Admissions
Page2
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.