Commitment by U.S.
Commissioner
7203:
Willful Failure to File Return, Supply Information, or Pay Tax:
Commitment by U.S. Commissioner
[62-1
USTC ¶9482] Pasquale DiCesare, Appellant v. John Chernenko, United
States Marshal for the Northern District of West Virginia, Appellee
(CA-4),
U. S. Court of Appeals, 4th Circuit, No. 8595, 303 F2d 423, 5/10/62,
Aff'g unreported District Court
[1954 Code Secs. 6531 and 7201]
Tax evasion: Statute of limitations: Habeas Corpus: Review.--Where
a complaint for tax evasion was filed almost six years after the alleged
date of the offense and the taxpayer was arrested and committed by the
Commissioner, his petition for habeas corpus filed in order to procure
dismissal of the complaint for failure to establish probable cause and
thus lay a foundation for a plea of the six-year statute of limitations
was property dismissed by the District Court. The Commissioner's
findings of probable cause was not reviewable by habeas corpus.
Furthermore, the District Court's order dismissing the application for
habeas corpus was interlocutory and was not reviewable in advance of
trial.
D.
Paul Camilletti, Peoples Federal Bldg.,
Wheeling
,
W. Va.
, for appellant.
Rob
ert E. Maxwell, United States Attorney, Elkins, W. Va. (John H.
Kamlowsky, Assistant United States Attorney, Wheeling, W. Va., on
brief), for appellee.
Before
HAYNSWORTH,
BRYAN
and
BELL
, Circuit Judges.
BRYAN,
Circuit Judge:
The
United States Commissioner did not have sufficient evidence to hold him
to answer in the District Court for 1955 income tax evasion, Pasquale
DiCesare averred in his application to the District Court for habeas
corpus and release from the commitment. Finding the evidence adequate to
establish probable cause, the Court dismissed the petition. Applicant
appeals.
January
30, 1956 is the alleged date of the offense; January 18, 1962--almost
six years afterwards--the complaint was filed and DiCesare arrested; and
on February 16, 1962 the Commissioner heard and decided the case. Habeas
corpus was refused February 23, 1962. Notice of this appeal was filed
February 28, 1962. On March 21, 1962 DiCesare was indicted for tax
evasion for the year 1955 and also for 1956, 1957 and 1958.
At
the end of the hearing the Commissioner offered to release DiCesare upon
his recognizance without security. Declining the offer, taxpayer was
committed by the Commissioner into the custody of the marshal in default
of bail bond. Within a few hours he applied to the District Court for
habeas corpus. He hoped to procure dismissal of complaint, arrest
warrant and order of the Commissioner for failure of the evidence to
establish probable cause, and thus to lay a foundation for a plea of the
six-year statute of limitations to any indictment for the offense. 26 U.
S. C. 6531 (1954 ed.). Only if the complaint of January 18, 1962 were
sustained, argues DiCesare, would the Government obtain further time for
indictment--the extension of nine months allowed by statute upon
presentation of a complaint within the limitation period. Otherwise the
time expired January 30, 1962.
We
affirm--the sufficiency of the evidence to establish probable cause, we
think, need not be considered--because: (1) habeas corpus was not
available to DiCesare in the circumstances; (2) the question posed by
him of his detention has been made moot by the indictment; and (3) the
order of the District Court is interlocutory and so not reviewable in
advance of the trial.
[Effect
of Habeas Corpus Petition]
Certainly
DiCesare was restrained by the commitment, and no less so because
release from custody was open to him on his own bond. But save in
exceptional instances a Commissioner's finding of probable cause is not
reviewable by habeas corpus. Jones v. Perkins, 245
U. S.
390, 391 (1918); see Goto v. Lane, 265
U. S.
393, 402 (1924). True, recourse to the writ has been allowed to question
orders of Commissioners in removal proceedings, but these present a
significant difference: they are not before the same court which will
try the accused on the charge. Hence no later opportunity will be had to
raise the defense in the course of the prosecution. Cf. Price v.
Henkel, 216
U. S.
488 (1910); Bryant v.
United States
, 167
U. S.
104 (1896). A motion in the District Court to dismiss the commitment is
the appropriate procedure. It provides an immediate and efficacious
remedy--and in the criminal proceeding itself--to correct any wrong to
the appellant. In Re
No. 191 Front Street
, 5 F. 2d 282, 286 (2 Cir. 1924);
United States
v. Casino, 286 F. 976 (S. D. N. Y. 1923).
