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UNITED STATES v. WENGER

December 18, 1970

UNITED STATES of America, Plaintiff,
v.
David WENGER, Defendant


Pollack, District Judge.


The opinion of the court was delivered by: POLLACK

POLLACK, District Judge.

Post-trial motions are made by the defendant David Wenger for an order pursuant to Rules 29 and 33 of the Federal Rules of Criminal Procedure to set aside the jury verdict of guilty returned against said defendant on November 12, 1970 and to enter a judgment of acquittal, or in the alternative to set aside said verdict and grant a new trial on the basis of newly discovered evidence and in the interests of justice. Said defendant as a representative of an employee welfare trust fund was convicted of conspiring to receive a kickback and of agreeing to receive an improper payment in violation of 18 U.S.C. §§ 371 and 1954.

 The case went to trial against 11 defendants. The indictment against one of the defendants was dismissed at the close of the government's case and the jury returned a verdict of not guilty as to eight of the defendants and a verdict of guilty as to the defendants David Wenger and John Keilly. Neither of said defendants has been sentenced.

 The indictment charged that the defendants had conspired to receive a kickback in connection with a mortgage loan on property of the Mid-City Development Company in Detroit, Michigan. The loan application was made to the Central States, Southeast and Southwest Areas Pension Fund, a pension plan subject to the Welfare and Pension Plans Disclosure Act. The defendant John Keilly acted as the mortgage broker and the defendant David Wenger was the accountant for the Pension Fund. The defendants were charged with acting in conspiracy, in 1964, intentionally, knowingly and unlawfully. A loan was made to Mid-City by the Pension Fund, but no payoff followed due to circumstances explained in the evidence.

 These motions are based on the testimony of an attorney, one John Townsend, who was produced as a rebuttal witness, and what the defendant characterizes as newly discovered evidence.

 The defendant John Keilly took the witness stand and denied that he had met or conspired in 1964 with the defendant Wenger as charged by the government and testified specifically that he had never met Wenger until early 1966 or possibly December 1965.

 Mr. Townsend as the government's witness in rebuttal, testified to a meeting which took place in his office in Dallas, Texas in late October or early November 1963 which was attended by the defendants Wenger and Keilly and one Herbert Itkin, and others. He said that the purpose of the meeting was to discuss a mortgage loan requested by Townsend's client, Park View Hospital, located in Midland, Texas. The proposed loan was to be secured from the same welfare fund, the Central States Southeast and Southwest Areas Pension Fund. Townsend testified that Keilly introduced him to Wenger as being a member of the loan committee who was an auditor, stating that Wenger would check over the information in the loan application to see if all the figures were correct and were the necessary figures. He testified that the meeting lasted for about an hour and a half and that both Keilly and Wenger were there the entire time. The government then asked, over objection of the defendants

 
Q. Mr. Townsend, was Mr. Wenger ever mentioned by Mr. Keilly in connection with the fee in this case?
 
A. Yes. We were told that he would receive a point as well as Mr. Webb.

 Townsend testified further along these lines that the parties present discussed the payment of a 10% fee for obtaining the loan which would be divided approximately as follows: 1% would go to the secretary of the Fund for processing the loan; and a percent would go to each one of the loan committee, of which there were approximately five or six, two of whom were present in Townsend's office at that time, Mr. Wenger and Mr. Webb; and that the other percents would be broken down to those who would be involved in helping the mortgage applicant to obtain the loan. This explanation of the fee division was made by Mr. Itkin in the presence of the others.

 The attorney for Wenger cross-examined Townsend on the legality of the payments to obtain the loan and elicited the response that the witness felt that the fees were perfectly proper and legal; that he knew of no impropriety either then or now.

 
Q. In other words, everything that happened there was perfectly legal, is that not so?
 
A. That is right.

 [The government did not take issue with this ...


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