Appeal without merit

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7203: Willful Failure to File Return, Supply Information, or Pay Tax: Appeal Without Merit

 

[80-2 USTC ¶9694] United States of America and Burnie W. Avrit, Internal Revenue Service Agent, Plaintiffs-Appellees v. Gladys T. Lillibridge, Trustee, et al., Defendants-Appellants

(CA-6), U. S. Court of Appeals, 6th Circuit, No. 79-1283, 5/21/80, Affirming an unreported District Court decision

[Code Sec. 7602]

Examination of books and witnesses: Self-incrimination: Contempt of court: Enforcement proceedings: Bail pending appeal: Right to jury.--Taxpayers, who were found in contempt of court for refusing to obey a court order enforcing IRS summonses, were not entitled to a jury trial in the enforcement and contempt proceedings because the right to a jury trial did not exist in tax cases or civil contempt proceedings. The taxpayers' rights against self-incrimination were not properly asserted where the taxpayers failed to make specific objections to particular questions but merely made blanket assertions of their right against self-incrimination. The amount of bond set for release pending appeal was not excessive. The order holding taxpayers in contempt was affirmed.

Legrande Lillibridge, Gladys Lillibridge, 2631 Fort Campbell Blvd., Clarksville, Tenn. 37040, pro se. Hal D. Hardin, United States Attorney, Nashville, Tenn. 37219, M. Carr Ferguson, Assistant Attorney General, Gilbert E. Andrews, Charles Brookhart, Ronald Dweck, Department of Justice, Washington, D. C. 20530, for plaintiff-appellees.

Before KEITH, BROWN, and MARTIN, Circuit Judges.

Order

The defendants appeal from an order of the District Court for the Middle District of Tennessee finding them in contempt for refusing to obey the Court's order enforcing Internal Revenue Service (IRS) summonses and sentencing them to five (5) months and twenty-nine (29) days in jail or until such time as they purged themselves of contempt. This appeal has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. After examination of the briefs and record, this panel agrees unanimously that oral argument is not needed. Rule 34(a), Federal Rules of Appellate Procedure.

The defendants raise three primary issues on appeal:

(1) They were entitled to a jury trial in both the enforcement and contempt proceedings;

(2) Their Fifth Amendment right against self-incrimination permitted them to refuse to disclose the information sought by the IRS; and

(3) The District Court set excessive bond for release pending this appeal.

An analysis of these issues shows them to be without merit.

There is no general right to a jury trial in tax cases. See Phillips v. Commissioner [2 USTC ¶743], 283 U. S. 589, 599 n.9 (1931); Wickwire v. Reinecke [1 USTC ¶265], 275 U. S. 101, 105-06 (1927); Olshausen v. Commissioner [60-1 USTC ¶9142], 273 F. 2d 23, 27-28 (9th Cir. 1959), cert. den., 363 U. S. 820, reh. den. 364 U. S. 855 (1960). Thus the defendants did not have the right to a jury trial in the enforcement proceeding. Kennedy v. Rubin [66-2 USTC ¶9603], 254 F. Supp. 190 (N. D. Ill. 1966).

Contempt proceedings relative to a defendant's failure to obey a court order enforcing an IRS summons is civil in nature, even if the defendant is incarcerated until he purges himself of contempt. McCrone v. United States [39-1 USTC ¶9484], 307 U. S. 61 (1939). The right to a jury trial does not attach to civil contempt proceedings, Shilitani v. United States, 384 U. S. 364, 370-71 (1966), and the defendants had no such right in the contempt proceedings giving rise to this appeal. United States v. Carroll [78-1 USTC ¶9141], 567 F. 2d 955, 958 (10th Cir. 1977).

The defendants did have a right to refuse to answer questions put forth by the IRS or to produce materials requested in the summonses if such answers or production would tend to incriminate them. Blanket assertions of that right, however, are improper. The defendants were required to answer and produce all unobjectable answers and materials and to make specific objections to the particular questions and materials they believed could incriminate them. See United States v. Jomes [76-2 USTC ¶9563], 538 F. 2d 225, 226 (8th Cir. 1976), cert. den., 429 U. S. 1040 (1977), and cases cited therein. The record in this case shows the defendants failed to make such specific objections either during the interview with the IRS Agent or during the contempt proceedings. This failure left the District Court with no basis to make a determination that the right against self-incrimination was properly asserted. United States v. Carroll, supra, at 957.

The bond amount set by the District Court for release pending appeal, which amount the defendants produced the day it was set, was not excessive.

The Court has reviewed the entire record in this case and finds no other errors of a constitutional magnitude. The District Court's order of April 5, 1979 finding the defendants in civil contempt and ordering their incarceration is hereby affirmed. Rule 9(d)3, Rules of the Sixth Circuit.

 

 

[84-1 USTC ¶9130] United States of America , Appellee v. William E. Richards, Appellant

(CA-8), U. S. Court of Appeals, 8th Circuit, No. 83-1954, 723 F2d 646, 12/30/83, Affirming an unreported decision of the District Court

[Code Sec. 7203]

Criminal penalties: Failure to assess tax.--Failure to assess tax did not preclude indictment of the taxpayer for willfully failing to file income tax returns for three tax years.

[Code Sec. 7203]

Criminal penalties: Willful failure to file returns.--Considering the taxpayer's gross income for three taxable years, he was clearly commanded to file tax returns for those years. Therefore, his claim that his failure could not be deemed "willful," because the filing of a tax return is voluntary, was rejected as totally without arguable merit.

[Code Sec. 7203]

Criminal penalties: Miscellaneous defenses.--The district court properly rejected the taxpayer's argument that the government's delay in charging him with failure to file tax returns prejudiced the defense because witnesses' memories had dimmed. Also, the taxpayer should have raised before trial by motion any objections based on defects in the indictment, instead of claiming for the first time on appeal that he should have been indicted earlier to prevent him from committing so many offenses. In addition, the taxpayer's claim that the trial court erred in its instructions defining the offerse and the number of possible violations was totally lacking in merit. Finally, the district court properly admitted evidence consisting of a letter from the IRS to the taxpayer concerning his failure to claim exemptions on his Form W-4 and the reply letter of the taxpayer challenging the government's right to tax his wages as income. The contested letters showing the taxpayer's willfulness in failing to file were executed less than two years after the date for filing his return, and subsequent tax paying conduct was relevant to the issue of willfulness in a prior year.

[Code Sec. 7203]

Criminal penalties: Appeal without merit.--The taxpayer's appeal from a conviction for failure to file income tax returns on the grounds that wages and salaries are not "income" within the meaning of the sixteenth amendment, thus relieving him of any duty to file, was without merit. The courts have interpreted the term "income" to mean gain derived from capital, from labor, or from both combined.

William E. Richards, 1966 E. 72nd St., Kansas City, Mo. 64132, pro se. Rob ert G. Ulrich, United States Attorney, Thomas M. Larson, Assistant United States Attorney, Kansas City, Mo. 64106, for appellant.

Before HENLEY, Senior Circuit Judge, GIBSON and FAGG, Circuit Judges.

PER CURIAM:

Following trial by jury William E. Richards was convicted on three counts of willfully failing to file income tax returns for calendar years 1979, 1980 and 1981 in violation of 26 U. S. C. §7203. The court ¹ sentenced Richards to consecutive one-year terms of imprisonment on the first two counts. On court three execution of a one-year sentence was suspended and defendant was placed on probation for a period of four years. On each count a fine of $2,000.00 was assessed.

As will appear, on appeal Richards makes a number of arguments, all of which we reject.

During calendar years 1979, 1980 and 1981 appellant was employed by Missouri Pacific Railroad and received a gross income of $20,328.78, $20,995.38 and $20,690.57, respectively. The IRS notified appellant on November 6, 1979 that a meeting was scheduled on November 9, 1979 with a Revenue Officer to prepare a correct W-4 form (employee wage withholding form). Appellant responded by letter on November 7, 1979 that his W-4 was correctly filed with his employer. On September 12, 1980 the IRS notified appellant that it had not received his income tax return for the 1978 calendar year. On September 22, 1980 appellant replied to the Service by letter explaining that he was not required to file even though he had filed in previous years. No further governmental action was taken until March 28, 1983 when a three-count indictment was returned charging appellant with willful failure to file income tax returns for the years 1979, 1980 and 1981.

Appellant contends that his conviction under 26 U. S. C. §7203 is invalid because the IRS did not provide an assessment or notice of taxes due as required by 26 U. S. C. §§ 6201(a), 6203, 6303. This claim is without merit. "The filing of an admin istrative assessment record is not required before a criminal prosecution may be instituted under 26 U. S. C. §§ 7201-07 (1976) for failure to report or pay income tax." United States v. Voorhies [82-1 USTC ¶9710], 658 F. 2d 710, 714 (9th Cir. 1981).

Appellant claims that his failure to file cannot be deemed "willful" within the meaning of the charging statute, 26 U. S. C. §7203, because the filing of a tax return is voluntary. This claim was rejected in United States v. Drefke [83-1 USTC ¶9354], 707 F. 2d 978, 981 (8th Cir. 1983), wherein the court described appellant's argument as "an imaginative argument, but totally without arguable merit." Id. at 981. Considering appellant's gross income for 1979, 1980 and 1981, he was clearly commanded to file tax returns for those years. See 26 U. S. C. §6012.

Appellant challenges his conviction on the grounds that wages and salaries are not "income" within the meaning of the sixteenth amendment, thus relieving him of any duty to file. Although the sixteenth amendment, giving Congress the power to tax income, does not define "income," the courts have interpreted the term in its every day usage to mean gain derived from capital, from labor, or from both combined. See United States v. Safety Car Heating & Lighting Co. [36-1 USTC ¶9042], 297 U. S. 88, 99 (1936); Helvering v. Edison Bros. Stores, Inc. [43-1 USTC ¶9273], 133 F. 2d 575, 579 (8th Cir.), cert. denied, 319 U. S. 752 (1943). Clearly wages and salaries fall within this definition and are therefore constitutionally taxable.

Appellant claims that the trial court's instructions defining the offense and the number of possible violations were erroneous. We do not reach these allegations because appellant failed to object to these instructions at trial as required by Fed. R. Crim. P. 30. In any event, appellant's contentions are totally lacking in merit.

Appellant maintains that the trial court erred in denying his motion pursuant to Fed. R. Crim. P. 48(b) to dismiss the indictment for prosecutorial delay. At trial appellant argued that the government's delay in charging appellant prejudiced the defense because witnesses' memories had dimmed. The district court rejected this argument, finding neither actual prejudice nor unreasonable delay. See United States v. Lovasco, 431 U. S. 783, 789-90 (1977); United States v. Taylor, 603 F. 2d 732, 735 (8th Cir.), cert. denied, 444 U. S. 982 (1979). On appeal, appellant claims for the first time that he should have been indicted earlier to prevent him from committing so many offenses. A defendant must raise before trial by motion any objections based on defects in the indictment. Fed. R. Crim. P. 12(b)(2). Failure to raise nonjurisdictional objections prior to trial constitutes waiver of such objections. Fed. R. Crim. P. 12(f). We observe, however, that the contention while perhaps imaginative is essentially frivolous.

Finally, appellant alleges that the district court erroneously admitted evidence of other acts in violation of Fed. R. Evid. 404(b). This contested evidence consisted of a letter from the IRS to appellant dated May 6, 1983, concerning appellant's failure to claim any exemptions on his Form W-4, and appellant's reply letter of May 18, 1983, in which appellant propounded eight questions challenging the government's right to tax his wages as income.

It is settled that evidence of other crimes or acts is admissible under Fed. R. Evid. 404(b) to show intent, plan, or absence of mistake, so long as four additional prerequisites are met, i. e., (1) a material issue has been raised; (2) the proffered evidence is relevant to that issue; (3) the evidence of other crimes is clear and convincing; and (4) the evidence relates to wrongdoing similar in kind and reasonably close in time to the charge at trial.

United States v. Farber [80-2 USTC ¶9580], 630 F. 2d 569, 571 (8th Cir. 1980), cert. denied, 449 U. S. 1127 (1981).

In the case at bar, the government offered the contested evidence to show appellant's willfulness in failing to file. Appellant contends that the evidence did not meet the fourth prerequisite listed above because the correspondence was far removed in time from the crimes charged. We disagree. Both of the contested letters were executed less than two years after the return date for 1981. See id. at 572 (three and one-half years reasonably close in time). Moreover, subsequent tax paying conduct is relevant to the issue of willfulness in a prior year. ² Id.

Accordingly, the judgment of the district court is affirmed.

¹ The Honorable D. Brook Bartlett, United States District Judge, Western District of Missouri .

² In his reply brief appellant mentions that his consecutive sentences are excessive in that he was found guilty of a misdemeanor for which the maximum punishment cannot exceed one year. He cites no authority in support of this contention and we know of none applicable to the circumstances of this case.

