Shaffman v. United States

289 F. 370, 1923 U.S. App. LEXIS 1965
CourtCourt of Appeals for the Third Circuit
DecidedApril 25, 1923
DocketNo. 2899
StatusPublished
Cited by21 cases

This text of 289 F. 370 (Shaffman v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shaffman v. United States, 289 F. 370, 1923 U.S. App. LEXIS 1965 (3d Cir. 1923).

Opinion

DAVIS, Circuit Judge.

The defendants, Jacobi Shaffman and Frank M. Zola, were tried and convicted on an indictment charging them and others, who were acquitted, with conspiring to violate section 29 of the Bankruptcy Act of 1898 (Comp. St. § 9613). According to the indictment the defendants conspired that Nathan Kotman and Ben Kotman, doing business under the firm name of Kotman & Kotman, should engage in general merchandise business, wholesale and retail, in the city of Pittsburgh, .and with the knowledge and connivance of each of the other co-conspirators should commit acts of bankruptcy, with a view to causing and inducing the filing of a petition in bankruptcy against them; that a trustee should be appointed, and that they, with the defendants, should conceal from the trustee in bankruptcy, thereafter to be appointed, moneys, merchandise,- and goods belonging to the estate in bankruptcy of Kotman & Kotman.

The evidence tended to establish that early in 1919 there appeared in Pittsburgh a man, known as N. Kotman, who in,the spring opened,an-[372]*372account in the Union Savings Bank, Pittsburgh, under the name of Kotman & Kotman, and an account in his indivdual name. He was introduced to the bank by Abe Millstone, one of the defendants, who was acquitted. Nathan Kotman was introduced to the Pittsburgh State Bank by the defendant Shaffman as his cousin, and opened an account in that bank also. Shaffman introduced him as his cousin also to Mr. Isaac Weinstein, owner of properties located at Nos. 501-503 Carson street, Pittsburgh, where Kotman conducted his operations.

The method by which Kotman & Kotman seem to have carried out their alleged.scheme was to establish a line of credit by ordering and paying for a small quantity of merchandise, and, when credit had thus been established, larger orders were given, which were not paid for. As the merchandise came in, it was immediately transferred to the places of business of Millstone, Shaffman, and others “who were partners to the scheme,” and whose purpose it was to “continue this until the place was looted, and then have the people connected with the business disappear. N. Kotman was last, seen in September, 1919, and nobody was ever able to locate him after that time. It was impossible to discover. any person who held himself out as Ben Kotman.”

Although plaintiffs in error denied any knowledge of the business of Kotman & Kotman, large quantities of the goods were shipped from the Carson street premises, at first under the name of Kotman & Kotman, and later under the name of A. Millstone, to Prank M. Zola, Milwaukee. Zola had a fire, and the proof of loss submitted to the insurance company showed that he had purchased goods from Kotman & Kotman, A. Millstone, and Shaffman—in fact, nearly all the goods he had came from these three persons. Zola was Millstone’s brother-in-law and Shaffman was his son-in-law. “N. Kotman was brought to the Millstone house to live by Jacob Shaffman, and was introduced to the Millstones as his cousin,” and lived there during the Kotman operation in Pittsburgh. A. Millstone’s daughter, Anna, was employed in the Kotman & Kotman establishment as stenographer. Zola wrote Kotman at one time that he could use $10,000 worth of merchandise “with 30 off,” which was explained by Zola as meaning 30 per cent, less than cost. On July 26,1919, Zola called on the Rice-Dix Dry Goods Company, St. Louis, Mo., represented himself as the buyer of Kotman & Kotman, and purchased for them merchandise in the amount of $775.10, which was never paid for.

The jury returned a verdict of guilty, and the defendants contend that the judgment based thereon should be reversed for three principal reasons:

The first is that, the indictment does not sufficiently set out a crime. The indictment charges that the several defendants conspired that Kotman & Kotman should become bankrupts, and “that a trustee in bankruptcy should be appointed for said Kotman & Kotman, and that said defendants, and divers other persons unknown, should willfully and fraudulently conceal from the said trustee in bankruptcy * * * merchandise and goods belonging to the estate in bankruptcy of the said Kotman & Kotman.” This is insufficient, defendants urge, because the crime of concealment from a trustee in bankruptcy can be [373]*373committed: by the bankrupt only, and. the charge that-the defendants, Shaffman and Zola, were to conceal, does not constitute a crime. Section 29b of the act of 1898 provides that:

“b: A person shall be punished, by imprisonment not exceeding two years, upon conviction of the offense of having knowingly and fraudulently (1) concealed while a bankrupt, or after his discharge, from his trustee any of the property belonging to his estate in bankruptcy.”

In the case of United States v. Stevens (D. C.) 44 Fed. 132, 140, Stevens, Dickey, and Strum were indicted for conspiring to make false census certificates and fictitious returns. The defendant Strum, an official enumerator, was the only person who could commit the crime under the act denouncing the objective offense. The court held that, although Stevens and Dickey could not commit the offense as principals, they could aid and abet Strum in the commission of the substantive crime, and could be punished as principals; and so the indictment charging them with conspiracy to commit the substantive crime, which Strum alone could commit, was held good. This case was cited with approval by the Supreme Court in United States v. Holte, 236 U. S. 140, 147, 35 Sup. Ct. 271, 59 L. Ed. 504, L. R. A. 1915D, 281. The indictment in the instant case charged that the bankruptcy of Kotman & Kotman was “to be brought about and accomplished by the said Nathan Kotman and Ben Kotman, with the knowledge and connivance of each of the said other conspirators.” Admitting that the defendants other than the two Kotmans, as principals, could not be guilty of concealing assets in bankruptcy, in violation of section 29b of the act of 1898, under the doctrine of the Stevens Case, they could be aiders and abettors, and as such punished as principals. Section 332, Federal Penal Code (Comp. St. § 10506).

Clearly all the defendants might have been charged with having conspired that Kotman & Kotman should become bankrupts, and that they themselves should conceal property belonging to their estate in bankruptcy. This exact question was decided in the case of the United States v. Rabinowich, 238 U. S. 78, 35 Sup. Ct. 682, 59 L. Ed. 1211. Is it fatal to the indictment that it charged that all the defendants were to commit the objective crime, and not Kotman & Kotman only? The gist of the charge is the conspiracy, not the objective crime. Peter Rulovitch et al. v. United States (C. C. A.) 286 Fed. 315. And the conspiracy is punishable, if the intended crime be accomplished. Heike v. United States, 227 U. S. 131, 144, 33 Sup. Ct. 226, 57 L. Ed. 450, Ann. Cas. 1914C, 128. And it is also punishable if it is not accomplished. Williamson v. United States, 207 U. S. 425, 28 Sup. Ct. 163, 52 L. Ed. 278. All the conspirators need not join in the overt act. Bannon & Mulkey v. United States, 156 U. S. 464, 468, 15 Sup. Ct. 467, 39 L. Ed. 494.

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Bluebook (online)
289 F. 370, 1923 U.S. App. LEXIS 1965, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shaffman-v-united-states-ca3-1923.