The opinion of the court was delivered by: VANARTSDALEN
VANARTSDALEN, District Judge.
Defendants were charged under Title 18 U.S.C.A. § 371 (1966) (Conspiracy) with conspiring to violate Title 18 U.S.C.A. § 2315 (1970) (Receipt and Pledge of Stolen Securities -- Interstate). The government contended that two certificates representing 3745 shares of Common Stock of Chrysler Motors were stolen from a brokerage firm's New York vaults, transported to Pennsylvania, where the defendants, knowing that the securities were stolen, attempted to pledge them with a Philadelphia bank for a large cash loan. Four of the six defendants were charged with the substantive violation of 18 U.S.C.A. § 2315 in addition to the conspiracy count.
The testimony indicated that government agents were told by a "confidential informant" that Weinberg had access to One Million Dollars ($1,000,000) in stolen securities (3-52).
The confidential informant was identified as Charles Cardonick who was an acquaintance of some, if not all, of the defendants. The informer indicated that the stolen securities were believed to be United States Treasury notes. As a result, a special agent of the Secret Service of the United States Treasury Department was assigned to be in charge of the investigation. He posed in an undercover capacity as a bank loan officer for a Philadelphia bank, using the assumed name of John Campbell. The agent, with the aid of the informer, conducted a series of clandestine meetings separately with Weinberg, Chilengarian and Gornish. In the best "cloak and dagger" tradition, complicated arrangements were negotiated whereby the suspected stolen securities were to be turned over to the agent in his undercover capacity in return for a large cash loan.
The transaction culminated on December 14, 1970, when Chilengarian and the informer entered the bank and Chilengarian delivered to the agent the two certificates for 3745 shares of Chrysler Motors stock. Chilengarian was immediately arrested. Blank and Kasparian, who had brought Chilengarian and the informer to the bank and were waiting outside in a car for their return with the money, were likewise arrested. Grasso and Gornish, also waiting outside the bank in another car were arrested. Weinberg was arrested about one hour later at his Philadelphia office.
MOTIONS FOR JUDGMENT OF ACQUITTAL
A careful review of the evidence indicates that there was sufficient evidence upon which the defendants could be found guilty of conspiracy. The motions for judgment of acquittal will be denied.
The evidence of the conspiracy consisted of testimony of the agent as to the various meetings he had with Weinberg, Gornish and Chilengarian; the testimony of Chilengarian that clearly and directly implicated Weinberg, Gornish and Blank and was sufficient to implicate Kasparian. Several items which tended circumstantially to corroborate the relationship between the various defendants were seized from some of the defendants at the time of their arrests and received in evidence.
The following is a brief summary of the meetings held between the agent and the various defendants:
1. On November 24, 1970, the informer introduced the agent to Weinberg at the Walnut Grill in Philadelphia. The agent posed at that time and all subsequent times as a branch bank loan officer named John Campbell. The discussion concerned delivery of the securities in return for a large bank loan. Weinberg indicated that the securities would be treasury notes in $25,000 denominations -- the serial numbers of which he would shortly supply. He further indicated that in a "package type deal" other types of securities might be included and that a deal might be able to be consummated in the near future for a large amount of securities. Weinberg stated that a "loan on a million dollars worth of securities should be about $400,000". (3-34, 36).
2. On December 1, 1970, at a midcity restaurant, Weinberg and the agent again met and discussed the matter. The agent, who had not indicated in which bank he was employed, was questioned by Weinberg who expressed skepticism as to the agent's identity. Weinberg told the agent he knew the agent worked at The First Pennsylvania Bank & Trust Company because he, Weinberg, had already received a blank checking account card from that bank (3-124). Weinberg also asked how payment would be made to which the agent indicated that $50,000 would be paid in cash and $350,000 placed in a checking account where it could be easily withdrawn.
3. On December 3, 1970, Weinberg met the agent at The First Pennsylvania Bank & Trust Company, where Weinberg produced a list of securities, consisting mostly of corporate stock certificates -- none of which were Chrysler Motors or government securities. When the agent questioned Weinberg as to the absence of government securities, Weinberg replied that it was only a partial list. Weinberg said that one of his "associates" would come to the bank to complete the preliminary paper work (3-124, 126).
4. Chilengarian came to the bank with the informer on December 8, 1970, where the informer introduced Chilengarian to the agent. Chilengarian, using the name Morris Abel,
told the agent he was prepared to complete the "loan application and fill out the checking account card to facilitate the loan." (3-127). Account cards under the name Penn Chevrolet Company were signed. Chilengarian said the securities were ready and that the transaction would probably occur the next day. The agent told him the funds would be available and could be taken from the bank on the delivery of the securities. (3-131).
