# Petition — Gargano v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_2079%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1981 - **Citation:** 454 U.S. 822 ## Text a eer ee e-Supreme Court, U.S. 80-18 83 TLE D N thY —t 1981 er ALEXAND::R t.. STEVAS, ; CLERK In the Supreme Court of the United States. Ocroser Term, 1980. JOHN GARGANO, PETITIONER, v. UNITED STATES OF AMERICA, RESPONDENT. Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit. ALAN M. DeErsHowI!Tz, 20 Elmwood Avenue, Cambridge, Massachusetts 02138. (617) 661-1965 Counsel for Petitioner Of Counsel: WALLACE Musorr, Juris G. CEDERBAUMS. On the Brief: Marilee A. WILSON. BATEMAN & SLADE, INC. BOSTON , MASSACHUSETTS Questions Presented. I. Was it proper for the Court of Appeals to affirm petition- er’s conviction on a theory that the burden of proof was on the defendant “to prove” that certain checks were loans (as he alleged) rather than income (as the government alleged), after the trial court had submitted the case to the jury on the theory that the government had the burden of proving that the checks were income rather than loans, and after the defendant had relied on that ruling in waiving his right to testify on his own behalf? II. Was it proper for the trial court: to frighten the defend- ant’s crucial exculpatory witness into pleading the Fifth Amendment; to allow the witness’ blanket plea of the Fifth Amendment — even if “capricious,” “frivolous” and absent “any basis” — without any probing of the basis of that plea; and then to instruct the jury that “either party” has the power to subpoena witnesses “if he chooses” — knowing full well that the defendant had no power to obtain his crucial witness’ testimony in the face of the trial court’s actions and absent a grant of defense witness immunity? Table of Contents. Opinion below Jurisdiction Constitutional and statutory provisions involved Statement of the case I. Introduction II. Facts Reasons for granting the writ I. The court should grant the writ to determine whether defendant was denied due process by the Court of Appeals’ affirmance of his conviction on a legal and factual theory completely at variance with the theory presented to the jury A. An appellate court cannot change theories un- derlying convictions “midstream” B. Shifting the burden of proof of an essential ele- ment of a crime to a criminal defendant itself violates due process II. The court should grant the writ to determine whether the trial court’s actions in relation to the defendant’s crucial exculpatory witness deprived him of the right to a fair trial A. The trial court erred in failing to probe Las- soff’s assertion of the Fifth Amendment privi- lege against self-incrimination B. Lassoff’s testimony should not have been ex- cluded in its entirety C. To the extent that Lassoff’s claim of privilege may have been valid, limited use immunity should have been granted to Lassoff for specific answers a oownrsdswnd = 14 16 18 ii TABLE OF AUTHORITIES CITED. D. Defendant was deprived of a fair trial by the trial court’s instructions to the jury concerning defendant's ability to call witnesses 27 Conclusion 29 Appendix A la Appendix B 5a Table of Authorities Cited. CAsEs. Bouie v. City of Columbia, 378 U.S. 347 (1964) 13 Chambers v. Mississippi, 410 U.S. 284 (1973) 21 Chiarella v. United States, 100 S.Ct. 1108 (1980) 14 Cole v. Arkansas, 333 U.S. 196 (1948) 16n Dunn v. United States, 442 U.S. 100 (1979) 15 Earl v. United States, 361 F.2d 531 (D.C. Cir. 1966) 26 Eaton v. City of Tulsa, 415 U.S. 697 (1974) 15 Garner v. Louisiana, 368 U.S. 157 (1961) 16n Hoffman v. United States, 341 U.S. 479 (1951) 19, 23 In re Folding Carton Antitrust Litigation, 465 F.Supp. 618 (N.D. Ill. 1979) 24 In re Master Key Litigation, 507 F.2d 292 (9th Cir. 1974) 25 In re Winship, 397 U.S. 358 (1970) 17 Klein v. Smith, 559 F.2d 189 (2d Cir.), cert. denied, 434 U.S. 987 (1977) 19, 24 L.B. Foster Co. v. Hurnblad, 418 F.2d 727 (9th Cir. 1969) 12 TABLE OF AUTHORITIES CITED. iii Marchetti v. United States, 390 U.S. 39 (1968) 23 Mullaney v. Wilbur, 421 U.S. 684 (1975) 17 Patterson v. New York, 432 U.S. 197 (1977) 18 Rewis v. United States, 401 U.S. 808 (1971) 16n Roberts v. United States, 100 S.Ct. 1358 (1980) 19 Rogers v. United States, 340 U.S. 367 (1951) 19, 24 Sandstrom v. Montana, 442 U.S. 510 (1979) 17 United States v. Alessio, 528 F.2d 1079 (9th Cir.), cert. denied, 426 U.S. 948 (1976) 26 United States v. Anglada, 524 F.2d 296 (2d Cir. 1975) 20, 23 United States v. Davis, 623 F.2d 188 (1st Cir. 1980) 26 United States v. Diogo, 320 F.2d 899 (2d Cir. 1963) 16n United States v. Gomez-Rojas, 507 F.2d 1213 (5th Cir.), cert. denied, 423 U.S. 826 (1975) 20, 21 United States v. Goodwin, 625 F.2d 693 (5th Cir. 1980) 19, 20 United States v. Lacob, 416 F.2d 756 (7th Cir. 1969), cert. denied, 396 U.S. 1059 (1970) 13 United States v. Melchor-Moreno, 536 F.2d 1042 (5th Cir. 1976) 19, 20, 21 United States v. Neff, 615 F.2d 1235 (9th Cir. 1980) 23 United States v. Partin, 552 F.2d 621 (5th Cir.), cert. denied, 434 U.S. 903 (1977) 20, 23 United States v. Porter, 591 F.2d 1048 (5th Cir. 1979) 16n United States v. Reese, 561 F.2d 894 (D.C. Cir. 1977) 19 United States v. Slutsky, 487 F.2d 832 (2d Cir. 1973), cert. denied, 416 U.S. 937 (1974) 12n, 13, 17 United States v. Turkish, 623 F.2d 769 (2d Cir. 1980) 26 United States v. Waddell, 507 F.2d 1226 (5th Cir. 1975) 21 iv TABLE OF AUTHORITIES CITED. Warnell v. United States, 291 F.2d 687 (5th Cir. 1961) 19 Washington v. Texas, 388 U.S. 14 (1967) 21 Zicarelli v. New Jersey State Commission of Investiga- tion, 406 U.S. 472 (1972) 23 CONSTITUTIONAL AND STATUTORY PROVISIONS. United States Constitution Amendment V 2, 3, 18, 19, 20 et seq. Amendment VI 2, 19n, 21, 26 Amendment XIV 17, 21 26 U.S.C. §§ 6531(2), 6531(3), 6531(5) 24n 28 U.S.C. § 1254 2 MISCELLANEOUS. Comment, 24 Loyola L. Rev. 33 (1978) 8 Mitchell, “Interest-Free Loans: Opportunities for Tax Pianning,” 65 A.B.A.J. 634 (Apr. 1979) 8 Note, “The Fifth Amendment Testimonial Privilege as an Impediment to the Defense When Invoked by a Potential Exculpatory Witness,” 42 Albany L. Rev. 482 (1978) 25 Note, “The Sixth Amendment Right to Have Use Im- munity Granted to Defense Witnesses,” 91 Harv. L. Rev. 1266 (1978) 25 Note, “Testimonial Waiver of the Privilege Against Self-Incrimination,” 92 Harv. L. Rev. 1752 (1979) Re Westen, “The Compulsory Process Clause,” 73 Mich. L. Rev. 71 (1974) No. - In the Supreme Court of the United States. Ocroser Term, 1980. JOHN GARGANO, PETITIONER, v. UNITED STATES OF AMERICA, RESPONDENT. Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit. Opinion Below. The opinion of the Court of Appeals is unreported and ap- pears as Appendix A. The order denying rehearing appears as Appendix B. 2 Jurisdiction. This is a timely petition for certiorari to the United States Court of Appeals for the Second Circuit from a decision rendered on December 30, 1980 and a denial of rehearing rendered on March 10, 1981. Jurisdiction is conferred by 28 U.S.C. §§ 1254. Constitutional and Statutory Provisions Involved. UNITED STATES CONSTITUTION. Amendment V. No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or in- dictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual ser- vice in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopar- dy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. Amendment VI. In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously as- certained by law, and to be informed of the nature and cause of the accusation; to be confronted with the wit- 3 nesses against him; to have compulsory process for ob- taining witnesses in his favor, and to have the Assistance of Counsel for his defence. Statement of the Case. I. INTRODUCTION. Defendant, a respected businessman, has been convicted of tax evasion and sentenced to imprisonment for engaging in an entirely legitimate and common business transaction: obtain- ing interest-free loans as a form of untaxed compensation for