Petition for Writ of Certiorari — Robson v. United States

Supreme Court “f the ia

October Term, 1974

No. A-312

WALTER C. ROBSON, Petitioner

Vv.

UNITED STATES OF AMERICA, Respondent

Petition For A Writ of Certiorari

To The United States Court of Appeals

For The Ninth Circuit

CLYDE R. MAXWELL

Attorney at Law

Suite 204

567 San Nicolas Drive

Newport Beach, California 92660

(714) 644-5232

J. GALLAGHER — PRINTED BRIEFS

(714) 547-6073

~

<=

TABLE OF CONTENTS

Page

ee ee ee 1

TEE CET TCC ET EET 1

SOAS ear ee eee 2

QUESTIONS PRESENTED ................... 2

STATUTES, FEDERAL RULES, AND

REGULATIONS INVOLVED ................ 6

STATEMENT AND REASONS FOR

GRANTING THE WRIT 7

ee ee oy eo ke ee oe oe ee ee ie

I os SV enka’: hb aw Oa wee Ke oe 24

TABLE OF AUTHORITIES

Page

Aidermanv. U. S., 394 U.S. 165 (1969) 1s) 26

Barns v. U. S., 412 U.S. 837 (197 ) 9

Deutsch v. U. S.. 367 U.S. 456. 471 (1961) 22

Holland v. U. S., 348 U.S. 121 (1954) 3.4.8.9.10.11.

14.19.20.23

Irvin v. Dowd. 366 U.S. 717. 729 (1961) 23

Jchnsor v Bennett, 393 U-S. 253 (1968) 22

Leary v. U. S.. 395 U.S. 6 (1969) 3.10.11.23

Sansone v. U. S., 380 U.S. 343. 351 (1965) 8

Sinclair v. Bennett. 398 F. 2d 111 (CA 8. 1968) 23

Stump v. Bennett, 398 F 2d 111 (CA 8. 1968) 22.23

Tot v. United States, 319 U.S. 463 (1943) 9

Wardius v. Oregon,

412 U.S. 470 (1973) 4.20.21 ,22,23

Watkins v. U. S.* 367 U.S. 456, 471 (1961) 22

Watkine vU. S.. 354 U.S. 178. 208 (1957) 22

Williams v. Fiorida, 399 U.S. 78 (1970) 20,21

Winship. In re, 397 U.S. 358 (1970) 8

SUPREME COURT

OF THE UNITED STATES

OCTOBER TERM, 1974

WALTER C. ROBSON, Petitioner

Vv.

UNITED STATES OF AMERICA , Respondent

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

The Petitioner, Waiter C. Robson, respectfully

prays that a Writ of Certiorari issue to review the

Judgment and Opinion of the United States Court

of Appeals for the Ninth Circuit affirming Peti-

tioner’s conviction on one count of income tax

evasion as to the year 1966 under Section 7201 of

Title 26, United States Code, on September 3,

1974. Petition for Rehearing and Suggestion of

Hearing in Banc was denied October 1, 1974.

OPINION BELOW

Tne Opinion and the Order of that Court

Denying Petition for Rehearing of the United States

Court of Appeals appears in Appendix | hereto.

ot.

JURISDICTION

The Opinion affirming judgment was entered

on September 3, 1974, and denial of Petition for

Rehearing and Suggestion of Hearing in Banc was

entered on October 1, 1974. Issuance of Mandate

was stayed until October 31, 1974, on October 14,

1974.

Pursuant to petitioner's application for an

extension of time within which to file a petition for

a writ of certiorari, on October 22, 1974, this Court,

by the Honorable W. O. Douglas, Associate

Justice of the Supreme Court of the United States,

made its order extending time to file petition for

writ of certiorari to and including November 30,

1974.

Jurisdiction of this Court is invoked under

Sec. 1254 of Title 28, U.S. Code.

QUESTIONS PRESENTED

1. Petitioner was charged with income tax

evasion (26 USC Section 7201) for eacti of the years

1965. 1966 and 1967. Trial was had before the

Honorable Warren J. Ferguson, United States

District Court Judge for the Central District of

California. Petitioner was convicted for the year

1966 and acquitted as to the years 1965 and 1967.

Tne net worth method of proof of unreported

-2-

income was used. No specific items of unreported

income were shown. “Leads” consisting of the

Statements and names of three third party

witnesses, as to the possession and source of a

sizable cash hoard prior to the years in question

were furnished to the investigators under the

doctrine of Holland v. United States, 348 U.S. 121

(1954). Investigation of these principal “leads” was

withdrawn from the agents and these witnesses

were interrogated by the Grand Jury immediately

prior to indictment. Grand Jury transcripts were

denied to the Petitio..e’, so he was unable to show

during the government's case-in-chief that the

specific leads from these witnesses had not been

rebutted, since they were not called by the

prosecution.

Petitioner believes that the questions pre-

sented by the above fact are:

1. May the trier of the fact presumptively

eqiiate income with proof of increase in a

taxpayers net worth under the principles laid

down in Holland v. United States 348 U.S 121

(1954) in the light of this Court's decision in Leary

v. United States 395 U.S. 6 (1969) in which it was

held that a presumption is arbitrary and violative of

due process “unless it can at least be said with

3.

supstantial assurance that the presumed fact 1s

more likely than not to flow from the proved fact

upon which it is made to depend” Idem. 395 U-S. 6.

36?

