Appendix — Schipani v. United States

. oe Office-Suprame Court, us. |

ren f ee: FILED.

_ JOHN F. DAVIS, CLERK

IN THE

Supreme Court uf the United States

OCTOBER TERM, 1966.

504

JOSEPH F. SCHIPANI,

| Petitioner,

—_—V.—

‘UNITED STATES OF AMERICA, -

-Respondeit

APPENDIX TO PETITION FOR A

"WRIT OF CERTIORARI

Jacos P. LerKowirz, |

Attorney for Petitioner

Joseph F. Schipani, -

‘ 150 Broadway, 3

New York, New York.

Qi «32 Case Parss 1xc., 421 Hudson St.; N.¥.—ORegon 5-4540

INDEX

Appeals sethuddenciwhurass coveve errr ere re A-1

Aprenpix B—Opinion by Rosling, US.DJ. . A-14 .

Apprenpix C—Judgment of the United States Court

sated eee ee ar aia ea seees A-108

~ APPENDIX A

Opinion of United States Court of Appeals

| UNITED. STATES COURT OF APPEALS

ao - For THE Srconp Circuit

aby.

Vv

KJ . !

No. 382—September Term, 1965. |

(Argued May 12,1966. Decided ’June 29, 1966.)

Docket: No. 30256

tr

~ | -Unirep States or AmMERycA, .

Appellee,

vie ; =e

‘JoszPH F. Scurrani,

Defendunt-Appellant.

Before:

WATERMAN, onme and A'NDERSON,

; Circuit anges

dy

vr

Appeal from judgment of conviction in the United States

| District Court for the Eastern District of New York,

George Rosling, Judge, sitting without a jury, on five.

counts of an indictment, each charging willful evasion of

personal income taxes in violation of Title 26 U.S.C. §7201.

' Affirmed. - =. >

ay

Jerome C. Drrore, Assistant U. S. Attorney,

Eastern District of New York (Joseph P.

Hoey, U. S. Attorney, Eastern District of

New York, on the brief), for Appellee.

Jacos P. LerKxowirz, Esq., New York, Non Yaa.

‘ for Defendant-Appellant. .

in

wi

oN on

A2

, Axomioonl, Circuit J udge:

The defendant- -appellant was stein on all five counts

of an indictment charging him with violations ‘of Title 26

U. S. C. §7201' for willfully evading the payment of per-

sonal income taxes due from him for the five calendar -

years 1956 through 1960. He was fined $2500 and sentenced

\. to three years imprisonment on each count, to be served con-

currently, but with the proviso that he should not be re-

leased from confinement until the fines had been fully paid.

The case ‘was tried on the ‘‘net worth” theory, in support

Agoendia A--Opinion o United States Court es Appeals

of which the — offered evidence to prove that

-“Schipani had a certain net worth at the beginning of 1956

and an increase in net worth at the end of that year and

at the end of each succeeding calendar year during the in-

-dictment period. The proof was entirely circumstantial

because Schipani kept. ng records, did not file any income

tax return at all for any of the years covered by the indict-

ment, and did not furnish the Government with any leads

_with regard to any cash reserve, income or expenses.

An essential element of a case of this kind i is proof of

the opening net worth of the accused as it was at the be-

ginning of the indictment period. Holland v. United States, |

848 U. S. 121, 132 (1954). The Government offered as a

basis or. starting point for this phase. of its case a state-

ment made by the defendant in 1943 concerning his cash re-

_* sources at that time, thirteen years before the indictment. |

In that year Schipani had been convicted of an offense *

and commenced serving one and a half years of a two year

term of imprisonment. On February 10, 1943, in the course

1 Title 26 U. S.C. §7201, in pertinent part, reads as follows:

“At 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 ony ;

. of a felony . .

A-3 | as

_Appendia A-—Opinion of pastes States Court of Appeae

a

of a routine interrogation by the prison, authorities relat-

ing to Sehipani’s personal history. and circumstances at

+ ‘the time he was admitted to the prison, he started that the ©

only cash he then had was $1350 which he had left with his

wife.

found, from evidence of Schipani’s financial dealings and

affairs from that time to and including December 31, 1955,’

that Schipani had assets on January 1, 1956 of $18,908.89.

and liabilities of $1300 from which it computed a net worth

of $17, 608. 89 at the beginning of the indictment period.

_ The trial court further found that, at the end of the calen- .

' dar year 1956, the defendant had an increase in «his net

worth of $7,307.35, and in each of the four subsequent ~~

indictment years there was likewise an increase in the, de- =

fendant’s net worth.? :

Tlie findings state, anid the evidence aa showed, that fs

the Government made an exhauStive investigation into vir-

' tually every possible source ‘of information concerning

Schipani’s economic circumstances from January, 1943

through December, 1960. The leads obtained from checking is

over one hundred central and ‘branch bank offices in areas

‘in which Schipani lived and which he frequented, finance

_ Companies and credit bureaus, various insurance, retail and

’ brokerage firms, records of Kings County and the N ew York }

Surrogate Courts and the Estate and Gift Tax Office of the

United States were followed through by investigators. The

Net Worth Previous Increase in

The‘ trial court found this to be true; afd it also 7

39,245. 26 ~

Net Worth |. Year End Net Worth

12/31 /55 . $17,608.89 . ‘

12/31/56 - 24,916.24 . $17,608.89 $7,307.35

12/31/57 28,933.05. 324,916.24 4,016.81

12/31/58 33,979.11 28,933.05 . 5,046.06

12/31/59 -_ "353. 20-.- ~=33; ‘979. 11 a "374. 19

* 12/31/60 38, 353.30 891 96

“=

As

Appendia A—Opinion of United States Court of Appeals

Government also sought out and questioned friends and

. relatives of the appellant for further leads, which were then

.pursued. The information thus obtained furnished ‘the

» proof presented in the Government’s case.

The cash on hand at the end of one year and the beginning

of the next, however, was only one of the items entering

into the total of the assets at that time. The unadjusted

‘net worth was simply the result of subtracting the total

liabilities at the time from the total assets. The eourt be- .

low found that the initial cash of $1350 in 1943 had been

consumed; and it was assumed, on the basis of the pre-

sumption of innocence that, because Schipani filed no in-

come tax returns for the years 1943 through 1955, he never.

(except for a very small amount in 1945) in any of those

years had a yearly gross income in. excess of the amount:

which: would have required him to file a return. His ex-

‘penditures, however, were greatly i in excess of such amounts _

» of income.* It was, therefore; found that the cash on hand

at the beginning of the indictment period, J nwnid 7 1956, 2

was zero.‘ a eee | aoe

8 Expenditures were made by defendant during the 1943

through 1955 of the following amounts segregated by calendar

years. :

1943 $1,203.47 1949 _* ($3,691 73

1944 1,145.60. ° -. 1950 3,528:62

1945 1,145.34 . — 1951 3,804.05 —

1946 - 1,164.64 1952 4,912.86 °

1947 - 8694.02 | - 1953 3,776.71

1948 = 3,138.80 1954 4,646.71

1955 7,079.72

‘ Funds available to defendant on December 31 of each, of the

years in the period from 1/1/43 to 12/31/55 segregated by. calen-

dar years were as follows:

12/31/1943 $1,146.52

. 12/31/1944 955.91

12/31/1945 , 442.76"

“12/31/1946/1955 —0—

Appendia A—Opinion of United States Court of Appeals

The other items of assets, which on that date were found »

to total $18,908:89,° consisted of two ‘savings accounts in

the Flatbush Savings Bank, an investment in United States

Savings Bonds, real estate, and a 1955 Ford auitomobile.

From this amount was subtracted a loan and a mortgage

note totaling $1300. In the subsequent indictment years,

1957 through 1960, the total asset figures reflect purchases

of ‘stock, furniture, and a boat as well as increases in the

existing savings bank accounts and the opening of two

additional small savings bank accounts. The liability total,

which was deducted from the total value of the assets in

- each of the’ years, also reflected additional increases in

liabilities, most of which were associated with oan asset

purchases during the same years.® |

The Government in its proof’ and the trial cunt in its

findings, in arriving at the opening net worth and in cal-

culating the net increase in net worth for each of the indict-

ment years, also made certain adjustments. The findings

show that additions to the unadjusted figure included non-

. “a

5 Defendant's total assets at the — and end of éach in-

dictment year were Dectecmriie as follows:

* 1/1/56 <e

(12/31/55) $18,908.89 12/31/56 _ $37,806.52

1/1/57 . 37,806.52 12/31/57 38,897.48

1/1/58 38,897.48 12/31/58 44,447.77

1/1/59 44,447.77 12/31/59 45,589.33

1/1/60. 45,589.33 12/31/60 45,273.58

6 _ Defendant’s total liabilities at the beginning and end of each

indictment year were — ‘as follows:

1/1/56

7 (12/31/38) ~~ $ 1,300.00 12/31/56 $12,890.28

1/1/57 - 12,890.28 = 12/31/57 9,964.43

1/1/58 9,964.43 12/31/58 10,468:66.

1/1/59 10,468.66 12/31/59 7,236.03

1/1/60 ..-7,236.03 - 12/31/60 6,028.32

0

eer” cea @

_ Appendix, A—Opinion of United States Court of Appeals.

“ eapital expenditures’ and the non-deductible losses:on the

sale of personal property.. ‘The latter were included in ar-

riving at the 1956 net worth and the 1960 net worth. The

loss for each of these years was treated’as the equivalent

of an expenditure, which ‘explains the differences between

‘*total expenditures’’ and ‘‘additions to net worth”’ for each — °

of those years, whereas those items in the other three years

(1957-1959, inclusive) are exactly the same. The deductions

made from the unadjusted net worth, reflect the dividends-

.received exclusion in each of the indictment years, the pro- e

ceeds of a paid up life insurance policy i in 1959, .and re-

funds from the receiver of taxes and a realty company.®

‘The defense offered no-evidence and the principal i issue

at the trial was the. sufficiency of the Government’s case.

The trial court concluded ‘that the Government had proven

7 The total eapeidiines for each of the indictment years were

as follows: \ ;

1956 -_§ 7,330.09- aia seis 7a ae

es 5 ee 9,135.45 - is

“, * 1958 10,316.66

1959 17,432.93

1960 ~~ 10,289.32

8 - Increase in. Adjustments to

- Net Worth = -Net Worth (Exh. ne

before

adjustment . Gross

(Exh. . 281). _— Additions Deductions Inconie ...

* 1956 . $7,307.35 *% $ 8,553.09 $$ 61.52 $15,798.92

1957 4,016.81 9,135.45 96.79 13,055.47

* 1958 - 5,046.06 — 10,316:66 “ 37.08 15,325.64

1959 4,374.19 ——-:17,432.93 1,084.19.* 20,722.93

1960 891.96 12,080.23 59.20 12,912.99

wa Rae seins is sible Nt ah

os

} Aq ,

| Aili A—Opinidn of United States Court of Appeals. .

beyond a reasonable doubt that Schipani had a gross in-

come in each of the indictment years considerably in excess -

of thé amount which required ‘him to file an income tax re- |

turn, that income taxes were due for each of those years

| and that the defendant willfully sought to evade the pay-

ment of the taxes by filing no wee for any. of the years

in question. We affirm.

The appellant has presented a nuiber of points on ap- |

- peal, most of which attack the proof of ‘‘opening net worth’’

‘as insufficient to. establish a prima facie case and which

also attack, as inadequate for proof beyond a reasonable

. doubt, the evidence offered to. show the increases in’ net

worth, particularly as they were allocated to each separate d

tax year.

The only issue veined on the admissibility of evidence

concernéthe denial: of the defendant’s pré-trial motion and

the overruling at the trial of his objection | to the prison

record of what Schipani said to the prison official i in Febru-

ary of 1943 that he had only $1350 in cash which he had

left with his wife. The appellant argues here, as he did

below, that this violated his Fourth Amendment right be-

_ eause the report was the product of an unreasonable’ search

and seizure and his Fifth Amendment right because it was —

an involuntary and .incriminating statement. We agree

with the trial judge, however, that as fay as the Fourth

| Amendment i is concerned, this routine taking down of rele-

j vant information ‘as part of the regular prison procedure

in setting up the personal record of an inmate, unrelated —

" to any pending investigation of a criminal offense,-is not

‘dn unreasonable search or seizure of appellant’s ‘‘person,

house, papers and effects.’’ Schipani made a voluntary.re-

/

‘A-8

,

Appendia 4—Opinion of United States Court ae Appeals

- sponse to a question asked him under Giininatonees which ae

' bore no concéiyable relationship to the procuring of ‘an

_ inculpatory statement by police or prosecuting officials in

connection with any criminal activity, particularly to the

present case which was: not ‘thought of or -initiated until .

many years later. It, therefore, ftirnishes no basis for a

_ claim of lack of due process under the Fifth Amendment. .:

With regard to the Government’s proof that’ there was

virtually no cash in the defendant’s hands as part’ of his

assets as that bore upon the opening net worth of Schipani

-. on January ‘, 1956, we are of the opinion that’ under the

' eireumstances of this case, the Government would have

shown a moré consistent approach if, in the pre-indictment

period, 1943-1955, inclusive, it had assumed, as it did for

the years covered by the indictment, 1956-1960, inclusive, -

that proof of expenditures in a particular calendar year.

- showed a commensurate income for that year. Where, as

here, theré Was so complete and thorough an exhaustion

- of nox taxable sources for. cash, it seems unnecessary to

_ inivoke Schipani’s presumption of i innocence to sanctify the

proposition _ that he. earned, during the pre-indictment

"years, no more) than the maximum gross income ($499.99

. or $599.99) which a person may receive without being re-

quired to file a tax return. His expenditures, as shown by

‘the Government, for the 1943-1955 period did not include

living expenses for himself and family, except for rent.

‘It is more than likely that such living expenses consumed

the $1350 in the year and a half of his imprisonment. At

any rate, it must have been expended by the end of the 13

_ year period. Even’ if-it were not, and it remained as

cash resource on J anuary 1, 1956, there’ would still have

y.

A-9

““Appendia A—Opinion of United Staies Court of Appeals oe

been a substantial increase in net worth in 1956. The

of Schipani’s“expenditures in the pre-indictment years |

must have reflected money which he had: first. received in|

_ income. The court in effect so found, and also determined

that Schipani had no surplus of earnings over expenditures

during that period. = }

The appellant does not otherwise attack the ‘eiitnis be-

cause of a lack of or infirmity i in, the evidential bases on

which they rest, but rather contests-what he describes as the

court’s ‘‘factual theory of the proofs” and the sufficiericy

of the evidence. to establish his guilt on eaeh of the counts

beyond a reasonable doubt.. Conviction in a net worth case

necessarily rests ‘upon inferences reasonably drawn from .

circumstantial evidence. It is within the province of the

trier to draw those inferences-and, so long as they are

reasonably and logically supported by the evidence. they

must stand. The, trial judge made detailed finding , with

annotations of references to pertinent evidence inthe Te¢-

ord, covering” opening net worth and’ the annual. increase

in net worth for each separate calendar and’ tax year for

* the five years covered by the indictment. We are satisfied

‘that there was ample evidence to support the, findin |

sufficient proof to establish Schipani’s guilt. on 4 of the

counts beyond a reasonable doubt.

. Appellant argues, in substance, that the povielagties 4 of |

innocence requires, in cases of this kind, based iy dis are

largely on circumstantial evidence, that the proof

be such as to exclude every reasonable. hypothesis: of inno-

cence. He asserts that the evidence in the present case

would have warranted an inferenge by the court that Schi- -

pani had a cash hoard or reserve from which his expendi-

?

€ A-10 . a | | y

er

Appendia A—Opinion of United States Court. of diaiiate

tures and increases in net worth dietvad, and that, there- :

* fore, the Government had the barden of proving that such

a hoard did not exist, which it failed to do. In the first

place the Supreme Court has characterized this rule. for

‘evaluating the proof’’ ag confusing and incorrect. H olland

' vy. United States, supra, at 139-140.. It declared that the’ |

- rule to be applied is proof beyond .a. reasonable doubt,’

whether the evidence is circumstantial or testimonial. In. -

. the second place the totality of. circumstances. shown by

the evidence in the case, including financial assistance given

to his family, his borrowings, his delinquency i in paying life.

insurance premiums, instalments on. purchase of an auto- :

mobile, payments. on mortgage debt and other bills as well.

as other incidents found by. the trial court, support the con- |

clusion that no such cash hoard.ever existed. The absence

ef such a reserve fund was established as part. of the: .

-Government’s primia facie case. At that point the appellant

remained quiet at his own peril. Holland v. United States,

supra, at 138-139 ; United States v. Mackey, 345 F. 2d 499,

- 506 (7th Cir., 1965), cert. denied, 382 U. S. 824; Fowler v. -

United States, 352 F. 2d 100, 107 i Cir., 1965), cert.

-. denied, 383 U. 8. 907-(1966). _

The appellant has. not on this appeal suggested any non- -

taxable sources other than a cash hoard, and it appears

that the Government negatived all other senengably.coadihts ‘

sources. from which Schipani- could have acquired non-.

taxable funds.’ Under the circumstances, proof of “a likely.

source’’ of net worth increases is not necessary.” United

States v. Massei; 355 U.-S. 595 (1958). Nevertheless, evi-

dence was offered, and tie trial court found, that Schipani

-had likely sources of i income from an. interest in a restau-

. ° 2 : . P

‘ ° ° *) 47%

° af/ .

. 2 Of S

S

_—

~ A-d oy a ; i

_Appendia A—Opinion of United States Court of Appeals

?

rant ‘ni alee ds a negotiator in. labor-management rela-

* tions.. The Government made aut a prima facie proof of :

this fact in the case;.it was. not contradicted, 2 Be . Pui

__. The. appellant disputes that the Government proved the _

element of willfulness, that is to say the specific intention

to e¥ade the payment of taxes. The evidence of Schipani’s

., apparent attempts to conceal i income, however, through the. .

use of assumed names and other devices, and his failure —-

_ to file income tax returns, considered 1 in connection with the ~

_ proof of unreported taxable income, are all that are neces-

sary to show the requisite intent. Holland v. U nited States,

‘supra, at 139; Spies v. United’ States, 317-U. 8. 492, 499,

(1943).° |

' This leads us to comment willy on appellant’ s claim.

that his constitutional rights were violated because he was

convicted of the felony violation. of willful tax evasion un-. |

der Title 26 U. S. C. §7201 “on the charge of failure to file

income tax returns”? which, if willful, is a misdemeanor

under ‘Title 26 U.S. C. §7 203. He asserts that §7201 is void

for vagueness. Actually he was charged with violations of

§7201 as a willful evader and not simply as one who will-

- fully failed to file tax retérns under §7203. The latter may © -

under proper circumstances be a‘ lesser included offense ~

eine of the-former. ‘‘Willfully”’ under $7203 calls only for proof

that the taxpayer failed to file his'tax return jntentionally

and knowingly ‘and not through -accident or mistake or

-. other innocent cause/“ Wiifally under §7201 calls for

pragf that the taxpayer failed to file a tax return with the

. specific. intention of evading or defeating payment of the —

tax. The context.of the respective statutes makes’ this

.: perfectly clear, and they mre been so interpreted and

of,

7 ! EP: i

A-12-

o 4 Appendia A—Opinion of United States Court of Appeals

‘\edhstrued by the’ Supreme Court.. Sansone v. United

eke 380 U. S. 343 (1965) ; Spies v. United States, supra.

