# Petition — Castor v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_2630%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1978 - **Citation:** 434 U.S. 1010 ## Text IN THE Supreme Court of the United States OcToBER TERM, 1977 No. @7Z= 500 ‘ Henry Y. Dein, Petitioner, vs. UNITED StTaTEs OF AMERICA, CHarLes G. Castor, WILLIAM T. ROBINETTE AND JAMES A. JAMES, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT BERNARD FENSTERWALD, JR. FENSTERWALD & ASSOCIATES Suite 203 2101 L Street, N.W. Washington, D.C. 20037 Telephone: (202) 785-1636 Counsel of Record for Petitioner. Passes or Brnon 8S. Apams Punting, Inc., Wasuineron, D. C. Page ee et te eda teaeeak cane 1 p ESE, A OE a OO eT Ee a 2 QuESTIONS PRESENTED .............. igicamheon ohinns 2 I i ee od ad eh ben enw 3 I og kdb k5 anne de 6akedtes bo dhe 3 Reasons For GRANTING THE WRIT ..............--00-: 7 eee undabaaes 18 APPENDIX: NE Ge I ncn nc cc emenncnsectessees la I BIS TIED on ccccccccccecsceviese 17a Opinion of Court of Appeals ................... 26a Judgment of Court of Appeals ................. 39a Order Denying Rehearing ..................005: 40a Order Granting Extension of Time ............. 4la CITATIONS Cases: Bowtie v. Columbia, 378 U.S. 347 (1964) ....... 13, 15, 16, 17 ae ] M General Construction Co., 269 U.S. 385 : i aac dl eal A i le nth a he on Oana 7 Douglas v. Buder, 4T2 U.S. 430 (1973) ............... 17 Gooding v. Wilson, 405 U.S. 518 (1972) .............. 18 Healy v. Ratta, 292 U.S. 263 (1934) ................. 7 Indiana Alcoholic Bev e Commission v. Baker, 153 Ind. App. 133 ; 286 N.E. 2d 174 (1972) ........... 5 Kann v. Unated States, 323 U.S. 88 (1944) ........... 8 Kline v. Burke Constr. Co., 260 U.S. 226, (1922) ...... 7 Laneetta v. New Jersey, 306 U.S. 451 (1939) .......... 17 ii Table of Citations Continued Page Lewis v. New Orleans, 415 U.S. 130 (1974) .........-- 18 Luros v. Hanson, 382 U.S. 956 (1965) ..........+..-- 11 Marks v. United States, —— U.S. ——, 97 8.Ct. 990 COREE cnccackocdobusebnsabadetareedseseccecccce 16 Memoirs v. Massachusetts, 383 U.S. 413 (1966) ....... 17 Miller v. California, 413 U.S. 15 (1973) ............-- 17 NAACP v. Button, 371 U.S. 415 (1963) .............. 18 Parr vy. United States, 363 U.S. 370 (1960) ........... 8 Pierce v. United States, 314 U.S. 306 (1941) .......... 14 Rabe v. Washington, 405 U.S. 313 (1972) ........... 14, 17 State of Indiana ex rel. Miller v. Indiana Alcoholic Bev- erage Commission, (Cause No. 8772-231, Marion Cty. Sup. Ct., August 25, 1972) ...............-- 6 United States v. Birrell, 242 F. Supp. 191 (S.D.N.Y. DEE acccddaudeuachaaweis teh teks diehetees States Code, Sec- CHARLES G. Castor, HENRY Y. DEIN tions 1341, 371 and WILLIAM T. RoBINETTE AND JAMES 2 A. JAMES. 7 The December 1974 Grand Jury charges: 1. During the time period covered by this indictment, the Indiana Alcoholic Beverage Commission was composed of four (4) commissioners appointed by the Governor of Indiana. This commission was responsible for regulating various aspects of the liquor business within the State of Indiana and was vested with the discretionary authority to issue, deny, suspend, revoke or to deny renewal of all liquor permits authorized by Title 7 of Burns Indiana Statutes. All applications for new permits or for changes in ownership or location were filed with the Alco- holic Beverage Commission and sent by that commission to the appropriate local board for investigation. 2. During the time period covered by this indictment, the Marion County Local Board was composed of four members and was charged with investigating the fitness of those persons applying for liquor permits within Marion County, Indiana and the propriety of issuing the requested permit to the applicant at the named premises. After conducting its investigation con- cerning these matters, the Marion County Local Board would forward its recommendation to the Alcoholic Beverage Commis- sion, and that commission would grant or refuse the applica- tion accordingly, as it deemed the public interest would best be served. 2a 3. During 1972, forty-five (45) additional package liquor store permits became available in Indianapolis, Indiana. During late 1971 and 1972, approximately one hundred and twenty (120) applications were filed with the Alcoholic Beverage Commission by persons or businesses seeking to obtain one or more of the newly available forty-five permits. 4. Beginning in or about October, 1971, and continuing thereafter through the date of the return of this indictment, in the Southern District of Indiana and elsewhere, Charles G. Castor, Henry Y. Dein, William T. Robinette and James A. James, defendants herein, devised and intended to devise a scheme and artifice to defraud the Indiana Alcoholic Beverage Commission, the Marion County Local Board, and those per- sons, unassociated with the scheme, who applied for the newly available liquor permits, and to obtain from the Alcoholic Beverage Commission a number of the newly available pack- age liquor store permits by means of false and fraudulent pre- tenses, representations and promises, the defendants well know- ing that the pretenses, representations and promises would be and were false when made, and which scheme and artifice to defraud was, in substance, as follows: A. It was a part of the scheme and artifice to defraud that the defendants, in order to gain control of a group of the new package liquor store permits, and in order to conceal the de- fendants’ economic interest in the applications from the Alco- holic Beverage Commission, the Marion County Local Board and the applicants unassociated with the scheme, would and did, by means of documents containing false and fraudulent pretenses, representations and promises, induce the Marion County Local Board and the Alcoholic Beverage Commission to issue package liquor store permits to persons who did not intend to operate package liquor stores; and, upon the issuance of the licenses, they would and did cause such persons to trans- fer the liccnses to persons and entities of the defendants’ choos- ing. In order to accomplish this object, the following actions were taken: , 3a (1) The defendants caused the following - persons: Peter Gordon Dandridge, Howard Kopp, Patricia Mc- Queen, Lawrence Weaver, Charles Pechette, David Neal Lasiter, Terry O. DeMilt, George Rowlas, Margaurite Austin, R. Michael Kelley, Jean Smith and R. Travis Miller, to sign applications requesting the issuance of pack- age liquor store permits to the named applicants. (2) The defendants caused the above-mentioned ap- plications and other documents required by the Alcoholic Beverage Commission to be filed with the Alcoholic Bev- erage Commission. As the defendants then and there well knew and intended, these applications and other docu- ments, representations and promises: (a) That the named applicant intended to run and manage a package liquor store at the named premises. (b) That the permit which the applicant sought would be for his/her sole private use. (c) That no other person, company or entity of any kind would have any control or interest, directly or indirectly in the package liquor store business which was to be operated. B. It was a further part of the scheme and artifice to de- fraud that the defendant Charles Castor would and did enter into an agreement with John Dillon and Donald Hardamon whereby it was agreed that a permit which previously had been applied for by Donald Hardamon on his own behalf, once issued to him, would be held by him for later use by Charles Castor and the other defendants. The application and other documents filed by Hardamon were, at the time such application was con- sidered by the Marion County Local Board and the Alcoholic Beverage Commission, false in the same respects as alleged in paragraphs 4.A(2)(a)-4.A(2)(c). C. It was a further part of the scheme and artifice to defraud that the defendants, while concealing their own economic inter- 4a est in such permits, would and did, by the knowing use of appli- cations and related documents containing false and fraudulent pretenses, representations and promises, induce the Marion County Local Board and the Alcoholic Beverage Commission to approve of changes in the locations of such permits to loca- tions preferred by the defendants. In order to accomplish this object the defendants took the following actions: (1) They caused documents to be filed with the Alco- holic Beverage Commission which represented that the following persons were applying for changes in the loca- tion of the permits which previously had been issued to them: John Daugherty, Patricia McQueen, Lawrence Wea- ver, David Lasiter, Terry O. DeMilt, George Rowlas, Margaurite Austin, R. Michael