In the Matter of the Complaint That

DAVID TOMCHIN, and
SIDNEY GETZOFF, d/b/a
ELOISE A. WHITE, and
ELOISE A. WHITE,
CONSULTING ASTROLOGER,

at

New York, New York

(hereinafter called Respondent), is engaged in conducting a scheme for obtaining money through the mails in violation of 39 U.S. Code 259 and 732

P.O.D. Docket No. 1/40

INITIAL DECISION OF HEARING EXAMINER

            The General Counsel (hereinafter referred to as Complainant, by complaint filed on August 11, 1958, pursuant to the appropriate Rules of Practice of the Department, amended effective April 26, 1958, primarily charges the Respondent with violating 39 U.S. Code 259 and 732, in the conduct of an enterprise devoted to the sale of information based on astrology, by obtaining remittances of money through the mails by means of certain alleged false and fraudulent representations and promises made therefore.  It is also charged that the Respondent is making false and fraudulent representations in the sale through the mails of a so-called “Lucky Coin.”  Upon the filing of a complaint this proceeding was duly assigned to a certain Hearing Examiner.  The Respondent identified as a partnership composed of two individuals, David Tomchin and Sidney Getzoff (Tr. 49) duly filed answer together with authorization of representation by counsel, namely, George Landesman, Esq.  Thereafter on September 3, 1958, the proceeding as assigned to me and was duly heard on September 11, 1958, with Complainant being represented by a member of his staff, Anthony B. Leonetti, Esq.  At the conclusion of the hearing both parties requested opportunity as provided by the Rules, for the filing of proposed findings of fact, conclusions of law and supporting reasons.  The filing of said documents was fixed as provided by the appropriate Rule, for not later than September 30, 1958.  However, for substantial cause shown, the date for the filing of said documents was extended on request of counsel for Respondent, for ten days, namely to October 10, 1958.  Both parties duly filed their proposed findings and conclusions with supporting reasons.  Thereupon the record was completed for this decision.

            It is alleged under nine-subparagraphs that Respondent is making certain false and fraudulent representations and claims.  Seven of these sub-paragraphs relate to astrological information and advise sold by Respondent.  A sub-paragraph relates to the alleged claim that such information and advice will be furnished by “Eloise A. White, Astrologer.”  The ninth sub-paragraph deals with alleged representations made for the offered “Lucky Coin.”  In substance the representations alleged in the seven sub-paragraphs are to the effect that it is claimed and represented that through astrology the Respondent is aware of certain conditions which will enable the remitter to obtain personal and financial gain, for the next twelve months, to receive correct and accurate detailed personal day to day information and advice concerning the remitter’s social and domestic affairs which will reveal and will be shown marvelous opportunities to achieve maximum happiness, prosperity and success.  As to the “Lucky Coin” it is alleged that Respondent is representing that it possesses the power to bring health, wealth and happiness to the possessor.

            Respondent admits the conducting of the enterprise in question and the use of circulars as represented by the copies attached to the complaint.  Denial is made, however, of the making of the alleged representations and claims or that the enterprise violates the invoked statutes.

            At the commencement of the hearing counsel for the Respondent pleaded res adjudicata citing the proceeding instituted February 15, 1951, entitled in the Matter of Eloise A. White, F. & L. Docket 20/418.  The motion was denied (Tr. 6, 7) but for completeness of the record the ruling was held over for this decision so that an examination of the file of the cited case could be made to determine whether the case had been decided on the merits.  The file shows that it was not so decided having been dropped because it was determined that the proceeding should have been subject to the provisions of the Administrative Procedure Act.  Therefore, the ruling denying the motion is herewith confirmed.

            The Complainant presented as witnesses the investigating inspectors, namely W. J. Hegarty and William Skau.  Various test correspondence was received in evidence plus unsolicited circular matter received by one of the inspectors addressed to test names used by him.  Respondent’s motion to dismiss for failure of the Complainant to establish a prima facie case was denied and Respondent cautioned by the undersigned that to proceed would be at his peril since it is required that this decision be made on the entire record (Tr. 36-38, see Sections 7(d) and 8(b) of the Administrative Procedure Act and Rules 201.26 and 201.28(c)).  Counsel for Respondent stated that he was “willing to risk that…” but wanted “the record to indicate that I am not proceeding on my peril with regard to my defense of res adjudicata” (Tr. 38).  Thereupon counsel for Respondent proceeded with his defense.  He presented one of the partners, namely, David Tomchin, and two other witnesses who identified themselves as professional astrologers, one being employed by the Respondent to answer specific questions, and the other pursuant to an agreement, to furnish certain astrological information to the Respondent and who also testified about astrology and issues pertinent to this case.

