Opposition Brief — Van Zandt v. Commissioner

INDEX

2 : be} N f

— J urisdietion at. :

: „ :

a Statute involved :

Statement

Argument . poe :

Conclusion,

| | CITATIONS a

Berkovitz v. 9.8. 213 F. 468 „

Ploch v. Unit p States, 221 F. 2d 786. 3 |

Brown v. .

Herzog v. United States, 226 F. 2d 561, opin- .

ion adhered to, 235 F. 2d 664, certiorari

. denied, 352 U.S. 844 8

ann v. ‘United States, 319 F. 2d 404, certio- a

, rari denied, 375 U.S. 986 .

veg) Morissette v. United States, 342 U.S. 246 5

* People v. Davis, 269 Ill, 256, 110 N. E. eee

. Sherwin v. United States, 320 F. 2d 137, cer-

FT todrari denied, 375 U.S. 964.

United States v. Dentom, 336 F. 2d 785

Wardlaw v. United Stats, 203 F. 2d 884 . aie

Statute: : |

5 Odd! 1954, See. 7206

e

5

a a 3.49 00 00 4 f=)

(26 U. S.C. 1958 ed., Sec. 7206) —.— ö , 8

— —— — .

eee Gt enen ge.

„ Onde tan, 1965 oF le |

oni 5 Eee No. 116

_NoRMAN H. HELMS, PETITIONER.

_° UNITED STATES OF AMERICA -

ON PETITION FOR A WRIT OF GBR ee :

UNITED STATES COURT OF @@@PEALS FORTHE. =,

- FIFTH GIRCON ~ spare See

"BRIEF FOR THE UNITED STATES IN OPPOSITION

„ ornuos ‘BELOW

—

a \ The opinion of the court below (Pet. 15:22) i is re- :

ported at 340 P. 24.16. :

_ JURISDICTION

The dee of the court of appeals was entered :

on December 28, 1964, and a petition for f rel

was denied on March 8, 1965 (Pet. 28-24; B. 591,

626 On March 26, 1965, Mr. Justice Black s ex-

tended the time for filing a en for. certiorari 1 to

er

55 . as Ss .

2 ae „FC

. — 7 1965, and the pelle was filed on that day.

The jurisdiction of this. Court is invoked under 28 a

U.S. C. 1254 (1). ä 1 :

QUESTIONS PRESENTED .

* Whether the district court committed plain er

7. vor in instructing. the jury that it might infer that

petitioner intended the natural’ and 2 98 conse-

~ squences of his conscious acts.

2. Whether the distriet court erred in failing to .

8 struct the jury’ that ãt must not consider evidence of

items of unreported income not listed in the bill of

particulars, where there was no such evidence.

3. Whether petitioner was deprived of a fair trial by

the ee comments during summation to the

101. . "STATUTE INVOLVED As

5 e Revenue Code of 1954.

SFC. 7206. FRAUD AND FALSE STATEMENTS.

Any person ho-

(1) Declaration under saline of perjury.

Wiillfully | ‘makes and ‘subscribes: any return,

statement, or other document, which contains

or is verified by a written declaration that it is

made under the penalties of , perjury, and which

he does not believe to be true and correct as to.

75 e, material matter; ee A *

8 2 „ , 82 tigi |

„Shall be guilty of a felony and, upon éinviction

85 thereof, shall be fined not more 95 $5, 000, or

oie eT

-.

*

5 *

* 20

0

ö . Ie

* 9 "

Sa

ee nc: bes Be d e der

gether with the costs of prosecution. nt

(26 U.S.C. 1958 ed., See. 7206.)

d

2 . 2 5 7 f ee AY 9

_ STATEMEN r 5

On February 27, 1963, petitioner was indicted in 8

the United Sates District Court for the Eastern. Dis-

trict of Texas, Beaumont Division, on two counts of

willfully and knowingly making and subscribing in-

dividual income tax returns (for the years 1958 and

1959), which were verified by written declarations . .

