Petition — Pianko v. United States

Office - Supreme Court, U.S.

FILED

DEC 8 1983

83-970

ALEXANDER L. STEVAS,

NO. A-313

IN THE

Supreme Court of the United States

_—o -——

October Term, 1983

_—e--——

FRANK M. PIANKO,

Petitioner,

v.

UNITED STATES OF AMERICA,

Respondent.

—o——

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

snennesipeaains

PETITION FOR WRIT OF CERTIORARI

OF PETITIONER FRANK M. PIANKO

—oe——_

RUBENSTEIN, ISAACS, LAX AND BORDMAN

Professional Corporation

By: ERWIN A. RUBENSTEIN (P-19724)

ROBERT A. KUHR (P-31371)

Attorneys for Petitioner

17220 West Twelve Mile Road, Suite 200

Southfield, Michigan 48076

313/557-8300

Interstate Brief & Record Co., Suite 731, David Whitney Building, Detroit, MI 48226

(313) 962-8745

i

QUESTION PRESENTED FOR REVIEW

DID THE UNITED STATES COURT OF APPEALS FOR THE

SIXTH CIRCUIT ERR BY FAILING TO SET ASIDE AS AN

ABUSE OF DISCRETION THE DISTRICT COURT'S FAILURE

TO ADMIT INTO EVIDENCE AS BUSINESS RECORDS OF

CAMDEN THOROUGHBRED FARMS CERTAIN DOCU-

MENTS WITHIN THE MEANING OF RULES 401 AND 803(6)

OF THE FEDERAL RULES OF EVIDENCE?

ili

TABLE OF CONTENTS

ee ec eee women bre iv

References to the Opinions of the United States

Court of Appeals for the Sixth Circuit and United

States District Court for the Eastern District of

Ie ek b aisle Gbwneee ceedepbecenseses vii

Statement of Grounds on which the Jurisdiction of

the United States Supreme Court is Invoked.... 1

iad y's sce bestdevevesvevcre 2

cb wast eds ns'ee evvoevees ce 2

TCC G ers bee cervbaserevecectsecee’ es 7

SN andi cnadedseuvdovveesseedic 30

Appendix:

Order of the Court of Appeals ...............5. A-1

iv

TABLE OF AUTHORITIES

Page

Cases:

F & S Offshore, Inc. v. K.O. Steel Castings, Inc. , 662

Pia sawn Cee Ge, TORE). .o ss cesereccscahare 8

Fernandez v. Chios Shipping Company, 542 F.2d 145

CE, COPED: b nepiessnbas denen nvevad deds 28

Hamling v. United States, 418 U.S. 87, 94 S. Ct.

Yo *& oe & 6 fe. Prrrrerere i 7

Johnson v. United States, 325 F.2d 709 (1st Cir.

Pa 6 esa t90 dros 6400s nus eppaweke chads 28, 30

In re King Enterprises, Inc., 678 F.2d 73 (8th Cir.

Pax ad sehernesardcccdesanvedhvesadeens 25, 30

Mississippi River Grain Elevator, Inc. v. Bartlett &

Company, Grain, 659 F.2d 1314 (5th Cir.

| EPP TET Tires er 26, 30

Rosenberg v. Collins, 624 F.2d 659 (5th Cir. 1980) 27

Stevenson v. Hertz Corporation, 252 NE 2d 212

CEL Gayo acne ravaden ¢eou-pcaaveek tnlel 26

United States v. Blanton, 700 F.2d 298 (6th Cir

Ss Sadve sirexs'n ode ck eeh ve neeeeeenanaaees 8

United States v. Carranco, 551 F.2d 1197 (10th Cir

WNT sachs obceeenxdstndcedbns oenenreesen 27

United States v. Collyer, 571 F.2d 941 (5th Cir.

1978), rehearing denied, 576 F.2d 1229 (5th Cir.

1979), cert. denied, 439 U.S. 933, 99 S. Ct. 325,

ee eer ar 28, 30

United States v. Consolidated Edison Company of

New York, Inc., 580 F.2d 1122 (2nd Cir.

Page

United States v. Flom, 558 F.2d 1179 (5th Cir.

RUE a awd coy bceadsssccodeeerhthupeaanen 27, 30

United States v. Goins, 593 F.2d 88 (8th Cir. 1979),

cert. denied, 444 U.S. 827, 100 S. Ct. 52, 62 L.

i REO so ap ch ave dsveaadieenenes 27, 30

United States v. Jenkins, 525 F.2d 819 (6th Cir.

chic Wadwhicbinde ey tne ase buchos trendy. 's 7

United States v. Kreimer, 609 F.2d 126 (5th Cir.

ES {400k Sovn'e chivas Vied ae eee aaeee na rihe 9

United States v. Mandel, 591 F.2d 1347 (4th Cir.

1979), cert. denied, 445 U.S. 961, 100 S. Ct.

Wr OG des es Oe GOO. ROOD i ctiwdnewias cbics 7

United States v. McCoy, 517 F.2d 41 (7th Cir. 1975),

cert. denied, 423 U.S. 895, 96 S. Ct. 195, 46 L.

I SUE Sis As wav cots Ba chaeen Sa eD 4

United States v. McFadyen-Snider, 552 F.2d 1178

ER, “ME abso os cab bd be 0 bie Dak nee Valo an 7

United States v. Phillips, 575 F.2d 97 (6th Cir. 1978) 7

United States v. Phillips, 515 F. Supp. 758 (E.D. Ky.

Ee ib inss cau u da 0b vba 6 kept apes aa 27

United States v. Reese, 568 F.2d 1246 (6th Cir.

IS cise Ce. Sin vomeawes sara eERe ee aN 28, 29

United States v. Robinson, 560 F.2d 507 (2nd Cir.

EE AS ie pep 5) Mee bares eo. 8

United States v. Schipani, 289 F. Supp. 43 (E.D.

Dis ME esc nb bewidccs seed buns peaekdebuls 8

EO errr PE rer. ar 27

vi

Page

United States v. Woods, 44 F.2d 127 (4th Cir. 1973),

cert. denied, 415 U.S. 979, 94S. Ct. 1566, 39 L.

els OR COPOED svcd ncdcccodenanne dhaaneeet 9

United States v. Worthington, 698 F.2d 820 (6th Cir.

WU tee ras dads iecéccncpncus Vanna eeamewenl 8

Zenith Radio Corporation v. Matsushita Electric

Industrial Company, Ltd., 505 F. Supp. 1190

GEE d's a b-cnnés 0-0 dds seeueanvaneel 25

Statutes:

AIEEE. Cis bccuecs canoer vecuaueeanemne 27

ES EE oii oc oc Ue nd te cavesatuspenniceen 27

MUR iiss dhvctntes ddeaannenee 1, 2, 5

EE EEE. a civceccadesuageaceauceaet 1

Other Authorities:

Rule 401 of the Federal Rules of Evidence..... 7,11

Rule 402 of the Federal Rules of Evidence....... 7

Rule 803(6) of the Federal Rules of Evidence.. 4, 11,

12, 27, 28, 30

vii

REFERENCE TO THE OPINIONS OF THE UNITED

STATES COURT OF APPEALS FOR THE SIXTH

CIRCUIT AND UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

1. References to the rulings of the United States

District Court for the Eastern District of Michigan and

the testimony at trial are set forth at: 3,4, 5, 6,9, 10, 11,

12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24 and 25.

