UNITED STATES v. MAZE
Legal provision: 18 U.S.C. 1341
Argument of Jewel S. Lafontant
Chief Justice Warren E. Burger: We will resume in United States against Maze.
Ms Jewel S. Lafontant: Mr. Chief Justice, may it please the Court.
First, I would like to develop a little more, the theory expressed yesterday afternoon that this case involves the substantial use of the mails or the use of the mails is as stated in Pereira incident to an essential part of the scheme.
It is significant to the respondent when on a cross country frolic representing himself as one Meredith to obtain goods and services, well knowing that the issuer of the card would not learn of the fraudulent scheme until the purchase invoices which within the use of business practices would be mailed from the merchant to the card issuer.
And according to the testimony, one hotel owner as a delay of two or three weeks and often longer before the merchants learned that the particular credit card is being used fraudulently.
There is no doubt from the record that this respondent used the mails in that fashion.
There’s no doubt that upon receipt of the invoices through the mails, discovery of respondent’s fraud would be uncovered.
However, if the card issuer was present with the merchant when the respondent presented the credit card, he would have been discovered immediately, and --
Chief Justice Warren E. Burger: On the other hand, if hypothetically, none of the motels or stores ever sent the vouchers in, the discovery would be indefinitely delayed would it not?
Ms Jewel S. Lafontant: That’s true.
Chief Justice Warren E. Burger: Is it your point that since this is an indispensable, that is the use of the mail, the routine process of bringing this to the notice of the credit company is an indispensable, integrated part of the whole thing and it’s --
Ms Jewel S. Lafontant: It’s inherent in the credit card system and without it he would not have been able to perpetrate this kind of fraud.
Chief Justice Warren E. Burger: Even though he didn’t -- even he though didn’t select the mail that is the right process?
Ms Jewel S. Lafontant: That’s right the fact that he selected it isn’t too important practice that has caused his activity created the cause of action which included the use of the mails which was a pertinent part, an essential part in and of credit card scheme.
And as you’ve indicated Mr. Chief Justice, the fact the mails were used delayed his detection.
Chief Justice Warren E. Burger: Did he justify in this case?
I don’t recall from the record.
Did he testify?
Ms Jewel S. Lafontant: Yes, he did testify Your Honor and he admitted the use of the credit card.
He admitted that BankAmericard belonged to Meredith and that he had taken it but he said that he had permission to use the credit card, as well as permission to use the automobile.
But with all the evidence that was adduced, the jury did not believe him and found otherwise.
In fact, Judge McCree of the Sixth Circuit said that the evidence was overwhelming.
The evidence that was submitted by the Government was overwhelming to show that this was a fraud and that he actually did not have permission to use the credit card.
Now, this case --
Justice Potter Stewart: Who ultimately was the victim of the fraud?
Who was defrauded?
I suppose these innkeepers and tradesmen were paid, weren’t they?
Ms Jewel S. Lafontant: I would assume that they were paid.
Justice Potter Stewart: Did they suffer an ultimate loss?
Ms Jewel S. Lafontant: No, I believe the ultimate loss would have been with the Citizens National Bank in Louisville, Kentucky who issued the card.
The merchants initially were out of their merchandise but the BankAmericard has to reimbursed them.
So, the ultimate true victim would have been the card issuer who does not get paid because even the cardholder is only obligated up to $50 and in some instances it’s not bad if he has dutifully notified the card issuer that his card has been stolen.
Justice Potter Stewart: So --
Ms Jewel S. Lafontant: In this case, he didn’t do that.
Justice Potter Stewart: So the loss was suffered by the Louisville Bank.
Ms Jewel S. Lafontant: Certainly.
Yes, Your Honor.
Justice Potter Stewart: Although the victim of the fraud -- victims of the fraud were the four people covered by these four counts innkeepers and others, who were through misrepresentation caused apart with their rooms or their services.
Ms Jewel S. Lafontant: That’s correct Mr. Justice --
Justice Potter Stewart: And that there was no -- the fraud was perpetrated therefore against the tradesman and innkeepers, wasn’t it?
Ms Jewel S. Lafontant: That’s true.
Justice Potter Stewart: And the loss of the Louisville Bank was hardly -- the Louisville Bank was not defrauded, was it because no misrepresentations were made to it?
Ms Jewel S. Lafontant: Well, I interpret this fraudulent scheme as beginning with the idea of perpetrating a fraudulent scheme and initially, the innkeepers were defrauded.
