Opinion ID: 255084
Heading Depth: 1
Heading Rank: 4

Heading: Attacks on the Indictment

Text: 53 Appellants' general complaint that the indictment was unforgivably prolix and a pleading monstrosity is closely akin to their objections to the trial presentation by the prosecution and the judge's lengthy charge. The government can hardly be faulted for prolixity when it appears that the very complexity and deviousness of the alleged swindles are the basic causes of confusion. Just as the ingenuity of the white collar criminal and quasi-criminal is mirrored in the complicated regulation of the securities industry, 26 the indictment in this case is a rather faithful picture of the activity charged to the defendants. Objection to use of the incorporation by reference device is merely a quibble; surely there is enough governmental waste without requiring complete reproduction, from count to count, of all allegedly relevant pleadings previously enumerated. 54 More specific assaults on the indictment are made. Mittelman argues that Counts One and Two are repugnant because the takeover scheme is incorporated by reference into the later count while Count One does not name him as a defendant; his alternative argument is that if there is no repugnancy then Count Two is of necessity duplicitous — and that his conviction on that count must fail on any account. Closely related to appellant Mittelman's attack on the first two counts is the argument made by all defendants that there was a fatal variance between the pleading and proof on the conspiracy count. Relying on Kotteakos v. United States, 1946, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557, they assert that the government proof tended to establish not one scheme, but a multiplicity of disjointed, unrelated criminal ventures — at most, a fatally amorphous conspiracy to do evil. In support of this argument, they magnify the fact that some of the alleged parts of the scheme did not accrue directly to personal interests of all the defendants. 55 Appellants' reliance on Kotteakos is misplaced. The Supreme Court there decided only that a variance in the proof was prejudicial. That multiple conspiracies rather than one had been proven was conceded by the government. In that case one defendant had engaged in a number of quite isolated transactions, each with a different co-defendant, to obtain loans from government agencies on false representations. The Court of Appeals, sub nom. United States v. Lekacos, 2 Cir., 1945, 151 F.2d 170, 173, aptly analogized the case to a fence who disposes of goods stolen by a number of independent persons; the fact that they know him to be a fence does not mean all conspire together. 56 The proof in the instant case reveals a far more integrated scheme. The government argues correctly that the evidence establishes, basically, a central plan to effect the issuance and sale of worthless or grossly overpriced unregistered corporate securities to an uninformed and deluded investing public. The implementation of corporate deals and mergers as a cover for the fraud was an almost constant factor; the use of both kickbacks and resales by compliant dummy corporations — plus the issuance of stock for falsely declared consideration — reflects a relatively consistent, if varied, pattern of operation. Recurrent personal misrepresentations dovetailed neatly with the fraudulent publicity campaign to create a false public image of Texas-Adams. Mittelman's opinion letters consistently supplied still another necessary element in the success of the fraud. The non-broker defendants indisputably worked together in the Texas-Adams venture; indeed, the only possible questions raised at trial concerned the extent to which certain of these defendants either were duped by or blindly followed the others. 57 A mail fraud scheme consisting of a large number of similar transactions, conducted by a constant nucleus with differing subordinates, was held basically a single conspiracy in United States v. Cohen, 2 Cir., 1945, 145 F.2d 82, 87-88. We have also declared with reference to determining whether the proof is of one or two conspiracies that when a conspirator embarks upon a criminal venture of indefinite outline, he takes his chances as to its content and membership, so be it that they fall within the common purposes as he understands them. United States v. Andolschek, 2 Cir., 1944, 142 F.2d 503, 507. It is certainly no problem that not all the details were formulated at the outset; A single scheme to defraud may involve a multiplicity of ways and means of action and procedure. It may be such that the complete execution of it would involve the commission of more than one criminal offense. Mere details may be changed and the scheme remain the same. Mansfield v. United States, 5 Cir., 1946, 155 F.2d 952, 953. Whether a scheme is one conspiracy or several is primarily a jury question, since it is a question of fact as to the nature of the agreement. There was ample evidence here to justify a finding that the nonbroker defendants were a part of an overall scheme to acquire and exploit a public corporation — for the ultimate purpose of selling to the public unregistered common stock. See Developments — Criminal Conspiracy, 72 Harv.L.Rev. 920, 929-30, 933 (1959); Note Federal Treatment of Multiple Conspiracies, 57 Colum. L.Rev. 387, 393 (1957). 58 Mittelman's claim of duplicity in Count Two founders on the very nature of the mail fraud offense — with its attendant scheme or artifice, 18 U.S.C. § 1341. The government, in presenting its case, must of necessity offer evidence as to the acts of the defendants which make up the relevant scheme. Aside from the Count One takeover transaction, the government's proof in this case showed (together with acts which were, aside from the scheme, innocent) any number of separate crimes under state or federal law. It is difficult to see how the common law duplicity doctrine can retain any meaning or vigor within the context of this particular statutory offense. 27 As long as the defendants clearly are charged with only one offense (i. e., the mailing in furtherance of the scheme), the count is not duplicitous. See Owens v. United States, 5 Cir., 1955, 221 F.2d 351; Weiss v. United States, 5 Cir., 1941, 122 F.2d 675, 680; United States v. McAlpine, 7 Cir., 1942, 129 F.2d 737. 59 The fact that Mittelman was not named as a defendant in Count One — while the takeover fraud was pleaded as part of the Count Two scheme — does not make these two counts repugnant. The takeover scheme charged in the first count was a localized, short lived offense completed in September of 1955. The grand scheme charged in Counts 2-32 was of much longer duration and encompassed a much broader scope of activity — including the acquisition of control of a publicly held corporation. The fact that the government did not charge Mittelman with direct criminal responsibility, as a principal or otherwise, for the takeover of Texas-Adams does not prevent it from accusing him of knowing participation in the larger scheme, which took in many acts for which he may not have been directly responsible.