Farmer v. United States

223 F. 903 | 2d Cir. | 1915

LACOMBE, Circuit Judge.

[1, 2] The indictment contained five counts; the fourth and fifth were dismissed with the consent of the government; we need consider only the first three. Counts 2 and 3 charged a violation of section 215 of the Criminal Code. Count 1 charged a conspiracy (section 37) to commit a violation of that section (215). Under the first count, therefore, the government had to sustain a heavier burden of proof as to the intent of the conspirators than under the other two. Under 215 it is sufficient to show an intent on the part of the deviser or devisers of the scheme to defraud some one; it is no longer necessary t:o show an intent to use the mails to effect the scheme, as it was under section 5480, U. S. .Rev. Stat. The deviser of the scheme may, at the time he planned it, have intended to avoid all use of the mails in carrying it out; nevertheless if, in carrying it out, he does use the mails, the offense is committed. There are two elements of the crime, a scheme intended to defraud and an actual use of the mails; both, of course, must he proved to warrant conviction. When, however, the charge is conspiracy to commit the offense specified in section 215, it is necessary to prove an intent, not only to defraud, but also to defraud by the use of the mails. The draftsman of the indictment fully appreciated this; the first count charges an intent to use the mails as well as an intent to defraud.

[3, 4] Upon a careful examination of the record we are satisfied that the government failed to prove an intent by the conspirators named in the first count to use the mails to effect the scheme. Direct evidence of intent is rarely available; it may he shown by circumstances. Usually when the scheme is unfolded it is apparent that it could not he carried out without using the mails, and a jury is therefore warranted, without further proof, in drawing the inference that those who devised the scheme intended to use the mails. We do not find in this record sufficient to warrant the inference that on January 2, 1910, when the conspiracy was formed, the conspirators intended to use the mails. The scheme here revealed is markedly different from others which have been before the courts (mainly under old section 5480), where it was evident that the scheme could not he successfully carried out without using the mails. Thus in the old “green goods game,” no personal interview could be risked until, after an exchange of letters, it appeared that some individual was a person who might be safely trapped. When the scheme is to dispose of stock at inflated prices, advertisements have to he published calculated to bring inquiries by mail from many different places; in that way only can a sufficiently broad field be found for the dissemination of the securities. But in this scheme different tactics are required. Advertising in the hope of bringing responses from persons eager to pay $10,000 or $25,000 or $50,000 for a few books world he a waste of money. The only practical method is to find out by inquiry the names of persons likely to be fooled, and then to have them interviewed by one or more glib talkers and thus persuade them to buy through ingenious representations and the exhibition of letters, telegrams, newspaper dippings, samples, etc. When hooks in seis 'are bought, presumably they are sent by express, and the person who effected the sale personally takes the check that pays for them. Since inference is not enough to make out full intent under count 1, and there is no direct evidence of it, we think conviction under this count should he reversed.

Coming now to the conviction under counts 2 and 3.

[5] Error is assigned to the admission of much of the documentary evidence on the ground that the letters, etc., were taken from defendant Farmer against his will in the violation of his constitutional rights. The facts are these: James J. Farmer was arrested November 14, 1912, and held to bail, which was at once furnished. He then went to his office, which was also the office of the corporation defendant, and- found some post office inspectors, who had a subpoena duces tecum calling for all papers, etc., and were threatening to remove them. A heated discussion followed, at the close of which a Mr. Weill, a lawyer who was present as Farmer’s legal adviser, asked the officers if they would give their word that, if the bags were sealed, they would not be opened until defendant Farmer should appear before the grand jury on November 15, 1912. The promise was given, the papers were put in the bags, the bags were sealed, and Weill went with the officers and the bags to Post Office Building, where the bags were deposited in an empty room. They remained in the custody of the government until the trial.

For the purposes of the present assignments of error, without discussing the question or considering the argument of the government as to the soundness of the two assumed propositions, it may be assumed :

1. That the officers exceeded their authority in removing the papers.

2. That the acts of defendant and his counsel (Weill) on the occasion of their removal did not operate as a waiver or estoppel to defeat defendant’s right to assert his constitutional privilege and to insist on their return.