No opinion or order was issued by the United States

District Court for the Eastern District of Michigan as a

jury verdict was rendered at the conclusion of trial.

2. References to the opinion and order of the United

States Court of Appeals for the Sixth Circuit are set forth

at: 10, 11 and 12.

The opinion and order of the United States Court of

Appeals for the Sixth Circuit is set forth in the Appendix

attached hereto.

NO. A-313

IN THE

Supreme Court of the United States

‘ielesiiatininiven

October Term, 1983

_e-

FRANK M. PIANKO,

Petitioner,

v.

UNITED STATES OF AMERICA,

Respondent.

——_e——

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

—_oe——

PETITION FOR WRIT OF CERTIORARI

OF PETITIONER FRANK M. PIANKO

—oe——

1

STATEMENT OF GROUNDS ON WHICH THE

JURISDICTION OF THE UNITED STATES

SUPREME COURT IS INVOKED

This Court’s jurisdiction under 28 USC § 1254(1) is

invoked with the pertinent dates of this Petition for

Certiorari set forth below:

April 21, 1982: Petitioner was indicted by a Federal

Grand Jury on five counts of violating 26 USC § 7201.

r

“Lea 20, 1982: An Eastern District of Michigan jury

found Petitioner guilty on all five counts charged in the

Indictment.

October 1, 1982: Petitioner filed a Notice of Appeal

appealing the Judgment rendered in this action to the

United States Court of Appeals for the Sixth Circuit.

September 9, 1983: Petitioner’s conviction was

affirmed on appeal to the United States Court of Appeals

for the Sixth Circuit.

October 3, 1983: The United Siates Court of Appeals

for the Sixth Circuit issued a mandate for enforcement of

the Order entered Septernber 9, 1983, which mandate

was recalled by order of the Court, dated November 29,

1983.

October 25, 1983: Petitioner filed an Application for

Extension of Time in which to File the Instant Petition

for Writ of Certorari.

October 28, 1983: The United States Supreme Court

granted Petitioner's Application for an Extension of Time

to File a Petition for Writ of Certiorari until and

including December 8, 1983.

2

STATUTE INVOLVED

Section 7201 of Title 26 is the pertinent statute under

which Petitioner was convicted:

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 $100,000 ($500,000 in the case of a

corporation), or imprisoned not more than 5

years, or both, together with the costs of

prosecution.

STATEMENT OF THE CASE

On April 21, 1982, Petitioner was indicted by a Federal

Grand Jury on five counts of violating 26 U.S.C. § 7201,

for willfully attempting to evade or defeat a substantial

amount of federal income taxes. Count I of the

Indictment pertained to Petitioner's individual federal

income tax return for the calendar year 1976, and Counts

Il and II related to the calendar years 1977 and 1978,

respectively. Counts IV and V charged Petitioner with

willfully attempting to evade or default a substantial

amount of federal income taxes due and owing by

Warrendale Manufacturing Co., a Michigan Corporation,

of which the Petitioner was the President and sole

shareholder, for its fiscal years ending August 31, 1977

and August 31, 1978.

Thereafter, on August 12, 1982, the case proceeded to

trial before a jury presided over by the Honorable Anna

Diggs Taylor, United States District Court Judge for the

Eastern District of Michigan. The jury found the

3

Petitioner guilty on all five counts charged in the

Indictment on August 20, 1982. The method of proof

utilized by the Government in this prosecution to show

substantial understatements of taxable income was the

specific item method.

The defense did not dispute the fact that the various

amounts claimed by the Government to represent

unreported gross income were not reported on either

Petitioner's individual tax returns, reflected on Schedule

C as gross income from the conduct of a trade or

business as a sole proprietorship, or on the income tax

returns of Warrendale Manufacturing Co., a Michigan

Corporation. In fact, the defense not only stipulated to

the unreported amounts of gross income, but likewise

acknowledged the same to the jury in its opening

statement (TR. 8/12/82, pp. 16-17). In addition, Petitioner

readily admitted during direct examination that the

stipulated amounts of gross income were not reported by

him individually on Schedule C or by Warrendale

Manufacturing Co., a Michigan Corporation, for tax

purposes (TR. 8/13/83, pp. 117-118).

The defense to this prosecution was that these

unreported amounts of gross income were spent by

Petitioner to offset deductible expenses which were not

previously taken. If these expenses were considered, the

defense contended there was no tax due and owing,

negating one of the requisite elements to be proved by

the Government (TR. 8/12/82, p. 18). These expenses

pertained to the operation of Camden Thoroughbred

Farms. In this connection, the defense set forth very

detailed documentation attempting to indicate that, in

fact, there was not a substantial tax due and owing.

Petitioner’s Exhibit 8 revealed that various amounts

deposited into a Michigan National Bank account were

é

4

disbursed from such account on behalf of Warrendale

Manufacturing Co. and Camden Thoroughbred Farms;

the Camden Thoroughbred Farms disbursements being

unreported business expenses and, hence, deductions

which would be allowable to offset unreported income.

Less than $10,000 of these expenditures were not

properly allocated as deductible type items (TR. 8/17/82,

pp. 76-83).

In support of this defense, Petitioner introduced into

evidence the canceled checks, check stubs and monthly

check statements relating to the aforestated Michigan

National Bank account for each of the years at issue

(Petitioner's Exhibits 1, 2 and 3). In order to substantiate

these expenditures by the Petitioner and explain certain

of the cash payments from the Michigan National Bank

account, the defense attempted to have admitted into

evidence as business records of Camden Thoroughbred

Farms, pursuant to Rule 803(6) of the Federal Rules of

Evidence, proposed defense Exhibits 4, 5 and 6, which

represented certain bills, invoices and other statements

for services and goods rendered relating to the years,

respectively, 1976, 1977 and 1978 (TR. 8/13/82, pp.

93-117). These bills, invoices and other statements for

services and goods rendered represented vendor

statements received by Petitioner in his capacity as the

sole proprietor of Camden Thoroughbred Farms and

were kept and maintained by him as part of his ordinary

and regular business practice in the regular and usual

course of business of Camden Thoroughbred Farms.

However, the trial court refused to admit Petitioner's

proposed Exhibits 4, 5 and 6 into evidence, indicating

that Camden Thoroughbred Farms was not a “business”

(TR. 8/13/82, pp. 101, 103, 109 and 110). Because one of

the elements necessary to be proved by the Government

5

in order to obtain a conviction under 26 U.S.C. § 7201 is

that there is a substantial tax due and owing, the

question of whether Camden Thoroughbred Farms is a

‘‘business’’ was of primary importance. That

determination and the subsequent question whether a

substantial tax was due and owing was clearly a factual

determination to be made by the jury. However, the trial

court’s statements that Camden Thoroughbred Farms

was not a “business,” in effect, took this important

factual issue from the province of the jury and resulted in

a directed verdict for the Government as to the element

of a substantial tax due and owing. The trial court's

failure to recognize Camden Thoroughbred Farms as a

business was particularly egregious in view of the

abundant evidence to the contrary in the record.