referring business. The person lending him the money did not deduct the payment as an expense, and the defendant- recipient did not report the payments as income. The govern- ment had no evidence that the payments were income or that defendant believed they were taxable. Nevertheless, it prose- cuted defendant, acknowledging that it had the burden of proving both that the payments were income and that the defendant believed them to be so. The defendant’s crucial ex- culpatory witness was the man who made the payments and who treated them as loans by not deducting them as expenses. But the trial court frightened this witness into improperly in- voking the Fifth Amendment by making the gratuitous com- ment to the prosecutor in open court: “I don’t know why you didn’t indict the two of them [defencant and the witness] and try them jointly, and just tell the jury to take their choice.” When the witness then indicated that he had changed his mind and wanted to invoke the privilege, the trial court, in- stead of probing the basis for the claim, ruled that there need not be “any basis” and that he would sustain the defendant’s invocation of the privilege even if it was “frivolous” and “capricious.” 4 These serious issues and others — including the total insuffi- ciency of the evidence — were briefed and argued before a panel of the Court of Appeals. The oral argument was heard in Bridgeport, Connecticut between 10:15 and 11:00 a.m. on December 30, 1980. The panel did not seem familiar with the issues or record. By the middle of that very afternoon, the decision of the panel had been rendered and the opinion placed in the mail. The opinion — which was full of glaring errors about the record* — affirmed the conviction on a legal theory totally at variance with that submitted to the jury by the trial court: the Court of Appeals held that the burden of proof was on the defendant to establish that the payments were loans, and that the defendant had “failed . . . to prove, rather than merely assert, that the payments were loans” (em- phasis added). The Court of Appeals — in its hastily com- posed opinion — thus shifted the burden of proof to the de- fendant on an essential element of the crime after the trial court had plainly placed that burden on the government, and *For example, the opinion cites evidence “of similar arrangements with other attorneys” as proof from which “the jury could infer willfulness.” But the trial court admitted evidence of similar arrangements solely to establish the narrow and uncontested facts that “there is such a practice” and that “Mr. Gargano was aware of this practice.” The trial court expressly warned the jury to “draw no inferences beyond those two conclusions” (T. 144). The panel also cited “the evidence [of] failure to keep any records of the alleged loans.” But as appellant’s counsel emphasized without contradiction on oral argument, there was absolutely no evidence in the record of any failure by Gargano to keep records. The panel also pointed to “the suspicious methods employed,” but Gargano received loans by way of checks, not cash. He openly consulted with his accountant throughout the three years in question about the loans and with Mr. Lassoff, the lender. There is nothing in- criminating or even suspicious about the absence of interest or of a written loan agreement, as these factors merely show that the loans were informal. (See Appellant's Brief before the panel at pp. 23-34.) 5 after the defendant had relied on the trial court’s ruling in waiving his right to testify on his own behalf. The Court of Appeals thus denied defendant due process in several important ways: the court, itself, violated his rights by affirming the conviction on a legal theory different from that presented to the jury; the court, itself, denied him the right to appellate review by the hasty and slipshod manner in which it considered and decided the serious issues raised on appeal; and the court erred on the merits in affirming the conviction in the face of the serious issues raised in the briefs and oral argument. Accordingly, petitioner seeks either a reversal of his conviction or a remand to a different panel of the Court of Appeals for full consideration of the serious issues raised below, and with directions to review the sufficiency of the evidence on the basis of the theory submitted to the jury — namely, that the burden of proof is on the government as to all elements of the crimes. II. Facts. On June 26, 1980, after a four day jury trial before the Honorable George S. Pratt, United States District Judge for the Eastern District of New York, defendant John Gargano was convicted of three counts of tax evasion and three counts of filing false income tax returns, for the tax years 1973, 1974, and 1975. On September 16, 1980, defendant was sentenced to three years imprisonment followed by three years probation and $30,000 in fines. On September 23, 1980, defendant filed his notice of appeal. On December 30, 1980, a panel of the Court of Appeals affirmed the conviction on a legal and fac- tual theory completely at variance with the one presented at trial. On March 10, 1981, the Court of Appeals denied rehearing and rehearing en banc. 6 There was no dispute that Gargano, a federal compensation representative representing federal employees as well as longshoremen and harbor workers before the Federal Work- men’s Compensation Board in New York, received approxi- mately 144 checks totalling $520,000 from attorney Martin Lassoff during the three years in question. The government's theory was that Gargano should have declared these checks as income because he knew that they represented “referral” or “forwarding” fees for cases referred to Lassoff by Gargano. Defendant’s contention was that the checks were loans from Lassoff, given in consideration for Gargano recommending Lassoff as an attorney to Gargano’s clients. Loans are not, of course, taxable income. There were only three people involved in the transactions: Gargano, Lassoff, and Gargano’s accountant, Julian Fisch- grund, who was consulted on the taxability of loans. The rec- ord at trial includes sworn statements by both Lassoff* and Fischgrund** that the sums were loans. The government * As a result of compounded errors by the trial court, Lassoff did not testify directly as a witness at Gargano’s trial. However, much of his sworn testimony during an IRS question-and-answer session was read into evidence during the cross-examination of IRS Agent Rundlatt. (T. 265-81.) It is un- disputed that Lassoff stated: Thev were loans as Mr. Gargano felt the need for money to build up his business or for whatever purpose he needed the money for. (T. 273.) I didn’t take [the checks to Gargano] off my income [tax return as a deduction] as I told you, it is all my money. (T. 274-75.) ** Fischgrund testified that in the middle of 1972, he advised Gargano that to incur a loan does not generate income. (T. 349.) He repeated this advice at a meeting with Gargano and Lassoff at the end of the summer in 1972, warning Lassoff not to improperly deduct money that would constitute loans to Gargano. (T. 349-50.) Fischgrund was aware of the loans prior to the preparation of Gargano’s returns by Fischgrund’s office in 1973, 1974, and 1975; the loan sums were not included on the returns because the money 7 failed to present any evidence on the nature of the transactions or on the parties’ intent. Appellant’s position is that he received interest-free loans from Lassoff because he recommended Lassoff as a lawyer to Gargano’s clients. Interest-free loans, or low interest loans, are a common and entirely legitimate form of compensation, which have the added benefit of being tax-free. (T. 266- 67.)