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Parties Involved:
Douglas Hauck
Appellant
United States of America
Appellee

Document Text:

♦ 

PUBLISH 

UNITED STATES COURT OF 

FILi.,D United States Qrurt of Appeal, . Tenth Cireuit 

APPEALS 

NOV 171992 

------------ROBERTL.HOECKER 

Clerk 

TENTH CIRCUIT 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

·vs. 

DOUGLAS HAUCK, 

Defendant-Appellant . 

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No.~1437 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. No. 90-CR-320) 

John M. Richilano, Denver, Colorado, for Defendant-Appellant. 

John M. Haried, Assistant U.S. Attorney (Michael J. Norton, United 

States Attorney, with him on the brief), Denver, Colorado, for 

Plaintiff-Appellee. 

Before BRORBY, MCWILLIAMS and KELLY, Circuit Judges. 

KELLY, Circuit Judge. 

Background 

Defendant-appellant Douglas Hauck was a licensed real estate 

agent in Colorado. Together with Daniel Hoover and Richard 

Jorgenson, the principals of an organization called RAM Marketing, 

Mr. Hauck began to utilize several "no-money-down" schemes to sell 

properties, including "coinvesting" with buyers who could not 

qualify for loans. Mr. Hauck supplied downpayment money by 

collecting unusually large conunissions 

Appellate Case: 91-1437 Document: 010110148704 Date Filed: 11/17/1992 Page: 1 
22.5%. After a property had been purchased and its mortgage 

insured by HUD, Mr. Hauck would transfer his interest by way of a 

quitclaim deed to the coinvestor. 

The investors attempted· to find tenants for the property who 

were interested in an equity sharing arrangement. "Equity 

sharing" allowed a tenant to live in the house, make the mortgage 

payments and attain some shared equity with the investorpurchaser. Investors often submitted bogus leas.es to HUD because 

submitting the equity sharing agreements increased approval time 

or because HUD rejected such arrangements. Sometime after October 

1985, Mr. Hauck became disgruntled with his share of the profits 

and did no further business with RAM Marketing or its principals. 

The government alleged that the coconspirators submitted 

false information to HUD in order to qualify for loans. To show 

an alternative source for the downpayment funds, a fake letter 

from another mortgage company was submitted, purportedly 

confirming a second mortgage on the residence of the investor. 

False leases were submitted to show another source of income. 

Other loan application information was falsified, including 

valuation of one investor's car, statements of salary and 

verifications of employment and of available funds. 

On November 29, 1990, Mr. Hauck was indicted along with Mr ~ 

Hoover, Mr. Jorgenson and Guy de Chadenedes for conspiring to make 

false statements to obtain HUD mortgage insurance, in violation of 

18 U.S.C. § 1010, and to defraud the United States, in violation 

~ 0 . § 371. All pled guilty, save Mr. Hauck, who was 

t- . 1. 

Appellate Case: 91-1437 Document: 010110148704 Date Filed: 11/17/1992 Page: 2 
J 

J 

Mr. Hauck appeals his conviction claiming that (1) evidence 

of any overt act within the applicable statute of limitations 

period was insufficient to support the conviction; (2) the general 

verdict may have been based upon an erroneous view of the law; and 

(3) the indictment was duplicitous. We find these claims without 

merit and affirm. Our jurisdiction arises under 28 U.S.C. § 1291. 

Discussion 

I. Statute of Limitations 

To satisfy the statute of limitations, the prosecution must 

show that the conspiracy continued to exist five years prior to 

the indictment, returned on November 29, 1990, and that "at least 

one overt act in furtherance of the conspiratorial agreement was 

performed within that period." United States v. Pinto, 838 F.2d 

426, 435 (10th Cir. 1988) (citing Gruenwald v. United States, 353 

U.S. 391, 397 (1957)). Mr. Hauck argues that the government 

failed to prove any overt act after November 29, 1985. Even if 

one was proven, Mr. Hauck suggests that, because such overt act 

was not alleged in the indictment, a fatal variance exists between 

the indictment and the proof. We need not reach the question of 

whether the particular overt act proven may be one that was not 

alleged because we conclude that one of the alleged overt acts 

after November 29, 1985 was proven. 

