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UNITED STATES v. BEIN

January 5, 1982

UNITED STATES OF AMERICA, PLAINTIFF,
v.
CALVIN BEIN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Shadur, District Judge.

MEMORANDUM OPINION AND ORDER

Three of the defendants (Calvin Bein, "Bein"; Thomas DeAngelis, "DeAngelis"; and Al Vitti, "Vitti") in this seven-defendant, 20-count criminal proceeding have moved under Fed.R.Crim.P. ("Rule") 21(b) for transfer to the Southern District of New York. For the reasons stated in this memorandum opinion and order, their respective motions are granted.*fn1

Facts*fn2

From September 1979 to March 1980 Bein was President, DeAngelis Treasurer and Vitti one of the sales managers of E-K Capital Corporation ("EKCC"). EKCC was engaged in the sale of illegal commodity option contracts characterized by defendants as "Deferred Delivery Contracts." Defendants falsely represented EKCC to be a well-established reliable company dealing in actual physical precious metals and in precious metals contracts.

At the heart of the scheme was the false representation to prospective customers:

  that by paying a certain fee to EKCC they could
  purchase "deferred delivery contracts," which
  would give them "control" of a specified quantity
  of metal for a specified period of time, at a
  specific price, called the "strike price;" that
  the strike price would be determined by the
  market price of the metal at the time EKCC
  received the customer's funds; and that if during
  the life of the contract the price of the metal
  rose above the strike price the client could
  either purchase the metal at the strike price or
  receive his profit from EKCC after EKCC
  "liquidated" the contract. . . .

Instead defendants employed a number of fraudulent means to avoid returning the contract profits to customers as to whom the market price of the metals had in fact advanced during the contract term. Defendants diverted the funds to their own use and benefit and for other purposes.

In the course of their activities defendants caused interstate wire communications to be transmitted (the wire transfer of customer funds). Bein and DeAngelis also executed commodity option transactions (prohibited by the Commodities Exchange Act).

Considerations Relevant Under Rule 21(b)

Rule 21(b) speaks in terms identical to those employed by its civil counterpart, 28 U.S.C. § 1404(a): Transfer may be made "for the convenience of parties and witnesses, and in the interest of justice." However the expression of the relevant considerations under Rule 21(b) has been somewhat different:

(1) location of defendant,

(2) location of possible witnesses,

(3) location of events likely to be in issue,

    (4) location of documents and records likely to
  be involved,
    (5) possible disruption of defendant's business
  if the proceeding is not transferred,

(6) expense to the parties,

(7) location of counsel,

    (8) relative accessibility of the place of
  trial, and

(9) docket conditions of each district.

Any other "special elements" can be considered ...


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