Petition — Gray v. United States

PR YO

Number 74-12 77 pf

iN THE

Supreme Court of the United States

OCTOBER TERM, 1974

ROBERT GRAY

Petitioner

Vv.

UNITED STATES OF AMERICA

Respondent

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

April 10, 1975

SYDNEY B. NELSON

555 Commercial National Bank Building

Shreveport, Louisiana 71101

Counsel for Petitioner

MID-SOUTH PRESS, SHREVEPORT, LOUISIANA

INDEX

Page

ED b.n ss cbececoetedeneevecdensdoekestas ]

DEE nob edeneeseceasacacuneéncesesnncentet 2

SS BONNIE. 4:c.n0c6oc cccccncivegecassoudcess 2

Statutory provisions involved ...........eeseeeeeeees 2

SS GE TD GONE hc bc sescdéucnccvcedenessceces 3

Jurisdiction in the Court of First Instance ............ 5

Reasons for granting the writ ............eeeeeeeees 5

ED hncccuncesnsc c4edeareesastecssecuseses 9

Appendix A (Opinion and Judgment of Court of Appeal) 11

es CED cnccocccadedcoaneesec 23

CITATIONS

Cases:

Srey o. Gree, BES GBs GD oc ccccccccccéccccnns 7

I (0h, TR, I i ee ee 7

Murray v. Williams, 114 F.2d 2BS .. 1... cccccccccces 6

United States v. Goldstein, 56 F.R.D. 52 ............. 8

United States v. Neff, 212 F.2d 297 ........cceeeeees 6

Constitution, Statutes, and Rules:

Constitution of the United States, Amendments V and VI.2, 23

Se WA SE oxenyo nese kone ess dceenneenessKee 5

BP Weis GE sb cccnedececcccesdcenepsccess 2, 3, 23

ee a MED Gdvncccccussssendenecsncecs 2, 3, 24

SP Ws CDERD Bec odévdueccensecceecsécecesin 2

Rule 7(f), Federal Rules of Criminal Procedure ..... 2, 25

IN THE

Supreme Court of the United States

OCTOBER TERM, 1974

Number

ROBERT GRAY

Petitioner

v.

UNITED STATES OF AMERICA

Respondent

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

The petitioner, Robert Gray, respectfully prays that a

writ of certiorari be issued to review the judgment and opinion

of the United States Court of Appeals for the Fifth Circuit in

the above-captioned case.

OPINION BELOW

The opinion of the Court of Appeals (App. A., infra.)

is not yet reported. The trial in the District Court for the

Western District of Louisiana was before a jury.

2

JURISDICTION

The opinion and judgment of the Court of Appeals for

the Fifth Circuit was entered on February 7, 1975. A timely

petition for rehearing was denied on March 13, 1975 and this

petition for certiorari was filed within thirty (30) days of that

date. This Court’s jurisdiction is invoked under 28 U.S.C.

1254(1).

QUESTIONS PRESENTED

1. In a criminal income tax case is it a denial of due

process for the prosecution, in response to motions tor discovery

and for a bill of particulars, to furnish defendant a schedule

of the specific items of income it intends to prove were under-

stated, then after the defendant voluntarily takes the stand

attempt through cross-examination and argument by government

counsel to prove willful understatement of items of income not

set forth in the government's response to defendant’s motions?

2. Is it a denial of due process in a case where, as found

by the appellate court, “the result of the trial really turned on

criminal intent vel non” for the court to apply an arbitrary

and unvarying rule limiting the number of character witnesses

to three?

STATUTORY PROVISIONS INVOLVED

Constitution of the United States of America, Amend-

ments V and VI

26 U.S.C. 7201

26 U.S.C. 7206(1)

Rule 7(f) Federal Rules of Criminal Procedure

3

STATEMENT OF THE CASE

Robert Gray, petitioner herein and the defendant in the

proceedings below, was convicted of income tax evasion in

violation of 26 U.S.C. 7201 and of filing a false and fraudu-

lent income tax return in violation of 26 U.S.C. 7206(1).

Prior to trial, and in response to various discovery motions,

the government delivered to the defendant a schedule of ad-

justments to income purportedly setting forth all items of

income which the defendant had allegedly failed to report for

the vears 1967 and 1968.

