United States v. Rabinowitz, 15138.

• Citation: 327 F.2d 62
• Decision Date: 22 January 1964
• Docket Number: No. 15138.,15138.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Samuel RABINOWITZ, a/k/a Samuel Robbins, Stanford Sikov and Patrick Howard, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

327 F.2d 62 (1964)

UNITED STATES of America, Plaintiff-Appellee, v. Samuel RABINOWITZ, a/k/a Samuel Robbins, Stanford Sikov and Patrick Howard, Defendants-Appellants.

No. 15138.

United States Court of Appeals Sixth Circuit.

January 22, 1964.

Thomas A. Howard and Leonard Ziskie, Detroit, Mich., for appellants.

William H. Merrill, Detroit, Mich. (Lawrence Gubow, U. S. Atty., William H. Merrill, Chief Asst. U. S. Atty., Detroit, Mich., on brief), for appellee.

Before CECIL, Chief Judge, PHILLIPS, Circuit Judge, and TAYLOR, District Judge.

TAYLOR, District Judge.

The defendants were indicted on five counts for violation of the mail frauds statute (Title 18 U.S.C. § 1341), and for violation of the statute against aiding and abetting (Title 18 U.S.C. § 2) and on one count for violation of the conspiracy statute (Title 18 U.S.C. § 371). At the arraignment each defendant stood mute and a plea of "Not Guilty" was entered for each. Before the trial, defendant Sikov changed his plea to "nolo contendere" and received a suspended sentence.

Defendants, Rabinowitz and Howard, were each found "GUILTY of the charges contained in the indictment." Each was given a sentence of eighteen months and each was made "eligible for parole at such time as the board of parole may determine." Each appealed.

Count One of the indictment alleged in substance that the three defendants devised a scheme to defraud Mrs. Bernice Cummings, Mrs. Alice Hysell, Mrs. Carol Hanko and others of the general public by inducing them by fraudulent representations to purchase a certain brand of knitting machine being offered for sale by said defendants. As a part of said scheme to defraud it alleged that they organized a Michigan corporation known as New York Knitting and Garment Corporation (hereinafter referred to as New York) with themselves as officers, and a Michigan corporation, known as Atlantic Enterprises, Inc. (hereinafter referred to as Atlantic) with themselves as officers; that they rented premises at 18486 Wyoming Avenue, in Detroit, for the operations of both corporations; that they did mail or cause to be mailed post cards to certain recipients representing that the recipient could make money by knitting garments and requesting them to telephone defendants through New York in order to purchase defendants' knitting machines; that they procured telephone service for New York so that the recipients of said postal cards could contact defendants through New York by telephone to purchase defendants' knitting machines; that as a further part of the scheme to defraud they hired salesmen for New York and furnished them with a brochure or pages therefrom containing false representations or promises, to-wit:

(a) "We are distributors of hand knit garments."

(b) "We wholesale hand knit garments like these to Dept. Stores everywhere."

(c) "There is a profitable market for hand-knit garments."

(d) "Our business is good — We buy from Thousands of Ladies like yourself — All earning money in their spare time at home."

(e)"We buy garments from ladies like yourself, but we never get enough garments."

(f) "Our garments sell fast."

(g)"The more money you make * * * The more money we make!"

(h) "Look at the tremendous profits in knit garments! These knit neckties sell for $1.50 to $2.00. The yarn costs only 25¢."

(i) "Our method is so easy a child can do it."

(j) "We teach you in a matter of minutes, even if you have never knitted before."

(k) "The ever-popular stole, always a best seller."

(l) "The average lady can earn $10 to $25 per week."

(m) "We suggest you put aside part of your profit — This way you are earning money and paying for the machine at the same time."

(n) "This most popular Regina Princess is the only commercial home knitter that duplicates stitches exactly as hand knitting."

(o) "999 out of 1000 women learn the operation in one lesson at our training center."

(p) "We have several big garment orders to fill."

(q) "The company formerly rented the machines but the women prefer to buy them."

(r) "You can pay for the machine out of earnings."

(s) "It will not be necessary to pay for the machine out of personal funds."

and that on or about October 16, 1957 the defendants caused a post card to be placed in an authorized depository addressed to Mrs. Julian Cummings, 37375 Carpathia, Utica, Michigan in violation of Secs. 1341 and 2 of Title 18 U.S.C.

