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UNITED STATES v. SPEED

June 14, 1948

UNITED STATES
v.
SPEED et al.



The opinion of the court was delivered by: HOLTZOFF

The defendants Joseph Speed, George Morgan, Faust Moreschi, Evans H. Hamilton and Isaac Weiner, were indicted, together with certain other persons, on a charge of conspiracy to embezzle funds of several component units of The International Hodcarriers Building and Common Laborers' Union. The case was severed in respect to the defendant Larry Kelly, because he disappeared and had not been apprehended. The prosecution abated against the defendant Matthias M. Kiesgen, in view of the fact that he died subsequently to the commencement of the proceeding. The indictment was dismissed by the Government in respect to the defendant Dorothy Kelly. The Court directed a judgment of acquittal in respect to three defendants on the basis of the opening address of Government counsel. A judgment of acquittal was directed in favor of another defendant at the close of the Government's case. The case as to the remaining five defendants above enumerated, was submitted to the jury, which brought in a verdict of guilty as to each of them. They now move for a new trial, or in the alternative for a judgment of acquittal notwithstanding the verdict.

The defendants, Speed, Morgan, Moreschi and Hamilton, occupied official positions in some of the labor organizations involved in this case. The defendant Larry Kelly, who, as stated above, has not been apprehended, was also an official of one of these labor unions and apparently occupied a position of influence and even control and domination.

 The uncontradicted evidence shows that the treasury of the labor organizations involved in this case was ruthlessly looted by Kelly with a brazen effrontry equaled only by his unparalleled knavery. As a result of crafty and cunning manipulation, large sums of money were withdrawn from time to time from the treasury of the unions and found their way into Kelly's bank account. Kelly purchased a home for himself, for which he paid, in large part, with money embezzled from these organizations. Considerable construction work was done on this house, as well as on the private homes of the defendants Morgan and Speed, and was charged to contracts for the erection of a Union Hall. The contractors were paid with union funds. Payments made to some of the defendants, purporting to cover travel or organization expenses, are claimed by the Government to have been flagrant misapplications of money. The most daring and bizarre of the many peculations was the expenditure of approximately $ 19,000 out of the treasury of one of the unions for the purchase of liquor, most of which was delivered to a night club owned and operated by Kelly. Other lesser defalcations need not be described. In a clumsy effort to conceal these depredations, pages were torn out of checkstub books and telltale cancelled checks were destroyed.

 Admittedly Kelly was the key figure in these misdeeds. Most of the misapplied funds went to him. The other defendants are charged with conspiring with him to carry these nefarious transactions into effect. It is also charged that in the course of the conspiracy, the defendants Morgan and Speed obtained pecuniary benefits from its operations, in that construction work on their homes was paid for with union funds. The indictment consists of one count setting forth a single conspiracy to commit the various criminal offenses, some of which have been just enumerated.

 The defendants contend that the indictment in fact charges and the evidence shows that there were a number of conspiracies and that, therefore, the conviction may not stand. If the indictment charges a single conspiracy and the proof shows several conspiracies, there is a variance. This variance, however, is not fatal unless the defendants have been prejudiced, Berger v. United States, 295 U.S. 78, 55 S. Ct. 629, 79 L. Ed. 1314; Kotteakos v. United States, 328 U.S. 750, 66 S. Ct. 1239, 90 LEd. 1557; Blumenthal v. United States, 332 U.S. 539, 68 S. Ct. 248. There are, therefore, two questions confronting the court on this aspect of the motions: first, whether the proof shows one or several conspiracies; and second, if the proof shows several conspiracies, whether the variance is prejudicial. In the light of the conclusion about to be reached, the second question vanishes. In endeavoring to reach a conclusion as to whether the evidence tends to show one or several conspiracies, it is desirable to revert to elementary principles.

 A conspiracy is a combination of two or more persons to accomplish a criminal purpose or purposes by concerted action. In other words, a conspiracy is a partnership in crime. It is created by an agreement to commit a crime or crimes. The existence of the agreement may be established by circumstantial evidence. It may be shown by evidence that the alleged conspirators were acting in concert in accordance with a common design, United States v. Kissel, 218 U.S. 601, 608, 31 S. Ct. 124, 54 L. Ed. 1168; Pinkerton v. United States, 328 U.S. 640, 644, 66 S. Ct. 1180, 90 L. Ed. 1489; Mendelson v. United States, 61 App.D.C. 127, 130, 58 F.2d 532; Chadwick v. United States, 6 Cir., 141 F. 225, 241; Craig v. United States, 9 Cir., 81 F.2d 816, 822. Various persons may become members of the conspiracy at different times and may play different roles in it. An individual member of the combination need not be aware of all of its ramifications or be cognizant of the number or identity of all of the other participants. If a person knows of its existence and intentionally takes some part in furthering it, he becomes a member of the conspiracy, Mendelson v. United States, supra; Allen v. United States, 7 Cir., 4 F.2d 688, 699. A conspiracy to commit a crime or crimes in separate and distinct from the substantive offenses. A conspiracy may have a number of objectives. 'The conspiracy constitutes the offense irrespective of the number or variety of objects which the conspiracy seeks to attain, or whether any of the ultimate objects be attained or not.' United States v. Manton, 2 Cir., 107 F.2d 834, 838.

