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United States v. Mosley

March 26, 1986


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 82 CR 401-Susan Getzendanner, Judge.

Author: Grant

Before BAUER and FLAUM, Circuit Judges, and GRANT, Senior District Judge.*fn*

GRANT, Senior District Judge.

Defendant-Appellant challenges his conviction, after a bench trial on stipulated facts, for two counts involving a conspiracy to commit fraud against a federally funded youth program. An indictment charged defendant-appellant and codefendant, Brantley, who was tried separately by a jury and whose appeal, No. 84-2131, was heard on the same day as the instant appeal, with one count of conspiring to commit fraud against the United States, in violation of 18 U.S.C. § 371, and one count of transporting a fraudulently obtained security in interstate commerce, in violation of 18 U.S.C. § 2314. The indictment also charged Brantley separately with four unrelated counts. We affirm the conviction.


Before trial to the bench, the parties stipulated to the facts. The stipulated facts and exhibits reveal the following:

Co-defendant, Brantley, and two other individuals founded a community youth organization in Chicago known as Afro Youth Community [hereinafter referred to as AYC]. Brantley and his cofounders designed AYC to provide programs for disadvantaged youth.

After AYC received funding from the Illinois Department of Children and Family Services in April 1976, Brantley became AYC's President and Executive Director. Brantley's friend, defendant-appellant. Mosley, a Detroit attorney, became the Chairman of AYC's Board. Mosley also owned the property that AYC rented.

AYC purchased furniture on credit from Wieboldt's Department Store, a Chicago retailer. After the Department of Children and Family Services told Brantley that they would not pay outright for the AYC furniture purchased from Wieboldt's, except on a yearly pro-rated basis, Brantley and Mosley raised the alternative of leasing AYC's furniture with the other AYC Board members. Mosley indicated that he would investigate various leasing firms and find a suitable candidate.

A short time later, Mosley and Brantley stated that AYC would lease its furniture from National Furniture and Equipment Leasing Company [hereinafter referred to as National Furniture]. As part of the agreement, national Furniture purchased all of AYC's furniture and equipment and leased it back to AYC. In addition, National Furniture reimbursed AYC for payments that AYC was making to Wieboldt's Department Store for the furniture and to the Hyde Park Bank for an automobile loan.

Unknown to the AYC Board, Mosley had created National Furniture in July 1977 when he traveled to the home of his aunt, Ruby Alexander, in Collierville, Tennessee. Mosley drafted the legal documents for the business giving Alexander's farm as the business address. National Furniture's articles of incorporation stated that Mosley was the President, Alexander was the Vice President, and Scott, Mosley's sister and a Detroit resident, was the Secretary and Treasurer. The Articles listed Newborn, Mosley's grandfather and owner of the Collierville farm, as an incorporator. Alexander's farm contained no National Furniture office, warehouse, store or inventory of furniture.

Mosley opened a business checking account at a Collierville bank listing Alexander and himself as the authorized signatures. The bank sent National Furniture's account statements to Alexander and to Mosley's law office in Detroit. All the money in the National Furniture account came from AYC. Mosley told Alexander that he was investing money from the National Furniture in September 1977.

From July 1977, when AYC began making payments to National Furniture, to February 1980, the month that AYC lost its Department of Children and Family Services contract, AYC paid National Furniture $74,341.73 for the leasing of furniture, equipment and an automobile. AYC had originally purchased these for $15,968.80. Throughout this period, AYC remained inadequately furnished and in great need of replacement furniture.

National Furniture deposited AYC's payments in its corporate bank account, in a bank account for Moments of Truth to which Mosley's Mother was a signature and in Mosley's law firm account. Moments of Truth received AYC checks totaling $7,316.66 ...

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