Petition — Schwenk v. United States

—— “ eS

re} 0 7 ] 4 8 0 Office-Supreme Court, U.S,

FILED

APR 13 1981

IN THE

ALEXANDER L. STEVAS,

SUPREME COURT OF THE UNITED STATES CLERK

NO.

OCTOBER TERM, 1981

PHILIP J. SCHWENK,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIGHTH CIRCUIT

Douglas W. Thomson

DOUGLAS W. THOMSON

LAW FIRM

Suite 1530

55 East Fifth Street

Saint Paul, Minnesota 55191

(612) 227-0856

Counsel for Petitioner

QUESTION PRESENTED

Whether Petitioner's due process

rights under the Fourteenth Amendment

were violated when the government did

not sustain its burden of proving beyond

a reasonable doubt that Petitioner was

guilty of failing to file federal income

tax returns.

TABLE OF CONTENTS

° Page

Opinions eee teeter weet eee e eee eter ene 1

MEPIBGICCION wccccccccecsesscsseun ne eee 2

Buestions Presented ..cccccsesesteeeee tee 2

Constitutional Provisions Involved ....... 3

Statutory Provision ccccsscevscessbeveuenue 3

Statement .....e0. ccoceceeescceseeseee eee 4

Reason for Granting Certiorari ....... ree 6

~ Conclusion eoeeefefriee eee #© # © @ @ ee ee ee oe Oe ee Oe 12

MMPONGIX woccccccccescscessseusen cteovecees A-1

CITATIONS

Page (s)

CONSTITUTION:

Amendment XIV ..ccccccccccccccvcs ecoccccee: 38

CASES:

Bronston v. United States, 409 U.S.

er CAT a? ce bed 666 8F 60S 00 64 6048S 6 068 6

Coffin v. United States, 156 U.S.

0 MS i § 0 ee oe

Glasser v. United States, 315 U.S.

an CEs Ses sé wees 66 66s0 6 aoe ee ee

In Re Winship, 397 U.S. 358

a Gh és aseh ene 6 0a 6 Be bheeb bee eben ee ee 7

Jackson v. Virginia, 443 U.S. 307,

= BAT (A979) cccccccccccencecccccescccsces S, il

. Johnson v. Louisiana, 406 U.S. 356,

co wo

©

& 362 (1972) oeeeneeeeeveeeveeeeeeeeeeeeeeee 10

U.S. v. Bishop, 412 U.S. 346

(1976) eeee3s5ceee#ererererege#eegentreeneeeeee#ee#eeeee##e#e«#e#e#*« * ll

United States v. Pomponio, 429 U.S.

10 (1976) eoeeeeveeeeeeeeeeeeeeeeeeeeeeeee 11

STATUTES:

26 woitet. §7203 eoeeee#eeefeeeee oe wneeeeeeeeetee. 3, 5

26 Dametce §7206 e*eeneeeeeeegeee eoeeeeee#e#es#e#ee#ee#e#e 11

a

IN THE

SUPREME COURT OF THE UNITED STATES

NO.

OCTOBER TERM, 1981

PHILIP J. SCHWENK,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

The Petitioner, Philip J. Schwenk,

respectfully prays that a Writ of Certiorari

issue to review the judgment of the United States

Court of Appeals for the Eighth Circuit.

OPINIONS BELOW

The opinion of the Court of Appeals is not

yet reported. The slip opinion is found in the

Appendix. The District Court filed no opinion.

JURISDICTION

The judgment of the Court of Appeals was

entered on February 19, 1981. A petition for

rehearing was denied on March 13, 1981. (The

order denying the rehearing is included in the

Appendix). This petition is filed within thirty

days of the latter date. This Court's jurisdic-

tion is invoked under 28 U.S.C. §1254. The

District Court's jurisdiction was invoked by

indictment.

QUESTION PRESENTED

Whether Petitioner's due process rights

under the Fourteenth Amendment were violated

when the government did not sustain its burden

of proving beyond a reasonable doubt that

Petitioner was guilty of failing to file federal

income tax returns.

CONSTITUTIONAL PROVISIONS INVOLVED

Amendment XIV

. Section I. All persons born or naturalized

in the United States, and subject to the jurisdic-

tion thereof, are citizens of the United States

and of the state wherein they reside. No state

shall make or enforce any law shall abridge

the privileges or immunities of citizens of the

United States; nor shall any state deprive any

person of life, liberty, or property without

due process of law; nor deny any person within

its jurisdiction the equal protection of the

laws.

