Berenbeim v. United States

• Citation: 164 F.2d 679
• Decision Date: 02 February 1948
• Docket Number: No. 3481-3483.,3481-3483.
• Parties: BERENBEIM v. UNITED STATES. SCHECHTER v. SAME. MANKOFF v. SAME.
• Court: U.S. Court of Appeals — Tenth Circuit

164 F.2d 679 (1947)

BERENBEIM v. UNITED STATES.

SCHECHTER v. SAME.

MANKOFF v. SAME.

Nos. 3481-3483.

Circuit Court of Appeals, Tenth Circuit.

November 5, 1947.

Rehearing Denied December 10, 1947.

Writ of Certiorari Denied February 2, 1948.

Philip Hornbein, of Denver, Colo. (Louis E. Gelt, of Denver, Colo., on the brief), for appellants Samuel Leonard Berenbeim and Ben Schechter.

Jean S. Breitenstein, of Denver, Colo. (James B. Radetsky, of Denver, Colo., on the brief), for appellant Harold Isadore Mankoff.

C. V. Marmaduke, Asst. U. S. Atty., of Denver, Colo. (Ivor O. Wingren, U. S. Atty., of Denver, Colo., on the brief), for appellee.

Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.

Writ of Certiorari Denied February 2, 1948. See 68 S.Ct. 454.

BRATTON, Circuit Judge.

Article IV of the Soldiers' and Sailors' Civil Relief Act, as amended, 54 Stat. 1183, 56 Stat. 773, 50 U.S.C.A.Appendix, § 540 et seq., concerns itself with keeping in force and effect insurance covering the lives of persons while in the armed service of the nation. Section 400 of the Article in presently material part provides that the term "policy" as used therein shall include any contract of life insurance, including any benefit in the nature of life insurance arising out of membership in any fraternal or beneficial association, which does not provide for the payment of less than the face value thereof or for the payment of an additional sum as premiums if the insured engages in the military service of the United States, which is in force on a premium paying basis at the time of the making of application for benefits under the Act, and which was made and a premium paid thereon not less than 30 days before the date on which the insured entered the military service. Section 401 authorizes the making of applications to the Administrator of Veterans' Affairs for benefits under the Article. It provides that the application shall be in duplicate; that one copy shall be sent to the insurance company; and that the other copy shall be sent to the Administrator. Section 403 provides that a policy found by the Administrator to be entitled to protection under the Article shall not subsequent to the date of the application for benefits and during the period of military service of the insured or during two years after the expiration of his service, lapse or otherwise terminate or be forfeited for nonpayment of premium becoming due and payable. And section 406 provides that the amount paid by the United States to an insurance company on account of applications approved under the provisions of the Article shall become a debt due to the United States by the insured, and that such amount shall be collected either by deduction from any amount due to the insured by the United States, or otherwise as provided by law. Section 35 of the Criminal Code, as amended, 18 U.S.C.A. § 80, provides that it shall be a penal offense to make or cause to be made or present or caused to be presented, for payment or approval, to or by any person or officer of the United States, a false, fictitious, or fraudulent claim, knowing it to be false, fictitious, or fraudulent. In addition, it makes it a penal offense to falsify or conceal or cover up by trick, scheme, or device any material fact, or make or cause to be made any false or fraudulent statement, or representation, or make or use or cause to be made or used any false account, claim, or certificate, for the purpose of obtaining or aiding to obtain the payment or approval of a false, fictitious, or fraudulent claim against the United States. And section 37 of the Criminal Code, 18 U.S.C.A. § 88, make it a crime for two or more persons to conspire to commit an offense against the laws of the United States, or to defraud the United States in any manner or for any purpose, attended by an overt act of one or more of the conspirators in furtherance of the purpose.

