Ebeling v. United States, 15582.

• Decision Date: 16 December 1957
• Docket Number: No. 15582.,15582.
• Citation: 248 F.2d 429
• Parties: Joseph Mary EBELING and Charles G. Emerling, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

248 F.2d 429 (1957)

Joseph Mary EBELING and Charles G. Emerling, Appellants, v. UNITED STATES of America, Appellee.

No. 15582.

United States Court of Appeals Eighth Circuit.

August 28, 1957.

Rehearing Denied October 3, 1957.

Writ of Certiorari Denied December 16, 1957.

COPYRIGHT MATERIAL OMITTED

Michael J. Ebeling, St. Louis, Mo., for appellant Joseph Mary Ebeling.

Ted A. Bollinger, Jr., St. Louis, Mo., for appellant Charles G. Emerling.

Forrest Boecker, Asst. U. S. Atty., St. Louis, Mo. (Harry Richards, U. S. Atty., St. Louis, Mo., on the brief), for appellee.

Before JOHNSEN, VOGEL and VAN OOSTERHOUT, Circuit Judges.

Writ of Certiorari Denied December 16, 1957. See 78 S.Ct. 334.

JOHNSEN, Circuit Judge.

Ebeling and Emerling, the appellants here, were jointly charged, in an indictment of 9 counts, with 8 violations of 18 U.S.C.A. § 1001 and a violation of the conspiracy statute, 18 U.S.C.A. § 371. The indictment ran against them alone. On a trial to a jury, each was convicted on all 9 counts.

Section 1001, in its here material portion, makes guilty of a criminal offense anyone who, "in any matter within the jurisdiction of any department or agency of the United States, knowingly and willfully * * * makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry * * *".

Ebeling was manager of a business, operated under the trade name of Manchester Machine Co. Emerling was president of Production Engineering & Manufacturing Co., a manufacturing corporation. Both enterprises had their location in or near the city of St. Louis, Missouri.

Production Engineering obtained a government contract in 1951, to produce mortar conversion kits for the Department of the Army. The contract contained a price redetermination clause, which required the filing of a statement of the costs involved in kits produced. And, under 50 U.S.C.A.Appendix, § 1214, such a defense contract and any subcontract related thereto were automatically subject to a right of renegotiation on the part of the government, both against the prime contractor and against a subcontractor, for "the elimination of excessive profits".

The exact amount of production which had occurred under the contract is not shown by the printed record, except that the bill of particulars filed by the government states that there had been paid to Production Engineering, on billings by it for kits produced, the sum of $602,608.56 and that the Army was claiming the right to have further credited on such billings the sum of $289,979.09, from overpayments made to Production Engineering on some other contracts. What production and billing there may have been beyond this does not appear, nor is the matter, or any of the other facts referred to in this paragraph, of moment here.

In 1952, while the contract was in force, Production Engineering purported to subcontract to Manchester Machine the doing of some machine work on a number of parts for the kit assemblies. It executed three purchase order forms in favor of Manchester Machine, ostensibly requesting performance by the latter of some code-numbered operations, on 1200 "adapters" at a price of $7776, on 1200 "housings" at a price of $9888, and on 2500 "strikers" at a price of $8050, respectively.

There is nothing to suggest that Manchester Machine ever had submitted any bid for the doing of this work or at the price set out in the purchase orders. The government's evidence showed, and entitled the jury to find, that the whole thing constituted a spurious affair, done for the purpose of defrauding the government; that the assembly-kit parts covered by the purchase orders were never sent out by Production Engineering to Manchester Machine for the doing of such machine work; that Manchester Machine never engaged in doing the work; that Manchester Machine, however, sent invoices to Production Engineering indicating that the work had been done and making charges therefor, in the amount of $20,298.24; and that Production Engineering made payment of these invoices and incorporated the fictitious charges contained therein in the statement of costs which it submitted to the Department of the Army.