The case of Weeks v. U. S., 232 U. S. 383, 34 Sup. Ct. 341, 58 L. Ed. 652, however, does not apply, because in that case defendant made “timely” application “in due season” for the return of his papers. In the case at bar no application for return was made for nearly two jre'ars, when upon a petition dated October 5, 1914, application was made to the trial judge on October 10, three days before the trial for such return. Thereupon “by consent of counsel for defendant and for the United States” the court directed that the papers should be “placed in the custody of the clerk of the court, and that defendant and his counsel should have access to said papers and full opportunity to read and inspect the same, and to make copies if desired.” This was done.

In the course of the trial defendant Farmer offered to prove that the papers were obtained from him involuntarily; he made no offer to prove that he had applied to any federal court for their return prior to the motion made in October, 1914. We think that defendant’s acquiescence in the disposition made of the papers by the court operated as a waiver of any right he might have had to ask for their return to him.

[6] It is contended that there was a failure of proof under the second and third counts, because the charge was that defendants devised a scheme to defraud divers persons, whose names were to the grand jury unknown. Defendants’ argument treats this as if these counts charged two schemes, one to defraud Mrs. Preston, the other to defraud Evans. They tried to introduce proof to show that when the indictment was found the jury knew that both these persons had been defrauded; the testimony was excluded and exception reserved. The objection now urged may be disposed of on the assumption that the grand jury did know of the defrauding of these two persons in 1911 and 1912. The scheme charged in these counts was a general one, not directed to the defrauding of any particular individual then identified, but of any and all persons whom the devisers of the scheme might thereafter persuade to buy their books. What the indictment charged was the intent of defendants on January 2, 1910; that intent was to defraud, but who the persons to be defrauded would be presumably defendants themselves did not then know. 'Mrs. Preston-was not approached until the latter part of 1910; Evans not until July, 1912, two years and six months after the scheme was devised. If defendants did not on January 2, 1910, devise a scheme against either of these persons, the grand jury was quite justified in charging that they (the grand jurors) did not know the names of the persons whom on that day defendants intended to defraud. It is expressly held in Durland v. U. S., 161 U. S. 306, 16 Sup. Ct. 508, 40 L. Ed. 709, that omission to state the names of the parties intended to be defrauded is satisfied by the allegation, if true, that such names are to the grand jury unknown. Knowledge by the jury that the schemers defrauded Mrs.. Preston a year after they devised their scheme, and Evans 2% years after such date, would not show the untruth of a statement that the jurors did not know the names of the individuals whom the schemers on January 2, 1910, intended to defraud. Defendants were fully advised what charge they had to meet under each count. Devising a scheme to defraud generally any one whom they might catch in their net would not by itself constitute an offense under section 215. The actual use of the mails in furtherance of the scheme was a fact essential to be charged and proved. The second indictment charged the mailing of the Preston letter; conviction under that count could not be secured unless the mailing of that letter in furtherance of the scheme were shown. The mailing merely of other letters to other persons would not sustain conviction under this count. The same is true as to the Evans letter charged under the third count.

We do not see why all rights of defendants were not fully protected under this indictment. If Larkin v. U. S., 107 Fed. 697, 46 C. C. A. 588, be interpreted as holding otherwise, we cannot concur with it.

[7] We may next refer to the proof. Leaving out of consideration the other parties whom the government indicted, but (except for the one who pleaded guilty) did not convict, there is abundant evidence that on January 2, 1910, John J. Farmer, Hartley and Glenn Farmer (who was not tried under the indictment) did devise a scheme to defraud. Evidence properly admitted to show their intent indicates that they were engaged in this enterprise for a year or more before that time; continuing in it after the Criminal Code went into effect (January 1, 1910) was in law the devising of a scheme on the date charged. The scheme was of the sort set out in the indictment. Of course, at the time they did not have in mind all the particular individuals to be defrauded in this way; they contemplated defrauding any and every one whom they could persuade to part with his or her money. This is proved beyond any possible doubt, reasonable or otherwise, as to all three. The correspondence passing between them, notably between J. J. Farmer and Hartley, reeks with fraud in every letter, except the few written in curt business phraseology, so that they could be shown in court, if necessary, to present the appearance of an honest producer of books, extra illustrated and handsomely bound, dealing at arm’s length with a purchaser, who took his own risk of effecting a resale. That the letters passing between the two convicted defendants, the one on the firing line keeping the one at headquarters advised as to his every move, were in furtherance of the scheme, no •intelligent mind can for a moment doubt.

