Sanders v. United States

• Decision Date: 28 October 1969
• Docket Number: No. 25043.,25043.
• Citation: 415 F.2d 621
• Parties: John B. SANDERS, Jr., Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

415 F.2d 621 (1969)

John B. SANDERS, Jr., Appellant, v. UNITED STATES of America, Appellee.

No. 25043.

United States Court of Appeals Fifth Circuit.

August 27, 1969.

Rehearing Denied October 28, 1969.

COPYRIGHT MATERIAL OMITTED

Stanley Jay Bartel, James L Guilmartin, Miami, Fla., for appellant.

E. V. Boagni, Asst. U. S. Atty., Shreveport, La., Marvin R. Loewy, Special Atty., Dept. of Justice, Washington, D. C., Edward L. Shaheen, U. S. Atty., Arthur F. Mathews, Howard S. Jacobs, Attorneys, United States Securities and Exchange Commission, Washington, D. C., of counsel, for appellee.

Before GEWIN and BELL, Circuit Judges, and BOOTLE, District Judge.

BOOTLE, District Judge:

John B. Sanders, Jr., appeals from his conviction under 15 U.S.C.A. § 77q(a) (the use of any means or instruments of transporation or communication in interstate commerce, or use of mails, in furtherance of a scheme to defraud in the sale of securities), 18 U.S.C.A. § 1341 (use of mails in furtherance of a scheme to defraud), and 18 U.S.C.A. § 371 (conspiracy to commit the two above mentioned offenses). He presents eight issues for review. After careful consideration we find all these issues without merit. We affirm.

We shall state and consider these eight issues seriatim.

Key Man System

Appellant asserts that the jury selection process was illegal and that the court clerk and the jury commissioner used the so-called "Key Man" system. In support of this contention he proved in the court below that indeed the "Key Man" system was used; that the clerk and commissioner had contacted in excess of 75 people in the six parishes comprising the court division asking them to submit lists of prospective jurors, required each prospective juror to complete a questionnaire, excused all persons entitled to a statutory excuse plus doctors, lawyers, nurses, school teachers and ministers pursuant to local court rules, and had placed in the venire box the names of those remaining deemed qualified. No evidence was adduced or showing made with respect to the composition of the jury box, or of the grand jury or petit jury venire from which the jurors were drawn or to be drawn for appellant's trial. No showing was made that any racial, social, economic or other class of group was excluded systematically or otherwise either intentionally or non-intentionally. Nor was it shown that the jury selectors used wrong standards or inadequate sources. Appellant apparently proceeds on the theory that the "Key Man" system is illegal "per se". We do not perceive that to be the law. See Mobley v. United States, 379 F.2d 768, 773 (5th Cir. 1967).¹ Smith v. Texas, 311 U.S. 128, 61 S.Ct. 164, 85 L.Ed. 84 (1940) relied upon by appellant is inapposite. In that case there was an intentional and systematic exclusion of Negroes from jury service because of race.

