mony of representatives of many of the concerns with whom the Mercantile had dealings, and of solicitors and agents through whom the business was conducted, was substantially as follows: Under the general direction of defend. auts Wendler and Preeman, at considerable expense persons were sent to various District Courts of the United States, there to examine the bankruptcy records, and tabulate the bankruptcies there shown for a considerable number of years back, listing the various creditors and data which the records disclosed as to the claims. This information was sent to Wendler at St. Louis, or to defendant Preeman at Chicago, his chief assistant. The data thus secured was classified, so that the bankrupt claims shown by the various court records to be owing to a concern of a given city would appear together. In the general office the data concerning the several creditors in a city about to be visited was transcribed upon cards; each card containing the information thus gathered in regard to outstanding bankrupt claims of a given creditor concern of the city. These cards were known as "leads" or "lead cards," and all the cards for a given city were sent to the agent about to visit the city to afford the agent information which, when used as contemplated. was calculated to arouse or stimulate the interest of the prospective client in the proposed plan.

The proposition to join a commercial agency ordinarily striking no responsive chord in the prospect, the agent would casually inquire if the concern had not some time before sustained loss through a certain bankruptcy. Receiving an affirmative reply, the agent would suggest further facts in regard to the loss that the particular lead card showed, and might inquire as to other bankruptcies in which the lead card had informed him the prospect was interested. The prospect, not suspecting the deliberate manner whereby the information had been obtained, nor the purpose of it, would inquire how the agent knew of these things, and was informed that his concern made a specialty of looking up and collecting desperate claims, particularly from bankrupts, and would then suggest as to one or more of these bankruptcies that they had discovered a responsible silent partner, or that the debtor had concealed a large amount of assets or had in some other suggested manner perpetrated a fraud upon his creditors, and would often say that they had already instituted proceedings for other creditors of the same bankrupt which promised very early success, and would like to include this claim, and in many cases would state that attachment proceedings had been begun, or were about to be begun on discovered property, and that they had property secured suffi cient to pay the creditors, and that it would be a matter of only a short time, frequently fixed by the agent, before the claims against the bankrupt, which were turned over to them, would be realized fully or in large part. The cal culated and the frequent effect of such representations was to induce in the mind of the prospect a belief that, if the claim was turned over, payment within a short time (often designated) would be certain to follow.

This agent did not proceed so far as to suggest that the prospect should make any payment in advance, but he invariably suggested to the prospect that not only as to the claims referred to, but as to the collection of all old and desperate claims, his concern were specialists, and that, if the prospect would supply him with a list of all his old and desperate claims, he would send in the list to the home office, and obtain from the office a proposition for the collection of such claims, and that, if the prospect did not accept the proposition, no possible liability would be incurred. This appearing to be fair, a list of such old delinquent claims was prepared and given the agent, and was by him mailed to Wendler or Preeman. Thereupon a letter was sent by Wendler to the prospect, advising of receipt of the list handed the solicitor for the purpose of arriving at a basis for charge for the service, and that in due time a special agent will call and submit a contract.

In the course of a few weeks another person would call on the prospect, presenting a proposition for making the collections, which was in the form of a long contract, mostly in fine print. This man was known as the "contract man" or "closing man"; the solicitor who secured the list being known as the "list man" or solicitor. Through the presentation of the proposed contract the prospect was first informed that he was expected to pay the agency in

