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United States v. Lamont

decided: October 28, 1977.

UNITED STATES OF AMERICA, APPELLEE,
v.
ANNE LAMONT, DEFENDANT-APPELLANT



After a three-week jury trial in the United States District Court for the Southern District of New York before Honorable Edmund L. Palmieri, United States District Judge, Lamont was convicted on seven counts involving fraud in violation of 18 U.S.C. §§ 1341, 1343 and 2314. Sentenced to pay fines totaling $7,000 and to payment of the cost of prosecution, and in addition to serve concurrent terms of imprisonment totaling three years, Lamont has brought this appeal.

Feinberg and Danaher, Circuit Judges,*fn* and Dooling, District Judge.*fn**

Author: Danaher

DANAHER, Senior Circuit Judge:

Basically, the indictment charged that Defendant had devised schemes and artifices to defraud and intended so to defraud, certain victims hereinafter named and from them, to obtain money by means of false and fraudulent pretenses and representations. The respective counts alleged the use of the mails and wire communications in furtherance of her operations in violation of 18 U.S.C. §§ 1341, 1343 and 2314.*fn1

During the course of a three-week jury trial, the Government presented its case through some twenty-three witnesses. Testimony developed that in the successful execution of her plans,*fn2 Defendant obtained from one John Barry of Toronto the sum of $60,000., and, from a West Virginia bank,*fn3 she further secured a total of $225,000. That she received such funds as stated has never been denied.

The Government argued that Defendant never intended to and never did repay the respective sums, so mulcted. Defendant chose not to testify.

Defense counsel through cross-examination and argument sought to inject an element of reasonable doubt and, particularly, to develop a lack of intent on her part in the execution of her plans. Thus, Defendant here has contended that if she "was acting in good faith at the time she obtained the money and at the time she caused the jurisdictional acts,*fn4 she was innocent of the crime charged."

We do not in this case have what Chief Justice Warren identified as the familiar pattern of the "confidence game."*fn5 Rather the jury here could have perceived this Defendant as a glib, sophisticated figure, trained in the financial world and knowledgeable in the techniques and routine of banking and investment practices, even on the international front. We need not at this point interpolate the details of the evidence underscoring such permissible conclusions. But we may turn back a century and a half and note the words of Mr. Justice Story in Wood v. United States, 41 U.S. (16 Peters) 342, 360-361, 10 L. Ed. 987 (1842):

The trial judge here alertly identified the core issue to be resolved by the jury. Taking account precisely of what he perceived to be the strategy*fn6 of Defendant's counsel, the judge instructed the jury:

The defendant in this case argues through her counsel by her plea of not guilty, by her arguments in the case and by the proof in the case that she acted in good faith. It is up to you to decide whether that is the case or not. And if you decide that the defendant did act in good faith throughout all these transactions, it is your duty to acquit the defendant on all counts.

A defendant has no burden to establish a defense of good faith, however. The burden is on the Government to prove fraudulent intent and consequent lack of good faith beyond a reasonable doubt.

However misleading or deceptive a plan may be, it is not fraudulent if it was devised and executed in good faith with an honest belief in the truth of the representations made. . . .

The jury returned a guilty verdict on seven of the eight counts set up in the indictment.*fn7 Unless it shall hereinafter appear that there was error affecting substantial rights of this Defendant, we will be bound to affirm her conviction. We so approach our consideration of the claims urged upon us.

"It is not for a reviewing court to weigh the evidence or to determine the credibility of witnesses. The verdict of the jury must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it. Glasser v. United States, 315 U.S. 60, 80, 86 L. Ed. 680, 62 S. Ct. 457 (1942). " See also United States v. Kahaner, 317 F.2d 459, 467-468 (CA2), cert. denied, 375 U.S. 836, 11 L. Ed. 2d 65, 84 S. Ct. 74 (1963).

We turn now to the background.

FACTUAL SUMMARY

A

Compendiously to be stated, the background here may first identify a professor and author, one John Stoessinger, who formerly had been Acting Director of Political Affairs at the United Nations and Director of the Institute of the United Nations at City University of New York. During a developing love affair between Stoessinger and Defendant, the latter convinced Stoessinger that because of her prior employment with RCA, she could and would arrange for RCA to distribute to its employees and clients some 400,000 copies of Stoessinger's book "Nations in Darkness." At Defendant's direction and largely reflecting her own dictation, Stoessinger signed and turned over to Defendant various letters of recommendation.

