Arizona Republic from Phoenix, Arizona on August 16, 1970 · Page 43
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August 16, 1970

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Arizona Republic from Phoenix, Arizona · Page 43

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Phoenix, Arizona
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Sunday, August 16, 1970
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Page 43
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26-A The Arizona RepuBfiC ( J Mlfcl iiix, SOB.. Aug. 16. 1970 Computers would lessen gaps in tedious record-keeping More about Closer's warning Continued from Page A-l he has been a closer seven years. Before coming to Arizona in the 1950s he owned a business in a northern state. Later he lost all his savings in a business venture in Yuma. "After that," he said, "I couldn't get a regular job in Phoenix, so I went to work as a closer for Western Growth Capital." Methods of the real estate promotion firm, now defunct, included selling the same subdivision lots to more than one person in various parts of the country, he said. After Western Growth went bankrupt, leaving many investors holding the bag, the informer said he joined a Valley firm that sold carpeting. "This outfit," he said, "was really bad. And it's still in business today under another name. They sold carpeting for $25 to $40 a yard, or for whatever the market would bear. "The going price for the same carpet at legitimate stores would be no more than $8.95 a yard. Our par (lowest selling price) was $12.50 a yard. If we sold it at par, we (the closers) got $75 commission. Anything we sold over that would be split 50-50 with the house. 'We used every device short of a gun to sell the carpeting and managed to close at least 50 per cent of the leads we were given, "The technique goes well beyond the 'let the buyer beware' philosophy," he maintained. The line used by the dishonest salesmen when they invaded some of the smaller communities was that their company, which they sajd was E. I, Dupont, planned to establish a dealer in the community and, therefore, was using the town as a test area for a remarkable new type of carpeting with wearing qualities surpassing all others. "This new fiber, we'd tell them, is made with copper in it. We'd even give them a worthless certificate for a 25- year nonprorated guarantee. But the closer never signed his real name on the certificate. "Hell," he reflected, "in Nogales we even sold the sheriff, Zeke Bejarano. "Of course we didn't work for Dupont and we didn't have a franchise, as we told them we did. We were simply selling carpet from a mill in Georgia that anyone can buy. Naturally there was no copper in it." Throughout the interview, the informant repeatedly emphasized that lies and a glib tongue were the chief tools of the closer. This, he maintained, is the common practice with all such hucksters, regardless of the product they sell. "You've got to misrepresent. You can't walk into a person's home and ask him to buy a product for more than twice the amount it or its equivalent would cost in a legitimate store selling the same kind of merchandise." He charged that some businesses which employ closers are dishonest in other respects, including cheating on their federal income tax returns. "Many of (hem are outright thieves. They're stealing from the government. They're the greatest little bookkeepers. "According to my former employer's records, I was a freelance salesman, even though I received a $150 weekly salary (plus big commissions). During the four years I worked for him, I never had a dime taken out for income tax. "His records indicated- that the place was losing money. However, cash sales never went through the billing machine. They were written up on a carbon pad, with the customer given a receipt and the original thrown in the waste basket. "On occasions, I'd deliver $400 to $500 in cash to his big home. These were down payments and payments in full for merchandise. There's no record of it. Even his own accountant didn't know about it." Eventually, the informer said, the carpet company temporarily milked the state dry and the owner of the firm, a former closer himself, went into another business. The informer looked for another job and landed one with a Phoenix home improvement company. The business, he said, has few or no assets of its own. It merely subcontracts whatever work it lines up with unwary homeowners. This particular sales line, he said, avails itself of numerous gimmicks to peddle manifestly overpriced jobs, whether they involve roofing or a major remodeling project. It is also very lucrative for closers, he added. "I know a closer," he said, "who earned $70,000 in five months of last year. He's working for the same company. He's blown a lot of it on horses and women." The company, for instance, offers a 25-year guarantee on a roofing job. "They could just as well give you a 100-year guarantee," he said. "It would be just as good. What they do is periodically dissolve one corporation and reform another. The guarantee, of course, is in the name of the dissolved firm. "And let me point out," he continued, "that these aren't fly-by-night outfits. They're established businesses which are heavy advertisers. The so-called fly-by-njghters, who come in, make a hit and move out quickly, account for no more than a tenth of what