Petition — Braverman v. United States

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ona

No. 75-244 | | ern HOD JC.

In the

Supreme Court of the United States

Ocroser Term, 1975

CHARLES BRAVERMAN,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

THOMAS P. SULLIVAN

JOAN B. GOTTSCHALL

One IBM Plaza

Chicago, Illinois 60611

(312) 222-9350

Counsel for Petitioner

CHARLES BRAVERMAN

JENNER & BLOCK

Of Counsel

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UNITED STATES LAW PRINTING CO., CHICAGO, ILLINOIS 60618 (312) 525-6581

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INDEX

eae PAGE

i eisiniiiiestieg 1

ESTES AR SRR eae ea Ee 2

I i setrrectmniginnninginene 2

Statutory Provisions Involved .00.............-sccssscssseseesees 2

I OT a. sisseieinaisenspetinanncts 6

Reasons for Granting the Writ ~............222.....2--.-.----00-0-++ 10

Ds eeiciisetateeliiciglimenitianite 17

Appendix A (Opinion of Court of Appeals) ........ App. 1

Appendix B (Opinion of the District Court) .......... App. 14

Appendix C (The Charge Relating To Conspiracy

em Aidimg Om ACEI nnn nn. a ceseccnncancncnnsescoeeeeees App. 19

CITATIONS

Cases

Brotherhood of Carpenters v. United States, 330 U.S.

395 (1947) .............. ; . benching —

Blumenthal vy. United States, 332 U.S. 539 (1947) ... 16

Direct Sales Co. v. United States, 319 U.S. 703 (1943)

11, 14, 16

Ingram v. United States, 360 U.S. 672 (1959) ............ 11

Kotteakos vy. United States, 328 U.S. 750 (1946) ...... 15

United States v. Cades, 495 F.2d 1166 (3d Cir. 1974)

11, 13, 15

PAGE

United States v. Feola, ...... US. ......, 95 S.Ct. 1255

PINT sci: desssdamnanabinibeceabpinaneniaiahescaiemnaiiaadniaiie 11

United States v. Greer, 467 F.2d 1064 (7th Cir. 1972),

cert, denied, 410 U.S. 929 (19738) ..........-----.---0--+--0++ 12-13, 16

United States v. Tornabene, 222 F.2d 875 (3d Cir.

IIS ossississicsncotiesicenestieacansmaaaatamatalaeaoa 11

Statutes

es (at eee 6

BO TLR, CODE cnciinenseninetsccincsciinssninnciencsncieiatineaeniiatinaiaian 6

By e sa eee 6, 11

bh 2 6, 11

Bt | see 6,7

Iu the

Supreme Court of the United States

Ocroser ‘term, 1975

No.

CHARLES BRAVERMAN,

Petttioner,

Vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Petitioner, Charles Braverman, respectfully prays that

this Court issue a writ of certiorari to review the judg-

ment and opinion of the United States Court of Appeals

for the Seventh Circuit, entered in this proceeding on

June 16, 1975.

OPINION BELOW

The opinion and order of the Court of Appeals, not yet

reported, appears as Appendix A hereto. The unpublished

memorandum opinion and order of the District Court for

the Northern District of Illinois appears as Appendix B.

JURISDICTION

The judgment of the Court of Appeals for the Seventh

Circuit was entered on June 16, 1975. A timely petition

for rehearing en banc was denied on July 16, 1975, and

this petition for certiorari was filed within 30 days of that

date. This Court’s jurisdiction is invoked under 28 U.S.C.

§1254 (1).

QUESTIONS PRESENTED

1. Whether the ‘‘reasonably foreseeable’’ test, as ap-

plied by the Court of Appeals for the Seventh Circuit as

the measure of an individual’s liability in conspiracy, is

consistent with prior decisions of this Court holding that

to support a conspiracy charge, the defendant’s knowl-

edge of the conspiracy must be clearly and unequivocally

proven.

2. Whether the ‘‘reasonably foreseeable’’ test, as ap-

plied in this case, impermissibly withdraws the vital fac-

tual issue of knowledge of the conspiracy from the jury.

STATUTORY PROVISIONS INVOLVED

United States Code, Title 18:

§ 2. Principals

(a) Whoever commits an offense against the United

States or aids, abets, counsels, commands, induces or

procures its commission, is punishable as a principal.

(b) Whoever willfully causes an act to be done

which if directly performed by him or another would

be an offense against the United States, is punishable

as a principal.

3

United States Code, Title 18:

§ 371. Conspiracy to commit offense or to defraud

United States

If two or more persons conspire either to commit

any offense against the United States, or to defraud

the United States, or any agency thereof in any man-

ner or for any purpose, and one or more of such per-

sons do any act to effect the object of the conspiracy,

each shall be fined not more than $10,000 or imprisoned

not more than five years, or both.

If, however, the offense, the commission of which

is the object of the conspiracy, is a misdemeanor only,

the punishment for such conspiracy shall not exceed

the maximum punishment provided for such misde-

meanor.

United States Code, Title 18:

§ 656. Theft, embezzlement, or misapplication by

bank officer or employee

Whoever, being an officer, director, agent or em-

ployee of, or connected in any capacity with any Fed-

eral Reserve bank, member bank, national bank or

insured bank, or a receiver of a national bank, or any

agent or employee of the receiver, or a Federal Re-

serve Agent, or an agent or employee of a Federal

Reserve Agent or of the Board of Governors of the

Federal Reserve System, embezzles, abstracts, pur-

loins or willfully misapplies any of the moneys, funds

or credits of such bank or any moneys, funds, assets

or securities intrusted to the custody or care of such

bank, or to the custody or care of any such agent,

officer, director, employee or receiver, shall be fined

not more than $5,000 or imprisoned not more than five

years, or both; but if the amount embezzled, abstracted,

purloined or misapplied does not exceed $100, he shall

4

be fined not more than $1,000 or imprisoned not more

than one year, or both.

As used in this section, the term ‘‘national bank’’ is

synonymous with ‘‘national banking association’’;

‘‘member bank’? means and includes any national

bank, state bank, or bank and trust company which

has become a member of one of the Federal Reserve

banks; and ‘‘insured bank’’ includes any bank, bank-

ing association, trust company, savings bank, or other

banking institution, the deposits of which are insured

by the Federal Deposit Insurance Corporation.

United States Code, Title 18:

$ 1005. Bank entries, reports and transactions

Whoever makes any false entry in any book, report,

or statement of such bank with intent to injure or de-

fraud such bank, or any other company, body politic

or corporate, or any individual person, or to deceive

any officer of such bank, or the Comptroller of the

Currency, or the Federal Deposit Insurance Corpo-

ration, or any agent or examiner appointed to examine

the affairs of such bank, or the Board of Governors

of the Federal Reserve System—

Shall be fined not more than $5,000 or imprisoned

not more than five years, or both.

As used in this section, the term ‘‘national bank’’

is synonymous with ‘‘national banking association’’;

‘¢member benk’’ means and includes any national bank,

state bank, or bank or trust company, which has be-

come a member of one of the Federal Reserve banks;

and ‘‘insured bank’’ includes any state bank, banking

association, trust company, savings bank, or other

banking institution, the deposits of which are insured

by the Federal ‘Deposit Insurance Corporation.

