WASHINGTON - The federal jury that began deliberating Lance Wilson's fate here this week could convict the former PaineWebber Inc. vice president on conspiracy charges, even if it finds that none of his actions were in themselves illegal, according to attorneys and the judge in the case.
In 20 out of 21 counts pending against him, Wilson is charged with making false statements and defrauding the Housing and Urban Development Department by writing bond financing commitment letters solely to help a codefendant, Leonard Briscoe, obtain Urban Development Action Grants for Florida and Texas housing projects.
The letters were "bogus," according to the prosecution team headed by independent counsel Arlin Adams, because Wilson and PaineWebber never determined that the projects were financially viable, as the letters said, and never honored the commitments.
Wilson's attorneys say those charges, as well as the government's allegation that he provided illegal gratuities to former HUD Deputy Assistant Secretary DuBois Gilliam, are "trumped up." They point out that the burden is on the government to prove "beyond a reasonable doubt" Wilson's "intent to defraud."
The 12-member jury, which yesterday suspended deliberations until Dec. 28 for the holiday, must also unanimously agree on each separate charge if it is to convict Wilson.
But even if he is found innocent of any specific criminal act, attorneys said the jury could convict him if it believes his otherwise innocent actions had the effect of carrying out crimes and a conspiracy perpetrated by Gilliam and the other defendants.
Under the broad federal anti-fraud and conspiracy statutes, "the crime was the agreement" to try to get grants from HUD through the use of bribes, illegal gratuities, and false bond financing commitments, said assistant U.S. Attorney Daniel Gelber in his closing arguments.
To be found guilty, Wilson and the other defendants "don't need to succeed." They need only to have been aware of the agreement and "involved in one overt act to carry the conspiracy out," Gelber said. The overt act, for example, could be the writing of one of the financial commitment letters.
A 70-page set of instructions to the jury, written by U.S. District Court Judge Stanley Harris in consultation with both the defense and prosecution, confirms that point: "The overt act need not be criminal in nature if considered separately and apart from the conspiracy. It may be as innocent as the act of a man walking across the street or driving an automobile or using a telephone."
Wilson's attorneys pointed out that none of the prosecution witnesses had any personal knowledge that Wilson committed crimes or was involved in the alleged conspiracy.
But the judge's memo says that since a conspiracy "generally is characterized by secrecy," the government does not have to prove that Wilson agreed verbally or in writing to participate in the criminal agreement.
"You may infer the existence of an agreement or understanding from his actions and the circumstances," it says.
The memo describes the broad reaches of federal conspiracy law. The defendants can be found guilty if their actions were only "dishonest" and had the effect of "undermining the lawful functions" of the government or "depriving it of the honest and loyal services of a public official," it says.
"Conspiracy to defraud the United States encompasses any agreement, the purpose or effect of which is to obstruct, interfere, impair, impede, or defeat lawful functions ... by dishonest means," the judge said. "The gist of the offense is a combination or agreement to disobey or to disregard the law."
The memo notes that the jury may also decide Wilson "aided and abetted" other defendants in carrying out crimes, even if his own intent was to act legally.
For example, if the jury decides that Briscoe intended to defraud HUD by arranging to submit false commitment letters and Wilson was aware of this, Wilson could be seen as aiding and abetting Briscoe by writing the letters, regardless of his own intent.
Even the letters themselves need not be entirely bogus to be judged fraudulent, the memo says. To convict Wilson, the jury could decide that only one statement in the letters - such as the statement that he performed "due diligence" on the projects or would provide financing without credit enhancement - was "false, fictitious, or fraudulent."
The prosecution hammered that point home in the hours before the jury began its deliberations.
"You know they were false from common sense," since none of the three commitment letters Wilson wrote for Briscoe were ever honored, Gelber said.
Briscoe had to hire employees to search for financing for two Florida projects Wilson's letters had promised to finance. One of those - the Wedgewood Plaza mall in Riviera Beach, Fla. - was never built because Briscoe was unable to obtain enough commercial leases to make financing viable, Gelber said.
Also, despite Wilson's pledge of support in a January 1987 letter, Briscoe financed the other project - the Belle Glade apartments in Palm Glade, Fla. - only after it grueling two-year search, Gelber said. A $9 million bond issue for the project was privately placed in March 1989 through Homans, McGraw, Trull, Valeo & Co. of Boston.
Wilson's attorneys pointed out that the letters were not "legally binding" on PaineWebber and could be withdrawn at any time. But that does not protect him from the charges, Gelber said.
"He's on trial for providing false letters. Whether they're legally binding or not, he lied to HUD," he said.