Petition — Ragano v. United States
Supreme Court brief1976
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IN THE
Supreme Court of the United States
OcToBER TERM, 1975
No. 5-120]
FrANK Racano, Petitwner,
v.
Unirep States oF AMERICA, Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
E. Davip Rosen, Esquire
Suite 130 Biscayne Building
19 West Flagler Street
Miami, Florida 33130
Tuomas T. STEELE, Esquire, of
FowLer, WHITE, GILLEN, Boaas,
VILLAREAL AND BANKER, P.A.
Post Office Box 1438
Tampa, Florida
Attorneys for Petitioner
Press or Byron S. ApAMs Parintine, Inc., Wasuincton, D. C.
TABLE OF CONTENTS
Page
NN TN o's Shc dn un coenvenddeees chateces couse 1
PE. Sb dnc deudeced canis ebaneess &écbawenves 2
I ES. ocd inne nse undsekecedvons wens 2
Constitutional Provisions and Rule Involved ........ 3
I I ii cnc peudn ab ceva scedessenes 3
De Ne 7h Siie heey o98ccnsaesiescen 3
Mh Sade och ss eadkhb ucGnsdioavaannnes 8
Ch NR SP ..oc chu sus sdveeetadenbanidnanenade 9
Reasons for Granting the Writ .................... 12
NS ci ccna acde ies kveebenkeusnd heheeoe ie 29
TABLE OF AUTHORITIES
CASES:
Ashe v. Swenson, 397 U.S. 436 (1970) ........ 19, 20, 21, 23
Ball v. United States, 163 U.S. 662 (1896) .......... 7
Blackledge v. Perry, — U.S. —, 94 S.Ct. 2098 (1974) .. 26
Bryan v. United States, 388 U.S. 552 (1950) .......... 17
Connelly v. Director of Public Prosecutions, (1964)
Sells HEE 5c Fa RKK KO eaN LR EKds bea ecadeeen ees 25
Forman v. United States, 361 U.S. 416 (1960) ...... 17
Glasser v. United States, 315 U.S. 60 (1942) ......... 3
Green v. United States, 355 U.S. 184 (1957) ..... 15, 18, 19,
20, 21
Leggroan v. Smith, 498 F.2d 168 (10th Cir. 1974) ... 17
State of Louisiana ex rel. Francis v. Resweber, 329
ee ee I ig ee ao ou os ae 17
Stroud v. United States, 251 U.S. 15 (1919) .......... 17
ii Table of Authorities Continued
Page
Trono v. United States, 199 U.S. 521 (1905) . .18, 19, 20, 21
Thomas v. United States, 450 F.2d 317 (5th Cir. 1971),
cert. denied, 409 U.S. 859 (1972) ...............
Time, Inc. v. Ragano, 427 F.2d 219 (5th Cir. 1970) ... 3
United States ex rel. Betts v. County Court for LaCross
County, 496 F.2d 1156 (7th Cir. 1974) .......... 17
United States v. Jasso, 442 F.2d 1054 (5th Cir.), cert.
ae Gs eer errr 17
United Siutes v. Lodwick, 410 F.2d 1202 (8th Cir.),
cert. demied, 396 U.S. 841 (1969) ............05- 16
United States v. Newman, 468 F.2d 791 (5th Cir. 1972),
cert. dented, 411 U.S. 905 (1973) .............65- 16
United States vy. Panzavecchia, 446 F.2d 1293 (5th Cir.),
cert. denied, 404 U.S. 996 (1971) .......ccccecees 17
United States v. Ragano, 520 F.2d 1191 (5th Cir. 1975) 2
United States v. Ragano, 476 F.2d 410 (5th Cir. 1973).. 1,8
United States v. Rosenthal, 454 F.2d 1252 (2nd Cir.),
cert. dented, 406 U.S. 931 (1972) ............... 16
United States v. Smith, 470 F.2d 1299 (5th Cir. 1973).. 17
United States v. Smith, 335 F.2d 898 (7th Cir. 1964),
cert. denied, 379 U.S. 989 (1965) ................ 14
United States v. Stapleton, 494 F.2d 1269 (9th Cir.
RRA Gee GAN INE IAL Re Pe ARS Bs ae 17
United States v. Tateo, 377 U.S. 463 (1964) .......... 17
CONSTITUTIONAL Provisions, STATUTES, AND RuLEs:
Constitution of the United States, Amendment V.... 3
Federal Rule of Criminal Procedure, Rule 29(a) .... = 3
Se Raa UE ME kc bcos 6% ie bed oa sR RACOwEsereNNaeN 9
Oe Me, 0 ED bs scuecuddeueuesenned senses 26
eS Ss, no bowen saeeeheaerscneneease 10, 13, 15, 16
Pe Ses ED duvecneedesseskastueennns 9,10, 15, 16
ee Oe Se ED 6o6sn cchueSecdnadhshs saneeurens 2
Cal. Pen. Code § 654 (West Supp. 1974) ............ 25
Ill. Rev. Stat. ¢. 38, §§ 3-3, 3-4(b)(1) (1974) ........ 25
Table of Authorities Continued iii
Page
MISCELLANEOUS:
R. Arguile, Criminal Procedure (1969) ............. 24
G. Bower, The Doctrine of Res Judicata (2nd ed. A.
I 656 cudde Uudlecs bec Uni iw iiie beds woe 24
Schaefer, Unresolved Issues w the Law of Double
Jeopardy: Waller and Ashe, 58 Cal. L. Rev. 391
PES WC-ee nin dee kanwaleonsesuauie sebustenasin 23
Note, Twice in Jeopardy, 75, Yale L.J. 262 (1965) ...24-25
ABA Minimum Standards for Criminal Justice,
Joinder and Severance 1.1, 1.3
CAmpeOwed TORTG TBGR) oc ccccsccccccovcces 24
Final Report of the National Commission on the Re-
form of Federal Criminal Laws: A Proposed
New Federal Criminal Code $$ 703-706 (1971) .. 24
Model Penal Code §1.07(2) (Proposed Official Draft
MEUM, ska aU CETN UM ea euaeted cheer eu uws beas 24
IN THE
Supreme Court of the United States
OctToBER TERM, 1975
No.
Frank Racano, Petitioner,
v.
Untrep Srates or AMEkicA, Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
Petitioner, FRANK RAGANO, by and through his un-
dersigned attorneys, prays that a Writ of Certiorari
issue to review the judgment of the United States
Court of Appeals for the Fifth Circuit in this case.
OPINIONS BELOW
The opinion of the United States Court of Appeals
for the Fifth Circuit in United States v. Ragano (Ra-
gano 1) is reported at 476 F.2d 410 (5th Cir. 1973), and
the opinion of the United States Court of Appeals for
2
the Fifth Cireuit in United States v. Ragano (Ragano
II) is reported at 520 F.2d 1191 (5th Cir. 1975). Ragano
I is reprinted in App. A, pp. la-l7a, tmfra, and
Ragano II is reprinted in App. B, pp. 18a-45a, infra.
JURISDICTION
The judgment of the Court of Appeals for the Fifth
Cireuit in Ragano II was entered on October 14, 1975.
It is reprinted in App. C, p. 46a, infra. This Court
has jurisdiction under 28 U.S.C, § 1254(1).
QUESTIONS PRESENTED
I. Whether the Double Jeopardy Clause Precluded Ragano’s
Retrial Under a Theory and Factual Characterizations
Contrary to the Theory and Factual Characterizations
Supporting the Conviction from Which He Appealed.
A. Whether Ragano’s prior acquittal on original Count I
for income tax evasion barred the subsequent prose-
cution for income tax evasion and for the lesser in-
cluded offenses of making false declarations in his
1966 and 1968 income tax returns.
B. Whether, by successfully appealing his conviction un-
der Count III of the original indictment, Ragano con-
sented only to be Retried under the particular theory
and particular factual characterizations that underlay
the appealed-from conviction.
C. Whether the “same transaction” or “same criminal
episode” test for double jeopardy barred the govern-
ment from reprosecuting Ragano under a different
legal theory.
II. Whether the Due Process Clause Precluded Ragano’s Re-
trial Under a Theory and Factual Characterizations Con-
trary to the Theory and Factual Characterizations Sup-
porting the Conviction from Which He Appealed.
III. Whether the District Court Erred in Denying Ragano’s
Motion for a Directed Judgment of Acquittal.
3
CONSTITUTIONAL PROVISIONS AND RULE INVOLVED
This case involves the Double Jeopardy Clause of the
Fifth Amendment to the United States Constitution
which, in pertinent part, provides that no person ‘‘shall
be subject for the same offense to be twice put in jeo-
pardy of life or limb.. .’’, the Due Process Clause of
the Fifth Amendment to the United States Constitu-
tion which, in pertinent part, provides that no person
may ‘‘be deprived of life, liberty, or property, without
due process of law... ,’’ and Rule 29(a) of the Federal
Rules of Criminal Procedure which, in pertinent part,
provides:
The Court on motion of a defendant or of its own
motion shall order the entry of Judgment of aequit-
tal of one or more offenses charged in the indict-
ment or information after the evidence on either
side is closed if the evidence is insufficint to sus-
tain a conviction of such offense or offenses.
STATEMENT OF THE CASE
A. Background Facts
The Petitioner, FRaNK RAGANO, is a prominent, albeit
controversial, ef. Time, Inc. v. Ragano, 427 F.2d 219
(5th Cir. 1970), Florida attorney who, in the past, has
engaged primarily in the practice of criminal law. In
the present case, the facts are substantially uncontra-
dicted and have been set out, in differing extents, in
both Fifth Cireuit decisions. For a proper considera-
tion of the issues raised in this Petiton, however, the
critical historical facis have been set forth below in the
view most favorable to the Government. See Glasser v.
lnited States, 315 U.S. 60 (1942).
In 1964 or 1965, co-Defendant, S. A. Rizzo, (Rizzo),
an acquaintance of Ragano’s, sought his assistance in
4
obtaining a $5,000,000.00 loan from the Teamsters Un-
ion Pension Fund. Rizzo wanted the money to buy and
to develop a large tract of land north of Miami, land
that he could purchase at a very favorable price because
he knew the owner, Mr. Ives, and had known him for
years. Ragano agreed to assist Rizzo in obtaining
financing for the project and, in the course of this as-
sistance, Ragano traveled to Chicago on numerous oc-
easions to diseuss the proposed loan with trustees and
other officials of the Pension Fund; in all probability,
these discussions involved and included James Hoffa,
though Ragano did not formally represent Rizzo nor
did he appear on Rizzo’s behalf at any meeting at which
the loan was officially considered.
The loan application was made on Rizzo’s beha!i on
February 9, 1965. A week later, on February 16, 1965,
the trustees of the Pension Fund voted to approve the
application. On Mareh 9, 1965, a commitment letter
was issued. The loan was later consummated by Rizzo’s
execution of a promissory note and mortgage. The
#5,000,000.00 loan allocated its proceeds as $3,500,000.00
for the purchase of the land, $1,000,000.00 for eonstrue-
tion and improvements and $500,000.00 for expenses,
including commissions on the loan.
On January 29, 1965, articles of incorporation had
been issued to Two Seasons, Inc., a Florida corporation,
organized for the purpose of acquiring, holding, and de-
veloping real estate. On February 9, the date on which
the lean application was formally submitted, the tra-
ditional dummy incorporators of Two Seasons met
for the purpose of electing Rizzo as president of the
company and chairman of its Board of Directors. All
fifty shares of capital stock in Two Seasons were issued
jointly to Rizzo and to his wife, who was also an officer
4)
and director of the company. On June 5, 1965, the
property purchased with the loan proceeds was trans-
ferred from Rizzo to Two Seasons.
On May 12, 1965, Ragano received $15,000.00 from
Two Seasons, charged to its ‘* Acquisition Costs”’ ae-
count. Beginning on November 15, 1965, and continu-
ing through 1967, Ragano received from Two Seasons
sums in amounts ranging between $200.00 and #50,-
000.00. These amounts were treated as loans on the
books of the corporation, but they were neither secured
nor evidenced by promissory notes and bore no interest.
Nor did Ragaio list eny of these loans as liabilities in
his financial statements.’
On January 3, 1967, certificates representing 20
shares of Rizzo’s stock in Two Seasons, a 40°, interest,
were cancelled and new certificates in the same amount
were issued to Ragano. On the same date, Ragano exe-
cuted an unsecured, non-interest bearing, demand note
in the amount of $40,000.00 payable to the Rizzos. In
March, 1967, but as of January 3, 1967, Ragano exe-
cuted a financial statement in connection with a loan ap-
plieation at the County National Bank of Miami Beach.
That statement jisted as assets the 20 shares of Two
Seasons stock, valued at $2,288,000.00; it did not, how-
ever, list as liabilities either the $50,000.00 note to
Rizzo or the loans from Two Seasons.
From about the time of Rizzo’s loan application,
Ragano began to procure a number of loans from the
Central Bank of Tampa, where he had been previously
The total of the loans was $90,550.00. However, $30,000.00 of
this amount was eventually transferred on the company’s books to
the *‘Legal Expense and Land Acquisition Costs’’ account, leaving
a loan balance of $60,550.00 at the end of 1967.
6
a customer. At the beginning of 1965, he had one loan
from this bank with a then outstanding balance of
$16,500.00. Between February, 1965, and October,
1967, Ragano obtained eight additional loans in face
amounts varying between $2,500.00 and $12,500.00.
Interest was paid on each of these nine loans through
September, 1967; no payments of principal were made
on any of the loans after September, 1965, except for
payments on one relatively small loan and three pay-
ments totalling $1,755.45 on two of the other eight
loans. Sometime in 1967 or 1968, Ragano delivered
10 shares of the Two Seasons stock to the bank for
the purpose of redelivery to such person as might be
designated at the time the loans should be repaid. As
of August, 1968, when all of the loans were paid in
full by a check drawn on a savings and loan institu-
tion and sent to the bank by Rizzo, the outstanding
balance was $51,108.12. The 10 shares were delivered,
in accordance with the instructions, to Rizzo’s agent.
On November 11, 1966, Ragano borrowed $25,000.00
from the County National Bank of North Miami
Beach. This loan was later renewed, and still later
combined with a second loan in the amount of $30,000.00
obtained on March 15, 1967. On December 6, 1967,
Ragano pledged the remaining 10 shares of Two Sea-
sons stock to secure payment of the combined loans.
On January 3, 1968, a third loan of $30,000.00 was
granted by the bank, nominally to Assured Home Im-
provement Co. The loan was guaranteed by Ragano
and was secured by the same 10 shares of Two Seasons
stock that he had used as security for the original two
loans. The loan proceeds were turned over to Ragano.
On April 18, 1968, the total balance of $68,364.08 was
paid by a check from Two Seasons and the stock was
delivered to Rizzo.
7
The 20 shares of Two Seasons had not been listed in
Ragano’s name during the full period between their
Formal transfer to him in January, 1967, and the date
in 1968 when Rizzo retrieved them from the banks.
The certificate representing the shares was cancelled
on March 24, 1967, and those shares were reissued to
Rizzo, making him, once again, the sole record share-
holder of Two Seasons. On November 6, 1967, the
shares were again reissued to Ragano, this time in the
form of two certificates representing 10 shares each;
this change made it possible to put up some of the
shares as collateral at each of the two banks.
On January 2, 1968, one day before Ragano obtained
the last of the bank loans, he and the Rizzos executed
a Stockholders Agreement providing that, if any share-
holder should pledge his stock as security for indebted-
ness and that indebtedness came into default, the re-
maining shareholders would havc the right to pay the
obligations for which any such shares were pledged
and would ‘‘become the owner thereof free and clear
of any claim of ownership by the other stockholders or
stockholder... .’’
On January 12, 1968, Ragano executed a handwrit-
ten codicil to the agreement in which he assigned the
20 shares to Rizzo ‘tin consideration for the said 8. A.
Rizzo assuming the present indebtedness of the under-_
signed to the Central National Bank of Tampa, Flor-
ida, and the County Bank of North Miami Beach,
Florida, and also holding the undersigned harmless
and no longer indebted to the said corporation (Two
Seasons) for loans made by the said corporation to
the undersigned’’. No mention was made in the eodi-
cil of any note or notes exeeuted by Ragano in Rizzo’s
favor.
