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United States v. Macalpine.

July 21, 1942

UNITED STATES
v.
MACALPINE.



Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; John P. Barnes, Judge.

Author: Major

Before EVANS and MAJOR, Circuit Judges, and LINDLEY, District Judge.

MAJOR, Circuit Judge.

This appeal is from a judgment, entered March 2, 1942, upon defendant's plea of guilty to an indictment which charged a violation of Section 338, Title 18, U.S.C.A. Prior to such plea, a demurrer, on the grounds of duplicity, was overruled.

The action of the court below in overruling the demurrer to the indictment is the sole error presented on this appeal. It is the contention of the defendant here, as it was in the court below, that the indictment is duplicitous in that it charges in each count thereof more than one scheme to defraud. On the other hand, it is the Government's contention that only a single scheme is alleged in each count and that what the defendant relies upon as separate schemes are merely different methods by which such scheme was to be effectuated.

The indictment to which the plea of guilty was entered contained fourteen counts in identical form, except that each count alleged separate uses of the mail. We shall therefore consider count one and what is said with reference to it is applicable to all other counts.

Notwithstanding that the count is lengthy, we think it is important, in view of the contention made, that its allegations be set forth in some detail. In connection with the formal recitals, the count alleged that the defendants (the instant appellant and three other persons were named as defendants) devised and intended to devise a certain scheme and artifice to defraud and for obtaining money and property by means of false and fraudulent pretenses, representations and promises from a certain class of persons who were the owners of whiskey warehouse receipts, which persons are designated as those intended to be defrauded.

The substance of the scheme as alleged is as follows: That defendants maintained offices in Chicago under the names of the Penfield Company and K. G. Freight Lines, Inc.; that defendants made an agreement with the Lawrence Warehouse Company, of Chicago, to bottle whiskey and deliver to defendants' licensees, C.O.D. and to deduct its charges and distribute the balance to persons designated by defendants; that defendants formed K. G. Freight Lines, Inc., and induced persons to be defrauded to exchange warehouse receipts for stock in this company; that defendants secured names of the holders of whiskey warehouse receipts, such holders having purchased them from the Penfield Company; that the defendants called upon these holders and represented that they had a plan whereby they could get back the money for the original investor in original whiskey warehouse receipts; that defendants represented:

(a) That defendants had a plan whereby said holders of whiskey warehouse receipts would be able to get their money back;

(b) That under this plan defendants would sell to their customers in Chicago the whiskey represented by the warehouse receipts;

(c) That in order to carry out said plan these persons must turn over their receipts to defendants;

(d) That receipt holders would be paid $53.00 per barrel;

(e) That defendants had made an agreement with the Lawrence Warehouse Company, under the terms of which it would bottle whiskey represented by the receipts, deliver the bottled goods to defendants' customers, collect the amount due, deduct its expenses and then remit direct to the former holders of the warehouse receipts the full amount due.

It is then alleged that defendants represented they had acquired a profitable interstate trucking business operating under the name of K. G. Freight Lines, Inc.; that the stock was worth $20.00 a share and would increase to $25.00 a share within a year; that defendants would establish a terminal in Dayton, Ohio; that K. G. Freight Lines, Inc. owned valuable franchises and had sufficient income to pay dividends; that whiskey warehouse receipts could not be sold so that a profit could be realized, but that if the holders would turn them over to defendants in exchange for K. G. Freight ...


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