Appeal without
merit
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.