Linden v. United States, 7566.

• Citation: 254 F.2d 560
• Decision Date: 09 April 1958
• Docket Number: No. 7566.,7566.
• Parties: Jerome D. LINDEN, Robert R. Baylis, Classified Business Directory, Inc., and Directory Listings, Inc., Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

254 F.2d 560 (1958)

Jerome D. LINDEN, Robert R. Baylis, Classified Business Directory, Inc., and Directory Listings, Inc., Appellants, v. UNITED STATES of America, Appellee.

No. 7566.

United States Court of Appeals Fourth Circuit.

Argued March 3, 1958.

Decided April 9, 1958.

COPYRIGHT MATERIAL OMITTED

James S. Morrow, Jr., Baltimore, Md. (Samuel Panzer, Brooklyn, N. Y., on the brief) for appellants.

Martin A. Ferris, Asst. U. S. Atty., and Leon H. A. Pierson, U. S. Atty., Baltimore, Md., for appellee.

Before PARKER, Chief Judge, SOBELOFF, Circuit Judge, and WILLIAMS, District Judge.

SOBELOFF, Circuit Judge.

The two individuals and two corporations who prosecute this appeal from the United States District Court for the District of Maryland were convicted of violating the Mail Fraud statute¹ and the Aiding and Abetting statute.² The appellants challenge the sufficiency of the evidence to sustain their conviction, and also allege error in the admission of certain testimony.

The indictment charges that the defendants "devised and intended to devise a fraudulent scheme and artifice * * * to induce those intended to be defrauded to purchase listings or advertisements in a book published by the defendants known as Maryland Classified Business Directory by means of captious, deceptive and misleading solicitations designed by the defendants to be misinterpreted by the recipients thereof as bills or statements of accounts due for listings or advertisements previously contracted for and maintained by those intended to be defrauded in the classified section of their local telephone directory." It is also alleged that in furtherance of the scheme the defendants caused checks to be mailed to them by their victims.

Having decided to go into the business of publishing an annual business directory for Maryland, the District of Columbia, and parts of Virginia and West Virginia, the individual defendants, Jerome D. Linden and Robert R. Baylis,³ in July of 1955, rented an office in the Court Square Building in Baltimore. Three months later they formed the two corporate defendants, Classified Business Directory of Maryland, Inc., and Directory Listings, Inc.

No complaint is made that the defendants failed to publish their business directory, for they did publish it; the essence of the charge is the deceptive manner in which subscriptions for listings were procured.

Directory Listings, Inc. obtained copies of the classified telephone directories for Maryland, metropolitan Washington, D. C., and Richmond, Virginia. In New York, the home of Linden and Baylis, this company employed typists to fill out certain forms and to address envelopes.

Two basic forms were used and are here reproduced:

It is the Government's contention that the forms appear to be invoices, rather than solicitations,⁴ and that the illusion was furthered by the manner in which the typists, under instructions from the defendants, filled in the forms before they were mailed to the intended victims.

The defendants' forms were sent only to advertisers in the telephone company's classified telephone directory. Under the heading of "classification," the precise classifications and sub-classifications of business enterprises which appeared in the telephone directory were typed on the forms. Moreover, the recipients' names, addresses, and telephone numbers were typed on the forms as they appeared in the telephone directory, copied even as to the abbreviations employed by the telephone company.

While, on their faces, the blank forms give a choice as to kinds of listings, the typists were directed to fill in in advance the description of the proposed listing to correspond precisely with that which the recipient had ordered in his telephone advertising. Thus, if a bold type listing appeared in the telephone book, the defendants' typists were directed to indicate the same listing on the forms they were preparing for mailing.

The second of the forms employed by the defendants had a small space designated as "Display Ad," and although the typists were furnished with lists containing different rates according to the size of the recipient's advertisement in the telephone directory, the space was filled in before mailing. The prospective advertiser was not quoted prices for other sizes, and he was not asked to make a choice between alternatives.

