394 F.2d 182 (4th Cir. 1968), 9412, United States v. Grow
|Citation:||394 F.2d 182|
|Party Name:||UNITED STATES of America, Appellee, v. D. Spencer GROW and C. Oran Mensik, Appellants.|
|Case Date:||March 18, 1968|
|Court:||United States Courts of Appeals, Court of Appeals for the Fourth Circuit|
[Copyrighted Material Omitted]
E. Tillman Stirling, Washington, D.C. (Edward P. Morgan and Welch, Mott & Morgan, Washington, D.C., on brief), for appellant D. Spencer Grow.
Kinsey T. James, Peoria, Ill. (Joseph S. Bambacus, Richmond, Va., and Anna R. Lavin, Chicago. Ill., on brief), for appellant C. Oran Mensik.
Thomas P. Curran, Attorney, Department of Justice (C. Vernon Spratley, Jr., and Thomas J. Kenney, U.S. Attys., and Benjamin R. Civiletti, Sp. Asst. U.S. Atty., on brief), for appellee.
Before HAYNSWORTH, BOREMAN and J. SPENCER BELL, [*] Circuit Judges.
BOREMAN, Circuit Judge:
D. Spencer Grow and C. Oran Mensik, defendants below and appellants here, were indicted on February 19, 1963, in the United States District Court for the District of Maryland together with Charles F. Culver, A. Gordon Boone, J.
Thomas Ellicott and Henry McGurren. The nine-count indictment 1 charged them with devising a scheme to defraud and using the United States mails in furtherance of the scheme in violation of [ ] §§ 2 2 and 13413 of Title 18, United States Code. On September 23, 1963, Culver tendered and the court accepted a plea of nolo contendere; Boone and Ellicott were to be tried separately.
Various motions were heard on several separate days in September and October 1963. Pre-trial motions, including motions to suppress certain evidence, were denied by the court in a formal opinion. 4
Starting to trial in Baltimore, Maryland, on October 11, 1963, eight days were consumed in selecting twelve jurors and two alternates. Motions filed on behalf of Grow, Mensik and McGurren for a transfer, previously argued and denied, were renewed and granted because of an apparent prejudice prevailing in the District of Maryland. The Maryland jurors thus selected were excused. The case was then transferred to Richmond, Virginia, for trial and, as to Grow, Mensik and McGurren, the trial proceedings commenced before a jury on November 4, 1963. The voir dire examination and selection of the jury had required three days. Honorable Roszel C. Thomsen, Chief Judge of the United States District Court for the District of Maryland, had been designated as the trial judge by the Honorable Simon E. Sobeloff, then the Chief Judge of this court.
At the close of the Government's case the judge granted McGurren's motion for judgment of acquittal. Similar motions by Grow and Mensik were denied and these defendants elected not to testify in their own defense. The court did, however, direct the jury to return a verdict of acquittal as to Grow and Mensik on that portion of Count 1 which charged the defendants with using the United States mails for mailing a certain letter on October 28, 1959, and on Count 2, the case going to the jury on the remaining counts. The jury found Grow guilty on Counts 3 and 8 and Mensik guilty on counts 6, 7 and 8. Motions for judgments n.o.v. or in the alternative for new trials were denied and sentences of fines and imprisonment were imposed.
Each of the appellants challenges the sufficiency of the evidence to sustain his conviction. The facts, circumstances and transactions concerning which evidence was introduced are many and varied and to state them in detail would require volumes. We shall undertake to outline as briefly as possible those which the prosecution contends are sufficient, when viewed in the light most favorable to the Government of prove the guilt of Grow and Mensik beyond a reasonable doubt.
In 1957 C. Oran Mensik, a Chicago savings and loan company operator, was president and chairman of the board of City Savings and Loan Association and a majority stockholder in 1st Guaranty Savings and Loan Association of Chicago. Late in the year 1957 he established in Maryland the Commercial Savings and Loan Association, and it was set up at Mensik's direction by Robert Suchman who was a savings teller in a Chicago savings and loan association. Mensik dominated and controlled Commercial's activities including those with respect to employees, advertising, investments and dividends. The guaranteed stock in Commercial was held by the Dollar Investment Co. of Chicago which Mensik dominated and whose nominal president was Robert Kramer, Mensik's brother-in-law.
