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NCAA regulations permit universities to award only thirteen basketball scholarships per year. When Piggie's payments to these players were discovered, the Universities became subject to NCAA penalties. Each school lost the use of one of the thirteen scholarships and lost the value of each player's participation due to the player's NCAA-required suspension. The scholarships were forfeited, and the Universities lost the opportunity to award the scholarships to other top amateur athletes, who had actual eligibility to play intercollegiate basketball. In 1999 and 2000, UCLA lost the benefit of playing Jaron Rush, the $44,862.88 scholarship awarded to him, and also forfeited $42,339 in tournament revenue; Missouri lost the benefit of playing Kareem Rush, and the $9,388.92 scholarship awarded to him; and OSU lost the benefit of playing Williams and the $12,180 scholarship awarded to him. Duke provided Maggette with a $32,696 scholarship for the 1998-1999 season based upon the false assertion that he was an eligible amateur. As a result of the ineligible athlete's participation, the validity of Duke's entire 1998-1999 season was called into question. ⁴

NCAA regulations also required each of the four Universities involved to conduct costly internal investigations after Piggie's scheme was discovered. UCLA spent $59,225.36 on the NCAA-mandated investigation of Jaron Rush, Duke spent $12,704.39 on the NCAA-mandated investigation of Maggette, Missouri spent $10,609 on the NCAA-mandated investigation of Kareem Rush, and OSU spent $21,877.24 on the NCAA-mandated investigation of Williams. The total monetary loss to the Universities was $245,882.79. The scandal following the disclosure of Piggie's scheme caused further intangible harms to the Universities including adverse publicity, diminished alumni support, merchandise sales losses, and other revenue losses.

Pembroke Hill High School (Pembroke), where Jaron and Kareem Rush played high school basketball, sustained a loss of $10,733.89 in investigative costs and forfeiture of property as a result of the conspiracy. Pembroke was placed on probation by the State of Missouri after the violations of Jaron and Kareem Rush were discovered and a mandatory investigation of the matter was concluded.

After Piggie's guilty plea, the district court sentenced him to 37 months imprisonment, three years supervised release, and $324,279.87 in restitution.

II. DISCUSSION

Piggie contends the district court (1) miscalculated the losses, actual and intended, in determining his Guidelines base offense level; (2) erred in including consequential or incidental losses for restitution; and (3) based the tax loss calculation on insufficient evidence. We will address these issues in order.

A. Loss Calculation

A scheme to deprive a university of its right to the "honest services" of college basketball players is within the definition of mail and wire fraud, even if it results in a winning basketball program. See United States v. Gray, 96 F.3d 769, 774-75 (5th Cir. 1996) (finding wire and mail fraud prosecution appropriate for Baylor University basketball coaches who schemed to obtain scholarships for ineligible players). The coaches' scheme in Gray was fraudulent "because Baylor did not get the quality student it expected . . . [and Baylor] might have been able to recruit other qualified, eligible students to play basketball." Id. at 775. Like the Universities and Pembroke, Baylor instead "was forced to institute a costly investigation" and withhold players from competition. Id. Piggie and his co-conspirators, the athletes, intentionally misled the Universities into believing the athletes were amateurs. This caused each University to be deprived of the honest services of an athlete as well as the use of one of the basketball scholarships awarded annually. The scheme also directly resulted in investigative costs and fines to ensure compliance with NCAA regulations.

Piggie argues the district court incorrectly calculated the amount of loss attributable to him in enhancing his base offense level under the Guidelines. See U.S.S.G. §2F1.1(b)(1) (2000). ⁵ We review the district court's interpretation and application of the Guidelines de novo. United States v. Oligmueller, 198 F.3d 669, 671 (8th Cir. 1999). Loss calculations also involve factual findings, which we review for clear error and reverse only if "we are left with the definite and firm conviction that the district court erred." United States v. Whatley, 133 F.3d 601, 606 (8th Cir. 1998).

The calculation method must be reasonable. The amount of loss "need not be determined with precision." Id. The loss determination is not limited to money handled by Piggie, but includes reasonably foreseeable losses caused by coconspirators, which losses were part of the same conspiracy. Id. at 606-07.

In calculating the amount of loss under section 2F1.1(b)(1) of the Guidelines, the district court uses either the amount of the actual loss suffered by the victims or the amount of loss the defendant intended to cause the victims. U.S.S.G. §2F1.1 cmt. n.8(6); United States v. Morris, 18 F.3d 562, 570 (8th Cir. 1994). In instances where the actual and intended loss are not the same amount, the district court uses whichever amount is greater. Id. In Piggie's case, the district court determined the greater loss for consideration under the Guidelines was the intended loss to Pembroke and the Universities, including forfeited scholarships, investigation costs, and fines.