Kelley and Jean Smith. As the defendants then and there well knew, such documents contained the following false and fraudulent pretenses, rep- resentations and promises: (a) That the above named persons intended to run and manage a package liquor store at the named premises. (b) That the above named persons had actually and legally entered into a leasehold agreement for the named premises. (2) They prepared or caused to be prepared leases which purported to represent agreements between the above named persons as lessees and the named lessors, to rent the named premises, when, in fact, such persons had not entered into valid lease arrangements. D. It was a further part of the scheme and artifice to de- fraud the’, after the Alcoholic Beverage Commission had issued package liquor store permits to those persons named in para- graph 4.A(1), above, the defendants, for the purpose of con- cealing their own economic interest in the permits and in order to facilitate the further objectives of the scheme, would and 5a did by means of documents containing false and fraudulent pre- tenses, representations and promises, induce the Marion County Local Board and the Alcoholic Beverage Commission to trans- fer the ownership of eleven (11) of those permits to corpora- tions which were under the control of the defendants. In order to accomplish these objectives the defendants took the following actions: (1) They caused the formation of eleven separate corporations, bearing the following names: 96th and Keystone Corp. South Street and Virginia Corp. Kentucky & Rybolt Corp. Stop 11 & Madison Corp. West 10th Corp. 10th and Mitthoeffer Corp. 71st & Indiana 37 Corp. 62nd & Allisonville Corp. 21st & Franklin Corp. 86th & Ditch Corp. 56th & Georgetown Corp.; and they caused to be named as the president and director of each of those corporations the original applicants or their immediate transferees. The persons so named, except for the person named as president of the 56th and George- town Corp., had no real interest in the corporations and acted solely in the interest of and at the direction of the defendants. (2) By means of applications and other related docu- ments filed with the Alcoholic Beverage Commission, which applications and related documents contained false and fraudulent pretenses, representations and promises, they induced the Alcoholic Beverage Commission and the Marion County Local Board to approve of the transfer to an intermediary and/or to the above named corpora- tions of those permits which had previously been issued to the following persons: Peter Gordon Dandridge, Howard 6a ) Kopp, Patricia McQueen, Lawrence Weaver, Charles Pech- ette, David Neal Lasiter, Terry O. DeMilt, George Row- las, Margaurite Austin, R. Michael Kelley and Jean Smith. As the defendants then and there well knew and intended, the above mentioned applications and related documents contained the following false and fraudulent pretenses, representations and promises: (a) That John Daugherty had purchased a permit and other property from Peter Gordon Dandridge. (b) That the South Strezt and Virginia Corpora- tion, Joseph Krauter, President, had purchased a per- mit and other property from Howard Kopp. (c) That the 62nd & Allisonville Corporation, R. Travis Miller, President, had purchased a permit and other property from Margaurite Austin. (d) That the Stop 11 and Madison Corporation had purchased a permit and other property from Law- rence Weaver. (e) That the West 10th Corporation had purchased a permit and other property from David Neal Lasiter. (f) That the 10th and Mitthoeffer Corporation had purchased a permit and other property from Terry O. DeMilt. (g) That the 71st & Indiana 37 Corporation had purchased a permit and other property from George Rowlas. (h) That the 21st & Franklin Corporation had purchased a permit and other property from R. Michael Kelley. (i) That the 86th & Ditch Corporation had pur- chased a permit and other property from Jean Smith. (j) That the following named persons had paid $1000 to the treasurer of the following corporations for stock issued to those persons: 7a John Daugherty—96th & Keystone Corp. Joseph Krauter—South Street & Virginia Corp. Patricia McQueen—Kentucky & Rybolt Corp. Lawrence Weaver—Stop 11 & Madison Corp. David Neal Lasiter—West 10th Corp. Terry O. DeMilt—71st & Indiana 37 Corp. R. Travis Miller-—62nd & Allisonville Corp. R. Michael Kelley—21st & Franklin Corp. Jean Smith—86th & Ditch Corp. (k) That no person, company or entity of any kind other than the incorporators and shareholders would have any interest, directly or indirectly, in the proposed package liquor store business. E. It was a further part of the scheme and artifice to defraud that, after the ownership of ten (10) of the permits had been transferred to the corporations named in paragraph 4.D.(1) above, the defendants would and did cause to be filed, with the Alcoholic Beverage Commission, applications for major stock transfers, requesting that the stock of each of those corporations be transferred to the defendant James A. James. F. It was a further part of the scheme and artifice to defraud that the defendants, by causing to be filed the applica- tions referred to in paragraph E above, would and did represent that the purchases of the stock issues by James A. James ere “arms length” purchases and that they would and did thereby conceal the existence of the scheme and artifice to defraud and induce the Marion County Local Board and the Alcoholic Beverage Commission to transfer the legal ownership of the permits to defendant James A. James. 5. That on or about September 8, 1972, in the Southern District of Indiana, the defendants, for the purpose of execut- ing the aforesaid scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter a post card from the Indiana Alcoholic Bever- 8a age Commission, Indianapolis, Indiana, addressed to George Rowlas, 5839 North Washington Blvd., Indianapolis, Indiana, containing the date of a proposed hearing to be held before the Marion County Local Board, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count Il 1. That Grand Jury realleges all of the allegations con- tained in paragraphs 1 through 4 of Count I of this indictment, and further charges: 2. On or about December 6, 1972, in the Southern District of Indiana, the defendants for the purpose of executing the aforesaid scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, addressed to George Rowlas, 5839 North Washington, Blvd., Indianapolis, Indiana, containing notifica- tion of the fact that the Indiana Alcoholic Beverage Commis- sion had voted to issue a permit to Mr. Rowlas on November 20, 1972, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count Ill 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count I of this indictment, and further charges: 2. On or about December 6, 1972, in the Southern District of Indiana, the defendants for the purpose of executing the aforesaid scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter, a letter from the Alcoholic Beverage Commission, 9a é Indianapolis, Indiana, addressed to Mrs. Jean Smith, 711i Ter- race Avenue, Indianapolis, Indiana, containing notification of the fact that the Indiana Alcoholic Beverage Commission had voted to issue a permit to Mrs. Smith on November 20, 1972, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count 1V 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count I of this indictment, and further charges: 2. On or about December 6, 1972, in the Southern District of Indiana, the defendants, for the purpose of executing the aforesaid scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, addressed to Terry O. DeMilt, 5932 Winthrop Avenue, Indianapolis, Indiana, containing notification of the fact that the Indiana Alcoholic Beverage Commission had voted to issue a permit to Mr. DeMilt on November 20, 1972, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count V 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count I of this indictment, and further charges: 2. On or about December 6, 1972, in the Southern District of Indiana, the defendants, for the purpose of executing the . aforesaid scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for 10a mail matter, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, addressed to Lawrence E. Weaver, 2639 N. Cumberland Road, Indianapolis, Indiana, containing noti- fication of the fact that the Indiana Alcoholic Beverage Com- mission had voted to issue a permit to Mr. Weaver on Novem- ber 20, 1972, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count VI 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count I of this indictment, and further charges: 2. On or about December 