5. On December 9, 1970, the informer introduced the agent to Gornish at a pre-arranged street corner, where they conversed in a parked car. Gornish said the securities were not then in Philadelphia but were en route. Gornish said the deal would take "a little while" and that "the stuff" was in New York. He told the agent to be patient. There was a discussion as to the amount of money to be paid and Gornish said there should be a larger amount of cash. The agent told Gornish that as soon as he obtained information as to "what was going to be coming", he could tell how much cash could be paid. Gornish then went into a nearby office building. He returned a few minutes later and said he had been unable to reach his "contact" by telephone. They then moved the car to another location where Gornish showed the agent the same list of securities that Weinberg had shown him. Gornish told the agent he had given the list to Weinberg and that he, Gornish, "was the top man" and he was "taking care of everything" and that the agent should "listen to him." (3-132 to 142).
6. Gornish telephoned the agent at the bank on three occasions on December 10, 1970, and assured him that the securities would be coming and that "the deal could go through". Gornish said the securities were still not in Philadelphia, but that a man named John, from South Philadelphia, was getting them. (3-145, 148).
8. On December 14, 1970, Chilengarian came into the bank with the informer. The agent asked if he was ready to complete the transaction and he said he was. Chilengarian then handed the two stock certificates to the agent and immediately thereafter Chilengarian was arrested and the other arrests promptly followed.
In addition to the testimony of the agent, the defendant, Chilengarian, who had pleaded guilty, testified. Chilengarian said that Kasparian called him in early December and told him of the possibility of Chilengarian going into a new car agency through a contact of Kasparian's. The following day Chilengarian was introduced to Blank by Kasparian. A discussion took place as to going into business through money that would be obtained through a bank loan. Blank then took Chilengarian to meet the informer. The informer indicated he was familiar with a bank loan officer. It was also indicated that the person who would go into business with Chilengarian had "access to" certain securities of his grandfather which would be pledged for the loan. Chilengarian was informed that the securities were not owned by the person who would deliver them and that the owner had not given permission for their use but that the grandfather would approve the use when he found that the grandson was going to pledge them to secure funds for a legitimate business. Chilengarian and the informer then went to the bank in a car driven by Blank, where Chilengarian was introduced to the agent in the agent's undercover capacity and preliminary arrangements for the "loan" were then made. Chilengarian signed a card to open the account under the name Penn Chevrolet. They then returned to Blank's car and Blank took Chilengarian home after first picking up Gornish in a center city office. Blank introduced Chilengarian to Gornish. Chilengarian was told he would be notified when the securities were available. A day or so later, Blank told him by telephone that things were not progressing as fast as anticipated and that the stocks were in Elizabeth, New Jersey. Chilengarian testified that some time later Kasparian telephoned and said that he had been asked to call Chilengarian to inform him that final arrangements could not be made until the following week. On a Monday, Blank said everything was ready. Blank picked Chilengarian up in a car. They went to the same office building where Chilengarian first saw Gornish, where Blank told Gornish that Chilengarian could not go to the bank until 12:30.
Chilengarian then left. When he returned, Gornish told him that everything was ready and that "they are waiting for you in the car". Blank was driving the car and the informer and Kasparian were passengers. Black pulled out the securities and handed them to the informer who passed them to Chilengarian who was sitting in the back seat with Kasparian. Kasparian looked at the securities with Chilengarian. Gornish had told Chilengarian that he, Gornish, would follow in another car and would see him at the bank. Grasso and Gornish followed the car that was driven by Blank. Blank told Chilengarian to make the transaction and immediately bring the money outside. (6-97). Blank told Chilengarian he was to get $10,000 in cash and $30,000 in a check.
The prosecution also presented evidence concerning the inventory controls and audit of the brokerage firm which was sufficient for the jury to find that the two stock certificates representing 3745 shares of Chrysler Motors Common disappeared from its New York office vaults during 1970 under such circumstances that the loss could be accounted for only by a theft or an unlawful conversion or taking as required under 18 U.S.C.A. § 2315. The adequacy of this testimony will later be fully discussed.
From the agent's testimony alone, there was ample evidence of a conspiracy among Weinberg, Gornish and Chilengarian to obtain and sell or pledge securities known to have been stolen and known to have been traveling in interstate commerce.
The only evidence regarding Grasso was that he was in the car with Gornish at the time Gornish was arrested outside of the bank immediately after the securities were delivered and that Grasso had travelled in the car with Gornish. There was no evidence that Grasso said or did anything, or that he was present during any of the several prior meetings. Although his presence in the car might give rise to reasonable suspicion, it clearly was insufficient to justify a conviction, and consequently the motion for judgment of acquittal at the close of the government's case was mandatory and was granted as to Grasso.
Concerning Kasparian and Blank, the question of the sufficiency of the evidence is much closer. Both men travelled to the bank with Chilengarian when the stock certificates were produced by Blank. Kasparian originally contacted Chilengarian about the possibility of Chilengarian's "going into a new car agency" through a contact of Kasparian's. Kasparian introduced Chilengarian to the informer. Kasparian telephoned to Chilengarian on a later occasion to tell Chilengarian that he had been asked to advise him that the final arrangements could not be made until the next week. Kasparian was present during the final drive to the bank and was present when the securities were transferred by Blank to Chilengarian and he looked at them. Although it was apparent from the testimony of Chilengarian that he was making a special effort to exculpate Kasparian from any responsibility, the numerous contacts that Kasparian had in the transaction which furthered the ...