Appendix — Frohmann v. United States

ee ee ee rs

- Jacob J. Frohmann,

‘United States of America, -

oe pees.

APPENDIX A.

Opinion of the Court Below.

United States Court of Appeals

For the Eighth Circuit.

No. 18,576

) Appeal from the

United States Dis-

trict Court for the

‘ Eastern District of

Missonri.

Appellant,

v.

Appellee. |

[July 27, 1967.]

Before Voce., Chief Judge; and Buackmun and Heaney,

Circuit Judges. | a

BLackmun, Circuit Judge. ~

Jacob J. Frohmann, after a plea’ of not guilty, was tried

in July 1966 and convicted by a jury on both counts of a

two-count information charging him with violating 26

U.S. C., $7203 in willfully failing to make federal income

tax returns for the calendar years 1959. and 1960. Judge

Meredith imposed a sentence of one year on each count

and directed that the sentences be- served concurrently.

The defendant appeals. ; |

Reversible error is alleged with respect to the admis-

sion of evidence, comment by the trial judge, and the re- |

—

* jection of evidence proffered by the defense. There is

no claim that the evidence which was admitted was not

sufficient to support the verdict. ?

In the years in question Frohmann was engaged in the

business of developing and dealing in commercial real

estate in the Saint. Louis area. His federal income tax

returns for the calendar years 1958-64, inclusive, were all

_ delinquently filed. The 1958 return was filed in July 1962

after a revenue agent appeared on the scene. An amended

return for*that year and the returns for 1959-64, inclusive, |

were filed on December 11, 1965.

Frohmann does not deny that he had income sufficient to

require him to file returns for 1959 and 1960 or that he

failed to file those returns when they were due. He ad-

mitted this on direct examination.! He does deny that his

failure to file was willful or with any intent to deprive

the government of that to which it was entitled.

The defendant’s tax difficulties center in the develop-—

ment and sale of a shopping center in Saint Charles, Mis-

souri, dealings in options, the sale of an apartment, and

rental from a bank building. ~

The government produced witnesses who testified as to

the defendant’s business activities and the amounts he

received in various transactions. Some of these involved

“substantial figures. The government’s evidence tended to

show that the defendant’s 1959 gross income was $55,502.41

_ 1Q. Let’s go to the year 1959 and concerning the income tax

for that year, or take them both together, 1959 and ’60, can you

tell the jury, and I want you to consider your answer to this ques-

tion as best you recall, why you did not file the returns at the

_time that they were due for.those years? re

A.. Well, I knew that they must be filed, that they had to be .

Ss filed, but I didn’t, couldn’t do it in time. I just could not do it in

‘time. But then I did not know that I might be charged criminally

because of it. To me it was just something like a deed of trust or

note that you owe. I mean if you are past due, well you owe ©

additional interest. and so on, but I didn’t know that I would be ©

charged as a criminal; no. -

— $3

and his 1960 gross income was $36,522.50. The latter

figure contrasts with a gross of over $24,000.00 but -a

net loss of $50,362.63 asserted by. the defendant on his

_ 1960 return as delinquently filed. This difference is due

to variance in treatment of the apartment sale, and to a

rental loss asserted by the defendant on the bank building

but claimed by the government to be a corporate and not

an individual transaction. ap

Some emphasis is placed on the defendant’s background.

He testified:.He was born in Saint Louis in 1910. His

parents were European immigrants who were uneducated

and spoke little English. He attended school in this coun-:

try through the fourth grade and then was taken to Eurupe ©

and apprenticed in a dry goods store there for about five

years. He returned to Saint Louis and finished the fifth

_ grade.when he was 16° years old. His elementary educa-

tion was then discontinued and he went to barber school.

After barbering for a time he became interested in real

estate and, although he was never licensed, went to work

as.a salesman for real estate companies. In 1942 he

started to work for himself. He operated out-of his home

until 1955 and then took desk space at a real estate office.

