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United States v. Hykel

decided: May 23, 1972.

UNITED STATES OF AMERICA
v.
GEORGE J. HYKEL ET AL.



Seitz, Chief Judge, and Adams and Hunter, Circuit Judges.

Author: Hunter

Opinion OF THE COURT

HUNTER, Circuit Judge.

Appellant George J. Hykel was convicted for violating 18 U.S.C. § 1006, which forbids, inter alia, officers of federally-insured savings and loan associations from participating "directly or indirectly" in any loan by the savings and loan association, with intent to defraud.*fn1 It is argued on this appeal that the evidence was insufficient to support the conviction, and that certain of the District Court's evidentiary rulings require a new trial. We find these arguments without merit, and accordingly affirm.

I. SUFFICIENCY OF THE EVIDENCE

18 U.S.C. § 1006 provides, in relevant part:

"Whoever, being an officer . . . of . . . any institution the accounts of which are insured by the Federal Savings and Loan Insurance Corporation . . . with intent to defraud the United States or any agency thereof, or any corporation, institution, or association referred to in this section, participates or shares in or receives directly or indirectly any money, profit, property, or benefits through any transaction, loan, commission, contract, or any other act of any such corporation, institution, or association, shall be fined not more than $10,000 or imprisoned not more than five years, or both."

Thus three elements must be established to secure a conviction under that section: (1) the defendant must be shown to have the requisite connection with one of the institutions covered by the section; (2) there must be the required participation or sharing in the benefits of a transaction with the institution; and (3) there must be the required intent to defraud.

In determining whether the evidence produced at trial was sufficient to sustain the appellant's conviction, "we are required to review the evidence, together with all inferences reasonably and logically deducible therefrom, in the light most favorable to the government." United States v. Sams, 340 F.2d 1014, 1016 (3d Cir.), cert. denied, 380 U.S. 974, 85 S. Ct. 1336, 14 L. Ed. 2d 270 (1965); accord, United States v. De-Cavalcante, 440 F.2d 1264, 1273 (3d Cir. 1971); United States v. Hamilton, 457 F.2d 95 (3d Cir., 1972).

The appellant was admittedly the president of the Havertown Savings and Loan Association ("Havertown"), the deposits of which were insured by the Federal Savings and Loan Insurance Corporation, in June, 1965. At that time Thomas and Ella Lawson came to him to seek a mortgage loan for property that they wanted to purchase. A proper application was made by the Lawsons, and eventually the loan was made in the amount of $24,800.

During the course of the arrangements to buy the property, the appellant suggested to the Lawsons that the property would be well suited for construction of apartments. Accordingly, the appellant and the Lawsons entered into an agreement to develop the property. The contract was evidenced by a written agreement drawn by Thomas W. Maher, an attorney who also represented Havertown. The agreement was signed late in June, 1965, according to the Lawsons.*fn2

Under the agreement, the Lawsons were to proceed with their purchase of the property, apply for a building permit, and execute and deliver all instruments necessary to carry out the agreement. The appellant was responsible for obtaining necessary financing for the project, and was to pay the engineering, architectural, and legal fees, as well as for the costs of obtaining the building permit and zoning changes. Only after these conditions had been fulfilled would the appellant have any interest in the property.

Pursuant to the agreement the Lawsons went ahead with their purchase of the property. A formal contract to purchase was signed on July 10, 1965, and settlement occurred on September 10, 1965. The appellant was present at the settlement, receiving at that time $800 as reimbursement for architect's fees and zoning costs paid by him, $19.75 as a broker's commission for placing the title insurance, and $190 for fire insurance. (N.T. 2-61 to -62).

Thereafter Landon Courts, Inc., was formed. By deed dated April 28, 1967, and recorded March 12, 1968, the Lawsons conveyed the property to the corporation. Stock certificates of the corporation, dated May 15, 1967, were introduced. Of the three hundred shares outstanding, 147 were issued to Mr. Lawson, 147 were issued in the name of Thomas W. Maher, and six were issued in the name of John G. Siegle. Evidence in form of admissions by the appellant was introduced to show that the shares held by Maher and Siegle were held by them for the appellant. (N.T. 2-3 to -4, 2-47 to -48, 2-87).

The building permit was approved on February 28, 1968, and thereafter construction began. A few days before that date, however, the Lawsons' mortgage loan from Havertown had been repaid in full.*fn3

The appellant's argument, briefly stated, is that since he had no legal interest in the property until after the mortgage loan had been repaid, he did not "participate" or "share" in the mortgage loan within the ...


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