Offenses by Officers & Employees of U.S. Page2

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[81-1 USTC ¶9458]Fred Davis, Plaintiff, Appellant v. United States of America , et al., Defendants, Appellees

(CA-1), U. S. Court of Appeals, 1st Circuit, No. 81-1024, 4/28/81 , Affirming decisions of the District Court, 80-2 USTC ¶9794 and 81-1 USTC ¶9349

[U. S. Constitution and Code Secs. 6103, 7214 and 7422]

Civil actions for refund: Sufficiency of complaint: Disclosure of return information: Offenses by IRS officials: Constitutionality.--The Court of Appeals adopted the opinions of the District Court and affirmed the judgment of dismissal. The complaint filed in the taxpayer's suit for refund did not set forth sufficient facts and thus failed to state a claim upon which relief could be granted. The disclosure in 1975 to state tax authorities of audit adjustments of the taxpayer's federal tax liability was routinely provided and in accordance with normal practice specifically provided for in the Code. Failure of the IRS to provide information requested by the taxpayer over the telephone did not demonstrate "willful oppression" on the part of revenue agents. Finally, various claims with respect to alleged violations of constitutional rights were dismissed.

Fred Davis, 353 Bryant Street, Malden, Massachusetts, pro se. John F. Murray, Assistant Attorney General, Michael L. Paup, Daniel F. Ross, R. Russell Mather, Department of Justice, Washington, D. C. 20530, Philip I. Brennan, Main Justice, Washington, D. C. 20530, for defendants-appellees.

Before CAMPBELL, BOWNES and BREYER, Circuit Judges.

Memorandum and Order Entered April 28, 1981

This appeal raises various issues arising from Appellant's suit for refund of taxes and for compensation for various wrongs purported to have been committed by the individual defendants. To the extent that these issues have been addressed in the District Court's thorough opinions of September 26, 1980 and December 15, 1980 , we are in agreement with the District Court and affirm the judgment of dismissal. Other issues raised by appellant either were not resolved by the District Court and are thus not properly before us or are without merit.

The judgment of the District Court is affirmed. 1st Cir. R. 12.

 

 

[63-1 USTC ¶9295]Paul A. Gorin, Defendant, Appellant v. United States of America, Appellee Henry Grillo, Defendant, Appellant v. Same Saul Glassman, Defendant, Appellant v. Same

(CA-1), U. S. Court of Appeals, 1st Circuit, Nos. 5997, 5998, 5999, 313 F2d 641, 2/20/63, Vacating judgment of District Court (opinion unreported) and remanding

[1954 Code Secs. 7213 and 7214(a)(4)]

Interference with administration of revenue laws: Bribery of IRS officer: Entrap ment: Burden of proof.--A conviction of two attorneys and an IRS officer of attempting to bribe the head of the Enforcement Branch of the Regional Counsel's office if he would recommend against prosecution of a fourth individual for tax evasion was reversed on the ground that the trial judge's instruction on the defense of entrapment did not go far enough. It merely informed the jury that the defendants had the burden of proving entrapment, without explaining that the burden of proof was met by a preponderance of the evidence. Since the only burden of proof mentioned in the instruction was that the Government had to prove its case beyond a reasonable doubt, the jury could infer that this standard also applied to the defendants. Other alleged errors as to selection of the jurors, pretrial publicity, examination of prospective jurors, and denial of motions for severance were found to be without merit.

Francis J. DiMento, 75 State St., Boston 9, Mass. (DiMento & Sullivan, 75 State St., Boston 9, Mass., with him on brief), for Gorin; Manuel Katz, 209 Washington St., Boston, Mass. (Paul T. Smith, 209 Washington St., Boston, Mass., with him on brief), for Grillo; James D. St. Clair, 60 State St., Boston 9, Mass. (Blair L. Perry, Hale & Dorr, 60 State St., Boston 9, Mass., with him on brief), for Glassman, appellants. John J. Curtin, Jr., Assistant United States Attorney, Boston, Mass. (W. Arthur Garrity, Jr., United States Attorney, William F. Looney, Jr., Paul A. M. Hunt, Assistant United States Attorneys, Boston, Mass., with him on brief), for appellee.

Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.

Opinion of the Court

WOODBURY, Chief Judge:

These three appellants and one Nathaniel Bergman of Hartford , Connecticut , were indicted by a grand jury in the court below on three counts. Count 1 charges the three appellants and Bergman with conspiring (1) to bribe one Charles J. McCaffrey, an employee of the Internal Revenue Service of the United States Department of the Treasury, and (2) to defraud the United States in its governmental functions by depriving it of McCaffrey's conscientions, honest and faithful service in violation of Title 18 U. S. C. §371. Count 2 charges Bergman and the appellants Glassman and Gorin with giving McCaffrey $10,000 with intent to influence his decision and action on a matter at the time pending before him in his official capacity, in short with bribery, in violation of Title 18 U. S. C. §201. Count 3 describes Grillo as a United States officer acting in connection with the revenue laws of the United States and charges him alone with conspiring with the other three, who were named as co-conspirators but not as co-defendants, to defraud the United States in its governmental functions in violation of Title 26 U. S. C. §7214(a)(4).

Following the denial of a number of preliminary motions to be discussed presently, the four defendants were tried by jury on pleas of not guilty, were found guilty as charged and were sentenced. All appealed, but Bergman withdrew his appeal before hearing.

Before the trial began each defendant moved to dismiss the indictment and to strike the entire panel of petit jurors on the ground that both the grand and petit jurors had been improperly selected. The motions were denied after a hearing at which evidence was taken.

[Method of Selecting Jurors]

The evidence adduced shows that the jury commissioners of the United States District Court for the District of Massachusetts selected persons for service as jurors from the jury lists of the various cities and towns in Massachusetts, that the City of Boston was within the part of the district designated by the district court under Title 28 U. S. C. §1865(a) as the source from which the jurors with whom we are here concerned were drawn, and that the Boston Election Commission, the body charged by local law with the annual preparation of jury lists for the City of Boston, picked jurors at random from the lists of registered voters in the various wards of the city and then, by reference to the list of inhabitants prepared annually by the city police department, weeded out those exempt by law because of their occupations, such as clergymen, lawyers or doctors, and following this by personal interviews weeded out those physically or mentally unfit for jury service and those with an inadequate command of the English language. The contention is that the jury commissioners' method of selection, resting as it does in part upon the method of selection used in Boston by the Boston Election Commission (it does not appear whether the same method of selection was used by local authorities in the other cities and towns of the part of the district involved), violates §1861 of Title 28 U. S. C. quoted in material part in the margin ¹ because it automatically excludes citizens who are not registered to vote. The argument is that eligible voters who have not registered constitute a definite group or class in the community, that is to say, an apolitical or politically dormant group, and that exclusion of that class or group from jury service results in juries which do not represent "a cross-section of the community" as required, so it is said, by Thiel v. Southern Pacific Co., 328 U. S. 217, 220 (1946).

The argument rests upon too literal a reading of the phrase quoted above, for it has never been the law that a jury must represent a true cross-section of the community. See Report of the Committee on the Operation of the Jury System to the Judicial Conference of the United States , September 1962 at page 6. Certain groups, as by §§ 1862 and 1863 of Title 28 U. S. C., are and time out of mind have been exempted from jury duty, some for the general public interest, such as public officials or members of the armed forces, and others, such as convicted felons, minors and persons unable to understand the English language, for the effective operation of the jury system. And the Court in the Thiel case clearly recognized the established practice of exempting certain persons from jury service by explaining that what it meant by the sentence wherein it used the phrase "a cross-section of the community" was only that prospective jurors must be selected by court officials without systematic and intentional exclusion of any economic, social, religious, racial, political or geographical group in the community.

For a variety of reasons we reject the argument that eligible persons who do not register to vote constitute a "political" group in the community. In the first place the group does not include only the politically inert. It includes also the politically alert who may perhaps have lived for a year or more in the district but not long enough in their ward to be eligible to register to vote. In the second place, the group has no distinct or definable outlines, for in addition to persons who have just moved into a ward, it includes not only the completely apathetic but also those who might register to vote only when interested in a particular election. It includes persons of varying shades of political interest. And in the third place we think the Court in referring to a political group in the Thiel case meant the members of some defined political party or group.

This does not mean blanket endorsement of jury selection directly or indirectly from voting lists. It means that voting lists may be used as the basis for jury selection unless it appears that in the community there is systematic and intentional exclusion from those lists of a particular economic, social, religious, racial, geographical or political group. When such a showing is made some other basis of selection must be used. Here, however, the appellants have not shown that in Boston any enumerated class is systematically and intentionally discriminated against in registering to vote. Indeed the evidence is quite to the contrary. The appellants' contention fails for lack of any evidence of discrimination in the preparation of the lists of Boston voters. Compare United States v. Hoffa, 196 F. Supp. 25 (S. D. Fla., 1961), with United States v. Greenberg, 200 F. Supp. 382 (S. D. N. Y., 1961).

[Publicity]

Also before trial the appellants severally moved to dismiss the indictment because it had been returned by grand jurors calculatedly prejudiced against them by government-inspired publicity. We think the court below very properly denied the motions.

The appellants characterize the publicity of which they complain as "massive," and describe it as "blanketing" the Commonwealth of Massachusetts . It boils down, however, to news releases printed in local newspapers and repeated in substance over radio and television on August 26, 19 61, the day two of the appellants and Bergman were arrested, and for the next two days, purporting to quote the Attorney General as extolling the vigor, skill and integrity of the Internal Revenue Service and as saying that the Charles J. McCaffrey mentioned in the indictment had reported Glassman's offer to bribe him to his superiors and upon their instructions had pretended to go along with the plan and "is a courageous American and typifies the loyalty and integrity of the men of the Internal Revenue Service."

The appellants admit that their contention "presupposes" that there is either a right under the Fifth Amendment of the Constitution of the United States to be indicted by grand jurors free of calculated government-instigated prejudice or else that proper standards for enforcement of the criminal law in the federal courts sanction only indictment by a grand jury uninfluenced by improper forces generated by the prosecutor. They must also "presuppose" that they do not need to show that in fact the grand jury which indicted them did not perform its sworn duty to act with impartiality but instead was actuated by government-inspired bias and prejudice. We are not prepared to grant these "presuppositions." So far as we are aware, none has the sanction of any decision of the Supreme Court of the United States and all have been rejected in one or another carefully considered opinion of a lower federal court. See United States v. Nunan [56-2 USTC ¶9876], 236 F. 2d 576, 592 et seq. (C. A. 2, 1956), cert. den., 353 U. S. 912 (1957); Beck v. United States [62-1 USTC ¶9227], 298 F. 2d 622 (C. A. 9, 1962), cert. den., 370 U. S. 919 (1962); United States v. Dioguardi [58-2 USTC ¶9541], 20 F. R. D. 33 (S. D. N. Y., 1956); United States v. Hoffa, 205 F. Supp. 710 (S. D. Fla., 1962). But even if we should accept the "presuppositions," which we by no means imply, we would still reject the appellants' contention.

We do not approve of pretrial publicity, particularly when it emanates from prosecuting officials. In the interest of fair trial it is better avoided. But the publicity here complained of was minor. It was not continuous but was pretty much a single-shot affair. And although it related to serious crimes involving corruption of public officials, it did not relate to a spectacular crime likely to arouse strong public emotion, excitement or passion such as murder or rape. Nor did the publicity vilify or heap opprobrium on the appellants. It only endorsed the character, and thereby inferentially the credibility, of the government's principal witness. We do not think the publicity complained of was serious enough to warrant the drastic remedy of dismissing the indictment, if, indeed, that remedy is available at all.

[Motions for Severance]

Pretrial motions for severance were also made and denied and similar motions were repeated intermittently throughout the trial but in every instance denied.

Clearly joinder of the defendants in the indictment was proper under Criminal Rule 8(b). To obtain severance it was, therefore, incumbent on the appellants to make such a strong showing of prejudice as to invoke the discretionary remedy provided in Criminal Rule 14 entitled "Relief from Prejudicial Joinder." This the appellants have undertaken to do for a variety of reasons.

Glassman and Grillo argue for severance for the reason that the testimony of codefendants is essential to their defense and, they say, it is not available to them unless each defendant is tried separately so that they can put co-defendants on the stand. The argument is unrealistic. There is no reason to think that a co-defendant would be any more willing to waive his constitutional privilege against self-incrimination when called as a witness at a separate trial than he would be willing not to insist upon his privilege as a defendant not to take the stand. Moreover, in Olmstead v. United States, 19 F. 2d 842, 847-48 (C. A. 9, 1927), affirmed as to other matters, 277 U. S. 438 (1928), it was held that the inability of a defendant in a conspiracy case to use the testimony of co-defendant in his defense is not enough to show abuse of discretion in refusing a motion for severance.

Another argument for severance was particularly emphasized by counsel for Grillo in the court below. It deserves mention since it applied to some extent to all appellants and was advanced for all in this court. Grillo's argument below was that at the trial he would be confronted with so much testimony of so many acts and statements of other defendants not in his presence and without his authorization or knowledge that in spite of limiting instructions ² the jury could not possibly overcome the prejudicial effect of the testimony or consider his case on its own individual merits.

Grillo's fear is not unfounded. See the late Mr. Justice Jackson's concurring opinion in Krulewitch v. United States, 336 U. S. 440, 445, particularly at 453 (1949). But no case has been cited to us and we are not aware of any holding that it was an abuse of discretion not to grant severance for the reason advanced. While the potentiality of prejudice certainly exists, it is far greater when the number of conspirators involved is large. The prejudice asserted in this case seems pale indeed when compared with the prejudice involved when fifty-nine conspirators were tried without severance in Capriola v. United States, 61 F. 2d 5, 11 (C. A. 7, 1932), cert. den. 287 U. S. 671 (1933), or seventy-five in Allen v. United States, 4 F. 2d 688, 698-99 (C. A. 7, 1925). It is well established that the granting of a motion for severance lies in the discretion of the trial judge. Stilson v. United States , 250 U. S. 583, 585-86 (1919). In the absence of a far stronger showing than is made in this case we would not be warranted in finding that discretion had been abused.

Our function as an appellate court is to examine the record with care to make sure that the trial court minimized possible prejudice. This we have done, and from a reading of the record it seems obvious to us that the trial judge went to no little pains to give appropriate limiting instructions at the outset of the trial, throughout its course, and finally and at length in his charge, which, counsel for Grillo admits in his brief, was "literally correct on this point." We do not believe that it was incumbent on the court below to interrupt the trial with limiting instructions every time the name of an absent co-conspirator was incriminatingly mentioned. In this four-defendant conspiracy case we can repeat what Circuit Judge Hincks said in the eighteen-defendant case of United States v. Stromberg, 268 F. 2d 256, 265 (C. A. 2, 1959), cert. den. 361 U. S. 863 (1959), that is to say: ". . . we think it by no means a task of insuperable difficulty for the jury to comply with the judge's instructions and determine as to each defendant the issue of membership in a single continuing conspiracy on the basis of the independent evidence--i. e., the evidence as to his own acts and admissions."

We come now to the trial itself.

[Examination of Prospective Jurors]

At its outset in accordance with the practice sanctioned by Criminal Rule 24(a) the voir dire examination for prospective jurors was conducted not by counsel but by the court. The appellants do not challenge the practice. And they concede that a trial judge undoubtedly has a "broad discretion as to the questions to be asked" of prospective jurors, subject only "to the essential demands of fairness." Aldridge v. United States , 283 U. S. 308, 310 (1931). ³ Their contention is that the "essential demands of fairness" required the trial judge to ask prospective jurors a variety of specific questions to determine possible bias or prejudice, such as whether they had any prejudice against lawyers or against persons "with income tax problems," whether they would think someone guilty because he had been charged with crime and arrested, whether they would give more credence to a government agent than to a lay witness and whether they would have any prejudice against a client because his counsel objected to the admission of evidence. We see no abuse of discretion in failing to put these questions to prospective jurors. As to these matters the court's general questions coupled with its charge afforded the appellants ample protection.

