Sachs v. United States

• Decision Date: 18 June 1969
• Docket Number: No. 19357.,19357.
• Citation: 412 F.2d 357
• Parties: Louis SACHS and Ralph Sachs, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

412 F.2d 357 (1969)

Louis SACHS and Ralph Sachs, Appellants, v. UNITED STATES of America, Appellee.

No. 19357.

United States Court of Appeals Eighth Circuit.

June 18, 1969.

Edward Bennett Williams, Washington, D. C., for appellants; Harold Ungar, Sandra Terzian, Washington, D. C., Morris A. Shenker and Bernard J. Mellman, St. Louis, Mo., on the briefs.

Roger Edgar, Sp. Asst. U. S. Atty., St. Louis, Mo., for appellee; James E. Reeves, U. S. Atty., and Veryl L. Riddle, Sp. Asst. U. S. Atty., on the brief.

Before BLACKMUN, GIBSON and BRIGHT, Circuit Judges.

GIBSON, Circuit Judge.

Ralph and Louis Sachs appeal from judgments of conviction entered in the United States District Court for the Eastern District of Missouri where a jury found each defendant guilty of six counts of using the mails in furtherance of a scheme to defraud in violation of 18 U.S.C. § 1341 and one count of using an assumed name while so using the mails in violation of 18 U.S.C. § 1342. Each defendant was sentenced to ten years — concurrent five-year terms on four of the counts, to be followed by five-year concurrent terms on the remaining three counts.

We affirm the judgments of conviction.

The Sachs brothers and their wives were the principal stockholders, directors and officers of a group of small loan companies, three of which are involved in this case. Louis and Ralph Sachs were the president and secretary-treasurer, respectively, of Mid-Continent Finance Corporation encompassing the following business entities: the home office at St. Louis, Missouri, d/b/a Allied Finance Company; a wholly owned subsidiary, Kennett Finance Company, at Kennett, Missouri; and two branch offices in Tennessee. In addition, defendants operated the Clayton Insurance Agency from the home office as an adjunct to their money lending business. Between 12 and 15 people, in addition to the defendants, were employed at the home office.

The transactions involved in this case followed a pattern. When Mid-Continent held a customer's note, either through a direct loan or by purchase from a retail establishment that had extended credit to the customer, the customer was afforded the opportunity of purchasing credit life insurance. Mid-Continent established a business relationship with National Home Life Assurance Company and the Equitable Life Assurance Society, so that Clayton Insurance, as agent, could write credit life policies. Clayton Insurance retained 50 per cent of the premiums of each policy as commissions. The credit life insurance policy was written for the anticipated term of the loan to insure repayment in the event of the borrower's death. If the borrower were delinquent, so that the loan ran longer than expected, the insurance would lapse unless a new policy was purchased at an additional premium for the additional anticipated term. If the borrower prepaid the loan, a refund would be due on the premium for the unused term of the policy.

Two types of credit life insurance policies were written. One was a straight term policy on the borrower's life for the full amount of the loan for the projected period of the loan. The principal amount did not decline as payments were made. Upon the death of the insured borrower, the insurance company would pay the full amount of the policy. An amount equal to the unpaid balance on the loan would be paid to the lender, and presumably the balance to the borrower's designated beneficiary or his estate. The second type of policy was the reducing or declining balance type which paid to the lender upon the borrower's death only the amount of the unpaid balance of the loan. Credit life policies were issued automatically upon application without reference to age, health, or any inquiry concerning the insurability of the borrower, the only requirement being the payment of the premium, the amount of which was fixed by a predetermined formula.

The defendants testified and admitted a double collection of six loans. When the borrower died the amount of the balance remaining on the loan was collected twice — from the insurance company, under the credit life policy on the borrower's life, and again from the estate or co-maker of the borrower or else the excess insurance proceeds were appropriated by the defendants. In three of the loans the borrower had purchased a full amount credit life insurance policy and, although Mid-Continent collected the full amount of the policy when the borrower died, the widow beneficiary never received her share.¹ In two of the loans, the borrower had purchased a declining balance policy and, although Mid-Continent received the outstanding balance from the insurance company when the borrower died, the collection department continued collecting from the surviving widow.² In the remaining loan, the borrower had refused to purchase credit life insurance. Allied Finance, without the knowledge of the borrower or the co-makers, purchased a declining balance policy on the borrower's life, and after the borrower's death collected insurance proceeds in the amount of the balance outstanding on the loan. Allied also collected the balance of the loan from the borrower's widow.³ As to this double collection, the defendants freely admitted responsibility on appeal⁴ contending they proceeded on the advice of their attorney and that such a double collection is legal under Missouri law. As to the other five double collections, the defendants attributed each incident to innocence or inadvertent clerical error.

