EFTA00191587

b. In or about November 30, 2006, CECIL SUWAL, 
a/k/a "Katie," a/k/a "Kate," the defendant, opened a bank account 
in the name of "QAT International, Inc."; 
c. From in or about December 2004 to in or about 
January 2008, MARK BRENER, a/k/a "Michael," and CECIL SUWAL, 
a/k/a "Katie," a/k/a "Kate," the defendants, received more than 
$1 million in proceeds from the Emperors Club prostitution 
business in bank accounts in the names of "QAT Consulting Group, 
Inc.," and "QAT International, Inc."; 
d. From in or about December 2004 to in or about 
January 2008, CECIL SUWAL, a/k/a "Katie," a/k/a "Kate," the 
defendant, wrote more than $100,000 in checks to cash from bank 
accounts in the names of "QAT Consulting Group, Inc.," and "QAT 
International, Inc."; 
e. From in or about December 2004 to in or about 
January 2008, CECIL SUWAL, a/k/a "Katie," a/k/a "Kate," the 
defendant, wrote more than $39,000 in checks to Protech 
Consultants, a company whose bank account MARK BRENER, a/k/a 
"Michael,' the defendant, controlled; and 
f. From in or about December 2004 to in or about 
January 2008, CECIL SUWAL, a/k/a "Katie," a/k/a "Kate,' the 
defendant, wrote checks and sent wire transfers totaling more 
than $400,000 from bank accounts in the name of "QAT Consulting 
Group, Inc.,' and "QAT International, Inc.," to more than 50 
prostitutes working with the Emperors Club in the United States 
and Europe. 
(Title 18, United States Code, Section 1956(h).) 
9. 
The bases for my knowledge and for the foregoing 
charges are, in part, set forth in the attached Affidavit of 
Kenneth Hosey in support of the Application for Arrest Warrants, 
Search Warrants, and Seizure Warrants, which is incorporated by 
reference herein. 
7 
EFTA00192167

WHEREFORE, deponent prays that warrants be issued for 
the arrests of the above-named defendants so that they may be 
imprisoned or bailed, as the case may be. 
tL1/27frA
KENNETH HOSEY 
Special Agent 
Federal Bureau of Investigation 
Sworn to before me this 
Ei day of March, 2008. 
TED STATES MAGISTRATE JUDGE 
SOUTHERN DISTRICT OF NEW YORK 
EFTA00192168

536 
126 FEDERAL REPORTER, 2d SERUM 
McAllister Lighterage Line, Inc., is con-
cerned. Its appeal has been discontinued in 
accordance with a stipulation and it will 
not be mentioned further. 
Maritime had made a contract with Lo-
rentzen to remove and dispose of the sand 
ballast on the Emma Bakke and had sublet 
the disposal of the ballast to Seaboard 
which had chartered the scow to use in so 
doing. Maritime did the work of loading 
the scow with the sand ballast from the 
motorship, by dumping it from a tub into 
piles on the scow. 
Lorentzen in the second action sued Ma-
ritime and Seaboard and the scow, which 
was claimed by Seaboard, to recover for 
the damage to the motorship. From an in-
terlocutory decree in the first suit in favor 
of the stow owner and against Lorentzen 
and Maritime jointly and primarily and 
against Seaboard secondarily for the dam-
age to the scow, Lorentzen has appealed 
and Terminal has filed cross-assignments 
of error. From a final decree dismissing 
the libel in the second action on the merits 
but without costs to Maritime, Lorentzen 
has appealed. 
There was ample evidence to support the 
findings of the trial court to the following 
effect. The scow was seaworthy and it 
capsized because of the negligence of Mari. 
time in loading the sand in such piles as it 
did and in • failing to come to the scow's 
assistance after the sand loaded in piles 
amidship from fore to aft had split and 
caused the scow to list toward the motor-
ship, where she hung on her lines for an 
hour or so before she turned over. The 
motorship was negligent in allowing wa-
ter to run upon the piles of sand from the 
refrigerator and toilet discharge pipes on 
the ship. Wooden covers to deflect such 
water away from the scow had been put 
over the ends of those pipes by the ship 
but had been displaced during the loading 
of the scow or when she was shifted by 
Maritime and the ship took no precautions 
other than the putting on of the covers. 
We accept those findings. 
[1,2] The trial judge also found that 
the,scow captain was not negligent in going 
below to rest a while before the scow be-
gan to list and in remaining below until she 
-did list. While the scow owner was bound 
to exercise through him due care for t 
"internal economy" of the scow, Dailey 
Carroll, 2 Or., 248 F. 466, the burden wl 
on the appellant and Maritime to show that 
failed
so to do. Central Vermont R. Co. 
White, 238 U.S. 507, 35 5.0. 865, 59 L 
1433, Ann.Cas.1916B, 252. 
On this 
record the determination of the trial Judge 
has not been shown clearly erroneous and 
should not be disturbed. 
[3] In the absence of proof. that Sea-
board Great Lakes Corporation, the char-
terer of the scow, was guilty of negligence 
which caused the damage to the motorship 
the cross libel of Lorentzen against it was 
properly dismissed. The Cullen No. 32, 2 
Cir., 62 F.2d 6& 
[4] But it was error to dismiss the li-
bel of Lorentzen against Maritime whose 
negligence contributed to cause the damage 
to the motorship when the scow turned 
over and struck the ship. Maritime should 
have been held for half the damage to the 
ship. The Max Morris, 137 U.S. 1, 11 S. 
Ct. 29, 34 LEd. 586. 
The decree in the first snit is affirmed. 
That in the second suit is modified to al-
low the libellant to recover half damages 
from Maritime. 
o 
NM NOM MIMI 
LA PAGE I UNITED STATES. 
No. 12883. 
Circuit Court of Appeals. Eighth arm*. 
Jan. 10. 1036. 
Rehearing Death Jan.* IM& 
I. Statutes /WKS 
A statute should be construed so as to 
give effect to all of its language. 
2. Stabiles 4,0207 
A broad statutory provision will not 
apply to a matter specifically dealt with in 
another part of same act. 
3. Prostitution it=i 
The statutory offense of causing trans- • 
portation of a woman in interstate com-
merce for immoral purposes and the of-
fense of inducing a woman to go in inter-
state commerce on a common carrier for 
immoral purposes are separate crimes. 
White Slave Traffic Act ft 2, 3, 18 U.S. 
C.A. 44 398, 399. 
EFTA00192169

4, Cris:sisal 114=l96 
The test o difference in similar crimes 
is that there must be a difference in the 
evidence necessary to establish particular 
crime from that required to establish the 
other crime. 
5. Pro,Mutton ill=s4 
Proof that woman made trip in inter-
state commerce on common carrier follow-
ing telephone call by defendant requesting 
woman to return to defendant's house of 
prostitution, though it might have support-
ed conviction of offense of "inducing" wo-
man to go in interstate commerce on a 
common earner for immoral purposes, was 
not sufficient to support conviction of of-
fense of "causing" woman to be transport-
ed in interstate commerce for immoral pur-
poses. 
White Stave Traffic Act §§ 2, 3, 
18 U.S.C.A. §§ 393, 399. 
Se* Words and Phrases, Permanent 
Edition. for 
till 
cdie r 
definitions 
of 
-Causing" and - Icelaeine. 
SANBORN, Circuit Judge, dissenting. 
Appeal from the District Court of the 
United States for the District of Minne-
sota; Gunnar IL Nordbye, Judge. 
Lucille La Page, alias Lulu Page, was 
convicted of violating White Slave Traffic 
Act, 18 U.S.CA. § 397 et seq., and she ap-
peals. 
Reversed and remanded with directions. 
A. M. Cary, of Minneapolis, Minn. 
(Mark McCabe, of Minneapolis, Minn., on 
the brief 
for appellant. 
John 
. Graff, Asst. U. S. Atty., of St. 
Paul, M n. (Victor K Anderson, U. S. 
Atty., of t. Paul, Minn., on the brief), for 
appellee. 
Before 
STONE, 
SANBORN, 
and 
THOMAS, Circuit Judges. 
STONE, Circuit Judge- 
This is an appeal from a conviction for 
violation of the White Slave Traffic Act, 
IS U.S.C.A. § 397 ct seq. 
Appellant urges here three claimed er-
rors: (1) Improper restriction of cross-
examination of a witness; (2) error in 
the charge to the jury, and (3) insufficien-
cy of the evidence to support the crime 
set forth in the indictment. We have ex-
amined the points as to restriction of cross-
146 F.2d-34% 
LA PAGE v. UNITED STATES 
537 
OW so 564 rsa ass 
examination and as to the charge to the 
jury and find no merit in either. 
The serious matter is the sufficiency of 
the evidence to sustain the crime charged 
in the indictment. 
The indictment is in 
one count under Section 2 of the Act, 36 
Stat 825, U.S.C.A. Title 18, § 398, and in 
the words of that section, charges that ap• 
pellant "did cause to be transported and 
aid and assist in obtaining transportation 
in interstate commerce" of Dora Thomas 
"for the purpose of prostitution, debauch-
ery, and other immoral purposes." 
The 
evidence established that Dora 
Thomas (who was an inmate of a house 
of prostitution operated by appellant at 
Fargo, North Dakota) had gone to Min-
neapolis. Minnesota, for a vacation; that 
appellant telephoned her, one evening, to 
return as "one of her girls Was leaving" 
and she would be expected early next 
morning; that it was understood by both 
women that Dora Thomas would return to 
Fargo next day by train; and that she did 
so return. 
Baldly, the evidence is that 
Dora Thomas made this interstate journey 
at her own expense because of appellant's 
telephone request and that both women un-
derstood the immoral purpose for which 
the trip was to be taken. Since there was 
no evidence that appellant gave any aid 
or assistance in obtaining the transporta-
tion, the sufficiency of the proof depends 
upon whether it shows that appellant "did 
cause (Dora Thomas) to be transported" 
(italics added) within the meaning of sec-
tion 2 of the Act. 
Appellant contends that where, as here, 
the only act of accused is that of persuad-
ing or inducing an interstate trip by com-
mon carrier for immoral purposes, such act 
is not causing such trip within the meaning 
of section 2 but is, if any crime, the one 
stated in section 3 of the Act, U.S.C.A. 
Title 18, § 399. 
The pertinent language in the two sec-
tions is: Section 2. "Any person who shall 
knowingly • • 
• cause to be transport-
ed • • • 
in interstate 
,• 
• 
• 
com-
merce • 
• • 
any woman or girl for 
the purpose of prostitution"; and section 
3, "Any person who shall knowingly per-
suade, induce 
• 
• 
• any woman or girl 
to go from one place to another in inter-
state 
• 
• 
• 
commerce 
6 
. 
• 
for the 
el 
vi
purpose of prostitution." Sin 
generally 
speaking, "'cause' is a 
rd of cry broad 
import" (United States 
Ken skey, 243 
EFTA00192170

