Opinion ID: 410420
Heading Depth: 1
Heading Rank: 6

Heading: John M. Brownrigg

Text: 81 A. Brownrigg's first argument for reversal concerns the evidence on which he was convicted. He contends that the evidence relative to the six counts of mail fraud on which he was found guilty was insufficient as a matter of law. We have examined the record of the trial and the arguments posited in his brief and have concluded that the argument must fail. 82 Brownrigg came to FGS the first week of April in 1979, as a friend of Fahr's. Although he was hired as a salesman, he had no previous experience in the precious-metals investment industry. He was trained by Fahr for two weeks in April, and, from all indications, he performed well almost immediately after that time. By late May or early June, on the recommendation of Fahr, he was promoted to sales manager. In this position Brownrigg trained and supervised the other sales personnel, and continued to make sales on his own. 83 It is important to note the time at which Brownrigg knew FGS was in trouble financially and that it was not covering its investors' contracts. Newham testified that he discussed FGS's financial woes with Brownrigg during the first two weeks of his employment (N. II, 103). A postal inspector testified that as of July 1979 Brownrigg knew that FGS customers' contracts were not covered (Tr. XIX, 51). The information came to Brownrigg at this time through Tom Perpich, an FGS accountant. Perpich was also said to have told Brownrigg that FGS needed at least $1,200,000 in order to cover customers' contracts. Brownrigg also admitted to the inspector that in spite of this knowledge he persisted in telling customers that their investments were covered and that he continued to instruct other salesmen to do so (Tr. XIX, 54). 84 Stanley Ainsworth was one such FGS customer who dealt with Brownrigg during this time. Brownrigg made sales to Ainsworth from May until the end of August. In their initial discussions Brownrigg assured Ainsworth that contracts like his were covered by FGS through the purchase of futures contracts (Tr. X, 40). Though Brownrigg continued to deal with him on almost a daily basis throughout the summer, he was never told a different story. Indeed, Brownrigg made several sales to Ainsworth in July, when, by his own admission, he knew that customer contracts were not covered (Tr. X, 50). 85 On this evidence alone a jury could conclude that Brownrigg was a knowing participant in the scheme to defraud as of July 31, 1979, the date of the earliest count on which he was convicted. There is also ample proof that he possessed the requisite intent to defraud. For it was Brownrigg who supervised the salesmen who made sales to customer after customer during the summer of 1979 based on assertions that their investments were fully covered. Brownrigg also had a direct role in discouraging those customers who wanted to sell out their account. He knew this to be the most direct threat to the continuation of the scheme, because he knew FGS could not meet its obligations. Brownrigg's role was testified to by a Miss Hess, who invested over $40,000 in FGS in August 1979. Her broker was Charles Hodek. When she called on September 7 to sell out her holdings, Hodek referred her to Brownrigg. Brownrigg told her that her investment was in a beautiful position and that she was in the safest [possible] thing at the time (Tr. XVIII, 56). Assured by these remarks, she decided not to sell. The next week FGS was closed. 86 The above is but a brief account of Brownrigg's role at FGS. It is enough, however, to demonstrate the basis of the jury's finding of guilt on six counts of mail fraud from July 31 to September 10, 1979. There was ample evidence to support his convictions. 87 B. Brownrigg next argues that it was error for the District Court to deny his many motions for severance. In support he urges arguments identical to those made by defendant Payne. We reject those arguments for the reasons stated in part V-C, ante. 88 Brownrigg, like defendant Fahr, makes an additional argument on the severance issue that concerns admission of testimony about a statement he made to a postal inspector. All references to other defendants were ruled inadmissible under Bruton v. United States, supra. Brownrigg argues that the omitted references to the other defendants were exculpatory as to him, because they tended to show that the others were more knowledgeable than he about FGS hedging activities, that others were in actual control of the hedge accounts, and that he was not part of the upper level of the company. 89 The argument is unpersuasive. As we noted in part VI-B, ante, one must make a showing of prejudice to overturn on appeal a district court's decision to admit a defendant's statement in edited form in order to proceed with a joint trial. United States v. Cleveland, supra. The omitted references to the other defendants, even when viewed in the context of Brownrigg's argument, are at best exculpatory in an indirect sense only. One could always argue that more inculpatory evidence admitted as to co-defendants has the effect of minimizing one's own involvement. This possibility, however, falls far short of the showing of prejudice required for reversal of the trial court's decision. 90 C. Brownrigg's arguments for reversal involving alleged prosecutorial misconduct and the presence of an alternate juror during jury deliberations are identical to those rejected in parts III-B and IV-B, respectively. We reject them here for the same reasons. 91 D. After review of the entire record and consideration of the briefs of counsel, we are satisfied that defendant Brownrigg received a fair trial and that there was ample evidence presented to support his convictions. Accordingly, the judgments of guilty on counts I, II, V, IX, XI, and XIV as to Brownrigg are affirmed.