2 Was the Petitioner deprived of his consti-

tutional guarantees to the presumption of inno-

cence, fair trial, and assistance of counsel by the

failure of the government to call in its case-in-chief

the three witnesses whose names and written

statements were furnished by the Petitioner to the

investigators as “leads” under Holland v. United

States 348 U.S. 121 (1954) which action would have

granted the defendant the right to cross-examine

them with the correlative right of gaining full

access to their Grand Jury testimony and which

effectively shifted the burden of proof to Petitioner

as to unreported income. so that the Petitioner

could not establish failure of the government to

rebut these leads and was forced to take the stand

in his own defense. which action led to Petitioner's

conviction?

3. Is the Petitioner denied due process under

the rationale of Wardius v. Oregon, 412 U.S. 470

(1973). where the Petitioner turns over evidentiary

leads before trial under the Holland doctrine and

thereafter is denied reciprocal discovery of the

-4-

grand jury testimony of these witnesses?

STATUTES. FEDERAL RULES, AND

REGULATIONS INVOLVED

Eft Amendment to the Constitution of the

Un'ted States.

Sixth Amendment to the Constitution of the

United States.

Title 26 USC § 7201.

Rule 29, Federal Rules of Criminal Procedure.

(Al! set forth in Appendix II)

STATEMENT AND REASONS FOR

GRANTING THE WRIT

The defendant was charged with violations in

three counts of Title 21, Section 7201--wilful

evasion of income tax for the years 1965. 1966 and

1967.

The government = prosecution as to each of

the three counts proceeded by way of the net worth

theory of proof. That theory in simple terms was

pursued as follows: :

~~“ .a) For each of the three taxable years. the

government attempted to show that the defen-

dant’s net worth had substantially increased:

(b) Each of the aforesaid increases were

attributable to taxable income:

(c) The increases in the defendant's net worth

for each of the three taxable years in question were

not reported in the defendant's income tax returns

and such failures to repert constituted wilful acts

of tax evasion.

The prosecution's probative jump from proof

of (a) increase in net worth to proof cf both (b)

attribution of such increase to taxable income and

(c) wilfulness in the failure to report such increase

iS a presumptive one. All, then. that the

B 3

prosecution must prove as to each count is an

increase in the taxpayer's net worth and the

required proof of income and wilful failure to report

such income will necessarily follow. It is this

double-barreled presumption from proof of an

increase in net worth that the defendant contends.

in the context of the facts of this case. deprived

him of his several constitutional guarantees.

There can be no question but that dué process

protects an accused in a criminal prosecution

against conviction “except upon proof beyond a

reascnad'2 doubt of every fact necessary to

constitute the crime with which he is charged.” In

re Winship. 397 U.S. 358. (1970) (emphasis added).

With regard to the charges against petitioner

Robso” that protection required. at the least. proof

tnat for each of the years in question there existed

income that the taxpayer failed to report. One need

go no further than the statute itself that Robson

was alleged to have violated to ascertain that procf

of unreported income is an essential element of the

offense 26 U.S.C., § 7201: Sansone v. United

States. 380 U.S. 343, 351 (1965). The government

would reiy on this court's ruling in Holland v.

United States. 348 U.S. 121 (1954) for the support

nec: --y to conclude that it met its burden in the

f-

Instant Case.

The Holland case in general terms, with

specific restrictions which will be discussed later.

allows the trier of fact in a net worth tax evasion

Prosecution to presumptively make a finding of

income in certain instances where proof of

INCtease in the taxpayer's net worth is proved.

More significant, however. than the support

Whicn the government attempts to find in Holland

is the establishment of the Supreme Court of the

guidelines, since Holland, in allowing the govern-

ment’s use of presumptions to establish essential

elements of a crime. In the case of Barns v. United

States. 412 U.S. 837 (197 ). the Court warned that

“common law inferences. like their statutory

counterparts, must satisfy due process standards

i: the light of present day experience.” As €arly as

1943. the Supreme Court hag declared unconstitu-

tional a presumption of proof that a firearm had

beer shipped, transported or received by the

defendant from the Proof of possession by the

defer-dant--felon of the same firearm. Tot v. United

States 319 U.S. 463 (1943). The Court held that

Statutory presumption cannot be sus-

tained if there be no rational connection between

Ine fact proved and the fact presumed. if the

5.

inference of the one from proof of the other is

arbitrary because of lack of connection between

the two in common experience.” 219 J.S. at 467.

Then in Leary v. United States, 395 U S. 6 (1969)

this Cu urt held that a presumption must be struck

down as “irrational,” and therefore <«.rbitrary and

violative of due process “unless it can at least be

said with substantial assurance that the presumed

fact is more likely than not to flow from the proved

fact on which it is made to depend.” 395 U.S. at 36. °

To sustain the presumption in this case in the

face of such a Caveat would require a statement,

made with substantial assurance, that it is more

likely than not that an increase in a taxpayer's net

worth is attributable to taxable income and that

failure to report such income was wilful.

The Holland Court spoke directly to this point in

noting that “the method required assumptions,

among which is the equation of unexpiained

increases in net worth with unreported taxable

income. It may be that gifts, inheritances, loans

and the like account for the newly acquired

wealth.” 348 U.S. at 127.

The petitioner submits that the plain sense of

this Court's own words must lead one to conclude

that it as likely as not that an increase in one’s

-10-

that an increase in one’s assets may be attributable

as equally to gifts, inheritances or loans as it may

he attributable to taxable income. While one may

be able to say that an increase in net worth may as

easily result from taxable income as from gifts,

inheritances or loans. it cannot be said with any

assurance that such an increase is more likely than

not to result from income. To state the Holland

Court's reasoning is to refute this Cour:’s later test

in Leary for a valid presumption.