Particularly, however, the appellants object to the refusal of the court to ask prospective jurors specifically whether they had read or heard of the statement attributed to the Attorney General with respect to the integrity and courage of Charles J. McCaffrey discussed hereinabove, and, if they had, whether the statement would affect their judgment in passing upon McCaffrey's credibility as a witness. The questions were not impertinent. But the court below may well have felt that putting the specific question would call the publicity to mind and perhaps do appellants more harm than good. Under the circumstances of this case, particularly the "one-shot" nature of the publicity, we think the court gave the appellants adequate protection when it allowed jurors to sit upon rceiving a "No" answer to the question: "Are any of the jurors familiar with the facts of this case, either personally or through the press, radio, or television or any other means?"

[Statement of Facts]

We come now to consideration of the facts adduced at the trial.

Nathaniel Bergman was an attorney-at-law practicing in Hartford , Connecticut . In 1959 a special agent attached to the Hartford District Office of the Internal Revenue Service, IRS hereinafter, began an investigation of Bergman's income tax returns for preceding years. Bergman retained local counsel and in February, 1961 he also retained the appellant Paul Gorin, who was a lawyer practicing in Boston in the field of federal taxation. On May 1, 19 61, the Intelligence Division of the Boston Regional Office received the special agent's report of his examination of Bergmen's tax returns recommending criminal prosecution of Bergman and his wife for tax evasion. Regional Intelligence agreed with this recommendation and forwarded the case to the Enforcement Branch of the Boston Regional Counsel's office, wherein lay the duty on review to recommend for or against criminal prosecution in federal tax cases arising in the area.

The head of the Enforcement Branch at this time was the Charles J. McCaffrey to whom we have referred. He had come to Boston from similar duty in San Franciso in July 1959 and by April 1960 had met the appellant Glassman, who was a lawyer in general practice in Boston specializing "more or less" in the law of real property. Both were retired officers of the United States Marine Corps and they first met at an organizational meeting of a Marine Corps Reserve voluntary training unit (hereinafter VTU) consisting of reserve officers who were lawyers. Glassman was the commanding officer of the unit; McCaffrey was the training officer and next in command. Their relationship became cordial.

At this point the testimony diverges rather sharply. Glassman, who took the stand in his own defense, testified that on several occasions prior to the end of May 1961 when he and McCaffrey met socially, or at VTU meetings, or to plan the training program for the unit, they discussed the general nature of each other's work and McCaffrey urged him to take some courses and develop a tax practice, saying that the field was lucrative. Glassman said that he replied: "My practice just hasn't tended toward that," to which McCaffrey answered: "Well, just remember that if you ever do hit a case you've got a good friend up there." Glassman also testified that when he and McCaffrey met at a social function in March 1961 McCaffrey expressed envy when he learned that Glassman was about to go to Europe, said that he wished he and his wife could do the same and commented: "You can't save any money when you're working for the government and have a big family." And Glassman testified that on May 26, 19 61, when he met with McCaffrey to discuss the quarterly training schedule for the VTU McCaffrey again recommended a tax practice as profitable and said: "You know Paul Gorin, don't you?" Glassman said that he answered that he knew Gorin casually, to which he said McCaffrey replied: "He is certainly doing all right for himself. Saul, you should be doing some of that tax work. I am really in a position to help you out. Why don't you see Gorin and tell him you have got a good friend up at Enforcement. I think you can do yourself a lot of good."

McCaffrey agreed that prior to the end of May 1961 he and Glassman had discussed each other's professional work, in the course of which he had learned that Glassman was primarily a real estate lawyer. Furthermore, McCaffrey admitted that he knew that Glassman did not have a Treasury card that entitled him to represent clients before official bodies in the Treasury Department on tax matters, and he also admitted that he had recommended a tax practice to Glassman as profitable and had suggested that Glassman take some tax courses and enter that field. McCaffrey, however, categorically denied making the other remarks attributed to him by Glassman.

We turn now to the critical period of the alleged conspiracy, which began during the last days of May 1961. Glassman testified that he had known Paul Gorin for over ten years and that they were on a first name basis. He said that he happened to meet Gorin casually on May 27 and asked him if he had a tax fraud case that was going to prosecution. Glassman said that Gorin answered: "Yes. What do you know about it?" to which Glassman said he replied: "Nothing, but if you need any help I've got a good friend up in Enforcement I could talk to." Arrangements were then made to discuss the matter further the following week and by appointment they met again on May 31. At that time, according to Glassman, Gorin identified the case he had referred to as a net worth case involving Nathaniel Bergman of Hartford , Connecticut , and asked Glassman if he thought he could "do anything." Glassman said he replied that he did not know but that he had "a good friend up in Enforcement" and that he would speak to his "friend" and "see what he has to say." Gorin asked: "When?" and Glassman replied: "I don't know. As soon as I can. I will call you."

McCaffrey and Glassman agree that Glassman did indeed telephone to McCaffrey on May 31. However their versions of the telephone conversation differ. Glassman said that he told McCaffrey that he wanted to talk about the Bergman case and that McCaffrey replied that the case had been assigned to one of the men in his office but he would look into it and call Glassman. McCaffrey testified that in that telephone conversation Glassman said he wanted to talk about a case but did not identify it, and that the request made him "uneasy" because he knew that Glassman had no power of attorney in any case in his office and therefore had "no right to talk to me about any case." McCaffrey also said that because of his "uneasiness" he did not attend a VTU meeting that night and immediately reported the telephone conversation to a senior attorney in Regional Counsel's office whom he asked to make a memorandum of his disclosure "just in case something happened."

On the next day, June 1, Glassman telephoned McCaffrey again ⁴ and in that conversation, according to McCaffrey, for the first time identified the Bergman case as the one in which he was interested. Both agreed that later in the day Glassman went to McCaffrey's office. Their version of what there transpired differs. Glassman testified that McCaffrey greeted him with the remark, "Well, Saul, I see that you've talked to friend Gorin," and then proceeded to disclose facts and figures of the Bergman case to show that it would be prosecuted on a net worth basis and that it involved a very substantial sum in deficiencies. Glassman said that he asked McCaffrey: "Look, Mac, is this a case I should get involved in? Do you have to recommend prosecution or is this a case that can go either way?" to which he said McCaffrey replied that from what he knew of the Bergman case there had been other cases coming from Connecticut "that looked much worse and we recommended no prosecution." Glassman testified that he told McCaffrey that from the figures disclosed "this looks like a case where I can get a substantial fee if I can do Bergman some good," and that both agreed that they would look into the case further to "see how it shapes up." Glassman also testified that McCaffrey admitted that he ought not to be talking about the case because Glassman had no power of attorney and that when he asked if he should obtain one McCaffrey replied: "If anything develops you can work through Gorin. I know I can always talk to you as a friend."

McCaffrey agreed that he discussed the Bergman case face to face with Glassman on June 1. And he admitted that at the meeting he gave Glassman the amount of civil deficiencies involved in the case and that in doing so he violated the Regulations because Glassman had no power of attorney. Furthermore, he admitted that he would not have discussed the case with Glassman had he been a stranger. But he denied making the remarks attributed to him by Glassman and he said that Glassman in the course of the meeting dropped the remark that in view of the sums involved "there should be enough of a fee in it for all of us." McCaffrey said he replied noncommittally to this remark and that as they parted Glassman said: "I will contact you before I set my fee in this matter."

McCaffrey testified that these remarks so aroused his suspicions that he immediately reported them to his superior officer, the Regional Counsel, saying that he thought Glassman might be intending to offer him a bribe, and that the Regional Counsel because of the doubtful meaning of Glassman's remarks agreed to let McCaffrey handle the matter in his own way. Although McCaffrey's report to his superior should have been in writing, his conduct was otherwise in accord with the Internal Revenue Manual which requires an IRS employee when approached with an offer of a bribe to make such reply as will hold the matter in abeyance and immediately make a full report in writing to a superior.

Meetings and telephone conversations followed between Glassman and Gorin, Gorin and Bergman, Glassman, Gorin and Bergman and Glassman and McCaffrey which do not need to be described in detail. It will suffice to say that on the evidence it might well be found that in the course of them Glassman convinced Gorin and Bergman that he indeed had a friend "up in Enforcement" and that Bergman, Glassman and Gorin were not averse to offering that "friend" a bribe to "kill" the case against Bergman. And there is evidence of remarks made during the first half of June by Glassman to McCaffrey not too subtly hinting that a bribe might be forthcoming if McCaffrey would recommend against prosecuting Bergman for tax evasion, to which, according to Glassman, McCaffrey lent definite encouragement.

[Entrapment]

At any rate on June 15 McCaffrey reported to his superior that he thought Glassman had bribery in mind and also made the same report to the Inspection Service, the internal police force of the IRS charged among other matters with the duty of investigating bribery of IRS employees, which at once sent an inspector to Boston from New York to handle the case. The inspector told McCaffrey under no circumstances to initiate a contact but to "go along" with the persons involved, to meet them whenever they chose and to give them any document they wanted. And he also installed an array of electronic equipment in McCaffrey's office, in his car and at times on McCaffrey himself, whereby conversations in McCaffrey's presence could be recorded. After June 20, all McCaffrey's conversations with Glassman, Gorin and Bergman were electronically recorded with the exception of two telephone calls from McCaffrey to Glassman, one on July 7 and another on July 10, and a conversation on July 27 between Gorin and McCaffrey on a golf course. Other telephone conversations were recorded only on McCaffrey's side. These recordings were introduced into evidence and portions of them were played to the jury.

Further meetings between two or more of the four, McCaffrey, Glassman, Gorin and Bergman, followed, which there is no need to recount in detail. It will suffice to say that the upshot of the meetings was that on June 27 Glassman gave McCaffrey $5,000 in bills in return for a rough draft of a criminal action memorandum, known as a CAM, recommending against prosecution of Bergman for tax evasion, and that on June 28 Glassman gave McCaffrey a like amount in exchange for a finished draft of the document. There is ample evidence that Glassman obtained the money from Gorin who in turn had obtained it from Bergman, and that all well knew the purpose for which the money was to be used. Glassman admitted on the stand that the money was paid to McCaffrey as a bribe.

To state the facts in greater detail would expand this opinion inordinately. Although we might go into far greater detail, we think we have stated enough to show that there was evidence from which the jury could properly find that Glassman, Gorin and Bergman had engaged in the conspiracy charged in the first count of the indictment and had given McCaffrey a bribe as charged in the second count. We also think that we have recounted enough to show a factual basis for the defense, Glassman's sole defense, of entrapment. ⁵

[Evidence Against IRS Officer]

We turn now to the case against Grillo.

Grillo was the Executive Assistant to the Assistant Regional Commissioner, Intelligence, for the Boston Region. As such he was second in command of the IRS unit to which McCaffrey as head of the Enforcement Branch of the Regional Counsel's Office submitted his recommendations against prosecutions for tax evasion. Although Grillo's duties were primarily administrative he assumed the duties of his superior, the Assistant Regional Commissioner, when the latter was not in his office, one of whose duties was to pass upon recommendations against the criminal prosecution of tax evaders.

There is ample evidence of remarks made by Glassman and Gorin, but not in Grillo's presence, to tie him into the conspiracy. For instance, there is evidence that on the afternoon of June 27 when McCaffrey went to Glassman's office to deliver the rough draft of his recommendation against prosecuting Bergman criminally, Glassman asked where the recommendation would be sent and when McCaffrey replied that it would go to the Assistant Regional Commissioner, Intelligence, and mentioned Grillo as a man in that office Glassman said: "That is the man. He has been approached and he is ready for it." And there is evidence that on a later occasion Glassman asked McCaffrey to let him know before the recommendation against prosecution went out in final form "so they can tell Grillo that it's on it's way over and he can grab it." Furthermore, there is evidence that at a meeting in McCaffrey's office on the afternoon of August 14, 19 61, at which McCaffrey, Bergman and Gorin were present, McCaffrey, Referring to Grillo, asked Gorin: "Have you given him anything?" to which Gorin replied: "He has a balance with me of $20,000," and "He has built himself a new house, and I have got about $10,000 worth of furniture in there," and also: "On this case I have given him $1,500, and I promised him $2,500 more if the case is killed." On the same occasion Gorin is reported by McCaffrey to have said that Grillo, or Henry, "gave me information on this case long before it came in here, and before I talked to Bergman about it."

All of this evidence is, of course, quite inadmissible against Grillo unless and until there is independent evidence, that is, evidence of Grillo's own acts or admissions, connecting him with the conspiracy. We find enough such evidence in McCaffrey's account of a meeting in his office on August 15, 19 61, with Gorin and Grillo. At that meeting, after McCaffrey and Grillo had briefly discussed another case, Gorin is reported by McCaffrey to have said that he wanted the others either to know or to remember, that he could not recall which, "that we are here as friends, f-r-i-e-n-d-s," spelling out the last word for emphasis. Following this introduction McCaffrey testified that Grillo said that in his superior's absence he could not act on McCaffrey's memorandum against prosecuting Bergman without getting into "difficulty," perhaps "serious difficulty," that he had not expected such a strong protest to McCaffrey's memorandum from the IRS office in Hartford to which it had been referred and that he was finding it difficult in view of that protest to convince his superior and others in his office to approve McCaffrey's recommendation. And McCaffrey testified that with reference to the criminal prosecution of Bergman, Grillo said: "I would like to see it go by the board more than anyone else." Furthermore, McCaffrey testified, and the electronic recording of the meeting corroborates, that at the meeting Grillo participated actively in the discussion of arguments to advance in answer to the protest from Hartford to McCaffrey's memorandum and at the close of the meeting Gorin said: "Well, Henry, you've got the pitch now. The three of us are working together," to which Grillo replied: "I wish to hell I'd known it before."

Perhaps by straining the jury might have put an innocent interpretation on these remarks and acts of Grillo. But certainly the jury did not have to do so. The above evidence is clearly enough to warrant the jury's finding that Grillo was a participant in the conspiracy.

[Admissibility of Recordings]

The appellants objected below to the introduction in evidence of the tape and wire recordings to which reference has been made. Since the electronic devices used were installed in McCaffrey's office, in his car and on his person, the recordings were not obtained through physical intrusion as in Silverman v. United States, 365 U. S. 505 (1961). Therefore, the appellants do not argue that the recordings were obtained in violation of the Fourth Amendment. Apparently conceding the authority of Goldman v. United States, 316 U. S. 129, 135 (1942), their contention is that the recordings are in so many places inaufible as to be unintelligible and therefore untrustworthy as evidence.

The court below followed the procedure approved in Monroe v. United States, 234 F. 2d 49, 55 (C. A. D. C., 1956), cert. den. 352 U. S. 873 (1956), of having the recordings played in the presence of counsel but not in the presence of the jury in order to rule on possible objections. After hearing the recordings their admissibility lay in the trial court's sound discretion. Monroe v. United States, supra; Cape v. United States, 283 F. 2d 430, 435 (C. A. 9, 1960); Todisco v. United States [61-2 USTC ¶9749], 298 F. 2d 208, 211 (C. A. 9, 1961), cert. den. 368 U. S. 989 (1962). Although we have not listened to the recordings we have read the transcription of them in the record. While it appears that parts of them are inaudible, we cannot say that the parts which are not are without evidentiary value, or that the inaudible parts are so substantial at to make the rest more misleading than helpful. In short, we cannot say that the trial court abused its discretion in admitting the recordings in evidence.

