Appendix — Sparber v. New York

APPENDIX A

Opinion of the United States Court of Appeals for the

Eighth Circuit, filed January 25, 1965:

Before Vocer, Van OosterHout and Menarry, Circuit

Judges.

Voczi, Circuit Judge.

The appellants herein, Abraham L. Koolish, David F.

Koolish and John B. Carnell, together with Marvin L.

Kline, Fred Fadell, Philip G. Rettig and J. George Zim-

merman, were indicted by a grand jury charged in fifteen

counts with mail fraud, 18 U.S.C.A. § 1341,* and a single

count of conspiracy to commit mail fraud, 18 U.S.C.A.

§ 371.2 During the trial Philip G. Rettig was severed

from the case due to illness. He is still under indictment

and his trial is pending. All other defendants were found

guilty by a jury of the conspiracy count and of various

mail fraud counts, with the exception of Fred Fadell, who

during the trial pleaded guilty to one count of mail fraud.

Abraham L. Koolish and David F. Koolish were sentenced

to five years’ inmprisonment on Counts 2, 4, 9 and 16 (the

conspiracy count), and five years’ imprisonment on

Counts 1, 13, 14 and 15, the second sentence to be served

consecutively to and not concurrently with the first sen-

1 During the trial the government withdrew Counts 6, 7, 8 and

10, leaving but eleven counts of mail fraud.

2 Sixteen overt acts were charged as supporting the conspiracy

count. Of such sixteen, overt acts Nos. 1, 3, 4, and 14 were

withdrawn by the government.

App. 2

tence. Each was also fined $17,000 and ordered to pay

the costs of prosecution, which totalled $7,479.76. They

wer Zvu2d not guilty on Counts 3, 5, 11 and 12. Carnell

was sentenced to a term of five years’ imprisonment as a

general sentence on Counis 1, 2, 4, 9, 12, 13, 14, 15 and 16,

he having been found not guilty on Counts 3, 5 and 11.

Kline was sentenced to serve five years’ imprisonment on

Counts 1, 2, 3, 4 and 9 and five years’ imprisonment to

be served consecutively thereto on Counts 12, 13, 14, 15

and 16. Kline was found not guilty on Counts 5 and 11.

Zimmerman, who was found guilty on Counts 9 and 16

only, was sentenced to a term of imprisonment for five

years but execution thereof was suspended and he was

placed on probation for a period of five years. On the

one count to which he pleaded guilty, Fadell was sen-

tenced to a term of imprisonment for a period of one

year and one day. Service of his sentence was stayed for

30 days, during which period he moved for further stay

of commitment for two years to enable him to put his

personal and business affairs in order or in the alter-

native to suspend execution of the sentence and place him

on probation. Disposition of that motion has been con-

tinued for a period of 18 months.

Abraham L. Koolish, David F. Koolish, John B. Carnell

and Marvin L. Kline appealed from the judgments of

conviction. On July 27, 1964, Kline withdrew his appeal.

~The appellants herein, therefore, are only the two Kool-

ishes and Carnell.

NAMED DEFENDANTS AND THE KENNY

FOUNDATION

Appellants, with their co-defendants, were charged with

conspiracy and with using the mails in furtherance of a

scheme to defraud and obtain money and property by

App. 3

means of false representations from the Sister Elizabeth

Kenny Foundation, its contributors and prospective con-

tributors. The conspiracy charged was alleged to have

existed over a period from January 1, 1949, to January

30, 1962, the date on which the indictment was returned.

The named defendants may be described as follows:

Marvin L. Kline, former mayor of Minneapolis, Minne-

sota, was, during the times involved, the Executive Direc-

tor of the Sister Elizabeth Kenny Foundation.

Fred Fadell, of Minneapolis, Minnesota, was the owner

and operator of Fred Fadell and Associates, a public re-

lations and advertising agency which was retained by the

Kenny Foundation ‘to perform public relations and pro-

motional services, officing with the Foundation, rent free,

and being paid by the Foundation first on a semi-monthly

and later on a monthly basis.

Abraham L. Koolish, of Chicago, Illinois, was finan-

cially interested in Empire Industries, Inc., Empire As-

sociates, New Century Corporation and LeMarge Mailing

Service Company, all of which conducted direct mail

solicitations for contributions for the Kenny Foundation.

David F. Koolish, also of Chicago, Illinois, is the son

of Abraham L. Koolish and together with his father was

financially interested in the business entities which con-

ducted the Kenny Foundation campaigns.

John B. Carnell, of Chicago, Illinois, was an employee

of the Kodlish companies who handled the Kenny Foun-

dation account.

Philip G. Rettig, of Chicago, Illinois, was president of

New Century Corporation during a portion of the indict-

ment period.

App. 4

J. George Zimmerman, of Minneapolis, Minnesota, was

a Certified Public Accountant who was engaged by the

Kenny Foundation to perform independent audits of its

books and render financial statem«nts.

The Sister Elizabeth Kenny Foundation (variously

referred to herein as ‘‘Kenny’’ and ‘‘Foundation’’) was

organized in 1943. Its purpose was the treatment and

rehabilitation of youngsters stricken with infantile paral-

ysis. The Foundation had various sources of income, in-

cluding the patients themselves, March of Dimes Cam-

paign, door-to-door solicitations, gifts, bequests, grants

and mail solicitations. In 1949, the Foundation turned

to the two Koolishes and Carnell to assist it in raising

money through direct mail solicitation. During the period

from 1951 through 1960 the Koolishes, their associates

and organizations, raised something more than $22,000,000

from contributors. Of that, $9,000,000 or approximately

40% of es th contributor dollar reached the Foundation.

The mail campaigns produced only about 25% of the

Foundation’s income for the period 1952 to 1959.

THE ALLEGED SCHEME

The indictment alleged that the defendants devised a

single all-inclusive scheme to obtain money by false pre-

tenses from the Kenny Foundation and its contributors.

With minor changes, the government accepts and we adopt

the appellants’ summary of the scheme as it was alleged

in the detailed indictment. .It consisted of ten material

parts:

1. Kenny’s Executive Director Kline and its public re-

lations counsel Fadell awarded mail solicitation contracts

to the Koolish companies (Empire Associates, Empire

Industries, Inc., and New Century Corporation) without

App. 5

obtaining competitive bids and at rates which provided

‘‘large profits’? to the Koolish companies.

2. All of the defendants (except Zimmerman) caused

the fall (as opposed to spring) mailing contracts between

Kenny and the Koolish companies to contain provisions

for refunds by the Koolish «ompanies in the event that

the mailing costs were less than the price agreed to in

the contracts. However, this provision of the fall con-

tracts was not fulfilled. Instead only ‘‘token refunds’’

were made and accepted because Kline and Fadell did

not require audits to be made of the books of the Koolish

companies to determine the amounts of the refunds due.

3. During the period 1952-1955 defendants A. L. Kool-

ish, David F. Koolish, John B. Carnell and Philip G.

Rettig ‘‘diverted’’ more than $350,000 of the proceeds

realized from the mailing contracts to Kline and Fadell

and concealed these facts from Kenney’s directors, con-

tributing agencies, licensing departments of states and

cities, and the Kenny donors. The Koolish companies

paid money to Fadell which Fadell thereafter divided

with Kline. The payments to Fadell were recorded on

the books of the Koolish companies as operating costs or

costs of preparing Kenny’s mailings.

4. Defendant A. L. Koolish purchased New Century

Corporation (which participated in the Kenny mailing

program) and he and his son, defendant David F. Kool-

ish, concealed the ownership of it from Kenny, its donors

and the public by appointing ‘‘dummy’”’ directors and

nominai stockholders. The two Koolishes designated Car-

nell and Rettig as officers of New Century and represented

(a) that Carnell owned New Century and (b) that

New Century was not associated with either the other

Koolish companies or the two Koolishes themselves.

App. 6

5. The Kéolishes, Carnell and Rettig caused New Cen-

tury to make gifts and to provide entertaiz:ment for

Kline, Fadell and various other officers and direstors of

Kenny and charged the costs on New Century’s books as

costs of preparing mailings. :

6. Kline, Fadell and Carnell arranged for Carnell to

be paid $400 per month by Kenny as an administrative

consultant from May 1, 1957, until March 1, 1960.

7. Kline and Fadell established a committee called the

Special Events Committee which they dominated and

controlled and together with Zimmerman falsely repre-

sented that this committee conducted the direct mail cam-

paigns of Kenny.

8. Kline, Fadell and Zimmerman withheld audit state-

ments of the Special Events Committee from Kenny di-

rectors, licersing departments of states and cities, Better

Business Bureaus, contributing agencies and Kenny do-

nors. Zimmerman prepared Kenny’s consolidated audit

reports wiuich falsely stated the costs of the direct mail

campaigns by reporting only a fractional part of the

actual costs as ‘‘Cosis of Fund Campaigns’’ and allocat-

ing the balance to ‘‘Costs of Therapist Training Opera-

tions; Medical Education and Training Programs; Public

Education and Information Services; Promotion and De-

velopment of Additional Treatment Facilities; Grants for

Medical Reseaxch; Publicity and Public Relations Oper-

ations, Provided Through National Headquarters’’.

9. Defendants Carnell and Rettig in the name of New

Century Corporation contracted with Kline to do mail-

ing and list maintenance for the Foundation and then

caused these services to be performe’ by ‘1e LeMarge

Mailing Service Company.

App. 7

10. All of the defendants (except Zimmerman) caused

the list of names of Kenny contributors to come into the

possession of the Koolish companies and the Koolish com-

panies rented these names to others and credited Kenny

with only a fraction of the proceeds of the rentals, the

major portion thereof being paid to the Koolish com-

panies.

FALSE REPRESENTATIONS

All of the defendants were alleged to have made false

representations, pretenses and promises to the Founda-

tion, the contributing agencies, the licensing departments

of states and cities, donors, contributors and prospective

contributors to the éffect that:

1. The actual costs of the mail campaigns to Kenny

were accurately and completely shown on Zimmerman’s

consolidated audit reports.

2. Kenny’s direct mail campaigns were conducted by

the Speciai Events Committee.

3. The Special Events Committee was an entity sepa-

rate from the Kenny Foundation.

4. The Koolish companies (excepting Empire Associates

and Empire Industries, Inc.) performed mailing services

for Kenny ai cost.

5. The Koolish companies (excepting Empire Associ-

ates and Empire Industries, Inc.) were the low bidders

on the mailing services and materials for Kenny.

6. Carnell was the owner of New Century and was not

associated with A. 1. Koolish or David Koolish in the

corporation.

7. A. L. Koolish and David Koolish held no ownership

or control in New Century.

App. 8

8. Carnell performed administrative consultant serv-

ices for the Foundation in return for fees of $400 a month

paid by the Foundation.

Each mail fraud count alleged the use of the mails for

the purpose of executing the scheme and artifice to de-

fraud. .

Count 16, the conspiracy count, alleged some 16 overt

acts committed by the defendants in furtherance of the

conspiracy. Overt acts numbered 1, 3, 4 and 14 were with-

drawn. The remainder are summarized as follows:

2. Abraham L. Koolish directed a nominee, Manuel

Rosner, to purchase stock of New Century Corporation.

5. Defendant Kline authorized payments to John B.

Carnell.

6. Defendants Carnell and Rettig paid approximately

$630 for World Series tickets, transportation and enter-

tainment, causing this expenditure to be entered on the

books of New Century as costs of the 1957 fall mailing of

the Foundation.

7.. The defendant Carnell signed and sent a letter to

H. M. Dean, Financial Director of the Foundation, re-

questing advance payment of $300,000 to New Century.

8. On or about October 20, 1958, defendants Carnell for

New Century and Kline for the Foundation executed a

mail campaign solicitation contract.

9. On or about March 2, 1959, Rettig for New Century

and Kline for the Foundation executed a mail campaign

contract.

10. On or about August 6, 1959, Fadell depo<ited to the

account of Fred Fadell and Associates a New Century

check in the amount of $3500.

App. 9

11. On or about January 2, 1958, Fadell executed a

personal note in the amount of $17,000 payable to New

Century.

12. On or about January 11, 1955, Kline ond Fadell

directed that expense accounts of the Foundation em-

ployees be approved by Fadell.

13. On or about April 15, 1959, Fadell submitted a bill

to the Foundation for salaries of employees of Fred Fadell

and Associates for the first half of April 1959.

15. On May 25, 1959, Zimmerman wrote a letter to the

Board of the Foundation transmitting a Consolidated

Financial Statement.

16. On or about July 1, 1959, Zimmerman wrote a let-

ter to the Commonwealth of Pennsylvania containing a

statement to the effect that the cost of fund campaigns

did not exceed 15% of the Foundation’s receipts from

fund campaigns for the year 1958.

* co e A = * *

At the outset, the four defendants who lived in the

Chicago area, Abraham L. Koolish, David F. Koolish,

John B. Carnell and Philip G. Rettig, moved for a trans-

fer of the case from the District of Minnesota to the

Northern District of Illinois or to some other district un-

der Rule 21(a), Federal Rules of Criminal Procedure, 18

U.S.C.A., the basis of the motion being that the extensive

newspaper, radio and television publicity concerning the

affairs of the Kenny Foundation and persons connected

therewith, including the defendants, had so prejudiced the

residents of the District of Minnesota as to preclude a

fair and impartial trial therein. Defendant Kline joined

in the motion. The other two Minnesota defendants,

Fadell and Zimmerman, did not join in the motion but

App. 10

did not oppose it. ‘The transfer was denied. See United

States v. Kline, D.C. Minn., 1962, 205 F.Supp. 637.

The trial began March 19, 1963, concluding on May 29,

1963. Fifty-two witnesses testified in behalf of the gov-

ernment and thirty-three witnesses for the defendants.

At the beginning of the trial the defendants challenged

the panel of jurors and renewed their motion to transfer

the proceedings to another district for trial. The chal-

lenge and motion were overruled.

On April 8, 1963, after approximately three weeks of

trial, defendant Fred Fadell announced through his at-

torney that he intended to change his plea from not guilty

to guilty. After the change of plea had heen accepted as

to Count 6, the jurors were informed of the change of

plea and admonished not to consider it as evidence that

a crime had been committed or that any of the other de-

fendants were guilty. Subsequent to the convictions, the

defendants made motions for a new trial which were de-

nied by written order September 10, 1963. The trial

judge’s excellent and comprehensive opinion expressing

his reasons therefor appears in United States v. Kline,

D.C. Minn., 1963, 221 F.Supp. 776.

Appellants’ first attack on the judgments of conviction

is that:

THE GOVERNMENT FAILED TO PROVE A

PRIMA FACIE CASE OF MAIL FRAUD OR

CONSPIRACY. THE COURT SHOULD HAVE

GRANTED DEFENDANTS’ MOTION FOR AC-

QUITTAL AT THE CLOSE OF THE GOVERN-

MENT’S CASE.

In considering the record on appeal in a case where

the government has prevailed, it is the duty of the appel-

late court to take that view of the evidence which is most

App. 11

favorable to supporting the jury verdict and to accept as

established all reasonable inferences that tend to support

the action of the jury. Taylor v. Mississippi, 1943, 319

U.S. 583, 585-6; Smith v. United States, 8 Cir., 1964, 331

F.2d 265, certiorevi denied... U.S... ., 33 U.S.L. Week

3128 (U.S. Oct. 5, 1964); Slocum v. United States, 8 Cir.,

1963, 325 F.2d 465; Thogmartin v. United States, 8 Cir.,

1963, 315 F.2d 589; Koop v. United States, 8 Cir., 1961,

296 F.2d 53; Valentine v. United States, 8 Cir., 1961, 293

F.2d 708.

With that in mind, we have given consideration :o the

evidence produced by the government herein. The record

before us consists of almost 9,000 pages of testimony,

with many hundreds of exhibits offered by both siaes.

The goverument’s case in chief—including, of course, the

cross-examination of its witnesses—covers well over 5,000

pages of testizaony. The case was bitterly contested and

on almost all material factors there was conflicting testi-

mony. Viewing the evidence in the light most favorable

to sustaining the jury verdict and accepting the inferences

reasonably to be deduced therefrom, we are satisfied that

the government did prove a prima facie case of mail

fraud and conspiracy and that there is substantial evi-

dence to support the jury’s findings thereof. A detailed

discussion of the voluminous testimony and exhibits

would unduly and unnecessarily extend this opinion.

Among other things, however, the jury could, and un-

doubtedly did, find the following:

1. Unbeknownst to the directors of the Kenny Founda-

tion, the Koolishes through Empire Industries, Inc., Em-

pire Associates and New Century paid $359,200 to Fred

Fadell and Associates during the period from February

28, 1952, through May 31, 1960. Fred Fadell, in turn,

App. 12

paid Marvin Kline $113,750 from December 1952 through

May 1957. The inference that the other defendants knew

of the division with Kline was justified through Carnell’s

testimony that he learned that Fadell and Associates was

retaining Kline as a ‘‘consultant’’ and that he had so ad-

vised Phil Koolish. The close association and coopera-

tion between the various parties supports the conclusion

of complete awareness of this pay-off.

2. The Koolishes, through their companies, gave many

expensive gifts to and provided entertainment for Kline

and Fadell and their families, and other Foundation per-

sonnel. These gifts totalled approximately $9,300 from

New Century Corporation and were charged to the Foun-

dation like any other cost of the mail campaigns. In ef-

fect, then, the payments were made and the gifts paid for

out of contributions mailed to and belonging to the Foun-

dation.