It must be stressed at this point that the

Holland Court recognized that the assumption in

question “raises serious legal problems in the

administration of the cr:minal law and that the net

worth method is so fraught with Canger for the

innocent that the courts must Closely scrutinize its

use” 348 U.S. at 125-125. Read acainst its later

reasoning in Leary, trat type of SCrutiny today

must compel a finding that the presumption in

question is arbitrary and violative of due process.

Assuming arguendo the constitutional validity

of the previously discussed presumption, it may

not be employed where the government fails to

track down reasonable leads “which, if true would

establish the taxpayer's innocence.” 348 U.S at

136. Such as requirement. reasoned the Court. wil}

xo

hopefully eliminate the “dilemma, especially

serious in this type of case, of the accused's being

forced by the risk of an adverse verdict to come

forward to substantiate leads which he had

previously furnished the government.” 348 U.S. at

346.

It was the result of just this dilemma which

ultimately caused the defendant’s conviction in

this case. Petitioner Robson supplied ieads, they

were pursued; yet neither was he advised of the

results of that pursuit nor was evidence of the

results of those leads presented in the govern-

ment’s case-in-chief. Consequently, in order to

show the existence of a cash hoard, the petitioner

was forced to present such evidence on his own

behalf. As will be discussed further, he did just

that. Yet in so doing, the petitioner made a

misstatement which proved to be his undoing. Had

the prosecution been forced to unveil the evidence

in its case-in-chief gathered in pursuing leads

given by the petitioner, the petitioner would never

had been placed in the horns of this dilemma.

Sometime after the investigation of the

petitioner by the Internal Revenue Service in this

case began, he advised representatives of that

agency of a cash hoard somewhere between

-12-

$45.000 and $75.060 that he had accumulated

during the years preceding 1965. In 1970 and 1971.

he supplied the government with the names and

Statements from three individuals* whom he

Claimed would corroborate the existence of the

cash hoard. The Office of Regional Counsel of the

IRS requested the Intelligence Division to make a

field check on the leads Supplied by the petitioner.

Before the check could be accomplished, Regional

Counsel's Office withdrew its request. The

Statements of witnesses Morris and Pawluc are

attached as Appendix Ill so the court may see the

solidity of the information furnished (Exh Q, R,

186).

After subsequent referral of the case to the

Department of Justice, the Los Angeles United

States Attorney instituted a grand jury investiga-

tion and. in 1972. Subpoenaed and interrogated

each of the witnesses before the Grand jury

At the pre-trial Stage, the petitioner moved the

trial grout for production of the grand jury

testimony of the three witnesses. This was denied.

During the prosecution case. this motion was

again made. but, while the court conducted an in

camera inspection of the witnesses’ grand jury

“Robert Morris, William Willims. and Frank Pawluc.

43:

testimony, the motion for production was denied.

None of the witnesses was called by the

government in its case-in-chief. A motion for

judcment of accuittal was granted as to the first

count. relating to the 1965 tax year, but was denied

as to counts 2 and 3, dealing with the years 1966

and 1967. The petitioner himself testified and

called two of the three as witnesses in his defense.

It was only after the government attempted to

impeach one of the two with his grand jury

testimony that the defendant. for the first time,

was provided with a transcript of that witness’--and

only his--grand jury testimony.

In Holland, this Court, stressing that “failure

to investigate leads furnished by the taxpayer [in a

net worth case] might result in serious injustice”

required the following (348 U.S. at 135-136):

“When the government rests its case

solely on the approximations and Cir-

cumstantial inferences of a net worth

computation, the cogency of its

proof depends upon its effective

negation of reasonable explanations

by the taxpayer inconsistent with

guilt. Such refutation might fail when

the Government does not track down

-14-

relevant leads furnished by the tax-

payer--leads reasonably susceptible

of heing checked, which, if true,

woulda ectehlish the taxpayer's inno-

cence. When ‘he Government fails to

show an investigation into the val-

idity of such leads, the trial judge

may consider them as true and the

Government's case insufficient to go

to the jury.” (footnote omitted).

It is the petitioner's contention that the failure

of the government to call the three previously

identified individuals as witnesses in its casein-

chief, thereby granting the defendant the right to

cross-examine them with the correlative right of

gaining full access to their grand jury testimony

(see 18 U.S.C. § 3500) deprived him of his

constitutional guarantees to the presumption of

innocence, fair trial and assistance of counsel.

The full thrust of petitioner's claim requires an

understanding of the following factors:

(a) A net worth tax prosecution does not shift

the burden of proof. “The Government must stil!

prove every element of the offense beyond a

reasonable doubt though not to a mathematical

certainty. The settled standards of the criminal law

-15-

are applicable to net worth cases just as to.

prosecutions for other crimes. Once the Govern-

ment has established its case, the defendant

remains quiet at his peril.” 348 U.S. at 138-139.

(pb) An “essential condition in cases of this

type is the establishment, with reasonable

certainty. of an opening net worth, to serve as a

starting point from which to calculate future

increases in the taxpayer's assets. The importance

of accuracy in this figure is immediately apparent,

as the correctness of the result depends entirely

upon the inclusion in this sum of all assets on

hand at the outset.” 348 U.S. at 132.

(c) In attempting to prove with reasonable

certainty the petitioner's opening net worth, the

prosecution elicited testimony that petitioner had

cash on hand limited to $5,000 as of each of the

following dates: December 31, 1964, December 31,

1965. and December 31, 1966. (See PI. Ex. 183:

R.T. vol. 1X, p. 900).

