Opposition — Pomponio v. United States

-

“No. 77-466 \

"> ‘Supreme Court

FILED

)} FEB & j978

u.&

ICHAEL RODAK, JR., CLERK

OCTOBER TERM, 1977

Louis J. POMPONIO, JR., PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FOURTH CIRCUIT

BRIEF *OR THE UNITED STATES

IN OPPOSITION

- Wave H. McCres, Jr.,

Solicitor General,

BENJAMIN R. CIVILETTI,

Assistani Attorney General,

S1pNEY M, GLAZER,

» JOHN VOORHEES,

Attorneys,

Department cf Justice,

Washington, D.C. 20530.

| In the Supreme Court of the Bnited States

<> 2 alee ae > a

INDEX

Page

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EE TUUIIINES * cccinnenscnsicnssnsceniieeatieinesiiagndidiidiasniens l

ID itathscsenicnssisabnandinssdiedintesdizameivtdeiuenideasnieeisianedilin 2

PRD. hecheeicishiscsnsdiiiessconciiclenise bile ccaniticnieniaiiieninaialtdaliinaauts 3

CE en ie aa tance ee ROT EEE FS eS MC RTE 17

CITATIONS

Cases:

Barker v. Wingo, 407 U.S. 514... ees 13

Coffin v. United States, 156 U.S. 432 «0.0.00... 14

Copeland, Appeal of, 531 F. 2d 1195 ................. 8

Coson v. United States, 533 F. 2d 1119 ........... 10

Dolly Madison Industries, Inc.,

In re, 351 F. Supp. 1038, affirmed

without opinion, 480 F. 2d 917.0... eee. 8

Gilbert v. United States, 370

ON NE a sasesinniiaell 7

Grand Jury Investigation of Banana

Industry, In re, 214 F. Supp. 856 ................. 12

Holland v. United States, 348 U.S. 121 ............ 14

Horning v. District of Columbia, ;

STUNG TET " teiidecidantbcledandiaaeiadiesiiaevensiecdinniacnis 16

Lawn v. United States, 355 U.S. 339 ...........c00 13

Lyda v. United States, 279 F. 2d 461 ................ 4

iil

Page Page

Cases—(Continued).: Cases—(Continued):

Pereira v. United States, 347 U.S..1 wo... 16 | United States v. Poole, 557 F. 2d 531 ................ 5

Quercia v. United States, 289 U.S. 466 ............ 16 United States v. Sheridan, 329 U.S. 379 ........ 4,5

Salinger v. Loisel, 265 U.S. 224 woccececccccceeseeeeeees 11 United States vy. Thompson, 251 U.S. 407 ........ 11

United States v. Amendola, 558 F. 2d 1043 ..... 13 United States v. Walker, 176 F. 2d 564.

United States v. Anderson, 532 F. 2d 1218, certiorari denied, 338 U.S. 891.0000... eee. 5

certiorari denied, 429 U.S. 839 0.0... 7 United States v. White, 514 F. 2d 205 .n.............. 9

United States v. Bottone, 365 F. 2d 389, Wisniew “ki v. United States, 353 U.S. 901. ....... 15

certiorari denied, 385 U.S. 974 woo. 4 isan

Constitution, statutes and rules:

United States v. Caci, 401 F. 2d 664, cL

certiorari denied, 394 U.S. 917 voccceccecseeseeseenes 5 Constitution of the United States, Sixth

net i oF: PEIINEE sanscenchscnincctencisdnninsinpretingiiiannecepedes 2, 12

nicnaycuspualigadesesactiyenibatan dase tugecanians ¥ ET ieeiacinc acevo cena 2

ae re een See 7 <iageanaes 1 18 U.S.C. 495. caccccsssscssssesessseessssssesessssesseseeeenee 7

set oe * ed és a odammnase: ‘i 18 U.S.C. 134] ccccccsssssssssssssssssssssssssssseeeeseeeeesee s

United States v. Evans, 526 F. 2d 701,

certiorari denied, 429 U:S. 818 TES. 10 18 U.S.C. 1342 PoP PPP eee ee ee eee Pee eee Pee eee ee ee eee eee ee eee eee ee eee A

United States v. Fallen, 498 F. 2d 172 ne 15 18 U.S.C. 2314 eonecovessoceoensocoosescoccocccoososoeoescs passim

Speedy Trial Act of 1974, 18

mat States v. ean as ap = 8 aeaniieaids 13 U.S.C. (Supp. V) 3161 et seq.