5, 1972, in the Southern District of Indiana, the defendants, for the purpose of executing the aforesaid scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, addressed to Patricia McQueen, 3244 Patton Drive, Indianapolis, Indiana, containing notification of the fact that the Indiana Alcoholic Beverage Commission had voted to issue a permit to Mrs. McQueen on November 20, 1972, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Section 1341. Count VII 1. The Grand Jury realleges all of the allegations con- tained in paragraphs 1 through 4 of Count I of this indictment and further charges: 2. On or about September 7, 1972, in the Southern District of Indiana, the defendants, for the purpose of executing the aforesaid scheme and artifice to defraud, and attempting so to . lla do, did knowingly cause to be delivered by the Postal Service of the United States, according to directions thereon, a letter from the Alcoholic Beverage Commission, Indianapolis, Indi- ana, addressed to F. Pen Cosby, 735 Bankers Trust Building, Indianapolis, Indiana, containing a list of the identities of those persons whose applications were to be processed by the Alcc- holic Beverage Commission and the Marion County Local Board, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count VIIl 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count I of this indictment and further charges: 2. On or about December 8, 1972, in the Southern District of Indiana, the defendants, for the purpose of executing the aforesaid scheme and artifice to defraud, and attempting so to do, did knowingly cause to be delivered by the Postal Service of the United States, according to directions thereon, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, ad- dressed to F. Pen Cosby, 735 Bankers Trust Building, Indianapo- lis, Indiana, containing a statement of the identities of those persons to whom the Alcoholic Beverage Commission had issued package liquor store permits, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count 1X 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count I of this indictment, and ‘further charges: . 12a 2. On or about March 8, 1973, in the Southern District of Indiana, the defendants, for the purpose of executing the afore- said scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, addressed to George Rowlas, 5839 North Washington Blvd., Indianapolis, Indiana, containing a statement that Rowlas’ application had not been completed because of certain missing items, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count X 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count I of this indictment and further charges: 2. On or about June 7, 1973, in the Southern District of Indiana, the defendants for the purpose of executing the afore- said scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, addressed to Joseph Krauter, Jr., 4444 Sharon Lane, Indianapolis, Indiana, containing a statement that the application of the South Street and Virginia Corporation had not been com- pleted because of certain missing items, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count XI 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count I of this indictment, and further charges: 138 2. On or about June 7, 1973, in the Southern District of Indiana, the defendants for the purpose of executing the afore- said scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, addressed to R. Travis Miller, 549 East 58th Street, Indianapolis, Indiana, containing a statement that the application of the 62nd and Allisonville Corporation had not been com- pleted because of certain missing items, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count XII 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count I of this indictment, and further charges: 2. On or about September 18, 1972, in the Southern District of Indiana, the defendants for the purpose of executing the afore- said scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, addressed to Mr. James Griffin, 2455 Martindale, Indianapolis, Indiana, containing a letter from Mark Y. Brown, Executive Secretary of the Alcoholic Beverage Commission, to James Griffin concerning Mr. Griffin’s intention to lease certain property to Peter Gordon Dandridge, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count XIII 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count I of -his indictment, and further charges: 14a; 2. On or about March 7, 1973, in the Southern District of Indiana, the defendants for the purpose @f executing the afore- said scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, addressed to David N. Lasiter, 7610 Singleton Drive, Indianapolis, Indiana, containing a statement that Lasiter’s appli- cation had not been completed because of certain missing items, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2, Count XIV 1. The Grand Jury realleges all of the allegations contained in paragraphs 1 through 4 of Count 1 of this indictment, and further charges: 2. On or about October 17, 1973, in the Southern District of Indiana, the defendants for the purpose of executing the afore- said scheme and artifice to defraud, and attempting so to do, did cause to be placed in an authorized depository for mail matter, a letter from the Alcoholic Beverage Commission, Indianapolis, Indiana, addressed to Charles Pechette, 8949 Wickham Road, Indianapolis, Indiana, containing a statement that Pechette’s application had not been completed because of certain missing items, to be sent and delivered by the Postal Service of the United States. In violation of Title 18, United States Code, Sections 1341 and 2. Count XV 1. From in or about October, 1971, and continuing there- after through the date of the return of this indictment, in the Southern District of Indiana and elsewhere, Charles G. Castor, Henry Y. Dein, William Theodore Robinette, and James A. James, defendants herein, did knowingly and wilfully combine, . 15a conspire and confederate and agree together and with each other and with divers other persons whose names are unknown to the Grand Jury, to commit an offense against the United States, that is, Section 1341 of Title 18, United States Code, to knowingly and wilfully cause the United States mails to be used in further- ance of a scheme and artifice to defraud the Indiana Alcoholic Beverage Commission, the Marion County, Indiana Local Board and certain persons who applied for new package liquor store permits in Marion County, Indiana, during 1971 and 1972. 2. This scheme and artifice is fully described in paragraphs 1 through 4 of Count I of this indictment and is incorporated herein by reference as if set out in full; the objects of the con- spiracy being violations of Title 18, United States Code, Section 1341. 3. In furtherance of the conspiracy and in order to effect the objects thereof, the defendants did and caused to be done the acts set forth in Counts I-XIV of this indictment on the dates and at the places and in the manner set forth, all of which are alleged herein as separate overt acts. 4. In addition to the foregoing, in furtherance of the con- spiracy and in order to effect the objects thereof, the defendants committed the following additional overt acts: 1. In or about the second week of October, 1972, the defendant Charles G. Castor had a telephonic conversation with John J. Dillon in which it was agreed that a package liquor store permit for which Donald Hardamon had applied would, once issued, be held by Hardamon for the benefit of Castor and others. 2. On or about January 10, 1973, defendant William Theodore Robinette gave a check drawn on the Bulen and Castor office account in the amount of $455 to Donald Hardamon, as reimbursement for money expended by Hardamon in applying to the Alcoholic Beverage Commis- sion for a package liquor store permit. 3. In or about December, 1972, defendants Charles G. Castor and James A. James had a conversation in Indianap- 16a olis, Indiana, at The Indiana National Bank with Lawrence A. O'Connor, Jr., Harold Eugene Moon, and William F. Fox, wherein Castor and James sought to obtain financing for the operation of ten (10) package liquor stores in Indianapolis, Indiana. 4. In or about February, 1972, defendant William Theodore Robinette had a conversation with F. Pen Cosby during which Robinette retained Cosby to represent a num- ber of persons who were applying for package liquor store permits in Marion County, Indiana. 5. On or about September 20, 1972, William Theodore Robinette furnished a check to F. Pen Cosby in the amount of $455, drawn on the Bulen and Castor office account, in payment for the application fee of Peter Gordon Dandridge. 