 

 

[2002-1 USTC ¶50,239] United States of America , Plaintiff-Appellee v. Donald P. Thibodeaux, Defendant-Appellant

(CA-7), U.S. Court of Appeals, 7th Circuit, 00-2325, 9/14/2001, 19 Fed. Appx. 409

19 Fed. Appx. 409

2001 U.S. App. LEXIS 28337. Affirming an unreported District Court decision.

[Code Sec. 7203 ]

Conviction: Tax evasion: Willful failure to file returns: Tax protestor: Constitutional arguments: Frivolous claims: Sixteenth Amendment.--Sufficient evidence existed to sustain multiple counts of a tax protestor's convictions for tax evasion and willful failure to file returns. The government did not violate precedent when it produced nothing in response to the taxpayer's request for it to provide all relevant information necessary to his defense. Moreover, the taxpayer's contention that the district court should have dismissed his indictment on the ground that the Sixteenth Amendment was never properly ratified was frivolous. Finally, his contention that federal prosecutors, magistrates and circuit judges within the Seventh Circuit should be disqualified from his case due to an alleged elaborate conspiracy lacked merit.

Eric Wilson, Office of U.S. Attorney, Chicago , Ill. , for plaintiff-appellee. Donald P. Thibodeaux, Chicago , Ill. , pro se.

Before: FLAUM, Chief Judge, EASTERBROOK and KANNE, 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

ORDER

Donald Thibodeaux, a career tax protester who has not filed a tax return or paid income taxes since 1979, appeals his conviction on four counts of tax evasion, 26 U.S.C. §7201, and six counts of willfully failing to file a tax return, 26 U.S.C. §7203. We affirm.

Thibodeaux first argues that, because he repeatedly asked the government to provide "all relevant information necessary for his defense" but received nothing, the government necessarily violated Brady v. Maryland, 373 U.S. 83, 10 L.Ed.2d 215, 83 S.Ct. 1194 (1963). But Brady does not require the government to gather information on a defendant's behalf, as Thibodeaux seems to think, see United States v. Senn, 129 F.3d 886, 893 (7th Cir. 1997); the government need only disclose favorable, material evidence already within its knowledge or control, see United States v. Grintjes, 237 F.3d 876, 880 (7th Cir. 2001); United States v. Hamilton, 107 F.3d 499, 509 (7th Cir. 1997). Even assuming that the evidentiary items Thibodeaux describes exist, the government's failure to disclose them would not have amounted to a Brady violation: two of the items--an anti-tax "memorandum" sold over the Internet and documents supporting Thibodeaux's theory that the Sixteenth Amendment was "fraudulently obtained"--were easily obtainable by Thibodeaux himself, see Senn, 129 F.3d at 893 (Brady inapplicable to evidence defendant can obtain through "reasonable diligence"); the others--a "dossier" on the district judge and "files" on "government operatives"--have no demonstrable relevance. Nor do we see the relevance of Thibodeaux's excluded "rebuttal evidence" to the effect that no one really "pays" taxes because United States currency lacks intrinsic value. This evidence was properly excluded.

Thibodeaux next argues that the district court should have dismissed his indictment on the ground that the Sixteenth Amendment was never properly ratified. As if our earlier opinions foreclosing this line of argument were not enough, see, e.g., United States v. Thomas [86-1 USTC ¶9354], 788 F.2d 1250, 1253-54 (7th Cir. 1986), Thibodeaux was personally informed of the frivolousness of this argument when he sought postconviction review of an earlier failure-to-file conviction in 1987. The district judge wrote:

[Thibodeaux contends that because] the Sixteenth Amendment was never properly ratified, he was convicted under void criminal statues. . . .

. . . Even if I were to consider this claim, I would dismiss it as frivolous. The idea that the Sixteenth Amendment was never properly ratified has been repeatedly rejected by the Seventh Circuit. . . . Likewise, I reject the idea here.

United States v. Thibodeaux, 1987 U.S. Dist. LEXIS 7380, Nos. 87 C 5732 & 83 CR 968, 1987 WL 15738, at *1 (N.D. Ill. July 17, 1987). The argument is just as frivolous today.

Finally, Thibodeaux contends that, due to their participation in an elaborate conspiracy involving the IRS, various educational and financial institutions, the Rockefeller family, and Israel's secret service, all federal prosecutors in the Northern District of Illinois as well as all magistrate, district, and circuit judges within the Seventh Circuit must be disqualified or recused from his case. In addition to being wholly conclusory, Thibodeaux's contentions have been rejected before. A motions panel of this court denied Thibodeaux's petition for a writ of mandamus based on similar arguments, and a district court denied a series of comparable recusal motions Thibodeaux filed in a bankruptcy appeal:

According to Thibodeaux, the IRS protects itself from investigation by blackmailing public officials, including a former Illinois governor, three former United States Attorneys, and several Northern District of Illinois and Seventh Circuit judges, to name just a few. Thibodeaux alleges that this "influence" prejudices the court against his interests. Thibodeaux also accuses judges in this circuit of treason and racketeering.

In re Thibodeaux, 1991 U.S. Dist. LEXIS 2203, No. 90 C 7377, 1991 WL 28271, at *2 (N.D. Ill. Feb. 22, 1991). The district court in that case noted that Thibodeaux alleged no facts warranting recusal, only "reckless and malicious speculation, conjecture and innuendo," and concluded that his motions were frivolous. Id. at *3. Because this is an accurate description of Thibodeaux's argument in this appeal, we do the same.

AFFIRMED.

 

 

[2001-2 USTC ¶50,604] United States of America , Plaintiff-Appellee v. Edgar F. Bradley, Edgar Francis Bradley II, Roy Claudius Bradley, Defendants-Appellants

(CA-6), U.S. Court of Appeals, 6th Circuit, 99-3765, 99-3767, 99-3769, 8/9/2001, 2001 U.S. App. LEXIS 18944. Affirming an unreported District Court decision

[Code Secs. 7203 and 7206 ]

Crimes: Conspiracy to defraud the government: Willful failure to file returns: Tax protestors: Individuals subject to tax: Miscellaneous frivolous arguments.--Three pro se tax protestors were properly convicted of conspiracy to defraud the government and willful failure to file tax returns, and their sentences were upheld. On appeal, they persisted in raising frivolous and patently meritless arguments. They contended that they had no taxable income, the prosecutor committed fraud upon the court because the income tax is voluntary and they had committed no crimes, their indictment was not presented in open court, the trial court lacked jurisdiction, and there was no "meeting of the minds" among the statutes and regulations authorizing the income tax. They also played a "name game," which involved arguing that certain variations of their names were "corporate fictions."

Before: MOORE and COLE, Circuit Judges, ROSEN, District Judge. ^*

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

ORDER

In this consolidated appeal, Edgar F. Bradley ("Edgar I"); Edgar Francis Bradley, II ("Edgar II"); and Roy Claudius Bradley ("Roy Claudius"), tax protestors proceeding pro se, appeal their judgments of conviction and sentence. The case has been referred to this panel pursuant to Rule 34(j)(1), Rules of the Sixth Circuit. We unanimously agree that oral argument is not needed. Fed. R. App. P. 34(a).

Edgar I and Edgar II were each convicted by a jury of one count of conspiracy to defraud the United States and three counts of willful failure to file income tax returns, violations of 18 U.S.C. §371 and 26 U.S.C. §7203, respectively. The jury convicted Roy Claudius of one count of each of these crimes. Edgar I was sentenced to 60 months of imprisonment to be followed by three years of supervised release. He was fined $150,000. Edgar II was sentenced to 57 months of imprisonment to be followed by three years of supervised release; he was fined $145,000. Roy Claudius was sentenced to 46 months of imprisonment to be followed by three years of supervised release, and he was fined $118,500. Each defendant was ordered to pay $635,925 in restitution.

On appeal, the Bradleys raise only frivolous tax-protestor arguments or patently meritless contentions. For example, Edgar I argues that: (1) neither he, nor most Americans, has any taxable income; (2) the prosecutor committed a fraud upon the court because the income tax is voluntary, therefore, no crime exists in this case; and (3) the grand jury indictment was not presented in open court and is therefore defective, and the district court had no jurisdiction. Edgar I also plays the "name game," contending that "Edgar Francis; Bradley" is a natural born man of the State of Ohio , while "Edgar F. Bradley" is merely a corporate fiction. Edgar II essentially reasserts the arguments of Edgar I, while adding, without supporting argument, that the Supreme Court's recent decision in Apprendi v. New Jersey , 530 U.S. 466, 147 L.Ed.2d 435, 120 S.Ct. 2348 (2000), somehow compels a reversal of the Bradleys' convictions. Edgar II also adds a contention that United States v. Lopez, 514 U.S. 549, 131 L.Ed.2d 626, 115 S.Ct. 1624 (1995), demonstrates that Congress lacks the power to tax income. Finally, Roy Claudius plays the name game using variations involving capital letters, he repeats the arguments of his codefendants, and he argues that there is no "meeting of the minds" among the statutes and regulations that authorize the income tax.

These arguments have been rejected as frivolous in previous cases, See, e.g., United States v. Mundt [94-2 USTC ¶50,366], 29 F.3d 233, 237 (6th Cir. 1994) (citing cases), or are patently meritless.

Accordingly, all pending motions are denied, and we affirm the judgments of conviction and sentence. Rule 34(j)2)(C), Rules of the Sixth Circuit.

^* The Honorable Gerald E. Rosen, United States District Judge for the Eastern District of Michigan, sitting by designation.

 

 

[94-2 USTC ¶50,366] United States of America , Plaintiff-Appellee v. Schubert E. Mundt, Defendant-Appellant

(CA-6), U.S. Court of Appeals, 6th Circuit, 93-2623, 7/11/94, 29 F3d 233, Affirming an unreported District Court decision

[Code Secs. 1 and 7203 ]

Crimes: Failure to file returns: Jurisdiction: Frivolous constitutional claim.--An individual's conviction on charges of failing to file returns for two years was upheld. His argument that the trial court lacked jurisdiction because he was not a resident of a "federal zone" was rejected as frivolous. The Sixteenth Amendment authorizes a direct nonapportioned tax on U.S. citizens throughout the nation, not just in federal enclaves.

Richard Delonis, James C. Mitchell, Assistant United States Attorneys, 231 W. Lafayette Blvd., Detroit, Mich. 48226, for plaintiff-appellee. Richard M. Helfrick, 645 Griswold, Detroit, Mich. 48226, Schubert E. Mundt, P.O. Box 7, Manchester, Ky. 40962, for defendant-appellant.

Before KENNEDY and JONES, Circuit Judges; and GRAHAM, District Judge. ^*

KENNEDY, Circuit Judge:

Defendant Schubert E. Mundt appeals his conviction and six-month sentence for failing to file federal income tax returns for the tax years 1983 and 1984, in violation of 26 U.S.C. §7203 . Defendant argues that the three and a half year time lapse between the date of the indictment and the date of his arrest violated his Sixth Amendment right to a speedy trial. He also contends that the District Court lacked jurisdiction over him because he is not the resident of any "federal zone." For the reasons that follow, we affirm.

I.

On February 8, 1989, a grand jury handed down a two-count indictment charging defendant with tax evasion for the years 1983 and 1984. Federal officials did not arrest defendant until July 3, 1992. Upon motion of defendant, the indictment was dismissed for failure to allege an essential element of the crime. On March 30, 1993, a grand jury issued a two-count superseding indictment charging defendant with the failure to file income tax returns for the years 1983 and 1984. On June 14, 1993, the court conducted an evidentiary hearing on defendant's previously filed motion to dismiss for violation of his Sixth Amendment right to a speedy trial and denied it. After a first jury trial ended in a mistrial, a second jury found defendant guilty of both counts. The court sentenced defendant to six months on each count, to be served concurrently. Defendant timely appealed.

II.

Defendant did not file a single valid federal income tax return with the Internal Revenue Service ("IRS") from 1966 through 1991. In 1980, defendant was convicted of tax evasion and sentenced to three consecutive one-year terms of imprisonment. On February 2, 1983, he was released on parole. Defendant violated the terms of his parole when he again failed to file a return for 1983 and was returned to jail on November 3, 1984.

In 1985, IRS special agent Joseph Boley began an investigation of defendant, which led to the present charges. On August 15, 1985, Boley located defendant at his workplace, Final Engineering and Development ("FEDCO"). Boley told defendant that he was investigating defendant's tax status for the years 1983 and 1984. At that time, Boley learned that defendant was living out of his car and sleeping at FEDCO. Boley also learned of defendant's beliefs that he was not obligated to pay federal income taxes because he did not live in a federal zone, because he was a member of the underground economy working for cash as a natural person, and because he did not own any privileges or was not a member of a privileged class.

After the investigation was completed, the IRS recommended prosecution to the U.S. Department of Justice. On March 3, 1987, a letter was mailed to Mundt at the FEDCO address informing him of the recommendation. By 1987, FEDCO had gone out of business with no forwarding address and the letter, which was returned to sender, never reached defendant.

The original two-count indictment was returned in February 1989. Boley began looking for defendant in July 1989. From defendant's driver's license number and car registration, Boley obtained two addresses for defendant, one in Howell, Michigan and the other at a motel in Port Huron, Michigan. The investigation of these addresses was fruitless. A subsequent check with the Secretary of State revealed that defendant had changed his address to a second motel in Port Huron . Boley checked both motels periodically during 1990 and 1991 to no avail. Boley learned from motel managers that defendant would stay for a week or two at a time on occasion. After learning from a motel employee that defendant may have gone to Florida and knowing that defendant had once held a real estate license, Boley checked with both Florida and Michigan authorities to see if defendant had renewed his license; he had not. Boley was not alone in his problems of locating defendant; the collection division of the IRS closed down an investigation of defendant in September of 1990 because it could not find him.

