United States v. Brewer, 74-29-CR-4.
| Decision Date | 06 December 1974 |
| Docket Number | No. 74-29-CR-4.,74-29-CR-4. |
| Citation | 401 F. Supp. 1085 |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | UNITED STATES of America v. Patricia BREWER. |
Thomas P. McNamara, U. S. Atty., by Carl L. Tilghman, Asst. U. S. Atty., Raleigh, N. C., for plaintiff.
SPECIAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER
This cause having been heard upon a stipulation of facts which were agreed to by all parties at the regular term of Court commencing on August 19, 1974, at New Bern, North Carolina, and after consideration of all oral and written arguments of counsel, this Court makes the following findings of fact and conclusions of law:
FINDINGS OF FACT
The defendant, her counsel, and the Government through the United States Attorney has stipulated to all the facts received as evidence in this case. This Court has reviewed those stipulations and affirmatively adopts the facts contained therein as true. Since the stipulations were filed in this case and are a part of the record, this Court sees no requirement to fully recount the stipulations of fact in this order.
However, in summary, it has been shown that the defendant mailed cigarettes from North Carolina to purchasers in the State of Florida in eight (8) separate transactions. In each of these transactions the defendant used the United States Postal Service to receive orders from her customers and to fill those orders with shipments of cigarettes. The defendant failed to advise the Department of Taxation, State of Florida, of the details of each of these transactions as required by the Jenkins Act, Title 15, United States Code, Section 375, et seq. The Postal Investigator who interviewed the defendant stated that she had told him that she had heard of the Jenkins Act, but failed to notify the State of Florida of these transactions. The stipulations further show that the defendant traded under the names of Atlantic Beach Wholesale Distributing Company, Atlantic Distributing Company, and Atlantic Beach Wholesale Company for the purpose of operating a cigarette mail order business at Atlantic Beach, North Carolina.
The Indictment charges the defendant with the use of the United States mails in furtherance of a scheme and artifice to defraud purchasers of cigarettes and the governments of the states wherein they reside, in violation of Title 18, United States Code, Section 1341. The defendant contends that her actions, as set forth in the stipulations, do not constitute violations of the felonious mail fraud statute, but are, at most, misdemeanor violations of the Jenkins Act. Consequently, this Court is faced with the question of whether the defendant's willful failure to comply with the requirements of the Jenkins Act constitutes a violation of the mail fraud statute. It is the opinion of this Court that the question must be affirmatively answered.
The purpose of the mail fraud statute has been described by the United States Supreme Court in these words:
. . . Congress enacted § 1341 forbidding and making criminal any use of the mails `for the purpose of executing a scheme' to defraud or to obtain money by false representations — leaving generally the matter of what conduct may constitute such a scheme for determination under other laws. Its purpose was `to prevent the post office from being used to carry such schemes into effect . . ..' (citation omitted) . . . only if the mailings were `a part of the execution of the fraud,' or, . . . (citation omitted) were `incident to an essential part of the scheme,' do they fall within the ban of the federal mail fraud statute.
Parr v. United States, 363 U.S. 370, 389-90, 80 S.Ct. 1171, 1182, 4 L.Ed.2d 1277, 1289-90 (1960).
The purposes cited above in Parr, supra, seem to be taken almost verbatim from the statute itself. Indeed the statute is simple despite its length. There are only two elements in the crime created by the mail fraud statute. All that need be proved are: (1) a scheme to defraud; and, (2) the use of the mails for the purpose of executing that scheme. Pereira v. United States, 347 U.S. 1, 74 S.Ct. 358, 98 L.Ed. 435 (1954); United States v. Decker, 411 F.2d 306 (4th Cir., 1969). The broad and inclusive nature of the statute arises out of the meaning of the word fraud. In the cigarette mail order business, the scheme to defraud is readymade because of the differences in the tax structure on cigarettes between the various states. The State of North Carolina has a very low cigarette tax rate and the State of Florida has a comparatively higher cigarette tax rate. Consequently, if Florida residents can purchase cigarettes in North Carolina without paying the Florida State cigarette tax on their purchases, they are able to obtain cigarettes at a substantial savings over the local price, thereby defeating the Florida State cigarette tax. Consequently, those in the cigarette business in North Carolina are able to offer cigarettes for sale at a much lower price than the local selling price in Florida. The obvious and easiest way to conclude these transactions was, and is, by use of the United States mails. Thus, in this manner, cigarettes are being purchased in North Carolina, transported to Florida through the United States mails and consumed in the State of Florida by Florida residents in such a manner as to make it practically impossible for the taxing authority of the State of Florida to collect the appropriate cigarette taxes legally due and owing to Florida.
In an effort to rectify and regulate this type of transaction, Congress passed the Jenkins Act, Title 15, United States Code, Section 375, et seq. This act required any cigarette dealer who would sell cigarettes to other than licensed distributors within the state which taxed cigarettes, must register with the taxing authority of that state, and also notify them of each shipment of cigarettes into that state in order that the taxing authority might collect the appropriate cigarette tax due.
The defendant claims that her operation of the cigarette mail order business was contemplated by Congress and specifically controlled by the Jenkins Act to the exclusion of prosecution for any other criminal statute. In effect, the defendant is arguing that the passage of the Jenkins Act repeals so much of the mail fraud statute as may apply to the interstate shipment of cigarettes. This Court does not agree with that conclusion. The defendant's argument parallels the doctrine of repeal of statutes by implication. The doctrine of statutory construction must be...
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Morris v. Weinberger
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U.S. v. Brewer
...a cigarette mail order business, appeals a judgment convicting her of mail fraud in violation of 18 U.S.C. § 1341. 1 The district court, 401 F.Supp. 1085, ruled that she had defrauded Florida of taxes by using the mails to sell cigarettes to Florida residents without reporting the transacti......