United States v. Gottfried

Decision Date29 March 1948
Docket Number20733.,64,No. 63,Dockets 20732,63
Citation165 F.2d 360
PartiesUNITED STATES v. GOTTFRIED et al. (two cases).
CourtU.S. Court of Appeals — Second Circuit

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John T. Cahill and Noonan, Kaufman & Eagan, both of New York City (Jerome Doyle, of New York City, of counsel), for appellant Gottfried.

Henry Epstein, of New York City (Walter Herzfeld, of New York City, of counsel), for appellant Forman.

Francis Martocci, of Kingston, N. Y., for appellant Stanton.

Charles J. Nager, of New York City, for appellant Pure Rock Mineral Springs Corporation.

Frederick H. Block and John F. X. McGohey, U. S. Atty., both of New York City (Bruno Schachner and Keith Brown, Asst. U. S. Attys., both of New York City, of counsel), for appellee.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

Writ of Certiorari Denied March 29, 1948. See 68 S.Ct. 738.

L. HAND, Circuit Judge.

These are appeals from convictions under two indictments: one, against Gottfried and his corporation, charging them with making a fraudulent statement in writing in a matter affecting the administration of the Office of Price Administration;1 the other, for a conspiracy between Gottfried, Forman and Stanton to defraud the United States by depriving it of the services of Stanton, an investigator in the Office of Price Administration.2 The indictments were consolidated for trial and tried together; and the appeals raise six questions: (1) Whether the indictments should have been consolidated and so tried. (2) Whether the method of drawing jurors in the Southern District of New York is lawful. (3) Whether the foreman of the jury, after he had been excused and an alternate substituted, entered the jury room with the jurors, or had at any time during the trial improperly influenced the jury. (4) Whether a written confession, made by Stanton, was illegally obtained, and whether it was in any event improper to use it upon a joint trial with Gottfried and Forman. (5) Whether Stanton should have been cross-examined as to why he had originally claimed his privilege when questioned regarding the crime. (6) Whether the statute of limitations barred the indictment for making the fraudulent written statement.

The following is a general narrative of the facts which the evidence would have warranted the jury in finding, and which presumably they did find. Gottfried's company made and sold Pepsi-Cola, Hire's root-beer and other "soft drinks" at Ellenville, New York; and in order to do so it bought and used large quantities of sugar. Under the regulations existing at the time — 1942 — the amount allowed to the company in each year depended upon the amount which it had used in 1941, and which it was obliged to enter upon an official form provided for the purpose. Although Gottfried did not actually fill out the form in this instance, he signed it, and he was aware at the time that it exactly doubled the quantity of sugar which the company had used in 1941. The statement was filed on April 29, 1942, with the Office of Price Administration, which about a year later — in March, 1943 — received an anonymous letter declaring that it was false. The Office thereupon detailed the defendant, Stanton, to check it by examining the company's records; Stanton went to its office on March 19th, and saw Long, its president, who told him to come back in a few days. Long thereupon called up Gottfried in New York, and later at an interview Gottfried told him "that his sugar base was inflated," and "that he was into it up to his neck." Gottfried thereupon by telephone set about "trying to find some one who could help him," and was finally recommended to the defendant, Forman, a lawyer, who lived in Kingston. Later, Gottfried told Long to visit Forman, and at their interview Forman said that the matter could be arranged, but that it would cost $1500. On Sunday, the 28th, the three met at the Hotel Pierre in New York in an interview at which it was finally agreed that Forman should have $1500, as he demanded; and the next day Gottfried gave Long the cheque of his wife for that sum, which Long cashed at Ellenville, and paid Forman $1450 out of the proceeds. (What happened to the other $50 is not altogether clear, but later Forman received a company cheque for that amount.) At some date which was in sharp dispute Stanton appeared at Ellenville, and with Long made a pretended examination of the records. He accepted figures read off to him by Long without personally examining the records, and put them down on an adding machine. They equalled the amount in the statement which, as we have already said, exactly doubled the amount bought in 1941. This came about because Long at Gottfried's direction procured duplicate invoices of all the sugar which the company had bought during that year, and read both the originals and the duplicates. Stanton reported to his superiors in the Office of Price Administration in Albany that the statement was correct, and for this Forman paid him $200.