[Burden of Proving Entrapment]

Now we turn to the charge, specifically to the charge on the issue of entrapment.

The court below told counsel at the close of their arguments that it was going "to follow Learned Hand" and charge the jury that the burden was on the defendants to prove inducement. In summing up its general instructions on the issue it did so by saying: "Let me repeat that now. The two questions: Did an agent of the government induce the accused to commit the offense in the indictment? If so, was the accused ready and willing, without persuasion, and awaiting a propitious opportunity to commit the offense? On the first question the accused has the burden of proof. On the second, the prosecution has the burden of proving it beyond a reasonable doubt." ⁶

The appellants concede that the court's formulation of the two questions and its summary of them was correct. But they contend that it was error to case the burden of proving the first question upon them. ⁷ They argue that the defense of entrapment is analogous to the defense of insanity. Wherefore they concede that the government need not offer evidence to disprove entrapment as part of its case in chief. But they say that once they have come forward with substantial evidence of entrapment the burden is on the government to disprove the defense beyond a reasonable doubt.

The Supreme Court has not adverted to the question.

In Sorrells v. United States, 287 U. S. 435 (1932), the Court for the first time recognized entrapment as a defense to a criminal charge, ⁸ saying at page 451:

"The predisposition and criminal design of the defendant are relevant. But the issues raised and the evidence, adduced must be pertinent to the controlling question whether the defendant is a person otherwise innocent whom the Government is seeking to punish for an alleged offense which is the product of the creative activity of its own officials. If that is the fact, common justice requires that the accused be permitted to prove it. The Government in such a case is in no position to object to evidence of the activities of its representatives in relation to the accused, and if the defendant seeks acquittal by reason of entrapment he cannot complain of an appropriate and searching inquiry into his own conduct and predisposition as bearing upon that issue."

And the Court held that when the evidence of the conduct of the government's representatives was conflicting it was error to refuse to submit the issue of entrapment to the jury.

These basic principles were affirmed in Sherman v. United States, 356 U. S. 369 (1958). In that case involving illegal sales of narcotics, the Court at page 371 said: "At the trial the factual issue was whether the informer had convinced an otherwise unwilling person to commit a criminal act or whether petitioner was already predisposed to commit the act and exhibited only the natural hesitancy of one acquainted with the narcotics trade." Then, on page 372, citing with approval and quoting from the Sorrells case, the Court notes that it did not constitute entrapment for government agents merely to afford opportunities or facilities for the commission of an offense but that entrapment occurred "only when the criminal conduct was 'the product of the creative activity' of law-enforcement officials. (Italics supplied.)" Wherefore, the Court said: "To determine whether entrapment has been established, a line must be drawn between the trap for the unwary innocent and the trap for the unwary criminal."

In drawing this line on the principles outlined in the Sorrells case, the Court in Sherman at page 373 said:

"On the one hand, at trial the accused may examine the conduct of the government agent; and on the other hand, the accused will be subjected to an 'appropriate and searching inquiry into his own conduct and predisposition' as bearing on his claim of innocence."

In short, if an accused asserts that he is a lamb who has been led astray he must be prepared to face evidence that he is a wolf on the prowl.

The above cases clearly sanction Judge Learned Hand's formulation of the two questions of fact presented by the defense of entrapment which the court below followed in its charge to the jury. For convenience they can be called the primary issue of inducement and the rebuttal issue of predisposition. And the cases also clearly indicate, as the appellants herein concede, that to raise the defense of entrapment the burden is upon them to come forward with evidence of inducement. We also assume from the language used as well as by application of general legal principles that the burden is on the government to come forward with evidence of predisposition. The cases, however, do not even indirectly mention the question of burden of persuasion on the issues. Nor do the cases give us guidance to decide the question by indicating the basis upon which the defense rests. ⁹

The lower federal courts have variously allocated the burden of persuasion, usually with little if any helpful analysis. Indeed, in many of the cases it isuncertain whether when speaking of the burden of proof the court is referring to the burden of coming forward with evidence or the burden of persuasion. We shall undertake our own analysis.

The defense of entrapment is certainly analogous to the defense of insanity in that the burden of coming forward with evidence in order to raise the defense rests upon the accused. But at this point we think the analogy ceases.

The defense of insanity asserts that the mental condition of the accused is such that he is incapable of harboring criminal intent. The defense, therefore, negatives an essential element of the crime. And it is fundamental doctrine that the government must prove every essential element of the crime alleged beyond a reasonable doubt. The defense of entrapment, on the other hand, does not negative an element of the crime, or assert that the accused has not engaged in a criminal activity. By the defense the accused may admit his crime, as Glassman did on cross-examination when he admitted that he gave McCaffrey $10,000 "as a bribe," or he may rely upon his right to require the government to prove the case against him beyond a reasonable doubt, and in either event ask to be relieved of its consequences because of the unsavory tactics of representatives of the government. ¹⁰ Stated another way, the defense of entrapment is not interjected to establish the absence of an essential element of the crime but to present facts collateral or incidental to the criminal act to justify acquittal on the ground of an overriding public policy to deter instigation of crime by enforcement officers in order to get a conviction. ¹¹ Since by the defense the accused is asking to be relieved of the consequences of his guilt, if found or admitted, by objecting to the tactics of the representatives of the government, we think that one who raises the defense should be required not only to come forward with evidence but should also be required to establish inducement by a preponderance of the evidence.

We think reason commends this conclusion. And it is in accord with §213 entitled Entrapment, Subsection (2), of the Proposed Official Draft of the American Law Institute's Model Penal Code, dated May 4, 19 62, which provides with an exception not here material that "a person prosecuted for an offense shall be acquitted if he proves by a preponderance of evidence that his conduct occurred in response to an entrapment." See also the discussion of this provision in Tentative Draft No. 9, of the Model Penal Code, supra, 1959, at the bottom of page 20 and the top of page 21.

We think the charge of the court below was correct as far as it went. It did not, however, in our opinion, go far enough, for it did not tell the jury anything about the quantum of the proof required. It merely informed the jury that the accused had the burden of proof" without explaining that the burden was met by proof by a preponderance of the evidence.

Although this omission was brought to the court's attention after the charge, it did not see fit to elaborate. We think this was prejudicial error. The only burden of proof mentioned anywhere in the charge was the burden on the government to prove the essential elements of its case beyond a reasonable doubt. But from this we cannot assume, as the government argues, that the jury would apply this standard only to the government's case and never to the defendants'. On the contrary we think that since proof beyond a reasonable doubt was the only standard mentioned, the jury would naturally infer in the absence of instruction otherwise that when "burden of proof" was mentioned that was the standard they were to apply, not only to the government but also to the defendants. There must be a new trial as to all three appellants. ¹²

Many other questions have been argued on these appeals. We pass them for various reasons, some for insubstantiality, and others because they are unlikely to arise at another trial or at least are unlikely to arise in the same form or in the same context.

Judgments will be entered vacating and setting aside the judgments of the District Court and remanding the cases to that Court for a new trial.

¹ "Any citizen of the United States who has attained the age of twenty-one years and who has resided for a period of one year within the judicial district, is competent to serve as a grand or petit juror. . . ."

² That is to say, instruction that such testimony is not admissible as against Grillo until the government has first established not only the existence of a conspiracy but also Grillo's membership in it.

³ In this case there is no question of racial prejudice, as in Aldridge, or as in Frasier v. United States, 267 F. 2d 62, 66 (C. A. 1, 1959).

⁴ This is McCaffrey's version. Glassman testified that McCaffrey called him, said that he had the Bergman files on his desk and that Glassman could come over "anytime."

⁵ We reject the government's contention that there was no adequate evidence from which the jury could find that Gorin and Glassman had been entrapped and we also reject the latter's contention that the evidence shows entrapment as a matter of law.

⁶ Judge Learned Hand, writing for his court in United States v. Sherman, 200 F. 2d 880, 882-83 (C. A. 2, 1952), said: "Therefore in such cases two questions of fact arise: (1) did the agent induce the accused to commit the offense charged in the indictment; (2) if so, was the accused ready and willing without persuasion and was he awaiting any propitious opportunity to commit the offence. On the first question the accused has the burden; on the second the prosecution has it."

⁷ They, of course, do not complain of the charge as to the burden of proof on the second question.

⁸ It also held that the defense did not have to be pleaded in bar but could be raised under the plea of not guilty.

⁹ See Mr. Justice Frankfurther's opinion concurring in the result in Sherman , in which Justices Douglas, Harlan and Brennan concurred, page 378.

¹⁰ It is inconsistent for an accused to take the stand and deny the commission of the crime charged and then assert his right to a charge on the defense of entrapment. See Sylvia v. United States, decided by this court January 22, 19 63. However, where there is evidence of governmental inducement, it is not fatally inconsistent for an accused to keep silent in the hope that the jury will not find that the government has proved its case beyond a reasonable doubt, but ask that the jury be charged on the defense of entrapment if it should find the commission of the allegedly criminal acts. The law allows this much inconsistency. See Henderson v. United States , 237 F. 2d 169, 172-73 (C. A. 5, 1956).

¹¹ See the separate opinion of Mr. Justice Roberts, Mr. Justice Brandeis and Mr. Justice Stone concurring, in Sorrells v. United States 287 U. S. 435, 456 et seq.

¹² We find no adequate support for the government's contention that Grillo waived entrapment as a defense and is estopped from asserting it now.

 

 

 

[57-2 USTC ¶10,029]Matthew J. Connelly and T. Lamar Caudle, Appellants v. United States of America , Appellee

(CA-8), U. S. Court of Appeals, 8th Circuit, No. 15,746, 249 F2d 576, 11/15/57, Affirming an unreported decision of the District Court for the Eastern District of Missouri

[1954 Code Sec. 7214--similar to 1939 Code Sec. 4047(e)]

Crimes: Corruption of public officials: Method of handling income tax evasion cases: Death of judge after trial: Mistrial as to one defendant: Evidence.--Defendants who were two public officials were convicted under an indictment which charged defendants with a conspiracy, the essence of which was to the effect that they aided in the evasion of income taxes and protected another (third defendant) from criminal prosecution for Internal Revenue law violations. During the course of the trial a fourth defendant suffered a heart attack and a mistrial was declared as to him, The two public officials thereupon also moved for a mistrial. This motion was denied and the court directed the jury that the testimony, admitted as to the fourth defendant alone, was withdrawn from the jury's consideration. The jury returned a verdict of guilty against the officials. At the end of the trial they interposed motions for judgment of acquital, for a new trial, and for a mistrial. Twelve days before the date set for hearing the motions, the judge who had heard the case died. The successor judge who heard the motions after reviewing the case denied the motions. On appeal the defendants contended that the successor judge was not qualified to pass upon the pending motions. The appellate court held, however, that the successor judge was appointed in strict compliance with Rule 25, Federal Rules of Criminal Procedure and, under these rules, he had authority to decide whether or not to grant a new trial. On the question of mistrial because of evidence introduced against one of the other defendants, it was held that the jury was properly instructed not to consider such evidence. On all the facts it was held that defendants had a fair trial and that there were no prejudicial errors committed by the trial judge. Conviction was affirmed.

John H. Lashly, Jacob M. Lashly (Paul B. Rava, Lashly, Lashly & Miller, Alan Y. Cole with them on brief), for Matthew J. Connelly. John J. Hooker (Walter M. Haynes, C. Arthur Anderson with him on brief), for T. Lamar Caudle. Warren Olney, III, Assistant Attorney General (Harry Richards, United States Attorney, Carl H. Imlay, Department of Justice, with him on brief), for appellee.

Before GARDNER, Chief Judge, and VOGEL and VAN OOSTERHOUT, Circuit Judges.

GARDNER, Chief Judge:

Appellants with one Harry I. Schwimmer were indicted under an indictment which charged them with conspiring to defraud the United States government in violation of Section 371, Title 18, U. S. C. The single count indictment alleged that the purpose of the conspiracy was to defraud the United States of the proper administration of the Internal Revenue laws and regulations, of the proper and faithful service of appellants Connelly and Caudle and to commit the offenses of bribery, perjury and knowingly making false statements and entries. The indictment named as co-conspirators but not as defendants Irving Sachs, Ellis N. Slack, Shu-Stiles, Inc., and divers other persons to the grand jury unknown. At all times pertinent to the issues here involved appellant Matthew J. Connelly was Appointment Secretary to President Truman; appellant T. Lamar Caudle was an Assistant Attorney General in charge of the Tax Division of the Department of Justice; Harry I. Schwimmer was a Kansas City, Missouri, lawyer; Ellis N. Slack was an attorney in the Department of Justice; Irving Sachs was a St. Louis, Missouri, shoe broker, and Shu-Stiles, Inc. was a Missouri corporation of which Sachs was president. The indictment further charged that the purpose of the conspiracy was to protect Irving Sachs from criminal prosecution for Internal Revenue law violations.

After considerable testimony had been introduced by the government in support of the indictment Harry I. Schwimmer, named as a defendant, suffered a heart attack making it impossible for him to be present at the trial and, thereupon, a five-day continuance was had. On proof that defendant Schwimmer could not, because of his heart condition, continue to be present at the trial or to participate therein the court declared a mistrial as to him, whereupon appellants Connelly and Caudle moved for a mistrial as to themselves, which motions the court denied. At the close of the government's evidence in chief appellants moved for judgments of acquittal which motions were denied. The appellants then offered evidence in their defense and at the close of all the evidence they renewed their motions for judgments of acquittal. The court announced that it would reserve ruling on these motions. At the close of all the evidence the court withdrew from the consideration of the jury the allegations of the indictment regarding the substantive offenses of bribery, perjury and knowingly making false statements and entries and then submitted the case to the jury on instructions to which no exceptions are here urged. The jury returned verdict of guilty as charged in the indictment and thereafter appellants interposed motions for judgment of acquittal notwithstanding the verdict, or, in the alternative, for a new trial. They also renewed their motions for mistrial which had been denied at the time a mistrial was declared as to defendant Schwimmer. The court set these motions down for hearing thirty days from the date of filing. Twelve days before the date set for hearing Judge Hulen, who had heard the case, departed this life and thereafter and in due course Judge Gunnar H. Nordbye, United States District Judge for the District of Minnesota, was appointed as successor judge under Rule 25, Federal Rules of Criminal Procedure. Subsequent to the appointment of Judge Nordbye as successor judge appellants filed a supplemental motion for new trial on the ground of newly intervening facts, namely, the death of Judge Hulen, whereby appellants alleged they were deprived of the determination of pending motions by the trial judge, and on the ground of newly discovered evidence regarding the failure of some jurors to answer material questions propounded by the trial court upon voir dire examination. A hearing was had before Judge Nordbye on all pending motions December 18, 1956, and thereafter on February 11, 1957, all pending motions were overruled by him. Subsequent to the denial of these pending motions and on or about March 4, 1957, appellants filed a third supplemental motion for new trial on the ground of alleged newly discovered evidence. This too was denied by Judge Nordbye, following which the court pronounced sentence and entered judgment pursuant to the jury's verdict.