5

United States Code, Title 18:

§ 1014. Loan and credit applications generally; re-

newals and discounts; crop insurance

Whoever knowingly makes any false statement or

report, or willfully overvalues any land, property or

security, for the purpose of influencing in any way

the action of the Reconstruction Finance Corporation,

Farm Credit Administration, Federal Crop Insur-

ance Corporation, Farmers’ Home Corporation, the

Secretary of Agriculture acting through the Farmers’

Home Administration, any Federal intermediate credit

bank, or any division, officer, or employee thereof, or

of any corporation organized under sections 1131 to

1134m of Title 12, or of any regional agricultural

credit corporation established pursuant to law, or of

the National Agricultural Credit Corporation, a Fed-

eral Home Loan Bank, the Federal Home Loan Bank

Board, the Home Owners’ Loan Corporation, a Fed-

eral Savings and Loan Association, a Federal land

bank, a joint-stock land bank, a Federal land bank

association, a Federal Reserve bank, a small business

investment company, a Federal credit union, an in-

sured State-chartered credit union, any institution

the accounts of which are insured by the Federal Sav-

ings and Loan Insurance Corporation, any bank the

deposits of which are insured by the Federal Deposit

Insurance Corporation, any member of the Federal

Home Loan Bank System, the Federal Deposit Insur-

ance Corporation, the Federal Savings and Loan In-

surance Corporation, or the Administrator of the Na-

tional Credit Union Administration, upon any appli-

cation, advance, discount, purchase, purchase agree-

ment, repurchase agreement, commitment, or loan, or

any change or extension of any of the same, by re-

newal, deferment of action or otherwise, or the ac-

ceptance, release, or substitution of security therefor,

shall be fined not more than $5,000 or imprisoned not

more than two years or both.

STATEMENT OF THE CASE

Petitioner Charles Braverman, together with Stanley

Johnson, the president of the Steel City National Bank of

Chicago, Charles Helm, the bank’s vice president and

Robert Ness, was indicted in a six count indictment charg-

ing violations of 18 U.S.C. §§ 2, 371, 656, 1005 and 1014.

Neither petitioner nor Ness was affiliated with the bank.

As to petitioner, the indictment charged as follows:

(a) Count 1 charged that petitioner conspired with

Johnson, Helm and Ness to commit three federal of-

fenses: the willful misapplication of bank funds (18 U.S.C.

§ 656), the making of false entries in the books and records

of the bank (18 U.S.C. § 1005) and the submission of false

statements to the bank to influence its actions (18 U.S.C.

§ 1014).

(b) Count 2 charged that in connection with a $30,000

loan in April, 1971, petitioner aided and abetted Johnson

in the willful misapplication of bank funds (18 U.S.C.

$656), thus violating 18 U.S.C. § 2;

(ec) Count 3 charged that in connection with a $20,000

loan in December, 1971, petitioner aided and abetted John-

son in the violation of 18 U.S.C. § 656, thus violating 18

U.S.C. § 2;

(d) Count 4 charged that in connection with the April,

1971 loan referred to in Count 2, petitioner aided and

abetted Johnson in making false entries in the bank’s In-

terview and Memorandum Sheet with regard to the purpose

of the loan (18 U.S.C. $1005), in violation of 18 U.S.C. § 2;

(e) Count 5 charged that in connection with the De-

cember, 1971 loan referred to in Count 3, petitioner aided

and abetted Johnson in the violation of 18 U.S.C. §1005,

thus violating 18 U.S.C. § 2;

A

7

(f) Count 6 charged that petitioner, aided and abetted

by Ness, made false statements in a personal statement

submitted to the bank in order to obtain two loans, in

violation of 18 U.S.C. § 1014.

Ness, Johnson and Helm, at the time the loan transac-

tions forming the basis for the indictment took place, were

involved in a massive loan-kiting and embezzlement scheme

which eventuated in 29 indictments, each charging, in es-

sence, that Ness, with the assistance of some other in-

dividual who had agreed to help him obtain a loan, sub-

mitted false documents to the bank and, with the complicity

of Johnson and Helm, obtained the loan.

Ness, Johnson and Helm pleaded guilty to other indict-

ments and petitioner’s indictment was dismissed as to

them. Petitioner was tried alone. Ness was the govern-

ment’s chief witness. Neither Johnson nor Helm testified.

Ness testified that petitioner, a friend of his, at Ness’

urging, agreed to take out a loan on Ness’ behalf pursuant

to Ness’ representation that he was in financial difficulty.

Ness testified that petitioner had been reluctant to obligate

himself for Ness, fearing that his wife would be angry, but

agreed to assist Ness when Ness suggested that petitioner

use an assumed name and a borrowed address, thus pre-

venting his wife from learning of the loan. Ness completed

a financial statement, signed by petitioner in blank using

the name ‘‘ Weis,’’ and obtained a loan. Ness testified that

petitioner received none of the loan proceeds for his per-

sonal use, never went to the bank and never met nor

spoke to the bank officers. (Tr. 102-114, 224-230, 252-253,

985-286, 292.)* Approximately six months later, Ness

*“Tr.” refers to the page of the transcript. “App.” refers to the

printed appendix to this brief.

asked petitioner if he would take out an additional loan.

When he refused, Ness obtained the additional loan with a

note petitioner had previously signed for renewal pur-

poses, (Tr. 158, 160, 317-318.) *

As proof of the bank officers’ complicity, a necessary

element of the aiding and abetting and conspiracy charges,

Ness testified to conversations he had with Johnson relat-

ing to their ongoing relationship and to Ness’ need for

Johnson’s approval of the ‘‘ Weis’’ loan in order to meet

payments due on other Ness loans Johnson had approved ;

Ness further testified concerning conversations he had

with Johnson relating to the fabrication of information

for bank records. He testified that he did not tell peti-

tioner of these conversations and that it was his belief that

petitioner would not have assisted him had petitioner been

aware of the illegal dimensions of Ness’ activities. Fur-

ther, Ness stated that when the FBI began its investiga-

tion of Ness’ transactions at the bank, Ness called peti-

tioner, told him that there was an investigation of various

loans in which Ness was involved at the Steel City Bank

in progress and that the less petitioner knew about Ness’

involvement at the bank, the better off he would be. (Tr.

102, 122-132, 141-143, 237-238, 274-278, 284, 174, 335-336.)

The trial judge reserved ruling on petitioner’s motions

for judgment of acquittal made at the close of the govern-

ment’s case and at the close of all the evidence. The jury

was instructed, as to the accessory counts, that to be

guilty, petitioner must have knowledge of the bank officers’

commission of the relevant offenses. The jury was instruct-

ed, as to the conspiracy count, that they could find petition-

* This paragraph is not intended to summarize all the evidence but

simply the testimony relating to the obtaining of the two loans.

er guilty if they found that he entered into a conspiracy to

commit any one of the three objects of the conspiracy

charged.* Petitioner was found guilty on all six counts.

After verdict, the trial judge granted the motion for

judgment of acquittal as to the four accessory counts, find-

ing that it was not necessary to petitioner’s agreement with

Ness to obtain a loan that a bank officer would be criminal-

ly involved, and that there was not sufficient evidence from

which the jury could conclude beyond a reasonable doubt

that petitioner had specific intent to aid in, or specific

knowledge of, the crimes with which the bank officers were

charged. The trial judge upheld the jury’s verdict as to the

conspiracy count, apparently reasoning that since there

was prima facie proof that petitioner agreed to obtain a

loan under fraudulent circumstances, and the loan was, in

fact, obtained by means of a bank officer’s complicity, the

conspiracy was adequately proven. (App. B, pp. 16-18.)

Petitioner appealed from the jury verdict on the con-

spiracy count and the substantive §1014 count, and the

Court of Appeals affirmed. In so doing, the Court made

a finding that ‘‘Braverman could reasonably foresee

the necessity of the criminal involvement of bank officials.’’

(App. A, p. 8.) It is the propriety of the Seventh Cir-

euit’s use of that standard which petitioner respectfully

asks this Court,to review.

