Assisting in Preparation of Fraudulent
Return
7203:
Willful Failure to File Return, Supply Information, or Pay Tax:
Sufficiency of Indictment or Information: Assisting in Preparation of
Fraudulent Return
[67-2
USTC ¶9521]
United States of America
, Plaintiff-Appellee v. Abraham Maius, Defendant-Appellant
(CA-6),
U. S. Court of Appeals, 6th Circuit, No. 16981, 378 F2d 716, 6/15/67,
Aff'g unreported District Court decision
[1954 Code Secs. 7201 and 7206]
Crimes: Tax evasion: Assisting in filing fraudulent corporate
returns: Prejudicial coercion by district court: Sufficiency of
evidence: Right to counsel warning.--The Court sustained the
defendant's conviction for willfully attempting to evade income taxes,
and for willfully and knowingly aiding and assisting in preparing
fraudulent income taxes of a corporation in which he held stock and
acted as manager. In sustaining this conviction, the Court held that the
district court did not use prejudicial coercion on the jury in forcing
it to find on three extra counts after it had indicated a finding on one
count. Moreover, the Court held that the evidence was sufficient to
support the jury's conclusion that the defendant was a party in a scheme
to conceal corporate income, which fact was the basis of the criminal
actions. The fact that the defendant did not sign or file the corporate
return was not material. The Court further held that Internal Revenue
Agents did not have to warn the defendant of his right to counsel, and
that statements made by the defendant were properly admissible as
evidence. The defendant was not under arrest or duress when he made the
statements in question.
Donald
A. Hansen, Mitchell Rogovin, Assistant Attorney General, Lee A. Jackson,
Richard B. Buhrman, Department of Justice, Washington, D. C. 20530,
Ernest W. Rivers, United States Attorney, Federal Bldg., Louisville,
Ky., for plaintiff-appellee. William J. Dammarell, 1304 Tri-State Bldg.,
Cincinnati
,
Ohio
, for defendant-appellant.
Before
CELEBREZZE and MCCREE, Circuit Judges, and MCALLISTER, Senior Circuit
Judge.
MCALLISTER,
Senior Circuit Judge:
The
Glen Corporation of Newport, Kentucky, operated a gambling place, as
well as the Glen Rendezvous and Tropicana, consisting of a hotel,
restaurant, bar and night club.
When,
in August 1962 and October 1963, Internal Revenue agents investigated
the income tax returns of the Glen Corporation, appellant Maius, who,
among other positions he held in the organization, was one of the
managers, explained to the agents the accounting procedures of the
corporation. He stated that he prepared a daily sheet, which was used by
one of the defendants in this case, Tito Carinci, in making entries in a
book, which he identified as the record of "casino net wins and
losses" for the years 1959 and 1960.
"Gambling
loss collection," as the phrase is used in this case, are
collections made by banks for the benefit of the Glen Corporation, on
checks given by gamblers in payment of their gambling losses. The
Government showed that these gambling loss collections paid by the bank
to the Glen Corporation amounted to $207,342.67 for 1959, and
$144,435.21 for 1960. However, the amount of these same collections was
set forth in the Glen Corporation's income tax returns as $73,900 for
1959, and $46,968 for 1960.
As
a result, the corporate income was understated on the income tax returns
by $133,442.67 for 1959, and by $97,467.21 for 1960.
The
additional tax due on the above unreported income was $69,309.14 for
1959, and $46,585.72 for 1960.
Appellant,
before being employed by the Glen Corporation, had considerable
experience as a restaurant manager. He was hired by the corporation to
manage the bar and the restaurant. He also helped to manage the company
and to do a large amount of its banking business. He was issued 415
shares of Glen Corporation stock on
March 4, 1959
, and this certificate was later canceled, and a new certificate was
issued to him for 115 shares.
As
a result of the investigation of the corporation by the Internal Revenue
Service, eight persons were indicted, including the appellant. On July
26, 1965, appellant and Tito Carinci were tried for willfully attempting
to evade income taxes of the Glen Corporation for the years 1959 and
1960, in violation of Section 7201 of the Internal Revenue Code of 1954,
and for willfully and knowingly aiding and assisting in preparing
fraudulent income tax returns of the Glen Corporation for the years 1959
and 1960 in violation of Section 7206(2) of the Internal Revenue Code of
1954. The jury found appellant guilty on four counts of the indictment
and he was thereafter sentenced to concurrent prison terms of three
years and fined a total of $15,000.