It is the contention of appellants that they were deprived of a fair trial by virtue of Judge Hulen's death after verdict was rendered and by the fact that a successor judge heard and denied their post-trial motions for judgment of acquittal and for a new trial. It is urged that the successor judge was not qualified to pass upon the pending motions, particularly their motions for judgment of acquittal notwithstanding the verdict or in the alternative for a new trial, because not having presided at the trial of the case he did not have the "feel of the case". Rule 25, Federal Rules of Criminal Procedure provides as follows:

"If by reason of absence from the district, death, sickness or other disability the judge before whom the defendant has been tried is unable to perform the duties to be performed by the court after a verdict or finding of guilt, any other judge regularly sitting in or assigned to the court may perform those duties; but if such other judge is satisfied that he cannot perform those duties because he did not preside at the trial or for any other reason, he may in his discretion grant a new trial."

Judge Nordbye was assigned as successor judge in this case in strict compliance with this rule. Federal criminal law and procedure are dependent upon Federal statutes. Under this rule it was the duty of the successor judge, in the first instance at least in the exercise of a sound judicial discretion, to determine whether he could satisfactorily perform the duties of the judge who presided at the trial and whom he succeeded. It is to be observed that in the instant case while Judge Nordbye was assigned to perform the unfinished trial of this case on June 16, 19 56, he did not hear the pending motions until some six months later and it is quite apparent from this record that in that time he thoroughly familiarized himself with the facts and satisfied himself that he could perform the duties to be performed by the presiding judge. Referring to this contention Judge Nordbye in the course of his opinion says:

"* * * This Court is not unmindful that the observation made by the defendants as to the assigned Judge's being unable to have the 'feel of the case' is a matter that deserves careful consideration, and undoubtedly there is substance to defendants' position in this regard. On the other hand, this Court cannot escape the fact that this case has taken a long time to try, the defendants were represented by experienced and skillful counsel, and the Judge who presided at the trial was recognized by all parties to have been not only an able and experienced trial judge, but one who presided with impeccable fairness and impartiality. Consequently, it would seem that, under these circumstances and after consideration of the entire record, I should not evade the responsibility which rests upon me by summarily granting a new trial, but rather to the best of my ability attempt to render definitive rulings on the various aspects of the motions presented."

There might well be a criminal case in which the testimony would be of such a character that a successor judge could not fairly pass upon the questions here presented. If the evidence of the government were denied and the question of the credibility of the government witnesses was a serious issue the conflict in the evidence and the question of the credibility of witnesses might be a matter of very serious consideration. However, in the instant case the evidence of the government was not of that character. As has been observed, the defendants here were charged with attempting to thwart the criminal prosecution of Irving Sachs for Internal Revenue law violations. The Internal Revenue agents on investigation reported that Sachs, as president of Shu-Stiles, Inc., had fraudulently evaded taxes due the government by the company to the extent of $188,378.32. Criminal prosecution had been recommended by the agents of the Bureau of Internal Revenue and attorney Schwimmer was then employed to thwart this threatened criminal prosecution. The government's testimony tended to prove certain business transactions between Schwimmer and appellants by which the appellants profited, the payment of large sums of money by Sachs to Schwimmer, entries in books of Schwimmer indicating disbursement of sums of money on behalf of appellants, evidence that Schwimmer had purchased for appellant Connelly two suits of clothes, and evidence of visits by Schwimmer to and consultations with the appellants at various times. This general characterization of this testimony indicates that it was in the nature of circumstantial evidence by the government furnishing the basis for inferences by the jury and it was not disputed by appellants but their testimony went to either their lack of knowledge or other explanations of the transactions proven by the government. In these circumstances there was not much to be gained by hearing the testimony of the witnesses and observing their demeanor that could not be gained by reading the testimony and we think Judge Nordbye did not abuse his judicial discretion when he determined, as he manifestly did, that he could perform the duties to be performed by the presiding judge after verdict. The law governing the situation here presented was strictly complied with and we think that law provided due process within the requirements of the Fifth Amendment. Meldrum v. United States , 9 Cir., 151 Fed. 177; Chin Wah v. United States , 2 Cir., 13 Fed. (2d) 530; King v. United States , 6 Cir., 25 Fed. (2d) 242; Owens v. Hunter, 10 Cir., 169 Fed. (2d) 971; McIntyre v. Modern Woodmen of America , 6 Cir., 200 Fed. 1; Pessagno v. Euclid Inv. Co., D. C. D. C., 35 Fed. Supp. 743; United States v. Green, S. D. Ill., 143 Fed. Supp. 442. In Meldrum v. United States , supra, the authority of a succeeding judge to pass upon a motion for a new trial in a federal criminal case tried before another judge who died while the motion was pending was expressly sustained. In the course of the opinion in that case it is said:

"Did the judge of the court below have authority to pass upon the motion for a new trial and impose the sentence? The plaintiff in error contends that he did not, that he had not participated in the trial, and that the right of the plaintiff in error to have the judge who presided at his trial take part with the jury at every step in the determination of his guilt or innocence was a fundamental right which could not be taken away by an act of Congress, * * *.

"* * * Section 953 of the Revised Statutes as amended by Act June 5, 19 00, c. 717, Sec. 1, 31 Stat. 270 (U. S. Comp. St. 1901, p. 696), provides that in case of the death of the judge before whom a cause has been tried the judge who succeeds him 'or any other judge of the court in which the cause was tried, holding such court thereafter, if the evidence in such case has been or is taken in stenographic notes * * * shall pass upon said motion and sign such bill of exceptions'; and it further provides that if said judge is satisfied that, owing to the fact that he did not preside at the trial or for any other cause, he cannot fairly pass upon said motion and allow and sign said bill of exceptions, he may in his discretion grant a new trial. If the succeeding judge can, as undoubtedly he may under this statute, deny a motion for a new trial, there can be no question of his power to further proceed in the case and render judgment upon the verdict."

We conclude that the contention that Judge Nordbye was disqualified to perform the duties to be performed by the presiding judge after verdict is without merit.

Appellants were subpoenaed as witnesses to testify before the grand jury and each of them did so testify. After the return of the indictment they moved to dismiss the indictment and suppress the testimony which they had given before the grand jury on the ground that they had not been advised that the prosecutor had decided at the time they testified to seek an indictment against them. Appellant Caudle was a lawyer with wide experience in criminal prosecutions on behalf of the government. Appellant Connelly was a man experienced in the investigating of fraud and criminal matters. He had been the chief investigator for a Senate committee investigating many fraudulent and criminal situations. The record definitely shows that each of the defendants was apprised of his constitutional rights. There was some doubt as to when the prosecutor had definitely decided to seek an indictment against them. After hearing testimony on the motion Judge Hulen decided when the prosecutor had decided to seek indictments against them and he suppressed all testimony given by them before the grand jury after that date, but denied the motion to suppress testimony given by them before that date and also denied their motions to dismiss the indictment. The ruling of the court, we think, was eminently fair to appellants. We shall not encumber this opinion with a long recital of the warnings given and the circumstances thereof. It abundantly appears that they were advised and were at all times aware of their constitutional rights. We think the contention of appellants in this regard wholly without merit.

The trial of this case began May 7, 19 56, and the jury returned a verdict June 14, 19 56. After the case had been on trial for some sixteen days the defendant Schwimmer suffered a heart attack and as hereinbefore noted a mistrial was declared as to him. Thereupon appellants moved for a mistrial as to themselves on the ground that certain evidence admitted as to Schwimmer alone was of such a prejudicial nature that its effects could not be eradicated from the jury's mind by the court's instructions. Their motion was denied and the court instructed the jury that the testimony which the court identified, admitted as to Schwimmer alone, was withdrawn from the jury's consideration. In the course of its instruction on this question the court said:

"Now, as to the testimony given by these two witnesses as I have referred to them as to these conversations with Schwimmer, I withdraw that testimony from your consideration. I have not gone into it in detail, but you will recall it. You are not to consider such testimony as evidence in this case of any character. Just forget that that testimony relating to the subject and at the times I have referred to was given in this case. Strike it from your minds entirely. It now has no bearing on the issues in this case and you will not consider it in any manner in arriving at your decision as to the guilt or innocence of either of the defendants in this case.

"Does that cover the subject?"

The instruction was not excepted to. The testimony in no way implicated either of the other defendants on trial and we think the court's instruction proper, and we cannot presume that the jury disregarded it. Blumenthal v. United States, 332 U. S. 539; Lutwak v. United States, 344 U. S. 604; Opper v. United States, 348 U. S. 84; Delli Paoli v. United States, 352 U. S. 232 [57-1 USTC ¶9356]. In Blumenthal v. United States, supra, two of the defendants had made admissions which the trial court admitted as to them only and in its instructions specifically limited such evidence as to them and told the jury to disregard such evidence in considering the guilt or innocence of the other three defendants. In the course of the opinion it is among other things said:

"But the trial court's rulings, both upon admissibility and in the instructions, leave no room for doubt that the admissions were adequately excluded, insofar as this could be done in a joint trial, from consideration on the question of their guilt. The rulings told the jury plainly to disregard the admissions entirely, in every phase of the case, in determining that question. The direction was a total exclusion, not simply a partial one as the Government's argument seems to imply. The court might have been more emphatic. But we cannot say its unambiguous direction was inadequate. Nor can we assume that the jury misunderstood or disobeyed it."

In the very recent case of Delli Paoli v. United States , supra, the Supreme Court, reaffirming the doctrine of its prior decisions, said:

"It is a basic premise of our jury system that the court states the law to the jury and that the jury applies that law to the facts as the jury finds them. Unless we proceed on the basis that the jury will follow the court's instructions where those instructions are clear and the circumstances are such that the jury can reasonably be expected to follow them, the jury system makes little sense. Based on faith that the jury will endeavor to follow the court's instructions, our system of jury trial has produced one of the most valuable and practical mechanisms in human experience for dispensing substantial justice."

The declaration of a mistrial as to the defendant Schwimmer removed him from the case and it is to be noted that prior to the trial appellants sought to remove him from the case by a motion for severance. This declaration of a mistrial as to Schwimmer as effectively removed him from the case as would the granting of appellants' motions for severance. But it seems to be argued that appellants were prejudiced, both by having Schwimmer tried jointly with them and by removing him by process of declaring a mistrial as to him. It is suggested that when Schwimmer was removed as a defendant they were deprived of his possible testimony on the assumption that he would have taken the stand in his own defense. This he might or might not have done and in this connection it is observed that he invoked the Fifth Amendment when he was called before the grand jury. Neither is there any assurance that had he taken the witness stand his testimony would have any tendency to exonerate appellants. Appellants' position after the severance of Schwimmer by the court's declaration of a mistrial as to him was no different than it would have been had he been named only as a co-conspirator. Even had Schwimmer been named as a co-conspirator only, his acts and declarations during the time of and in furtherance of the conspiracy would have been admissible against appellants. We think the removal of Schwimmer from the case was not prejudicial to appellants. Carrado v. United States , D. C., 210 Fed. (2d) 712; Poliafico v. United States , 6 Cir., 237 Fed. (2d) 97; United States v. Beck, 7 Cir., 118 Fed. (2d) 178; United States v. Karavias, 7 Cir., 170 Fed. (2d) 968. The motion for mistrial as to the appellants because of the severance of Schwimmer by the court's declaration of mistrial as to him was under the circumstances here disclosed addressed to the sound judicial discretion of the trial judge and we think this discretion was wisely exercised in denying appellants' motions.

The court on its own motion entered an order directing that in selecting jurors for this case residents of the city and county of St. Louis be excluded from the list of prospective jurors, and the prospective jurors were accordingly selected from other parts of the district. Prior to the entry of this order the defendants had moved for a change of venue on the ground, among others, that they could not have a fair and impartial trial in the district because of the prejudicial publicity, editorial and otherwise, largely contained in the daily newspapers published in St. Louis and widely circulated and read, concerning alleged corruption of public officials in the Bureau of Internal Revenue and in the Department of Justice, and specifically relating to the method of handling income tax evasion cases in the Eastern District of Missouri, and the alleged corruption of public officials both in the District of Columbia and the Eastern District of Missouri. These motions were denied but the court then entered the above order, geographically excluding residents of the city and county of St. Louis . Section 1865(a), Title 28, U. S. C. provides:

"Grand and petit jurors shall from time to time be selected from such parts of the district as the court directs so as to be most favorable to an impartial trial, and not to incur unnecessary expense or unduly burden the citizens of any part of the district with jury service. * * *"

The order was in strict conformity with the statute and it did not eliminate any particular class but the jury as drawn represented a cross section of the geographic unit designated and was manifestly selected from that part of the district which the judge thought to be most favorable to an impartial trial. The contention that the order resulted in a "rural" jury is without foundation in fact. As disclosed by their examination on voir dire for instance, six of the panel had lived in St. Louis or other large cities for some time. Many of the other jurors lived in large towns. Neither were the prospective jurors exclusively engaged in agricultural pursuits but included a wide range of professions, trades and occupations. The action of the trial judge followed a practice warranted by this statute. Myers v. United States , 8 Cir., 15 Fed. (2d) 977; Thiel v. Southern Pacific Co., 328 U. S. 217; Frazier v. United States , 335 U. S. 497. In Myers v. United States , supra, it is said:

"Plaintiff in error, defendant below, filed a motion to quash the jury panel because of the exclusion, in the drawing, of jurors from Douglas county, in which Omaha is situated; it being urged that the population of Douglas county formed a large percentage of that of the division of the district in which the offense was committed and tried. The order excluding these jurors was made pursuant to a long-standing practice of the court that, in drawing jurors, the county in which the crime was committed should be excluded.

* * *

"The motion to quash the panel was properly overruled. The law authorizes the court to draw the jury as was done in this case, and it is not required to assign a reason for so doing. The presumption is that it acted in the exercise of a sound discretion. If requested to assign a reason for the purpose of making a record for review, we think proper practice would require this to be done; but, in the absence of such request, we do not think the discretion can be challenged on that ground. The burden is upon the party who seeks to challenge the alleged arbitrary action, and in this case that burden has not been successfully carried. Spencer v. United States (C. C. A. Eighth Circuit) 169 Fed. 562, 95 C. C. A. 60."

We must presume that it was the purpose of the trial judge to have the jury selected from such parts of the district as to be most favorable to an impartial trial.

After the trial had closed and the jury had returned a verdict finding appellants guilty, and a successor judge had been assigned to finish the trial of the case, appellants filed a motion for new trial on the ground of newly discovered evidence. In this motion it was alleged that two of the women jurors had concealed important facts relevant to their personal qualifications thereby impairing appellants' rights to intelligently exercise their challenges and depriving them of a fair and impartial trial. These two jurors were women. On voir dire the judge propounded among others the following questions:

"Have any of you or the immediate members of your family, mother, father, brother, sister or husband or wife, or children, other than the gentleman who was sheriff, have you or any immediate members taken part in behalf of either political parties in political affairs such as a candidate for office or committee worker?

"Do either of you or are any members of your family affiliated or hold membership or office--we have covered county committees, but sometimes there are Democratic or Republican organizations separate from the committee, and sometimes Democratic clubs or Republican clubs. To your knowledge, are you or any member of your family any members of such club or organizations? If so, raise your hand."

Neither of these women jurors answered either of these inquiries in the affirmative. In referring to this incident Judge Nordbye in his opinion says:

"The evidence at the hearing on the motions for a new trial, which supplanted the affidavits previously obtained, indicate that these two jurors, to wit, Goldie Brown and Grace Hoffman, were members of the Montgomery Township Republican Club in the years 1953, 1954 and 1955, but evidently from the testimony it would appear that they were not in 1956. Robert Hoffman, however, the son of Grace Hoffman, was treasurer of the committee or club in 1956. There is no showing here that Mrs. Hoffman knew that her son was treasurer of the local Republican Central Committee in 1956, and moreover, there is no showing that either of these jurors wilfully failed to answer truthfully the questions to which reference has been made. Furthermore, there is no showing that the defendants were prejudiced in any way by reason of any Republican affiliation or activities of either of these two jurors. This Court has no right to assume that in this trial jurors of Republican political affiliation would be prejudicial to these defendants and that jurors of Democratic affiliation would be prejudicial to the Government. And finally, the record is bereft of any showing that there was fraudulent conduct on the part of these jurors."