538 
146 PRDERAL REPORTER, 2d 8/CRIE8 
U.S. 440, 443, 37 S.Q. 438, 439, 61 LEd. 
836)1 and since to "persuade" or to "in-
duce",  might very well come within a 
broad definition of "cause", the contention 
is really that "cause" as used in section 2 
is limited by exclusion of the means of 
bringing about specifically set forth in sec-
tion 3. 
[1-3] In construing these provisions of 
the two sections, we start with the rules 
that a statute should be construed so as to 
give effect to all of its language' and that 
a broad statutory provision will not apply 
to a matter specifically dealt with in an-
other part of the same Act.' Also, it has 
been determined that the two sections cov-
er separate crimes.. One distinction be-
tween the two sections has, under some 
facts, been based upon the necessity of use 
of a common carrier in section 3, il 399, 
U.S.CA., Title 18, while no such necessity 
exists in section I 
ft 398, U.S.CA. Title 
i
18 (Coltabellotta 
Uni d States, 2 Cir., 
45 F.24 117, 119; lain United States, 8 
Cir., 22 F2d 393, 395) bbddkk the sections are 
distinct also irrespective of the common 
carrier feature and this distinction is be-
tween "causing to be transported", etc., nn-
der section 2, and "persuading, inducing" 
etc., to be transported under section 3 (see 
the Kremlin and Ronk eases in note 5). 
The only way to make that distinction ef-
fective and to preserve any effect to this 
part of section 3 is to eliminate as costa 
for transportation under section 2 the 
kinds of causation covered in section 3 by 
the expressions "persuade, induce, entice, 
or coerce." 
Appellee relies on de • ions by this Court 
as follows: Schrader 
United 
tates, 8 
Cir., 94 F.2d 926; Gill x ters 
Biddle, 
Carey 
Unit 
States, 
8 
Or., 18 F2d 206; 
8 Or., 265 E 515, and Hu man 
United 
States, 8 Cir., 259 F. 35. The 
chrader 
case Chnviction was sustained solely by an 
application of the "aiding and abetting" 
statute (Title 18 U.S.CA. § 550). 
We 
need not determine whether that decision 
should be followed since the fact situation 
here does not admit of application of sec-
tion 550 for the reasorethat appellant here 
was the only person involved in this un-
lawful transportation However, it is not 
amiss to state that the effect of section 
399 upon application of section 550 or upon 
section 398 was not brought to our atten-
1 Webster'. New International Die-
donate, 2nd ad-. defines the verb "cause" 
as being "to be the cause or occasion 
of; to erect as an agent; to bring 
about; 
to bring into existence; 
to 
make." 
Compare Judicially determined mean-
ing. is various legal situations as shown 
la 6 Words and Phrase., Permanent Ea-
tiwip. 341 et me. 
5
etater's New International Dia. 
denary, 2nd ed., defines the verbs "In-
duce" sod "persuade" as follows: in-
duce Le "to lead on; to Influence; to 
prevail on; to move by persuasion or la-
&tones"; 
persuade is "1, to Induct 
(one) by argument, entreaty, or ex-
postulation Into • determination, did. 
Mon, conclusion, belief, or the like; to 
win over by an appeal to one's reason 
and feelings, as into doing or believing 
something; to bring (oneself or an-
other) to belief, certainty, or conviction; 
to argue into an opinion or procedure; 
as, he persuades his friend to study law, 
that a doctrine is erroneous, into paying 
Mg debts, or by many argumeata; to 
pernatte oneself that al) Is well; 2. to 
use persuasion upon; to plead with; 
urge; 8. • • • to bring about, by 
argument and persuasion, the doing. 
practicing, or believing of; to commend. 
recommend, counsel, or advise (some-
thing to be done or proposed for belief)." 
Compare legal definitions in 21 Words 
and Phrases, Permenent Edition, p. 220 
and pocket part and 32 Words and Phyla-
lit Permanent Edition, p. 463 and pocket 
part 
3 111 Es parte Public National Bank of 
New York, 278 U.S. 101. 104. 49 &Ct. 
43. 44, 73 LEd. 202. Is stated: 
"No 
Se of statutory construction has been 
more definitely stated or more often re-
peated than the cardinal rule that 'sig-
nificance and elect shall, if possible. 
be accaded to every word. As early as 
in Bscou'e Abridgment, 4 2 it was said 
that "a statute ought, upon the whole, 
to be so construed that, if it can be 
prevented, no clause, sentence, or word 
shall be superfuous, void, or insignifi-
cant"' Washington Market C. v. Hot 
212.
man, 101 U.S. 112. 115, 
LEd. 782." 
4 D. Ginsberg & Haas Inc, 
Popldn, 285 
U.B. 201, 208. 52 8.Ct. 
76 LEd. 
1'04; Peck v. Jennews, 7 Mow. 612, 622. 
12 LEd. 841. 
a Limited States 
ilal•douls, 2 are
93 F2d 302, 303. 
; Eavalln v. White. 
10 Cir., 44 r.24 40, 51; Roark v. United 
States. 8 Cir., 17 P2d 570, 573, 51 A. 
LR. 370; and see United Stara v. Bar-
ton, 2 Cir., 134 P.24 484-
EFTA00192171

LA PAGE I UNITED STATES 
539 
atom 164 Yid $35 
tion or considered in the Schrader case' of section 2 for rousing unlawful transpor-
The Carey ease was a general sentence of tation. The test of difference in similar 
three months on four counts of indictment crimes is that there must be a difference 
—two counts were for furnishing transpor- in the evidence necessary to establish the 
tation on two trips and the other two particular crime from that required to 
counts for 'persuading" the victim to make tablish the other crime. 
Blockburger 
these trips. While the judgment was af- United States, 284 U.S. 299, 
52 S. 
firmed, there was no consideration of the 180, 86 LEd. 306; Gillenvraters 
Biddl , 
point involved here. The Huffman ease 8 Gr., 18 lid 206, 208. Here 
of the 
was conviction on count one and acquittal 
by verdict on counts two, three and four 
of an indictment. Count one was for caus-
ing a woman to be transported on a trip 
under section 2; the second count was 
identical covering a different trip; count 
three was for persuading, inducing and en-
ticing (under section 3) the same woman 
on the first trip; and count four was iden-
tical covering the other trip. A point pre-
sented and determined was whether the ac-
quittal on counts two. three and four was 
inconsistent with the conviction on count 
one. The Judgment was affirmed. 
The 
ground for affirmance is not as distinctly 
stated as might be (see pages 40-42 of 259 
F.) but may fairly be said to be that the 
several counts pleaded the same transac-
tion in different manner or means of its 
commission so as "to avoid at the trial an 
acquittal by reason of any unforeseen lack 
of harmony between the allegations and 
by appellee, 
'lance is placed, 
 on Johnson 
the proofs" (page 40 of 259 F.). Also,ral 
United States, 7 Cir., 215 F. 679, L
19)5A, 862, but this case is not pertinent 
14,5) The only one of the above cases 
which bears upon the point before us is 
the Huffman case. If that case is to be 
understood as holding that to "induce," 
etc., transportation under section 3 is with-
in to "cause" to be transported under sec-
tion 2, then the authority of that case is 
our later case of Roark 
United States, 
materially weakened, if i t
royed, by 
8 Cir., 17 F.24 570, 373, 51 A.L12. 870. 
We think the Huffman case should no 
longer be followed to the effect that to 
"induce," etc., under section 3 is to "cause" 
under section 2. Where the accused does 
no more to "cause", 1 e to bring about, 
the transportation than is shown here, the 
crime is a violation of section 3 for po-
mading or inducing and is not a violation 
•Cotopara Guard; I United Sista 
287 U.B. 112, 123, 63 Ct 35, 77 LEd. 
206 84 ALB. 370. 
'For an, with somewhat similar fact 
situations wham court held elation of 
section 399 see Ws/406 A 
United 
essential evidence is necessary to establish 
a crime under section 3 7 and there is no 
further evidence. In short, if this evidence 
establishes also a crime under section 2, 
it must follow that any evidence sufficient 
to prove a crime under section 3 is lace-
wise sufficient to prove a crime under sec-
tion 2. Since section 3 is of similar and 
of narrower application than section 2, the 
inevitable result is that all meaning of sec-
tion 3 is included in section 2 and section 
3 states no crime not included in section 2. 
This is to strike out section 3 and give it 
no effect whatever. We think it is not our 
province thus to nullify a portion of an 
Act, by statutory construction, when it is 
possible to reconcile the two sections giv-
ing each a separate meaning and effect and 
thereby preserve both sections of the Act-
In view of our foregoing determination, 
it is not necessary to examine the further 
contention of appellant that the judgment 
should be 
versed under authority of 
of
Mortensen 
United States, 322 U.S. 369, 
64 S.Ct. 1 . 
The judgment is reversed and the caw 
remanded with directions to enter judg-
ment of acquittal. 
SANBORN, Grath Judge (dissenting). 
Since the evidence shows that the ap-
pellant knowingly brought about the return 
of Dora Thomas from Minneapolis, Minne-
sota, to Fargo, North Dakota, for the pur-
pose of prostitution, and therefore caused 
her to be transported in interstate coin-
;Tierce, I think the conviction of the appel-
lant under section 2 of the White Slave 
Traffic Act should be sustained. The Su-
preme Court has held that under that sec-
tion "transportation of a woman or girl 
whether with or without her consent, or 
causing or aiding it, or furthering it in any 
of the specified ways, are the acts pun-
Bata 8 Or., 281 F. 150, certiorari de-
nied 254 U.S. 034. 41 8.Gt 8, 65 LEd. 
449; Galen° v. United Steal 8 Dir., 
F
236 . 215; Milted Staten 
Berta 
2 Die.. 134 1.24 484; Stoma° 
United 
&atm. 9 Cir.. 246 F. 274 290. 
EFTA00192172