Various incidental cover-up activities were also shown to have been engaged in, at the plants of both Production Engineering and Manchester Machine. Thus, the evidence entitled the jury to find that requisitions of material, together with shipping tickets were falsely executed at the Production Engineering plant, in order to make it appear that adapters, housings and strikers had been duly sent out to Manchester Machine; that similarly shipping tickets were falsely executed at the Manchester Machine plant, to make it appear that the finished parts had been sent back to Production Engineering; and, further, that inspection tickets were falsely executed at Production Engineering, to evidence receipt and inspection of the returned finished parts.

The conspiracy count set out the names of a number of employees at Production Engineering, as having joined in the conspiracy, in that they knowingly had helped to carry on some of the cover-up activities, but they were not indicated, since they apparently had only done what they as employees had been directed to do. Ebeling had not been quite so successful in getting cooperation from the employees of Manchester Machine, in the carrying out of his end of the fraudulent scheme. There was testimony showing that he had turned the three false purchase orders issued by Production Engineering over to one of his employees and directed that bills or invoices for charges be issued against the orders, but that the employee had refused to do so, stating that he knew that no such work had been done in the plant and that he did not want to have anything to do with the matter. The employee testified that Ebeling then tried to assure him that it was all right to make out the invoices against Production Engineering; that he had a "deal" with appellant Emerling; and that the employee did not need to be afraid of anything. When the employee still refused, Ebeling went into his private office and engaged in typing out the invoices himself. He also filled out some false shipping tickets, to indicate the return to Production Engineering of the fictitious finished parts.

As to tangible acts on the part of appellant Emerling, there was evidence from which the jury could properly find that it was he who had given the instructions at Production Engineering for the issuance of the specious purchase orders in favor of Manchester Machine and he who had signed the checks for the payment of the specious invoices sent in by appellant Ebeling — with the papers being sent through the routine of the business for inclusion in Production Engineering's statement of costs to the government. Ebeling had admitted to one of the government's investigators that he and Emerling were personal friends of several years standing, having visited in each other's home and having taken a number of vacation trips together. There was testimony showing that during the period involved Ebeling came to the Production Engineering plant a number of times and always met with Emerling or Emerling's son — the latter being named, but not indicted, as a conspirator, and being used on the trial as a government witness. Such dealings and relations as necessarily underlay the situation were entitled to be found, on the circumstances shown, to have occurred entirely between appellant Ebeling and appellant Emerling directly, or with Emerling's son, when on occasion the father happened not to be present at the plant.

Each of the 8 substantive counts under 18 U.S.C.A. § 1001 related to the making and using of one of the 8 false invoices, by which Production Engineering was billed; on the basis of which Production Engineering issued its checks to Manchester Machine; and for whose amounts a charge was included in the statement of costs filed with the Department of the Army under the requirement of the contract.

As to each invoice, the applicable indictment count in substance alleged that it constituted a false writing within the purview of 18 U.S.C.A. § 1001; that all of its statements were false, fictitious and fraudulent; that both Ebeling and Emerling so knew; that Ebeling had furnished the invoice to Emerling as a charge for purported work done under Production Engineering's government contract; that it was intended by Ebeling and Emerling that the charge therein should be, and it was, included from the invoice as a part of the costs listed in the statement presented by Production Engineering to the Department of the Army under the price redetermination clause of the contract and the government's renegotiation right; and that Ebeling and Emerling thus had made and used a false writing, knowing it to contain false, fictitious and fraudulent statements and entries, "in a matter within the jurisdiction of the Department of the Army, Ordnance, a Department and Agency of the United States", and so had violated 18 U.S.C.A. § 1001.

The conspiracy count alleged in substance that Ebeling and Emerling had conspired together (in which conspiracy certain named, but unindicted, employees of Production Engineering, and other persons whose names were declared to be to the grand jury unknown, had joined) to defraud the United States, by preparing, keeping and presenting false records and accounts of the costs of Production Engineering in performing its government contract, and particularly the costs of purported subcontracts on the part of Manchester Machine, to the end that Production Engineering's costs under the contract would be wrongfully increased.

In greater fullness, count 9 charged that Ebeling and Emerling, in conspiracy and confederation, had entered into an agreement or understanding, to cause purchase orders to be executed on Production Engineering's forms, to falsely indicate allotments of...