We are in entire accord with this ruling.

It is contended that the court erred in denying a change of venue or a continuance. The motions were addressed to the discretion of the court, Finnegan v. United States, 8 Cir., 204 Fed. (2d) 105; Stroud v. United States, 251 U. S. 15, and on careful review of the record we are convinced that there was no abuse of that discretion.

It is next contended that appellants' motion for judgment of acquittal or a new trial should have been granted because the evidence is as consistent with innocence as with guilt. In considering the question of the sufficiency of the evidence to go to the jury and to sustain the verdict we must view the evidence in a light most favorable to the prevailing party, in this case the government, and the prevailing party is entitled to all such favorable inferences as may reasonably be drawn from the facts and circumstances proven. If when so viewed, reasonable minds might reach different conclusions then the issue is one of fact to be submitted to the jury and not one of law to be determined by the court. Brennan v. United States , 8 Cir., 240 Fed. (2d) 253; Peters v. United States , 8 Cir., 160 Fed. (2d) 319.

It appears without dispute that Irving Sachs was guilty of a wilful and flagrant tax fraud to which there was apparently no defense. As heretofore noted the agents of the Bureau of Internal Revenue had recommended prosecution. In this situation Harry I. Schwimmer, a lawyer of Kansas City , Missouri , was employed for the express purpose of thwarting this threatened criminal prosecution. His first ground for seeking relief was that Sachs had made voluntary disclosure. When it was shown that the co-called disclosure was not full and complete but was itself fraudulent Schwimmer abandoned that theory and sought to protect his client from criminal prosecution on the ground of ill health, claiming that his prosecution would probably result in his death. While it was shown that Sachs was an epileptic, the fact was not known to his own counsel, Shifrin, who had represented him for some twenty years, and even during the time the Department of Justice was considering the gravity of his malady he was able to look after his business in substantially his usual and normal manner. He was chief executive of Shu-Stiles, Inc., a substantial concern. At the government's request he was examined by Dr. Robert M. Bell, a consultant for the United States Public Health Service in neuropsychiatry. Dr. Bell reported that in his opinion any fatal outcome in the case of prosecution and trial of Sachs was "remote indeed". Schwimmer employed a number of doctors, none of whom made an examination of Sachs, but on the basis of reports and data submitted to them gave as their opinion that criminal prosecution of Sachs would constitute a clear and present danger to his health. Caudle disregarded the report of Dr. Bell; he also disregarded the recommendation of the Bureau of Internal Revenue and ordered that Sachs be not criminally prosecuted but that the case be treated on the basis of civil liability. His action in disregarding the recommendation of the Bureau of Internal Revenue and in disregarding the report of a government doctor was unprecedented and did violence to the accepted practice of the Department. It appears from the evidence that Schwimmer made frequent calls on Caudle and Connelly. There is evidence of their frequent conversations and there is evidence of Caudle's and Connelly's continued activity and interest on behalf of Schwimmer's client. Schwimmer received in payment as compensation for his services in seeking to thwart the criminal prosecution of Sachs some $46,000, from which apparently he paid to each of the appellants or on their behalf substantial sums of money. There is also undisputed evidence that Schwimmer presented to Connelly two suits of clothes made to order.

As has heretofore been noted, the appellants, through Schwimmer, had certain business transactions in which they made substantial profits. The jury may well have inferred that these so-called business transactions were a mere cover-up for the fact that Schwimmer was compensating them for assisting him in thwarting the prosecution of a man confessedly guilty of defrauding the government. It is strenuously urged that the evidence was insufficient to prove that Connelly knowingly participated as a co-conspirator. It appears from the evidence that Connelly first called Charles Oliphant, Chief Counsel of the Bureau of Internal Revenue, in August of 1948, when Schwimmer had scheduled a conference with Oliphant, saying that Schwimmer had asked that "we call you and let you know we know him".

The case was referred to the Department of Justice August 12, 19 49, after pending about four years in the Bureau of Internal Revenue where Schwimmer, with the assistance of Connelly, had secured its delay. Subsequent to the transfer of the case to the Department of Justice Schwimmer obtained a further delay of one month. In September of 1949 Connelly then called Caudle and requested further postponement for his "friend" Harry I. Schwimmer. In response to this request Caudle relayed a message through Connelly to Schwimmer that Schwimmer could come in whenever he wanted but as soon as possible and that a postponement would be all right because the statute of limitations was not involved. A few days subsequent to this contact between Connelly and Caudle, Sachs paid $2,500 from Shu-Stiles, Inc. money to Schwimmer and on October 12, 19 49, gave Schwimmer a check for $10,000, from which Schwimmer purchased an oil royalty for Connelly. The jury was warranted in believing that these expenditures by Schwimmer on behalf of Connelly were to reward him for his services in assisting to thwart the criminal prosecution of his client Sachs and there are other attending circumstances corroborating this conclusion. As pointed out by Judge Nordbye:

"That Connelly knew and understood that Schwimmer's business with Caudle was an attempt to obtain a commitment from the Department of Justice that there would be no criminal prosecution in the Sachs case, seems evident from the conversation which Connelly had with Oliphant over the telephone on January 16, 19 51. At that time Schwimmer already had obtained a letter from Caudle stating that there would be no criminal prosecution in the Sachs case, but notwithstanding he was attempting to obtain a similar letter of no-prosecution from the Bureau of Internal Revenue. In a conversation with Connelly over the telephone, Oliphant stated, 'You know Schwimmer on Sachs--does he just want to look good?' And Connelly replied, 'Wants to make sure not going to reverse justice again.' Certainly, this conversation would indicate that Connelly was aware of Schwimmer's plans to have both Departments committed on the Sachs case so that he need have no fear that the Bureau would render a ruling adverse to that which he obtained from the Justice Department. Moreover, it must be apparent that Connelly knew that Schwimmer had obtained a no-prosecution letter from Caudle at that time. The friendly relations between Connelly and Schwimmer and the six or seven or more telephone calls to government officials made by Connelly with reference to the Sachs case fully warranted the jury in determining that Connelly's relation with the case that was pending in the Bureau of Internal Revenue and then in the Department of Justice was something more than mere routine telephone calls for the arranging of appointments."

The inferences to be drawn from all the surrounding circumstances connecting Connelly with the activity of Schwimmer warranted the jury in returning its verdict of guilty as to both appellants.

There was in evidence a document in Schwimmer's handwriting indicating that in connection with Schwimmer's attempt to thwart the criminal prosecution of his client, Schwimmer paid substantial sums to or on behalf of appellants. These circumstances, we think, warranted the jury in inferring that Schwimmer paid the appellants substantial sums of money for their assistance in attempting to thwart the criminal prosecution of his client. We conclude that the evidence, with the inferences that might reasonably be drawn therefrom by the jury, was substantial and that there was no error in denying appellants' motion for judgment of acquittal or for a new trial.

It is however contended that the court erred in admitting in evidence a document referred to in the evidence as Exhibit 100(j) which we have heretofore adverted to as a document in Schwimmer's own handwriting taken by the government from one of his account books. There was ample evidence to warrant the jury in finding, as it manifestly did, that the defendants Schwimmer, Connelly and Caudle had entered into a conspiracy as charged in the indictment. Any act or admission by either of the participants in the conspiracy occurring during its existence and in furtherance of its purposes was admissible as to all defendants. Lutwak v. United States, 344 U. S. 604; Wiborg v. United States, 163 U. S. 632; Cwach v. United States, 8 Cir., 212 Fed. (2d) 520; Braatelien v. United States , 8 Cir., 147 Fed. (2d) 888; Harper v. United States , 8 Cir., 143 Fed. (2d) 795. The exhibit contains the following:

"Oct--49

"Loan $2,500

From I. Sachs

"Shu-Stiles ..................         $10,000

"Pd out Oil Royalty M. C. ....           4,200

                                        $ 5,800

 

"Held in Escrow to be paid out depending on whether I. Sachs case is dropped."

As said by Judge Nordbye in considering the admissibility of this exhibit:

"Government's Exhibit 100-j does not represent the entry of a mere narrative event, but it consists of an act of a conspirator who was handling the fund by and through which the conspiracy was to be accomplished. The entry consists of a recording of the receipt of the first anticipated disbursement thereof and the earmarking of the remaining funds for the purpose of carrying out the conspiracy. To earmark or allocate the remainder of a slush fund which has been created for the purpose of consummating an unlawful conspiracy would be an act in furtherance of such conspiracy."

We are in accord with Judge Nordbye's views. There was independent evidence that on October 12, 19 49, co-conspirator Sachs, president of Shu-Stiles, Inc., gave Schwimmer a $10,000 check in addition to a prior payment of $2,500 on September 22, 19 49, both of which are reflected in this exhibit. This testimony shows that these entries were made during the existence of the conspiracy. We think the exhibit was properly admitted as against both appellants.

There was admitted in evidence over the objection of appellants testimony of certain telephone conversations between Schwimmer and Oliphant, Caudle and Oliphant, and Connelly and Oliphant. These were based upon transcripts made by Oliphant's secretaries in the so-called Oliphant log which was a record kept in the regular course of Oliphant's official duties by Oliphant's secretaries. The sole objection to the admission of this evidence was that it violated the best evidence rule. The evidence shows that when a call would come in to the office over the official, as opposed to the private office telephone, of the Chief Counsel for his personal attention, the secretaries would listen in with earphones and transcribe the official content only as a routine matter in the regular course of their duties. The records made recorded the calls in full unless the call concerned only the making of an appointment, in which case they just recorded that fact in its essence. Although the objection was based solely on the ground that this evidence was violative of the best evidence rule it is now argued that the entries were not kept in the regular course of business, but were private entries. The practice of keeping these records of official calls and visits was a well established practice which had been followed not only by Mr. Oliphant but by his predecessor in office. This testimony was admissible, we think, under the Federal Business Records Act, Sec. 1733(a), Title 28, U. S. C.; Finnegan v. United States , supra; Harper v. United States , supra; Holland v. United States , 10 Cir., 209 Fed. (2d) 516 [54-1 USTC ¶9177]; Stegemann v. Miami Beach Boat Slips, 5 Cir., 213 Fed. (2d) 561. The evidence conclusively showed that these records were made in the usual and systematic course of the business to which they had reference and they specifically referred to actions occurring at the time of their entry. We need not here enumerate the reasons for the rule making such entries admissible. They are too well established to require citation of authorities. There was no error in admitting this evidence, which incidentally directly showed Mr. Connelly's continued interest in the success of Mr. Schwimmer's undertaking to prevent the criminal prosecution of his client.

It is finally urged that the court erred in receiving evidence on rebuttal to the effect that appellant Connelly accepted gifts of clothing from Schwimmer. The evidence so received showed that Connelly received two suits worth $315.78 and a top coat worth $110 from Schwimmer. On cross-examination Connelly was repeatedly asked whether he had received any money, property, gifts or anything of value from Schwimmer during the time of the transactions here in question. He was quite evasive but finally answered that his wife might have received some flowers and he might have received some neckties. On further inquiry the witness said that he could not "recall" any others. He was then directly asked whether he had not received two suits of clothes "of a value over $300" which he then admitted receiving but that he could not recall when he received these gifts or whether he had received anything else of value from Schwimmer. On re-examination by his counsel the witness was asked to give the dates of the presents given him. In answer to this Connelly testified that in the past he had frequently received gifts from friends at the Christmas season. It appears from the cancelled checks produced that the gifts of two suits of clothes were given in the month of July, 1952. The government also showed that Connelly received a top coat in November or December of 1952. The testimony was admitted as to Connelly alone. We think it was clearly admissible on the question of the credibility of the witness and on the question of intent. No exception was saved by appellants to the instruction of the court so limiting this testimony. Acts done by a conspirator even after the termination of the conspiracy are properly admissible as having probative value as bearing on the intent and purpose of the conspirator in doing acts during the existence of the conspiracy. Thus in Lutwak v. United States, 344 U. S. 604, it is said inter alia:

"It does not necessarily follow that acts and declarations made after the conspiracy ended are not admissible. In this case, the essential fact of the conspiracy was the existence of phony marriage ceremonies entered into for the sole purpose of deceiving the immigration authorities and perpetrating a fraud upon the United States . Acts which took place after the conspiracy ended which were relevant to show the spuriousness of the marriages and the intent of the parties in going through the marriage ceremonies were competent * * *."

It is now well established that evidence of acts or transactions not done in furtherance of the conspiracy may nevertheless be admitted if they tend to connect the conspirator with the conspiracy "by explaining his state of mind." Glasser v. United States , 315 U. S. 60. Neither is there any merit to the contention that this evidence was not admissible because it was offered in rebuttal. Walder v. United States , 347 U. S. 62. We conclude that there was no prejudicial error in admitting this testimony. We have given consideration to all the other contentions urged by appellants but think they are wholly without merit.

Appellants were represented at the trial of this case by skilled counsel of wide experience. The case has been well briefed on either side and ably argued. On the whole record we are convinced that the appellants had a fair trial and that there were no prejudicial errors committed by the trial court. The judgment appealed from is therefore affirmed.

 

 

[60-1 USTC ¶9145]Matthew J. Connelly and T. Lamar Caudle, Appellants v. United States of America , Appellee

(CA-8), U. S. Court of Appeals, 8th Circuit, No. 16,213, 271 F2d 333, 11/9/59, Affirming an unreported District Court decision

[1954 Code Sec. 7214]

Crimes: Offenses by officers of the United States: Motion for new trial: Newly discovered evidence.--The trial court did not abuse its discretion when it denied appellants' motions for a new trial on the ground of newly discovered evidence in the alleged available testimony of their co-defendant, as to whom a mistrial had been granted. The appellants, one the former Appointment Secretary to President Truman and the other an Assistant Attorney General, were convicted of conspiring to aid another in evading income taxes and to protect him from criminal prosecution. The motions were denied on the ground that the evidence would not probably result in an acquittal if a new trial were granted.

John H. Lashly, Alan Y. Cole (Jacob M. Lashly, Paul B. Rava, Lashly, Lashly & Miller with them on brief), for appellant Matthew J. Connelly. T. L. Caudle, Jr. (Walter M. Haynes, C. Arthur Anderson, John J. Hooker with him on brief), for appellant T. Lamar Caudle. Oliver Dibble, Department of Justice, Washington, D. C. (Malcolm R. Wilkey, Assistant Attorney General, Donald C. Bush, Department of Justice, Washington, D. C.), for appellee.

Before GARDNER, VOGEL, and VAN OOSTERHOUT, Circuit Judges.

GARDNER, Circuit Judge:

Appellants, with one Harry I. Schwimmer, were indicted for conspiracy to defraud the United States of the proper administration of Internal Revenue Laws and regulations and of the proper and faithful service of appellants, in violation of Section 371, Title 18, United States Code. We shall refer to appellants as defendants.