Duplicity

Appellant's contention that there was duplicity in the conspiracy count, that this count charged, and that the evidence proved, two conspiracies, is without substance. The indictment is in twenty-five counts. Counts 1 through 12 charge securities violations, Counts 13 through 24 charge mail fraud violations, and Count 25 charges a conspiracy to commit the two just mentioned offenses. The first seventeen paragraphs of Count 1, which are by reference made common to all of the twenty-four substantive counts and to the conspiracy count, Count 25, as well, allege in great detail and specificity a single plan or scheme to defraud the alleged victims. Thus all counts including the conspiracy count allege that this scheme lasted and continued from on or about November 22, 1957 until on or about March 15, 1965. The indictment named Sanders and six other defendants describing them generally as follows: Sanders as the promoter, organizer and controlling figure in a group of corporations referred to generally as the Underwriter's group; Charles A. Landry as vice-president or other officer or director in many of these corporations and having charge of their records and assisting Sanders in their management and direction; Thomas M. Moss, Jr., a Certified Public Accountant doing the accounting work for these companies; Irwin L. Gitz and Ellis S. Joubert, Jr., owners of Gitz & Joubert Associates, Inc., which offered, sold and distributed some of the securities involved; and Stephen J. Dinneen and Joseph Ryan Missett, Managing Director and Chairman of the Board respectively, and controlling stock holders of Lords Bank and Trust Company Limited, a Bahamian corporation, with its statutory office in Nassau, Bahamas, but operating out of Miami, Florida. The scheme alleged in brief was that the defendants would through misrepresentations of various sorts defraud the public by selling worthless securities of these corporations. Significantly paragraph 13 of the scheme alleged in Count 1 charged in effect that for the purpose of avoiding detection of the scheme to defraud, of allaying fear of losses by investors from securities sold, of obtaining additional funds from investors, of concealing from investors the insolvency of the Underwriters Group corporations, and of lulling investors into a false sense of security, certificates of deposit of Lords Bank and Trust Company were obtained by Sanders from Dinneen and Missett and were offered and sold to investors partly for cash and partly in exchange for worthless securities already sold to such investors. All seven defendants are charged in all twenty-five counts except that Dinneen and Missett are charged in only substantive counts 1, 2, 3, 13, 14, and 15 and in the conspiracy count. The dates alleged in these substantive counts run from September 25, 1962, to June 4, 1964, whereas the earliest substantive offense charged against Dinneen and Missett is February 17, 1964, Count XV. And whereas the thirty overt acts alleged range from May 19, 1959 to June 2, 1964, the earliest overt acts charged against Missett and Dinneen is January 15, 1964, Overt Act 24. Thus it is apparent from these dates and from paragraph 13 of Count I above mentioned that Missett and Dinneen representing this alleged offshore bank are alleged late comers into the conspiracy. Because of this belated entry or appearance upon the scene of Missett and Dinneen, Sanders attacked the conspiracy count prior to trial as alleging two conspiracies rather than one and therefore as being duplicitous. Apparently he contended in the court below also and for the same reason that the substantive counts charge two schemes to defraud, one by selling securities of the Underwriters Group and another by selling the certificates of deposit of the offshore bank. Without stopping to inquire whether there could be any valid objection to trying this sole defendant Sanders, by himself, for as many separate schemes as the grand jury saw fit to charge him with we fully agree with the trial court that the indictment alleges only a single plan or scheme to defraud the alleged victims, that according to the indictment Missett and Dinneen joining the group late became participants in the original scheme and added a new commodity to sell, the certificates of deposit of Lords Bank. We agree with the trial court also that the indictment in Count 25 charged only one conspiracy. See United States v. Sanders, 266 F.Supp. 615 (W.D.La.1967). The trial court correctly ruled on the pre-trial contentions and now the record shows that under the evidence the jury was abundantly authorized to find that there was only one scheme and one conspiracy. See Baker v. United States, 156 F.2d 386 (5th Cir. 1946). Moreover, if there had been more than one scheme or conspiracy proved at the trial Sanders could not complain. Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946) does not reach this case. It holds that it is unfair to indict and try as one conspiracy as many as eight separate and distinct conspiracies where the defendants on trial are not connected in any way as among themselves, though all of them are connected and connected only with a central figure who had pleaded guilty and is not on trial. The central figure in that case was not Kotteakos or any of his codefendants on trial but was one Simon Brown. In the case at bar Sanders was the only defendant on trial, severances having been granted to all others, and the jury was fully justified in finding that there was only one scheme and only one conspiracy and he was the central figure in it. Even if the jury had concluded that there were two schemes and two conspiracies as Sanders contends unquestionably under the evidence he was the central figure in each. He was not harmed or prejudiced in any manner. It is not contended that he was surprised at all and the plea of former conviction is available to him should he ever be again prosecuted for any matters alleged in this indictment. Berger v. United States, 295 U.S. 78, 83, 79 L.Ed. 1314, 1318. This court has stated in Jolley v. United States, 232 F.2d 83, 88 (5th Cir. 1956) and repeated in Parmenter v. United States, 279 F.2d 151 (5th Cir. 1960):

"Under the evidence in this case, we think that it was for the jury to say whether there was any conspiracy and if so, whether one or more than one. If more than one conspiracy was proved, of at least one of which the appellant was guilty, it is clear that there was no variance affecting his substantial rights."

Re-indictment of Codefendants

We reject out of hand Sanders' contention that the Government is now estopped to deny duplicity in this case by reason of the fact that after his conviction the grand jury re-indicted Missett and Dinneen on a "pared down" version of the conspiracy so as to charge the Nassau conspiracy alone and then dismissed or dropped insofar as those two defendants are concerned the charges in the indictment under which Sanders was convicted. Incidentally, the briefs state that Missett and Dinneen were convicted under the superseding indictment. That...