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United States v. Sprengel

April 3, 1939

UNITED STATES
v.
SPRENGEL, AND FOUR OTHER CASES.



Appeal from the District Court of the United States for the Western District of Pennsylvania; Frederick P. Schoonmaker, Judge.

Author: Biggs

Before BUFFINGTON and BIGGS, Circuit Judges, and DICKINSON, District Judge.

BIGGS, Circuit Judge.

The appellants, with others, were indicted, tried and convicted upon charges of using the United States mails to defraud and with a conspiracy to use the mails to defraud. The indictment contined ten counts. Counts 1 to 9, inclusive, charged all of the defendants, including the appellants, with nine separate violations of Section 215 of the Criminal Code, 18 U.S.C.A. § 338. The tenth count charged all of the defendants, including the appellants, with a conspiracy to commit the offenses charged in the first nine counts in violation of Section 37 of the Criminal Code, 18 U.S.C.A. § 88. In so far as appears from the record, no question has been raised by the appellants as to the sufficiency of the indictment.

The frauds upon which the indictment was found are frauds growing out of the Baker or Becker estates. Jacob Baker is reported to have enlisted as a surgeon in the Continental Army in the Revolutionary War and as a reward for his services was rumored to have received extensive land grants, embracing some of the most valuable portions of the City of Philadelphia today, including the sites of the Wanamaker Store and of the City Hall. Jacob Baker is supposed to have died without heirs of the body, after further enlarging his reputed fortune by the West Indies trade, and to have left his property to his next of kin by a will alleged to have been dated in 1781. It was also rumored that these heirs of Jacob Baker fell into dispute, that for this reason the estate was never settled and that the heirs gave leases for ninety-nine years covering the lands which we have mentioned. It was reported also that very large sums were recovered by the United States Government under the French Spoliation Act for the destruction of Baker's ships in the West Indies trade, which were held in trust for the Baker heirs by the Government of the United States and by various banks. The estate was reported by the parties to the conspiracy to their dupes as possessing a value in excess of a billion dollars.

The business, and it was such, of collecting funds from the unwary to be used allegedly for expenses incurred in the collection of the assets of this mythical estate furnished a fertile field for the unscrupulous. Numerous associations were formed by individuals among the heirs of Jacob Baker. The means of exploitation pursued were invariably the same. An enrollment fee, usually in the sum of Ten Dollars, was asked and received. In return the dupe was "enrolled" among the heirs and thereby alleged to have become entitled to his share in the estate or estates. The record before us shows that the appellants have been engaged over a period of years in the collection of such fees, well knowing that the Baker estate was non-existent and well aware of the fact that the moneys paid by those they deceived would serve no legitimate purpose.

That one of the Baker heirs associations with which the appellants operated was entitled "The Central Executive Committee of the United Heirs of the Becker and Baker Leasehold Reversionary Estates of Pennsylvania". The appellant, William S. Miller, was the "General Secretary" of this committee or organization. The appellant, Blough, was its "Financial and Field Secretary", the appellant, Anderson, was designated as "Chairman, the Board of Examination of Lineage", and W. Cameron Smith, an attorney, engaged ostensibly to aid in the collection of the assets of the estate, was designated "Chairman, the Board of Legal Investigation". The appellants, Fred F. Sprengel and W. H. C. Sprengel, brothers, and the appellant, Wolford, aided the others whom we have named in obtaining money under false pretenses and in using the United States mails to defraud.

As we have stated, the procedure employed was to enroll gullible individuals as heirs upon the payment of a fee. This work was facilitated by obtaining the records of at least one other Baker heir association, viz., the Johnstown group, with which certain of the appellants had been connected. When a group of Baker heirs had been contacted by the appellants, investigation was then pursued through family lines to endeavor to ascertain others connected by blood who might be duped. The amount of money collected by the appellants and their co-conspirators is not entirely a matter of conjecture. It appears to have amounted to hundreds of dollars and was sufficient to maintain at least certain of the conspirators over a period of years. We may state, however, that the picture presented by the record before us is one of unrelenting fraud in the prosecution of which the appellants had an equal or an almost equal part. In our opinion there can be no question of the guilt of the appellants. What we must decide is simply whether or not the appellants were granted such a trial in substance and form as the law requires.

We state at this point that the bill of exceptions is inadequate and not in accordance with the strict rules of criminal procedure. Many of the exhibits to which the appellants refer are described inadequately in the bill of exceptions which in itself seems to embrace both pertinent and impertinent matter. Nor was the appeal perfected within the period prescribed by statute. Two extensions for settling and filing the bill of exceptions were granted out of time by the court below, the orders granting these extensions being vacated later. A petition was then filed by the appellants in this court " * * * to authorize the filing of the assignments of error and the settlement of the bill of exceptions by the trial judge." An order granting the relief sought was entered by this court without prejudice however to the right of the United States to move to strike the bill of exceptions and assignments of error as filed. The appeals then came before us for hearing.

