Shea v. United States

• Decision Date: 13 October 1916
• Docket Number: 2818.
• Citation: 236 F. 97
• Parties: SHEA et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Sixth Circuit

236 F. 97

SHEA et al. v. UNITED STATES.

No. 2818.

United States Court of Appeals, Sixth Circuit.

October 13, 1916

[Copyrighted Material Omitted]

H. W Fraser, of Toledo, Ohio, for plaintiffs in error.

John S Pratt, Asst. U.S. Atty., of Toledo, Ohio.

Before KNAPPEN and DENISON, Circuit Judges, and SESSIONS, District judge.

KNAPPEN Circuit Judge.

Plaintiffs in error complain of their conviction upon indictment, under section 37 of the Criminal Code of the United States, for conspiracy to use the United States mails in pursuance of a scheme to defraud, condemned by section 213 of the Criminal Code (Comp. St. 1913, Sec. 10383).

On the trial the following facts appeared without dispute:

On August 14, 15, and 16, 1914, there was published in a Detroit newspaper the following notice:

'Gentleman will invest from $30,000 to $50,000 in modern fertile farm; must be unincumbered. State size and acreage and full particulars in first letter. Owners only. Agents need not answer. Address Box R-20, News.'

The advertisement was read on August 16, 1914, by one Rundle, a farmer living in Oakland county, Mich., who replied by mail to the advertisement. Two or three weeks later he was called upon at his home by one Collier, who claimed to be the mining engineer (from California) of 'the Guggenheims,' and to be representing them in the prospective purchase of a farm to be occupied by their nephew. Pursuant to telegram from Collier, Rundle met the latter at Toledo, Ohio, September 21st, and was there introduced by him to one 'Sherman' (said to be defendant Arthur), who was represented to be the secretary of Mr. Guggenheim. The sale was there agreed upon, 'Sherman' giving Collier what purported to be a certified check for $10,000 to be applied on the price when the sale should be consummated. Afterwards Collier and Rundle met on the street in Toledo a man called 'Hudson,' whom Collier claimed to know. The result was that the three went to rooms in the Denison building fitted up to represent a turf exchange, where 'Hudson' explained that the 'syndicate' owned most of the horses which took part in the races, and controlled their result, wiring Hudson each day by cipher code which horses to bet on. After Collier had 'won' a bet of a dollar, he pretended to bet the $10,000 'certified check' which Arthur had given him, and to which 'Hudson' appeared to add another $10,000. This $20,000 'bet' was announced as won, together with a profit of $50,000. Payment of the $70,000 ticket was refused until it could be ascertained whether the $10,000 'certified check' was good. Collier professed unwillingness to have it cashed for fear the Guggenheims would learn where it was done, and proposed to Rundle to give him a part of the profit on the bet if he would help raise the $10,000.

Rundle accordingly went home and raised $3,000, returned to the 'turf exchange,' and there paid the amount to Collier, who claimed to have meanwhile secured $7,000 from 'Sherman' (Arthur). After Rundle had, at Hudson's request, bet $500 of the latter's money (winning $1,000, which was apparently paid to Hudson), Collier claimed that he (Collier) had bet not only the $10,000 (of which Rundle's $3,000 was a part), but the $70,000 'ticket' and had lost the entire amount through an alleged misunderstanding of the betting instructions. Rundle was thus swindled out of his $3,000. The 'turf exchange' was shown to have been simply a fraudulent pretense; the telephone and telegraph instruments connecting nowhere.

One Millard, a farmer living near Rundle, also saw the advertisement in question in August and answered it by mail. He was later called upon by Collier on September 5th and 17th, who told a 'Guggenheim' farm-purchase story in substance as related to Rundle. The Millard transaction went no further than an agreement upon the purchase price, because of Millard's refusal to add Collier's commission to the price of the farm, and to bring the commission with him to Toledo.

The indictment charged as participants in the conspiracy not only the three plaintiffs in error here, but Arthur, Hathaway, Collier, Taylor, and others; the conspiracy charged being a scheme to defraud by substantially the means used in the case of Rundle (including false claims that Collier and 'Sherman' represented the Guggenheims), the overt acts charged (aside from the publication and purpose of the advertisement) relating to the Rundle transaction. None of the defendants except Shea, Brereton, Homer, Hathaway, and Arthur seem to have been taken into custody. Arthur pleaded guilty. Shea, Brereton, Homer, and Hathaway were convicted and sentenced. Hathaway does not prosecute error.