8
The corporate and other indebtedness of Ragano
assumed by Rizzo in January, 1968, amounted to a
total of one hundred eighty thousand twenty-two dol-
lars and twenty cents ($180,022.20).
B. Ragano I
In Kiuited States v. Raygano, (Ragano I), 476 F.2d
410 (5th Cir. 1973), Ragano was charged in a three-
count indictment with violating the federal income tax
criminal penalty statutes. Specifically, Ragano was
charged with (i) attempting to evade taxes due and
owing for the calendar year 1967, in violation of 26
U.S.C. § 7201,° Gi) making a false declaration in his
1967 joint income tax return, in violation of 26 U.S.C.
§ 7206(1),* and (iii) making a false declaration in his
1968 joint income tax return, in violation of 26 U.S.C,
§ 7206(1).
In this initial prosecution, the Government con-
tended, and argued to the trial court and to the jury,
that the stock transfers in question were, indeed, bona
fide transactions, the tax consequences of which Ragano
726 U.S.C. § 7201 declares:
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 law, be guilty
of a felony and, upon conviction thereof, shall be fined not
more than $10,000, or imprisoned not more than 5 years, or
both, together with the costs of prosecution.
*26 U.S.C. §7206(1) declares that any person who
[willfully makes and subscribes any return, statement or other
document, which contains 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;
* * * * * ¥ € * ‘* *
shall be guilty of a felony and, upon conviction thereof, shall
be fined not more than $5,000. or imprisoned not more than
4 years, or both, together with the costs of prosecution.
9
had failed to report correctly. The thrust of the Gov-
ernment’s case was that Ragano had in 1967 received
the stock as ordinary income as a finder’s or brokerage
fee, had failed to report it as such in his income tax
return for 1967, and had mistreated the proceeds of
the sale of the stock in his 1968 income tax return by
claiming a capital gain. At no time did the Govern-
ment contend that the stock transactions were any-
thing other than ordinary, bona fide transfers. The
sole question was whether Ragano had, with criminal
intent, failed to report the stock as ordinary income.
The jury aquitted Ragano on both counts relating to
1967, but it convicted him under Count IIT of making
a false declaration in his 1968 joint income tax return,
in violation of 26 U.S.C. §7206(1). On appeal, the
Fifth Circuit reversed and remanded ‘‘the cause’? for
a new trial, holding that certain trial errors had de-
prived him of a fair trial.
Ragano II
The retrial on original Count IIL was set for July 9,
1973, but, at the request of Ragano, it was 1eset for
the week commencing August 6, 1975. On August 2,
1973, four days before the scheduled retrial, the fed-
eral grand jury returned a superseding six-count in-
dictment that charged Ragano with (i) conspiring
with one 8S. A. Rizzo to defraud the United States in
the collection of income taxes owed by Ragano for the
years 1966 and 1968, in violation of 18 U.S.C. § 371,
#18 U.S.C. § 371 declares:
If two or more persons conspire either to commit any offense
against the United States, or to defraud the United States, or
any agency thereof in any manner or for any purpose and one
or more of such persons do any act to effect the object of the
conspiracy, each shall be fined not more than $10,000 or im-
prisoned not more than five years, or both.
10
(ii) attempting to evade taxes due and owing for the
‘alendar year 1966, in violation of 26 U.S.C. § 7201(1),
(iii) making a false declaration in his 1966 joint in-
come tax return, in violation of 26 U.S.C. § 7206(1),
(iv) attempting to evade taxes due and owing for the
‘alendar vear 1968, in violation of 26 U.S.C. § 7201,
and (v) making a false declaration in his 1968 joint
income tax return, in violation of 26 U.S.C. § 7206(1).
The Distriet Court denied Ragano’s motion to dis-
miss the superseding indictment, but it severed the
trial of Co-Defendant 8. A. Rizzo. Upon retrial, a
jury convicted Ragano on all five counts. Ragano’s
post-trial motions for a new trial, for a directed judg-
ment of acquittal, and to dismiss the superseding in-
dictment were all denied, and Raganoe was sentenced
to five years’ imprisonment on Counts I, II, and IV,
and to three years’ imprisonment on Counts II! and
V, with the sentences on Counts II through V to run
eoneurrent with that on Count I. Execution of the
sentence was suspended, and Ragano was placed on
three years’ probation.
In this subsequent prosecution, the Government
abandoned its earlier contention that the stock trans-
actions were bona fide and, instead, rehabilitated its
prosecution by arguing that Ragano and Rizzo had
engaged in a series of sham stock transactions, con-
spiring together to disguise the ordinary income na-
ture of the money in question by these transactions.
Yet this second ‘‘theory’’ was nothing new to the Gov-
ernment. As the Government pointed out in its
‘Memorandum in Response to Defendant Ragano’s
Motion to Dismiss’’:
Undersigned counsel had always been critical of
the theory of the case as previously tried, and has
Pp a ee
11
expressly disassociated himself from it in the
course of the appeal... . Upon receiving the
assignment, counsel reviewed the entire evidence
and consulted with investigators with a view to
finding charges that would enable the Government
to present the evidence on retrial in the most in-
telligible manner. A determination was made to
seek a new indictment in substantially the form
originally recommended by the Internal Revenue
Service (except for the omission of any charge
having to do with offenses committed in the filing
of the 1967 return), and authorization was sought
from designated officers of the department of
justice.
Government Memorandum in Response to Defendant
Ragano’s Motion to Dismiss at 3-4 (emphasis added).
Additionally, in that same Memorandum, the Govern-
ment also stated: ‘It is also, it should be observed,
the theory on which the Internal Revenue Service had
urged that the case be presented ....” Id. at 7.
Thus, the Government’s own memorandum makes
clear that, at the time of the initial prosecution of
Ragano, the Government was fully aware of the ‘‘sham
transaction’? theory and deliberately elected not to
prosecute under that theory Rather, the Government
put aside that theory and chose to prosecute Ragano
under the ‘“‘bona fide stoek transfer’’ theory. Only
after it had failed to convict Ragano on two of the
three counts, and had lost its conviction on the third
count on appeal, did the Government resurrect its
alternative theory, the one that the IRS agents had
originally recommended as the basis of prosecution.
Appealing his conviction from this second, ‘‘sham
transaction”’ trial, Ragano argued that the retrial un-
der the superseding indictment violated his rights
12
under the Double Jeopardy Clause that the Govern-
ment’s prior advocacy of the bona fide transaction
theory entitled him to a directed verdict of acquittal
under the sham transaction theory, and that certain
trial errors were prejudicial. The Fifth Cireuit af-
firmed this conviction. United States v. Ragano, 520
F.2d 1191 (Sth Cir. 1975).
Ragano filed a timely Petition for Rehearing and
Suggestion for Rehearing En Banc, which was denied,
and he now files this his Petition for a Writ of Certio-
‘ari to the United States Court of Appeals for the
Fifth Cireuit. The Order denying his Petition for
Rehearing and Suggestion for Rehearing En Bane is
reprinted in App. D, p. 47a, infra.
REASONS FOR GRANTING THE WRIT
The instant case is unique in several respects, but
three points are critical to this Court’s analysis:
First, after a full investigation, the Government
elected in the original three-count indictment to prose-
cute Ragano in connection with the $180,022.20 on the
theory that, although the stock transactions were in-
deed valid, he had not treated their tax consequences
correctly. Hence, it must be assumed that the Gov-
ernment decided that the publie interest would best be
served, and that its chances of obtaining convictions
were best, by proceeding under this theory,
Second, the Goveriment lost two of the three counts
on which it proceeded, and it was required by the Fifth
Circuit, to afford Ragano a new trial on the third count
because of multiple trial errors.
mml,: — 7 anal ° ¢
Phird, instead of retrying Ragano on original Count
Il which it concededly could have done, the Govern-
aaa a a, eee
13
ment reindicted him on a new theory of prosecution
that charged that the stock transactions were, in fact,
asham. Thus, in the superseding indictment the Gov-
ernment made a 180 degree turn in its characteriza-
tion of the transactions in question. In Ragano I, the
stock transactions were coneededly valid; in Ragano
II, they were a “‘sham”’.
I. The Double Jeopardy Clause Precluded Ragano’s Retrial
Under a Theory and Factual Characterizations Contrary
to the Theory and Factual Characterizations Supporting the
Conviction from Which He Appealed.
A. Racano’s Prior AcguirraL ON OriginaL Count I
For Incomr TAX Evasion BARRED THE SUBSEQUENT
Prosecution For Income Tax Evaston AnD For
THe Lesser INCLUDED OrFENSES Or MAKING FALSE
DecLaRATIONs Ix His 1966 Anp 1968 INCOME Tax
RETURNS.
Section 7201, 26 U.S.C. § 7201, declares:
Any person who willfully attempts in any man-
ner to evade or defeat any tax imposed by this
title or the payment thereof shall, in addition to
other penalties provided by law, be guilty of a
felony and, upon conviction thereof, shall be fined
not more than #10,000, or imprisoned not more
than 5 years, or both, together with the costs of
prosecution.
In Count I of the original indictment, Ragano was
charged with violating Section 7201 with respect to the
calendar year 1967, The jury found him not guilty.
Thus, at the first trial Ragano was acquitted of attempt-
ing in any manner to evade or defeat any tar due and
owing on the alleged finder’s fee. This ‘‘Count”’ was
the sole tax evasion count in the original indictment.
In the superseding indictment, Ragano was charged
with, and was convicted of, violating Section 7201 in
14
1966 and 1968. This reindictment and subsequent con-
viction is barred by the Double Jeopardy Clause of the
Fifth Amendment to the United States Constitution.
The critical legal point to be remembered through-
out this discussion is not that each taxable year consti-
tutes a separate violation; that rule is so well-settled
as to be axiomatic. See, e.g., United States v. Smith,
330 F.2d 898 (7th Cir. 1964), cert. denied, 379 U.S.
989 (1965). Rather, the critical point here is that, in
both prosecutions, the Government was prosecuting
Ragano for attempting to evade the same tax on the
same fee, the same dollars. All that changed was the
Government’s characterization of the manner of. at-
tempted evasion.
In the first prosecution, the Government charged
that Ragano attempted to evade the tax on the alleged
finder’s fee when he received the shares of Two Seasons
stock in 1967. In the second prosecution, the Govern-
ment changed only its theory as to the manner by which
Ragano allegedly attempted to evade the proper tax on
the same alleged finder’s fee: again, the Government
charged that Ragano had attempted to evade the proper
tax on the alleged finder’s fee, but it proceeded on the
theory that the various loans, fees, and stock transfers
were merely sham transactions designed to camouflage
the receipt of the alleged finder’s fee. Thus, in both
prosecutions the Government sought to prove that
Ragano had attempted to evade ordina ry income tax on
the alleged finder’s fee: all that changed was the method
or manner employed by Ragano in the alleged attempt.
But Ragano had already, in the first prosecution, been
acquitted of evading tax on this amount “in any man-
ner.” That aequittal bars all subsequent prosecutions
for any attempt to evade the proper tax on the alleged
ee Oe
15
finder’s fee, and it also precludes prosecution for all
lesser included offenses arising out of the alleged at-
tempt.
The law is perfectly clear that, had Ragano been
convicted under original Count I of attempting to
evade this tax in violation of Section 7201, the ( jovern-
ment would have been barred from reprosecuting him
for attempting to evade the proper tax on te —_
alleged fee, but accomplished in a different gure
Yet, the Double Jeopardy Clause applies ane ay ;
reprosecutions following convictions of the san =
fense, but also to reprosecutions following acquitta S.
See, €.9g., Green V. lL nited States, 355 | S. 184 (1957).
Henee, having been acquitted of attempting to cry
‘‘in any manner’’ the proper tax on the alleged oe -
er’s fee, Ragano was immunized from further proseeu-
tion under Section 7201, regardless of the manner of
evasion charged by the Government, Having failed
onee to establish attempted evasion of tax on particu-
lar income, the Government is precluded by the sgn
Jeopardy Clause from reprosecuting Ragano fo : :
tempting to evade the same tax on the same income bu
in a different manner. Otherwise, with ponpeet, to
criminal income tax prosecutions under Section 7201,
the essential protections of the Double + eopardy Clause
become meaningless.
Beause the 1966 and 1968 convictions under Section
7201 are barred by the prohibitions of the Double
Jeopardy Clause, so also are the 1966 and 1968 ° con-
5 Although, at first blush, the Double | y opardy bar — S
available for the count alleging a violation of Section (2 :
the vear 1968 (since that is the same statute and same year “4
which Ragano was convicted and subsequently won a new a ys
such is not the ease. Again, the critical point to be rememberec
16
victions under Section 7206(1) barred. The law is
clear that Section 7206(1) describes a lesser included
offense of Section 7201, see, e.g., United States v. Lod-
wich, 410 F.2d 1202 (8th Cir.) cert. denied, 396 U.S
841 (1969), and convictions of lesser included tax of-
fenses must be vacated where the defendant has also
been convicted of the greater tax offense. See, e.g.
United States v. Newman, 468 F.2d 791 (Sth Cir.
1972), cert. denied, 411 U.S. 905 (1973); see aleo
United States v. Rosenthal, 454 F.2d 1252 (2nd Cir.)
cert. denied, 406 U.S. 931 (1972). Henee, sinee Ra-
gano’s reprosecution under Section 7201 for 1966 and
1968 is barred, so also is his prosecution for those vears
for an offense included within Section 7201. The con-
viction under the couspiracy count is also barred be-
cause it flows from the Government’s new, contrary
characterization and theory of Ragano’s alleged at-
tempt to evade the proper tax due on the alleged
finder’s fee, and this contrary characterization of the
Government's theory, as the next two subsections of
this Petition explain, violated Ragano’s Double Jeop-
ardy Clause rights in a slightly different way.
ix P : > .
on that, in Ragano I, the Government rehabilitated its prosecu-
tion of Ragano by characterizing the stock transfer transactions as
« ** ¢ ‘9 Ls hl . > « ’ ae
a “*sham."" Thus, in Kagano 1, the alleged false
. statement was
the cost basis of the Two Seasons, Tne. 1
. Shares. ,
however, the alleged false statement was Ragano’s et ee
to inchude in his J96S8 tax return a portion of the canne tae i
finder s fee. Dut this alleged finder’s fee was the me Foe (“
whieh Ragano had been tried, and acquitted, in Basses f wale
ingly, the Donble Jeopardy Clause barred Ragano’s re |
lation of Section 7296(1) for the year 1968 onde the (
subsequent recharacterized theory,
Aeccord-
‘trial for vio-
overnment’s
17
B. By SvuccessruLLY AppeaALinc His Conviction Un-
pER Count III or tHe OricinaL INDICTMENT,
Racano Consentep ONLY To Be Retrrrep UNDER
tHe PARTICULAR THEORY AND ParticuLAR Fac-
TUAL CHARACTERIZATIONS THAT UNDERLAY THE
APPEALED-F'ROM CONVICTION.
Although the Double Jeopardy Clause declares that
no person shall ‘‘be subject for the same offense to be
twice put in jeopardy of life or limb,”’ the courts have
developed a well-recognized exception to that rule:
a criminal defendant who successfully appeals his con-
viction has, in effeet, waived his Double Jeopardy de-
fense by winning a new trial. ‘‘[A] defendant who
appeals and is found entitled to a new trial has waived
his right to claim double jeopardy at the second trial.”
United States vy. Stapleton, 494 F.2d 1269, 1270 (9th
Cir. 1974). See also United States vy. Tateo, 377 U.S8
463 (1964); Forman v. United States, 361 U.S. 416°
(1960); Bryan v. United States, 338 U.S. 552 (1950) ;
Stroud v. United States, 251 U.S. 15 (1919); Ball v.
lL nited States, 163 U.S. 662 (1896) ; Leggroan v. Smith,
498 F.2d 168 (10th Cir. 1974); United States ex rel.
Betts v. County Court for LaCrosse County, 496 F.2d
1156 (7th Cir. 1974); United States v. Smith, 470 F.2d
1299 (5th Cir. 1973); Thomas v. United States, 450
F.2d 317 (Sth Cir. 1971), cert. denied, 409 U.S. 859
(1972): United States vy. Panzavecchia, 446 F.2d 1293
(Sth Cir.), cert. denied, 404 U.S. 966 (1971); United
States v. Jasso, 442 F.2d 1054 (5th Cir.), cert. denied,
404 U.S. 845 (1971); ef. State of Louisiana ex rel.
Francis v. Resweber, 329 U.S. 459 (1947).
