United States of America, Plaintiff-appellee, v. Thomas P. Richardson, Defendant-appellant, 586 F.2d 661 (9th Cir. 1978)

Before us is the appeal of defendant Richardson of his conviction in No. 76-2125, (indictment for violation of Security Exchange Commission's charges) on six of the 46 counts of an indictment charging conspiracy, fraud in the sale of securities, filing a false financial statement with an agency of the United States Government, and wire fraud. Four other defendants were indicted with him, on one or more counts of the above mentioned crimes. All four co-defendants at one time or another prior to trial had entered pleas of guilty to one or more counts of this indictment. Appellant did not plead guilty, but pursuant to an agreement between the Government and Richardson, the Government proceeded to trial on six counts of the indictment. (The others were dismissed by stipulation.) Gov.Ex. 168(I) was the stipulation admitted into evidence which constituted the Government's case-in-chief.

Appearing in the margin is the description in the Government's Brief of appellant's conduct,¹  which was undisputed at the trial and is undisputed on this appeal.²  This information was first voluntarily brought to the attention of the S.E.C. on 4/15/75 by co-defendant Thomas, and Richard R. Scott, Richardson's attorney. Prior to this date, appellant had been under investigation by two different agencies of the United States for violation of the Neutrality Act, (shipping guns to Robert Vesco in Costa Rica and/or Panama); and the Mann Act (transporting women across state or national boundaries for immoral purposes). Admitting the facts in the S.E.C. complaint, the appellant's sole defense was that he had been entrapped.

After the court heard several motions, appellant waived his right to trial by jury, waived findings of fact, and after argument, the court made the following findings:

"THE COURT: All right. I have considered the evidence presented during the trial, as well as the lengthy and detailed stipulation that the parties have entered into. I also have considered the evidence that was presented at the pretrial hearing and it has been incorporated into these proceedings.

"I find from the evidence and beyond a reasonable doubt that the defendant did commit the acts that are charged in Counts One, Three, Four, Five, Seven and Thirty-seven of the indictment, and in committing (sic) those acts he did also commit the offense, and that when he committed these offenses, he did so knowingly and willfully with the intent that is the requisite of these crimes.

"Mr. Richardson has relied heavily on the defense of entrapment, and while it has been established by the evidence that Mr. Ginsburgs was working as an informant for the Customs Bureau and also for the Beverly Hills Police Department during the period set forth in this indictment, the only evidence is that his efforts were directed solely toward the Neutrality Act violations.

"But even putting that aside and viewing the evidence in the light most favorable to the defendant, Ginsburgs really was nothing more than a confederate of the defendant in his illegal acts, at the very best. Ginsburgs really merely said to the defendant, 'Why don't you do these illegal acts?'

"And the defendant knew that the proposal was illegal, and, however, with little hesitation he agreed to carry out the scheme that only he could accomplish, and he, in effect, said that, 'I know it is illegal, but it sounds good, and I will do it.'

"Mr. Richardson, I find, was not entrapped or induced to commit these offenses. I find that he was ready and willing to commit the crimes charged whenever the opportunity was afforded, and that is exactly what he ultimately did."

(R.T. 1223-1225 in No. 76-2125.)

Thus, there is no question but that defendant was guilty as charged in No. 76-2125, unless as a matter of law the trial judge erred in finding there was no entrapment.

A careful examination of several thousands of pages of pleadings, testimony and exhibits convinces us there was no error in that finding by the trial court. Richardson was not entrapped, save by his own volition and desires.

II. THE MOTION FOR A NEW TRIAL (OR FOR A DISMISSAL OF THE INDICTMENT). APPEAL IN NO. 76-3094

After conviction and sentence, appellant changed attorneys, and made the above motion, and asked for an evidentiary hearing before the trial judge. After much maneuvering and argument, a partial evidentiary hearing was granted to permit the court to review the four issues now urged by appellant.³ 

These four issues raised are expressed differently by the two parties. We prefer the Government's expression:

 DEFENDANT'S ISSUES GOVERNMENT'S ISSUES I. Conduct of Government requires I. Did Government's conduct deprive dismissal of case. defendant of due process of law under the Fifth Amendment? II. Appellant's motion to recuse II. Did denial of defendant's after Government counsel should have trial motion to recuse Government been granted. counsel deprive defendant of due process (Fifth Amendment)? III. Evidential hearing should have III. Did defendant receive effective been granted on issue of assistance of counsel? ineffective counsel. IV. Evidential hearing should have IV. Did the court err in failing to been granted on issue of initiate competency hearing for insanity. defendant under 18 U.S.C. § 4244?

