PARR v. UNITED STATES

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Argument of Wilkey

Chief Justice Earl Warren: Number 391, George B. Parr et al., Petitioners, versus United States.

Mr. Fortas.

Mr. Abe Fortas: Mr. Chief Justice, may it please the Court.

This is case is here on certiorari to the United States Court of Appeals for the Fifth Circuit.

The Fifth Circuit affirmed these convictions of the petitioners on the various counts of an indictment, 19 counts of which, charged violations of the federal mail fraud statute and the 20th count of which charged the violation of the conspiracy statute.

This Court granted certiorari on two questions, first, whether the mail fraud statute is applicable in -- to this indictment and the facts of this case.

And second, whether the defendants should have been granted access to the grand jury testimony of one of the witnesses at the trial, Diego Heras.

In addition, due to impart to developments after petitioners have filed their petition for a certiorari with this Court and after the Solicitor General had filed his brief in our position to the petition for certiorari and the manner had been submitted to this Court because of events happening thereafter, to which I shall elude.

In our brief, we have suggested that the Court considered whether this case is suitable for the exercise of its supervisory power and whether the case calls for the exercise by this Court of its supervisory power over the administration of the federal criminal process.

Now, with the Court's kind indulgence, I shall commence with a discussion of the mail fraud point, which in our submission will dispose of the case and in our submission should result in a dismissal of the indictment.

Before doing that, I should like very briefly to give the Court, if I may, an idea of our point with respect to the grand jury testimony question and a very brief idea of the reason why we have respectfully suggested consideration of the invocation and use in this case of this Court's supervisory power.

I shall then go to the mail fraud point and shall then return to the grand jury and the supervisory power points.

On the grand jury point, the witness, Diego Heras, was in our submission, the Government's principal witness, the Government disputes that.

His testimony occupied 23% of the record below about 1000 pages out of about 6000 pages.

The Court instructed the jury below that they might convict on the testimony -- on the unsupported testimony of an accomplice.

The Court instructed the jury that Diego Heras was an accomplice.

The Court of Appeals stated that Diego Heras' testimony contained many inconsistencies and contradictions and it's said that the jury might have considered him far from trust -- trustworthy, as we argue in our briefs, those are mild and gentle words.

Chief Justice Earl Warren: Is that the District Court told the Court of Appeals?

Mr. Abe Fortas: The Court of Appeals.

Unknown Speaker: Court of Appeals.

Mr. Abe Fortas: Yes, Your Honor.

Now, subsequent as I said, after the petition for certiorari and the Government's brief had been submitted to this Court, the Solicitor General filed a memorandum in this Court saying in fact, “Oops, we're very sorry.

There is no transcript of Diego Heras' testimony before the grand jury.

His testimony before the grand jury was never recorded.”

That despite the fact that the distinguished prosecuting attorney, in the case in the District Court, Mr. Wilkey who was then United States Attorney in Houston.

Mr. Wilkey had stated trice in the trial court, in response to inquiry that there was a transcript of Mr. Heras' testimony and there are yards of words that were spelled in the District Court and miles of words that were debated in the Court of Appeals on that assumption and the case was litigated by the -- by the defense on that basis.

Justice Charles E. Whittaker: (Inaudible)

Mr. Abe Fortas: Yes, sir.

Justice Charles E. Whittaker: Or that is not just a contained district custody.

Mr. Abe Fortas: He said, “I have the transcript and it is in my office.”

Justice Charles E. Whittaker: (Inaudible)

Mr. Abe Fortas: Your Honor, there is no doubt I believe.

Perhaps Mr. Wilkey will agree.

I believe there is no doubt that the Court was asking him, “Do you have a transcript of Mr. Heras' testimony before this grand jury?”

And that Mr. Wilkey said, “I do.”

When he was asked that question on two additional times, Mr. Wilkey said he has it in his office.

Now, we as -- say as I hope to show in a few minutes that this is a case that falls within the -- this Court's doctrine as laid down in Procter & Gamble and Pittsburgh Plate Glass, that this was a case of ultimate and absolute need because of the critical nature of Heras' testimony and because of his demonstrated unreliability and because he was a witness beholding to the Government.

Now, I feel it necessary again as I profess here to state why we have suggested that this Court consider whether this case is appropriate for invocation of its supervisory power.

In the first place, if the Solicitor General's statement is accepted that Mr. Heras was examined before the grand jury in this case and his testimony was not reported, we believe that that calls for an exercise of this Court's supervisory power.

We do not contend that under the rules, it is necessary as a matter of law for the testimony of every witness before a federal grand jury in Texas to be reported.

We do contend that in the circumstances of this case, it was an abuse not to record the testimony of Heras as an example and now come to others.

The Government knew at the time that Heras was put on the -- on the stand before the grand jury that he had given an affidavit, sworn affidavit to the FBI concerning the petition of Parr, that he had subsequently, given a contradictory affidavit to the FBI on the same matter in which he had said that he had not told the truth in his first affidavit.

The Government knew and Mr. Heras had not been prosecuted as part of this great kettle of fish involved in this part of Texas.

The Government knew that Mr. Heras was dependent upon the Government's mercy.

Every other important witness called before the grand jury, I think there were over 75, the testimony of all except four of the witnesses called before that grand jury was reported.

Of the other -- of this four, one was Heras, then the -- there was another one who was the -- a postal inspector and there were two people who were not witnesses at the trial.

All the others were transcribed.

The grand jury proceedings took place over a long period of time.

Justice Felix Frankfurter: If the Court had -- I happened to be very sensitive to show practices by a prosecutor.

Is there any suggestion that this was a purposeful conduct on the part of the District Attorney?

Mr. Abe Fortas: Your Honor, I -- can I --

Justice Felix Frankfurter: (Voice Overlap) purposefully not to have minute for this testimony?

Mr. Abe Fortas: Your Honor, all I -- I know about this is what is in the papers as to the reasons for it.

And the Government's brief says that the reason that Mr. Heras' testimony was not recorded, was first that it was well known to the Government so they did not mean a recommendation of it for their own use at the trial.

And second, that he was brought in at the last day when the case was fully developed.

Now, that second reason, I find singularly unpersuasive, because Heras was such an important and a key witness and to his suspicious mind and I suspect that I, as an advocate, must have one and who have one, then maybe other reasons for the Government's having delayed and delayed in bringing Heras in as a witness before that grand jury and then finally bringing him in on the last day.

But I am not -- I can't suggest any -- what -- what the -- what was in the Government's mind beyond what in its papers, I do submit, Mr. Justice.

Justice Felix Frankfurter: Makes a lot of difference for me.

Mr. Abe Fortas: It may Your Honor.

Justice Felix Frankfurter: (Voice Overlap) an exercise of discretion by the District Attorney --

Mr. Abe Fortas: Yes, sir.

Justice Felix Frankfurter: Perhaps, because I was brought up when there were no stenographers before a grand jury.

Mr. Abe Fortas: Yes.

Justice Felix Frankfurter: And indeed, it wasn't allowed to have them --

Mr. Abe Fortas: Yes.

Justice Felix Frankfurter: -- and that colors my interest --

Mr. Abe Fortas: Well, I --

Justice Felix Frankfurter: -- in knowing why this was done and it makes all the difference in the world --

Mr. Abe Fortas: Yes.

I should not --

Justice Felix Frankfurter: -- whether there's a slightest basis for inferring shop practice, as I call it my link, or whether it was something else.

Mr. Abe Fortas: Well, I'd -- I'd like to make two points to that, Mr. Justice.

First, I want to say that this grand jury proceeding was prior to the Jencks case and prior to the rush of interest that has since developed in a -- by -- on a private defendant in obtaining grand jury transcripts, I think that is an important point for the prosecuting attorney on his side.

On the other hand, Your Honor, my point is that regardless of whether there were or were not sharp motives, that responsible prosecution in the particular circumstances of Mr. Heras, would certainly have caused the prosecuting attorney to see that his testimony was recorded, the testimony of over 70 witnesses before that grand jury on this same manner were reported.

Heras was a self-confessed liar, thief, embezzler, who had given the Government a false affidavit.

Certainly, the minimum of prudence, the minimum of proper procedure, in my submission, Your Honor, would have meant that the prosecuting attorney would say in the case of this witness, “Above all, we will have a record because it is my duty to see that this man who has perjured, who has falsely testified before does not perjure himself before the grand jury.

And it is my duty to see that the innovations that are necessarily attended upon the presence of a report and the taking down of a witness' testimony are operative in this -- in this situation.”

Justice Felix Frankfurter: Well, you are then -- you are then urging dereliction of duty.

Mr. Abe Fortas: I certainly am Your Honor, which is different from motive.

I may have misunderstood you, but I -- I'm not suggesting sharp practice or anything about the prosecuting attorney's motive, but I certainly am suggesting that dereliction of duty as --

Justice John M. Harlan: Were the -- was the defense furnished the copies of these affidavits?

Mr. Abe Fortas: Yes.

In the course of the trial, while the trial was going on, this Court's decision in Jencks came down and then the defendants were furnished with a large batch of statements by Heras and other witnesses and we have the affidavits --

Justice Felix Frankfurter: Upon request --

Mr. Abe Fortas: -- now in the record, here.

Justice Felix Frankfurter: Upon request or volunteered?

Mr. Abe Fortas: Upon request, as I -- yes, that is correct, upon request.

Well now, I should like to get to the mail fraud point here.

The Government agrees that the mail fraud situation here presents a “unique situation,” that is in quote.

They say that there is no case exactly like this.

It is our submission to Your Honors that the attempt to use the mail fraud statute in this case is not only unprecedented, but it's contrary to the law and that the result of the use of the mail fraud statute in this case, if it is sustained, would be to expand federal jurisdiction over whether are in substance local crimes, to an extent which would leave very little outside of the scope of federal jurisdiction in terms of the -- the heretofore local crimes of embezzlement.

Now, I'll have to just lay the facts out as briefly as I can, Your Honors.

The event in this case involved the Benavides Independent School District, which is located on the Corpus Christi Division of the Southern District of Texas.

This School District had to duty, under the law, to operate two schools and had the power and the duty to levy and collect taxes on property located in the district for the purpose of raising funds for school operations.

Now, there are 11 petitioners here, and six of them were officially connected with the School District.

One of them was the Tax Collector of the School District.

Three of them were on the Board of Trustees and one of them, for a short period of time, was the attorney for the School District and another was for part of the times, secretary of the School District, that's six of them.

The other five were connected with the fiscal affairs of the bank of the School District in this sense.

Two of the other petitioners are banks, one being the official depository for the School District, and then the remaining three persons who are the petitioners here including George Parr, were officials of the banks and it's also alleged that Mr. Parr dominated the affairs of the School District and there is evidence from which a jury might have drawn that conclusion.

Now, the indictment herein and the evidence viewed most favorably to the Government, showed that some of the petitioners misappropriated and embezzled funds of the School District over a period of years.

They -- overpaid of approximately five years, there's some doubt as to when the embezzlement stood.

Now, the technique by which the scheme to defraud the school operated was this, checks were issued to fictitious persons, nonexistent persons and checks were issued to real persons for a work that they did not do and the proceeds of those checks, the jury might have found, were turned over to the petitioner, Parr.

Now, this was the scheme, the scheme to which attention was directing.

These practices, as I said, were indulgent from a period of about five, perhaps six years, the indictment come because of the statute of limitations, covers at period September 1, 1951 to December 1954.

To give you an idea of the magnitude of -- of the embezzlement pursuant to the scheme, a Government -- the Government estimates that the fraudulent checks which I've just described in the five-year period amounted to about $190,000.

Now, because it maybe relevant later on, I'm going to divide that by the period of the embezzlements and suggest that mathematically, the embezzlements amounted to a little over $40,000 a year.

Because I want you to consider that if you will, as against the annual receipt from school tax assessments which -- or the annual school tax assessments in which run from the amount of $400,000 in 1949 to $650,000 in 1952.

Now, in other words, this was just a small part of the school tax assessments although, it was a lot of money.

Justice Charles E. Whittaker: Approximately 10%.

Mr. Abe Fortas: Less than that, I think, sir.

In the later -- in the years --

Justice Charles E. Whittaker: (Voice Overlap) --

Mr. Abe Fortas: -- covered by the indictment, it was substantially lesser than 10%.

Now, most of these petitioners have been indicted in the State courts for embezzlement and for these transactions that had same transactions that it covered in this indictment.

To the present time, they have all either been acquitted or after conviction, their convictions have been reversed in the appellate courts of the State of Texas.

There are a number of state criminal proceedings still pending, however.

Now, I've just described to you the central scheme.

