# Petition — Diez v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1212%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1976 - **Citation:** 423 U.S. 1052 ## Text a . Supreme Court, U. S, k itLED OCT 20 1975 MICHAEL RODAK, JR., CLERK IN THE | MUURARL RUUAR CL CLERK | Supreme Court of the United States OCTOBER TERM, 1975 No. 65-591 ( JOE RAYMOND DIEZ and PETER A. PALORI, Petitioners, vs. UNITED STATES OF AMERICA, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT RAYMOND E. LaPORTE 408 Madison Street Tampa, Florida 33602 ~ (813) 229-1891 Attorney For JOE RAYMOND DIEZ E. DAVID ROSEN 19 West Flagler Street Miami, Florida 33130 (305) 377-3736 Attorney For PETER A. PALORI FREE PRESS PUB CO inc TAMPA. FLORIDA INDEX Page Es 95s eWlgn a cnstabaen we eee nest eeedss 1 en ou os ods Jak da MEANS WUSNEN 60040 OK 1 CE, cc dens decvxehenevecsvseeeuae 2 STATUTORY PROVISIONS INVOLVED ............... 3 ES hig bas Os Walaa wa ee ee ee weeks 4 REASONS FOR GRANTING THE WRIT ................ 6 IE ck ost 3 4c hack She eueehad UY Ceveeue chee’ 7 cic aan si eck dekh Ne eES Kone 12 CRUE URGE NEED 0c cv vkx dene vedere sccess 0% 13 APPENDIX (Opinion Of The Court Of Appeals) ...App. A- 1 APPENDIX (Judgment Of The Court Of Appeals) ..App. A-17 APPENDIX (Order Denying Diez’s Petition For EE, Orns sui awene oe Ms 4 App. A-18 APPENDIX (Order Denying Palori's Petition For I Cie su oak bee ee coun App. A-19 APPENDIX (Extension Of Time To File Diez’s Petition For Writ Of Certiorari) ................. App. A-20 il CITATIONS Page California v. Green (1970), 339 U.S. 149, 90S. Ct. 1930, 26 L Ed 2d 489 ........... 12 Causey v. United States, I a i oh ae 11 Douglas v. Alabama, SN DT me Tne Sees Pee! Maer ern 12 Dutton v. Evans, i ea 9,12 Forman v. United States, ee eee cae eed os oe 8 Grunewald v. United States, a caauperebeeswed 8 Krulewitch v. United States, eee ad eeu eaten a Lutwak v. United States, ghana ceawexed a Ottomano v. United States, a 12 United States v. Clayton, I oo oid te MBit & 12 United States v. Puco, aL 423(1) Acts and declarations of coconspira- tors are binding upon each member of the conspiracy if made during the life of the conspiracy and in furtherance of any of its objects. 2. Criminal Law @=419(1) Where IRS agent’s statement, re- ported to second agent by coconspirator, of bis intention to classify defendant as a dealer in real estate was received not to prove that defendant was or had been classified as a dealer, but rather to prove that the first agent intended to regard him as one, the statement of the first agent was a “statement of the declar- ant’s then existing state of mind, emo- tion, sensation, or physica! condition (such as intent, plan, motive, design, mental feeling, pain and bodily health)” and fel! under the well-established ex- ception to the hearsay rule for such statements. Federal Rules of Evidence, rules 803(3), 805. 3. Criminal Law e410 Since, when IRS agent first inter- viewed defendant, defendant specifically referred the agent to an accountant for answers to any questions concerning tax- es, the statement thereafter made by the accountant constituted an “admission by an authorized agent” and was admissible against defendant irrespective of wheth- er the coconspirator exception applied. 4. Criminal Law @=422(1) in prosecution for conspiring to de- fraud the United States by impeding the Interna! Revenue Service in the coliec- tion of income taxes, involving a series of real estate transactions Letwecn 1965 and 1968, the hearsay stateinents made hey Number Claasiticaten y WEST PUBLISHING ©O and Kev Number Cisaaf INDEXED of ine cour A-2 6431 UNITED STATES v. DIEZ by coconspirator in 1972 were part of the central conspiracy itself, which had not terminated when those statements were made, and were thus admissible under the coconspirator exception to the hearsay rule. 5. Criminal Law =423(1) A statement need not be false in every detail in order to have been made in furtherance of a conspiracy to conceal and defraud. 6. Criminal Law @=423(1) Although isolated parts of coconspir- ators’ hearsay statements may have been true, the record showed that, taken as a whole, the statements were deceptive in design and were therefore in furtherance of the conspiracy, rendering them admis- sible under the coconspirator exception to the hearsay rule. 7. Criminal Law @423(3) In prosecution for conspiring to de- fraud the United States by impeding the Internal Revenue Service in the collec- tion of income taxes, the work papers of defendant’s accountant, an alleged co- conspirator, were admissible under the coconspirator exception to the hearsay rule, since the papers were prepared dur- ing the course of the conspiracy and were also in furtherance of the purpose thereof, namely, the filing of false in- come tax returns. 