Changing Plea

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7203: Willful Failure to File Return, Supply Information, or Pay Tax: Defenses: Changing Plea

 

[99-2 USTC ¶50,788] United States of America , Plaintiff-Appellee v. John E. Worthen, Defendant-Appellant

(CA-10), U.S. Court of Appeals, 10th Circuit, 98-4043, 8/19/99, Affirming an unreported District Court decision

[Code Sec. 7203 ]

Criminal tax evasion: Motion to withdraw guilty plea: Failure to report income: Failure to file return: Date of criminal conduct: Acceptance of responsibility: Plea bargain.--The district court correctly denied an individual's motion to withdraw his guilty plea before his sentencing for attempted tax evasion. Although some evidence suggested that the taxpayer did not believe he owed any tax for the year at issue, he admitted that he knew he had income during the year and that he failed to file a return. In addition, he had the benefit of counsel, he had plenty of time to review his decision before entering the plea, and he repeatedly told the court he understood the plea and entered it voluntarily. Further, allowing him to withdraw his plea shortly before he was sentenced would prejudice the government and inconvenience the court.

[Code Sec. 7203 ]

Criminal tax evasion: Sentencing guidelines: Base offense level: Tax loss: Sophisticated means of concealment: Date of criminal conduct: Plea bargain.--The district court properly calculated an individual's base offense level according to the sentencing guidelines. The amount of the tax loss caused by his offense was based on stipulated facts. Moreover, the increase in the base offense level for concealing his crime by sophisticated means did not violate his plea agreement. Also, he began engaging in criminal conduct related to his offense as soon as he started receiving the unreported income, rather than when his return was due. Finally, his admission of wrongdoing did not constitute an acceptance of responsibility, especially in light of his continued assertion that he did not owe taxes on the unreported income.

Before: KELLY, MCKAY and HENRY, Circuit Judges.

è Caution: This court has designated this opinion as NOT FOR PUBLICATION.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

ORDER AND JUDGMENT ^*

MCKAY, Circuit Judge:

Defendant-Appellant John E. Worthen appeals the district court's denial of his motion to withdraw his guilty plea as well as various aspects of his sentence. On April 28, 1997, Defendant was indicted on the following counts: (I) attempting to evade or defeat payment of income tax in violation of 26 U.S.C. §7201 for the 1990 tax year; (II) making and subscribing a false tax return, statement, or other document in violation of 26 U.S.C. §7206(1); (III) failure to file a tax return, pay tax, or supply information in violation of 26 U.S.C. §7203; and (IV) failure to file a tax return, pay tax, or supply information on behalf of Nordic Limited, Inc., in violation of 26 U.S.C. §7203. Defendant entered a plea of guilty to Count I, attempted tax evasion, on September 22, 1997. See Appellant's App. at 145. As part of the plea agreement, the Government agreed to urge dismissal of the remaining counts, see Addendum to Appellant's App. at 380, and it agreed not to recommend a sentence adjustment based on the use of sophisticated means to avoid detection of the offense. See Appellant's App. at 10.

On December 31, 1997, Defendant filed a motion to withdraw his guilty plea. The court heard argument on the motion on January 5, 1998; held a hearing on the motion on January 15, 1998; held an evidentiary hearing on the motion February 2, 1998; and heard additional argument on February 3, 1998. In an Order dated February 19, 1998, the district court denied Defendant's motion to withdraw his guilty plea. See Appellant's Br. , Attach. at 2. On March 17, 1998, the court sentenced Defendant to a term of 33 months' imprisonment followed by 3 years' supervised release.

The facts underlying the indictment indicate that Defendant was the president of Nordic Limited, Inc., which he operated out of his home in Salt Lake City , Utah . In 1990, acting on behalf of Nordic, Defendant sold mining leases owned by Nordic to Crown Resources of Colorado for $494,520. As payment for the mining leases, Crown Resources issued a cashier's check payable to Nordic. Upon presenting the check for payment, Defendant obtained five separate checks totaling $494,520 payable to five separate corporate entities over which he exercised substantial control. Defendant subsequently deposited these checks into bank accounts maintained by the corporations.

During 1990, in connection with his probation for a separate conviction, Defendant reported $57,440.19 in annual income to his probation officer. He did not, however, report the $494,520 from the sale of the Nordic mining leases to Crown Resources. In addition, the record shows that Defendant received income during the last three months of 1990 when he used corporate accounts to make personal expenditures totaling at least $88,405.21. The record does not indicate whether Defendant reported that income to the probation office.

On April 15, 1991, Defendant filed an Application for Automatic Extension to File U.S. Individual Income Tax Return in which he reported his tax liability for 1990 as $2,235 and to which he attached a check in that amount. Defendant did not subsequently file an income tax return for 1990.

For purposes of the plea agreement, Defendant and the Government stipulated to the amount of Defendant's tax liability for 1990. The parties stipulated that Defendant's taxable income included the $57,440.19 he reported to his probation officer and the $88,405.21 he received as expenditures from corporate accounts. See Appellant's App. at 14-19. Less the $2,235 payment he sent with his extension application, Defendant's stipulated amount of tax liability for 1990 was therefore $38,601.74. See Addendum to Appellant's App. at 387.

I.

We review the district court's denial of a motion to withdraw a guilty plea for abuse of discretion. See United States v. Killingsworth, 117 F.3d 1159, 1161 (10th Cir. 1997). Rule 32(e) of the Federal Rules of Criminal Procedure provides that "[i]f a motion to withdraw a plea of guilty . . . is made before sentence is imposed, the court may permit the plea to be withdrawn if the defendant shows any fair and just reason." In determining whether a defendant has established a "fair and just reason," we consider seven factors: (1) whether the defendant has asserted his innocence; (2) prejudice to the government; (3) the defendant's delay in filing his motion; (4) inconvenience to the court; (5) the defendant's assistance of counsel; (6) whether the plea is knowing and voluntary; and (7) waste of judicial resources. See United States v. Carr, 80 F.3d 413, 420 (10th Cir. 1996). "Although a defendant's motion to withdraw a plea before sentencing should be 'freely allowed' and 'given a great deal of latitude,' we will not reverse absent a showing that the trial court acted 'unjustly or unfairly.' " United States v. Kramer, 168 F.3d 1196, 1202 (10th Cir. 1999).

The district court decided that the first, third, and sixth factors weighed against allowing Defendant to withdraw his plea. The court first concluded that Defendant did not assert his innocence before the court, and in fact he "admitted that he had over $100,000 in income which was not reported to the United States and upon which he had not paid taxes." Appellant's Br. , Attach. at 3. The court noted that Defendant signed and submitted to the court a statement certifying that the facts indicating that he had underreported his income were true and correct. See id. at 2. Weighing the third factor, the court found that Defendant delayed filing his motion to withdraw his plea until three months after he had entered the plea, which was just five days before sentencing and twelve days after reviewing his draft presentence report. According to the court, this timing indicated that "[D]efendant's reason for filing the motion was motivated by the contents of the presentence report, which is not a fair and just reason for the withdrawal of plea." Id. at 6. Finally, in considering the sixth factor, the court noted that Defendant had knowingly and voluntarily admitted his guilt, both orally and in writing, and that he had been "represented by counsel throughout the proceedings." Id. For these reasons, the court denied Defendant's motion.

On appeal, Defendant contends that the court abused its discretion in denying his motion to withdraw his plea because the Carr factors weighed in favor of granting the motion. Specifically, Defendant claims that he asserted his innocence and presented the testimony of two expert witnesses and an affidavit by a former IRS employee to support his assertion; that he had legitimate reasons for failing to file his motion to withdraw his plea in a more timely manner; and that his plea was not "knowingly and intentionally given," Appellant's Br. at 32, because even if he signed the statement certifying the truth of the facts showing that he committed the charged offense, he did not "ever admit a critical element of the offense; that is[,] that he owed any federal income tax . . . for 1990." Id. at 33.

We begin our analysis with the three factors relied on by the district court. With respect to the first factor, Defendant's alleged assertion of innocence, there is some evidence that Defendant may not have believed he owed any income tax for 1990. For example, at the initial plea hearing, Defendant testified that the actions underlying the charge of attempted tax evasion against him "arose out of [his] belief that a repayment of a loan from a corporation was not a taxable event." Appellant's App. at 121. More specifically, Defendant believed that the money he received from selling the mining leases for Nordic to Crown Resources constituted a repayment of the "vast sums of money" he had loaned to Nordic over a period of approximately twelve years. Id. at 122. Although this evidence suggests that Defendant asserted his innocence, the record also contains evidence contradicting his assertion. For example, at sentencing, Defendant's counsel stated that Defendant "concede[d] then and he concedes now that he had not filed his returns," even though he generally "knew he had income during that period." Id. at 341. At the same hearing, Defendant admitted that he "knew what [he] was doing for all the years [he] failed to file and pay [his] taxes and [he] knew it was wrong." Id. at 356-57. These admissions and others like it seriously contradict Defendant's assertion of innocence. Nevertheless, even if the evidence showing that Defendant asserted his innocence weighs in favor of granting the motion to withdraw the plea, see Carr, 80 F.3d at 420 (indicating that all this factor requires is an assertion of innocence), the remaining factors weigh against granting the motion.

Defendant's delay in filing his motion to withdraw the plea--the third factor--weighs against allowing Defendant to withdraw. Defendant filed his motion approximately three months after entering his plea, which was only five days before sentencing. Delays of three months or more "weigh against granting a withdrawal motion because they often result in substantial prejudice to the government and may suggest manipulation by the defendant." Id. Further, " '[i]f the defendant has long delayed his withdrawal motion, and has had the full benefit of competent counsel at all times, the reasons given to support withdrawal must have considerab[le] . . . force.' " Id. (quoting United States v. Vidakovich, 911 F.2d 435, 439 (10th Cir. 1990)). Defendant's excuses do not have considerable force. He claims that his expert witnesses were unprepared to testify that he had no tax liability prior to the time he filed the motion and that he did not have enough money to pay the experts. Considering that Defendant was indicted in April 1997, that he did not enter his plea until September 1997, and that he did not file his motion to withdraw his plea until the end of December of that year, however, we think that he had ample time in which to obtain the advice of experts and arrange for their payment. In addition, as the district court noted, the attempt to change the plea came shortly after Defendant reviewed his proposed presentence report, which suggests that the timing may have been linked to the contents of the report rather than to any difficulties he experienced in obtaining the testimony of his experts. This timing, which implies that Defendant was dissatisfied with the sentence he received, reflects an improper motivation for attempting to withdraw the plea. See United States v. Gordon, 4 F.3d 1567, 1573 (10th Cir. 1993) (stating that a defendant's "dissatisfaction with the length of his sentence is an insufficient reason to withdraw a plea").

Because the record reveals no evidence indicating that Defendant entered the plea involuntarily or unknowingly, the sixth factor also does not support Defendant's argument. In describing why he was prepared to enter a plea at the initial plea hearing, Defendant testified that he was "well aware that the grief that this thing has caused [him] already for the last three years, coupled with the possibility of losing at trial is just overwhelming for [himself] and [his] family." Appellant's App. at 118. Defendant also repeatedly told the court that he understood the plea and that he realized he could proceed to trial if he did not wish to enter a guilty plea. See, e.g., id. at 118, 134. Additionally, Defendant indicated that he understood that the facts included in the statement he signed would be included in the presentence report and that they were true and correct. See id. at 11. In light of this evidence, we can only conclude that Defendant entered his plea knowingly and voluntarily.

Finally, although the district court limited its discussion to the first, third, and sixth factors from Carr, we conclude that the second, fourth, fifth, and seventh factors weigh against granting the motion. With respect to the second factor, prejudice to the government, we note that, if the district court had granted Defendant's motion, not only would the government be required to recommence trial preparation and reissue subpoenas but also it would need to locate evidence and witnesses which may have been lost with the passage of time. The fifth factor also does not support Defendant's position because he was represented by competent counsel throughout the proceedings. See infra note 4. In addition, the fourth and seventh factors, which involve inconvenience to the court and waste of judicial resources, weigh against allowing Defendant to withdraw his plea. Although "some waste of judicial resources from a plea withdrawal is inevitable," Carr, 80 F.3d at 421, the court likely would be inconvenienced by a trial at this stage.

Because six of the seven factors weigh against allowing Defendant to withdraw his plea, we conclude that the district court did not abuse its discretion in denying the motion to withdraw the plea.

II.

Defendant also takes issue with several aspects of his sentence, including the calculation of the base offense level; the two-point increase to the base offense level for the use of sophisticated means to evade discovery of the offense; the calculation of the criminal history category; and the failure of the district court to reduce his base offense level for acceptance of responsibility. We review the district court's interpretation of the sentencing guidelines de novo and its factual findings for clear error. See United States v. Pretty, 98 F.3d 1213, 1222 (10th Cir. 1996). ¹ "We give due deference to the district court's application of the Guidelines to the facts." United States v. Hankins, 127 F.3d 932, 934 (10th Cir. 1997); see 18 U.S.C. §3742(e).

Defendant first argues that the district court incorrectly found that he was liable for between $20,000 and $40,000 in 1990 income taxes, and that, as a result, the court erroneously calculated his base offense level at 10, rather than 6. The court's conclusion regarding the amount of the tax loss is a factual finding which we review only for clear error. See Pretty, 98 F.3d at 1222. In connection with the plea agreement, the Government and Defendant stipulated that Defendant's taxable income was $145,845.50. See Appellant's App. at 14-19. This amount was based on Defendant's report of $57,440.19 in income from Fuji Financial, one of the corporations over which Defendant exercised substantial control, and the $88,405.21 allegedly paid out of corporate accounts to cover Defendant's personal expenditures. See id. Moreover, by signing the statement in advance of the plea which he submitted to the district court, Defendant admitted to earning income in this amount. See id. at 15, 19. Based on the stipulated amount of income, the district court correctly concluded that Defendant was responsible for a tax loss of $38,601.74. See Addendum to Appellant's App. at 387. Because the district court simply applied the amount to which the parties stipulated, we do not think that the court committed clear error in determining that Defendant was responsible for a tax loss of between $20,000 and $40,000. ²

Although we review the factual findings underlying the court's calculation of the base offense level for clear error, see United States v. Taylor, 97 F.3d 1360, 1362 (10th Cir. 1996), as mentioned above, our review of the district court's interpretation of the Guidelines is de novo. See Pretty, 98 F.3d at 1222. Section 2T1.1 of the 1990 Guidelines sets the base offense level for a violation of 26 U.S.C. §7201 at the "[l]evel from §2T4.1 (Tax Table) corresponding to the tax loss." U.S.S.G. §2T1.1(a). Reference to §2T4.1 demonstrates that the base offense level for a tax loss of more than $20,000 but less than $40,000 is 10. See id. §2T4.1(E). We conclude that the district court correctly determined Defendant's base offense level as 10.

Defendant also argues that the district court improperly increased his base offense level by two points for the use of sophisticated means in concealing the offense. See id. §2T1.1(b)(2). First, he claims that, in connection with the plea agreement, the Government agreed not to recommend an increase for sophisticated concealment. Second, Defendant urges that any sophisticated means he employed were not for the purpose of "imped[ing] discovery of the nature or extent of the offense." Id. §2T1.1(b)(2). In response to Defendant's first argument, we note that, although the Government agreed not to advocate an increase for use of sophisticated means, it reserved the right to defend such an increase "should the probation office determine it to be applicable." See Appellant's App. at 10. In fact, the probation office did recommend an increase on this basis. See Addendum to Appellant's App. at 389. Thus, the Government's reference to sophisticated means at sentencing, see Appellant's App. at 352, did not violate the plea agreement.

Defendant's second argument is also unpersuasive. The 1990 Guidelines describe "sophisticated means" as "conduct that is more complex or demonstrates greater intricacy or planning than a routine tax-evasion case." U.S.S.G. §2T1.1, comment. (n.6). We think Defendant's conduct meets this description. As Defendant admitted at sentencing, some of his efforts involving his alleged income may have been intended to avoid creditors. See Appellant's App. at 344. The record further indicates that Defendant was less than fully candid with his probation officer in reporting his income. See Addendum to Appellant's App. at 389. Although Defendant seems to contend that this failure was due more to his lack of organization and inconsistent record-keeping than to an effort to impede investigatory efforts, we do not think the district court erred in finding otherwise. Moreover, the record indicates that Defendant routinely placed his income in a variety of corporate accounts and that he used corporate accounts to pay his personal expenses. See id.; see also Appellant's App. at 23. We do not think that the district court erred in concluding that Defendant's conduct amounted to the use of sophisticated means under §2T1.1(2)(b).

