Petition for Writ of Certiorari — Irving v. United States
Supreme Court brief1971
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IN THE | E. ROBERT SEAVER, OLERK
@
United States Supreme Court
OCTOBER TERM, 1970
No. 9
K. K. IRVING,
Petitioner,
vs
UNITED STATES OF AMERICA,
Respondent,
PETITION FOR A WRIT OF CERTIORARI TO THE
: UNITED STATES COURT OF APPEALS
: FOR THE SEVENTH CIRCUIT
ERLE A. KIGHTLINGER
HOWARD J. DeTRUDE, JR.
ROBERT A. GARELICK,
KIGHTLINGER YOUNG GRAY
and HUDSON
Sixth Floor First Federal Building
11 North Pennsylvania Street
Indianapolis, Indiana 46204
Counsel for Petitioner
Central Publishing Company, Inc., Indianapolis, Ind.
INDEX
Page
Opinions Below ....... acne cVakeaas (rekw ka eeeers 2
Sr Er ree ree ey re seer 2
ements PINE i obo dais ics sons awe Par ee nee 2
Statutes and Federal Rules Involved ................ 3
RIL ON i obo 5nd oe Was es edn cuxdaauiciene 4
Reasons for Granting the Writ ........... se teee ees 8
CII peda enkeecuaeaees Sie saba ks 3 RESO 23
Appendix
A. Opinion and Judgments Below ............... la
B. Sample Cases Where Hearings Were Granted .. 41a
LIST OF AUTHORITIES CITED
Cases
Page
Brady v. U. S., —— U. 8. ——, 25 L. Ed. 2d 747, 758 ... 10
Brown v. Beto, 377 F. 2d 950 (5th Cir., 1967) ........ . 10
Glasser v. United States, 375 U.S. 60, 85, 2 S. Ct.
PEs hy TO I OD ips 5 hk ka opr hs bss naa os cabs 21
Little v. United States, 331 F. 2d 287 (8th Cir., 1964) ... 18
Machobroda v. United States, 368 U. S. 487, 493, 7 L.Ed.
a 475, 476, G2 BS. Ch. S10 iii. cide cui wie ies vei owsioe 11
Palmer v. U.S., 339 F. 2d 861 (10th Cir., 1956) ....... 18
Rabinowitz, et al v. U. S., 366 F. 2d 34 (Sth Cir. 1966) .. 21
Sanders v. U. S., 415 F. 2d 621 (5th Cir., 1969) ........ 18
Smith v. Texas, 311 U.S. 128, 136, 61 S. Ct. 169, 165,
ey Be Se kde Km cda Ha be AA AN sa kaeeabie's 21
Smith v. U. S., 223 F. 2d 750 (5th Cir., 1955) .......... 15
Smith v. U. S., 360 U. S. 1, 17-18, 3 L.Ed. 2d 1041, 1953
(Separate Opinion) .............. ce eee ee eee eee 15
Thiel v. Southern Pacific Co., 328 U.S. 217, 220, 66
S. Ct. 984, 985, 90 L.Ed. 1181 (1946) ................ 21
Townsend v. Burke, 334 U.S. 735, 92 L.Ed. 1690
GUE oie RAS gk he oa Paha eA AANA Sada ber ecneeds 13
United States v. Cashin, 281 F. 2d 699 (2nd Cir., 1960) .. 18
United States v. Central Rubber Co., 74 F. Supp. 368
6 8 RR ON: ere ree rete er or er 10
SP GER TIAESID al
LIST OF AUTHORITIES CITED—Continued
Cases—Continued
Page
United States v. Duke, 263 F. Supp. 828 (S.D. Ind.
wpscign OL EEE To FETT RR te Sete RRR aS 23
- United States v. Greenberg, 30 F.R.D. 164 (D.C. N.Y.,
sides SEE OL TEE OTe RE ne Ee 18
United States v. Hughes, 195 F. Supp. 795 (S.D. N.Y.,
(ating, REE ETE Pe OTR PE OTE OPIOID Tt) 18
United States v. Reonette, 291 F. Supp. 461, 463 (S.D.
ade! etn RR Te ER TT Tee TEP nn 22
U.S. v. Myers, 374 F. 24 707 (34d Cir., WRF 14
U.S. v. Rundel, 219 F. Supp. 538 i) MES ET Eee 14
U.S. v. Solomon, 442 F. 24.1110 (7th Cir., 1970) ...... 15
Whitus v. Georgia, ( 1967), 385 U.S. 545, 550, 17 L.Ed.
“scsthanes, Seen HECTOR Oars ae 22
Witcher v. Peyton, 405 F. 2d 725 (4th Cir., 1969) ...... 22
Statutes and Federal Rules
Be A SII ONN ick. dng eurdcbodcemecabdnn ddcocai 3
BP SN EE 050 hnwench baad dd ebewu as oc yal 2
6(b)(2), Federal Rules of Criminal Procedure ......... 6
Miscellaneous
1967 Judicial Conference Report, 42 F.R.D. 353 (1967) . 20
Black’s Law Dictionary, 4th Ed., p. 1353
iii
CO
IN THE
United States Supreme Court
OCTOBER TERM, 1970
No.
K. K. IRVING,
Petitioner,
vs
UNITED STATES OF AMERICA,
Respondent,
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
Petitioner prays that a Writ of Certiorari issue to re-
view the judgment of the United States Court of Appeals
for the Seventh Circuit entered in the case of United States
of America v. Fred G. Amick, et al.* on January 22, 1971.
* The appellants in the above entitled case other than Mr. K.
K. Irving were Fred G. Amick, Francis L. Broderick, William
M. Dowling, David R. Mayne, Gilbert E. McQuinn, H. R. Nash,
Walter C. Olsen, Leon O. Riggs, Van C. Volmer, Harold L.
Wymer, Indiana Investor & Business News, Inc., and Securi-
ties Services, Inc. Each appellant’s case was scparatel oo
eted but consolidated for purposes of filing an a ix and
oral argumeut only. This Petition for Writ of eriforart is
for Kenneth K. Irving only, all other Appellants below hav-
ing requested time to file a petition for a rehearing in the
Court of Appeals for the Seventh Circuit.
1
»
CITATIONS TO OPINIONS BELOW
Judgment without opinion of the United States District
Court for the Southern District of Indiana, Indianapolis
Division, was entered following Petitioner’s plea of nolo
contendere on July 28, 1967. The opinion of the United
States Court of Appeals for the Seventh Cirenit affirming
judgment is reported in — F. 2d — and is reprinted in
Appendix A, p. la.
JURISDICTION
The judgme, | of the Circuit Court of Appeals was en-
tered on January 22, 1971, reprinted in Appendix A, p. 1a.
The jurisdiction of the Court is invoked under 28 U.S.C.
Section 1254 (1).
QUESTIONS PRESENTED
1. Was Petitioner denied due process of law when the
Trial Court and United States Attorney implied len-
iency in exchange for a plea of nolo contendere imme-
diately prior to the commencement of the trial?
2. Was Petitioner denied due process of law when the
sentence imposed was based upon erroneous and mis-
leading information supplied by the United States At-
torney to the Court cx parte?
3. Does a person commit a separate crime each time he
uses the U. S. Mail in violation of 15 U.S.C. § 77q(a)
(Section 17 of the Securities Act of 1933), or is the
use of tiie U. S. Mail necessary only to invoke Federal
jurisdiction?
4. Whether Petitioner was entitled to an evidentiary hear-
ing upon a prima facie showing that the grand jury
3 |
3
that indicted him was improperly drawn, constituted
and arrayed so as not to represent a cross section of
the community.
Whether the grand jury that indicted PEtitioner was
illegally and unconstitutionally summoned, drawn and
arrayed in that a representative cross section of the
community was not obtained.
STATUTES AND FEDERAL RULES INVOLVED
15 U.S.C. ¢ 77q(a)
**(a) It shall be unlawful for any person in the offer
or sale of any securities by the use of any means or in-
struments of transportation or communication in inter-
state commerce or by the use of the mails, direetly or
indirectly—
‘“*(1) to employ any device, scheme or artifice to
dcfraud, cr
‘*(2) to obtain money or property by means of any
untrue statement of a material fact or any omission
to state a material fact necessary in order to make
the statements made, in the light of the circumstances
under which they were made, not misleading, or
‘*(3) to engage in any transaction, practice, or
course of business which operates or would operate
as a fraud or deceit upon the purchaser.’’
18 U.S.C. 1861 (prior to 1968 Amendment)
Any citizen of the United States who has attained
the age of 21 years and who has resided for a period
of one year within the judicial district, is competent to
serve as a grand or petit juror unless:
(1) He has been convicted in a State or Federal court
of record of a crime punishable by imprisonment
ated |
4
for more than one year and his civil rights have
not been restored by pardon or amnesty.
(2) He is unable to read, write, speak and understand
the English language.
(3) He is incapable, by reason of mental or physical
infirmities.
3. Rule 6(b) (2) Federal Rules of Criminal Procedure
**(2) Motion to Dismiss. A motion to dismiss the in-
dictment may be based on objections to the array or
on the lack of legal qualification of an individual juror,
if not previously determined upon challenge. An in-
dictment shall not be dismissed on the ground that one
or more members of the grand jury were not legally
qualified if it appears from the record kept pursuant
to subdivision (c) of this rule that 12 or more jurors,
after deducting the number not legally qualified, con-
curred in finding the indictment.’’
4. United States Constitution, Amendment 5
‘*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 forees, or in the Militia, whea in
actual service in time of war or public danger; nor
shall any person be subject for the same offense 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 compensation.’’
STATEMENT OF FACTS
On June 24, 1966, Petitioner, Kenneth K. Irving, was
indicted for violation of the Securities and Exchange Act
of 1933, 15 U.S.C. 77q(a). The indictment was in 41 counts;
5
38 counts charged specific violations of 15 U.S.C. 77q(a),
1 count charged violation of 77q(b), 1 count charged vio-
lation of 77e(a)(2), and 1 count charged conspiracy. The
indictment arose out of a public stock issue offered in the
State of Indiana by Air & Space Underwriters, Ine. to
raise sufficient capital to produce and distribute gyro-
planes.
This entire transaction began in 1959 when Umbaugh
Aircraft Corporation, a Florida corporation, was attempt-
ing to manufacture and sell gyroplanes. The Petitioner
purchased a franchise from Umbaugh to distribute the
gyroplanes in Indiana. The cost of the franchise was
$70,000.00. Umbaugh began getiing into financial diffi-
culties and the various franchise holders, including Peti-
tioner, paid additional funds to Umbaugh. After the
additional contributions were made, Umbaugh still did not
have sufficient capital and, in 1962, a petition for involnn-
tary bankruptey was filed in the Florida District Court.
While the Umbaugh bankruptey was pending, Air & Space
Underwriters, Inc. was formed by Petitioner and others
tor the purpose of salvaging the Umbaugh company and
to britg a new industry to Indiana. In 1963, Air & Space
Underwriters, Inc. submitted a plan of reorganization to
the Florida District Court. After a hearing the Florida
District Court approved the plan of reorganization. The
record in the Florida bankruptey proceeding shows that
included in the plan of reorganization was the sale of stock
by an intra-state public offering.
Air & Space Underwriters, Inc. began the public stock
offering which continued until June of 1965 when a civil
action was commenced entitled Securities & Exchange
Commission v. Robert S. Chappel, et al., Cause No. IP65-
C-279. The trial judge who tried this case heard the civil
BSE ee be OETKER *,
6
action and, on June 12, 1965, enjoined Air & Space Under-
writers, Inc. from selling stock.
On June 24, 1966, a grand jury indictment was returned
against Petitioner and others, which indictments charged
criminal violation for all acts complained of in the civil
action. Petitioner filed a motion, under Rule 6(b) (2)
F.R.C.P., challenging the array of the grand jury. The
motion raised the question of whether the grand jury was
constitutionally constituted because of the practice of us-
ing the ‘‘key man’’ system for choosing grand jurors. With
the motion, Petitioner filed 79 affidavits taken from the
key men as to the source of their recommendations of pros-
pective jurors ultimately used by the Clerk. These affi-
davits demonstrated that a true and representative cross
section of prospective jurors of the district could not be
obtained by the method employed. The trial court sum-
marily denied this motion.
The case was called for trial on May 31, 1967. Petitioner
appeared, with counsel, ready for trial. The trial did not
start on May 31st. Rather, the day was spent in chambers
conferring with the Court on various aspects of the case.
