Chew v. United States

• Citation: 9 F.2d 348
• Decision Date: 14 October 1925
• Docket Number: No. 6922.,6922.
• Parties: CHEW v. UNITED STATES.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

9 F.2d 348 (1925)

CHEW v. UNITED STATES.

No. 6922.

Circuit Court of Appeals, Eighth Circuit.

October 14, 1925.

Sam R. Chew, of Ft. Smith, Ark. (Jeptha H. Evans, of Booneville, Ark., and Joseph M. Hill, of Ft. Smith, Ark., on the brief), for plaintiff in error.

Sylvester R. Rush, Sp. Asst. Atty. Gen. (S. S. Langley, U. S. Atty., of Ft. Smith, Ark., James D. Shaver, Sp. Asst. U. S. Atty., of Texarkana, Ark., and H. L. Arterberry, Sp. Asst. Atty. Gen., on the brief), for the United States.

Before KENYON and BOOTH, Circuit Judges, and AMIDON, District Judge.

BOOTH, Circuit Judge.

Plaintiff in error, hereafter called defendant, and several others, were indicted in 10 counts under section 215 of the Penal Code (Comp. St. § 10385) for making use of the United States mails in execution of a scheme to obtain money or property by means of false and fraudulent pretenses, representations, and promises, and also, in an eleventh count, under section 37 of the Penal Code (Comp. St. § 10201) for conspiracy to commit the same substantive offenses. The government dismissed as to counts 2, 3, and 7. Defendant was found guilty on counts 1, 4, 5, 6, 8, 9, 10, and 11. One of the defendants, Louis S. Grimm, was found not guilty on each of the counts; a number of the remaining defendants pleaded guilty.

The indictment, occupying 27 printed pages, charges in the first count that, prior to the several acts of using the United States mails thereinafter set forth, defendants had devised and intended to devise a scheme to obtain money and property by means of false and fraudulent pretenses, representations, and promises, from numerous and sundry persons, too numerous to mention, said scheme being in substance as follows: That the defendants would organize an oil stock promotion company, called the Bob Chew Syndicate No. 2, under the guise of a trust estate, defendant Chew being sole trustee; that said company would enter into the pretended business of producing oil and gas, but in truth into the business of selling units or shares in the syndicate, and would appropriate the money received in payment for said shares to its own use; that it was part of the said scheme to make use of a brokerage company, to wit, the Commonwealth Brokerage Company, which would be used to send out market letters and quotations, etc.; that it was further part of said scheme to make promises that the syndicate would be operated on the actual cost plan, and that no well would cost more than $37,500; that it was further part of said scheme that said syndicate would be dominated and controlled by said defendant Chew, and that he should have as trustee unlimited power over the trust funds; and that it was further part of said scheme that said defendants would make false and fraudulent representations and promises to the persons to be defrauded, and that false and fraudulent representations were in fact made.

The indictment then sets out a number of representations alleged to have been made as part of said scheme, among them that defendants advertised and represented that defendant Chew had kept the faith; that he had paid 100 per cent. cash dividends, and that it was only the forerunner of many more tremendous pay-offs; that the operators of defendants were in a field where the oil-producing formation proves it to be the largest and longest lived oil area the world had ever known, where the life of producing oil wells would doubtless be from 25 to 40 years; that defendant Chew had made the unparalleled record of paying a 2,400 per cent. cash dividend to his investors; that it was certain that said syndicate would be the greatest profit payer that any oil field had ever known. The indictment then alleges that the representations so made were false and untrue, and known by the defendants to be false and untrue. The indictment then charges that the defendants, having so devised the scheme to defraud, did, for the purpose of executing said scheme, on the 10th of March, 1923, at El Dorado, Ark., place a postpaid letter in the United States mails, to be sent and delivered by the post office establishment to the addressee, W. S. Beck, 1501 South Santafe avenue, Wichita, Kan., the letter being set out at length. The remaining counts, to the tenth, inclusive, adopt the allegations of the first count, and charge respectively the placing of other letters in the mail for the purpose of executing said scheme.