_ There is testimony that the defendant has been sub-

_ stantially blind in one eye’ since childhood, has been deaf

in one ear since 1940, and has had cardiac disease since

1959. :

Mr. Frohmann kept no books. His only records a

papers relating to his real estate transactions.

A. The testimony of the witness Schneider and the

_. court’s refusal to grant a mistrial.

Edward. C.-Schneider, an attorney, was a witness called

by the government. He testified that in the summer of

1959 he was retained by the defendant to represent him

in connection with the acquisition of an. apartment house

a.

— Sha

corporation. There were negotiations with the attorney

for the seller as to the contents of the sale contract. The

transaction was closed in a title insurance company office.

_On direct examination of Mr. Schneider, the following took

‘ place:

Q. Now subsequent to the ad ae did you have a

conversation with Mr. Frohmann relative to the prop- —

erty, the profits on it? Would that be correct?

A. No. I might say this, well, I will clarify it. My

duty was at an end after I assigned the contract over

‘to Mr. James and Effie James.

Q. To Mr. James: and Effie James. ;

A. Then the closing end of the Jennings and West

Pine took place after we had consumniated. Now as

far as the profit was concerned in dollars and cents,

I would have no knowledge of that. —

Q. Did you have any conversation with him relative

to reporting that?

A. Well, I told him this: ‘I was very certain ——

Mr. Brown: Wait'a minute. I am going to object

- to any statement he may have made. In the first place, .

there is no chowing he was authorized to act in that

‘capacity, and if he was, he was his attorney. I think

counsel knows better than to ask a question like that.

At this point the jury was excused. At the bench the

government offered to prove that, aftér the witness had

completed’ his legal ‘services for the defendant. he con-

versed .with him and told him that, if he had gains from

these transactions, they should be reported and ‘“‘that he

had better get himself an accountant and find out what

had transpired’’.. After the noon recess the government

informed the court that it would not further pursue this

line of questioning. -The defense repeated its claim ‘of

_ privilege and moved for a mistrial. This motion was

overruled but the court stated, ‘If you desire any special

instruction at this time to the jury or later, I will give it’’.

of ae

Nowrequest for, an instruction was made and no further

question was asked of Mr. .‘Schneider.

The) defense claims that the quoted questions and an-

swers show that the defendant could only have received

advice from this attorney to report his profit and that this

was particularly prejudicial because it was the only direct

evidence of advice to the defendant as to the necessity of

filing a return and thus seriously affected his defense of

nonwillfulness. i :

We decide this issue against the defendant and do so

‘because we perceive no prejudice. As we have noted,

Frohmann himself testified'on his direct, examination, and

thus told'the jury, that he’knew that a return had to be

filed for 1959. Although this came later in the trial than

the Schneider testimony, no claim is made that it was oc-

¢asioned by that testimony or that Frohmann would not

have so testified if Schneider had not said what he did.

With the duty to file thus conceded, we fail to see how

advice from Schneider as to the necessity for filing—if

‘ Schneider’s answer can be regarded as stating that much—.

adds ‘anything at all. Furthermore, our decision is forti-

., fied by the failure of the defense-to proffer a curative in-

struction when the court offered to give one if it were

desired, and by our awareness that the allowance of a -

_ mistrial motion is a matter for the trial court’s discretion.

Evenson v. United States, 316 F. 2d 94, 95-96.(8 Cir. 1963) ;

Dolan v. United States, 218 F. 2d 454, 460 (8 Cir. 1955),

cert. den. 349 U. S. 923. Certainly we do not find here the

“clear and obvious abuse of a trial court’s discretion’’

which alone justifies reversal. Schaefer v. United States,

265 F. 2d 750, 753 (8 Cir. 1959), cert. den. 361 U. §, 844,

B. The testimony of Revenue Agent: Parker and the |

application of -the Escobedo and Miranda rules.

