Parr v. United StatesAnnotate this Case
363 U.S. 370 (1960)
U.S. Supreme Court
Parr v. United States, 363 U.S. 370 (1960)
Parr v. United States
Argued April 28, 1960
Decided June 13, 1960
363 U.S. 370
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
Petitioners were indicted on 20 counts in a Federal District Court for using the mails to defraud, in violation of 18 U.S.C. § 1341, and conspiring to do so, in violation of 18 U.S.C. § 371. The indictment charged that together they controlled a School District and its depository bank, the assessment and collection of school taxes, and the expenditure of school funds, and that they entered into and carried out a scheme to defraud the School District, the State, and the taxpayers of each by misappropriating and embezzling funds and property of the School District. The specific offense charged in each of the first 19 counts was that, for the purpose of executing the scheme, petitioners caused a particular letter, check, tax statement, tax receipt, or invoice to be placed in, or received from, an authorized depository for United States mail. Count 20 charged that petitioners conspired to commit the offense set out in the first count and committed specific overt acts to that end. They were convicted, and the convictions were sustained by the Court of Appeals.
Held: although the indictment charged, and the evidence tended to show, that petitioners devised and practiced a scheme to defraud the School District by misappropriating and embezzling its money and property, neither the indictment nor the evidence supports the judgments, because the indictment did not charge, and the evidence did not show, any use of the mails "for the purpose of executing such scheme," within the meaning of 18 U.S.C. § 1341.
Pp. 363 U. S. 371-394.
(a) The indictment did not expressly or impliedly charge, and there was no evidence tending to show, that the taxes assessed were excessive, "padded" or in any way illegal; nor did the Court submit any such issue to the jury. Pp. 363 U. S. 385-388.
(b) In the light of the particular circumstances of this case, and especially of the facts that (1) the School Board was legally required to collect and assess taxes, (2) the indictment did not charge, nor the proofs show, that the taxes assessed and collected were excessive, "padded" or in any way unlawful, (3) no such issue was submitted to, or determined by, the jury, (4) the Board was compelled by state law to collect and receipt for the taxes, and
(5) it was legally compelled to use the mails in doing so, it must be concluded that the legally compelled mailings complained of in the first 16 counts of the indictment were not shown to have been made "for the purpose of executing such scheme,"within the meaning of § 1341. Pp. 363 U. S. 388-391.
(c) On the record in this case, it cannot be said that the mailings complained of in the first 16 counts of the indictment constituted false pretenses and misrepresentations to obtain money. Pp. 363 U. S. 391-392.
(d) As to the charges in Counts 17, 18, and 19 that two of the petitioners fraudulently obtained gasoline and other filling station products and services for themselves upon the credit card and at the expense of the School District, knowing that the oil company would use the mails in billing the School District for these things, it cannot be said that the mailings in question were "for the purpose of executing" the scheme to defraud, since the scheme had reached fruition when these two petitioners received the goods and services complained of and before the mailings occurred. Pp. 363 U. S. 392-393.
(e) Inasmuch as Count 20 charged petitioners with conspiring to commit the offense complained of in Count 1, and inasmuch as, on this record, that count cannot be sustained, it follows that petitioners' convictions upon Count 20 cannot stand. P. 363 U. S. 393.
265 F.2d 894, reversed.
MR. JUSTICE WHITTAKER delivered the opinion of the Court.
Petitioners, nine individuals and two state banking corporations, [Footnote 1] were indicted in 20 counts in the United
States District Court for the Southern District of Texas, Houston Division, for mail fraud and conspiracy to commit mail fraud. The first 19 counts charged that petitioners devised, prior to September 1, 1949, and continued to February 20, 1954, a scheme to defraud the Benavides Independent School District ("District") of Duval County, Texas, the State of Texas, and the taxpayers of each, and that they used the mails for the purpose of executing the scheme, in violation of 18 U.S.C. § 1341. [Footnote 2] The twentieth count charged that petitioners conspired to commit the substantive offense charged in the first count, in violation of 18 U.S.C. § 371. [Footnote 3]
After their various motions, including one challenging venue and asking transfer of the action to the Corpus Christi Division of the court, and one for a bill of particulars, were denied, petitioners entered pleas of "not guilty" and in due course the case was put to trial before a jury. The jury returned verdicts finding petitioners
guilty as charged -- some of them on all counts and others on only some of the counts. After denying timely motions in arrest of judgment and for a new trial, the court entered judgments upon the verdicts, convicting petitioners and sentencing them to imprisonment. [Footnote 4] On appeal, the judgments were affirmed, 265 F.2d 894, and, to determine questions of importance relative to the scope and proper application of § 1341, we granted certiorari. 361 U.S. 912.
