Forgery

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7206- Fraud and False Statements: Forgery

 

 

[62-2 USTC ¶9577]R. Milo Gilbert, Petitioner v. United States

Supreme Court of the United States, No. 478, 370 US 650, 82 SCt 1399, 6/25/62

[1954 Code Sec. 7206]

False and fraudulent statements: Forgery: Agency endorsement.--The defendant appealed his conviction of forgery in the endorsement of tax-refund checks of his clients. The Supreme Court vacated and remanded the case for a new trial. The record disclosed that the checks had been endorsed by the defendant as trustee. The Court concluded that an agency endorsement should not be included in the meaning of "forgery." The Court noted that the Government might be able to prove that the defendant did not endorse the checks in a representative capacity, but there should be a retrial with proper jury instructions.

Albert A. Dorn, 5710 W. Manchester Ave. , Fred Okrand, 257 S. Spring St., Los Angeles , Calif. , for petitioner. Archibald Cox, Solicitor General, Herbert J. Miller, Jr., Assistant Attorney General, J. William Doolittle, Assistant to Solicitor General, Beatrice Rosenberg, Kirby W. Patterson, Department of Justice, Washington 25, D. C., for respondent.

MR. JUSTICE HARLAN delivered the opinion of the Court:

Petitioner, an accountant whose business included acting for others in federal income tax matters, was charged in a thirty-five-count indictment with violations of 26 U. S. C. §7206(2), 18 U. S. C. §1001, and 18 U. S. C. §495, in that he had allegedly falsified his clients' returns (§7206(2)), forged their endorsements on government tax-refund checks (§495), and, by endorsing such checks, had made false statements as to a matter within the jurisdiction of a government agency (§1001). The jury convicted on thirty-one counts and acquitted on four others. On appeal [62-2 USTC ¶9576], 291 F. 2d 586, 597, the judgment of conviction was set aside as to twenty-nine counts, and a new trial ordered, because the Court of Appeals found that evidence used by the Government in support of these counts had been illegally seized. The judgment as to the remaining two counts (Nos. 21 and 22), charging the petitioner with having forged the endorsements of Daniel H. Bartfield and Charline R. Bartfield on two government refund checks (18 U. S. C. §495), was affirmed. ¹

It was stipulated at the trial that petitioner had endorsed in his own handwriting the two checks, made out to:

"Daniel H & Charlene R Bartfield c/o R Milo Gilbert 519 Taft Building Hollywood 28 Calif "

in the following manner:

"Daniel H. Bartfield Charline R. Bartfield R. Milo Gilbert, Trustee" ²

Petitioner claimed that a written power of attorney, allegedly signed by both Bartfields in his office, authorized him to endorse tax-refund checks, and that "Trustee" after his name served to designate the particular bank account where he deposited and held all client-refunds until December of each year, against the possibility of there being a refund adjustment and until his contingent fee was settled. The Bartfields acknowledged that the signatures on the power of attorney were theirs, but disclaimed recollection of signing the instrument, and denied that they ever authorized petitioner orally or in writing to receive or endorse checks. ³

On these premises the Court of Appeals, concluding that the evidence was sufficient to permit the jury to find that petitioner had endorsed the checks without authority (a conclusion which for present purposes we accept), held that one who endorses a government check by signing the name of the payee and then his own, as agent, when in fact he has no such authority, is guilty of forgery under §495. We granted certiorari to consider the correctness of that view of the statute. 368 U. S. 816. While not mentioned in the petition for certiorari, though discussed in the briefs on the merits, the Court of Appeals for the Tenth Circuit, after the Court of Appeals' decision in the present case, held that "forgery" under §495 does not embrace a purported, but misrepresented, agency endorsement (hereafter called simply an "agency endorsement"). Selvidge v. United States , 290 F. 2d 894. For reasons given in this opinion we agree with the Tenth Circuit.

I. At the outset we are met with the Government's suggestion that the statutory construction question need not be faced in this case. Before the Court of Appeals, as in the petition for certiorari, it was assumed by all that the two checks (which after the trial and before the case reached this Court had for some reason become mislaid) had been endorsed "by R. Milo Gilbert, Trustee." (Italics added.) That was a mistaken assumption for, as the checks themselves show (supra, p. 651), there was no "by" before "R. Milo Gilbert, Trustee."

Arguing that the jury might have found that the word "Trustee" after Gilbert's signature did not purport to indicate an agency endorsement, but was merely intended as a designation for routing the checks for deposit in one of Gilbert's "client" bank accounts, the Government suggests that a plain case of forgery is made out, and the agency-endorsement question is not in truth presented by the record.

