Bail
7203: Willful
Failure to File Return, Supply Information, or Pay Tax: Bail
[61-2
USTC ¶9739]
United States of America
, Appellee, v. Grant Foster, Appellant Grant Foster, Petitioner v. The
Honorable Roszel C. Thomsen, United States District Judge, and the
United States District Court for the District of Maryland, Respondents
(CA-4),
U. S. Court of Appeals, 4th Circuit, Nos. 8378, 8460, 296 F2d 249,
10/25/61, Affirming unreported District Court decision, dismissing
appeal from interlocutory order, and denying petition for mandamus
[1954 Code Sec. 7201]
Tax evasion: Reduction of bail: Mandamus for change of venue: Right
of appeal.--Where taxes of $300,000 were involved in an indictment
for tax evasion, bail of $200,000 was not excessive and a motion to
reduce it was properly refused as the defendant did not show any
hardship. Petition for mandamus to require a change of venue from one
district court to another was denied because it was merely an attempt to
substitute another remedy for an appeal from the district court's
interlocutory order (not appealable) denying the venue change.
Harold
L. Ward, Walter Humkey (Sherwin P. Simmons, Fowler, White, Gillen,
Humkey & Trenam, on brief), for appellant, petitioner. Joseph D.
Tydings, 301 Davison Chemical Bldg., Charles and Fayette Sts., Baltimore
1, Md. (Arnold M. Weiner, Assistant United States Attorney, on brief),
for appellee, respondents.
Before
SOBELOFF, Chief Judge, and BOREMAN and BRYAN, Circuit Judges.
PER
CURIAM:
Immediately
after his arrest in
Miami
,
Florida
, on February 4, 1961, Grant Foster, an American citizen residing in
Panama
, posted a cash bail bond in the amount of $200,000.00. The bond was
conditioned upon his appearance to answer an indictment filed in the
United States District Court for the District of Maryland, for violation
of the Internal Revenue laws. 1 No objection
to the amount of bail was made until April 21, 1961, when a petition was
filed in the United States District Court for
Maryland
for a reduction. Seven days later, when the defendant was arraigned, the
court held a hearing on the petition. Extensive arguments were made by
counsel for the defendant as well as for the Government. The defendant
was present in the courtroom, but no tender of any evidence was made on
behalf of the defendant to show hardship or any facts bearing on the
financial condition of the defendant. It was the Government's contention
that the defendant, a resident of
Panama
, was the principal owner--it claimed he was in fact the sole owner--of
a corporation which was engaged in road building in
Central America
. The corporation had in a bid for work represented itself to be worth
$4,500,000.00 The Government further showed, and there was no
substantial issue as to this, that the defendant had no close ties in
the
United States
, and that the amount of taxes involved in the indictment exceeded
$300,000.00. Apparently, while the defendant made occasional visits to
the
United States
, he had no regular schedule for his visits and no place of business in
this country.
The
appeal here is from the District Court's refusal to reduce the amount of
the bail. We find in these circumstances no basis for holding that the
bond as originally fixed, was excessive, or that the District Judge
abused his discretion in later refusing to reduce it.
Before
us, even though requested by the court, the defendant still failed to
show any factual basis for his charge of hardship in the amount of bail.
Asked to explain why he failed for a period of nine months to apply to
this court or to any judge thereof for lower bail, counsel for the
defendant replied that since the bail question is concededly appealable,
he preferred to reserve it as a vehicle to bring before this court for
review at the same time other issues, such as were raised in his motions
attacking the indictment as insufficient and barred by limitations and
seeking transfer of the case to the Southern District of Florida. These
issues are interlocutory in character and normally are not the subject
of appeal before final judgment.
In
addition to the appeal on the bail question, which is properly before
us, the defendant filed a Petition for Writ of Prohibition or Mandamus
to require the District Judge to order the transfer of the trial of the
criminal case to the Southern District of Florida. The defendant's
contention is that the motion for such transfer should have been granted
under Rule 21(b) of the Federal Rules of Criminal Procedure, or, in the
alternative, under 18 U. S. C. A. §3228.
By
this strategy the defendant seeks to substitute another remedy for
appeal, and to achieve an immediate review of inter-locutory orders
without awaiting final judgments as is required for an appel. We are of
the opinion, however, that the defendant may not maintain such a
petition but must first stand trial, and may later renew his contentions
in the course of an appeal to this court in the event of his conviction.
At
this term of court we had occasion to say:
"Mandamus
may not ordinarily be resorted to as a mode of review when a statutory
method has been prescribed. The writ may not be used as a substitute for
an appeal, and it may not be used as a means for obtaining review of an
order of the trial court which is not appealable because it does not
constitute a final determination of the case." Bartsch v.
Clarke, No. 8456, decided by this court October 12, 1961, . . . F.
2d . . ..
The
order as to bail is affirmed; the appeal from the interlocutory order is
dismissed, and the petition for prohibition or mandamus is denied.
1
Court one of the indictment charged that the adjusted gross income of
Foster and his wife for 1952 was $304,291.42, on which a tax of
$230,959.47 was due, whereas their tax return showed an income of only
$3,175.46 with $102.00 due in taxes. Count two charged that their
adjusted joint income for 1953 was $104,337.29 with a tax of $58,459.48
due, whereas their return showed an adjusted gross income of only
$3,331.91 with a tax of $132.00. Count three charged that Foster a gross
income during 1955 of $22,579.28, and count four charged that his gross
income for 1956 was $9,570.80, for which two years Foster failed to file
any tax return. Thus, for the years in question, Foster is charged with
an adjusted gross income of $440,778.79 on which there was due a tax
well in excess of $289,418.95. He has shown for the entire period only
$6,507.37 income, and $234.00 as taxes due.
[57-1
USTC ¶9483]Frank Costello v.
United States of America
Supreme
Court of the
United States
, No. 666, 352
US
1028, 77 SCt 642, 3/11/57
On writ of certiorari to the United States Court of Appeals for the
Second Circuit.
[1939 Code Secs. 145(b) and 3616(a)--similar to 1954 Code Secs. 7201 and
7207]
Criminal tax evasion: Applicable Code Section: Bail pending decision
in a similar case.--Petitioner was found guilty of tax evasion under
1939 Code Sec. 145(b) and was sentenced under that section. He contends
that he should have been sentenced under 1939 Code Sec. 3616(a), which
would make his offense a misdemeanor punishable by a lighter maximum
sentence. Because the Supreme Court has granted certiorari in Achilli
v. U. S., 56-2 USTC ¶9638, involving the same issue it holds that
petitioner is entitled to bail, the Government having presented no
adequate reason why bail should not be granted. Bond is required in the
sum of $25,000.
Edward
B. Williams, 1000 Hill Bldg., Washington, D. C., and Morris Shilensky
and Osmond K. Fraenkel, 120 Broadway, New York, N. Y., for petitioner,
J. Lee Rankin, Solicitor General, and Charles K. Rice, Assistant
Attorney General, Washington, D. C., for respondent.
PER
CURIAM:
Petitioners
in both the above cases have applied to individual Justices for bail
under Rule 46 of the Federal Rules of Criminal Procedure. The relevant
circumstances concerning bail are identical in both cases. Both were
convicted of income tax evasion involving §145(b) of the Internal
Revenue Code of 1939. Both were sentenced to imprisonment for five years
on each of three counts, the sentences to run concurrently. Both contend
that they should have been sentenced under §3616(a) of the Internal
Revenue Code of 1939, which makes it a misdemeanor (punishable by a
maximum of one year's imprisonment) to file a false return with intent
to evade tax, the offense for which each was convicted. The question
petitioners raise was discussed but not decided in Berra v. United
States, 351 U. S. 131 [56-1 USTC ¶9480]. This question is presented
in Achilli v. United States, No. 430, which the Court has set for
hearing during the week of April 29. Pending final determination of this
question, we think petitioners are entitled to bail, the Government
having presented no adequate reason why bail should not be granted.