3. The inference that the payments and gifts were in

actuality bribes by the Koolish companies, using Founda-

tion money, finds substantial support in the record.

4. The Koolishos received their costs and profits before

the Foundation received anything.

5. By agreement, the Koolishes or companies controlied

by them were to be paid by the Foundation $20 per thou-

sand as renta) of lists of names and addresses. In addi-

tion thereto, the Foundation was to pay all other costs of

mailing, including postage. Instead of using proved con-

tributor lists or ‘‘selected names on a nationwide basis’’,

as promised, the Koolishes used millions of nanies and

addresses taken from telephone hooks which had but little

value, for which they charged $20 per thousand and which

resulted in waste in postage and other expenses for un-

deliverable mail in the fall ‘‘cold shot ’ mail campaigns.

App. 13

The Koolish companies made large profits through the

use of telephone book names. P. H. Koolish testified that

the $20 per thousand for names was where they made

their profit. The Koolishes were fully aware of the tre-

mendous amount of undeliverable mail resulting from the

use of these names. Carnell, when informed of complaints

from postmasters throughout the country and of the

great amount of undeliverable mail, said that nothing

could be done about it and that the letters from the post-

masters should be destroyed.

6. The Koolishes had possession and control of lists

of prior Foundation contributors. These were to be used

in the spring campaigns. The fail ‘‘coid shot’’ campaigns

made up of names from telephone books and other un-

proven sources were watched care/ully and if a loss was

indicated, they would be ‘‘sweetened’’ by using names

of prior Kenny contributors. As an example, the 1959

fall ‘‘cold shot’? campaign contained approximately

1,500,000 names from the Kenny prior contributors lists

which were supposed to be used only in the spring cam-

paigns. By this method the Foundation was charged $20

per thousand for the use of its own names.

7. Kline and Fadell aided the Koolishes and their com-

panies to perpetrate fraud on the Foundation: by per-

mitting the LeMarge Mailing Company, Inc., controlled

by the Koolishes in Chicago, to have possession and con-

trol of the prior Foundation contributors lists. The

Koolishes rented these names to other organizations at

prices ranging from $12 to $50 per thousand without

proper accounting to the Foundation.

8. There is evidence to justify the jury’s conclusion

that where the Koolishes purported to provide the Foun-

dation with special donors lists. they actually used the

App. 14

Foundation’s own prior contributors lists and in this way

charged the Foundation $20 per thousand for the use of

millions of the Foundation’s own names and addresses

between the years 1952 and 1959.

9. Because of these manipulations by the Koolishes of

the Foundation’s contributor lists, the Foundation in

effect was guaranteeing the success of the fall ‘‘cold shot’’

campaigns and the Koolish companies’ guarantees against

loss therein became merely empty gestures.

10. Fadell and Kline allcwed the Koolishes to unneces-

sarily convert the list of Kenny’s contributor names and

addresses from a manual card system to an IBM system

at a substantial cost to the Foundation. The manual

system previously used would have been sufficient for

Foundation purposes. Fadell and Kline obligated the

Foundation to pay the Koolishes excessive costs for IBM

list maintenance, whereas mauiitenance of a manual list

used previously thereto could have been continued for a

substantially lesser sum.

11. The Koolishes charged the Foundation $25 per thou-

sand for key punching new contributor names on IBM

cards, although it could have been done for $8.80 per thou-

sand and, typewritten, the operation, as in previous years,

would have cost less.

12. Homer A. Breahiver, Certified Public Accountant,

who was engaged by the Minnesota Attorney General to

participate in an investigation of the affairs of the Sister

Elizabeth Kenny Foundation, testified that from his ex-

amiiiation it was determined that of $19,454,675 collected

in the mail campaigns from 1952 through 1959 only

$8,056,445 was received by the Foundation.

App. 15

13. The Koolishes actively hid their excessively costly

operation from the contributors, public agencies and

Foundation directors through the use of Fadell, Kline

and J. George Zimmerman, the accountant. The defend-

ants set up certain accounting practices designed to con-

ceal the Kvolish share in the mail campaigns. These

practices included the use of false consolidated financial

statements made by Zimmerman to the directors of the

Foundation, reporting only the net contributions and

omitting all costs of the mail campaigns. They also de-

ceptively charged part of the high cost of the mail cam-

paigns to public education, information, medical educa-

tion, grants, publicity, etc.

14, Although the directors of the Kenny Foundation

were told by Kline that the mail contracts were awarded

on a competitive bid basis, this was not true. The direc-

tors were also persuaded by Kline and Fadell that no

one else could have done the job cheaper.

15. When news stories in the Wall Street Journal and

inquiries from Better Business Bureaus caused the Kool-

ishes and their Empire Industries, Inc., to become suspect

and an investigation as to their mailing activities for

Handicapped War Veterans was commenced, followed by

grand jury indictment, the mailing business of the Foun-

dation was, in the fall of 1955, turned over to New Cen-

tury Corporation and it was incorrectly made to appear

to the directors of the Foundation and to others that New

Century had no connection with the Koolishes or with

Empire.

16. There was substantial evidence to the effect that

the general directors of the Fuundation did not know

that the Foundation was advancing funds to the Koolishes

to pre-pay the costs of the mail campaigns and the direc-

App. 16

tors generally had no knowledge that Fadell and Kline

were receiving money from the Koolishes. The defend-

antS connived to and actually did set up a ‘‘Special

Events Committee’’ to pose as a front for the national

mail campaigns. Through the use of this committee actual

costs of conducting the mail operations were effectively

tidden. The committee reported only the net contribu-

tions. Audit statements of the committee were withheld

from the Kenny directors, regulatory agencies, Kenny

donors, Better Business Bureaus and contributing agencies.

17. Directors who sought to question the Koolish opera-

tion and to find out about the mail costs were gotten rid

of by Kline and replaced by others.

18. While the Koolishes and their companies were by

contract supposed to return to the Foundation amounts

saved over the estimated and agreed costs of mail cam-

paigns, Fadell and Kline never required an accornting

and the Koolishes in several instances returned only

‘*token’’ amounts.

19. The Koolishes never returnei to the Foundation

such wholly unnecessary expenses as the bribe payments

to Fadell and Kline and the gifts and entertainment fur-

nished to them and to other Foundation personnel.

20. The 1959 fall mailing of 12,000,000 pieces could

have been performed by a Minneapolis letter shop at a

savings of $27.94 per thousand less than the $67.50 per

thousand charged by New Century Corporation, or a total

saving to the Foundation of approximately $335,304.

21. The actions of the defendants, the manner in which

they worked together, the undercover things that were

done, the bribes and surreptitious payments justified the

jury’s conclusion in finding an overall conspiracy.

App. 17

Use of the mails in furtherance of the scheme to de-

fraud was aileged in the indictment and proven in the

government’s case. (3e of the mails has not been chal-

lenged in the appellants’ brief. Appellants further have

not challenged the government’s proof of overt acts com-

mitted in furtherance of the conspiracy count, No. 16.

In connection with this point, the appellants rely

strongly on Epstein v. United States, 6 Cir., 1949, 174 F.

2d 754. Reliance thereon is entirely misplaced. In Ep-

stein the government introduced no proof that the transac-

tions were not entered into in good faith and in the usual

course of business. Here the government has established

not orly excessive costs, fraudulent use of the Kenny

Foundation contributors list names and charge therefor,

but the surreptitious bribes to Fadell with a part thereof

going to Kline. We conclude that the principles for which

Epstein stands are inapplicable here, that the government

did prove a prima facie case of mail fraud and conspiracy,

and that the District Court’s denia) of the motion for ac-

quittal at the close of the government’s case was entirely

correct.

Appellaats’ second contention is:

IF THERE WAS ANY PROOF OF A SCHEME

OR *% CONSPIRACY IT WAS OF MULTIPLE

SCHEMES AND MULTIPLE CONSPIRACTES IN-

VOLVING FEWER THAN ALL OF THE DE-

FENDANTS. ACCORDINGLY THERE WAS A

PREJUDICIAL FATAL VARIANCE BETWEEN

“TE INDICTMENT AND THE PROOF.

Appellants argue that while the indictment charges all

seven defendants with one grand all-inclusive scheme to

defraud and alleges that the defendants participated in

the one overall conspiracy, the evidence and the verdicts

App. 18

returned by the jury reveal that if there was any proof of

a scheme or conspiracy whatsoever, it was of separate

schemes and sepurate conspiracies involving some but

fewer than all of the defendants. It is their argument

that this fatal variance was prejudiciai to the defendants

and they cite Kotteakos v. United States, 1946, 328 U.S.

750, 90 L.Ed. 1557, and cases following the rule of Kot-

teakos, such as: Canella v. United States, 9 Cir., 1946, 157

F.2d 470; Brooks v. United States, 5 Cir., 1947, 164 F.2d

142; Daily v. United States, 9 Cir., 1960, 282 F.2d 818;

United States v. Russano, 2 Cir., 1958, 257 F.2d 712;

Rocha v. United States, 9 Cir., 1961, 288 F.2d 545. We

fail to see where Kotteakos can be of any help to the ap-

pellants herein. In that case a number of defendants

were charged with a single general conspiracy to vivlate

the National Housing Act by inducing lending institutions

to make loans which would be offered to FHA for insur-

ance on the basis of false and fraudulent information.

The defendants so charged had no connection with each

other excepting that all had utilized one Brown as a

broker to handle the fraudulent applications. ‘The trial

judge there instructed the jury, mter alia, that only one

conspiracy was charged and that the acts and declarations

of one conspirator bound all. The court held that the

rights of the defendants were thereby substantially preju-

diced and ordered judgment reversed. That is entirely

dissimilar to the facts with which we are here concerned.

The indictment here did indeed charge one overall con-

spiracy. It alleged:

‘“‘That from on or about January 1, 1949, to and

including the date of the filing of this indictment

[January 30, 1962], * * * the defendants herein, de-

vised and intended to devise a scheme and artifice

to defraud and to obtain money and property by

App. 19

means of false and fraudulent pretenses, representa-

tions and promises from The Foundation [Kenny]

and the donors and contributors and prospective con-

tributors to The Foundatiox. as hereinafter more

particularly set forth.’’

In furtherance of this grand scheme, the individual de-

fendants or conspirators were charged with the perform-

ance of certain acts which contributed to their fraudulent

objective; that is, to obtain money from the Kenny Foun-

dation and its contributors through ‘‘false and fraudulent

pretenses, representations and promises’’. They did this

in many different ways, such as letting contracts to the

Koolish companies without competitive bids and at rates

providing large profits to the Koolish companies; making

‘token refunds’’ to the Foundation and not requiring

audits of the Koolish companies’ books; paying Fadell,

who divided with Kline, some $350,000 and charging that

amount as operating costs; concealing the true ownership

of New Century Corporation, one of the Koolish com-

panies; the making of gifts and providing entertainment

to Kline, Fadell and other officers and directors of the

Foundation and charging the costs thereof as costs of

preparing mailings, and in other ways as set forth in the

description of the alleged scheme. It was not necessary

that each conspirator took part in each one of these acts.

If there existed an overall conspiracy into which each

defendant had knowingly entered, then if the acts of one

conspirator contributed to the overall objective, each par-

ticipant was guilty even though he personally had nothing

to do with those particular acts. The overall conspiracy

and use of the mails to defraud is charged to have cov-

ered the period from on or about January 1, 1949, to on

or about January 30, 1962.

aS ae ee eee

App. 20

This court was recently confronted with a similar con-

tention in Hayes v. United States, 8 Cir., 1964, 329 F.2d

209, certiorari denied 377 U.S. 980. Therein seven de-

fendants, all officers or employees of a named labor or-

ganization, were charged with conspiracy to violate 29

U.8.C.A. § 501(c), which provides punishment for anyone

who embezzles, steals or unlawfully abstracts or converts

to his own use money, funds, securities or property of a

labor organization of which he is an officer, ete. Count 1

of the indictmeat charged that the seven defendants con-

spired to unlawfully abstract money and assets from the

union locals. The fraudulent transactions there were of

three categories: (1) Invoice padding and kick-back ar-

rangements; (2) fraudulent automobile repairs on non-

authorized vehicles; (3) fraudulent home improvements

and furnis:ungs. Upon conviction, three of the defend-

ants appealed, claiming inter alia that whereas the indict-

ment there charged a single overall conspiracy, the proof

showed only separate and distinct conspiracies. There,

also, the teaching of Kotteakos was relied on by the ap-

pellants. In denying its application to the facts there

which were comparable to those with which we are here

involved, we relied substantially on Isaacs v. United

States, 8 Cir., 1962, 301 F.2d 706, certiorari denied 371

U.S. 818, 83 S.Ct. 32, 9 L.Hd.2d 58, wherein this court,

again dealing with a similar situation and reliance by the

appellants on Kotteakos, said beginning at page 724:

‘‘A fraudulent scheme and conspiracy may be and

usually is established by circumstantial evidence; by

inferences from the evidence of relationship of the

parties and by overt acts, conduct and other pro-

bative circumstances. Marbs v. United States, 8 Cir.,

250 F.2d 514, 522, 523, cert. den. sub. nom. Sarkis v.

United States, 356 U.S. 919, 78 S.Ct. 703, 2 L.Ed.2d

715; Marz v. United States, 8 Cir., 86 ¥'.2d 245, 250;

/

App. 21

Phelps v. United States, 8 Cir., 160 F.2d 858, 867,

cert. den. sub nom. Peters v. United States, 334 U.S.

860, 68 S.Ct. 1525, 92 L.Ed. 1780; Madsen v. United

States, 10 Cir., 165 F.2d 507, 531. ‘Conspirators

ordinarily do not announce that they have joined

their efforts for the purpose of engaging in or fur-

thering some unlawful svaeme or plan—rather they

are inclined to cover their machinations, thereby cast-

ing upon the prosecution the burden, sometimes dif-

ficult, of establishing the conspiracy, and the overt

acts in consequence thereof, by circumstantial evi-

dence—by actions of the conspirators.’ Blwmenfield

v. United States, 8 Cir., 284 F.2d 46, 53, 54, cert. den.

365 U.S. 812, 81 S.Ct. 693, 5 L.Ed.2d 692.

‘Participation in a criminal conspiracy need not

be proved by direct evidence; a common purpose and

plan may be inferred from a ‘‘development and a

collocation of circumstances’”’.’ Glasser v. United

States, 315 U.S. 60, at p. 80, 62 S.Ct. 457, 469, 86 L.

Kd. 680; where the evidence affords satisfactory proof

that a conspiracy has been formed, ‘but slight evi-

dence connecting a defendant therewith may still be

substantial, and if so, sufficient.’ Galatas v. United

States, 8 Cir., 80 F.2d 15, 24, cert. den. 297 U.S. 711,

06 8.Ct. 574, 80 L.Ed. 998; McDonald v. United States,

8 Cir., 89 F.2d 128, 138, 139, cert. den. 301 U.S. 697,

o7 S.Ct. 925, 81 L.Ed. 1352; Marx v. United States,

supra, 86 F.2d 245, at p. 250. As pertinently stated

by this Court in Phelps v. United State», supra, 160

F.2d 858, at p. 867: ‘Once there is satisfactory proof

that a covspiracy has been formed, the question of a

particular defendant’s connection with it may be

merely a matter of whether the stick fits so natural

into position in the fagot as to convince that it is

part of it.’ Cf. United States v. Cohen, 3 Cir., 197 F.

2d 26, 29; Nye & Nissen v. United States, 9 Cir., 168

F.2d 846, 852, aff’d 336 U.S. 613, 69 S.Ct. 766, 93 L.

iid. 919; Meyers v. United States, 6 Cir., 94 F.2d 433,

App. 22

cert. den. 304 U.S. 583, 58 S.Ct. 1059, 82 L.Ed. 1545.

‘*It is not necessary to support a finding of the

existence of an overall scheme or conspiracy that

each participant knew others involved therein or the

precise part each was playing. Lefco v. United States,

3 Cir., 74 F.2d 66, 68, 69.

‘¢c* * * (T)t is most often true, especially in

broad schemes calling for the aid of many per-

sons, that after discovery of enough to show

clearly the essence of the scheme and the identity

of a number participating, the identity and the

fact of participation of others remain undiscov-

ered and undiscoverable. Secrecy and conceal-

ment are essential features of successful con-

spiracy. The more completely they are achieved,

the more successful the crime. Hence the law

rightly gives room for allowing the conviction

of those discovered upon showing sufficiently the

essential nature of the plan and their connections

with it, without requiring evidence of knowledge

of all its details or of the participation of others.

Otherwise the difficulties, not only of discovery,

but of certainty in proof and of correlating proof

with pleading would become insuperable, and

conspirators would go free by their very in-

genuity.’ Blumenthal v. United States, 332 US.

539, at pp. 556, 557, 68 S.Ct. 248, 256, 92 L.Ed.

154.”’

Judge Holtzhcff, in a case where Kotteakos was relied on,

states the proposition clearly and succinctly in United

Staies v. Sneed, D.C. D.C., 1948, 78 F.Supp. 366 at pages

368 and 369 as follows:

‘‘The answer to the question whether there is a

single conspiracy, therefore, depends on whether

there is a single agreement. There may be an under-

taking to commit one crime or several crimes. If

there is but one agreement, there is but one con-

App. 23

spiracy. A test whether the activities of the defend-

ants constitute a single conspiracy is whether there

is < *~ommon purpose underlying the separate acts,

wheter the same objective is being pursued in each

instance, and whether there is concerted action to

achieve this end. It follows hence that the fact that

the conspirators undertook to commit several crimes

does not necessitate the conclusion that there are

several conspiracies. A conspiracy, such as is charged

in this case, may be likened to a wheel, with the hub

constituting the central figure, the spokes forming its

various branches and ramifications, and all being held

together by the rim, which represents the agree-

ment.’’

