Petition for Writ of Certiorari — Popkin v. United States

a woe |

No. 91 __ OFFICE OF THE CLERK |

In The

Supreme Court of the United States

October Term, 1991

a

GERALD M. POPKIN,

Petitioner,

Vv.

UNITED STATES OF AMERICA,

Respondent.

— .

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

a =<

LAW OFFICES OF

DONALD L. WOLFF

Donald L. Wolff (#18008)

Attorney for Petitioner

8019 Forsyth

St. Louis, MO 63105

(314) 725-8019

(314) 725-8443 (Facsimile)

QUESTIONS PRESENTED FOR REVIEW

I,

Whether the Eleventh Circuit Court of Appeals violated

Petitioner’s Right to Due Process of Law, when it affirmed his

conviction under Title 26 §7212 for forming a corporation to

disguise illegal income, but where Petitioner was not charged

with a specific violation of the tax laws or with any other

criminal conduct?

IT.

Whether the Eleventh Circuit Court of Appeals misconstrued

the meaning of Title 26 §7212 in refusing to limit it to conduct

which involves forcible interference with the administration

of the tax code or assault on a government agent?

il

TABLE OF CONTENTS

Page (s)

QUESTIONS PRESENTED FOR REVIEW ............. i

TABLE UP CARL is 5 ease ee cea ees li

TABLEOF AUTIAIRE Me. 423.0sca05baesceenere eens til

OPINEIM GELS 5.35 vs cus eee eee ee 1

JURISDICTIONAL STATEMENT «3.50 tees vasuavees 1

RELEVANT CONSTITUTIONAL AND

STATUTORY PRI V et ss vs canteen een enae 1

STATEMENT OF THE CAGE shine a ce ue eee ee 2

ARGUMENT

I. Whether the Eleventh Circuit Court of Appeals vio-

lated Petitioner's right to due process of law, when

it affirmed his conviction under Title 26 §7212 for

forming a corporation to disguise illegal income,

but where Petitioner was not charged witha specific

violation of the tax laws or with any other criminal

COUGICET ... ss naa + sive sa ead 2 Oe ee eae 5

I]. Whether the Eleventh Circuit Court of Appeals mis-

construed the meaning of Title 26 §7212 in refusing

to limit it to conduct which involves forcible inter-

ference with the administration of the tax code

or assault ona government agent?............. 7

CONCLUSION 0 0:5550 Seay oe ee 17

APT RIMM 606i ci ye tee ee ee A-1

ill

TABLE OF AUTHORITIES

Cases Page (s)

Bifulco v. United States,

I sone k on cui ke whan 0 a6o0Heee sees 12

Lanzetta v. New Jersey,

SS Se) «> 46

United States v. Guthrie,

gm leg. te A) 12

United States v. Henderson,

306 F.Supp. 1046 (S.D. N.Y. 1974) ................- 10,11

United States v. Hylton,

oe Gu aL) 5,14

United States v. Johnson,

| ae by, rrr 6

United States v. Ogle,

eee ame ee CP GU EPPA) ct eae cece cnes 15

United States v. Ratcliff,

Se wim Pen CUT. POGS). kai cake nuns 6,16

United States v. Reeves,

Fae mee re ee ae, TOS) ck kick wav wc dwuace 15,16

United States v. Rybicki,

re We Pw ESET, ESO) cise enescccensncuvens 13

United States v. Sciolino,

ee ee | 11,14

United States v. Varani,

Bi ee 2 ee * | | 6,13

lv

TABLE OF AUTHORITIES - Continued

United States v. Walker,

pe Oe ee er re reer 11

Whalen v. United States,

ee eS or reac Fee cee k aah ceuney: 5

STATUTES

Ae acs SEE ove Gi once Caves cake 5,6,7,8,9,10,11,

12,13,14

OE dt, ee a ie eee we OER ne 22s S 9,10,11

ES lt Se en me Sty Nese eae ae ~

MUI I, . ccs cb cu 5 io xne ca Sa wen nee ee 4

OPINION BELOW

The Opinion affirming Petitioner's conviction is reported at

United States v. Gerald M. Popkin, 943 F.2d 1535 (1991).