* The trial court’s charge on conspiracy and aiding and abetting

is appended as Appendix C hereto. The “one object” portion

of the charge is at App. C, p. 19.)

10

REASONS FOR GRANTING THE WRIT

This case involves a critically important, constantly re-

curring issue of federal conspiracy law which has never

been expressly decided by this Court: the standard of

proof to be applied in determining the scope of a par-

ticular defendant’s conspiratorial agreement when a sub-

stantial question exists as to his knowledge of some of the

crimina! dimensions of the conspiracy alleged. The ques-

tion has arisen in the trial of a single defendant and dem-

onstrates clearly that the confusion experienced in the

trial of conspiracy cases is due as much to ambiguous lan-

guage and vague standards in the law as it is to the prob-

lems created by multiple defendants.

Petitioner submits that this confusion of standards has

led the trial court and the Court of Appeals, both apply-

ing different tests of liability, to affirm his conviction of

membership in a conspiracy vastly different in nature

from anything of which he was shown to be aware. He

further respectfully submits that this Court’s clarification

of the standards governing this difficult area of the law is

desperately needed to protect the rights of those accused

of conspiracy and to set forth, for all those involved in

the trial of conspiracy cases, fair, ascertainable standards

of guilt.

1. The Decision Below, Holding That A “Reasonably

Foreseeable” Test Can Be Applied to This Case As

the Measure of Petitioner’s Liability in Conspiracy

Conflicts with Prior Decisions of This Court Holding

That There Must Be Clear, Unequivocal Proof of

Knowledge of the Conspiracy Alleged To Support A

Finding of Guilt of That Charge.

Petitioner was charged with membership in a conspiracy

which had as its alleged objects the violation of three fed-

eg eee ee ong

11

eral criminal statutes. Two of the alleged objects, the will-

ful misapplication of bank funds (18 U.S.C. § 656) and

the knowing making of false entries in the books of the

bank (18 U.S.C. § 1005) can be committed only by a bank

officer or employee, although an individual who is not

affiliated with a bank may be held liable as an aider and

abettor or as a conspirator in their commission. United

States v. Tornabene, 222 F.2d 875, 877 (3d Cir. 1955);

United States v. Cades, 495 F.2d 1166, 1170 (3d Cir. 1974).

To prove that an individual not affiliated with the bank

is guilty as an aider and abettor, the government must

prove that a bank officer committed the substantive of-

fense and that the defendant knew of his fraudulent in-

tent and joined with him. United States v. Cades, 495 F.2d

1166, 1168, 1170 (3d Cir. 1974). The third object of the

conspiracy with which petitioner was charged was submit-

ting false statements to a bank in order to influence its

action; petitioner does not here dispute that the govern-

ment established prima facie that he agreed with Ness

to submit false statements to the bank in order to permit

Ness to obtain the proceeds of a loan.

The decisions of this Court make clear that ‘‘ ‘{C]on-

spiracy to commit a particular substantive offense cannot

exist without at least the degree of criminal intent neces-

sary for the substantive offense itself.’’’ Ingram v. Unit-

ed States, 360 U.S. 672, 678 (1959). See United States v.

Feola, ...... US. ......, 95 S.Ct. 1255, 1265 (1975). To sup-

port a finding of intent, the Court has insisted that there

be evidence of knowledge, and that that evidence of knowl-

edge be ‘‘clear, not equivocal.’’ Direct Sales Co. v. United

States, 319 U.S. 703, 711 (1943). The Court has also said

that in the case of inherently broad schemes in which many

individuals are involved, a conviction may be had ‘‘of

12

those discovered upon showing sufficiently the essential

nature of the plan and their connections with it, without

requiring evidence of knowledge of all its details or of the

participation of others.’’ Blumenthal v. United States,

332 U.S. 539, 556-557 (1947).

The Court of Appeals, in adopting a reasonable foresee-

ability standard, attributed the test to Umited States

v. Greer, 467 F.2d 1064 (7th Cir. 1972), cert. denied, 410

U.S. 929 (1973), a case in which a defendant was held li-

able for a three-object conspiracy to (1) steal from an

interstate shipment of copper; (2) transport the copper

in interstate commerce and (3) conceal the stolen cargo,

on the basis of evidence that he had called friends in Chi-

cago, alerted them to the location of a disabled trailer

containing copper on an Indiana highway and had twice

later called them to ask about his share of the proceeds.

Against his contention on appeal that he had been shown

to have conspired only to steal the load, the Court held

he was liable for the whole conspiracy. The Court spoke

in objective terms, extending his liability to all objects

of the conspiracy alleged that were ‘‘indispensable’’ to

the success of that part of the venture with which he was

immediately concerned. (467 F.2d at 1071.)

In applying the Greer test to the case at bar, the Court

of Appeals significantly altered its meaning. In Greer, it

was virtually beyond controversy—and the court so

found— that the transportation and concealment of the cop-

per were indispensable aspects of its successful theft. The

Court did not have to look to the facts of record to know

that disposition of the goods follows a theft. It was that

knowledge that the Court assumed Greer had; to the extent

the Court spoke of inferring consent and assuming knowl-

13

edge it was in reality making the only inference that was

rationally possible, given the nature of the offenses. This

Court in Blumenthal made a similar inference. (332 U.S.

at 550.)

The Seventh Circuit in the instant case, however, applied

Greer’s language to a situation in which the crime it found

to be foreseeable, Johnson’s willful misapplication of bank

funds, was in no sense a necessary concomitant of the

submission of false loan documents. The trial court in

the case at bar so found in acquitting petitioner of the

accessory counts (App. B, p. 16):

‘*Unquestionably a loan could be fraudulently ob-

tained by Ness without complicity on the part of a

bank officer or employee: because a fraudulent loan

was obtained, it does not necessarily follow that a bank

officer wilfully misapplied funds or unlawfully made

false entries in bank records.

The Third Circuit in a recent decision reversed a defen-

dant’s convictions of aiding and abetting a bank officer and

conspiring with him to misapply funds, finding that despite

the bank officer’s fraudulent intent and the customer’s

fraudulent activities which facilitated the bank officer’s

misapplications, there was no evidence to show that the

customer knew of the bank officer’s criminal intent. United

States v. Cades, 495 F.2d 1166, 1168-1169 (3d Cir. 1974).

The objects of this alleged conspiracy are separate and

distinct. The agreement charged depends for its definition

and essential scope on its inner-bank dimension. The

application of a reasonable foreseeability standard to an

object so critical to the nature of the agreement directly

conflicts with the holdings of this Court that knowledge of

a conspiracy and intent to join it must be proven, and that

the proof must be clear, not equivocal. Only by a conscien-

14

tious insistence on proof of knowledge can liability in con-

spiracy be controlled. Without strict scrutiny of whether

knowledge has truly been proven, conspiracy will indeed,

as it has here, become ‘‘a dragnet to draw in all substantive

crimes.’’ Direct Sales Co. v. United States, swpra at 711.°

2. The “Reasonably Foreseeable” Test, As Applied In

This Case by The Court of Appeals for The Seventh

Circuit As The Measure of An Individual’s Liability

for Conspiracy, Sanctions The Withdrawal of The

Vital Factual Issue of Knowledge from The Jury.

