LEMON v. UNITED STATES

HAMLEY, Circuit Judge.

Jack A. Lemon and Martin de Bruin were jointly tried and convicted on all counts of a five-count indictment charging use of the mails to defraud, in violation of 18 U.S.C.A. § 1341.1 The activity in connection with which they were convicted involved the sale of booklets entitling the purchaser to receive certain articles and services from Honolulu merchants. The sales were made over the telephone, and the orders were filled and payments obtained by means of C.O.D. mailings.

Appealing to this court, defendants contend that the evidence is insufficient to support the jury verdict. They concede that the mails were used in filling the orders and obtaining payments. Appellants assert, however, that the evidence was insufficient to warrant a finding that there was involved any scheme to defraud residents of Honolulu, or to obtain money therefrom by means of false or fraudulent pretenses, representations, or promises, as charged in the indictment.

All counts of the indictment charged the same scheme, but each named a different person as addressee of a booklet mailed C.O.D. Each appellant was sentenced on each count to imprisonment for three months and to pay a fine of five hundred dollars. The sentences on all counts were concurrent, and the judgment provided that payment of the fine on count I would constitute payment on each of the remaining counts. By necessary inference payment of the fine on any count would thus constitute payment on each of the other counts. It follows that if the evidence is sufficient to sustain the conviction on any count the judgment is to be affirmed. Stein v. United States, 9 Cir., 263 F.2d 579.

Consistent with the factual allegations contained in count III, substantial evidence was received tending to show as follows: Appellants contacted a number of Honolulu merchants and obtained contracts under which each merchant agreed to honor service cards or coupons reciting that specified articles or services were available from such merchant without charge, or at a discount, with or without stated conditions of the kind described below. Service cards and coupon books, the latter denominated "Honolulu Customers Checkbook," describing what articles and services were available from which merchants were then printed.

Residents of the City and County of Honolulu were then called on the telephone, a number of women being employed to place these calls. In making these calls the women were directed to, and for the most part did, follow written instructions worded substantially as quoted in the margin.2 Among those called on the telephone was J. Nozawa, named in count III as an addressee of matter mailed in execution of appellant's plan, and who appeared as a witness.3

This witness testified in part:

Nancy Nozawa further testified that she agreed over the telephone to pay the $4.75 charge and later paid a C.O.D. charge of $4.90 when the booklet was delivered. This booklet contained coupons entitling her to all of the articles and services which had been mentioned over the telephone. However, conditions which were not mentioned over the telephone were attached to some such items. Certain other items, as described below, would have been available to her free of charge without the need of a coupon.

Nancy Nozawa testified that the telephone caller led her to believe that there were many other merchandise gifts which she had won in addition to those named over the telephone. Indicating the effect which this telephone call had upon her, this witness testified:

The envelope which Nancy Nozawa received through the mail and for which she paid a C.O.D. charge of $4.90 contained two pieces of printed matter. One was a "Honolulu Customers Check Book." It contained twenty-nine coupons, each referring to some article or service to be obtained from some Honolulu merchant. The other piece of printed matter was labeled "Passenger Car Service Card."

The two pieces of printed matter entitled the holder to certain articles and services from indicated merchants without charge and with no conditions of consequence attached, as listed in the margin.4 No evidence was offered as to the total value of these items. However, each such article or service has a normal price range which is commonly known. The jury could have found that the total value of the items listed in footnote 4 could not have exceeded thirty or thirty-five dollars, without regard to the factors mentioned below.

The coupon representing seven dollars in Stauffer System treatments was actually worth only $3.50, since one $3.50 treatment could have been obtained without a coupon. Likewise, one of the two Arthur Murray dance lessons referred to in the booklet could have been obtained without any coupon. The two pieces of printed matter also refer to a number of other items which were available only by making another purchase, or as a discount, or upon some other condition not named during the telephone conversation.5

The elements necessary for a conviction under 18 U.S.C.A. § 1341 are (1) the formation of a scheme with an intent to defraud, and (2) use of the mails in furtherance of that scheme. No actual misrepresentation of fact is necessary to make the crime complete. Gregory v. United States, 5 Cir., 253 F.2d 104, 109.

Appellants argue that the technique used in soliciting the order, whereby Nancy Nozawa was congratulated upon answering a simple question and told that she had thereby won certain merchandise, did not involve false or fraudulent pretenses, representations, or promises within the meaning of § 1341. This technique, appellants contend, could not have deceived any except the most gullible.

It is immaterial whether only the most gullible would have been deceived by this technique. Section 1341 protects the naive as well as the wordlywise, and the former are more in need of protection than the latter. United States v. Sylvanus, 7 Cir., 192 F.2d 96, 105. As a matter of fact, "* * * the lack of guile on the part of those solicited may itself point with persuasion to the fraudulent character of the artifice." Norman v. United States, 6 Cir., 100 F.2d 905, 907.

The jury could find that appellants intended to deceive by the described ruse, else they would not have used it. The evidence indicated that they were successful in doing so, though the government was not required to prove that the scheme succeeded. Kreuter v. United States, 5 Cir., 218 F.2d 532.