6. In or about May, 1973, defendant Henry Y. Dein telephonically contacted Joseph Krauter, Jr. and requested that Krauter assist him in transferring a package liquor store permit. 7. In or about January, 1973, defendant Henry Y. Dein caused Johr avid Daugherty to sign documents relating to the tran. .« of a package liquor store permit from Peter Gordon Dandridge to Daugherty. 8. In or about November, 1971, defendant James A. James had a conversation with Jean Smith and George Rowlas during which James asked Smith and Rowlas to apply for package liquor store permits, with the understand- ing that the permits would be for James’ use. All in violation of Title 18, United States Code, Section 371. A True BILL /s/ LAWRENCE WAYNE CRISPEN Foreman /s/ JAMES B. YOUNG United States Attorney 17a UNITED STATES DisTRICT COURT Southern District of Indiana Indianapolis Division. UNITED STATES OF AMERICA, vs. Cuares G. Castor, Henry Y. DEIN, WILLIAM T. RoBINETTE, JAMES A. | JAMES. No. IP 76-79-CR. MEMORANDUM OF DECISION This matter came before the Court on motions by the defendants, Charles G. Castor, Henry Y. Dein, William T. Robinette, and James A. James, to dismiss the fifteen-count indictment returned against them on May 27, 1976. The indict- ment contains fourteen counts charging substantive violations of the Mail Fraud Act, 18 U. S. C. § 1341,’ and one count charging the defendants with conspiracy to violate the Mail Fraud Act, 18 U. S. C. § 371. means of false or fraudulent or promises, or to sell. of, loan, exchange, alter, give away, distribute, supply, or procure unlawful use any 18a In essence, the indictment charges that the defendants’ em- barked upon a scheme to obtain a number of newly available package liquor permits under false or fraudulent pretenses. The defendants are charged with having caused certain persons to file applications and other documents with the Indiana Alcoholic Beverage Commission (ABC) and the Marion County Local Board (MCLB).* The indictment names twelve persons whom the defendants allegedly caused to sign and file with the ABC applications for permits as well as other docu- ments which contained false and fraudulent pretenses, repre- sentations, and promises. Liquor permits were subsequently issued to the above- mentioned twelve persons. The indictment charges that the — defendants had economic interests in the twelve permits and that after the issuance of the permits the defendants caused certain papers to be filed with the ABC for the purpose of effecting changes of location as to nine of the permits. It is alleged that the transfer papers contained false and fraudulent representations and promises. The indictment goes on to allege that the defendants, using fraudulent methods and concealing their alleged economic interests in the liquor permits, induced the ABC to approve transfers of ownership of eleven of the twelve permits to corporations under the control of the defend- ants. The indictment then alleges that after ownership of the permits had been transferred to the corporations the defendants sought and received ABC approval of a transfer of the stock of the corporations to the defendant James. 2. Defendants Castor, Dein, and Robinette each are members of ~ same Indianapolis Law firm. Defendant James was a client of said firm. 3. The Indiana Alcoholic Beverage Commission regulates various aspects of the liquor business in Indiana and can issue, deny, sus- pend, revoke, renew, or deny renewal of all liquor permits in the state. The Marion County Local Board is ch with the responsi- bility of determining the fitness of Marion ty applicants and recommending a specific disposition with respect to each application. 19a The counts charging violations of the Mail Fraud Act, Counts I-XIV, set forth fourteen separate mailings which allegedly were in furtherance of the alleged scheme outlined above. Each of the fourteen uses of the mails charged involves a letter from the ABC addressed to a person other than one of the defend- ants. Count I involves a letter to one George Rowlas giving him notice of a hearing on his application for a liquor permit. Count XII revolves around a letter to James Griffin concerning his intention to lease certain property to Peter G. Dandridge, one of the applicants for a new package liquor store permit. No other reference is made to Griffin in Count XII nor does Count XII make any reference to any connection between the intention to lease property and Dandridge’s application for a liquor permit. The mailings alleged in Counts VII and VIII are letters from the ABC to F. Pen Cosby. One of the letters contained a list of the applicants for the newly avai‘able liquor permits, while the other contained a list of the successful applicants. Counts IX-XI and XIII-XIV concern mailings to applicants for permits which noted that their applications were incomplete. These notices were all mailed on or subsequent to March 7, 1973. The ABC voted to issue the permits here in question on November 20, 1972. The final category of mailings involves notices sent out by the ABC on December 6, 1972, to five of the applicants notify- ing them that the Commission had acted favorably on their applications for package liquor permits. These mailings are charged in Counts II-VI. I. The Mailings. The United States Court of Appeals for this Circuit in United States v. Staszcuk, 502 F. 2d 875 (7th Cir. 1974), held that, “To support federal criminal jurisdiction, the mailing must be, in the words of the statute, ‘for the purpose of 20a executing such scheme or artifice.’ The connection between the fraud and the use of the mails ‘must be real and proximate, not merely abstract or remote.’” 502 F. 2d at 880, quoting from United States v. Brickey, 296 F. Supp. 742, 748 (E. D. Ark. 1969). See also, United States v. Maze, 414 U. S. 395 (1974), and Ohrynowicz v. United States, Cause No. 76-1247 (7th Cir. October 12, 1976). Subsequent to this Court’s announcement of its decision at the October 1, 1976, oral argument, the Court of Appeals handed down Ohrynowicz v. United States, supra. Ohrynowicz arose from a “check kiting” scheme in which the defendants conspired to defraud banks in which checking accounts were opened by them under false names and addresses. The court below granted Ohrynowicz’s 28 U. S. C. § 2255 motion as to several of the counts, basing its decision on Maze, supra. The district court, however, distinguished the mailed orders for personalized checks, holding that they occurred both prior to the completion of the scheme and “ ‘were in pursuance of that scheme.’” Although appellant Ohrynowicz argued that the personalized checks were not used in the scheme and would have hindered rather than furthered the scheme, the Court of Appeals affirmed the district court’s decision. However, the Seventh Circuit’s decision was based on the fact that there was “enough evidence to support an inference that the ordering of personalized checks was a normal part of the transaction which resulted from the opening of an account... .” and that “[a] trial judge’s findings of fact ordinarily will not be disturbed unless they are without support in the record.” In the instant case the government in its brief in opposition to the motions to dismiss and at oral argument on said motions asserted that the indictment is sufficient since it alleges that each mailing was “for the purpose of executing such scheme or artifice or attempting so to do.” However, inasmuch as the mailings alleged in the indictment are facially insufficient, as set forth below, the indictment must be dismissed. 