In the very first form sent the prospective customer a sense of urgency, further suggesting to the recipient that there was a pre-existing relationship between him and the sender, was added by printing in red ink across the face of the paper in letters much larger than any others on it, the words, "Final Notice." While, after a time the defendants abandoned the use of this phrase, there appeared in its stead the boldly printed statement, "Listing Will Not Appear Unless Payment Is Made Now," or "Listing Will Not Be Published Unless Payment Is Made."

Stamped in red across the face of many of the forms mailed was the title of the telephone directory from which the recipient's name had been taken. For example, forms sent to people listed in the Richmond telephone directory had the word "Richmond" stamped on them, and forms sent to those listed in the telephone company's "Catonsville Arbutus Elkridge and Vicinity" directory had that group title stamped on them. The geographical grouping made by the telephone company was adopted without deviation by the defendants.

On the reverse side of the forms, printed in grey ink, was information which, if carefully read, would have enabled the recipient to discover that he was being solicited for an advertisement in a new business directory. Also enclosed in the envelope was a leaflet, called in the testimony a brochure, much smaller than the form, which, if carefully read, would also have revealed that the defendants' enterprise was not identified with the telephone company's classified directory.

Each addressee received, in addition to the material already mentioned, a return envelope addressed to "Classified Business Directory of Maryland, Court Square Building, Baltimore 2, Maryland," the second of the corporate appellants.

The prosecution argues that the defendants went to considerable pains to avoid alerting the recipients of the forms to the true identity of the senders. It is pointed out that although the forms and envelopes were typed in New York, and there stamped with a postage meter obtained from the Baltimore Post Office, they were shipped from New York to Baltimore by railway express or parcel post, and then placed in the mail in Baltimore so that they would carry the postmark of that city.

Approximately 104,000 of the above-described forms were deposited in the mails in Baltimore on October 14, 1955 to persons with whom the defendants had no previous contact.

As supporting proof of the defendants' fraudulent intent, the Government introduced the testimony of Post Office Inspector Mitchell Glassman, who told of the defendant Linden's having conducted a similar operation in Cleveland, Ohio, a few months before the Baltimore venture was entered into. After the "advertising literature" used in Cleveland was disapproved by him, Glassman testified, Linden submitted a voluntary affidavit of discontinuance and left the city. Baylis, who had been Linden's accountant in Cleveland, there is reason to believe, knew of the difficulties which led to the cessation of the latter's activities in that city.

A sample of the form used by Linden in Cleveland was offered at the trial. It contains a specific warning that the directory is "Not a Telephone Company Publication." The postal inspector in Cleveland had admonished Linden that even this caution would not save the scheme from illegality. The prosecution attaches significance to the fact that in Baltimore even this much candor was abandoned.

Over the defendants' objections, approximately a dozen recipients of the forms testified that they remitted checks to the defendants in the belief that the papers they had received were invoices for their previously ordered advertising in the telephone company's classified directory. Moreover, Post Office Inspector A. J. Murray related that several times he visited the defendants' offices in the Court Square Building and warned them that many people had been confused into thinking that they were being billed for telephone company advertising, and Linden replied that he "couldn't control the thinking of people," that while he regretted it "if they believed this was a statement of charges for the yellow pages of the telephone listing," he was "not responsible for any conclusion they might infer."

The general manager of the Better Business Bureau of Baltimore told of having informed Linden that the Bureau had received numerous protests "concerning the invoices."

Although Linden and Baylis did not testify at the trial, they had earlier testified before the Grand Jury and admitted receiving "complaints" that persons were being misled. The latter freely admitted that in addition to the complaints, they had even received, from time to time, checks made out to the Chesapeake and Potomac Telephone Company. They also received letters from lawyers demanding refunds to clients who claimed that they had sent checks to the defendants in the belief that they were paying for advertisements in the telephone company's classified directory.

Despite the storm of protests, the defendants persisted in mailing their forms until the indictment was returned on June 25, 1957.

To negative criminal intent the defendants called to the witness stand the Washington attorney who had represented them in their business dealings. He testified that he had been engaged in March of 1955 by Linden to speak to Post Office Solicitor Manherz about Linden's troubles in Cleveland. He related that Manherz voiced objection to the use of the words "Classified Directory," and also objected that in his experience certain people...