Anderson v. United States

• Decision Date: 19 December 1966
• Docket Number: No. 18306.,18306.
• Citation: 369 F.2d 11
• Parties: Gordon L. ANDERSON, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

369 F.2d 11 (1966)

Gordon L. ANDERSON, Appellant, v. UNITED STATES of America, Appellee.

No. 18306.

United States Court of Appeals Eighth Circuit.

December 2, 1966.

Rehearing Denied December 19, 1966.

Ronald L. Haskvitz, Minneapolis, Minn., for appellant.

Sidney P. Abramson, Asst. U. S. Atty., Minneapolis, Minn., for appellee. Patrick J. Foley, U. S. Atty., was with him on brief.

Before VOGEL, Chief Judge, and VAN OOSTERHOUT and LAY, Circuit Judges.

VOGEL, Chief Judge.

Defendant-appellant, Gordon L. Anderson, was charged in a 5-count indictment with mail fraud in violation of 18 U.S.C.A. § 1341. At the conclusion of a jury trial he was found guilty on all five counts of the indictment and was given a general sentence of five years in prison. The trial court denied motions to dismiss and for a new trial. Defendant appeals from the judgment of conviction, claiming six grounds of error entitle him to reversal: (1) Insufficiency of evidence; (2) the denial of defendant's motion to dismiss Count No. 5; (3) the denial of due process through the prosecutor's improper reference to a prior indictment; (4) the improper exclusion of evidence; (5) the trial court's improper comment upon some evidence; and (6) the denial of a motion for new trial based upon newly discovered evidence. We affirm.

I. Insufficiency of the evidence. The general rule must again be recognized that all evidence is to be viewed in a light most favorable to the government as the prevailing party and all reasonable inferences must similarly be resolved in its favor. Koolish v. United States, 8 Cir., 1965, 340 F.2d 513, 519, cert. denied, 381 U.S. 951, 85 S.Ct. 1805, 14 L.Ed.2d 724; Smith v. United States, 8 Cir., 1964, 331 F.2d 265, 278, cert. denied, 379 U.S. 824, 85 S.Ct. 49, 13 L.Ed. 2d 34, rehearing denied, 379 U.S. 940, 85 S.Ct. 321, 13 L.Ed.2d 350. Appellant's argument that the evidence was insufficient to sustain the verdict is essentially two-pronged in scope. In the first place, he insists that it was necessary for the government to prove beyond a reasonable doubt that National Tobacco Company, hereinafter referred to as National, was owned and controlled by appellant. The second claim is that the government must prove beyond a reasonable doubt that appellant intended to devise a scheme to defraud. From an examination of the evidence and a thorough review of an extensive transcript it is clear that the jury could and did reasonably find (a) that National was controlled by appellant and (b) that appellant intended to devise a scheme to defraud.

Gordon L. Anderson had, in the years immediately preceding his involvement with National, organized and directed numerous "sales" companies which marketed "business opportunities" and various related products. Prior to the formation of National appellant was doing business as the Allied Tobacco Company, hereinafter referred to as Allied, a company which sold cigar vending machines and furnished cigars on a commission basis to the purchasers of such machines. Allied was dissolved soon after the creation of National. National was formed early in September 1959 to distribute cigar vending machines to people throughout the United States. This business continued in operation until sometime late in 1961. The names of prospective customers were obtained by National through advertisements in local newspapers all over the country. After a prospect's initial response by mail and the completion of a confidential credit form, salesmen were sent out from the Minneapolis office to sell the cigar vending machines and arrange for locations where these machines could be installed. From the evidence it appears that the salesmen were taught by appellant and encouraged to use "high-pressure" sales tactics. They were also told to get certified checks from the purchasers for the total cost of the machines at the time of the original sale so the checks could not be stopped prior to payment. Salesmen received a commission of from 30% to 40% on these sales. From the record it is clear that the sales campaign was directed at persons who had no prior experience in selling through or servicing vending machines.

Also involved in the management of National was one Wilbert A. Schnabel, who by certain of his actions and representations appeared to be president and sole owner of National but who, as the jury determined, was simply the front man for appellant. Because appellant had previously been involved in many "business opportunity" schemes similar to the one involved in the instant case which had gained for him a rather unsavory reputation, he evidently concluded that National would have a greater possibility of success if he was not its titular head.