The
main issues as stated by appellant are: (1) Did the district court use
prejudicial coercion on the jury in forcing it to find on three extra
counts after it had indicated a finding on one count? (2) Was there
sufficient evidence to sustain the verdict? (3) Were statements which
appellant made to Internal Revenue agents properly admitted in evidence
when the agents, who had advised appellant of his rights under the Fifth
Amendment, did not inform him that he could have an attorney present
during the interviews?
The
first contention of appellant that the district court used prejudicial
coercion in forcing the jury to find on three counts after it had
indicated a finding on another count, is based upon the court's having
given a so-called Allen charge *
in the following language:
"Let
me say this to you, members of the jury. The chances are that without a
finding on these other counts that this defendant would have to be
retried on the counts upon which this jury has not yet agreed. Of
course, you realize that--the time required and the costs, not only to
the Government but to the parties, of a trial of this nature. You
realize further that these same facts substantially would have to be
given to another jury, another four days in a trial, perhaps more, would
result, and certainly the next jury that would consider this case is no
more able to determine it than you ladies and gentlemen are,
having--knowing that they will hear substantially the same evidence. And
certainly they would be no more intelligent than you ladies and
gentlemen are.
"Now,
it is true that, and the Court does not desire that any juror should
surrender his own conscientious convictions, but, on the other hand each
juror in order to perform his duty must perform it conscientiously and
honestly and, of course, according to the law and the evidence and,
although the verdict, and each verdict, to which a jury agrees must be
his own verdict and the results of his own convictions and not a mere
acquiescence in the conclusions of his fellow jurors, yet, as I told you
when you were first qualified as jurors, it's often difficult to bring
twelve minds to a unanimous result. And in order to do so, of course,
you are required and must examine the questions presented with candor,
and certainly with a proper regard and deference to the opinions of each
other.
"Now,
I--do you think there is an opportunity or a chance that you might be
able to reach a verdict on these other counts? I'd appreciate it very
much if you would undertake to consider them further and see whether or
not you can reach a verdict."
The
charge as given would be proper in an attempt to secure some kind of a
verdict as to innocence or guilt. Appellant says that the jury had
already reported its view as to innocence or guilt on one count--Count
4. But this is not the case. The jury rather stated that it had found on
Count 4, but that it was hopelessly deadlocked on Counts 2, 3, and 5. It
did not, however, state whether it had found appellant guilty or not
guilty on Count 4. If its verdict had been not guilty on Count 4, the
trial court was correct in stating that the case would have to be
retried on the other counts. Counts 2 and 3 charged at attempt to evade
and defeat income taxes. Counts 4 and 5 charged willfully and knowingly
aiding and assisting in preparing a false income tax return. We see no
violation of appellant's rights in the court's giving the so-called
Allen charge. This is not a refusal of the trial court to receive a
verdict on a lesser charge, and sending the jury back to attempt to
reach a verdict on a higher charge. There is no evidence that the court
applied pressure to increase a verdict which it had already agreed upon.
No specific finding or verdict had been announced by the jury--only a
statement by the jury of a finding, without a statement what that
finding was; and there was no knowledge on the part of the court or
anyone else--except the jury as to what the finding was. We find no
error in the charge of the trial court.
Appellant
contends that there was not sufficient evidence to sustain the verdict.
An examination of the record shows that there was evidence from which
the jury could find that appellant was involved in conduct to conceal
the actual receipt of the corporate income, and in accounting for it. As
mentioned, he did most of the banking business for the corporation. He
was the bookkeeper in respect to the customer checks, and maintained a
list of the checks taken to the bank for collection. He also kept track
of the collections and posted them on the records which were used in the
preparation of the corporate tax returns.
The
testimony further disclosed that appellant had examined the 1959 and
1960 income tax returns before they were filed. The fact that appellant
did not sign or file the tax returns is not material. There was
sufficient evidence to support the conclusion of the jury that appellant
was a party to the scheme of concealing the receipt of income and not
reporting it on the corporate records, and that his knowledge of the use
of such records in preparing the tax returns is sufficient, under all of
these circumstances, to sustain the charge that he willfully and
knowingly aided, assisted, and counseled in the preparation and
presentation to the Internal Revenue Service of the false returns.