_' There is no merit to the claim that §7201 is vague.

Finally, the appellant argues that he was prejudiced by —

the procedure employed by the trial court in screening cer-

. tain niaterialS under the Jencks Act, 18 U. S. C. §3500.

The procedure used by the‘ trial judge was the same which

_ this cor soi conde in United States v. Persico,

349 F. 2d 6, 13 (2d\Cir., 1965). The in camera proceedings

were eonducted with the assistant United States Attorney.

present and participating, but in the absence of defense

- counsel. In Persico,-we stated:

+) 4s Oe procedure followed was entirely unneces- -

sary and violated Canon 17 of the-Canons of Judi-

‘ cial Ethics. We do not consider this a ground for ‘

reversal, but it is adverted to solely to assure that

such procedure is not followed i in the future’’ (foot- _

note omitted).

The reason that the use of such a procedure was not con-

sidered a ground for reversal’ ‘is that, a study of the tran-

; script of the in camera proceeding by this court revealed

‘that absolutely nothing untoward occurred insofar as the.

.. fair trial of this case was concerned’? (349 F. 2d at 13).

In the present case the verbatim minutes of the similar |

irregular proceedings Were examined and we, likewise,

_ find that nothing took place that prejudiced the defendant

in any ‘way. We, therefore, do not reverse. Neither the.

lack of prejudice to the defendant in this particular case

‘nor the lengthy explanation for the procedure in the opin-

ion of the trial judge, however, justifies its continued use.

We are aware that the im ‘camera proceedings i in = case

__» tive action. a

tz

-

»”

. 2 :

mo SS

“«

Appendia b_Opinion a United States Court of —

took place prior to the date of the Persico decision ead the

trial court was.not on notice of the error, but.the use of

’ this procedure after the date of Persico’ will call for correc- -

or 4 .

There was. no other ‘question raised on this appeal as to

the “handling or disclosure to the defense of Jencks Act -

material, but, the materials withheld from the defendant at _.

. the trial were not sealed and sent up to this court as the ©

‘statute requires. It is essential that the district courts

comply with the statutory requirement in this regard.

We have considered the remaining questions raised by

the appellant but conclude that they neither disclose a -

_ ground for error nor warrant discussion.

_-—The judgment of the Wistriet court i is affirmed.

v

A-14 -

APPENDIX iB

Opinion by Rosling, U.S.D. J.

: (3808), UNITED STATES DISTRICT COURT

Eastern ‘District or New YorxK

63-CR-237

»*%

v

Unrrep States or AMERICA, /

—against—

JosePH ¥’, Scurpani,

| | Defendant.

ay.

v

Appearances :

Josrpu P. Hoey, Hse:

United States Attorney —

. Kastern District of New York

Attorney for United States of America

Donald N. Ruby, Esq.

Assistant U. S. Attorney ©

Of Counsel

. .Jacos P, LerKowirz, Eso.

Attorney for Defendant —

~ Rosuine, J...

Defendant, Joseph F. Schipani, is charged in ‘on counts

of an indictment with violation of Section 7201 of the Inter-

nal Revenue Code (IRC 1954).1. Except for the year. in-

~ volved and the dollar amounts specified all counts are alike

A-15

Appendia B—Opinion by Rosling, U.S.D.J. =

‘in their denunciation. The first count to which the other

’. four conform mutatis mutandis charges in substance that °

defendant had in 1956 received a taxable income of

$13,280.06 upon which he owed a federal income tax of

$3,104.02 as to which he was required to make a return to .

the Director of this [3804] District, and to pay the tax on

or before April 15, 1957. It is further charged that with

knowledge of such requirement of the law defendant ‘‘did

wilfully and knowingly attempt to evade and defeat the said

income tax due and owing by him to the United States of

America for said calendar year by failing to make such

.income tax return to the said District Director of Internal

Revenue, or to any other proper officer of the United States

of America, and by failing to pay to said District Director

of Internal Revenue, or to any other proper officer of the

United States of America, said income tax and by con-

cealing and attempting to conceal from all proper officers

of the United States of America the true and correct gross

_ and taxable income of the said defendant J oseph F, Schi-

pani for said calendar year of 1956.”" :

' The other counts, each charging a similar offense in‘

parallel language, contain the following differentiating sta-

tistical data:

Year Unreported Unpaid Unfiled

Count Affected Income ‘Tax Return Due

II 1957 ~ $ 8,291.92 $1,755.90 4/15/58 ©

III 1958 10,053.99 2,214.04 4/15/59

| 16,717.51 4,163.15 4/15/60

_v 1960 = 7,832.67 1,640.71 “4/15/61

N

A-16

| ,

Appendix B—Opinion by Roslimg, U SDJ.

The defendant is adjudged guilty on all counts. The un- -

reported income for the several years is determined to be

the following :?

[3805] |

Tax Year — Gross Income Taxable Income

1956 $15,798.92 $11,256.55 .

1957 13,055.47 | 8,474.67

1958 15,325.64 9,883.88

1959 20,722.93 16,753.29

1960 - 12,912.99 8, 836.98

' Motion for a mistrial for alleged irregularities in the

~ eourt’s conduct of progeedings under 18 U.S.C. 3500 (Jencks °

Act) is denied. For discussion see Appendix following

footnotes, infra pp. 45-92.

iupores oF Fact

1. Expenditures were made by defendant pare the

years 1943 through 1955 of the ai amounts ——-

gated by calendar _ 2,

1943 $1,203.47

1944 ; 1,145.60 ° *

1945 - - 1,145.34

1946. 1 * Ss * 1,164.64

1947 8,694.02

1948 . | 3,138.80

1949 » 3,691.73 -

1950 3,528.62 -

1951 : 3,804.05

1952 fa 4,912.86

7 . 1953 | 3,776.71

o- | —_—_—- 4,646.71

, 1955 * 7,079.72

v/

A-17

Appendix B—Opinion by Rosling, U.S.D.J .

2. Funds. available to defendant on December 31 of each

of the years in the period from 1/1/43 to 12/31/55. seat

gated by calendar years were as follows: P

[3806 ]

12/31/1943 $1,146.52

‘ 12/81/1944 955.91

12/31/1945 442.76

12/31/1946/1955 -0-

3. The government in good faith and with great effort.

and competence conducted an intensive investigation of:

defendant’s financial affairs for the indictment years and

- the anterior period unaided by any leads supplied by de-

fendant or his wife. When solicited by a government rep- _

resentative for leads they either venatad or _seaned to

furnish them. P . a

———

ows

4, Defendant had no, or at most trifling, amounts of cash

on hand at January 1, 1956, which sum if any was far less

than the amount hereinafter found to have constituted his.

taxable-income in any of the indictment years.°

5. Defendant’s total assets at the beginning and end of

each indictment year were approximately as follows:

(Govt. Exhibit 281).’

1/1/56 (12/31/55) ° $1890889 12/31/56 $37,806.52

1/1/57 37,806.52 12/31/57 38,897.48

1/1/58 38,897.48 . 12/31/58 — ‘44,447.77 -

1/1/59 * 44,447.77 12/31/59 - 45,589.33

1/1/00 3 45,589.33 12/31/60 45,273.58

5 eee A-18

Appendix B—Opinion by Rosling, USDJI.

6. Defendant’s total liabilities. at-the beginning and end

of each indictment year were ‘approximately as follows:

(Govt. Exhibit 281).* Coo ee ON ei

1/1/56: CAH) '$ 1,300.00 . 12/31/56 ~ $12,890.28

1/1/57 .. ® © 12,890.28 - 12/31/57. 9,964.43

1/1/58 9,964.43 12/31/58 © 10,468.66.

1/1/59. - - 10,468.66 12/31/59 7,236.03.

1/1/60 5 .¢. tae 12/31/60, _----6,028.32

ee

13807] * 7. N et worth (unadjusted) at the Sabi and

end of each ‘indictment year is arrived at by. subtracting: the

| year end liabilities shown on Exhibit 281 (Finding of Fact -

6) from the year end assets (Finding ‘of Fact 5), and in-

-” erease in net worth, by subtracting the’ year end net worth,

12/31/55 $17,608.89: + Ae ; VA

12/31/56 - * 24,916.24 $17,608.89 $7,307.35

12/31/57 28,933.05 94,916.24 ~~ 4,016.81

12/31/58 - 33,979.11 ° 28,933.05 . 5,046.06

12/31/59 38,353.30 . 33,979.11 4,374.19

_ 12/31/60 —_——- 39,245.26 38,353.30 891.96

thus determined, from the last preceding year end’s: net

worth. These calculations produce the following results

which the court determines to be approximately correct, all |

as set out in the _ore schedule:

‘ Net Worth

Previous Increase in

Net Worth Year-End ' Net Worth

8. The expenditures made by the defendant during the

"indictment years are those set forth in Exhibits 286 and

286-A,-the latter a continuation of 286. The tabulations

are based on proof adduced at the trial a witnesses, by

4

A-19

penne B—Opinion by Raditue, U.S.D.J.

stipulation in lieu of testimony, by exhibits and by die.

ences drawn by the court. The expenditures listed on the

charts Exhibits 286 and 286-A are found by. the court to

have been established and the total for each of the indict-

ment years is as follows:

4

[3808] | =

1956 : $ 7,339.09 .

ee 1957 9,135.45

a) ae 10,316.66

1959 : 17,432.93

1960 10,289.32

9. Defendant's wif Anne Schifani nee Sclafani, was

at all times a housewife with no source vals income from

wages, salary or. otherwise. a

10. Adjustments to the ‘‘{nérease — Net Worth” for

the indictment years, the latter being shown as the foot-

‘ ings on Exhibit 281, consist of additions to and subtrac- .

tions from such footings. The results reflect the gross

income for the indictment years, all as scheduled in Ex-

hibit 285 and found by the court as a fact. The totals

producing the figures representing such gross income are

set forth in this finding, and the items entering into such

totals are detailed i in the appended fodtnote.'!

Increase in Adjustmentsto

- Net Worth Net Worth Exh: 285) -

before .

adjustment - Gross

(Exh. 281) Additions _ Deductions . Income

1956 =. = $7,307.35 $8,553.09 ‘$ 61.52 $15,798.92 ©

1957 . 4,016.81 9,135.45 96.79 13,055.47 —

1958 . 5,046.06 10,316.66. - 37.08 15,325.64

1959 4,374.19. 17,432.93 _— 1,084.19 20,722.93

1960 891.96 12,080.23 59.20 12,912.99

f .

A-20

Appendia B—Opinion by Rosling, US.DJ.

il. Other. than as hereinbefore noted and found, there

was neither evidence nor inference reasonably + to be drawn

from evidence that defendant. received nontaxable funds

i during the indictment years.? | + — cs

[3809]

-cealment through use of the names of others, failure to keep

records in transactions when record keeping is usual and

absence suspicious, extensive use of Manufacturers Trust

. Co. personal money orders, and large transactions in which

currency was used, all in-a context of a liberal standard of

. living during the indictment years, a standard which could

‘be maintainable only by one possessed of substantial means.

The court draws ‘the inference that these are circumstances

indicative of 4 consciousness of guilt on defendant’s part in

having received taxable i income for which he wilfully failed.

to file the returns required by law and. to pay the income

tax due thereon. -

13. ‘Likely sources of defendant’s income" pa the in-

dictment years are an-interest in a restaurant business'® —

_and services as a go-between in labor relations of employ-.

ers with unions. 16 No finding is made, insufficient evidence

having been adduced by the. prosecution to substantiate its

assertion, to such ‘effect, that defendant by his own admis-

sion was in in reontpe of income from illicit sources.*’

14. ° There is a tax due and owing by the. defendant for

each indictment year in approximately the following

: amounts." « et “ ‘

12.. Defendant’s financial practices were , marked by con-

rai iri tech aS0 te

— — -

SO ae coe te eee, rename AIO

Ap21 -

Appendia B—Opinion by Rosling, U.S.D.J.

1956 = $3,117.49

1957 © 2,121.39

1958 «2,610.58

1959 ' 5,575.85

1960 ae 72,242.09

(3810) Oe ee

15. Willful evasion is established?”

oe

6

Conciusions or Law

: e oe

1. Defendant is guilty as charged on all counts.

Grorcz Rosine

U.S. D.J.

ik | |

ee &

ae ernment Exhibit 282 prepared and explained by Internal Revenue

utes of the trial and identification: symbols designating the exhibits.

Cece ie

- ' Appendis: B—Opinion by Rosling, U.S:D.J;

7“ tie a. ie aah Pe Sy be ' 4

re Footnotes

[3811] * ps oes

1§7201. Attempt to evade or defeat tax ._

“Any person who willfully attempts in any manner to évade

or defeat_any tax imposed by this: title or the payment thereof _

shall, in addition to-other penalties provided by law, be guilty, Mage. at

_of a felony and,; upon conviction thereof, shall.be fined got™ .

-" more than $10,000, or imprisoned not more thah 5 no or

—~both;-together-with the costs of prosecution.” ___ |

2 See Finding’ of Fact 14 for amount of tax due and evaded. The»

Offense is made out upon a showing of failure to file a required re-

turn with the essential felonious knowledge and intent as ‘the.con- ©

text of. such nonfiling. Other elements having: been established by

the government, it does not have to prove the exact amounts of un-

reported income. It suffices for a finding of guilty that significant as

‘contrasted with de minimis amounts are unreported within the appro-

‘priate statutory strictures. United States v. Johnson, 319 U.S. 503, -

517, 63 S.Ct. 1233 (1943). ; Mess

8 Items entering into annual totals are set. forth on ‘chart, Gov-

Service-(I.R.S.) Special Agent (Intelligence Division) Masetti; [Tr.

~ _M* 3000-3025]. The witness supported his summaries and analyses

by reference to the proof adduced at trial consisting of testimony of

witnesses, ‘stipulations of counsel in liéu of proof, various documen- ,.

try exhibits,-inferences drawn by. him from such proof and numer-C

ous schedules nd statistical data compiled by him and comprised. in |

a volume marked as Government’s Exhibit 283. All was carefully .

annotated therein by Mr. Masetti with page references to the min-

Inferences drawn by the witness were not necessarily adopted by the

court. Its own inferences, however, largely coincide with those the .—

witness deduced. ; . |

(3812) &_ | ee

’ Items entering into year end totals are sét forth on chart,

Government Exhibit 284, prepared and explained by Mr. Masetti

‘ |Tr. M3031-3060]. The item of $1,350 cash on hand 1/1/43 is based ie

on statement ascribed to defendant in Government’s Exhibit.9, an. © ©

. “Admission Summary” produced from an official file concerning de-

* Masetti’s testimony is thus referred to<herejn.

| AB:

Appendia B+Opinion by. Rosling, US. DJ.

2

fendant, in the archives be the Bureau of Prisons, United States De-

partment of Justice: Defendant, confined i in ‘a Federal Penal Institu-

‘tion in Milan, Michigan, and Serving a two-year sentence of impris-

‘onment upon a committment effective 1/14/43 was imterviéwed by the

formation thuS derived as well as data from other sources was em-

hodied ist the Admission Summary. The document dated 2/10/43

mo)

ion defendant himself supplied. It reads:

“10. ‘Resources: This” man claims that he~ tie ho prop-

“with the John, Hancock Life Insurnce Co. and that he left his

wife approximately $1,350 in cash.’ He later stated that they

owned their own furniture.”

- Defendant, at ‘the opening of’ the trial before. any testimony had |

been taken, moved ‘to suppress the Admission Summary and “also

any leads derived therefrom or any information otherwise obtained

_.through said alleged declarations 01 leads.” His counsel grounded

such motion upon. the alleged confidentiality of defendant’s disclos-

ure and the illegality of the government's: proposed use of it. These

contentions need not here be restated inasmuch as they were formu- .

. dated -in voluminous motion papers and a supporting memorandum.

ey were, moreover,’ thoroughly. explored in a lengthy ‘argument

and discussion at the opening of the trial. [See Tr. on ‘notion to sup-

press, pp. 6-66].*At page 66, ibid. the court denied the motion, as

well as derivative companion motions to igspect the grand jury min- .

e defendant’s assumption .

that the evidence thus challenged as illegal had been submited to the.

_ grand jury which reported the ees tas aod and in consequence. viti- © ~

- utes and to quash the. indictment upon

ated the proceeding. —

.

As an incident of the denial of the notions the court reserved to

- the defendant the right when the evidence came to be offered at trial

to renew his objection, with the possibility left open of a hearing

should one be required. and applied for. ,

The government in due course marked the Admission Summary

_ as’an- exhibit for identification at the trial proper [Exhibit 9, Tr..98]

- and upon its offer shortly thereafter-was [3813] met by renewed. ob-

jection of the defendant: This precipitated further colloquy and ar-

gument. The document was finally, with certain omissions,’ admitted

_ into evidence at Tr. 132. It thus appears that the subject of its ad-

’

ma a <

\ . : t's -

we

»

%,

prison authorities“shortly after-his admission as a prisoner. The in-

ins the following note which the court finds constitutes informa-

_ erty, buf later admitted that he had a $2,000 insurance policy

ee

Appendia B—Opinion by Rosling, U.S.D.d.

missibility has been. thoroughly ‘discussed and considered. Defense

counsel now’ continues in his post-trial are vce to. aves his .

claims of error.

&

Central to the ruling as to whether the exhibit should be received

is the principle noted several years since in St. Regis Paper Company

_ .v. United States, 368 U.S. 208, 218, 82S. Ct. 289, 295 (1961), that .

it is the ‘court’s “duty to avoid a construction that would suppress

otherwise competent. evidence unless the statute, strictly construed,

requires such a result.” With a like approach Wigmore on Evidence,

‘ Vol. I, § 10, p. 293, enunciates as “[t]he second axiom on which our

law of Evidence rests” that “[aJll facts having rational probative

value are admissible, unless some specific rule forbids.”

Both Wigmore (ibid. ) and Fisch (New York Law of Evidence,

§ 3, p. 3) cite Professor Thayer’s Prelimigary Tréatise onthe Law

of Evidence (1898) as authority for the version of the precept which

~ teaches that!“‘unless excluded by some rule or principle of law, all

- that is logically probative is admissible. ” .See also Richardson on

Evidence, Ninth Edition, § 5, p. 4.

Closely analogous to what is here presented is the factual sieuntiont”

considered in Smith y. United States, 236 F. 2d 260 (8th Cir. 1956),

cert. denfed 352 U.S..909, 77 S. Ct. 148, wherein it was held that it

was not effor in a prosecution for income tax evasion for the gov-

ernment to introduce at trial statements by the defendant declaring

his assets, even though it appeared that these had beeri made while

he was confined in a penitentiary under an earlier conviction. The

exhibits had been filed by defendant in connection with a parole appli-

cation, but did not themselves constitute part‘ of the parole hearing

itself. There was then no statutory bar to such use, nor is there any .

today. The regulations in force at the time governing use of prison

records were formulated by the Attorney General (Section 2.14, 28 .