Accordingly, petitioners are admitted to bail, pending the disposition
of the Achilli case, by executing a good and sufficient bail bond
in the sum of $25,000, the same to be approved by a district judge of
the court in which petitioners were convicted. Following approval, the
bond will be posted with the clerk of the district court.
[55-1
USTC ¶9230]J. A. Herzog, Appellant v.
United States
, Appellee
In
the Supreme Court of the
United States
, No. --, October Term, 1954, 75 SCt 349, February 11, 1955
Application for admission to bail pending determination of appeal in the
United States Circuit Court of Appeals for the Ninth Circuit.
[1939 Code Sec. 145(a)--similar to 1954 Code Sec. 7201]
Criminal prosecution: Bail pending appeal: "A substantial
question."--Application for bail following judgment of
conviction for income tax evasion was denied by the District Court and
also by the Court of Appeals. It was granted by the Supreme Court on the
ground that the case involved "a substantial question which should
be determined by the appellate court." Whether the grand jury
minutes could be inspected for the purpose of impeaching a witness who
had testified before it presents such "a substantial
question."
Sol
A. Herzog (now deceased), 70 Pine St., New York 5, N. Y., James M.
McInerney, 1317 F. St., N. W., Washington, D. C., and Spurgeon Avakian,
Financial Center Bldg., Oakland 12, Calif., for appellant. Philip Elman,
Special Assistant to the Attorney General, Department of Justice,
Washington 25, D. C., for appellee.
DOUGLAS,
Circuit Justice:
This
is an application for bail after judgment of conviction for federal
income tax evasion that led to a sentence of one year in prison and a
fine of $5,000. The District Court denied bail. After oral argument, a
panel of three members of the Court of Appeals also denied bail. This
application was then made to me as Circuit Justice, a procedure
authorized by Rule 46(a)(2) of the Rules of Criminal Procedure, which
provides:
"Bail
may be allowed pending appeal or certiorari only if it appears that the
case involves a substantial question which should be determined by the
appellate court. Bail may be allowed by the trial judge or by the
appellate court or by any judge thereof or by the circuit justice. The
court or the judge or justice allowing bail may at any time revoke the
order admitting the defendant to bail."
The
problem presented by this application is a difficult and recurring one.
After the District Judge, who has tried the case, and the Court of
Appeals, which will hear the case on the merits, both deny bail, the
Circuit Justice should be most reluctant to grant such relief. The
reason is not only the great deference owed their judgment but also the
knowledge that those judges, being closer to the actual arena of the
trial and its environment, are more apt than he to have a sense of what
the scales of justice indicate in the particular case. Yet a
responsibility rests on the Circuit Justice which cannot in good
conscience be delegated to others. And if, after giving that deference
to his Brethren below which is deserved, there are still doubts, he
alone must resolve them.
["A
Substantial Question"]
I
heard oral argument in this case. There was no suggestion whatever that
this applicant should be confined lest he escape or not respond to the
judgment entered on appeal. The Court of Appeals has, indeed, granted a
stay of execution to continue for seven days after I have ruled on this
application. Hence, the only question presented to me is whether
Herzog's case "involves a substantial question which should be
determined by the appellate court" within the meaning of Rule
46(a)(2).
The
construction of the words "substantial question" is itself a
substantial question. It obviously does not mean a decision on the
merits, for Rule 46(a)(2) defines the question as one "which should
be determined" on appeal.
A
question might seem "substantial" to one person and not to
another. My years of experience on the Supreme Court with petitions for
certiorari is enlightening in this regard. The practice is to grant
those petitions on a vote of four Justices. Those who vote to deny the
petition, either because they think the decision below was right or that
the petition presents nothing substantial, often vote to reverse after
oral argument. Further study of a problem often changes a vote. Further
study may do more; it may indeed change the views of the majority of a
court. It has happened over and again in the Supreme Court; and I am
confident it also happens in other courts.
Only
the other day, bail was denied in Patterson v. United States, 75
S. Ct. 256, by the District Court, by the Court of Appeals, and by the
Circuit Justice. The appeal, however, was expedited lest the right of
appeal be lost while the appellant was serving his short sentence. When
the Court of Appeals reached the merits, it reversed.
United States
v. Patterson, 23 L. W. 2381.
[Criteria]
When,
therefore, the issue is whether a "substantial question" is
presented within the meaning of Rule 46(a)(2), the first consideration
is the soundness of the errors alleged. Are they, or any of then, likely
to command the respect of the appellate judges? It is not enough that I
am unimpressed. I must decide whether there is a school of thought, a
philosophical view, a technical argument, an analogy, an appeal to
precedent or to reason commanding respect that might possibly prevail.
If the question were one presented by a petition for certiorari to this
Court and I were asked to grant a stay, I would grant it despite my own
convictions on the merits, once I felt that any of my Brethren would be
impressed with the argument. Though there were only one likely
protagonist of that view on the Court, I would feel that the question
should be saved for decision by the entire bench. The fact that one
judge would be likely to see merit in the contention is likewise enough
to indicate its substantiality for the purpose of Rule 46(a)(2). There
is room for argument on many rules of law and on most of their
applications. The shadow of a doubt across one's own conclusions is
itself sufficient, at least where bail is involved. Bail is basic to our
system of law. See the Eighth Amendment; Stack v. Boyle, 342 U.
S. 1. Doubts whether it should be granted or denied should always be
resolved in favor of the defendant. See the opinion of Mr. Justice
Butler, as Circuit Justice, in United States v. Motlow, 10 Fed.
(2d) 657, 663.
I
do not believe, however, that there is necessarily an end to the problem
under Rule 46(a)(2), even though I reach the conclusion that on the
merits there is no appellate judge who would likely reverse the judgment
of conviction. That does not necessarily mean that there is no
substantial issue which "should be determined by the appellate
court." A question may nevertheless be "substantial"
within the meaning of the Rule, if it is novel, or if there is a
contrariety of views concerning it in the several circuits, or if the
appellate court should give directors to its district judges on the
question, or if in the interests of the
admin
istration of justice some clarification of an existing rule should be
made.
In
the present case, appellant's brief on the merits, recently filed in the
Court of Appeals, is a printed document of 63 pages. I have read it with
care and have examined portions of the record to which it refers. There
is nothing apparent in the brief indicating any flagrant miscarriage of
justice, though interesting points of law are presented. There is,
however, one question of law that seems to me to present a
"substantial question" within the meaning of Rule 46(a)(2).
[Grand
Jury Minutes]
The
question relates to the use of the grand jury minutes for impeachment
purposes. A critical witness was on the stand for cross-examination.
Counsel for defendant wanted to inspect the witness' testimony before
the grand jury in order to impeach him. He request was denied. *
Rule
6(e) of the Rules of Criminal Procedure provides in part:
"Disclosure
of matters occurring before the grand jury other than its deliberations
and the vote of any juror may be made to the attorneys for the
government for use in the performance of their duties. Otherwise a
juror, attorney, interpreter or stenographer may disclose matters
occurring before the grand jury only when so directed by the court
preliminary to or in connection with a judicial proceeding . . ..
No obligation of secrecy may be imposed upon any person except in
accordance with this rule." (Italics added.)
There
has been a conflict between the policy requiring secrecy of grand jury
minutes and the policy which seeks to leave no stone unturned in seeking
justice in a particular case. See In re Bullock, 103 Fed. Supp.
639. Rule 6(e) has partially resolved that conflict by allowing
disclosure of the grand jury minutes "in connection with a judicial
proceeding."
The
Court of Appeals for the Ninth Circuit does not seem to have ruled on
the question presented here beyond the statements in Metzler v.
United States, 64 Fed. (2d) 203, 206, that the veil of secrecy can
be lifted from the grand jury minutes when "the ends of justice can
be furthered thereby." But that case was decided prior to Rule 6(e)
and I have found no subsequent Ninth Circuit case squarely in point
here. Cf. United States v. Smyth, 104 Fed. Supp. 279, 281.
