Memorandum — Caterine v. United States

2 als BO MS RE ie NO AD A Nh A

INDEX

Page

CITATIONS

Cases:

Barr v. United States, 324 U.S. 83. ........00ccccccecseseeee 6

Blockburger v. United States, 284 U.S. 299 0.0.0.0... 5

Stee FR I 8 oo coca cccunskacyscencuseens 8

California v. Green, 399 U.S. 149 oo. ceeeeeeeeeee 8

Glasser v. United States, 315 U.S. 60 .............0c000. 7

Government of the Virgin Islands v. Hernandez,

508 F.2d 712, certiorari denied, 422 U.S. 1043 ...6

Hart v. Henderson, 449 F.2d 183 ...........c.0ccccccceeeee 10

Moore v. New York Cotton Exchange, 270

Wn RE eke eae ate eee Co 5

United States v. Haves, 444 F.2d 472, certiorari

INI UI TREO I ee acne 9

United States v. Maze, 414 U.S. 395 ...0.0.......0.... 5,6

United States v. Petrillo, 332 U.S. o...cccec cece ceeeeee 6

United States v. Powell, No. 74-884, decided

CR 2 Se RU ad ce eed NE RTE Ie ORT 6

United States v. Stidham, 459 F.2d 297,

certiorari Genied, 409 US, B66 cccnccnccccccccocceacccees 10

Statutes:

MLE, CRS GPA aaa ai Silene eset eich each ere Vana es 6

Se Le SAR | RRs ste ectey mree ., fe ee oe

See eae GD OR ice ick einen a iesbaeue ls 4

TG Or ee ee eee 2

In the Supreme Court of the United States

OCTOBER TERM, 1975

No. 75-652

ANTHONY FRANCIS CATERINE, JR., PETITIONER

Vv.

UNITED STATES OF AMERICA

No. 75-5678

HERBERT MIKELBERG, PETITIONER

Vs

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT

MEMORANDUM FOR THE UNITED STATES IN OPPOSITION

Petitioners contend that 15 U.S.C. 1644 is unconsti-

tui onally vague; that the trial court erroneously defined the

te: “transaction” in its instructions to the jury; that the

evidence was insufficient to sustain petitioners’ convic-

tions: that the trial court erred in permitting a government

Witness to be excused without being subject to cross-

examination; that the prosecutor made improper comments

during closing argument; and that the court abused its

discretion in sentencing petitioners.

(1)

2

Following a jury trial in the United States District Court

for the Northern District of Texas, petitioners were con-

victed of conspiring to use fraudulently obtained credit

cards, in violation of 15 U.S.C. 1644 (count 1), and of aiding

and abetting the use of fraudulently obtained credit cards, in

violation of 15 U.S.C. 1644 and 18 U.S.C. 2(counts 3 and 4).

On counts | and 3, petitioner Caterine was sentenced to

concurrent terms of two years’ imprisonment and was fined

$5,000; on count 4, he was placed on three years’ probation,

to be served consecutively to the sentences imposed on

counts | and 3, and was fined $5,000. Petitioner Mikelberg

was sentenced to concurrent terms of 18 months’

imprisonment on counts | and 3 and was placed on four

years’ probation on count 4, to be served consecutively to

the sentences imposed on counts | and 3. The court of

appeals affirmed. 517 F. 2d 246.

Petitioners and others participated in a highly organized

scheme to use fraudulently obtained credit cards to pur-

’ chase hundreds of thousands of dollars worth of items,

principally airline tickets that they resold at half price. Two

of petitioners’ co-conspirators, Lester Ray Henderson and

William A. Davis, each pleaded guilty to one count of the

indictment and testified for the government at petitioners’

trial.!

Henderson testified that he charged numerous airline

tickets on fraudulently obtained credit cards. Prior to

making the purchases, Henderson would meet with

Caterine and sometimes Mikelberg (A. 383, 385, 391, 395,

413, 420, 428)? to obtain the names of the persons for whom

'Rita Kenner and Richard W. Payne were also named as co-

conspirators in count | but were not named as defendants.

“A” refers to the appendix filed in the court of appeals.

pao

3

the tickets should be purchased (A. 387, 395, 396, 414, 428).

During one of his meetings with Caterine, Henderson said

that he was going to apply for credit under the name of

Clinton R. Pittman (A. 393). Henderson received aid from

both Caterine and Mikelberg in obtaining credit cards

under this name (A. 392-393, 502-503, 351-352, 391, 425).

Henderson charged in excess of $5,000 worth of airline

tickets (Govt. Exh. Series 8) on an American Express card

issued to Clinton R. Pittman (count 3).3 These tickets were

given to Caterine, who paid Henderson one half their face

value (A. 388-389, 410, 428-429).4 Henderson also used

this credit card to charge liquor that he later sold to peti-

tioner Caterine at a 30% discount (A. 429-434).

