# Petition — Pianko v. United States

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0754%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1984
- **Citation:** 465 U.S. 1008

## Text

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)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0754%3A1. Public record. Not legal advice.