Opinion ID: 445302
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 7 Both parties on appeal have devoted considerable space in their briefs to summarizations of the testimony at trial. We fail to see, however, that a lengthy rehashing of some 15 volumes of trial transcript is necessary or efficacious for a determination of whether the pretrial rulings here contested were erroneous. With respect to the challenge to the trial court's ruling on whether the government could cross-examine McConnell as to certain matters, on the facts in this case we need only consider so much of the record as will demonstrate whether such a ruling was ever in fact made and the issue properly preserved for appeal. 8 In January, 1979, appellant James McConnell purchased a natural gas gathering line in Craig County, Oklahoma, and some 10,000 acres of adjacent leases. McConnell's gathering line was connected to a transmission line owned by the Cities Service Gas Company. McConnell and appellant Raymond Starns then formed a partnership, called Wagon Wheel Energy (hereinafter Wagon Wheel), to acquire further leases in the area, operate McConnell's line and sell turn-key natural gas wells to investors. The gas from the wells drilled for investors was to be transported through McConnell's line and sold to Cities Service. McConnell and Starns also formed, with two Tulsa real estate promoters, Fox Henderson and Sam Medley (both not charged in this case), the Pyramid Energy Corporation (hereinafter Pyramid) to solicit investors for Wagon Wheel. In addition, McConnell and Starns directly solicited investors for Wagon Wheel without benefiting Pyramid, apparently in contravention of promises made to Henderson and Medley. 9 The government alleged that the Canadian and American investors who spent approximately $3.5 million on Wagon Wheel wells were victimized by McConnell and Starns in numerous ways and, for the most part, ended up owning uncompleted or otherwise worthless wells. To perpetrate this fraud, McConnell and Starns employed the following devices, among others: they furnished false production information to a petroleum engineer and then used the resulting false engineer's report to lure investors; they paid production royalties when none were due; they had an employee falsify open-flow test charts; and they created a fictitious letter from Cities Service addressed to McConnell which was used to divert investors from obtaining information directly from Cities Service that contradicted McConnell's and Starns' own statements. There was also evidence that on at least one occasion they directed an employee to put dry ice and acid into a well in an unsuccessful attempt to persuade an investor that the well pressure was greater than it actually was. 1 McConnell and Starns also knowingly gave investors false information about the amount of McConnell's and Starns' investment in Wagon Wheel and the manner in which McConnell and Starns were to profit from investments made in the partnership's wells. Although they represented that their economic gain was to be derived from a transmission fee charged for transporting gas from producing wells through McConnell's pipeline and from reversionary interests in the investors' wells, McConnell and Starns in fact diverted more than $1.2 million of the investors' money directly to themselves with the result that many of the wells they did drill became encumbered by liens. 10 On appeal, McConnell and Starns do not challenge the sufficiency of the evidence produced at trial to convict them of the crimes charged.