United States v. Liss, 223.

Decision Date18 October 1943
Docket NumberNo. 223.,223.
Citation137 F.2d 995
PartiesUNITED STATES v. LISS et al.
CourtU.S. Court of Appeals — Second Circuit

Jacob B. Goldberg, of New York City, for Liss, Conte, and Lowenstein.

M. M. Kreindler, of New York City, for Rudy.

Benjamin Adler, of New York City, for Londoner.

Newman Levy, of New York City, for Palmer and Leading Drug Co.

Saul M. Meadow, of New York City, for Cohen, and Huel's Chemists, Inc.

William Lindenbaum, of New York City, for Mainella.

Solomon Millendorf, of New York City, for Geffner.

Albert Lyons, of Brooklyn, N. Y., for Al N. Fox and Max Fox.

Jack J. Elkin, of New York City, for Jaffe.

Robert Roy Dann, of New York City, for the United States.

Before L. HAND, SWAN, and FRANK, Circuit Judges.

Writ of Certiorari Denied October 18, 1943. See 64 L.Ed. 78, 88 L.Ed. ___.

L. HAND, Circuit Judge.

The defendants appeal from judgments of conviction under an indictment charging them with a conspiracy to violate the laws regulating the sale and dispensing of narcotic drugs. Liss and Conte were the prime actors throughout all the events laid in the indictment. In the first two of three phases they confederated with Rudy; later the venture took on an entirely different character, and Rudy dropped out. The other defendants had various parts in the scheme, and, as will appear, some of them were not shown to have been connected with it at all. Londoner and Palmer, who went by the name of the Leading Drug Company, were manufacturing chemists. Al N. Fox and Max Fox were jobbers, trading as the Recro Drug Corporation. The other defendants were drug and chemical retailers within the larger City of New York. All the defendants complain of various errors committed during the course of the trial, but the chief objection common to all is that the conspiracy embraced several different crimes which should not have been tried as one. These supposed errors, coupled with the failure to connect a number of the individual accused, are the points to be considered. The evidence introduced permitted a jury to find the following facts.

Late in 1939 and early in 1940, Liss, Conte and Rudy concocted a plan to produce synthetic morphine. They equipped a laboratory in North Bergen, New Jersey, and procured the assistance of a chemist named Jackson; but their efforts were fruitless; and this first phase may be disregarded, because, as the judge charged, there was nothing criminal in the enterprise anyway, for the statute did not regulate dealing in anything but derivatives of opium and coca leaves. After discovering that synthetic opium could not be made, the three consulted further with Jackson as to the possibility of extracting opium from such substances as paregoric, "Stroke's Mixture" — a cough medicine — and lead and opium wash: all being "preparations of limited narcotic content," which may lawfully be sold at large, though under certain statutory regulations. These experiments also failed and were abandoned. Rudy dropped out altogether at that stage; he did not appear in any of the subsequent dealings of Liss and Conte with the others, and none of these ever had anything to do with the "paregoric conspiracy," as it may be called. That ended not later than April, 1940, and at about the same time Liss began buying lead and opium wash. It does not definitely appear just what his purpose was: the theory of the prosecution appears to have been that he and Conte meant indirectly to buy the wash in quantity from Londoner's company and to return it circuitously to Londoner, who should sell it again. The wash would thus create a kind of revolving fund, the same parcels appearing as a series of sales of different parcels on Londoner's books, which should justify large purchases of free opium by him as an ingredient. This free opium Londoner would then dispose of to Liss and Conte illicitly; and they would sell to addicts. If such was the plan, it was never proved; and the prosecution does not now seek to maintain the conviction on that theory. What it does assert is that it proved a conspiracy to violate the regulations governing the sale of "preparations of limited narcotic content." § 2551(a), Title 26 U.S.C.A. Int.Rev.Code. That section relieves such preparations from the ordinary regulations for the sale of preparations of opium, but only upon several conditions: first, they shall be dispensed only "as medicines"; second, a record shall be kept of all sales for two years; third, every person dispensing the "preparations" shall register as required in § 3221, and shall pay a special tax of $1.00 a year. Finally, Article 183 of Regulations 5, provides that although orders for such preparations need not be on any particular form, if they are "from a dealer" (that is, not a consumer), they must bear the registry number of the dealer who gives the order. (All dealers must have such numbers.)