During this conference, the Court advised the parties that
he had heard the evidence in the civil case and that it ap-
peared to him that Petitioner was acting in good faith in
attempting to bring new industries to Muncie, Indiana. He
further advised that if the Petitioner desired, he would
accept a plea of nolo contendere. The United States At-
torney had no objection to this and indicated that it would
not make any recommendation to the Court concerning this
defendant. The next day, Petitioner changed his plea to
nolo contendere on 21 of the 42 counts of the indictment.
At this time the parties, including the Court, agreed that
the Court would make his finding on the plea by con-
sidering only the evidence in the civil action and Petition-
a
er’s statements to the Securities & Exchange Commission.
Having heard this agreement, Petitioner departed and did
not participate in the trial that began against the remain-
ing defendants.
The jury trying the remaining defendants found them
guilty on various counts. The case was continued until
July 28th which was to be the sentencing hearing. Peti-
tioner appeared for the sentencing with counsel. Previous-
ly, Petitioner had filed 36 affidavits attesting to his good
character. The trial judge first asked each defendant what
he had to say before imposing sentence. When Mr. Irving
stepped before the Court, it was obvious something had
happened between the conference of May 31st and July
28th. The Court accused Petitioner of lying to the Florida
District Court, specifically referring to the Petitioner tel]-
ing the Florida Court that there would be no publie stock
offering. Further, the Court accused Petitioner of mak-
ing a profit on the transaction; he accused the Petitioney
of lying to the Florida Court in representing that he had
assets of $1,000,000.00, and he told Petitioner that the
plan of reorganization was steeped in fraud. While the
Conrt was making these various accusations, he was re-
feering to documents that neither Petitioner nor. his coun-
sel had seen. While Petitioner was attempting to answer
the accusations, the Court turned to the Assistant United
States Attorney and said, *‘you made a mistake in these
figures.’’ At this point, it became clear that the United
States Attorney had supplied the Court with material to
be used in fixing the penalty. No one knew what all was
furnished to the Court by the United States Attorney.
Petitioner and his attorney only knew that the accusa-
_tions made by the Court to Petitioner were erroneous.
After all the defendants had completed their statements to
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the Court, the sentences were imposed and Petitioner, who
had entered a plea of nole contendere, received the harsh-
est sentence of all. In fact, of all the defendants who pled
guilty or nolo contendere, only Petitioner and two
others received an executed sentence.
An appeal was commenced to the Seventh Cireuit Court
of Appeals and the trial court was affirmed.
REASONS FOR GRANTING THE WRIT
OF CERTIORARI
I
THE PETITIONER WAS DENIED DUE PROCESS
OF LAW WHEN THE TRIAL COURT AND UNITED
STATES ATTORNEY IMPLIED LENIENCY IN EX-
CiANGE FOR A PLEA OF NOLO CONTENDERE IM-
MEDIATELY PRIOR TO THE COMMENCEMENT OF
THE TRIAL.
The events that transpired during the conference when
the trial court implied leniency in exchange for a plea of
nolo contendere coupled with the sentence imposed renders
the entire proceeding unconstitutional.
The trial of the cause was to commence May 31, 1967,
at which time Petitioner appeared, with counsel, ready
to proceed. Trial did not commence but, rather, a confer-
ence was held wherein the Court discussed various aspects
of the case. The record of this conference, which is an
affidavit uncontradicted by anyone, reveals the following:
THE COURT:
‘¢. .. he had seen the aireraft fly and that it did, in
fact, rise into flight from a spot without ground roll
and that he was impressed by what he saw. He fur-
y
ther stated that he expected the jury to witness the
aircraft fly and to observe its flight characteristics. ’’
‘*. . . ‘Mr. Kightlinger, lets talk about your client.
Here’s a couple of men, Mr. Irving and Mr. Amick,
who after having been reasonably successful in the
materials and/or construction business, got involved
in an airplane deal in Florida. Due to their enthusi-
asm for the aircraft, about which they knew little or
nothing, they get involved for quite a bit of money.
When the thing went bust down there, they thought
they saw a chance to save the money and also bring
a new industry to Indiana, and did, in fact, through
a plan of re-organization, bring the project to Mun-
cie. They obviously knew little about the airplane
business and relied on engineers and others to guide
them’... . ‘I never did say they had to stop sell-
‘ing stock, I said they had to stop misrepresenting the
stock’.’’
After these remarks, the Petitioner’s counsel asked:
‘““*Mr. Stein, in light of what we have just heard,
what is the Government’s attitude about all this?’ ”’
The Government replied:
“*. . . the Government would not make any recommen-
dation to the Court and that the Government was not
interested in further harrassment of any of the de-
fendants. That their interest was in stopping the
abuses.”’
Judge Dillin then stated:
‘* ‘Certainly no one is going to plead Guilty, when
I have already indicated I will accept a plea of Nolo
Contendere’.’’
The Petitioner was aware that other defendants had
pled nolo contendere and had received suspended sen-
Oe een
10
tences. The only logical inference from what transpired
in the Court’s chambers and the suspended sentences that
were imposed is that the Court and the United States ai-
torney successfully induced Petitioner to enter a plea of
nolo contendere.
A plea of nolo contendere is not accepted in all cases
but has limited application. It has been stated that:
‘There are, however practical considerations which
allegedly speak for a retention of the plea. They are
said to exist in the type of wrong which ‘is not malum
in se, but rather malum prohibitative’ and peculiarly
of an economic nature.’’ 152 A.L.R. 253, at 295. See
also, United States v. Socony-Vacum Oil Co., 23
I’. Supp. 531 (D.C., 1938)
For this reason, a plea of nolo contendere has been used
in securities cases, anti trust cases and the like. Federal
Courts have accepted such pleas and have done so in a
spirit of ‘‘compromise’’ as was stated in United States v.
Central Rubber Co., 74 F.Supp. 368 (N.D. Ohio, 1947) :
‘*Such pleas in such circumstances have been consid-
ered in the nature of compromises.”’ at 369.
This Court has recognized plea bargaining as a judicial
fact of life, Brady v. U.S., — U.S. —, 25 L. Ed. 2d 747,
758, although trial judges should not participate therein.
Brown v. Beto, 377 F. 2d 950 (5th Cir., 1967).
With this general understanding of the plea of nolo
contendere, it becomes clear how the Petitioner was in-
duced into entering such a plea. As we have pointed out
previously, what transpired in the Judge’s chambers on
May 31, 1967, clearly led Petitioner and his counsel to
believe that there would be leniency shown in exchange
for a plea of nolo contendere. The Court made it clear that
11
he was familiar with the facts of the case having tried the
civil action. He clearly stated that he felt Mr. Irving was
enthusiastic about the fact that he was bringing a new
industry to Muncie, Indiana. The United States Attorney
further agreed that he would make no recommendation
regarding an executed sentence and was not interested in
harassing anyone. With this state of the record, to argue
that Mr. Irving was not induced to enter a plea of nolo
contendere is to ignore the obvious.
It is well settled that an induced plea is a denial of
due process. In Machiobroda v. United States, 368 U.S.
487, 493, 7 L. Ed. 2d 473, 478, 82 S. Ct. 510, this Court
held:
““A guilty plea, if induced by promises or threats
which deprive it of the character of a voluntary act,
is void. A conviction based upon such a plea is open
to collateral attack. See Walker v. Johnston, 312 US
275, 85 L ed 830, 61 S Ct 974; Waley v. Johnston, 316
US 101, 86 L ed 1302, 62 S Ct 964; Shelton v. United
States, 356 US 26, 2 L ed 2d 979, 78 S Ct 563, revg
(CA5 GA) 246 F2d 571.”
Further, this Court has held that it is a violation of
the Fifth Amendment for a Court or the United States
Attorney to deny a defendant the right to a free exercise
of his choice in pleading to a criminal indictment.
Brady v. U.S., — US. —, 25 L. Ed. 2d 747, 756.
Thus, it is clear that an induced plea is unconstitutional.
In the instant case, the record is clear that the trial judge
and the United States Attorney induced the plea of nolo
contendere. As a fact of life, even an attorney, as well as
his client, can be subject to judicial and Government
blandishments.
12
II
THE PETITIONER WAS DENIED DUE PROCESS OF
LAW WHEN THE SENTENCE IMPOSED WAS BASED
UPON ERRONEOUS AND MISLEADING INFORMA-
TION SUPPLIED BY THE UNITED STATES AT-
TORNEY TO THE COURT EX PARTE.
Following the conference of May 31, 1967, the Petitioner
entered his plea of nolo contendere at which time the Judge
and the parties agreed that the Court would consider only
the evidence heard in the civil action and statements made
to the Securities & Exchange Commission. Following this
agreement, Petitioner left the Courtroom feeling confident
that anything that was brought out in the trial of the re-
maining defendants did not have to be refuted by him.
Then, on July 28, 1967, Petitioner appeared with all of the
other defendants for the sentencing. At the sentencing
hearing, the Court first asked all of the defendants to make
whatever statements they desired in mitigation. The Court
heard all statements before imposing any sentences. When
Petitioner went before the Court he learned for the first
time the Court had not only considered the evidence ad-
duced at the trial, which he specifically agreed not to do,
but more importantly considered erroneous statements of
fact submitted by the United States Attorney. The Court
‘*accused’’ the Petitioner:
1. of lying to the Florida District Court when he rep-
resented that he had assets of One Million Dollars ($1,000,-
000.00) ;
2. of standing mute when it was stated to the Florida
District Court that no sale of stock was contemplated;
3. of making a profit from the stock sale; and
13
4. of entering into an agreement with Umbaugh and
Streets contrary to the orders of the Florida District Court.
The record discloses that the sentence imposed upon Pe-
titioner was a result of the Court considering the evidence
heard at the criminal trial as well as the erroneous infor-
mation furnished by the United States Attorney ex parte.
First, the Court heard mitigating statements from ten (10)
different defendants. Then, when those statements were
concluded, the Court immediately imposed sentences which,
in Petitioner’s case, was seven (7) years imprisonment.
During the Petitioner’s statement, it became obvious that
the United States Attorney had ex parte furnished the
Court with erroneous information. When the Court ac-
cused Petitioner of making a profit on the securities sale,
Mr. Irving attempted to demonstrate that he had in fact
suffered a loss. At this point, the Court turned to Mr. Man-
ahan, Assistant United States Attorne y, and said:
‘‘THE COURT: And then you had something left
over. Why, I think these figures are wrong. I am talk-
ing to Mr. Manahan. I think his figures give a wrong
impression of this deal. And although I still can’t see
$200,000, Mr. Irving, it does appear to me at this time
that you have taken a loss of probably in excess of
$150,000, just based on what I am looking.’’ (R. 529).
Further, while the Court was making the accusation,
he was referring to papers that had never been furnished
Petitioner and there was no way Petitioner could ade-
quately refute this information in the Court’s Possession.
It is well settled that a sentence based upon erroneous
information or erroneous belief is a denial of due process.
In Townsend v. Burke, 334 U.S. 735, 92 L. Ed. 1690: (1958),
this Court held:
14
‘The trial court’s facetiousness casts a somewhat
somber reflection on the fairness of the proceeding
when we learn from the record that actually the charge
of receiving the stolen saxophone had been dismissed
and the prisoner discharged by the magistrate. But it
savors of foul play or of carelessness when we find
from the record that, on two others of the charges
which the court recited against the defendant, he had
also been found not guilty. Both the 1935. charge of
larceny of an automobile, and the 19388 charge of entry
to steal and larceny, resulted in his discharge after
he was adjudged not guilty. We are not at liberty to
assume that items given such emphasis by the sentenc-
ing court, did not imfluence the sentence which the
prisoner is now serving.
‘*We believe that on the record before us, it is evi-
dent that this uncounseled defendant was cither over-
reached by the prosecution’s submission of misin-
formation to the court or was prejudiced by the court’s
own misreading of the record. Counsel, had any been
present, would have been under a duty to prevent the
court from proceeding on such false assumptions and
perhaps under a duty to seek remedy elsewhere if they
persisted. Consequently, on this record we conclude
that, while disadvantaged by lack of counsel, this
prisoner was sentenced on the basis of assumptions
concerning his criminal record which were materially
untrue. Such a result, whether caused by earelessness
or design, is inconsistent with due process of law, and
such a conviction cannot stand.’’ (Our emphasis.)
Further, the fact that Petitioner was represented by
counse] is not material.
U.S. v. Myers, 374 F. 2d 707 (3rd Cir., 1967) ;
U.S. v. Rundle, 219 F. Supp. 538 (1963).
Finally, while the Court could have been honestly mistaken
as to the record, ex parte communications between the
15
Government and Court are improper and have no place in
an adversary proceeding. They are presumptively prejudi-
cial.
Smith v. United States, 360 U.S. 1, 17-18, 3 L. Ed.
