260 U.S. 94, 43 S. Ct. 39 (1922)
In October 1919 through January 1920, the steamship Dio belonged to the United States.1 The United States owned all the stock in the United States Shipping Board Emergency Fleet Corporation.2 The National Shipping Corporation agreed to operate and manage the Dio for the Fleet Corporation.3 The Fleet Corporation was to pay for fuel, oil, labor, and material used in the operation.4 The Dio was on a voyage to Rio de Janeiro under this management.5
Wry was her master.6 Bowman was her engineer.7 Hawkinson was the agent of the Standard Oil Company at Rio de Janeiro.8 Millar was a merchant and ship repairer and engineer in Rio.9 Of these four, who were the defendants in the indictment, the first three were American citizens, and Millar was a British subject.10 Johnston & Company were the agents of the National Shipping Corporation at Rio.11
The indictment charged that the plot was hatched by Wry and Bowman on board the Dio before she reached Rio.12 Their plan was to order, through Johnston & Company, and receipt for 1000 tons of fuel oil from the Standard Oil Company, but to take only 600 tons aboard.13 They were to collect cash for a delivery of 1000 tons through Johnston & Company from the Fleet Corporation.14 Then they would divide the money paid for the undelivered 400 tons among the four defendants.15 This plan was made possible through the guilty connivance of the Standard Oil agent Hawkinson and Millar the Rio merchant who was to, and did collect the money.16 Overt acts charged included a wireless telegram to the agents, Johnston & Company, from the Dio while on the high seas ordering the 1000 tons of oil.17 The Southern District of New York was the district into which the American defendants were first brought and were found, but Millar, the British defendant, has not been found.18
The first count charged a conspiracy by the defendants to defraud the Fleet Corporation in which the United States was a stockholder.19 It did so by obtaining and aiding to obtain the payment and allowance of a false and fraudulent claim against the Fleet Corporation.20 It laid the offense on the high seas, out of the jurisdiction of any particular State and out of the jurisdiction of any district of the United States, but within the admiralty and maritime jurisdiction of the United States.21 The second count laid the conspiracy on the Dio on the high seas and at the port of Rio de Janeiro as well as in the city.22 The third count laid it in the city of Rio de Janeiro.23 The fourth count was for making and causing to be made in the name of the Standard Oil Company, for payment and approval, a false and fraudulent claim against the Fleet Corporation in the form of an invoice for 1000 tons of fuel oil, of which 400 tons were not delivered.24 This count laid the same crime on board the Dio in the harbor of Rio de Janeiro.25 The fifth count laid it in the city and the sixth at the port and in the city.26
No objection was made to the indictment or any count of it for lack of precision or fullness in describing all the elements of the crimes denounced in section 35 of the Criminal Code as amended.27 The sole objection was that the crime was committed without the jurisdiction of the United States or of any State thereof and on the high seas or within the jurisdiction of Brazil.28 The District Court considered only the first count, which charged the conspiracy to have been committed on the Dio on the high seas.29 Having held that bad for lack of jurisdiction, a fortiori it sustained the demurrer as to the others.30 This is a writ of error under the Criminal Appeals Act to review the ruling of the District Court sustaining a demurrer of one of the defendants to the indictment.31
Whether section 35 of the Criminal Code, as amended in 1918, applies to a conspiracy to defraud a corporation in which the United States is a stockholder when the conspiracy is formed and executed on the high seas or within a foreign country?32
Criminal statutes protecting the government from fraud are not logically dependent on their locality for jurisdiction.33 They are enacted because of the right of the government to defend itself against obstruction or fraud wherever perpetrated, especially if committed by its own citizens.34 Their locus may be inferred from the nature of the offense to include the high seas and foreign countries.35
Yes. The rule applies to the facts here because the indictment charged a conspiracy to defraud the Fleet Corporation, in which the United States owned all the stock, by obtaining payment for 1000 tons of fuel oil when only 600 tons were delivered.36 The plan was formed on the high seas aboard the Dio, a vessel belonging to the United States, by American citizen defendants Wry and Bowman with the connivance of Hawkinson.37 The 1918 amendment to section 35 was intended to protect the Emergency Fleet Corporation, which engaged in extensive ocean transportation with ships in ports worldwide, from precisely such frauds on the high seas and in foreign countries.38
Section 35 of the Criminal Code applies to the conspiracy charged in the indictment even though formed and executed on the high seas or in a foreign country.39
Whether the District Court for the Southern District of New York had jurisdiction to try American citizen defendants for such an offense when they were first brought into that district?40
Under section 41 of the Judicial Code, the trial of all offenses committed upon the high seas, or elsewhere out of the jurisdiction of any particular State or district, shall be in the district where the offender is found, or into which he is first brought.41 American citizens are subject to laws protecting the United States and its property.42 There is no offense to the sovereignty of a foreign nation in holding them for such crimes.43
Yes. The three American defendants were first brought into and found in the Southern District of New York.44 As citizens they remain subject to statutes protecting the United States and the Fleet Corporation in which it was sole stockholder.45 The conspiracy was laid on the high seas within the admiralty jurisdiction of the United States, and Brazil suffers no affront to its sovereignty when the United States prosecutes its own citizens for defrauding its own corporation.46
The District Court for the Southern District of New York had jurisdiction to try the American citizen defendants for the offense charged.47