JURISDICTIONAL STATEMENT

The United States Court of Appeals for the Eleventh Circuit

issued its Opinion on October 9, 1991. Petitioner's motion fora

re-hearing was denied on November 13, 1991. Pursuant to

Supreme Court Rule 13. 4, the present petition for a Writ of

Certiorari was required to be filed within ninety days of the

denial of Petitioner's motion for a re-hearing. Jurisdiction of

this court is invoked under 28 U.S.C. §1254.

RELEVANT CONSTITUTIONAL AND

STATUTORY PROVISIONS

1. The Fifth Amendment to the United States Constitution

provides:

[N] or be deprived of life, liberty or property without due

process of law.

2. Title 26 §7212(a) provides:

Whoever corruptly or by force or threats of force (includ-

ing any threatening letter or communication) endeavors

to intimidate or impede any officer or employee of the

United States acting in an official capacity under this title,

or in any other way corruptly or by force or threats of force

(including any threatening letter or communication) ob-

structs or impedes, or endeavors to obstruct or impede,

the due administration of this title, shall upon conviction

thereof, be fined not more than $5,000, or imprisoned not

more than three years, or both, except that if the offense is

committed only by threats of force, the person convicted

thereof shall be fined not more than $3, 000, or imprisoned

not more than one year, or both. The term "threats of

force,” as used in the subsection, means threats of bodily

harm to the officer or employee of the United States or to

a member of his family.

1

STATEMENT OF THE CASE

Petitioner was originally charged in the indictment with

Count I, charging a violation of 26 U.S.C. §7206(2) for assist-

ing in the preparation of a false or fraudulent 1983 tax return;

Count II, charging a violation of 26 U.S.C. §7206(2) for assist-

ing in the preparation of a false or fraudulent 1984 tax return;

and count III, charging a violation of 26 U.S.C. §7212(a) for

endeavoring to impede the due administration of Title 26 by

preparing the false tax returns described in Counts I and II

and by creating a California corporation for the purpose of

disguising the character of illegally earned income.

The facts giving rise to the indictment are as follows. In

1978, Petitioner, then an attorney-at-law, was contacted by

Stephen Musick, who asked the Petitioner to prepare for him

his 1977 income tax return. In 1985, the Petitioner was again

contacted by Stephen Musick, who this time asked that the

Petitioner prepare 1983 and 1984 income tax returns, and

explained that he needed to bring into the country some

offshore money which had been held for him by two of his

partners while he was serving time in prison on the cocaine

deal which had generated this income. He also requested legal

assistance in the preparation of incorporation of his new

business. Petitioner prepared the returns and stated on each

return that Mr. Musick’s income for each respective year was

$50,000, an amount which the government claimed falsely

stated Mr. Musick’s purported income for those two years.

Petitioner also set up a California corporation on behalf of Mr.

Musick, and proposed that he sell shares of stock in the

corporation to certain of Mr. Musick’s business partners.

What Petitioner did not know was that, subsequent to his

initial contact with Mr. Musick in 1978, and prior to their

resumption of contact in 1985, Mr. Musick had entered into

a deal with the government relative to Mr. Musick's interven-

J

ing drug activity, and that the 1985 meetings were part of a

government sting operation. The tax returns were prepared

but never filed and the corporation was set up for the business

partners who turned out to be goverment agents.

A jury trial was commenced on July 9, 1990, and continued

through July 13, 1990. At trial, Count III of the indictment was

amended to delete references to the tax returns described in

Counts I and II, leaving the redacted charge that Petitioner

corruptly obstructed or impeded and endeavored to obstruct

and impede the due administration of Title 26 by creating the

Stephen Musick Corporation. Petitioner filed a motion to dis-

miss all counts for failure to state an offense within the statute,

as well as a motion for judgment of acquittal with respect to

all three counts. Both motions were denied.

On July 13, 1990, the jury returned a verdict of not guilty

on Counts I and II. It returned a verdict of guilty on Count

III. Petitioner’s motion to set aside the verdict was denied, and

on September 14, 1990, Petitioner was sentenced to a term of

imprisonment of one year plus one day.

On September 17, 1990, Petitioner filed a notice of appeal

from the judgment. On October 9, 1991, the United States

Court of Appeals for the Eleventh Circuit issued its opinion

affirming the judgment. A-]. One justice of the court disserted

for the opinion. On November 13, 1991, Petitioner's motion

for a re-hearing was denied. A-2. This petition for a writ of

certiorari ensues.

