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UNITED STATES v. TROBACK

December 12, 1975

UNITED STATES OF AMERICA
v.
FRANK A. TROBACK



The opinion of the court was delivered by: DITTER

 Defendant, Frank Troback, was convicted by a jury of knowingly causing stolen securities to be transported in interstate commerce in violation of 18 U.S.C. ยง 2314. Since he admittedly caused the securities to move interstate, and since he admitted they had been stolen, the only issue at trial was his guilty knowledge. Challenging evidentiary rulings and my instructions to the jury, defendant has moved for judgment of acquittal, or in the alternative, for a new trial. For the reasons which follow, both motions will be denied.

 Viewed as it must be, in the light most favorable to the Government, see Glasser v. United States, 315 U.S. 60, 80, 62 S. Ct. 457, 469, 86 L. Ed. 680, reh. denied, 315 U.S. 827, 62 S. Ct. 629, 86 L. Ed. 1222 (1942); United States v. McClain, 469 F.2d 68, 69 (3d Cir. 1972), the evidence adduced at trial establishes that on March 11, 1968, the defendant, an attorney, began working as trust officer for the Midland Bank and Trust Company in Paramus, New Jersey. A month earlier the bank had purchased on behalf of one of its clients various municipal bonds in the amount of $50,000., taking deliveries of $30,000., $10,000., and $10,000., on February 19, 1968, March 20, 1968, and April 11, 1968, respectively. In May of the same year Midland moved to new offices and by March, 1969, it was apparent to the bank that these securities were missing. Meanwhile in February of 1969, the defendant had left the employment of the bank.

 The bonds next appeared in September, 1972, when defendant pledged them as collateral for a loan which he obtained at Bankers Trust, a Poughkeepsie, New York, bank, of which a personal friend was the president. In August, 1973, the defendant was able to pay back his loan in the New York bank by obtaining a loan at the Lancaster branch of the Farmers National Bank, Lititz, Pennsylvania. The defendant pledged the same securities as collateral for this loan, and instructed the New York bank to mail them to the Pennsylvania bank. In June, 1974, the defendant decided to cash the bonds, and instructed the bank in Lancaster to sell them. Once the securities were sent back to the original underwriters *fn1" it was discovered that they had been stolen. The Farmers Bank, upon notification of the status of the bonds, contacted the defendant in the hope that he might offer some explanation. The defendant was unable to do so, and the bank thereupon requested the FBI to investigate the matter.

 In August, 1974, Special Agent Patrick A. Philbin of the FBI interviewed Mr. Troback. Mr. Troback admitted that he had been the trust officer at the Paramus bank from which the bonds were stolen, said that he knew who had taken the bonds from the bank, but refused to reveal that person's identity. He also said that he could not be prosecuted because the five year federal statute of limitations had expired the prior year. He then related that the bonds were part of his mother-in-law's estate, although he did not explain the manner in which she came into their possession. Finally, he told Agent Philbin that he could not be prosecuted for having made a false statement to the FBI, which had investigated the theft of the bonds in 1969, because he had not been under oath on that occasion as required by a recent Supreme Court decision.

 At trial, defendant took the witness stand in his own behalf, and testified that he had worked at the Midland Bank and Trust Company, Paramus, New Jersey, from March 11, 1968, until February 28, 1969. He denied ever having seen the bonds in question or having them in his possession until a few days after his mother-in-law's death on February 15, 1971. According to Mr. Troback, he and Mrs. Troback went to the apartment where her mother had lived alone in order to make the necessary arrangements to clean it out. His wife found the bonds in a cabinet in that apartment.

 Mrs. Troback's mother, Margaret Shirk, had been a widow since 1958. Prior to her husband's death, she had spent many years in a mental hospital, and when he died her total assets were approximately $35,000. Thereafter, her only income was from a small veteran's pension and social security. Mrs. Shirk was not sophisticated in financial affairs, and had resisted Mr. Troback's suggestions that she purchase securities after her husband's death. She had had only two contacts with the Midland Bank and Trust Company. On one occasion, Mrs. Troback and her mother stopped to see Mr. Troback while they were on a shopping trip. The only other contact was when Lee Morrill, one of Mr. Troback's fellow employees, stopped at the Troback apartment when he and the defendant were on their way to a social event. Mr. Morrill talked with Mrs. Shirk for approximately 15 minutes and was surprised at how well she could converse in view of the fact that she was totally deaf.