The Petitioner testified that he acquired Camden

Thoroughbred Farms to establish a horsebreeding and

farming business (TR. 8/13/82, pp. 91-97). The farming

aspect of the business consisted of an agreement

between Petitioner and certain sharecroppers who would

split the costs and the crop with Petitioner on an equal

basis (TR. & 13/82, p. 91). Because Petitioner was based in

Dearborn, Michigan, he hired a business manager to run

the breeding and farming operations (TR. 8/13/82, pp.

92-93). Moreover, certain income and expenses of the

business entity of Camden Thoroughbred Farms was

reported on Petitioner's federal income tax returns and

appeared on Schedule C thereon for each year at issue

(TR. 8/13/82, pp. 97-98, Exhibit 22).

The bills, invoices and other statements for services

and goods rendered in the course of doing business as

Camden Thoroughbred Farms were the exclusive

responsibility of and received by Petitioner at his offices

at Warrendale Manufacturing where he made certain that

6

the sundry vendors were paid for services rendered (TR.

8/13/82, pp. 99-107). One bank account for Camden

Thoroughbred Farms was maintained at the Litchfield

branch of the Michigan National Bank, upon which the

payroll for the Farm employees was satisfied. The

additional expenses of Camden Thoroughbred Farms

were routinely and regularly paid from the Warrendale

Manufacturing Michigan National Bank account (TR.

8/13/82, pp. 103-104).

Most importantly, Petitioner was very succinct in

indicating that he marked the check number on each of

the particular bills, invoices and other statements for

services and goods rendered on the day that he wrote the

particular check on behalf of the farm in payment thereof

from the Warrendale Manufacturing account (TR. 8/13/82,

pp. 105-106). The Petitioner further testified that a check

register and a sales receipt journal for Camden

Thoroughbred Farms were additional records maintained

by him at his Warrendale Manufacturing office address.

These records were subsequently turned over to his

accountant, Arnold Zalenko, for use in preparing the

before-noted Schedule C’s (TR. 8/13/82, pp. 110-112),

although the invoices and other statements for goods and

services rendered, along with the canceled checks from

the Michigan National Bank account which were utilized

to pay the farm’s expenses were not turned over to the

accountant, but were maintained by Petitioner (TR.

8/13/82, p. 114).

Upon this record, the trial court concluded that

Petitioner failed to qualify Camden Thoroughbred Farms

as a “business” and, therefore, refused to enter Exhibits

4, 5 and 6 as business records. Thereafter, on October 1,

1982, Petitioner was sentenced to the custody of the

Attorney General for a period of 18 months as to each of

7

the five counts, with the sentences to run concurrently,

and fined in the amount of $5,000.

Additional facts, as required to present the Argument

herein, will be set forth in the body of this Brief.

ARGUMENT

Rule 401 of the Federal Rules of Evidence establishes

that evidence is relevant if it has any tendency to make

the existence of any fact that is of consequence to the

determination of the action more or less probable than it

would be without the evidence. When evidence is founda

to be relevant, it is admissible, with few exceptions,

pursuant to Rule 402 of the Federal Rules of Evidence.

According to Rule 401, relevancy is a relationship

between a proferred item of evidence and a “fact that is

of consequence to the determination of the action.” An

item of evidence is of consequence to the determination

of the action when it has a direct bearing upon the guilt

or innocence of an accused. United States v. Mandel, 591

F.2d 1347, 1366-67 (4th Cir. 1979), cert. denied, 445 U.S.

961, 100 S. Ct. 1647, 64 L. Ed. 2d 336 (1980).

In determining questions of relevance, a trial judge is

given a wide range of discretion. Hamling v. United

States, 418 U.S. 87, 124-25, 94 S. Ct. 2887, 41 L. Ed. 2d

590 (1974); United States v. Phillips, 575 F.2d 97, 100 (6th

Cir. 1978). In a criminal case, a trial judge must, in the

exercise of sound discretion, weigh the probative value

of the proferred evidence against the possibility of

undue prejudice. United States v. Jenkins, 525 F.2d 819,

824 (6th Cir. 1975). On appeal, evidentiary rulings will

be disturbed only in the event of a grave abuse of

discretion. United States v. McFadyen-Snider, 552 F.2d

8

1178, 1182 (6th Cir. 1977); United States v. Worthington,

698 F.2d 820, 827 (6th Cir. 1983); United States v. Blanton,

700 F.2d 298, 313 (6th Cir. 1983). Under the facts of this

case, it is clear that the District Court abused its

discretion and the Appellate Court impermissibly

sanctioned that abuse.

In F & S Offshore, Inc. v. K.O. Steel Castings, Inc., 662

F.2d 1104, 1107-08 (5th Cir. 1981), the Court set forth the

standard upon which an issue under Rule 401 should be

reviewed: ‘In reviewing the district court’s decision,

an appellate court should assume the maximum

probative force and the minimum prejudice to be

reasonably expected.’’ Moreover, a trial judge must

identify and articulate the circumstances and factors

crucial to his or her ruling upon such an issue so that an

appellate court can discern whether there has been an

abuse of discretion. United States v. Robinson, 560 F.2d

507 (2nd Cir. 1977).

Indeed, the trial court’s function in determining

relevancy is: “only to decide whether a reasonable man

might have his assessment of the probabilities of a

material proposition changed by the piece of evidence

sought to be admitted. If it may affect that evaluation it

is relevant and, subject to certain other rules, admissible.

... Even, therefore, if a juror decides that the

probability is only 40% that the document referred to

above is authentic, it may help him determine whether

the material proposition is more probably true than not.”

United States v. Schipani, 289 F. Supp. 43, 56 (E.D. N.Y.

1968). The Schipani Court concluded that a judge’s

function in determining admissibility in a case is,

therefore, relatively simple; there being no need to be

unduly concerned about mistakenly admitted evidence

since if the document lacks probative force the jury can

be counted on to ignore it.

9

Particularly egregious is the instance where a trial

court confuses relevancy with the sufficiency of a party’s

proof enabling him to get to the jury on an issue. See, for

example, United States v. McCoy, 517 F.2d 41, 43-44 (7th

Cir. 1975), cert. denied, 423 U.S. 895, 96S. Ct. 195, 46 L.

Ed. 2d 127 (1975), and United States v. Kreimer, 609 F.2d

126 (5th Cir. 1980), where evidence concerning the

amount realized on certain collateral was introduced into

evidence in a prosecution for mail fraud. The Court

found that the evidence ‘had some logical tendency to

support the argument that the collateral was over-valued,

and it was, therefore, relevant and admissible,” Id at

131, but too weak in and of itself to establish the

Government's thesis that there was a deficiency in the

collateral. See also, United States v. Woods, 44 F.2d 127,

130 (4th Cir. 1973), cert. denied, 415 U.S. 979, 94S. Ct.