The government's case in chief consisted of evidence di-

rectly related to the schedule it had given to the defendant prior

to the trial. However, once the defendant had voluntarily taken

the stand and testified, the government counsel announced:

“MR. GREER: Your Honor, I intend to introduce evi-

dence and cross examine the defendant on additional

items of income which he received and did not report

on his tax returns for the years 1967 and 1968. These

are both relevant and admissible inasmuch as it is very

much a part of this trial. These are similar acts and

they are the identical crime for which the defendant is

on trial here today.” (R. 523)

And the court then said:

“THE COURT: Mr. Nelson objects, | suppose, because

they are not alleged in the indictments. Since they are

similar crimes the ruling is they are admissible to show

intent.” (R. 523)

As anticipated by the court counsel for defendant stren-

uously objected to the tactics used by the government, which

included the following:

1. Prior to trial the government. in response to both a

motion for a bill of particulars and motion for discov-

ery, submitted to defendant a schedule of adjustments

4

to income for 1967 and 1968 setting forth the specific

items the government intended to prove were under-

stated by defendant.

2. The government thus led defendant to believe that for

1967 and 1968 he need only be prepared to defend

charges relating to items listed on the schedule of

adjustments.

3. After defendant voluntarily took the stand to testify

concerning the charges against him as detailed in the

schedule of adjustments to income, the government then,

for the first time, interjected new and unexpected issues

into the case by questioning defendant concerning items

not shown on the government’s schedule of adjustments.

4. The cross-examination of defendant concerned items of

alleged income received six or seven years prior to trial,

during 1967 and 1968, which items were not set forth

in the government’s response to defendant’s discovery

motions.

Concerning this cross-examination of the defendant, the

Fifth Circuit acknowledged:

“Nonetheless, the ensuing vigorous cross-examination

was, in all probability, extremely prejudicial to the

defendant Gray. The result of the trial really turned

on criminal intent vel non.” (Emphasis supplied)

Fifth Circuit unreported

opinion, p. 3325

The defendant's reputation in the community for truth-

fulness and honesty was thus an important factor. After it had

received testimony from only three character witnesses, the

trial court announced:

“THE COURT: It has been the unvarying rule of this

Court long before my time and upheld by the Fifth

Circuit Court of Appeals that character witnesses are

limited to three. We apply that rule here. (R. 403)

5

Defendant’s counsel responded:

“MR. NELSON: For the record, because the character

and reputation is of such importance in the type of

crime ~harged here, we respectfully object to the Court’s

ruling.” (R. 403)

In its opinion below, the Fifth Circuit announced the

following rule of law:

“The number of witnesses allowed to testify should not

be arbitrary or unreasonably restrictive, and prejudi-

cial error in those respects will entitle the injured party

to relief. A general rule of limitation applicable to all

cases without regard to the particular circumstances

has been held to exclude discretion and to be, therefore,

unreasonable and unlawful.”

Fifth Circuit unreported

opinion, p. 3327

Notwithstanding the foregoing judicial pronouncement,

the Fifth Circuit then concluded that the trial court had exer-

cised its discretion rather than applying an “unvarying rule”

as the trial court had stated it was doing.

The Court of Appeals for the Fifth Circuit affirmed

defendant’s conviction.

JURISDICTION IN THE COURT OF

FIRST INSTANCE

Federal jurisdiction in the trial court was based upon

18 U.S.C. 3231.

REASONS FOR GRANTING THE WRIT

The applicable rule of this Court governing review is:

“Rule 19.

1.(b) Where a court of appeals . . . has so far de-

parted from the accepted and usual course of judicial

6

proceedings, or so far sanctioned such a departure by

a lower court, as to call for an exercise of this court’s

power of supervision.”

The indictments charged Robert Gray with failing to

report $13,195.70 and $38,363.14 for the years 1967 and

1968 respectively. In asserting his right to know the basis for

such charges, defendant filed motions for a bill of particulars

and for discovery. Responding thereto the government sub-

mitted a detailed schedule of adjustments to income which

purportedly “describes the categories of adjustments, the years

to which the adjustments apply, and the specific adjustments

themselves.” (Reproduced Exhibits, Page 8)

Relying upon the government’s response setting forth

the scope of the charges against him, defendant voluntarily

testified. The government then broadened the scope of the

charges against defendant by attempting to show other specific

adjustments for 1967 and 1968 which had not been set forth

in the government’s response to defendant’s motions.

