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COMMONWEALTH PENNSYLVANIA v. CHARLES W. OHLE AND RONALD J. JACKSON (12/14/83)

decided: December 14, 1983.

COMMONWEALTH OF PENNSYLVANIA, APPELLANT,
v.
CHARLES W. OHLE AND RONALD J. JACKSON, APPELLEES



No. 4 M.D. Appeal Docket 1982, Appeal from the Order of the Superior Court of Pennsylvania at Nos. 103 and 106 March Term, 1978, and No. 119 March Term, 1979, Reversing the Order of the Court of Common Pleas of Dauphin County, Criminal Division, Entered March 30, 1978, at Nos. 1171, 1173, 1174, 1179 C.D. 1975, 291 Pa. Superior Ct. 110, Roberts, C.j., and Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ. Roberts, C.j., and McDermott, J., concur in the result. Nix, J., did not participate in the consideration or decision of this case.

Author: Hutchinson

[ 503 Pa. Page 571]

OPINION OF THE COURT

The Commonwealth appeals by allowance Superior Court's orders reversing judgments of sentence Dauphin County Common Pleas imposed on appellees. Superior Court granted appellees a new trial after a jury convicted them of theft, and quashed additional indictments against appellee Ohle for bribery and conspiracy.*fn1 All these arose out of a kickback scheme involving Pennsylvania's former Secretary of Property and Supplies, Frank Hilton, who had the power to enter into insurance contracts on behalf of the

[ 503 Pa. Page 572]

Commonwealth. We vacate Superior Court's order and remand this record to it for further proceedings consistent with this opinion.

I

Appellees Charles W. Ohle and Ronald J. Jackson, officers of a New York insurance brokerage firm, were charged with three counts of theft by failure to make required disposition of funds to the insurance carrier which underwrote an auto fleet policy for the Commonwealth of Pennsylvania; bribery in official and political matters, and conspiracy to commit bribery in connection therewith. All these charges arose out of their participation in the Hilton kickback scheme.

In June of 1977, they were tried jointly on the theft charges and convicted. In November, 1977, a joint trial on the bribery and conspiracy charges began. Jackson became ill and a mistrial was declared as to these charges against him. See supra n. 1. Ohle's trial continued. He was convicted of both bribery and conspiracy.

On the theft charges the trial court sentenced Ohle and Jackson to pay a fine of $1,000 and the costs of prosecution, to make restitution of $304,500 each to the Commonwealth and to terms of three to five years imprisonment. Ohle was also sentenced to pay a fine and serve a term of one to two years, concurrent with the theft sentence on the conspiracy charge; for bribery he received a $500 fine and six months to one year in prison, concurrent with his sentences for theft and conspiracy. All sentences were under our former Penal Code.

Both Ohle and Jackson filed post-trial motions for new trials and in arrest of judgment. Dauphin County Common Pleas heard and denied them en banc. 100 Dauph. 95 (1978). They appealed to Superior Court. It reversed the theft convictions of both and remanded those cases for a new trial. It not only reversed Ohle's convictions for bribery and conspiracy, but also quashed the indictments on these charges. 291 Pa. Superior Ct. 110, 435 A.2d 592

[ 503 Pa. Page 573]

(1981). It determined he was improperly indicted under our present Crimes Code because elements of both crimes occurred before its effective date, and an "affirmative defense" to a charge of bribery, available under the Penal Code, was not available under the Crimes Code.*fn2

Superior Court held that the trial court had jurisdiction to hear the theft charges despite the fact that the inaction which Pennsylvania would consider a failure to make required disposition of funds occurred in New York. Nevertheless, it also held that Common Pleas erred in refusing appellees' requests to charge the jury on various aspects of New York insurance law and by failing to direct the jury to find appellees not guilty if their failure to remit to the insurance carrier was not illegal under New York civil law governing insurance brokers.

For the reasons which follow, we vacate these orders of Superior Court and remand to it for disposition of the remaining issues, consideration of which was unnecessary under the orders we now vacate.*fn3

II

The factual background of this case, while involved, is not in dispute. The thefts involved premiums of more than one million dollars for the Commonwealth's insurance policy

[ 503 Pa. Page 574]

    covering its automobile fleet. These were due the Reserve Insurance Company of Chicago, Illinois (Reserve), through Charles W. Ohle, Inc., a New York brokerage firm. Defendants were the principals of that broker. Ohle is a resident of New York and Jackson is a resident of New Jersey. On July 25, 1974 a Commonwealth premium check for $500,000.00 payable to Market Facilities, Inc., a subsidiary of Reserve, and Charles W. Ohle, Inc., the broker, was delivered to the latter. On August 5, 1974 a second check for $300,000.00 payable to the same Reserve subsidiary and Charles W. Ohle, Inc. was also delivered to it. Finally, on September 26, 1974 a check for $215,000.00 payable to the same payees was also delivered to Charles W. Ohle, Inc.

Defendants caused these payments to be deposited in the brokerage firm's account without the other payee's endorsement.*fn4 Then, through their control of the brokerage account, they withheld more than $600,000 admittedly due Reserve. The issue of whether the withheld funds are due Reserve was the subject of Reserve's civil action against the Commonwealth. The outcome of that action is not shown on this record.

After the theft charges were filed, our Department of Justice brought additional charges of bribery and conspiracy against defendants. These were the subject of the second trial. The testimony produced showed that from February, 1973 through September, 1974 defendants made kickback payments totaling approximately $176,000.00 to Frank Hilton and Anthony Trucco. Hilton was then Secretary of Property and Supplies for the Commonwealth of Pennsylvania. Trucco was the Director of that Department's Insurance Division. The kickbacks were in consideration of Hilton's appointment of Charles W. Ohle, Inc. as broker for the automobile fleet insurance policy.

The discussions which led to Hilton's appointment of defendants' New York corporation as broker in consideration

[ 503 Pa. Page 575]

    of their kickback agreement began in February, 1973, before the effective date of our Crimes Code, see supra at n. 2, when co-conspirator Trucco met with defendant Ohle in New York City. At that time the crimes of bribery and conspiracy were governed by the Penal Code. Nevertheless, the indictments used the language of the Crimes Code in making these charges. The complaint, however, had alternatively cited both the Penal Code and Crimes Code sections.

III

Superior Court correctly held defendants indictment for the theft offense fell under the Crimes Code, rather than the Penal Code, and that Dauphin County Common Pleas had jurisdiction to hear the case.*fn5 However, Superior Court erred in reversing appellees' convictions and remanding for a new trial. Superior Court held the trial court erred in refusing to charge the jury on the New York civil law of insurance. Superior Court would have directed the jury to

[ 503 Pa. Page 576]

    find appellees not guilty if it found New York civil law treated payment to the broker as payment to the insurance company.*fn6

The issue of whether payment to a faithless agent is the same as payment to his principal, relevant in a civil action between the principal and a third party, is irrelevant to the determination of whether that faithless agent acted criminally in withholding funds due his principal. In finding this issue determinative of the Commonwealth's jurisdiction, Superior Court incorrectly separated the issue of jurisdiction from those "choice of law influencing considerations beyond due process" which some commentators believe should influence the question of jurisdiction in criminal cases.*fn7

Both the Superior Court opinion and appellees' brief refer to this issue as a jurisdiction-related fact question. They then proceed, however, to treat it as a separate conflict of ...


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