United States v. Garrison

Decision Date24 August 1960
Docket Number12824.,No. 12823,12823
Citation280 F.2d 493
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Donald J. GARRISON, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Clovis N. OOLEY, Defendant-Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Henry G. Morris, St. Louis, Mo., for appellant.

Edward G. Minor, U. S. Atty., Matthew M. Corry, Asst. U. S. Atty., Milwaukee, Wis., for appellee.

Before HASTINGS, Chief Judge, and KNOCH and CASTLE, Circuit Judges.

HASTINGS, Chief Judge.

Defendants, Donald J. Garrison (alias Jack Sullivan) and Clovis N. Ooley (alias C. N. Ooley), together with Helen Ooley and J. Tom Miles, were charged in an eleven-count indictment with conspiracy and mail fraud violations. Helen Ooley and J. Tom Miles were acquitted on motion and are not parties to this appeal.

Count I of the indictment charged each defendant with conspiring under Title 18 U.S.C.A. § 371 to violate the mail fraud statute, Title 18 U.S.C.A. § 1341.

Counts II to XI, inclusive, of the indictment charged each defendant with devising and engaging in a scheme to defraud certain persons named in Count II in violation of Title 18 U.S.C.A. § 1341, and each of Counts II to XI sets forth a separate and specific instance of use of the mails to defraud by each defendant in furtherance of such scheme to defraud.

A jury found each defendant guilty on all eleven counts of the indictment, and judgment was entered accordingly. Each defendant was assessed a fine of $5,000 on Count I and was sentenced to serve three years imprisonment on each of said Counts II to XI, inclusive, the terms of imprisonment under each of said counts to run concurrently. These appeals followed: Garrison in No. 12823 and Ooley in No. 12824. We shall consider both appeals together in this opinion.

Defendants assert error arising out of the denial of their motions for judgment of acquittal because of insufficiency of the evidence to support the verdicts of the jury; insufficiency of Counts III to XI, inclusive, because of failure to allege facts constituting an offense; denial of motions for mistrial based upon a prejudicial question asked by Government counsel and an allegedly prejudicial comment by the court during the trial; rulings on evidence; and certain instructions given to the jury by the court.

Count I of the indictment alleged that in furtherance of the scheme to defraud the ten persons named therein, defendants made eleven false and fraudulent pretenses, representations and promises (setting them out in detail), knowing at the time that all such pretenses, representations and promises were false when made; that it was the plan of the conspiracy and the intent of defendants to use the United States mails in the execution of such conspiracy; and further that twelve overt acts were committed by defendants.

Count II of the indictment sets forth all of the alleged misrepresentations charged in Count I. It further alleges that defendants knowingly placed false and misleading newspaper advertising in four newspapers named therein to induce the persons to be defrauded to contact defendants; and that defendants, for the purpose of executing the scheme to defraud, caused to be placed in the United States mail a certain letter addressed to and received by one of the ten persons alleged to have been defrauded.

Counts III to XI, inclusive, each re-allege all of the allegations of the first paragraph of Count II by reference thereto; set out the newspaper allegations contained in Count II; and each alleges the use of the mails with reference to a different one of the other nine persons alleged to have been defrauded.

I

Defendants contend that there was insufficient evidence to support the verdict of guilty on any count in the indictment; that the evidence adduced by the Government failed to show any conspiracy on their part to violate the mail fraud statute; and that the evidence failed to show any scheme or device to defraud anyone. After a careful examination of the record, we do not agree. On the contrary, we believe the evidence as a whole was more than sufficient to warrant the jury in returning its verdicts of guilty.

The evidence in the record establishes the following course of events. Defendants had worked as salesmen for several months prior to March, 1956, for Silver King Distributing Corporation in St. Louis, Missouri, where they sold vending machines for the automatic vending of Gillette Blue Blades (safety razor blades). They determined to go into business for themselves.

About March 26, 1956, at St. Louis, Missouri, defendants obtained from the United States Post Office Department a mailing permit for a corporation to be known as Bell Merchandising Automatically, Inc.