With
regard to the contention that statements made by appellant to the
Internal Revenue agents were improperly admitted in evidence, when the
agent, who had advised him of his rights under the Fifth Amendment, did
not inform him that he could have an attorney present during the
interview, we find no error. Appellant was not under arrest or under
duress in the legal sense of the term when he made the statements in
question. A doubt may well assail us as to whether it is fair to a
citizen to be summoned before the Internal Revenue agents to be informed
that anything he says may be used against him, and then for the agents
of the Internal Revenue Service, personifying the authority and punitive
nature inherent in the law enforcement, to subject a man to questioning
and to extract possibly by threats, insinuations, or subtle forms of
suggestive coercion, the only evidence on which he can be sent to
prison, and to use this evidence to send him to prison. It would seem,
in all fairness, that before he answers such questions and thereby
directly incriminates himself, he should be advised of his right to have
his lawyer present. The Internal Revenue Service has lately been
subjected to widespread criticism, because of trickery of some of its
agents in unconstitutional invasion of a citizen's rights by the use of
tapped telephone wires, or "bugging"; and the Commissioner has
repudiated and castigated such conduct. No one would believe, however,
that a man would appear before government agents, and answer their
questions, if he knew that the effect of his answers would be to send
him straight to the penitentiary. But whether fair or not, no court has
held that a man who is not advised of his right to have his attorney
present when questioned by an Internal Revenue agent, is thereby
deprived of his constitutional rights. A citizen summoned before such
federal agents has the option to refuse to answer their questions; but
there are few who have the toughness of fibre and the technical
knowledge of their rights, who would decline to answer questions put to
them in these circumstances. Until we are told by superior authority
that a citizen's constitutional rights are imperiled by such procedure,
we are constrained to hold that the evidence thereby obtained is
admissible in the ensuing criminal trial.
In
accordance with the foregoing, the judgment of the district court is
affirmed.
*
Allen v.
United States
, 164
U. S.
492.
[53-2
USTC ¶9450]Lester E. Butzman, Sr., Appellant v. United States of
America, Appellee Gilbert M. Craig, Appellant v. United States of
America, Appellee
(CA-6),
In the United States Court of Appeals for the Sixth Circuit, Nos. 11704,
11705, 205 F2d 343, June 22, 1953
Appeals from the United States District Court for the Northern District
of Ohio, Eastern Division.
Penalties: Conviction on criminal charge: Adjudication on appeal of
alleged procedural errors.--The two appellants were found guilty in
the District Court and each received a prison sentence for falsely and
fraudulently executing an application for "tentative adjustment
with respect to amortization deduction", in which it was
represented that taxpayer was entitled to tax refunds. Although separate
indictments were returned, the appellants were represented by the same
attorney, and, upon motion of the Government, the cases were
consolidated for trial, which was without a jury. Errors assigned by the
defendants were disposed of as follows:
Validity of indictment.--Allegations in the indictment were
sufficient although facts upon which the charge was based were not set
forth in detail, especially in view of the fact that defendants went to
trial on the indictment without asking for a bill of particulars or
making a motion to dismiss the indictment. The indictment met the
requirements of alleging basic facts covering the essential elements of
the crime with enough particularity to apprise each defendant of the
nature of the charge and to enable him to protect himself from a
subsequent prosecution on the same charge. Furthermore, the indictment
did not fail to charge defendant with a crime, since he was charged with
falsely executing a particular type of document which contained
representations which were not true.
Sufficiency of evidence.--Under the circumstances of the case,
the District Judge was justified in finding that the Government
officials who passed upon the amortization application had the right to
rely upon representations therein without making an independent
investigation of Government records, and the evidence sustained his
finding that the application was executed and filed with intent to
defraud. Evidence was also sufficient to sustain the finding that the
second defendant aided, assisted, or counseled the preparation of the
document in question.
Determination of credibility of witnesses.--The credibility of
witnesses is a question for the trial judge, and hence there was no
reversible error in his conclusion that testimony of three Government
witnesses proved defendant had certain knowledge, notwithstanding the
latter's testimony to the contrary.
