# Reply Brief — Borgman v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 1974
- **Citation:** 419 U.S. 828

## Text

OCTOBER TERM, 1974

No. 73—1849

AuFrep J. HEMLOcK,

Petitioner,
v.
Untrep States or AMERICA.
No. 73—1850
Harry Horrer,
Petitioner,
v.

Untrep States or AMERICA.

On Petrrions ror Writs oF CERTIORARI TO THE UNITED
States Court or APPEALS FOR THE SEconp Crircurtr

PETITIONERS’ REPLY BRIEF

ARTHUR KARGER
Counsel for Petitioner
Alfred J. Hemlock

600 Madison Avenue
New York, N. Y. 10022

Heratp Prick Faunrincer

Counsel for Petitioner
Harry Hoffer

One Niagara Square -

Buffalo, New York 14202

Ba ee ot

oe

TAAL 4
¢ C, ESPHES
a aa ee pes

TABLE OF CONTENTS

I. Should action here be withheld until the Par-
I iid cs do 84k Kaeo eae en

II. The concurrent sentence doctrine is not a bar
to this Court’s consideration of any of the issues
I er IS nv necsecaseeueansan

III. As to the Court of Appeals’ extension of the
Federal hearsay exception relating to co-con-
spirators’ declarations ..............cececeees

BV. Se Oh ie Ger ee og 5 wo once ccd ees
(a) As to the “harmless error” doctrine ......

(b) As to the standards applicable under the
mail fraud statute, 18 U.S.C. § 1341 .......

(c) As to the Bahamian bank secrecy statute ..

MRE ei eam eae OE AMES age” OA ec SR Ra ae REET

Cases CITED

Barnes v. United States, 412 U.S. 837, 848, fn.16....
Benton v. Maryland, 395 U.S. 784, 791 .............
Grunewald v. United States, 353 U.S. 391, 399-402 ...
Holland v. United States, 348 U.S. 121, 138-139 (1954)
Krulewitch v. United States, 336 U.S. 440, 443-5 ....
Parness v. United States, No. 74-274 ...............

United States v. DeSapio, 435 F.2d 272, 284 (2d Cir.),
Obet; GAR, UNE Wes GD wn dn h ovvdrecccecvencccs

PAGE

10
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FAT ETT Ee ERTS ee SOI ER ET 2 bi ata Sena aed a ee a is

ii TABLE OF CONTENTS

PAGE
United States v. Enmons, 410 U.S. 396, 411 ......... 5

United States v. Williamson, 450 F.2d 585, 589 (5th
Cir.), cert. den. 405 U.S. 1026 ................. 6
Yee Hem v. United States, 268 U.S. 178, 185 (1925) .. 2

Statutes Crrep

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ee ah a ae ances diinamininh Mem iihe 3, 4
eo tcbeausesacddvccbleetuscbucecks 3
Ns I Bes + 6 enue <tr io ak sad ede 8

ate

IN THE

Supreme Court of the United States

OCTOBER TERM, 1974

a.
vv

No. 73—1849
Aurrep J. HemMLock,
Petitioner,
v.

Unttep States oF AMERICA.

No. 73—1850

Harry Horrer,
Petitioner,
Vv.

Unirep States or AMERICA.

On Petitions ror Writs or CERTIORARI TO THE UNITED
States Court or APPEALS FOR THE SEconp Circuit

dy
4

PETITIONERS’ REPLY BRIEF

The filing of this reply brief has been delayed because of

the Solicitor General’s failure to effect a timely filing of

* his opposition briefs. He has disregarded the time limits

set both in Rule 24(1) and in the August 27, 1974 letter

from the Clerk, which requested that responses be filed “on
7 or before September 11, 1974”.

—_— PREPARE PNR POSER DENI LP ASERL LYE II He EIST IL yt

2

The Government has thus impeded the right of these
petitioners promptly to bring to this Court’s attention new
considerations vitally affecting a propriety of granting
certiorari.’

Should action here be withheld until the Parness
case is reached?

