United States v. Whiting

Decision Date20 September 1962
Docket NumberNo. 264,Docket 27196.,264
Citation308 F.2d 537
PartiesUNITED STATES of America, Appellee, v. Dinty Warmington WHITING, James R. Crowe and Walter J. Sarnitz, Defendants-Appellants.
CourtU.S. Court of Appeals — Second Circuit

J. Robert Lunney, New York City, for appellant, Dinty Warmington Whiting.

Theodore Krieger, New York City (Albert J. Krieger, New York City, on the brief), for defendants-appellants, James R. Crowe and Walter J. Sarnitz.

David R. Hyde, Asst. U. S. Atty., Southern District of New York (Robert M. Morgenthau, U. S. Atty., So. District of New York on the brief), for appellee.

Before WATERMAN, KAUFMAN and MARSHALL, Circuit Judges.

MARSHALL, Circuit Judge.

This is an appeal by three defendants, Dinty Warmington Whiting, James R. Crowe, and Walter J. Sarnitz, from judgments of conviction entered in the United States District Court for the Southern District of New York, Metzner, J., on March 30, 1961, after a trial by jury. The three defendants were each convicted on three substantive counts (Counts I, II, and III) charging separate violations of 18 U.S.C.A. § 1343 by the sending of cables between New York and Rio de Janeiro in furtherance of a scheme to defraud. They were also convicted on a fourth count (Count IV) of conspiring to send these fraudulent cables in violation of 18 U.S.C.A. § 371, the federal conspiracy statute. The defendant Whiting was sentenced to serve four years and seven months in prison on each count, the defendant Crowe to serve four years and ten months in prison on each count, and the defendant Sarnitz to serve four years and five months in prison on each count, with the sentences of each defendant to run concurrently.

Two additional defendants, Lawrence J. Kunz and Victor J. Mari, pleaded guilty to Count IV and were each sentenced to serve one year in prison. Indictments against them as to Counts I, II, and III were dismissed. At trial both men testified as Government witnesses.

Although the appellants make certain claims of erroneous and prejudicial rulings by the trial court, which will be considered presently, their appeal is based primarily upon the contention that the evidence presented by the Government did not fairly establish beyond a reasonable doubt their guilt of the crimes charged. We have carefully considered the record and find the evidence ample to support the judgment of the District Court. Because we find no merit to any of the other claims made by the defendants, the judgments of conviction must be affirmed.

On the basis of the evidence introduced by the Government, the jury could have found the following facts:

In August 1960 Sarnitz approached Mari and Kunz, both employees of the Bank of America-International in New York, with an offer of $125,000 for Mari and $250,000 for Kunz if they would send a cable from the Bank of America-International to the Banco do Brasil in Rio de Janeiro, using a confidential international banking cable code known only to a few employees of each bank, including Kunz. Both men accepted the offer. Meetings were held by Mari, Kunz, Sarnitz, and Crowe; Sarnitz made at least three telephone calls to Whiting in Rio de Janeiro. A cable — which originally named Whiting as beneficiary but later was changed to name Crowe — was drafted. Finally, on August 16, 1960, after Crowe had flown to Rio de Janeiro, Kunz transmitted over the Bank of America's wire to the Banco do Brasil the cable that forms the basis of Count I:

"WE HAVE RECEIVED PAYMENT ORDER VALUED AT US DOLLARS THREE MILLION FROM BANCO DI NAPOLI NEW YORK STOP UNDER INSTRUCTIONS OF JAMES RILEY CROWE AS BENEFICIARY THEREOF WE HEREBY TRANSFER AND CREDIT THIS PAYMENT ORDER TO YOUR ACCOUNT OR YOUR ASSIGNEE."

The message was repeated five times bearing the amount of $3,000,000. On a sixth message, the amount was changed to $5,000,000, making a total of $20,000,000.

When the Banco do Brasil received this cable, it sent a return cable to the Bank of America requesting confirmation. Later that same day Whiting went to the office of All America Cables and Radio in Rio de Janeiro and sent to the Bank of America in New York the cable which forms the basis of Count II:

"DISREGARD AND CANCEL CABLE TODAY SATELGERAL RIO."

The term "SATELGERAL" is the cable code name for Banco do Brasil-General Management. On the line of the form requesting the name of the sender, Whiting wrote, "J. Feirrara & Cia, Av. Rio Branca 164." Both cables — the request for confirmation sent by Banco do Brasil and the "disregard and cancel" cable sent by Whiting — were given to the appropriate official in the Bank of America, but no action was taken. Sarnitz also talked to Whiting by telephone during this period.

The following day, August 17, 1960, Sarnitz received from Kunz the confidential banking test code number for that day as well as several secret cable code words; he then went to the Western Union office in the Waldorf-Astoria Hotel in New York and sent to the Banco do Brasil the telegram which forms the basis of Count III:

"FIVETHREE SIX BSUUI WE CONFIRM PAYMENT ORDERS JAMES RILEY CROWE FROM AUGUST SIXTEENTH IN ALL PARTICULARS EXCEPT FINAL THREE WORDS IN ALL SIX MESSAGES QUOTE OR YOUR ASSIGNEES UNQUOTE WHICH ARE HEREBY DELETED XRUID."

The words "FIVETHREE SIX," "BSUUI," and "XRUID" were written in the secret bank code. On the line of the Western Union form requesting the name of the sender, Sarnitz wrote "Frederick Johnson, Hotel Gladstone, N. Y." When this message was received, the Banco do Brasil again sent a cable to the Bank of America requesting confirmation. Upon receipt of that cable in New York, the Bank of America began an investigation. All five defendants were subsequently arrested.

To sustain these convictions there must be evidence from which the jury could conclude beyond a reasonable doubt (1) that the defendants devised a scheme to defraud the banks involved by means of false representations; (2) that they caused the communications listed in the indictment to be sent in interstate or foreign commerce for the purpose of executing the fraudulent scheme; and (3) that they acted as part of an illegal conspiracy.

The Count I cable sent by Kunz from the Bank of America to the Banco do Brasil was clearly false and fraudulent. It was sent without the knowledge of any authorized official of the Bank of America. The Banco di Napoli had not transmitted to the Bank of America the payment orders mentioned in the cable, the Bank of America had not received the payment orders mentioned and did not intend to transfer and credit them to the Banco do Brasil, and Crowe was not a customer of the Banco di Napoli or the Bank of America. Although no money was ever paid out to the defendants by the Banco do Brasil, the fact that a scheme to defraud fails of its purpose is not a defense. Hoffman v. United States, 249 F.2d 338, 341 (9th Cir. 1957). And it should be noted that the comptroller of the Bank of America testified that in his opinion had the Banco do Brasil relied upon the Count I cable and paid out the funds, the Bank of America would have been held liable.

The Count II and Count III cables were similarly false and fraudulent. Although the Count II cable was signed by the cable code name meaning the Banco do Brasil, that Bank did not authorize its transmission and had no knowledge that it was being sent. The Count III cable, although including secret cable code words, was sent, like the Count I cable, without the knowledge or authority of the Bank of America. And neither Whiting nor Sarnitz signed his real name on the cable form line asking the name of sender. Both cables were designed to prevent an investigation by the two banks involved.

The evidence as to all three defendants is clearly sufficient as to all the constituent elements of the crimes alleged, including knowledge and intent, to sustain their convictions. There was a substantial basis in the Government's evidence from which the jury could...

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