The indictment alleged several overt acts, including the 

purchase of several properties by either Mr. Hauck or one of his 

coconspirators. Mr . Weber, a coconspirator, testified that he 

continued to purchase certain properties, specified in the 

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indictment, through "the fall of '86, September or October, in 

that period." VI R. 429. Mr. Weber confirmed the purchase of the 

following properties during his testimony: 

Property 

3483 Atlantic Drive 

3495 Atlantic Drive 

3477 Atlantic Drive 

950 Acapulco 

Date 

12/26/85 

12/26/85 

01/06/86 

01/07/86 

VI R. 428-29. 

Sufficient evidence to support a conviction exists if a 

reasonable jury, after viewing the evidence in the light most 

favorable to the government, could have found the defendants 

guilty beyond a reasonable doubt of each essential element of the 

crime charged. Jackson v. Virginia, 443 U.S. 307, 319 (1979). A 

similar standard of review applies when a defendant challenges the 

finding of ·an overt act within the limitations period. United 

States v. Scop. 846 F.2d 135, 138-39 (2d Cir. 1988), modified on 

reh'g 'in part on other grounds, 856 F.2d 5 (1988). The jury was 

instructed regarding the necessity of finding an overt act within 

the statute of limitations. 1 

1 

The evidence at trial tended to show that Mr. Hauck and his 

The jury was instructed: 

Now, it is an affirmative defense to the charge of 

conspiracy that the government failed to prove an overt 

act, as alleged in the indictment, within the statute of 

limitation period. The statute of limitations in this 

case is five years. The indictment was returned on 

November 29, 1990, therefore, in order to return a 

verdict of guilty, you must find that the government has 

proven beyond a reasonable doubt that at least one of 

the overt acts alleged in the indictment occurred after 

November 29, 1985. 

IX R. 978 (emphasis added). 

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, 

coconspirators at RAM Marketing did no further business together 

after November 1985. However, Mr. Hauck concedes that he did not 

take the affirmative steps necessary to withdraw from the 

conspiracy. Aplt. Reply Brief at 5. Therefore, the needed overt 

act within the statute of limitations may be performed by any of 

the coconspirators. United States v. Lash, 937 F.2d 1077, 1083-84 

(6th Cir. 1991). Although the bulk of Mr. Hauck's participation 

did occur prior to November 1985, the evidence of continued 

property purchases by coconspirators was "sufficient to permit a 

rational jury to conclude that the conspiracy and substantive 

scheme to defraud continued." Scop, 846 F.2d at 139. See also 

United States v. Gallup, 812 F.2d 1271, 1280 (10th Cir. 1987). 

II. Erroneous View of the Law 

Mr. Hauck contends that the general verdict could have been 

based on an erroneous view of the law and must therefore be 

reversed. He relies heavily on the mm Handbook, which he asserts 

"expressly permitted the use of the real estate commission for the 

downpayrnent." Aplt Brief at 22. During trial, Mr. Hauck called 

an expert who testified concerning the policies and practices of 

mm. In his opinion, the mm Handbook 4155.1, 1 3-28(f) permitted 

the unqualified use of real estate commissions for downpayrnents. 

VIII R. 814-15. This testimony was relevant to the issue of Mr. 

Hauck's alleged fraudulent intent. See United States v. Barsanti, 

943 F.2d 428, 432-33 (4th Cir.) (expert testimony interpreting a 

mm certification would be admissible to establish that "the 

certification (c) statements made by appellants would not have 

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been false"), cert. denied, 112 S. Ct. 1474 (1991). The district 

court carefully limited the testimony to relate to the HUD 

Handbook, which the court recognized is not law. VIII R. 793. 

See Burroughs v. Hills, 741 F.2d 1525, 1529 (7th Cir. 1984) (HUD 

Handbook "intended for internal use for the information and 

guidance of HUD officials" and "'has no binding force'") (quoting 

Litton Systems. Inc. v. Whirlpool Corp., 728 F.2d 1423, 1439 (Fed. 

Cir. 1984)), cert. denied, 471 U.S. 1099 (1985). Mr. Hauck's 

defense, based on the HUD Handbook, was factual. Defendant made 

no pretrial motion to challenge the indictment nor did he 

challenge the jury instructions relating to his Handbook defense. 

See Fed. R. Crim. P. 12(b) (2); 30. 

On appeal, Mr. Hauck again fails to raise legal questions 

related to the indictment, focusing instead on the Handbook and 

whether it allows the use of conunissions for downpayment funds. 

Although Mr. Hauck mentions an erroneous view of the law, the 

substance of the argument relates only to the Handbook. Presented 

as a factual issue, the evidence is reviewed in a light most 

favorable to the government. Unless no reasonable jury could have 

concluded that Mr. Hauck's use of conunission money furthered the 

conspirator's efforts to defraud the government, we will not 

reverse. After a review of the entire record, "we cannot say the 

facts of this case are insufficient to establish a dishonest 

impairment of a government function." United States v. Murphy. 