Early court decisions held that the effect of the re-
quest for, and the winning of, a new trial wiped the
slate clean for both defense and prosecution. The
18
zenith of this view came with this Court’s decision in
Trono v. United States, 199 U.S. 521 (1905). There
the defendants had been convicted of assault but had
been acquitted of murder in the first degree. On " )-
peal, they were convicted of murder in the second Z
gree.” Instead of their original six month sentences
they were sentenced to eight years and fourteen years.
rin gen plea that the Double Jeopardy Clause
oO ep : : j :
: “ a enetiees a reopening of the case, the Supreme
‘ in our opinion the better doctrine is that which
sp not limit the court or jury, upon a new trial
~s — gr pees the question of guilt of the
‘er offense of which the ac |
f ‘ued was convicted
eg p trial, but that the reversal of the judg-
a o prt egioce opens up the whole contro-
hee 4 a we —= the original judgment as if it
é ‘ver been. 1e accused, by his ow
ad pr te sed, DY his own action,
po obtained a reversal of the whole judgment
_ par b . no reason why he should not, upon a
nened scon re a against as if no trial had
‘eviously taken place. We d
m ; ace, do not agree to tl
\ a ‘ » f)G+ge N ; n
oe - ee has the right to limit his
aiver as to jeopardy, when he ; .
as to j dy, » appeals from a
or age against him. As the judgment stands
eTore he appeals, it is a co e ba a Gon
Ss, If 18 a complete bar to any f
»y* “serge ° . ‘ " ur-
rrr prosecution for the offense set forth in the
Indictment, or of any lesser degree thereof. No
— ean wrest from him the right to so use that
yu ement, but if he chooses to appeal from it and
Oo ASK ‘yr’ : peyveres } »
cub 3 ig its reversal, he thereby waives, if sue-
ssful, his right to avail himself of the former
—_
6 T° éé °
nde —'? e
Spani ‘~ oP gier local procedures modeled upon pre-existing
Span isn pract ledge!’ (rreen Vv. Uni ’ ~OXISTING
* * . United States. 25% 178 .
(1957) t > , . - . CS, B)5 | SS. 184, 195
. the Philippine Supreme Court was empowered to revi ‘
both faets and law
: eles ebiit aw and to substit te ste & . :
trial court. ite its findings for those of tie
oe
Bee. a ee See He 1 ee in eee
ee ee
a th me lly Ce. ened areas
19
acquittal of the greater offense, contained in the
judgment which he has himself procured to be re-
versed.
199 U.S. at 533.
The Trono view of the sweeping, all-encompassing
effect of the appealing defendant’s waiver has subse-
quently been substantially restricted by two major
Supreme Court decisions: Green V. United States, 355
U.S. 184 (1957), and Ashe v. Swenson, 397 U.S. 436
(1970).
In Green, the defendant had been charged with (i)
committing arson by maliciously setting fire to a house
and (ii) causing the death of an inhabitant of the
house, At the first trial, the jury was instructed that,
as to the second count, it could find him guilty of either
first degree murder or second degree murder. The
jury found him guilty of arson and of second degree
murder, but it did not find him guilty of murder in
the first degree. He was sentenced to one to three
years’ imprisonment on the arson count and to five to
twenty years’ imprisonment for murder in the second
degree. Green then appealed and won a new trial on
the ground that the verdict was not supported by suffi-
cient evidence. On remand, he was retried, convicted
of murder in the first degree, and sentenced to death.
The Supreme Court reversed, holding that the Double
Jeopardy Clause barred the second prosecution for
first degree murder. Rejecting the Government’s
argument that the ‘‘total waiver” theory of Trono v.
United States, supra, controlled, the late Justice Black
declared:
The right not to be placed in jeopardy more than
onee for the same offense is a vital safeguard in
20
our society, one that was dearly won and one that
should continue to be highly valued. If such great
constitutional protections are given a narrow,
grudging application they are deprived of much
of their significance.
309 U.S. at 198 (emphasis added). Although not ex-
plicitly overruling Trono’s ‘total waiver”’ theory, the
Green decision makes clear that the Trono opinion was
not to be ‘‘extended beyond its peculiar factual set-
ting,’’ 355 U.S. at 197.
In Ashe v. Swenson, supra, this Court strengthened
the safeguards of the Double Jeopardy Clause even
further by holding that, as a matter of constitutional
necessity, it embodied the doctrine of collateral estop-
pel. But even more important to the present appeal,
this Court there sharply condemned prosecutorial re-
finement of a case upon retrial.
The defendant in Ashe had been accused of robbing
six men who were engaged in a poker game. Ashe was
first prosecuted for robbing one of the poker game
participants, but the jury acquitted him on the ground
of insufficient evidence. Six weeks later, Ashe was
brought to trial again, this time for robbing another
of the poker game participants, and was convicted.
The United States Supreme Court granted certiorari
and reversed, holding that the first jury’s determina-
tion that Ashe had not been present at the robbery
precluded the second prosecution. The Court, in an
opinion by Justice Stewart, held that the Double Jeop-
ardy Clause embodied the rule of collateral estoppel
and that, since the issue of Ashe’s presence at the rob-
bery had been determined adversely to the prosecution
in the first trial, the proseeution was precluded from
21
a second prosecution that hinged upon that same fac-
tual issue. |
Noteworthy in the Ashe decision is this Court s co
cluding statement, a statement highly pertinent anc
relevant to the present case:
“— : kly
this case the State in its brief has frank]
Pt that following the petitioner’s en
it treated the first trial as no more than - ry =
for the second prosecution: ‘‘No doubt t _—_ —
eutor felt the state had a provable case on the —
charge and, when he lost, he did what ev s y g ‘
attorney would do—he refined his presen ws ms
light of the turn of events at the first trial. =
this is precisely what the constitutional guarant
forbids.
897 U.S. at 447 (emphasis added). Although a nh
tual circumstances of Ashe are, of course, di es
from those in the present ease, the similarity . “
Government’s behavior in the present case to see od
havior condemned in Ashe is striking. Here, the oe
ernment admittedly tried Ragano, won only a pa ve
conviction, lost that conviction on appeal, oa .
completely recharacterized and rehabilitated i beac
for the sceond prosecution. Not content with a :
that the Fifth Circuit in Ragano T had explicitly ele
contained sufficient evidence to warrant —ronge un-
der original Count ILI, 476 F.2d at 413, the oe pe
ment ‘refined’? and rehabilitated its case in ~~.
the events and facts disclosed at the first ae a
can Ashe’s policy be distinguished on the groun 7
Ragano’s conviction here on the original Count 1 - it
effect kept open the entire matter for — se
The Supreme Court’s decision m Green * . a
States, supra, makes clear that the Trono view of a
unlimited waiver has been rejected.
22
The Double Jeopardy Clause must be held to pre-
clude the Government from taking an exactly contrary
view of the financial transaction or transactions in
question, in the present series of prosecutions, after
it has heard a defendant’s defense to a particular
prosecutorial theory. Otherwise, a criminal defendant
will necessarily be inhibited from making a full de-
fense at trial for fear that, if he is convicted and then
Wins a new trial on appeal, the prosecutor will be able
to devise a new theory of criminal liability to counter-
act the already-presented defense. The Double J eop-
ardy Clause should, therefore, be applied to preclude
the retrial of a defendant, after a successful appeal,
on any theory and factual characterizations other than
those that supported the reversed conviction.
Ragano here, by successfully appealing his eonvie-
tion under original Count III, waived only his double
jeopardy right not to be retried under that particular
theory and that particular view of the facts for that
particular offense. He did not consent, either explic-
itly or implicitly, to be retried under a new, rehabili-
tated prosecutorial theory that entailed an interpreta-
tion of the facts contrary to the interpretation put
forward by the Government in the first trial.
C. THe “Same Transaction’? On “Same Croan
Kpisope’’ Test For DovsLe Jeoparpy Barrep Tur
GOVERNMENT From Reprosecutinc RaGano UNpER
A Dirrerent Lecar THrory.
Instead of reproseeuting Ragano under original
Count IIT, which it certainly had the right to do, the
Government dismissed that indictment and charged him
with five counts, including a conspiracy count, that en-
abled it to assert that the various stock transactions
AE ee
23
were a sham. The conspiracy count was the critical
count in the reprosecution; the alleged conspiracy was
one designed to disguise the payment of the alleged
finder’s fee. Thus, the alleged conspiracy was integral
to the Government's new, rehabilitated theory of pros-
ecution.
The ‘‘same transaction”’ test for defining ‘‘offense”’
under the Double Jeopardy Clause bars the Govern-
ment from prosecuting defendants, such as Ragano,
under new and different theories of criminal liability.
The “same transaction” test for double jeopardy, as
advocated by Justice Brennan in his concurring opin-
ion in Ashe v. Swenson, supra, would require ‘‘the
prosecution, except in the most limited circumstances,
(footnote omitted), to join at one trial all the charges
against a defendant that grow out of a single criminal
act, occurrence, episode or transaction.”” 397 U.S. at
453-54. Justices Marshall and Douglas endorsed Jus-
tice Brennan’s view, but the late Justice Harlan eX-
pressly disavowed it. A majority of this Court, to this
date, has neither accepted nor rejected it. Neverthe-
less, in the view of Justice Schaefer of the IHinois Su-
preme Court, the failure of the majority in Ashe to
adopt the ‘‘same transaction’? test can in no way be
read as a rejection of that view. The Court decided
Ashe upon the narrowest possible ground, in accord
with sound judicial policy. Schaefer, Unresolved Is-
sues in the Law of Double Jeopardy: Waller and Ashe,
58 Cal. L. Rev. 391 (1970).
The ‘‘same transaction’’ test has been approved by
both the American Law Institute’s Model Penal Code
aud the American Bar Association’s Minimum Stand-
ards for Criminal Justice Relating to Joinder and Sey-
24
erance., Section 1.07(2) of the Model Penal Code pro-
vides:
[A] person shall not be subject to separate trials
for multiple offenses based on the same conduct or
arising from the same criminal episode, if such
offenses are known to the appropriate prosecuting
roa ad at the time of commencement of the first
rial.
Model Penal Code § 107(2) (Proposed Official Draft
1962). Similarly, the ABA Minimum Standards re-
quire compu'sory joinder of related offenses that ‘are
based upon the same conduct or arise from the same
criminal episode.” ABA Minimum Standards for
Criminal Justice, Joinder and Severance 1.1. 1.3 (Ap-
proved Draft 1968). See also Final Report of the Na-
tional Commission on the Reform of Federal Criminal
Laws: A Proposed New Federal Criminal Code
§§ 703-706 (1971). The collective opinions and reeom-
mendations of these prestigious legal institutions can-
net lightly be ignored,
The *‘same transaction” test, although long and vig-
oreusly advocated by critics of the present svstem of
permissive joinder? js not merely an intellectual fic-
ment, untried in the ‘treal world.”’) To the contrary, a
number of states presently apply, both statutorily and
through case law, the protections accorded by the
“same transaction”’ test. See Note, Twice In Jeopardy,
*B.g., Ro Arguile, Criminal Procedure 115-16 (1969) (‘Where
therefore, offenses may be joined, they ought to be joined”) ;
o. Bower, the Doctrine of Res Judicata 281 (2d ed, A. Turner
1969) (‘| T]he prosecutor is always to combine in one indictment
i a ae ‘
al! the charges which he intends to prefer, arising out of one trans-
action :). | | |
O45
75 Yale L.J. 262, 275ns. 60-62 (1965); Cal. Pen. Code
§ 654 (West Supp. 1975); Lil. Rev. Stat. ¢. 38, §§ 3-3,
3-4(b)(1) (1975). Moreover, England has abolished
its restrictive view of double jeopardy and has adopted
a rule of compulsory joinder of all known criminal of-
fenses in the initial prosecution. Sce Connelly v. Di-
rector of Public Prosecutions, (1964) A.C, 1254. In
the Connelly decision, Lord Devlin made it clear that,
in addition to curbing the potential for abusive re-
prosecutions, the House of Lords had another publie
policy in mind in adopting a rule of compuisory erim-
inal joinder: the courts must conduct their proceed-
ings so as to command the respect and confidence of the
public, so it is absolutely necessary that issues of fact
that are substantially the same be, whenever practica-
ble, tried by the same tribunal at the same time.
The United States Congress has recently enacted a
statutory version of the ‘‘same transaction’? compul-
sory joinder rule in the Speedy Trial Act of 1974, P.L.
93-619 (January 3, 1975), 18 U.S.C. §3161(d). See-
tion 3161(d) provides:
(d) If any indictment or information is dis-
missed upon motion of the defendant, or any
charge contained in a complaint filed against an
individual is dismissed or otherwise dropped, and
thereafter a complaint is filed against such defend-
ant or individual charging him with the same of-
fense or an offense based on the same conduct or
arising from the same criminal episode, or an in-
formation or indictment is filed charging such de-
fendant with the same offenses or an offense based
on the same conduct or arising from the same
criminal episode, the provisions of subsections (b)
and (¢) of this section shall be applicable with re-
spect to such subsequent com} laint, indictment, or
information, as the case may be.
26
18 U.S.C. $3161(d). Accordingly, Section 3161(d)
specifically provides, in effect, for a compulsory join-
der of all offenses **based on the same conduct cr aris-
ing from the same criminal episode... .”’
The *‘same transaction’? test, implemented by the
procedural rule of compulsory joinder of all known of-
ferises, has found widespread acceptance in all but the
federal courts. Henee, this Court should hold that the
Government, on the facts of this case, exceeded the con-
stitutional limitations on its prosecutorial powers when
it reindicted and retried Ragano under an entirely new
theory based upon substantially the same evidence pre-
sented at the first trial, and this Court should not per-
mit the conspiracy count conviction to preelude such a
determination. Under the ‘same transaction’? or
‘same criminal episode’? definition of ‘‘offense,’’ the
Government was barred from reprosecuting Ragano
under any charge save Count III of the original indiet-
ment.
II. The Due Process Clause Precluded Ragano’s Retrial Under
a Theory and Factual Characterizations Contrary to the
Theory and Factual Characterizations Supporting the Con-
viction from Which He Appealed.
In retrying Ragano under a presecutorial theory
diametrically opposed to that employed in the first
trial, the Government's conduct ¢ ntravened the Due
Process Clause of the Fifth Amencment to the United
States Constitution. Such conduct violated Ragano’s
constitutional right to be prosecuted according to our
criminal justice system’s norm of ‘fundamental fair-
ness”’. See Blackledge v. Perry, U.S, 94 S.Ct.
2098 (1974). In that decision, this Court made very
clear that the Due Process Guarantees prevent prose-
cutors from ‘‘upping the ante’’ riding on a criminal
—
27
defendant’s appeal. Here, Ragano sought and won a
reversal of his conviction under Count ILL of the orig-
inal indictment. Faced with genuine difficulties (but
of its own making) with retrying Ragano under Count
ILI, the Government resurrected the trial theory orig-
inally recommended by the IRS investigating agents.
At no time did the Government attempt to justify why
it should have been permitted to reject the theory of
the first trial and substitute the originally recommended
theory. The Government should not be permitted to
argue opposing theories of its case without being re-
quired to demonstrate a compelling reason for such a
switch, and the Due Process Clause of the Fifth
Amendment to the United States Constitution should
be read and applied to require the Government to
demonstrate such a compelling reason.
III. The District Court Erred in Denying Ragano’s Motion for
a Directed Judgment of Acquittal.
At both the close of Jie Government’s case and the
close of his defense, Ragano timely moved for a directed
judgment of acquittal. These motions were denied,
The Government, in its subsequent. prosecutions of
Ragano, has advanced two different, separate, distinct,
and factually inconsistent theories of criminal liability.