ARGUMENT

I. WHETHER THE ELEVENTH CIRCUIT COURT OF AP-

PEALS VIOLATED PETITIONER’S RIGHT TO DUE PROC-

ESS OF LAW, WHEN IT AFFIRMED HIS CONVICTION

UNDER TITLE 26, §7212 FOR FORMING A CORPORA-

TION TO DISGUISE ILLEGAL INCOME, BUT WHERE

PETITIONER WAS NOT CHAKGED WITH A SPECIFIC

VIOLATION OF THE TAX LAWS OR WITH ANY OTHER

CRIMINAL CONDUCT?

Conviction under a statute that fails to state a crime, consti-

tutes a due process violation under the Fifth Amendment. It has

been held that persons may not be required at peril of life,

liberty or property to speculate concerning the meaning of a

penal statute, but all are entitled to be informed concerning

what the state commands or forbids. Lanzetta v. New Jersey,

306 U.S. 451 (1939). A penal statute creating an offense must be

sufficiently explicit to inform those subject to it what conduct

will render them liable to its penalties, and a statute forbidding

or requiring doing of an act in terms so vague that men of

common intelligence must necessarily guess at its meaning and

differ as to its application is repugnant to the due process clause

of the federal constitution. Lanzetta, supra at 460.

In the instant case, Petitioner was charged in Count III with

corruptly obstructing or impeding or endeavoring to obstruct

or impede the due administration of the tax laws. It was not

alleged, as part of that count, that he so endeavored to obstruct

or impede, by violating any tax laws or committing any other

type of crime. He was charged merely with setting up the

Stephen Musick Corporation, ostensibly for the purpose of

creating a tax shield or disguising the nature of illegally gener-

ated income. In other words, the sine qua non of the offense

charged was that Petitioner formed a corporation. The activity

which was alleged to be the means by which Petitioner accom-

plished his obstruction was legal, and not illegal, activity. It has

been held that where the act complained of is of itself legal

conduct, even if done with the purpose to obstruct, then §7212

(a) has not been violated. United States v. Hylton, 710 F.2d 1106

(Sth Cir. 1983).

In Hylton, defendant and her husband had been long-time

foes of the federal tax laws. They eventually sent a notice to the

IRS informing its agents that they were not welcome on their

property, and posted “no trespass” signs as well. In 1981, the

IRS began investigating defendant's son for tax activity and

entered defendant's property to inquire about the son’s where-

abouts. The next day defendant filed a criminal complaint with

the county attorney for trespass by the agents. Thereafter,

defendant was indicted in federal court with a violation of 26

U.S.C. §7212(a) for corruptly endeavoring to impede the IRS

agents in their official capacity. The district court sustained a

motion for judgment of acquittal, stating that “even assuming

the evidence to have established beyond any doubt that the

defendant acted with the sole purpose of obstructing the inves-

tigation of the two IRS agents”, Hylton, supra, at 1110 (quoting

the district court memorandum), §7212 was not violated as a

matter of law, because the activity complained of was not itself

illegal or fraudulent. Indeed, because the complaints for tres-

pass were factually accurate, no violation had occurred. The 5th

Circuit affirmed the district court, looking, as the lower court

did, to the nature of the underlying conduct, not its purpose.

The instant case is on all fours. Petitioner was within his

lawful right to set up a corporation. And even if the reason he

did so was arguably to obstruct or impede the administration

of the tax code, the underlying act was not itself corrupt. Senior

Circuit Judge Roney makes this very point in his dissent to the

panel’s opinion below. Because the indictment as amended

deleted the allegations concerning the preparation of false re-

turns, leaving the sine qua non of the offense the formation of

the corporation - and because the formation of a corporation is

not an inherently corrupt act, then the elements of §7212 (a)