All the other things were steps in following that including a cardholder taking --
Justice Potter Stewart: Taking the card in the first place?
Ms Jewel S. Lafontant: Taking the cards from him and misrepresentation in the first place.
Justice Potter Stewart: In the first place but the --
Ms Jewel S. Lafontant: The cardholder himself was not actually defrauded but was all part of one fraudulent scheme.
Justice Potter Stewart: The fraud, the actual misrepresentation was made to the innkeepers.
Ms Jewel S. Lafontant: Certainly.
Justice Potter Stewart: And with respect to the first count at least, that fraud would have been wholly effective with or without any use of the mails, wouldn't it because as soon as the person walked --
Ms Jewel S. Lafontant: That’s true, Your Honor.
Justice Potter Stewart: -- as soon as this man walked out of the motel --
Ms Jewel S. Lafontant: He had defrauded --
Justice Potter Stewart: -- had he defrauded that innkeeper and therefore no use of the mails was involved or at all at that point, was it?
Ms Jewel S. Lafontant: Up to that point, that’s right.
Justice Potter Stewart: Now, your point is that he perhaps could not have continued to commit the other three offenses --
Ms Jewel S. Lafontant: Without having --
Justice Potter Stewart: With the exception of the delay occasion by the delay in the mails and incidentally your argument is not a very good advertisement for the Post Office Department.
Ms Jewel S. Lafontant: [Laughter Attempt] I think, Mr. Justice Rehnquist will agree with that.
Justice Potter Stewart: Since you emphasize the great delay.
But as to anyone of these counts, the fraud could have been complete without any use of the mail at all, is that right, certainly, as to the first count?
Ms Jewel S. Lafontant: Yes, especially as to the first count if he turned in the card and got the credit --
Justice Potter Stewart: Showed him the card and signed it whatever you do and so the bill was paid.
Ms Jewel S. Lafontant: And there was no use of the mails.
It would have ended right there.
Justice Potter Stewart: Ended right then and there without any use of the mail.
Ms Jewel S. Lafontant: Right.
But that is not our case in that --
Justice Potter Stewart: Well, your case -- but these are four separate counts.
If it had been one count and you could have said at one count or covering this long, this fairly extended frolic, as you call it, through interstate journey, and your argument were that he could not have continued his fraudulent, has continued his defrauding of these innkeepers except by the delay occasioned by the mails, that would be one thing but each one of these is a separate count.
Ms Jewel S. Lafontant: Well, I would be willing to even go further --
Justice Potter Stewart: And this was (Voice Overlap) to any one count the fraud was complete, was it not when the innkeeper extended the credit?
Ms Jewel S. Lafontant: If the use of the mails were not involved I would agree with that.
But if the use of the mails were involved even with the one transaction, I would go so far as to say that it would be violative of the mail fraud statute but that’s not our case.
Our argument here too is although there are four separate counts, we consider this as one unitary scheme developed from all of the evidence that was --
Justice Potter Stewart: But you indicted as well up to four separate defenses?
Ms Jewel S. Lafontant: Yes.
Justice Potter Stewart: But did he get one -- did he get apparent --
Ms Jewel S. Lafontant: Yes, five years each.
Chief Justice Warren E. Burger: Now going back to the hypothetical -- going back to the hypothetical I put to you, if for one reason or another the tradesman had not sent the vouchers into the bank, then the bank could never have been defrauded, could it, unless they made personal delivery by some other method than the mail?
Ms Jewel S. Lafontant: Hand-delivery.
I agree with you.
Right, that if the --
Chief Justice Warren E. Burger: So that the mail was an indispensable part of the fraud on the Louisville Bank, that is your point, is it?
Ms Jewel S. Lafontant: That’s correct.
Justice Lewis F. Powell: Mrs. Lafontant --
Ms Jewel S. Lafontant: Yes, Mr. Justice Powell?
Justice Lewis F. Powell: Do you think the bank, as the ultimate loser here could have brought a civil action against the party who perpetrated the fraud?
The bank was the only body that did lose money in this transaction.
Ms Jewel S. Lafontant: Yes, I would say that he could have brought -- the bank could have brought a civil action against Maze, the respondent here.
Justice Lewis F. Powell: The bank that pays a forgery or the bank which is a victim of forgery may bring a civil action against the party who commits a forgery here.
Ms Jewel S. Lafontant: That’s right and I think that this is an analogous situation.
I believe that the bank could have brought a civil action against the respondent.
