Strauss v. United States

• Decision Date: 12 February 1963
• Docket Number: No. 19506.,19506.
• Parties: Robert L. STRAUSS, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

311 F.2d 926 (1963)

Robert L. STRAUSS, Appellant, v. UNITED STATES of America, Appellee.

No. 19506.

United States Court of Appeals Fifth Circuit.

January 9, 1963.

Rehearing Denied February 12, 1963.

Thomas B. DeWolf, Helliwell, Melrose & DeWolf, Miami, Fla., for appellant.

Lloyd G. Bates, Jr., Asst. U. S. Atty., Miami, Fla., Rufus D. McLean, Spec. Atty., Herbert J. Miller, Jr., Asst. Atty. Gen., Beatrice Rosenberg, Kirby W. Patterson, Attys., Dept. of Justice, Washington, D. C., for appellee.

Before JONES and BELL, Circuit Judges and ESTES, District Judge.

GRIFFIN B. BELL, Circuit Judge.

This appeal is from a judgment of conviction following a jury verdict of guilty on count eight of an indictment for conspiracy to transfer and conceal assets of a corporation in contemplation of a bankruptcy proceeding by or against the corporation with intent to defeat the bankruptcy laws of the United States.¹ The co-conspirator named in the indictment, Goodman, plead guilty. In response to a bill of particulars, the government named the wife of appellant, Luella H. Strauss, and Geraldine Bolton, also known as Jeri Bolton, as the unnamed persons with whom appellant was alleged to have conspired.

The first seven counts of the indictment, relating solely to Goodman, were substantive in nature and are not here involved. The District Court in a prior proceeding sustained the motion of appellant to dismiss count 8 of the indictment but this court held that the indictment adequately charged conspiracy to transfer and conceal assets in contemplation of bankruptcy, although it failed to state facts sufficient to charge a violation of the mail fraud statute. United States v. Strauss, 5 Cir., 1960, 283 F.2d 155. Count 8 of the indictment in pertinent part and overt acts 6 and 11, the ones here involved, are set out in the margin.²

Taking the view most favorable to the government to support the verdict, Glasser v. United States, 1942, 315 U.S. 60, 61 S.Ct. 457, 86 L.Ed. 680, the evidence adduced on the trial by the government was that the Harold Corporation was incorporated under the Florida law in January 1956 and in April 1956 acquired a long term lease on the Cadillac Hotel, Miami Beach, Florida. An addition to the hotel was planned. Appellant and Goodman representing the corporation offered Sam Kay fifteen percent of the amount of the loan, $1,300,000, to obtain a loan within a week with which to build the addition. A loan of $1,250,000 was obtained through Kay from the Miami Beach Federal Savings and Loan Association. Kay, for his services, was assigned a promissory note executed by appellant's wife on August 1, 1956, due ten years after date without interest in the amount of $250,000. Kay also rendered the additional service for appellant and Goodman of preparing the following agreement, Government's Exhibit 9, under date of February 1, 1956. The date is in dispute since Kay testified that he did not meet appellant and Goodman until June 1956. Which date is correct is immaterial under the circumstances of the case but the jury could have believed that the agreement was simply dated February 1, 1956 but executed later. At any rate, it was undisputed that it was executed by appellant, Goodman and Jeri Bolton.

"Miami Beach, Florida, February 1st, 1956.

"This agreement made and entered into this date between Robert L. Strauss and Ray Goodman, hereinafter called the parties of the first part, and Jeri Bolton, hereinafter called the party of the second part.

"Whereas, the parties of the first part have been instrumental in forming a corporation, known as Harold Corporation, a Florida corporation, and

"Whereas, the parties of the first part are the sole holders of stock in the said corporation, and

"Whereas, it is their intention of selling the said stock for the benefit of the owners of the same, and

"Whereas, they are desirous of making many business transactions regarding both monies and stocks in the Harold Corporation, and

"Whereas, they do not desire their names be used in regard to these transactions, and

"Whereas, the party of the second part, in order to convenience the parties of the first part, is willing to allow the parties of the first part to use her name and bank account for the benefit of the parties of the first part.

"Now, therefore, party of the second part agrees to allow either or both of the parties of the first part to deposit monies in her bank account and does further agree that upon either or both of their requests she will issue checks in her name payable to individuals as requested by either or both of the parties of the first part.

