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United States v. Lennox

decided: May 19, 1972.

UNITED STATES OF AMERICA EX REL. ABRAHAM SIEGEL, APPELLANT,
v.
WILLIAM M. LENNOX, SHERIFF OF THE COUNTY OF PHILADELPHIA



McLaughlin, Van Dusen and Aldisert, Circuit Judges.

Author: Aldisert

ALDISERT, Circuit Judge.

This appeal from the denial of a petition for habeas corpus contends that Bruton v. United States, 391 U.S. 123, 88 S. Ct. 1620, 20 L. Ed. 2d 476 (1968), requires the granting of the writ because a co-defendant's extrajudicial statement was improperly admitted against appellant in their joint Pennsylvania state trial for cheating by false pretense.

In 1964 and 1965, the Attorney General of Pennsylvania conducted a special probe of the Philadelphia Magistrate Courts. In a prosecution emanating from that investigation, appellant, a duly elected Constable of the City of Philadelphia, was convicted in April, 1966, on four indictments charging cheating by false pretense.*fn1 Co-defendant Harry Schwartz, a Philadelphia Magistrate, was convicted of cheating by false pretense, conspiracy, and malfeasance in office. Motions for new trial were denied and, on September 14, 1967, the Superior Court of Pennsylvania unanimously affirmed the judgments of sentence.*fn2 While appeal was pending before the Supreme Court of Pennsylvania, the United States Supreme Court handed down its decision in Bruton, upon which appellant relied in asserting for the first time the impropriety of the use against him of an unsworn, extrajudicial statement given by Schwartz to the Attorney General's investigators.*fn3

The statement revealed the corporate structure and method of operation of a collection agency which Schwartz had established in 1954. It detailed appellant's involvement with the business, both prior to and during his term as Constable. The Pennsylvania Supreme Court, without opinion, affirmed appellant's convictions by an equally-divided court.*fn4 Appellant timely filed a petition for habeas corpus relief in the Eastern District of Pennsylvania,*fn5 which was denied, as to the false pretense convictions, by Judge Joseph S. Lord, III. This appeal followed.

Putting aside the Schwartz statement, the evidence at trial disclosed the following: Schwartz was elected Constable in 1954, and in the same year he established the Active Collection Agency. Six years later he was appointed Magistrate. In that same year he caused Active to be incorporated, having his wife as President, and appellant, a Constable since 1958 and whom Schwartz had appointed as Deputy Constable in 1955, as Treasurer.

The Philadelphia Credit Bureau, which attempted to collect overdue bills on behalf of member stores, would refer delinquent accounts either to Active or directly to a Constable to process collection. Philadelphia frequently referred such accounts to appellant directly. In return for collecting on the accounts, appellant would receive a fixed percentage -- usually 23% -- from Philadelphia. No interest or other amount was ever authorized to be added to the charges appellant was to collect. The arrangement called for appellant to submit to Philadelphia the face amount in which the account was delinquent; subsequently, Philadelphia would remit the commission to appellant. Other creditors, such as the Lavino Shipping Company, had a direct arrangement with Active, in which appellant was authorized to collect the account, deduct his commission, and remit the balance to the creditor. Similarly, in such cases no additional charges or interest were authorized. Appellant's mode of collecting these accounts was summarized by the Superior Court:

On numerous occasions defendant Siegel made improper service of the summons, improper service of execution and levy, or failed to make a levy of any kind, and filled in as standard practice identical descriptions of property levied upon his returns. In the cases proved, certain amounts of money were added, which were pocketed by the collection agency and not paid to the creditor. Siegel also added mileage fees without regard to actual mileage, notwithstanding that the "service" was often improperly made. In addition, in each case costs were imposed of $7.50 or $9.00, in direct contravention of the statutory fee of $2.50.

The pattern of Siegel's conduct was that he would receive an IBM card or notice of claim with the name and address of the debtor, the amount of the real debt and the date of the last communication or payment by the debtor. Siegel would then add to the claim an arbitrary sum for interest and in some cases, without explanation, increased the amount of the real debt. A summons was then made out by Siegel and, after issuance by Magistrate Schwartz, service was made, often by mail rather than personally, as required by law, and on some occasions the summons was never actually served. This was followed by the entry of judgment by Schwartz in favor of the creditor.

After judgment was entered, Schwartz permitted Siegel to send out writs of execution under his, Mr. Schwartz' name, but Schwartz never followed up Siegel's actions. Siegel's levies were uniform in their impropriety -- notices of levy and inventory of goods levied upon were prepared in Siegel's office and were all virtually identical. Notices were either mailed to the debtor or left in the debtor's mailbox, without entry into the debtor's home. Siegel claimed and collected fees for this service which was improperly performed, and the fees claimed and collected did not conform to the statutory fee bill. The various creditors did not ask that interest be added or collected, and never received more than the real debt. The creditor sometimes received less than the real debt even though it was actually collected in full.

Commonwealth v. Schwartz, 210 Pa. Super. 360, 233 A.2d 904, 909-910 (1967).

In addition to presenting evidence of the foregoing modus operandi, the prosecution read into the record excerpts from a statement given by Schwartz to Philadelphia District Attorney Arlen Specter and to Special Assistant Attorney General John Mason. The parties agreed that the statement was not admissible against appellant, and prior to the reading from the statement the court so instructed the jury.*fn6 Only a few portions of the statement related to appellant:

Q. Is there an underlying arrangement between Mrs. Schwartz and Constable Siegel for division of the profits in a more or less partnership arrangement or what is the arrangement there, if any?

A. Mr. Siegel came to work for me in September 1953. At the magnificent sum of or munificent of $50 per week. And when I became Magistrate his -- I'll tell you the truth, his salary went up in leaps and bounds because that was terrific salvation not only to myself but to every member of my family, and I don't restrict it to 9:00 to 5:00. I mean twenty-four hours a day ...


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