No. 99-1052
In the Supreme Court of the United States
WILLIAM P. VERKIN, PETITIONER
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
SETH P. WAXMAN
Solicitor General
Counsel of Record
JAMES K. ROBINSON
Assistant Attorney General
KIRBY A. HELLER
Attorney
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTION PRESENTED
Whether there was a constructive amendment of the indictment at trial, where
petitioner was indicted on one count of bank fraud and one count of conspiracy
to commit bank fraud, and at trial the government produced evidence proving
that, in order to accomplish the fraud, petitioner misrepresented the appraised
value of a parcel of land.
In the Supreme Court of the United States
No. 99-1052
WILLIAM P. VERKIN, PETITIONER
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
OPINION BELOW
The opinion of the court of appeals (Pet. App. A1-A4) is unpublished, but
the decision is noted at 193 F.3d 517 (Table).
JURISDICTION
The judgment of the court of appeals was entered on August 20, 1999. The
petition for rehearing was denied on September 21, 1999 (Pet. App. B1-B2).
The petition for a writ of certiorari was filed on December 17, 1999. The
jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).
STATEMENT
Following a jury trial in the United States District Court for the Southern
District of Texas, petitioner was convicted on one count of bank fraud,
in violation of 18 U.S.C. 1344, and one count of conspiracy to commit bank
fraud, in violation of 18 U.S.C. 371. Pet. 1-2, 8-9. He was sentenced to
33 months' imprisonment and assessed a $5000 fine. Id. at 8-9. The court
of appeals affirmed. Pet. App. A1-A4.
1. As described in the indictment, petitioner, a real estate broker, and
his business partners engaged in two related business ventures. Pet. App.
E4-E5. One involved the purchase of 500 acres of real estate; the other
involved the acquisition of a beer distributorship (Burkett's) that had
defaulted on loans it owed to the Government Employee Credit Union (GECU).
Id. at E3-E4. Before the opportunity to purchase Burkett's arose, petitioner
entered into four earnest money contracts giving him the right to buy the
500 acres of real estate for a down payment of $1.5 million and $7.4 million
in promissory notes. Id. at E6. Along with his partners, petitioner purchased
the common stock of Burkett's from its previous owners. Id. at E7. Petitioner
and his partners then decided to structure a deal whereby they would obtain
additional loans from GECU for the down payment on the property and for
refinancing Burkett's debt of $6.6 million, and would pledge the land as
collateral for the loan. Id. at E7. To that end, they represented to GECU
that $2.2 million of the loan proceeds were needed to pay off unnamed previous
partners. Id. at E4, E6-E7.
Petitioner approached his employee George Beach to act as the purported
previous partner. Pet. App. E4-E5, E8-E9. Beach signed a "sham"
joint venture agreement with petitioner in which petitioner agreed to pay
Beach $2.2 million if Beach would convey to him the legal title in the real
estate. Id. at E8. That agreement furthered the fraud because Beach had
no legal interest in the property and petitioner already had signed contracts
to purchase the property from the sellers for only $1.5 million down. Petitioner
and his partners then forwarded this sham joint venture agreement to GECU,
to induce the credit union to believe that petitioner and his partners needed
the $2.2 million to buy out Beach's interest in the property. Id. at E9.
Following receipt of a legal document ostensibly showing that Beach had
conveyed legal title to the property to the partners, GECU wired the title
company, which petitioner partly owned, about $2.4 million of proceeds from
the loans, of which $2.2 million was to be paid to Beach. Pet. App. E9.
Petitioner and his partners then caused the title company to pay the sellers
of the property $1.5 million, the down payment specified in the original
earnest money contract that petitioner had entered into with the sellers.
Id. at E9-E10. The title company also gave Beach a check for $2.2 million,
which he endorsed back to the title company. Id. at E10. The title company
then gave Beach a check for $5000, his fee for participating in the scam,
and each of the four partners checks for $226,000. Ibid.