Defendant also argues that his criminal history category should have been IV rather than V as determined by the district court. Section 4A1.1(e) provides: "Add 2 points if the defendant committed the instant offense less than two years after release from imprisonment on a sentence counted under (a) or (b) . . . . If 2 points are added for item (d), add only 1 point for this item." U.S.S.G. §4A1.1(e). Because Defendant received two points for committing the instant offense while on parole pursuant to §4A1.1(d), the district court added only one point pursuant to §4A1.1(e). Defendant argues that this point should not have been added because he did not commit any part of the instant offense within two years of imprisonment. Specifically, he claims that the conduct related to the instant offense did not begin until August 15, 1991, the date on which he was required to file his 1990 tax return, which was more than two years after his release from imprisonment on June 30, 1989.

We agree with the district court that Defendant began committing conduct relating to the instant offense at least as early as September 1990. The record supports this conclusion. First, Defendant began making personal expenditures out of corporate accounts as early as September 1990. See Addendum to Appellant's App. at 384. Second, Defendant sold the Nordic mining leases in September of 1990, at which time he placed the money into various corporate entities. Third, Defendant failed to report the income he earned from the sale of the mining leases to his probation officer. Because this conduct began within two years of June 30, 1989, the last date on which Defendant was imprisoned, the court correctly added one criminal history point to Defendant's score, and it correctly calculated the criminal history category at V. See U.S.S.G. Ch. 5, Pt. A.

Finally, Defendant argues that the district court erred by failing to apply a two-point deduction to his base offense level for acceptance of responsibility. Determination of acceptance of responsibility is a question of fact which we review for clear error. See United States v. Mitchell, 113 F.3d 1528, 1533 (10th Cir. 1997). Because "[t]he sentencing judge is in a unique position to evaluate a defendant's acceptance of responsibility . . ., the determination of the sentencing judge is entitled to great deference on review." U.S.S.G. §3E1.1, comment. (n.5). According to §3E1.1 of the Guidelines, a two-point reduction in the base offense level is warranted when "the defendant clearly demonstrates a recognition and affirmative acceptance of personal responsibility for his criminal conduct." Id. §3E1.1(a). In spite of Defendant's admission that he failed to report most of the income he earned during 1990 and his admission that he knew his actions were wrong, see Appellant's App. at 356-57, he has denied owing any taxes on this income. This denial is inconsistent with accepting responsibility for the offense to which he pled guilty, i.e., attempted tax evasion. Moreover, we do not think that Defendant's admissions of wrongdoing necessarily constitute an acceptance of responsibility. See United States v. McMahon, 91 F.3d 1394, 1397 (10th Cir. 1996) ("A defendant is not entitled to an adjustment for acceptance of responsibility merely because he admits to wrongdoing."). When we consider Defendant's continued insistence that he does not owe taxes for 1990, his incomplete record-keeping with respect to his businesses, see Appellant's App. at 343, the complicated relationships between his corporations, his use of corporate funds for personal expenditures, and his failure to file income tax returns for many years prior to 1990, see id. at 343, 350, it seems apparent that Defendant has not "clearly demonstrate[d] a recognition and affirmative acceptance of personal responsibility for his criminal conduct." U.S.S.G. §3E1.1(a). We conclude that the district court did not commit clear error in finding that a downward adjustment on the basis of acceptance of responsibility was unwarranted.

We AFFIRM the dismissal of Defendant's motion to withdraw his guilty plea and his sentence. ³

^* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.

¹ Although the district court did not indicate which version of the United States Sentencing Guidelines it applied, because the presentence report applied the 1990 version of the Guidelines, see Addendum to Appellant's App. at 388, we assume that the court also applied that version. The district court was correct in doing so. Although the general rule is that a sentencing court applies the version of the Guidelines in effect at the time of sentencing, if the later version imposes harsher punishment and thereby implicates the Ex Post Facto Clause, the court applies the Guidelines in effect at the time of the defendant's offense. See United States v. Nichols, 169 F.3d 1255, 1270 n.3 (10th Cir. 1999); United States v. Svacina, 137 F.3d 1179, 1186 (10th Cir. 1998). Under the Guidelines in effect at the time of sentencing, March 17, 1998, Defendant's base offense level would have been 12, rather than 10, for a tax loss of $38,601.74. Compare U.S.S.G. §2T1.1 & 2T4.1 (1997) with U.S.S.G. §2T1.1 & 2T4.1 (1990). Accordingly, for purposes of this appeal, we refer only to the 1990 Guidelines.

² We note that the Government could have sought to hold Defendant responsible for a much larger amount. Presumably as part of the plea agreement, the Government did not seek to include as taxable income the $494,520 Defendant received for the sale of the mining leases to Crown Resources. See Appellant's App. at 348-49. Although Defendant disputed whether there was an overlap between this sum and the $88,405.21 in personal expenditures, and although he claims on appeal that he did not owe taxes on this amount at all, we believe that Defendant received a lower sentence than he might have otherwise.

³ Defendant submitted two additional motions in conjunction with this appeal. In the first motion, he moved pro se to file a supplemental brief in which he asserted that the district court violated Rules 11(c) and 11(f) of the Federal Rules of Criminal Procedure by failing to ensure that he understood the nature of the charge against him and by failing to establish an adequate factual basis for the plea, respectively. Defendant also claimed that he received ineffective assistance of counsel on appeal because his counsel failed to raise the Rule 11 arguments in the opening brief. We have reviewed the record, and we conclude that Defendant's Rule 11 arguments are without merit. Additionally, while we note that claims of ineffective assistance of counsel should normally be raised in collateral proceedings, see United States v. Galloway, 56 F.3d 1239, 1240 (10th Cir. 1995) (en banc), in this case we may review the claim because Defendant complains only about the assistance he received on appeal. See United States v. Boigegrain, 155 F.3d 1181, 1186 (10th Cir. 1998) (noting that this court may hear ineffective assistance claims in rare instances when they are fully developed on the record). In light of our conclusion that Defendant has failed to state a claim based on Rule 11, we hold that Defendant has failed to demonstrate that he received ineffective assistance of counsel on appeal. See Strickland v. Washington, 466 U.S. 668, 687 (1984) (articulating showing required for establishing claim of ineffective assistance of counsel). The motion to file a supplemental brief is denied.

In his second additional motion, Defendant moved to supplement the record with an IRS document that was not before the district court. Because the document does not definitively establish Defendant's tax liability for 1990 or the IRS's position with respect to his liability, and because it does not affect our holdings that Defendant's sentence and the district court's denial of Defendant's motion to withdraw his plea rested on sufficient factual bases, we deny the motion to supplement the record.

 

 

[99-1 USTC ¶50,153] United States of America , Plaintiff-Appellee v. Melvin Lloyd Richards, Defendant-Appellant

(CA-9), U.S. Court of Appeals, 9th Circuit, 98-50042, 9/14/98, Affirming an unreported District Court decision

[Code Sec. 7201 ]

Penalties, criminal: Tax evasion: Withdrawal of guilty plea: Admissions of underreporting: Evidence of fraud.--An individual's motion to withdraw his guilty plea to tax evasion was denied because he admitted that he underreported his income. Moreover, his claim of innocence was undermined by evidence of his involvement in a fraud scheme.

[Code Sec. 7201 ]

Penalties, criminal: Tax evasion: Sentencing Guidelines: Downward departure.--An individual's sentence tax for evasion was affirmed. Since the taxpayer denied that he possessed the requisite intent to commit the crime, he was not entitled to a downward departure for acceptance of responsibility under the U.S. Sentencing Guidelines. Moreover, the sentence was properly enhanced because the taxpayer used sophisticated means to conceal his tax evasion and he failed to report proceeds from his illegal activities in excess of $10,000. Finally, the district court properly counted the individual's misdemeanor conviction in his criminal history calculation. The fact that his probation was unsupervised was immaterial.

Before: FLETCHER, BOOCHEVER and THOMPSON, Circuit Judges.

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

MEMORANDUM ^*

Melvin Richards appeals the district court's denial of his motion to withdraw his plea of guilty to one count of tax evasion which was entered pursuant to an agreement with the Government. Richards also appeals his sentence. We affirm.

Because the parties are familiar with the factual and procedural history of this case, we will not recount it here except as necessary to clarify our decision.

I. Withdrawal of the Guilty Plea

Under United States v. Hyde, -- U.S. --, 117 S.Ct. 1630, 1631, L.Ed.2d 935 (1997), and Federal Rule of Criminal Procedure 32(e), Richards must demonstrate a "fair and just" reason for withdrawal of his guilty plea. While a showing of actual innocence would certainly be a "fair and just" reason, Richards has not met this burden.

Richards admitted that he under-reported his income and plead guilty to a charge of tax evasion. The statements recanted by Cahill after he was sentenced dealt with Richards' involvement in the fraud scheme, not tax evasion. Furthermore, ample documentary evidence in the Government's case and other witnesses who would testify to Richards' involvement in the fraud scheme undermine his showing of actual innocence. The district court did not abuse its discretion in denying Richards' motion to withdraw his guilty plea.

II. Sentencing Issues

A. Base Level Sentence

Where a criminal defendant alleges a factual inaccuracy in the PSR, the district court is required either to "make a finding as to the accuracy of the challenged factual finding or indicate that the court is not taking it into consideration." United States v. Garfield, 987 F.2d 1424, 1428 (9th Cir. 1993) (citing Fed. R. Crim. Proc. 32(c)(3)(D)). The judge expressly adopted the probation officer's resolution of the disputed facts in the PSR and addendum. The factual finding requirement of Rule 32 was thus satisfied. A hearing was not required under Rule 32 because Richards had multiple opportunities to rebut the disputed facts in the PSR, see United States v. Stein, 127 F.3d 777, 780-81 (9th Cir. 1997), and after conducting a lengthy sentencing hearing, the district court determined that a further hearing was unnecessary. There was no clear error.

B. Acceptance of Responsibility

Where a criminal defendant denies that he possessed the requisite intent to commit the crime charged, he is not entitled to a downward departure for acceptance of responsibility under U.S.S.G. section 3E1.1. See, e.g., United States v. Burroughs, 36 F.3d 875, 883 (9th Cir. 1994). Richards moved to withdraw his guilty plea on the grounds that he did not willfully engage in tax evasion, thereby maintaining his innocence of the charge. The district court did not clearly err by refusing to grant a downward departure.

C. Sophisticated Means to Impede Discovery

Under U.S.S.G. section 2T1.1(b)(2), a two-point upward adjustment may be imposed if "sophisticated means were used to impede discovery of the nature and extent of the offense." The PSR discussed, and the district court made a factual finding, that Richards had used sophisticated means to conceal his tax evasion. There was no clear error.

D. Income Exceeding $10,000 From Criminal Activity

U.S.S.G. section 2T1.1(b)(1) provides for a two-point upward adjustment where "the defendant fails to report . . . income exceeding $10,000 in any year from criminal activity." The district court expressly adopted the probation officer's finding that Richards' proceeds from illegal activity in 1992 exceed $10,000. No further factual findings were necessary. See, e.g., United States v. McClain, 30 F.3d 1172, 1174 (9th Cir. 1994). The district court did not clearly err by imposing the two-point upward adjustment.

E. Calculation of Criminal History

The district court properly counted Richards' 1990 misdemeanor trespass conviction, for which he received three years probation, in his criminal history calculation under U.S.S.G. sections 4A1.2(c)(1)-(d). The fact that the probation was unsupervised is immaterial with respect to section 4A1.1(d). United States v. Sanchez, 914 F.2d 1355, 1363 (9th Cir. 1990).

AFFIRMED

^* This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir. R. 36-3.

 

 

[81-2 USTC ¶9807] United States of America v. Rolla Skidmore, Defendant

U. S. District Court, No. Dist. W. Va. , No. 79-00001-E(H), 2/11/80

[Code Sec. 7203]

Criminal penalties: Plea bargain: Post-sentence motion to withdraw guilty plea.--A belief by a pro se defendant that he would avoid incarceration by entering into a plea bargain with a U. S. Attorney was not sufficient to set aside his guilty plea when he was subsequently disappointed. No manifest injustice had been shown: (1) regardless of the representation upon which he claimed reliance, he stated under oath that no one had indicated to him that he would receive any specific sentence and he had acknowledged earlier that the imposition of sentence would be solely determined by the court, (2) his failure to obtain counsel, after receiving admonitions from the court, (a) was due to his voluntary choice and (b) was not prejudicial as the plea bargain would have been the same even if he had been represented, (3) he was not mentally defective at the time of the entry of the plea, and (4) he had never, before the instant motion, asserted his innocence.

William D. Wilmouth, William A. Kolibash, Assistant United States Attorneys, Wheeling , W. Va. 26003, for plaintiff. Rolla Skidmore, 309 Oakview Terrace, Repley, W. Va. 25271, pro se, Joseph R. Goodwin, Richard E. Rowe, Goodwin & Goodwin, 500 Church Street, Repley, W. Va. 25271, for defendant.

Order

HADEN II, District Judge:

On February 1, 1980, came the United States of America by William A. Kolibash, Assistant United States Attorney for the Northern District of West Virginia, and also came the defendant, Rolla Skidmore, in person and by his attorneys, Joseph R. Goodwin and Richard E. Rowe, for hearing upon defendant's motion to set aside his plea of guilty pursuant to Rule 32(d) of the Federal Rules of Criminal Procedure.

Rule 32(d) states as follows:

"Withdrawal of Plea of Guilty. A motion to withdraw a plea of guilty or nolo contendere may be made only before sentence is imposed or imposition of sentence is suspended; but to correct manifest injustice the Court after sentence may set aside the judgment of conviction and permit the Defendant to withdraw his plea."

Sentence was passed upon the defendant in this case on March 22, 1979, and the judgment and commitment order was entered March 28, 1979.

After reviewing the record in this case, the motion of the defendant, and evaluating the testimony of defendant Skidmore and Assistant United States Attorney William D. Wilmoth given at the hearing and the arguments of counsel, the Court is of the opinion that there are no reasons demonstrated which would lead this Court to find that manifest injustice would result if the defendant's conviction is not set aside and his plea of guilty withdrawn. But cf. United States v. Lias, 173 F. 2d 685 (4th Cir. 1949).

The factors to be considered by the Court in making its determination are (1) the Court's Rule 11 inquiry; (2) the quality of representation received by Skidmore; (3) his mental condition at the time the guilty plea was entered; and (4) whether he had asserted his innocence. United States v. Carden, 599 F. 2d 1320, 1322 (4th Cir. 1979); United States v. Strauss, 563 F. 2d 127, 131 (4th Cir. 1977).

Applying these factors to this case, the Court finds that Rule 11 of the Federal Rules of Criminal Procedure was complied with in all respects, and that the defendant's plea of guilty was knowingly and voluntarily made with a full understanding of the entire circumstances. All of this will be more adequately reflected in the record of defendant's guilty plea.

[Claimed Reliance on U. S. Attorney]

The defendant specifically claims that the Assistant United States Attorney advised him that the sentencing judge "who would be handling the case had never sentenced anyone to prison for failure to file," and the defendant "believed that he would not be sentenced to prison for a guilty plea to these charges, and that he would be given a fine for the guilty plea" is insufficient to demonstrate manifest injustice in view of the record in this matter. The defendant was addressed specifically on more than one occasion to the fact that he was subject to certain maximum penalties, and that the imposition of sentence would be solely the determination of the Court. The defendant acknowledged this and under oath stated that no one had indicated to him that he would receive any specific sentence. See generally, Blackledge v. Allison, 431 U. S. 63 (1977). Thus, as long as no one made a specific promise to the defendant concerning his sentence, his belief regarding final sentence is irrelevant. See, e.g., U. S. v. Rich, 516 F. 2d 861 (2nd Cir. 1975); U. S. v. Futeral, 539 F. 2d 329 (4th Cir. 1975) and U. S. v. Battle, 467 F. 2d 569 (5th Cir. 1972).

[Plea Bargain by Pro Se Defendant]

Although the defendant appeared without counsel throughout these proceedings, such decision was his own, and was entered into knowingly and voluntarily after repeated monitions by the Court that the defendant retain counsel. See Faretta v. California , 422 U. S. 806 (1975). Moreover, the plea bargain which defendant entered into was in accordance with the policy set by the Tax Division of the Department of Justice, as the testimony of Mr. Wilmoth showed, and would have been the same even if defendant was represented by counsel. Therefore, the Court finds no manifest injustice resulting from defendant's appearance without counsel.