In the instant case the court carefully instructed the

jury:

‘‘Proof of a conspiracy does not require an express

or formal agreement, but it must be shown beyond a

reasonable doubt that the members in some way came

to a mutual understanding to try to accomplish a

common and unlawful pian.

‘‘Proof of membership in a conspiracy requires a

showing that the alleged conspirator knowingly and

wilfully participated in the unlawful plan with the

intent to further some purpose of the conspiracy.

‘“To participate knowingly and wilfully means to

participate voluntarily and understandingly in a com-

mon and unlawful plan, and with specific intent to

violate the law.

‘‘One who knowingly and wilfully joins an existing

conspiracy is charged with the same responsibility as

if he had been one of the instigators of it.’’

We are fully satisfied from an examination of the tre-

mendous record here that substantial evidence supports

the jury finding that there was an overall conspiracy to

App. 24

defraud and to obtain money and property from the

Kenny Foundation and its donors, that each of the sppel-

lants cooperated with the others and each knoringly

joined in the conspiracy, and that use of the mails to de-

fraud was established in furtherance of the overall objec-

tive. It is immaterial whether or not there were minor

conspiracies or schemes inside the overall conspiracy to

obtain money from the Kenny Foundation and its con-

tributors through false and fraudulent pretenses, repre-

sentations and promises and that some of the defendants

participated in some of these inner or smaller schemes but

not in all of them.

The appellants argue that because some of the defend-

ants were found guilty by the jury verdicts of some

counts but not of others and that other defendants were

found not guilty of some counts of which other defendants

were found guilty, that the jury must have concluded that

there were separate schemes. That does not necessarily

follow. Here the evidence established one overall scheme

to defraud the Kenny Foundation and its contributors.

Following the overall agreement or scheme, each defend-

ant participated in some but not all of the acts which

furthered the objective of the conspiracy ; that is, to

wrongfully obtain money or property from the Kenny

Foundation and its contributors. The jury could have

found each conspirator guilty of each count in the mail

fraud indictment. It chose not to do so and that was the

jury’s prerogative. Those whose activities contributed

the most toward the objective of the conspiracy were, by

the jury, more heavily tarred with the brush of guilt than

those whose activities contributed, but to a much lesser

extent. It does not follow that because Zimmerman was

found guilty of mail fraud in Count 9 as well as the con-

spiracy Count 16, the jury, to be consistent, had to find

App. 25

him guilty of all mail fraud coants. The court, in sen-

tencing him and placing him on probation after suspend-

ing the sentence, took cognizance of the fact that his par-

ticipation was not major. He was a smaller wheel or

spoke within the all-encompassing rim or overall con-

spiracy. The verdicts of tke jurors merely reflect the

careful consideration they gave to the status of each de-

fendant. It should be no‘ed that Kline was found not

guilty of Counts 5 and 11, whereas the two Koolishes

were found not guilty of Counts 3, 5, 11 and 12. ‘‘Con-

sistency in the verdicts is not necessary. Each count in

an indictment is regarded as if it was a separate indict-

ment.’’ Dunn v. United States, 1931, 284 U.S. 390, 393;

Downimg v. United States, 8 Cir., 1946, 157 F.2d 738.

Conviction on one mail fraud coant will stand even though

inconsistent with acquittal on other counts. ‘‘Whether a

scheme is one conspiracy or several is primarily a jury

question, since it is a question of fact as to the nature of

the agreement.’’ United States v. Crosby, 2 Cir., 1961,

294 F.2d 928, 945, certiorari denied 368 U.S. 984, rehear-

ing denied 369 U.S. 881. We find no merit in the appel-

lants’ second contention.

Appellants’ third claim of error is:

THE COURT FAILED TO SAFEGUARD THE

DEFENDANTS FROM EXCESSIVE PREJUDI-

CIAL NEWSPAPER, RADIO AND TELEVISION

PUBLICITY WHICH DEPRIVED THEM OF A

FATR TRIAL.

Under this claim of error, the appellants first contend

that the trial court should have transferred the case to

another district for trial. Prior to the commencement of

the trial, the appellants moved under Rule 21(a), Federal

Rules of Criminal Procedure, 18 U. S. C. A., for a change

App. 26

of venue, supporting such motion with newspaper clip-

pings from the papers of Minneapolis and St. Paul and

transcripts of radio and television news stories from

Minnesota stations reflecting the publicity which this case

engendered, as well as stories of the trial and conviction

of defendant Kline in the state courts of Minnesota for

the crime of first degree larceny in connection with his

activities as Executive Director of the Kenny Foundation.

The trial judge, in United States v. Kline, D.C. Minn.,

1962, 205 F.Supp. 637, held, in effect, that the motion was

premature. In support thereof he cited from this court

Blumenfield v. United States, 8 Cir., 1960, 284 F.2d 46,

certiorari denied 365 U.S. 812, 81 S.Ct. 693, 5 L.Ed.2d 692,

wherein we said at page 51:

‘Tt is clear that the mere presence of adverse pub-

licity does not per se establish proof of prejudice, or

necessarily establish that a defendant will be unable

to obtain a fair trial within the district. ‘The mere

fact that a juror has read newspaper accounts rela-

tive to a criminal charge is not in itself sufficient

grounds for excusing a juror.’ Finnegan v. United

States, 8 Cir., 204 F.2d 105, 110, certiorari denied 346

U.S. 821, 74 S.Ct. 36, 98 L.Ed. 347. The ultimate

question is whether it is possible to select a fair and

impartial jury, and the proper occasion for such a

determination is upon the votr dire examination.’’

The court thereupon denied the motion, reserving the right

to the defendants to ‘‘renew their motions at the time

of trial if it appears on voir dire that it is not possible

to secure a fair and impartial jury in this P‘strict.’’ 205

F.Supp. at p. 640.

The voir dire examinaticn of the prospective jurors

was conducted by the court. Forty-eight jurors were

called and examined. Of the forty-eight, only seven ex-

oa See Nee Cow ee ee

App. 27

pressed themselves as having some shade of opinion and

they were all excused without being allowed to state such

opinion. Of the sixteen regular and alternate jurors

seated, none had formed an opinion of the guilt or in-

nocence of the accused. With reference to the trial jury,

the instant case can be likened to that which concerned

the Supreme Court in Beck v. Washington, %.62, 369 U.S.

541, 82 8.Ct. 955, 8 L.Ed.2d 98, wherein the court said at

page 556 of 369 U.S.:

“** * * Of the 52 [prospective jurors] so examined,

only eight admitted bias or a preformed opinion as

to petitioner’s guilt and six others suggested they

might be biased or might have formed an opinion—

all of whom were excused. Every juror challenged

for cause by petitioner’s counsel was excused; in ad-

dition petitioner was given six peremptory challenges,

all of wluch were exercised. Although most of the

persons thus selected for the trial jury had been ex-

posed to some of the publicity related above, each in-

dicated that he was not biased, that he had formed

no opinion as to petitioner’s guilt which would re-

quire evidence to remove, and that he would enter the

trial with an open mind disregarding anything he had

read on the case.

‘‘A study of the voir dire indicates clearly that

each juror’s qualifications as to impartiality far ex-

ceeded the minimum standards this Court established

in its earlier cases as well as in Irvin v. Dowd, 366

U.S. 717 (1961), on which petitioner depends. There

we stated:

‘“**To hold that the mere existence of any pre-

conceived notion as to the guilt or innocence of

an accused, without more, is sufficient to rebut

the presumption of a prospective juror’s impar-

tiality would be to establish an impossible stand-

ard. It is sufficient if the juror can lay aside his

impression or opinion and render a verdict based

on the evidence presented in court.’ ”’

App. 28

It should also be observed here that this trial took place

approximately three years after public knowledge ot the

Minnesota Attorney General’s investigation and two

years following defendant Kline’s conviction for larceny

in the state court on matters arising out of his activity

as Executive Director of the Foundation. The shock of

the earlier exposure and the state trial could be expected

to have become somewhat dissipated in the years that fol-

lowed.

Appellants would draw comfort from Rideau v. State

of Louistana, 1963, 373 U.S. 723, 83 S.Ct. 1417, 10 L.Ed.

2d 663. There is no comparability. There a motion for

a change of venue from one parish to another was denied.

It appeared that the parish wherein the robbery, kidnap-

ping and murder had been committed and where the trial

was held had a population of 150,000. The residents of

the parish had been exposed at least three times to a

televised spectacle of the defendant confessing to robbery,

kidnapping and murder in an examination conducted by

the sheriff and state troopers in jail without the presence

of defendant’s counsel. Three members of the jury, which

convicted the defendant, had stated on votr dire that they

had seen and heard the defendant’s televised interview

with the sheriff on at least one occasion. The court stated

at page 726 of 373 U.S.:

‘<* * * For we hold that it was a denial of due

process of law to refuse the request for a change of

venue, after the people of Calcasieu Parish had been

exposed repeatedly and in depth to the spectacle of

Rideau personally confessing in detail to the crimes

with which he was later to be charged. For anyone

who has ever watched television the conclusion can-

not be avoided that this spectacle, to the tens of thou-

sands of people who saw and heard it, in a very real

peach

App. 29

sense was Rideau’s trial—at which he pleaded guilty

to murder. Any subsequent court proceedings in a

community so pervasively exposed to such a spectacle

could be but « hollow formality.”’

We have no such situation existing in the instant case and

Rideau is no support for appellants’ contention. Addi-

tionally, a change of venue is generally directed to the

sound discretion of the trial court. Connelly v. United

States, 8 Cir., 1957, 249 F.2d 076, 584-5; Finnegan v.

United States, 8 Cir., 1953, 204 F.2d 105, rehearing denied

May 28, 1953; Stroud v. United States, 1919, 251 U.S. 15,

40 8.Ct. 50, 64 L.Ed. 103. See Blumenfield v. United

States, 8 Cir., 1960, 284 F.2d 46, certiorari denied 365 US.

812, 81 S.Ct. 693, 5 L.Ed.2d 692; Kilgore v. United States,

8 Cir., 1963, 323 F.2d 369, certiorari denied 376 U.S. 922,

84 S.Ct. 681, 11 L.Ed.2d 617; Bianchi v. United States, 8

Cir., 1955, 219 F.2d 182, 191, certiorari denied 349 U.S.

915, 75 S.Ct. 604, 99 L.Ed. 1249, rehearing denied 349 U.S.

969, 75 S.Ct. 879, 99 L.Ed. 1290. We find that the trial

court did not abuse its discretion in denying the motion

for a change of venue herein.

The next claim under this heading is that the voir dire

examination of the jurors was grossly inadequate. We

have examined the record in detail as well as having given

consideration to Judge Devitt’s published opinion denying

motions for new trial, United States v. Kline, D.C. Minn.,

1963, 221 F.Supp. 776, 782-3. Instead of abuse of discre-

tion as charged by these appellants, we find that the voir

dire examination of the prospective jurors was conducted

in a meticulously fair and a proper manner, that the trial

judge was ever mindful of the rights and privileges of

the appellants and that he sought to the very greatest de-

gree to obtain for the trial of this case only fair, unbiased

and conscientious jurors. We believe he succeeded.

App. 30 /

The third charge under the general heading that the

defendants were deprived of a fair trial is that the court

failed to safegt-ard defendants from prejudicial publicity

during the course of the trial. At the outset, Judze

Devitt spoke to the prospective jurors as follows:

‘‘T want to start out by instructing yeu all, those

of you who have just taken this oath and those of you

who have been called on the jury panel, not to read

anything about this case or this matter or the people

involved in it in the newspapers or to listen to any

zadio programs about it, er to observe any television

programs about it, not to talk with anybody about it,

and not to permit anybody to talk with you about it,

and not to talk among yourselves about it.

‘*Now, I think you can understand better the im-

portance of that instruction and need for you to fol-

low it religiously if I tell you the reason for it.

**In a court of law, a person is found guilty or not

guilty of a crime by a jury on the basis of the evi-

dence that is presented in the court room, by docu-

ments that are presented and by the testimony of

witnesses who take the stand.

* * eo

‘se © * the point of it is that the things you hear

in this room are regulated under court supervision,

the things that you may properly hear that will not

be prejudicial to these defendants. Of course, news-

paper accounts and radio and television accounts

sometimes are not always accurate and they may con-

tain material which is not a correct reflection of what

is actually going on in the courtroom. Sometimes

newspaper accounts are headed by headlines whica

probably are not always reflective of the true story.”’

The jury was not to be confined—a matte- which rests

squarely within the sound discretion of the trial judge.

owe -——— |

App. 31

After the twelve jurors and four alternates had been

chosen and sworn, the trial judge again stated:

*“*I wish ty emphaize to you all a point which you

have heard me talk about two or three times already

today, and I ca: ‘t emphasize it too much, and that is

the importance of your not talking with anybody about

this case at any time that you are serving as jurors—

yor are permitted to go home, of course, at night—

or permit anybody to talk with you about the case;

that you do not read any newspaper accounts about

this trial or about this whole matter: listen to any

radio programs about it or observe and listen to any

television programs about it.

**Now, I’m afraid I’m going to have to repeat that

admonition time and time again, so much so that you

will maybe get tired of hearing it, but the fact that I

do repeat it and will repeat it probably indicates its

importance to you, importance far more reaching than

you can maybe understand at this time.”’

The record indicates that during the long tcial the court

admonishea the jury against reading newspapers and

listening to the radio and watching television broadcasts

soine 87 times. On the last day of the trial the court ex-

amined the jurors individually and separately as to

whether or not they had complicd with and had been

faithful to his admonitions. Without exception each juror

and alternate indicated that he had complied with the

court’s instructions. Thereafter Judge Devitt stated:

‘*The Court: The Court would like to observe from

the demeanor ind answers that were given to these

questions b, ch juror that the Court is satisfied

they are hom t in their answers and that they have

been faithful in obeying the instructions of the Court

constantly given not to permit any of these outside

influences to influence them in ans way.

App. 32

‘*Are there, any questions or observations?

‘‘Mr. Jenner: Your Honor pleases, in this matter

about the Indictment for the jury—’”’

No objection was made then to the jury and the case was

subsequently submitted to them for their determination.

The record indicates the most scrupulous care on the part

of the trial judge and also the seeming impartiality and

complete honesty on the part of the jurors and alternates.

We find that the appellants were not deprived of a fair

trial by the publicity and that this alleged error is com-

pletely groundless.

The fourth contention of error is:

DEFENDANTS WERE GRIEVOUSLY PREJU-

DICED BY FADELL’S MIDTRIAL PLEA OF

GUILTY. THE COURT ERRED WHEN IT PER-

MITTED FADELL TO CHANGE HIS PLEA,

WHEN IT DENIED DEFENDANTS’ SEVERAL

MOTIONS MADE AT THAT TIME, AND WHEN

IT INFORMED THE JURY THAT FADELL HAD

PLEADED GUILTY.

On April 8, 1963, after three weeks of trial, defendant

Fadell moved the court to change his plea from not guilty

to guilty. After deliberation and discussion with the at-

torneys on both sides, the court, on April 10, 1963, out of

the presence of the jury, and after ascertaining that

Fadell’s desire to plead guilty was voluntary and that he

was competent to make it, accepted a plea of guilty to

Count 6 of the indictment. Whereupon the trial court

called the jury and instructed as follows:

‘‘Members of the jury, as you observe, Mr. Fadell

isn’t here today, nor is his counsel, Mr. Simpson. I

advise you that this morning at 9:30 Mr. Fadell moved

the Court for permission to withdraw his plea of not

App. 33

guilty to the charges in the Indictment and to make a

piea of guilty to one of the Counts in the Indictment,

Count VI, and the Court, after being satisfied that he

is competent to make such a plea and did it volun-

tarily, granted him permission, accepted his plea of

guilty. So the case as to Mr. Fadell is no longer

your concern.

‘‘The matter will go on as to the other defendants.

I emphasize to you the fact that Mr. Fadell has pled

guilty is not to be accepted by you as evidence of the

fact that these other defendants are guilty. It is not

to be viewed by you as any kind of persuasive evi-

dence or showing that the others are guilty. You

may not reason or speculate that if Mr. Fadell pled

guilty to one count, then the other defendants might

well be guilty of that count or of other counts.

‘‘The guilt or the innocence of each of these other

defendants must be based solely upon the evidence

which has been presented and will be presented in

this courtroom, and upon nothing else.’’

Thereafter the court, in the presence of the jury, stated

that ‘‘the motions which counse! made in chambers’’ the

day before would be considered as having been repeated

in open court and that they were denied. After some dis-

cussion with reference thereto, the court again admon-

ished the jury as follows:

‘‘Members of the jury, I meant to say right after

I told you about this happening this morning, that I

hope you will be particularly careful about these ad-

monitions now, because I suppose there will be mat-

ter in the newspapers telling about this, aad on the

radio and television. While I suppose it may be a

practical impossibility for you to avoid seeing a head-

line or maybe catching a glimpse of something on

television or the radio, I hope you will be persistent

in following the rule in not being attentive or listen-

ing to those things.

