Cross-Examination PART 2

---

[ Back ] [ Next ]

   

7203: Willful Failure to File Return, Supply Information, or Pay Tax: Trial: Cross-Examination

Part 2

[96-2 USTC ¶50,536] United States of America , Plaintiff-Appellee v. Herbert Daniel Fleschner, Defendant-Appellant United States of America , Plaintiff-Appellee v. Rob ert Barnwell Clarkson, Defendant-Appellant United States of America , Plaintiff-Appellee v. Vernon Rubel, Defendant-Appellant

(CA-4), U.S. Court of Appeals, 4th Circuit, 94-5929, 94-5933, 95-5063, 10/11/96, 98 F3d 155, Affirming an unreported District Court decision

[Code Sec. 7201 ]

Defraud U.S. of income tax: Convictions: Jury instructions: First Amendment: Verdict: Constitutionality.--Three individuals who were convicted of conspiracy to defraud the U.S. of income tax revenue were not entitled to a jury instruction on a First Amendment defense because their words and acts were not remote from the commission of the criminal acts. They held meetings and collected money from attendees whom they instructed and advised to claim unlawful exemptions and not to file returns or pay tax on wages. Further, the attendees followed the taxpayers' instruction and advice, their unlawful actions were solicited by the taxpayers, and the taxpayers were aware that the attendees were following their instructions and advice. Moreover, the purpose of the meetings was to convince attendees that it was legal to claim false exemptions, to hide income and to refuse to file returns or pay income tax. The trial court did not err when it failed to grant a verdict in favor of the taxpayers on the basis that the Constitutional foundation for federal income tax is uncertain and that their prosecution violated due process.

[Code Sec. 7201 ]

Defraud U.S. of income tax: Convictions: Conspiracy: Jury instructions.--Jury instructions on conspiracy given at a trial of three individuals who were convicted of conspiracy to defraud the U.S. of income tax were not misleading and contained an adequate statement of the elements necessary to convict the individuals of conspiracy.

[Code Sec. 7201 ]

Defraud U.S. of income tax: Conspiracy: Convictions: Sentencing.--The trial court properly sentenced an individual who was convicted of conspiracy to defraud the U.S. of income tax in accordance with the United States Sentencing Guidelines. His base level for sentencing was based on the tax loss, which included the loss from all acts and omissions occurring as part of the same course or common scheme or plan. Since conduct in furtherance of a conspiracy is not defined by, or confined to, just those occasions in which the individual and his co-conspirators were physically together or acted in unison, the calculated tax loss was based on the individual's conduct during the relevant time period in which he operated his business. In his business, he compensated his workers in such a way as to avoid withholding taxes and issuance of Forms W-2, which evaded and camouflaged income.

[Code Sec. 7201 ]

Defraud U.S. of income tax: Conspiracy: Convictions: Cross-examination.--Three individuals who were convicted of conspiracy to defraud the U.S. of income tax were not entitled to cross-examine government witnesses after the government's redirect examination because there was no new matters introduced on re-direct examination. Also, in one instance, the matter covered on re-direct examination had been raised on cross-examination.

Lowell Harrison Becraft, Jr., 209 Lincoln St. , Huntsville , Ala. , for Herbert Daniel Fleschner, Vernon Rubel. Harold Johnson Bender, 200 No. McDowell St. , Charlotte , N.C. 28204 , for Rob ert Barnwell Clarkson. Mark T. Calloway, United States Attorney, Charolette, N.C. 28802, Loretta C. Argrett, Assistant Attorney General, Michael Emile Karam, Rob ert E. Lindsay, Alan Hechtkopf, Department of Justice, Washington, D.C. 20530, for U.S.

Before: WIDENER, ERVIN, and LUTTIG, Circuit Judges.

OPINION

WIDENER, Circuit Judge:

Defendants Herbert D. Fleschner, Rob ert B. Clarkson, and Vernon Rubel appeal their convictions for conspiracy to defraud the United States of income tax revenue in violation of 18 U.S.C. §371 . We affirm.

I

Fleschner opened a chiropractic office in Hickory , N.C. in 1978 and Rubel became one of his patients. Rubel was an enrolled agent authorized to represent people before the IRS in tax matters. In March 1986, Rubel and Fleschner began a study of income tax law. Based on their interpretation of case law and various literature, they concluded that they were not liable for federal income tax. The third defendant, Clarkson, was a South Carolina attorney. He was one of the organizers in 1979 of a club that met once a month in Hickory , N.C. known as the Carolina Patriots. In the fall of 1989, Rubel and Clarkson renewed a prior friendship and thereafter the three defendants conducted the Hickory Carolina Patriot meetings together. The evidence shows that attendees at these meetings made what are called donations to join, in the range of $100 to $200. One witness described Clarkson's role as an instructor and founder of the group. Fleschner was described as a speaker, leader and an instructor although a little less knowledgeable than Clarkson. Rubel was described as a consultant who was not a speaker, but who would do research or legwork to provide additional information. There was testimony that they were instructed by the defendants to claim nine allowances on W-4 forms to prevent withholding from their paychecks, that they were led to believe that the allowances were legitimate, and that they followed the instructions. One witness, a certain Sluss, testified that when he received a letter from the Internal Revenue Service because of the claimed allowances, Fleschner and Rubel told him "not to worry about it, that it would be taken care of," and Rubel provided Sluss with a letter to send to the Internal Revenue Service. When the Internal Revenue Service penalized Sluss $500 and garnished his wages, Sluss again discussed the situation with Fleschner who told him that "they were working on it". Some attendees also testified that they were informed and advised by Clarkson and Fleschner to not file income tax returns and that based on this information and advice received, they did not file income tax returns. Another witness, one Mrs. Penley, testified that attendees were told they did not have to pay taxes they did not owe, that their wages were not income and therefore not taxable. Mrs. Penley was summoned for failure to file an income tax return for the years 1991 and 1992 and her husband was arrested. Some attendees were advised to hide income by removing themselves from the banking system and dealing in cash.

In April 1994, Fleschner, Clarkson, and Rubel were indicted for unlawfully conspiring to impede, impair, obstruct and defeat the functions of the Internal Revenue Service of ascertaining, computing, assessing and collecting income taxes in violation of 18 U.S.C. §371 . ¹ Following a jury trial, all three were convicted and sentenced to prison terms. This appeal followed.

II

The first claim of the defendants on appeal is that the trial court did not permit the cross-examination of government witnesses after the government's re-direct examination.

In the first place, the objection on its face is not well taken. Absent the introduction of any new matter on re-direct examination, the rule is that recross-examination is not required. Without something new, a party has the last word with his own witness. Wharton's Criminal Evidence, 14th Ed., 1986, Vol. 2, p. 698.

The defendants have correctly quoted the applicable rules from United States v. Riggi, 951 F.2d 1368, 1375 (3rd Cir. 1991), and United States v. Caudle, 606 F.2d 451, 458 (4th Cir. 1979). "It is well settled that if a new subject is raised in redirect examination, the district court must allow the new matter to be subject to recross-examination." 951 F.2d at 1375. "To deny recross examination on matter first drawn out on redirect is to deny the defendant the right of any cross-examination as to that new matter." 606 F.2d at 458.

The defendants then claim that in four instances the government's witnesses testified to new matter on re-direct examination, but recross-examination was not permitted. That testimony is a part of the witnesses Cofer, Holstein , Penley and Whiteside. As to the witnesses Cofer, Holstein and Penley, the testimony on re-direct examination was not on new matter, but on subjects which had been the subject of the direct examination of the witnesses. In the case of Whiteside, the matter covered on re-direct examination had been raised in the cross-examination of Whiteside to the effect that Clarkson had at one point been subjected to a mental examination. On re-direct examination, the government merely showed that Clarkson had passed that mental examination, and nothing more. Even if a further examination by the defendants' attorney not in the form of cross-examination would have been permissible, cross-examination was not, and in all events the denial of any further questioning was not an abuse of discretion. ²

III

The defendants assert that the district court erred in refusing to give requested jury instructions. We review the trial court's denial of the requested jury instructions in view of the record and instructions as a whole and in the context of the trial, reversing only for prejudicial error. United States v. Park, 421 U.S. 658, 674-675 (1975); Wellington v. Daniels, 717 F.2d 932, 938 (4th Cir. 1983).

Defendants claim that the most they did was openly advocate violation of the tax laws and that they were entitled to requested instructions on a First Amendment defense. ³ Having made a timely request, the defendants would have been entitled to an instruction on a First Amendment defense if there were evidence sufficient for a reasonable jury to find in their favor on that account. Mathews v. United States , 485 U.S. 58, 63 (1988). A First Amendment defense is warranted if there is evidence that the speaker's purpose or words are mere abstract teaching of the moral propriety of opposition to the income tax law. See Brandenburg v. Ohio , 395 U.S. 444, 447-48 (1969). "The cloak of the First Amendment envelops critical, but abstract, discussions of existing laws, but lends no protection to speech which urges the listener to commit violations of current law." United States v. Kelley [85-2 USTC ¶9592 ], 769 F.2d 215, 217 (4th Cir. 1985) (construing Brandenburg ).

The evidence in this case, however, does not support a First Amendment defense. The defendants' words and acts were not remote from the commission of the criminal acts. The evidence shows that the defendants held meetings and collected money from attendees whom they instructed and advised to claim unlawful exemptions and not to file income tax returns or pay tax on wages in violation of the United States Tax Code. The evidence shows that the attendees followed the instruction and advice of the defendants, that the attendees' unlawful actions were solicited by the defendants, and that the defendants were aware that the attendees were following their instructions and advice. The evidence discloses that a purpose of the meetings was to encourage people to unlawful actions by convincing them that it was legal to claim false exemptions, to hide income, and to refuse to file income tax returns or pay income tax. The facts in this case are similar to those in United States v. Kelly [85-2 USTC ¶9592 ], 769 F.2d 215 (4th Cir. 1985), in which this court held that Kelly's First Amendment claim was frivolous, and to those in United States v. Buttorff [78-1 USTC ¶9265 ], 572 F.2d 619 (8th Cir. 1978), cert. denied, 437 U.S. 906, in which the court held there was no First Amendment protection. We conclude that no reasonable juror could conclude that the defendants' words and actions were merely advocating opposition to the income tax laws.

We think the defendants' reliance on United States v. Freeman [85-1 USTC ¶9421 ], 761 F.2d 549 (9th Cir. 1985), is misplaced. That case held that a First Amendment defense was applicable to twelve counts of a fourteen count indictment but was not applicable to two counts. In Freeman, with respect to the counts to which the First Amendment was held to apply, the court held that the defendant ". . . directed his comments at the unfairness of the tax laws generally, without soliciting or counselling a violation of the law in an immediate sense." Freeman [85-1 USTC ¶9421 ], at 551-552. In our case, however, the Freeman reasoning does not apply, and the words of this court in Kelley do. As in Kelley, "[i]t was no theoretical discussion of noncompliance with law; action was urged; the advice was heeded and false forms were filed." Kelley [85-2 USTC ¶9592 ], at p. 217.

The defendants' assignment of error regarding requested jury instructions #34 and #35 regarding evidence required to prove a conspiracy likewise has no merit. ⁴ The district court instructed the jury as follows:

What the evidence in the case must show beyond a reasonable doubt the following four elements: First, that two or more persons in some way or manner, positively or tacitly, came to a mutual understanding to try to accomplish a common and unlawful plan, as charged in the indictment.

Second, that the defendant you're considering willfully became a member of such conspiracy. Third, that one of the conspirators during the existence of the conspiracy knowingly committed at least one of the means or methods or overt acts described in the indictment. Fourth, that such overt act was knowingly committed at or about the time alleged in an effort to effect or accomplish some object or purpose of the conspiracy.

An overt act is any transaction or event, even one which may be entirely innocent when considered alone, but which is knowingly committed by a conspirator in an effort to accomplish some object of the conspiracy.

One may become a member of a conspiracy without full knowledge of all of the details of the unlawful scheme or the names and identities of all of the other alleged conspirators. So, if a defendant, with an understanding of the unlawful character of a plan, knowingly and willfully joins in an unlawful scheme on one occasion, that is sufficient to convict him for a conspiracy even though he had not participated at earlier stages in the scheme and even though he played only a minor part in the conspiracy.

Of course, mere presence at the scene of an alleged transaction or event, or mere similarity of conduct among various persons and the fact that they may have associated with each other, and may have assembled together and discussed common aims and interests, does not necessarily establish proof of the existence of a conspiracy. Also, a person who has no knowledge of a conspiracy, but who happens to act in a way which advances some object or purpose of a conspiracy, does not thereby become a conspirator.

The court's instructions to the jury on conspiracy, read as a whole, were not misleading and contained an adequate statement of the elements necessary to convict the defendants of conspiracy. Additionally, both refused instructions amount to little, if anything more than comments on the weight of the evidence, which, although permissible, are not required. The district court did not err in refusing instructions 34 and 35.

The defendants' assignment of error with respect to refusing requested instructions 48 and 49 is without merit. Even if applicable, and called for in any case, the record does not support giving them here. ⁵

IV

The defendants' next assignment of error is as follows: The trial court erred in not granting a verdict in favor of the defendants on the basis that the Constitutional foundation for the federal income tax is uncertain and that prosecution of defendants violated due process.

We are of opinion this assignment of error is without merit.

V

Clarkson challenges his sentence, claiming that the district court incorrectly calculated the amount of tax loss attributable to him and erred in refusing to give him a downward departure of two levels for acceptance of responsibility. Clarkson's base level for sentencing is based on the tax loss which includes the loss from all acts and omissions occurring as part of the same course of conduct or common scheme or plan. U.S.S.G. §2T1.9(a)(1), §1B1.3(a)(2). The government asked the district court to find a tax loss of $330,093.26, but the district court adopted the recommendation of the probation officer in the presentence report, that the amount of tax loss attributable to Clarkson was $295,817.62. Clarkson objects to this amount claiming that it includes calculations for loss involving conduct that was not part of the same course of conduct or common scheme of the conspiracy for which he was convicted.

Clarkson's argument is unpersuasive. Clarkson's conduct in furtherance of the conspiracy is not defined by or confined to just those occasions in which the three defendants were physically together or acted in unison at the Patriot meetings. $219,051.62 of the calculated tax loss was based on conduct by Clarkson occurring during the relevant time period in which Clarkson operated a business known as D-G Labor Services, Inc., which provided individuals for employment to other businesses. Clarkson compensated his D-G Labor Services workers in such a way as to avoid withholding taxes and issuance of IRS W-2 forms. This was a method consistent with and related to that proved at trial of evading or camouflaging income. See Guideline 2T1.1, Application Note 2. The district court was not clearly erroneous in finding that these actions by Clarkson although not necessarily associated with people connected with the Patriot meetings were consistent with the course of conduct and common scheme of the conspiracy.

