U.S. v. Outpost Development Co.

Decision Date24 March 1977
Docket Number75-3161,75-3060,Nos. 75-3160,s. 75-3160
Citation552 F.2d 868
PartiesUNITED STATES of America, Appellee, v. OUTPOST DEVELOPMENT COMPANY, Appellant. UNITED STATES of America, Appellee, v. Conrad L. GERMAIN, Appellant. UNITED STATES of America, Appellee, v. Robert W. KANE, Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Stanley Fleishman, argued, Fleishman, Brown, Weston & Rohde, Beverly Hills, Cal., for appellants.

William D. Keller, U. S. Atty., Juan Robertson, Asst. U. S. Atty., argued, Los Angeles, Cal., for appellee.

Appeal from the United States District Court for the Central District of California.

Before TRASK, GOODWIN and KENNEDY, Circuit Judges.

GOODWIN, Circuit Judge:

Conrad L. Germain, Robert W. Kane, and Outpost Development Company, a corporation, were tried before a jury and convicted of eighteen counts of mail fraud (18 U.S.C. § 1341). They appeal.

In 1972, Germain and Kane established Outpost Development Company to conduct a mail order business under the names of Lydia Feldman Methods and Brenda Hardy Research. The defendants operated the business with the help of one employee. They mailed interstate solicitations entitled "Want to Lose Weight?" The solicitations, written under the fictitious name Lydia Feldman, explained how Lydia had discovered in an occult writing a recipe for a diet tonic that converted "unburned calories into energy."

The diet tonic was a mixture of ordinary fruit juices and was to be taken before meals or after meals, depending upon whether the dieter was following the "with meals" plan or the "mealless" plan. Lydia invited the reader to send her $5.95 for the recipe and promised a refund if the customer was not satisfied.

Testimony established that some persons sent the $5.95 but did not receive the diet tonic recipe, and that others requested, but did not receive, a refund. This was, of course, some evidence of fraud.

Multiple specific acts were alleged in each count of the indictment. The defendants argue that if the evidence is insufficient with respect to any one of the fraudulent acts alleged, the guilty verdict on that count should be reversed. They rely principally on Stromberg v. California,283 U.S. 359, 51 S.Ct. 532, 75 L.Ed. 1117 (1931), Williams v. North Carolina, 317 U.S. 287, 63 S.Ct. 207, 87 L.Ed. 279 (1942), and Yates v. United States, 354 U.S. 298, 77 S.Ct. 1064, 1 L.Ed.2d 1356 (1957). None of these cases supports their position.

In Stromberg, the statute contained three alternative clauses, one of which the Court held unconstitutional. Because it was impossible to determine whether the jury had based its verdict of guilty on the unconstitutional clause alone, the Court reversed the conviction.

In Williams, the instructions permitted the jury to find the defendant guilty on either of two grounds, one of which was unconstitutional. The Court followed Stromberg and reversed.

In Yates, the defendant was tried on two different grounds. In submitting the case to the jury the judge misstated the law on one of the grounds. Because the jury could have based its verdict upon an impermissible finding, reversal was necessary.

In all three cases cited above, the convictions were reversed because they could have been based on an erroneous legal ground. Such convictions are defective. These cases, however, are distinguishable from the instant case, in which appellants claim that the jury could have based its finding of fraud on facts for which the evidence was insufficient. It is well established that a count in an indictment is not improper if it simply charges the commission of a single offense by different means. United States v. Markee, 425 F.2d 1043 (9th Cir.), cert. denied, 400 U.S. 847, 91 S.Ct. 93, 27 L.Ed.2d 84 (1970); United States v. Tanner, 471 F.2d 128 (7th Cir.), cert. denied 409 U.S. 949, 93 S.Ct. 269, 34 L.Ed.2d 220 (1972). See also Fed.R.Crim.P. 7(c)(1). Thus, it has been stated:

" * * * The general rule is that when a jury returns a guilty verdict on an indictment charging several acts in the conjunctive * * * the verdict stands if the evidence is sufficient with respect to any one of the acts charged * * *." Turner v. United States, 396 U.S. 398, 420, 90 S.Ct. 642, 654, 24 L.Ed.2d 610 (1970); quoted with approval in United States v. Hobson, 519 F.2d 765, 774 (9th Cir. 1975).

In the case before the court, each count alleged that the defendants falsely and fraudulently represented that by using the diet tonic, "the fats in the foods you eat are changed into energy instead of fat." With respect to this allegation the evidence is more than sufficient to sustain the verdict.

Two government experts testified that a dieter following the "with meals" plan would not lose weight, but would, in fact, gain weight. The testimony of these experts also provided a basis for the jury's verdict.

Because the evidence is sufficient with respect to the quoted fraudulent statement, we need not decide whether the evidence is also sufficient with respect to each and all of the other acts alleged in the indictment.

The defendants next complain about the instructions. The defendants assert that they may have been convicted for conspiracy rather than for the crime charged. The judge instructed the jury that if it found that the defendants had associated themselves in a common plan with the intent to accomplish some unlawful purpose or to accomplish some lawful purpose by unlawful means, then the acts and statements of one defendant in furtherance of the plan would be admissible against the other defendant even though the acts and statements occurred in the absence and without the knowledge of the other defendant.

The defendants did not object to these instructions at trial as required by Fed.R.Crim.P. 30. Because the defendants failed to object, this court will not reverse unless there was plain error under Fed.R.Crim.P. 52(b). Rule 52(b) states that "(p)lain errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the...

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    ...1231, 1235 (9th Cir. 1977); United States v. Tri-State Motor Co., 550 F.2d 494, 495 (9th Cir. 1977). See United States v. Outpost Development Co., 552 F.2d 868, 870 (9th Cir. 1977). The trial court instructed the jury (n)o person can intentionally avoid knowledge by closing his eyes to fact......
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    ...444 U.S. 1024, 100 S.Ct. 685, 62 L.Ed.2d 657 (1980); United States v. Jessee, 605 F.2d 430, 431 (9th Cir.1979); United States v. Outpost Dev. Co., 552 F.2d 868, 869-70 (9th Cir.), cert. denied, 434 U.S. 965, 98 S.Ct. 503, 54 L.Ed.2d 450 (1977).38 See United States v. Soteras, 770 F.2d 641, ......
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    ...us to consider this argument. We do so, however, because of appellant's novel interpretation of our decision in United States v. Outpost Development Co., 552 F.2d 868 (9th Cir.), cert. denied sub nom., Germain v. United States, 434 U.S. 965, 98 S.Ct. 503, 54 L.Ed.2d 450 (1977). Halbert cite......
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    ...conspiracy as charged in indictment).United States v. Beecroft, 608 F.2d 753, 757 (9th Cir.1979), and United States v. Outpost Development Co., 552 F.2d 868, 869-70 (9th Cir.), cert. denied, 434 U.S. 965, 98 S.Ct. 503, 54 L.Ed.2d 450 (1977), in which we sustained mail fraud convictions afte......
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