United States v. Robert M. Burton, Peter Balogun, 871 F.2d 1566, 11th Cir. (1989)
United States v. Robert M. Burton, Peter Balogun, 871 F.2d 1566, 11th Cir. (1989)
2d 1566
I. BACKGROUND
2
cover operating expenses. Funds were taken from various MCCAC accounts,
including the Head Start account, to cover the loans. As Executive Director of
MCCAC, Balogun was responsible for authorizing all such disbursements.
8
As early as July 1981, the Department of Health and Human Services (HHS)
became aware of the fact that interagency loans were being made from the
Head Start account to various MCCAC concerns. By September 1981,
MCCAC was informed that the use of federal Head Start funds for such
purposes was strictly prohibited since the loans were not intended to fulfill
permissible objectives of the Head Start program. Additionally, MCCAC was
ordered to restore all missing funds to the Head Start account. HHS' reprimand
went unheeded as the practice of interagency loans continued undaunted.
By October 1982, Babco and G's were on a "cash basis" with most creditors,
making it necessary for all payments to be made in cash or its equivalent. When
bills came due, requisition requests were sent to MCCAC. Then, checks were
written on various MCCAC accounts, including the Head Start account, and
made payable to the order of Robert Burton. Presumably, Burton would cash
the checks and use the proceeds therefrom to pay the creditors.
10
Rather than phase-out the for-profit element of the MCCAC, the MCEDC, in
January, 1983, purchased a third for-profit concern, Tuskegee Wholesale
Grocery (Wholesale), in an effort to raise funds for MCCAC-administered
programs. Unfortunately, ownership of Wholesale exacerbated, rather than
alleviated, the cash-flow problems of the MCEDC, and the interagency loans
continued.
11
Ultimately, the Head Start loans were sufficient only to sustain, and not to
resuscitate, the failing businesses. In 1985, federal funding for the Head Start
program was revoked as a consequence of the repeated interagency loan
abuses. Shortly thereafter, MCEDC, Babco, G's, and Wholesale went bankrupt.
12
Balogun and Burton were indicted in 1987 for embezzlement and conspiracy to
embezzle in connection with the interagency loan activities. Following trial,
Balogun and Burton were convicted on one count of embezzlement and on one
count of conspiracy to embezzle.
II. DISCUSSION
13
On appeal, appellants present four major claims of error. First, appellants claim
that the evidence was insufficient to support their convictions and that they,
1. Embezzlement
15
16
In the present case, count four of the indictment charged Balogun and Burton
with willfully, knowingly, and without authority embezzling and converting to
their own use and the use of others "moneys [sic] of the United States
Department of Health and Human Services and other agencies of the United
States in the amount of approximately Five Thousand Dollars ($5000)."
Evidence introduced by the government showed that on April 14, 1983, a
$5000 check, signed by Balogun and Burton, was issued on the MCCAC-CDC
Membership Drive Fund account to the order of Burton. The testimony at trial
and the requisition request pursuant to which the check was written indicated
that the check proceeds were to be used for the payment of MCEDC's payroll
taxes, an impermissible use of the involved federal funds. Further evidence
showed that Burton cashed the check at the drive-through window of the
Alabama Exchange Bank. Burton testified that after cashing the check, he
purchased either a cashier's check or a money order to send to the I.R.S. for the
payment of MCEDC's payroll taxes; however, he could not recall where he
purchased the check or money order, and no evidence was introduced
indicating that a check or money order had been obtained. Burton asserted that
after he purchased the check or money order, he took it to the MCCAC office
and gave it to a staff member for mailing. An I.R.S. representative testified that
no payment for payroll taxes had been received from MCEDC on or about
April 14, 1983. The jury reasonably could infer that Burton had cashed the
MCCDC check, failed to procure a money order or cashier's check, and,
instead, appropriated the check proceeds to his own use.