957 F.2d 550, 554 (8th Cir. 1992). Certainly, "[c)onspiracies to 

defraud the United States under section 371 can take many forms." 

Id. Here, Mr. Hauck's intent to defraud may be inferred from the 

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,, facts adduced at trial, despite expert testimony regarding what 

may be permissible according to the Handbook. 

In any event, absent plain error, failure to object or 

request clarifying instructions at trial waives the issue of an 

invalid theory of criminal liability on review. Gallup, 812 F.2d 

at 1279. We find no plain error. It is well settled that "the 

'illegal' purpose need not involve a criminal violation." United 

States v. Tuohey, 867 F.2d 534, 537 (9th Cir. 1989) (citing Dennis 

v. United States, 384 U.S. 855 (1966)). "Thus, the 'defraud' part 

of section 371 criminalizes any willful impairment of a legitimate 

function of government, whether or not the improper acts or 

objective are criminal under another statute." Id. When Mr. 

Hauck argues that he has committed no crime, he makes the same 

error as the defendant in Gallup--failing to acknowledge that "18 

U.S.C. § 371 defines a substantive crime" in itself. Gallup. 812 

F.2d at 1276. In Gallup, we noted that the crime was the 

compromise of HUD's interest "in having it's projects 

'administered honestly and efficiently and without corruption and 

waste.'" Id. (quoting United States v. Conover, 772 F.2d 765, 771 

(11th Cir. 1985), aff'd in lli!.tt, remanded in part, 483 U.S. 107 

(1987)). 

III. Duplicity of the Indictment 

Finally, the appellant contends that the conspiracy charge 

actually charged two separate offenses, one under the "commit any 

offense" prong and another under the "defraud the government" 

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prong of 18 U.S.C. § 371. 2 We find the discussion in United 

States v. Smith, 891 F.2d 703, 712-13 (9th Cir. 1989), cert. 

denied, 111 S. Ct. 47 (1990) instructive: 

[T]he two clauses should be interpreted to establish 

alternative means of commission, not separate offenses. 

[W]here conspiracy is the charge, the established rule 

is that a charge of conspiracy to commit more than one 

offense may be included in a single count without 

violating the ·general rule against duplicity. So here, 

the defendants were properly charged with a single 

continuing agreement to defraud the United States and to 

commit the substantive offense. 

See United States v. Levine, 750 F.Supp. 1433, 1436-67 (D. Colo. 

2 Specifically, the conspiracy count read, in pertinent part, 

as follows: 

11. From on or about September 1, 1985 and continuing 

thereafter until on or about March 4, 1987, ... defendants DANIEL HOOVER, RICHARD JORGENSON, GUY 

DECHADENEDES, and DOUGLAS HAUCK did willfully, 

unlawfully, and knowingly combine, conspire, confederate 

and agree together and with others ... to commit 

offense against the United States and to defraud the 

United States and the FHA/HUD. More particularly, 

defendants ... did combine, conspire, confederate, and 

agree together and with each other: 

A. to make, pass, utter, and publish 

statements, knowing the same to be false, and 

to alter, forge, and counterfeit instruments, 

papers, and documents, knowing the same to be 

altered, forged, and counterfeited, all for 

the purpose of obtaining mortgage loans ... with the intent that such loans would be 

offered to and accepted by the FHA/HUD for 

insurance, and for the purpose of influencing 

the actions of FHA/HUD, in violation of Title 

18, United States Code, Section 1010; and 

B. to defraud the United States and its 

department and agency of their lawful right to 

conduct their business and affairs free from 

deceit, fraud, misrepresentation, and theft . . . in violation of Title 18, United States 

Code, Section 371. 

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' 

1990), aff'd, 968 F.2d 22 (10th Cir. 1992). Certainly, it is 

permissible to charge a single offense but specify alternative 

means to commit the offense. See Braverman v. United States, 317 

U.S. 49, 54 (1942); United States v. Sullivan, 919 F.2d 1403, 1435 

n. 53 (10th Cir. 1990), cert. denied, 1992 WL 202904. Likewise, 

the charge against Mr. Hauck was essentially his agreement with 

others to both defraud the United States and to commit other 

substantive offenses. 

For the foregoing reasons, the conviction is AFFIRMED. 

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