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Bentel v. U.S., 13 F.2d 327

Facts

The defendants devised a scheme to defraud individuals into purchasing stock in the Morosco Holding Company, which was purportedly formed to operate property owned by a well-known theatrical producer. They distributed false prospectuses and letters, claiming the company owned valuable land and had lucrative contracts for film production, while the reality was that the company was a fraudulent operation. Evidence showed that the prospectus and statements made were largely false, and the company was unable to sustain itself financially, leading to its collapse.

The indictment charge is that Bentel, Amos, and the rest devised a scheme to defraud the persons to whom the indictment letters were sent, and ‘all persons whom the defendants could induce to purchase the stock of the Morosco Holding Company, Inc.‘

Issue

Did the evidence presented at trial support the convictions of Bentel and Amos for using the mails to further a scheme to defraud?

Did the evidence presented at trial support the convictions of Bentel and Amos for using the mails to further a scheme to defraud?

Rule

Under Section 215 of the Criminal Code, a scheme to defraud involves obtaining money under false pretenses, and individuals can be held criminally liable for misrepresentations made in the course of such schemes, even if they did not originate the fraudulent statements.

A scheme, under section 215, is usually, as in this instance, a method of obtaining money under false pretenses; it is in common speech a cheat by means of lies.

Analysis

The court found that there was ample evidence for the jury to conclude that both Bentel and Amos had engaged in fraudulent activities. Bentel was identified as a key figure in promoting the scheme, while Amos, despite not being a principal in the original scheme, was heavily involved in sales and made numerous false statements to potential investors. The court emphasized that the jury could reasonably infer Amos's knowledge of the falsehoods based on his position and actions.

The evidence trailed Amos through months of time and many places into talk or writing with many persons whom he induced to buy stock of the Morosco Company.

Conclusion

The court affirmed the convictions of both Bentel and Amos, concluding that the evidence was sufficient to support the jury's findings of guilt.

Judgment affirmed as to Amos, and by default as to Leven.

Who won?

The United States prevailed in the case, as the court upheld the convictions based on the evidence of fraudulent misrepresentations made by the defendants.

The court affirmed the convictions, finding sufficient evidence that the defendants had engaged in fraudulent misrepresentations to induce purchases of stock.

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