Opinion ID: 336334
Heading Depth: 1
Heading Rank: 1

Heading: The Evidence Showed a Single Conspiracy.

Text: 4 All appellants, with the exception of Palmer, argue that a variance between the indictment, which alleged a single conspiracy in Count One, and the proof at trial, which appellants contend showed the existence of several independent conspiracies to the exclusion of a single conspiracy linking all defendants, requires that we reverse, because of fatal prejudice to appellants' substantial rights, the jury's finding of guilty on Count One. At the outset, we concede to appellants the point that the Government's evidence at trial disclosed a variety of criminal activities, at times seemingly unrelated, on the parts of defendants. But we recognize that the evidence also disclosed a not insubstantial expenditure of industry and intelligence by defendants in their criminal endeavors. The multiplicity and variety of defendants' criminal activities come accordingly as no surprise. Having carefully examined the record, however, we have no difficulty concluding that the Government's evidence did establish the existence of a single, overall conspiracy among defendants, which conspiracy provided in effect an umbrella and connecting thread for the many different activities disclosed at trial. In consequence, we reject appellants' argument that there was a fatal variance between the indictment and the proof at trial. 5 The Government's evidence, viewed in the most favorable light, see Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942); United States v. Brasseaux, 509 F.2d 157, 158 (5 Cir. 1975), established the existence of a national chain, with an international link, for the distribution of stolen and counterfeited securities. In structural terms, which are helpful, but never decisive, see United States v. Perez, 489 F.2d 51, 64 (5 Cir. 1973), cert. denied, 417 U.S. 945, 94 S.Ct. 3067, 41 L.Ed.2d 664 (1974), the flow of counterfeited securities contemplated by the agreement of the defendants followed, in the descriptive jargon of the field, an H-shaped chain conspiracy beginning with two groups of suppliers operating out of Orlando, Florida, and Chicago, Illinois, passing through a host of middlemen or wholesalers working principally in Florida, and coming to rest with two groups of retailers ready to supply Los Angeles, New York, and Toronto. It must be borne in mind, and it should become clear as the story unfolds, that there was substantial overlap among the links in the conspiracy, which fact among others reinforces our conclusion that the Government did establish the existence of a single conspiracy. See United States v. Perez, supra at 59; United States v. Morado, 454 F.2d 167 (5 Cir. 1972). But most important in our conclusion that the evidence showed a single conspiracy, we recognize that the character of the property involved here and the nature of the crime are such that knowledge on the part of any one member of the conspiracy concerning the existence and function of other members of the conspiracy, devoted as it was to the illicit distribution of counterfeited and stolen securities, was a permissible inference on the part of the jury. Cf. United States v. Bruno, 105 F.2d 921, 922-23 (2 Cir. 1939) (narcotics conspiracy). Independent of any showing of actual knowledge and the Government made many such showings in this case the original suppliers knew with substantial certainty that their crime was not complete with the act of counterfeiting. Similarly, the middlemen and retailers properly were charged with knowledge of each other and the original suppliers. Only when the counterfeited and stolen securities came to rest in the hands of unsuspecting members of the public would the force of the criminal conspiracy be spent; all knew this and acted accordingly. See United States v. Perez, supra at 59. 6 We turn first to the alleged suppliers, represented on appeal by Samuel Scales (Orlando), John Brennan (Chicago), and William Berman (Chicago). The Government's evidence again, in the most favorable light showed that in early May, 1972, appellant Scales, who was a stock broker in Orlando, fraudulently procured a two-hundred share certificate of stock in Walt Disney Productions with the assistance of his brother, Joseph. Joseph Scales delivered the fraudulently procured, but nevertheless original, certificate in turn to another defendant, Fritz Hahn, for the purposes of counterfeiting. Hahn, after having a printer prepare counterfeits, delivered both the original and counterfeited certificates to Joseph Scales, who on May 15 returned the original to the brokerage house from which it had been obtained by his brother. 7 In August, 1972, Joseph Scales procured five original $1000 Trans World Airlines bonds through a Jacksonville, Florida, brokerage house. Again working with defendant Hahn, Joseph Scales had 650 counterfeits of the TWA bond prepared by the same printer who had earlier counterfeited the Walt Disney stock. In the following month, September, Hahn contacted defendant Fred Schreier in Orlando and informed him about the counterfeited TWA bonds and Walt Disney stock. Schreier was provided with two counterfeits of the TWA bond and one counterfeit of the Walt Disney stock in order that he could show the merchandise to prospective buyers. Schreier contacted appellant Charles Palmer, showed him the merchandise, and Palmer agreed to join a selling venture. 