Source: https://openjurist.org/232/us/155
Timestamp: 2019-04-21 18:35:03+00:00

Document:
On the 5th of May, 1911, within the county of Mobile and the jurisdiction of the court, defendant devised a scheme and artifice to defraud various banks, persons, and corporations, particularly such as could be induced, through the firm of Hollingshead & Campbell, of New York city, to purchase or lend money upon the notes of the Southern Hardware & Supply Company, engaged in the mercantile business at Mobile, Alabama, and of which defendant was the president.
Hollingshead & Campbell were money brokers engaged in the business of inducing banks, persons, and corporations to purchase and lend money upon commercial paper, and it was the intention and purpose of defendant in his negotiations with said firm to induce and cause it to sell and dispose of the notes of the Hardware & Supply Company, and to obtain money and credit for its notes and other evidences of indebtedness. The defendant was authorized to sign such notes and other evidences of indebtedness, and to prepare statements of the financial and business condition of the company.
Defendant caused the statements to be sent through the United States mails to Hollingshead and Campbell. Hollingshead & Campbell believed them, and, relying upon their truth, recommended barious banks, persons, and corporations to purchase the notes and lend money upon the notes of the Hardware & Supply Company. The names of certain banks and the amounts they loaned are given.
For the purpose of executing the scheme and artifice, defendant deposited in the United States postoffice at Mobile, Alabama, a letter, dated June 27, 1911, addressed to Hollingshead & Campbell at New York. The letter contained a statement of the financial condition of the company, showing the assets, liabilities, and profits of the Hardware & Supply Company. It also contained comments upon the business of the company and its relations with Hollingshead & Campbell. It was sent through the mails and delivered to the latter at New York. The letter and the statements are charged to have shown the assets of the Hardware & Supply Company to be greater and its liabilities to be less than they actually were. And it is charged that defendant, having devised a scheme and artifice to defraud, and for the purpose of their execution, placed and caused to be placed in the United States postoffice at Mobile, Alabama, the letter above stated, and that it was sent and delivered by the Postoffice Establishment of the United States.
The second count in the indictment charges defendant with having devised 'a scheme and artifice for obtaining moneys, goods, and chattels by means of false and fraudulent representations and promises from various banks, persons, firms, and corporations.' The manner and means are charged as in the first count.
The scheme, it will be ovserved, was to defraud certain banks and persons, and it was to be accomplished by deception practised on Hollingshead & Campbell, money brokers, through false statements sent to that company through the mails, whereby they would be induced to recommend the commercial value of the notes and other evidences of indebtedness of the Southern Hardware & Supply Company, of which defendant was the president. The first count charges a scheme to defraud various banks, etc., through the representations of Hollingshead & Campbell, 'out of their's, the said banks', and persons', firms', and corporations' moneys, goods, and chattels.' In the second count the scheme is alleged to be 'for obtaining moneys, goods, and chattels by means of false and fraudulent representations and promises' from the various banks and persons.
It is contended by the government that these provisions are broader than those of § 5480 of the Revised Statutes; that under the latter it was necessary to charge not only a scheme to defraud was devised, but that it was intended to be effected by opening or intending to open correspondence with some other person by means of the Postoffice Establishment. Under § 215 of the Criminal Code it is only necessary that the scheme should be devised or intended to be devised, and a letter be placed in the postoffice for the purpose of executing the scheme or attempting to do so. And as declaring the elements of the offense under § 215, and its distinction from an offense under § 5480 of the Revised Statutes, the following cases are cited: Ex parte King, 200 Fed. 622; United States v. Maxey, 200 Fed. 997; Stockton v. United States (C. C. A. 7th C.) 46 L.R.A.(N.S.) 936, 205 Fed. 462; United States v. Goldman, 207 Fed. 1002.
There is a distinction between the sections, and the elements of an offense under § 215 are (a) a scheme devised or intended to be devised to defraud, or for obtaining money or property by means of false pretenses, and (b) for the purpose of executing such scheme or attempting to do so, the placing of any letter in any postoffice of the United States, to be sent or delivered by the Postoffice Establishment. The district court apparently overlooked the distinction between the sections, and was of opinion that something more was necessary to an offense under § 215 than the averment of the scheme, and its attempted execution in the manner stated. The court expressed the view, we have seen, that the indictment did not clearly set out the scheme to defraud; that it did not allege the scheme devised or attempted was by means of false or fraudulent pretenses, representations, or promises, or that the scheme was to be executed by the use of the Postoffice Establishment or mails of the United States. And the court said that it was a necessary element of the offense that the false statements sent to Hollingshead & Campbell by defendant were to be used by the latter company to induce the person intended to be defrauded to purchase the notes of the Southern Hardware & Supply Company, or to lend money upon them, or that such person had knowledge of the contents of the statements. It is manifest that the court considered these facts were necessary to be averred in order to constitute an offense under § 215. In this the court was in error.
Judgment reversed and cause remanded, with direction to overrule the demurrer.

References: § 5480
 § 215
 § 215
 § 5480
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 § 215
 § 215
 § 215