540 
144 FEDERAL REPORTER, 2d SERIES 
ished, when done with a purpose which is 
immoral 
ithin the meaning of the law." 
Gebardi 
United States. 287 U.S. 112, 
118, 53 S.tt. 35, 36, 77 LEd. 206, 84 At 
It 370. The language of section 2 of the 
Act should be given its full meaning, since 
that construction supports the policy 
purposes of the enactment. Donnelley 
United States, 276 U.S. 505, 5114048 S. 
400, 72 LEd. 676; Wilson 
United 
States, 8 Cir., 77 F24 236, 239, 
. 
The verb "cause" as used in section 2 is 
entitled to the meaning ascribed to it by 
the trial court. This is indicated by the 
decisions of this Court in Huffman'. Unit-
ed St 
s, 8 Cir., 259 F. 35, 38, and De-
moth 
United States, 144 F. 363, 366, 6 
I.R.A., .S., 424, 7 Ann.Cas. 121; by the 
decision of the Circuit Court of 
ala of 
the Second Circuit in Reed ■ United 
States, 2 Cir., 96 F2d 785, 787, 
rtlorarl 
denied 305 U.S. 612, 59 S.Ct. 71, 83 LEd. 
399; and by the rulin 
of the Supreme 
Court in United States 
Kenofskey, 243 
U.S. 440, 443, 37 S.Q. 
, 61 LEd. 836. 
The fact that the evidence shows that 
what was done by the appellant was also 
an offense under section 3 of the Act, 
which section is "directed toward the per-
suasion, inducement, enticement, or coercion 
of the 
iAbited transportation, • * • ", 
Gebardi 
United States, supra, page 119 
of 287 
. ., page 36 of 53 5.0., 77 LEd. 
206, 84 A.L.R. 370, I regard as having no 
substantial bearing on the question of ap-
pellant's guilt under section 2 of the Mt. 
11
I t nle there is no conflict between Huff-
man 
ni
■ted 
States, supra, 259 F. 35, and 
Roar 
■
United States, 8 Cir., 17 F.24:1 
570, 51 A.LR. 870. Roark entered a plea 
of guilty to an indictment containing four 
counts. 
Two of the counts charged him 
with violating section 2 of the Act, and the 
other two counts charged him with violat-
ing section 3. Roark contended that, since 
the indictment showed that all of the 
counts were based upon one transportation 
of one woman, the indictment charged but 
one offense. 
We thought that a person 
could be guilty of causing a woman to be 
transported in violation of section 2 and 
also of inducing her to be transported in 
violation of section 3. We said (page 573 
of 17 F.24): "It would not require the 
same evidence to prove that a person 
knowingly transported or caused to be 
transported a woman in interstate com-
merce, and to prove that he induced the 
woman to go in such commerce. The acts 
may be separate and distinct." We there-
fore held that, for purposes of sentence, 
the four counts of the indictment charged 
two offenses, one under section 2, and the 
other under section 3. The opinion in the 
Roark case carries no implication that if 
a person causes the unlawful transporta-
tion of a woman by persuasion or the of-
feting of inducements, he may not be con-
victed under section 2 of the Act. It 
seems to me that the proper inference to be 
drawn from that case is that such a person 
may be convicted under either or both sec-
tions. Compare Reed y. United States, su-
pra, page 787 of 96 F2d. 
Sections 2 and 3 of the Act are obvious-
ly much alike and are aimed at the same 
evil. ' A violation of one section is fre-
quently and perhaps usually a violation of 
the other. To my mind, that is an added 
reason why neither section should be given 
a restricted meaning or weakened in any 
way by construction. I think that the evi-
dence in this ease shows that the appellant 
violated both sections 2 and 3 of the Act. 
I have no doubt that her conviction under 
section 2 was proper. 
ease of Mortensen v. United States, 
322 
S. 369, 64 S.Ct. 1037, has no appli-
cation to this case. In the Mortensen case 
the Supreme Court held that there was no 
evidence that the transportation was for 
any immoral purpose (page 374 of 322 U. 
S., page 1040 of 64 S.Ct.). In the instant 
case the evidence shows that the transpor-
tation of Dora Thomas front Minneapolis 
to Fargo was for an immoral purpose. 
I would affirm the judgment appealed 
from. 
EFTA00192173

ages. Generally, the intentional doing of 
a wrongful act with full knowledge of its 
character, and without cause or excuse, is 
malicious and warrants an award of ex-
emplary damages. 
Id. 468 P2d at 131. See Ford I Guarantee 
Abstract and Title Co, 220 Ka 
244, 559 
P.2d 254, 268—CS (1976); Watkins 
Layton, 
182 Kan. 702, 324 P2d 190, 195 (1958). It is 
apparent from the above-quoted language 
that "punitive damage malice" under Kan-
sas law contemplates the same reckless or 
intentional acts reflected in the New York 
Timer standard for "First Amendment mal-
ice" and its progeny, including Schulze. 
[19) Lastly, ARA asserts the district 
court erred in finding that its agent Cole-
man's statements were not qualifiedly priv-
ileged. Whether the defense is available is 
ordinarily a question of law for the court 
Mansell, supra, 494 P2d at 1078. 
The essential elements of a conditionally 
privileged communication may . . 
be enumerated as good faith, an interest 
to be upheld, a statement limited in its 
scope to this purpose, a proper occasion, 
and publication in a proper manner and 
to proper parties only. 
Senogles (Security Benefit Life Insurance 
Co., 217 
an. 438, 538 P2d 1958, 1863 
(1975). See Bradford, supra 548 P2d at 
1229. 
[20,21] Preliminarily, even if we disa-
greed with the district court, the error 
would be harmless, for in awarding punitive 
damages the jury found that ARA acted 
with the requisite malice to overcome a 
qualified privilege. See Schulze, supra 545 
P.2d at 399. In any event, ARA cannot 
claim qualified privilege here. The only 
reasonable inference from the evidence in 
the case was that Coleman's statements 
were made in an effort to further the busi-
ness interests of ARA by securing advan-
tage over a competitor through injury to 
the competitor's reputation. AAA's pecuni-
ary interest in this context is not an inter-
est entitled to the protection of qualified 
privilege. See Aetna Life Insurance I Mu-
tual Benefit Health and Accident Assoc., 82 
F.2d 116, 119 (8th Cir. 1986); Restatement 
UNITED STATES v. PELTON 
701 
au as PI rid MI unsi 
(Second) of Torts § 594, Comment g (1976); 
50 Am.Jur2d § 198, at 703. Moreover, the 
fact that Coleman waited until Mid-Ameri-
ca's agent had departed the meeting at 
which the bids were awarded before im-
pugning Mid-America's ability to perform 
the contract is persuasive evidence that 
publication was not made in good faith or in 
a proper manner. The district court did not 
err in ruling against qualified privilege. 
Because the district court's instructions 
were not plainly erroneous, and no other 
error appearing, we affirm. 
Affirmed. 
UNITED STATES of America, Appellee, 
v. 
Lloyd M. PELTON, Appellant 
UNITED STATES of America, Appellee, 
Jacqueline RICH, Appellant 
Not 77-1682, 77-1695. 
United States Court of Appeals, 
Eighth Circuit. 
Submitted Jan. 9, 1978. 
Decided June 7, 1978. 
Rehearing and Rehearing En Banc Denied 
in No. 77-1695 July 8 and in No. 
77-1682 July 24, 1978. 
Defendants were convicted in the Unit-
ed States District Court for the Eastern 
District of Missouri, H. Kenneth Wangelin, 
J., of violating the Mann Act, and they 
appealed. The Court of Appeals, Gibson, 
Chief Judge, held that: (1) evidence was 
sufficient to sustain convictions; (2) where 
tape recordings in Government's possession 
did not contain exculpatory evidence and 
EFTA00192174

