Petition for Writ of Certiorari — Proner v. United States

FILED

LIESRAICY

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‘SUPREME COUR™ ed | x FEB’ 5 4969

@ | JOHN F. DAWS, @LERK .

ae ’ IN THE is = |

| Supreme Court of the United States

October “Berm, 1968 ; ’

No. 102 ° |

- WILLIAM PRONER, . . 4

| nes Petitioner,

yy,

UNITED STATES OF AMERICA,

3 : Respondent.

ag ~~~ pETITION FOR A WRIT OF CERTIORARI TO THE ~

UNITED STATES COURT OF APPEALS oa.

_FOR THE SECOND CIRCUIT — an :

Harris B. STEINBERG

Attorney for Petitioner

25 Broad Street

New York, New York 10004

Harris B. STEINBERG

S§tranuey 8. ARKIN

Of Counsel

bE mores od Sons OE BREE Sere ave ves 2 TREK Bea

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TABLE OF CONTENTS

; PAGE

CrrationsSijo OPINIONS BELOW ..............00-5 siamese a

JURISDICTION eS canicaah cap selonnpyenesasipsaceshniand aa sasteb panel 20

‘s ee PRESENTED a eer lara weace aclauisnciaiieienaiaes 2

Coxstrruttonat PROVISIONS AND , Srarures INVOLVED .. 3

STATEMENT,OF THE CASE .............. ‘icdaalesions seine 4

II onside sssesissecnsnisscnsasasinernnncineenrennnseiicada pore 4

‘The Evidence .................... Fe RN ce SR ONE 4

The Prosecutor’s Summation ...............0.0.0 ne a.

SE IIE xa damatiecenicinnaoenane ss sctd lies aaa canMaalto ee

Re BI se eccoccemeton ahid sineiateni paca 8

- Reasons FoR GRANTING THE WRIT @0.00..00..000.000005 aie 10 -

This Court has set down for argument a case in ee

which, a question identical to one presented’ —

by this petition will be Oe ae

The concurrent sentence doctrine enunciated. in

Hirabayashi v. United States and subsequent .

cases has and will continue to deprive peti- _

tioner of his constitutional right to due proc- ~

ess and is an unsound rule of appellate re-

view which should be corrected ........................ 11

The Court of Appeals’ determination that the

jury’s verdict on Counts. 2 and 3 was not

affected by evidence challenged by petitioner

as insufficient violates this Court’s ee

in Stromberg v. United States and Yates v:

United States sii aisenbienspenninpaaneiovesiaanenenniinn cen “44 | i

% AR ibis dR HE te

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ann a SRP SAO ate aA ee RT ER art

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my)

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an 1s ae PAGE _

Petitioner=was deprived of his right to confron-

tation by the prosecutor’s, vouching- for the . |

credibility of his chief witness i in his summa-

EE epee Dalai ecient choca sensi 16

“Conctuston EERE Cae Ms AIO LEC EDE YN OT CONTEST Ree Re PORE 17

: Arrenpicrs |

A—Opinion of the Court of Appeals liaison Fonatioas la

B—Judgment of the Court of Appeals Entered

GY i Ya

C—Exhibit 44 0. rane Pinaceae 1. lla

TABLE OF AUTHORITIES |

Cases: .

Amos v. eeialietaaee of Internal Revenwe, 360 F.2d

358 (4th Cir. 1965)... dee sedis dete <n kd, 12

Armstrong’ v., United on 354 F.2d 274. — ‘Claims

1965) ie tessteeeeeeedhgaessessesnsnsieiseeesessseteessemaneccssnee LY

Baker v. State, 3 Md. prothe 951 (1968) ....... EScraae (a

Benton v. Maryland, Docket: No. 201 20 10, 11

Berger v. United States, 295 U.S.°78 (1934) eres) 16

Bollenbach v. United States, 326 U.S. 607 (1946)........ 14

Bruton v. United States, 391 U.S. 123 (1968) ooo. 12,15

Emich Motors Corp. v. General Motors Corp., 340 US. Peat

558 (1951) ........ CIAO ORM Se SOE Ie eee Ree ee 12 ~

Hartman v. United States, 215 F.2d 886 (8th Cir.

1954) :........ ieee eed dink aceite ote ted cae 12, 16

menragvn v. United States, 320 U. S. 81 ( wee tae “1

Jackson v. Denno, 378 U.S. 368 I ois sctwhnsnsa\snahbcnien 12, 15

——

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Penk Ee LS +S hae ce Lac aa ee DU dent Ores aml Seco AS HR ma aa cae iis i aio SBE ee om

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Local 167 I.B.. v.-United States, 291 U.S. 293 (1934) 12