Agent Parker testified that, in connection with his ex-

. amination of the returns of ‘a person with whom the de-

Ma"

— 26—.

fendant had real estate transactions, he requisitioned the

defendant’s 3 return; that this request was not pro-

ductive; that he communicated with Frohmann and asked

him to present the check with which he had paid his 1959

tax; that the defendant: said he would do this but the

_ check was not forthcoming; that shortly thereafter a man

named Kuehn came:to Parker’s office and said he was an

attorney representing Frohmann; that on many occasions

in 1961 and in the first part of 1962 he asked the defendant

for records to determine his income; that no records were

produced; that in June or July of 1962 he went to Mr.

Kuehn’s residence and reviewed papers which the defend-

ant had there; that this was done with the defendant’s,

permission given to Mr. Kuehn; that in July Kuehn filed

‘the 1958 delinquent return ‘ for the defendant; that on:

August 16, 1962, there was a conference in the Internal

Revenue Service office attended by Kuehn, Frohmann,

Parker and Special Agent Stieferman; that Stieferman

‘there advised the defendant that he had a right not to

answer any question; that Frohmann- replied that he ‘‘did

not intend to use that. privilege, he would give us anything

we wanted’’; and, over objection, that the-defendant ‘stated

that his returns were not filed ‘because he didn’t have

the money to pay the tax. aid

It is the admission of this last response ’ which the de-

fense now “challenges. It is suggested that this is not

entirely consistent with the defendant’s own testimonial :

‘ statement, set forth in the footnote, supra, as to the rea-

sons for his delinquency. —

Although conceding that the defendant was not in cus-- _

tody at the time this statement was made, the defense

advances the principles of Escobedo v. Illinois, 378.U. S.

478 (1964), and of Miranda v. Arizona, 384 U: 8. 436

(1966), and claims that these have application to this 1962

internal revenue service conference at which a special

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agent was present and whose presence implied'a criminal

aspect to the investigation, |

The government asserts that the defendant concededly

was advised that he neéd not. speak; that, however, he

waived his right to remain silent; that, although he was °

' not warned of his right to counsel, this fact is of no con-

_ sequence because his own counsel, Kuehn, was present ;

and that, in any event, internal revenue agents in the

investigatory phase of a case, and prior to custody, have...

the right to make inquiry of a taxpayer without the for-

malities which Escobedo and Miranda may now require

' for custody situations. ;

-'In response the defense argues that, although Mr. °

Kuehn was a lawyer, he was over 80 years of age and the

record does not show that he was representing the de-

fendant in a legal capacity as contrasted with acting as an

accountant who prepared tax returns for him.

Whenever the quéstion has been presented to a court of

appeals, the court has refused to extend the Escobedo and

Miranda requirement for the rendition of advice as to the

right to counsel to the situation of a precustody internal .

~ revenue -service inquiry. Morgan v. United States, ...

.F, 2d .:., 67-1 USTC par. 9449 (1-Cir. 1967); Schlinsky

‘v. United States, ... F.2d ..., 67-2 USTC par. 9493 (1

Cir. 1967) ; Mathis v. United States, 376 F: 2d 595 (5 Cir. |

1967); United States v. Maius, ... F. 2d°+.., 67-2 USTC,

- . Par. 9521 (6 Cir. 1967) ; Kohatsu v. United States, 351 F.

2d 898 (9 Cir. 1965), cert. den. 384 U. 8, 1011; Rickey v.

United States, 360 F.2d 32 (9 Cir. 1966), cert. den. 385

U. 8. 835; Selinger v. Bigler, ... F. 2d ..., 67-1 USTC

par. 9420 (9 Cir. 1967), cert. applied for June 30,- 1967,

See United States v. Spomar, 339 F. 24 941 (7 Cir. 1964),

cert. den. 380 U. S. 975. The great majority of unap-

pealed district court cases in which the'question has arisen

“are to the same effect. Bohrod v. United States, 248 F. .

cr

va

en

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‘ Supp. 559, 564-66 (W. D. Wis. 1965); Smith v. United

States, 250 F. Supp. 803 (D. N. J. 1966); United States

v. Fiore, 258'F. Supp. 435 (W. D. Pa. 1966); United

States v. Hill, 260 F. Supp. 139 (S. D. Cal. 1966); United

States v. Carlson, .260.F. Supp. 423 (E. D. N. Y. 1966);

United States.v. Spinney, 264 F. Supp. 774 (D. Mass.