* Gargano presented compensation claims before federal labor board commissioners. Often Gargano’s clients would need an attorney to handle the cases if they moved on to trial before an administrative law judge or to file third-party ad- miralty lawsuits against a ship. In 1972, a federal statutory change increased the federal labor board’s jurisdiction over longshoremen and harbor worker compensation matters, ex- panding the number of cases handled by federal compensation representatives. However, from 1972 until 1977, when a Supreme Court decision settled certain jurisdiction technicali- ties, many of the compensation cases were in limbo — on ap- peal or delayed in processing. As a result, the settlement awards to claimants and the judicially-awarded fees to repre- sentatives were also delayed. (See T. 155-57, 448-55.) Gargano needed the loans to assist his cash position, to keep his business and household running, until these earlier fees were processed and collected. (T. 273.) Gargano, a cash-basis tax- payer, planned that when he later received this fee income, he then would have sufficient funds to repay Lassoff as well as to pay taxes on the income received from the awards. (See T. 249, 275-76, 281.) Accordingly, he planned his financial situation so as to increase the receipt of spendible money (in did not constitute income. (T. 351, 352.) Fischgrund’s firm signed the bot- tom of each return. (T. 351.) Fischgrund was told of the loans by both Lassoff and Gargano. (T. 354.) * The trial transcript is cited herein as T. the form of loans) at a time when his income was low, and to postpone payment of income taxes (as well as repayment of his loans) until his income was high. This should not be surpris- ing, since interest-free loans are recommended as “an attrac- tive tax-planning opportunity” precisely because they do not incur gift or income tax liability, Mitchell, “Interest-Free Loans: Opportunities for Tax Planning,” 65 A.B.A.J. 634 (Apr. 1979); see Comment, 24 Loyola L.Rev.33, 45 (1978) (citing example of “a frequent and valuable customer” or similar individual who is experiencing a temporary shortage of cash being given an interest-free loan by a business in the form of additional time to pay on his account), There were but two major points of dispute between the government and the defendant in this case: 1) whether the checks paid to the defendant by Lassoff over a three-year period constituted loans (as contended by the defendant) or fees (as contended by the govern- ment); and 2) if these checks constituted fees, whether the defend- ant honestly believed they were loans (as contended by the defendant) or whether defendant knowingly and in- tentionally evaded taxes and signed a false return (as con- tended by the government), The government's main witness was a lawyer named Mazeau who was given immunity in exchange for his testimony. He testified that he had heard that during 1973 Lassoff had paid referral fees amounting to 15 percent of the fees earned in the cases referred to him by the defendant. Mazeau had no idea of the total dollar amount of the alleged 1973 fees, nor did he know anything about subsequexit years, Other than Mazeau’s testimony, the government offered no evidence that the checks were fees rather than loans or that the defendant had willfully intended to evade taxes, It told the jury that the “lack of evidence” was “the best evidence.” (T. 572.) It invited the jury to “infer” from the checks themselves that they were referral fees: “Now looking at these checks . . . in and of themselves if they could talk they would say we are not loans, we are income, . . .” (T. 516, 64.) And it argued that the jury should infer the defendant's willfullness from the fact that he offered the defense that the checks were loans. The court repeatedly noted that the government's case was extremely weak. (See, e.g., T. 212, 216, 222, 229, 263.) The main witness for the defense was going to be attorney Lassoff, who was prepared to testify — as he had already done under oath at an IRS question-and-answer session — that the checks were loans, and that he had not deducted them as ex- penses from his own income taxes, Just before Lassoff was to be called to the witness stand, the trial court made the follow- ing uncalled for and injudicious statement: “I don’t know why you didn’t indict the two of them [Gargano and Lassoff] and try them jointly, and just tell the jury to take their choice.” (T. 427.) Lassoff’s lawyer who heard the statement immediately advised Lassoff to invoke his privilege against self-incrimination, When the trial judge was advised of this by defense counsel and invited to inquire about “the basis for his advice” the judge made the following incredible statement: For my purposes it [ Lassoff's lawyer's advice to Lassoff to invoke the privilege] does not have to be any basis. He could make a frivolous capricious advices for all it matters to me, (T. 430; emphasis added.) Lassoff was then called to the witness stand and asked whether he intended to invoke his privilege. Upon answering 10 “yes,” he was excused without him or his lawyer being asked a single question to determine the validity or scope of his claimed privilege. (T. 438.) To compound this obvious error, the trial court instructed the jury that “Defendant has the power to subpoena anyone in support of his position if he chooses” and that “either party has the right to subpoena books and records” (referring to Lassoff and his documents), (T. 588, 647.) This case was submitted to the jury on the legal theory that the government had the burden of proving beyond a reasonable doubt — and without the aid of any burden-shift- ing presumption — that the checks at issue represented income and not loans, At the very beginning of the trial, the govern- ment’s theory was expressly set out in the following exchange: Tue Court: . . . if the government were to prove the receipt of the moneys, that is not enough to get to jury — proving nothing more than the Lassoff moneys? Mr. Fineroc [the prosecutor]: Right. Tue Count: It is enough for the IRS to say the burden is on you, but it does not work that way in a criminal case. Mr. Fineroc: As I read over some of the criminal cases, the periodic receiving of income over a substantial period of time of large amounts, would be prima facie evidence of income. However, that is not what the government is resting on, I have a witness that will testify that Gargano told him that he receives 15 percent . . . I will also be able to show that Lassoff received cases from Gargano. So I have a chain... (T. 18-19; emphasis added.) 11 Tue Court: I am trying to get myself oriented... . IRS does place on you a burden of justifying the non- taxability of any moneys that you received. I guess that means that they can collect it from you civilly, but if you keep your mouth shut they cannot get you criminally, if there is no other evidence. (T. 20; emphasis added.) The trial court thus clearly informed the defendant that in a criminal tax case of this kind — as distinguished from a civil tax case — the burden does not shift to the defendant to prove that the checks were loans; the burden remains on the Govern- ment to prove beyond a reasonable doubt that the checks con- stituted income.* Indeed, the trial court stated that if a criminal defendant keeps his “mouth shut, they cannot get you criminally, if there is no other evidence” in addition to the unexplained checks. At no point during the course of the trial did the trial court inform the defendant — or even suggest to him — that the burden had shifted to him, and that it was now incumbent upon him to prove that the payments were loans. Indeed, the trial court reiterated the government’s continuing burden of proving that the checks were income rather than loans. (See i Tue Court: I was only asking him [the prosecutor] about the dif- ference between civil and criminal proceedings. IRS says any money you get is income, if you cannot prove it to the contrary, which I felt was a little reversing the American system of doing things. It does not seem to gag the Supreme Court. I have to follow them. Apparently that is only in civil proceedings. Mr. Mussorr: That is correct. Tue Court: They can take your property, but they cannot take your liberty on that kind of a presumption. (T. 218; emphasis added.) 