App. 34

‘‘As I have said to you so many times, it’s of great

importance, and later on, at some future time, I will

explain in greater detail why it is. I hope you will

persist in your admirable obedience to these admon-

itions.’’

At the specific request of the remaining defendants, the

court in its general instructions at the close of the case,

repeated the admonition as to Fadell’s plea. It is the

contention of appellants that ‘‘while purporting to be an

active defendant, he [Fadeli] was, in fact, a spy in the

defendants’ camp. Thus, the United States Attorney ad-

mitted that, subsequent to the indictment he and members

of his staff had many conferences with F'adell and Fadell

had delivered to him documents, records ard other evi-

dence.’’ They insist that the United States Attorney had

a ‘‘eall’’ on Fadell under which he could and did select

the time most propitious to his case and most prejudicial

to the defendants for the announcement of F'adell’s plea.

The trial court handled the matter in a manner approved

by this court in Wood v. United States, 8 Cir., 1960, 279

F.2d 359, where much the same thing occurred. In that

case three of the defendants, after the trial had com-

menced, withdrew their pleas of not guilty and entered

pleas of guilty, this being outside the presence of the

jury. Thereafter the court advised the jurors of what

had cecurred and admonished them in much the same

manner as Judge Devitt has done in the instant case. The

late Judge John Sanborn, speaking for this court, said at

page 363:

‘We think the trial court did what it should have

done, when it advised the jury panel that the defend-

ants Brown and Nair had entered pleas of guilty to

Count I of the inctctment, and as to the effect of the

pleas upon other defendants. We also approve the

statement of the court to the jury with respect to the

App.35

entry of pleas of guilty by Kawell, Neudeck and Bar-

ham to Count I during the trial. See, in this con-

nection: Davenport v. United States, 9 Cir., 260 F.24

591, 596; Holmes v. United States, 8 Cir., 134 F.2d

125, 129-130; Kelling v. United States, 8 Cir., 121 F.

2d 428, 429. The court did not err in denying the

motion for a mistrial based on the fact that the pleas

of guilty to Count I by three of the defendants were

entered after the trial commenced; nur did it err in

not again referring to these guilty pleas, or their ef-

fect, in its final instructions to the jury.’’

In United States v. Crosby, 2 Cir., 1961, 294 F.2d 928, the

Court of Appeals for the Second Circuit was confronted

with a similar problem. Therein that court stated at

page 948:

‘“‘Tt was not error to refuse to grant a mistrial

when McCarthy pleaded guilty. Certainly the guilty

plea cannot be used as evidence against the remain-

ing defendants, Babb v. United States, 5 Cir., 1955,

218 F.2d 538; United States v. Hall, 2 Cir., 1950, 178

F.2d 853; United States v. Toner, 3 Cir., 1949, 173 F.

2d 140; but see Grunberg v. United States, 1 Cir.,

1906, 145 F. 81, 86. But the federal courts have uni-

formly held it is not error, if proper cautionary in-

structions ar: given, for the jury to be informed dur-

ing trial that one or more defendants have pleaded

guilty, or even for the jury to be present when the

pleas are entered. Wood v. United States, 8 Cir.,

1960, 279 F.2d 359; Davenport v. United States, 9

Cir., 1958, 260 F.2d 591; Richards v. United States.

10 Cir., 1951, 193 F.2d 554; Schhefer v. United States,

3 Cir., 1923, 288 F. 368.”’

United States v. Aronson, 2 Cir., 1963, 319 F.2d 48, in-

volved multiple charges of mail fraud as well as con-

spiracy. During trial three defendants withdrew their

pleas of not guilty and entered pleas of guilty. The jury

App. 36

was informed and also admonished properly. Citing United

States v. Crosby, supra, and other cases, the court stated

at page 52:

‘¢* * * no error can be attributed to the trial court’s

informing the jury of the guilty plea. Its instruc-

tions to the jury conformed both adequately and ac-

curately with the instructions approved by appellate

courts in similar situations. The trial court adhered

to proper practice in cautioning the jury by saying,

‘Let me point out that the fact that the Kimvalls

pleaded guilty is no proof whatsoever of the guilt of

the two defendants who are on trial and that must

be put out of your mind in determining the guilt or

innocence of these two defendants, the Aronsons.’ ”’

As to the charge that Fadell in effect was ‘‘a spy in the

defendants’ camp’’ and that the United States Attorney

had a ‘‘call’’ on him, the trial court, after careful inquiry,

found that counsel for Fadell had advised the other at-

torneys representing the co-defendants months before the

trial that Fadell’s course of action was uncertain and that

it was not unlikely that he would change his piea; that the

night before the trial started all counsel were again ad-

vised of substantially the same facts, so that the possibil-

ity of Fadell’s changing his plea from not guilty to guilty

was something of which his co-defendants and their coun-

sel were apprised. The trial judge’s statement with ref-

erence to Fadell’s change of plea as found beginning at

page 787 of 221 F.Supp. indicates the care and caution he

used in making inquiry and becoming informed of all mat-

ters surrounding Fadell’s change of plea. We think he

could have done no more to see that the appellants re-

ceived a fair trial before an open-minded and conscientious

jury.

App. 37

Appellants attempt to make something of the fact that

the United States Attorney indicated that Fadell would

be called as a witness if the court accepted his guilty plea

and that he was not so called. The point has no sub-

stance, particularly when the record indicates that several

times following the acceptance of Fadell’s plea of guilty

or his indication that he intended to plezd guilty, appel-

lants’ counsel repeatedly made threats to move for a mis-

trial in the event Fadell was called. We find no sig-

nificance in the matter and no prejudice to the appellants.

Appellants’ fifth claim of error is:

THE MISCONDUCT OF THE UNITED STATES

ATTORNEY THROUGHOUT THE TRIAL DE-

PRIVED DEFENDAN'S OF A FAIR TRIAL.

Under this general heading it is first insisted by the ap-

pellants that:

‘‘Many times during the trial various witnesses,

particularly defendants or their employees, were

asked questions in which the United States Attorney

insinuated in detail that certain conspiratorial meet-

ings had been held, that prejudicial and incriminating

admissions had been made by various defendants or

conversations had been had by or with them or in

their presence, and that incriminating acts had been

committed.

‘‘In each instance the witness denied the accusation

and insinuation. The United Siates Attorney did not

' thereafter offer any testimony or evidence to prove

any of the alleged facts so carefully and prejudicially

staged and insinuated.”’

A consideration of the transcript may well indicete over-

zealousness on the part of the United States Attorney but

if it does and if it amounted to misconduct on his part, we

App. 38

think that it was well taken care of by the experienced

and able trial judge who, at the specific request of the de-

fendants, instructed the jury, iter alia:

‘‘And now I have a:series of instructions in which

I wish to call your attention to certain comments and

statements made by the prosecutor concerning which

no evidence was subsequently offered, and the purpose

of this instruction is to invite your attention to those

events, and to caution you and instruct you that you

are to disregard any inferences that might arise from

Mr. Lord’s reference to these matters.

‘*You will recall, for instance, that Mr. Lord was

interrogating A. L. Koolish, and he inferred that a

meeting took place in Chicago in February of ’52,

either the fall of 52 or sometime in ’52, attended by

Kline, Fadell and Koolish. Allegedly discussions took

place about Kline’s paying his income tax on money

received by him from Fadell. The inference was that

this group made a trip to Palm Springs, California,

and remember there was a big eight-passenger Cadillac

automobile, allegedly at that time the inference was

that certain conversations took place between Mr.

Koolish, Mr. Kline and Mr. Fadell concerning the

Fadell payments to Kline. Mr. Koolish denied any

such meetings in Chicago. He denied a recollection

of a trip to Palm Springs or that any such conversa-

tions inferred by Mr. Lord took place.”’’

The court thereupon carefully pointed out the names of

other witnesses who had been asked questions, who had

denied making the statements :ontained in the questions

cr doing the things referred to therein, and that the gov-

ernment had offered no evidence thereafter to establish

that the events or conversations actually did take place.

The court then continued:

‘“‘Those questions, statements, inferences with re-

spect to these matters are not evidence, and you must

disregard them in reaching your verdict.

App. 39

‘*In the course of his examination of Mr. A. L.

Koolish, Mr. Lord asked questions of the witness in

which he exhibited to the witness in our presence

four New Century C~-rporation checks, and by his

questions to the witness, he inferred that the checks

were payable to Mr. Fadell and covered monies paid

to Mr. Fadell for ulterior purposes.

‘‘None of these checks was received in evidence.

“hey were not identified or offered, and no testimony

with respect to them was received.*

‘‘They, too, are not evidence, and neither they nor

any inference suggested with respect to them is to

be considered by you in reaching your verdict.

‘“You will recall that when Mr. Lord was examining

Mr. David Koolish, he put questions to him in which

he inferred that Mrs. Duerr told Mr. Koolish that one

one-half million Kenny Foundation contributor list

names had been used in the Fall mass mailings in ’56,

07 and ’58. Mr. David Koolish denied any such con-

versation had ever taken place. He denied that the

Kenny Foundation contributor list names had been

used in any of those years.

‘“‘These questions of Mr. Lord and the inferences

inherent in them must be disregarded by you in reach-

ing your verdict.”’

It is also charged that the United’ States Attorney’s

rebuttal argument was prejudicial. We have examined

the record with reference to the claimed improprieties on

the part of the United States Attorney, not only in his

questions but in his requests for stipulations made in

front of the jury and in his rebuttal argument and are

8 As an indication of the care with which the jurors followed

the court’s instructions, it should be noted that they found all

defendants not guilty of Count 11 which apparently involved one

of the checks referred to by the court.

App. 40

convinced that the presiding judge had the entire matter

well in hand and that whenever he found it necessary to

admonish counsel or to instruct the jury, he did so and

that he achieved the elimination of any possible prejudice

thereby. See Judge Devitt’s treatment of the questions

beginning at page 790 of 221 F.Supp. Other claims of

misconduct or impropriety on the part of the United

States Attorney have been given consideration and found

not to be sabstantiated by the record.

Appellants’ sixth and last claim of error is:

THE COURT ERRED IN THE ADMISSION OF

EVIDENCE.

The court admitted testimony of the Koolish companies’

business dealings with other charitable organizations such

as The National Foundation for Asthmatic Children, Dis-

abled American Veterans, Father Flanagan’s Boys Town,

and Pine Ridge Country School. This was objected to as

irrelevant and immaterial to the issues in this case and

that it would prejudice the defendants. The testimony

was admitted on the theory that similar acts of the appel-

lants indicated their intent, knowledge and the absence

of any mistake or accident in their method of operating

their solicitations for charitable organizations, and the

court gave full and accurate instructions to the jurors

thereon. We think the admissions were entirely proper

and that no error was committed. Kansas City Star v.

United States, 8 Cir., 1957, 240 F.2d 643, 650, certiorari

denied 354 U.S. 923, 77 S.Ct. 1381, 1 L.Ed.2d 1438; Good-

man v. United States, 8 Cir., 1960, 273 F.2d 853, 857:

Moses v. United States, 8 Cir., 1961, 297 F.2d 621, 624.

Under this heading it is also claimed that certain gov-

ernment charts and summaries were misleading, specula-

tive and erroneously admitted into evidence over objec-

App. 41

tion. The charts and summaries referred to were based

upon substantial evidence introduced by the government

through its own witnesses or in cross-examination of the

defendants’ witnesses. All were subject to cross-exam-

ination or re-examination by defendants’ counsel. The

jury was very carefully and fully instructed as to their

use. We find no error in their receipt. The admission of

charts and summaries is a matter which rests largely

within the sound discretion of the trial court and its ac-

tion in receiving the disputed charts and summaries may

not be reversed by an appellate court unless such discre-

tion be abused. Franano v. United States, 8 Cir., 1960,

277 F.2d 511, 515, certiorari denied 364 U.S. 828, 81 S.Ct.

68, 5 L.Ed.2d 57, rehearing denied 364 U.S. 906, 81 S.Ct.

231, 5 L.Ed.2d 199; Blackwell v. United States, 8 Cir.,

1957, 244 F.2d 423, 429, certiorari denied 355 U.S. 838, 78

S.Ct. 49, 2 L.Ed.2d 51; Kampmeyer v. United States, 8

Cir., 1955, 227 F.2d 313, certiorari denied 351 U.S. 904,

76 S.Ct. 706, 100 L.Ed. 1441; Leeby v. United States, 8

Cir., 1951, 192 F.2d 331; Gartepy v. United States, 6 Cir.,

1951, 189 F.2d 459, 462.

This long and hard-fought case extended over a period

of more than ten weeks. It presented a number of difficult

questions for counsel and for the presiding judge. We

have examined each claimed error and are convinced, how-

ever, that there was no prejudice to the appellants through

any of the trial rulings, that the case was tried with

exemplary care by Judge Devitt, that appellants all had

a fair trial, and that no grounds for reversal or retrial

exist.

Affirmed.

App. 42

APPENDIX B

Opinion and Order of United States District Court for

the District of Minnesota rendered and entered. June 4,

1962 denying petitioners’ motion to transfer:

This is a mail fraud prosecution against 7 defendants—

4 of whom live in the Chicago area, and 3 of whom live

in the Minneapolis-St. Paul area.*

The indictment alleges a scheme to defraud and the use

of the mails in furtherance of it. A conspiracy is also

alleged.

The 4 Chicago defendants move for a transfer of the

case to the Northern District of Illinois, or to some other

District, under Rule 21(a) of the Federal Rules of Prac-

tice and Procedure, 18 U.S.C.A., claiming that because of

preiudice against the defendants in the District of Minne-

sota they cannot obtain a fair and impartial trial here.

Defendant Kline joins in the motion. The other two Min-

nesota defendants have not opposed, but have not joined,

in the motion.

In support of its motion, the moving defendants present

a larsre number of newspaper clippings from the Twin City

newspapers, and offer transcripts of radio and television

news stories from Minnesota stations, which reflect the

extensive publicity all of these defendants have received

*The Chicago defendants are Abraham Koolish, David F.

Koolish, John B. Carnell] and Philip G. _Rettig. They operate a

mail solicitation business.

Marvin Kline is the former Executive Director of the Eliza-

beth Kenny Foundation, a charitable corporation which aids

victims of infantile paralysis.

Fred Fadell was Public Relations Director, and J. George Zim-

merman was Auditor, of the Kenny Foundation.

App. 43

in connection with the investigations of the matter, their

indictment for the instant offense by the Federal Grand

Jury, the trial and conviction of Kline in the Minnesota

State Court for the crime of first degree larceny, the

claimed previous violations of the law by the Chicago

defendants in connection with mail solicitations for a war

veterans organization, and other associated events.

The defendant Kline allegedly entered into illegal agree-

ments with some or all of the other defendants by which

large amounts of money ended up in his pocket and in

those of his co-defendants to the detriment of the Kenny

Foundation and its contributors. It is claimed that an

exorbitant percentage of the charitable contributions col-

lected for the Kenny Foundation by the Chicago defend-

ants was charged as expenses for the collections.

Briefly stated, the alleged scheme to defraud was that

the defendants would gain and hold control and possession

of a list of Kenny Foundation contributors for the benefit

of the Chicago defendants by means of bribery of Kenny -

Foundation personnel, and by concealing from the Kenny

Foundation Directors and contributors the true cost of the

mail fund-raising operations and the true identities of the

operators.

There is no question in my mind that the events in con-

nection with the Kenny Foundation in the last two years

have been a fertile source of publicity for the newspapers

and fer the radio and television stations in the Minnesota

area, But the mere fact that there has been much pub-

licity does not mean that the defendants cannot get a fair

trial here. And of course the only way to determine

whether or not a fair and impartial jury can be picked in

/ ‘Minnesota is to start questioning prospective jurors to

/ actually see the extent of prejudice, if any, ‘against these

4 defendants.

App. 44

The moving defendants urge that two recent decisions

of the United States Supreme Court furnish strong sup-

port for the motion to transfer this matter to Chicago,

or elsewhere, for trial. The cases are, Irvin v. Dowd, 1961,

366 U.S. 717, 81 S.Ct. 1639, and Janko v. United States,

366 U.S. 716, 81 S.Ct. 1662.

In Irvin v. Dowd, certain sensational publicity permeated

a small town in Indiana in which a trial for murder was

held. The voir dire examination indicated thai 90% of

370 prospective jurors and 2/3 of those seated in the jury

had an opinion as to guilt, and the aceused unsuccessfully

challenged for cause several persons accepted on the jury.

It appears that Irvin is a mnique case, and the trial judge,

when faced with the overwhelming evidence of prejudice

upon voir dire, should have then transferred the case else-

where or granted a continuance. It is not likely that, at

the contemplated time of trial, in the Fall of 1962, any

similar widespread prejudice will be manifest here, not-

withstanding the defendant Kline is a well-known person

who served as Alderman and Mayor of the City of Minne-

apolis, and even though his claimed criminal activities und

those of his fellow defendants have been the subject of a

great amount of publicity. At all events, that determina-

tion cannot be accurately made until voir dire examination

is commenced.

The other Supreme Court case, Janko v. United States,

represents a reversal of a holding of the Court of Appeals

of the Eighth Circuit, 281 F.2d 156. But it is a short

pro forma opinion based on a confession of error by the

then Solicitor General. That case involved a trial in the

Eastern District of Missouri. A reading of the decision

of the Court of Appeals, wuich recites the action of trial

judge Weber in dealing with the claimed prejudice of the

App. 45

jurors, indicates to me that tne trial judge did everything

that was reasonable or possible under the circumstances,

and that he committed no error in proceeding as he did.