United States v. Leggett, 292 F. 2d 423,

certiorari denied, 368 U.S. 914.00... 4 18 U.S.C. (Supp. V) S1GI(€) -......-reessvevereeeeee M2

United States v. Morrow, 537 F. 24 120 cecccsssss 7 18 U.S.C. (Supp. V) 3161(hY8KA) ................ i3

United States v. Muckenstrum, 515 F. 2d 568, | SS UBL. GRERD. V) SOGIED nccccccscccceccsessscccces 13

certiorari denied, 423 U.S. 1032 ..............0..2.. 15 Virginia Uniform Commercial Code (1965):

United States v. Natale, 526 F. 2d 1160, By ITT criiisitcipededaicddansacancdnielasilbiubendsisintiness 8

certiorari denied, 425 U.S. 950 ..................04.. 16 Section 8.9-305 8

United States v. Park, 421 U.S. 658 ..........00000. 14

iV

Page

Constitution, statutes and rules—(Continued):

Federal Rules of Criminal Procedure:

aad ities 10

AR aCe Re ORD RON Ta 10

Rule 12, Local Rules of the United

States District Court for the Eastern

SE Ee IED cictsenincinietenensineinsdasismeteniege

~ |

In the Supreme Court of the Hnited States

OCTOBER TERM, 1977

No. 77-466

Louis J. POMPONIO, JR., PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FOURTH CIRCUIT

BRIEF FOR THE UNITED STATES

IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. A) is

reported at 558 F. 2d 1172.

JURISDICTION

The judgment of the court of appeals was entered on

July 27, 1977. On August 22, 1977, the Chief Justice

extended the time for filing a petition for a writ of

certiorari to September 25, 1977 (a Sunday), and the

petition was filed on September 26, 1977. The jurisdic-

tion of this Court is invoked under 28 U.S.C. 1254(1).

QUESTIONS PRESENTED

1. Whether 18 U.S.C. 2314, which proscribes the

knowing transportation in interstate commerce of a

security taken by fraud, requires that the security be taken

directly from the victim of the fraud.

(1)

2

2. Whether the evidence showed that petitioner

transported “counterfeit” securities, within the meaning of

18 U.S.C. 2314.

3. Whether petitioner’s indictment and conviction were

obtained through abuses of the grand jury process or

violations of Internal Revenue Service regulations.

4. Whether petitioner was denied his right to a speedy

trial under the Sixth Amendment or the Speedy Trial Act

of 1974.

5. Whether the district court’s instructions to the jury

were erroneous.

STATEMENT

Following a jury trial in the United States District

Court for the Eastern District of Virginia, petitioner was

convicted of interstate transportation of counterfeit

securities and securities taken by fraud, in violation of 18

U.S.C. 2314 and 2.' He was sentenced to one year’s

imprisonment on each count, the terms to run concur-

rently.

The evidence at trial, which is summarized in the

opinion of the court of appeals (Pet. App. 6a-7a), showed

that in 1970 petitioner and his brothers owned a number

of real estate and development companies in Northern

Virginia. In October 1970, petitioner pledged all of the

stock in one of these companies, Zachary Taylor Corp., to

Jerome S. Murray as collateral for the satisfaction of a

commercial obligation. The stock certificates, numbered

1, 2 and 3, were delivered to Murray’s agent, who placed

them in a safe deposit box in a bank. On June 28, 1971, at

a time when the Pomponio organization was facing

'The jury acquitted petitioner's brothers, co-defendants Peter and

Paul Pomponio, on the same charges.