Based upon the Court's questioning of defendant Skidmore and his observations of Skidmore at the time of his plea, the Court finds no defects in the mental condition of the defendant at the time of his guilty plea.

[No Prior Assertion of Innocence]

Finally, the Court finds that defendant Skidmore up to and including this hearing has never asserted his innocence, but, to the contrary, has asserted his guilt and willingness to have this case resolved by a plea of guilty.

For all the reasons set forth above, it is the ORDER of this Court that the Defendant's Motion Pursuant to Rule 32(d) to Set Aside Judgment of Conviction and Permit Defendant to Withdraw His Guilty Plea is DENIED.

 

 

[79-1 USTC ¶9238] United States of America , Appellee v. Ernest R. Brown, Appellant

(CA-8), U. S. Court of Appeals, 8th Circuit, No. 78-1812, 593 F2d 351, 3/5/79, Affirming unreported District Court decision

[Code Sec. 7203]

Criminal penalties: Withdrawl of guilty plea.--The taxpayer's post-sentence motion to withdraw his guilty plea, denied by the District Court, was denied by the Court of Appeals. The Court found that the taxpayer's contention that he was misled by an IRS agent into believing he would not be sentenced to prison was properly determined by the District Court to be unsupported by the evidence.

W. H. Dillahunty, United States Attorney, Kenneth F. Stoll, Assistant United States Attorney, 327 U. S. Courthouse, Little Rock, Arkansas 72203, for appellee. James W. Gallman, One McIlroy Plaza, Fayetteville, Arkansas, John William Murphy, Murphy & Carlisle, 118 W. Center, Fayetteville, Arkansas, for appellant.

Before BRIGHT, STEPHENSON, and MCMILLIAN, Circuit Judges.

PER CURIAM:

Ernest R. Brown appeals from an order of the district court ¹ denying his motion to withdraw his plea of guilty to two charges of failure to file income tax returns in violation of 26 U. S. C. §7203 (1976). On appeal, Brown contends that the district court abused its discretion in denying his motion to withdrawn his plea. We affirm.

On May 23, 1978, the Government filed a two-count information charging Brown with failure to file income tax returns for the years 1972 and 1973. On June 13, 1978, Brown appeared before the district court, waived his right to counsel, and pled guilty to both counts. On July 12, 1978, the district court suspended imposition of sentence on count I, placing Brown on probation for one year, but it sentenced Brown to ninety days' imprisonment on count II.

After the sentencing but prior to his imprisonment, Brown retained counsel and filed a motion on September 27, 1978, to withdraw his guilty plea. As grounds for his motion, Brown asserted that, at the time of his plea, he did not fully understand the nature of the charges against him and that he was misled by the statement of an Internal Revenue Service (IRS) agent into believing that he would not be sentenced to prison if he pled guilty.

At a hearing on Brown's motion to withdraw his guilty plea, on October 18, 1978, Brown testified that his sole income for 1972-73 came from the 1972 sale of a farm, with payments to be received in installments over the next five years. Brown stated that at the time he believed that he need not report income from the installment sale until receipt of the final payment. He further testified that his guilty plea was motivated in part by the statements of IRS agent William Cosgrove, who told him that, in similar cases on which he had worked, the defendants did not receive prison sentences. In rebuttal, the Government introduced Cosgrove's testimony, supported by a memorandum prepared by Cosgrove soon after his conversation with Brown. The relevant portion of that memorandum reads:

He [Brown] then asked if I thought he would have to go to jail. I told him it would depend on intelligence [the Criminal Investigation Division of the IRS], regional counsel, the U. S. Attorney, the judge and the jury. I explained the prosecution would have to be followed through to all of these parties, and that he would have to be convicted and then the Judge would determine the sentence. He asked if I had any other experience with this type of case. I told him that I had had two other cases which were prosecuted and both resulted in convictions with suspended sentences.

At the close of the hearing, the district court found that at the time of his guilty plea Brown understood the nature of the charges against him. The court also reaffirmed its conclusion that there was a strong factual basis for the plea. ² Further, crediting Cosgrove's account of his conversation with Brown, the court found that Cosgrove had not misled Brown, but rather had answered his questions truthfully. The court concluded that Cosgrove's accurate account of his two prior cases leading to prosecution did not amount to an assurance to Brown that he would not receive a sentence of incarceration, in light of Cosgrove's clear statement that the judge would determine Brown's sentence. Therefore, the district court denied Brown's motion to withdraw his guilty plea.

Under Fed. R. Crim. P. 32(d) a post-sentence motion to withdraw a plea of guilty is permitted only to "correct manifest injustice." In Meyer v. United States, 424 F. 2d 1181, 1191 (8th Cir.), cert. denied, 400 U. S. 853 (1970), this court stated:

The burden of proof of manifest injustice is on the petitioner and the determination of this issue is within the sound discretion of the district court and will not be interfered with on appeal in the absence of abuse of discretion.

Here the evidence supports the district court's findings that Brown understood the nature of the charges against him, that there was a strong factual basis for the guilty plea and that Cosgrove made no misrepresentation concerning Brown's potential sentence. In light of those findings, the district court did not abuse its discretion in denying Brown's motion to withdraw his guilty plea.

Accordingly, we affirm the order of the district court.

¹ The Honorable G. Thomas Eisele, Chief Judge , United States District Court for the Eastern District of Arkansas.

² At the time of his guilty plea, Brown accepted the Government's statement that, from the sale of the farm plus the sale of some livestock, he received income of $33,942 in 1972 and $35,820 in 1973. He also acknowledged that he had known of his obligation to file income tax returns for those years.

 

 

[89-1 USTC ¶9291] United States of America , Plaintiff-Appellee v. Thomas A. Owen and Jacqueline L. Owen, Defendants-Appellants

(CA-11), U.S. Court of Appeals, 11th Circuit, 87-3793, Non-Argument Calendar, 10/28/88, Affirming an unreported District Court decision

[Code Secs. 7201 and 7206 ; Fed. R. Crim. P. 11 and 32(c)(3)(D) ]

Tax fraud: Criminal liability: Guilty plea: Evidentiary support.--A husband and wife who entered guilty pleas to various counts of tax fraud unsuccessfully contended that there was insufficient evidence to establish the element of willfulness necessary to support the pleas. A review of the record revealed ample evidence from which the trial judge could have found the requisite intent to commit the offenses in question. Consequently, the trial court judge did not abuse his discretion in accepting the pleas.

William S. Rose, Jr., Assistant Attorney General, Gail Brodfuehrer, Rob ert E. Lindsay, Gary R. Allen, Department of Justice, Washington, D.C. 20530, for plaintiff-appellee. Rob ert Augustus Harper, Jr., 131 N. Gadsden St. , Tallahassee , Fla. 32302-0132 , for defendants-appellants.

Before FAY, VANCE and COX, Circuit Judges.

Per Curiam"

EC: Defendants Thomas and Jacqueline Owen pled guilty to various counts of tax fraud and were sentenced accordingly by the federal district court. Now they appeal their sentences. First, they allege that the court violated Fed.R.Crim.P. 11 by accepting their guilty pleas although there was an insufficient factual basis for those pleas. Second, they contend that the court violated Fed.R.Crim.P. 32(c)(3)(D) during the sentencing hearing. We affirm.

The government was prepared to establish the following:

In January of 1976, defendants opened a Slender World Weight loss clinic in Rossville , Georgia . Their partner in this venture was Jan Lane, the owner of the Slender World chain. The business was successful, and the defendants, with Lane as their partner, subsequently opened four additional Slender World clinics.

During the years in question, 1976-1981, the clinics generated a substantial profit. In 1976, however, Thomas Owen informed his accountant, Ronnie Clark, that he did not wish to pay any income taxes on these profits. Clark helped Owen set up a shell corporation, Weigh Less for Life ("Weigh Less"), which then received a great percentage of the Owenses' partnership profits. Although the Owenses used the money deposited in the accounts of the shell corporations to pay for their home and for other personal items, they did not report the money as income in their tax statements. Thus, over the years, there was a substantial disparity between the amount of income reported and the amount actually received by the Owenses.

In 1987, the United States government charged the defendants with conspiracy to defraud the United States (Count 1), attempting to evade income taxes (Counts 2 and 4), and making and subscribing a false tax form (Counts 3 and 5). The defendants entered not guilty pleas on all counts at their arraignment on June 18, 1987. On September 4, however, Thomas Owen changed his plea to guilty on Counts 1 and 4, and Jacqueline Owen changed her plea to guilty on Count 5. On November 6, 1987, the district court held a sentencing hearing. The court sentenced Jacqueline Owen to three years imprisonment, but immediately suspended execution of the sentence and imposed a five year probationary period. In addition, the court fined her $50,000 and ordered her to serve 500 hours of community service. Finally, the court required Jacqueline Owen to keep accurate tax records and to inform the probation office of all of her business activities. Thomas Owen received a four year jail sentence and a $10,000 fine on Count One. The court sentenced him to five years probation ¹ and fined him $100,000 and the cost of prosecution on Count 4. After making a series of other motions, the defendants' attorney filed this appeal.

Rule 11 Claim

The defendants argue that their pleas should have been rejected because they have no factual basis. We find that their argument has no merit.

Rule 11(f) of the Federal Rules of Criminal Procedure requires that a court "satisfy itself that there is a factual basis for [a guilty] plea" before accepting that plea and entering judgment on it. The purpose of this rule is to help ensure that the plea agreement process was a fair one. Santobello v. New York , 404 U.S. 257, 261, 92 S.Ct. 495, 498, 30 L.Ed.2d 427 (1971). In determining whether there was a sufficient factual basis for the guilty plea, we must consider whether the trial judge was subjectively satisfied with the basis for the plea. Consequently, we will not overturn a judge's decision to accept a guilty plea unless there has been an abuse of discretion. United States v. Ammirato, 670 F.2d 552, 555 (5th Cir. Unit B 1982). ²

The defendants' major contention is that they lacked wilfulness, an element of the crimes at issue. However, there was ample evidence from which the trial judge could have found that the Owenses had the requisite intent to commit the offenses in question. The evidence shows that the Owenses had set up a shell corporation, Weigh Less, into which they deposited a good deal of their profits from Slender World; that they used Weigh Less money to purchase personal items; and that they paid no taxes on the Weigh Less money. Mrs. Owens, as secretary of Weigh Less, signed the checks that were used to purchase these personal items. The government also had materials showing that Dr. Owens bragged about the small amount of money he had to pay each year in taxes. The deposition of Ronnie Clark, the defendants' accountant, indicates that Dr. Owens understood that he was hiding the profits from Slender World from his creditors, including the IRS. Finally, when they entered their guilty pleas, the Owenses conceded that the information contained in the charges were "essentially correct."

To try to show that there is no factual basis for the plea, the defendants present evidence which throws doubt on Clark 's credibility. Further, they allege that the defendants did not understand that their actions were illegal. We assume for the sake of their argument that a reasonable fact finder might accept their arguments and, after a full trial, rule in their behalf. There is no requirement, however, that there be uncontroverted evidence of guilt. Instead, there must be evidence from which a court could reasonably find that the defendant was guilty--a factual basis for the plea. There is sufficient evidence here to satisfy this standard; thus, it was not an abuse of discretion for the trial judge to accept the guilty plea.

Rule 32(c)(3)(D) Claim

The defendants also challenge the sentencing process. They argue that the trial judge did not comply with Rule 32(c)(3)(D) of the Federal Rules of Criminal Procedure. That rule exists to protect a defendant's right to a fair sentencing procedure, and to "provide a clear record of the disposition and resolution of controverted facts in the presentence report." United States v. Eschweiler , 782 F.2d 1385, 1387 (7th Cir. 1986). Whenever the defendant alleges that there is a factual inaccuracy in the presentence report, the trial judge must either make a finding regarding the inaccuracy or make a finding that the particular fact at issue will not be considered in the sentencing process. United States v. Rogers, 848 F.2d 166, 169 (11th Cir. 1988) (per curiam). A defendant triggers this rule only by challenging statements of fact that are in the presentence report. United States v. Aleman, 832 F.2d 142, 145 (11th Cir. 1987). Vague assertions of inaccuracies in the report are insufficient; instead, the defendant must make clear and focused objections to specific factual allegations made in the report. Id.

The defendants' Rule 32(c)(3)(D) challenge essentially reiterates their Rule 11 claim in the context of the sentencing phase. Rule 32(c)(3)(D), however, is designed to deal with factual inconsistencies made in the presentence report and used by the judge in determining what sentence to impose. It is not intended to apply to the guilt/innocence determination. Once a court finds that there is a sufficient factual basis for the plea, it need not make the same findings again at the sentencing phase. Therefore, Rule 32(c)(3)(D) was not triggered by the defendants' claim that they were not guilty of the crimes. ³

Conclusion

We affirm the sentences in all respects.

AFFIRMED.

¹ The trial judge sentenced him to five years in jail, but immediately suspended the sentence.

² Decisions of Unit B of the former Fifth Circuit are binding precedent in this circuit. Stein v. Reynolds Securities, Inc., 667 F.2d 33, 34 (11th Cir. 1982).

In their initial briefs, the defendants allege that they pled guilty despite their innocence because they believed that they would be found guilty after a full trial. In their reply brief, they make a contrary assertion.

Their initial contention is analogous to that of the defendant in North Carolina v. Alford, 400 U.S. 25, 91 S.Ct. 160 27 L.Ed.2d 162 (1970). In Alford, the defendant had been accused of first degree murder and faced the possibility of the death sentence. Therefore, because otherwise "they would gas me for [first degree murder]," id. at 28 n. 2, 91 S.Ct. at 163, n. 2, Alford pled guilty to second degree murder. All the while, he declared that he was innocent. Later, he challenged the trial judge's conduct in accepting the plea under those circumstances.

The Supreme Court found no significant difference between Alford's situation and that of a defendant who pleads nolo contendere, waiving trial and accepting a sentence without expressly admitting his guilt. The Supreme Court found that a trial judge may accept either type of plea so long as certain safeguards exist to guarantee that the plea agreement process was a fair one. The Supreme Court found that the safeguards had been adhered to in Alford's case and upheld the plea.

Alford stands for the proposition that the precautions set forth in case law and in legislation are sufficient to protect a defendant who enters a guilty plea, regardless of whether that defendant admits to committing the crimes. Even if the Owenses did not declare that they were innocent when they entered their pleas, the court had to satisfy itself that the plea was voluntary and knowing, and that it had a sufficient factual basis. We find that the court fulfilled its obligations in this respect. Therefore, it is not necessary to consider whether defendants articulated their protestations of innocence when entering their guilty pleas or later in the judicial process.

³ The other asserted inconsistencies were either alleged so vaguely that they do not warrant discussion, or were adequately addressed by the trial judge at the sentencing proceeding.

 

 

[73-2 USTC ¶9603] United States of America , Appellee v. Earl B. Benson, Appellant

(CA-8), U. S. Court of Appeals, 8th Circuit, No. 72-1483, 11/14/72, Aff'g unreported District Court decision

[Code Sec. 7201]

Attempt to evade or defeat tax: Guilty plea: Motion to withdraw: Denial.--Trial Court's denial of taxpayer's motion to withdraw his plea of guilty to willfully and knowingly attempting to evade and defeat income taxes was not an abuse of discretion.

Rob ert G. Renner, United States Attorney, Minneapolis , Minn. , for appellee. Helen Taylor, Apt. 1 , 110 Virginia Ave. , St. Paul , Minn. , for appellant.

Before MATTHES, Chief Judge, HEANEY and STEPHENSON, Circuit Judges.

PER CURIAM:

This is a direct criminal appeal from a conviction and judgment entered by Judge Neville on a plea of guilty to Count II of an indictment which charges that appellant did willfully and knowingly attempt to evade and defeat income taxes in violation of 26 U. S. C. §7201.

Immediately prior to sentencing appellant moved to withdraw his plea of guilty. Judge Neville denied the motion.

Under date of October 14, 1972, appellant wrote to this Court stating that he did not intend to employ legal services in this appeal, and inferentially requested a fairminded investigator to visit his home and question his neighbors in order to appraise his capacity, or lack thereof, to keep adequate bookkeeping records. ¹ He inists he plead guilty only upon the insistence of his retained counsel.

We have considered this appeal on its merits and in so doing have made a careful study of the entire record, including the transcript of the proceedings at the time appellant withdrew his plea of not guilty and entered a plea of guilty, and the later proceedings during which appellant attempted to withdraw his plea of guilty.