In the course of the trial Harry I. Schwimmer, who had been indicted with defendants, suffered a heart attack, whereupon a mistrial was granted as to him and the cause proceeded against the other defendants. The jury returned a verdict of guilty, but the trial judge departed this life before the entry of judgments. In due course, the Honorable Gunnar H. Nordbye, United States District Judge for the District of Minnesota, was designated as successor judge. Motions for judgments notwithstanding the verdict were presented to and denied by Judge Nordbye and judgments and sentences were thereupon entered. From the judgments and sentences thus entered defendants appealed to this court and the judgments of conviction were affirmed. 249 F. 2d 576 [57-2 USTC ¶10,029]. Defendants then petitioned the Supreme Court for certiorari, which was denied. 356 U. S. 921. They then applied for rehearing of their petition, which was likewise denied. 356 U. S. 964. Defendants then applied for probation under Section 3651, Title 18, United States Code, which applications were denied. Each of the defendants then moved for a new trial on the ground of newly discovered evidence in the alleged available testimony of Harry I. Schwimmer, their co-defendant, as to whom a mistrial had been granted. These motions were denied on the ground, among others, that the evidence would not probably result in an acquittal if a new trial were granted. This appeal followed.

[Motion for New Trial Based on Newly Discovered Evidence Denied]

By way of preface, it may be stated that motions for new trial on the ground of newly discovered evidence are looked upon with disfavor and it is equally well settled that such motions are addressed to the judicial discretion of the trial court and its decision will not be reversed on appeal except for a clear abuse of that discretion. United States v. Johnson, 327 U. S. 106 [46-1 USTC ¶9155]; Long v. United States, 10 Cir., 139 F. 2d 652; Casey v. United States, 9 Cir., 20 F. 2d 752; United States v. Hiss, D. C. N. Y., 107 F. Supp. 128, aff'd, 201 F. 2d 372; 23 Corpus Juris Secundum, Section 1453, p. 1224. In Long v. United States , supra, the Court of Appeals for the Tenth Circuit, in affirming an order denying a motion for new trial on the ground of newly discovered evidence, states the applicable rule of procedure as follows:

"It is well settled that the matter of granting a new trial on after-discovered evidence rests in the sound judicial discretion of the trial court, and an order refusing a new trial on that ground will not be disturbed on appeal, in the absence of a plain abuse of discretion. Wulfsohn v. Russo-Asiatic Bank, 9 Cir., 11 F. 2d 715; Streckfus Steamers, Inc. v. Shuttleworth, 4 Cir., 86 F. 2d 327; Morton Butler Timber Co. v. United States , 6 Cir., 91 F. 2d 884; Weiss v. United States , 5 Cir., 122 F. 2d 675. And it is equally well settled that an application for a new trial based upon that ground is not regarded with favor and will be granted with great caution. Bonness v. United States , 9 Cir., 20 F. 2d 754; Weiss v. United States , supra; * * *."

The prevailing rule is thus stated in 23 Corpus Juris Secundum, Section 1453, supra:

"The granting or the refusal of the motion rests very largely in the sound discretion of the trial court, the prime consideration being whether or not substantial justice has been done, and, in the absence of an abuse of such discretion, its ruling will not be interfered with by appellate tribunals. The courts, however, have always listened distrustfully to the claim of newly discovered evidence, and as a ground for a new trial it is not favored."

It is urged in the briefs of defendants that the question of the credibility of witnesses and the weight to be given to their testimony is exclusively a function of the jury and cases are cited wherein the court in its instructions to the jury invaded the province of the jury as to this function. This rule, however, is applicable only where the issue is tried to a jury. In issues tried to the court it is the function of the court to determine the issues of fact and the credibility of testimony. A motion for new trial on the ground of newly discovered evidence is heard by the trial judge and it is his function to determine the credibility of all evidence that may be produced. 23 Corpus Juris Secundum, Section 1461, p. 1253; United States v. Peller, D. C. N. Y., 151 F. Supp. 242; Johnson v. United States, 8 Cir., 32 F. 2d 127. The rule is succinctly stated in 23 Corpus Juris Secundum, Section 1461, supra, thus:

"The trial court has the right to determine the credibility of newly discovered evidence for which a new trial is asked, and if the court is satisfied that, on a new trial, such testimony would not be worthy of belief by the jury, the motion should be denied."

It is further argued that the court did not get the "feel of the case" because the witness, Schwimmer, did not appear on the witness stand and his demeanor could not have been observed by the court. In this case the testimony of the witness was secured by the answers to direct and cross interrogatories. The short answer to this argument would seem to be that the procedure in this case was not exceptional as the general practice is to support motions for a new trial on the ground of newly discovered evidence by affidavit. The court had before it and was familiar with every syllable of the questions and answers of this witness, and the court also had before it affidavits as to the witness's mental and physical condition, and the court had had unusual occasion and opportunity to be familiar with all testimony that had been presented in the trial of this case. This court in Johnson v. United States , supra, announced a formula for testing the sufficiency of evidence warranting the granting of a new trial on the ground of newly discovered evidence. This may be summarized as follows: (a) the evidence must be in fact newly discovered, i.e., discovered since the trial; (b) facts must be alleged from which the court may infer diligence on the part of the movant; (c) the evidence relied on must not be merely cumulative or impeaching; (d) it must be material to the issues involved; and (e) it must be such, and of such nature, as that, on a new trial, the newly discovered evidence would probably produce an acquittal.

There was evidence which would have warranted the court in finding the witness incompetent to testify because of his physical and mental condition. The court, however, resolved that conflict in favor of defendants but held that the evidence was to a considerable extent simply corroborative of the testimony given at the trial or was in contradiction to certain testimony given at the trial, that the witness by his own testimony had committed perjury in his testimony before the Grand Jury, that he was under indictment for perjury and in effect that his testimony was not worthy of belief. The findings of the court on this hearing should not be disturbed unless clearly erroneous and we think they are sustained by substantial evidence. In United States v. Johnson, supra, it is said:

"Since we think it important for the orderly administration of criminal justice that findings on conflicting evidence by trial courts on motions for new trial based on newly discovered evidence remain undisturbed except for most extraordinary circumstances, we granted certiorari."

In deciding this motion the court, as was its function, determined that the evidence offered, so far as material, was incredible. After reviewing the evidence presented, the court's conclusions are reflected in the closing paragraphs of its decision, which reads as follows:

"The Court has not attempted to review herein all of Schwimmer's testimony, but it seems evident that, notwithstanding his general denial of any intentional wrongdoing on his part or on the part of Connelly and Caudle as charged in the indictment, his conduct as disclosed by the record speaks far more persuasively in that regard. From the outset it is apparent that, in the Sachs case, he was, in common parlance, the 'fixer.' His approach to the Sachs case was to ingratiate himself with high government officials by any means which would bring about a favorable result for his client. He was not a tax lawyer and knew that he had no defense in the Sachs tax fraud, although for a time he did urge a wholly unsupported contention that there had been a voluntary disclosure. He was the arch conspirator in the scheme and plan condemned by the jury in its verdict against these defendants. He is an admitted perjurer. His motives from the beginning were venal and corrupt. No other explanation can be made for his purchase of the oil royalties for the two top government officials with whom he was dealing. It is simply incredible that the offering of the fragmentary deposition testimony of this discredited witness in support of the defendants' alleged innocence could possibly have the weight and effect of producing an acquittal for these defendants, or either of them. In fact, they would have a far better opportunity to obtain a favorable verdict from a jury without attempting to utilize as a crutch the aid of one whose alignment with them could have no other effect than to poison the minds of a jury against them. I have a strong conviction that the motions for a new trial on the ground of the newly discovered evidence of Schwimmer is merely a vehicle utilized by the defendants to obtain another trial, rather than to use his testimony in their behalf with the expectation that, in light of the present record, it would have sufficient weight with a jury to bring about an acquittal. It seems inconceivable that the additional evidence of the one who spawned the plan and scheme to corrupt government officials could have any weight in producing a verdict other than that which was returned by the jury."

[Decision]

We have not attempted to reproduce the testimony embodied in the deposition of Schwimmer. We have, however, examined it with great care and we are familiar with the record embodying the testimony produced on the trial of this case, having twice reviewed it. From the knowledge thus gained we are of the view that the trial court properly evaluated it and that there was no abuse of its judicial discretion in denying the motion for new trial on the ground of newly discovered evidence. The order appealed from is therefore affirmed.

 

 

 

[66-1 USTC ¶9113] United States of America , Appellee v. Franz Byrd, Defendant-Appellant

(CA-2), U. S. Court of Appeals, 2nd Circuit, Docket No. 29763, 352 F2d 570, 11/16/65, Rev'g and rem'g unreported District Court decision

[1954 Code Sec. 7214(a)(2)]

Crimes: Unlawful acts of revenue agent: Trial: Jury instructions.--A defendant revenue Agent's conviction under a three-count indictment charging bribe-taking under Code Sec. 7214(a)(2) was reversed and remanded for a new trial where the trial judge failed to properly instruct the jury on the relevance of criminal intent to the other factors in the case and to describe it as one of the essential elements of the offense, requiring, as such, proof beyond a reasonable doubt. One dissent.

Robert M. Morgenthau, United States Attorney, John E. Sprizzo, Bernard W. Nussbaum, Assistant United States Attorneys, New York, N. Y., for appellee. Mary M. Kaufman, Andrew R. Tyler, 30 Vessey, New York , N. Y., for defendant-appellant.

Before LUMBARD, Chief Judge, and HAYS and ANDERSON , Circuit Judges.

ANDERSON, Circuit Judge:

From sometime prior to 1962 through February 14, 19 64, when the appellant was suspended, he held a position in the Internal Revenue Service as a tax technician, usually called an office auditor. It was his duty to examine federal income tax returns to see whether or not they accurately reflected the tax liability of the person filing the return. On December 7, 19 64, an indictment in three counts was returned against him. The first count charged that on or about July 12, 19 62, he and co-defendant Jeremiah Ryan, who was also an office auditor in another group within the New York office of the Internal Revenue Service, received a fee, not prescribed by law, from a co-defendant Kaufman, a certified public accountant, for auditing the 1961 income tax returns of Sidney and Carolyn Bell, clients of Kaufman. The second count similarly charged the appellant and co-defendant Lawrence Montello, an office auditor in another group within the New York office of the Internal Revenue Service, with receiving such a fee from Kaufman on or about May 7, 19 62 for auditing the 1961 income tax return of Carlton and Shirley Spark, clients of Kaufman. Count three charged the appellant with receiving a sum of money from an accountant named Albert Goldstein in connection with the auditing of the income tax return of Eugene and Joan MacMillin, who were clients of Goldstein.

At the trial the principal witnesses for the Government were Kaufman, Ryan, Montello and Goldstein, each of whom testified to the transactions referred to in the indictment in which they were involved with the appellant.

Kaufman, after testifying to the appellant's activities in connection with the Bell return in the first count and the Spark return in the second count, also, over objection, testified to an additional almost identical transaction in which the appellant, for a payment to him by Kaufman of $50 audited the 1962 tax return of Herman and Wanda Sandberg, clients of Kaufman.

The defendant Byrd took the stand and testified in his own behalf. He denied ever having any conversation with Kaufman, Ryan, Montello or Goldstein concerning the payment to him of money for the auditing of any of the returns referred to in the indictment and he denied receiving or paying any money from or to Kaufman, Ryan, Montello or Goldstein in connection with the audit of any tax return. The jury returned verdicts of guilty against Byrd on all of the three counts.

On this appeal Byrd claims that the trial court committed plain error in its charge to the jury in failing to include criminal intent as one of the essential elements of the offense alleged in the three counts. There was no exception taken to the court's instructions but the appellant asserts that there were several other mistakes in the charge of sufficient gravity to constitute plain error. We conclude that, in the circumstances of this case, the omission of criminal intent as one of the enumerated essential elements of the offense charged, constituted plain error and that, therefore, the judgment must be reversed and the case remanded for a new trial.

By failing specifically to instruct the jury that criminal intent was an essential element of the offense, the court left what it did say about intent and the act being knowingly committed, unrelated to the other elements of the crime and omitted any instruction that criminal intent was an element which the Government, to convict, was required to prove beyond a reasonable doubt. While it did not define criminal intent as such, it did give one of the generally used definitions of "knowingly" ¹ which in the circumstances of the case would have sufficed, because a finding that one acts knowingly presupposes that he was apprised of all of the facts which constitute the offense.

"Ordinarily one is not guilty of a crime unless he is aware of the existence of all those facts which make his conduct criminal. That awareness is all that is meant by the means rea, the 'criminal intent,' necessary to guilt, . . ."

United States v. Crimmins, 123 F. 2d 271, 272 (2d Cir. 1941).

Examining the charge as a whole, however, this definition stands entirely unrelated to the other essential elements of the crime. What its significance is in the case and how it should be treated by the jury is left to conjecture. The definition of "knowingly" was immediately followed by a substantially correct instruction on the use, for the limited purpose of showing knowledge or intent, of the evidence of the prior similar offense which concerned the Sandberg tax return. ² These portions of the charge were preceded by the instructions concerning proof beyond a reasonable doubt, but nowhere was the jury told that the Government was required to prove criminal intent beyond a reasonable doubt. The general admonition that the Government must prove the defendant guilty beyond a reasonable doubt, and the recitation that the indictment alleged that the acts "performed by this defendant were done unlawfully, knowingly and wilfully" are altogether too tenuous and imprecise to pass as an adequate explanation that criminal intent is an essential element of the offense which must be proven beyond a reasonable doubt. Actually the phrasing of the directions concerning the use of the evidence of the Sandberg incident tended to give to intent an undefined status, separate from the other essential elements. Statements such as "unless you first find that the other evidence in the case standing alone establishes the defendant's guilt beyond a reasonable doubt, then the fact that he committed this other act cannot fill in that blank," "So that you consider the Sandberg return not as proving any of these elements in this case," followed by "You must be satisfied beyond a reasonable doubt that they exist," while intended properly to caution the jury against using the evidence of the Sandberg matter on any element other than criminal intent, really left it to the jury to decide how much importance as a matter of law should be given to the factor of criminal intent and what standard of proof was required for it.

Even so, the court's treatment of the issue might have survived the test of plain error, Rule 52(b) F. R. Crim. P., except for its specific delineation of the essential elements of the offense.

The instructions which bore on intent came in the early part of the charge. Thereafter the court gave fairly full explanations of types of evidence, rulings on evidence, evaluation of testimony, an analysis of Government and defense evidence, the definition of accompliance and the cautionary remarks on dealing with accomplices' testimony, a reading of the applicable statute and comments on the three counts of the indictment. Then toward the end of the charge the court specified the essential elements of each of the offenses charged as follows:

"1. That the defendant was an employee of the United States .

2. That he was acting in connection with the revenue laws of the United States .

3. That he received a fee not prescribed by law.

4. That he received a fee for the performance of a duty."

It briefly mentioned how the jury should handle the separate counts and then said,

"Now, if you find, after such examination, that the government has proven all the four elements which I have just described to you beyond a reasonable doubt as to any of these counts, then he should be convicted on that count."

Thus in the very climax of the charge the court in short explicit terms gave the jury what they would naturally regard as the nub of the law of the case and which, coming at the end of the exposition of the law, gave them what they were most likely to hold in their minds and apply to the facts in their deliberations, and which, not only completely omitted criminal intent as an essential element but, specifically told the jury that, if they found the other four elements which were mentioned, they had a duty to convict.

Byrd made no special attack on the element of intent, for he denied accepting any bribes. The jury disbelieved him. But to sustain a conviction the Government had to prove and the jury had to find criminal intent. It was an unavoidable issue in the case.

We conclude that the court's failure to explain the relevance of criminal intent to the other factors in the case and to describe it as one of the essential elements of the offense, requiring, as such, proof beyond a reasonable doubt, was tantamount to no instruction at all on the subject. There was, therefore, plain error which requires reversal even though no exception was taken below to the charge as given. Screws v. United States, 325 U. S. 91, 107 (1945); United States v. Gillilan, 288 F. 2d 796 (2d Cir.), cert. denied sub nom. Apex Distributing Co., Inc. v. United States, 368 U. S. 821 (1961); United States v. Noble, 155 F. 2d 315 (3rd Cir. 1946).