(d) Had a reasonable doubt existed at the

conclusion of the prosecution's case with regard to

whether a substantial cash hoard had existed on

each of the three foregoing dates, the prosecution

would have failed in its burden of proof. (see (b)

above).

-16-

{¢) Following the testimony in the defense’s

case of the defendant and two of the three

witnesses who had been called before the grand

jury the trial court found as follows:

". . . | believe there was a cash

hoard. . Of course there was a

cash hoard. Of course Mr. Robson

had a lot of cash on hand: however

yOu want to describe cash on hand.

And | find, based upon the evidence,

that at the beginning of 1965 he had

$45,000. That was his testimony.

Beginning in 1966 he had $35,000.

Beginning in 1967 he had $35,000

and beginning January 1968 he had

$10,000.

Consequently, the court found the petitioner not

guilty as to Count 3 (1967) and guilty as to Count 2

(1966). The finding of guilty as to Count 2 was

based in the finding that he did not spend any of

his cash hoard in 1966 and therefore the cash hoard

that existed at the beginning of 1966 could not

account for the petitioner's increase in his 1966 net

worth.

The Court concluded :

. Those findings of fact | make

47.

without any doubt, any hesitation at

all.” (R.T. Vol. XVI, pp. 2119-2120].

The fair conclusion to be drawn from the

foregoing facts is that had the evidence presented

in the defendant’s case been cognizable as

evidence at the conclusion of the prosecution's

case-in-chief, the Court would have been compel-

led to grant the defendant's motion for judgment of

acquittal as to all three counts.

The failure of the government to present the

testimony of the three witnesses in its caseinchief

and allow defense counsel in cross-examination to

attempt to establish a reasonable doubt as to the

existence of acash hoard” subjected the defendant

to one of the many obstacles in convincing the jury

of the existence of such hoards” (348 U.S. at 127)

and to the risk of “lending support to the

Government's case by. . . losing the jury through

his apparent evasiveness.” Here the defendant

found the trial court, though his own testimony

laid the basis for a finding that he did not spend

any of the cash hoard in 1966--he failed to

overcome an obstacle which became the very basis

for his conviction.

*While one is left to speculate at this point. it appears that

such a doubt could have been shown at inis point in view of

the court's later finding, after all the evidence. that not only

might there have been acash hoard, but beyond a reasonable

doubt. such a cash hoard did exist

-18-

a

Te RN CHR at ade) Sa hae tS PLA AOE MEN AND

While the prospect of compelling the prose-

Culion to disclose the evidence of its pursuit of

leads may seem novel, it must be remembered that

this Court employed its Supervisory powers to

compel the very investigation of such leads in the

Holland case, a nove! concept at the time. Faced

with the dangers inherent in a net worth

prosecution the Court did not hesitate to state:

“This Court will formulate rules of

evidence and procedure to be applied

in federal prosecutions where it

appears necessary to maintain pro-

per standards for the enforcement of

the federal criminal law in the federal

courts.’ (Citations omitted) (348

U.S. at 136, fn. 7).

A similar procedure was required by this Court

in Alderman v. United States, 394 U.S. 165 (1969).

There the defendant had demanded pre-trial

discicsure of surveilance records. The Government

urged that records of specified conversations be

first submitted to the trial judge for in camera

examinations after which those records found

arguably relevant could be turned over to the

defendant. The Court rejected that argument,

holding that the records should be turned over to

-19-

POLL EL GS PEPE RLEP LEAP OIE IY EE EAE 8 AREA BR SII POLO COE: LIT EE CE WN Sage He tas et as na oO OC Supsesey SAR OS ey

:

7%

~

ici State RCRA,

ated Be

ao eee

De ne + he.

ERAS LA ALAR ARSE POA ORTON Dt

the defendant without court screening. The

holding was based on this Court’s recognition that

to follow the Government's urging would deprive

the defendant of being abie to detect the special

significance of evidence which one less well

acquainted would not be abie to detect. The

analogy to this case is clear. The trial court did

examine in camera the grand jury transcripts of the

testimony of the three witnesses where identity

had been given by the petitioner. The court in this

case was no douot as comparably unfamiliar with

nuances as the court would have been in

Alderman. One is left with the spectre here that

had the defendant been able to raise a reasonable

doubt through the testimony of the three

witnesses, the court would have found him not

guilty, and he would not have been forced to

subject himself to the obstacles envisioned in

Holland.

Wardius v. Oregon, 412 U.S. 470 (1973) held

that the due process clause of the Fourteenth

Amendment preciuded enforcement of a state

Statute requiring a defendant to give pre-trial

notice to the prosecution of his alibi defense and

alibi witnesses unless reciprocal discovery rights

were given to the defendant. Compare Williams v.

-20-

Florida, 399 U.S. 78 (1970) which upheld the

constitutionality of Florida’s “Notice of Alibi” rule

because of the reciprocity allowing the defendant

discovery of the prosecution's evidence relating to

alibi.

In this case full and fair statements of

petitioner's “alibi” to a net worth computation

showing an excess of income over that reported on

his returns was given to the prosecution long in

advance of trial but he was accorded no reciprocity

of discovery. Instead of making an investigation of

the “alibi” by the usual Internal Revenue Service

personnel who normally are expected to testify at

trial. this procedure was aborted; instead, investi-

gation was made by way of Grand Jury. Is this not

the “radical and dangerous departure from the

historical and constitutionaly guaranteed right ofa

defendant in a criminal case to remain completely

Silent, requiring the state to prove its case without

any assistance of any kind from the defendant

himself” spoken of in the concuring opinion of Mr.

Justice Douglas in Wardius v. Oregon, 412 U.S.

