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United States v. Moss

decided: September 6, 1977.

UNITED STATES OF AMERICA, APPELLEE,
v.
GEORGE MOSS AND AMERICAN IDENTIFICATION PRODUCTS, DEFENDANTS-APPELLANTS



Appeal from judgments of conviction entered in the United States District Court for the Eastern District of New York (Hon. Thomas C. Platt), on twelve counts of bankruptcy fraud under 18 U.S.C. § 152, and on one count of conspiracy to violate that section. Conviction on Count Three reversed; judgments of conviction on other counts affirmed, and sentences of fines remanded.

Mulligan, Gurfein and Van Graafeiland, Circuit Judges.

Author: Gurfein

GURFEIN, Circuit Judge:

This is an appeal from judgments of conviction entered upon a jury verdict in the United States District Court for the Eastern District of New York (Platt, J.). Appellant George Moss was convicted on eleven substantive counts of bankruptcy fraud under 18 U.S.C. § 152, and on one count of conspiracy to violate that section. Moss was sentenced on each count to two years imprisonment, with eighteen months suspended (all twelve counts to run concurrently), and to a fine of $1,000 on each count, amounting to a total fine of $12,000. Appellant American Identification Products was convicted on one count of fraudulently receiving property from a bankrupt under 18 U.S.C. § 152 and was sentenced to a fine of $5,000. The bankruptcy petition on behalf of Stafford Manufacturing Co. was filed and Stafford was declared a debtor-in-possession on August 10, 1970. Stafford was adjudicated a bankrupt and a Trustee was appointed on August 10, 1972.

In Counts One and Three of the Indictment, Moss was charged with fraudulently concealing various items of property of Stafford, of which he was president, in contemplation of bankruptcy. Counts Two and Four charged that he fraudulently concealed these same items of property from the Trustee in bankruptcy and the creditors after Stafford was adjudicated a bankrupt. Counts Five and Six also charged concealment of the same item of property before bankruptcy and from the Trustee, respectively. Count Five was subsequently dismissed on the Government's motion. Counts Seven, Eight, Nine and Ten alleged that Moss also fraudulently concealed additional items of property from the Trustee and creditors. In Counts Eleven and Twelve, Moss was charged with fraudulently withholding from the Trustee documents relating to the property which was the subject of Counts One, Two, Three and Four. Moss was convicted on all of these counts.*fn1

In Count Fourteen, Moss was charged with conspiring with co-defendant Arnold Rubin and others unknown, to commit offenses in violation of 18 U.S.C. § 152. Although Rubin was acquitted on this count, Moss was convicted. Defendant American Identification Products was convicted on Count Thirteen, charging it was fraudulently receiving property from a bankrupt.

Appellant George Moss urges three grounds for reversal. First, that there was insufficient evidence to support the jury verdicts on Counts One, Three, Six, Seven, Eight, Ten, Eleven, Twelve and Fourteen. Second, that the convictions on the substantive counts were multiplicitous. Third, that the use in cross-examination at trial of Moss' prior immunized testimony before the bankruptcy court, was improper and requires reversal.

I

We deal first with Moss' contention that the convictions are multiplicitous.*fn2 Moss' position on this issue has three facets. First, he urges that Counts One and Three, which charge concealment of certain property in contemplation of bankruptcy, merge respectively into Counts Two and Four, which charge the actual concealment of the same property from the Trustee and the creditors. The Government concedes that the offense of concealment in contemplation of bankruptcy merges with the offense of concealing assets after the bankruptcy petition has been filed, much as an attempt to commit a substantive crime merges upon conviction of the substantive offense. The Government specifically concedes that the conviction on Count One merges with the conviction on Count Two, and that the conviction on Count Three merges with the conviction on Count Four, so far as imposition of sentence is concerned.

Appellant also contends that Counts Eleven and Twelve, which charge Moss with concealing the registration papers relating to two motor vehicles, also merge with Counts Two and Four, which allege the fraudulent concealment of those vehicles themselves. The Government specifically concedes this point as well, noting that concealment of the documents was simply part of the means by which the offense of fraudulent concealment was accomplished. Cf. United States v. White, 417 F.2d 89, 93 (2d Cir. 1969).