Justice Lewis F. Powell: It may have been a total effort --
Ms Jewel S. Lafontant: In fact, it may have been -- it would have been a few left for them, I’m afraid, because he -- one reason he was living with Meredith in the first instance was that he had no job and suppose he was looking for employment.
But the answer to your question is very definitely the bank could have brought a civil action against him.
This case --
Unknown Speaker: I gather, Mrs. Lafontant, that this new 70 legislation and the Truth in Lending Act --
Ms Jewel S. Lafontant: Yes.
Unknown Speaker: -- that makes crime of fraudulent use of credit cards but that applies only where the amount involved was over $5,000?
Ms Jewel S. Lafontant: That’s right.
In the 1970 Amendment, the law states that credit card, the misuse or unauthorized use of credit cards in excess of $5,000 is punishable.
Unknown Speaker: Well, I noticed in your footnote at page 37 of your brief, you suggest that as a matter of policy, just as it has been following something like this, that doesn’t include the $5,000.
Ms Jewel S. Lafontant: No, and -- no, it doesn’t.
It’s just that the Department of Justice in many of these cases has not prosecuted under the mail fraud statute as such but even where they do it has to be one of interstate commerce as this case.
Unknown Speaker: You say important credit frauds.
The policy prosecutes under the mail statute only important.
Ms Jewel S. Lafontant: Well, I don’t know the real interpretation of that but I would interpret important as an ongoing scheme more than one little act of a felon that might go and forge --
Unknown Speaker: But in any event, I gather that it’s not the policy, so will I only in the Truth in Lending Act of these cases?
Ms Jewel S. Lafontant: No, not at all and of course it’s been well-settled that one act can violate two statutes and these statutes are not conflicting in any way.
Justice Byron R. White: What was the necessity for the new statute?
If this statute governed, why did you need some more federal presence in that?
Ms Jewel S. Lafontant: From reading the congressional record, Mr. Justice White, I gather that because as credit card business had just mushroomed so quickly and banks were sending cards out all over the country even without people requesting them and that there was beginning to be such a problem.
The Congress addressed itself to the problem to make sure that anyone who misused a card would be punished.
They made it for $5,000.
I think Senator Proxmire had said that he talked with the Justice Department and they had suggested using the figure $5,000 because it would be very expensive to oversee all of the credit card cases under this section.
It doesn’t rule out the mail fraud section because you could be guilty of the 1970 Amendment Act and also mail fraud if it exceeded $5,000.
But the people under $5,000, we contend, are still covered by mail fraud because even though they passed this new law, there’s nothing in conflict.
There’s no talk of repealing the earlier law and I don’t’ think we can repeal the law by inference or implication or what we think went on in the minds of the lawmakers at that time.
Justice William H. Rehnquist: You could have some coverage under the Truth in Lending section where you didn’t have it under the mail fraud section too, couldn’t you be because all the Truth in Lending section requires is affecting interstate commerce?
Ms Jewel S. Lafontant: Yes, that’s true and then just the unauthorized use is efficient.
So it’s broader in the sense although it’s limited because of the $5,000 figure.
Unknown Speaker: Do you think the new Act was prompted at all by decisions such as the one in here in this case?
Ms Jewel S. Lafontant: No, I don’t.
All I can say is there’s nothing in the congressional record to indicate that they knew that there are any cases thought.
We’ve had at least 13 cases involving the mail fraud statute, most of them before 1970.
So that they should have been aware of it but there was no mention of it and the --
Unknown Speaker: And were those cases where the mail fraud statute was set to cover the transaction?
Ms Jewel S. Lafontant: Yes.
We have them in six of the jurisdictions, the second, third, fourth, fifth, seventh, and ninth.
All say that the mail fraud scheme embraces the credit card.
I mean the mail fraud statute embraces the credit card scheme.
The last case was -- it just came down October 17th of 73 in Osher in the Second Circuit which went along with the majority view.
I see that my time is up.
Chief Justice Warren E. Burger: Very well.
Argument of William T. Warner
Mr. William T. Warner: Mr. Chief Justice, may it please the Court.
I want to respond directly to several points and contentions raised by Mrs. Lafontant, but with the Court’s indulgence I would like to do within the context of presenting two major considerations which I feel are important and are before the Court this morning in this case.
Now the first is the, what we consider to be other failure of the Government’s proof upon the issue of knowing use of the mails including the so called delay issue.