[Alper
in Point]
United
States v. Alper, 156 Fed. (2d)
222, 226, decided by the Court of Appeals for the Second Circuit, is,
however, in point. While a witness was being cross-examined, his
testimony before the grand jury was requested by the defendant to see
whether there were inconsistencies between it and the trial testimony.
The trial judge refused the request. The Court of Appeals reversed on
another ground. Yet in referring to the right of counsel on
cross-examination to inspect the grand jury minutes to ascertain whether
the witness testified differently at that time, the court said:
".
. . as the same question may arise on the new trial it seems desirable
to refer to some of the matters which the judge should take into account
in exercising his discretion. These will include the timeliness of the
request for the minutes, the delay in the trial which may result, and
the extent of the burden which will be imposed upon the judge by a
comparison of the witness's grand jury testimony with his trial
testimony. If the witness's grand jury testimony is very lengthy, it
would be an intolerable burden and would unduly delay the trial to
require the judge to go through it on the mere chance that some
inconsistency favorable to the accused might be found. The trial of an
indictment is of course an inquiry into the truth of the charge; but in
such trial the judge must be as little an advocate of the accused as of
the prosecution. When the testimony before the grand jury is in small
enough compass to make any contradictions between it and the witness's
trial testimony readily discoverable it is a tolerable duty to impose
upon the judge an examination of the minutes. But to demand that he
peruse many pages of an examination of a witness to discover possible
contradictions is altogether to falsify his position; for then he
becomes in effect an active assistant of the defense. He would have to
bear in mind all that the witness had sworn to, and pick out from a mass
of what may be, and usually is, verbiage any parts that may be
contradictory. That involves an active participation favorable to one
side, which should not be required. A great part of the law of evidence
is based upon the practical difficulties that would incidentally arise
from the admission of what, strictly speaking, is logically relevant; it
is founded upon the recognition that here, as elsewhere in the law, we
are seeking not logical perfection but the just settlement of a
controversy. The duty we are discussing is preeminently in this class
and it is particularly one about which it would be unsafe to
generalize."
It
is obvious that, whatever the ultimate outcome, under that ruling
Herzog's request for inspection of the grand jury minutes would have
been treated differently in New York than it was in California. Which is
the better way of handling the matter, or whether there is still another
which is to be preferred, is a considerable question in the
admin
istration of justice.
I
express no opinion on the merits. I only conclude that the question is a
"substantial" one "which should be determined" by
the Court of Appeals, within the meaning of Rule 46(a)(2).
I
will accordingly admit Herzog to bail in the amount of $5,000, to be
posted with and approved by the District Court.
*
The record shows the following transpired:
"Mr.
Avakian: I believe that . . . any testimony of a witness previously
given relating to the subject matter at hand should be made available to
the defense.
"And
I think that is particularly appropriate here. It appears to be that in
one other instance previously given testimony appears to be somewhat
different from the testimony given here, and that is the reason--
"The
Court: You are arguing now about a fact. If that is your reason, I can't
agree. I can't agree, as a judge, that there is a basis for that
statement.
"Mr.
Avakian: The purpose of my request is for impeachment, your Honor.
"The
Court: Yes, but the Grand Jury proceedings are not open in the federal
court, not unless there is some ground for them that would vary the
rule. I never heard of such a thing, not in the federal court.
"I
know that in the state court, of course, the Grand Jury testimony can be
used, but that is not true in federal court. No more than a fishing
expedition. And I don't say that with any degree of criticism applicable
to this case, but generally that is all it would amount to in any case
unless there was some ground of fraud or misconduct on the part of the
Grand Jury, or something like that.
"Mr.
Avakian: It isn't attacking the validity of the Grand Jury proceedings,
your Honor, but is for impeachment purposes.
"The
Court: You have to make some showing that it would be impeaching,
otherwise it is a fishing expedition and would delay every criminal
proceeding in federal court. Never would have an end to these
proceedings.
"Mr.
Avakian: I don't believe it would take more than ten or fifteen minutes
for us to read the testimony.
"The
Court: Well, I will deny the application."
[79-2
USTC ¶9433]United States of America, Plaintiff v. Terrence J. Karmann,
Defendant
U.
S. District Court Cen. Dist. Calif., No. CR 79-43-AAH, 471 FSupp 1021,
6/8/79
[Code Secs. 7203 and 7205]
Bail pending appeal: Order denying release: Menace to society.--The
taxpayer was denied bail pending appeal. He was convicted of failure to
file returns for several years and for filing false W4-E certificates.
The taxpayer was denied bail because the court determined that he was a
menace and a danger to himself and to society, and would set a bad
example for other taxpayers.
Andrea
Sheridan Ordin, United States Attorney,
Rob
ert L. Brosio, Eric L. Dobberteen, Assistant United States Attorneys,
Los Angeles, Calif. 90012, for plaintiff.
Findings
of Fact, Conclusions of Law and Order Re Denial of Release Pending
Appeal
HAUK,
District Judge:
The
defendant, in propria persona, having made an appropriate application
for release after a judgment of conviction, and the Court having refused
to release the defendant pending appeal, the Court now states in writing
the reasons for this action in accordance with Rule 9(c) Federal Rules
of Appellate Procedure. These findings of fact and conclusions of law
are based on the records and files of this case, and the pleadings
herein, including the facts of this case, and oral argument at the time
of sentencing. The Court makes the following Findings of Fact and
Conclusions of Law:
Findings
of Fact
I.
The defendant has engaged in a consistent and continuing course of
conduct, deliberately, intelligently, and without equivocation, in
defiance of the laws constitutionally enacted by the Congress of the
United States, to wit, the Internal Revenue Code, as amended to date, 26
U. S. C. §1, et seq. In this regard, the defendant has been
convicted by a jury of two violations of 26 U. S. C. §7203 and one
violation of 26 U. S. C. §7205.
II.
The defendant has deliberately, intelligently, and knowingly engaged in
the filing of false W4(E) certificates, not only those with which he was
charged and convicted in Count Two of the Indictment, but also, in the
opinion of this Court, for the calendar years 1978 and 1979 in that he
submitted false information to his employer, the Times Mirror Company in
Los Angeles, wherein he certified and has certified each time that he
incurred no federal tax liability for the preceding calendar year and
that he anticipated incurring no federal income tax liability for the
following year covering the taxable year 1976 and the following year
1977; the taxable year 1977 and the following year 1978; the taxable
year 1978, and the following year 1979; whereas he then and there well
knew that he had incurred federal income tax liability for the year
1976, and he anticipated a federal tax liability for 1977; further, that
he then and there well knew that he had incurred a federal income tax
liability in 1977 and he anticipated a federal income tax liability for
1978; and finally that he then and there well knew that he had incurred
a federal income tax liability in 1978 and he anticipated a federal
income tax liability for 1979.
III.
During the calendar year 1976 he earned a gross income of $14,915.01 and
was required by law to report such income and any deductions or credits
to which he was entitled, following the close of the calendar year 1976
and before April 15, 1977. Nevertheless he willfully and knowingly
failed to do so.
IV.
During the calendar year 1977, he received a gross income of $14,754.29
and by reason thereof, he was required by law following the close of the
calendar year 1977 and before April 15, 1978, to make an income tax
return setting forth these items of gross income and any deductions or
credits to which he was entitled. Well knowing these facts he did
willfully and knowingly fail to make such return.
V.
For the calendar year 1978, based upon the defendant's own statement to
the Court at a pretrial hearing on March 5, 1979, the Court finds that
he had a gross income of at least $14,000 for the calendar year 1978 and
was required on or before April 15, 1979, to make an income tax return
to the appropriate officials; well knowing all these facts, he did
willfully and knowingly fail to make such income tax return as required
by the law.
VI.
