United States v. Weiss, 150.

• Decision Date: 05 June 1939
• Docket Number: No. 150.,150.
• Parties: UNITED STATES v. WEISS et al.
• Court: U.S. Court of Appeals — Second Circuit

103 F.2d 348 (1939)

UNITED STATES v. WEISS et al.

No. 150.

Circuit Court of Appeals, Second Circuit.

April 10, 1939.

Writ of Certiorari Granted June 5, 1939

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Lloyd Paul Stryker, of New York City (Lloyd Paul Stryker and Harold Shapero, both of New York City, of counsel), for appellant Weiss.

Schwartz & Frohlich, of New York City (Theodore Kiendl and Arthur Schwartz, both of New York City, of counsel), for appellant Dr. Goldstein.

Sylvan Schwartz, of Washington, D. C., for appellant Dr. Krupp.

Jacob W. Friedman, of New York City, for appellant Gross.

Lamar Hardy, U. S. Atty., of New York City (John F. Dailey, Jr., and Irving R. Kaufman, Asst. U. S. Attys., both of New York City, of counsel), for the United States.

Before AUGUSTUS N. HAND, and CHASE, Circuit Judges.

Writ of Certiorari Granted June 5, 1939. See 59 S.Ct. 1043, 83 L.Ed. ___.

AUGUSTUS N. HAND, Circuit Judge.

The appellants J. J. Weiss, Gross, Dr. Krupp and Dr. Goldstein were convicted under Title 18, Section 338, U.S.C., 18 U.S.C.A. § 338, of the use of the mails in the execution of a scheme to defraud, and under Title 18, Section 88, U.S.C., 18 U.S. C.A., § 88, of a conspiracy therefor. The scheme involved was to defraud insurance companies by filing false claims representing that the defendants Nelson, Berger and Spitz were permanently and totally disabled when in fact they were not. All three claimants pleaded guilty and testified for the government. Three doctors participated in the scheme, to wit, the defendant Messman, who testified for the government and pleaded guilty, and the defendants Goldstein and Krupp, who stood trial. The other defendants who were indicted for the scheme were the defendants J. J. Weiss and A. L. Weiss, lawyers, and Martin Gross, their runner. Owing to illness the defendant A. L. Weiss obtained a severance during the course of the trial. Defendant J. J. Weiss stood trial and toward the end of the trial conceded that there was no doubt that the claims of defendants Spitz, Berger and Nelson were fraudulent. The chief issue of fact for the jury was whether the defendants who stood trial and have taken an appeal, namely, Weiss, Gross, Dr. Krupp and Dr. Goldstein, participated in the filing of the false claims with guilty knowledge.

Before discussing the merits of the case, we shall deal with the evidence of telephone communications intercepted by means of socalled "wire tapping" by government agents. The appellants say that the admission of that evidence was an error sufficient in itself to call for the reversal of the judgment, irrespective of any other objection. They chiefly rely on the decision of the Supreme Court in Nardone v. United States, 302 U. S. 379, 58 S.Ct. 275, 82 L.Ed. 314, which was rendered on an appeal from this court. United States v. Nardone, 2 Cir., 90 F.2d 630. There both interstate and intrastate telephone messages were intercepted through wire tapping and used as proof in a criminal trial. We held that under Section 605 of the Federal Communications Commission Act, U.S.C. Title 47, Chapter 5, § 605, 47 U.S.C.A. § 605, interstate communications were not inadmissible and assumed that the act did not cover the intrastate messages. The Supreme Court reversed our decision on the ground that the use of interstate messages as evidence was essentially forbidden by the clause of § 605, supra, which provides that: "no person not being authorized by the sender shall intercept any communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person". In reaching the above conclusion it cannot be supposed that the Supreme Court was intending to deal with anything but the admissibility of interstate communications, for they were the only messages, the reception of which we had treated as open to doubt. Moreover, the context of the Federal Communications Act seems to limit the application of § 605 to interstate and foreign messages. As declared in the first section of the act, U.S.C. Title 47, § 151, 47 U.S.C.A. § 151, the Communications Commission was created for the purpose "of regulating interstate and foreign commerce in communication by wire and radio". In the next section, 47 U.S.C.A. § 152, it was provided that:

"(a) The provisions of this chapter shall apply to all interstate and foreign communication by wire or radio * * *.

