Government Agent Prosecuting
Claim
7203:
Willful Failure to File Return, Supply Information, or Pay Tax:
Defenses: Government Agent Prosecuting Claim
[36-2
USTC ¶9467]
United States
v. David L. Olster and Samuel Olster
United
States District Court for the Middle District of Pennsylvania, No. 9069,
15 FSupp 625, Decided July 3, 1936Where defendant, while a deputy
collector, presented a claim for a client against the United States for
overpaid AAA taxes, receiving compensation therefor in violation of the
provisions of Sec. 113 of the Criminal Code, the court refuses to quash
an indictment therefor where the defense is based on the ground that the
AAA was declared unconstitutional.
Frederick
V. Follmer, U. S. Atty., and Arthur A. Maguire, Asst. U. S. Atty., both
of Scranton, Pa., for the United States. Ladner & Ladner, of
Philadelphia
,
Pa.
, for defendant David L. Olster. Harry Berkowitz, of
Philadelphia
,
Pa.
, for defendant Samuel Olster.
JOHNSON,
District Judge:
This
case comes before the court on motions by the defendants to quash an
indictment against them.
[Charges
in Indictment]
The
indictment contains two counts, each charging a similar offense, but
involving a different party. The substance of the first count is that
the Federal Cigar Company, Inc., was required to file and did file
certain necessary tax returns in conformity with the regulations
promulgated by the Secretary of Agriculture by authority of the
Agricultural Adjustment Act of 1933 (48 Stat. 31); that David L. Olster,
while acting as deputy internal revenue collector, and in such position
knowing the matter and contents of the said processing tax returns,
"did, by and through one Samuel Olster, furnish certain information
and render certain services to the said Federal Cigar Company, Inc., by
informing and advising it * * * of the status of its processing tax
returns and that the said Federal Cigar Company, Inc., was, upon the
matters contained in said processing tax returns entitled to a refund
for overpayment of taxes"; that thereafter the said David L. Olster
did prepare for the said Federal Cigar Company, Inc., amended returns
and claims for credit of overpayment in the sum of $4,476.21, which
amended returns and claims for overpayment were duly filed with the
United States Collector of Revenue by the Federal Cigar Company, Inc.,
pursuant to the advice and services of the said David L. Olster; that
the said David L. Olster, during his continuance in office as such
deputy internal revenue collector, "wrongfully and unlawfully did
receive certain compensation from the said Federal Cigar Company, Inc.,
that is to say $1,000.00 for the services so rendered, and to be
rendered by him * * * in relation to said processing taxes due to the
United States of America, and proceedings, claims, matters and things
aforesaid, in which the said United States of America was a party and
directly interested, and the said Samuel Olster, did, then and there,
knowingly, wilfully and unlawfully aid and abet the said David L. Olster
* * * to receive, wrongfully and unlawfully, certain compensation, to
wit, $1,000.00 from the said Federal Cigar Company, Inc. * * * knowing
that the said services of David L. Olster * * * were in relation to said
processing taxes due to the United States of America * * * the same
being proceedings * * * in which the United States of America was a
party and directly interested therein. * * *"
[Grounds
for Motion to Quash]
Each
of the defendants moved to quash the indictment for the reasons that the
indictment fails to charge any offense against the United States on the
part of either defendant; that by reason of the unconstitutionality of
the Agricultural Adjustment Act and all regulations thereunder, no
criminal offense is charged in that by reason of said
unconstitutionality the United States is neither a party nor directly or
indirectly therein concerned; that the indictment charges an alleged
commission of an offense by and through an agent, and is therefore of no
effect.
[The
Government's Contention]
The
government contends that the indictment is based, not upon the
Agricultural Adjustment Act, but upon section 113 of the Criminal Code,
18 U. S. C. A. §203, making it unlawful for any person in the employ of
the United States to receive compensation for services rendered to any
person in relation to any proceeding in which the United States is a
party or directly or indirectly interested, which act is still
subsisting; that the rehearsal in the indictment of the means used by
the defendant David L. Olster does not invalidate the indictment; that
whether the proceeding or claims in which the United States has an
interest is subsequently found to be invalid is of no importance since
the criminal act depends upon the receiving of compensation for services
rendered in relation to any proceeding in which the United States has an
interest; that the charging part of the indictment contains no charge of
an offense through an agent.
[The
Statute]
The
statute on which the indictment is based, 18 U. S. C. A. §203, is as
follows: "Whoever * * * being the head of a department, or other
officer or clerk in the employ of the United States, shall, directly or
indirectly, receive, or agree to receive, any compensation whatever for
any services rendered or to be rendered to any person, either by himself
or another, in relation to any proceeding, contract, claim, controversy,
charge, accusation, arrest, or other matter or thing in which the United
States is a party or directly or indirectly interested, before any
department, courtmartial, bureau, officer, or any civil, military, or
naval commission whatever, shall be fined," etc.
[Unconstitutionality
of Tax Immaterial in Determining Guilt]
The
United States
was still a party to the proceeding and interested therein
notwithstanding the fact that the Agricultural Adjustment Act, 48 Stat.
31, was declared unconstitutional. Its interest did not immediately and
finally cease when the act was declared unconstitutional. It was
interested, for example, in retaining taxes that could not be lawfully
returned, and in returning the taxes that were lawfully claimed, less
proper charges for disbursement. The offense charged did not depend upon
the validity of the pending proceeding; the gist of the crime is the
wrong done to the people by corruption in public office, to wit, the
receipt of money by an officer of the United States for services to any
person in relation to any proceeding in which the United States is a
party, or directly or indirectly interested. Certainly the corruptness
of the defendants' acts and the wrong done the government and the people
was not lessened by a subsequent determination that the processing taxes
were invalid.
The
crime of bribery defined in section 117 of the Criminal Code (18 U. S.
C. A. §207) has been held to belong to the same class of crimes as the
one charged in this case, section 113 of the Criminal Code (18 U. S. C.
A. §203).Egan v. United States, 52 App. D. C. 384, 287 F. 958.
InFall v.
United States
, 60 App. D. C. 124, 49 F. (2d) 506, 509, the offense charged was
bribery. The court there said: "Whether the pending matter is valid
or not becomes immaterial, since the acceptance of the bribe is to do an
unlawful act." And so in this case the receipt of money for the
services rendered is to do an unlawful act. Section 113 of the Criminal
Code (18 U. S. C. A. §203) requires only that the services rendered,
for which money is received, be "in relation to" a proceeding
in which the United States is interested, whether or not the pending
matter is valid.
[Indictment
Does Not Charge Commission of Offense Through Agent]
The
indictment does not charge, as the defendants contend, the commission of
an offense by and through an agent. It is true that in certain recitals
the indictment alleges that the defendant David Olster did by and
through the defendant Samuel Olster advise the Federal Cigar Company,
Inc., that it was entitled to a refund for overpayment of taxes, but
that is not the crime charged by this indictment and it is not an
offense under 26 U. S. C. A., §55(g) as this court has held in United
States of America v. David L. Olster, 15 F. Supp. 623 [¶9410
herein]. The offense here charged is the receipt of money for services,
18
U. S.
C. A. §203, and nowhere does the indictment charge the commission of
this offense through an agent.
[Motion
to Quash Denied]
And
now it is ordered that the motions to quash the indictment be and hereby
are denied.