In July 1991, Boley learned that defendant might be working for a business called CDI. Boley monitored CDI's premises looking unsuccessfully for defendant's car.

Aware that defendant had reached retirement age, Boley explored a hunch that defendant might be collecting social security benefits. The Social Security Administration provided two different address for defendant: (1) a post office box in Westland , Michigan ; and (2) Mail Boxes Etc., a mail forwarding service company in Sterling Heights , Michigan . Boley's hunch proved to be correct. Defendant was receiving benefits and the checks were being directly deposited into the Research Credit Union. Boley then learned that shortly after the funds were deposited, the money would be withdrawn. The two branches of the credit union where the withdrawals were made were surveilled and on July 3, 1992, when defendant arrived to make a withdrawal, he was arrested.

III.

The Sixth Amendment guarantees that, "[i]n all criminal prosecutions, the accused shall enjoy the right to a speedy . . . trial . . . ." The Supreme Court has developed a four-part balancing test to use in determining whether a defendant's right to a speedy trial has been violated: (1) the length of the delay; (2) the reasons for the delay; (3) whether the defendant has asserted his right; and (4) prejudice to the defendant. Barker v. Wingo, 407 U.S. 514, 530-32 (1972). The test was crafted to deal with the "vague," "amorphous," and "slippery" quality of the right, which "is necessarily relative . . . . [and] consistent with delays and depends upon circumstances." Id. at 521-22 (citation omitted).

The inquiry into the first factor of the Barker test is bifurcated. The first half asks whether the delay was long enough to be "presumptively prejudicial" and thus long enough to trigger the rest of the speedy trial analysis. Id. at 530. Recently, the Supreme Court noted that this threshold-type prejudice can be presumed where the post-accusation delay approaches one year. Doggett v. United States, 112 S.Ct. 2686, 2691 n.1 (1992). Here, the delay was approximately three and a half years, thus satisfying this initial burden. The second half of the inquiry requires consideration of prejudice to the defendant, which will be discussed below under factor four.

As to the second factor, defendant contends that the United States is entirely responsible for the delay. In response, the United States posits that the delay is attributable to defendant's unorthodox living habits, which included living in his car, sleeping at his workplace, living in motels for short intervals, and receiving mail through a post office box. The United States alleges that defendant lived in this way to conceal his whereabouts and avoid detection. The District Court considered the facts and apportioned the blame for the delay equally.

Whether or not defendant was intentionally evading authorities, his lifestyle made it difficult for authorities to track him down. If defendant had not been so transient and if he had lived at his mailing address instead of using post office boxes, he would have been found much earlier as the IRS used conventional search methods in a reasonably diligent manner.

As to the third factor, defendant testified that he was unaware of the indictment until the day that he was arrested. The United States asserts that defendant should not be allowed to use what it characterizes as his deliberate ignorance to shield him from the responsibility of asserting his right. In 1985, defendant had been informed that he was being investigated by the IRS. From this the United States invites the panel to draw the inference that defendant was actively eluding apprehension. Beyond this, however, the United States presents no other evidence that defendant had any knowledge of the indictment. Further, the evidence in the record supports defendant's contention that he did not know of the charges until he was arrested. His failure to assert the right before arrest therefore cannot be held against him. See Doggett, 112 S.Ct. at 2691 (defendant should not be penalized for invoking right after arrest where he did not know of indictment before arrest).

Lastly, we examine whether defendant was prejudiced by the delay. Prejudice is examined in reference to the three interests the right was designed to protect:

(i) to prevent oppressive pretrial incarceration; (ii) to minimize anxiety and concern of the accused; and (iii) to limit the possibility that the defense will be impaired. Of these, the most serious is the last, because the inability of a defendant adequately to prepare his case skews the fairness of the entire system.

Barker, 407 U.S. at 532 (footnote omitted). The first two interests are not implicated here where defendant posted bond on the day he was arraigned and where defendant was unaware of the indictment until he was arrested. Defendant's claim of prejudice is based on his broad assertion that the delay impaired his defense.

In Doggett, the Supreme Court rejected the argument that a defendant must pinpoint how the delay prejudiced his defense with specificity. "[I]mpairment of one's defense is the most difficult form of speedy trial prejudice to prove because time's erosion of exculpatory evidence and testimony 'can rarely be shown.' " Doggett, 112 S.Ct. at 2692-93 (quoting Barker, 407 U.S. at 532). The Court went on to state that "excessive delay presumptively compromises the reliability of a trial in ways that neither party can prove or, for that matter, identify. While such presumptive prejudice cannot alone carry a Sixth Amendment claim without regard to the other Barker criteria, it is part of the mix of relevant facts, and its importance increases with the length of delay." Id. at 2693 (citation omitted).

When a defendant is unable to articulate the harm caused by delay, the reason for the delay (factor 2) will be used to determine whether the defendant was presumptively prejudiced. If the government has been diligent in its pursuit of a defendant and delay was "inevitable and wholly justifiable," a speedy trial claim will generally fail. Id. If, on the other hand, the government has been intentionally dilatory for the purpose of impairing the defendant's defense, violation will almost surely be found. Id. Between these two extreme lies negligence. "While not compelling relief in every case where bad-faith delay would make relief virtually automatic, neither is negligence automatically tolerable simply because the accused cannot demonstrate exactly how it has prejudiced him." Id.

While defendant contends that the United States was negligent in its prosecution of his case, we find that it was reasonably diligent in its efforts. More importantly, the United States has persuasively rebutted any presumption of prejudice by proving that the delay did not impair defendant's defense. See Doggett, 112 S.Ct. at 2694 n. 4. Defendant admitted in sworn testimony that he did not file tax returns in 1983 or 1984. Defendant's defense was not dependent upon exculpatory evidence that might be lost or thrown away or the testimony of witnesses whose memories might fade with time. Defendant's position was and continues to be that he is not subject to the federal tax laws. The delay did not harm defendant's ability to present his defense. We conclude, therefore, that defendant's right to a speedy trial was not violated. Cf. United States v. DeClue [90-1 USTC ¶50,198 ], 899 F.2d 1465 (6th Cir. 1990) (tax evasion case involving facts very similar to instant case; court held six-year delay not unreasonable).

IV.

On the merits, defendant argues that the District Court lacked jurisdiction over him because he is solely a resident of the state of Michigan and not a resident of any "federal zone" and is therefore not subject to federal income tax laws. This argument is completely without merit and patently frivolous.

To put the argument to rest, we quote the following from a Tenth Circuit opinion in which the court was responding to an identical tax-protester argument.

[Defendant]'s motion to dismiss advanced the hackneyed tax protester refrain that federal criminal jurisdiction only extends to the District of Columbia, United States territorial possessions and ceded territories. [Defendant]'s memorandum blithely ignored 18 U.S.C. §3231 which explicitly vests federal district courts with jurisdiction over "all offenses against the laws of the United States ." [Defendant] also conveniently ignored article I, section 8 of the United States Constitution which empowers Congress to create, define and punish crimes irrespective of where they are committed. See United States v. Worrall, 2 U.S. (2 Dall.) 384, 393, 1 L.Ed. 426 (1798) (Chase, J.). Article I, section 8 and the sixteenth amendment also empowers Congress to create and provide for the admin istration of an income tax; the statute under which defendant was charged and convicted, 26 U.S.C. §7201 , plainly falls within that authority. Efforts to argue that federal jurisdiction does not encompass prosecutions for federal tax evasion have been rejected as either "silly" or "frivolous" by a myriad of courts throughout the nation. In the face of this uniform authority, it defies credulity to argue that the district court lacked jurisdiction to adjudicate the government's case against defendant.

. . . For seventy-five years, the Supreme Court has recognized that the sixteenth amendment authorizes a direct nonapportioned tax upon United States citizens throughout the nation, not just in federal enclaves, see Brushaber v. Union Pac. R.R. [1 USTC ¶4 ], 240 U.S. 1, 12-19, 36 S.Ct. 236, 239-42, 60 L.Ed. 493 (1916); efforts to argue otherwise have been sanctioned as frivolous . . . .

United States v. Collins [91-2 USTC ¶50,554 ], 920 F.2d 619, 629 (10th Cir. 1990) (citations omitted), cert. denied, 500 U.S. 920 (1991).

V.

Accordingly, the judgment of the District Court is AFFIRMED.

^* The Honorable James L. Graham, United States District Judge for the Southern District of Ohio, sitting by designation.

 

 

[92-1 USTC ¶50,095] United States of America , Plaintiff-Appellee v. Ronald Wesley Daniel, Defendant-Appellant

(CA-6), U.S. Court of Appeals, 6th Circuit, 91-5318, 2/10/92, 956 F2d 540, 956 F2d 540. Affirming and remanding an unreported District Court decision

[Code Sec. 7201 ]

Tax evasion: Failure to file: Assessment and demand: Restitution: Sentencing.--An individual's conviction for tax evasion was affirmed, even though there was no assessment and demand for taxes. The taxpayer admitted he had an obligation to pay tax, but he did not file for the years at issue because he claimed that the law did not require him to file a return. He also claimed that he could not be charged with attempting to evade payment of taxes because a tax deficiency did not exist as the IRS did not make a tax assessment and a demand for payment. This argument, however, was without merit because a conviction only requires a showing of the existence of a tax deficiency, willfulness, and an affirmative act constituting an evasion or attempted evasion of the tax. As these elements were proven, the conviction was affirmed. The case, however, was remanded both for resentencing and recalculation of the amount of restitution. The trial court improperly determined restitution based on the taxpayer's total civil liability, which included statutory penalties. As restitution should be limited to the amount of loss actually suffered, the appropriate restitution should have been the tax liability upon which the taxpayer's conviction was based, which excludes civil penalties. As the sentence was based on an improper restitution amount, the case was also remanded for resentencing.

David L. Carter, Riverland Max Security Ins., 7475 Cockrill Bend Ind., Nashville, Tenn. 37209, for appellant. Charles W. Bruson, Office of Attorney General, Kimberly Dean, 450 Janes Rob ertson, Nashville , Tenn. 37243 , for appellee.

Before MARTIN and JONES, Circuit Judges; and BROWN, Senior Circuit Judge.

MARTIN, JR., Circuit Judge.

A jury convicted Ronald Daniel of three counts of income tax evasion under 26 U.S.C. §7201 . The court sentenced Daniel to one year, four months incarceration; two years of supervised release; and ordered him to pay $154,353.50 in restitution to the United States . On appeal, Daniel challenges his conviction for tax evasion. Daniel argues that in order to prosecute and convict under section 7201 , the Internal Revenue Service must make an assessment of taxes owed and make a demand for payment, both of which, Daniel alleges, it failed to do. Daniel also alleges that in awarding restitution, the court exceeded the amount permitted by the Sentencing Guidelines. For the following reasons, we affirm in part, and reverse in part.

Daniel operated a theater-seat installation business in Tennessee and throughout the Southeast. Prior to 1982, Daniel filed federal income tax returns. Daniel failed to file federal income tax returns for tax years 1982-1987. On May 26, 1986, the Internal Revenue Service notified Daniel about his failure to file federal income tax returns and requested an explanation. After an investigation of Daniel's records, and receipt of testimony from several witnesses, the government found that for criminal purposes, Daniel had a tax liability for 1985, 1986, and 1987 in the amount of $40,969.90. Throughout the investigation and during his trial, Daniel contended that although he knew that he had an obligation to pay taxes, the law did not require him to file a return.

On appeal, Daniel contends that he cannot be convicted of tax evasion under section 7201 , unless the government has made a tax assessment and a demand for payment. Daniel's argument is without merit. The relevant portion of section 7201 defines as criminal conduct, "[a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title . . .." 26 U.S.C. §7201 (1991). To convict someone under section 7201 , the government must show the existence of a tax deficiency, willfulness, and an affirmative act constituting an evasion or an attempted evasion of the tax. Sansone v. United States [65-1 USTC ¶9307 ], 380 U.S. 343, 351 (1965) (citing Lawn v. United States [58-1 USTC ¶9189 ], 355 U.S. 339, 361 (1958)); Spies v. United States [43-1 USTC ¶9243 ], 317 U.S. 492, 496 (1943); United States v. Hook [86-1 USTC ¶9179 ], 781 F.2d 1166, 1169 (6th Cir.), cert. denied, 479 U.S. 882 (1986).

Apparently, Daniel argues that he cannot be charged with attempting to evade payment of taxes because a tax deficiency did not exist. He argues that because there has been no assessment and demand for taxes, there is no deficiency. However, when a taxpayer fails to file a federal income tax return and the government can show a tax liability pursuant to the tax code, a tax deficiency within the meaning of section 7201 arises by operation of law on the date that the return is due to be filed. United States v. Dack [84-2 USTC ¶9913 ], 747 F.2d 1172, 1174 (7th Cir. 1984) (citing United States v. Voorhies [81-2 USTC ¶9710 ], 658 F.2d 710, 714 (9th Cir. 1981)). See also United States v. Hogan [88-2 USTC ¶9593 ], 861 F.2d 312, 315 (1st Cir. 1988). The law does not require an assessment or demand for payment before a tax deficiency arises. Id. Thus, when Daniel failed to file his federal income tax return, and the government determined his tax liability, a tax deficiency arose by operation of law, fulfilling the tax deficiency element of section 7201 .