these others steal in Arizona." Arizona, he estimated, has about 200 to 300 closers. And they're the cream of the crop. "Every now and then," he said, "snow birds from back East come in here with the idea of showing these country boys how to close. What they don't realize is tJjat the sharpest closers in the United States live right here hi Phoenix." If potential victims of these operations fall for the pitch of the telephone solicitor, the informer said, they are virtually doomed. The closer, if he's any good at all, won't give his victims an opportunity to shop around for prices on the same merchandise. They have, he explained, nu- More about Local justice Continued from Page A-l Last January Judge Hardy reduced from $22.000 to $2,200 the bond set by Tolleson JP Verne Sessions on Cornelio Enriquez, 51, an ex-convict with four previous burglary convictions who was charged again with burglary. The deputy prosecutor on the case, Robert Storrs, concurred with Hardy's action, saying: "Bond is a right, and if it's prohibitive that right is denied." In order to meet the worst part of the bail problem, the 1969 legislature passed a law which provides that a defendant's bond can be revoked by the courts if there is probable cause to believe that he committed a second crime while free on bond on the earlier felony charge. Again, most lawyers and judges believe the law violates the Arizona Constitution and probably federal court mandates. The state constitution plainly declares that all persons accused of crimes have a right to bail except in cases involving the death penalty. The 1969 law is in limbo, pending a decision from the Arizona Supreme Court in the Carson Rendel case, another typical example of bail abuse. Rendel, 28, has been charged with nine felonies since February 1969 and is yet to be convicted on any of the charges. He was free on bail totaling $79,500 when Berger's office moved to revoke his various bonds. A Superior Court judge did revoke Rendel's bonds, he appealed, and the Supreme Court took the case. Meanwhile, Rendel remains free. Whatever the court decides, the state's voters will have a crack at the same issue at the Nov. 10 general election. The ballot will contain a referendum Proposition 100, to amend the state constitution to conform to the 1969 bond revocation law. Finally, the next legislature should consider a bail bond proposal put forward by Supreme Court Justice Fred C. Struckmeyer Jr. Struckmeyer proposes to avoid the constitutional pitfalls of denying bail by attacking the problem from another angle. He suggests a law that would take the profit out of providing bail for criminal repeaters. Under Struckmeyer's plan, the courts would be empowered to declare a bail bond forfeit, immediately and in cash, when it is shown that an accused felon committed a crime while free on bail. The accused would not be prevented legally from obtaining another bond, but the bonding companies probably would refuse, and after a few such experiences their financial position would be precarious. INEPT PROSECUTION Throughout The Republic's investigation, judges, JPs, defense lawyers and even some of Berger's own deputies nave commented on the poor quality of work by his young, inexperienced and perhaps overworked staff. Several of the cases probed by newsmen failed in court for no other apparent reason than inept prosecution Examples: Last month, robbery charges against a 45-year-old ex-convict who had spent 30 years in prisons were reduced by one of Berger's deputies to assault with a deadly weapon. The sentence imposed was 9%-10 years compared with a possible life sentence for robbery. The prosecutor; Randy Evans, told a newsman at first that he took the plea to the lesser charge because key witnesses could not be located. However, when the witnesses later came forward to refute this, Evans changed his story. He admitted that he was actively seeking pleas to reduced charges rather than going to trial, an opinion that is widely held throughout the Superior Court about Berger's staff in general. Evans said, "I'm not going to go before a jury any more if I don't have to." Mike Davis of Ready Bail Bond Agency secures client's release soon after arrest In another case a few months ago, a major receiver of stolen auto parts was convicted on four counts, but the conviction was overturned by the Supreme Court because the county attorney used a transcript of a witness' testimony without any effort to produce the witness in the courtroom during preliminary hearing. In still another case, a Superior Court judge dismissed a robbery charge against a 31-year-old ex-convict twice convicted of similar crimes because prosecutors could not produce a key witness, the getaway driver. Berger's deputies admitted to a Republic reporter last week that they had no knowledge of a state law that would allow them to place material witnesses under bond or in jail prior to trial. Last week, a manslaughter charge was dismissed in a JP court because Berber's office was not ready to prosecute, but the county attorney was given permission to refile the case. He did, but in the wrong JP court where it's likely to be dismissed again for being filed improperly. A number of judges, JPs and other lawyers assert that Berger's deputies go to court poorly prepared, fail to review cases properly or interview witnesses before filing charges. Judge Hardy has declared