Flood v. United States, 5867.

• Decision Date: 13 January 1930
• Docket Number: No. 5867.,5867.
• Citation: 36 F.2d 444
• Parties: FLOOD v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

36 F.2d 444 (1929)

FLOOD v. UNITED STATES.

No. 5867.

Circuit Court of Appeals, Ninth Circuit.

December 9, 1929.

Rehearing Denied January 13, 1930.

William D. Askren and Frank R. Jeffrey, both of Seattle, Wash., and Richard S. Munter, of Spokane, Wash., for appellant.

Roy C. Fox, U. S. Atty., and E. J. Farley, Asst. U. S. Atty., both of Spokane, Wash.

Before RUDKIN, DIETRICH, and WILBUR, Circuit Judges.

WILBUR, Circuit Judge.

Appellant was tried upon an indictment containing eleven counts, the first five counts charging embezzlement, the next three counts charging abstraction of the funds of the Exchange National Bank of Spokane, and the last three charging false entries in the books of said bank, a member of the Federal Reserve Bank, all in violation of 12 USCA § 592, Id., Rev. St. § 5209. He was acquitted on all the counts except the last six and convicted on each of the latter. The evidence adduced by the prosecution showed a plan or scheme by which moneys were taken from the bank without proper entries upon its book.

It appears from the evidence that the bank, in order to qualify as a depositary for public moneys, was required by the law of Washington to furnish surety bonds in large amounts. The amount of these surety bonds varied from time to time according to the amount of public money on deposit. Rebates of premium were paid by the surety company to the bank from time to time by reason of the cancellation of surety bonds or the reduction of obligations thereunder by reason of the decrease in the deposits of public moneys in the bank. These refunds of premium, up to 1924, had been made by a check payable to the Exchange National Bank of Spokane, State of Washington. Thereafter, under an arrangement made between the agents of the surety company and the appellant, as vice president of the bank, refunds were made by check of the agents of the surety company payable to cash. The surety company's agent collected the cash on these checks and turned it in to the teller in the exchange window of the bank. This money was accepted by the teller and a corresponding number of the credit slips were destroyed. These slips were left by various officers of the bank who drew out the amount of cash indicated thereby without any corresponding entries upon the books of the bank, these items being carried on the books as cash and were entirely unconnected with the bond premium transactions. By this method of procedure the books of the bank would show the original payment made for premiums on the surety bonds, but would not show any refund to the bank of unearned premiums, nor would the books of the bank show any entries concerning the cash items which were thus taken up by the cash paid by the surety company's agent to the teller at the Exchange window. In this manner it was possible for any one authorized or permitted to withdraw cash and substitute a credit slip to retain that cash to the amount of said premium refund without that fact being disclosed by the books of the bank. In addition to these refunds of premiums thus deposited by the surety company's agent, testimony was adduced to the effect that on a number of occasions when the appellant desired to take up the cash slips carried as cash on the books of the bank at the exchange window, he caused false bills to be rendered by the surety company's agents for premiums for surety bonds that were never executed. Thus, the books of the bank would show a payment for premiums upon surety bonds, when in fact no such bonds were executed by the surety company. The three false entries upon the books of the bank upon which the conviction of the appellant was based were items of this latter nature, to wit, an item of $400 in the expense register on April 2, 1926, an item of $250 in the expense register on April 25, 1927, and an item of $300 in the expense register on June 15, 1927. All these items were paid to Jones & Mitchell, agents of the surety company, according to the testimony of S. A. Mitchell, upon false bills rendered on behalf of the surety company in pursuance of an agreement between the...