Petitioners' principal contentions here are: (1) that, although the indictment charged and the evidence tended to show that petitioners devised and practiced a scheme to defraud the District by the local or state crimes of misappropriating and embezzling its money and property, neither the indictment nor the proofs support the judgments, because the indictment did not charge, and the proofs did not show, any use of the mails "for the purpose
of executing such scheme" within the meaning of that phrase as used in § 1341, and (2) that the court's charge did not submit to the jury any theory or issue of fact that could constitute use of the mails "for the purpose of executing such scheme." The nature of these contentions requires a detailed examination of the indictment, the evidence adduced, and of the issues of fact actually tried and submitted to the jury, for its resolution, by the court in its charge.
We turn first to the indictment. Summarized as briefly as fair statement permits, the first count alleged that the District is a public corporation organized under the laws of Texas to acquire and hold the facilities necessary for, and to operate, the public schools within the District, [Footnote 5] and, for those purposes, to assess and collect taxes; that the laws of Texas vest exclusive control of the property and management of the affairs of the District in its Board of Trustees, consisting of seven members; that, prior to September 1, 1949, petitioners devised, and continued to February 20, 1954, a scheme to defraud the District, the State of Texas, and the taxpayers of each, and to obtain their money and property for themselves and their relatives.
It then alleged that, as part of the scheme, petitioners would falsely represent that district checks were issued, and its funds disbursed, only to persons and concerns for services rendered and materials furnished to the District, and that its Annual Reports to the State Commissioner of Education were correct.
It next alleged that, as a further part of the scheme, seven of the petitioners would establish and maintain
domination and control of the District; [Footnote 6] that three of them would acquire and maintain control of petitioner, the Texas State Bank of Alice, which was the authorized depository of the District's funds, [Footnote 7] and that one of them would acquire and maintain control of petitioner, the San Diego State Bank. [Footnote 8]
It then alleged that it was a further part of the scheme that petitioners would sent or cause to be sent letters, tax statements, checks in payment of taxes, and receipted tax statements through the United States mails; that the checks and moneys received by the District from taxpayers and others would be deposited to the credit of the District in the authorized depository bank, against which petitioners would issue district checks payable to fictitious persons, and to existing persons, without consideration (falsifying the District's records to show that such checks were issued in payment for services or materials), and would cash such checks, upon forged endorsements or without endorsements of the payees at the depository bank and convert the proceeds; that they would open accounts and deposit checks received in payment of taxes in unauthorized banks, and that petitioner Chapa would withdraw and convert the funds; that they would convert and cash checks received by the District in payment of taxes and keep the proceeds; that they would obtain merchandise for themselves on the credit and at the expense of the District; that they would prepare, and the Board of Trustees would approve, false Annual Reports of the District and mail them to the State Commissioner of
Education at Austin, Texas; that they would conceal their fraudulent misuse of district funds by destroying canceled checks, bank statements and other records of the District and the microfilmed records of the petitioner banks showing the fraudulent checks drawn against and paid out of the District's accounts.
The last paragraph of the count -- the only paragraph purporting to charge an offense -- charged that petitioners, on September 29, 1952, for the purpose of executing the scheme, caused to be taken from the post office, in the Houston Division of the court, a letter addressed to Humble Oil & Refining Company, Houston, Texas. [Footnote 9]
Each of Counts 2 through 19 adopted by reference all allegations of the first count, except those contained in the last paragraph of that count which charged a specific offense against petitioners, and then proceeded to allege that, on a stated date, the petitioners, for the purpose of executing the scheme, "caused" a particular letter, tax statement, check, tax receipt, or invoice to be placed in or taken from an authorized depository for United States mail in the Houston Division of the court. [Footnote 10] Doubtless
the charge in each of these counts was so limited, in the light of Rule 18 of Federal Rules of Criminal Procedure, fixing venue over crimes in the District and division where
committed, [Footnote 11] in order to give the Houston Division venue over this action, and consequently the indictment does not count upon petitioners' full uses of the mails, for they were principally made in Duval County in the Corpus Christi Division of the court.