The District Court instructed the jury that they could

find petitioner guilty of the single conspiracy alleged if

they found that he was knowingly and willfully a member

of a conspiracy to commit any one of the three offenses

charged as its objectives. The jury was further instructed

that if they found that a conspiracy existed and that the

defendant was one of its members, the conspirator attribu-

tion rules applied to any acts and declarations of other

members of the conspiracy done in furtherance of its objec-

tives. (App. C, pp. 19, 21.) These instructions literally mean

* In its discussion of the evidence, the Court of Appeals made two

misstatements. First, there is no evidence of record that petitioner

knew that Ness was insolvent; he was asked what his financial con-

dition was at the time, not whether Braverman was aware of it. (Tr. |

102.) (The government’s theory of Braverman’s motive was that

Ness appeared to him to be an active, successful commodities trader

and Braverman desired to win his favor and his business.) It is

also not correct that petitioner knew the loan would be granted prior

to the submission of the financial statement petitioner signed. While

the loan proceeds were in fact disbursed to Ness prior to the time

Ness submitted the statement, petitioner signed it prior to the time

the loan was granted, after Ness told him he wanted it to obtain the

loan. (Tr. 126-129.)

15

that guilt of the three-object conspiracy alleged can be

predicated on a finding that petitioner and Ness conspired

to submit false statements to influence the bank. The ‘‘in

furtherance’’ limitation to the co-conspirator hearsay rule

here extends by its own terms to all the objectives of the al-

leged conspiracy. No instruction directing the jury’s at-

tention to the scope of any conspiracy they found petitioner

to have joined was given.

This Court need not look to the evidence to see that peti-

tioner’s knowledge of the bank officers’ criminal complicity

was very much at issue in this case; the trial court’s de-

cision to set aside the jury’s verdict on the accessory

counts for lack of an adequate showing of knowledge and

intent makes that apparent. Further, there is nothing in

the nature of a plan to submit false statements to a bank

which suggests bank official involvement. See United

States vy. Cades, 495 F.2d 1166, 1170 (3d Cir. 1974). On the

record, Ness’ uncontradicted testimony of the absence of

contact between petitioner and the bank officials, and Ness’

failure to testify to any statements he made to petitioner

indicating criminal conduct by anyone at the bank at the

very least raises a jury question as to petitioner’s knowl-

edge of bank official complicity.

Before the decision in the instant case, it had been the

rule in the Seventh Circuit that whenever there was a pos-

sibility of a variance between an alleged multi-object con-

spiracy and the proven scope of an individual defendant’s

agreement, the scope issue had to be submitted to the jury.

United States v. Varelli, 407 F.2d 735, 746 (7th Cir. 1969).

See also Kotteakos v. United States, 328 U.S. 750, 769-770

(1946). In its opinion below, the Court of Appeals limited

this rule, holding that it did not apply to this case because

the possibility of a variance was not a ‘‘reasonable pos-

sibility.’’ (App. A, p. 9 and n.4.)

16

The Seventh Circuit’s failure to recognize the difference

between the transactionally-related objectives of the con-

spiracy alleged in United States v. Greer* and the distinct

crimes charged as conspiratorial objectives here caused it

to fail to require for conviction proof that petitioner had

actual knowledge of an inside bank conspiracy. Failing to

recognize the importance of that knowledge or its lack in

determining the nature of any agreement petitioner made,

the Court found it unnecessary to alert the jury to the

issue of the scope of petitioner’s agreement if they found

one, and to instruct them on how to apply the co-conspira-

tor attribution rules if petitioner’s agreement did not en-

compass bank officers’ crimes.

Petitioner’s knowledge of the alleged conspiracy was

very much at issue in this trial. It was an issue of fact

and susceptible of proof, if proof existed. The trial court’s

failure to instruct the jury either that they must find that

petitioner entered into an agreement encompassing all

three alleged objects or that they must determine the scope

of any conspiracy they find he joined vitiated his right to

trial by a jury adequately instructed as to all the issues.

See Brotherhood of Carpenters v. United States, 330 U.S.

395, 410-411 (1947.) The Court of Appeals’ holding that its

finding of foreseeability so conclusively foreclosed the issue

of actual knowledge as to leave not even a jury question

makes clear that the Seventh Circuit, in disregard of the

warnings of Direct Sales, supra, has dispensed with the

elements of actual knowledge and intent in multi-object

conspiracy trials.

* See the discussion at pp. 12-13, supra.

17

CONCLUSION

For the reasons stated above, a writ of certiorari should

issue to review the judgment and opinion of the United

States Court of Appeals for the Seventh Circuit.

Respectfully submitted,

Tuomas P. SuLLivan

Joan B. GorrscHaLL

One IBM Plaza

Chicago, Illinois 60611

(312) 222-9350

Counsel for Petitioner

Charles Braverman

JENNER & BLocK

Of Counsel

APPENDIX

APPENDIX A

OPINION BY JUDGE PELL.

In the

Gnited States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

June 16, 1975

Before

Hon. Watter J. Cummines, Circuit Judge

Hon. Wrisur F. Pe, Jr., Circuit Judge

Hon. Wiuu1am J. Campse.L, Senior Circuit Judge*

No. 74-1467

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

vs.

CHARLES BRAVERMAN,

Defendant-Appellant.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

* Senior District Judge William J. Campbell of the Northern

District of Illinois sitting by designation.

App. 2

This cause came on to be heard on the transcript of the

rec 7d from the United States District Court for the

Northern District of Illinois, Eastern Division, and was

argued by counsel.

On consideration whereof, it is ordered and adjudged by

this court that the judgment of the said District Court in

this cause appealed from be, and the same is hereby, AF-

FIRMED, in accordance with the opinion of this court filed

this date.

App. 3

Sa the

United States Court of Appeals

For the Seventh Ctrrutt

No. 74-1467

UNITED STATES OF AMERICA,

Plaintiff-A ppellee,

vs.

CHARLES BRAVERMAN,

Defendant-A ppellant.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 73 CR 766

Richard W. McLaren, Judge.

Argued November 7, 1974—Decided June 16, 1975

Before Cummincs and PeELu, Circwt Judges, and Camp-

BELL, Senior District Judge.*

Pei, Circuit Judge. The defendant-appellant Charles

Braverman was charged in a six-count indictment with

conspiracy and five substantive counts arising from the

procurement of two fraudulent loans. After a jury found

Braverman guilty on all six counts, the district court

judge, who had reserved ruling on Braverman’s motion

*Senior District Judge William J. Campbell of the Northern

District of Illinois is sitting by designation.

App. 4

for judgment of acquittal, found that the Government

had failed to prove four accessory counts (Counts 2

through 5) and granted Braverman’s motion on these

counts. Braverman now appeals from his conviction on

the remaining Counts 1 and 6, which charged, respec-

tively, conspiracy and making false statements to a bank

in order to obtain two loans, in violation of 18 U.S.C.

§ 1014. The major issues raised on appeal are: (1) wheth-

er the evidence was sufficient to prove Braverman in-

tended to defraud the bank; (?) whether the evidence was

sufficient to prove Braverman’s involvement in the con-

spiracy; (3) whether the district court erred in deferring

its ruling on Braverman’s motion for judgment of ac-

quittal; (4) whether the evidence was sufficient to show

the materiality of the financial statement; and (5) whether

the district judge erred in replaying the tape of the jury

instructions and permitting the jury to take notes during

this time.

1. Braverman contends with respect to both Counts

1 and 6, that the evidence was insufficient to prove that

he intended to defraud the Steel City National Bank.

The intent of the defendant, in a case such as this, may,

of course, be inferred from the facts and circumstances

in proof. United States v. Acree, 466 F.2d 1114, 1117

(10th Cir. 1972), cert. denied, 410 U.S. 913 (1973). View-

ing the evidence here, as we must, in the light most favor-

able to the Government, we find that the evidence was

more than sufficient to support the jury’s verdict.

Braverman, a broker on the Chicago Mercantile Ex-

change, agreed to use a fictitious name, ‘‘Peter Weis,’’ to

secure a $30,000 bank loan for his insolvent friend Robert

Ness. After being assured by Ness that Ness could ‘‘han-

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App. 5

dle’’ such a loan at the bank, Braverman signed a blank

bank note with the fictitious name, see United States v.