We cannot so easily dispose of the case. For accepting the premise that the jury could have found that petitioner did not purport to act in a representative capacity when he endorsed the checks, it was surely also permissible for the jury to find that petitioner had purported to make an agency endorsement in both instances, and we are thus left to speculate on which theory its verdict in fact rested. Indeed the record before us seems to indicate that this aspect of the case was tried, at least primarily, on an agency-endorsement theory. The trial judge's instructions to the jury on this phase of the case were at best opaque. Having refused to instruct the jury that an agency endorsement was not forgery under §495, ⁴ he at no point undertook to explain the difference between an agency and a non-agency endorsement. ⁵ Nor can we perceive any force in the Government's further suggestion that the jury's verdict on these two counts might have rested simply on the theory that in describing himself as "Trustee" the petitioner had made a fictitious endorsement, in that he had never occupied that status. Since the charge was that petitioner had forged the names of the Bartfields, not of their agent, this is but another way of describing the agency-endorsement version of the transaction.

In this posture of things the Government's proposal that we bypass decision of the question that brought the case here must be rejected. If an agency endorsement does not constitute forgery under §495, the petitioner is at least entitled to a new trial under proper jury instructions.

II. The original predecessor of §495 was enacted in 1823, 3 Stat. 771, and in respects here pertinent has throughout the intervening years been in substantially the same form as §495. There is no significant legislative history illuminating §495 or any of its predecessors. In deciding whether "forge" under §495 embraces agency endorsements, it is therefore important to inquire, as the Government recognizes, into the common-law meaning of forgery at the time the 1823 statute was enacted. For in the absence of anything else to the contrary it is fair to assume that Congress used that word in the statute in its common-law sense.

In 1847 it was decided in the English case of Regina v. White, 2 Car. & K. 404, 175 Eng. Rep. 167 (Nisi Prius, Book 6), that "indorsing a bill of exchange under a false assumption of authority to indorse it per procuration, is not forgery, there being no false making." ⁶ 2 Car. & K., at 412, 175 Eng. Rep., at 170 (Nisi Prius, Book 6). This to be sure was some twenty-four years after the 1823 predecessor of §495 came on the books. The Government says that this English decision should be regarded as but an ill-advised and temporary departure from the earlier common law which was "soon recognized" and remedied by the passage of the Forgery Act of 1861, 24 & 25 Vict., c. 98, §24, defining forgery to include unauthorized signings "per procuration," with intent to defraud. ⁷ The Government draws from earlier English authority, 2 East, Pleas of the Crown, 850-859 (1803); 1 Hawkins, Pleas of the Crown, c. 70; Coke, third Institute (1797 ed.) 169; 4 Blackstone, Commentaries, 247, the conclusion that agency endorsements did constitute forgery under the common law as it existed when the 1823 American statute was passed.

This view cannot readily be accepted. The fifteen judges who participated in Regina v. White unanimously decided that case as they did only after considering the earlier English authorities. Such of those authorities as are now relied on by the Government are by no means as clear as the Government would have them. Thus Lord East's comments, supra, at p. 852, were: "Forgery at common law denotes a false making (which includes every alteration of or addition to a true instrument), a making malo animo, of any written instrument for the purpose of fraud and deceit. . . . [The ancient and modern authorities] all consider the offense as consisting in the false and fraudulent making or altering of such and such instruments." (Italics in original.) Coke, ⁸ Hawkins, ⁹ and Blackstone, ¹⁰ who are also cited by the Government, are no more persuasive towards the Government's view. The more inclusive definition of forgery effected by the English statutes, supra, p. 655 and note 7, proves not that Regina v. White was mistaken in its view of the common law but only that a broader definition was deemed desirable by Parliament. And finally, the Regina v. White view of forgery at common law was early accepted in a federal case as representing the English common law. In re Extradition of Tully, 20 F. 812. The same view of forgery has since been followed in most of the state and federal courts in this country. See, e.g., People v. Bendit, 111 Cal. 274, 276-280, 43 P. 901, 902; Pasadena Investment Co. v. Peerless Casualty Co., 132 Cal. App. 2d 328, 331, 282 P. 2d 124, 125; State v. Lamb, 198 N. C. 423, 425-426, 152 S. E. 154, 155-156; Dexter Horton Nat. Bank v. United States, Fidelity & Guaranty Co., 149 Wash. 343, 346-351, 270 P. 799, 800-802; Greathouse v. United States, 170 F. 2d 512, 514; Marteney v. United States, 216 F. 2d 760, 763-764.

