United States v. Silverman

• Decision Date: 01 July 1970
• Docket Number: Dockets 33584 and 34392.,No. 494 and 561,494 and 561
• Parties: UNITED STATES of America, Appellee, v. Milton SILVERMAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

430 F.2d 106 (1970)

UNITED STATES of America, Appellee, v. Milton SILVERMAN, Defendant-Appellant.

Nos. 494 and 561, Dockets 33584 and 34392.

United States Court of Appeals, Second Circuit.

Argued January 26, 1970.

Decided July 1, 1970.

COPYRIGHT MATERIAL OMITTED

Simon H. Rifkind, New York City, (Paul, Weiss, Goldberg, Rifkind, Wharton & Garrison, New York City, Edward N. Costikyan, and Theodore W. Striggles, New York City, of counsel), for defendant-appellant.

Jack Kaplan, Asst. U.S. Atty., New York City, (Whitney North Seymour, Jr., and Robert M. Morgenthau, U.S. Attys., for the Southern District of New York, New York City, Elkan Abramowitz, Asst. U.S. Atty., New York City, of counsel), for appellee.

Before MOORE, FRIENDLY and HAYS, Circuit Judges.

MOORE, Circuit Judge:

Milton Silverman appeals from his conviction on an eighteen-count indictment and from the denial of his motion for a new trial. The first eight counts of the indictment charged Silverman with the conversion of union funds which were paid to printing companies for the benefit of a political campaign. Count nine involved an expenditure of union funds by Silverman at a union convention. The next four counts (ten through thirteen) charged payments of union funds to Silverman for his use in awarding "Christmas gratuities." Count fourteen charged embezzlement of the proceeds from the sale of an asset of an employee welfare fund. Count fifteen involved the reporting on a Labor-Management Report of the political printing expenditure in count one. False reporting was also charged in counts sixteen and seventeen, involving the payments described in counts ten through thirteen. The final count charged the making of false entries in the books and records of the unions.

The jury found Silverman guilty on all counts except counts sixteen and seventeen. Silverman was sentenced to four months to be served concurrently on counts one through fifteen and four months to be served consecutively on count eighteen. He was also fined $1,000 on each of the sixteen counts upon which he was found guilty.

The facts as to each of the counts (except counts nine and fifteen as to which no challenge to the sufficiency of the evidence is made) will be more fully discussed below. It is sufficient for purposes of introduction to give a general background only. In 1965 and 1966 Milton Silverman was President of Local 810, International Brotherhood of Teamsters; Business Manager of Local 1614, International Brotherhood of Electrical Workers; and a Trustee and the Administrator of United Wire, Metal and Machine Welfare Fund and United Wire, Metal and Machine Pension Fund. These four affiliated labor organizations had common headquarters in Manhattan and were governed by interlocking slates of officers. The organizations had grown out of a predecessor founded by Silverman twenty-four years earlier. Local 810 had a membership of 10,000 and Local 1614 had 3,500 members. They had collective bargaining agreements with approximately 300 employers in New York and New Jersey. Local 810 had net assets of about $200,000 while Local 1614 carried a deficit of around $51,000. Each local shared in the joint welfare fund, which had assets of $10 million, and the joint pension fund, which had assets of $6 million.

The Sufficiency of the Indictment

Silverman argues that the convictions on counts one through fifteen of the indictment must be reversed because (1) these counts failed to state an offense, (2) the court lacked jurisdiction and (3) the court allowed an impermissible amendment to the indictment. These arguments are based upon the proposition that the indictment failed to allege that the unions were involved in interstate commerce. The indictment, tracking the language of the statute,¹ states that:

"The defendant, unlawfully, wilfully and knowingly, directly and indirectly, did embezzle, steal, abstract and convert, to his own use, and the use of another monies, funds, securities, property and other assets of a labor organization of which he was an officer and by which he was employed, to wit, Local 810, International Brotherhood of Teamsters and Local 1614, International Brotherhood of Electrical Workers, as hereinafter set forth.

Dates and amounts involved in counts one through thirteen omitted

(Title 28, United States Code, Section 501(c), Title 18, United States Code, Section 2)"

There is no dispute that there was sufficient proof of the requisite connection with interstate commerce. It was established that both unions were certified representatives of employees under the provisions of the National Labor Relations Act. Pursuant to 29 U.S.C. § 402(j) (1), this fact requires that the unions shall be deemed labor organizations engaged in an industry affecting commerce. Nor is there any dispute that the jury was properly charged that it must find the unions to be labor organizations engaged in an industry affecting commerce in order to return a verdict of guilty.