Any conclusion of law deemed to be a finding of fact is hereby
incorporated into these findings of fact.
Conclusions
of Law
I.
The subject matter of this action is controlled by Title 18, Rule 9(c),
Federal Rules of Appellate Procedure.
II.
By reason of the foregoing findings of fact, the Court concludes that
the defendant by reason of his conduct has made a mockery of the income
tax laws and the regulations issued thereunder and has indicated he will
continue to do so in defiance of the law; that he thereby constitutes a
menace and a danger not only to himself, but also to society; and that
if this activity is permitted to continue in defiance of the law, it
would set an extremely bad example for other taxpayers and money earners
and cannot be tolerated. Therefore, on the facts of this case, the Court
concludes that the defendant has failed to carry the burden that he will
not flee or pose a danger to the community. Rule 46(c), Federal Rules of
Criminal Procedure and Rule 9(c), Federal Rules of Appellate Procedure.
III.
The Court further concludes that any appeal taken by the defendant will
be frivolous and taken for purposes of delay. Rule 9(c), Federal Rules
of Appellate Rpocedure and Title 18 U. S. C. §3148.
Order
Accordingly
defendant's motion for granting of bail pending appeal should be and is
denied.
[53-1
USTC ¶9352]United States of America, Plaintiff v. Ely Glazer, Defendant
In
the United States District Court, Eastern District of Missouri, Eastern
Division, No. 27125(2), 14 FRD 86, December 24, 1952
Evasion of taxes: Bail pending appeal.--Motion for bail after
conviction for income tax evasion is denied where there was nothing new
or novel in the complaint, the facts of the case are not unique,
defendant had a fair trial, and no showing was made that the case
involves a substantial question which should be determined by the
appellate court, or that in the Court's discretion he should be admitted
to bail pending appeal. The factor of hardship on the defendant is
immaterial.
George
L.
Rob
ertson, United States Attorney, and Ted A. Bollinger and Marvin C.
Hopper, Assistant United States Attorneys, all of St. Louis, Mo., for
plaintiff. Morris A. Shenker, 408 Olive Street, and Sidney Glazer and
Martin A. Rosenberg, Arcade Building, St. Louis, Mo., for defendant.
Memorandum
HULEN,
District Judge:
Defendant
made an unsuccessful oral application for bail at time motion for new
trial was overruled, following a conviction for income tax evasion on
two counts. The sentence was a year and a day and a fine of $10,000.00
on Count One and a fine of $10,000.00 on Count Two. The following motion
is now for ruling:
"The
defendant renews his application for bail and calls the Court's
attention to Rossi v. United States, 8th Cir., 11 Fed. (2d)
264."
The
motion for new trial contained seventy-one assignments of error. By oral
argument and brief only five of the complaints were submitted to this
Court.
The
motion for new trial was overruled December 12, 1952 (see memorandum
opinion). On the same day defendant filed with the Clerk his election
"to commence service of the sentence imposed."
A
motion was filed asking for suspension of sentence. In substance it
relates: "Tax liens were filed against the defendant in the amount
of $679,293.72"; 1 that
"The fair value of all of the defendant's assets in cash, bonds,
real estate, evidence of indebtedness, stocks, etc." levied upon,
turned over by defendant, or on which tax liens have been filed,
"to satisfy the claims is of the approximate amount of
$500,000.00." The motion concludes:
"b.
Defendant has been advised that even though the claims of the United
States Government may be excessive, that he may not expect to receive
any of the funds that were turned over by him to the United States
Government as the final claim will still be in excess of all of his
assets.
"c.
It would be to the best interests of the United States Government for
defendant to remain at large and to continue his business, the earnings
of which will be used to meet the claims of the United States
Government."
Rossi
v. United States, supra, was
decided in 1926. The holding of that decision--
"Cases
of this character, however, are rare, and accused and convicted persons
under ordinary circumstances and in the vast majority of cases should be
admitted to bail, both before their conviction and during the pendency
of their writs of error until the appellate court has affirmed the
judgments against them."
has
been affected in our opinion by Rule 46(a)(2), Federal Rules of Criminal
Procedure:
"Bail
may be allowed pending appeal or certiorari only if it appears that the
case involves a substantial question which should be determined by the
appellate court. * * *"
Prior
to the adoption of the new criminal rules, the Eighth Circuit Court of
Appeals, in Bernacco, et al. v. United States, 299 Fed. 787,
declared:
"The
court is clear that the allowance to bail after conviction is not an
absolute right, but entirely within the exercise of sound judicial
discretion. This was true at common law."
Rule
42(a)(2) became the law in May, 1934. In United States v. Delaney,
8 Fed. Supp. 224, the impact of the new rule is stated:
"The
shift from the use of 'frivolous' to 'substantial' would seem to be
another indication of the still shifting emphasis. It apparently
transfers the burden from the government to the defendant. That has
always been the law in England."
In
United States v. Burgman, 89 Fed. Supp. 288, the law is stated:
".
. . two requisites must be met in order to justify the enlargement of a
defendant on bail pending appeal. First, it must appear that the case
involves a substantial question of law. Second, it must appear that the
case is one in which in the discretion of the Court, it is proper to
grant bail."
*
* *
"When
a defendant is convicted, the presumption of innocence vanishes and a
heavy presumption of guilt supplants it."
This
Circuit held, in Baker v. United States, 139 Fed. (2d) 721
(1944):
"A
man who has been found guilty in District Court and sentenced has no
absolute right to bail pending appeal; he has a right to apply for
bail."
The
inquiry must now be--is there any substantial question raised by
defendant which should be determined by the appellate court, and, in the
Court's discretion is this a proper case in which to grant bail?
It
can and has been argued that for this Judge to pass on whether or not
there is a substantial question presented on defendant's motion for a
new trial which should be presented to the appellate court, is to
abrogate to himself the prerogatives of the Judges of the latter Court.
This can and must be true in a sense. But if the assertion of the
conclusion is to be the determinative factor in granting bail, then Rule
46(a)(2) means nothing. Its force is equally spent if, when a motion for
bail is presented, the Judge permits himself to be deterred from
following the spirit and wording of the rule by the charge that to deny
bail is to predetermine the action of the Court of Appeals. We think the
Supreme Court meant to place a responsibility on the trial court when it
promulgated Rule 46(a)(2). Therefore it is the duty of the Court to give
its best efforts to meeting the responsibility. Defendant has his right
to go to the Court of Appeals on the question of bail, without waiting
for a hearing on the merits. If our judgment be error, the error can be
corrected forthwith. A trial Judge should not arbitrarily deny bail on
appeal and force all appealing defendants to go to the higher Court for
a decision on bail. Each case should receive the Judge's conscientious
attention and best judgment. We have been on the bench of this Court
over nine years and during that time we have denied bail in three cases,
including this one. We say without boast, but as some indication of the
norm of consideration given to such matters, that in the other two cases
the sentences were affirmed.
Defendant's
oral motion for bail, as well as the written motion, were accompanied by
no reference to any assignment of error. Defendant apparently is of the
belief he is entitled to bail merely by applying for it. We have of our
own motion gone back to the points presented in the motion for new trial
and have reexamined them.
Are
new or novel points raised in the motion for new trial? Are unique facts
presented not covered by the controlling opinions? Are important
questions concerning the scope and meaning of decisions of the Supreme
Court presented? Is there a showing of denial of a fair trial? Such are
matters to be considered, with the burden on defendant. (D'Aquino v.
United States, 180 Fed. (2d) 271).
Defendant's
main assignment goes to the question of the sufficiency of the evidence
to make a submissible case. The defendant for 1945 and 1946 kept no
books or records, or if any were kept he refused to make them available
to the Revenue agents investigating defendant's tax returns. On request
the defendant did produce some, but not all, of his cancelled checks on
one bank. Neither defendant nor his auditor would furnish defendant's
cancelled checks on another bank during the investigation. He refused
to furnish a net worth statement. This left the plaintiff with no
alternative but to use "such method as in the opinion of the
Commissioner does clearly reflect the income" of defendant. (26 U.