' ° C.F.R.) and have since been amended, but with substance as it con-

cerns us here unchanged. ‘(See also Sections 2.15 and* 2.16 of the

Regulations, 28. C.F.R.) Section 2.14 was cited in Smith by defen-.

| _dant against the government as barring the use of the records as al-

legedly confidential and not open to the prosecutiof for support upon -

a charge of crime unrelated to or arising out of the making of the’

statements... .

_ (3814)

a.

The Ninth Circuit found defendant Smith’s position untenable

and adjudged that no wane te from such .use to establish .

OE a th ots —

.

A waa Renn eee ene ow deel ng

Po, *

<i

A-25

Appendiz B—Opinion by Rosling, U.S.D.J.

an admission by defendant Smith that he had had no assets while

in the penitentiary. Currently § 2.16 of C.F.R. 28; revised as of 1/1/65,

provides that hearings on parole “shall not be open to the public, and

the records of all such hearings shall be treated as being confidential

and shall not be open to inspection by the prisoner concerned or any

other unauthorized person.” Analysis of the provision and its reach

need not further detain us inasmuch as the exhibit invelved is not a

- record of a parole hearing. ¢

A general “housekeeping” provision 28 C.F.R. § 16.1, promulgated

by the Attorney General under authority-of Reorganization Plan No...

2 of 1950, Sec. 2, 5 U.S.C, 22, is of more immediate pertinancy. § 16.1

is contained in Order No/ 324-64, 29 F.R. 14027, 10/10/64, and reads,

relevantly, as follows: _

“Production or disclosure 6f official information or material

in response to a subpoena, order, or other demand prohibited

unless approved by the Attorney General. - ‘

“No officer or emplayee of the Department of Justice shall

produce or disclose, in response to a subpoena, order or other

demand * * * of a court or other authority any information or

material contained in the files of the Department of Justice or

any other- information: or material acquired as a part of the

. performance of his’ official duties or because of his official

"Status, without the prior approval of the Attorney General

soe” ‘

The point need not be labored that the provision is a defensive

measure of the department calculated, hopefully, to keep its files free

of intrusion from third parties save upon the Attorney General’s

consent. The U. S. Attorney and members of his staff are among those

who by definition set out in § 16.1 are categorized as officers and

employees-of the Department of Justice. Exhibit 9 itself contains a _

certificate of the- Attorney General which authenticates the status of

the Director of the Bureau of Prisons which supplied the document

from its files. The director with his own further certificate produced

- from the Bureau’s file, of which he is the custodian, the exhibit in

controversy. The Bureau of Prisons, its Director and employees are,

of course, under the direct jurisdiction of the Attorney General. (Ch.

303, Title 18) Such certification and authentication of the exhibit thus

[3815] establish the requisite “prior approval” of use, if explicit ap-

proval were required, by the U. S. Attorney. Cf. Arrow Distilleries v.

Alexander, 109 F.2d 397, 405, syllabus division 20 (7th Cir. 1940),

cert. denied, 310 U.S. 646.

A-26

Appendic B—Opinion by Rosling, U.S.DJ.

" United States v. Caserta, 199 F.2d 905 (3d Cir. 1952), cited by

defendant is distinguishable. That case involved the use by the govern-

ment in an unrelated prosecution of information which had been

supplied by the selectee on a selective service. questionnaire. The

document contained a representation to the effect that the information

‘was confidential except for certain specified uses by the government.

These did not include the prosecution in question. The appellate court

"felt that the pledge thus made by the government to registrants should

be kept in good faith. The draftee surely would be morally entitled to

—

have the sovereign held to its covenant.’ The: convict, on the other

‘hand, subject to penal restraint thereby yields certain of the subsidiary

rights of fréedom in the interest of his reform and restoration to

society. “Lawful incarceration brings about the necessary withdrawal

or limitation of many’ privileges and rights; a retraction justified by

the considerations underlying our penal system.” Price v. Johnston,

334 U.S. 266, 285, 68 S.Ct. 1049, 1060 (1948).

There is no substance ‘to the contention urged here by defense

counsel that a disclosure made in 1943 that the prisoner then possessed

‘only $1,350 should now, 20 years later, be suppressed as a circumstance

tending to support a charge that defendant had committed crimes in

1957 and later years, long after the original disclosure. The 1943

financial representation may have been an involuntary incident in what

was surely a duressing restraint upon defendant. The information

thus furnished by defendant could not have been withheld by the

prisoner as in any sense self-incriminating in 1943.- Nor does its.

* current use against defendant breach any governmental pledge earlier

given to keep a confidence inviolate.’

A further accession of funds with which the government has

credited defendant in the preindictment years, as serving to build up |

a potential “hoard” upon ‘which defendant might have drawn during —

re indictment quinquennium, and which to that extent negatives

current income as the source of the disbursement in the indictment

period, is shown on the chart of available fynds [Exhibit 284 ffn (c)

. and (e)]. The chart notes with transcript reference [pp. 876-884, and

wife. of defendant,

‘Angelina Battaglia in 1943, and the further sum of $250 in 1944. These

1171] an estimate O& $500 as having been given to Anne Schipani,

by his. brother Ralph Schipani and his sister

_ and others of defendant’s siblings who testied variously as to having

made such gifts or not to have done so [3816] indicated quite clearly

that their donations were trifling and only occasional, and were in-

tended to help the wife during the difficult year and a half of her

Ca

A-27

- Appendia B—Opinion by Rosling, U.S.D.J.

husband’s sojourn in Milan Penitentiary. It was Agent Masetti, and

not these witnesses, who supplied the estimated totals with which

defendant was thus credited. The court has accepted such estimates

as not exceeding that which was reasonable. The court’s own view

based on the evidence Masetti took into account is that the credit was

unduly generous. But as. figure favorable to defendant: the court

accepts it. It may be noted that the government with similar benefit

to defendant’s position did not charge him in its correlative Expendi-

ture Schedule [Exh. 282] with disbursement of any’ money for food, |

as well as other items of ordinary living expense.

The second column.on Exhibit 284 gives the defendant credit for

the receipt of maximum gross. income.for the years 1943, 1944, 1945,

1946 and 1947 of $499.99 in each year, and of $599.99 in each of the

succeeding years through 1955. This was based upon the fact that the

relevant Internal. Revenue Code provisions (Section 6012, I.R.C.

1954; Section 51 LR.C. 1939) required under criminal penalties,

elsewhere imposed for violation, that income tax returns be filed when

the taxpayer’s gross income was at least one cent higher than the

amount credited in the chart, namely $500 for the earlier years and

$600 for the later. The fact that defendant did not file any income

tax returns for the years noted is equated by legal presumption with

an admission on his part that he had received gross income in the tax

year affected of. less than the statutory minimum which would have

required him to file a return [See Leeby v. United States, 192 F.2d

331, 333-334 (8th Cir. 1951) ; United States v. Skidmore, 123 F.2d

604, 610 (7th Cir. 1941), cert. denied 315 U.S. 800; United States

v. Doyle, 234 Fx2d 788, 794 (7th Cir. 1956), cert. denied 352 U.S.

893, 77 S.Ct. 132; Hanson v. United States, 186 F.2d 61 (8th Cir.

1950) ; United States v. Glazer, 110 F. Supp. 558, 561 (D.C. Mo.

- 1952)]. To give full effect to a defendant’s presumption of innocence

the court is required, notwithstanding that no income were shown to ”

have: been earned during any pre-indictment yea®, to assume in the

defendant’s favor the maximum gross income per year which the'stat-

ute stipulates is not reportable. The presumption of innocence operates

on the act considered in its contemporaneous context, and not in rela-

tion to its effect in an evaluation of the later events first generated in

the indictment years.

The chart, Exhibit 284, has, however, been modified with respect

to the years 1945 and 1946 as to income established-by proof to have .

in fact been received which requires credit to defendant of the sum

received. Such substitution of actual [3816] income in place of the

e

A-28

Appendix B—Opinion by Rosling, U.S.D.J.

presumed maximum gross income involves the year 1945. Govern-

ment Exhibit 135, certificate of the Social Securit Administration,

confirms the fact that defendant had earned in that year through his

employment with the National Ship Scaling and Painting Corp. the

sum of $632.19. When such sum is substituted for the presumed

gross maximum income which is not reportable for the year in which

earned ‘the procedure requires adjustments for the years 1945 and

1946. The effect of these is to increase the cash on hand at 1945 year

end to. $442.76 which jis carried over to cash on hand on 1/1/46.

Inasmuch as, notwithstanding such increased credit, the expenditures

exceed the starting cash plus receipts for the year 1946, the cash on

‘hand at the end of 1946 continues to be reported as “-0-.” A further

adjustment is required to accommodate such amendment by an increase

of the figure shown on the chart as the total of maximum ‘gross income

for all years listed. The increase is from $7,299.87 to $7,432.07.

The recapitulation forming an appended part of Exhibit 284 ag- |

gregates the figures showing the funds available as entered thereon for

the period from 1/1/43 to 12/31/55, producing a total of $9,694.87.

The increase of maximum gross income to $7,432.07 increases the

total to $9,827.07. . ae

‘The expenditures for the corresponding years, taken from the

footings of.chart Government Exhibit 282 and entered in Exhibit 284

in the fifth column under the heading “Less Expenditures” are shown

_. to amount in total to $47,932.27, a figure far exceeding the “funds

~ available” so far as the government has been able to ascertain them

by its investigation.

Defense ‘counsel points with some indignation to the inescapable

fact that upon this demonstration, and with no capital conversions

shown which might come even close to bridging the gap between cash

inflow and outgo of available cash, there is a patent incompleteness

in the calculations. If the apparent excess of expenditures over re-

ceipts was covered by other sufficient items of receipt, both principal

and income, why stop there? defense counsel asks argumentatively.

Does not the presumption of innocense require that the government's

expert take into account in the calculations he makes a sum sufficient

‘not only to liquidate the deficit, but also to produce a surplus, a hoard

large enough at the end of the preindictment period to account for

the excess of expenditures over non-taxable receipts in the indictment .

_years? [3818] A number of factors, however, are seen quickly to

dissipate the seeming force of this contention. In the first place, the

_ principle of Rossi v. United States, 289 U.S. 89, "53 S. Ct. 532

A-29

Appendix B—Opinion by Rosling, U.S.D.J.

(1933) and Holland v. United States, 348 U.S. 121, 75 S.Ct. 127

(1954), in the context of the factual situation about to be noted

gives the government its prima facie.case when it has sufficiently

proved, as it has here, such receipts and dishursements as its good ——

~ faith investigation has distilled ftom ‘the infinite and uncharted sea |

of the financial affairs of all mankind. If the defendant is dissatisfied

with the product thus prima facie. established, he need but furnish

the prosecution with the leads thoge' cases speak of.

Furthermore, the deficit im receipt is a mathematical and eco-

nomic fact, if one accepts the probative validity of what the govern-

ment adduces. as preindictment income and resources it has uncov--

eréd and no more. Logic does not however, require that an excess

over what is needed to liquidate the obligations discovered to have

been paid be postulated.

Finally, as appears in finding of fact 4 and footnote 6 the cir-

_ cumstantial evidence touching defendant’s economic situation during

the “hoarding” years is such as to render it unlikely that defendant

wis sie to do sqee than taleace expeniituse with seccigt anil quecte

_ on hand, and even that with difficulty.

. ®& The government’s investigation was thorough and’ sweeping

for the period dating back to 1943, and spotty for earlier years.

Search was made of the files for the years 1932 through 1960 in the

Surrogates Courts of Kings and New York Counties for evidence

of legacies from .relatives of the defendant to him and immediate

family. The indices of the Register’s and County Clerk’s offices of

the Counties of New York, Kings and’ Nassau were run for pur-

chases, sales and morfgage transactions affecting real property in

those districts during the years 1940-1960 and in which the defendant

or his wife might have been grantor, grantee, mortgagor’or mort-

gagee.

Additionally, sini one hundred © ‘banks, both headquarters and

branches, in the New York area were: investigated to ascertain

whether checking or savings accounts or safe deposit boxes +had

been opened or closed by. defendant or his wife, and whether there

was evidence of loans obtained by them from these banks. The banks

selected for investigation were those located in the vicinity of de-

fendant’s residence in Brooklyn. and Nassau or ini areas frequented

by him. Banks from [3819] which defendant had purchased money

orders or which were used by persons whose activities impinged on

ha

SF ny oe oped?

—A-30 ne A

~

Appendix B—Opinion by Rosling, U.S.D.J.

those of defendant were likewise checked. The inquiry was directed

as well to several finahce companies in the New York area, the

major credit bureaus and agencies for possible loans involving de-

fendant and his spouse. Numerous friends and relatives were inter-

“rogated .as to pertinent financial transactions, including possible gifts

or loans made at any time to the spouses. -

“The Estate and Gift Tax offices of the federal government were .

also checked for returns of gifts filed by relatives as donors.

Records of the Treasury Department listing the purchase and —

redemption of United ‘States Savings Bonds were resorted to’ for

pertinent information. Contact was also made with various ifisur-

ance companies, brokerage firms, retail stores and other commercial

establishments: to ascertain what goods were purchased ‘by, and serv-

-ices rendered to or for, defendant and his family during ‘the years

(1943 through. 1960. . es

Leads which were come upon in the course of the investigation

were pursued and checked out. -

All this activity was concentrated upon obtaining of data from

which there might be compiled defendant’s net worth at the begin- .

ning and end of each indictment year, and with a view to determining

the extent, if any, to which an increase therein was attributable to

taxable income.

The .government’s task in carrying forward its investigation to

the goals envisaged was immeasurably complicated and rendered .

more difficult of fruition by the -uncooperative conduct of defend-

ant and his wife in their refusal to furnish leads.. No adverse infer-

ence, of.course, may be drawn from their refusal to surrender their

constitutional privilege to remain silent-and to have the assistance of °

counsel at a time when it was clear: that the defendant, and. pos-

sibly the spouse, were the target of an ongoing investigation the

culmination of which would, if culpability was sufficiently indicated,

be a. criminal prosecution. Cf. Escobedo v. State of Illinois, 378

. US. 478, 490,.491, 84 S. Ct. 1758, 1764, 1765 (1964) and consider

what the principle therein enunciated promises ‘by way of extra-

polation. — att Le Toes

The prosecution, however, is. authorized in meeting its obliga-

tion to establish a prima facie case on trial of an. indictment when

found, to mortar an otherwise less than perfect structure of proof

by citing in extenuation of [3820] charged incompleteness the

Ast

_Appendia B—Opinion by Rosling, U.S.D.J. |

defendant’s failure to indicate where additional masonry helpful to

him in instructuring the financial edifice might be come upon.

“[I]t is not incumbent” the Supreme Court declared in Rossi v.

United States, U.S. at p. 91, S. Ct. at p. 533 (supra fn. 4) “on

the. prosecution to adduce positive evidence to support a negative

averment the truth of which is fairly indicated by established circum-

stances and which, ‘if untrue, could be readily disproved by the pro-

duction of documents or other evidence probably within defendant’s

possession or control,”, citing texts and cases. So-also in Holland _...... ..

v. United States, U.S. at p. 138, S. Ct. at p. 137 (supra fn. 4) an™

income tax €vasion prosecution, the court pointing to Rossi for prece-

dent, held that “where relevant leads are not forthcoming, the Gov-

ernment is not required to negate every possible source of non-

taxable income, a matter peculiarly within the knowledge of the 4

defendant.” | ,

° Defendant’s general and pervasive lack of cash approaching at

times impecuniosity and utter poverty is*supported by inferences to

' be drawn from circumstantial evidence. The court rejects the alterna-

tive inference, as presenting only a possible but highly unlikely

eventuality in the context of all the evidence in the case. This in-

cludes lack of, leads by defendant to evidence supporting such alterna-

tive inference, namely, that defendant.’had funds, but perversely

and unreasonably conducted himself as though he were impover-

ished. By his own. admission. upon official interview at Milan Peni-

tentiary in 1943 he had but $1,350 in cash in 1943 which he left —

with his wife. Yet she, it appears, was receiving small handouts

.during the term of his imprisonment from other members of his

family scarcely themselves persons of means. Such. receipts as

the prosecution could demonstrate during the preindictment period

fell far short of meeting his living and other day-to-day expenses

even though estimates for all his food bills and much of what must

have been spent for clothing for himsel, his’ wifé and children were

omited from the statistical comparison. Their inclusion would have

made the deficit to be accounted for by nontaxable assets and receipts

that much greater. i.

During the preindictment ‘period the purchase of a home with a

_ substantial cash down payment, the ownership of one and possibly

two cars, the employment of a maid, and other items of disburse-

ment betokened a standard of living considerably above a mere sub-

<7

. . A382

Appendia B—Opinion by Rosling, U. s. DJ.

sistence level. The: court will not, however, presume, with no proof

to. sustain the presumption and When it is not shown that the prose-

cution has ignored leads which might have produced the proof, that

the defendant [3821] disbursed less than his complete income in those

years in maintaining his indicated standard of living, thereby postu-

lating a preindictment year Wagar cash as having been built up

by defendant. Thus where ‘records exist, e.g. those of the Social

Security, the files report only $293.10: in 1944 and $632.19.in 1945

- as. earnirigs received by defendant. These are attributed to empléy-

ment with the National Ship Scaling Company. [Exhibit 135].

The defendant, moreover, filed no income tax returns during these

years [Tr.:61-6@], a fact established by the files in. the statutory fil-

ing districts, to wit, the taxpayer’s residence,.or place of business.

[26 U.S.C. (1954), 609; 26 U.S.C. (1939) §'53(b) (1) ] The effect

of such nonfiling brings into play, as earlier noted, the presumption

that defendant. had less than 500 or 600 dollars gross income in the

referent years.

That defendant’s wife did not work during the preindictment

period is borne out directly by testimony of defendant’s sons Joseph

and Frank and of Pauline Trento, a friend of the wife, and circum-

' stantially, by the inference to’ be drawn from the wife’s failure to file

returns. [Tr. 901-904; 957-962; 1788-1795].

The court does not consider as having any probative value against -

the defendant any representations in which he did not participate

made by the wife or others than himself in statements certifying either.

‘his or her employment during these years or later, nor a fortiori in-

formation gathered by credit agencies and reported back to the con-

cerns which engaged their servicés. Documentary evidence was re-

ceived at trial under 28 U.S.C. 1732(a). The civil rule, it is well

known, has equal application to criminal prosecitions. [United States.

v. Brewster, 231 F. 2d 213, 215 (2d Cir. 1956), cert. denied 77 S. Ct.

1282; United States v. Kimmel, 274 F. 24.54, 57. (2d Cir. 1960) ;

United States: v. Re, 336 F. 2d 306 (2d Cir. 1964), cert. denied 379

U.S. 904]. Records made in the r course of business serve to

‘ establish that the transaction recorded has in fact taken place.

Statements in such record, however, not shown to emanate from the

defendant himself, are here given no weight against him as res inter

alois_ acta, and do not bind him, absent a showing of authorization.