To set aside these questions of procedure and to proceed to the merits of the appeals, we perceive prejudicial error to the appellants in the record before us. These errors may be described as falling into two categories: First, the introduction of testimony not sanctioned by the rules of evidence, in its nature bound to prejudice the appellants, and, second, remarks made by the prosecuting attorney in the course of the trial and in his address to the jury. The admission of certain other evidence to which the appellants have objected as being insufficiently connected with themselves or with the conspiracy in which they took part does not constitute prejudicial error in our opinion. Since all of these matters are closely related we will endeavor to deal with them together.

It must be borne in mind that the defense offered by the appellants was one of good faith, that they were acting honestly and with the intention of securing an estate for the heirs and had been duped by Smith. The good faith of the appellants or the lack of it was therefore an issue to be determined by the jury. Now the rule of law is well settled that where it is alleged that a scheme exists to induce persons to pay money in return for an interest or interests in property shown to be non-existent, evidence of intent may be extensive in scope and its admissibility rests largely within the discretion of the trial court. Hartzell v. United States, 8 Cir., 72 F.2d 569, 584, certiorari denied 293 U.S. 621, 55 S. Ct. 216, 79 L. Ed. 708. The reasons upon which this rule is predicated were enunciated by the Supreme Court in Wood v. United States, 16 Pet. 342, 359, 360, 10 L. Ed. 987, as follows: "The question was one of fraudulent intent or not; and upon questions of that sort, where the intent of the party is matter in issue, it has always been deemed allowable * * * to introduce evidence of other acts and doings of the party, of a kindred character, in order to illustrate or establish his intent or motive in the particular act directly in judgment. Indeed, in no other way would it be practicable, in many cases, to establish such intent or motive, for the single act, taken by itself, may not be decisive either way; but when taken in connection with others of the like character and nature, the intent and motive may be demonstrated almost with a conclusive certainty."

The record shows the following. W. Cameron Smith was engaged in the exploitation of Baker heirs from the year 1924 until the finding of the indictment against him in the case at bar in January, 1937. One William H. Baker, not a defendant, promoted six Baker heir associations over a period of many years. In June and July of 1929 Smith carried on negotiations with Baker with a view to combining their activities. About this time Baker entered into negotiations with Anderson, who was then the president of what is described as the "Johnstown Group". Smith later joined forces with Anderson and Miller. Anderson advised Baker heirs to get in touch with Baker, stating that he was " * * * on the right track".Anderson was well aware that the Post Office Department in 1929 had required Baker to desist from using the mails in connection with the promotion of his schemes. Smith had similar knowledge. Baker refused to join with the appellants. He threw in his lot with another group of promoters known as the "Biddle Group". Thereafter Miller attacked Baker as having become " * * * prey to evil counsellors * * * ". One Bertha Dodson, who was the subject of the bitter attack by Smith, worked with the Biddle group. Dodson's motives were also attacked by the other appellants. The Biddle group possessed a forged will purporting to be the will of Jacob Baker.Miller attacked this forged instrument, as did Blough, Fred Sprengel and Wolford. Anderson informed the enrollees of their group that Dodson had attended Baker estate hearings before the postal authorities and had satisfied them of the existence of a Baker estate. He recommended Dodson as " * * * the only person capable of handling the case * * * ".

Another group of individuals who exploited Baker heirs was known as the "Rennick Group". The record shows that Miller was well aware of the activities of this group and when one of his own enrollees informed him of the conviction of Rennick and his wife, he replied, "I knew of their racket a long time past." Newspapers published in Seattle, Washington, which reported the trial of the Rennicks were mailed to Blough.

It also appears that in 1917 Wolford was president of the Johnstown branch of the Baker Heirs Association, Inc., which we have referred to above. This purported to be a national organization. Anderson worked with Wolford to carry on this organization for a period of years. In 1920 Anderson was vice-president of the Johnstown branch and in 1929 was its president and acting secretary. At that time he had possession of all of its records. These were made available to all the appellants. The record shows that Miller introduced W. H. C. Sprengel, Fred. F. Sprengel and Blough to Smith early in 1933 and they had frequent meetings and conferences until the latter part of May, 1936. In July, 1933, Miller and Smith both wrote to certain of their enrollees that " * * * the heirs of the old Johnstown ...


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