United States v. Wolfson, Crim. A. No. 1909.

• Decision Date: 03 February 1971
• Docket Number: Crim. A. No. 1909.
• Parties: UNITED STATES of America, Plaintiff, v. Nathan WOLFSON, William F. Emmons et al., Defendants.
• Court: U.S. District Court — District of Delaware

322 F. Supp. 798

UNITED STATES of America, Plaintiff, v. Nathan WOLFSON, William F. Emmons et al., Defendants.

Crim. A. No. 1909.

United States District Court, D. Delaware.

February 3, 1971.

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F. L. Peter Stone, U. S. Atty., and L. Vincent Ramunno, Sp. Asst. U. S. Atty., Wilmington, Del., for plaintiff.

Donald C. Taylor, Wilmington, Del., for defendant, Nathan Wolfson.

William D. Bailey, Jr., Wilmington, Del., for defendant, William F. Emmons.

OPINION

LATCHUM, District Judge.

Defendants were charged with conspiracy to violate the Federal mail fraud statute and with numerous substantive violations of that statute. Following their conviction by a jury on all counts submitted, the defendants moved for a new trial or for judgments of acquittal. Argument was heard on the motions on October 14, 1970.

The Indictment

On June 7, 1968 the Grand Jury returned a twenty-nine count indictment against Nathan Wolfson, William F. Emmons, Albert Frost, James B. Thompson and Edward Fishbein. Count 1 charged all of the defendants, under 18 U.S.C. § 371, with a conspiracy to violate the mail fraud statute, 18 U.S.C. § 1341. Counts 2 through 29 charged the various defendants with substantive violations of the mail fraud statute.

The first count alleged that the defendants conspired together to use the mails to further a scheme to defraud a Toronto, Canada insurance company, Agents General Insurance Company, Ltd. ("Agents General"), and persons whom they induced to purchase insurance in Agents General. Twenty-four elements of the scheme were set forth. Basically the defendants were charged with operating and utilizing several corporations, viz., Excess Insurance Corporation of America ("Excess"), Canadian and British Insurance Managers, Ltd.¹ ("Canadian and British, Ltd."), Canadian and British Insurance Managers, Inc., Insurance Reporting Service, Inc., and Interstate Reporting, Inc. (¶¶ 1-5)² and with maintaining offices at 2008 and 2008½ Pennsylvania Avenue in Wilmington, Delaware, 1 State Street and 34 Batterymarch Street in Boston, Massachusetts and in the Brandywine Shopping Center in Glen Mills, Pennsylvania. (¶¶ 1-5). The defendants were alleged to have induced George Cooper and Agents General in December of 1965 to enter into a contract whereby Canadian and British, Ltd. was appointed the United States representative and agent for Agents General. (¶ 6).³ Also in December of 1965 it was charged that Canadian and British, Ltd. appointed Excess as its sub-agent for selling insurance in the United States. (¶ 7).

It was alleged that various agents throughout the United States were induced to place insurance with Agents General through Excess and Canadian and British, Ltd. (¶ 8), that insurance policy cover notes for Agents General insurance were issued by the defendants and not reported to that company (¶ 14), that premiums were not remitted to Agents General (¶ 15), that a false bordereau⁴ and falsified copies of two cover notes⁵ were submitted to Agents General (¶¶ 17-18) and that claims arising under these cover notes were intentionally not reported to Agents General. (¶ 22). In addition, the defendants were charged with writing insurance on Agents General prior to the date Agents General received authorization and approval of the Superintendent of Insurance for the Province of Ontario (¶ 13), with writing insurance on Agents General in excess of the company's authorized liability limit and for unauthorized risks (¶ 20), and with writing insurance after April 14, 1966 on Agents General and after being informed that the latter company's license had been restricted to forbid it from accepting risks outside of Ontario. (¶ 21). It was further contended that the scheme involved the failure to settle claims (¶ 23) and the collection of deductible amounts due under Agents General policies with no intention of settlement. (¶ 24). In addition the defendants were charged with reinsuring policies of National Alliance Insurance Company, Ltd. and Great Fidelity Insurance Company, Ltd.⁶ with Agents General without notifying the insurer. (¶ 19).

Five overt acts were alleged to have been committed in furtherance of the conspiracy and scheme, viz., (1) the holding of a meeting in mid-December of 1965 in Delaware between the defendants and Mr. George Cooper and Mr. R. A. Percy, representatives of Agents General, (2) the holding of a meeting on February 11, 1966 in Toronto, Ontario, Canada between the defendants and Messrs. Cooper and Percy, (3) the maintenance of offices at 2008 and 2008½ Pennsylvania Avenue in Wilmington, (4) the maintenance and receipt of mail at Post Office Box 949 at Wilmington, and (5) the maintenance of a checking account in the name of Insurance Reporting Service, Inc. at the First National Bank of Wilmington with defendants Wolfson, Emmons, and Frost having authority to draw checks on the account.