Two years later, Burkett's filed for bankruptcy, causing a multi-million
dollar loss to the National Credit Union Share Insurance Fund. Pet. App.
E10.
As described in the indictment, the object of the conspiracy was to enable
the defendants to "unjustly enrich themselves with other people's money
by skimming about $666,000.00 of federally insured proceeds" from the
GECU loans to Burkett's, and to "prevent detection of their receipt
of the money." Pet. App. E5-E6. The indictment explained that the "method
and means of the conspiracy" were that the defendants made it appear
that they needed $2.2 million from the GECU loan to buy out Beach's interest
in the property, when in fact, that money was "kicked back" to
petitioner and his partners from which they skimmed about $666,000. Id.
at E6. The facts described above were outlined in a section of the indictment
alleging "these and other overt acts." Id. at E6. The bank fraud
scheme charged in count two referred back to the facts outlined in the conspiracy
count. Id. at E11-E12.
2. In 1995, petitioner and two of his co-conspirators proceeded to trial,
and the jury found them guilty on both counts. Pet. 3-4.
3. In an unpublished opinion, the court of appeals reversed the convictions
on evidentiary grounds and remanded for a new trial. Pet. App. C9. It rejected
the defendants' contention that the evidence was insufficient to sustain
their convictions. Id. at C15. It described the focus of the prosecution
as the payment of the $226,826 to each of the defendants. Id. at C4.
4. In 1998, petitioner proceeded to trial for the second time.1 Pet. 6-9.
At trial, the government established, among other things, that petitioner
obtained GECU funds by misrepresenting to the credit union that he needed
to buy out a previous partner. Gov't C.A. Br. 6, 8-11. In addition, the
government introduced evidence concerning the appraisals of the real estate
that GECU had requested. Petitioner was responsible for securing the appraisals
because he knew the appraisal company. The appraisals that petitioner submitted
to GECU substantially overstated the value of the land, as measured by comparable
selling prices of nearby property.2 Id. at 7. Following a jury verdict,
petitioner again was convicted on both counts. Pet. 8.
5. The court of appeals affirmed. Pet. App. A1-A4. In response to petitioner's
contention that the government's evidence of the falsified appraisals unconstitutionally
broadened the charges in the indictment, the court, in an unpublished opinion,
held that "evidence of an additional false statement does not change
the offense with which [petitioner] is charged." Id. at A3.
ARGUMENT
1. Petitioner contends (Pet. 10-17), as he did below, that the jury found
him guilty of fraud and conspiracy for conduct that was not charged in the
indictment, violating his Fifth Amendment right to grand jury indictment
and his Sixth Amendment right to a fair trial. The legal principles governing
petitioner's claim are well settled. Because petitioner's contentions are
highly fact-bound and without merit, this Court's review is not warranted.
As this Court has explained, "[i]t is ancient doctrine of both the
common law and of our Constitution that a defendant cannot be held to answer
a charge not contained in the indictment brought against him." Schmuck
v. United States, 489 U.S. 705, 717 (1989). The constitutional right to
indictment by grand jury provides a body independent of the prosecutor and
the judge that determines whether the prosecution will proceed. See Russell
v. United States, 369 U.S. 749, 760-761 (1962). The indictment also guarantees
that the accused will have notice of the crimes charged and can plead former
jeopardy in any future case. See id. at 764.
An indictment "may charge numerous offenses or the commission of any
one offense in several ways." United States v. Miller, 471 U.S. 130,
136 (1985). "As long as the crime and the elements of the offense that
sustain the conviction are fully and clearly set out in the indictment,
the right to a grand jury is not normally violated by the fact that the
indictment alleges * * * other means of committing the same crime."
