Silkworth v. United States

• Decision Date: 01 February 1926
• Docket Number: No. 124.,124.
• Citation: 10 F.2d 711
• Parties: SILKWORTH et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Second Circuit

10 F.2d 711 (1926)

SILKWORTH et al. v. UNITED STATES.^*

No. 124.

Circuit Court of Appeals, Second Circuit.

February 1, 1926.

COPYRIGHT MATERIAL OMITTED

Nathan A. Smyth, of New York City, for plaintiff in error Silkworth.

Frederick J. Sullivan, of New York City (Philip C. Samuels and Max Lazarus, both of New York City, of counsel), for plaintiff in error Gilbough.

Jacob M. Mandelbaum, of New York City (James I. Cuff, of New York City, of counsel), for plaintiffs in error McQuade and Quillan.

William C. Fitts, of New York City (Albert Massey, and Michael S. Gleason, both of New York City, of counsel), for plaintiffs in error Nicholas and Truesdell.

Emory R. Buckner, U. S. Atty., of New York City (Robert E. Manley, David P. Siegel, and Ben Herzberg, Asst. U. S. Attys., all of New York City, of counsel), for the United States.

Before ROGERS, MANTON, and HAND, Circuit Judges.

MANTON, Circuit Judge.

The indictment charges, in 14 counts, violations of section 215 of the United States Criminal Code (Comp. St. § 10385). The charging phrase of the first count is reiterated without repetition in each of the remaining counts of the indictment. Only the mailing matters set forth in each of the counts is different.

The charging phrase outlines devising or intending to devise a scheme or artifice to defraud. It may properly be classed in two charges of a scheme or artifice to defraud as follows:

(1) It was a further part of such scheme and artifice so devised and intended to be devised that the defendants Raynor, Nicholas & Truesdell would comply with the orders of certain of the customers for the purchase of stocks, bonds, and securities, and that the defendants Louis Gilbough, McQuade Bros. and Francis X. Quillan, who were engaged as brokers in buying and selling stocks, bonds, and securities in the open market, would actually purchase for the firm of Raynor, Nicholas & Truesdell, for the accounts of such customers, the stocks, bonds, and securities ordered by the latter, it being part of the scheme and artifice aforesaid that the defendants Louis Gilbough, McQuade Bros., and Francis X. Quillan would, with the consent and at the direction of other defendants, immediately following such purchases, sell the stocks, bonds, and securities so purchased, without the knowledge or consent of such customers, and that the defendants Raynor, Nicholas & Truesdell held and retained the stocks, bonds, and securities so purchased subject to the further orders of such customers, and conceal from such customers the fact that shares of stock so purchased had been resold, thereby inducing such customers to pay interest and other charges upon sums of money remaining unpaid by them upon the purchases aforesaid.

(2) It was a further part of the scheme and artifice, devised and intended to be devised as aforesaid, that the defendants Raynor, Nicholas & Truesdell falsely and fraudulently represent and pretend to certain other customers that the firm of Raynor, Nicholas & Truesdell had purchased stocks, bonds, and securities pursuant to such customers' orders, when in truth and in fact such purchases had not been made, and to enable the defendants Raynor, Nicholas & Truesdell to represent and pretend, with an appearance of color and truth, that such purchases had been made, the defendants planned and intended that the defendants Louis Gilbough, John H. McQuade, Edward A. McQuade, and Francis X. Quillan would falsely and fraudulently furnish to the defendants Raynor, Nicholas & Truesdell, who would then falsely and fraudulently pretend to receive information and data to the effect that the orders of the customers were actually and in fact executed by the defendants Louis Gilbough, John H. McQuade, Edward A. McQuade, and Francis X. Quillan at the instance and direction of the defendants Raynor, Nicholas & Truesdell, who would then falsely and fraudulently make and cause to be made and deliver and cause to be delivered to the customers through the post office establishment of the United States memoranda and paper writings which purported to show, and in substance and effect did show, that such orders for the purchase of stocks, bonds, or securities had been executed, carried out, and more particularly that the defendants Raynor, Nicholas & Truesdell had purchased the required shares of stock, bonds, or securities from the defendants Louis Gilbough, John E. McQuade, Edward A. McQuade, and Francis X. Quillan in the open market, and were holding and retaining such shares of stock, bonds, or securities for the account of and subject to the further orders of such customers who, as the defendants planned and intended, would be induced to pay interest and other charges on sums of money remaining unpaid by such customers upon the purchase price of such stocks, bonds, and securities.