Daniel further alleges that the government did not meet its burden in proving that he willfully and through affirmative acts, attempted to evade or defeat income tax. The jury found that Daniel willfully attempted to evade the payment of taxes through conduct and actions. In a criminal case with a jury trial, the standard of review for claims of insufficient evidence is "whether, after viewing all the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319 (1979) (emphasis in original). See also United States v. Ellzey, 874 F.2d 324, 328 (6th Cir. 1989). At trial, the United States introduced the following evidence: (1) Daniel had previously filed income tax returns; (2) Daniel stopped filing income tax returns for a period of years; (3) relatives, business associates, and certified public accountants made Daniel aware of his responsibility to file income tax returns; (4) when Daniel stopped filing returns, he began to use other individuals' credit cards for business and personal expenses; (5) Daniel used cash extensively, even converting checks to cash immediately; (6) Daniel paid at least three employees in cash; (7) Daniel subsequently changed the status of his employees to sub-contractors; (8) Daniel purchased investments under his second wife's name; (9) Daniel titled several business-related vehicles in his son's name; (10) Daniel refused to keep checking or savings accounts in his name, despite his receipt of checks for large amounts of money from his theatre-seat installation business; and (11) during the tax years 1985-87, Daniel paid his insurance policies in cash. This evidence is sufficient to sustain Daniel's conviction under the United States ' theory that Daniel willfully failed to pay tax on earned income. See Spies [43-1 USTC ¶9243 ], 317 U.S. at 499 (affirmative and willful elements could be met through proof of conduct such as concealment of assets); United States v. Grumka [84-1 USTC ¶9273 ], 728 F.2d 794, 797 (6th Cir. 1984) (circumstantial evidence as well as defendant's prior tax-paying history and advice concerning the need to file proper tax returns constitutes evidence to establish element of willfulness).

Daniel alleges that he was denied effective assistance of counsel. Daniel did not make this claim to the district court. As a general rule, we will not review an ineffective assistance of counsel claim raised for the first time on appeal. United States v. Sanchez, 928 F.2d 1450, 1458 (6th Cir. 1991) (citing United States v. Swidan, 888 F.2d 1076, 1081 (6th Cir. 1989)). See also United States v. Gonzales, 929 F.2d 213, 215 (6th Cir. 1991); United States v. Castro, 908 F.2d 85, 89 (6th Cir. 1990). Ineffective assistance of counsel claims are best brought by a defendant in a post-conviction proceeding under 28 U.S.C. §2255 so that the parties can develop an adequate record on the issue. United States v. Frazier, 936 F.2d 262, 267 (6th Cir. 1991). We will consider an ineffective assistance of counsel claim on direct appeal of a criminal conviction only when the record is adequate to assess the merits of the defendant's allegations. See United States v. Wunder [90-2 USTC ¶50,575 ], 919 F.2d 34, 37 (6th Cir. 1990). In this case, because Daniel raises his ineffective assistance of counsel claim for the first time on appeal and the record is not adequate to assess the merits of his claim, we will not review his claim.

Daniel alleges that the amount of restitution awarded the government is in excess of what is permitted under the Sentencing Guidelines. As part of Daniel's sentence, the district court awarded the United States restitution in the amount of $154,353.50 based on the Pre-sentence Report calculation of Daniel's total civil liability including statutory penalties for the three years in question. In the same report, the probation officer determined that Daniel's "unreported tax due for prosecution purposes for the respected [sic] three years was $17,214.32, $8,266.21, and $15,489.37, for a total amount of $40,969.90." Pre-sentence Report, page 3, para. 11. Relying on Hughey v. United States, 109 L.Ed.2d 408 (1990), Daniel argues that restitution should be limited to the amount of tax liability for which the defendant was convicted. In Hughey, the Supreme Court held that restitution ordered pursuant to the Victim and Witness Protection Act, 18 U.S.C. §3663 (1987), should be limited to the loss actually suffered as a result of the crime for which the defendant was convicted. Hughey, 109 L.Ed.2d at 417 ("loss caused by the conduct underlying the offense of conviction establishes the outer limit of a restitution order."). Section 5E 4.1 of the Sentencing Guidelines states that restitution shall be ordered "in accordance with 18 U.S.C. §3663(d)." United States Sentencing Commission, Guidelines Manual, §5E 4.1. According to the government, Daniel's tax liability "for criminal purposes" is $40,969.90. Thus, the appropriate amount of restitution in the present case is $40,969.90. Restitution above this amount for additional "civil liabilities" is inappropriate. Hughey, 109 L.Ed.2d at 417; see also United States v. Joseph, 914 F.2d 780, 785 (6th Cir. 1990). It is theoretically possible that Daniel, after being convicted and serving his sentence, might then prevail in whole, or in part, in a civil action concerning his civil tax liability thus reducing the amount owed as alleged by the government. Restitution is appropriate when the victim and the amount are known. See Joseph, 914 F.2d at 785. In the present case, while we may point to the United States as "victim," we can point to no amount other than the $40,969.90 for purposes of restitution.

We distinguish the present case from our decision in United States v. Hatchett [90-2 USTC ¶50,566 ], 918 F.2d 631 (6th Cir. 1990). In Hatchett, which was decided shortly after the Supreme Court decided Hughey, we upheld the district court's conditioning of probation on the payment of all back taxes. Hatchett [90-2 USTC ¶50,566 ], 918 F.2d at 644-45. In Hatchett, we stated that the district court's order "should be interpreted as being limited to obligations that either have gone to judgment or are otherwise legally owed." Id. at 645. Daniel's situation differs from Hatchett because in the present case Daniel's civil tax liability is unknown. At trial, the sum of $40,969.90 formed the basis for Daniel's criminal tax liability.

Finally, Daniel challenges his sentence alleging the district court improperly applied the Sentencing Guidelines by considering past conduct not included in the indictment, specifically Daniel's failure to file income tax returns as well as tax liabilities for 1982, 1983, and 1984. In determining the base offense level for tax evasion, the court looks to the "tax loss." United States Sentencing Commission, Guidelines Manual, §2T1.1 (Nov. 1990). Application Note 2 of section 2T1.1 explains that "tax loss" is defined as "what is commonly called the 'criminal deficiency,' " and states that this amount is to be determined by the same rules applicable in determining any other sentencing factor. Application Note 3 of section 2T1.1 states that when a court is "[d]etermining the total tax loss attributable to the offense [ ], all conduct violating the tax laws should be considered as part of the same course of conduct or common scheme or plan unless the evidence demonstrates the conduct is clearly unrelated." Id. Reading Application Notes 2 and 3 together, and in light of the unique nature of the tax laws, we find that "all conduct violating the tax laws" must refer to all relevant criminal conduct underlying the charged offense. The United States has alleged a criminal tax deficiency in the amount of $40,969.90 and we agree that, for relevant conduct purposes, Daniel may be sentenced to a term based on this "criminal deficiency." Daniel's unknown liability for tax years 1982-84, however, is a civil tax liability and is not part of the underlying criminal conviction. Daniel has had no opportunity to disprove the greater civil liability alleged by the government in Daniel's pre-sentence report. In fact, Daniel's civil liability could possibly be much greater than $40,969.90 solely because of fines and interest, which are specifically excluded from consideration in sentencing. Guidelines Manual, §2T1.1, Application Note 2. As with the issue of restitution, there is an absence of evidence of taxes due in excess of the $40,969.90 alleged in the indictment. Because of a lack of evidence of criminal behavior regarding Daniel's tax liabilities other than $40,969.90, this court remands for resentencing using this amount.

Accordingly, we affirm Daniel's conviction under 26 U.S.C. §7201 . We remand however, both for resentencing and recalculation of the amount of restitution.

 

 

[91-1 USTC ¶50,146] United States of America , Appellee v. Richard E. Schermerhorn, Defendant-Appellant

(CA-2), U.S. Court of Appeals, 2nd Circuit, 90-1035, 6/25/90, 906 F2d 66, 906 F.2d 66. Affirming an unreported District Court decision

[Code Sec. 7201 ]

Crimes: Income tax evasion: Evidence.--A former state senator's conviction for income tax evasion was affirmed. He failed to report to the IRS a $50,000 payment from his partner for the partner's purchase of his share of a motel franchise, the forgiveness of an outstanding loan from the motel corporation and the corporation's assumption of mortgage payments on his home. His claim that there was insufficient evidence to support his conviction was without merit.

Otto G. Obermaier, United States Attorney, Howard M. Shapiro, Joan McPhee, Assistant United States Attorneys, New York, N.Y. 10007, for appellee. James J. Moriarty, William Farrell, New York , N.Y. , for defendant-appellant.

Before OAKES, Chief Judge, PIERCE and PRATT, Circuit Judges.

PRATT, Circuit Judge:

Richard E. Schermerhorn appeals his conviction, following a jury trial, of income tax evasion, 26 U.S.C. §7201 , obstruction of justice, 18 U.S.C. §1503 , and submitting a false statement to a bank, 18 U.S.C. §§1014 and 2 . The jury found Schermerhorn not guilty of mail fraud, 18 U.S.C. §1341 , and bank fraud, 18 U.S.C. §1344. Because the jury found Schermerhorn guilty of income tax evasion, the district court dismissed, on the government's motion, the lesser-included offense of subscribing to a false tax return. Schermerhorn was sentenced to consecutive terms of imprisonment of twelve months for the income tax evasion and six months for obstruction of justice. The district court suspended sentence on the conviction of submitting a false statement to a bank, and placed Schermerhorn on probation for a period of two years.

Schermerhorn raises three issues on appeal. First, he contends that the district court erred when it denied his pretrial motion to dismiss the mail fraud counts. While the jury ultimately acquitted Schermerhorn of these counts, he maintains that their presence in the case allowed the introduction of what was, as to the other counts, irrelevant but prejudicial evidence. Second, he claims that his false statement conviction should be dismissed because there was insufficient evidence to prove that the bank was insured by the FDIC. Third, Schermerhorn claims that all of his convictions should be dismissed for insufficient evidence. We reject each of these contentions and affirm the convictions.

BACKGROUND

A. The State Investigation and the Alleged Mail Fraud.

In 1983 the New York State Organized Crime Task Force began an investigation of then New York State Senator Richard E. Schermerhorn, based on allegations received from Dominic Lofaro, an informant who was a former member of the Gambino organized crime family. Together with an investigator from the task force, Anthony Procino, Lofaro posed as a member of organized crime who hoped to obtain state construction contracts. Procino and Lofaro met with Schermerhorn on three separate occasions and gave him a total of $5,000 in cash.

After his re-election in November of 1984, Schermerhorn was pressed by Procino about the state construction contracts. At this point Schermerhorn offered to return the money, claiming that he believed that it had been a campaign contribution. Nevertheless, Schermerhorn neither returned the money, nor did he ever declare receiving it on the financial disclosure forms that his staff mailed to the New York State Board of Elections. This evidence formed the basis for the mail fraud counts on which Schermerhorn was acquitted.

B. The Tax Counts.

In 1985 Schermerhorn discussed selling his half of a Super 8 Motel franchise in Cromwell , Connecticut , to his partner, Steven Gorss. The two men agreed that Gorss would purchase Schermerhorn's share in the motel corporation in exchange for $200,000 in cash, the forgiveness of Schermerhorn's outstanding loan from the corporation, and the corporation's assumption of Schermerhorn's second mortgage on his home. A few days later, Schermerhorn and Gorss met to finalize the agreement. They signed corporate minutes that explained Schermerhorn's redemption of stock and his resignation as a director of the corporation, and Schermerhorn formally executed his resignation as a director, effective immediately. Gorss then gave Schermerhorn his personal check for $50,000.

Schermerhorn's failure to report to the IRS the $50,000 payment, the forgiveness of his loan from the corporation, and the corporation's assumption of his mortgage payments constituted the basis for the tax evasion and false tax return convictions.

C. The False Bank Loan Application.

In March of 1986, well after selling his motel interest to Gorss, Schermerhorn applied to Barclay's Bank for a loan. On a financial statement that he filed in conjunction with this loan, Schermerhorn was required to list his assets. Schermerhorn included in this list the Super 8 Motel, which accounted for $800,000 of his listed total assets of $823,133. Schermerhorn's senior admin istrative assistant, Cheryl Barton, who was helping him complete the form and who knew about the prior sale of his interest in the motel, questioned him about his listing the motel as an asset, but Schermerhorn told her to "just put it in." The bank granted Schermerhorn the loan, but he later defaulted, and it was paid by the guarantor.

