Glazerman v. United States

• Decision Date: 06 March 1970
• Docket Number: No. 157 to 161-69.,157 to 161-69.
• Parties: Allan Maurice GLAZERMAN, Appellant, v. UNITED STATES of America, Appellee. Fred John PERELLA, Appellant, v. UNITED STATES of America, Appellee. Mrs. Zita B. ARRIGO, Appellant, v. UNITED STATES of America, Appellee. Billy Ray McDANIEL, Appellant, v. UNITED STATES of America, Appellee. Lester Joe CHAMBERS, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

421 F.2d 547 (1970)

Allan Maurice GLAZERMAN, Appellant, v. UNITED STATES of America, Appellee.

Fred John PERELLA, Appellant, v. UNITED STATES of America, Appellee.

Mrs. Zita B. ARRIGO, Appellant, v. UNITED STATES of America, Appellee.

Billy Ray McDANIEL, Appellant, v. UNITED STATES of America, Appellee.

Lester Joe CHAMBERS, Appellant, v. UNITED STATES of America, Appellee.

Nos. 157 to 161-69.

United States Court of Appeals Tenth Circuit.

January 16, 1970.

Rehearing Denied February 16, 1970.

Rehearing Denied March 6, 1970.

Julius Lucius Echeles, Chicago, Ill., for appellant Allan Maurice Glazerman.

Sanford W. Smith, Muskogee, Okl., for appellant Fred John Perella.

Ernest R. Anthis, Jr., Muskogee, Okl., for appellants Mrs. Zita B. Arrigo and Billy Ray McDaniel.

Sam Caldwell, Muskogee, Okl., for appellant Lester Joe Chambers.

William J. Settle, U. S. Atty., Muskogee, Okl., for appellee.

Before PICKETT, HILL and SETH, Circuit Judges.

Rehearing Denied in No. 161-69 February 16, 1970.

Rehearing Denied in No. 157-69 March 6, 1970.

HILL, Circuit Judge.

Appellants Glazerman,¹ Perella, Arrigo, McDaniel, and Chambers were charged by indictment with fourteen substantive counts of using the mails to defraud in violation of 18 U.S.C. § 1341, and one count of conspiracy in violation of 18 U.S.C. § 371. Each appellant was convicted by a jury on all fifteen counts, and each was sentenced to a term of imprisonment.

The last count of the indictment charged appellants with a conspiracy to use the mails to defraud running from March 1, 1966, until December 11, 1967. Counts one through six respectively charged that appellants, in an effort to execute their alleged fraudulent scheme, mailed letters on September 30, October 23, November 13, October 18, December 21 and December 18, all in the year 1966. Similarly, counts seven through eleven charged appellants with mailing checks on December 7, September 6, September 20 and October 19 in the year 1966, and on January 16, 1967. Counts twelve through fourteen charged appellants with mailing letters on October 20, 1966, and January 21 and January 5 in 1967 for the alleged purpose of perpetrating a scheme to defraud. In summary, the dates excluding the conspiracy charge run from September 6, 1966, to January 21, 1967.

Appellants' first contention is that the evidence presented at trial was insufficient to sustain the guilty verdict. It is uncontroverted that the United States mails were used on the pertinent dates. So, the questions on the facts are whether there was sufficient evidence of a conspiracy, and whether there was sufficient evidence to support the jury's finding of a scheme to defraud. At the outset, we must reiterate that an appellate court, in determining the sufficiency of the evidence is confined to whether, viewing the evidence in the light most favorable to the prosecution, there is substantial evidence, either direct or circumstantial, which together with reasonable inferences sustains the verdict.²

The government's evidence showed that in early March, 1966, Glazerman incorporated Oklahoma Brentwood Company in Oklahoma. All the stock was held by Glazerman, and no other appellant was directly involved in the incorporation. Glazerman leased office space in Oklahoma City on May 16, 1966. A corporate bank account was opened by him there, and on June 3, 1966, he filled out a signature card to become the authorized signatory for the corporation. On June 16, 1966, the signature card was revised to include Perella as an authorized signer. Glazerman also opened an office in Tulsa on August 1, 1966, and a bank account was opened in Tulsa on behalf of Brentwood on August 3, 1966.

Regarding management of the offices, Perella was made manager of the Oklahoma City office on June 15, 1966. Perella quit in the third week of September, 1966, and an undisclosed person took over management of the office. In Tulsa, Arrigo became manager around August 15, 1966, and stayed until late October or the first of November. McDaniel then took over the Tulsa office for about three weeks. When McDaniel quit, Chambers took over for a short time. Each person was hired by Glazerman.