Moore v. United States, 360 F.2d 353 (ath | Cir. 1965),

cert., denied, 385 0. S. 1001. a aias smeinisipsnnsxses RO

- Pointer v, Texas, 380 U.S. 400 (1965) . Ea RO 16

” “gmith v. United States, 993 F.2d 750 (5th Cir. 1955) 13

| Stromberg v- California, 283 U.S. 359 (1931) ................ 14

Tomlinson v: LefkowitS, 334. F.2d 262 (5th Cir. 1964),

- cert. denied, 379 U.S. 962 (1965) 0.0.0... es 11

Townsend v. Burke, 334 U.S..736 (1948) 20.0.0. 12

United States v. Barash, 365 F.2d 395 (2d Cir. 1966) ..12, 16

United States v. Kelly, 349 F.2d 720 (2d Cir. 1965),

cert. denied, 384 U.S. 947, (1966) 0.0.0... 12, 16

United States v. Long, 257 F.2d 340 (3d Cir. 1958) . ..12, 16

“Yates v. United States, 354 U.S. 298 (1957)... 14

Statutes: er |

United States Constitution: §* ~ te

Wifth Amendment ...............cccegeessessnsenes 3

Sixth Amendment 2..............ceceee tees guia S

28 U.S.C. §1291 «2... ere ae SL aiddaenthcdnstoiveisangesns ple

Federal Rules of Criminal Procedure, Rule 35 ............ 13

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“§ ° IN THE

Supreme Guurt of the Huited Suites

October Term, 1968

.WiiuiaM. PRONER,

So ee

Untrep States or AMERICA,

ed

_ PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED. STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

_ William Proner prays that a writ of certiorari issue to

review the judgment of the United States Court of Appeals

for the Second Circuit entered in 4 case entitled. United

States v. William Proner on January 10, 1969.

Citations to Opinions Below

There was no opinion in the District Court. The opin-

ion of the Court-of Appeals is set forth in Appendix A

hereto, infra, p. la, and is not yet officially reported. —

yo

Petitioner, —

‘Respondent. |

2

Jurisdiction.

The judgment of the Court of ‘Appeats was entered on

January 10, 1969 (Appendix B, infra, p. 9a). The juris-

diction of this Court is invoked under 28 U.S.C., Seetion

1254 (1). |

| Questions Presented

1. Whether the ‘‘concurrent sentence doctrine’’ enun-

ciated in Hirabayashi v. United States, 320 U. S. 81, 105,

and subsequent cases and applied by the Court of Appeals

in the instant case is an unconstitutional deprivation of due

process or constitutes an unsound rule of appellate review

which should be corrected by this Court’s exercise of its

supervisory powers, :

(a) because it denies appellate review of possibly in-

valid convictions which may result in further penalties or

disabilities being imposed on petitioner; and

(b) because the possibly invalid convictions on the 6

counts of the indictment which the Court of Appeals did not —

review may have prejudiced the petitioner in the eyes of

the sentencing judge? :

2. Whether the Court of Appeals applied an erroneous

or unconstitutionally loose standard of what may have in-

fluenced the jury’s verdict,

(a) when it found that evidence challenged by petitioner

was unrelated to the jury’s verdict on two counts of an

eight count indictment, and

(b) when it held that a confusing charge to the jury

could only properly be read as requiring that the jury not

consider that same evidence in its deliberation on the two

counts?

3

3. Whether the prosecutor’ s statements — in his

summation, vouching for the credibility of the prosecution’s

main witness, deprived petitioner of his-constitutional right

to confrontation and constituted improper conduct on the

part of the prosecutor requiring reversal of petitioner’s

conviction? ; | ;

Constitutional. Provisions and Statutes Involved |

The petition raises questions under the Fifth and Sixth

Amendments to the Constitution of. the United States and

28 U.S.C. §1291.

Untrep States Constitution, AMENDMENT V:

‘‘No person shall be held to answer for a capjtal,

_ or otherwise infamous crime, unless on a presentment

or indictment of a Grand Jury, except in eases arising

in the land or naval forces, or in the Militia, when in

actual service in time of war or public danger; nér

shall any person be subject for the same offense to be

twice put in jeopardy of life or limb; nor shall be com-

pelled in any criminal case to be a witness against

himself, nor be deprived of life, liberty, or property,

ithout due process of law; nor shall private property

be taken for public use, without just compensation.’’

Unirep States Constitution, AMENDMENT VI:

‘Tn all criminal prosecutions, the accused shall en-

joy the right * * * to be confronted with the witnesses

against him,”’ |

TITLE 28, U.S.C., §1291:

‘‘Binal decisions ef district courts—The courts of

appeals shall have jurisdiction of appeals from all

final decisions of the’ district courts of the United

States. * * hdd Fa

Ee ee te ee, ee Ne

SP terre:

Statement of the Case

Proceedings ) .

Petitioner, William Proner, was indicted in the United

States District Court for the Southern District of New

York with Leo Kaplan for wilful evasion of income taxes

for 1959 (Count 2); wilful filing of false statements of an-

nual income for the years 1959-1964 (Counts 3-8—these

counts were similar, and differed only with respect to the

periods of time involved); and conspiring to commit the

offenses charged in’ Counts 2:to.8 and to defraud the United

States of payments due under the terms of a compromise

agreement which petitioner had made with the Internal

Revenue Service in 1957 (Count 1).