470. 479 and Williams v. Florida 399 U.S. 78 106?

Has not the Petitioner been compelled to be a

witness against himself without the reciprocity

necessitated by due process? He has given up the

-21-

right to remain silent by furnishing evidence of

leads under Holland doctrine, but he has been

denied the due process right of reciprocal

discovery. for the government's investigation of

those leads was made by way of Grand Jury and.

although motions were made, those Grand Jury

transcrip:s were denied to the defendant; more,

the witnesses were not called by the prosecution in

its case-in-chief, thus denying the defendant the

right to rebut testimony of those witnesses and to

accord him the right of cross

accord him the right of cross-examination and

access to the transcripts under Title 18 USC § 3500.

This course of action by the prosecution

cannot be squared with Wardius v. Oregon nor with

Stump v. Bennett 398 F. 2d 111 (CA. 8, 1968)

approved by Johnson v. Bennett 393 U.S 253

(1968). Just because we are considering an income

tax Case is no reason to excise the constitutional

guarantees that every defendant in a criminal case

is entitled to exercise. See Deutch v. United States

367 U.S. 456, 471 (1961), and Watkins v. United

States 367 U.S. 456, 471 (1961), and Watkins v.

United States, 354 U.S. 178, 208 (1957)

“One of the rightful boasts of Western Civilization

is that the (prosecution) has the burden of

PS a?

eo:

=e eS oe

establishing guilt solely on evidence produced ir

Court and under circumstances assuring an

accused all safeguards of a fair procedure.” Irvin v.

Dowd 366 U.S. 717, 729 (1961). This includes the

presumption of the defendant's innocence. Sinclair

v. United States 279 U.S. 263, 296-297 (1929): and

Stump v. Bennett, 598 F. 2d 111 (CA 8, 1968).

The questions presented by this caseé are of

great and recurring significance in the administra-

tion of criminal justice as it applies to the Internal

Revenue Laws. Many hundreds of taxpayers

convicted by the use of the net worth method have

applied to this Court for Writs of Certiorari after

their convictions were sustained by the various

Courts of Appeal, which have viewed in the light

most favorable to the government the judicial

presumptions originated in Holland v. United

States 348 U.S. 121 (1954), yet this court has not

seen fit to review that presumption in the light of

Leary v. United States. 395 U.S. 6 (1969). nor has it

adequately defined the rules of evidence and

procedure to be applied in cases where “leads” are

furnished under the Holland doctrine. From the

facts of this case it should be apparent that the

principles of Wardius v. Oregon, supra. have been

ignored and that prosecutors are taking advantage

-33-

of this situation by utilizing procedures available to

them to prevent acquittal at the close of the

government's case for failure to pursue leads,

thereby shifting the burden of proof to a defendant

who is forced to assume the risk of presenting

evidence in apparent derogation of his constitu-

tional rights.

CONCLUSION

For the reasons set forth above, it is

respectfully submitted that this petition for A Writ

of Certiorari should be granted.

Dated this 29th day of November, 1974.

Respectfully submitted.

CLYDE R. MAXWELL

567 San Nicolas Dr.. Ste. 209

Newport Beach. Calif. 92660

Telephone: (714) 644-5232

-24-

<A Na OR A te DP ED

rd

a

APPENDIX

TABLE OF CONTENTS

Page

PES foci iwhancnue ae eheeekeeneae es /

UID 5c Cc acudsaweae bckeween vin enters 1

Order Denying Petition for Rehearing ....... 4

TE ta Pat RARE OP AS cae eRe ees 5

constitution, Amendment5................. 5

Constitution, Amendment6 ............... 5

DO MEER bir ce oo te ree neater aaa heee 6

Chapter 29, Motion for Acquittal ............ 6

PE ON so 5.ins wiles weed koh eaae ew ohue 9

gf EP err ey eer irre rr rt 9

Ba arnt ge Rare aot yy 14

EE oa kb vanketan be Meh eeueeeeeee 17

Pe 55. kath adabebekixeeaneraua 18

Order Staying Issuance of Mandate ........ 18

sive snag ni SSD AN AR in. RA ala aa

reais’ hw

[panama rapenecren patty toe Tt

Cc OP Y

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

THE UNITED STATES OF AMERICA, Appellee,

vs.

WALTER C. ROBSON, Appellant.

No. 74-1385

MEMORANDUM

[September 3, 1974]

On Appeal from the United States District Court

for the Central District of California

Before: BARNES and WHUFSTEDLER, Circuit

Judges, and McNICHOLS,”* District Judge.

PER CURIAM:

Appellant was convicted, following a bench trial,

on one of three counts of violation of 26 U.S.C.

§7201 (income tax evasion).1 Findings of fact by

the court were waived. The trial was protracted, the

reporter's transcript contains more than two

thousand pages.

The government undertook to prove tax evasion

by the “net worth” method. Viewed in the light

most favorable to upholding the verdict, we are of

the view that a prima facie case was developed.

“Honorable Ray McNichols, District of Idaho, sitting by

designation.

(1)The indictment charged tax evasion based on appellant's

‘ax returns for the tax years 1965, 1966 and 1967. He was

>onvicted only of the charge arising out of the 1966 return.

(1)

Sh MO RL PI

COP Y

To account for the apparent increased net

worth between the beginning and ending of the tax

year, appellant sought to establish that he had a

“cash hoard” of some $50,000.00 on hand at the

commencement of the year which asset the

government accounting witnesses failed to con-

sider. He testified that he spent this sum during

the year on the purchase of capital assets and to

pay business expenses. Had such a fund existed

and been so expended, most of the accumulation

of net worth relied on by the prosecution to

establish unreported income would have been

explained. The evidence bearing on such expendi-

tures from a cash hoard during the 1966 tax year

was conflicting. The court, as trier of fact, did not

believe appellant or his witnesses. This resolution

of conflicting evidence is binding on us on the

record here presented.

