Document: 363 U.S. 370 80 S.Ct. 1171 4 L.Ed.2d 1277 George B. PARR et al., Petitioners,v.UNITED STATES. No. 391. Argued April 28, 1960. Decided June 13, Mr. Abe Fortas, Washington, D.C., and T. Gilbert Sharpe, Brownsville, Tex., for petitioners. Malcolm Richard Wilkey, respondent. Justice WHITTAKER delivered the opinion of Court. 1 Petitioners, nine individuals two state banking corporations,1 were indicted in 20 counts United States District Court Southern Texas, Houston Division, mail fraud conspiracy to commit fraud. The first 19 charged that petitioners devised, prior September 1, 1949, continued February 20, 1954, a scheme defraud Benavides Independent School ('District') Duval County, State taxpayers each, they used mails purpose executing scheme, violation 18 U.S.C. § 1341, U.S.C.A. 1341.2 twentieth count conspired substantive offense count, 371, 371.3 2 After their various motions, including one challenging venue asking transfer action Corpus Christi Division court, bill particulars, denied, entered pleas 'not guilty' due course case was put trial before jury. jury returned verdicts finding guilty as charged—some them on all others only some counts. denying timely motions arrest judgment new trial, court judgments upon verdicts, convicting sentencing imprisonment.4 On appeal, affirmed, 265 F.2d 894, and, determine questions importance relative scope proper application we granted certiorari. 361 912, 254, 182. 3 Petitioners' principal contentions here are: (1) that, although indictment evidence tended show devised practiced by local or crimes misappropriating embezzling its money property, neither nor proofs support judgments, because did not charge, show, any use 'for such scheme' within meaning phrase (2) court's charge submit theory issue fact could constitute scheme.' nature these requires detailed examination indictment, adduced, issues actually tried submitted jury, resolution, charge. We turn indictment. Summarized briefly fair statement permits, alleged is public corporation organized under laws Texas acquire hold facilities necessary for, operate, schools District,5 those purposes, assess collect taxes; vest exclusive control property management affairs Board Trustees, consisting seven members; District, obtain themselves relatives. 5 It then part would falsely represent district checks issued, funds disbursed, persons concerns services rendered materials furnished Annual Reports Commissioner Education correct. 6 next further establish maintain domination District;6 three petitioner, Bank Alice, which authorized depository District's funds,7 San Diego Bank.8 7 it sent cause be letters, tax statements, payment taxes, receipted through mails; moneys received from deposited credit bank, against payable fictitious persons, existing without consideration (falsifying records issued materials), cash checks, forged endorsements payees, at bank convert proceeds; open accounts deposit taxes unauthorized banks, petitioner Chapa withdraw funds; keep merchanedise expense District; prepare, Trustees approve, false Austin, Texas; conceal fraudulent misuse destroying canceled statements other microfilmed banks showing drawn paid out accounts. 8 last paragraph count—the purporting an offense—charged 29, 1952, caused taken post office, letter addressed Humble Oil & Refining Company, Houston, Texas.9 9 Each Counts adopted reference allegations except contained specific petitioners, proceeded allege stated date 'caused' particular letter, statement, check, receipt invoice placed court.10 Doubtless each so limited, light Rule Federal Rules Criminal Procedure, U.S.C.A., fixing over division where committed,11 order give this action, consequently does petitioners' full uses mails, principally made County court. 10 throughout relevant period feloniously agreed among with 'the offenses * are fully described set indictment,' effect object conspiracy, committed specified overt acts.12 11 now look evidence. Condensed pith, 6,000 pages disclose acting members, operated towns Freer, having slightly more than 1,000 pupils. From time met appoint (a) assessor-collector, (b) independent firm engineers accountants assist assessor-collector determining ownership valuation property—particularly mineral lands complex fractional interests therein—in (c) Equalization, (d) funds, also (e) consider propose electorate authorization sale bonds 1949 ($265,000) 1950 ($362,500) finance construction school facilities. 12 In actual operations engineering-accounting annually prepare list appraisal value properties which, after Equalization completed work thereon (in July), rolls current year therefrom mail, (the great majority mails) would—with exceptions later noted—deposit receipts taxpayers. 13 Three members resided four Benavides. Aside meetings purposes above stated, rarely board. group, rather independently, town, costs operation about same town.13 But handled generally day-to-day business staffing keeping books records, making contracts, relations Report (to amount per pupil prescribed districts law) routine disbursement funds. 