In view of this disposition of the case we do not specifically rule upon the remaining points raised in the appeal except to comment on two or three of the issues raised, as a guide to the court at the second trial.

One of these points concerns the admission by the trial court of evidence of Byrd's activities in connection with the auditing of the Sandberg tax return. The Government offered it as a part of its main case for the purpose of showing criminal intent. A vigorous objection was made by the defense but the court admitted it. The admissibility of this kind of evidence is "a matter in which the trial judge should be allowed a wide range of discretion." United States v. Feldman, 136 F. 2d 394, 399. The exercise of discretion must be addressed to a balancing of the probative value of the proffered evidence, on the one hand, against its prejudicial character, on the other. The probative value is measured by the extent to which the evidence of prior criminal activities, other than a conviction, closely related in time and subject matter, tends to establish that the accused committed the criminal act charged in the indictment knowingly or with criminal intent or tends to negative the claim that the acts were committed innocently or through mistake or misunderstanding.

It is generally recognized that there can be no complete assurance that the jury even under the best of instructions will strictly confine the use of this kind of evidence to the issue of knowledge and intent and wholly put out of their minds the implication that the accused, having committed the prior similar criminal act, probably committed the one with which he is actually charged. The court in its colloquy with defense counsel conceded that prejudice of this sort would result to Byrd in letting in the evidence.

From the quality of proof standpoint for proving knowledge and intent, its probative value was largely cumulative. The evidence came from the mouth of the same witness, Kaufman, who testified to the occurrences in the first two counts. If the jury believed his testimony as to those counts, the relating of the Sandberg incident added little, if anything, to a revelation of Byrd's state of mind. If they had disbelieved Kaufman's testimony about the first two counts, it is not very likely they would have believed his story about the Sandberg tax audit.

Another factor to be considered is whether the Government was faced with a real necessity which required it to offer the evidence in its main case. The defense had not, either in its claims or the statement of facts which it would seek to prove, "sharpened" the issue of intent by asserting that the act charged was done innocently or by accident or mistake. McCormick, Evidence, §157 at 331 (1954); Vol. 1 Wharton's Criminal Evidence, §237 at 528 (12th ed. 1955). Nor did the Government suffer from a lack of evidence of intent. Kafman's testimony relating to the first two counts furnished ample evidence of knowledge and intent, of the same kind and quality as that shown by his testimony concerning the Sandberg tax return. There was therefore no pressing necessity that evidence of that prior occasion be offered on the Government's main case. United States v. Ross, 321 F. 2d 61, 67 (2d Cir. 1963). It is, of course, conceivable that in some cases proof of the offenses charged would contain little or nothing from which an inference of guilty intent could be drawn. In such a case a trial judge would, in the exercise of his discretion, be justified in admitting as part of the Government's case, proof of a prior similar offense to show knowledge or intent. For the present purpose of this discussion it is enough to point out that the scope of discretion does not include every offer of a prior similar offense which may contribute something to a showing of intent in the Government's main case. Where the prejudice is substantial and the probative value, through the nature of the evidence or the lack of any real necessity for it, is slight, its admission at that stage may be held to be an abuse of discretion. Under such circumstances the better practice would be to sustain the objection to the offer on the Government's main case without prejudice to its re-offer in rebuttal, if then warranted.

Another point raised concerning the court's charge is that, in the course of instructing the jury on the meaning and application of reasonable doubt, the court gave as one of the alternative definitions the following:

"It is a doubt to a moral certainty."

"Doubt" and "certainty" are antithetical and, in our opinion, the use of them in this manner and for this purpose would tend to create more confusion than light in the minds of the jury.

The appellant also complains that in the charge the court defined an accomplice as "one who unites with another person to commit a crime" and then went on to charge the jury as a matter of law that Ryan, Montello, Kaufman and Goldstein were accomplices. He asserts that this was particularly damaging in connection with the third count because the appellant was the only person alleged to have participated in that offense other than Goldstein. He argues that the judge's statements were therefore the equivalent of a directed verdict of guilty against him. Although it is not very likely that any such conclusion was reached by either the court or any of the members of the jury, nevertheless, the instructions on accomplice witnesses could have been so couched as to obviate this problem. A somewhat similar situation arose in the case of United States v. Johnson, 343 F. 2d 5 (2d Cir. 1965), and was the subject of a point raised on appeal, but the court found that no error had been committed. It should be stated, however, that the context of the accomplice instructions in Johnson made the possible implication less damaging to the defendant; and the record in Johnson indicates that there were others besides the particular accused with whom the accomplice could have been associated.

The only remaining point raised on appeal which we shall mention concerns the court's instruction to the jury regarding Title 18 U. S. C. §2, known as the "aider and abettor" statute. As the nature of the Government's case against Byrd, in the charges contained in the first and second counts, placed Byrd in the role of one who was either aiding and abetting, or causing, office auditors Jeremiah Ryan and Lawrence Montello to receive fees for the performances of their respective duties, the court should have given the jury a fuller explanation on aider and abettor and the applicability of the provisions of the statute to the issues in the case. They needed something more than a mere reading of the statute. There were no exceptions to the court's charge and what has been said about reasonable doubt, the accomplice's testimony and the application of the aider and abettor statute do not constitute plain error. However, at retrial both the points discussed and those not commented upon, if they again arise, warrant consideration by the trial court.

The judgment of the district court is reversed and the case is remanded for a new trial.

¹ "Now, the word 'knowingly,' as used in the indictment, means that the act or acts which were committed by the defendant were done voluntarily and purposely, not because of a mistake or inadvertence or in good faith.

Now, the knowledge may be proven by the defendant's conduct and by all the facts and circumstances surrounding the case.

No person can intentionally avoid knowledge by closing his eyes to facts which prompt him to investigate.

In order to find knowledge on his part, however, you must find an awareness on his part that the act he is committing is in violation of the law, and in this case, as I have indicated to you, it is this federal law."

The instruction that the jury must find that the defendant, in committing the act was aware that he was breaking the law was incorrect and over-generous to the defendant. American Surety Co. v. Sullivan, 7 F. 2d 605, 606 (2d Cir. 1925).

² "Now, evidence that that act was done at one time is not proof that a similar act was done at another time or occasion. That is to say, evidence that the defendant committed another act of a like nature may not be considered by you in determining whether the accused committed any offense charged in the indictment, nor may any evidence of an alleged other act of a like nature be considered by you for that purpose. Unless you first find that the other evidence in the case standing alone establishes the defendant's guilt beyond a reasonable doubt, then the fact that he committed this other act cannot fill in that blank. If you find that he did beyond a reasonable doubt, then, of course, it will help you.

If you find beyond a reasonable doubt from the other evidence in the case that the accused did the act charged in the particular count under deliberation, then you may consider the evidence of the alleged other act of a like nature in determining the state of mind or intent with which the accused did the act charged in the particular count, and where proof of the alleged other act of a like nature--and I am talking about the Sandberg return, which is not in the count--is established by evidence which is clear and conclusive to you, you may draw therefrom the inference that in doing the act charged in the particular count under deliberation, the accused acted knowingly and with a specific intent and not because of a mistake or inadvertence or other innocent reason. So that you consider the Sandberg return not as proving any of these elements in this case.

You must be satisfied beyond a reasonable doubt that they exist, but if you come to that conclusion, then you may consider the Sandberg incident to indicate that he had the intention of violating the law, that he just didn't make a mistake."

[Dissenting Opinion]

LUMBARD, Chief Judge (dissenting).

In my opinion, the failure of the trial judge to include an instruction on the necessity of finding criminal intent in the list of essential elements which the jury was directed to find before it could convict does not call for reversal because he had already given sufficient general instructions on the question of intent and because the conduct of the defense had effectively eliminated the issue of intent from the case.

During his charge Judge Cannella instructed the jury that the acts must have been done purposely and not be mistake, inadvertence, or in good faith; indeed he said that an awareness by the defendant that the act committed was in violation of the law was necessary. The defense made no objection whatever to the charge. Although it would have been desirable to have included intent in the summation of the essential elements necessary for conviction at the end of the charge, in view of the fact that the issue of intent was never raised during the trial, it was not necessary to stress it by repetition. From a reading of the whole charge, I think it was apparent that intent was an element to be proven by the government.

More importantly, Byrd cannot claim he was prejudiced by the absence of a charge concerning intent when there was no issue of intent in the case. Byrd's entire defense was that he did not receive the alleged bribes. Byrd flatly denied that he had ever received or been given any money by Kaufman or Goldstein. Thus there could never have been any question of the intent if the jury believed the testimony of the prosecution witnesses, or if they disbelieved them and believed Byrd. There was no issue of intent for the jury to consider. In the absence of any objection to the charge as it was given, I see no reason to invoke our power under Rule 52(b) Federal Rules of Criminal Procedure when the error concerned a matter which had not been in contention at any time during the trial.

Nothing in Screws v. United States, 325 U. S. 91 (1945) or United States v. Gillian, 288 F. 2d 796 (2 Cir.), cert. denied sub nom. Apex Distributing Co., Inc. v. United States, 368 U. S. 821 (1961) suggests the contrary is required. In Screws the narrower instructions were considered necessary in order to preserve the constitutionality of the statute. There is no indication that the instructions were not objected to in Gillilan, supra, and it is apparent that any concerned issues which were contested during the trial. United States v. Noble, 155 F. 2d 315 (3 Cir. 1946), cited by the majority, is also inapposite since the trial judge there had given no oral instructions whatever about the elements of the crime charged.

It seems to me highly undesirable for us to allow counsel to urge as error on appeal matters about which no complaint was made at the time. Moreover, I do not see how it can fairly be claimed that failure to stress what was understood should now be considered by us to be reversible error requiring a new trial.

I agree with so much of the majority's opinion which holds that evidence concerning defendant's commission of similar acts at other times should not ordinarily be admitted unless the question of intent is in dispute. In the circumstances of this case, therefore, the testimony concerning Sandberg's tax return should not have been admitted on the government's direct case. But because the evidence on that matter was largely cumulative and offered by a witness who, if believed on that matter, would doubtless also have been believed by the jury on the similar acts under indictment, we should not hold the admission of the evidence to be reversible error.

I would affirm.

 

 

 

 

[66-1 USTC ¶9134] United States of America , Appellee v. Eugene Kenner, Appellant

(CA-2), U. S. Court of Appeals, 2d Circuit, Docket No. 29760, 354 F2d 780, 12/15/65, Aff'g unreported District Court decision

[1954 Code Sec. 7214(a)(2)]

Crimes: Tax evasion: Bribery of revenue agents: Aiding and abetting the taking of bribes.--Various assignments of error were overruled by the Court of Appeals, and the conviction of a certified public accountant on two counts of bribery and five counts of aiding and abetting certain defendant revenue agents under Code Sec. 7214(a)(2) in the taking of bribes was affirmed.

Robert M. Morgenthau, United States Attorney, Hugh C. Humphreys, Pierre N. Leval, Assistant United States Attorneys New York, N. Y., for appellee. James A. Cuddihy, John A. Keeffe, Havens, Wandless, Stitt & Tighe, 60 E. 42nd St., New York, N. Y., Herbert J. Korbel, 120 Broadway, New York, N. Y., for appellant.

Before WATERMAN, HAYS and ANDERSON , Circuit Judges.

HAYS, Circuit Judge:

Kenner appeals from a judgment of conviction entered upon a jury verdict finding him guilty of violating 18 U. S. C. §201(f) (two counts) and of aiding and abetting (18 U. S. C. §2(a)) violations of 26 U. S. C. §7214(a)(2) ¹ (five counts). Kenner was sentenced to imprisonment of one year on each of the seven counts on which he was convicted, the sentences to run concurrently.

The offenses of which Kenner was convicted consisted essentially of bribery of employees of the Internal Revenue Service. Kenner was a certified public accountant who prepared income tax returns for his clients and represented these clients when their returns were audited by the Service. His criminal activities, as pictured by the government's evidence, all followed a single pattern with only slight variations in individual cases.

Kenner would suggest to an auditor in the office audit division of the Internal Revenue Service in New York that he, the auditor, "pull" for audit X's tax return, X being one of Kenner's clients. This procedure was in itself irregular, since returns were ordinarily assigned to the individual auditors by the group supervisor. Kenner would then propose to the auditor an amount of deduction for business expenses, travel, entertainment, medical expenses or the like which should be disallowed. The auditor, without examining the merits of the proposed amount (or the substantiation for the amounts claimed) would make up his report disallowing the amount which Kenner had suggested. Kenner would then by prearrangement meet the auditor at some place outside the audit division's offices and, usually in a surreptitious manner, give him fifty or seventy-five dollars.

Appellant advances a number of claims of error in the proceedings of the district court. Finding that there was no error sufficiently prejudicial to call for reversal of the conviction, we affirm.

We shall examine appellant's contentions seriatim.

1. The Allen charge

After deliberating for three hours and forty-five minutes the jury sent out a message stating that it was "hopelessly deadlocked." The judge thereupon, over defendant's objection, read to the jury a passage, slightly modified, from the opinion in Allen v. United States, 164 U. S. 492, 501-02 (1896). ²

This court has in the past approved the Allen charge in certain circumstances. United States v. Tolub, 309 F. 2d 286 (2d Cir. 1962); United States v. Curcio [60-2 USTC ¶9514], 279 F. 2d 681 (2d Cir.), cert. denied, 364 U. S. 824 (1960); United States v. Kahaner, 317 F. 2d 459, 484 n. 18 (2d Cir.), cert. denied, 375 U. S. 835 (1963). However, in all of these cases, as well as in United States v. Thomas, 282 F. 2d 191 (2d Cir. 1960), which is also cited by the government, the effect of reading to the jury that part of the Allen opinion which Judge Murphy read was mitigated by the assurance in some form that a juror was not expected, in deference to the other jurors, to abandon his conscientious convictions.

In United States v. Tolub, which the government says quoted exactly that portion of the Supreme Court's opinion quoted by Judge Murphy, the Judge added immediately after the quotation:

"Remember at all times that no juror is expected to yield a conscientious conviction he or she may have as to the weight or effect of evidence, but remember also that after full deliberation and consideration of all the evidence, it is your duty to agree upon the verdict, if you can do so, without violating your individual judgment and conscience."

In United States v. Kahaner, supra at 483-4, Judge Friendly said:

"[The trial judge said in his charge] 'It is desirable if a verdict can be reached that this be done both from the viewpoint of the defendants and the Government', but that this was true only if the verdict 'reflects the conscientious judgment of each juror and under no circumstance must any juror yield his conscientious judgment.' . . .

`It has been a long trial and a trial, as I say, where I am satisfied each side prefers finality of judgment if it can be obtained on the basis of a conscientious reflection of each juror's final vote.' Exceptions of defense counsel were overruled and a motion for a mistrial denied; however, the judge recalled the jury and again emphasized, in a variety of ways, that 'if any individual juror still retains a conscientious view that differs from that of other jurors, * * * you are not to yield your judgment'; 'you are not to yield your judgment simply because you may be outnumbered or outweighed,' etc. . . .

"This recital of the facts suffices almost without more to dispose of the characterization, made by one of the appellants, that 'The jury was being coerced by being subjected, in these circumstances, on two separate occasions to the "dynamite" Allen charge.' On the contrary, if the charge is to be given at all, we do not see how this could be done with less tendency to coercion or more emphasis on the need for conscientious individual agreement than in the way Judge Weinfeld did it."

