United States v. Sampson

• Citation: 83 S.Ct. 173,371 U.S. 75,9 L.Ed.2d 136
• Decision Date: 19 November 1962
• Docket Number: No. 69,69
• Parties: UNITED STATES, Appellant, v. Ralph L. SAMPSON et al
• Court: United States Supreme Court

371 U.S. 75

83 S.Ct. 173

9 L.Ed.2d 136

UNITED STATES, Appellant,

v Ralph L. SAMPSON et al.

No. 69.

Argued Oct. 18, 1962.

Decided Nov. 19, 1962.

Howard P. Willens, Washington, D.C., for appellant.

Randolph W. Thrower, Atlanta, Ga., for appellees.

Mr. Justice BLACK delivered the opinion of the Court.

The appellees were indicted in a United States District Court on charges that they had used the mails 'for the purpose of executing' a fraudulent scheme in violation of 18 U.S.C. § 1341, 18 U.S.C.A. § 1341,¹ and that they had conspired to so use the mails.² It is clear that the allegations, if proved, would show that a fraudulent scheme existed and that the mailings charged in fact occurred. The District Court dismissed 34 of the counts, however, on the ground that the facts alleged showed that the mails were not used 'for the purpose of executing' the alleged scheme, as required by the statute. The court also dismissed the conspiracy count without giving additional reasons. The case is properly here on direct appeal by the Government under 18 U.S.C. § 3731, 18 U.S.C.A. § 3731. The only question we must decide with reference to the 34 substantive counts is whether the allegations in the indictment were sufficient to permit a jury to find that the mails were used 'for the purpose of executing' the fraudulent scheme. Whether the indictment sufficiently charges that the mails were so used depends upon its allegations.

In brief summary, these allegations are:

The individual defendants were officers, directors, and employees of a large, nationwide corporation, also a defendant, with regional offices in various States. The defendants purported to be able to help businessmen obtain loans or sell out their businesses. Although lavish promises were freely given, the defendants did not intend to and in fact did not make any substantial efforts to perform these promised services. As a part of this scheme, the defendants secured salesmen who were trained to deceive those with whom they dealt by innuendos, half-truths, and false statements.³ These defendants, according to the allegations, were not mere small-time sporadic swindlers but rather they have deliberately planned and devised a well-integrated, long-range, and effective scheme for the use of propaganda, salesmen, and other techniques to soften up and then cheat their victims one by one. Under the plan, personal calls were made upon prospects who were urged by false and fraudulent representations to sign applications asking defendants to help them obtain loans or sell their businesses. The salesmen further urged prospects, many times successfully, to give a check for an 'advance fee,' all being assured that if their applications were not accepted at the regional office the 'advance fee' would be refunded. Payments of the fees were promptly converted by the salesmen into cashiers' checks on local banks and then forwarded with the applications to the corporate regional offices where all applications, as a part of the plan, were accepted if signed and accompanied by a check for the right amount. The fees were immediately deposited in the defendants' bank account. Although the money had already been obtained, the plan still called for a mailing of the accepted application together with a form letter to the victims 'for the purpose of lulling said victims by representing that their applications had been accepted and that the defendants would therefore perform for said victims the valuable services which the defendants had falsely and fraudulently represented that they would perform.'⁴ It was further a part of the scheme to compile rudimentary financial data and forward it to various lending agencies and to inform the victims of this fact in an attempt to convince them that they had not been defrauded and that the defendants were performing meaningful services on their behalves. Moreover, under the plan defendants, while refusing to refund the fee, pretended to investigate complaints from their victims and encouraged their salesmen to deny having made false representations, all the time seeking by false and fraudulent statements to make the victims believe that the defendants had faithfully performed and would continue to perform the promised services. In short, the indictment alleged that the scheme, as originally planned by the defendants and as actually carried out, included fraudulent activities both before and after the victims had actually given over their money to the defendants. Of course, none of these charges have been established by evidence, but at this stage of the proceed- ings the indictment must be tested by its sufficiency to charge an offense.

The use of the mails relied on in the 34 dismissed counts was the mailing by the defendants of their acceptances of the victims' applications for their services. As conceded by the Government, prior to each mailing of an acceptance to a victim the defendants had obtained all the money they expected to get from that victim. The district judge's reason for holding that these counts did not charge a federal offense was that, since the money had already been obtained by the defendants before the acceptances were mailed, these mailings could not have been 'for the purpose of executing' the scheme. For this holding the court relied chiefly on Kann v. United States, 323 U.S. 88, 65 S.Ct. 148, 89 L.Ed. 88 (1944), and Parr v. United States, 363 U.S. 370, 80 S.Ct. 1171, 4 L.Ed.2d 1277 (1960).

In Kann, the defendants defrauded their corporate employer in matters confined to their local region. As a part of their scheme, the defendants had fraudulently obtained checks payable to them which were cashed or deposited at a bank. The use of the mails charged as a violation of the federal statute was the mailing of the checks for collection by the banks which cashed them to the banks upon which they were drawn. Prior to that mailing, the Court found, the defendants had obtained the money they sought, and as far as they were concerned their plan had reached its fruition and come to a complete rest. The scheme, as the Court viewed it, had contemplated no more. The mailing was done by outsiders, the banks, which had no connection whatsoever with the fraud. The checks were mailed for the banks' own purposes and not in any way for the furthering of the fraudulent scheme. In the Court's view it was immaterial to the consummation of the defendants' scheme how or whether the banks which had cashed the checks sought to collect them.

In Parr, the second case upon which the District Court relied, the defendants had obtained gasoline and other products and services for themselves by the use of the credit card of a School District which had authorized the defendants to use the card for the District's purposes only. The mailings complained of in the Parr case were two invoices sent by the oil company to the District and the District's check mailed back in payment. Again the Court was able to find that the mailings by the outsiders were not an integral part of the scheme as planned and executed by the defendants and that, as a matter of fact, it was completely immaterial to them what the oil company did about collecting its bill.

We are unable to find anything in either the Kann or the Parr case which suggests that the Court was laying down an automatic rule that a deliberate, planned use of the mails after the victims' money had been obtained can never be 'for the purpose of executing' the defendants' scheme. Rather the Court found only that under the facts in those cases the schemes had been fully executed before the mails were used. And Court of Appeals decisions rendered both before and after Kann have...