Meyer v. United States

220 F. 800 | 9th Cir. | 1915

WOEVERTON, District Judge

(after stating the facts as above). [1] The strong contention of counsel for defendants is that the object and purposes of the conspiracy ended with the delivery of Paymaster Orr’s check to Goldberg or Silverstone on May 26,1908, and that whatever was done thereafter in the disposal of the check by and between the alleged conspirators was mere private arrangement between them by way of settlement, and was not potent in any way in effectuating the object and purposes of the alleged conspiracy, and therefore, the indictment having been found and returned May 31, 1911, the offense charged was barred by the statute of limitations of three years from the date of commission. The contention is thought to be the more persuasive inasmuch as it is alleged, among other things, by the indictment, indicating in part the things that Kettlewell should do in carrying out the unlawful scheme, as follows:

“And said J. A. Kettlewell should recommend and secur'e the approval of the account as shown by a certain certified bill to be filed, and caused to be filed, by said E. Silverstone with the United States navy yard, Puget Sound, Washington, purporting to be the certified bill of the Fowler Metal Company, showing delivery of said zinc, rolled sheet boiler plates, and the acceptance of same at said navy yard, Puget Sound, and that none of said zinc, rolled sheet, boiler plates had been paid for, and should recommend and secure the issuance by the paymaster at the United States navy pay office at Seattle, Washington, of a check payable to the order of the said Fowler Metal Company for the amount appearing to be due the said Fowler Metal Company according to the account so to be rendered as aforesaid, and should arrange to hare said check delivered to said 10. Silverstone or said Emar Goldberg.”

In contemplation of section 5440, R. S., a conspiracy may be entered into “to defraud the United States in any manner or for any purpose.” The indictment is drawn under this clause. That a conspiracy attended with appropriate acts and conditions may consist of a continuing offense has been settled by adjudication of the Supreme Court. We quote the language of Mr. Justice Holmes in United States v. Kissel, 218 U. S. 601, 607, 31 Sup. Ct. 124, 125 (54 L. Ed. 1168):

“The argument, so far as the premises are true, does not suffice to prove that a conspiracy, although it exists as soon as the agreement is made, may not continue beyond the moment of making it. It is true that the unlawful agreement satisfies the definition of the crime, but it does not exhaust it. It also is true, of course, that the mere continuance of the result, of a crime does not continue the crime. United States v. Irvine, 98 U. S. 430 T25 I/. Ed. 193|. But when the plot contemplates bringing to pass a continuous result, that, will not continue without the continuous co-operation of the conspirators to keep it up, and there is such continuous co-operation, it is a perversion of natural thought and of natural language to call such continuous cooperation a cinematographic series of distinct conspiracies, rather than to call it a single one. Take the present case. A conspiracy to restrain or monopolize trade by improperly excluding a competitor from business contemplates that the conspirators will remain in business and will continue their combined efforts to drive the competitor out until they succeed. If they do continue such efforts in pursuance of the plan, the conspiracy continues up to the time of abandonment or success. A conspiracy in restraint of trade is different from and more than a contract in restraint of trade. A conspiracy is constituted by an agreement, it is true; but it is the result of the agreement, rather than the agreement itself, just as a partnership, although constituted by a contract, is not the contract but is a result of it. The contract is instantaneous; the partnership may endure as one and the same partnership for years. A conspiracy is a partnership in criminal purposes. That as such it may have continuation in time is shown by the mle that an overt act of one partner may be the act of all, without .any new agreement specifically directed to that act.”

To the same purpose, see Brown v. Elliott, 225 U. S. 392, 400, 32 Sup. Ct. 812, 56 L. Ed. 1136.

It would seem, therefore, that so long as it may be shown that the conspirators are acting together for the common purpose comprehended by the scheme formed and entered upon with the view to defraud the government, and have, while so acting together, committed some overt act to effectuate the purpose, all within the three years prior to the finding of the indictment, the statute has not run. Lonabaugh et al. v. United States, 179 Fed. 476, 103 C. C. A. 56; United States v. Raley (D. C.) 173 Fed. 159.