[8] The indictment letter charged in the second count, 'mailed by J. J. Farmer to Evans, Glassport, Pa., July 29, 1912 referring to his contract, notifying him of the sending of the books, acknowledging receipt, of $500 and notes for $3,400, and congratulating him on his securing two rare and valuable sets of books, was certainly in furtherance of the scheme charged. The defrauding of Evans would not be fully accomplished till the notes were paid; it was important to keep him satisfied with his bargain and unsuspicious until then. The sale was effected by the same fraudulent methods, charged in the indictment and repeatedly practiced by all three (the convicted defendr ants and Glenn Farmer); the government’s case on .this count was fully proved.

[9] The indictment letter under the third count was written and mailed by J. J. Farmer to Mrs. Preston March 21, 1911. By that time the books had been delivered and the price paid. It refuses a request to send her separate bills for the separate sets sold her stating:

“Mr. 6. F. Farmer is a dealer in special editions, for himself and on his own account. Any goods that he got from this company, he paid for, and we know nothing about the price for which they were subsequently sold, nor to whom they were sold. Consequently we cannot comply with your request to furnish you individual bills for the sets mentioned.”

If it stood alone, this letter might not be significant, but with the illumination of the situation which the record affords we think it may fairly be considered as written in furtherance of the general scheme. The scheme was not to defraud a particular individual (e. g., Mrs. Preston), but to defraud whomever the parties to the scheme could persuade to buy. Having been once swindled by Glenn Farmer and Hartley, Mrs. Preston and others in Boston to whom she might relate her experience would probably be immune to- the further blandishments of- these two enterprising agents; but if thé man, who got up the books and was evidently the head of the enterprise could persuade her that the publishing house knew nothing of Glenn Farmer and his coadjutor in the swindle,' except that Glenn had bought books from J. J. Farmer and resold them entirely on his own account, possibly Boston might still remain a territory receptive of the J. J. Farmer books, when cultivated by other of his enterprising agents.

[10,11] Counts 2 and 3 charged that the indictment letters were “placed in the post office in the city of New York.” The evidence showed that these letters reached the respective addresses, in due course, inclosed in envelopes postmarked “New York, N. Y.” The suggestion that each letter should have been excluded, because it might have been deposited in some substation or in a lamp post mail box is too frivolous for consideration. So, too, is the contention that because the government charged that a dozen persons entered into the original scheme, and failed to prove the guilt of all of them, therefore there was a fatal variance between the scheme pleaded and the scheme proved.

[12] The instances of frauds of exactly the same sort as those charged in the indictment, committed by one or more of the. defendants prior to January 2, 1910, were admissible to show intent. There is nothing in our opinion in Marshall v. U. S., 197 Fed. 511, 117 C. C. A. 65, to support a contrary contention. The Marshall Case, as we pointed out on motion for its reargument, was sui generis; there was nothing in the opinion to indicate that the wholesome practice of showing intent by a party’s own acts was to be abrogated. A single sale of a single book, even at an exorbitant price, might not necessarily satisfy one that there was intent to defraud; but repeated similar transactions might well, as in the case at bar, demonstrate aii intention to conduct a swindling enterprise.

[13] Plaintiffs in error, referring to letters passing between the defendants while they were carrying ont their scheme, cites U. S. v. Ryan (D. C., E. D. Ark.) 123 Fed. 634. Without inquiring whether that case was or was not corred ly decided under old section 5480, it is sufficient to say that under section 215, Criminal Code, conviction was had in this case only upon the indictment letters set out under the second and third ' counts. The letters inter partes were clearly admissible as showing intent and casting light upon the methods of the scheme devised.

Only three alleged errors in the charge have been argued. The first deals with the conspiracy count already disposed of. The second is concerned with transactions prior to January 2, 1910, which has been discussed above. The third is based upon an exception “to the statement contained in the charge that the jury can convict under the indictment if they found separate fraudulent schemes.” The disposition made of the conspiracy count makes it unnecessary to consider this.

The judgment is reversed as to the first count and affirmed as to the other two; such affirmance sustains the sentence.