advance a specific sum which was written in the contract. It appears that the sum to be paid was usually arrived at through Mr. Preeman first making an estimate of the amount to be written in the contract as the "minimum recovery," to be later explained, which was arbitrarily fixed at approximately 20 per cent. of the total of the claims listed. and that the "realization charge" was arbitrarily fixed at 25 per cent. of the "minimum recovery," so that, in case the prospect had submitted old claims aggregating, say, $20,000, the minimum recovery would be fixed at about $4,000, and the realization charge at about $1,000, which last amount the contract man undertook to get the prospect to pay in advance. Of course, the prospect generally demurred to paying anything in advance, particularly the amount asked, which was usually a substantial sum. In the excellent "teamwork" which the evidence revealed, it appears that the contract man was also supplied with "lead cards," and in most instances he knew generally or specifically the particular sort of story the list man had told the prospect concerning the collectibility of the bankrupt claims. Such stories, which never had the remotest foundation in truth, beyond the fact that the bankrupt claims existed, the contract man would reiterate, and in many instances amplify, stating (out of whole cloth) the further progress that had been made in a particular matter, holding out roseate prospect of speedy realization thereon, in which case, through such collection alone, the required advance payment would be largely, if not fully, repaid, or even yield a surplus over the payment, but usually suggesting that, unless the prospect promptly came in. he would lose the benefit of the proceedings which were in progress against the particular bankrupt debtor. That the list men and contract men well knew that all these stories of secret partners, concealed assets, fraud, attachment, and other proceedings, and all the representations as to the collectibility of the bankrupt claims were wholly false, appears from the fact that they themselves usually concocted the particular tale to suit the particular case.

To enable contract as well as list men to further impress the prospect, each of them was provided with a formidable outfit of letters of recommendation. some purporting to be originals, but most of them photographs or other reproductions, lauding the agency for its achievements, and some of them referring to specific instances where collections had been made from debtors who had gone into bankruptcy. Some of the latter were genuine letters, but the evidence shows they were obtained from the creditor, under his belief that the agency had made the collection from the bankrupt, when in truth the agency, or rather some of the defendants, paid the creditor the claim (generally a small one) for the very purpose of procuring from the creditor the letter, to be used by the agents as a lure to obtain business from others. The uncontradicted evidence of bankrupts showed a number of instances where the bankrupt referred to in the letters did not know of the agency or the defendants, and had made no such payment. Other such letters purported to be on the letter heads of corporations with high-sounding names, but which had no existence, and the letters were pure fictions. Others of such letters were shown to be absolute forgeries. Quite occasionally prospects were referred to St. Louis banks or business houses for the responsibility of the concern, and these knowing nothing of the "Mercantile," but only of the "Commercial," which operated wholly in St. Louis, would occasionally make favorable reply, without knowledge of any distinction between the "Commercial" and the "Mercantile." Indeed, the agents were not allowed to operate in St. Louis, and "realization charges" were not solicited there.

The "Mercantile" agents were not only prohibited from operating in St. Louis, but were also warned not to solicit business from any former clients of the agency anywhere. So particular were the managers in this regard that the "lead cards" themselves showed on their face whether or not the concerns thereon referred to had ever been clients of the "Mercantile," and, if so, the positive instructions were to avoid them. Agents were also strictly forbidden from calling on members of an organization known as the Credit Men's Association, and the lead cards showed who were such; the abbreviations "OC” and "CMA," often appearing in lead cards and frequently in letters, being well understood by the agents referred to as meaning "old clients" and members of

the "Credit Men's Association," who were in no event to be solicited-old clients, for manifest reasons, and the others because of the activity of the Credit Men's Association in exposing and warning against the operations of the "Mercantile."

In many instances the representations made were supplemented by the agent's promise that if within a short period, as promised. varying from a few weeks to a year, sufficient was not collected and paid over to the client to equal the realization charge, the difference would be returned to him. It was often also represented that the realization charge would be used to pay expenses incurred for costs, attorney's fees, and the like in the claims in which the represented proceedings were begun or about to be commenced.

Influenced by such representations, the victims frequently signed the contract, paying the contract man, usually by check to the agency, sums varying in amount from $50 to $3,000, the aggregate of the realization charges as to which there was evidence offered of such representations to bring about their payment being many thousands of dollars. In many instances the prospect, becoming at once suspicious, undertook, occasionally with success, to stop the payment of his check. To circumvent this as far as possible banking arrangements were made in several of the cities in which business was being solicited, whereby the checks might be cashed at local banks.