It is true that the mere continuance of the result of a crime does not continue the crime. It was so held in United States v. Irvine, 98 U. S. 450, 25 L. Ed. 193, a case where the defendant was indicted for withholding a pension from the person for whom it was obtained. The court was of the opinion that the crime was committed when the money was received and a reasonable time had elapsed for allowing it to be handed over to the pensioner, dependent somewhat upon the circumstances of the case, and that the offense was barred, the indictment having been found practically five years after the defendant had obtained the pension. So it was held in the Eonabaugh Case, which árose under an alleged conspiracy to defraud the government out of certain public lands, that the conspiracy had served its whole purpose, under the scheme adopted and entered upon for defrauding the government out of such public lands, and was at an end when the patent had been executed and recorded in the office of the General Hand Office at Washington, D. C., and that the transfers by deed by individual conspirators to the corporation to which it was designed the lands should be eventually conveyed were not acts to .effect the object of the conspiracy. The reasoning of the eminent jurist who announced the decision, which sets forth very clearly the viewpoint of the court, is .as follows:

“The subsequent acts (that is, the acts of deeding by individual conspirators to the corporation) are not open to the same objection, for they were the acts of one or more of the conspirators. But were they done to effect the object of the conspiracy; that is, to defraud the United States of the possession and title? This depends upon whether or not that object had been effected before those acts were done. If it had, the answer must be in the negative, because of the obvious inconsistency in treating an object already effected as still requiring something to be done to effect it.”

These cases are fairly illustrative of the present situation. The indictment charges that those certain persons named in the indictment conspired “to defraud the United States of divers large sums of money by means of a certain fraudulent scheme,” defining the scheme and setting out with much particularity and detail the means by which it was to be accomplished; one of such means being for Kettlewell to secure the approval of the account as shown by a certain certified bill, showing the delivery of the zinc and acceptance at the navy yard, and to secure the issuance of the paymaster’s check payable to the order of the Fowler Metal Company, and arrange to have the same delivered to Silverstone or Goldberg. We say it is alleged that this was one of the means employed for defrauding the government out of divers large sums of money, and we inquire: Was the scheme to defraud wholly effectuated by that act? If it was, then the statute will apply, and the defendants ought to go free. If, however, it was not, and the securing of the public money beyond the delivery of the check was required to complete and consummate the fraud contemplated under the scheme adopted, then the statute has not run; for the defendants did not obtain the public funds until credit was extended by the. bank in which Orr had the public deposits. The very point was within the mind of Goldberg when he was holding the paymaster’s check from the evening of May 26th to the day of May 31st without depositing it for credit. He was holding it “to see if anything would be done by the navy pay office about stopping payment or anything of that kind.” It is clear that, if the navy pay office had gotten information of the scheme in the meantime and stopped payment, the government would not yet have been defrauded out of the public money, albeit defendants could have been indicted for conspiracy to obtain the check.

The auditor of the Seattle National Bank, the bank in which Orr kept the public funds, describes how such funds are handled. The money is deposited by the government to Orr’s credit, and as demands arise Orr checks against the account thus created, and his declaration is that a check is never paid until it is accepted by the bank and charged to the account upon the books.

It is unnecessary to go into the authorities to determine whether the issuance of a check and delivery of the same constitutes payment. Our firm conviction is that public funds arc not appropriated or converted while there is opportunity on the part of the government to prevent such appropriation, and in this case it was still within the power of the government to stop payment of this check, at least until credit was given for it by the bank of deposit of public funds against which Orr was authorized to check, or it was paid by the national treasury. It follows, therefore, that the acts of Silverstone and Goldberg in negotiating this check and securing its payment by the government were acts not merely of private arrangement between themselves, but designed and calculated to effect the object and purposes of the scheme to defraud the government of its public money, and the statute of limitations had not run when these acts were concluded.

[2] Complaint is further made that the court committed error in allowing evidence to go to the jury as to sales of zinc at various times to various purchasers for the purpose of establishing the reasonable value of the zinc sold to the government. In reality, the testimony was offered and admitted for the purpose of showing that the zinc in question was sold to the government at an unreasonable and exorbitant figure. The testimony consisted in showing the market price of zinc from time to time, running back perhaps as much as six months previous to the transactions attending the sale to the government, and, through an expert accountant, in showing from their own books sales of zinc made by the Great Western Smelting & Refining Company and the W. A. Corder Company, also running back as far as September 4, 1907.

This was an attempt to prove value by the market, which is always admissible. Zinc was being sold on the market in and around Seattle and elsewhere constantly, and the sole purpose of the testimony was to show what that market value was. We find no error in the ruling of the court.

Judgment affirmed.