daly, District Judge, and a jury. The jury returned a verdict of guilty. From the judgment entered thereon, appellant has taken this appeal. We affirm.

I.

The government claimed, and the jury found, that appellant, a medical doctor, lent a total of $25,000 in two transactions to his co-conspirators to finance the purchases of marijuana from sources in the Bahamas. Appellant’s co-conspirators repaid the principal amount of the loan and $15,000 in interest. The proceeds of the loan were used to import marijuana on at least three occasions. The marijuana was distributed in Florida.

Appellant contended at trial that, at the time he made the loan, he had no knowledge of the use to which the loan proceeds were to be put. On appeal, appellant conceded that he had such knowledge, but asserted three further contentions. The questions before us on appeal are (1) whether, even assuming there was probative evidence of appellant’s guilty knowledge, he properly could be found to have become a “part” of the conspiracy; (2) whether the jury instructions were proper; and (3) whether the district court erred in refusing to give an alternate reading of the trial transcript to the jury or in refusing to disclose to the jury that there was a question as to the accuracy of the transcript. We shall discuss each of these questions in turn.

II.

Appellant’s argument that he could not be convicted even though he was “fully aware of the scope and object of the conspiracy” is neither novel nor compelling.

Appellant argues that he never became a “part” of the conspiracy because, under the conspiratorial agreement, he was not to share in the proceeds of the unlawful venture and because his loans to the co-conspirators were fully secured. These facts are said to establish that appellant had only the intent of a lender to profit from a loan transaction and lacked the intent of a criminal to enter into or to effectuate an agreement to violate the laws of the United States. In support of this analysis, appellant relies upon United States v. Falcone, 109 F.2d 579 (2 Cir. 1940) (L. Hand, J.), aff’d, 311 U.S. 205 (1941). The Court held in Falcone that a jobber in the sugar trade could not be found guilty of conspiring to manufacture illegal liquor merely because he knew that the wholesaler to whom he sold the sugar in turn would deliver it to illegal distillers. This Court on several occasions has stressed that Falcone should be limited “to its strict facts — the case of a supplier of goods, innocent in themselves, who does nothing but sell those goods to a purchaser who, to the supplier’s knowledge, intends to and does use them in the furtherance of an illegal conspiracy.” United States v. Tramaglino, 197 F.2d 928, 930 (2 Cir.), cert. denied, 344 U.S. 864 (1952); see United States v. Piampiano, 271 F.2d 273, 274-75 (2 Cir. 1959). See also Direct Sales Co. v. United States, 319 U.S. 703, 711, 713 (1943).

Falcone is not relevant here at all. Rush was not a supplier of goods or commodities which were to be utilized in an illegal venture; he supplied the cash which made the illegal venture possible.¹ Rush was a podiatrist and a partner of one Leroy Myers in the Emerald Hills Flying Service. He was not a money lender. He became one only to finance this venture at an exorbitant and usurious profit, knowing full well the source of the proceeds. He acted in a secretive and clandestine fashion, obtaining first a mortgage note reflecting a 10% rate of interest. That note was recorded. A second mortgage note for $10,000 required payment of $20,000 in five days. For obvious reasons that note was never filed. In United States v. Piampiano, supra, a fruit and vegetable dealer departed from his usual business to supply sugar to an illicit distillery. This Court found Falcone inapplicable since the defendant deviated from his usual line of business to deal in a commodity almost entirely new to him in a manner inconsistent with his previous business transactions. United States v. Piampiano, supra, 271 F.2d at 274. Rush here embarked upon a new line of business not only with full knowledge of its illicit nature but through a clandestine method devised to protect him from its consequences.²

We hold that there was sufficient evidence from which a properly instructed jury ' could find that appellant knew the borrowers’ “intended illegal use”, Direct Sales Co. v. United States, supra, 319 U.S. at 711 and that by making the loans he “intend[ed] to further, promote and cooperate in” their scheme. Id. “This intent, when given effect by an overt act, is the gist of conspiracy.” Id. Appellant’s attempt to distinguish the instant case on the ground that he had no “stake” in the illegal enterprise is unpersuasive. The role of appellant here and that of Direct Sales Co. were equivalent in their encouragement of illegal activity on the part of those with whom they dealt.

III.

Appellant further claims that the district court committed reversible error in refusing to charge the jury in accordance with appellant’s proposed instruction. That charge would have required the jury to apply the “stake in the interest” test set forth in United States v. Falcone, supra, 109 F.2d at 581, to determine whether appellant was a participant in the conspiracy.

Although the trial court is not required to use the “stake” language, United States v. Salcido-Medina, 483 F.2d 162, 164-65 (9 Cir.), cert. denied, 414 U.S. 1070 (1973), the court should instruct the jury that, in order to convict, it must find that the defendant intended to further or promote the illicit scheme.³ Here, the district court’s charge, although colloquial, did contain the necessary elements: agreement, common objecfive, some act in furtherance of the objective, and knowledge. We hold that the instruction was adequate and comprehensible to the jury. We do wish to emphasize once again, however, the importance in this critical area of adhering to judicially approved charges that are carefully drawn to aid the jury in focusing on critical issues.⁴

IV.