The foregoing considerations combine to lead us to the conclusion that "forge" in §495 should not be taken to include an agency endorsement. So the Court of Appeals for the Tenth Circuit has held in Selvidge v. United States, supra, the only case in the lower federal courts squarely dealing with the point, ¹¹ and we perceive no sound reason for rejecting its conclusion. We find no more persuasive than did the Court of Appeals in Selvidge (290 F. 2d, at 896 and note 2) the scattered federal cases relied on by the Government in support of the opposite view. ¹² Nor are we impressed with the argument that "forge" in §495 should be given a broader scope than its common-law meaning because contained in a statute aimed at protecting the Government against fraud. ¹³ Other federal statutes are ample enough to protect the Government against fraud and false statements. See 18 U. S. C. §§ 1001-1026. Still further, it is significant that cases construing "forge" under other federal statutes have generally drawn a distinction between false or fraudulent statements and spurious or fictitious makings. See, e.g., Greathouse v. United States , supra (construing 18 U. S. C. §2314); Wright v. United States, 172 F. 2d 310, 311-312 (construing 18 U. S. C. §2314); Marteney v. United States , supra (construing 18 U. S. C. §2314); United States v. Carabasi, 292 F. 2d 362, 364 (construing 7 U. S. C. §1622(h)). Where the "falsity lies in the representation of facts, not in the genuineness of execution," it is not forgery. Marteney v. United States, supra, at 763-764. Of course, Congress could broaden the concept of "federal" forgery by statutory definition. We hold only that it has not yet done so

We conclude that petitioner's conviction cannot be sustained upon this record. However, since we are not prepared at this stage to say that the Government might not be entitled to succeed on these two counts of the indictment upon the theory that petitioner never signed the Bartifields' names in a representative capacity, we think the way should be left open for a retrial of them under proper jury instructions, in conjunction with the other counts already remanded by the Court of Appeals, within a reasonable time. Accordingly, the judgment of the Court of Appeals is vacated and the case is remanded to the District Court for further proceedings consistent with this opinion.

It is so ordered.

MR. JUSTICE BLACK, MR. JUSTICE CLARK, and MR. JUSTICE STEWART dissent, believing that one who endorses a check in the name of the payee without authority to do so is guilty of forgery under 18 U. S. C. §495, whether or not the forger falsely purports to have signed the payee's name as an authorized agent.

MR. JUSTICE FRANKFURTER and MR. JUSTICE WHITE took no part in the consideration or decision of this case.

¹ 18 U. S. C. §495 provides: "Whoever falsely makes, alters, forges, or counterfeits any deed, power of attorney, order, certificate, receipt, contract, or other writing, for the purpose of obtaining or receiving, or of enabling any other person, either directly or indirectly, to obtain or receive from the United States or any officers or agents thereof, any sum of money . . .

. . .

"Shall be fined not more than $1,000 or imprisoned not more than ten years, or both."

Counts 21 and 22, which are identical in form, charge:

"On or about June 2, 19 58, . . . the defendant R. Milo Gilbert knowingly and wilfully forged on United States Treasury Check . . . the endorsement and signature of the payees, Daniel H. and Chalrene R. Bartfield, for the purpose of obtaining and receiving said amount from the United States , its officers and agents."

² As payee of the two checks, Mrs. Bartfield's first name (Charline) was incorrectly spelled "Chalrene" on one and "Charlene" on the other, the former misspelling being carried over into the indictments. (Note 1, supra.) On one of the checks, petitioner's first name, as part of the payee inscription, was incorrectly spelled "Mile."

³ No claim is made in this case that there was anything wrong with the Bartfields' income tax returns, to which the two refund checks related.

⁴ Petitioner's requested instructions pertinent to these two counts, both rejected, were:

1. "One who executes an instrument purporting on its face to be executed by him as agent of a principal named therein, when in fact he has no authority for such principal to execute said instrument, is not guilty of forgery. People v. Bendit, 111 C. 274 (1896); International Finance Corporation v. People's Bank of Keyser, 27 F. 2d 523 at 527. 41 ALR 231 n."

2. "A check endorsed as follows--name of payee by other as trustee, does not constitute a forged instrument under U. S. C. Title 18, Section 495."

⁵ Other than a dictionary definition of the word "trustee," the only instructions given the jury by the trial judge on this phase of the case were these:

"Where a tax account[ant] represents a taxpayer in the preparation of tax returns, there is no presumption of authority and the rights of the tax accountant must be governed by the terms of his employment, as applies to any other ordinary agency.

"Also, a power of attorney to prosecute a claim against the Government giving authority to receive a check in payment gives the agent no power to endorse and collect the check. But such authority may be given either orally or by writing."

No instructions specifically addressed to the elements of the offense under 18 U. S. C. §1001 were given, and the Government does not here seek to support the conviction on the two forgery counts on the basis of that section.

⁶ The trial judge, in summation, had instructed the jury "that if they were of opinion that the prisoner, at the time when he signed this indorsement, had wilfully misrepresented that he came from Mr. Tomlinson [the defendant's former employer] with intent to defraud him or the bankers, and had no authority from Mr. Tomlinson, they ought to find him guilty." 2 Car. & K., at 406, 175 Eng. Rep., at 168 (Nisi Prius, Book 6).