The jury found the defendants guilty of fraud in each of the above double collections. In addition, the jury found each guilty of using an assumed name in the promotion of a scheme to defraud. The defendants did not deny that assumed names were used on collection letters, but contended that such was a common office practice with collectors at Allied Finance. Also, they unsuccessfully attempted to disassociate themselves from the practice by placing the onus on their employees.

On this appeal defendants urge (1) motions for acquittal should have been granted as to Count II (the Costello loan), as collection of the amount of the loan from both Mrs. Costello and the insurance company was legal under Missouri law; (2) denial of the motions for acquittal as to Count II requires reversal as to the other counts as well, as the government argued to the jury that defendants' admission of the facts involved in Count II was an admission of the scheme-to-defraud element of the offenses charged in all of the counts; (3) the trial court erred in failing to give defendants' requested "accomplice instruction" and (4) defendants' requested "interested informer" instruction; and (5) motions for acquittal should have been granted as to Count VIII, defendants' use of assumed names in the alleged scheme, since there was no evidence defendants were responsible for the particular uses of the names charged, and, even so, there was no showing that the use of assumed names materially contributed to the alleged fraudulent scheme.

At the outset we note the well-established rule that where concurrent sentences are imposed on several counts and the sentence does not exceed that which could have been imposed under a single count, the judgment may be affirmed if the conviction on any of the counts is valid. Roviaro v. United States, 353 U.S. 53, 59, 77 S.Ct. 623, 1 L.Ed.2d 639 n.6 (1957); White v. United States, 399 F.2d 813, 815 (8 Cir. 1968); Jacobs v. United States, 395 F. 2d 469, 473 (8 Cir. 1968); Cave v. United States, 390 F.2d 58, 70 (8 Cir. 1968), cert. denied 392 U.S. 906, 88 S.Ct. 2059, 20 L.Ed.2d 1365.

In this case, concurrent sentences were imposed upon each defendant with regard to four of the counts — Count I, the Burress loan; Count III, the Smith loan; Count V, the Lewis loan; and Count VIII, use of assumed names on dunning letters sent to Mrs. Burress. Additional sentences were imposed with respect to three of the counts — Count II, the Costello loan; Count IV, the Downs loan; and Count VI, the Arnold loan — concurrent as to each other but consecutive as to the sentences on the other four counts. Thus, it must merely be determined that a conviction was proper upon at least one count in each group in order to affirm the judgments. Atkinson v. United States, 344 F.2d 97, 98-99 (8 Cir. 1965), cert. denied 382 U.S. 867, 86 S.Ct. 141, 15 L.Ed.2d 106. We will, however, discuss more than two of the counts in order to cover all issues raised by defendants, but not all of the counts.

This being a jury case and the verdict having been in favor of the government and against defendants, the general rule is that the evidence must be viewed in a light most favorable to the government as the prevailing party and all reasonable inferences that tend to support the verdict of the jury must be accepted as established. Hanger v. United States, 398 F.2d 91, 108 (8 Cir. 1968); Jacobs v. United States, 395 F. 2d 469, 472 (8 Cir. 1968); Kayser v. United States, 394 F.2d 601, 604 (8 Cir. 1968), cert. denied 393 U.S. 919, 89 S.Ct. 250, 21 L.Ed.2d 206.

With the above rules in mind, we examine the evidence with regard to one of the counts in each group and the Costello loan to determine if the jury could validly find the defendants guilty of mail fraud. We note that the use of the mails in carrying out the alleged scheme to defraud is apparent and is not in issue. Also, all of the double collections of insurance proceeds and loan balances, including insurance payments belonging to borrowers, are well established and in fact admitted. Defendants in their reply brief perceive the issue as: "The material issue here was not whether the double collections took place, but whether the Sachs brothers were guilty participants in them."

COUNTS I and IV

Dorothy Burress (Count I) of Dunkirk, Indiana, testified that she and her husband borrowed $700-$800 in the summer of 1962 to finance a home improvement. The home loan contract was acquired by...