United States v. Ganz, Criminal No. 15977-15979.

• Decision Date: 22 December 1942
• Docket Number: Criminal No. 15977-15979.
• Citation: 48 F. Supp. 323
• Parties: UNITED STATES v. GANZ et al.
• Court: U.S. District Court — District of Massachusetts

48 F. Supp. 323

UNITED STATES v. GANZ et al.

Criminal Nos. 15977-15979.

District Court, D. Massachusetts.

December 22, 1942.

Edmund J. Brandon, U. S. Atty., and Joseph J. Gottlieb, Asst. U. S. Atty., both of Boston, Mass., for the United States.

Alfred Santosuosso, of Boston, Mass., for defendant.

HEALEY, District Judge.

Three indictments have been returned against the defendant, Louis Ganz, all of which involve the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix § 901 et seq.

Indictment Number 15977 alleges violations of Section 35 (A) of the Criminal Code, 18 U.S.C.A. §§ 80, 83-85, by the keeping of false records and the issuance of false bills concerning sales within the jurisdiction of the Office of Price Administration. Indictment Number 15978 alleges violations of the Emergency Price Control Act of 1942 by sales of used tires at prices higher than those provided in Maximum Price Regulation No. 107 and by failure to keep complete and accurate records of such sales. Indictment Number 15979 alleges conspiracy by the defendant, Ganz, and others to violate the Emergency Price Control Act of 1942 and the regulations promulgated thereunder.

To each indictment there have been filed a demurrer and motion to quash.

There have been similar indictments found against Andrew P. Schiaffino (Numbers 15982, 15983, 15979), Joseph Schiaffino (Numbers 15981, 15984, 15979), Colonial Auto Exchange, Inc. (Numbers 15975, 15976, 15979), Jacob Siegal (Numbers 16004, 16005), and Isadore Solomon (Numbers 16006, 16007). All of these defendants have filed demurrers and motions to quash based on substantially the same grounds relied on by the defendant, Louis Ganz. All of these motions and demurrers were consolidated for hearing and were argued at the same time as were the motions and demurrers filed by Ganz. Therefore, although this opinion is specifically directed to the objections raised by the defendant, Ganz, the principles enunciated are equally applicable in the cases involving the other named defendants.

The issues raised by defendant's demurrers and motions to quash may be briefly stated. The objections raised by the defendant to the indictment for violation of Section 35 (A) of the Criminal Code are substantially (1) that the indictments allege the presentation of false bills to persons other than a department or agency of the United States, and therefore are not violative of Section 35 (A) of the Criminal Code, (2) that the criminal provisions of the Emergency Price Control Act of 1942, have superseded Section 35 (A) in matters involving falsification of records or bills required by the Emergency Price Control Act of 1942 or by the regulations promulgated thereunder, (3) that there is no allegation that a "warning notice" required by Section 205 (f) of the Emergency Price Control Act of 1942, 50 U.S.C.A. Appendix § 925 (f), was sent to the defendants prior to the commission of the acts for which they have been indicted, and (4) that there is no allegation that the Price Administrator certified the facts to the Attorney General in accordance with Section 205 (b) of the Act.

To the indictments for violation of the Emergency Price Control Act of 1942, and for conspiracy to violate said Act, defendant interposes the third and fourth objections enumerated above which were raised to the indictment for violation of Section 35 (A) of the Criminal Code.

The defendant attacks the indictment for alleged violations of Section 35 (A) of the Criminal Code, 18 U.S.C.A. § 80, on the ground that it alleges that false bills were presented to a person other than a department or agency of the United States. The defendant contends that unless the false bills were presented to a department or agency of the United States there was no offence indictable under Section 35 (A). Section 35 (A), as amended, is as follows: "Whoever shall make or cause to be made or present or cause to be presented, for payment or approval, to or by any person or officer in the civil, military, or naval service of the United States, or any department thereof, or any corporation in which the United States of America is a stockholder, any claim upon or against the Government of the United States, or any department or officer thereof, or any corporation in which the United States of America is a stockholder, knowing such claim to be false, fictitious, or fraudulent; or whoever shall knowingly and willfully falsify or conceal or cover up by any trick, scheme, or device a material fact, or make or cause to be made any false or fraudulent statements or representations, or make or use or cause to be made or used any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement or entry in any matter within the jurisdiction of any department or agency of the United States or of any corporation in which the United States of America is a stockholder, shall be fined not more than $10,000 or imprisoned not more than ten years, or both."