Ibid. Nor is it necessary for the government to charge "every single
act of execution of the scheme" that it intends to introduce at trial
to avoid a constructive amendment of the indictment. United States v. Pless,
79 F.3d 1217, 1220 (D.C. Cir.), cert. denied, 519 U.S. 900 (1996).
This Court has held that "after an indictment has been returned its
charges may not be broadened through amendment except by the grand jury
itself." Stirone v. United States, 361 U.S. 212, 215-216 (1960) (citing
Ex parte Bain, 121 U.S. 1 (1887)). A constructive amendment of the indictment
occurs "when the terms of the indictment are in effect altered by the
presentation of evidence and jury instructions which so modify essential
elements of the offense charged that there is a substantial likelihood that
the defendant may have been convicted of an offense other than that charged
in the indictment." United States v. Mollica, 849 F.2d 723, 729 (2d
Cir. 1988) (internal quotation marks omitted). The danger is that where
the "variation between pleading and proof" is so great that the
indictment "cannot fairly be read as charging" the conduct for
which the accused is convicted, no court could know that the grand jury
would have been willing to charge that conduct. Stirone, 361 U.S. at 217.
The critical question in determining whether a constructive amendment has
occurred is whether the jury considered a crime not charged by the grand
jury, not whether the jury considered facts other than those alleged in
the indictment that pertain to the charged offense. See Miller, 471 U.S.
at 136.
The court of appeals correctly held that the evidence of the inflated appraisals
did not change the offenses for which petitioner was charged. The charges
here, bank fraud and conspiracy to commit bank fraud, were based on the
scheme, as described in the indictment, "to unjustly enrich [petitioner
and his coconspirators] with other people's money by skimming about $666,000.00
of federally insured proceeds" from the GECU loans and "to prevent
detection of their receipt of the money." Pet. App. E5-E6. The evidence
of the inflated appraisals did not unconstitutionally alter the indictment;
instead that evidence demonstrated the existence of the same scheme to obtain
fraudulently GECU funds that the credit union would not have loaned to petitioner
and his co-conspirators absent the misrepresentations.
In addition, the district court's jury charge did not alter the indicted
offenses in any fashion. It clearly instructed the jury that it could find
petitioner guilty only if "the Government has proved beyond a reasonable
doubt that the defendant is guilty of the crimes charged. The defendant
is not on trial for any act, conduct, or offense not alleged in the Indictment."
Jury Charge 13. It also stated, as to the conspiracy charge, that the jury
must find that "two or more persons made an agreement to commit the
crime of knowingly executing a scheme and artifice to defraud the Government
Employees Credit Union as charged in the indictment." Id. at 7 (emphasis
added). As to the bank fraud count, it similarly emphasized that "[w]hat
must be proven beyond a reasonable doubt is that the accused knowingly executed
or attempted to execute a scheme that was substantially similar to the scheme
alleged in the indictment." Id. at 11 (emphasis added). The court made
no mention of the appraisals in its charge. In light of the jury instructions,
the jury could not have convicted petitioner of any crime other than that
alleged in the indictment. See United States v. St. Gelais, 952 F.2d 90,
95 (5th Cir.) (charge that instructs jury that government must prove scheme
alleged in indictment "guarantee[s] [that] the jury did not return
a guilty verdict on a theory which broadened the scheme outlined in the
indictment"), cert. denied, 506 U.S. 965 (1992).
2. The cases on which petitioner relies to assign error to the court of
appeals are unavailing. In Stirone v. United States, 361 U.S. 212 (1960),
this Court found an unconstitutional amendment of the indictment because
the proof at trial and the jury charge broadened the bases for conviction
from those charged in the indictment. In that case, brought under the Hobbs
Act, the indictment charged that Stirone had engaged in extortion that obstructed
the victim's receipt of shipments of sand from outside Pennsylvania into
that State to be used for production of concrete at the victim's plant.
See id. at 213-214. At trial, by contrast, the government introduced evidence
that the extortion obstructed commerce because concrete made by the victim
would be used in a steel mill which would export steel to other States,
a separate basis for demonstrating an effect on interstate commerce. See
id. at 214. In the jury charge, the district court instructed that the jury
could find Stirone guilty based on the alternate theory of interference
with commerce. Ibid. This Court concluded that the indictment had been unconstitutionally
broadened and Stirone was thereby "convicted on a charge the grand
jury never made against him." Id. at 219.