The final claim on appeal concerns the reading to the jury of a portion of the trial transcript. When the jury first requested that portions of testimony be read, the judge brought the parties, their counsel, and the court reporter into his chambers to review the portions to be read. The reporter read a statement of one of the co-conspirators recalling a conversation with another co-conspirator about drugs as “... I don’t remember exactly whether we said it . . . . ” (emphasis added). The next day the judge informed defense counsel, out of hearing of the jury, that the court reporter had misread his notes and that the correct words were “... T don’t remember exactly when we said it . ... ” (emphasis added). Over objection, the record was read to the jury in its corrected form. The judge refused to instruct the jury that a difference had arisen and that the jury should rely on its own recollection.

We reject appellant’s attempt to raise to the level of reversible error the trial judge’s decision, after consultation with the court reporter and defense counsel, to follow the reporter’s unequivocal interpretation of his own notes. “The transcript in any case certified by the reporter shall be deemed prima facie a correct statement of the testimony taken and proceedings had,” 28 U.S.C. § 753(b) (1976). It is plain that error may occur in compiling a transcript no matter how expert or experienced the reporter. In that instance it is appropriate for him to review the tapes and determine if indeed they were mistranscribed. When as here the judge and opposing counsel are apprised of the situation, the determination of the judge on this question of fact normally should terminate the issue.

In any event, we cannot agree with our dissenting brother that this testimony was that crucial. There was ample other testimony on the direct examination of both Hall and Myers that Rush was aware of the illegal purpose for which the money was to be used — “the doper business”. There also was testimony that Mrs. Rush was upset and was anxious that her husband withdraw from the venture. Moreover, Rush’s unsuccessful attempt to masquerade his participation as a legitimate business transaction utilizing mortgage notes prepared by his cousin, a lawyer, emphasized his effort to escape liability and thus his guilty knowledge. In fact in his reply brief Rush concedes that he knew the money was to be utilized for the purpose of purchasing marijuana in the Bahamas.

In fact, had the word used by Hall on direct been “whether” rather than “when,” it is not understandable why counsel for the appellant would not have seized upon the issue on cross examination. He did not. The main thrust of Hall’s cross examination was his motivation for testifying in view of his cooperation with the government. It is further significant that the disputed testimony referred to a conversation which took place after the first successful trip to the Bahamas. Since there was undisputed testimony that Rush knew the purpose of the loan prior to the trip, whether or not the issue again was discussed, is not crucial to the government’s case. Hall did testify that prior to the loan he told Rush that the money was to be used to purchase marijuana. He also testified that after Hall’s arrest Rush and he had agreed that Hall would falsely tell the authorities that $40,-000 was borrowed to purchase a diesel truck, thus furnishing more proof of appellant’s awareness.

We find that the evidence fully supports the conviction and that there was no reversible error. The mandate shall issue forthwith.

Affirmed.

1 . Money furnished to facilitate violations of the federal narcotics laws becomes forfeit to the United States. 21 U.S.C. § 881(a)(6) (1976).

2 . The surreptitious nature of the loans was evidenced not only by Rush’s omission to record the usurious mortgage note but also by his method of withdrawal and replenishment from his bank account. He withdrew a total of $20,-000 net to finance the loans, and, although his profits amounted to $40,000, he redeposited only $10,000 so as to show no additional income.

3 . See, e. g., Direct Sales Co. v. United States, 319 U.S. 703, 711 (1943); United States v. Provenzano, 615 F.2d 37, 45 (2 Cir.), cert. denied, 446 U.S. 953 (1980); United States v. Guillette, 547 F.2d 743, 750-51 (2 Cir.), cert. denied, 434 U.S. 839 (1976); United States v. Cirillo, 499 F.2d 872, 883 (2 Cir.), cert. denied, 419 U.S. 1056 (1974); and Model Penal Code § 5.Ó3 (Tent. Draft No. 10, 1960).

4 . Peymann v. Perini Corp., 507 F.2d 1318, 1324 n.2 (1 Cir. 1974), cert. denied, 421 U.S. 914, 95 S.Ct. 1572, 43 L.Ed.2d 780 (1975); United States v. Montijo, 424 F.2d 207, 208 (1 Cir.), cert. denied, 400 U.S. 836, 91 S.Ct. 74, 27 L.Ed.2d 69 (1970); McMillen v. United States, 386 F.2d 29, 32 (1 Cir. 1967), cert. denied, 390 U.S. 1031, 88 S.Ct. 1424, 20 L.Ed.2d 288 (1968); Schlinsky v. United States, 379 F.2d 735, 740 n.3 (1 Cir.), cert. denied, 389 U.S. 920, 88 S.Ct. 236, 19 L.Ed.2d 265 (1967).