D. Obstruction of Justice.

In August of 1987, the FBI informed Schermerhorn that he was a target of a federal grand jury investigation. In September Schermerhorn attempted to convince Steven Gorss to alter the papers regarding the motel transaction. Specifically, he wanted the papers to indicate that the $50,000 he had received from Gorss was a loan and not a downpayment. At that point, Gorss began cooperating with the FBI, and he met with Schermerhorn three times while wearing a concealed tape recorder. At each of these meetings, Schermerhorn attempted to convince Gorss to alter the documents so that the sale would appear as a loan. He also wanted Gorss to change the date of the transaction from November of 1985 to April of 1986 so that his income tax liability would be deferred.

Schermerhorn also told Cheryl Barton, who was to be interviewed by IRS agents, that if she were asked about the motel transaction, she should tell the agents that the transaction was a loan, not a sale, and that the attorney had made a mistake in the papers. Unable to convince Gorss to alter the documents, Schermerhorn in 1987 filed an amended 1985 tax return in which he admitted an additional $20,000 tax liability.

DISCUSSION

A. The Mail Fraud Counts.

Schermerhorn claims that from the beginning the indictment's mail fraud counts were factually insufficient. He argues that the trial court's refusal to dismiss these counts prior to trial permitted the introduction of otherwise inadmissible evidence, harmful to Schermerhorn. He maintains that this evidence, particularly the tapes of his meetings with people whom he believed were members of organized crime, substantially prejudiced the jury against him. The government counters by asserting that if Schermerhorn believed he would be unfairly prejudiced by the mail fraud counts, he should have objected to the joinder of the mail fraud counts with the other charges and moved for a severance under rule 14 of the Federal Rules of Criminal Procedure.

Because the mail fraud indictment stated a claim under the mail fraud statute as interpreted in McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), it was not an abuse of discretion for the district court to deny Schermerhorn's pretrial motion requesting that these counts be dismissed. At the end of the government's case, Schermerhorn made a rule 29 motion, which was denied. He never objected to the joinder of the counts; instead, he single-mindedly attempted to have the mail fraud counts dismissed.

After the verdict, the district court judge told the jury that had Schermerhorn been found guilty on the mail fraud counts, he would have dismissed these counts as a matter of law. This comment does not mean, as Schermerhorn seems to believe, that he is entitled to a reversal on the other counts. Regardless of what the district judge gratuitously said, Schermerhorn's pretrial motion to dismiss the mail fraud counts had been properly denied and the evidence of which he now complains, although perhaps insufficient to prove his guilt, was properly introduced by the government. If prior to or during the trial Schermerhorn had been concerned with the prejudicial impact of this evidence on the other counts, he should have requested a severance. Having failed to do this in the district court, he cannot succeed on appeal with his belated claim of prejudicial joinder. See F.R.Cr.P. 12(f); United States v. Beltempo, 675 F.2d 472, 481 (2d Cir.), cert. denied, 457 U.S. 1135, 102 S.Ct. 2963, 73 L.Ed.2d 1353 (1982).

B. The False Statement Count.

Schermerhorn was also convicted of making a false statement to a federally insured bank. To convict on this count, the government was obligated to prove that the bank was insured by the FDIC at the time the false statement was made. 18 U.S.C. §1014 (1976). The only evidence of FDIC insurance that the government offered on this point, if read narrowly and literally, indicated that the bank was insured at the time of trial. Peter Dumas, a vice-president of Barclay's Bank and, at the time of Schermerhorn's loan application, the loan admin istrator who reviewed his application, testified that Barclay's deposits "are" insured by FDIC. There was no explicit testimony that the bank was insured at the time Schermerhorn made his false statement.

In claiming that Dumas' statement was insufficient proof, Schermerhorn points to United States v. Sliker, 751 F.2d 477 (2d Cir. 1984), cert denied, 470 U.S. 1058, 105 S.Ct. 1772, 84 L.Ed.2d 832, 471 U.S. 1137, 105 S.Ct. 2679, 86 L.Ed.2d 697 (1985). Sliker and the present case are factually similar: in both cases, while the government had established insurance as of the time of trial, it had failed to elicit testimony that the bank in question was insured at the time of the crime. In his opinion, Judge Friendly castigated the prosecutor for failing "to ask the simple question that would avoid the need for judicial consideration of what should be a non-problem * * *." Sliker, 751 F.2d at 484. We emphatically reiterate his reproach.

But in Sliker we did not hold that the failure to elicit this information was fatal to the government's case. On the contrary, we held that where "the evidence is oral testimony that the bank is insured, and the interval between the crime and the trial is not too great, it is reasonable to conclude that 'viewed in context, the jury could draw the inference that the bank was insured at the time * * *.' " Sliker, 751 F.2d at 484-85 (citation omitted). Schermerhorn argues that because the time between his bank application and trial was roughly.four or five months longer than the time interval in Sliker, Dumas' testimony was inadequate to prove that the bank was insured at the time of Schermerhorn's application. We do not agree.

Sliker did not establish a temporal boundary for cases of this type. The case holds that "when the time span is not too great and there is no suggestion of an intervening circumstance that might call its previous existence into question" testimony such as Dumas', although far from perfect, is acceptable. Sliker, 751 F.2d at 484. The four or five month difference in time between the circumstances in Sliker and here is not significant in the context of this case. The context of Dumas' testimony--in particular his involvement with Schermerhorn's loan application--indicates, in the absence of any contrary evidence, that the circumstances at trial were the same as those existing when Schermerhorn filed his loan application; thus, the jury could reasonably infer that the bank was insured at the time Schermerhorn applied for a loan.

C. Sufficiency of Evidence.

Schermerhorn asks us to dismiss all of his convictions because he claims that there was insufficient evidence of each of the crimes. This argument is without merit. Schermerhorn seems to believe that because he can offer alternative explanations for his actions, he is entitled to a reversal. As the district judge stated, however, that there was "an abundance of evidence to support the convictions." Schermerhorn fails to offer any basis that would require us to find that the jury and the district judge were incorrect in their conclusions. Accordingly, Schermerhorn has not met the "very heavy burden" he bears in challenging the sufficiency of the evidence. United States v. Rivalta, 892 F.2d 223, 227 (2d Cir. 1989).

CONCLUSION

We affirm Schermerhorn's convictions in all respects.

 

 

[89-2 USTC ¶9437] United States of America , Plaintiff-Appellee v. Donald W. Dawes and Phyllis C. Dawes, Defendants-Appellants

(CA-10), U.S. Court of Appeals, 10th Circuit, 88-2348, 88-2352, 5/12/89, 874 F2d 746, Affirming an unreported District Court decision

[Code Sec. 7203 ]

Failure to file return: Defenses: Right to counsel.--Failure to inform the taxpayers of the dangers and disadvantages of proceeding without counsel during their trial for failure to file tax returns was harmless error and, based on the evidence, harmless beyond a reasonable doubt. No returns had been filed for the years in question, although returns had been filed during previous years. The taxpayers' determination that they were not required to file returns because, based on religious beliefs, they could not sign a Form 1040 was rejected. The requirement that a tax return be signed under penalty of perjury is not an unconstitutional restriction on the right of freedom of religion. Also, the court clearly had jurisdiction in this matter. Further, it was not necessary to bring the charges by indictment as the charges were not for an infamous crime. Lastly, the taxpayers' sentences did not constitute cruel and unusual punishment.

Benjamin L. Burgess, Jr., United States Attorney, Stephen K. Lester, Assistant United States Attorney, Wichita , Kan. 67202 , for plaintiff-appellee. Donald W. Dawes, pro se.

Before MOORE, TACHA, and BRORBY, Circuit Judges.

Per Curiam"

EC: After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of these appeals. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The causes are therefore ordered submitted without oral argument.

These are direct criminal appeals from the convictions of defendants (husband and wife) of three counts each of failure to file income tax returns for 1981 through 1983 in violation of 26 U.S.C. §7203 . Following a jury trial, defendants were convicted on all counts; each was subsequently sentenced as follows: one year imprisonment (Count I), suspended sentences with five years probation (Counts II and III), fines totalling $60,000, and costs of prosecution in the amount of $3,200.

The panel earlier stayed defendants' reporting date and directed the government to show cause why these convictions should not be reversed for noncompliance by the district court with the requirements of United States v. Padilla, 819 F.2d 952 (10th Cir. 1987). In Padilla, we held that the trial judge must inform a pro se defendant of the dangers and disadvantages of proceeding without counsel in order for a waiver of counsel to be knowing and intelligent. Id. at 956-59. The government concedes that the district court did not ensure defendants' knowledge and understanding of the dangers of self-representation.

However, this does not end our inquiry. In United States v. Gipson, 693 F.2d 109, 112 (10th Cir. 1982), cert. denied, 459 U.S. 1216 (1983), we concluded that notwithstanding the failure of the trial judge to ensure the defendant's full understanding of the consequences of waiving counsel, examination of the record revealed no reasonable possibility Gipson would have been found not guilty had he been represented by counsel. We concluded that the error was therefore harmless beyond a reasonable doubt, citing Chapman v. California, 386 U.S. 18, 24 (1967). We have subsequently applied the harmless error test in reviewing a state conviction in which the defendant was not advised of the inherent difficulties of proceeding without counsel. Sanchez v. Mondragon, 858 F.2d 1462, 1468 (10th Cir. 1988).

The Daweses were advised of their right to counsel at their initial appearance before the magistrate. At the arraignment, the magistrate suggested that the defendants retain counsel and specifically advised them that although they could represent themselves, they could not be represented by a nonlawyer.

The Daweses then retained counsel, but later filed a document entitled "disclaimer of actions of counsel," in which they made clear that their dissatisfaction with their attorneys stemmed from counsels' refusal to pursue issues the Daweses felt were important. This, along with their "notice of change of counsel," provides a clear expression of their intent to assume responsibility for and conduct their own defenses.

As will be seen, the issues, also outlined in a letter of dismissal from the Daweses to their attorneys, are without defensible legal foundation. There is no right to counsel who will blindly follow a defendant's instructions. United States v. Padilla, 819 F.2d at 956.

Thereafter, the Daweses filed numerous nontraditional, unconventional pleadings and motions, including a purported "specific power of attorney," appointing one Melvin White (a nonattorney they sought to have represent them) to exercise and perform all acts on their behalf in connection with the charges, including Mr. White's suffering the consequences of the Daweses' convictions. At the final status hearing before trial, defendants reiterated their intent to proceed pro se unless they could "find competent counsel that can do what we want them to do."

At the opening of trial, defendants again requested that Mr. White be allowed to be their "counsel," although he is not a member of the bar. The Daweses' theory was that they were entitled to counsel, and that they could "contract" with Mr. White to take their places in the proceeding. The court asked if their earlier statements that they would proceed with counsel if they could find competent counsel referred to their desire to have Mr. White as their counsel. Defendants replied yes. Thus, it is clear that defendants had no intention of retaining a licensed attorney to represent them; defendants wanted Mr. White and no one else to serve as their counsel. Given defendants' repeated insistence on Mr. White's serving as their counsel, it is clear that no inquiry or admonition by the district court as to the dangers of self-representation would have been availing.

There is no absolute constitutional right to counsel of one's choice. United States v. Padilla, 819 F.2d at 956; United States v. Freeman, 816 F.2d 558, 564 (10th Cir. 1987) (citing cases); United States v. McConnell, 749 F.2d 1441, 1450 (10th Cir. 1984); United States v. Nichols, 841 F.2d 1485, 1502 (10th Cir. 1988). Nor does a defendant have a constitutionally protected right to be represented by a person who is not admitted to the bar. United States v. Nichols, 841 F.2d at 1503 (10th Cir. 1988); United States v. Tedder [86-1 USTC ¶9426 ], 787 F.2d 540, 543 (10th Cir. 1986); United States v. Gigax [79-2 USTC ¶9646 ], 605 F.2d 507, 517 n.1 (10th Cir. 1979). Notwithstanding defendants' interpretation, "counsel" refers to a person authorized to practice law. United States v. Brown [79-1 USTC ¶9322 ], 600 F.2d 248, 257 (10th Cir.), cert. denied, 444 U.S. 917 (1979); United States v. Irwin [77-2 USTC ¶9627 ], 561 F.2d 198, 200 (10th Cir. 1977), cert. denied, 434 U.S. 1012 (1978). Defendants had no right to representation by Mr. White.

Our examination of the record convinces us there is no reasonable possibility defendants would have been found not guilty had they been represented by counsel. United States v. Gipson, 693 F.2d at 112. Thus, under the facts of these cases, noncompliance with the requirements of Padilla was harmless error, and, based on the evidence, harmless beyond a reasonable doubt. Chapman v. California , 386 U.S. at 24 (1967); Sanchez v. Mondragon, 858 F.2d at 1468. Briefly we review that evidence bearing in mind that the government was obligated to prove defendants were (1) required to file a return, (2) failed to do so, and (3) the failure was willful. 26 U.S.C. §7203 .

The government established that a search of the records at the IRS Service Center serving Kansas revealed no tax returns filed for defendants during the years in question. Through the Daweses' former accountant, the government also established that defendants had filed tax returns prepared by the accountant from 1976 to 1980 and that an employee in the accountant's office had contacted defendants in sufficient time to allow for preparation of their returns for 1981.

Additional testimony established income to defendants for the years in question from livestock sales, wheat sales, and dividends. Bank records reflected substantial financial transactions.