S. C. A. 41). They used the expenditures and net worth method. This
method raises no new question. The same complaint defendant now makes
has been made on many occasions. We recognize the law to be that a
definite starting period must be fixed. The starting period does not
have to be fixed "to a mathematical certainty". (United
States v. Schuermann, 174 Fed. (2d) (8 Cir.) 397 [49-1 USTC ¶9281]).
On a motion hearing defendant's attorney conceded the amount of assets
was fixed definitely and correctly when the examination was made by
Government agents. It was a simple matter to determine the assets
acquired after December 31, 1944. The reasonable inference deducible
from the evidence is that defendant's unreported income was from
transactions in violation of the law. (Leeby v. United States (8
Cir.) 192 Fed. (2d) 331 [51-2 USTC ¶9497]). There is a basis in such
testimony, not only for the source of income, but for intent to conceal
such income from the Government. (United States v. Skidmore (7
Cir.) 123 Fed. (2d) 604 [41-2 USTC ¶9716]). Failure to keep records,
keeping cash in safe deposit boxes, defendant's method of transacting
his private business affairs, were obviously calculated not only to
conceal their magnitude but to thwart successful investigation by
others, and is further evidence of willful attempt to evade income tax.
(United States v. Chapman (7 Cir.) 168 Fed. (2d) 997 [48-1 USTC
¶9312]). An atmosphere of secrecy and defiance has hovered over the
defendant's case since its inception. We find that attitude in the
refusal of the defendant to cooperate with the examiners of the Revenue
Department, particularly after counsel and auditors for defendant came
into the investigation. Not only has defendant refused to cooperate, but
on every occasion when asked for an explanation on decisive matters, he
has remained mute. This course of conduct continued up to and including
the trial. Defendant did not take the stand. (It was present when
defendant refused to let Government agents examine currency bills of
large denominations which defendant had in his safe deposit box. The
serial number was wanted to trace black market transactions from the
east. It was present when defendant caused the examiners to receive a
typed, unsigned statement that defendant would furnish certain cancelled
checks, but thereafter failed to do so.) 2 After
defendant employed attorneys they were given a list of various cash
deposits, exchange items, checks, etc. for explanation. None of these
were ever explained, despite repeated requests for information. Such
conduct is compatible with fraud, inconsistent with innocence, and
furnishes a necessary element of proof for a conviction on the
expenditures and net worth method, under the statute on which the
indictment was based. (Jelaza v. United States (4 Cir.) 179 Fed.
(2d) 202 [50-1 USTC ¶9149]). There is nothing new or novel in
defendant's complaint on this record. The facts are not unique. They
represent a plan not uncommon and found in many cases of those who would
cheat the Government on their lawful obligations. We think defendant had
a fair trial. His guilt was established by circumstantial but strong
evidence.
Defendant's
attorney made the following statement in his oral argument for
probation:
"That
all of his years of labor, work and accumulation have been used up in
satisfying the Government's claim; and not only that, but that in all
probability there will be a substantial deficiency, in addition to the
assets which have been used, and that it will be some years, even if he
is successful earning any money, in attempting to satisfy these claims
that the United States Government is claiming that they are owing, with
the interest accumulating, it would be almost impossible, even if he
were to earn more money than he is, for him to accumulate enough money
to keep current.
*
* *
"MR.
HOPPER: Since the jeopardy assessment in the latter part of 1948, the
defendant has paid approximately $250,000.00 on the total assets taxes,
which originally approximated, with interest, I think around eight
hundred fifty some odd thousand dollars. So that would bring the balance
that we have suggested of about $600,000.00 now due and owing, including
interest. As to just what the defendant's assets are for the liquidating
of stock--"
"THE
COURT: Over what period was the tax of $300,000.00?"
"MR.
HOPPER: That was for the period, 1942 through 1951."
"MR.
SHENKER: No, no. 1942 to 1947." 3
Order
Defendant's
motion for bail is overruled, because it has not been made to appear
that the case involves a substantial question which should be determined
by the appellate court, or that in the Court's discretion defendant
should be admitted to bail pending appeal.
1
The conviction was for failure to report income for years 1945 and 1946.
Incomes for prior years are also made the basis for claims of civil
liability.
2
This was developed on the hearing for bail and is not in the trial
record.
3
On defendant's showing that all his assets are under government control,
we made the fines collectible on execution.
[54-2
USTC ¶9676]E. L. Klingstein, Appellant v. United States of America,
Appellee
(CA-4),
In the United States Court of Appeals for the Fourth Circuit, No. 6893,
216 F2d 494, October 8, 1954
Appeal from the United States District Court for the Eastern District of
Virginia, at Richmond.
[1939 Code Sec. 145--similar to 1954 Secs. 7201-7203]
Criminal penalties: Bail pending appeal.--Taxpayer who was
convicted of income tax evasion and sentenced was not allowed bail
pending appeal. The Court refused taxpayer's contentions that the
presentence investigation report was unfair and the parole officer was
prejudiced against him on account of race.
Jacob
P. Lefkowitz in support of motion, and James R. Moore, Assistant United
States Attorney, in opposition.
Before
PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.
On
Motion for Bail
PER
CURIAM:
This
is a motion to admit to bail pending appeal a person who has been
sentenced to a term of imprisonment on a plea of nolo contendere to a
charge of fraudulent income tax evasion. Appellant complains because the
sentencing judge had before him a presentence investigation report which
appellant contends to be unfair. We have examined the report of which
appellant complains and find that the criticisms made of it are entirely
unfair and unwarranted, and while it contains many matters unfavorable
to appellant it also contains many favorable matters, and the report
does not sustain the charge of appellant that the probation officer was
prejudiced against him on account of race. The face that the report was
before the sentencing judge furnishes no ground for the relief which
appellant asks. We have examined also the proceedings had at the time of
sentence and find no ground for the contention that appellant was denied
due process or that the judge refused to listen to matters urged in
defense or mitigation of punishment. On the contrary it appears that the
judge gave appellant full opportunity to be heard and to present
witnesses in his behalf and listened for several hours to his counsel
and to witnesses offered in his behalf. The showing made on the motion
before us does not justify admission to bail pending appeal.
Motion
denied.
[35-2
USTC ¶9458]John D. Kitrell, also known as J. D. Kitrell, Appellant, v.
United States of America, Appellee
(CA-10),
United States Circuit Court of Appeals, Tenth Circuit, No. 1253, 76 F2d
333, Decided March 28, 1935, Cert. denied, 296 U. S. 643, 56 S. Ct. 248
Appeal from the District Court of the United States for the District of
Colorado.Bail pending appeal is denied, the Court holding that
objections to the sufficiency of the indictment were not well taken.
Bail is not allowed pending appeal unless it appears that the appeal
involves a substantial question which should be determined by the
appellate court.
Harry
Silverstein (David Rosner was with him on the application), for
appellant. Byron G. Rogers, Assistant United States Attorney, for
appellee.
Before
LEWIS and McDERMOTT, Circuit Judges.
PER
CURIAM:
Appellant
was convicted on three counts of an indictment, each of which was based
on the Revenue Act of 1928. 45 Stat. 835 (26 U. S. Code, Sec. 2146).
Clearly the pleader rested counts one and two on sub(b) of said section,
which defines a felony; and count three on sub(a) which defines a
misdemeanor. Count one charges the appellant with a willful and
felonious attempt to defeat and evade his income tax in an amount
exceeding $70,000 for the calendar year 1930. It is set forth that
appellant's gross income for 1930 was more than $300,000, and that his
net income was in excess of that amount, and it is charged that as a
means of willfully and feloniously attempting to defeat and evade said
tax he willfully failed to make a return on or before March 15, 1931, or
at any other time or any return whatsoever, and that he never made any
payment to the Collector of Internal Revenue of any sum on account of
said tax for said calendar year.