14 Petitioners Saenz, Garza Garcia Board. Oscar Carrillo, Sr., O. P. Carrillo were, respectively, secretary attorney Petitioner assessor-collector. Parr president stockholder Taxes Bank—the funds—and Bank, there no official connection he practically dominated controlled affairs, kept his outside until July 1951, countersigned 1950. Donald cashier administrative manager Oliveira director bank. 15 There large amounts, misappropriated, converted, embezzled stolen devices purposes: 16 At least once month numerous both building maintenance presented bundles, totaling $3,000 $12,000, supervision Donald, cashed it, endorsements, currency sealed envelope handed presenting person delivery Parr. less $120,000 misappropriated way. However, acts 17 numbers often assumed names families, but furnished, enforsements.14 $65,000 again ffense (3) converted same—some bank—upon proceeds.15 (4) obtained gasoline oil card District.16 Use 'causing' company place invoices goods take check constitutes basis 17, indictment.17 offered Having substance notes 10, do repeat here. prove indictment.18 21 proceed examine what theories predicated resolution Relative reminding had been read beginning have study during deliberations room, aloud defined words phrases, cautioned many scores, weight given testimony 'accomplices,' stressed Government's burden proof, verdict-directing covering pertinent part, follows: 22 'Applying law if you believe beyond reasonable doubt defendant defendants triable Count One considering separately, things occurred existed defraud, result necessarily incidentally carrying thereof, defrauding obtaining pretenses representations particulars forth therein Mails One, becomes your duty find verdict. reasoning instructions apply nineteen indictment.' reading telling essence 'is agreement defraud,' defining 'conspiracy,' commenting 'circumstantial evidence,' stressing 23 'Therefore, 20th conspirators person, together other, him objects thereafter done guilty, say verdict *.'19 24 review adduced return can strongly brazen misappropriating, converting property. Counsel concede so. But, correctly say, essentially become federal ones, statute, scheme.'20 Hence, question whether shown properly may said scheme,' 1341. 'no.' Government says 'yes.' 25 Specifically, position required acquisition schools; assessed obedience way illegal, must therefore entirely lawful; perform legally compelled mailing letters enclosures (tax receipts) complained hence mailings 26 Government, hand, contends, first, unlawful, view exist, subsequent enclosures, even though made, constituted essential steps contemplation scheme'; asserts fact, impliedly illegal assessed, collected accumulated excess needs provide fund misappropriation, second, showed pretended represented lawful hence, misrepresentations, 27 asserting complete novelty reported supports counsel point think 'explosively expanded' incongruous results adoption theory, e.g., cases conduct doctor's concern's billing clerk out, duty, employer's design, eventually executed, receipts—the aptness supposed analogies, happily, called determine. secretary, cashier—and similarly member Board—improperly 'pads' increases amounts causes mailed bring looted, mailings, being employer (or Board), bound step They stress claim allege, tending excessive, 'padded' theory. 28 clear undisputed express constitutional mandate levy operate Constitution Art. 7, 3, Vernon's Ann.St.Const.,21 statute deliver payment.22 29 leave discretion boards rate, limit, assessments,23 determinations, limit here, judicially reviewable, Madeley v. Conroe Ind. Dist., Tex.Civ.App., 130 S.W.2d 929, 34, enforcement enjoined fraud.24 assessment might collaterally attacked, fraud, most careful expressly illegal. Nor Indeed, refused proffered jury.25 Such took argued needed 'science hall,' 'office building,' 'plumbing (and) sorts things,' misappropriations deprived lft 'two one-half years debt'—a sum several times greater 30 injected into Appeals. That rested largely conclusion assessments designed 'enough legitimate (but also) enough additional looted.' page 897. supported record. As moreover negatived possible implication taking improvements left debt.' 31 Board, (largely nonresident owners), mails. 'collect Humble, mails.' Appeals thought legal compulsion 'on horns dilemma' contend deny them. 898. 32 crucial question, respecting comes down lawful—or, properly, unlawful—letters, receipts, counts, causing planned steal indefinite receipts. 33 violate exclude proscriptions Congress 'may forbid (mailings) furtherance regards contrary policy not.' Badders States, 240 391, 393, 36 367, 368, 60 L.Ed. 706. exercise power, enacted 1341 forbidding criminal leaving matter determination laws. Its 'to prevent office carry (such schemes) *.' Durland 161 306, 314, 508, 511, 40 709. Thus, terms make clear, '(t)he purport reach frauds, limited instances execution dealt appropriate law.' Kann 323 88, 95, 65 148, 151, 89 88. Therefore, 'a fraud,' or, Pereira 347 8, 74 358, 363, 98 435, 'incident fall ban statute. 