In addition, the Daweses participated in and received substantial low yield, deficiency, and storage payments through the Commodity Credit Corporation, which admin isters various payment programs under the farm bill then in effect.

Finally, the IRS case agent summarized the total income figures for each year from the various sources, adding up to a gross income for each of the three years in question ranging from over $190,000 to over $258,000. The estimated tax liabilities for these years ranged from $20,000 to $50,000.

The testimony of defendants' former accountant that in years prior to 1981 defendants had filed tax returns is proper evidence of willfulness in failing to file returns, United States v. Bohrer [87-1 USTC ¶9141 ], 807 F.2d 159, 161 (10th Cir. 1986), as is evidence of substantial gross income during the years in which defendants failed to file. Id. at 161-62. See also United States v. Payne [86-2 USTC ¶9673 ], 800 F.2d 227, 229 (10th Cir. 1986).

The focus of the Daweses' determination that they are not required to file tax returns is their position that they cannot, based on religious beliefs, sign the Form 1040 because of the requirement that the return be made under penalty of perjury. This declaration they claim is an oath, which they say they are forbidden to take.

This argument is totally unsupported by the law. The Supreme Court in United States v. Lee [82-1 USTC ¶9205 ], 455 U.S. 252 (1982), reversed a district court determination that defendant, a member of the Old Order Amish, was entitled to decline to withhold social security taxes from its employees and to pay the employer's share of the taxes. Recognizing that Amish religious principles might be offended, id. at 257, the Court determined that not all burdens on religion are unconstitutional, id., and that because "the broad public interest in maintaining a sound tax system is of such high order, religious belief in conflict with the payment of taxes affords no basis for resisting the tax." Id. at 260. As relevant to these cases, the requirement that the tax return be signed under penalty of perjury is not an unconstitutional restriction on defendants' rights to freedom of religion, Borgeson v. United States [85-1 USTC ¶9307 ], 757 F.2d 1071, 1073 (10th Cir. 1985), or free speech Mosher v. IRS [85-2 USTC ¶9774 ], 775 F.2d 1292, 1294-95 (5th Cir. 1985) (citing Borgeson), cert. denied, 475 U.S. 1123 (1986); Hettig v. United States [88-1 USTC ¶9335 ], 845 F.2d 794, 795 (8th Cir. 1988) (citing Mosher and Borgeson).

Defendants' other major argument was that the United States District Court for the District of Kansas lacked jurisdiction over the charged offenses. This too is without merit.

Under 18 U.S.C. §3231 , federal district courts have exclusive jurisdiction over "all offenses against the United States ," including those crimes defined in Title 26 of the United States Code. United States v. Tedder, 787 F.2d at 542; United States v. Studley [86-1 USTC ¶9390 ], 783 F.2d 934, 937 (9th Cir. 1986); United States v. Latham [85-1 USTC ¶9180 ], 754 F.2d 747, 749 (7th Cir. 1985); United States v. Spurgeon [82-1 USTC ¶9241 ], 671 F.2d 1198, 1199 (8th Cir. 1982). The Internal Revenue Code was validly enacted by Congress and is fully enforceable, United States v. Studley, 783 F.2d at 940; see also, Wheeler v. United States [84-2 USTC ¶9872 ], 744 F.2d 292, 293 (2d Cir. 1984). Venue is proper in the district of taxpayers' residence. United States v. Garman [84-2 USTC ¶9948 ], 748 F.2d 218, 220 (4th Cir. 1984), cert. denied, 470 U.S. 1005 (1985); United States v. Grabinski [84-1 USTC ¶9201 ], 727 F.2d 681, 684 (8th Cir. 1984); United States v. Rice [81-2 USTC ¶9718 ], 659 F.2d 524, 526 (5th Cir. 1981). See also 26 U.S.C. §6091(b)(1)(A)(i) .

Defendants also claim that the charges should have been brought by indictment rather than information because failure to file tax returns is an infamous crime. The answer to this argument was concisely stated in United States v. Kahl [78-2 USTC ¶9842 ], 583 F.2d 1351, 1355 (5th Cir. 1978):

An offense is defined as an infamous crime if the punishment for the offense includes the possibility of incarceration in a penitentiary. Mackin v. United States , 117 U.S. 348, 6 S.Ct. 777, 29 L.Ed. 909 (1886). A defendant who is sentenced to a term of imprisonment of one year or less can be sent to a penitentiary only if he consents. 18 U.S.C. §4083 . Since the maximum sentence for failure to file a tax return is one year, 26 U.S.C. §7203 , a person convicted for failure to file a return cannot be made to serve his sentence in a penitentiary. Thus, a charge of failure to file under §7203 does not hold a plaintiff to answer for an infamous crime and does not require an indictment. United States v. Pandilidis [75-2 USTC ¶9785 ], 524 F.2d 644, 649 n.7 (6th Cir. 1975), cert. denied, 424 U.S. 933, 96 S.Ct. 1146, 47 L.Ed.2d 340 (1976); United States v. Jordan [75-1 USTC ¶9154 ], 508 F.2d 750, 752-53 (7th Cir.), cert. denied, 423 U.S. 842, 96 S.Ct. 76, 46 L.Ed.2d. 62 (1975). Moreover, the fact that appellant here was sentenced to one year in prison on each count of the indictment does not convert the offense into an infamous crime. (Citation omitted.)

See also United States v. Greenwood [87-1 USTC ¶9273 ], 812 F.2d 632, 635 (10th Cir. 1987); United States v. Ellsworth [84-2 USTC ¶9710 ], 738 F.2d 333, 334-35 (8th Cir.), cert. denied, 469 U.S. 1042 (1984); United States v. Brewer, 681 F.2d 973, 974 (5th Cir. 1982); United States v. Driscoll [80-2 USTC ¶9723 ], 612 F.2d 1155, 1156 (9th Cir. 1980).

Appellants argue that the prosecution was invalid because the information was not based on a determination of probable cause. However, a probable cause determination is not a prerequisite to the filing of an information itself. United States v. Birkenstock [87-2 USTC ¶9416 ], 823 F.2d 1026, 1030-31 (7th Cir. 1987); United States v. Millican [79-2 USTC ¶9543 ], 600 F.2d 273, 276 (5th Cir. 1979) (citing Gerstein v. Pugh, 420 U.S. 103, 125 n.6 (1975)), cert. denied, 445 U.S. 915 (1980). No probable cause requirement attaches to the issuance of a summons. United States v. Bohrer [87-1 USTC ¶9141 ], 807 F.2d 159, 161 (10th Cir. 1986). Moreover, because appellants were convicted, any possible defect in either the failure to file an information (either verified or supported by affidavit) was cured. United States v. Millican, 600 F.2d at 277-78; cf. United States v. Saussy [86-2 USTC ¶9718 ], 802 F.2d 849, 851-52 (6th Cir. 1986) (no requirement in statutes or rules for verification of information; Millican does not require probable cause in hearing in connection with prosecution by information, but merely suggests advisability of hearing), cert. denied, 480 U.S. 907 (1987). And, finally, defendants in this case were afforded a probable cause hearing prior to trial. (Vol. IV).

The contention that appellants are not taxpayers because they are "free born, white, preamble, sovereign, natural, individual common law 'de jure' citizens of Kansas " is frivolous. Individuals are "persons" under the Internal Revenue Code and thus subject to 26 U.S.C. §7203 . United States v. Studley, 783 F.2d at 937; see also United States v. Rice, 659 F.2d at 528.

Equally without merit is appellants' reliance on Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429 (initial decision), 158 U.S. 601 (decision on rehearing) (1895), as invalidating income tax absent apportionment. See Charczuk v. Commissioner [85-2 USTC ¶9656 ], 771 F.2d 471, 472-73 (10th Cir. 1985); (explaining Pollock and subsequent historical events); United States v. Stillhammer [83-1 USTC ¶9349 ], 706 F.2d 1072, 1077-78 (10th Cir. 1983) (sixteenth amendment passed to overrule Pollock); see also United States v. Lawson [82-1 USTC ¶9197 ], 670 F.2d 923, 927 (10th Cir. 1982).

Finally, appellants claim their sentences constitute cruel and unusual punishment. We disagree. The sentences are within the maximum allowable by statute and are thus not subject to appellate review. Dorszynski v. United States, 418 U.S. 424, 431 (1974); United States v. Hack, 782 F.2d 862, 870 (10th Cir.), cert. denied, 476 U.S. 1184 (1986); United States v. O'Driscoll, 761 F.2d 589, 597 (10th Cir. 1985), cert. denied, 475 U.S. 1020 (1986); United States v. Alberico, 604 F.2d 1315, 1322 n.19 (10th Cir.), cert. denied, 444 U.S. 992 (1979). In addition, the imposition of the costs of the prosecution is mandated by 26 U.S.C. §7203 . United States v. Saussy, 802 F.2d at 855; United States v. Wyman [84-1 USTC ¶9147 ], 724 F.2d 684, 688 (8th Cir. 1984); United States v. Chavez [80-2 USTC ¶9688 ], 627 F.2d 953, 954-55 (9th Cir. 1980), cert. denied, 450 U.S. 924 (1981).

We have carefully considered all the appellants' other arguments and find the issues without merit.

The judgments of the United States District Court for the District of Kansas are AFFIRMED. All outstanding motions and petitions are denied, and the stay entered January 5, 1989, is vacated.

 

 

[86-2 USTC ¶9739] United States of America , Plaintiff-Appellee v. Arthur Reed Price, Defendant-Appellant

(CA-5), U.S. Court of Appeals, 5th Circuit, 85-2557, Summary Calendar, 6/17/86, Affirming an unreported District Court decision

[Code Secs. 7203 and 7205 ]

Avoidance of tax: Appeal without merit: Right to counsel.--The taxpayer's conviction for willful failure to file tax returns or pay tax, and filing fraudulent withholding exemption certificates was affirmed. His contention that as a citizen of Texas he was exempt from payment of taxes was without merit. His right to counsel was not violated by the court's refusal to allow a non-licensed attorney to represent him; two lawyers were appointed by the court to represent him.

Henry K. Oncken, United States Attorney, Susan L. Yarbrough, James R. Gough, Assistant United States Attorneys, Houston, Tex. 77208, for plaintiff-appellee. Arthur Reed Price, P.O. Box 1000 , Seagoville , Tex. 75159 , pro se.

Before ALVIN B. RUBIN, SAM D. JOHNSON and EDITH H. JONES, Circuit Judges.

OPINION

RUBIN, Circuit Judge:

A person convicted of willful failure to file tax returns or pay tax and of filing fraudulent withholding exemption certificates asserts the untenable proposition that he is not amenable to the same laws as others because he is a citizen of Texas and, as such, has special status that exempts him from payment. While he may be correct in asserting that Texas is not an ordinary state, this fact does not accord its citizens immunity from federal income taxation. We, therefore, affirm the conviction.

Arthur Price states that he is a "Dejure citizen of the State of Texas , under principles of jus sanguinis and jus soli." He believes that Texas is not an ordinary state and that he is a "nominal" class citizen, ipso facto, who does not need to pay federal income taxes. He filed no tax returns and claimed exemption from withholding during the years, 1980-82. Consequently, he was indicted and charged with violating the applicable provisions of the Tax Code. ¹ The "counsel" he chose to represent him at trial was not a licensed attorney and the court refused to allow this person to appear, but appointed two lawyers to represent Price, or to assist him, as Price chose. Declaring his independence from lawyers as well as from the United States , Price refused to cooperate with the lawyers or to seek their aid. Proceeding pro se at trial, he presented no opening argument, neither presented nor cross examined witnesses, and made virtually no closing statement. A jury found him guilty of all charges. He was sentenced to serve five years in prison, the last three of which were suspended in favor of five years supervised probation; he was also ordered to pay past due taxes, penalties and interest, and a $5,000 fine.

Price's appeal is based on two theories. His first is that Texas enjoys a special status among the "fifty-nine (59) 'states' in this UNION " [sic]. As a citizen of Texas, he asserts that he is not subject to federal jurisdiction in the way that citizens of many of the other less privileged states might be and that "his STATUS is different than most of the automatons inhabiting our lands today." Not surprisingly, he asserts that his special status enables him to remain beyond the reach of the Internal Revenue Code. Nevertheless, he apparently concedes that the federal courts have jurisdiction over him. His second theory is that his right to the assistance of counsel was denied when the court refused to permit him to be represented by an unlicensed attorney, presumably skilled in the arcane legal principles to which Price himself adheres.

In support of his various claims, Price cites the General Laws of Massachusetts of 1672, the Federalist Papers, Marbury v. Madison, concurring opinions in the Dred Scott decision, the Northwest Ordinance of 1787, the Articles of Confederation, Thomas Paine, and Jesus Christ.

Price's "special status" argument has no legal merit. However the qualities of its people, land, and history may differentiate them from those of other states and their citizens, Texas is a state like the other forty-nine, under the same national constitution and laws. The citizens of Texas are subject to the Federal Tax Code. ² The withholding provisions of the Tax Code are constitutional. ³

Price was not denied counsel. In fact, a standby counsel, whose assistance Price refused, was present at trial. The sixth amendment guarantee of the right to counsel does not grant a defendant the right to have counsel who is not admitted to the Bar. ⁴ The right to counsel is a right to be represented by a member of the Bar, who has been admitted to practice before the court in which he appears. ⁵

For these reasons, the judgment is AFFIRMED.