The Court of Appeals affirmed his actions. The Supreme

Court reversed solely on the ‘‘say-so’’ of the Solicitor

General that the trial judge committed error. In effect,

this confession of error by the Solicitor General reversed

the Court of Appeals. This is a rather unusual course of

events. Be that as it may, the Janko case does not con-

stitute authority for our granting a transfer to another

District where it has not yet been determined by an exam-

ination of prospective jurors that a fair trial cannot be

held in the Distriet of Minnesota.

It is interesting to observe that the case of Irvin v. Dowd,

supra, was cited by the Supreme Court of the United States

on May 14, 1962 in the case of Beck v. Washington, 30 Law

Week 4328. This decision affirmed the decision of the

Supreme Court of Washington which affirmed the action

of a Washington State trial judge in denying a motion for

transfer. The defendant, former Teamster Union Presi-

dent Beck, was charged with embezzlement. He claimed

that he could not get a fair trial in the State of Washing-

ton because of extensive adverse publicity. In that case

the Supreme Court particularly examined the voir dire

record and concluded that the qualifications of the jurors

in that case exceeded those required by the s*andard enun-

ciated in Irvin v. Dowd, as iollows:

‘*To hold that the mere existence of any preconceived

notion as to the guilt or innocence of the accused,

without more, is sufficient to rebut the presumption of

a prospective juror’s impartiality would be to estab-

lish an impossible standard. It is sufficient if the

App. 46

juror can lay aside his impression or opinion and

render a verdict based on the evidence presented in

court.’’

The Beck case belies the claimed broad sweep of Irvin v.

Dowd urged by the moving defendants.

The Court has examined many decisions under this Rule

cited in 18 U.S.C.A., Rule 21(a), and in Barron & Holtzoff,

Federal Practice and Procedure, Sec. 2091, including, par-

ticularly U. S. v. Florio, 13 !.R.D., 296; U. &. v. Dioguardi,

20 F.R.D. 33; Shockley v. U. S., 166 F.2d 704; Bianchi v.

U. §., 219 F.2d 182; U. 8S. v. Moran, 194 F.2d 623; and U. 8.

v. Bletterman, 2.9 F.2d 320, and I am satisfied from a

reading of these decisions that pre-trial motions for trans-

fers to other Districts for trial under Rule 21(a) should

be granted sparingly, in exceptional cases requiring such

anusual action, and then only when it appears with fair

certainty that it is unlikely that a fair trial can be had in

the District where the indictment is returned. JU. S. v.

Florio, 13 F.R.D. 296, seems to be such a case.

Our Court of Appeals in the Eighth Circuit has stated

the principle to be that:

‘‘The ultimate question is whether it is possible to

select a fair and impartial jury, and the proper occa-

sion for such a determination is upon the voir dire

examination.’’ Blemenfeld v. U. S., 284 F.2d 46, at p.

51.

The motions for transfer to another District for trial

are denied; but the defendants may renew their motions at

the time of trial if it appears on voir dire that it is not

possible to secure a fair and impartial jury in this District.

‘App. 47

APPENDIX C

Opinion and Order of the United States District Court

for the District of Minnesota rendered and entered Sep-

tember 10, 1963 denying petitioners’ post trial motion:

In this mail fraud prosecution, the defendants have

moved for a new trial and for judgment of acquittal fol-

lowing the return of jury verdicts against them. The

seven named defendants were charged in a 16-Count in-

dictment with mail fraud and conspiracy. In the course

of the trial, one of the defendants, Fred Fadell, pled guilty,

and the case against another defendant, Philip G. Rettig,

was severed because of his incapacitating illness during

the trial. The verdicts against the remaining five defend-

ants are detailed in the footnote."

Defendant Marvin L. Kline served as Alderman and

Mayor of Minneapolis. He was the first President, and

later Fxecutive Director, of the Sister Elizabeth Kenny

Foundation. The Foundation is a charitable organization

established by the late Sister Elizabeth Kenny, noted

Australian nurse. She originated a different treatment

for victims of infantile paralysis. The Foundation head-

quartered in Minneapolis and, during the time pertinent,

operated a hospital and training facilities for nurses and

doctors in the Kenny method of treatment.

Defendant A. L. Koolish now lives in Los Angeles, and

his son, David F. Koolish, and John B. Carnell live in the

Chicago area. The three of them have long been active

1The jury found ali of the remaining defendants, Kline, A. L.

Koolish, David Koolish, Carnell and Zimmerman guilty of con-

spiracy as charged in the 16th Count of the indictment. It found

Kline guilty of 9 Counts of mai! fraud; A. L. Koolish, 7 Counts

of mail fraud; David Koolish, 7 Counts of mail fraud; Carnell, 8

Counts of mail fraud; and Zimmerman, i Count of mail fraud.

App. 48

in the operation of mail solicitation concerns, particularly

in the solicitation of funds for charitable organizations.

Philip G. Rettig, as aga»st whom the case was severed

in midtrial, served for a time as President of one of the

Chicago mail solicitation companies operated by the Koo-

lishes and Carnell.

Fred Fadell, who pled guilty in the course of the trial,

served as a public relations director for the Kenny Foun-

dation.

George Zimmerman was the Foundation’s Auditor.

The Sister Elizabeth Kenny Foundation, established in

1943, grew into a substantial and nationally-known organ-

ization. Its solicitations for funds were conducted on a

nationwide basis, but principal interest and financial sup-

port prevailed in the midwest area surrounding the State

of Minnesota, the Detroit, Michigan area, and to some ex-

tent along the Eastern Seaboard. The Kenny method for

the treatment of the victim of infantile paralysis, while

first opposed by medical doctors, later was recognized as a

very beneficial treatment procedure, and became generally

accepted bv the medical profession and by the public.

The alleged scheme to defraud set out in the indictment

and sought to be proved by the government, was that the

defendants would gain and hold possession of the list of

the Kenny Foundation contributors for the benefit of the

Chicago-based defendants, Koolish, Koolish, Carnell and

Rettig, by means of bribery of Kenny Foundation Person-

nel, particularly Executive Director Kline and Public Re-

lations Director Fadell, and would conceal from the Kenay

Foundation Board of Directors and contributors the true

cost of the mail fund operations, and the true identities

of the operators.

R

App. 49

The government sought to show at the trial, in part,

that: the Chicago-mail solicitation group secretly used the

Kenny contributor list for their own benefit by selling the

names for use in other charity fund drives; the Chicago

defendants bribed Kline and Fadell with large secret pay-

ments each year; the cost to the Kenny Foundation in con-

ducting these mail fund campaigns was exorbitant and

only a small proportion of the contributions made by the

public was actually returned to the Kenny Foundation;

the financial operations of the Kenny Foundation were in-

tentionally concealed, or at least not fully and accurately

reflected, in the financial statements that were made avail-

able to the public, and to governmental and community

organizations concerned with policing and regulating

charity fund drives.

The defense presented by the defendants was, in part,

that: there was no impropriety in any of their conduct;

the relationship between the operators of the mail solici-

tation companies and the Kenny Foundation was a regular

business transaction; no money was paid to Kline and

Fadell as a bribe; the lists were not improperly used or

sold to other charity fund solicitation organizations; the

mail fund solicitors actually rendered a beneficial and

substantial service to the Kenny Foundation in that of

$19,000,000 received from the mail fund campaigns,

$8,000,000 of it was netted to the Foundation; the Koolish

fund solicitors in effect underwrote the cost of these cam-

paigns by guaranteeing that the Kenny Foundation would

incur no obligation for the conduct of campaigns which

turned out to be unprofitable.

We come now to a consideration of the motions for new

trial, for judgment of acquittal, and the several motions

for mistrial made by the five defendants.

App. 50

The motions are based on several points. The defend-

ants Koolish, Koolish and Carnell have alleged 79 separate

grounds for a new trial. Many of them are repetitious.

All of the points raised in each motion have been consid-

ered. The more important ones are grouped together and

afforded detailed treatments herein.

DENIAL OF THE MOT'ON FOR CHANGE

OF VENUE

The first of these grounds deals with the claimed failure

of the defendants to receive a fair trial because they were

denied a change of venue.

Prior to the commencement of the trial in March of

1963, the four Chicago-based defendants moved for a

transfer of the case to the Northern District of Illinois,

or to some other District, under Rule 21(a), Federal Rules

of Criminal Procedure, 18 U.S.C.A., claiming that because

of prejudice against the defendants in the District of

‘Minnesota caused by adverse publicity they could not ob-

tain a fair and impartial trial here. The defendant Kline

joined in that motion.

In support of the motion the defendants presented a

large number of newspaper clippings from the Minneapolis

and St. Paul newspapers and offered transcripts of radio

and television news stories from Minnesota stations which

reflected extensive publicity involving all of these defend-

ants in connection with the investigations of the matter by

the Attorney General of Minnesota, their indictment for

the federal offense by the Grand Jury in Minneapolis, the

trial and conviction of Kline in the Minnesota State Court

for the crime of first degree larceny, and the claimed pre-

vious violations of the law by the Chicago defendants in

connection with mail solicitations for a war veterans or-

ganization, and other associated events.

App. 51

The defendants’ arguments for change of venue were

fully considered and denied. The Court’s views were ex-

pressed in a memorandum reported as United States v.

Kline, 205 F. Supp. 637 (D. Minn. 1962). There the Court

examined the pertinent law and especially the then recent

cases of Beck v. Washington, 369 U.S. 541, 82 Sup. Ct.

$55, 8 L. Ed. 2d 98 (1962), and Irvm v. Dowd, 366 U\S.

717, 81 Sup. Ct. 839, 6 L. Ed. 2d 751 (1961), and, based on

the most recent expression of the Court of Appeals for the

Eighth Circuit in Blumenfield v. United States, 284 F.2d

46 (8th Cir. 1960), cert. denied, 365 U.S. 812 (1961), held

that the ultimate question involved in the motion for change

of venue was whether it was possible to select a fair and

impartial jury, and that the proper occasion for such a

determination was upon the voir dire examination.

Now, following trial, the defendants urge that two recent

decisions, one of the United States Supreme Court and one

of the Second Circuit Court of Appeals, put a different

light on the matter.

It is urged that Rideau v. Louisiana, 83 Sup. Ct. 1417

(1963) supports the defendants’ position that a change of

venue should have been granted in this case, and that it

was prejudicially erroneous not to have done so.

A study of this case does not justify the suggested con-

clusion. The Rideau case involved a bank robber tried in

the state court in Lake Charles, Louisiana. He was ar-

rested the night of the commission of the crime and inter-

viewed in his jail cell by the sheriff. The interview was

recorded on film and sound track’ and then extensively and

repeatedly broadcast so that most of the community ob-

served or heard about the interview which, among other

App. 52

things, contained Rideau’s confession. Very shortly after

this, he was tried in the state court and convicted. Clearly

it was error for the trial judge not to grant a change of

venue where so many of the prospective jurors in this small,

compact, cohesive community had been repeatedly exposed

‘‘in depth,’’ close to the time of trial, to what the court

calls ‘‘the spectacle’’ of the defendant personally confess-

ing in detail the crimes with which he was later charged.

That was quite a different fact situation from the one here,

as will later be studied.

The case of United States ex rel. Bloeth v. Denno, 313

F.2d 364 (2d Cir.), cert. demed, 83 Sup. Ct. 1112 (1963),

reversing 204 F. Supp. 263 (S.D. N.Y. 1962), is also readily

distinguishable. It reached the federal court in a habeas

corpus proceeding. It involved a murder charge in the

state court. Here, too, knowledge of the crime was widely

held by the people of the community. Of 38 prospective

jurors, 36 had read about the case, and 31 had formed an

opinion that the defendant was guilty. The court in Bloeth

sets out in the footnotes the results of the voir dire exam-

ination of the jurors. It is manifest that the cards were

stacked against the defendant when so many of the jurors

had formed an opinion that the defendant was guilty.

It should be emphasized that in this case no juror was

accepted who had formed an opinion as to the guilt or

innocence of these defendants. The few prospective jurors

who said they had an opinion as to the guilt or innocence

of the defendants were not asked to state what that opinion

was, but were immediately excused by the Court.

The Second Circuit in Bloeth distinguished Bloeth from

Beck, supra, where all who held an opinion as to the guilt

App. 53

or innocence of the defendant were excused. Exactly the

same was done in this case.

?Here is an example of the basis upon which a prospective

juror was excused by the Court. Prospective juror Kenneth G.

Anderson, after being asked his name, occupation, residency and

other questions, was asked if he had a judgment as to the guilt

or innocence of the defendants. This colloquy follows:

bOoPOrPOoPOoPOP

I did at one time, yes.

Formulated a judgment?

Yes.

As to whether they were guilty or innocent?

Yes.

You say, ‘‘I did at one time.”

Yes.

Is that some time ago?

I haven’t thought of it much since.

I see.

It hasn’t been in the papers very much in the last

couple of years, last year or so.

Q.

Was that maybe a couple of years ago that you

formulated—

A.

Q

A.

Q.

A year ago or so it was all in the paper.

Did you follow it quite closely at that time?

No.

Well, you did at one time. How aré you today about

it? Do you have a judgment about the guilt or innocence

of the defendants?

A.

Q.

A.

Q.

A.

Q.

A.

3 Q.

A.

Q.

Yes, I suppose.

Do you think you could be a fair and impartial juror?

Yes.

It sounds a little inconsistent, though, doesn’t it?

It does.

Do you think it is?

Gee, I wouldn’t say.

What?

I couldn’t say.

Well, you may be excused, Mr. Anderson. You may

step down, and if you will go down to the clerk’s office.

App. 54

It should also be emphasized in distinguishing this case

from Rideau and Bloeth that here the trial took place some

three years after public knowledge of the Attorney Gener-

al’s investigation, and two years following Marvin Kline’s

conviction for larceny in the state court. So that at the

time the prospective jurors were interrogated in March of

1963, the great bulk of the publicity about the ‘‘Sister

Kenny matter’? was more than two years old and was a

past event of only slight recall to the jury panel members

who had any knowledge of it.

FAIR AND IXPARTIAL JURY

Defendants’ next principal ground for relief is that, be-

cause of adverse newspaper, radio and television publicity

both before and during the trial, the Court erred in not

permitting counsel to conduct the voir dire examination

of the jurors or, in the alternative, in failing to ask all

of the questions requested; in not permitting defendants

additional peremptory challenges; and in not interrogat-

ing the jurors individually during the trial as to claimed

adverse newspaper publicity. The gist of this argument

is that defendants never did have a fair and impartial jury

to start with, and that even if they did, it did not remain

so because of the adverse publicity, particularly in the

Minneapolis newspapers, to which the jurors might have

been exposed.

It should be said in the beginning that the District Court

in Minnesota has been confronted several times in recent

years with the responsibility for securing a fair and im-

partial jury in trials involving persons and companies well

known in the community. See, e.g., Jsaacs v. United States,

301 F.2d 706 (8th Cir.), cert. denied, 371 U.S. 818 (1962) ;

Dranow v. United States, 307 F.2d 545 (8th Cir. 1962) ;

Blumenfield v. United States, 284 F.2d 46 (8th Cir. 1960),

O18 Ae AT CL PLN

App. 55

cert. denied, 365 U.S. 812 (1961) ; Unated States v. Dranow,

4-61-Cr-114 (1962); United States v. Blumenfeld, 4-60-Cr-

111 (1961).

So that at the outset the Court was fully appreciative

of the problems involved and of the great care to be exer-

cised in choosing, and maintaining, a fair and impartial

jury and of our “‘heavy duty to do everything in (our)

power to assure a fair trial to the defendant(s).”’ United

States v. Accardo, 298 F.2d 133, 140 (7th Cir. 1962). Al-

though the Court denied the defendants’ motions for change

of venue to Chicago for the reasons previously stated, it

did state its favorable disposition to try this case elsewhere

within the District of Minnesota. Experience with the trial

of well-publicized persons has shown that the people of

St. Paul are many times relatively unacquainted with ac-

tivities, even well-publicized activities, taking place in

Minneapolis. The reverse is also true. Althongh the

‘‘Twin Cities’? are physically contiguous, communication

between and activities among residents of the two cities

are not extensive. In one case, that of United States v.

Blumenfeld, 4-60-Cr-111 (1961), the Court at the request

of the defendants moved the place of trial from Minne-

apolis to St. Paul. On interrogating a panel of jurors

there, it was found that only one member of the entire

panel had ever heard of the defendant, a criminal figure

well known in Minneapolis and the subject of extensive

newspaper, radio and television publicity there for some

30 years.

In the light of this experience, the Court, in picking a

jury panel for th. trial of these defendants, directed the

Clerk, in accordance with the authority granted by 28

U.S.C.A. Sec. 1863 (1950), to draw one-half of the jurors

from St. Paul and the surrounding area, one-fourth from

ihe rural area around the Twin Cities area and one-fourth

App. 56 .

from the City of Minneapolis, with the thought that we

were more likely thereby to secure jurors unacquainted

with these defendants, their activities and the charges

against them.* Of the jurors selected to serve in this case,

only 3 came from the City of Minneapolis. Six lived in

St. Paul, 2 in the suburbs or communities adjacent to St.

Paul, and 1 in a suburb of Minneapolis.