The second point is the reasonableness, propriety, and or the necessity of extending federal criminal jurisdiction to this case and other cases similar to it.
Now, I think it should be pointed out --
Chief Justice Warren E. Burger: Well, would it not be true, Mr. Warner, that if you left this local prosecution, there would be prosecutions in four states or three states, is it?
Mr. William T. Warner: It’s possible.
I think in this case --
Chief Justice Warren E. Burger: Well, there were, assuming that the fact proof is the same here, it would be potentially one suit with respect to each act of defrauding was it alleged in the indictment, am I correct?
Mr. William T. Warner: In this case, Mr. Chief Justice, I submit that it would to the extent that as Mrs. Lafontant pointed out the ultimate loser in terms of who ended up with the paying the bill in this case was the Citizens Fidelity Bank in Louisville, Kentucky.
They took the responsibility.
They had to pay these invoices.
Maze was caught in Kentucky.
He was caught 30 miles from Louisville and presumably as we cover in our brief and as a matter of record, the Kentucky statutes are more than adequate to cover every aspect of the so called scheme from the misappropriation or theft to the credit card right on through to the defrauding of the bank.
Now, the Sixth Circuit Court of Appeals opinion in this case, I think should be pointed out was not as broadly drawn as the Government contends.
It said that a very carefully drawn opinion and it said essentially that the Government did not prove in this case by the evidence of record that Maze could have foreseen or knew that mails would be used or that the mails were inescapably direct incident between the defrauding of the innkeepers and the defrauding of the bank.
Now, I think it’s significant to --
Chief Justice Warren E. Burger: How else, Mr. Warner, would the vouchers reach the bank in Louisville in the normal course of credit transaction?
Mr. William T. Warner: Well sir, in this case, there were four vendors who testified.
Two stated that they customarily used them in the mails.
They dropped them in the mails and they were sent in.
One said -- testified that they went through bank channels, that was the extent of this testimony and one vendor I believe was indefinite or stated he didn’t know.
So the proof was not --
Chief Justice Warren E. Burger: Would the banks not use the mail?
Mr. William T. Warner: Well, this is a question in this case that some of the Circuits have raised with respect to charging a defendant such as Maze with a detailed knowledge of the very complex and intricate commercial scheme.
I assume that the mails were used.
But there may be other ways.
I don’t know how the banks transmit matters of this type and maybe like they do checks through the mail.
Now, Mr. Chief Justice, in response on this proof issue, I think it’s significant in response partially to a question that you addressed to Mrs. Lafontant.
Maze did testify in this case.
In other way testified, in his own behalf, but he gave a statement to the Postal Inspector.
Now, neither the Postal Inspectors or the Assistant United States Attorney who tried the case addressed one single question to Maze on the knowing use of the mails or did he know or did he contemplate or could you know.
In order the Government introduced any other witness as on this issue as to how the mails are necessary incident of this type of fraud.
Now, also, I want to point out that at this point, that the Government contends that there are six circuits which support this so called per se doctrine that the fraudulent use of a credit card is per se the use of the mails.
Now, if my reading of the cases does not support this view, there are at least two Circuits, the Fifth certainly in the Adams case which was the fundamental case on the per se doctrine supports this view.
The Seventh Circuit does and perhaps, I am sorry, the Second Circuit in the Kellerman series of cases and most recently the Third Circuit in the Ciotti case.
Now, the other cases involved varying kinds of fraud. And as the Eighth Circuit Court of Appeals in the Isaac’s case in 1968 that the forms of fraud which are possible under the mail fraud statute are multifarious as human ingenuity can device, and I think that this should be kept in mind.
Now, the Government case on the knowing use of the mails issue, we submit is built on a series of presuppositions and assumptions.
Now, it’s long been the rule under our system of jurisprudence that we don’t convict people upon presuppositions and assumptions, and that this as were partially at least where the Government case failed.
Now, as I stated earlier in response to Chief Justice’s question, the trouble with the per se doctrine, that is the doctrine that the fraudulent presentation and/or use of the credit card per se involves the mail is that this imposes on the defendant a detailed knowledge of a very complex commercial mechanism.
And again, there is no proof in this record in this case.
Now, the Sixth Circuit in this case stated specifically that they were not holding that credit card abuse could never constitute mail fraud.
They stated in this case, in this case that the Government’s proof had failed.
Now, with regard to the alleged scheme, I think the facts are significant here.
The card was misappropriated stolen on April 10, 1971.