Co-conspirator Davis testified that he applied for various

credit cards in the name of William C. Tucker (A. 162-163)

and gave other false information on his applications (A.

‘Henderson officially changed his name to Clinton Pittman on

May 11, 1971 (A. 484). However, he applied for credit cards. including

the American Express card involved in count 3, prior to that date

(A. 347, 390, 424).

‘Kathleen Parrish, a former employee of petitioner Caterine,

testified that in August 1971 she was present at a conversation in which

petitioners, Henderson and Payne discussed the “burning™ of credit

cards charging amounts far above the credit limit with no intention of

making payment (A. 538-540). They discussed the charging of airline

tickets and selling them at half price (A. 544). At that time petitioner

Mikelberg said that he had his own plan for using credit cards (A. 543),

which he later explained to at least Parrish and Henderson. This plan,

which the participants referred to as the “Mikelberg Special” (A. 546).

involved taking ten American Express, ten Carte Blanche and ten

Diners Club cards, charging $10,000 worth of airline tickets on each

card, then taking one card and the pertinent vouchers to the issuing

company and trying to sell the company a computer plan whereby it

could detect such fraud (A. 545-546). In many respects, the actual

scheme was quite similar to this proposal.

4

165-170). Using names provided by Henderson (A. 315-

316),° Davis purchased numerous airline tickets with these

cards (A. 170-268). Those tickets that Davis did not

personally use were turned over to Henderson (A. 267) in

return for a percentage of their face value (A. 268). Davis

charged $11,482.91 worth of airline tickets on an American

Express card issued in his name (A. 247) (count 4) and

turned over $9,152.64 worth of these tickets to Henderson

(A. 246). Some of these tickets were purchased on a

February 1972 trip to Atlanta (A. 264-265), during which

petitioner Mikelberg had provided Davis with a list of

names of persons for whom he should purchase tickets (A.

266).

1. Petitioners contend (No. 75-652 Pet. 7-8: No. 75-5678

Pet. 8-10) that the term “transaction” in 15 U.S.C. 1644

renders the statute unconstitutionally vague.® Petitioners

also contend (No. 75-652 Pet. 8-10; No. 75-5678 Pet.

‘Many of the tickets purchased by Davis with his TWA, American

Express and American Airlines credit cards listed T. Caterine as the

passenger (A. 172-203).

*IS U.S.C. 1644 provided that:

Whoever, in a transaction affecting interstate or foreign

commerce, uses any counterfeit, fictitious, altered, forged, lost.

stolen, or traudulently obtained credit card to obtain goods or

services, or both, having a retail value aggregating $5,000 or more,

shall be fined not more than $10,000 or imprisoned not more than

live vears, or both.

In 1974, Congress amended Section 1644. Petitioners’ fraudulent

scheme to purchase airline tickets clearly talls within the terms ot

the amended statute, which, in relevant part, provides (15S U.S.C

(Supp. IV) 1644(¢)):

Whoever knowingly receives, conceals, uses, sells, or trans-

ports in interstate or foreign commerce One or more tickets for

interstate or foreign transporation, which (1) within any one-vear’

period have a value aggregating $500 or more, and (2) have been

purchased of obtained with one or more counterfeit, fictitious,

altered, forged, lost, stolen, or fraudulently obtained credit cards

* * * shall be fined not more than $10,000 or imprisoned not more

than ten vears, or both

—

5

10-14) that the court erred when it instructed the jury

that “[t]he term ‘a transaction’ may include more than

one purchase or charge so long as there is a common

scheme or design behind those purchases or charges.”

In this regard petitioners assert that if each presentation

of a fraudulent credit card is a “transaction,” the govern-

ment failed to establish any one transaction which met the

$5,000 jurisdictional amount of former Section 1644.

The court of appeals correctly held, however, that Con-

gress intended a flexible definition of “transaction,” see

Moore v. New York Cotton Exchange, 270 U.S. 593, 610.

and that the district court’s instruction was proper.* Con-

There the Court said:

“Transaction” is a word of flexible meaning. It may compre-

hend a series of many occurrences, depending not so much

upon the immediateness of their connection as upon their

logical relationship.

‘Contrary to petitioner Mikelberg’s contention (No. 75-5678 Pet.

11-12), the court’s instruction did not transfer to the jury the function

of determining the law. The court clearly defined “transaction” and

left for the jury the factual determination whether a fraudulent scheme

existed.