VOIR DIRE EXAMINATION

Defendants complain that they were not permitted to

conduct the voir dire examination. This does not occasion

ground for complaint because it is clear from Rule 24(a),

Federal Rules of Criminal Procedure, 18 U.S.C.A., that

the Court has discretion to conduct the examination itself

or to permit counsel to do so. It is the long-time habitual

practice in this District for the Court to conduct all inter-

rogation of the jurors in both civil and criminal cases, and

to permit counsel, following the Court’s interrogation, to

submit additional questions.

_ In this case, the Court conducted all inquiry of the

jurors. The defendants complain that the Court did not

ask all of the questions which the defendants submitted

to the Court. Ceunsel for the Chicago defendants, Koo-

lish, Koolish and Carnell, submitted a list of 79 questions.

It is true that the Court did not ask each of these questions

of each of the prospective jurors. For instance, the Court

3 The Clerk’s records reflect that the jurors reporting for serv-

ice came from the following counties in the following numbers:

Hennepin County, 20; Anoka County, 8; Ramsey County, 33;

' Dakota County, 4; Washington County, 6. Thus it appears that

46% came from Ramsey County (St. Paul), 11% from Anoka

County, 834% from Washington County, 8% from Dakota Coun-

ty, and only 20% from Hennepin County (in which Minneapolis

is located).

says Ccpaece ge

POD ORS Tod bie Od

App. 57

did not specifically ask each juror the number of children

he or she had, their names, their ages, or where they went

to school. But the gist of the questions submitted going

to the vital factors necessary to make a determination as

to the impartiality and qualifications of the jurors, was

asked. The Court particularly inquired as to the prospec-

tive jurors’ association or acquaintance with the operations

of the Sister Elizabeth Kenny Foundation, whether he or

she had contributed to it or had worked as a solicitor.

Specific and careful inquiry was made to each juror as to

whether he or she had ever read or heard anything about

the Kenny Foundation difficulties, with the claims of fraud

involving the defendants, and with Marvin Kline’s prose-

cution in the state court. In the event that any affirmative

response was made to these and similar questions, the Court

conducted further inquiries in order to elicit all the per-

tinent facts. All who expressed an opinion as to guilt or

innocence were excused.

It wouldn’t have made much sense for the Court to have

asked each of the prospective jurors each of the 79 ques-

tions submitted by the Chicago defendants. Many of them

dealt with irrelevant matters. Some were not pertinent

in view of answers given to previous questions, and some

of them were of an argumentative nature. Of course, it

is well established that the questions to be asked of jurors

on their voir dire examination rests in the sound discxetion

of the trial Court. Yarborough v. United States, 230 F.2d

56, 63 (4th Cir.), cert. denied, 351 U.S. 969 (1956), affirm-

ing 16 F.R.D. 212 (1954). The Court has reread the entire

voir dire examination of all the jurors, together with the

submitted questions, objections, and arguments of counsei

in connection therewith, and in so far as one can make an

objective judgment of his own conduct, the Court is satis-

fied that the voir dire examination was fair, adequate and

App. 58

sufficiently extensive so as to form a basis for determining

the impartiality of the prospective juror and to give the

defendants an adequate background of the juror to permit

counsel to intelligently exercise their peremptory chal-

lenges. It must always be remembered that a party, even

in a criminal case, is not entitled to a jury which is favor-

able to him, but only to one which is fair and impartial.

The right to an impartial jury is one of rejsction and not

of selection. United States v. Marchant, 25 U.S. (12

Wheat.) 480, 481, 6 L. Ed. 700 (1827); Phélbrook v.

United States, 117 F.2d 632 (8th Cir.), cert. denied, 313

U.S. 577 (1941).

PEREMPTORY CHALLENGES

And in the same connection the defendants argue that

they should have been allowed more than 14 peremptory

challenges. Of course, under Rule 24(b), Federal Rules

of Criminal Procedure, 18 U.S.C.A., the defendants were

only entitled to 10 peremptory challenges. Here the Court

granted them 4 additional challenges and told counsel that

if after exercising the 14 challenges they could show any

grounds for the request, the Court would grant them addi-

tional challenges or would, on its own, excuse any juror

evidencing the slightest bias or lack of qualification.

After interrogating each of the prospective jurors and

excusing those who showed any lack of qualification or

the presence of a possible prejudice, and after the defend-

ants had exercised their peremptory challenges, a colloquy

took place at the bench, at which time counsel for the Chi-

cago defendants asked the Court to grant them additional

challenges. The following colloquy is reported at pages

158, et seq. of the Transcript:

The Court: Well, let the record show that all coun-

sel and all defendants are here.

2

App. 59

Have you exercised your strikes, gentlemen?

Mr. Sprowl: We have, Your Honor, and I should

say on behalf of the defendants that there are more

jurors we would challenge if we had the additional

challenges. You said we could mention that. There

are at least two on this list that we would challenge

peremptorily if we had the challenge.

The Court: Do you think that they would not be

fair and impartial?

Mr. Sprowl: Well, that’s our—I suppose that is

always why—you don’t know these things.

The Court: I suppose the reason you might chal-

lenge or exercise your peremptory would be because

you think one juror may be more favorable to one side

than to the other, but if you have some idea that there

are some jurors on that list of 32 or on the list of 8

who could not be fair and impartial, I think you ought

to state it for the record, and if it is such a case, I

will strike him on my own and call another juror.

Mr. Sprowl: Well, that’s our feeling thai we have

these two other jurors that we think should not be on

the jury and we—you want me to state who they « -e?

The Court: That’s up to you.

Mr. Sprowl: If they are going to be jurors I

wouldn’t like anyone to know it. Shall I tell you who

they are?

The Court: That’s up to you because if you nave

exercised your strikes, they will soon be brought in

and —

Mr. Sprowl: We have exercised all Your Honor

has allowed.

The Court: They will soon be brought in and sworn,

and if you have objection to the jury panel I think

you ought to state it in the record for your own pro-

tection.

App. 60

Mr. Sprowl: Well, defendants have exhausted their

peremptories and if we had additic . ones we would

strike jurors No. 1, Randall, and “ , Christensen. And

we, the feeling is that because u. the publicity in the

case and so on that we have to interpret what we heard

the way we think we should interpret it, the candor of

the witness and so on. Anyway our feeling is that

those, we would strike if we had the challenge.

The Court: I gather then your point is that from

the viewpoint of yonr own case you would prefer to

have somebody else, is that the point?

Mr. Sprowl: No. I think that is not the point.

The Court: You tell me what it is then.

Mr. Sprowl: My point is that we think that they

would not be fair and impartial, That’s our feeling.

The Court: I think you ought to state for the rec-

ord, or you may think it wise to state for the record,

why and in what respect and what answers to what

questions prompted you to think that, if I am to make

a decision on it.

You have to point out to me where in my tentative

judgment to keep these jurors is in error. It seems

to me that is your duty.

Mr. Sprowl: I have to state the reason I did this?

The Court: I don’t think you have to, but you may

think it wise to.

Mr. Srrowl: I think I would rather not state why

I think so, but I do think so, and I think other defend-

ants’ counsel had agreed. We had a caucus to use

these collectively. Of course, we could be very mis-

taken in those we struck and be mistaken al) along,

but that is our feeling.

It is clear from this dialogue that defendants made no

showing that any of the jurors were not qualified or were

not fair and impartial. If counsel had given any indica-

App. 61

tion of any grounds for the action, the Court would have

stricken the jurors on its own, or would have permitted

additional peremptory challenges.

Subsequent colloquy in the Transcript, starting at page

162, indicates that the attorney for one of the other de-

fendants indicated that he felt that one of the prospective

jurors on the panel was of ‘‘very low intelligence.” The

Court does not agree with that appraisal, but, regardless,

it is not only those of high intelligence who are qualified

to serve as jurors. A cross section of one’s ‘‘peers’’ con-

sists of people of high, low and intermediate intelligence

in addition to those other human variables found in any

cross section of society.

It is very uncommon in this District to conduct any

hearings for cause in connection with prospective jurors,

and the Court pursues a liberal policy of releasing from

service any juror against whom even 4 piausible grounds

for excusing him can be stated.

The Court in this case took the inordinate precaution of

interrogating each of the prospective jurors individually

out of the hearing of the other members of the jury panel

so that each would be uninhibited in giving answers to

questions. The Court is satisfied thet each of the jurors

chosen, including the 4 alternate jurors, was fully qualified

and, without question, fair and impartial.

ADVERSE PUBLICITY DURING TRIAL

Also, as a part of their claim that they did not receive

a fair and impartial jury, it is claimed that the Court

sheuld have interrogated the jurors individually out of

the presence of each other concerning claimed inaccurate

and prejudicial publicity occurring during the trial on each

occasion it was requested to do so.

App. 62

In connection with this argument, it should be stated

that the progress of this trial was covered by representa-

tives of several news media. Accounts of the trial appeared

almost every day, principally in the Minneapolis newspa-

pers. Most of the claimed inaccuracies in news reporting

are attributed to the Minneapolis Star stories. Even be-

fore questioning the jury panel members, the Court spe-

cifically instructed them not to read any newspaper ac-

counts about the subject matter of the trial, not to listen

to radio or observe television programs about it, not to

talk to anyone about it, not to permit anyone to talk to

them about it, and not to talk about it among themselves.

This first instruction and one given after the 12 jurors

and 4 alternates were sworn, are set out in the footnote

below.‘

4The Court: I want to start out by instructing you all, those

of you who have just taken this oath and those of you who

have been called on the jury panel, not to read anything about

this case or this matter or the people involved in it in the news-

papers or to listen to any radio programs about it or to observe

any television programs about it, not to talk with anybody about

it and not to permit anybody to talk with you about it, and not

to talk among yourselves about it.

Now, I think you can understand better the importance of that

instruction and need for you to follow it religiously if I tell you

the reason for it.

In a court of law, a person is found guilty or not guilty of a

crime by a jury on the basis of the evidence that is presented

in the courtroom, by documents that are presented and by the

testimony of witnesses who take the stand.

* * * [T]he point of it is that the things you hear in this

room are regulated under court supervision, the things that you

may properly hear that will not be prejudicial to these defend-

ants. Of course, newspaper accounts and radio and television

accounts sometimes are not always accurate and they may con-

tain material which is not a correct reflection of what is actually

App. 63

This same instruction, or one very similar to it, was re-

peated every day during: the trial—always just prior to

the evening recess, many times prior to the noon recess,

and every time the Court was requested to do so by counsel.

The brief of government counsel states that these admo-

nitions were given to the jury a total of 85 times.°

On several occasions in the course of the trial the de-

fendants would invite the Court’s attention to newspaper

publicity which they claimed was unfair and prejudicial

5 Compare United States v. Accardo, 298 F.2d 133 (7th Cir.

1962), where the Court refused to give cautionary instructions

dsring the trial although requested to do so. Concurring opinion

of Judge Duffy, p. 139.

going on in the courtroom. Sometimes newspaper accounts are

headed by headlines which probably are not always reflective

of the true story.

(After the 12 jurors and 4 alternates had been sworn, the

Court said) :

I wish to emphasize to you all a point which you have heard

me talk about two or three times already today, and I can’t

emphasize it too much, and that is the importance of your not

talking with anybody about this case at any time that you

are serving as jurors—you are permitted to go home, of course,

at night—or permit anybody to talk with you about the case;

that you do not read any newspaper accounts about this trial

or about this whole matter; listen to any radio programs about

it or observe and listen to any television programs about it.

Now, I am afraid I’m going to have to repeat that admonition

time and time again, so much so that you will maybe get tired

of hearing it, but the fact that I do repeat it and will repeat it

probably indicates its importance to you, importance far more

reaching than you can maybe understand at this time.

So I enjoin you to be very particular about following that

admonition.

App. 64

and would request the Court to interrogate the jurors in-

dividually out of the presence of the others as to whether

or not they had read or discussed such news stories. In

each instance the Court interrogated the jurors as a group

as to whether or not they had read or heard about such

stories. In each instance the jurors responded that they

had not read or heard about the news stories, and had

not violated the Court’s repeated admonition. The defend-

ants now complain that the Court should have interrogated

each juror individually out of the presence of the others

on each of such occasions. The Court did not make indi-

vidu2i inquiry on each such occasion, but before submitting

the case to the jury the Court did examine each juror in-

dividually out of the hearing of the other jurors and asked

whether he or she had complied with and had been faithful

in following the instructions and had read or heard about

or observed or listened to any accounts or programs

about the subject of the trial. See Transcript, p. 8708,

et seq. It would have been an unduly time-consuming and

unnecessary procedure for the Court on each occasion re-

quested to separately interrogate each juror abovt each

allegedly offensive news story published. As stated, stories

were published almost daily. Good sense dictated that the

Court not unduly burden the jury members with repetitive

separate inquiry. As it was, the Court many times felt

in repeating the same admonition day after day that it

was doing so ad nauseam.

The results of the separate individual interrogation con-

ducted before submitting the case to the jury satisfied the

Court that each juror had been faithful in following the

admonitions of the Court. Following such interrogation,

and out of the presence of the jury, the Court said:

The Court would like to observe from the demeanor

and answers that were given to these questions by each

jucor that the Court is satisfied they are honest in

App. 65

their answers and that they have been faithful in obey-

ing the instructions of the Court constantly given not

to permit any of these outside influences to influence

them in any way.

And then, addressiug itself to counsel for defendants, said:

Are there any questions or observations?

There were none. Counsel started conversation about an-

other subject. Counsel for the defendants tendered no

suggestions as to the need for further inquiry or as to

the need to substitute any of the 3 then remaining alter-

nate jurors for any of the regular jurors.

In connection with this whole subject of claimed adverse

publicity affecting the fairness of a trial, it should be re-

called that factual news reporting does not of itself create

a prejudicial atmosphere. Reynolds v. United States, 225

F.2d 123 (5th Cir.), cert. denied, 350 U.S. 914 (1955), reh.

denied, 350 U.S. 929 (1956). It would be a practical im-

possibility in this modern age to conduct a trial involving

persons or subjects weil known in the community without

the consequent publicity. And, other than locking up the

jury during the whole time, the only way to,conduct such

a trial with reasonable certainty that the jury will be un-

influenced by publicity is by careful examination of the

jurors in the first instance, and a constant repetition of

the admonition to the jurors not to receive any outside

information about the case, followed by inquiry to insure

that the instructions are obeyed. Justice Holmes once

observed that, ‘‘If the mere opportunity for prejudice or

corruption is to raise a presumption that they exist, it will

be hard to maintain jury trials under the conditions of the

present day.’’ Holt v. United States, 218 U.S. 245, 31

Sup. Ct. 2, 54 L. Ed. 1021 (1910), afirmmg 168 Fed. 141

(W.D. Wash. 1909).

App. 66

It is the Court’s considered view that this jury was a

fair and impartial one and in no way tainted by the pub-

licity which accompanied the trial. But even assuming

that the jurors disobeyed the repeated instructions of the

Court, and lied when they said they had obeyed them, the

fact remains that it is questionable if the news stories re-

flected any material which was not at one time or another

brought out in the trial itself. The principal claim of the

Chicago defendants was that the newspaper stories re-

ported the allegedly unsavory conduct of the defendant

A. L. Koolish in conducting questionable mail solicitation

operations in the past, and that he had been indicted by

a Grand Jury in Chicago. Defendant A. L. Koolish took

the stand and in full detail told of his past experiences

in the mail solicitation business and frankly told of his

indictment by the Grand Jury in Chicago and of the sub-

sequent dismissal of that indictment. The other principal

defendant, David Koolish, likewise took the stand and fully

told ail about his past experiences and #.})out the operations

of the various mail solicitation companies which he and

his father operated. Other witnesses gave similar testi-

mony.

So that if a comparison were made of the alleged prej-

udicial publicity contained in the news media, principally

the Minneapolis Star, with the evidence actually brought

out on the trial, it might well appear that even if the jurors

had been exposed to that publicity, it would not have been

prejudicial because, within the principle expressed in

Reynolds, supra, it constituted factual reporting. But the

Court is satisfied that these jurors followed the admoni-

tions of the Covit and were not exposed to the newspaper

publicity or any other outside influence. It is presumed

that jurors will be true to their oath and conscientiously

observe the instructions of the Court. Paoli v. United

oe een

Sic ne, hind "MENA ne iN AN a Vala D! anes ante inh One. seats

ee eb AOR rset cae

App. 67

States, 352 U.S. 232, 242, 77 Sup. Ct. 294, 300, 1 L. Ed.

278 (1957); United States v. Sorcey, 151 F.2d 899, 903

(7th Cir. 1945), cert. denied, 327 U.S. 794 (1946).

ACCEPTANCE OF FADELL’S GUILTY PLEA

On the 17th day of triai, April 10, 1963, Defendant

Fadell pled guilty to Count VI of the indictment. The

defendants urge that the Court’s acceptance of the plea

and its advising the jury of that fact was error, and that

the Court should have granted the requested mistrial.’

Upon being advised by Mr. Simpson, counsel for Fadell,

on April 8, 1963, that it was Fadell’s intention to ask the

Court for leave to withdraw his not guilty plea and to

plead guilty, the Court, in chambers, conducted extensive

discussion with all counsel as to the best procedure to fol-

low in view of the contemplated change of plea. The

colloquy between Court and counsel concerning this is con-

tained in the Transcript, pp. 3068, et seq.