7 Finally, with the absence of leads serving to handicap inquiry, it

appears that the government’s investigation of the wife’s ‘affairs. has

BO Nee tine 0 SO

yY

_ \ A838 aioe

Appendi. B—Opinion by Rosling, U.S.D.J.

failed to turn up evidence that [3822] she had received any income

' during this period. The court in this connection rejects as false the —

" Statement in a loan application [Government Exhibit 131] which she”

“submitted to the Manufacturers Trust Co. in 1956 that she was em-

ployed by Rosetta Coat Co, as a designer and had been so employed ©

for ten years prior. It may be noted that her signed application coy-

tains the egregious falsehood that she was single. Attorney for de-

fendant ‘stipulated at trial she was defendant’s wife. [Exhibit 131,

170; Tr. 1229; 1728-1729;.1737]. —

Additional circumstances evidencing defendant’s straitened situ-

ation in the preindictment years and the utilikelihood of his having

accumulated by the openirig ofthe indictment term a hoard into which

he might thereafter dip as into a Fortunatus purse are his picayune

—_—

horrowings, his persistent delinquency in paymerit of life insurance--~

premiums in trifling. amounts, his failure to Close an advantageous

real estate purchase in 1949 or 1950 which he deferred for two years

because of his professed Jack of the $250 that the seller demanded as .

consideration, the purchase in 1955 of a Ford automobile on time —

-with subsequent delinquency in payment of installments to the finance

‘company, the suffering of a 4 judgment in 1955 in the sum of

$64.05 recovered by a Health Club upon its claim, at-no time. dis-

‘puted, for $46 “dues”, and the ultimate payment of $55 in settle- |

ment of the judgment ; and the raising early in 1956 of a $10,000 mort-

gage.on his one-family house at.94 Brookline Avenue, Long Beach,

with substantial charges incidental to ‘such loan deducted from the | -

amount advanced. The immediate cashing of the check received on

the loan is suggestive of urgent necessity to use the proceeds. Here

too we find the defendant failing -to meet. periodic payments due on

the mortgage with dangerous consequences a possibility not lightly

to be ignored by ane able to meet them. In respect of several of the

mortgage payments which he was in fact required in 1957 by the

lender to pay—and did—$23.49 in late charges, [Exhibits 101-109.

' Tr. 207-209; 730-744; 765-769; 937-943 ; 950 ;.955] were incurred.

price financed. [Exhibits 130-134.. Tr. 970-973; 989]

Jalousies for the Long Beach house were in 1958 financed through

In 1956 he is again buying a Ford car with the major part of the

‘a bank and in the same year a boat was purchased by. defendant with ©

additional financing by the same lending institution. |

Strongly leading to the conclusion arrived at by the.court. that

many of these delinqueneies and borrowings were [3823] coerced by

_

priated by him in transactions the only apparent purpose of which was

to cover his trail. If he had had the cash with which to complete his .

; purchases he surely would not have resorted to the clumsy expedi-

ents that’ now: only worsen his situation as pointing to a conscious-

ness of guilt. rei

+The Holland case, supra, is herg refévant as illustrating a factual

environment in a measure analogizing the ‘situation here presented.

In Holland the taxpayer’s claim of the government's failure to in-

clude “in its opening net worth figure an accumulation of $113,000 in

“currency and ‘hundreds and possibly thousands of shares of stock’

which they [allegedly] owned at the beginning of the prosecution

_ period” is dissolved by the acid of evidence of defendants’ revealing:

conduct..’We continue with the court’s analysis for. the methodology—

“ alternative, not exclusive—it suggests.. : : .

“They [taxpayer petitioners] asserted that the cash had been

accumulated prior to the opening date, $104,000 of it before —

1933,:and the balance between 1933 and 1945. They had kept

the money, they claimed, mostly in $100 bills and at various

times in a canvas bag, a suitcase, and a metal box. They had

_ never dipped into it until. 1946, when it became the source

of the apparent increase in wealth which the Government later

found in the form of-a home, a ranch, a hotel and other prop-

erties. This was the main issue presented to the jury. The

Government did not introduce apy direct evidence to dispute

this claim. Rather it relied-on the inference that.anyone who

had had $104,000 in cash would not have undergone the hard-

ship and ‘privation endured by the Hollands all during the

late 20’s and throughout the 30’s. During this period they ©

‘lost their cafe business; accumulated $35,000 in debts which

_ were never paid; lost their’ household ‘cirnitia penatiee of

an unpaid balance of $92.20; suffered a [3824] default judg-

ee

ee

A-35,

Appendix B—Opinion by Rosling, U.S.D.d.

ment for $506.66 ; and were forced to separate for some eight

: years: because it was to their ‘economical advantage.’ Dur-

ing the latter part of this period, Mrs. Holland was obliged \

_ to support herself and their son by working at a motion pic-

- ture house.in Denver while her husband was in Wyoming.

The evidence further indicated that improvements tp the hotel,

and other: assets acquired during the prosecution fears, were

bought in installments and with bills of‘ small denominations,

as if out of earnings rather than from an accumulation of

- $100 bills.. The Government also negatived the possibility

of petitioners’ accumulating such a sum by checking Mr. Hol-

land’s income tax returns. as far back as 1913, showing that , j

the income declared in previous years -was insufficient to en-

able defendants to save any appreciable. amount. of money.

_ The jury resolved this question of the existence of a cache of |

f

cash against the Hollands, and we believe the verdict was .%*

fully supported.”

ae

In Holland leads had been furnished ! oun was ;

¢ ie”

f : wt 4

in duty bound, albeit within reason, to Poms tars no > leads were...

~ provided, Thereby the other: prong of the Holland rule was bared

‘to disadvantage the defendant, for the Court. had written further —

_ that, “[o]ncge the Government has established: its case, the defendant —

" remains quiet at his peril. Cf. Yee Hem v: United States, 268 U.S.

178, 185,.45 S. Ct. 470, 472, 69 L. Ed. 904. The practical disadvan-.

tages to the taxpayer are lessened by the pressures on the government

to check and negate. relevant leads. gaan

Other similarly illustrative situations which need 1 not here. be re-—

stated. are presented in the cases, companion to Holland, of Fried-

_ berg v. United States, 348 U.S. 142, 75 S. Ct. 138 and Smith v. United

_ States, 348 U.S. 147, 157, 75 S. Ct. 194, 199. See also United. States

v. Ford, 237 F. 2d 57, 62 (1956) case remanded to the District Court

‘ upon the suggestion of mootness with directions to vacate judgment

of conviction and to. dismiss the indictment on that ground; Gariepy -

_ v. United States, 189 F, 2d 459 (6th Cir. 1951) ; Remmer v. United.

Stafes, 205 F. 2d 277, 286 (9th, - 1993); revérsed on other —

—just’ tampering.

“An estimate of the taxpayer’s net worth as the means. of deter-

mining his income is resorted to in the absence of accurate records

which it is his duty under the’ statute to [3825] make and to preserve,

and by its ba 2 nature is an approximation; * * *.” Bell” v. United

* - 9

‘ A -36

Appendiz B—Offnion by Rosling, U.S.D.J.

States, 185 F. 2d. 302, 308 (4th Cir. 1950), cert. denied 340 U.S.

' 930, 71 S. Ct. 492. See also Remmer v. United States, supra p. 287 ;

Schuermann v. United States, 174 F. 2d 397 (8th Cir. 1949), cert.

denied 338 US. an : ae

ww

The Exhibit 281 assets were the only ones found by the govern-

- ment upon intensive investigation and in the absence of leads fur-

nished by defendant or his wife.

Cash: None. This has been earlier covered. |

Bank Accounts are: Flatbush Savings Bank, accounts No. 202571, |

202787 and. 254040 [Exhibits 71-74. Tr. 585-609] and Masetti

evaluation’ with his worksheets ‘and. analysis, [Exhibit-283 for sup-

. port; M3079-3083] and Dime Savings Bank, a nominal account, No. |

1519081, maintaifred by defendant in the name of a friend Nancy

Segreto so that he could qualify for a safe deposit box at the bank

in the pretended depositor’s name. The bank rented vaults only to

. depositors. [Tr. 1054-1057; Exhibits 145 and .146. Tr. 1062-1063,

: 106721074, 1076-1086, “1090-1102, M3083-3084]: ;

_ Investments are; Gurney’s Inn Corp. [Stipulation on trial, Tr.

1033-1044 ; Exhibit'141, M3084-3086] and. U. S. Savings Bonds [Tr.,

608-626; Exhibit 75-79, M3086-3089}.

Real Estate and Improvements are: 94 Brookline Avenue, Long

Beach, two parcels purchased by defendant -from “Lenitz, one for

$15,000 and the other for $540, and a strategic strip of land acquired

from Clamons itt 1952 for $250. [Tr. 179-188; 202-215; Exhibit 15,

16 and 20, M3089-3091] and Jalousies [Stipulation, Tr. 2144-2149;

Exhibit 221; M3091-3092]. io .

Furnittire: From Levine [ Stipulation, Tr. 927-929; Exhibit 117

and }8; M3092-3094] and Selwyn-Pomeroy [Stipulation, Tr. 678-

696, 704-705 ; Exhibit 85-87 ; M3095-3097].

Automobiles and Boat: 1955 Ford [Tr.: 628-642; Exhibit 80;

M3097-3100] purchased by defendant in wife’s maiden name and

disposed of in 1956. Hence, $2,704, its cost is eliminated from

12/31/56 net worth and $1,214 ($2,704 less [3826] $1,490 its market

value, taken as evidence of the sum realized on disposition) is entered -—~ 4

on Exhibit.285 (“Adjustments to Net ‘Worth”, q.v.) as increase in”

net worth for the following year. The adjustment correctly reflects

the exchange effect of the transaction [M3170-3176]. ri

A-37 |

Appendix B—Opinion by Rosling, U.S.D.J.

1957 Ford purcliased by defendant from Wolff Motors in 1956,

defendant again using his wife’s maidén name. [Stipulation, Tr. 970-

973, 989 ; Exhibit 130; M3100-3101] Purchase was financed through .

Manufacturers Trust Co. [Tr. 994-1007; Exhibit 131-134; Testi-

_mony of Louis Esposito, Tr. 2268, et seq. passim.] In 1960 this

automobile was res6ld to Lynn Motors for $700 [Stipulation, Tr.

_ 2619] and accordingly was not thereafter included in the 1960 year-

end net worth statement [Exhibif 281]. The effect of such purchase

and resale was properly accounted for in the computation of defen-

dant’s 1960 gross income by adding $1,790.91 to defendant’s 1960

increase in net worth [Exhibit 285], and simultaneously eliminating

_ $2,490.01, the cost of acquisition, from defendant's net worth at

12/31/60 [Exhibit 281; M3176-3179}.

Boat purchased in 1958 by defendant with his own funds and for

own use in the name of his friend Esposito. Price paid. was $2,100

plus a trfde in of another boat. "[Tr. 2024-2030, 2035-2090, 2268-

2289 ; Exhibit 214-217] The purthase was financed through Franklin

National Bank with defendant using Esposito as the nominal bor-

rower. [Tr. 2052-2060, 2071-2074, 2175-2194; Exhibit, 214-217

230.} Subsequently the loan installments were paid by defendant with .

* bank money orders which defendant himself signed, affixing, “how- .

“ever, Esposito’s name as the ostensible signatory. [Stipulation 2632;

Exhibit 231-x-23] ! ,

* Exhibit 281 lists as liabilities of defendant during the 1956-1960

period the amount of principal owed by defendant on his loan obliga-

tions at the end of each indictment year. Interest payments made by

defendant on the principal indebtedness scheduled in Exhibit 281 as

liabilities as well as finance charges incurred in connection with the

consummation of these obligations are set ouit in the list of deten-

dant’s expenditures on Exhibit 286 and 28-A, later considered and

discussed. The-iabilities follow : ee are )

Lenite mortgage arising out of the purchase of the Brookline prop-

erty. [Tr. 179-199; Exhibit 17; M3102-3104] ;

[3827] ‘ ! .

Colonial Realty’Co., $10,000 mortgage raised by defendant on such

ota [Tr. 730, 744, 765-766 ; Exhibit 101-106, 109-x-23 ; M3104-

3107] |

_ Franklin National Bank—Loan to finance defendant’s purchase of -

jalousies. [Tr. 2159-2175 ; Exhibit 221, 227-229: M3107-3111}

A38

Appendix B—Opinion by Rosling, U.S.D.J.

Associates Discount Corp.—Loan to finance purchase of 1955 Ford.

_ [Tr. 628-642 ; Exhibits 80 and 81 ; M3112-3115] 3

Manufacturers Trust Co.—Loan to finance purchase of the 1957

Ford. [Tr. 994-1007 ; Exhibit 130-134 ; M3115-3118]

_ Franklin: National Bank—Loan to finance boat purchased by de-

fendant in the cover name of Esposito. [Tr. 2175-2194, 2632 ; Exhibit

214-217, 230-231; M3118-3121] ©

_ Marion Levine—Furniture purchased from Levine on deferred

payments. [Stipulation, Tr. 927-929; Exhibit 117 and 118; M3121-

3122] 7

Selwyn-Pomeroy—Furniture purchased’ from the seller, likewise

on deferred payments. [Stipulation, Tr. 678-696, 704-705 ; Exhibit

85-87 ; M 3122-3124] Pesan

~ © The items entered upon the combined Exhibit 286/286-A are too

numerous for detailed or for even limited analysis. They are accord-

ingly listed herein with pertinent transcript references only. Despite

their volume they draw a picture that is no doubt incomplete. That

doés not, without more, detract from the efficiency of the prosecution’s

" proof in establishing the requisite prima facie showing. The good faith .

_ of the prosecution, its skill and its industry, in investigation, alf have

been ‘demonstrated to the cqurt’s satisfaction beyond a reasonable doubt.

In the absence of leads supplied by defendant, no inference thay be

drawn by the court that further prospecting in areas which the defense

does not even now designate would be fruitful in defendant’s interest.

The expenditures which the court finds fully established are:

Rent—Nineteen Building Co. [Tr. 132-860} Exhibit 10-14;

- M3136-3137]

Insurance. premiums—Metropolitan Life Insurance Co. [Tr. 234-

. 261; Exhibit 24-27 ; M3139-3140] ’

[3828] a

‘Gardening—Louis Biamonte & Sons. [Stipulation, Tr. 337-339;

Exhibits 47 and 48] ~ “

Property taxes—94 Brookline Avenue—See discussion supra.

Brooklyn Union Gas Co.—[Stipulation, Tr. 387-391; Exhibit 51

and 52] tie a

a a a

A-39_ py oF

Agpentio B—Opinion by Rosling, U. s. DJ.

Roosevelt Cirainint te 547-554, 566-567 ; Exhibits 61 and 62]

New York Telephone Co —[Stipulation, Tr. 57 1-583 ; Exhibits

66-70]

Insurance Premiums—John Hancock Life Insurance Co. [Exhibit-

34, Tr. 320-330; 412; Exhibit 35, Tr. 393-397, 403, 405, 410-411;

Exhibit 36, Tr. 426-428 ; Exhibit 37, Tr. 405-410; Exhibit 38, Tr

- -412-415; Exhibit 39, Tr. 415-418; Exhibit 40, Tr. 419-420, 425, 426;

~ Exhibit 41, Tr. 428-431 ; Exhibit 42 and 54, Tr. 432-433, 446-447, 461-

466; Exhibit 43 and 57, Tr. 504-505, 508-517; Exhibit 44 and 56,

Tr. 475-476, 485-488; Exhibit 45 and 55, Tr. 466-474 ; Exhibit 46,

Tr. 490-491, 495- 504 ; Exhibit 58-x-23—Stipulation, Tr. 520] .

Gonsolidated Edison Co re, Tr. 712-715, Exhibit 92

and 93] :

‘M ortgage—Brookline ‘hreniieethanias Tr. 188-195, Exhibit 17]

_Haberdashery—([Levin—Stipulation, Tr. 709-711, Exhibit 90 and

91] 3 , :

Madison French Cleaners—[ Stipulation, Tr. 706-709, Exhibit 89]

S. Friedman Furs: Inc.—[Stipulation, Tr. 716-719, Exhibit 94 and

95]

Gyieninchien Membership for defendant’s wife—| Bay Factors, |

Stipulation, Tr. 719-722, Exhibit 96 and 97] ° |

- Plumbing—94 Brookline Avenue—[H. V. Snow, Stipulation, Tr.

~ 723-729, Exhibit 98 and 99]

Dr. A. Sternbach—[Stipulation, Tr. 933-935, Exhibits 123 and

124] |

- Dr. pinwile Kaufman—[Stipilation, Tr. 931-933, Exhibits 121 and

122]

[3829]

St, Francis Prep. School—[Stipuation, Tr. 929-931, Exhibits 119

and 120]

Insurance, iat Cadena Realty Corp—[Tr. 745-746, 749, .

753-759, 766 ; Exhibit 107 and 109-x-23 ; M3145-3146]

Interest Payments—Colonial Realty C orp.—[Tr. 730-744, ‘765-

769 ; Exhibits 101-106, 109-x-23;; evant

r

A-40

| Appendia B—Opinion by Rosling, U.S.D.J.

Mortgage Expense—Colonial Realty Corp—[Tr. 937-939; Ex-

hibit 101-105 ; M3146-3147] - -

Safe Deposit Box—Dime Savings Bank—Defendant used name of

‘a friend’s wife, Nancy Segreto, as lessee. [Tr. 1044-1053, 1060-1061 ; .

1062-1063, 1067-1074, 1076-1086, 1090-1102, 1806-1810. Stipulation, —

- Tr,-2631+3631-A, Exhibits 142-144; M3147-3148]

Maid full time—Ada Graham—[Stipulation, Tr. 1018-1019]

Dr. H. B. Herman—[Stipulation, Tr. 1027-1028; Exhibit 136]

Dr. Barnett A. Greene—[Stipulation, Tr. 1028-1030; Exhibits

137 and 138-x-23]

Dr. Robert L. Fisher—[Stipulation, Tr. 1031-1033; Exhibits 139

and 140-x-23]

Interest and late charges re 1955 Ford purchased by defendant and

_ financed by Associates. Discount Corp. [Tr. 628-642, 656; Exhibits

80 and 81; M3149] tae

Interest re financing 1957 Ford, Manufacturers Trust Co. [Tr..

994-1007 ; Exhibit 130-134 ; M3149-3151]

Dr. Joseph Eisenstein—[Stipulation, Tr. 1140-1143 ; Exhibits 149

and 150-x-23] '

New York Phoenix School of Design—[Stipulation, Tr. .1143-

1146; Exhibit 141]

Jewish Hospital of Brooklyn—(Stipulation, Tr. 1146-1149; Ex-

hibit 152]

23)

[3830] . a ° : . |

Holy Innocents Building Fund—[Stipulation, Tr. 1152-1154; Ex-

hibit 156-x-23]

W edding of defendant's son Joseph—Belmont Plaza Banquet Inc.

| [Stipulation, Tr. 1155-1158; Exhibit 158] » Kayne Miller Orchestra

[Stipulation; Tr. 1159-1162; Exhibit 160-161]; Atlas Floral Deco-

ratoss [Stipulation, Tr. 1162-1163; Exhibit 162]; Ben Zuckerman

[ Stipulation, Tr. 1163-1165, Exhibit 163-164],

Church of St. Ann—[Stipuiation, Tr. 1149-1151; Exhibit 153-x-

——— er a

A-4l1 . z

_Appendia B—Opinion by Rosling, U.S.D.J.

