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United States v. Frederick W. Klosterman. United States

decided: September 9, 1957.


Author: Staley

Before MARIS, KALODNER and STALEY, Circuit Judges.

STALEY, Circuit Judge.

These criminal appeals involve the defense of entrapment and present for our consideration the issue of whether the criminal intent proceeded from government agents or whether these agents simply afforded opportunities to those already disposed to the alleged criminality.

Appellants Deeney, Stafford, and Klosterman were indicted on January 26, 1956, on two counts. The first count charged that the three appellants conspired in violation of 18 U.S.C.§ 371(1) to defraud the United States, and (2) to commit the offense of bribery in violation of 18 U.S.C. § 201. The second count charged the three appellants with the substantive offense of bribery. Appellant Deeney, a special agent of the Internal Revenue Service, was separately indicted on the charge of conspiring with Klosterman and Stafford, not named as defendants, to defraud the United States in violation of the Internal Revenue Code, 26 U.S.C. § 7214(a)(4).

After the trial in which defendants presented no evidence, the jury found all defendants guilty as charged, with the exception of Klosterman who was acquitted on the conspiracy count alone. Upon consideration of defense motions for acquittal, the district court granted the motions on the conspiracy conviction of Deeney and Stafford and the conspiracy conviction against Deeney in the separate indictment. The substantive bribery conviction of each of the defendants was sustained. D.C.E.D.Pa.1957, 147 F.Supp. 843.These appeals were taken from the subsequent judgments and sentences.

Appellants' main contention is that the following factual situation compels the finding of entrapment as a matter of law, and thus necessitates the reversal of their convictions. The government's principal witness was J. J. King, a special agent of the Internal Revenue Service. King testified upon direct examination that he had been assigned in 1953 the investigation of the tax return of appellant Klosterman for the years 1948 through 1952, and that in August of 1955 the investigation had not yet been concluded.*fn1 Appellant Deeney was also a special agent of the Internal Revenue Service; King had known Deeney for three years and at the date of the trial had worked with him for two years. King testified that on August 24, 1955, Deeney approached him in the Camden office of the Internal Revenue Service and inquired about the progress of the Klosterman case. According to King, Deeney stated that a friend of his in the insurance business, later identified as Stafford, apparently handled Klosterman's insurance, and that this insurance man reported that Klosterman said he would be willing to pay King ten or twenty thousand dollars to have his tax case settled. King suggested to Deeney that the incident be reported to their superior, DiMaggio. Deeney said he would rather not because of the possibility of implicating his friend in the insurance business. King testified that he told Deeney to forget about it. On the next day, August 25, 1955, King related the incident to DiMaggio, and was thereupon directed to report to the Inspection Service in Philadelphia. The following day King asked Deeney if he had seen the insurance man, and Deeney replied, in King's words, "Yes, I saw him and I told him to stay away from me; that I don't want any part of this whole deal." About a week later, King met with DiMaggio and Inspectors Sweeney and Curren of the Inspection Service. King was instructed to seek out more information from Deeney, to find out who the insurance man was, and then to make as arrangement to meet Klosterman so that King might accept the supposed bribe and thus complete the trap. Pursuant to these instructions and after a Minifon recorder had been attached to his person, King telephoned Deeney and requested that he meet him so that they might talk. After Deeney arrived at the designated place, King began the conversation by asking Deeney more about the Klosterman deal. Deeney replied that the ceiling for settlement was now $50,000, and that he, Deeney, could arrange a meeting with the insurance agent. Subsequently, King inquired of Deeney about ten or eleven times whether he had arranged a meeting with the insurance agent, and on each occasion Deeney replied that he had not. On one such occasion, September 20, 1955, after King had inquired whether Deeney had contacted the insurance man, Deeney replied that he had, and the insurance agent did not want anything to do with the scheme.Deeney added, "Besides that, we should consider our own positions. We are both making pretty good salaries and we would only be jeopardizing our positions if we went for this deal." King testified as to the remainder of the conversation in this manner: "And he also said that if we did go for this deal, why, thereafter any gambler or racketeer in that area would have us in the palm of their hands, so to speak * * *. And I agreed with him and told him we had better forget about the whole thing. That conversation ended there."

Notwithstanding Deeney's apparent effort to forget the matter, King nonetheless waited only one week and again asked Deeney to arrange a meeting with the insurance man. Deeney replied that he would see what he could do.

Several weeks passed without word from Deeney. Then on October 19, 1955, in the presence and at the direction of Inspector Sweeney and DiMaggio, King telephoned Deeney at Deeney's home and said that he had to meet the insurance man that night and added, "This whole deal has been tearing me apart and I want to know what it is all about."

Finally, Deeney yielded and arranged a meeting that night with Stafford, the insurance man. At this meeting, the conversation indicated that Stafford was aware of the financial arrangements involved in the bribe, evidencing the fact that he had conversed with Deeney on that subject.King then suggested a meeting with Klosterman at Camden, but Stafford said that Klosterman was too well known there. King then suggested a meeting with Klosterman at a Philadelphia hotel on October 21, 1955.

At the Philadelphia meeting, Klosterman gave to King $5,000 in cash. At a pre-arranged signal, Curren and Sweeney arrested Klosterman.

Sorrells v. United States, 1932, 287 U.S. 435, 53 S. Ct. 210, 77 L. Ed. 413, in the foundation upon which is built the superstructure of entrapment law in the federal courts. There the Supreme Court said, 287 U.S. at pages 441, 442, 53 S. Ct. at page 212:

"It is well settled that the fact that officers or employees of the government merely afford opportunities or facilities for the commission of the offense does not defeat the prosecution. Artifice and stratagem may be employed to catch those engaged in criminal enterprises. [Citing cases.] The appropriate object of this permitted activity, frequently essential to the enforcement of the law, is to reveal the criminal design * * *. A different question is presented when the criminal design originates with the officials of the government, and they implant in the mind of an innocent person the disposition to commit the alleged offense and induce its commission in order that they may prosecute."

The Court went on to cite Butts v. United States, 8 Cir., 1921, 273 F. 35, 38, 18 A.L.R. 143, to the effect that it is unconscionable and contrary to public policy to punish a man for a crime he evidently would never have committed were he not inspired, incited, and persuaded by officials of the law. The Court decided that under such circumstances no crime was committed, for Congress could not have intended that an act within the literal meaning of a criminal statute would be a crime if incited by those whose purpose it is to prevent crime. Traps and decoys are sometimes permitted. "The predisposition and criminal designs of the defendant are relevant." 287 U.S. at page 451, 53 S. Ct. at page 216.

The decisions of this court which predate the Sorrells case expressed views consistent with it. Luterman v. United States, 3 Cir., 281 F. 374, certiorari denied, 1922, 260 U.S. 732, 43 S. Ct. 94, 67 L. Ed. 486; Zucker v. United States, 3 Cir., 288 F. 12, certiorari denied, 1923, 262 U.S. 756, 43 S. Ct. 703, 67 L. Ed. 1218; Rosso v. United States, 3 Cir., 1924, 1 F.2d 717. And our decisions after Sorrells have fully recognized and followed the principles of that case. United States v. Brandenburg, 3 Cir., 162 F.2d 980, certiorari denied, 1947, 332 U.S. 769, 68 S. Ct. 80, 92 L. Ed. 354; United States v. Roett, 3 Cir., 172 F.2d 379, certiorari ...

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