 As previously stated, according to Mr. Troback, *fn2" these negotiable bonds were found in Mrs. Shirk's apartment after her death. In her safety deposit box, however, there were nonnegotiable shares of stock and some cash. Mrs. Troback became the administratrix of her mother's estate, applying for letters of administration on March 8, 1971, approximately three weeks after Mrs. Shirk died. Subsequent papers filed in connection with the estate made no reference to the stolen bonds or their value, and no inheritance tax was paid on them.

 Since Mr. Troback admitted that the bonds were stolen and that his various loan transactions and attempted sale had caused them to be transported from Pennsylvania to New York and from New York to Pennsylvania, the only real issue before the jury was whether or not he knew these securities were stolen at the time these events took place. By its verdict, the jury concluded that he did.

 Defendant's first contention is that certain testimony violated his constitutionally protected right to remain silent and was so prejudicial that a mistrial should have been granted despite cautionary instructions to the jury. The matter arose in this way: J. H. Geisenberger, Jr., Esquire, testified that he represented the Farmers' First National Bank, Lititz, the bank which at Mr. Troback's direction had sold the bonds. The bank's account was charged by its correspondent bank, however, when the bond coupons were presented to the underwriters for payment because the bonds had been replaced and the interest had already been paid. As a result, the possibility that the bonds had been stolen became known to the bank and Mr. Geisenberger, as the bank's solicitor, was asked to call defendant to discuss the matter with him. When he received this information, however, the defendant showed no concern and merely stated that his account should be charged and the coupons returned to him (N.T. 2-112-113).

 Under limited circumstances, the reaction of an accused to a statement which tends to incriminate him may be admitted in evidence to indicate consciousness of guilt. To constitute such proof, the evidence must disclose that (1) the statement was extra-judicial, (2) it was incriminatory or accusative in import, (3) it was one to which an innocent man in such circumstances would naturally respond, (4) it was uttered in the hearing of the accused, (5) he was capable of understanding the incriminatory meaning of the statement, (6) he had sufficient knowledge of the facts embraced in the statement to answer, and (7) he was at liberty to deny it or reply thereto. An application of this rule is found in United States v. Alker, 255 F.2d 851 (3d Cir. 1958), where defendant, an attorney, was charged with wilfully attempting to evade taxes on an estate of which he was executor. Evidence was offered to show that he had removed certain cash from the decedent's safety deposit box, commenting as he did so that there was $500. in each bundle of bills. One of the beneficiaries under the will who was present corrected him by saying, "No, $5000." The defendant made no reply. The Court of Appeals held that in these circumstances a very clear and strong inference of the defendant's assent could be drawn from his failure to challenge a substantial verbal correction of the amount being taken into his possession. It was therefore entirely proper to permit the jury to infer from his silence that he agreed that each package did in fact contain $5000.

 In the instant case, the defendant was faced with the possibility that assets worth approximately $50,000., which he had been using as his own for more than three years, might have been stolen and therefore might turn out to be of no value to him. He must have known that if these securities were in fact stolen he might be implicated in their theft and that in any event, his standing as a member of the bar might be jeopardized. Yet he indicated no surprise or dismay. He made no protest. He asked for no inquiry, and neither sought nor offered an explanation; all he said was, "Don't worry about it." From these circumstances, the jury would have been justified in inferring that he had some prior knowledge that the bonds were stolen and that ownership of them would eventually be challenged.

 To be sure that the jury would not conclude that this testimony imposed any burden upon the defendant in violation of his Fifth Amendment rights, I immediately gave the following instruction, "And I will also remind you of something that I told you initially, that a defendant is never required to do anything. He is not required to present any evidence. There is no burden resting on the defendant to prove anything." (N.T. 2-1/19).

 The defendant cites United States v. Smith, 500 F.2d 293 (6th Cir. 1974), in support of his position. *fn3" Such reliance is misplaced. In Smith, supra, the court held that closing argument by the prosecution which called on defendants, who had not testified, to explain the meaning of certain telephone calls was offensive to the spirit of the Fifth Amendment and violated the defendants' right to a fair trial. Here no such procedure was followed. There was no suggestion that the defendant had any duty to explain anything. The introduction of any evidence which tends to implicate a defendant may increase the pressure upon him to provide some answer. The massing of proof, however, is not regarded as a violation of the privilege against self-incrimination. Barnes v. United States, 412 U.S. 837, 846, 93 S. Ct. 2357, 2363, 37 L. Ed. 2d 380 (1973). In the instant case, the evidence of guilt was ...


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