« ΠροηγούμενηΣυνέχεια »
with the same particularity as to time, place, and circumstance as is required with reference to the mailing of the letter.
[Ed. Note.-For cases in point, see vol. 40, Cent. Dig. Post Office, § 72.] 3. SAME.
If the scheme is sufficiently outlined to show its design and adaptability to deceive, and to fairly acquaint the accused with what he is required to meet, it answers the requirement of the statute.
Whether the pretensions made by the accused, which are averred to constitute the scheme to defraud, constitute an agreement, valid or otherwise, or consist of representations of fact, present or future, an expression of opinion or assurance of past, present, or future conditions, it may constitute a scheme to defraud, provided only it be designed and reasonably adapted to deceive.
An indictment for mailing a letter in execution of a scheme to defraud, in violation of Rev. St. § 5480 [U. S. Comp. St. 1901, p. 3696], alleged that the defendant with others by means of advertisements published in newspapers, and correspondence conducted by and through the United States mail service, pretended to be engaged under the name "National Securities Company" in a lucrative and honorable business as a broker, dealing in grain, provisions, and stocks, and pretended to be possessed of superior knowledge concerning the business, making loss improbable, and pretended to pay interest to depositors at the rate of 6 per cent. per month, and to permit withdrawals at the depositors' election, when in fact he had no such superior knowledge, did not intend for any great length of time to pay 6 per cent. per month, nor permit withdrawals at depositors' pleasure, but intended by such false pretensions to induce deposits, for the sole purpose of converting them to his own use. Held, that the indictment sufficiently alleged a scheme to defraud, within such section.
In a prosecution for mailing certain letters in execution of a scheme to defraud, in violation of Rev. St. § 5480 [U. S. Comp. St. 1901, p. 3696], the court properly charged that defendant could not be convicted for devising the scheme alone, but that the gravamen of the offense rested in the mailing of the letters alleged in the indictment, and that in order to convict the jury must find that defendant placed or caused the letters to be placed in the post office, as alleged.
7. CRIMINAL LAW-DECLARATIONS OF DEFENDANT.
Where in a prosecution for mailing certain letters in furtherance of a scheme to defraud, it was charged that the letters were mailed, one on December 10, 1902, one on January 13, 1903, and another on January 29, 1903, and there was no evidence that defendant's admissions to a post office inspector concerning his operation of the scheme were not made after the mailing of the letters in question, such admissions were not erroneously admitted as made prior to the mailing of the letters.
8. SAME-EVIDENCE-EXISTENCE OF THINGS-PRESUMPTION OF CONTINUED EX
That the defendant had charge of the mailing of letters and literature for a fraudulent securities company in November, 1902, was insufficient to justify a presumption that he continued indefinitely thereafter in the same employment, under the rule that from proof of the existence of a certain condition of things at one time the same condition, of things, if of a continuing nature, is presumed to continue until the contrary is shown. 9. POST OFFICE-SCHEME TO DEFRAUD-USE OF MAILS-MAILING LETTERSEVIDENCE.
In a prosecution for the mailing of certain letters in furtherance of a scheme to defraud, evidence held sufficient to justify a finding that defendant mailed or caused the letters in question to be mailed.
10. SAME EVIDENCE.
Accused did business under the name "National Securities Company." He advertised to invest deposits in grain, provisions, and securities, so as to yield his customers 6 per cent. per month, and to permit them to withdraw their deposits at their election. He sent out through the mail laudatory circulars, affidavits, and letters purporting to come from others, some of which were entitled "Do you know of something, anything better?" "Our company strong, well financed, capital full paid." "Our plan infallible, has never lost a dollar. An assured success." "Our management honest, conservative, intelligent, and experienced." "Our proposition very profitable, cannot be excelled. Our profits justify it." Held, that such documents in themselves constituted evidence of the existence of a scheme to defraud.
Where, in a prosecution for mailing certain letters in furtherance of a scheme to defraud, defendant's participation in securing a certain false affidavit and laudatory letter appeared in the stock advertisements of the business in which defendant was engaged, such stock advertisements and copies of the affidavit and letter were admissible. 12. SAME.
In a prosecution for mailing certain letters in furtherance of a scheme to defraud, letters other than those counted on in an indictment, purporting to have been written by the company operated by defendant, to different persons throughout the country, and relating to transactions by the company with them, were admissible to show that the scheme contemplated the use of the mails, and as bearing on the intent with which the business was done, and the existence of a scheme to defraud.
In Error to the District Court of the United States for the Eastern District of Missouri.
Chester H. Krum, for plaintiff in error.
