United States v. Stone

• Decision Date: 14 January 1972
• Docket Number: No. 20513.,20513.
• Citation: 452 F.2d 42
• Parties: UNITED STATES of America, Appellee, v. Andrew L. STONE et al., Defendants, and Amerbel Corporation and Joseph L. Wilmotte & Co., Inc., Successor to Amerbel Corporation, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

452 F.2d 42 (1971)

UNITED STATES of America, Appellee, v. Andrew L. STONE et al., Defendants, and Amerbel Corporation and Joseph L. Wilmotte & Co., Inc., Successor to Amerbel Corporation, Appellants.

No. 20513.

United States Court of Appeals, Eighth Circuit.

December 16, 1971.

Rehearing Denied January 14, 1972.

John J. Cole, St. Louis, Mo., for appellants.

James M. Gordon, Asst. U. S. Atty., St. Louis, Mo., for appellee.

Before LAY, HEANEY and BRIGHT, Circuit Judges.

BRIGHT, Circuit Judge.

Amerbel Corporation (Amerbel) and its successor, Joseph L. Wilmotte & Co., Inc. (Wilmotte), appellants herein, New York corporations, were indicted with others, for conspiring to export from the United States to a foreign country "certain arms, munitions and implements of war listed in the United States Munitions List, without having first obtained therefor an export license or written approval of the Department of State," as is required by provisions of the Mutual Security Act (Title 22 U.S.C. § 1934),¹ and the rules and regulations promulgated thereunder (22 C.F.R. § 121.01 et seq.). The indictment also named the Chromcraft Corporation and its successor, Alsco, Inc. (Chromcraft-Alsco), of St. Louis, Missouri, manufacturer of rocket launchers and rocket launcher components, and two of its officers, Andrew L. Stone, President, and Evelyn R. Price, Executive Secretary, as defendants. Also included was Les Forges de Zeebrugge (Zeebrugge), a Belgian arms manufacturer and importer of the armaments in question, as coconspirator but not as codefendant. The indictment covered the period of July 1, 1961 to January 1, 1969.

Chromcraft-Alsco pleaded guilty to a related substantive charge contained in the indictment and its officers, Stone and Price, pleaded guilty to the conspiracy count here under consideration. Amerbel and Wilmotte, after pleas of not guilty, stood trial before a jury. After a finding of guilty, the district court levied fines of $10,000 and costs against each. Wilmotte, for itself and as successor to Amerbel, prosecutes this timely appeal, seeking alternatively an entry of judgment for acquittal, a new trial, or a dismissal as against Amerbel. We affirm the judgments of conviction entered by the district court but determine that only one $10,000 fine may be levied against the defendant corporations for their conspiratorial conduct during the period covered by the indictment.

Joseph L. Wilmotte, an immigrant from Belgium, organized the subject corporations, Amerbel and Wilmotte, in 1956. The corporation, Wilmotte, engaged principally in the importing and exporting of steel products. Amerbel, an abbreviated version of America to Belgium, functioned principally as a purchasing agent for several Belgian firms, including Zeebrugge. In 1958, Amerbel began purchasing armament components along with other products from United States suppliers, and arranged for their overseas transportation to Zeebrugge in Belgium. In addition to acting as purchasing agent, Amerbel acted as a forwarding agent for orders which Zeebrugge had placed directly with the United States manufacturers, including Chromcraft-Alsco.

Amerbel ceased its corporate existence in 1966 when it merged into Wilmotte. After the merger, the prior functions of Amerbel were handled by the "Amerbel Division" of Wilmotte without any change in the location, management, directors, officers, or operating personnel.

Chromcraft-Alsco during the period of the alleged conspiracy misdescribed and mislabeled rocket launchers and rocket launcher components in filling Zeebrugge's direct orders for these items, designating them as "filter tanks" or some other equally innocuous non-military item. In accordance with these designations, Amerbel and later, the "Amerbel Division" of Wilmotte, prepared the documents necessary for shipment of the articles overseas and showed the consignments as consisting of non-military items. Chromcraft-Alsco also falsified the valuations shown on the invoices and shipping documents which it forwarded to Amerbel-Wilmotte. By using this second invoice Chromcraft-Alsco charged Zeebrugge substantially more for the products than the price which it disclosed on Amerbel-Wilmotte's documents. Amerbel-Wilmotte did, however, receive an agent's commission based upon the lower valuation.