But
assuming, for argument only, that habeas corpus was the proper remedy,
it has by events occurring since the hearing in the District Court been
rendered inapplicable. Now enlarged on bond in the instant proceeding,
DiCesare's immediate detention would be justified by the indictment
alone. Consequently, on this appeal the question of possible illegal
confinement under the order of the Commissioner is but academic. This
does not mean, as will be noted, that any advantage accruing to DiCesare
in the evidence before the Commissioner has been erased. But it does
demonstrate the entire absence of any immediate basis for habeas corpus.
Again
arguendo: even if the petition had been accorded the character of a
motion to dismiss the commitment, and even though the trial court had
erred in holding the evidence sufficient, and appeal from the District
Court's denial of the motion could not be entertained at this time, for
the ruling would obviously be but an interlocutory order in a pending
criminal action. That is now proved. The order would actually be a part
of the anticipated prosecution by the indictment. Of course DiCesare
would not thereby be robbed of his exception to the Commissioner'
action, since the point could be renewed at trial. But as the District
Court's order would be interlocutory, appeal at this stage would be
piecemeal submission of the case to this court. Such fragmentation of
the proceeding is contrary to the statutory confining the appeals to
"final decisions". 28 U. S. C. 1291. Cf. DiBella v.
United States
, 369
U. S.
121 (1962).
But,
more, annulment of the Commissioner's order is, as we previously
observed, only sought for its value to a plea of limitations to the
count of the indictment for 1955. That defense, including the adequacy
of the evidence before the Commissioner, should not be finally passed
upon previous to the criminal trial--the appropriate time and place for
its consideration. "It is not for this court to determine that
question in advance." Horner v.
United States
, No. 2, 143
U. S.
570 (1892) at 577; Jones v. Perkins, supra, 245
U. S.
390.
[Judgment
of Count]
The
order of the District Court will be affirmed. We do not pass on the
merits of DiCesare's captionposition--for what ever it is worth--and, of
course, he retains in full his right to be heard in the criminal trial,
with appellate review, on the issue he endeavored to raise in this case.
Affirmed.
[50-1
USTC ¶9119]The
United States of America
on the Relation of Nicholas Papaioanu v. Paul B. Messick, United States
Marshal
In
the United States District Court for the District of Delaware, Habeas
Corpus No. 8, 85 FSupp 928, September 16, 1949
Habeas corpus: Commitment by U. S. Commissioner.--Application for
a writ of habeas corpus was refused where a U. S. Commissioner had
determined that probable cause had been shown in a charge of income tax
evasion and the taxpayer had been ordered committed by the U. S.
Commissioner.
John
Van Brunt, Jr. (of Killoran & Van Brunt), of
Wilmington
,
Del.
, for relator. Daniel L. Herrmann, Assistant U. S. Attorney, of
Wilmington
,
Del.
, for respondent.
LEAHY,
Chief Judge:
The
petitioner is charged with income tax evasion as defined by §145(b) of
the Internal Revenue Code. At the Commissioner's hearing he determined
probable cause had been shown. The accused was taken into custody. From
the order of commitment petitioner seeks a writ of habeas corpus.
The
charge is petitioner was guilty of income tax evasion for the year 1943.
During that year, he participated as equal partner in the operation of a
hotel business in
Rehoboth
,
Delaware
, and also operated a liquor store at
Lewes
,
Delaware
, from March 8, 1943, to the end of the year.
In
May, 1946, and internal revenue agent, who testified at the hearing
before the Commissioner, examined petitioner's return for the year 1943
and determined a deficiency. The agent concluded there was an apparent
net income greatly in excess of that reported. This conclusion was based
on a comparison of the net worth of petitioner, as estimated by the
agent, at the beginning and end of 1943.
The
agent admitted that records of the business such as cancelled checks and
receipts were available and appeared to reflect accurately the actual
transactions. He also admitted the records were kept in a businesslike
manner and the books and records did not appear on their face to be
false or fraudulent. It is further apparent petitioner cooperated with
the agent and freely made the books and records available to him.
[Agent's
Testimony]
The
cross-examination of the agent makes it clear that the agent's
conclusion of a deficiency was based on a comparison of net worths
rather than from an examination and audit of the books. The following
testimony is most significant:
"Q.
Mr. Grady, as I understand your answer to the last question, that is,
you did not make an audit of the taxpayer's books for the year 1943
covering his two hotels for the purpose of determining what his income
per books was, is that correct? (R. 29)
"A.
I did try to determine the net income from that on that basis; but
later computing it on the net worth basis a larger income was disclosed,
which I used. (R. 29)
"Q.
Now with respect to the Lewes package store, did you there also attempt
to reconstruct his business income from his books?
"A.
I did. I did attempt to do that.
"Q.
Did you reach a final result in either case, in the case of either the
hotels or the package store, with respect to his income from his books,
in any case?
"A.
No, I don't believe I did.
"Q.
You did not carry all the way?
"A.