An indictment returned in the United States Court for Colorado charged Samuel Leonard Berenbeim, Harold Isadore Mankoff, Ben Schechter, and Marie Stoeffler with the forming of a conspiracy fraudulently to cause the United States, through the Veterans Administration, to guarantee the payment of premiums on life insurance certificates or policies issued by Ancient Order of United Workmen, hereinafter called the company, covering the lives of persons who were about to enter or had entered upon active duty in the military service of the United States. The defendants were found guilty; and Berenbeim, Schechter, and Mankoff perfected separate appeals from the respective sentences imposed upon them.

Evidence was adduced at the trial which tended to establish these facts. The company was a fraternal benefit society organized under the laws of Kansas, with its principal place of business at Newton, Kansas. Its certificates or policies of insurance, issued only to persons who applied for membership in the company, did not contain a war exclusion provision. Berenbeim was its state agent in Colorado, and he received a commission of 82½ per cent of the first year's premium on all policies written in Colorado, 15 per cent on the premiums paid for the second year, and 7 per cent on the premiums for the third, fourth, fifth, and sixth years. His duty among other things was to select, employ, and train subagents in Colorado. Mankoff and Schechter were subagents under Berenbeim. Originally, Berenbeim was to pay each of them for his services 50 per cent of the first year's premium on all policies which he obtained. The amount was later increased to 70 per cent. Marie Stoeffler was employed by Schechter as his subagent, and her compensation was 40 per cent of the first year's premium on all policies which she obtained through her own efforts and 20 per cent when she solicited jointly with Schechter. Berenbeim furnished Mankoff and Schechter with blanks and information for their use in soliciting policies. Applications for insurance and reports of medical examiners were placed in the hands of Berenbeim. He transmitted them to the company; and when policies were issued, they were mailed to him and he in turn passed them to the subagent for delivery to the insured or the beneficiary. Applications for benefits under the Act, supra, also were placed in his hands and he transmitted them, one copy to the company and the other to the Veterans Administration. Mankoff, Schechter, and Marie Stoeffler conducted a campaign of solicitation among young men in the military service or about to enter it. Sometimes the prospects were solicited singly and sometimes group meetings were held. In some instances money was paid to a selectee for his services in helping to solicit his friends and associates to take policies. The price usually paid was $5 for each application obtained in that manner. The prospects were told in substance that they could obtain a policy for $10,000 for which they would pay nothing, and for which they would owe nothing. They were told that the United States would guarantee the premiums. They were not told directly or indirectly that they would be liable to the United States for all sums which it paid in fulfillment of the guarantee. The defendants had each prospect willing to take a policy sign three printed blanks, one denominated obligation and application for membership and policy, one medical examiner's report, and one application for benefits under the Act. None of these was filled out at the time of being signed, and all of them were delivered to the agent soliciting the policy. In instances where the prospect was not yet in the military service he was given a card or form and an envelope addressed to the agent soliciting the policy with instructions to write on the card or blank after he had entered into active duty, his name, date of entry into the service, serial number, rank, and certain other information, and then to mail it to the agent soliciting the policy. On receiving the card or form furnishing the information, and at least in one instance without receiving it, the application for the policy was filled out over the signature of the applicant. In some instances, the report of the medical examination was filled out to show that the applicant for the insurance was examined by a named physician in Denver. But in many cases the applicant did not appear before the physician and no examination whatever was conducted. And in some of the cases, the applicant was not in Denver at the time referred to in the report. After being filled out in that manner, the application for the policy and the report of medical examination were forwarded to the company. For many years it had been the custom of the company to date its policies the first of the month regardless of the day within the month upon which the application was made for the policy. Due to that custom, some of the policies solicited and obtained by the defendants appeared on their face to have been issued more than 30 days prior to the time the insured entered active military service, while in fact they were issued less than 30 days prior to such entry into the service, and the insured did not pay any premium upon them. In many instances no policy was delivered to the insured or the beneficiary. After the policy had been issued the defendant who had solicited the insurance filled out or caused to be filled out the application for benefits under the Act previously signed in blank and left with such defendant. One question asked in the application was the due date of the last premium paid on the policy, and the date called for in that question was given as the first day of the...