Shushan v. United States

Decision Date03 March 1941
Docket NumberNo. 9388.,9388.
Citation117 F.2d 110
PartiesSHUSHAN et al. v. UNITED STATES.
CourtU.S. Court of Appeals — Fifth Circuit

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Warren O. Coleman, Warren Doyle, Hugh M. Wilkinson, John D. Lambert, W. J. Waguespack, Jr., Edward R. Schowalter, E. E. Talbot, and Rene J. Waguespack, all of New Orleans, La., Francis X. Busch, James J. Magner, and Morris I. Leibman, all of Chicago, Ill., and David V. Cahill, of New York City, for appellants.

O. John Rogge, Asst. Atty. Gen., Harold Rosenwald and Alfred B. Teton, Sp. Attys. Dept. of Justice, both of Washington, D. C., and Rene A. Viosca, U. S. Atty., and Robert Weinstein, Asst. U. S. Atty., both of New Orleans, La., opposed.

Before SIBLEY, HUTCHESON, and McCORD, Circuit Judges.

SIBLEY, Circuit Judge.

Abraham L. Shushan, Robert J. Newman, Norvin T. Harris, Jr., Henry J. Miller and Herbert W. Waguespack were convicted on seven out of eight counts of an indictment charging uses of the mail in execution of a scheme to defraud. All appeal, each appearing by separate counsel with separate briefs, and each makes more than a hundred assignments of error. It is impossible to discuss all of them. Many are urged by all the appellants; some are peculiar to those who assert individual defenses. In the general discussion to which space confines us, we will refer to matters relating to: 1. The finding and 2. The sufficiency of the indictment; 3. The refusal of a continuance and of a mistrial; 4. The proceedings against the newspapers; 5. The impanelling and conduct of the jury; 6. Admission of evidence and argument of counsel; 7. The charges and refusals to charge; 8. The sufficiency of the evidence.

1. Pleas in abatement of the indictment were filed which set up that no witnesses had testified before the grand jury to the deposit in the mail or delivery from it of the writings mentioned in the several counts, as shown by affidavits thereto annexed. The affidavits tended to prove that neither any sender nor addressee testified. The court struck the pleas as insufficient. Assuming that an indictment may be abated or quashed for a total want or illegality of evidence before the grand jury on an essential element of the offense, the affidavits annexed to these pleas and made a part thereof do not show such a situation. The prosecution may have proved the use of the mails by circumstantial evidence including postmarks on the documents; or postal employees may have been used as witnesses, or proof made of admissions by the accused. On the showing offered the court was not bound to halt the trial to see how much or what sort of evidence the grand jury had acted on. In the grand jury room guilt does not have to be shown beyond a reasonable doubt, but only as probable. The secrecy of the proceedings is not to be set aside on every request or suggestion of the person indicted, but only when there is probability of serious illegality. See Friscia v. United States, 5 Cir., 63 F.2d 977.

Other pleas in abatement set up that three persons, purporting to act as special assistants to the Attorney General, participated in the proceedings before the grand jury without having been specifically directed to do so by the Attorney General as required by statute; 5 U.S.C.A. §§ 312 and 315. On a trial of the pleas it appeared that each of the persons complained of had been commissioned and had taken an oath as required by Section 315. Each commission appoints the person named a special assistant to the Attorney General and specifically directs him to conduct in the Eastern District of Louisiana proceedings in which the United States are interested, "including grand jury proceedings." In some of them there is express mention of violations in the said district of 18 U.S.C.A. § 338, and in others the violations are stated to have been by named persons "and other persons unknown." In none of them does the name of any person here indicted appear. All these commissions were issued just before or during the time of the grand jury investigation which resulted in this indictment. We think it appears that these persons had and acted in an official status with respect to this case, and that the authority of each extended specifically to appearing in grand jury proceedings in the Eastern District of Louisiana in prosecutions under the mail fraud statute. The mention of persons supposed to be guilty was too general to restrict the authority to cases against them only. When a grand jury, which is an inquisitorial body, begins an investigation it cannot be known in advance whom they will indict. See Wilson v. United States, 221 U.S. 361, 31 S.Ct. 538, 55 L.Ed. 771, Ann.Cas.1912D, 558; Hale v. Henkel, 201 U.S. 43, 26 S.Ct. 370, 50 L. Ed. 652. The words of Section 310, "When thereunto specifically directed by the Attorney General, to conduct any kind of legal proceeding", are mainly for the protection of the United States. They do not require the naming of the persons or the particular cases to be prosecuted. Mail fraud cases in the Eastern District of Louisiana were specifically enough mentioned here, and we think it would be going too far to hold, at the instance of the accused, that the appointees were exceeding their authority in conducting this proceeding. We have held that such a commission does not have to be filed in court. Belt v. United States, 5 Cir., 73 F.2d 888. There has been some diversity of opinion as to how specific it must be in mentioning particular cases, (See United States v. Amazon Ind. Chem. Corp., D.C., 55 F.2d 254); but we think no unauthorized intrusion into the grand jury room here appears.