Denial of motion for charge of venue.--The District Court did not
err in refusal to sustain defendants' motion for a change of venue where
the motion alleged a fair and impartial trial could not be obtained in
the district in which the indictment was returned, trial by jury was
waived, and no complaint is made of failure to receive a fair and
impartial trial by the judge who tried the case.
Statute of limitations.--The statute of limitations on the
indictment started to run when the application for adjustment of tax
liability was filed, not at an earlier date when such document was
completed.
Right of co-defendant to separate counsel.--Where two defendants
are represented by the same counsel and a conflict of interest between
them develops, the aggrieved party is entitled, unless the right was
waived, to separate counsel of his own choosing. Such conflict here
arose over waiver of trial by jury. Ruling on the appeal of such
defendant is suspended for presentation of the issue to the trial court,
since the issue was raised for the first time on appeal.
Daniel
H. Wasserman, Cleveland, Ohio (Michael Leo Looney, Cleveland, Ohio, was
with him on the brief), for appellant Lester E. Butzman, St. Paul P.
Cohen, Niagara Falls, N. Y. (Cohen, Fleischmann, Augspurger, Henderson
& Campbell, Niagara Falls, N. Y., of counsel), for appellant Gilbert
M. Craig. Frank E. Steel,
Cleveland
,
Ohio
(John J. Kane, Jr.,
Cleveland
,
Ohio
, was with him on the brief), for appellee.
Before
SIMONS, Chief Judge, and ALLEN and MILLER, Circuit Judges.
MILLER,
Circuit Judge:
The
appellant, Lester E. Butzman, Sr., was found guilty in the District
Court had received a sentence of three years for falsely and
fraudulently executing a document required by the provisions of the
Internal Revenue laws, §3793(a)(1), Title 26, U. S. Code. Appellant,
Gilbert M. Craig, was also found guilty in the same trial and received a
sentence of one and one-half years for wilfully aiding and advising the
preparation and presentation to the Collector of Internal Revenue of a
false and fraudulent document executed by the appellant Butzman,
§3793(b)(1), Title 26, U. S. Code. Although separate indictments were
returned, the appellants were represented by the same attorney, and,
upon motion by the Government, the cases were consolidated for trial.
They were heard by the Court without a jury. The appeals come to us on a
single record. The appeals will be disposed of separately.
In
case No. 11704, the indictment charged that on January 14, 1946, Butzman
"did wilfully and knowingly, falsely and fraudulently, with intent
to defraud, execute a document required by the provisions of the
Internal Revenue laws and regulations, to-wit: Application for Tentative
Adjustment with Respect to Amortization Deduction, which document was
filed with the Collector of Internal Revenue . . ., in which document it
is represented that the said Lester E. Butzman, Sr., was entitled under
the provisions of the Internal Revenue laws to claim a credit for the
years 1941, 1942 and 1944 of refunds totaling $56,078.61, whereas as the
said defendant then and there well knew the information contained in the
application aforesaid was false and untrue, in that the Necessity
Certificates which formed the basis of the claim for the refund in said
Application had not been granted and the said defendant was not entitled
to the refund as claimed; . . ."
[Facts
as to First Defendant]
There
was evidence showing the following facts: The appellant started his
employment with the Ohio Tool Company in 1922 at which time the Company
was a partnership operating a small specialty machine shop. During the
1930s he became the sole owner of the business. The business underwent a
tremendous expansion in its operations after the start of the War in
1939. About the end of 1937, William J. Franz was employed to do the
accounting work for the company. In 1941, at the suggestion of Franz,
the business was made a family partnership consisting of the appellant,
his son Lester E. Butzman, Jr., and his daughter Betty Jane Downs.
On
October 8, 1940
, §124, Internal Revenue Code was enacted as part of the defense
mobilization program. It provided for an accelerated amortization
deduction of emergency facilities installed by the taxpayer, based on a
period of sixty months, upon an election by the taxpayer to do so, made
by filing a statement of such election with the Commissioner.
§124(d)(4), Internal Revenue Code. The procedure was for the taxpayer
to file an application with the War Department, upon which, after being
processed, a certificate would be issued certifying the facility as
necessary in the interest of national defense during the emergency
period. Such a certificate would entitle the applicant to write off the
cost of the facility over a five-year period. This was in lieu of the
deduction with respect to such facility provided by §23(l), Internal
Revenue Code, relating to exhaustion, wear and tear, and obsolescence.
