United States v. Lynch

• Decision Date: 03 October 1966
• Docket Number: No. 15491.,15491.
• Citation: 366 F.2d 829
• Parties: UNITED STATES of America v. Peter LYNCH, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

366 F.2d 829 (1966)

UNITED STATES of America v. Peter LYNCH, Appellant.

No. 15491.

United States Court of Appeals Third Circuit.

Argued April 12, 1966.

Decided October 3, 1966.

Frederick Klaessig, Jersey City, N. J., for appellant.

Donald Horowitz, Asst. U. S. Atty., Newark, N. J., (David M. Satz, Jr., U. S. Atty., Newark, N. J., on the brief), for appellee.

Before McLAUGHLIN, GANEY and FREEDMAN, Circuit Judges.

OPINION OF THE COURT

GANEY, Circuit Judge.

James Callahan and Peter Lynch were charged in a nine-count indictment with having embezzled, on several occasions, funds belonging to Local No. 1, Checkers, Clerks and Talleymen's Union, I. L. A., AFL-CIO, in violation of § 501(c) of the Labor-Management Reporting & Disclosure Act, 29 U.S.C.A. § 501(c).¹ Callahan was one of the local's three secretary-treasurers, and Lynch was one of its eight elected business agents. Their jurisdiction extended over the waterfronts of New Jersey. Callahan died prior to trial. Lynch, who went to trial in December of 1964, was found guilty by a jury on the ninth count of the indictment and not guilty as to the seventh and eighth, which charged the same offenses only at different times. After denying his alternative motions for arrest of judgment² and a new trial, the court sentenced him to prison for six months. He appealed.

His first claim here, is that the evidence was insufficient to support the charge under Count IX. That count charged that on or about April 5, 1963, at Hoboken, New Jersey, Lynch, while a business agent of Local No. 1, did willfully "embezzle, steal, abstract and convert to his own use the sum of $170" belonging to the local.³ Thus, the prosecution must have shown, not only that Lynch collected the $170, which was an initiation fee, belonging to the local, but that he willfully converted it to his own use.⁴ See Taylor v. United States, 320 F.2d 843, 850-851 (C.A. 9, 1963). There was no direct proof that he retained the $170. The prosecution maintains that the jury was free to infer that Lynch willfully converted the $170 payment to his own use from the circumstances under which he received the money and the fact that the local's membership records did not mention Anthony Gentile, the name of the waterfront worker who paid the money to Lynch, or note any receipt of the $170.

Gentile testified that he desired to become a member of the local, that Lynch told him it would cost $200 in cash to join, that he borrowed that amount, that sometime in 1963 he paid it to Lynch and in return received from him a membership dues booklet wherein he was credited with having paid $30 for six months dues, and that he did not get a receipt for the remainder of $170, the initiation fee. The dues booklet contained the number 4447 which supposedly referred to the page of the local's ledger book in which the notation of Gentile's dues payments would be recorded. As of the time of trial, the local's membership roll did not list Gentile as a member and its records did not reflect that any money had been collected from him.

The constitution of the local set the initiation fee at $500 and required all applicants for membership "shall appear before the membership at a regular meeting prior to their being accepted." In practice, however, the formalities were not followed and the $500 limit was not enforced. The amount charged was left to the discretion of the secretary-treasurer or whatever the traffic could bear. In a number of instances, in order to increase membership and service the loading and unloading of ship cargo, no initiation fee was charged to new members.

Frank L. McCarthy, the senior secretary-treasurer of the local, informed the jury that although the local's constitution did not authorize them to do so, business agents did collect dues and initiation fees. According to his testimony, when Lynch collected the money from Gentile it became Lynch's duty to turn it over to Callahan, the secretary-treasurer of Local No. 1 for the area of New Jersey, and report the fact to him that $30 of the $200 represented union dues and $170 initiation fees. It was then Callahan's job to transport the money, along with a day sheet denoting the person from whom the money was received in the first instance, to the main office in New York City where the books of the local, over which Lynch had no control, were kept. There entries would be made on the appropriate numbered dues card or page bearing the name of the particular dues paying member. The money would be deposited in the local's bank account by Mrs. Albina Livsey, secretary of the local. It was stipulated that if certain witnesses were called they would testify that they paid money directly to Callahan as initiation fees for membership in Local No. 1 during January, March and April of 1963. An examination of the books and records in evidence, however, showed no such entries.

What may be inferred from these facts? It is possible that Lynch did retain $170 out of the $200 handed him by Gentile. But a defendant is not to be convicted on a possibility alone. It is also possible that Callahan received the money from Lynch but either by inadvertence, carelessness or design never turned it over to the New York office. The prosecution did not attempt to prove that Callahan, the one to whom Lynch should have transferred it, did not receive the money. The prosecution cannot be heard to argue that the latter situation is highly improbable. It accused Callahan of also having embezzled funds (initiation fees) of the local, and at the trial the prosecuting attorney told the jury there was no doubt in his mind that he was a crook where initiation fees were concerned. Moreover, in the early part of 1963 Callahan was ill from cancer of the stomach. It is also possible that Callahan or someone else placed the money in the local's treasury without a specific notation having been made as to its origin. Here, again, the prosecution made no attempt to prove that the money never reached the local's bank account.

The fact that Lynch asked for cash...