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United States v. Kortepeter

July 22, 1940

UNITED STATES
v.
KORTEPETER; SAME V. DERBYSHIRE.



Appeal from the District Court of the United States for the Southern District of Indiana, Indianapolis Division; Robert C. Baltzell, Judge.

Author: Evans

Before EVANS, TREANOR, and KERNER, Circuit Judges.

EVANS, Circuit Judge.

Appellants challenge judgments of imprisonment and fines imposed after verdicts of guilt were rendered against them. They were charged with fraudulently diverting W.P.A. funds, fraudulently diverting W.P.A. services, and conspiring to defraud the United States by doing the aforesaid, and other illegal acts.

Their alleged misdeeds arose out of the use of W.P.A. labor and funds in laying two streets in a fourteen acre tract of farm land owned entirely by Derbyshire, who was planning to subdivide the tract. Kortepeter, his son-in-law, was the "co-ordinator" of the W.P.A., and in charge of "operations" and projects, in the county in which the land in question lay.

The errors assigned by appellants are, - the exclusion of evidence which would have shown that many other similar projects were contemporaneously carried on; that the court should not have submitted to the jury without instruction, a governmental communication issued after the commencement of the project, prohibiting W.P.A. participation in projects dealing with privately owned subdivisions such as here involved; a highly prejudicial argument made by the District Attorney; and insufficiency of the evidence to support a verdict against either defendant. In other words, all the evidence was consistent with innocence and defendants were in fact guiltless of intentional wrongdoing.

The Facts. Mr. Derbyshire conceived the idea, in 1924, of subdividing a fourteen acre tract by him owned and he platted the same, but at the time did no more. Years later when he consulted his son-in-law, Kortepeter, the latter advised him that he would first have to dedicate the streets to the county, first having the land surveyed and blueprints made of the layout of the lots and streets. Derbyshire did this, and made an offer of dedication to the county, which offer seems to have been approved by the county commissioners, but it was stipulated the dedication was never recorded.

Kortepeter was first associated with the F.E.R.A., predecessor of the W.P.A., in 1935, and became supervisor of operations in Marion County, Indiana; later, in August, 1937, he was Acting Supervisor of Operations and Acting Coordinator. As Supervisor of Operations he "worked up" and "got different types of projects that relief labor could work on."

Projects, to be accepted, required the sponsorship of a governmental agency such as a city, county, or township. Projects were first "set-up," that is, they were "made out," proposed, or originated in the operations department, where they were supervised. Of this department Kortepeter was the district head.*fn1

sufficiency of the evidence. Appellants earnestly insist that all their acts were legitimate and permissible under the law; that the roads constructed were within the purview of authorized works.

We are satisfied that the evidence was such as to require this question to be submitted to the jury.The most that can be said of the evidence is that a jury might, if it accepted defendants' version, have found them not guilty. The court was not justified in directing a verdict in their favor. The statements contained in the project proposal and Presidential letter are stubborn insurmountable obstacles in defendant' way. Their clear purport is authority for improvement of roads then existing. persuasive, too, are the bulletins, State No. 103, dated July 15, 1938, and Federal No. 190, dated July 12, 1938 (hereafter quoted), which limit the scope of projects on private lands. They would seem to clearly prohibit the type of project here made the basis of this prosecution.

There was evidence that these specific bulletins did not come to the attention of apapellant Kortepeter. Opposing this is evidence that they should have come to his attention in the course of regular governmental procedure ordinarily followed. We think it was for the jury to determine whether such governmental instructions were received by the defendant Kortepeter.

To substantiate our conclusion, we set forth verbatim the pertinent part of the project proposal which led to the issuance of the Presidential letter:

"During the Spring in Marion County an extreme amount of damage was done to many miles of bituminous and gravel roads. Heavy rains washed out many of the shoulders and portions of the road and in some parts of the county even the entire roadbed was destroyed. The present budget of the sponsor makes it impossible that the necessary rehabilitation expense be borne by that unit of government. However, the sponsor is willing to provide from the present budget sufficient funds for necessary materials and equipment. The resulting work will provide a hard surface belt only on farm-to-market highways in this county. In reconstruction and the rebuilding of these roads it is planned to widen them to meet the contemplated increase in traffic. Accordingly, the culverts, small structures and bridges must be widened and rebuilt. As they are included in the right-of-way, this necessary work is reflected in our application."

This statement discloses throughout a wording which indicates that repair of existing roads is the only legitimate basis for "projects." The words used, such as "rehabilitation," "reconstruction," "rebuilding," refer to improvements in existing roads. Other phrases specifying the kind of work to be done - widening, repairing shoulders, "culverts," confirm this impression.

It is most significant that the Letter states that "The resulting work will provide a hard surface belt only on farm-to-market highways in this county." By no stretch of liberal interpretation could the two roads or lanes here involved, one ...


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