*1 America, UNITED STATES
Appellee, Jr.,
Lloyd DIXON, Appellant.
No. Docket 75-1317. of Appeals,
United States Court Second Circuit.
Argued Nov. 12, 1976.
Decided March *3 Buffalo, Fahringer,
Herald Price N. Y. Green, Roll, (Lipsitz, Fahringer, Schuller James, Buffalo, Y., counsel), N. & appellant. Justice, issuer, Plaxico, year (i) fiscal Dept, largest H. Robert Arcara, aggregate U. (Richard D. J. amount indebtedness out-
Washington, C. York, standing during peri- time of New such Western District Atty., S. od, (ii) and Dennis P. the nature of the indebtedness C. Stewart Robert Buffalo, Y., Shirley Baccus- of the transaction which it O’Keefe, N. counsel), C., incurred, (iii) Lobel, Washington, D. the amount thereof out- standing as practicable of the latest appellee. date, (iv) paid the rate of interest LUMBARD, FRIENDLY Before thereon: MULLIGAN, Judges. Circuit (1) Each director or officer of the FRIENDLY, Judge: Circuit issuer; (2) Each nominee for election as a I. *4 director; and, Dixon, Jr., the was Lloyd Appellant (3) Each any associate of such di- James- Corporation of AVMof president rector, officer or nominee. vot- York, of town, a manufacturer New Instructions. Include the name subject to became which ing machines person of each whose indebtedness is of requirements reporting and proxy the described and the nature of the rela- (the Act Exchange of the Securities tionship by reason of which the infor- of the addition as a result Act) in required mation is be given. to of 1964. amendments in the 12(g) of § 2. This paragraph apply does not to of violations from arose prosecution His any person aggregate whose indebted- the Act. of provisions those $10,000 ness did not exceed per- or 1 these, with the 14(a), deals of § One assets, cent the of issuer’s total which- provides that: It proxies. of solicitation less, ever is any during at time the any person, period for specified. be unlawful It Exclude in the shall deter- by any of the mails or use mination of by the the amount of indebted- instrumentality of interstate ness all particu- or amounts due from the means a facility of na- any person or lar purchases subject of for commerce to or other- exchange terms, usual trade ordinary securities for tional travel rules expense of such wise, contravention and in advances and for other the Commission as transactions regulations ordinary course and of appro- necessary or as business. 17 may C.F.R. 240.14a-101. prescribe for the interest or public the priate in provisions The other requires set of investors, or to solicit of to protection filing reports of with the SEC. The to solicit his name use of permit requirements basic are laid in down § or authorization or consent any proxy having power with the SEC to fill in the (other than security any of respect in Acting authority details. under this pur- security) registered exempted an required SEC has an filing of annual this title. of suant to [§ 12] report, known commonly as a 10-K re- port. the Securi- item authority required reports this One in such Acting under (SEC) follows, as Exchange Commission is 17 C.F.R. 210.5-04: ties and of no solicitation provided long has Schedule II —Amounts receivable person each unless may be made proxies underwriters, promoters, from di- awith “furnished is or has been solicited rectors, officers, employees, princi- and containing statement proxy written pal (other affiliates) than holders of 14A,” in Schedule specified information equity person securities of and its Item 7e of Sched- 240.14a-3. 17 C.F.R. prescribed affiliates. The schedule part: pertinent in provides ule 14A respect 210.12-03 shall be filed with § to person among each to State each the underwrit- officers, ers, directors, to promoters, who was indebted following persons em- any (other at ployees, principal or its subsidiaries and holders the issuer the last beginning affiliates) of equity than of securities of time since year affiliates, ended December he from and its and person exemption provided was not within indebtedness aggregate whom whose, for at no borrowers loans time percent of total $20,000 or 1 than more $10,000. exceeded VI less, owed, charged at Count is is assets, whichever Corporation AVM Dixon and the which period for during any time “unlawfully, wilfully knowingly” vi required are statements income related olated Exchange 13 of the Securities pur filed, owed. For the Act schedule, filing report 10-K for in exclude this poses of in omitted to include Schedule II the amount determination although such inclusion was receivable amounts all debtedness which, reflect purchases sub loans insiders like for persons such from Dixon’s, $20,000 terms, ordinary amounted to more than trade usual ject to during year. III, time advances and Counts expense travel IV and V arising in the ordi violations of the mail items such other 1341,2 statute, fraud 18 U.S.C. of business.1 nary course on three indictment, separate