‘that they were made under the penalties of ‘perjury,

and which petitioner did not believe to be true and

correct as to every material matter, in violation of

Section 7206 (1) of the Internal Revenue Code of

1954 (26 U.S.C, 7206 (1)). Each count of the in-

dictment alleged, that petitioner knowingly under-.

stated his gross income on his returns (R. 2-3). The

bill-of particulars stated, inter alia, that tie govern-

ment intended to rely on proof of specific items of

unreported income, principally “omitted gross income

from marble table [pinball machine] collections for

the calendar years 1958 and 1959 (R. 36) and un-

reported interest income received by petitioner dur-

ing the same years from one Fontenot (R. 37).

After a jury. total. petitioner. was found guilty.on

both counts (R. 52). He was fined 52,500 on each

count and gentenced to 18 months imprisonment on

Count I and to two years on Count II (R. 53-54).

The latter prison sentence was suspended and peti-

tioner was placed on probation for five years (R.

“~ 2

~~ 4 8

ans

ed

.

summarized as follows:

During the years. 1958 ina 1959 petitioner v was the

sole owner of the Jefferson Novelty Co., which owned

and operated juke boxes, pinball machines (often re-

ferred to in the record and the petition as “marble

tables“) and shuffle boards (R. 87, 96-97). Peti-

tioner's employee Borel removed the coins from

the machines at least once a week (R. 107, 115, 243).

« By reading the meters inside each machine Borel

ascertained how much each ‘location owner” had

paid out in cash for “free games” (R. 116-118, 224- _

225, 229-230). Borel then paid 40% of the net re-

Geipts to the location owner and kept 60% for peti-

tioner (R. 117-119, 176, 245-246).

Acting under petitioner’s instruction, Borel cus-

tomarily prepared two sets of tickets at the time of

each collection at many of the locations. One set,

showing the true amounts collected, would be initialed

by the location owner; the other, showing fictitious

lesser amounts, would be signed by the location own-

er, who would retain a copy of the latter (false)

ticket only (R. 119-189, 191, 245-246, 257, 309-330,

344-345, 359-360, 391). The amounts of money

shown on the false tickets: were simply made up by

Borel “out of [his] head” (R. 119-121, 176), and a

number of location owners testified to the fact that

their 40% share of the weekly collections ranged from

$8 to $50 higher than the amounts shown on these

tickets (R. 275, 310, 344-345, 353-354, 361, 371, 377,

386). The collection tickets showing the true amounts

also. showed the meter readings of the pinball ma-

chinés; the false tickets did not show any meter read-

ings (R. 127-189, 178-179, 445-447).

Petitioner's bookkeepers entered the lesser (false)

amounts of income on petitioner’s books (R. 227-228,

472-478), and these amounts. were put on his inceme .

tax returns (R. 80, 85-86, 472, 481-482). Upon

audit petitioner furnished the Treasury agents With

the fictitious tickets (which agreed with titioner's

books) (R. 445-447, 466-468, 472-480, 485-490).

Although petitioner told the Treasury agents at the

_ outset of their investigation that prior to 1960 he

had not charged interest on cash loaned by him to

individuals, the proof showed that during 1959 he re-

. ceived $640 in interest payments from Fontenot

1 which was not reported on his tax en = Ear

= 463-464, chagrin ate

~ me

2

ARGUMENT

| 1. There is no ‘substance to petitioners main con- f

- tention (Pet. 9-10), that the trial judge committed :

plain error in 1 the jury as follows (K.

572-87 3):

arily intends the natural and probable conse-

quences of acts knowingly done or knowingly

omitted. So, unless the contrary appears from

the evidence, the jury may draw. the inference -

that the defendant intended all of the conse-

quences which one standing in like circumstances

and possessing like knowledge would reasonably _-

have W to result from 25 act 1 5

8

It is 5 to infer that a person ordin-

8 ?

6.

done or knowingly omitted by the defendant. In

determining this issue of intent the jury is en-

titled to consider any statement or acts done or

omitted by the defendant, and all facts and cir-

cumstances in the evidence which may. aid in its

determination of the state of his mind.

This instruction eliminated the only two faults in

the instructions in three of the cases relied upon by

” petitioner; Berkovitz v. U.S., 213 F. 2d 468 (C. A. 5);

Wardlaw v. United States, 203 F. 2d 884 (C. A. 5th);

Bloch v. United States, 221 F. 2d 786 (C. A. 9th).