702 
578 FEDERAL REPORTER, 2d SERIES 
Government made no direct or derivative 
use of tapes, trial court did not abuse its 
discretion in denying access to tapes; (8) 
evidence did not support assertion that 
Government denied access to prospective 
witnesses: (4) fact that attorney for grand 
jury witness had said he was going to ad-
vise witness not to testify was insufficient 
to establish unavailability of witness so as 
to authorize admission of witness' grand 
jury testimony; (5) motion for severance 
made prior to trial but not reviewed at close 
of Government's evidence or at conclusion 
of all evidence was waived, and (6) status of 
prostitution under Nevada law where wom-
an was sent to engage in prostitution had 
no bearing on illegality of agreement to 
transport woman in interstate commerce 
for purposes of prostitution. 
Affirmed. 
1. Criminal Law ea586, 1151 
Motion for continuance is addressed to 
sound discretion of trial court and refusal to 
grant continuance will be set aside only 
upon showing of clear abuse of discretion. 
2. Crindaal Law essnies(l) 
Where defense counsel supported mo-
tion for continuance only with speculation 
that there might be out-of-state witnesses 
whom he had been unable to interview prior 
to trial because of personal time strictures, 
Government's opposition was based on fear 
that delay could lead to unavailability of 
important government witnesses who were 
then in protective custody and 20-day peri-
od from time of defendant's arrest to trial 
was adequate time for trial preparation, 
trial court did not abuse its discretion in 
refusing to grant continuance 18 U.S.C.A. 
§ 3161 et seq. 
3. Criminal Law 4=627.7(2) 
Ordinarily, when defendant requests 
inspection of his or her statements which 
are in the possession, custody or control of 
Government, Government has duty of dis-
closure. 
Fed.Rules 
Crim.Proc. 
rule 
16(aX1XA), 18 U.S.C.A. 
4. Criminal Law ws627.5(2). 1166(1) 
Discovery matters are committed to 
sound discretion of district court and an 
error in administering discovery rules is 
reversible only on a showing that error was 
prejudicial 
to 
defendant's 
substantive 
rights. Fed.Rules Crim.Proc. rule 16, 18 
U.S.C.A. 
S. Criminal Lew ts,27,8(4) 
Ex parte proceeding was appropriate 
where Government's denial of defendant's 
request for tape recordings in Government's 
possession and Government's request for 
protective order were based upon concern 
for safety of persons cooperating on case 
whose identity would be revealed to defend-
ant if she heard tape. Fed.Rules Crim. 
Proc. rule 16(dX1), 18 U.S.C.A. 
6. Criminal Law en,827.8(3) 
Government which denied defendant's 
request for disclosure of tape recordings of 
her voice in Government's possession on 
ground of concern for safety of persons 
cooperating on case whose identity would 
be revealed to defendant if she heard tapes 
and which made ex parte presentation to 
court resulting in court's determination 
that tapes contained nothing exculpatory 
made sufficient showing for protective or-
der. Fed.Rules Crim.Proc. rule 16(dX1), 18 
U.S.CA. 
7. Criminal Law ese627.5(2) 
District court acted within its discre-
tion in denying defendant access to tape 
recordings of her voice in Government's 
possession where tapes contained no excul-
patory evidence and Government made no 
direct or derivative use of tapes. Fed.Rules 
Crim.Proc. rule 16(aX1XA), 18 U.S.CA. 
& Criminal LAM ess627.6(1) 
Discovery of prospective witnesses is 
not required under rule authorizing dis-
covery in criminal case. Fed.Rules Crim. 
Proc. rule 16(a), 18 U.S.C.A. 
9. Criminal Law se.627.6(1) 
Trial court did not abuse its discretion 
in refusing to order pretrial discovery of 
Government's witnesses. Fed.Rules Crim. 
Proc. rule 16(a), 18 U.S.C.A. 
EFTA00192175

10. Criminal Law *sloe 
Where defendant made no allegation 
whatsoever of contact between her employ-
ee and Government prior to trial and where 
Government denied having interviewed em-
ployee or even having known where she 
could be found and did not call employee as 
witness, there was no support for defend-
ant's assertion of governmental conceal-
ment of employee-witness. 
11. Criminal Law ems7C0 
Government's indictment of witnesses 
did not establish Government's concealment 
of prospective witnesses as defendant con-
tended. 
12. Criminal Law er=.6661/2 
Where witness was placed in protective 
custody of Government due to incidents 
suggesting that her safety was in jeopardy, 
witness made personal choice not to speak 
with defendant prior to trial, witness was 
present on trial date and made available to 
defendant and defendant interviewed wit-
ness and decided not to call her, there was 
no concealment of witness by Government 
as defendant contended. 
13. Criminal Law es627.8(1) 
Grand jury testimony is generally not 
discoverable on pretrial motion. 
18 U.S. 
C.A. § 3500. 
14. Criminal Law sw.627,6(1) 
If Government had called witness and 
she had testified, defendant would have 
been entitled to transcript of her grand 
jury testimony. 18 U.S.C.A. § 3500. 
15. Criminal Law ev.419(5) 
Unavailability requirement of rule au-
thorizing admission of hearsay statements 
of unavailable declarant places burden of 
producing unavailable declarant upon pro-
ponent of evidence. Federal Rules of Evi-
dence, rules 804, 804(aX1), 28 U.S.C.A. 
16. Criminal Law .- 642 
That grand jury witness' attorney had 
said he was going to advise witness not to 
testify at defendant's trial was insufficient 
to establish unavailability of witness so as 
to authorize admission of transcript of her 
UNITED STATES I PELTON 
703 
CIO as PS FM nil Oran 
grand jury testimony. Federal Rules of 
Evidence, rules 804, 804(aX1), 28 U.S.C.A.; 
U.S.C.A.Const. Amend. 5. 
17. Criminal law .- 1144.13(3) 
In considering contention that evidence 
was insufficient to support conviction, re-
viewing court must view evidence in light 
most favorable to Government. 
IS. Prostitution 4=4 
Evidence of female defendant's partici-
pation in plan for transportation of women 
to Chicago and Nevada for prostitution pur-
poses was sufficient to sustain her convic-
tion of violating Mann Act. 18 U.S.C.A. 
§§ 2421 et seq., 2422. 
19. Constitutional Law e42.3(l) 
Male defendant lacked standing to at-
tack Mann Act on basis that it violated and 
derogated right of females to seek legal 
employment. 
18 U.S.C.A. §§ 2421, 2422. 
20. Criminal Law ew.gr(1) 
Where defendant filed pretrial motion 
for severance but did not renew motion at 
close of Government's evidence or at conclu-
sion of all evidence, motion was waived. 
21. Criminal Law a' 1144.13(3, 
In analyzing contention that evidence 
was insufficient to sustain conviction, court 
would view evidence in light most favorable 
to Government and accept as established all 
reasonable inferences from evidence tend-
ing to support jury's verdict. 
22. Criminal Law 4=552(3), 561(1) 
It is not necessary that evidence ex-
clude every reasonable hypothesis except 
that of guilt but simply that it be sufficient 
to convince jury beyond reasonable doubt 
that defendant is guilty; such standard also 
applies in cases where conviction rests on 
circumstantial evidence. 
23. Criminal Law me652(4) 
Circumstantial evidence is intrinsically 
as probative as direct evidence for purposes 
of sustaining a conviction. 
24. Conspiracy 41=023 
Offense of conspiracy consists of an 
agreement between conspirators to commit 
EFTA00192176

704 
578 FEDERAL REPORTER. 2d SERIES 
an offense attended by an act of one or 
more of conspirators to effect object of 
conspiracy. 
25. Conspiracy 4=024, 47(2) 
Agreement between conspirators to 
commit an offense need not be express or 
formal and may be established by circum-
stantial evidence. 
26. Conspiracy 4=47(3) 
Evidence regarding agreement be-
tween defendant and another person to 
send women to Nevada to work as prosti-
tutes and to divide prostitutes' income was 
sufficient to sustain defendant's conviction 
of conspiracy to knowingly transport wom-
en in interstate commerce for purpose of 
prostitution in violation of Mann Act. 18 
U.S.CA. § 2421. 
27. Prostitution 4a I 
Prohibition of Mann Act is not keyed to 
legality or illegality of prostitution under 
law of state where transportation ends. 18 
U.S.C.A. § 2421 et seq. 
28. Prostitution east 
Status of prostitution under Nevada 
law had no bearing on illegality of agree-
ment to send women to Nevada to work as 
prostitutes under the Mann Act 18 U.S. 
CA. § 2421. 
29. Conspiracy a.38 
Prostitution east 
Consent is not a defense to charge of 
violating Mann Act or charge of conspiring 
to violate Mann Act. 18 U.S.C.A. §§ 2421, 
2422. 
30. Prostitution sal 
Woman's predisposition and willingness 
to go to Nevada to work as prostitute did 
not vitiate illegality of agreement to trans-
port her for purposes of prostitution in vio-
lation of Mann Act. 18 U.S.C.A. §§ 2421, 
2422. 
I. Prior to leaving this court to become Director 
of the Federal Bureau of Investigation. Judge 
Webster heard oral argument in this case. par-
ticipated in the conference thereon, and con• 
curred In the result. 
31. Prostitution east 
It is the inducement of transportation 
which is prohibited under section of Mann 
Act prohibiting inducement of a woman to 
be transported in interstate commerce for 
purposes of prostitution and not actual pro-
vision of that transportation. 18 U.S.C.A. 
§ 2422. 
32. Prostitution east 
When an offer to travel interstate for 
purposes of prostitution elicits a positive 
response from woman to whom it is made, 
offer constitutes requisite inducement un-
der Mann Act. 18 U.S.C.A. § 2422. 
33. Prostitution 0
0 4 
Evidence that defendant made induce-
ment sufficient to persuade woman to trav-
el to Nevada to engage in prostitution was 
sufficient to sustain defendant's conviction 
of violating Mann Act by persuading, induc-
ing and enticing woman to go in interstate 
commerce for purposes of prostitution, not-
withstanding assertion that women was 
willing to go to Nevada to work as prosti-
tute. 18 U.S.C.A. § 2422. 
Claude Hanks, Clayton, Mo., Hanks Tay-
lor & Suddarth, Clayton, Mo., filed brief, 
for appellant, Pelton. 
Irl B. Saris, St. Louis, Ma, for appellant 
Rich. 
David M. Rosen, Ant. U. S. Atty., ar-
gued, Robert D. Kingaland, U. S. Atty., St. 
Louis, Mo., on brief, for appellee. 
Before GIBSON, Chief Judge, and ROSS 
and WEBSTER,' Circuit Judges. 
GIBSON, Chief Judge. 
This case involves charged violations of 
the Mann Act arising out of certain inter-
state activities undertaken by a prostitution 
operation based in St. Louis, Missouri. In 
July 1977, the Government returned an 
eight-count indictment against Jacqueline 
"Pat" Rich, Lloyd Felton and Ann Fraziert 
2. Count I charged Rich and Frazier with con. 
'piracy to knowingly transport women in inter-
state commerce for purposes of prostitution in 
violation of 18 U.S.C. § 2421. The overt acts 
offered In support of this conspiracy charge 
EFTA00192177