days “having Dixon in the District The instant devised a scheme artifice New de Western District of for the Court fraud”- —a deny II scheme to the SEC infor York, six counts. Count contained mation to knowingly, wil which it was entitled and to Dixon “did charged that proxies rules, solicit in violation of its unlawfully” proxies solicit fully and reason the failure of the quoted state the SEC’s Rule *5 violation ment to contain the information above, statement did not proxy as the concerning Dixon’s during Dixon the fiscal indebtedness —effect loans disclose prescribed by following: The schedule 210.12-03 is the 1. underwriters, directors, promoters, officers, Amounts receivable from em- ployees, principal (other affiliates) equity and holders than of securities of the
person and its affiliates. Column A Column B Column C Column D Column E
Deductions Balance at end period Additions_ Name of Balance at (1) beginning (2) (1) (2) debtor period Amounts Amounts Current Not collected2 written current off 1Include in this schedule both accounts receivable and notes receivable and provide information, pertinent date, in a note hereto such as the due interest rate, collateral, repayment any, terms of and if for the amounts receivable person from each named in column A as of the date of the most recent balance being filed. sheet cash, explain. If collection was other than in provides pertinent part This do, as attempting places follows: artifice or so to post depository office or authorized for mail Whoever, having intending devised or matter, any thing matter or whatever to defraud, any scheme or or devise artifice to by Service, sent or delivered the Postal or obtaining money by property or means for therefrom, any takes or receives such matter pretenses, representa- or fraudulent of false tions, thing, knowingly or or causes to be sell, of, delivered promises, dispose or to or by according thereon, mail to the direction alter, distribute, loan, exchange, give away, place or at the at which it is directed to be procure supply, furnish or unlawful or person delivered to whom it is ad- coin, spurious obliga- or use tion, counterfeit dressed, any thing, such matter or shall be article, security, anything or other or $1,000 imprisoned fined not more than or represented to be intimated or held out to years, not more than five or both. article, spurious counterfeit or be such executing purpose such scheme or disclosure. statement by taking receipt from from scheme ed this were channeled from AVM by share loans proxies executed His the mails accounts, # 2410-00 I, count, through two conspiracy Count holders. to these 1970 debits An 2512-02. The hybrid. was a # under 18 U.S.C. § accounts were: paragraph, opening conspired with two unindicted co- Dixon $13,800carryover from 2510-00: # Kenneth Hammond and conspirators, Jan. 28.000 Lewis, Apr. to commit offenses William 13.000 May States, was followed against the United 5.000 4.000 Feb. charged use of The first by two others. 6,500 Oct. instrumentalities of inter the mails and 11,000 Oct. proxies to solicit state commerce incomplete proxy statement. 4,068 carryover. of an means 2512-02 $ # being charged an offense The second time, At the same paying Dixon was wilfully unlawfully knowingly, “to account, back sums into the # 2510-00 and artifice to defraud devise a scheme so that November 30 the confirmation AVM, by making stockholders” of statement reflecting these loans and fraudulent entries in AVM’s false and signed by him to be sent to Ernst & in violation of 14 of the Securi books Ernst, accounting doing firm Rules,3 Proxy Act and the Exchange ties audit, AVM annual showed a total debt deny the stockholders infor in order to $67,868.08 for both accounts. Dixon law which was mate required by mation stipulated $65,368.08 that at least of this necessary to their assessment of rial and personal debt. qualifications of officers on whose In December Dixon initiated a being solicited proxies behalf the number of transactions which gave the “in furtherance of the scheme and that appearance that he had large retired a aforesaid,” artifice to defraud as portion of his debt. He instructed Lewis co-conspirators Dixon and the received $9,000 to transfer to Dixon’s father’s *6 violation of the mail mail matter account, being the elder Dixon at that fraud statute. time Chairman of the Board of AVM. guilty a verdict of on juryA returned This transaction had the effect of cancel- Dixon judge The sentenced all counts. ing the February May and debits of each year’s imprisonment one on $5,000 $4,000 from the # 2510-00 count, the sentence to be served concur- $30,000, account. Dixon paid AVM $10,000 fines of each on rently, and to which he had borrowed from a James- $1,000 I, on II and VI and Counts bank, town applied to be to the # 2510- III, V. IV and Counts 00 account. He then had Lewis take an $5,000 advance of on Lewis’ account and
II.
