Motion For
Continuance
7206- Fraud and
False Statements: Motion for Continuance
[80-2
USTC ¶9529]
United States of America
, Appellee v. Minwer A. Badwan, Appellant
United States of America
, Appellee v. Rawhi A. Badwan, Appellant
(CA-4),
U. S. Court of Appeals, 4th Circuit, No. 79-5144, 79-5145, 624 F2d 1228,
6/26/80
, Aff'g an unreported District Court decision
[Code Sec. 7206]
Criminal penalties: Fraud and false statements: Convictions
affirmed.--The taxpayers' convictions for filing false federal
income tax returns were affirmed. The Court held that: (1) the District
Court's denial of the taxpayers' motion for a continuance of the trial
date did not violate fundamental fairness or deprive the taxpayers of
effective assistance of counsel and therefore did not constitute an
abuse of discretion, (2) the District Court did not abuse its discretion
in denying, without a hearing, the taxpayers' motion to suppress
evidence on the morning of the trial, and (3) even though the taxpayers
had their returns prepared by an accountant, the accountant did so
solely on the basis of information provided by the taxpayers, and since
the taxpayers signed and filed the returns the "willfully makes and
subscribes" provision of Code Sec. 7206 applied to them. One
dissent.
Justin
W. Williams, United States Attorney, Leonie M. Brinkema, Daniel J.
Conway, Assistant United States Attorneys, Daniel M. Cisin, Jerel Ikuo
Yamamoto, for appellee. Lawrence P. Lataif for appellants.
Before
WINTER, BUTZNER and PHILLIPS, Circuit Judges.
PHILLIPS,
Circuit Judge:
Minwer
Badwan and Rawhi Badwan appeal their convictions under 26
U. S.
C. §7206(1) for filing false federal income tax returns. They raise
three issues on appeal: the denial of their motions for a continuance of
the trial date, the denial of their untimely motion to suppress
evidence, and the sufficiency of the evidence to prove all elements of a
violation of 26 U. S. C. §7206(1). We disagree with their contentions
on each of these points and affirm.
I.
The appropriate standard and perspective for review of a denial of a
motion for a continuance is found in Ungar v. Sarafite 376 U. S.
575 (1976):
The
matter of continuance is traditionally within the discretion of the
trial judge, and it is not every denial of a request for more time that
violates due process even if the party fails to offer evidence or is
compelled to defend without counsel. Contrariwise, a myopic insistence
upon expeditiousness in the fact of a justifiable request for delay can
render the right to defend with counsel an empty formality. There are no
mechanical tests for deciding when a denial of a continuance is so
arbitrary as to violate due process. The answer must be found in the
circumstances present in every case, particularly in the reasons
presented to the trial judge at the time the request is denied.
Id.
at 589 (citations omitted) (emphasis supplied).
The
denial of the Badwans' motions for a continuance is the most troublesome
issue presented by this case. Viewed from the perspective of the
district court at the time it denied the motions, however, we cannot say
that the district court abused its discretion.
A.
Minwer and Rawhi Badwan are brothers and were the sole partners in
Virginia International Trading Company. ("VITC"). On
March 5, 1979
, a federal grand jury sitting in
Alexandria
,
Virginia
returned a five count indictment against Minwer Badwan and a four count
indictment against Rawhi Badwan. Each was charged with filing false
individual tax returns for the years 1972, 1973 and 1974. In addition,
Minwer Badwan was charged with two counts and Rawhi Badwan with one
count for filing false partnership tax returns for those same years.
On
March 12, 1979
, the Badwans appeared with retained counsel before the district court
for arraignment. They pleaded not guilty and demanded a jury trial. The
district court set the case for trial on
April 3, 1979
. All pretrial motions were to be submitted by March 21 and heard on
March 23. With full opportunity to do so, defense counsel raised no
objections to these dates. At oral argument in this court counsel
explained that he did not object because he had not yet had a chance to
review the evidence in the case. In addition, he said, he knew that the
district court was not favorably disposed to grant motions for
continuance.
On
March 20, counsel filed a motion for an extension of time within which
to file pre-trial motions and for a continuance of the trial date. In
the motion, counsel represented that he had not been retained until
March 9, so he had had no chance to investigate or research the case
before indictment. On March 14 he had first met with an Assistant United
States Attorney to begin pre-trial discovery. At that meeting counsel
was presented "eight volumes of trial exhibits covering hundreds if
not thousands of pages." On March 16, the government attorney had
called defense counsel to invite him to meet with the I. R. S. agent in
charge of the investigation. A meeting had been arranged for March 20.
On March 17, counsel had met with the Badwans and decided that a defense
investigation would be necessary. The investigation would include the
hiring of an accounting firm to review the available materials.