In addition to this scheme, there is some evidence that there were individuals among these petitioners and perhaps other persons, who engaged in sort of folics of their own, petty grafts, thievery, embezzlements.

There are -- the only ones that are involved in this case in that category of this sort of individual frauds.

The -- the only instances involved the individuals Chapa, Garza and Oscar Carrillo.

Those are the only individual cases in which a mail fraud is alleged, as I will come to in a moment, in addition to the general and pervasive scheme.

The Government says that Chapa, who was the Tax Collector, took for himself some of the tax money belonging to the district, instead of this operating as part of the scheme, Chapa took it for himself.

The procedure which Chapa used to get this grant for himself was different from the scheme itself.

But the net effect was the same except that Chapa got the money.

In the general scheme, you will recall the checks, fictitious checks, were drawn against the general funds of the district.

In Chapa's case, he being the Tax Collector, into the two instances that are involved in the indictment, he received checks by mail.

He then cashed the checks, as he had a right to do under Texas law.

Under Texas law, it is not the checks, but the proceeds of the checks that belong to the district.

We've got that brief and I shall pause course to elaborate, that is the fact.

And Chapa, instead of turning over the cash proceeds of these checks to the district, appropriated them for himself.

That's very bad.

It is not a mail fraud as we show in our brief and as I think, I'll -- as I hope come too in a moment.

The other individual frolic, if it maybe called that, involves an item that the Government itself in its brief says is quite small and that is that two of the people here, Garza and Oscar Carrillo got -- bought some gasoline for their personal use instead of paying for that of their pockets, they charged it to the district.

Again, this is no mail fraud violation as we show in our brief, but I want to come in the little time that I have to the central school, because I am confident that the case turns on that.

Now, the essential point, Your Honors, is that this indictment does not charge.

There is no evidence to show that anyone of the fraudulent checks drawn on the funds of the district was sent through the mails at anytime.

It is not those fraudulent checks that are claimed to be violations of the mail fraud statute.

Actually, what happened is that all these people lived in and around this little town and the fraudulent checks were made out, they were then passed from hand to hand, passed over to the bank and then the proceeds were taken over by hand allegedly, to Mr. Parr.

So, the fraudulent checks are not charged as a mail fraud.

Well, held us, where does the Government get a mail fraud in this case?

Now, and here we are right at the nub of point.

The Government says that some of these and some of these petitioners, the three members of the Board and the Secretary of the Board operating they say under the domination on this property, were in charged of the School District and had functions with respect to the collection of taxes for the School District, you say.

And since some of those taxes came in by a mail, they say that is a use of the mails.

Now, I quote the statute for the purpose of executing the fraudulent scheme.

Now, they say that since one of the taxes were collected by mail since the proceeds of those taxes went into the general funds of the school, since persons stole from the general funds of the school, that therefore, the collection of taxes was a use of the mails for the purpose of executing the embezzlements from the fund.

Now, every time I say that, it sounds a little complicated, but we have suggested and I believe what an important qualification the Government has been impressed by this.

We have suggested that the Government's proposition here, as just -- is -- it is like to follow.

Let us suppose that a doctor got a secretary and the secretary sends bills out to all the doctor's patients through the mail and some of the bills are paid by use of the mails and then the payments go into the doctor's account and the girl -- the secretary has a petty cash fund, and let us say every week she dips into the petty cash fund and takes 50 cents or $5 or $10.

Now, in the Government's theory, in this case, on the theory of this indictment, most embezzlements are a violation of the federal mail fraud statute.

Justice Felix Frankfurter: Where is the fraud in the doctor-secretary case?

Mr. Abe Fortas: There is -- the fraud is her -- nothing, but her embezzlement.

I mean to say, in the case that I put to you, she embezzles and that's what happened here.

Justice Felix Frankfurter: There's no fraud at all, is there?

Mr. Abe Fortas: Not in my opinion.

Justice Felix Frankfurter: There's a fraud here, wasn't it?

Mr. Abe Fortas: Not -- not --

Justice Felix Frankfurter: I'm not talking about the mail fraud.

Mr. Abe Fortas: -- in connection with the use of the mails.

Justice Felix Frankfurter: I'm not talking about that.

There was a fraud.

Mr. Abe Fortas: There were many frauds here, Your Honor.

Justice Felix Frankfurter: Many -- and the problem here is --

Mr. Abe Fortas: But they have nothing to do with the use of the mails.

Justice Felix Frankfurter: So, the question is whether there's any relation of the mails to this fraud?

In your doctor's case, there was no fraud.

Mr. Abe Fortas: There -- well, there is a fraud, Your Honor in the sense that --

Justice Felix Frankfurter: The secretary stoles the money --

Mr. Abe Fortas: That's correct.

Justice Felix Frankfurter: -- there was no antecedent fraud, so there couldn't be any connection between a fraud and subsequent conduct.

Mr. Abe Fortas: Well, if Your Honor please, it is our --

Justice Felix Frankfurter: I'm not saying that this is a mail fraud case.

Mr. Abe Fortas: Yes.

Justice Felix Frankfurter: I'm saying there's a distinction between a fraud and -- and subsequent events and no fraud.

Mr. Abe Fortas: That's right.

If Your Honor please, I -- I want to make this clear, but perhaps, I -- and I say we should have.

There were lots of frauds here.

One of the frauds that the Government talks about in great deal is that reports were submitted to the School Board in Austin, Texas by these petitioners and there were fraudulent representations in their report to that School Board, but the report to the School Board is not a use of the mails.

That is relied on in this case, it couldn't be.

One of the interesting and important things about this case, one of the things that we call to the Court's attention in connection with our supervisory power point is this, the venue of this case, this indictment was brought in Houston, Texas which is 250 miles northeast of the Benavides School District and of the area in which these -- the defendants, these petitioners live.

Although everything involved here, all the fraud involved here relates to the Benavides School District.

It was brought in Houston, venue was placed in Houston by the device of saying that the mailings had (Inaudible) in Houston.

What mailings?

The mailings of -- of taxes -- of checks and payment of taxes by the Humble Oil Company, the Texas Oil Company and so on, those are the counts in this indictment that I alleged to be the mail frauds.

Humble Oil Company sends in a check in payment of its taxes, that appears as a mail fraud and the -- and the petitioners are alleged to have committed the crime in Houston, how?

By causing Humble Oil Company to send in a check in payment of taxes, how do petitioners cause him to do it?

Petitioners cause him to do it by assessing the taxes as they have to do it according to law.

There is not a word in this indictment, if the Court please.

There is not a word of evidence, if the Court please.

There is nothing in trial court's charge, if the Court please.

To the effect that any of these tax notices or that if any of these tax payments was itself tainted with fraud, or that the taxes where inflated or that there was any kind of monkey work in connection with the taxes.

And Government, in it's final -- in it's brief here, as rather to my mind, rather extraordinary arguments trying desperately at this last moment to rewrite the indictment by suggesting that now, that there were, that the taxes might have been less, if it hadn't been for the scheme to defraud.

The trial court, their position was not that the taxes might've been less, but that the schools might've been better and I suspect they might've.

Justice Potter Stewart: This is no new idea here.

This is -- this was stated by the Court of Appeals, wasn't it?But no file (Voice Overlap) --

Mr. Abe Fortas: Yes, Your Honor, but the Government has taken -- Government -- so I -- I understand, did not advance that field in the courts below.

The Court of Appeals has -- divides the -- and developed the theory and the Government here elaborates it and we answer it in our reply brief to which I respectfully call the Court's attention.

Justice Charles E. Whittaker: Mr. Fortas, may I ask you please.

I'm intrigued by your hypothetical about the doctor's secretary --

Mr. Abe Fortas: Yes.

Justice Charles E. Whittaker: -- who takes money from the till.

Mr. Abe Fortas: Yes, sir.

Justice Charles E. Whittaker: She there sent out bills that were regular and honest bills.

Mr. Abe Fortas: Yes, sir.

Justice Charles E. Whittaker: Would it make any difference in your view, if with design to appropriate the fund -- if the money came back, she added on 10%?

Mr. Abe Fortas: Yes, sir.

I think there would be a violation of the mail fraud statute.

Justice Charles E. Whittaker: Does the Court of Appeals proceed, in your view, on the basis that the evidence here established an increase in assessed valuations for the purposes of the bringing in an amount in excess of need in order to supply appeal for loot?

Mr. Abe Fortas: The Court of Appeals indicates something to that general effect and the Government here elaborates on it, but more cautiously.

The Government here says more cautiously than the Court of Appeals that the taxes might well have been lowered, if it had not been forfeits.

Our answer to that, Your Honor, it is very claimed, if only maybe so bold as to say so, there's nothing to -- to that effect in the indictment.

There is no evidence to that effect.

There is nothing in the charge.

That's not the theory of this case.

That is no the theory of this indictment or the theory on which this case was tried.

The theory very plainly was this.

Remember, venue in Houston, the theory very plainly was that taxpayers in Houston send in checks in payment of taxes and the Board in Benavides sent out a few notices to people in -- in Houston that this tax collection process resulted in part, in the creation of a fund, which belonged to the School District.

I say in part, because there were funds from other sources too.

And these people embezzled and stole money from this fund.

It's exactly like the doctor's case.

There is no allegation in the indictment to the effect that the taxes that either -- that tax is whether in the aggregate or in individual cases were affected by this fraud.

Justice Charles E. Whittaker: And no evidence and no charge on that.

Mr. Abe Fortas: That's correct, Your Honor.

That is correct.

Justice William J. Brennan: Well, Mr. Fortas, is there anything that the budget for the School District was bloated?

Mr. Abe Fortas: If Your Honor please, I don't recall anything about a budget here because the fact of the matter is --

Justice William J. Brennan: I gather the taxes are raised against annual requirements for school purposes on that --

Mr. Abe Fortas: And the fact of the matters is that the tax assessing process is composed of two parts.

One is the valuation of property, of course, and the other is fixing of the rates.

So far as the valuation process here is concerned, that was done by a Board of Equalization in the -- with respect to Government estimate 75% to 85% of the property as a matter of value here.

That was done.

The valuation was fixed on recommendations of concededly independent engineers.

Most of the important property in this district is oil property and Humble Oil and Texas Oil Company only and there was a firm of independent engineers and appraisers who made the valuations and turned it over to the Board of Equalization, which was separate from -- that is composed of different people although they may have been nominated by the School District, but they weren't the same people.

And there were sorts of procedural rights.

The usual kind, taxpayer didn't like it he could apply for a hearing at the Board of Equalization and go -- go to the courts.

So there's no -- no question about the -- the valuation and no -- no such charge is made.

The second thing is the level of the rates.

The rates here were fixed, the -- the maximum that could be assessed was fixed by the -- by a state law and of course, one might argue that the -- the Board might have fixed the rates at anything lower than that.

At something lower than the maximum, that would've been rather -- that would have been --

Justice William J. Brennan: Well -- well is it --

Mr. Abe Fortas: -- precedents --

Justice William J. Brennan: Isn't the kind of system where the rate is determined by dividing requirements by rateables?

Mr. Abe Fortas: Your Honor, that's not the way it has worked.

It is worked on the basis of a maximum rate prescribed by the State applied to the valuation of the property.

Now, the record is replete with evidence.

As we construe it, that even that systems did not bring in what would've been an adequate amount of money for (Voice Overlap) --

Justice William J. Brennan: I would change to see its established requirements.

Mr. Abe Fortas: I would --

Justice William J. Brennan: But --

Mr. Abe Fortas: I -- it must've been -- it must've been the School District, Your Honor.

But the tax -- but that is not rate that the taxes were assessed here.

They were assessed on the basis of the valuation of the length and the rate was applied to it.

Justice William J. Brennan: (Voice Overlap) fixed rate by state laws?

Mr. Abe Fortas: It was fixed at the maximum.

They could go lower than that, but they never have.

And they -- and so far as the record shows (Voice Overlap) --

Justice William J. Brennan: So what determine it, whether they -- whether they assessed the maximum or at some lower rate requirements?

Mr. Abe Fortas: I suppose so, Your Honor.

Justice William J. Brennan: So that I take it as there where any evidence and requirements would inflate it, for the purpose of --

Mr. Abe Fortas: Exactly.

Justice William J. Brennan: -- applying the maximum rate.

Mr. Abe Fortas: Exactly.

Justice William J. Brennan: And that circumstance, would you say that the mails then had been used?

Mr. Abe Fortas: I would indeed, but the evidence is to the precise contract.

The evidence is replete and Mr. Wilkey put a lot of it in, in the Court.

And he argued it very stirringly to the jury that this School District, its facilities, its teachers, its children were in dire need of additional revenues.