¹ 26 U.S.C. §§7203 , 7205 (1982).

² See U.S. Constitution, art. 1 Section 1 , art. 6, Cl. 2, Amendments 14, 16.

³ Beatty v. Commissioner of Internal Revenue [82-1 USTC ¶9204 ], 667 F.2d 501, 501-02 (5th Cir. 1982) (citing Central Illinois Public Service Co. v. United States [78-1 USTC ¶9254 ], 435 U.S. 21, 98 S.Ct. 917 (1978)), reh'd, 676 F.2d 150 (1982).

⁴ United States v. Norris, 780 F.2d 1207, 1211 (5th Cir. 1986); United States v. Brown, 591 F.2d 307, 310 (5th Cir.), cert. denied, 442 U.S. 913, 99 S.Ct. 2831 (1979); United States v. Bertolino, 576 F.2d 1133 (5th Cir. 1978) (per curiam); United States v. Arlt, 560 F.2d 200 (5th Cir. 1977), after remand, 567 F.2d 1295 (5th Cir. 1978).

⁵ McCuin v. Texas Power & Light Co., 714 F.2d 1255, 1262 (5th Cir. 1983).

 

 

[86-1 USTC ¶9390] United States of America , Plaintiff-Appellee v. Ruth Studley, Defendant-Appellant

(CA-9), U.S. Court of Appeals, 9th Circuit, 84-1288, 2/27/86. ^**, 783 F2d 934, (783 F2d 934.) Affirming unreported District Court decision

[Code Sec. 7203 ]

Crimes: Failure to file: Criminal procedure: Meritless appeals.--A real estate broker was properly convicted of three counts of willful failure to file tax returns. Ample evidence was admitted to show that her gross income was greater than the statutory minimum, and there was no merit to any of the numerous arguments that she raised on appeal.

Thomas E. Flynn, Sacramento , Calif. , for plaintiff-appellee. Ruth Studley, Project City , Calif. , pro. per.

Opinion

Before BARNES, FARRIS and CANBY, Circuit Judges.

CANBY, Circuit Judge:

Studley, a real estate broker, was convicted after a jury trial of three counts of willful failure to file tax returns for the years 1978, 1979, and 1980. ¹ 26 U.S.C. §7203 . Studley filed a timely notice of appeal and raises a host of issues before us. We affirm.

I. ARREST WARRANT

Studley first contends that her arrest and prosecution were illegal because neither the arrest warrant nor the information was supported by a sworn oath or affirmation. As a result, she believes her conviction should be reversed. ²

Fed. R. Crim. P. 9(a) requires a showing of probable cause under oath before a warrant may be issued on an information. The government candidly concedes that the probable cause statement was omitted from the warrant application but states that it was filed immediately after the omission was brought to the government's attention by appellant.

Despite the government's improper handling of the warrant application, however, the conviction must stand. The Supreme Court has repeatedly held that an illegal arrest or detention does not void a subsequent conviction. See Gerstein v. Pugh, 420 U.S. 103, 119 (1975); Frisbie v. Collins, 342 U.S. 519, 522 (1952). Studley in no way argues that her conviction was based on evidence derived from any illegal police activities. Moreover, a prior judicial determination of probable cause is not a prerequisite to prosecution by information. Gerstein, 420 U.S. at 119. Thus, any illegality in Studley's arrest does not require a reversal of her conviction.

II. JURISDICTION

Studley argues that, because her arrest was illegal, the district court lacked both personal and subject matter jurisdiction. We disagree. First, the court unquestionably had subject matter jurisdiction. Under 18 U.S.C. §3231 , federal district courts have exclusive original jurisdiction over "all offenses against the laws of the United States ." These offenses include crimes defined in Title 26 of the United States Code. United States v. Przybyla, 737 F.2d 828, 829 (9th Cir. 1984) (per curiam), cert. denied, 105 S.Ct. 2320 (1985). Moreover, the defect in Studley's arrest did not deprive the district court of personal jurisdiction over her. See United States v. Warren , 610 F.2d 680, 684 n.8 (9th Cir. 1980) (court has jurisdiction over any party who appears before it, regardless of how appearance is effected).

Next, Studley claims she was prejudiced in this case because she never received a definitive statement of the basis for the district court's jurisdiction. Over review of the record shows that the district court explained the basis of its jurisdiction several times, the last on May 21, 1984. Studley's assertion that she was prejudiced by changes in the court's explanations is meritless; all of her attacks on the court's jurisdiction were frivolous. She was not prejudiced.

III. TAXPAYER STATUS

Studley contends that she is not a "taxpayer" because she is an absolute, freeborn and natural individual. This argument is frivolous. An individual is a "person" under the Internal Revenue Code and thus subject to 26 U.S.C. §7203 . United States v. Romero [81-1 USTC ¶9278 ], 640 F.2d 1014, 1016 (9th Cir. 1981). ³

IV. DENIAL OF JURY LISTS

Studley also contends that reversal is required because she was denied access to jury lists. Under 28 U.S.C. §1867(f), parties "shall be allowed to inspect" records of the jury selection process in order to prepare motions challenging jury selection. The right to inspect jury lists is essentially unqualified. Test v. United States , 420 U.S. 28, 30 (1975) (per curiam); United States v. Armstrong, 621 F.2d 951, 955 (9th Cir. 1980).

Where a motion to inspect is erroneously denied, however, reversal is not required. Instead, the case should normally be remanded to permit inspection. Test, 420 U.S. at 30; United States v. Beaty, 465 F.2d 1376, 1382 (9th Cir. 1972). If inspection reveals grounds upon which to challenge the jury selection, a defendant may file a motion, such as for a new trial, nunder §1867(a). Beaty, 465 F.2d at 1382. Such motions must be made "within seven days after the defendant discovered or could have discovered, by the exercise of diligence, the grounds therefor . . . ." 28 U.S.C. §1867(a). The court shall then grant the §1867(a) motion if it determines that the jury selection procedure was prejudicial. Beaty, 465 F.2d at 1382.

Before trial, Studley requested a list of all grand and petit jurors. ⁴ The district court denied the request. After trial, Studley renewed the request, citing Test. The court granted inspection on November 11, 1984, but Studley has not subsequently moved for dismissal of the indictment or a new trial based on her inspection.

The government concedes that Studley's first request should have been granted. Nonetheless, we decline either to reverse or remand because Studley has received the benefit of the remedy under Test and Beaty. Studley has already had an opportunity to inspect the jury lists, but she failed to file the required §1867(a) motion within seven days. Thus, Studley's attempt to challenge jury selection is now untimely.

V. CONTINUANCE

Studley argues that the district court committed reversible error when it denied her continuance motion made on the opening day of trial. She claims she needed the extra time to secure legal assistance; therefore the denial infringed her sixth amendment right to counsel.

Generally, a decision to grant or deny a continuance is reviewed for an abuse of discretion. United States v. Flynt, 756 F.2d 1352, 1358, modified on other grounds, 764 F.2d 675 (9th Cir. 1985). When the defendant's sixth amendment right to counsel is implicated, however, a court must balance several factors to determine if the denial was "fair and reasonable." United States v. Leavitt, 608 F.2d 1290, 1293 (9th Cir. 1979) (per curiam). Among the factors are: whether the continuance would inconvenience witnesses, the court, counsel, or the parties; whether other continuances have been granted; whether legitimate reasons exist for the delay; whether the delay is the defendant's fault; and whether a denial would prejudice the defendant. Id. Thus, a continuance may be denied "even when the denial results in the defendant's being unrepresented at trial." Id.

Applying these factors to this case, we find no abuse of discretion. At her initial appearance, Studley asked to be represented by a person who was not a licensed attorney. At that time, the district court told her that she could elect to represent herself but that anyone else representing her in court must be licensed. The court later asked the Federal Public Defender to consult with her regarding appointment of counsel. The public defender determined that Studley did not qualify for appointed counsel. Thereafter, based on Studley's representation that she would choose either to represent herself or to retain counsel, the court continued the matter for a week.

The following week Studley again asked to be represented by unlicensed counsel, and the court again denied the request, though it permitted her to have an unlicensed assistant sit with her at trial.

Studley then filed 31 motions and asked for another continuance, which the court granted. Trial was set for six weeks later. During this period, Studley apparently made no attempt to secure counsel on her own or to inform the court that she had changed her mind concerning self-representation at trial.

On the morning of trial, more than three months after her arrest, Studley again requested a continuance on the grounds that she did not know the nature of the court's jurisdiction, that she needed counsel, and that complex issues remained unresolved. The district court denied the request, finding that the request had not been made in good faith, that the trial had already been continued several times, that the basis of the court's jurisdiction was clear and had been explained repeatedly, that the facts of the case were not complex, and that Studley would not have obtained counsel even had the continuance been granted. As in Leavitt, 608 F.2d at 1294, Studley knew of the need to get a licensed attorney for several months and had been granted previous continuances. Still, she failed to obtain counsel. Under these circumstances, the district court did not err in denying another continuance. It had already displayed admirable patience.

VI. RECUSAL

Following her conviction, Studley filed a motion for recusal alleging personal bias and prejudice against her. In her affidavit supporting the motion, she alleged that Judge Schwartz (1) knew that Internal Revenue Service (IRS) agents had perjured themselves, but did nothing; (2) had constantly deprived her of her "rights;" and (3) hated her without any cause. The district court denied the motion, and Studley objects. Denial of a motion for recusal is reviewed for an abuse of discretion. Mayes v. Leipziger, 729 F.2d 605, 607 (9th Cir. 1984).

We first note that a motion for recusal filed weeks after the conclusion of a trial is presumptively untimely absent a showing of good cause for its tardiness. See 28 U.S.C. §144 ; cf. United States v. Hurd [77-1 USTC ¶9155 ], 549 F.2d 118, 119 (9th Cir. 1977) (per curiam) (motion filed on fifth day of trial "much too late"). Even assuming timeliness, however, we find no merit in Studley's arguments on recusal.

The standard for recusal under 28 U.S.C. §§144 , 455 is "whether a reasonable person with knowledge of all the facts would conclude that the judge's impartiality might reasonably be questioned." Mayes, 729 F.2d at 607 (quoting United States v. Nelson, 718 F.2d 315, 321 (9th Cir. 1983)); Ronwin v. State Bar of Arizona, 686 F.2d 692, 700-01 (9th Cir. 1981), rev'd on other grounds sub nom. Hoover v. Ronwin, 466 U.S. 558 (1984). The alleged prejudice must result from an extrajudicial source; a judge's prior adverse ruling is not sufficient cause for recusal. Mayes, 729 F.2d at 607.

Studley's first two allegations are not extrajudicial because they involve the judge's performance while presiding over her case. See Ronwin, 686 F.2d at 701. Thus, these grounds do not provide a basis for recusal. The third allegation is too vague to meet the sufficiency requirement of Section 144 . See 28 U.S.C. §144 (party must file timely affidavit setting forth facts and reasons for the belief that bias or prejudice exists). Moreover, the allegation would not lead a reasonable person to conclude that Judge Schwartz's impartiality might reasonably be questioned.

Following her trial, Studley filed a lawsuit against Judge Schwartz and engaged in leafletting activities directed against him. She argues here that these actions caused him to be "poisoned" against her and were grounds for recusal. A judge is not disqualified by a litigant's suit or threatened suit against him, Ronwin, 686 F.2d at 701, or by a litigant's intemperate and scurrilous attacks, United States v. Grismore, 564 F.2d 929, 933 (10th Cir. 1977), cert. denied, 435 U.S. 954 (1978); In re Martin-Trigona, 573 F.Supp. 1237, 1243 (D. Conn. 1983), appeal dismissed, 770 F.2d 157 (2d Cir. 1985). Thus, the district court did not abuse its discretion by denying the motion for recusal. ⁵

Finally, we reject Studley's argument that the Chief Judge or a committee of disinterested judges from the District was required to rule on this recusal motion. We have held repeatedly that the challenged judge himself should rule on the legal sufficiency of a recusal motion in the first instance. E.g., United States v. Azhocar, 581 F.2d 735, 738 (9th Cir. 1978), cert. denied, 440 U.S. 907 (1979). Here, the motion was properly found legally insufficient.

VII. CRIMINAL SANCTIONS

Studley argues she has been illegally subjected to criminal prosecution for violation of 26 U.S.C. §7203 , which she contends is a civil statute. She contends that Congress has no authority to establish criminal sanctions for failure to file income tax returns; and even if Congress had the authority, Studley argues, it has not been exercised. Finally, she argues that the entire Internal Revenue Code was only temporarily enacted and is now invalid.

