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United States v. Freeman.

April 15, 1948

UNITED STATES
v.
FREEMAN.



Author: Evans

Before EVANS, MAJOR, and MINTON, Circuit Judges,

EVANS, Circuit Judge.

Appellant was convicted of the crime of using the mails in furtherance of a scheme to defraud, and duly sentenced on said conviction. He assigned numerous errors which he contends were committed on the trial, among which are (a) failure to dismiss the case at the end of the trial, for want of sufficient evidence to support a verdict of guilt; (b) the reception of inadmissible evidence; (c) the rejection of evidence which defendant offered; (d) errors in the charge of the court to the jury; (e) improper observation of Government counsel to the jury; (f) insufficiency of the indictment; (g) failure of the court to compel the prosecution to elect between the conspiracy charge in the indictment and the substantive crimes set forth in each of the other twenty-eight counts.

Defendant was sentenced on both the conspiracy and substantive charges to serve a term in the penitentiary. The sentences are all to run concurrently. The sentence on each of the substantive counts was five years and upon the conspiracy count was two years.

Lengthy briefs have been filed to sustain the foregoing assignments of error, some of which need not be given special or lengthy consideration.

Seriously and elaborately, counsel argue that the court should have compelled the prosecution to elect between the conspiracy count and the substantive offenses and to have dismissed the one not elected. Frankness compels us to say this contention is frivolous and not debatable. U.S. v. Momsen, 7 Cir., 115 F.2d 635; Ader v. U.S., 7 Cir., 284 F. 13; Heike v. U.S., 227 U.S. 131, 33 S. Ct. 226, 57 L. Ed. 450, Ann.Cas.1914C, 128. Nothing is better settled than that conspiracy is a crime separate from substantive crimes and may be prosecuted in connection with the latter. U.S. v. Momsen, supra; Heike v. U.S., supra; Ader v. U.S. supra.

The comment of the Conference of Senior Circuit Judges held in 1925, to which reference was made in the appellant's brief, was a warning to district attorneys against excessive or misuse of the conspiracy charge. It in no way sought to pass upon the validity of joinder in an indictment of a conspiracy charge with the substantive offense.

Nor did it in any way seek to disturb, nor could it unsettle, the existing law to the effect that the conspiracy crime is separate and distinct from the substantive offense. This warning has been so frequently cited in this court and passed upon by the court against the contention of appellant, that it would be inexcusable to discuss further the ruling or to make quotations from the various decisions.

The sufficiency of the evidence to support the conviction necessitates an extended consideration of the somewhat lengthy record, which consideration we have made. Concerning the veracity of the witnesses and the legitimate deductions from their testimony, we can only say we can not pass as intelligently on such issues as the trial judge or the jury. We are not permitted to do so. Our study must be, and is, directed to the evidence only to ascertain its sufficiency to justify the verdict of guilt. The fact that one defendant was acquitted and the jury was unable to agree as to the guilt or innocence of several others, while of passing interest, does not change the law which imposes on the jury the sole responsibility of determining the fact issue of guilt.

In fact, we might say in passing that the jury's action in finding one defendant guilty and being unable to agree as to the guilt of another, suggests the presence of a fair minded, deliberative body whose verdict as to the appellant's guilt is entitled to more weight than otherwise.

We are, however, not required, nor permitted, to weigh the seriousness of the jury's deliberation, nor its effort to do justice between defendant and the Government.

In passing it might be said that the defendants were of two groups; one consisted of the salesmen who participated in the alleged fraud, if any. These were the defendants over whose guilt the jury was unable to agree. Their alleged guilt was not comparable to, nor was it so seriously argued, as that of the appellant who was the originator and dynamic force behind the alleged scheme to defraud.

Our study was early directed to the alleged existence of a scheme to defraud and what that scheme was. The subjectmatter of said scheme was whiskey; its conversion from the barrel container state to bottle, the use of labels, its aging and the necessity for further aging and its sale to the public; the secret pocketing of profits on sale of warehouse receipts; and alleged misrepresentations concerning advisability of switching from aged to green whiskey. These were all parts of the alleged scheme to defraud. The company through which the operation was conducted was known as the Consolidated Associates, Inc. The corporation was organized in Illinois in December, 1939. Appellant was one of the incorporators and the director, who with one Garfield, was mainly responsible for its creation and later activities. Garfield was also indicted but died before the trial.

Consolidated Associates, Inc., dealt in whiskey warehouse receipts. Its agents sought individuals who possessed substantial amounts of whiskey in the barrel and obtained transfers of this whiskey through assignment of the warehouse receipt certificates and otherwise, and, under promise to the holder that Consolidated Associates, Inc., would bottle the same, or exchange it for other whiskey allegedly of older vintage or better grade and sell under a prominent label. ...


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