The
charge in the second count and the facts therein set forth are in
substance like those in the first count, except the tax which he
attempted to defeat and evade was for the calendar year 1931 in the
amount of more than $8,000.
The
third count also deals with the tax for the calendar year 1931, but it
only charges a willful failure to make return for that year on or before
March 15, 1932, or at any other time, and that he has never made payment
of any sum whatever to the Collector on account thereof.
The
appellant was sentenced to four years' imprisonment on counts one and
two, said terms to run consecutively, and he was fined $2,500 on each
count. On the third count he was sentenced to one year's imprisonment to
run concurrently with the terms imposed on the other two counts and
fined $1000.
The
bill of exceptions has not been settled, and, of course, is not here.
The
application here [for bail pending appeal] rests only on an attack on
the sufficiency of the several counts of the indictment, more
particularly on counts one and two. It is said that each is bad for
duplicity in that each charges an attempt to defeat and evade the tax
and a failure to make a return, and that the only method of tax evasion
charged is the failure to make return. But the third count does not
charge that the defendant willfully attempted to defeat and evade the
tax for 1931. It only charges that his gross income was over $5000,
bringing him within the requirement of the statute that he make return,
which he willfully failed to do, whereas the offenses charged in the
first and second counts were willful attempts to defeat and evade the
tax for each of the two years. Nor can it be maintained that either of
the counts is duplications. The questions thus raised seem to now be
authoritatively settled against appellant's contention. O'Brien v.
United States, 51 F. (2) 193, Certiorari denied, 284 U. S. 673; Oliver
v. United States, 54 F. (2) 48, Certiorari denied, 285 U. S. 543; United
States v. Miro, 60 F. (2) 58; United States v. Commerford, 64
F. (2) 28, Certiorari denied, 289 U. S. 759; Hargrove v. United
States, 67 F. (2) 820. See also, Albrecht v. United States,
273 U. S. 1, 11; Blockburger v. United States, 284 U. S. 299.
The
two subparagraphs (a) and (b) express a clear intention to define
different offenses. The first makes it a misdemeanor to willfully fail
to make the required return. The second makes it a felony to willfully
attempt in any manner to evade or defeat the tax or the payment thereof;
and the counts make that distinction clear and definite. They separately
charge in accord with the definition.
Application
for bail was first made to the District Judge. In denying it the
District Judge said: "Being of the opinion that there is no
substantial question involved I have no alternative but to deny bail at
this time." We take that statement as having been made because of
the last paragraph of Rule 6 of the Rules adopted by the Supreme Court
in Criminal Cases. 292 U. S. 663.
Bail
shall not be allowed pending appeal unless it appears that the appeal
involves a substantial question which should be determined by the
appellate court.
The
discussion of the District Judge preceding the excerpt supra,
relates in part to the sufficiency of the three counts. Assuming the
authority and duty of this Court to overrule the District Judge in that
finding, a proper regard for his views causes us to feel that we should
be slow to take a contrary view, unless clearly convinced he was in
error. However, our own investigation and consideration of the
contentions for the applicant convince that the criticisms of the
charges in the three counts are not well taken.
The
application is denied.
[57-2
USTC ¶9786]United States of America, Plaintiff-Appellee v. James D.
Irving, Defendant-Appellant
(CA-7),
U. S. Court of Appeals, 7th Circuit, No. 12072, 245 F2d 354, 6/27/57,
Denying motion for bail pending appeal from unreported District Ct.
decision
Emergency motion for bail pending appeal.--The court denies
taxpayer's emergency motion for bail pending appeal from an order of the
District Court rejecting taxpayer's motion for a new trial based on
newly discovered evidence, and denying bail. Taxpayer's 1952 income was
reconstructed by the government on the basis of net worth increase as
disclosed by statements of assets and liabilities as of December 31,
1951 and December 31, 1952. The statement showing a net worth of about
$16,000 at the end of 1951 was signed by the taxpayer. The net worth at
the end of 1952 was about $220,000. The motion for a new trial and for
bail is based on taxpayer's assertion that he has found a receipt for
$150,000 which was given to him in September 1951 for investment in a
legitimate business venture, and that his 1952 reconstructed income
should be reduced by that amount. Since taxpayer claims that this
receipt was found in September, 1956, it must have been available when
his brief was filed in October, 1956, on his first appeal from the
District Court conviction, but its existence was not disclosed at that
time. Bail is denied because the appeal is frivolous or taken for delay,
or both.
Harry
G. Fins and Alvin A. Truner, Chicago, Ill., for appellant.
Rob
ert Tieken, United States Attorney, Chicago, Ill., for appellee.
Emergency
Motion for Bail Pending Appeal
FINNEGAN,
Circuit Judge:
Earlier
this year we affirmed the judgment of conviction of Irving [United
States v. Irving, 241 Fed. (2d) 306 (7th Cir. 1957) [57-1 USTC ¶9398],
rehearing denied March 14, 1957, certiorari denied June 3, 1957] who now
applies for an order admitting him to bail pending his appeal from an
order entered below denying his motion for a new trial on the ground of
newly discovered evidence. The cause is here on the docketing of
Irving's notice of appeal June 24, 1957 after the district judge, who
rejected the motion for new trial, denied bail. He was the same judge
who presided at Irving's trial.
During
the course of our opinion (241 Fed. 2d 306, 307 [57-1 USTC ¶9398]) we
said, inter alia; "A revenue agent was told by Irving, or
his representative, that the 'bulge' in his expenses of about $150,000 .
. . arose out of money given him by a
Rob
ert Mays to invest in a legitimate business. No receipts for that sum
were produced or found and no claim has been made against Irving by
Mays' estate . . ." Irving, in his current motion states
"During the course of preparation for his trial, the affiant
diligently attempted to locate two receipts whereby he acknowledged the
receipt of a total of $150,000 in September 1951 from
Rob
ert Mays . . ." Judgment on the jury's verdict was entered May 28,
1956. In his affidavit, submitted in support of his current application
for bail, Irving states: "The affiant [Irving] did not know of the
whereabouts of these receipts until Mr. Edward L. White telephoned him
on September 12, 1956 to advise him that these receipts were found among
other papers which belonged to
Rob
ert Mays and were placed in Mr. White's safe." The balance of this
affidavit is devoted to an exposition of the circumstances concerning
Mays' proposed investment in business with Irving and the death of Mays
in January, 1952. Several other affidavits are also submitted along with
this motion for admission to bail. One is by an attorney who in
substance relates discussion of the proposed business venture with Mays
and Irving, but this affidavit contains nothing corroborating the
receipts, nor showing transfer of funds from Mays to Irving. The
supervisor of the Division of Small Loans and Bail Bonds, Department of
Insurance, State of Illinois has also provided an affidavit here. His is
a highly generalized statement reflecting conferences with Mays and
Irving, there being other persons present, regarding issuance of a small
loans license. Again the affidavit is unsupporting on the matter of
receipts or movement of moneys from Mays to Irving. These last two
affidavits merely indicate that Irving and Mays contemplated the
possibilities of a joint business venture.
Edward
L. White, finder of the receipts, now urgently pressed on us by Irving,
has also made an affidavit, tracing his own business activities and
shifts of locations up to the time he called a representative of the
Mosler Safe Company to drill open the safe, September 12, 1956, in which
these receipts were found. Among White's statements embodied in his
affidavit are these:
"9.
Sometime during the latter part of September 1951,
Rob
ert Mays made a usual visit at 5047-49 Indiana Avenue. After he left,
the affiant noticed that Mr. Mays had left some papers on the desk. The
affiant did not examine these papers but telephoned Mr. Mays, who asked
the affiant to place them in the affiant's Mosler safe. The affiant
complied with this request. Shortly thereafter,
Rob
ert Mays became ill, was hospitalized, and died in January 1952."
"12.