1566, 39 L. Ed. 2d 875 (1974).

Here, the District Court refused to introduce into

evidence certain invoices which were identified by

Petitioner as business records kept in the ordinary

course of Petitioner’s business. Those records

established, as the testimony of defense expert Burton

W. Carlson, Jr. revealed, that Petitioner had an excess of

unreported deductible business disbursements for the

years 1976, 1977 and 1978 over admitted unreported

income. (TR. 8/17/82, pp. 82-83). Obviously, the records

were material to the outcome of the trial and tended to

establish a ‘‘fact that is of consequence to the

determination of the action’; i.e., the existence of a

complete defense to the Government's prosecution.

Further, the maximum probative force of the records

would have led to a verdict of not guilty as compared to

the minimum prejudice which is reasonably

ascertainable for the failure to admit these records, the

same being the very result rendered after three days of

10

deliberation; a guilty verdict. In fact, an examination of

the instruction to the jury with respect to this defense

reveals:

The Court instructs the jury that if it finds there

are offsetting deductible business expenses which

were not taken by the defendant in his tax returns

for the calendar years set forth in the indictment,

and such offsetting deductions are in dollar

amounts such that when deducted from the

omitted sales, there is not a substantial additional

amount of federal income tax due and owing from

the defendant for any of the calendar years

charged in the indictment, then the government

has failed to prove an essential element of the

offense charged, and you must then find the

defendant not guilty for any such calendar year.

(TR. 8/18/82, pp. 24-25).

It is reasonable to infer that if these records had been

admitted into evidence that the jury would have in all

probability returned a different verdict. Instead, the trial

court declined to allow the records to be introduced,

ruling that Petitioner had failed to lay a proper

foundation for their introduction, thereby making the

above instruction a superfluous gesture.

The Court opined that because the invoices were

generated by another company besides Camden

Thoroughbred Farms, they did not constitute the

business records of Camden Thoroughbred Farms, even

though Petitioner testified that these invoices were

routinely kept by Camdem Thoroughbred Farms and

specifically marked for retention and record purposes by

that business. The trial court also believed that no

evidence had been admitted which tended to

11

demonstrate that Camden Thoroughbred Farms was a

business (TR. 8/13/82, pp. 116-117). Accordingly, the trial

court inferentially declined to admit these records on

relevancy grounds, the denial being based, however,

primarily upon the trial court’s misapplication of Rule

803(6) of the Federal Rules of Evidence.

The United States Court of Appeals for the Sixth

Circuit did not reach the question of the admissibility of

these Exhibits under Rule 803(6), instead finding that a

proper foundation for the documents was never laid,

therefore, ruling that the records were irrelevant and

hence inadmissible. Notably, neither court engaged in

the requisite weighing of the probative value of this

evidence versus the likely prejudicial effect of its

introduction, a factor in and of itself which should

compel this Honorable Court to remand this action to the

trial court. The District Court, although, did recognize in

a comment that: “(t)he dollar amounts have particular

significance in this case which means to be valid, to be

accepted into evidence as the attorney said, he'll have to

meet the business records rule.”’ (TR. 8/13/82, p. 116)

The District Court, therefore, premised its ruling upon

a hybrid interpretation of Rules 401 and 803(6) of the

Federal Rules of Evidence. The Court of Appeals further

mystified the evidentiary ruling upon the subject by

disclaiming that it had addressed Rule 803(6), while at

the same time concluding that: (1) it is undisputed that

the content of the documents, without more, does not

demonstrate that the expenses were business-related,

and (2) Petitioner was given an ample opportunity to

establish through testimony that each invoice

represented a business expense of Camden Tho-

roughbred Farms, but failed to do so (Appendix p. A-2).

12

These findings led to the aforestated conclusion that a

proper foundation had not been laid. Yet, a review of the

record discloses that the invoices were never introduced

into evidence. How then could the Court of Appeals

opine upon the contents of the documents when they

were not disclosed? It appears that the Court of Appeals

has inexplicably and illogically used the absence of the

documents to justify their preclusion from the record.

Further, the Court of Appeals represents that Petitioner

was given an ample opportunity to establish through

testimony that each invoice represented a business

expense of Camden Thoroughbred Farms. In fact, the

record discloses that defense counsel did attempt to

examine Petitioner with regard to each and every

invoice. The trial court, however, would not permit

defense counsel to proceed (TR. 8/13/82, p. 102). Where

then was the “ample opportunity” referred to by the

Court of Appeals? As the record clearly reveals, there

was no opportunity whatsoever.

A careful review of that record demonstrates the

relevancy of the Exhibits in question and their

compliance with Rule 803(6) of the Federal Rules of

Evidence. At the very beginning of the trial, defense

counsel informed the jury and the Court in his opening

statement that Petitioner's defense would be that the

unreported income at issue was offset by unreported

expenses of Camden Thoroughbred Farms. To that end,

the defense established that Petitioner operated a farm in

Camden, Michigan, where he raised horses, including

race horses, and crops through sharecropping

agreements. If there was any doubt that Petitioner's farm

was a business, that doubt was resolved by the

testimony of the Government’s expert witness, Robert

Campbell, who on direct examination by the Assistant

United States Attorney testified that in computing the

13

alleged taxable income for Petitioner, certain farm

expenses were substracted (TR. 8/13/82, pp. 38-53) This

was done in accordance with Stipulation 8 which states:

The following checks drawn on Michigan

National Bank Checking Account No. 0281-2118-4

were expenditures in connection with Camden

Farm. These expenses would be deductible if Camden

Farm were an activity engaged in for profit.

(Emphasis Supplied)

The fact that Camden Thoroughbred Farms was an

activity engaged in for profit was illustrated by the

testimony of Petitioner, who stated that he had bought a

run down farm to establish a horse breeding and crop

raising business (TR. 8/13/82, p. 91). A manager was

hired to oversee the farm and the operations of the

business (TR. 8/13/82, pp. 92-93). Camden Thoroughbred

Farms incurred expenses as evidenced by Petitioner’s

Exhibits 4, 5 and 6 which constituted statements, bills,

invoices and receipts relating to the operation of that

business in i976 through and including 1978,

respectively (TR. 8/13/82, pp. 93-94). Defense counsel,

thereupon, moved to admit Exhibits 4, 5 and 6 into

evidence. Government counsel, however, objected to

their admission arguing that whether they establish a

deduction is irrelevant (TR. 8/13/82, p. 95). The record

thereafter reveals the inability of the trial court to

comprehend the nature of the defense being presented:

The Court: What does it have to do with this?

Mr. Rubenstein: Your Honor, it has to do

with the fact that these represent invoices for

expenses which were paid out of the Michigan

National Bank account for and on behalf of the

farm and/or the business deductible expenses.