⁷ The statute presently in effect in England, the Forgery Act of 1913, 3 & 4 Geo. 5, c. 27, §1(2), provides that a document is forged "if the whole or any material part thereof purports to be made by or on behalf or on account of a person who did not make it nor authorise its making . . ."

⁸ "Lord Coke [Third Institute 169] indeed seems to confine it [forgery] in strictness to an act done in the name of another, but this was long ago agreed . . . to be too narrow a definition," 2 East, Pleas of the Crown, 852 (1803). Hawkins interpreted Coke to say that even the alteration of a deed, by adding a 0 to 500 to make it 5000, "may more properly be called a false than a forged Writing, because it is not forged in the Name of another, nor his Deal nor Hand counterfeited." 1 Hawkins, Pleas of the Crown, c. 70, §2, at 183 (1762).

⁹ "Forgery by the Common Law seemeth to be an Offense in falsely and fraudulently making or altering any Manner of Record, or any other authentick Matter of a Public Nature . . ." 1 Hawkins, Pleas of the Crown, c. 70 §1, p. 182 (1762). "Also the Notion of Forgery doth not seem so much to consist in the counterfeiting a Man's Hand and Seal, which may often be done innocently, but in the endeavouring to give an Appearance of Truth to a mere Deceit and Falsity, and . . . to impose that upon the World as the solemn Act of another . . ." Id., §2, at 183.

¹⁰ "Forgery, or the crimen falsi, . . . may with us be defined (at common law) to be, 'the fraudulent making or alteration of a writing to the prejudice of another man's right' . . ." 4 Blackstone, Commentaries (Christian ed. 1809), 247-248.

¹¹ We do not read the early case of United States v. Osgood, 27 Fed. Cas. No. 15,971a, 362, decided under the 1823 statute, as pointing to a different conclusion.

¹² Ex parte Hibbs, 26 F. 421; Yeager v. United States, 59 App. D. C. 11, 32 F. 2d 402; United States v. Tommasello, 64 F. Supp. 467; Quick Service Box Co. v. St. Paul Mercury Indemnity Co., 95 F. 2d 15.

¹³ The fact that the original 1823 statute had a proviso disclaiming any purpose to preempt state criminal jurisdiction in respect of matters covered by the Federal Act does not of course, as the Government suggests, indicate that "forgery" had a wider meaning in federal than under state law. Cf. 18 U. S. C. §3231, where a similar general proviso relating to all statutes in Title 18 is now found.

[66-1 USTC ¶9386]R. Milo Gilbert, Appellant v. United States of America , Appellee

(CA-9), U. S. Court of Appeals, 9th Circuit, No. 19,060, 359 F2d 285, 4/5/66, Affirming unreported District Court opinion

[1954 Code Sec. 7206(2)]

Falsification of clients' returns: False representations: Endorsement of refund checks.--An accountant who endorsed his clients' names on tax refund checks, by his name as trustee, was found guilty of unlawfully representing that he was duly duthorized to make the endorsements, in violation of 18 U. S. C. §1001, even though the taxpayers later condoned his acts. Since the sentences on conviction on these counts were longer than, and concurrent with, sentences on conviction on counts charging the accountant with falsifying his clients' returns in violation of I. R. C. §7206(2), it was unnecessary to consider his attack on the validity of the conviction on the latter counts. BACK REFERENCES: 66FED ¶5714.10 and 66FED ¶5714.15.

Edward L. Lascher, 6842 Van Nuys Blvd. , Van Nuys , Calif. , for appellant. Manuel L. Real, United States Attorney, John K. Van de Kamp, J. Brin Schulman, Assistant United States Attorneys, Los Angeles, Calif., for appellee.

Before BARNES and KOELSCH, Circuit Judges, and MATHES, District Judge.

KOELSCH, Circuit Judge:

This case is here for the second time. Part of its background and general nature appears from this succinct statement contained in the Supreme Court's opinion in Gilbert v. United States [62-2 USTC ¶9577], 370 U. S. 650 (1962):

"Petitioner" (i.e., appellant Gilbert), "an accountant whose business included acting for others in federal income tax matters, was charged in a thirty-five count indictment with violations of 26 U. S. C. §7206(2), 18 U. S. C. §1001 and 18 U. S. C. §495, in that he had allegedly falsified his clients' returns (§7206(2)), forged their endorsements on government tax-refund checks (§495), and, by endorsing such checks, had made false statements as to a matter within the jurisdiction of a government agency (§1001). The jury convicted on thirty-one counts and acquitted on four others. On appeal [62-2 USTC ¶9576], 291 F. 2d 586, 597, the judgment of conviction was set aside as to twenty-nine counts, and a new trial was ordered. . . . The judgment as to the remaining two counts . . ., charging the petitioner with . . . having forged the endorsements . . . on two government refund checks (18 U. S. C. §495), was affirmed."