18 U.S.C.A. § 371; 26 U.S.C.A. (1.R.C.1954) § 7201. 8. Criminal Law @=>423(3) Accountant for unindicted coconspir- ator cou'd have testified to what his client told him concerning the ownership of subject land, since his client’s state- ments to him were those of a coconspira- tor during the course and in furtherance of a conspiracy to defraud the United States by impeding the Internal Revenue Crevice in the collection of income taxes. 18 U.S.C.A. § 371; 26 U.S.C.A. (LR.C. 1954) § 7201. 9. Criminal Law 2436 Availability of the declarant does not bar introduction of a document un- der the Business Records Act. 28 U/S. C.A. § 1732. 10. Criminal Law @419(12) In prosecution for conspiring to de- fraud the United States by impeding the Internal Revenue Service in the collec- tion of income taxes, involving a series of real estate transactions, a letter from an attorney for the seller of a parcel purchased and later resold by defendant, which letter stated that defendant was the actual mortgagor of the property even though the property was held in the name of defendant’s mother, was ad- missible over a hearsay objection, even though the attorney testified that an un- indicted coconspirator had told him that defendant was the mortgagor, since the coconspirator’s statement was made long before the conspiracy ended and was in furtherance of the conspiracy. 18 U-S. C.A. § 371. 11. Conspiracy @=48.1(2) In prosecution brought against uncle and nephew for conspiring to defraud the United States by impeding the Inter- nal Revenue Service in the collection of income taxes, the role of the uncle in the various real estate transactions in ques- tion was amply established by the government’s evidence, and his motion for acquittal was thus properly denied. 18 U.S.C.A. § 371; 26 U.S.C.A. (LR.C. 1954) § 7201. 12. Conspiracy #40 Mere association with members of a conspiracy is insufficient to establish a person’s participation in the conspir- BIST GO°Y 22°" ADE A-3 UNITED STATES v. DIEZ 6432 13. Criminal Law @1159.2(5), 1159.6 Guilty verdict must be sustained if there is substantial evidence, taking view most favorable to the government, to support it, and that standard is not changed by fact that government's case rested in substantial part on circumstan- tial evidence. 14. Criminal Law @622(2) In prosecution for income tax eva- sion and for conspiring to defraud the United States by impeding the Interna! Revenue Service in the collection of in- come taxes, the refusal of defendant's motion for a trial separate from his ac- countant was not an abuse of discretion, where, inter alia, defendant's proffer in support of his motion was bereft of ex- culpatory content and where said motion was made very late in the trial. 18 U.S. C.A. § 371; 26 U.S.C.A. (I.R.C.1954) § 7201; Fed.Rules Crim.Proc. rule 14, 18 U.S.C.A. 15. Criminai Law @622(3) For court to grant a severance mo- tion based on the unavailability of a co- defendant whose testimony is allegedly needed, the movant must show a bona fide desire to use the codefendant’s testi- mony, that the testimony will be excul- patory, that the codefendant will likely testify if the severance is granted, and that the motion is timely and will not impair the economy of judicial resources. 16. Criminal Law @622(1) Complexity of the trial, by itself, is insufficient ground for overturning trial court’s denial of a severance motion; in fact, in complex trials the pressures against severance are especially great because of the drain on judicial resources that would be created by separate trials. 17. Conspiracy #45 In joint trial of uncle and nephew on charge of conspiring to defraud the United States by impeding the Internal Revenue Service in the collection of in- come taxes, nephew's preconspiracy fi- nancial statement which purported to list nephew's outstanding obligations, yet made no mention of a loan from uncle, was admissible as evidence casting doubt on whether nephew had made a $3,200 interest payment to uncle for a loan, thus supporting government’s charge of a conspiracy to conceal nephew’s income. 