Trial was had in the United States District Court for

the Southern District of New York before Mansriexp, D. J.,

and a jury. It resulted in the conviction of both defend-

ants on all the counts in the indictment. Petitioner was

sentenced to three years’ imprisonment on each count, the

‘ sentences to run con¢urrently. On January 10, 1969 the

Court of Appeals for the Second Circuit affirmed peti-

tioner’s conviction.

The Evidence

The government offered evidence to the effect that peti-

tioner had compromised his tax. liability for the years 1942

to 1945, by entering into an offer in agreement with the

government in 1957. That agreement provided that peti-

tioner was to pay a graduated percentage of his ‘‘annual

income’? for the years 1956 to 1965. ‘Annual income’’

was defined to include petitioner’s proportionate share of

4)

re

corporate net income in any closely held corporations in

which petitioner had an interest, whether or not distribu-

tions were made to him. .

° i

One theory advanced by the prosecution was that from

1959 to 1964 petitioner had held an interest in the Palmer

Import Triding Company and had failed to report his

share of the profits of this company. In computing the

profits, the government argued that certain business ex-

pense deductions of the company were unsubstantiated, and

that therefore the company’s profits were even greater than

that declared on its corporate tax return.

As an entirely separate-and alternative theory of prose-

cution, the government contended that petitioner failed to

report as additional income to’ him payments received by |

him from Palmer Import as expense .allowances. ‘In this

connection the prosecutor made his position clear when

he stated that the government ‘“could be trying Mr. Proner

right now on a false annual statement as to those expenses

without anything’ else in the case’’ (Record, pp. 709-10).

The government’s theory was that as certain of these sums

were not fully substantiated by petitioner as reimburse-

ments for business expenses actually incurred, they had to

be taken into his individual income, and petitioner’s failure

to report them as such constituted criminal fraud. °

Evidence relating to’ this latter theory—that petitioner

was guilty of fraud because he received monies as reim-

bursement for unsubstantiated business deductions—con-

stituted a substantial portion of the prosecution’s case, and,

indeed, the testimony of the two Internal Revenue Agents

was principally concerned with it. No evidence was ad-

6

duced to show that a claimed expense had not in fact been.

incurred. Rather, the agents testified to: the effect that |

the amounts claimed were insufficiently substantiated, and

that they had disallowed portions of them as being unreé-

sonable in amount. An example of the type of evidence

relied upon by the prosecution to establish’ fraud is the

following brief excerpt from Agent Hans Seidemann’s tes-

timony in which he states that he disallowed certain of the

claimed expenses for meals as being unreasonable in

amount based onthe opinions of acquaintances of his—

whose names he could. not recall: |

‘*Q. I believe that you testified that that amount

was disallowed after you had examined airline tickets.

to check arrival and departure, and to make allowance

for the number of nights spent away from home, and __

.that you estimated the cost of a. is that correct?

A. That’s correct.

Q. Do you recall what trip or trips this covered,

Mr. Seidemann? A. This covered various trips. This

covered a 19 day trip to Japan. This covered a 24 day

trip to Japan: This covered a short trip to Yugoslavia,

and it also covered trips within the United States to

Boston, Massachusetts, to Houston, Texas.

Q. Mr. Seidemann, would you tell us what estimate

you made for meals while in Japan? A. The estimate

for meals I arrived at by talking to some individuals

who within that period of time give or take two or

three years, had traveled to Japan.

Q. Who were they? A. Some individuals, some.

acquaintances. I don’t recall exactly who it was at

that time, but I had made some inquiries about the

reasonable amount for meals expense in this particular

country.

Q. Reasonable in whose opinion, yours or theirs?

A. It could not be mine because I had not been there. °

~“

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eet ten

7

Q. It could not be yours?. A. It could not be mine,

I had not been there.‘

Q. You applied it is [sic] somebody else’s estimate

as to what was reasonable? <A. I certainly could not

use my opinion as to what was reasonable.’’ (Record,

pp. 619-20.) ;

The Prosecutor’s Summation

During the course of his summation, the prosecutor in

characterizing the testimony of Aaron Schur, one of his.

principal witnesses, stated: |

_ ‘Mr. Schur gave his answer and said he told me | 4

two weeks ago. I can’t take the stand and testify.

But Lam telling you right now that if I did not believe

what he had told me was true, I never would have let

it stay the way it was on the record.”’ (Record, p. 780. )

The Chara

In its chdrge th the trial oun told the jury:

come In addition the Government contends that

certain other items; most of which are much smaller

in amount than the alléged proportionate share of

Palmer Import Trading Company’s profits attributed 7

by it:to Proner, either were disallowed or should have -

been disallow od and taxed as income to Proner * * * 4

The Government next claims that there were a

\ series of deductions representing payments by Palmer

\ to Proner during the period from 1959 to 1964, which

“ were improperly deducted. As for the years 1959 to

1961, there was testimony on the part of Agent Lieber-

man that the amounts disallowed had been agreed to

by Palmer and had been added to Proner’s income

with Proner’s agreement.’’ (Record, pp. 851-52.)