Jannelli, 461 F.2d 483 (2d Cir. 1972), cert. denied, 409 U.S.

980, and arranged for a mailing address where bank no-

tices could be mailed.

The conditions under which the loan was granted, more-

over, were highly unusual. A few days after Braverman

had signed the blank note but before any financial state-

ment was filed with the bank, Ness told Braverman that he

could expect loan approval in a day. Later when Braver-

man and Ness did ‘‘get together’’ to prepare a financial

statement, Braverman simply signed the blank statement

with the fictitious name and left it to the insolvent Ness

to fill in the financial data." At no time did Braverman

provide Ness with any information concerning his actual

financial situation.

Later, when the note became due, it was renewed by

using renewal notes signed by Braverman in the fictitious

name.

Furthermore, when difficulties arose with regard to the

false address given for Peter Weis, Braverman arranged

for a second false address, that of his nephew.? When

questioned by his nephew about the bank correspondence,

Braverman simply told him to ‘‘throw it out.’’

1The loan was, in fact, granted after Braverman had signed the

financial statement but before it was submitted to the bank.

2On two separate occasions, note-due notices were returned to

the bank, once because of “No Such Address” and once because the

property had been sold. These red flags to a lending institution ap-

pear not to have rippled the waters.

App. 6

The evidence also indicated that although Braverman

originally refused to secure a second ‘‘Peter Weis’’ loan

for Ness, funds from that $20,000 loan, once secured by

Ness, were used to place a particular commodities account

in a credit position. Braverman’s handling of this account

had generated over $3,500 in commissions for him until a

deficit position forced a halt to the trading. Once restored

to a credit position, the account generated a further $5,500

in commissions for Braverman. Moreover, the evidence

indicated that at some point Braverman signed the ficti-

tious name to a second blank financial statement which

Ness completed and submitted to the bank.

The fact that Braverman was willing to repay the loans

and did in fact do so does not negate his intent to defraud.

United States v. Acree, supra at 1118; United States v.

Fortunato, 402 F.2d 79, 80-81 (2d Cir. 1968), cert. denied,

394 U.S. 933 (1969).

The question of Braverman’s intent was a matter for

the jury to decide. The jury was aware of Braverman’s

illness during the pertinent period as well as the defen-

dant’s contention that he had merely been duped by Ness.

However, given the facts outlined above, we cannot say

that the evidence was insufficient to support the jury’s

verdict.

2. Count 1 charged a conspiracy involving Braverman,

Ness, and two officers of the Steel City National Bank,

Stanley Johnson and Charles Helms. The conspiracy, as

charged, had three objectives: (1) the willful misapplica-

tion of bank funds, (2) the making of false entries in

bank records, and (3) the submission of false statements

to the bank. The defendant argues that the evidence was

insufficient to prove Braverman’s involvement in the first

two objectives of the conspiracy. Braverman contends

App. 7

that the only conspiracy with which he could have been

charged is one whose sole object was to submit false

statements and whose sole participants were Ness and

himself.

As Braverman concedes, his acquittal on the accessory

counts dealing with the willful misapplication of funds

and the making of false entries did not preclude a find-

ing that Braverman was liable under a conspiracy count

extending to these activities. United States v. Greer, 467

F.2d 1064 (7th Cir. 1972), cert. dented, 410 U.S. 929 (1973).

Moreover, the fact that the Government presented no evi-

dence indicating that Braverman ever met Johnson or

Helms is not determinative of Braverman’s involvement

in the conspiracy since a conspirator need not know the

identity or even the number of his confederates. Blumen-

thal v. United States, 332 U.S. 539 (1947).

‘‘The fundamental question is what the defendant as-

sented to and whether that assent can be construed as

including subsequent participants and activities.’’ Greer,

supra at 1071. In Greer, the defendant simply informed

four persons of the location in Indiana of a truckload of

copper. On the basis of this information, the four stole

the copper, transported it to Chicago, warehoused it, and

ultimately sold a portion of it. Greer’s involvement was

limited to informing the others of the location of the truck

and to telephoning later to ask about his share of the

proceeds. This court held that although the evidence was

insufficient to prove that Greer aided and abetted the

transportation of the goods, the evidence was, nonetheless,

sufficient to support a conspiracy count charging three

objectives: stealing from an interstate shipment, trans-

porting stolen goods in interstate commerce, and conceal-

ing stolen goods.

App. 8

**(A] conspiracy with multiple objects and multiple

parties can... be held to constitute a single con-

spiracy as long as the objects are integrally related,

such that ‘the success of that part with which [the

defendant] was immediately concerned, was depen-

dent upon the success of the whole.’ . . . [E]Jach ‘link’

in the scheme must have assumed that the unlawful

venture could not stop with their task alone. Thus

we infer consent to the later, indispensable stages

from Greer’s consent to the preliminary ones.’’ 467

F.2d at 1071.

Just as Greer could reasonably foresee that the stolen

copper would be transported in interstate commerce and

concealed, so, in the present case, Braverman could rea-

sonably foresee the necessity of the criminal involvement

of bank officials. Braverman applied for a loan in a false

name and provided a false address after being assured

that Ness could ‘‘handle’’ such a loan at the Steel City

National Bank.* Braverman was told by Ness to expect

approval of the loan even before a financial statement had

been submitted. Braverman later signed a b'ank financial

® Words, of course, must be viewed in the context in which they

are used. No doubt a prospective borrower whose credit was estab-

lished at a bank could be deemed to be handling a loan at the bank,

even though that loan was routine and legitimate, although in this

circumstance it might seem more appropriate to say that the bank

was handling the loan. In the present situation, in which the finan-

cial statement was signed with a fictitious name without knowledge

of what was to be inserted on the form, “handle” would reasonably

appear to imply something more than the ordinary legitimate bank

loan transaction and rather to carry the indication that notwithstand-

ing any lack of authenticity in the transaction the loan nevertheless

could be arranged at a particular bank by virtue of intra-bank co-

operation, which, under the pre -nt circumstances, would necessarily

be of an illegal nature.

App. 9

statement with the fictitious name but without supplying

Ness with any information concerning his actual finances.

Braverman assured his nephew he could simply throw

out the bank correspondence addressed to Peter Weis.

Yet equipped initially with only the blank note signed in

a false name and a false address, and later supplemented

with a signed blank financial statement, an insolvent Ness

sought to and did secure a $30,000 loan. As in Greer, Bra-

verman participated in ‘‘setting up a structure which [be-

came] the continuing focal point for crimes’’ and ‘‘must

have assumed that the unlawful venture could not stop

with [his] task alone.’’ Id.

It is no sufficient answer to the contrary to say that

Braverman could properly assume that Ness would so

doctor the papers supporting this loan at a national bank

that the loan officers would be fooled into thinking that

thesé were indeed legitimate lending transactions. The

handling of the transactions was so bizarre, the conceal-

ment of the truth was so evident, and the badges of fraud

were so obvious that we are unable to preclude the draw-

ing of a reasonable inference that Braverman was not

ignorant of the necessity of bank inside complicity. He

need not have foreseen the exact form of that complicity

nor the identity of those involved.

Since the indictment charged and the proof showed a

single continuing and continuous conspiracy, the ‘‘pos-

sibility of a variance’’ United States v. Varelli, 407 F.2d

735, 746 (7th Cir. 1969), did not exist and, therefore, a

multiple conspiracy instruction was not necessary.‘ United

4 We read Varelli’s “possibility” as meaning something more than

a scintilla, and requiring a reasonable possibility of variance. Here

the conspiracy by its nature required for its accomplishment the par-

ticipation of bank officials.

