By EUGENE B. SLOAN
Staff Writer

A Pontiac supermarket operator, Earl J. Jacobs, was convicted Wednesday of failing to file a required return on the dispotion of a quantity of sugar.

Jacobs’ two-day trial ended at 3 p.m. in U. S. District Court here when the jury returned with the guilty verdict. The trail had been in progress since Tuesday afternoon.

U. S. District Judge Charles E. Simons diferred passing sentence until Friday.

Jacobs was charged under a Treasury Department regulation imposing special restrictions on stores through “demand letters.” These letters restrict the sale and disposition of materials, such as sugar and jars, used in the production of moonshine whisky. Jacobs’ store was under such a letter.

Demand letters are issued when it si felt that too much of such material, especially sugar, is being handled by stores. In Jacobs’ case it meant that he had to file a return on all sales or dispositions of more than 24 pounds of sugar to a single individual in a single day.

The limitation vary from store to store, some stores being absolutely forbidden to sell any sugar.

Thomas L. Wagner, and investigator of the Alchol and Tobacco Tax Division (ATTD) of the Treasury Department, testified Tuesday that he observed Jacobs’ supermarket with binoculars Oct. 17, 1964 from a vantage point across the road. He testified that Jacobs brought a 60-pound bale of sugar and a pasteboard barton from the back to the front of his store where they were later transferred to the car of Walter Edward Gibbs, who is now serving a probationary sentence for bootlegging.

Wagner and ATTD Agent Charles Yoakum testified that the Gibbs car was later stopped and found to contain 150 pounds of sugar. Another ATTD agent testified that no return was filed on this sugar.

Jacobs took to the stand Wednesday morning to deny that he had sold any sugar to Gibbs.

He testified that Gibbs had come by earlier in the week and told him about some sugar he had obtained through the trade of two mules. Jacobs said Gibbs asked that it be applied against his account. He said he returned this request, but let him keep it at the store.

Jacobs said Gibbs returned for the sugar on October 17, took it and put it in his car. He demed that he had never sold or disposed of sugar in excess of 24 pounds, and that was the reason he had not filed any returns.

Jacobs admitted that he had been found guilty of a liquor violation on August 5, 1958, but denied that Gibbs had ever hauled liquor for him

But Gibbs testified in rebuttal that he had been employed by Jacobs to haul liquor. (the rest was not able to be transcribed.)