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COMMONWEALTH PENNSYLVANIA v. AROL E. HOFFMAN (01/26/79)

decided: January 26, 1979.

COMMONWEALTH OF PENNSYLVANIA, APPELLEE,
v.
AROL E. HOFFMAN, APPELLANT



No. 1206 October Term, 1978, Appeal from the judgment of sentence by the Court of Common Pleas of Cumberland County, Criminal Division, No. 57 Criminal 1977.

COUNSEL

Taylor P. Andrews, Public Defender, Carlisle, submitted a brief for appellant.

Edgar B. Bayley, District Attorney, Camp Hill, for Com., appellee.

Price, Hester and Hoffman, JJ.

Author: Hester

[ 263 Pa. Super. Page 445]

Following a three-day trial by jury, appellant was found guilty of two counts of theft by failure to make the required disposition of funds received. 18 Pa.C.S. § 3927 and four counts of the sale of unregistered securities, 70 P.S. § 1-201. Post-verdict motions were filed and denied and appellant was sentenced to a term of 1 1/2 to 4 years in prison.

The facts underlying appellant's conviction are as follows:

Appellant organized a corporation in the early 1970's named "Browse-a-While Gift Shoppes, Inc." This enterprise had a unique feature. Instead of procuring capital through the sale of shares in the corporation, appellant devised a plan called an "Inventory Participation Plan" (IPP) whereby funds invested in the corporation would be used to directly purchase inventory. The investors instead of being shareholders and having some control in the operation of the corporation, would be considered only general creditors of the corporation. The registered prospectus (written by appellant) used to entice investors, promised that monies procured through IPP would be used to purchase only inventory and that the inventory on hand would always be equal in value to the total investment in IPP. The IPP guaranteed a minimum fixed return of 6% on the investment.

From 1972 to 1975, more than 100 investors bought shares in IPP and the total dollar amount invested exceeded $500,000.00. However, it seems that the company's losses kept pace with the investments; progressing from $7,000 in 1972 to $250,000 in 1975. Inevitably, bankruptcy resulted. The Receiver found that appellant kept no ledgers or books but instead used his checks to keep track of where the money was going. The Receiver also found evidence to indicate that large sums of invested money were directed to appellant's own use and, when things started going bad, appellant started to solicit additional funds by issuing promissory notes through the corporation. These notes, however, were never registered.

[ 263 Pa. Super. Page 446]

With the discovery of these seemingly improper actions, the receiver instituted criminal charges in late 1976 with the eventual aforementioned result. This appeal followed.

Appellant first asserts that it was error for the court to refuse to allow certain voir dire questions to prospective jurors.

The court refused to permit the following questions to be asked:

4. Has anybody ever served on a jury panel before and how many times for criminal cases in the past two years?

5A. Does anybody have preconceived ideas about bankruptcy?

6. Would anybody have trouble understanding evidence of co-mingling corporate and personal funds?

7. Would anybody feel so much sympathy for the Commonwealth's witnesses, who lost huge amounts of money, that they would be unable to ...


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