In Ragano I, the Government conceded that Ragano
acquired the shares of Two Seasons, Inc., as part of a
bona fide transaction; the thrust of its theory of crim-
inal liability was that, although the shares were actually
acquired by Ragano, the acquisition of the stock should
have been treated by Ragano as income in 1967 and,
therefore, upon the sale of the stock in 1968, there
should have been no gain or loss recorded. In Ragano
11, however, the Government ‘‘reversed its field’’ and
charged that the stock acquisition was a ‘‘sham’’, in-
tended to evade proper taxation on the alleged finder’s
28
fee. Thus, on the same facts, the Government took two
diametrically contrary views of the transaction or
transactions in question. By first prosecuting Ragano
unde ‘a theory that conceded the validity of the aequi-
sition of the shares of Two Seasons, Inc., the Govern-
ment, in effect, conceded for the record that a strong
probability existed that a jury could find that the ae-
quisition of the shares was a bona fide transaction.
Yet, in the second Prosecution, the Government
charged that the acquisition of the shares was, in fact,
not bona fide. Rather, the Government contended
that the acquisition was part of a sham transac-
tion. Obviously, as the Government’s multiple indiet-
meits and prosecutions show, the facts of the present
“ase give rise to at least two equally credible hypoth-
eses, both inconsistent on the factual basis of guilt.
To Say, as did the Fifth Cireuit in rejecting Ragano’s
contention that he was entitled to a directed verdict of
acquittal, that both characterizations lead to hypotheses
of guilt, misses the point; here, both characterizations
‘annot simultaneously support hypotheses of guilt.
In light of the Government’s admittedly inconsistent
treatment of the critical facts involved in Ragano’s
multiple prosecutions, it is clear that the inconsistency
of Ragano IT with Ragano IT requires that Ragano’s
conviction under the indietment in Ragano II be re-
versed and remanded with directions to the District
Court to enter a judgment of aquittal. Where the Gov-
ernment takes inconsistent factual and legal positions
in subsequent prosecutions of the same criminal defend-
ant, it should not be permitted to argue that, although
both theories are inconsistent, nevertheless, both point
toward guilt. Such an argument is, in effect, pleading
in the alternative, the inescapable result of which is that
the Government has conceded from the outset that the
stock transactions were, in all probability, valid.
29
CONCLUSION
This Petition for Certiorari presents several related
issues, but underlying each of these issues is the funda-
mental question of the extent to which the Government
may, upon retrial, reopen previously-decided questions.
Nowhere in its opinion did the Fifth Cireuit confront
the inescapable inconsistency and conflict between the
Government’s initial and subsequent theories of
Ragano’s criminal liability. By affirming Ragano’s con-
vietion, the Fifth Cireuit implicitedly sanctioned such
prosecutorial tactics. Yet the Fifth Cireuit’s sole com-
ment was:
So restricting the prosecution from proceeding
upon a new legal theory at retrial would erode
severally the gold served by permitting retrial of a
criminal defendant after the reversal of a convie-
tion.
520 F.2d 1198.
Nowhere did the Fifth Cireuit discuss the propriety,
let alone the desirability, of such prosecutorial behav-
ior. Accordingly, the real issues of the present case re-
mains undiseussed and unresolved.
In Ragano I, the Government characterized the finan-
cial transactions in one way; in Ragano 11, it advocated
a precisely contrary characteriza\ion. In Ragano J, the
Government prosecuted Ragano for attempted tax
evasion on the alleged finder’s fee and lost; in Ragano
II, the Government rehabilitated its prosecution by
charging Ragano, under a new theory of criminal liabil-
ity, with attempted tax evasion for two different years.
The result, of course, is that Ragano’s previous acquit-
tal for tax evasion for the year 1967 has been rendered
meaningless; and this result, no matter how the Gov-
ernment may seek to justify it, is forbidden by the
30
Double Jecpardy Clause of the Fifth Amendment to the
United States Constitution,
Apart from its **new’’ rehabilitated theory of crim-
inal liability, the Government also reprosecuted Ragano
under a different characterization of the facts. In
Ragano 1, the shares of Two Seasons, Ine., stock were
concededly transferred and Ragano was considered a
bona fide shareholder. In Ragauno 11, however, the Gov-
ernment flip-flopped and contended that the so-called
transfer was but a ‘*sham’’, In so doing, however, the
Government has conceded that a jury could just as
easily find a bena fide transfer as tind a **sham’’. Given
these opposite characterizations of the facts by the
Government, it should be precluded from contending
that either characterization is more likely to be true,
Finally, the Government's retrial of Ragano under
this different, inconsistent prosecutorial theory violated
his constitutional right to be prosecuted with ‘*funda-
mental fairness’’, in contravention of the Due Process
Clause of the Fifth Amendment to the United States
Constitution.
For the foregoing reasons, a Writ of Certiorari
should issue to review the Judgment of the United
States Court of Appeals for the Fifth Cireuit in this
case,
Respectfully submitted,
Kk. Davip Rosex, Eseuire
Suite 130 Biseavne Building
19 West Flagier Street
Miami, Florida 33130
Tuomas T. Sreerr, Esouire, of
Fow Ler, Wuire, GILLEN, Boaas,
VILLAREAL AND BANKER, P.A.
Post Office Box 1438
Tampa, Florida
Attorneys for Petitioner
APPENDIX
la
APPENDIX A
UNITED STATES COURT OF APPEALS,
FIFTH CIRCUIT.
No, 72-2954.
Unirep States or America, Plaintiff-Appellee,
v.
Frank Racano, Defendant-Appellant.
April 9, 1973.
By a judgment of the United States District Court for
the Middle District of Florida, at Tampa, Gerald B. Tjo-
flat, J., the defendant was convicted of the crime of filing
of income tax return which he did not believe was true in
every material respect and he appealed. The Court of
Appeals, Grooms, District Judge, held, inter alia, that
error of court in admitting testimony of revenue agent of
an alleged admission by defendant as to another person’s
testimony before state commission to the effect that de-
fendant had earned stock as a finder’s fee and as an at-
torney’s fee although defendant neither tacitly nor ex-
pressly admitted the truth of the testimony by the other
who was not a witness, was not harmless, where court’s
instruction anticipated an inculpatory response which did
not materialize and was misdirected.
Reversed and remanded.
Thornberry, Circuit Judge, filed a specially concurring
opinion.
1. Criminal Law § 1159.2(9), 1154.4(1)
It is not for reviewing court to weigh evidence or deter-
mine credibility of witnesses.
2a
2. Criminal Law § 1159.2(5)
Verdict of jury must be sustained if there is substantial
evidence, taking view most favorable to the Government,
to support it.
3. Criminal Law § 1159.2(7)
Reviewing court in considering sufficiency of evidence
does not determine whether it establishes guilt beyond rea-
sonable doubt but only whether the evidence would permit
trier of fact to find defendant guilty beyond reasonable
doubt.
4. Internal Revenue § 2451
There was sufficient evidence to establish defendant’s
guilt of violation of statute making it a crime to willfully
make and subscribe income tax return which taxpayer does
not believe to be true and correct as to every material mat-
ter arising out of transaction in which defendant acquired
stock in real estate development corporation for which he
had arranged a loan for developer. 26 U.S.C.A. (LR.C.
1954) § 7206(1).
). Criminal Law § 878(4)
Trial court did not err in denying motion of defendant,
found guilty of violating statute making it a crime to will-
fully file income tax return which taxpayer does not believe
to be true and correct, for an acquittal on ground of in-
consisteney of verdict which found defendant guilty on
such charge but acquitted him on counts one and two of
the indictment based upon defendant’s alleged failure to
report the receipt of the value of the stock as income
for specific year and for making a false statement as to
the same, 26 U.S.C.A. (1.R.C. 1954) § 7206(1).
3a
6. Criminal Law § 407(1)
Where defendant neither tacitly nor expressly admitted
testimony of another before state commission, testimony
of such other person before commission was not admis-
sible as an implied admission in prosecution of defendant
in which such other person was not a witness and was not
subject to cross-examination. 26 U.S.C.A. (1R.C.1954) §
7206(1).
7. Criminal Law § 407(1)
Where witness’ total response adds up to a clearcut de-
nial, no theory of implied admission is available to make
such evidence admissible as an exception to a hearsay rule.
8. Criminal Law § 662(1)
Confrontation clause of Sixth Amendment is not violat-
ed as long as the declarant is testifying as a witness and
is subject to full and effective cross-examination. U.S.C.A,
Const. Amend. 6.
9, Criminal Law § 1169.5(5)
Error of court in admitting testimony of revenue agent
as to an alleged admission by defendant regarding anoth-
er person’s testimony before state commission to the effect
that defendant, charged with crime of filing income tax
return which he did not believe was true in every material
respect, had earned stock as a finder’s fee and as an at-
torney’s fee although defendant neither tacitly nor ex-
pressly admitied the truth of the testimony by the other
who was not a witness in prosecution, was not harmless,
where court’s instruction anticipated an inculpatory re-
sponse which did not materialize and was misdirected. 26
U.S.C.A. (1.R.C0.1954) § 7206(1).
4a
10. Criminal Law § 470
Mere qualifying of witness as an expert does not neces-
sarily render his every conclusion immune from challenge,
and expert should not be allowed to state his conclusions
on the whole ease.
11. Criminal Law § 419(1)
Generally, testimony of an essentially factual nature
should not be predicated on opinions, inferences and con-
clusions of others.
12. Criminal Law § 470
Trial court committed error in refusing to strike ulti-
mate conclusion testified to by expert witness as to why
defendant, charged with crime of filing income tax return
which he did not believe to be true in every material re-
spect, should have reported the receipt of stock in 1967
return although answer related primarily to return in-
volved in another count since answer went to the key issue
involved in count of which defendant was convicted. 26
U.S.C.A. (LR.C.1954) § 7206(1).
13. Criminal Law § 1038.1(5)
Court’s instruction on presumption of knowledge of law
which properly submitted to jury the question of defend-
ant’s ignorance of law as that question related to specifie
intent was not such as to constitute plain error in absence
of objection by defendant who was convicted of filing in-
come tax return which he did not believe to be true in
every material respect. 26 U.S.C.A. (I.R.C.1954) § 7206
(1); Fed.Rules Crim.Proe. rule 52(b), 18 U.S.C.A.
14. Criminal Law § 822(6)
Taking court’s instruction as a whole there was no error
in any failure of court to define essential elements com-
da
prising the crime of filing an income tax return which tax-
payer does not believe to be true in every material respect.
96 U.S.C.A. (1.R.C.1954) § 7206(1).
Michael L. Kinney, St. Petersburg, Fla., John R. Park-
hill, Edward M. Waller, Jr., Tampa, Fla., for defendant-
appellant.
John L. Briggs, U. S. Atty., Jacksonville, Fla., Claude
H. Tison, Jr., Asst. U. S. Atty., Tampa, Fla., for plaintiff-
appellee.
Before Bert and Txornserry, Circuit Judges, and
Grooms, District Judge.
Grooms, District Judge:
: f a three
The appellant was conv. ied on Count ITI,, of
count indictment, of a violation of 26 U.S.C.A, § 7206(1).
Count III related to appellant’s 1968 return and charged
that on June 16, 1969, appellant knowingly made a false
declaration in claim to have sold 20 shares of Two Seasons,
Ine. stock for $230,022.20 that he had purchased for $00,-
000.00, and that the income of $180,022.20 was properly
treated as a long term capital gain.
*** Any person who—— 7
(1) Declaration under penalties of perjury. — Willfully
makes and subscribes any return, statement, or other doeu-
ment, 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
r .
matter; . 7 . - “ - o o e
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.
6a
. Tn late 1964 and early 1965 appellant assisted S. A. Rizzo
in obtaining a $5,000,000.00 loan from the Pension Fund
of the Teamster’s Union. The loan was to be used to bu
and develop 700 acres of land just north of Miami Flori.
da. The land which had an appraisal value of $9 500,000.00
was purchased for $3,500,000,00. Two engin. “se ons
organized by Rizzo for the purpose of acquiring holding
and developing the land. The property purchased, together
with the balance of the loan proceeds was traneforred
by Rizzo to the corporation, ) eat "
On January 3, 1967, a certificate representing 20 shares
of Rizzo’s stock in Two Seasons, Inc.. a 40% interest was
transferred to appellant, who on the same date ennented
& non-interest bearing demand note to Rizzo in the amount
of $50,000.00." On March 24, 1967. appellant’s stock cer
tificate was cancelled, and reissued to Rizzo echuneibie
for use by Rizzo as collateral. On November 6, 1967, the
er were reissued to appellant, who claimed that ‘der
md “a — the stock was in effect held in trust for
On January 12, 1968, appellant transferred his stock
to Rizzo in consideration of the cancellation of the $50,
000.00 note of January 3, 1967, and Rizzo's assumption of
appellant’s indebiedness to the County National Bank of
North Miami Beach in the amount of $68,364.08, to the
Central Bank of Tampa in the amount of $51,108.12, and
to Two Seasons, Ine. in the ; -
of eanneessn e amount of $60,500.00, a total
oy Much evidence was taken as to another note of July 16. 1965
ger by — to Rizzo in the amount of $50 000.00 Appel-
‘ claims that that note evidenced t} ulee of )
1e purchase price of the 2
shares of stock, but that he was " grees
' ‘ * was unable to borrow money
. Psa ‘Vv to Pav
off the note and that Rizzo would not issue the stock; that he a
informed that the note had heen lost; that Rizzo wished a Men
nage that in pr - vive a new note if the stock Was issued
/ him; and that the January 3. 1967 ai
pheregid anuary 3, 1967, note was executed °
stock issued pursuant to that understanding i
oe
-
a
7a
rs]
Beginning in 1965 and over a period of approximately
three years Two Seasons paid fees and expenses and made
loans to or on behalf of appellant of $252,552.09. llowever,
no amount was paid on the principal sum of $90,000.00,
The Government’s basic charge stems from its claim that
the real consideration for the issuance of the twenty shares
of Two Seasons stock was not a $50,000.00 debt evidenced
by the note but fees earned by appellant in procuring the
loan from the Pension Fund.
[1-3] A careful review of the evidence covering more
than eleven hundred pages of the transcript, leads us to
the definite conclusion that the sufficiency of the evidence
as to appellant's guilt was for the jury under the guiding
principles so frequently announced. Glasser .v. United
States, 315 U.S. 60, 80,° 62 S.Ct. 457, 469, 86 L.Ed. 680;
Gordon v. United States, 438 F.2d 858, 867* (5th Cir.).
(4] In reaching this conclusion we could not overlook
appellant’s testimony at a hearing in June 1968, before
the Shevin Committee of the Florida legislature in the
course of its investigation into organized crime, in which
he testified that the Two Seasons stock was a part of his
fee—‘a combination of attorney’s fees and I am in hope
of finder’s fees.’’ Nor appellant’s deposition of October
7, 1968, taken in connection with a libel suit that he filed
against Time, Ine., wherein he deposed that he had
achieved ownership of the stock, ‘‘partially for legal serv-
ices and partially as a finder’s fee.’’ Nor his second deposi-
2*It is not for us to weigh the evidence or to determine the
credibility of witnesses. The verdict of a jury must be sustained
if there is substantial evidence, taking the view most favorable
to the Government, to support it. United States v. Manton, 2 Cir.,
107 F.2d 834, 839.”’
*“<'T)n considering the sufficiency of the evidence who do not
determine whether it establishes guilt beyond a reasonable doubt,
but only whether the evidence would permit the triers of fact to
find the defendants guilty beyond @ reasonable doubt.
8a
tion on December 26, 1968, in the same case wherein he
again deposed to substantially the same statement; nor his
testimony in the case as follows:
‘*{Bjut the ultimate result was that I gave him $50,-
000 note for the stock, and that’s how I was able to
acquire the stock, regardless of how I labeled it.
Q. Regardless of how you labeled it, sir?
A. That’s right. If you recall, Mr. Dempsey, I said
this time and time again, it is a combination of find-
er’s fee and legal fees. I left that up to my aecount-
ant. I left it up to the IRS Agent. But when you come
down to it, whether after all that is said and done,
I never would have gotten the stock without the $50,-
000 note.’’
This answer appears to sum up appellant’s construction
of the consideration for the stock as well as his qualifica-
tions of prior statements.
Likewise, on the issue of wilfulness and intent we have
not overlooked appellant’s evidence that he laid the whole
transaction before the agents preceding the filing of his
1968 return and that he cooperated with them in supply-
ing whatever information that he had in his possession.