17
For several reasons, we conclude that a reasonable jury could find that the
evidence introduced establishes, beyond a reasonable doubt, that Balogun and
Burton willfully and knowingly diverted federal funds from the MCCDC
account to Burton's personal use. First, the evidence indicates that Balogun
authorized and co-signed the involved check with knowledge that the funds
involved could not be used for Burton personally. Second, the evidence shows
that Burton co-signed the check with knowledge that the proceeds thereof could
not be used for his personal benefit. Finally, there was a total absence of any
evidence indicating that a cashier's check or money order had been purchased
by Burton, and there was corroborating testimony of the I.R.S. agent to the
effect that a payment had not been received from MCEDC during the period in
question.
2. Conspiracy to Embezzle
18
Section 371, 18 U.S.C., makes it unlawful for two or more persons to conspire
to commit any offense against the United States or any agency thereof.2 To
sustain a conspiracy conviction under 18 U.S.C. Sec. 371 (1982), there must be
proof of an agreement among two or more persons to accomplish something
that constitutes an offense against the United States and an overt act by one of
them in furtherance of that agreement. United States v. Falcone, 311 U.S. 205,
210, 61 S.Ct. 204, 206, 85 L.Ed. 128 (1940). See also United States v.
Tombrello, 666 F.2d 485, 490 (11th Cir.1982) cert. denied, 456 U.S. 994, 102
S.Ct. 2279, 73 L.Ed.2d 1291 (1982). Secrecy being the essential nature of the
conspiracy, "such an agreement may be proved by circumstantial as well as
direct evidence." United States v. Browning, 723 F.2d 1544, 1546 (11th
Cir.1984). To support a finding that a particular defendant was a member of the
conspiracy, the government must prove "that a conspiracy existed, that [the
defendant] knew of it and that he intended to associate himself with the
objectives [thereof]." United States v. Horton, 646 F.2d 181, 185 (5th Cir.1981)
cert. denied, 454 U.S. 970, 102 S.Ct. 516, 70 L.Ed.2d 388 (1981).
19
In the present case, count one of the indictment charged Balogun and Burton
with willfully and knowingly conspiring and agreeing to violate 18 U.S.C. Sec.
641 by embezzling and converting to their own use and the use of others
monies of agencies of the United States. Specifically, the indictment charged
Balogun and Burton with transferring federal Head Start funds, under the guise
of interagency loans, from the Head Start account to other accounts to operate
Babco, G's, and Wholesale. It further charged that Balogun and Burton issued
checks to Burton on the Head Start account and that Burton, in turn, converted
those checks to cash. Additionally, the indictment enumerated ten overt acts
which were committed in furtherance of the conspiracy. Because the
government only needed to prove one of those acts to sustain the conspiracy
convictions and because we conclude that the government satisfied that burden,
we limit our discussion to one of those acts.
20
The government established that on August 5, 1982, Balogun and Burton issued
a $17,500 check on the Head Start account to the MCCAC-CDC Membership
Fund Drive account. Records maintained by the MCCAC indicated that the
proceeds of the check were to be considered an interagency loan. On that same
date, two checks were written on the MCCAC-CDC Membership Fund Drive
account; one for $1,000 was issued to Burton and, presumably, was intended
for the purchase of "supplies" for G's, Babco, and Wholesale. Evidence showed
that Burton cashed the $1,000 check; however, the evidence did not establish
that Burton used all of the proceeds for the purchase of supplies, giving rise to
an inference that Burton pocketed the excess proceeds.
21
The August 5, 1985, check was only one among several that were written on
the Head Start account, signed by Balogun and Burton, the proceeds of which
were channeled to other MCCAC-administered programs. On several
occasions, funds drawn on the Head Start account were deposited into a
MCCDC or a MCEDC account and, immediately thereafter, checks were
written to Burton on those accounts. The record is devoid of evidence that
Burton used all of the cash proceeds from those checks to pay for expenses of
MCCAC, MCCDC, MCEDC, G's, Babco, or Wholesale.