‘ :

:

PR TN I, I TENN

o*

i) nape Aceh dria

In-the _— of Avpecie, petitioner argued that the goy-

ernment’s proof on its unsubstantiated deduction theo y.

was insufficient to ‘sustain a criminal conviction becaus

there was no proof that petitioner had not actually ex

_ pended the_money so received for business expenses, but

_— only evidence that the expenses were not fully substan-

tiated.

As such money was proved by the government to have

been received by petitioner i im every year for which he was

charged, and as the Court’s instructions could easily be

as having left it open to the jury to convict peti-

tioner on every count on this theory, petitioner argued that

it could not be known whether the jury convicted him on

this evidence or solely on the evidence of his interest in

Palmer Import Trading Company and his consequent fail-

ure to report a share of its profits.

‘N elias. it was contended that his convictions on

. 5 all counts. should be reversed and a new trial —

In ite opinion, the Court of Appeals a that if

" petitioner’s contentions were ‘‘* * * correct, the conviction

- on Counts 2-8 [was] subject to reversal since there [was]

; no way for [the] Court to know on which evidence the jury

. based its verdict,’’. and that, ‘‘* * * a successful challenge

to Counts 2-8 would require reversal of the conspiracy con-

viction under Count 1 * **” (Appendix A, p. 4a). How-

ever, the Court ruled that it ‘“‘need not decide the merits

of [petitioner ’s] arguments *'* *)) (Appendix A, p. —

OL PR Ae A TN a

.*

es

9

The Court said, ‘‘[b]ecause the conviction on Counts 2 and

3 [is] unrelated to the evidence challenged by Proner and

because the sentences on all counts were concurrent, the

judgment of conviction must be affirmed regardless of the

validity of the conviction on the other counts”’ (Appendix

A, p. 6a).

: To sustain its conclusion that the unsubstantiated busi-

ness expense theory of the prosecution did not affect

Counts 2°and 3, the Court analyzed the evidence. In effect;

the Court stated that since the Palmer Import Company

operated on a fiscal year running: from October 1, 1959

through September 30, 1960, it was possible that petitioner

had been reimbursed in calendar 1959 for expenses de-

ducted by the company in fiscal 1960. But the Court found

that there was no evidence as to whether some of the pay-

ments to petitioner disallowed to the Palmer Import Com-

pany during its fiscal 1960 year actually took place during

calendar year 1959.* Moreover, the Court said any reim-~

bursements to petitioner in the last quarter of 1959 (fiscal :

1960) were introduced only with respect to petitioner’s 1960 -

return, even though he was on a calendar tax year.

In its instructions, the trial court told the jury ‘‘* *.*

The Government next claims that there were a series of

deductions representing payments by Palmer to Proner

‘ during the period from 1959 to 1964, which were improperly

deducted ** * (Record, p. 852). The Court of Appeals

disposed of petitioner’s argument that such instructions -

may have left it open to the jury to convict him on the 1959

*In this finding the Court of Appeals was plainly wrong. Ex-

hibit 44, which was part of the joint appendix before the Court of

Appeals is printed as Appendix C hereto. This exhibit shows beyond

doubt that petitioner did receive money in 1959. e

ore

" ° 4

1

Reus %

counts on the unsubstantiated deduction theory by stating

~ that ‘‘[the trial court’s] comments served only to remind

the jury of the evidence relating to payments by*Palmer

‘Import during its fiscal years that included a portion of

Calendar 1959 * *.*’’ and ‘‘* * * did not constitute a @ug-

gestion, contrary to the evidence that any payments in 1959

affected * * * [Counts 2 and 3]’’ (Appendix A, p. 6a):

~

Petitioner’s contention that the prosecutor had made

himself an unsworn witness during his summation by ~

vouching for a witness’ credibility was summarily dealt

with by the Court below on the grounds that such remarks

were not improper, and moreover, the failure of defense

counsel to object waived the point (Appendix A, p. 7a).

Reasons for Granting the Writ

This Court has set down for argument a case

in which a question identical to one presented

by this petition will be decided.

On December 17, 1968, in the case of Benton v. Mary-

_land, Docket No. 201, this Court ordered reargument on

March 24, 1969, on.the question, ‘‘ Does the concurrent sen-

tence doctrine, enunciated in Hirabayashi v. United States,

320 U. S. 81, 105, and subsequent cases, have continuing

validity in light of such decisions as Ginsberg v. New York,

390 U.S. 629, 633 n. 2, Peyton v. Rowe, 391 U.S. 54, Carafas ©

v. La Vallee, 391 U. S. 234, 237-238, and Sibron v. New

York, 392 U. S. 40, 50-58?” iin

This question is identical to the first question raised by

petitioner herein.

11

The concurrent sentence doctrine enunciated in

Hirabayashi v. United States and subsequent

cases has and will continue to deprive petitioner

of his constitutional right to due process and

is an unsound rule of appellate review . which

should be corrected. Fa

In thé instant case, the Court-of Appeals refused to

review petitioner’s conviction on six out of eight counts of

- the indictment on the ground that his sentence on all the

counts was concurrent.. In addition to those reasons in-

dicated by cases cited in this Court’s order in Benton v.