STATUTORY PROVISION

26 U.S.C. §7203:

Any person required under this title to

pay any estimated tax or taxes, or required

by this title or by regulations made under

authority thereof to make a return (other

than a return required under authority of

§6015), keep any records, or supply any infor-

mation, who willfully fails to pay such

estimated tax or taxes, make such a return,

keep such records or supply such information

at the time or times required by law or regula-

_ tions shall, in addition to other penalties

provided by law, be guilty of a misdemeanor

and, upon conviction thereof, shall be fined

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

than one year, or both, together with the

costs of prosecution.

STATEMENT

The evidence of the challenged conviction

appears briefly in the opinion of the Eighth

Circuit attached in the appendix hereto. To

— ee re ee em ee ee el nk ee oe. eee ee em ie te we en we —

avoid needless prolixity, set forth below are

only the facts pertinent to sien specific issues

raised in this petition. Petitioner was indicted

with four counts of failing to file income tax

returns for the years 1973, 1974, 1975 and

1976, in violation of 26 U.S.C. §7203. After

extensive jury deliberation, Petitioner was

convicted on the counts relating to 1975 and

1976.

The evidence at trial was introduced

regarding Petitioner's limited formal education,

disorganized and incomplete financial records,

demanding occupations of farming, crop dusting,

and chemical sales, and a heavy responsibility

for providing for his wife and eight children.

As a result of these domestic and business

pressures, Petitioner neglected to file his

income tax returns.

On appeal to the Eighth Circuit, Petiticner

argued the evidence presented did not support

the jury's finding of willful intent. The

Eighth Circuit disagreed, holding that Petitioner's

failure to file income tax returns was a

conscious decision not to comply with the

requirements of the Internal Revenue Code.

slip op. page 3. The Circuit Court also noted

Petitioner's defense of a hona fide misunder-

standing as to his duty to make a return

was not believed by the jury and that as a

result, the jury's verdict would not be

disturbed.

REASON FOR GRANTING CERTIORARI

The decision of the Eighth Circuit Court

of Appeals was contrary to the due process

clause of the Fourteenth Amendment. The Circuit

7 sates enstdientaniiemetieien tne iti ee e . 2 a

Court affirmed Petitioner's convictions where,

on the record, the convictions were not supported

by substantial evidence.

In Re Winship, 397 U.S. 358 (1970), this

Court reversed a New York Court decision which

has held a juvenile charged with a crime could

be found guilty by a mere preponderance of the

evidence. 397 U.S. at 360. This Court found

the standard of proof; beyond a reasonable

doubt applied to juvenile hearings as well.

This Court reaffirmed its dedication to the

historical standard of proof used in criminal

trials.

The reasonable-doubt standard

plays a vital role in the

American scheme of criminal

procedure. It is a prime

instrument for reducing the

risk of convictions resting

on factual error. The

standard provides concrete

substance for the presumption

of innocence -- that Bedrock

‘axiomatic and elementary'

principle whose ‘enforce-

ment lies at the foundation

of the administration of

our criminal law.'

397 U.S. at 363 quoting Coffin v. United States,

156 U.S. 432, 453 (1895)

This Court justified the reasonable doubt

standard:

The requirement of proof beyond

a reasonable doubt has this

vital role in our criminal

procedure for cogent reasons.

The accused during a criminal

prosecution has at stake

interest of immence importance,

both because of the possibility

that he may lose his liberty

upon conviction and because

of the certainty that he

would be stigmatized by the

conviction. According,

a society that values the

good name and freedom of

every individual should not

condemn a man for commission

of a crime when there is

—-= ee ee ee -— -- —- re tee = - —_———

reasonable doubt about his guilt.

In Re Winship, 397 U.S. at 363-364. <-

Even with the reasonable doubt standard,

there are instances, unfortunately, when an

innocent party is convicted of a crime.

[A] properly instructed jury

may occasionally convict

even when it can be said

that no rational trier of

fact could find guilt

beyond a reasonable doubt...

In a Federal trial, such

an occurrence has tradi-

tionally been deemed to

require reversal of the

conviction.

Jackson v. Virginia, 443 U.S. 307, 317 (1979);

Glasser v. United States, 315 U.S. 60, 89 (1942);

Bronston v. Un’ted States, 409 U.S. 352 (1973)

This Court's inquiry on review on claims

of sufficiency "is whether, after viewing the

evidence in the light most favorable to the

prosecution, any rational trier of fact could

10

have found the essential elements of the crime

beyond a reasonable doubt." Jackson v. Virginia,

443 U.S. at 319; Johnson v. Louisiana, 406 U.S.

356, 362 (1972)

Petition was found guilty where the evidence

presented at trial failed, by any reasonable

interpretation, to support the verdict: This

is not a case of a voteedae individual, who,

with deliberate calculation, decided to evade

the filing requirements of the Internal hevenue

Code. Nor is this a case where the individual

has so much income and therefore taxes due and

owing, that he does not file for evasion purposes.

