Linn v. United States

• Decision Date: 04 January 1916
• Docket Number: 2081.
• Citation: 234 F. 543
• Parties: LINN v. UNITED STATES.
• Court: U.S. Court of Appeals — Seventh Circuit

234 F. 543

LINN v. UNITED STATES.

No. 2081.

United States Court of Appeals, Seventh Circuit.

January 4, 1916

Rehearing Denied May 25, 1916.

Fred B Silsbee, of Chicago, Ill., for plaintiff in error.

H. R Harris, Jr., of Chicago, Ill., for the United States.

The indictment under which plaintiff in error was convicted has three counts.

The first charges him with devising a scheme or artifice to defraud Bailey, Reynolds, and Brockius, and a large class of other persons desirous of purchasing shares of stock in gold mines; that Linn was president and fiscal agent of the New Comstock Gold Mining Company, an Arizona corporation, with $10,000,000 capital stock, and that he exercised control and direction of the sale of the corporation's stock and of the money derived therefrom; that the scheme and artifice to defraud was to enter into correspondence through the post office establishment with the various persons to be defrauded, to induce them to buy shares of stock in said corporation at prices ranging from 10 to 25 cents per share and to defraud them out of whatever purchase price they so paid for such shares.

It is charged that in order to induce such persons to purchase such shares of stock, Linn was falsely to represent to such persons so intended to be defrauded that said corporation owned certain mining property in the state of Nevada, and that the title to such property was perfect; that a man had offered said corporation $5,000,000 for said property; that Linn thought the stock which he was offering at various prices ranging from 15 cents to 20 cents per share would be worth $5 per share within two years; that the assets of the corporation consisted of building, mining tools and equipment, and electrical machinery, and that only a little of the stock was being offered at that the company was equipping its mines with electrical machinery, and that in the mines there was approximately $25,000,000 of gold ore; whereas the indictment charges that each and all of such representations were then untrue, false, and fraudulent, and were known so to be by Linn, and it is charged that in attempting to execute such scheme and artifice to defraud, so devised or intended to be devised, Linn placed in the post office at Chicago, for sending through the mail, a letter, dated March 4, 1910, addressed to Bailey, which letter the count sets forth.

The second count charges that, for the purpose of executing the same scheme and artifice to defraud as is set forth in the first count, Linn mailed at Chicago a letter to Reynolds, as in the second count set forth. And the third count charges that pursuant to the same scheme and artifice to defraud, and to execute same, Linn deposited in the mail at Chicago a letter, set forth in said third count, to Brockius.

In the second and third counts the reference to the scheme or artifice to defraud, as set forth in the first count, is in the following language: 'So having devised the said scheme and artifice to defraud described and set forth in the first count of this indictment, as in that count described and set forth, for the purpose of executing the same, and for the purpose of defrauding by and through that scheme and artifice,' etc. It is not charged in the indictment that in and by the scheme any one of the persons referred to sustained any loss, or that Linn realized any profit.

The indictment was found under section 215 of the Criminal Code, which is directed against use of the mails to promote frauds. Demurrer interposed to the indictment was overruled. At the conclusion of the government's case, and again after all the evidence, peremptory motions were made on behalf of Linn to instruct the jury to find him not guilty. These were denied. The jury found him guilty, motion for new trial and in arrest of judgment were overruled, and judgment given on verdict, sentencing Linn to six months' imprisonment in the House of Correction and to pay a fine of $250. Further facts are stated in the opinion.

Before BAKER, KOHLSAAT, and ALSCHULER, Circuit Judges.

ALSCHULER Circuit Judge (after stating the facts as above).

On behalf of plaintiff in error, Linn, it is contended that his demurrer to the indictment should have been sustained as to the first count because it is not therein alleged that any of the stock was in fact sold, nor that by and through the fraud and artifice charged any one actually paid anything to Linn, nor that any one was in fact defrauded, nor that Linn thereby realized any profit.