Piggie contends on appeal that he did not intend any loss to the Universities, because if the scheme had gone as he planned, the payments to the players would never have been discovered and the Universities would have incurred no loss. This self-serving argument fails in that it is undisputed that Piggie intended to deprive the Universities, their athletic conferences, and the NCAA of the intangible right to award scholarships to amateur players and maintain a system of amateur athletic competition. Even if his scheme had never been discovered, the Universities would have been deprived of the services of honest, amateur basketball players. We decline to accept Piggie's invitation to calculate intended losses based upon Piggie's succeeding with his fraud and deception. We agree with the district court that all of the losses to Pembroke and the Universities were "intended as the natural and probable consequences of the defendant's actions in this matter."

Piggie argues under Oligmueller and similar cases that the full loss to the Universities cannot be considered intended for the purpose of the Guidelines, because Piggie never intended that the Universities would suffer as a result of his scheme. See Oligmueller, 198 F.3d at 671; see also United States v. Anderson , 68 F.3d 1050, 1054-55 (8th Cir. 1995). In Oligmueller, when a farmer secured a loan using fraudulent collateral, but fully intended to pay the loan back, the intended loss calculation was zero and the actual loss determined the sentence. Oligmueller, 198 F.3d at 671. The actual loss calculation was the entire value of the loan reduced only by payments made from the "sale of pledged assets." Id. Even though the bank received value in the form of payments made with other assets, we refused to reduce the actual loss calculation based upon those other payments. Id. Even if we were convinced Piggie's intentions were analogous to the farmer's intentions in Oligmueller, and thus reduced the intended loss calculation, Piggie's actions still caused the actual losses in the amount of the full scholarships, fines, and investigative fees. The Guidelines calculation utilizes whichever loss calculation is greater. Morris, 18 F.3d at 570. Supposing arguendo that Piggie intended the Universities to receive some value from the athletes' participation in intercollegiate basketball, Piggie's intent does not diminish the amount of actual loss he caused the Universities and Pembroke.

Finally, we agree with the district court that the greatest loss caused by Piggie's fraud is the most difficult to appraise--the damage Piggie did to the athletes' lives. Although Piggie's behavior does not excuse the young athletes from the bad choices they made, these high school students put their faith and trust in Piggie, counting on him to help them develop their talent. Piggie took advantage of the trust these young athletes placed in him and exploited their immaturity and vulnerability. Instead of acting as a positive role model to the young men in his care, Piggie led them down the path of corruption and deception. As the district court stated, "bad decisions, wrong decisions and career-threatening and devastating decisions were caused to be made" and these decisions will no doubt have life-long repercussions for each athlete involved.

We therefore affirm the district court's loss determination.

B. Restitution Award

The district court ordered restitution under the Mandatory Victim's Restitution Act of 1996 (MVRA), 18 U.S.C. §3663A. Piggie argues for the first time on appeal that the district court committed plain error in including incidental or consequential damages in the restitution award. Restitution orders are reviewed for plain error when the defendant does not preserve his challenge to the restitution order below. United States v. Riebold, 135 F.3d 1226, 1231 (8th Cir. 1998). Our plain error review is "extremely narrow and is limited to those errors which are so obvious or otherwise flawed as to seriously undermine the fairness, integrity, or public reputation of judicial proceedings." United States v. Beck, 250 F.3d 1163, 1166 (8th Cir. 2001).

We do not agree with Piggie that the district court committed plain error in including the investigative costs and NCAA fines in the calculation of the restitution order, because these investigative fees and fines are not incidental or consequential damages. These losses were "caused by the specific conduct that is the basis for the offense of conviction." See United States v. Akbani, 151 F.3d 774, 780 (8th Cir. 1998) (citations omitted). The district court did not commit plain error by including the investigative fees and fines in the restitution order.

C. Tax Loss Calculation

Piggie argues the court clearly erred in calculating his gross unreported income and tax due. Piggie contends on appeal the amount of tax loss should have been $18,286, instead of $67,662.69 as determined by the district court. Piggie argues the government had the burden of proving the tax loss and the only documentation before the district court was the pre-sentence report, to which Piggie had objected. On the contrary, Piggie stipulated in the plea agreement that there was "a tax loss of $67,662.69 for the period of 1995-1998." A defendant who voluntarily accepts the provisions of a plea agreement cannot challenge on appeal the punishment to which he willingly exposed himself, because the defendant accepts both the benefit and the burden of the plea agreement. United States v. Durham , 963 F.2d 185, 187 (8th Cir. 1992). We find the district court's tax loss determination was not in error.

