Williams v. United States

• Decision Date: 12 December 1967
• Docket Number: No. 9385.,9385.
• Citation: 402 F.2d 47
• Parties: Robert G. WILLIAMS, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

402 F.2d 47 (1967)

Robert G. WILLIAMS, Appellant, v. UNITED STATES of America, Appellee.

No. 9385.

United States Court of Appeals Tenth Circuit.

December 12, 1967.

James W. Heyer, Denver, Colo. (Keith Marks, Dallas, Tex. was with him on the brief), for appellant.

Milton C. Branch, Asst. U. S. Atty. (Lawrence M. Henry, U. S. Atty., David Ferber, Sol., and Roy Nerenberg, Securities and Exchange Commission, were with him on the brief), for appellee.

Before MURRAH, Chief Judge, and PHILLIPS and LEWIS, Circuit Judges.

DAVID T. LEWIS, Circuit Judge.

After a full evidentiary hearing appellant Williams was convicted on January 27, 1967, of criminal contempt by the District Court for the District of Colorado for wilful disobedience of a permanent injunction issued by that court on a final judgment entered by default in 1963. Williams appeals, contending that his acts premising the contempt conviction were not a violation of the injunction, that the evidence is insufficient to support a finding that he wilfully violated the terms of the injunction, and that the sentence imposed by the trial court was too harsh. We find no merit to any of these contentions and affirm the judgment.

During February 1963, the Securities and Exchange Commission commenced a civil action against Williams in Colorado seeking to enjoin violations of the registration requirements, 15 U.S.C. § 77e(a) and (c) and the anti-fraud provisions, 15 U.S.C. § 77q(a), of the Securities Act of 1933. Premised on the allegations of the complaint that Williams was engaged by means of interstate commerce in the selling and offering for sale of unregistered investment contracts of Black Angus Steak Houses, Inc., a Colorado corporation, further allegations that Williams had made and was making specific and untrue representations of material facts pertaining to such contracts, and additional and supplemental representations to the Colorado court that Williams was engaged in a similar operation in Missouri, that court entered a permanent injunction couched in the terms of the Commission's complaint and set out in full in Appendix A.

In June 1966, Williams formed a Texas corporation called Black Angus Steak Houses, Inc. and sold unregistered investment contracts in that company through solicitations placed in newspapers. Through funds so received, Williams established a pilot restaurant in Dallas, Texas (as he had done earlier in his Colorado operations at Aurora, Colorado) and then proceeded with promotions of additional steak houses in Texas, New Mexico, Louisiana, Minnesota, Illinois, Indiana, and Missouri. The simple essence of Williams' operations consisted of establishing and operating a single restaurant, paying to contract investors a royalty return regardless of the profit or loss incurred by the restaurant, and then using the investors as references for further promotions.

Appellant concedes that the Colorado injunction is not subject to a geographical limitation and that the Texas operation was "almost identical in its plan and operation" and would be equally violative of this Securities Act. In this posture it is difficult to term appellant's argument that the injunction is inoperative from lack of specificity¹ as more than self-denying. It is, of course, well accepted that an injunction must be worded in such specific terms and with such detail as to put the party enjoined on notice of precisely what he is called upon to do or refrain from doing. It cannot be so general as to leave the party open to the hazard of conducting business in the mistaken belief that it is not prohibited by the injunction and thus make him vulnerable to prosecution for contempt. B & C Truck Leasing, Inc. v. I. C. C., 10 Cir., 283 F.2d 163. But here appellant, using the same corporate name, the same unlawful method of raising money, and reciting the same untruths to investors, was not trapped by an injunctive generality. It was as though the Colorado fraud had been a dress rehearsal for the Texas fraud which gave rise to the contempt conviction. Under these circumstances we cannot say that the phrase "any other securities" as used in the injunction is vague when projected against appellant's particularized conduct or that the appellant was not fairly put on notice that his acts were in violation of the injunction.

Nor do we see any reason to upset the trial court's finding that there was sufficient evidence to support a finding of wilful disobedience. The appellant necessarily knew he was selling securities without registration in contravention of the securities laws as well as the injunction. He also necessarily knew that the untruths he was promulgating concerning the success of the Colorado venture and the so-called matching funds were in direct violation of the injunction. There is evidence in the record that sales of investments were made after appellant was warned by a member of the staff of the Commission that continued sale of securities was violative of the injunction. The trial court found a lack of innocence or mistake noting the overall fraudulent nature of the scheme. The appellant had referred to the investors as "suckers" and to the whole operation as a way to "steal" and do it "legally." The evidence is ample to support the finding of wilfulness.

Finally we find that...