United States v. Sheehan

• Citation: 428 F.2d 67
• Decision Date: 12 October 1970
• Docket Number: No. 19559.,19559.
• Parties: UNITED STATES of America, Appellee, v. William Eugene SHEEHAN, Robert Lee Sheehan, Joseph Andrew Sheehan, Appellants, and LeRoy Junior Westberg.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

428 F.2d 67 (1970)

UNITED STATES of America, Appellee, v. William Eugene SHEEHAN, Robert Lee Sheehan, Joseph Andrew Sheehan, Appellants, and LeRoy Junior Westberg.

No. 19559.

United States Court of Appeals, Eighth Circuit.

June 8, 1970.

Rehearing Denied July 7, 1970.

Certiorari Denied October 12, 1970.

Patrick J. Foley, of Rerat, Crill, Foley & Boursier, Minneapolis, Minn., for appellants and filed supplemental brief. Original brief of appellants was filed by John Connolly, III, of Connolly, O'Malley & Conley, and Raymond Rosenberg, of Bellizzi, Rosenberg, Rosenberg & Strickler, Des Moines, Iowa, who were subsequently relieved of further obligation to appellants.

Allen L. Donielson, U. S. Atty., Des Moines, Iowa, for appellee; Claude H. Freeman, and Richard J. Barry, Asst. U. S. Attys., on the brief and supplemental brief.

Before BLACKMUN, MEHAFFY and LAY, Circuit Judges.

Certiorari Denied October 12, 1970. See 91 S.Ct. 66.

MEHAFFY, Circuit Judge.

This appeal is from the conviction judgments of William Eugene Sheehan and Robert Lee Sheehan, brothers, and Joseph Andrew Sheehan, their cousin, for having used the mails in a scheme to defraud customers in the sale of hearing aids in violation of 18 U.S.C. § 1341.

The three Sheehans and a fourth person, LeRoy Junior Westberg, a former brother-in-law of William and Robert, were indicted by a grand jury on December 21, 1967 on twenty counts of mail fraud. All entered pleas of not guilty but Westberg later changed his plea to guilty on two counts and was sentenced to three years' imprisonment on one of them, given a suspended sentence on the other and placed on three years' probation. He does not appeal. When the Sheehans were tried, the trial judge, The Honorable Roy L. Stephenson, withdrew three counts from the jury's consideration and seventeen counts were submitted to the jury. William and Robert were each convicted on sixteen counts and acquitted on one count, and Joseph was convicted on nine counts and acquitted on seven counts. William and Robert were sentenced by the court to a term of five years' imprisonment and a $1,000.00 fine on Count I and five years' imprisonment and a $1,000.00 fine on each of the other counts, the prison terms to run concurrently, and payment of the $1,000.00 fine on any one count to constitute payment of the fine on all of the counts. Joseph was sentenced to three years' imprisonment and fined $1,000.00 on Count I and received the same sentence and fine on each of the other eight counts, the prison terms to run concurrently and the payment of the fine on Count I to constitute payment of the fine on all counts. We affirm.

The defendants were involved in one or more of four companies at various times, namely, the Transistor Hearing Aid Company, Central Iowa Hearing Aid Center, Electronic Hearing Aid Company, and Stereophonic Sound Company. There was evidence to the effect that in some instances they sold used, recased hearing aids which they represented as new and charged an exorbitant price for them; that they promised free service for varying lengths of time extending up to the life of the customer, but did not provide it satisfactorily; that they claimed to be representatives of various hearing aid manufacturers which they did not represent; and that they repeatedly sold the same person a different hearing aid (in some instances several times a month or several times a year) on the representation that it was a newer model, or was more powerful, or would work better, when actually it did not, usually taking the previous one in on a trade but charging an exorbitant price for the difference.

Defendants' customers were in the age group from approximately seventy to ninety years, and many of them lived alone. One customer paid over $7,000.00 to two of the defendants and their companies in approximately ten months, and others paid over $2,000.00 and $3,000.00 within a period of two or three years or less.

William Sheehan became the sole owner of Transistor Hearing Aid Company in 1958. Robert and Floyd, his brothers, were salesmen for the company and Joseph, his cousin, was also a salesman there for about a year, beginning in 1959. In 1960, Robert Sheehan and Joseph Sheehan owned and operated Central Iowa Hearing Aid Center for several months. In 1961, Robert purchased Electronic Hearing Aid Company but sold it to Joseph in July, 1962 and acquired Stereophonic Sound.

