United States v. Erie Basin Metal Products Co., Crim. No. 21312.

• Decision Date: 12 August 1948
• Docket Number: Crim. No. 21312.
• Citation: 79 F. Supp. 880
• Parties: UNITED STATES v. ERIE BASIN METAL PRODUCTS CO., Inc. et al.
• Court: U.S. District Court — District of Maryland

79 F. Supp. 880

UNITED STATES v. ERIE BASIN METAL PRODUCTS CO., Inc. et al.

Crim. No. 21312.

United States District Court D. Maryland.

August 12, 1948.

Bernard J. Flynn, of Baltimore, Md., and Thomas A. Pace and Bernard J. Vincent, both of Washington, D. C., for the Government.

Hilary W. Gans, of Baltimore, Md., and Walter E. Tinsley, of Chicago, Ill., for Erie Basin Metal Products Co., Inc., Allen B. Gellman and Joseph T. Weiss.

Simon E. Sobeloff, of Baltimore, Md., for Harry S. Glick.

Eldridge Hood Young, of Baltimore, Md., for Henry W. Garsson and Murray W. Garsson.

WILLIAM C. COLEMAN, District Judge.

The Court has decided to grant the motions of the four defendants for transfer, and will now give, in as much detail as appears to be appropriate, its reasons for so doing.

There are six defendants in this case, five individuals and one corporate defendant. All of them except two individuals, Henry M. Garsson and Murray W. Garsson, have moved for transfer of the proceeding with respect to each of them to the District Court for the Northern District of Illinois, Eastern Division, relying upon the provisions of Rule 21 of the Federal Rules of Criminal Procedure, 18 U.S.C.A. In support of these motions, these four defendants filed motions for bills of particulars, which, after hearing, were granted over the objection of the Government. After the Government had responded to this Court's order requiring it, as the result of these defendants' granted motions, to supply the requested particulars, these defendants filed additional motions for further particulars, to which the United States excepted. These exceptions were heard, and the Court concluded that there had been substantial compliance by the Government with the Court's order with respect to supplying the additional information to the defendants, and that, all in all, at that stage of the proceeding, the defendants had obtained from the Government all information which they could reasonably ask for under the circumstances.

Summarized, the basis for the motions to transfer the proceeding to the Northern District of Illinois, Eastern Division, is that the acts of the defendants alleged in the indictment as being offenses were of a continuing character; and that if any offense was committed by them in the Maryland District, it was also committed in the Northern District of Illinois, Eastern Division, that is, in Chicago. Further, it is claimed that it is in the interest of justice for this proceeding to be transferred as to them to the latter jurisdiction, for the following reasons: None of these four defendants resides in the Maryland District, but in or near Chicago, and it would be a great and unnecessary hardship upon them to stand trial in the Maryland District, where they do not reside, where they have no business, where they are unknown, and to which a great number of witnesses would have to be brought at great inconvenience and personal expense to the defendants; also, that the books and records of the corporate defendant, Erie Basin Metal Products Company, Inc., production of which would be essential to the trial of this case, both as respects the Government's testimony as well as that of the defendants, are all located in or near Chicago, as well as the books and records of the other companies whose operations are alleged to have been directly connected with the offenses charged in the indictment as having been committed by the various defendants.

Rule 21(b) of the Rules of Federal Procedure provides as follows: "Offense Committed in Two or More Districts or Divisions. The Court upon motion of the defendant shall transfer the proceeding as to him to another district or division, if it appears from the indictment or information or from a bill of particulars that the offense was committed in more than one district or division and if the court is satisfied that in the interest of justice the proceeding should be transferred to another district or division in which the commission of the offense is charged." It will thus be seen from the express language of this rule that there are three prerequisites to the court ordering a transfer of a proceeding of this kind to another district or division: first, the defendant must move for the transfer; second, it must appear from the indictment or from a bill of particulars that the alleged offense was committed also in that district or division to which the defendant moves for transfer of the proceeding, and, third, the court must be satisfied that in the interest of justice such transfer should be made.

It is not contended by these four defendants who are now moving for the transfer of the proceeding that it may be transferred not only with respect to them, but also with respect to the two other defendants in the case, who not only have not made similar motions but who by their counsel strongly oppose the transfer as to them. On this point, we conclude that the four moving defendants are correct in their position. That is to say, as we construe the rule, although there happens to be an absence of any direct authority with respect to it on this precise point because of the rule's newness, a transfer could not be made with respect to any defendant who does not ask for it. Note the phraseology of the rule: "The court upon motion of the defendant shall transfer the proceeding as to him". Also, these four moving defendants do not contend, and we conclude that they may not successfully contend, that there may be a transfer of less than the entire proceeding as respects them. That is to say, we conclude there may not be a transfer of one or more, and not of all counts in the indictment as respects them. However, we are satisfied that there is nothing in the rule which forbids a severance of parties defendant as respects the transfer, on the same principle that there may be a severance of parties for the purpose of trial within a given district as respects any count in an indictment, and this includes conspiracy counts. See Miller v. United States, 4 Cir., 277 F. 721; Olmstead v. United States, 9 Cir., 19 F.2d 842, 53 A.L.R. 1472.

We come, then, first to the question: where was the offense committed? In the present indictment, the first count is the conspiracy count, and the remaining two counts are substantive ones. All counts are based upon alleged violation of the Renegotiation Act of April 28, 1942, as amended, 50 U.S.C.A. Appendix, § 1191. The gist of the offense alleged in the first, or conspiracy count, is that beginning on or about December 1, 1943, and ending on or about December 31, 1946, all of the defendants, at Baltimore and at various other places, conspired to defraud the United States out of certain funds to which it would have been entitled under the provisions of the Renegotiation Act of 1942, as amended, by means of falsehoods and misrepresentations which would induce the United States to agree to accept a return of lesser sums, under the renegotiation of certain war contracts entered into between the Government and the defendant, Erie Basin Metal Products Company, Inc. and another affiliated company, the Interstate Machinery Company, not embraced in the indictment, than the United States would be entitled to or would agree to accept pursuant to renegotiation procedure, were it not deceived by defendants' fraudulent conduct, which the defendants knew and intended should have the effect of apparently reducing the amount of net profit earned by the Erie Basin Metal Products Company, Inc. in the years 1944 and 1945, and by the Interstate Machinery Company in the year 1944, and deceiving the War Contracts Price Adjustment Board and its representatives as to the true costs, profits and financial positions of these companies for these years; with the result that this Board would agree to accept a return of a less amount of net profits than would be the case if the true facts were disclosed. In this, the first count of the indictment, ten overt acts are enumerated as having been committed by the defendants for the purpose of effecting the objects of the alleged conspiracy, some of which appear, as the result of the defendants' affidavits and the bills of particulars which the Government has been required to supply the defendants, to have been committed in Chicago, as well as in Baltimore. So the Court has no difficulty on the ground of venue with respect to the matter of the transfer insofar as the first, the conspiracy count, is concerned.

The second and third counts are similar to each other, except as to the years in which the false financial statements, information and data are alleged to have been supplied the Government by the defendants, the second count relating to such statements, etc., given for the fiscal year ending November 30, 1944, and the third count relating to corresponding information covering the fiscal year ending November 30, 1945. The gist of the offense alleged in both counts 2 and 3 is the same as that alleged in the first, or conspiracy count, which the defendants conspired to do, namely, that by reason of the inclusion of false and fraudulent statements as to operating expenses and income, defendants attempted to mislead and...