Chief among the new factors here presented is the filing
of a petition for certiorari in Parness v. United States, No.
74-274, on September 13, 1974. The Court may wish to con-
sider withholding action on the instant petitions until it
reaches the Parness petition, which raises in a most dra-
matic fashion one of the critical issues in the instant cases
—i.e., whether the Second Circuit committed constitutional
error when it sanctioned the jury’s drawing of otherwise
impermissible inferences simplv because the petitioners had
not taken the stand and preseated a ‘‘credible exculpatory
‘version’’ of the alleged crime.

In the Parness case, the Second Cireuit quoted and relied
upon that portion of the opinion below that articulates this
strange new constitutional doctrine. The Parness petition
not only raises this matter as a question presented but notes
(pp. 33-34) that this doctrine appears to be an extension
and a perversion of a concept created by this Court in Hol-
land v. United States, 348 U.S. 121, 138-139 (1954), and
Yee Hem v. United States, 268 U.S. 178, 185 (1925).

This is far from what the Solicitor General has deseriked
(br., p. 12) as a ‘‘passing comment by Judge Friendly.”
It is a ruling and a precedent, already used in Parness, that

‘In this reply brief, unless otherwise specified, figures in
parentheses followed by the letter ‘‘a’’ refer to the pages of the
defendants’ Joint Appendix in the Court of Appeals; references
to ‘‘Pet.’’ are to the Hemlock petition (No. 73—1849) ; and refer-
ences to the Government’s brief (‘‘br.’’) are to its brief in oppo-
sition to the Hemlock and Hoffer petitions.

i al Ne FREED VR $ A SP ree PRL AL LE I TNS WR AOI Ne

3

poses a serious threat to the right given a defendant not to
have adverse inferences ¢rawn again .t him by reason of
his failure to testify in his own defen:e. It may be noted
that, contrary to the Government’s assertion (br., p. 11),
the trial court here did not give any instruction:. with rela-
tion to petitioners’ ‘‘right to remain silent w'chout infer-
ences being drawn from such silence.’’ This problem
obviously deserves review by this Court.

IL.
The concurrent sentence doctrine is not a bar to

this Court’s consideration of any of the issues raised
by petitioners.

Contrary to the Government’s contention (br., p. 9), the
concurrent sentence doctrine is not a bar to this court’s
consideration of the issue relating to 18 U.S.C. § 1342, the
“fictitious name” statute.2, Further, no claim is, or could
be, advanced by the Government that that doctrine could
possibly affect any of the other issues raised by petitioners."

? Petitioner Hemlock received concurrent sentences of four
years each, and petitioner Hoffer concurrent sentences of two
years each, on (a) Count 1 of the indictment, charging con-
spiracy, (b) Counts 2 through 5, charging substantive violations
of 18 U.S.C. § 2314, and (ce) Counts 6 and 7, charging substantive
violations of 18 U.S.C. § 1342, the “fictitious name” statute. In
addition, pet tioners Hemlock and Hoffer each received separate
sentences of one year each—to run concurrently with each other
brt consecutively to the other sentences—on Counts 12 and 13,
charging substantive violations of the mail fraud statute, 18 U.S.C.
§ 1341. The trial court also imposed a fine of $10,000 on petitioner
Hemlock, which, the court specifically recited, was “to cover all
counts” (957a-958a; emphasis supplied).

’ The issue relating to the mail fraud statute (Pet., pp. 19-21)
bears directly on petitioners’ convictions on Counts 12 and 13, on
which they received separate sentences. The remaining issues,
relating to the co-conspirators’ declarations (Pet., pp. 8-12), the
“harmless error” doctrine (id., pp. 14-17), the effect of petitoners’
failure to take the stand (id., pp. 17-19), and the Bahamian bank
secrecy statute (Frank Pet., pp. 16-19), affect petitioners’ convic-
tions on all the counts.

Ye asmong

4

Thus, this Court has held that ‘‘there is no jurisdictional
bar to consideration of challenges to multiple convictions,
even though concurrent sentences were imposed.’? Benton
v. Maryland, 395 U.S. 784, 791. All that was held in Barnes
v. United States, 412 U.S. 837, 848, fn. 16, on which the
Government relies, was that it is discretionary with this
Court to decide whether to review a case involving con-
current sentences.