We have also considered Clarkson's claim that the district court erred in denying a downward departure for acceptance of responsibility and conclude that it has no merit.

The judgment of the district court is accordingly

AFFIRMED.

¹ 18 U.S.C. §371 states:

If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years or both.

² The government persuasively argues that the defendants' brief does not identify except by page number the testimony complained of. We do not rely on this for our decision, however.

³ Defendants requested the following instructions on a First Amendment defense:

#46. The first amendment to the Constitution protects a speaker's words and expressions unless both the intent of the speaker and the tendency of the speaker's words was likely to produce or incite an imminent lawless act, one likely to occur.

The first amendment protects speech that merely advocates non-compliance with the law. If you determine that a speaker's purpose, or the tendency of the speaker's words, was directed to ideas or results remote from the purposes or objective of the alleged conspiracy, then that speech is protected. However, if the intent of the speaker and the tendency of the speaker's words was to produce or incite an imminent lawless act, then the speech is not protected by the first amendment.

#38. A "conspiracy to defraud the United States " is not proven by the mere open defiance of a governmental purpose to enforce a law by urging persons subject to it to disobey it.

⁴ Defendants requested the following:

34. To prove a conspiracy to defraud the United States , there must be proof or evidence submitted which shows something more than completely external interference with the workings of a governmental program, functions or disregard for federal laws.

35. A conspiracy to defraud the United States is not proven by simply showing that parties, including the Defendants, failed to file tax returns and disclose income.

⁵ 48. Reliance upon a decision of the United States Supreme Court is a defense to the element of wilfulness. If you find that the Defendant relied, in good faith, upon a Supreme Court decision, then you must find him not guilty.

49. An American citizen such as the Defendant has a right the [sic] rely upon representations and statements made by the government and appearing in official publications.

 

 

[95-1 USTC ¶50,162] United States of America , Plaintiff-Appellee v. Jack P. Kallin, Defendant-Appellant

(CA-9), U.S. Court of Appeals, 9th Circuit, 93-10765, 3/17/95, 50 F3d 689, Reversing and remanding an unreported District Court decision

[Code Secs. 7201 and 7206 ]

Attempt to evade or defeat tax: Instructions to jury: Communication to jury: Cross-examination: Improper comment: Improper question: Right to counsel: Fraud and false statements.--The conviction of an owner of a hobby store for attempted tax evasion and subscribing to false tax returns was not permitted to stand because the government's extensive references to the exercise of his rights to remain silent and to retain counsel were prejudicial error. During cross-examination of the individual and during closing argument, the government made numerous references to the individual's lack of denial of guilt and his failure to present an explanation of his innocence until trial. The government's references were not inadvertent. They were calculated and stressed to the jury an inappropriate inference of guilt from his silence. Although the lower court instructed the jury to disregard the line of questioning, the instruction was not contemporaneous with the error. The instruction was given the following day. The failure of the jury to convict the individual on all counts did not indicate that the jury was able to disregard the inappropriate comments. The government did not prove beyond a reasonable doubt that the error did not influence the jury's decision in the case. In addition, the lower court did not err in admitting corporate returns from years that were barred by the statute of limitations because those returns were inextricably intertwined with the individual's personal income taxes for the years in question.

Stephen G. Winerip, Assistant United States Attorney, Phoenix , Ariz. 85025 , for plaintiff-appellee. Michelle R. Hamilton, Phoenix , Ariz. , for defendant-appellant.

Before: GOODWIN and SCHROEDER, Circuit Judges, and TASHIMA, District Judge. ^*

OPINION

TASHIMA, District Judge:

Defendant-appellant Jack P. Kallin ("Kallin") appeals his conviction for attempted tax evasion and subscribing to a false tax return. His primary contention is that the government's extensive questioning and comments regarding his exercise of his rights to remain silent and to retain counsel constituted prejudicial error. He also contends that the district court improperly admitted copies of corporate tax returns from years in which he was not charged with tax evasion in violation of Fed. R. Evid. 404(b). Finally, Kallin contends that the district court erred in allowing a government witness to testify that he does not like Mexicans. We reverse the conviction.

FACTS

Kallin owned and operated three Desert Hobbies stores in Phoenix and Tempe , Arizona . Desert Hobbies was incorporated in 1982 as Kallin Enterprises, Inc., with Kallin as president, but continued to operate as Desert Hobbies. Kallin did not report personal income of more than $6,000 for any year from 1982 through 1986. He and his wife reported a joint income of $800 for 1985, and in 1986 they did not file a return. To qualify for a home mortgage, however, Kallin submitted to the lender copies of 1982 and 1983 tax returns reporting earnings of more than $50,000 per year. He purchased a $150,000 home in 1985, purchased a Cadillac in 1985, and owned an airplane as early as 1983. For the years 1985 through 1987, Kallin signed corporate tax returns indicating net operating losses for Kallin Enterprises.

Kallin separated from his wife in 1986 and his daughter Sharla initially remained with him. Sharla eventually left to live with her mother, taking Kallin's business records with her. The district court permitted Sharla to testify that Kallin dislikes Mexicans and told her to leave the house when he discovered that she had a Mexican boyfriend. In March, 1988, Sharla furnished the Desert Hobbies business records to the Internal Revenue Service ("IRS"). These records included a spiral notebook indicating receipts in excess of those reported on the corporate tax returns. Kallin claims that Sharla sought to extort $30,000 from him and delivered the records to the IRS after he refused to pay her extortionate demand.

The IRS initiated a criminal investigation and contacted Kallin concerning the business records. Before asking any questions, IRS agents advised Kallin of his non-custodial rights, including his right to remain silent and his right to retain counsel. Kallin exercised those rights by not answering any questions and seeking the advice of an attorney. The government obtained an indictment on November 27, 1991, charging Kallin and his accountant with eight counts of attempted tax evasion under 26 U.S.C. §7201 . ¹ Kallin was arrested by IRS agents on December 5, 1991 , and given a Miranda warning. He indicated at that time his desire to consult an attorney. On March 31, 1993, a superseding indictment was returned, adding a ninth count of subscribing to a false fiscal year 1987 corporate tax return, under 26 U.S.C. §7206(1) . ²

At trial, the government presented evidence that the Desert Hobbies stores had two cash registers and the receipts of each were recorded separately. An expert witness testified that none of the receipts from the second registers were reported to the IRS, resulting in an under-reporting of approximately $1 million. Kallin testified that the records the government attributed to the second register were actually records of total receipts and the government was double-counting the receipts from the second register. The government rebutted this assertion with testimony that the records Kallin had identified as total receipts corresponded to the tapes from the first register. During cross-examination of Kallin and during its closing argument, the government repeatedly commented on Kallin's retention of counsel and his failure to come forward with his explanation of the two sets of records until trial. ³ Defense counsel moved for a mistrial based on this line of questioning. The district court denied the motion the following day and instructed the jury to disregard the previous day's testimony concerning Kallin's silence and retention of counsel. ⁴

In closing argument, the government urged that the jury not believe Kallin:

Five years after the investigation began, Mr. Kallin came up with this story for the first time. And then he didn't wait--he waited until one week after the trial began, till the last moment of the trial. The idea, I submit to you, was to concoct a story and reveal, at the last moment, when the Government could do the least to respond to him. He's tried to fool you.

Defense counsel's timely objection to this statement was overruled.

Kallin was convicted on counts four and five (covering personal returns for 1985 and 1986) and counts seven, eight and nine (covering corporate returns for fiscal years 1986 and 1987). He was acquitted of the remaining counts. Kallin then moved for a new trial. The court denied the motion, stating, "I believe that the evidence against Mr. Kallin is overwhelming. To be honest, I really don't understand how the jury could have acquitted him of any of the counts. And I think that my instruction to the jury was pretty emphatic. . . ."

STANDARDS OF REVIEW

Whether improper references to a defendant's silence and retention of counsel are harmless is reviewed under a "harmless-beyond-a-reasonable-doubt" standard. Brecht v. Abrahamson, 113 S.Ct. 1710, 1717 (1993).

"[T]he issue of whether the evidence falls within the scope of Rule 404(b) is reviewed de novo." United States v. Arambula-Ruiz, 987 F.2d 599, 602 (9th Cir. 1993); United States v. Mundi, 892 F.2d 817, 820 (9th Cir. 1989), cert. denied, 498 U.S. 1119 (1991). A trial court's decision to admit evidence of other crimes pursuant to Fed. R. Evid. 404(b) is reviewed for abuse of discretion. Id. ; United States v. Hill, 953 F.2d 452, 455 (9th Cir. 1991). "We review the district court's decisions balancing the probative value of evidence against its prejudicial effect for abuse of discretion." United States v. Kessi, 868 F.2d 1097, 1107 (9th Cir. 1989). "The district judge is given wide latitude in determining the admissibility of evidence under this standard." United States v. Kinslow, 860 F.2d 963, 968 (9th Cir. 1988), cert. denied, 493 U.S. 829 (1989). The district court's determination of whether or not evidence is relevant under Rule 402 is also reviewed for abuse of discretion. United States v. Schaff, 948 F.2d 501, 505 (9th Cir. 1991).

Under the abuse of discretion standard, a reviewing court cannot reverse unless it has a definite and firm conviction that the district court committed a clear error of judgment in reaching its conclusion or based its decision on an erroneous conclusion of law. United States v. Plainbull, 957 F.2d 724, 725 (9th Cir. 1992); Nilsson, Rob bins, Dalgarn, Berliner, Carson & Wurst v. Louisiana Hydrolec, 854 F.2d 1538, 1546 (9th Cir. 1988).

DISCUSSION

I. Prosecutorial Comment on Kallin's Silence and Retention of Counsel

The government admits that it violated Kallin's due process rights by repeated references to his retention of counsel and failure to come forward earlier with his explanation of innocence, but argues that the error was harmless."[I]t does not comport with due process to permit the prosecution during trial to call attention to [the defendant's] silence. . . ." Doyle v. Ohio , 426 U.S. 610, 619 (1976); United States v. Foster, 985 F.2d 466 (9th Cir. 1993). The reasoning of Doyle extends to comments on a defendant's decision to retain counsel. United States v. Daoud, 741 F.2d 478, 480-81 (1st Cir. 1984); United States v. McDonald, 620 F.2d 559, 562-63 (5th Cir. 1980). "The right to counsel is included in the Miranda warnings, and as such is covered by the implicit assurance that invocation of the right will carry no penalty." ⁵ Daoud, 741 F.2d at 480.

The government bears the burden of proving that the admitted errors pass muster under the harmless-beyond-a-reasonable-doubt standard. Brecht, 113 S.Ct. at 1717. The court must determine "whether the prosecutor's conduct was harmless by 'considering the extent of comments made by the witness, whether an inference of guilt from silence was stressed to the jury, and the extent of other evidence suggesting defendant's guilt.' " Foster, 985 F.2d at 468 (quoting United States v. Newman, 943 F.2d 1155, 1158 (9th Cir. 1991)).

The mandate of Doyle is that the prosecution not call attention to a defendant's silence. Where one impermissible question about a defendant's silence was asked and an immediate objection was sustained before the question was answered, the court did not find a violation of Doyle because, through this minor slip, the prosecutor had not been allowed to impeach the defendant or call attention to his silence. Greer v. Miller, 483 U.S. 756, 764 (1987). This Circuit has found that three improper questions and answers required reversal, despite a strong jury instruction to disregard the questions. Newman, 943 F.2d at 1158. Seven questions about a defendant's silence, answered after an objection was overruled, followed by a comment during closing argument, were sufficiently harmful to require reversal. Foster, 985 F.2d at 468-69. Only five impermissible questions and a comment in closing argument formed the error in Doyle itself. 426 U.S. at 613-14.

The extent of error in the case at bench far exceeds these examples. The prosecutor's line of questioning and closing remarks were not inadvertent but were calculated so that an inappropriate "inference of guilt from silence was stressed to the jury. . . ." Foster, 985 F.2d at 468 (citing Newman, 943 F.2d at 1158). An impermissible implication again was permitted, without any curative instruction, when the prosecutor argued in closing that "Mr. Kallin came up with this story for the first time" at trial.

At the hearing on Kallin's motion for a mistrial, the prosecutor stated:

Obviously what I'm trying to do is show that it's mighty late in the day to be coming up with a story that you're innocent, if in fact you're innocent. . . . [T]here's certainly an implication that can be drawn . . . that if you don't go to the government and tell them that you're innocent, then perhaps you're lying at trial when you say for the first time that you're innocent.

This is precisely the inference that Doyle forbids. ⁶ "Notwithstanding the instructions from the trial judge, the effect of those statements, . . . was to suggest to the jury that [the defendant] must have been guilty because an innocent person would not have remained silent." Newman, 943 F.2d at 1158. In this case, the government did not simply bring Kallin's silence and retention of counsel to the attention of the jury, but actively encouraged the jury to draw an inference of guilt.

Although the government admits that the error was "extensive," it argues that the error was harmless in the overall context of the trial, including the district court's curative instruction and definitive evidence of guilt.

A. The Curative Instruction

The district court instructed the jury to disregard Kallin's testimony that Kallin "had never denied anything before this trial, and he hired a lawyer." The instruction was not contemporaneous with the error and was not given until the day following the improper line of questioning, long after the impermissible inference was implanted in the minds of the jury. In giving his instruction to the jury, the judge reiterated the impermissible content of the testimony, again calling attention to defendant's silence.

The court "normally presume[s] that a jury will follow an instruction to disregard inadmissible evidence inadvertently presented to it, unless there is an 'overwhelming probability' that the jury will be unable to follow the court's instructions. . . ." Greer, 483 U.S. at 766 n.8 (citing Richardson v. Marsh, 481 U.S. 200, 208 (1987)). This presumption, however, is "rooted less in the absolute certitude that the presumption is true than in the belief that it represents a reasonable practical accommodation. . . ." Richardson, 481 U.S. at 211. With regard to "an explicit statement the only issue is, plain and simply, whether the jury can possibly be expected to forget it in assessing the defendant's guilt." Id. at 208.

The government argues that the jury's ability to follow the court's instruction is evidenced by its failure to convict on all counts. ⁷ In support of drawing such an inference from the split verdict, the government cites cases dealing with a jury's ability to compartmentalize information in multiple defendant cases. United States v. Unruh, 855 F.2d 1363, 1374 (9th Cir. 1987) ("The best evidence of the jury's ability to compartmentalize the evidence is its failure to convict all defendants on all counts."), cert. denied, 488 U.S. 974 (1988); United States v. Baker, 10 F.3d 1374, 1390 (9th Cir. 1993), cert. denied, 115 S. Ct. 330 (1994).