2d 1041, 1053 (Separate opinion) ;
See also Smith v. United States, 223 F. 2a 750 (Sth
Cir., 1955) (same case) ;
U.S. v. Solomon, 422 F. 2a 1110 (7th Cir., 1970).
The record in this case clearly demonstrates that the
Court was mistaken in the four (4) accusations alluded
to previously.
Regarding the Court accusing Petitioner of lying to the
Florida District Court concerning his ownership of $1,-
000,000.00 in assets, there is nothing which would show
this to be a lie. Petitioner recognizes that in 1967 he gave
financial data to the probation officer during a pre-sen-
tence investigation but this certainly does not demonstrate
that in 1963 he did not have $1,000,000 worth of assets. To
everyone’s knowledge there never was a financial state-
ment given the probation officer but merely financial data
furnished at an interview. To accuse the Petitioner of
lying under these circumstances is not justified.
The second accusation, that Petitioner told the Florida
District Court that he did not intend to sell stock, is con-
trary to the record. The record in the bankruptcy hearing
demonstrates that Petitioner’s attorney made the follow-
ing representation:
‘**MR. MORRISON: There has been filed here, Your
Honor, in this case heretofore, I believe, a committment
from a bank to the extent of $800,000.00 to be made
available to the Irving group for this project. Like-
ale at
7S eR trp EtS gay ATER Fe Ne gE . a
RUE TREO) Oo ma
PRE RP te RY oy
Pe er Le ams
16
wise, they contemplate an intra-state offering of se-
eurities in Indiana, which will also contribute to the
assets of Air and Space Underwriters. There are many
private individuals who seek to secure such stock, but
of course it cannot yet be offered. There appears,
Your Honor, to counsel that there is more than ade-
quate financial resources behind the Irving plan to
execute it fully.’’’ (R. Exhibits § II-18).
The third accusation, that Petitioner made a profit on
the securities sale, was apparently straightened out when
the Court found Mr. Manahan’s error in arithmetic; but,
the final accusation, that Petitioner had entered in an
agreement with Umbaugh and Streets contrary to th:
Florida Court’s order, was based upon pure speculation.
There is nothing in the record anywhere which substanti-
ates this misconception. In fact, the only evidence is that
all agreements with Umbaugh and Streets which were
made prior to the reorganization plan being approved were
cancelled pursuant to the Florida Court’s order. No where
is there any evidence that this order was disobeyed.
The only way the Court to have such a misconception
is if the ex parte material furnished by the Government
contained such reference.
Fairness in criminal cases has been a mandate ever
since the Constitution was adopted. In the instant ease,
fairness was completely lacking. When the Court indicates
that there will be leniency shown in exchange for a plea
of nolo contendere and the United States Attorney agrees
in this procedure the reviewing Court should insist that
their understandings be earried out. To induce a plea and
agree not to consider evidence heard at a criminal trial
which lulls a person into a feeling of confidence, and then
to consider such evidence, cannot be countenanced. The
opinion of the Court of Appeals disposes of this point by
17
referring to the attorney’s offer to the Government at the
time to consider the evidence to be adduced upon the trial.
But the Appeals Court neglects to point out that the Gov-
ernment rejected this suggestion and the agreements as
referred to herein were then firmed. The Government can-
not now have it both ways, any more than the Petitioner
could have done so.
As a practical matter, the attorney and his client, the
Petitioner, are confronted at sentencing with a mass of
charges distilled from the trial by the Judge and, obvi-
ously, a meaningful reply under these circumstances to
correct erroneous assertions was not possible. The require-
ment of due process cannot neglect the actual setting in
which such miscarriages of justice are initially born. An
even greater miscarriage of justice occurred whenever the
prosecution ex parte implanted erroneous information in
the mind of the Court. In this ease, when the United States
Attorney stated that he would make no recommendation
regarding an executed sentence then the Assistant United
States Attorney, in the role of an advocate, submits mis-
information to the Court ex parte, the climate created is
inexcusable. Such conduct is the antithesis of fairness
and due process and should be reviewed by this Court.
III
DOES A PERSON COMMIT A SEPARATE CRIME
EACH TIME HE USES THE U.S. MAIL IN VIOLA-
TION OF 15 U.S.C. § 77q(a) (Section 17 of the Securities
Act of 1933), OR IS THE USE OF THE U.S. MAIL
NECESSARY ONLY TO INVOKE FEDERAL JURIS-
DICTION. /
The indictment in this case consisted of thirty-nine (39)
counts or securities fraud. Each count involved a separate
it es] a od ag
MESON RO Ne GUNN
ERE FTE AS CaN N eae in tate, oy
i ae
IR St gs ae
18
mailing. The Court found against Petitioner on six (6)
counts. This raises the question of whether each mailing is
a separate eriminal offense or whether the mailing is only
a prerequisite to involving the Federal Seeurity Law (15
U.S.C. 77 (q)a). The Seventh Cireuit Court of Appeals
failed to decide whether each mailing was a separate of-
fense or whether each scheme was a separate offense. Other
Courts that have ruled on this question have held both
ways. The Second and Eighth Cirenit have held that the
use of the mails is not a part of a scheme but is only juris-
dictional.
United States v. Cashin, 281 F. 2d 699 (2nd Cir.,
1960) ;
Little v. United States, 331 F. 2d 287 (8th Cir.,
1964) ; é
United States v. Greenberg, 30 F.R.D. 164 (D.C. N.Y.,
1962) ;
United States vr. Huges, 195 FP. Supp. 79 (S.D.
N.Y., 1961) ;
The Tenth and Fifth Cireuit have held that each mailing
is a separate offense.
Palmer v. U.S. 339 F, 2d 861 (10th Cir., 1956),
Sanders v. U.S, 415 F. 2d 621 (5th Cir., 1969).
It would appear that the view taken by the Second and
Eighth Circuit is the better reasoned view. It would appear
that the Securities Act is designed to prevent a fradulent
scheme from being employed to sell securities. The scheme
is the important element necessary to create a criminal of-
19
fense. It becomes a Federal crime when the scheme is used
interstate. The Securities Act reads:
‘**Whoever, having devised or intending to devise
any scheme or artifice to defraud * * * for the purpose
of executing such scheme or artifice to @ ‘raud * * *
for the purpose of executing such scheme or artifice
or attempting so to do, places in any post office * * *
any matter or thing * * shall be fined * * *,’ ”
From this language, it is clear that Congress intended
to prohibit a fradulent scheme and provide that the use of
the mail was jurisdictional. Subjecting Petitioner to a plea
to some portion of thirty-nine (39) counts, all arising from
one (1) alleged scheme, is erroneous.
Further, the Court of Appeals failed to consider this
point on behalf of the Petitioner. Here, Petitioner entered
a plea of nolo contendere to twenty-one (21) counts
of the indictment. By refusing to consider this point as to
Petitioner, the Seventh Circuit has tacitly approved the
position of the Tenth and Fifth Circuits which has held
that each mailing is an indictable offense. This, then, adds
to the split between the Circuits and requires clarification
by this Court.
It is fundamental that criminal law be clear and unam-
biguous. With a split of authority as to the true meaning
of the Securities Act, there is such an ambiguity that it is
impossible for a person to know what the law is. This am-
biguity should be removed. In view of sentences to be
served consecutively, the question to this Petitioner is
more than academic.
Tee Denice MARRS tie Mich a
20
IV
THE DENIAL OF AN EVIDENTIARY HEARING
WHERE A PRIMA FACIE SHOWING IS MADE IS
ERROR.
At the outset of this case, Petitioner filed a motion to
dismiss the indictment pursuant to Rule 6(b) (2) of the
Federal Rules of Criminal Procedure objecting to the
array of the grand jury because it was selected by the use
of the key man system. In support of the motion, Petitioner
filed seventy-nine (79) affidavits reflecting interviews
with the various ‘‘key men”’ used by the Clerk of the dis-
trict and the standards they used in submitting names of
prospective jurors. The District Court overruled this
motion without a hearing.
The affidavits (Defendants-Appellants Joint Exhibits,
Section 1) showed that the key men used personal stan-
dards in submitting names of prospective jurors which
standards were illegal and which made it impossible to ob-
tain a representative cross section of the district. For
example, sixteen of the affidavits show that women were
excluded; five clearly indicate cconomic discrimination;
five indicate that potential jurors were excluded because of
their religion or lack of it; two excluded people because of
their politics; four excluded negroes, and when asked why
negroes were excluded stated that they did not know any
well enough; and one excluded anyone not of his religious
or racial group; four excluded persons on the basis of their
particular occupation.
In spite of these affidavits and without any counter-
affidavits or evidence, the Court summarily overruled Peti-
tioner’s motion.
The key man system has been the subject of much litiga-
tion and concern. The Judicial conference in 1967, 42
21
F.R.D. 353 (1967) condemned this system that has ‘‘al-
lowed for unintentional as well as intentional discrimina-
tion’’. The landmark case of Rabinowitz et al. v. United
States, 366 F. 2d 34 (5th Cir., 1966), condemned the use of
‘*key men’’-as a method of selechug jurors. As a result
trial courts, almost without exception, granted hearings to
scrutinize the selection of grand and/or petit jurors where
the question has been raised. (See Appendix B, p. 41a.)
Congress has now abolished the use of the key man system
by the Jury Selection Service Act of 1968 amending 28
U.S.C. 1861 et seq.
The grand jury system is a critical element in criminal
judicial process and its fair administration is essential to
achieve a workable system of criminal justice. Thus, it is
incumbent upon District Courts to. earefully analyze their
selection process to insure that such a system complies with
the requirements established by this Court.
Thiel v. Southern Pacific Co., 328 U.S. 217, 220, 66
S. Ct. 984, 985, 90 L. Ed. 1181 (1946) ;
Smith v. Texas, 311 US. 128, °136, 61 S. Ct. 164,
165, 85 L. Ed. 84;
Glasser v. United States, 315 U.s. 60, 85, 62..S. Ct.
457, 471, 86 L. Ed. 680.
The affidavits filed by Petitioner were sufficient to show
a prima facie case which required an answer by the Govern-
ment. A prima facie case has been defined as:
‘A litigating party is said to have a prima facie case
when the evidence in his favor is sufficiently strong
for his opponent to be called on to answer it. A prima
facie ease, then, is one which is established by suffi-
cient evidence, and can be overthrown only by rebut-
ting evidence adduced on the other side. In some cases
CHORE IR PO OK: PRT AREA Ov A ORE Shy Pu
POS LOOMS IE EES
wR
RT eS
yer pai ', Se eee ee ee ee
22
the only question to be considered is whether there is
a prima facie case or not. Thus a grand jury are bound
to find a true bill of indictment, if the evidence before
them creates a prima facie case against the accused:
and for this purpose, therefore, it is not necessary for
them to hear the evidence for the defense. Mozley &
Whitley. And see State v. Hardelein, 169 Mo. 579, 70
S.W. 130; State v. Lawlor, 28 Minn. 216, 9 N.W. 698.”’
Black’s Law Dictionary, 4th Ed., p. 1353.
In the instant case, the Government made no factual re-
sponse. The Supreme Court recently, in Whitus-v. Georgia,
(1967), 385 U.S. 545, 550, 17 L. Ed. 2d 599, 604, stated:
‘However, once a prima facie case is made out, the
burden shifts to the prosecution.’’
In the instant case, the highly subjective approach and
illegal standards used by the great majority of the key
men is at war with principles insisting upon a jury com-
posed of a fair cross section of the community. Witcher v.
Peyton, 405 F. 2d 725 (4th Cir., 1969). Yet, the Court said
nothing about it.
The hearing requested by Petitioner would have given
him the opportunity to conduct discovery and subpoena
witnesses. No investigation of any kind had been instituted
in the Southern District of Indiana to examine the selection
of jurors prior to Petitioner’s motion. This sharply con-
trasts with reported decisions which indicate zealousness
to conduct such earings, e.g., United States v. Leonette,
291 F. Supp. 461, 463 (S.D. N.Y. 1968). A system that at the
very time of Petitioner’s motion had been condemned from.
all quarters should at the very least been carefully scruti-
~ nized rather than summarily sanctioned. The Court of Ap-
peals disposed of this question by referring to Judge Steck-
eof
23
ler’s opinion in United States v. Duke, 263 F. Supp. 828
(S.D. Ind. 1967). The Government, in its brief to the Court
of Appeals, referred to the fact that the 79 affidavits taken
by counsel for Petitioner were considered in the Duke case.
This reference is correct, but what really happened is that
counsel for Petitioner talked with the 79 key men, secured
their affidavits and prepared for an evidentiary hearing.