Maimonides Hospital—[Stipulation, Tr. 1179-1181: Exhibits 166

and 167] |

Whitehouse Garage—{Stipulation, Tr. 1181-1188; Exhibit 193]

Long Island Water Corp —| Stipulation, Tr. 1190-1192; Exhibits

168 and 169]

General Motors Acceptance Corp—Payments on a 1960 Olds-

mobile purchased by defendant’s son. [Tr. 1398-1399, 1407-1408;

1816-1817 ; 1853-1855; Stipulation, 2632-2633; Exhibits 177 and

178, M3154-3155] .

Unity Hospital—[Tr. 1751 ; Exhibit 154] |

Mme. Denise french Cleaners—(T, 1412-1417, 2629, Exhibit

179]. — .

Rental of cars—Craft eile Inc. em Tr. 1426-1430,

Exhibit 180 and 181]

Long Island Lighting Co. _[Stipulation, Tr. 1430-1444, Exhibit

182] |

Plumbing—Brookline Avenue—Moriarty and Sherman—[Stipu-

lation, Tr. 1434-1437, Exhibit 183 and 184]

Home Carpet Cteamerg— [Sa geaen, Tr. 2149-2152, Exhibit 222

and 223}

M. Kavanagh & Son—[Stipulation, Tr. 2154-2156, Exhibit 224

and 225]

Laurel Floor Comwtng—eiptaion, Hr. 2156-2158, Exhibit

226)

Jolousies—interest and late payment penalties—Franklin National

Bank [Tr. 2159-2175; Exhibit 221, 227-229; paler

3831

: Bent Insurance—Parsons icin, 2282-2289]

Tickets to a business association function—Dominick ‘Londo—

[Tr. 1994-1995, 2629; Exhibit 212]

Boat—interest paid re financing—Franklin National Bank—

[Tr. 2175-2194; Exhibits 214-217, 230, 231; M3158 and 3159]

Vulpis Heating Corp.—{Tr. 2337-2341 ; ; Exhibit 243].

pe, Bed

- Appendia B—Opinion by Rosling, U.S.D.J._

"Fuel Oil—[Vulpolene Corp—Tr. '2342-2347-A ; Exhibit 244]

Boat rental—[Eagle Fishing Pier—Tr. 2516-2525, ‘2538-2540,

2633 ; Exhibits 239-x-23 and 248] .

Insurance premiums, _general—Frank Romanzi, insurance broker

[Tr. 1802-1805, 2213-2229, 2261-2263, 2496-2512, 2515; Exhibits

200-201-x-23, 232, 236, 238, 247; M3159]

I nsurance premium— Arthur - C. Lenitz oe, sacaataedl Tr. 2582.

2584; Exhibit 252-x-23]

Dresses—Lillie Rubin [Stipulation, Tr. 2579-2382 ; Exhibit

~ 251) |

. Rumplers Youth C. enter, Inc. . pean, Tr. "2585-2587 ; Ex-

hibit 254]

Dr. M. D. Roven [Stipulation, Tr. 2587-2588; "Exhibits: 255

~ and 256]

Rosedale Florist [ Stipulation, Tr. 2589-2591 ; Exhibits 257 and

258]

' - « Dr. George A. Rawler [Stipuation, Ft. 2501-2593 : Exhibits

259 and 260] —

Drug store purchases—Reid and Youmans [Stipulation, Tr.

2594-2595 ; Exhibit 261]

.4 Purchasé—painting—French American Gallery—[Stipulation,

Tr. 2595-2596 ; Exhibit 262]

Atlantic Television Co —[Stipalaton, Tr. 2596-2598; Exhibit

. 263-x-23]

Dr. S taney - Greenfield-—[ Stipulation, Tr. 2508-2600; Exhibits

264 and 265] |

[3832] -

Dr. Hyman S trauss—[Stipulation, Tr. 2600-2601 ; Exhibit 266)

- Swim suit—Treasure Trove (Stipulation, Tr. 2602-2603; Ex- ©

hibit 267]

Carol Dairy—[Stipulation, Tr. 2603-2604 ;, Exhibit 268) .

Bordens Farm Products-(Stipulation, Tr. 2604-2605]

Sylvan Dairy Inc—[Stipulation, Tr. 2605-2606-A] -

Appendix B—Opinion by Rosling, U.S.D.J. |

ieidiaiis for Brookline Avenue—F. M. O’Rourke deaacaane

_ Tr. 2615-2616; Exhibit‘ 277) . |

Joe Morley Electrical Co. —[Stipulation, my 2507-2600; Ex- .

hibits 271 and 272]

Vinny and Rogers Meat M arket—[Stipulation, Tr. --2609-26}1 ;

Exhibit 273-x-23]

| De Rand Market—[Stipulation, Tr. 2617]

Bianchi Boat Dadian eae, Tr. 2611-2614 ; Exhibits 274

and 275]

Traffic Summons and Control Buretu—This covers payment of

parking tickets by defendant during 1956-1958. The transactions

were conducted by defendant who used for the purpose’ the name »

of a friend, Joseph Dantuono. [Stipulation,*Tr. 1512, 2629-2631,

- 2639-2644, 2649-2653,. 2655-2657 ; Defendant’s Exhibit ax 185-

x-23]

~ Pots and jone—Purchesed from Kenro Sales and Service Corps

[Stipulation, Tr. 2618-2619}

The court finds that the defendant poovided'' the funds which were

used applied or disbutsed. in making the foregoing expenditures. ui

10 Defendant’s children, Joseph i‘ and Frank, aged 27 and 22

respectively, testified that their mother, defendant’s wife, had never

been employed, [Tr. 901-904, 1788-1791]. Pauline Trento, a friend

for some eighteen or twenty years’ testified to similar effect, [Tr:

957-962]. In -an admission record of the Unity Hospital, covering

hospitalization of defendant’s wife in December 1959, he declared

that she was a housewife, [Exhibit 154, Tr. 2393- -2398, 2406, 2411,

2634]. The Social Security Administration certified that its files

disclosed no record reflecting any earnings by the wife, [Exhibit 7].

The I.R.S. found no income tax returns filed. by the wife at any

time, [ Stipulation, Tr. 2621-2624]. ;

The government’ s thorough investigation uncovered no evidence

of receipt of income by her at any time. Exhibit 131, loan applica-

tion which Mrs. Schipani submitted to the Manufacturers Trust Co.

(see supra, fn. 8) provided the Government with a lead in the form

of the representation she made therein to the Bank that she had

been employed as a designer by the Rosetta Coat Co. for ten years.

; - A-44 | |

Appendia, B—Opinion by Roslin, U.S.D.F.

When this lead was checked, however, it developed that she had

never been so employed. Rosetta did not even employ a “designer”

in its business, [Exhibit 170, Tr. 1229, Exhibit 131, Tr. 1728-

1729, 1737] ,

Nor did defendant’s children furnish _any of the funds their

father expended. [Stipulation as to part; Tr. 525, 903-906, 1788-

1789] :

_ 11 Adjustment items of addition are defendant's expenditures,

[Finding of: Fact 8, fn. 9, Exhibit 286/286-A] ; loss on the disposi-

tion of the 1955 Ford car in 1956 and on the sale of the 1957 Ford

in 1960.. [See fn. 7, “Automobiles and Boat”’]

ag s

Adjustment items applied in reduction consist of the following:

Statutory $50 exclusion from taxable income of dividends on the

Gurney’s Inn stock. These dividends had been applied by defendant

to the acquisition of the stock and were accordingly charged to defen- -

dant in the asset schedule [Exhibit 281] as part of the investment.

[Stipulation, Tr. 1033-1044, Exhibit 141, M3180] ;

Other items, all quite small with one exception, namely $1025.13

proceeds of a John Hancock Life Insurance policy, and requiring no

‘ special comment. ; .-

[Tr. 261-267, Exhibit 28; Tr. 2935-2936; Exhibit 280; Exhibit

54; Tr. 392-393, Exhibit 53; Tr. 737-739; Exhibit.104, M3181; Tr.

290, Exhibit 33; Tr. 2140-2141, 2286-2289, Exhibit 22]

[3834] , eee

12 The government’s investigation educed no evidence, direct or

circumstantial, that defendant had received any taxable loans, ‘gifts,

inheritances or other donations, non-taxable as income. It is true

that the inquiry did not embrace the records of every one of the tens

of thousands of governmental subdivisions and agencies, domestic

and foreign, where information might have-been sought. The ampli-

tude of the inquiry it made was, however, consonant with what is

found reasonable in light of defendant’s failure to supply leads when

solicited by government representatives to furnish them. (See.

M2964.2990 for conspectus of the problem created by defendant’s

noncooperativeness and the measures adopted to cope with the situa-

tion.) The conclusions testified to as arrived at by Mr. Masetti are

accepted by the court as valid beyond a reasonable doubt.

cs

bs <* AAS

Appendia B~Opinion by Rosing, U. S.D ae

es Although defendant received large sums during the indichihent-

years and in earlier-tax years now outlawed by limitations, he had

no bank accounts in his own name in which these sums might be

deposited with record. preserved ofthe deposits. ‘It is true that he - |

’ maintained three accounts in the nariie of his wife, but these were ~ —

small deposits in trust for his chiJdren. \ None of the large sums that

passed through his hands moved into or out of these accounts. [Ex-

hibit 71, 72, 74; Tr. 585-589, 593-596, 600-601, 606-608; M2971- :

2975]

He opened and tmaintained a safe‘ deposit box, the only one the,

prosecution was-able to locate, in the name of one Nancy Segreto. .

[Exhibit 142-146; Tr. 1044-1053, 1060-1061, 1062-1063, 1067-1074, ;

1076-1086, 1090-1102; 1806-1810, 2631-3631a]

His purchase of furniture from Selwyn-Pomeroy in 1956 was

paid for with $16,000 in currency. cee 85-87 ; Stipulation, ‘Tr.

704-705] |

Payments totalling about $6,000 inl by him in 1959 in connec-

tion with his son Joseph’s wedding were likewise in cash. [Exhibit

158, 160-161, Stipulation, Tr. 1155-1162]

Other payments in cash during the indictment years were for,

rent during the years 1956-1960, [Exhibit 14, Tr. 160], mortgage

payments in 1956 [Exhibit 17, Tr. 192], garage bills in 1957, [Ex-

hibit 193, Tr. 1638], and medical expenses in 1957-1960, _[Exhibit

139 and 152, Tr. 1031-1033, 1146-1149].

Defendant in countless instances during the indictment period

) paid his obligations with. bank money orders purchased at‘ [3835]

various branches of the Manufacturers Trust Co: In accordance

with the bank’s procedures, which must have been known to defen-

dant and, therefore, entered into his motivation, no record was kept

by the bank of the identity of thé purchaser, nor was any identifica-

tion required for the use of the paper and its honor by the bank when

the orders cleared for collection. In making the purchases of these

instruments the defendant frequently signed the name of another

person of his acquaintance and executed such other documents as the

transaction demanded in the name of the pane whose identity de-

fendant had ad hoc assumed.

Illustrative of his procedures in such mnperacaneton or signing

are the following :

J A-46 ot

Appendix B—Opinion' by Rosling, U.S.DJ.

The bank money orders used by defendant to pay Associate Dis-

count Corp. in 1956 were signed by him as “Anne Scalfani,” his

wife’s maiden name. [Exhibit 81, Tr. 633-634]

Money orders to pay parking ticket fines were signed by defen-

dant as “Joseph Bantuono” during 1956 nee 1958. [Exhibit HX

185-x-23, Tr. 2629-2631]

In 1957 defendant signed his. wife’s maiden name 6n a money

order which he used in paying. the Manufacturers aru sa [Ex- .

hibit 134, Tr.. 1007] . --

In 1958 defendant purchased a Chris: Craft Boat using for the

"purpose on the title documients the name of a friend, Louis Esposito,

_ who had no interest jn the transaction. Defendant traded in another

boat he owned, registration of which was not found.by the purchaser-

dealer. [Exhibit 214-217, Tr. 2024-2030, 2035- 2052, 2268-2289]

In the years 1958 through 1960 defendant, continuing his mas-

_ querade in the’ boat transaction, signed the name “‘Louis Esposito”

on the money orders with which he paid the installments due the

Franklin National Bank. The bank had financed the unpaid Balance

of the “Esposito” purchase of the boat. [Exhibit 231, Tr. 2632] He

also signed the name Louis Esposito on a bank personal money order

given to Eagle Fishing Pier in 1959 in payment of boat rental he

owed. He had posed-as “Louis Esposito” when he rented the berth.

[Exhibit 239 and 248, Tr. 2516-2525, 2538-2540, 2633] _

He had used the name Nancy Segreto, wife of a friend, for the *

opening of a nominal account with the Dime Savings Bank so that

_he might be eligible under the bank’s rules to rent a vault in the same

name from the bank. (See supra, fn. 7 [3836] “Automobiles and

Boat’’) During the indictment years he signed her name on two. -.

‘bank money orders (1957 and 1959) which he used to pay the box

rental. [Exhibit 144, Tr. 2631-2631a]

He signed the name “Stephen Ucciardi” on bank money orders —

which he transmitted to General Motors Acceptance Corp. in 1960

‘to pay installments on an Oldsmobile —— bd his son. re

178, Stipulation, Tr. 2632-2633]

The purchase ‘of the 1955. Ford in that year and the 1957 Ford’

- in 1956 in his wife’s maiden name “Scalfani” have already ‘been

noted,, [Exhibit 80, Tr. 628-635; Exhibit 130, Tr. 970-973, 989].

There i is a ‘oo a in the documents that in —— for

a

bed

”

MAT

~Appendiz B—Opinion by Rosling, U.S. D J.

the pren of the 1957 car he “disguised his ‘name by signing it —

‘J. Shippe.” [Exhibit 130, Tr. 974-989]

During the years 1956 through 1958 defendant frequently ciel a

1957 Buick allegedly owned by Joseph. Dantuono in whose name

traffic ticket fines had been paid by defendant. This arid more leads to ©

- the inescapable conclusion that. the registration of the car to Dantu-

ono was but a part of defendant’s continuing game of hide-and-seek

_ with the Internal Revenue Service and that the automobile despite

its registration to Dantuono actually belonged to defendant. /[Tr#

1498-1506,° 1584-1589, 1603-1604, 1630-1638, 1656, oe

2649-2653. ‘Exhibits 193. and 278] .

Tt is noted, however, as a point in defendant’ s favor that the court

_ considers the alleged use by. defendant of the name Joseph Scalfani —

instead of his true name in his membership of an athletic club at the

_ Pierrepont Hotel as not sufficiently established.

Representations ‘by defendant from timé to” time in pertinient

‘documents as to employment. (fictitious) serve as additional circum-

stances from which adverse inferences are’ ‘drawn by the court. The — ;

facts are these:

From time to time when filling out.statements for personal or

business reasons defendant asserted a false history of continuing em-

ployment. The xin sense sod of such deceptive practices are to”

‘be noted: ;

The National Ship Scaling Co. went into bankruptcy i in 1949. The

existence of its successor, the Universal Ship Scaling Co. was brief,

ending its career in 1950 or 1951. [Tr. 667-670, 674] It was defen- |

dant’s frequent deception, as will be demonstrated in ‘a moment, to. _

claim that he was employed [3837] by the Ship Scaling companies as’ =

a timekeeper, an employment which if genuine would have been re-

- flected in the records of the Social Security Administration. There

is, however, no.record there of such employment. [Exhibit 135]

In an application for life insurance defendant represented on 2/ 19/57

to the John Hancock that he was and for five years past had been em-

ployed as a timekeeper and chief pay clerk at the Universal. [Ex-

hibit 44, Tr. 485, 488-490] On 9/30/57 .in an application to the same

company defendant again, certified to such employment. [Exhibit 42, ©“

Tr. 454, 461, 465-466] |

On 12/16/59 defendant once mbre alleged, in an admission record

of the Unity Hospital, that he was employed as’a timekeeper by a.

a

g

As

-. yAppendia B—Opinion by Rosling, U.S.D.J.

Ship. Nes

ing Co. * National). [Exhibit 154, Tr. 2393-2398, 2406,

» 24 24sap |,

During the years 1955-1958 defesstint told his son Joseph, then a

; student at college, that he was a timekeeper in the ship scaling business,

” and that whenever the boy. might he required to fill out an application

* “at college which called for, information concerning his father’s occu-

' pation, he was to- declare: such as the employment of this father. [Tr.

1826, 1830] |

Another fictitious iéétployméat, which defendant on occasion certi-

_ fied was with the Riveredge Transportation & Storage Co. Its presi-

-dent- Martello testified that deferidant had never been employed by

_the company. In 1958 defendant, according to Martello, had merely

~/ asked him if he would “okay” -defendant’s credit-if a bank to which

defendant was applying for a loan should call. Defendant, however,

in an FHA credit application dated 4/15/58 expanded the credit réc-

ommiendation he had asked“for to ‘emmployment as a “solicitor” by.

. Riveredge for the previous eight years. [Exhibit 229, Tr. 2166-2175] -

Later that year he repeated the misrepresentation in an application , \

for. insurance dated 9/17/58, this time, however, describing his em-

‘ployment as that of a salesman, and reducing its” antecedent duration .

“to five years. [Exhibit 45, Tr. 473-475]

Here, too, the Social Security records reflect’ ng such employment

“as defendant clajmed, [ Exhibit ° 135): Additionally, there is an ob-

‘vious chronological conflict in the defendant’s competing claims of

‘simultaneous oo by the Ship Scaling companies and the

Riveredge-

‘Defendant on occasion incJuded his wife in false representations of

employment. Thus, in 1956 he falsely stated ta.a broker in the course

of applying for a policy of physical’ damage insurance in which his“wife

was to be the insured that his wife was employed by the Rosetta Dress

Co., [Exhibit 236, Tr. 2229-2231, 2252-2260]. His wife’s misrepre-

‘~ sentation [3838] of a like employment would ordinarily be deemed to

» be res inter alios acta as to defendant and inadmissible. But her mis-

representation ina document cannot be considered as standing apart

* from the mass offevidence directly binding upon the defendant. Taken

as 4 whole, other proof provides a context which compels the in- _

ferenée that the wife’s deception was an incident springing from a com- .

. mon understanding with her. husband in a. family transaction with a

third party. It is merely cumulative of much that is clearly chargeable -~

sto him. * requires no a at conclusions, therefore, to infer that —

a .

a =) e ‘

ll

A49 |

- Appendi: B—Opinion by Rosling, U.S.D.J:

he was privy to the Rosetta falsehood of the wife which parallelled and

fitted in with so much of his own devious‘procedures. [Exhibit 131,

Tr. 994, 1000-1001] | :

; ‘* The court does not accept defendant’s reading of Holland, with -

' United States v. Massei, 355 U.S. 595, 78 S. Ct. 495, decided in 1958, .

four years after Holland, supplying a supporting gloss, thaf by a rigid

dichotomy the government is given the choice in net, worth prosecu-

tions of demonstrating either a soutce of taxable irfcomé or’ that all

sources other than that alternative are excluded. The cases are clear

that the courts have been guilty of no such folly as to mark out’ with

sharp definition for the guidance of the ingenious what form :

cution’s proof must take to sustain a prima facie case of tax ion.