The Third Circuit in United States v. Neff, recognized

that “Bills of particulars in criminal cases in Federal Courts

are governed by Rule 7(f) of the Federal Rules of Criminal

Procedure” and that “a bill of particulars strictly limits the

prosecution to proof within the area of the bill.” 212 F.2d

297, 309. The Sixth Circuit also observed: “The purpose of

a bill of particulars is to enable the accused to avoid surprise,

and to enable him to prepare for trial.” Murray v. Williams,

114 F.2d 285, 288.

As a direct result of the government’s failure to limit

its prosecution to the schedule of adjustments, defendant, Rob-

ert Gray, was unable to avoid surprise and was unprepared to

respond to interrogation concerning income received seven

years prior to the trial. Illustrative is the following exchange:

7

“MR. GREER: Some of the $500.00 even checks would

be for travel expense?

“MR. GRAY: They very well could be. I don’t know.”

(Tr. 552)

Similar questions and responses put before the jury

considerable data which defendant was unprepared to explain.

Without calling any government witness to prove defendant

received additional items of unreported income, government

counsel was thus able to convince the jury that such had been

the case.

The procedure used by the government denied defen-

dant his Sixth Amendment right to confront the witnesses

against him. The prosecuting attorney, through innuendo dur-

ing cross-examination of the defendant and through positive

statements during closing argument became the single most

important witness against the defendant.

The Sixth Amendment right of confrontation includes

the right of cross-examination. Brookhart v. Janis, 384 U.S.

1 (1966). Robert Gray had no opportunity to cross-examine

witnesses against him concerning the additional items which

the government alleged constituted “similar acts” and the

“identical crime” for which he was on trial. (R. 523)

Since the suppression by the prosecution of materia!

evidence favorable to an accused violates due process, Brady

v. Maryland, 373 U.S. 83 (1963), it logically follows that it

is a violation of due process to suppress facts which would

place the accused on notice of the charges which he must

answer during the trial.

8

A District Court in the Third Circuit has recognized

that under Rule 7(f) of the Federal Rules of Criminal Proce-

dure a defendant in a criminal income tax case is entitled to

receive from the government a list of the specific items of

income that the government intends to prove were understated.

United States v. Goldstein, 56 F.R.D. 52 (1972). Even if this

were not required, once the government chooses to submit a

list to the defendant which purportedly sets forth all the items

of income which it intends to prove were willfully understated,

it is basically unfair to permit the government to surprise the

defendant during the trial by questioning him concerning other

items.

An additional basis for reviewing the decision of the

court below arises from its failure to follow the rule of law

announced by the Court concerning arbitrary limitation on

the number of character witnesses who may testify in a crim-

inal case. The Court stated “this Court has not upheld any

‘unvarying rule’ limiting the number of character witnesses and

that a general rule of limitation applicable to all cases without

regard to particular circumstances would exclude discretion

and therefore be unreasonable and unlawful.” (Opinion,

p. 3327). The trial court, however, stated it was applying an

unvarying rule of long standing that character witnesses are

limited to three. On this issue no evidence was presented to

the trial court and the court below therefore reviewed no evi-

‘ence on the issue. The rule of law announced by the Fifth

Circuit concerning arbitrary limitation of character witnesses

required the Court to find the trial court’s action to be un-

lawful. The refusal of the Fifth Circuit to accept the undisputed

facts as recited by the trial court and to apply the law to these

facts cannot be justified.

9

CONCLUSION

For the foregoing reasons, it is respectfully submitted

that a writ of certiorari should issue to review the judgment

and opinion of the Fifth Circuit.

SYDNEY B. NELSON

555 Commercial National Bank Building

Shreveport, Louisiana 71101

Counsel for Petitioner

April 10, 1975

10

CERTIFICATE OF SERVICE

I hereby certify that on this 10th day of April, 1975,

three copies of the petition for Writ of Certiorari were mailed,

postage prepaid to Robert H. Bork, Solicitor General, Depart-

ment of Justice, Washington, D. C. 20530, counsel for the

respondent.

I further certify that all parties required to be served

have been served.

SYDNEY B. NELSON

555 Commercial National Bank Building

Shreveport, Louisiana 71101

Counsel for Petitioner

1]

APPENDIX A

UNIT © sTA.+S of America, Plaintiff-Appellee,

v.

Robert GRAY, Defendant-Appellant.

Nos. 74-2282, 74-2283.

United States Court of Appeals,

Fifth Circuit.

Feb. 7, 1975.

Appeals from the United States District Court for the

Western District of Louisiana.