That's right. After going through the net worth, I used the net worth
basis." (R. 30)
*
* *
"Q.
* * * I think I asked you if you conclude that the books were fair * * *
on their face, or were they on their face fraudulent, containing
material alterations; erasures?
"A.
There were no alterations there. It was just the examination, I mean
that the larger net income was determined under the other method."
(R. 36)
*
* *
"Q.
* * * Did you reach any conclusion, if you had reached that
reconstruction of sales, would you have used business expense items
which appear in the books?
"A.
You see, for the purpose of reconstruction there, that only applies to--
"Q.
The sales?
"A.
In sales of liquor and cost of liquor sold.
"Q.
You are right.
"A.
Without any reference to any other expenses.
"Q.
Correct. You did get into that?
"A.
I looked into that, that is right.
"Q.
You did not reach any conclusion then?
"A.
No, that's right." (R. 38)
At
the hearing and in his argument here, petitioner seeks to show there are
deficiencies in the agent's testimony and examination even on a net
worth basis. The following testimony is illustrative.
"Q.
Mr. Grady, did you allow for any cash on hand at all? (R. 18)
"A.
No, I didn't.
"Q.
Did you question the taxpayer as to whether he had any cash on hand?
"A.
I did. But the only thing that I could take into account was what was
actually shown in the banks." (R. 18)
*
* *
"Q.
You did ask him how much cash he had?
"A.
Yes, of course, he couldn't remember." (R. 42)
Petitioner
contends that the testimony at the hearing fails to establish probable
cause for the crime charged, for in a situation where books and records
are kept in a businesslike manner a determination of deficiency based
exclusively on a comparison of net worths is erroneous under
"correct" and current interpretation of the applicable law.
And petitioner further contends that the Commissioner's
"error" in finding probable cause may be tested by this
petition. The Government denies the validity of both these contentions.
[Probable
Cause]
1.
Since I think I should not review the Commissioner's finding of probable
cause at this stage, I shall assume that petitioner is correct, i. e.,
in view of the applicable law a comparison of net worths is not
sufficient to establish the crime charged--especially where accurate
books and records are available. And I shall assume that if no
additional evidence were offered at the trial, a verdict would be
directed.
[Scope
of Habeas Corpus]
2.
The writ should be refused. I follow the Government's authorities for
two reasons. First, they are precisely apposite in that they deal, as
here, with appeals from findings of probable cause by
United States
Commissioners. Petitioner's cases, on the other hand, while undeniably
containing language supporting his contention, are, for the most part,
appeals from Courts rather than Commissioners. Some of petitioner's
cases, moreover, are plainly inapposite. Exparte Bollman, 8
U. S.
(4 Cranch) 75, is illustrative. That case arose upon original
applications to the Supreme Court for writs of habeas corpus to review
actions of the Circuit Court of the
District of Columbia
, sitting as a committing magistrate, holding the petitioners for trial
for treason. The Court defined treason and concluded that the evidence
did not show the requisite elements of the crime. This does not aid
petitioner. Here the crime charged is complete if there is a wilful
failure to report income. There is evidence of unreported income;
petitioner's plaint is simply that the method of calculation employed
is, under the applicable law, an erroneous one. Such cases, as
illustrated, then, are clearly distinguishable.
Second,
I agree with the arguments advanced in the cases relied on by the
Government. The writ of habeas corpus should not be used as a mere
substitute for a writ of error, to reverse an erroneous judgment of a
Commissioner on the existence of probable cause. It issues only where
the Commissioner has acted without jurisdiction, or has exceeded his
jurisdiction, or the Act on which the prosecution is based is
unconstitutional, or where the hearing procedure violates some
constitutional prohibition. Where none of these defects are present and
where, as here, the Commissioner has authority to commit persons charged
with such offenses and has acquired full jurisdiction of the person of
the accused, the order of commitment will not be disturbed however, much
the Court may disagree with the Commissioner on probable cause. Horner
v.
United States
, 143
U. S.
570; In re Boyd, 8 Cir., 49 F. 48; Ex parte Jones, 96 F.
200; Clough v. Strakosch, 9 Cir., 109 Fed. (2d) 330; U. S. v. Fogel, et al., 22 Fed. (2d) 823; Ex parte
Jim Hong, 9 Cir., 211 F. 73; U. S. v. Greene, 108 F. 816; Ex
parte Rickelt, 61 F. 203. Whether
a deficiency based on a comparison of net worths is sufficient for a
conviction under the circumstances of this case must and will be
determined by this Court at trial. If the Court determined this matter
in this proceeding and in advance of trial, it would, in effect, be
affording petitioner a remedy of appeal or writ of error from the
Commissioner. And such is not the proper office of the writ of habeas
corpus. Accordingly, the application for the writ must be refused.