On September 12, 1956, while the affiant was searching the contents of
the safe for the title to the truck, he came upon the papers which
Rob
ert Mays had left in the office in the latter part of September 1951.
The affiant examined these papers and among them found two receipts,
both signed by James D. Irving. The first receipt, dated September 3,
1951, acknowledges the receipt of $50,000.00 'For Loan Co. From
Rob
ert Mays.' The second receipt, dated September 12, 1951, acknowledges
the receipt by James D. Irving of $100,000.00 'From
Rob
ert Mays For Loan Co.'"
"13.
This is the first time that the affiant knew of the nature of the papers
left by
Rob
ert Mays in September 1951. After the death of
Rob
ert Mays in January 1952, the affiant was never contacted either by the
widow or Arthur J. Wilson, the
admin
istrator of the estate of
Rob
ert Mays, relative to any personal effects of the deceased
Rob
ert Mays."
"14.
The affiant notified James D. Irving the same day."
The
indictment on which Irving was convicted is grounded on a violation of
Internal Revenue Code of 1939, §145(b), 26 U. S. C. §145(b) for the
calendar year 1952. This was a net worth case and the government
introduced as an exhibit the statement of Irving's assets and
liabilities as of December 31, 1951 signed by him. Our examination of
the record filed in the first appeal discloses the following items
listed on the statement: "Assets: Cash in bank, $1,189.50; Cash on
hand: $13,000 . . . net worth as of December 31, 1951, is $16,489.50. .
. ." There are some adjustments in the record, but these figures
suffice here. A government witness testified during the trial that at
the end of 1952 "There were assets of $225,103.13; liabilities of
$5,729.74, making a net worth of $219,773.39."
The
gist of Irving's claim for bail at this instant stage is shortly stated
in this passage from his latest motion:
"At
the time of the discovery of these documents (the two receipts), this
cause was in the process of appeal and, under the provisions of Rule 33,
the District Court could grant no relief until the appeal had been
terminated on June 10, 1957. Appellant respectfully submits that the
newly discovered evidence is material and if in his possession at the
time of trial, could have very well resulted in a verdict of acquittal.
This involved a net worth case and the inability of the Government to
prove unreported income of $176,000 as alleged, but rather only $26,000,
may have well caused a verdict of acquittal by the jury."
Of
course the merits of Irving's motion for a new trial on the ground of
newly discovered evidence is not now before me for decision. See e.g. United
States v. Marachowsky, 213 Fed. (2d) 235, 238 (7th Cir. 1954). But
his motion for bail and documents filed in support of it are all part of
the backdrop against which I must apply liberalized Rule 46(a)(2)
governing bail on review after July 9, 1956. Federal Rules of Criminal
Procedure, 18 U. S. C.
[Appeal
Is Frivolous or Taken for Delay]
I
am denying bail because in my opinion Irving's present appeal is
frivolous or taken for delay, probably both. It is frivolous in my
considered judgment when the impact of his affidavit is fully
appreciated. Irving knew the existence of the receipts on September 12,
1956. From the docket entries in the office of the clerk of this court
it appears that the first appeal was docketed August 20, 1956 and after
an extension of time, Irving as defendant-appellant filed his brief and
appendix on October 19, 1956. No move of any kind was made by defense
counsel to apprise this court of the receipts which Irving, on his own
sworn statement, now tells me he was aware of in September, 1956.
Significantly, I think, Irving's then defense attorney waived oral
arguments in the cause on January 16, 1957. This court was then still
unadvised of that which Irving claims is now so critical as to warrant
bail. When Irving's petition for rehearing was filed February 27, 1957
the attorney who briefed for Irving and earlier waived oral argument,
took us to task on the matter of the receipts, despite the fact, I am
presently informed, that his client knew of them in September, 1956. I
am unaware of the contents of Irving's petition to the U. S. Supreme
Court for certiorari to our Court from our judgment of February 12,
1957, but I think this "newly discovered evidence" was
commencing to become a little stale along about that time.
I
would underscore White's statement of the September, 1956 date because
it corroborates Irving and for the purposes of the instant motion
satisfies me that Irving possessed the information in September. Nothing
in the papers before me, at this time, shows that Irving withheld the
information from his counsel or a date when the receipts were handed
over, if they were. What has been thus traced spells out inexcusable
silence and delay.
Although
Irving's present attorneys have left unmentioned Ward v. United
States, 76 S. Ct. 1063 (1956) [56-2 USTC ¶9932] and United
States v. Allied Stevedoring Corporation, 235 Fed. (2d) 909 (2nd
Cir. 1956) [57-1 USTC ¶9394] I have considered them in reaching may
ruling here based upon the controlling force of Rule 46(a)(2) Federal
Rules of Criminal Procedure, 18 U. S. C.
"Bail
may be allowed pending appeal . . . unless it appears that the appeal is
frivolous or taken for delay . . . ."
That
part of the Rule following the word "unless", I think, confers
discretion upon a judge of this court.
The
emergency motion for bail pending appeal is hereby denied.
[56-2
USTC ¶9932]John Ward and Michael Bowers, Petitioners v. United States
of America
Supreme
Court of the United States, 76 SCt 1063, 8/8/56, Aff'g unreported CA-2
decision which affirmed District Court (U. S. v. Allied Stevedoring
Corp., et al.), 56-2 USTC ¶9800
On Petition for Admission to Bail.
[1939 Code Sec. 145(b)--similar to 1954 Code Sec. 7201]
Criminal tax evasion: Bail pending appeal on conviction and sentence:
New Rule 46(a)(2) of Federal Rules of Criminal Procedure.--Bail was
denied defendants by the the trial court after conviction and sentence
of defendants for income tax evasion under 1939 Code Sec. 145(b), for
the reason that the likelihood of their flight "was a danger not to
be disregarded." Justice Frankfurter of the Supreme Court, sitting ad
hoc Circuit Justice, also denies defendants' petition for bail,
awaiting final decision on the effect of the new Rule 46(a)(2) of the
Federal Rules of Criminal Procedure, effective July 9, 1956, which would
allow bail pending appeal unless it appears that the appeal is frivolous
or taken for delay.
JUSTICE
FRANKFURTER, as Circuit Justice:
This
is a petition for bail pending an appeal before the Court of Appeals for
the Second Circuit from a conviction for evasion of income taxes, in
violation of 26 U. S. C. §145(b). An indictment against the
petitioners, together with some co-defendants, was filed on July 29,
1953. They were arraigned on July 30, 1953, but not brought to trial
till February 6, 1956. After a seven-weeks' trial, they were found
guilty, and on April 16, 1956, Bowers was sentenced to five years'
imprisonment and Ward to four years' imprisonment, with an additional
fine of $10,000 for each. An application for bail was denied by the
trial court. A notice of appeal was duly filed and made the basis of a
motion for bail before the Court of Appeals after its denial by the
District Court [56-2 USTC ¶9800] and by a single Circuit Judge. The
motion was made on May 2, argument was heard on May 7, and after some
intermediate steps the Court of Appeals denied the motion, on June 4,
1956. Thereupon, a petition for bail came before me, sitting as ad
hoc Circuit Justice, since my brother HARLAN, the regular Circuit
Justice for the Second Circuit, had recused himself.
[New
Rule 46(a)(2)]
When
the Court of Appeals disposed of the motion for bail, on June 4, 1956,
the Rule then in force for admission to bail after conviction was as
follows:
"Bail
may be allowed pending appeal or certiorari only if it appears that the
case involves a substantial question which should be determined by the
appellate court. . . ." Rule 46(a)(2) of the Federal Rules of
Criminal Procedure.
But
on April 9, this Court had submitted to Congress a new Rule 46(a)(2), to
take effect on July 9, 1956. It reads:
"Bail
may be allowed pending appeal or certiorari unless it appears that the
appeal is frivolous or taken for delay. . . ."