8 Contemporary with the Florida counterfeiting operation, the Chicago supply group, which consisted of appellants John Brennan and William Berman, and defendants Frank Gallo and Anthony Brennan, was engaged in the distribution of stolen securities. At an earlier time, Berman and Anthony Brennan had disposed of stolen Oklahoma City Housing Authority bonds and Westinghouse stock through appellant Robert Johnson and defendant Maurice Harte, who both were part of the Florida wholesaling operation that will be described below. Thus, the connecting link between the Chicago suppliers and the Florida wholesalers had been established in the past and was only renewed in the instant case. 9 Florida middleman, and appellant Jack Edwards provided the link between the two supply groups located in Orlando and Chicago respectively, and with his confederates in Florida, Edwards was the intended conduit for the flow of stolen and counterfeited securities to the retailing groups. Edwards had dealt in the past with the Philip Wilson, a major distributor of illicit securities operating out of St. Louis, and Wilson put Edwards in contact with defendant Carol Lax, a Los Angeles retailer, in midsummer, 1972. Edwards flew to Los Angeles in August for discussions with Carol Lax about a large sale of stolen securities to buyers represented by Lax. A tentative agreement on a sale of stolen Westinghouse, Hoover, and ITT stocks and stolen Oklahoma City Housing Authority bonds was made, but the agreement fell through prior to completion because of infighting among the buyers represented by Lax. Edwards returned to Florida. 10 Shortly thereafter, however, Lax again contacted Edwards and arranged another meeting in Los Angeles to take place at the end of September. Before he returned to Los Angeles for this meeting, Edwards was introduced by appellant Johnson to defendant Maurice Harte, who was a longtime dealer in illegal securities. Unknown to the other conspirators, Maurice Harte had volunteered his services as a Government informant to minimize the difficulties for his girl friend, who had been arrested for passing a large worthless check. During the course of the conspiracy, Harte, with one important exception, kept the Government informed of all transactions and negotiations among the conspirators, and he allowed his telephone conversations to be tape-recorded during this period. The recorded conversations and Harte's comprehensive testimony at trial provided the foundation for the Government's case. 11 To obtain merchandise for the upcoming meeting with Lax in Los Angeles at the end of September, Edwards and Harte flew to Chicago where they met with the supply group consisting of Berman, Gallo, and John and Anthony Brennan. Edwards and Harte were provided with a list of stolen securities then available, but they were also informed that payment for any securities on the list would have to be made at the time of delivery. As Edwards, Harte, and the other Florida middlemen did not have the funds to pay for the securities upon delivery, Edwards suggested the following scheme: Edwards at an earlier time had a deal with appellant Lacey Edward Ford (who went by the alias Henry Adams) to purchase large quantities of stolen United States Treasury notes and AT & T stock, but Edwards had been unable to make contact with Ford and consummate the deal. In order to raise the front money for the Chicago transaction, the Florida middlemen would obtain stolen stocks from appellant Ford, sell them at a high profit through appellant Johnson's contact man Sam Scales, and use the profit as front money to the Chicago supply group. This plan of action was agreed upon; Harte returned to Florida to locate Ford; and Edwards flew to Los Angeles to meet with Carol Lax pursuant to their earlier arrangement for a late September meeting. When Edwards met with Lax in Los Angeles, he informed her that he had three groups of supply for the upcoming transaction the Chicago supply group, one of the Scales brothers in Orlando, which one he did not say, and a Miami connection. 12 Upon his return to Florida, Harte located appellant Ford and arranged a meeting at an Orlando restaurant named Sambo's. Before this meeting took place, Harte had further telephone conversations with appellant Berman regarding the securities currently available from Chicago, flew to Chicago, and picked up a list of these securities. At the first Orlando meeting between Harte and Ford, after his return from Chicago, Harte asked about the Treasury notes and AT & T stock mentioned by Edwards. Ford stated that he did not know what was immediately available, but that he would make further inquiries. After leaving Sambo's, Harte took Ford by appellant Johnson's place of business in Orlando and introduced the latter as a major participant in the venture. 