And this is not a case where the individual tries,

through manipulative accounting procedures, to

somehow defeat his obligations to pay taxes.

This is the case of an individual who had

no taxes due and owing for the years 1975 and

1976. Petitioner failed to file through neglect

11

and ignorance and because of the pressures of

extraordinary financial obligations. There is

an absence of intent here normally seen in

failing to file cases. |

In United States v. Pomponio, 429 U.S. 10

(1976), this Court held that willfully as used

in 26 U.S.C. §7206 "Simply means a voluntary,

intentional violation of a known legal duty."

429 U.S. at 12; See also U.S. vs. Bishop, 412

U.S. 346 (1976).

The intent evidence of a "voluntary intentional

violation" of the filing requirements is clearly

lacking on the record. This Court has recognized

that a jury may occasionally convict where "no

rational tryer of fact could find guilt." Jackson

vs. Virginia, supra, 443 U.S. at 319. Such is

the case with the Petitioner.

12

CONCLUSION

Based upon the foregoing, it is respectfully

submitted that the Petition for Writ of Certiorari

be granted.

Respectfully submitted,

DOUGLAS W. THOMSON

LAW FIRM

By

DOUGLAS W. THOMSON

Suite 1530

55 East Fifth Street

St. Paul, Minnesota 55101

(612) 227-0856

Counsel for Petitioner

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

United States of America,

Appellee, Appeal from

the United

States District

Court, District

of Minnesota

Vv.

Philip J. Schwenk,

+e ee HH

Appellant.

Submitted: February 11, 1981

Filed: February 19, 1981

Before ROSS, HENLEY and MCMILLIAN,

Circuit Judges.

PER CURIAM.

Philip J. Schwenk apveals from the

1

judgment of the district court convicting

1

The Honorable Harry H. MacLaughlin,

United States District Judge for the

District of Minnesota.

A-2

him of two counts of willful failure

to file income tax returns for tax

years 1975 and 1976 in violation of

26 U.S.C. § 7203. He was sentenced

to one year imprisonment and fined

$10,000.00 on one count and received a

$10,000.00 fine and a suspended one

year term of imprisonment on the

other count. Appellant was also

sentenced to three years probation

following his imprisonment. We affirm

the conviction on both counts.

On appeal, Schwenk concedes that

the government established that he was

required to file returns for 1975 and

1976 and failed to do so. He contends,

however, that the evidence was insufficient

to prove that he willfully failed to file

the required returns. Appellant rests

this contention on two grounds: (1)

that the evidence fails to establish

A-3

the element of willfulness and (2)

acquittal on two counts negate a finding

of intent on the remaining counts.

At trial, Schwenk raised the

defense that he acted through negligence

and careless disregard rather than

willfulness. After introducing evidence

of appellant's limited formal education,

disorganized and incomplete financial

records, demanding occupations of

farming, crop dusting, and chemical

sales, and heavy responsibility of

providing for his wife and eight children,

the defense argued to the jury that

these domestic and business pressures

2

Schwenk was charged with four counts

of failing to file income tax returns

for 1973, 1974, 1975 and 1976. After a

jury trial, he was acquitted on the

counts relating to 1973 and 1974 and

convicted on the two remaining counts.

A-4

pressures caused this inadvertent

failure to file income tax returns.

On appeal, Schwenk argues that this

careless disregard of his dyty to file

cannot be equated with the deliberate

and intentional failure to file needed

to establish willfulness.

This Court has held that to

establish willfuness the government

is not required to "prove anything

beyond establishing that defendant's

action was deliberate, intentional and

without justifiable excuse, or otherwise

stated, a voluntary, intentional

violation of a known legal duty."

United States v. Francisco, 614 F.2d

617, 618 (8th Cir. 1980); United States

v. Rifen, 557 F.2d 1111, 1113 (8th Cir.

1978); United States v. Pohlman, 522

F.2d 974, 977 (8th Cir. 1975) (en banc),

A-5

cert denied, 423 U.S. 1049 (1976),

cited with approval in United States

v. Pomponio, 429 U.S. 10, 12-13 (1976).

The court also has recognized that "a

careless or reckless disregard does not

elevate a defendant's conduct to ‘wilful'

as that term is employed in §7203."