Maryland: granting reargument on the question of concur-

- rent sentences, we submit, that the Court of Appeals’ re-

fusal to grant petitioner appellate review of six counts on

which he was convicted constitutes, an especial deprivation

-of Due Process. Petitioner’s potential civil tax liability

for deficiencies as well as fraud penalties has not yet been

determined.- Yet. in any civil proceeding instituted by the

government to collect such sums, it is clear under settled

case law that this petitioner’s conv iction on thése six counts

will collaterally estop him to deny liability and fraud for

the years involved. Tomlinson v. Lefkowttz, 334 F.2d 262

(5th Cir. 1964), cert. denied, 379 U. S. 962 (1965) (criminal

conviction collaterally estops taxpayer from getting refund

of civil fraud penalties for same taxable years) ; Armstrong

v. United States, 354 F.2d 274 (Ct. Claims 1965) (criminal

_ conviction collaterally estops taxpayer on issue of fraud

penalties despite Commissioner’s determination that tax-

- payer’s couduct was not fraudulent); Moore v. United

States, 360 F.2d 353 (4th Cir. 1965), cert. denied, 385 U. S.

1001 (criminal conviction is conclusive on issue of fraud in

collateral suit for taxes, with fraud penalties); Amos v.

va

12

a

Commissioner of Internal Revenue, 360 F.2d 358 (4th Cir.

1965) (criminal conviction collaterally estops taxpayer .on

the issue of fraud in subsequent civil proceedings). And

see: Emich Motors “Corp. v. General Motors Corp., 340

U. S: 558 (1951); Local 167 1.B.T. v. United States, 291

U. S. 293 (1934).

Additionally, if petitioner’s conviction on six counts

were reversed, he could argue that his invalid conviction

on six counts tainted his conviction on the two similar

counts which the Court of Appeals has sustained. Such a

contention cannot -be raised, however, so long as petitioner

cannot get appellate review of his conviction on the six

counts. Cf: Bruton y. Trited States, 391 U.S. 123 (2968) ;

Jackson v. Denno, 378 U.S. 368 (1964) ; Hartman v. United

States, 215 F.2d 386 (8th Cir. 1954) ; United States v. Kelly,

349 F.2d 720, 758 (2d Cir. 1965), cert. denied, 384 U.S. -

947 (1966) ; United States v. Long, 257 F.2d 340, 342 (3d

Cir. 1958) ; United States v. Barash, 365 F.2d 395, 399 (2d

Cir. 1966). > 2

Moreover, we submit, that if petitioner’s conviction on

* these six counts was invalid he is entitled to be resentenced

irrespective of the validity of his conviction on the remain-

-ing two counts. In the event of reversal of the six counts, ¥

this case is the same as those in w hich the sentencing judge |

determines a defendant’s ‘sentence in the belief that the

defendant has in fact committed more crinies than those

of ‘which he has been convicted. In such circumstances,

- courts on appeal have required a resentencing. In Town-

send v. Burke, 334 U. S. 736, 740° (1948), this Court said,

‘‘We are not at liberty to assume that items [false state-

P oe

= ae

. ments by an officer as to defendant’s criminal record] given.

such emphasis by the sentencing court, did not inffmence the

sentence * * *.’’ See also, Smith v. United States, 223 F.

2d 750 (5th Cir. 1955) (if presentence report contains false

. statements as toa defendant’s record sentence is void

as lacking in due process) ; Baker v. State, 8 Md. App. 251

(1968) (case remanded for resentencing where trial judge

considered defendant also guilty of other crimes he was not

convicted of).

_ Obviously, petitioner herein is deprived of the opportu-

nity to raise.this latter contention so long as he is denied

appellate review of the six counts, which are unquestionably

aifected by the evidence he chaffenged as fegaffy insufficient. —

Moreover, even if petitioner were not entitled to be re-

sen s of right, reversal of conviction ex six counts

wouldsfresent a strong argument for a discretionary reduc-

tion of sentence under Rule 35, Federal Rules of Criminal

Procedure.

We further submit that the concurrent sentence doctrine

as applied herein deprived petitioner of the equal protec-

tion of the laws.in that his right of appellate review under

28 U.S.C. §1291 of the decisions of the District Court that

he was guilty of eight separate crimes was unreasonably

denied him, whereas had be not been sentenced in, this man- .

ner his right to review. would have been left intact.

-—--- -_-

CUR RGR ae Rhee ono oo

14

The Court of Appeals’ determination that the

jury’s verdict on Counts 2 and 3 waa\not af-

fected by evidence challenged by petitioner

as insufficient violates this Court’s holdings in

Stromberg v. United States and Yates v.

United States.