See Holland, U.S. at p. 135; United States v. Massei, supra, in which

the Supreme Court although affirming, rejected the Court of Appeals’

(Ist Cirgjit) holding and inferentially that in Thomas v. Commis-

sioner, 232 F. 2d 520, 526 (1st Cir. 1956). Cf. Spies v. United States,

317 U.S. 492, 499, 63 S. Ct. 364, 368 (1943).

To the contrary of defendant’s contention, the courts announce that

the equation of guilt has three, not merely the two alternative elements

noted. The third is the frame of reference in which the other two sub-

sist.

No problem of sufficiency of proof exists, of course; when the

taxpayer charged is shown to have a business the books of which

do not reflect all his reportable income, even though all other sources

Conversely, if by use of some as yet yninvented IBM machine every

source of nontaxable income were duly taped and fed into the monster

together with the accused’s bertillonage, and the machine thereupon

answered “Nothing found”, inexorable logic would slot the defen-

dant’s receipts in the sole remaining unexcluded category, namely, -

that of income subject to its tax. Proof of a source in such situation

would, if offered, be accepted, but as [3839] merely cumulative. This

is the principle of Hoffman and Massei. “< a

But these are procedures which could work only under laboratory

conditions. They have no existence in the real world. Where no

account books are kept and no returns are filed by the alleged delin-

quent, one has at best only the fragmentary and in other contexts not

too persuasive évidence of what may be “likely” sources. With leads

lacking, a search, with exhaustion of sources less than mathematitally

© -

»

A-50

Appendix B—Opinion by Rosling, U.S.D.J.

complete, nevertheless can, and here buns beyond reasonable doubt

make out a prima facie case. For then the third element, ‘a tertium

quid, comes into play. It is not to be defined and its reach is as un-

limited: as is the human ingenuity in contriving that which 1 is fraudu-

lent and decéptive' which it must counter. P ;

Nor will this court imprudently—(i in light of the cases just cited)

—undertake to provide a definition or to delimit the bounds for this

elusive element. The ‘cases illustrate, rather than verbalize its at-

tributes. It is easily recognizable when present, and its presence lends

corroborative strength to that which would otherwise be deemed an

insufficient showing of either of the other two elements. Thus,

unexplained increases in net worth alone with neither source effec- ,

tively shown nor possible nontaxable origins universally negatived

would not meet the standard of proof required upon which the court

might base a conclusion that increments are attributable to income

‘required to be reported. But an exculpatory explanation offered by

the accused is when later demonstrated to be false not wholly can- - |

celled and disregarded: What defendant has originally adduced, is

availed of by the prosecution,’ serving to be transmuted under well-

established rules of evidence into a circumstantial and affirmative

inference marking the increase as: reportable but unreported income.

~ (United States y. Adonis, 221 F. 2d 717, 720 (3d Cir. 1954) ; United —

- States v. Ford, supra, 237 F. 2d at _ 63.)

position United States: v. "OMS 131 F. co 409.(E.D.. Penn.

1955) wherein the court acquitted, by arguing that here as in

O’Malley (p. 412) the government “has established a lack of ex-

planation rather than a false explanation” by the defense.

‘We cannot agree. The defendant was well within his constitu-

tional rights both before indictment and: during trial, in electing to -

offer no explanation and to provide no leads. But his extraordinary

behavior in relation to receipt and disposition of money, and his

procedures in transactions. affecting assets which were incontrover-

tibly his own, his -camouflaging of these transactions as those of

others who had no interest in them,—all are circumstantially: the

equivalent [3840] of the grossest deception and falsehood he might

have articulated in attempted self-exculpation. ‘The wicked flee

when no man pursueth. ” If he: fled, he fled only the tax gatherer. .

~ . The broad principle is expressed by Wigmore in his “Evidence”, Vol.

II, § 281, 1964 Pocket Supplement, p. 45, as follows:

. & -

A51

Appendix B—Opinion by Rosling, U.S.D.J.

“No useful purpose would here be served in undertaking to

make further classification of the innumerable instances of .

conduct, both verbal and non-verbal, of a party indicating a

consciousness of guilt. The common experience of mankind

in dealing with the ordinary affairs of life should offer, it

_-would seem, an iridispensable test in making: the determination |

as to whether or not the particular conduct encountered is

calculated to raise the inference of a consciousness of guilt.

And in this connection, common experience dictates that often

times while an affirmative or a negative act of a party may

- not in and of itself justify such an infereti¢@tonsidered in

_ the light of the attendant facts and circumstances, an entirely

different result is warranted.” : | ,

*° Scattered bits of testimony strongly suggest the ownership by

defendant of some restaurant business, or possibly a specific restau-

rant, the Casa Bianca at 1005 4th Avenue, Brooklyn, or at least an

interest in it, as a likely source of his. income. On May 22, 1961 his

son Frank (so the boy testified), haying occasion to fill out an .

application for- employment, represented in the document that his

father, the defendant’s “occupation” was that of “restaurateur,” and

that the parent's firm and its address were “Casa Bianca, 1005 4th

Avenue, Brooklyn.” ~ This, the son conned was pursuant to the

father’s instructions. [Tr. 908-927]

On June 9, 1961 the same son had filled out an application for a

fidelity bond. -At the foot of the sheet which bore his signature were

- affixed the signatures of defendant and his wife as indemnitors of

the obligations which the son undertook by the instrument. In the

body of the page thus attested by the defendant appears the following :

“Name Occupation

Father—Joseph Schipani . * . Restaurateur”

[Stipulation, Exhibit 114, Tr. 913]

[3841] 7 |

Additional testimony on the subject of defendant’s ownership of a

restaurant is supplied by the gardner Biamonte to the effect that in

1959 or 1960 defendant had told him that he would like to buy a

plant for his restaurant. [Tr. 348-351, 378, 380-381 ] ae ae

Jeanette Corwin, a friend of the Schipani’s for some 25 years gave

testimony which the court has accepted only in part. The remainder

>

A-52.__

Appendix B—Opinion by Rosling, U.8.D.J.

is rejected, but in light of its manifest and purposive falsity intended

by the witness to aid defendant, it is upon evaluation and in its con-

text found by the court to provide an evidéntiary. basis for an inference,

hereinafter discussed and formulated, as to what approximately was

the true situation which the witness sought td distort or withhold.

Indisputably defendant on at least one occasion—in 1959—had

evinced a maftked interest in’ benefitting the Casa Bianca’ financially.

This he had done by urging Mrs. Corwin to stop in with her husband

at the restaurant whenever they were in the neighborhood, and to

divert her patronage from the Hamilton House to which she had been

accustomed and to resort to the Casa Bianca. [Tr. 1269-1276] The

significance of his interest which might otherwise have been slight

is found in another incident which she related, namely, that on a prior

occasion, the date of which is unclear, defendant had told Mrs. Corwin

that he had an interest in a restaurant, the name of which he did not

mention? In answering questions of the prosecutor directed toward

having her fix a date for the conversation, she gave responses which

the court finds utterly incredible. After many protestations that her

memory for dates was poor, to-the accompaniment of endless incon-

sistencies and ‘self-contradictions, she finally came to rest on a claim

that the conversation in the cours¢ of which defendant’s admission

had been made and which had by her estimate consumed no more than

ten minutes, was engaged in twenty-two or twenty-three years before.

‘It could have been twenty-four or twenty-five years she was prepared

to concede but not as féw as twenty-one.

That the witness was lying was patent not alone from the content

of the testimony she gave, but also from the manner of its, delivery.

Called by the prosecution; she was endlessly evasive, unresponsive

and seemingly unable to understand the simplest questions put by the

U. S. Attorney. Much of this air of confusion and ignorance was in

the court's view mere pretence, for-she exhibited no such difficulty in

answering defensé counsel when he latet took over the inquiry. To

him she delivered short, crisp and relevant replies. os

[3842]

retrogress the incident to a past as remote from the indictment years

as. possible, draws the inference as the only reasonable one to be

distilled from the evidence, that the conversation in fact took place

in a much more recent period than she assigned to it, and under

The court accordingly, recognizing that her objective was to |

core SOU es ee.

= Appendis B—Opitiion by Rosling, U.S.D.J.

sleuamastaieann which left a lasting impression upon the witness.

[Tr. 1239.et seq. passim]

After having laid a foundation for the impeachment of this

manifestly hostile witness by interrogation concerning answers she

allegedly had given in the course of an interview by Agent Robert

Wynne less than a month before the trial, the U. S,. Attorney called

Mr. Wynne to the stand’and elicited from him the information that

Mrs. Corwin had at such interview reported the incident as having

occurred about ten yours earlier, “during the 1950’s.” [Tr. 2874-

2877] °

The agent’s testimony was offered and received for impeachment

" purposes only. If credited it might cancel out the witness’ attempt

to relegate the conversation to a remote chronology which might

deprive it of all probative value. The court in its discretion is author-

ized to admit the testimony for such limited purpose even though the

witness thus impeached has been called by the very party which

seeks to nullify the effect of so much of the testimony elicited as

conflicts with earlier extrajudicial statements. [United States v.

Freeman, 302 F: 2d 347 (24 Cir. 1962) ; United States v. Fancher,

319 F. 2d 604 (2d Cir. 1962) ; Stevens v. United States, 256 F. 2d

619 (9th Cir. 1958) ; Ellis v. United States, 138 F. 2d 612 (8th Cir.

1943) ; Asaro v. Parisi, 297 F. 2d 859 (1st Cir. 1962), cert. denied

370 U.S. 904. Cf. Hickory v. United States, 151 U.S. 303, 14 S. Ct.

334 (1898) ; United States v. De Sisto, 329 F. 2d 929 (2d Cir. 1964),

cert. denied 84 S. Ct. 1885.]

The agent’s testimony is, moreover, cumulative insofar as its

effect is to call into question the portion of Mrs. Corwin’s testimony

_ bearing upon the date-of the conversation, and even without having

received it the court would Lave made the evaluation indicated in

this footnote. Tlie court had already given clear ir‘dication of such

disbelief of Mrs. Corwin’s purported chronology. (See Tr. 2747,

2748, at which point before Mr. Wynne had testified the court’ had

remarked that “I will take with more than one grain of salt her claim

that she can remember a ten-minute conversation which took place

. not as [recently] as 21 years ago, but it had to be more than 23 years

ago.” The witness had in fact given as the likely outer limit of this

brief talk a date twenty-five years before.)

[3843] .

Finally, that defendant was frequently at the Casa Bianca restau-

rant and at odd hours not necessarily related to meal times is borne.

. A-54

Appendia B—Opinion by Rosling, U.S.D.J.

out by the testimony of a number of witnesses. Jerry Gross [Tr.

1880-1881].; Charles Perla [Tr. 1710]; Ralph Schipani [Tr. 888-

893]; Joseph Dartley [Tr. 1418-1422] ; Louis Esposito [Tr. 2273,

'2274],; Pauline Trento [Tr. 963-964] ; and. Regina Attanasio [Tr.

2527-2538, 2620-2621, Exhibit 248]. The last ‘witness: mentioned

produced a record book of her business (rental of slips for small

pleasure craft) in which at page 93 appears the address of the Casa

Bianca, a telephone number, the years “1959 to 1960”, the words

“of Rest.” which last expression. the witness construed to be an

abbreviation of “restaurant”, and the address of the .Long Beach >

_ property, “94 Brookline (sic) Ave.” The information according to e

the witness had been supplied by defendant. The name he used was

an alias: L. Esposito. It appeared on the page in question. _

16 That defendant had another likely source of income from

activities in labor rélations is supported by no direct evidence, but

circumstantial praof of some force is not wanting.

Victor Matrunola, Vice President of Colonial Realty Co., while

engaged in procurifig a $10,000 mortgage loan from a private lender

for defendant prepared a work sheet, Exhibit 112-x-100,-on which

"he jotted down along with other random notations information per- —

- tinent to the credit of the borrower, nominally defendant’s wife, the

record owner of the Brookline Avenue property. The loan, however,

was being secured for defendant. [Tr. 733] The mortgage applica-

tion, Exhibit 111, dated 3/10/56 was signed by both defendant and .

his wife. After the transaction closed the interest and amortization

payments during 1956-1960 to Colonial were all made by personal

money. order signed by defendant, although some thus’ signed pur-

ported to carry the wife’s signature.. [Exhibit 109, Tr. 766] :

_ On the exhibit is a notation ‘which the court, on the basis of an

analysis of _Matrunola’s testimony and that of Dominick Longo,

defendant’s attorney, aided by reasonable inferences it draws from

the evidence as to the probabilities inherent in the situation thus

_ disclosed, -interprets as a record of a contemporaneous, i.e. in 1956,

- representation, personally made by defendant to Matrunala, that

_ defendant was a labor. consultant with an income of $12,500 a year

_ from such activity. [Tr. 769 et seq., 1995-2001, 2014-2018] Two

incidents lend color to the Matrunola flemorsndam.

‘\

a A-55

Appendix B—Opinion by Rosling, U.8.D.J.

[3844] | | . :

In 1954 Martin Leonard, attorney for Giovanni’s Restaurant, told

defendant of difficulty his client was experiencing in negotiating a col-

lective bargaining contract with the Chefs, Cooks and Pastry Workers

Union, Defendant promised Leonard he would speak to a “friend” of

his at the union to see if the friend could help. A few days later defen-

dant told Leonard that the contact had been made and that Leonard

should speak to the union again about the agreement. The contact

seemed to have been productive, for a new contract was closed with

little difficulty soon thereafter. [Tr. 1109-1128] ‘

Serving with the incident just noted to bracket the indictment years

and sufficiently close to their end to cast a retrospective illumination

upon defendant’s similar activities within that interval are two related

episodes, both occurring in 1961, and involving one Jerry Gross and

the troubles of his company, the Kleen Linen Service, Inc., with his

union. Gross was in the laundry (linen supply) business, servicing the

Casa Bianca and would on.occasion see defendant there. Gross ac-

knowledged no more than a nodding acquaintance with defendant, yet

although only after much equivocation and fencing, Gross admitted to

having had’a conversation with defendant in the restaurant in 1961

_ about his problem. His testimony that Schipani-was only one of a

group then present, and that his remarks were addressed to the entire

group is scarcely believable in light of the subsequent individual interest

of defendant in Gross’ problem. “On one occasion I asked Mr: Schi-

_pani’s advice regarding picket lines,” Gross testified.

In October 1961 Gross called defendant on the telephone at the

Casa Bianca and asked him to come over to his place of business. There

in his office Gross disclosed his union difficulties to Schipani who after.

hearing him out declared—so Gfdss testified—that he couldn’t help.

It wasn’t Schipani’s field—his business. Gross claimed to have spent

15 or 20 minutes in his recital to defendant before the latter said he

could not help. [Tr. 1869 et seq.]

_ Leonard and Gross both professed that no money had. passed hands

in their respective consultations with defendant. The incidents, how-

ever, as the witnesses narrate and embroider them give off that charac-

teristic effuvium which customarily envelops back-door labor-manage-

ment negotiations. The court is not persuaded that one so slightly

known to the employers concerned before he evinced an interest in

their problems was dltruistically motivated in his. interest.

| A-56

Appendix B—Opinion by Rosling, U.S.DJ. .

[3845] . aa

17 On the other hand, the contention pressed upon the court by the

prosecution that the defendant in preindictment “admissions” made to

government agents, who testified concerning them, that he was engaged

in lucrative illegitimate activities, is rejected as lacking evidence of the

requisite probative quality. The admissions are vague and uncorrob-

orated—(See Smith v. United States, 348 U.S. 147, 156, 75 S. Ct. 194,

199 (1954) ; United States v. Calderon, 348 U.S. 160, 164, 75 S. Ct.

186, 188 (1954) )—and the testimony which embodies them does not

persuade beyond a reasonable doubt that the specific words ascribed to

the defendant were articulated ‘by him and with: the intent ascribed.

- Finally, with these doubts regarding the evidence troubling the court

as trier of the facts, uncertainty as to the legal reach of Escobedo v.

Illinois, 378 U.S. 147, 156, 75 S. Ct. 194, 199 (1964), admonishes it

to give the defendant the benefit of the doubt in this area of the proof.

Justice White’s comment, though a dissenting and exaggerated stric-

ture upon the Escobedo majority’s views, nevertheless by its very exag-

geration warns that the sweep of the opinion may well bé tidal. The

justice remarks’ with measured asperity that in light of Escobedo “de-

fendant is constitutionally entitled to a. lawyer before, not after, he

commits a crime, since-it is then that crucial incriminating evidence is

put within the reach of the government by the would-be accused.” i

18 Government Agent Rosman, using the figures provided by the

setti schedules computed the tax due for each of the indictment

e elements entering into the final figure fixing the respective

e set out in Exhibit 290 and are comprised of the fol-

lowing: Gross ifreame [Exhibit 285, Tr. 3236-3237] ; uctions

[Exhibit 283, 290, 29T>292, Tr. 3237-3247, 3293] ; Exemptions [Tr.

3249-3250] ; Taxable Inconie{Tr. 3250] ; Tax on line 5 [Tr. 3250] ;

Dividends Received Credit [Tr. 3251]; Tax Liability [Exhibit,

3, Tr. 61-66; Exhibit 290, line 8, Tr™8233]. Deductions set out in -

detail in Exhibit 291 are grouped, appropria under contributions,

interest, taxes and medical expenses.

19 Wilfulness is clear. Much more than wilful failure to file a

return, supply information or pay the tax, a misdemeanor under 26

U.S.C. § 7203, is here present. A long history ‘of nonfiling coupled

with devious procedures of deliberate concealment of income by use of

the names of others, including his wife’s maiden name, by absence of

records, cash transactions, the use of bank money orders, and ‘other

> . e .

4 - ° .

»

‘ . e

° * - » .

.

x 8

— Seen .

ee Sek ee eee . —

. * .

—A87

——— B—Opinion by Rosling, U.S2D.J.

‘devices, in 1 their summation justify. a Sullice of a wilfull attempt to

evade and defeat the income tax imposed by the Internal [3846] Reve-

nue Code in violation of § 7201. See Holland v. United States, supra,

348 U.S. at p. 139; Spies v. United States, 317 U.S. at p. 497; United

States v. Holovachka, 314 F. 2d 345, cert. denied 374 U.S. ‘809, 83

S. Ct. 1695; Cooper v. United States, 321 F. 2d 274, 277 (Sth Cir

1963), cert. denied 375 U.S. 964, 84 S. Ct. 482.

a AO OE

*

858

Appendiz B—Opinion by Rosling, U.S.D.J:

[3847] _... APPENDIX |

=

Morton For A MistriaL BECAUSE OF ‘ALLEGED IBREGULARITY IN“,

THE. PROCEEDINGS Unver 18 U:S.C. § 3500. +

Defendant, in his brief after trial, pp. 21-24, contends that

error inheres in the circumstance that ‘‘several conferences

[were] conducted by the court in chambers privately with’

_ the government attorney and out of the presence and over

the objection of.the defendant and his attorney, in connec-

tion with the screening of ‘3500’ materials, all of which was

prejudicial and deprived defendant of his rights of due

process of law under the fifth amendment and of confronta-

tion under the sixth amendment.’’ |

The subdivision of.the memorandum concludes, without

citation of supporting authority, (p. 24) with a hesitant

- motion for mistrial reading, ‘‘This we are most reluctant to

. do, but, nevertheless, in order to preserve our position in

the event of an appeal, we do hereby respeetfully (and _re-

luctantly) move for a mistrial upon the grounds stated in

the above subheading.’’ These grounds are those quoted in

the opening paragraph of this appendix. .

