128 F. 615 (S.D.N.Y. 1904), United States v. Cohn

Citation:128 F. 615
Party Name:UNITED STATES v. COHN et al.
Case Date:March 09, 1904
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

Page 615

128 F. 615 (S.D.N.Y. 1904)



COHN et al.

United States Circuit Court, S.D. New York.

March 9, 1904

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Henry L. Burnett, U.S. Atty., and W. Wickham Smith, Sp. Asst. U.S. Atty. Gen.

A. J. Dittenhoefer and Frank H. Platt, for Cohn.

De Lancey Nicoll, John D. Lindsay, and Judson G. Wells, for Browne.

Henry L. Burnett, U.S. Atty., and W. Wickham Smith, Sp. Asst. U.S. Atty. Gen.

THOMAS, District Judge.

The indictment charges that 'on and before the 30th day of July, 1901, ' Rosenthal, Cohn, Browne, and others to the jurors unknown, conspired to defraud the United States of duties that should be paid upon goods imported from foreign countries by Abraham S. Rosenthal and Martin L. Cohn, and that such conspiracy was to be effected by Rosenthal and Cohn causing the goods to be shipped from foreign countries, consigned to A. S. Rosenthal & Co., at the port of New York, upon consular invoices containing, and known to them to contain, false statements as to weight; and that they should make their written estimated entries at the custom house at the port of New York upon such invoices, whereupon Browne, the examiner in the appraiser's department, should neglect and refuse to ascertain the true weight and nature of such part of the said goods as should be designated and sent to the public stores for examination, and should knowingly make false returns and reports upon the invoices as to the weight and nature of the goods, to the end that the estimated entries and the duties upon the same should be liquidated by the collector upon such returns and reports, and less than the amounts of duty legally due thereon collected. The indictment charged five overt acts, three of which were entries made by Rosenthal and Cohn, and two of which were the passing of goods by Browne in the manner charged.

After numerous motions, demurrers, and pleas not involving the merits, the action was brought to trial on January 22d, pursuant to an order of the court made at a previous term, and, upon Rosenthal failing to appear, the trial was severed as to him, and the jury impaneled as to the other defendants. Some 4 1/2 days were taken in the selection of a jury, and thereupon the trial continued to February 20th, when the jury rendered a verdict that Cohn and Browne were each guilty, and strongly recommended the former to the mercy of the court. Each defendant moved for a new trial, and after full discussion and consideration of the carefully prepared briefs of the parties it is concluded that a new trial should be granted to Cohn and denied to Browne. The evidence amply justified the finding of the jury that some persons, in behalf of A. S. Rosenthal & Co., for several months after about January 1, 1901, were importing goods and entering them

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at this port upon false, invoices, for the purpose of defrauding the government. Indeed, the evidence, marshaled with admirable painstaking and skill, and lucidly presented upon the trial by the government, amounted to a demonstration that could have left no properly equipped mind unconvinced that there was a fraudulent scheme formed by some persons. Had there been a single invoice showing a mere discrepancy between the weights as actually ascertained and as invoiced, the government might not accuse the importation as fraudulent; but the multiplicity of fraudulent invoices, showing repeated and startling discrepancies between the stated and actual weight of the goods must have swept irresistibly the minds of the jurors to the conclusion that fraudulent practices for the purpose of defrauding the government were on foot, and that several persons connected with A. S. Rosenthal & Co. at this and foreign ports were involved. Indeed, specific written evidence was given that some person in New York, co-operating with A. S. Rosenthal & Co.'s agent at Lyons, arranged with Coles & Son, of London, that the latter should pack silks made in China, 200 pieces in a case, and, marking them 'Made in Japan,' deliver them for shipment to Pickford, forwarder at London, and that A. S. Rosenthal & Co.'s agents at Lyons should attend to the consulation. Such goods should have been invoiced and consulated at London, but it was contrived that the goods should be consulated at Lyons, France, upon invoices showing purchase of Godchaux & Co., of that place, of 50 pieces in case, of a weight largely below the actual weight, and at a price much less than the price actually paid; and so it was done. The goods were consulated at Lyons on or about March 18th, the entry blank was signed by Cohn and the entry thereupon made in New York on March 28th, and one case was examined and passed as correct by Browne on April 2d. Under this arrangement three other shipments of goods purchased of Coles & Son, upon invoices severally dated April 1st and 4th and May 11th, all showing similar frauds, were made, and upon due arrival at this port the goods were entered, Rosenthal in each instance signing and declaring upon the entries; but none of the last three shipments of fraudulent importations from London chanced to be sent to the public stores, nor did Browne examine them. The transactions connected with the purchases from Coles & Son, standing alone, unequivocally declare that some persons, in the interest of A. S. Rosenthal & Co., arranged a criminal scheme to defraud the government, and imported goods under and pursuant thereto, thereby depriving, on four shipments, the government of between $6,000 and $7,000. While the evidence of this fraudulent practice on the part of some persons has this irresistible probative force, yet the evidence disclosed the personnel of the guilty actors with varying degrees of persuasiveness. That certain persons, either holding the relation of partner or agent to the firm of A. S. Rosenthal & Co., were such guilty actors, admits of no doubt whatever. As to the defendants Cohn and Browne, a just statement is that the evidence does not warrant a conclusion, within the rule of reasonable doubt, that Cohn was a guilty actor in the fraudulent undertaking, while there is sufficient evidence to justify the finding of the jury that Browne, beyond a reasonable doubt, was involved in the arrangement