The record discloses that at the time this case was called for trial ² appellant through his retained counsel indicated that he desired to withdraw his plea of not guilty to Count II of the indictment and enter a plea of guilty to that count. Appellant was charged in a three-count indictment. The trial court then directed that appellant be sworn and questioned with respect to his plea. The Assistant United States Attorney questioned appellant at great length with respect to his knowledge as to the possible penalties; the voluntariness of his plea, the waiver of his right to jury trial, and his right to cross examine all Government witnesses. Counsel also summarized the evidence it would produce with respect to appellant's guilt. Thereafter the trial court addressed appellant personally with respect to the voluntariness of his plea, his understanding of the nature of the charge, and the consequences of his plea, in full compliance with Rule 11, Federal Rules of Criminal Procedure. In addition, the record discloses, and the Court found, that there was a factual basis for the plea.

In United States v. Woosley, 440 F. 2d 1280 at 1281 (CA8 1971) we said: "Rule 11 proceedings are not an exercise in futility. The plea of guilty is a solemn act not to be disregarded because of belated misgivings about the wisdom of the same." We are abundantly satisfied that the trial court's denial of appellant's motion to withdraw his plea of guilty was not an abuse of discretion. United States v. Rawlins, 440 F. 2d 1043, 1045-46 (CA8 1971).

Affirmed.

¹ This matter originally came before our admin istrative panel for possible appointment on our own motion of counsel to assist appellant in the prosecution of his appeal. Since it appeared that the appeal was entirely without merit, it was referred to a panel of our Court for disposition. See 28 U. S. C. Local Rules 2(c) and 9 (CA 8 1971).

² The jury panel was available, the Government had approximately 85 witnesses under subpoena.

 

 

[72-2 USTC ¶9571] United States of America , Plaintiff-Appellee v. Rob ert H. Slatko, Defendant-Appellant

(CA-5), U. S. Court of Appeals, 5th, Circuit, No. 71-3437, 462 F2d 1169, 7/20/72, Aff'g an unreported District Court decision

[Code Secs. 7201, 7203 and 7206]

Plea bargaining: Effect of felony indictments brought after taxpayer refused to plead guilty to misdemeanors: Evidence of coercion.--The District Court's refusal to allow the taxpayer to withdraw his pleas of guilty and nolo contendere to misdemeanors, and its refusal to enjoin the Government from prosecuting the felony counts which were dropped when the misdemeanor pleas were entered, was not clearly erroneous. The taxpayer's failure to plead guilty to the misdemeanors did not prompt the later bringing of felony charges which resulted in plea bargaining.

Rob ert W. Rust, United States Attorney, Charles O. Farrar, Jr., Assistant United States Attorney, Miami, Fla., Sylvia S. Ellison, Department of Labor, Washington, D. C., for plaintiff-appellee. Rob ert H. Slatko, 10 W. 66th St. , New York , N. Y., for defendant-appellant.

Before, RIVES, BELL and MORGAN, Circuit Judges.

RIVES, Circuit Judge:

Once again we are asked to review the propriety and constitutionality of a plea bargaining agreement. In 1964-65 the Government undertook an investigation of Rob ert Slatko, an attorney, for possible violations of income tax laws. Slatko had not filed timely tax returns for those two years. At the close of the investigation Slatko did file returns for 1964 and 1965. Nonetheless, the Government indicted him on three misdemeanor charges (under 26 U. S. C. §7203) for willful failure to file timely returns for the years 1963, 1964, and 1965. Slatko pleaded not guilty to all three counts. He contended that he had filed a timely return for 1963 (but that the Government had apparently lost it) and that, although his returns for 1964 and 1965 were admittedly late, the lack of timeliness was not willful.

[Plea Bargaining]

After several continuances and before trial, the Government indicted Slatko on four felony counts--filing perjured statements in connection with his 1964 and 1965 returns, and evading taxes for the same two years. 26 U. S. C. §§ 7201, 7206. Slatko again entered pleas of not guilty. On December 29, 1970, the felony charges and the misdemeanor counts were consolidated for trial. Thereafter Slatko approached the Government, offering to plead guilty to two of the misdemeanor counts (those relating to the years 1964 and 1965) if prosecution on all other counts was dropped. The Government refused, apparently because general policy in such cases would permit a plea bargain only if Slatko entered a plea of guilty to at least one of the felony counts. Nevertheless, on June 9, 1971, after the first day of trial, the Government changed its position and agreed to drop the felony charges in exchange for a nolo contendere plea to the 1963 misdemeanor charge and for guilty pleas to the 1964 and 1965 misdemeanor charges.

Slatko accepted the arrangement, and after a full hearing in accordance with Rule 11, Fed. R. Crim. P., the district judge accepted his pleas. Then, in October of 1971, the Florida Bar instituted a mandatory grievance proceeding against Slatko on account of his criminal conviction. Jose Martinez, who was the chief prosecuting attorney for the Government at Slatko's trial, testified as to the facts and circumstances involved in Slatko's case. Thereafter, Slatko asked the district court to allow him to withdraw his pleas on the misdemeanor charges. Moreover, Slatko prayed for an injunction against prosecution on the felony counts. His theory for relief was two pronged: (1) Mr. Martinez, in his testimony to the Bar committee, revealed that Slatko's "Fifth Amendment right not to plead guilty [on the misdemeanor counts] did intrude into the mix of considerations underlying the prosecutorial decision to bring felony charges against him." (Appellant's Reply Brief at 2.) As such, said Slatko, the plea bargaining process was constitutionally infected. (2) Regardless of the Government's motive in bringing the felony charges, the effect of such action was to coerce a plea of guilty on the misdemeanor counts.

After a full hearing, at which Martinez again testified, the district court denied relief. In his oral findings the district judge first reasoned that the effect of the late bringing of the felony charges was no more coercive of a guilty plea on the misdemeanor counts than a simultaneous indictment on all counts would have been. Moreover, he found as a matter of fact that Slatko's "failure to indicate any willingness to enter a guilty plea to the misdemeanor charges [prior to the lodging of the felony indictment] had absolutely nothing to do with the bringing of the felony charges." (App. at 188). The district court's fact finding was not clearly erroneous and its legal conclusions are eminently sound. Accordingly, we affirm the judgment.

I. The Prosecution's Motive in Bringing the Felony Charges

Martinez testified at length as to the circumstances leading up to the felony indictment. He stated that in preparing to try the misdemeanor charges he delved thoroughly into the facts of the case. Thereupon he concluded, despite an earlier recommendation to the contrary by "Washington," that Slatko was "guilty of the felony." (App. at 119.) This conclusion was the "major factor" in bringing felony charges. (App. at 120.) Moreover, it became clear that much of the evidence necessary to obtain a misdemeanor conviction was the same evidence which would have been required to prove the felony charges. Accordingly, said Martinez, he recommended asking the grand jury for a felony indictment.

[Prosecutor's Testimony]

At one point during his testimony to the Bar committee, Martinez stated that while involved in pretrial preparation he resolved that if the Government went to trial on the misdemeanor only its case was a "loser." From this statement Slatko infers that the felony charges were brought so as to induce a guilty plea, thereby avoiding an unsuccessful prosecution. But Martinez's explanation of this statement is more persuasive. Put simply, he believed the Government had a far better case on the felony counts than on the misdemeanor charges. ¹

Slatko would also attribute an evil motive to the Government since Martinez stated that there was no reason for Slatko to plead guilty on any of the misdemeanor charges prior to the felony indictment. As Martinez explained, Slatko might as well have gone to trial on all the misdemeanor counts because, even if convicted on all three, the likelihood was that he would receive concurrent sentences. Yet this realization would be apparent to any competent lawyer. And importantly, after bringing the felony charges the Government did not approach Slatko with a bargain but, on the contrary, repeatedly refused Slatko's approaches. As Martinez testified: "Mr. Kasanoff [Slatko's counsel] kept bugging us to let you plead to the misdemeanor[s] only during the entire pretrial procedure and up until the time we were able to convince Washington that we should." (App. at 116). It was only after a full day of trial, when the Government apparently realized that a felony conviction would be difficult to obtain owing to the complexity of the case, ² that the Government acceded to Slatko's requests.

Put shortly, we agree with the district judge that there is simply nothing in the record to indicate that Slatko's refusal to plead guilty to the misdemeanors in any way influenced the Government's decision to bring the felony charges. Of course, the Government cannot threaten baseless prosecutions to induce a guilty plea. See Machibroda v. United States, 1962, 386 U. S. 487; Brady v. United States, 1970, 397 U. S. 742, 751 n. 8. But in this case there is no evidence that the felony charges were baseless or that the charges were brought to induce a plea. Accordingly, Slatko's appeal on that ground must fail.

II. The Coercive Effect of the Felony Charges

The propriety of plea bargaining has long been the subject of heated debate. Yet the Supreme Court has unequivocally put its stamp of approval on the process. North Carolina v. Alford, 1970, 400 U. S. 25; Parker v. North Carolina, 1970, 397 U. S. 790; Brady, supra. If the plea is knowingly and freely given it is constitutionally permissible. Id. In this case Slatko does not contend that he was unaware of the maximum penalty for or the consequences of a conviction on the misdemeanor counts. The trial judge fully advised him on that score. Rather, Slatko argues that the situation in which he was involved was instinct with coercion. Be that as it may, the Supreme Court in Brady noted with approval the practice of pleading guilty to get the prosecutor to drop some counts. That the felony charges in this case were brought long after the misdemeanor charges does not alter our conclusion that Slatko's plea was voluntary.

The judgment below is Affirmed.

¹ To prove the misdemeanors charged, the Government would be required to show that Slatko's late filing was willful. He had several explanations for his tardiness: that he did not have available the facts and figures to file on time because much of his income was derived from foreign investments and that he was embroiled in domestic difficulty and simply overlooked the necessity for seeking an extension of time in which to file. On the other hand, Martinez was convinced that he could prove evasion on the basis of the tax returns actually filed.

² As Martinez testified before the Bar Committee: "The first day we felt that our tax evasion charges were going very, very badly." Bar Committee Transcript at 62.

 

 

[71-2 USTC ¶9599]United States of America, Appellee v. I. James Bednarski, Jr., Defendant, Appellant

(CA-1), U. S. Court of Appeals, 1st Circuit, No. 7706, 445 F2d 364, 7/22/71, Aff'g unreported District Court decision

[Code Sec. 7201--Result unchanged by '69 Tax Reform Act]

Crimes: Trial: Plea of guilty: Acceptance discretionary with Court: Defendant's denial of guilt: Improper comment: Statement to jury.--The taxpayer's conviction on six counts for fraudulent income tax returns was upheld. Though the District Court could have accepted the taxpayer's guilty plea, which would, by agreement, have resulted in prosecution on only one count, it chose not to in light of the taxpayer's denial of guilt in Court. Held, acceptance of the guilty plea was discretionary, not mandatory. Held further, a sentence uttered by the prosecutor before the jury was not prejudicial as contended by the taxpayer.

Herbert F. Travers, Jr., United States Attorney, Wayne B. Hollingsworth, Assistant United States Attorney, Boston, Mass., for appellee. Marguerite M. Dolan, Sebastian J. Ruggeri, Three Bank Row, Greenfield, Mass., for appellant.

Before ALDRICH, Chief Judge, and MCENTEE and COFFIN, Circuit Judges.

ALDRICH, Chief Judge:

The basic question in this case, whether a court may be required to accept a plea of guilty, calls for a rather detailed statement of the facts. The defendant, who operated a nursing home, was indicted on six counts for fraudulent income tax returns. After extensive discovery and pre-trial proceedings counsel notified the court that defendant was willing to plead guilty to count 5, the United States Attorney stating that upon such a plea he would dismiss the other counts. Pursuant to F. R. Crim. P. 11 the court addressed the defendant and inquired if any threats or promises had been made. He replied in the negative. In the light of the government's statement of its intent with regard to the other counts, this would seem a little less than accurate, but at least the inaccuracy was manifest. What was not manifest was that the government had privately said that it would recommend a one month sentence and a $1,000 fine--at least defendant so states in his brief. If that was true we cannot too strongly condemn all parties involved, the defendant, his counsel and the United States Attorney. Any attorney, knowing that a promise has been made, even in so relatively small an area as a recommended sentence, who allows, in silence, a defendant in effect to deny the fact to the court, must face disciplinary action.

[Guilty Plea Not Accepted]

Before any occasion for sentencing arose, however, the proceedings aborted. In the course of examining the defendant the court inquired whether he had knowingly understated his tax. Defendant denied knowledge of the falsity at the time of filing his return. Whether this was for tactical reasons bearing on his tax penalties does not appear, but when the court said it would not accept the plea in the face of the denial, defendant reasserted his lack of knowledge. Counsel made no protest. Thereafter defendant was tried and found guilty on all six counts. The court sentenced him to four months concurrent, on each, and imposed a $1,500 fine on each, a total of $9,000. So far as the fines are concerned, this was more than could have been imposed under count 5, so, quite apart from the four month versus possibly one month sentence, defendant is worse off than if his original plea had been accepted and the other counts had been dismissed. He appeals.

[Acceptance Discretionary]

Defendant relies upon the principle most recently announced in North Carolina v. Alford, 1970, 400 U. S. 25, that a court may accept a guilty plea if satisfied that there was strong evidence of guilt, even though the defendant, while offering to plead, denies that he was in fact guilty. We find nothing in Alford that obliges the court to accept a guilty plea merely because it was warranted in so doing. Indeed, in dicta the Court explicitly rejected such a proposition. 400 U. S. at 38 n. 11. See also Lynch v. Overholser, 1962, 369 U. S. 705, 719. Nor do we find such a requirement in Rule 11. ¹ The first portion is clearly "may," not "shall." The "shall" portion imposes a condition, for the protection of an ignorant defendant, see Advisory Committee Note, F. R. Crim. P. 11 (1966), not an obligation to accept the plea.

We see at least two reasons why the court must have discretion whether or not to accept a plea even though a strong case may be made as to it voluntariness. The first is that a conviction affects more than the court and the defendant; the public is involved. However legally sound the Alford principle, which of course we do not dispute, the public might well not understand or accept the fact that a defendant who denied his guilt was nonetheless placed in a position of pleading guilty and going to jail. Particularly may this be so in income tax cases. ² A judge may properly not wish to put the court in the position of being an apparent partner to a circumstantial web woven by the Internal Revenue Service to fine and jail a person who has not been tried and who protests his innocence.

Defendant's view could produce even more direct difficulties. We could not support a principle under which, if the court refused to accept a plea, the defendant after trial and a conviction and a sentence not to his liking could return and freely litigate the correctness of the court's finding that the requirements of Rule 11 had not been fully met. We may agree that a court must seriously consider accepting a tendered plea if it is fully satisfied, even though the defendant asserts his actual innocence, and commend this obligation to the district courts. At the same time, we believe the defendant's burden to show an abuse of discretion in refusal should be heavier than the court apparently felt in such cases as Griffin v. United States, D. C. Cir., 1968, 405 F. 2d 1378, and McCoy v. United States, D. C. Cir., 1966, 363 F. 2d 306, 307. But whatever the burden, we find in the record in the case at bar no abuse. See Maxwell v. United States, 9 Cir., 1966, 368 F. 2d 735.

[Jury Argument]

Defendant makes a further point, that in his argument to the jury the prosecutor appealed to the jurors' personal interests. The sentence complained of is not a masterpiece of grammatical construction. However, it lends itself far less to defendant's interpretation than to a proper one. Furthermore, no objection appears on the record. See United States v. Cotter, 1 Cir., 1970, 425 F. 2d 450, 453. It is axiomatic that we do not take counsel's statement that he complained at the bench as preservation of rights. The criticized sentence in no manner approaches plain error.

The government has filed a motion under Local Rule 6 for summary affirmance without oral argument. We have considered defendant's brief responding thereto, and find no reason for believing that we would be aided by oral argument.

Affirmed.

¹ "A defendant may plead not guilty, guilty or, with the consent of the court, nolo contendere. The court may refuse to accept a plea of guilty, and shall not accept such plea or a plea of nolo contendere without first addressing the defendant personally and determining that the plea is made voluntarily with understanding of the nature of the charge and the consequences of the plea. If a defendant refuses to plead or if the court refuses to accept a plea of guilty or if a defendant corporation fails to appear, the court shall enter a plea of not guilty. The court shall not enter a judgment upon a plea of guilty unless it is satisfied that there is a factual basis for the plea." F. R. Crim. P. 11.

