Opinion
No. 48.
November 19, 1943.
Appeal from the District Court of the United States for the Southern District of New York.
Albert H. Bramson, Robert North and Reliance Underwriting Corporation were convicted of using the mails to defraud and of conspiracy in the use of mails to defraud, and they appeal.
Affirmed.
Defendants appeal from judgments of conviction, entered after a trial before a jury who returned a verdict of guilt for using the mails to defraud and for conspiracy to use the mails to defraud.
Commonwealth Trust Company was trustee under trust indentures called Royal Investment Trust Series A, B and so on. The Royalty Management Corporation, so-called "trustor" for series F, and the Reliance Underwriting Corporation, one of the defendants, "trustor" of series G, were both controlled by the defendant Bramson. The trust indentures for series F and G were substantially the same except principally as to the amount of certificates to be issued thereunder. These indentures each provided in substance, inter alia, as follows: The trustor was to deposit with the trustee oil royalty deeds, and other forms of assignments of interest in oil and gas royalties, which the trustee was to hold for the benefit of participating certificate holders. When a deposit of an oil royalty deed was made, the trustor was to determine its value. The trustee was authorized, at the request of the trustor, to issue certificates in the amount of such declared value. The trustee, on receipt of the income of the trust assets, after deducting certain fixed charges, was to accumulate part, and, out of the balance, to pay to certificate holders one-half percent a month of the face value of their certificates. Under series F, the trustee was to select by lot, certificates for redemption; under series G, the trustor was to determine, by lot, the certificates to be redeemed. Upon redemption, the certificate holder was also to receive a nonredeemable certificate of one-half the face value of his original certificate, the other one-half being issued to the trustor, both certificates to share in the residuary income of the trust after all certificates were redeemed.
Bramson sold the certificates through a dummy, B.W. Bunker Company, in the following manner: His salesmen induced customers, largely over the telephone, to purchase on margin legitimate listed stocks; these sales were followed up by further telephone solicitation to increase the customers' equity by having them purchase larger amounts of such stocks; when a customer's account showed a sufficiently large equity, he would be induced to "switch" into the purchase of Royalty Investment Trust certificates.
There was evidence that, in the case of both series F and G, Bramson had overstated the value of the corpus of the trusts, thus making for an oversubscription, and that, at the time of some sales of certificates, the corpus of the trust had not been deposited with the trustee. There was also evidence that Bramson had caused some certificates in series G to be cancelled, reissued in the names of members of his family, and then redeemed.
Bertha Rembaugh, of New York City (Martin J. Forgang, of New York City, of counsel), for appellant Robert North.
George Wolf, of New York City (Victor Feingold, of New York City, of counsel), for appellants Bramson and Reliance Underwriting Corporation.
James B.M. McNally, of New York City (Thomas F. Murphy, of New York City, of counsel), for appellee.
Before SWAN, AUGUSTUS N. HAND and FRANK, Circuit Judges.
Defendants Bramson and Reliance Underwriting Corporation complain principally of alleged errors in connection with the testimony of a government witness Robinson, a post office inspector and accountant. There were received in evidence summaries or recapitulations prepared by Robinson, from the books and records of Commonwealth, of all the certificates that were redeemed in series F and G. Defendants complain that it was not shown that Robinson's testimony and his summaries were based upon the complete books and records. These books and records had been introduced in connection with the testimony of a witness Miss Benson, treasurer and assistant secretary of Commonwealth. When on the stand, she was unable to find two or three certificates; but the records were admitted in evidence with leave to defendants to move to strike out her testimony and the records; no such motion to strike out was thereafter made. It was accordingly proper to receive in evidence Robinson's summaries based on the records. Cf. United States v. Schenck, 2 Cir., 126 F.2d 702, 708-709. Defendants also objected to the admission in evidence of certain charts prepared by Robinson, on the ground that they were prepared on the basis of an improper interpretation by Robinson of two identical clauses in the two trust agreements. The trial judge agreed with that interpretation, pointing out that the clauses on their face were ambiguous and that the interpretation on which Robinson had based his charts was in accord with the interpretation put on those clauses by the defendants Bramson and Reliance according to their own conduct. As we are satisfied that the trial judge was correct, there is no need to go into the details of this matter. To show that this interpretation was incorrect, defendants rely heavily on the testimony of their witness Lipkin, who also prepared charts showing a result other than that shown by Robinson's charts; but Lipkin testified that a number of the figures included in the charts he prepared were based not on the records in evidence, but on information given him by the defendant Bramson who did not take the witness stand. We conclude that there was nothing in connection with the testimony of Robinson which constitutes reversible error.