3

critical cash flow problems, petitioner went to

Philadelphia, Pennsylvania, and pledged the same stock

in the Zachary Taylor Corp. to John McShain, without

notifying or obtaining a release from Murray. In order to

convince McShain that he was receiving 100 percent of

the corporation’s stock, as he had been promised,

petitioner bought a new stock book and labelled the

pledged stock certificates as certificates 1, 2 and 3 in

Zachary Taylor Corp.

In return for the stock, McShain endorsed a promissory

note for $3,800,000 that had been executed by petitioner

and his brothers payable to the Continental Bank of

Philadelphia. McShain’s endorsement was essential for

the loan to the Pomponios because they were not known

to the bank (Tr. 523). The bank thereafter issued

petitioner a cashier’s check for $2,000,000 and held the

balance of the loan in an escrow account. Petitioner

returned to Virginia with the cashier’s check.

The first count of the indictment was based on the

interstate transportation of the cashier’s check received by

petitioner as a result of his fraudulent procurement of

McShain’s endorsement on the promissory note. The

second count was based on petitioner’s transmission from

Virginia to Pennsylvania of counterfeit securities in the

Zachary Taylor Corp. for delivery to McShain.

ARGUMENT

1. 18 U.S.C. 2314 makes it a crime to transport in

interstate commerce “any goods, wares, merchandise,

securities or money, of the value of $5,000 or more,

knowing the same to have been stolen, converted or taken

by fraud.” Petitioner contends (Pet. 17-19) that this

statute requires that the transported security must have

been taken directly from the defrauded person and that

4

the evidence in this case showed that he obtained the

check lawfully from the Continental Bank.

This argument, however, runs contrary to this Court's

interpretation of Section 2314 and would defeat the

congressional purpose in enacting the statute. This

purpose was explained in United States v. Sheridan, 329

U.S. 379, 384 (footnote omitted):

Congress had in mind preventing further frauds or

the completion of frauds partially executed. But it

also contemplated coming to the aid of the states in

detecting and punishing criminals whose offenses

are complete under state law, but who utilize the

channels of interstate commerce to make a successful

getaway and thus make the state’s detecting and

punitive processes impotent. This was indeed one of

the most effective ways of preventing further frauds

as well as irrevocable completion of partially

executed ones.

Accordingly, the statute has been construed broadly to

reach “all ways by which an owner is wrongfully deprived

of the use or benefits of the use of his property. * * *

Congress by the use of the broad terms was trying to

make clear that if a person was deprived of his property

*** by false pretense, by fraud, swindling, or by a

conversion by one rightfully in possession, the subsequent

transportation of such goods in interstate commerce was

prohibited as a crime.” Lyda v. United States, 279 F. 2d

461, 464 (C.A. 5). See also United States v. Bottone, 365

F. 2d 389(C.A. 2), certiorari denied, 385 U.S. 974; United

States v. Leggett, 292 F. 2d 423 (C.A. 6), certiorari

denied, 368 U.S. 914.

Petitioner fraudulently induced McShain to endorse a

promissory note, which he then executed with the

Continental Bank. As a direct result of the fraud

5

perpetrated on McShain, and in reliance upon McShain's

endorsement that made him secondarily liable on the

note, the bank issued a cashier’s check, which petitioner

immediately transported in interstate commerce. In light

of this Court’s broad interpretation of Section 2314 in

United States v. Sheridan, supra, the court of appeals

correctly determined that petitioner could not escape

liability under the statute merely by utilizing an innocent

third party bank to convert fraudulently obtained

securities into checks. As Judge Learned Hand observed

in United States v. Walker, 176 F. 2d 564, 566 (C.A. 2),

certiorari denied, 338 U.S. 891, a case in which the

defendant transported travelers’ checks obtained from the

proceeds of a mortgage he had fraudulently induced his

wife to execute:

We are by no means prepared to hold that, whenever

any one fraudulently obtains the property of another,

the proceeds are not also “taken feloniously by

fraud,” into whatever form he may convert them.

That is the view of equity, and it is impossible to find

any reason in the purpose of the statute to distinguish

between the original property and its substitute.