apply
money
to the # 2510-00 debt.
Finally,
case
presented its
Dixon retired the #
The Government
witnesses,
paid
William Lewis
account and
through two
additional
$700
Entwisle,
M.
who were re-
the # 2510-00
and Robert
account. He thus re-
secretary-treasurer
$19,100
spectively AVM’s
duced his total indebtedness to
stipulated
counsel at the time here
of December
1970.
general
its
Dixon
grant
$14,600
Lewis testified under
that
of this
question.
constituted loans
personal
used for
immunity.
purposes.
high-
that the
was
proof
practice,
left no doubt
As
his
Dixon renewed his
The
January
balance of loans to Dixon AVM loans after
aggregate
est
and used
substantially
pay
exceeded the monies to
during
off
loans from the
$20,000
by
the 10-K
bank and Lewis which
exemption from
Sched-
he had reduced
$10,000 exemption
filing
prior
year’s
ule II
and the
his AVM accounts
to the
them;
gave
may
no
about
the court
how the entries could have
be said
It is not clear
Rules,
Proxy
charge
point.
whatever else
on that
violated
February
1971 he took and defense
end. Thus on
counsel claimed that
their
advance,
$30,000
testimony
debited to the
a fresh
would establish that Dixon
account,
February
and on
22 had
# 2510-00
been misinformed —neither
$5,000
to obtain
used the account
with Government nor the defendant
called
Lewis. A
them as
repay
which to
advance
witnesses. The judge
$300
properly
brought
month
instructed
the end of the
an adverse inference
$54,400.
up
could
against
# 2510-00 total back
be drawn
either side from
so,
failing to do
United States v. Beek-
thus established that the
The evidence
man,
1946);
Cir.
out
proxy statement sent
March
Llamas,
United States v.
report filed on March
and the 10-K
1960);
the jury evidently chose to
1971 did not contain the information on
draw against
it
Dixon.
required.
Dixon’s indebtedness
was
principal
preparation
Dixon’s
defense was that he
The
proxy
state
thought
provided
rules”
for a ment
primarily
“SEC
was
the work of Entwi
$20,000 exemption, determined on the
sle. He
prepare
would
a draft based on
indebtedness,
such
year-end
basis of
rather
information as he had “and then
highest aggregate
by
than
balance
submit
it to Mr. Lewis with a copy to
year.
year-end
Dixon’s
Mr.
during
input.”
Since
Dixon for
The first draft
$10,000 exemp-
have,
balance still exceeded
would
“many, many blanks” which
rules,
seems,
tion in the
al- would call for information including a
though
paragraph
the record and briefs are not al-
on “Transactions” which was
this,
together clear on
the defense
to disclose those transactions between
encompassed an assertion that Dixon the
employees
officers and
of AVM and
$20,000
itself;
thought
year-end
balance was AVM
options
stock
purchases,
exemption
the test for
from both rules.