Oklahoma Brentwood's business was selling built-in or centrally installed vacuum cleaners on a referral basis. Brentwood's salesmen called on people in their homes and tried to interest them in buying one of these cleaners, which operated via inlets in the walls of the home. They sold the vacuum cleaners for $899 although the price could amount to as much as $1200 when financing charges were included. Substantial evidence indicates that the machine operated to the expectations of the purchasers, and few found fault with the quality of the merchandise.

The sales were made in connection with a referral program whereby customers were told they could earn commissions from Brentwood which would defray the cost of the vacuum they had purchased. The proposition was, if a customer would give Brentwood the names of 25 qualified persons to contact about buying a vacuum cleaner cleaner, the customer supplying the names would earn $350 in commissions. For 50 qualified names, Brentwood would pay $700. If any of these referrals purchased a vacuum, the customer submitting the referral's name would earn a $100 commission.

Brentwood generated leads to future sales through this referral system of selling. Brentwood's salesmen would take the previous customer's referral names back to the office along with a commission agreement authorizing Brentwood to use the customer's name to contact the referrals. Brentwood then sent a letter to the referral parties over the name of the previous customer who had referred Brentwood to those parties. The letter invited the referral parties to allow a Brentwood representative to come into their homes and introduce them to "an exciting new program." Several days after the letter was mailed, Brentwood's phone girls would telephone the referrals and ask them to make appointments at their homes with a Brentwood salesman. Up to this point, the referral parties were told nothing about buying a vacuum cleaner. If an appointment was agreed to, a salesman would go to the referral's home and make a vacuum cleaner sales presentation while trying to enroll them into the referral program.

When a Brentwood salesman got into a prospective purchaser's home, the basic sales pitch was that Oklahoma Brentwood Company was forsaking media advertising and adopting word of mouth advertising via the referral program, and Brentwood was paying $350 for 25 qualified referral names in lieu of spending money on advertising. This sales pitch was supposed to be a uniform one for all salesmen, and it was adopted from a referral sales operation in Texas which Glazerman had begun before Oklahoma operations were started. A copy of the Texas sales presentation was placed in evidence, and there was testimony that an identical format was brought to Oklahoma and used exclusively.

For the referral names to be qualified, the names had to be people who owned their own homes, who had good credit, and who would allow a Brentwood salesman to make a complete sales presentation to them. Brentwood's salesmen were supposed to contact the referrals, make a sales presentation and, depending upon whether the referral made a purchase, make out an acceptance or rejection slip on each referral. There was testimony that the slips were not always made out or turned in at the office. Also there was some conflicting evidence on whether the customers always knew that one element of qualifying their referrals was that a complete sales presentation had to be made to the referral.

When a customer purchased a vacuum cleaner he signed a conditional sales contract, a supplementary contract, and a commission agreement, and he got a copy of each. Upon making a sale, Brentwood's practice was to discount the note on the contract with a finance company. But the finance company would only tentatively take the paper until there was a showing the installment contract was satisfactory in all respects. To accomplish this, Brentwood would send a public relations man to interview the purchaser after the sale but prior to discounting the contract. The public relations man would see if the customer was satisfied with the vacuum cleaner, and they would go over the sales contract and commission contract (referral program) to clear up any misconceptions. The customer was to understand that the compensation under the earnings agreement did not in any way effect the obligation under the conditional sales contract. Customers signed a form stating that the only agreements made were those stated in the sales contract and commission agreement. After this was accomplished Brentwood would turn the contract over to the finance company. Then the finance company also had a representative contact the purchaser to make sure the purchaser understood all that he had agreed to. If all went well, the installment contract was discounted to the finance company.

Most of the alleged misrepresentations centered on the sales presentation and referral program. Customers were told that Brentwood was a well known company, that it had been spending large sums of money in media advertising for twelve years, and that it intended to spend two million dollars in referrals in Oklahoma in lieu of media advertising. Customers were told that they could recoup the costs of their vacuum cleaners through the referral program, and that others had done so and were making money now. The sales presentation said that 62% of the referrals contacted would purchase and that 25 referrals could be contacted in a month after the referral. The sales presentation indicated that there were two separate agreements: the sales agreement and the referral commission agreement. But the commission was the initial lure used to get into the customer's home; and it was the main emphasis of the sales presentation whose...