United States v. Guterma

• Decision Date: 02 February 1960
• Parties: UNITED STATES of America, Plaintiff, v. Alexander L. GUTERMA, Virgil D. Dardi, Lowell M. Birrell, Robert C. Leonhardt, Louis Levin, Pierre A. Duval, Harry W. Bank, and United Dye & Chemical Corporation, Defendants.
• Court: U.S. District Court — Southern District of New York

189 F. Supp. 265

UNITED STATES of America, Plaintiff, v. Alexander L. GUTERMA, Virgil D. Dardi, Lowell M. Birrell, Robert C. Leonhardt, Louis Levin, Pierre A. Duval, Harry W. Bank, and United Dye & Chemical Corporation, Defendants.

United States District Court S. D. New York.

February 2, 1960.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

S. Hazard Gillespie, U. S. Atty., Southern Dist. of New York, by Jerome Londin and Leonard Glass, New York City, for plaintiff.

Moss, Wels & Marcus (by Richard H. Wels, New York City), for Guterma.

Lord, Day & Lord, New York City, for Leonhardt.

Corcoran, Kostelanetz, Gladstone & Dowell, New York City, for Dardi and United Dye and Chemical Corp.

John F. Dailey, Jr., New York City, for Duval.

EDELSTEIN, District Judge.

Under an indictment charging a conspiracy to violate and substantive violations of the Securities Act of 1933, 15 U.S.C. § 77a et seq., 15 U.S.C.A. § 77a et seq., 48 Stat. 74, and the Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq., 15 U.S.C.A. § 78 et seq., 48 Stat. 881, motions to dismiss have been made by four of the defendants: Alexander L. Guterma, Virgil D. Dardi, Robert G. Leonhardt and United Dye and Chemical Corporation. Only Dardi and the corporate defendant are named in all fifteen counts, but the discussion will be applicable to all the grounds advanced against all counts.

The entire indictment is attacked as vague and conclusory, with an extensive elaboration on the lack of factual allegations. It is true that the indictment could have been drawn with more factual specification, but "* * * the true test of the sufficiency of an indictment is not whether it could have been made more definite and certain, but whether it contains the elements of the offense intended to be charged, `and sufficiently apprises the defendant of what he must be prepared to meet, and, in case any other proceedings are taken against him for a similar offense, whether the record shows with accuracy to what extent he may plead a former acquittal or conviction.'" Hagner v. United States, 285 U.S. 427, 431, 52 S.Ct. 417, 419, 76 L.Ed. 861. By this test, I conclude that the indictment withstands attack.