When considerable time had passed since the payment, and, as was always the case, nothing was heard from the agency, the client would write for information, and would receive a letter explaining the difficulty of collecting old claims, and exhorting the client to be patient. In the first letter, or later, the client would refer to the agent's promise of speedy results as to particular claims, and thereupon Wendler would write calling attention to the contract, and to the statements therein, as well as in the literature of the agency, that the terms of the written contract may not be varied by its agents. In this connection it may be stated that in case the prospect called attention of the contract man to that part of the contract which prohibited agents from making any such representations or variation, the contract man would produce his printed card, which described him as "special representative," and would explain (as per his previous instruction) that he did not come within the class of solicitors as mentioned in the contract, but that he, as "special representative," had full power to make binding promises, even though the form contract was thereby varied.

It appears that in most, if not all, instances when claims were received, they were listed at the St. Louis office, and a form letter demanding payment would be sent out to the debtors named, and this was about all that would be done, except when the client made complaint further form demand letters would be sent out. In practically no case as to which evidence was offered was anything collected on the list of accounts submitted, nor any effort made to collect, beyond sending out the form letters. Indeed, it is apparent from the evidence not only that practically all such listed old accounts were absolutely worthless, but that the agency and the persons acting and dealing in its name had not the slightest reason to believe they were otherwise.

Notwithstanding the representations as to the use to be made by the agency of the realization charges, it appears that as fast as received they were divided in the proportion of 35 per cent. to Wendler for the St. Louis office, 65 per cent. to Preeman, who gave the contract man 25 per cent.. the list man 10 per cent., retaining the remaining 30 per cent. for his own compensation and to pay the expenses of the Chicago office; and the evidence plainly warrants the inference that it was never intended any substantial portion of the realization charges should be devoted to the expense of collecting the listed claims, nor indeed that there would be any expense beyond that for clerical work, postage, and stationery for sending out the form letters.

Defendant Preeman was first employed at the St. Louis office in 1906, and about 1909 came to Chicago and assumed charge of the fieldwork. Under his general direction the men were trained in the agency work, and there are in evidence many letters between Wendler and Preeman and different ones of these agents. The defendants, other than Wendler and Preeman, were list men or contract men, some both at different times. Day and Minehart were the

most active in securing the realization charges. Finkelman, Pender, and Stevens were in this respect next in importance. As to Fellers and Worman there were comparatively few instances shown where they were instrumental in securing the realization charges, but nevertheless such instances appear as to each of them. All the agents were duly trained and instructed, and most. if not all, participated in instructing and training some of the many others for this work.

The evidence offered in defense consisted wholly of the testimony of several employés of the St. Louis office, from which it appears that in that office there was employed a corps of assistants, largely typewriter girls, through whom there was conducted an extensive correspondence with reference to the collection of claims which came to the office; that each claim received had attention, which consisted mainly in sending to the debtor, the form letters; that the agency had formulated a list of attorneys in most of the cities of the United States to whom claims were sent for collection, and through whom occasional suits were brought to collect claims; that during the period of time covered by the inquiry the agency had collected for and remitted to clients generally claims of a very considerate aggregate, and that a few of the collections made were from bankrupt debtors, and that the clients themselves had been supplied with and had made use of form letters which the agency had supplied them, with which they had themselves collected a considerable number of claims without charge by or commission to the agency, and that in certain instances the service to clients had proved satisfactory.

Sentences were:

Wendler and Preeman: Each three years imprisonment on each of counts 1 to 6, 11 to 16, 18, 19, 20, 28, 29, 32, and 33, to run concurrently, and fine of $1,000 on each of these counts; three years on counts 7 to 10, 17, 21, 24, 27 to 30, 31, and 34, to run concurrently beginning at expiration of sentence on former counts, and fine of $1,000 on each of these counts; two years on each of counts 25, 26, and 35, to run concurrently and to commence at expiration of sentence on counts last mentioned, and fine of $3,000 on each of these three counts-aggregate as to each, imprisonment eight years, and fine, $41,000. Day and Minehart: Each two years on each of counts 25, 26, and 35, to run concurrently, and fine of $5,000 on count 25; two years on each of counts 1 to 24 and 27 to 34, to run concurrently beginning at expiration of sentence on previous counts-aggregate as to each, imprisonment four years, fine, $5,000. Finkelman, Pender, and Stevens: Each two years on each of counts 25, 26, and 35, and fine of $2,500 on counts 25; one year on each of counts 1 to 24, and 27 to 34, to run concurrently beginning at expiration of sentence on preceding counts-aggregate as to each, imprisonment three years, fine, $2,500. Fellers and Worman were each sentenced to nine months' imprisonment in House of Correction on each of counts 1 to 35, to run concurrently.

