United States v. Center Veal & Beef Co.

162 F.2d 766, 1947 U.S. App. LEXIS 2189
CourtCourt of Appeals for the Second Circuit
DecidedJuly 25, 1947
DocketNos. 274-276, Docket 20622-20624
StatusPublished
Cited by14 cases

This text of 162 F.2d 766 (United States v. Center Veal & Beef Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Center Veal & Beef Co., 162 F.2d 766, 1947 U.S. App. LEXIS 2189 (2d Cir. 1947).

Opinion

L. HAND, Circuit Judge.

The defendants, Hermann and Merlis and their companies, were charged with buying false ration cheques, with fraudulently obtaining subsidies from the Defense Supplies Corporation, and with conspiracy to commit both these crimes. The charge against them for buying forged ration cheques was in seventy-six counts, each count for a separate cheque (we shall speak of it as the “Information”) ; the charge for fraudulently obtaining subsidies was in twenty-five counts, each count for a separate payment (we shall speak of it as the “Subsidy Indictment”). Judge Picard submitted all the counts in the three accusations to the jury, except counts 9, 12, 13, 14 and 15 of the “Subsidy Indictment,” and the jury brought in a verdict of guilty on all counts submitted. The judge dismissed counts sixteen to twenty-five, inclusive, of the “Subsidy Indictment.” Pie then sentenced Merlis and Hermann to five years on each count of the “Subsidy Indictment,” the sentences to run concurrently; and to $5000 fine on each count cumulatively. The only corporate defendant in the “Subsidy Indictment” was the Fratik J. Murray Co., Inc., and he sentenced it to a fine of $5000 on each count. Under the “Information” he sentenced Merlis and Hermann to one year’s imprisonment on each of the seventy-six counts — the sentence to run concurrently with the sentence on the two indictments — and he fined them $1000 each on the first fifty counts; and he fined each corporation $1000 on each of the first fifty counts. Under the conspiracy indictment he sentenced Merlis and Hermann to two years’ imprisonment — the sentence to run concurrently with the other sentences; he fined each $5000; and he fined each corporation $5000. The result was that Merlis and Hermann have been sentenced to imprisonment for five years, and each to a fine of $105,000; the P'rank J. Murray Co., Inc., has been fined $105,000, and the Center Veal & Beef Co., $55,000. Upon this appeal the appellants depend chiefly upon the insufficiency of the evidence; but they also complain of the conduct of the trial by the judge and the prosecutor; and that the conspiracy indictment was invalid, the object of the conspiracy having been in part ac[768]*768complished. . We proceed first to state the evidence and to discuss the inferences which the jury was justified in making from it.

The Center Company was a wholesale meat seller which bought most, though not all its meat from the Murray Company, a butcher which bought cattle direct from the breeders. Both were corporations, and Hermann and Merlis owned all the shares of each, half and half (Hermann had assigned his interest in the Center Company to his wife; .but it is not necessary to say that a jury would be justified in finding that this was a mere fetch to conceal his continued interest). He was president of the Murray Company, and Merlis was president of the Center Company. The two companies had a single New York office, but the Murray Company’s butchery was at Chester, New York; it did not appear that Merlis ever went to Chester, but Hermann was at time's at the New York office. Beginning in June, 1943, the Murray Company began to file with the Defense Supplies Corporation applications for subsidies, which the regulations allowed to butchers to cover the “spread” between what they had to pay to the unregulated breeders, and the “ceilings”which limited the prices they might charge to wholesalers or retailers. Each of these petitions had alleged that the Murray Company had filed with the O.P.A. a statement of the number of pounds of meat it had butchered, the number of points it had received from wholesalers; and that the statement had been accompanied by ration cheques of the Murray Company, to the order of the O.P.A. upon its ration point account in its own bank. Until April, 1944, all these petitions were false, because the Murray Company had never filed any such statements with O.P.A. and had not of course filed any ration cheques with them.

It does not appear how or why the O.P.A. learned that the Murray Company had been getting subsidies in this way; but it did learn so at least as eárly as April, 1944, and it demanded an accounting. The Murray Company then filed cheques drawn on its account for the deficiency up to date, together with a statement covering all past transactions. Since its point account in the bank was not large enough at the time to meet the necessary drafts, it built it up by cheques of the Center Company drawn on the Center Company’s point account in another bank for past purchases from the Murray Company. On the other hand, as the Center Company’s own account was not itself large enough to cover these drafts, that company built it up by the deposit of forged ration cheques, purporting to be drawn by meat dealers upon a New Jersey bank. These the Center Company procured as follows. They were in blank— without payees — and the company bought them from one, Tapen, a wholesale meat dealer, who had them from Bertola, a painter, who forged the makers’ names upon blank cheques, which he got from the bank’s teller, Hahn. As the cheques were presented at the bank, Hahn abstracted them before they were charged against the supposed makers’ accounts — out of the four-names used only one was fictitious. Thus the Center Company got a credit in its point account when the clearing house —Federal Reserve Bank — credited the cheques to its account in its own bank, and Hahn’s bank never apparently discovered that any charge had been made against it. How the charge, which must have appeared in the clearing house accounts, was concealed from Hahn’s bank docs not appear; but it makes no difference, for conccdedly the scheme was for a time successful. The Center Company continued to buy these cheques until the autumn of 1944, when the fraud was discovered; but not until it had bought cheques for about twelve million points, -ivhich — since the only testimony is that the price was one dollar a thousand — a jury might conclude had cost $12,000.

The guilt of the Murray Company upon those counts of the “Subsidy Indictment” which covered petitions filed before the Center Company began to pay ration cheques, is too clear for debate. Only someone in authority could conceivably have had any motive so to fill the company’s treasury: moreover, it is incredible that the practice should have gone on' for so long as it did without, not only the connivance, but the active direction, of Her-mann. The fact that his signature to the petitions was not proved — if it was not — is irrelevant; if he was not the guilty person, [769]*769a jury would have had to assume that some subordinate, who could not profit a penny, vicariously continued throughout the period to filch money from the United States and pour it into Hermann’s and Merlis’ pockets. Picard, J., left to the jury all the counts of the “Subsidy Indictment” (except, as we have said, numbers 9, 12, 13, 14, 15) upon the theory that, even after the Center Company had begun to pay ration cheques, if the cheques delivered to the O.P.A. were based upon the forged cheques deposited by the Center Company, the statements were fraudulent. Later Picard, J., out of what was perhaps an excessive caution, dismissed counts 16 to 25 inclusive, leaving only those ten counts charging petitions filed during the period when no statements and no cheques whatever were filed with the O.P.A. On these ten counts the sentences against Hermann and the Murray Company are impregnable.

The only question as to the “Information” is whether Merlis knew that the cheques were forged, — if so, he and the Center Company were guilty on all counts.

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Cite This Page — Counsel Stack

Bluebook (online)
162 F.2d 766, 1947 U.S. App. LEXIS 2189, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-center-veal-beef-co-ca2-1947.