have not been met nor the meaning of the statute given its true

effect. 1

Indeed, almost every case involving a prosecution under

§7212(a) has involved an underlying act which was itself illegal

or corrupt, as for example, in United States v. Ratcliff, 806 F.2d

(5th Cir. 1986), where the underlying act was threatening

phone calls to an IRS agent; United States v. Johnson, 462 F.2d

423 (2nd Cir. 1972), where the underlying act was an assault on

arresting agents; and United States v. Varani, 435 F.2d 758 (6th

Cir. 1970), where the underlying act was letter threats of vio-

lence against an agent. To expand or extend §7212 (a) to

encompass an act like Petitioner's here - creating a corporate

entity to repatriate funds located in an offshore account back

into this country, would be to permit an overbroad sweep by

the statute to include within its reach "any and all efforts to

evade taxation.” United States v. Popkin, Slip Option, A-1, page

70. Such an unfettered sweep would criminalize behavior

without informing persons that the behavior is criminal, and is

the kind of due process violation which concerned this court

Lanzetta.

Petitioner submits that the 11th Circuit majority misinter-

preted and misapplied §7212 (a) to the facts of this case.

1 Judge Roney also makes the point that in fact Petitioner’s conduct was

a classic example of money laundering. However, as 18 U.S.C. §1956 was not

passed until 1986 and the acts complained of occurred in 1985, the govern-

ment had to go shopping fora statute under which tocharge the conduct. Un-

fortunately, no statute on the books at the time criminalized conduct such as

Petitioner’s. Inall likelihood, Congress perceived a gap in the various federal

statutes in effect in 1985, through which setting up a corporation to receive

drug funds fell. By the same argument, §7212 (a) was not meant to and did

not prohibit the type of conduct committed by Petitioner, and was improp-

erly charged in this case. Had the conduct occurred a year later, when §1956

had been enacted and taken effect, it is doubtful that Petitioner would have

been charged under §7212 (a).

N

Accordingly, Petitioner respectfully requests that this court

grant certiorari.

Il. WHETHER THE ELEVENTH CIRCUIT COURT OF

APPEALS MISCONSTRUED THE MEANING OF TITLE

26 §7212 IN REFUSING TO LIMIT IT TO CONDUCT

WHICH INVOLVES FORCIBLE INTERFERENCE WITH

THE ADMINISTRATION OF THE TAX CODE OR

ASSAULT ON A GOVERNMENT AGENT?

In affirming Petitioner’s conviction, the llth Circuit Court of

Appeals held that 26 U.S.C. §7212(a) need not be limited to

those circumstances where the accused has wielded force or

threats against the person of a particular government em-

ployee. As this interpretation of the statute conflicts with other

federal circuit court rulings, and is inconsistent with recorded

legislative intent, Petitioner respectfully requests that the Court

grant certiorari on this question.

§7212(a) of Title 26 (Internal Revenue Code) reads as follows:

Corrupt or Forcible Interference

Whoever corruptly or by force or threats of force (includ-

ing any threatening letter or communication) endeavors

to intimidate or impede any officer or employee of the

United States acting in an official capacity under this title,

or inany other way corruptly or by force or threats of force

(including any threatening letter or communication) ob-

structs or impedes, or endeavors to obstruct or impede,

the due administration of this title, shall upon conviction

thereof, be fined not more than $5, 000, or imprisoned not

more than three years, or both, except that if the offense is

committed only by threats of force, the person convicted

thereof shall be fined not more than $3,000, or imprisoned

not more than one year, or both. The term “threats of

force” as used in the subsection, means threats of bodily

harm to the officer or employee of the United States or to

a member of his family.

It is the meaning of the latter half of this statute which is in

dispute, namely, the language which reads, “or in any other

way corruptly or by force or threats of force...obstructs or

impedes or endeavors to obstruct or impede the due admini-

stration of this title.” According to the 11th Circuit, this lan-

guage encompasses any corrupt conduct and is not limited to

conduct directed at or against a particular government agent or

employee. This interpretation, however, flies in the face of

legislative history, and rulings in other circuits.

In ruling that the latter portion of §7212(a) encompasses gen-

erally corrupt conduct whose purpose is to obstruct the IRS, the

11th Circuit reasoned that the clause was an “omnibus” clause,

and thus broad in its sweep. To support this interpretation of

§7212(a), the 11th Circuit relied solely on an entirely different

statute borrowed from another title of the federal code, 18

U.S.C. §1503. 2 However, “[w] ithin our federal constitutional

framework the legislative power, including the power to define

criminal offenses, and to prescribe the punishment to be im-

posed upon those found guilty of them, resides with the

Congress." Whalen v. United States, 445 U.S. 684, 659 (1980).