salaries
benefits,
and vested retirement
were,
A
principal
clarity
reason for
lack of
example,
included
the AVM
Dixon, exercising
was that
his constitu-
staff to be
up
written
in the final copy
stand;
privilege,
tional
did not take the
Entwisle. But Dixon did not inform
sought
loans;
instead his counsel
to elicit the Entwisle of the
the latter learned
evidence of Dixon’s state
of mind
of them only in 1972
grand
when a
jury
cross-examining Lewis and Entwisle.
was investigating possible bribery of mu
nicipal officials and Entwisle examined
important
most
exculpatory
this,
books.4 After
AVM in October
item
testimony
by Lewis that Sam
1972 filed
report
an 8-K
with the SEC
Hale, the Ernst & Ernst account execu
stating that:
tive, had
1967”,
said “sometime around
probably in connection with the 10-K
*7
Due to a misunderstanding
rule,
report,
that Dixon’s loans had to be re
the Company has failed to report pub-
$20,000
duced below
by year-end in order
licly outstanding loans to two of its
to avoid having to file a Schedule II. As
executives.
against this Lewis testified that at some
Information was also sent to stockhold-
time Lyons, an AVM
officer,
financial
along
ers
with a letter dated January
given
had
him the correct
information
1973, in which the board of directors de-
and that
practice
was Lewis’
pass
clared:
information regarding the accounts to
Dixon. Lewis
filing
admitted
Company
inaccu
The
has been advised
the
this,
rate 10-K after
but
the Govern
officers responsible
preparation
for the
ment did not establish whether this
of the Proxy
was
Statement and the Annu
done for
period
issue,
Report
or
al
repay
that for the loans and
the following year. Although the
ments
they
ac
thereof that
had acted in
countants
from Ernst & Ernst
they
complying
were
belief that
were
questioned by
prior
both sides
regulations
to trial— with the
of the law.5
clear that when AVM came
5. The record is
4. What became of Dixon’s certification to the
Exchange
November, 1970,
Act
the SEC
under
the Securities
was left unex-
auditors
regulations
per-
all
and forms
plained.
furnished it with
held,
Judge
we
late
Herlands
III.
very year
wrote in the
the statute was
with Dixon’s
shall deal first
We
long
appointment
before
passed and
his
VI,
counts,
two
II and
on the
convictions
bench,
prosecution
to the federal
Exchange Act.
violating the
of
Securities
only
need
establish “a realization on the
include a statement of
The failure to
part
doing
defendant’s
that he was
a
proxy
in the
state
indebtedness
Dixon’s
act,”
wrongful
Aspects
Criminal Law
of
II in the 10-K re
ment and a Schedule
Exchange
the Securities
Act of
“any provi
clear
of
port were
violations
U. of Va.L.Rev.
144-49
it is
any
regu
rule or
chapter,
of this
or
sion
added,
necessary,
only
we
that the act be
the violation of
lation thereunder
“wrongful under the securities laws and
of
made unlawful or the observance
is
knowingly wrongful
act involve
required under the terms of this
which is
significant
risk of effecting the viola-
the first clause
chapter,”
language
tion that has occurred.”
32(a).
questions be
principal
§
shown to
us are whether Dixon was
fore
While evidence
scarcely
was
need
of mind
have had the state
ed to show that
the chief officer of a
jury
and whether
a conviction
corporation required to
reports
file 10-K
properly charged.
proxy
issue
statements knew that
Peltz,
433 F.2d
In United States
the content of these was prescribed by
1970), cert.
Cir.