Now, Maze was arrested and in jail on May 9, 1971.
Now, there was no extensive long range scheme such as the one in the Chason case which is the Second Circuit case involving a man who obtained a credit card or series of credit cards and was engaged in procuring airline tickets or in the Ciotti case, Kellerman where you had long range extensive schemes where one credit card after another was used.
Now, also, the other cases that upheld use of the mails as part of the or as covered under mail fraud statute have involved other types of people, businessmen who submitted fraudulent statements for the purpose of getting credit.
The Pereira case, a very sophisticated person who as the Court knows had had frauded a widow over a long period of time.
Now, it is possible.
Now, I want to point out to the Court that I am not saying or arguing this morning that Maze didn’t know that the mails would be used.
The point is that the Government didn’t prove it.
Now, as long as we’re dealing as the Government is in presuppositions and assumptions, I think there are some other assumptions that could just as recently be made.
That Maze presumably could have counted on.
One, Mr. Justice Rehnquist, I think alluded to yesterday and that is the Chief Justice, the fact that the vendors themselves might for some reason delay a week or ten days sending in their invoices.
It’s possible that Maze could have known and counted on the fact that credit card issuer such as the banks customarily collects statements over a 30-day period.
Now, Maze first went to California, that invoice was sent in.
The bank didn’t bill him Meredith right away.
They waited until the end of the month, collected all his invoices, and sent them out.
Another presupposition which could be indulged in this case is that Maze could have counted on the fact of a possible breakdown in the Citizens Fidelity Banks lost card or stolen card procedure.
Obviously, it may take ten days to two weeks for the vendors themselves to be notified and in this case, one vendor did testify that it took three weeks.
Chief Justice Warren E. Burger: Your challenged to the Government’s position is, I take it, that the per se rule approach impinges on the presumptions of innocence by creating a presumption of some kind.
Mr. William T. Warner: Yes, sir that’s --
Chief Justice Warren E. Burger: Now, what if the courts took a different attack and this is, I just want to explore it with you --
Mr. William T. Warner: Yes, sir.
Chief Justice Warren E. Burger: You’re familiar with the rule that possession of recently stolen property gives rise to an inference which the jury may, if it wishes, draw from the totality of the evidence that he knew it was stolen.
That’s a common law type of development --
Mr. William T. Warner: Yes, sir.
Chief Justice Warren E. Burger: -- would it be unreasonable for the courts do you think instead of a per se rule to develop the rule that the possession and use of the stolen credit card creates a basis for inference of one comparable to that in the recently stolen property setting?
Mr. William T. Warner: I think it would be.
I respectfully submit that it would be unreasonable Mr. Chief Justice and I would point in that regard, dealing with such a presumption to the recent case of Rewis versus the United States, a 1971 case, involving the Travel Act.
And there, as the Court recalls, a gambler or a person running a gambling establishment in Florida just over the Georgia land was charged with a violation of the Travel Act and the basis of that prosecution was that he could reasonably foresee that people would travel interstate from Georgia to patronize his gambling establishment.
And the Court struck down that presumption and raised an interesting point that I think may be applicable here.
They stated that this so called foreseeability doctrine which is present in the Maze case is very troublesome when it applies to the Acts of others.
Now, in the -- with regard to possession of recently stolen property, there is the man with the property, he’s got it in his hands.
Now in the Rewis case, as the Court said, I think correctly in that case, that the person who is running that establishment --
Chief Justice Warren E. Burger: But the evidence in this case shows the possession of a recently stolen credit card and the evidence also shows the fraudulent use of it, you’d agree up to that?
Mr. William T. Warner: Yes, sir.
Chief Justice Warren E. Burger: And you say it would be unreasonable for a common law type of rule saying from at that point, the unexplained -- the unexplained situation would give rise to an inference?
I’m not talking about a presumption now.
Mr. William T. Warner: An inference, yes, sir.
Chief Justice Warren E. Burger: An inference that jury might draw if it wished?
Mr. William T. Warner: I think Your Honor, on the -- on the presentation of some evidence to the jury, there’s some proof as to how this could happen.
Chief Justice Warren E. Burger: Such a rule that I am hypothesizing would not -- would not get the Government’s home free by any means --
Mr. William T. Warner: Right.
Chief Justice Warren E. Burger: -- it would mean that there would have to be an instruction along this line.
Mr. William T. Warner: Well, I feel personally and I would submit to the Court that a holding or a doctrine which went the -- totally the other way from the per se doctrine in credit card cases, I think would be inappropriate and I think it’s got to be taken on a case-by-case basis.