FINDINGS OF FACT

a.  Preliminary Findings and Representations

            As proposed by both parties (numbered 1 and 2) I find:  That the Respondent is conducting the enterprise through the mails known as Eloise A. White and Eloise A. White, Consulting Astrologer, at New York, New York, in the sale of answers to questions on happiness, prosperity and success, personal astrology charts and of a so-called “Lucky Coin.”  That public attention is attracted to Respondent’s enterprise by means of unsolicited circular matter widely distributed to the public and which is calculated and intended to induce readers to remit money through the mails to the Respondent.

            Having examined the circular material and applying the tests laid down in the cases of Donaldson v. Read Magazine, 333 U.S. 178; Charles of the Ritz Dist. v. F.T.C., 143 F.2d 681, and cases cited therein, being in substance that the important criterion is the net impression the advertisement is most likely to make upon the general populace, I find that Respondent is making the claims and representations enumerated in sub-paragraphs a. through g. of paragraph (3), all of which relate to the information and advice to be supplied by Respondent from astrology.  I further find that such information and advice will be furnished by Eloise A. White, Astrologer, and not by others who use such name, as alleged in sub-paragraph i. of paragraph (3).  The implication is clear from the circulars that an individual of such a name would furnish the offered services.  It is noted that counsel for Respondent in his proposed findings on this issue of the representations made in the circulars, merely asserts to the effect that the advertisements speak for themselves and that the various alleged representations set forth in the several sub-paragraphs are not being made and he offers no assertion and/or argument as to what representations are being made.

            I also find using the aforesaid tests, that Respondent is not making the representations alleged as to the efficacy of the “Lucky Coin.”  There is no showing made that the advertisements are directed to any particular segment such as those to whom the item would appeal, viz., the ignorant, superstitious and the gullible, so that they would be adjudged by the effect on that segment.  Therefore, using the average person test of the general public I find that the item is being advertised for what it is, namely a lucky coin.  (See Hurley v. Dolan, 297 F. 825 and Henry b. Gottlieb d/b/a Twinz Co., et al. v. Schaffer, 141 F. Supp. 7).

b.  Falsity of the Representations and Fraudulent Intent

            Counsel for Complainant apparently bases his case as to both items, that is, the said advice and information and the “Lucky Coin,” on the premise that the claims and promises are so completely opposed to common knowledge that their falsity may be inferred from their preposterous character.  (Proposed findings, page 5, Tr. 30-34).  He also referred to the testimony of one of Respondent’s expert witnesses to show that the representations and claims regarding the said advice and information can not be fulfilled (Tr. 65, 72, 108, 122 and 133).  However, counsel for Complainant also cites the case of United States v. White, 150 Fed. 379 (incorrectly cited as 150 U. S. 379) as being applicable to the target ofhis principal charges, viz., the astrology part of the enterprise which remains for this decision, the facts being similar.  That case involved the counterpart criminal statute wherein the defendant was charged and found guilty of the fraudulent use of the mails in offering instructions to remitters as to how they could acquire occult and supernatural powers and for purporting to give special life reading, giving the horoscope of the remitter and the events of his life.  The question to be determined was not whether it was possible to impart such information but whether the defendant honestly and in good faith intended to do so.  It appears to me that the part of the enterprise under discussion falls within such a case.  This is not a forum for determining whether astrology should be recognized as a science and, therefore, whether based upon testimony from persons deemed to be qualified astrologers, that the representations are correct, that is, whether they are true or false.  Accordingly, I hold that the cardinal question as to Respondent’s main endeavor is whether Respondent in good faith believed the claims and representations heretofore found and intended to impart such promised advice and information.[1]  See also Post v. United States, 135 Fed. 1; New v. United States, 245 Fed. 710; Crane v. United States, 259 Fed. 480.  The following quotation from the Post case, page 9, is pertinent:

            The cardinal inquiry was:  Was she engaged in the business of treating and curing, or endeavoring to cure, applicants, or was she practicing a scheme or artifice to defraud?  It is not a question as to whether or not the method of treatment is one that should be approved or disapproved by the court and jury.  If it was as baseless as mundane astrology, it makes no difference, if the defendant believed in it and practiced it in good faith and without positive intention to defraud.  If, without belief in her professions or proposed treatment, and with knowledge that her representations were false, she made them to defraud, the fact that mental healing is a lawful vocation does not protect her.

            As was stated in the Gottlieb case, “An intent to deceive is rarely capable of direct proof, since this involves what is in a man’s mind.  It is hornbook law that this subjective element may be established by circumstantial evidence.  It is not any single element segregated from the whole by which the determination is to be made but from the totality of all the acts, conduct and surrounding circumstances and the inferences which may reasonably be drawn from a combination of acts and circumstances.”