In any event, the fine of $10,000 which was imposed on
petitioner Hemlock was, by its terms, based on all the
counts of which he was convicted, including the two counts
charging violations of § 1342, and it is sheer speculation for
the Government to suggest (br., p. 9, fn. 3) that ‘‘there is
little likelihood that the amount of the fine was affected by
the Section 1342 convictions.” Furthermore, the Court of
Appeals itself did not regard the issue relating to § 1342 as
barred by the concurrent sentence doctrine; indeed, that
court expressly stated that if the interpretation of § 1342
urged by petitioners were accepted, ‘‘there would have to
be a reversal not only of the convictions under Counts 6
and 7 [charging substantive violations of § 1342] but per-
haps also of the conviction on the conspiracy charge, Count
1, since the [trial] judge instructed that a finding of a con-
spiracy to violate § 1342 would warrant a conviction on the
conspiracy count’’ (Pet., App. A, p. 17a).

In attempting to support the expanded reading accorded
to § 1342 by the Court of Appeals, the Government asserts
(br., p. 9) that ‘‘nothing in the legislative history of the
statute supports an opposing view.”’ It is clear, however,
that nothing in the legislative history of the statute sup-
ports the broad interpretation applied by the Court of
Appeals; certainly, the legislative history of the statute, to
which the Government briefly refers in its brief in opposi-
tion to the separate petitions filed herein by co-defendants
Borgman and Frank (Nos. 73-1603, 73-1674), has no bear-
ing whatever on the issue here presented. Clearly, in such
circumstances, the settled canon is here applicable that “a

——

‘_—

5

criminal statute . . . must be strictly construed, and any
ambiguity must be resolved in favor of !enity.’”? United
States v. Enmons, 410 U.S. 396, 411.

As to the Court of Appeals’ extension of the Fed-
eral hearsay exception relating to co-conspirators’
declarations.

In an evident attempt to avoid meeting the issue as to
the validity of the Court of Appeals’ extension of the
Federal hearsay exception relating to co-conspirators’
declarations (Pet., pp. 8-12), the Government (br., pp. 12-
15) urges (a) that the issue was not properly preserved
for review in the trial court, (b) that the co-conspirators’
declarations here involved did not actually constitute hear-
say, and (c) that, in any event, such declarations were “not
a significant part of the case” against petitioners. There
is no merit whatever to any of these contentions, and it is
significant that the Court of Appeals in no way attempted
to rest its decision on any such grounds and in fact
squarely rejected the Government’s contention that the
issue had not been preserved for review.

As the Court of Appeals pointed out (Pet., App. A,
p. 20(a), fn. 16), the trial judge had early in the trial “ruled
that he would provisionally admit all declarations of alleged
co-conspirators subject to a subsequent blanket motion to
strike evidence the submission of which was not warranted
under the conspiracy exception” (195a, 203a, 217a-218a,
519a, 566a), and such a motion to strike was made by each
defendant at the close of the Government’s case (727a).*

*It may be noted that at an early point in the trial, counsel for
petitioner Hoffer made a request of the triai court—which under
the court's ‘‘ground rules’’ enured to the benefit of the other de-
fendants (134a)—for *‘a limiting instruction’’ with reference to
testimony which would noi be admissible against a particular de-
fendant unless justified under the rules relating to conspiracy ; that
the trial court stated it would ‘‘indicate at the proper time to
what references the jury's attention should be drawn and to whom
they apply”’; but that the court never did so (203a).

6

Contrary to the Government’s assertion (br., pp. 12-13),
the declarations made by co-defendants Frank and Borg-
man (also known as “Miller”) at the meeting of September
24, 1968 were “introduced for the purpose of proving facts
contzised in, or asserted by, those statements” and were
consequently hearsay. See United States v. Williamson,
450 F.2d 585, 589 (Sth Cir.), cert. den. 405 U.S. 1026 (cited
by the Government). As a matter of fact, such declarations
constituted the only direct evidence binding on any of the
defendants to show the excessiveness of the prices paid by
Planinvest to the Bahamian corporations, Columbia and
Splindian, for the two parcels of Canadian real property
here involved.