Before RIVES, WISDOM and COLEMAN, Circuit

Judges.

RIVES, Circuit Judge:

After a six-day trial by jury, Robert Gray was convicted

of income tax evasion in violation of 26 U.S.C. § 7201 and of

filing a false and fraudulent income tax return in violation of

26 U.S.C. § 7206(1). The calendar years 1967 and 1968

constitute the period covered. Two judgments of conviction

were entered with sentences totaling six months’ imprisonment

to serve, five years on probation, and a requirement that, within

twenty-four months, he pay taxes due with penalties and interest.

On appeal, Gray makes no claim of insufficiency of

the evidence to support the jury’s verdict, but contends that in

the course of his trial the district court committed reversible

errors. We find no reversible error and hence affirm.

12

THE FACTS

Gray had some school training as an accountant. He

had been employed as bookkeeper for a construction company,

then for nine years as comptroller of an independent oil drill-

ing company. In 1966 he had formed a self-owned corpora-

tion, Tennky Petroleum Company. He testified that, “I drilled

twelve or fifteen wells myself” (App. 427). He also testified

to “quite a bit” of activity in the stock market. In 1968 his

purchases and sales had amounted to $206,747.72 (App. 485).

For the calendar year 1967 he reported the taxable

income of himself and his wife as $9,499.19, a figure less than

half of their true taxable income. For 1968 he reported taxable

income of $14,125.16, when it was actually nearly four times

that amount. The discrepancies were accounted for by items

of income not reported and deductions reported to which he

was not entitled. He admitted making profits in the stock

market which he forgot to report (App. 580, 581). He ad-

mitted also that in 1968 he had received from Southwest Pro-

duction Company a salary totaling $9,750.00 which he forgot

to report (App. 507). That $9,750.00 was paid by thirteen

checks for $750.00 each. At Gray's request Southwestern made

those checks payable to his corporation, Tennky Petroleum

Company. Gray testified that he picked up a check twice a

month, deposited it to the Tennky account and then wrote a

check to himself “presumably the same day” and deposited

that check to his personal account. He reported as income from

Southwest only the amount received on its W-2 tax form (App.

512). Tennky in turn issued no 1099 tax form in the name of

Robert Gray (App. 513).

“Q. Nothing et all went to the Government to indicate Rob-

ert Gray received $9,750.00, did it?

“A. That is correct.” (R. 513.)

13

Gray testified that he filed an amended return on Sep-

tember 2, 1969, and paid the tax due on the $9,750.00, but he

could not recall whether the Examining Agent had discussed

that with him prior to his filing the amended return. He testi-

fied further on cross-examination:

“Q. You are saying you do not recall today whether Agent

Farrar had discussed these omitted checks with you

prior to filing that amended return?

“A. No, sir, I don’t.

“Q. You said you did hear Agent Caldwell say you admitted

that to him?

“A. That is correct. I don’t remember admitting it to him.

I remember him testifying about it.

“Q. Your interview with him was January 8, 1970, wasn’t

it?

“A. Somewhere in there.” (R. 516.)

It was after the foregoing part of the cross-examination

of Gray that counsel for the government received permission

to approach the bench.

“(Whereupon there was a discussion at the bench between

the Court and counsel of out of the hearing of the jury).

“MR. GREER [Government Counsel]: Your Honor, |

intend to introduce evidence and cross examine the defen-

dant on additional items of income which he received and

did not report on his tax returns for the years 1967 and 1968.

These are both relevant and admissible inasmuch as it is

very much a part of this trial. These are similar acts and

they are the identical crime for which the defendant is on

trial here today.

14

“THE COURT: Mr. Nelson objects, I suppose, because

they are not alleged in the indictments. Since they are simi-

lar crimes the ruling is they are admissible to show intent.”

(R. 523.)

Mr. Nelson, counsel for Gray, did indeed most strenuously

object but the court adhered to its ruling with the caveat:

“I will have to charge the jury this is admissible only to

show criminal intent. In other words, if they are not to

convict him on this as a separate crime mentioned in the

indictment, but they are allowed to consider it.” (R. 525.)

The court did adequately so instruct the jury. Nonethe-

less, the ensuing vigorous cross-examination was, in all prob-

ability, extremely prejudicial to the defendant Gray. The

result of the trial really turned on criminal intent vel non.