In 1958 D. Spencer Grow was president of the Utah Savings and Loan Association and controlled Western Land Corporation, both of Utah, and was president of and owned the capital stock of Prudential Savings and Loan Association and Idaho Savings and Loan Association, both of Idaho. In April of 1959 Grow established his first savings and loan association in Maryland. He directed Harold Applegarth, of Baltimore, who was familiar with organizing and chartering savings and loan associations, to set up the First Fidelity Savings and Loan Association. Grow owned and controlled it and Applegarth became its president.
International Guaranty and Insurance Co., Tangier, Morocco, purported to insure depositors' savings accounts in Grow's Utah Savings and Loan Association and Mensik's Commercial Savings and Loan Association. The Insurance Commissioner of Utah, Carl Hulbert, advised Grow in the fall of 1958, in effect, that the funds of International Guaranty and Insurance Co. had been seized in California, that the Utah Insurance Department considered any insurance issued by that company as worthless and that Grow should cease advertising that the deposit accounts in Utah Savings and Loan Association were insured.
This information obviously reached Mensik and in late 1958 he sent Robert Suchman and Henry McGurren, the latter a Chicago attorney and former 'North American Counsel' for International Guaranty and Insurance Co., to Salt Lake City, Utah, to meet with Grow and organize an insurance company to be used instead of International Guaranty. Financial Guaranty and Insurance Co., Tangier, Morocco, was formed and Grow and his close associates comprised its 'Western Advisory Board.' McGurren became its 'North American counsel.'
In January of 1959 Grow summoned Harold Applegarth to Chicago. Applegarth met with Grow, Mensik and McGurren. Grow informed Applegarth of his problems with the Utah Insurance Commissioner; Mensik informed Applegarth of his problems in Chicago and Maryland (Mensik and Commercial had been indicted for mail fraud). Mensik and Grow employed Applegarth and instructed him to procure old savings and loan association charters and convert them into new savings and loan associations. Applegarth was told that, if savings and loan associations were to be successful in obtaining deposits, insurance was helpful, if not absolutely necessary, and there would be no difficulty in getting insurance.
Applegarth acquired old Maryland charters in Baltimore and, at Mensik's instruction, converted them into two new associations. The first was intended to be Mensik's but as a courtesy he allowed Grow to acquire it and this was First Fidelity Savings and Loan Association. The guaranteed stock was held in Applegarth's neme as nominee for Grow or Western Land Corporation. The second new association became Maryland Thrift Savings and Loan Association whose guaranteed stock was held in the name of Dollar Investment Co. for Mensik.
This pattern of acquisition of savings and loan associations and concealed ownership by either Grow or Mensik was later
repeated in First Guarantee Savings and Loan Association, Maryland District Savings and Loan Association, first Financial Savings and Loan Association, First General Savings and Loan Association and Maryland Financial Savings and Loan Association.
On the day of its opening, March 24, 1959, First Fidelity Savings and Loan Association promptly acquired insurance for savings accounts from Financial Guaranty and Insurance Co. through McGurren, and Grow sent advertising material which had been prepared through Pace Advertising in Provo, Utah, to Applegarth in Baltimore for a mailing campaign which was to begin on April 6, 1959. Grow's Utah Savings and Loan Association and Mensik's Commercial Savings and Loan Association acquired insurance coverage from Financial Guaranty and Insurance Co.; Suchman sent a $24,000 premium to McGurren. However, Utah Insurance Commissioner Hulbert would not approve Financial Guaranty and Insurance Co. as an insurer on its name alone and requested Grow to furnish information on Financial's background, officers, directors and stockholders. Hulbert warned Grow that a public hearing might be necessary. Following his initial request in early April 1959, Commissioner Hulbert twice more asked for supporting information on Financial Guaranty and Insurance Co. and on June 4, 1959, advised Grow that if he did not get the requested information he would issue a cease and desist order against Financial and publicize that it was not authorized to do business in Utah. Hulbert further advised Grow that for an insurance carrier to be acceptable to him, under Utah law, it must be a domestic company which could meet certain capital-surplus requirements and with $400,000 in U.S. Government or approved bonds on deposit with officials of one or more states for the availability of general creditors in case of company insolvency. Hulbert had directed Grow to cease advertising in Utah that Utah Savings and Loan Association's accounts were insured and Grow had complied. The evidence clearly supports the inferences that the persistent request for information on Financial Guaranty and Insurance Co. and the possible consequences of public hearings concerning Utah Savings and Loan...
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