Sometime in 1942, Franz discussed with appellant about making
application to take advantage of this amortization deduction, and
appellant gave Franz a power of attorney for the purpose of making such
applications. On
April 23, 1943
, an informal application was filed with the War Department, Tax
Amortization Branch, followed by a formal application dated
May 21, 1943
, in the amount of $853,840.78, which was given the number WD-N-22024.
Another application for the amount of $67,994.02 was also filed on
June 26, 1943
, which was given the number WD-N-23426.
On
September 11, 1943
, a preliminary notice of rejection was mailed to the Ohio Tool Company
which stated that application No. WD-N-22024 was untimely and that there
were adequate facilities in existence. This was followed by an official
letter of rejection mailed on
October 9, 1943
. Application No. WD-N-23426 was officially rejected by letter of
October 8, 1943
on the ground that there was insufficient evidence of shortage of
capacity in the industry. These letters, after being received by the
Company, were turned over to Franz.
Differences
arose between Butzman and Franz, and about
November 1, 1943
, appellant Craig was employed by the Company as Comtroller on a
full-time basis, for the purpose of taking over Franz's work and to
generally supervise the office. The Company's own accounting staff did
not take over the entire accounting work until the Spring of 1944. At
approximately that time Franz turned over to Craig the greater part, but
not all, of his files with respect to the Ohio Tool Company. One of the
files retained by Franz contained the letter of
October 9, 1943
from the War Department denying the Company's application WD-N-22024.
The other letter of rejection was not located, either in Franz's files
or the Company's files.
On
July 31, 1945
, Congress enacted the "Tax Adjustment Act of 1945" which
permitted war production facilities which became substantially worthless
at the close of the War to be amortized retroactively over the period
from 1940 to 1945. §7 of the Act, (§124(j) and (k), Internal Revenue
Code), provided for the filing of an application by a taxpayer who had
elected to take the amortization deduction under §124(d)(4) for
tentative adjustment with respect to the taxes for taxable years prior
to the taxable year in which the application was filed. In September,
1945, the President proclaimed the ending of the emergency period as
defined in §124(e)(2) of the Internal Revenue Code. Smith, an employee
in the Company's accounting department, having become advised of the Tax
Adjustment Act, recommended that applications be filed for adjustment of
the tax liabilities for 1941-1944 and for refunds payable pursuant to
such adjustments. He discussed the matter with Craig and with Internal
Revenue agent Coleman, who was working at the Ohio Tool Company plant.
On
December 20, 1945
, Craig wrote the Commissioner of Internal Revenue that the Ohio Tool
Company elected to amortize the Emergency Facilities covered by
Certificates of Necessity within the period covered by the President's
proclamation to
September 30, 1945
. This letter stated: "The following Certificates of Necessity are
affected: WD-N-22024, WD-N-23426." By letter of December 29, 1945,
the Commissioner acknowledged receipt of this election, advising that
the election did not constitute a claim for credit or refund, and that
if a tentative adjustment with respect to amortization deduction under
section 7 of the Tax Adjustment Act of 1945 was desired, application
should be filed with the Collector for its district on Form 1046, which
could be obtained from the Collector. Smith obtained the forms from the
local Internal Revenue office, and prepared and filed an application for
each of the three partners. Butzman's application, signed by him, was
filed with the Internal Revenue office by Smith on
January 14, 1946
. It is this application which is the basis of the present proceedings.
The
application specifically referred to Necessity Certificates Nos.
WD-N-22024 and WD-N-23426, the election by the Company on
December 20, 1945
to terminate the amortization period under the authority of the
President's Proclamation, and the termination of the amortization period
by reason thereof on
September 30, 1945
. It was supported by detailed amortization schedules and copies of
original income tax returns for 1941-1944 of both the partnership and
Butzman individually, together with recomputed tax returns for the
partnership and Butzman individually for the same years on the basis of
the accelerated amortization.