Obviously,
as the Government recognizes, the amendment has greatly liberalized the
basis for admission to bail in the federal courts pending an appeal from
a conviction. By the time the matter first came before me, the new Rule
was law. Since the Court of Appeals had denied bail without giving
reasons, I could not tell whether they took into account the changed
situation presented by the Rule which was then in process of becoming,
though it was not formally, effective. Accordingly, it seemed to me
appropriate that the lower courts should have an opportunity to pass
upon the petition for bail under the standards that now govern. I
therefore remanded the matter to the Court of Appeals for direct
disposition by it, or for further consideration by the District Court.
The Court of Appeals took the latter course and on July 17 determined
that the request for bail should again be passed on by the trial judge.
After further hearing, the trial judge again denied bail, supporting his
denial by what the Court of Appeals has characterized as "a
carefully reasoned and detailed opinion." The motion for bail by
Bowers and Ward was thereupon renewed before the Court of Appeals. That
court, in a per curiam opinion, denied the renewed motion,
whereupon the petitioners again asked me to allow bail.
Both
the lower courts have set forth the grounds for their denial. They have
expressed themselves to be duly mindful of the controlling force of Rule
46(a)(2), as amended. The issues that are raised here have been fully
canvassed in the briefs filed by the petitioners and the Government.
Both sides have addressed themselves to the proper scope of the amended
Rule and its appropriate application to the specific circumstances of
this prosecution.
[Rule
Liberalized]
It
is common ground that the amended Rule 46 has made a decided change in
the outlook on granting bail after conviction. The Government, as I have
already indicated, accepts the statement in my memorandum of July 13,
1956, that the old Rule 46(a)(2) has by the amendment "been greatly
liberalized." Putting to one side its qualifications, I think the
Government is right in saying that the granting of bail except for
"frivolity" establishes a higher minimum standard than the old
concept of "substantial question." It is also right in
indicating that the new Rule effectuates a shift from putting the burden
on the convicted defendant to establish eligibility for bail, to
requiring the Government to persuade the trial judge that the minimum
standards for allowing bail have not been met. The authoritative
interpretation of the amendment must, of course, await a decision by the
Supreme Court. In the meantime, however, one cannot escape his
individual responsibility in passing on a petition like this.
The
Government commendably acknowledges that the new Rule has made an
important change. The Rule expresses a general attitude, the
significance of which is that inasmuch as an appeal from a conviction is
a matter of right, the risk of incarceration for a conviction that may
be upset is normally to be guarded against by allowing bail unless the
appeal is so baseless as to deserve to be condemned as
"frivolous" or is sought as a device for mere delay. The
Government suggests, however, that there may be considerations other
than frivolity or delay, which may conscientiously move a trial judge to
deny bail without disloyalty to the amended Rule. I am bound to say that
the Government is rightly cautious in suggesting the extent of the area
of discretion that still remains under the amended Rule.
[Reason
for Denying Bail]
Elaboration
of whatever occasions for discretion may remain had better be left to
the specific occasions which may give rise to such claims. The present
situation presents one consideration that suffices for disposition of
this case. The granting of bail certainly presupposes confidence that a
defendant will respond to the demands of justice. In fixing the amount
of bail, Rule 46(c) explicitly adverts to the trust-worthiness of a
defendant. The bail must be of an amount to "insure the presence of
the defendant." Impliedly, the likelihood that bail within
tolerable limits will not insure this justifies denial of bail. One of
the reasons that led the District Court to deny bail to Bowers and Ward
was "that there is considerable motivation for these defendants to
flee the Court's jurisdiction and that they have ample means to
accomplish this purpose." I read this to mean that the District
Judge felt that the likelihood of a flight was a danger not to be
disregarded. I cannot reject this conclusion of the District Court
because it was based on confidential probation reports. See Williams
v. New York, 337 U. S. 241. Such a judgment is, to be sure, a
prophecy but I cannot sit as the district judge and make my own.
Presumably, this reason of the District Court in denying bail was one of
the considerations included in the "reasons" for the action
taken by the District Court which the Court of Appeals respected in not
overruling "the exercise of sound judgment" by the District
Court. On this ground, I must deny the petition.
Asking
a Circuit Justice to grant bail pending appeal in the Court of Appeals,
after denial by the two lower courts, presents a difficult dilemma. An
error of principle in the denial of bail, an indisputable question of
law, calls for correction, whether the matter comes before the whole
Court, as in Stack v. Boyle, 342 U. S. 1, or before an
appropriate Circuit Justice. But when it is a question of the
application of duly recognized standards, and such application turns on
what may fairly be called "facts," or on a necessarily
prophetic judgment like the trustworthiness of a convicted defendant, I
do not conceive it to be the function of a Circuit Justice to exercise
an independent judgment as though he were sitting in the district court.
And yet, even where "facts" are involved, a standard may be
recognized in principle but honored, however unconsciously, in the
breach. I think the practical way out of this dilemma lies in the more
effective
admin
istration of criminal justice and, more particularly, in an appropriate
procedure for criminal appeals.
[Court
Criticizes Delays]
Nothing
has disturbed me more during my years on the Court than the time span,
in so many cases that come here, between the date of an indictment and
the final appellate disposition of a conviction. Such untoward delays
seem to me inimical to the fair and effective
admin
istration of the criminal law. I see no reason whatever why we in this
country cannot be as expeditious in dealing with criminal appeals as is
true of England. Applications for appeals are heard in the English Court
of Criminal Appeal within eight weeks of conviction; in murder cases
appeals "are generally before the court not later than three weeks
after the conviction." Lord Chief Justice Goddard, "The
Working of the Court of Criminal Appeal," 2 J. Soc'y Public
Teachers of Law 1, 3 (1952). An examination of the volume of reports of
the Court of Criminal Appeal for the year 1954 reveals the following:
Generally only two to three months elapsed between the entry of the
judgment from which review was sought and the actual hearing of an
appeal; the shortest period was one month, in a murder case; the longest
period was five and one-half months. This is true of a court, it should
be noted, that has something like 1200 applications annually coming
before it, disposed of by judges who have considerable additional
judicial duties. Conviction in this case was had nearly four months ago,
and probably two months more will pass, unless I am misinformed, before
the case may be heard on its merits. The indictment here was found more
than three years ago and the appeal is not likely to be reached in less
than six months after conviction.
I
do not mean to imply criticism of any person or judge or court for what
is a good illustration of the general leaden-footedness of criminal
prosecutions. The fault lies with the habit of acquiescence in what I
deem to be a reprehensible system. I duly note that in this case it was
suggested to the petitioners by the Circuit Judge in denying their
application for bail to apply for an order advancing the case for early
argument, and on the part of the Government there was an offer toward
facilitating the appeal, although its specific scope and effectiveness
are controverted by the petitioners. To my mind, however, a more drastic
procedure for the early disposition of a criminal appeal than agreement
among the parties is required. The Government should, I believe, be the
active mover for an early hearing, thus putting upon the convicted
defendant the responsibility for setting forth sound reasons for
postponing such a hearing. I am not able to understand why it should not
become the settled practice for the Government to move, after an appeal
is taken from a conviction, for the hearing of the appeal on the
stenographic minutes at the earliest possible moment that a Court of
Appeals can accommodate its calendar to the disposition of business that
has first call, namely, a criminal appeal. This is especially desirable
in a case where bail has been denied. The time to argue a case is when
the various legal points, including the claim that there was not
sufficient evidence to go to the jury, are fresh in the minds of
counsel. I cannot but believe that it would, on the whole, also
facilitate consideration by courts of appeals of criminal appeals to
have the minutes of the trial before them and to be referred by counsel,
fresh from combat, to the claims in controversy as they are supported or
contradicted by the stenographic minutes. I am confident that all the
courts of appeals would be responsive to such a demand for as speedy a
disposition of criminal appeals as the interests of justice permit,
including, of course, in the interests of justice, adequate preparation
and due deliberation. Motion denied.