UNITED STATES of America, Appellee, v. Melvin Douglas PIEPGRASS, Tom H. McCandless and Wayne Hofhines, Appellants

Three individuals, jointly tried in the District Court, appeal from their respective convictions for fraud and conspiracy. The case involved several rather complex factual issues centering around an alleged conspiracy to commit fraud in the sale of securities. Each appellant asserts, in various contexts, that the evidence was not sufficient to support his conviction. From our reivew of the record, we have concluded that the judgments of conviction of two of the appellants must be affirmed and that the judgment as to the third, Hofhines, must be reversed.

It would be helpful, we think, first to outline the basic nature of the alleged conspiracy before discussing the evidence as it bears upon the individual appellants.

THE BASIC SCHEME

On January 24, 1964, a corporation called Dairy Snow, Inc. (hereinafter DS) was organized under the laws of Idaho by M. D. Piepgrass, Vernon K. Smith, and Henry D. Scott, who were the incorporators and first directors. Piepgrass is one of the three appellants here, Smith was a leading Idaho attorney who is now deceased, and Scott was an insurance agent who was not charged as a defendant in that case. Piepgrass held two-thirds of the stock of the…