Thus, while there was evidence to show the prices paid
to the original sellers by the intermediate purchasers,
Kay and Miss Comeau, for such properties, there was no
evidence to show how much was paid by Columbia to Kay
for the parcel involved in the first transaction, or by
Splindian to Miss Comeau for the parcel involved in the
_ second transaction (See Pet., p. 6). Furthermore, there
was otherwise no evidence as to the values of the two
parcels of land involved, nor any expert testimony thereon.
Nor was there any evidence to show that petitioners
Hemlock or Hoffer had any knowledge of the prices paid
to the original sellers (Pet., p. 6).

The admissions made by Frank and Borgman as to
the excessiveness of the prices paid by Planinvest, coupled
with their bizarre explanation as to the use made of the
money ‘‘to pay off the CIA’’, constituted highly damaging
evidence which must surely have prejudiced petitioners
Hemlock and Hoffer in the minds of the jury in view of
the absence of any limiting instructions. It ma: be noted
in this connection that all the activities which the Govern-
ment notes (br., p. 13), were shown to have been engaged
in by Hemlock and Hoffer, were fully consistent with

7

their having acted merely in their capacity as attorneys
(see Pet., p. 17).

The additional arguments advanced by the Government
(br., pp. 13-14) are fully answered in the petitions herein
(Hemlock Pet., pp. 8-12; Hoffer Pet.. pp. 10-11). It may
be noted that there is not an iota of evidence in the ree-
ord—and none is cited by the Government—to support its
contention (br., p. 13) that ‘‘the conspirecy was still in
effect after the two real estate transactions had been
consummated, since there was evidence of a willingness
to make further fraudulent deals if the opportunity pre-
sented itself’? (see Hemlock Pet., p. 11, fn. 6).

In a further spurious effort to show that the conspiracy
was still continuing on September 24, 1968, when Frank
and Borgman made the declarations here involved, the
Government (br., pp. 13-14), attempts to give the errone-
ous impression that the cash withdrawals from the time
deposits in the Columbia and Splindian bank accounts in
Nassau were made at or about the same time. The evi-
dence, however, showed that the time deposits were opened
in about January or February 1968 and that the cash
withdrawals were made therefrom within a period of 30
to 60 days thereafter; i.e.. no later than March or April
1968, more than five months prior to the meeting of
September 24, 1968 (637a-642a).

It is immaterial that Frank’s purpose might have been
“to protect the success of the fraud”, as asserted by the
Government (br., p. 14), or to forestall any civil suit by
Mrs. Dominguez, as asserted by the Court of Appeals
(Pet., App. A, pp. 20a-21a). As pointed out in the Hem-
lock petition (pp. 11-12), any efforts on the part of the
conspirators to retain the fruits of their crime or to fore-
stall a civil suit by the victim, would be the equivalent of
nothing more than a purpose to “conceal” or “cover up”
their crime, such as was involved in Krulewitch v. United

8

States, 336 U.S. 440, 443-5, and Grunewald v. United States,
353 U.S. 391, 399-402.

Cases on which the Government relies, such as United
States v. DeSapio, 435 F.2d 272, 284 (2d Cir.), cert. den.
402 U.S. 999, are clearly distinguishable. Thus, in
DeSapio, the court emphasized that the purpose of the
declarant co-conspirator was, not “to conceal facts in order
to prevent detection, conviction and punishment”, but
rather to attempt to achieve some remaining affirmative
objectives of the conspiracy (435 F.2d at 284). No such
situation is here presented.

IV.

As to the other issues.

(a) As to the “harmless error’ doctrine.

The Government (br., pp. 14-16) makes no effort to meet
the issue raised by petitioners (Pet., pp. 14-17) as to
whether there is any warrant for applying different
standards of harmless error on the basis of whether the
error affects constitutional rights.