There's nothing in this record to indicate either an inflation of -- of the rates, because of the scheme or that the total amount collected was in excess of the reasonable needs of the district.

There's nothing like that in this case which, Your Honor, in order for it to be a federal crime, of course, that theory would have had to be alleged in the indictment, too.

You say so that the defendants would have had an opportunity to meet it.

I point out two things to you, one that it is not in the indictment and two that it is not in the evidence.

Justice William J. Brennan: Can I trouble for the volume in which the indictment is set forth?

Mr. Abe Fortas: Yes.

It's in the first volume, Your Honor, and --

Justice Potter Stewart: Well, I have the -- I have --

Mr. Abe Fortas: It's at page -- begins at page 10.

Justice Felix Frankfurter: I'm arguing Volume 1 of the record.

Mr. Abe Fortas: I should like the Court's permission to reserve the remaining of my time for rebuttal and the rebuttal will be handled by Mr. Sharpe, who is on trial counsel of the case.

Before sitting down, I should like to call the Court's attention to the fact that in the reply brief, which we have filed, as the Appendix B, which we have set forth in fact, similarly the specific mailings, which are charged as the price in these indictment and a glance that those, well, I believe clearly demonstrate the remoteness of those mailings from the frauds.

Thank you.

Chief Justice Earl Warren: Mr Wilkey.

Mr. Wilkey: Mr. Chief Justice, may it please the Court.

First, I should like to say --

Justice William O. Douglas: Are you the Wilkey at the trial?

Mr. Wilkey: Yes, indeed.

Justice William O. Douglas: I -- I've been greatly puzzled.

I'm greatly disturbed I might say that to read it over it again, statements that I have these in my possession.

And then to have Government from the case get serious say well, that was as an error.

Mr. Wilkey: Mr. Justice Douglas --

Justice William O. Douglas: How -- how can that be explained?

Mr. Wilkey: I intend to explain that fully and if you say that you were stirred to read that over and to find out that they did not exist, that is a mild statement as to how I felt when I found out that the grand jury statement in the court -- in the -- before the grand jury the mail fraud case did not exist.

I will go into that immediately, first, but I would like to ask the Chief Justice to --

Justice William O. Douglas: Well you did -- you did.

You're the one that did say over again that I have them in my possession, is that right?

Mr. Wilkey: I stated three times that I had the grand jury transcript on Mr. Heras' testimony in my possession and -- in my office, not in the courtroom, and I meant the mail fraud grand jury and on the third time, I specified that it was the mail fraud grand jury.

I was flatly in error and --

Justice William O. Douglas: Were -- were those at any time in existence?

Mr. Wilkey: No, sir, never.

Justice William O. Douglas: Were they -- were they in -- in existence, but destroyed or --

Mr. Wilkey: Oh, no.

Never -- never.

And we are --

Justice William O. Douglas: How do you happen to take the testimony of some witnesses not testimony of other witnesses before a grand jury?

I do not understand not taking any witness' testimony, but I don't -- I never heard of it on a selective basis.

Mr. Wilkey: Let me assure you that the selective basis was not intentional in regard to not having a transcript of the witness, Heras', testimony.

Let me outline, if I may, the circumstances at the time and the reasons why we did not take a transcript of the testimony before the mail fraud grand jury.

Justice Hugo L. Black: I don't want to delay it, but who conducted the grand jury?

Mr. Wilkey: Mr. Bottler, my assistant, who is at the table here and I.

Justice Hugo L. Black: And you.

Were you there when the evidence was taken in this case?

Mr. Wilkey: Yes, I was.

Justice Hugo L. Black: During the entire evidence?

Mr. Wilkey: Before the grand jury?

Justice Hugo L. Black: Yes.

Mr. Wilkey: No.

I don't think before the entire evidence.

We shared the responsibility, but I was there.

I'm satisfied during the entire interrogation of Heras.

Justice Hugo L. Black: Then who -- was -- was the stenographer, the regular court's stenographer or grand jury stenographer?

Mr. Wilkey: The stenographer was one of the regular court stenographers, who was either habitually or occasionally employed before the courts here in the United States courthouse.

Whether he had an appointment as official court reporter, I do not know, but he had that status and we have used him in one of the grand jury, I think.

Justice Hugo L. Black: Why did he sit in the grand jury room with reference to your seat?

Mr. Wilkey: I think, we generally put the court reporter right beside the witness where he could hear the witness' testimony clearly.

And as to where I customarily set an interrogation, I -- frequently, I would sit on the other sides of the witness.

Justice Hugo L. Black: Across the table, did you have a table?

Mr. Wilkey: Yes.

We have a table.

Justice Hugo L. Black: You have --

Mr. Wilkey: Across the table.

Justice Hugo L. Black: Like a grand jury room, usually as there was a table, the grand jurors were on both side of the table?

Mr. Wilkey: Yes.

They were on the both sides of the table and siting around the room.

Justice Hugo L. Black: Did you sit at the end or on the side of the --

Mr. Wilkey: I -- I forgot, sir.

I could not say exactly where I sat.

Justice Hugo L. Black: But the other man sat right across from in the stenographer?

Mr. Wilkey: The court reporter, yes.

Justice Hugo L. Black: Court reporter?

Mr. Wilkey: That is correct.

Now, let me explain and I want to do it at the outset and I can see, I know Mr. Justice Douglas' concern, but I know that the rest of the Court is concerned.

That's why we made no transcript here of the witness errors.

We had either 12 or 14 statements of Heras taken by various investigating agencies during the past two years of 1950 -- during 1953 and 1954.

We had 12 or 14 at that time and we subsequently acquired two or three more.

17 statements of Heras were turned over to the defense at the trial.

Now, in addition to that, I have the grand jury transcript recorded on Mr. Heras, before a grand jury which met in October 1954, concerning the affairs of Mr George B. Parr and concerning, in part at least, these matters made the subject to this mail fraud indictment.

When the last day came up and there was no particular reason why Heras would -- there on the last day, he could've been earlier.

Heras lived in Houston at that time and -- and was available anytime that we needed to call him.

When the last day came up, we had only two witnesses left, Mr. Heras and Postal Inspector, Mane (ph).

We did not need a court reporter and we told the court reporter, his services were not needed that day.

And there was no transcript made of either Heras or Inspector Mane.

Now, we hadn't made a transcript of Inspector Mane when he appeared on the first day of the grand jury and the reason was as in the case of Heras, Mane was there in Houston, we had reports of Mane, if we wanted to ask any questions of Inspector Mane we could have call him up on the telephone and ask him to come down to the federal building.

We had as I say 12 or 14 statements for Heras, taken on these matters and there was simply no need to make a transcript.

Justice Hugo L. Black: Mr. Wilkey, I -- I don't want to disturb you but that fact that disturb me most frankly, is the fact that if all had occurred you knew you had these statements and that was the reason you did not have the reporter.

You should have forgotten it, so that you would have made the statement later, as you did several times that you had his evidence.

Well, if you were sitting there in the grand jury when he testified and knew that you didn't take his testimony because you had the statements.

But that -- that's I (Voice Overlap) --

Mr. Wilkey: You mean, I -- you -- you don't understand how I failed to recall?

Justice Hugo L. Black: Yes, under those circumstances.

It's -- it's --

Mr. Wilkey: Mr. Justice Black, I, myself, have no independent recollection, of course, as to why I made the error in the courtroom.

I assure you it was a flat misstatement, unintentionally made and I was not aware that this did not exist until we ascertained it later on.

And in reconstructing it, all I can say is that I must have been thinking of the tax grand jury transcript, which I hold here in my hand and which we did have, a record on Mr. Heras' testimony back in 1954.

Now --

Justice Hugo L. Black: Do you -- do you now remember definitely that you did not take it that much because you already had the statement or is that -- do you remember that definitely?

Mr. Wilkey: I can't remember that definitely but by going back as to what happen in the circumstances, I'm satisfied that that is true and there -- that was the reason we did not record them.

We could have had no other reason than the fact, we simply didn't mean it and I want to point out that in my two years as United States Attorney there, in March 1956, I had never had a demand for a grand jury transcript except in this case.

The Jencks decisions did not come until a year and a quarter after this mail fraud grand jury.

And it never occur to -- to us -- to me that there was any obligation on us to make a grand jury transcript for the benefit of the defendants.

Justice Hugo L. Black: I can -- I can understand that.

How long was it after the time the -- this gentleman testified before the grand jury, until you made the statement in court that you had the transcript of his evidence?

Mr. Wilkey: He appeared before the grand jury on March the 6th, 1956.

I made the statement, I suppose the first time, thinking I had the transcript on June the 5th, 1957, a year and three months later.

And I will call your attention further that the case has been tried once before in November and December and that I did not have in the courtroom, the transcripts and it had been, I'm satisfied, prior to the first trial that I have had occasion even to refer to the grand jury transcripts.

By the time of the second trial, in trial preparation, as counsel at the table, I had all of the information on all of the witnesses, pretty well reduced to notes that I could hold in my hand and use for examination.

In some instances, in this second case, I used a transcript made from the first trial.

But in most instances, I had (Inaudible) the thing down to the very essentials that we needed to present our case, and since we were doing it for the second time, we pretty well new what that was.

And so, I did not refer to the grand jury transcript of errors or any Government witnesses and I don't think I had any occasion to do so, at any time during the trial.

I have no recollection, but I don't think there was any reason for it.

They were all back in the files in the office.

Now, in the files was a grand jury transcript of Heras and that I'm satisfied in -- looking back on it now, was both what I had in my mind when I say I had a grand jury transcript and secondly, it, along with the 12 or 14 statements that we have of Heras, was the reason that we made no transcript of this witness' testimony.

This, I assure the Court, was not a selective effort to avoid making a transcript of Mr. Heras for any purpose whatever.

We simply didn't need it.

And we knew of no obligation toward the defense.

We never thought of it that would've required us to make a transcript.

Now, the petitioner says and admits that there is no requirement that the United States Attorney make a transcript.

But they say, the extraordinary cases, they actually -- that this is an extraordinary case and therefore, under these circumstances, it was an abuse of prosecutorial discretion, not to make a transcript.

Now, if we had a discretion, then the question is, whether or not, I exercise that discretion properly.

And the reasons that I have given are the reasons on which I acted.

Justice Hugo L. Black: Did the man have the kind reputation that has been asserted here if he had at that time?

Mr. Wilkey: Only in part and on a small part.

And I want to get to that because I think what -- what we knew about Mr. Heras' reputation, bears on whether or not, it was proper not to make a transcript.

Chief Justice Earl Warren: Well, Mr. Wilkey, before you get to that, may I ask if the time that he appeared before the grand jury in this case, had he made those two conflicting affidavits one of which was admittedly false?

Mr. Wilkey: Yes.

And that is the part that we knew about.

Chief Justice Earl Warren: Yes.

Mr. Wilkey: And that I want to mention that along with the others.

Chief Justice Earl Warren: Well, I was going to -- I was going to ask you this, if you had a -- have a witness that you're going to rely on at a trial and you find that that witness in the same proceeding or collateral proceedings has made two affidavits, so the facts one of which is admittedly false, is it not common prudence to -- to have his testimony at the grand jury recorded so you will -- you will have something, at least, for yourself to rely on, if you have to impeach him?

Mr. Wilkey: Mr. Justice -- Mr. Chief Justice, we did it once.

We simply didn't do it twice.

Chief Justice Earl Warren: Well, no.

Not in that in that proceeding.

Mr. Wilkey: Yes.

Chief Justice Earl Warren: Are this -- this you're indicting -- you're indicting some people in this proceeding and you are taking the testimony of an important witness and you know that in the same subject matter, he has made two affidavits, one which, he admits to be false.

Do you not think for the protection of the Government, they are leaving the defendants aside that it is prudence to record the testimony of that man so you'll know, have something that you can impeach him on in that particular proceeding?

Mr. Wilkey: I certainly would, if his previous, erroneous or false statements had been concerned with the subject matter that we were inquiring about.

But, Mr. Chief Justice, I want to emphasize this and a -- you -- of these two statements are in the record and you have not only my opinion on it, but also the opinion of the trial court.

The two -- the only two really contradictory statements, the only two were some defense brought were sufficiently contradictory put in the evidence.

They didn't put these others in evidence.

The only two were on a matter not related to this indictment.

The judge -- the trial judge examined that and look at both of these statements.

They did not concern the subject matter of this mail fraud indictment in any fashion.

Now, they did show that this man had made a false statement and he gave us the explanation of that and he gave the explanation on the stand under cross-examination.

But on the subject matter of the mail fraud -- all of the matters related to this case, the witness, Heras, not only was accurate and truthful from the stand, but he was accurate and truthful in the preceding statements which we have.

