Opinion ID: 255084
Heading Depth: 2
Heading Rank: 1

Heading: The Management Defendants

Text: 29 While Crosby, Pettit, Meredith and Mittelman do not dispute the fact that the evidence against them properly warranted submission of the case to the jury, they all argue that the record is equivocal as to their guilt — and that the factual issues involved are such close ones that even minor errors at trial would be deserving of a reversal by this court and a remand for a new trial. We disagree. 30 The proof against Crosby on the Count One scheme is overwhelming. His counsel would have us believe there was a genuine jury issue as to whether Crosby was in good faith in this transaction — i. e., whether the defendant considered the raiding of the Texas-Adams treasury a loan to American Montana. Ignoring the evidence that Crosby immediately caused to be drained the $9,000 not used in the purchase of control, and even if the record failed to indicate that American Montana not only was penniless but also had no visible means of support, only an incredibly naive jury could be expected to credit such a story. His culpability on the mail fraud and conspiracy counts is similarly evident. The feeble contention that the Jannis assaults on the investing public were in legitimate pursuit of a deserved finder's fee is hardly worth mentioning. 31 Pettit and Meredith both challenge the degree of actual knowing and fraudulent participation proved by the government. Meredith, the only defendant who took the stand in his own behalf, attempted to define his role in the scheme as that of a mere errand boy. Both were experienced businessmen before they came east for their alliance with McCarthy; yet both would have us believe — and claim the jury might easily have found — they were credulous schoolboys completely taken in by the impressive, free-wheeling Texas oil operator, McCarthy. Apart from the substantial incredibility inherent in these claims, there was more than ample independent evidence supporting scienter on the part of both defendants. 32 Pettit received back more than his original investment, from the Texas-Adams treasury, within two days of the takeover of control; a later payment, from proceeds of sale of Osage stock, was made to a Kathrine McDavitt, a lady friend of Pettit. A number of witnesses testified either that Pettit misrepresented facts 11 or was present and participating at conferences where McCarthy did the same. Meredith's activity on behalf of Texas-Adams was astounding; he was constantly back and forth all over the country picking up and delivering stock certificates, money and instructions. He signed innumerable checks and documents, and testimony indicated he was active in Denver in the trading of Texas-Adams stock for Empire interest certificates. While the heavy weight of the evidence would seem to indicate he was a follower rather than a leader, this is a far cry from raising a doubt as to lack of criminal knowledge. 33 Mittelman, both at trial and here on appeal, has attempted the Herculean task of arguing away every single bit of damaging evidence produced by the government. We have carefully considered his extended discussions of the trial evidence but cannot agree there was any real doubt as to his guilt. Any conclusion of Mittelman's innocence must rest upon the hypothesis that Holland and Carroll, the moving parties in Homestead Oil & Uranium, plus Kimmes, a Denver broker and co-conspirator, perjured themselves; that Harrison Miller, a New York broker, was mistaken as to dates when he testified that Mittelman vouched for Jannis in mid-November of 1955; that Purcell, an experienced securities attorney, was mistaken in his testimony concerning Mittelman and the Empire transaction; and that Mittelman was unbelievably hornswoggled by McCarthy due to an incredible naivete on the part of an experienced attorney. 34 It is true that some apparently damning evidence has been convincingly explained away. The overall involvement, however, is clearly shown. The Jannis, Empire and Comigu opinion letters, asserting the free transferability of those shares, are not adequately explained. Long after he concededly knew the truth about Jannis, Mittelman sold 5,000 shares of unregistered stock in Jannis' name for the account of his sister. Defendant's letter of April 30, 1956 to the stock transfer company stating that 150,000 shares of Texas-Adams being issued to L. W. Ltd., a dummy corporation of which Mittelman was vice-president, was for part payment of the purchase price of United States Sulphur Company is particularly damning. Despite appellant's meticulous analysis of the evidence, it is hard to see how the jury could have found Mittelman anything but guilty. 12