See also United States v. Caci, 401 F. 2d 664, 672-673

(C.A. 2), certiorari denied, 394 U.S. 917.

This construction of the statute conforms with the

congressional purpose and avoids what would otherwise

be a gaping loophole in legislation that was intended to

keep the channels of interstate commerce free from

securities that have been fraudulently obtained.’

?The recent decision in United States v. Poole, 557 F. 2d 531 (C.A.

5), supports this conclusion. There, a defendant in Louisiana

fraudulently induced a Louisiana company to purchase non-existent

machinery, deposited the company’s check into his bank account, and

6

2. Petitioner contends (Pet. 20-21) that the stock

certificates in the Zachary Taylor Corp. that he sent to

McShain were not “counterfeit,” within the meaning of

Section 2314. In support of this contention, petitioner

relies upon the fact that the charter and by-laws of the

corporation allowed him, as a corporate officer, to issue

additional stock (Pet. 8).

The power to issue genuine stock, however, did not

entitle petitioner also to issue counterfeit stock, and the

evidence clearly showed that petitioner did not treat the

certificates as genuine. As the court of appeals pointed

out (Pet. App. 7a), petitioner “purchased another stock

book and simulated the original certificates pledged to

Murray by numbering the new certificates 1, 2, and 3,”

rather than forwarding to McShain the preprinted

certificates 4, 5 and 6 in the corporation's genuine stock

book. Moreover, petitioner backdated the certificates to

January 1970 (the date on the certificates pledged to

Murray) rather than dating them June 1971, when he

claims lawfully to have issued them (App. 810a-815a).?

This conduct plainly fell within the frequently approved

definition of counterfeit, “an imitation of a genuine

then wrote a check for the same amount and sent it to a Texas bank.

The court of appeals held that since there were sufficient surplus

funds in the defendant's account to cover the check he sent to Texas,

without applying the proceeds from the check fraudulently obtained

from the company, the defendant did not violate 18 U.S.C. 2314.

Significantly, the court observed that if the defendant had opened up

a new account with the fraudulently acquired check and had then

transported a check from the new account in interstate commerce, he

could have been convicted of violating Section 2314 because in those

circumstances there would only have been an inconsequential change

in the form of the fraudulently obtained security (557 F. 2d at 535 n.

7).

“App.” refers to the joint appendix in the court of appeals.

a

-

document having a resemblance intended to deceive and

be taken for the original.” United States v. Anderson, 532

F. 2d 1218, 1224 (C.A. 9), certiorari denied, 429 U.S. 839.

See United States v. Morrow, $37 F. 2d 120 (C.A. 5). Nor

is petitioner's position aided by Gilbert v. United States,

370 U.S. 650, where the Court concluded that the word

“forges” in 18 U.S.C. 495 was intended to have its

common law meaning.

Petitioner’s argument that the stock was not counterfeit

because Murray retained no legal interest in the original

certificates is equally unpersuasive. Murray in fact

acquired legal title to the stock under the express terms of

the pledge agreement. That agreement provided that it

covered 100 percent of the issued and outstanding stock

of the Zachary Taylor Corp. (App. 832a, 843a), namely

certificates numbered |, 2 and 3, and petitioner warranted

that he would not issue any additional shares of stock in

the corporation without Murray’s written consent (App.

846a). The certificates were placed in a safe deposit box,

where they remained until September 1972 (Tr. 212).

Petitioner did not regain possession of the certificates or

obtain an oral or written release from Murray before

transferring simulated stock to McShain. Therefore, even

though petitioner was an officer of the corporation, he

had no authority to issue new stock by virtue of the

pledge agreement.‘

Finally, petitioner's alternative assertion that Murray

never received legal title to the certificates because they

were held by an escrow agent is also without merit. The

parties agreed that the pledge would be governed by the

‘Indeed, petitioner testified that he operated under the belief that

he could not issue new stock in the corporation unless Murray agreed

to release the documents (Tr. 1922-1923).