In order to constitute the offense defined by section 215 it is not essential that the alleged fraudulent scheme or artifice met with success, or that gain or advantage accrued to the perpetrator, or loss to another. The offense is committed if, in the execution or furtherance of any such scheme or artifice to defraud, the post office establishment of the United States is employed as defined in said section 215. Grey v. United States, 172 F. 101, 96 C.C.A. 415; Stockton v. United States, 205 F. 462, 123 C.C.A. 530, 46 L.R.A. (N.S.) 936; United States v. Young, 232 U.S. 155, 34 Sup.Ct. 303, 58 L.Ed. 548; Weeber v. United States (C.C.) 62 F. 740.

Without commenting on the contention that the count fails to specify various other essentials of a valid indictment under section 215, we will say that the count advised the defendant with reasonable certainty of the nature of the accusation he had to meet, and this being sufficient, the count is good.

It was insisted, particularly on oral argument, that as to the second and third counts the demurrer should have been sustained because the alleged scheme to defraud is not set forth in these counts. It is well settled that it is not necessary in each count of an indictment to restate the scheme or artifice to defraud, which has been duly set forth in another count, but that apt reference in the counts (such as is here found in counts 2 and 3) to the scheme as it is so set forth in another count, is sufficient and proper. Foster v. United States, 178 Fed. 165, 101 C.C.A. 485; Crain v. United States, 162 U.S. 625, 16 Sup.Ct. 952, 40 L.Ed. 1097; Blitz v. United States, 153 U.S. 308, 14 Sup.Ct. 924, 38 L.Ed. 725.

The case of United States v. Hess, 124 U.S. 483, 8 Sup.Ct. 571, 31 L.Ed. 516, which is relied on as holding contrary, is not in point. There, in an indictment for using the mails to defraud, the count merely stated that the defendant, having devised a scheme to defraud, did in the execution of the scheme receive through the Post Office a certain letter which is as set forth in the indictment. There was no further statement of the fraudulent scheme, and no reference to any other count of the indictment which did set it forth, if indeed there was any such count. The count was very properly held bad for failure to state what was the fraudulent scheme.

We find no error in overruling the demurrer to the indictment.

On the trial a number of letters purporting to have been written by Linn, other than the letters set forth in the indictment, were offered in evidence on behalf of the government, and, against objection, were admitted. It is claimed that because these letters were not set forth or referred to in the indictment they were not competent evidence, and that the admission of them was error. That such letters are admissible in evidence as bearing upon the intent or state of mind of the defendant with reference to the alleged fraudulent scheme is well established by the decisions. Packer v. United States, 106 F. 906, 46 C.C.A. 35; Dillard v. United States, 141 F. 303, 72 C.C.A. 451; Rumble v. United States, 143 F. 772, 75 C.C.A. 30; Walsh v. United States, 174 F. 615, 98 C.C.A. 461.

Without here setting forth or analyzing the letters so admitted, it seems clear to us that upon the question of Linn's intent and of his state of mind with reference to the alleged fraudulent scheme, they had a decided bearing, and were competent as evidence thereon.

It is also urged against the admissibility of some of these letters that they were taken from plaintiff in error by a federal post office inspector without Linn's consent, and in violation of his right of protection against unlawful search and seizure. It appears from the uncontradicted testimony of witness Clarahan that he showed these letters to Linn and asked him if he (Clarahan) might have them, and that Linn said he might. Under these circumstances no question of improper search and seizure can be said to arise.

It is also contended that the record does not show the indictment letters to have been deposited in the post office or sent through the mail. Clarahan testified that Linn told him that he had mailed these letters in Chicago. Linn did not deny saying this to Clarahan, but in his testimony said that he told Clarahan that he supposed he had sent them through the mail, although he testified that if he so stated he must have been mistaken, since these particular letters were delivered by him in person to those to whom they appear to be addressed. Witness Brockius testified to receiving one of these letters by mail. Out of the many letters as to which Linn testified, most of them having been admittedly mailed, it might seem strange that he would remember these indictment letters, not differing materially from many others, to have been personally delivered. The jury was the proper judge of the weight of the evidence, and was warranted in concluding that the letters were in fact mailed.

The error alleged in the admission in evidence of the transcript of record of the foreclosure proceedings in the Nevada court of the mining property in question, is without merit. The fact that neither Linn nor his company were parties to these proceedings is not material. Before making the alleged...