The Court of Appeals decided that the jury’s verdict on

Counts 2 and 3 was not based on the evidence of unsubstan-

tiated ‘business deductions: In Stromberg v. California,

283 U.S. 359 ( 1931), and succeeding cases, this Court, laid

down as a fundamental rule of appellate review of criminal

convictions that if the jury might have convicted the de-

fendant on an impermissible theory, such conviction must

be reversed, even though a valid alternative ground existed

upon which the conviction could have been sustained. What

this obviously means is that where a jury may have based .

its verdict on a legally deficient theory, even though it did

not necessarily or could not properly have so based it, the

defendant. is entitled to a reversal. ,

This rule must be applied in light of this Court’s rulings

in Yates v. United States, 354 U. S. 298 (1957) and Bollen-

bach v. United States, 326 U. S. 607 (1946). In Yates v.

United States, 354 U.S. 298, this Court held that a convic-

tion had to be revérsed when a verdict was supportable on

ohne ground but-not on another, and when the judge’s charge

was not so clear as to warrant a finding that the jury must

have understood it could only consider the supportable

ground.

A jury is not so sophisticated as a Court of Appeals. A

confusing and. contradictory charge may not convey to a

' jury the necessity of its adopting the more complex ef two

15

theories even though the Court of Appeals later determines, »

after cool deliberation, that the charge should properly be

read that way. This is particularly true when the Court of

Appeals mistakenly assumes there was no evidence to sup-

port an alternative reading\of the charge, when, in fact,

there was such evidence before the jury. Compare, Bruton

v. United States, 391 U. S. 123 (1968) ; Jackson v. Denno,

378 U.S. 368 (1964).

In the instant case, as the Court of Appeals recognized,

the trial court instructed the jury that the government had

presented evidence relating to improper business deduc-

tions for the years 1959 to 1964. Instead of regarding it as

possible that the jury may have considered these instruc-

‘tions as permitting it to base a verdict of guilt on the 1959

counts on these same improper business deductions, the

Court of Appeals interpreted the instructions as conveying

to the jury a much more difficult and involuted thought,

namely, that such deductions, if any, represented additional

fiseal 1960 income to Palmer and therefore additional cal-

endar 1960 income to Proner when his proportionate share

of undistributed profits-was calculated. ,

Buttressing its conclusion that counts 2 and 3 were un-

affected by the unsubstantiated business expense deduction

theory, was its belief that there was no evidence in the case

that petitioner had received any money in 1909. Tn this

belief the Court was wrong. See Exhibit 44, Appendix C:

hereto. - | ek

- What we have here, then, is a case where a man is

charged with tax evasion and false statements for 1959,

where the government proves the.man received reimburse-

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ments in 1959 in accord with its theory that he is guilty for

failing to report as income to him reimbursements he

received, and where the trial court’s charge explains to the

jury what the governmem’s theory is and reminds it that

there were such reimbursements in 1959. We submit the

Court of Appeals applied too loose a standard and that, in

fact, the jury’s verdict on the 1959 counts may have been

Jnfluenced by the evidence and charge on the insufficiently

substantiated deduction theory advanced by the govern-

ment. .-

It is particularly unsuitable for a court on appeal to

indulge in nice calculations in retrospect as in the case at

bar where one of the prosecution’s theories is highly com-

plex and difficult to understand, and the other sedulous,

easy and ‘highly prejudicial. Coim pare Hartman v. United

States, 215 F.2d 386 (8th Cir. 1954) ; United States v. Kelly,

349 F.2d 720, 758 (2d Cir. 1965), cert. denied, 384 U.S. 947

(1966) ; United States v. Long, 257 F.2d 340, 342 (3d Cir.

1958) ; United States v. Barash, 365 F.2d, 395, 399 (2d Cir.

1966).

Petitioner was deprived of his right to confron-

tation by the prosecutor’s vouching for the cred-

ibility of his chief witness in his summation.

The prosecutor vouched for the credibility of his chief

witness by stating that the witness had made statements to

him antedating the trial which were consistent with the

witness’ challenged testimony (Record, p. 780). Since the

defendant was not able to cross-examine the prosecutor,

he was deprived of his constitutional right to confrontation.

See Berger v. United States, 295 U. S. 78 (1934) ; Compare,

Pointer v. Texas, 380 U. S. 400 (1965).

a i

‘Conclusion

.For the reasons stated herein, this petition for a

writ of certiorari should be granted.

Respectfully submitted,

Harris B. STernserc *

Attorney for Petitioner

Harris B. SteErnBERG

Stanuey S. ARKIN

Of Counsel

February, 1969

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Appendix A

Opinion of the Court of Appeals

~~ UNITED STATES COURT OF APPEALS

For THE Seconp CIRCUIT ”

No. 236—September Term, 1968. c

(Argued December 12, 1968 Decided January 10, 196%)

_ Docket No. 32573

Ee

Unitep States or AMERICA,

Appellee,

my goon ’

Wr414m Proner, |

; Appellant.

Before:

Moors, SmitH and Hays, Ee

| Circuit Judges.

Appeal from a judgment of the United States District

- Court for the Southern District of New York, Walter R.

Mansfield, Judge, convicting appellant after a jury trial

of attempting to evade payment of i income tax, filing false

staterhents in connection with his income: tax, and con-

spiring to commit these acts, all in violation of 26 U.S.C.