"(b) Subject to the provisions of section 301, nothing in this chapter shall be construed to apply to or give the Commission jurisdiction with respect to (1) charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate communication service of any carrier, * * *".

It is argued that because the clause of § 605 on which the Supreme Court relied in Nardone v. United States, 302 U.S. 379, 58 S.Ct. 275, 82 L.Ed. 314, is general in its language prohibiting interception and disclosure of communications while the other clauses of § 605 are in terms limited to "interstate or foreign communication" it embraces intrastate messages. This seems to us a forced construction which flies in the face of the first and second sections of the act that we have quoted. Moreover, the third clause of § 605, which provides that "no person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by wire or radio and use the same or any information therein contained for his own benefit or for the benefit of another not entitled thereto" contains a limitation to interstate and foreign communications which is repugnant to the supposed unlimited prohibition of the second clause. It should also be noticed that the second clause of Section 605, which was relied on by the Supreme Court in Nardone v. United States, supra, prohibits intercepting and divulging or publishing the contents of intercepted messages. It cannot be maintained that intercepting alone is prohibited and that the clause relates to intrastate as well as to interstate and foreign messages because interception would affect both. Divulging one or the other can be readily dealt with separately and the section as a whole seems only to forbid divulging interstate or foreign messages. We, therefore, regard the decision of the First Circuit in Valli v. United States, 94 F.2d 687, rather than that of the Sixth Circuit in Diamond v. United States, 94 F.2d 1012, or of the Third Circuit in Sablowsky v. United States of America, 101 F.2d 183, as properly interpreting § 605. We realize that in Olmstead v. United States, 277 U.S. 438, 48 S.Ct. 564, 72 L.Ed. 944, 66 A.L.R. 376, three of the minority took the view that wire tapping in violation of a state penal statute was so contrary to good morals that messages thus obtained ought not to be admitted in evidence in a United States court, and that Justices Brandeis, Butler and Stone said that the messages were obtained in violation of the Fourth Amendment of the Constitution, U.S.C.A., and their admission under objection was a violation of the Fifth Amendment. In the present case, however, no law of New York prohibited obtaining messages by wire tapping. Messages thus obtained are admissible in the New York courts and the government in using them was not accepting the fruits of a crime as in Olmstead v. United States, 277 U.S. 438, 48 S.Ct. 564, 72 L.Ed. 944, 66 A.L.R. 376. We are bound by the decision of the majority in the latter case and are impressed by the omission of the Supreme Court to say that Section 605 is broad enough to include intercepted intrastate messages though it relied on that section to support its decision in Nardone v. United States, 302 U.S. 379, 58 S.Ct. 275, 82 L.Ed. 314, that intercepted interstate messages were improperly admitted in evidence. In spite of some hesitation because of the decisions in Sablowsky v. United States, 3 Cir., 101 F.2d 183, and Diamond v. United States, 6 Cir., 94 F.2d 1012, and of the dissenting opinion of Judge Morton in Valli v. United States, 1 Cir., 94 F.2d 687, we hold that there was no error in admitting the proof derived through wire tapping.

The point is made that one of the communications obtained through wire tapping and admitted in evidence (Exhibit 307) was an interstate call. That conversation was between Weiss in New York and Gross, whose definite whereabouts was not shown. But Gross once testified that he was in the traffic court at the time he called up Weiss. He afterwards said that he did not remember where he was. In the transcript of the conversation he, however, said to Weiss: "I'll be down in a few minutes". It is hard to believe he would have said this if he had been outside the state. We think there was enough to justify the trial judge in holding that Gross was within the state at the time and that the communication was intrastate.

It is argued, that even if the conversations obtained through wire tapping were erroneously admitted, the error was not prejudicial because the factum of the conversations was conceded by the defendants affected. This argument is not convincing. It may be said with some plausibility that the defendant Goldstein was not prejudiced since he was neither a party to, nor mentioned in, the conversations obtained through wire tapping. These conversations, however, showed that Goldstein's codefendants were engaged in a conspiracy which other proof indicated that he joined. They also gave credence to the testimony of Messman. Such evidence weighed against Goldstein and his conviction ought not to stand if the communications implicating the others were improperly received. As regards the defendant Krupp, he seems to have admitted the conversations in which he was concerned. But it cannot be said that evidence which he was compelled to explain and justify was not legally prejudicial if improperly admitted under his objection. The defendant Gross denied some of the conversations relating to him which...