Sandroff v. United States, 10549.

• Citation: 174 F.2d 1014
• Decision Date: 01 June 1949
• Docket Number: No. 10549.,10549.
• Parties: SANDROFF et al. v. UNITED STATES.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

174 F.2d 1014 (1949)

SANDROFF et al. v. UNITED STATES.

No. 10549.

United States Court of Appeals Sixth Circuit.

June 1, 1949.

Hugh McD. Ritchey, Cincinnati, Ohio (Hugh McD. Ritchey, Henry H. Chatfield, Nelson Schwab, Jr., Cincinnati, Ohio, and Wm. Henry Gallagher, Detroit, Michigan, on the brief), for appellants.

Vincent Fordell, Detroit, Michigan (Thomas P. Thornton, Vincent Fordell and Frank X. Norris, Detroit, Michigan, on the brief), for appellee.

Before SIMONS, MARTIN and MILLER, Circuit Judges.

MARTIN, Circuit Judge.

Appellants Sandroff and the Thomas Paper Stock Company, of which he was president, have appealed from a second conviction of unlawful conspiracy to violate paragraph (b) of section 205 of the Emergency Price Control Act of 1942, as amended, 50 U.S.C.A.Appendix, § 925(b), and section 1347.10 of Maximum Price Regulation No. 30, as amended, issued by the Price Administrator of the Office of Price Administration pursuant to the authority vested in him by the Act of Congress and by Executive Order No. 9250, 50 U.S.C.A.Appendix, § 901 note, issued by the President of the United States.

Upon the second trial jury's finding of guilt, the corporate defendant was by judgment of the court fined ten thousand dollars, the same fine imposed at the first trial, as was likewise the individual defendant. But Sandroff was sentenced to imprisonment for a year and a day at the second trial as against two years at the first.

This court reversed the former judgments of conviction and sentence and remanded the case for a new trial. Sandroff v. United States, 6 Cir., 158 F.2d 623. The direct ground of reversal was the trial judge's error in shutting off cross-examination of a Government witness, Charles Ginns, a co-conspirator, upon the question of promised or expected immunity and as to why he and his son, Jack Ginns, who, though named as co-conspirators in the indictment, had not been included as defendants therein. Upon the second trial, Charles Ginns testified that no immunity had been offered or promised him by the Government.

It was directed in our opinion that, upon retrial, the district court should explain to the jury the pertinent provisions of the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 901 et seq., and especially should read and explain to the jurors the language of the pertinent portion of section 1347.10 of Maximum Price Regulation No. 30. The appellants contend that there was inadequate compliance with this mandate. It is insisted that the court did not instruct the jury that an essential element of the crime charged was contemplated dealing in "commercially packed wastepaper." We think the trial judge complied with our directions and charged the jury correctly.

After reading certain sections of the Acts of Congress, he read to the jury section 1347.10 of Maximum Price Regulation No. 30 in its exact language: "(a) Every person who has been required under Revised Price Schedule No. 30 to keep records for inspection by the Office of Price Administration shall preserve such records for so long as the Emergency Price Control Act of 1942 shall remain in effect. (b) Every person making purchases or sales of commercially packed waste paper italics added shall keep for inspection by the Office of Price Administration for so long as the Emergency Price Control Act of 1942 shall remain in effect, complete and accurate records of each purchase or sale of waste paper showing the following: (1) Date of purchase or sale. (2) Name and address of the buyer or seller. (3) Grade of waste paper purchased or sold. (4) Quantity of each grade purchased or sold. (5) Prices paid or received. (6) Warranties, if any, given or received. Such records shall set forth separately the f. o. b. point of shipment price, the origin and destination of the shipment, the means of transportation used, the amount of the transportation charge, and any other amounts paid or received in connection with such sale." Section (c) of the regulation was then read to the jury.

The judge explained that the phrase "commercially packed" is defined in the regulation as follows: "`Commercially packed' means packed in machine compressed bales or by an optional method of packing where such method is allowed in the definition of a grade." He then added: "I don't think it is necessary for me to tell you what a bale is. All of you have seen bales of hay, bales of paper, and bales of clothes. There have been a lot of clothes drives; I believe a lot of you have been connected with clothes drives, the jurors were all ladies and you have had the clothes baled to keep them more compactly together; and the optional method would probably rest in the mind and at the discretion of the person who was to do the shipping."