There was substantial testimony tending to show that each of the five defendants named participated in the conspiracy. (The intention to use the mails was fairly inferable from the advertisement itself, which brought at least two responses by mail.) Homer is shown to have purchased furniture for the turf exchange rooms in the Denison building, and to have personally rented the rooms in question, under the name of 'Fuller.' There was testimony identifying Hathaway as the 'manager' of the turf exchange in the Denison building at the time of the Rundle transaction, and as having been with Homer when the rooms were rented. There was a partial identification by Rundle of defendant Brereton as the 'Hudson' who assisted in the transaction in the Denison building turf exchange. Shea had an office in the Spitzer building, which seems to have been headquarters for defendants Homer, Baldwin, Adams, and perhaps others. In this office were found at the time of the arrest (October 5, 1914) suit cases containing what was apparently the paraphernalia of the turf exchange in the Denison building, as well as in the Nasby building later referred to (these exchanges having been then lately dismantled), including cloth 'blackboards,' telephone and telegraph instruments, racing forms, and paper cut the size of United States bills, and with wrappings, bearing the printed name of a bank. Paper 'money' of this kind was shown to have been cut for defendant Taylor in the summer of 1914. There was evidence that defendant Shea was in the Nasby building on the day the furniture was moved out, and he was identified by Hoblitzel as the cashier of the 'turf exchange' in the Nasby building (to be hereafter mentioned). There was also evidence having some tendency (though by no means conclusive) to identify Shea as the one who delivered the advertisement at the newspaper office in Detroit on August 13th.

1. Defendants asked direction of verdict in their favor upon the ground that the District Court for the Northern District of Ohio (in which district Toledo is situated) had no jurisdiction of the offense. Section 37 of the Criminal Code (formerly section 5440 of the Revised Statutes) provides that:

'If two or more persons conspire * * * to commit any offense against the United States * * * and one or more of such parties do any act to effect the object of the conspiracy, each of the parties to such conspiracy shall' be punished in the manner prescribed.

Section 731 of the Revised Statutes provides that:

'When any offense against the United States is begun in one judicial circuit and completed in another, it shall be deemed to have been committed in either, and may be dealt with, inquired of, tried, determined, and punished in either district, in the same manner as if it had been actually and wholly committed therein.'

Although a mere conspiracy, without an overt act done under it, is not criminally punishable under section 37 of the Criminal Code, yet the rule is now settled that, in view of that section and section 731 of the Revised Statutes, prosecutions for conspiracy may be maintained either in the district in which the conspiracy was entered into, or in any district in which an act was done to effectuate the object of the conspiracy. Hyde v. Shine, 199 U.S. 62, 76, et seq., 25 Sup.Ct. 760, 50 L.Ed. 90; Hyde & Schneider v. United States, 225 U.S. 347, 356, et seq., 32 Sup.Ct. 793, 56 L.Ed. 1114, Ann. Cas. 1914A, 614; Brown v. Elliott, 225 U.S. 392, 400, et seq., 32 Sup.Ct. 812, 56 L.Ed. 1136; Joplin Mercantile Co. v. United States, 236 U.S. 531, 535, et seq., 35 Sup.Ct. 291, 59 L.Ed. 705; United States v. Rabinowich, 238 U.S. 78, 86, et seq., 35 Sup.Ct. 682, 59 L.Ed. 1211.

The indictment charged that the conspiracy was entered into at Toledo, and three of the overt acts alleged are charged to have been committed there. We think the record would naturally justify an inference that the conspiracy was entered into at Toledo; Shea had lived there for several months and had an office there from which he carried on a so-called advertising agency. Adams, who apparently lived in Toledo, acted for Shea in renting the office mentioned, and apparently spent considerable time there. Both Arthur and Hathaway seem to have been intimate with Shea and in the habit of making his office their headquarters. The connection of Homer and Hathaway with the renting and furnishing of the 'turf exchange' has already been mentioned, as well as the making in Toledo of the 'paper money' on Taylor's order.

But the acts done in Toledo in furtherance of the conspiracy were enough to give jurisdiction to the court below, which was not lost by the previous closing of the 'door of repentance' through the...