8

Uniform Commercial Code of Virginia (App. 844a).

Sections 8.9-304 and 8.9-305 of the Virginia U.C.C. (1965)

provide that a fully perfected security interest in

instruments attaches when the instruments are “held by a

bailee, [and] the secured party is deemed to have

possession from the time the bailee receives notification of

the secured party’s interest.” Murray’s interest in the stock

thus attached at the time of the execution of the pledge

agreement, and that interest was perfected when Murray’s

agent received the stock, notwithstanding the failure to

deliver the certificates to Murray. Petitioner therefore

possessed no legal authority under the agreement to

pledge the stock to McShain.°

3. Contrary to petitioner’s assertions (Pet. 3-7, 10-14),

his indictment and conviction were not obtained through

violations of Internal Revenue Service regulations or

abuses of the grand jury process.

a. Petitioner’s contention that I.R.S. regulations were

violated, a contention that the government has always

vigorously contested, is predicated solely upon an “offer

of proof” (Pet. App. E) in the district court, in which

petitioner alleged that the government used the Civil

Division of the I.R.S. as “a cloak for a criminal

investigation” (Pet. 10).

Petitioner had previously been convicted of violating 18

U.S.C. 2314, 1341 and 1343, but that conviction was

reversed. United States v. Pomponio, 517 F. 2d 460 (C.A.

Petitioner urges that the decision below conflicts with /n re Dolly

Madison Industries, Inc., 351 F. Supp. 1038 (E.D. Pa.), affirmed

without opinion, 480 F. 2d 917 (C.A. 3). In Dolly Madison, however,

an escrow agreement specifically provided for redelivery of the stock

to the seller in the event of a default by the buyer. Here, the pledge

agreement was unequivocal, and Murray was vested with title from

the moment his agent took possession of the stock. See Appeal of

Copeland, 531 F. 2d 1195, 1201-1202 (C.A. 3).

9

4). At the former trial, petitioner’s co-defendant made a

pre-trial motion to dismiss the indictment, asserting that

the government had violated I.R.S. regulations by

conducting a criminal investigation under the guise of a

civil tax audit. The trial judge (Judge Lewis) held an

evidentiary hearing on the claim, at which the defendants

presented testimony from I.R.S. agents who had been

directly involved in the investigation, and denied the

motion. Petitioner's counsel joined in the examination of

the agents. On retrial, petitioner again raised the I.R.S.

issue in a pre-trial motion to dismiss the indictment,

which the government opposed. Judge Bryan, who

presided over the second trial, declined to hear additional

evidence on the motion, incorporated the evidence

received in the prior hearing, and adopted Judge Lewis's

ruling. Petitioner then filed his offer of proof (Pet. App.

E) and renewed his motion to dismiss the indictment. The

court adhered to its ruling and denied the motion.

The district court acted well within its discretion in

incorporating the record from the prior hearing and the

ruling of Judge Lewis on the identical legal issue between

the same parties and in refusing to hold a further

evidentiary hearing based on a_ totally conclusory

offer of proof. Cf. United States v. White, 514 F. 2d 205,

207-208 (C.A. D.C.); United States v. Cohen, 489 F. 2d

945, 952 (C.A. 2). Indeed, petitioner has not mentioned.

much less contested, any of the evidence or testimony that

was received at the former hearing. Morever, petitioner's

*Petitioner argues that the district court should not have denied his

motion on the basis of the former evidentiary proceeding because the

Original motion to dismiss the indictment had been made by a co-

defendant at the former trial. It is clear from the transcript of that

hearing (App. 64a-105a), however, that although the motion had been

made by one co-defendant, each of the defendants joined in the

motion.

10

offer of proof consisted of nothing more than an

unsubstantiated narrative, unaccompanied by affidavits or

other evidentiary materials, and hardly supports his

present claim that the evidence at the former hearing was

“significantly more limited than the offer of proof herein”

(Pet. 11).

b. Petitioner contends (Pet. 11-12) that the grand jury’s

function was abused by governmental misconduct in the

issuance of subpoenas for petitioner’s financial records.