Internal
Revenue Agent Coleman was working at the plant of the Company in
connection with an audit of the returns of the partnership and its
members. Shortly prior to
May 3, 1946
, he asked Craig to show him Certificates of Necessity WD-N-22024 and
WD-N-23426. They were not located in the Company's files, and at a
conference on
May 3, 1947
, in Franz's office, Franz found in his files one of the two letters,
but not both, which denied the applications for the two Certificates of
Necessity. The Company's attorney, thinking that possibly a
reapplication had been made and approved, promptly thereafter wrote to
the Commissioner requesting certified copies of the two Certificates and
was advised by the Tax Amortization Branch, Civilian Production
Administration, by letter of July 1, 1946, that the files indicated that
the two applications were never approved but were denied by letters of
October 8th and 9th, 1943.
In
the meantime, the three partners received checks from the Treasurer of
the
United States
for refunds totaling approximately $109,000, dated June 11th and 13th,
1946. Smith checked the amounts, which totaled $1,000 more than they
were entitled to, and upon instructions from Craig refunded that amount
to the Government. The proceeds of the checks were deposited in the
account of the Ohio Tool Company. The Bureau made no demand for a return
of the money. The money was not repaid to the Government after the
partners were advised that the Certificates of Necessity had not been
issued, Craig taking the position that the partners were entitled to
refunds in accordance with general accounting principles of obsolescence
and amortization. Coleman made a report dated
August 2, 1946
, recommending that the application be reassessed, and that the
resulting taxes be assessed back to the taxpayer for each of the years
involved. At the time of the trial there had been no final determination
of what refund, if any, the partners were entitled to in accordance with
general accounting principles of obsolescence and amortization.
[Sufficiency
of Allegations in Indictment]
Appellant's
first contention is that the indictment is invalid because it charges
the appellant in general terms with having committed a crime, instead of
charging him with commission of specific acts which would constitute a
commission of the alleged crime. We recognize the general rule that an
indictment is insufficient if it states conclusions rather than the
facts upon which the conclusions are based. Johnson v.
United States
, 294 Fed. 753, 755, C. A. 9th; Boykin v.
United States
, 11 Fed. (2d) 484, 485, C. A. 5th; Alabama Packing Co. v.
United States
, 167 Fed. (2d) 179, 181-182, C. A. 5th. However, such facts need
not be stated in detail. Rule 7(c) of the Federal Rules of Criminal
Procedure provides "The indictment or the information shall be a
plain, concise and definite written statement of the essential facts
constituting the offense charged." An indictment is sufficient to
meet modern requirements if it alleges basic facts covering the
essential elements of the crime against the
United States
with enough particularity to fairly apprise the defendant of the nature
of the charge and to enable him to protect himself from a subsequent
prosecution for the same offense. Todorow v.
United States
, 173 Fed. (2d) 439, 446-447, C. A. 9th; Ross v.
United States
, 180 Fed. (2d) 160, 164, C. A. 6th. Appellant bases his contention
upon that part of the indictment which alleges that the document
represented that Butzman "was entitled under the provisions of the
Internal Revenue laws to claim a credit for the years 1941, 1942 and
1944 of refunds totaling $56,078.61," which he claims is a
representation of law. However, before that allegation is made the
indictment alleges, using the words of the statute, that the appellant
did on
January 14, 1946
, in the Eastern Division of the Northern District of Ohio, falsely
execute a document required by the provisions of the Internal Revenue
laws. This is an allegation of fact rather than a conclusion of guilt.
The remainder of the indictment gives additional facts which identify
the particular document referred to. Appellant did not make a motion to
dismiss the indictment, nor did he ask for a bill of particulars, but
went to trial on the indictment. In our opinion, the allegations are
sufficient. Leonard v.
United States
, 18 Fed. (2d) 208, 211-212, C. A. 6th; Koa Gora v.
Territory
of
Hawaii
, 152 Fed. (2d) 933, 935, C. A. 9th. Upon a proceeding after
judgment, no prejudice being shown, it is enough that the necessary
facts appear in any form or by fair consideration can be found within
the terms of the indictment. Hagner v.
United States
, 285
U. S.
427, 433; Gariepy v.
United States
, 189 Fed. (2d) 459, 461, C. A. 6th [51-1 USTC ¶9318]; Keys v.
United States, 126 Fed. (2d) 181, 185, C. A. 8th.
