United States v. Fruchtman, 19248.

• Decision Date: 09 February 1970
• Docket Number: No. 19248.,19248.
• Citation: 421 F.2d 1019
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Irwin FRUCHTMAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

421 F.2d 1019 (1970)

UNITED STATES of America, Plaintiff-Appellee, v. Irwin FRUCHTMAN, Defendant-Appellant.

No. 19248.

United States Court of Appeals, Sixth Circuit.

February 9, 1970.

Vincent J. Fuller and Robert L. Weinberg, Washington, D. C., Edward Bennett Williams, Steven M. Umin, Washington, D. C., on the brief, for appellant.

Gerald E. McDowell, Atty., Department of Justice, Washington, D. C., Will Wilson, Asst. Atty. Gen., Edward T. Joyce, Atty., Department of Justice, Washington, D. C., on the brief, for appellee.

Before WEICK, EDWARDS, and COMBS, Circuit Judges.

COMBS, Circuit Judge.

The appellant, Irwin Fruchtman, was charged in a four-count indictment with two conspiracies and two substantive offenses growing out of his alleged interference with a Federal Trade Commission investigation of pricing practices in the steel industry. Counts III and IV were dismissed prior to trial. Count I charged a conspiracy to violate 18 U.S.C. § 1505,¹ and in that count Louis E. Moultane and Milton S. Cohen were also named as defendants. Cohen was granted a severance and testified for the Government in the case against Fruchtman and Moultane; the indictment against him was dismissed after their trial. The court directed a verdict of acquittal as to Moultane at the close of the Government's evidence. The jury found Fruchtman guilty on the conspiracy count and also of the substantive offense charged in Count II. The court imposed sentences of a year and a day on each count to run concurrently and a fine of $10,000.

Fruchtman, at the time of his indictment, was vice president of Donovan Wire & Iron Company of Toledo, Ohio, a company which processes, warehouses, and distributes steel. During the years 1958 through 1962, Donovan purchased steel for resale from McLouth Steel Corporation, a Detroit steel producer under a private discount arrangement.

In April, 1962, Joseph G. Smeraldi, assistant attorney in charge of the Cleveland office of the Federal Trade Commission, made an investigation of McLouth's discount practices, suspecting illegal price discrimination under the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(a). His investigation of McLouth revealed certain debit and credit memoranda in favor of Donovan for fictitious extra processing and freight equalization. Smeraldi then went to the Donovan plant in Toledo where he met with Fruchtman and asked to see all invoices showing purchases of steel by Donovan from McLouth during the years 1960-1962. Fruchtman complied by submitting, along with other records, false invoices purporting to show the sale of steel to Canadian companies. This steel had in fact been sold domestically. The discounts granted by McLouth to Donovan were not prohibited under the Clayton Act on steel destined for sale outside the United States.

There is testimony that prior to Smeraldi's visit Fruchtman had learned of the Federal Trade Commission investigation and had directed Milton Cohen, Donovan's plant manager, to alter a batch of sales invoices by inserting the names of certain Canadian companies as the consignees for large quantities of steel. It is admitted that these invoices, which Fruchtman made available to Smeraldi, were false.

Based in part on his examination of the false invoices, Smeraldi reported there was no evidence of Clayton Act violations and the Federal Trade Commission closed its investigation.

Although the parties are in disagreement about the effect of the charge to the jury, we conclude from our examination of the record that the trial judge found that the investigation conducted by Smeraldi was a "proceeding" within the terms of 18 U.S.C. § 1505 and, in practical effect, so instructed the jury. We find no error on this score. The definition of "proceeding" as used in the statute was a question of law to be determined by the court rather than the jury.

We also find no merit in appellant's contention that the word "proceeding" refers only to those steps before a federal agency which are juridical or administrative in nature. The trial judge correctly held that "proceeding" is a term of broad scope, encompassing both the investigative and adjudicative functions of a department or agency. Rice v. United States, 356 F.2d 709, 715 (8th Cir. 1966); United States v. Batten, 226 F.Supp. 492 (D.C.D.C. 1964); United States v. Brumfield, 85 F.Supp. 696 (W. D.La.1949).

At trial, the district judge permitted the Government to amend the indictment. The original indictment fairly stated the facts upon which the charges were based, but in describing the investigation conducted by Smeraldi it was erroneously stated that he was proceeding under Section 13a instead of Section 13 (a) of Title 15, United States Code. Appellant has not demonstrated that he was misled or prejudiced by reason of the amendment. See United States v. Mills, 366 F.2d 512 (6th Cir. 1966). The amendment was a non-prejudicial change of form and was properly permitted to be made. Russell v. United States, 369 U.S. 749, 770, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962); Federal Rules of Criminal Procedure 7(c).

Appellant also raises a Jencks Act question. After Smeraldi and an agent for the Internal Revenue Service testified for the Government, appellant moved for production of all statements available to him under the Jencks Act, 18 U.S.C. § 3500. He requested in particular the handwritten notes of interviews conducted by these agents. Both Smeraldi and the IRS agent testified that their notes had been destroyed several months before trial. There was no evidence that they were destroyed to prevent their examination by appellant, and the reports which had been compiled from the handwritten notes were made available to appellant's counsel. Since it is not shown that the notes were destroyed for an ulterior purpose and the same information was available to appellant in the reports themselves, the trial judge correctly refused to strike the agents' testimony. Killian v. United States, 368 U.S. 231, 82 S.Ct. 302, 7 L. Ed.2d 256 (1961); Rosenberg v. United States, 360 U.S. 367, 371, 79 S.Ct. 1231, 3 L.Ed.2d 1304 (1959); United States v. Greco, 298 F.2d 247 (2nd Cir. 1965).

Appellant also contends that all evidence which was obtained directly or indirectly by reason of a tax investigation of the Donovan Company should have been suppressed because it was obtained through abuse of administrative summons by the IRS. This argument is premised on the fact...