United States v. McCann

32 F.2d 540, 1929 U.S. App. LEXIS 3812
CourtCourt of Appeals for the Second Circuit
DecidedMay 6, 1929
DocketNo. 309
StatusPublished
Cited by5 cases

This text of 32 F.2d 540 (United States v. McCann) 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. McCann, 32 F.2d 540, 1929 U.S. App. LEXIS 3812 (2d Cir. 1929).

Opinions

MANTON, Circuit Judge.

This is an appeal from a judgment of conviction, after indictment charging crimes under sections 215- and 37 of the United States Criminal Code (18 USCA §§ 88, 338). A scheme to defraud and the use of the mails in furtherance thereof was established hy the proof of a so-called' “front money game.” The appellants for more than three years represented, and held' themselves out to corporations in search of additional capital as experts in the sale of stock, and by fraudulent and false representations they obtained contracts of employment. In letters and hy verbal statements they represented to their victims that they had a large force' of capable salesmen and an-ever-expanding clientele of stock buyers;, also a department which provided facilities-for extensive circularization, and had in[541]*541side information as to sources of funds available and awaiting investment. These representations were established to be misleading and intended to mislead the victims, as a result of which the appellants secured large sums of money in advance for services, and did not perform and never intended to perform their promises or contract obligations. The evidence established, to the satisfaction of the jury, that they induced their victims, mentioned in the indictment, to enter into such contracts for the sale of the corporate stock of the respective corporations because of the reliance placed upon the following representations:

They maintained offices in the city and state of New York under the name of “Commonwealth Securities Company,” “Worthington Company,” and “W. P. Whitaker.” Letterheads bearing the names of these respective concerns were used by them. Thereon it was stated that they had offices in Washington, Baltimore, Pittsburgh, Cleveland, Newark, and Philadelphia, when in fact they had no such branch offices. The letters which were written to the victims represented that they had a large force of capable stock salesmen. At the trial, testimony was offered by 21-victim corporations that they had not sold á share of stock over a period of three years. The appellants had represented that they had investigated the corporations offering the stock for sale “from cellar to dome” and gave a strong personal recommendation.. An employee of the Worthington Company testified that there were no hooks of account or pay roll ever prepared, and an employee of Whitaker testified to the same purport. They did not know of any salesmen employed by either firm. It was established that three female office employees were the only em-, ployees of the Worthington Company and Whitaker.

The Commonwealth Securities Company had but one office employee and the representations of a large staff of salesmen were false. They represented, by letters, that they had a large clientele of stock buyers and “would experience no difficulty in promptly selling the stock allotted.” This and similar representations were established to be false. One of the victim corporations had substantial business operations and showed large gross profits. It paid the appellants to sell the stock, with the same success as other victims who were trying to dispose of fraudulent stock. The appellants represented that they had a multigraphing department, and this was also established to he false, as was the representation that the appellants would send out large quantities of circulars and documents for advertising and soliciting the purchase of the victims’ stock. They did no multigraphing, and it was shown that no one else did multigraphing for them. It was represented that they had an advertising manager and director of sales, when in fact they did not; nor did they expend large funds in furtherance of the sale of the stock of their victims, and fell far short of expending the moneys which they received for their services. Appellants represented that they would expend sums in excess of the amounts paid to them by the victims, and that they would purchase, within 90 days, from the victims, a large number of shares of stock, which they never did, and, contrary to their promise, they failed to do “all in their power to facilitate the marketing of the stock” of the victims.

It was likewise firmly established that they used the mails in furtherance of their scheme to defraud. The female employees testified to signing some of the letters, mentioned in the indictment, with fictitious names, and employees mailed the letters by depositing them in the mail chute in the building where the offices of the concerns were maintained. The letterheads of the company were used and the victims received the letters. This was sufficient proof of mailing the letters. Krotkiewicz v. United States, 19 F.(2d) 421 (6th C. C. A.); Tincher v. United States, 11 F.(2d) 18 (4th C. C. A.); Tresca v. United States, 3 F.(2d) 556 (2d C. C. A.); Brooks v. United States, 146 F. 223 (8th C. C. A.); Demolli v. United States, 144 F. 363, 6 L. R. A. (N. S.) 424, 7 Ann. Cas. 121 (8th C. C. A.) ; Kellogg v. United States, 126 F. 323 (2d C. C. A.).

The indictment charged operation by each of the appellants under the name of the “Worthington Company,” “Commonwealth Securities Company,” and “W. P. Whitaker,” and there was ample evidence justifying the jury in finding that each of the appellants was connected with the scheme and the fraudulent use of the mails as charged in the respective counts of the indictment. There is a joint responsibility for mailing, not only the letters, the subjects of counts 2 and 4, but the letters of each of the counts of the indictment. It is unnecessary to re-’ view the evidence in more detail establishing appellants’ connection with the concerns referred to.

Error is assigned, and it is claimed sufficient to reverse the judgment, because the court did not limit the effect of the statement made by J. J. McCann, which was offered in evidence. No objection was made by the ap[542]*542pellants, nor was a request made to limit the exhibit, as applying only to the defendant J. J. McCann. J. J. McCann was acquitted. In the absence of some request restricting the use of this exhibit, no reversible error is established. Bryant v. United States, 257 F. 378 (5th C. C. A.); Schonfeld v. United States, 277 F. 934 (2d C. C. A.); Pappas v. United States, 292 F. 982 (9th C. C. A.). Since the passage of section 269 of the United States Judicial Code (28 USCA § 391), the burden is on the appellants to show from the record as a whole that there was denial of a substantial right. Rich v. United States, 271 F. 566 (8th C. C. A.); Armstrong v. United States, 16 F.(2d) 62 (9th C. C. A.). The contents of this exhibit was merely cumulative, and there is ample evidence without it to sustain the statement therein contained as against each of the appellants. Nor was it error to admit the letters containing the signatures of fictitious names, for it was established that these names were signed in the offices of the respective concerns, and the letters were’ mailed in due course of business from that office.

It is charged that error was committed in the court’s charge wherein it was said: “The court charges, in order to constitute a conspiracy, that two or more of these defendants before you should be found guilty.” What the court said must be considered in this connection with the entire charge. Haggerty v. United States, 5 F.(2d) 224 (7th C. C. A.); Horn v. United States, 182 F. 721 (8th C. C. A.). The charge delivered intelligently instructed the jury that it was for them to say whether a scheme to- defraud existed and the mails used in furtherance of sueh scheme; also whether or not a conspiracy was established among the defendants charged in the indictment, or any two of them.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

United States v. Weinberg
129 F. Supp. 514 (M.D. Pennsylvania, 1955)
Little v. United States
73 F.2d 861 (Tenth Circuit, 1934)
Cochran v. United States
41 F.2d 193 (Eighth Circuit, 1930)
United States v. Rosenstein
34 F.2d 630 (Second Circuit, 1929)

Cite This Page — Counsel Stack

Bluebook (online)
32 F.2d 540, 1929 U.S. App. LEXIS 3812, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-mccann-ca2-1929.