The Supreme Court reversed the two forgery counts. On the retrial Gibert was convicted of twelve §7206(2) counts and three §1001 counts. He was acquitted of four charges and the remainder were dismissed. The district court imposed five-year

The §1001 counts each involved single and three years on those for §7206(2). All sentences were made concurrent. Gilbert has again appealed.

The $1001 counts each involved single U. S. Treasury checks that were made payable respectively to Fay Matorian, Sam Matorian and Allen S. Frankel. They were issued to refund to the taxpayers' overpayments of federal income taxes. Gilbert came into their possession because the Treasury Department mailed them to his office. After endorsing them with the taxpayer's name "by R. Milo Gilbert, Trustee" he deposited them in the local bank to the credit of his trustee account, and in due course they were forwarded to the Treasury Department and paid. The evidence viewed in a light most favorable to the validity of the conviction established that none of the taxpayers was aware that he was entitled to any such refund or that any such checks would be issued.

[False Representations]

Gilbert contends that the record utterly fails to show any false representations because the endorsements were precisely what they purported to be. It is of course true that Gilbert made no pretense that the payees had themselves executed the endorsements, but it does not follow that what he did would not constitute an unlawful representation. On the contrary, his endorsements themselves constituted representations that he was duly authorized to make them.

Gilbert further challenges the implied finding that the representation was false. He concedes that he acted without prior authority in endorsing the checks but he makes the curious argument (1) that afterwards the taxpayers ratified his acts and therefore by virtue of the doctrine of relation back his representation must be deemed to be true and (2) that he became a "tentative" trustee of a tentative (or "Totten") ¹ trust by reason of depositing the checks into his trust account and hence had power to make the endorsements.

(1) Even if the evidence conclusively established that the taxpayers, after learning what Gilbert had done, thereupon ratified or approved his acts this would not make his conduct any less criminal. If his acts constituted a criminal offense, what the taxpayers may have done thereafter by way of condonation is totally irrelevant, for the policy of the law is well settled, that a private person may not excuse a criminal act. Seals v. United States, 221 F. 2d 243 (8th Cir. 1955); Savitt v. United States, 59 F. 2d 541 (3d Cir. 1932); People v. Alba, 46 Cal. App. (2d) 859, 117 P. 2d 63 (1941); 1 Wharton Cr. L. (1957 ed.) 125 p. 268.

(2) Nor does it follow from the fact Gilbert deposited the checks in a trust account that he possessed the authority to endorse them for deposit. His argument is based on circular reasoning.

Gilbert's point that he should not have been found guilty because his statements, even if false, were made to the bank rather than directly to the Department of the Treasury is equally lacking in merit. Section 1001 contains no language that even suggests a false representation must be so directed; in plain terms, it provides that such a representation must be made ". . . in any matter within the jurisdiction of any department or agency of the United States. . . ." Our court has held that in keeping with the statute's "vital public purpose of protecting governmental functions from frustration and distortion through deceptive practices . . . it must not be construed as if its object were narrow and technical." Ogden v. United States, 303 F. 2d 724 (9th Cir. 1962). And several circuits have squarely held that the statute does not impose this asserted requirement. Thus, in United States v. Mellon, 96 F. 2d 462 (2d Cir. 1938) it was held that an application to a local bank for an F. H. A. insured loan was within the statute. And in Ebeling v. United States, 248 F. 2d 429 (8th Cir. 1957) cert. den. sub nom Emerling v. United States, 355 U. S. 907 (1957), the Eighth Circuit announced the same conclusion in a situation where the representations consisted of false invoices submitted by a sub-contractor to the prime contractor doing work for the U. S. Department of the Army. There, evidence was adduced tending to show that the accused knew or was chargeable with knowledge that the representation bore a relation to some matter "within the jurisdiction of an agency or department of the United States," in that he knew charges appearing in the invoices were to be reflected in the prime contractor's statement to the government. So here Gilbert certainly was aware that the endorsement of the checks was the first crucial step in their journey to the Treasury Department where they would be ultimately presented for payment. Pereira v. U. S., 347 U. S. 1 (1954).

Little need be said in answer to the point that since the checks and already issued Gilbert could not by endorsing them have influenced government action. He was not charged with causing them to issue on false representations, but with falsely representing his authority to endorse them after they were issued.

