U.S. v. United Medical and Surgical Supply

Full title: UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE, v. UNITED MEDICAL AND…

Court: United States Court of Appeals, Fourth Circuit

Date published: Mar 29, 1993

Facts

In 1983, Reverend C. Benjamin Smith planned to build a retirement center in Spartanburg, South Carolina, named Skylyn Hall. Ernst Whinney performed a feasibility study on the project, but the final report was not completed due to Smith’s inability to obtain private financing. Smith called Buchanan to inquire about underwriting the project, but Buchanan informed him that he would not participate unless Stone was involved.

Stone agreed to finance the project through a municipal bond issue using a nonprofit corporation as the project’s owner. After discussions with Smith, he signed an agreement that named Unico as the project’s developer and required Unico to pay Smith’s company, Benan, Inc., $150,000 as a co-development fee. Smith lost control of the project when he signed this contract.

Stone commissioned MayZima Company to perform a new feasibility study, negotiated a contract with Jerry Ingle, named United Medical as the project’s FFE supplier, and selected Retirement Horizons as the actual owner of Skylyn Hall. Buchanan was appointed as the project’s underwriter, and John Low was named as his counsel.

The Official Statement for Skylyn Hall contained numerous misstatements and omissions of material fact, including the lack of disclosure of a co-development contract between Unico and Benan, Ernst Whinney’s earlier feasibility study, and inaccurate listing of disbursements from bond proceeds. The statement also failed to disclose the financial troubles of thirty-six bond issues, including those for retirement centers or nursing homes.

Issue

(1) whether the district court erred in failing to dismiss the indictment based on the applicable statute of limitations;

(2) whether the district court erred in concluding that a plea agreement signed by Stone in an earlier case did not bar his prosecution in this matter;

(3) whether the district court erred in concluding that there was sufficient evidence to support Buchanan’s convictions and in denying his motion for a judgment of acquittal or, in the alternative, for a new trial;

(4) whether the district court abused its discretion by limiting the Defendants’ cross-examination of one of the Government’s expert witnesses; and,

(5) whether the district court abused its discretion by giving a prejudicial supplemental instruction in response to a jury question.

Decision

The Defendants argue that the supplemental instruction improperly focused the jury’s attention on the nexus between the sale of bonds and overt acts, forcing the jury to draw the conclusion that the sale of a bond was an overt act. We do not agree. The supplemental instruction specifically informed the jury that they must determine if an overt act happened and referred the jury to the court’s original instructions to determine what constituted an overt act. We also note that even if the instruction allowed the jury to conclude the sale of a bond was an overt act, the instruction would not be prejudicial because, as discussed in section II of this opinion, the sales were overt acts.

The Defendants also challenge the district court’s failure to reinstruct the jury that they had to reach a unanimous verdict. No decision of this court has required such an instruction in conjunction with all supplemental instructions. Furthermore, the authority upon which the Defendants rely, United States v. Duncan, 850 F.2d 1104 (6th Cir. 1988), is distinguishable and would not require such an instruction in this case. In Duncan, the supplemental instruction highlighted the fact that there were various theories available for the jury to use in reaching a guilty verdict. Duncan only held that when the court’s supplemental instruction gives a jury different alternatives for reaching a verdict, the jury must be reinstructed that they must unanimously agree on the theory under which they convict the defendant. Id. at 1114-15. Duncan does not apply here because the supplemental instruction did not give the jury different alternatives for reaching their verdict.

Viewed in the context of this trial, we hold that the supplemental instruction was not misleading, fairly answered the jury’s question without creating prejudice, and gave an accurate description of the law on the subject. Therefore, the district court did not abuse its discretion in its wording of the instruction and did not err in declining to reinstruct the jury as to unanimity.

For the reasons discussed above, we affirm the judgments of the district court.

AFFIRMED.

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