The reasons for the denial of the . motion (supra p. 3)

follow:

[3848]

_ Express Consent Was Given 8 BY DEFENSE Cocioem:

To THE PROCEDURE FOLLOWED.

«se =

" The procedure to which defendant claims to Rive ‘‘ob- .

" jected’’ involves only, the Masetti material, the nature of

which created grave and difficult problems for the court in

vas

%

-A-59

| Appendix B—Opinion by Rosling, U.S.D.J.

its processing under the statute. Mr. Lefkowitz was thor-

oughly and happily familiar with this court’s liberal atti-

tude respecting a turnover of § 3500 material to the defense.

He had only recently before the instant trial been counsel

for one of the defendants in another trial over which this |

court presided, (See infra, p. 62) His express consent

~~ - which was here given only after detailed explanation of the

“steps the court proposed to take could not have — |

from confusion or misapprehension.

The situation first arose atthe ‘aan of the govern-

ment’s direct: testimony of Agent Wynne concerning inter-

views with the witness Corwin. Mr. Wynne had made no

notes, nor ‘had Mr. Masetti-who was likewise present at the.

interviews done so. Mr. Ruby, the third of the government

personnel in attendance, had made some attorney’s jottings.

These he proposed to turn over to the court, alleging, how-

ever, that they did not fall within the definition of a state-

ment under’$ 3500(e).. The notes were not in his file in court.

He thought they might be in his office. Some colloquy not

pertinent to the immediate problem then ensued. The record.

then continues [Tr. 2896], .

“‘Mr. Lefkowidz : Well, your : inaee, I could repre- .

sent to the Court at this time that if Mr. Ruby has no

notes with reference to the [3849] particular inter- ©

view, and if they are—if they are not there, well, that

is the end of the defense counsel’s cross-examination.

‘<The Court: Why don’t you go a step further? I

think you are going to suggest that you have id

clear.

‘*Mr. Lefkowitz: Yes, that j is clear.

‘“‘The Court: Well, suppose 1 we do this, what oe

A60 ° a

- Appendic B—Opinion by Rosling, U. SD J.

originally thought of doing I will. do in this onion:

Mr. Ruby, you go to your office when we recess here ©

{ and I will be in Chambers, and if upon your review

.of such notes as you find you feel they do not qualify

under 3500, then under the statute itself I.am re-

quired to meet with you privately, that is, to the ex-

clusion of the defendant’s counsel and review those

things and make my own determination.

If I determine in. that situation that the notes are

not producible, or that there are no notes at all, then

we can recéss completely tomorrow. Is that what you .

had in mind?

“Mr. Lefkowitz: Yes. That is what I was wiles

to—

‘The Court: ¥en will leave a number, Mr. Lefko- .

witz, Where you can be reached—

_ “Mr. Lefkowitz: I will be at my Office.

“The Court: ‘(Continuing)—within the next hour ©

“ or so; so that you can be apprized of whether you are ©

edie oe" to-return here tomorrow morning or-not.

‘*Mr. Lefkemitz: Very good.

‘‘The Court: “I will, of course, if the ‘notes are.

turned over to me for in camera inspection—I will of

course have them routinely marked as an exhibit—a

Court’s Bit

an appeal from that determination. .- ,

‘Mr, Lefkowitz: If that will be so, or if that were

to be so, then we would reconvene on Tuesday?

“The Court: Tuesday, yes.’’

tt developed when Mr. Ruby located the notes and turned

them over to the court as arranged that upon a mere glance

the single sheet [Court’s Exhibit B] was found obviously ;

” s 3500 material and Mr. Ruby was accordingly asked —

t for Identification—so that they may ,.

be preserved iy the event that [3850]. there should be-

A61

| Appendia. B—Opinion by Rosling, U.8.D.J:

by the court to notify Mr. Lefkowitz that there would. be no

_ session onthe 19th, the following day:

-. On the next scheduled trial day, the 23d, an Office asso- ~

ciate reported that Mr. Lefkowitz was too ill to come to

court. The following day the attorney was in ‘attendance,

ailing and carrying a cane. ahi is a

On February 24 Mr. ‘Masetti, the government * i Nestinty geht

witness, concluded his long and involved direct testiniony

with voluminous and complex investigatory and statistical

data for reference and support: [Tr. M2937- 3187] Mr. °

Lefkowitz a moment earlier at p. 3186 had asked, ‘‘Have I-

| _ been furnished with all 3500 material of this witness?’?.

Fi

‘Mr. Ruby after some reference to the content of govern- / £

ment’s Exhibit 287 (the sealed in camera material) an-

~ . nounced the government’s position that ‘‘as to certain por- —

tions of the report, I would not turn them over to--Mr.

Lefkowitz unless directed by the court to do so.’’ (Tr. 3187] _

At this the court declaged its position and proposed

é [3851] procedure as follows:

“The Court: Well, the Court never makes a final

direction. It does what 3500 says. 3900 gives you

[addressing Mr. Ruby] a. choice. And part of the

choice is the abandonment of the. ‘prosecution or part .

of it anyway: This calls for an in camera proceeding

_ with the defendant and defense counsel not present

because a disclosure made to the Court might dis-

‘+ close the very thing to the defendant which the

Government is entitled to have withheld.’’

a

Ab

)

Appendia B-Opivion by Rosling; U.S.D. J.

Mr. Lefkowitz without demurrer to the court’s indicated .

_ action argued at some length-[Tr. 3188-3191] that he was. __

entitled to the full-reportas constituting the statement of

‘tone who prepared this’ case against my client. *, (Tr.

3189]. Mr. Lefkowitz then [Tr. 3191f turned abruptly from

thé subject to move for an examination by the court ‘‘of

the grand jury minutes insofar as testimony given by Mr.

Masetti,’’ and for permission’ “<from the Court to use such

portions thereof, or all of ‘his testimony for purposes of

cross-examination insofar as it affects the testimony that

‘he has given.”” When Mr. Ruby indicated some reluctance

to consent, the court made the following observations which

.are quoted together with colloquy of counsel at greater

length than might otherwise be the case were it not for

the fact that what was said provides a context for the, lan-

guage, here underscored for easier identification, relative

to the § 3500 procedure about to be entered upon:

‘‘Now, courts are completely cognizant of the fact

that this rule of disclosure only where inconsisten-

cies appear is often unfair in its operation and im-

possible of fulfillment [3852] because what may ap-

_pear_to_be no inconsistency to’ the judge sitting here

with limited familiarity with what is involved and eh

what is yet to come may present to resourceful coun-

sel the grossest sort of inconsistency.. Spiny attitude

is that if there is any—if there is no serious prejudice

_ that will come to the Government through a dis-

- elosure, that the minutes need not be searched for

* possible inconsistencies.. On the other hand, if the

inconsistencies are apparent, the Court surely would

not wish to withhold the minutes from counsel.

Mr. Ruby: May I have a moment, your Honor?

a

A63

Appendia B—Opinion by Rosling, U.S.D.J.

The Court: Suppose we do this? Suppose you

take a couple of minutes time reexamining the Grand

Jury minutes, which I see from the document you

hold in your hand are not too lengthy, and then if it

should be appropriate to turn them over to Mr,

Lefkowitz, he can spend the time reviewing the

Grand Jury minutes while we [indicating Mr. Ruby]

are in chambers in camera considering the 3500

application.”

Further colloquy in open court between the court and

Mr. Ruby ensued interrupted by conferences out of court

by Mr. Ruby with the U. S. Attorney following which he

reported: back in open court. Thereupon the court once |

more made clear its contemplated procedure to ‘all, includ-

‘ing Mr. Lefkowitz and his client,'as appears from the fol- .

lowing further excerpt from-the minutes: [T'r. 3199]

‘‘The Court: Well, suppose we [again indicating

Mr. Buby] adjourn to chambers and I will consider .

the grand jury minutes first, so that, they being far

less voluminous—they may be made available to Mr.

Lefkowitz and then we will decide whether sufficient

time remains tonight for a disposition of the he 3500

material.—

All right, the reporter and the Clerk will please

come with the Court to—we will use the jury oom

for the in-camera proceeding: -

[3853] |

Mr. Ruby: We will first determine the grand jury

minutes?

The Court: That i is right. So will you wait, Mr.

Lefkowitz. W& may have quick work for you on the

‘ grand jury minutes, but from the size of the ‘500

material, iti is not likely in that case.

T

A-64

Appendix B—Opinion by Rosling, USD. «

(Thereupon ensued an in-camera session with the —

' "Court, Mr. Ruby, the — and the Clerk pres-

ent. )**

The eewebete description is the iin language re-

citing what was observable and observed by all present in .

the court including , Mr. Lefkowitz and the defendant, ©

namely, the exit from the courtroom of the judge, the clerk,

the reporter and Mr. Ruby through the private door beside

the judge’ s- desk leading to their announced destination,

the jury room.‘ !

?

On February 26 at the next scheduled open session of the

court, the incidents and results of the § 3500 proceedings

respecting the Masetti documentation were disclosed and

placed upon the record by the court in colloquy with both ©

“eounsel. The transcript pp. 3207-3220 is too lengthy for

convenient quotation, and excerpts would lose something of -

their significance in removal from the context. That defense

counsel was. not evincing even a minimal dissatisfaction

with the court’s procedure of whiéh he had throughout been

: kept abreast is manifest. That his client was receiving ,

through the court’s greater freedom of action in the pro-

cedure adopted much that a court might otherwise without

abusing its discretion or committing clear error have re- |

. fused him because no basis for disclosure was discernible

[3854] from its mere perusal of the tendered document was .

equally elear. [Tr. 3210]

| A reference to’ Mr. Ruby’s attendance that morning in -

,» camera appears at Tr. 3208. The court noted [Tr. 3210] —

-that the liberal turnover was in part ptompted by Judge

PE a ee ae eee ne tle Re Pa ee

eee sh rite pete oe To cde Bde meh aR.

.

edd ashen h BSW oberon

demas rst

A-65

nee ‘B’-Dpinion by Rosling, U.S.D J.

_ Friendly’ s wise ‘comment in ‘United States v. Borelli, $36: -

F. 2d 490; 497, concerning the imperilling of convictions | Dy

caviling over the delivery of 3500 material which could by

surrender “‘not add appreciably to the strength of the de-

fense.’’ The’ afternoon, the court announced, .would be

reserved for the testimony of: a witness - other than Mr...

Masetti.. This would afford Mr. Lefkowitz the entire week-

end for review of the Masetti §.3500 papers now made |

available by ‘the in camera procéedings described, in prepa-

ration for the cross-examination of Masetti by Mr. Lef-

kowitz. [Tr. 3213] On Monday the court proposed to call

Mr. Masetti as its own witness in a § 3500 proceeding’? so °

that Mr. Lefkowitz could cross-examine him without being

subject to any impediment. which might limit the attorney’ eee

right to.a-broad interrogation, (Tr. 3214], as might have .

been the case were Mr. Lefkowitz’ to be required .to place

the-agent on’ the stand as his own witness. That such ques-

tioning by Mr. Lefkowitz might well be required appeared —

to the court from the. fact that Exhibit 287, notwithstanding

its bulk, referred to, but did not annex numerous support- _

ing documents. Additionally a host of persons. who pre-

sumably had been [3855] interviewed by Mr. Masetti and -

whose interviews formed in part-a basis for his report were -

merely listed in thé Exhibit. In this connection the court

now addressed Mr. Lefkowitz, saying (Tx 3218], “I will |

give Mr. ‘Lefkowitz an opportunity to, answer orto com-

ment, and if he wishes he may. I saw him nodding his tie

indicating that—” :

Mr. Lefkowitz’s reply was, ‘‘T eiiieciiae that, your

Honor, but I just want toi inquire whether the entire report |

> 4 7”

’ 4 4 :

Lx y P

wer dee I A 66

od + 4 e a

. : ° ‘

4 >», - ai 4

. vos me e ‘

, a

Appondia B—Opinion by Rosling, U: Sw. D. J.

eth ‘the: parts deleted, are made a Court, Exhibit. 99 The ~ Hig

“court assured him it bad been and that a stenographic rec-

ord, of thé proceedings had been made and that the Clerk

had been present: The court then in ‘summation asked [Tr.

“. -3220], ‘‘So ts the arrangement satisfactory?” to which Mr.

ra Lefkowitz. replied, ‘‘Yes, your.Honor.’’

eg The ‘colloquy which now followed was rather Sad “and

dealt with an unrelated matter of proof.: The balance of

‘the day, as earlier, agreed, was consumed-in the. testimony

_ _ of Mr. Rosman; the government: agent who had computed

the tax due’ for the indictment years (See fi. 18, p.43 supra).”

Recess. was then\taken over the weekend to- Montag:

March’ L | ,

‘On that. date the ivi aimounced its plan to = :

with the conclusion of Rosman’s examination. This wéuld

be followed with the Masetti § 3500 inquiry (in open court)

“unless Mr. Lefkowitz,has other ideas.’’ Mr. Lefkowitz

declared he had none. [Tr. 3290] Mr. Rosman then testified

briefly. [3856] When he had concluded Mr. Ruby, announc-

ing that he had a few other 3500 items that he wished to

have marked. and turned over to defendant, all without in-

camera. processing, proceeded: to do so, (Exhibits 293, = 3

295, 297 and 198 for identification].

' The court thereupon inquired of the government attorney

whether any of these documents now made available by .

him to the defendant’ were among those which had been .

merely enumerated in the General Exhibit 287 for Identifi-

cation that Mr. Masetti had used as his master file, but.

_which were not annexed thereto. Being. informed by Mr.

>

CR aCe caiteatrnltd ad B08 been VAG DG 9

_Mr. Ruby before turning him over to defens

AST

Aelia B—Opinion by Rostiig, U.S.D.J.

Ruby that the Exhibits (293 through 298) just ddligsted to.

the deferfse were not mentioned in 287 but were in addition

to those listed therein, the court decided to ‘‘soften up’’

ounsel for

§ 3500,inquiry.as to what these subsidiary ocuments re-

ferred to in Exhibit 287 were and as to-su

be noted in the discussion which immediately follows the .

court in this approach not: only had the exhortation. of the

Court of Appeals of this circuit to serve as a guiding prin- .

ciple, but itself cited the most.recent of the cases-which em-

bodied it. The first of the cases noted [Tr. 3298] was

United States v. Ellenbogen, 341 2d 893 (2d Cir. 2/25/65)

the.slip memorandum in which the court had received only _

the preceding Saturday, two days earlier. From the opin- ~

ion in Ellenbogen written by the then Judge Marshall

[3857] the court quoted several excerpts. The court re-

marked in the context of its discourse that ‘‘Judge Marshall

refers-us ‘to United States against Borelli, which I believe

z I cited to you gentlemen last week.’’ In Borelli (supra,

p. 52), it may be recalled, Judge Friendly inveighs against.

the folly of the- U. S. Attorney i in jeopardizing hard-won -

convictions by a scrimping approach to, what i is Jencks Act-

discoverable. Noting that Judge Marshall.had ruled that ~

a sufficient nexus to the direct testimony of the witness —

affected is shown to exist which requires disclosure when

- the document in question may be useful, in the opinion of

- the defense, rather than of the judge, even though only. as

an auxiliary to cross-examination, “this court commented

[Tr. 3301] that with ‘‘the Court of Appeals breathing —

rather warmly on the judiciat neck of the District J si

=

>

other matters a .

. as might relevantly be the subject of interrogation. As will

A680

nal

-Appendia B—Opinion by Rosling, U. a D. J.

—_—

ia ‘Court will noi ‘be niggardly or. unduly’ seettlative in |

considering what should and should not be produced. "

Mr. Lefkawita then requested. that he be permitted to | -

| take a. er from Mr. Ruby under § 3500 procedure.

‘ The Court, of course, granted the request, -whereupon Mr.

Lefkowitz for the first time disclosed that he ane the

§ 3500 Laan objectionable. |

RELATIONSHIP OF THE Ossecrion TO THE THEN PENDING |

ApreaL 1n Unitep Starzs v. PERSICO, et al, Supsz-— |

QUENTLY: Dzcwep anp Conviction’ REVERSED, 7 /23/65,

— ON OTHER GROUNDS. 7

The § 3500 interrogation which ensued sniiaiad: of but

two questions. put by Mr. Lefkowitz to Mr. ‘Ruby. Mr.—*

-. Ruby’s.response supplied Mr. Lefkowitz with no informa-

-tion [3858] that he and his client did not already and con-.

temporaneously with the events know. from words spoken -

and things seen and to which the attorney had: given ex-

press assent. The court justifiably felt, as the record surely _

must persuade, that it had more than mere acquiescence on |

the part of the defense in the routine followed, indeed ex- | 3

press and gratified approval. The gratification. was: under-

standable in that unless the court’s open statements were to:

be belied by: ‘its clandestine. contrary conduct, -which it, was-

imprudent enough to have recorded by: a. clerk and court

reporter for appellate court: review, the. ‘court had mani-

fested an attitude, most liberal toward disclosure.

‘The two questions put by the defense | attorney | to Mr.

Ruby and . his —: were these (Tr. 3303] > :

Sete ee

E : | Appendia B—Opinion by Roslin, us. spy. | hi

3

Q, Were you in Chambers with Judge) Rosli

. to. indicate ‘to the Court which of the: portions in 2 7

you found objectionable to turning, over to se

~ Yes. * | 3

Q. And how long were ‘you with the J daa’ Y Wee

I ‘think were were there on. two occasions, the nd ee

time I would say about 45 minutes and the js Pay ie

alf.

time, it must have been Rothape an. 7 and a

After some. further brief golloguy between the. court ts

Mr. _Ruby,. Mr. Lefkowitz now and for the first time noted

his: objection that the presence in camera of Mr. Ruby with-

- out’ both- defendant and counsel likewise in attentlance was

legally impermissible. Counsel did not follow the overruling

of his objection with a motion for a mistrial, but abandon- .

ing the [3859] § 3500 interrogation, entered at once upon a

the cross-examination of Mr. Masetti as part, of. the trial

proper. fee

A judge, sitting as the trier of the facts is. assumed. to

have disregarded, unless his decision of the case affirma:

' tively demonstrates the contrary, illegal evidence and ex- .

traneous considerations. So that there can be no question

that this court has honored the precept. implicit in such

okgérvation, the court gives such assurance. Of greater con-

cern to defendant, surely, is the fact that with defendant —

waiving a jury the court’s mere perusal of the sealed Ex-

hibit 287 required in the performatice of its duty ‘under

-§ 3500 brought to its attention matter which if the court

iled to omit it from its consideration would be highly . ”

: prejudicial to the defendant. This matter, too, the-court —

represents it has for the purposes of its’role.as trier of the ‘

facts relegated to the lumberroom reserved for matteré that

: Lb ae r a ey ™- :

Z ’

a)

A-70

.