David P. Dyer, for the United States.
Before SANBORN, HOOK, and ADAMS, Circuit Judges.
ADAMS, Circuit Judge. Defendant was indicted, tried and convicted under the provisions of section 5480, Rev. St. [U. S. Comp. St. 1901, p. 3696], for having mailed a letter in the St. Louis post office in execution of a scheme or artifice to defraud, alleged to have been devised by him, and others, and which he intended to make effective by correspondence conducted by and through the postal establishment of the United States. The scheme as disclosed in the indictment is to the following effect: That the defendant, with others who were not put on trial with him, by means of advertisements published in newspapers and correspondence conducted by and through the United States mail service, would pretend to be engaged, under the name of National Securities Company, in a lucrative and honorable business as a broker, dealing in grain, provisions, and stocks, and would pretend to possess such superior knowledge concerning the business as would render loss improbable and would pretend to pay interest on all sums of money which any one might be induced to deposit with him at the rate of 6 per cent. per month, and permit withdrawal of any deposits at any time the depositors might desire, when in fact, he was not engaged in any lucrative or legitimate business, had no such superior knowledge, did not intend for any great length of time to pay 6 per cent. interest per month or permit withdrawals at the pleasure
of the depositors, but did intend by such false pretensions to induce the deposit of money with him for the sole purpose of converting the same, or a great part thereof, to his own use. The judgment of conviction is challenged by the defendant for three prominent reasons: Because the indictment states no offense; because there is no competent evidence showing that defendant mailed either of the letters set out in the three counts of the indictment; and because the trial court admitted irrelevant evidence consisting of certain letters emanating, or purporting to emanate, from defendant's place of business. The argument against the sufficiency of the indictment rests upon the alleged insufficiency of the averments to show a scheme or artifice to defraud.
It is argued that the pretension by defendant that he was engaged in an honorable and legitimate business, and that he had such superior knowledge of the business as to make loss improbable involves only a matter of opinion and does not create legal liability; that the pretension that defendant would pay interest on deposits at the rate of 6 per cent. per month and allow deposits to be withdrawn by depositors at their pleasure, were, in themselves, innocent, amounting only to terms and conditions of a mutual agreement, and that the denial of the reality of these pretensions adds nothing to the scheme because it was a denial of the existence of opinions, so far as they were concerned, and a qualified and evasive denial of the reality of the intention to pay the large rate of interest or to permit withdrawals by depositors when they desired. It is argued that the denials of defendant's intention to pay interest "for any great length of time" or to permit depositors "for any great length of time" to withdraw the deposits on demand afford no standard of certainty, and are of no legal significance; and that the alleged intent by means of the pretensions set forth, to secure the money of depositors and convert the greater portion thereof to his own use, states no criminal purpose because the deposit created only the relation of debtor and creditor between defendant and depositors; the money becoming the property of defendant upon the completion of the deposit. This argument is not persuasive; it dissects the averments, showing the separate elements of the scheme to defraud as if they were separately pleaded as the basis of actions at law for deceit or actions in assumpsit for the recovery of money deposited; but such is not the character of the proceeding before us.
Section 5480 denounces as a crime the mailing, among other things, of a letter in the execution or attempted execution of a scheme to detraud. This must not only be a scheme intended for the purpose of defrauding, but must contemplate as one of its essential parts, the use of the post office establishment of the United States in effecting its purpose. The gist of the offense is the mailing of the letter. Congress, under the constitutional grant of power to regulate post offices and post roads, might legislate to prevent the use of the postal establishment in carrying letters for fraudulent purposes; but could not legislate for the purpose of preventing or punishing general schemes to defraud. The existence of the scheme to defraud is a necessary
prerequisite or condition to the commission of the offense. But as the scheme may be the basis of many offenses under section 5480, dependent upon the number of letters written and mailed in its execution or attempted execution in whole or in part (Brown v. United States [C. C. A.] 143 Fed. 60; Howard v. United States, 21 C. C. A. 586, 75 Fed. 986, 34 L. R. A. 509; In re Henry, 123 U. S. 372, 8 Sup. Ct. 142, 31 L. Ed. 174), its averments cannot afford a reliable criterion to determine whether a former acquittal or conviction can be pleaded in bar to a subsequent prosecution for the same offense. For this reason, and because its execution does not constitute the gravamen of the offense, it need not necessarily be pleaded with all the certainty as to time, place and circumstance requisite in charging the writing and mailing the letters in execution of the scheme which does constitute the gravamen of the offense. Sharp v. United States (C. C. A.) 138 Fed. 878. Nevertheless, the particulars of the scheme are matters of substance, and must be set out with sufficient certainty to show its existence and character, and to fairly acquaint the accused with what he is required to meet. United States v. Hess, 124 U. S. 483, 8 Sup. Ct. 571, 31 L. Ed. 516; Stokes v. United States, 157 U. S. 187, 15 Sup. Ct. 617, 39 L. Ed. 667; Stewart v. United States, 55 C. C. A. 641, 119 Fed. 89, 94; Miller v. United States, 133 Fed. 337, 66 C. C. A. 399.