Again relying upon his conclusory “offer of proof,”

petitioner asserts that the government permitted agents

from the I.R.S. Intelligence Division to have access to

documents subpoenaed by the grand jury. Specifically,

although in May 1972 the government obtained an order

from the district court, pursuant to Rule 6(e), Fed. R.

Crim. P., to allow I.R.S. agents to review these

documents, petitioner claims that the agents had been

given access to the materials for four months prior to the

issuance of the order.

Petitioner’s allegations were the subject of an

evidentiary hearing in his former trial, where I.R.S. agents

fully explained their participation in the criminal

investigation. Based on this testimony, the trial judge

rejected petitioner’s claims. This essentially factual issue

does not warrant further review. We note, however, that

utilization of the services of expert government personnel

to assist the grand jury in its inquiries has repeatedly been

recognized as legitimate when dealing with allegations

involving corporate or financial crimes, even in the

absence of express judicial authorization. See, e.g., Coson

v. United States, 533 F. 2d 1119, 1120-1121 (C.A. 9);

United States v. Evans, 526 F. 2d 701, 707 (C.A. 5),

certiorari denied, 429 U.S. 818.’

‘This rule has now been codified. See Fed. R. Crim. P.

O&eX2KXAXKii). effective October |, 1977.

I]

c. Petitioner contends (Pet. 12) that the government

misused the grand juries in three cities within the Eastern

District of Virginia and in New York City to subpoena

documents from him in Alexandria, Virginia.2 However,

the United States Attorney was required to use three

grand juries within the Eastern District to investigate

petitioner's criminal activities because of the limited time

that a grand jury was allowed to sit in any one division of

the district. At the time of the events at issue in this case,

Local Rule 12 of the Rules of the United States District

Court for the Eastern District of Virginia provided that a

grand jury would sit beginning one Monday of each

month, rotating so as to sit in each of the four divisions of

the district three times a year. Since a grand jury

empanelled in one division has territorial jurisdiction over

offenses that may have taken place in another division of

the same district, the government’s practice was to present

its cases to the grand jury wherever it happened to be

sitting that particular month, regardless of the division in

which the crime allegedly occurred. See Salinger v. Loisel,

265 U.S. 224; United States v. Thompson, 251 U.S. 407.

Petitioner cites no authority, and we know of none, that

supports bis contention that the government is guilty of

miscond it uses several grand juries within a district

to gather evidence concerning crimes that occurred in one

division of the district.?

‘In July 1972, a special grand jury in the Alexandria division of the

Eastern District of Virginia was empanelled to investigate petitioner

and his business practices. We presume that petitioner's challenge is

limited to the government's acquisition of evidence from him by

subpoenas duces tecum issued by grand juries sitting in various

other divisions of the Eastern District of Virginia prior to the em-

panelling of the Alexandria special grand jury.

%United States v. Doe, 455 F. 2d 1270 (C.A. 1), involved an

allegation that a grand jury in one district was being used to obtain

12

4. Petitioner argues (Pet. 13-14) that he was deprived

of his right to a speedy trial under the Sixth Amendment

and the Speedy Trial Act of 1974, 18 U.S.C. (Supp. V)

3161(e), which provides in pertinent part:

If the defendant is to be tried again following an

appeal * * *, the trial shall commence within sixty

days from the date the action occasioning the retrial

becomes final, except that the court retrying the case

may extend the period for retrial not to exceed one

hundred and eighty days * * * if unavailability of

witnesses or other factors resulting from passage of

time shall make trial within sixty days impractical.

