## Facts

- Federal prosecutors charged Falcone and other suppliers, along with numerous illicit distillers, with a single conspiracy to violate internal revenue laws by operating multiple illegal stills near Utica, New York.
- The supplier-defendants were jobbers/distributors who sold lawful commodities such as sugar, yeast, and cans; some of these goods were later used by the distiller-defendants to produce untaxed liquor.
- The indictment alleged, as to certain suppliers, that they sold these materials knowing they would be used in illegal distilling, but it did not specifically allege that the suppliers knew of the overarching conspiracy.
- At trial, the jury convicted several distillers and five supplier-defendants on the conspiracy count.
- The court of appeals reversed the suppliers’ conspiracy convictions, concluding that proof of sales with knowledge of illegal use, without proof of participation in the charged agreement, was insufficient.

## Issues

1. Whether a seller who provides lawful goods to buyers, knowing the goods will be used to produce illicit distilled spirits, may be convicted as a co-conspirator in a conspiracy to violate the revenue laws absent proof that the seller knew of and agreed to the conspiracy.

## Decision

- The Supreme Court affirmed the reversal of the supplier-defendants’ conspiracy convictions.
- The Court held that selling materials with knowledge they will be used for illegal distillation, without knowledge of the conspiracy and without agreement to participate, does not establish conspiratorial liability.
- The Court accepted the lower court’s assessment that the record did not show the suppliers joined or agreed to the distillers’ overarching plan.

## Legal Principles

- Conspiracy requires proof of an agreement; liability does not rest on mere association with wrongdoers or awareness that one’s conduct may facilitate a crime.
- A supplier’s knowledge that goods will be put to illegal use is insufficient to prove the supplier was a member of a criminal conspiracy, absent proof the supplier knew of the conspiracy and agreed to further it.
- Ordinary commercial sales, even when made with awareness of a buyer’s unlawful purpose, do not become conspiratorial without evidence of concerted action directed to the unlawful scheme.

## Conclusion

The Court limited conspiracy liability for suppliers by requiring proof that the seller knew of and agreed to the criminal conspiracy; knowledge that lawful goods will be used in illegal distilling, standing alone, does not make the seller a conspirator.


United States v. Falcone, 311 U.S. 205 (1940)