UNITED STATES I PELTON 
705 
Cane ass rait 70 
Oen/ 
The first four counts of the indictment re-
lated to travel by prostitutes between St 
Louis, Missouri, and Chicago, Illinois; the 
second four counts related to travel be-
tween St Louis, Missouri, and Winnemucca, 
Nevada. 
In late September 1976, Fred Coughlin, 
then a sales representative for a boat com-
pany in the St. Louis area, asked Rich to 
provide prostitutes for a forthcoming boat 
show in Chicago. Rich agreed to let Cough-
lin take two call girls whom she employed 
to Chicago to "work" the boat show. She 
then directed Kathleen Bray and Charlotte 
Anderson to drive to Chicago with Cough-
lin. She also arranged for the separate 
transportation to Chicago of Kathleen Wag-
goner, another call girl in her employ. All 
three women travelled to Chicago as ar-
ranged by Rich and worked as prostitutes 
at a boat show; while in Chicago they were 
managed pursuant to arrangements made 
by Rich. Bray became ill and returned to 
St. Louis earlier than the others, who re-
turned at the conclusion of the boat show. 
Upon Bray's return to St. Louis, plans 
were made for sending her and another call 
girl known as Georgia to work at Penny's 
Cozy Corner, a house of prostitution in Win-
nemucca, Nevada. According to Bray, she 
was present at Rich's apartment when Rich 
and Pelton made arrangements for this 
trip. Pelton called an acquaintance of his 
at Penny's Cozy Corner and arranged for 
were alleged to have occurred on September 29 
and 30, 1976, in connection with the transpor-
tation of three call girls to Chicago to "work" a 
boat show. Three of the overt acts alleged in 
Count I formed the basis of the substantive 
violations of 18 V.S.C. 12421 with which Rich 
alone was charged in Counts II. III and IV. 
Count II charged Rich with a i 2421 violation 
with regard to Kathleen Waggoner. okra "Mo-
nica"; Count III charged her with a similar 
violation with regard to Kathleen Bray. aikia 
"Baby"; and Count IV related to the interstate 
transportation of Charlotte Anderson, sikia 
lc
"Frosty." 
violation of 3 2421. 
Count 
charged Rich and Pelton with con-
spiracy to 
violation
transport women in inter-
state commerce for purposes of prostitution in 
violation of 18 V.S.C. i 2421. The overt acts 
offered in support of this conspiracy charge 
related to the transportation of three women. 
Bray's stay there. It was agreed that he 
would receive $200 per girl for his place-
ment services. Rich gave Bray $200 to buy 
clothes and $250 to buy an airplane ticket to 
Nevada and to pay for a doctor's examina-
tion and the accessories that she would need 
at Penny's Cozy Corner. Rich was to re-
ceive a percentage of the money which 
Bray earned in Nevada. Bray flew to Ne-
vada and attempted to become licensed as a 
prostitute. Her application for a license 
was denied because she was under the age 
of eighteen, and she returned to St. Louis. 
Following Bray's return, Pelton and Rich 
made plans and arrangements, similar to 
those which they had made for her Nevada 
trip, for sending Shirley Dawson and Char-
lotte Anderson to Winnemucca. Pursuant 
to these arrangements, Dawson and Ander-
son travelled to Winnemucca in October 
1976, and began to work at Penny's Cozy 
Corner. They quickly discovered that em-
ployment in Nevada was not ea lucrative as 
they had imagined it would be and they 
returned to St. Louis after only a short 
tenure in Winnemucca. 
Rich and Pelton were tried jointly to a 
jury on the charges arising from the afore-
said events) Rich, who was charged in all 
eight counts, was found guilty on Counts 
I-VII and acquitted on Count VIII (Nevada 
trip of Anderson). She received an aggre-
gate sentence of ten years' imprisonment! 
Shirley Dawson, Kathleen Bray and Charlotte 
ifis
Anderson, to Winnemucca, 
vada, for pur-
poses of prostitution. Count 
charged Rich 
and Pelton with violating 18 . .C. 4 2422 by 
persuading, inducing and enticing Shirley Daw-
son to go to Winnemucca to act as a prostitute 
and by causing her to be transported there as a 
passenger upon the line and route of • common 
carrier in interstate commerce. Counts VII and 
VIII charged Rich and Pelton with similar viola. 
lions with regard to Kathleen Bray and Char-
lotte Anderson, respectively. 
3. Frazier indicated a willingness to dispose of 
her case in Chicago under the provisions of 
Fed.R.Crim.P. 20; she was not tried with Rich 
and Pelton. 
4. Rich was sentenced to a finer 
term of 
imprisonment on each of her seven convictions. 
EFTA00192178

706 
578 FEDERAL REPORTER, 2d SERIES 
i
ron, who was charged only in runts 
VIII, was found guilty on Counts 
(con-
spiracy involving trips to Nevada) and VII 
(Nevada trip of Bray) and acquitted on 
Counts VI and VIII (Nevada trips of Daw-
son and Anderson respectively). 
He re-
ceived two concurrent sentences of three 
years' imprisonment 
Both defendants appeal. We first con-
sider appellant Rich's contentions. 
Continuance 
Rich was arrested on July 11, 1977, and 
arraigned on July 18. At her arraignment, 
the District Court' set an August 1 trial 
date, despite protestations by Rich's counsel 
that this date would be inconvenient to him. 
On July 27, Pelson, who had also been given 
an August 1 trial date when he was ar-
raigned on July 11, filed a motion for a 
continuance and the Government filed a 
written response requesting a denial of the 
motion. On July 28, Rich moved for a 
continuance. 
When the case was called for trial on the 
morning of August 1, the District Court 
considered defendants' continuance mo-
tions. In support of their motions, both 
counsel asserted personal exigencies that 
had curtailed their pretrial preparation. 
Government counsel expressed opposition to 
the granting of a continuance, primarily 
because of his fear that delay of the trial 
could lead to the unavailability of several 
important Government witnesses who were 
then in protective custody. The District 
Court denied defendants' continuance mo- 
tions, and on the afternoon of August 1. 
vole dire examination of potential jurors 
was conducted, a jury was impanelled and 
trial was commenced. Rich contends that 
the trial court's refusal to grant a continu-
ance was erroneous because it precluded her 
attorney from making adequate prepara-
tion and investigation for her defense. 
She received concurrent terms of impilsonm 
on Counts I-IV. Her sentences on Counts 
VII nut concurrently with one another, but c 
secutively to the sentences in Counts I-IV. 
& 'The Honorable H. Kenneth Wanstlin. United 
States District Judge for the Eastern District of 
Missouri 
(I, 2] We note initially that a review of 
the trial transcript shows that Rich was 
vigorously defended at trial and belies the 
suggestion that counsel had less than ade-
quate time to prepare for trial. The twen-
ty-day period from time of arrest to trial 
appears adequate, particularly in view of 
the strictures of the Speedy Trial Act. 
Moreover, a motion for continuance is ad-
dressed to the sound .discretion of the trial 
court, and a refusal to grant a continuance 
will be set aside only upon a showing of 
clear abuse of discretion. United States 
Jackson, 5t9 F.2d 517, 528 (8th Cir.), cert. 
denied, 430 U.S. 985, 97 S.Ct 1682, 52 
LEd2d 879 (1977); United States' Webb, 
533 F2d 391, 396 (8th Cir. 1976). Counsel 
for Rich supported his motion for continu-
ance with the speculation that there might 
be witnesses in Chicago and Nevada whom 
he had been unable to interview prior to 
trial because of the personal time strictures 
of his life. In opposing a continuance, the 
Government presented specific and cogent 
reasons which went to the very viability of 
the prosecution. On these facts, we are 
unable to say that the trial court abused its 
discretion in refusing to grant a continu-
ance. 
Discovery of tape recordings in the Govern-
ment's possession 
[3] Discovery of evidence in criminal 
cases is governed by the provisions of Rule 
16 of the Federal Rules of Criminal Proce-
dure. Prior to trial, Rich made a request 
under Rule 16 for tape recordings of her 
voice which were in the Government's pos-
session. Ordinarily, when a defendant re-
quests inspection of his or her statements 
which are in the possession, custody or con-
trol of the Government, the Government 
has a duty of disclosure under Rule 
16(aX1XA).. 
In the instant case, the 
t 
Rule I6(a)(1)(A) provides in pertinent pan: 
Upon request of • defendant the government 
shall permit the defendant to inspect and 
copy or photograph: any relevant written or 
recorded statements made by the defendant. 
or copies thereof. within the possession cus-
tody or control of the government • • • 
EFTA00192179