[Forgery Counts Retained]

At the outset of the trial the district attorney, no doubt mindful of the Supreme Court's ruling on the forgery issue (370 U. S. 650), stated that although he would not press the counts embodying those charges he wanted to retain them for the present. The district judge thereupon denied Gilbert's motion to dismiss, but said that as trier of fact he would "give them absolutely no weight at all as far as the trial is concerned." At the conclusion of all the evidence he dismissed them.

The district attorney's conduct was unusual but hardly such as to constitute misconduct. The important question here, however, is not one of the district attorney's motive, but whether the accused has demonstrated he suffered prejudice in any substantial degree because of that conduct. We think not. Gilbert professes to concede that the joinder of the charges did not "per se" deprive his trial of essential fairness, yet in the same breath and with a complete lack of consistency, he urges "that joinder . . . particularly of admittedly . . . untenable charges . . . for the bold purpose of thereby reinforcing other charges is a denial of the fundamental concepts of ordered justice." The clearest expression of his thesis is that "To a high degree, none of the charges was weighed independently, but rather the 'cumulative guilt' of the appeallant in the case as a whole, as a gestalt, was the nature of the judgment reached." Certainly, the comments of the trial judge do not bear out Gilbert's assertion. We should point out that all the charges involved closely related matters and that criminal intent was an essential element of those which the district attorney actively presed. Evidence tending to throw light on this issue of course was thus certainly admissible even though it involved proof of a collateral matter such as the crimes charged in the "inactive" counts. Moreover, Gilbert makes no complaint concerning the court's ruling on the admission of any particular evidence, and we will not actively pressed. Evidence tending to throw

[Venue]

Gilbert is in a poor position to urge lack of proof of venue of the crimes charged in the §1001 counts of the indictment. We think he waived such objection. True, he made a motion in the trial court for an acquittal but the ground was specifically limited to the sufficiency of the allegations of the indictment and nowhere in the ensuing argument did he assert venue had not been proved. Neither the case of United States v. Jones, 174 F. 2d 746 (7th Cir. 1949), relied upon by Gilbert, nor United States v. Brothman, 191 F. 2d 70 (2d Cir. 1951), afforded him any assistance. Both construed Rule 29, Fed. R. Cr. P. to mean that a motion to acquit on the general ground of insufficiency of evidence would serve to preserve a point regarding venue. But the courts were careful to note that the appellant had neither particularized his objection nor been permitted or required to do so and hence waiver could not be presumed.

Moreover, Gilbert failed to specify the point as error, as required by Rule 18(2) of this court. It is first mentioned in his reply brief, accompanied by an excuse which amounts to an admission, that he misunderstood the gravamen of the charge. We reject the attempted explanation and reiterate that "Certainly the use of new material in a reply brief transgresses against the canons of fair forensics." Fredrick v. United States, 163 F. 2d 536 (9th Cir. 1947), cert. den. 332 U. S. 775 (1947).

Out of an abundance of solicitude for the rights of the appellant, we have considered the point under the plain error rule, but have found it baseless. Venue was laid in Los Angeles County, California; it was there that Gilbert deposited in banks to the credit of his trustee account the United States Government checks that bore his false endorsements, and in our opinion it was there that the crimes were commmitted. See United States v. Gilliland, 312 U. S. 86 (1941); United States v. Mellon, supra. As stated at the beginning of this opinion, all sentences were concurrent and those on the §1001 counts were of longer duration. The convictions on those counts, being free of error, it would serve no useful purpose to consider Gilbert's attacks on the validity of those remaining. Sinclair v. United States, 279 U. S. 263, 299 (1929); Lawn v. United States [58-1 USTC ¶9189], 355 U. S. 339, 359 (1958).

The judgment is affirmed.

¹ So called because of the name of the case which first gave such an arrangement judicial approval. Declaring that "[t]he doctrine of 'tentative trusts' created by deposits 'in trust' for some person other than the depositor appears to be settled law in this state," the Supreme Court of California noted that "[i]n adopting such doctrine, the California decisions have followed the rule formulated in the oftquoted case of Matter of Totten, 179 N. Y. 112, 71 N. E. 748, at page 752, 70 L. R. A. 711: 'A deposit by one person of his own money in his own name as trustee for another, standing alone, does not establish an irrevocable trust during the lifetime of the depositor. It is a tentative trust merely, revocable at will, until the depositor dies or completes the gift in his lifetime by some unequivocal act or declaration, such as delivery of the passbook or notice to the beneficiary. In case the depositor dies before the beneficiary without revocation, or some decisive act or declaration of disaffirmance, the presumption arises that an absolute trust was created as to the balance on hand at the death of the depositor . . .'" Bruckes v. Home Federal Sav. & Loan Ass'n, 36 Cal. 2d 845, 228 P. 2d 545 at page 548 (1951).