The indictment alleged the issuance by the Administrator of the Office of Price Administration of Maximum Price Regulation No. 107, Section 1315.1355 of which reads as follows:

"(a) Every person engaged in the business of selling used tires or tubes not mounted as part of the equipment of a vehicle, shall furnish the purchaser with a written statement setting forth the price, size, and type of the tire or tube sold, either stating that the tire sold is a basic tire carcass or giving the thickness in 32nd inches of the tread design depth at the shallowest point, and reciting whether, to the knowledge of the seller, the tire or tube, as the case may be, has been regrooved, is a used retreaded or recapped tire, requires repair, or has been vulcanized or repaired, together with a description of the extent of vulcanizing or repairing if it was done.

"(b) Every person engaged in the business of selling used tires or tubes not mounted as part of the equipment of a vehicle, shall keep for inspection by the Office of Price Administration, for a period of not less than two years, complete and accurate records of every sale of such articles including the date thereof, the name and address of the purchaser, the price per unit, the quantity, size, and type of tires or tubes sold, indicating whether each tire was a basic tire carcass or the thickness in 32nd inches of the tread design depth at the shallowest point, and specifying whether the tire or tube, to the knowledge of the seller, needed repair or had been vulcanized or repaired, and if so to what extent, and whether the tire had been regrooved or retreaded or recapped.

"(c) Every person engaged in the business of selling used tires or tubes not mounted as part of the equipment of a vehicle, shall keep for inspection by the Office of Price Administration, for a period of not less than two years, complete and accurate records of (1) all acquisitions after March 7, 1942 of used tires or tubes, showing the date of each purchase or acquisition, the name and address of the person from whom acquired, the price paid, and the number of tires and tubes acquired, indicating whether they were truck or passenger car tires and tubes and whether such tires were basic tire carcasses of the thickness in 32nd inches of the tread design depth at the shallowest point, and (2) the stocks on hand as of March 7, 1942, and the last day of each succeeding month thereafter.

"(d) Such persons shall submit such reports to the Office of Price Administration as it may from time to time require."

Some of the counts of the indictment allege in part that the defendant knowingly and wilfully made and delivered to a certain person a false invoice listing the sale price of used tires sold to such person at a price less than the actual sale price.

The other counts of the indictment allege the wilfull making and keeping of false records of such sales. The indictment also alleges that the defendant was and is engaged in the business of selling used tires and tubes.

It is clear from the indictment that the defendant made and kept the alleged records for inspection by the Office of Price Administration, an agency of the United States. It follows that such records were made in a "matter within the jurisdiction of" a "department or agency of the United States." Therefore, the counts which allege the keeping of these false records obviously are within Section 35 (A) of the Criminal Code, 18 U.S.C.A. § 80.

It also seems clear that the alleged issuance of the false invoices or bill is within the purview of Section 35 (A). Section 35 (A) makes criminal the making or using of "any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement or entry in any matter within the jurisdiction of any department or agency of the United States." Prior to the amendment of June 18, 1934, 48 Stat. 996, 18 U.S.C.A. § 80, it was a requisite of criminal liability that such falsifying be done "for the purpose and with the intent of cheating and swindling or defrauding the Government of the United States, or any department thereof." This language is no longer in the statute. The Amendment of 1934 also added the words "in any matter within the jurisdiction of any department or agency of the United States." 18 U.S.C.A. § 80. Thus that section was broadened "so as to leave no adequate basis for the limited construction which had previously obtained." United States v. Gilliland, 312 U.S. 86, 93, 61 S.Ct. 518, 522, 85 L.Ed. 598. Giving to Section 35 (A) its literal and natural meaning, it is clear that the offenses charged fall squarely within its provisions. There is no requirement that the false bills be presented to an agency or department of the United States. The only requirement is that such false bills themselves be made in a "matter within the...