United States v. Dreer

• Citation: 457 F.2d 31
• Decision Date: 09 March 1972
• Docket Number: No. 71-1514.,71-1514.
• Parties: UNITED STATES of America v. Joel Donald DREER, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

457 F.2d 31 (1972)

UNITED STATES of America v. Joel Donald DREER, Appellant.

No. 71-1514.

United States Court of Appeals, Third Circuit.

Argued December 16, 1971.

Decided March 9, 1972.

Stanford Shmukler, Philadelphia, Pa., for appellant.

Thomas J. McBride, Asst. U. S. Atty., Philadelphia, Pa., for appellee.

Before BIGGS, VAN DUSEN and HUNTER, Circuit Judges.

OPINION OF THE COURT

BIGGS, Circuit Judge:

The appellant Dreer was found guilty on six counts of an indictment alleging mail fraud. 18 U.S.C. § 1341. The substance of each count mutatis mutandis is the same and varies only in the final paragraph.¹ Count I of the indictment is typical and charges that Dreer "doing business as Terminal Warehouse Company, a moving company," with intent to defraud, discounted spurious invoices "to one Sol Goldstein" of Produce Factors Corporation, the purported invoices being for the transportation of goods and household furnishings of members of the Armed Forces. Count I alleges that one of the means of effecting the fraud was a drayage contract, referred to elsewhere as a "Security Agreement", between Terminal Warehouses, Inc., Dreer's company, and Produce Factors Corporation, Goldstein's company. Paragraph 4 of Count I states: "It was further part of the scheme or artifice to defraud that the defendant would and did present to the said Sol Goldstein numerous invoices which contained false and fraudulent representations. . . ." Paragraphs 4 and 5 recite that Dreer received from "Sol Goldstein payment at a discount rate for these fictitious invoices" and that Dreer well knew that the invoices were "false, fraudulent and fictitious."

Dreer points out that there is variance between the allegations of the indictment and the proof. He asserts in substance that the dealings in respect to the spurious invoices were between the two companies, as was the Security Agreement, really a factoring agreement, whereby Produce Factors Corporation discounted Terminal Warehouse Inc.'s fictitious paper.² His contentions are correct. He points to checks signed by Goldstein drawn by Produce Factors Corporation, made payable to and paid to Terminal Warehouses, Inc. Other evidence which cannot be doubted points to the employment of corporate entities in the transactions referred to in the indictment. The fact that Dreer employed Terminal Warehouses, Inc. as the agent of his fraud, is not fatal to the indictment for the weight of the evidence, as found by the District Judge, clearly identifies him, if not as principal, certainly as an aider and abettor, and therefore equally liable to criminal sanctions. 18 U.S.C. § 2.

Dealing now with the fact that the indictment names Sol Goldstein, as distinguished from his company, Produce Factors Corporation, as the subject of the mail fraud, there was no attempt to pierce the veil of corporate entity. There was evidence that Goldstein was the president of Produce Factors Corporation; Dreer asserts, therefore, that the government is put in the position of arguing, as it were, that if Dreer had given false invoices to a company such as General Motors Corporation it would constitute a scheme to defraud the president of that company. But it was stated in Berger v. United States, 295 U.S. 78, 82, 55 S.Ct. 629, 630, 79 L.Ed. 1314 (1935), that "The general rule that allegations and proof must correspond is based upon the obvious requirements (1) that the accused shall be definitely informed as to the charges against him, so that he may be enabled to present his defense and not be taken by surprise by the evidence offered at the trial; and (2) that he may be protected against another prosecution for the same offense citing cases."³ In this case there is no doubt that the two specifications set out above were fulfilled.

It has long been the rule in this circuit, as in the other circuits, respecting mail fraud that: "This crime against the United States . . . is the use of its mails in carrying out the scheme to defraud, and it was, therefore, necessary for the government to allege in the indictment, and prove at the trial, that the defendant devised a scheme or artifice to defraud; used the mails; and either sent or received mail connected with the scheme. If he were indicted for committing a fraud, of course it would be necessary to name the persons defrauded, and proof of fraud committed upon others would be improper, but, as we have said, the crime with which he is charged to have conspired to commit against the United States is not to defraud any person or persons, but to use the mails in carrying out a scheme to defraud, and the persons communicated with through the mails are only important to identify and show the scheme." United States v. Marrin, 159 F. 767, 774 (E.D.Pa.1908), affirmed 167 F. 951, 955-956 (3rd Cir. 1909).

We reiterate that the crime here was mail fraud, and though Goldstein's company, Produce Factors Corporation, was defrauded rather than Goldstein himself, the crime was committed against the United States by the use of its mails. This is the essential point. The evidence was overwhelming as to Dreer's actions in effecting the fraud. It cannot be maintained that he was not well aware of the basis of his indictment or that he was taken by surprise for it was stipulated by him and by his attorney that two government witnesses would testify that none of the invoices set forth in the indictment was contracted for by either McGuire Air Force Base or Fort Dix, nor was any payment ever made on them. Dreer's testimony did not contradict this statement to any substantial degree.⁴ As was said by Mr....