In the context of this case, where the information to be disregarded applied equally to all counts, the split verdict is ambiguous; it could just as well indicate that the jury was predisposed to acquit on all counts but was influenced to partially convict by the Doyle violation. The partial acquittal indicates that the government's case was not definitive and that the jury's consideration of the impermissible inference may have been a factor resulting in conviction on some counts. This court cannot conclude that the jury's split verdict provides any evidence of its ability to follow the district court's curative instruction. Given the extent of the error and the delay in the curative instruction, we do not believe that the jury could "possibly be expected to forget it in assessing the defendant's guilt. . . ." Richardson, 481 U.S. at 208.

B. Extent of Other Evidence

The government argues that the error was harmless because, as the district court stated, the evidence of Kallin's guilt was overwhelming. The evidence included the personal income and business losses that Kallin reported in contrast to his substantial purchases during the same time period, the alternate tax returns that Kallin produced to qualify for a mortgage, testimony of Kallin's family and employees, and Kallin's business records.

The government admits that Kallin presented an alternative version of the facts and that "if defendant's account were true, as he insisted, the business receipts reported on the Desert Hobbies returns were not false at all." However, it claims its rebuttal case demonstrated that Kallin's version could not be true. Still, the government's admission concerning the importance of the jury's credibility assessment "only serves to underscore the critical nature of [defendant's] own testimony and the prejudicial effect of the government's use of the post-arrest silence." Foster, 985 F.2d at 469. The inference of guilt based on Kallin's silence was firmly planted in the minds of the jurors and undoubtably contributed to the government's undermining of Kallin's credibility.

The error in this case infected the jury on the crucial issue of credibility and the government has not proven beyond a reasonable doubt that the error did not influence the outcome of the case. We have noted our concern "that appropriate steps be taken to assure a high level of professional advocacy for prosecutors. . . . We perceive no valid excuse for this violation of [Kallin's] rights and reverse [his] conviction because of it." Id. The prosecutorial misconduct in the instant case was similarly inexcusable and a conviction based on such egregious error cannot be allowed to stand. We reverse and remand for a new trial.

II. Admission of Tax Returns and Statement of Racial Bias

Because the same issues will likely arise on remand, we find it necessary to rule on Kallin's remaining assignments of error.

A. Admission of Tax Returns

Kallin argues that the district court erred in admitting into evidence the Kallin Enterprises corporate tax returns for the fiscal years 1982 through 1984. The statute of limitations prevented prosecution based on Kallin Enterprises taxes for fiscal years 1982 through 1984, but Kallin was indicted concerning his personal income taxes for this period. Kallin contends that the challenged returns were utilized at trial to establish defendant's propensity to file false corporate returns in violation of Fed. R. Evid. 404(b).

The government contends that Kallin's under-reporting of income on corporate returns was integral to his scheme to evade his personal income taxes and "[e]vidence should not be treated as 'other crimes' evidence when 'the evidence concerning the [other] act and the evidence concerning the crime charged are inextricably intertwined.' " Mundi, 892 F.2d at 820 (quoting United States v. Aleman, 592 F.2d 881, 885 (5th Cir. 1979)).

The 1982 through 1984 corporate returns showed corporate losses and reported no salary paid to Kallin, so that the government had to establish that these returns were false before it could establish Desert Hobbies as a source of Kallin's alleged unreported personal income. Kallin asserts that the government never linked the challenged returns to Kallin's personal returns. Despite alleged inconsistencies in the government's actual use of the returns at trial, Kallin's personal and corporate returns were prepared by the same accountant throughout the period in question and the government contention that the various returns were linked is persuasive. Because the challenged returns are inextricably intertwined in the larger scheme, they are not 404(b) evidence and the district court did not err in admitting them.

B. Admission of Statement Concerning Racial Bias

Kallin argues that the district court erred in allowing Sharla to testify that he dislikes Mexicans. The government contends that the statement was relevant to Sharla's credibility because it explained why she left Kallin's home and took his business records. However, Sharla's credibility was not in issue. Her only part in the case was to supply certain of Kallin's business records to the IRS. The authenticity of these records was never questioned. Thus, the reason Sharla left Kallin was not probative of any matter at issue in the case. The challenged testimony was not relevant. Fed. R. Evid. 401 (relevant evidence is evidence that "has a tendency to make the existence of any material fact more . . . or less probable" (emphasis added)). The district court abused its discretion in admitting it. Schaff, 948 F.2d at 505. Even if the evidence had some slight probative value, its prejudicial effect far outweighed any probative value and it should not have been admitted under Fed. R. Evid. 403. ⁸

REVERSED and REMANDED.

^* Hon. A. Wallace Tashima, United States District Judge for the Central District of California, sitting by designation.

¹ Five of these counts related to Kallin's personal income taxes for 1982 through 1986 and three related to Kallin Enterprises' corporate taxes for fiscal years 1985 through 1987.

² The long delay before trial was caused by the withdrawal of Kallin's counsel due to a conflict of interest and proceedings to determine Kallin's competency to stand trial.

³ The district court overruled timely objections by defense counsel to the following line of questioning:

"Q. Mr. Kallin, you didn't tell the IRS at that time [of initial contact with the IRS in 1988] that you were innocent, did you? . . .

"A. Oh. No, sir, I didn't tell them I was innocent. . . .

"Q. And you hired an attorney, a Mr. Silver. Isn't that correct? . . .

"Q. And he was a criminal defense attorney? . . .

"A. I don't know what Mr. Silver's credentials are. . . . He's an attorney. . .

"Q. And you retained him for more than a year. Isn't that correct? . . .

"A. Yeah. I'm going to say yes. I don't know.

"Q. And over that year, or thereabouts, you never approached the IRS, with or without the advice of counsel, to tell them that you were innocent. Isn't that correct? . . .

"A. Okay. I'm not sure, you know. Then fine, we'll go that route. You know, that sounds to me like good advice, I guess. That's from an attorney, so it must be good advice, to keep my mouth shut . . .

"Q. At that time [of arrest], you didn't tell anybody that you were innocent and ask to be heard on that matter? . . .

"A. I didn't say a thing to Mr. Shupnik [the arresting officer]. I think he thought I was the most dangerous person--

"Q. Well, you didn't say anything to Mr. Shupnik, right?

"A. No, sir, I didn't. . . . I was told to keep my mouth shut, in fact. . . .

"Q. And . . . in that time did you come forward to say that you were not guilty in this matter?

"A. I don't remember doing that, no.

"Q. Okay. In five or six years since its been brought--first suggested by the government, after Sharla took your records, this is the first time that you have told an entire story explaining how and why it is that you're innocent. Isn't that correct?

"A. Well, if I can say something. At the time I was arrested, okay, I was told--I was read my rights. . . .

"Q. But in all the time since this matter was undertaken, this is the first time you've told a comprehensive story indicating that you are innocent. Isn't that right?

"A. Yes, sir."

⁴ The judge instructed the jury:

Ladies and gentlemen, you remember yesterday, during the cross-examination of Mr. Kallin, Mr. Winerip [the prosecutor] was--went into the fact that he had never denied anything before this trial, and he hired a lawyer. I want to instruct you to disregard that testimony. He doesn't have to talk to the Internal Revenue Service. He doesn't--if he knows that the Internal Revenue Service is checking him, he has--certainly has the right to seek the advice of a lawyer as to what to do.

And he was asked yesterday, "even in the past two years you haven't denied it." Well, he did deny it. He pleaded not guilty to the charge, and that's why we're here to decide it. But the fact that he has not denied it to the Internal Revenue, the fact that he's hired a lawyer, really has nothing to do with this case.

⁵ The government concedes error as to impeachment based on both post-Miranda warning silence and pre-Miranda warning silence because the IRS admin istered a non-custodial warning at the outset which advised Kallin of his right to remain silent and his right to counsel. The IRS warnings, like Miranda warnings, contain an implicit assurance that the assertion of the right will carry no penalty. Doyle, 426 U.S. at 618.

⁶ Given the prosecutor's explanation of his motive, the government's argument that the errors were unintentional is dubious, except to the extent the experienced prosecutor did not know that his clear intentions were erroneous. In any event, the subjective intent of a prosecutor does not undo error where reasonable jurors could have drawn adverse inferences in violation of Doyle. United States v. Baker, 999 F.2d 412, 416 (9th Cir. 1993) United States v. Negrete-Gonzalez, 966 F.2d 1277, 1281 (9th Cir. 1992).

⁷ The district court agreed with this reasoning and noted that the "fact that the jury acquitted him of three or four counts suggest[s] to me that they followed my instructions. In other words, they did not let his silence affect them."

⁸ At least one member of the jury has a Hispanic surname, but that is not the point.

It does not take much imagination to understand how such grossly biased comments would be viewed by the jury. We need not know the racial composition of the jury, for nearly all citizens find themselves repelled by such blatantly racist remarks and resentful of the person claimed to have uttered them.

United States v. Ebens, 800 F.2d 1422, 1434 (6th Cir. 1986). The only purpose this evidence could serve would be to prejudice the jury against Kallin.

 

 

[90-1 USTC ¶50,033] United States of America , Appellee v. Loren M. Barta, Appellant

(CA-8), U.S. Court of Appeals, 8th Circuit, 88-5521, 10/30/89, 888 F2d 1220, Affirming an unreported District Court decision

[Code Secs. 7201 and 7206 ]

Criminal penalties: Willfullness: Mental incompetency: Cross-examination: Expert witnesses: Jury instructions.--An attorney convicted for tax evasion and for filing false income tax returns was properly tried and sentenced despite several harmless errors. The trial court acted within its discretion in excluding an expert witness who would have testified that the attorney's detail phobia and alcoholism eliminated any willfulness prerequisite in the criminal prosecution. The attorney's defense counsel failed to present requested documentation evidencing the relationship between the attorney's alleged mental condition and his alleged lack of intent. While the trial court permitted improper impeachment of several defense character witnesses, such improprieties constituted harmless error where defense counsel sufficiently rehabilitated the injured witnesses. Finally, the trial court did not err when it instructed the jury on the law and presented its own instruction on the defendant's incompetency theory.

Franklin L. Noel, Assistant United States Attorney, Minneapolis , Minn. 55401 , for appellee. Richard P. Clem, Minneapolis , Minn. , for appellant.

Before GIBSON, Circuit Judge, BRIGHT, Senior Circuit Judge, and WOLLMAN, Circuit Judge.

BRIGHT, Senior Circuit Judge:

Loren M. Barta appeals his conviction for two counts of tax evasion under 26 U.S.C. §7201 (1982) and two counts of filing false tax returns under 26 U.S.C. §7206(1) (1982), alleging numerous errors in the conduct of the trial. We reject Barta's contentions and affirm.

I. BACKGROUND

In a six-count indictment, the Government charged Loren M. Barta, the appellant, with tax evasion and filing false returns in 1982, 1983 and 1984. The Government's evidence established that Barta, a lawyer in New Prague and North Mankato , Minnesota , substantially understated his income during those three years. Specifically, Barta's 1982 income tax return disclosed taxable income of $2,992.40 when his actual earnings exceeded $27,000. In 1983, Barta disclosed income of $15,038.66 when the true amount was more than $69,000. In 1984, Barta declared no taxable income when he actually earned more than $44,000.

In presenting his defense, Barta did not dispute the Government's figures showing understated income, nor did he dispute Government allegations that he owed additional taxes on his income for the years in question. Barta denied, however, that he had any intent to defraud the Government or that he willfully filed false returns. Rather, Barta claimed that a personality disorder called detail phobia, combined with alcoholism, stress and health problems, caused an admittedly negligent oversight on his part. In support of this contention, Barta introduced both lay testimony and documentary evidence demonstrating his aversion to numbers. In addition, Barta elicited character testimony from a number of witnesses, including some witnesses called by the Government, about his community reputation for truth and veracity.

The Government disputed Barta's negligent-oversight defense and presented, as evidence of willfulness, Barta's attempt to obtain assurances that the tax examiner would keep his audit a civil matter, as well as Barta's practice of recording checks he deposited in his firm account but not recording checks for which he obtained cash. Further, to refute Barta's detail phobia defense, the Government presented evidence of Barta's demonstrated attention to detail while litigating complex lawsuits and in applications for personal loans.

A jury found Barta guilty of the counts for tax evasion and filing false returns in 1983 and 1984, but acquitted Barta of the charges from 1982. The district judge ¹ sentenced Barta to two five-year terms on the tax evasion counts and two three-year terms on the false return counts, all to be served concurrently, but suspended all but six months of the concurrent prison terms and ordered Barta placed on probation for three years thereafter.

Barta appeals, asserting the trial court erred in excluding expert testimony relevant to intent, permitting improper impeachment of character witnesses, refusing to give requested jury instructions and unfairly advantaging the prosecution by the conduct of the trial. We reject these contentions for the reasons discussed below.

II. DISCUSSION

A. Expert Witness

At trial, Barta sought to bolster his negligence defense by calling Dr. John Cronin, Ph.D., to testify about Barta's alleged detail phobia. The court, however, excluded this expert testimony upon the Government's motion. Barta challenges this ruling, alleging it infringed on his right to present a defense.

Prior to trial, Barta gave notice of his intention to introduce expert testimony of a mental condition bearing on guilt. See Fed. R. Crim. P. 12.2(b). The notice prompted a Government motion in limine questioning admissibility of the testimony under Fed. R. Evid. 702, 704. The trial judge did not make any preliminary ruling, but rather instructed Barta's attorney at trial as follows:

With reference to the expert, if you will give me a memo with reference to who the expert is, what his degrees are and all of that, his background, and if you'd give me proposed colloquy [sic], question and answer --what questions you intend to ask him and what his known answers are, then I can pass on it.

Defense counsel complied only in part with the judge's direction. Although counsel submitted a curriculum vitae for Dr. Cronin, a Minnesota psychologist with professional credentials encompassing child psychology and education, chemical dependency, physical disability and stress-related dysfunction, counsel failed to supply the requested colloquy of questions and predicted answers. Instead, counsel submitted the one-and-one-half page outline reproduced below. ²

With few exceptions, this outline failed to provide direct statements about Dr. Cronin's opinions or the substance of his expected testimony. Rather, the outline merely paraphrased the subjects to be covered, with little accompanying explanation. From what can be garnered from these cursory notations, Dr. Cronin apparently would have concluded, based on interviews, medical records and psychological test results, that Barta had become dysfunctional during 1982-84 due to detail phobia and alcoholism. The outline failed to articulate, however, any cognizable relationship between Barta's mental condition and his alleged lack of intent to commit the instant crimes. Moreover, when the court excluded Dr. Cronin's testimony at trial, Barta's counsel made no further offer of proof, even though Dr. Cronin was present in the courtroom at that time. See Fed. R. Evid. 103(b) (permitting the court to direct an offer of proof in question-and-answer form).

