Gantz v. United States

• Decision Date: 11 June 1942
• Docket Number: No. 12086.,12086.
• Citation: 127 F.2d 498
• Parties: GANTZ v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

127 F.2d 498 (1942)

GANTZ v. UNITED STATES.

No. 12086.

Circuit Court of Appeals, Eighth Circuit.

April 28, 1942.

Rehearing Denied June 11, 1942.

COPYRIGHT MATERIAL OMITTED

George C. Dyer, of St. Louis, Mo., for appellant.

David M. Robinson, Asst. U. S. Atty., and Harry C. Blanton, U. S. Atty., both of St. Louis, Mo. (Russell Vandivort, Asst. U. S. Atty., of St. Louis, Mo., on the brief), for appellee.

Before SANBORN, WOODROUGH, and JOHNSEN, Circuit Judges.

SANBORN, Circuit Judge.

This appeal is from a judgment entered upon the verdict of a jury finding the appellant (hereinafter referred to as defendant) guilty under five counts of an indictment.¹ Two of these counts (Fifth and Sixth) charged violations of § 17(a) (1) of the Securities Act of 1933, c. 38, Title I, 48 Stat. 84, 15 U.S.C.A. § 77q(a) (1),² and the other three (Eighth, Ninth and Tenth) charged violations of the Mail Fraud Statute, c. 321, § 215, 35 Stat. 1130, 18 U.S.C.A. § 338.³ The District Court sentenced the defendant to four years' imprisonment upon each of the five counts, the sentences to run concurrently.

The errors assigned by the defendant relate (1) to the refusal of the court to direct a verdict of acquittal, (2) to rulings upon evidence and other rulings, (3) to alleged misconduct of counsel for the Government in argument, and (4) to the charge of the court.

The indictment was in conventional form. It charged the defendant with having devised a scheme to defraud certain persons and with having used the mails in execution of it. The scheme was described in the First count and was set up by reference in each of the other counts. Each count charged specifically the sending of some communication through the mails in execution of the scheme.

The indictment is not under attack and the defendant does not argue that the evidence of the Government was insufficient to establish that the defendant devised the scheme described in the indictment. It is therefore unnecessary to state in detail, in that regard, the charges contained in the indictment or the facts shown by the evidence of the Government. In substance and effect, the charges were, and the evidence of the Government tended to prove, that the defendant, in violation of the statutes referred to, as the president and manager of G. A. Gantz & Company, a corporation, a dealer in securities at St. Louis, Missouri, conducted a dishonest, fraudulent and insolvent brokerage business in the purchase and sale of securities, cheated the customers of the corporation in their dealings with it, and financed the operation of the business by the unauthorized and fraudulent use of the moneys and securities of the customers until bankruptcy finally intervened.

1. The defendant's first contention is that he was entitled to a directed verdict of acquittal because there was no substantial evidence that he placed or caused to be placed in the United States mail any of the writings referred to in any of the counts of the indictment upon which he was convicted. There was no direct evidence that the defendant himself placed in the mails any of the communications referred to or that he gave any specific directions to anyone to place them in the mails. The evidence of mailing, as it frequently is in such cases, was circumstantial. It will only be necessary to consider the sufficiency of the evidence of mailing with respect to one of the counts, since the evidence as to each was in that regard substantially the same, and if the defendant was properly convicted upon any count the judgment will have to be affirmed.⁴

The Eighth count of the indictment, upon which count defendant was found guilty, charges that on June 1, 1939, at the city of St. Louis, Missouri, he placed and caused to be placed in the Post Office of the United States, to be sent and delivered by it, a statement addressed to Charles R. Dufner, Hermann, Missouri. The statement is a statement of account dated June 1, 1939. Printed across the top is, "In Account with G. A. Gantz & Company, Arcade Building, Saint Louis, Mo.", followed by the printed word "To." After the "To" appears in typewriting, "Mr. Charles R. Dufner, Hermann, Missouri," and below a ruled line appears a statement in typewriting showing that he had a debit balance of $634.93, and was "Long — 10 shares General Motors Corporation" and "12 shares Chrysler Corporation." Charles R. Dufner, who was a witness for the Government, testified that he was a farmer residing at Hermann, Missouri; that he had had business transactions with G. A. Gantz & Company which had been carried on through correspondence; that the company had bought stocks upon his instructions, and "that all business transacted with G. A. Gantz & Company was done through the mail." Dufner identified the statement referred to in the Eighth count of the indictment as the last monthly statement he had received from the company, and testified that he received it through the mails. He also testified to having received similar monthly statements through the mails.