And what we are in effect attacking here today is this per se doctrine.
I have one other point sir.
That is that it may not only be unreasonable, but I think in view of the existing state statute since it's a jurisdictional problem, which I want to get to shortly, that it may be unnecessary.
Now, there’s another problem again responding to your question sir.
I think that there is a flaw in logic here somewhere.
The Government says that because the defendant in this case, Maze intended the fraud that which was clearly a criminal act, and the jury so found that is not contested, but because he intended the criminal act, therefore, he intended an entirely separate criminal act which is the use of the mail to defraud.
And in my view, and I respectfully submit to the Court, the two just don’t connect.
Now, the second point that maybe and certainly is we feel applicable here is what we consider to be an unwarranted, unnecessary extension of federal criminal jurisdiction.
Now, it’s an elemental principle that federal criminal jurisdiction can be conferred only by express congressional grant.
Now, this principle does not and we do not argue here this morning, prevent the courts or the Justice Department in any way from a reasonable construction of a criminal statute, but in this case, it’s unnecessary and I’d like to outline why.
Now, in two recent cases, one I have already mentioned, the Rewis case and also in the case of the United States versus Bass which was also a 1971 case, the Court enunciated certain policies.
Now, I don’t submit that these cases are analogous to the Maze case because both of those cases involved a single statute.
Here as Mr. Justice Brennan has pointed out there are in effect two statutes that we are dealing with, but the Court there, in those cases stated that federal jurisdiction should not be unnecessarily injected in the areas which would affect this sensitive state federal balance.
Now, the policy apparently from the teaching in those cases is that without a clear statement from the Congress that no such expansion would be permitted or sanctioned.
Now, we submit in this case, in the Maze case that there has been such a clear statement by Congress and that is in the form of Title 15, Section 1644.
Now, I want to call the Court’s attention to the legislative history of this particular statute which is set forth in full at page 17 of our brief, but I think it’s clear from that legislative history as recited in the Congressional record from statements and remarks made by, particularly by Senator Long on the Florida Senate that the Court, I’m sorry, the Congress felt that there was no adequate protection for credit card fraud.
Now, there’s one other significant point with regard to the enactment of this legislation.
The original Senate Bill as was passed was Section 134 of Title 5, I believe of the Truth in Lending Act.
The original Senate Bill had no jurisdictional limitation other than the interstate commerce requirement.
The Justice Department came in and said, “We want a $5,000 jurisdictional limitation in this because of the administrative problems that we anticipate encountering in administering such a broadly drawn statute” and the statute was subsequently enacted with the $5,000 requirement.
Now, I think it’s clear, again, from statement or policy that can be gleaned from a recent case in this Court, the Erlenbaugh decision which was decided a little less than a year ago, Erlenbaugh against United States, that a later Act in this case 15 U.S.C. 1644, can to a great extent to be regarded as a legislative interpretation of an earlier Act.
And certainly it’s, I think a well-settled principle of statutory construction that whenever Confess passes a new statute it acts aware of all previous statutes in the same general area.
Now, the Rewis case also states, expresses this Court’s concern with the over extension of limited federal police resources.
And I think it’s ironic in this case, to a great extent that the Justice Department in 1970 in urging a jurisdictional limitation upon the Congress expressed almost the same concern.
Now, as we point out in our brief on the necessity issue, each of the four states involved has a specific statute dealing with credit card fraud.
The State of Kentucky where the Citizens Fidelity Bank is located which was the bank that ended up with the payment in this case, Kentucky has probably one of the most detailed tough credit card statutes in the country and it provides for misdemeanor and felony penalties.
Now in this case, Maze would have been subjected to very heavy felony penalties.
So it's not a question, I submit, of either the Federal Government entering the field or having a felon escape punishment, this is not the case.
Now, there has been no showing by the Government in this case that Kentucky Officials, Louisville Police, State of Kentucky are either unwilling or were either unwilling or unable to prosecute Maze for this offense.
Justice Lewis F. Powell: Would Kentucky have had any difficulty in getting evidence from all across the country?
Mr. William T. Warner: Well, sir the postal inspectors acquired the evidence in this case from the Citizens Fidelity Bank and I could only assume the Citizens Bank would have responded to a request from the Kentucky Police.
Now, that’s where the evidence ended up.
That’s where the invoices were and that’s where all the evidence was.