The district court, in a formal order filed post-trial, listed several grounds for excluding the Cronin testimony, including: (a) the jury's ability to understand Barta's alleged fear of detail without expert assistance; (b) the likelihood that such testimony would confuse the issues; (c) Dr. Cronin's questionable qualifications to testify about detail phobia; and (d) an insufficient showing that the mental health community generally accepted detail phobia as a psychiatric disorder.

In reviewing whether testimony of an expert should be received, we first observe that the Federal Rules of Evidence approve a broad role for experts in the trial of a case, civil or criminal. Specifically, Fed. R. Evid. 702 directs:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.

Additionally, the advisory committee notes to Rule 702 recite in part:

Whether the situation is a proper one for the use of expert testimony is to be determined on the basis of assisting the trier . . . .

The rule is broadly phrased. The fields of knowledge which may be drawn upon are not limited merely to the "scientific" and "technical" but extend to all "specialized" knowledge.

Consequently, we believe the concept expressed by the Rules is sufficiently broad to embrace psychiatric and psychological testimony from those who possess specialized knowledge concerning mental aberrations in human behavior, when such knowledge will help the jury to understand relevant issues in the case.

We do not decide here, however, whether this court would have permitted Dr. Cronin's testimony on detail phobia had we sat as the trial court in this case. See United States v. Felak [87-2 USTC ¶9594 ], 831 F.2d 794, 797 (8th Cir. 1987). Absent improper infringement on the accused's right to present a defense, see United States v. Shorter [87-1 USTC ¶9127 ], 809 F.2d 54, 59, 61-62 (D.C. Cir.), cert. denied, 484 U.S. 817 (1987); United States v. Davis, 772 F.2d 1339, 1347-48 (7th Cir.), cert. denied, 474 U.S. 1036 (1985), trial judges have considerable discretion to admit or exclude expert testimony in a given case. United States v. Vik, 655 F.2d 878, 880 (8th Cir. 1981). For a number of reasons, under the circumstances of this case, we conclude that the trial judge acted within his discretion in excluding Dr. Cronin's testimony.

At the outset, we note that this circuit has upheld trial court decisions excluding expert testimony similar in substance to that to which Dr. Cronin might likely have given. For example, in United States v. Felak, 831 F.2d at 797-98, a tax evasion case, we upheld a trial court ruling excluding psychiatric testimony of a defendant's obsessive, mistaken belief in voluntary income tax payments, even though such testimony suggested an absence of willful intent. As well, in United States v. Ellsworth [84-2 USTC ¶9710 ], 738 F.2d 333, 336 (8th Cir.), cert. denied, 469 U.S. 1042 (1984), we approved the exclusion of a psychiatrist's unsupported assertions about a taxpayer's good faith belief in the voluntariness of income taxes as evidence unnecessary to assist the jury under Rule 702.

Additionally, other circuits have sometimes excluded expert testimony under comparable circumstances. See United States v. Kepreos, 759 F.2d 961, 964 (1st Cir.) (expert psychiatric testimony about defendant's diminished ability to attend to subtle details in his surroundings excluded from fraud prosecution even though relevant to intent), cert. denied, 474 U.S. 901 (1985); United States v. West, 670 F.2d 675, 682 (7th Cir.) (expert testimony about bribery defendant's limited intelligence excluded even though offered to show defendant's good faith belief that he had accepted a legitimate gift), cert. denied, 457 U.S. 1124, 1139 (1982).

From our reading of Rule 702, the advisory committee notes and the above cases, the exclusion of the proffered expert testimony in this case presents an interesting question. This is especially true when we consider that the detail phobia testimony proffered here may well have presented a novel psychiatric or psychological theory to negate Barta's intent. See United States v. Shorter, 809 F.2d at 60-61; cf. United States v. Lewellyn, 723 F.2d 615, 619-20 (8th Cir. 1983) (defendant claiming insanity due to pathological gambling must demonstrate that the mental health community generally accepts the principles underpinning his theory).

Additionally, we are constrained, as was the trial court, by Barta's failure to demonstrate, by an appropriate offer of proof, the relevance of Dr. Cronin's testimony to this case--particularly, the relationship, if any, existing between Barta's alleged detail phobia and his misstatements of taxable income. As Fed. R. Evid. 103(a) (2) provides, error may not be predicated upon a ruling which excludes evidence unless "the substance of the evidence was made known to the court by offer [of proof] or was apparent . . . ."

Barta has failed to make the necessary showing that the trial judge abused his discretion by excluding Dr. Cronin's testimony.

B. Examination on Character

Barta asserts the trial court erred in permitting the Government to impeach character witnesses with questions premised on an assumption of guilt. Specifically, the Government called Harry Caldis, an insurance company employee, to testify to fees the company paid Barta for legal services rendered. On cross-examination by defense counsel, however, Caldis also testified to Barta's community reputation for "high character" and trustworthiness. Consequently, on redirect, the prosecutor elicited the following testimony over objection:

Q. I guess what I'm getting at, Mr. Caldis, is you testified as to Mr. Barta's reputation in the community.

What I'm trying to find out is if your opinion of that reputation would change if, if the facts showed that he had, in fact, lied on his income tax return.

A. I would expect that if I had heard that Mr. Barta had deliberately falsified his own income tax return, that certainly would probably affect my opinion of Mr. Barta.

The objection to these questions clearly should have been sustained as unfairly undermining the presumption of innocence. See United States v. Candelaria-Gonzalez, 547 F.2d 291, 294 (5th Cir. 1977). In Candelaria-Gonzalez, the Fifth Circuit struck down as improperly prejudicial similar questions designed to impeach character witness testimony of the accused's good reputation, noting:

The nature of the questions put to [defendant's] witnesses by government counsel, however, was a far cry from any concept of formulated community opinion. Rather, the questions posed sought speculative responses resting upon an assumption of guilt. Government counsel asked if [defendant's] reputation would be affected if he were convicted of the alleged crime. These hypothetical questions struck at the very heart of the presumption of innocence which is fundamental to Anglo-Saxon concepts of fair trial. We think that the risk of prejudice to defendant's basic rights from such questions requires reversal. The questions put have no place in a criminal trial.

Id. at 294 (citations omitted) (emphasis in original). See also Little v. United States, 93 F.2d 401, 408 (8th Cir.), cert. denied, 303 U.S. 644 (1937).

Although we hold that the questions asked and answered during the prosecutor's redirect examination constituted error, this case does not require reversal. See Fed. R. Crim. P. 52(a) (defining harmless error); 28 U.S.C. §2111 (1982) (same). On recross, Barta's counsel ably rehabilitated the witness by eliciting statements that the witness' opinion would not change if the misstatements on Barta's tax returns had resulted from mistake or neglect. Further, the witness testified that he would believe Barta's professions of non-willfulness. Thus, the error contributed nothing to the verdict and, consequently, was harmless. See Chapman v. California, 386 U.S. 18, 24 (1967); United States v. McCrady, 774 F.2d 868, 873-74 (8th Cir. 1985); see also United States v. Polsinelli, 649 F.2d 793, 797-98 (10th Cir. 1981) (reversal required because character witness' answers to impeaching questions greatly detracted from their credibility).

Barta also contends that the Government improperly cross-examined defense character witnesses testifying to his community reputation for truth and veracity. While cross-examining defense witnesses, the prosecutor did not inquire whether facts showing that Barta had "lied on his income tax return" would affect their conclusions, but did ask whether these witnesses possessed familiarity with the facts underlying the present charges. Such questions also exceed the bounds of propriety, premised, as they are, on a presumption of guilt. These questions permitted the Government to improperly bolster the weight of its own evidence by implying that the witnesses might have answered differently had they heard the same evidence as the jury. Cf. United States v. Candelaria-Gonzalez, 547 F.2d at 294-95 (prosecutor's questions to impeach character witness improperly raised inculpatory testimony by a drug enforcement agent to the status of accepted fact). In the present case, however, Barta failed to object, and we decline to find plain error on this record. See United States v. Young, 470 U.S. 1, 15 (1985).

C. Instructions

Barta asserts error in the trial court's refusal to adequately instruct the jury on his negligence/good faith theory of defense. Specifically, Barta requested jury instructions that

Mere negligence, even gross negligence, is not sufficient to constitute willfulness under the criminal law.

and:

If a person, in good faith, believes that he has paid all the taxes he owes, he cannot be guilty of criminal intent to evade the tax. But if a person acts without reasonable ground for belief that his conduct is lawful, it is for the jury to decide whether he acted in good faith, or whether he willfully intended to evade the tax. This issue of intent, as to whether the Defendant willfully attempted to evade or defeat the tax, is one which the jury must determine from a consideration of all the evidence in the case bearing on the Defendant's state of mind.

Having reviewed the instructions in full, we conclude that the court fully and fairly instructed the jury on the law. ³ The court gave full instructions on the elements of the crimes charged and further advised the jury as follows:

And, of course, the defendant's lawyer argued to you, and his position is that he denies the government's claim that he committed these criminal acts. He admits that he owes taxes on unreported income for each of these years, '82, '83 and '84, but he denies that he willfully lied when signing his returns and denies that he acted with an intent to defraud the United States . Defendant asserts that the existence of a psychological condition concerning his inability to deal with numbers and with detail, especially when viewed in connection with alcoholism and stress problems, which he claims to have suffered during the years in question supports the conclusion that he did not act with a criminal intent.

The instructions given adequately informed the jury of Barta's theory of defense. Compare United States v. Bartlett, 856 F.2d 1071, 1082 (8th Cir. 1988) (sufficient theory of defense instruction given); United States v. Ammons, 464 F.2d 414, 417 (8th Cir.) (same), cert. denied, 409 U.S. 988 (1972) with United States v. Casperson, 773 F.2d 216, 222-24 & n.9 (1985) (theory of defense instruction not sufficient). As we have noted on numerous previous occasions, a litigant is not entitled to specific wording. United States v. Bartlett, 856 F.2d at 1083; United States v. Casperson, 773 F.2d at 223; United States v. Reda, 765 F.2d 715, 719 (8th Cir. 1985).

D. Fair Trial

Barta contends that the trial court accorded the prosecutor special privileges on numerous occasions during proceedings in his case, thus depriving him of a fair result. For example, on the day the trial began, Barta and his counsel arrived in the courtroom first and selected, from two available counsel tables, the one positioned nearer the jury box. When the trial judge entered the courtroom, however, he directed the defense to move, stating that the table belonged to the prosecutor by tradition. Barta further asserts that the court accorded the prosecutor certain other advantages, specifically, allowing the prosecutor to: (a) explain a stipulation to the jury; (b) withdraw a motion ex parte; (c) get in "the last word" by scheduling a weekend recess following the prosecutor's rebuttal argument but before jury instructions; and (d) call a defense post-trial motion. Barta contends these privileges gave the prosecutor control of the courtroom and created an appearance that the prosecutor possessed a privileged status with the court.

Appellant's contention needs but brief comment. With one exception, the timing of closing arguments, Barta failed to raise proper objection to any of these matters before the district court. Even assuming the objections had been properly preserved, however, these incidents do not establish unfairness in the trial. Compare United States v. Nelson, 570 F.2d 258, 261-62 (8th Cir. 1978) (no prejudice to defendant from trial court's courtroom conduct); Skogen v. Dow Chem. Co., 375 F.2d 692, 704-06 (8th Cir. 1967) (trial judge acted within his discretion to control courtroom) with United States v. Candelaria-Gonzalez, 547 F.2d at 295-97 (court's disparaging remarks exceeded bounds of discretion). This court declines, especially in the absence of proper objection, to advise trial judges about how to control their courtrooms. See United States v. Nelson, 570 F.2d at 262; see also United States v. Young, 470 U.S. at 10, 16; Geders v. United States , 425 U.S. 80, 86-87 (1976). The trial judge in this case has a proven record of consideration and fairness toward litigants. Further, the so called ex parte conversation complained of here occurred in open court on the record and that record shows, contrary to defense assertions, that the prosecutor merely advised the judge of his intent to withdraw the motion on the record at a later time. ⁴

III. CONCLUSION

Having carefully reviewed the record, we ascertain no unfairness or prejudicial error in the trial.

Affirmed.

¹ The Honorable Edward J. Devitt, United States District Judge for the District of Minnesota.

² OUTLINE OF CRONIN TESTIMONY

1. BACKGROUND/EDUCATION/PUBLICATIONS SUBMITTED BY WAY OF CURRICULUM VITAE

2. EXAMINATION AND TESTING OF BARTA

THE DEFENDANT SUBMITTED TO THE FOLLOWING TESTING PROCEDURES: THE WECHSLER MEMORY SCALE--REVISED, WECHSLER ADULT INTELLIGENT SCALE-- REVISED, MMPI PROFILE AND WORD AND NUMBER ASSESSMENT INVENTORY. IN ADDITION, I EXAMINED THE ST. MARY'S HOSPITAL RECORDS AND INTERVIEWS WITH HIM AT THE PRIMARY BEHAVIORAL HEALTH CLINIC.

3. CONCLUSION TO A DEGREE OF REASONABLE PSYCHOLOGICAL CERTAINTY, WHETHER BARTA SUFFERS FROM ANY MENTAL OR EMOTIONAL DEFECT, DEFICIENCY OR CONDITION?

SUFFERS FROM "DETAIL PHOBIA"

CLINICALLY--DIAGNOSIS OF OBSESSIVE/COMPULSIVE, NARSCISSTIC [sic] PERSONALITY

MANIFESTS SELF IN INABILITY TO DEAL WITH NUMBERS OR DETAIL.

ALSO SUFFERS FROM ALCOHOLISM, WHICH HAS INTENSIFIED, TRIGGERED DIFFICULTY WITH DETAIL PHOBIA TO EXTENT BARTA HAS BECOME DYSFUNCTIONAL. (KNOWN PSYCHIATRIC CONDITIONS AS DESCRIBED IN DIAGNOSTIC STATISTICAL MANUAL OF MENTAL DISORDERS, III, 1985 AS REVISED)

4. EXPLAIN "DETAIL PHOBIA"--CHARACTERISTICS OF PHOBIA

EXPLAIN DIFFERENCE BETWEEN THOSE WHO DON'T LIKE DETAIL AND THOSE WHOSE PROBLEM CONSTITUTES A PERSONALITY DISORDER (ILLUSTRATE--MOTIVATION ANALYSIS)

5. EXPLAIN CHRONIC PERSISTENT ALCOHOL ABUSE AND ITS EMOTIONAL AND PHYSICAL IMPACT.

EXPLAIN RELATIONSHIP TO PHOBIA--IMPAIRMENT OF JUDGMENT.