² This court is mindful that not long ago a defendant who pleaded guilty to income tax evasion and was not asked by the court whether he was in fact guilty, emerged from the courtroom to tell the newspapers that he was wholly innocent, and a victim of circumstances and friendship, and succeeded in being elected to Congress from jail.

 

 

[55-1 USTC ¶9470]United States of America, Plaintiff-Appellant v. Michael Shapiro, alias Mike Shapiro, Defendant-Appellee

(CA-7), In the United States Court of Appeals for the Seventh Circuit, No. 11430. October Term, 1954, April Session, 1955, 222 F2d 836, May 26, 1955

Appeal from the United States District Court for the Eastern District of Wisconsin.

[1939 Code Sec. 145(b)--substantially unchanged in 1954 Code Sec. 7201]

Criminal prosecution: Order of District Court vacating judgment and permitting withdrawal of plea.--The order of the District Court in setting aside the original judgment of conviction and permitting the defendant to withdraw his plea of nolo contendere was not a final appealable judgment. The Government's contention that the motion to set aside the judgment should be held to be a civil proceeding from which the Government could appeal and not part of the criminal proceeding was rejected.

Timothy T. Cronin, United States Attorney, Milwaukee, Wis., for plaintiff-appellant. A. L. Skolnik, Milwaukee 3, Wis., for defendant-appellee.

Before MAJOR, LINDLEY and SWAIM, Circuit Judges.

SWAIM, Circuit Judge:

This case comes to this court on a motion by the defendant, Michael Shapiro, to dismiss the appeal filed by the Government from a judgment entered by the Honorable Patrick T. Stone, Judge of the United States District Court for the Western District of Wisconsin, while sitting as a Judge of the United States District Court for the Eastern District of Wisconsin. This judgment, entered January 20, 1955, vacated and set aside a judgment of conviction which Judge Stone had entered against the defendant on November 5, 1951, and also permitted the defendant to withdraw his plea of nolo contendere.

The defendant had been convicted on count 2 of an indictment which charged him jointly with his wife, Rae Shapiro, of willfully and knowingly attempting to defeat and evade income tax which the wife owed on her net income for the calendar year 1944. The defendant's conviction was on his plea of nolo contendere which he entered after withdrawing his original plea of not guilty. On his conviction the defendant was fined $10,000.00 and sentenced to three years in prison. The defendant paid the amount of the fine, served one year of the sentence as required by statute and was then paroled. He compromised the civil liability of his wife for her taxes for $411,000.00. This amount was paid by the defendant and was accepted by the Internal Revenue Bureau of Wisconsin in payment of all taxes, penalties and interest due and owing from said Rae Shapiro for the years 1942 to 1947, inclusive.

[Motion to Withdraw Nolo Contendere]

On December 15, 1954, the defendant filed in the original criminal case a motion to withdraw his plea of nolo contendere and to set aside the original judgment of conviction. This motion alleged that manifest injustice had been done to the defendant by reason of the fact that at the time he withdrew his original plea of not guilty and entered his plea of nolo contendere in the criminal case the defendant firmly believed that he was a citizen of the United States by reason of the naturalization of his father prior to the time the defendant became 21 years of age.

This motion alleged that the defendant was born in Russia; that he came to the United States with his parents in 1913, when he was approximately 15 years of age; and that since that time he had lived in Milwaukee, Wisconsin, where he had married and raised a family consisting of three daughters and several grandchildren.

The motion further alleged that the defendant had pleaded nolo contendere to the second count of the indictment concerning his wife's taxes because his wife was then "in a very precarious condition of health both mentally and physically, as evidenced by the testimony of physicians called both by the Government and by the defense"; and because he was informed by his wife's physician that she was unable to stand trial, and that if he stood trial "it would have a seriously detrimental effect upon the health of his wife and might even be fatal to her."

The defendant's motion alleged further that at that time the Government refused to dismiss the indictment against his wife, Rae Shapiro, unless he entered a plea of either guilty or nolo contendere to one count of the indictment; and that the Government agreed before the defendant changed his plea from not guilty to nolo contendere that if the defendant did so change his plea the Government attorneys would recommend that the case against his wife be dismissed. The motion then alleged that "induced by the foregoing considerations, and fully believing that he was a citizen of the United States, and without any knowledge or forewarning of the intention of the Government to institute deportation proceedings and to banish him from the United States and from his family, the defendant withdrew his plea of not guilty and entered a plea of nolo contendere to one count of the indictment * * *"; and that "the defendant's plea of not guilty was withdrawn and a plea of nolo contendere filed for the purpose of preventing the serious illness and perhaps death of his wife, and because he fully believed that his father and he were citizens, and that therefore there was no possibility of deportation."

In this motion the defendant also alleged upon information and belief that, if the court had known at the time of the defendant's entry of his plea of nolo contendere and at the time of sentence that it was the intention of the Government to institute deportation proceedings against him, the court would have recommended to the Attorney General of the United States that the defendant not be deported.

In his motion the defendant stated that in reality he was not guilty of the charges alleged in the indictment and that he believed "that a manifest injustice had been done to him." The defendant, therefore, moved the court to enter an order setting aside the sentence theretofore imposed upon him, permitting him to withdraw his plea of nolo contendere, and permitting him to enter a plea of not guilty. The defendant asked the court to set this motion for hearing, to permit him to produce evidence in support of the motion, and to give due notice of the hearing to representatives of the Immigration and Naturalization Service of the United States, to the United States Attorney at Milwaukee, Wisconsin, and to the Attorney General of the United States. Such notices were given and Assistant United States Attorney Hilgendorf appeared at the hearing representing the United States.

[Motion to Dismiss Appeal]

In support of his motion to dismiss this appeal the defendant first contends that 18 U. S. C. A. Section 3731 furnishes the only authority for appeals to be taken by and on behalf of the Government in criminal cases. The defendant insists that this section furnishes no authority for an appeal from an order by a District Court granting a motion to set aside a judgment of conviction to correct a manifest injustice under Rule 32(d) of the Federal Rules of Criminal Procedure, 18 U. S. C. A.

The Government concedes that "the statute does not specifically authorize an appeal by the United States from an order setting aside a judgment of conviction in a criminal case if a new trial is granted," but says that: "Such orders are not final, and the defendant must face a new trial." The Government contends that in the instant case the proceedings were unusual. Then, after describing the "unusual" proceedings, the Government says that insofar as it was concerned the action of the District Court was final and for that reason a notice of appeal was filed to protect the rights of the United States. But according to the notice of appeal, the appeal was only from the order of the District Court granting the defendant's motion to vacate and set aside the judgment of conviction herein and permitting the defendant to withdraw his plea of nolo contendere.

Rule 32(d) of the Federal Rules of Criminal Procedure expressly authorizes the District Court to set aside a judgment of conviction and to permit the defendant to withdraw his plea of guilty or nolo contendere to "correct manifest injustice." In this case the trial judge after hearing evidence and the arguments of counsel did just what Rule 32(d) authorized. We think it is clear that the order of the District Court here in setting aside the judgment of conviction and permitting the defendant to withdraw his plea of nolo contendere was not a final appealable judgment. After the judgment was set aside and the defendant was permitted to withdraw his plea he was again faced with the indictment to which he could, and at first did, plead not guilty. Without anything further this would have required a new trial. The defendant's subsequent plea of nolo contendere to avoid standing trial again did not and could not make the judgment setting aside the original judgment of conviction a final appealable order.

The Government next contends that, while there is a conflict in the authorities as to the nature of a motion to set aside a judgment under Rule 32(d), such a motion should be held to be a civil proceeding from which the Government could prosecute an appeal and not part of the criminal proceeding. Of course, if the Government were correct in this contention, Section 3731, which is applicable only to appeals from judgments in criminal cases, would not apply here. On this point the Government says that in Stidham v. United States, 8 Cir., 170 Fed. (2d) 294, the court held that a proceeding to vacate a judgment of conviction under Rule 32(d) "is not a criminal proceeding but a civil one." However, the quoted language from that opinion was used by the court not as to a 32(d) proceeding but as to a petition for habeas corpus. In the Stidham case the appeal was by the defendant and there was neither mention nor consideration of the right of the Government to appeal.

In United States v. Lias, 4 Cir., 173 Fed. (2d) 685, the court was also confronted with a motion to dismiss an appeal by the United States from an order which vacated a judgment, and permitted the defendant to withdraw his plea of guilty and to enter instead a plea of not guilty. The Government there contended that the order was appealable under 18 U. S. C. A. Section 3731, as an order arresting a judgment of conviction. The defendant there, as here, contended that the order was one permitting the defendant to withdraw a plea of guilty pursuant to Rule 32(d) of the Federal Rules of Criminal Procedure. In the Lias case the court pointed out that prior to the enactment of statutes expressly permitting it, the United States could not appeal from a judgment in favor of a defendant in a criminal case. The court there said, page 687, that such action by the trial judge "* * * was in no sense one arresting a judgment of conviction, which puts an end to the case. Arrest of judgment is proper only where it appears upon the face of the record that judgment cannot be legally entered." The court there said further, page 688: "The language, as well as the history of this section [18 U. S. C. A. Sec. 3731], shows clearly, we think, that there can be no appeal by the United States except from a final judgment which puts an end to the proceeding * * *."

The Government here frankly admits, however, that both the Lias and Stidham decisions should be considered in the light of the holding in United States v. Morgan, 346 U. S. 502. While the right of the Government to appeal was not involved in that case and Rule 32(d) was not discussed, the Supreme Court, in discussing a petition for a common law writ of error coram nobis to vacate a judgment of conviction in a criminal case, did say, in a footnote on page 505, that: "Such a motion is a step in the criminal case and not, like habeas corpus where relief is sought in a separate case and record, the beginning of a separate civil proceeding." The Court pointed out in that same footnote that the use of such a motion in the case is now the accepted American practice.

[A Step in Criminal Case]

We think there can be no real doubt but that in the instant case the proceeding to vacate the judgment and to permit the withdrawal of the defendant's plea of nolo contendere was a step in the criminal case. It was filed as authorized by Rule 32(d) of the Federal Rules of Criminal Procedure. The motion was filed in the same court where the defendant was originally convicted and docketed under the same criminal case number as the original action, No. 345-Crim. T. The hearing on the motion was then held and the matter determined by the same trial judge who had heard the original criminal case and who had entered the original judgment of conviction. This motion constituted a direct attack on the defendant's conviction in the original criminal case. After the hearing on the motion and after the original judgment had been set aside the defendant pleaded over again, was again found guilty, was fined and resentenced in the same proceeding.

As the Supreme Court said in the Morgan case, supra, page 505: "In behalf of the unfortunates, federal courts should act in doing justice if the record makes plain a right to relief." In Kercheval v. United States, 274 U. S. 220, 223-4, trial courts were warned against the acceptance of pleas of guilty "unless made voluntarily after proper advice and with full understanding of the consequences," and were advised to vacate such a plea "shown to have been unfairly obtained or given through ignorance, fear or inadvertence."

Judge Stone thought and found that "to correct manifest injustice" it was necessary in this case to set aside the judgment of conviction and to permit the defendant to withdraw his plea. He acted accordingly. Such action was a matter within the discretion of the trial judge. United States v. Lias, supra, page 688. Under the record and facts in this case we cannot say that the judge abused his discretion in acting as he did.

Finally, the Government argues that a denial of its right to appeal in this case means that we are accepting the interpretation by the District Court of Rule 32(d) that this rule may be resorted to after the defendant has served his sentence and the judgment of conviction has been satisfied. We find it unnecessary to pass on this question since the defendant here had not completely served his sentence and satisfied his judgment of conviction. The defendant was sentenced to three years imprisonment January 7, 1952. He started serving his sentence February 6, 1952. After serving one year he was paroled and on December 15, 1954, while still on parole and still in custody, 18 U. S. C. A. Section 4203(a), he filed the 32(d) motion.

The defendant's motion to dismiss the appeal is granted.

 

 

[56-1 USTC ¶9178]B. B. Carter, petitioner, v. United States of America

In the Supreme Court of the United States, No. 457.--October Term 1955, 350 US 928, 76 SCt 301, January 9, 1956

On petition for writ of certiorari to the United States Court of Appeals for the Fifth Circuit.

[1939 Code Sec. 145(b)--similar to 1954 Code Sec. 7201]

Criminal prosecution: Tax evasion: Motion to withdraw plea of guilty.--Taxpayer pleaded guilty to tax evasion and was fined $10,000, which he paid. After the statute of limitations had run on the offenses charged, taxpayer filed a motion, under Rule 32(d), Fed. R. Crim. P., to withdraw his plea of guilty, on the ground that he was improperly advised and misrepresented by his counsel at the time of the entry of the plea. The Circuit Court affirmed the District Court's denial of the motion. On confession of error by the Solicitor General of the United States, the judgment of the Court of Appeals is vacated, and the case is remanded to the District Court.

John U. Merrell and Daniel S. Ring, 318 Shoeham Bldg., Washington 5, D. C. and Earle B. Mayfield, Jr., and Wentworth T. Durant, 1520 Public National Bank Bldg., Dallas, Texas, for petitioner. Simon E. Sobeloff, Solicitor General, for respondent.

PER CURIAM:

The petition for writ of certiorari is granted. On consideration of the entire record and confession of error by the Solicitor General of the United States the judgment of the Court of Appeals [55-2 USTC ¶9542] is vacated and the case is remanded to the District Court.

 

 

 

[55-2 USTC ¶9542]B. B. Carter, Appellant v. United States of America, Appellee

(CA-5), In the United States Court of Appeals for the Fifth Circuit, No. 15467, 224 F2d 563, June 30, 1955

Appeal from the United States District Court for the Northern District of Texas.

[1939 Code Sec. 145(b)--similar to 1954 Code Sec. 7201]

Criminal prosecution: Tax evasion: Motion to withdraw plea of guilty overruled.--Taxpayer pleaded guilty to charges of tax evasion and was fined $10,000, which he paid. After waiting until the statute of limitations barred further prosecution in the matter, he filed a motion to withdraw his plea of guilty under Rule 32(d), Fed. R. Crim. P., on the ground that he was improperly advised by his attorney at the trial. It was held that the trial court did not abuse its discretion in denying the motion.

Wentworth T. Durant, Earle B. Mayfield, Jr., Dallas, Tex., for appellant. Heard L. Floore, United States Attorney, Ft. Worth, Tex., for appellee.

Before HUTCHESON, Chief Judge, JONES, Circuit Judge, and WRIGHT, District Judge.

[The Facts]

PER CURIAM:

On January 17, 1951, appellant entered a plea of guilty to each count of an indictment in six counts charging an attempt to evade his and his wife's income taxes for the years 1944, 1946 and 1947. The total evasion for those years amounted to $30,677.88. He was sentenced to pay a fine of $10,000. In April, 1954, appellant filed a motion under Rule 32(d), Fed. R. Crim. P., to withdraw his plea of guilty entered January 17, 1951 on the ground that he was improperly advised and misrepresented by his counsel at the time of the entry of the plea.

The district court denied the motion, holding that at the time of entry of the plea Carter's counsel "rendered conscientious and capable service" and that Carter "understood and comprehended just what he was doing." ¹ The court also held that Carter waited until the statute of limitations barred further prosecution in the matter before filing his motion, appellant having contended in the district court that he was misrepresented by his lawyers not only in entering his plea of guilty but also in agreeing to prosecution by information rather than by indictment.

The record shows that Carter had two lawyers, both of whom were also accountants, representing him at the time he entered his plea of guilty. In addition, by some fortuitous but singularly suspicious circumstance, Carter received in the mail prior to entering his plea, the original copy of the Confidential Report of the Bureau of Internal Revenue, on which report his prosecution was based. This report contained all of the evidence on which the Government depended for conviction had Carter gone to trial.

After Carter pleaded guilty and paid his fine, he retained still a third lawyer to represent him in connection with his tax affairs. Carter's present counsel account for the fact that Carter's third lawyer did not seasonably move to withdraw Carter's plea of guilty by charging him with incompetence. Carter's present counsel also deny that they purposefully waited until the statute of limitations had run on the offenses charged before filing their motion to withdraw his plea of guilty, although it is a fact that the motion was filed within thirty days after the statute had run. After some apparent reservations about the matter, they do finally admit, however, in their reply brief filed after argument of the case on appeal, that their real purpose in attempting to set Carter's conviction aside is to improve Carter's chance of obtaining a tax refund for the years in question.