Restriction on Number of Character Witnesses

At the beginning of the trial the government submitted

to the court a brief containing the following paragraph:

“The Government anticipates that the defendant will offer

the testimony of character witnesses in his behalf. Courts

in the past have been faced with the problem of where to

draw the line on limiting the number of character witnesses.

A limitation of character witnesses to three (3) has most

frequently been found appropriate and has been approved

by the Courts of Appeal. See United States v. Squella-

Avendano [478] F.2d [433] (C.A.5th, April 13, 1973);

United States v. Jacobs, 451 F.2d 530 (C.A.5th, 1971),

certiorari denied, 405 U.S. 955 [92 S.Ct. 1170, 31 L.Ed.2d

231]. The limitation of character witnesses is, of course, in

the Court’s discretion.”

After Gray’s third character witness had testified, a

colloquy between Gray's counsel and the court occurred.

-~

15

“MR. NELSON: If it please the Court, we have several

other character witnesses—

“THE COURT: It has been the unvarying rule of this

Court long before my time and upheld by the Fifth Circuit

Court of Appeals that character witnesses are limited to

three. We apply that rule here.

“MR. NELSON: For the record, because the character

and reputation is of such importanc® ‘a the type of cri:me

charged here, we respectfully object to the Court's ruling.”

(R. 403.)

[1] On appeal, Gray insists that the district court ap-

plied no discretion but arbitrarily used a fixed and unvarying

rule. Since the leading case on “character evidence,” Michel-

son v. United States, 1948, 335 U.S. 169, 69 S.Ct. 213, 93

L.Ed. 168, it has been well settled that trial courts are vested

“with discretion to limit the number of such witnesses and

control cross-examination.” 335 U.S. at 480, 69 S.Ct. at 220.

See also 6 Wigmore on Evidence, 3d ed. § 1908(2), pp. 580,

581; 2 Wright Federal Practice & Procedure. Criminal § 409.

However, this Court has not upheld any “unvarying rule” and

we agree with the annotation in 17 A.L.R.3d 327, at 335, that,

“The number of witnesses allowed to testify should not be

arbitrary or unreasonably restrictive, and prejudicial error

in those respects will entitle the injured party to relief. A

general rule of limitation applicable to all cases without

regard to the particular circumstances has been held to ex-

clude discretion and to be, therefore. unreasonable and

unlawful.” (Footnotes omitted.)

Professor Wigmore calls attention that the limitation

of the number of witnesses applies not only to reputation or

character but may be enforced “upon any point whatever”

(emphasis in text). 6 Wigmore on Evidence, 3d ed. § 1908(3),

16

p. 581. Especially pertinent to this case are Professor Wig-

more’s further remarks:

“It is sometimes required that the trial Court (with or

without the parties’ motion) announce before any witnesses

on the point are offered, that a limitation of the witnesses

upon the particular fact will be enforced, and a failure to

do this is said to prevent the enforcement of any limitation;

on the theory that, unless the party is thus advised of the

intended limit, he may be obliged to omit his most valuable

witnesses through not having known of the necessity of

choosing the best of the lot at his disposal. This requirement

has a plausible fairness in it, and is usually proper when

feasible. But it is not always feasible, because the judge

may not know of the party’s intention as to number of wit-

nesses; and it is not always proper for the judge to commit

himself to such a fixed limit before hearing any of the

witnesses. The trial Court’s discretion should be left to

determine whether such a prior notice was feasible and

desirable under the circumstances.” (Emphasis in text.)

(Footnote omitted.)

At pp. 585, 586. We think it clear that the district judge

meant no more than to recognize such a long-standing practice

which should “apply here”; that in fact he exercised a sound

and reasonable discretion in this particular case.

Permitting a Revenue Agent to Testify as a Summary

Witness and Introducing a Summary Chart or

Schedule of His Calculations

In his opening statement to the jury, counsel for the

government called attention to the necessity of introducing

many documents and corporate records, and further said:

“The law recognizes in this case no juror can be expected

to retain all this information and put it in the proper slot.

17

For that reason, the government is entitled to bring in an

expert to testify in the case. The law permits the expert to

listen to the testimony, examine the documents and testify

to his expert opinion as to what these documents mean and

what tax, if any, should have been paid by the defendant.

“You, as jurors, are entitled to give that expert’s opinion

the weight you believe it deserves. What I am saying is for

you to bear with us because a tax case is like a jigsaw

puzzle and at the end we will put it all together.” (R. 7-8.)

