United States v. Sampson

PETITIONER: United States
LOCATION: Beaumont Mills

DECIDED BY: Warren Court (1962-1965)

CITATION: 371 US 75 (1962)
ARGUED: Oct 18, 1962
DECIDED: Nov 19, 1962

Facts of the case


Media for United States v. Sampson

Audio Transcription for Oral Argument - October 18, 1962 in United States v. Sampson

Earl Warren:

Number 69, United States, Appellant, versus Ralph L. Sampson, et al.

Mr. Willens.

Howard P. Willens:

Mr. Chief Justice, may it please the Court.

In view of the hour remaining, counsel for the appellees and I have agreed to divide the time remaining until 2:30.

Earl Warren:

Very well.

Howard P. Willens:

This case comes before the Court on direct appeal from the District Court for the Northern District of Georgia under the provisions of the Criminal Appeal Acts and involves the construction of the federal mail fraud statute.

Prosecution under the mail fraud statute requires proof of two elements; first, a scheme and artifice to defraud and second, use of the mails for the purpose of executing the fraudulent scheme.

This case involves an issue dealing with the second statutory requirement.

The specific question raised is whether the mails were used for the purpose of executing the particular scheme set forth in this indictment, in view of the fact, that the mails were used after the moneys had been obtained by the defendants from their so-called victims.

The 44-count of indictments set forth in the record charges 23 individual defendants and the defendant, Lenders Service Corporation, the violations of the mail fraud and conspiracy statutes.

Count one of the indictment described in some detail the alleged scheme and artifice to defraud.

In brief, the count describes the plan of the defendants to defraud small businessmen for entering and securing loans or in selling their businesses.

Defendants would represent to take or provide valuable services to assist these businessmen in return for a fee, a portion of which was to be paid in advance.

The indictment specified that in fact the defendants did not intend to perform the services contracted for and in fact did not intend to perform any services designed to be valuable in assisting these businessmen in obtaining their objectives.

In order to affect their scheme, the indictment states that the defendants organized three corporations including the defendant, Lenders Service Corporation, and commenced the program of hiring and training salesmen.

The indictment indicates that these salesmen were trained by the defendants in the use of evasions, half-truths and innuendos.

The plan called for the contacting by these salesmen of prospects who had expressed an interest in the services of the defendants.

The salesmen would then engage in a personal interview of these prospects.

Throughout this personal interview, the indictment alleges that the salesmen engaged in a number of substantial false and fraudulent representations.

Among other things, the salesmen misrepresented they’re on training and competence to evaluate the business needs of the prospects.

The salesmen also misrepresented the facilities available to the defendants to assists these small businessmen and would also represent on occasion the interest rates and other terms at which loans might be made available through the assistance of the defendants.

The thrust of all these misrepresentations of course according to the indictment was to secure the signature of the prospect on a -- of a document, on a document called a financial service agreement.

This document in effect was an application for the services to be provided by the defendants and called for the payment of a fee by the applicant.

According to the indictment, the next step involved the acceptance by the defendants of these applications.

According to the indictment, the defendants accepted these applications indiscriminately so long as the fee was paid in cash and so -- or so long as they had been paid by cashier’s check which could be transformed into cash.

The indictment charges that this defendant accepted the application had made no effort to evaluate such things as the qualifications of the prospect or the facilities which the defendant might in fact be able to develop in order to assist the prospect in obtaining the desired goal.

According to the indictment, the defendants would then mail a copy of the accepted contract in a form letter to the applicant.

According to the indictment as set forth at page 8 of the record, the defendants mailed a copy of the accepted contract and a form letter, “For the purpose of lulling said victims by representing that their applications had been accepted and that the defendants would therefore perform for said victims the valuable services which the defendants had falsely and fraudulently represented that they would perform.

That a further purpose thereof was to inform said victims that they could not obtain a refund of their fees and that the contract was not cancellable and that the said victim was bound thereby and had no recourse for retrieving his money.”

Earl Warren:

Mr. Willens, was that -- were those checks in final -- suppose to be in the final payment of everything that they owed to these people or was there -- was there more to come when the transaction was completed?