Elements of offense. strength of false representations made through the mails. In support of an indictment under the statute, there first must appear a scheme devised to obtain money or property on false representations. The scheme must be carried out or attempt must be made to carry it out, by the use of the mails, as by placing a letter in post office or post box, to be sent or delivered by such post office. The misuse of the mails is the gist of the offense, although the scheme to defraud must first be established. The scheme need not include the use of the mails. It is sufficient if the mails were actually used for the purpose of conveying a false financial statement, even though no thought of the mails entered into the scheme when the false financial statement was prepared. § 100. Elements of offense. The word "scheme" used in the sense of the statute, "is the formation of a plan, device, or trick to perpetrate a fraud on another." The elements which must be shown in the proof of a case based on this statute are first, a plan to defraud, second, the fraud attempted or actually perpetrated, and third, the use of the mails in perpetrating the fraud or in attempting to perpetrate it. Fraud in this connection means a wrongful purpose to injure another. 6. Ex parte King, 200 Fed. 622; U. S. vs. Goldman, 207 Fed. 1002. 7. U. S. vs. Dexter, 154 Fed. 890. 8. Bettman vs. U. S., (C. C. A., 6th Cir.), 224 Fed. 819, 140 C. C. A. 265. Mailing false financial statement forbidden. § 101. Mailing a false financial statement for the purpose of obtaining goods on credit on the strength thereof, held to be a scheme or artifice under the "fraudulent use of the mails' act. In Bettman vs. U. S. (C. C. A. 6th Cir.) 224 Fed. 819, 140 C. C. A. 265, the court construed the federal statute as follows: "Defendant's contention, broadly stated, seems to be that the statute does not apply to the act of one engaged generally in a legitimate business otherwise legitimately conducted, but who for the purpose of obtaining money, property, or financial credit makes a knowingly false statement of his financial condition, either in a single instance or in a series of similar instances, not joined together, but independent of each other, but is confined to broader and more comprehensive frauds, such as the case of a business systematically and designedly so conducted generally that through false representations persons are induced to part with their money or property in the belief that they are getting something different from or better and worth more than what is actually being furnished, and especially to so-called 'confidence games' and swindling devices, whereby the mails are resorted to for deceiving the ignorant and credulous generally, by appeals to passion for gain by an untruthful and seductive setting forth of the advantage and attractiveness of the scheme exploited. It is urged that a clear distinction exists between 'intent to defraud' and the formation of a 'scheme or artifice to defraud'; in Mailing false financial statement forbidden. other words, that the statute does not apply to the ordinary case of actual or attempted obtaining of money or property, by false or fraudulent pretenses and representations, even though the post office department of the United States is employed in the execution of such fraudulent design. We think the language and history of the statute, and the interpretation generally given it by the courts, forbid the narrow construction contended for. Since the adoption of the Criminal Code, the United States Circuit Court of Appeals for the Second Circuit has held that the use of the mails for the transmission of a false financial statement to commercial agencies, with the intent that it should be used as a basis for the purpose of obtaining goods on credit to which defendant was not entitled, is a 'scheme or artifice' within Section 215 of the Criminal Code. Scheinberg vs. U. S. (C. C. A. 2nd Cir. 1914), 213 Fed. 757, 130 C. C. A. 271, Ann. Cas. 1914 D 1258. This decision is directly in point and is persuasive. We are asked to reject the Scheinberg case upon the authority of Etheredge vs. U. S. (C. C. A. 5th Cir. 1911), 186 Fed. 434, 108 C. C. A. 356, in which a construction is put upon Section 5480 inconsistent with the construction of Section 215 of the Code adopted in the Scheinberg case. We are not satisfied to follow the Etheredge case, because we think some of the views there expressed are out of harmony with some of the decisions of this court (notably the Horman case, already cited), and because the case is opposed to the holding of the Circuit Court of Appeals for the Third Circuit in Culp vs. U. S. (1897), Mailing false financial statement forbidden. 82 Fed. 990, 55 U. S. App. 42, 27 C. C. A. 294 (cited with approval by this court in Milby vs. U. S. [C. C. A. 6th Cir. 1901], 109 Fed. 638, 642, 48 C. C. A. 574), and with the decision of the Circuit Court of Appeals for the 4th Circuit in Charles vs. U. S. (C. C. A. 4th Cir. 1914), 213 Fed. 707, 712; 130 C. C. A. 221, Ann. Cas. 1914 D 1251, decided since the adoption of the Criminal Code. It is, moreover, to be noted that the learned judge who wrote the opinion in the Etheredge case expressly refrained from deciding whether the conduct involved in that case 'would come within the statute, as it appears greatly enlarged in Section 215 of the Penal Code.' Defendant urges that the section of the Code referred to has not enlarged the scope of the term 'scheme or artifice to defraud,' that its only effect is to make it unnecessary that the use of the mails be a part of the original scheme to defraud, and that the Scheinberg case is based upon a misapprehension that the statute as previously existing was broadened by the code provision. We cannot accept this contention, for we think the statute has been broadened by each amendment made thereto."" 9. To the same effect see U. S. vs. Akers, 232 Fed. 963. In Kaplan vs. U. S. (C. C. A. 2nd Cir. 1916), 229 Fed. 389, 143 C. C. A. 509, it was stated that the crucial question was whether or not the defendant devised a scheme to defraud by using false statements of his financial condition to induce the sale to him on credit of a large quantity of goods which, had the truth been known, would not have been sold. There was a conviction which was confirmed. U. S. vs. Durland, 40 L. Ed. 709, 161 U. S. 306, 7 Fed. Stat. Annot. (2nd ed.) 821, and cases cited in note. Venue, indictment, proofs. A fraudulent scheme to obtain merchandise on credit and not to pay for same, if put into execution by placing part of the purchase orders by mail, will constitute the act a fraudulent use of the mails.1 § 102. Venue, indictment, and proofs. The venue of the crime of obtaining property on a false credit statement, is laid where the creditor parted with his property. As in all other cases of fraud, the indictment or information must set forth the actual facts showing the debtor's fraud committed by means of a false financial statement. The proofs must show that the creditor was actually defrauded in the delivery of property to the debtor on credit. Fraudulent intent must be alleged and proved. Such intent may be proved as in other criminal cases. The venue of the crime of "fraudulent use of the mails," is laid where the debtor's letter was mailed. The indictment must set forth the actual facts showing the plan to defraud. The proofs must show that the letter was actually placed in the United States mails, in furtherance of the plan. The intent may be proved as intent is proved in other cases. Similar ventures are competent; also, letters and telegrams bearing on the issue of a false statement and stating a number of the res gestae, are admissible. So are also admissions and declarations made by the party who forwarded the financial statement through the mails. 1. U. S. vs. Akers, 232 Fed. 963. 2. U. S. vs. Reid, 88 Fed. 249. |