"Parties of the first part agree to to accept, buy, sell, and otherwise transfer or hypothecate stock in the Harold Corporation in such a manner as is directed by the parties of the first part.

"The parties of the first part agree to pay to the party of the second part the sum of $500 as compensation for the performance of the covenants contained in paragraphs above by the party of the second part.

"The parties of the first part agree that the party of the second part is in no way connected with the Harold Corporation but is merely accommodating the said parties of the first part and therefore, the parties of the first part agree to save harmless the party of the second part for any transactions arising out of the within agreement.

"In witness whereof, parties have set their hand and seals on the date above written.

"(Signed) RAY GOODMAN "Party of the first part. "ROBERT L. STRAUSS "Party of the first part. "JERI BOLTON "Party of the second part."

The Harold Corporation obtained various other funds during 1956 and 1957 through the medium of a loan from the Pan-American Bank of Miami, and through the sale of common and preferred stock and debentures to various investors. An involuntary petition in bankruptcy was filed against the corporation on April 18, 1958 and it was adjudicated bankrupt on June 24, 1958.

The accounting testimony was to the effect that the corporation for the fiscal year ending November 30, 1957, suffered a net loss, after capital charges, in the amount of $485,215.22. Of the total of capital charges, $346,844.88 represented depreciation. It had a capital deficit of $393,596.24 and a total deficit of $748,516.24, the total capital being $355,000.

Appellant offered a balance sheet dated January 31, 1957. It showed the same capital but a surplus of $156,155.29 making total capital of $511,155.29 but this statement did not include depreciation. The fixed assets on this statement were based on appraised value, $3,750,000, but at cost on the November 30 statement, $3,453,864.07 less depreciation in the amount of $435,907.38. Using the November 30 net fixed asset figure, there was a deficit in capital as of January 31, 1957 of $220,888.02. Thus there was a diminishment in the capital figure — really corporate assets as there was no capital left-over the next nine months of $172,708.22.

The government relied on the agreement, its Exhibit 9, between appellant, Goodman and Bolton, and on the fact that large sums of money were transferred from the funds of the corporation to the account of Bolton, and to Goodman and appellant. The total amount of the checks introduced in the evidence drawn on the Harold Corporation payable to appellant or from which he allegedly received the proceeds was $122,275. One was in the amount of $45,000. The company constructing the addition to the hotel drew $45,000 from the construction account and transferred it to the Harold Corporation. On the same day the corporation transferred the same amount to appellant by check drawn by Goodman. This check bore the purported endorsement of appellant.

Low, at one time president of the Harold Corporation, testified regarding a series of checks made payable to Jeri Bolton by the corporation which he personally cashed and gave the proceeds either to Goodman or appellant. The proceeds of one check in the amount of $15,000 was given to appellant outside the bank. Low testified that on one occasion he obtained cash on one of the checks made payable to Jeri Bolton and delivered the proceeds to Goodman at the home of the latter where there was an exchange of funds on the front porch with appellant. On another occasion, out of the proceeds of the Pan-American Bank loan to the Harold Corporation, $111,000 was paid to Florida International Corporation, a corporation of which appellant was an officer with the power to write checks. The cashier of the Pan-American Bank testified that checks drawn by appellant on that bank on the account of the Harold Corporation payable either to himself or to cash and purporting to bear his endorsement totaled $54,000. There was evidence that Jeri Bolton drew checks on the account of the Harold Corporation in the Mercantile Bank of Miami in the amount of $16,000 and $7,500 payable to appellant, and these were purportedly endorsed by him. There was another check drawn on the Harold Corporation account in the Miami Beach First National Bank to appellant, purportedly endorsed by appellant and Goodman, in the amount of $25,500. There was also evidence of checks representing funds of the corporation being made payable to Luella H. Strauss, wife of appellant.

Geraldine Zumwalt, formerly Geraldine or Jeri Bolton, identified her signature on the signature card of the Mercantile Bank but testified that she did not know that she had an account there and she knew nothing about the ledger card for her account, and did not recall ever having made a deposit in the bank. She was not positive that the endorsements on the Harold Corporation checks made payable to her were made by her.

The signature of appellant on the agreement with Goodman and Bolton was admitted, and an examiner of questioned documents testified that the signature on it and the check drawn on the Harold Corporation by appellant payable to Florida International for $111,000 and the endorsements on...