            The record shows that the partners operating this enterprise, and who are not astrologers, purchased it in 1952 from the person known as Eloise A. White and under the agreement of sale was authorized to employ such name (Resp.’s Exhibit 2).  The circulars currently used do not differ substantially from the circular employed by the former owner.  See Respondent’s Exhibit 1 and Department’s Exhibits 1-A, 1-B, 1-C, 1-G and 1-H.  It was shown by one of Respondent’s expert witnesses that those who profess to have expert knowledge of astrology, that the predictions made for 1951 in the circular employed by the former owner, could not be made for 1958 (Tr. 132); and that the representations and predictions made in the current circulars could not be true according to their understanding of astrology (Tr. 96-100, 108, 121 and 129).  Of significance also is the fact that astrology deals with probabilities (Tr. 60).  Obviously the claims made in the circulars were far from probabilities.  The evidence also shows that the remitter was not furnished the promised personal detailed day to day advice or information. He received only a general annual horoscope or forecast pamphlet, in mimeographed or similar print form for a particular group.  That is, according to astrology there are twelve different groups of individuals based on the location of the sun (Tr. 91).  The remitter received such a general forecast, the particular one being dependent on the group to which he is classified.  In this furnished information was the promised personal day to day advice.  For example, in one of the test cases it is stated in the supplied pamphlet (Dept. Exhibit 2-B-3) as follows for June 1, 1958:

“If you have planned outings and trips for the day you will take them, no doubt, and have an interesting time.  Good for you.”

            The remaining representation concerns the name of the person who would actually work out the promised information and advice.  The record shows that such a person, known as “Eloise A. White” was not used during the current operation of the enterprise since she was only employed by the Respondent as an astrologer for “possibly one or two years” (Tr. 55) after she sold the business in October, 1952.  Therefore, I find such representation to be false.

            It is therefore, abundantly clear that the Respondent not only did not furnish anything resembling the promised information or advice but that the partnership did not intend to do so and if they did not actually know that they could not supply such promised information or advice they should have so known and by failure to so acquaint themselves with the truth or falsity of the representations according to astrology, are charged with knowledge to the extent required as acting with reckless disregard for the truth.  (See Corliss v. United States, 7 F. (2d) 455).  Therefore, in view of this and from the manner of advertising the material representations which Respondent did not fulfill as stated and should have known could not be fulfilled, I deem that the partnership did not operate the enterprise in question in good faith.

            The argument of counsel for Respondent that the operators would not have purchased the business if they believed the Department had not approved of the enterprise, (Tr. 50, 51, 53) I give no weight in view of the above finding of there being currently present an intent to deceive.  Counsel also argues that since qualified astrologers were employed to perform the required services, one being employed to answer individual questions and who testified at this hearing, it has been shown that the partners intended to give correct astrological advice and information.  However, this is not the issue.  The question is, as previously stated, whether the partners in good faith intended to supply the promised information and advice.  In other words whether an effort was made to provide the remitter with correct horoscope or forecast information, is far different from what the remitters are promised they would received for their $3.00 payment.  See Harris v. Rosenberger, 145 F. 449 wherein the Court stated:

            “Our conclusion is that when a business, even if otherwise legitimate, is systematically and designedly conducted upon the plan of inducing its patrons by means of false representations, to part with their money in the belief that they are purchasing something different from, superior to, and worth more than, what is actually being sold, it becomes an objectionable scheme or device within the intendment of section 3929 and 4041, although what is being sold may approximate in commercial value the price asked and received.  The difference between such a scheme or device and those where nothing whatever or nothing at all equivalent in value is intended to be returned for the money obtained is one of degree only, but not of principle.  Both are grounded in deceit, operating injuriously upon the public and constitute the obtaining of money by means of false pretenses.  A purchaser is entitled to receive what he is induced by the vendor’s representations to believe he is ordering and paying for, and not something which he does not order and may not want at any price.”

            Proposed findings of fact and conclusions of law not herein specifically found or concluded have been considered and are regarded as being immaterial or unjustified.

CONCLUSION OF LAW

            In view of the foregoing and as supported by the cited cases I conclude that the Respondent in the operation of the astrological enterprise is violating the invoked statutes as charged.  There is attached hereto the appropriate order for issuance by the Judicial Officer to suppress the fraudulent enterprise herein found.

Edward Carlick
Hearing Examiner

            [1] If the Respondent was found to be making the alleged representations concerning the “Lucky Coin” item, the aforesaid premise for establishing falsity of the representations would be applicable.