Gourdain v. United States

• Decision Date: 16 April 1907
• Docket Number: 1,297.
• Citation: 154 F. 453
• Parties: GOURDAIN v. UNITED STATES.
• Court: U.S. Court of Appeals — Seventh Circuit

154 F. 453

GOURDAIN v. UNITED STATES.

No. 1,297.

United States Court of Appeals, Seventh Circuit.

April 16, 1907

The plaintiff in error, Louis A. Gourdain, was indicted, with one John H. Dalton, for violations of section 5480, Rev. St. (U.S. Comp. St. 1901, p. 3696), and upon joint trial both were convicted. This writ of error is prosecuted from the judgment thereupon against the first-named defendant. The indictment contains three counts, averring like schemes to defraud-- that described under the first and second counts stated as carried on under the name of 'Louisiana State Loan & Trust Company of New Orleans, La.,' and under the third count as 'Louisiana Trust Banking Company.' Each count is voluminous in description of the scheme and means, and the only substantial difference is in the letters alleged to be mailed in execution thereof, and in the location of lands and size of lots referred to under one and the other name.

The averments of the first count are summarized in the briefs for the plaintiff in error as serving for all questions raised and such summary is adopted, in substance, for this statement, as follows:

The count charges that Gourdain and Dalton within the jurisdiction of the court had devised a scheme and artifice to defraud one Charles H. McClees (with residence described) and a class of persons then resident within the United States not capable of being resolved into individuals and not capable by means of their great number and of want of information on the part of the grand jurors of being all named in the indictment; that is to say, such of the persons being desirous of purchasing tickets and chances in a lottery and tickets and chances in an enterprise similar to a lottery, and of investing small sums of money in gambling enterprises and in speculative enterprises and in oil lots and options on oil lots and interests in oil lots, as they the said Gourdain and Dalton, should induce to purchase what they called 'options' on lots and interests in the same, in the Wynn oil lots, situated in the parish of Wynn in the state of Louisiana.

