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UNITED STATES v. ROBERTSON

December 4, 1959

UNITED STATES of America,
v.
Thomas E. ROBERTSON, American-Canadian Oil & Drilling Corporation, Thomas E. Robertson Company, Inc., Defendants



The opinion of the court was delivered by: HERLANDS

Novel questions involving the interpretation of the following two penal provisions of the Securities Act of 1933 (15 U.S.C.A. § 77e(a)(1) and § 77q(a)(1)) are raised by defendants' motion to dismiss various counts of a twenty-count indictment:

Section 77e(a)(1)

'(a) Unless a registration statement is in effect as to a security, it shall be unlawful for any person, directly or indirectly --

 '(1) to make use of any means or instruments of transportation or communication in interstate commerce or of the mails to sell * * * such security through the use or medium of any prospectus or otherwise; or * * *.'

 Section 77q(a)(1)

 'It shall be unlawful for any person in the offer or sale of any securities by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly --

 '(1) to employ any device, scheme, or artifice to defraud, or

 '(2) * * *.'

 The counts may be grouped and considered in terms of the four grounds of attack upon them.

 I.

 Counts 1 to 15

 The gist of each of these counts is that the defendants, in the offer and sale of a security, by use of the means and instruments of transportation and communication in interstate commerce and by the use of the mails, employed a device, scheme and artifice to defraud named investors. U.S.C.A. title 15, § 77q(a)(1). Defendants claim that these counts are 'vague and indefinite.'

 The attack embodied in this branch of defendants' motion is without force.

 Preliminary paragraphs 1, 7, 8, 9, 10, 11 and 12 of the indictment clearly indicate that the three defendants are charged jointly with the violations pleaded in counts 1 through 15.

 Moreover, Rule 7(c) of the Federal Rules of Criminal Procedure, 18 U.S.C.A. is satisfied. The wording of the indictment enables the defendants to understand the nature of the accusation, gives them the needed information to prepare their defense, and makes it possible for them to plead the judgment in bar of another other prosecution for the same offense occasion for doing so arise. United States v. Josephson, 2 Cir., 1947, 165 F.2d 82, 85, certiorari denied 1948, 333 U.S. 838, 68 S. Ct. 609, 92 L. Ed. 1122, rehearing denied 1948, 333 U.S. 858, 68 S. Ct. 731, 92 L. Ed. 1138, motion for leave to file a second petition for rehearing denied 1948, 335 U.S. 899, 69 S. Ct. 294, 93 L. Ed. 434; United States v. Miller, 2 Cir., 1957, 246 F.2d 486, 488, certiorari denied 1957, 355 U.S. 905, 78 S. Ct. 332, 2 L. Ed. 2d 261.

 II.

 Counts 9, 12 and 13

 Another attack on these three counts is that they do not state that the mailed letter was mailed to induce or bring about a sale; and that the indictment does not refer to the contents or substance of each of the letters so as to link them with any of the preliminary paragraphs 1 to 11 of the indictment.

 The attack embodied in this branch of defendants' motion is likewise without force.

 An indictment drawn substantially in the language of the statute, as is the indictment at bar, is amply sufficient, provided that it sets forth all the elements of the crime and its generality neither prejudices the defendants in the preparation of their defense nor endangers their constitutional guaranty against double jeopardy. United States v. Achtner, 2 Cir., 1944, 144 F.2d 49, 51. The defendants' argument is fallacious because, under section 77q(a)(1) it is not necessary for the indictment to plead that the mails were used to induce or bring about the sale, provided the indictment pleads that the defendants, while using the mails 'in the offer or sale of any securities,' employed a device, scheme or artifice to defraud. See United States v. Monjar, 3 Cir., 1944, 147 F.2d 916, 920-921 and cases there discussed, certiorari denied 1944, 325 U.S. 859, 65 S. Ct. 1191, 1192, 1193, 1194, 89 L. Ed. 1979.

 Furthermore, the contents of the letters involved in counts 9, 12 and 13 need not be set forth in the indictment itself. See Moffitt v. United States, 10 Cir., 1946, 154 F.2d 402, 405, certiorari denied 1946, 328 U.S. 853, 66 S. Ct. 1343, 90 L. Ed. 1625; Wilson v. United States, 2 Cir., 1921, 275 F. 307, ...


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