The
motion concluded:
In
light of the complexity of the case (e.g., the number of Government
exhibits and the fact that the indictment covers nine different tax
returns over a period of three years) counsel is compelled to request
the additional time within which to file motions and a continuance of
the trial date from April 3 to a date in late April or early May.
The
district court denied the motion.
On
the morning of the trial, counsel asked at the outset of the proceedings
for permission to approach the bench. This exchange occurred:
COUNSEL:
For the sake of the record, we, of course, are not ready for trial. And
I have this morning handed your clerk a motion, a written motion, for a
continuance or, in the alternative, to dismiss the indictment on the
grounds of the defense being forced into a summary trial in this matter.
I
also filed today a motion for suppression of evidence.
THE
COURT: Why wasn't that filed before?
COUNSEL:
For the simple reason, Your Honor, we just over the weekend decided that
that had enough merit so that it should be filed. I have articulated in
my written motion for a continuance, at least briefly, some of the
problems we have been having.
THE
COURT: At arraignment there was a time given within which to file
motions and a time set for those motions. No motion was filed within
that time. And I am unwilling to hear any motion to suppress evidence on
the morning of trial with a jury sitting here waiting, and I am
unwilling to continue the matter.
For
those reasons, the motion will be denied.
B.
The defendants relied almost exclusively in their motions for
continuance on the asserted complexity of the evidence in the case. The
complexity of a case is undoubtedly one of the circumstances to be
considered in deciding whether to grant or deny a motion for
continuance. We are not prepared to say, however, that the district
judge acted arbitrarily in concluding on the facts presented to him that
three weeks was an adequate time in which to prepare a defense in this
case.
Of
the nine tax returns on which the prosecutions were based, six were the
individual returns of the Badwans. Those returns merely reflected an
equal division of the partnership profits of VITC. As to the partnership
returns, the district court may simply have concluded that the amounts
involved suggested some limits to the complexity of the case. The
indictments charged that the correct amount of partnership profits was
$29,109.13 for 1973, $20,994.48 for 1974 and $24,586.71 for 1975. The
Badwans reported partnership profits for those years of $4,096, $6,300
and $13,568.
There
are other factors here that support the district court's denial of the
motions as at least not arbitrary. First, there is defense counsel's
silence at arraignment when the trial date was set. Counsel may not have
known then of the particular problems he would face in this case, but he
must be assumed to have known of the potential complexity of any tax
fraud prosecution. He must also be assumed to have known of the likely
difficulty of hiring an accountant during the month of March to review
the government's computations and analysis. A district judge, aware of
the same facts of life, and entitled, as he must be, to assume counsel's
zeal in protecting his client's interest, must ordinarily then be
entitled to draw the obvious inference from counsel's silence in the
face of clear opportunity to signal concern. From these practical
considerations has emerged the general principle that an attorney having
a substantial claim for a continuance should move for the continuance as
early as possible.
United States
v. Uptain, 531 F. 2d 1281, 1290-91 (5th Cir. 1976). The later
the motion is made the more disruptive will be any continuance granted,
and the more likely may it reasonably appear to the judge that the
motion is made for dilatory purposes. All this must be taken into
account in assessing claims of arbitrariness in denying a continuance,
and here it militates against defendant's claim.
Second,
the defendants have never shown in any concrete way how they were
prejudiced by the denial of the continuance. They have argued to us that
further investigation "could have led to many innocent explanations
for the alleged understatements." We must be reluctant to find
arbitrariness in the exercise of trial court discretion based upon no
more than posthoc assertions by counsel that given more time something
might have turned up. See, e.g.,
United States
v. Uptain, 531 F. 2d 1281 (5th Cir. 1976); United States v.
Schwanke, 598 F. 2d 575, 579-80 (10th Cir. 1979). This case is not,
for example, like Shirley v. North Carolina, 528 F. 2d 819 (4th
Cir. 1975), where it was demonstrated that the testimony of an
unavoidably absent witness would, if believed, have led to the
defendant's acquittal.
We
do not believe that the denial of a continuance here so clearly violated
fundamental fairness or deprived the Badwans of the effective assistance
of counsel as to compel a conclusion that it constituted an abuse of
discretion.
II.
The defendants also contend that the district court abused its
discretion in denying, without a hearing, their motion to suppress
evidence made on the morning of trial. The motion was based on asserted
violations of Miranda v. Arizona, 384
U. S.
436 (1966) in interviews held by an I. R. S. agent with the Badwans. The
defendants assert that a hearing on voluntariness was required by Johnson
v. Denno, 378
U. S.
368 (1964).
Under
Rule 12(b)(3) and (f) of the Federal Rules and Criminal Procedure, the
failure to raise these claims before trial constituted a waiver. The
defendants argue that the district court should have granted them relief
from the waiver, as Rule 12(f) allows; that the early trial date made it
impossible to have adequately researched and prepared the suppression
motion before the trial. None of the considerations that made the issue
of the denial of continuance at least an arguable one are present here.