that Berger's staff has been depleted of experienced lawyers because they "didn't like being treated like children." A Republic check of Berger's prosecuting staff showed that 18 of 28 deputies have no more than a year of prosecution experience, and eight others less than two years. Berger concedes that the lack of experience is crippling criminal prosecution but asserts that the departure of 20 to 25 lawyers in the 19 months he has been in office is less than the turnover experienced by his predecessors in the job. Maricopa County will have no career prosecutors, he says, until the salary horizon for deputies is raised. By law, the ceiling for deputies is set by Berger's own salary of $18,000 a year. Most of Berger's critics agree that salaries must be raised to attract and keep experienced prosecutors. The Citizens Committee on Respect for Authority urges citizens to petition the county board of supervisors to raise the pay of deputy prosecutors, but a meaningful change will require a revised state law. COURT FOUL-UPS The Republic's probe also disclosed numerous administrative blunders and great gaps in information between Solicitations often ethical This account of the activities of a "closer" is intended to make readers of The Arizona Republic aware of the shady practices and come-ons of those home solicitation firms which use them. It should not be deduced from this story that .all home solicitation businesses are dishonest or unethical or that all deal in high pressure sales tactics. And the story is not meant to imply that members or supporters of the Direct Sellers Association deal in these unethical practices or that this group has anything but the most legitimate and honest motives for challenging the promulgation of H.B. Uf. various parts of the court system. Examples: A defendant in one JP court -was released an his own recognizance (without bail) although he was already under $5,500 bond from another JP court in a rape-sodomy case. The JP handling (he second case had no knowledge of the earlier charge because neither the police nor the prosecutor told him. Last July 29 a Superior Court judge ordered the arrest of a defendant who had failed to appear for sentencing only to learn later that the man was serving a sentence in city .jail. The police said they notified the courts, but nobody told the judge. On July 31, Berger's chief criminal deputy, Thorn Novak, was cited for contempt of court and fined $25 by Judge Howard F. Thompson because no one from Berger's office had. appeared at a scheduled hearing on the validity of a search warrant. It was the second time that Thompson had cited Berger's deputies for contempt for failing to appear in court as scheduled. Sometimes these blunders are only embarrassing and inconvenient, but sometimes they are costly, resulting in lost witnesses, charges dismissed, quick and easy freedom for dangerous criminals. Judges and JPs interviewed by The Republic concede that when they set bail on defendants they seldom have any information available to them about the past record of the accused or about other charges pending against them. Sheriff John Mummert offered recently to provide background information on accused criminals from his files to any jurist who requests it, a suggestion that was welcomed by JPs and judges. But Superior Court Administrator Gordon Allison insists that Maricopa County should go much further to cure the foul-ups inherent in a system composed of 17 justice courts and 21 Superior Court trial divisions, all of which operate independently. Allison wants the courts and law enforcement agencies to join forces in a central, computerized criminal data file which would give all users instant access to a bank of information that would never be more than a few hours old. According to Allison, who worked with a similar system in Kansas City, the data bank could keep track of defendants from arrest to sentencing, monitor court schedules, trial dates and dozens of other aspects of criminal prosecutions. In addition it would give police up-to-the-minute field information on crime suspects. Federal funds are available to start the $1 million-plus project, but user agencies would have to dig up matching funds. COURT DELAYS The Republic's investigation disclosed that delays in prosecuting are absolutely commonplace, especially in the JP courts. A study of 21 cases involving hardcore criminal repeaters uncovered 82 continuances in the preliminary hearings in JP courts. In those same cases, a 4-month lapse between arraignment in the justice courts and the conclusion of preliminary hearings was common. This is in spite of the fact that the Supreme Court's rules of criminal procedure require the hearings to be held within six days except when there is "good cause" for postponement. In one fairly typical case involving a repeater high on the police list of known burglars, prosecutors spent 14 months bringing him to trial, due in large part to four consecutive continuances granted by JP John J. Murphy. One effect of continuances is to leave the professional criminal free to steal in order to pay bail bondsmen and lawyers. Another common result is that prosecution witnesses will drop out of sight, leave the area or get fed up and become uncooperative. Although defense attorneys are responsible for the majority of trial delays, The Republic's study showed that Berger's prosecutors also