The first question is whether it was proper to consolidate the two indictments and try them together. That the consolidation formally complied with the Rule3 admits of no debate; the "offenses," if not "based on the same * * * transaction," were certainly based on "transactions connected together." We agree that literal compliance with the Rule is not necessarily final, in cases where there is danger of confusion or of unfair prejudice from the joinder; and we will assume for argument that all the evidence admissible in a separate trial of each must be admissible in a separate trial of the other; for certainly that is the severest test that can be applied. If Gottfried and the company had been separately tried, it would have been relevant to prove Gottfried's efforts to escape detection by paying Forman to seduce Stanton. That would have brought in all the evidence of the conspiracy, because the conspiracy had no other purpose than to suppress detection of the false statement; and it is the universal rule that attempts to suppress evidence of a crime are competent evidence of guilt.4 The case is, if possible, even stronger as to the conspiracy indictment. The purpose of the conspiracy being, as we have just said, to suppress evidence of the false statement, pre-supposed that there was a false statement which the suppressed evidence might prove; and nothing can be more relevant in proving a crime than to show that the accused had a motive to commit it. That does not indeed dispose of the admission of Stanton's confession, the consideration of which we defer for the moment; but, that aside, there could not be a properer occasion for consolidation and joint trial.

Next are the challenges to the composition of both the grand and petit juries; which we shall assume, without deciding, were seasonably made. These rested upon the fact that all jurors in the Southern District of New York are drafted from the Counties of Westchester, Bronx and New York, which, the defendants argue, results in a discriminatory imbalance between "urban" and "rural" jurors, for the excluded territory is heavily "rural." The Southern District comprises the three counties we have mentioned and eight others to the north and west of these, and we take judicial notice that in 1940 its total population was about 4,400,000, of which somewhat less than 550,000 live in the excluded territory. It is difficult to know just what the line of demarcation between "urban" and "rural" dwellers the defendants assert to constitute two divergent groups which must be proportionately represented. As an illustration we will draw the line at 28,000 — the population of Kingston where Forman lived. If so, the "rural" dwellers in the eight northern counties were about 445,000 and in Westchester, about 265,000. Thus, if the draft was from the whole district, the chance that any single juror would be "rural" would be about sixteen per cent; and, if the eight counties were excluded the chance would be about seven per cent. In other words if the northern counties were included, an accused would have about an even chance of getting two "rural" jurors on a panel of twelve; and, if they were excluded, he would have not quite an even chance of getting one. The interest at stake — assuming that we are dealing with any serious interest at all — can be no greater than this, unless the line should be drawn at villages of smaller population. Those interested in political speculation may of course pursue such studies at their pleasure; but it is obvious that under any definitive of "rural," some "rural" jurors would be called.

It has indeed been stated5 that jurors must be drafted "without systematic and intentional exclusion" of any "geographical," as well as of any "social, religious, racial" or "political" group; and that may well forbid the officials who draw up the lists from excluding any part of the district at their own choice. We assume that they may not do so; but if they do not, "geographical" uniformity is satisfied, for the district and circuit courts have had power since the first Judiciary Act of 17896 to divide a district territorially in the interest of an impartial trial, of economy, and of lessening the burden of attendance. There cannot be the faintest question of the constitutionality of this statute; the courts have again and again recognized its validity.7 Furthermore, it would be impossible in practice to administer it, if it were a condition that the divisions made must be so homogeneous that they showed an equal percentage of all possible groups. There are probably no districts in the Union, which can be divided without disclosing in the sections different racial, religious, political, social or economic percentages. To demand that they shall not, would be a fantastic pedantry which would serve no purpose and would put an end to the statute.

The argument proceeds, however,...

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