Czarlinsky v. United States

• Decision Date: 21 December 1931
• Docket Number: No. 500.,500.
• Citation: 54 F.2d 889
• Parties: CZARLINSKY v. UNITED STATES.
• Court: U.S. Court of Appeals — Tenth Circuit

54 F.2d 889 (1931)

CZARLINSKY v. UNITED STATES.

No. 500.

Circuit Court of Appeals, Tenth Circuit.

December 21, 1931.

George E. Remley, of Raton, N. M., and A. T. Hannett, of Albuquerque, N. M., for appellant.

Hugh B. Woodward, U. S. Atty., of Albuquerque, N. M.

Before PHILLIPS and McDERMOTT, Circuit Judges, and POLLOCK, District Judge.

POLLOCK, District Judge.

Czarlinsky, hereinafter called defendant, was charged by indictment containing nine counts with violations of section 338, title 18, USCA. The first count of the indictment, omitting the formal parts, reads, as follows:

"At a Special July, 1930, Term thereof, held at Albuquerque, in the District of New Mexico.

"The Grand Jurors for the United States of America, duly empaneled, sworn and charged in the District Court of the United States, in and for the District of New Mexico, at the term and place aforesaid, and inquiring for said District, on their oath present that heretofore, to-wit, on the 9th day of April, A. D. 1928, at Raton, in the State and District of New Mexico, and within the jurisdiction of this court, Carl Czarlinsky, alias C. Czarlinsky, late of said district, knowingly, unlawfully, maliciously and feloniously did devise a scheme and artifice to defraud Alfred J. Lowe, a merchant, trading under the name `Al. Lowe', engaged in the business of selling merchandise at wholesale at Ninth & Broadway Bldg., 834 S. Broadway, in the City of Los Angeles, in the State of California; that the scheme and artifice so devised was substantially this: that said Carl Czarlinsky, alias C. Czarlinsky, should obtain the shipment of merchandise to him on credit by means of false and fraudulent representations as to his financial worth, transmitted by United States mail in manner as follows, and on said date was carried into effect as follows:

"That said Carl Czarlinsky, alias C. Czarlinsky, was then the owner of a certain retail merchandise business, conducted under the name of `The Style Shop', and was engaged in the business of selling women's apparel, millinery and furnishings at retail in the City of Raton, Colfax County, State of New Mexico; that said Carl Czarlinsky, alias C. Czarlinsky, for the purpose of inducing the said Al. Lowe to fill orders for merchandise and to ship said merchandise to him upon credit, did knowingly, unlawfully, willfully, feloniously and in furtherance of said scheme and artifice cause to be placed in an authorized depository for mail matter for the United States mails, within the District of New Mexico, a certain envelope with postage thereon fully prepaid, addressed to Al. Lowe, 834 S. Broadway, Los Angeles, California, to be sent and delivered by the Post Office establishment of the United States to the said Al. Lowe, which envelope contained a financial statement purporting to show the financial condition of the said `The Style Shop' in words and figures as follows:

"`Statement of The Style Shop, Raton, New Mexico.

"`1-24-1927.

                  Merchandise on hand at market
                   value ............................ $ 8,332.27
                  Fixtures all paid for .............   2,799.18
                  Cash in bank ......................     502.58
                  Cash on hand ......................     141.28
                  Accounts receivable ...............   2,781.12
                  Total Assets ......................  14,556.43
                  Accounts payable ..................   3,657.29
                  Total Net Worth ...................  10,899.14
                  Insurance on merchandise ..........   7,000.00
                  Insurance on fixtures .............   1,750.00
                  Life Insurance payable to estate ..   7,500.00
                

"`Signed C. Czarlinsky.'

— which financial statement hereinabove set forth the said Carl Czarlinsky, alias C. Czarlinsky, then and there intended to be and knew to be false and fraudulent in this, to-wit: that the `Accounts payable', due and owing by said Carl Czarlinsky, alias C. Czarlinsky, trading under the name `The Style Shop' were then and there thousands of dollars in excess of the amount shown by such credit statement, the exact amount of such excess being to the Grand Jury unknown. * * *" The other counts are the same, except that they charge different dates and different persons to be induced to sell and deliver merchandise on credit.

The defendant was found guilty and sentenced on each count, and has appealed.

