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United States v. Bitter

February 6, 1967

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
HARVEY R. BITTER, DEFENDANT-APPELLANT



Schnackenberg, Knoch and Fairchild, Circuit Judges. Schnackenberg, Circuit Judge (dissenting).

Author: Fairchild

FAIRCHILD, Circuit Judge.

Defendant Harvey R. Bitter was convicted, after trial before the court without a jury, on seven counts charging use of the mails to execute a scheme to defraud.*fn1 He has appealed, claiming (1) that the evidence was insufficient to establish guilt beyond a reasonable doubt, (2) that the court erroneously refused to consider certain evidence, (3) that the court erroneously denied an inspection of grand jury minutes, and (4) appellant was deprived of assistance of counsel.

Bitter is a real estate broker and business opportunity broker. He carries on substantial business activity at Milwaukee. The indictment contained 18 counts, each relating to a transaction between Bitter and the owner or owners of a different business. Each count charged him with mailing a letter to the owner for the purpose of executing a scheme to defraud, which was alleged in the same terms in all counts. In essence, the pattern of the scheme was described as follows: Bitter would write to the owners of a business, after obtaining the names from newspaper advertisements, would solicit the owners to employ him to advertise the business and obtain a buyer. He would induce the sellers to make an advance payment of selling fee, but would not perform the services promised, and would not advertise the business as represented, and would refuse to make refunds. He would falsely represent that the business would be advertised in various newspapers whereas he knew that few if any advertisements would be run; that the business was sure to be sold as a result of his services; that the business would sell for a much higher figure than the seller's proposed price; that if the business was not sold within a certain time, the money would be refunded; that he already had a buyer; that he and his salesmen would take an active part in making the sale.

One count was dismissed on motion of the government because the owner was unable to appear. Ten counts were dismissed because the court deemed they had not been proved beyond a reasonable doubt.

The seven counts on which the court found defendant guilty may be summarized as follows:

Count 8. Mr. and Mrs. Ebelt had a sheet metal and plumbing business at Cascade, Wisconsin. After advertising their business for sale, they received letters from Bitter, one of which represented he had an interested buyer. They came to see Bitter in Milwaukee and signed an agency agreement. They wanted $25,000, but Bitter said it should be $30,000. They paid him $250 as requested. Bitter said very positively the business would be sold and they would get their money back at that time. Bitter telephoned once and made an appointment to show the business, but no one came. They never saw Bitter again, nor any salesmen nor prospects.

Count 10. Carrol Fraundorf had a furnace-cleaning business at Hartford, Wisconsin. Bitter told him he would have to pay $150 to start with, and Bitter's salesmen would work on the sale. Fraundorf paid, and signed an agency agreement, but no salesmen nor prospects ever came.

Count 12. Leo Gremminger was a butcher at Campbellsport, Wisconsin. After advertising his business, he received letters from Bitter, saying that Bitter knew of his business and could make an immediate sale of it. He came to see Bitter, who said Bitter had buyers. He signed an agency agreement and paid $300. He never saw Mr. Bitter again, nor any salesmen from Bitter's office, nor any prospects.

Count 15. Ervin Leichtle had a bowling alley and soda fountain at Rio, Wisconsin. After advertising his business, he received a letter from Bitter telling him to come in. Bitter told him he had people who were looking for a business like that. Leichtle signed an agreement and paid a fee of $300. Bitter made an appointment to show the business, but no one appeared. No one ever came from Bitter's office. Bitter explained that the $300 was to pay for Bitter's trouble if Leichtle should refuse to sell to a buyer produced by Bitter.

Count 16. Mr. and Mrs. Schaefer had a small shoe store at Columbus, Wisconsin. Shortly after they advertised their business, they received letters from Mr. Bitter, the second indicating Bitter had a buyer who was very much interested in their type of business. They came to see Bitter and signed an agency agreement. They paid $250. Bitter said this was to cover considerable advertising. They never again saw Mr. Bitter, nor any of his salesmen, nor any prospects.

Count 17. Mrs. Fae Weber had an upholstery and drapery shop at Pewaukee, Wisconsin. After advertising her business for sale she received a letter from Bitter, and came for an interview. Bitter assured her he could sell it and would use the $150 deposit he demanded to take care of costs of advertising. She signed and paid. She never again saw Mr. Bitter nor any salesmen, any prospects, nor any advertisements. She wanted $12,000. He added $5,000 for his commission, so that the selling price agreed on was to be $17,000.

Count 18. Harvey Wellnitz had a store at Gillett, Wisconsin. After advertising it for sale, he had letters from Bitter, as a result of which he came to see Bitter at Milwaukee. Bitter said he had cash buyers, one right then in mind. Wellnitz signed an agreement and paid $250. He never saw Mr. Bitter again, nor any salesmen, nor any prospects. He did receive letters, ...


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