6. EXPLAIN RELATIONSHIP OF STRESS.

7. CONCLUSION AS TO WHETHER BARTA SUFFERED FROM DETAIL PHOBIA IN 1982-84.

CONCLUSION AS TO WHETHER ALCOHOLIC DURING THAT TIME.

8. BASIS FOR OPINIONS

A. TESTING RESULTS

B. INTERVIEWS

BARTA FATHER

INTERPERSONAL RELATIONS AT TIME

WORK RELATIONSHIPS

STRESS

9. TREATABLE DISEASE?

A. CURRENTLY IN TREATMENT

³ After reading the instructions to the jury, the court gave counsel an opportunity to object to the charge as given. Barta's counsel responded, as did the Government, "Nothing further . . . ." Consequently, while we address this issue on the merits, we doubt that any error on instructions has been preserved for appeal. See Fed. R. Crim. P. 30 (objection to instructions is prerequisite to appeal).

⁴ Having rejected appellant's fair trial assertions, the author of this opinion, speaking only for himself, comments further about one matter. Whether there is truth to the belief or not, popular legal folklore often expounds that advantages can be reaped from a litigator's positioning in the courtroom--including occupying the counsel table nearer the jury than one's opponent. Barta's counsel asserts this view and claims an entitlement to the "favored" table based on, essentially, a "first in time, first in right" analysis. While in this author's day as a trial lawyer, and probably in many courts today, seating has been determined by who arrives first at the preferred counsel table, such an unmonitored method of selection may on occasion be somewhat unseemly in a court of law. Where, however, counsel makes an objection to the seating arrangements, a trial judge may deem it appropriate to make the choice by some more neutral way than tradition or a race to the "best" seat.

Concurring Opinion

GIBSON, Circuit Judge

separately: I concur in the opinion of the court prepared by Judge Bright fully, with the exception of footnote 4. As there was no trial objection, I do not feel that this footnote is necessary to our decision and do not agree with it.

 

 

[35-1 USTC ¶9129]Henry J. Sullivan, Appellant, v. United States of America , Appellee

(CA-9), United States Circuit Court of Appeals for the Ninth Circuit, No. 7612, 75 F2d 622, Decided February 5, 1935, Cert. denied, 295 U. S. 757, 55 S. Ct. 914

Upon appeal from the District Court of the United States for the District of Arizona.Testimony given by Government witness on redirect examination was properly admitted by the trial court, having been brought out on cross examination in trial of taxpayer for attempting to evade tax for the year 1931. Trial court properly instructed jury that collateral transactions showing motive may be considered by it for the purpose of showing motive in failing to include money in appellant's income tax return for the year 1931. Affirming unreported District Court decision.

F. C. Struckmeyer and I. A. Jennings, both of Phoenix , Arizona , for appellant. Clifton Mathews, U. S. Attorney, and F. E. Flynn, Assistant U. S. Attorney, both of Phoenix , Arizona , for appellee.

Before WILBUR and GARRECHT, Circuit Judges, and CAVANAH, District Judge.

CAVANAH, District Judge:

The appellant was indicted and charged in two counts with willful attempt to defeat and evade his income tax due the United States for the years 1930 and 1931, the deficiency being the sum of $16.40 for the year 1930, in count one, and the sum of $378.14 for the year 1931, in count two. He was acquitted on the first count and convicted on the second. The sufficiency of the evidence to support the verdict is not disputed.

The errors assigned urged consist mainly in the admission of testimony and the refusing and giving of instructions to the jury; first, as to the admission in evidence of testimony given by Cummins, a government witness that,

I stated before the grand jury that Mr. Sullivan acknowledged the receipt of $22,500 from the American Concrete Pipe Company and stated that he received it for other persons and he refused to state for whom he received it, and therefore gave examining officers no opportunity to verify his claims;

and, second, the admission in evidence of a portion of a letter written by the witness to a Mr. Williams, Internal Revenue Agent at Los Angeles. This testimony was given on redirect examination of the witness, after appellant had opened up the subject, and was referred to by him in his testimony on cross examination, where he testified that he had testified concerning it before the grand jury, and also that he had included the statement referred to in the letter in his report. The redirect examination merely clarified and amplified the testimony. It was properly admitted as it was in response to the matter brought out on cross examination. It did not place before the jury any new facts not already disclosed on cross examination. Shipley et al. v. United States (C. C. A. 5), 281 F. 134; Goldberg v. United States (C. C. A. 1), 295 F. 447; Vandell v. United States (C. C. A. 2), 6 F. (2d) 188, 190; Tank v. United States (C. C. A. 7), 8 F. (2d) 697, 699; Cook v. United States (C. C. A. 8), 28 F. (2d) 730. The fact that counsel for appellant originally elicited the testimony relative to the witness having testified to it before the grand jury, and the statement in his report, in his cross examination of the witness, properly admits the testimony on redirect.

The third assignment of error, relating to the court refusing to give appellant's requested instruction relative to the question of fraudulent intent, was not excepted to by appellant, and he is not entitled to further consideration of the question. Arnold v. United States (C. C. A. 9), opinion filed January 14, 1935 ; Stassi v. United States (C. C. A. 8), 50 Fed. (2d) 526; New York O. & W. Ry. Co. v. Jones (C. C. A. 3), 66 F. (2d) 556; Allis v. United States , 155 U. S. 117, 122. Only one exception was taken to the court's charge, and when that was done the suggestions made by counsel for appellant were immediately complied with by the court and counsel appeared to be satisfied, only suggesting at the time that, if the jury had a reasonable doubt the defendant would be entitled to the benefit of it. The court having instructed the jury as to reasonable doubt, that was sufficient.

The fourth and fifth assignments may be considered together, as they are based upon the instruction given by the court when the jury returned into court for further instructions on the subject of intent. The only exception taken at the time the additional instructions were given was as to the one given relating to willful intent. It is conceded that the original instructions on the question of willful intent were a correct statement of the law, as the court there stated that there must be a specific and willful intent to defeat and evade an income tax due the government, and again in the additional instructions the court repeated that in the offense charged there must be a specific intent to evade and defeat the tax which was due, under the allegations of the indictment.

The objection that the reference in the instruction as to collateral transactions showing motive was error, is without merit, because the evidence as to those transactions was not objected to by appellant and it was proper to consider them as they related to appellant's failure to include in his income tax return money received by him from the American Concrete and Steel Pipe Co. The court properly instructed the jury that such transactions may be considered by it for the purpose of showing motive in failing to include the money in appellant's income tax return. The evidence in that regard also tended to establish the commission of the offense charged in the indictment, as it related to appellant having received money from the American Concrete and Steel Pipe Co. which was not included in his income tax return. Capone v. United States (C. C. A. 7), 51 F. (2d) 609. The Supreme Court, when interpreting a revenue act directing the method of conducting a business to prevent loss of taxes, which act declared a willful failure to observe the directions a penal offense, said that "an evil motive is a constituent element of the crime." United States v. Murdock, 290 U. S. 389, 395.

Judgment affirmed.

 

 

[57-2 USTC ¶9700] United States of America , Plaintiff-Appellee v. Salvatore Apuzzo, Defendant-Appellant

(CA-2), U. S. Court of Appeals, 2d Circuit, Docket Nos. 24019, 24020, 245 F2d 416, 5/28/57, Aff'g unreported District Court decision

[1939 Code Secs. 2707(b) and 3294--similar to 1954 Code Secs. 7201, 7203, 7262, and 7273(b)]

Trial procedure: Evidence damaging to defendant brought out upon cross-examination of Government witness: Admissibility.--There was no error which would necessitate a new trial where, upon cross-examination of a Government witness by defendant's counsel, the fact was brought out that the defendant had admitted that he had been arrested about 15 years before for policy operations. The defense argued that in this trial for operating a numbers game without paying the required federal taxes the judge's insistence that the Government agent continue his testimony despite the defense counsel's interruption and later objection and motion for a mistrial prejudiced the jury. However, the court holds that the judge's action was correct, since it was the defense who brought out the evidence.

Arnold D. Roseman, New York City (George M. Lehr, New York City , on brief), for defendant-appellant. Maurice N. Nessen, Assistant United States Attorney, New York City (Paul W. Williams, United States Attorney, George S. Leisure, Jr., Assistant United States Attorney, New York City, on brief), for plaintiff-appellee.

Before CLARK, Chief Judge, and FRANK, ¹ MEDINA, HINCKS, and WATERMAN, Circuit Judges.

[Violation of Wagering Tax]

CLARK, Chief Judge:

This appeal involves a criminal prosecution presenting generally routine matters, leading to a clearly justified conviction and an appropriate, if light, sentence for this defendant. A single issue, as to testimony about the defendant's arrest fifteen years earlier, presented challenge; and because of its potential importance in the admin istration of the criminal law after the initial hearing before a panel of Judge Frank, Judge Waterman, and myself, the court ordered another hearing before the full bench. ² This second hearing on oral argument and further briefs resulted in a majority vote for affirmance.

Salvatore Apuzzo, the defendant, was prosecuted under two informations: one information alleged that he and two codefendants, Samuel Aaron and Ernest Broussard, were engaged during the month of August 1953 in the business of accepting wagers individually and as a copartnership, and that they willfully failed to register and pay the special occupation tax on gamblers in violation of 26 U. S. C. §§ 2707(b), 3277, 3290, 3291(a), 3292, and 3294. The other information charged the three men with a conspiracy, during the period July 28 to August 5, 1953, to commit those crimes in violation of the general conspiracy statute, 18 U. S. C. §371. Aaron and Broussard pleaded guilty to the second information, and only Apuzzo stood trial. The jury found him guilty on both informations. He was sentenced on the first information to a $3,000 fine and 60 days' imprisonment, followed by 4 years' probation; on the second information, sentence was suspended and a 4-year probation period imposed, to run concurrently with that on the first information. He appeals from this judgment of conviction.

It is undisputed that the defendant is the proprietor of a small butcher shop at 363 Lenox Avenue , New York City , and has been in the butcher business for 15 or 20 years. His brother-in-law, Isidori, who had been in his employ as a butcher for 6 years, testified that normally the defendant opened the safe in the store early each morning before going to the market to buy meat. Defendant and Isidori, the same witness stated, worked at the store every evening between 5 and 8 o'clock . Codefendants Aaron and Broussard were employees of the defendant who worked behind the counter of the store at the times in issue here.

From July 28 to August 5, 1953 , two federal agents made five visits to the butcher shop between 12:30 and 1:30 in the afternoon, and placed "policy" bets with Aaron and Broussard, who were behind the counter. The two agents testified, without contradiction, that during these visits they saw people lined up in front of the counter placing bets, and that on an occasion when one agent asked Aaron what number had won the day before Aaron pointed to three numerals which were posted on the front of the scales. Prior to their visit on August 5, 1953 , both agents prepared carbon copies of policy slips; and upon entering the butcher shop they made bets with the originals and kept the carbon copies for evidence. During this whole period Aaron and Broussard, in addition to accepting bets, were also engaged in selling meat; and the defendant was never seen in the store by the two agents.

Later in the afternoon of August 5, 1953 , pursuant to a valid search warrant, four agents raided the shop, proceeding through the main part of the store to a small room in the rear. All four agents testified, without substantial contradiction and quite unshaken after extensive cross-examination. They established that they found the defendant with two bystanders in the back room inspecting ties which an itinerant tie merchant was trying to sell. As the agents entered the room they wore their badges and announced their identity as federal men. One or more of them had drawn guns. Each agent questioned a different person found in the room, and Agent Lemler was apparently the first to question Apuzzo. Apuzzo at first maintained that he was only a visitor to the store and then claimed he recently rented it from one John Sloan. When Agent Gianatasio searched him Apuzzo produced a wallet containing a car registration listing him as a resident of Scarsdale , but to questions he answered that his address was in the Bronx . Cash in the amount of $1,366 was found on the defendant's person, and several thousand money wrappers and several hundred pads of paper were found in the rear room.

The agents and the defendant then proceeded into the front part of the store where the safe was and Apuzzo was asked to open the safe. According to the agents' testimony he denied knowledge of the combination until told it would be necessary to remove the safe from the premises and break it open, when he proceeded to open it. Within the safe were numerous compartments which were then broken open. Within them was found between $10,000 and $11,000 in cash, ownership of which Apuzzo immediately claimed, explaining that he kept it there to avoid having a lien placed on it as part of proceedings pending against him in the Tax Court. Also in the safe were two envelopes containing undated policy slips and some personal papers of defendant.

The agents then asked whether there were any other policy slips in the store. At that juncture, according to the agents, defendant pointed to the scale near which stood codefendant Broussard; and the defendant said, "Ernie, give them the slips." Broussard then removed the weighing platform of the seale revealing about 150 recent policy slips, including the two bets the agents had placed that day. At the trial it was stipulated that defendant did not pay the special tax and did not register.

Apuzzo did not take the stand, but relied for his defense on the testimony of his brother-in-law, Isidori, and codefendant Broussard, both employees of his. On cross-examination it was shown that Broussard had lied about his own participation in the gambling operation when first arrested and had subsequently pleaded guilty and been convicted. It also came out that after his conviction his wife had asked the defendant to rehire him, and at the time of the trial Broussard was again in Apuzzo's employ. Isidori testified that he, Isidori, was home the afternoon the agents raided the store, and was surprised to receive a telephone call from defendant asking for the combination to the safe. He was surprised because Apuzzo knew the combination and opened the safe each day; Apuzzo sounded very agitated when he called. Broussard testified in regard to the scale incident that Apuzzo told him merely to give the agents the policy slips if he, Broussard, knew anything about them. The explanation advanced by counsel for defendant's evasive behavior when confronted by government men was that he first thought it was a holdup and then feared they were after him in connection with his pending tax matter. The defense was that Apuzzo never knew Broussard and Aaron were conducting a gambling operation in the store.