Here, appellants concede that the requisite shipping authorizations for the arms shipments in question were not obtained but deny that the evidence disclosed any conspiratorial conduct on their part. Appellants also question the validity of the statutes and regulations, the propriety of the trial court's instructions and rulings on evidence, the manner in which the trial court communicated with the jury, and the assessment of a fine against Amerbel, a non-existent corporation at the time the indictment was returned.

We turn first to the appellants' argument on sufficiency of the evidence. The crucial question of the participation by Amerbel-Wilmotte in the alleged conspiracy centers around the conduct of Susan E. Katz, who, commencing in 1961, served Amerbel as a telephone operator-clerk typist and by 1966, had advanced to the position of assistant secretary in Wilmotte. In this position, she was given the authority to apply for export licenses. Miss Katz wrote a number of letters for her employer which served to implicate both Amerbel and the "Amerbel Division" of Wilmotte as active participants in the scheme to circumvent the control of the United States over the exportation of war materials. On January 18, 1967, she wrote to Chromcraft concerning certain invoices and packing slips which we needed to arrange for overseas shipment of an order of goods which had been received at New York, stating in part, ". . . we wanted to know if your invoices would state that these were filter tank parts in which case no export license would be required. . . ." On March 8th of that year she wrote Chromcraft inquiring about a January order placed by Zeebrugge with Chromcraft for components of rocket launchers to be delivered in Belgium in March, advising, ". . . if these invoices are marked Launcher parts, we will have to apply for an export license from the U.S. Department of State. . . ." On March 13th of the following year she wrote Alsco concerning a box of freight that had arrived in New York labeled "filter tank parts," requesting invoices and packing lists by return mail, and stating:

. . . we would like to have some invoices stating that this material is filter tank parts and not what it actually is. This used to be done in the past and in this way, we can give the required dopy sic to our forwarder\'s.

In fact all these transactions related to rocket launcher components. The evidence disclosed that Miss Katz had learned shipping procedures from her supervisors in Amerbel; first from Amerbel's Manager, Larry Kuznick, who served until March of 1963; and later, from Vice-President Maurice Heyne, who also translated Zeebrugge's correspondence written in French.

From other correspondence offered in evidence, it appears that Miss Katz's letters described a continuing course of corporate conduct. In June of 1962 Manager Kuznick of Amerbel wrote President Stone of Chromcraft:

As I have advised you in the past there is always some considerable difficulty in having the components for the Rockets leave the United States, because of the license required by the State Department.

To-date, we have been rather successful in so far that by using various terms under which many of the articles can be referred, we have been able to expedite shipment without the State Department license.

However, as concerns your two most recent shipments of used LAU-3/A Rocket Launchers for display purposes, we have been unable to find any other terminology or description by means of which shipment can be made without the State Department license. Subsequently, the four Launchers, your invoice No. G7Z-136, have been sitting in New York for a month awaiting the return of the license from Washington. I must say that the bureaucratic handling in the Capital sic over the last year has become much more confusing and time wasting for all matters relating to Rockets.

The jury need not have accepted protestations of defendants' officers of their lack of knowledge of Miss Katz's nonfeasance in failing to obtain proper clearances for the shipments of the war materials in question, particularly since Vice-President Heyne wrote letters describing "filter tank parts" and President Joseph L. Wilmotte of Amerbel-Wilmotte admitted that he knew of no such product.

On review, we find ample evidence to support the guilty verdict in this case. Moreover, we think it immaterial whether or not Amerbel-Wilmotte knew of or benefited from Chromcraft-Alsco's double invoicing by which President Stone of Chromcraft apparently had secreted large sums of money in Swiss bank accounts.

The particular substantive violations which underpin the conspiracy count of the indictment rest upon unlawful export or an intent to export, armaments or war materials contained in the United States Munitions List. Whether the appellants' co-defendants violated other federal laws, with or without appellants' knowledge, is extraneous to the charge against them.

We also reject appellants' contention that the trial court erred in refusing to allow testimony of the double invoicing practices of Chromcraft-Alsco with Zeebrugge or in refusing to charge the jury that the defendants' financial stake (the amount of its commission) would be a factor for the jury's consideration in determining the existence of the conspiracy.² Appellants' reliance on United States v. Falcone, 311 U.S. 205, 61 S.Ct. 204, 85 L.Ed. 128 (1940), is misplaced. There the defendants merely sold products to a distiller who in turn produced alcohol in violation of the revenue laws, but in that case there was no showing that those defendants knew of the existence of the conspiracy....