§§7201\ and 7206 (1964) and 18 U. S. C. §371 (1964).

oo is SG

2a

Appendix A

Affirmed.

Harris B. Stermnserc, New York, New York

(Stanley S. Arkin, on the brief), for Appel-

lant. —

Peter ZimrotH, Assistant United States Attor-

ney (Robert M. Morgenthau, United States

Attorney for the Southern District of New

York, David M. Dorsen and Charles P. Sif-

ton, Ausiutans United States Attorneys, on

the brief), for Appellee.

. Hays, Circuit Judge:

William Proner appeals from a judgment of the United

States District Court for the Southern District of New

York, Walter R. Mansfield, Judge, convicting him, after a

jury trial, on eight counts of attempting to evade payment

of income tax, filing false statements in connection with his

income tax. and conspiring to commit these acts, all in

violation of 26 U. S. C. —§§7201 ona 7206 — hacen 18

U.S.C. §371 (1964).

Under a compromise agreement with the Internal Reve-

nue Service made by Proner in 1957, Proner was to pay

a portion of his ‘‘annual income’? for the years 1956-1965

on account of his tax liability for the years 1942- -1945. The

term ‘‘annual income’’ was defined to include wages and,

if Proner became a stockholder in.a closely held corpora-

tion, ‘‘his proportionate share of corporate net income in

excess of $5,000.00 as determined for Federal income tax

purposes, * * * whether distributed or undistributed to

him. _

~

1. The definition of corporate net income was subject to further

qualifications not relevant here.

3a

Appendix A

The indictment charged that Proner (1) wilfully at-

tempted to evade his 1959 income. tax in violation of 26

U. S. C.. §7201 (1964) (count 2); (2) wilfully filed false.

statements of -annual income for the years 1959-1964 in

violation of. 26 U. S. C. §7206 (1964) (counts 3-8); and

(3) conspired to commit the offenses charged in counts 2-8

and to defraud the United States of payments. due under

the terms of the compromise agreement with the Internal :

Revenue Service in violation of 26 U. S. C. §371 (1964 |

(count 1).

The government sought to prove at trial (1) that Proner

held an interest in the ‘‘Palmer Division’’ of the ‘S & E

Novelty Company and, later, in the Palmer Import Trading

Company during the years 1956-1964; (2) that he wilfully

filed a false income tax return in 1959 and faise Statements

of Annual Income for the years 1959-1964 by failing to

report his share of the profits of these companies;? (3)

that he wilfully filed false Statements of Annual Income

for the years 1960-1964 by failing to report additional in-

come received by him from Palmer Import in the form of

expense allowances; (4) that, by improperly deducting as

business expenses during 1960-1964 these expense allowance

| payments to Proner, Palmer Import understated its income

and Proner wilfully filed false Statements of Annual In-

come’ for 1960-1964 by failing: to report his proportionate

‘share of the understated amount; and (5) that Proner con-

2. In 1957 and 1958 Proner also held an interest in Kaplan -

Brothers, a company controlled by the S & E Novelty Company.

Kaplan Brothers. lost money during this period. These losses must

be subtracted from the‘profits of Palmer Division to compute the

amount Proner should have reported. eae

| Appendix A

spired with others to commit these acts. The jury found

:; Proner guilty on.all eight counts of the indictment. He was

Sentenced to a three year term on each count with the terms

to run concurrently. | .

On this appeal Proner challenges the sufficiency of the

evidence regarding his failure to report income attributable

to Palmer Import’s payments to him for his alleged busi-

ness expenses. This evidence provides the sole basis for

the conviction on count 7 because the government offered

no evidence that Proner failed to report other income in

1963, the year covered by count 7. Proner also claims that

under the charge given by the court the jury might have

convicted him on counts 2, 3, 4, 5, 6.and 8 solely on the basis

of the evidence as to business expenses. He argues that

the evidence, relating as it does only to the failure to sub-

stantiate business expenses, does not show a wilful failure

to report income in violation of 26 U. S. CG. §§7201 and 7206

(1964). If he is correct, the conviction on counts 2-8 is sub-

ject to reversal since there is no way for this court to know

on which evidence’the jury based its verdict. Moreover a

successful challenge to counts 2-8 would require reversal

- of the conspiracy conviction under count 1 because this

court cannot know whether the conviction under that count

was based on’ the evidence relating to the payments for ex-

penses. Thus Proner argues that we must reverse the

judgment of conviction on all counts and grant him a new

trial. : one. ae 7

For the reasons set forth below. we need not decide the

merits of the arguments Proner advances.

_ No evidence involving unsubstantiated business expenses

was presented with respect to Proner’s 1959 income tax

5a

Appendix A

return (the subject of count.2) and his 1959 Statement of

Annual Income (the subject of count 3). The evidence

adduced in support of count 2 concerned the distribution

to Proner of the profits of the Palmer Division when it

was liquidated in 1959 and a claimed. capital) loss carry-

over deduction of $1000 arising from the overstatement of

Proner’s loss in-1956 on the sale of his interest in the com-

pany the business of which was transferred to the ‘¢Palmer

Division?’ of S&E Novelty Company. The evidence in

support of count 3 relates only to Proner’s failure to in-

- elude im his Statement of Annual Income for 1959 his profit

‘distribution from the’ Palmer Division and his propor-

tionate share of Palmer Import’s net income.

