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United States v. Wolfson


decided: January 20, 1972.


Van Dusen and James Rosen, Circuit Judges, and Becker, District Judges.

Author: Van Dusen


VAN DUSEN, Circuit Judge.

This case comes to this court on appeal from the criminal convictions of Nathan Wolfson and William F. Emmons in the District Court for the District of Delaware. Wolfson and Emmons were indicted on June 7, 1968, and charged under 18 U.S.C. § 371 with a conspiracy to violate the mail fraud statute, 18 U.S.C. § 1341, and with 28 additional substantive violations of the mail fraud statute.*fn1 Count 1 of the indictment charged that the defendants conspired to use the mails in furtherance of a scheme to defraud Agents General Insurance Company, Ltd. ("Agents General"), various insurance agents, and those whom the defendants induced to purchase insurance from Agents General. Counts 2 through 29 of the indictment charged that in furtherance of this scheme, the defendants either placed in the mails or received through the mails certain correspondence relating to the scheme outlined in Count 1. A jury trial lasting 12 days was held between November 3, 1969, and November 25, 1969.*fn2 At the close of the Government's evidence, the district court granted the defendants' motions for acquittal as to six counts of the indictment, but denied the motions as to the remaining counts.*fn3 On November 25, 1969, the jury found Wolfson and Emmons guilty on all the remaining counts. On February 3, 1971, the district court granted the defendants' Rule 29(c) motions for judgment of acquittal as to five of the counts, but denied these motions as to the remaining counts. United States v. Wolfson, 322 F. Supp. 798 (D.Del.1971). Defense motions for a new trial pursuant to Rule 33 of the Federal Rules of Criminal Procedure were also denied. Id.

On appeal, attorneys for Wolfson and Emmons have strenuously argued that the district court erred in denying defense motions for a judgment of acquittal as to all counts of the indictment or, in the alternative, the motions for a new trial. Counsel allege the following errors:

1. The Government's failure to inform the defendants that Mr. S. J. Sexton of Toronto, Canada, was present in Wilmington, Delaware, during the course of the trial constituted a denial of the defendants' rights guaranteed by the Fifth and Sixth Amendments to the Constitution (see 322 F. Supp. at 818-822).

2. The district court's failure to adequately instruct the jury on Canadian insurance law was prejudicial error (322 F. Supp. at 828-830).

3. The district court's refusal to grant defense motions for severance (322 F. Supp. at 816-817) and for free daily transcripts*fn4 (322 F. Supp. at 818) denied defendants the benefit of a fair trial.

4. Defendants were denied a fair trial by means of the Government's failure to adhere to a pre-trial agreement relative to Jencks Act material (322 F. Supp. at 817-818) and its improper closing remarks to the jury (322 F. Supp. at 824-828).

5. The Government did not present competent evidence at the trial which would link Wolfson and Emmons directly with the mail fraud violations alleged in the indictment and developed by the Government's evidence at trial.

6. Numerous errors in the admission of incompetent and prejudicial testimony made a fair trial impossible (see, e. g., 322 F. Supp. at 822-824).

After an exhaustive review of the record and a thorough reading of the extensive briefs filed by counsel, we find the arguments advanced on behalf of Wolfson and Emmons to be without merit. The first four alleged errors outlined above are adequately dealt with in the lengthy and comprehensive opinion of the district court, to whom they were first addressed. See United States v. Wolfson, 322 F. Supp. 798 (D.Del.1971). Thus, we find it necessary to refer only to the last two arguments mentioned above.

First, Wolfson and Emmons have argued that the Government has not established a fundamental element of the charges contained in the indictment, specifically that Wolfson and Emmons are criminally responsible for the actions and inactions of Canadian and British Insurance Managers, Ltd. ("Canadian and British, Ltd."). Basically the Government attempted to prove (1) that the defendants had induced Agents General -- a Canadian insurance company -- to enter into an agency agreement authorizing Canadian and British, Ltd. -- a Bahamian Company -- to act as its United States agent, (2) that the defendants made use of Canadian and British, Ltd. and other companies, particularly Excess Insurance Corporation of America ("Excess"), in order to induce various insurance agents in the United States to place insurance with Agents General and (3) that the companies controlled by the defendants fraudulently failed to report to Agents General insurance which they had written and, in fact, submitted to Agents General information and reports which were knowingly false. In addition, the Government sought to establish that, as a part of this fraudulent scheme, the defendants wrote insurance in the United States both before Agents General had received approval from the Superintendent of Insurance for the Province of Ontario and after they (the defendants) had received notice that the Ontario Insurance Superintendent had restricted Agents General's license to forbid the insuring of risks outside of Ontario. It was also alleged that the defendants wrote insurance for Agents General for risks which the company was not authorized to accept and in amounts in excess of the company's authorized liability limits.*fn5

Counsel for Wolfson and Emmons argue that even if the fraud alleged by the Government has occurred, there is no substantial evidence that Wolfson and Emmons are responsible for it. This argument is bottomed in two agreements introduced in evidence by the Government. The first is GX-1, an Agents Contract entered into on December 6, 1965, between Agents General and Canadian and British, Ltd., which authorizes the latter to write insurance for Agents General and also to sub-delegate its authority under the contract to "Sub-Agents." The second is GX-5, a Correspondents' Contract between Canadian and British, Ltd. and Excess dated December 15, 1965, in which Excess is authorized to act as the "correspondent" of Canadian and British, Ltd. in the writing of insurance for Agents General. Both agreements were signed on behalf of Canadian and British, Ltd. by persons other than Wolfson and Emmons. Thus, Wolfson and Emmons argue that even if they controlled Excess (which they concede), what wrongdoing has occurred is the responsibility of those in control of Canadian and British, Ltd. and that there is no evidence that they exercise such control.

This argument, advanced by counsel for Wolfson and Emmons, is adequately refuted by the trial record. This record indicates numerous instances in which both Wolfson and Emmons actively participated in and directed the affairs of Canadian and British, Ltd., so that there was clearly an adequate basis for the jury's implicit finding that Wolfson and Emmons were responsible for the fraudulent activities conducted in the company's name.*fn6 There was also evidence from which the jury could reasonably conclude that (1) Wolfson and Emmons knew that the Ontario Insurance Commissioner had restricted Agents General from insuring risks outside of Canada after April 14, 1966,*fn7 and (2) these defendants sold Agents General policies after this date*fn8 (see, e.g., 322 F. Supp. at 810). Finally, there was evidence to support a jury finding that Wolfson and Emmons, having notice that Agents General was in extreme difficulty with the Ontario Insurance Commissioner, continued to write or authorize the writing of insurance in Agents General's name without revealing these difficulties to the agents with whom they dealt.*fn8 In sum, there is substantial evidence that Wolfson and Emmons were not merely sub-agents of Canadian and British, Ldt., but were instead prime movers of a fraudulent scheme conducted under its aegis.

Counsel for Wolfson and Emmons also argue that numerous errors in the admission of evidence require that a new trial be ordered. We have carefully examined all of the errors alleged both in the briefs submitted by counsel (especially pp. 45-58 of appellants' brief) and at oral argument and find that none of them furnish a basis for a new trial. Also, we have considered and rejected the other contentions of the defendants.

Accordingly, the judgments of conviction entered against Wolfson and Emmons by the district court will be affirmed.

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