The Government does not similarly accept Moss' broader merger argument, however, that as a matter of statutory construction, the various charges alleged in the indictment constitute only a single bankruptcy fraud under 18 U.S.C. § 152, and hence that conviction was proper only on one count. Relying on Edwards v. United States, 265 F.2d 302 (9th Cir. 1959), Moss maintains that concealment of a number of different pieces of property constitutes only one offense. We have no difficulty with the Edwards decision nor, in the context of that case, with the legal principle which Moss draws from it. We disagree, however, with Moss' contention that Edwards is applicable to this case.

In Edwards, the defendant was charged in eight separate counts with the fraudulent concealment of eight items of property before the filing of the bankruptcy petition. The Ninth Circuit therefore reasoned that:

"The gist of the offense charged in each of the eight counts . . . . is the failure . . . . to reveal or disclose on or after [the filing of the petition], property belonging to the bankrupt . . . . Surely, if an accused should conceal a dining room set, a china set, or one thousand silver dollars belonging to the estate of the bankrupt, his offense of failure to reveal or disclose would not be multiplied by the number of separate items concealed. The fact that several different items of property belonging to the estate of a bankrupt were concealed does not multiply the number of offenses, even though the concealment of any one of the items standing alone would constitute the offense denounced by the statute. The offense . . . . does not arise until there is a duty to reveal or disclose . . . ."

265 F.2d at 306.

It is true that when the concealment of several items of property precedes the filing of the bankruptcy petition, the duty to disclose the transfers to the receiver or trustee is a single duty to reveal all. When the concealment of assets belonging to the bankrupt occurs after a receiver or trustee has been appointed, however, each separate act of concealment is a separate violation of the statute. United States v. Kaldenberg, 429 F.2d 161 (9th Cir. 1970), cert. denied, 400 U.S. 929, 27 L. Ed. 2d 189, 91 S. Ct. 195 (1970). In each such instance there is a separate act, taken at a discrete time, accompanied by the requisite intent. Any other rule would permit a defendant who has committed a first concealment to steal more on the theory that he would never become a sheep but always remain a lamb. It is not in the interest of deterrence to permit a multiplication of criminal acts to be treated as a bonus for the criminal actor free from additional penalty.

Counts Eight, Nine and Ten involved the conversion of checks received on three separate occasions after the bankruptcy proceeding had begun. These counts are clearly not multiplicitous. Counts Two and Four involved the execution of fraudulent affidavits of sale on December 6, 1972 (as well as the initial physical concealment of a GMC truck, and a Chevelle station wagon). Count Six charged the concealment from the Trustee of a Clark fork-lift type truck. Count Seven involved the illegal transfer of three Benchmaster presses at the time of an auction sale of Stafford's inventory in September, 1972 (as well as certain acts of concealment prior to the filing of the petition).

The foregoing analysis reveals that, although Counts One, Three, Eleven and Twelve were duplicative, separate convictions were permissible on Counts Two, Four, Six, Seven, Eight, Nine and Ten.

He was not prejudiced by the imposition of concurrent sentences of two years' imprisonment (eighteen months suspended), since conviction on a single count could support a sentence of five years' imprisonment. United States v. Wilson, 535 F.2d 521, 523 (9th Cir. 1976) (J. Joseph Smith, Circuit Judge); United States v. Smith, 532 F.2d 158, 160 (10th Cir. 1976); Benton v. Maryland, 395 U.S. 784, 791, 23 L. Ed. 2d 707, 89 S. Ct. 2056 (1969); United States v. Hines, 256 F.2d 561, 562-63 (2d Cir. 1958). Appellant argues that he may have been prejudiced in sentencing because he stood convicted of twelve substantive counts rather than six. We disagree. The district judge, well aware of the related nature of the substantive counts, directed that the twelve terms of imprisonment be served concurrently, indicating that he was considering the defendant in relation to the entire scene. Moreover, the sentence imposed was far more lenient than the maximum sentence that he could have imposed on a single count.

II

Appellant Moss attacks the sufficiency of the evidence on Counts One, Three, Six, Seven, Eight, Ten, Eleven, Twelve, and Fourteen, the conspiracy count. Our disposition of the multiplicity issue, and the concurrent sentence doctrine, makes it unnecessary to consider this claim with regard to Counts One, Three, Eleven and Twelve. A review of the remaining counts reveals that the evidence was sufficient.

Count Six charged the concealment from the Trustee of a Clark fork-lift type truck. Witness Seifer, a former employee of Stafford, testified that the fork-lift had been hidden by Moss and locked in a separate room and that the room had affixed to it a sign which read "Galgan Realty," giving the appearance that it was a place of business distinct from Stafford. The ...


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