A third series of pleas in abatement set up as ground for annulling the indictments the presence of two stenographers in the grand jury room while evidence was taken. On trial of these pleas it appeared that one Carter had an annual contract with the United States, made by the District Attorney and approved by the Attorney General, to do court reporting. He furnished the stenographers objected to, on request of the district attorney, and the district attorney accepted their services, Carter paying them. By the Act of May 18, 1933, 48 Stat. 58, 18 U.S.C.A. § 556, was amended so as to prohibit an indictment being held insufficient "by reason of the attendance before the grand jury during the taking of testimony of one or more clerks or stenographers employed in a clerical capacity to assist the district attorney or other counsel for the Government * * *." These stenographers were employed in a clerical capacity to assist the district attorney. The statute does not require that they be permanently employed in the district attorney's office.

2. The indictment was demurred to as alleging no federal offense. In brief it charged the five defendants with knowingly and fraudulently having devised a scheme to defraud, and for obtaining money and property by false and fraudulent pretenses from the Board of Levee Commissioners of Orleans Levee District; and with having, to effectuate the scheme, deposited and caused to be deposited in the mails certain writings. The scheme was more particularly described by allegations that the defendant Shushan was lately a member and president of the Levee Board, that Waguespack was a member and chairman of the Finance Committee, Newman and Harris were in the bond business, and Miller a public accountant; that the Levee District had outstanding five series of bonds aggregating about five and a half million dollars principal, bearing interest at rates of 4¾ and 5 percent; that a plan for refunding them was to be proposed by Newman and Harris to the Board, including a provision to pay 25% of the savings effected; that Shushan was to corruptly influence Governor Leche to approve the plan, which approval was to be stated to the Board; that Waguespack as a Board member was corruptly to urge and influence acceptance of the plan; that Waguespack was to be paid a part of the fees received under the plan but surreptitiously and with concealment thereof; that Shushan also was to have a concealed share in the fees; that a bribe of $12,940 was to be paid one Fitere, an employee in the office of the Board, to spy and inform as to what competitors in the bond business might do; and the scheme was further to charge fees that were exorbitant and excessive and far beyond the value of the services rendered; that, on a saving of $729,000 fees aggregating approximately $496,000 would be charged, which after paying said bribe and other expenses would be divided one-third to Shusan, one-half to Newman & Harris, and one-sixth to Miller; that Miller would pay 70 percent of his sixth to Waguespack and conceal the payment to Waguespack. The indictment then alleged that the representations and pretenses were false because the fees were exorbitant, that the Levee Board was, by the bribery of Waguespack, deprived of fair judgment of one of its members, who assiduously and corruptly influenced and persuaded the other members, and the defendants also bribed Fitere; that the saving was not what was represented, but was calculated upon interest savings in the distant future without discount; that all defendants joined Waguespack in his betrayal of his duty to the Board and in influencing the action of the other members; and all was done and intended to obtain sums of money from the Board and the taxpayers to be converted to the use of the defendants. The use of the mails, especially in paying and dividing the fees, was set out in several distinct counts.

The statute, 18 U.S.C.A. § 338, punishes one who places or causes to be placed in the mail, or causes to be delivered to the addressee, mail matter for the purpose of executing "any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises", or other described schemes. This indictment seeks to...

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