From the first, the defense was primarily based on the alleged fact that one Jack Ginsburgs, a producer of "adult" books and a close friend and confidant of appellant, and one Robert D. Hall, a private investigator, also a close friend and associate of appellant, Were informants against him in the S.E.C. investigation. Government counsel persistently denied this, saying Ginsburgs was an informant to Customs Agent Joseph Charles in the Neutrality Act investigation Only. Hall was murdered and Ginsburgs convicted of the murder and sent to state prison. Hall could not, and Ginsburgs would not, testify on behalf of appellant in the New Trial motion. This factor increased defendant's claim that his good friends, Ginsburgs and Hall, were informants against him during, and with respect to, the S.E.C. investigation.

At the hearing on the motion for a new trial, the "informant charges" made by appellant in the New Trial proceedings were categorically denied by Assistant U.S. Attorneys Marella and Wilson, Customs Agent Charles, and S.E.C. Counsel Mercer. The testimony given by Robert Hall in his two appearances before the grand jury was submitted to Judge Byrne In camera, together with a supplemental affidavit of Marella. Marella swore he had never heard or even known prior to March 1st, 1977, (almost two years after co-defendant Thomas and Attorney Scott for appellant had gone to the S.E.C.), of the twelve tape recordings given by Hall to Assistant U.S. Attorney Wilson. Marella also swore he had but one meeting or conversation with Jack Ginsburgs, and received no information from him.

Finally, (and most convincing if anyone could believe him) was the extensive testimony of Jack Ginsburgs himself (R.T. No. 76-2125, pp. 509-592), then under examination (actually cross-examination) of Mr. Sharp, co-counsel for appellant, that he was admittedly an informant to Agent Joseph Charles with respect to the latter's investigation of appellant for violation of the Neutrality Act, Alone. "I gave him information regarding the alleged gun running to Costa Rica. Yes." (Idem, 515.) "I had no contact with Charles after August, 1974 (p. 517), when I procured an attorney for him (appellant) in San Antonio (p. 519)." Ginsburgs did tell Agent Charles appellant Richardson had called his attorney Scott on the telephone and asked him (Scott) to please clear his (appellant's) driveway of the agents that were there in Bel Air (p. 523) after the S.E.C. investigation started.

Ginsburgs was present at many conversations, some of which while Mr. Sharp was present, concerning appellant's financial difficulties.

"Q (by Mr. Sharp) Did you at that time report Any of that particular conversation to Any Government Agent? (Emphasis added.)

"A No, sir. (p. 526, 11. 20-22).

"Q Did you ever report to any Government Agent any conversation that you overheard between me and Mr. Richardson regarding the allegations that had been made against him in this particular case?

"A No, sir." (pp. 527-528).

Ginsburgs' flat denial as to his furnishing any information respecting the Securities case, included any conversations with Assistant U.S. Attorney Marella.

Ginsburgs was also asked about his furnishing any documents to Captain Jack Egger of the Beverly Hills Police Department (now retired) which Ginsburgs, according to appellant's attorneys, had allegedly Purloined from appellant. Ginsburgs readily admitted he had furnished (1) copy of an appraisal concerning the value of appellant's house; (2) "a thing" on "Rich-Air-Son" (concerning the jet plane this subsidiary owned by Richardson used for plane travel to various places, including Costa Rica); (3) a list of employees of Richardson; and (4) "possibly" a copy of Richardson & Co., Inc.'s financial statement of November 30, 1973 (idem, p. 538), all of which Ginsburgs said he had received personally from either Richardson or Thomas (idem, pp. 538-539). "I gave him (Dr. August Tagliaferri) the documents so he could try to help Mr. Richardson through his financial problems (idem, p. 540), and gave a copy to Mr. Egger." He added: "There is nothing confidential about any of this information." (Idem, p. 541.)

Jack Ginsburgs was then interrogated about his wholesale "check-kiting" transactions, and Exhibits A, B and C were introduced by defendant. Exhibit A was a card naming Jack Ginsburgs as a "consultant." Exhibit B was a statement (a 17-A-5 Report) that Mr. Richardson's company Was required by the S.E.C. to send to all its customers, and Exhibit C was the Appraisal of the value of defendant Richardson's home. These were the allegedly purloined documents.

