United States v. Cohn

• Decision Date: 01 March 1926
• Docket Number: No. 130,130
• Parties: UNITED STATES v. COHN
• Court: U.S. Supreme Court

270 U.S. 339

46 S.Ct. 251

70 L.Ed. 616

UNITED STATES

v COHN.

No. 130.

Submitted Jan. 13, 1926.

Decided March 1, 1926.

Messrs. Solicitor General Mitchell and Assistant Attorney General Donovan, for the United States.

[Argument of Counsel from pages 339-341 intentionally omitted] Messrs. Bernhardt Frank and Benjamin P. Epstein, both of Chicago, Ill., for defendant in error.

Mr. Justice SANFORD delivered the opinion of the Court.

Cohn, the defendant in error, was indicted in the District Court for a violation of section 35 of the Penal Code, as amended by the Act of October 23, 1918, c. 194, 40 Stat. 1015 (Comp. St. Ann. Supp. 1919, § 10199). This entire section is set forth in the margin.¹

The indictment was dismissed, on demurrer, upon the ground that the statute did not make the matters charged a crime against the United States.² This writ of error was then allowed by the District Judge under the provision of the Criminal Appeals Act,³ permitting the United States a direct writ of error from a judgment sustaining a demurrer to an indictment, based upon the construction of the statute upon which the indictment is founded. United States v. Patten, 33 S. Ct. 141, 226 U. S. 525, 535, 57 L. Ed. 333, 44 L. R. A. (N. S.) 325.

The statute provides, inter alia, that: Whoever 'for the purpose of obtaining or aiding to obtain the payment or approval of' any 'claim upon or against the government of the United States, or any department or officer thereof, or any corporation in which the United States of America is a stockholder,' or 'for the purpose and with the intent of cheating and swindling or defrauding the Government of the United States, or any department thereof,' or any such corporation, 'shall knowingly and willfully falsify or conceal or cover up by any trick, scheme, or device a material fact, or make or cause to be made any false or fraudulent statements or representations, or make or use or cause to be made or used any false bill, receipt, voucher,' etc., shall be punishable by fine or imprisonment, or both.

The indictment charged that Cohn, for the purpose of obtaining the approval of a claim against the Government and the Treasury Department to the possession of imported merchandise, and for the purpose and with the intent of defrauding the Government and the Treasury Department through a perversion and obstruction of the customhouse function and of the proper and orderly administration of the laws of the United States and the regulations of the Department, had concealed and covered up material facts by a trick, scheme or device, and had knowingly caused false and fraudulent statements to be made, as follows:

In October, 1920, a certain lot of cigars arrived at Chicago from the Philippine Islands for entry at the customhouse, and came into the possession of the col- lector of customs. They were consigned to order 'notify Cohn Bros. Cigar Co.,' the name under which Cohn conducted his business. The next day a Chicago Bank received from a Philippine Bank a bill of lading covering the cigars, indorsed in blank by the consignor, with an attached draft drawn by the conignor upon the Cigar Co., and instructions to deliver the bill of lading only upon payment of the draft. Two days later, the draft not having been paid, Cohn, knowing these facts, fraudulently procured certain customhouse brokers to make entry of the cigars and obtain possession of them from the collector by giving a bond for the production of the bill of lading. The possession of the cigars was thus secured by Cohn upon false and fraudulent statements and representations made by him to the brokers, and through them, as his innocent agents, to the collector, that the bill of lading had not arrived in Chicago and that he was entitled to the entry and possession of the cigars, and the fraudulent concealment by him from the brokers and the collector of the material facts that the bill of lading and attached draft had arrived in Chicago, with the condition stated, and that the draft had not then been paid; thereby inducing the collector to deliver the possession of the cigars, when he 'would and should have refused so to do' if he had known these facts and that Cohn consequently had no right to make the entry or obtain possession of the cigars.

While the cigars were admissible into the United States free of duty, the Customs Regulations nevertheless required that they should be entered at the customhouse, Arts. 192, 215. The Regulations also provided that a bill of lading was necessary to establish the right to make the entry, Art. 219; that merchandise consigned to order should be deemed the property of the holder of a bill of lading indorsed by the consignor, Art. 219;⁴ that such holder might make the entry, Art. 220; and, further, that the collector might in his discretion permit entry to be made without the production of the bill of lading, on a bond conditioned for its subsequent production and indemnifying him against any loss or damage which might be sustained by reason of such permission. Customs Regulations of 1915, pp. 126, 138, 140.

We may assume, without deciding, that under these Regulations Cohn was not entitled to enter and obtain possession of the cigars until he had paid the draft and become the holder of the bill of lading. But even so, the acts by which the possession of the cigars were obtained did not constitute an offense against the United States unless done for one or other of the purposes entering into the statutory definition of the offense and charged in the indictment, that is, either for the purpose of obtaining the approval of a 'claim upon or against' the Government or for the purpose of 'defrauding' the Government. It is contended by the United States that, although the cigars...