The fact that appellant bared his breast to the investigat-
ing agents and extended his cooperation would not exempt
him from prosecution and the penalties of the law, if he
nevertheless, proceeded to do what the law proscribed, )
[5] Counts I and IT of the indictment were grounded
upon appellant’s alleged failure to report the receipt of
the value of the stock as income for 1967, and in making
a false statement as to same, respectively. The jury found
appellant not guilty on these counts. He contends that there
is such repugnancy and inconsistency between the not guil-
ty verdicts on Counts I and IT and the guilty verdict on
Count III, that Count III eannot stand. Throughout the
aaa a
9a
trial appellant took the position that the stock had no value
on the date of its acquisition in January 1967; that its
enhancement from zero to the sum for which it was sold
in 1968 xesulted from the development of the property
during that period. Under this theory the jury could well
have found that there was no value to report for 1967,
or, at least, could have held that there was ample doubt
about the value. Other assumptions could be, but will not
be, indulged as a basis of the jury’s verdict on Counts I
and II. The court did not err in denying appellant’s mo-
tion for judgment of acquittal on the ground of inconsist-
ency of verdicts. Dunn v. United States, 284 U.S. 390, 52
S.Ct. 40, 76 L.Ed. 520; United States v. Panzavecchia, 446
F.2d 1293 (5th Cir.).
Appellant insists that there was error to reverse in the
action of the court in admitting the testimony of Revenue
Agent Greenwald of an alleged admission by appellant as
to Rizzo’s testimeny before the Florida State Beverage
Commission to the effect that appellant had earned the
stock ‘fas a finder’s fee, an attorney’s fee.’’? The issue was
first presented in the course of the prosecution’s opening
statement and was represented to the court as being an
admission by appellant of Rizzo’s testimony. Over objee-
tion the court ruled that appellant having responded to
the statement. the statement of the agent became ‘‘res-
gestae of admission.’’
The question was again presented in the course of the
direct examination of appellant’s accountant, Andretta.
The court stated that anything that appellant said in the
course of the interview with the agent would constitute
‘‘an admission exception to the hearsay rule,’’ and that it
was necessary in order to determine the extent of the ad-
mission to have not only what appellant said but what was
said to appellant. The court further stated that he would
instruct the jury that it could not consider the comments
made by Rizzo to prove the truth of the assertions of
10a
Rizzo, but that the jury could consider the comments in
the context of appellant’s response.°
When Greenwald took the stand, counsel for appellant
reminded the court that he had objected to the conversa-
tion in the October 1968 conference as to what Rizzo had
testified to when the accountant was called. The court re-
plied by instructing the jury as to the consideration to
be given to the conversation, the statement of Rizzo, and
the response of appellant,’ following which Greenwald tes-
tified that:
‘‘A. I told Mr. Ragano that I was aware of testimony
that Rizzo had given to the State Beverage Depart-
ment, wherein Mr. Rizzo had testified that Ragano
had received the stock for services rendered. I asked
Mr. Ragano whether that was true, whether they were
legal fees. Mr. Ragano replied no, it was not for serv-
ices rendered in that he had bought the stock for
$50,000 note. He said the books of Two Seasons would
bear this out.
* Counsel for appellant stated that he would object when the
time came, in reply to which the court ruled that it was not neces-
sary to object.
°“*Tue Court: Ladies and Gentlemen of the Jury, in telling
you what transpired between himself, Mr. Greenwald, and the de-
fendant in the form of conversation, it is anticipated that Mr.
Greenwald is going to relate the conversation, and in relating
the conversation he will say some things that Mr. S. A. Rizzo told
h.m in the defendant’s absence. In other words, during his con-
versation with the defendant, he may occasionally say, ‘Mr. S. A.
Rizzo said such and such to me, and what do you have to say
about that,’ or words to that effect.
‘‘Now, you may not consider what he relates, the witness relates
as having been said by S. A. Rizzo out of the defendant's presence.
You may not consider that as going to the truth of the matter
of the statement that S. A. Rizzo said, but you may consider the
defendant's response to those statements.’’
nr ee eee a be ee ee oe
lla
‘*Q. Did he indicate if he was aware of Mr. Rizzo’s
testimony?
‘¢A. He said he was aware of it.’’
Greenwald also testified with respect to a further confer-
ence in May 1969, when Mr. Adair, an agent now deceased,
was present:
‘‘A. Mr. Adair pointed out to Mr. Ragano that the
statements of Rizzo that the stock had been given to
Ragano as a legal fee, and that there was no other
consideration.
Ragano said that he did not know why Rizzo had
testified this way, but it was not true.”’
Defendant’s witness Whyte was cross-examined as to a
telephone conversation between him and Greenwald which
related to the witness’s awareness that Rizzo had testified
before the Beverage Commission that the stock had been
given to appellant for services rendered.
In his closing argument the prosecutor put the matter
flatly as follows:
‘‘fAlnd we know from the evidence that Mr. Rizzo
testified that the payments of stock which had been
made to Mr. Ragano in January of 1967 were pay-
ments to Mr. Ragano for legal fees.’’
[6, 7] Appellant neither tacitly nor expressly admitted
the alleged statement by Rizzo. On the contrary he flatly
denied the truth of any such statement, Certainly in the
face of his denial, appellant’s knowledge of Rizzo’s testi-
mony can hardly be construed as an admission. Where the
witness’s (otal response adds up to a clear-cut denial, even
any theory of implied admission is not available. MeCor-
mick, Handbook of the Law of Evidence, at 528 (1954 Ed) ;
Com. v. Twombly, 319 Mass. 464, 66 N.E.2d 362, and
12a
People v. Wysocki, 267 Mich. 52, 255 N.W. 160. ‘‘A flat
denial [is] in no sense an admission.’’ Twombly, supra.
[8, 9] The confrontation clause of the Sixth Amendment
is not violated as long as ‘‘the declarant is testifying as a
witness and subject to full and effective cross-examina-
tion.’ California v. Green, 399 U.S. 149, 90 S.Ct. 1930, 26
L.Ed.2d 489. But here Rizzo did not testify, and, of course,
was not subject to cross-examination. In short the prose-
cutor succeeded in getting Rizzo’s testimony before the
jury and in exploiting it in his closing argument without
calling Rizzo as a witness. He now seeks to avoid the con-
sequences of his action by a resort to the harmless error
rule and the court’s instruction that the jury could not
consider what Greenwald related as having been said by
Rizzo as going to the truth of Rizzo’s statement. Success-
fully getting Rizzo’s statement before the jury was not
the result of a passing incident but of a persistent and
sustained efiort. The court’s instruction anticipated an in-
culpatory response by appellant that did not materialize,
and was consequently misdirected.
In the recent case of United States v. Johnson, 5 Cir.,
439 F.2d 885 (1971), where hearsay testimony was intro-
duced solely to show that customs agents were on the
lookout for defendant, and not to show the truth of what
the informer said, and where the court accepted the ruling
and instructed the jury accordingly, Judge Rives, speaking
for this court, said:
‘“‘The government next argues that the statements
of the informer at most constituted harmless error
under Fed.R.Crim.P, 52(a). Erroneous admission of
evidence can often be corrected by appropriate jury
instructions, Conner v. United States, 5 Cir. 1963, 322
F.2d 647. But before a constitutional error can be held
harmless, the court must believe it harmless beyond
a reasonable doubt. Chapman v. California, 1967, 386
U.S. 18, 22-24, 87 S.Ct. 824, 17 L.Ed.2d 705.”’
ee
l3a
In Bruton v. United States, 391 U.S. 123, 137, 88 S.Ct.
1620, 1628, 20 L.Ed.2d 476, the court ruled that it could not
‘‘accept limiting instructions as an adequate substitute for
petitioner’s constitutional right of cross-examination,’’ in
the context of a joint trial, where a co-defendant implicated
petitioner in a written cofession, but did not take the stand.
In Pointer v. Texas, 380 U.S. 400, 85 S.Ct. 1065, 13 L.Ed.
2d 923, where it was held that the trial court was in error
in admitting the transcript of the testimony of an absent
witness taken on a preliminary hearing when the defend-
ant was without counsel, the court stated:
‘‘There are few subjects, perhaps, upon which this
Court and other courts have been more nearly unani-
mous than in their expressions of belief that the right
of confrontation and cross-examination is an essential
and fundamental requirement for the kind of fair trial
which is this country’s constitutional goal.’’
In Krulewitch v. United States, 336 U.S. 440, 69 S.Ct.
716, 93 L.Ed, 790, involving a hearsay statement by a co-
conspirator to the complaining witness some six weeks
after transportation in violation of the Mann Act, the
court stated:
‘*It is contended that the statement attributed to the
alleged co-conspirator was merely cumulative evi-
dence, that without the statement the case against pe-
titioner was so strong that we should hold the error
harmless under 28 U.S.C. (1946 ed.) § 391. In Kottea-
kos v. United States, 328 U.S. 750 [66 S.Ct. 1239, 90
L.Ed. 1557], we said that error should not be held
harmless under the harmless error statute if upon
consideration of the record the court is left in grave
doubt as to whether the error had substantial influ-
ence in bringing about a verdict. ... We cannot say
that the erroneous admission of the hearsay declara-
l4a
tion may not have been the weight that tipped the
scales against petitioner.’’
Barton v. United States, 263 F.2d 894 (Sth Cir.), was a
ease involving the admissibility of an unsigned statement
of a co-defendant given out of the presence of the defend-
ant, Mitchell, and a motion for a severance. The court in
reversing ruled:
‘‘The sole reliance for Mitchell’s protection was the
court’s instruction to the jury, several times repeated,
not to treat the statement as evidence against Mitchell.
Considering the substance and terms of Barton’s state-
ment, we doubt whether it was at all possible to carry
out that instruction. To do so certainly would require
twelve minds more perfectly disciplined than those of
the average human jurors.
‘“‘The Government argues that a separate trial for
Mitchell would have made no difference in the out-
come, because ‘Mitchell was bound hand and foot by
the most awesome array of evidence imaginable, quite
apart from the confession of Barton.’ We cannot, how-
ever, substitute ourselves for the jury, whose duty it
was to pass upon Mitchell’s guilt or innocence.’’
See also, Douglas v. Alabama, 380 U.S. 415, 85 S.Ct. 1074,
13 L.Ed.2d 934.
Appellant’s ‘‘admissions’’ with respect to the considera-
tion for the stock were not unequivocal but qualified, The
jury should have been permitted to consider their weight
unburdened by inadmissible hearsay. We conclude there
was error and that the evidence of guilt in this case was
not so overwhelming as to render the error harmless, as
‘
was found by the Supreme Cout in Schneble v. Florida,
405 U.S. 427, 92 S.Ct. 1056, 31 L.Ed.2d 340, and by this
lida
court in Hoover v. Bete, 5 Cir., 467 F.2d 516, under the
facts of those cases.
Appellant challenges the action of the court in overrul-
ing his motion to strike the answer of witness Brock as to
why appellant should have reported the receipt of the
stock in his 1967 return. The witness answered: ‘‘ Because
this is the year that he received pay for services rendered
in the form of stock.’’
Though the question and answer related primarily to
the 1967 return involved in Count I, the answer went to the
key issue involved in Count I1Il—the crux of the Govern-
ment’s charges against appellant in reporting the transac-
tion as a long term capital gain rather than ordinary in-
come.
[10,11] The Court is not unmindful of the modern trend
to abandon the rule allowing experts to express an opinion
upon ultimate issues when the opinion is otherwise admis-
sible.” The mere qualifying of a witness as an expert, Pas-
chal v. United States, 306 F.2d 398 (5th Cir.), does not
necessarily render his every conclusion immune from chal-
lenge. Experts ‘‘ought not to [be] asked or allowed to
state their conclusions on the whole case.’’ United States
v. Spaulding, 293 U.S. 498, 506, 55 S.Ct. 273, 277, 79 L.Ed.
617. ‘‘It is generally agreed that testimony of an essential-
ly factual nature should not be predicated on the opinions,
inferences and conclusions of others.’’ Paschal, supra.
The Sixth Cireuit in Kentucky Trust Co. v. Glenn, 6 Cir.,
217 F.2d 462, had for consideration the claim that certain
trusts had been created in contemplation of death, The
question and the answer by the agent of the Internal
Revenue Service were as follows:
‘**Upon what facts or circumstances, did you base your
determination that the Trust estates were part of
7 See proposed New Federal Rules of Evidence, Rule 704 and
note thereunder.
l6a
Mr. Schmidt’s estate?’ The answer was: ‘Well, my
determination was made by the fact that the Will, the
Trust instruments and the life insurance policy as-
signinents were all made at practically the same time.’’
The court, in ruling that the trial court erred in overruling
the objection, stated:
‘*The testimony of the government witness as to why
he made the determination to the effect that the trusts
in question were made in contemplation of death in-
vaded the province of the jury and permitted the
witness to express his opinion as to the ultimate fact.
The witness should not have been permitted to testi-
fy, in effect, why he believed the deceased made the
trusts in contemplation of death. The testimony was
incompetent and prejudicial.”’
[12] The court erred in overruling appellant’s motion
to strike.
[13] The court’s instruction on presumption of the
knowledge of the law * was not such as to constitute plain
error under Rule 52(b), Fed.R.Crim.P. There was no ob-
jection to the charge. The first part of the instruction is
identical to the charge before the court in Edwards v.
United States, 334 F.2d 360 (Sth Cir.), Note 3, and held
to be not such plain error as to require a reversal. The last
sentence properly submitted to the jury the question of
appellant’s ignorance of the law as that question related
***Tt is not necessary for the prosecution to prove that the de-
fendant knew that a particular act or failure to act is a violation
of law. Unless and until outweighed by evidence in the case to the
contrary, the presumption is that every person knows what the
law forbids, and what the law requires to be done. However, evi-
dence that the accused acted or failed to act because of ignorance
of the law, is to be considered by the Jury in determining whether
or not the accused acted or failed to act with specific intent, as
charged,’’
ee PL
i ee ee
| note ila Gach, a ent y AT
, 17a
to specific intent. The court’s action finds support in
Wardlaw v. United States, 5 Cir., 203 F.2d 884, where it
was held that whether the defendant acted under a bona
fide misconception of income tax law in failing to report
income was for the jury on the issue of knowledge and
willfulness.
[14] Taking the court’s instruction as a whole, we
likewise find no error in any failure of the court to define
the essential elements comprising the offense charged in
Count IIT.
Appellant claims that he was denied a fair trial be-
cause of the cumulative effect of a series of prejudicial
and unfair tacties by counsel for the Government. We have
carefully considered these claims, and must frankly state
that in certain particulars counsel went to the outer limits
of legality. However, in those particulars the court was
prompt and firm in its efforts to eradicate any resulting
prejudice; and in view of such efforts we are reluctant to
and will not hold that it did not succeed in doing so.
Although the court’s action in overrnling the objections
to the admission in evidence of the income tax returns of
Rizzo and Two Seasons, Inc., was not challenged on this
appeal, we, however, in the interest of trial economy deem
it
18a
APPENDIX B
UNITED STATES COURT OF APPEALS,
FIFTH CIRCUIT.
No. 74-2376.
Unrrep States or America, Plaintiff-A ppellee,
v.
Frank Racano, Defendant-Appellant.
Oct. 14, 1975.
Following a remand by the United States Court of Ap-
peals, 476 F.2d 410, the United States District Court for
the Middle District of Florida, at Tampa, Ben Krentz-
man, J., entered a judgment finding defendant guilty on
five counts of income tax charges including charge of con-
spiracy, and he appealed. The Court of Appeals, Simpson,
Circuit Judge, held inter alia, that following the defend-
ant’s successful appeal of his conviction for false swear-
ing to income tax return, Government was not precluded
by collateral estoppel or double jeopardy from trying the
defendant on the false swearing charge on a wholly new
theory, that corporate reports were properly admitted un-
der the Business Records Act, that corporate tax returns
were properly admitted for limited purpose, that court
properly refused to allow admission of letter from person
not a witness and that evidence was sufficient to sustain
cons iction,
Affirmed.
1. Criminal Law § 193
Where defendant by successful appeal secures reversal
of a conviction, a retrial for the same events does not put
him twice in jeopardy. U.S.C.A.Const.Amend. 5.