The scheme was a scheme and artifice to defraud the said persons so intended to be defrauded, by promoting and conducting a fraudulent enterprise under the name of the Louisiana State Loan & Trust Company of New Orleans, La., by purchasing a large tract of land in Louisiana (1,000 acres of little value, namely, $1.50 per acre), and platting the same into a large number of small lots 20 feet square under the name of 'Wynn Oil Lands,' and by offering for sale and selling to the persons so intended to be defrauded options on and whole interest in one of said lots for $20, and fractional interests at proportional prices, and by sending such persons certificates to evidence the sale of options which would purport on their faces to be merely certificates of such options, but which certificates in general appearance would so closely resemble ordinary lottery tickets, and would contain such indicia and earmarks of lottery tickets and of tickets in an enterprise similar to a lottery, that they would cause those persons familiar with lottery tickets who should see the certificates to believe that they were either lottery tickets or tickets in an enterprise similar to a lottery; so that such persons would be caused to believe that the reference to options on oil lots was a mere subterfuge to evade the law against lotteries and like enterprises; and by issuing and sending monthly to the same persons to whom the certificates would be sent lists which would purport on their face to be reports of prices which had been bid for lots, which would resemble ordinary lottery lists, commonly published and sent out by the promoters of regular lotteries; and by causing all of the literature sent out by the said Gourdain and Dalton in conducting such enterprise to resemble in general appearance ordinary lottery literature. By means of such resemblance and similarity of the certificates to regular lottery tickets and the similarity of lists to regular lottery lists and the similarity of literature to regular lottery literature, and by the further means of false representations and false pretenses to the effect that such enterprise was conducted in a fair, square, and honest manner, and had paid sums of money to some of its patrons, to cause said last-mentioned persons to believe that said lottery, or enterprise similar to a lottery, had fair, square, and honest drawings and paid large and capital prizes; whereas, in truth and in fact, the said enterprise was not intended by them and would not be either a lottery or an enterprise similar to a lottery which had fair, square, and honest drawings and paid large and capital prizes, and the said certificates were not intended to be and would not be lottery tickets in an honest and fair lottery, nor in an enterprise similar to a lottery having fair and honest drawings and paying large and capital prizes; but, on the contrary, it was intended by the said Gourdain and Dalton that the enterprise should not be either a lottery or an enterprise similar to a lottery which had honest and fair drawings and which paid large and capital prizes; and it was then intended that said enterprise should not have honest and fair drawings and should not pay large and capital prizes. And the grand jurors present that they do not know and cannot state the method and manner by which said Gourdain and Dalton intended to determine and did determine which of the said persons purchasing the said certificates should be paid small prizes; but the grand jurors say the said Gourdain and Dalton did intend to pay and did pay to some of the persons who should and did purchase said certificates small prizes, ranging from $5 to $50, and that the small prizes were intended to be paid and were paid as a bait to induce those persons to whom they were paid and others of the said last-mentioned persons to purchase the said certificates. And that as a part of the said scheme and artifice said Gourdain and Dalton intended by the means aforesaid, that is to say, by causing those of the said persons intended to be defrauded, who were familiar with lotteries, etc., to believe that the said enterprise was either a lottery or an enterprise similar to a lottery, and that the certificates were either lottery tickets or tickets in an enterprise similar to a lottery, that had fair, square, and honest drawings and paid large and capital prizes, as aforesaid, and by paying small prizes, as aforesaid, to induce such last-mentioned persons, respectively, to purchase of them under the name aforesaid the said certificates, and to induce said last-mentioned persons to send and pay their moneys to the said Gourdain and Dalton under the said name of Louisiana State Loan & Trust Company. And that the said Gourdain and Dalton intended by this means to obtain possession of such money as should be so sent to them under the name aforesaid, or under any other name, for purchasing such certificates, and all or a part of the said money to convert to their own uses without rendering anything or service of value to said last-mentioned persons therefor, and thereby to defraud those said persons of the same. The exact part and amount of which said moneys they intended to convert to their own use are to the grand jurors unknown. And the said Gourdain and Dalton intended that a large majority of said persons who should purchase said certificates should receive nothing whatever of value in return for the moneys which they should pay for said certificates, and intended that what small amounts they should pay to such purchasers of said certificates as small prizes, as aforesaid, should be paid to said purchasers as a bait to induce them and other persons to purchase other of said certificates.

And the grand jurors further present that, as a part of said scheme and artifice to defraud, it was intended by said Gourdain and Dalton that said certificates, lists, and literature, so to be sent out by them, should cause the said persons intended to be defrauded to whom they were to be sent, who were not familiar with lotteries, lottery tickets and literature, to believe that the said enterprise, conducted under the name of the Louisiana State Loan & Trust Company, was an honest, fair, and legitimate enterprise for the sale of oil lots and options on the same. That for the purpose of causing the last-mentioned persons, so as aforesaid intended to be defrauded, to so believe as aforesaid, and for the further purpose of causing said last-mentioned persons to believe that large sums of money could be made by them, the said last-mentioned persons, by purchasing said options, they, the said Gourdain and Dalton, intended in the promoting and conducting of said enterprise to falsely represent and pretend to the last-named persons in effect that said lots were of great value, were located in an oil district, that oil had been discovered and found in that immediate district and locality; that large sums of money had been bid in good faith for numerous ones of said lots respectively, and numerous persons had ordered their respective interests owned by them in different ones of their said lots to be negotiated for large sums of money; that large sums of money had been made by different persons who had purchased options on said lots, and that there had been bid in good faith in cash prices for 1,194 of the lots mentioned an aggregate sum of $1,210,000, and prices for several lots mentioned, ranging from $300,000 a lot downward to $1,000.

And the grand jurors further present that, as said Gourdain and Dalton well knew, said lots were not of great value, nor located in a district where valuable oil had been found in paying quantities, and were...