12 T. 218, 222, 492-93.) Relying on the government’s continuing burden of proof — and on his own lack of any burden — the defendant in this case waived his right to testify on his own behalf and, to use the trial court’s terminology, kept his “mouth shut.” * It was thus clearly established as the law of the case that the government had the burden of proving that the checks were income rather than loans, that this burden never shifted to the defendant, and that there was absolutely no burden on the de- fendant to prove that the checks were loans. Legal principles set forth by the trial court become, in the absence of objection, law of the case. See, e.g., L.B. Foster Co. v. Hurnblad, 418 F.2d 727, 729 (9th Cir. 1969). These legal principles, upon which the defendant relied, were turned completely on their head by the opinion of the Court of Appeals. The panel’s opinion affirmed the defend- ant’s conviction on the basis of its conclusion that he failed to prove that the checks were loans: the government established a case under the standards set forth in Slutsky, supra[**]: “‘Once the government proves unreported receipts having the appearance of in- *The prosecutor in his summation acknowledged the government's burden to “have proven beyond a reasonable doubt that [the checks] are not loans but income” (T. 504). The jury was charged that: the burden is always upon the prosecution to prove beyond a reasonable doubt every essential element of the crime charged. The law never imposes upon a defendant in a criminal case the burden or duty of calling any witnesses or producing any evidence. (T. 603.) It is for you [the jury] to decide ultimately whetier the Government has established beyond a reasonable doubt that these payments were income to the defendant and not loans. (T. 608; emphasis added.) ** United States v. Slutsky, 487 F.2d 832 (2d Cir. 1973), cert. denied, 416 U.S. 937 (1974). 13 come . . . the burden is on the defendant to explain the receipts, if not reportable income.’ . . .” 487 F.2d at 842, quoting United States v. Lacob, 416 F.2d 756, 760 (7 Cir. 1969), cert. denied, 396 U.S. 1059 (1970) (emphasis in the Slutsky opinion). Receipt of the payments having been conceded, the government introduced ample circumstan- tial evidence from which the jury was entitled to infer that the money was income. Appellant failed thereafter to prove, rather than merely assert, that the payments were loans... . (Statement, p. 2; emphasis added; attached hereto as Appen- dix A.) There are two fundamental errors in the panel’s decision: first, the panel is simply wrong as a matter of law that the burden-shifting “standards set forth in Slutsky” are applicable to a case of this kind; and second, even if the panel were cor- rect about the law, it is the most fundamental violation of due process for an appellate court to affirm a criminal conviction on the basis of a different theory from the theory on which the case was tried. See, e.g., Bouie v. City of Columbia, 378 U.S. 347 (1964). It is an especially grievous violation of due process for a criminal defendant to be informed — for the first time on appeal — that he had failed to satisfy his burden of proof on a crucial element of the crime after the trial court had expressly and repeatedly told him that he had no such burden, and after he waived his right to testify on his own behalf in express reliance on that ruling. Thus, the upshot of these combined errors was that the de- fendant was denied the right to call his most crucial exculpa- tory witness, and the jury was led to believe that the absence of this witness was attributable to the defense. The jury con- victed tl.e defendant on the basis of meager — and wholly in- 14 sufficient — government evidence of guilt, without hearing the only witness who could directly shed light on the transac- tions at issue and thereby establish the defendant’s innocence. To compound these errors even further, the Court of Appeals affirmed the conviction on a legal and factual theory com- pletely at variance with that presented to the jury. Defendant has never had his day in an appellate court on the insufficiency of the government's evidence to satisfy its burden of proof. The search for truth has been thwarted, with the consequence that an innocent defendant has been convicted and sent to prison. Reasons for Granting the Writ. I. Tue Court sHouLD GRANT THE Writ TO DETERMINE WHETHER DEFENDANT WAS DENIED DUE PROCESS BY THE Court oF APPEALS’ AFFIRMANCE OF HIS CONVICTION ON A LEGAL AND FactuAL THEORY COMPLETELY AT VARIANCE WITH THE THEORY PRESENTED TO THE JURY. A. An Appellate Court Cannot Change Theories Underlying Convictions “Midstream”. This Court has recently emphasized that “we [and pre- sumably other appellate courts] cannot affirm a criminal con- viction on the basis of a theory not presented to the jury . . ..” Chiarella v. United States, 100 S.Ct. 1108, 1119 (1980). While Chiarella and the other cases cited, infra, involve an appellate court changing the evidence on which a conviction was based, or changing the crime charged — and, Gargano involves a change in the burden of proof — the underlying principle still applies directly to Gargano. A case cannot go to the jury in one framework and be affirmed on a totally different one. In Chiarella, the Court held that a printer's employee, who profited from knowledge he gleaned from a prospectus being 15 printed, had no duty to a company’s shareholders and did not violate Rule 10(b) standards. The Court then refused to de- cide whether the printer’s employee had breached a duty to the acquiring corporation because that theory was not submit- ted to the jury. Likewise, in Dunn v. United States, 442 U.S. 100, 106, 107 (1979), in reversing defendant’s perjury convictions the Court stated: To uphold a conviction on a charge that was neither alleged in an indictment nor presented to a jury at trial offends the most basic notions of due process. Few con- stitutional principles are more firmly established than a defendant’s right to be heard on the specific charges of which he is accused.... The jury might well have reached the same verdict [and conclusion of perjury] had the prosecution built its case on petitioner's October 21 testimony adopting his September 30 statement rather than on the September statement itself. But the offense was not so defined, and appellate courts are not free to revise the basis on which a defendant is convicted simply because the same result would likely obtain on re- trial... . “[i]t is as much a violation of due process to send an accused to prison following conviction of a charge on which he was never tried as it would be to con- vict him upon a charge that was never made.”