19a
2. Judgment § 713(1)
Doctrine of ‘‘collateral estoppel’’ means simply that
when an issue of ultimate fact has been once determined
by a valid and final judgment, that issue cannot again be
litigated between the same partics in any future lawsuit.
See publication Words and Phrases for other ju-
dicial constructions and definitions.
3. Judgment § 751
Where Government prosecuted taxpayer for false swear-
ing on tax return on theory that although taxpayer’s sale
of stock was a valid long-term capital gain transaction,
original receipt of stock by taxpayer was income which
should have been reported on his earlier return as income
and taxpayer successfully appealed his conviction, Goy-
ernment was not precluded by collateral estoppel from
retrying taxpayer on same charge of false swearing on new
theory that the stock transaction was a shain to disguise
payments to taxpayer in the form of loans and that the
loans were income to taxpayer on which income taxes wer>
due and owing. 26 U.S.C.A. (1.R.C.1954) § 7206(1); U.S.
C.A.Const. Amend. 5.
4. Criminal Law § 1177
Under concurrent sentence doctrine, if conviction is sus-
tained as to conviction under count 1 of the counts as to
which concurrent sentences were imposed it is unneces-
sary to determine legality of conviction under the remain-
ing counts.
5. Conspiracy § 28(2)
Conspiracy is not the commission of crime which it con-
templates and neither violates nor arises under statute
whose violation is its object.
20a
6. Conspiracy § 28(2)
3
_ . . . .
Commission of substantive offense and entering a con-
spiracy to commit that offense are separate and distinct
and ordinarily a person may be convicted or sentenced for
both.
7. Criminal Law § 1192
Where defendant taxpayer was successful in obtaining
reversal of conviction on count of complaint charging the
making of a false declaration in tax return, upon retrial
the Government was not precluded from adding to the in-
dictment a count, not contained in the original indictment,
charging conspiracy to defraud Government in the col-
lection of revenue.
8. Criminal Law §419(1), 436
Corporate reports filed with various departments of
state of Florida purporting to list all directors, officers,
and, in one instance, shareholders of corporation during
period taxpayer purportedly owned stock satisfied require-
ments of Federal Business Records Act, qualified as ex-
ceptions to hearsay rule and were admissible in prosecution
of taxpayer nce motive to assure accuracy was fulfilled
by fact that each was required by state to be filed as a
condition of corporate existence and loss of corporate priv-
ilege could result from failure to file or by filing intention-
ally false documents, 28 U.S.C.A. § 1732(a); West’s F.S.A.
'§ 608.04, 608.041, 608.351.
9. Criminal Law § 45
To be admissible under the Business Records Act, ree-
ords must be kept pursuant to some routine procedure de-
signed to assure their accuracy, they must be created for
motives that would tend to assure accuracy and they must
not themselves be mere accumulations of hearsay or unin-
formed opinion. 28 U.S.C.A, § 1732(a). ‘
ee
MDG Pal: 62 AAP Chap entnde
2la
10. Criminal Law § 444
Failure of Government to lay a foundation in form of
testimony by employee of corporation as to procedures
used in preparing and filing corporate documents was not
fatal to their admission under the Business Records Act in
taxpayer’s prosecution for income tax violation, in light of
stipulation as to their authenticity and fact that they were
filed and prepared in the regular course of business. 28
U.S.C.A. § 1732(a).
11. Criminal Law § 436
Taxpayer’s testimony as to his strained relations with
corporate officer affected only the weight to be aecorded to
the corporate documents, admitted under the Business Rece-
ords Act in income tax prosecution to show that transfer
of stock to taxpayer and his sale thereof was a sham, and
not their admissibility. 28 U.S.C.A. § 1782(a).
12. Criminal Law § 1169.2(7)
Since corporate records, admitted under the Business
Records Act in prosecution of taxpayer for purpose of
showing that stock transfers between corporation and tax-
payer was a sham, were similar in form and tenor to doc-
uments which were already in evidence and which also
failed to list taxpayer as either an officer or director, and
both an employee of corporation and an officer testified
that in the realm of their duties they had never any knowl-
edge of taxpayer having authority of an officer or direc-
tor of corporation, documents were merely cumulative of
other evidence that taxpayer was not an officer or director
and any error in their admission was harmless. 26 U.S.C.A.
(1.R.C.1954) § 7206(1).
13. Criminal Law § 486
Admission in prosecution of individual taxpayer, in-
volved in corporate stock transaction of corperate tax re-
22a
turns for limited purpose of use by government expert
Witnesses in arriving at valuation of corporation's stock
was not error, and furthermore did not prejudice case of
defendant taxpayer whose loan application valued stock
greatly in excess of value placed thereon by government
testimony. 26 U.S.C.A. (1.R.C.1954) § 7206(1),
14. Criminal Law § 433
Where taxpayer’s counsel in prosecution for false swear-
ing on income tax return involving corporate stock trans-
action was permitted on eross-examination of taxpayer’s
accountant to use letter from corporate accountant to tax-
payer’s accountant to the full extent requested and sub-
sequently taxpayer’s attorney declined to eall corporate
accountant as a witness trial judge did not err in refusing
to permit contents of letter to be published through tax-
payer’s accountant, since letter embodied the opinion of
corporate accountant as to tax consequences of stock trans-
actions.
15. Criminal Law § 1159,2(1)
Proper standard for review to be applied irrespectively
of whether evidence is direct or circumstantial is whether
reasonable minds could conclude that evidence was incon-
sistent with accused’s innocence.
16. Internal Revenue § 2451.6
Evidence at second trial was sufficient to establish tax-
payer’s guilt of false swearing to income tax return not-
withstanding fact that Government’s theory in first trial
resulting in conviction, which was reversed on appeal, was
that although defendant acquired corporate stock in valid
transaction he treated tax consequences incorrectly while
at second trial Government proceeded on new theory that
stock transactions were a sham to mask the payment of a
finder’s fee to taxpayer. 26 U.S.C. (I.R.C.1954) § 7206(1).
-
oe
23a
E. David Rosen, Miami, Fla., Michael L. Kinney, Thom-
as T. Steele, Tampa, Fla., for defendant-appellant.
John L. Briggs, U. 8. Atty., Jacksonville, Fla., Claude
Tison, Jr., Asst. U. S. Atty., Tampa, Fla., for plaintiff-
appellee.
Appeal from the United States District Court for the
Middle District of Florida.
Before Wispom, Stmpson and Rowey, Circuit Judges.
Srmpson, Circuit Judge:
This appeal requires us to review for the second time
the conviction upon income tax related charges of Frank
Ragano, a Florida attorney. See United States v. Ragano,
5 Cir. 1973, 476 F.2d 410. A description of the prior pro-
ceedings before the district court and on appeal is essen-
tial to an understanding of the issues raised by the present
appeal.
The appellant was charged in a three count indictment
returned July 14, 1971, with tax evasion and false swear-
ing. Count 1 charged him with tax evasion in his 1967 tax
return in failing to report taxable income of $180,022.20,
in violation of Title 26, U.S.C., Section 7201." Count 2
charged appellant with knowingly making a false declara-
tion of income, under penalty of perjury, in his 1967 tax
return, in that he knowingly received substantial income
in excess of that reported, in violation of Title 26, U.S.C.,
1 § 7201. Attempt to evade or defeat tax
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 law, be guilty
of a felony and, upon conviction thereof, shall be fined not
more than $10,000 or imprisoned not more than 5 years, or
both, together with the costs of prosecution.
24a
Section 7206(1).? Count 3, related to Ragano’s tax return
for the calendar year 1968 and charged that he knowingly
made a false declaration that he had sold for $230,022.20
certain shares of stock in Two Seasons, Inc., obtained by
him in consideration for a $50,000 promissory note, and in
the resulting claim that the income of $180,022.20 was
properly treatable as long term capital gain, in violation
of Title 28, U.S.C., Section 7206(1). At the trial on these
counts the government contended that the receipt by ap-
pellant in 1967 of certain shares of stock should have
been reported as taxable ordinary income in that year.
The appellant maintained that he had purchased the shares
in 1967 when he executed the promissory note and that
the retransfer of the shares to the original seller was a
legitimate capital gain transaction. The jury returned a
verdict of not guilty as to Counts 1 and 2 and guilty under
Count 3. Appellant appealed his conviction and sentence
under Count 3 and this court reversed and remanded.
United States v. Ragano, supra.
In the prior appeal the reversal rested on two eviden-
tiary matters. First, we held that the trial court erred
in allowing a tax expert for the prosecution to testify
that receipt of the shares of stock by appellant was pay-
ment for services. We held additionally that appellant’s
Sixth Amendment right of confrontation was infringed
by the admission into evidence over objection of testimony
that S. A. Rizzo, from whom the stock was obtained, had
testified in an unrelated proceeding, to the effect that the
* § 7206. Fraud and false statements
Any person who—
(1) Declaration under penalties of perjury. — Willfully
makes and subscribes any return, statement, or other docu-
ment, 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....
PO eA NE A a I POR le
sme
ee 6d eee
OO 5 ON sate Rete AO A LEB lS Me me
ry
25a
stock had been given to Ragano for services rendered.
United States v. Ragano, supra, 476 F.2d at 415.
Prior to the scheduled date of retrial on the original
Count 3, a superseding six count indictment was returned
against appellant. Count 1 charged appellant and Rizzo °
under Title 18, U.S.C. § 371, with conspiracy to defraud
the United States in the collection of revenue, by agreeing
to disguise the payment of a ‘‘finder’s fee’’ to appellant
as a stock transaction on which he would claim a long
term capital gain. Counts 2 and 8 charged appellant with
tax evasion and false swearing in his tax return for the
calendar year 1966 for failure to report $29,556.22 of in-
come, in violation of Sections 7201 and 7206(1). Counts
4 and 5 chaged Ragano with tax evasion and false swear-
ing in his tax return for the calendar year 1968 by failing
to report income of $35,645.44, in violation of Sections
7201 and 7206(1), Count 6 charged Rizzo with a 7206(1)
offense, respecting his 1969 return’s treatment of the Two
Seasons stock delivered to Ragano. Count 6 was severed
prior to trial and later dismissed. Note 3, supra. Appellant
moved to dismiss the indictment on grounds of former jeo-
pardy and collateral estoppel. The district court denied
appellant’s motion, finding that the offenses charged in the
superseding indictment were not identical to those in
Counts 1 and 2 of the original indictment, and that no
issue of fact as to any count of the superseding indictment
could be said to have been resolved in appellant’s favor
at the first trial. A jury found appellant guilty of all five
counts, and he was sentenced to five years imprisonment
on each of Counts 1, 2, and 4, and to three years imprison-
® Rizzo’s motion to sever the charges against him was granted
prior to trial. Subsequently, Rizzo’s motion to dismiss the indict-
ment as to him as granted, for reasons unrelated to this appeal.
* Appellant first moved for dismissal of Count 5 on the ground
that he was denied a speedy trial. Subsequently, he enlarged his
collateral estoppel contention te include Count 5.
26a
ment on each of Counts 3 and 5. All sentences were direct-
ed to be served concurrently, execution of the sentences
was suspended, and appellant was placed on three years
probation.’
v
Tue Unpertyixne Facts
The facts involve a complicated series of transactions.
We delineate them in the view most favorable to the gov-
ernment. Glasser v. United States, 1942, 315 U.S. 60, 80, 62
S.Ct. 457, 469, 86 L.Ed. 680, 704. In 1964 or 1965 Salvatore
A, Rizzo, also known-as Sam Rizzo, approached Ragano
to seek his assistance in obtaining a five million dollar loan
from the Southeast and Southwest Areas Pension Fund
of the International Brotherhood of Teamsters (Pension
Fund). Appellant agreed to assist Rizzo, and traveled to
Chicago on several occasions to discuss the proposal with
trustees of the Pension Fund. He did not, however, for-
mally represent Rizzo at the Pension Fund meetings at
which the loan was discussed. For his assistance in obtain-
ing loans of this type, appellant would in common practice
he entitled to a ‘‘finder’s fee’’ of 5% of the loan proceeds
from the recipient of the loan. The Rizzo loan application
was submitted to the Pension Fund on February 9, 1965,
and approved on March 3. On January 29 of that year ar-
ticles of incorporation were approved for Two Seasons,
Ine., a Florida corporation, organized for the purpose of
acquiring and developing real estate. On the same date that
* The government stipulated prior to trial that the second trial
would constitute a retrial for sentencing purposes within the
meaning of North Carolina v. Pearce, 1969, 395 U.S. 711, 89 S.Ct.
2072, 25 L.Ed.2d 656. Thus, if convicted appellant would not be
sentenced to a term more severe than had been imposed under
Count 3 of the original indictment.
“In sworn testimony before a Florida legislative committee ap-
peliant testified that a ‘‘finder’s fee’’ of 5 to 10% was normal for
the services of an individual for obtaining loans of this kind. On at
least two other occasions appellants received similar fees.
— 2 ot ee me
UB he te Oa ee We re ear ed
Jia
the loan application was submitted to the Pension Fund
the first meeting of Two Seasons was held. Rizzo was elect-
ed chairman of the Board and President. All fifty shares
of stock in the company were issued jointly to Rizzo and
his wife.
Appellant received a check for $15,000 from Two Sea-
sons on May 11, 1965, which was charged on the company’s
books to the ‘‘ Acquisition Costs’? account. A second pay-
ment of $10,000 on September 22, 1965 to appellant was
charged as a legal expense on the company’s books. From
November 15, 1965 through 1967 appellant received
amounts ranging up to $30,000 from Two Seasons which
were recorded on the company’s books as loans. These
loans, however, were neither secured by promissory notes
nor was interest provided for or paid on them. By the
end of 1967 these loans under the government’s caleu-
lations totaled approximately $90,550, of which $30,000
was transferred during the year on the company’s books
to the ‘‘Legal Expense and Land Acquisition Costs’’ ac-
count, leaving a loan balance of $60,550.
During this same period of time Ragano began bor-
rowing funds from two banks. In November 1966 and
March 1967 he borrowed $25,000 and $30,000, respectively,
from the County National Bank of North Miami Beach.
At the beginning of 1965 Ragano owed a balance of $16,-
500 to the Central Bank of Tampa on an existing loan.
Between February 1965 and October 1967, eight additional
loans were obtained by him from that bank in amounts
ranging between $2,500 and $12,500. Although, interest
was paid through September 1967, no principal payments
were made on any of these loans after September 1967,
except for payments on an installment loan and three pay-
ments totaling $1,755.45 on two others. The outstanding
balance on these loans as of September 1967 was $43,000.
During that same month an emplovee of Two Seasons,
Sheldon Kay, was requested by Rizzo to obtain a $10,000
28a
loan from the County National Bank, which Rizzo would
guarantee, the proceeds to be paid to appellant.
On January 3, 1967, Rizzo transferred 20 shares (40% )
of Two Seasons stock to Ragano in exchange for appel-
lant’s execution of an unsecured, non-interest bearing,
demand note in the amount of $50,000. No principal or
interest payments were made on this note prior to its ean-
cellation by Rizzo in 1968, At the second trial the govern-
ment introduced expert testimony showing that the fair
market value of the shares on the date of transfer to ap-
pellant was $400,000 to $600,000.7 On the same day that
this transaction occurred, appellant was elected vice pres-
ident of the company and named to the three member
board of directors.
The certificate representing the twenty shares held by
appellant was retransferred to Rizzo on March 24, 1967, and
on November 6, 1967 two certificates of ten shares each were
issued to appellant. In March 1967, but as of January 3,
1967, appellant in connection with a loan application filed
with the County National Bank listed his assets to include
the twenty shares of Two Seasons stock valued at $2.288,-
000. However, neither the $50,000 demand note held by
the Rizzos ner any of the loans on the Two Seasons books
were listed among his liabilities.
In December 1967, appellant delivered ten shares of the
Two Seasons stock to the County National Bank as secur-
ity for his outstanding loans. The bank was instructed by
appellant to deliver the stock certificate to the person des-
ignated at the time the loans were repaid. On approximate-
ly January 2, 1968, appellant went to the County National
Bank and introduced Louis Galliano to the bank officers.
Mr. Galliano procured a loan from the bank nominally in
the name of Assured Home Improvement Co., which was
* Appellant in a loan application listing his assets and liabilities
as of January 3, 1967 valued the 20 shares at $2,288,000.