In United States v. Curcio, the trial court read to the jury that part of the Allen opinion which states "that it was their duty to decide the case if they could conscientiously do so."

In United States v. Thomas, the judge said in his charge:

"Your verdict, of course, must be the verdict of each individual juror and not a mere acquiescence in the conclusion of his fellows. . . ."

"It is your duty to decide the case, if you can do so conscientiously."

In the present case the only thing the judge added to the part of the Allen opinion which he read to the jury was the following:

"I am going to suggest that you think about that and go back and try again. You know, what we all try to achieve is unanimity in these cases. I hope that you can do it. I don't mean by reading this charge to coerce some juror who feels that he or she is of this opinion or that but certainly the advice of the Supreme Court should be heeded.

It may be that you can agree on some of the counts and not on others, but whatever is the ultimate decision we will accept it.

I am going to ask you to go back and try again, and if you can't agree, that is it, we have to quit.

So will you please go back and try again?"

We have had grave doubt as to whether the charge thus given was not unduly coercive. We have concluded that the case is saved from reversal by the barest margin, the margin provided in these circumstances and in this context by the judge's disclaimer of intention to "coerce" and by his expression of willingness to accept "the ultimate decision," whatever it might be. ³

2. The Jencks Act material

When summations were about to begin on the morning of the day after both sides had rested, defense counsel asked permission to examine one of the government's witnesses to ascertain whether there was material in addition to that already provided, to which defendant would be entitled under the Jencks Act (18 U. S. C. §3500). The court denied the application. After verdict appellant renewed his application, and it was again denied. ⁴ Whether or not to permit the case to be reopened for further proceedings was within the discretion of the court. The facts here show no abuse of discretion. See United States v. Sheba Bracelets, 248 F. 2d 134 (2d Cir.), cert. denied, 355 U. S. 904 (1957).

3. Concurrent sentences

The remaining contentions of defendant involve 18 U. S. C. §201(f), which is relevant to two of the counts, and 26 U. S. C. §7214(a)(2), which applies to the other five counts on which the appellant was convicted. Since the appellant was sentenced to one year's imprisonment on each of the seven counts, all sentences to run concurrently, this court must affirm if it finds that conviction was warranted on any one count. Lawn v. United States [58-1 USTC ¶9189], 355 U. S. 339, 359, 362 (1958); United States v. Houlihan, 332 F. 2d 8, 13-14 (2d Cir.), cert. denied, 379 U. S. 828 (1964).

4. 18 U. S. C. §201(f)

Appellant claims that Section 201(f) is "unconstitutionally vague." The section has recently been upheld by this Court against an attack on the ground of vagueness. United States v. Irwin, -- F. 2d -- (2d Cir. 1965). It is sufficient to say here that the statute is entirely clear as applied to the conduct with which appellant was charged, whatever its ambit with respect to other matters not involved in the present case.

"[O]ne to whom application of a statute is constitutional will not be heard to attack the statute on the ground that impliedly it might also be taken as applying to other persons or other situations in which its application might be unconstitutional." United States v. Raines, 362 U. S. 17, 21 (1960).

Appellant's contention that the evidence failed to establish that the money given to the auditor by appellant was given "for or because of" an official act borders on the frivolous. After arranging for the phony audits, appellant told the auditor that he would contact him. When he did so he surreptitiously delivered an amount which would equal fifty dollars for each such audit. Far from being insufficient the evidence leaves no room for any other conclusion than that the payments were made for the pretended audits. See United States v. Lev, 258 F. 2d 9 (2d Cir.), aff'd by an equally divided Court, 360 U. S. 470, petition for rehearing denied, 361 U. S. 856 (1959).

Appellant contends that it was error for the judge to fail to charge that in order to convict under Section 201(f) corrupt intent to influence must be found. Examination of Section 201 shows that, although proof of corrupt intent is required for conviction under Subsections (b), (c), (d) and (e), for violation of which the prescribed penalties are much more severe, conviction under Subsection (f) requires only proof that the payment was made "for or because of" the performance of an official act. In any event the appellant is not in any position to raise the point since in the trial court he failed to object to the charge on this ground. United States v. Rinaldi, 301 F. 2d 576, 578 (2d Cir. 1962).

5. 26 U. S. C. §7214(a)(2)

Appellant was found guilty under 18 U. S. C. §2 by aiding and abetting certain other defendants in violating 26 U. S. C. §7214(a)(2). He argues that this was error because the acts which he was charged with aiding and abetting were not violations of §7214(a)(2).

Appellant's argument is based, first, upon the language of §7214(a)(2) which prohibits the receipt by an officer or employee of a "fee, compensation, or reward, except as by law prescribed, for the performance of any duty." The sums which appellant was charged with paying were not, he says, a fee, compensation or reward, but a "gratuity." We hold that the language of §7214(a)(2) is sufficiently broad to include the payments made by appellant.

Appellant's contention that §7214(a)(2) is "a historical vestige, reenacted through apparent oversight" is negatived by the fact that when Section 7214(a) was reenacted in 1954 its language "any officer or agent appointed or acting under the authority of any revenue law of the United States," was broadened to cover "any officer or employee of the United States acting in connection with any revenue law of the United States."

The presence in §7214(a)(2) of penalty provisions which would be inappropriate in their application to defendant (e.g. dismissal from office) does not preclude the applicability to that Section of the aiding and abetting statute. The legislative history of the 1951 amendment to 18 U. S. C. §2 shows that Congress intended that statute to apply to situations in which the "principal" is, for example, an officer or employee of the United States and therefore subject to penalties, such as removal from office, which would be irrelevant to the situation of the person charged with aiding and abetting. See 1951 U. S. Cong. and Adm. Serv. 2583.

Contrary to appellant's contention, a payor of a bribe can be an aider and abettor under 18 U. S. C. §2. May v. United States , 175 F. 2d 994 (D. C. Cir.), cert. denied, 338 U. S. 830 (1949). See United States v. Johnson, 337 F. 2d 180, 196 (4th Cir. 1964), cert. granted, 379 U. S. 988 (1965); United States v. Fromen, 265 F. 2d 702, 705 (2d Cir.), cert. denied, 360 U. S. 909 (1959).

Appellant claims that the charges contained in two of the counts on which he was convicted were barred by the running of the statute of limitations. Appellant first raised this defense after trial by a motion to correct an illegal sentence. The defense of the statute of limitations must be raised before or during the trial. "If this is not done and a verdict of guilty is rendered, sentence may be lawfully imposed." Askins v. United States , 251 F. 2d 909, 913 (D. C. Cir. 1958). See also United States v. Taylor, 207 F. 2d 437 (2d Cir. 1953).

We find no error which requires reversal of the conviction.

Affirmed.

¹ These statutes provide in relevant part:

18 U. S. C. §201(f):

§201. Bribery of public officials and witnesses. Whoever, otherwise than as provided by law for the proper discharge of official duty, directly or indirectly gives, offers, or promises anything of value to any public official, former public official, or person selected to be a public official, for or because of any official act performed or to be performed by such public official, former public official, or person selected to be a public official.

shall be fined not more than $10,000 or imprisoned for not more than two years, or both.

18 U. S. C. §2(a):

§2. Principals.

(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.

26 U. S. C. §7214(a):

§7214. Offenses by officers and employees of the United States .

(a) Unlawful acts of revenue officers or agents. Any officer or employee of the United States acting in connection with any revenue law of the United States--

* * *

(2) who knowingly demands other or greater sums than are authorized by law, or receives any fee, compensation, or reward, except as by law prescribed, for the performance of any duty;

* * *

shall be dismissed from office or discharged from employment and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than 5 years, or both. The court may in its discretion award out of the fine so imposed an amount, not in excess of one-half thereof, for the use of the informer, if any, who shall be ascertained by the judgment of the court. The court also shall render judgment against the said officer or employee for the amount of damages sustained in favor of the party injured, to be collected by execution.

² "While, undoubtedly, the verdict of the jury should represent the opinion of each individual juror, it by no means follows that opinions may not be changed by conference in the jury-room. The very object of the jury system is to secure unanimity by a comparison of views, and by arguments among the jurors themselves. It certainly cannot be the law that each juror should not listen with deference to arguments and with a distrust of his own view, his own judgment, if he finds a large majority of the jury taking a different view of the case from what he does himself. It cannot be that each juror should go to the jury-room with a blind determination that the verdict shall represent his opinion of the case at that moment; or, that he should close his ears to the arguments of men who are equally honest and equally intelligent as himself."

³ We have not considered the affidavit of one of the jurors which was submitted by the defendant to support his allegation of coercion. Stein v. New York , 346 U. S. 156, 178 (1953), overruled in part by Jackson v. Denno, 378 U. S. 368, 391 (1964); United States v. Crosby, 294 F. 2d 928, 949-50 (2d Cir.), cert. denied, sub nom. Mittleman v. United States, 368 U. S. 984 (1962).

⁴ The government and the witness whose testimony was sought filed affidavits denying that there was any additional material. In the absence of any evidence to the contrary it was not error for the court to refuse the requested voir dire.

 

 

 

[66-2 USTC ¶9759] United States of America , Appellee v. Sam Umans, Appellant

(CA-2), U. S. Court of Appeals, 2nd Circuit, Docket No. 30168, 368 F2d 725, 10/27/66, Affirming an unreported District Court opinion

[1954 Code Sec. 7214(a)(2) and 18 U. S. C. 201]

Crimes: Bribery of Internal Revenue Service agents: Conviction.--The taxpayer's conviction on 21 counts for aiding and abetting Internal Revenue Service agents in receiving illegal compensation for the performance of their duties and for offering bribes to such agents was upheld. However, three counts were vacated because they covered lesser offenses which were already included in other counts on which the taxpayer had been convicted and for which concurrent sentences had been imposed.

Robert M. Morgenthau, United States Attorney, John S. Allee, Michael W. Mitchell, Bernard W. Nussbaum, Assistant United States Attorneys, New York, N. Y., for appellee. Edward Brodsky, 655 Madison Ave., New York, N. Y., William Esbitt, 122 E. 42nd., New York, N. Y., for appellant.

Before LUMBARD, Chief Judge, WATERMAN and ANDERSON, Circuit Judges.

[Taxpayer's Conviction on 24 Counts]

WATERMAN, Circuit Judge:

Certain taxpayers took deductions on income tax returns for items of travel, entertainment, and the like, in excess of sums that could be substantiated. Appellant, a certified public accountant, then entered into arrangements with auditing employees of the Internal Revenue Service by which appellant made surreptitious cash payments to the employees and, upon audit, the employees disallowed a lesser portion of the deductions than should have been disallowed. Appellant was named a defendant in 24 counts of a 27 count indictment. In nine of these counts he was charged with aiding and abetting codefendants, Internal Revenue Service agents, in receiving illegal fees, compensations and rewards for the performance of their duties, in violation of 26 U. S. C. §7214(a)(2) and 18 U. S. C. §2; in three with giving money to various codefendant Internal Revenue Service agents during the year 1963, in violation of 18 U. S. C. §201(f); in nine other counts with giving money to the various agents with intent to influence their official acts during the years 1961 and 1962, in violation of 18 U. S. C. §201; and in three other counts, which set forth the same acts that allegedly violated 18 U. S. C. §201(f), with corruptly giving money to various agents of the Internal Revenue Service with intent to influence their official acts during the year 1963, in violation of 18 U. S. C. §201(b). After a jury trial in the United States District Court for the Southern District of New York, Murphy, J., he was convicted on all 24 counts and sentenced to two years' imprisonment on each count, the sentences to run concurrently.

[Issues on Appeal]

Eight issues have been presented for appellate consideration.

First, appellant maintains that the trial court committed prejudicial error when it did not instruct the jury that in order to convict appellant on the nine counts charging the aiding and abetting of violations of 26 U. S. C. §7214(a)(2) one of the elements of the crimes necessary to be proved was criminal intent. It is not entirely clear whether appellant is maintaining that the charge was deficient as to appellant's intent to aid and abet or that it was deficient relative to the Internal Revenue Service agents' intent to commit the crime. But we note that no objection as to either was made to the charge as given, and no request for a further charge as to anyone's intent was made to the trial court before the jury retired. Therefore, unless there was a charge so deficient that we must consider it to be "plain error" no objection to the charge will be here countenanced. See Fred. R. Crim. P. 30, 52(b).

With reference to Umans's intent to aid and abet the commission of the nine crimes, the charge given was proper. It followed the standard laid down in Nye & Nissen v. United States, 336 U. S. 613, 619 (1949) quoting L. Hand, J., in United States v. Peoni, 100 F. 2d 401, 402 (2 Cir. 1938) that the defendant "in some sort associate himself with the venture, that he participate in it as something he wishes to bring about, that he seek by his action to make it succeed." Further, the jury convicted Umans on other counts that involved the same incidents, and as to those counts the jury was instructed that to find him guilty he must have made the payments with "an intent on the part of the defendant to corruptly influence the employee as to the audit then pending before him." Under these circumstances, we find no inadequacy in the charge as to the need of proof of Umans's intent to aid and abet.

[Omission Not Prejudicial]

The trial court's charge did not include any instructions that proof of the criminal intent of Internal Revenue Service agents to commit the crimes they committed in violation of 26 U. S. C. §7214(a)(2) was necessary in order to convict Umans of having committed the crimes he was charged with having committed in aid thereof. This was error, as one's criminal intent is a necessary element of the proof required to convict under that statute. In United States v. Byrd [66-1 USTC ¶9113], 352 F. 2d 570, 572 (2 Cir. 1965) such an omission in a charge was held by this court to be plain error requiring reversal of a conviction despite the absence of an objection at trial. It is also a necessary element of the proof needed to convict one who aids and abets a violation. See United States v. Jones, 308 F. 2d 26, 32 (2 Cir. 1962).

We do not consider the omission here, however, sufficiently prejudicial, in the absence of an objection at trial, to require reversal of Umans's convictions on these counts. The agents whose criminal acts Umans was charged with aiding and abetting were prosecuted together with him in the same indictment with him, prior to Umans's trial had pleaded guilty to having committed the crimes, had testified for the Government at Umans's trial, and had admitted their guilt on the stand in the jury's presence. The jury knew the agents had the required criminal intent from the agent's own testimony.

[Lesser Offenses Involved]

Appellant next claims that, as he had been convicted for committing the same criminal acts under 18 U. S. C. §201(b) on the one hand, and, on the other, under §201(f), and had also been convicted for the same criminal acts on the one hand under 26 U. S. C. §7214(a)(2), and, on the other, under 18 U. S. C. §201, he had been, in both instances, convicted of having committed mutually inconsistent crimes.

It appears that in both claimed inconsistent instances one of the two statutes requires proof of an extra element to convict, a specific intent to influence official action, while the other statute only requires proof that payment was made to an agent in a situation where no payment was necessary. ¹ There are no contradictory elements of required proof between the two statutes; only additional elements of proof.

Moreover, there is no merit to appellant's contention that counts under §201(f) charge appellant with paying the agents "properly" to perform their duties; the section makes it criminal to pay an official a sum which he is not entitled to receive regardless of the intent of either payor or payee with respect to the payment. United States v. Irwin, 354 F. 2d 192, 198 (2 Cir. 1965), cert. denied, 383 U. S. 967 (1966). Therefore, the correct relationship between §201(b) and §201(f) is that §201(f) is a lesser included offense of §201(b). There is no reason to believe that Congress intended that there should be concurrent convictions and sentences under both sections, and we should not allow multiple convictions based on the same transactions even where the sentences are concurrent. The sentences on the lesser §201(f) counts therefore are vacated. This will have no effect upon appellant's term of imprisonment because the vacated sentences are concurrent with those remaining in force.