[Issue
as to Whether Indictment Made a Criminal Charge]
Of
a similar nature is the appellant's contention that the indictment does
not charge him with a crime in alleging that the appellant represented
that he was entitled under the provisions of the Internal Revenue laws
to a credit for the taxable years in question, in that such a
representation was not false, due to the fact that appellant was
actually entitled to a credit under the general accounting principles of
obsolescence and amortization provided by Sec. 23(l), Internal Revenue
Code. The charge in the indictment is not limited to such a
representation. It charges the appellant with falsely executing a
document described as an Application for Tentative Adjustment with
Respect to Amortization Deduction, which document represented, on the
basis of facts which the appellant knew to be untrue, that the appellant
was entitled to an income tax credit. The indictment must be considered
in its entirety. So considered, we are of the opinion that the
indictment does not charge him with falsely claiming a refund but
charges him with falsely executing a particular type of document which
contained facts which were not true. Appellant's argument on this point
fails to meet the issue.
[Evidence
as to Intent to Defraud]
Appellant
also contends that as a matter of law there was no intent on his part to
defraud the Government, because the Government knew through its own
files that the Certificates of Necessity had not been issued, and that
any representation by the appellant to the country was not calculated to
deceive, because it was made to the party who had actual knowledge of
its falsity. In order to defraud the Government, pecuniary loss to the
Government is not necessary. Any impairment of the
admin
istration of its governmental functions is sufficient.
United States
v. Goldsmith, 68 Fed. (2d) 5, 7, C. A. 2nd; Johnson v.
Warden, 134 Fed. (2d) 166, 167, C. A. 9th;
United States
v. Tynan, 6 Fed. (2d) 668, 669, S. D. N. Y. The commission of
the crime is not dependent upon the success of the fraudulent intent. Thacher
v.
United States
, Fed. case, No. 13851, affirmed, 103
U. S.
679. See
United States
v. Kapp, 302
U. S.
214, 217-218. Nevertheless, in the present case the Government acted
upon the misrepresentations, was actually deceived by them, and paid
money which it would not have paid except for such misrepresentations.
Under the circumstances of this case, we think that the District Judge
was justified in finding that the Government officials charged with the
duty of passing upon the Application, had the right to rely upon the
representations without making an independent investigation of
Government records, and that the evidence sustains his finding that the
Application was executed and filed with the intent to defraud. Buckley
v. Buckley, 230 Mich. 504, 509; Western Mfg. Co. v. Cotton &
Long, 126 Ky. 749, 755-757; Morrison v. Bank of Mount Hope,
(W. Va.) 20 S. E. (2nd) 790; Strand v. Griffith, 97 Fed. 854, C.
A. 8th.
[No
Reversible Error in Trial Judge's Judgment as to Credibility of
Witnesses]
Appellant
also contends that the evidence was insufficient to justify a finding of
guilt, in that it failed to show beyond a reasonable doubt that he had
knowledge that the Certificates of Necessity had not been issued. His
contention is that although the letters of rejection were received by
the Company, the matter was handled by Franz and the auditing
department, and such information was not brought to his attention.
Although three witnesses, Franz, Figley, who was an employee of Franz,
and Voos, a civilian employee in the Ordnance Department at
Cleveland
, testified that appellant knew that the Certificates of Necessity had
not been issued, appellant claims that these witnesses were biased and
prejudiced, and that the Court should have accepted his own testimony to
the contrary. The trial judge, in his oral opinion, discussed the
credibility of these witnesses at considerable length, and concluded
that there was sufficient credible testimony from them to prove
knowledge on the part of the appellant. It is well settled that the
credibility of witnesses is a question for the trial judge. Goldman
v. United States, 245 U. S. 474, 477; Hawk v. Olson, 326 U.
