People v. Lindquist

7 N.E.2d 166, 289 Ill. App. 250, 1937 Ill. App. LEXIS 599
CourtAppellate Court of Illinois
DecidedMarch 15, 1937
DocketGen. No. 38,797
StatusPublished
Cited by2 cases

This text of 7 N.E.2d 166 (People v. Lindquist) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People v. Lindquist, 7 N.E.2d 166, 289 Ill. App. 250, 1937 Ill. App. LEXIS 599 (Ill. Ct. App. 1937).

Opinion

Mr. Justice O’Connor

delivered the opinion of the court.

On December 3, 1934, the grand jury, impaneled in the criminal court of Cook county, returned an indictment against Gustaf Lindquist, Abraham H. Karatz and five others charging that they conspired to obtain notes, mortgages, etc., belonging to the Abraham Lincoln Life Insurance Company, an Illinois corporation, of the value of $13,000,000 by false pretenses and to embezzle $25,000, the property of the insurance company. Lindquist and Karatz were tried together, the jury returned a verdict finding them both guilty, fixed their punishment at imprisonment in the penitentiary, and imposed a fine of $1,000. Afterward judgment was entered on the verdict and Lindquist prosecutes this writ of error. In addition to Lindquist and Karatz the indictment named Hayden Sanders, Otto Van Derek, Dave Barry, Walter Ehlers, Joseph Baiata, otherwise called Charles Carloni, otherwise called J. B. Farquhar, otherwise called Joseph B. Marsino, otherwise called Joseph Marcino, otherwise called Joseph Omar, otherwise called Joseph Omer, otherwise called Harry Goldman, otherwise called Frank Bianco. Just what disposition was made of these five defendants does not clearly appear.

The record discloses that in 1934 Baiata and Karatz were operating a tavern and restaurant on Madison street in the Loop of Chicago, and had employed Barry to “front” for them, thinking that as he had a large following he would bring in considerable business. They also had concessions at the World’s Fair on the Lake Front, at which Barry was also employed. The businesses were not a financial success but apparently resulted in losses. Baiata became acquainted with Van Derek, a man about 23 years old, who was employed as a bookkeeper by the Amalgamated Trust & Savings Bank located in downtown Chicago. Van Derek; through his meeting with Baiata, agreed to “pull” checks drawn by the tavern on the bank. The checks would he paid but when they were returned by the clearing house they were “pulled” by Van Derek and not charged against the account. In this way Van Derek had abstracted from the bank, for the benefit of Baiata, about $30,000 covering a period of a few months. Van Derek was constantly complaining to Baiata that he would pull no more checks, and that unless the defalcations were made up by Baiata, as he had promised, Van Derek would go to the police and confess. The amount embezzled by Van Derek from the bank was constantly increasing until it amounted to about $54,000. About August or September Baiata and Karatz, and probably some others, conceived the idea of getting control of a life insurance company with a view of making good the shortage at the bank from the profits of the insurance company or by abstracting its assets. Karatz had practiced law in St. Paul, Minnesota, for many years, and apparently was then a man of good repute. He had been acquainted with Lindquist for a number of years. About eight years before the indictment Karatz had removed to Chicago where he had been engaged in the insurance, real estate and other businesses.

Baiata had formerly been president of the Commonwealth Insurance Company and chairman of the board of directors of the Niagara Life Insurance Company and had been an officer of several banks. He had served terms in the Federal penitentiary at Atlanta, Georgia, and in the state prison at Charlestown, Mass., and at the time of the trial of the instant case he was brought from the Joliet penitentiary and testified on behalf of the People.

Lindquist was 53 years of age at the time of the trial; he was born in Sweden and had lived in St. Paul since 1901; he first worked as a laborer, went to night school and finally became an insurance salesman, then the proprietor of an agency. He was deputy to the Hon. John B. Sanborn, then Commissioner of Insurance and now Judge of the United States Circuit Court ■ of Appeals. In 1917 Lindquist was secretary to Gov. J. A. Burnquist of Minnesota, who in 1920 appointed him Commissioner of Insurance of that State. He was reappointed by Gov. Preus of Minnesota. He afterward resigned as Commissioner of Insurance to become president of the Travellers Equitable Insurance Co. of Minneapolis, which position he retained until 1930, at which time he became an assistant to the vice-president of the Equitable Insurance Company of New York; he later organized a company known as the Pioneer Mutual Life Insurance Company of Minnesota, of which he was president in September, 1934. As president of the Travellers Insurance Company his salary was $12,000 a year and the Equitable Insurance Company of New York paid $10,000 a year. In September, 1934, he was earning about $50 a week with commissions.

In the early part of September, 1934, Baiata went to St. Paul, apparently on some business, and dropped in to see Lindquist at the latter’s office; this was apparently the first time Lindquist had seen or heard of Baiata. Baiata told him that he and their mutual friend, Karatz, were contemplating buying a life insurance company and that they wanted an outstanding man in that line to take charge of the company, and Baiata mentioned a life insurance company of Springfield, Illinois. Lindquist said he had heard of that company through Karatz and had looked into its affairs but would not care to be connected with it. At that time Baiata said he had considerable money— represented considerable wealth — and that if he decided to buy a life insurance company he could obtain $1,000,000 for that purpose.

Robert Telfer, an insurance broker of Chicago who had been an official of Baiata’s former Commonwealth Insurance Company, was looking for an insurance company which Baiata and Karatz might buy. Karatz from Chicago wrote to Lindquist calling his attention to the life insurance company of Springfield above referred to; Lindquist declined the proposition for the reason that he thought the company was not a good one. During' the latter part of September, 1934, Teller from Chicago called up Cornelius J. Doyle of Springfield, Illinois, who was a prominent attorney and well known in insurance circles, and inquired about the purchase of an insurance company and the Abraham Lincoln Company of Springfield was mentioned. Pursuant to this talk Baiata and Karatz went to Springfield and had a conference with Doyle and officials of the Abraham Lincoln Insurance Company; it was there stated that Lindquist was to be the president of the company in case the controlling interest should be purchased by Baiata and Karatz. The president of the company stated he wanted to deal with the principal and thereupon Doyle, from Springfield, called Lindquist at his home in St. Paul on the telephone, the number having been given to him by Karatz. Doyle explained the matter and as a result Lindquist arrived in Springfield the next day and after a few days’ investigation of the Lincoln Company and after conferences with the company’s officials a written contract was entered into on September 29th between the officials of the Abraham Lincoln Company and Lindquist for the sale of about 53 per cent of the capital stock to Lindquist for about $400,000; $10,000 was paid at the time, checks for this amount being there furnished by Baiata, and $15,000 was paid shortly thereafter, the money also being furnished by Baiata. Further payments of $25,000 a month were to be made.

The Abraham Lincoln Insurance Company had been having difficulties with the Insurance Department of Illinois.

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Related

People v. Jefferies
285 N.E.2d 592 (Appellate Court of Illinois, 1972)
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111 N.E.2d 587 (Illinois Supreme Court, 1953)

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Bluebook (online)
7 N.E.2d 166, 289 Ill. App. 250, 1937 Ill. App. LEXIS 599, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-v-lindquist-illappct-1937.