Subsequent to the filing of the motion, the motion in Duke
was filed and the affidavits were copied by the attorney
representing Duke and presented to Judge Stickler. Coun-
sel, in Duke, then presented his argument and peutioner’s
counsel, who had gathered all of the facts, was precluded
from participation. By this method, the Government was
able to obtain a stamp of approval on the jury selection
method without this Petitioner or his counsel participat-
Ing.
CONCLUSION
The Petitioner asserts and raises questions of constitu-
tionality pertaining to his treatment by the trial court,
from the selection of the Grand J ury that indicted him, to
the handling of his plea, and his sentencing. The Grand
Jury which indicted the Petitioner was improperly drawn
so that it was impossible to obtain jurors who represented -
a fair cross-section of the community. The Petitioner was
denied a hearing upon the issue. The Court of Appeals dis-
posed of the question, finding that the ruling of another
judge of that same Court in a subsequent case, using Peti-
tioner’s affidavits and evidence, sufficed as a hearing. This
foreclosed the Petitioner from participating in an important
aspect of his own case pertaining to a question that he had
initially raised, and had supported by affidavits, and was
entitled to call witnesses, examine them, and cross-examine
them in support of his position.
24
Prior to a change in plea from not guilty to nolo conten-
dere, the Petitioner had reasonable expectations of leniency
in exchange for the plea which followed discussions of the
Petitioner, other parties, the Court, and the Government.
However, the Petitioner received a i.arsh sentence, which
was unjustified in the light of the discussions inducing the
plea, and the agreements made pursuant to its entry, which
were not observed.
The procedure at sentencing compounded the error. Here
for the first time the Petitioner found that the United
States Attorney had ex parte furnished the Court with in-
formation to be used in fixing the penalty. The Court
further considered information which, under the stress of
the moment, could not be meaningfully explained although
satisfactory explanations existed. Obviously information
furnished to the Court was erroneous.
This treatment of the Petitioner was further aggravated
by a forty-one count indictment for one alleged violation of
the Securities Act. The plea to the multiple count indict-
ment resulted in consecutive sentences. There exists a split
of authevity regarding the interpretation of the Securities
Act of | 83 which should be resolved by this Court.
The Petitioner asserts that the total impact of the han-
dling by the trial court of his case denied him his constitu-
25
tional rights. All of these questions are substantial and
affect the fundamental rights of the Petitioner. Here due
process was lacking, and these errors can only be cured by
granting certiorari.
Respectfully submitted,
ERLE A. KIGHTLINGER
HOWARD J. DeTRUDE, JR.
ROBERT A. GARELICK,
KIGHTLINGER YOUNG GRAY
and HUDSON
Sixth Floor First Federal Building
11 North Pennsylvania Street
Indianapolis, Indiana 46204
Counsel for Petitioner
APPENDIX A
3n the
United States Court of Appeals
For the Seventh Circuit
September Term, 1969 January Session, 1970
Nos. 17084-087, 17089-095
United States of America, Appeal from the
Plaintiff-Appellee, United States Dis-
+ trict Court for the
Southern District
Fred G. Amick, et al., of Indiana.
Defendants-A ppellants. ,
V.
January 22, 1971
Before FAIRCHILD, CUMMINGS and KERNER,
Circuit Judges.
FAIRCHILD, Circuit Judge. These are appeals by ele-
ven individuals and two corporations from judgments of
conviction of violations of 15 U.S.C. §77q (Section 17
of the Securities Act of 1933, Frauduicnt interstate trans-
actions). Kight of the individual appellants and the
corporations were convicted by a jury.’ The other three
1 Another corporation, convicted by the jury, has not ap-
pealed.
la 17084-087, 17089-095
17084-087,17089-095 2a
individual appellants weie convicted upon pleas of nolo
contendere. Others were named in the indictment, but
entered pleas or had separate trials, and are not involved
on these appeals.
The charges arose out of sales of the common stock
of Air & Space Underwriters, Inc. (ASU). ASU was
newly formed and contemplated a business (through a.
subsidiary) of manufacturing and selling gyroplanes. A
gyroplane is similar to a helicopter in that each has a
rotor wing. The gyroplane’s rotor, when in flight, is free
wheeling and not powered. Forward motion is generated
by a propeller. A helicopter’s rotor, on the other hand,
is powered in flight and has forward motion as a result.
ASU took over the development of the gyroplane from
Umbaugh Aircraft Corporation pursuant to a plan of
reorganization of that company, approved in a Chapter
X proceeding by a federal district court in Florida. There
is evidence that the gyroplane to be produced could land
and take off without a runway, and could carry a passen-
ger in addition to the pilot. It was hoped that it could
be produced at a price which would make it feasible for
various types of business and personal transportation
uses.
ASU stock was sold to investors in Indiana from
August 14, 1963 until July, 1965 when the SEC obtained
an injunction. The prices paid by investors during this
period aggregated $2.1 million. 15 gyroplanes were p.o-
duced and sold.
It appears, virtually beyond dispute, that during this
period the effort to promote sales of ASU stock included
general releases and individual communications which
contained untrue statements of material facts, omitted
material facts necessary to make the statements made
»
3a 17084-087,17089-095
not misleading, and included devices to defraud and
practices which would operate as a fraud upon the pur-
chaser. The areas of misrepresentation included the price
at which the plane could be sold, progress toward produc-
tion, orders on hand, and the financial history and econdi-
tion of ASU. The details will not be stated except as
required in discussion of particular counts. There was
abundant evidence of pattern of conduct, plan, and design
from which a jury could find that the false and misleading
assertions, to the investing public by way of the media,
including the Indiana Investor in particular, and to
prospective purchasers by sales literature and individual
sales efforts, constituted a scheme to defraud, changing
in content from time to time. The ultimate question is
whether the appellants were properly found criminally
responsible for wilfully having employed such scheme or
wilfully having obtained money by means of such mis-
representations.
Appellants challenge the indictment on several grounds,
and make other attacks on procedure. Those who stood
trial argue that the evidence was insufficient to support
the respective guilty verdicts.
1. The challenge to the array of the grand jury.
All appellants contend that the grand jury which indicted
them was unlawfully selected. Appellants who stood trial
assert the same defect with respect to the petit jury.
The challenge is made to an early step in the system
by which most names were selected for the jury list from
which the names of veniremen were drawn. Documents
were placed before the district court in support of and
opposition to the challenge. Most of them were the same
as those described and considered by Chief J udge Steckler
17084-087,17089-095 &
of the same court in overruling a similar challenge at
about the same time.”
Appellants rely principally on statements appearing
in Rabinowitz v. United States® although there was no
showing in the instant case suggesting the virtual exclu-
sion or gross under-representation on the jury list of any
group or class of residents of the district or division.
The names of prospective grand jurors were drawn
from among 1,200 names, at least 300 being on the jury
list in each of four divisions. The names of prospective
petit jurors were drawn from the 300 on the list in the
Indianapolis division. The division lists were maintained
at 300 by addition from time to time of names of persons
who had answered questionnaires and been found quali-
fied and not exempt. Most of the names of the larger
number to whom the questionnaires had been sent were
supplied by so-called key men who were asked by the
clerk and jury commissioner to supply them.
As needed, the clerk and jury commissioner sent a form
letter to key men in the counties in the district. According
to an affidavit by the clerk, the key men were persons
‘‘who were thought to be widely acquainted with persons
of diverse backgrounds within their own communities,
and were most likely to suggest jurors representing a
fair cross section of such communities. ”’
The form letter soliciting suggestions was before the
court. It stated in part that jurors must be ‘‘capable and
impartial and .. . selected without regard to race, color,
2 United States v. Duke (S.D. Ind., 1967), 263 FSupp, 828.
3 (5th Cir., 1966), 366 F2d 34. In a later decision, Mobley v.
United States (1967), 379 F2d 768, 773, the fifth circuit stated
that in Rabinowitz “we did not thus declare the ‘key man’
selection system illegal as such.”
da 17084-087,17089-095
creed, politics or station of life.’ The recipient was asked °
‘to suggest the names of men and women in your com-
munity who, in your judgment, would make qualified
jurors.’’ A sheet setting forth 28 U.S.C. §§1861 and 1862,
listing qualifications and exemptions, was enclosed and
it was said, “In making your suggestions please refer
to the statutory requirements set forth on the attached
sheet.” Apparently about 140 key men had responded to
such letters in the course of three years.
In November, 1966 several individuals interviewed 79
key men concerning the type of persons whose names
each had suggested and prepared affidavits summarizing
the interviews. These affidavits were before J udge Dillin
as they had been before Judge Steckler. It seems fair
to say in summary that most or all the key men said
they had some standard in mind as to who would make
a ‘‘responsible’’ juror. Indeed, any form of key man sys-
tem of suggestion would almost necessarily involve the
application of some subjective standard of that type. We
do not consider, however, that either constitutional con-
cepts or any statutes applicable in 1966 or 1967 com-
pelled a purely random selection from the whole body
of qualified persons in the community.‘
It appears from the affidavits that several key men
acknowledge’ that they had not suggested names of
persons belonging to particular groups or classes. Some
of the reasons, e.g., that jury duty would be a hardship
on poorly paid workers, that men make better jurors than
women, and that young adults are too immature, would
tend to establish invalidity if such reason were found
* The indictment and trial preceded enactment of the Jury
Selection and Service “ct of 1968, 28 U.S.C. §§ 1861-1871, re-
quiring a system of random selection from among those who
vote or register to vote.
3
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17084-087,17089-095 6a
to have guided most or a substantial group of key men,
but we deem the degree to which these reasons operated
among the total number interviewed was clearly insub-
stantial.
The district court, in overruling the challenge, con-
cluded that the key man system was not invalid per se,
and that the affidavits neither established exclusion of
classes of qualified persons nor made a showing sufficient
to require further inquiry. We agree.
2. Challenges to form and sufficiency of indictment.
The first 38 counts of the indictment charged varying
groups of defendants with violations of 15 U.S.C. §77q
(a). The outline is similar to the one discussed in United
States v. Birrell.’ Count 39 charged appellants Vollmer
and Indiana Investor and Business News, Ine. (Indiana
Investor) and others with violation of 15 U.S.C. § 77q(b)
in publicizing ASU stock. Count 40 charged several de-
fendants with violation of 15 U.S.C. 77e(a)(2) by mailing
ASU stock without a registration statement being in ef-
fect. Count 41 charged all defendants with conspiring to
commit the offenses charged in the other counts.
A number of ¢he first 38 counts and count 40 were
dismissed on motion of the government or for failure
of proof. The jury acquitted various defendants on several
counts among the first 38, and acquitted all defendants
on count 41. The jury convicted Vollmer and Indiana
Investor on count 39 and convicted one or more appel-
lants on each of the remaining first 38 counts.
Each of the first 38 counts charged that several defen-
dants, by the use of the mails in the offer and sale of
ASU stock, to a particular purchaser, wilfully (1) em-
5(S.D.N.Y., 1967), 226 FSupp 539.
7a 17084-087,17089-095
ployed devices, schemes and artifices to defraud, (2)
obtained money and property by means of untrue state-
ments of material facts and omissions to state material
facts necessary in order to make the statements made,
in the light of the circumstances under which they were
made, not misleading, and (3) engaged in transactions,
practices, and courses of business which would and did
operate as a fraud and deceit upon purchasers, including
the purchaser named in the particular count In each
count, also, the date, addressee, and content of a mailed
communication were alleged.
Each of the 38 counts contained a detailed description
of the manner in which all defendants allegedly accom-
plished (1), (2), and (3) above referred to with respect
to all purchasers of ASU stock, generally. The largest
part of the description set forth the history of ASU, its
acquisition of the Umbaugh company, the transactions
by which particular defendants became interested as
stockholders, directors, officers, or underwriters of ASU,
and the amounts of stock sold during particular periods
of time by named groups of defendants. At trial, there
seems to have been little if any dispute about the back-
ground facts so alleged.
Paragraph 2 of this description set forth fourteen
statements of fact which were alleged to be false and
to have heen wilfully made as part of the devices,
schemes, and artifices to defraud and of the transactions,
practices and courses of business operating as fraud.
Paragraph 3 set forth ten statements of fact, alleged to
have been omitted, but necessary to make the statements
made not misleading. Each list was said not to be ex-
clusive.
IHS. Ran ia a
esa
17084-087,17089-095 8a
The detailed description just referred to alleged a
course of conduct from May 15, 1963 to the date of the
indictment, appeared as part of count 1, and was incor-
porated by reference in each of the following 37 counts.