The twentieth count charged that, throughout the relevant period, petitioners feloniously conspired and agreed among themselves and with others to commit "the offenses . . . which are fully described and set out in the first count of this indictment," and that, to effect the object of the conspiracy, petitioners committed specified overt acts. [Footnote 12]
We now look to the evidence. Condensed to pith, the 6,000 pages of evidence disclose that the District, acting through its Board of Trustees of seven members, operated the public schools in the towns of Benavides and Freer, each having slightly more than 1,000 pupils. From time to time, the Board met to appoint (a) an assessor-collector, (b) an independent firm of engineers and accountants to assist the assessor-collector in determining the ownership and valuation of property -- particularly mineral lands and complex fractional interests therein -- in the District, (c) a Board of Equalization, and (d) a depository of the District's funds, and also met (e) to consider and propose to the electorate the authorization and sale of bonds in 1949 ($265,000) and in 1950 ($362,500) to finance the construction of new school facilities.
In actual operations, the engineering-accounting firm would annually prepare and submit to the assessor-collector a list showing the ownership and its appraisal of the value of the various properties and mineral interests in the District, from which, after the Board of Equalization and completed its work thereon (in June and July), the assessor-collector would prepare the tax rolls for the current year, and therefrom prepare and send out the tax statements by mail, and, on receipt of checks in payment of taxes (the great majority of which were received in the mails), would -- with exceptions later noted -- deposit them to the credit of the District in the depository bank, and then mail receipts to the taxpayers.
Three members of the Board resided in Freer, and the other four resided in Benavides. Aside from the meetings
for the purposes above stated, the Trustees rarely met as a board. Each group, rather, independently operated the schools in its town, and the actual costs of operation were about the same in each town. [Footnote 13] But the Benavides members handled generally the day-to-day business of the District, including the staffing and operation of its office, the keeping of its books and records, the making of its contracts, its relations with the assessor-collector, the Annual Report to the State Commissioner of Education (to obtain from the State the amount per pupil prescribed to be paid to such school districts by the Texas law), and the routine disbursement of its funds.
Petitioners Saenz, Garza, and Garcia were three of the four Benavides members of the Board. Petitioners Oscar Carrillo, Sr., and O. P. Carrillo were, respectively, the secretary of and the attorney for the Board. Petitioner Chapa was the assessor-collector. Petitioner Parr was the president and principal stockholder of petitioner Texas State Bank -- the authorized depository of the District's funds -- and of petitioner San Diego State Bank, and there was evidence that, although having no official connection with the District, he practically dominated and controlled its affairs, kept its books and records in his office, outside the District, until July 1951, and countersigned all its checks after June 1950. Petitioner Donald was the cashier and administrative manager of the Texas
State Bank, and petitioner Oliveira was a director of that bank.
There was evidence that, throughout the relevant period, the District's funds, in large amounts, were misappropriated, converted, embezzled, and stolen by petitioners. It tended to show that four devices were used for such purposes:
(1) At least once each month, numerous district checks were issued against both its building and maintenance accounts in the depository bank payable to fictitious persons, and were presented in bundles, totaling from $3,000 to $12,000, to the depository bank, and, under the supervision of petitioner Donald, were cashed by it, without endorsements, and the currency was placed and sealed in an envelope and handed to the presenting person for delivery to petitioner Parr. The evidence tended to show that no less than $120,000 of the District's funds were misappropriated in this way. However, no one of these acts is charged as an offense by the indictment.
(2) At least once each month, large numbers of district checks were issued to petitioners, other than Donald and the two banks, often in assumed names or in the names of members of their families, purporting to be in payment for services rendered or materials furnished to the District, but which were not rendered or furnished, which checks were presented to the depository bank and, under the supervision of petitioner Donald, were cashed by it, often without or upon forged endorsements. [Footnote 14] The
evidence tended to show that no less than $65,000 of the District's funds were misappropriated in this way. But again, no one of these acts is charged as an offense by the indictment.
(3) Petitioner Chapa converted district checks received by mail in payment of taxes, cashed the same -- some at a local bank and some at the depository bank -- upon unauthorized endorsements, and misappropriated the proceeds. [Footnote 15]
(4) Petitioners Oscar Carrillo, Sr., and Garza obtained gasoline and oil for themselves upon the credit card and at the expense of the District. [Footnote 16] Use of the mails by "causing" the oil company to place its invoices for these goods in the mails and to take the District's check in payment from the mails in Houston, constitutes the basis of Counts 17, 18 and 19 of the indictment. [Footnote 17]
The letters, checks, and invoices which Counts 1 through 19 of the indictment charge were "caused" by petitioners to be placed in or taken from the mails in Houston, were all offered and received in evidence. Having fully stated the substance of them in notes 9 and
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