Appellant complains that the government failed

to follow up leads provided by the taxpayer, which

leads, it is alleged, would have led to evidence

tending to prove the existence of the cash hoard.

This failure, it is urged, had the effect of shifting

the burden of proof onto the defendant and thusly

(2)

Cc OP Y

depriving him of due process. Contrary to

appellant's position, the record reflects that the

investigation officers did track down such leads

furnished by the taxpayer as were reasonably

susceptible to verification.

An adequate compliance with the teaching of

Holland v. United States, 348 U.S. 121 (1954), is

demonstrated.

We have considered other allegations of error

and find them without merit.

Affirmed.

(3)

Cc OP Y

Dockeied filed Oct 1, 1974 Emil E. Melfi, Jr. Clerk

U. S. Court of Appeals

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA’ Plaintiff-Appellee,

-vs-

WALTER C. ROBSON* Defendant-Appellant.

Case No. 74-1385

ORDER DENYING PETITION FOR REHEARING

Doc-10918F )

Before: BARNES and HUFSTEDLER, Circuit

Judges, and McNICHOLS,”* District

Judge.

The petition for rehearing is denied.

Clerk's File No. 1-415-556-6120

Received Oct 7 1974

*Honorable Ray McNichols, United States District

Court for the District of Idaho, sitting by

designation.

(4)

Cc OP Y

Amend. 5 CONSTITUTION

AMENDMENT V-CAPITAL CRIMES; DOUBLE

JEOPARDY; SELF-INCRIMINATION; DUE

PROCESS; JUST COMPENSATION FOR

PROPERTY

No person shall be held to answer for a capital,

or otherwise infamous crime, unless on a

presentment or indictment of a Grand Jury, except

in cases arising in the land or naval forces, or in the

Militia, when in actual service in time of War or

public danger; nor shall any person be subject for

the same offence to be twice put in jeopardy of life

or limb: nor shall be compelled in any criminal

case to be a witness against himself, nor be

deprived of life, liberty, or property, without due

process of law; nor shall private property be taken

for public use, without just compensation.

Amend. 6 CONSTITUTION

AMENDMENT VI-JURY TRIAL FOR CRIMES, AND

PROCEDURAL RIGHTS

In all criminal prosecutions, the accused shall

enjoy the right to a speedy and public trial, by an

impartial jury of the State and district wherein the

(5)

crime shall have been committed, which district

Shall have been previously ascertained by law, and

to be informed of the nature and cause of the

accusation; to be confronted with the witnesses

against him; to have compulsory process for

obtaining witnesses in his favor, and to have the

Assistance of Counsel for his defence.

§ 7201. Attempt to evade or defeat tax

Any person who wilfully attempts in any manner

to evade or defeat any tax imposed by this title or

the payment thereof shall, in addition to other

penalties provided by law, be guilty of a felony

and. upon conviction thereof, shall be fined not

more than $10,000, or imprisoned not more than 5

years. or both, together with the costs of

prosecution. Aug 16, 1954, c. 736, 68A Stat. 851.

CHAPTER 29

Motion for Acquitta!

Rule 29. Motion for Judgment of Acquittal.

(a) MOTION BEFORE SUBMISSION TO JURY.

Motions for directed verdict are abolished and

motions for judgment of acquittal shall be used in

their place. The court on motion of a defendant or

of its own motion shall order the entry of judgment

(6)

of acquittal of one or more offenses charged in the

indictment or information after the evidence on

either side is closed if the evidence is insufficient

to sustain a conviction of such offense or offenses.

If adefendant’s motion for judgment of acquittal at

the close of the evidence offered by the

government is not granted, the defendant may

offer evidence without having reserved the right.

(b) RESERVATION OF DECISION ON MOTION.

If amotion for judgment of acquittal is made at the

close of all the evidence, the court may reserve

decision on the motion, submit the case to the jury

and decide the motion either before the jury returns

a verdict or after it returns a verdict of guilty or is

discharged without having returned a verdict.

(c) MOTION AFTER DISCHARGE OF JURY. If

the jury returns a verdict of guilty or is discharged

without having returned a verdict. a motion for

judgment of acquittal may be made or renewed

with 7 days after the jury is discharge or within

such further time as the court may fix during the

7-day period. If a verdict of guiity is returned the

court may on such motion set aside the verdict and

enter judgment of acquittal. If no verdict is

returned the court may enter judgment of acquittal.

It shall not be necessary to the making of such a

(7)

motion that a similar motion has been made prior

to the submission of the case to the jury.

(8)

NORTH AMERICAN INDUSTRIES, INC.

5025 Hampton Street e Vernon, Calif. 90058

[213] 589-6766

Mr. Clyde R. Maxwell August 30, 1970

417 South Hill Street

Los Angeles, Calif. 90013

Dear Mr. Maxwell:

You have my permission to divulge the contents

of this letter to the Internal Revenue Service.

This is an account of an around the world trip we

(Walt Robson) made together, in which Mr. Robson

engaged in advantageous trading between ports

and profitable gambling aboard ship.

We left California in early November, 1961,

aboard the “Oronsay”, a large English passenger

ship.

Mr Robson had, at the beginning of the trip,

about $8000.00 in travelers checks, and as |

discovered a few days after we left, he had over

$10,000.00 in cash. | remember this distinctly,

because | had to nag him to deposit it with the

Ships Purser, instead of hiding it in our cabin or

keeping it ina money belt.