In accepting Fadell’s guilty plea on April 10th, and in

advising the jury of that fact, the Court was governed

by the guidelines sgt out by the Eighth Circuit Court of

Appeals in the case of Wood v. United States, 279 F.2d

359 (8th Cir. 1960). This case was an appeal from the

United States District Court from the Northern District

of Iowa, wherein Judge Graven was faced with a very

similar problem. It was also a mail fraud prosecution, and

several defendants were involved. Prior to the commence-

*This Count was later dismissed as to the other defendants.

7The Chicago defendants also moved that the case as to the

remaining defendants be “severed” from the trial of Fadell. Since

there were no other defendants as against whom the trial could

proceed, it appears that this motion for severance was another

expression of their motion for a mistrial.

App. 68

ment of the trial some of the defendants pled guilty and

in the course of the trial other defendants withdrew their

not guilty pleas and entered guilty pleas. Judge Craven

advised the jury members of these facts, but cautioned

that such pleas should not be considered as evidence of the

guilt of the remaining defendants on trial. This procedure

was approved by the Court of Appeals, speaking through

Judge Sanborn, when it said:

‘“We think the trial court did what it should have

done, when it advised the jury panel that the defend-

ants Brown and Nair had entered pleas of guilty to

Count I of the indictment, and as to the effect of the

pleas upon other defendants. We also approve the

statement of the court to the jury with respect to the

entry of pleas of guilty by Kawell, Neudeck and Bar-

ham to Count I during the trial. (Citations.) The

court did not err in denying the motion for a mistrial

based on the fact that the pleas of guilty to Count I

by three of the defendants were entered after the trial

commenced; nor did it err in not again referring to

these guilty pleas, or their effect, in its final instruc-

tions to the jury.

On the basis of¢the Wood case, and aping the instruction

therein given by Judge Graven, the Court, upon satisfying

itself that Fadell was voluntarily and intelligently with-

drawing his plea of not guilty and pleading guilty, advised

the jury as follows:

Members of the jury, as you observe, Mr. Fadell

isn’t here today, nor is his counsel, Mr. Simpson. I

advise you that this morning at 9:30 Mr. Fadell

moved the Court for permission to withdraw his plea

of not guilty to the charges in the Indictment and to

make a plea of guilty to one of the Counts in the In-

dictment, Count 6, and the Court, after being satisfied

that he is competent to make such a plea and did it

‘App. 69

voluntarily, granted him permission, accepted his plea

ment and that the case as to Mr. Fadell is no longer

your concern.

The matter will go on as to the other defendants.

I emphasi::e to you the fact that Mr. Fadell has pled

guilty is not to be accepted by you as evidence of the

fact that these other defendants are guilty. It is not

to be viewed by you as any kind of persuasive evidence

or showing that the others are guilty. You may not

reason or speculate that if Mr. Fadell pled guilty to

one count, then the other defendants might well be

guilty of that count or of other counts.

The guilt or the innocence of each of these other

defendants must be based solely upon the evidence

which has been presented and will be presented in this

courtroom, and upon nothing else.

At the specific request of the defendants the Court ad-

vised the jury as a part of its instructions following the

close of testimony, as follows:

Now, with respect to Mr. Fadell. You will recall

that I advised you five or six weeks ago that Mr. Fadell

had moved the Court for permission to withdraw his

plea of not guilty to the charges in the Indictment and

to make a plea of guilty to one of the Counts in the

Indictment, Count 6, and the Court, after being satis-

fied that he was competent to make such a plea and

that he did it voluntarily, granted permission and ac-

cepted his plea of guilty to that Count of the Indict-

ment and that the case as to Mr. Fadell is no longer

your concern.

I again emphasize to you the fact that Mr. Fadell

pled guilty is not to be accepted or considered by you

as evidence that any other defendant is guilty of any-

thing charged against him in any Count of the Indict-

ment or even that any crime was committed. It is

not to be viewed by you as any showing or inference

that any other defendant is guilty as to any Count

of the Indictment.

App. 70

You may not reason or speculate that, well, since

-Mr. Fadell pled guilty to one Count, that it must fol-

low that a crime must have been committed, or that

some other one or more of the defendants might well

be guilty of either the one Count to which Mr. Fadell

pleaded guilty or of any other Count.

The guilt or the innocence of each of the remaining

defendants with respect to any one or more of the

Counts of the Indictment submitted to you must be

based solely upon the evidence which has been pre-

sented and upon nothing else.

In reviewing our action in accepting the plea of guilty,

and advising the jury of that fact, it seems to the Court

now, as it seemed then, that there was nothing else for

the Court to do. Certainly, under Rule 11, Federal Rules

of Criminal Procedure, 18 U.S.C.A., Fadell had the right

to plead guilty. Could the Court have refused to accept

his plea? I doubt it. Once the Court was satisfied that

the change of plea was intelligently and voluntarily made,

there was no course of action open except to receive the

plea.

The only sensible thing to do then was to advise the jury

of that fact. They were a group of highly intelligent

persons and it would be logical, when they noted the ab-

sence of Fadell and his attorney from the courtroom, to

wonder what had happened to him and why he was not in

court. The jury could not reasonably be kept in the dark.

Sooner or later the fact would be apparent that he had

pled guilty—the United States Attorney had stated his

intention to call Fadell as a witness—and in the interest

of a sensible administration of justice, the Court felt that

the jury should be promptly advised of the true fact:.

This would avoid speculation on its part and any infer-

ences detrimental to the remaining defendants. In fact,

; 7 Pier, Wey erat

Ns a tab iter sib Si hi

App. 71

_ the course of action which the Court later pursued re-

ceived the approval of Mr. Harry H. Peterson, attorney

for Defendant Kline, when he suggested :

I should think it would be better to take the bull right

by the horns and say that here is what has happened,

and now you do so and so, and make it heavy in favor

of the other defendants.

In subsequent colloquy in chambers the following day,

Mr. Peterson indicated that in conference with all attor-

neys he had changed his mind about the matter.

If this Court were defending one of several defendants,

charged with mail fraud and conspiracy, it would be un-

happy if one of the defendants pled guilty in the course of

the trial, and it would ‘“make a record’’ with motions for

mistrial, as these defendants have done. The discsm-

fiture which Fadell’s plea of guilty caused the other de-

fendants and their counsel is very understandable. But

it does not follow that a mistrial should have been granted,

or that any prejudice resulied to the other defendants.

Paraphrasing the eminent Judge Augustus Hand, ‘‘a man

takes some risk in choosing his associates and if he is hailed

into court with them, must ordinarily rely on the fairness

and ability of the jury to separate the sheep from the

goats’? when one of his associates pleads guilty in the

course of a trial. United States v. Fradkin, 81 F.2d 56, 59

(2d Cir. 1935), cert. dented, 297 U.S. 720 (1936).

The basic principle of law as expressed in the Wood case,

supra, which this Court followed, was based on earlier

Kighth Circuit cases establishing the general principle.

Holmes v. United States, 134 F.2d 125, 129-30 (8th Cir.),

cert. dented, 319 U.S. 776 (1943) ; Kelling v. United States,

122 F.2d 428, 429 (8th Cir. 1941). An earlier Ninth Cir-

cenit case, Davenport v. United States, 260 F.2d 591 (9th

App. 72

Cir. 1958), cert. denied 359 U.S. 909 (1959) expresses more

exactly the principle followed by trial Judge Graven in

the Wood case, and is cited as authority by Judge Sanborn

in the Circuit Court decision in the Wood case at p. 363

of 279 F.2d.

The ¢ “2ndants in their brief make the argument that

Fadell wanted to plead guilty sarlier in the trial or even be-

fore trial, but that Mr. Miles Lord, the United States At- .

torney, would not recommend the acceptance of his plea in

order that Mr. Lord could have a ‘‘eny in the enemy camp’’

sitting with the other co-defendants. It is urged that

the prosecutor had a ‘‘call’’ on Fadell to bring about his

guilty plea at some time most propitious to the presenta-

tion of his case, and most prejudicial to the other defend-

ants.

This suggestion was made to the Court after Fadell’s

counsel advised the Court that Fade!ll wished to change

his plea to guilty, and the Court’s full inquiry into the

matter is reported in the Transcript, p. 3068, et seq. Mr.

Simpson, the attorney for Fadell, is an experienced lawyer

who enjoys a splendid reputation for integrity and the

highest professional conduct. Associated with him in the

representation of Fadell was Mr. W. B. G. Watson, a

long-time Minneapolis lawyer with <«tensive experience

in the field of criminal law, who «iso enjoys the highest

reputation. The Court placed complete confidence in the

representations made to the Court by these two respected

members of the Bar. Mr. Simpson fully stated the facts

surrounding Fadell’s change of plea, and the Court is satis-

fied there was no improper conduct in connection with it

by any of the parties involved.

Counsel for defendants urge that they were surprised

by the change of piea and had no prior knowledge of the

ee a

Tee eS ee ee

atea iien

App. 73

possibility of it. But Mr. Simpson advised the Court that

many months before trial he had advised the other lawyers

that Fadell’s course of action was uncertain and that it

was not unlikely that he would change his plea. He said

that the night before trial, all counsel were again advised

of substantially the same facts. Counsel admitted this.

So the possibility and probability of a change of plea from

not guilty to guilty was well known by counsel for all of

the defendants. And it was apparent during the days

of trial before the change of plea was accepted that the

other defendants were treating Fadell and his lawyer ac-

cordingly. Fadell was physically segregated from the

other defendants, and Fadell’s attorney sat conspicuously

removed from the ceuter of activity of other defense coun-

sel.

The Court did its best to protect the other defendants

from any possible prejudice which might come to them as

a result of Fadell’s plea of guilty. No reference was sub-

sequently made in the course of the trial to the fact that

Fadell had pled guilty, and it was only when specifically

requested to do so by counsel for the remaining defendants

that the Court in its jury instructions referred to the fact

that Fadell had pled guilty, and emphasized that that fact

should in no way be considered by the jury in determining

the guilt of the remaining defendants.

CLAIMED MISCONDUCT OF UNITED STATES

ATTORNEY

Defendants’ next ground in support of their motions

for judgment of acquittal or a new trial is based on the

claimed misconduct of the United States Attorney in the

course of the trial. Deiondants claim that the prosecutor

made prejudicial statements of alleged facts, and conducted

cross-examination which inferred the existence of alleged

App. 74

incriminating circumstances, as to all of which the govern-

ment offered no proof; that the prosecutor in the presence

of the jury requested defense counsel to stipulate to the ad-

mission of facts and exhibits, which was prejudicial; and

that the rebuttal argument of the United States Attorney

was inflammatory, resulting in the return of a verdict based

on passion and prejudice.

The Court has examined the several claims cited by the

defendants in their motion and in their brief supporting

the argument that in both direct and cross-examination the

prosecution insinuated the existence of facts which were

not later proved. >

After some nine weeks of trial, the jury was growing

tired and restless. The questions of witnesses and the

evidence was becoming repetitious. The Court in chambers

suggested to counsel that it might be wise from the view-

point of both sides if they contemplated closing the testi-

mony in the near future. All parties agreed.

This fact is recited in order to suggest that it is not un-

likely that if the prosecutor were afforded the opportunity,

he could have proved some or maybe many of the infer-

ences contained in the questions asked on direct and cross-

examination to which defendants’ counsel make objection.

Fred Fadell did not testify. The decision of the United

States Attorney not to call him—although he several

times stated his intention to do so—may nave been based

on the many vigorous anticipatory objections by defense

coansel to the calling of Fadell. But, had Fadel] been

called, it is not improbable that his testimony would have

proved many of the inferences to which objection is made.

But, at all events, the prosecutor had the duty as legal

counsel for the government, to vigerously present his case

as best he could and to bring out every facet of the evi-

App. 75

dence which would go to prove the guilt of the defendants.

A rereading of the claimed prejudicial questions and in-

ferences does not persuade that they were prejudicial.

But, to negative any improper inferences, the Court, at

the specific request of the defendants, gave an extensive

instruction directing the jury to completely disregard all

the inferences and implications recited. The instruction

is set out in full in the footnote below.®

* And now I have a series of instructions in which I wish to

eall your attention to certain comments and statements” made

by the prosecutor concerning which no evidence was subsequent-

ly offered, and the purpose of this instruction is to invite your

attention to those events, and to caution you and instruct you

that you are to disregard any inferences that might arise from

Mr. Lord’s reference to these matters.

You will recall, for instanee, that Mr. Lord was interrogating

A. L. Koolish, and he mferred that a meeting took place in Chi-

cago in February of 52, either the fall of ’52 or sometime in ’52,

attended by Kline, Fadell and Koolish. Allegedly discussions

took place about Kline’s paying his income tax on money re-

ceived by hin from Fadell. The inference was that this group

made a trip to Palm Springs, California, and remember there

was a big eight-passenger Cadillac automobile, allezediy at that

time the inference was that certain conversations took place be-

tween Mr. Koolish, Mr. Kline and Mr. Fadell concerning the

Fadell payments to Kline. Mr. Koolish denied any such meet-

ings in Chicago. He denied a recollection of a trip to Palm

Springs or that any such conversations inferred by Mr. Lord

took place.-

You will reeall also that during his examination of Philip

Koolish, he was asked questions, Mr. Philip Koolish was, in-

ferring that a meeting had taken place in Chicago attended by

Mr. A. L. Koolish, Marvin Kline, Fred Fadell and D. W. Onan

at which there was a discussion respecting receipt of payments

by Mr. Kline from Mr. Fadell. On that occasion it was repre-

sented by Mr. Lord that such conversation took place. The wit-

ness denied the meeting and the conversation and no evidence

App. 76

REQUESTS TO STIPULATE

It is also complained that counsel for the government,

in the presence of the jury, requested defense counsel to

was offered with reference to the Chicago meetings or the Palm

Springs vacation meeting. Neither the statements made nor the

questions put by Mr. Lord are evidence that the Chicago meet-

ing, the Palm Springs trip, or the alleged conversations took

place or that defendant A. L. Koolish had knowledge of any

arrangement between or any monies paid by Fred Fadell & As-

sociates to Mr. Kline, and so you must entirely disregard and

erase those items from your mind.

In the course of his examination of Mr. Philip Koolish, Mr.

Lord asked questions he inferred or in which he made a state-.

ment that A. L. Koolish told Ferguson to destroy Postmasters’

letters ;

That at Boston in one year over a third of hundreds of thou-

sands of letters had to be thrown away;

That Cleveland and Cincinnati, Ohio did not have very high

returns ;

That the witness or one of the Chicago mail concerns gave

Mr. Fadell $2,500 to make a loan to Dr. Warden.

The witness Philip Koolish denied that any of these events or

conversations took place.

No evidence was offered by the Government to prove that any

of these events or conversations inferred or suggested did take

place.

Those questions, statements, inferences with respect to these

matters are not evidence, and you must disregard them in reach-

ing your verdict.

In the course of his examination of Mr. A. L. Koolish, Mr. Lord

asked questions of the witness in which he exhibited to the wit-

ness in onr presence four New Century Corporation checks, and

by his questions to the witness, he inferred that the checks were

payable to Mr. Fadell and covered monies pai” to Mr. Fadell for

ulterior purposes.

None of these checks was received in evidence. They“were

not id-~utified or offered, and no testimony with respect to them

was received.

They, too, are not evidence, and neither they nor any infer-

ence suggested with respect to them is to be considered by you

in reaching your verdict.

os

*

ange:

a ES BELTS

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App. 77

stipulate to certain facts in evidence, which constituted

prejndicial mis-onduct.

As has been pointed out, this was a long trial. But it

would have been much longer were it not for the coopera-

tive attitude of all counsel in entering into stipulations

for the admission of facts and evidence, particularly in-

cluding books and records of account of the several busi-

ness organizations involved. Mr. Sprowl, one of the

counsel for the Chicago defendants, was very cooperative

in this regard. Before trial, the Court held pretrial con-

ferences in order to secure, if possible, agreement of coun-

sel as to the admission of evidence and other matters; and

almost every afternoon following trial, the Court held in-

formal] conferences in the courtroom and on the record with

reference to the course of proceedings and the admission

of evidence for the next day. This visualized the expedi-

tion of the trial. It was particularly effective during the

presentation of the government’s case. The United States

Attorney was requested to advise defense counsel as to the

exhibits contemplated to be offered the next day. This

permitted defense counsel to determine in advance wheth-

er or not they wanted to make objection or to agree to

the admission of exhibits. This resulted in doing away

with many unnecessary delays in the trial which would

have otherwise taken place. As previously stated, defense

counsel were very cooperative in stipulating to the intro-

duction of exhibits.

When the various grounds for claimed prejudicial re-

quest to stipulate are examined in the light of the practice

above outlined, it will be seen that the colloquy originated

by the United States Attorney with reference to stipula-

tions were, in many instances, an outgrowth of the previous

discussions about the reception of evidence. But none of

App. 78

the claimed suggestions for stipulation evidenced a pur-

pose or desire to embarrass or take advantage of defend-

ants or defendants’ counsel or to prejudice the defendants

in any way.

REBUTTAL ARGUMENT OF UNITED STATES

ATTORNEY

It is also urged that the rebuttal argument of the United

States Attorney was inflammatory and resulted in a ver-

dict based on passion and prejudice. Many grounds are

cited in support of this claim, and the argument of the

prosecutor is dissected and many parts of it are particular-

ly commented upon. It is not urged that the principal jury

argument, made by the Assistant United States Attorney,

was prejudicial.