First, it deleted any reference to a presumption of a

guilty intent; it stated only what inferences the jury

“may draw” and even limited these by adding un-

less the contrary appears from evidence.” Sec-

ond, the instruction: did not sta that wilfulness

5 could even be inferred from the mere omission of

items of gross income. The first and third sentences

of the instruction simply repeated what has been, for

. many years, the standard instruction on circumstan-

tial evidence of intent—that a man generally intends

‘the normal consequences of his acts, an instruction

which is as necessary and proper in a prosecution for

tax evasion as in any other case. The normal conse-

quence intended in omitting large amounts of income

from a tax return is that the i income will not be taxed

and if, considering all the evidence in the case, the

jury is satisfied that the taxpayer knew when he

1 The Bloch case was, moreover, later overruled sub silentio .

by Brown v. United States, 222 F. 2d 298, 298 (C. A. 9th).

See Herzog v. United States, 226 F. 2d 561, 567 (C.A. 9th), —s_—>

opinion adhered to, 235 F. 2d 664, 668, certiorari denied, 352

U.S. 844.

— 8

— —

„

filed the return that the items were taxable ang

that they were not being reported, it may infer the

existence of the element of wilfulness, The second

sentence of the instruction, though possibly awk-

ward, certainly does not amount to reversible: error

in the absence of any objection at the trial. Sherwin.

v. United States, 320 F. 2d 137 (C. A. 9th), certiorari

denied, 375 U.S. 964; United States v. Denton, 336

F. 2d 785, 788 (C. A. 6th)..

It is true that in Mann v. United States, 319 F. 2d

404, certiorari denied, 375 U.S. 986, the Fifth Circuit

reversed a conviction for income tax evasion on the

ground that the instruction in question constituted

plain error, but in that case “The sole defense

was lack of “wilfulness” (319 F. 2d at 410), and

proof of that element of the offense, as well as its

submission. to the jury under proper judicial guid- _ Beas

ance, was the vital aspect of the case“ (id.). In

the case at bar, as the court below recognized (Pet.

20-21) the real issue before the jury was not wilful-

ness but whether petitioner had in fact received the

unreported income testified to by the government’s

witnesses, and which he has always claimed he did not

receive (R. 463, 545-558). A conflict between hold-

ings of different Fifth Circuit panels, even if it exist-

ed, would hardly be a basis for the granting of cer-

tiorari, and it must be assumed from the denial of

the petition for rehearing en banc (R. 626) that the

Fifth Cireuit was satisfied that there is no such con-

‘flict? *

We see no similarity between the case at and the

: 145

- cases in this Court (Pet. 9-10) with whi e Dead esa ch a

8 stant case. +

2. Also’ without merit is the argument (Pet. 10-

8 ——

jury that it must not consider evidence of unreported

income items not listed in the bill of particulars.

There was no such evidence; hence an instruction on

the subject could have resulted only in confusing the

. Nor is there substance to the argument (Pet.

11-12) that the court below erred in holding that the

trial judge did not abuse his discretion in overruling

an objection to the prosecutor’s argument (Pet. 8)

which was made in “fair resporie to the argument of

defendant's counsel” (Pet. 22). The cases relied u

by’ petitioner. hear no factual resemblanee to th

conflict. For example, in the first case mentioned, Morissette

v. United States, 342 U.S. 246, this Court reversed a convic-

tion on the ground that wilfulness was a question of fact

which should have been submitted to the jury, rather than

determined by the trial judge as a matter of law. Phere is

nothing of that nature in the instant case. f

People v. Davis, 269 Ill. 256, 110 N.E. 9, 6

petitioner (Pet. 11), involved an instruction under which the

jury might have considered evidence other than that spelled

out in the bill of particulars. In the case at bar all of the

items of unreported income proved at the trial (including the

interest paid to petitioner by Fontenot) were included in the

oN aa a 8 ;

9

8 = ‘CONCLUSION

For thie reasons ‘tated, 5 petition for a writ of

certiorari should be denied: 5 eee

: . submitted,

5 __. ARCHIBALD Cox, |

N 555 Solicitor General.

’ oes Lovis F. OBERDORFER,

N Assistant Attorney Generul.

JoserH M. Howand, a

RICHARD B. BUHRMAN,

” Attorneys. aa

*

JUNE 1965. 8