. . . [Ci- tations omitted; emphasis added. ] In Dunn, the Supreme Court overturned the Court of Appeals’ affirmance which had been based on defendant’s October 21st statement, because the perjury indictment and jury charge on- ly mentioned a September 3th statement. The Supreme Court in Eaton v. City of Tulsa, 415 U.S. 697, 698 (1974), reiterated the same principle. The State appellate 16 court had affirmed a criminal contempt conviction based on general statements of disrespect in the record by the peti- tioner, whereas the trial court had found contempt based only on one specific expletive. The Supreme Court reversed the conviction: the single expletive constitutionally could not sup- port the contempt conviction, and the appellate court denied petitioner’s due process rights in sustaining the trial court by treating the conviction as based on general statements — i.e., based on a charge not made. * It is especially unconscionable — and unconstitutional — for a court of appeals to impose a burden of proof upon a criminal defendant retroactively after the defendant, in ex- press reliance on the trial court’s contrary ruling, waived his right to take the witness stand on his own behalf. B. Shifting the Burden of Proof of an Essential Element of a Crime to a Criminal Defendant Itself Violates Due Process. Regardless of whether it is a trial court or an appellate court which shifts the burden of proof to the criminal defendant, the *See also Rewis v. United States, 401 U.S. 808, 814 (1971) (reversing “Travel Act” convictions: the government's theory on appeal was not the theory under which the jury was instructed — the government's proposed new interpretation of the Travel Act could not be used to uphold the convic- tion); Garner v. Louisiana, 368 U.S. 157, 163-64 (1961) (the Court would not “be concerned” whether the evidence proved commission of another crime, for it would be a due process violation to convict on a charge never made); Cole v. Arkansas, 333 U.S. 196, 201-02 (1948) (reversing the State Supreme Court's affirmance of defendant's conviction based on Section 1 of a State Labor statute, when the defendants were tried and convicted only on a Section 2 statutory violation: “To conform to due process of law, petitioners were entitled to have the validity of their convictions appraised on considera- tion of the case as it was tried and as the issues were determined in the trial court”); United States v. Porter, 591 F.2d 1048, 1055-1056 n.6 (5th Cir. 1979) (when the case was not tried or instructed on a “pecuniary loss” theory, the government on appeal could not embrace this theory; the appellate court could not “at this late date reconstruct the government's case to affirm three convictions on a theory which was never adopted at trial”); United States v. Diogo, 320 F.2d 899, 909 (2d Cir. 1963). 17 shift under these circumstances violates due process. Sand- strom v. Montana, 442 U.S. 510 (1979), is the latest in a line of Supreme Court cases that have held it violates due process to require a criminal defendant to disprove an essential ingre- dient of the crime charged. This principle is directly ap- plicable to Gargano: either through the panel’s improper reliance on Slutsky or through general vagueness in jury in- structions, Gargano’s due process rights were violated if he was required to prove the payments were loans and not in- come, rather than the prosecution proving the payments were income and not loans. In Sandstrom, defendant’s conviction was reversed because the jury instruction that it was presumed “a person intends the ordinary consequences of his voluntary acts” violated the Fourteenth Amendment requirement that the State prove every element of a criminal offense beyond a reasonable doubt. The substantive issue was whether defendant had committed a “deliberate” crime or a lesser crime. The Mon- tana Supreme Court upheld the above instruction stating that it was acceptable to shift “some” burden of proof on this issue to defendant. The United States Supreme Court disagreed: whether a presumption is “conclusive” or not, it is unconstitu- tional by the means of a presumption to require a defendant to disprove an element of the crime. Similarly, in Mullaney v. Wilbur, 421 U.S. 684 (1975), the Supreme Court reversed defendant’s murder conviction which had been aided by a Maine homicide law that affirmatively shifted the burden of proof to defendant. The Maine law re- quired a defendant to prove he acted in “the heat of passion” in order to avoid first degree murder, rather than having the state affirmatively prove defendant acted with “malice afore- thought.” The Supreme Court held that this shift to defend- ant and presumption in favor of the prosecution did not com- port with due process, citing the first case on this principle, In re Winship, 397 U.S. 358 (1970). The Court stated that even 18 though intent (here, “heat of passion”; in Gargano, the intent to make a loan) is typically considered a fact peculiarly within defendant’s knowledge, this does not justify shifting the burden to defendant. Nor is it unduly onerous on the prosecu- tion to prove a negative: Maine itself requires the prosecution to prove the absence of “self-defense” beyond a reasonable doubt. Id. at 701-02. Sometimes a presumption — such as the presumption of sanity — shifts the burden of production to defendant, but the burden of persuasion cannot be placed on defendant without more exacting due process standards being met. See also Patterson v. New York, 432 U.S. 197 (1977). Accordingly, this Court should grant the writ to determine whether the Court of Appeals’ decision, changing theories and imposing the burden of proof on defendant, requires reversal of his conviction. II. THe Court sHouLpD GRANT THE Wait To DETERMINE WHETHER THE TRIAL Court's ACTIONS IN RELATION TO THE DEFENDANT'S CruciAL ExcuLpatory Witness Deprivep Him OF THE RIGHT TO A Fair TRIAL. A. The Trial Court Erred in Failing to Probe Lassoff's Assertion of the Fifth Amendment Privilege against Self- Incrimination. Up until the eleventh hour during the trial, Martin Lassoff had been waiting to be called as a witness by either the govern- ment or the defense: both sides had subpoenaed him (T. 437). Upon learning of Judge Pratt’s injudicious comment on the record — that the government should have indicted both Gar- gano and Lassoff — Lassoff then chose to heed his lawyer’s ad- vice to assert a blanket Fifth Amendment privilege against self-incrimination. Judge Pratt refused to hear the basis for Lassoff’s attorney's advice or the assertion of the privilege, stating “for my pur- 19 poses it does not have to be any basis,” and it could be for “frivolous” and “capricious” reasons (T. 430). The court did not attempt to ascertain either the validity of Lassoff’s claim of privilege or its scope — i.e., whether certain questions could be put to Lassoff that would not trigger an incriminating response or that had been waived by his prior sworn state- ment. When Lassoff was called to the stand by defendant, the judge allowed Lassoff to make a blanket assertion of the privilege, not requiring specific questions to be asked and the privilege claimed with respect to each. Judge Pratt’s failure to determine the proper basis and scope of the privilege, and to have the claim asserted in response to specific questions, re- quires reversal of Gargano’s convictions. It is established beyond dispute that the trial court has a strong duty to determine the legitimacy of a witness’ reliance upon the Fifth Amendment. E.g., Roberts v. United States, 100 S.Ct. 1358, 1364 (1980); Hoffman v. United States, 341 U.S. 479, 486 (1951); Rogers v. United States, 340 U.S. 367, 374-75 (1951); United States v. Goodwin, 625 F.2d 693, 700-01 (5th Cir. 1980); United States v. Reese, 561 F.2d 894, 900 (D.C. Cir. 1977); Klein v. Smith, 559 F.2d 189, 200 (2d Cir.), cert. denied, 434 U.S. 987 (1977); Warnell v. United States, 291 F.2d 687, 688 (5th Cir. 1961).* Specifically, a witness’ blanket assertion of the privilege — that he will assert the Fifth Amendment to any question counsel might ask — is totally unacceptable: trial judges have been reversed where they have excused witnesses without inquiring into the validity and scope of the witnesses’ claims of privilege. United States v. Goodwin, supra, 625 F.2d at 701; United States v. Melchor- * This is especially true when the witness has been called by the defendant in the exercise of his Sixth Amendment right and where the witness is a crucial one with important testimony to give. See United States v. Melchor- Moreno, 536 F.2d 1042, 1045-46 (5th Cir. 1976). 