Now, we have lodged of this statement, which we had at the time of the grand jury and all the other statements of Heras which were tendered to the defense.

We have lodged those with this Court, where they are available for inspection.

They were not in the Court of Appeals and we lodged them on the basis and in relation to whether or not, we properly exercised a discretion in not recording Mr. Heras' testimony.

I have read those three grand jury statements yesterday and today.

I say, I reread them, because it was on the basis of those that we interrogated to Heras before the two grand juries.

I have reread them yesterday and today and I think that any fair minded man with the facts that just the basic facts of Heras' testimony in the -- a trial court in his mind, could read those statements and see that Heras was a consistent witness.

He was not a misleading or evasive witness.

His story was straightforward and consistent and it was that on which we had to rely when we put him before the grand jury.

Justice William J. Brennan: What was the subject matter, Mr. Wikey, of the conflict -- and that you state?

Mr. Wilkey: The subject matter of the two statements which are exhibits -- defendant's Exhibit 213 and 214 and are printed on the record.

The subject matter involved an alligation that George Parr had Heras transport a sealed envelope to Corpus Christi for eventual -- $5,000 for eventual payment to an FBI agent.

That story was false and Heras said it was false.

In both affidavits -- in both affidavits, there's no question about preoperative facts.

In the first affidavit, he said the story is false and I never told any such story.

All I said was, I told the facts and I related this -- a phone call that Mr. Parr got at the same time from this FBI agent.

And all I told was the -- we're trying to fix a date and a time of -- and things that occurred.

And somebody else may -- must've put the things together and got this rumor started.

Now, in the second affidavit, Mr. -- Mr. Heras said, the -- it is not true that any such money was conveyed to the FBI agent, which he'd said in the first affidavit.

But in the second affidavit, he said, “Yes, I did put out that false rumor.”

Now, let me give you the circumstances of that which were known to us before this grand jury and which he testified to on trial.

Heras, on trial said, “The first affidavit is true.

I just recited the -- the facts in fixing the time and I've never spread and originated this rumor, but putting two and two together to make four here, which was false.”

Justice Hugo L. Black: What volume are those statements, does the (Voice Overlap) --

Mr. Wilkey: Those two statements are --

Justice Hugo L. Black: (Voice Overlap) get it.

Mr. Wilkey: I had it here just a moment, Mr. (Inaudible) --

Justice Hugo L. Black: Maybe someone else could get it while you proceed.

I don't want you to take your time for (Voice Overlap) --

Mr. Wilkey: Well, they are in the record and I'll get first to you later.

Justice Hugo L. Black: Somewhat (Voice Overlap) --

Chief Justice Earl Warren: Well, Mr. Wilkey, when he was on the stand then, he didn't stand on his second affidavit.

He repudiated the second affidavit and went back to the first affidavit and reaffirmed the truth of that, is that correct?

Mr. Wilkey: Exactly, which he had told us and which we knew or believed to be true by facts not known to other people at the time for those affidavits.

Chief Justice Earl Warren: Did he testify that way for a grand jury?

Mr. Wilkey: He was not asked about that I believe.

I don't know why it would've been because this, you see, did not relate in any way, shape, or form to any allegation in this indictment.

It was -- no relation whatever to this indictment.

The only connection with this indictment was it mentioned the name of the petitioner, Parr, and that's all.

And the trial judge examined these two and said that there was no relevancy to the Diego Heras' trial testimony, whatever in these two.

But he did admit it for the consideration of the jury as bearing on his credibility and that was all for impeachment purposes and it was before the jury.

Now --

Chief Justice Earl Warren: So, he twice repudiated his testimony though, in his second affidavit, he repudiated the first affidavit --

Mr. Wilkey: He -- he repudiated part of the first.

Chief Justice Earl Warren: -- and -- and on the -- on his testimony at the trial, he repudiated the second affidavit?

Mr. Wilkey: He went back to the first, Mr. Justice.

Chief Justice Earl Warren: Well, isn't that t a repudiation?

Mr. Wilkey: Yes, it is.

Chief Justice Earl Warren: Well, that's all I ask.

Mr. Wilkey: He said that was the truth of the matter.

Now, let me give you the circumstances which are in the record under -- under which he made these affidavits, each of them, they are made two days apart.

The one on April the 9th, 1953, was made while he was in the hospital at Galveston, being treated for nervous disorder, upset stomach, et cetera.

He was treated with -- he testified with injections of something to calm his nerves and to -- he was fed liquids and he was in a state of a virtual nervous breakdown and nervous exhaustion.

He then -- that was when the first time affidavit was taken.

He then was transported, accompanied by either his father and a nurse or maybe only his father, to 275 miles to his house in Benavides, where he was in bed and had called the doctor and then received another injection to quiet him at the time the second statement was taken.

Now, it was under those circumstances that the contradictory statements were made, all of which was brought out in the record to the jury.

And we knew the facts of that beforehand and --

Justice Charles E. Whittaker: Mr. Wilkey --

Mr. Wilkey: Yes.

Justice Charles E. Whittaker: -- can I ask you please, had both those statements been made before he testified before the grand jury in 1954, taking --

Mr. Wilkey: Yes, Your Honor.

They both had been made, they were made in April of 1953, both statements.

That was a year prior to the time I took office incidentally.

Justice Charles E. Whittaker: And you did testify before the grand jury in 1954?

Mr. Wilkey: That is correct.

Justice Charles E. Whittaker: And both the statements were maybe prior to that time and then exist as to that time?

Mr. Wilkey: That's right.

And I knew about the statements.

I was informed of them and I reported his testimony in 1954.

Justice Hugo L. Black: Why -- why was the grand jury not entitled of no -- connection with the charge against people?

One of the witnesses, chief witnesses against them, had previously sworn falsely --

Justice Charles E. Whittaker: And this --

Justice Hugo L. Black: -- against that witness -- against that defendant.

Why do you say that was not relevant?

It would seem to me that it was an alibi, but the jury considered it?

Mr. Wilkey: Well, it is relevant --

Justice Hugo L. Black: I don't believe it.

Mr. Wilkey: -- to his credibility.

But let me put this, Mr. Justice Black, we don't agree with the petitioners' contention that Heras was the vital witness to this prosecution, nor we'd agree, is the most important witness.

In fact, we say that this case could've been tried without Heras.

Justice Hugo L. Black: Well, was he an important witness?

How much evidence -- how many pages of the testimony did he give?

I understand to say some tremendous number.

Mr. Wilkey: Yes, Mr. Justice Black.

And I want to get to that.(Inaudible)

Mr. Heras gave about -- they say about 1000 pages of testimony.

My direct examination of Mr. Heras was only 107 pages, I think -- 100 -- my direct examination was 107 pages.

Justice Hugo L. Black: How long did that take?

Mr. Wilkey: And that took less than a day.

He came on the stand in the middle of an afternoon and I had three pages after lunch the following day.

And during that time, there was about 46 pages of colloquy on the meaning and import of the Jencks decision.

Justice Hugo L. Black: Well, he was a very important witness, I just (Voice Overlap) --

Mr. Wilkey: He was one --

Justice Hugo L. Black: I -- I -- I'm asking that question for this reason.

I had suppose that it was as much the duty of a prosecuting attorney to protect the defendant against bad evidence, as it was to bring out evidence against him.

Do you agree to that?

Mr. Wilkey: I certainly do.

And we --

Justice Hugo L. Black: Why was the grand jury not entitled to that evidence?

Mr. Wilkey: Well Mr. --

Justice Hugo L. Black: And this man was this person that -- drawn personally against him?

Mr. Wilkey: I don't know that the grand jury was not entitled to it.

I only feel that was not relevant.

Justice Hugo L. Black: Well, it was not relevant.

And the standpoint maybe to this particular stand, but I was just thinking about the -- I've always hold, that this much a duty of a prosecuting attorney to protect the innocent as was to convict the guilty.

Mr. Wilkey: Absolutely.

And there was no --

Justice Hugo L. Black: I don't mean to say by that innocent here, but I -- I mean introducing evidence that -- against a man from an important witness and that was known to be would -- would reflect on his credibility for this severeness.

Mr. Wilkey: We did not conceal anything about Heras' culpability in this -- that from the grand jury or from the trial jury either.

When we present --

Justice Hugo L. Black: (Voice Overlap) I just understood you -- I thought I understood you to say, you knew at the time you brought it before the grand jury that he had made these false statements against one of these defendants.

And if you did not think that was relevant for you to put in before the grand jury.

Mr. Wilkey: I could've put it in.

I could've told the grand jury about that.

That -- but the things I -- I suppose that I have no independent recollection now, the exact questions that were asked and so on.

But the things that we presented to the grand jury were concerning this case and we also presented the derogatory information on the witness, Diego Heras.

Now, I want to make that clear that we did not paint this witness as being in himself of unimpeachable veracity and I so stated in the record on the stand when the opposing counsel put me on the stand and asked me about vouching for the witnesses and so on.

And I said, in effect, that we had to take them as they were and that I told the jury an argument that we had labelled this man as a coconspirator.

He is labelled in the indictment as a coconspirator.

He is labelled as a participant in these offenses up until July of 1951, which he was.

And the -- no item or material proof that we offer before the grand jury or before the trial court was not completely supported by other witnesses, other testimony, and best of all the documentary proof with the proven signatures of most of the defendants thereon.

Chief Justice Earl Warren: Mr. Wilkey, at the time that he testified before the grand jury, did you have any understanding with him that if he did testify, he would not be prosecuted?

Mr. Wilkey: Absolutely not.

At no time and if --

Chief Justice Earl Warren: The -- then was there any explanation to the grand jury or any suggestion to the grand jury that he be not indicted?

Mr. Wilkey: The indictment which we eventually drew and presented to the grand jury labelled Heras and the witness -- not a witness, she wasn't called as witness, before this trial, she may have been the jury.

A jury may feel as coconspirators.

That was submitted for the grand jury's consideration and was returned.

Now --

Chief Justice Earl Warren: The grand jury declined to indict Heras, is that what you mean?

Mr. Wilkey: Yes.

If they had -- if they had said they wanted to indict Heras, we would have done so.

Chief Justice Earl Warren: Yes.

Now, did the --

Mr. Wilkey: The only --

Chief Justice Earl Warren: -- did the grand jury know -- did the grand jury know that he had made these false affidavits before that?

Mr. Wilkey: These two --

Chief Justice Earl Warren: Yes.

Mr. Wilkey: -- their FBI statements?

Chief Justice Earl Warren: The two we've been talking about.

Mr. Wilkey: I don't think they did.

Chief Justice Earl Warren: Alright, now, when he testified in the grand jury, you say he testified the same as he testified in court.

Now, if that -- if that is true, why wouldn't you call the attention of the grand jury to the fact that he was repudiated -- he had first repudiated one affidavit and was at that particular time repudiating the second, if you wanted the grand jury to rely on -- on his testimony to indict these other people?

Mr. Wilkey: Mr. Chief Justice, I -- I can only say in reconstructing, while I think was my conduct there that I simply did not go into these two statements because they weren't relevant to any of the matters there being concerned.

We did go into the fact and spread on the books fully that Heras had signed these fictitious checks that he taken them to the bank that he had participated returning the proceeds to Parr.

He had signed other fictitious checks.

In other words, the -- the jury knew all about Heras' conduct here.

And that if the matters of these two conflicting statements were not something that was before the jury for consideration for an indictment.

Chief Justice Earl Warren: Did you see any reason why he should not be indicted when the others were?

Mr. Wilkey: Yes, for a good reason.

Chief Justice Earl Warren: What -- what was the reason?

Mr. Wilkey: Statute of limitations.

Chief Justice Earl Warren: On everything he had done?

Mr. Wilkey: If you'll -- our testimony of -- the testimony of Heras is set forth in the record.Heras' participation in the fraudulent scheme ended July 12th, 1951, when the books and all were moved from Parr's office back to Benavides.

Every check in evidence and we've gotten -- we've got a huge batch of checks from the microfilm of another bank, besides the Parr banks, which shows who signed all of the checks.

And Heras testified he never signed a check after July and all these checks in evidence bear him out.

He didn't sign any of these fictitious checks after July.

He was cut off from the confidence of the participants in this scheme.

The direction and control of it was taken over in Benavides by the two people, Chapa and Carrillo.

The bank -- we don't have to rely on just Heras and the checks for that either.

We have the eyeball testimony of four bank tellers in Parr's own bank, as to what went on there.

Their testimony is that Heras did not come in with these checks.

We have able to fix the date as being definitely November the 1st, 1951, and there is no check after June, so we have no proof and all the evidence is he had no participation in the scheme after July 12, 1951.