The other cases that petitioner cites similarly involve instances in which
the district court charged the jury in a manner that allowed it to convict
on a basis not charged in the indictment. In United States v. Nunez, 180
F.3d 227 (5th Cir. 1999), the indictment charged the defendant with assault,
in violation of 18 U.S.C. 111, by means of a fully loaded .40 caliber Beretta
semi-automatic; but the court instructed the jury that it could convict
even without the defendant's use of a weapon. In United States v. Doucet,
994 F.2d 169 (5th Cir. 1993), the indictment charged the defendant with
possessing an unregistered firearm modified to fire as a machinegun; but
the government argued and the court charged that the defendant could be
convicted for possessing the unassembled parts of a machinegun.3 Here, by
contrast, neither the court's jury instructions nor the government's proof
at trial altered the crime charged in the indictment. At bottom, the bank
fraud scheme involved petitioner's misrepresenting to the credit union the
need for the loan in order to profit personally. This theory was not abandoned
at trial. Instead, the evidence of the inflated appraisals furthered the
charged scheme by inducing the credit union to believe that its loan was
protected by adequate collateral.
3. Because evidence of the inflated appraisals did not constructively amend
the indictment, petitioner's argument (Pet. 18-19) that he was denied notice
of the charges against him is misplaced. It is well established that an
indictment is not required to set out expressly every action of the defendant
that may have contributed to the commission of the crime charged.4 See,
e.g., United States v. Hajecate, 683 F.2d 894, 898 (5th Cir. 1982) ("What
the defendants seek * * * is essentially the disclosure by the government
of its full theory of the case and all the evidentiary facts to support
it. That is not and never has been required."), cert. denied, 461 U.S.
927 (1983); United States v. Williams, 679 F.2d 504, 508 (5th Cir. 1982)
(indictment need not set forth "facts and evidentiary details necessary
to establish each of the elements of the charged offense"), cert. denied,
459 U.S. 1111 (1983). Rather, the primary purposes of the indictment are
to give the accused notice of the charges against him, to protect the accused
against double jeopardy, and to preserve the role of the grand jury as an
independent body interposed between the accused and the state. See, e.g.,
Schmuck, 489 U.S. at 717- 718; Miller, 471 U.S. at 134-135; Russell, 369
U.S. at 763-764. The indictment in this case did so; it sufficiently alleged
the crime charged to afford these constitutional protections.
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
SETH P. WAXMAN
Solicitor General
JAMES K. ROBINSON
Assistant Attorney General
KIRBY A. HELLER
Attorney
MARCH 2000
1 Petitioner's coconspirators pleaded guilty before the second trial. Pet.
6.
2 In its decision following the first trial, the court of appeals stated
that the appraised value of the property was accurate and in excess of the
amount necessary to secure the loan. Pet. App. C14. The government had not
introduced evidence to the contrary at that trial, Gov't C.A. Br. 24, but
had argued to the court in the presence of the defendant that the appraisal
was "a pie in the sky" and "unrealistic," Pet. 3.
3 The cases that petitioner cites in footnote six of his petition, Pet.
17 n.6, also do not further his argument. In all but two of the cases, the
court impermissibly altered the basis on which the jury could convict through
its charge. In United States v. Willoughby, 27 F.3d 263 (7th Cir. 1994),
the trial was by the court, and it found defendant guilty of violating 18
U.S.C. 924(c) (1994 & Supp. IV 1998) by relying on a drug predicate
that differed from the predicate charged in the indictment. In Moore v.
United States, 512 F.2d 1255 (4th Cir. 1975), the court found neither a
constructive amendment of the indictment nor a fatal variance.
4 In any event, by his own admission, petitioner was aware as early as the
first trial that the government believed the appraisals were inflated. Pet.
3.