Several attacks are made upon the indictment. We
find no merit i: them, and point them out briefly, as
follows:
Vagueness: The indictment dealt with a subject matter
sufficiently complex that care is required in reading it,
but it is not vague. In each of the first 38 counts several
defendants are charged in the terms of the statute with
wilfully performing the proscribed acts in the offer and
sale of ASU stock to a named purchaser, and the inciden-
tal use of the mails is described. As already mentioned,
each count contained a general description of the back-
ground and a list, though not exclusive, of fraudulent
statements and omissions, alleging conduct continuing
generally throughout two years, although the transactions
and some of the misrepresentations took place at different
times within the two year period. The dates of mailing
in all counts fell within that period.
The indictment ‘‘contains the elements of the offense
intended to be charged, ‘and sufficiently apprises the
defendant of what he must be prepared to meet, and,
in case any other proceedings are taken against him for
a similar offense, whether the record shows with accuracy
to what extent he may plead a former acquittal or con-
viction.’ ’”
Incorporation by reference: It happened that count 1,
in which the general description of the background and
of the fraud was expressly set out, was dismissed for
6 Haynes v. United States (1932), 285 U.S. 427, 431.
9a 17084-087,17089-095
failure of proof. Several appellants contend that dismissal
erased the count so that the portion of each other count
incorporating part of count 1 by reference incorporated
nothing. They claim it follows that without the in-
corporated part of count 1, all other counts ceased to
charge an offense. The latter proposition is not clear but
in any event we reject the argument that the counts must
be read as if the incorporated material ceased to exist
upon dismissal of count 1.
Duplicity: 15 U.S.C. §77q(a) makes it unlawful, in
the offer or sale of securities, by the use of the mails,
to engage in certain conduct. The proscribed conduct is
described as (1), (2) or (3).7 Fach count of the first
38 charges that defendants engaged in (1), (2), and (3).
It is argued that each count charges three distinct of:
‘ fenses.
An answer was suggested by Crain v. United States.’
There the ‘‘statute was directed against certain defined
modes for accomplishing a general object, and declaring
that the doing of either one of several specified things,
each having reference to that object, should be punished.
. . . We perceive no sound reason why the doing of the
yen
*“T7q. Fraudulent interstate transactions.
“(a) It shall be unlawful for any person in the offer or
sale of any securities by the use of any means or instruments
of transportation or communication in interstate commerce or
by the use of the mails, directly or indirectly —
“(1) to employ any device, scheme, or artifice to defraud, or
“(2) to obtain money or property by means of any untrue
statement of a material fact or any omission to state a material
fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not
misleading, or
“(3) to engage in any transaction, practice, or course of
business which operates or would operate as a fraud or deceit
upon the purchaser.”
® (1896), 162 U.S. 625, 636.
Siesatyn Ral eA A Si ERASER WAAR A tT TET IED
Sis Mendis 58 CORR LTT
17084-087,17089-095 10a
prohibited thing, in each and all of the prohibited modes,
may not be charged in one count, so that there may be
a verdict of guilty upon proof that the accused had done
any one of the things constituting a substantive crime
under the statute.’’
The Crain rationale has, correctly, we think, been ap-
plied to the offenses now under consideration:
‘‘The statute thus embraces in the disjunctive three
separate and distinct acts as a crime. The indictment
charges the three offenses in the language of the stat-
ute, but they are charged in the conjunctive. An in-
dictment charging a statutory offense must follow
the statute creating it; but where the statute de-
nounces several acts as a crime, they may be charged
in one indictment or in a single count if they are
connected in the conjunctive. An indictment drawn
in that manner is not duplicitous, and it suffices to
prove any one or more of the charges. [citing
cases.]’”
Multiplicity: Appellants argue that the allowable unit
of prosecution is participation in the allegedly fraudulent
course of conduct, and that any particular use of the mails
in connection with any particular sale is only a jurisdic-
tional fact upon the basis of which participation in the
overaii course of conduct can be federally prosecuted;
that the first 38 counts ailege no more than one offense.
Courts have differed as to ‘‘the allowable unit of prose-
cution’’° under this statute. a
There is authority for the view (1) that, as is true
of mail fraud, each separate use of the mails in the execu-
Psy oa re v. United Staies (10th Cir., 1938), 100 F2d 628,
: 10 United States v. Universal C.I.T. Credit Corp. (1952), 344
U.S. 218, 221.
lla 17084-087,17089-095
tion of a scheme to defraud in the sale of securities con-
stitutes a separate offense; (2) that each separate offer
or sale transaction in which the proscribed conduct is
employed and the mails used is the allowable unit;1 (3)
that where an indictment charges employment of pro-
scribed conduct in separate transactions as separate
counts, the determination whether there was one offense
with several victims or a separate offense upon each vic-
tim can ordinarily not be made until proof is in;!* (4)
that where an indictment alleges a scheme to defraud
and a number of separate mailings and sales in separate
counts, but fails to show that the crime charged in any
one count differs from that charged in the others, all
counts are to be consolidated and all but one dismissed
as separate counts."
The counts in this indictment charged not only separate
mailings, but separate sales, so that neither (1) nor (2)
would require dismissal of any count. Under (3) dis-
missal before trial would be inappropriate, and the ques-
tion need be considered only with respect to cumulative
penalties on several counts. We consider (3) a sounder
view than (4).1° We hold that the district court properly
"Palmer v. United States (10th Cir., 1956), 3839 M2d 861,
867, cert. den. 350 U.S. 996.
Sanders v. United States (5th Cir., 1969), 415 F2d, 621,
626; United States v. Saporta (E.D.N.Y., 1967), 270 FSupp.
183, 186. In this circuit it has been said that “the government
must show some impact of the scheme on the investor and that
the mails were used in those instances where the impact oc-
curred.” United States v. Schaefer (7th Cir., 1962), 299 F2d
625, 629.
bak United States v. Birrell (S.D.N.Y., 1967), 266 FSupp. 539,
* United States v. Hughes (S.D.N.Y., 1961), 195 FSupp.
795, 798.
*® Cf. United States v. Universal C.1.T. Credit Corp. (1952),
344 U.S. 218, 224; United States v. Ketchum (2d Cir., 1963),
320 F2d 3, 7.
READE RAY ESM aia WA Stet eng
17084-087,17089-095 l2a
refused to dismiss or consolidate counts before trial, and
shall give further consideration to the matter when we
reach the claim that consecutive sentences were inap-
propriate.
3. Joinder. Various appellants contend that offenses
and defendants were improperly joined, and that in any
event discretionary severance should have been granted.
Rule 8(a) F.R.Cr.P. allows joinder of two or more ‘of-
fenses in separate counts in one indictment ‘‘if the of-
fenses charged . . . are of the same or similar
character or are based on... two or more acts or trans-
actions connected together or constituting parts of a com-
mon scheme or plan.’’ There can be no question of the
propriety of joining the first 38 counts in one indictment.
Count 39 charged wilfully, by use of the mails, giving
publicity to and describing ASU stock for a consideration
received from an issuer, underwriter, and dealer without
fully disclosing the receipt and amount of the considera-
tion. Count 40 (later dismissed) charged wilfully causing
ASU stock, an unregistered security, to be carried
through the mails for sale and delivery. Count 41 (upon
which all appellants were acquitted) charged a conspiracy
to commit the other offenses. All the substantive offenses
were violations of the securities act, involved the same
security, and were alleged to have occurred during the
duration of the alleged conspiracy. We have no doubt
that at the least the acts and transactions upon which
all 41 counts were based were ‘‘connected together or
constituting part of a common scheme or plan.’’ Joinder
of the offenses was authorized by the rule.
Rule 8(b) permits joinder of two or more defendants
if they are alleged to have participated in the same series
13a 17084-087,17089-095
of acts or transactions constituting an offense or offenses.
All defendants need not be charged in each count. We
think the acts and transactions alieged in the first 38
counts, and in counts 39, 40, and 41 may be deemed one
series of acts or transactions for the purpose of this rule.
Several appellants contend that they were prejudiced
by joint trial and that the district court abused its dis-
cretion in denying motions for severance under Rule 14,
F.R.Cr.P.
We do not find it so. It is true that the proof was vol-
uminous (4,000 pages of transcript, covering four weeks
of trial, and more than 1,000 exhibits, at least marked
for identification). Several appellants were securities
salesmen, while others occupied positions of greater re-
sponsibility and authority. Several appellants were —etive
in sales of ASU stock during periods when other appel-
lants were not. On the other hand, there was also con-
siderable overlapping in time. The proof was orderly and
as chronological as reasonably possible, and the court gave
frequent cautionary instructions. As will be seen when
sufficiency of the evidence is discussed, the jury was
capable of discernment among counts and among de-
fendants.
We consider the trial fundamentally fair.
During the investigation by the SEC various defendants
had given testimony pursuant to administrative sub-
poenas. Transcripts were received by the court, but were
not put before the jury except as excerpts were read.
In each case the court instructed the jury that the excerpt
was to be considered only against the defendant who made
the statement.
STE PR
Ee
TPN PRE Re! OG 8 ete er ee
EE EE ee
17084-087,17089-095 14a
Appellant Broderick contends that he was denied the
right of confrontation and cross-examination’® by such
reading. He fails to specify the portions of statements
of his codefendants which incriminated him. His name
was apparently mentioned only in the portion read from
appellant Olsen’s SEC testimony. Olsen did not testify.
These references established Mr. Broderick’s presence at
several conversations or occasions only generally de-
scribed, and if they could be deemed incriminating in any
sense, they were merely cumulative and the error, if any,
harmless beyond a reasonable doubt.
These excerpts were not highly incriminating with re-
spect to the person testifying except as they laid a founda-
tion for an inference that the person knew the state of
affairs was different from that which was represented
to purchasers. In instructing the jury that these excerpts
must be weighed with caution and the circumstances
scrutinized to determine whether they were made volun-
tarily, the court referred to them several times as ‘‘state-
ments’? and once as ‘‘alleged admissions’’. Several
appellants contend that the latter characterization was
prejudicial. We do not find it so.
4. Pretrial publicity and voir dire. Certain appellants
contend that prejudicial pretrial publicity required the
court to dismiss the indictment or postpone the trial.
There had been news stories concerning the indictment,
about a year before trial. Two days before trial there
had been two news stories. One referred to a ‘‘stock
swindler’’ and concerned an unrelated indictment. An-
other reported the nolo contendere pleas of two of appel-
lants’ codefendants, and referred to the ‘‘gyroplane
swindle’’. Appellants were not named.
16 Bruton v. United States (1968), 391 U.S. 123.
loa 17084-087,17089-095
The district judge conducted a careful and extensive
voir dire. 64 prospective jurors were questioned. Although
40 said they had read or heard something in the media
about the case, only two said they had formed opinions
which would require evidence to overcome. They were
excused. Most of the other 38 could not recall the extent
of what they had read or heard and none had formed
any opinion. Some recalled very recent news reports stat-
ing that the trial was to begin. There was nothing to
indicate these had any prejudicial content. 9 of the 38
were selected for the jury. The answers indicated the
content of the news stories had made little impression.
Denial of continuance was not an abuse of discretion,
and we see no reason to believe the publicity affected
the fairness of the trial.
The district judge questioned the prospective jurors,
but invited defense counsel to request additional ques-
tions, which the judge then asked. Although objections
to this method are urged by some of the appellants, it
is authorized by Rule 24 (a) F.R.Cr.P.7
d. Claim of mistrial because of approach to juror.
Just before the beginning of the trial, Mz Morrow, a
juror who ultimately became foreman, reported an inei-
dent to the distriet judge. A Mr. Rank, a business associate
of Morrow, who was president of a bank, had told Morrow
of a call Rank received from appellant Vollmer after selec-
tion of the jury. According to Rank, Vollmer had once
attempted unsuccessfuly to arrange a mortgage for some
property that Rank was interested in. Mr. Vollmer asked
Rank if Rank thought that Morrow remembered Vollmer.
and if Morrow’s decision as juror would be influenced
"7 See cases cited in Hamer v. United States (9th Cir., 1958),
259 F2d 274, 279.
DUT ated POOH ESA Rink CR At ei ae NRT AE Re ASAD I REA
17084-087,17089-095 16a
in any way because Vollmer was unsuccessful in arranging
for the mortgage. Morrow told the judge he did not re-
member Vollmer and had no recollection of the transac-
tion. He said he had not told any other juror of the call
and promised not to do so.
The court and counsel discussed the situation. Defense
counsel moved for a mistrial, but the court decided to
proceed.
Judge Dillin informed the jury : ubstantially as follows:
‘‘One of the parties . . . contacted an acquaintance and
asked him a question which required the acquaintance
to ask a member of the jury for the answer, thus, of
course, bringing to the attention of the juror the party
who asked the question in the first place. The juror very
properly related this to the Clerk, who related it to me,
and I have now made it known to the attorneys. ... I
think, on thorough reflection, that nothing improper was
intended, although, as I say, it was an irregularity on
the part of the person who did it. ... I am sure nothing
out of the way will happen in the future, but if anything
does, please report it promptly.’’