Original counsel represented defendants during the trial and on appeal until after the original brief was filed. At that time another firm was substituted as counsel for defendants and that firm filed a supplemental brief and made the oral argument before this court. The original brief argued the following points:

I. That the court erred in admitting into evidence Exhibits 30-1, 30-2 and 30-3 and the testimony of Lowell Nicholas relating thereto.

II. That the court erred in admitting into evidence Exhibits 24-7, 24-8 and 24-9 and the testimony of John Widick relating thereto.

III. That the court erred in allowing the jury to find a "scheme and artifice to defraud" from defendants\' failure to answer correspondence directed to said defendants by persons containing inquiries concerning hearing aids purchased or the settlement of claims against the defendants.

In addition to the above arguments, present counsel asserted the following in its supplemental brief:

I. That the evidence proves that each defendant and each salesman operated separate from a common scheme to defraud; that this constitutes a fatal variance from the indictment, which alleged a single scheme and artifice to defraud; and that each defendant was materially prejudiced by evidence which was received for consideration by the jury but was demonstrably not admissible against him.

II. That certain other exhibits were improperly received in evidence by the trial court without adequate foundation.

III. That trial and appellate counsel first retained were inadequate.

We find no merit in defendants' first contention that the court erred in admitting into evidence Plaintiffs' Exhibits 30-1, 30-2 and 30-3 and the testimony of Lowell Nicholas, the General Manager of the Better Business Bureau, relating thereto. These were the permanent files of the Bureau pertaining to three of the companies which were owned by and/or which employed defendants at various times during the period involved. Exhibit 30-1 pertains to Transistor Hearing Aid Company, Exhibit 30-2 to Central Iowa Hearing Aid Center and Exhibit 30-3 to Electronic Hearing Aid Company.

Exhibits 30-1, 30-2 and 30-3, as offered, contained the complaints of various customers of defendants which were written to the Better Business Bureau concerning misrepresentations in connection with the sale of hearing aids by defendants, as well as the notification of defendants of the complaints and their responses thereto, but the complaints themselves were not permitted to go to the jury. Defendants objected to the admission of the exhibits on the ground that "they appear to be hearsay as to these defendants" and that they have "no probative value with respect to these three defendants." After a discussion at the bench among the court and counsel, the record reflects the following:

"The Court: Would the government state the purpose of the offer?

"Mr. Williams: Yes, Your Honor. The exhibits are being offered for the purpose of showing that the defendants were advised that complaints were being made about their activities and their business operations, and that they were aware of the complaints that were being made against them. Thus, bearing upon their intent in subsequent transactions.

"The Court: All right. They will be admitted for that purpose. And the Court cautions the jury at this time: I think you recognize that the fact that a complaint is made does not necessarily indicate that the complaint has validity. In other words, the people who made the complaints are not here before the Court to be examined in front of you so you can determine whether the complaints had validity. The only purpose of allowing this evidence to be introduced is for the purpose of showing — as the government has made its offer here — showing that there were complaints made, and what action if any was taken by the defendants. I assume that is covered in the files, is that correct?

"Mr. Williams: Yes, Your Honor.

"The Court: All right. So, Exhibits 30-1, 30-2 and 30-3 are received for that purpose."

At the close of the testimony and prior to the giving of the instructions, the court asked the defendants' attorney and the government's attorneys to look over the files and remove all complaints, since all of the complainants were not present for cross-examination but to include the letters from the Better Business Bureau notifying the defendants of the complaints and their responses, if any, thereto.¹

Photostatic copies of the letters selected by counsel were then made at the court's direction for submission to the jury. The record relevant to this is as follows:

"The Court: * * * I think, gentlemen, you agreed that the material from the file in Exhibits 30-1, 2 and 3 that is relevant, would be photostated, and that has been done?

"Mr. Wright: Defense counsel. That was the agreement between counsel for the defendants and the government.

"Mr. Williams: Government\'s attorney. And it is being done now by the clerk of court.

"The Court: I want to say for the record that the Court noted in the file — and I\'m not saying that if it were relevant and material in some respects that it would necessarily have to be kept out, but the Court felt that the Court should lean over backwards in regard to Exhibits 30-1, 30-2 and 30-3, to see that it should be removed, and not have the jury consider highly inflammatory letters that were in the file.

"Mr. Wright: I believe, Your Honor, you already pointed out that the defendants should have been afforded an opportunity to cross-examine any of the

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