Whatever his purpose, Liss began in April, 1940, and continued for about six months, to buy inordinately large quantities of lead and opium wash. Among those to whom he went in April, was Londoner, whom he asked to sell him for his own resale to the owners of race horses, who used it, he said, to medicate the horses' legs. Londoner told him that he could not sell for such purposes because Liss had no registry number, as he would not be selling to him as a consumer; but he suggested that Liss should buy of retailers and jobbers to whom he (Londoner) would sell; and Liss's extremely large purchases were made in that way. Among the retailers to whom Londoner sold were: Cohen and Geffner, who used the name of Huel's Chemists, Inc.; Lowenstein and Jaffe, who used the name, Broed Pharmacy; Mainella, who traded under his own name; and two others who turned state's evidence: Frankel and Garfinkle. Liss bought of all these retailers, and Conte went about and picked up the goods.

The first question is as to combining in one indictment and as a single conspiracy two separate conspiracies: the "paregoric" and the "lead wash." These were separate not only in personnel but in content. The only confederates in the "paregoric conspiracy" were Liss, Conte and Rudy; in the "lead wash conspiracy," Liss, Conte and the druggists. The content of the two was altogether different. The "paregoric conspiracy" was to extract opium from "preparations of limited narcotic content"; the "lead wash conspiracy" was to allow Liss and Conte to procure "lead wash" for use not "as medicine," and for resale contrary to the regulations. Even had the prosecution succeeded in establishing the theory of a "revolving fund," the content of the second conspiracy would have been as different as possible from the first. There was therefore a variance between allegation and proof, and while that is not fatal of itself (Berger v. United States, 295 U.S. 78, 55 S.Ct. 629, 79 L.Ed. 1314), it is not necessarily harmless. The question is like that of joining separate crimes in separate counts of a single indictment, or of consolidating separate indictments for trial; the propriety of either depends upon the danger they create that the jury may confuse the issues. United States v. Lotsch, 2 Cir., 102 F.2d 35; United States v. Smith, 2 Cir., 112 F.2d 83, 85; United States v. Perlstein, 3 Cir., 120 F.2d 276, 281; Firotto v. United States, 8 Cir., 124 F.2d 532, 535.

In such situations it is always possible that a jury may use evidence which connects an accused with another crime, not only as proof of the crime charged against him, but — when there are several accused — as proof of the crime charged against the others. The first danger is greater than the second; and the fusing of the two conspiracies into one was therefore more serious against Liss and Conte — the only two of the accused who were confederates common to both conspiracies — than to Rudy or to the druggists. There was therefore a not wholly imaginary danger that the jury might use the evidence against them cumulatively to prove both charges. If however the conspiracies had been separated into two counts or two indictments it does not seem to us that it would have been improper to try Liss and Conte upon both charges at the same time. The joinder section (§ 557, Title 18 U.S.C.A.), allows the joining of "acts or transactions of the same class of crimes," and that presupposes that the transactions may be quite independent of each other. True, the transactions must always be such as may be "properly joined," but that only means that the likelihood that the evidence will be misapplied is not serious practically. The mere fact that the accused are different in two counts is no longer important, despite what was said in McElroy v. United States, 164 U.S. 76, 80, 17 S.Ct. 31, 41 L.Ed. 355; United States v. Smith, supra, 112 F.2d 83, 85; Firotto v. United States, supra, 124 F.2d 532, 535; Morris v. United States, 5 Cir., 128 F.2d 912, 917. Here it would have been competent upon a trial of Liss and Conte upon the "lead was conspiracy" alone to prove that they had previously tried to extract opium out of paregoric. Their guilt in the "lead wash conspiracy" depended in part upon whether their enormous purchases of "lead wash" were "as medicine," and it was competent on the issue of their intent to show that they had had a criminal intent on earlier occasions. Hence they have no just complaint of the variance.

As to Rudy the only question that can arise is whether he could have been prejudiced by showing that Liss and Conte, accused as his confederates in the first conspiracy, had gone on to commit a kindred crime with the druggists. If he was prejudiced it could only be because the jury reasoned that the corroboration of the guilty disposition of Liss and Conte made it more probable that there had been a "paregoric conspiracy" and that Rudy was a confederate in it. They may of course have so reasoned, but to assume so is really to deny them the...

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