III. CONCLUSION

For the foregoing reasons, we affirm the opinion of the district court.

¹ The Honorable Gary A. Fenner, United States District Judge for the Western District of Missouri .

² Piggie spent an unnecessary portion of his brief and oral argument attempting to refute the allegation that a $5,000 payment he made to Jaron Rush was a bribe for Jaron Rush to attend UCLA instead of the University of Kansas . The reason why Jaron Rush chose to attend UCLA is irrelevant to the issues before us on appeal.

³ Young signed a contract in 1998, directly out of high school, to play for the NBA Detroit Pistons, and did not play intercollegiate basketball.

⁴ Maggette played the full 1998-1999 season for Duke before Piggie's scheme was uncovered. At the time of the sentencing hearing, NCAA action against Duke was still pending. Duke was subject to the forfeiture of its second place finish in the 1999 NCAA Tournament and the loss of $226,814.51 in tournament revenue.

⁵ The district court utilized the Guidelines in place at the time of sentencing, section 2F1.1(b)(1) of the 2000 Guidelines. In November 2001, the Sentencing Commission consolidated section 2F1.1 with section 2B1.1.

 

 

[2001-1 USTC ¶50,370] United States of America , Plaintiff-Appellee v. Edward Louis Kotmair, Defendant-Appellant

(CA-4), U.S. Court of Appeals, 4th Circuit, 00-4139, 4/19/2001, 2001 U.S. App. LEXIS 7200. Affirming an unreported District Court decision

[Code Sec. 7203 ]

Failure to file returns: Willfulness: Evidence.--The district court properly determined that an individual's failure to file tax returns for three consecutive tax years was due to willfulness. He stipulated that his income for the tax years at issue exceeded the exemption amounts. Moreover, he failed to keep business records, operated his business on a cash basis in amounts less than $10,000, and was a member, and the son of the founder, of a tax protest organization.

[Code Sec. 7203 ]

Failure to file returns: Conduct: Sophisticated means.--An individual's sentence for failure to file tax returns was enhanced because he failed to offer any evidence to refute information in a presentence report indicating that he used sophisticated means to impede discovery of the nature or extent of his offense.

Janice McKenzie Cole, United States Attorney, Anne M. Hayes, David J. Cortes, Assistant United States Attorneys, Raleigh, N.C., for plaintiff-appellee. Gregory J. Ramage, Law Office of Gregory Ramage, Raleigh , N.C. , for defendant-appellant.

Before: NIEMEYER, TRAXLER and GREGORY, Circuit Judges.

è Caution: This court has designated this opinion as NOT FOR PUBLICATION. Consult the Rules of the Court before citing this case.ç

Per Curiam"

EC: Edward Louis Kotmair was charged with willful failure to file tax returns for the years 1990, 1991, and 1992, in violation of 26 U.S.C.A. §7203 (West Supp. 2000). Kotmair stipulated that he did not file tax returns for those years and that he had income in excess of the exemption amount. The only issue at trial was whether Kotmair's failure to file was willful. Following his convictions and sentence, Kotmair appeals. We affirm.

Kotmair first argues that counsel was ineffective for failing to call his father as a defense witness and that the district court erred in denying his motion for a new trial on this basis. Because Kotmair failed to present argument supporting his challenge to the court's denial of his motion for a new trial, it is waived on appeal. See Fed. R. App. P. 28(a)(6); Edwards v. City of Goldsboro, 178 F.3d 231, 241 n.6 (4th Cir. 1999).

As for Kotmair's challenge to counsel's failure to call his father as a witness, because the record on appeal does not conclusively demonstrate ineffective assistance of counsel, we do not now address this issue. See United States v. Richardson, 195 F.3d 192, 198 (4th Cir. 1999), cert. denied, 528 U.S. 1096, 145 L.Ed.2d 704, 120 S.Ct. 837 (2000). Rather, Kotmair may raise this claim in the district court in a 28 U.S.C.A. §2255 (West Supp. 2000) motion, if he so chooses.