18. Criminal Law @1169.5(2) In joint trial of uncle and nephew on charge of conspiring to defraud the United States by impeding the Internal Revenue Service in collecting income taxes, uncle could not have been preju- diced by the introduction of nephew's preconspiracy financial statement, which purported to list nephew's outstanding obligations yet made no mention of a loan from uncle, since the jury was re- peatedly instructed that statements of any conspirator made before the exist- ence of the conspiracy may only be con- sidered as evidence against the person making it. 19. Criminal Law @=437 In prosecution for conspiring to de- fraud the United States by impeding the Internal Revenue Service in collecting income taxes, the illustrative charts used by the government, while undeniably making assumptions concerning the proper attribution of income from the real estate transactions involved, had ample evidentiary support. 18 U.S.C.A. § 371; 26 U.S.C.A. (1.R.C.1954) § 7201. 20. Criminal Law @777 Where summaries are used in a prosecution for income tax evasion, the trial court should instruct the jury that the summaries do not, of themselves, constitute evidence in the case but only A-4 6433 UNITED STATES v. DIEZ purport to summarize the documents and detail evidence already submitted. 26 US.C.A. (1.R.C.1954) § 7201. 21. Criminal Law +437 In a criminal prosecution, it is with- in the trial court’s discretion to decide whether the Government may use illus- trative charts. Appeals from the United States Dis- trict Court for the Middle District of Florida. Before GIBSON ,* THORNBERRY and AINSWORTH, Circuit Judges. AINSWORTH, Circuit Judge: Peter A. Palori and Joe Raymond Diez appeal from convictions of conspiring to defraud the United States by impeding the Internal Revenue Service in the col- lection of income tax in violation of 18 U.S.C. § 371. Palori also appeals from his conviction on four counts of income tax evasion. 26 U.S.C. § 7201. Both defendants assign numerous errors in the trial court’s rulings concerning the ad- missibility and weight of hearsay evi- dence, the propriety of a joint trial of the defendants, and the possibility of prejudice from the Government’s use of illustrative charts. I. Factual Background The Government's case against Palori and Diez involved a series of rea! estate transactions in Tampa, Florida, between 1965 and 1968. The Government's theo- ry was that Palori was the real owner of shares of the various parcels sold in these transactions, but that he had ar- ranged for severa! of his relatives to act as nomina! owners or brokers in the transactions and to report part of the * Of the Eighth Circuit, sitting by des:pnation profits from the sales on their own tax returns. Palori’s mother, Minnie Lopez, reported profits from a number of the transactions on her returns and was in- dicted as a member of the conspiracy but acquitted. Diez, who is Palori’s uncle, reported part of the profit from one of the transactions, as weil as two broker- age commissions allegedly received in connection with other transactions, and interest on a loan he allegedly made to Palori. B. J. DeGuzman, Palori’s ac- countant during the tax years in ques- tion, reported part of the profit from one of the real estate transactions, and was indicted and convicted both for his role in the conspiracy and for preparing false returns—specifically those of Palori and his relatives.' The Government contend- ed that all of this income was properly attributable to Palori. James Garrett and Clarence Prevatt, two unindicted co- conspirators, also participated in seme of the transactions. Il. Evidence Allegedly Admitted in Violation of the Hearsay Rule A. Statements of Coconspirators {1} Palori and Diez contend that it was error to permit the introduction of several statements by Garrett and De- Guzman, two of their coconspirators, which, they argue, were inadmissible un- der the hearsay rule. The genera! prin- ciples governing the introduction of out- of-court declaratiors by one conspirator against another, for the truth of the matter stated, are clear: It is established law, at least since Krulewitch v. United States, 1949, 335 U.S. 440, 69 S.Ct. 716, 93 L.Ed. 790, and under so many cases prior to and following Krulewitch that it would be an affectation to cite them, thal acts 1. DeGuzman did not appeal hs conviction. A-5 UNITED STATES v. DIEZ 6434 and declarations of co-conspirators are binding upon each member of the con- spiracy, if made during the life of the conspiracy and in furtherance of any