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United States v. Beyer

January 30, 1997






Appeal from the United States District Court for the Northern District of Indiana, Hammond Division.

No. 94 CR 112 James T. Moody, Judge.

Before HARLINGTON WOOD, JR., RIPPLE, and MANION, Circuit Judges.

MANION, Circuit Judge.



Ewald Beyer III owned a modest commercial building in Michigan City, Indiana. The building was only partially occupied; the relatively low rent paid by the tenants was insufficient to generate enough capital to make needed improvements. As the building began to deteriorate, Beyer lost tenants and remarked that it would be worth more burned down. Burn it down he did in a not-so-original plan to escape his growing debt. What was more intricate, though also illegal, was Beyer's scheme to clear his property of a lien that attached when Michigan City ordered the emergency demolition of what remained of Beyer's burned building. In connection with these schemes, a jury convicted Beyer of arson and mail fraud. On appeal, Beyer contests principally the sufficiency of evidence proving he committed arson. In addition, he attributes any fraudulent scheme to his attorney. Because we find neither these nor Beyer's other arguments availing, we affirm his conviction.

I. Background

Ewald Beyer III owned a commercial building in downtown Michigan City. He financed the purchase of the building through a $125,000 loan issued by the Chesterton State Bank. The loan was secured by two real estate mortgages: a $125,000 mortgage on the commercial property and a $50,000 mortgage on the private residence of Beyer's father in Michiana Shores, Indiana. Beyer rented out the first floor of his building to various businesses and neighborhood groups, and wanted to renovate the second floor but could not secure the financing to do so. He had leveraged himself to purchase the building and had insufficient cash flow for debt service, maintenance and improvements. As the condition of the building deteriorated, he started to lose tenants. Six months before the building burned, he told the godfather of one of his children that it would be worth more burned down than standing. He even indicated that he could arrange for some people from Chicago to do the job.

At about 2 a.m. on January 28, 1990, Beyer's building burned down. It was a violent inferno that could not be extinguished completely for two days. The fire was suspicious. Distinct burn marks revealed that an accelerant had been poured across the second floor, through the hallway, and down the stairs. The fire burned through the roof in just 30 minutes--too quickly for an accidental fire. Based on the burn marks and the pattern of the fire, the fire department concluded the cause was arson.

As the fire raged, the risk that it would spread to neighboring structures increased. Beyer's burning building stood near an apartment complex and a rectory. The firefighters struggled to contain the blaze, but not without costs. Firefighter Jeff Pickford was buried under a second story brick wall that exploded and collapsed on top of him. Pickford suffered a broken pelvis, dislocated hip, shattered elbow, and permanent nerve damage.

Beyer did not tour the scene until a day later (he claimed no one had informed him of the fire), and then he showed no visible signs of being upset. When questioned about his whereabouts at the time of the fire, Beyer contended that he was with his girlfriend, Jane Cramer, in Chicago. However, Cramer testified at trial that Beyer had lied, and that he was not with her that night.

Beyer was left with an empty shell of a building, which he refused to tear down despite its hazardous condition. Michigan City ordered the emergency demolition of the building, which cost the city $43,800. The city's attorney then obtained a demolition lien against Beyer's property in that amount. Several factors set in motion Beyer's intricate scheme to keep the property but avoid the lien:

1. Beyer's building was insured by Indiana Insurance. Chesterton State Bank, which held the mortgage on the building, was named as the loss payee on Beyer's insurance policy. A loss payee such as a lending bank typically receives the proceeds of an insurance policy even if the loss has a suspicious origin.

2. In this case, although Indiana Insurance suspected that arson was responsible for the fire, it paid Chesterton on the policy.

3. At the same time that Indiana Insurance's attorney was negotiating with Chesterton concerning the bank's right to the policy proceeds, Indiana Insurance was negotiating with Beyer concerning his payout under the policy. Unhappy with its refusal to pay him anything, Beyer sued the insurance company.

4. After paying the bank, Indiana Insurance requested that the bank assign its mortgage rights ...

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