: 1966) ; Stern v. Robinson, 67-1 USTC par. 9295 (W. D.

Tenn. 1966) ; United States v. Gleason, 265 F. Supp. 880,

883 (S. D. N. Y. 1967) ; United States v. Neves, 67-1 USTC

par,.9412 (S. D. N.Y. 1967) ;. Umited. States v. Rabin, 67-1

USTC par. 9465 (S. D.N. Y. 1967). Cus

To the contrary, seemingly, are only United States v.

Turzynski, 67-2 USTC, par, 9489 (N. D. Ill. 1967) ; United

States v. Kingry, 674.USTC par. 9262, 19 AFTR 2d 762

(N..D. Fla. 1967); and Umited States v. Schoenburg, 67-1

USTC par.- 9393 (D. Ariz. 1965). See. United States v.

'- Harrison, 67-1 USTC par. 9222 (8. ‘DeN. -Y. 1967). But Mz.

Justice Douglas dissented from the denial of certiorari

in Thomas v. United States, 386 U. S: 975 (1967), with the

observation that, ‘‘This is not an in-custody case, but it is

a coercive examination of a taxpayer at a critical pre-

liminary hearing, so to speak, and the question presented

apparently is a recurring one’’.

All these cited cases have been decided since Escobedo

‘and many of them since Miranda. Their facts, of course,

vary. It is clear, however, i in a-number of them). that the —

internal revenue service review had reached the stage

where a special: or intelligence agent was in the. case ‘and |

was present at the conference.

“For us, the sundeatty authorities comprise an impressive

list and- we would be loathe to oppose them.

The present case, however, is not without its other

features and we may therefore regard the Escobedo-

Miranda issue, and the question of the extension of the

2»

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“‘custodial interrogation’’ language, .p. 444 of 384 U. S.,

' to noncustodial internal revenue service conferences, as

one not squarely presented to us here. —

_It is not disputed that Mr. Kuehn was a lawyer. Al-

though the record may not positively demonstrate that the

defendant retained him as an attorney, neither does it

positively demonstrate that the defendant retained him

only in a capacity other than jegal. Agent Parker ‘testi-

fied that Mr. Kuehn told him that he was the defendant’s

- lawyer. And-he did prepare the first 1958 return for the

‘ defendant. filed in July 1962 (as well ‘as his returns for

earlier years), He thus performed services which, in the -

delinquency atmosphere of this case, ‘certainly had legal

overtines. We feel:that the court could properly conclude

that Mr. Kuehn was acting in the capacity of attorney for

Mr. Frohmann at the time of the conference on August

16, 1962, when the challenged statement was made. Any

basis for a claim of deprival of advice as to the right to

counsel thus evaporates. We are not satisfied, either, that

this record shows that the investigation had attained what .

is to he described as the accusatory stage or that there _

is any significantly apparent inconsistency in the defend-

ant’s testimony. |

A

4

7

In summary, the factual situation here falls far short of

‘what has been determined to be of constitutional magni-

tude in Escobedo and Miranda and which was persuasive

upon the’ Supreme Court in those cases.

C. Comments by the court.

The comments by the court, which the defense claims

‘ were influential upon the jury and prejudicial, were made

during the examination of witness Lewis A. Mueller, a

certified public accountant employed by the defendant to

prepare his delinquent returns. Mr. Mueller was hired, at

the suggestion of counsel, in late 1963 to set up the records

for a shopping center. He became aware of the defend-

ant’s personal income tax problems in early 1965. On

direct examination Mr. Mueller was-questioned about the

difficulties he incurred in getting detailed information for

the preparation of the returns and about the incomplete

and uninformative nature of the initial 1958 return pre- *

pared by Mr. Kuehn and filed in 1962.’ The court indicated

general agreement with government objections that what

happened in 1965 or in 1962 was not material to the i issye |

and that the year 1958 was not the subject of charges

against the defendant and, on occasion, itself asked ques-

tions of the witness.