Kotmair next challenges the sufficiency of the evidence to support his convictions. Kotmair stipulated that he did not file tax returns for 1990, 1991, and 1992, and that his income exceeded the exemption amounts. The only issue before the jury was whether Kotmair's failure to file was willful. See Cheek v. United States [91-1 USTC ¶50,012], 498 U.S. 192, 201-02, 112 L.Ed.2d 617, 111 S.Ct. 604 (1991). The trial evidence, viewed in the light most favorable to the government, Glasser v. United States, 315 U.S. 60, 80, 86 L.Ed. 680, 62 S.Ct. 457 (1942), showed that Kotmair had large amounts of income for the years in question, he failed to keep business records, he conducted business largely on a cash basis, he attempted to hide income and assets by requiring payments in amounts less than $ 10,000, he belonged to a tax protest organization, namely Save a Patriot Fellowship, he was notified by the IRS of his duty to file a return, and his father--founder of Save a Patriot--went to jail for his failure to file. This evidence was sufficient for the jury to infer that Kotmair's failure to file was willful. See Spies v. United States [43-1 USTC ¶9243], 317 U.S. 492, 499-500, 87 L.Ed. 418, 63 S.Ct. 364 (1943) (finding that inference of willfulness may arise from attempts to conceal income or assets, failure to keep books or records, and conducting business largely on cash basis); United States v. Turano [86-2 USTC ¶9714], 802 F.2d 10, 12 (1st Cir. 1986) (inference of willfulness from tax protest activities); United States v. Shivers [86-1 USTC ¶9404], 788 F.2d 1046, 1048 (5th Cir. 1986) (inference of willfulness from disregard of notices informing of duty to file); United States v. Ostendorff [67-1 USTC ¶9204], 371 F.2d 729, 731 (4th Cir. 1967) (allowing inference of willfulness from pattern of failure to file). We find that, taking the evidence in the light most favorable to the government, any rational juror could have found Kotmair guilty beyond a reasonable doubt. Glasser, 315 U.S. at 80; United States v. Saunders, 886 F.2d 56, 60 (4th Cir. 1989) (holding that in resolving sufficiency of evidence, appeals court does not weigh evidence or review credibility of witnesses).

Kotmair next argues that the district court clearly erred in determining that the amount of tax loss exceeded $ 350,000. He asserts that applying the tax loss computation rules in U.S. Sentencing Guidelines Manual §2T1.2(a) (1992), for the years 1990, 1991, and 1992, yields a tax loss of $ 166,889.21. In computing the tax loss, however, Kotmair failed to include all relevant conduct. The tax loss computation should include losses suffered by the federal and state governments in the years of conviction as well as other years in which the defendant's failure to file was "part of the same course of conduct or common scheme or plan," unless clearly unrelated. USSG §2T1.2, comment. (n.3); see United States v. Bove, 155 F.3d 44, 47 (2d Cir. 1998); United States v. Powell, 124 F.3d 655, 663-65 (5th Cir. 1997). We find that the district court properly considered losses from years other than the years of conviction and losses to the states in computing the tax loss attributable to Kotmair, and therefore did not clearly err in adopting the recommendation in the presentence report that the total tax loss exceeded $ 350,000. See United States v. Daughtrey, 874 F.2d 213, 217 (4th Cir. 1989).

The final issue Kotmair raises is whether the district court clearly erred in enhancing Kotmair's offense level by two for the use of sophisticated means to impede the discovery of the nature or extent of his offense. "Sophisticated means" includes"conduct that is more complex or demonstrates greater intricacy or planning than a routine tax evasion case." USSG §2T1.2, comment. (n.2). The district court applied the enhancement after noting that Kotmair engaged in structuring and laundering of his income to prevent the creation of currency transaction reports. Because Kotmair failed to offer any evidence to refute the findings in the presentence report, there was no clear error by the district court in adopting these findings. See United States v. Love, 134 F.3d 595, 606 (4th Cir. 1998); United States v. Terry, 916 F.2d 157, 162 (4th Cir. 1990).

In conclusion, we affirm Kotmair's convictions and sentence. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the court and argument would not aid the decisional process.

AFFIRMED

 

 

[74-1 USTC ¶9312] United States of America , Plaintiff-Appellee v. Randall L. Parks, Defendant-Appellant

(CA-5), U. S. Court of Appeals, 5th Circuit, No. 73-2786, 2/7/74, Aff'g unreported District Court decision

[Code Sec. 7201]

Crimes: Tax evasion: Defenses.--A trailer park operator was properly convicted of evading 1966 and 1967 income taxes. The bank deposits method of reconstructing income adduced sufficient evidence to support the jury's verdict. Moreover, the government's proof did not depart impermissibly from its bill of particulars and it was not error to admit a statement of the taxpayer's accountant that tended to show that the taxpayer was aware of his liability.