20 Moreno, 536 F.2d 1042, 1049 (5th Cir. 1976); United States v. Gomez-Rojas, 507 F.2d 1213 (5th Cir.), cert. denied, 423 U.S. 826 (1975). See, e.g., United States v. Anglada, 524 F.2d 296, 300 (2d Cir. 1975). “A court must make a particularized in- quiry, deciding, in connection with each specific area that the questioning party wishes to explore, whether or not the privi- lege is well-founded.” United States v. Melchor-Moreno, supra, 536 F.2d at 1049 (emphasis added); see United States v. Partin, 552 F.2d 621, 631-32 (5th Cir.), cert. denied, 434 U.S. 903 (1977) (“As to each question, the test is whether the witness is confronted with substantial and ‘real,’ and not tri- fling or imaginary hazards of incrimination”) (emphasis add- ed). In the recent case of United States v. Goodwin, 625 F.2d 693 (5th Cir. 1980), the court reversed defendants’ convictions because the trial judge without inquiry allowed two witnesses to make blanket assertions of the Fifth Amendment privilege. Defendants were charged with a conspiracy to smuggle mari- juana into a prison. Defendants wished to call as witnesses two prison inmates whose testimony could have helped defendants establish their defense of entrapment. Upon the representation of the witnesses’ appointed attorneys that their clients had “valid” Fifth Amendment claims as to “unspecified criminal activities” and as to “matters directly or indirectly in- volved in this case,” the court upheld the assertions of the Fifth Amendment. No hearing was conducted on the validity and scope of the self-incrimination claims. The Fifth Circuit re- versed the trial court’s handling of the bald assertions of privilege: The witness may be totally excused only if the Court finds that he would “legitimately refuse to answer essentially all relevant questions.” United States v. Gomez-Rojas, 507 F.2d 1213, 1220 (5th Cir. 1975). . . Even where the 21 judge is satisfied as to the validity of the Fifth Amend- ment claim, he must give heed to the proper scope of such aclaim. A finding of such a valid claim does not normal- ly foreclose all further questions. [Jd. at 701.] In Gargano’s case, not only did the judge fail to explore the scope of the claim, he did not even explore its validity. In- deed, he expressly held that the validity of the claim was ir- relevant “for [his] purposes.” This case is thus in direct con- flict with the decisional law of the Fifth Circuit. Likewise, in United States v. Melchor-Moreno, 536 F.2d 1042 (5th Cir. 1976); United States v. Gomez-Rojas, 507 F.2d 1213 (5th Cir.), cert. denied, 423 U.S. 826 (1975); and United States v. Waddell, 507 F.2d 1226 (5th Cir. 1975), convictions were reversed because trial judges failed fully to probe Fifth Amendment claims of witnesses subpoenaed by defendants. The witnesses in each case were government informers whose testimony was key to defendants’ theories of entrapment. The exclusion of the informers’ testimony in its entirety rose to con- stitutional error, violating defendants’ Sixth Amendment rights to have compulsory process for obtaining witnesses, to offer the witnesses’ testimony — in plain terms, to present a defense. Washington v. Texas, 388 U.S. 14, 19 (1967). Also implicated was the broad requirement of fundamental fairness guaranteed by the Due Process Clause of the Fifth and Four- teenth Amendments: “few rights are more important than that of an accused to present witnesses in his own defense.” Chambers v. Mississippi, 410 U.S. 284, 302 (1973); United States v. Melchor-Moreno, supra, 536 F.2d at 1045-46. The need for a thorough scrutiny by the judge is far greater when the witness is called by the defense than when the wit- ness is called by the government. In the first place the de- fendant has a constitutional right to the witness’ testimony, whereas the government's “rights” are not constitutional in magnitude. Moreover, the government has other ways to probe the “bona fides” of a witness: it often calls witnesses be- fore a grand jury or — as in this case — before an IRS revenue agent, It may invoke the contempt power to compel obedi- ence. Defendants do not have these options and are thus far more dependent upon the judge's probing of the witness’ claim of privilege at the trial in order to obtain testimony. Judge Pratt's handling of Lassoff'’s assertion of the Fifth Amendment stands in marked contrast to the above authority. Judge Pratt did not take a hard look at the blanket assertion of the privilege or at possible limiied questioning, did not inter- rogate Lassoff himself, and did not hear — much less seriously consider —- Lassoff's attorney's reasoning. Judge Pratt did not conduct a hearing, did not employ any alternative method of ascertaining the validity of the privilege, and did not know peculiar information about Lassoff reinforcing a conclusion of potential self-incrimination. Indeed, Judge Pratt indicated that he knew nothing about Lassoff or his situation. In short, Judge Pratt did not perform the affirmative duty of evaluation required of a trial judge faced with a crucial witness’ blanket Fifth Amendment claim. Standing alone, this is a deprivation of Gargano’s constitutional rights and requires reversal of his conviction, B. Lassoff's Testimony should Not have been Excluded in its Entirety. A more compelling case for a judge's active probing of a Fifth Amendment claim is hard to imagine. Had Judge Pratt even begun to measure Lassoff's claim against well-aceepted standards, he quickly would have found that a significant por- tion, if not all, of Lassoff’s testimony should have been com- pelled. Many of the areas on which Lassoff alone could testify simply would not fall under the umbrella of the Fifth Amend- ment. 23 The protection of the privilege is confined to instances where the witness has reasonable cause to apprehend danger from a direct answer — reasonable cause to believe a direct answer would support a conviction or furnish a link in the chain of evidence needed to prove a crime. Hoffman v. United States, 341 U.S. 479, 486 (1951). The self-incrimina- tion privilege “protects against real dangers, not remote and speculative possibilities.” Zicarelli v. New Jersey State Com- mission of Investigation, 406 U.S, 472, 478-79 (1972). Thus, the test is whether, under all the circumstances of the case, in connection with each area of questioning, the claimant is “confronted by substantial and ‘real,’ and not merely trifling or imaginary, hazards of incrimination.” Marchetti v. United States, 390 U.S. 39, 53 (1968); United States v. Neff, 615 F.2d 1235, 1239 (9th Cir. 1980); United States v. Partin, 552 F.2d 621, 631-32 (5th Cir.), cert. denied, 434 U.S, 903 (1977). Lassoff’s testimony about his financial relationship with Gargano, and the loans made, would probably not present a substantial or real hazard of either supporting a conviction or providing a link in a chain of evidence needed to prove a crime. Repeating his sworn testimony that he did not deduct these checks would not be incriminating. Even if Lassoff were able to make a valid claim of the Fifth Amendment to some in- quiries, the other areas of questioning and Lassoff’s answers thereto would still be allowable, indeed crucial to Gargano’s defense. See United States v. Anglada, 524 F.2d 296, 300 (2d Cir. 1975) (the trial court should consider the possibility of allowing carefully phrased, limited questions). Moreover, under all circumstances, Lassoff should certainly have been compelled to testify as to the loans and his relation- ship with Gargano during 1973 — the only year about which the government even claimed to have any incriminating evidence. Judge Pratt easily could have ascertained this fact if he had performed his duty to probe the claim of privilege. 