Chief Justice Earl Warren: But you did name him in the indictment as one of the conspirators.

Mr. Wilkey: That's right, for the period of time he was in the conspiracy.

Chief Justice Earl Warren: Did you -- did you distinguish between the time he was in and -- and the time his is not --

Mr. Wilkey: We --

Chief Justice Earl Warren: -- in the indictment?

Mr. Wilkey: We certainly did, before the jury in the (Voice Overlap) ---

Chief Justice Earl Warren: Well, I mean in the indictment.

Mr. Wilkey: I don't -- I don't know how we would've done that.

The various compensators were -- not all of them were in the conspiracy for the entire time.

It would -- but that was a matter a proof at the trial, we didn't distinguish any of them at the indict -- in the indictment, Mr. Chief Justice.

Chief Justice Earl Warren: Well, I suppose you alleged that he was a conspirator between such and such dates, the same dates that you -- that you -- you alleged the defendants were in a conspiracy, did you not?

Mr. Wilkey: We alleged that the conspiracy existed from a certain date until February 1954.

Chief Justice Earl Warren: Yes.

And that he was member of it?

Mr. Wilkey: And we -- yes.

Mr. Wilkey: And we've alleged that various people were members of that conspiracy.

Justice Felix Frankfurter: Was your initial date -- would your initial date antedate the statute of limitation?

Mr. Wilkey: Yes, Mr. Justice Frankfurter.

And the testimony of errors, as the fraudulent scheme, was admitted only to show the origin of the scheme.

And the jury was so instructed and the testimony was so limited at the trial.

Now, of course, Mr. Chief Justice, in addition to the fact that he was barred in the statute of limitation on March the 6th, 1956, when the indictment was returned, in any conspiracy, you have to take -- frequently have to some of the witnesses, some of the conspirators and use them of -- as witnesses, if they are willing.

Now, Heras was willing to tell all he knew about this, and he did, he testified freely before two grand juries.

Chief Justice Earl Warren: Well, I understood you to say a few moments ago that you prepared the indictment with Heras in it, but the grand jury did not indict and they -- they returned (Voice Overlap) --

Mr. Wilkey: Oh, no -- no, Mr. Chief Justice.

Chief Justice Earl Warren: -- if I'm wrong in that?

Mr. Wilkey: Mr. Chief Justice, you misunderstood me --

Chief Justice Earl Warren: I -- I'm sorry.

Mr. Wilkey: And I wouldn't mislead you for the world.

Chief Justice Earl Warren: I'm sorry.

Mr. Wilkey: You asked me if I made any suggestion to the grand jury that they not indict Heras.

Chief Justice Earl Warren: Yes.

Mr. Wilkey: I said in answer to -- to that, that we prepared the indictment which named him a coconspirator, but did not name him as a defendant.

That is only suggestion that I can recall and that was my answer to your question.

And that was an indication, of course, to the grand jury that we wanted to use Heras as a witness, which we did.

Chief Justice Earl Warren: And they used him as a witness.

Mr. Wilkey: Oh, yes.

Oh, yes, absolutely.

Chief Justice Earl Warren: Alright.

Mr. Wilkey: Now, I --

Justice Felix Frankfurter: Is that part of the grand -- Mr. Wilkey, is that part of grand jury for this -- for as your statement that I might call your adviser instruction, your legal statement to the grand jury as to who is indicted and who is not for their -- for their consideration.

Is that transcribed?

Is that in the minutes?

Mr. Wilkey: No, Mr Justice Frankfurter.

It's not, but I have no hesitancy in saying that --

Justice Felix Frankfurter: I'm not touching the word --

Mr. Wilkey: Yes.

Oh, yes.

I have no hesitancy in saying that after we had heard all of the evidence and I will point out that while Mr. Fortas wants to draw some adverse conclusion from our reserving Heras, he's appearing on the last day, my conclusion would be that the jury had all of the evidence about Heras as well the other conspirators before they heard him and we're thus free to ask him any questions they want with all the facts before them.

I have no hesitancy in saying that after all of the evidence have been brought before this investigative grand jury, we, attorneys -- they hadn't analyze it and decided which in our judgement a -- a prosecutable case was there to be made.

Justice Felix Frankfurter: You mean in the privacy of your office you analyzed --

Mr. Wilkey: Yes, yes.

Justice Felix Frankfurter: Did you then make some kind of analysis or summary of what the evidence -- what prosecutable offenses were made out by the evidence, what were not to the grand the jury?

Mr. Wilkey: I have no recollection, sir.

In some cases, it's -- I'm -- I'm speaking generally not of this case.

Justice Felix Frankfurter: Yes.

Mr. Wilkey: In some cases, I -- I know I've have done that in other cases, the matter is clear, the indictment is laid before them and that's it.

Now, in -- in this case, we might have.

I have no recollection, nowhere one or another, or if anything like that was said, what was said.

Justice Felix Frankfurter: You happen to know what -- what was your practice, if you had a practice of having youre statements to the grand jury in summary or explanation of what the evidence disclosed or manifest, was that taken down by a stenographer?

Mr. Wilkey: No, I don't recall it ever being done and --

Chief Justice Earl Warren: Did Heras adjure the conspiracy or did -- or did you just not have enough -- have recent acts on his part?

Mr. Wilkey: Well, in all frankness, I don't think that Heras have adjured the conspiracy.I think in July 1951, the conspirators adjured him.

And in December 1952 --

Chief Justice Earl Warren: And may -- they held that on him?

Mr. Wilkey: They -- they cut him out of anything to do with it entirely.

And in December 1952, they discharged him from employment with the School District, although for, later on, for three -- three months period, they asked -- asked him to do some specialized work in concerning city lots of Benavides, in his own office and paid him for that.

I -- but the evidence is very clear that in July of 1951, the books in records were moved, Heras was -- meant he no longer had any part -- and in his responsible part, he had it no longer, any part in the basic elements of this scheme here.

I want to say also that making a grand jury transcript is unusual in our district.

In fact, in most districts and the only reason that we made a transcript (Inaudible) was that this was a investigative grand jury, in which we were seeking information from witness which we did not have in full and therefore, we made records of it.

In the case of Heras, we had 12 or 14 statements and this grand jury transcript and we saw no reason to make another record of Heras.

And at that time, we had no idea that the Jencks decision was a year and a quarter away, or that any demand would be made for his transcript.

Whether we had any obligation to at all, that simply was not in my mind or to mind of any my assistants, or in fact, within the knowledge of our experience.

Now, I -- I want to -- I want to go over some of the things which Heras testified about and which were confirmed absolutely by the testimony of all the other witness called.

These are matters that we knew about when we put him before the jury.

As far as -- with the exception of those two, contradictory FBI statements, as far as we knew, he was reliable.

He had told the truth that we have checked out, about this case.

Now, let's see that, Heras was the one who first in -- early in 1953, after he was discharged from the School District, he made statements to state and federal investigators in -- in regard to the fictitious names on the report.

We checked that out with the postal investigators and the others, interviews with postmasters in this county.

And at trial, we put on eight post masters and three or four other witnesses who testified that these names were indeed fictitious.

And this we knew, as to the practice of cashing these checks at the bank, we didn't rely entirely on Heras for that.

We had Carl Williams, Edna Fitch, Cristine Ray and Reed Nunnally (ph) who had either dealt with Heras three of them had dealt with him and -- correction, two of them had dealt with him, the other one that seen him in there, and Mrs. Cristine Ray, who went to work November the 1st, 1951 taking Carl Williams' place, testified that she had never dealt with Heras and had never seen him in connection with this, but the fictitious checks kept coming in.

And Reed Nunnally testified that Oscar Carrillo's visits to the bank increased noticeably and -- number at that time and he went to see Donald.

Now, the scheme at the bank as revealed by this eyeball testimony of this witness was that Heras normally went to Donald and Donald went the individual teller and picked up the bundles of cash.

So that was confirmed in every way, even the incident about Heras being shortchanged $1000 in which he had, one time, dealt with Mrs. Fitch.

She made a mistake.

She was interrupted by a telephone call and she put only $3000 instead of $4000 in the envelope.

And when he saw that, he had only three packs, he came back and she found she was $1000 over and he got the extra thousand.

That was remembered by the other people, he took her a box of candy in gratitude, and as Carl Williams testified, he ate some of the candy, the whole bank knew of this.

This was no secret going on in the Parr bank desk.

Now then, as to Benson, and Benson who was a much more jolting witness to the defendants then was Heras.

Benson was the auditor.

He had handled some of these packages of money in one case.

He had gone to the bank for Parr.

In another case, he had conveyed a package from Heras to Parr, which Heras told us about.

And furthermore, Benson had made out the income tax returns, not only at Parr, but at Chapa and Carrillo.

And he knew about this extra funds coming in.

And in 1953, long after, Heras have severed any connection with the School District, Benson testified as to the $19,667 of unidentified income in Chapa's return and a $10,200 unidentified on Carrillo's return.

And there were others years prior to that in which you see the thing just building up.

Now, as to obtain your signs, Mr Heras told us that signs and I think this was after the grand jury, but it confirmed the whole thing.

Then Mr. Saenz had an account with the Hebbronville Bank and we went down there and we found there the microfilm and you see the microfilm had disappeared for this five years from the two Parr banks.

We went down to the Hebbronville and we got this photostats of checks, which cover from 1949 to 1953.

And they showed that Benson signed -- countersigned the checks until 1950.

That George Parr countersigned thereafter, with exception of the last month or two when Milligan signed.

They show that Heras signed as makers, until June of 1951, that's the last check, June 1951 and thereafter, the factitious checks to the petitioners signs, which were in eight different names deposited to his account, were signed as maker by Oscar Carrillo and Octavio Saenz, which confirmed, what Heras said -- told us as to the practice in the office of who signed the checks and who prepared them.

Now then, in addition to these checks, we had literary hundreds of documents, tax notices, receipts, deposit slips, annual reports and a great number this had the signatures of Parr, Chapa, Saenz, Oscar Carrillo, I think those four principally on them.

There are any others I don't recall.

The FBI handwriting expert analyzing this for us and we knew that the signatures of the petitioners here on this fraudulent instruments were authentic.

There -- the petitioners had actually participated with there own hand.

In every respect, as to what had gone on, as to the origin of the scheme, Heras was confirmed and furthermore, by all this evidence, we carried the scheme on during the period of -- where limitations had not run.

As I say --

Chief Justice Earl Warren: Mr. Wilkey would you mind -- would you mind telling us what the distinction is between this case and the hypothetical case that Mr. --

Mr. Wilkey: Oh, the --

Chief Justice Earl Warren: -- Fortas -- Mr. Fortas made.

Mr. Wilkey: I -- I'm glad you reminded me of that.

Chief Justice Earl Warren: I think it's important that we get --

Mr. Wilkey: It -- it is.

Chief Justice Earl Warren: -- to that for --

Mr. Wilkey: On the -- on the mail fraud.

I'm interested in the -- doctor's secretary about which you and Mr. Justice Whittaker inquired.

It's cited about three times at each brief of petitioner and I think one of the Justices in questioning, pointed out the fundamental, fallacy in it.

And it's simply is that there is no use of the mails in the execution of any fraudulent scheme.

Now here, we have a fraudulent scheme of a giant (Inaudible).

In doctor's secretary case, we don't have any scheme at all and we don't have any use of the mails to carry it out, all we have there is a simple embezzlement case.

But and I -- if you add to it, as I think was suggested by Mr. Justice Whittaker, if you add to it, the element of the secretary increasing the bill to the patient fraudulently and procreating the extra proceeds and then remitting to the doctor the legitimate one, you have a mail fraud scheme.

I think Mr. Fortas admitted that (Voice Overlap) --

Chief Justice Earl Warren: That's right.

Mr. Wilkey: Yes.

Chief Justice Earl Warren: Yes.

Mr. Wilkey: Now, we have not only that.

But we have a case where the secretary controls the legitimate expenditures of the office.

The secretary controls all of the depositing in the banks.

The doctor's secretary controls both banks where the money goes and then as in the case of Chapa, fraudulent tax receipts which never appear on the tax rolls as in the year 1953, are set out in the proceeds appropriate.

We have a classic mail fraud scheme here.

Chief Justice Earl Warren: Suppose -- suppose I -- I change his hypothetical case just a little and suppose there were two girls in that doctor's office and they said, “Well, we'll induce more people to -- to pay money into the cash by cash than by -- than by check.

So we'll have more money, a -- a larger fund to steal from and we'll steal from -- from that.” So they induced people to -- to pay in -- in cash rather by -- rather than by check.