[Evidence of Gambling]

Defendant's first assignment of error is that there was insufficient evidence to support the finding of guilt, and this he has pressed vigorously on appeal. But this is completely without merit; actually the government presented a very strong case. It became common ground, as the trial progressed, that defendant's butcher shop was the scene of extensive policy operations. Hence the only possible defense was that Apuzzo, the proprietor, was quite oblivious to what was known and obvious in the neighborhood. ³ But this will not hold water. The evidence that the defendant's employees were openly receiving bets in his little store day after day; that winning numbers were posted on the front of the scale; that policy slips, as well as $10,000 in currency belonging to this apparently petty butcher shop, were found in the safe; that he lied about his identity when first accosted and lied about knowing the combination to the safe; and that he pointed to the scale where the recent policy slips were hidden when it appeared that the jig was up--all this makes the rather pitiful attempts of his employees to take the blame quite patently unsuccessful. In fact, even though it was contradictory and largely discredited, the testimony of the employees actually provided a certain amount of corroboration in details such as the defendant's knowledge of the combination to his safe. On the record the jury could hardly have brought in any other verdict. We turn, therefore, to the question of evidence at the heart of this case.

[Evidence of Former Arrest]

The incident here involved occurred on the second day of trial, after four government agents had testified and been cross-examined as to the facts already described. The government called the fifth agent, Gianatasio, who testified on direct as to incidents both in the back room and in the main part of the store. The prosecutor, in examining Gianatasio as to the conversation in the back room, brought out the facts mentioned above, that Apuzzo gave a Bronx address despite his Scarsdale car registration and that Apuzzo at first denied being the owner of the store. The defense counsel extensively questioned Gianatasio on cross-examination until the following exchange occurred:

"Q. Did you then have a conversation with the defendant? A. Yes. I--

"Q. What did you say to him and what did he say to you? A. I asked him his name. He gave me his name. I asked him his address. He gave me a Bronx address. I asked him what his business was. He told me butcher. I asked him whether he was married. I asked him if he was ever arrested before.

"Mr. Roseman: At this time, your Honor--

"The Witness: You wanted to know what I asked him.

"Mr. Roseman: All right.

"The Court: At this time what?

"Mr. Roseman: I don't want the witness to just keep answering. I would rather ask the questions.

"The Court: You asked him what the conversation was. I didn't know that he had finished.

"Q. Did you tell Mr. Lemler--

"The Court: Had you finished telling about the conversation?

"The Witness: No, sir.

"Q. Did you tell Mr. Lemler--

"The Court: Just a minute. He didn't finish.

"A. When I asked him if he was arrested before, he told me he had been arrested for policy about 15 years ago. He didn't know the exact date.

"Mr. Roseman: At this time I object to the testimony and move for a mistrial.

"The Court: On what ground?

"Mr. Roseman: On the ground that this is prejudicial to the defendant."

The pertinent subsequent colloquy was as follows:

"Mr. Roseman: Yes, but that conversation is prejudicial.

"The Court: You brought it out.

"Mr. Roseman: He [the prosecutor] asked him what the conversation was and he didn't bring it out.

"The Court: Then why did you ask him to repeat it?

"Mr. Roseman: I wanted to see if he was telling the truth.

"* * *

"The Court: It was responsive. I don't see how you can control what the witness said in answer to the question.

"Mr. Roseman: I didn't open any door.

"The Court: You asked him what was said."

Further colloquy ensued both before and out of the presence of the jury, in which the prosecutor pointed out that his questions on direct had been limited to certain particular incidents and defendant's counsel had opened the question of a more general conversation in the back room. The court then reiterated several times its view that defendant had opened the issue and, the witness having sworn to tell the truth, "[h]ow could he possibly suppress part of the conversation?" But ultimately the court consented that counsel rescarch the point over the holiday weekend. When the court reconvened on Monday the judge heard further argument, after which he decided to assume the blame for bringing out the testimony, but to direct the jury to disregard it. This he did in careful and precise instructions both then and later in his formal charge. ⁴ But defendant urges that all this was insufficient to save the conviction.

The crux of defendant's contention is that the trial judge erred fatally when he did not keep from the jury the fact, whose truth is nowhere disputed, that fifteen years before this trial Salvatore Apuzzo was arrested for "policy." We are asked to rule that a new trial is mandatory because the jury, having learned this fact, may have inferred from it more than was warranted. And so, once the evidence had come out, there was nothing the judge could do to save the trial; an entirely new start was necessary and inevitable. The government claims, however, that the judge was entirely correct, since the defense brought out the evidence, and that in any event the admission could have done no harm in view of the judge's charge and the overwhelming proof of guilt. In Judge Medina's and my opinion the first ground is sound and entirely adequate without need of resort to the second ground.

Preliminarily to our discussion let us summarize the situation as it came before the judge. We have already noted that this particular cross-examination opened up an entirely new conversation. Further we should note these factors: (1) the witness' reply ending, "I asked him if he was ever arrested before" was a responsive and necessary answer to a direct question; (2) with this answer the damage, if any, was done and all the rest was but necessary clarification or repair in order not to leave the witness, the defendant, and the prosecution in an equivocal position where the worst might be suspected as to each; (3) the judge's ruling and the reply of the witness were made when the only objection before the court was that counsel did not "want the witness to just keep answering," and that he "would rather ask the questions"; (4) the judge was initially of the view that the defendant had opened the door and that the witness under oath could not suppress the testimony, but ultimately he decided--quite overgenerously--to assume entire responsibility, a course which obviously would relieve counsel of embarrassment to his client; and (5) the jury was charged, as precisely as is conceivable, to disregard the testimony.

[Admissibility of Evidence]

It is now commonplace that the rules of evidence have tended ever more freely in the direction of admission of all relevant testimony in the light of modern experience that the truth is more often found by full revelation than by concealment. Hence we have the modern principle, stated in the Model Code of Evidence, and now embodied in Uniform Rules of Evidence, Rule 7: "General Abolition of * * * Exclusionary Rules. Except as otherwise provided in these Rules, * * * (f) all relevant evidence is admissible." And we have often admonished our trial judges to err, if at all, on the side of the admission, rather than the exclusion, of evidence. A trial judge must rule on admissibility quickly and almost by instinct; his instinct ought to be to bring out the truth, rather than to permit a party to cover up a part of his case. It is true that there are certain special privileges, such as that against self-crimination, which rest on a different background; but outside of these the search for the truth should be the lodestone.

Now in this search there are of course areas of irrelevancy where matter is kept from the jury because the danger of prejudice exceeds its probative force. Testimony about a defendant's prior misdeeds is usually excluded on this basis, although the trial judge may allow it in his discretion where it casts particular light on the defendant's identity or specific intent to commit the crime. See United States v. James, 2 Cir., 208 Fed. (2d) 124, 125; McCormick on Evidence 329 (1954); 2 Wigmore on Evidence §§ 300-304 (3d Ed. 1940). But the question of possible admissibility for such purposes ⁵ was of course never reached, since the prosecutor did not offer it, and the incident did not develop so far as to raise the issue More pertinent here is the fundamental principle of evidence that a party by asking a broad question of the kind here involved may not object to the admission of the response he draws. See, e.g., United States v. Silver, 2 Cir., 235 Fed. (2d) 375, certiorari denied Silver v. United States, 352 U. S. 880; Fidelity & Deposit Co. of Md. v. Lindholm, 9 Cir., 66 Fed. (2d) 56, 89 A. L. R. 279; Pilot Ins. Co. v. Wise, 5 Cir., 61 Fed. (2d) 481; Pabst Brewing Co. v. E. Clemens Horst Co., 9 Cir., 264 Fed. 909; Riddle v. Gibson, 29 App. D. C. 237; Clum v. Guardian Life Ins. Co., D. C. M. D. Pa., 24 Fed. Supp. 396, reversed on other grounds, Guardian Life Ins. Co. of America v. Clum, 3 Cir., 106 Fed. (2d) 592, certiorari denied Clum v. Guardian Life Ins. Co., 309 U. S. 666; Artcher v. McDuffie, 5 Barb., N. Y., 147; Levy v. Cascades Operating Corp., 176 Misc. 373, 27 N. Y. S. 2d 258, reversed 263 App. Div. 882, 32 N. Y. S. 2d 341, reversed 289 N. Y. 714, 46 N. E. 2d 343; 1 Wigmore on Evidence §18, note 34 (3d Ed. 1940); Rex v. King, 20 Cr. App. R. 158. This rule is grounded in the realities of trial experience; for generally speaking it is quite impossible for a litigant to compel a hostile witness to respond to questions and simultaneously keep the responses from the jury if and when they contain references to prejudicial incidents, such as prior arrests or convictions. Nor can the responsibility for the testimony be shifted from defense counsel to the trial judge. That counsel tried to withdraw his question after the damage was done did not help his case, nor was his objection at all clear. Indeed it then seemed--as he said in effect--that he was simply trying to introduce a new question without waiting for the witness to complete his answer to the former inquiry.

Moreover, in the circumstances presented here the trial judge would have been well within his discretion in requiring the witness to complete his answer even if proper objection were made. In an effort to show that Gianatasio's earlier testimony about incidents in the back room was fabricated or inaccurate, the defense asked him to relate the whole conversation which passed between himself and Apuzzo. Presumably the question was to show the jury that the witness could not recall the entire conversation or to suggest inconsistencies with the testimony of other agents, though actually they were not present at the conversation. But the witness was cut off before he finished his reply. If he considered the issue sufficiently germane, the trial judge could have allowed the government on redirect examination of the witness to complete the conversation to demonstrate that his story was neither fabricated nor based on hazy memory. Or had the prosecution, on redirect, asked for the full conversation--to avoid prejudice to the government from having suggested a black mark it could not support--it would have been proper, indeed almost necessary, that the judge admit the testimony. This is the familiar doctrine of "Verbal Completeness," see 7 Wigmore on Evidence §§ 2094, 2115 (3d Ed. 1940), and is designed to prevent limitation of evidence to warp the truth and confuse the jury. Where the testimony necessary to complete the story is hearsay or other excludable matter the trial judge has discretion in deciding whether or not to permit completion. McCormick on Evidence 132 (1954). The same discretion must be allowed when completeness is sought not on redirect, but in the course of the cross-examination, as here.

[Danger of Cross-Examination]

Some suggestion for differentiation of this case is made that the defendant's counsel was taken by surprise and that the prosecution engineered the introduction of the testimony. Both grounds are ill founded and irrelevant. It is inconceivable that defense counsel experienced in criminal cases would have indulged in all the extended cross-examination of the government agents without appreciation of the risk involved. His hope of finding some inconsistencies in the evidence must have been tempered by knowledge of the risk of turning up something he would not like. But in any event the sound general principle that a litigant cannot object to, or secure a mistrial for, evidence he himself produces cannot be controlled by the degree of naiveté or sophistication of counsel. So far as the prosecution is concerned, there is nothing remotely to suggest impropriety on the part of the United States Attorney or indeed on the part of the witness unless answering responsively to a direct question can be so termed. But further, the implication that somehow the testimony should be geared to the defendant's objections is surely a dangerous one. It is hard to see how reversal here can be had without the implication that testimony should be manipulated, the last thing this court should even suggest.

The discussion had indicates that, while this prosecution may not be important in itself, the principles of procedure are most important. Particularly where the prosecution of crime is so important to the welfare of the community as in New York City must we take care lest we place in the hands of shrewd defense counsel an unjustifiable tactic for reversing fair convictions of guilty men. For if the defense can indulge in unlimited cross-examination and seek reversal on what is dredged up, then counsel will surely take advantage of this one-way street. In truth, if mistrials are thus easily secured then traps may be set forth for the judge whose very good nature is later labeled fatal error. Over-all it weakens the judge's control of his courtroom and his outstanding position in trial work. Of course, if through accident or through miscalculation of counsel the jury should learn facts about the defendant so inflammatory that they could not thereafter give him a fair trial, a new trial would be necessary; but neither the trial judge nor we think that the incident involved here even approached such a nature. Here the long record carefully examined shows outstanding skill, patience with the repetitive cross-examinations, and scrupulous care for the rights of the defendant on the part of a judge "distinguished for his courtesy, thoroughness and patience." Valensi v. Iravani, 2 Cir., Mar. 29, 1957 , -- Fed. (2d) --, --. We have not hesitated to reverse district judges when their conduct of a specific trial seems to have resulted in unfairness; we shall stultify ourselves and the admin istration of criminal justice in this important district if we hold ourselves unable to recognize good trial conduct by a judge and take a case such as this out of his hands for automatic reversal.

In view of our firm conviction that Judge Dimock acted both fairly and wisely we have not thought it necessary to discuss the other point argued, namely, that in no event was there error here which persisted beyond the judge's charge and was actually prejudicial. United States v. Raspovich, 2 Cir., 241 Fed. (2d) 779; United States v. Cioffi, 2 Cir., 242 Fed. (2d) 473; United States v. Giallo, 2 Cir., 206 Fed. (2d) 207, 210, affirmed Giallo v. United States, 346 U. S. 929.

Other claimed errors do not merit discussion.

Affirmed.

MEDINA, Circuit Judge, concurs in this opinion.

¹ Judge Frank heard the argument of this case on the original hearing and on the rehearing en banc and voted to reverse and remand, preparing supporting memoranda to that effect. He died, however, before this opinion was written.

² Except for Judge Lumbard, who disqualified himself, since he was United States Attorney during the prosecution.

³ The conclusion that he was knowing but tolerant will not suffice, since then he would be devoting the facilities of his shop to the furtherance of the venture and the advancement of the conspiracy. Further, and inference that he would allow his business to assume the reputation of a notorious gambling place out of good nature alone, and with no share of the gain, is hardly reasonable. See United States v. Masiello, 2 Cir., 235 Fed. (2d) 279, certiorari denied 352 U. S. 882.

⁴ The court's statement to the jury was as follows:

"Good morning, ladies and gentlemen. I am sorry that we had to keep you waiting. All I can do is to assure you that we have not been idle while you have been in there, which probably even in this short period may have seemed to you a lot of time.

"However, at the close of the last session there was a witness on the stand who was asked a question by counsel for the defense and in answering the question said something about the previous arrest of this defendant.

"That ought not to have been brought out. Counsel in asking the question did not expect that it would be brought out, did not try to bring it out, and it was only on my insistence, and I wrongly insisted on it, that he told the whole story that was brought out.

"Now, the reason that the law does not permit testimony with respect to previous arrests is that an arrest means absolutely nothing, just as I told you at the beginning of the case, a man is presumed to be innocent until he is found guilty, and the arrest is nothing more than the information that I was talking to you about, so that it has no bearing on the question in the eyes of the law. And you are to disregard anything you heard. You can blame me for anything that occurred in that respect, because neither counsel is responsible for the fact that was brought out."

Finally, in his charge to the jury the next day, Tuesday, the judge further warned the jury as follows:

"Any testimony as to any previous arrest must be disregarded as having no probative value as to the guilt or innocence of the defendant."

⁵ E.g., to show prior knowledge of the criminality of the act were defendant to rely on the contention noted in note 3 supra.