Prepared on the stationery of United Nations and City University, the letters depicted Defendant's international financing reputation. Such letters additionally "certified that Miss Anne Lamont has been a member of the Peace Research Unit of the Political Affairs Division of the United Nations. . . ." Moreover, it was thus represented that "Miss Lamont has already performed valuable services in this connection." In truth, Defendant had not performed any valuable services for the Peace Research Unit. Some of these letters were to play a part in advancing Defendant's plans.

It developed that over the period of Defendant's dealings hereinafter discussed, Stoessinger received from Defendant some $80,000., ostensibly as advances against the proceeds to be realized from the distribution of Stoessinger's book.

B

IN RE VICTIM JOHN BARRY

John Barry had acquired in Toronto, Canada, interests in Studio Center Ltd., hereinafter Studio, a facility for the production of motion pictures and television programs. To bolster the lagging finances of Studio and in an effort to secure current financing in the amount of $600,000., Barry enlisted the services of one Warren Rubel, an investment banker. The latter was already acquainted with Defendant.

Rubel and Defendant met in New York to discuss the Studio project. Defendant then assured Rubel that she saw no real problem and that she could easily provide*fn8 the desired financing with the chief difference that she set up a target, not of $600,000. but of $2,000,000. for Studio.

Defendant early in 1973 visited Studio Center in Toronto, toured the facilities, met with the Manager of the Bank of Montreal and gave assurances that there would be no serious difficulty in arranging the loan.

Shortly after her return to New York Defendant telephoned to Barry requesting him to come to New York. There she supplied details concerning Dr. Stoessinger and his status at the United Nations. She envisioned the latter as serving on Studio's board of directors and contemplated aloud that Studio could make films based upon numerous books which had been authored by Stoessinger. She presented Barry with two of the Stoessinger letters previously mentioned, written on stationery of United Nations and of City University. She told Barry that she had contacts with European banks, had arranged loans for foreign countries, and had millions of dollars in commissions due to her.

It just so happened that Barry joined Stoessinger and Defendant for a dinner evening during which discussion included the possibilities of Stoessinger's doing educational television from the Studio.

The following day after assuring Barry that the "financing was all arranged," Defendant made it clear that for a short period she would need the sum of $50,000. to be used in Europe to clear up financial barriers and that she would require $10,000. as a loan for herself. Not to be omitted, in the background, was her agreement to accept a commission of ten per cent of the finances to be made available to Studio.

So it was that Barry flew to Toronto, there obtaining through the Bank of Montreal a $60,000. draft made payable to himself.

When Barry returned to New York and met with Defendant, she suggested that she needed the funds at once in order to wire funds to Switzerland. She inspired Barry's phone call to Toronto to ascertain how the matter could be expedited. The Bank of Montreal sent a telex to its agency in New York to permit the $60,000. Canadian bank draft to be converted to a $60,000. check in United States currency. That check Defendant caused to be made payable to Operations Multi-National, a company owned by Defendant.

Lamont thereupon told Barry that with the financing so arranged "we are going to sign the papers in Europe," but no such financing had been arranged and Defendant had not wired funds to Europe.*fn9

When Barry and Defendant were about to fly to Europe, Stoessinger at the airport autographed for Barry four of his books. In due time Barry learned from Defendant herself that she had used the $50,000. portion for her own ends.

Barry lodged a complaint with the Postal Inspection Service. When interviewed by an inspector, Defendant told him that she was wiring $64,500. representing $60,000. plus interest. She sent a telex which falsely so stated. Neither Barry nor Studio received from Defendant any part of the $60,000.*fn10

C

IN RE VICTIM WEST VIRGINIA BANK

Another scheme with Lamont as principal ultimately involved a loss in excess of $225,000. suffered by First National Bank of South Charleston, South Charleston, West Virginia, herein West Virginia Bank.

Defendant at one time had worked on a certain project with one Snellen Johnson*fn11 who was Chairman of the Board of Navsat Systems, Inc., hereinafter Navsat. Johnson enlisted the aid of Defendant in obtaining financing for Navsat. Defendant told Johnson she had in mind some Swiss financiers who might be interested in financing Navsat but that they needed collateral. In due course, she induced Johnson to bring to her in Switzerland 200,000 shares of Navsat stock, represented by certificates numbers 894 and 895, each for 100,000 shares. No European financial arrangements were perfected.