—— a a -
29a
secured by the same ten shares of stock which the bank
already held as security for the loans of appellant, The
$30,000 proceeds of this loan were delivered to appellant
who used $10,000 of this amount to retire the loan taken
out by Sheldon Kay the previous September. At the con-
clusion of this transaction Frank Ragano had received
payments of approximately $250,000, 5% of $5,000,000,
from Two Seasons and the various bank loans.
Appellant and Rizzo on January 2, 1968, executed a
shareholders’ agreement providing that if either stockhold-
er pledged his stock as security for indebtedness and that
indebtedness came into default, the remaining stockholder
would have the right to pay the obligations, to redeem the
stock pledged, and assume full ownership of it. By a hand-
written codicil (so labeled) to this agreement dated Jan-
uary 12, 1968, the appellant assigned the 20 shares to Riz-
zo **in consideration for the said S. A. Rizzo assuming
the present indebtedness of the undersigned to the Cen-
tral National Bank of Tampa, Florida, and the County
Bank of North Miami Beach, Florida, and also holding the
undersigned harmless and no longer indebted to the said
corporation [Two Seasons] for loans made by the said
corporation to the undersigned.’’ The codicil did not men-
tion the January 1967 promissory note given by Ragano
to the Rizzos, although it was apparently canceled by this
transfer.
Subsequently, on April 18, 1968, Rizzo paid the $68,000
balance on all of the County National Bank loan accounts
and received the ten shares appellant had pledged as se-
curity. The certificate for the other ten shares remained
in appellant’s possession until mid-August 1968, when he
delivered it to the Central Bank of Tampa, with instrue-
tions to deliver it to the person paying off his loan bal-
ances at that bank. On August 20, 1968, Rizzo sent an em-
ployee of Two Seasons to that bank with a check in the
amount of $51,108.12 to pay the full balance on appellant’s
nine accounts and to take possession of the stock certifi-
cate. Subsequently, the two ten-share stock certificates were
canceled and a replacement certificate was issued to Rizzo.
In September 1968 Rizzo caused the loan balances on the
books of Two Seasons in appellant’s name to be trans-
ferred as loan receivables from him.
DovusLe JEOPARDY
On this appeal Ragano bases his primary challenge to
his conviction upon the protections of the double jeopardy
clause of the Fifth Amendment to the Constitution.
First, he contends that by appealing his conviction for
false swearing in his 1968 tax return (Count 3 of the orig-
inal indictment and Count 5 of the subsequent indictment)
he consented to be retried only under the particular theory
and factual characterizations urged by the the government
at the first trial. The record of the first trial indicates that
the government prosecuted appellant on the theory that
although the sale of the stock to Rizzo in 1968 was a valid
long term capital gain transaction, the original receipt
of the stock by appellant was income in that it was trans-
ferred to him in lien of a ‘‘finder’s fee.’’? Therefore, it
should have been reported by him as income in his 1967
tax return. Prior to the retrial on Count 3, of the original
indictment, the government in re-evaluating the evidence *
in light of the jury’s verdict and the trial judge’s® com-
*The government concedes on this appeal that the theory on
which it based the subsequent indictment was considered and re-
jected by the government prosecutors prior to the original indict-
ment,
* The trial judge at the first trial in a conference with the attor-
neys noted that the jury might rejeet the government’s characteri-
zation of the case, as well as the defendant’s defense:
‘The Court: But that [the value of the shares received by
appellani} is for the jury to determine. Let me say this other
thing too. The jury can conclude that he is going to get 5
ee ee ny
RE te.
3la
ments at the first trial decided to seek a subsequent indict-
ment, based on a different theory than urged by the gov-
ernment at the first trial, Thus, at the retrial the govern-
ment attorneys characterized the stock transaction as a
sham used to disguise the payment to appellant of a ‘‘find-
er’s fee’’ in the form of loans, and that those loans were
income to the appellant and on which income taxes were
due and owing. Appellant contends that this shift on the
part of the government in its presentation of its case was
improper, and precluded by the double jeopardy clause,
both as to the retrial on the original Count 3 conviction and
on the additional counts alleged in the subsequent indict-
ment.
[1] Appellant’s argument as to the retrial on Count 3
of the original indictment (Count 5 of the subsequent in-
dictment) entirely overlooks the right of the government
to retry a defendant for the same offense after the reversal
of a prior conviction. It is a hornbook principle that when
a defendant by a successful appeal secures a reversal of a
criminal conviction, a later retrial for the same offense does
not twice put him in jeopardy. United States v. Jorn, 1971
400 U.S. 470, 484, 91 S.Ct. 547, 27 L.Ed.2d 543; United
States v. Ewell, 1966, 383 U.S. 116, 124-25, 86 S.Ct. 773,
778-79, 15 L.Ed.2d 627, 633; United States v. Panzavecchia,
5 Cir. 1971, 446 F.2d 1293, cert. denied 1971, 404 U.S. 966,
92 $.Ct. 348, 30 L.Ed.2d 286. The rationale for this rule
has been stated by the Supreme Court as:
percent fee on the loan, and that the stock was just a vehicle
to try to get capital gain treatment with it because when he
did sell it, it was worth far more than—whatever it was he
got for it, if he really owned it.
I think that they can draw those inferences.
* * * * * * * * *
The jury can infer from the fact that this fellow sold him stock
for nothing, and the way they handled the certificate, that is just
a charade, the stock was ....’’
ee Oe Te aera
32a
Corresponding to the right of an accused to be given
a fair trial is the societal interest in punishing one
whose guilt is clear after he has obtained such a trial.
It would be a high price indeed for society to pay
were every accused granted immunity from punish-
ment because of any defect sufficient to constitute re-
versible error in the proceedings leading to conviction.
From the standpoint of a defendant, it is at least
doubtful that appellate courts would be as zealous as
they now are in protecting against the effects of im-
proprieties at the trial or pretrial stage if they knew
that reversal of a conviction would put the accused
irrevocably beyond the reach of further prosecution.
In reality, therefore, the practice of retrial serves de-
fendants’ rights as well as society’s interest.
United States v. Tateo, 1964, 377 U.S.9463, 466, 84 S.Ct.
1587, 1589, 12 L.Ed.2d 448, 451; See also United States v.
Ewell, supra, 383 U.S. at 121, 86 S.Ct. at 777, 15 L.Ed.2d
at 631.
[2] Ragano insists nevertheless that the doctrine of col-
lateral estoppel bars the government from adopting for
purposes of retrial, following prior conviction, a different
theory of the case than that relied upon at the original
trial. Ashe v. Swenson, 1970, 397 U.S. 436, 90 S.Ct. 1189, 25
L.Ed.2d 469, is the asserted authority for this contention.
The Supreme Court held in Ashe that the doctrine of col-
lateral estoppel was intertwined with the constitutional
guarantee against double jeopardy. That case denied the
right to try Ashe for armed robbery in one of six partici-
pants in a poker game following his acquittal at an earlier
trial for robbing another participant in the same game. The
Supreme Court found that the only rationally conceivable
issue before the jury in the earlier trial was whether the
defendant had been one of the robbers, and the jury verdict
in that trial showed that he had not. Thus, in the second
trial the same issue was before a second jury with the iden-
Oe ee ey
33a
tity of the victim the only change. The Court said the see-
ond trial was precluded by the not guilty verdict on the
earlier charge, and that collateral estoppel prohibited the
relitigation of facts previously determined in the defend-
ant’s favor. The Court stated that the doctrine of collater-
al estoppel was:
simply that when an issue of ultimate fact has once
been determined by a valid and final judgment, that
issue cannot again be litigated between the same par-
ties in any future lawsuit.
Id. at 443, 90 S.Ct. at 1194, 25 L.Ed.2d at 475 (emphasis
added).
[3] The doctrine of collateral estoppel as delineated in
Ashe thus deals with facts not theories. See United States
v. Kehoe, 5 Cir. 1975, 516 F.2d 78, 84 at n. 8. United States
v. Smith, 5 Cir. 1973, 470 F.2d 1299. Nonetheless the ap-
pellant stresses language in Ashe condemning the prosecu-
tion in that case for using the first trial as ‘‘a dry run for
the second prosecution.’’ Jd. at 447, 90 S.Ct. at 1196, 25
L.Ed.2d at 477. We hold that Ashe has no applicability in
the circumstances of this case to the retrial of the charges
in Count 3 in the original indictment following the rever-
sal of the prior conviction on that count. What and all
that the decision in Ashe condemned was the government’s
retrial of ultimate facts which had previously been decided
in a defendant’s favor. The case decided nothing respect-
ing the government’s right to alter its theory of the evi-
dence in a case at a retrial following reversal of a prior
conviction for the same offense. So restricting the prosecu-
tion from proceeding upon a new legal theory at retrial
would erode severely the goals served by permitting re-
trial of a criminal defendant after the reversal of a con-
viction. The argument fails.
[4] The second theory Ragano advances as to double
jeopardy is that the government was barred by the prior
34a
prosecution from indicting him in a subsequent indictment
on charges not contained in the original indictment. Spe-
cifically, tax evasion and false swearing in his 1966 tax
return (Counts 2 and 3), tax evasion in his 1968 tax return
(Count 4), and conspiracy to defraud the government in
the collection of revenue (Count 1). We need go no further
than to consider this claim as it relates to the conspiracy
count. The trial court imposed concurrent five year sen-
tences under Counts 1, 2 and 4, and two concurrent three
year sentences under Counts 3 and 5. Under the concur-
rent sentence doctrine if the conviction is sustained as to
the conviction under Count 1 (one of the counts as to
which concurrent sentences were imposed) it is unneces-
sary to determine the legality of the conviction under the
remaining counts. United States v. Stone, 5 Cir, 1973, 472
F.2d 909; United States v. Rector, 5 Cir. 1973, 488 F.2d
1079; United States v. Vigo, 5 Cir. 1970, 4385 F.2d 1347. Cf.
Benton v. Maryland, 1969, 395 U.S. 784, 791, 89 S.Ct. 2061,
23 L.Ed.2d 707.
[5, 6] Preliminary to a discussion of Count 1 we empha-
size the Supreme Court’s observation that ‘‘[c]onspiracy
is not the commission of the crime which it contemplates,
and neither violates nor ‘arises under’ the statute whose
violation is its object.’’ Braverman v. United States, 1942,
317 U.S. 49, 54, 63 S.Ct. 99, 102, 87 L.Ed. 23, 28. See also
Callanan v. United States, 1961, 364 U.S. 587, 593, 81 S.Ct.
$21, 325, 5 L.Ed.2d 312, 317. We have consistently held
that the commission of a substantive offense and entering
a conspiracy to commit that offense are separate and dis-
tinct, and that ordinarily a person may be convicted of
and sentenced for both. United States v. Marshall, 5 Cir.
1975, 513 F.2d 274; United States v. Jasso, 5 Cir. 1971, 442
F.2d 1054, 1056, cert. denied 1971, 404 U.S. 845, 92 S.Ct.
146, 30 L.Ed.2d 81. Aecord, United States v. Jackson, 10
Cir. 1973, 482 F.2d 1167, cert. denied 1974, 414 U.S. 1159,
94 $.Ct. 918, 39 L.Ed.2d 111.
a i ik i
35a
In Jasso, supra, the defendant was reindicted and con-
victed after an appeal on which the government confessed
error at the original trial. In addition to the three sub-
stantive marijuana smuggling counts contained in the orig-
inal indictment, the new indictment charged Jasso and
others with conspiring, in violation of Title 26, U.S.C. §
176(a), to smuggle, transport and conceal marijuana. We
rejected Jasso’s argument that the double jeopardy clause
barred inclusion of th: conspiracy count in the new indict-
ment, stating: ‘‘[t]he government could have charged con-
spiracy at any time within the statutory limitation period
without regard to any existing indictment for the marijua-
na offenses. An indictment for a new and different crime
is clearly not double jeopardy.’’ 442 F.2d at 1056. To like
effect in Marshall, supra, a defendant was indicted for
conspiracy to possess cocaine with intent to distribute and
to cause distribution. The indictment alleged 27 overt acts,
seven involving the defendant. Three of the seven had
served as the basis for three substantive counts of an
earlier indictment to which the defendant had entered
guilty pleas. On appeal from conviction of the conspiracy
charge the defendant urged that the conspiracy indictment,
in light of his guilty plea to the earlier charges, infringed
his double jeopardy rights, and precluded any effective de-
fense on his behalf. We rejected each of these arguments
noting that the substantive offenses and the conspiracy
offense were separate chargs requiring ‘‘distinct elements
of proof.’’
Appellant, however, maintains that the ‘‘same transac-
tion’’ definition of ‘‘same offense’’ in the double jeopardy
clause, barred the government from indicting him on the
conspiracy count since it was not contained in the original
indictment. This argument stems from the view advanced
by the concurring opinion in Ashe of Justice Brennan,
joined by Justices Douglas and Marshall, that the double
jeopardy clause requires the government to join in one
trial all charges against a defendant that grow out of a
36a
single criminal act, occurrence, episode, or transaction.
Ashe, supra, 397 U.S. at 453-54, 90 S.Ct. at 1199-1202, 25
L.Ed.2d at 481.
The government responds that the ‘‘same transaction”’
test, as proposed by Justice Brennan, has no application
to retrials following the reversal of a prior conviction,
since its sole purpose is to restrict the use of multiple trials
on closely related charges when the government’s interest
could be vindicated in a single trial. lence the government
maintains that in the case of retrials after reversal of a
prior conviction the government may indict on additional
charges since the number of trials has been limited to the
fewest possible.
[7] We find it unnecessary to decide the applicability of
the ‘‘same transaction’’ definition of ‘‘same offense’’ to
this case. This cireuit has previously declined to apply the
‘“same transaction’’ definition on the ground that although
entitled to some weight the views of only three Justices
are not binding. United States v. Marshall, 5 Cir. 1875, 513
F.2d 274; United States v. Smith, 5 Cir. 1978, 470 F.2d
1229; Wingate v. Wainwright, 5 Cir. 1972, 464 F.2d 209.
Accord Brown v. Hendrick, 3 Cir. 1970, 431 F.2d 436, 440,
cert. denied 1971, 402 U.S. 976, 91 S.Ct. 1677, 29 L.Ed.2d
141; Moton v. Swenson, 8 Cir. 1973, 488 F.2d 1060; United
States v. Fusco, 7 Cir. 1970, 427 F.2d 361.
EvIpENTIARY RULINGS
Appellant next challenges his conviction on the grounds
that the trial court erred in receiving in evidence certain
corporate documents and tax returns, and in excluding
from evidence the contents of a letter from the accountant
of Two Seasons to the appellant’s accountant. We deal
first with the admissibility of the documents allowed in.
[8] As part of the government’s case it argued that
appellant was never in fact a bona fide shareholder or
officer of Two Seasons, and, therefore, the transfer of the
stock to him and its subsequent sale was merely an attempt
to disguise the payment of his finder’s fee. The govern-
ment sought to show this proposition through certain cor-
porate reports filed with various departments of the State
of Florida, which purported to list all of the directors,
officers, and, in one instance, the shareholders of Two Sea-
sons during the period in which appellant purportedly
owned the stock. In none of these documents does appel-
lant’s name appear in any capacity. The documents in-
volved consist of: (i) an annual corporate report, filed in
July 1967, (ii) a certificate of amendment to the articles
of incorporation, filed in November 1967, (iii) an applica-
tion for a beverage license, filed in January 1968. These
documents were offered by the prosecution as public ree-
ords of the State of Florida, and appellant stipulated as
to their genuineness, authenticity, and official character.
Hlowever, when the government sought to have these doe-
uments entered into evidence, appellant objected on the
ground that these were hearsay statements of Rizzo, as
President of Two Seasons, regarding the status of appel-
lant in the corporation and therefore inadmissible.” Fur-
"In Ragano I, supra, we held that the trial court erred in ad-
mitting into evidence the testimony of an IRS agent relating to an
alleged admission by appellant regarding Rizzo’s testimony before
a state legislative committee. Rizzo had testified that appellant had
earned the stock as a finder’s fee and attorney’s fee, and had not
actually purchased the stock. When the IRS agent questioned ap-
pellant as to the truthfulness of this statement, appellant admitted
that he was aware of it but stated that its substance was untrue.
