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United States v. Castor

July 8, 1977


Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division No. IP 76-79 CR - William E. Steckler, Judge.

Castle, Senior Circuit Judge, Sprecher and Bauer, Circuit Judges.

Author: Bauer

BAUER, Circuit Judge.

The Government appeals, pursuant to 18 U.S.C. § 3731, the district court's dismissal of a mail fraud indictment returned against the defendants. The issues for our decision are whether the indictment alleges a fraudulent scheme within the scope of the mail fraud statute, 18 U.S.C. § 1341, and whether the indictment alleges mailings in furtherance of the alleged scheme. We hold that the indictment charges both elements of the offense and reverse the dismissal.


The indictment charges the defendants with fourteen substantive counts of mail fraud and one count of conspiracy to commit mail fraud in connection with a fraudulent scheme to procure a number of newly available permits to operate retail package liquor stores.

The details of the alleged scheme are as follows: In 1972 forty-five new package liquor store permits became available in Indianapolis, Indiana as a result of an Indiana Court of Appeals ruling that, in applying the statutory limit of one permit for each 5,000 persons or fraction thereof, the population of the Consolidated City of Indianapolis, which includes Indianapolis and several surrounding communities, rather than the population residing within the old city limits, controls the number of permits to be issued. Indiana Alcoholic Beverage Commission v. Baker, 153 Ind. App. 118, 286 N.E.2d 174 (1972).

Approximately 120 applications were filed by persons seeking the new permits. The defendants are charged with fraudulently inducing the Indiana Alcoholic Beverage Commission (IABC) and the Marion County Local Board (MCLB) to issue permits to persons who did not intend to operate package liquor stores, and who, upon the issuance of the permits, transferred them to persons and entities of the defendants' choosing.

The indictment names twelve persons whom the defendants allegedly caused to sign and file with the IABC applications for permits, as well as other documents which concealed the defendants' interest in the applications.*fn1 Permits were issued to the twelve.

The indictment further states that, after the permits were issued, the defendants caused certain documents containing false representations to be filed with the IABC in order to receive permission to relocate nine of the approved stores. Included were sham leases and papers stating that the named applicants intended to operate liquor stores at the new premises.

The indictment goes on to allege that the defendants, using fraudulent methods and concealing their economic interest in the liquor store permits, induced the IABC to approve transfers of eleven of the permits to corporations under the defendants' control.

Finally, the indictment alleges that, after the transfer of the permits to the defendants' corporations, the defendants sought and received IABC approval to transfer the stock of the corporations to defendant James.

Each of the fourteen mail fraud counts sets forth a separate mailing that allegedly was in furtherance of the scheme. Count I charges a mailing from the IABC to George Rowles, one of the "fronts" who purportedly obtained permits for the defendants, notifying Rowles that the MCLB would hold a hearing on his application.

Counts II through VI charge the mailing of notices by the IABC to five of the "fronts" that the IABC had voted to issue them liquor permits.

Count VII charges the mailing by the IABC to F. Pen Cosby, an attorney retained by defendant Robinette to represent a number of applicants for package liquor store permits, of a list of persons whose permit applications were to be processed by the IABC and the MCLB.

Count VIII charges a later mailing by the IABC to Cosby of a list of persons who had been issued permits by the IABC.

Counts IX through XI, XIII, and XIV charge the mailing by the IABC of notices to five of the "fronts" that their applications were incomplete.

Count XII charges a mailing by the IABC to James Griffin regarding his intention to lease ...

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