It is true that Proner may have received amounts in

1959 for business expenses that he did mot report as in-

come in his 1959 income tax return of in his 1959 State-

ment of Annual Income. This poamngety arises from the

fact that Palmer Import operated on a’ fiscal year running

from October through September so that its 1960 return

included operations during the last quarter of calendar

ear 1959. No evidence was offered .as to whether some

of the payments to Proner disallowed as deductions to

Palmer Import in its 1960 fiscal year actually took place

during calendar year 1959. Proner’s tax year was the

calendar year and the payments to Proner disallowed as

- deductions to Palmer Import for its 1960 fiscal year were

introduced in evidence only with respect to Proner’s 1960

income tax return and 1960 Statement of Annual Income.

This point was made clear in thé testimony of one of the»

government’s witnesses and in the opening remarks by

eaprmanrpesoe « . “ pee desist DOAN Wiha eA ENR het

i

3

(

Appendey

é

the prosecutor. Although Judge Mansfield referred in his

charge to ‘‘payments by Palmer to Proner during the pe-

— riod from 1959 to 1964, which were improperly deducted,”’

and noted that ‘‘[a]s for the years 1959 to 1961 there was

testimony * * * that the amounts disallowed had been

‘agreed to by Palmer and had been added to Proner’s in-

come with Proner’s agreement,’’ his comments served only

to remind the jury of the evidence relating to payments

by Palmer Import during its fiscal years that included a

portion of calendar 1959-~Thus the comments did not con-

stitute a suggestion, contrary to the evidence, that any

payments in 1959 affected Proner’s 1959 income tax return

and Statement of Annual Income. Since, .therefore, the

government presented no evidence involving payments to

Proner for unsubstantiated expenses with respect to counts

2 and 3 and the judge’s charge cannot properly be read

as suggesting that such evidence was presented, the jury’s

verdict. on these counts must stand. _

Because the conviction on counts 2 and 3 is suihied

to the evidence challenged by Proner and because the sen-

tences on all counts were concurrent, the judgment of con-

viction must be affirmed regardless of the validity of the

conviction on the other counts.. Lawn v. United States, 355

TT. S. 339, 359 (1958) ;* United States v. Marino, 396 F. 2d

780, 781 (2d. Cir. 1968).

ee ee

BP ALMA mie

During his summation defense counsel indicated that

the prosecutor had remained silent even, though he knew

3. We note that on December 16, 1968 the Supreme Court de-

nied certiorari in Cribb v. United States, 397 F. 2d 361 (Sth Cir.

_ 1968), which involves an application of the Lawn doctrine. 37 U. S.

*L. W. 3216 (U. S.) (December 17, 1968).

Ta \

Appendian A \

his witness, Schur, was lying on the stand. The proseeutor

replied to this comment in his summation by saying: ‘I |

can’t take the stand and testify. But I am telling you

right now that if I did not believé what [Schur] had told

was true, I would never have let it stay the way it was

on the record.” This reply defending the prosecutor’s in-

tegrity and, by implication, vouching for Schur’s credibility

does not require reversal.’ Seé U nited States v. Stromberg,

268 F. 2d 256, 270-71 (2d Cir. ), cert. denied, 361 U. S. 863

(1959). Moreover the point was waived since no ‘objection

to the prosecutor’s remarks was raised at trial. See United

States v. Socony-Vacuum Oil Co., 310 U. S. 150, 238-40

(1940) ; United States —— 393 F: 2d 642, 645-46

(ed Cir. 1968).

Affirmed.

—

“

POPS

:

-

GEIB a -

9a

Appendix B

Judgment of the Court of Appeals Entered

January 10, 1969

UNITED STATES COURT OF APPEALS

For THE SEeconp Circuit

At a Stated Term of the United States Court of Ap-

peals, in and for the Second Circuit, held at the United

States Courthouse in the City of New York, on the tenth

day of January one thousand nine hundred and sixty-nine.

Present: —

Hon. Leonarp P. Moore,

Hon. J. Josern Smirn, '

Hon. Pauu R. Hays, Circuit Judges.

——

Unrirep States oF AMERICA,

‘Plaintiff-A ppellee,

v.

Leo Kapa,

Defendant,

Wiuiam PrRoner,

Defendant-A ppellant.

——— oe

Appeal from the United States District Court for the

Southern District of New York.

10a

’ Appendix B

This cause came on to be heard on the transcript of

record from the United States District Court for the South-

ern District of New York, and was argued by counsel.” ~

|

Ox ConsipeRATION WHEREOF, it is now hereby Ordered,

adjudged, and decreed that the judgment of said District

Court be and it hereby is affirmed. |

_ A. Daniel Fusaro

Clerk

FILED

January 10, 1969 -

United States

Court of Appeals

Second Circuit

32573

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