 

 

[99-1 USTC ¶50,262] United States of America, Plaintiff-Appellee v. Vika Maopa Akaoula, Defendant-Appellant

(CA-10), U.S. Court of Appeals, 10th Circuit, 98-4028, 2/10/99 , Affirming and dismissing an unreported District Court decision

[Code Sec. 7206 ]

Penalties, crimes: Fraud or false statements: Joinder of claims: Forgery: Common plan or scheme.--Charges against a tax return preparer for forging endorsements and signatures on refund checks were properly joined with charges for preparing false returns. All of the conduct was part of a common scheme or plan to profit by the preparation of false tax returns.
[Code Sec. 7206 ]

Penalties, crimes: Preparation of false returns.--A tax return preparer who placed false information in her clients' returns was properly convicted of aiding and assisting in the preparation of false returns. The evidence supported the jury's conclusion that the clients did not provide the preparer with the information; rather, she herself made the false claims. The clients' signatures on the returns did not absolve her of liability for making the false claims.
[Code Sec. 7206 ]

Preparation of false returns: Sentencing guidelines: Downward departure from: Authority to depart.--Jurisdiction was lacking to review the trial court's refusal to depart downward from the Sentencing Guidelines where a tax preparer had been convicted of filing false client returns. The trial court did not base its decision on a purported lack of authority; rather, it examined the evidence and determined that a downward departure was inappropriate.

Before: PORFILIO, BALDOCK and EBEL, Circuit Judges. ^*

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

ORDER AND JUDGMENT ^**

BALDOCK, Circuit Judge:

A jury convicted Defendant Vika Maopa Akaoula on thirty-one counts of aiding and assisting in the preparation of false tax returns, in violation of 26 U.S.C. §7206(2), seven counts of making false statements to the IRS, in violation of 18 U.S.C. §1001, two counts of forging United States Treasury checks, in violation of 18 U.S.C. §510(a)(1), and two counts of uttering forged United States Treasury checks, in violation of 18 U.S.C. §510(a)(2). The district court sentenced Defendant to thirty-months imprisonment. Defendant appeals the convictions and sentence claiming that the district court erred by: (1) denying her a judgment of acquittal on counts one through thirty-eight of the indictment; (2) failing to sever counts thirty-nine and forty from the remaining counts of the indictment; and (3) refusing to depart downward from the applicable sentencing guideline range. As to Defendant's first two claims, we exercise jurisdiction under 28 U.S.C. §1291, and affirm. As to Defendant's third claim, we lack jurisdiction and dismiss.

Defendant first argues that the government's evidence was insufficient to establish that she violated 26 U.S.C. §7206(2) and 18 U.S.C. §1001. We will reverse a conviction based upon insufficient evidence only if no rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. United States v. Haslip, 160 F.3d 649, 652 (10th Cir. 1998). In reviewing the record, we view the evidence and the reasonable inferences to be drawn therefrom in a light most favorable to the government. Id. at 652-53. We do not weigh the evidence or consider the credibility of the witnesses. Id. at 653.

Counts one through thirty-one of the indictment charged Defendant with violating 26 U.S.C. §7206(2). To sustain a conviction under §7206(2), the government must prove that: (1) defendant aided, assisted, procured, counseled, advised or caused the preparation and presentation of a return; (2) the return was fraudulent or false as to a material matter; and (3) defendant acted willfully. United States v. Sassak [89-2 USTC ¶9455], 881 F.2d 276, 278 (6th Cir. 1989). In this case, Defendant does not dispute that the returns she prepared were false as to material matters. Instead, relying on 31 C.F.R. §10.34(a)(3), Defendant argues that as a return preparer she was entitled to rely upon her clients' return signatures verifying the correctness of the return information. ³ Defendant's argument is meritless.

Our review of the record reveals that Defendant willfully caused the presentation of false returns to the IRS. Section 10.34(a)(3) does not allow a return preparer to "ignore the implications of information furnished to, or actually known by, the practitioner." Indeed, a preparer must inquire if the information "appears to be incorrect, inconsistent, or incomplete." In this case, the tax returns, among other things, falsely claimed: (1) head of household status even though the taxpayer was married and living with his or her spouse; (2) exemptions for dependants who did not exist or who received no support from the taxpayer; (3) inflated deductions for medical and other expenses of the taxpayer; and (4) earned income credits to which the taxpayer was not entitled. Furthermore, the evidence clearly showed that Defendant's clients did not provide the false information. Instead, Defendant placed the false information in her clients' returns. Thus, Defendant cannot now hide behind her clients' signatures which purportedly verified the information contained in the returns. Based upon the evidence presented, the jury reasonably concluded that Defendant knew the returns she prepared contained false information when she submitted them to the government.