Although petitioner’s first conviction under Section

2314 was reversed and the case was remanded for a new

trial (517 F. 2d 460), he nonetheless filed a petition for a

writ of certiorari, claiming that the court of appeals

should have ordered entry of a judgment of acquittal or

dismissal of the indictment. The petition was denied on

December 8, 1975. 423 U.S. 1015. Petitioner was re-

indicted on January 29, 1976. He then sought anu

received a continuance to prepare for trial (Pet. 14). On

April 9, 1976, the district court dismissed the indictment,

finding that it had been returned beyond the date of

expiration of the grand jury’s term. The government

presented its case to the next available grand jury in the

district, which sat in Norfolk on April 12, 1976.!°

Petitioner was indicted by the grand jury on April 12, and

his four-week trial began on May 12, 1976.

evidence for a fria/ in another district. Jn re Grand Jury Investigation

of Banana Industry, 214 F. Supp. 856 (D. Md.), involved the

question whether, in the absence of a court order, evidence gathered

by a grand jury in one district could be transmitted to a grand jury in

another district. These cases thus have no applicability to a situation

where grand juries within the same district are investigating the

commission of a crime within one division of that district.

'0Petitioner complains (Pet. 12-13) that the government's presenta-

tion of its case to the Norfolk grand jury in three or four hours

13

Petitioner did not raise a speedy trial claim in the court

of appeals and therefore is precluded from raising it in

this Court. Lawn v. United States, 355 U.S. 339, 362-363,

n. 16. In any event, not only does 18 U.S.C. (Supp. V)

3163(c) provide that the sanction of dismissal of the

indictment for violations of the Speedy Trial Act does not

become effective until July 1, 1979 (see United States v.

Amendola, 558 F. 2d 1043, 1044 (C.A. 2)), but also

dismissal would be wholly inappropriate here. Petitioner

added to the delay of retrial by obtaining a continuance to

prepare for trial (see 18 U.S.C. (Supp. V) 3161(h)(8)(A))

and the government acted expeditiously in securing a

second indictment from the next available grand jury.

Moreover, petitioner has failed to allege, much less to

prove, that he suffered any prejudice as a result of the

government's minor delay in securing a superseding

indictment. Barker v. Wingo, 407 U.S. 514, 532.

5. Finally, the district court’s instructions to the jury

were correct.

a. Petitioner contends (Pet. 15) that the district court

impermissibly reduced the government's burden of proof

by instructing the jury that it could “define reasonable

doubt no better than to say it means a doubt that is based

on reason and must be _ substantial rather than

strongly suggests the pro forma character of the proceeding.

However, since the evidence establishing petitioner's violations of

Section 2314 had previously been presented several times to other

grand juries, it is quite understandable that the Norfolk proceeding

was conducted expeditiously. In any event, the presumption of

regularity of federal grand jury proceedings cannot be overcome on

the basis of an unsubstantiated allegation such as petitioner's. United

States v. Johnson, 319 U.S. 503, 513.

14

speculative.”!' When considered in the context of the

entire charge (United States v. Park, 421 U.S. 658, 674),

however, the instruction “correctly conveyed the concept

of reasonable doubt to the jury” Holland v. United

States, 348 U.S. 121, 140. The context makes clear that

the district court used the word “substantial” to mean

“real” or “nonspeculative” rather than “of great

magnitude,” as petitioner's argument implies. See Coffin

v. United States, 156 U.S. 432, 453.

A trial judge has broad discretion to assist the jury in

understanding the terms used in the charge, and he must

be given appropriate latitude in his choice of the best way

to do so. Holland v. United States, supra, 348 U.S. at

139-140. Although, as petitioner notes, various courts of

appeals have cautioned triai judges to avoid the phrase

''The court's charge stated in pertinent part (App. 786a-787a):

You are told that whenever a defendant comes into court

charged with a crime, he is presumed to be innocent.

This presumption is an abiding one. It remains with that

defendant throughout the trial, unless and until he is proven

guilty of the crime charged by credible evidence beyond a

reasonable doubt.

The burden of proving a defendant guilty beyond a reasonable

doubt rests upon the Government.

This burden never shifts throughout the trial.

The law does not require a defendant to prove his innocence

or to produce any evidence. If the Government fails to prove a

defendant guilty beyond a reasonable doubt, then the jury must

acquit him.

1 can define reasonable doubt no better than to say that it

means a doubt that is based on reason and must be substantial

rather than speculative.

It must be sufficient to cause a reasonably prudent person to

hesitate to act in the face of it in the more important affairs of

his life.