[Opinion]

The motion to withdraw plea of guilty under Rule 32(d) is directed to the sound discretion of the district court. Mitchell v. United States, 5 Cir., 179 Fed. (2d) 305. After sentence, it should be granted only "to correct manifest injustice." ² Rule 32(d), Fed. R. Crim. P. We are unable to find that the district court here abused its discretion in refusing to grant the motion. On the contrary, we find in the record no proof of manifest injustice requiring the permission to withdraw the plea. Carter was better prepared to protect himself on arraignment, and more informed, than most defendants. He not only had two lawyers who, according to the district court, rendered "conscientious and capable service" but also a complete outline of the Government's evidence against him as contained in the Bureau of Internal Revenue's Confidential Report. He was certain a jury would convict him. So he pleaded guilty and threw himself on the mercy of the court. The court compassionately imposed only a fine where under the law and under the circumstances of the case a prison sentence as well could easily have been imposed. Now he asks this court to find that the district court abused its discretion in refusing to let him withdraw his plea of guilty so that he can plead the statute of limitations against further prosecution, or in the alternative, reclaim some of the taxes and penalties he has been required to pay.

We find no abuse of discretion.

AFFIRMED.

¹ The opinion of the district court reads in part:

"It is true that Carter was not a lawyer or a banker or a college man, but he had business sense and understanding. Accordingly to the report which was submitted undeniedly at the time of his plea of guilty, he had taken large checks coming in to him and indorsed them over for payment of tracts of land so that there would be no trace of any record in his possession or perhaps in his bank's possession of his having received such money as a portion of income. And in this way large sums of money had escaped taxation. He understood how to do these things. He had built up a credit with his bank of some $300,000.00. He had prospered. He argued long and understandingly with his counsel on the better course to pursue and finally agreed with them to enter a plea of guilty and throw himself upon the mercy of the Court."

² Rule 32(d) reads:

"(d) Withdrawl of Plea of Guilty. A motion to withdraw a plea of guilty or of nolo contendere may be made only before sentence is imposed or imposition of sentence is suspended; but to correct manifest injustice the court after sentence may set aside the judgment of conviction and permit the defendant to withdraw his plea."

 

 

[72-1 USTC ¶9246]United States of America, Plaintiff v. Morris H. Greenberg, Defendant

U. S. District Court, Dist. Minn., Third Div., 3-70 CR. 104, 10/18/71

[Code Sec. 7203]

Crimes: Failure to file interest equalization tax returns: Sentences: Severity: Changing plea.--The taxpayer's failure to file interest equalization tax returns was not accidental nor inadvertent, but purposeful and intentional. Accordingly, the sentence imposed by the District Court, including 90 days of jail time, was reasonable and as lenient as the taxpayer could expect. The taxpayer's alternative motion to withdraw his plea of guilty was not timely because the sentence was already imposed. The fact that the sentence was more severe or different from that which taxpayer expected or hoped for was not manifest injustice within the meaning of Rule 32 of the Federal Rules of Criminal Procedure.

Rob ert G. Renner, United States Attorney, Minneapolis, Minn., for plaintiff. Irving R. Brand, Samuel L. Kaplan, Ralph Strangis, Maslon, Kaplan, Edelman, Borman, Brand & McNulty, 1200 Builders Exchange Bldg., Minneapolis, Minn., for defendant.

[Facts]

NEVILLE, District Judge:

Defendant, a practicing attorney of many years residing at Eveleth, Minnesota, was indicted September 23, 1970. He was charged with misdemeanors in five counts i. e., failure to file Interest Equalization Tax Returns covering various periods and certain transactions, in violation of 26 U. S. C. §7203. The Sixth count of the indictment charged defendant with a felony by the filing of a false income tax return, paying a tax of $2,189.49 against an amount due and owing of $9,728.18. Defendant pled not guilty to all counts on November 25, 1970. On July 19, 1971, defendant and his counsel informed the court that he desired to change his plea and to enter a plea of guilty to Counts I and II, the United States Attorney stating that at the time of sentencing the government would dismiss misdemeanor counts III, IV, V and count VI, the felony count. Pursuant to Rule 11 of the Federal Rules of Criminal Procedure, even though defendant himself is an attorney of wide experience and many years practice, the court personally, together with the United States Attorney, interrogated him as to his understanding of the consequences of his guilty plea, the voluntariness thereof and his knowledge of his rights. The court was satisfied, and defendant's counsel substantiated such, that defendant was acting voluntarily with full knowledge of the consequences and cognizant of his rights. Particularly defendant was asked and stated that he had received no promise from the court or otherwise as to what sentence would or might be imposed. The court further determined to its satisfaction that there was a factual basis for the plea.

Following the plea the court obtained a presentence report from the probation officer of the court and on September 7, 1971 imposed as a sentence under Count I a fine of $10,000 plus a period of five years probation, conditioned that defendant use best efforts under the aegis of the probation officer to pay his civil tax liability. On Count II the court committed defendant to the custody of the Attorney General for imprisonment for a period of 90 days. On request of defendant's counsel the court stayed execution of the sentence for 45 days to the end that defendant might arrange his business affairs to accommodate the 90 days absence. The motion of the United States Attorney to dismiss Counts III through VI was granted

[90 Day Jail Term]

It is apparent that the 90 day jail term imposed under Count II is principally what rankles with defendant. The bulk of the argument by his counsel for reduction of sentence was directed to this feature.

The court gave a deal of consideration to this case before imposing sentence. Numerous letters were received by the probation officer and transmitted to the court attesting to defendant's excellent reputation as a practicing lawyer, importuning the court to grant leniency. The court's initial and preliminary approach was that the Interest Equalization Tax is a little known tax, not generally criminally enforced and perhaps easily or inadvertently overlooked by one owning, selling and dealing, as in this case, in capital stocks in Canadian companies. The presentence report however contains a copy of a letter written by defendant well before the interest equalization tax was enacted by Congress in 1964 showing his acquaintance with and knowledge of the prospective tax. It reads in part as follows:

"There is in the United States a measure being discussed in Congress which would be a tax on American purchases of foreign securities which tax I believe if reduced to law would be 15%. I understand, however, that there is a provision for exemption if 60% or more of the stock is owned by American citizens."

By the statement of defendant's own counsel, considerable effort was made at the Washington, D. C. level after passage of the law to secure a ruling or interpretation that defendant's transactions or certain of them were exempt or were not covered by the law. This resulted in a decision or ruling adverse to defendant some time in 1965. Still no tax returns ever were filed, nor any procedure taken to test the law in the tax courts nor to pay the tax and claim a refund. Over the years defendant dealt in, sold or owned and invested in stocks of eight different Canadian corporations. Counsel's explanation to the court is twofold, both of which the court deems inadequate. First, it is asserted that defendant did not keep adequate records, despite the requirements of 26 U. S. C. §6001 and other sections of the Internal Revenue Code and therefore since it has been impossible to trace or reconstruct all his transactions he should not be held accountable therefore and second, at all times since 1965 the Internal Revenue Service from time to time has been examining defendant and his activities and thus the government was fully advised of his transactions, thereby negating any criminal intent in failure to file returns.

Upon the above facts, the court concluded that defendant's failure to file interest equalization tax returns was not accidental nor inadvertent, but purposeful and intentional. The court's original and preliminary impressions dissipated. The revenue agents determined "for the purpose of prosecution defendant purchased stock totaling $40,757.26 on which he owes $6,113.58 in equalization taxes."

[Taxpayer's Past Activities]

Apart from the interest equalization tax, a look at defendant's past activities as shown in the presentence investigation report reveals the following:

"Defendant previously was under investigation by the Intelligence Division of IRS in 1958 and 1959, covering the years 1946 through 1956. Prosecution was not recommended, and the case was closed with defendant paying additional taxes and penalties totaling $51,915.91."

Further, the internal revenue agent's report (not of course verified or substantiated by any court proceedings) shows for the years 1958 through 1964 defendant declared a taxable income of $18,669.83 when the true figure is $263,081.01. Be that as it may, the court should properly disregard this because strictly speaking there has been no evidentiary proof of figures and the felony tax evasion count VI in the indictment was dismissed.

Defendant was president and principal executive officer of a Canadian corporation, Sapawe Gold Mines Ltd., formerly Lindsay Explorations Ltd., from March 1961 until October 2, 1964. During this time, a large number of unregistered shares of Canadian Gold Mine stock were sold in the United States, to the point where on March 19, 1963, Honorable Gunnar H. Nordbye of this court permanently enjoined the company its officers and agents from further violating the registration provisions of the Securities and Exchange Act. Defendant was not included as a defendant in the suit. The court stated because defendant's counsel challenged the relevance of this proceeding to the case at bar that he would examine this file, 5-63 Civ. 8, and has done so. Affidavits filed therein by government agents reveal the corporation sold some 500,000 shares of unregistered stock in 1962, 50% thereof to citizens of the United States; that the corporation was on a "Canadian restricted list"; ". . . whose securities the Commission has reason to believe have been or currently are being distributed in the United States in violation of the registration requirements of the Securities Act of 1933"; that "Greenberg admitted to affiant that he knew defendant corporation was on the 'Canadian Restricted List'"; that in total approximately 2,500,000 shares are owned by residents of United States. Defendant's complicity with this case cannot well be denied.

Perhaps the most condemning statement relative to defendant's past activities comes from and is signed by the defendant himself in the form of a letter dated August 26, 1971 addressed to the probation officer, in which he states:

"However, I wish it to be perfectly clear that to my knowledge, there was, for the years 1960-1964, unreported income outside of the allegations of the Government's indictment. Specifically, for the period from 1962-1964, although I don't know the amount, there were substantial funds paid to my daughter, Barbara, by me as described hereinafter, all of which I knew, and further, sums paid to me which were taken by my son, Malcolm, which was not known to me until subsequent to the Internal Revenue investigation. Beyond the above two circumstances, I honestly do not know of any other liability to the United States for unreported income, but know that the state of my records was and is such as not to negative the possibility of other unreported income.

. . . She [the daughter] apparently began to rely on my help, and even began writing checks on my account. On several occasions, I refused to honor these checks, but on many, was contacted by county attorneys proceeding with prosecutions for her bad checks. Ultimately, I would honor the checks, contrary to both the advice of my friends and family. I continued to help her, and 'am now' advised that for the period of 1960-1964 alone, she wrote in excess of $80,000.00 on my account. I continue to help her to date, but in lesser amounts. This money paid to her was clearly income to me, it should have been reported, but wasn't. I know this is wrong and can't justify it, but can only hope you understand that I didn't do this for any reason but for the love of my child and her children.

. . .

Although, clearly, both Barbara's and Malcolm's money was taxable to me, I didn't report this income, for which, at least in Barbara's situation, I am wrong, and clearly, owe tax for both Malcolm's and Barbara's income."

Defendant's counsel states that this was an ill-advised letter, written by a disturbed man, without advice of counsel, though written on defendant's own law office stationery and that defendant now wishes to repudiate it. No explanation was given, however, as to why or how this money would not in fact be income to defendant. Certainly the payments of $81,000 and other payments were not business deductions nor exempt contributions.

[Reasonableness of Sentence]

Considered all in all the court believes the sentence imposed, including 90 days of jail time, is reasonable and as lenient as defendant can expect. A strange concept seems to have grown up that although a misdemeanant could expect to receive 90 days in a jail or in the workhouse for driving while under the influence of intoxicants, even speeding if repeated, shoplifting, vagrancy or plain drunkenness, nevertheless a taxpayer who fails to pay taxes amounting into the thousands of dollars should merely be "slapped on the wrist" and given probation. Jail to the white collar criminal seems to be anathema. Little deterrent effect is accomplished as to others if a town's prominent citizen--and a lawyer withal--can fail to file returns and not pay taxes and receive more lenient treatment than someone who, for instance, forges a $50 government check, or receives $10 by holding up an oil station. Grant that there is a difference between crimes of violence and non-violence, yet if anyone had embezzled or obtained by fraud through the mail the amount of money involved in the case at bar, no one would seriously contend that a 90 day jail term and a fine was an unduly harsh sentence. Further, to honor the plea that because defendant is 72 years of age or is not in the best of health and thus ought to be treated more leniently is to say that the penalties of the criminal law, though applying to the younger and more healthy, should not apply to those over a certain age and evidencing the infirmities of their years. Defendant's counsel has urged that a jail term will be detrimental to defendant's health. The presentence report contains no mention of any condition of ill health on the part of defendant but ex parte and following the hearing on this motion to reduce sentence, defendant's counsel presented a letter from a doctor describing defendant as suffering from a number of maladies and opining that time spent in jail will be injurious to his health. The court is not impervious, though defendant outwardly seemed in good health at his court appearances. The federal institutions have adequate medical facilities and the court feels certain that if defendant's health so warrants he will receive proper medical attention. The experience of course is bound to be distasteful and perhaps socially humiliating to defendant, but, trite though the thought is, such should have been considered by defendant before the commission of the offense.

Following the imposition of sentence, there arrived on the court's desk the September 1971 Federal Rules Decision advance sheet. At 52 F. R. D. 481 appears an article by Honorable Gus J. Solomon, Chief Judge, United States District Court, District of Oregon, wherein he states (at p. 484) in speaking of sentences in tax cases:

"I believe it is necessary to impose jail sentences upon these defendants as a warning to others that unless they pay their taxes, they may get the same treatment. This is particularly true if the defendants are well-known persons of respectability and high social status. You can feel sorry for a friend who was convicted of income tax fraud, but you can relate his situation to your own better if he got a jail sentence. The impact is greater. We know that the Department of Justice recommends jail sentences in practically every income tax case. A recent memorandum prepared by the Chief of the Criminal Section of its Tax Division supports the Department's conclusion that when prison sentences are imposed, the number of infractions of the revenue laws will be reduced.

. . .

I believe that jail terms should be imposed in most cases, and the more prominent the individual the more compelling the reasons for jail time. I say jail time because I believe that a jail sentence of 60 or 90 days will usually have the same general deterrent effect as a prison sentence. There are occasions when I believe it is appropriate to also fine the defendant." (Emphasis added.]

This court agrees with this expression.

[Motion to Change Plea]

Defendant's alternative motion to withdraw his plea of guilty is not timely under Rule 32(d) of the Federal Rules of Criminal Procedure which reads as follows:

"(d) Withdrawal of Plea of Guilty. A motion to withdraw a plea of guilty or of nolo contenders may be made only before sentence is imposed or imposition of sentence is suspended; but to correct manifest injustice the court after sentence may set aside the judgment of conviction and permit the defendant to withdraw his plea."

The court is impressed that defendant's desire to withdraw his plea is motivated by the fact that he did not expect a jail sentence. The fact that the sentence is more severe or different than a defendant expected or hoped is not "manifest injustice" within the meaning of Rule 32. See the American Bar Association Tentative Draft of Standards Relating to Pleas of Guilty (1967) Sec. 2.1, which sets forth situations comprising manifest injustice and which does not include the posture of the case at bar.

A collection of cases from nearly every Federal Circuit Court of Appeals is collected in 9 A. L. R. Fed. 309, 373 supporting the statement:

"§22. Surprise or disappointment by severity of sentence

The following cases held or recognized that a defendant does not show 'manifest injustice' and is not entitled to withdraw a guilty plea after sentence pursuant to Rule 32(d) because of his disappointment in the unexpected severity of the sentence imposed, absent a showing that any expectations of leniency were specifically induced by the government."

[Conclusion]

A separate order has been entered. Defendant will surrender himself to the United States Marshal at Minneapolis, Minnesota at 10:00 A. M. on Tuesday, October 26, 1971. The United States Marshal advises that within an hour from his surrender defendant will be transported to Sandstone, Minnesota, where he will forthwith have a complete medical examination. The court has requested the prison authorities to transmit a medical report to the court. If it should appear, as defendant claims, that 90 days of imprisonment will endanger defendant's health, the court will upon a showing and appropriate motion give consideration to an earlier release.

 

 

 

[65-1 USTC ¶9269]Joseph Conforte, Appellant v. United States of America, Appellee

(CA-9), U. S. Court of Appeals, 9th Circuit, No. 19,359, 339 F2d 914, 12/22/64, Affirming an unreported District Court decision

[1954 Code Sec. 7201]

Criminal tax evasion: Willful attempt to evade tax: Withdrawal of plea after sentence.--The taxpayer failed to show any "manifest injustice" entitling him to withdrawal of his plea of guilty or nolo contendere after judgment and sentence.

Burton Marks, 8447 Wilshire Blvd., Beverly Hills, Calif., for appellant. John W. Bonner, United States Attorney, Merlyn H. Hoyt, Assistant United States Attorney, Reno, Nev., for appellee.