S. 271, 279; Wilson v. United States, 149 Fed. (2d) 780, 782, C.
A. 6th.
[Issue
of Change of Venue Waived by Election to Be Tried by the Court]
Appellant
contends that the Court erred in overruling his motion for a change of
venue. The motion was based upon several news articles and a cartoon
appearing in different editions of the Cleveland Press, which depicted
appellant as a war profiteer and a tax dodger, and as one, who although
having gone through bankruptcy, was nevertheless able to own a big
Florida
ranch on which he lived in ease and comfort. The motion claimed that the
publication of these articles had created so great a prejudice against
the appellant that he could not obtain a fair and impartial trial in the
district where the indictment was returned. The District Judge was of
the opinion that the circulation of the Cleveland Press was largely
restricted to
Cuyahoga
County
, in which
County
Cleveland
is located, and pointed out that 28 of the 52 prospective jurors were
from outside
Cuyahoga
County
. Being of the opinion that a fair and impartial jury could be obtained
from jurors who had not read the articles in question, he overruled the
motion. No jurors were questioned. Appellant thereafter waived a trial
by jury. He now contends that this was not a voluntary waiver on his
part, in that he was forced to do so by the trial court's refusal to
sustain his motion for a change of venue. The argument is unsound. A
different question would be presented if appellant had carried through
with his motion, interrogated the prospective jurors, and shown that a
fair and impartial jury could not have been obtained. From the facts
disclosed by the present record, it seems entirely possible that such a
jury could have been impaneled. Under the circumstances, it was not an
abuse of the trial court's discretion in overruling the motion.
United States
v. Beadon, 49 Fed. (2d) 164, 166, C. A. 2nd, cert. denied, 284
U. S.
625; Kersten v. United States, 161 Fed. (2d) 337, 339, C. A.
10th, cert. denied, 331
U. S.
851. In any event, the question was waived by appellant's election to be
tried by the Court. No complaint is made that he failed to receive a
fair and impartial trial by the District Judge who tried the case. The
way to have preserved the alleged error was to have proceeded with a
trial by jury under protest and let the record show whether the jury as
so impaneled provided the appellant with the fair and impartial trial to
which he was entitled. Jones v. Williamsburg City Fire Inc. Co. (
Kansas
), 116 Pac. 484; Grogan-Cochran Lumber Co. v. McWhorter (
Texas
Civil Appeals), 15 S. W. (2d) 126. In electing to pursue the course
which he took, appellant was attempting to obtain whatever advantage
might result from the trial without a jury, and if unsuccessful still
maintain that the result was not binding upon him. Under such
circumstances, the election is clearly binding upon the appellant.
Compare Metcalf v.
United States
, 195 Fed. (2d) 213, 217, C. A. 6th; Marx v.
United States
, 86 Fed. (2d) 245, 251, C. A. 8th; Hagner v.
United States
, 54 Fed. (2d) 446, 449, C. A. D. C.; Levine v.
United States
, 182 Fed. (2d) 556, 558, C. A. 8th.
The
appellant Craig, in addition to advancing the same arguments on his own
behalf as were advanced by Butzman in his appeal, contends that the
evidence was insufficient to show that he participated in the
preparation or filing of the document on which the indictment was based,
that the six-year statute of limitations barred the proceeding against
him, and that he was deprived of the "assistance of counsel"
guaranteed by the Sixth Amendment of the Constitution.
[Evidence
Sufficient to Establish Second Defendant as Party to False Document]
As
shown by the foregoing statement of facts, appellant Craig wrote and
signed the letter of
December 20, 1945
in which he notified the Commissioner of the Company's election to
amortize the Emergency Facilities covered by the two Certificates of
Necessity. Although the Application itself was prepared by his
assistant, Smith, signed by Butzman, and filed by Smith, the evidence
shows that Smith conferred with Craig about making the Application
before this letter was written. In our opinion, this evidence was
sufficient to sustain a finding that Craig aided, assisted or counseled
the preparation of the document in question.
[Statute
of Limitations Did Not Start Until False Document Was Filed]
Appellant
Craig's reliance upon the Statute of Limitations is based on a
computation of time starting with the completion of the Application and
appendices on or about December 31, 1945, which was more than six years
prior to the date of the indictment, January 10, 1952. However, if the
time began to run with the filing of the Application fourteen days later
on
January 14, 1946
, the indictment was not barred by limitations. No crime was committed
by Butzman until the Application was filed. No crime would have been
committed by Craig if the Application had not been filed. We are of the
opinion that the statute did not start to run until the Application was
filed on
January 14, 1946
.
[Issue
as to Second Defendant's Right of Representation by Separate Counsel
Matter for Trial Court Decision]
The
attorney who represented appellant Butzman was the regularly employed
attorney of the Ohio Tool Company. He also undertook to represent the
appellant Craig. Craig contends that although no conflict of interest
might have shown itself when this dual representation was undertaken, a
review of the record as a whole shows that such a conflict developed.
Reference is made to the fact that