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to commit the fraud. It may be that the evidence of Browne's guilt is not so irresistible as is the evidence that the fraudulent scheme existed, yet the evidence against Browne is sufficient to justify the verdict that he, without whom the conspiracy would be hopelessly ineffective, was a member of it. Browne, observing a right that belonged to him, was not a witness in his own behalf, and the state of the evidence was such that the jury was justified in finding that his acts and omissions, further unexplained, were inconsistent with his innocence, and were only compatible with the conclusion that he had betrayed the trust reposed in him as an examiner, for the purpose of aiding the conspiracy. It does not appear that there was error in the impaneling of the jury, in the admission or rejection of evidence, or in the charge of the court, demanding that a new trial should be granted.

It remains to point out with some particularity the reasons for the decision that the evidence concerning Cohn was insufficient to justify the verdict of guilty rendered against him. It is a delicate judicial function to supervise, and, if need be, set aside, the finding of a jury of such marked excellence in intelligence and unabated attention as the jurors in the case possessed and observed. But not even a proper concern for governmental interests, or the public welfare, or for a sturdy enforcement of the law, warrants the maintenance of a verdict that is unsupported by sufficient evidence of guilty connection with the crime charged. It is not a mere connection with the business of the importing firm involved, nor relation to some acts that the law required to be done in the course of passing goods through the custom house, that is demanded. Such connection must exist, and such relation of some person representing the importers in due course of business must arise, even if the importations were legitimate. It must inevitably appear that such connection was used, or such relation assumed, for the purpose of subserving the conspiracy.

What was Cohn's connection with the business of A. S. Rosenthal & Co., and with the transactions upon which the charge is predicated? What was the firm of A. S. Rosenthal & Co.? Who were the partners? What was and what had been Cohn's relations to the firm? What did he specifically do respecting the fraudulent invoices? What opportunity did he have to know of the same? What presumption of knowledge of the nature of such invoices existed, from which the jury could draw inferences unfavorable to him? The firm of A. S. Rosenthal & Co. was established in business in New York at some time before the year 1892, and was engaged in the purchase and sale of Japanese silks, handkerchiefs, lambrequins, table covers, and taffetas. The firm's name was changed in 1898 to that of A. S. Rosenthal & Freed, the latter having been for some years a partner. Cohn, who had previously been engaged in business in the far West as salesman for different houses located there, came to New York in 1892, and after a time was employed by A. S. Rosenthal & Co. to sell goods in the city of New York. After two years he added to his duties of salesman the further care of creating or devising the styles or patterns of goods that should at times be showing in goods manufactured for the firm or purchased by it. For the first year he received a salary

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of $6,000; for the second year he received a salary of $7,500; for the third year he received 6 1/4 per cent. of the profits, with a guaranty of $7,500, which in 1898 was increased to 15 per cent. of the profits, with a guaranty of...

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