App. 10

States v. Barrera, 486 F.2d 333, 339 (2d Cir. 1973); Unit-

ed States v. Calabro, 449 F.2d 885, 893 (2d Cir. 1971), cert.

demed, 404 U.S. 1047 (1972).

3. Braverman next complains that the district court

erred in deferring his ruling on the defense motion for

acquittal until after the jury returned its verdict.

While the better practice would have been to have en-

tered the judgment of acquittal at the close of the Gov-

ernment’s case-in-chief, the error is harmless since, when

the Government rested, the evidence was sufficient to sus-

tain a conviction on Counts 1 and 6. United States v.

Guinn, 454 F.2d 29, 33 (5th Cir. 1972), cert. denied, 407

U.S. 911; United States v. Prionas, 438 F.2d 1049, 1054

(8th Cir. 1971), cert. denied, 402 U.S. 977. Moreover, be-

cause Count 1 charged Braverman with conspiring to com-

mit the same acts alleged in the accessory counts, all of

the evidence supportive of the accessory counts would

have been admissible had Braverman been tried only on

Counts 1 and 6. United States v. Wininger, 427 F.2d 1128,

1129 (6th Cir. 1970).

We find unpersuasive Braverman’s contention that the

jury’s erroneous finding of guilt on the accessory counts

‘‘must necessarily have infected the jury’s deliberations

on the conspiracy count.’’ Acquittal on an accessory count

does not bar a conviction on a conspiracy count based on

the same facts. See Greer, supra. Furthermore, the jury

in the present case was twice instructed that each count

should be separately considered and that ‘‘[t]he defen-

dant’s guilt or innocence of the crime charged in one count

should not affect your verdict on any other count.’’ See

United States v. Pacente, 503 F.2d 543, 548 (7th Cir. 1974).

4. Braverman contends, with respect to Count 6, that

the evidence was insufficient to show the materiality of

the financial statement.

App. 11

A statement concerns a material fact when it has the

‘‘capacity to influence’ the lending institution. United

States v. Goberman, 458 F.2d 226, 229 (3d Cir. 1972).

See also Blake v. United States, 323 F.2d 245 (8th Cir.

1963). Here, the false financial statement clearly had the

capacity to influence the bank officials. The fact that John-

son granted the loan before the statement was submit-

ted is irrelevant since, as the defendant concedes, ma-

teriality does not depend upon actual reliance. Gober-

man, supra. Although the loan was granted before the

statement was submitted, Johnson granted the loan with

the knowledge and assurance that the statement would

be forthcoming. Braverman, moreover, cannot avoid

criminal liability on the basis of Johnson’s illegal con-

duct. ‘‘The words ‘for the purpose of influencing’ were

included in the statute to define the quality of the re-

quired intent, not to immunize a party from criminal liabili-

ty because an officer of the bank was involved in the

fraudulent scheme.’’ United States v. Niro, 338 F.2d 439,

441 (2d Cir. 1964). Finnally, we note that, subsequent to

the submission of the financial statement, the loan was

repeatedly renewed, transactions which the statement

clearly had the capacity to influence. It is common knowl-

edge that not only do loan files have to meet bank imposed

standards but such files are subject to periodic scrutiny

by national bank examiners as to supporting documents

and other pertine:. data.

5. We also find unpersuasive Braverman’s contention

that the district judge erred in responding to a jury in-

quiry by having a tape of the entire set of instructions

played and in allowing the jury to take notes while the

tape was played.

The necessity, extent, and character of any supplemental

instructions to the jury are matters within the discretion

of the district court. United States v. Jackson, 482 F.2d

1167, 1177 (10th Cir. 1973), cert. denied, 414 U.S. 1159

App. 12

(1974). Since the instructions in the present case prop-

erly stated the law of aiding and abetting, the district

court did not abuse its discretion by having the instruc-

tion replayed for the jury. United States v. Wilkerson,

456 F.2d 57, 62 (6th Cir. 1972), cert. denied, 408 U.S. 926.

The jury’s inquiry, moreover, related only to the accessory

counts on which the district judge later granted the de-

fense motion for acquittal. United States v. Harris, 388

F.2d 373 (7th Cir. 1967), and Powell v. United States, 347

F.2d 156 (9th Cir. 1965), do not support Braverman’s con-

tention. In Harris, the district judge, in rereading the

instructions, omitted all definitions of essentia] terms and

made no reference to the presumption of innocence and

standard of proof required for conviction. In Powell, the

trial court reread only part of the instructions which

might have led to an improper standard of review.

The decision to allow a jury to take notes as well as

the procedure us@d for such note-taking are also matters

within the sound discretion of the district court. United

States v. Marquez, 449 F.2d 89, 93 (2d Cir. 1971), cert.

dented, 405 U.S. 963 (1972); United States v. Pollack, 433

F.2d 967 (5th Cir. 1970). We find no abuse of discretion

here. Since the jury here requested that they be per-

mitted to make notes during the playing of the tape, the

defendant’s reliance on United States v. Standard Oi Co.,

316 F.2d 884 (7th Cir. 1963), is inapposite.

We have considered the other issues raised by the ap-

pellant but find them to be without merit.

Appeals for the Seventh Circuit

App. 13

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Lllinois 60604

July 16, 1975.

Before

Hon. Wauter J. Cummines, Circuit Judge

Hon. Wiravur F. Pew, Jr., Cireuit Judge

Hon. Wutam J. Campsei, Senior District Judge*

UNITED STATES OF AMERICA,

Plaintiff-appellee,

No. 74-1467 vs.

CHARLES BRAVERMAN,

Defendant-appellant.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 73 Cr 766

Richard W. McLaren, Judge.

On consideration of the petition for rehearing en banc.

or in the alternative that it be reheard by the original

panel, filed in the above-entitled cause, no judge in active

service having requested a vote thereon, nor any judge

having voted to grant the petition, and all of the members

of the panel having voted to deny a rehearing,

IT IS ORDERED that the petition for a rehearing in

the above-entitled cause be, and the same is _ hereby,

DENIED.

* Senior District Judge William J. Campbell of the Northern

District of Illinois is sitting by designation.

NOTE: Judge Philip W. Tone, Circuit Judge, has disqualified

himself from any corideration of the petition for rehearing en banc

in this matter. .

App. 14

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA

vs.

CHARLES BRAVERMAN

No. 73 CR 766

MEMORANDUM OPINION AND ORDER

This matter is before the Court on defendant’s post-

trial motions following his conviction by a jury on six

counts arising out of allegedly illegal bank loans. The

motions are granted in part and denied in part.

The indictment contained six counts. Count I alleged

that defendant Braverman conspired with Stanley John-

son, Charles Helm and Robert Ness to commit or to aid

and abet in the commission of three illegal objects: (1) the

willful misapplication of funds of the Steel City National

Bank; (2) the making of false entries in the books, re-

ports and statements of the said bank; and (3) the know-

ing making of false statements and reports reflecting non-

existent and overvalued assets for the purpose of influenc-

ing the actions of the Steel City National Bank.

Counts II and III charged Braverman with aiding and

abetting Stanley Johnson in the willful misapplication of

funds belonging to the Steel City National Bank in viola-

tion of 18 U.S.C. §§2 and 656. Counts IV and V charged

ne eS eee

App. 15

Braverman with aiding and abetting Johnson in the mak-

ing of false entries in the bank’s interview and Memo-

randum sheets for two different loans in violation of 18

U.S.C. §§2 and 1005. At the time the offenses allegedly

were committed Stanley Johnson was an officer and em-

ployee of the Steel City National Bank.