24 There was no danger at the time of Gargano’s trial — June 23, 1980 — of Lassoff being prosecuted for tax evasion, or for false filing, as to his 1973 tax returns. The six-year statute of limita- tions for these crimes* would have expired in April, 1980, as Lassoff filed his 1973 tax returns before April 15, 1974. It seems clear that Lassoff’s claim of privilege should not have been allowed as to testimony about 1973, a period now time- barred from tax prosecution. See Klein v. Smith, 559 F.2d 189 (2d Cir.), cert. denied, 434 U.S. 987 (1977); In re Folding Car- ton Antitrust Litigation, 465 F.Supp. 615, 622-623 (N.D. Ill. 1979). The crucial importance of Lassoff's testimony to Gargano’s defense — and indeed to this case as a whole — has previously been discussed. However, it should be emphasized that testimony by Lassoff, even limited to 1973 and prior years, would have been of critical exculpatory value to defendant, It would have rebutted Mazeau’s second-hand testimony on Gargano-Lassoff avrangements in 1973; indeed, it would have established the facts as to the one year on which the govern- ment has presented any evidence whatsoever. Upon inquiry, Judge Pratt also could have found that Lassoff waived his privilege against self-incrimination, at least as to some areas of questioning. Lassoff testified in depth under oath during the IRS question-and-answer period on the loans to Gargano, on Lassoff'’s deductions, and on Lassoff's in- tent in providing the funds to Gargano. He did not invoke the Fifth Amendment privilege at that time. Repeating this testimony, or supplying details on these subjects, would not have exposed Lassoff to further incrimination. Rogers v. * 26 U.S.C. § 6531 subsections (2), (3), and (5) provide for six-year limita- tion periods for tax evasion, aiding in the preparation of false returns, or fil- ing false returns. No complaint was ever filed against Lassoff, Indeed, the record only shows that Lassoff was civilly audited (T. 205, 400-03, 416). 25 United States, 340 U.S. 367, 373 (1951); In re Master Key Litigation, 507 F.2d 292, 293-94 (9th Cir. 1974). In a criminal prosecution such as Gargano’s, where the interest in finding the truth is greatest, a court “may be more willing {than usual] to find a waiver by a witness whose testimony is important in determining an accused’s guilt or innocence. Where a defendant’s right to confrontation [of witnesses] is implicated, the court may be particularly disposed to find a waiver.” Note, “Testimonial Waiver of the Privilege Against Self-Incrimination,” 92 Harv. L. Rev. 1752, 1762 (1979). C. To the Extent that Lassoff's Claim of Privilege may have been Valid, Limited Use Immunity should have been Granted to Lassoff for Specific Answers. The privilege against self-incrimination is a frequent ob- struction to the presentation of a criminal defendant’s case: it involves a direct confrontation between the defendant's Sixth Amendment rights and the witness’ Fifth Amendment rights. See Westen, “The Compulsory Process Clause,” 73 Mich. L. Rev. 71, 166-68 (1974); Note, “The Fifth Amendment Tes- timonial Privilege as an Impediment to the Defense When In- voked by a Potential Exculpatory Witness,” 42 Albany L. Rev. 482 (1978). However, as Westen points out, the clash can be avoided: the Fifth Amendment privilege is not a privilege to remain silent but a privilege against prosecutorial use of the compelled testimony. Use immunity accorded to the witness protects all constitutional rights involved, and arguably such immunity should be required for defense witnesses with critical exculpatory testimony. 73 Mich. L. Rev. at 167-68; see, e.g., Note, “The Sixth Amendment Right to Have Use Im- munity Granted to Defense Witnesses”, 91 Harv. L. Rev. 1266 (1978). 26 Lassoff’s exculpatory testimony was so important for de- fendant Gargano’s defense that, even had Judge Pratt evaluated and found the claim of privilege to be valid, Lassoff should have been allowed to testify through a grant of use im- munity. At the beginning of Gargano’s trial, Lassoff had been informed that an order for use immunity had been prepared. Even after the government decided not to grant Lassoff use immunity, Lassoff was still prepared to testify up until near the end of trial. Lassoffs change of heart occurred after the judge queried “why didn’t you [the government] indict them both [Gargano and Lassoff]?” It was patently unfair to Lassoff to have been manipulated by the prosecutor on the im- munity issue and then forced to take the Fifth Amendment by the judge’s improper comments. It was even more unjust to defendant Gargano to be stripped of his only source of material, exculpatory testimony. Furthermore, Gargano was denied a fair trial because the government granted immunity to its main witness — Robert Mazeau — and not to defense witness Lassoff. The govern- ment’s selective use of its immunity power has distorted the truth and provides an additional reason to compel use im- munity for Lassoff. See United States v. Davis, 623 F.2d 188, 193 (1st Cir. 1980); United States v. Alessio, 528 F.2d 1079, 1081-82 (9th Cir.), cert. denied, 426 U.S. 948 (1976); Earl v. United States, 361 F.2d 531, 534 n.1 (D.C. Cir. 1966). Finally, no public interests would be subverted by granting use immunity to Lassoff. See United States v. Turkish, 623 F.2d 769, 775 (2d Cir. 1980). Testimony by Lassoff as to the loans would have little bearing, if any, on a government prose- cution of Lassoff that was based on Lassoff’s alleged failure to declare income. There are no individuals to whom Lassoff would be giving “an immunity bath” by testifying. The gov- ernment had already investigated Lassoff and knew what he would say on the witness stand; with Lassoff’s sworn statement 27 before the IRS, “cooperative perjury” was not a threat to the government at the time of trial. In fact, if the government feared that Lassoff’s prior testimony was false, granting use immunity would only protect the government further by the fact that Lassoff again could be subjecting himself to perjury charges. D. Defendant was Deprived of a Fair Trial by the Trial Court’s Instructions to the Jury Concerning Defendant's Ability to Call Witnesses. The trial court, in this case, conveyed to the jury the clear impression that both the government and the defendant had equal access to the testimony and books of Mr. Lassoff. In its charge, the court stated that: The defendant has the power to subpoena anyone in sup- port of his position if he chooses, however, and he may exercise that power if he chooses. [T. 588; emphasis add- ed.] Later, in response to the jury’s question during deliberations as to why Lassoff’s books weren’t subpoenaed, the court an- swered: In a lawsuit, either party has the right to subpoena witnesses or records. ... [T. 647; emphasis added. ] While the defendant does have the ability to subpoena what- ever witnesses or evidence that he requires to present his defense, in this case the defendant did not have the ability to have Mr. Lassoff actually testify. (Jurors do not, of course, 28 understand the subtle distinction between subpoenaing a witness and actually obtaining his testimony.) After Mr. Lassoff invoked his Fifth Amendment privilege not to testify, only the government had the ability — by grant- ing him immunity — to present his testimony. Given the fact that the jury was obviously prepared to draw inferences from Mr. Lassoff’s absence,* the judge’s instruc- tions that either side had the ability to call whatever witness materially deprived the defendant of a fair trial. Lassoff’s testimony was not equally available to both sides. Only the government could elicit his testimony, because only the gov- ernment had the power to grant Lassoff the immunity neces- sary to negate the exclusionary effect of his invoking his Fifth Amendment privilege. Therefore, regardless of what in- ferences the jury might properly have been instructed that they could draw if Mr. Lassoff were in fact available to the defendant, the court erred by giving instructions which im- plied that it was within the defendant’s power to produce Lassoff.** The trial court’s instruction was particularly inap- propriate and prejudicial in a case where, as here, a major portion of the responsibility for Lassoff’s refusal to testify was directly attributable to the trial court’s improper statement about Lassoff’s being indicted. Accordingly, the defendant's convictions should be reversed. *Not only were they urged to do so by the prosecutor during his sum- mation (see T. 567-68, 572-73, 575, 576), but they also inquired as to the absence of Lassoff’s tax records during their deliberations (T. 633). ** Defendant objected to these instructions; indeed, defendant specifically took exception to the trial court’s mention of defendant's ability to subpoena Lassoff's records and to the court’s failure to instruct that defendant has no duty to call any witness on his behalf (T. 495, 627, 642, 643, 645, 648-49). 