Thе eleven defendants herein were directors of Long Island National Bank and were indicted for conspiring to misapply funds of the bank in contravention of section 592 of title 12 of the United States Code (12 USCA § 592). Of these, Allen, Wagner, and Ongaro were granted a severance and allowed to plead guilty to other charges and the other eight were tried and convicted. One of the eight, Julius link, received a suspended sentenсe, and did not appeal; The remaining seven were convicted, and have taken this appeal from the judgment of conviction.
The indictment is a bungling instrument, but it purports to charge that the defendants
It is alleged in substance that as a part of the conspiracy Julius Link should purchase No. 3701 Grand avenue, Astoria, which tho bank then occupied under a lease, for tho sum of $117,500; thаt upon the completion of this purchase the premises would become the property of the hank; that thereupon the title should he conveyed by link to the hank through a dummy for $34,172.38 in excess of the pricе paid by link to the original owner; and that this excess should be divided among the defendants and converted to their own use. It is further alleged that it was a part of the conspiracy that Link should also purchase for thе hank an adjoining lot of land for $53,750, transfer the title to the bank at $60,500, and that the defendants should convert the difference between these two sums, amounting to $6,750, to their own use.
There was ample evidence that the dеfendants arranged to have link purchase the first parcel, that he obtained it at a cost of $117,500, and that the bank thereafter took title through a dummy at an advance of $34,-172.38 which was divided among tho directors. Thе principal defense on the merits was that the defendants believed link had purchased No. 3701 Grand avenue on his own account, had turned it over to the hank at a profit, and was generous enough to divide this profit among his fellow directors. The jury evidently regarded this defense as fallacious, and adopted the government’s theory that in the purchase Link acted as agent for the hank, that upon the purchase the property in equity belonged to the bank, and the $34,172.-38, divided among the defendants after he had conveyed title to the hank through the dummy, were corporate assets which they converted.
There was in the same way ample evidence that the second transaction was carried out as proposed, and that the excess of $6,750 over cost was misapplied by placing it to the credit of a “pool,” of which thе defendants were members.
The difficulty with the government’s case is that the indictment charges a single conspiracy involving both of the purchases of real estate, and that the proof indicates two consрiracies. It may well he that a conspiracy to defraud may be broad enough to embrace the, employment of various ways and means or agencies not specifically in mind when the conspiraсy originated. This tho proof in a mail fraud ease often shows. Wilson v. United States (C. C. A.)
But there is no evidencе either that, when ]jink contracted for the first lot, or when the conveyance through a dummy at an advance price was arranged in October, the directors had in mind the purchase of the second lot through Link or the addition of $6,750 to the price he was to pay, or the misappropriation of that sum. The first evidence of any plan to purchase another lot appears in the minutes of the directors’ meeting of November 9, 1927, when the sеcond purchase was discussed and authorized at a price not to exceed $81,-000. The negotiation for this purchase was not taken up with the owner until November 20, the contract was not entered into by Link until Nоvember 28, and the sale was not completed until a month later. It is nothing but guesswork to say that the second purchase was contemplated when the first was undertaken or that tho two transactions were part оf a general plan. Indeed it seems more likely that the officers of the bank decided to add to the land for its site after the plot which it was occupying had been acquired, and when they had reached this conclusion formed a plan to misappropriate further assets in a way which had proved lucrative in the ease of the first parcel.
The second scheme was not designed until three weeks after the first had actually ended. The first, if a separate conspiracy, was barred by the three-yeаr statute of limitations when the indictment was found on November 13, 1930. , This is true whether it ended on October 18 or November 11, 1927. Its expiring life could not be revived by the breath of a new and different conspiracy entered into (even if we fix the origin of the first conspiracy as late as October 1) some five or six weeks later.
Thus we have proof of two conspiracies under an indictment alleging a single one, and a conviction for bоth when the first was barred by the statute of limitations.
There was, we are persuaded, a failure of proof of the single conspiracy alleged, which amounted to a fatal variance. Tinsley v. United States (C. C. A.)
The court left it to the jury to find a single conspiracy, but-we can discover no basis in the proof for so doing.
Even if we assume that the indictment could be read as setting forth two conspiracies which might properly be joined, the question of the guilt of the defendants for the first conspiracy could not be submitted to the jury when the cause of action on that conspiracy was barred by the statute of limitations. The trial judge submitted the ease to the jury only upon the theory that it could convict if it found a single conspiracy, and stated that to find the defendants guilty with respect to the second transaction it must find there was a continuing conspiracy throughout. He also refused the request of the counsel for Siebricht that, if the jury found the two purchases of property were unrelated and that in the second transaction the defendants did not plan to misapрropriate assets, there could be no conviction. Thus the court relied wholly upon a single conspiracy of which we think there was insufficient proof.
Upon the record presented we are of the opinion that the judgment of conviction must be reversed. We may add that we reach this conclusion with regret because proof of serious infractions of the banking law seems to have been ample, though the culpability of the defendants is mitigated by their restorations to the bank of their misappropriations.
The assistant in charge of - the trial called the hank directors Wagner and Allen as government witnesses. In the course of the examination he asked them in substance whether they had been promised any consideration for testifying. To this they answered: “No.” He also asked them whether they expected some consideration from the court, to which they replied: “Yes.” It was shown by the affidavit o£ the assistant, after the trial, that, if they would plead guilty to the indictment and would testify in behalf of the government in other cases, it had been agreеd that the United States attorney would dismiss other indictments pending against them and would recommend to the court a suspended sentence under the indictment in this -case to which their pleas of guilty would be entered. Whethеr or not the attorney in his zeal to minimize a lack of credibility of these defendants felt justified in putting sueh questions and obtaining such answers on the ground that any mitigation of sentence in this case would rest with the court, there сan be no doubt that they were misleading. The trial court refused to set aside the verdict because the testimony of these witnesses on the merits was of no great importance, and we are inclined to agree with him. But the conduct 'was reprehensible, and we regret that we cannot pass over it in silence.
The judgment of conviction is reversed.