Defendant was the owner and manager of a ladies' ready-to-wear store at Raton, N. M., doing business under the name of "The Style Shop." On June 13, 1928, defendant forwarded to the Minneapolis Linen Company, of Minneapolis, Minn., the credit statement, charged in count two of the indictment, in which he fixed his accounts payable at $3,657.29 and his total net worth at $10,899.14. This statement was accompanied by a letter, which read as follows:

"Telephone 17-W

"The Style Shop, 136 South Second Street, Women's Ready-to-Wear, Millinery and Furnishings, Raton, New Mexico.

"6-13-1928.

"Minniapolis Linnen Co., Minneapolis, Minn.

"Dear Sirs: We have this day placed an order with your Mr. Stnley for 7 dozen bloomers and please ship same out as soon as possible and we are encloseng you our statement and hope same meets with your approval and will assure you that we will always discount your invoices very promptly and know that this will be the beginning of a very pleasant business relation ship.

"Thanking you in advance for giving this your special and kind attention.

"Very truly yours "The Style Shop "C. Czarlinsky. "CC/MG"

On the dates charged in the other eight counts of the indictment, he sent the same credit statement and substantially the same letter to the persons or firms named in such counts.

In June, 1925, L. S. Wilson, an attorney of Raton, began to get claims against defendant on account of merchandise purchased. When these claims were received, Wilson handed them to his secretary, who entered them in a claim register, gave them a number, and placed them in a file under that number. She then wrote a letter acknowledging the claim, and a letter to defendant demanding payment. These letters were forwarded to defendant in envelopes containing a return address card, and none of them were ever received back. In a few instances, defendant objected to certain claims, and upon investigation Wilson found that the objections were proper. Defendant made payments on such claims on an average of about once a week. On June 15, 1926, defendant delivered a letter to Wilson authorizing the latter to prorate such payments on all claims of creditors in Wilson's hands. When such payments were made, Wilson or his secretary entered them in his books. After having been properly identified by Wilson and his secretary, Irene Black, these books were offered in evidence. On April 9, 1928, according to such books, Wilson had in his hands for collection 409 claims against defendant on which there was a balance due of $19,711.54. The number of claims and the amounts due gradually increased until October 12, 1928, when claim No. 501 was entered, and the balance due was $25,337.16.

An involuntary petition in bankruptcy was filed against defendant on December 14, 1928. On January 14, 1929, he was adjudged bankrupt. He filed a schedule in bankruptcy, showing a total indebtedness of $50,277.43. These schedules were offered in evidence at the trial.

The defendant introduced a motion to quash the indictment on the ground that there was no competent evidence before the grand jury showing that the financial statements referred to in the several counts were in fact false on the dates defendant was charged to have mailed them.

This motion came before the court for hearing on an agreed statement of facts as to the evidence before the grand jury on this particular point, and stipulation filed in this court. This stipulation shows that Wilson testified before the grand jury that early in 1925 he began to receive claims for collection against defendant; that such claims came from wholesale houses located in various parts of the United States and were for merchandise claimed to have been shipped to the Style Shop upon the order of defendant; that upon receipt of claims, Wilson's secretary gave such claims an office number and filed each in a file under such number; that she also entered it in a book, or collection docket, and upon receipt of such claim she acknowledged it, mailed a letter to defendant advising him of the claim and demanding payment; that such notice to defendant was sent in a properly stamped and addressed envelope bearing the return address of Wilson, and regularly deposited in the United States mail; that none of such letters were ever returned; that during the years 1926, 1927, and 1928 defendant called at the office of Wilson on an average of once a week and made payments on such claims; that in a few instances defendant questioned certain claims, and upon investigation his objections were found to be correct; that other than a few instances referred to, defendant made no objections to such claims and made payments thereon, which Wilson distributed pro rata; that during the years 1926, 1927, and 1928 the balance due on such claims to which defendant had made no objection were many thousands of dollars in excess of $3,657.29; that after Wilson had testified, one Snyder was called, who qualified as an accountant; that he testified he had made an examination and audit of Wilson's books with particular reference to the number and amount of claims received by Wilson against defendant during the years 1926, 1927, and 1928, and the payments made thereon; that the amount of claims against defendant, as shown by the books on January 24, 1927, was largely in excess of $3,657.29, and had continuously increased thereafter; that the monthly balances in 1928 were several thousands of dollars in excess of $3,657.29; that certain creditors appeared before the grand jury and testified to claims against defendant aggregating $1,394.73.

The court overruled the motion, and such ruling is assigned as error.

The evidence of...