Petitioner Caterine’s reliance (No. 75-652 Pet. 9) upon United

States vy. Maze, 414 U.S. 395, and Blockburger vy. United States,

284 U.S. 299. is misplaced. The statute considered in Maze, 18

U.S.C. 1341. specifically prohibits each fraudulent use of the mails

without any monetary limitation and does not provide for the ag-

gregation of the value of money or property fraudulently obtained.

Thus. the Court's decision in Maze is not inconsistent with the district

court’s definition of “transaction.” Nor is the district court's definition

inconsistent with Blockhurger, which held that two sales of morphine

constituted two separate offenses despite the involvement of the

same buyer and seller and the relatively short period of time between

each sale. There is no reason why a series of events cannot be viewed as

separate transactions for some purposes and a single, interrelated

transaction tor other purposes; here, for instance, each fraudulent

purchase was doubtless a separate offense under state law, but this

fact has no logical bearing on whether the series of purchases fall

within the ambit of the federal prohibition.

6

gress clearly meant to prohibit, and the statute plainly

forbids, the interstate use of fraudulently obtained credit

cards to obtain goods or services, or both, with an ag-

gregate retail value of $5,000 or more. This prohibition is

neither vague nor indefinite. Moreover, Congress was aware

that a single transaction by credit card rarely exceeds

$5,000. The jurisdictional amount was imposed to protect

federal courts from an inundation of fraud cases involving

small purchases, but the principal limitation of the statute,

as the court of appeals properly found (No. 75-652 Pet. App.

| 3a), is that it confines “the aggregating of purchases only to

those purchases made ‘in a transaction affecting interstate

or foreign commerce.’ ” If the statute were further limited

to single $5,000 credit card purchases, it would be rendered

practically useless. Congress could not have intended sucha

result.? See Government of the Virgin Islands v. Hernan-

dez, 508 F. 2d 712 (C.A. 3), certiorari denied, 422 U.S.

1043.

As thus construed, the term “transaction” is not so devoid

of meaning as to render the statute unconstitutionally

vague. The statute intelligibly forbids a definite course of

conduct: fraudulent purchases of goods or services having a

retail value aggregating $5,000 or more. “The fact that

Congress might * * * have chosen [and in this case

subsequently did choose] ‘clearer and more precise

language’ equally capable of achieving the end which it

sought does not mean that the statute which it in fact drafted

is unconstitutionally vague.” United States v. Powell, No.

74-884, decided December 2, 1975, slip op. 7, quoting

United States v. Petrillo, 332 U.S. 1.7.

‘An accepted statutory rule of construction is that words which

employ the singular also include the plural. | U.S.C. 1h see. e.g... Bary

v. United States, 324 U.S. 83. To be consistent with the statutory

provision that 15 U.S.C. 1644 permis an aggregation of the retail

value of the goods and services fraudulently obtained, “transaction”

must include a common scheme of fraudulent purchases

ee

7

2. Petitioners also contend (No. 75-652 Pet. 10-11: No.

75-5678 Pet. 14-20) that there was insufficient evidence to

show that they knew the credit cards had been fraudulently

obtained. As set forth above (pp. 2-4), the jury was aware

that petitioners had received thousands of dollars worth of

airline tickets at half their face value, that petitioners knew

that Henderson had applied for credit under a false name,

that petitioners had provided names to Henderson and

Davis for ticket purchases, that petitioners and Henderson

had discussed the “burning” of credit cards, that petitioner

Caterine had permitted Henderson to use his business

establishments as credit references and to consult his credit

card black lists. Viewing this evidence in the light most

favorable to the government, see Glasser v. United States,

315 U.S. 60, 80, the court of appeals correctly concluded

that the jury could find beyond a reasonable doubt that

petitioners knew the credit cards had been fraudulently

obtained. Moreover, the evidence showed that petitioners

had conspited to use and had aided and abetted the actual

use of these fraudulently obtained cards.

3. Petitioner Caterine contends (No. 75-652 Pet. 6-7) that

the district court erred in permitting a witness called by the

government to be excused without being subject to cross-

examination. Richard Payne, an unindicted co-conspirator,

testified for the government before the grand jury prior to

the return of the instant indictment. At trial, however.

contrary to his grand jury testimony, Payne could not

identify petitioner Mikelberg (A. 507) or petitioner Caterine

(A. 507-509). The prosecutor gave Payne a transcript of his

grand jury testimony, but it failed to refresh his recollection

(A. 509-512). The government thereupon claimed surprise

and was permitted to impeach the witness (A. 512-515).

Payne claimed not only that he could not recall being asked

during the grand jury proceeding whether he had a

conversation with petitioner Caterine but also that he could

8

not even recall testifying before the grand jury (A. 515).