34 cases, soundly argues immunization effected officials26 'innocent themselves,' plot.' supra, 394,27 368. counts—namely, notice modification valuation, giving hearings taxable complying owner's request 'auxiliary notice,' transmittal28—were, innocent themselves, plot' cites holding thing regarded plot defraud. Instead, frankly concedes case. 'there exactly like this,' expresses rests factually 'unique situation.' 35 agree factual situation uniquie, course, agree, too, decision involving similar circumstances determinative. case, especially facts to, nor, determined by, law, (here, permitting) conclude unlawful 'step(s) plot,' 394, 'part(s) cannot imperative command imposed who plan steal, when received, moneys. Nor, record, misrepresentations money. Surely conducted constituting 5, pretense misrepresentation. fail see how And remaining certainly carried (and letters) far record shows, respects obligations. phase has relied Education, apparently allowed districts, entries. doubtless shown, between venue, court.29 37 relate different subject. charged, fraudulently filling station products knowing, knowledge, things. invoices, contain items procured Garza, company, Benavides, latter invoice. ruled supra. Here, Kann, reached fruition' of. 'The intended receive (goods services) (them) irrevocably. immaterial them, consummation (oil company) (District). requires.' 94, 151. 38 Inasmuch conspiring inasmuch as, sustained, follows convictions stand. 39 our conclusions, unnecessary discuss strongest element behavior bad brazen, coupled inability failure authorities justice,30 persuaded undertake prosecution. showing, however convincing, conversion, embezzlement theft crime using vaunted system, man, behavior, convicted proven found accordance process. 41 Reversed. 42 FRANKFURTER, whom HARLAN STEWART join, dissenting. 43 violations of, violate, Mail Fraud Act, All two, exonerated eight charged. 44 Together body created (hereinafter District), administered geographical confines, serving designated pursuant Tex.Rev.Civ.Stat., arts. 2763, 2763a. Through fiscal looted $200,000 1953. 45 vested taxing Tex.Rev.Civ.Stat. art. 2784e, annual collection primary source revenue maintaining schools. exercising powers ad valorem devoted exclusively empowered fix rate txation according projected needs, expenditures reserves. 2827. Apart confine discretionary power unlimited, maximum fixed 2784e. raised statutory maximum, taxed rate. Pursuant regularly spent schools, reserves, appropriated portion proceeds own uses. When ceased sharply rose, while collections remained substantially unchanged. 46 Conduct transactions Act established 'any artifice defraud' attempting do.' Of sixteen process presents violated officer providing estimated meet statutorily need satisfaction entrusted him, exercises sums expended, times, successive utilizing proceeds, intends 47 urge credited books, might, lawfully applied expended maintenance, wrongdoing, nothing illicit, till misapplied innocently Their concluded 'executing' regardless peradventure abuse seamless conceived executed every enterprise interdependent other. 48 Insofar defense lawfulness isolated act immunity substance. long '(i)ntent otherwise criminal, heart effort escape conviction skulduggeries sending bills neutral vehicles compulsion, governmental controlling expending predetermined diverted private pockets. bespeaks audacious lack humor suggest anywhere collectors send bills, returns, predeterminedly design personal event. While since obligated purpose, much collected, discretion, voluntary act, themselves. No spend running, plus misappropriate,1 precisely proof did. 49 raises whether, immune too remote deemed 'execution' it. Whether occurs discernible relation degree proximity scheme. 'with protecting intentional efforts despoil, Court's central inquiry. If concern States. adequate relationship life susceptible geometric determination. Young, 232 155, 303, 58 548, contemplate element, part' materially aid example, defendant's 50 For significance depends interconnection parts Ordinarily, proved dispute. when, involves trust, closer analysis required. seek denude range pervasiveness. construct artifact whereby was, intramural, unrelated ingenuous argument runs, wrongdoing arose fulfilled function bringing returns. wrong thus nicely pigeonholed embezzlement, 51 fraudulent, episodic, petty-cash peculations regulatory agency frauds agency, injured sense ultimate vast government agency's taken, are, practical good determines causation, Gully First National 299 109, 117—118, 57 96, 99—100, 81 70, analogize conventional peculation employee, private, disregard 52 entire decision, ceiling, collected. tax, ultimately assured reserves obliterates line draw entity serve. By demanding collecting misappropriate inseparable 53 disposes another technical absent. suggestion representation system self-executing structure payee collector, automatic conduit, tax. These collectors, however, prime actors structure. billed itself. reason solely reliance implied expenditures. depended setting knowledge paid. taxpayer testified revealed awaited payment. available procedure invoked, establishes not, argued, legality 54 intention absence detriment rely payments ordinarily books. frivolous. viewed overpaid services, paid, self-evident. attempted analogy sends just mountain molehill. Even her principal, patients pay her, doing, defrauded. very different, concede, padded her. Here inescapably increase, limits, ends. 55 Although appropriately goes requirements directed utilization penal prohibition niceties common-law pretenses, 312—313, 510 sought vehicle ordinary fraud—a dishonest cheating enterprise. significant amended 1909 adding outlawry 'scheme expanding condemnation, 'obtaining means representations, promises.' Stat. 1130. statutes extended English words, artificially unreasonably contracted avoid plainly falls evil remedied.' 