15 al

“substantial doubt,” they have refused to reverse the

conviction where, as here, the charge did not unduly

emphasize the word “substantial” and, when viewed as a

whole, the instruction on “reasonable doubt” was not

subject to misinterpretation. See, e.g., United States v.

Crouch, 528 F. 2d 625 (C.A. 7); United States v.

Muckenstrum, 515 F. 2d 568 (C.A. 5), certiorari denied,

423 U.S. 1032; United States v. Fallen, 498 F. 2d 172

(C.A. 8). Moreover, to the extent that there is a conflict

among various panels of the Seventh Circuit on this issue,

the conflict should be resolved by that court. See

Wisniewski v. United States, 353 U.S. 901, 902.

b. Petitioner claims (Pet. 16-17) that the district court's

charge amounted to a “virtual instruction to the jury that

petitioner had caused the transfer of stock in interstate

commerce.”

At the inception of the charge, the trial judge told the

jurors that they were the sole judges of the facts (App.

772a). Before instructing on the elements of an offense

under 18 U.S.C. 2314, the judge then stated (App. 791a),

“I'd like to comment briefly on the evidence, and because

my comment is based on my recollection of the evidence,

and since it is your recollection that counts and is

controlling, you are free to disregard the comment in its

entirety.” The judge proceeded to tell the jury that the

government was required to prove the element of

interstate trans) ortation in both counts of the indictment

beyond a reasonable doubt and to observe that the weight

of the evidence indicated that there had been actual

physical movement of the stock certificates and cashier's

check between Virginia and Pennsylvania and that that

movement had been contemplated by petitioner (App.

792a). Petitioner argues that these comments were

improper because the government failed to establish by

“direct evidence” a nexus between him and the transporta-

tion of the stock certificates.

16

The longstanding rule in the federal courts is that a trial

judge may comment on the evidence so long as he does so

fairly and he clearly states that the jury is the ultimate

fact-finder and should rely upon its own memory and

understanding of the facts. Quercia v. United States, 289

U.S. 466, 469. Cf. Horning v. District of Columbia, 254

U.S. 135, 138. The judge’s comments in this case were not

erroneous, because he charged the jury on each element of

the offense and reminded the jury repeatedly that each

element had to be proven beyond a reasonable doubt.

Moreover, when the judge gave his view that the interstate

movement of the securities had been contemplated by

petitioner, he qualified his remarks by stating that the jury

was bound by its own recollection of the evidence and

that it was free to disregard his comment in its entirety.

Finally, and most important, petitioner’s claim of

prejudice is illusory, since he did not contest the

movement of the securities or cashier’s check in interstate

commerce.'? Petitioner’s theory throughout trial was not

that the McShain transactions alleged by the government

did not occur, or even that he was unaware of them, but

that they were completely legal. Hence, the judge's

comment on the undisputed evidence was a proper

exercise of his discretion to focus the issues for the jury.

'23See United States v. Natale, 526 F. 2d 1160 (C.A. 2), certiorari

denied, 425 U.S. 950, where the trial judge remarked in his charge to

the jury that he did not “think” that there was any dispute over two

elements of the offense. Although the defendant argued that this was

in effect a directed verdict for the government on two elements of the

offense, the court of appeals disagreed, noting that the judge had

properly charged each element of the offense to the jury and that his

comments on the evidence were not unfair because there had been no

dispute over those elements at trial. 526 F. 2d at 1167. Petitioner

argues that the proof in this case was disputed because there was no

“direct evidence” that he personally transported the securities and

check in interstate commerce. However, that is not a requirement of

Section 2314. Pereira v. United States, 347 U.S. 1, 8.

17

CONCLUSION

The petition for a writ of certiorari should be denied.

‘Respectfully submitted.

Wave H. McCree Jr.,

Solicitor General.

BENJAMIN R. CIVILETTI,

Assistant Attorney General.

SIDNEY M. GLAZER,

JOHN VOORHEES,

Attorneys.

FEBRUARY 1978.