Counts thirty-two through thirty-eight of the indictment charged Defendant with violating 18 U.S.C. §1001. To sustain a conviction under §1001, the government must prove that: (1) defendant made a statement; (2) defendant knew the statement was fraudulent or false; (3) defendant made the statement willfully; (4) the statement was within the jurisdiction of a federal agency; and (5) the statement was material. United States v. Daily, 921 F.2d 994, 999 (10th Cir. 1990).

The indictment alleged that to support the information contained in her clients' tax returns, Defendant submitted seven different documents to the IRS which contained false statements. Defendant does not deny that those statements were within the jurisdiction of a federal agency and were material. Rather, Defendant argues she did not know the statements were false. Defendant's clients, however, testified at trial that they did not provide Defendant with false information and that Defendant herself made the false statements. While the jury could have accepted Defendant's assertion that she did not knowingly provide the government with false information, the evidence in the record is sufficient to support the jury's finding to the contrary. Accordingly, we reject Defendants challenge to the sufficiency of the evidence on counts one through thirty-eight of the indictment.

Defendant next argues that the district court should have severed counts thirty-nine and forty of the indictment, which charged her with forging endorsements and signatures on two tax refund checks, from the indictment's remaining counts. Because Defendant did not object to the joinder of the counts at trial, we review only for plain error. Fed. R. Crim. P. 52(b). We will not exercise our discretion to correct plain error unless the error "seriously affects the fairness, integrity or public reputation of judicial proceedings." United States v. Olano, 507 U.S. 725, 732 (1993) (internal quotations omitted). ⁴

Under Fed. R. Crim. P. 8(a), joinder of offenses is permitted if the offenses "are of the same or similar character or are based on the same act or transaction or on two or more acts or transactions connected together or constituting parts of a common scheme or plan." We construe Rule 8(a) broadly to allow liberal joinder to enhance the efficiency of the judicial system. United States v. Johnson, 130 F.3d 1420, 1427 (10th Cir. 1997), cert. denied, 119 S. Ct. 78 (1978).

We conclude that joinder of the offenses in this case was proper because the conduct alleged in all counts of the indictment was part of a common scheme or plan to enhance Defendant's business and profit by preparing false tax returns for her clients. The forgeries charged in counts thirty-nine and forty were directly linked with the false returns which were the subject of counts thirty and thirty-one. Moreover, the IRS issued the refund checks described in counts thirty-nine and forty to clients as a direct result of the false tax returns that Defendant filed on their behalf. Accordingly, we do not believe the district court's failure to sever counts thirty-nine and forty constituted plain error.

Lastly, Defendant argues that the district court abused its discretion by refusing to depart downward under the sentencing guidelines. In United States v. Castillo, 140 F.3d 874, 887 (10th Cir. 1998), we recently stated:

[C]ourts of appeals cannot exercise jurisdiction to review a sentencing court's refusal to depart from the sentencing guidelines except in the very rare circumstance that the district court states that it does not have authority to depart from the sentencing guideline range for the entire class of circumstances proffered by the defendant.

At Defendant's sentencing hearing, the court stated:

I do not believe that this is an appropriate case for departure. . . . I note that in tax cases deterrence is a very important aspect, and I also note that, . . . Ms. Akaoula did abuse a small group of people who--and I watched them testify--appeared very naive, quite trusting, and she truly abused her position of trust. For that reason I am not going to depart.

The district court did not base its decision to deny a downward departure on a lack of authority to depart. Rather, the court examined the particular circumstances before it and determined that no departure was in order. Accordingly, we have no jurisdiction to review the district court's refusal to depart downward in this case.

AFFIRMED IN PART; DISMISSED IN PART.

^* After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R. App. P. 34(a)(2)(C); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument.

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

³ Section 10.34(a)(3) provides:

(3) Relying on information furnished by clients. A practitioner advising a client to take a position on a return, or preparing or signing a return, or preparing or signing a return as a preparer, generally may rely in good faith without verification upon information furnished by the client. However, the practitioner may not ignore the implications of information furnished to, or actually known by, the practitioner, and must make reasonable inquiries if the information furnished appears to be incorrect, inconsistent, or incomplete.

31 C.F.R. §10.34(a)(3)

⁴ In her brief, Defendant appears to argue that if we direct the district court to grant her a judgment of acquittal on counts one through thirty-eight based on insufficient evidence, we must grant her a new trial as to counts thirty-nine and forty because those counts were inextricably intertwined with counts one through thirty-eight, resulting in undue prejudice before the jury. Because we affirm Defendant as convictions on counts one through thirty-eight, however, we have no occasion to vacate her convictions as to counts thirty-nine and forty based on that argument. Out of an abundance of caution, we nevertheless proceed with a discussion of the propriety of joining counts thirty-nine and forty with counts one through thirty-eight.