2la Unlike Ohrynowicz none of the mailings alleged in the indictment were even arguably necessary or in furtherance of the alleged scheme or artifice. The letters notifying applicants that permits had been awarded to them cannot be said to be necessary for the success of the alleged scheme as the permits had been previously granted on November 20, 1972. Whether or not notification came by mail, the permits were granted and the mailings could not be shown to be remotely connected to the transfer of the permits to defendant James. Likewise, the letters from the Alcoholic Beverage Commission to applicants stating that their applications were not completed because of ‘the absence of certain items is not sufficiently connected with the offenses charged within the indictment. For the same reason the letters from the Alcoholic Beverage Commission to F. Pen Cosby, listing the applicants and the successful applicants, did not further the scheme. In addition there is no allegation in the indictment showing any relation between F. Pen Cosby and any of the defendants, or to any of the actions alleged to have been taken by defendants or any alleged victim of the alleged scheme. The postcard to George Rowlas, from the Alcoholic Beverage Commission, announcing the date of the proposed hearing on his application if anything was in hin- drance of the alleged scheme. Therefore it cannot be seen as bearing any real relationship to the scheme. The letters from the Alcoholic Beverage Commission to James Griffin, an appli- cant for a liquor permit, concerning Mr. Griffin’s intention to lease certain property to Peter Gordon Dandridge is likewise insufficiently related to the crimes charged within the indict- ment. It is nowhere factually alleged in the indictment as to how or in what manner the communication concerning Griffin's “intention to lease certain property to Peter Gordon Dandridge” had any connection whatsoever with Dandridge’s application for a permit. Moreover, if the mailing is construed to involve some question about the validity of a lease from Griffin to Dandridge, it was in hindrance of the scheme, rather than in furtherance of it. 22a Thus, from the face of the indictment this Court concludes that there is no real and proximate relationship or nexus between the mailings and the scheme alleged in the indictment. To hold otherwise would extend federal criminal jurisdiction far beyond the meaning of the Mail Fraud Act. II. The Scope of Section 1341. The Mail Fraud Act, 18 U. S. C. § 1341, is addressed to “scheme(s) or artifice(s) to defraud, or for obtaining money or property by means of false or fraudulent pretenses, repre- sentations or promises. . . .” One of the questions presented by the motions under consideration is whether the acts charged in the indictment are such as to fall within the statutory proscription. The resolution of that question is dependent upon an analysis of the meaning and placement of the words “or for obtaining money or property . . .” in the statute. The meaning of the phrase “or for obtaining money or property . . .” becomes crucial to the question of the sufficiency of the indictment because this Court has concluded that package liquor store permits are not money or property. According to the indictment, the object of the defendants’ scheme or artifice was “to obtain from the Alcoholic Beverage Commission a number of newly available package liquor store permits.” Inas- much as such permits are clearly not “money,” they must be considered to be “property” for the indictment to be sufficient unless the Court were to accept the argument advanced by the government that a scheme or artifice to defraud need not in- volve money or property in order to constitute an offense under 18 U. S. C. § 1341. The government's theory that neither money nor property need be the object of a scheme or artifice to defraud under the Mail Fraud Act relies upon United States V. States, 488 F. 2d 761 (8th Cir. 1973). States held that a scheme or artifice under Section 1341 need not concern money or property. In so holding 23a the Eighth Circuit reasoned that the phrase “or for money or property . . .” in Section 1341 is to be viewed independently of the phrase “to defraud.” 488 F. 2d at 764. Contrary to the analysis in States, this Court believes that the addition of the phrase “or for obtaining money or property” to the Mail Fraud Act in 1909* was for the purpose of clarifying the statute. That is, the phrase in question was intended to be complementary or explanatory rather than independent. An analysis of the cases decided before and after the 1909 amend- ment to the Mail Fraud Act which added the phrase here in question leads to the conclusion that the purpose of the 1909 amendment was to clarify the preceding language and not to create a new offense. E.g., Streep v. United States, 160 U. S. 128 (1895); Durland v. United States, 161 U. S. 306 (1896); Hammerschmidt v. United States, 265 U.S. 182 (1924); Fasulo v. United States, 272 U. S. 620 (1926). An examination of the legislative and case histories of statutes in pari materia with the Mail Fraud Act buttresses the conclusion that the 1909 amendatory language was complementary rather than supple- mentary in nature.® The grammatical construction and the placement of the phrase in question in the statute also lead to the conclusion that the 1909 amendment did not alter the thrust of the Mail Fraud Act—to combat schemes which contemplate definable economic harm to the victims or targets of the scheme. Regent Office Supply Co. v. United States, 421 F. 2d 1174, 1182 (2d Cir. 1970). That the phrase in question was intended to be an appositional relation of thought clarifying the meaning of the preceding phrase is indicated by the use of the gerundive con- struction (“for obtaining”) as opposed to the infinitive con- struction used in the preceding and succeeding phrases (“to 4. 35 Stat. 1130-31, Ch. 321, § 215. 5. Sections 149 and 300 of the “act to revise, consolidate, and amend the statutes relating to the Post Office Department,” 17 Stat. 302, Ch. 335 and 17 Stat. 322-23, Ch. 335, are two such statutes. 24a defraud,” “to sell”). See, 67 C. J. S. Or at 516 (noting that “or” can be used to introduce an alternative or to introduce a clarifier). The 1909 amendment was inserted into the statute between the language of original enactment of 1872 and the 1889 amendment® which clearly added a new offense which did not include “fraud” as an element. Streep v. United States, 160 U. S. 128 (1895). If Congress intended the 1909 amend- ment to establish an independent offense, it would appear to be more logical for Congress to have inserted the new offense after the 1889 amendatory language. The government also argues that the sufficiency of the indict- ment is supported by the rationale of such cases as United States Vv. Isaacs, 493 F. 2d 1124 (7th Cir.), cert. denied, 417 UV. S. 976 (1974); United States v. Keane, 522 F. 2d 534 (7th Cir. 1975); United States v. Barrett, 505 F. 2d 1091 (7th Cir. 1974); United States v. Bush, 522 F. 2d 641 (1975); United S:ates v. George, 977 F. 2d 1091 (7th Cir. 1973), and United States v. Bryza, 522 F. 2d 414 (7th Cir. 1975). Each of those cases was based upon an employment relationship and a re- sultant breach of fiduciary duty. The first four of the above- noted cases involved public officials whose acts in some way deprived the public of the honest and faithful services of its officials; while the latter two cases involved corporate employees who, through their actions, deprived their employers of the honest and faithful services to which the employers were duc. Such deprivations amount to the potential for definable eco- nomic harm which the statute contemplates, whereas here such potential does not exist. Furthermore, there is no allegation of corruption on the part of ABC or MCLB officials. It has long been the law in Indiana that permits to sell liquor or the use or enjoyment thereof do not constitute “property.” McKinney v. Town of Salem, 77 Ind. 213 (1881); State ex rel. Zeller v. Montgomery Circuit Court, 233 Ind. 563, 62 N. E. 2d 152 (1945); Selle v. Short, 326 N. E. 2d 610 (Ind, Ct. 6. 25 Stat. 873, Ch. 393. 25a App. 1975). A statute in effect at the time the events leading to the indictment allegedly took place provided: “No person shall be deemed to have any property right in any beer wholesaler’s permit, beer retailer’s permit, beer dealer’s permit, liquor wholesaler’s permit, liquor retailer’s permit, liquor dealer’s permit, wine wholesaler’s permit, wine retailer's permit or wine dealer’s permit, nor shall said permit itself or the enjoyment thereof be considered a property right.” Ind. Code § 7-2-1-14(a) (Burns 1972)." For the above-stated reasons the Court concludes that the permits here in question, the object of the alleged scheme, are not “money or property” within the contemplation of Section 1341. This conclusion, coupled with the Court’s reading of the 1909 amendment to the Mail Fraud Act, causes the Court to rule that the scheme alleged is not one within the scope of the statute under which the indictment was brought. As the Court stated in its ruling from the bench on October 1, 1976, the acts charged here do “not come up to the level of criminality.” For this reason the motions must be sustained and the indictment must be dismissed. Inasmuch as the substantive counts of the indictment (Counts I through XIV) are insufficient to charge an offense, the conspiracy count (Count XV) based on the substantive counts must also be dismissed. This Court having considered the motions to dismiss the indictment and the briefs and oral arguments in support thereof and in opposition thereto, concludes that the motions should be sustained. The indictment must therefore be and hereby is DISMISSED. It Is So ORDERED. Dated this 27th day of October, 1976. /s/ WILLIAM E., STECKLER United States District Judge 7. Title 7 of the Indiana Code was by Acts 1973, Pub. L. No. 55 and replaced by a new Title 7.1. One part of Title 7.1 provides that a “permittee shall have no right in a whole- saler’s, retailer’s, or dealer’s permit any type.” Ind. Code § 7.1-3-1-2 (Burns Supp. 1976). IN THE UNITED STATES COURT OF APPEALS For the Seventh Circuit No. 76-2068 UNITED STATES OF AMERICA, Plaintiff-Appellant, vs. CHARLES G. CASTOR, WILLIAM T. ROBINETTE, HENRY Y. DEIN AND JAMES A. JAMES, Defendants-A ppellees. Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division No. IP 76-79 CR - William E. Steckler, Judge. Argued February 24, 1977—Decided July 8, 1977 Before CASTLE, Senior Circuit Judge, SPRECHER and BAUER, Circuit Judges. BAuER, Circuit Judge. The Government appeals, pursuant to 18 U.S. C. § 3731, the district court’s dismissal of a mail fraud indictment returned against the defendants. The issues for our decision are whether the indictment alleges a fraudulent scheme within the scope of the mail fraud statute, 18 U. S. C. § 1341, and whether the indictment alleges mailings in furtherance of the alleged scheme. We hold that the indictment charges both elements of the offense and reverse the dismissal. roo I. The indictment charges the defendant with fourteen sub- stantive counts of mail fraud and one count of conspiracy to commit mail fraud in connection with a fraudulent scheme to procure a number of newly available permits to operate retail package liquor stores. The details of the alleged scheme are as follows: In 1972 forty-five new package liquor store permits becam. available in Indianapolis, Indiana as a result of an Indiana Court of Appeals ruling that, in applying the statutory limit of one permit for each 5,000 persons or fraction thereof, the population of the Consolidated City of Indianapoiis, which includes Indianap- olis and several surrounding communities, rather than the popu- lation residing within the old city limits, controls the number of permits to be issued. Indiana Alcoholic Beverage Commis- sion V. Baker, 153 Ind. App. 113, 286 N. E. 2d 174 (1972). Approximately 120 applications were filed by persons seeking the new permits. The defendants are charged with fraudulently inducing the Indiana Alcoholic Beverage Commission (IABC) and the Marion County Local Board (MCLB) to issue permits to persons who did not intend to operate package liquor stores, and who, upon the issuance of the permits, transferred them to persons and entities of the defendants’ choosing. The indictment names twelve persons whom the defendants allegedly caused to sign and file with the IABC applications for permits, as well as other documents which concealed the de- fendants’ interest in se applications.’ Permits were issued to the twelve. The indictment further states that, after the permits were issued, the defendants caused certain documents containing false 1. The ts who allegedly acted in the defendants’ interest were plaintiffs in the suit establishing the availability of the new pecan, and dun to Sonic perticigatcn In tho Iilgution, wees, por portedly given preference in the granting of permits. Transcript of oral argument on motion to dismiss 73-74 (October 1, 1976). 28a representations to be filed with the IABC in order to reccive permission to relocate nine of the approved stores. Included were sham leases and papers stating that the named applicants intended to operate liquor stores at the new premises. The indictment goes on to allege that the defendants, using fraudulent methods and concealing their economic interest in the liquor store permits, induced the IABC to approve transfers of eleven of the permits to corporations under the defendants’ control. Finally, the indictment alleges that, after the transfer of the permits to the defendants’ corporations, the defendants sought and received IABC approval to transfer the stock of the corpo- rations to defendant James. Each of the fourteen mail fraud counts sets forth a separate mailing that allegedly was in furtherance of the scheme, Count I charges a mailing from the IABC to George Rowles, one of the “fronts” who purportedly obtained permits for the defend- ants, notifying Rowles that the MCLB would hold a hearing on his application. - Counts II through VI charge the mailing of notices by the IABC to five of the “fronts” that the IABC had voted to issue them liquor permits. Count VII charges the mailing by the IABC to F. Pen Cosby, an attorney retained by defendant Robinette to represent a number of applicants for package liquor store permits, of a list of persons whose permit applications were to be processed by the IABC and the MCLB. Count VIII charges a later mailing by the IABC to Cosby of a list of persons who had been issued permits by the IABC. Counts IX through XI, XIII, and XIV charge the mailing by the IABC of notices to five of the “fronts” that their appli- cations were incomplete. Count XII charges a mailing by the IABC to James Griffin regarding his intention to lease property to one of the “fronts.” 29a The district court dismissed the indictment on the grounds (1) that it did not allege a scheme or artifice to defraud within the meaning of the mail fraud statute, and (2) that the mailings alleged to be in furtherance of the scheme were not sufficiently connected to the scheme to support federal criminal jurisdiction. Il. Scheme or Artifice to Defraud The district court found that the scheme alleged in the indict- ment did not satisfy the statutory requirement of being a “scheme or artifice to defraud or for obtaining money or prop- erty by means of false or fraudulent pretenses, representations, or promises”. 18 U. S. C. § 1341. The court construed the statute as requiring a fraudulent scheme to have as its object the “obtaining of money or property.” It reasoned that the statu- tory phrase “or for obtaining of money or property by means of false or fraudulent pretenses, representations, or promises” modifies and limits the preceding phrase “any scheme or artifice to defraud”, and thus does not describe an independent type of scheme cognizable as an offense. Applying its construction, the district court found that, as a matter of law, the scheme charged in the indictment could 2. 18 U.S. C. § 1341 reads in full: depository pene cigs eters gre nding woe enti red by the Postal Service, or or receives therefrom, any such matter or or i causes to be delivered by mail according c> tho Gmetion: etwon, or ot Gio place ot which ir aeats 30a not constitute a scheme under the mail fraud statute because the liquor store permits that were the object of the alleged scheme are clearly not money and are not considered property under Indiana law. The Government, arguing that the “or” between the two phrases in 18 U. S. C. § 1341 should be read in its ordinary disjunctive sense, contends that the district court’s construction is erroneous. Under the Government’s construction, the two phrases describe two different types of schemes that are cog- nizable under the mail fraud statute, the first proscribing schemes “to defraud” generally, and the second proscribing schemes “for obtaining of money or property by means of false . . . pretenses” particularly. Alternatively, the Government contends that the fraudulent scheme charged in the indictment constituted an offense even under the district court’s construction of the mail fraud statute because the permits obtained through the scheme constituted “property” within the meaning of the statute. We need not consider the Government’s alternative argument, for the district court’s construction of 18 U. S. C. § 1341 has been previously rejected by this Court in United States v. Isaacs, 493 F. 2d 1124, 1149-50 (7th Cir.), cert. denied, 417 U. S. 976 (1974), and United States v. Joyce, 499 F. 2d 9, 22 (7th Cir.), cert. denied, 419 U. S. 1031 (1974). In both cases we held that the mail fraud statute is not limited to fraudulent schemes that contemplate the actual loss of money or property. Accord, United States v. Brown, 540 F. 2d 364, 374 (8th Cir. 1976); United States v. States, 488 F. 2d 761 (8th Cir. 1973), cert. denied, 417 U. S. 909 (1974).