Before HAMLIN, JERTBERG and BROWNING, Circuit Judges.

HAMLIN, Circuit Judge:

On May 29, 1962, in the United States District Court for the District of Nevada, Joseph Conforte, appellant herein, was charged by indictment in three counts with wilfully and knowingly attempting to defeat and evade income taxes for the years 1956, 1957 and 1958. Appellant was represented throughout the proceedings under the indictment by competent counsel of his own choice. After a plea of not guilty to all counts, appellant was tried before a jury which on February 14, 1963, was unable to agree upon a verdict, was dismissed, and a mistrial declared. Between then and June, 1963, appellant's counsel and the Assistant United States Attorney engaged in discussions in an attempt to settle the case on the basis of a plea of guilty or nolo contendere. Early in June conferences were held with the Assistant United States Attorney, appellant, his counsel, and the district judge in attendance. During the conferences the appellant's counsel sought to obtain a commitment from the judge with respect to the sentence which would be imposed in the event the appellant plead guilty to one count of the indictment. The judge expressly refused to commit himself. On June 10 appellant's petition to change his plea to guilty as charged in Count I was accepted by the court, and on June 11 the district judge sentenced appellant to three years' imprisonment, recommending that the sentence run concurrently with a state court sentence then being served by appellant. The government's motion to dismiss Counts II and III was granted.

On March 5, 1964, appellant filed a motion pursuant to Rule 32(d) of the Federal Rules of Criminal Procedure ¹ to set aside a plea of guilty and a motion pursuant to 28 U. S. C. §2255 to vacate, set aside or correct sentence in the United States District Court for the District of Nevada. After an evidentiary hearing, the district judge denied both motions. From this order appellant appeals, invoking the jurisdiction of the court under 28 U. S. C. §2255 and Rule 32(d) of the Federal Rules of Criminal Procedure. The sole issue on this appeal is whether the district court erred in denying appellant's motions.

The appellant's major contention is that his plea of guilty was induced by assurances from his attorneys that if he pleaded guilty he would receive a one-year prison sentence to run concurrently that which he was serving and a fine of $1000.

The district judge made detailed findings of fact which include findings that appellant was represented throughout the proceedings by competent and able counsel of his own choice; that in the conferences between the United States Attorney, defendant, his counsel and the judge, the judge clearly and unequivocally refused to commit himself as to the sentence; that on the morning of June 10, 1963, in the presence of appellant, his counsel, appellant's wife, and the United States Attorney, the judge stated that if appellant offered a plea of guilty it must be because he is guilty and "that there are no qualifications to it; that it must be voluntarily and understandingly offered, with knowledge that the maximum possible punishment was five years imprisonment and $10,000 fine; that he could not indicate what the sentence would be because he did not know himself"; that at noon on June 10, 1963, the court convened and the appellant orally and in writing affirmed his guilt of the charge and stated that his plea of guilty was voluntarily offered; that each of his attorneys confirmed appellant's statements orally in open court and in the written petition to change a plea; that the plea of guilty was accepted and entered and the government thereupon moved to dismiss Counts II and III of the indictment; that on June 11, 1963, after an extended hearing with respect to the sentence to be imposed, the court sentenced the defendant for a term of three years and recommended that the sentence run concurrently with the state court sentence then being served by appellant. The district court made further findings of fact which are set out in the margin. ² The district court further made the following conclusions of law:

"1. No injustice, manifest or otherwise, resulted from the acceptance of defendant's plea of guilty and the judgment of conviction and plea of guilty should not be set aside.

* * *

"3. The sentence was not imposed in violation of the Constitution or laws of the United States; the Court had jurisdiction to impose the sentence; the sentence was not in excess of the maximum authorized by law; and the sentence was not subject to collateral attack."

We have examined the transcript of the proceedings before the district judge, and we hold that the findings of the district judge and his conclusions of law are fully substantiated by the evidence in the record.

Judgment affirmed.

¹ Rule 32(d). Withdrawal of Plea of Guilty. A motion to withdraw a plea of guilty or of nolo contendere may be made only before sentence is imposed or imposition of sentence is suspended; but to correct manifest injustice the court after sentence may set aside the judgment of conviction and permit the defendant to withdraw his plea.

² "11. It is not true that the defendant was not guilty of the offense charged in Count I of the Indictment, and it is not true that defendant believed himself to be not guilty of such charge when he entered his plea of guilty thereto or that he does now believe himself not guilty of such charge.

"12. It is not true that the Assistant United States Attorney practiced any fraud or deception upon defendant or made any misrepresentations to defendant's attorneys. It is not true that the Assistant United States Attorney told defendant's attorneys that he would recommend to the Court the imposition of a sentence of one year in the Federal Penitentiary and a fine of $1,000, and that the sentence would run concurrently with the Nevada State Prison sentence. It is not true that any of the defendant's attorneys so informed the defendant or in any way had promised or guaranteed the defendant that his prison sentence would not exceed one year.

"13. It is true that defendant believed himself to be guilty of the charge contained in Count I of the Indictment when he entered his plea of guilty thereto. It is true that the defendant entered the plea voluntarily and of his own free will, uninfluenced by promises of leniency, benefit or reward. It is true that defendant was fully aware and cognizant of all the possible consequences of the entry of the plea of guilty, and knew that the matter of the sentence to be imposed was solely within the province of the sentencing Judge.

"14. It is true that defendant hoped that the Judge would not impose a prison sentence in excess of one year and that he was disappointed in the sentence imposed."

 

 

 

[54-2 USTC ¶9716]Odom Farrell Sullivan, Petitioner v. United States of America

In the Supreme Court of the United States, No. 64. October Term, 1954, 348 US 170, 75 SCt 182, December 6, 1954

On Writ of Certiorari to the United States Court of Appeals for the Tenth Circuit.

[1939 Code Sec. 145--similar to 1954 Sec. 7201]

Criminal indictment for tax evasion: Grand jury procedure: Withdrawal of pleas after sentence.--An indictment in a criminal proceeding for tax fraud may be returned by the grand jury without direction to do so by the Attorney General's office. Executive Order No. 6166, transferring responsibility for the prosecution of criminal proceedings to the Department of Justice, and Circular Letter No. 2431, requiring authorization from the Attorney General's office to present evidence to a grand jury, do not restrict the power of the grand jury to consider evidence of crime known to the grand jurors or revealed by their investigation. The indictment in this case was, therefore, valid although based on evidence which had been presented without approval of the Attorney General's office. Taxpayer failed to show any "manifest injustice" entitling him to withdraw his pleas of nolo contendere after judgment and sentence.

Llewellyn A. Luce, 937 Munsey Bldg., Washington, D. C., Walter H. Maloney, 526 Investment Bldg., Washington, D. C., W. D. Jochems, 305 Farmers & Bankers Life Bldg., Wichita, Kan., Tom Harley, Jr., Fourth National Bank Bldg., Wichita, Kan., for petitioner. Simon E. Sobeloff, Solicitor General, H. Brian Holland, Assistant Attorney General, Charles F. Barber, Ellis N. Slack, David L. Luce, Joseph M. Howard, Harold S. Larsen, Special Assistants to the Attorney General, for respondent.

MINTON, Justice:

Upon pleas of nolo contendere, the petitioner was found guilty of violating the income tax laws by making and filing false and fraudulent returns. The District Court sentenced him to three years' imprisonment and fined him $13,000. The Court of Appeals affirmed, 212 Fed. (2d) 125 [54-1 USTC ¶9333], and we granted certiorari, 347 U. S. 1010.

On February 28, 1952, a duly constituted grand jury for the District of Kansas indicted the petitioner on four counts for false and fraudulent statements in his individual tax returns and on two counts in another indictment for false and fraudulent returns of the Central Theatre Co., a corporation of which he was president. To these indictments the petitioner entered pleas of not guilty. He later withdrew these pleas, and to two counts of the indictment on his individual returns and to one count on the corporation returns, he entered pleas of nolo contendere. The other counts were dismissed.

[Validity of Indictment]

Before the pleas of nolo contendere were entered, petitioner had filed motions to dismiss the indictments because the evidence upon which they were based was presented to the grand jury by the District Attorney without direction to do so by the Attorney General's office. These motions were overruled after argument and time for briefing. This presents the first question, namely, were the indictments faulty because, without sanction by the Attorney General's office, the District Attorney offered evidence to the grand jury upon which the indictments were returned? It is first contended by petitioner that, pursuant to 26 U. S. C. §3740, ¹ the indictments could not be returned without authorization by that office. We agree with the Court of Appeals that this section applies only to civil suits and not to criminal proceedings. In the absence of words in their context requiring a different conclusion, the phrase "suits for recovery" ordinarily means civil suits and not criminal prosecutions. Hepner v. United States, 213 U. S. 103, 105-109; Stockwell v. United States, 13 Wall. 531, 542-543. One "recovers" in a civil action but prosecutes and punishes in a criminal proceeding.

[Effect of Executive Order and Departmental Letter]

The further contention is made that §5 of Executive Order No. 6166, ² and Circular Letter No. 2431 of the Department of Justice, ³ required approval from the Attorney General's office before any evidence could be presented to the grand jury and that such direction was not given. It is admitted that no authorization was received from the Attorney General's office to present the evidence to the grand jury in the instant case; nor does the record reveal clearly that an emergency existed. Apparently none was reported to the Department of Justice as required by Circular Letter No. 2431.

Prior to Executive Order No. 6166, prosecutions for the violation of internal revenue laws were often referred directly to United States District Attorneys for presentation to grand juries. The purpose of §5 of Executive Order No. 6166, among other things, was to transfer responsibility for the prosecution of criminal proceedings and suits by or against the United States in civil matters to the Department of Justice.

It was not the purpose of the Executive Order to direct how the responsibility should be exercised but to fix it in the Department of Justice. How that responsibility was to be discharged was a matter for the Department. To make the system uniform, Circular Letter No. 2431 was sent to all District Attorneys. It was never promulgated as a regulation of the Department and published in the Federal Register. It was simply a housekeeping provision of the Department and was not intended to curtail or limit the well-recognized power of the grand jury to consider and investigate any alleged crime within its jurisdiction. See United States v. Thompson, 251 U. S. 407, 413-415; Blair v. United States, 250 U. S. 273, 282; Hale v. Henkel, 201 U. S. 43, 61-66; Frisbie v. United States, 157 U. S. 160, 163.

Therefore, it is not contended that, aside from the Executive Order and the departmental letter, a grand jury may not consider evidence of crime known to the grand jurors or revealed by their investigation. It is only urged that the Executive Order and the departmental letter limited the action of the grand jury in respect to cases concerning violations of internal revenue laws. We hold that the Order and the letter had no such restrictive effect, and that the grand jury in this case was free to consider the evidence put before it by Government counsel without authorization from the Attorney General's office in Washington. The evidence was presented by the District Attorney, who was a representative of the Department of Justice, notwithstanding that he failed to comply with the departmental directive. For this he is answerable to the Department, but his action before the grand jury was not subject to attack by one indicted by the grand jury on such evidence. The motions to dismiss were properly overruled.

[Withdrawal of Plea After Sentence]

Three days after judgment had been pronounced finding the petitioner guilty under his pleas of nolo contendere and sentences passed, the petitioner filed a motion asking for leave to withdraw his pleas. Later he filed an amended motion to withdraw the pleas and a petition for probation. In his motion to withdraw the pleas he gave the following reasons, (1) because of manifest injustice, (2) because he had entered his pleas under the mistaken belief, induced by the acts and statements of Government counsel, that he would be placed on probation, and (3) because of misconduct of the District Attorney. The District Court, after hearing argument, denied the motion and the petition for probation and filed its findings of fact, although there apparently was no request for them. ⁴ Under Rule 32(d)/5/ a defendant may, after sentence, withdraw a plea of nolo contendere to correct manifest injustice. It is this provision that petitioner relies upon. He claims he was somehow misled by Government counsel to believe that if he entered the pleas of nolo contendere he would receive probation. By the court's findings, which, in light of the evidence, raise not a doubt, it is settled that the court in no way misled the petitioner and that Government counsel made no promises of leniency or probation. ⁶

Petitioner argues that the United States Attorney misled him because his statement to the court during the hearing for probation was stronger than petitioner and his counsel expected. No exception was taken to anything the District Attorney said, nor was any complaint made about such statement until after sentence was pronounced. We have read this statement and the affidavits of both counsel. The statement was factual, dispassionate and fair. The petitioner has failed to show any "manifest injustice" as required by Rule 32(d). During all of the proceedings from arraignment to denial of petition for probation, petitioner was represented by able and experienced counsel. In our opinion they were not and could not have been misled by the action and statements of Government counsel. The judgment is affirmed.

¹ "No suit for the recovery of taxes, or of any fine, penalty, or forfeiture, shall be commenced unless the Commissioner authorizes or sanctions the proceedings and the Attorney General directs that the suit be commenced."

² "The functions of prosecuting in the courts of the United States claims and demands by, and offenses against, the Government of the United States and of defending claims and demands against the Government, and of supervising the work of United States attorneys, marshals, and clerks in connection therewith, now exercised by any agency or officer, are transferred to the Department of Justice.

"As to any case referred to the Department of Justice for prosecution or defense in the courts, the function of decision whether and in what manner to prosecute, or to defend, or to compromise, or to appeal, or to abandon prosecution or defense, now exercised by any agency or officer, is transferred to the Department of Justice.

"For the exercise of such of his functions as are not transferred to the Department of Justice by the foregoing two paragraphs, the Solicitor of the Treasury is transferred from the Department of Justice to the Treasury Department.

"Nothing in this section shall be construed to affect the function of any agency or officer with respect to cases at any stage prior to reference to the Department of Justice for prosecution or defense." Promulgated June 10, 1933, 5 U. S. C. §§ 124-132.

³ "In accordance therewith, all United States Attorneys are directed to present evidence to a grand jury concerning violations of revenue laws of the United States only when authorized to do so by this office, unless an emergency calls for immediate action, in which event a full report should promptly be submitted." August 10, 1933.

⁴ See Rule 23(c), Fed. Rules Crime. Proc.

⁵ "Withdrawal of Plea of Guilty. A motion to withdraw a plea of guilty or of nolo contendere may be made only before sentence is imposed or imposition of sentence is suspended; but to correct manifest injustice the court after sentence may set aside the judgment of conviction and permit the defendant to withdraw his plea." Rule 32(d), Fed. Rules Crim. Proc.

⁶ "At the June 23 hearing, the court specifically inquired of defendant's counsel as to whether any remark or statement made by the court to defendant's counsel had influenced them in advising the defendant to enter the pleas above mentioned. The court was assured by defendant's counsel and now finds that no statement of the court made to defendant's counsel or in the presence of defendant influenced the defendant's entrance of his pleas of nono contendere.

"The court further finds that no promise of probation or lenience was made, either to the defendant personally or to his counsel by the United States Attorney or his assistant who handled the prosecution for the Government." Findings 9 and 10, R. 91-92.

 

 

[55-1 USTC ¶9121]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, 217 F2d 711, December 8, 1954

Appeal from the United States District Court for the Eastern District of Virginia, at Richmond.

[1939 Code Sec. 145(b)--similar to 1954 Code Sec. 7201]

Criminal penalties: Motion to change plea after conviction.--Taxpayer's motion to be allowed to withdraw a plea of nolo contendere and enter a plea of not guilty is held to be without merit where the sentence which had been imposed upon him for admitted tax evasion was much less than might have been imposed under the statute, appeal was not taken from the sentence, and the record shows that he was treated with absolute fairness by the judge of the District Court.

Jacob P. Lefkowitz for appellant. James R. Moore, Assistant United States Attorney, (L. S. Parsons, Jr., United States Attorney, on brief), for appellee.

Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.

PER CURIAM:

This is an appeal from the denial of a motion to be allowed to withdraw a plea of nolo contendere and enter a plea of not guilty. We denied a motion to admit appellant to bail pending appeal after careful examination of the record in the case. Klingstein v. United States, 4 Cir., -- Fed. (2d) -- [54-2 USTC ¶9676]. We have again examined the record and heard arguments of counsel and we think that the appeal is entirely without merit.

