Gusow v. United States, 7668-7670.

• Decision Date: 25 June 1965
• Docket Number: No. 7668-7670.,7668-7670.
• Citation: 347 F.2d 755
• Parties: Roy E. GUSOW, Appellant, v. UNITED STATES of America, Appellee. Melvin L. SHAPIRO, Appellant, v. UNITED STATES of America, Appellee. Donald H. ORANSKY, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

347 F.2d 755 (1965)

Roy E. GUSOW, Appellant, v. UNITED STATES of America, Appellee.

Melvin L. SHAPIRO, Appellant, v. UNITED STATES of America, Appellee.

Donald H. ORANSKY, Appellant, v. UNITED STATES of America, Appellee.

Nos. 7668-7670.

United States Court of Appeals Tenth Circuit.

June 25, 1965.

V. G. Seavy, Jr., Denver, Colo. (Anthony F. Zarlengo and Richard A. Zarlengo, Denver, Colo., on the brief), for appellants Roy E. Gusow and Melvin L. Shapiro.

O. John Rogge, New York City (Leslie A. Gross, Denver, Colo., on the brief), for appellant Donald H. Oransky.

Milton C. Branch, Asst. U. S. Atty., Denver, Colo. (Lawrence M. Henry, U. S. Atty., Denver, Colo., on the brief), for appellee.

Before PICKETT and BREITENSTEIN, Circuit Judges, and CHRISTENSEN, District Judge.

PICKETT, Circuit Judge.

The appellants, Gusow, Shapiro and Oransky, were jointly indicted, tried and convicted on eight counts of using the mails to defraud, in violation of 18 U.S. C. § 1341. The sole issue raised on this appeal is whether the appellants were entitled to a judgment of acquittal for lack of substantial evidence to show either a scheme or the requisite intent to defraud.

The crime of mail fraud is broad in its scope, and may ordinarily be shown by proof of the intentional devising of a scheme to defraud and that the mail was used in furtherance of the scheme.¹ Linden v. United States, 4 Cir., 254 F.2d 560; Deschenes v. United States, 10 Cir., 224 F.2d 688; United States v. Baren, 2 Cir., 305 F.2d 527. The scheme is one to defraud if it is reasonably calculated to deceive persons of ordinary prudence and comprehension. Silverman v. United States, 5 Cir., 213 F.2d 405, cert. denied 348 U.S. 828, 75 S.Ct. 46, 99 L.Ed. 653; United States v. Baren, supra. Direct proof of willful intent is not necessary. It may be inferred from the activities of the parties involved. Henderson v. United States, 6 Cir., 202 F.2d 400. Not only are the patently false statements prohibited, but also those made with a reckless indifference as to whether they are true or false. Babson v. United States, 9 Cir., 330 F.2d 662, cert. denied, 377 U.S. 993, 84 S.Ct. 1920, 12 L.Ed.2d 1045; West v. United States, 10 Cir., 68 F.2d 96. Similarly, the deceitful concealment of material facts may also constitute actual fraud. Cacy v. United States, 9 Cir., 298 F.2d 227. Moreover, the deception need not be premised upon the verbalized words alone. The arrangement of the words, or the circumstances in which they are used may convey the false and deceptive appearance. Linden v. United States, supra.

This prosecution grew out of the activities of the appellants in soliciting applications from persons interested in foreign or overseas employment, primarily in the construction trades. The usual course of operation by the appellants, doing business in Denver, Colorado as "Overseas Application Services", (O.A. S.) began with the insertion of an advertisement in a newspaper of general circulation, indicating that applications of qualified men and women would be accepted or prepared for employment overseas.² The advertisements each stated times and dates when and where interviews would be conducted in the area.³ The interviews were handled and applications taken by the appellants personally and by their "salesmen" in either a hotel or motel suite rented for that purpose. When completed, the applications were sent to the O.A.S. Denver office where copies were prepared and mailed to ten companies purportedly engaged in or contemplating overseas projects. For this an applicant was charged a total of $22.50, or $2.25 per application.⁴

When an applicant appeared at the place designated for the interview, he was first handed a copy of a two-page "General Information on Overseas Jobs" bulletin to read. This information sheet contained generalized statements regarding the policies of the companies doing work overseas, and working conditions. It also contained numerous references to pay and monetary rewards of working overseas.⁵ After reading and returning the information sheet, the applicant, if he so desired, would be given an "application" form to be filled out, following which he would then be interviewed by one of their "salesmen." The application form is complete on one side of a letter-size page. It does not indicate that it is an application of O.A.S., and it seeks only the most rudimentary personal information. The 10 copies when typed at Denver for mailing to the companies, of course could not be signed by the applicant.

The major portion of the "interview" appears to have been devoted to obtaining the applicant's signature upon a document referred to as a "contract." The contract was on a page separate from the application, and purported to set forth the whole agreement between O.A. S. and the applicant. The contract carries the heading "Overseas Application Services", followed by a Denver post office box address, and date space. Next following are three spaces in which the applicant listed in order his preference of the areas of the world in which he desired employment. The body of the agreement sets forth the undertakings of the parties, and provides for the reproduction and distribution of the applications by O.A.S. and recites the obligation of the applicant to pay. Other statements contained in the body of the agreement may be characterized as exculpatory in nature.⁶ It concludes with spaces for the signature of the "Authorized Representative of O.A.S." and the applicant. Directly under the space for the applicant's signature is the statement: "I understand that I am not obligated to accept any employment which might arise through the efforts of O.A. S." It was also stated in the contract, and each applicant was told, that they would receive from O.A.S. a list of ten companies to which the application was sent. It appears that there were four basic lists of companies, and that the applications were sent to the companies listed on one of the four. There was no proof that O.A.S. did not duplicate or send the number of applications it represented would be sent.

The applicants who were called as witnesses for the government testified, in substance, that they were led to believe that it was O.A.S. which was hiring; that O.A.S. was representing directly the companies which were hiring; that probabilities of getting jobs were good; that salaries were exceptionally good; that income would be non-taxable; and that other applicants had been placed. Most applicants also indicated that they were told at the interview by the O.A.S. representative that they had good qualifications and that they would no doubt be hearing from the companies soon.⁷

Representatives of the companies to which the applications were sent testified without significant variation that all of the applications were received by them on the same day, or over a very short period of time; that there was nothing to indicate they came from O. A.S. and that there was no return address; that the applications could not be used by the company; that they used no mail application company and could not use the services of such a company; that they never heard of O.A.S.; that they hired only supervisory personnel or highly-trained technicians to send overseas, and never common tradesmen, semiskilled or skilled labor; that no one was hired or even considered for a job on the basis of these applications; and nearly all stated that all of these applications were thrown away, many without being opened. The representative of one company stated that at the time the applications were received the company was not hiring for overseas work and that, in fact, most of its work was domestic.

The appellants each testified in his own behalf regarding the manner of operation and their good intent in conducting the operation. Oransky said the applicants were told that there was a demand for workers because he felt it was true. However, he also stated that O.A.S. had no information from any of the companies regarding the necessary qualifications for employment by them. He stated that O.A.S. had no direct contact with any of the companies and that their list, which was made up by excerpting the names of companies from trade publications, was the only connection. He stated that if he felt an applicant was qualified, he would be told that he might be hearing from the companies, and that he should not accept the first job offer. Oransky said that he never told any applicant that O.A.S. had no direct contact with the companies.

Shapiro testified that none of the companies were ever contacted to determine the authenticity of the periodical listings in the trade publications from which...