It must be realized that the United States Attorney,

like the attorneys representing the defendants, is an advo-

cate and ‘‘it is entirely proper for him as earnestly as he

can to persuade the jury of the truth of his side, of which

he ought to be thoroughly convinced before he begins at

all.’? DiCarlo v. Umted States, 6 F.2d 364, 368 (2d. Cir.)

cert. denied, 268 U.S. 706 (1925).

The Court in DiCarlo, supra, went on to say that: ‘‘To

shear him of all oratorical emphasis, while leaving wide

latitude to the defense, is to load the scales of justice; ...”’

And so, ‘‘some latitude must be given to lawyers’

language in a hard-fought case... .’’ United States v.

Kravitz, 281 F.2d 581, 586 (3rd Cir. 1960), cert. denied, 364

U.S. 941 (1961).

The cases uniformly hold that it is only when the claimed

misconduct furnishes good reason to believe that it in-

fluenced the jury’s verdict that it will be held to be prej-

udicial and grounds for a new trial. Marks v. United

‘App. 79

States, 260 F.2d 377, 383 (10th Cir. 1958), cert. denied,

358 U.S. 929 (195$}. Our own Highth Circuit Court of

Appeals, in its most recent expression in Isaacs v. United

States, 301 F.2d 705, 736 (8th Cir.), cert. dented, 371 US.

818 (1962), said that:

The dominating question. always, is whether the argu-

ment complained of was so offensive as to deprive the

defendant of a fair trial.

The Court listened attentively to the rebuttal argument

of the United States Attorney, and has reread it. While

in many respects it is not a model type of prosecutor’s

argument, stili when it is appraised in its entirety, and

in the light of the long trial and the provocation by defense

counsel for some of the prosecutor’s comments, the argu-

ment was not so awry as to have unfairly influenced the

jury or deprived the defendants of a fair trial. The evi-

dence of guilt was voluminous and persuasive, and the

Court is of the view it was upon that, not the rebuttal

jury argument, that the verdicts were based.

As was reasoned by the Court of Appeals in Blwmen-

field v. United States, 284 F.2d 46 (8th Cir. 1960), cert.

denied, 365 U.S. 812 (1961), the fact that the jury was so

discriminating in finding guilt on some counts as to some

defendants and not as to others, is persuasive that the

jury reached its verdicts of guilt based only on the evi-

dence.

As was observed by the Ninth Circuit Court of Appeals

in the recent case of White v. United States, 317 F.2d 231

(9th Cir. 1963), some of the prosecutor’s ‘‘remarks had

been better left ‘unremarked,’ ’’ but in context we do not

find them inflammatory.

Before argument to the jury, all counsel agreed (Tr. p.

8171) that objections to the remarks of counsel would not

App. 80

be made i: the course of those arguments. ‘This arrange-

ment was agreed to after the Court advised counsel (Tr.

8169) of the observations of the Court of Appeals in the

case of Isaacs v. United States, 301 F.2d 706 (8th Cir.),

cert. dented, 371 U.S. 818 (1962), that the better practice

is for counsel to make their objections when the allegedly

offensive argument is being made, rather than to wait for

the conclusion of the argument. Mr. Lord, the prosecuting

attorney, agreed to this, but said thai he would have no

objection to being interrupted at any time by defense coun-

sel. But, undoubtedly prompted by gentlemanly observ-

ance of the agreement, defense counsel did not do so.

But at the very first opportunity—that is, in the jury

charge—the Court instructed the jury that the arguments

of counsel were not to be considered as evidence. See

particularly Tr. p. 8735 where the Court said, ‘‘the argu-

ment, comments, observations, expressed beliefs ard opin-

ions of these lawyers are not evidence, and they should

not be considered as such by you.’’ So that, conceding

that some of the comments and observations the prosecut-

ing attorney made in the rebuttal argument were not

germane, it must be presumed that the jury followed the

instructions of the Court.

It is the Court’s opinion based on, participation in and

observation of the trial, acquaintance with counsel and the

jury, a consideration of the volume and kind of evidence

received, the verdicts reached, and a knowledge of the

relationship between the jury and counsel, that the prosecu-

tor’s rebuttal argument was not inflammatory or preju-

dicial, was not a basis for the jury’s verdicts, and did not

deprive the defendants of a fair trial. See United States v.

Brennan, 137 F. Supp. 888 (D. Minn. 1956), affirmed,

240 F.2d 253 (8th Cir.), cert. denied, 353 U.S. 931 (1957),

and cases there cited.

~~ . a te Ne ak i ei ee

App. 81

CLAIMED ERROR IN ADMISSION OF EVIDUNCE —

CONCERNING OTHER CHARITY SOLICITATIONS

The Chicago defendants complain that the Court erred

in admitting evidence concerning their activities with re-

spect to other charities. It was the government’s theory

that the Chicago defendants, while not the apparent, were

the actual, owners of several Chicago-based mail solicita-

tion concerns, particularly Empire Associates, Lamarge

Mailing Company, and New Century Corporation. Evi-

dence was received concerning these corporations and their

conduct of business with other charitable organizations

such as the National Foundation for Asthmatic Children,

the Disabled American Veterans, Father Flanagan’s Boys’

Town and Piney Woods Country School. This evidence

was-received on several grounds—principally to show that

similar acts of the Chicago defendants evidenced their in-

tent and knowledge, and the absence of mistake and ac-

cident, in their modus operandi in connection with the

Sister Kenny Foundation. This was proper. Moses v.

United States, 297 F.2d 621, 624 (8th Cir. 1961) ; Goodman

v. United States, 273 F.2d 853, 857 (8th Cir. 1960).

The evidence was also received to show the nature and

extent of the participation and control by the Koolishes

in the operation of Empire, Lamarge and New Century

Corporations as was alleged in the indictment, paragraphs

3 and 4.

Since it was claimed by the government that the mail

fraud encompassed action of the Chicago defendants in im-

properly renting Kenny contributor names to the other

charitable foundations, the evidence was properly admissi-

ble to prove that fact. The Court cautioned the jury as to

the limited purpose for which this evidence was received

in the following words:

App. 82

You will recall that evidence was received concern-

ing the operations of mail campaigns for the D.A.V.,

Father Flanagan’s Boys’ Town, for the Tucson organ.

ization and other similar organizations.

Now, while there was an interrelation between the

work carried on by the Chicago mailing concerns and

other charitable groups, and evidence with reference

to this was pertinent in connection with the extent of

list rentals and other matters, the evidence was offered,

and received, primarily for the limited purpose of

showing the presence or absence of the required crimi-

nal intent of the defendants to carry out the claimed

fraudulent scheme or plan, and to conspire to do so, as

is alleged in the indictment. So you must consider

this evidence only for that limited purpose. You ‘nay

not consider it as having any bearing on the disposi-

tion of the defendants to commit a crime. Tr. p. 8754.

ADMISSION OF CHARTS AND SUMMARIES

Complaint is also made to the admission of certain

charts and summaries tendered by the government as be-

ing misleading and speculative. But substantial evidence

was introduced and received as a basis for the reflections

sought to be shown by the charts and summaries. This is

proper. United States v. Johnson, 319 U.S. 503, 63 Sup. Ct.

1233, 87 L. Ed. 1546 (1943); Epstein v. United States, 246

F.2d 563 (6th Cir.), cert. dented, 355 U.S. 858 (1957);

Kamomeyer v. United States, 227 F.2d 313 (8th Cir. 1955),

cert, denied, 351 U.S. 904 (1956) ; Somberg v. United States,

71 F.2d 637 (7th Cir. 1934) ; Untted States v. Park Avenue

Pharmacy, 56 F.2d 753 (2nd Cir. 1932).

The Court gave the jury an extensive cautionary in-

struction with reference to these charts and summaries as

follows:

The testimony of an accountant and any summaries

or charts prepared by him and admitted in evidence

are competent for the purpose of explaining facts dis-

App. 83

closed by books, records and other documents which are

in evidence. However, such charts or summaries are

not in and of themselves evidence and were permitted

3 to be used here only as a matter of convenience in

understanding the evidence. So, unless you find that

they are in truth summaries of facts and figures showu

1 ‘by the evidence, you are to disregard them entirely.

You will recall that counse: had some argument

among themselves as to whether certain charts which

weve offered correctly reflected the facts which they

sought to reflect. That is particularly true, I recsil,

of Government’s Exhibit 318, which was a computation

of the the payments to Fadell and the alleged repey-

ments of part of those monies to Kline between 1952

and 1956. I think all counsel or many of them brought

that out in their arguments yesterday. Well, that

chart, Exhibit 318, was a reflection, an interpretation

in a way, of the facts as they were found by the Gov-

ernment’s accountant. The defense took some excep-

tion to that. You will recall that that chart sought

to show that the money was being equally divided

between Fadell and Kline. The defense took the posi-

tion that that wasn’t true; that the accountant in

setting up that chart had to do a good deal of in-

terpreting to get it to come about even. I caution you

about that.

4 If you find that that chart does not accurately reflect

the facts, of course, discount it accordingly, or disre-

gard it.

Another example of the same thing was Govern-

ment’s Exhibit 613, which embodied the estimated con-

tributors’ names used in the fall mailings between

1952 and 1959. There, too, you might view those as

only estimates or maybe interpretations of the fi: ot,

but at least the position of the Government was that

that chart was an accurate reflection of what the facts

actually were, although the defendants took a differ-

ent position.

NS See! 5 DNS AEN AERIS Ne BC te MN IN Ah Tie EDM te Naot HP

eee

7

; Pere, cn — . .

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App. 84

So I caution you, when you are studying these charts

and all of the charts, that you must make sure that

they really reflect the facts. Tr. pp. 8762-64. .

SUFFICIENCY OF EVIDENCE

The Court is satisfied that there was sufficient evidence

received upon which the jury could reach the verdicts which

it did. The only defendant who strongly urges otherwise

is Zimmerman. While the proof as against Zimmerman

was not as voluminous, as direct, or as compelling as that

received as to the other defendants, there was sufficient

evidence to justify the conclusion of guilt as to Counts

9 and 16 as was found by the jury, and, in fact, sufficient

evidence to justify a finding of guilt as to other counts

of the indictment as well. The evidence did not disclose

that Zimmerman received any bribes or payments other

than reasonable compensation for his professional services

as a Certified Public Accountant; but there was other evi-

dence from which the jury could wel! find guilt to be

established. There was a substantial showing to justify

the conclusion that Zimmerman falsified the audits of the

Kenny Foundation, particularly as to the actual costs of

the mail compaigns, and knew that the audits were intended

for the public and for those charged with policing charit-

able drives. Zimmerman was the accountant for Kline and

Fadell and knew that Kline and Fadell were receiving very

substantial ‘‘payments’’ which came from the Chicago de-

fendants; he did not report this or other questionable

aspects of the Kenny operations of which he had knowl-

edge, to the Board of Directors of the Kenny Foundation,

albeit his professional partner, Moen, urged him to do so.

After the Mir.nesota Attorney General started an investi-

gation, Zimmerman changed the then current audit report

to skow a complete reflection of the costs of the mail opera-

tions. There was evidence that other Certified Public Ac-

countants and accountants viewed Zimmerman’s audits of

the books of the Kenny Foundation as being improper.

App. 85

The trial was a long one, extending from March 19, 1963

to May 29, 1963. Eighty-five witnesses testified and 803

exhibits were received. The Court Reporters said that the

Record of 8,810 pages was the longest in their experience

in this District.

This case was tried ‘‘to the record.’’ Every plausible

objection was made, with supporting arguments and in de-

tail, to almost every item of evidence offered and to most

courses of action attempted by the government. It is not

to be inferred that counsel for any of the defendants acted

improperly. Each of them was most courteous and cooper-

ative with the Court, and conducted himself in the highest

professional manner. All of the defendants were repre-

sented by competent and experienced lawyers. The attor-

ney for Kline was a long-time Justice of the Minnesota

Supreme Court and one-time Attorney General of Minne-

sota. Zimmerma::’s counsel possessed special competence

in accountancy and the tax laws. The Chicago defendants

were represented by a team of three well-known attorneys

of long experience. The rights of each of these defendanis

was meticulously guarded at every stage of the proceedings.

All defense counsel were conscientious and dedicated to

their professional responsibilities. No lawyers could have

represented the rights of these defendants more vigorously.

Although the defendants in thei: motion complain abov*

improper instructions given to the jury, no instance of this

is cited. The fact is that the Court gave every, or almost

every, instruction which was requested by the defendants,

and usually in the language suggested. Literally dozens

of those requested by the United States Attorney were

denied. The Court many times stated to the Urited States

Attorney that if there was any question as to its sulings on

App. 86

a close, disputed point of evidence or procedure in the

trial, the ruling would be made in favor of the defendants.

(See, e.g., Tr. pp. 2105, 2106, 3557, 5695) It was.

Because this case was tried principally ‘‘to the record,’’

the Court herein has discussed more extensively than usual

the principal points which will undoubtedly be urged in the

inevitable appeal that will follow. This has been done not

alone to reflect the reasoning behind the action which the

Court takes with reference to the motions made, but also

to afford to the members of the Court of Appeals a greater

insight and ‘‘feel’’ of the actual irial, the problems as-

sociated with it, and the reasoning behind the disposition

which the trial Court made of the disputed points.

The Court is fully satisfied that each of these defend-

ants received a fair trial from an impartial jury: that all

evidence received was properly received; that no action

of the trial Court was prejudicial to the defendants; and

that the verdicts of guilt as expressed in the verdicts are

ampiy supported by competent evidence.

All motions are denied.

Dated: ‘September 10, 1963.

Edward J. Devitt

United States District Court

App. 87

APPENDIX D

Judgment of the United States Court of Appeals for

the Eighth Circuit, entered January 25, 1965:

This cause came on to be heard on the record from the

United States District Court for the District of Minnesota,

and was argued by counsel.

On Consideration Whereof, It is now here Ordered and

Adjudged by this Court that the judgments and sentences

of the said District Court, in this cause be, and the same

are hereby, affirmed.

And it is further Ordered by this Court that the defend-

ants in the said District Court, Abraham L. Koolish, David

F. Koolish and John B. Carnell, do surrender themselves to

the custody of the United States Marshall for the District

of Minnesota if not now in custody, in execution of the

judgments and sentences imposed upon them and zach of

them, within thirty days from and after the date of filing

of the mandate of this Court in the District Court.

App. 88

APPENDIX E

Order entered March 26, 1965 by the Supreme Court of

the United States (per Mr. Justice Byron R. White):

Upon Consideration of the application of counsel for

petitioners,

It Is Ordered that the time for filing a petition for writ

of certiorari in the above-entitled case be, and the same is

hereby, extended to and including April 26, 1965.

APPENDIX F

Constitutional Provisions, Statutes and Rules Involved

The Fifth Amendment to the Constitution of the United

States provides:

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a Grand Jury, except in cases arising in

the land or naval forces, or in the Militia, when in

actual service in time of War or public danger, nor

shall any person be subject for the same offence to be

twice put in jeopardy of life or limb; nor shall

be compelled in any criminal case to be a witness

against himself, nor be deprived of life, liberty, or

property, without due process of law; nor shall private

property be taken for public use, without just com-

pensation.

The Sixth Amendment to the Constitution of the

United States provides:

In all criminal prosecutions, the accused shall enjoy

the right to a speedy and public trial by an impartial

jury of the State and district wherein the crime shall

have been committed, which district shall have been

previously ascertaimed by law, and to be informed of

the nature and cause of the accusation; to be confronted

App. 89

with the witnesses against him; to have compulsory

process for obtaining witnesses in his favor, and to

have the Assistance of Counsel for his defence.

Ruie 21(a) of the Federal Rules of Criminal Procedure

provides :

21. Transfer from the District or Division for

Trial

(a) For Prejudice in the District or Division.

The court upon motion of the defendant shall transfer

the proceeding as to him to another district or division

if the court is satisfied that there exists in the district

or division where the prosecution is pending so great

a prejudice against the defendant that he cannot obtain

a fair and impartial trial in that district or division.

Rule 29(a) of the Federal Rules of Criminal Procedure

provides :

29. Motion for Acquittal.

(a) Motion for Judgment of Acquittal. Motions

for directed verdict are abolished and motions for

judgment of acquittal shall be used in their place. The

court on motion of a defendant or of its own motion

shall order the entry of judgment of acquittal of one

of more offenses charged in the indictment or informa-

tion after the evidence on either side is closed if the

evidence is insufficient to sustain a conviction of such

offense or offenses. If a defendant’s motion for judg-

ment of acquittal at the close of the evidence offered

by the government is not granted, the defendant may

offer evidence without having reserved the right.

App. 90

APPENDIX G

Rebuttal argument of the United States Attorney deliv-

ered May 27, 1963 (T. 8668-8691) :

Mr. Lord: Your honor, Judge Devitt, ladies and gen-

tlemen of the jury.

I don’t suppose that I have ever been or ever will be

in a trial where there have been more capable adversaries

in terms of counsel for the defendants.

Harry Peterson is a man of great integrity ard broad

experience, who was Attorney General for many years and

then one of our most learned and able justices on the

Supreme Court before he resigned.

Mr. Jenner, who probably has more mer:. badges for

being a great trial lawyer than any man in America, and

Mr. Sprowl, his senior partner, who has had even more

experience.

Also, Mr. Mikeworth, who brings to us all of his ex-

perience as a certified public accountant and former In-

ternal Revenue Agent man, and an attorney in his own

right. These are really men with whom it is a privilege

to work.

One of the real gratifications you get out of being a

Government counsel and h

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