 The answer to the question whether there is a single conspiracy, therefore, depends on whether there is a single agreement. There may be an undertaking to commit one crime or several crimes. If there is but one agreement, there is but one conspiracy. A test whether the activities of the defendants constitute a single conspiracy is whether there is a common purpose underlying the separate acts, whether the same objective is being pursued in each instance, and whether there is concerted action to achieve this end. It follows hence that the fact that the conspirators undertook to commit several crimes does not necessitate the conclusion that there are several conspiracies. A conspiracy, such as is charged in this case, may be likened to a wheel, with the hub constituting the central figure, the spokes forming its various branches and ramifications, and all being held together by the rim, which represents the agreement.

 Each case must, of course, be determined on the basis of its own facts. Nevertheless, considerable assistance may be derived from judicial decisions in respect to somewhat analogous situations. In united States v. Manton, 2 Cir., 107 F.2d 834, 838, certiorari denied 309 U.S. 664, 60 S. Ct. 590, 84 L. Ed. 1012, the defendants were convicted on a charge of conspiracy to obstruct the administration of justice and to defraud the United States. Specifically the accusation was that one of the defendants sought out litigants and parties interested in cases pending before the defendant Menton as a judge, and that the latter received sums of money in return for action taken in each of these cases without regard to the merits. pit was urged by the defendants that the indictment charged and the evidence tended to show a number of distinct conspiracies, rather than a single conspiracy. It was argued that the allegations in respect to each of the suits set forth a separate and distinct conspiracy. The court, in an opinion written by Mr. Justice Sutherland, sitting as a member of the Circuit Court of Appeals, overruled this contention, saying that it 'confuses the conspiracy, which was one, with its aims, which were many' 107 F.2d page 838. *fn1"

 In Lefco v. United States, 3 Cir., 74 F.2d 66, there was a conspiracy to commit a series of frauds. The specific frauds consisted of establishing fraudulent stores conducted in a fraudulent way, in various places. The court held that the jury was justified in finding that there was a single conspiracy.

 In United States v. O'Connell, 2 Cir., 165 F.2d 697, a railroad dining car steward was charged with conspiring with the chef and three waiters to collect money from passengers served with meals and convert it, instead of accounting for it to the railroad company. It was urged that the evidence did not establish a single conspiracy between all the defendants, but showed distinct conspiracies each composed of one of the waiters with the steward and the chef. The court held, however, that it was entirely reasonable for the jury to find the existence of a single conspiracy which embraced them all.

 The following cases hold to the same effect, Telman v. United States, 10 Cir., 67 F.2d 716; United States v. Beck, 7 Cir., 118 F.2d 178; Oliver v. United States, 10 Cir., 121 F.2d 245; Berenbeim v. United States, 10 Cir., 164 F.2d 679.

 In the instant case the indictment charges and the proof tends to show a single conspiracy to commit a number of criminal acts. There is a single agreement or a common design to perpetrate numerous embezzlements of funds from several branches of the international union. The fact that the embezzlements were to be committed from different units, instead of from one organization, does not detract from this conclusion. Conspiracies may assume different forms. There may be a single conspiracy to defraud A, and there may also be a single conspiracy to defraud A, B, C, D, and E. In view of the foregoing considerations, the objection that the Government has proved several conspiracies rather than a single conspiracy, is not well founded.

 In his capacity as an officer of one of the unions, the defendant Morgan facilitated Kelly in manipulating and embezzling its funds. Moreover, Morgan derived a pecuniary benefit from these reprehensible dealings, in that work done on his home was paid for by union funds. A similar benefit accrued to the defendant Speed. As to the defendant Hamilton, while he did not personally profit, the evidence tends to show that he cooperated with Kelly by making a fictitious entry in a minute book in an effort to lend an appearance of regularity to a gross fraud.

 It is urged that there is not sufficient evidence to show that the defendant Faust Moreschi was a member of the conspiracy. True, the evidence against him is not as strong as that against his co-defendants. Nevertheless, it appears that he signed two union checks, which were misapplied by Kelly. His explanation was that he had signed them in blank and did not know that they would be used for an improper purpose. It was for the jury, however, to determine whether to believe this explanation or to reject it. In view of the fact that Moreschi's credibility was considerably impeached and shaken on cross-examination, the jury had a right to discard his version of this affair. Another transaction involving Moreschi consisted of a payment by a union organization to him of the sum of $ 1,000 for expenses of attending a labor convention at Toronto. He admitted that a large part of this money was expended on entertainment in bar rooms and restaurants. He was also paid the sum of $ 500 for 'organization expenses'. He admitted that he used the money for a trip to Florida, but claimed that the ...


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