Since, in the court's judgment, the prosecutor “ha[d] elicited

no answers to [his] questions” (A. 515), the court, without

objection, permitted Payne to be excused (A. 515).

The district court’s action was proper. Since defense

counsel did not object, petitioner cannot now complain that

he was deprived of his constitutional right to confront

adverse witnesses.'? Moreover, petitioner's right to cross-

eXamination extends only to those witnesses who testify

against him. See, e.g., California v. Green, 399 U.S. 149,

154-165. Petitioner concedes (No. 75-652 Pet. 6) that the

government's attempt to elicit testimony from Payne “did

not produce evidence directly harmful” to his defense. In

addition, the court instructed petitioners that they could call

Payne as a witness, but neither did so.

4. Petitioners contend (No. 75-5678 Pet. 21-23)''! that the

prosecutor made improper comments in rebuttal argument.

During closing argument, counsel for petitioner Caterine

attacked the government's witnesses and charged that the

government “should be ashamed to have brought before the

“Petitioner Caterine, relying upon Brookhart vy. Janis, 384 U.S. 1,

contends (No. 75-652 Pet. 6-7) that counsel could not waive the right

to cross-examination. Brookhart, however. considered a unique Ohio

practice which, if chosen by the defendant, required the state to

make only a prima facie showing of guilt. (Since Ohio had no

statutory plea of nolo contendere, this procedure was an attempt to

circumvent the collateral etfects of a plea of guilty for later civil suits

arising out of the same factual situation.) The waiver of cross-

eXamination in these circumstances was, in effect, a plea of guilty,

and such a waiver could not be made without the knowledgeable con-

sent of the defendant. Here, the waiver of cross-examination cannot be

deemed the equivalent of a guilty plea.

Petitioner Caterine (No. 75-652 Pet. 1-2) has adopted the issues

raised by petitioner Mikelberg in his petition for a writ of certiorari

9

people of this county such an array of debauched

individuals” (A. 965). As a specific example of the alleged

weaknesses in the government’s case, defense counsel

referred to witness Payne and his inability to remember

anything (A. 965).

In rebuttal, the prosecutor argued in substance that the

government must use “the type of testimony that we have”

(A. 967) and that if it could not use testimony from the type

of individuals who testified at the instant trial it “would

probably be out of the business of prosecuting this type of

case” (A. 967). The prosecutor's reference (A. 970) to

Payne's inability to remember anything and to the fact that

witnesses say one thing and “then when it comes time for

trial, things are slightly shaded a different bit [because]

* * * [t]hey are scared to death” were merely illustrations

ot problems encountered by the government in these types

of cases. In context, these statements were proper. In any

event. petitioners have not shown how they were

prejudiced.!?

The government concluded its rebuttal by stating that the

jury could infer from the evidence that petitioners would be

involved in crime for the rest of their lives (A. 972). This was

a comment upon the evidence, not a statement of belief

which implied that the prosecutor possessed some superior

knowledge. Even if the comment was improper, the district

court’s immediate admonition to the jury to disregard it (A.

972) obviated any prejudice. The court did not err in

refusing to grant a mistrial. See, e.g., United States v. Haves,

444 F. 2d 472 (C.A. 5), certiorari denied, 404 U.S. 8&2.

'?Petitioner Mikelberg (No. 75-5678 Pet 23) suggests only that the

remarks were prejudicial because the evidence in the case was weak,

implying perhaps that petitioner could only have been convicted on the

basis of the prosecutor's closing statement. This argument is nothing

more than a challenge to the sufficiency of the evidence, which, as we

have shown above (p. 7) was clearly adequate to support the conviction.

10

5. Petitioners finally contend (No. 75-5678 Pet. 24-26)

that the district court abused its discretion in sentencing

them to imprisonment while Henderson and Davis received

probation and fines after pleading guilty to one count of

the indictment. Petitioners point to nothing beyond the

disparity in sentences, which itself does not show that they

were punished for exercising their right to trial by jury. Hart

v. Henderson, 449 F. 2d 183 (C.A. 5). Their assertion that

the innocent may be intimidated into pleading guilty by the

sentences in this case is unfounded. Petitioners exercised

their right to trial, and they were convicted by a jury on the

basis of overwhelming evidence. They received sentences

well within the statutory limit (see 15 U.S.C. 1644).

Under these circumstances, there was no abuse of

discretion. See, e.g., United States v. Stidham, 459 F. 2d

297, 299-300 (C.A. 10), certiorari denied, 409 U.S. 868.

It is therefore respectfully submitted that the petition fora

writ of certiorari should be denied.

RopertT H. Bork,

Solicitor General.

FEBRUARY 1976.

DOJ-1976-02