22
23
Appellants contend that the district court committed reversible error when it
admitted certain testimonial evidence over appellants' objection. Ned Hersman,
an agent with the F.B.I., was permitted to testify regarding the $5000 check that
was made the basis of the embezzlement convictions. Specifically, Agent
Hersman stated that he had gone to the Alabama Exchange Bank and
unsuccessfully had attempted to locate a cancelled cashier's check that had been
issued to the order of the I.R.S., in the amount of $5000 and in exchange for the
proceeds of the MCCDC check, on or within the ten day period following April
12, 1983.
24
25
Appellants argue that the district court abused its discretion when it failed to
grant a new trial on the basis of newly discovered evidence. Following trial,
appellants discovered a $9,235.98 cashier's check, listing G's as remitter, that
had been sent to the I.R.S. on April 5, 1983, and had been negotiated by the
I.R.S. on April 15, 1983. Appellants contend that the check evidences Burton's
payment of MCEDC's payroll taxes and directly contradicts the I.R.S. agent's
testimony that no payment had been received from MCEDC on or about April
15, 1983.
26
To support the grant of a new trial on the basis of newly discovered evidence, a
defendant must show that: (1) the evidence is newly discovered and was
unavailable at the time of trial; (2) the evidence is material and not merely
impeaching or cumulative; (3) the evidence is such that it probably would
produce an acquittal; and (4) the failure to discover such evidence was not due
to a lack of diligence on the part of the defendant. United States v. Sjeklocha,
843 F.2d 485, 487 (11th Cir.1988); United States v. Williams, 816 F.2d 1527,
1530 (11th Cir.1987); Bentley v. United States, 701 F.2d 897, 898 (11th
Cir.1983). Appellants did not satisfy their burden for two reasons. First, they
failed to establish that the evidence was "unavailable" at the time of trial and
that their failure to discover the evidence sooner was not due to their own lack
of diligence. Second, the evidence is not such that it would produce an
acquittal. In fact, it is doubtful that the evidence is in any way probative of
Burton's alleged payment of MCEDC's taxes. The "newly discovered" check
was purchased and sent by G's, not MCEDC, was for $9,235.98, not $5,000,
and was dated and sent to the I.R.S. nine days prior to the date on which Burton
allegedly purchased the money order or cashier's check and allegedly sent the
check to the I.R.S.
D. Duplicitous Indictment
27
Appellants finally contend that the district court erred as a matter of law when
it failed to conclude that the indictment contained duplicitous counts. In support
of their position, appellants note that the substantive counts of the indictment
charge appellants with violating 18 U.S.C. Sec. 641 by embezzling and
converting money of the United States to their own use or the use of others.
Appellants maintain that each substantive count charges them with two separate
and distinct offenses, rendering those counts duplicitous and the indictment
invalid. This issue is misconceived.
28
its burden by proving that the defendant, by committing any one of the acts
alleged, violated the statute. See United States v. Acosta, 748 F.2d 577, 579
(11th Cir.1984); Fields v. United States, 408 F.2d 885, 887 (5th Cir.1969);
Smith v. United States, 234 F.2d 385, 389 (5th Cir.1956); United States v.
Selage, 175 F.Supp. 439, 442 (W.D.S.D.1959). The conjunctive allegations do
not render the indictment duplicitous.
29
The first paragraph of 18 U.S.C. Sec. 641 (1982) identifies several acts
disjunctively and prescribes that each constitutes a violation of the statute,
provided that the acts involve "any record, voucher, money, or thing of value of
the United States or of any department or agency thereof, or any property made
or being made under contract for the United States or any department or agency
thereof." The acts of embezzling and converting government property simply
constitute two separate ways in which a violation of 18 U.S.C. Sec. 641 may
occur, not two separate crimes. An indictment is not duplicitous if, in one
count, it charges a defendant with violating the statute in both ways.3
III. CONCLUSION
30
31
AFFIRMED.
of the conspiracy, each shall be fined not more than $10,000 or imprisoned not
more than five years, or both.
3