These arguments are frivolous. ⁶ Section 7203 provides, inter alia, that anyone who willfully fails to file a return "shall . . . be guilty of a misdemeanor . . . ." Thus, Section 7203 is a criminal statute, and Congress has exercised its power to enact such a statute. See United States v. Acker [69-2 USTC ¶9581 ], 415 F.2d 328, 329 (6th Cir. 1969), cert. denied, 396 U.S. 1003 (1970). The contention that Section 7203 is unconstitutional has been repeatedly rejected. E.g., Wheeler v. United States [84-2 USTC ¶9872 ], 744 F.2d 292, 293 (2d Cir. 1984) (per curiam) (citing cases). We have also held that the Internal Revenue Code was validly enacted by the Congress and is fully enforceable. See Ryan v. Bilby [85-2 USTC ¶9524 ], 764 F.2d 1325, 1328 (9th Cir. 1985).

VIII. EVIDENCE OBTAINED BY CIVIL PROCESS

Studley contends that her fifth amendment rights were violated by the government's use of evidence obtained by civil process. In 1982, the government petitioned for enforcement of an IRS summons directed at Studley's accountants. Studley states that the IRS sent her a Miranda letter at the time, and that IRS special agent Anderson admitted at her criminal trial that his investigation had always been criminal, rather than civil. Anderson also testified that no recommendation for criminal prosecution had been made at the time of the investigation.

Generally, the district court's decision to admit evidence is reviewed for an abuse of discretion. United States v. Ordonez, 737 F.2d 793, 811 (9th Cir. 1984). The court's findings of fact at a suppression hearing are reviewed for clear error. United States v. Snowadzki [84-1 USTC ¶9157 ], 723 F.2d 1427, 1429 (9th Cir.), cert. denied, 105 S. Ct. 140 (1984).

Studley's contention that the IRS acted illegally is without merit. The facts of this case are nearly identical to those in Couch v. United States [73-1 USTC ¶9159 ], 409 U.S. 322 (1973). In Couch, the IRS sought enforcement of a civil summons directing Couch's accountant to produce all documents pertinent to Couch's tax liability. Id. at 323. See also In re Grand Jury Proceedings (Manges), 745 F.2d 1250, 1252 (9th Cir. 1984). The Court stated that "a special agent is authorized . . . to issue an Internal Revenue summons in aid of a tax investigation with civil and possible criminal consequences . . . . 'Congress clearly has authorized the use of the summons in investigating what may prove to be criminal conduct.' " Id. at 326 (quoting Donaldson v. United States [71-1 USTC ¶9173 ], 400 U.S. 517, 535 (1971)) (emphasis added) (footnote omitted). The Court noted that under Donaldson the summons must be issued in good faith and prior to recommendation of criminal prosecution. Couch, 409 U.S. at 326 n.8.

Here, there is no allegation that the IRS acted in bad faith. Under Couch, it is irrelevant that Anderson sought the records for criminal investigation so long as a recommendation of prosecution had not been made.

Even if the evidence should have been suppressed, its admission was harmless beyond a reasonable doubt because the evidence was merely cumulative. See United States v. Lomas, 706 F.2d 886, 894 (9th Cir. 1983), cert. denied, 464 U.S. 1047 (1984). The evidence consisted of a record of payments made to Studley on a loan. The record was used to show Studley's income in 1978 and 1979. Ample other evidence was admitted to show that Studley's gross income was greater than the statutory minimum that triggers the requirement to file a return.

CONCLUSION

The conviction is AFFIRMED.

^** The panel finds this case appropriate for submission without argument pursuant to Fed. R. App. P. 34(a) and 9th Cir.R. 3(f).

¹ At trial, the government presented evidence that Studley had had gross income totaling about $144,000 for the three years.

² She also contends that her detention was illegal because she was incarcerated overnight before she was brought before a magistrate; she feels this was an unreasonable delay under Fed. R. Crim. P. 5(a). We need not reach this issue. Studley does not contend that evidence was seized incident to the arrest, that she was subjected to improper interrogation before arraignment or that she was otherwise prejudiced by the delay. Since the normal remedy for violation of Rule 5(a) is suppression of evidence obtained during the unreasonable delay, we need not decide whether Studley was in fact subjected to any delay that would constitute a Rule 5(a) violation. Cf. Morse v. United States , 256 F.2d 280 (5th Cir. 1958) (per curiam) (delay in taking an accused before a magistrate, though illegal, does not invalidate a conviction absent prejudice resulting from the detention).

³ We note that this argument has been consistently and thoroughly rejected by every branch of the government for decades. Indeed advancement of such utterly meritless argument is now the basis for serious sanctions imposed on civil litigants who raise them.

⁴ Since Studley was prosecuted by information, the reasons for her request regarding grand jurors is not immediately apparent.

⁵ We note that Judge Schwartz delayed sentencing two weeks to ensure that Studley's sentence would not be affected by any anger her actions may have engendered. Studley's sentence reflects the probation officer's recommendation and is less severe than the sentence requested by the government.

⁶ These claims have been considered many times before and have been rejected consistently. Thus, they would be grounds for sanctions if raised in a civil suit. See supra note 3.

 

 

[82-2 USTC ¶9690] United States of America , Appellee v. Albert E. Marks, Appellant

(CA-8), U. S. Court of Appeals, 8th Circuit, No. 82-1460, 691 F2d 428, 10/27/82

[Code Sec. 7203]

Crimes: Failure to file return: Appeal: Appeal without merit.--Upon a review of the entire record, there was ample evidence to uphold a taxpayer's conviction for willfully failing to file income tax returns, including the fact that he filed his federal income tax returns prior to the taxable years at issue. A jury had rejected the taxpayer's good faith misunderstanding defense, and found that he intentionally failed to file his tax returns.

Rob ert G. Ulrich, United States Attorney, Frederick O. Griffin, Jr., Assistant United States Attorney, Kansas City, Mo. 64106, for appellee. David F. Williams, 1031 E. Battlefield, Springfield , Mo. 65807 , for appellant.

Before HEANEY and Ross, Circuit Judges, and HENLEY, Senior Circuit Judge.

PER CURIAM:

Defendant Albert Marks appeals from his convictions for wilfully failing to file income tax returns in violation of 26 U. S. C. §7203. ¹ Marks was charged in a four-count indictment with failing to file his income tax returns for the tax years 1976, 1977, 1978, and 1979. The jury found the defendant guilty on all four counts, and the magistrate sentenced him to consecutive one-year terms of imprisonment for Counts I and II, and consecutive suspended one-year terms of imprisonment with two years of probation for Counts III and IV. Marks was also fined $1,000 on each of the last two counts.

At trial, Marks conceded that all elements of the charges against him were present except for the intent requirement. His primary defense in the court below was that he did not intentionally fail to file his income tax returns because he, in good faith, believed that wages were not subject to the income tax. The jury squarely faced this issue. The magistrate's instructions stated:

The specific intent of willfulness is an essential element of the offense of failure to file an income tax return.

* * *

[T]he defendant's conduct is not wilful if you find that he failed to file a return because of negligence, inadvertence, accident, or reckless disregard for the requirements of the law, or due to his good faith misunderstanding of the requirements of the law. (Emphasis added.)

The jury rejected Marks' good faith misunderstanding defense, and found that he intentionally failed to file his tax returns.

On appeal, Marks claims that there was not sufficient evidence to support the jury's verdict. ² Upon a review of the entire record, we must reject the defendant's claim. There is ample evidence, including the fact that Marks filed his federal income tax returns prior to 1976, to support the jury's verdict. See e.g., United States v. Karsky [80-1 USTC ¶9126], 610 F. 2d 548, 551 (8th Cir. 1979), cert. denied, 444 U. S. 1092 (1980).

Marks further contends that the court below committed various other reversible errors, including: (1) failing to give the specific instructions he requested concerning wages and wilfullness, (2) failing to give any instruction regarding his reputation for truthfulness and veracity, and (3) denying his motion for a mistrial after the government's closing argument. After carefully reviewing the record and briefs, and hearing oral argument, we find no merit in these contentions. Accordingly, we affirm the district court's judgment.

¹ The defendant received a jury trial in the United States District Court for the Western District of Missouri, Chief United States Magistrate Calvin Hamilton presiding. The defendant appealed his conviction to the district court, and the Honorable John Oliver, Senior United States District Court Judge, entered an order affirming the magistrate's judgment.

² Marks' first defense on appeal is that the district court lacked jurisdiction over his prosecution for violating 26 U. S. C. §7203. There is no merit to this claim. United States v. Spurgeon [82-1 USTC ¶9241], 671 F. 2d 1198, 1199 (8th Cir. 1982).

 

 

[74-2 USTC ¶9794] United States of America , Plaintiff-Appellee v. Michael Paterno, George Denti and Paterno and Sons, Inc., Defendants. Michael Paterno, Paterno & Sons, Inc., George Denti, Defendants-Appellants

(CA-2), U. S. Court of Appeals, 2nd Circuit, Nos. 74-1554, 74-1555, 74-1556, 7/18/74, Affirming District Court, 74-2 USTC ¶9793

[Code Sec. 7203]

Criminal penalties: Appeal without merit.--Taxpayers' convictions were upheld on appeal. The taxpayers did attempt to challenge the government's arguments but the court, noting the overwhelming evidence of guilt, found that point to be immaterial.

Paul J. Curran, United States Attorney, J. Lawrence Silverman, Special Attorney, Howard Wilson, S. Andrew Schaffer, Assistant United States Attorneys, New York, N. Y., for U. S. Sandor Frankel, Louis Bender, 225 Broadway, New York, N. Y., for G. Denti, Arthur Korger, 600 Madison Ave., New York, N. Y., for M. Paterno and Paterno & Sons, Inc., for defendants.

Present: William Hughes MULLIGAN , U. S. C. J., Harrison L. WINTER, U. S. C. J., Jon O. NEWMAN, U. S. D. J., Circuit Judges.

ON CONSIDERATION WHEREOF, it is now hereby ordered, adjudged, and decreed that the judgments of conviction of said District Court [74-2 USTC ¶9793] be and they hereby are affirmed. During argument of the appeal the Government made a comparison between the overage costs for engaging recognized truckers and those claimed to be fictitious. Counsel for Paterno moved orally after argument to submit responding papers. In view of the overwhelming evidence of guilt we do not consider the point material. The motion is denied.

 

 

[59-2 USTC ¶9784]John C. Barber, Appellant v. United States of America , Appellee

(CA-6), U. S. Court of Appeals, 6th Circuit, No. 13,653, 271 F2d 265, 11/4/59, Aff'g an unreported decision of the District Court

[1954 Code Sec. 7201]

Crimes: Income tax evasion: Frivolous appeal.--In view of oral arguments of counsel, the briefs, and the record on appeal, an appeal from a jury verdict convicting taxpayer of income tax evasion was held to be without merit and frivolous.

[1954 Code Sec. 7201]

Crimes: Income tax evasion: Analysis of testimony by expert witness: Impairment of jury's verdict.--Where nothing was done to impair the jury's freedom to exercise its judgment upon the worth and weight of testimony, it was not error to permit the Government's expert witness to identify and explain charts summarizing his testimony and that of others.

[1954 Code Sec. 7201]

Crimes: Income tax evasion: Identification of defendant.--On the evidence, the claim that the defendant was not sufficiently identified was without merit.

Clifford E. Enger, 9405 Brighton Way, Beverly Hills, Calif. (Leo W. Grant, Jr., Clinton, Tenn., with him on brief), for appellant. Fred Ellege, Jr., R. Hunter Cagle, United States Attorney, Nashville, Tenn., for appellee.

Before MARTIN, MILLER, and WEICK, Circuit Judges.

PER CURIAM:

The appeal in this case is from a jury verdict of guilty as charged in an indictment for unlawful income tax evasion and sentence pronounced thereon of fifteen months' imprisonment and $500 in fines.

After hearing the oral arguments of counsel and considering the briefs and the three-volume record in the case, we find no merit whatever in the appeal. Indeed, in the circumstances, the appeal could be classified as frivolous. The evidence adduced by the government was ample to support the verdict of guilty. See Ross, et al. v. United States , 197 F. (2d) 660, 664, 665 (C. A. 6), certiorari denied 344 U. S. 832; Gariepy v. United States, 220 F. (2d) 252, 258 (C. A. 6) [55-1 USTC ¶9267], certiorari denied 350 U. S. 825.

There is no point to the argument of appellant that the district court erred in permitting the expert witness, Leibowitz, to identify and explain charts summarizing his testimony and that of other witnesses. In United States v. Johnson, 319 U. S. 503, 519, [43-1 USTC ¶9470], the Supreme Court said: "* * * The worth of our jury system is constantly and properly extolled, but an argument such as that which we are rejecting tacitly assumes that juries are too stupid to see the drift of evidence. The jury in this case could not possibly have been misled into the notion that they must accept the calculations of the government expert any more than that they were bound by calculations made by the defense's expert based on the defendants' assumptions of the case. So long as proper guidance by a trial court leaves the jury free to exercise its untrammeled judgment upon the worth and weight of testimony, and nothing is done to impair its freedom to bring in its verdict and not someone else's we ought not to be too finicky or fearful in allowing some discretion to trial judges in the conduct of a trial and in the appropriate submission of evidence within the general framework of familiar exclusionary rules."

The argument that the defendant here was not sufficiently identified is, on the evidence in the case, completely without merit.

The verdict of the jury being abundantly supported by substantial evidence and there being found no prejudicial error in the record, the judgment of conviction and sentence is affirmed.