In Japan, we brought about 40 bottles of Scotch

from the boat (cost below $3.00 aboard ship) and

sold them for $18.00 to the bellboys at the New

Japan Hotel. Mr. Robson bought at least a half

dozen Cannonette Cameras and a few hundred

(9)

C O P Y

dollars worth of pearls-some very cheap and some

expensive.

In Hong Kong, Mr. Robson purchased 200 Enicar

21 jewel calendar watches, for under $5.00 apiece. |

remember these very weil because the bands came

separate and did not fit the watches. | spent many

hours in our cabin helping him file and fit the

bands to the watches. He also purchased a couple

of hundred dollars worth of small transistor radios

and cameras.

Our next stop was Manila. | went my own way

here on a tour up a river. The next morning the

cabin was full of rum. Mr. Rotson told me that he

had gone to a bur called “Litt!e Joes” or “Little

Tonies”. They had gambling in a back room. He

played 21 and won “handful of pesos”. At that time

the Phillippine Peso was not on the free market.

The ship's purser had told us he would not redeem

the Pesos. Mr. R. spent all he could on nite clubs

and not wanting to deal with the black market to

sell the Peso, he bought out two liquor stores of

Phillilppino Rum, about forty cases at $0.50 a

bottle. Within two days he was sold out at 30

Shillings a bottle, about a $1,500.00 profit.

In Sydney, Australia, Mr. Robson sold out his

“inventory” in three of our four day stay. He got

from) $20.00 to over $30.00 apiece for the watches.

He told me he made about $1,000.00 on the

cameras and the radios. | saw him sell these to cab

(10)

drivers, customers and owners of pubs.

One of the new passangers that boarded the boat

in Sydney was an Australian man who had sold his

chicken ranch and was migrating to England. From

that time on, while | was making a play for the

girls, Walt was playing Gin Rummy with the

Australian, night after night and most of the time

all night. Upon returning to the cabin after these

sessions he showed his winnings which were quite

large and he rarely lost. They started playing for

five pounds a hand and got up to fifty. | don’t know

exactly, in the next few weeks, how much he won,

but | know it to be in excess of $8,000.00. As a

matter of fact, the Australians wife thought it was

more. | had run into her in London a few months

later and she had left him because of this. She had

wired all his money to London from the ship to

keep him from losing more to Walt, before arriving

Bali, Indonesia.

At a bazar in Bali | took my shirt off because of

the heat. | was immediately offered a magnificent

wood carving. | went back to the ship and brought

back all the shirts and white material | could get my

hands on. The Australian got into the act and

brought most of his clothes from the ship. We

went into partners and wound up with over a

hundred carvings. We gave the Purser five and he

let uS use a empty cabin in which to store them.

Mr. Robson won the Australians share in a few

hanaus of gin.

In Singapore, Mr. Robson purchased another

(11)

three hundred watches for about $6.00 apiece.

Our next stop was Colombo, Ceylon. Mr.

Robson sold some of the watches for as much as

forty and fifty dollars. One evening | saw him trade

200 watches for star sapphires. | don’t know

exactly how many but they filled a small leather

pouch.

| might mention that customs were very lax for

tourists in transit. This was not so however in

Bombay where Mr. Robson after one trip across

with some Scotch he gave it up.

In Aden he only bought a few cameras-l think

about ten Minnoxes.

in Port Said, Egypt, he decided to disembark. He

bought large leather suitcases from the Egyptians

over the side of the boat, in which he shipped his

share of the wood carvings to London. By the way.

My half of the wood carvings along with all my

luggage was stolen the night before docking in

London. We were to meet again in Rome, where we

were going to open a restaurent. This never

materialized. | did not see Mr. Robson again until

back in the States jate in 1962. When he left me he

had over $30.000.00 in cash and travelers checks.

He mailed some of it on to American Express in

London. For over two months on ship our

expenses were very nominal. The ship was our

hotel with free meals, 12 cents for a gin and tonic,

16 cents for a scotch and soda.

Mr Robson later told me of his travels the next

(12)

seven months after he left me in Egypt in early

January 1962. He sold the carvings and star

sapphires in London. He mentioned selling his

cameras in Israel, buying gold U.S. coins in Beirut,

and winning money in Monaco. | do not know the

monetary results of these affairs.

If | can be of any further assistance or add any

Clarification, | will be happy to oblige.

Very truly yours,

s/Robert J. Morris

President

North American Industries

(13)

c@ F FY

REPUBLIC FEDERAL SAVINGS

AND LOAN ASSOCIATION

3407 West Magnolia Boulevard

Burbank, California 91505

]213] 845-8595

Cylde R. Maxwell February 16, 1971

Attorney at Law

417 South Hill Street, Suite 601

Los Angeles. California 90013

RE: Walter Robson

Dear Mr. Maxwell:

You have requested further information with

regard to whatever knowledge | may have

concerning Walter Robson and his dealings with

the Empire Savings and Loan, while | was Manager

of Empire Savings during the years 1963 and 1964.

| have been shown records of Savings Account

#2147 in the name of Mr. Robson, a copy of which

is attached, and this has refreshed my recollection

to a considerable degree.

| now remember Mr. Robson opened the account

on December 17, 1963, at which time, under our

policy. he was entitled to the free use of a Safety

deposit box. This was box number 686.

| also recall that Mr. Robson and | proceeded to

the safety deposit vault and | showed him how to

(14)

insert the key and open the box under the bank’s

procedure, and at that time he placed within his

box five or six packages of currency. Each package

was almost 3/4” thick and appeared to consist of

ten units of 10 $100 bills each separated by paper

clips.