ask for their share of delays or agree to defense requests. Among the 21-key criminal cases examined, prosecutors asked for 10 continuances and agreed to eight others. Novak told a reporter that "99 per cent" of prosecution requests for delays are the result of missing witnesses. Novak also labeled as "impractical" a proposal to speed certain key cases involving professional criminals through the courts. The proposal, made, by leading defense attorney John J. FJynn, was endorsed by several JPs and Presiding Judge Hardy. Flynn proposed that the courts give priority to cases involving known criminals who might commit more crimes, based on a revolving list supplied and updated by police. Allison asserts that a comouterized data system would also cut delays and speed up prosecution by opening up all of the cases scattered through JP and Superior Courts to constant scrutiny. While Berger's office has excused a number of recent court failures on' grounds of delays and missing witnesses, his deputies offered no suggestions for dealing with these problems Bill would regulate, not ban home sales Protecting consumers from hieh nrp«. "TK;. ^ ., . .", merous methods to convince customers * that they will regret not signing a contract before the closer leaves. Those who manage to escape by insisting that the closer call the following day or w£ek, the informer said, probably will never see the closer again. "If we don't close on the first call," he said, "that's the end of that. There's aii old saying among closers: 'We'll sell our callbacks for $5 apiece.' " . r The average person, the informer closer said, has little conception of the true retail value of many conunodities and services. Protecting consumers from high pressure salesman was the impetus behind house bill 102, which would have become law last Tuesday had it not been blocked by petitions of the Direct Sellers Association, The measure would have regulated home solicitation sates by: — Giving the buyer a 2-day cooling off period during which a contract could be canceled. — Prohibiting referral selling in conjunction with a home solicitation sale. - Providing that banks, finance companies or others buying consumer installment contracts would assume liability for warranties, guarantees and other promises made in the contract by the seller. This would apply only to sales made in the home of a buyer. It was this last provision that alarmed businesses relying on the installment credit system to sell products at customer's homes, In a way, the provision extended the principle of "let the buyer beware" to banks and finance companies and withdrew their time-honored legal shelter provided by the doctrine of "holder in due course." The holder in due course doctrine was defined by Jerry Levine, staff attorney for the Maricopa County Legal Aid Society. "This theory provides, for instance that a third party purchaser of a retail installment sales contract may exact payment from the buyer of the goods whether the goods are satisfactory or even if there was deception in the original sale. "Typically," Levine explained, "the installment seller quickly discounts the note to a finance company or bank. This means that under the law of Arizona the buyer must continue to pay even if the merchandise is never delivered or does not live up to warranty. "The consumer's only recourse," Levine added, "is to bring suit against the seller, a remedy which for most people is no remedy at all." The abolition of the holder in due course doctrine, as it applies to all consumer-type purchases, and not just home solicitation sales is one of the primary goals of poverty lawyers like Levine throughout the nation. At least three states have done this Officials of those states, contrary to the pre-aboliHon warnings of the financial lobbies, maintain that the credit systems have not suffered as a result. If finance companies were made responsible for the terms of the contracts they buy, public service attorneys reason, they would be forced to police the practices of (he sales operations they help to suppori. If they failed to police, and the sellers left town or reneged on their promises to customers, the finance companies : could find themselves holding worthless notes which no court would honor. As House Bill 102 points out, its purpose is to regulate, "not prohibit," home solicitation sales. Such a sale is defined a sa personal solicitation by the seller to buy goods or services at a home other than that of the seller when all or part of the pur- ' chase price is payable in installments. A cash sale would be exempt from the ; law. This would exempt such companies as Fuller Brush and Avon, who normally , deal in cash sales. The law apparently also would not ap- , ply to home solicitors who would close '•, the sale at the buyer's home, but then have the buyer come to their office at a later time to sign the installment contract. A purchase from a seller who has a fixed business location when the buyer has a pre-existing .account with him also"'. would be exempt. Exemption also would \ be extended to a sale made as a result • of prior negotiations at a fixed location. "' Such a sale would be void at the option of the buyer if th§ seller offered a rebate of discount in return for a list of other prospective buyers. Any type oi referral selling would violate the law.

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