Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

UNITED STATES v. EPSTEIN

June 13, 1957

UNITED STATES of America
v.
Harold EPSTEIN



The opinion of the court was delivered by: DUSEN

This case comes before the court on post-trial motions filed by defendant after the jury found him guilty of devising a scheme to defraud and carrying it out, through the use of the mails to send false financial statements to persons from or through whom he wished to secure credit, in violation of 18 U.S.C.A. § 1341. *fn1"

I. Motion For Judgment of Acquittal

 The uncontradicted evidence showed that defendant asked an accountant (Mr. Segal) to prepare financial statements of the condition of his retail clothing store business as of 12/31/53 and 3/31/54 'for the purpose of procuring credit' (N.T. 75). The defendant told the accountant that these statements were to be sent to the 'usual credit agencies in the trade' (N.T. 76). In preparing the statement, the accountant asked the defendant 'how much stock do you have that is your own' (N.T. 84, 86) and told him that consignment merchandise should not be included in this inventory figure. *fn2" The defendant told the accountant to include $ 10,804 in inventory as of 12/31/53 and $ 12,500 as of 3/31/54 (N.T. 74-5). The defendant admitted on at least one occasion in February of 1954, incident to investigation of a burglary loss in his store, that 95% of the stock in defendant's store was on consignment (N.T. 90 and 38, 54). Counts of the merchandise in the store made on february 19 and April 1, 1954, indicated that the greater portion of such stock was on consignment (N.T. 70-72). The value of the defendant's own stock or inventory on March 31, 1954, did not exceed $ 2,000. The $ 12,500 inventory figure was the largest item on the March 31, 1954, statement and, with this item, the statement showed capital of $ 22,585.41 (see Exhibit G-2).

 Copies of these statements were given by defendant to the accountant (N.T. 76). Also, at defendant's 'direction' on April 27, 1954, the accountant typed and signed a covering letter of transmittal of the March 31, 1954, statement addressed to Credit Exchange, Inc., New York City, and delivered this letter, with a copy of the statement, to defendant so he could mail it in Credit Exchange's envelope to New York City (N.T. 77-9; see G-2 and N.T. 19).

 The Credit Exchange *fn3" received a financial statement of Harold Epstein, dated March 31, 1954, through the mail in an envelope postmarked Philadelphia, Pa., April 27, 1954. The statement was accompanied by a letter of transmittal on the stationery of Benjamin M. Segal, Public Accountant and Auditor, the letter being dated April 27, 1954, and signed by Benjamin M. Segal. *fn4"

 It has been repeatedly held that sending of false financial statements through the mail in order to secure credit, knowing that such statements are false, is a violation of this provision of the Federal Criminal Statutes. Slakoff v. United States, 3 Cir., 1925, 8 F.2d 9; Scheinberg v. United States, 2 Cir., 1914, 213 F. 757; Bettman v. United States, 6 Cir., 1915, 224 F. 819; United States v. Yorsaner, D.C.,E.D.N.Y.1937, 20 F.Supp. 902.

 Under these circumstances, the motion for judgment of acquittal must be denied.

 II. Motion For New Trial

 Since the foregoing section of this opinion makes clear that the guilty verdict was not against the weight of the evidence, only the following three alleged grounds for new trial need be commented on in this opinion:

 A. Admission of testimony given voluntarily by defendant in involuntary proceeding under Section 21, sub. a of the Bankruptcy Act before the adjudication that he was a bankrupt.

 Although defendant was directed by the court to appear at the examination before a Referee under § 21, sub. a *fn7" of the Bankruptcy Act, he was under no duty to testify. He could not have been compelled to testify unless the Act makes it his duty to do so, and it is only in such instances that his testimony may be privileged. *fn8" Arndstein v. McCarthy, 1920, 254 U.S. 71, 41 S. Ct. 26, 65 L. Ed. 138, affirmed 1923, 262 U.S. 355, 43 S. Ct. 562, 67 L. Ed. 1023, reaffirmed, 1924, 266 U.S. 34, 45 S. Ct. 16, 69 L. Ed. 158; Goldstein v. United States, 5 Cir., 1926, 11 F.2d 593, certiorari denied, 1926, 271 U.S. 667, 46 S. Ct. 483, 70 L. Ed. 1141. See, also, Cajiafas v. United States, 6 Cir., 1930, 38 F.2d 3; White v. United States, 1 Cir., 1929, 30 F.2d 590; Optner v. United States, 6 Cir., 1926, 13 F.2d 11, 13. *fn9"

  Section 7 of the Bankruptcy Act *fn10" details the duties of the bankrupt, *fn11" and any testimony of the bankrupt given at an examination under this Section, being compulsory, may be privileged. *fn12" But testimony under § 21 is given by the bankrupt as it would be by any other witness in a proceeding in which it is not made his duty to testify, and, therefore, it is not privileged. *fn13"

 Thus, if the defendant was in fear of furnishing incriminating information against himself at the examination under § 21, sub. a, he could have then asserted his constitutional privilege and refused to answer the questions asked of him. McCarthy v. Arndstein, *fn14" supra. If the Referee had certified the matter for contempt proceedings to the court as the result of his refusal ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.