Considering the charge in entirety, which embraced a reading of the indictment and the pertinent regulation with the foregoing explanation of it, the jury was sufficiently informed that the conspiracy charged related essentially to dealings in "commercially packed" waste paper. Moreover, no exception was taken to the charge on the point now made.

Appellants insist that the trial court erroneously charged the jury that Maximum Price Regulation No. 30 required Central Waste Material Co. to keep copies of the invoices covering the transactions in question. The point is not well grounded. What the court charged was that with respect to the regulation requiring records to be kept, copies of the invoices of the Central Waste Material Company are records if the jury found that they were kept in the ordinary course of business, as the law requires, were made at the time of the transaction or within a reasonable time thereafter, and if it "was customary that such records be made, and in business, by the people who kept them." The judge earlier had charged that the defendants would be guilty if they joined in a conspiracy to falsify the invoices of the Central Waste Paper Company so as not to show the true, correct, complete transactions. We find no merit in appellant's argument. Charles Ginns testified that appellant Sandroff arranged with him to invoice the paper to Sandroff's company at ceiling prices and to collect in cash on the side from his company ten dollars a ton above the ceiling for corrugated paper and six dollars a ton above the ceiling for newspaper.

This arrangement was carried out. Therefore, the consummated conspiracy was to have a false record of sales shown in the form of invoices at ceiling prices while the seller was actually to be paid in cash the agreed amounts in excess of the ceiling prices. On each shipment a copy of the invoice was sent to the Thomas Paper Company for its records, the original invoices being retained by the Central Waste Material Company. The invoices apparently were the only records kept by the Central Waste Material Company covering sales of waste paper to Sandroff's company. The proof is positive that Sandroff knew the invoice-records were falsified, inasmuch as he personally ordered payments in excess of the ceiling prices at the end of each week either to Charles Ginns or to his son, Jack. Moreover, as has been stated, this fraudulent method was agreed upon at the inception of the conspiracy.

Paragraph (b) of section 1347.10 of Maximum Price Regulation No. 30 requires that complete and accurate records of purchases and sales of commercially packed paper be kept for inspection by the office of Price Administration, but does not specify the type or form of record to be kept.

The statement which was made in our former opinion is again applicable: "From the evidence in the case, it is deducible that Ginns' regular manner of handling waste paper was to put the material into a `baler', that is, a machine for compressing paper into bales; that Sandroff knew how Ginns handled his paper; that all the invoices were, as a matter of fact, for ceiling prices for commercially packed waste paper; and that Sandroff, having knowledge of this fact, made the over-ceiling payments. All this would seem to bring the transactions within the regulations pertaining to `commercially packed waste paper'. From the foregoing review of the testimony, it would appear also that a reasonable inference can be drawn from all the circumstances of the case that Sandroff had guilty knowledge of the falsification of the records of transactions between his company and Ginns' Detroit firm. There was, therefore, substantial evidence upon which to submit the issues of fact to the jury. The district court committed no reversible error in denying the motion of appellants for a directed verdicts." 158 F.2d 627, 628.

In our former opinion, we detailed the evidence and will not repeat. There is no material difference or discrepancy in the evidence received at the two trials. Appellant Sandroff testified at the first trial, but did not take the stand or offer any evidence upon the retrial. His failure to testify at the second trial, now under review, left no missing link in the chain of circumstances which brought about his second conviction by jury verdict. The district court properly denied his motion for a directed verdict of acquittal.

Appellants assert that "the record fails to establish the essential requirements of venue and jurisdiction in the district court"; and that the trial court erroneously failed to charge the jurors that "in order to convict they must find that at least one alleged overt act in furtherance of the conspiracy had occurred within the trial district." They contend that no overt act in furtherance of the object of the conspiracy to falsify records was alleged and proved by competent evidence to have been committed within the trial district, the Eastern District of Michigan, Southern Division.

A mere reading of the...