[Concurring Opinions]

HINCKS, Circuit Judge, concurring:

Merely because defense counsel asked Gianatasio to relate his entire conversation with the defendant, the defense was not necessarily precluded, in my opinion, from withdrawing its request when the conversation had been only partially related. After Gianatasio in the course of his testimony said: "I asked him if he was ever arrested before," defense counsel interposed: "I don't want the witness to just keep answering. I would rather ask the questions" and then twice began a question about some other conversation. This made it abundantly plain that the defense was seeking to withdraw its blanket request for the whole conversation. And to have allowed him to proceed with his new line of inquiry would not have left the jury under the erroneous and confusing impression that the Gianatasio conversation with the defendant had been completed. For Gianatasio on a proper inquiry by the judge said bluntly that he had not "finished telling about the conversation."

In this situation, I think, the judge erred in insisting on a continuation of the narration of the conversation. I see nothing to suggest that in the situation presented the discontinuance of the narration at the instance of the defense would subject the prosecution to the hazard of an unfavorable inference or would in any way operate to warp the truth or confuse the jury. That being so, I doubt the applicability of the doctrine of "Verbal Completeness" to which the majority opinion refers. But even if at all applicable, the rule of completeness is subject to a very reasonable qualification: "where the remainder [of the conversation] is incompetent not merely as to form as in the case of secondary evidence or hearsay, but because of its prejudicial character then the trial judge should exclude if he finds that the danger of prejudice outweighs the explanatory value." McCormick on Evidence, page 132. In other words, when--as here--the continued narration of a conversation will bring in inadmissible matter possibly prejudicial and adds nothing to a solution of the issues, neither the judge nor the opposing counsel may properly cause it to come in. Gencarella v. Fyfe, 1 Cir., 171 Fed. (2d) 419; People v. Baker, 290 Ill. 349, 125 N. E. 263; People v. Schlessel, 196 N. Y. 476, 90 N. E. 44; Hathaway v. Tinkham, 148 Mass. 85, 19 N. E. 18. 20 Am. Jur., Evidence, Sec. 276; McCormick on Evidence, page 132, footnote 6; 31 C. J. S., Evidence, page 917 and footnote 82. ^*

Nevertheless, I would affirm the conviction on the ground that the error was not of sufficient substance to require a mistrial ^** or reversal. The most pertinent Supreme Court precedent is Lutwak v. United States, 344 U. S. 604. Here, as in Lutwak, the evidence of guilt is strong, as the majority opinion shows. Indeed the very strength of that evidence gives "fair assurance * * * that the judgment was not substantially swayed by the error." Thus reversal is not required under Kotteakos v. United States, 328 U. S. 750, and Krulewitch v. United States, 336 U. S. 440. In view of the massive weight of evidence pointing to guilt, it would be quixotic to attribute the verdict to the mere narration of an admission of an arrest for policy fifteen years earlier, especially in view of the judge's instruction, promptly made and later repeated in his charge, to disregard the admission of the prior arrest. United States v. Raspovich, 2 Cir., 241 Fed. (2d) 779; United States v. Chieppa, 2 Cir., 241 Fed. (2d) 635; United States v. Tramaglino, 2 Cir., 197 Fed. (2d) 928, 932, cert. denied 344 U. S. 864; United States v. Nimerick, 2 Cir., 188 Fed. (2d) 464, cert. denied 313 U. S. 592. Indeed, one may doubt that the express admission of the prior arrest, which came in and was the subject-matter of cautionary instructions, was as hurtful to the defense as would have been the admission which the jury would naturally have implied from the defense tactic in running away from the conversation which it had invited.

^* As to all other claims of error I am in full accord with the majority opinion.

^** I think the trial judge was in a better position than we to gauge the effect of the admission of the prior arrest. We should therefore give substantial weight to his evaluation of the problem. Webb v. United States , 10 Cir., 191 Fed. (2d) 512; United States v. Cioffi, 2 Cir., 242 Fed. (2d) 473; United States v. Giallo, 2 Cir., 206 Fed. (2d) 207, aff'd 346 U. S. 929.

WATERMAN, Circuit Judge, concurring:

I concur with my colleagues in affirming the conviction below. I agree with Judge Hincks for the reasons so ably stated by him--and with Judge Dimock--that witness Gianatasio's ¹ statement that Apuzzo told him he had been arrested for policy about fifteen years before introduced error in the case. ² I disagree with Chief Judge Clark and Judge Medina who maintain this unfortunate statement was a proper one to be made under the circumstances of its making since it was elicited during cross-examination. I affirm because I am convinced from an examination of the stenographic minutes of the proceedings in their entirety that Judge Dimock's subsequent admonitions to the jury to disregard this testimony must have been heeded. I have enough confidence in jurors to believe that in the setting of this particular case--serious though the admission of this damaging inadmissible testimony most assuredly was--the sincerity of the trial judge in stating and restating his personal acceptance of the entire blame, ³ and his wish that for that reason the jury ignore the testimony, must have had its effect. Were I not so persuaded I would be forced to dissent--for I do not agree with Judge Hincks that the evidence in the case points so overwhelmingly to the guilt of the defendant as to require affirmance on the ground that the error, had it not been cured, would have been harmless.

Judge Frank was on the panel that heard argument in this case last term, and sat with us en banc when it was argued at this term. He was consistent throughout in holding that error was committed here, that this error was not harmless, and that it was not cured. He and I concurred in a proposed opinion written last term before the hearing en banc was decided upon that would have reversed the conviction and remanded for a new trial. At this term by memorandum vote after the hearing en banc, he reaffirmed his belief that the conviction should be reversed. It is, I think, of importance that his opinion be known, for it demonstrates that three of the five appellate judges who have considered this case concur with the district judge who tried it that the injection into the trial of this statement of a prior arrest was error.

It is fundamental that counsel usually assumes the risk of unfavorable responses to his own cross-examination. But here it seems clear that appellant's counsel was surprised when the fifth government agent he had cross-examined testified to a conversation not foreshadowed by any prior witness; and that when he discovered that the agent might testify to an admission by the defendant of a prior arrest, he did his best to cut off the indicated testimony and close the line of inquiry. The trial judge insisted that the witness complete the unfinished answer despite defense counsel's efforts to prevent reply. This case presents a situation unique on its facts. It seems clear that the testimony concerning the prior arrest came before the jury by accident rather than through any careless or designed "opening up" of a damaging conversation by defense counsel. Surely, therefore, as stated by Judge Hincks, the continuing narrative should not have been testified to.

Apuzzo did not take the stand in his own defense. In fact, the error occurred during the Government's case and before the defense put in any evidence at all, except by way of cross-examination.

I turn now to the question of whether the error was so prejudicial as to require, unless cured by the court's instructions, an automatic reversal of the conviction. Rule 52(a) of the Federal Rules of Criminal Procedure, as well as 28 U. S. C. §2111, admonishes us to disregard any errors or defects which do not affect substantial rights. This command is couched in clear language, but its application presents most difficult problems. See United States v. Antonelli Fireworks Co., 155 Fed. (2d) 631 (2 Cir. 1946) (majority and dissenting opinions), cert. den., 329 U. S. 742.

The Supreme Court has stated the test as follows:

"In the final analysis judgment in each case must be influenced by conviction resulting from examination of the proceedings in their entirety, tempered but not governed in any rigid sense of stare decisis by what has been done in similar situations. * * * Necessarily the character of the proceeding, what is at stake upon its outcome and the relation of the error asserted to casting the balance for decision on the case as a whole, are material factors in judgment. * * *

"If, when all is said and done, the conviction is sure that the error did not influence the jury, or had but very slight effect, the verdict and the judgment should stand, except perhaps where the departure is from a constitutional norm or a specific command of Congress. Bruno v. United States , supra (308 U. S. 287), at 294. But if one cannot say, with fair assurance, after pondering all that happened without stripping the erroneous action from the whole, that the judgment was not substantially swayed by the error, it is impossible to conclude that substantial rights were not affected. The inquiry cannot be merely whether there was enough to support the result, apart from the phase affected by the error. It is rather, even so, whether the error itself had substantial influence. If so, or if one is left in grave doubt, the conviction cannot stand." Kotteakos v. United States , 1946, 328 U. S. 750, 762, 764-765.

Subsequent to this Kotteakos decision we have held that references to prior arrests or convictions, when the defendant does not take the stand and his character is not in issue, are prejudicial error. United States v. James, 208 Fed. (2d) 124 (2 Cir. 1953); United States v. Modern Reed & Rattan Co., 159 Fed. (2d) 656 (2 Cir. 1947), cert. denied, 331 U. S. 831. These cases are authority for the proposition that such testimony is prejudicial error when it gets before the jury other than by deliberate or negligent conduct of defense counsel. This is so not because such testimony is irrelevant "but because of a dominant policy which recognizes that what tends to show a likelihood that the accused has flouted the law at some other time is too apt to be given undue weight by the jury and to prejudice his right to a fair trial on the instant charge." United States v. James, supra, at page 124. And see Michelson v. United States, 1948, 335 U. S. 469, 475-476. Obviously this is of particular importance when the prior arrest or conviction is for the same criminal activity.

With these guideposts at hand, I now turn to the over-all situation at the trial, as I perceive it to have been.

To convict Apuzzo the Government had to convince the jury by circumstantial evidence and the proven overt acts of Aaron and Broussard that Apuzzo was in the "policy racket" with Aaron and Broussard during the period from July 28 through August 5, 1953 . Though federal agents were in the butcher shop on five different occasions during those nine days and placed "policy" bets with Aaron and Broussard they never saw Apuzzo. Both Aaron and Broussard pleaded guilty prior to Apuzzo's trial. Broussard testified for the defense, and absolved Apuzzo of any connection with the "policy" operations. The Government presented a strong circumstantial case through the testimony of government employees tending to prove Apuzzo's complicity; and, although no direct evidence of day-to-day participation on the part of Apuzzo was ever before the jury, there was indeed sufficient evidence to support a finding by the jury of guilt.

Apuzzo's employees testified stoutly, also. If they were believed, there was similarly sufficient evidence to support a verdict of acquittal. The defense could well maintain that there was insufficient credible proof of any "policy" participation by Apuzzo during the nine crucial days involved.

Although on the record before us it is highly probable that appellant may be guilty as charged, I do not find that this "record fairly shrieks the guilt," Lutwak v. United States, 344 U. S. 604, 619 (1953), of Apuzzo during the time-period involved, nor do I believe that no reasonable jury could have acquitted. See, e.g., United States v. Chieppa, 241 Fed. (2d) 635, 640 (2d Cir. 1957); United States v. Tramaglino, 197 Fed. (2d) 928, 932 (2d Cir. 1952), cert. denied, 344 U. S. 864.

Therefore, it becomes a most delicate question for an appellate judge who believes that the evidence below of guilt is not completely overwhelming to appraise the effect that Gianatasio's statement may have had. For Gianatasio let the jury know that Apuzzo, himself, allegedly had said to the witness that he had been arrested for "policy" about fifteen years ago. Even though instructed that the statement should be ignored, this statement, erroneously before the jury, could well be the decisive bit to convince a doubting juror of the defendant's guilt. ⁴

Recognizing this danger, I nevertheless hold here that in view of the unique circumstances in this case this error was cured and made harmless by the subsequent considered and sincere instructions of the distinguished, able and conscientious judge. The error would never have occurred but for the insistence of Judge Dimock that Gianatasio complete his answer. This the jury well knew. The Judge accepted the entire blame for the occurrence and absolved defense counsel of any suspicion of deviousness. This also the jury well knew.

The erroneous introduction of an alleged statement by defendant that he had been previously arrested for a similar activity may be considered of such an exceptionally prejudicial character as to necessitate a new trial. See, e.g., United States v. James, supra. But the general rule is that where evidence is erroneously admitted the subsequent striking of it from the case, accompanied by a clear and positive instruction to the jury to disregard the evidence, cures the error. United States v. Giallo, 206 Fed. (2d) 207 (2d Cir. 1953), aff'd 346 U. S. 929; United States v. Curzio, 179 Fed. (2d) 380 (3d Cir. 1950); United States v. Marsh, 82 Fed. (2d) 703 (3d Cir. 1936); United States v. Stoppelli, 183 Fed. (2d) 391 (9th Cir. 1950); Samish v. United States , 223 Fed. (2d) 358 (9th Cir. 1955) [55-1 USTC ¶9499]. I believe that the circumstances of this case warrant the application here of that general rule.

¹ Gianatasio, one of the government witnesses, all of whom were employees of the U. S. Treasury, was an experienced investigator with the Alcohol & Tobacco Tax Division, and had been an employee of the Treasury for more than twenty years. Before this he had been a witness for the Government. For instance, he testified in a case cited in all three of our opinions here, United States v. Giallo, 206 Fed. (2d) 207, at 209 and footnote 2 (2 Cir. 1953).

² The error occurred because the trial judge, evidently completely unaware of what the witness would testify to, insisted that the witness continue to answer a question asked of him on cross-examination after he had been stopped by the cross-examiner, despite the cross-examiner's efforts to waive further reply and to ask a new question. In continuing his answer, the witness, so protected by the judge, brought out the damaging testimony.

³ See Chief Judge Clark's opinion, footnote 4.

⁴ See, e.g., the oft-quoted concurring opinion of Mr. Justice Jackson in Krulewitch v. United States, 336 U. S. 440, 453 (1949): "The naive assumption that prejudicial effects can be overcome by instructions to the jury * * * all practicing lawyers know to be unmitigated fiction. See Skidmore v. Baltimore & Ohio R. Co., 2 Cir., 167 Fed. (2d) 54."

See also the remarks of the late Chief Judge Lehman of the New York Court of Appeals in People v. Rob inson, 273 N. Y. 438, 445-46, 8 N. E. 2d 25 (1937).

 

 

[60-1 USTC ¶9401]United States of America, Appellee v. Harold Gross, also known as Harry Gross, Defendant-Appellant

(CA-2), U. S. Court of Appeals, 2d Circuit, Docket No. 26092, 276 F2d 816, 4/6/60, Rev'g unreported District Court decision

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

Tax evasion: Venue: Improper cross-examination of taxpayer.--A taxpayer who was indicted for tax evasion did not waive his objections to venue by raising the question for the first time on motion for acquittal, where lack of proper venue did not appear on the face of the indictment. However, venue was properly laid in the district to which the taxpayer sent the incorrect information to be used in preparing his returns and in which the returns were prepared, although the returns were filed in another district. It was improper to ask the taxpayer on cross-examination whether he had failed to deny in testimony before the McClellan Committee that he had received "side payments" from his employer to prevent work stoppage as a result of union rivalries, where, under the circumstances, the questions accomplished the same result as if he had been asked whether he had asserted his privilege against self-incrimination.