The second count of the indictment charged that the defendants in furtherance of their scheme placed a letter in the mails on or about October 3, 1966 addressed to Multi-Line Underwriters of Kansas City, Missouri. Counts 3 through 29 claimed that the defendants received through the mails certain correspondence relating to the alleged scheme.

Defendant Fishbein pleaded nolo contendere to Count 2 of the indictment prior to trial. The remaining four defendants went on trial November 3, 1969.⁷ At the close of the government's case defendant Frost's motion of acquittal was granted without government objection (Tr., p. 1182)⁸ and defendant Thompson's motion of acquittal was granted over the government's objection. (Tr., p. 1312). Motions of acquittal as to defendants Wolfson and Emmons were granted as to counts 11, 12, 16, 17, 18 and 22 of the indictment and denied as to the rest.⁹ (Tr., p. 1312). Counts 8, 9 and 13, which related only to defendant Thompson, became irrelevant and were stricken from the indictment. (Tr., pp. 1400-1401). On November 25, 1969 the jury found defendants Wolfson and Emmons guilty on all remaining counts.¹⁰

As previously noted, the case is before the Court on the motions of Wolfson and Emmons for a new trial, pursuant to Rule 33, F.R.Crim.P., or for judgments of acquittal, pursuant to Rule 29 (c), F.R.Crim.P.

Judge Layton of this Court pointed out in United States v. Pepe, 209 F.Supp. 592 (D.Del.1962), aff'd 339 F. 2d 264 (C.A.3, 1964) that the two motions are quite different. The only ground upon which a Rule 29(c) motion can be based is that "the evidence is insufficient to sustain a conviction." A Rule 33 motion for new trial can be based on any of numerous grounds. Therefore, these two motions will be considered separately.

I. MOTIONS FOR ACQUITTAL

A. Conspiracy Count.

The standard to be applied in passing upon a motion for acquittal after trial under Rule 29(c), F.R.Crim.P., is well settled in this District. "The Court scrutinizes the evidence, including reasonable inferences to be drawn therefrom, from the point of view most favorable to the government and assumes the truth thereof. If there is substantial evidence justifying an inference of guilt, irrespective of the evidence adduced by the defendant, the Court must deny the motion." United States v. McGonigal, 214 F.Supp. 621, 622 (D.Del.1963); United States v. Barber, 303 F.Supp. 807, 811 (D.Del.1969); United States v. Roy, 213 F.Supp. 479, 480 (D.Del. 1963); United States v. Pepe, supra, 209 F.Supp. at 594. The Court must, therefore, examine the evidence adduced at the trial.

Count 1 charged the defendants with conspiracy to commit mail fraud. That offense occurs when two or more persons confederate together to carry out a scheme to defraud by use of the mails. Marrin v. United States, 167 F. 951, 955 (C.A.3, 1909), cert. den. 223 U.S. 719, 32 S.Ct. 523, 56 L.Ed. 629 (1911). In order to violate 18 U.S.C. § 371, a defendant must have knowingly participated in the scheme to defraud. Windsor v. United States, 384 F.2d 535 (C.A.9, 1967).

The Court charged the jury that in order to convict the defendants on the conspiracy count the government was required to prove beyond a reasonable doubt (1) that the conspiracy charged in the indictment was wilfully formed and was existing at the time alleged; (2) that the individual defendant in question wilfully became a member of the conspiracy; (3) that one of the conspirators thereafter knowingly committed at least one of the overt acts charged in the indictment, at or about the time and place alleged; and (4) that such overt act or acts were knowingly done in furtherance of some object or purpose of the conspiracy. In passing upon the present motion the Court must determine whether there is "relevant evidence from which the jury could properly find or infer, beyond a reasonable doubt," that the defendants were guilty as charged. Mortensen v. United States, 322 U.S. 369, 374, 64 S.Ct. 1037, 1040, 88 L.Ed. 1331 (1944).

The first issue is whether the prosecution proved that a scheme to defraud existed. Twenty-two elements of the scheme were set forth in Count 1 and incorporated in the remaining substantive counts.¹¹ It is well established that in a mail fraud case the prosecution does not have to prove each and every element of the scheme alleged. Sasser v. United States, 29 F.2d 76, 77-78 (C.A.5, 1928), cert. den. sub nom. Russell v. United States, 279 U.S. 836, 49 S.Ct. 250, 73 L.Ed. 983 (1929); Cowl v. United States, 35 F.2d 794, 798 (C.A. 8, 1929).

A brief narrative of the evidence adduced at the trial clearly demonstrates that there was placed before the jury ample proof of a "scheme or artifice to defraud" and of a conspiracy involving defendants Wolfson and Emmons to carry out this scheme.

The prosecution's first witness was George Arthur Cooper, the managing director of Agents General. He testified that he had first met Wolfson in October of 1965 when a Mr. Daniel Lang...