Counts Two, Three, Four and Five were similar except that: Count Two alleged the mailing of a post card on May 7, 1958 to Julian Cummings (same address as Mrs. Julian Cummings); Count Three alleged the mailing on February 12, 1958 of a post card to Mrs. L. Hysell, 11709 Camden, Livonia, Michigan; Count Four, the mailing on May 7, 1958 of a post card to Alice Hysell (same address as Mrs. Alice Hysell); and Count Five the mailing on February 16, 1958 of a post card to Mrs. J. Hanko, 13725 Gander, Roseville, Michigan, all in violation of Sections 1341 and 2 of Title 18 U.S.C.

Count Six was the conspiracy count. It alleged in substance that the three defendants conspired amongst themselves and with divers other persons to use the mails in furtherance of the scheme to defraud by means of false representations and promises as set forth in Count One. More specifically, Count Six alleged the following overt acts in furtherance of said conspiracy:

1. that defendants did each of the acts alleged in paragraphs one through seven of Count One 2. that defendants placed or caused to be placed in the mails the postal cards referred to in Counts One through Five.

3. that defendant Sikov made arrangements to purchase Regina Princess knitting machines from George Beck.

4. that "The defendant" (sic) arranged and conducted sales meetings at which salesmen of New York were given instructions by defendants.

5. that on or about March 1958, defendants assigned Edward J. Kasmer to attempt to sell an accumulation of knitted goods at New York.

6. that defendant Robbins hired Louis Mahaffey as a salesman for New York in the spring of 1957.

7. that defendant Howard interviewed Kenneth Cullen (sic) for a job as a salesman for New York in the fall of 1957 and after he was hired instructed him in the selling of knitting machines.

all in violation of Title 18 U.S.C. Sec. 371.

At the end of all the evidence, defendants asked to "renew" a motion for a judgment of acquittal on the ground that the Government had failed to produce substantial evidence to warrant the Court in permitting the case to go to the jury. It does not appear from the record that the motion was made at the end of the Government's case in chief. But since the motion was "renewed" we may assume that it had been initially made then.

The appeal challenges in general the sufficiency of the evidence to prove that defendants devised a scheme to defraud in violation of Sec. 1341 of Title 18 or that they conspired to violate the mail fraud statute in violation of Sec. 371 of Title 18. It further raises the questions whether appellants were prejudiced by the admission of certain evidence and whether they otherwise received a fair trial.

As was stated in United States v. Baren, 305 F.2d 527 (C.A.2), where sufficiency of the evidence is attacked, there is no escape from a meticulous review of the record and of the exhibits introduced. In pursuing the review the Court found, at the outset, that none of the score or more of exhibits which, according to the typewritten record, were introduced on behalf of the defendants have been supplied to this Court. Inquiry was made to the Clerk of this Court and by him to the Clerk of the District Court. These exhibits could not be found. In a close case, such a substantial omission in the record places the Court in a very difficult position. And it has been constrained to review with added care that portion of the record by which the Government sought to establish the guilt of appellants.

Briefly the scheme involved the mailing to feminine prospects by New York of post cards of which the following is typical:

"INTERESTED IN MAKING $15.00 TO $25.00 PER WEEK in your spare time doing piece work in your own home?

No experience necessary, we train you. Knowledge of sewing, knitting or reading patterns — helpful — but not necessary.

If you are interested in knowing more about this work at home, telephone

MRS. O'BRIEN UNiversity 4-0886."

The telephone number was that of New York. If the prospect called in, she would be visited by a salesman who revealed the money-making plan. It called for the purchase from New York by the prospect of a hand knitting machine at a cost of $300.00 (later raised to $350.00). The prospects were advised that they could weave certain specified garments on the machine which would be purchased by New York for cash.

There was ample evidence that the knitting machine was well built and, in proper hands, could be used to knit an astonishing variety of garments. Disappointment arose when some users, even after training by skilled teachers employed by New York, could not develop skills and perseverance to knit and sell garments sufficient to defray the cost of the machine much less to net a return of $15.00 to $25.00 per week.

The evidence shows that New York was incorporated in Michigan in late March 1957 by defendants Patrick J. Howard and Samuel Robbins. The purposes of the corporation as stated in the Articles of Incorporation were:

"To buy and sell, rent, lease and manufacture, deal in and deal with, store and repair knitting machines of every kind and nature whatsoever.

"To buy and sell yarn and garments and other related items of every kind and nature whatsoever.

"To give francises (sic) and distributorships to dealers, to finance knitting machines and other related items of every kind and nature whatsoever."

Thereafter in May or June of 1957, defendant Sikov purchased an interest in the company and through a company of which he was sole owner assigned the distributorship of the Regina Princess...