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United States v. Martin

United States Court of Appeals for the Seventh Circuit

April 3, 1969

Nos. 17013, 17014

Opinion

 [*950]  HOLDER, District Judge.

Ronald Martin and Roger Wolf were convicted and sentenced after a trial to the court without the intervention of a jury. The offense charged against them in the indictment filed January 11, 1966 reads as follows:

"* * *:

1. On the 10th day of May, 1962, an involuntary petition in bankruptcy was filed in the United States District Court for the Eastern District of Wisconsin, praying that Market Men's Management Agency, Inc., a corporation organized and existing under the laws of the State of Wisconsin, with its place of business at 1834 West Wisconsin Avenue, Milwaukee, Wisconsin, be adjudicated a bankrupt and in pursuance of said petition, the said Market Men's Management Agency, Inc., was, on the 28th day of May, 1962, adjudicated a bankrupt.

2. On or [**2]  about the 19th day of April, 1962, Ronald Martin and Roger Wolf, as officers of Market Men's Management Agency, Inc., the bankrupt, and in contemplation of a bankruptcy proceeding by and against the said Market Men's Management Agency, Inc., and with intent to defeat the bankruptcy laws, knowingly and fraudulently did transfer and conceal property of the said Market Men's Management Agency, that is $63,600 from the checking account of Market Men's Management Agency, Inc. at the Midwest Bank and Trust Company, Elmwood Park, Illinois, in violation of Section 152, Title 18, United States Code of Laws.

* * *."

The defendants appeal from the judgment and for error complain of the failure to prove the necessary knowledge and intent of the defendants to commit the charged offense; that the indictment failed to set forth facts showing a crime under the statute; that the indictment failed to set forth facts showing the commission of any crime within the Eastern District of Wisconsin or within the State of Wisconsin; and that the corporation, Market Men's Management Agency, Inc., alleged in the indictment to be the bankrupt, was an insurance corporation and not eligible or subject [**3]  to being a bankrupt under the Bankruptcy Act. We affirm the judgment of conviction.

According to the Secretary of State of the State of Wisconsin, articles for the incorporation of Market Men's Management Agency, Inc. were filed in his office on December 22, 1958, and the filing fee was paid, under the provisions of Chapter 180 of the Wisconsin Statutes. The articles  [*951]  provided for the registered office of the corporation as 6164 Plankinton Building, 161 W. Wisconsin Avenue, Milwaukee, Wisconsin; for the perpetual period of existence; for capital stock of 250 shares of common stock at $100.00 per share; and for it to engage in any lawful purpose authorized by Chapter 180 of the Wisconsin Statutes. The corporation was thereafter certified as qualified to do business on January 6, 1959. The corporation was not qualified to do business as an insurance company as Chapter 180 of the Wisconsin Statutes is the general corporation statute of that State. There was another corporation known as Market Mens Mutual Insurance Company which had been organized under Chapter 201 of the Wisconsin Statutes and did business in that State. Chapter 201 of the Wisconsin Statutes provides for [**4]  the organization of insurance corporations. The defendants were elected to the board of directors on March 8, 1962 and became officers of the Management Corporation. On February 28, 1962, the financial statements showed a $492,000.00 deficit for the Insurance Company and a $51,000.00 deficit for the Management Corporation. The Insurance Company had entered into a management contract with the Management Corporation and had received prior approval of the contract from the Wisconsin Insurance Department which had jurisdiction of insurance companies of the State although certain changes thereafter made in the contract had not been approved as of March 14, 1962. The execution of the contract was the sole business of Management Corporation. It provided and paid management personnel with insurance background and training to operate the Insurance Company and paid most of the expenses of the Insurance Company. The two parties to the contract officed in the premises of the Insurance Company. Employees of the Management Company who were also employees of the Insurance Company received a single salary. Management Company performed under the contract for a fee of 39 per cent of the earned insurance [**5]  premiums.

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408 F.2d 949 *; 1969 U.S. App. LEXIS 12992 **

UNITED STATES of America, Plaintiff-Appellee, v. Ronald MARTIN and Roger Wolf, Defendants-Appellants

Subsequent History:  [**1]  As Corrected April 7, 1969. Rehearing Denied April 25, 1969.

Disposition:  Affirmed.

CORE TERMS

insurance company, concealment, bankrupt, defendants', venue, disbursements, indictment, witnesses, bankruptcy proceedings, minutes, funds