29 Conclusion. For the foregoing reasons, petitioner respectfully requests that the petition be granted and the convictions be reversed, or — in the alternative — that the case be remanded to a dif- ferent panel of the Court of Appeals for a full consideration of the issues raised, including a review of the sufficiency of the evidence on the basis of the theory submitted to the jury — namely, that the burden of proof remains on the government to establish beyond a reasonable doubt that the payments were taxable income rather than loans, and that the defendant in- tended to defraud the Internal Revenue Service. Respectfully submitted, ALAN M. DERSHOWITZ, 20 Elmwood Avenue, Cambridge, Massachusetts 02138. (617) 661-1965 Counsel for Petitioner la Appendix A. United States Court of Appeals FOR THE SECOND Circu!tT* Stated Term of the United States Court of Appeals, in and for the Second Circuit, held at United States Courthouse at Bridgeport, Connecticut, on the 30th day of December, one thousand nine hundred and eighty. HON. LEONARD P. MOORE, HON. WILLIAM H. TIMBERS, Circuit Judges. HON. LLOYD F. MacMAHON, District Judge, sitting by designation. Circuit Judges. UNITED STATES OF AMERICA, Appellee, v. No. 80-1372 JOHN GARGANO, Appellant. Appeal from the United States District Court for the Eastern District of New York. [* This opinion constitutes a formal opinion of this court and is not uniformly available to all parties, it shall not be reported, cited or otherwise used in unrelated cases before this or any other court.] 2a This cause came on to be heard on the transcript of record from the United States District Court for the Eastern District of New York, and was argued by counsel. ON CONSIDERATION WHEREOF, it is now hereby or- dered, adjudged, and decreed that the judgment of said District Court be and it hereby is affirmed. Appellant was charged with three counts of tax evasion, 26 U.S.C. § 7201 (1976), and three counts of filing false returns, 26 U.S.C. § 7206(1) (1976). After a jury trial, he was con- victed on all counts. The charges against appellant stemmed from payments of $520,000 received by him from his employer, attorney Martin Lassoff. The transfers of money were undisputed. The issue at the heart of the case was whether the payments were interest-free loans or income payments. In order to convict, the jury necessarily believed beyond a reasonable doubt that the payments were income to appellant and thus were unreported taxable income. Appellant raises two claims of er- ror on appeal, each of which we rule upon as follows. First, appellant claims that the evidence was insufficient to support the conviction. Viewing the evidence as we must in the light most favorable to the government, Glasser v. United States, 315 U.S. 60, 80 (1942), we hold that there was ample evidence to support the conviction. Much of the evidence was circumstantial, but in tax evasion cases this is not uncommon. See United States v. Slutsky, 487 F.2d 832, 839-40 (2 Cir. 1973), cert. denied, 416 U.S. 937 (1974). The government did not present an unpersuasive case, as appellant suggests, which in the end rested on the fact that appellant lacked a better ex- planation for the payments. Rather, our careful examination of the record as a whole satisfies us that the government estab- lished a case under the standards set forth in Slutsky, supra: “*Once the government proves unreported receipts having the 3a appearance of income . . . the burden is on the defendant to explain the receipts, if not reportable income. . .’.” 487 F.2d at 842, quoting United States v. Lacob, 416 F.2d 756, 760 (7 Cir. 1969), cert. denied, 396 U.S. 1059 (1970) (emphasis in Slutsky opinion). Receipt of the payments having been con- ceded, the government introduced ample circumstantial evi- dence from which the jury was entitled to infer that the money was income. Appellant failed thereafter to prove, rather than merely assert, that the payments were loans. Similarly, as to the other elements of the offenses charged, and in particular the element of willfulness, we hold that there was ample evi- dence, as well as inferences which reasonably could be drawn from the evidence, to support the conviction. In particular, the evidence of similar arrangements with other attorneys, the failure to keep any records of the alleged loans, and the sus- picious methods employed all provided an ample basis from which the jury could infer willfulness. Second, appellant claims that the district court’s handling of Lassoff’s assertion of his Fifth Amendment privilege against self-incrimination was improper. We disagree. Lassoff might have been an important witness for the appellant, but we are not satisfied that his testimony necessarily would have been crucial. Much of Lassoff’s version of the transaction already was before the jury as the result of the IRS agent’s testimony. Lassoff had ample reason to be fearful of the prospect of pro- ceedings against him. The trial judge, who was well ac- quainted with the facts of the case and with Lassoff's silence before the grand jury, was not required to grant a hearing, either in open court or in chambers, to determine the scope and legitimacy of the claim of privilege. Of major significance is the fact that no objection to this procedure was made in the trial court. On that ground alone, absent any satisfactory ex- planation by appellant as to why we should consider for the first time on appeal claims not asserted below, we would be 4a justified in rejecting this claim of error. Furthermore, we find singularly unpersuasive appellant’s claim that the trial court erred in not granting limited use immunity to the witness Lassoff. Our Court recently discussed in some detail the emerging doctrine of compulsory use immunity to insure a de- fendant’s confrontation rights and found it was not applicable to the facts of that case. United States v. Turkish, 623 F.2d 769, 774-78 (2 Cir. 1980). We likewise find it inapplicable to the instant case. This surely is not the hypothetical “compel- ling” case referred to by Judge Newman in Turkish, especially in view of the ample parallel and circumstantial evidence and the recitation in court of Lassoff’s previous statements. Appellant was convicted on the basis of overwhelming evi- dence of serious offenses after a fair trial. We affirm the con- viction on all counts and we order that the mandate issue forthwith. /s/ LEONARD P. MOORE UNITED STATES CIRCUIT JUDGE /s/ WILLIAM H. TIMBERS UNITED STATES CIRCUIT JUDGE /s/ LLOYD F. MacMAHON UNITED STATES DISTRICT JUDGE SITTING BY DESIGNATION 5a Appendix B. United States Court of Appeals Second Circuit At a stated term of the United States Court of Appeals, in and for the Second Circuit, held at United States Court House, in the City of New York, on the 10th day of March, one thou- sand nine hundred and eighty-one. UNITED STATES OF AMERICA, Plaintiff-Appellee, v. No. 80-1372 JOHN GARGANO, Defendant-Appellant. A petition for rehearing containing a suggestion that the ac- tion be reheard in banc having been filed herein by counsel for the defendant-appellant, John Gargano, Upon consideration by the panel that heard the appeal, it is Ordered that said petition for rehearing is DENIED. It is further noted that the suggestion for rehearing in banc has been transmitted to the judges of the court in regular ac- tive service and to any other judge on the panel that heard the appeal and that no such judge has requested that a vote be taken thereon. /s/ A. DANIEL Fusaro, Clerk --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_2079%3A1. Public record. Not legal advice.