United States v. Berlin, Cal. No. 371

• Decision Date: 30 January 1973
• Docket Number: Cal. No. 371,Docket 72-1894.
• Citation: 472 F.2d 1002
• Parties: UNITED STATES of America, Appellee, v. Milton BERLIN, Appellant.
• Court: U.S. Court of Appeals — Second Circuit

472 F.2d 1002 (1973)

UNITED STATES of America, Appellee, v. Milton BERLIN, Appellant.

Cal. No. 371, Docket 72-1894.

United States Court of Appeals, Second Circuit.

Argued December 5, 1972.

Decided January 30, 1973.

COPYRIGHT MATERIAL OMITTED

Anthony T. Accetta, Asst. U. S. Atty. (Robert A. Morse, U. S. Atty., E. D. N. Y., and L. Kevin Sheridan, Asst. U. S. Atty., on the brief), for appellee.

Allen S. Stim, Plainview, N. Y., for appellant.

Before LUMBARD, FEINBERG and MANSFIELD, Circuit Judges.

LUMBARD, Circuit Judge:

Milton Berlin appeals from a judgment of conviction entered in the Eastern District after a jury trial. He was tried on a four-count indictment charging various violations of 18 U.S.C. §§ 1010 and 1014. The activities charged involved the submission of false mortgagee applications to the Federal Housing Administration to secure mortgage insurance and to two federally insured Savings and Loan Associations to secure mortgage loans. The jury convicted on Counts One and Two and acquitted on Counts Three and Four. The district court thereupon imposed concurrent one year sentences and a non-cumulative fine of $2,500 on each of the first two counts.

Count One charged that Berlin, in violation of 18 U.S.C. §§ 1010 and 2 "aided, abetted, counseled and caused" Joseph Oswald to submit a false mortgagee's application to the F.H.A. for the purpose of securing mortgage insurance. The alleged falsity was a statement that Oswald had paid, in cash, $2,200 as a deposit on the property described in the application, when in fact no deposit had been paid. Count Two charged that, in violation of the same provisions, Berlin "aided, abetted, counseled and caused" Oswald to submit to the F.H.A. with the above application a contract for the sale of other property, owned by Oswald, to Berlin, as "purchaser," under a fictitious name, which contract falsely stated that the purchaser had paid $1,500 to Oswald.

Counts Three and Four, on which appellant was acquitted, concerned two separate purchases of real property by Berlin. These purchases were made through John Wilkes, a "straw man," who subsequently, according to plan, assigned the property to Berlin. It was charged that appellant "aided, abetted, counseled and caused" Wilkes to submit mortgage applications to federally insured Savings and Loan Associations in which Wilkes was falsely identified as the purchaser of the property, in violation of 18 U.S.C. §§ 1014 and 2. Since Berlin was acquitted on these counts, their relevance to this appeal lies in Berlin's assertion that the district court improperly admitted evidence of a third such transaction between Berlin and Wilkes, with which the indictment did not charge Berlin because the statute of limitations had run.

At the trial, the government showed that on or about February 6, 1968, Berlin, an experienced real estate broker, caused to be submitted to the F.H.A. on behalf of Oswald an application for mortgage insurance that contained several false statements. In addition to the statement that Oswald had made a $2,200 down payment on the property involved, there was submitted as a supporting document a contract between Oswald and Berlin that falsely recited payment by Oswald and receipt by appellant of $2,200 on the signing of the contract.

In an earlier related transaction, on January 4, 1968, Berlin and Oswald had executed a contract for the sale of Oswald's house to appellant. Berlin, as the purchaser, had signed this contract under the fictitious name of "Martin Barrone." This contract falsely stated that Oswald had received from "Barrone" $1,500 as a down payment on the sale of Oswald's property. The goal of these two transactions was a trade of Oswald's property for Berlin's property.¹

In the application for mortgage insurance on the sale of the Berlin property, the F.H.A. specifically requested a copy of the Oswald-"Barrone" contract in order to show Oswald's financial capability. The evidence indicated that without this contract Oswald would not have qualified for the mortgage insurance. Prior to the submission of the contract, the F.H.A. had rejected an earlier application by Oswald, and there was testimony that it was this contract, with its recitation of the receipt by Oswald of the $1,500, that persuaded the F.H.A. to reverse its earlier decision. There was also testimony that, had the F.H.A. known that the $1,500 had not in fact been paid to Oswald and had it known that "Barrone" was in fact the same broker selling the house whose mortgage was to be insured, no mortgage insurance would have been granted.