14

The Court: He said they were various

payments. And six is a bill for something at

Camden Farms. That is your testimony?

Everything here is a bill?

The Witness: Yes, Your Honor.

The Court: And everything there has been

paid out of the checks in Defendant’s Exhibit 2.

There’s nothing in any of these that isn’t also in

two. They were all paid out of number two, as I

understand it, by these checks.

Mr. Rubenstein: Yes.

The Court: So how does that still relate to this

lawsuit? (Emphasis Supplied) (TR. 8/13/82, pp.

95-96).

Defense counsel endeavored to explain the theory of

the defense. The trial court, however, still did not fathom

the explanation and failed to recognize that Petitioner

maintained a business at Camden Thoroughbred Farms:

The Court: (Interposing) But these are not

yet relevant because we don’t know why they'd

be business expenses. They are bills which the

witness testified he paid out of this account. So

they do represent where some portion of the

funds went.

You have not laid a foundation of relevance

why those bills have anything to do with this

case.

Mr. Rubenstein: Well, those bills represent in

fact a substantiation for the business deductions.

The Court: Well, what business? Sustained.

(Emphasis Supplied) (TR. 8/13/82, pp. 96-97).

15

Defense counsel, accordingly, established that Camden

Thoroughbred Farms was, in fact, a business engaged in

for profit and that the Exhibits represented business

records for Camden Thoroughbred Farms, which the

witness was uniquely qualified to testify upon:

Q

A

OF 0 >

Mr. Rubenstein: Okay. All right.

(By Mr. Rubenstein) Mr. Pianko, what is

Camden Farms?

Camden Farms is a thoroughbred farms.

The Court: What?

The Witness: Thoroughbred farms, Your

Honor.

(By Mr. Rubenstein) And you are in fact

doing business under the name Camden

Thoroughbred Farms?

Yes.

And where is Camden Thoroughbred Farms

located?

Camden, Michigan.

And do you report on your Federal Income

Tax Return the income from Camden

Thoroughbred Farms?

Yes.

Does Camden Thoroughbred Farms operate as a

business entity?

Yes

Do you own Camden Thoroughbred rarms?

Pardon?

Do you own Camden?

O > oO >

16

Do I call it that —

(Interposing) I’m sorry. Own it?

Yes I do.

All right. Are the invoices which I have placed in

front of you invoices in large part on behalf of

Camden Thoroughbred Farms?

Yes.

Are there also within those invoices — I'm

sorry. Are these also, within those folders,

notations or statements on behalf of

Warrendale Manufacturing Company?

Is there any from Warrendale here, no,

they’re all from the farm.

The invoices that you noted there to be from

the farm were they in fact paid?

Were they what?

Paid?

Yes, they were paid, yes, sir.

And who paid them?

Well, I paid some with check and some with

cash,

Are there notations on those invoices?

Yes, sir. Yes. there’s —

(Interposing) The notations that you are

looking at, did you in fact, in your handwriting,

make the notations at ti¢ time the bills were

paid?

Yes.

17

Do you see anyone else’s handwriting on

there?

No.

Will you take a few moments and look

through each envelope and see if there's

notations other than your own?

The others — my manager's here on this one

here. And this was paid by me.

All right. So that the statements and invoices

were in fact paid by you?

Yes, sir.

Now, let me clear — where were these paid

out — which bank account?

Michigan Bank.

And these represent those invoices in support

of these checks written from the Michigan

National Bank?

Yes.

And were in fact those invoices that you have

looked at for the period, 1976, ‘-7, and ‘-8, are

those the same invoices covering the years

1976, ‘77 and ‘78?

Yes, sir, they do. ‘76, ‘77, ‘78.

All right. And do — did you receive these

statements and invoices in the course of your

doing business as Camden Thoroughbred Farms?

That's right, sir.

And did you pay those invoices from the

Michigan Bank as you were in the process of

doing business as Camden Thoroughbred Farms?

18

A Yes, sir.

Q And that follows within the payment of the

invoices, you would make a notalion that the

invoice was paid?

A Yes. (Emphasis Supplied) (TR. 8/13/82, pp.

97-100).

Again, defense counsel moved to admit Exhibits 4, 5

and 6 into evidence as business records of Camden

Thoroughbred Farms. The trial court remained

perplexed, indicating:

The Court: The Camden Farms was in what

business, and did Camden Farms have any

checkbooks? Did Camden Fa?ms have a bank

account or was all Camden Farms business (sic)

was done under a bank account of Warrendale

Manufacturing?

The Witness: I beg your pardon?

The Court: This business, Camden Farms, did

you have a bank account?

The Witness: Yes. It had a bank account for

just payroll.

The Court: But it was the business practice of

Camden Farms to write checks in the name of

Warrendale Manufacturing?

The Witness: Yes, Your Honor.

Tae

The Court: Well, we don’t know that we have

a business yet from which business records

would be accepted as having been produced in

the due course of business. If we had a business I

don’t know that this would be a showing that

19

they were done in the due course of business

because they don’t appear to be done as usual

business records. Sustained. (Emphasis Supplied)

(TR. 813/82, pp. 100-101).

An offer was, therefore, made to document each and

every invoice and/or statement as a business recc.d of

Camden Thoroughbred Farms. The trial court was

adamant and stated:

The Court: (Interposing) Well, Counsel, to

adjudicate that they can be received for that

reason. The Court has to find preliminary that

there was a business, what the due course of that

business was, to keep records under this person’s

supervision and then that the records you are

offering were kept as the usual records in the due

course of that business in the usual business

procedures. None of that has been established.

(TR. 813/82, p. 103).

To the contrary, as set forth at length above, unrefuted

testimony was already in the record which

unequivocably established that Camden Thoroughbred

Farms was a business engaged in breeding horses and

raising crops, which business Petitioner owned and

supervised and which generated expenses that were paid

in the normal course of business. The payment of those

expenses resulted in the retention and generation of

records kept in the usual course of the business,

Petitioner informing the Court and jury that the

statements and invoices were received in the course of

his doing business as Camden Thoroughbred Farms (TR.

8/13/82, pp. 99-100).

Nonetheless, defense counsel further attempted to

elicit testimony upon this point. Petitioner related that

Camden Thoroughbred Farms maintained a bank

20

account at the Litchfield Branch of Michigan National

Bank, upon which most of the payroll for Camden

Thoroughbred Farms was paid. However, there was

never enough funds in the Litchfield account to pay all of

the business expenses and so when this account was

low, the remaining invoices and/or expenses were paid

from an account kept at the Detroit Branch of Michigan

National Bank by Warrendale Manufacturing (TR.

8/13/82, p. 104). Importantly, Petitioner was the only

individual responsible to see that these invoices were

paid and since the statements arrived at Petitioner's

office at Warrendale Manufacturing he paid them from

the Warrendale Manufacturing account instead of simply

transferring whatever necessary funds to the Litchfield

Branch of Michigan National Bank. Indeed, as the

Litchfield account was used to mostly meet payroll

expenses, the Warrendale Manufacturing account was

primarily used to pay all the other expenses of Camden

Thoroughbred Farms. Petitioner marked the invoices

and noted the check numbers from the Warrendale

Manufacturing account on the day the invoices were

paid so that they could be identified as business

expenses for Camden Thoroughbred Farms and would

not be confused with the business activities of

Warrendale Manufacturing (TR. 8/13/82, pp. 105-106).

