United States v. Ayotte, 17080

• Decision Date: 04 December 1967
• Docket Number: 17081.,No. 17080,17080
• Citation: 385 F.2d 988
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Eugene Ellsworth AYOTTE and Samuel Joseph Giordano, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

385 F.2d 988 (1967)

UNITED STATES of America, Plaintiff-Appellee, v. Eugene Ellsworth AYOTTE and Samuel Joseph Giordano, Defendants-Appellants.

Nos. 17080, 17081.

United States Court of Appeals Sixth Circuit.

December 4, 1967.

Gerald M. Franklin, Detroit, Mich., for appellants.

Robert J. Grace, Asst. U. S. Atty., Detroit, Mich., for appellee, Lawrence Gubow, U. S. Atty., Detroit, Mich., on the brief.

Before WEICK, Chief Judge, and O'SULLIVAN and PHILLIPS, Circuit Judges.

O'SULLIVAN, Circuit Judge.

Appellants Ayotte and Giordano were convicted of conspiracy to conceal, (Count I), and of concealing, (Count II), from the bankruptcy court and its officers, assets belonging to the estate of a bankrupt enterprise, viz: Henry Oliva d/b/a Palm Furniture Company, in violation of Sections 2, 152 and 371 of Title 18 U.S.C. Count I also charged transfer and concealment of assets in contemplation of bankruptcy, and receipt of property and proceeds of the business after the filing of bankruptcy proceedings. The case was tried to a District Judge for the Eastern District of Michigan. A co-defendant, one Rubino, was acquitted of all counts and the appellants, with him, were acquitted of the indictment's third count.

Appellants' venture was short-lived and transparently criminal. In May of 1960, appellant Eugene Ellsworth Ayotte, using an alias — Henry Oliva — entered into a lease of a store building in Detroit, Michigan. The two-year term of the lease began on May 27, 1960. Ayotte paid $3,000 advance rent for the first six months of the lease. Ayotte chose Palm Furniture Company as the assumed name for his planned operation and, obedient to Michigan law, filed a certificate of assumed name with the Wayne County Clerk, describing the concern as "Henry Oliva, d/b/a Palm Furniture Company." Exhibiting a copy of this certificate, Ayotte, as Henry Oliva, opened an account in a branch of the National Bank of Detroit with a deposit of $1,600. With Ayotte, when he opened this bank account, was his codefendant, appellant Samuel Joseph Giordano, who chose the alias Joseph Cardo for his participation in the involved enterprise Both were authorized to sign checks on the Palm Furniture Company account. On June 20, 1960, shortly after the opening deposit, Ayotte deposited an additional $10,000 in the bank. This, as well as the opening deposit, was all in cash — mainly in bills of large denominations.

The Palm Furniture Company then began an active business. Broad varieties of furniture and appliances were purchased, from a large number of suppliers, and some sales were made out of the rented premises. Through its short history, Ayotte and Giordano were active in carrying on the buying and selling of Palm Furniture Company's goods. Giordano, using the name of Joe Cardo, appeared to be next in command to Ayotte, the apparent owner. Suppliers desiring to sell asked for credit information from Dun and Bradstreet. This concern's representative met Ayotte, as Oliva, and made inquiry as to his background and financial history; this was followed up by receipt of a form containing Ayotte's background and financial position. It was fair to assume that the report was false.

The business began in early June and was on its way out shortly after the middle of August, with creditors pressing for payment of accounts; a small quantity of goods was seized by writs of replevin, and in late August on several occasions visitors found the place closed during normal business hours. During the course of the operation, at least two buildings — described as warehouses or stores — were rented by Ayotte and furniture or appliances were moved into and out of them. Giordano, as Joe Cardo, participated in some of these activities. On August 26, 1960, an involuntary petition in bankruptcy was filed and a receiver appointed for the alleged bankrupt Palm Furniture Company. The receiver promptly took possession of the store and its few contents. Prior to the receiver's takeover, a deputy sheriff had been unable to serve a writ of replevin because he found the store closed. He called the landlord, who let him in, and then changed the locks on the doors. On this occasion the deputy sheriff told the landlord that Palm Furniture had gone bankrupt. The landlord then got a call from Ayotte who angrily demanded the new key. The landlord refused, saying to Ayotte, "You went bankrupt." Shortly thereafter a lawyer called demanding the key on behalf of his client, Ayotte. The landlord said he had refused to give the key to Ayotte because "he Ayotte went bankrupt." The landlord then gave the key to this attorney. When at the premises on the first occasion, the receiver posted a notice that as receiver in bankruptcy he had taken possession of the premises and the contents. He had located the keys in the possession of Ayotte's lawyer. The keys were delivered to the receiver on August 31, but the evidence does not disclose who delivered them, although the receiver's secretary's receipt acknowledges their acquisition from Palm Furniture.

There was evidence that during the involved operation Ayotte rented some warehouse or storage space in several vacant buildings; furniture and appliances were seen there and were sometimes moved out of there. A witness who had theretofore known Ayotte as John Wymore entered into a lease of an unfurnished apartment for a term of one year beginning September 1, 1960. This succeeded an earlier lease of a furnished apartment; it was signed by Ayotte, then employing the name of John DeSanto. Ayotte said that his then change of name was due to a family matter.

A government witness testified that, on behalf of Ayotte, he rented a vacant store at 8425 Mack Avenue, Detroit, for the period from August 3 to September 3, 1960; that during said period goods and merchandise from the Palm Furniture Company had been moved into the premises; that a week or so after the Palm Furniture store had been closed, Ayotte told him that "the creditors had closed the store." The daughter of the owners of these premises leased them to Ayotte's representative. She saw merchandise in the store after the end of the lease, September 3, for about two weeks; then she found the premises emptied and the doors left open. The keys were never returned to her. Another building at 17415 Mack Avenue, Detroit, as a result of negotiations initiated by appellant Giordano, was rented in behalf of Palm Furniture Company for the month of August. Furniture was moved in and out of the building, though no business was carried on there. Toward the end of August, the landlord one morning found that "everything had been removed from the building."

The activities of removing furniture from the several warehouses rented by Ayotte in August, 1960, went on after Palm Furniture had, as was known by Ayotte, been "closed by creditors," and after a receiver in bankruptcy had been appointed and had taken possession of Palm Furniture Company. One witness who had worked for Palm Furniture for one week during the summer of 1960 testified that in the fall of that year, after Palm had been closed, Ayotte hired him to help move some furniture. He assisted Ayotte and Giordano, after a rental trailer had been procured, in moving certain bedroom furniture from a storefront warehouse on Mack Avenue to a farm near the Algonac-Marine City area, northeast of Detroit. The owner of a Detroit trailer rental lot produced business records evidencing a rental to one Eugene C. Ayotte on September 19, 1960.

Another witness had a like experience, assisting Ayotte in the fall of 1960 in picking up several stoves and a refrigerator from a small warehouse on Mack Avenue and transporting them to a farm east of Detroit. He had worked for Palm for one month during the summer of 1960, and on one occasion had been sent to the same warehouse to pick up a refrigerator to bring back to the Furniture Company. At that time, the warehouse was "about full" of the merchandise handled by the Palm Furniture Company.

An accountant from the Federal Bureau of Investigation obtained the available books and records of Palm Furniture and from them reconstructed its short-lived financial history. He found evidence of unpaid or partly paid invoices in the amount of $89,280.28 covering the period of Palm's...