of its objects. United States v. Harrell, 5 Cir., 1970, 436 F.2d 606, 613. See United States v. Reg- ister, 5 Cir., 1974, 496 F.2d 1072, 1078. {2,3} The statements complained of were part of the testimony of Agents Brock and Hill of the Internal Revenue Service. Brock testified that DeGuzman told him, in an interview in November 1970, that during a prior audit another agent, named Hunting, had proposed to classify Palori as a dealer in real estate,’ and thus as ineligible for the special tax treatment usually given long-term capi- 2. The fact that DeGuzman’s statement, like numerous others introduced at trial, relied on a statement by another person does not render the testimony inadmissible. Agent Hunting’s statement, reported to Agent Brock by DeGuz- man, was a statement of his intention to clas- sify Palori as a dealer in real estate. The statement was received not Lo prove that Palo- ri was or had been classified as a dealer, but rather to prove that Agent Hunting intended to regard him as one. The statement was thus a “statement of the declarant’s then existing state of mind, emotion, sensation, or physical condition (such as intent, plan, motive, design, mental feeling, pain and bodily health)” and falls under the well-established exception to the hearsay rule for such statements. Fed.R. Evid. Rule 803(3). DeGuzman was therefore a competent witness to Hunting’s statement, just as Agent Brock was a competent witness to DeGuzman’s statement under the coconspir- ator rule. “Hearsay included within hearsay is not excluded under the hearsay rule if each part of the combined statements conforms with an exception to the hearsay rule provided in these rules.” Fed.R.Evid. Rule 805. The Federal Rules of Evidence were approved by Congress on January 2, 1975, and take ef- fect on the one hundred and eightieth day thereafter. The Rules are to be applied even in advance of their effective date “except to the extent that application of the rules would not be feasible, or would work [an] injustice.” tal gains.» DeGuzman also stated in in- terviews during July 1969 and July 1970, according to the testimony of Agents Brock and Hill, that he and Minnie Lo- pez had paid fees and brokerage commis- sions to Diez in connection with several of the real estate transactions in the case.‘ According to Agent Brock’s testimony, in an interview during January 1972 Garrett stated that Diez “didn’t partici- pate as a partner in any of Mr. Palori’s real estate transactions, nor did he per- form any services which would entitle him to a commission.” This statement, in contrast to that of DeGuzman con- cerning payment of fees and commis- sions, supported the Government’s con- United States v. Rivera, 2 Cir., 1975, 513 F.2d 519. See United States v. Arias-Diaz, 5 Cir., 1974, 497 F.2d 165, 170. 3. Palori made no objection to the introduction of this statement, either on the basis of the hearsay rule or on the basis of irrelevance, and admission of the testimony was not plain er- ror. Wright, Federal Practice and Procedure: Criminal § 856 (1969). Therefore, it seems doubtful that we can consider this assignment of error as to Palori. Moreover, Agent Hunt- ing was available and testified at trial. Nei- ther Palori nor Diez has explained why they did not attempt to cross-examine him or call him as a witness on this issue. 4. Because DeGuzman's statement is consistent with Palori and Diez’s version of the facts, it is unclear how admission of this testimony preju- diced defendants. Moreover, when Agent Brock first interviewed Diez he specifically re- ferred the agent to DeGuzman for answers to any questions concerning his taxes. DeGuz- man's statement, therefore, would appear to be an “admission by an authorized agent,” Hayes v. United States, 5 Cir., 1969, 407 F.2d 189, 192, and therefore would be admissible irrespective of whether the coconspirator ex- ception applies. In Hayes the accountant act- ed pursuant to a written power of attorney, but we know of no precedent requiring autho- rization by a written instrument. A-6 6435 UNITED STATES v. DIEZ tention that income properly belonging to Palori was being attributed to Diez as part of the conspiracy. Agent Brock, testifying as an expert witness, also stat- ed that in computing Palori’s income for 1965 he disregarded a check from Palori to Garrett, allegedly for the latter’s in- terest in a parcel sold in one of the transactions, because Garrett had told him (in the January 1972 interview) that he did not own an interest in the parcel in question.’ Palori and Diez contend that these hearsay statements were, at most, at- tempts to conceal the completed crime, and thus could not be introduced under the coconspirator exception to the hearsay rule. A review of the prior Su- preme Court cases convinces us that this argument must fail. In Krulewitch v. United States, 336 U.S. 440, 69 S.Ct. 716, 93 L.Ed. 790 (1949), the Supreme Court held inadmis- sible the hearsay statement of a cocon- spirator made after she had been ap- prehended. The Government argued that there was an implicit conspiracy to conceal the crime. The Court noted, however, that no such conspiracy to conceal had been charged in the indict- ment, and stated: It is beyond doubt that the central aim of the alleged conspiracy—transporta- 5. This testimony is largely repetitive of earlier testimony by Agent Brock. On cross-examina- tion his testimony strongly suggested that Gar- rett had told him he held no interest in the property in question. No objection was made by defendants. His testimony on redirect ex- amination, to which Palori objected, was large- ly repetitive of his answers on cross-examina- tion. Garrett's statement to the agents disavowing any ownership of a share in one of the parcels sold in 1965 was also introduced in the form of his tax return for that year, which contained no reference to gain from that sale. Palori tion of the complaining witness to Florida for prostitution—had either never existed or had long since ended in success or failure when and if the alleged co-conspirator made the state- ment attributed to her. 336 U.S. at 442, 69 S.Ct. at 718. In Lutwak v. United States, 344 U.S. 604, 73 S.Ct. 481, 97 L.Ed. 593 (1953), a conspiracy to conceal the crime was charged in the indictment, but the Court interpreted Krulewitch to require more than an unsubstantiated allegation: This Court in [Krulewitch] rejected the Government’s contention that in every conspiracy there is implicit an agreement as a part thereof for the conspirators to collaborate to conceal the conspiracy. 344 U.S. at 616, 73 S.Ct. at 489. The Court held in Lutwak that the Govern- ment had failed to prove a conspiracy to conceal the crime, and went on to discuss what kind of proof would be sufficient. See Grunewald v. United States, 353 U.S. 391, 403-405, 77 S.Ct. 968, 973-974, 1 L.Ed.2d 931 (1957). [4] It is unnecessary to apply the reasoning 22 1975 UNITED STATES OF AMERICA, EDWARD W. WADSWORTH CLERK Plaintiff-Appellee, versus JOE RAYMOND DIEZ and PETER A. PALORI, Defendants-Appellants. Appeals from the United States District Court for the Middle District of Florida ON PETITION FOR REHEARING ( August 22 » 1975 ) GIBSON*, THORNBERRY and AINSWORTH, Circuit Judges. PER CURIAM: T IS ORDERED that the petition for rehearing on behalf of Joe Raymond Diez filed in the above entitled and numbered cause be and the Same is hereby DENIED, ~~* OF the Eighth Circuit, sitting by designation. EOWARO W WADSWORTH c.sen A-19 Alnited States Court of Appeals PieTH CIRCUIT OFFICE OF THE CLERK @00 Cae sreter NEW OF. CONS La FOTO TEL EPRONE 604.569 6514 September 26, 1975 TO ALL COUNSZ2L OF RECORD No. 74-2641 - U.S.A. vs. Joe Raymond Diez aad veter A. Palori Guar Commaes: as to appellant, Peter A, Palori This is to advise that an order/has this day been entered denying the petition( ) for rehearing, and no member of the panel nor Judge in regular active service on the Court having requested that the Court be polled on rehearing en bane (Rule 35, Federal Rules of Appellate Procedure; Loeal Fifth Circuit Rule 12) the petition( ) for rehear- ing en banc has also been denied. See Rule 41, Federal Rules of Appellate Procedure for issuance and stay of the mandate. Very truly yours, LDWARD W. WADSYORTH, Clerk 4},? ‘ by ‘hag Deputy Clerk ce: “Mr, Raymond E, LaPorte Mr. E. David Rosen Mr. Claude Tison, Jr. if , —* / Supreme Court uf the United State No. 4.24} JOE RAYMOND NIL, ticioner V. ORDER EXTENDING TIME TO FILE PETITION FOR WRIT OF CERTIORARI Upon ConsiprraTIon of the application of counsel for petitioner( ), Ir Is OnpeRep that the time for filing a petition for writ of certioran the above-entitled cause be, and the same is hereby, extended to and includi lctober 2] 19 75 Lewis | Powell Associate Jusace of the Supreme Court of the United States Dated this - i7t! September _ 19 75 dav of --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1212%3A1. Public record. Not legal advice.