United States v. Bengimina, 499 F.2d

117, 119 (8th Cir. 1974). The evidence

in the instant case, however, clearly

establishes that Schwenk's failure to

file resulted from a deliberate, intent-

ional decision not to file sek dekuene.

Appellant's failure to file for four

consecutive years is strong evidence

that suggests a pattern of intentional

conduct ether than inadvertence.

Schwenk did not file returns for tax

years 1973 through 1976 until January,

1979, thirteen months after the Internal

A-6

Revenue Service began an investigation

of his failure to file. In addition,

Paul A. Wheeler, a criminal investigator

for the Internal Revenue Service, and

William Skoglund, a friend of appellant

who prepared the late returns, testified

that appellant admitted he knew he should

have filed returns for the years in

question. Further, Helen Jensen, whom

Schwenk hired to organize his income

expense records in 1975, testified that

Schwenk stated that he did not file returns

because "he had a large family, he didn't

feel he had much of an income, and he

didn't think that the government was

going to tell him what to do."

Appellant offers may canis for

his failure to file, but these reasons

are irrelevant under section 7203

because the prosecution established

A-7

that he made a conscious decision: not

to comply with the requirements of the

law. See United States v. Matosky, 421

| F.2d 410, 413 (7th Cir.), cert. denied,

398 U.S. 904 (1970). Since Schwenk

failed to show inadvertent or negligent

conduct, only a bona fide misunderstanding

about his duty to make a return would

constitute a justifiable excuse for his

failure to file. See United States v.

McCorkle, 511 F.2d 482, 486 (7th Cir.)

(en banc), cert. denied, 423 U.S. 826

(1975); United States v. Matosky, supra,

421 F.2d at 413. Appellant raised the

defense of good faith misunderstanding

of the law by presenting evidence showing

that he was unaware that he could file

returns without paying any tax due at

the time of filing. It is apparent,

however, that the jury did not believe

A-8

this assertion and it was not required

to do so.

Finally, appellant argues that

because his acquittal for failing to

file in 1973 and 1974 was based on the

same evidence that led to his conviction

for the other years, the jury's inconsis-

tent verdicts negate the finding that

he willfully failed to file returns for

1975 and 1976. First, the court notes

and appellant acknowledges the general

rule in this circuit that "consistency

between the verdicts on a multiple-count

indictment is unnecessary when a defendant

is convicted on one or more counts but

acquitted on the remainder." United

States v. West, 549 F.2d 545, 553 (8th

Cir.), cert. denied, 430 U.S. 956 (1977).

More important, the evidence leading to

Sch.vrenk's conviction for 1975 and 1976

A-9

differs materially from the evidence

presented for tax years 1973 and 1974.

Schwenk reported losses for 1975 and

1976 and therefore did not owe any

taxes. By appellant's own figures on his

late returns for 1973 and 1974, however,

he owed $5,261.00 in taxes for 1973

and $21,281.00 for 1974. He contends

the jury acquitted him of the charges

relating to 1973 and 1974 because it

necessarily believed his defense of

good faith misunderstanding that he

was required to pay taxes due when

he filed but was unable to do so. In

light of evidence that Schwenk had

$6,985.00 in his checking account

on April 15, 1974 and $12,000.00 on

the following day and a balance of

$23,000.00 on April 11, 1975, this

contention is not airtight. While the

A-10

jury could have accepted his defense

for years when he owed substantial amounts

in taxes, it reasonably could have

disbelieved the defense for the two

years when he had no tax liability.

See United States v. McCorkle, supra,

511 F.2d at 486. Thus, in the circum-

stances of this case, acquittal for

failing to file for the 1973 and 1974

tax years does not negate a finding of

willfulness for 1975 and 1976 because

the evidence supvorting conviction

differs from the evidence resulting in

acquittal. See United States v. Williams,

470 F.2d 915, 918-19 (2a Cir. 1972);

Batsell v. United States, 403 F.2d 395,

400 (8th Cir. 1968), cert. denied,

393 U.S. 1094 (1969)

The judgment is affirmed.

A true copy.

A-11

Attest:

CLERK, U. S. COURT OF APPEALS,

EIGHTH CIRCUIT.

A=-12

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 80-1929 September Term, 1980

United States of America, )

)

Appellee, ) Avpeal from

) the United

vs. ) States

) District

Philip J. Schwenk, ) Court,

) District of

Appellant. ) Minnesota

Petition of appellant for rehearing

filed in this cause having been considered,

it is now here ordered by this Court

that the same be, and it is hereby denied.

And it is further ordered by the

Court that appellant's request for

stay of mandate is denied.

March 13, 1981