The complexity of the other evidence in the case should not have
affected defense counsel's ability to challenge the voluntariness of
statements by his clients.
We
believe that the nine days from arraignment to the time for submission
of pre-trial motions was sufficient for preparation of the motion for
suppression.
III.
The defendants' last contention is that the statute only applies to one
who "willfully makes and subscribes" a false tax return. 26 U.
S. C. §7206(1). They argue that the evidence clearly showed that they
did not "make" the return, but rather that the returns were
prepared by an accountant hired by them. The evidence did clearly show,
however, that the accountant who prepared the returns did so solely on
the basis of information provided to him by the Badwans, and that the
Badwans then signed and filed the returns. This satisfies the statute.
Having
found no error on any of the points raised, we affirm the convictions.
AFFIRMED.
Dissenting Opinion
WINTER,
Circuit Judge, dissenting:
I
respectfully dissent. As I analyze and understand the record in this
case, I am ineluctably led to conclude that the district court abused
its discretion in denying the requested continuance.
I.
The record shows that, after four years of investigation and preparation
on the part of the government, the case against the Badwans culminated
in the return of a nine-count indictment on
March 5, 1979
. The indictment covered the tax years 1972, 1973 and 1974. Four days
later (Friday, March 6), the Badwans, residents of
North Carolina
and non-residents of the district in which they were indicted and
subsequently tried, retained counsel. Prior to then they were
unrepresented. One day after retaining counsel, they journeyed to
Virginia
to meet with him. The conversation when they met was concerned
principally with how to post bail when they were arraigned the following
Monday,
March 12, 1979
. At their arraignment the district court fixed a schedule whereby
pretrial motions were to be filed by March 21, were to be heard on March
23 and the trial was to begin on April 3. Counsel lodged no objection to
this schedule.
Counsel
was in no way dilatory following the arraignment. Two days thereafter
(March 14), he met with the prosecutor. Then he learned that the
government had eight volumes of trial exhibits that it intended to use
at trial. He was allowed to copy only the documents which had been
furnished by his clients. His request for other documents was not
immediately honored. Two days after that meeting (March 16), the
prosecutor invited counsel to meet with the special agent investigating
the case; and that meeting was scheduled for March 20.
In
the interim, counsel met with the defendants on Saturday, March 17.
After further discussions with them, it became apparent that an
intensive investigation of their case would be required including the
employment of an accountant. On Monday, March 19, seven days after the
arraignment and ten days after being retained, counsel communicated with
an accounting firm and arranged to meet with them on March 23.
At
this stage of his preparation, the course of events impressed upon
counsel the need for a continuance. Accordingly, on March 20, he filed a
written notice for a continuance. It recited that it was impossible for
counsel to gather all necessary materials, much less review them, prior
to the date for the filing of motions (March 21), and, furthermore, only
after they were obtained, could an accountant begin working with counsel
to prepare the case for trial. Counsel asked for additional time in
which to file motions and a continuance of the trial date from April 3
to a date in late April or early May. The district court denied the
motion by order and without comment on the same day it was filed. Also
on that day, the prosecutor advised counsel that he could copy certain,
but not all, government exhibits that he had requested.
Counsel
met with the accountant on March 23, and the next day the accountant,
who was a former IRS agent, spent two and one half hours reviewing the
documents at the prosecutor's office. As a result of the review, the
accountant, although unable to reach a conclusion as to the accuracy of
the government's computations, had no difficulty in concluding that he
could not perform his function in the time remaining for trial. By his
letter dated March 29, the accountant stated that it was his firm's
professional opinion that "it would take several weeks to perform a
thorough review of the Government's calculations," emphasizing that
there were in excess of one hundred exhibits and thousands of entries
which related to nine United States tax returns, filed during a three
year period.
The
accountant's letter, in conjunction with the slow and laborious review
of the available government records, convinced defense counsel that a
continuance was both necessary and imperative to insure a proper
defense. Thus, on the day of trial (April 3), counsel filed another
motion for a continuance. It recited the reasons previously assigned and
added that while the government purported to rely on the bank deposits
method of proving the indictments, there were indications that the net
worth system was being used and neither counsel nor the accountant had
had an opportunity to analyze the case in this light. To support the
assertion that the case was complex and that additional time was needed
for an accounting analysis, the accountant's letter of March 29 was
attached to the motion. The district court summarily denied the motion,
and it is inferable from the record that the motion was never read. *
Thereafter,
the trial immediately began. Defense objections were few. Although there
was some cross-examination of the government's witnesses, no witnesses
were called for the defense. In the cross-examination of the witnesses,
there were no questions relating to the substance of the government's
bank deposits/cash expenditures analysis. Throughout the trial counsel
repeatedly informed the court that he lacked copies of the exhibits from
which a government witness was testifying. Apparently, counsel's
complaints were well founded; the district court scolded the government
for its disorganized presentation and stated that "this is one of
the sloppiest cases I have ever seen."