The five counts of the indictment in the instant case are based upon letters sent concerning the sale of vending machines to two men, Elmer Bender and Raymond Mosbrucker, in the Bismarck-Mandan, North Dakota area. Both of these men were sold cigar vending machines by one Frank Cooke, a salesman for National who had been trained by appellant and who the jury determined to be under the control of appellant at the time of the sales. The fraudulent misrepresentations upon which the indictment is grounded were made by the salesman and involved false representations concerning exclusive territories for the machine purchasers, time of delivery for the vending machines, potential profits that the vending machine purchasers could reasonably expect, repurchase agreement under which National would repurchase the machines or find another vender to take over the machines if the purchaser wanted out of the business, and finally the procurement by National of good locations to place the machines. The indictment was based upon the totality of the scheme to defraud.

Appellant contended throughout the course of the trial that he owned a company known as Commercial Distributors which was a wholesaler of cigar vending machines and cigars. It was appellant's claim that he and Schnabel had decided that Schnabel would form a retail distributing company, National, which would obtain its vending machines and cigars from Commercial. For this service National would pay appellant, doing business as Commercial, a royalty on the machines and cigars sold. In addition, National was to receive technical assistance from appellant. Appellant claims that pursuant to this agreement National was formed and that at no time did he have a direct financial interest in or exert control over National. Testimony and evidence in the record indicate that:

1. Prior to Schnabel's "formation" of National he was an employee of appellant's company, Allied.

2. Appellant instructed Schnabel that he wanted him to act as president of a company and that he wanted him to register the company name, National Tobacco Company, with the Minneapolis Better Business Bureau.

3. Several salesmen who had worked for Allied immediately began working for National upon its formation.

4. Appellant supplied the funds with which National's first bank account was opened.

5. Appellant's control of National's office routine did not differ markedly from the office decisional control he exercised in the Allied company.

6. Appellant trained all the National salesmen and National salesmen were hired subject to his approval.

7. Appellant received weekly payments from National in the sum of $250 as compared to $150 weekly for Schnabel. Two of the company checkbooks indicated that this was an amount payable for salary.

The record is replete with other pertinent testimony but these significant examples suffice to show appellant's involvement in and control over National. There is, of course, substantial conflict of evidence in the instant case but it is well established that conflicts of evidence are to be resolved by the trier of facts. See, Black v. United States, 8 Cir., 1962, 309 F.2d 331, 341; Cwach v. United States, 8 Cir., 1954, 212 F.2d 520, 527. This the jury did when it convicted appellant upon all five counts of the indictment.

Appellant further claims the evidence was insufficient in that no criminal intent to defraud was shown. In the instant action, as in most mail fraud prosecutions, there are numerous instances of allegedly illicit conduct, all of which need not be proved to sustain a conviction. See, Schaefer v. United States, 8 Cir., 1959, 265 F.2d 750, 753; Holmes v. United States, 8 Cir., 1943, 134 F.2d 125, 133. The record contains many indications of appellant's fraudulent representations and conduct which the jury could find established his criminal intent:

1. The appellant encouraged the making of false representations concerning exclusive vending machine territories.

2. Appellant consistently urged salesmen to promise two or three-week delivery of machines when there was no intent or possibility to comply with these limits.

3. Appellant devised profit representation material for use by the salesmen which he knew fraudulently depicted the profit possibilities of the vending machines.

4. Appellant sanctioned the use of fraudulent misrepresentations at the time of original sales concerning the repurchase and relocation of vending machines for dissatisfied customers.

When this court previously considered an appeal from a similar mail fraud prosecution for fraudulent misrepresentations where fraudulent misrepresentations were conveyed through salesmen at widely different places and times, it recognized that proof of such representations could establish the existence of a scheme to defraud. Reistroffer v. United States, 8 Cir., 1958, 258 F.2d 379, 387. In the instant case it is clear that fraudulent misrepresentations were made by appellant's agents with his knowledge and encouragement. Totality of appellant's conduct while involved in the National scheme as set out above is properly admissible as evidence and subject to the consideration of the jury in its determination of the appellant's intent. Shreve v. United...