It is suggested that juror Morrow probably became
prejudiced against Vollmer by Vollmer’s call and that
the other jurors probably became prejudiced against all
appellants on trial as a result of being told that an un-
named party had indirectly contacted an unnamed juror.
We think the incident is not of sufficient import
reasonably to lead to those conclusions.
6. Sufficiency of the evidence. The first 38 counts
rested upon separate sales and mailings. The mailings
were made on dates from October 14, 1963 to June 1,
1965.
lia 17084-087,17089-095
The first public offering of ASU stock began August
14, 1963 and was formally terminated June 1, 1964. The
price was $4 per share.
The second publie offering, at $6 per share began in
June, 1964.
An offer at $5 per share was made to existing stock-
holders October 19, 1964.
The stock was split in December, 1964. Control of ASU
changed from appellants Irving and Amick and their
associates in January, 1965 to Chappell and his associates.
In March, 1965 the SEC began its investigation and in
July, 1965, it obtained an injunction against fraudulent
sales.
Count 41 charged 23 individual and 6 corporate defen-
dants, including appellants, with conspiring among them-
selves and with others named. The conspiracy allegedly
continued from May 15, 1963 to the date of this indictment
in 1966. Concededly many of the defendants did not par-
ticipate in sales of ASU stock throughout the period, but
it was the theory of the government that each was a
member of the conspiracy during the period he was in-
volved in the sales effort. The jury, however, acquitted
of conspiracy all who stood trial.
We have already referred to the material incorporated
in each of the 38 counts, alleging that from May 15, 1963
on, all appellants and others engaged in the conduct pro-
seribed by 15 U.S.C. 77q(a), (1), (2), and (3) in the man-
ner described in detail. Government counsel evidently con-
sidered, in drawing the indictment, that each defendant
was responsibly associated in the fraudulent conduct
throughout that defendants’ participation in sales of
stock. Again, however, the jury rejected reliance on any
Ser ea St aN 4
HEB te OE SE ER SPU TSO ARR DR UD lara aU ods
17084-087,17089-095 18a
assumption of that nature and seems cautiously to have
considered each count submitted, one by one.
a. The case as to Amick. Mr. Amick and Mr. K. K.
Irving had held a dealership under Umbaugh. They were.
moving forees in the organization of ASU May 15, 1963
and the take-over from Umbaugh, under a plan or reor-
ganization. Amick was secretary-treasurer of ASU and.
chairman of the board. He was active in management
and ia the planning and arrangement of the various offer-
ings of stock. The jury could well have found that the
successive offering prices and the stock split were a means
of giving a false impression of increasing value. He must
surely have known the material facts and responsibly have
known of the misrepresentation and omissions in the sales
material and the promotional news releases. He resigned
as an officer in January, 1965, and as a director shortly
thereafter.
Amick was charged in each of the first 38 counts. 26
of them were submitted to the jury. His active central
role makes it seem likely that conviction on all eounts,
at least those which arose before his resignation, might
have been sustained. The jury convicted, however, on 8
counts and acquitted on the rest. Chronologically, the
dates of the mailings in 6 of the counts on which he was
convicted ran from March 4, 1964 to September 1, 1964.
The dates of mailing in the two other counts were October
14 and 21, 1964. Amick did not deal in person with these
purchasers. But the jury could clearly find that the for-
bidden fraudulent practices were employed in these sales
and that Amick was wilfully responsible for their employ-
ment.
Amick was sentenced to four years imprisonment on
eount 6 (March 4, 1964) and two years on each other
19a 17084-087,17089-095
count. The two year terms are concurrent with each other,
but consecutive to the four year term. The content of
the fraud did not remain static. Disclosures concerning
some of the adverse history of Umbaugh were omitted
from the prospectus for the second offering, although
included in the first. The expectation of benefits from
an agreement with a Canadian group in August 1964 were
grossly overstated. Decepiive iotograph were sent to
stockholders just before the October; 1964 offer in order
to create the impression that regular production had
begun. There were other additional misrepresentations
from time to time. As previously stated, there are deci-
sions holding that each mailing or each sale is a distinct
offense, and it would logically follow that cumulative pen-
alties could be imposed. Even under a different view,
however, we think that the scheme to defraud involved
in the various counts was sufficiently different as time
went on, and that Amick was sufficiently active in formu-
lating and augmenting the scheme that the use of the
scheme in each of the respective counts could fairly be
deemed a distinct offense with cumulative penalties, at
least to the extent imposed here.
b. The case as to Broderick. Broderick was employed
as a salesman for Van Horn Associates, dealer or under-
writer for the first public offering. In June, 1964 he was
employed by ASU as ‘‘stock control manager’’. He re-
- vised the prospectus, omitting material facts, and stating
untruths with respect to patents and production, and used
it in a number of sales.
Broderick was charged in the first 17 counts, the dates
of mailing running from October 14, 1963 to September
29, 1964. 10 counts were submitted to the jury. He was
convicted on count 17, and acquitted on the others.
Tt EAE ig TTS Syed lea NE ALR ASA EP. EAP GE MIN IG AA FEE EPO OPE RIO MERE
BE eT ee ee eee eT
17084-087, 17089-0995 20a
Count 17 involved a sale of stock to Rufus S. Gray,
and mailing the certificate to him.
Mr. Gray testified that about August 20, 1964, two men
called at his office, MeQuinn and Broderick. Both dis-
cussed ASU stock. He was given the prospectus which
Broderick had revised. Gray was unable to say which
man made particular siatements but one or the other
represented that the company had over a million dollars
in backlog orders, which was false, and that the price
of the plane would be around $13,900, a matter which
was still highly speculative, and that the plane could be
flown with three or four hours instruction. The jury could
well say that the scheme was employed in the sale.
Whatever the reason the jury acquitted Broderick of
other counts, we think it could properly find him guilty
on this count. The jury could properly find him respon-
sible for statements even if made by McQuinn since
they were made in Broderick’s presence and in a joint
effort to sell the stock. Broderick’s position with ASU
was sufficiently responsible to make him chargeable with
knowledge of the facts. Wilfullness could be inferred.
ce. The case as to Vollmer and Indiana Investor. Mr.
Vollmer was editor of the Indiana Investor and Business
News, published weekly by defendant corporation of simi-
lar name. Indiana Investor was devoted to ‘‘News of Indi-
ana Business, Industry, and Securities’’. The record
shows that it was frequently a channel by which mislead-
ing information concerning ASU stock reached investors
and several purchasers testified that their interest in ASU
stock had been generated by reading Indiana Investor.
The government contends that almost from the beginning
of the fraudulent promotion of ASU stock Vollmer fre-
quently visited the company’s facilities and was aware
2la 17084-087, 17089-095
of facts in the light of which the news stories and some
of his own editorial comments in Indiana Investor were
false or misleading. There is evidence to support this
contention.
Vollmer and the publishing corporation were charged
in 36 of the first 38 counts, with mailing dates ranging
from February 19, 1964 to June 1, 1965. 26 of these counts
were submitted to the jury. It convicted Vollmer and the
corporation on count 26, and acquitted them on all others.
They were also charged and convicted on count 39, a viola-
tion of 15 U.S.C. § 77q(b).
Count 26 involved a purchaser named Janie Stech, and
a mailing to her on January 21, 1965 of a confirmation
for 1,000 shares at $6 per share. The sale was made by
defendant Dowling, an employee of defendants Mayne and
Securities Services, also convicted on that count.
Mrs. Stech testified that she had first become interested
in ASU stock as a result of reading in Indiana Investor
about the planned stock split. She had then bought 200
shares from Dowling in December, 1964. While consider-
ing the purchase of the 1,000 shares solicited by Dowling
in January, she went to see Vollmer and asked him
about Dowling and the plane. Vollmer spoke favorably of
both, but told her he knew where she could get stock
for $4 instead of $6. She considered herself committed
to Dowling, however, and bought from him. Later another
dealer telephoned her and offered stock for $4. ™
It must be acknowledged that Mr. Vollmer made no
identifiable affirmative misrepresentation in the conver-
sation about whieh Mrs. Stech testified. We think, how-
ever, that the evidence tending to show that he knowingly
published false or misleading reports and editorial com-
4
3
ry
3
2
3
17084-087, 17089-095 22a
ment concerning ASU, was sufficient, in the light of the
circumstances, to find him a wilful and knowing partici-
pant in the fraudulent course of conduct which generated
the sales to Mrs. Stech, and, indeed, othevs.
At about the time of the Stech purchase of 1,000 shares,
Vollmer persuaded Van Horn, the president of Commer-
cial Capital, an interested dealer, to send a letter to all
Commercial Capital and ASU stockholders recommending
that they subscribe to Vollmer’s paper. Vollmer prepared
the letter, saying that Commercial Capital and ASU
planned to use Indiana Investor to keep the Indiana in-
vestment community informed on the progress of ASU.
The letter was mailed January 25. Very possibly the jury
selected this particular count because of the personal ap-
peal of Mrs. Stech to Vollmer for advice and the oppor-
tunity that gave him to give her information she needed
and because of the proximity in time to the letter of Janu-
ary 25 and the events dealt with in count 39.
Count 39 charged Vollmer and Indiana Investor, and
two others not on trial, with wilful violation of 15 U.S.C.
§ 77q(b). The gist of the charge was that they ‘‘by the
use of the mails, published and .. . circulated . . . news-
paper articles . . . which, though not purporting to offer
a security for sale, described such security ... for a
consideration received, directly and indirectly, from an
issuer, underwriter and dealer without fully disclosing
the receipt of such consideration and the amount thereof”’.
The Indiana Investor of January 29, 1965 was alleged
to have been mailed on that date.
The January 29 issue reported acquisition of control
of ASU by Robert Chappell’s company, Investment
Corporation of America (ICA) and an investment of
‘‘over $2 million’’, accomplished in major part by the
23a 17084-087, 17089-095
purchase of a block of authorized, but unissued stock.
This was itself untrue or, at least, misleading. But the
point under count 39 was that Chappell and Vollmer had
discussed the preparation and publication of the story,
and at Vollmer’s suggestion, Chappell had agreed to buy
subscriptions for all stockholders of ICA. The testimony
was that this would cost $1,000 or $1,200. On February
1, however, Chappell gave Vollmer an ICA check for
$2,500. The January 29 issue of Indiana Investor did not
disclose that consideration would be received.
We think the jury could properly find that Vollmer
published the article in return for the promise of payment.
Vollme: and Indiana Investor contend that 15 U.S.C.
$77q(b), here found to have been violated, abridges free-
dom of the press, contrary to the first amendment.
The purpose of the statute is clear, and was stated
in a committee report at the time of passage of the act
as follows:
Section 17(b) ‘‘is particularly designed to meet the evils
of the ‘tipster sheet’ as well as articles in newspaper
or periodicals that purport to give an unbiased opinion
but which opinions in reality are bought and paid for.’’*
The substantial interest of the investing public in know-
ing whether an apparently objective statement in the
press concerning a security is motivated by promise of
payment is obvious. We see no significant abridgement
ae Committee on. Interstate and Foreign Commerce. H.R.
Rep. No. 85, 73d Cong., Ist Sess. (1933) 24.
2
17084-087, 17089-0905 24a
of freedom of the press in requiring disclosure of a prom-
ise of payment if there has been one.’®
d. The case as to Olsen. Olsen entered the picture when
employed by ASU as a stock salesman at the beginning
of the second public offering (late June, 1964). In August,
1964, Van Horn, president of Commercial Capital
Corporation (formerly Van Horn Associates) agreed to
assist ASU and again began to sell stock to the public.
Van Horn hired Olsen as a salesman for Commercial
Capital, and Olsen later became sales manager.
Olsen was charged in counts 10 to 38, the mailing dates
ranging from July 3, 1964 to June 1, 1965. 23 of these
counts were submitted to the jury. It convicted Olsen
on counts 18, 23, 24, and 25, aequitting him on the others.
Count 18 involved a purchase of 200 shares by Mr.
Perkins in October, 1964 from Commercial Capital. Olsen
and Wymer called on him. They told him ASU would
be in production at an early date, had about a year’s
work ahead, and-had about a year’s parts inventory com-
pleted, in the shop and paid for.
Count 23 involved a purchase of 200 shares by Mr.
Whitney in December, 1964. Olsen told him the plane
would cost $13,500 and that ASU had quite a few back
orders.