II.
In deciding this case, we must apply the familiar rule that a motion for
continuance is within the sound discretion of the district court and its
exercise of its discretion will not be disturbed unless there is a clear
abuse of discretion. Where, as here, the claim is that the denial of the
continuance resulted in inadequate preparation time, the factors to be
considered as to whether there was an abuse of discretion have been
identified in the opinion in United States v. Uptain, 531 F. 2d
1281, 1286-87 (5 Cir. 1976), a case which the majority also treats as a
definitive one:
We
have deemed the following factors highly relevant in assessing claims of
inadequate preparation time: the quantum of time available for
preparation, the likelihood of prejudice from denial, the accused's role
in shortening the effective preparation time, the degree of complexity
of the case, and the availability of discovery from the prosecution. We
have also explicitly considered the adequacy of the defense actually
provided at trial, the skill and experience of the attorney, any
pre-appointment or preretention experience of the attorney with the
accused or the alleged crime, and any representation of the defendant by
other attorneys that accrues to his benefit. (footnotes omitted).
In
my view these factors in this case aggregate an abuse of discretion. The
attorney, who had neither previously represented these defendants nor
had ready access to them, was employed with reasonable promptness. He
was given three weeks to prepare for the trial of an income tax case
which involved primarily the partnership returns of an enterprise for
three years. The government intended to prove a willful understatement
of tax by the bank deposit or the net worth method. Although counsel
promptly sought informal discovery from the government, this was
effectively withheld until two weeks before trial. When discovery was
given, it was incomeplete and it appeared that the government intended
to prove eight volumes of exhibits, comprising in excess of one hundred
exhibits which reflected thousands of entries. Even before informal
discovery was gained, counsel recognized the need for an accounting
expert, and he exercised due diligence in recruiting such a witness.
When the witness, whose qualifications and good faith are not
challenged, inspected the government's proof, it was his professional
opinion, unchallenged on this record, that it would take several weeks
to complete a review of the government's calculations. In seeking a
continuance counsel did not ask for a long delay. His request was for a
delay of approximately one month.
The
majority is of the view that the case was not complex. I would conclude
otherwise. The extent of the government's documentary and statistical
proof proves that the case was complex. While the issue of partnership
profits for each of three years may seem elementary, how the figure was
reached is not. There were issues of how the government reached its
conclusions; what methods were used; what evidence it accepted, rejected
or neglected. I think it simply inaccurate to characterize a four year
investigation, producing eight volumes of exhibits, as simple. I also
emphatically reject the amounts in controversy as an accurate measure of
the complexity of the issues. Certainly they are no reflection of the
value of the constitutional guarantees which were swept away if the
continuance was improperly denied.
It
is, of course true that counsel voiced no objection to the schedule
prescribed by the district court for motion and trial, but I find his
silence completely understandable. By the date of promulgation of the
schedule, he manifestly had less than complete knowledge of what the
case was all about. He had no basis on which to represent that he could
not meet the schedule, and it would have been irresponsible for him to
represent that he needed more time. From his silence, I would infer a
good faith intention on his part to meet the schedule if humanly
possible, and a not unreasonable confidence (unfortunately misplaced)
that the district court would not require him to adhere to the schedule
if he could subsequently demonstrate that it was too restrictive. His
first request for a continuance was only eight days after the
arraignment and eleven days after he was first retained.
Similarly,
I would take no comfort from the inability of the defendants to show
with specificity how they were prejudiced by denial of the continuance.
Insufficient time to prepare constitutes prejudice. Here the essence of
defendant's claim is that despite promptness and dispatch on their part
and that of their attorney, they were denied the opportunity to prepare
their defense. Their pitiful showing at trial is eloquent testimony to
that fact. If they knew what was their defense, they would have had no
need for the expert and they would not thus have been unconstitutionally
precipitated into trial. To me it is illogical to reason that they were
not harmed by the denial of the delay because they cannot show what
benefit to themselves the delay would have generated had it been
granted. This is not the case where the delay was sought to explore the
strength of the government's case against them and to determine if they
had a meritorious defense. Certainly the Constitution guaranteed them
that right.
In
the view that I take of the case, it is unnecessary for me to discuss
the other issues.
*
The transcript indicates that the remarks of the district judge were
directed solely to an accompanying motion to suppress. There was a
respectful request from counsel that the court read "at some
appropriate time" the motion for continuance and the accountant's
letter. The district judge never asserted familiarity with either.