Rule 7(c) of the Federal Rules of Criminal Procedure requires that the indictment contain "a plain, concise and definite written statement of the essential facts constituting the offense charged." This requirement performs three constitutionally required functions. It permits the accused "to be informed of the nature and cause of the accusation" as required by the Sixth Amendment. It prevents any person from being "subject for the same offence to be twice put in jeopardy of life or limb" as required by the Fifth Amendment. Finally, it preserves the protection given by the Fifth Amendment from being "held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury." 8 Moore, Federal Practice ¶ 7.04 at 7-15 (1969). On appeal, Silverman does not protest that the first two of these functions have not been fulfilled. He was adequately informed of the specific accusations and thus able to prepare his defense. The crime was stated definitely enough to permit a plea of former jeopardy if the acts were made the subject of a later charge. However, he contends that the third function has not been fulfilled. Invoking the legal history of the grand jury as a buffer against tyranny, he states that an allegation of each essential element of a crime must be in the indictment "as a testament to its having been before the grand jury." Applt's Brief at 21.

The policy underlying the requirement of specificity in the indictment is similar to that which forbids the amendment of an indictment without resubmission to a grand jury. It is to prevent the usurpation of power by the court and prosecutor in allowing a defendant to be convicted "on the basis of facts not found by, and perhaps not even presented to, the grand jury which indicted him." Russell v. United States, 369 U.S. 749, 770, 82 S.Ct. 1038, 1050, 8 L.Ed.2d 240 (1962). This policy is effectuated by preventing the prosecution from modifying the theory and evidence upon which the indictment is based. See generally, 8 Moore, Federal Practice ¶ 7.053. The question presented on this appeal is whether the indictment reveals that all the essential elements for conviction were presented to the grand jury, and deliberated upon and charged by them. We must also decide whether the prosecutor has attempted to rely at the trial upon theories and evidence that were not "fairly embraced in the charges made in the indictment." Russell v. United States, 369 U.S. 749, 793, 82 S.Ct. 1038, 1062 (1962) (Harlan, J., dissenting).

The indictment uses the term of art, "labor organization," and then specifies two particular labor organizations by referring to Locals 810 and 1614.² An indictment must be read to include facts which are necessarily implied by the specific allegations made. United States v. Martell, 335 F.2d 764, 765-766 (4th Cir. 1964); United States v. Varlack, 225 F.2d 665, 669-670 (2d Cir. 1955); Hewitt v. United States, 110 F.2d 1, 5-6 (8th Cir.), cert. denied, 310 U.S. 641, 60 S.Ct. 1089, 84 L.Ed. 1409 (1940); Hagner v. United States, 285 U.S. 427, 431-433, 52 S.Ct. 417, 76 L.Ed. 861 (1932); Grant v. United States, 291 F.2d 746, 748-749 (9th Cir.), cert. denied, 368 U.S. 999, 82 S.Ct. 627, 7 L.Ed. 2d 537 (1961); Gonzales v. United States, 286 F.2d 118, 120 (10th Cir.), cert. denied, 365 U.S. 878, 81 S.Ct. 1028, 6 L.Ed.2d 190 (1960); Finn v. United States, 256 F.2d 304, 306-307 (4th Cir. 1958).³ Just as the use of the words "labor organization" in the statutory section defining the criminal offense involved necessarily implies the fact that the labor organization is engaged in an industry affecting commerce pursuant to 29 U.S.C. § 402(i), so the use of that term of art in the indictment necessarily implies that the essential element of interstate commerce is charged in the indictment. To contend otherwise would be to argue that the defendant was not sufficiently informed of the charges against him to allow preparation of a defense and that he could not be protected from being later placed in jeopardy for the same acts. Such arguments are concededly not presented by this case since Silverman was not prejudiced in such a manner. We must conclude that the indictment, as drafted, was sufficient to charge the essential element of interstate commerce.

Even though the indictment is drafted to charge the essential elements, the question remains whether on its face it presents evidence which assures us that such essential elements were presented to the jury and deliberated upon by them in returning the indictment. Cf. Russell v. United States, 369 U.S. 749, 770-771, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962). The presence of such evidence would insure that the defendant is not tried upon a theory or evidence which was not fairly embraced in the facts upon which the grand jury based its charges. The events described in the indictment were quite specific as to the dates of the transactions, the amounts involved and the parties from whom the funds...