Count VI charged that Braverman did knowingly and

willfully make and cause to be made false statements of

material facts in a personal statement submitted to the

Steel City National Bank in order to obtain two loans

in the amount of $30,000 and $20,000, respectively.

The defendant has moved for judgment of acquittal

n.0.Vv. or, in the alternative, for a new trial. Upon a mo-

tion for judgment of acquittal the evidence must be taken

in the light most favorable to the government, and if there

is substantial evidence tending to show that the defen-

dant is guilty beyond a reasonable doubt, the motion must

be denied and judgment entered on the jury’s verdict.

United States v. Yeoman-Henderson, Inc., 193 F.2d 867,

869 (7th Cir. 1952).

As to Counts II through V the motion for judgment of

acquittal is granted. Braverman was charged as an aider

and abettor in those counts, since he is not a bank officer

or employee and 18 U.S.C. $§656 and 1005 by their terms

do not make non-bank employees liable as principals in

their individual capacities. The evidence established that

Robert Ness, a lawyer and personal friend, approached

Braverman in order to borrow money. After having re-

fused to loan his own funds, Braverman eventually agreed

to assist Ness in obtaining a bank loan under a fictitious

name. Braverman signed some notes and personal

financial statement forms in blank and provided addresses

to which bank statements would be mailed.

App. 16

Unquestionably a loan could be fraudulently obtained

by Ness without complicity on the part of a bank officer

or employee: because a fraudulent loan was obtained,

it does not necessarily follow that a bank officer wilfully

misapplied funds or unlawfully made false entries in bank

records. In light of this, in order to convict Braverman

on Counts II through V there must be evidence that he

had the specific intent to aid in, or specific knowledge of,

the crimes with which Johnson was charged. See United

States v. Greer, 467 F.2d 1064, 1069 (7th Cir. 1972), cert.

denied, 410 U.S. 929 (1973). Taking the evidence in the

light most favorable to the government there was not sub-

stantial evidence from which the jury could conclude be-

yond a reasonable doubt that Braverman had the specific

intent to aid Johnson or specific knowledge of the crimes

with which Johnson was charged.

Following oral argument on the motion for judgment

of acquittal on Counts II through V, defendant submitted

a supplemental brief in support of his motions with respect

to Counts I and VI. The motions rest ;rimarily on the

contention that the government proved more than one con-

spiracy, if any, whereas Count I alleges the existence of a

single conspiracy having three objects. The resulting

variance is purportedly fatal. Furthermore, it is con-

tended that in light of the proof of multiple conspiracies,

the jury was not adequately instructed on the co-conspira-

tor hearsay rule and the jury’s verdict may have been

based upon one of the unproven alternatives on which it

was instructed that it could base a finding of guilty on

Count I.

The fact that the government failed to prove that Brav-

erman had the specific intent to aid Johnson or had specific

knowledge of Johnson’s criminal conduct does not mean

App. 17

@ fortiori that he cannot be found guilty of a conspiracy

encompassing Johnson’s conduct. Cf. Greer, supra. In

that case, Greer simply notified others of the existence

in Indiana of a truckload of copper. The copper was

stolen by the other persons and transported from Indiana

to Chicago. Greer and six others were charged with con-

spiring to steal from an interstate shipment; transporta-

tion of stolen cargo in interstate commerce; and concealing

the stolen cargo. Greer was also charged with the sub-

stantive crime of transporting the copper in interstate

commerce. Greer’s conviction on the substantive count was

reversed since the government failed to prove that he in-

tended to aid in post-theft plans or that he knew of the

thieves’ travel plans.

In spite of this absence of proof on the substantive

charge, Greer’s conspiracy conviction was upheld, witn

the Seventh Circuit rejecting his contention that multiple

conspiracies were proven. It was stated at 1071 that a

conspiracy with multiple objects and multiple parties can

constitute a single conspiracy if the objects are so integral-

ly related that the success of defendant’s role is dependent

on the success of the whole. The court went on to note

that /

‘‘Tejonspiracy, it is suggested, is more than a species

of inchoate crime; conspirators are held liable for

setting up a structure which becomes the continuing

focal point for crimes. . .. Hence, we may infer

agreement to transport and dispose of the copper from

complicity in a structure that readily led to that end

where we do not infer intent to commit the same sub-

stantive offenses... .’’

In light of the Greer decision, Braverman’s acquiescence

and cooperation in obtaining a loan in the name of a

fictitious person, his considerable business experience, his

App. 18

use of the proceeds of one of the unlawful loans, and the

acts taken to obtain the loan from the Steel City National

Bank, there is substantial evidence tending to support the

existence of a single conspiracy. There is, of course, no

question of the falsity of the loan papers defendant know.

ingly signed and, accordingly, no question that his convic-

tion under Count VI must stand.

The defendant’s motions for acquittal and a new trial on

Counts I and VI are therefore denied.

IT IS SO ORDERED.

ENTERED:

/s/ R.W. McLaren

United States District Judge

DATED: May 31, 1974

PC A A EE OP A Et Be in ac, lh i al ae

App. 19

APPENDIX C

The Charge Relating To Conspiracy and Aiding and

Abetting (Tr. 755-770)

I come now to the second part of the instructions, the

specific charges in this indictment, and the standards by

which you are to judge them.

In Count I of the indictment the various named defen-

dants were indicted for the crime of conspiracy (a) to

wilfully misapply and cause to be misapplied monies, funds

and credits of Steel City National Bank through transac-

tions of that bank with intent to defraud that bank and

to aid, abet, counsel, induct and procure the commission

of the aforementioned offenses, all in violation of United

States law. (b) To make and cause to be made false

entries in the books, reports and statements of the said

bank with intent to defraud the bank, and further, with

intent to deceive and defraud the board of directors of the

Steel City Bank and the Controller of the Currency, and

to aid, abet, counsel, induce and procure the commission

of the aforementioned offenses in violation of federal law.

(ec) To knowingly make false statements and reports re-

flecting non-existent and overvalued assets for the purpose

of influencing the actions of the Steel City Bank, and to

aid, abet, counsel, induce and procure the commission of

the aforementioned offenses, all in violation cf Title 18,

U.S. Code, Sections 2 and 1014.

To convict the defendant Braverman of this offense, the

government must prove beyond a reasonable doubt, first,

the existence of a conspiracy to commit any one of these

offenses; second, that defendant Braverman was know-

ingly and wilfully a member of the conspiracy; and, third,

App. 20

that during its existence at least one overt act was com.

mitted by one or more of its members in furtherance of

the objectives of the conspiracy.

It is the conspiracy to commit the offense I have stated

which is the crime charged and it may be established re-

gardless of whether the purposes of the conspiracy were

aceomplished or whether the substantive crimes were ac-

tually committed.

A conspiracy is a combination of two or more persons

to accomplish an unlawful purpose or a lawful purpose by

unlawful means. While it involves an agreement to violate

the law, it is not necessary that the persons charged met

together and entered into an express or formal agreement

or that they stated in words or writing what the scheme

was or how ‘t was to be effected; it is sufficient to show that

they tacitly came to a mutual understanding to accomplish

an unlawful act. Such an agreement may be inferred from

the circumstances and the conduct of the parties since

ordinarily a conspiracy is characterized by secrecy.

In determining whether a conspiracy existed, the jury

should consider the acts and declarations of all of the

alleged participants. However, in determining whether

this particular defendant, Charles Braverman, was a mem-

ber of a conspiracy, if any, the jury should consider only

his acts and statements. He cannot be bound by the acts

or declarations of other participants unless and until it is

established that a conspiracy existed and that he was one

of its members.

To be a member of the conspiracy, a defendant need not

know all of the other members nor all of the details of the

conspiracy nor the means by which the objects were to be

accomplished. Each member of the conspiracy may per-

form separate and distinct acts.