From time to time thereafter during the year

1964, | was present when Mr. Robson added

similar bundles of currency to his box. Occasi-

onaliy he would borrow an envelope to hold the

package of currency.

During the year 1964, on the occasion of these

visits, when | saw the inside of the box, there were

always five or six of these packages present.

| trust this is the information which you seek.

You have my permission to divulge the contents of

this letter to the Internal Revenue Service.

Very truly yours.

s/Frank Pawluc

Frank Pawluc

(15)

8 4 | zzttor 81° 9062 & 0€ das Al

83 Sy’ 20e’€ coor 9 das Soedes | it

2 1} evyzgze 00° 000‘ t Kvz Say

0 1) tr 292’ P 00° 000‘Z Sz Say Ol

S 1] zp'z92'9 00°000‘Z Eei say | 6

oS | zr'z92'8 00° 000‘ | Eeir | 8

S a! 2r°292°6 00° 00S Zt 1F Z

~ al zr'292'6 00° 00S Yi-ir | 9

~2 Zp’ 29701 Gz*pzt | yguar ES l- 19¢ $

83 ZU ert ‘Ol GL°2Z1 | #9 AOW Forua | ¢

83 Zr" 0Z0'OL Zp" OZ 429Q 44 & Ol vor Z

% 3} 00°000’0t} 00°000’01 Z| 29q l

5 eos aouojog| SUOI}IPPY | 4sasajuy | S|OMDIPYF MA aj0q

Lyiz $4 vv sswi1D> 989

‘yooy

13

14

15

16

17

18

19

20

21

22

23

Jun 243

Jun 24 3

Jun 243

Jun 243

Aug 23:3

Jan -8 8

Jan -8 8

Jan 8 8

Jan -8 8

May 208

Int Dec

Int Mar

Jun 6

4.91

4.98

5.17

11.84

49.9]

62.39

123.30

4,050.00

533 .67

5,000 .00

Mar '66

406.18

411.16

416 .33

4,466 .33

5,000 .00

5,011 ,84

5,061.75

5,124.14

10,124.14

10,247.44

Ap Ap Ap

DD > 42 49 42>

Ap Ap Ap

42 42> 49 42> 42

Ap

Cc OP Y

REPUBLIC FEDERAL SAVINGS

and loan association

3407 West Magnolia Boulevard

Burbank, California 91505

(213) 845-8595

Mr. Clyde R. Maxwell September 15, 1970

437 South Hill 6

Suite 600

Los Angeles. Calif. 90013

Dear Mr. Maxwell:

The contents of this letter can be directed to the

Internal Revenue Service.

| Frank Pawluc. former manager of Empire

Savings and Loan. Sunset and Doheny office, did

know Walter Robson savings account holder.

To my knowledge Mr. Robson maintained 3 safe

deposit boxes in which he kept large sums of

money. The reason why | was aware of this, was

that | on numerous occasions asked Mr. Robson to

deposit these funds to his existing account.

However Mr. Robson liked to have cash available.

| hope my statement will be a benefit to your

client.

Very truly yours,

s/Frank Pawluc

Assistant Vice President

(17)

Cc OP Y

Docketed

UNITED STATES COURT OF APPEALS

For the Ninth Circuit

UNITED STATES OF AMERICA, Plaintiff / Appellee,

vs.

WALTER C. ROBSON, Defendant/ Appellant.

No. 74-1385

ORDER STAYING ISSUANCE OF MANDATE

Upon application of Clyde R. Maxwell, Esq.

counsel for the Appellant, and good cause

appearing, IT IS ORDERED that the issuance,

under Rule 41 (a) of the Federal Rules of Appellate

Procedure, of the certified copy of the judgment of

this Court in the above cause be and hereby is

stayed pending the filing, consideration and

disposition by the Supreme Court of the United

States of a petition for writ of certiorari to be made

by the Appellant herein, provided such petition is

filed in the Clerk’s Office of the Supreme Court of

the United States on or before November 1, 1974.

In the event the petition for writ of certiorari is

granted, then this stay is to continue pending tiie

final disposition of the case by the Supreme Court

of the United States.

s/Stanley W. Barnes

United States Circuit Judge.

A True Copy Attest Oct 18 1974

EMILE. MELFI, JR., Clerk

By Mary Turley, Deputy

Dated: Oct. 5th 1974

Filed Oct 18 1974 U.S. Court of Appeals

Received Oct 21 1974

(18)

‘

PROOF OF SERVICE

State of California )

ss

County of Riverside )

| am a citizen of the United States and a

resident of the county aforesaid; | am over the age

of 18 years and not a party to the within entitled

action; my business address is 1509 N. Main,

Santa Ana, California.

On November 30. 1974, | served the within

PETITION FOR A WRIT OF CERTIORARI on the

interested parties in said action, by placing three

(3) true copies in three seaied envelopes with

postage thereon fully prepaid, in the United States

mail at Santa Ana, California, addressed to-

Mr. William B. Saxbe William D. Keller

Aiiorney General United States Attorney

Attn: Appellate Section U. S. Court House

Tax Division 312 N. Spring Street

Room 4320 Los Angeles, Calif. 90012

Washington, D.C. 20530

Robert H. Bork, Solicitor General

Department of Justice

Washington, D. C. 20530

| CERTIFY under penalty of perjury that the

foregoing is true and correct. Executed on

November 30, 1974, at Santa Ana, California.

JACK GALLAGHER