Despite Johnson's repeated requests for the return of the Navsat certificates, Defendant retained possession of them, assuring Johnson that she was still working on other leads to secure the desired financing. In the course of the dealings with Johnson, it developed that West Virginia Bank might be interested in financing Navsat.

Defendant arranged a business visit with President George Martin of West Virginia Bank. She convinced Martin that she had a connection with United Nations and provided Martin with two of the letters of recommendation which she had procured from Dr. Stoessinger, supra. Martin required a financial statement from Defendant who then grossly had misrepresented that she had an income of $723,000. and that her net worth was in excess of $2,000,000.*fn12

Martin finally granted Defendant a personal loan of some $200,000. to be repaid in 120 days at eight per cent interest, but Martin required collateral. She had not brought the Navsat certificates to West Virginia but it was arranged that she would deposit those certificates with the West Virginia Bank's correspondent, Manufacturers Hanover Bank in New York. She did so, and thereupon, as authorized by Martin, received $154,000. in checks. The loan was not repaid when due, whereupon West Virginia Bank extended the original note for an additional 30 days, and permitted Defendant to borrow the further sum of $25,000.*fn13

Complete default having occurred when Defendant failed to repay the loans, West Virginia Bank brought suit, was awarded judgment against Defendant but West Virginia Bank failed to recoup the amount of the "loans" and thus was no worse off than Snellen Johnson or Navsat or one Timothy.*fn14

Defendant utilized the proceeds of the Bank's loans for her own purposes.*fn15 The West Virginia Bank filed a complaint with SEC which, dollar-wise, availed nothing.

CONTENTIONS HERE INVOLVED

1

Prior to trial the Government provided Jencks Act data to the defense. Also, however, the Government submitted to the trial judge pursuant to Rule 16 (d)(1), F.R.Crim.P., an application for an order that certain materials need not be disclosed. Notice was given to Defendant that the Government had so moved, but that notice gave no identification or disclosure of the materials so referenced. The trial judge considered the submission, ordered that the in camera, ex parte application be granted "in all respects," and then directed that the contents be sealed, and marked Court Exhibit 1. Defendant both before and during the trial had sought unsuccessfully to learn the nature and the contents of Court Exhibit 1.

Defendant here has suggested that Judge Palmieri "may well" have been influenced in his imposition of the "extremely harsh sentence" and in his conduct of the trial because of undisclosed documents comprising Court Exhibit 1. We are further told that if this court does not reverse the conviction, it should remand for re-sentencing before another judge. Defense counsel points out that the presentence report which was read by defense counsel prior to sentence was a report favorable to Lamont.

It "may well be", counsel speculates, that the judge had been influenced by the ex parte materials which had been presented in Court Exhibit 1.

Counsel cites United States v. Robin, 545 F.2d 775, 780-781 (CA2 1976), and United States v. Rosner, 485 F.2d 1213, 1229-1230 (CA2 1973), both clearly distinguishable from the situation here.

In Robin, defense counsel was permitted in chambers to see the presentence report but was not allowed to show it to the defendant. The defendant denied the damaging facts asserted in the report and in a separate letter which the United States Attorney had sent to defense counsel and the court. The defendant sought to offer evidence to support his denials. The court refused to consider such evidence and imposed a thirty year prison sentence. The Court of Appeals vacated the sentence because the veracity of the sentencing data had been seriously questioned, and the defendant has not been given adequate time to prepare, and a reasonable opportunity, to rebut the material submitted to the court.

In Rosner, similarly, the presentence report was supplemented by a prosecutor's memorandum detailing seventeen additional episodes of alleged misconduct not all of which, it was admitted, could be proved. The defendant asked for and was refused time to prepare to answer the charges, and the court sentenced at once on a basis that included consideration of the prosecutor's memorandum.

Here, defense counsel had read the presentence report and found it favorable to Defendant.

The trial judge here can not have failed to know that F.R.Crim.P. 32 (c)(3) requires that the presentence report be made available to the defendant or his attorney; and see Gregg v. United States, 394 U.S. 489, 492, 22 L. Ed. 2d 442, 89 S. Ct. 1134 (1969).

Court Exhibit 1 not only had been examined by the trial judge, but the materials therein contained had been and remained sealed pursuant to Rule 16 (d)(1). The judge had noted on the sealed container "Motion granted in all respects. So ordered."

We regard his conclusion as an exercise of his discretion in evaluating the possible usefulness of the contents of the Exhibit. Whether he viewed such contents as entirely collateral to this case, or immaterial to the issue of the guilt of ...


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