UNITED STATES v. PELTON 
707 
ate.. an tad ni afro 
Government declined to disclose to Rich the 
tape recordings of her voice which were in 
its possession. Motivated by concern for 
the safety of persons cooperating on the 
case, whose identity would be revealed to 
Rich if she heard the tapes, the Government 
requested a protective order under Rule 
16(dX1), which provides: 
Upon a sufficient showing the court may 
at any time order that the discovery or 
inspection be denied, restricted, or de-
ferred, or make such other order as is 
appropriate. Upon motion by a party, 
the court may permit the party to make 
such showing, in whole or in part, in the 
form of a written statement to be in-
spected by the judge alone. If the court 
enters an order granting relief following 
such an ex parte showing, the entire text 
of the party's statement shall be sealed 
and preserved in the records of the court 
to be made available to the appellate 
court in the event of an appeal. 
In support of its request, the Government 
made an ex parte presentation to the court. 
Upon listening to the tapes, the trial judge 
concluded that they contained nothing ex-
culpatory of Rich. He then made the tapes 
a part of the record and issued a Rule 
If(dX1) order sealing them. 
The tapes 
were not used at trial. The Government 
also assures us that it made no use at trial 
of any evidence derived from the tapes. 
[4] Rich contends, nonetheless, that the 
court erred in denying her access to the 
recordings of her voice. Discovery matters 
are committed to the sound discretion of 
the district court and an error in adminis-
tering the discovery rules is reversible only 
on a showing that the error was prejudicial 
t
to the substan ' I rights of the defendant 
United States 
Crow Dog, 532 F2d 1182, 
1189 (8th Cir. 
6), cert. denied, 480 U.S. 
929, 97 S.Ct 1 47, 51 L.Ed2d 772 (1977); 
United States 
Cole, 453 F2d 902, 904-05 
(8th Cir.), sort 333enied, 406 U.S. 922, 92 S.Ct. 
1788,32 LEd2d 122(1972). Given the trial 
court's finding that the tape contained no 
7. In denying defendants' motion for preUial 
discovery of witnesses, the district Judge made 
it clear that his ruling had no bearing whatso-
ever on the Government's duty under IS U.S.C. 
exculpatory evidence and the fact that the 
Government made no direct or derivative 
use of the tapes, we find it difficult to 
understand how Rich could have been prej-
udiced by being denied access to the tapes. 
Moreover, a review of the record reveals 
that the protective order at issue here was 
entered in conformance with Rule 16(dX1), 
which specifically authorizes ex parte pro-
ceedings. The purpose of the order sought 
here was to protect the identity of persons 
cooperating on the case. An adversary pro-
ceeding would have defeated the very pur-
pose of the requested order by revealing 
their identities to Rich. 
[5-7] A review of the record, which in-
cludes the sealed tapes at issue here, con-
vinces us that an ex parte proceeding was 
appropriate on the facts of this case and 
that the Government made a sufficient 
showing for a protective order under Rule 
16(dX1). 
The District Court acted well 
within its discretion and in full compliance 
with Rule 16(dX1) in denying Rich access to 
the tapes in the Government's possession. 
Furthermore, Rich has made no showing 
that this order prejudiced her substantial 
rights. Her contention regarding the Rule 
16(dX1) order is without merit. 
Pretrial discovery of Government witnesses 
Prior to trial, defendant Rich moved to 
compel the Government "to make witnesses 
and statements" available. Etta Williams, 
a/k/a "Agnes Brittain," an unindicted co-
conspirator in Count I, was the only pro-
spective Government witness identified in 
the motion. The District Court denied the 
motion and refused to order pretrial dis-
covery of the Government's witnesses.' 
Rich contends that the trial court erred in 
refusing to order pretrial discovery of the 
Government's witnesses. She also suggests 
that the Government interfered with her 
investigation of the case by concealing pro-
spective witnesses from her. 
3500 to provide defendants with statements 
of witnesses after they had testified on direct 
examination at trial. It Is clear that the 
Government complied fully with 1 1500. 
EFTA00192180

708 
578 FEDERAL REPORTER, 2d SERIES 
(3 9] Rich's attack on the District 
Court's refusal to order pretrial discovery 
of witnesses is wholly lacking in merit. 
Discovery of prospective witnesses is not 
require! under Fed.R.Crim.P. 16(a), United 
States 
Krohn, 658 F.2d 890, 894 (8th Cir.), 
cert denied, 434 U.S. 888, 98 S.Ct. 
, 54 
L.Ed2A 145 (1977); United States 
Rog-
ers, 549 F2d 490, 494 (8th Cir. 197 , ii 
cen. 
denied, 431 U.S. 918, 97 S.Ct. 2182, 53 
L.Ed2d 220 (1977), and we can find no 
abuse of discretion in the trial court's refus-
al to order this pretrial discovery. More-
over, there is no support in the record for 
the suggestion that the Government imped-
ed Rich in the investigation of her case by 
denying her access to prospective witnesses 
Charlotte Anderson, Ann Frazier, Kathleen 
Waggoner and Etta Williams. 
(10,11] Rich employed Charlotte Ander-
son an call girl. She makes no allegation 
whatsoever of contact between Anderson 
and the Government prior to trial. The 
Government denies having interviewed An-
derson or even having known where she 
could be found; it did not call Anderson as 
a witness. Clearly there is no support for 
an inference of governmental concealment 
of Anderson. During the period in ques-
tion, Ann Frasier and Kathleen Waggoner, 
neither of whom was called as a witness by 
the Government at Rich's trial, had been 
charged with crimes by the Government. 
Rich presents this sole fact as the basis for 
her charge of concealment by the Govern-
ment The facts of this case simply do not 
support an equation of indictment with 
concealment and we decline to infer such an 
equation. 
[12) Etta Williams was the Govern-
ment's initial source of information in this 
case. Shortly after her involvement in the 
investigation of the case began, her apart-
ment was firebombed. This event, plus an-
other incident which suggested that her 
safety was in continuing jeopardy, resulted 
in her being placed in the protective custo-
dy of the Government and being given a 
new identity. Understandably, she did not 
wish to speak to defendants prior to trial. 
Rich has not shown that this reluctance on 
Williams' part was anything other than a 
matter of her own personal choice. The 
fact that the Government had undertaken 
to protect her does not transform this 
choice into governmental concealment 
Moreover, Rich's claim of prejudice because 
of her inability to interview Williams prior 
to trial is undercut by events which tran-
spired during trial. Williams was present 
on the trial dates and was made available to 
the defendants after the Government deter-
mined that it would not use her as a wit-
ness. Defendants interviewed Williams at 
that time and decided not to call her as a 
witness. We conclude that Rich has failed 
to establish that the Government precluded 
her from interviewing a witness willing to 
talk with her prior to trial or that her lack 
of pretrial contact with Williams was preju-
dicial to her defense. 
Grand jury testimony of Kathleen Waggon-
er 
Count II of the indictment underlying the 
instant case charged Rich with a § 2421 
violation with regard to the transportation 
of Kathleen Waggoner to Chicago. Wag-
goner's trip to Chicago was also one of the 
overt acts alleged in support of the conspir-
acy charged in Count I. On June 1, 1977, 
pursuant to a grant of use immunity, Wag-
goner testified before a grand jury investi-
gating possible violations by Rich of 18 
U.S.C. §§ 1503, 1952 and 2421. During her 
appearance before the grand jury, Waggon-
er denied that Rich had sent her to Chicago 
in 1976 to work as a prostitute at the boat 
show and also denied that Rich had ever set 
her up on prostitution data As a conse-
quence of this testimony, Waggoner was 
indicted on two counts of perjury before the 
grand jury in violation of 18 U.S.C. § 1623. 
This indictment, which was handed down on 
June 25, 1977, set forth verbatim those por-
tions of the grand jury transcript in which 
Waggoner denied that Rich had sent her to 
Chicago or set her up on prostitution dates. 
Waggoner was convicted on both counts of 
perjury at a trial which took place after the 
trial of Rich and Pekoe. 
EFTA00192181