On April 2, 1956, defendants caused to be formed a Missouri corporation under the name of Bell Merchandising Automatically, Inc., 1183 Hodiamont Avenue, St. Louis, Missouri. Defendants were named as the principal officers of the corporation, Garrison acting as president and Ooley as vice-president. Each owned 49 shares of stock, with the remaining two shares owned by their respective wives. The primary purpose of the corporation was to deal in automatic vending machines and merchandise to be sold therefrom.

About the first of April, 1956, defendants caused advertisements to be placed in four newspapers published in the Eastern District of Wisconsin, all of which newspapers circulated through the United States mail. These newspapers were the Milwaukee Sentinel, Cudahy Reminder Enterprize, Fond du Lac Commonwealth Reporter and Appleton Post Crescent. Typical of such advertisement was the following:

"INCREASE YOUR INCOME

"PART OR FULL TIME "DISPENSING WORLD FAMOUS `GILLETTE' BLUE BLADES

"Reliable man or woman will be selected for this area to handle the world famous `Gillette' blue blades through our new modern type merchandising dispensers. An unusual opportunity to secure your future. Will not interfere with your present employment. To qualify you must have . . .

* $1,498.50 CASH AVAILABLE IMMEDIATELY FOR INVENTORY

* 2 REFERENCES AND SERVICEABLE CAR

* 5 SPARE HOURS WEEKLY

* MUST BE ABLE TO START AT ONCE

This company will supervise your operations and extend financial assistance to full time if desired. This excellent opportunity is offered to a dependable person who is interested in their future. It's an all cash business, depression proof, no credit risk. Do not answer unless fully qualified for the necessary time and investment.

.INCOME STARTS IMMEDIATELY .NO SELLING OR SOLICITING .BUSINESS IS SET UP FOR YOU .COMPANY SECURES ALL LOCATIONS.

For personal interview Write Box M 37"

Within a few days after the publication of these advertisements, and in answer thereto, the ten persons alleged to have been defrauded responded by letter to the post office box listed. Almost immediately thereafter five of them were personally contacted by defendant Garrison, four by defendant Ooley and one by both of them. (These ten persons all testified for the Government.) Each read the advertisement and responded by mail. Each testified that when visited by one of the defendants, oral representations were made. From the sales talk given by defendants, the following general pattern of representations was made:

That Bell Merchandising Automatically, Inc., was a well-established firm and had been in business for a long time. That it had been approved by one or more of the following: St. Louis Better Business Bureau, St. Louis Chamber of Commerce, Milwaukee Better Business Bureau, Milwaukee Chamber of Commerce, Cudahy Chamber of Commerce, Fond du Lac Chamber of Commerce and the Appleton Chamber of Commerce. (This was false. The company had just started in business, and it was stipulated that none of these organizations endorsed or approved any business.)

That the company was listed in Dun and Bradstreet under the name of "Bell M.A." with a B-1 rating, indicating an annual income of $200,000. One person was told that the company had the financial standing of AT&T and another that its rating was as high as General Motors and the Bell Telephone Company. (This was false. Another business concern, well known in St. Louis as "Bell M.A. Co.," was listed in Dun and Bradstreet with a B-1 rating.)

That the company was controlled or financially backed by the Gillette Company and had the exclusive franchise to manufacture and distribute the dispensing machines or the exclusive right to dispense Gillette blades in vending machines, or that "you can't go wrong with a company like Gillette behind you." (This was false.)

That the prospect would be given a large, exclusive territory such as the entire city of Milwaukee or half the city of Milwaukee or similarly large territory. That the vending machines would be placed for them by a location engineer in hotels, motels, factories, well known chain drug stores and supermarkets and similar establishments. (This was false.)

That they would earn a substantial amount, ranging from $23.10 per week to $390 per month; that if sales did not exceed a varying minimum amount or earnings did not meet the estimates, the company would relocate the machines in more favorable locations; that the machines were being sold to them at cost; and that any time they wanted to quit business, the company would repurchase the machines at a price of 5 to 10% below cost. (This was false. These promises did not materialize.)

There were other oral misrepresentations made to the ten victims by defendants during the course of their sales talk following the same general pattern as above set out. We need not further burden this opinion with them.

Each of the ten persons alleged to have been defrauded testified that based upon these representations made by defendants, he entered into a written contract in which he agreed to purchase thirty vending machines at $49.95 each and 400 packages of Gillette Blue...

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