United States v. Infanti

• Decision Date: 27 February 1973
• Docket Number: 72-2087.,Dockets 72-2086,458,No. 457,457
• Parties: UNITED STATES of America, Appellee, v. Gabriel INFANTI and Nathan Kurtz, Appellants.
• Court: U.S. Court of Appeals — Second Circuit

474 F.2d 522 (1973)

UNITED STATES of America, Appellee, v. Gabriel INFANTI and Nathan Kurtz, Appellants.

Nos. 457, 458, Dockets 72-2086, 72-2087.

United States Court of Appeals, Second Circuit.

Argued December 13, 1972.

Decided February 27, 1973.

COPYRIGHT MATERIAL OMITTED

Henry J. Boitel, New York City, for appellant Infanti.

John L. Pollok, New York City (Lenefsky, Gallina, Mass, Berne & Hoffman, New York City, on the brief), for appellant Kurtz.

Harold F. McGuire, Jr., Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., S.D.N.Y., S. Andrew Schaffer, Howard Wilson, John W. Nields, Jr., Asst. U. S. Attys., of counsel), for appellee.

Before KAUFMAN, ANDERSON and OAKES, Circuit Judges.

OAKES, Circuit Judge:

Appellants were convicted on August 15, 1972, of the offense of transportation in foreign commerce of four stock certificates, knowing the certificates to have been stolen, in violation of 18 U.S. C. § 2314 and § 2. The certificates were small in number but large in value: one certificate was for 29,371 shares of American Telephone & Telegraph stock and three certificates were for a total of 15,274 shares of Boeing stock; the aggregate market value was about $2 million. Conviction was after a trial by jury, and each appellant received two-year suspended sentences and a $5,000 fine. They argue insufficiency of the evidence, improper venue in the Southern District of New York, and, an argument we hear quite often, lack of a speedy trial under the sixth amendment.

The four certificates were registered in the street name "Cede & Co." used by the Stock Clearing Corporation, a subsidiary of the New York Stock Exchange. They were stored at one of the Stock Clearing Corporation's vaults, either in its building at 44 Broad Street, New York, or at one of nine other locations. Periodic inventories revealed that the AT&T certificate was missing on September 5, 1969, and the Boeing certificates were missing on September 19, 1969. After further searches failed to reveal the certificates, a notice was sent out on September 30 to members of the exchange that these certificates were missing.

Meanwhile, on September 27, two round-trip tickets were purchased at Newark for appellants Kurtz and Infanti to travel via TWA Flight 740 on the 28th from Kennedy Airport to Frankfurt, Germany; the return trip was open-ended, i. e., no specific date or flight for the return was reserved. A Telex message was sent by co-defendant Joseph Seiller to a Max Sperber, informing him of the arrival on the 29th in Frankfurt at 8:15 a. m. of "Mr. Gabriel Infanti" on the specific TWA flight. The Telex went on to state that Infanti "has been instructed to expect to be picked up at the airport by you"; that he would bring with him the four certificates, "endorsed in blank according to law," along with a "corporate resolution showing that the president of the owner's corporation is authorized to sign these certificates"; that Infanti was supposed to receive $825,000 (U.S.) or "40 per cent of Monday market quotation whichever is higher in cash or bankers draft and fly back." The Telex was sent under the cable address ORFICOEAST, an acronym for Organization for International Finance and Commerce or Orfico International, Inc., a firm of which Seiller was president and the letterhead of which contained a Grand Central Station post office box and a Manhattan telephone number. The cable went on to give instructions on how the proceeds of the sale of blue chip stocks at a 60 per cent discount were to be divided and also warned Sperber not to disclose too much information to Infanti so as "to avoid that sic he can walk into some office in Frankfurt and make a deal without our knowledge."

Kurtz, a New Jersey lawyer, and Infanti arrived in due course and checked into the Frankfurter-Hof Hotel, obtaining a relatively small room, Room 407. There they were joined by Sperber and his prospective customer, one Abdul Chbib, who according to a German police inspector, ran "a sort of agency for a sheikdom," and ultimately by a Helmut Moerth, who was Chbib's representative at the Frankfurt office of Merrill Lynch, Pierce, Fenner & Smith. Sperber discussed with Moerth whether it was possible to sell "certificates in Mr. Chbib's account with Merrill Lynch which were not made out in Mr. Chbib's name." Moerth said this was theoretically possible, but he would have to check the certificates to see whether they were in negotiable form and that he would like to check the certificate numbers. He was shown the certificates bearing handwritten endorsements by Cede & Co. and "president Ralph something." He was also shown two plain pieces of paper without any letterhead, one of which said that the bearer was empowered to sell the certificates, and the other specifically that these certificates could be sold in the name or in the account of Mr. Chbib. The letters purported to be signed by Cede & Co. by its president, and — despite the fact that Cede & Co. was not a corporation — purported to bear a corporate seal. When Moerth started to write down the certificate members, Infanti retrieved the certificates and said, "No, I have to get in touch with my principals before I can allow you to do this." Later in the day Chbib and Sperber went to Moerth's office with a paper on which the certificate numbers and share amounts were listed. Merrill Lynch proceeded to check them by cabling their New York office which then contacted the Stock Clearing Corporation which in turn issued on Tuesday, September 30, its previously described "Lost Securities Notice" and an order preventing transfer of the certificates.