And then the two of them exploit that -- that fund, would that change the situation in any?

Mr. Wilkey: Yes, it would.

Chief Justice Earl Warren: Now -- now, would that be mail fraud?

Mr. Wilkey: As I understand your example, Mr. Chief Justice, I don't think it -- if they -- it would be that the patient comes in the office and pays by cash.

I don't think the use of the mail is -- is there, if I beg your example right.

Chief Justice Earl Warren: Well, I -- I just changed his -- his case by saying that they induced people to put more money into the -- into the cash funds instead of paying it by check, it came through the mails.

And -- but some of the checks did come through the mails and they -- those they turned into the -- into the doctor.

But -- but the rest of it, they kept for them -- kept them for themselves, so this fraudulent scheme (Voice Overlap) --

Mr. Wilkey: I think I have your example now.

Chief Justice Earl Warren: -- will that -- will that be a mail fraud?

Mr. Wilkey: You have posed the situation in which there is a fraudulent scheme.

Chief Justice Earl Warren: That's right.

Mr. Wilkey: With no use of the mails to execute it.

Chief Justice Earl Warren: Well --

Mr. Wilkey: So there'll not be mail fraud.

Chief Justice Earl Warren: Well, then --

Mr. Wilkey: Because the -- the money coming in, it brought in the checks and the mail is not (Voice Overlap) --

Chief Justice Earl Warren: Yes.

Mr. Wilkey: -- appropriate.

It's the cash that's appropriate.

Now, if you mix the --

Chief Justice Earl Warren: Yes.

Mr. Wilkey: -- two together, you mix the two together in someway and you posit the -- all these principles of control here, which we have in this case, then you have different situation and perhaps, the mails would be used there.

Justice Felix Frankfurter: If you comingle -- if you comingle the two funds that the Chief Justice question's possible, you comingle the two funds namely, they get a lot of patients to leave their X dollar behind, but some patients they -- they bill and they get a -- an amplified fund and the funds go -- and the money that comes in through the -- through the checks in the mail, they have a full control of depositing the checks and getting them cashed on the bank.

Mr. Wilkey: I -- I don't think that that has in it the elements of a mail fraud scheme.

But in our case here, we have the complete control of the operative process of the -- all of the collections and disbursements and the distribution of the dividends to the participants in the fraudulent scheme.

Justice Felix Frankfurter: But as every -- but every piece of -- of every document that is deposited in a mail chute or a mailbox or a drop in the -- in the post office substation, would everyone of those documents innocent -- I mean such that -- the bills that was sent out for the taxes and what the taxpayer returned, the Humble Oil Company and the others, but each one of those in and of itself, in isolation, innocent?

Mr. Wilkey: No.

It -- it was and -- and I won't get to that.

In the -- in the first place, I'll point out very quickly that Counts 15 and 16 of the indictment to substantive counts, involved under anybody's theory, a classic case of mail fraud because here are the proceeds of the checks coming in through the mails, which are misappropriated by one of the conspirators and this one (Voice Overlap) --

Justice William J. Brennan: Wel, Mr. Wilkey, you said -- we said that we had here something like the doctor's secretary adding $5 to everyone of the bills, getting a check $5 more than the patient owed and then cashing the checks and then taking the $5 do -- is that this case?

Mr. Wilkey: Yes, it is.

In this respect, we have two -- where we have two instances or -- or two ways to -- to look at that, which says that this is, in effect, this case.

In the first place and this is the -- you must appreciate this to the size of the scheme and the continuous nature of it.

We have here a five-year continuous scheme.

Justice Hugo L. Black: What difference does that make --

Mr. Wilkey: That means --

Justice Hugo L. Black: (Voice Overlap) covers --

Mr. Wilkey: That means that it would've come to a grinding halt, if the mails had not been used.

Justice Hugo L. Black: You mean, if they had not sent out bill for the taxes (Voice Overlap) --

Mr. Wilkey: Absolutely.

Mr. Justice, what the petition --

Justice Hugo L. Black: But -- you based wholly on the fact that they used the mail to send out legitimate tax bill?

Mr. Wilkey: Well, they were (Voice Overlap) --

Justice Hugo L. Black: But they -- is there any evidence that -- or charge they were illegitimate tax bill?

Mr. Wilkey: Some of them were, yes.

Justice Hugo L. Black: You have that evidence in that regard?

Mr. Wilkey: Yes, in the year 1953.

Yes.

Justice Hugo L. Black: Now, what count is that and what --

Justice Felix Frankfurter: Or it has been your --

Mr. Wilkey: (Voice Overlap) --

Justice Felix Frankfurter: -- doesn't it?

Mr. Wilkey: -- the legitimate tax bills support the conspiracy count, Count 20, on which all of the petitioners were convicted.

Justice Felix Frankfurter: Is that late as in know where it happens, Mr. Wilkey?

Mr. Wilkey: I don't know.

Justice Felix Frankfurter: Doesn't it have to be?

Mr. Wilkey: Oh, it doesn't have to be spelled out as an overt acting, which proved there's an overt act in the record, Your Honor.

Justice Felix Frankfurter: No, but over the acts conceded that the mail fraud statute require overt act, the conspiracy statute does, doesn't it?

Mr. Wilkey: Yes.

Justice Felix Frankfurter: (Voice Overlap) overt act.

Now, do you not have to prove the overt act was lame?

Mr. Wilkey: We did.

And additional --

Justice Felix Frankfurter: What's that?

And so I ask, whether one of the overt acts that you laid, was this 1953 illegal or bloated tax claims.

Mr. Wilkey: Mr. Justice Frankfurter --

Justice Felix Frankfurter: (Voice Overlap) can you by evidence, to state in your conspiracy charge as being effectuated by an overt act, unless you laid the overt act?

Mr. Wilkey: Yes.

We proved the over acts which we alleged and we proved others in addition.

And they're always clearly admissible and the -- the fraudulent fictitious tax notices set out by Chapa in 1953, were admitted on the conspiracy count to support it and also as part of the general scheme on the substantive counts.

Justice Hugo L. Black: May I ask you a question to be sure that I understand.

I'm not sure that yet I do understand.

Are you saying that a county's Tax Collector, who sends out bills for taxes each year and who for five years, after that money comes in and steals it systematically, or embezzled it, can be tried for violating the mail fraud law?

Mr. Wilkey: If his business is operated essentially through the mails, yes.

Justice Hugo L. Black: But I'm talking about -- the only part of it is operated through the mails, as I asked you.

Is that the Tax Collector sends out bills I'd get them and I suppose you do, for taxes that are due?

That's all he does, that's the only way he uses the mail, but for five years he -- he continuously pilfers money that should be -- go -- go to the governing bodies, are you saying that under those circumstances, that's a violation of the mail fraud law?

Mr. Wilkey: Yes.

If the man who pilfers some money, has control of the use of the mails and the mails are used to get in the money --

Justice Hugo L. Black: That --

Mr. Wilkey: -- over a period of time, which he pilfers.

Justice Hugo L. Black: Well, I'm -- I am conceiving that the man has the right to mail tax bills.

Tax Collector has, he does it all the time and nothing wrong about it.

The bills are all 100% right.

They hold the money.

They send it in.

That's the only you see -- you'd make of the mail.

But for a period of years, he's just a little -- he's thief that steals -- in along -- during that time.

I can understand how he'd be guilty of theft, of course, embezzlement.

If your claim as I understand it and you have to depend on that that would also make him liable for violating the mail fraud statute?

Mr. Wilkey: Yes, if it was a continuous scheme, which, I think, your example poses.

Justice Hugo L. Black: I suppose a bookkeeper, one of the big department stores here, sends out bills constantly for the store, send them out each month.

They'll -- they'll pay legitimate, honest bills and that bookkeeper, during that time, is stealing from the employer, the department store.

Under your statement, he would be guilty of not merely of theft and embezzlement locally, but would also be guilty of violating the mail fraud statutes?

Mr. Wilkey: I don't think so in that (Voice Overlap) --

Justice Hugo L. Black: Why, he does it five years.

Mr. Wilkey: Because --

Justice Hugo L. Black: All the time, he's sending out the bill.

Mr. Wilkey: Because the bookkeeper is not in control of the store.

What happened here is --

Justice Hugo L. Black: Well -- well, suppose it was the manager of the store?

Mr. Wilkey: Well do you have a different case.

Justice Hugo L. Black: In other words, the manager, who sends out the bill is perfectly ligitimate, and -- through the mail -- and stealing from his company, would be guilty of violating a mail fraud statute, in addition to theft and embezzlement.

Mr. Wilkey: If he --

Justice Hugo L. Black: And that's what your case depends on here, isn't it?

Or if --

Mr. Wilkey: (Voice Overlap) no, not that entirely, by no means.

We have this situation and I want to argue this case and I perfectly -- I don't want to be -- I -- I -- if I was made Mr. Justice, I don't want to be pinned down to a narrower proof or -- or far list evidence of mail fraud than we have in this case.

Justice Hugo L. Black: Well, is there any mail -- does there any mail fraud -- any -- any use of the mail here for any purpose except to collect bills, any of that, or anything else, except to collect bills?

Mr. Wilkey: I know that was what (Voice Overlap) --

Justice Hugo L. Black: Is there any -- are there any bill -- are you claiming that there any of those bills were illegitimate bills?

Mr. Wilkey: Yes, the --

Justice Hugo L. Black: In -- in what respect?

Mr. Wilkey: The evidence shows uncontradicted, that in 1953, a whole string of taxpayers were left off the tax rolls.

And that a special (Voice Overlap)

Justice Hugo L. Black: Well, did they send them bill?

Mr. Wilkey: They certainly did.

Justice Hugo L. Black: Through the mail?

Mr. Wilkey: We have the receipts and evidence.

Justice Hugo L. Black: Through the mail?

Mr. Wilkey: Through the mail.

Justice Hugo L. Black: And you are depending on -- you say now, as I understand it that introduces to the fact although I haven't -- hadn't understood you rely -- you say that they sent out bills to people that didn't know them?

Mr. Wilkey: Oh, they owed them.

Justice Hugo L. Black: They owed them?

Mr. Wilkey: But they decidedly, have planned in advance to appropriate the proceed (Voice Overlap) --

Justice Hugo L. Black: Well, I -- I understand that.

That you did, goes on the idea that they sent out legitimate bill and they intended at that time hoped -- hoped to and did succeed in stealing money as it got in.

Mr. Wilkey: That is correct, for the -- for the major portion of the scheme here, over the five-year period.

But let me go -- let me explain what we have here, we don't have that simple scheme.

We have a situation where the money was at all times in no manner was cash or taxpayer's checks, or on deposit, in the control of the conspirators whether it was in the -- the Tax Collector's office, which was Mr. Chapa and Carrillo, Parr's banks which is Parr and Donald and it was a design, intent and premeditation, as shown to this evidence, to appropriate and split the proceeds of this over the period of five years.

And the petitioners have never answered, I point about this being a continuous -- continuous scheme and the point about control, which makes it different.

Justice Hugo L. Black: And they or any of them, been tried in a state court about theft or embezzlement (Voice Overlap) --

Mr. Wilkey: Some of them have -- some of them have.

I don't know.

Justice Hugo L. Black: What happened to those cases?

Mr. Wilkey: The convictions that I know about.

They were convictions of Parr, Donald and Chapa and they were reversed.

Justice Hugo L. Black: Then, what happened?

Mr. Wilkey: I don't know.

I -- I don't know whether the -- I don't know where they -- those -- those people have not been retried.

I don't know about any others that maybe involved.

Justice Hugo L. Black: Not been retried in the State?

Mr. Wilkey: Not been retried in the State.

And those reversals took place long after this indictment.

I want that made clear because the petitioners' brief doesn't.

But I want to make clear that's there's not 10% of the proceeds involved here, as was suggested by -- colloquy between Mr. Justice Whittaker and counsel.

The evidence shows, for example, in 1953, that the receipts from the State and taxes amounted to $790,000, that the budget of the two schools was a little over $400,000 plus six employees in that claim office at Benavides, which left an enormous amount of money for the conspirators to appropriate.

What we prove specifically, check by check, was only a small part and it is that the operation of a public mail order business which made it over a period of five years, which made this a scheme to defraud --

Justice Felix Frankfurter: What was the relation --

Mr. Wilkey: -- the mail fraud statute.

Justice Felix Frankfurter: What was the relation between the $700,000 part and the $400,000 that you've just mentioned?

What --

Mr. Wilkey: The --

Justice Felix Frankfurter: -- was the $400,000, what was that?

Mr. Wilkey: The evidence on budgetary figures showed that between Benavides and Freer, the revenues were split exactly equal and the budget in each case was almost exactly $200,000 for the two schools that made $400,000.