Appendia B—Opinion by Rosling, U.S.D.J.

|

never happened. ‘Some note will be taken in a later division

of this opinion under an appropriately descriptive caption

. ‘of the content of Exhibit 287. Immediately, however, our .

attention is turned to a consideration of the post-trial mo-

oN tion for a mistrial and its link with the fourth Persico trial

and the appeal there!n then still undecided. ‘

Derenpant’s Morton FoR A Misrrian First MADE In ITs

Post-Tr1aL Memoranpum (P. 24) Anp ITs RELATIONSHIP |

To Unrrep States v. PErsico,

Mr. Lefkowitz’s cross- examination of Mr. Masetti. [3860]

occupies pages 3309 through 3435 of the. Transcript. Not .

once did he in the course of such interrogation refer to the

in camera Exhibit 287 or indicate that he had used it in

preparation forthe Masetti questioning. A fortiori, ,he

made no inquiry as to the contents of the numerous unan-

nexed documents of which it provided ah index, nor‘ealled

for their production. Nor did he seek enlightenment as to

the nature of the inquisition which the government: repre-

_sentatives had directed to the large number of individuals

whose names alone were catalogued in the document. Nor

did he probe as to.the contents of the statements, whether

| signed or merely interview reports, which according to gov-

ernment practice must have existed. He could have called

for their production, without obligation to introduce them

after his ex parte study of their contents, but did not do so.

At the cindiiion of the prosecution’ 8 case which followed

Mr. ‘Masetti’s brief redirect examination by Mr. Ruby—

(there was no recross)—the government rested.

‘

ne

.

——_ eee oe tne «

AT1

¢ : ‘ . aie .

Appendix B—Opinion by Rosling,U.S.D.J.

The following day, March 2, defendant made a number of

motions, none of which remotely had reference to his ob- |

jection to the Masetti § 3500 procedure, antl when these were

all denied, absolutely or with qualification, he.too rested.

(Tr. 3469] Defendant’s counsel thereupon renewed all mo-

tions made by him at the’prosecution’s close and an addi-

tional motion for a judgment of acquittal. Decisioti was

“¥eserved by the court pending submission of briefs and pos-

. sible oral argument. [3861] No motion for a mistrial on

any ground had been urged, nor did the court leave open

———the opportunity to so move. [Tr. 3470-3486]

It is in defendant’s post-trial brief ( page 22) that we first

find ‘a motion for mistrial grounded on the § 3500 irregular-

ity. He had not: found, the attorney acknowledges, ‘any

decisional authority neerning such private in camera

(sic)**practice. However, we are informed by Mr. Lefko-

witz, ‘‘that this same oy is presently awaiting decision

by the United States Coutt of Appeals for the Second Cir-

cuit in United States v. Persico, et al.’’

. Professing to find a grave potentiality of prejudice to a

endant in the procedure adopted, counsel proposes as an

Iternative (brief.p. 23), ‘‘that if a Court feels the need of

some kind of clerical assistance from the prosecutor in

screening the ‘3500’ material, the Court on its own proper

judicial initiative ori invite defense counsel to be present

*Black’s Law Dictionary , Fourth Edition, defines. “In camera”

me Md “In chambers ; amber in private # * 8. Webster's Third New Inter-

; ed (1961) gives as the meanings

of the phiweer te “1, in the j 's chamber [the trial was held in

camera.|, 2. in privaté: PrivaTety, Secretty,” [Italicized -

matter in original is here underscored ; <apitals here also in

A-72

oF

Appendia B—Opinion by Rostng, U.S.D.J.

under proper,safeguards to insure that. the defense should -

not learn the contents of ‘3500’ materials to which the court

might [3862] find the defense unentitled.”? (underscoring

supplied as indicating the fundamental and as yet unre-

solved antinomy which has confronted the courts for gener-

ations in dealing with the conundrum of how to inquire

wiien the ultimate ruling is to be ‘‘you need not disclose. ”)

(See infra, p. 97.)

Finally and again without citation of authority which the

court might find useful or enlightening, defendant’s brief

argues, that the procedure reprehended ‘‘would seem to

work a clear violation of the Sixth Amendment’s right. of

confrontation * * *’? and a ‘‘denial of the due process right

of fair trial by a fair and impartial tribunal.’’

PERsIco DECISION .

Persico and his codefendants were charged with a single

incident of highjacking. They were tried four times. The

first trial (Mishler, J.) ended in a disagreement of the jury

as to all six defendants on 5/13/61; and the second

(Abruzzo, J.) ina conviction on 6/19/61 of five on both the

substantive and conspiracy counts, and of the sixth, La

Fante, on conspiracy alone. The Court of Appeals reversed,

305 F. 2d 534 (7/13/62) largely because the trial. judge had

kept too tight a rein on defendant’s cross-examination of

Vaccaro, the prosecution’s ‘‘uncorroborated’’ and . thor-

oughly villainous witness, who had turned states evidence

‘When facing endless years of imprisonment for his own mis-

deeds. : |

.

Se eS SOL Cen ane

_ A78

\Appendiz B—Opinion by Rosling, U.S.D.J.°

[3863]. For the third trial, only five of the defendants

.were able to answer ‘‘present’’, the sixth defendant, Mag-

nasco, having met his end by unfriendly hands on 6/16/61.

_ Nor was this untoward event unique in this series of trials.

Although Judge Bruchhausen on 5/7/63 began the third ©

trial with all five surviving defendants facing the jury, on

Monday, May 20, summations having been completed the

preceding Friday and with the judge about. to charge the

jury, it appeared the defendant Persico was absent and

indisposed. Over the weekend he had been the target of

five bullets fired.from the gun of one whose aim was poorer

than his intent. All five bullets had, indeed, found their

mark, but miraculously Persico continued among the living,

although his guardian angel had -been less. considerate of

- his companion ofthe moment, not a defendant here charged.

A mistrial as to three of the defendants was thereupon

applied for them by their attorneys, and perforce was |

granted. The other two, McIntosh and La Fante, ignoring

a spate of weekend publicity—none of it unduly flattering

to the defendants—wanted no mistrial and insisted on hav- »

. ing their cause. submitted to the jury. By not taking the

stand in that trial they had been shielded from exposure to .

questioning as to the unhelpful matters thus publicized,

and other data which could never have. béen a proper matter

for jury’ consideration. A second time a jury trying them

disagreed.

The fourth trial was presided over by the writer: All

__ five defendants were on hand for its commencement on

1/6/64 and also at its close [3864] three and a half months’

later when on 4/25 the jury after no lengthy deliberation

reported its verdict of guilt as charged. I

f

A-74

Appendia B—Opinion by, Rosling, U.S.D.J.

In. the fourth trial some. thirteen fhousand pages of testi-

mony and colloguy, most of the latter with the jury ex-

cluded, were recorded. Mr. Lefkowitz who appears here '

for Mr. Schipani represented Albanese, one of Persico’s

co-defendants, upon that trial. The experience must have

been a harrowing one for him, as he was not only unpaid

assigned counsel (by Mishler, J.) caught inthe nightmare

of an anticipated two weeks engagement that dragged on

instead for months, buat also by reason of his falling ill of

an excruciatingly painful and embarrassing ailment, de-

' spite all of which he carried on courageously. His current

representation is, more profitably and deservedly, as re-

tained counsel. ~

The testimony ‘of Vaccaro alone, the opening witness in

the fourth trial, consumed nineteen court days and Om-

prises, with its interminable colloquy of court and counsel,

over four thousand pages of minutes. It was at the conclu-

sion of Vaccaro’s direct examination. that an in camera

proceeding, which served as an exemplar for the one here

criticized, was conducted. The procedure was disclosed and

apparent to all defense counsel, including Mr. Lefkowitz, ’

before it took place. It was fully reported by the clerk and

‘ eourt reporter who were in obvious attendances following

prior announcement in open court to such effect.

[3865] The Persico record’ comprises approximately

10,000 pages of transcript of the trial proper plus perhaps |

an additional 3,000 pages of untranscribed. minutes of ex-

tended argument at the outset in relation to applications by

defense for a continuance by reason of ‘‘prejudicial publi-

city,” for severance, ete, and voir dire upon the selection

a daw dna

A-75 - 34

Appendia B—Opinion by Rosling, U.S.D.J.

of the jury. Innumerable motions for a mistrial were made

‘by defense counsel, and thousands of objections interposed

by them to rulings madé by the court, actual or merély

feared. Not once, however, was an objection noted or mo-

tion for mistrial made by any defense attorney with respect

to the §'3500 procedure which the court adopted and which

in a similar context Mr. Lefkowitz now cites as justifying

. . @mistrial, —

Upon the Persico appeal, four attorneys represented the

five defendants. Mr. Lefkowitz had upon his request been

relieved from his assignment as attorney for the indigent

Albanese, and Mrs. Wolff, assigned counsel for the defen-

_ dant Spero, had graciously agreed to represent the defen-

» dant Albanese ag well as her original client. In such appeal

, ‘Mrs. Wolff so much as mentioned the subject of the

~ “§ 38500 procedure in her appellant’s brief. The thrust of her

__ position was:that the defendant Spero had been prejudiced

| e court’s ‘‘clandestine meetings” with government

counsel, but she indicated quite clearly by her transcript

references that. what she was animadverting upon were

certain conferences [3866] between the court and the U.S.

Attorney relating to jury security in the trial and not the

§ 3500 procedure. These were announced in open court, but

from them the defendants and their lawyers were, under-

‘ standably in light of what follows, excluded. For early in

the trial, before the jury had been selected, the prosecution

had vigorously charged upon the record that the juries

which had disagreed in: the first and third trials’ had been

tampéred with, and that efforts were on foot to fix the

fourth jury as well. The assassination of Vaccaro, it was

alleged, was also being plotted. zi op

' A-76. .

Appendix B—Opinion by Rosling,-U.S.D.J.

Defense counsels’ unwillingness to include as basis for

their innumerable objections and motions for mistrial in

Persico the court’s § 3500 in camera procedures was sen- -

sibly motivated, as it is.in the ciirrent case. For as soon as

Vaccaro had concluded his direct examination the prosecu-

tor proceeded t@have marked for identification and to turn

, over to the defendants’ attorneys all the 3500 material, but

| “no more than that, which they had received at at _the same

juncture during’ each of the first _three trials. The three

judges who had Severally presided at such trials and the

= | Court of ‘Appeals i in its review of the judgment of conviction

- \ upon the second trial. had presumably found the delivery -

“in the respective trials an adequate compliance with the

requirements of the Jencks Act. An inviting prospect, how- .

ever, now upon the fourth trial lay open to the attorneys ©

-- to get more—much more.’ The only [3867] condition which

‘ confronted them was to persuade the court that no one

would be murdered in consequence of what was additionally

to be disclosed, and to enable the.court to satisfy itself that

it was not, by reason of its unfamiliarity with the details

of the far-ranging highjacking investigation other than the

one for which they were being tried, compelling the govern-

ment to digglose what it was in the. public interest to with-

hold. |

The reversal of the conviction on the fourth trial was, as

the opinion declared, solely for errors committed by the .

court in an overlong:charge. The majority opinion of the

- Court of Appeals“ * was express in its view that as to the .

‘numerous: points raised on the appeal’’ other than those

thus noted as error ‘‘neither individually nor in their total-

ity do they constitute grounds for reversal.” *

, ;

os

ATT

| Appendiz B—Opinion by Rosling, OSDJI..- .

The disposition of Mrs.’ Wolff ’s point which touched the

in camera proceedings was couched: in the following lan-

guage:

“Defendants make complaint about the in camera

proceedings conducted by the trial judge’ in connec-

tion with rulings on Jencks Act material (18 U.S.C.

§ 3500).. The Assistant United States Attorney was

_ present, but not defense counsel. A verbatim tran-

script of these proceedings was made and sealed

along with certain material which was not furnished

defense counsel. The court has read these transcripts

- . and finds that absolutely nothing untoward occurred

insofar as t fair trial of this case was concerned. -

_ However, the procedure followed was entirely un-

- necessary and violated ‘Canon 17 of. the Canons of

Judicial Ethics. We do not consider this a ground for

reversal, but it is adverted to solely to assure that:

such procedure is not followed in the future. In the

absence of some extraordinary circumstance all pro-

ceedings affecting the trial should be conducted in the

presence of counsel for both sides.’ )

[3868] How this brief paragraph is to be construed in its

relation to the current problem can be made clear only: by

further use of the Persico context as a frame of reference. .

"Had the Persico teaching been available in time for the

guidance of the court in the instant trial, it would have been ~

obedient to the injunction admonishing against repetition.

The consequence surely would have been the withholding of

fe |

far more than the miniscule fraction of Exhibit 287 which _ -

- Was excised.as not relevant on its face to the Masetti direet

examination. (See infra, pp. 77-79 for discussion and ex-

planation.)

A-78 .

Appendia B—Opinion by Rosling, U.S.D.J.

The Persico appeal Jencks Act stricture upon this court’s

procedure breaks down into the following elements

(1) A:verbatim transcript of the proceedings was sealed

‘by the court together with the excised matter and made

_ available for appellate review:

~ (2) ‘* Absolutely nothing untoward occurred”? in the ab-

sence of defendant and his counsel ‘insofar as the fair trial

of this case was concerned.’’

(3) The procedure was ‘entirely unnecessary.”’

(4) The procedure violated Canon 17 of the Canons of

Judicial Ethics. The canon, not quoted in the text of the

opinion, reads:

‘‘A judge should not permit private interviews,

arguments or communications designed to influence

his judicial action, where interests to be affected

thereby are not represented before [3869] him, except

"in cases where provision ta made hi law for ex parte

application.

. ‘While the conditions under which briefs of argu-

ment are to be received are largely matters of local.

rule or practice, he should not permit the contents of

such briefs presented to him to be concealed. from

opposing counsel. Ordinarily all communications of

. counsel to the judge intended or calculated to influ-

ones. action should be made known to opposing coun-

- sel.

(5) The Court of am did ‘not consider this a

ground for reversal.”’ a ,

A-79. :

Appendix B—Opinion by Rosling, U.8.D.d.

(6) The trial court to which the case was remanded for

a fifth trial was admonished not to follow the ex parte p prac-

tice in the future. a

_. (7) In the absence of some “extraordinary circumstance |

. all proceedings affecting the trial should be conducted in

the presence of counsel for both sides.”’

a (Underscoring supplied in items 65 and ug for more

'. eonyenient reference.)) =. + |

> . The word *‘this’’ in section 5 leaves the court in doubt as

to the precise referent. It is unclear whether what the

opinion teaches is that only a canon of ethics as distin-

guished from organic law was infringed and hence rever-

sible error was not committed, or whether the finding that *

_ the trial. was in any event fair was the controlling considera- —

tion.

The warning in Persico against repetition of action not- |

withstanding no ground for reversal. was found therein

presents an additional difficulty for this court in evaluating

- the éurrent defendant’s belated objection and. motion for a

[3870] mistrial, for the Persico text suggests that an ‘‘ex-.

traordinary circumstance’? might despite the canon cited

authorize the questioned procedure.

A-80°

laepaaaea B—Bpinion by Rosling U. 8. DJ.

<evhaceniaant oecmthes* CONSIDERED. rl

Jury Frxine, Murper anp Mayuem, Gane Wars, AND A

SWEEPING On-Goinc InvEsTIGATION BY THE FBI or

_ Numerous Hicusackrnes AS THE FRAME OF %

REFERENCE IN Persico FOR. THE Courts f .

§ _ In Cayenne PROCEDURE, ,

N one of the inateeds, for which the bidintte of this divi-

sion is not excéssive, appear to have been discussed in the _

- briefs submitted by the parties to the Court of Appeals i in *

PersicoAV. And yet they constituted, the jury being absent,

the subject of days and days of argument and colloquy with _ y

numerous supporting exhibits4* presented to this court,

during the period between January 6, 1964, when the trial

“began and January 20, the first trial date noted in the

transcribed portion of the record.’ Continuing freshets of

- Motion and argument, with additional exhibits, flooded the

proliferating record as the points thus preliminarily urged

were labored and renewed with unimaginable persistente

. of counsel. To undertake more than the most-cursory‘refer-__

ence to this essentially tangential factual background in a

prior. prosecution so that its bearing on a claim of prejudice

asserted by an attorney who appeared ‘as counsel in both

the earlier and the current suits may be assessed would

" serve no, useful purpose in‘ an opinfon. already much too |

"lengthy. othe following, =e [3871]. may be Macca in

such evaluation. :

As the first order of ealtieie upon the Pérsicd Iv trial, < =

four of the five counsel for defendants moved for a lengthy

cdntinuance, advancing in jubfification the claim that their

, hen ce cox | Asi er,

“ca Appendix B—Opinion jby Hosking, U. S.D.J. oe

_principals, chiefly Persico, tad but recently been the target

’ “of extensive newspaper, magazine and other publicity, none o

of it landatory. From the mountainous conglomeration of | ;

exhibits offered, we cull the following titles as typical of all: |

‘Revolt i in the Mafia,” a. book copyrighted 1963 with fre-:

‘quent references, passim, in context to Persico. The author

“ag we ate advised on the’ dustcover was one ‘‘Raymond Vv.

Martin, Assistant. Chief Inspector (Retired) in charge of .

Brooklyn South Detectives. * “Brooklyn South’’ is the

7 locale of the events examined into in the Persico trials.

Life. (Magazine) issue 8/30/63, Article entitled ‘* Mafia

Rubs Out'a Rebellion,’’ with accompanying photographs

_. of the dead and half dead, vividly bloodied and ecchymosed, :

Among these are, each in. a separate frame, two of the

defendants, the.one subtitled ‘‘Joe Magnasco, (Dead) ”” and...

_ the other “Carmine Persico, (Wounded). Te 33 4,

“Saturday Evening Post, Issye of 8/24-8/31, /63, Article

| entitled. ‘*My Life Inside the Mob”? by Sidney Slater with

Quentin. Reynolds. Impressive photographs accompany tlie

text, but none are those. of any of the defendants. Persico, f

[3872] however, is mentioned in the account, and not with am

intent to commend him;

New York Post, newspaper published 9/19/63, a full page

article -entitled, ‘‘The Loan. Shark Racket. ’ Only one

) Photograph illustrates the tract. It is Persico whose three |

‘quarter full face stares cold-eyed from the central column —

of print, half of which it eccupies. For easier identification

a subscript legend is provided. It reads: ‘ Carmine (Snake)

.Persico—His gang worked as oe a

A-82 |

Appendix B—Opinion by Rosling, U.S.D.J.

Sundry references in the New York Times, New York

Herald Tribune, the New York Daily News, and Newsday,

a daily serving Long Island, fill out the budget of the feature

writers to whom the libel laws do not geem to give pause.

_ The undersigned, presiding at the trial, might not avert j

his gaze. Compelled by the act of defendants’ attorneys he

read what was submitted that he might be able to rule upon

their application. Thus the court received a dossier in ad-

vance of, and.de hors, the trial testimony which no amount

of hugger mugger confabulation with tlie prosecution could

have further denigrated. The court denied the continuance

—six months—applied for. The life expectancy, it | ex-

plained, of persons interested was too uncertain.

The prosecution immediately countered witha sista of .

its.own to remand three of the defendants—two were al-

ready serving prison terms»and were in attendance only

This text is long and has been trimmed here. Open the source document for the complete record.