Yetta Land, Bramson's sister, a lawyer, was asked by government counsel whether she represented "a great many Communists." Objection was made to this question but at once withdrawn. The witness, having answered that she represented "a lot of Communists, like Republicans and a lot of Democrats," was then asked "Are you a Communist?" The witness inquired of the judge whether he desired her to answer this question which she considered improper; the judge replied that it was a matter of indifference to him, but that, if an objection were made, he would sustain it. Objection was made and no answer to the question was given. No motion was made by defendants that the court instruct the jury to disregard this question. It was, of course, improper; but, in the context of this lengthy trial and in the light of the mass of evidence against the defendants, we think it was not so prejudicial as to constitute reversible error.
Defendants complain that, in response to the court's question, government counsel stated that certain other defendants had pleaded guilty, and that this statement was made after several jurors had been chosen and in the presence of the remaining jurors who were subsequently accepted. We do not think that, in any circumstances, such a statement would constitute reversible error; moreover, it does not clearly appear from the record that the jurors were then present and overheard this statement; the record merely shows that the selection of the jury was begun after this statement was made.
Defendants objected to the introduction of testimony by the government relating to transactions in connection with the stock of Wyoga Gas Oil Company; but defendants themselves, having at first objected to such testimony, subsequently introduced testimony of a witness who sufficiently referred to those transactions to make the government's evidence on the subject admissible. Moreover, the testimony relating to those securities was relevant as showing that Bramson had caused some trust certificates in series G to be cancelled, reissued in the name of his family, and then redeemed, thereby depriving certificate holders of a bona fide chance of having their certificates selected for redemption by lot, and diverting the diminishing income of the trusts to himself or his family.
Defendants contend that the judge made remarks prejudicial to them, that his charge was unfair and that he refused to give certain instructions requested by them; these arguments we regard as so completely without justification as to warrant no discussion.
The defendant North contends that the government failed to establish a prima facie case against him and that, in any event, his prosecution was barred by the statute of limitations. We cannot agree. There was testimony that he was one of the salesmen employed by Bramson, and that, sometimes, using the fictitious name of Boyd, he had, by telephone, induced persons to buy listed stocks. Johnston, called as a witness for the government, testified that a man named Boyd, representing Bunker Company, had induced him, by telephone, to buy a number of shares of listed securities, and that subsequently the same man named Boyd, whose voice he recognized, had, by telephone, induced him to sell those securities, using the proceeds to purchase Royal Investment Trust certificates, on the representation that they were "a very good investment" and that he would make a "handsome profit" by a sale of these certificates in thirty days. Although Johnston testified that Boyd, some time later, in 1935, had called on him, he was unable at the trial, some seven years later, to identify North as Boyd. We cannot say that that fact made it unreasonable for the jury to believe Johnston's story. Accordingly, there was sufficient evidence to connect North with the conspiracy.
The indictment is dated February 20, 1939, so that the prosecution of North as for conspiracy would have been barred if he had completely severed his connection with the conspiracy on or before February 20, 1936. The witness Reeves, who had been working with North for Bramson, testified that, in January or February, 1936, he met North on the street, and that North then said that "he was winding up or getting through with Bramson." From this evidence, the jury could infer that Boyd had not withdrawn from the conspiracy by February 20, 1936. Hyde v. United States, 225 U.S. 347, 371, 372, 32 S.Ct. 793, 56 L.Ed. 1114, Ann.Cas. 1914A, 614; Sperry Gyroscope Co. v. N.L.R.B., 2 Cir., 129 F.2d 922, 927, 928.
Affirmed.