The eleventh count charges that the defendants, throughout the period from January 1, 1923, to the date of the filing of the indictment, at El Dorado, Ark., within the jurisdiction of the court, and at other places "did unlawfully, willfully, and feloniously conspire, combine, confederate, and agree together, and with each other and with divers other persons to the grand jurors unknown, to commit divers offenses against the United States, to wit, violations of section 215 of the Penal Laws of the United States, and among said violations to commit the divers offenses charged against the said defendants in the preceding counts of this indictment." This count then sets out a number of overt acts alleged to have been committed by the defendants other than defendant Chew to effect the object of the conspiracy.

A demurrer was interposed by defendants Chew and Grimm to each of the counts of the indictment. The grounds of the demurrer are the same to each count, to wit, that the count does not state facts sufficient to constitute a public offense under the laws of the United States; second, that the count is so vague, indefinite, and uncertain that it does not fairly or sufficiently inform said defendants of the charge they are expected to meet at the trial. The demurrer was overruled, and trial had as above stated.

Motion in arrest of judgment was made and overruled. The grounds of the motion were that no one of the first 10 counts stated facts sufficient to constitute a violation of section 215; that the first count was duplicitous; that the eleventh count was duplicitous, and could not be joined with the other 10; that the court had no jurisdiction of offenses against the laws of the United States committed in New York, Massachusetts, etc. (places where overt acts were alleged to have been committed); and that the acquittal of defendant Grimm was inconsistent with the verdict of guilty against defendant on the charge of conspiracy.

The only errors assigned are the overruling of the demurrer and the denying of the motion in arrest of judgment. Under these assignments, counsel has with meticulous diligence attacked the various allegations contained in the several counts of the indictment. It is urged:

(1) That the offense charged in the indictment, viz. that defendant "devised * * * a scheme to obtain money * * * by means of false and fraudulent pretenses and representations," and made use of the United States mails for the purpose of executing such scheme, is not within section 215, because the only offense charged in section 215 is the use of the United States post office establishment for carrying into effect a scheme or artifice to obtain or in any way deal in counterfeit and spurious money or obligation, etc., or at least that no punishment is fixed by the statute for any other offense. A sufficient answer to this contention is found in the history of the section. Its forerunner, Act June 8, 1872, c. 335, § 301 (17 Stat. 323), afterward adopted with but slight changes as section 5480, Revised Statutes, denounced but one offense, namely, a scheme or artifice to defraud to be effected by use of the mails. It read:

"That if any person having devised or intending to devise any scheme or artifice to defraud, to be effected by either opening or intending to open correspondence or communication with any other person (whether resident within or outside of the United States), by means of the post office establishment of the United States, or by inciting such other person to open communication with the person so devising or intending, shall, in and for executing such scheme or artifice (or attempting so to do), place any letter or packet in any post office of the United States, or take or receive any therefrom, such person, so misusing the post office establishment, shall be guilty of a misdemeanor, and shall be punished with a fine of not more than five hundred dollars, with or without such imprisonment, as the court shall direct, not exceeding eighteen calendar months. * * *

By the amendment of March 2, 1889 (25 Stat. 873, c. 393), a number of other offenses were included in the section, among them the one of dealing in counterfeit money, etc., and the section as thus amended was carried forward and became section 215 of the Penal Code, with one element, however, omitted, namely, the intent to make use of the United States mails in carrying out the scheme. The Act of March 2, 1889, did not narrow the scope of section 5480 by enmerating specific schemes, but broadened the section by the inclusion of the specific schemes enumerated. Culp v. United States, 82 F. 990, 27 C. C. A. 294; Milby v. United States, 120 F. 1, 4, 57 C. C. A. 21; Kellogg v. United States, 126 F. 323, 325, 61 C. C. A. 229; Miller v. United States, 133 F. 337 (C. C. A. 8), 66 C. C. A. 399; Lemon v. United States, 164 F. 953 (C. C. A. 8), 90 C. C. A. 617; Bettman v. United States, 224 F. 819, 825, 140 C. C. A. 265. See also Streep v. United States, 160 U. S. 128, 132, 16 S. Ct. 244, 40 L. Ed. 365; Durland v. United States, 161 U. S. 306, 313, 16 S. Ct. 508, 40 L. Ed. 709.

(2) That the indictment is invalid because not returned by a legal grand jury; that the grand jury which returned the indictment was illegal because, as is recited in the indictment, it was selected, tried, impaneled, sworn, and charged to inquire into and true presentment make of all offenses under the laws of the United States committed within the whole Western district of Arkansas; whereas a legal grand jury would have had...