Once again, defense counsel moved to admit Exhibits 4,

5 and 6 into evidence as the business records of Camden

Thoroughbred Farms. The Government did not question

that these were, in fact, business records, but argued

that the Exhibits were inadmissible because some of the

invoices in question may have related to Warrendale

Manufacturing as opposed to Camden Thoroughbred

Farms. The trial court sustained this objection, even

though defense counsel was previously prevented from

questioning the witness with respect to each and every

document and upon the ground that:

21

The Court: ... we don’t know yet the

business of Camden Farms that would entitle it to

the business records exception of the hearsay

rule. (TR. 8/13/82, p. 106).

The prior testimony of Petitioner and numerous other

witnesses was, therefore, once more brought to the

attention of the trial court; Petitioner stating that

Camden Thoroughbred Farms was engaged in farming

and raising Michigan bred horses. Additionally,

Petitioner related that only one invoice from all of the

documents contained in the Exhibits pertained to

Warrendale Manufacturing (TR. 8/13/82, pp. 106-107).

Having demonstrated the existence of a business and

resolved the objection raised by the Government,

defense counsel moved to have Exhibits 4, 5 and 6

admitted into evidence. The trial court still did not

accept the fact that Camden Thoroughbred Farms was a

business, which “conducted business in the usual and

due course of business.” (TR. 8/13/82, p. 110). Therefore,

the trial court declined to rule that the Exhibits were

business records.

Hence, defense counsel set upon the task of further

establishing that Camden Thoroughbred Farms was a

business. Petitioner testified that he purchased the

business approximately eight years previously and that

since that time he has been solely responsible for the

retention of the business records of Camden

Thoroughbred Farms and had kept the same in his office

at Warrendale Manufacturing. The trial court, seemingly

in amazement, questioned whether there were books

and records for Camden Thoroughbred Farms, to which

Petitioner reiterated:

The Witness: Yes, they’re kept, regular books.

The Court: Well, how were these payments

22

made on behalf of Warrendale Manufacturing

handled in the books and records?

The Witness: Whatever record is paid out

from the Warrendale firm and whiatever record is

paid out of either one is marked on the bills by

Warrendale. (Emphasis Supplied) (TR. 813/82, p.

111).

At this point it is clear that the trial court believed that

Warrendale Manufacturing was paying the expenses of

Camden Thoroughbred Farms — a fact which simply did

not exist and which Petitioner previously and expressly

refuted.

These books and records which include, inter alia, a

check register and sales receipt journal, were maintained

by Petitioner's accountant, Amold Zalenko, for and on

behalf of Camden Thoroughbred Farms (TR. 8/13/82, p.

112). These records were used by Petitioner’s accountant

to prepare Petitioner's federal income tax returns.

However, Mr. Zalenko did not have in his possession

the invoices and statements contained in Exhibits 4, 5

and 6 as he was unaware of the bank account utilized to

pay these particular invoices (TR. 8/13/82, p. 114). Thus,

Petitioner kept a portion of the business records of

Camden Thoroughbred Farms in his sole possession,

separate and apart from those records which were

tendered over to Mr. Zalenko. Admittedly, this was not

the most prudent way of maintaining business records.

However, poor bookkeeping, even novel bookkeeping,

was not at issue in the criminal trial of Frank M. Pianko.

It is undisputed that Petitioner kept the documents

contained in Exhibits 4, 5 and 6 as a record of payment

by Camden Thoroughbred Farms; the Petitioner marking

those invoices with a particular letter and noting the

check number that the invoices were paid with so that

23

the accounts of Camden Thoroughbred Farms and

Warrendale Manufacturing were not intermingled or

confused. The only event which occurred was that

Petitioner cheated himself by failing to deduct all his

business expenses for Camden Thoroughbred Farms for

1976, 1977 and 1978. While the trial court may

disapprove of the method of keeping these business

records, it cannot, however, substitute its judgment for

the fact that this was how the records were kept.

Nonetheless, that is precisely what occurred. The trial

court completely ignored Petitioner’s testimony and

concluded after defense counsel made a further effort to

introduce the Exhibits as business records that:

The Court: These are records produced — the

other documents were all produced by other

businesses and were received by him, apparently

on behalf of one of his business entities or one of

his entities. But they are being offered to show

that the amounts have something to do with this

case. The dollar amounts have purticular significance

in this case which means to be valid, to be accepted

into evidence as the attorney said, they will have to

meet the business records rule. (Emphasis Supplied)

(TR. 8/13/82, p. 116).

Finally, the trial court in allowing Petitioner to reserve

the right to present further evidence upon the issue

informed defense counsel that she still was not satisfied

that Camden Thoroughbred Farms was a business entity,

nor that Exhibits 4, 5 and 6 were business records (TR.

8/13/82, p. 117).

The introduction of these business records was

especially critical since they totally exculpate Petitioner

from criminal liability as evidenced by the testimony of

defense expert Carlson who stated that in each year

24

(1976, 1977 and 1978) which is the subject matter of the

Indictment, there would be an excess of deductible

disbursements over income (TR. 8/17/82, pp. 82-83).

These records, thus, were probative of a fact that is of

major consequence to the determination of this actign and

unequivocally relevant under even the most stringent

application of Rule 401. Their exclusion as being

irrelevant was, accordingly, a gross abuse of discretion

which has severely prejudiced Petitioner. Moreover, the

Exhibits clearly are business records within the

definition of Rule 803(6) as will be demonstrated below.

The admissibility of business records is governed by

Rule 803(6) of the Federal Rules of Evidence which

provides:

The following are not excluded by the hearsay

rule, even though the declarant is available as a

witness:

» * *

(6) Records of regularly conducted activity.

A memorandum, report, record, or data com-

pilation, in any form, of acts, events, conditions,

opinions, or diagnoses, made at or near

the time by, or from information transmitted

by, a person with knowledge, if kept in the

course of a regularly conducted business activity,

and if it was the regular practice of that business

activity to make the memorandum, report, record

or data compilation, all as shown by the

testimony of the custodian or other qualified

witness, unless the source of information or the

method or circumstances of preparation indicate

lack of trustworthiness. The term “business” as

used in this paragraph includes business,

institution, association, profession, occupation,

25

and calling of every kind, whether or not con-

ducted for profit.