Count 25 involved a purchase of 1,000 shares by Mr.
and Mrs. Rauer in December. The shares were bought
from Commercial Capital and the salesman was appellant
Wymer. The vrice per share was $8.75. Wymer told the
19 See Communist Party of the United States v. Subversive
Activities Control Board (1961), 367 U.S. 1, 97-102; Lewis
Publishing Co. v. Morgan (1913), 229 U.S. 288; United States
v. Harris (1954), 347 U.S. 612; Burroughs v. United States
(1934), 290 U.S. 534. —
20a 17084-087, 17089-09511
Rauers the stock would be worth $12 per share by spring
and that ASU had enough backlog of orders to last two
years at continuous production. The July 9, 1964 prospec-
‘us Was given the Rauers.
The evidence establishes that at least by the time of
these transactions, Olsen knew material adverse facts con-
cerning the financial: situation of the company and the
sack of production, and should have known of the lack
of firm orders for the plane. As sales manager of Com-
mercial Capital he instructed its salesmen at sales
meetings. We think that he could properly be convicted
on counts 18 and 23 where he personally made false or
misleading statements and failed to make necessary addi-
tional statements, and on Count 25 where the representa-
tions were not personally made by him, but by a salesman
whom he instructed, and were consistent with the pattern
of fraudulent conduct with which he was responsibly
associated. Olsen had recommended Wymer to Van Horn
for employment, saying Wymer was a good salesman ‘‘ but
also very fast in the field and should be watched with a
very close eye’’,
Count 24 involved a purchase of 120 shares in December,
1964 from appellant Securities Services. Appellant
Dowling was the salesman who dealt with the purchasers.
We know of no evidence directly connecting Olsen with
this transaction. We do not consider the evidence of his
association with ASU or Commercial Capital in fraudulent
conduct in the marketing of this stock to be sufficient proof
of responsibility for the practices followed by Securities
Services, although there is a brief reference to his having
conducted one sales meeting for that company in the
absence of appellant Mayne. We conclude that. this
conviction and sentence on this count must be set aside,
although concurrent sentences remain in force.
17084-087, 17089-0995 26a
e. The case as to Wymer. Wymer became a stock
salesman for ASU in July, 1964, and was later employed
by Commercial Capital.
Wymer was charged in counts 11 to 38, the mailing dates
ranging from July 20, 1964 to June 1, 1965. 22 of these
were submitted to the jury. He was convicted on counts
15, 18, and 25, and acquitted on the others.
Count 15 involved mailing by Commercial Capital to
Mr. and Mrs. Riley on September 1, 1964 of a confirmation
for 100 shares. Wymer had told Riley before he bought
that ASU had thousands of orders and that production
had just started. These statements were untrue and
material, and of a type characteristic of the scheme.
Counts 18 and 25 have been described in d., above.
There is ample evidence that Wymer knew that the
representations were untrue and intended that they
persuade the prospective purchasers.
Wymer contends that the government failed to prove
that the purchasers relied on the untrue statements. It
is true that they did not testify that they believed and
relied on his assertions.
Courts have said that in prosecutions under 15 U.S.C.
§77q(a), at least where a fraudulent scheme was employed,
it is unnecessary to prove that a victim parted with money
or property in reliance upon misrepresentations.”°
Considering the language of the three subdivisions of
77q(a), it is clear that the activity proscribed by subdivi-
20 Farrell v. United States (9th Cir., 1963), 321 F2d 409, 419,
cert. den. 375 U.S. 992; Frank v. United States (10th Cir.,
1955), 220 F2d 559, 563; Bobbroff v. United States (9th Cir.,
1953), 202 F2d 389, 391.
27a 17084-087, 17089-095
sions (1) and (3) need not be successful to be unlawful,
and reliance by a victim need not be proved. (1) proscribes
the employment of a device, scheme, or artifice to
defraud. (3) proscribes engaging in a_ transaction,
practice, or course of business which would operate as
a fraud or deceit upon the purchaser as well as one which
does. (2) deals specifically with untrue and misleading
statements, but such statements are often elements or
manifestations of a device, scheme, or artifice covered by
(1) or of a transaction, practice or course of business
covered by (3), so that when conduct unlawful under (1)
or (3) has been proved it is not necessary to have proved
conduct unlawful under (2). We conclude thai proof of
any degree of reliance was not required here.
It may be that the making of an untrue or misleading
statement in the offer or sale of securities by the use of
the mail or interstate telephone call might be so isolated
from any other transaction that it would be unreasonable
to deem it an element of a scheme or other conduct pro-
seribed by (1) or (3). If so, the statement would not
be unlawful under (2) unless it caused someone to part
with his money or property. (2) declares it unlawful to
obtain money or property by means of an untrue state-
ment or material omission. Even in that instance, the
victim’s testimony that he relied would not be essential
where causation could be inferred from all the circum-
stances.”!
f. The case as to Mayne. David Mayne was president
of Securities Services, Ine., a broker-dealer. In the fall
of 1964 Van Horn discussed ASU stock with Mayne, and
71 See cases cited, 35 C.J.S., False Pretenses, § 52, including
People v. Gordon (Calif. C.A., 2d Dist., 1945), 162 P2d 110,
124; State v. Hastings (N.D., 1950), 41 NW2d 305; Corscot v.
State (1922), 178 Wis. 661, 671, 178 NW 465.
17084-087, 17089-095 28a
a while later, Commercial Capital, Van Horn’s company,
supplied Securities Services with blocks of shares for
resale. Securities Services sold stock amounting to more
than $382,000 and Mayne himself sold $54,000.
Mayne and Securities Services were charged in counts
22-38, the mailing dates ranging from December 15, 1964
to June 1, 1965. Twelve of these were submitted to the
jury. Mayne and his company were convicted on counts -
24, 26, 29, 30, 32, 33, and 34, and acquitted on the others.
Count 24 (already referred to under d.) involved a sale
of 120 shares to Mr. and Mrs. Shaffer. The confirmation
was mailed December 24, 1964. Mr. Shaffer dealt
personally with Dowling, an employee of Securities
Services. Dowling told him ASU had three years’ back
orders. This was untrue and material and a part of the
scheme-pattern. Shaffer bought additional shares on later
occasions. The jury acquitted Dowling on this count. It
may well have given him the benefit of a doubt on the fact
that he was relatively new and should not at that stage
be held criminally accountable for the fraudulent scheme.
An acquittal of Dowling on that basis is not inconsistent
with conviction of his employer.
Count 26 (already referred to under c.) involved a sale
of 1,000 shares to Mrs. Stech. Confirmation was mailed
January 21, 1965. In November Mr. Mayne made an
appointment with her over the telephone. Mr. Dowling
kept the appointment. Mrs. Stech bought 200 shares in
December. Dowling arranged to take her to the Auto Show
in Indianapolis in January. The plane was on display
there.
The display at the Auto Show was part of a stock sales
promotion planned by several appellants. Stock salesmen
29a 17084-087, 17089-095
were active there. Mayne prepared some of the sales
literature for use at the Auto Show.
A summary ‘sheet prepared by Mayne represented that
the plane was FAA certified; that the selling price was
$13,390; that the products of ASU were then being
distributed through 150 dealers; that approximately 3,500
planes had been ordered with dealer down payments; that
the backlog represented $47,000,000; and that $3,000
invested in ASU stock at various dates since September,
1963 was then worth $5,400. Each of these statements was
untrue, or, at best, misleading unless qualified by addi-
tional statements which were omitted. This material was
distributed at the show by Securities Services salesmen.
Mrs. Stech testified that Dowling pointed to a paper
in the roof of the plane and said it was a certificate, and
worth a million dollars. He told her the stock could not
go down in price. He later told her he had 1,000 shares
reserved for her, and that there was a firm in Canada that
would take all they could get of it.
Count 29 involved a sale of 100 shares to Mr. and Mrs.
Gilley. The certificate was mailed March 24, 1965. Mr.
Gilley dealt personally with Mr. Von Foerster, a defendant
not on trial, an employee of Securities Services. Mr. Von
Foerster gave him a copy of the summary sheet prepared
by Mayne and referred to under count 26, showed him an
ASU stock sales booklet used by Mayne and other
Securities Services salesmen, containing untrue and
misleading statements of material facts, and orally made
untrue or misleading statements concerning production
plans and the price of the plane.
Count 30 involved a sale of 100 shares to Mr. Sears, with
confirmation mailed March 24, 1965. Sears also dealt with
17084-087, 17089-095 30a
Von Foerster and received the same summary sheet and
was shown the same sales booklet as Mr. Gilley.
Count 32 involved a sale of 50 shares to Mr. and Mrs.
Lang, with confirmation mailed April 5, 1965. Mr. Lang
also dealt with Von Foerster, was shown the same sales
booklet as Gilley and Sears, and was told untrue informa-
tion about current production, back orders, and the price
-of the plane.
Count 33 involved a sale of 300 shares of Securities
Services to Mr. and Mrs. Whitaker. The sale and the
mailing of the certificate April 13, 1965 were proved. We
find no evidence disclosing the information given. Con-
viction of Mayne and Securities Services on this count
could rest only upon an inference that a scheme to defraud
frequently employed by them in the sale of a particular
security was employed in every sale at about the same
time. We consider this inference, under the circumstances
of this case, too weak to constitute proof beyond a reason-
able doubt, and conclude that conviction on this count
must be set aside. The sentences on other counts, how-
ever, are concurrent.
Count 34 involved a sale of 50 shares by Securities
Services to Mr. and Mrs. Wininger, with certificate mailed
April 16, 1965. Mr. Wininger received the same summary
sheet as Gilley and Sears.
Counts 24, 26, 29, 30, and 32 involved sales made by
employees of Seeurities Services, of which Mayne was
president. Mayne employed, instructed, and supervised
these salesmen. He prepared and provided them with sales
material containing untrue and misleading statements.
There is, in our judgment, sufficient evidence upon which
to find that he knew of the fraudulent character of the
3la 17084-0§7 | 17089-095
scheme which the salesman would employ” ind intended
that the prospective purchasers be persuadeq t, buy the
stock. We conclude that the convictions of Mayne and
Securities Services on these counts are
adequately
supported, and support the respective sentences
ge. The case as to Dowling. Dowling was a salesman
for Securities Services in late 1964 and eally 1965. He
later became a salesman for Commercial Capitay,
Me was charged in counts 22 to 38, the Mailing dates
ranging from December 15, 1964 to June 1, 1965. Twelve
of these were submitted to the jury. He was convicted on
count 26 and acquitted on the others. The facts relevant
to count 26 have been summarized above, in dq, and f. We
think the evidence supports the finding that he made the
representations knowingly and wilfully.
h. The case as to Riggs. Mr. Riggs was Manager of a
life insurance agency. He became interested in ASU at
the Auto Show and approached Olsen about selling stock.
They made a deal whereby Riggs and his salesmen would
receive $1.50 per share of stock which they sold for
Commercial Capital. At the time the price of the stock
was $6 and Riggs was to pay $4.50. -
Riggs was charged in counts 27 to 38, with mailing dates
from February 8 to June 1, 1965. Seven of these counts
were submitted to the jury. Riggs was convicted on count
38 and acquitted on the other counts.
Count 38 involved a sale of 137 shares to Dr. Briggs.
The confirmation was mailed June 1.
38 Mayne was surely in a position where he ji8 deemed to
have known that which could have been learned by inquiry
reasonably to be expected. See cases cited infra, fm- 23.
ure
17084-087, 17089-095 32a
Dr. Briggs was a medical examiner for the life insurance
company. He was first approached by James Dillon, one
of Riggs’ agents. Dillon said ASU stock was a good buy,
and he showed pictures of the plane. Dr. Briggs telephoned
Riggs to inquire about the stock. Riggs said it was scarce,
was a good buy at $7 and would go up to $10 in a short
time. He said about fifteen planes per month were being
produced. This was untrue, as well as the representation
that the stock was scarce. Briggs bought at $7. A week
later he decided to buy more and found he could buy 625
shares through a local bank at $5.62-1/2. Riggs could give
no satisfactory answer when. told of this. At about the same
time as his sale to Briggs, or shortly before, Riggs had
been buying ASU stock from a disinterested dealer at
about $4.50 per share and selling it to investors at about
$6.60 per share. Riggs had visited the plant and was aware
that certification of the plane had been held up. Although
there is no direct evidence that he was informed of the
truth as to lack of production, he admitted that he did not
know how many planes were being produced because ‘‘I
heard all kinds of figures’’. We think that the jury’s find-
ing of wilfulness in misrepresenting production can
properly rest upon the proposition that he recklessly made
the representation for the purpose of inducing a purchase
when he must have had serious question what the facts
were, but had failed to use reasonable means at hand to
learn them.”