In addition to that, the school had to maintain the small office at Benavides which employed about six people.

Now then, in the same year, 1953, the evidence showed that the tax revenues were $650,000.

Justice Felix Frankfurter: By tax revenue, you mean, the money they got in from sending out bills?

Mr. Wilkey: Yes, plus --

Justice Felix Frankfurter: Well, you know why -- why was more money received in the $400,000 amounting to the budget of the two towns?

Mr. Wilkey: We say, because the petitioners' plan and did appropriate it to their uses and that they were operating this public business for their own benefit.

Not on school (Voice Overlap) --

Justice Felix Frankfurter: (Voice Overlap) how -- why was $700,000, why were tax bills for $700,000 sent out?

It must've been sent out in order to come in, if the budgetary requirements were only $400,000?

Mr. Wilkey: To provide the (Inaudible) for the conspirators to enjoy.

Justice Felix Frankfurter: But then, it isn't a case of sending out compulsory legally required taxes?

Mr. Wilkey: It isn't, Your Honor, because they have the option to put the rate anywhere they want it.

In 1951, they raised the rate to the legal maximum.

Justice Felix Frankfurter: So that they meant -- they manipulated the tax system in order to have revenues out of which to spoon out or to -- to spoon out moneys for their own feeding, is that right?

Mr. Wilkey: Exactly and there's had to be --

Justice Felix Frankfurter: (Voice Overlap) --

Justice Hugo L. Black: Now, where is that part?

Mr. Wilkey: -- proof of that of every tax bill that went out.

Justice William J. Brennan: What's that?

There have to be bloat in every tax bills that went out.

Mr. Wilkey: Right.

That is why we say that all of these mailings were necessarily an execution of the scheme and were in themselves, carried fraudulent misrepresentation.

Justice William J. Brennan: Are you telling us this that when they manipulated the tax bill, they immediately divided it without regard the requirements except to be sure that they got something above requirements in the way of tax receipts.

If $2.50 would've raise requirements, they fix the rate of $3, so that they get more than the requirement, is that it?

Mr. Wilkey: Exactly, only if you'll look on Government Exhibit 1 on page 137 to 138, you'll see that your exact figures are that the tax rate was raised from $1.50 for the year ending August 1950 and on Government Exhibit -- well that's the rate in -- in August 1950 and on Government Exhibit 4 and about page 132, the tax rate is now $1.75 which was the legal maximum.

Justice William J. Brennan: Well, I don't think (Voice Overlap) --

Justice Felix Frankfurter: (Voice Overlap) --

Justice William J. Brennan: Excuse me, I just want to get clearly what the Government's theory was that they didn't need the raise if the rate -- the additional 25 cents for the purpose of covering requirements --

Mr. Wilkey: Absolutely.

Justice William J. Brennan: -- that they didn't raise it for the purpose of giving in the surplus which they could steal?

Mr. Wilkey: Absolutely.

And as proof of that Mr. Justice Brennan, in the following year after these people were kicked out of the School District, in Freer, the school kids instead of having a budget of $200,000 as they'd had approximately the past few years, had a budget of $278,000 spent on them, without any change in the tax rate.

Justice Felix Frankfurter: In other words, when Mr. Black and I get our tax bills, we get bills that are fixed by law.

These people were the law?

Mr. Wilkey: Yes.

Justice Felix Frankfurter: In fixing the amount of tax bill that they sent out?

Mr. Wilkey: Yes.

And they had no way of being caught up with because all of the facets of the scheme were within their power and as Mr. Parr said to Mr. Benson, it won't happen here.

I have got control.

Justice Hugo L. Black: Now, Mr. Wilkey, you presented the -- the last two, three minutes, you presented the case which so far as I'm concerned is entirely different to the case you heretofore presented.

Where did the court charged the jury along the line that you have suggested and why is it not in your brief?

Mr. Wilkey: Mr. Justice Black, I believe that it is --

Justice Hugo L. Black: Where is it?

Mr. Wilkey: -- in our brief.

Justice Hugo L. Black: Where is it?

Where was any such question submitted to the jury on the guilt?

Mr. Wilkey: The giving the indictment, if you will, if you will refer to -- at page 12 of the record and 13, you -- you will see that the charge of the indictment in the first count in paragraph 14 --

Justice William J. Brennan: Instead (Inaudible) Mr. Wilkey, we don't have anything here at all.

Mr. Wilkey: Oh (Inaudible) a charge of the indictment was that the defendants devised and intended to devise a scheme, an artifice to defraud one -- but I'm putting in these numbers, to defraud one that Benavides Independent School District, BISD.

Two, persons obligated by the laws of the State of Texas to pay taxes to the BSID herein called the taxpayers.

That's your bloat in every bill that went out.

Three, the State of Texas, that's the 140,000 a year, in addition to the 650,000 that they got by filing the fraudulent annual reports with the State, which contained all these fraudulent checks (Inaudible).

That's the only way they found out about the checks.

Four, and the persons obligated by the laws of the State of Texas to pay taxes to the State of Texas and to obtain the money and property of the BISD and the taxpayers for themselves, their relatives, associates and supporters.

Now, those are the people who were defrauding those four categories.

Now, then (Voice Overlap) --

Justice William O. Douglas: But there nothing in there about bloating the -- the --

Mr. Wilkey: No.

Justice William O. Douglas: -- assessments, so that, you --

Mr. Wilkey: No.

Justice William O. Douglas: -- you said that was just in the cases.

Mr. Wilkey: It was the -- it's a -- it was our proof at the trial that as I've referred to the record that the assessment did go upnd --

Justice Hugo L. Black: Well, if that's the (Voice Overlap) --

Mr. Wilkey: -- the money was appropriate.

Justice Hugo L. Black: Quite a different thing from what you argued a while ago, the assessment goes up, the assessment goes up frequently.

The Tax Collector raises the assessment --

Mr. Wilkey: (Voice Overlap) --

Justice Hugo L. Black: Tax Assessor raises the assessment.

I understood you that the last to be said, that there was a certain amount of percentage of legitimate tax that these people owed.

And that the bills were sent out for that plus something over the tax as fixed by law.

Is that what you're saying?

Mr. Wilkey: There are two things said.

Not over the tax is fixed by law --

Justice Hugo L. Black: Well, are you challenging the law of Texas as unconstitutional or the way they fix the taxes?

Mr. Wilkey: By an oath.

They operated within the legal limit fixed of the -- rate of 175 -- $1.75.

Now, within that limit, they fixed the budget for the school kids and kept it at such and they fixed their receipts at such to allow this (Inaudible) for themselves.

Justice Hugo L. Black: What you're saying now, as I gather, and maybe that's the cost of this.

As I understand it, what you're saying is these people are charged with the duty of setting assessments.

And that they set it too high in order that they can collect more.

Mr. Wilkey: They set it -- we are -- we are not explaining.

Justice Hugo L. Black: Did they set it contrary to the law of Texas?

Mr. Wilkey: No.

No, no Mr. Justice Black.

Justice Hugo L. Black: Did they send out a single bill that was more than the law of Texas made legal?

Mr. Wilkey: No, because they were out of control of --

Justice Hugo L. Black: Well, I'm not talking about who had control.

The Tax Assessor and Tax Collector have control.

Are you charging that they used their power to tax in a way that you can take it here collaborative to show that they raised the tax too high in order to collect money fraudulently?

Mr. Wilkey: Our -- we do not presume to say whether the tax rate should have been lower or the school budget should have been higher, because that would be at matter of judgment, if the judgment were harnessed.

But what we are saying is that the -- the rate was fixed at the maximum permitted by law and that the budgetary expenditure for the school children was kept at a figure, which in 1953, allowed a -- a visible gap of the margin between a little over $400,000 and $790,000.

Justice Hugo L. Black: You're --

Mr. Wilkey: That's --

Justice Hugo L. Black: -- collaterally attacking -- you're collaterally attacking the tax assessment.

Maybe you can.

Mr. Wilkey: We're --

Justice Felix Frankfurter: Or just saying -- are you saying that having power to fix a rate within a statutory limit, they fixed it not from the point of view of procuring taxes, to serve the public, they fixed it with a deliberate scheme to get money, go for chance within the legal limits in order to funnel it into their pocket.

Mr. Wilkey: Absolutely, and that's our --

Justice Hugo L. Black: When we get through, when you have time, would you send us references in the record, to the charges does it show us, so that we can see that the case was tried, indictment charged that case was tried on that basis, were submitted to the jury on the basis that you're charging them with fraud and that they assessed higher than they should have.

Mr. Wilkey: Fraudulent.

Justice Hugo L. Black: And they get money for themselves.

Mr. Wilkey: Mr. Justice Black, I can tell you that we didn't request any such charge on that.

Justice Hugo L. Black: Well, we did they give any?

Mr. Wilkey: And --

Justice Hugo L. Black: Was any such thing submitted to the jury?

Mr. Wilkey: Not in -- in that -- in that language, but we --

Justice Hugo L. Black: I don't care what language --

Mr. Wilkey: Will not -- not on that -- not the way you put it there, but the fact --

Justice Hugo L. Black: But, with -- will -- will you -- will you -- when they later send us the references to the record showing where the indictment charged what you've just said.

Where their evidence was submitted on that point and where the Court made that the issue on -- upon which the guilt or innocence of these defendants depended?

Mr. Wilkey: We'll be glad to send you those references, but I want to say now that we didn't take in position here or at the trial that the rate had to be so and so or that the budget for the school had to be so and so.

We simply proved that so much went for legitimate purposes and there was a huge amount that was left over and we proved they've paid them by item on checks -- totally got $190,000 on the items plus others.

And many others on the taxpayer's check, that it went to the conspirators.

Now, that was -- that was our -- our proof for the trail, but we will send you this, you must --

Justice Felix Frankfurter: You've heard what -- you've heard what Justice Black wants.

Mr. Wilkey: Yes.

Justice Felix Frankfurter: Would you keep in mind what I like to your testimony.

As I understand your case that these people having legal machinery in their hands, designed a scheme to use that legal machinery so as to produce funds out of which they could scoop illicit profits for their pocket.

Mr. Wilkey: Yes, Mr. Justice Frankfurter.

Justice Hugo L. Black: You referred to the record of that charge in the -- and so-called on that.

Justice John M. Harlan: Is your summation printed?

Is your summation to the jury printed?

Mr. Wilkey: Yes, it's in the records.

Justice John M. Harlan: Is that in the record?

Is that available here in the Court?

Mr. Wilkey: Yes.

It will be found -- in the Volumes 14 and 15 of the --

Justice John M. Harlan: (Voice Overlap)

Mr. Wilkey: -- of the printed record.

It will be the (Inaudible) counsel.

Justice William J. Brennan: How many thousand pages do we have?

Mr. Wilkey: It comes to about 5800 and something that's where the Court of Appeals opinion is printed.

Justice Potter Stewart: That's why we have (Inaudible)?

Justice Felix Frankfurter: What did it -- it say?

Justice Potter Stewart: Yes and had any of it (Voice Overlap) --

Justice John M. Harlan: I'd like to ask you one question.

I'd like to ask you one question out of curiosity, for having you here or a wide territory.

I notice in the record that you were called to the witness stand.

Mr. Wilkey: Yes, sir.

Justice John M. Harlan: What issue do you call on?

Mr. Wilkey: I was asked about several different things.

One, I recalled, being asked about how we happened to get a copy of the state grand jury transcript which we turned over to the defense.

The answer to that was that the grand jury had been held to be invalid with just a body of men having no significance in law and after that, the prosecutor furnished to exist as a statement.

And we turned those over in the part of witnesses.

As to the rest of my testimony, I --

Justice John M. Harlan: Well don't be, is it printed?

Mr. Wilkey: It's -- it's printed, it's there, yes it's there.

Chief Justice Earl Warren: Very well.

Mr. Wilkey: Mr. -- Mr. Chief Justice, I started out to ask you.

I'm going to file something in regard --

Chief Justice Earl Warren: Yes.

Mr. Wilkey: -- in the questions of Mr. Justice Black and Mr. Justice Frankfurter.

We were served with a reply brief here that in (Inaudible) 31 pages plus 41 of the exhibits.

I haven't had the chance to look at all of the exhibits, although I've read the brief.

I would appreciate leave to file of whatever an answer seems to be called for there and no questions they suggest, we should've filed an affidavit of the grand jury secretary.

We have that affidavit.

We would like to print that.

Chief Justice Earl Warren: But we don't need the whole brief and others.

Mr. Wilkey: Yes, I understand.

Chief Justice Earl Warren: We don't need the whole brief.