313, 511. lay, commonsensical interpreting condemnation aspects legislation illustrated settled doctrine extends conception financial loss ingredient offense. Haas Henkel, 216 462, 480, 249, 569; Plyler, 222 15, 6, 56 70. reeks disembodied, abstract lost meaning. finally sustained because, sufficient sustain conviction, summations reveal, present, either law. apparent aspect prosecution focused basic assertion continuously schemed continuing fasely revenues BISD, texas BISD taxpayers), allegedly undertaken effectuate political mechanism dominus returns year, constituting, systematic continuity practice, conscious utilize government, one, instrument. Objections events 1951 overruled well-settled ground offers admissible acquire, District. 59 summation repeatedly characterized employ comprehensive maximize stealing funds,2 adequately account use, resulted vendor present separate offenses. Two matters noted. First, suggested misrepresentation correct appears why knowingly consumed voucher directly reimbursement purchases. 61 Second, urged rationale consummated gasoline. instance limitation; excepted force rule situations affording 'concealment perpetrated,' 94—95, consumption device turning advantage, presentation merely gasoline, 62 raise substantial objections disposed already said. attacks require discussion below. 894. 63 I affirm judgments. Parr, D. C. Chapa, F. Octavio Jesus G. Santiago Garcia, Oliveira, Alice Texas. Section provides, 'Whoever, places matter, Post Office Department, takes receives therefrom, thing, direction shall fined $1,000 imprisoned five years, both.' 371 'If conspire $10,000 both. 371. Names Sentences Aggregate $20,000 fine. years. 1-14, 17-20 suspended probation. 4, 14, 17-19. Saenz Sr. probation, fine $7,000. Fine $2,000. 1-3, 10-12, $900. 16, operates ofBenavides Freer town named allegation Garcia. Oliveira. maintained referred Sept. 26, Co., latter's $2,542,920 advising $1.75 $100, $44,501.10. second Secretary dated 18, hearing held Aug. 1952. third Tax Collector $43,166.07, accompanying taxpayer, attached (of) $44,501.10' taxpayer's cent discount of.$1,335.03 net $43,166.07 evidenced check.' fourth 24, 1953, $53,807.35, fifth May 2, sixth 25, $34,285.09, 1951. seventh Dec. W. Hahl Surface Fee Rosita Townsite.' eighth, ninth tenth 21, $544.21, $555.25 $451.70, certain respectively. eleventh, twelfth thirteenth 27, 30, Assessor $13,532.64, $13,078.72 $14,665.04, 1952 fourteenth Pipe Line $330.84, fifteenth sixteenth J. E. Beall, 1953 Oct. 'Benavides Indep. Dist.' $415.72 $355.55, Continental merchandise $273.85; Mar. 31, Co. $353.02, 18. Fed.Rules Crim.Proc. provides: 'Except permitted rules, committed, consists divisions committed.' 11, 1952; $325.07 Merchants Exchange Beall $355.55 Nov. Barbara $361 Greene $298.43, Peal Properties $230.92, (5) Allen Martin $300.82 22, (6) Jones-Laughlin Supply $320.15 operating year. approximately estimating total assessments, collections, $400,000 $650,000 $519,613.51 Board's $310,840.59 $295,161.25 1950, $370,852.42 $385,084.96 income, capita State, $140,000 payroll sometimes usually names, rendered. names; name daughter, Garza; implement company. names. mentioned $100 $125. A $500 monthly Parr's brother-in-law, Included $25,000. evidence, remodeling furniture equipment extent $2,500. See re 19. note 12. Before counsel, requests requested 'You instructed involved taxpayers, regard thereto, will Defendants 'Not Guilty,' respect count. Both denied. grounds, others, way,' 'an instruction nowhere applies case,' instruct 'as exact elements quoted 2. 934. 932; Kluckman 113 301, 303. Bradford Cir., 129 274, 276; Shushan 117 110, 115, 133 A.L.R. 1040. Steiner 134 931, 933. Earnhardt, 153 472; Holmes 125, 133; Mitchell 126 550; Stephens 440. Ahrens 514. 10. Crim.Proc., 11. charges growing reversed. 1957, 165 Tex.Cr.R. 252, 306 360; Tex.Cr.App.1957, 307 94. indictments charging conversion He acquitted 164 554, 301 127. 932 stating lie enjoin Trustees' fraud; Dodds, 243 S.W. 710, suggesting referendum conferring void purpose. 'A notice, rake harvest milk methods outlined.' '(T)his This up 'I my use,' went on, '48, '49, '50, '51, '52, '53, replenish supply.' 'It mailorder business. knew that; know it.' 'What District? education, free education students, children live district. trustees someone confidence trust What instance? designs defendants.'

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