William H. Stafford, United States Attorney, J. Worth Owen, Assistant United States Attorney, Pensacola, Fla., Scott P. Crampton, Assistant Attorney General, Meyer Rothwacks, John P. Burke, Richard B. Buhrman, Department of Justice, Washington, D. C. 20530, for plaintiff-appellee. Lacy Mahon , 77 Washington St. , Jacksonville , Fla. , for defendant-appellant.

Before GEWIN, COLEMAN and MORGAN, Circuit Judges.

PER CURIAM:

Randall L. Parks appeals from the district court's judgment of conviction for evading and defeating his income tax in violation of 26 U. S. C. §7601. Parks challenges the sufficiency of the Government's evidence which resulted in the jury's verdict of guilty. Further, he alleges that the Government's proof departed impermissibly from the method of proof delineated in its bill of particulars and trial brief. Finally, Parks contends that the trial court erred in admitting into evidence an admission of his accountant which tended to show that he was aware of his tax liability.

During the years in question, 1966 and 1967, Parks operated a trailer park and rented apartments in Pensacola , Florida . For the tax year 1966, appellant reported a negative net taxable income of $2,036.39 and in 1967, a net taxable income of $8,555.77. For each year, the appellant reported a tax liability of zero.

To prove its case of tax evasion against Parks, the Government utilized the bank deposits and cash expenditures method of proof. Under this method the Government must demonstrate that the taxpayer has a business of a lucrative nature and that during the tax years in question, the taxpayer made regular periodic deposits of money in bank accounts in his own name or in accounts over which he exercised control. Where the annual deposits exceed exemptions and deductions, the balance represents taxable income to the taxpayer. We have previously approved this method of proof. See Escobar v. United States [68-1 USTC ¶9125], 388 F. 2d 661, 667 (5th Cir. 1967), cert. denied, 390 U. S. 1024, 88 S. Ct. 1141, 20 L. Ed. 2d 282 (1968); Holbrook v. United States [54-2 USTC ¶9640], 216 F. 2d 238, 240 (5th Cir.), cert. denied, 349 U. S. 915, 75 S. Ct. 605, 99 L. Ed. 1249 (1955).

Viewing the evidence in a light most favorable to the Government, the jury verdict is amply supported by the facts. Glasser v. United States , 315 U. S. 60, 62 S. Ct. 457, 86 L. Ed. 680 (1942). The Government's evidence established that appellant's income for 1966 amounted to over $26,000.00 and in 1967 to over $39,000.00. This resulted in a tax liability of $6,341.86 for 1966 and $5,963.92 for 1967. At trial appellant and his wife attempted to show that they entered the tax years under scrutiny with a substantial amount of cash on hand. This position was taken despite the fact that appellant had inconsistently informed IRS agents during their investigation that he had never carried over $1,000 in cash on hand at any one time. Whether appellant's allegations were to be given credence was a question for the jury. By its verdict, appellant's attempted cash-on-hand defense was rejected.

Appellant's final two contentions are equally without merit. The Government's bill of particulars informed appellant adequately of the facts which it intended to prove and the evidence subsequently submitted for the jury's consideration did not vary from the essential facts delineated in the bill of particulars or its trial brief. Furthermore, admissions of a taxpayer's agent within the scope of his employment, here an accountant, are admissible against the taxpayer in a tax evasion prosecution. See Hayes v. United States [69-1 USTC 9204], 407 F. 2d 189, 192 (5th Cir. 1969).

Accordingly, the judgment of conviction is affirmed.

 

 

[58-2 USTC ¶9829] United States of America v. Harry J. Alker, Jr., Appellant

(CA-3), U. S. Court of Appeals, 3rd Circuit, No. 12,313, 260 F2d 135, 9/10/58, Affirming an unreported District Court decision

[1939 Code Sec. 145(b)--similar to 1954 Code Sec. 7201]

