Proffer v. United States

• Decision Date: 26 April 1961
• Docket Number: No. 18468.,18468.
• Citation: 288 F.2d 182
• Parties: Robert Lee PROFFER and Hollis Leon Adkison, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

288 F.2d 182 (1961)

Robert Lee PROFFER and Hollis Leon Adkison, Appellants, v. UNITED STATES of America, Appellee.

No. 18468.

United States Court of Appeals Fifth Circuit.

March 16, 1961.

Rehearings Denied April 26, 1961.

George E. Cochran, Irvin W. Shelman, Fort Worth, Tex., for appellants.

William L. Hughes, Jr., U. S. Atty., W. B. West, III, Asst. U. S. Atty., Fort Worth, Tex., for appellee.

Before TUTTLE, Chief Judge, and CAMERON and WISDOM, Circuit Judges.

TUTTLE, Chief Judge.

This is an appeal from the judgment and sentencing of the appellants on a jury verdict of guilty in a mail fraud and a Securities Act Section 17(a) indictment.¹ The two parties base their appeals on different grounds. Proffer principally contends that there was insufficient evidence connecting him with the activities of his co-defendants, who, other than Adkison, pleaded guilty, to support a verdict against him. Adkison contends primarily that he was denied the effective aid of counsel on the trial, and that therefore the conviction cannot stand on constitutional grounds, Johnson v. Zerbst, 304 U.S. 458, 58 S. Ct. 1019, 82 L.Ed. 1461.

We have carefully read the record references called to our attention by the parties, and we think it is plain that the evidence would amply permit a jury reasonably to find the defendants guilty beyond a reasonable doubt. See Riggs v. U. S., 5 Cir., 280 F.2d 949, 953.

The scheme to defraud charged in the indictment involved the setting up of a corporation called, "Teachers Professional Investment Company", purportedly to make loans to the members of the teaching profession in Texas. The indictment charged the appellants together with others, with selling stock in this corporation, and subsequently selling scholarships in "Professional Business University, Inc.," by false and fraudulent misrepresentations. Use of the mails was charged.

It is not disputed that many false representations were made in the sale of stock to the teachers and others who entrusted their money to appellant Proffer and his associates, nor is it disputed that Proffer actively engaged in the sale of the stock at a time that prospectuses and other literature contained materially false representations. Finally, it is conceded that as a result of his sales efforts, Proffer received over $6,000.00 in commissions and he also received a substantial sum in connection with an automobile transaction which this jury could find highly suspect.

The burden of Proffer's argument is that he was really the duped and not the defrauder. He says that he relied in good faith on the statements and promises of his colleagues and that there was no evidence to show that he was not really taken in by them.

This argument misses the basic point that, for whatever reason, he nevertheless did hold himself out as president of the company; he knew that he was needed as a well-known teacher to attract others of his profession; he permitted his reputation to be used by letting his corporate colleagues elect him president although he says he had none of the duties or privileges of a corporation president. This leaves him on the horns of a dilemma. Either he was president, and thus the jury could find him responsible for at least some of the numerous false representations or his intentionally holding himself out as president to further the sales of stock when he was in fact only a figurehead the jury could find amounted to a false representation. In his brief here, Proffer takes the second position. He says:

"Appellant Proffer\'s functioning as president would necessarily be false since the evidence showed that he was in realty a stock salesman. This was the agreement between appellant, Proffer, and those that selected him. Actions and testimony throughout the trial proved this."

There was sufficient evidence of his presiding at directors' and stockholders' meetings to have permitted the jury to reject this contention. However, if the jury had been bound to accept this proposition, then what Proffer is now saying is that he agreed to permit his name to be used in a dishonest manner in order to attract his teacher friends when in point of fact he was nothing but a salesman In effect he says that he and his corporate colleagues agreed that he should say to his fellow teachers, "I am the president of this corporation and I will be in control of its affairs," whereas, such was not the truth at all. We think it clear that the jury could find on this action alone that stock sales made on this representation were the result of a scheme to defraud.

There was much more, however, to show appellant Proffer's identification with the carrying on of sales based on false statements, such as the financial condition of the company, the number of shares outstanding, the number of shares he personally owned, and the connection with the enterprise in official capacities of persons who had not been consulted.

Appellant makes a strong argument to the effect that it was highly unlikely that he would throw away his good reputation and damage his personal friends and colleagues in the teaching profession by wilfully misstating the facts in order to make sales to them. The jury heard the testimony bearing on the good faith of the appellant in all that he did. As stated by the Court of Appeals for the Second Circuit in Linn v. United States, 234 F. 543, 552:

"While men may not be convicted for acts done in good faith, nevertheless schemes and devices to induce the making of stock investments which plainly would not otherwise be made, by the knowingly false representation of material facts and conditions, show a culpability which enthusiasm cannot justify or optimism excuse."

We conclude that there was ample evidence to support the jury's verdict as to Proffer.

No real contention is made here that there was not sufficient evidence to support a guilty verdict as to Adkison. His appeal is based primarily on the contention that he was not tendered the aid of counsel, and that he did not waive the right to counsel.

This contention presents somewhat of a novel question under the circumstances. The accused who makes it is himself a lawyer and the record of proceedings below are silent as to whether appellant was unable to afford counsel for his own defense and whether, if not, he was without knowledge, in spite of being a lawyer, of his right to have counsel assigned to him.

The government does not contest the point that an accused is entitled to counsel and that it is the court's duty to appoint a lawyer to aid him in his...