° 3. The defendants, particuiariy Robinette, presented extensive arguments for their interpretation of the statute based upon previous versions of the statute and older cases, most of which were decided in the first quarter of this century. We find these arguments un- persuasive for the reasons stated by Judge Murray in United States v. Mandel, 415 F. Supp. 997, 1011-1012 (D. Md. 1976). In view of Judge Murray’s comprehensive opinion repudiating the identical SS eS SS a ee arguments here. 3la Moreover, this interpretation has been consistently followed by this Circuit in a line of cases holding that a scheme to de- fraud the government or a private party of an employee’s honest and faithful services is proscribed by 18 U. S. C. § 1341. United States v. Bush, 522 F. 2d 641 (7th Cir. 1975), cert. denied, 96 S. Ct. 1484 (1976); United States v. Keane, 522 F. 2d 534 (7th Cir. 1975), cert. denied, 96 S. Ct. 1481 (1975); United States v. Bryza, 522 F. 2d 414 (7th Cir. 1975), cert. denied, 96 S. Ct. 2237 (1976); United States v. Barrett, 505 F. 2d 1091 (7th Cir.), cert. denied, 421 U. S. 964 (1975); United States v. George, 477 F. 2d 508 (7th Cir.), cert. denied, 414 U. S. 827 (1973). Although the opinions in these cases do not concentrate on the language of 18 U. S. C. § 1341, the cases hold that a mail fraud violation can be asserted “even in the absence of an object susceptible to measurement in terms of money or property”, Bryza, supra at 421. The defendants attempt to distinguish the above cases by arguing that the mail fraud schemes in those cases caused or could have caused at least potential pecuniary loss to its victims and that no such loss could have occurred here. Defendants contend that, even absent a requirement that the scheme con- template its victims actually lose money or property, there must be at least a probability of pecuniary injury to the individuals defrauded for the scheme to be cognizable under 18 U. S. C. § 1341. United States v. Dixon, 536 F. 2d 1388, 1399-1401 (2d Cir. 1976); United States v. Regent Office Supply Co., 421 F. 2d 1174, 1182 (2d Cir. 1970). We are not persuaded that the prior cases embody any such requirement. Nevertheless, we may assume arguendo that such a requirement exists, for we are convinced that, even if this Court’s prior decisions contemplate that the alleged scheme have the probable or potential effect of causing its victims to lose money or property, the potential pecuniary loss resulting from the scheme alleged here is no different in kind from the potential effects attributable to schemes previously found cog- nizable under the statute. 32a In United States Vv. Bush, supra at 648, for example, in which we reserved the question of whether the mail fraud statute requires that the scheme’s victims suffer some form of pecuniary injury, we found that the mere possibility of future pecuniary injury would be sufficient to meet any pecuniary injury require- ment read into the statute. Bush, a City of Chicago official, hid his interest in an advertising firm and used his influence to persuade other officials to award contracts to the firm. In affirm- ing his conviction, we stated that, had the City known of Bush’s interest in the firm, “it might have been able to obtain a better contract.” Id. In the case at hand, the alleged scheme involves no more speculative pecuniary injury to its victims than the injury in Bush. The indictment charges that the defendants’ scheme to garner several package liquor store permits through the use of “fronts” defrauded other persons who applied for the permits. The fraud diminished the other applicants’ chances to obtain the new permits, both because the Indiana authorities were not likely to grant twelve permits to one individual, and because the defendants’ “fronts” were purportedly given preference in the granting of the new permits because they were plaintiffs in the litigation that established the new permits’ availability. This diminished opportunity to obtain permits reduced the other appli- cants’ chances to make profits through the operation of package liquor stores or through the sale of liquor store permits,* and this type of potential pecuniary injury is, in our view, indistin- guishable from the injury suffered by the City of Chicago in Bush—the diminished opportunity to obtain a financially favor- able contract. Moreover, the diminishment of the other applicants’ oppor- tunity to obtain permits alleged here is analogous to the injury suffered by the victims of the mail fraud scheme found to consti- 4. The permits apparently can be sold for prices exceeding $20,000, far above the cost of obtaining them. Transcript of oral argument on motion to dismiss 118 (October 1, 1976). 33a tute an offense in Gregory v. United States, 253 F. 2d 104 (Sth Cir. 1958). In Gregory, a company sponsored a contest in which the contestants were to predict the winning team in each of twenty collegiate football games, the contest winner to receive a Cadillac automobile. The defendant won the contest by submit- ting predated entries after the games were played. The loss of opportunity suffered by the other contestants, the victims in Gregory, is almost identical to the loss suffered by the other applicants in the instant case. Inasmuch as we find that the scheme charged in the indictment involves potential pecuniary injury to at least one category of victims, the other applicants for licenses, we need not, in review- ing the district court’s dismissal of the indictment, consider the actual or potential harm to the other alleged victims, the LABC and the MCLB. Ii. Mailings To support federal jurisdiction in a mail fraud prosecution, 18 U. S. C. § 1341 requires the use of the mails “for the purposes of executing [the] scheme or artifice [to defraud].” The district court found, and the defendants argue to us, that the indictment failed to charge this element of the offense because it is not apparent on the face of the indictment that there is a sufficient nexus between the mailings and the alleged scheme. We believe the district court asked the wrong question in con- sidering this aspect of the indictment. The question is not whether the indictment particularly alleges sufficient facts from which a jury could find that the mailings charged were in furtherance of the scheme, but rather whether the Government conceivably could produce evidence at trial showing that the designated mail- ings were for the purposes of executing the scheme. United States v. Sampson, 371 U. S. 75, 76 (1962). The resolution of the question of whether the mailings alleged were in furtherance of the scheme_must await trial 34a “unless it so convincingly appears on the face of the indict- ment that as a matter of law there need be no necessity for such delay.” United States v. Feinberg, 50 F. Supp. 976, 977 (E. D.N. Y. 1973), affd, 140 F. 2d 592 (2d Cir.), cert. denied, 322 U. S. 726 (1944). The Government need not allege the subordinate evidentiary facts by which it intends to prove the “in furtherance” element of the crime charged, and an indictment, setting out the mailings charged and alleging that they were in furtherance of the scheme should not be dismissed as insufficient on its face unless there is no conceivable evidence that the Government could produce at trial to substantiate its “in furtherance” allegation. Looking at the mailings charged in the indictment in light of the above standard, we hold that the district court erred in find- ing, at this stage of the proceedings, that the mailings were insufficient to support federal jurisdiction. Causation It is well settled that a defendant “causes” a mailing for pur- poses of 18 U. S. C. § 1341 either when he makes use of the mails or when he causes someone else to do so. In Pereira v. United States, 347 U.S. 1, 8-9 (1954), the Supreme Court held: “Where one does an act with knowledge that the use of the mails will follow in the ordinary course of business, or where such use can seasonably be foreseen, even though not actually intended, then he ‘causes’ the mails to be used.” Inasmuch as all the mailings charged in the indictment were letters from the Indiana Alcoholic Beverage Commissicn either notifying persons connected with the scheme of matters related to the granting of the permits or asking such persons for infor- mation regarding the permit applications, we cannot say as a matter of law that the mailing of such letters could not reason- ably be foreseen by the defendants. Nothing in the indictment indicates that the charged mailings were not part of the normal processing of applications or were not sent in the ordinary course of the Commission’s business. 