Bobbroff v. United States, 13217.
Decision Date | 25 February 1953 |
Docket Number | No. 13217.,13217. |
Citation | 202 F.2d 389 |
Parties | BOBBROFF v. UNITED STATES. |
Court | U.S. Court of Appeals — Ninth Circuit |
Louis V. Skinner, John S. Sinai and Ralph M. Tucker, Reno, Nev., for appellant.
Miles N. Pike, U. S. Atty., Reno, Nev. (Howard A. Judy, Reg. Atty., S. E. C., Arthur E. Pennekamp and F. E. Kennamer, Jr., San Francisco, Cal., of counsel), for appellee.
Before DENMAN, Chief Judge, and HEALY and ORR, Circuit Judges.
Appellant was found guilty of violation of Counts 3, 4, 5 and 8 of an indictment. He appeals from the sentence of imprisonment and fine on the conviction on each count. Counts 3, 4 and 5 charge the use of the mails in an offer to dispose of, to three shareholders in a Nevada corporation, Eversharp Launwhiz, Inc., further shares therein by employing a scheme to defraud in violation of the Securities Act of 1933, 15 U.S.C.A. § 77q(a) (1).1
Count 8 charged a similar use of the mails in an attempt to sell further shares to another shareholder of Eversharp Launwhiz, Inc. in violation of the mail fraud Statute, 18 U.S.C. § 1341.2
The use of the mails proved was the deposit in the United States mails in post offices in the State of Nevada of envelopes addressed to four different shareholders of Eversharp Launwhiz, Inc., enclosing letters and printed matter of identical text. The four letters were composed under appellant's direction and contained enclosures directed by him and were mailed under his direction.
This statement was palpably false in that the only interest acquired by Eversharp Launwhiz, Inc. in the patents was that acquired under the contract of August 17, 1948, between Eversharp Lawnmower Company and appellant and by him assigned to Eversharp Launwhiz, Inc. which granted only the right and license to manufacture the patented lawnmowers. By paragraph 9 of the agreement it was expressly made subject to cancellation by Eversharp Lawnmower Company in the event appellant failed to pay within 30 days of written demand of any sum of money becoming due to the company under the terms thereof, or should fail to correct within 30 days of written demand any violation of the agreement. The agreement contained an express condition that the licensee should produce one or more lawnmowers within two years, and the requirement that within five years he be manufacturing and selling lawnmowers in quantities consistent with demands for same and the facilities for the manufacture and sale thereof.
Thus, instead of owning the patent, as stated in the prospectus, Eversharp Launwhiz, Inc. had only a revocable license which might be lost through failure to comply with the terms of the basic agreement, which was well known by the appellant.
The reprints taken from issues of the Reno Evening Gazette, a Daily Publication, dated September 19, 1949, and the Reno Reporter, a Weekly Publication, dated September 22, 1949, and of the Retailing Daily, a Trade Paper, dated October 5, 1949 enclosed with these letters to stockholders, contained the following statements:
The foregoing excerpts constitute uncontradicted evidence that the following representations were made, as charged in the indictment.
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