United States v. Gaskill, 73-1628.

• Citation: 491 F.2d 981
• Decision Date: 14 February 1974
• Docket Number: No. 73-1628.,73-1628.
• Parties: UNITED STATES of America, Appellee, v. James Ray GASKILL, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

491 F.2d 981 (1974)

UNITED STATES of America, Appellee, v. James Ray GASKILL, Appellant.

No. 73-1628.

United States Court of Appeals, Eighth Circuit.

Submitted January 16, 1974.

Decided February 14, 1974.

Rehearing Denied March 4, 1974.

A. L. Shortridge, Joplin, Mo., for appellant.

Anthony P. Nugent, Jr., Asst. U. S. Atty., Kansas City, Mo., for appellee.

Before MATTHES, Senior Circuit Judge, HEANEY, Circuit Judge, and SMITH, Senior District Judge.^*

MATTHES, Senior Circuit Judge.

A multiple count indictment charged that James Ray Gaskill used the mails for the purpose of executing a fraudulent scheme in violation of 18 U.S.C. § 1341. Specifically, the indictment alleged that beginning on or about August 28, 1968, and continuing to on or about December 23, 1970, defendant devised a scheme to defraud Retail Grocers Association of Kansas City, Missouri, Kraft Foods Company, General Foods Company and other companies that could and would be induced by defendant to redeem cash-off merchandise coupons from him and to make payment on the coupons. The indictment further alleged that defendant knew that the coupons had not been turned in by retail purchasers of merchandise. The jury found defendant guilty on four counts, each involving a separate mailing. After his posttrial motions were denied, defendant was fined $1,000 on each of three counts and placed on one year probation on the fourth count. Defendant has appealed and we affirm.

The basic issue at trial and on appeal is the sufficiency of the evidence to warrant a jury in finding that the defendant had concocted a scheme to defraud within the ambit of § 1341. Defendant submits that there was a complete failure of proof as to any fraudulent scheme. In resolving this question, we are guided by the axiomatic principle which requires us to review the evidence in the light most favorable to the verdict and accept as established all reasonable inferences to support the conviction. United States v. Rauch, 491 F.2d 552 (8th Cir. 1974); United States v. Dugan, 477 F.2d 140 (8th Cir. 1973); United States v. Henson, 456 F.2d 1045 (8th Cir. 1972).

IGA Thriftway South is a supermarket in Joplin, Missouri. Defendant became manager of Thriftway South in 1962 and remained in that capacity until January, 1971, when the store was sold. The focus of the trial was upon defendant's conduct as manager of the supermarket during the period from August, 1968, to September, 1970, insofar as his managerial conduct related to the submission for redemption of an unusually high volume of cash-off coupons to manufacturers of merchandise and to the Retail Grocers Association, a coupon clearinghouse, for redemption.

The cash-off coupon is a discount, designed by the manufacturer of a certain product to encourage consumers to purchase that product by offering it to them at a reduced price. The manufacturer distributes the coupons to the consuming public through various means. The consumer thereby learns that a certain item may be purchased at a reduced price when the appropriate coupon is presented to a retailer at the time of purchase. The value of the coupon varies, there being some evidence indicating that the average value is about ten cents. Upon tender by the customer, the retailer accepts the coupons and either deducts the value thereof from the cost of the price of the article sold, or pays the amount of the coupon to the consumer. The retailer then submits the coupon directly to the manufacturer who initially distributed it, or indirectly to the manufacturer through a clearinghouse, which charges a nominal fee for handling. In either case, the manufacturer eventually repays the retailer the face value of the coupon plus an additional few cents on each coupon to remunerate the retailer for his effort in accepting the coupon from the consumer.

In August, 1968, defendant placed ads in the Fire Fly Reporter, described as a "refund bulletin," having nationwide circulation. The ads appeared under the name of Pyramid Hobbies, a title adopted by defendant. Typical of many of the ads which appeared in numerous issues of Fire Fly Reporter during the existence of the scheme is the following:

Will trade two G. B. TV or S&H Green Stamps for each cash-off coupon. Worthy cause. Fast service. Enclose SASE. Pyramid Hobbies, P.O. Box 82 Joplin, Mo. 64801 (9-70).

The advertising campaign proved successful. Defendant received literally thousands of cash-off coupons through Pyramid Hobbies from individuals living in various parts of the United States. The S&H green stamps used by the defendant in the exchange for the coupons were purchased in connection with a used car business defendant operated.

Between September 6, 1968, and September 25, 1970, the Coupon Redemption Account of Retail Grocers Association in Kansas City, with whom defendant on behalf of Thriftway South had entered into a contract to redeem coupons submitted by the store, issued 73 checks to IGA Thriftway South in the total sum of approximately $167,500. There was a wide variance in the amount of the checks. The one issued on April 21, 1969, was for $178.00, whereas the one issued on November 18, 1969, was for $10,891.39. All the checks were issued for the purpose of redeeming the face amounts of the coupons plus a relatively small amount of commission. The checks bore the stamped endorsement of "IGA Thriftway South." Four of the checks, totaling about $14,000, were endorsed by defendant's personal signature.

The foregoing facts were established by uncontradicted evidence. Indeed, they were expressly or impliedly conceded by defendant in his testimony. The only controverted issue, as we see it, is whether the inordinately large volume of coupons were legitimately obtained by Thriftway South from customers who had tendered them upon purchase of merchandise, or whether, as the government contended, the redeemed coupons had been collected by defendant through his mail order campaign and then submitted to manufacturers of the merchandise by misrepresenting that the coupons had been received legitimately in the course of business by Thriftway South.

Defendant unequivocally testified that all the redeemed coupons had been collected from customers of Thriftway South, but telling circumstances were such that the jury was fully justified in declining to credit his testimony. Representatives of several large food corporations testified that Thriftway South was submitting for redemption many times the normal value of coupons tendered to a market having the volume of business comparable to Thriftway South by its customers. During the period from August, 1968, to September, 1970, Thriftway South was...