John A. Guzzetta, Assistant United States Attorney, New York, N. Y. (S. Hazard Gillespie, Jr., United States Attorney for Southern District of N. Y., and David R. Hyde, Assistant United States Attorney, on brief), for appellee. Joseph Balliro, New York , N. Y. (Balliro and Maktos, and Gaynor, Mosher, Freeman & Pisani , New York , N. Y., on brief), for defendant-appellant.

Before LUMBARD, Chief Judge, MOORE and FRIENDLY, Circuit Judges.

FRIENDLY, Circuit Judge:

Harold Gross appeals from a judgment of conviction on a six-count indictment entered in the District Court for the Southern District of New York after a jury trial. The indictment charged Gross with attempting to evade his income taxes for each of the years 1953 through 1958 by preparing and causing to be prepared and by filing and causing to be filed returns which understated his true income, in violation of §145(b) of the Internal Revenue Code of 1939 as to 1953 and of §7201 of the Internal Revenue Code of 1954 as to the later years.

[Cash "Side-Payments" to Employee]

Gross was employed during this period as the shipping foreman of the Neo-Gravure Printing Company, in Weehawken , New Jersey . His salary was paid by check; these payments were recorded on W-2 forms filed by Neo-Gravure with the government and were reported by Gross in his tax returns. However, the government claimed, and two officers of Neo-Gravure, Chenicek and Hillbrant, testified, that Gross had received an additional $29,000 in cash. This consisted of six annual payments of $4,000 for activities in preventing a feared work stoppage in connection with deliveries of the American Weekly to the New York Journal American, as a result of rivalry between the Teamsters' Union to which Neo-Gravure's drivers belonged and the Newspapers & Mail Deliverers' Union which represented the Journal American's, and two payments of $2,500 each in 1954 and 1955 for assisting Neo-Gravure in collective bargaining negotiations with Local 1730, International Longshoremen's Association, which represented its platform workers. Gross denied receipt of these payments; none were included in his tax returns. These same payments had been the subject of inquiry by a Committee of the United States Senate chaired by Senator McClellan, Hearings Before the Select Committee on Improper Activities in the Labor or Management Field, 86th Cong., 1st Sess., pp. 18214-240, 18296-304.

Because of the issue of venue raised by Gross on this appeal, it becomes necessary to state how his tax returns were prepared and filed. In 1952 Gross requested Michael Pinto, an accountant having an office in the Southern District of New York, to prepare his income tax returns for 1951. Pinto asked for documentary evidence of Gross' income. Gross submitted his W-2 forms. Pinto could not recall whether Gross had submitted any other documents but "was satisfied that he submitted to me all the income that he had to report." For each of the years here in question, Pinto received similar information from Gross in Pinto's office in the Southern District. Pinto there prepared the returns in his own handwriting, signed them under the rubric "Preparer" (except for the 1953 return), and mailed them to Gross, who signed and filed them without change. Until the fall of 1958 Gross lived in Forest Hills , L. I., and the returns for 1953-1957 were filed in the Eastern District of New York; in October, 1958, he moved to Miami Beach and his 1958 return was filed in Florida . After Pinto had prepared the returns and sent them to Gross, "a truckdriver or somebody who seemed to look like a truckdriver" would come to Pinto's office with Pinto's fee. The government does not claim Pinto knew of Gross' alleged tax evasion.

After both sides had rested, defendant moved for a directed verdict of acquittal under Fed. R. Crim. Proc. 29. The Court reserved decision. The jury found defendant guilty on all counts. Thereafter defendant renewed his motion for acquittal "on the ground that the evidence is insufficient to sustain a conviction of the offenses charged," for arrest of judgment under Fed. R. Crim. Proc. 34 "on the ground that the court is without jurisdiction of the offense in that the offenses, and each of themm if any, were not committed in this district," and for a new trial under Fed. R. Crim. Proc. 33. All motions were denied. The court sentenced Gross to five years' imprisonment on each count, the sentences to run concurrently.

Gross contends the District Court erred in not granting his motions for acquittal and for arrest of judgment on the ground of improper venue; the government answers, first, that Gross waived any objection to venue and, second, that venue was properly laid in the Southern District in any event. We overrule the government's answer as to waiver but sustain its answer on the merits. Gross contends in the alternative that a new trial should be directed because of certain questions allowed to be asked him on cross-examination, and also because of what he claims to have been an improper answer by the Court to a question from the jury after the jury had begun its deliberations. We uphold the former contention and therefore do not reach the second.

[Waiver of Objection to Venue]

We shall deal first with the government's claim that Gross waived any objection to venue in the Southern District by his delay in making this.

The claim would be well founded if this were a civil case, where the privilege as to venue "is of such a nature that it must be asserted at latest before the expiration of the period allotted for entering a general appearance and challenging the merits." Commercial Casualty Ins. Co. v. Consolidated Stone Co., 278 U. S. 177, 179-80 (1929). However, no similar time limitation on the making of the objection exists in criminal cases where questions of venue "are not merely matters of formal legal procedure," United States v. Johnson, 323 U. S. 273, 276 (1944), but of constitutional right. As said by Judge Minton, as he then was, in United States v. Jones, 174 F. 2d 746, 748 (7th Cir. 1949), "One of the things the Government has the burden of proving is venue. It is an essential part of the Government's case. Without it, there can be no conviction. U. S. Const. Amend. VI * * *," and further a "motion for acquittal made at the conclusion of all the evidence properly raised the question of venue." Accord, United States v. Browne, 225 F. 2d 751, 755 (7th Cir. 1955).

The burden of legal principles grouped under the term "waiver" thus has an exceedingly narrow application when a criminal defendant claims the government has failed to prove proper venue. Indeed, our opinions show rather that this is limited to what would be more accurately described as election, i. e., to cases where the conduct of a defendant who has been put on notice that the government will not prove proper venue in the district of the indictment indicates that he is nevertheless willing to be tried there. We have found such an indication where lack of proper venue appeared on the face of the indictment (United States v. Jones, 162 F. 2d 72 (2d Cir. 1947)), and have said we might find it where lack of intention to prove proper venue appeared from statements by the government during the trial, see United States v. Michelson, 165 F. 2d 732, 734 (2d Cir.), affd., 335 U. S. 469 (1948), or where defendant specified the grounds for a motion for acquittal but omitted mention of improper venue, see United States v. Brothman, 191 F. 2d 70, 73 (1951).

This was not such a case. The various counts of the indictment charged that "in the Southern District of New York, Harold Gross * * * did wilfully and knowingly attempt to evade and defeat a large part of the income tax due and owing by him and his wife to the United States of America * * * by preparing and causing to be prepared and by filing and causing to be filed with the District Director of Internal Revenue at Brooklyn, New York [or in Count VI, at Jacksonville, Florida], a false and fraudulent joint income tax return * * *" Since the indictment alleged that the returns had not only been prepared in but filed from the Southern District, there was no basis for Gross' moving against it for improper venue, United States v. Albanese, 224 F. 2d 879 (2d Cir.) [55-1 USTC ¶9494], cert. denied 350 U. S. 845 (1955); he was entitled to await the government's case and to move when the government failed to prove that all the elements charged to have taken place in the Southern District in fact occurred there. United States v. Michelson, supra; United States v. Brothman, supra.

The government supports venue in the Southern District under 18 U. S. C. §3237, providing that "Except as otherwise expressly provided by enactment of Congress, any offense against the United States begun in one district and completed in another, or committed in more than one district, may be inquired of and prosecuted in any district in which such offense was begun, continued or completed." It relies on United States v. Albanese, supra, and United States v. Miller, 246 F. 2d 486 (2d Cir.), cert. denied 355 U. S. 905 (1957), where venue was sustained under that section. Neither is decisive here. In Albanese, an income tax evasion case, everything save the actual receipt of the returns took place in the district where the defendants were charged; and in Miller, a false statement prosecution, the statements were made up and mailed in the district of the indictment, and only the receipt was elsewhere. Here, on the contrary, there was no evidence that Gross filed the returns from a place in the Southern District.

Nevertheless we believe venue was properly laid in that district. "By utilizing the doctrine of a continuing offense, Congress may * * * provide that the locality of a crime shall extend over the whole area through which force propelled by an offender operates." United States v. Johnson, supra, at 275. The intent of Congress to avail itself of this prerogative was emphasized when, in the 1948 revision of the Criminal Code, four years after the Johnson decision, it altered the language of what is now 18 U. S. C. §3237, from that of the Judicial Code of 1911, ch. 231, §42, 36 Stat. 1100, "begun in one district and completed in another," by adding the words "or committed in more than one district." The return is basic to Federal income taxation. As stated in §601.602 of the Treasury Regulations, "All internal revenue taxes which are not collected by stamps are assessed and collected through the self-determination and self-application of the law and the regulations by taxpayers. The tax return forms are the instruments through which this is accomplished." The forms, prescribed in accordance with §6011 of the Internal Revenue Code of 1954, include a declaration by the preparer, if other than the taxpayer, under the penalties of perjury, that to the best of his knowledge the return is true, correct and complete based on all the information that he has.

The government's proof was that Gross sent incomplete and therefore untrue and incorrect information to the preparer in the Southern District; that the preparer thereupon prepared and attested returns in that district, which, while true on the basis of the information given him, were in fact false; and that he mailed them in the Southern District to Gross who then used them without change. This was enough to make the Southern District an "area through which force propelled by an offender operates." True no crime was "completed" in the Southern District. But it cannot be said the crime was neither "begun" nor "committed in part" there and was committed solely in a district where Gross and his wife simply signed and mailed the return and the Director received it. ¹

[Improper Cross-Examination]

We come now to the matter which we believe requires a new trial. On cross-examination of Gross it was brought out that Gross had been present at the hearings before the McClellan Committee; that he had been sworn as a witness at these hearings; and that he had there heard Chenicek testify, in passages that were read to him from the Committee hearings, as to the same payments to him that were here at issue. The United States Attorney then asked, and the judge overruled an objection to, the following question:

"Q. Prior to your testimony here yesterday did you ever say to any Government investigator, or to the McClellan Committee that you did not tell Mr. Chenicek that in return for these $4,000 payments there would be no difficulties in the deliveries?"

Gross answered, "No, I never did." The same process, of objection, overruling and negative answer, occurred with two other questions:

"Q. Prior to your coming to court yesterday did you ever tell any Government investigator, or the McClellan Committee that you did not receive these payments?"

"Q. Prior to your testimony here yesterday have you ever told any Government investigator, or the McClellan Committee, that you did not receive those payments of $2500 in 1954 and in 1955?"

The jury was reminded of this in the summation. ²

We need not determine whether defendant's objections should have been sustained under the rule of relevancy that failure to deny the statements of others is admissible "only when no other explanation is equally consistent with silence; and there is always another possible explanation--namely, ignorance or dissent--unless the circumstances are such that a dissent would in ordinary experience have been expressed if the communication had not been correct." 4 Wigmore, Evidence, §1071 (3d ed. 1940). For here another and more important principle is involved. The government knew there was "another possible explanation" of Gross' failure to deny Chenicek's statements before the McClellan Committee--Gross, when called as a witness there, had availed himself of the privilege against self-incrimination conferred upon him by the Fifth Amendment. ³ The course of questioning made it certain that this knowledge would not be limited to the prosecution. The government had brought out in cross-examination of Gross that he had been sworn at the McClellan Committee hearings, the questions were bound to elicit the answer that Gross had not there denied receipt of the payments, and the jury must have known the government would have placed in evidence any admission by him that he had received them. This left only one likely conclusion as to what had happened, and it would be altogether naive to suppose that a metropolitan jury, which had read of the extensive use of the privilege against self-incrimination made by witnesses before the Senate Committee, would not arrive at it. The questions thus accomplished the same result as if Gross had been asked whether he had asserted his constitutional privilege before the Committee, and we must consider them in that light.

We thus reach the issue whether direct questions on this subject would have been banned by the principles stated in Grunewald v. United States, 353 U. S. 391, 415-424 (1957) [57-1 USTC ¶9693]. The government argues here, as it did there, that defendant's proir testimonial behavior was inconsistent with his later assertion of innocence and was therefore admissible to show his trial testimony to be incredible as a recent contrivance. The government could make a somewhat stronger case here than in Grunewald of inconsistency between Gross' denial of receipt of payments at the trial and his assertion before the Committee that testimony concerning them would tend to incriminate him. However, in United States v. Tomaiolo, 249 F. 2d 683, 690-92 (2d Cir. 1957), we held it error to permit the prosecution to ask an important defense witness whether he had refused to testify before the grand jury, saying that "where a witness has a reasonable belief that he may be a defendant himself * * * it is perfectly consistent with innocence and with nonincriminatory answers to particular questions to refuse to answer any question at all." This was what Gross did before the McClellan Committee. Especially where, as here, the witness was the defendant himself, "the dangers of impermissible use of this evidence far outweighed whatever advantage the government might have derived from it if properly used." 353 U. S. at 424. The government does not succeed in avoiding this on the basis that the first references to the Committee hearings were made on the cross-examination of Chenicek and Hillbrant by defendant's counsel, which we find entirely proper, or that Gross' counsel had brought out on direct examination that Gross had first heard of the difficulties about shipments to the Journal American when he listened to the testimony of these witnesses at the hearings. The case would be different if Gross' counsel had asked him whether Gross had testified before the Committee and then endeavored to foreclose "the government on cross-examination from developing all the facts so that the partial account is not misleading." United States v. Sing Kee, 350 F. 2d 236, 240 (2d Cir.), cert. denied 355 U. S. 954 (1958).

Gross also claims error in the overruling of an objection to a question asked on cross-examination whether "a new man who came on the payroll, or came on the staff there on the loading platform [would] have to make any payments of money to get the job," to which he answered "Not that I know of." While we should not have considered any error in this ruling to require reversal, the relevancy of the question is not apparent to us, especially since, as the government stresses, "The question was carefully phrased not to suggest that Gross himself received any payments." We suggest that, in view of the possibly prejudicial effect of the question, it not be asked on a new trial unless this should become relevant on some ground not in the present record.

The judgment is reversed and a new trial ordered.

¹ Under 18 U. S. C. §3237(b), a defendant charged with income tax evasion outside the district where he resides may "elect to be tried in the district in which he was residing at the time the alleged offense was committed" by moving within 20 days after arraignment.

² There was no evidence that Gross had been interviewed by an investigator.

³ Hearings Before the Select Committee on Improper Activities in the Labor or Management Field, 86th Cong., 1st Sess., pp. 18296-300, 18302-041.