Here, Petitioner established that he regularly and

routinely kept a record of disbursements by Camden

Thoroughbred Farms. Exhibits 4, 5, and 6 contain bills,

invoices and other statements for services and goods

rendered, such as veterinary bills, rent bills, insurance

bills, etc., relating to the operation of Camden

Thoroughbred Farms (TR. 8/13/82, pp. 93-94). These bills,

invoices and other statements were, as testified by

Petitioner, received by him from vendors whereupon

Petitioner would then write a check from the Warrendale

Manufacturing Michigan National Bank account payable

to the vendor, or to cash, write the appropriate check

number on the particular bill or invoice involved and

then mail or make direct cash payment to the particular

vendor (TR. 8/13/82, pp. 98-100). These Exhibits were

accordingly made “pursuant to a systematic and routine

procedure for the conduct of business, one characterized

by careful checking and habits of precision and

regularity such as will justify confidence in the reliability

of the recordkeeping. Zenith Radio Corporation v.

Matsushita Electric Industrial Company, Ltd., 505 F. Supp.

1190, 1233 (E.D. Pa. 1980).

The Eighth Circuit in In re King Enterprises, Inc., 678

F.2d 73 (8th Cir. 1982), decided the case of a

manufacturing company being sued by a bankrupt

construction company for breach of contract in

connection with the construction of an airplane hangar.

During the course of the trial, a question arose as to

whether the construction company should be permitted

to introduce into evidence various invoices which were

prepared by others. In affirming the lower court's ruling

to admit such invoices, the Eighth Circuit noted the

following:

26

In order to prove the cost of the work outside the

scope of the contract ordered by Falcon, King.

introduced the invoices it received from busi-

nesses which supplied materials and services for

this extra work. The invoices were admitted

under Federal Rules of Evidence 803(6), which

excepts, under certain circumstances, records of

regularly conducted business activities from the

hearsay rule. Falcon contends that the invoices do

not fall within the exception and are in fact

hearsay. We find that the invoices are within

permissible limits for proving the cost of the

various changes ordered by Falcon. 678 F.2d 73,

77.

In Mississippi River Grain Elevator, Inc. v. Bartlett &

Company, Grain, 659 F.2d 1314 (5th Cir. 1981), one of the

parties suggested that the lower court erred in admitting

into evidence certain weight certificates, offered to show

systematic short-weighing, which were not prepared by

the party offering same. The Fifth Circuit responded in

the following manner:

MGRE assigns an overly restricted construction to

Rule 803(6), one we rejected in United States v.

Veytia-Bravo {citation omitted]: Rule 803(6) does

not require that the records be prepared by the

business which has custody of them. Where

circumstances indicate that the records are

trustworthy, the party seeking to introduce them

does not have to present testimony of the party

who kept the records or supervised its

preparation. 659 F.2d 1314, 1319.

A similar view of Rule 803(6) of the Federal Rules of

Evidence was expressed by the Second Circuit in United

States v. Consolidated Edison Company of New York, Inc.,

580 F.2d 1122 (2nd Cir. 1978). See also Stevenson v. Hertz

27

Corporation, 252 N.E.2d 212 (1969) where the Supreme

Judical Court of the State of Massachusetts indicated a

like view under Massachusetts law concerning a

provision similar to Rule 803(6) of the Federal Rules of

Evidence.

The Tenth Circuit in United States v. Carranco, 551 F.2d

1197 (10th Cir. 1977), decided a closely analogous case

where the defendant therein was charged with

knowingly receiving and possessing goods taken from an

interstate shipment in violation of 18 U.S.C. §§ 659 and

2. The Court held that a freight bill was -dmissible as a

business record, although it was initiated by a third

party and later adopted and relied upon by a freight

company that used the bill for inventory purposes as a

means of determining whether or not a shipment had an

agreed upon amount of items. The freight bill contained

handwritten notations which a witness explained were

made if discrepancies appeared on a statement,

otherwise the freight bill remained unchanged.

Further support for the introduction of Exhibits 4, 5

and 6 as business records is found in United States v.

Flom, 558 F.2d 1179 (5th Cir. 1977), where the Court

admitted as business records invoices received and held

by Flom’s company, Florida Steel Corporation, in its

regular course of business, but which were prepared and

sent by another company. No testimony of the preparing

business was offered, the Court finding that the

testimony of an official from Florida Steel Corporation

was sufficient to satisfy all the requirements of Rule 803(6)

of the Federal Rules of Evidence. See also United States v.

Phillips, 515 F.Supp. 758 (E.D. KY. 1981); Rosenberg v.

Collins, 624 F.2d 659 (5th Cir. 1980); United States v.

Wigerman, 549 F2d 1192 (8th Cir. 1977); and United States

v. Goins, 593 F.2d 88 (C.A. 8 1979), cert. denied, 444 U.S.

827, 100 S. Ct. 52, 62 L. Ed. 2d 35 (1979), where the Court

28

held that under Rule 803(6) any regularly recorded

memorandum made in the routine course of business is

admissible to show the occurrence of a particular act or

event.

A further case which is directly contrary to the holding

of th» Sixth Circuit in the case at bar is United States v.

Collyer, 571 F.2d 941 (5th Cir. 1978), rehearing denied,

576 F.2d 1229 (5th Cir. 1979), cert. denied, 439 U.S. 933,

99 S. Ct. 325, 58 L. Ed. 2d 328 (1979), where the Fifth

Circuit found no abuse of discretion where a trial court

admitted, pursuant to Rule 803(6), a document that was

kept in the files of one business but composed by

another business. The Court stated that where a witness

testified that a record was made and kept in the regular

course of business and that such witness was the

custodian of the record and knowledgeable as to how it

arrived in his custody, nothing more with respect to Rule

803(6) was required for admission. Indeed, the First

Circuit in Johnson v. United States, 325 F.2d 709 (ist Cir.

1963) held that a jury question is presented once a

movant establishes that records were regular and kept for

the management and operation of the business. The

accuracy of the records has no bearing upon their

admission.

See also Fernandez v. Chios Shipping Company, 542 F.2d

145 (2nd Cir. 1976), where a document was ordered,

received and recorded in the regular and routine course

of business as part of the customary business practice,

and United States v. Reese, 568 F.2d 1246 (6th Cir. 1977),

where a scrapbook consisting of xeroxed copies of

newspaper articles purporting to show the visiting hours

of patients at Elkhart General Hospital was admitted

under Rule 803(6) as a business record. In doing so, the

Sixth Circuit stated:

29

... Fed. R. Evid. 803(6) allows such records of

regularly conducted activity to be admitted

through the testimony of “the custodian or other

qualified witness.’ (Emphasis added)

Crandall’s testimony established that she was an

employee of the hospital with knowledge of the

hospital’s regular practice of dating and keeping

such newspaper articles in the regular course of

its business. The rule is absent any requirement

that the record’s “custodian or other qualified

witness’’ have personal knowledge of the

particular evidence contained in the record. The

fact that the item in the newspaper was factually

written by a newspaper employee and not an

employee of the hospital is not determinative of

the exhibit’s admissibility since the rule

specifically provides that the ““memorandum,

report, record, or data compilation, in any form”

could be made “from information transmitted by,

a person with knowledge.” In this instance, the

hospital itself would qualify as a “person with

knowledge.”’ Accordingly, the trial court did not

err in admitting the exhibit. Id at 1252.