In accord with that announced strategy, the government

called as its last witness a revenue agent for the purpose of

summarizing the evidence and making the resulting tax com-

putations. Similarly, the defendant called as his last witness

a certified pubiic accountant who testified at length as to his

qualifications and as to a schedule summarizing the evidence.

The propriety of that practice in income tax cases was

clearly established by the Supreme Court in United States v.

Johnson, 1943, 319 U.S. 503, 519, 63 S.Ct. 1233, 87 L.Ed.

1546. Since Johnson, the practice has been accepted and fol-

lowed in cases too numerous to mention, some of which are

listed in the margin.’ The opinions in many of those cases

1 Cave v. United States, 8 Cir. 1947, 159 F.2d 464, 468; United States

v. Daisart Sportswear, 2 Cir. 1948, 169 F. 2d 856, 863; Kirsch v.

United States, 8 Cir. 1949, 174 F.2d 595, 601; Graves v. United States.

10 Cir. 1951, 191 F.2d 579, 584; Gross v. United States, 9 Cir. 1953,

201 F. 2d 780, 787; Wardlaw v. United States, 5 Cir. 1953, 203 F.2d

884, 885; Banks v. United States, 8 Cir. 1953. 204 F.2d 666, 670;

Beaty v. United States, 4 Cir. 1954, 213 F.2d 712, 720; White v. United

States, 5 Cir. 1954, 216 F.2d 1. 5; Steele v. United States, 5 Cir. 1955,

222 F.2d 628, 629-630; Smith v. United States, 6 Cir. 1956, 239 F.2d

168; Blackwell v. United States, 8 Cir. 1957, 244 F.2d 423, 431; United

States v. Kiamie, 2 Cir. 1958, 258 F.2d 924, 933: Barber v. United

States, 6 Cir. 1959, 271 F.2d 265; United States v. Willis, 3 Cir. 1963,

322 F.2d 548, 551; Wirtz v. Turner. 7 Cir. 1964, 330 F.2d 11. 14;

Barsky v. United States, 9 Cir. 1964, 339 F.2d 180; United States v.

Mackey, 7 Cir. 1965, 345 F.2d 499, 507.

18

quote from the opinion in Johnson, supra, written by Mr. Jus-

tice Frankfurter:

*“* * * The worth of our jury system is constantly and

properly extolled, but an argument such as that which we

are rejecting tacitly assumes that juries are too stupid to

see the drift of evidence. The jury in this case could not

possibly have been misled into the notion that they must

accept the calculations of the government expert any more

than they were bound by the calculations made by the de-

fense’s expert based on the defendants’ assumptions of the

case. So long as proper guidance by a trial court leaves the

jury free to exercise its untrammeled judgment upon the

worth and weight of testimony, and nothing is done to impair

its freedom to bring in its verdict and not someone else’s

we ought not be too finicky or fearful in allowing some

discretion to trial judges in the conduct of a trial and in the

appropriate submission of evidence within the general

framework of familiar exclusionary rules.”

319 U.S. at 519-520, 63 S.Ct. at 1241.

{2] On the trial, defendant avoided making a frontal

attack upon a practice so well settled. Instead, his first in-

sistence was that a summary witness was not needed in a case

no more complicated than this, that “there is an extreme in our

case. and a “real danger of a person who purports to be an

expert invading the province of the jury.” (R. 291.) The

district court disagreed, recounted the many exhibits and ex-

pressed its view that “the jury could not possibly understand

or correlate them without the assistance of an expert.” (R. 291.)

The judge stated further that the evidence would be admitted,

“* * * we think in the proper exercise of our discretion and

in order to assist the jury, but with a cautionary instruction,

conclusions reached by the expert as to whether or not there

19

was a deliberate, willful understatement of income is the func-

tion of the jury rather than the expert.” (R. 291.) Defendant's

counsel then stated: “[W]e would like to point out the de-

fendant is not by and large disputing the fact that he earned

the income asserted by the government. It is a matter of intent

and willfulness almost solely. The cases indicate there is a

little danger that the jury in hearing an expert testify will

conclude by the expert saying there is tax due that there is

guilt.” (R. 291, 292.)

After further colloquy, the jury was excused from the

courtroom pending a voir dire examination of the witness,

Malcolm L. Johnson. He had 171 years’ experience as a

revenue agent with the Internal Revenue Service, and had testi-

fied in two other criminal tax evasion cases. He was not a

graduate accountant, had little experience in oil and gas law,

and was not familiar with a “carried” working interest in an

oil well, nor with three Fifth Circuit cases dealing with the

income tax effects of a “carried” interest, viz., C. 1. R. v. J. S.