rule,
statute or
the testimony of Lewis
favorable to Dixon close 7 erate since the second clause but we need not resolve them. We do covers vio lations of the Act misrepre case of a that involve not have here the defendant sentations, James, Culpability see Predi manifesting an honest belief that he was cates for law. Federal Securities Law complying with the Dixon did a Sanc act,” tions: The “wrongful in the sense of our deci- Present Law and the Pro Code, Peltz, posed in when he caused the Federal Securities 12 corpo- sion show, 31, Legis. 1, (1974); Harv.J. of rate books to as of December 56 hence the 1970, inclusion of the term “knowingly,” debts of his father and of Lewis a con True, cept typically prosecution which in fact his own. Dix- associated with grounded intent, for acts may thought year-end have in on his thim- fraudulent g., Simon, see e. blerig provide escape would United States v. 425 from rule (2 F.2d 1969), different from the one that 809 Cir. existed. But cert. denied, 1235, 397 wrongful such acts are U.S. 90 “under the Secu- S.Ct. lead, they here, rities Acts” if L.Ed.2d 420 ALI as to the Federal Securi Code, very violations ties Tent.Draft 1517(a)(1). that would have been No. 3 § prevented if the Our decisions in United defendant had acted States v. Guter ma, scrupulously Cir.), with the aim of F.2d obeying the cert. de nied, (which rules would have necessarily in- U.S. (1960), correctly ascertaining them)
volved L.Ed.2d 93 rath- and United Colasurdo, avoiding er than of them. Such an in- 1971), tention to deceive is cert. enough to meet the requirements modest L.Ed.2d 116 first clause of illustrate the 32(a) when distinction. violations occur. § The trial judge apparently recognized However, this is not the end of all this and defined “knowingly” as used the matter. Both counts II and VI of in the indictment to be substantially syn- the indictment that Dixon had onymous “willfully”. with Thus he told “knowingly, wilfully unlawfully” the jury that the standard proof re- information about his omitted loans from specting state of mind was the same for solicitation and the 10-K. both the proxy counts; and 10-K This was an unfortunate choice of lan “an act is knowingly done if done volun- since, noted, guage the first clause of tarily and intentionally and not because 32(a), under which Dixon’s violations § of a mistake or accident or other inno- fell, “knowing does not use the adverbs reason”; cent “an act is done will- although ly” “unlawfully” or the second fully if done intentionally and deliberate- 32(a) imposes clause of a criminal sanc § ly”; and that ‘knowingly’ “word tion means that the defendant must be aware any person willfully knowing- who of what he was doing and what he was makes, ly made, any or causes to be not doing; ‘willfully’ word under any application, report, statement proxy and 10-K means that [the counts] or document to be filed under the defendant acted deliberately and in- chapter regulation this rule or tentionally acts, and his statements or any undertaking thereunder or con- omissions were not the result of innocent mistake, a registration tained in statement negligence or inadvertence or . which statement was false or other innocent conduct.” Such an in- misleading respect with materi- struction accords with the standards of al fact . 32(a) first clause of insofar as it suggested during 7. At least passage perceived one commentator has active the Act’s “knowingly” terms, the word in the second clause of distinction between the two see Hear 32(a) “willfully” ings is redundant and that alone before the Committee on Interstate word, operative Loss, Commerce, Foreign Regu quoted Herlands, is the supra, Securities *9 (1961). lation 1986-87 21 of On the other hand U. Va.L.Rev. at 145-46. legislators there is evidence that some of the
1397
lished that
the defendant
intended to
into “will-
“knowingly”
collapses
simply
prohibited.
commit the act
noted,
and,
it was the
we have
fully,”
as
the standard to be
may
that set
But the instructions
not have been
first clause
object to
did not
apt
convey
The defendant
to
that Dixon must be shown
applied.
trial,
he ob-
purpose,
Judge
nor does
some evil
as
to have had
this instruction
the case
suggested
not have
Herlands
in his article8 and as
here. We do
ject
Peltz,
“knowingly” as
on
we ruled in United
v.
su
where an instruction
States
However,
sought
second clause of pra.
used in the
defendant never
that word is
and the
have been needed
such an instruction.
It is true that de
32(a) would
§
counsel,
see United
away,
citing
fense
United
v.
judge
trial
read
States
(2
Fields,
346, 360,
2008,
Cir. Bishop,
412
93
v.
U.S.