Based on the foregoing, the bills, invoices and other

statements for services and goods rendered as contained

in Petitioner's proposed Exhibits 4, 5 and 6 are clearly

“records” within the meaning and intent of Rule 803(6)

of the Federal Rules of Evidence. In addition, based

upon uncontroverted testimony, Petitioner had actual

knowledge of each bill, invoice or other statement and

made notations of the check numbers thereon at or near

the time when he wrote the underlying check in

payment therefor. Thus, the bills, invoices and other

statements for services and goods rendered were records

30

of acts, events, conditions or opinions made at or near

the time of the act, event, condition or opinion by a

person with knowledge thereof, sufficient to

demonstrate requisite trustworthiness, all as required by

Rule 803(6). Thus, the failure of the trial court to admit

these Exhibits under the circumstances was clearly not in

accordance with the widely accepted construction of Rule

803(6). The Sixth Circuit Court of Appeals has, sub

silentio, sanctioned this unjust result; i.e., the Petitioner

was precluded from presenting a forceful defense to the

Government's prosection.

To allow the result reached by the Sixth Circuit Court

of Appeals in the instant case to stand would sanction a

conflict amongst the Circuits as documented in Collyer,

Flom, Goins, Carranco, In re King, Mississippi River,

Consolidated Edison and Johnson with respect to the

standards to be employed under Rule 803(6). Such a

result would unjustly and unconstitutionally deprive

criminal defendants in the Sixth Circuit of the full

panoply of rights and defenses afforded other criminal

defendants in other circuits.

CONCLUSION

Wherefore, Petitioner respectfully prays that this

Honorable Court grant the instant Petition for Writ of

Certiorari.

Respectfully submitted,

RUBENSTEIN, ISAACS, LAX and BORDMAN

Professional Corporation

By: /s/ ERWIN A. RUBENSTEIN (P-19724)

l/s) ROBERT A. KUHR (P-31371)

Counsel for Petitioner

17220 West Ten Mile Road, Suite 200

Southfield, Michigan 48076

313/557-8300

Dated: December 8, 1983

A-1

APPENDIX TO PETITION FOR WRIT OF

CERTIORARI OF PETITIONER

FRANK M. PIANKO

ORDER

(United States Court of Appeals

for the Sixth Circuit)

(Filed September 9, 1983)

(United States of America, Plan.tiff-Appellee, vs. Frank

M. Pianko, Defendant-Appellant — No. 82-1794)

Before: Engel, Martin and Contie, Circuit Judges.

Frank Pianko appeals from a jury verdict convicting

him of five counts of knowingly evading income taxes by

filing inaccurate tax returns between 1976 and 1978. 26

U.S.C. § 7201. The first three counts concerned the 1976,

1977 and 1978 returns of Pianko and his wife. The other

counts concerned the 1977 and 1978 returns of

Warrendale Manufacturing Company, a corporation of

which the defendant was president and sole shareholder.

The trial judge gave Pianko concurrent sentences of

eighteen months in prison on each count. The defendant

also was fined $5,000. We affirm.

Warrendale Manufacturing Company was a machine

and welding shop which used two types of invoices to

bill customers. One type, whose numbers were prefixed

by the letter ““A’’, generated proceeds which were

deposited in Michigan National Bank but which were

not reported as income on the tax returns in question.

Pianko’s defense was that the money in the Michigan

National account was personal income, rather than

corporate income, and that this income was offset by the

A-2

business expenses of Camden Thoroughbred Farms and

other real property owned by the defendant. Pianko thus

asserted that no tax was due and owing.

In presenting this defense, Pianko attempted to

introduce what he alleged to be business records of

Camden Farms. These records, consisting of various bills

and invoices, purportedly showed that Pianko paid

expenses incurred while operating a farming and race

horse business at Camden Farms. The government

objected to the introduction of these documents on the

ground of relevance ani because the documents were

inadmissible under Federal Rule of Evidence 803(6). The

court sustained the objection on both grounds.

We hold that the defendant failed to establish the

relevance of the tendered documents. Evidentiary rulings

in criminal cases will not be disturbed unless a district

court abuses its discretion. United States v. Jenkins, 525

F.2d 819, 824 (6th Cir. 1975). This standard applies to

rulings on the relevancy of evidence. United States v.

Phillips, 575 F.2d 97, 100 (6th Cir. 1978). The defendant

claims that the district court abused its discretion by not

permitting the invoices to be read into evidence. It is

undisputed, however, that the content of these

documents, without more, does not demonstrate that the

expenses were business related. Although Pianko was

given an ample opportunity to establish through

testimony that each invoice represented a business

expense of Camden Farms, he never did so. Accordingly,

a proper foundation for the documents was never laid.

Having held the invoices inadmissible on the ground of

relevance, we do not reach the Rule 803(6) question.

Pianko’s second assignment of error is that the jury

heard the discussion concerning the admissibility of the

Camden Farms invoices. The court's failure to excuse the

A-3

jury allegedly was prejudicial because the court’s

decision on the admissibility question implied to the

jury that the defendant’s exhibits, and therefore the

defendant himself, lacked trustworthiness. This

argument is without merit because Pianko never

requested that the jury be excused. See Federal Rule of

Evidence 104(c).

The defendant’s final contention is that the

government failed to disclose exculpatory evidence in

violation of Brady v. Maryland, 373 U.S. 83 (1963). The

present case involves a general request for all Brady

materials. The standard of review is whether the

suppressed evidence, if exculpatory, creates a reasonable

doubt that does not otherwise exist. United States v.

Agurs, 427 U.S. 97, 112 (1976).

Betty Palmer, Pianko’s secretary, testified that the

defendant never told her to prepare the Michigan

National account records so that the income deposited

there could be reported. Pianko claims that although the

government interviewed another secretary, Eleanor

McCulskey, before trial and although the government

knew that she would testify that the defendant had

instructed Palmer to prepare the records, the prosecutor

did not divulge this information. After the defendant

mentioned McCulskey during his testimony at trial,

counsel questioned her. McCulskey later testified for the

defense.

We hold that the prosecutor’s conduct does not

implicate Brady because McCulskey’s testimony was not

exculpatory. A thorough review of McCulskey’s

testimony reveals that she never testified that the

defendant instructed Palmer to prepare the Michigan

National account records so that income could be

reported. Furthermore, even if we were to hold that

A-4

McCulskey’s testimony were exculpatory, no

constitutional violation occurred because the latter

testified fully at trial. There simply was no evidence

withheld from the jury which could have created a

reasonable doubt. See Agurs, supra. Pianko responds that

had he known of McCulskey before the government

completed its case in chief, he could have used her

statements to impeach Palmer on cross-examination.

This assertion is erroneous; during the cross-

examination of Palmer, McCulskey’s statements would

have been inadmissible hearsay.

The judgment of the district court is Affirmed.

Entered By Order Of The Court

/si John P. Hehman,

Clerk

Issued As Mandate: October 3, 1983

Costs: None

(Certification Omitted)