Infanti and Kurtz went to London, checked into a hotel without advance reservations, telephoned Chbib on the 30th, stayed a few days, exchanged their Frankfurt-New York return tickets for London-New York tickets, and upon their arrival at Kennedy on October 3 were arrested and searched. Neither had the certificates. On being interrogated, Kurtz denied that he had ever had the certificates in his possession and falsely stated that he had left New York on September 25 and gone to England on the 26th. One of the defendant's own exhibits, a letter from Seiller of ORFICO to one Scholz in Wiesbaden written on September 29 said in part, "Today you should be busy with the clients of our member being in Frankfurt to sell their shares and you should be able to collect the various amounts of money which we have given instructions to Mr. Sperber to pay."

I. The Sufficiency of the Evidence.

The recital of the facts above is enough to answer appellant Infanti's argument that the evidence against him was insufficient because it showed him to be "merely a messenger" having "no substantive knowledge of the transaction." The jury may be taken to have inferred that Infanti, acting as Seiller's agent, was to transfer $2 million in certificates of two major listed companies and receive in return less than 40 per cent of their value. From Infanti's possession of the stolen certificates without a reasonable explanation the jury was entitled to infer that he knew the certificates were stolen. United States v. Minieri, 303 F.2d 550, 554-555 (2d Cir.), cert. denied, 371 U.S. 847, 83 S.Ct. 79, 9 L.Ed.2d 81 (1962). This is not a case where the defendant made any showing that the transportation of securities was a regular part of his occupation, see Freije v. United States, 386 F.2d 408 (1st Cir. 1967), cert. denied, 396 U.S. 859, 90 S.Ct. 129, 24 L.Ed.2d 111 (1969), so as to dispel the inference that he knew these particular certificates were stolen. Furthermore, Infanti's guilty knowledge may also be inferred from the facts that the sale was to be at such a large discount from the market price, cf. United States v. Rosenthal, 454 F.2d 1252, 1254 (2d Cir.), cert. denied, 406 U.S. 931, 92 S.Ct. 1801, 32 L.Ed.2d 129 (1972), that Infanti quickly withdrew the certificates from Moerth when the latter started to copy down the certificate numbers, that the accompanying documents were of a questionable nature and that the overall circumstances of a sale of large listed companies' stocks to a representative of an Arab sheikdom in a Frankfurt, Germany, hotel room were surreptitious. Cf. United States v. DeKunchak, 467 F.2d 432, 436 (2d Cir. 1972).

The question of the sufficiency of the evidence as to Kurtz is, however, far more difficult. In this regard it is of the utmost importance to bear in mind that a conspiracy count against Kurtz was dismissed and the Government withdrew an aiding and abetting charge, 18 U.S.C. § 2, so that Kurtz's conviction was solely on the substantive charge of transporting stolen securities, 18 U.S.C. § 2314. From the evidence, viewed in the light most favorable to the Government, the jury could have inferred that Kurtz accompanied Infanti to Frankfurt, was in the hotel room in Frankfurt during the discussion with Sperber, Moerth and Chbib, and then hurriedly and without pre-planning went to London with Infanti after the negotiations for the sale of the stolen securities had broken off. But there is a total lack of evidence that Kurtz had actual possession of the stolen stock certificates at any time, and thus the inference of knowledge that the securities were stolen raised by possession applicable to Infanti is not applicable to him. Nor can the inference be raised by arguing, as the Government seeks to argue, that Kurtz was in constructive possession of the stolen securities. There was no evidence that Kurtz could set the price for the securities, that he had the final say as to their means of transfer or that he was able to assure their delivery. Proof of at least one of these indicia of dominion and control is necessary before a finding of constructive possession can be made. See United States v. Steward, 451 F.2d 1203, 1207 (2d Cir. 1971); United States v. Febre, 425 F.2d 107, 111 (2d Cir.), cert. denied, 400 U.S. 849, 91 S.Ct. 40, 27 L.Ed.2d 87 (1970). Kurtz's...