United States v. Raymond Earl Trass, James Hobby, III

The District Court dismissed an indictment because of the manner in which the government presented its case to the grand jury. The government resubmitted evidence and a second indictment was returned. The court again dismissed. The government appeals.

Appellees are real estate brokers. The indictments alleged they caused false statements to be made in documents submitted to the Federal Housing Administration to induce FHA to insure loans to persons to whom appellees were selling homes. The false statements related to the financial condition of the home buyers (their assets and liabilities, whether they were employed, the length of their employment, the amount of their earnings), and, in some instances, to the buyers’' intention to personally occupy the house being purchased.

The government’s theory is that appellees either participated with the buyers in including the false information in the documents submitted to FHA or, in some cases, themselves included the false information in the documents, sometimes after obtaining the buyer’s signature on a blank form. Appellees’ theory is that, to the extent the information furnished was false, it was solely the buyers themselves, not…