The government's evidence indicated that Berlin controlled this entire transaction. Oswald testified that although he provided Berlin with the personal information contained in the application, he did not complete that portion of the application that falsely stated that he had made a $2,200 down payment. He attributed this statement entirely to Berlin. Oswald testified that he told Berlin that he did not have the stated down payment on the house, and Berlin replied that this was no problem because the transaction in effect amounted to a swap of one house for the other. Berlin did not testify at the trial and apparently does not dispute Oswald's account of the transactions.

Appellant's first assertion is that it was error for the district court to deny his pre-trial motion to sever Counts One and Two from Counts Three and Four. We do not agree. Since the offenses charged in the first two counts were "of the same or similar character" as those charged in the second two counts, the joinder of the counts was proper under Rule 8(a) of the Federal Rules of Criminal Procedure. Rule 14, of the Federal Rules of Criminal Procedure, vests the trial judge with great discretion with regard to motions for severance and appellant has not demonstrated that the district court abused its discretion.

Appellant's second contention, that evidence of the third transaction between Berlin and Wilkes, which was not charged in the indictment, was erroneously admitted into evidence, is also without merit. One of the essential elements in the government's case, as appellant acknowledges, was Berlin's intent or guilty knowledge. In this regard, we find this evidence of prior similar criminal activity to have been admissible as probative of this element. United States v. Deaton, 381 F.2d 114, 117-118 (2d Cir. 1967). Nor was the probative value clearly outweighed by its prejudicial effect on the jury. The challenged evidence related most directly to the offenses charged in Counts Three and Four. Since the jury acquitted on these counts, we do not believe that the evidence unduly prejudiced the jury.

Appellant's third contention, that all counts of the indictment were deficient and failed to state a crime, is more troubling. At the close of the government's case, appellant moved to dismiss the indictment. Counts One and Two concerned violations of 18 U.S.C. § 1010² and Counts Three and Four concerned violations of 18 U.S.C. § 1014.³ An essential element of a violation of either statutory provision is that the offender had knowledge of the falsity of the statement that was made.

As a violation of § 1010, Count One charged that appellant "aided, abetted, counseled and caused . . . Oswald to submit to the Federal Housing Administration . . . a `false' application for mortgage insurance, and that the `application falsely stated that . . . Oswald paid $2,200 as a cash deposit on such purchase when in fact no such deposit was paid'"; Count Two charged that appellant

"executed a contract for the purchase of real property . . . under the fictitious name of `Martin Barrone\', knowing that such name was fictitious and said contract stated falsely that `Martin Barrone was the purchaser of the property . . . and that a check for $1,500 was delivered by `Barrone\', the buyer, to . . . Oswald, the seller."

Count Two proceeded to charge that appellant "aided, abetted, counseled and caused" Oswald to submit the contract to the F.H.A. as a supporting document with his application for mortgage insurance. With regard to § 1014, Counts Three and Four charged that appellant

"aided, abetted, counseled and caused . . . John Wilkes to submit to (two federally insured Savings and Loan Associations) a false Application for Mortgage Loan in order to secure a mortgage loan from said (Savings and Loan Associations)."

The deficiency that appellant sees in the indictment is that there is no allegation that Berlin knew of the falsity of the statements and/or documents that he submitted.⁴ The government argues that the indictment is sufficient because, although there is no explicit allegation that Berlin knew that the statements were false, such an allegation is implicit from the language used in each count.

Of course, there is no requirement that the offense be charged in the language of the statute, so long as the defendant is apprised of the offense with which he is charged. United States v. DiPietroantonio, 289 F.2d 122, 124 (2d Cir. 1961). However, as one leading commentator has said:

"If knowledge or intent are (sic) not an element of a particular crime, then of course they need not be pleaded. An indictment or information is defective, however, in failing to allege these elements if they are expressly contained in the statute . . . . The elements need not be alleged in terms, and a pleading is good if it fairly imports knowledge, intent, or malice where these are elements of the crime."

1 Wright, Federal Practice and Procedure (Criminal) § 125 pp. 242-44. As Chief Judge Clark said in United States v. LaMont, 236 F.2d 312, 315 (2d Cir. 1956):

"It is of course the function of an indictment to set forth without unnecessary embroidery the essential facts constituting the offense and thus accurately acquaint the defendant with the specific crime with which he is charged. But an allegation for lack of which the prosecution must evidently and as a

...