The defense complaint here is that the trial court es

onstrated impatience to. get Mr. Mueller off the stand, in-

dicated that it thought his testimony to be of little im-

_ portance, and, by its‘ own questions, showed that it

considered the defendant’s failure to obtain assistance or

an extension of time for filing as indicative of willfulness.

No objection based on the court’s demeanor or alleged

influence was made during the trial. In its,instructions

-the court told the jury that it meant to express no opinion

and that it was for the jury and not the court to determine

~ facts:

We have carefully read witnesses Mueller’s entire ex-

amination and we do not at all agree with the defense’s

‘characterization of the trial court’s actions. For the most

part, the information elicited front the witness eventually

came in anyway. It may be that one engaged in the de-.

fense of the suit, might find himself inclined to believe

that the court is becoming impafient. We find nothing

here, however, which is any different from what takes

place in any lawsuit where the trial judge has ruled as to

the limits of testimony and is consistently confining counsel

to those limits. The court, it seems to us, was doing ’ no

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more than maintaining @ normal and fairly tight rein on

a tax case in order to keep it moving along and to prevent

_its being bogged down in. statistical detail of questionable.

pertinency upon ‘the real issue, namely, the defendant’s _

state of mind as to the filing of returns for 1959 and 1960

when they were due. ; .

There is nothing here which can be characterized as

abusive or unfair or which approaches plein error as‘con-

templated by Rule 52 (b), Fed. R. Crim. P.

D. The exclusion of evidence offered by the defense.

This was of three types: (1) the files of three state

court cases (in one of which defendant had counsel of .

to the benefit of a net loss carryback, under $172 of the

Internal Revenue Code of 1954, as amended, 26 U. §. C.,

$172, to-prior tax years, a benefit which the defendant

by his failure to file did not claim, ‘and (3) the délay of

the Internal Revenue Service for more than a year in

furnishing a duly requested Form 899 for the defendant.

This form is a record of a tdxpayer’s returns, assessments

and payments. It was eventually produced here only 11

days prior to trial. The defense asserts that the evidence

in the first two categories ténded to show the defendant’s

incapacity and an absence of willfulness on his part, and

' that the evidence in the third category demonstrated that

. the government does not adhere to its own standards, and .

tended to impeach the testimony of revenue agents who

said they had no bias against the defendant,

We perceive no prejudicial error. The delay in the

furnishing of Form 899 has no bearing, apparent to us,

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upon the issue of willfulness and we see no prejudice, nor

is any claimed, in the delay. The defense had the form

and the information it disclosed for several days prior to

trial. The state court files and the Mueiler computations

_ perhaps could -have been admitted, but there are limits to

what may be considered as reasonably connected. This

type of matérial, in our view, clearly falls within the broad

area of the trial court’s discretion as to materiality , or

relevancy. ‘See Cotton v. United States, 361 F. 2d 673, 676

(8 Cir. 1966) ; Clark v. United States, 211 F. 2d 100, 105

(8 Cir. 1954), cert. den. 348 U. S. 911; Wilson v. United

States, 250 F. 2d 312, 325-26. (9 Cir. 1957). We find no

abuse in the court’s rejection of the evidence on the ground

of remoteness and irrelevancy and, indeed, we agree with

the court’s rulings.

We do not hesitate to say in conclusion that this case

strikes us as a weak one for the defense. It is easy to

understand why a jury, itself composed of taxpayers,

would not be persuaded by the explanation for nonifiling

which Mr. Frohmann offered. The case is reminiscent of .

Sansone v. United States, 334 F. 2d 287 (8 Cir. 1964), aff'd. ”

380 U. S. 343-(1965). It has, of course, its tragic aspects,

as most income tax criminal cases do, but we are not pre-

pared to say that this recora discloses or éven intimates

that it was tainted with prejudicial error.