Does the description of the scheme found in the indictment under consideration measure up to this requirement?
In Durland v. United States, 161 U. S. 306, 16 Sup. Ct. 508, 40 L. Ed. 709, counsel for defendant argued much as is done in this case, that the statute only contemplates such cases as come within the definition of "false pretenses"; that the representation must be of some existing fact, and not a mere promise as to the future; that the fraudulent purpose must be something more than an intention not to carry out a contract, etc. The court, speaking by Mr. Justice Brewer, says: "We cannot agree with counsel. The statute is broader than is claimed. Some schemes may be promoted through mere representations and promises as to the future, yet are none the less schemes and artifices to defraud. * * But beyond the letter of the statute is the evil sought to be remedied, which is always significant in determining the meaning. It is common knowledge that nothing is more alluring than the expectation of receiving large returns on small investments. ** In the light of this the statute must be read, and so read, it includes everything designed to defraud by representations as to the past or present, or suggestions and promises as to the future. The significant fact is the intent and purpose." See, also, United States v. Flemming (D. C.) 18 Fed. 909.
The section in question read in the light of the foregoing exposition of its meaning, in our opinion, contemplates any scheme involving matters of enforceable or unenforceable contract, representation of facts, expression of opinions, or assurances of past, present or future conditions, provided only it was designed and reasonably adapted to deceive and defraud. The most successful schemes to defraud are those dressed in the garb of honesty and hedged about with all the appearances of legal and enforceable undertakings. If the intent and purpose is to deceive and defraud the unwary it matters not what form the project is made to take.
Tested by the foregoing, we think the scheme alleged to have been devised by the defendant comes fairly within the statute, and is sufficiently outlined to show its design and adaptability to deceive, to inform defendant of its character and enable him to take issue thereon and prepare to meet it. It appeals to one of the strongest of human passions—the love of speedy and large returns on small investments. It assures the public of such a superior knowledge and experience as usually guarantees success. It offers that most seductive privilege of investing money at the enormous rate of 6 per cent. interest per month, only however, as long as the customer desires, with the assured right to withdraw the principal at any time. Patronizers of such schemes usually flatter themselves that they will be smart enough to foresee disaster in time to withdraw their money before the final collapse. The feature of the scheme which received the severest denunciation of defendant's learned counsel is that part of it disclosing defendant's intent not to pay the large rate of interest "for any great length of time" or permit such withdrawals "for any great length of time," but did intend by means of the representations "to induce" Stewart, and others mentioned in the indictment, to deposit money with him so that he might convert the greater part thereof to his own use. We think the feature of the scheme so denounced is its most attractive element, the one which would naturally give assurance of the greatest success. To start out with the payment, for a time, of interest as promised, and the practice of free withdrawals whenever a customer desired was very shrewd. It inspired confidence at the outset, and afterwards, when confidence was fully established, encouraged and doubtless secured large increase of deposits upon which the ultimate intent charged "to convert to his own use" could operate. The trial court did not err in overruling the demurrer to the indictment for defective or insufficient statement of a scheme to defraud. The court properly charged the jury that defendant could not be convicted for devising the scheme alone; that the gravamen of the offense rests in the mailing of the letters set out in the three counts of the indictment, and that in order to convict they must find that the defendant placed or caused the letters to be placed in the St. Louis post office to be sent or carried to their respective addresses by mail. In response to this charge the jury found defendant guilty on each of the three counts of the indictment, thereby necessarily finding that he mailed, or caused to be mailed, the letters counted on in the indictment. Was there sufficient evidence to warrant this finding? It was of two kinds-first, in the shape of an admission made by defendant to the post office inspector in effect that he was the manager of the National Securities Company; that he practically owned and conducted its business and had charge of the publication of its advertising literature, the use of the mail and the handling of checks for money received. This testimony was objected to by defendant's counsel on the ground that the letters counted on in the indictment were charged to have been mailed, one on December 10, 1902; one on Janu:ary 13, 1903, and one on January 29, 1903, and that defendant's declaration related only to his acts and doings in November, when the