The Government (br., p. 16) apparently suggests that
petitioners are in no position to complain of the errors
committed by the trial court since they did not “offer a
written version of the instruction they would have pre-
ferred (Rule 30, Fed. R. Crim. P.)’’. That suggestion,
however, is wholly without merit. The Court of Appeals
itself pointed out in its opinion that the issue as to whether
a conviction in the criminal case would be entitled to col-
lateral estoppel effect in Mrs. Dominguez’ civil action, was
properly raised in the trial court, not only by objections
to the trial judge’s charge but also by defense counsel’s

9

request for an instruction on the subject (see Pet., p. 14;
id., App. A, pp. 28a-29a).°

There is likewise no merit to the Government’s claim
(br., p. 16) that “the instructional error was harmless even
by the stricter Chapman standard.” (See Pet., p. 15, fn. 9).

(b) As to the standards applicable under the mail fraud
statute, 18 U.S.C. § 1341.

The Government (br., p. 10; see also br. op. Borgman-
Frank petitions, pp. 12-13) attempts to distinguish United
States v. Maze, 414 U.S. 395, on the ground that the two
real estate transactions here involved necessarily remained
incomplete until the Canadian notary, Solomon, had suffi-
cient documentary evidence to be satisfied that Mrs. Domin-
guez’ Luxembourg corporation, Planinvest, was “em-
powered to buy and hold real estate.”

The evidence, however, undisputedly shows that Solomon
proceeded with the closing of the first transaction, even to
the point of filing the pertinent documents in the Montreal
registry office, without waiting to receive any of the papers
which Hoffer promised to send him (Pet., p. 19). Similarly,
even though Solomon never received the information relat-
ing to Planinvest’s power to own real estate, for which he

° As a matter of fact, as was pointed out in petitioners’ joint
petition for rehearing in the Court of Appeals (pp. 4-5), the
Government’s requested instructions on the issue of collateral
estoppel, which were adopted practically verbatim by the trial
court in its main charge, were embodied in supplemental requests
to charge which were not served on defense counsel until the
morning of the day on which the trial judge delivered his charge
to the jury, and no opportunity was afforded to defense counsel to
voice any objections thereto until the trial court delivered its
charge adopting the Government’s supplemental requests. Indeed,
as the Court of Appeals itself pointed out (Pet., App. A, p.
32a), it was not necessary at all for the trial court to charge on
the matter here involved. It was only the Government that re-
quested such a charge, and defense counsel could not be certain
until the actual charge that there would be any instructions on
the subject.

tes

10

wrote to Hoffer on January 30, 1968, Solomon nevertheless
proceeded with the consummation of the second transaction
in Nassau on February 5, 1968 (Pet., pp. 19-20).

(c) As to the Bahamian bank secrecy statute.

In its brief herein (pp. 10-11), as well as in its brief in
opposition to the Borgman and Frank petitions (p. 17), the
Government urges that the individual petitioners have no
standing to raise the issue relating to the Bahamian bank
secrecy statute since the Bahamian bank accounts here in-
volved were opened by petitioners Hemlock and Hoffer in
the names of the two Bahamian corporations, Columbia and
Spindian. It is submitted, however, that the individual
petitioners do have such standing, particularly since the
Government has here urged that the two Bahamian corpo-
rations were actually petitioners’ alter egos. In any event,
the Government has in no way shown that the issue raised
by petitioners is not an important one worthy of review by
this Court, and its injection of the issue of standing merely
serves to present an additional important and novel ques-
tion for this Court’s consideration.

CONCLUSION

For the reasons set forth in the petitions herein
and in this reply brief, the petitions for writs of cer-
tiorari should be granted.

Respectfully submitted,

ArTHUR KarceEr,
Counsel for Petitioner Alfred J. Hemlock,
600 Madison Avenue,
New York, N. Y. 10022.

Heratp Price FAnRINGER,
Counsel for Petitioner Harry Hoffer,
One Niagara Square,
Buffalo, New York 14202.
EvuGENE GRESSMAN,
Of Counsel.

SR ES

ASEM EG A

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385607_1900%3A3. Public record. Not legal advice.