Fineberg v. United States, 21286.

• Decision Date: 05 April 1968
• Docket Number: No. 21286.,21286.
• Parties: Jack FINEBERG, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

393 F.2d 417 (1968)

Jack FINEBERG, Appellant, v. UNITED STATES of America, Appellee.

No. 21286.

United States Court of Appeals Ninth Circuit.

April 5, 1968.

Burton Marks, of Marks & Schneider, Beverly Hills, Cal., for appellant.

William Matthew Byrne, Jr., U. S. Atty., Robert L. Brosio, Asst. U. S. Atty., Chief, Criminal Division, Stephen D. Miller, Asst. U. S. Atty., Assistant Chief, Special, Prosecutions Division, Los Angeles, Cal., for appellee.

Before CHAMBERS and MERRILL, Circuit Judges, and PLUMMER, District Judge.

PLUMMER, District Judge:

Appellant was convicted by a jury of mail fraud, using a fictitious name to defraud, and wire fraud, in violation of 18 U.S.C.A. §§ 1341, 1342 and 1343. A timely appeal was taken to this court which has jurisdiction under 28 U.S.C.A. §§ 1291, 1294.

The evidence on which appellant was convicted established a series of transactions involving the purchase and resale of phonograph records extending from about June of 1963 to about August 24, 1964. In the course of these transactions, a number of wholesale record distributing companies were defrauded of substantial sums of money.

In furtherance of the scheme devised by appellant, he formed a corporation. Nelson Bureau of Employment, doing business as Merco Sales, to operate the business; placed orders with various wholesale record distributing companies; lulled the companies into a false sense of security by misrepresentations, and by making partial payment; and issued post-dated checks which were not honored when presented for payment, or on which payment was stopped. The scheme was accomplished by appellant through the use of United States mails, a fictitious name, and interstate telephone.

The purpose of appellant's scheme was to obtain large shipments of records from the companies with the intention not to pay for them in full. To prove an intent to defraud, the Government presented evidence which established that the records ordered were sold by appellant below his cost price.

The crimes charged in the indictment required a scheme to defraud. The scheme to defraud necessarily included the intent to do so. It was essential that the Government prove beyond a reasonable doubt that appellant acted with the specific intent to execute or carry out the scheme to defraud as charged in the indictment. To prove intent, the Government presented evidence of similar operations and activities conducted by the appellant in Albuquerque, New Mexico between April and August of 1962.

Appellant made timely objection to this evidence on the grounds (1) that there was a fatal difference between the Albuquerque scheme and the Los Angeles scheme in that appellant in his Albuquerque operation did not buy records at one price and sell them below cost price as he did in Los Angeles, and (2) that certain documents pertaining to the sale of records were hearsay, irrelevant, and were not shown to have been sent through the United States mails.

The Albuquerque operation ended in August of 1962 when appellant and his partner suddenly decamped leaving no money or assets with which to pay creditors. In June of 1963, some nine months later, appellant and his associates commenced operations in Los Angeles. The two operations were reasonably related in point of time. The scheme devised by appellant in Albuquerque, with trivial or immaterial differences, was substantially similar to the scheme devised by him in Los Angeles.

Appellant claims that the scheme carried out in Albuquerque was different from the one followed by him in Los Angeles because in the Los Angeles operation records were sold below cost causing the company to go into involuntary bankruptcy, which resulted in creditors being defrauded, whereas in Albuquerque, pursuing a substantially similar scheme, the evidence did not show the price at which the records were sold but established that appellant and his partner left town with the assets and money of the company, and thereby accomplished the same result.

This claim is without merit. Whether creditors were actually defrauded in Albuquerque or in Los Angeles is totally immaterial. In a prosecution of this type, the Government is not required to prove that anyone was defrauded or that anyone sustained a loss. Farrell v. United States, 321 F.2d 409, 419 (9th Cir. 1963); Bobbroff v. United States, 202 F.2d 389 (9th Cir. 1963); United States v. Andreadis, 366 F.2d 423, 431 (2d Cir. 1966).

When a defendant is put on trial for one offense, evidence of a distinct offense unconnected with that charged in the indictment is not admissible. Exceptions to this rule are so numerous that it is difficult to determine which is the more extensive, the doctrine or the acknowledged exceptions. Davis v. United States, 370 F.2d 310 (9th Cir. 1966).

Among the exceptions recognized by this court is one which permits evidence of wrongful acts where such evidence bears on criminal intent. Davis v. United States, supra, and cases cited therein; Stewart v. United States, 311 F.2d 109, 112 (9th Cir. 1962); Fernandez v. United States, 329 F.2d 899, 908 (9th Cir. 1964); Reid v. United States, 334 F.2d 915, 918 (9th Cir. 1964); Head v. United States, 346 F.2d 194, 197 (9th Cir. 1965); Reed v. United States, 364 F.2d 630, 633 (9th Cir. 1966); Hernandez v. United States, 370 F.2d 171, 173 (9th Cir. 1966); Chandler v. United States, 378 F.2d 906, 908 (9th Cir. 1967); Amsler v. United States, 381 F.2d 37, 52 (9th Cir. 1967).

In federal courts, trial judges have a measure of discretion in allowing testimony which discloses the purpose, knowledge or intent of a particular person. Glasser v. United States, 315 U.S. 60, 81, 62 S.Ct. 457, 86 L.Ed. 680 (1942); Hernandez v. United States, supra.

The testimony was unquestionably relevant on the issue of intent. Its importance to the Government outweighs by far any possible prejudice to the defendant. Gilbert v. United States, 366 F.2d 923, 951 (9th Cir. 1966); Fernandez v. United States, supra.

The court in its instruction properly limited the jury's consideration of the evidence to the issue of appellant's intent. The jury is presumed to have understood and followed the court's instructions and to have given proper weight to this evidence. Robison v. United States, 379 F.2d 338, 345 (9th Cir. 1967); Donaldson v. United States, 248 F.2d 364, 365 (9th Cir. 1957). In doing so, it must be presumed that the jury conscientiously observed the limiting instructions given by the court. Shotwell Mfg. Co. v. United States, 371 U.S. 341, 367, 83 S.Ct. 448, 9 L.Ed.2d 357 (1963).

It was not error to admit this evidence on the issue of intent.

Appellant also claims that the records of Nelson Bureau of Employment, doing business as Merco Sales, were illegally obtained from him and were used by the Government in violation of his rights under the Fourth and Fifth Amendments to the Constitution of the United States.

Appellant was subpoenaed to appear before the grand jury on February 25, 1965, and was directed to bring these records with him. He refused to do so. Thereafter, he was told on several occasions by the United States Attorney he would be held in contempt of court, put in jail and investigated by the Federal Bureau of Investigation if he continued in his refusal. On March 10, 1965, upon the advice of his attorney and under threat of being sent to jail, the records were produced.

Nelson Employment Bureau, a corporation, could not claim a privilege of self-incrimination with reference to the corporate books and records. Hale v. Henkel, 201...