States
941,
have a situa-
(1973),
do not
1972). We likewise
L.Ed.2d
did re
has “amend-
judge
quest
a trial
jury
charged,
in which
that
the
with re
tion
restating it so as
VI,
spect
indictment
to Counts II and
that “wilful
ed” the
ness,
context,
law dif-
of federal
as
in
allege a violation
used
this
means ‘bad
to
”
v.
intent,’
see Stirone
charged,
language
that
faith or evil
the
from
ferent
States,
quotes being
the inner
from United
United
instruc-
(1960),
Murdock,
389, 398,
or where
v.
4 L.Ed.2d
States
U.S.
explicate
cru-
(1933).
failed to
jury
to the
78 L.Ed.
tions
offense,
that,
see United
request
recognize
But this
failed to
elements
cial
(2
Howard,
observed,
F.2d 1131 Cir.
Supreme
as the
Court has
v.
States
was sur-
“knowingly”
1974).
meaning
“willfully” depends upon
The word
context;
in ef-
32(a)
II and VI and
in Counts
that
the content of
plusage
such,
Act, wit,
see
Exchange
treated it as
to
judge
fect
Securities
F.2d
Harvey, 428
contrast between the first and second
States
1970).
and the
that a
clauses
clear inference
person may
(although
be convicted
not
Judge Cur-
though Chief
Even
violating
a rule of
imprisoned)
whose
not re
counts
these
read
properly
tin
existence he is unaware
shows that
“knowingly”
on
charge
a
quiring
ordinary sig
“willful” has less than its
by the
been demanded
have
would
prosecutions
nificance in
for violation of
ques
32(a), a further
of §
clause
second
clause;
require
the first
and that
that an
instructions
The
remains.
tion
ment would be satisfied
lesser
intentional
“if done
willfully
act is done
showing outlined in Peltz. No one called
it is not “the
if
deliberately” and
ly
judge’s
the decision in that case to
mistake,
negligence
innocent
result of
to think
attention and there is no reason
his statement
with
taken
inadvertence”
charged in
he would not have
accordance
required
was not
Government
that the
exceptions
it if asked. While the
with
part
intent
“specific
a
prove
[Dixon’s]
counsel
charge
said that defense
law” were
disobey the
or to
disregard
exeept[s] to the Court’s refus
“generally
have
went. We
they
far as
so
proper
charge any request I have made or
al to
Schwartz, 464
in United
held
made,”
language
they
I have
denied, 409
Cir.), cert.
complaint
made no
as to
definitions
L.Ed.2d
1009, 93 S.Ct.
“knowingly” in the
“willfully”
charge
Exchange
of the Securities
Act
to violate
principal
intent
burden of the ex
specific
counts.
Proof
con-
uphold
having
was rather
the court’s
necessary
ceptions
not
law is
Act, pro-
32(a)
jury
expected
“that
is
under
told the
more
viction
is estab-
satisfactory proof
required
president
corporation
of a
of a
vided
Congressional
nition which the
in-
Committee
express requirement
of ‘willfulness’
8. “The
present
legisla-
tended the. word to have in the
possible penal-
and the seriousness of the
32§
Herlands, supra, 21 U. of Va.L.Rev. at
tion.”
‘guilty
ty
warrant
the belief that
thereunder
147^8.
prosecutions
under
intent’ will be
And such was the defi-
statute
.
.
. .
this
*10
reporting
its
rules in the
tion and of
investigation
reasonable
way of
in the
report.
If these could be
Í970 10-K
of a
expected
reasonably
than can
32(a) of the
Ex
proved,
Securities
judge
§
ex-
thought
the
lesser official”—a
Act,
stood,
it then
afforded
change
as
in somewhat
occasions
other
pressed on
years’ imprison
possibility of four
the
not sufficient
This was
ways.
different
he
(unless Dixon could show that
ment
defendant
court
apprise
to
rules,
not know of the
which
with
did
accordance
charge in
wished
must have known to be
Exchange Government
the two Securities
Peltz on
$20,000.
hardly possible)10 and fines of
re-
Nor,
court’s
when the
Act counts.