Criminal prosecution for tax evasion: Understatement of income: Sufficiency and admissibility of evidence: Improper question: Instructions to jury: Expert witness: Circumstantial evidence: Motion for continuance.--Taxpayer was convicted on charges of willful tax evasion under 1939 Code Sec. 145(b) for failure to report substantial amounts of income for 1947, 1948, 1949, and 1950. In denying a motion for a new trial the Third Circuit ruled against taxpayer on all of his 5 assignments of error, as follows: (1) taxpayer contended that the evidence was insufficient to support the verdict in that certain documents introduced to establish the amount of professional fees earned by taxpayer during the indictment years were admissions which were not properly corroborated under the rule laid down in Smith v. U. S. [348 U. S. 147, 54-2 USTC ¶9715]. The Court held that not only was the challenged evidence properly substantiated under the Smith rule, but the undisputed proof adduced concerning taxpayer's income from dividends and interest was, in itself, sufficient to sustain the government's burden of showing understatement. (2) A hypothetical question put to one of defendant's character witnesses in cross-examination, in which the examiner assumed unproven facts and asked for the witness' opinion based thereon, though improper, was non-prejudicial, harmless error. (3) The Court did not err in refusing to give two instructions tendered by taxpayer when the points involved were adequately covered by the Court's own instructions. (4) There was no error in admitting the testimony of an expert witness merely because he may not have considered all the factors suggested by a Revenue Regulation in formulating his opinion as the value of some stock transferred to taxpayer in payment of a legal fee; nor was it error to allow evidence of taxpayer's failure to file any return for 1946, that offense not having been charged, because that fact was relevant on the question of the falsity of a statement in taxpayer's 1947 return that he had filed for the previous year. (5) Taxpayer's motion for a continuance, made after an initial delay of six months had already been granted, was denied within the Court's discretion when the evidence offered failed to establish that taxpayer was physically and emotionally unprepared for the trial.

Raymond J. Bradley, 2015 Land Title Bldg., Philadelphia 10, Pa., for appellant John A. Erickson, U. S. Court House, Philadelphia 7, Pa., for appellee.

Before BIGGS, Chief Judge, KALODNER, Circuit Judge, and WRIGHT, District Judge.

Opinion of the Court

WRIGHT, District Judge:

The appellant, Harry J. Alker, Jr., an attorney, was convicted on willfully attempting to defeat and evade the income tax by filing a false and fraudulent return for each of the taxable years 1947, 1948, 1949 and 1950 pursuant to 26 U. S. C. A. §145(b). The several years constituted separate counts in the indictment. Confinement for one year and a day and imposition of a $10,000 fine were decreed on each of the first three counts; the periods of imprisonment to run concurrently. On count four, appellant was sentenced to three years imprisonment to run consecutively with the sentence imposed on counts one, two and three. Execution on the fourth count was suspended and appellant was placed on probation for three years provided that within the first year bona fide efforts are made to conclude all matters involving tax liabilities between himself and the United States . This appeal followed.

The grounds urged for a new trial are set forth below:

1. The evidence was insufficient to support the verdict.

2. Defendant's motions for the withdrawal of a juror because of the improper cross-examination of one of his character witnesses should have been granted.

3. Defendant was prejudiced by the trial judge's failure to charge as requested.

4. Defendant was prejudiced by the trial judge's erroneous rulings on the admission of evidence;

(a) The trial judge erred in admitting the opinion testimony concerning the value of the Freihofer stock.

(b) The trial judge erred in admitting evidence concerning defendant's failure to file an income tax return for 1946, a year prior to the years covered by the indictment.

5. Defendant was deprived of a fair trial because of the denial of his motion for continuance.

The contentions will be considered seriatim.

[Sufficiency of the Evidence]

I. Section 145(b) of the 1939 Internal Revenue Code in pertinent part states: ¹

"* * * any person who willfully attempts in any manner to evade or defeat any tax imposed by this chapter or the payment thereof, shall, in addition to other penalties provided by law, be guilty of a felony and upon conviction thereof be fined not more than $10,000 or imprisoned for not more than five years, or both, together with the costs of prosecution."

Proof that a taxpayer had net income greater than the amount disclosed in his return requiring the payment of a tax substantially in excess of that reported coupled with independent evidence that the understatement was Willful is a violation of the denominated provision. ²

The Government sought to sustain its burden of showing that appellant had net income greater than the amount reported by evidence of specific items of revenue purportedly received in the examination period. Appellant concedes, as he must, that the proof adduced would have enabled the triers to conclude that he had significantly understated his net income and correspondent tax liability for each of the indictment years. ³ The question presented is whether documents were sufficiently corroborated within the purview of Smith v. United States . ⁴ There the Supreme Court adopted for income tax prosecutions, the general rule that an accused cannot be convicted on his own uncorroborated confession. The opinion extended the doctrine to admissions at least where the statement is made after the fact to an official charged with investigating the possibility of wrongdoing, and the statement embraces an element vital to the Government's case.