After counsel for Richardson had examined Jack Ginsburgs, the court asked Ginsburgs and Jack Egger, the Beverly Hills Police Captain, several questions. These were to put on the record through the introduction of Exhibits 3A, 3B and 3C, which were, said the court, "any parts of the documents read by the court In camera that seem possibly, potentially connected in any way with this case."⁴ 

We conclude from examination of the voluminous and sometimes confusing record:

I. That the trial court's ruling in the original case that there was no entrapment of the defendant was correct. There was no evidence worthy of the name that supported this theory of defense.

II. That the trial court's ruling that the appellant's application for an order recusing Mr. Wilson and Mr. Keller should be denied is correct as to Mr. Keller because it was and is moot; as to Mr. Wilson because there was no factual or legal basis for such an order, by reason of the overwhelming evidence to the contrary, as found by the trial judge. No case law is submitted by appellant. Compare: Newman v. Sigler, 421 F.2d 1377, 1379 (8th Cir. 1970) Cert. denied, 399 U.S. 935, 90 S. Ct. 2267, 26 L. Ed. 2d 808 (1970).

III. After the trial court's careful and exhaustive evidentiary hearing on whether appellant's Fifth and Sixth Amendment rights were violated by alleged misconduct of government counsel in the trial and pretrial proceedings, the trial court found that the defendant Richardson's

" . . . constitutional rights have not been violated, that there has been no showing that the contents of (certain missing) tapes contained any material with reference to the Securities case, or that the material was in any way used by the government in this case.

" . . . I do not find that any of the rights of the defendant to a fair trial or right to counsel have been violated.

"There has been no evidence that there was any intrusion upon the attorney-client relationship of the defendant, nor that Mr. Hall, during the time that he was acting as an investigator for Mr. Richardson was at the same time acting as an informant for the government with reference to any matters relating to this case.

"The motion in both the Richardson and Kummer cases this motion in each of those cases, is denied."

(Vol. VIII in No. 76-3094, pp. 924-925.)⁵ 

"The mere possibility that an item of undisclosed information might have helped the defense, or might have affected the outcome of the trial, does not establish 'materiality' in the constitutional sense . . .. If the suppression of evidence results in constitutional error, it is because of the character of the evidence, not the character of the prosecutor.

" . . . The proper standard of materiality must reflect our overriding concern with the justice of the finding of guilt."

United States v. Agurs, 427 U.S. 97, 110, 96 S. Ct. 2392, 2400, 49 L. Ed. 2d 342 (1976). Cf. United States v. Bracy, 566 F.2d 649, 654-656 and 658 (9th Cir. 1977); United States v. Brown, 562 F.2d 1144, 1149 (9th Cir. 1978). Compare: United States v. Basurto, 497 F.2d 781 (9th Cir. 1974).

There was no substantial evidence presented that counsel's aid for appellant was ineffective at defendant's trial. This is true whether we adopt either of the two tests being considered by this circuit at this time Cooper v. Fitzharris, 551 F.2d 1162 (9th Cir. 1977); Brubaker v. Dickson, 310 F.2d 30, 37 (9th Cir. 1972).

IV. There thus remains in this case only the issue of whether the trial court erred in failure to initiate competency hearings for defendant under 18 U.S.C. § 4244.⁶ 

Neither the United States Attorney, nor his assistants, nor either of appellant's own counsel, nor the trial judge came to a conclusion they, or any one or more of them, felt they had Reasonable cause to believe that the defendant herein was presently insane or so mentally incompetent as to be unable to understand the proceedings against him, or properly to assist in his own defense, during the entire period of his several trials. This fact tells a great deal about the validity of this claimed error. The trial and the hearings lasted from defendant's arraignment on November 10, 1975 to August 11, 1977; the third (Kummer) trial to December 22, 1977. During this time appellant was periodically under the observation of the court, his attorneys and the government attorneys. During the previous July and September of 1974, defendant had testified as a witness before a Committee of Congress, looking into his possible connections with Robert Vesco. The later tapes of defendant's conversations with Robert Vesco, Hall, Ginsburgs, and others, indicate appellant was an obviously worried man, who faced six years in prison, but gave no evidence of mental incapacity. In fact, quite the contrary appears to be true.⁷ 

We have carefully reviewed (1) the proceedings during appellant's trial leading to his conviction by the district court, and (2) the proceedings on remand leading up to the denial of appellant's "Motion for a New Trial, or in the alternative, for a Dismissal of the Indictment," and (3) two similar issues raised in the consolidated charges against Thomas B. Richardson in the Kummer case. We conclude no error was committed, and each of the trial court's dispositions, in their entirety, is Affirmed.

The application for Nullification of the District Court's order revising Terms of Bail on Appeal is denied as moot.