prison
any
This
sentence was as much as
context,
we find
can
in
are read
marks
judge
impose
would
and the Govern
charge to
of the
portion
error in the
respect
burden with
to criminal
ment’s
was taken.
exception
Exchange Act
intent on the Securities
IV.
was less than under
the mail
counts
practical
fraud counts. From a
stand
difficulty with re-
more
find much
We
mail fraud counts ac
point all that
the three
under
convictions
spect to the
complished,
reasonably
or could
have
Dixon
fraud counts.
mail
substantive
expected
accomplish,
was the
been
insufficient
was
the evidence
urges that
collection of additional fines. While it
fraud
of the mail
a violation
to show
has been said that
mail fraud statute
it;
to violate
conspiracy
statute or
important
“continues to remain an
tool
evi-
sufficient
was no
there
particular
in
frauds
areas
prosecuting
those
intent which
specific
dence
legislation
passed
has been
more
where
be an ele-
instructed to
properly
judge
directly addressing the fraudulent con
offenses,
see United
these
ment
duct,”
Maze,
United States v.
(3d
Klein,
645, 651,
38 L.Ed.2d
Jury Instruc-
on
1975),
also Manual
see
(1974)
J.,
(Burger,
dissenting),
C.
Offenses,
Mail Fraud
tion—Criminal
justification
there is no
in such instances
16.01-16.05,
F.R.D. 600
§§
straining
beyond
to read it
the ordi
counts
Exchange Act
that the Securities
nary meaning
language.
mail
counts
fraud
the substantive
multiplicitous.
rely
The mail fraud counts did not
the second clause of the mail fraud stat-
expressing some
begin by
We
ute,
supra, relating
any
see note 2
thought
why
prosecutor9
wonder
obtaining money
scheme or artifice “for
the mail
to include
necessary or desirable
property by means of false or fraudu-
Nothing
descriptive
counts.
fraud
Clearly Dixon did not
pretenses.”
lent
Department
issued
guidelines
that;
agen-
what he obtained was an
do
that such a situa
suggest
Justice would
The
case on
cy to vote.
Government’s
prosecu
appropriate
§
tion is
showing
counts thus must rest on
these
Attorneys’ Manu
tion, see United States
evidence of a “scheme or arti-
sufficient
170-73,
Justice,
al,
Dept, of
simpliciter.
fice to defraud”
of Dixon’s
and front
(1971). The head
violation of
SEC’s
While the statute must
reach
offending was a
proxy solicitá
or artifices
to defraud
in the 1971
some schemes
'Proxy Rules
9 F.Supp.
(S.D.N.Y.1975). Although
prosecution
was conducted
counsel
the Strike
York,
proviso
to the
Force for the Western District of
called
court’s attention at
New
apparently
polygraph
developed
of sentence and
because the
the time
introduced
facts were
support
investigation
allegedly paid
evidence to
Dixon’s
in an
statement at sen
bribes
tencing
municipal
that he had
AVM to
been unaware of
officials.
wrongdoing,
proof
he did not offer
that Dixon
proviso
32(a)
requiring
10. We read the
appeal
unaware that
rules
was
existed. The
proof that
the defendant did not know there
challenge
does not
the sentence as such.
rule;
applicable
regard
we would not
Securities Act
The 1975
Amendments
in-
by proof
it as satisfied
that he did not have
imprisonment
creased the maximum term of
rule,
accurate information
content of the
years,
under
32 to five
89 Stat. 163.
Lilley,
(S.D.
F.Supp.
United States v.
1968);
Sloan,
Tex.
cf. United States v.
*11
1565,
911,
denied,
43
421 U.S.
95 S.Ct.
“ob
involve
in themselves
that do not
(1975); to sell overvalued
776
L.Ed.2d
means of
property by
money or
taining
stock, see,
g.,
e.
United
unregistered
we have
pretenses,”
or fraudulent
false
(2
F.2d 928
Cir.
Crosby, 294
v.