7. Alleged bias of judge. Appellants Vollmer and
Indiana Investor suggest that the district judge ought to
have recused himself, and that certain colloquies between
28See United States v. Ross (2d Cir., 1963), 321 F2d 61, 65,
cert. den. 375 U.S. 894; Irwin v. United States (9th Cir., 1964),
338 F2d 770, 774, cert. den. 381 U.S. 911; United States v.
Schaefer (7th Cir., 1962), 299 F2d 625, 629; United States
v. Vasen (7th Cir., 1955), 222 F2d 3, 8, cert. den. 350 U.S. 834.
TT? SNA eh ee ine ,
33a 17084-087, 17089-095
the judge and their counsel deprecated counsel so as to
diminish his effectiveness before the jury.
These appellants sought a change of venue, with an
affidavit asserting that Judge Dillin had issued a prelimi-
nary injunction July 12, 1965 in a civil action brought by
the SEC, alleging substantially the same facts as the
indictment, and quoting Judge Dillin’s oral findings
adverse to these appellants. Judge Dillin found the
application for change of venue insufficient and denied
it.
Rulings and findings made by a judge in the course of
‘a judicial proceeding are not in themselves sufficient
reasons to believe that the judge has a personal bias or
prejudice for or against a party.4 The affidavit was
insufficient to oust Judge Dillin under 28 U.S.C. §144.
These appellants set forth nine short excerpts from the
record. Most were critical of some aspect of trial procedure
being employed by counsel and some directed him to cease.
Most of the admonitions seem to us to have been
merited and appropriate in substance. We are not
persuaded that they communicated to the jury any view
held by the judge on the merits of the case nor that they
in any way deprived these appellants of a fair trial.
8. Challenge to SEC subpoenas. Certain corporate
records of Indiana Investor were used against it and
against Vollmer. The government had obtained these
records by an SEC subpoena issued pursuant to 15 U.S.C.
§77s(b) and enforced by the district court, pursuant to
§77v(b). Appellants Vollmer and Indiana Investor claim
that the judicial compulsion exercised was an unreasonable
7, Ex parte American Steel Barrel Co. and Seaman (1918),
eS a 35, 43; Tucker v. Kerner (7th Cir., 1950), 186 F2d
7 MED ENO IEF EIR PRIN SIE BPE DON CRIES ~ i
ORES a ne
17084-087, 17089-095 Sta
seizure under the Fourth Amendment. No claim is made
that the records were other than corporate.
It may well be that any challenge now made became
foreclosed by the adverse result of the judicial proceed-
ing which resulted in enforcement of the subpoena. In any
event, the subpoena was not the general subpoena dealt
with in Hale v. Henkel® upon which appellants rely.
The answer to their claim is summarized in Oklahoma
Press Pub. Co. v. Walling as follows : ,
“{Pyhe Fifth Amendment affords no protection by
virtue of the self-inerimination provision, whether for
the corporation or for its cificers; and the Fourth,
if applicable, at the most guards against abuse only
by way of too much indefiniteness or breadth in the
things required to be ‘particularly described,’ if also
the inquiry is one the demanding agency is authorized
by law to make and the materials specified are rele-
vant. The gist of the protection is in the requirement,
expressed in terms, that the disclosure sought shall
not be unreasonable.’ ’*®
9. Other claims of error upon trial. We have examined
other claims of error in rulings and instructions, but find
no merit in any.
10. Irving’s claims: Appellant K. K. Irving was
president of ASU and active in its organization and
management. He was charged in all counts except count
39. On June 1, 1967, just before the trial, and when
accompanied by his counsel, he entered a plea of nolo
contendere to 21 counts. After the trial, on July 28, 1967,
at the same time others were sentenced, the court found
25 (1906), 201 U.S. 43, 77.
6 (1946), 327 U.S. 186, 208. See Penfield Co. of Cal. v. Se-
curities and Exch. Com’n (9th Cir., 1944), 143 Fld 746.
30a 17084-087, 17089-095
him guilty on counts 10, 12, 14, 19, 20, and 21. He was
sentenced to five years on count 10, and two years on
each other count. The term on count 12 Was consecutive
to that on count 10, and all other terms were concurrent
with that on count 12.
Mr. Irving raises challenges, as do other appellants, to
the grand jury, the indictment, refusal of severance and
denial of continuance on account of pretrial publicity.
Apparently he considers that his plea does not foreclose
the latter contentions on the theory that immediate joint
trial subjected him to pressures which made his plea
involuntary. As already set forth, we deem all these
claims insufficient.
Mr. Irving also challenges the propriety of the sentences
on several other grounds, which we now consider.
Irving claims that the court improperly considered the
evidence heard at trial. Under the circumstances, where
the plea was entered the morning the trial was to begin,
and further consideration of the plea was postponed, it
would seem very likely that the court would consider the
evidence at trial to the extent it bore upon the charges
to which Irving had pleaded nolo contendere. It is clear
the court did consider the evidence at the criminal trial
in determining that there was a prima facic showing that
the offenses charged had been committed. Irving appears
to claim, however, that a colloquy just after the plea was
entered included an understanding that the court was
limited to evidence it recalled from the earlier civil litiga-
tion and to Irving’s own testimony in SEC investigation.
Although those sources were mentioned as appropriate
for consideration by the court in making findings of guilt,
we can find no limitation to them or exclusion of evidence
at trial, express or implied. Indeed counsel for Irving said,
ea ee
-17084-087, 17089-095 36a
in the course of the colloquy: **... my understanding was
that... and I indieated to Mr. Stein [the United States
Attorney] that the evidence that the Court would hear
in the pending ease... it was my understanding with Mr.
Stein that that could be used for the purposes that were
indicated,”
The seeond claim is that assertions made by the court
at the hearing prior to the pronouneement of sentence
showed that the court relied on erroneous information.
The colloguy between the court and Mr. Irving after
counse! had spoken amounts to fifteen pages of transeript.
The covrt outlined several adverse factors: That Irving
and others nad committed a deliberate fraud on the
reorganization court in Florida; that Irving had misrepre-
sented in that court his ability and willingness to commit
a million dollars worth of assets to ASU if necessary; had
misrepresented that no public offering of stock was
contemplated in the near future; and had jointed in an
improper agreement to give Mr. Umbaugh an interest in
ASU.
Three of the allegedly erroneous accusations relate to
the above matters. The differences between Irving and
the court in these respects are matters of interpretation
of and choice of inferences from facts which were
thoroughly established.
The court also stated that although Irving claimed to
have lost $200,000 in ASU, figures worked out at the
court’s request, apparently by the government, indicated
he came out a little better than even.
Mr. Irving was given an opportunity to respond to all
the court’s assertions and he succeeded in convincing the
court that the computations were in error and that he had
suffered a loss exceeding $150,000. The error was
ova 17084-087, 17089-095
acknowledged by the court before — sentence was
pronounced.
The third claim is that the seven year total sentence
is substantially longer than those imposed in & number
of reported cases, The government counters with citations
of securities fraud cases where the terms were longer
than seven years, Disparity in sentences is not a predicate
for appellate review.
11. McQuinn’s claims. Mr. McQuinn was a stock sales-
Ian employed by ASU in the summer of 1964. He was
charged in counts 7 to 17, with mailing dates from April
8, 1964 to September 29, 1964. He entered a plea of nolo
contendere to eleven counts and was found guilty on counts
16 and 17.
He raises only challenges which have already been
disposed of.
12. Nash’s claims. Mr. Nash was sales manager for ASU
and had previously been employed by Umbaugh. He was
charged in every count except count 39. On June 1, 1967
(at the same time as Irving) he pleaded nolo con-
tendere to 21 counts. On July 28, the court found him guilty
on counts 10, 14, 18, 19, 20, and 21, and sentenced him to
concurrent terms, the longest being five years on count
10. Nash appeared without counsel on June 1 and July
28. In August, counsel filed a motion on his behalf to set
aside the conviction and for leave to withdraw the plea.
The court set aside the conviction and sentences, appar-
ently because the record did not affirmatively indicate
waiver of counsel on J uly 28, but denied leave to withdraw
the plea. On October 26, the court found Nash guilty on
counts 10, 14, 19, 20, and 21 and sentenced him to
concurrent terms, the longest being four years on count
10. All other counts were dismissed or findings of ac-
quittal made.
17084-087, 17089-095 38a
Mr. Nash makes contentions similar to some of those
made by Mr. Irving and other appellants and already
disposed of. In addition he contends in his brief or appeal
that the district court ‘‘committed error in holding that
[he] waived the right to counsel at the time he entered
his plea of nolo contendere’’. He also asserts that when
his conviction was sect aside he gained the right to liberality
in considering his request for leave to withdraw his plea.
We do not find the latter argument very persuasive where
the conviction was set aside, as here, on grounds arising
after the plea. We observe, also, that Nash is not justly
entitled, unless there be good reason, to put the govern-
ment to a long and repetitious trial which would not have
been necessary if Nash had maintained his plea of not
guilty and stood trial as scheduled.
We conclude that there was a sufficient waiver of
counsel at the time the plea was entered. The facts are,
in substance, as follows:
Mr. Van Orman, who is Nash’s counsel on this appeal,
filed an appearance as counsel for Nash in the district
court July 22, 1966, and continued to represent him until
April 14, 1967 when the court permitted Van Orman to
withdraw. Van Orman had made motions on behalf of Nash
and had appeared April 3 at a pretrial conference. The
trial date of May 31 (later postponed one day) was then
set. Nash appeared May 29 and requested a continuance
in order to seek counsel. The continuance was denied. He
appeared May 31 and June 1 without counsel.
On the morning of June 1, Nash, Irving, and Mr. Kight-
linger, Irving’s counsel, were before the court, Mr.
Kightlinger stated that he had explained the plea about
to be entered to his client and that since Nash was not
represented, he had, upon request by Nash, ‘‘given him
39a 17084-087, 17089-095
advice as to the effect of the plea which he desires to
make’’, After asking and obtaining Nash’s permission,
Kightlinger said he was entering nolo contendere pleas
for both. The court then carefully and precisely explained
the meaning, effect and consequences of a nolo contendere
plea. It has not been claimed, nor could it be, that there
Was any deficiency in compliance with Rule 11, F.R.Cr.P.
After full explanation, the court said: ‘‘Now, Mr. Nash
is not represented by counsel this morning, but in the past
he at one time had counsel. Counsel withdrew his appear-
ance, stating at that time that Mr. Nash was financially
able to hire counsel but had not completed his arrange-
ments with counsel. Mr.-Nash has never indicated to the
Court that he is not financially able to hire counsel. He
has appeared here as his own counsel on one or two
occasions, the last being yesterday morning, so counsel
has not been appointed for Mr. Nash. It has been my
finding or opinion, as things have gone, that he has elected
to represent himself. Is that right, Mr. Nash?” Mr. Nash
replied, ‘‘Yes, Your Honor.”’
The court then inquired as to their pleas. Each pleaded
nolo contendere, The court accepted the pleas, but stated
he would make no finding until he heard something to
prove the corpus delicti. The discussion concerning the
source of proof, already referred to, followed.
There would be a serious problem if this were a typical
Our conclusion is strengthened by the facet that the
motion, prepared and filed by Nash’s counsel in August,
17084-087, 17089-095 40a
neither claims any lack of understanding about the nature
of the charge or the consequences of the plea nor that he
didn’t intelligently waive counsel.
We think that Nash has failed to show that withdrawal
of the plea is necessary to correct manifest injustice, and
that there was no unfairness or abuse of discretion in
denying such leave.
The convictions and sentences of appellant Olsen on
county 24, and of appellants Mayne and Securities
Services on count 33 are set aside. In all other respects
the judgments appealed from are affirmed.
A true Copy:
Teste:
Clerk of the United States Court of
Appeals for the Seventh Circuit.
APPENDIX B
United States v. Rabinowitz, 366 F. 2d 34, (5th Cir., 1966)
Mobley v. United States, 379 F. 2d 768 (5th Cir., 1967)
United States v. Cohen, 275 F. Supp. 724 (1967 )
United States v. Hunt, 265 F. Supp. 178 (W.D. Texas,
1967) .
Hanson v. United States, 393 F. 2d (10th Cir., 1968)
United States v. Leonette, 291 F. Supp. 461 (S.D. N.Y.,
_ 1968)
Cuil Sraves v. Valentine, 288 F. Supp. 957 (D. Puerto
Rico, 1968)
King v. Cook, 297 F. Supp. 99 (N.D. Miss., 1969)
Salisburg v. Grimes, 406 F. 2d 50 (5th Cir., 1969)
Sanders v. United States, 415 F. 2d 621 (5th Cir., 1969)
Witcher v. Peyton, 405 F. 2d 725 (4th Cir., 1969)
4la
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.