03) In a pretrial motion, Rich sought 
"the testimony of all witnesses before any 
grand jury which investigated this matter 
which is favorable to this defendant." In 
its answer to Rich's motion, the Govern-
ment stated that it would provide grand 
jury transcripts only insofar as it was re-
quired to do so by 18 U.S.C. . 8500. The 
trial court sustained the Government's posi-
tion and denied Rich's motion. This ruling 
was consonant with the well-established 
rule in this circuit that grand jury testimo-
ny is generally not disco 
ble on pretrial 
r
motion. United States 
Harflinger, 436 
F.24 928, 935 (8th Cir. 1 0), cert. denied, 
402 U.S. 973, 91 S.Ct 1660, 29 L.E4.24 137 
(1971). 
[14) Waggoner was not called as a wit-
ness at Rich's trial. If the Government had 
called Waggoner and if she had testified, 
Rich would have been entitled to a tran-
script of her grand jury testimony under 18 
U.S.C. § 3500. Rich herself did not attempt 
to call Waggoner as a witness. Rather, she 
assumed that Waggoner would refuse to 
testify and sought, on that basis, to intro-
duce a transcript of Waggoner's grand jury 
testimony into evidence. 
On the morning of the third day of trial, 
counsel for Rich made the following in-
chambers presentation to the trial court: 
I have caused a subpoena to be served 
upon Kathleen Waggoner to testify. It is 
my understanding that she is under 
charges at the present time in this Court 
or in another Division and her attorney 
has indicated that he will advise her to 
invoke her privilege under the Fifth 
Amendment and refuse to testify. On 
that basis, Your Honor, I would request 
an opportunity to utilize her Grand Jury 
testimony and introduce portions of the 
Grand Jury testimony which would be 
relevant and request that the Govern-
ment furnish me with a copy of her 
Grand Jury testimony. I believe that it 
would be admissible pursuant to Rule 804 
of the Federal Rules of Evidence. 
The Government objected to the use of 
Waggoner's grand jury testimony. 
The 
court and both parties then discussed the 
UNITED STATES 1 PELTON 
709 
Cite is ste rid 7, ti 
general nature of Waggoner's testimony be-
fore the grand jury, the use immunity un-
der which she had testified and the perjury 
indictment then pending against her. The 
district Judge ultimately refused to allow 
Rich to introduce the transcript of Waggon-
er's grand jury testimony into evidence. 
Contemporaneously, however, he ruled that 
Rich could read Waggoner's indictment to 
the jury. Although this indictment con-
tained testimony in which Waggoner denied 
that Rich had sent her to Chicago or had set 
her up on prostitution dates, counsel for 
Rich chose not to introduce it into evidence. 
Rich now contends that Waggoner's 
grand jury testimony was admissible under 
Fed.R.Evid. 801(aX1) and that the trial 
court erred in refusing to allow her to intro-
duce the relevant portions of this transcript 
at trial. Rule 804 sets forth those instances 
in which the hearsay statements of unavail-
able declarants may be admitted into evi-
dence at trial. Rich relies upon § (01) of 
Rule 804, which provides that a declarant is 
"unavailable" if he or she "is exempted by 
ruling of the court on the ground of privi-
lege from testifying concerning the subject 
matter of his statement." 
(15,16) The unavailability requirement 
of Rule 804 places the burden of producing 
an unavailable declarant upon the pro 
nent of the evidence. 
United States 
Amaya, 533 F2d 188, 191 (5th (Sr. 193 
cert. denied, 429 U.S. 1101, 97 S.Ct 1125, 51 
L.E4.2d 551 (1977); 
see generally 11 
Moore's Federal Practice 1 804.02, at VIII-
239-40 (2d ed. 1976). Rich, the proponent 
here, accordingly had the burden of estab-
lishing that Waggoner would invoke her 
fifth amendment privilege and thus be una-
vailable to testify. Our review of the rec-
ord convinces us that Rich utterly failed to 
carry this burden. Counsel for Rich made 
no effort to produce Waggoner, whom he 
had subpoenaed, and to demonstrate first-
hand and in the court's presence that she 
did intend to refuse to testify in reliance on 
her fifth amendment privilege against self-
incrimination. Rather, he chose to raise the 
issue of her privilege in an extenuated and 
circuitous manner which gave tho court 
EFTA00192182

710 
578 FEDERAL REPORTER. 2d SERIES 
nothing more than a speculative basis for 
determining whether she was available. 
Rich's proof that Waggoner was unavaila-
ble under Rule 804(aX1) was that Waggon-
er's attorney had said that he was going to 
advise Waggoner not to testify. There was 
no indication that Waggoner had in fact 
been so advised or that, if she had been, she 
had decided to exercise her privilege. We 
consider Rich's suggestion, that Waggoner 
might in the future be advised of and then 
choose to exercise her fifth amendment 
privilege, to be a wholly inadequate show-
ing of unavailability under Rule 804(aX1). 
The trial court did not err in refusing, on 
this speculative basis, to allow Rich to intro-
duce into evidence the transcript of Wag-
goner's testimony before the grand jury.' 
Sufficiency of the evidence 
(17.18] Rich contends that the evidence 
was insufficient to support ber convictions. 
In considering this contention, we must 
view the evidence in the light mot favor-
able to the Government Glasser United 
Stets, 815 U.S. 60, 80, 62 S.Ct 457, 86 
LEd. 680 (1942). We have done so and we 
conclude that the evidence against Rich is 
legally sufficient to support her convictions. 
Indeed, the plethora of evidence of Rich's 
participation'in the transportation of wom-
en to Chicago and Nevada is such that we 
cannot find a close question of evidentiary 
sufficiency on any of the seven counts on 
which she was convicted. Under these cir-
cumstances we choose not to catalogue the 
S. Rich also argues that the Govemmeeyy 
breached its duty of disclosure under Brady 
Maryland. 373 U.S. 83. 83 S.Q. 1194. Ib 
L.Edld 313 (1963). by failing to release Was-
goner's grand jury testimony. Under Brady, 
governmental suppression at trial of "evidence 
favorable to an accused upon request violates 
due process where the evidence is material 
either to guilt or to punishment irrespective of 
1
the g 
faith or bad faith of the prosecution." 
Bndy 
Maryland. supra at 87, 83 S.Ct. at 
1196 
a can find no due process infringe 
ment in the Instant case. Unhke Brady. where 
the evidence suppressed by the prosecution did 
not come to the defendant's notice until after 
he had been tried, convicted and sentenced and 
his conviction had been affirmed, defendant 
Rich clearly had notice prior to trial of the 
evidence at issue here and in fact had access to 
evidence adduced against Rich. Suffice it 
to say that the evidence, when viewed in 
the light most favorable to the Govern-
ment, is more than sufficient to support the 
jury's verdicts of guilty on Counts 1-VII. 
We will now address defendant PeRon's 
contentions. 
Constitutionality of 18 U.S.C. § 2421 
(19] Pelton argues that since prostitu-
tion is legal in Winnemucca, Nevada, the 
destination of the female whose interstate 
transportation underlies his convictions, the 
Mann Act unconstitutionally violates and 
derogates "the rights of females to seek 
legal employment as guaranteed by the 
constitution of this country." As we have 
previously noted, "jilt is rather late in the 
history of the Mann Act to still be contend-
ing for its unconstitutionality. The Act has 
been consistently upheld • • • " (Cita-
tions omitted.) United States I Garrett, 
521 F.2d 444, 446 (8th Cir. 1976). Defend-
ant Pelton is not a female whose ability to 
seek legal employment was constrained by 
the Mann Act and he consequently lacks 
standing to attack to statute on this basis. 
See United States 
Garrett, supra at 446. 
Because of his lack of standing, we preter-
mit analysis of the substance of his consti-
tutional challenge, although we cannot help 
but note that its strength appears to lie in 
its ingenuity rather than in any degree of 
legal cogency. It is difficult to conceive of 
prostitution as being constitutionally guar-
anteed and protected. 
the crucial aspects of Waggoner's grand Jury 
testimony through the Waggoner indictment 
She chose not to introduce the indictment with 
this verbatim testimony Into evidence. 
We 
would ordinarily be hesitant to construe a tacti-
cal decision of this nature as an indicator of the 
materiality of evidente. 
Rich's subsequent 
treatment of Waggoner'' grand Jury testimony, 
however. supports the Initial impression that 
its worth to Rich's defense was nugatory. Al-
though Rich has had access to Waggoner's 
grand Jury testimony since Waggoner's trial. 
when it became a matter of public record, she 
has failed to specify any favorable evidence 
therein which she did not already have access 
to by way of Waggoner's indictment. On these 
facts. we reject Rich's claim that non-access at 
trial to Waggoner's grand Jury testimony con-
stituted a violation of her right to due process. 
EFTA00192183

Severance 
[20) Pelton filed a pretrial motion for 
severance which was denied by the District 
Court on July 27. At a pretrial proceeding 
on the morning of August 1, counsel for 
Pelton brought the severance issue back to 
the District Court's attention in a somewhat 
roundabout way, expressing the opinion 
that Pelton could not receive a fair trial 
because most of the evidence in the case 
was unrelated to Pelton. He made no for-
mal motion for a severance at this time, 
however. Moreover, it is undisputed that 
Pelton did not renew the motion for sever-
ance at the dote of the Government's evi-
dence or at the conclusion of all the evi-
dence. If not so renewed, the motion is 
"deemed waived." United States v. Porter, 
441 F2d 1204, 1212 (8th Cir.), cert. denied, 
404 U.S. 911, 92 S.CL 238, 30 LEd2d 184 
(1971). Accordingly, we hold that Pelton 
has waived his right to assert the severance 
issue. 
Sufficiency of the evidence 
Pelton was charged in only those four 
counts of the indictment related to the Ne-
vada trips. He was acquitted on Counts VI 
and VIII, which charged him with inducing 
the transportation to Nevada of Shirley 
Dawson and Charlotte 
demon. He was 
convicted on Count 
the conspiracy 
charge stemming from i he Nevada trim, 
and on Count VII, the charge involving the 
inducement of Kathleen Bray to travel to 
Nevada. Pelton contends that his convic-
tions on Counts VI and VII are not sup-
ported by sufficient evidence. 
[21-23] In analyzing this contention, our 
point of departure must be those well-worn 
principles which require us to view the evi-
dence
7
in the light 
t favorable to the 
Government, Glasser United States, 315 
U.S. 60, 80, 62 S.CL45 , 86 LEd. 6)30 (1942), 
and to accept as established all reasonable 
inferences from the evidence that tend
support the jury's verdict. United States 
Overshon, 494 F.2d 894, 896 (8th Cir.), cert. 
denied, 419 U.S. 858, 95 S.CL 96, 42 LEd.241 
85 (1974). We must, moreover, be guided 
by the general rule that "it is not necessary 
UNITED STATES I PELTON 
awn 5711 F.24 ?I/ (117$) 
that the evidence exclude every reasonable 
hypothesis except that of guilt but simply 
that it be sufficient to convince the jury 
beyond a reasonable doubt that 
defend-
ant is guilty." United States 
Shahan, 
517 F.2d 1178, 1177 (8th Cir.), 
denied, 
t
hahan., 
423 U.S. 893, 96 S.CL 191, 48 LEd2d 124 
(1975). This standard also applies In cases 
where the conviction rests on Itumstantial 
evidence, see United State/ 
Joyner, 639 
F.2d 1162, 1166 (8th Cir.), 
denied, 429 
(1976); United States 
Shahan., supra at 
U.S. 988, 97 S.CL 41 50 L.Ed2d 593 
1177, since circumstan 
evidence is intrin-
slant
s probative as direct evidence. Hol-
land 
United States, 848 U.S. 121, 140, 75 
S.CL 27, 99 LEd. 731 (1954). With these 
familiar principles in mind, we address Pel-
ton's attack upon the sufficiency of the 
evidence supporting his convictions. 
711 
Count V 
Count' charged Pelton and Rich with a 
conspiracy to "knowingly transport in inter-
state commerce a woman or girl for the 
purpose of prostitution or debauchery and 
other immoral purposes [a violation of Title 
18, U.S.C. § 2421]." The indictment posited 
that in furtherance of this conspiracy Rich 
and Pelton agreed to send women and girls 
from St.. Louis, Missouri, to Winnemucca, 
Nevada, for purposes of prostitution on var-
ious dates in October 1976, and that Rich 
gave Shirley Dawson, Kathleen Bray and 
Charlotte Anderson money to purchase tick-
ets to Reno, Nevada. 
Felton contends generally that the evi-
dence supporting his conspiracy conviction 
does not prove the existence of an unlawful 
agreement between him and Rich. More 
specifically, he argues that any agreement 
that may have existed was lawful because 
prostitution is legal in Nevada and/or be-
cause the women in question travelled to 
Nevada on their own volition. 
[24, 25) "The offense of conspiracy con-
sists of an agreement between the conspira-
tors to commit an offense, attended by an 
act of one or more of the conspirators to 
effect the object of the conspiracy." Unit-
EFTA00192184