States
case, and our research
no
cited to
been
denied,
984, 82
1961),
368 U.S.
S.Ct.
cert.
none,
has sustained
has discovered
599,
(1962); United States
1401
done,
When all is
said
1951,
(1975).
450
44 L.Ed.2d
See also
proof
Government’s
on the mail fraud
portion
general
cases under the
simply
counts was
that Dixon had caused
statute,
371,
conspiracy
18 U.S.C. §
the mails to be used to
proxies
receive
which makes it a crime to conspire “to
solicited
a proxy statement which did
States,
any agen
defraud the United
not contain the information about loans
cy
thereof
manner
or for
to Dixon that
it should have contained.
Henkel,
.
.
.
purpose
.” Haas v.
To hold that this alone constituted a vio
462,
249,
U.S.
510 F.2d
for reduction of sentence un-
application
44 L.Ed.2d
950, 95 S.Ct.
days
after
F.R.Cr.P. 35 within
a caveat not here
der
subject to
mandate; we
of our
intimate
receipt
v.
in United States
applicable,
1975).
to what should be done if
nothing as
1293 Cir.
Frank,
is made.
objectives
application
such an
cases all the
Although in these
conspiracy count were
charged in
judgments
conviction
was a failure of
the defect
crimes and
affirmed;
I,
II and VI are
Counts
some,
have
other circuits
proof as to
III,
conviction on Counts
judgments of
result when some
the same
reached
instructions
and V are reversed with
IV
crimes, Moss v.
were not
objectives
to dismiss.
1943);
States,
875 Cir.
132 F.2d
United
Tanner,
471 F.2d
(7 Cir.), cert.
LUMBARD,
(concur-
Judge
Circuit
(1972).
Al
34 L.Ed.2d
ring):
Circuit, speaking
though the Seventh
join
I
reached
While
result
Pell,
recently ques
has
through Judge
majority, I add this short statement
au
of this line of
tioned the correctness
my
concerning
views
the im-
clarify
reviewing
that a
thority
ground
on the
of Dixon’s conviction for mail
propriety
what offense or of
court cannot
tell
fraud,
1341. I believe that
18 U.S.C. §
conspiracy
indictment
alleged in
fenses
Judge Friendly somewhat overstates the
jury,
United States
were found
appellant’s
case in his conclusion that
de-
*14
Baranski,
559-61
incomplete
misleading
cision to mail
the conviction on
we know from
here
any “larger
unconnected to
proxies was
jury
found that Dixon
II that
Count
contemplating pecuniary loss to
scheme
validly
offense
had committed
gain
or direct pecuniary
someone
count.
conspiracy
Cf.
it,”
designed
p.
ante
who
those
Bottone,
365 F.2d
United States
contrary,
is clear from
To the
denied,
(2 Cir.), cert.
394-95
the loans which Dixon re-
record
L.Ed.2d 437
AVM,
ceived from
and which he failed
Jacobs,
475 F.2d
disclose, were interest
free.
Since
(2 Cir.),
cert.
terms were presumably
such favorable
821, 94
VI. was, however, That access porate funds. by the fully authorized terms of the only remaining question is permitted its offi- AVM charter affirm the simply we should whether and directors to borrow from the cers I, II and VI or convictions on Counts me, To this is critical. corporation. require them in order vacate the sentence of im judge to reconsider Certainly, the shareholders had every of the sentenc prisonment. Our review right expect appellant would re- judge’s us that the ing minutes convinces veal his activities to them. The Securi- was that Dixon 1934, moreover, considered determination required ties Act of imprisonment for be sentenced to should today he do so. But if we construe the Exchange of the Securities his violations mail fraud to cover statute Dixon’s lack year as selection of one Act and that the it will forthrightness, tomorrow be by the convic not affected the term was every instance in available which the af mail fraud counts. Our tions on the technically rules are violated. convictions on the Secu firmance of the expansive construction is Such nei- conspiracy Act and Exchange rities ther nor advisable.