Many errors are assigned; those we deem sufficiently important being stated where they are considered in the opinion, in which also some further facts are given.

Patrick H. Cullen, of St. Louis, Mo., and William S. Forrest, of Chicago, Ill., for plaintiffs in error.

Charles F. Clyne and Henry W. Freeman, both of Chicago, Ill., for the United States.

Before KOHLSAAT, MACK, and ALSCHULER, Circuit Judges.

ALSCHULER, Circuit Judge (after stating the facts as above). [1] 1. It is urged that the indictment is defective in failing to set out the contract above referred to, or to set out that such contract was entered into. The case of Hurst v. State, 39 Tex. Cr. R. 196, 45 S. W. 573, and others are cited to sustain the contention. But they are cases where the defendants were charged with the offense of obtaining property through some fraudulent scheme or pretense. This indict

ment charges defendants with using the mails in execution of a scheme or artifice to defraud which they had devised; the conspiracy counts charging a conspiracy to so use the mails. Where the charge is that of obtaining property by fraud, the material elements of the fraudulent scheme whereby the property was obtained should be set forth in the indictment; but here it is necessary only to set forth generally the scheme or artifice which the defendants devised, and to charge the use of the mails in execution of the scheme. Durland v. United States, 161 U. S. 306, 16 Sup. Ct. 508, 40 L. Ed. 709; Bettman v. United States, 224 Fed. 819, 140 C. C. A. 265; Farmer v. United States, 223 Fed. 903, 139 C. C. A. 341; Gourdain v. United States, 154 Fed. 453, 83 C. C. A. 309. And the scheme itself is not required to be charged with the detail and particularity necessary in an indictment for the specific offense of obtaining property through false representations. Bettman v. United States, supra; Emanuel v. United States, 196 Fed. 317, 116 C. C. A. 137; Blanton v. United States, 213 Fed. 320, 130 C. C. A. 22, Ann. Cas. 1914D, 1238; Foster v. United States, 178 Fed. 165, 101 C. C. A. 485.

In apt language the counts set forth the scheme to represent that bankrupt debtors of the victim had fraudulently concealed assets, or that there were responsible secret partners; that seizures of property had been made or were about to be made for other creditors; that the collection would surely be made; and other of the alleged knowingly false and fraudulent matters and things above stated. We regard the contract as evidence tending to show the manner in which the fraudulent scheme to obtain money would be made effective, and as such unnecessary to be referred to in the indictment.

[2] 2. Insufficiency is claimed because the indictment fails to state what the Barr & Widen Agency is, whether a partnership, corporation, or whatever else, and because the relation of the defendants to the agency is not stated. Had the Barr & Widen concern been a defendant or a victim of the fraud, it might have been necessary to allege its capacity as a business entity. But, appearing only as a means through which defendants realized upon their scheme to defraud, it is not material what was its precise legal capacity. If defendants fraudulently devised a scheme to falsely represent the "agency" as having done things which it had not, or as having information concerning, or taken steps affecting certain bankrupt debtors, which it had not, the fraudulent scheme is the same, whether the alleged "agency" be corporation, partnership, or what not. In brief for defendants it is said:

"The allegations all the way through indicate, however, that it [the agency] is a body of men that have been engaged in the collection business."

This being so, the indictment sufficiently advised defendants that the "agency" had in some capacity the right to transact business, and could have participated in the execution of the scheme which defendants had devised. If in preparing their defense defendants needed to be more fully informed of the legal capacity of the agency, motion for a bill of particulars would doubtless have elicited whatever, if any, further facts thereon the government possessed. Foster's Federal