712 
578 FEDERAL REPORTER, 2c1 SERIES 
ed States' Skillman, 442 F2d 642, 647 (8th 
Cir.), cert. denied, 404 U.S. 838,92 S.Ct. 82, 
30 LEd.24 83 (1971). The agreement need 
not be express or formal and it may be 
established 
b 
circumstantial evidence. 
1 8
United States 
Hutchinson, 488 F2d 484, 
490 (9th Cir. 
), cert. denied, 417 US. 
915, 94 S.Ct 2616, 41 L.Ed2d 219 (1974). 
Indeed, this. court has long recognized that 
since conspiracy is rarely susceptible of 
proof by direct evidence, it may properly be 
adduced from the conduct of the parti 
United States, 304 F.24 810, 825 (8th CI 
and the attending circumstances. Rizzo 
cert. denied, 871 U.S. 890,C
 S.Ct 188, 9 
LEd.2d 123 (1962); Goode 
United States, 
58 F2d 106, 107 (8th CG. 191222). 
[24] The conduct of the parties and the 
attending circumstances revealed by the 
record here support the existence of an 
agreement by Rich and Pelton to transport 
women to Nevada for prostitution purposes. 
Bray, one of the women so transported, 
testified that she was present at Rich's 
apartment in St Louis when Rich and Pel-
ton decided to send her and another call girl 
named Georgia to Penny's Cozy Corner, a 
house of prostitution in Winnemucca, Neva-
da. In Bray's presence, Pelton made a tele-
phone call to Penny's and arranged for her 
to work there. Pelton and Rich then gave 
Bray instructions on what to do when she 
reached Winnemucca. She was told to reg-
ister as a prostitute, which would require 
lying about her age since she was not yet 
eighteen years old, to get a doctor's exami-
nation and then to go to Penny's. Bray, 
Rich and Pelton agreed that Bray would 
give 40% of her earnings to Penny's and 
split the remaining 60% with Rich. Bray 
also agreed to pay Pelton $200 for setting 
her up at Penny's. To finance the trip, 
Rich lent Bray 8200 for clothes and 8250 for 
airfare, a license and the accessories which 
would be necessary at Penny's. Bray sub-
sequently flew from St. Louis to Nevada in 
accordance with the plans and arrange-
ments formulated by Rich and Pelton and 
attempted to become a prostitute. Upon 
being denied a license in Winnemucca be-
cause she was under age, she returned to 
St Louis. We believe that the evidence in 
this case was sufficient to have convinced 
the jury beyond a reasonable doubt that 
Pelton was guilty of participating in a con-
spiracy with Rich knowingly to transport a 
woman to Nevada in interstate commerce 
for purpose' of prostitution. 
[27, 28] We must reject as unavailing 
Pelton's attempt to legitimize his agree-
ment with Rich by arguing that prostitu-
tion is legal in Nevada and that Bray had a 
desire to travel to Nevada and to work 
there as a prostitute which pre-existed his 
participation in the plans. Section 2421 
flatly prohibits transportation of women in 
interstate commerce "for the purpose of 
prostitution or debauchery, or for any other 
immoral purposes"; its prohibition is not 
keyed to the legality or illegality of preen-
Lotion under the law of the state where the 
transportation ends. When Rich and Pel-
ton agreed to send Bray to Nevada to work 
as a prostitute, they made an agreement to 
violate § 2421, and the status of prostitu-
tion under Nevada law has no bearing on 
the illegality of this agreement under the 
Mann Act. 
[29,30] Equally lacking in legal merit is 
Pelton's suggestion that any agreement Ise 
may have had with Rich was legal because 
Bray was predisposed and willing to go to 
Nevada to work as a prostitute. Whether 
or not Bray was so predisposed and willing 
is immaterial to the illegality of Pelton's 
agreement with Rich to violate § 2121, for 
consent is neither a defense to a {dation 
charged under § 2421, GOSS& 
United 
States, 287 U.S. 112, 119, 53 S. 
35, 77 
L.F.1 206 (1982); Hattaway 
United 
States, 
F.24 481, 438 (5th 
. 1968); 
Wiley 
United States, 257 F2d 900, 906 
(8th Cir. 1968), nor to a viola" charged 
under § 2422 
Blumenfiedd 
United 
States, 284 F2d 46, 53 (8th Cir. , cart de-
nied, 865 U.S. 812, 81 S.Ct. 693, 6 LEd2d 
602 (1960). Pelton conspired with Rich to 
transport Bray in interstate commerce to 
Nevada for purposes of prostitution in vio-
lation of § 2421. Whatever Bray's degree 
of willingness to travel may have been, it 
does not vitiate the illegality of the agree-
EFTA00192185

VERVAECKE v. CHILES, HEIDER & CO., INC. 
Clan $71 F-24 713 OM 
ment to transport her for purposes of pros-
titution. 
Count VII 
Count VII charged Pelton and Rich with 
violating 18 U.S.C. § 2422 by persuading, 
inducing and enticing Kathleen Bray to go 
in interstate commerce to Nevada with the 
intent on their part that she engage in 
prostitution there, and with thereby know-
ingly causing her to be transported there as 
a passenger upon the line and route of a 
common carrier in interstate commerce. In 
challenging the sufficiency of the evidence 
supporting his conviction on this count, Pel-
ton does not dispute that Bray was trans-
ported to Nevada for purposes of prostitu-
tion. His attack on the sufficiency of the 
evidence pertains to the issue of induce-
ment He seems to contend that because 
there was evidence that Bray was willing to 
go to Nevada to work as a prostitute, the 
record will not support a finding of induce-
ment on his part. 
[3143) We are unable to agree. Even 
if we assume that Bray was willing to 
travel to Nevada to be a prostitute, the fact 
remains that by setting her up at Penny's 
Cozy Corner, Pelton helped provide the in-
ducement which caused her to make the 
trip.' It is the inducement of transporta-
tion which is prohibited under § 2422, not 
Jo
the actual 
vision of that transportation. 
Nunnally 
United States, 291 F2d 205, 
206-07 (6 
Cir. 1961). When an offer to 
travel interstate for purposes of prostitu-
tion elicits a positive response from a wom-
an to whom it is made, it constitutes a 
i
requisite inducement under the statute. 
Harms 
United States, 272 F2d 478, 481 
(4th Cir. 959), cert. denied, 381 U.S. 961, 80 
S.Ct 590, 4 LEd2d 543 (1960). The evi-
dence hem shows that Pelton made an in-
ducement sufficient to persuade Bray to 
travel to Nevada. We believe that Pelton's 
conviction under § 2422 with regard to 
Bray's inducement is supported by suffi-
cient evidence. 
Affirmed. 
t 
Indeed. the fact that until Pelton -placed" her 
at Penny's. Bray may have harbored an unful-
filled wish to go to Nevada to be a prostitute 
ors U- IS 
713 
Maurice M. VERVAECKE, Appellant. 
I 
CHILES, HEIDER & CO, INC., Dean Wit. 
ter & Co., Incorporated, Arthur Young 
& Company, Northwestern National 
Bank, Hospital Authority No. 1 of Sarpy 
County, Nebraska and Midlands Com-
munity Hospital, Appellees. 
No. 77-1923. 
United States Court of Appeals, 
Eighth Circuit. 
Submitted April 14, 1978. 
Decided June 9, 1978. 
Purchaser of corporate bonds brought 
securities fraud action against broker deal-
en, issuer's auditor and others. The United 
States District Court for the District of 
Nebraska, Albert G. Schatz, J., entered 
summary judgment dismissing the com-
plaint, and purchaser appealed. The Court 
of Appeals, Ross, Circuit Judge, held that: 
(1) reliance could not be presumed since 
case was not one involving primarily non-
disclosure but, rather, was based on fraudu-
lent misstatements and omissions in offer-
ing prospectus; (2) reliance element was 
lacking when purchaser did not see offer-
ing statements until after commitment to 
purchase had been made, and (8) it was not 
error to strike plaintiff's class action allega-
tions either as to bond issue in which he had 
dealt or issue in which he had not traded. 
Affirmed. 
I. Securities Regulation a ,14.4 
Reliance could not be presumed in secu-
rities fraud action brought by purchaser of 
corporate bonds and purchaser was obligat-
ed to state facts sufficient to raise a genu-
emphasizes rather than undercuts the causal 
relationship between Penult's Inducement and 
Bray's trip 
EFTA00192186