Mr. Wilkey: Thank you.

Chief Justice Earl Warren: Alright.

Mr. Sharpe.

Argument of T. Gilbert Sharpe

Mr. T. Gilbert Sharpe: Mr. Chief Justice, may it please the Court.

Chief Justice Earl Warren: And Mr. Sharpe, you may -- you may respond if you wish to the memorandum that counsel is going to -- to furnish for Justices Black and Frankfurter.

Justice Hugo L. Black: Would you mind -- did you try the case?

Mr. T. Gilbert Sharpe: Yes, Your Honor, I was a trial counsel.

Justice Hugo L. Black: Would it bother you to state immediately whether the issue that had just been stated here was tried out in this case?

Mr. T. Gilbert Sharpe: I was preparing to do that, Your Honor.

The Government's theory that you have just -- just heard here was not its theory in the trial court.

There is not a line in the indictment which alleges that the tax bill, since the taxpayers were inflated or were excessive or illegal.

And there is not a line of evidence in the record that would support that theory even if had been alleged.

That theory -- I've lived to this case four years and the first time I heard of it was when the opinion of the Court of Appeals has handed down last year.

It was not even urged by the Government at the trial court.

We --

Justice Hugo L. Black: No mention of it in the charge to the jury?

Mr. T. Gilbert Sharpe: No, Your Honor.

None whatsoever.

Justice Felix Frankfurter: May I rephrase what I understand to be the claim of the Government?

Mr. T. Gilbert Sharpe: Yes, sir.

Justice Felix Frankfurter: Not that the rate was excessive or bloated, but it was so fixed at such a rate that money would be forthcoming out of which, they could take what they schemed from the beginning to take.

Mr. T. Gilbert Sharpe: I understand that to be in Mr. Wilkey's contention --

Justice Felix Frankfurter: Yes.

Well, that's a very different thing --

Mr. T. Gilbert Sharpe: -- Mr. Justice Frankfurter.

Justice Felix Frankfurter: -- for things that bloated.

Mr. T. Gilbert Sharpe: Yes, sir.

We say that that was not their contention in the lower court if the record would bear us out.

The contention of the Government in the lower court was that money came in sufficient for the school needs, but was not spent for proper purposes.

And I can give you a record reference the argument of counsel is printed to Volume 14 of the record at pages 5006, 5007, were Government counsel and his submission, points out that very theory that the money came in, but was used for wrong purposes.

Justice Felix Frankfurter: Would you regard -- and if there was such a scheme to do that, if there was a designed scheme to fix the rate, held be it, it might be a legal rate to fix a rate to the end, that the school purposes maybe satisfied thereby, but also some cream maybe skimmed off and then the mail was used.

The mails were used the way they were used here, would you say that was or was not within the statute?

Mr. T. Gilbert Sharpe: Mr. Justice Frankfurter, let me answer you this way, if the indictment alleged what you have just said and the evidence supported it and showed that the amount of money raised in each fiscal school year, was so clearly excessive and beyond --

Justice Felix Frankfurter: That was not my question.

Mr. T. Gilbert Sharpe: Yes, sir.

Justice Felix Frankfurter: That was not in my question.

Mr. T. Gilbert Sharpe: Well, sir, I -- I'm trying to answer it.

Justice Felix Frankfurter: Alright.

Mr. T. Gilbert Sharpe: No, sir.

I don't think that that -- I don't -- I wouldn't be with that position.

And read -- and then say so, as that we have cited the court a case in our reply brief, Madely versus the Trustees of the Conroe School District, decided in 1939, by Court of Civil Appeals of Texas, 130 S.W. 2d 929, which clearly holds that it is not improper for a Board of Trustee to accumulate moneys at the end of the year and that case, they accumulated some $150 -- $200,000 of maintenance tax money, which the district used for construction of buildings which ordinary will be supplied by a bond issue.

So, it is not illegal for a School District to set a budget which has a number of variable factors and that one would be the percentages of collections, the others would be expenditures, I serve as a School Board Trustee for six years, in the Brownsville District.

And I know what any School Board Trustee knows that you can't set a budget with accuracy, you have some variables on it.

But under the Government's theory, if the School Board Trustee fixes a budget of lets say, were an expenditure of $10,000 is required for utilities, gas and electricity and so forth and so on, the tax bills are sent out and the money comes in, and only $5000 are used for that purpose, the other $5,000 in -- is embezzled, that would be mail fraud case.

Now, Justice -- Mr. Justice Brennan asked the question -- asked us a question a while ago that I want to address myself to.

Under Texas law, each year a Board of Trustee is required to fix a budget and the collections, that is tax collections, are based upon, one valuations fixed by a separate Board of Equalization to the rate which is fixed by the School Board.

Justice Potter Stewart: Well, I -- what I --

Mr. T. Gilbert Sharpe: Yes.

Justice Potter Stewart: -- still don't quite under -- understand about your Texas law, don't you strike a tax rate?

Mr. T. Gilbert Sharpe: Yes, sir.

Justice Potter Stewart: As the consequence of dividing the rateables into the requirements?

Mr. T. Gilbert Sharpe: Either the tax rate has to be adjusted or the valuations and usually ---

Justice Potter Stewart: Well, I understand it as a maximum --

Mr. T. Gilbert Sharpe: Yes, sir.

Justice Potter Stewart: -- tax rate of $1.75.

Mr. T. Gilbert Sharpe: Yes, sir.

Justice Potter Stewart: But assume you had rateables with requirements which dividing the latter by the former, would give you a tax rate of $1.25, well within the statutory -- the statutory limit, is that the way you arrive in a tax rate in Texas?

Mr. T. Gilbert Sharpe: In sometimes, but in exceptional cases arrived at that way.

Usually, the Board takes the evaluation submitted to it by the Board of Equalization.

The needs, in most instances, exceed the amount of money the Board is going to get anyway and applies the maximum rate to it.

That is the usual procedure.

Justice Potter Stewart: Well, this is -- this is because in order to raise as -- an amount this close as possible to the needs, you then apply the maximum tax rate?

Mr. T. Gilbert Sharpe: Yes, Your Honor.

But it is not illegal in Texas to raise money in excess of actual needs as is shown by the budget.

Now, I'd like to say that --

Justice Potter Stewart: Now, this -- this I appreciate.

In other words, you might have a -- a provision in a budget which you -- everyone knows is going to -- to result in a surplus.

Mr. T. Gilbert Sharpe: Yes.

Justice Potter Stewart: Over actual expenditures --

Mr. T. Gilbert Sharpe: Yes, sir.

Justice Potter Stewart: -- for that year.

Nevertheless, if you have such a provision in the budget, and were not now dealing with a -- a budget and valuation which will realize more than -- would require a rate higher than the maximum.

If you still have this provision in the budget for the surplus, that's reflected in the rate isn't it?

Mr. T. Gilbert Sharpe: It could be.

Yes, Your Honor.

Justice Potter Stewart: Now, in that -- in that circumstance --

Mr. T. Gilbert Sharpe: Yes.

Justice Potter Stewart: -- suppose, they fixed the provisions in the budget with the intention before they fixed it of stealing the surplus when the proceeds were -- tax proceeds were collected, is it your position that still would not be tax fraud?

Mr. T. Gilbert Sharpe: My position is one, if that was --

Justice Potter Stewart: (Voice Overlap) --

Mr. T. Gilbert Sharpe: -- alleged, and secondly, the Government shall (Voice Overlap) --

Justice Potter Stewart: Well, parting from -- apart from what was alleged?

Mr. T. Gilbert Sharpe: Yes, sir.

Justice Potter Stewart: Would that or would it not in your judgment to the mail fraud.

Mr. T. Gilbert Sharpe: It -- it could be -- it could be Your Honor.

But I would like to point out this.

We have Texas statute which requires a budget of every School District to be found annually, with the county clerk.

All of the Government had to do, in this case, was to go to the county clerk and get the school budget for each one of these years 1951, 1952, and 1953 and offered in evidence, and that it failed to do and did not explain its failure to do so.

In other words, there was not only a failure of allegation in this case, as to the budgetary need in the requirement, but there was a failure of proof and a failure to explain the reason to supply that budget.

The budget that Mr. Wilkey talks about is an oral reconstruction to number of witness.

It is not the written budget that a School District in Texas is required to make out each year.

And I would like to say this further.

That we have printed as an appendix to our brief, appendix -- our reply brief filed today.

Appendix B which shows every single one of the essential mailings that form this basis of the 19 substantive counts in this case.

Every single letter involved in the appendix and in the indictment involved a use of the mail at Houston, Texas.

Either the taking or the placing of a letter there was a theory on Government's part to the taking and placing was caused over in Benavides, by the petitioners, 250 miles away.

Each one of the exhibits there will show other the purpose.

Everyone of them was for the legitimate purpose, either of the taxpayer sending a check with a letter of transmittal, or this oil company sending its bill.

Now, I would like to challenge Mr Wilkey's statement that the statutes of limitation had ran against Diego Heras, as to any offense.

And if the Court has before, if the Members the of the Court have before them, the appendix to our brief on page 13 (a), you will see a letter which is the basis for the first count of the indictment, signed by Diego Heras dated September the 26th, 1952.

The petitioner (Inaudible) convicted on that count and the statue of limitation did not run on that count until September of 1957, after this case was tried, the last time.

Justice Hugo L. Black: When was the indictment?

Mr. T. Gilbert Sharpe: That is on page 13 (a).

Justice Hugo L. Black: I say, when was the indictment?

This letter was September 26th, 1952.

Mr. T. Gilbert Sharpe: The indictment was returned in March of 1956, Your Honor.

Mr. Heras could've been indicted on that one count that the other petitioners were convicted on up until September the 26th, 1957.

The same thing is true Count 7, which appears at page 22 (a) of the appendix.

There is a letter, dated December the 3rd, 1952, signed by Mr. Diego Heras, on the petitioner in this case, with two exceptions, were convicted on that letter and Mr. Heras could have been indicted on that letter, until December the 3rd, 1957.

Your Honor, my time is about out here and I would just like to say this, the Government has switched its theory in this case, from reliance from the letters which are described in the last numbered paragraph of each count of the indictment which was simply a legitimate use of the mails of Houston for the purpose of paying and collecting taxes to one, in which they mentioned receipts, notices, letters, properties left of the rolls and not in single count in this indictment, not one involves a piece of property which was not on the rolls.

Justice John M. Harlan: Could I put a question to you?

Mr. T. Gilbert Sharpe: Yes, sir.

Justice John M. Harlan: I haven't read this record so this is highly hypothetical.

Supposing there have been direct proof in the case that one of these defendants, the first meeting with the School District Board and said; gentlemen we got an easy way of making $40,000 a year, we have these tax receipts coming in, regularly by mail each month and the procedure are to be agree to, thus and so, and in the outlining of this scheme which described by Mr. Fortas had followed.

Would that be indictable offense under the mail fraud statute in your view?

Mr. T. Gilbert Sharpe: I'm not certainly -- certain that I followed your example completely, Mr. Justice Harlan.

Would that be before preparation on the School District budget?

Justice John M. Harlan: Yes, before or after the main difference.

Beginning of the school year that the chairman of the Board calls the group together and he said, “We're going to find way of making $40,000 a year a piece.

The assessments go out by mail, checks come in by mail, regular source of income.

We'll cash $40,000 of these fictitious checks as they come in each year -- each -- each year.

Mr. T. Gilbert Sharpe: Well, sir, my answer first, of course, is that's not their scheme.

Justice John M. Harlan: I understand that.

And my purpose -- what I had to say by saying that this is purely hypothetical, but I want to get your theory of what this mail -- mail fraud statute --

Mr. T. Gilbert Sharpe: I think --

Justice John M. Harlan: -- now, isn't -- what it doesn't.

Mr. T. Gilbert Sharpe: Yes, sir.

I think that that could be an indictable offense under mail fraud statute provided --

Justice John M. Harlan: You do?

Mr. T. Gilbert Sharpe: -- the School District budget showed that an amount clearly in excess of the district needs --

Justice John M. Harlan: No, that isn't part of my question.

Mr. T. Gilbert Sharpe: Yes, sir.

Justice John M. Harlan: You -- you --

Mr. T. Gilbert Sharpe: In standing alone, my answer would be, no, sir.

I would like to say this in conclusion, that if the Court and the Members of the Court will look carefully at the exhibits, in Appendix B, of our reply brief and considered carefully the nature and purpose of each one who those essential exhibits that I believe the conclusion would inevitably follow that the purpose of the use of the mails in this case was not to defraud and that all that the Government had shown here is a series of embezzlement disconnect with any proper use of the mail.