13 After Edwards had returned to Florida from Los Angeles, Ford contacted Harte and told him that the requested securities would be available. Another meeting at Sambo's was scheduled for October 4. At this meeting, Harte and Edwards talked with Ford, who had brought along defendant McClain. McClain informed Harte and Edwards that some of the Treasury notes had been sold and that none of the AT & T stocks was available, but that he did have approximately $30,000 of mixed stocks. After leaving Sambo's with McClain, Harte examined the stocks that McClain had available, but he determined that they would not be suitable for sale at the high profit needed to raise the Chicago front money. McClain then showed Harte a $1000 TWA bond, which Harte recognized as counterfeit. McClain confirmed that the bond was counterfeit and stated that there were 800 available for distribution. Harte and McClain then returned to Sambo's, by which time appellant Palmer had joined Edwards and Ford. Harte asked Edwards whether the Los Angeles retailers could use counterfeited stocks, Edwards replied that he was not sure, and the meeting broke up. 14 During late October and early November, Harte and Edwards were also having discussions with appellants McConnell and Dondich, stock fraud artists working through the office of International Trust located in Hollywood, Florida. McConnell and Dondich were seeking watered, stolen, and counterfeited securities as part of their scheme to defraud a Panamanian bank by posting the illegal securities as collateral for a large loan. The discussions between Harte, Edwards, McConnell, and Dondich covered the counterfeited TWA bonds that had been shown to Harte by McClain at the time of the Sambo's meeting in early October. Additionally, at about the same time as the meetings with McConnell and Dondich, Harte again met with Palmer and McClain and was shown a counterfeited two-hundred share certificate of Walt Disney Productions, which Palmer had obtained from defendant Schreier who in turn had been given the certificate for promotional purposes by the confederate of Joseph Scales, Fritz Hahn. Harte later obtained possession of one of the Walt Disney certificates through McClain. He and Edwards then showed the certificate to McConnell and Dondich, and it was agreed at a meeting in early November that McConnell and Dondich could use the stock in the upcoming Panamanian deal, as well as in contemplated ventures in New York and Toronto. 15 Shortly after this November meeting, Dondich contacted Harte and told him that appellant John Morrow was interested in acquiring some of the counterfeited Walt Disney stock. Harte contacted Morrow. Harte, Edwards, and Morrow met at the offices of International Trust in Hollywood, Florida, and Morrow was shown a counterfeited Walt Disney certificate. He stated that he hoped the stock would be suitable for transactions in New York and Los Angeles. Harte provided Morrow with two of the counterfeited certificates for promotional purposes, after receiving assurances from Dondich that Morrow was trustworthy. Approximately one week later, Harte received the certificates back from Morrow via Dondich. 16 At another meeting in mid-November, Palmer informed Harte that 350 of the counterfeited TWA bonds were still available, and this information was confirmed at a further meeting. Subsequently Edwards called Harte by phone and stated that he had people in his office who wanted all 800 TWA bonds and 300 one-hundred share certificates of stock in Walt Disney Productions for a pending transaction in Canada. Later in the conversation, which was recorded, Edwards mentioned that Toronto was the place where the transaction was scheduled to take place. Upon receiving this information, Harte again contacted Palmer. Palmer agreed to get in touch with his suppliers. As for Harte, though he was a Government informant, he did not disclose the Canadian deal to the FBI, having decided to join Edwards in the illicit venture. 17 The pace of negotiations between the conspirators understandably quickened at this point. Edwards was scheduled to go to Toronto the following day, November 28, and it was imperative that the securities package be put together quickly. Harte again contacted Palmer, urging that the counterfeited TWA bonds and Walt Disney stock be procured as soon as possible. At a midnight meeting in the Tampa airport between Edwards and Harte, and before Edwards left for Toronto, the details of the Canadian deal were revealed to Harte: McConnell and Dondich had put Edwards in contact with two people who wanted to use the counterfeits one of whom was appellant Christopher Martin and the other defendant Meierdiericks; the person on the Canadian end of the deal was identified as Louis Marks, though his real name was Louis Marder. 