Abercrombie Co., 1947, 162 F.2d 338; Prater v. C. I. R., 1959,

273 F.2d 124; United States v. Cocke (en banc), 1968, 399

F.2d 433. The court was recessed overnight to permit Mr.

Johnson to read those three opinions and also for the Judge

to study and analyze those cases.

The importance of those cases to Gray's defense was

claimed because of the terms of his employment by Southwest,

Under a letter agreement dated August 15, 1967, Gray was

employed by Southwest Production Company. The agreement

provides:

“My beginning salary shall be $1500 per month, payable

on the Ist and 15th days of each month. In addition I shall

receive 5% of the economic interest retained by Southwest

Production Corporation and the related companies in all oil

and gas properties acquired after August 15, 1967, plus 5%

20

of the economic interest retained by those companies in any

leases presently owned on which leases wells are drilled in

the future. Economic interest is defined to include working

interest, overriding royalty, oil payment, production pay-

ment, etc.

“After November 15, 1967, either party wishing to termi-

nate this agreement may do so on 90 days written notice.”

(Gov't Exh. 22.) In practice, Southwest and Gray were in

accord that Gray's “economic interest” was free and clear of

any liability for intangible drilling expenses. As to current

operating expenses of a producing well, Southwest contended

that Gray should pay a proportionate share, while Gray claimed

that he did not owe any such costs. No drilling costs or operat-

ing costs were actually paid by Gray.

After the overnight recess for consideration of the three

cases (Abercrombie, Prater and Cocke), the district judge

stated to counsel his analysis of those cases and his conclusion

that they were inapplicable to the case on trial, except for

their possible bearing on the question of Gray’s good faith in

taking deductions for intangible drilling costs and for depre-

ciation upon the equipment necessary for production. We

agree.”

[3] The district court did not err in overruling the

defendant's objection to the competency of Johnson as an ex-

pert summary witness. Nor did the court err in allowing

Johnson’s testimony to be introduced with the court’s caveat to

the jury: in effect, that Johnson’s opinions were not binding

upon the jury but were meant to be helpful and were entitled

to such weight as the jury might see fit to accord them; that

2 On appeal. counsel does not seriously argue that Gray was entitled to

the deduction of $8,700.00 shown on his 1967 Tax Returns as “intangi-

ble drilling and dry hole expenses.” Gray's good faith vel non in claim-

ing that deduction was left to the jury.

21

the jury was bound by the judge’s instructions as to the law,

while the questions of criminal intent, willfulness, good faith

and other questions of fact were left ior the jury to determine.

We find no reversible error in the district court’s rulings on

the testimony of the government’s expert summary witness.

Cross-examination of Defendant

[4] On trial, as has been stated, Gray’s main defense

was that he acted in good faith and had no criminal intent. In

refuting that defense, the government could properly cross-

examine Gray as to similar acts of attempted income tax evasion

committed during the calendar years of 1967 and 1968, in

addition to the acts charged in the indictments. United States

v. Jernigan, 5 Cir. 1969, 411 F.2d 471; United States v.

Waller, 5 Cir. 1972, 468 F.2d 327; accord Ahrens v. United

States, 5 Cir. 1959, 265 F.2d 514; Wright Federal Practice &

Procedure, Criminal § 410.

We find no reversible error committed in the cross-

examination of the defendant. His cross-examination was

thorough and vigorous but nonetheless fair.

, The Court's Instructions to the Jury

[5] The court properly refused defendant’s requested

jury instruction No. 10, which concluded:

“Under court decisions by the United States Court of Ap-

peals for the Fifth Circuit, which includes Louisiana, a

carried party could, between the years 1947 and 1968, de-

duct his proportionate share of the cost of development and

operation of the well even though he did not spend any of

his own funds to pay for these costs. Commissioner of Internal

Revenue v. [J. S.] Abercrombie Co., 162 F.2d 338 (5th

Cir., 1947); Prater v. Commissioner of Internal Revenue,

273 F.2d 124 (Sth Cir., 1959); United States v. Cocke,

399 F.2d 433 (5th Cir., 1968).”

22

As has been developed, the cited cases had no relevance

to Gray’s tax liability. They might possibly bear upon the ques-

tion of whether he acted in good faith and without criminal

intent.