- a

Paden ee or a ee

App. 21

It is necessary, however, that the government prove be-

yond a reasonable doubt that a defendant was aware of

the common purpose and was a willing participant with

the intent to advance the purpose of the conspiracy.

The extent of a defendant’s participation is not deter-

minative of his guilt or innocence. A defendant may be

convicted as a conspirator even though he plays a minor

part in a conspiracy. His financial stake, if any, in the

venture is a factor to be considered in determining whether

a conspiracy existed and whether a defendant was a mem-

ber of it.

If it is established beyond a reasonable doubt that a

conspiracy existed and that the defendant was one of its

members, then the acts and declarations of any other mem-

ber of such a conspiracy in or out of the defendant’s pres-

ence done in furtherance of the objectives of the conspiracy

and during its existence may be considered as evidence

against such defendant.

When persons enter into an agreement for an unlawful

purpose, they become agents for one another. However,

statements of any conspirator which are not in further-

ance of the conspiracy or made before its existence or

after its termination may be considered as evidence only

against the person making those statements.

The following overt acts are alleged in the indictment:

1. That in or about April of 1971, Robert Ness and

Charles Braverman had a conversation at Chicago, Illinois.

2. On or about April 1, 1971, Robert Ness and Charles

Braverman prepared and Charles Braverman signed a per-

sonal statement with the name of Peter Weis containing

false statements as to the said Peter Weis’ assets, income

and position.

(Reading balance of overt acts.)

App. 22

The Grand Jury realleges and incorporates by reference

the allegations found in Counts 2 through 5 of the indict-

ment and these are the substantive counts which I will

get to in a moment, and they are alleged as separate and

distinct overt acts, and this is said all to be in violation

of Title 18, United State Code, Section 371.

It is not necessary that all of the overt acts charged in

the indictment were performed. One overt act is sufficient.

An overt act, incidentally, means any act committed by

one or more of the conspirators to accomplish a purpose

of the conspiracy. It need not be in violation of the law

and the other conspirators need not join in it or even

know about it. It is necessary only that such act be in

furtherance of the purpose of objects of the conspiracy.

If the jury finds beyond a reasonable doubt that a con-

spiracy existed »s charged in the indictment and that dur-

ing the existence of the conspiracy one of the overt acts

allegedly was knowingly done by one or more of the con-

spirators and in furtherance of some object of the con-

spiracy, proof of the conspiracy offense is then complete.

It is complete as to each defendant found by the jury be-

yond a reasonable doubt to have been knowingly and wil-

fully a member of the conspiracy at the time the overt act

was committed, regardless of which of the conspirators

committed the overt act.

Incidentally, I used the term ‘‘wilfully’’ a number of

times. Let me define it for you. An act is done wilfully

if done voluntarily and intentionally and with the specific

intent to do something the law forbids, that is to say, with

bad purpose, either to disobey or to disregard the law.

We move now to Counts 2 through 5. The defendant

Charles Braverman is charged in Counts 2 through 5 with

aiding and abetting Stanley Johnson in certain violations

LN a RC > Nn, ea,

App. 23

of federal law. This is said to be in violation of Title 18,

United States Code, Section 2. This Section provides

that ‘‘whoever aids, abets, counsels, commands, induces or

procures the commission of a crime is punishable as a

principal.’’

In order to aid or abet the commission of a crime, a

person must associate himself with the criminal venture,

participate in it and try to make it succeed.

Count 2 of the indictment charges that on or about

@ 8 e

It is further alleged in this Count 2 that the defendant

Charles Braverman, knowing the foregoing, did wilfully

aid and abet such offense by Stanley Johnson.

Count 3 of the indictment charges that on or about

December

—and that defendant Charles Braverman, knowing the

foregoing, did wilfully aid and abet such offense by Stan-

ley Johnson.

Now Title 18, United States Code, Section 656, which

Stanley Johnson is alleged to have violated, provides in

part:

‘*Whoever, being an officer or employee of or con-

nected in any capacity with any national bank or a

bank; the deposits of which are insured by the F.D.L.C.,

wilfully misapplies any of the monies, funds, or

credits of such bank, shall be guilty of an offense

against the laws of the United States.’’

I have used the word ‘‘misapplication.’’ Let me define

it. A misapplication means an obviously improper and

unjustifiable use of the funds of a national bank done with

intent to injure and defraud the bank and includes a pay-

ment made for a fictitious purpose or a payment the true

purpose cf which is concealed from the bank.

App. 24

There can be a misapplication of the funds of a national

bank even though the bank does not suffer an actual loss.

The fact that the defendant made restitution to Steel City

National Bank is not a defense to charges contained in the

indictment, but it may be considered in determining

whether or not the defendant had the requisite intent to

defraud required under the statutes.

Now three essential elements are required to be proved

beyond a reasonable doubt in order to establish the offense

of aiding and abetting with which Charles Braverman is

charged in Counts 2 and 3 of the indictment: First, that

there was a wilful misapplication of money or funds by

Stanley Johnson in the manner charged in Counts 2 and

3 of the indictment. Second, that Charles Braverman,

knowing the foregoing, did aid and abet Stanley Johnson

to misapply those monies or funds. And, third, that

Charles Braverman did such act or acts knowingly and

wilfully.

To move on to Count 4, Count 4 of the indictment

charges:

® 6 e

—and that defendant Charles Braverman, knowing the

foregoing, did wilfully aid and abet such offense by Stan-

ley Johnson.

Count 5 of the indictment charges:

On or about December 17

o e @

—and that defendant Charles Braverman, knowing the

foregoing, did wilfully aid and abet such offense by Stan-

ley Johnson.

All right. Title 18, U. S. Code, Section 1005 which

Stanley Johnson is alleged in these two counts to have

violated provides in part:

App. 25

‘*Whoever makes any false entry in any book, re-

port or statement in any national bank or a bank, the

deposits of which are insured by the F.D.LC., with

intent to injure or defraud such bank, shall be guilty

of a violation of this section.’’

This is the crime with which Stanley Johnson is charged

in Counts 4 and 5.

I instruct you that as a matter of law, Government’s

Exhibit 17 entitled ‘‘Interview and Memorandum Sheet’’

is a book, report or statement within the meaning of the

statute.

Again three essential elements are required to be proved

beyond a reasonable doubt in order to establish the offense

of aiding and abetting with which Charles Braverman is

charged in each of Counts 4 and 5 of the indictment: First,

that there was a false entry made by Stanley Johnson in a

book, report or statement of a national bank. Second, the

making of the entry by Johnson was done with intent to in-

jure or defraud the bank. And third, that the defendant

Braverman, knowing the foreging, did wilfully aid and

abet such false entry to be made.

I used the word ‘‘false’’ a number of times. Let me

define that for you. A statement, including a statement,

a claim or a document, is false if it was untrue when made

and was then known to be untrue by the person making it

or causing it to be made.

I have used the phrase ‘‘intent to defraud.’’ Let me

define that for you. The phrase ‘‘intent to defraud’’ used

in the crime charged means that the act was done know-

ingly, with the specific purpose to deceive, in order to

cause finaucial loss to another or financial gain to one’s

self or another.

App. 26

In order to find Charles Braverman guilty of aiding

and abetting the commission of the wilful misapplication

of Steel City National Bank funds or the making of false

entries in the books of the Steel City National Bank, you

must first find beyond a reasonable doubt that Stanley

Johnson committed those crimes. It is immaterial that

Stanley Johnson is not on trial at the present time.

If you are not convinced beyond a reasonable doubt of

the guilt of Stanley Johnson, you must find Charles

Braverman not guilty under Counts 2, 3, 4 and 5.