35a In Furtherance of the Scheme Having determined that the indictment sufficiently alleges that the defendants “caused” the charged mailings, we must determine whether the charged mailings could have been made in further- ance of the fraudulent scheme. Under the statute, the mailings must be “for the purpose of executing the scheme.” However, “[iJt is not necessary that the scheme contemplate the use of the mails as an essential element.” Pereira v. United States, supra at 8. Faced with these vague and somewhat ambiguous statements, we reviewed the relevant cases on the question in Unitcd States v. Rauhoff, 525 F. 2d 1170, 1176 (1975), and arrived at the following formulation: “Mailings are in furtherance of a scheme if they are inci- dental to an essential part of the scheme. Pereira v. United States, 347 U.S. 1, 8-9 (1954). Under this definition, mail- ings made after the scheme has reached its fruition are not in furtherance of the scheme, United States v. Maze, 414 U.S. 395 (1974), nor are mailings which conflict with the of the scheme and have little effect upon the scheme, United States v. Staszcuk, 502 F.2d 875 (7th Cir. 1974). On the other hand, mailings made to promote the scheme, United States v. Joyce, 499 F.2d 9 (7th Cir.), cert. denied, 419 U.S. 1031 (1974), or which relate to the acceptance of the proceeds of the scheme, United States v. Isaacs, 493 F.2d 1124 (7th Cir.), cert. denied, 417 US. 976 (1974), or which facilitate concealment of the scheme, United States v. Sampson, 371 U.S. 75 (1962) have been found to have been in furtherance of the scheme under this definition.” Further, we held in the more recent case of Ohrynowicz v. United States, 542 F. 2d 715 (7th Cir.), cert. denied, 97 S, Ct. 650 (1976), that a mailing which is a normal concomitant of a transaction that is essential to the fraudulent scheme can be in furtherance of the scheme. In light of these precedents, we find that the mailings charged in the indictment could be found by a jury to be “for the purposes 36a of executing the fraudulent scheme” and thus can withstand a motion to dismiss the indictment. The mailing in Count I is a notice of a hearing on a permit application sent to one of the “fronts” by the IABC. Defendants argue that, like the hearing notice found to be insufficiently con- nected with a mail fraud scheme in United States v. Staszcuk, 502 F. 2d 875, 880-881 (7th Cir. 1974), this mailing conflicted with the scheme, rather than promoted it, because it provided an opportunity for the public to scrutinize the “front’s” permit application and thus might have led to revelation of the fraud. We find Staszcuk distinguishable since that decision followed a full trial of the mail fraud charges and was based on trial evi- dence that showed that concealment of the fraudulent scheme from the public was an essential aspect of the scheme charged in the case. In the case at hand, we cannot determine without a trial record whether a public hearing necessarily conflicted with the scheme or whether, as the Government may show at trial, the mailing of a hearing notice was a normal concomitant of the permit-granting process, see Ohrynowicz, supra, or whether the mailing was used to inform the defendants that the scheme was proceeding as planned. The mailings charged in Counts II through VI, notices to the “fronts” that the IABC had voted to issue them permits, like the notice of hearing in Count I, could have been normal concomi- tants of the permit granting process or could have told the defendants that the scheme was proceeding as planned. More- over, these mailings are very similar to the mailing in Count XIII in United States v. Isaacs, 493 F. 2d 1124, 1152 (7th Cir.), cert. denied, 417 U. S. 976 (1974). That mailing, a letter from the Illinois Racing Board to the defendants’ corporation, informed the defendants that they had been granted racing dates. This indicated to the defendants that they had succeeded in their fraudulent scheme to obtain racing dates without disclosing their interest in the corporation. The mailing was held to be in further- ance of the scheme as a “necessary sequel tu the concealment of the [defendants’] beneficial interest” in the corporation. 37a Counts VII and VIII charge two mailings from the [ABC to F. Pen Cosby listing the applicants for the liquor permits and the persons who had been awarded permits. While the relationship of these mailings to the scheme is not entirely clear from the face of the indictment, the nature of the mailings is such that we cannot say as a matter of law that the Government could not produce evidence at trial to show that they were in furtherance of the scheme. Perhaps it was essential to the planning of the scheme that the defendants knew how many applicants there were and where their stores were to be located. This latter knowl- edge, in particular, could have been crucial in acquiring sites for the later transference of the locations of the permits, inasmuch as the Indiana authorities might have been reluctant to transfer the permits to sites that were close to those where other stores were scheduled to operate. This certainly constitutes a possible purpose of this mailing that could be shown at trial. The mailings in Counts IX through XI, XIII and XIV were notices from the IABC to several of the “fronts” or their trans- ferees that certain of their applications lacked essential informa- tion. These mailings could have aided the defendants by inform- ing them that the scheme was proceeding as planned. They might even have been generated by deliberate omissions intended to cause the IABC to send the notices so the defendants could gauge the progress of the application process. Finally, the letter in Count XII from the IABC to a lessor of property listed as the site at which one of the “fronts” wanted to operate his store could be in furtherance of the scheme. Like the letters to the “fronts” asking about missing items, this letter could have told the defendants that the scheme was going as planned or could have told them some particular fact about the permit-granting process. There is nothing in the indictment indicating that, as a matter of law, this letter could not have been in furtherance of the scheme. As is clear from the foregoing discussion, we cannot say, from the face of the indictment, that no evidence could be 38a presented at trial to show that the charged mailings furthered the alleged fraudulent scheme. In summary, we hold that the indictment charges a scheme or artifice to defraud within the meaning of 18 U. S. C. § 1341 and charges that the mails were used for the purpose of execut- ing the charged scheme. Accordingly, we reverse the district court’s dismissal of the indictment and remand the case for further proceedings.° REVERSED AND REMANDED. A true Copy: Teste: Clerk of the United States Court of Appeals for the Seventh Circuit. 5. Circuit Rule 18 shall be applied by the district court on remand. : 39a ° UNITED STATES CourRT OF APPEALS For the Seventh Circuit Chicago, Illinois 60604 July 8, 1977 Before Hon. LATHAM CASTLE, Senior Circuit Judge HON. ROBERT A. SPRECHER, Circuit Judge Hon. WILLIAM J. BAUER, Circuit Judge ) Appeal from the United States Dis- UNITED STATE ’ i STATES OF AMERICA trict Court for the Plaintiff-A ppellant, Southern District of No. 76-2068 vs. Indiana, Indianap- olis Division. CHARLES G. Castor, HENRY Y. DEIN, commen WILLIAM T. ROBINETTE, AND No. IP 76-79-Cr JAMES A. JAMES, Defendants-A ppellees. William E. Steckler, y Judge. This cause came on to be heard on the transcript of the record from the United States District Court for the Southern District of Indiana, Indianapolis 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, REVERSED and - REMANDED, in accordance with the opinion of this court filed this date. ‘ 40a1 UNITED STATES COURT OF APPEALS For the Seventh Circuit Chicago, Illinois 60604 August 9, 1977 Before Hon. LATHAM CASTLE, Senior Circuit Judge Hon. ROBERT A. SPRECHER, Circuit Judge Hon. WILLIAM J. BAUER, Circuit Judge UNITED STATES OF AMERICA, Plaintiff-Appellant, No. 76-2068 VS. CHARLES G. Castor, WILLIAM T. ROBINETTE, HENRY Y. DEIN AND JAMES A. JAMES, Defendants-A ppellees. ORDER aff in y On Appeal from the United States Dis- trict Court for the Southern District of Indiana, Indianap- olis Division. No. IP 76-79 CR William E. Steckler, Judge. On consideration of the petition for rehearing and suggestion for rehearing en banc filed in the above entitled cause by the Appellees, no judge in active service has requested a vote thereon, and all of the judges on the original panel have voted to deny a rehearing. Accordingly, Ir Is ORDERED that the aforesaid petition for rehearing be, and the same is hereby, DENIED. 4ia SUPREME COURT OF THE UNITED STATES No. A-176 Cuarues G. Castor, et Ax., Petitioners, v. Unitep States Order Extending Time To File Petition For | Writ Of Certiorari Upon Consiperation of the application of counsel for pe- titioner(s), It Is Onperep that the time for filing a petition for writ of certiorari in the above-entitled cause be, and the same is hereby, extended to and including September 30, 1977. /s/ John Paul Stevens Associate Justice of the Supreme Court of the United States Dated this 26th day of August, 1977. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_2630%3A1. Public record. Not legal advice.