Margaret Kottkamp, a witness for the Government, testified that she was employed as a stenographer for G. A. Gantz & Company from July, 1938, until the discontinuance of the business in 1939; that a Miss Storment was bookkeeper; that the defendant was in charge of the office and that the witness received her instructions from him; that on or about June 1, 1939, she made out monthly statements, which were put in envelopes and stamped, but that she did not know whether they were mailed or not; that she might deposit part of the mail and Miss Storment part. She also testified that it was customary for the statements to be typed, put in envelopes and sealed ready for mailing, and that either she or Miss Storment mailed them; that it was a general policy of G. A. Gantz & Company to type and mail monthly statements. On cross-examination she testified that she did not of her own personal knowledge know whether statements were mailed June 1, 1939, or not; that she did mail some letters, but could not say which ones she mailed; that it was customary for some confirmations (of purchases of securities ordered) and statements of account to be delivered personally, and she did not know which were delivered personally and which were mailed. On redirect examination, she testified that statements would be handed to customers who came into the office while the statements were being made out, and that it was the office policy with reference to confirmations and monthly statements for them to be prepared and mailed.

Thomas J. Hagan, a witness for the Government, testified that he was a salesman for G. A. Gantz & Company; that the defendant operated the business; that Miss Storment had charge of the books and Miss Kottkamp was general stenographer; that it was the general policy of G. A. Gantz & Company to notify customers of the purchase and sale of stocks and to send them monthly statements; that confirmations were sent through the mail, but that in a few instances they would be delivered by a salesman.

There is abundant evidence in the record that the defendant used the mails in the conduct of the business. The defendant himself testified that sometimes the mails were used and sometimes not; that at times an effort was made to avoid using the mail when a messenger could deliver the letters cheaper than they could be sent by mail. The jury could reasonably believe from the evidence that the defendant ran the business; that the business was such that the mails were customarily and extensively used in carrying on the business; that confirmations of orders and monthly statements were ordinarily mailed to customers who did not call for them personally; and that the monthly statement which was dated June 1, 1939, and received by Charles R. Dufner at Hermann, Missouri, through the mails, was mailed or caused to be mailed by the defendant in the ordinary course of his business and in accordance with his usual practice. In fact, if the jury believed the evidence introduced by the Government, it is difficult to understand what other conclusion could reasonably be reached.⁵

It is our opinion that there was ample proof of the mailing of the communications referred to in the five counts upon which the defendant was convicted.

2. The defendant's next contention is that the evidence of the Government's expert accountant King, who summarized and analyzed the books and records of G. A. Gantz & Company, was improperly admitted because not shown to be based exclusively on those books and records or other records in evidence. This contention appears to be based largely on a statement made by King, on cross-examination, to the effect "that his answers concerning individual accounts and items were based on the books and records of G. A. Gantz & Company that were presented in evidence in the case in the court room and on the records of brokerage houses that had been produced in the court room, and that he had taken into account something besides the books and records of G. A. Gantz & Company." Counsel for the defendant then moved to strike all the testimony of the witness. The court overruled the motion, saying: "I assume, of course, that he has in mind the records that have been offered in evidence in the case." The statement of the witness that he had taken into account something besides the records of G. A. Gantz & Company was not a statement that he had taken into consideration anything not in evidence. On the same page on which the statement just referred to appears, the record shows that the witness testified "that to the best of his knowledge all the books and records he had examined from which his work papers had been prepared and upon which his testimony had been based were in the court room." The effort of defendant's counsel to show by the witness that his testimony was based upon matters or records not in evidence was unsuccessful. There is no merit in the contention that the...