Opinion ID: 521545
Heading Depth: 2
Heading Rank: 3

Heading: Wheelers, Dealers or Conspirators?

Text: 17 The Government charged James and Weldon Hays with illegally receiving pecuniary benefits in connection with the above described loans. Those benefits are as follows: On September 9, 1982, First Financial Mortgage Company (hereinafter First Financial) paid James and Weldon Hays each $15,000 in fees earned by First Financial on the Plano loan. Later, on October 14, 1982, First Financial paid James Hays $12,500 for loan expenses on the Hubbard II loan. Additionally, James and Weldon Hays were paid $44,400 in commissions from First Financial for the HLH Joint Venture loans. On December 30, 1982, Lancaster issued a check that was signed and approved by James Hays in the amount of $22,008 to First Financial. That check was then used to purchase another check in the amount of $22,008 which was payable to Weldon Hays. Despite receiving these benefits, James Hays, on January 11, 1983, signed a representation letter in which he failed to disclose his receipt of fees as well as his ownership interest in an entity to which Lancaster had loaned money. 18 In addition to the above mentioned benefits in connection with the loans made by Lancaster, the government charged Weldon and James Hays with receiving other improper benefits as a result of their savings and loan activities. Namely, in October 1982, $46,000 of Lancaster's funds were used to purchase two Cadillacs which were used by James and Weldon Hays. Moreover, Weldon Hays used his Cadillac before he was employed by Lancaster and the automobile was later purchased by the HLH Joint Venture from Lancaster. Finally, as mentioned previously, Weldon Hays received $245,330 for his interest in the HLH Joint Venture Partnership upon its dissolution. 19 On October 28, 1987, a federal grand jury returned an eleven count indictment against James Hays and Weldon Hays. Count 1 of the indictment charged James and Weldon Hays under 18 U.S.C. Sec. 371 with conspiring to violate 18 U.S.C. Secs. 657 and 1006. The remaining ten counts charged James Hays with the misapplication of funds belonging to a savings and loan institution, making false entries and the illegal receipt of loan proceeds in violation of 18 U.S.C. Secs. 657 and 1006. Weldon Hays was charged with aiding and abetting in all of the above counts with the exception of Count 9. 20 The defendants entered pleas of not guilty to all counts. A jury trial ensued during which the Government called forty-one witnesses and offered somewhere in the neighborhood of 300 exhibits. Thereafter, the jury found James Hays guilty on all counts of the indictment except for Counts 5 and 6. Weldon Hays was convicted on all counts with which he was charged except for Counts 5 and 6. James Hays was sentenced to five years' imprisonment on both Counts 1 and 2 with the sentences to run consecutively. On each of the remaining counts, James Hays was sentenced to five years' imprisonment with the sentences to run concurrently with each other and the Count 1 sentence. James Hays was fined $60,000. Weldon Hays was sentenced in an identical manner, except that his fine was assessed at $55,000. The defendants thereafter timely appealed.