The court refused also defendant’s requested jury in-

struction No. 7 concerning willfulness and particularly charging:

“There must be specific wrongful intent to conceal an

obligation known to exist as compared to a genuine mis-

understanding of what the law required.”

[6] The court’s general charge included an instruction to

the same effect (R. 740). The court fully and properly in-

structed the jury that Gray could not be convicted because of

mistake, inadvertence or other innocent reason, but that will-

fulness and specific criminal intent must be proved.

Finding no reversible error, the judgment is

Affirmed.

23

APPENDIX B

CONSTITUTION OF UNITED STATES

AMENDMENT V.

No person shall be held to answer for a capital, or other-

wise infamous crime, unless on a presentment or indictment

of a Grand Jury, except in cases arising in the land or naval

forces, or in the Militia, when in actual service in time of War

or public danger; nor shall any person be subject for the same

offence to be twice put in jeopardy of life or limb; nor shall

be compelled in any criminal case to be a witness against him-

self, nor be deprived of life, liberty, or property, without due

process of law; nor shall private property be taken for public

use, without just compensation.

AMENDMENT VI.

In all criminal prosecutions, the accused shall enjoy

the right to a speedy and public trial, by an impartial jury of

the State and district wherein the crime shall have been com-

mitted, which district shall have been previously ascertained

by law, and to be informed of the nature and cause of the

accusation; to be confronted with the witnesses against him: to

have compulsory process for obtaining witnesses in his favor,

and to have the Assistance of Council for his defence.

26 U.S.C. 7201

Any person who willfully attempts in any manner to

evade or defeat any tax imposed by this title or the payment

thereof shall, in addition to other penalties provided by !aw,

be guilty of a felony and, upon conviction thereof, shall be

fined not more than $10,000, or imprisoned not more than 5

24

years, or both, together with the costs of prosecution. (68A

Stat. 851.)

26 U.S.C. 7206

Any person who—

(1) Declaration under penalties of perjury.—Willfull,

makes and subscribes any return, statement, or other document,

which contains or is verified by a written declaration that it is

made under the penalties of perjury. and which he does not

believe to be true and correct as to every material matter; or

(2) Aid or assistance.—Willfully aids or assists in, or

procures, counsels, or advises the preparation or presentation

under, or in connection with any matter arising under, the

internal revenue laws, of a return, affidavit, claim, or other

document, which is fraudulent or is false as to any material

matter, whether or not such falsity or fraud is with the knowl-

edge or consent of the person authorized or required to present

such return, affidavit, claim, or document; or

(3) Fraudulent bonds, permits, and entries.—Simu-

lates or falsely or fraudulently executes or signs any bond,

permit, entry, or other document required by the provisions

of the internal revenue laws, or by any regulation made in

pursuance thereof, or procures the same to be falsely or fraudu-

lently executed, or advises, aids in, or connives at such execu-

tion thereof: or

(4) Removal or concealment with intent to defraud.—

Removes, deposits, or conceals, or is concerned in removing,

depositing, or concealing, any goods or commodities for or in

respect whereof any tax is or shall be imposed, or any property

upon which levy is authorized by section 6331, with intent to

evade or defeat the assessment or collection of any tax imposed

by this title; or

25

(5) Compromises and closing agreements.—In connec-

tion with any compromise under section 7122, or offer of such

compromise, or in connection with any closing agreement under

section 7121, or offer to enter into any such agreement,

willfully—

(A) Concealment of property.—Conceals from any of-

ficer or employee of the United States any property belong-

ing to the estate of a taxpayer or other person liable in

respect of the tax, or

(B) Withholding, falsifying, and destroying records.—

Receives, withholds, destroys, mutilates, or falsifies any

book, document, or record, or makes any false statement,

relating to the estate or financial condition of the taxpayer

or other person liable in respect of the tax;

shall be guilty of a felony and, upon conviction thereof, shall

be fined not more than $5,000, or imprisoned not more than 3

years, or both, together with the costs of prosecution. (68A

Stat. 852.)

RULE 7. FEDERAL RULES OF CRIMINAL PROCEDURE

(f) Bill of Particulars. The court may direct the filing

of a bill of* particulars. A motion for a bill of particulars

may be made before arraignment or within ten days after

arraignment or at such later time as the court may permit. A

bill of particulars may be amended at any time subject to such

conditions as justice requires.