At trial the agent's testimony relating to this exchange was ad-
mi‘ted over objection as an admission by appellant. This court held
that the receipt of the agent's testimony relating to Rizzo’s testi-
mony was hearsay, and, in light of appellant’s clear denial of the
truth of that testimony, appellant’s Sixth Amendment right of con-
frontation had been denied. United States v. Ragano, 476 F.2d at
414-16. On the present appeal, Ragano maintains that the testimony
of Rizzo is being indirectly admitted through the corporate docu-
ments here involved.
38a
ther, appellant alleges that during the period when these
documents were filed his relations with Rizzo were strained,
and, therefore, Rizzo had a motive to falsify the docu-
ments.
In our judgment the documents in question satisfy the
recuirements of the Federal Business Records Act, Title
98. U.S.C., Section 1732(a), and thus qualify as an excep-
tion to the hearsay rule. Further, we hold that the admis-
sion of this documentary evidence was cumulative, and
the error, if any, was harmless error, which did not preju-
dice appellant’s rights. Rule 52(a), F.R.Crim.P.; United
States v. Quong, 6 Cir. 1962, 303 F.2d 499.
[9-11] In Sabatino v. Curtiss National Bank, 5 Cir. 1969,
415 F.2d 632, Judge Thornberry extensively analyzed the
purpose and effect of the Business Records Act, setting
forth a three-pronged test for determining the admissi-
bility of business records:
(1) the records must be kept pursuant to some routine
procedure designed to assure their accuracy,
(2) they must be created for motives that would tend
to assure accuracy (preparation for litigation, for
example, is not such a motive), and
(3) they must not themselves be mere cumulations of
hearsay or uniformed opinion.
415 F.2d at 637 (emphasis in original). We find that all
of the documents in dispute in this case satisfy these guide-
lines. The Sabatino requirement that the documents be
prepared for ‘‘motives’’ to assure accuracy is fulfilled by
the fact that each was required by the state to be filed as
a condition of corporate existence, and the loss of corpor-
ate privileges could result from a failure to file or by
filing intentionally false documents. Florida Stat. $§ 608.04,
608.041, 608.351. The failure by the government to lay a
foundation, in the form of testimony by an employee of
LL”
39a
Two Seasons as to the procedure used in preparing and
filing these documents does not affect their admissibility,
in light of the stiplation as to their authenticity and the
fact that they were filed and prepared in the regular course
of business. Cf. Meister vy. C. J. R., 3 Cir. 1974, 504 F.2d
505; United States v. Henderson, 8 Cir. 1971, 446 F.2d 960,
966-67; Carroll v. United States, 9 Cir. 1963, 326 F.2d 72.
Appellant’s testimony as to his strained relations with
Rizzo affected only the weight to be accorded the docu-
ments, not their admissibility."' See United States v. Re,
2 Cir. 1964, 336 F.2d 306.
[12] Additionally, the records objected to were similar
in form and tenor to a document designating a resident
agent for ‘Two Seasons, already in evidence without objec-
tion which failed to list Ragano as either officer or director.
Finally, both an eraployee and an officer of Two Seasons
testified that in the realm of their duties neither had any
knowledge of appeilant’s having the authority of an officer
or director of the corporation. We hold therefore that the
documents were merely cumulative of other evidence before
the jury. United States v. Quong, supra, 303 F.2d at 504.
[13] On similar grounds Ragano maintains that preju-
dicial error was committed by the admission into evidence
of the corporate income tax returns of Two Seasons, for
the periods ending in March 1967 and March 1968, At the
first prosecution these tax returns were received in evi-
dence, with no error being claimed in this respect on the
prior appeal. However, this court saw fit ‘tin the interest
of trial economy’’, 476 F.2d at 418, to direct attention to
™ The Business Records Act, Title 28 U.S.C. § 1732(a) provides
in part:
a + e * e * * * *
All other circumstances of the making of such writing or
record, including lack of personal knowledge by the entrant
or maker, may be shown to affect its weight, hut such circum.
stances shall not affect its admissibility.
40a
Greenbaum v. United States, 9 Cir. 1935, 80 F.2 113, 125,
regarding the admissibility of tax returns. In Greenbaum
the Ninth Cireuit held that income tax returns were hearsay
when used against an individual other than the maker, un-
less some relationship between the tax return and the indi-
vidual against whom they were sought to be used could be
found, 80 F.2d at 125-26. Leaving to one side the question-
able continuing vitality ot Greenbaum as precedent, we
note that in the present case the tax returns were admitted
for the limited purpose of use by the government expert
witness in arriving at the evaluation of Two Seasons stock.
They were useful for this purpose because they contained
detailed schedules of land sales made by the corporation.
With other records and documents, also in evidence, these
tax returns provided an accessible and convenient source
of supporting data on which to arrive at a valuation of the
Two Seasons shares. The trial court’s admission of the eor-
porate tax returns for this stated limited purpose was not
error. This is underscored by Ragano’s claim in his loan
application to County National Bank that the twenty shares
had a value of $2,288,000, as contrasted to government tes-
timony fixing the value at $400,000 to $600,000. See Note
7, supra, and accompanying text. Clearly, this evidence
did not projudice Ragano’s case.
Ragano also contends that the trial court erred in ex-
cluding from evidence a letter from the accountant for
Two Seasons to Ralph Andretta, appellant’s accountant,
setting forth the former’s interpretation of the tax conse-
quences of the stock transactions. At trial the government
called Andretta, and questioned him regarding the sources
of information he employed in determining appellant’s tax
liabilities for the years in question. In respo: ding to this
‘2 In passing we note Andretta’s testimony, not questioned by
Ragano, that in 1965 or 1966 appellant questioned Andretta as to
the potential tax consequences of his receiving stock in Two Sea-
sons in lieu of his finder’s fee. Andretta responded that appellant
dla
inquiry Andretta stated that he had relied on a yearly
‘recap of fees’’ which had been sent by Two Seasons’
accountant, Nelson Whyte, to him. Appellant’s counsel
sought on cross-examination to question Andretta as to
the extent of the reliance placed in Andretta and Whyte by
Ragano in calculating his tax liabilities and treating the
stock transaction as one producing long term capital gain.
In this regard the trial judge permitted appellant’s counsel
to show Andretta the letter from Whyte, and to inquire
as to whether he had relied on the contents of the letter
in determining the manner in which to report the stock
transaction. The trial judge refused however to permit
the contents of the letter to be published through An-
dretta, since it embodied also the opinion of another ac-
countant not a witness, hence not available for examina-
tion as to his rationale in reaching that opinion. Appel-
lant’s counsel thereupon stated that he did not at this time
intend to publis® the letter, and that he would be satisfied
if Andretta was permitted to identify it and state that he
had relied on it." This was permitted by the court. At the
would still be liable for income taxes on the fair market value of
the stock. Appellant then inquired as to the tax consequences of
purchasing the stock, to whic Andretta replied that any profit
realized from the subsequent sale of the stock would be taxed at
capital gains rates.
* The following exchange occurred out of the presence of the
jury:
The Court: . . . You can ask him [Andretta] if this is the
letter he relied on.
Mr. Rosen [Appellant’s Counsel] : That is precisely what I
wanted to do, Your Honor.
The Court: But don’t go into the details.
Mr. Rosen: Well, I don’t intend to publish it at this point,
Your Honor, because I can’t offer it out of turn.
The Court: Well, you can’t offer it until it is in evidenee—
you can’t publish it until it is in evidence.
Mr. Rosen: That’s right.
The Ceurt: All right. Thank you. That is the main reason
you are not going to do it.
42a
close of the evidence the trial judge called attention to the
fact that appellant’s counsel had failed to publish the let-
ter, and had not called Whyte as his witness. Appellant’s
counsel declined at that time to call Whyte as a witness
or to offer the letter for publication.”
[14] Ragano urges that the trial court erred in not per-
mitting Andretta to testify regarding the contents of the
Whyte letter. We disagree. Appellant’s counsel was per-
mitted on cross-examination of Anadretta to use the letter
** The following occurred at that time at side bar, out of the
jury’s hearing:
The Court: To save possible trouble later on—you may have
overlooked it—I don’t believe that letter from Mr. Whyte to
Mr. Andretta was ever received in evidence.
Mr. Tison [The Government’s Prosecutor]: No, it wasn’t.
Mr. Rosen: It wasn’t.
Mr. Tison: That’s correct.
Mr. Rosen: I think my position is preserved on the Govern-
ment’s side of the case.
Mr. Tison: Well, he could have brought the man who wrote it.
The Court: I just want
Mr. Rosen : I am aware of it.
The Court: You had Mr. Whyte under subpoena.
Mr. Rosen: No, I didn’t. The government did.
Mr. Tison: We had him under subpoena.
The Court: Can you make him available?
Mr. Tison: Certainly. I told Mr. Rosen
The Court: He is available?
My ruling was that if Mr. Whyte was available I sustained
the Government’s objection te its introduction. And I did it
on the ground that it should not be received because it does
contain an opinion; and it apparently is an opinion which
—well, at x rate, it contains an opinion. And where that
witness is available he should be called, so that he could be
cross-examined about that opinion.
And to put the letter in without that would, in effect, deny
the Government the right to confront the witness; and it is
hearsay.
Mr. Rosen: Well, I stated my position in the Government's
ease in chief. I do not propose to call Mr. Whyte.
45a
to the full extent he requested. Subsequently he declined
to call Whyte as a witness to be examined as to the letter
in the face of the court’s reminder of the state of record.
Error is not demonstrated with respect to this incident.
SUFFICIENCY OF THE EVIDENCE
Lastly we find without merit Ragano’s final ground for
appeal, that error was committed by the trial court in the
denial of his motion for a directed judgment of acquittal,
first made when the government rested its case in chief
and renewed when both sides announced closed. This con-
tention ties back into the primary point discussed, supra,
the asserted presence of double jeopardy as a result of
the superseding indictment and of the shift in the gov-
ernment’s theory of the case between trials. Indeed, it
amounts when scrutinized to no more than a corollary to
the same contention of ‘‘estoppel by argument’’.
It is urged that because the government’s theory in
Ragano I was that although the defendant acquired the
Two Seasons stock in a valid transaction, he treated the
tax consequences incorrectly, whereas at the second trial
the government traveled on the new indictment on the
different and inconsistent theory that the stock transac-
tions were a sham masking the payment of a finder’s fee,
and hence that the government has placed itself in the
position of urging at different times that the same under-
lying facts support inconsistent and irreconcilable inter-
pretations. This, it is asserted, puts an end to any claim
that guilt was established under assertedly accepted stand-
ards governing the proof required to establish guilt in cir-
cumstantial evidence cases. Reliance is placed upon Fifth
Cireuit cases, mostly pre-Holland,” stating that evidence
* Holland v. United States, 1954, 348 U.S. 121, 75 S.Ct. 127, 99
L.Ed. 150. Holland held that it is ‘‘confusing and incorrect’’ to
instruct the jury that a special rule applies to cases based upon
44a
sufficient to establish guilt in circumstantial evidence cases
must not only be consistent with guilt, but inconsistent
with innocence. The argument continues that if the evi-
dence is equally consistent with diametrically different
guilty theories, it must also be consistent with innocence,
or at least is not inconsistent with innocence.
This argument fails in at least two particulars. First,
the government's case is based to a slight extent only upon
circumstantial evidence. Inter alia, the evidence at the sec-
ond trial consisted of three separate sworn statements of
Ragano that the stock transfers represented in some man-
ner his 5% finder’s fee for obtaining the $5,000,000 loan.
Direct evidence, consisting of actual checks, wire transfers,
and the like, traced the receipt of $250,000, 5% of $5,000,-
to Ragano, The sole aspect of the government’s proof
resting on circumstantial evidence was the proposition
that it was money, paid in ‘1966 and 1968, rather than the
stock certificate received in 1967, that constituted the ac-
tual fee.
[15, 16] Second, assuming contrary to our post-Holland
decisions * that the standard described is appropriate to
circumstantial evidence, ibid. at 139-140, 75 S.Ct. at 137, 99 L.Ed.
at 166, continuing: ‘‘Cireumstantial evidence in this respect is
intrinsically no different from testimonial evidence. Admittedly,
circumstantial evidence may in some cases point to a wholly incor-
rect result. Yet this is equally true of testimonial evidence. In both
instances, a jury is asked to weigh the chances that the evidence
correctly points to guilt against the possibility of imaccuracy or
ambiguous inference. In both, the jury must use its experience with
people and events in weighing probabilities. If the ,ury is con-
vineced beyond a reasonable doubt, we can require no more.’’ [bid.
at 139-140, 75 S.Ct. at 137-138, 99 L.Ed. at 166-167.
© Post-Holland, the standard for review adopted by this Circuit,
to be applied irrespective of whether the evidence is direet or cir-
cumstantial, is whether ‘‘reasonable minds could conclude that the
evidence is inconsistent with the hypothesis of the accused’s inno-
cence’’. United States v. Warner, 5 Cir. 1971, 441 F.2d 821, 825,
45a
this appeal, the hypothesis of the 1967 income is not a
hypothesis of innocence as to this indictment. If credit,
the hypothesis is one of guilt as to at least Count 5 of the
superseding indictment. Under that theory the reporting
of the stock transfers in the 1968 return is as completely
false as under the view that the money was the finder’s
fee, though for different reasons. The hypothesis may well
also support the finding of guilt as to Count 1, although
in view of the concurrent sentence doctrine we will not
lengthen this opinion further by a detailed analysis.
Further, the argument advanced entirely ignores the
difference in the government’s proof at the two trials. At
the second trial some forty additional documents and the
testimony of two witnesses demonstrated thai at all rele-
vant times a 40% interest in Two Seasons, Inc. was so
valuable that it would be unreasonable to suppose that
Ragano received a bona fide ownership interest in the
stock as payment of the balance due on his finder’s fee.
Ragano’s knowledge of the value of the stock was sep-
arately proved by some of his earlier statements and other
evidence. In January 1967, when the shares were issued to
him, they had a minimum value of at least $400,000, nearly
three times the remaining unpaid amount due on his fee.
The evidence produced at trial was supportive of a single
conclusion only: that the series of stock transfers was no
more than a sham designed to create a vehicle to disguise
the fee as a capital gain.
The judgment appealed from is
Affirmed.
cert. denied 1971, 404 U.S, 829, 92 S.Ct. 65, 30 L.Ed.2d 58, See
further e.g. United States v. Black, 5 Cir. 1974, 497 F.2d 1039,
1041; United States v. Amato, 5 Cir. 1974, 495 F.2d 545; United
States v. Edwards, 5 Cir. 1974, 488 F.2d 1154; United States v.
Fontenot, 5 Cir. 1973, 483 F.2d 315, 321.
> ee ee a a
46a
APPENDIX C
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
October Term, 1974
No. 74-2376
D. C. Docket No. 73-132-CR-T-K
Unitep States or America, Plaintiff-Appellee
versus
Frank Racano, Defendant-Appellan’.
Appeal from the United States District Court for the
Middle District of Florida
Before Wispom, Simpson and Roney, Circuit Judges
Judgment
This cause came on to be heard on the transcript of the
record from the United States District Court for the Mid-
dle District of Florida, and was argued by counsel;
Ox Consiperation Wuereor, It is now here ordered and
adjudged by this Court that the judgment of the said
District Court in this cause be, and the same is hereby,
— October 14, 1975
Issued as Mandate:
47a
APPENDIX D
UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT
OFFICE OF THE CLERK
January 20, 1976
TO ALL COUNSEL OF RECORD
No. 74-2376—USA v. Frank Ragano
Dear Counsel:
This is to advise that an order has this day been en-
tered denying the petition(s) for rehearing, and no mem-
ber 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; Local Fifth Cireuit Rule 12) the petition( )
for rehearing en banc has also been denied.
See Rule 41, Federal Rules of Appellate Procedure for
issuance and stay of the mandate.
Very truly yours,
Kpwarp W. Wapswortn, Clerk
/s/ by Susan M. Gravors
Deputy Clerk
/3smg
ec: Mr. FE. David Rosen
Mr. Michael Kinney
Mr. Thomas T. Steele
Mr. Claude Tison, Jr.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.