In addition to the foregoing evidence which indicates formation of a scheme intended to deceive, two actual misrepresentations of fact were made. One of these was the representation that the $4.75 or $4.90 charged for the coupon book was only to defray expenses of "printing and handling." Actually the major part of this amount went directly to appellants. Had this statement not been made, the person solicited would not have been thrown off guard concerning the solicitor's interest in obtaining an order, and in all probability would have been more wary.

Then there was the studied withholding of information concerning conditions attached to many of the coupons. The difficulty here is not that the articles and services which could be obtained were worth less than the price paid. Rather, it is that the full value represented could not be obtained except upon unmentioned terms and conditions which were unfavorable to the person solicited.

This is not to say that it was necessarily the duty of the solicitor to spell out each and every term and condition attached to the coupons. Honest solicitation, however, required that the promise of free merchandise be tempered with some reasonable mention of the strings attached. See, also, United States v. Sylvanus, supra, 192 F.2d at page 105.6

The evidence tending to show the combination of deceits described above is ample to sustain the verdict on count III.

The judgments are affirmed.

MATHEWS, Circuit Judge (concurring in the result).

On October 3, 1958, in the United States District Court for the District of Hawaii, appellants (Jack A. Lemon and Martin de Bruin)1 were indicted for violating 18 U.S.C.A. § 1341. The indictment was in five counts.

Count 1 alleged, in substance, that, having devised and intending to devise a scheme and artifice to defraud and for obtaining money and property by means of false and fraudulent pretenses, representations and promises, appellants, for the purpose of executing said scheme and artifice, and attempting to do so, did, on or about June 10, 1958, in the City and County of Honolulu, in the District of Hawaii, place in an authorized depository for mail matter a letter addressed to Clayton C. Holloway, to be sent and delivered by the Post Office Department.

Counts 2-5 were similar to count 1, except that, instead of referring to a letter placed in an authorized depository on or about June 10, 1958, addressed to Clayton C. Holloway, count 2 referred to a letter placed in an authorized depository on or about June 14, 1958, addressed to Mrs. William K. Kahookele; count 3 referred to a letter placed in an authorized depository on or about June 16, 1958, addressed to J. Nozawa; count 4 referred to a letter placed in an authorized depository on or about June 16, 1958, addressed to Margaret Sorrell; and count 5 referred to a letter placed in an authorized depository on or about June 17, 1958, addressed to Robert Enomoto.

Appellants were arraigned, pleaded not guilty, had a jury trial and were found guilty on each count of the indictment. Thereupon, two judgments of conviction were entered — one against appellant Lemon and one against appellant de Bruin. Thereby each appellant was sentenced on each count to be imprisoned for three months and to pay a fine of $500.2 This appeal is from the judgments.

The question presented is whether the evidence was sufficient to sustain the conviction of appellants or either of them on counts 1-5 or any of them. There was substantial evidence to the following effect:

On or before June 10, 1958, appellants devised a scheme for obtaining money from persons hereafter called the persons from whom appellants schemed to obtain money. There were more than 4,000 such persons.

It was part of the scheme that appellants, acting by and through their agents and employees, would make to each of the persons from whom appellants schemed to obtain money pretenses, representations and promises3 to the effect (1) that appellants would send to each such person by mail, C.O.D., a check book4 worth over $50 in car services, entertainment tickets and free gifts; (2) that such check book would be delivered to such person upon payment of $4.75 to the mail carrier;5 and (3) that each person to whom such check book was delivered would receive, without further cost or obligation, goods and services having a value of more than $50.

It was part of the scheme that these pretenses, representations and promises would be false; that, after making them, appellants would send by mail, C.O.D., to each of the persons from whom they schemed to obtain money a sealed envelope to be delivered to such person upon payment of $4.75 to the mail carrier; that, instead of the promised check book, such envelope would contain a booklet6 consisting of coupons purporting to be "redeemable" in goods or services by persons and firms whose names were printed thereon; and that such booklet would have very little, if any, value.

It was part of the scheme that, relying on the false pretenses, representations and promises mentioned above, each of the persons from whom appellants schemed to obtain money would believe that the sealed envelope sent by appellants contained the promised check book and, so believing, would pay $4.75 to the mail carrier, whereupon the envelope containing a booklet of coupons, but no check book, would be delivered to such person, and the $4.75 would be sent to and received by appellants.

Obviously, the scheme was one for obtaining money by means of false pretenses, representations and promises.

Having devised the scheme, appellants, for the purpose of executing it, did, on or about June 10, 1958, in the City and County of Honolulu, place in an authorized depository for mail matter a letter addressed to Clayton C. Holloway, to be sent and delivered by the Post Office Department.

I conclude that the evidence was sufficient to sustain the conviction of each appellant on count 1. Since the sentences on counts 2-5 added nothing to the sentences on count 1,7 it is unnecessary to decide whether the evidence was sufficient to sustain the conviction of appellants or either of them on counts 2-5 or any of them.8

For the reasons I have indicated, the judgments should be affirmed.