The first count is a conspiracy charge. The elements of the offense of conspiracy are the agreement, the offense-object toward which the agreement is directed, and an overt act. United States v. Offutt, 75 U.S.App.D.C. 344, 127 F.2d 336, 338. The indictment charges that the named defendants did, during a specified time, conspire with each other, with others named as co-conspirators but not as defendants, and with others unknown, to commit certain offenses against the United States. These offenses are defined generally as the violation of specified sections of the Securities Act of 1933 and of the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, and further, the defrauding of the United States by impeding, impairing, obstructing and defeating the lawful governmental functions of the Securities and Exchange Commission. Succeeding paragraphs refine this generality with a clear indication of the nature and scope of the offenses, including names and dates, and substantially in statutory language. It is true that these offenses are insufficiently alleged to be properly pleaded as substantive offenses. But such pleading is not required. "It is well settled that in an indictment for conspiring to commit an offense — in which the conspiracy is the gist of the crime — it is not necessary to allege with technical precision all the elements essential to the commission of the offense which is the object of the conspiracy * * * or to state such object with the detail which would be required in an indictment for committing the substantive offense * * *. In charging such a conspiracy `certainty to a common intent, sufficient to identify the offense which the defendants conspired to commit, is all that is' necessary. Williamson v. United States, 207 U.S. 425, 447, 28 S.Ct. 163, 52 L.Ed. 278 * * *." Wong Tai v. United States, 273 U.S. 77, 80, 47 S.Ct. 300, 301, 71 L.Ed. 545. The offense objects are, in count one, sufficiently identified in accordance with this standard. "The particularity of time, place, circumstances, causes, etc. * *" is not essential to the sufficiency of the indictment. Glasser v. United States, 315 U.S. 60, 66, 62 S.Ct. 457, 463, 86 L.Ed. 680. To complain of the absence of allegations of specific fact from which it can be determined that a particular defendant entered into a conspiratorial agreement is to complain of the failure to plead evidence from which a jury may ultimately infer his guilt. It is the agreement and the offense-object which must be clearly described, not the detailed participation of each defendant. Inasmuch as it is unnecessary to a finding of guilt under a conspiracy charge that the offense-object be achieved, it is manifestly unnecessary to allege or prove the details of achievement. It is an identification of the offense, rather than its definition, which must be indicated "with certainty to a common intent". Where the indictment alleges, for example, that it was part of the conspiracy for named defendants to file an annual report, Form 10-K, of the corporate defendant for the calendar year 1954 from which they would omit information required to be set forth therein concerning the material interest of another (officer, director and stockholder) defendant in material transactions to which subsidiaries of the corporate defendant were parties, it has unmistakably identified the partial offense-object, without stating the information omitted (or to be omitted), the material interest of the person named or the identity of the transactions. Details of the specificity urged by the defendants to be necessary can by no effort be stretched to essentials. They are a far cry from the allegations omitted in Pettibone v. United States, 148 U.S. 197, 13 S.Ct. 542, 37 L.Ed. 419, where there was no direct allegation that it was the purpose of the conspiracy to interfere with federal court proceedings, there being no allegation that the defendants knew about the injunction; or in Hamner v. United States, 5 Cir., 134 F.2d 592, where there was merely a charge of conspiracy to commit offenses and frauds, followed only by "confused allegations" of what the defendants did; or in Asgill v. United States, 4 Cir., 60 F.2d 780, where the charge merely recited the purpose of the performance of certain unlawful acts. Overt acts having been pleaded, the elements of the conspiracy have been set forth in the indictment with sufficient particularity for the defendants to understand what they are charged with having conspired to do, in "a plain, concise and definite written statement of the essential facts constituting the offense charged * * *", Rule 7(c), Federal Rules of Criminal Procedure, 18 U.S.C.A.

Count two charges the willful failure to set forth certain information in an annual report of the corporate defendant required to be filed with the New York Stock Exchange, in violation of sections 78m and 78ff(a) of Title 15 United States Code, 15 U.S.C.A. §§ 78a, 78ff(a). Section 78m commands every issuer of a security registered on a national securities exchange to file with the exchange, in accordance with such rules and regulations as the Commission may prescribe, generally described information and documents, including annual reports, as prescribed by the Commission. Section 78ff (a) provides that any person who willfully violates any provision of the chapter, or any rule or regulation thereunder, the observance of which is required under the terms of the chapter, shall upon conviction be subject to the specified penalties. Thus, the crime consists of the willful failure to set forth identified information required by the Commission in a specified document prescribed by the Commission. Count two adequately incorporates the elements of the crime. It charges three of the defendants by name with willfully and knowingly failing to set forth in an annual report, Form 10-K, prescribed by the Securities and Exchange Commission, the required information about the approximate amount of and material interest, direct or indirect, of Lowell M. Birrell, a director and officer of the corporate defendant, in material transactions during a specified period of time and with specified persons. The defendants are fully and fairly informed of the charges they are required to answer, without any further statement of facts showing how the alleged omission was material, what the particular transactions were, or the amount of and material interest of the defendant-director.

The remaining counts have been drawn substantially in the language of the statute and regulations which the defendants are charged with violating, with particularization of generic language. When statutory language alone embodies all the elements of the crime, clearly informing defendants what the charges are so that they are able to prepare their defenses and plead the judgments in bar of any further prosecutions for the same offense, it is sufficient. United States v. Debrow, 346 U.S. 374, 74 S.Ct. 113, 98 L.Ed. 94. United States v. Achtner, 2 Cir., 144 F.2d 49; United States v. Palmiotti, 2 Cir., 254 F.2d 491; United States v. Varlack, 2 Cir., 225 F.2d 665. The situation is otherwise, of course, where the statute itself omits an essential element of the offense or includes it only by implication. See Robertson v. United States, 5 Cir., 168 F.2d 294, 295. In United States v. Carll, 105 U.S. 611, 26 L.Ed. 1135, for example, an indictment alleging in the words of the statute that the defendant, feloniously and with intent to defraud, did pass, utter and publish a falsely made, forged, counterfeited and altered obligation of the United States, but not further alleging that the defendant knew it to be false, forged and counterfeited, was insufficient. The knowledge...