So I can only assume that it would have been no more difficulty for Kentucky Police than for --
Justice Lewis F. Powell: You are saying that federal investigative facilities would have been available to the state?
Mr. William T. Warner: Well, sir I’m sure they would have been, but I think that even absent that consideration that the state investigative facilities could have gone to the bank and said we want to see the same records.
The records were all there, right in Louisville.
Justice Lewis F. Powell: Were any of the merchants who received these invoices or the credit card gives its witnesses?
Mr. William T. Warner: I’m sorry, I didn’t understand the question.
Justice Lewis F. Powell: Some of the merchants who --
Mr. William T. Warner: Oh, yes, sir.
Justice Lewis F. Powell: -- extended credit on the basis of credit card testified --
Mr. William T. Warner: Yes, sir.
Justice Lewis F. Powell: -- they were from other states?
Mr. William T. Warner: Yes, sir.
They were from other states, that’s right.
This was done not infrequently in my experience in Kentucky courts that out of state witnesses are brought in?
Justice William H. Rehnquist: There is a certain facility that the Federal Government has been handling something like that.
If you’re talking about a motel proprietor Fort Lauderdale, if you’re talking about a federal prosecution, the FBI agent in Miami can go out and talk to him.
If you’re talking about a state prosecution in Kentucky, somebody from the local county attorney’s office has got to fly down to Fort Lauderdale and talk to him or else you’ll never see the guy before you put him to stand?
Mr. William T. Warner: Well, this Mr. Justice Rehnquist was a point that was raised by the Second Circuit in the Chason case where they said that obviously, the interstate character and I think that is valid consideration.
But I would respectfully submit that that alone is not enough to warrant federal intrusion into this kind of case.
Now, the problem is and I think it was raised yesterday by Mr. Justice Marshall is and I would submit for the Court’s consideration, where does it stop?
Now, I raise the point in my brief that if the Government’s position is sustained and the per se rule is approved or expressed as policy that every type of commercial fraud would be covered.
Now, I since learned that that’s a mistake.
I want to bring to the Court’s attention an indictment returned recently in the United --
Justice William J. Brennan: Excuse me, Mr. Warner --
Mr. William T. Warner: Yes, sir?
Justice William J. Brennan: -- for interrupting.
You mentioned Erlenbaugh, that’s the one of the racing sheet across the bridge, isn’t it?
Mr. William T. Warner: Yes, sir.
Justice William J. Brennan: Do you have a citation, I notice you don’t have it cited in your brief?
Mr. William T. Warner: No, sir.
I’m sorry, I have a --
Justice William J. Brennan: It’s alright.
Mr. William T. Warner: -- it was decided December 12, 1972.
I don’t have the U.S. Citation.
I have the Lawyer’s Edition Second.
But as an example of the kinds of cases that the courts will face and this Court will face, I want to bring to your attention the case of the United States versus Jasper J. Mirabile under an indictment brought in the United States District Court for the Western District of Missouri in the Western Division.
Its number 73 CR 21060-4, charging of violation of 18 U.S.C. 1341 and the conduct that Mr. Mirabile is charged with is as follows.
That he falsified a state gross receipts tax return and mailed it into the State Treasury of the State of Missouri, and the defrauded party in the indictment is the State of Missouri, stated in the Indictment State of Missouri.
Now, I respectfully submit to the Court that that constitutes the grossest kind of overreaching and that may or may not be dismissed, but I cited as an example of the kinds of things that could be or may be possible if this per se doctrine is not struck down.
Chief Justice Warren E. Burger: Now some of these arguments you’re making are valid arguments to be addressed to Congress for not trying to give too much of a federal reach for a court to consider and I suppose that’s why you’re urging among us that sort of an extension approach, isn’t it?
Mr. William T. Warner: Yes, sir and I want again to point out that I’m not urging on the Court the view that the use of a credit card can never constitute mail fraud.
And again, I would --
Justice William J. Brennan: No, are you suggesting, I gather --
Mr. William T. Warner: No, sir.
Justice William J. Brennan: -- that Congress couldn’t enact constitutionally a statute which reach this very transaction or are you suggesting that?
Mr. William T. Warner: I have some doubts about that by reading of the Bass case.
Now, I just don’t know.
I’m not prepared to respond to that.
Justice Potter Stewart: Well, how about -- what if they enacted 15 United States Code Section 1644 without the limitation to $5,000 in it?