_ Affirmed.

A true copy.

Attest: ;

Clerk, U. S. Court of Agpesle, Eighth. Circuit.

‘ # aerial

— 33 —

Crim. -

- Judgment. 7

(Filed July 27, 1967, Robert C. Tucker, Clerk.)

bs _ United States Court of Appeals —

. for the Kighth Circuit.

: No. 18576. September Term, 1966.

- Jacob d, Frohmann, Appellant,

ee

United States of America.

Appeal From the United States District Court for the -

Eastern District of Missouri.

This Cause came -on to be heard on the record from

the United’ States District Court for the Eastern District

‘ of Missouri and was argued by counsel.

On Consideration Whereof, it is now here ordered and

adjudged by this Court, that the judgment and sentence

‘of the said District Court, in this cause, be, and the

same is hereby, affirmed.

_ And it is further Ordered by this Court that the de-

fendant in the said District Court, Jacob J. Frohmann,

- do surrender himself to the custody of the United States .

Marshal for the Eastern District of Missouri, if not now -

in custody, in execution of the judgment and sentence

imposed upon him, within thirty days from and after

date of filing of the mandate of this Court in the District

Court.

A

- Order entered in accordance with opinion.

_ Clerk, U. S. Court of Appeals, 8th Circuit.

—_34—

_ APPENDIX B.

Order Denying Petition for Rehearing Below.

United States Court of Appeals

for the Highth Circuit. ~

' No. 18576.

a

Jacob J. Frohmann, Appeal from the United.

' Appellant, : ' States District Court

for the Eastern Dis-

trict’ of Missouri.

vs.

United States of America. 7

Petition of appellant for rehearing filed in this cause

having been considered, ‘it is now here ordered by this

Court that the same be, and it is hereby, denied.

August 24, 1967.

“nm

mine

APPENDIX ©.

Summary of Petitioner’s Exhibits Rejected.

Defendant’s Exhibit C. | ne |

Official Court file of the St. Louis County, Missouri,

Cireuit Court, Cause No. 257799 styled Laclede Gas Com-

pany v. Jacob J. Frohmann.. . |

Suit on a note for $3,000.00 plus interest and attorney’s -

fees filed January 9, 1964 with personal service. Although

previously notified by letter of plaintiff’s attorney, a

default judgment was entered on October 6, 1964 against _

defendant for $3,000.00 plus 10% attorney’s fees, interest —

an! and costs.

-Defendant ’s Exhibit D.

‘Official Court file of the St. Louis County, Missouri,

Circuit Court No. 50821. B. J. Investment Company, - Ine.

v. Jacob J. Frohmann, and others. .

. Suit on deficiency on secured note dated March 31;

1960. Suit for. $28,751.65 plus interest. Filed June 21,

1962 with personal service. The file reflects one default

and inquiry against defendant October 21, 1962, later

‘vacated when defendant (petitioner) obtained a lawyer.

Subsequently, on March 30, 1964 a Summary judgment —

was granted against defendant, Frohmann, who. failed ‘to

appear in person or by attorney, such judgment being in

’ the amount of $33,517.22. . aoe

Defendant’s Exhibit E.

Official Court file of the St. Louis County, Missouri,

Circuit Court No. 249501, Rathert, et al. v. Jacob J:

Frohmann, et, al.

Suit in four counts on separate agreements in the

- amounts of $21,500.00, $4,670.00, $3,000.00 and $833.34,

Lx Pins

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respectively. Suit was filed October 10, 1962. The file

shows that since defendant entered no appearance, a de-

fault ‘and, inquiry was granted November 23, 1962, al-—

though the final inquiry was continued from time to time

with defendant being notified by letter of plaintiff’s

’ attorney of setting. On September 10, 1963 attorneys en-—

tered their appearance for defendant. The file shows a’

copy of a letter from defendant’s attorneys in March,

1964 to defendant advising they would withdraw since

defendant had not communicated with them. On October

- 16, 1964 defendant’s counsel did withdraw. |

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