On February 3, 1953, appellant was indicted in the court below for fraudulent income tax evasion. On September 30, 1953, he entered a plea of not guilty and thereafter sundry proceedings were had looking to the trial of the case, but on April 12, 1954, he appeared in court with counsel and asked leave to withdraw his plea of not guilty and enter a plea of nolo contendere. The government objected to the acceptance of this plea but the trial judge, after fully explaining to appellant the nature of the plea and that he was subject to punishment thereon just as upon a plea of guilty, allowed the plea of not guilty to be withdrawn and the plea of nolo contendere to be entered and continued the case for imposition of sentence to July 21, 1954, directing the probation officer to make in the meantime a pre-sentence investigation and report. This report of the probation officer was shown to counsel for appellant who appeared with appellant on July 21 and spent the greater portion of the day introducing evidence as to the character and standing of appellant and in answer to certain matters contained in the report of the probation officer. Appellant took the stand at this hearing and admitted his guilt, stating under oath that he had failed to report his true income in his returns and that he realized that he had "committed a crime which is tantamount to a felony under our laws," and that, in his panic, when he learned that his income was being investigated, he endeavored to cover up the wrongs that he had committed. The trial judge then sentenced him to three years' imprisonment and to pay a fine of $25,000, stating:

"I have considered the evidence, considered the facts developed, and as I indicated earlier, I am more impressed by the facts of this case than I am by the standing of the defendant or the regard or lack of regard in which he is held in the City of Harrisonburg. But the facts, as disclosed by the evidence here, show an intentional and active fraud perpetrated in this case."

[Appeal Not Taken From the Sentence]

The appellant did not appeal from the sentence imposed and was given sixty days by the judge to get his affairs in order before beginning service of the sentence. Shortly before the expiration of the sixty-day period, on September 14, 1954, he moved for a reduction of the sentence and requested an additional extension of sixty days in which to put his affairs in order. Upon denial of this motion he moved to withdraw his plea of nolo contendere, the only ground given for the motion being that counsel had advised the plea, expecting "that some consideration and justice would be forthcoming to him". From the denial of the motion, appellant has taken this appeal.

It is perfectly clear that there was no error in denying the motion. Whether appellant would be allowed to withdraw the plea of nolo contendere and enter a plea of not guilty was a matter resting in the discretion of the trial judge. Rules of Criminal Procedure 32(d); United States v. Lias, 4 Cir., 173 Fed. (2d) 685, 688. Motion to withdraw the plea could be made only before the imposition or suspension of sentence, unless necessary to correct manifest injustice; and in view of the fact that appellant had gone on the stand and admitted his guilt, it can hardly be contended that withdrawal of the plea was necessary to correct manifest injustice.

Appellant did not appeal from the sentence and at the time he took the appeal from the denial of the motion, it was too late to appeal from the sentence. An examination of the record shows, moreover, that there was no ground for such an appeal. Appellant complains of the pre-sentence report of the probation officer, but an examination shows that this was a comprehensive report going fully into matters favorable to appellant as well as to matters which were unfavorable; and the judge stated clearly that the sentence imposed was not influenced by the report but was based upon the facts disclosed by the evidence showing that appellant had been guilty of active fraud. It is well settled, however, that the judge in imposing sentence may properly give consideration to matters contained in the report of a probation officer. Williams v. New York, 337 U. S. 241. Appellant makes an attack on the report, but we have examined it carefully and have had it made a part of the record on appeal, and we think the attack thoroughly unjustified. While it contains reference to derogatory statements about appellant made by persons interviewed, it also contains favorable statements. It does not show prejudice against defendant on the part of the probation officer and does not contain matter calculated to prejudice a judge of any character or intelligence. Without basis in the record, appellant complains, also, that the judge did not read affidavits and letters offered by him in mitigation of punishment although the record shows that he was given ample opportunity to offer evidence and that counsel and witnesses were allowed to say everything in his behalf that they wished to say. The attention of the court was called to the purport of affidavits which counsel did not ask to read, and before sentence was pronounced appellant, when asked whether he had anything further to say, stated that he thought the judge had been very fair.

[Appellant Had No Grounds for Complaint]

Not having taken a timely appeal from the sentence, appellant may not be heard to complain of it; but an examination of the record shows that, even if the appeal were timely, there was nothing connected with the proceedings or the sentence of which he could justly complain. He and his counsel evidently thought that they could escape a prison sentence by entering a plea of nolo contendere; but admittedly no promises to that effect were made them by the judge or the prosecuting attorney, who opposed the acceptance of the plea. The sentence which was imposed was not only much less than might have been imposed under the statute, but was thoroughly justified by the crime of which appellant was guilty. The record shows that he was treated with absolute fairness and that there is no justification whatever for any complaint on his part.

Affirmed.

 

[53-2 USTC ¶9640]Theo. Mosely, Appellant v. United States of America, Appellee

(CA-5), In the United States Court of Appeals for the Fifth Circuit, No. 14538, 207 F2d 908, November 18, 1953

Appeal from the United States District Court of the Southern District of Florida.

Occupational tax on wagering: Penalties: Prosecution by information: Change of plea by defendant.--Violation of the requirements of Code Secs. 3290 and 3291, relating to the occupational tax on wagering, is a misdemeanor according to Code Sec. 2707(b), which is made applicable by Code Sec. 3287, and, therefore, may be prosecuted by information instead of by indictment. There was no abuse of discretion on the part of the trial court in denying the defendant the right to withdraw of plea of nolo contendere and enter a plea of not guilty where the original plea was made in open court, in the presence of and with the consent of the defendant, and his attorney knew that defendant had previously made a confession.

J. Tom Watson, Tampa, Fla., for appellant. James L. Guilmartin, United States Attorney, Miami, Fla., Herbert S. Phillips, United States Attorney, Tampa, Fla., for appellee.

Before HUTCHESON, Chief Judge, and HOLMES and BORAH, Circuit Judges.

HOLMES, Circuit Judge:

This appeal is from a judgment by the district court based on an information charging that the defendant and his wife did willfully engage in carrying on the occupation of accepting wagers without registering and paying the special tax required by Section 3290 and 3291 of Title 26 of the United States Code. The appellant entered a plea of nolo contendere, and was sentenced to imprisonment in the custody of the Attorney General for a period of one year and to pay a fine of $2000; the wife was given a suspended sentence and placed on probation for five years; she did not appeal. The issues presented are whether the appellant properly could be proceeded against by information, and whether the court below abused its discretion in refusing to allow the defendant to withdraw his plea of nolo contendere and enter a plea of not guilty.

[Prosecution by Information Was Proper]

We think that the prosecution was properly brought by filing an information. The defendant was charged with willful failure to pay the specified tax and to give the required information, which is a misdemeanor according to Section 2707(b) Title 26 of the United States Code. Spies v. United States, 317 U. S. 492 [43-1 USTC ¶9243]. A misdemeanor properly may be prosecuted by an information. Duke v. United States, 301 U. S. 492.

[Trial Court Did Not Abuse Discretion in Denying Change of Plea]

There is no absolute right of a defendant to withdraw a plea of nolo contendere and enter a plea of not guilty, but the matter rests solely within the discretion of the court. The record shows that the defendant's counsel entered the plea of nolo contendere in open court, in the presence of and with the consent of the defendant, the attorney well knowing that the defendant had previously made a confession. In view of the circumstances of this case, there was no abuse of discretion on the part of the court in denying the defendant the right to withdraw his plea of nolo contendere. We find no reversible error in the record, and the judgment appealed from is affirmed. U. S. v. Colonna, 142 Fed. (2d) 210; Mitchell v. U. S., 179 Fed. (2d) 305; Goo v. U. S., 187 Fed. (2d) 62 [51-1 USTC ¶9259].

AFFIRMED.

[51-1 USTC ¶9259]Alfred V. Goo, Appellant v. United States of America, Appellee

(CA-9), In the United States Court of Appeals for the Ninth Circuit, No. 12,620, 187 F2d 62, Feb. 9, 1951, Cert. denied, 341 U. S. 916, 71 S. Ct. 735

Appeal from the United States District Court, District of Hawaii.

Penalties: Criminal liability for tax evasion: Motion to change plea before sentence.--A taxpayer who had pleaded guilty to charges of criminal violations of the Internal Revenue Code did not have the absolute right to withdraw his plea of guilty before sentence and to plead not guilty, and there was no merit in the contention that the trial court had abused its discretion in denying the motion.

J. Garner Anthony, Rob ert E. Brown ( Rob ertson, Castle & Anthony, Peter A. Lee, of counsel) Honolulu, Territory of Hawaii, for appellant. Ray J. O'Brien, United States Attorney, Howard K. Hoddick, Assistant United States Attorney, Honolulu, Territory of Hawaii, Frank J. Hennessy, United States Attorney, San Francisco, California, for appellee.

Before: ORR and POPE, Circuit Judges.

GOODMAN, District Judge.

PER CURIAM:

Appellant was convicted in United States District Court for the District of Hawaii, on his plea of guilty to an information charging criminal violations of the Internal Revenue Code. Upon this appeal from the judgment of conviction, he claims the District Court erred in denying his motion, made pursuant to 32(d) F. R. C. P., to withdraw his plea of guilty.

He contends that Section 32(d) of F. R. C. P. confers upon him the absolute right to withdraw his guilty plea at any time prior to imposition of sentence.

We find no merit in this contention. There is complete uniformity in the authorities to the effect that no such right exists and that motions to withdraw guilty pleas are addressed to the sound discretion of the trial court. This is true as to 32(d) of F. R. C. P. and also as to motions under former Rule II(4) of the Rules of Criminal Procedure promulgated by the Supreme Court pursuant to the Act of March 8, 1934. We deem it unnecessary to cite the numerous decisions to that effect.

The record does not support appellant's contention that the trial court abused its discretion in denying his motion to withdraw the guilty plea. The main reason urged in support of the motion was that appellant wished to investigate income tax deductions of which he might avail himself for the years 1946 and 1947. Such matters would not have been admissible by way of defense and would have no bearing on the defendant's guilt or innocence of the charges set forth in the information, which involved prior years. Hence the District Court properly exercised its discretion in denying the motion.

Affirmed.

 

 

[37-1 USTC ¶9278]United States of America, Plaintiff-Appellee, v. Frank J. Denniston, Defendant-Appellant

(CA-2), United States Circuit Court of Appeals for the Second Circuit, 89 F2d 696, Decided May 3, 1937, Cert. denied, 301 U. S. 709, 57 S. Ct. 943

Appeal from a judgment of the District Court for the Southern District of New York.

Changing pleas in criminal cases.--Defendant pleaded not guilty to an indictment for willful and fraudulent evasion of income taxes, and later received permission to withdraw that plea for one of nolo contendere. Before the District Court had acted on the matter of sentence, the defendant's attorney, with the apparent acquiescence of the defendant, entered a plea of guilty. The appellate court holds that the District Court's refusal to permit a subsequent plea of not guilty should be sustained inasmuch as the defendant could not withdraw his preceding plea as a matter of right. On the facts, the entering of the plea of guilty by the defendant's attorney, and not by the defendant personally, was immaterial. Affirming District Court judgment.

Lamar Hardy, U. S. Attorney, for appellee; Francis A. Mahony, Assistant U. S. Attorney, of counsel. Samuel Hershenstein, Attorney for appellant; Harold H. Corbin, Edward J. Bennett, Nathan Grossman, of counsel.

Before MANTON, L. HAND, and CHASE, Circuit Judges.

[History of Case]

CHASE, Circuit Judge:

The appellant was, on December 28, 1934, indicted by a grand jury sitting in the Southern District of New York for willful and fraudulent evasion of income taxes for the calendar years 1931, 1932 and 1933; there being a count in the indictment for each year. On January 7, 1935, the defendant pleaded not guilty in the District Court for the Southern District of New York and was released on bail. He had made, on October 18, 1934, an offer in compromise of any civil and criminal liability, none of which was admitted, and tendered the government his check but his offer was refused, though not until after he was indicted.

[Plea of "Guilty" Entered by Attorney for Defendant with Latter's Consent]

Having failed to effect a settlement, the appellant appeared in open court in the District Court for the above mentioned district on May 27, 1936 with his attorney who asked leave to withdraw the plea of not guilty and to enter a plea of nolo contendere. After some consideration had been given to the question of the power of the court to impose a sentence of imprisonment upon a plea of nolo contendere and the conclusion reached that such power existed, the plea was accepted. Statements as to sentence were thereupon made to the court both by the attorney for the government who urged a prison sentence and by the attorney for the appellant who opposed that. Before the court had acted on the matter of sentence, the appellant's attorney requested the court to defer that until June 17th and was informed that sentence would be so deferred provided a plea of guilty was entered. The attorney then asked appellant, "Well, what do you say?" To which appellant replied, "What can I say?" Whereupon when the court inquired whether the plea was guilty the attorney replied, "Yes." This was done in the presence of the appellant and with his apparent acquiescence and then sentence was deferred.

That afternoon the appellant appeared in court with another attorney who asked leave to withdraw the plea of guilty and to enter a plea of not guilty. This motion was referred to another judge, was continued until heard by him on October 10, 1936 and then evidence was presented showing the circumstances under which the plea of guilty had been entered. The application was denied and a sentence of imprisonment imposed on each count; the sentences being made to run concurrently.

The evidence gave the court ample ground for deciding the motion as it did on the factual basis that the plea of guilty sought to be withdrawn had been entered in the presence of the appellant in open court by his attorney, a competent and experienced member of the bar, who then acted with the knowledge, comprehension and acquiescence of the appellant. The appellant is an intelligent man who certainly must have known that a plea of guilty deprived him of the right to a trial on the merits though it is now, but without adequate supporting evidence, argued that the proceedings were confusing. It is apparent from the record before us that the appellant had been prompted to ask leave to plead nolo contendere by the thought, engendered by what he knew had happened following a like plea in a somewhat similar case, that he would be sentenced only to pay a fine. As what transpired just before his plea of guilty was entered made it clear that a prison sentence might be expected and he was very anxious to be able to attend the commencement exercises of two sons who were to be graduated from college in June, he was clearly but securing the postponement of what was apparently inevitable. Nor was there any coercion. He was subject to the immediate imposition of a prison sentence on his plea of nolo contendere, Hudson v. United States , 272 U. S. 431, and the request to defer sentence had been denied, at least by implication, when the plea of guilty was entered. Though that plea was plainly to fulfill a condition upon the granting of his request for delay in the imposition of sentence, the request itself was based upon nothing but the desire of the appellant to have the court suit its action to the personal convenience of one who already had foregone his right to contest the charges made against him and was entitled only to such consideration as to sentence as the court saw fit to accord him in the exercise of its sound discretion.

[Entering of Plea by Defendant Personally Not Essential]

But there is a technical objection to the plea itself. It is argued that as it was entered by the attorney and not by the appellant personally it is of no effect. While it is true that in ancient times when the rights of an accused were comparatively few much stress was laid upon the formality of arraignment and plea, especially in felony cases, and plenty of anthority may be found to the effect that a plea of guilty at common law had to be made by the accused himself after he had been adequately identified, we are not disposed to subscribe to such rigidity of procedure. The reason for it has disappeared with the acceptance and use of modern methods which preserve the substance of all the rights of an accused person without so much sacrifice of the rights of the public before the altar of mere form. If an indicted person is actually present in open court with his attorney who is competent to represent him and does so under circumstances which fairly show that the attorney speaks for his client who understands what is being done and its import and who acquiesces when the attorney enters a plea of guilty for him, nothing but a slavish adherence to archaism could underlie a holding that the plea was void. When the essential presence of an accused in the court having jurisdiction is a fulfilled condition, there is no express requirement in the federal law that in pleading to an indictment he must actually speak for himself or remain mute in order that a valid plea may be entered. And what was said in Garland v. State of Washington, 232 U. S. 642 in overruling Crain v. United States, 162 U. S. 625 as to compliance with ancient formality in respect to arraignment seems a clear guide to decision on the point now before us. Let the accused be actually present in the court of competent jurisdiction; let the circumstances show clearly that he knew and understood what was being done; let it be made clear that he acquiesced in a plea of guilty then entered for him by his attorney and the plea should have exactly the same force and effect as though he had spoken himself in the words of the attorney. So we hold the plea of guilty valid.

[Change of Plea Not Matter of Right]

Once made, the appellant could not withdraw his plea as a matter of right. United States v. Bayaud, 23 Fed. 721; Gleckman v. United States , 16 Fed. (2) 670; though in the sound discretion of the court he might be permitted so to do and he would then have the same rights and privileges that he had before the plea was entered. Kercheval v. United States , 274 U. S. 220. However, we can perceive no abuse of discretion in this case in requiring the appellant to accept the consequences of his plea. There is some intimation that he has a meritorious defense but no real foundation for any such belief has been shown.

Judgment affirmed.