Mr. William T. Warner: I think, now you’re assuming that the interstate commerce requirement would --
Justice Potter Stewart: It would still be in high probate except for the $5,000 limitation.
Mr. William T. Warner: I think there’s no question.
Justice Potter Stewart: No questions comes to constitutional power -- constitutional power?
Mr. William T. Warner: No sir, there’s not and I pointed that to reinforce my argument that this was what Congress did intend and this is what the Justice Department asked for was jurisdiction only in cases over $5,000.
Justice William H. Rehnquist: But there all you have is that affecting interstate commerce where the use of the mails could be very tangential under the $5,000 statute and still state an offense?
Mr. William T. Warner: Oh, no, sir.
No question about that.
Justice Potter Stewart: You wouldn’t have to have any use of the mails at all under 1644?
Mr. William T. Warner: No, they could be carried across the state line by bicycle or --
Justice William H. Rehnquist: Or send it by United Parcel Service, which is what lots of people do now that the mails are so --
Justice Potter Stewart: Or Western Union or --
Mr. William T. Warner: That’s right, in fact similarly transfer --
Justice Potter Stewart: Mail Express or whatever.
Justice Thurgood Marshall: But if the people that honor this credit card had failed to send it in the mails, then it would be no use at all?
Mr. William T. Warner: That’s a very valid point Mr. Justice Marshall.
Justice Thurgood Marshall: And there’s nothing in this record that Maze used the mails at all?
Mr. William T. Warner: No, sir.
Nor was he asked any questions as to whether he had used the mails or knew that the mails would be used.
Justice William J. Brennan: Well, I gather that’s it, isn’t it that the element satisfied the proof that that he caused or had reason to think that he defrauded people with use of mail?
Mr. William T. Warner: I’m sorry, are you asking if --
Justice William J. Brennan: Isn’t that -- isn’t that all that’s required?
Mr. William T. Warner: That he caused the mails to be used.
Justice William J. Brennan: That’s right.
Mr. William T. Warner: If he doesn’t deposit the letter himself, the statute requires that he caused the mails to be used in some way.
And of course in the Konashiki (ph) case for instance where the life insurance agent went to his boss and filled out a fraudulent death claim.
Now, he was in the business.
He knew that his boss was going to mail that application to the home office because he’d mail them himself.
Now, this is where we think the Maze case works.
Unknown Speaker: Yes.
Chief Justice Warren E. Burger: You said earlier, you knew personally that if the mail had to be used --
Mr. William T. Warner: I said, I thought so, sir.
Chief Justice Warren E. Burger: Were you suggesting then that some people might be held under the statute and others might not --
Mr. William T. Warner: I think --
Chief Justice Warren E. Burger: -- depending on their sophistication about business matters?
Mr. William T. Warner: I think that’s a matter of proof, Mr. Chief Justice and --
Chief Justice Warren E. Burger: I take it all of the points you’re making in this direction go to a failure proof in this particular case?
Mr. William T. Warner: Yes, sir.
And perhaps cases like it.
Now if Maze as an example had been asked directly the question on cross-examination, now you knew that that vendor would mail that invoice back to the bank.
If he had said yes, I doubt that we would be here this morning.
Unknown Speaker: In our cities.
Mr. William T. Warner: Now, one other final point, with regard to a point or question that was raised yesterday by Mrs. Lafontant about this business of concurrent sentences as I point out in our footnote in our brief, I don’t think there’s any question that the five-year sentence at least under the Dyer Act conviction was answered by the four convictions under the mail fraud statute if this conviction or the Sixth Circuit decision stands, we would anticipate a motion under Rule 35 to District Court for reduction of sentence.
A five-year sentence in the District Court of Western District on a Dyer Act conviction is rather unprecedented. Now again, the Government, I think to a great extent in this case, has lit off a kind of a smoky bonfire on this issue of unless the Court overturns the Sixth Circuit decision that the entire credit card system is going to breakdown, I don’t think that’s true.
I think their adequate state laws and I think that the existing federal statutes would prevent that.
Chief Justice Warren E. Burger: Thank you Mr. Warner.
Thank you, Mrs. Lafontant.
Mr. Warner, you have accepted our appointment, you came here at our request to argue this case.
Mr. William T. Warner: Yes, sir.
Chief Justice Warren E. Burger: On behalf of the Court, I want to thank you for your assistance not only to your client, but to the Court.
Mr. William T. Warner: Well, I’d like to state it’s been a real pleasure and fine opportunity.
Thank you, sir.