18 On November 28, Edwards, who had flown out of Tampa, contacted Harte from Chicago and inquired about the efforts to put the securities package together. Harte told Edwards that he would have the securities together shortly and would fly to Toronto on the afternoon of the following day. On the 28th appellant Martin and defendant Meierdiericks flew to Toronto; they were, as noted above, in contact with Edwards and in effect were the American end of the Canadian deal. Martin and Meierdiericks checked into the same hotel as Edwards and shared a room adjacent to Edwards's room. Edwards called Harte from Toronto and told him that the deal was ready to go, but Harte stated that he would need more time, approximately two or three days, to put together the complete package of desired securities. Harte made arrangements to fly to Toronto the next day, however, with samples of the counterfeited TWA bonds and Walt Disney stock. 19 On the morning of the 29th, Edwards, Martin, Meierdiericks, and Louis Marks met in the hotel coffee shop. After the meeting broke up, the Americans went to several commercial establishments in Toronto to procure supplies needed for the transaction blank power of attorney forms (stock transfer forms) and a typewriter. Later the same day, Harte accompanied by Palmer arrived in Toronto. He proceeded to the hotel, where the samples were shown to Martin, Meierdiericks, and Marks. All agreed that the counterfeited TWA bonds and Walt Disney stock would be suitable for the transaction. Edwards told Harte that a full order was needed 800 TWA bonds and 300 one-hundred share certificates of Walt Disney Productions. Harte replied, however, that only 165 TWA bonds were currently available. He did inform Edwards that a virtually unlimited supply of two-hundred share certificates of the Walt Disney stock was available for the Canadian deal. After further negotiations between the conspirators, it was agreed that the two-hundred share certificates would be used in the transaction. 20 Palmer and Harte returned to Florida to pick up the currently available stock for the Canadian deal, planning to return to Toronto on the following day. Defendant Fred Schreier, who had obtained the counterfeited stocks and bonds from Fritz Hahn and Joseph Scales, delivered 165 TWA bonds for the Canadian deal to Palmer's residence. Women messengers brought the bonds in a shoe box to the Orlando airport, where the box was handed over to Palmer and Harte. The pair then flew back to Toronto. Harte and Palmer planned to return to Florida one more time to obtain the Walt Disney stock. 21 Back in Toronto, Harte and Palmer met Edwards at the hotel. After some difficulty obtaining an adequate typewriter and after hiring a temporary secretary, they began filling out the transfer forms that had been purchased earlier in the day. Unknown to Edwards, Harte, Martin, Palmer, and Meierdiericks, all of whom were in the Toronto hotel room, Louis Marks was actually an informant for Canadian law enforcement officials. The same afternoon the Royal Canadian Mounted Police raided the adjacent hotel rooms in Toronto and arrested Edwards, Harte, Martin, Palmer, and Meierdiericks. In the course of the raid, the counterfeited securities and other incriminating evidence were seized and ultimately turned over to American law enforcement officials. With the Canadian raid, the conspiracy collapsed and the instant prosecution commenced. 22 Some appellants argue that the existence of two groups of suppliers Orlando and Chicago and two groups of retailers Lax in Los Angeles and McConnell and Dondich working out of Florida destroyed the commonality of purpose and design need to establish the existence of a single overall conspiracy. Other appellants argue that the evidence of isolated criminal schemes engaged in by some of the defendants demonstrated the existence of multiple conspiracies to the exclusion of a single conspiracy. We disagree with both contentions. See United States v. Bruno, supra. The Chicago supply group, through the Florida middlemen, would furnish stolen securities to the retail buyers in Los Angeles represented by Carol Lax. The Chicago supply group, however, required payment for the stolen securities up front from the Florida middlemen. At this point, the Orlando supply group enters the picture. They would, and did, furnish the counterfeited securities for the Canadian front money deal, which deal required the participation of the second group of retailers headed by McConnell and Dondich. The participation of the Orlando suppliers and the second retailer group was an essential element in the Chicago-Los Angeles deal arranged by the same Florida middlemen. 23 Notwithstanding that the evidence showed some isolated schemes on the part of some defendants, the singleness of purpose in the larger conspiracy depicted by the Government's evidence is manifest. We hold that the evidence at trial, viewed in the light most favorable to the Government, established a single overall conspiracy in which defendants joined to distribute illicit securities in foreign and interstate commerce. Accordingly, we reject appellants' argument that there was a fatal variance between the indictment and the proof at trial. 1 24