At the trial, motions were made to dismiss and quash the indictment, because it was claimed that the allegations with reference to the scheme to defraud were repugnant and unintelligible. After consideration, the trial judge sustained this view as to the charge set forth in the first paragraph above, but held that the remaining allegations set forth sufficiently a charge of devising or intending to devise a scheme or artifice to defraud. He stated that he would exclude testimony tending to support the charge as set forth in paragraph 1, and in charging the jury the court said, speaking of the charge of the indictment: "They allege in the indictment that these defendants entered into a scheme to defraud, and after omitting a portion of the indictment, which I said, because of its language, must be disregarded, they are charged as follows."

It is argued that these rulings of the court, both on the motion to dismiss the indictment and in the charge to the jury, changed the indictment and placed the plaintiffs in error on trial on a charge different from that set forth and as found by the grand jury, and that this violated their rights under the Fifth Amendment of the Constitution of the United States. The argument is that under Ex parte Bain, 121 U. S. 1, 7 S. Ct. 781, 30 L. Ed. 849, the rulings of the court breached article 5, which provides that no person shall be held to answer for a capital or otherwise infamous crime, unless upon presentment or indictment of a grand jury, and that, when an indictment is filed with the court, no change can be made in the body of the instrument by order of the court without a resubmission of the case to the grand jury, and the fact that the court may deem the change immaterial and strike it out as surplusage would not change the result, and this for the reason that the instrument as thus changed is no longer the indictment of the grand jury which presented it.

Assuming, as we must, in conformity with the ruling of the trial court, that paragraph 1, which charged the means of operating the scheme, was obscure, or, as put by the court, "unintelligible," did not vitiate the indictment as a whole, providing the language, disregarding the ambiguous portion, sufficiently set forth a general scheme which constituted an artifice to defraud. The indictment sets forth two modes of operation by which the firm of Raynor, Nicholas & Truesdell, with the assistance of the other plaintiffs in error planned and carried out their scheme of bucketing. As apparently attempted to be set forth in paragraph 1, they planned, first, to buy the stock the customers ordered and then to sell it without their consent; second, against customers, they intended not to buy the stock, but nevertheless to represent that they had. The indictment does sufficiently show the latter artifice to defraud as operated against certain customers. It was proper to include the two modes of operation in an indictment, and no duplicity can be charged against such an indictment. Byron v. United States, 259 F. 371, 170 C. C. A. 347. Various means used in committing the offense may be joined without duplicity. Gourdain v. United States, 154 F. 453, 83 C. C. A. 309.

The fallacy of the claim that the indictment is bad is due to the failure of the plaintiffs in error to observe that charges 1 and 2, as above given, are independent of each other. The introductory lines of each paragraph distinguished the application of that paragraph, one from the other. Sufficiency may not be tested by reversing the paragraphs as they appear in the indictment, as is attempted by some of the plaintiffs in error. No reference is made to the limitation of the first paragraph "to certain of the customers" and of the second "to their customers." The language used relates to different groups of victims. Under section 215, more than one misrepresentation or more than one pretense may be charged, so long as they are part of the same scheme, and, indeed, they may be set forth in one count. A sufficient averment and proof of one will sustain the indictment. Proof of one of the several means or methods alleged in the indictment will warrant the conviction. Nash v. United States, 229 U. S. 379, 33 S. Ct. 780, 57 L. Ed. 1232; Chambers v. United States, 237 F. 513, 150 C. C. A. 395; Bergera v. United States (C. C. A.) 297 F. 112; Myers v. United States, 223 F. 925, 139 C. C. A. 399. An indictment for false pretenses is good, if any one of the pretenses set out is sufficiently alleged. Commonwealth v. Morrill, 62 Mass. (8 Cush.) 571; Commonwealth v. Parmenter, 121 Mass. 354; State of Iowa v. Nine, 105 Iowa, 131, 74 N. W. 945. Therefore one of the paragraphs — and certainly the one found to be unintelligible — may be regarded as immaterial or surplusage, and as such it could be disregarded, and the indictment is good without reference to it. Maresca v. United States (C. C. A.) 277 F. 727; Anderson v. United States (C. C. A.) 293 F. 1018.

The court had no alternative but to try the plaintiffs in error and to instruct the jury to disregard the allegation which was insufficiently set forth. The Queen v. Wickham, 10...