The separation of powers doctrine includes the principle that

federal courts do not possess the inherent authority to manu-

facture crimes or criminal punishment. Id. Thus, absent clear

intent expressed in either the language or legislative history of

§7212(a) that it is to be construed by the courts as an “omnibus

obstruction” statute, Petitioner respectfully submits that this

Court should not interpret itas such. The legislative history that

follows willdemonstrate the true goals of §7212(a) as written by

Congress.

2 In his dissent, Judge Roney makes the point that 18 U.S.C. §1503, to which the

majority of the panel analogizes 26 U.S.C. §7212, carries within its meaning a retaliatory

element against the IRS or one of its agents. If the 11th Circuit is truly going to analogize

the two statutes, then §7212 must have this same retaliatory element. That element did

not exist in the instant case.

EE

§7212(a) originates from §38 of the Internal Revenue Service

Act of 1864 which provided:

That if any person shall forcibly obstruct or hinder any

assessor Or assistant assessor, or any collector or deputy

collector, revenue agent or inspector, in the execution of

this act, or of any power and authority hereby vested in

him, or shall forcibly rescue, or cause to be rescued, any

property, articles, or objects, after the same shall have been

seized by him, or shall attempt or endeavor to do so, the

person so offending shall, upon conviction thereof, for

every such offense, forfeit and pay, the sum of $500, or

double the value of the property so rescued or be impris-

oned for a term not exceeding two years, at the discretion

of the court....Ch. 173, Stat. 238.

The 1939 Internal Revenue Code split the prohibited acts of

§38 into two subsections:

§3601(c) : If any person shall...(1)...[florcibly obstruct or

hinder any collector, deputy, collector, Internal Revenue

agent, or inspector, in the execution of any power and

authority vestted in him by law, or... (2) [florcibly rescue or

cause to be rescued any property, articles, or objects after

the same shalll have been seized by him, orshallattempt or

endeavor to clo so, the person so offending, excepting in

cases otherwise provided for, shall, for every such offense

forfeit and pay the sum of $500, or double the value of the

property so rescued, or be imprisoned for a term not

exceeding two years, at the discretion of the court.

The modern version of §7212(a) was enacted as part of the

Internal Revenue Code of 1954. The House of Representatives

proposed that the new section be similar to 18 U.S.C. §111

which prohibited the forceful assault of a federal employee

engaged in the performance of his duties. The House wanted to

heighten the protection afforded Internal Revenue employees

by “covering all cases where the officer is intimidated or

injured; that is, where corruptly, by force or threats of force,

10

directly or by communication, an attempt is made to impede,

the administration of the Internal Revenue laws." H.R. Rep. No.

1337, 83d Cong., 2d Sess., reprinted in [1954] U.S. Code Cong.

& Ad. News at 4017, 4136.

The Senate version of the new section was also more expan-

sive than 18 U.S.C. §111 “in that it covered threats of force

(including any letter or communication) or corrupt solicita-

tion.” S. Rep. 83d Cong., 2d Sess., reprinted in [1954] U.S. Code

Cong. & Ad. News at 5254. The Senate version included the

House provision regarding forceful intimidation of federal

employees, but classified this provision as a misdemeanor

rather than a felony.

After a conference on the difference between the House and

Senate versions of the proposed Internal Revenue Code, the

Conference Committee accepted the Senate version of §7212

(a). H.R. Rep. No. 2543, 83d Cong., 2d Sess., reprinted in [1954]

v.s. Code Cong. & Ad. News at 5344.

The purpose behind Congress' enactment of the current

version of §7212(a) is illustrative of its goals. According to the

legislative history, prior to the adoption of the current version

of §7212(a), neither the criminal provisions of the Internal

Revenue Code nor the provisions of the federal penal code,

Title 18, protected Internal Revenue Service employees from

intimidation by means of threats of force. The current version

of §7212(a) was enacted to rectify this by including such intimi-

dation within the scope of conduct made criminal by the act.

The purpose, therefore, was to add intimidation achieved

through the threat of force to the list of criminal offenses which

already included forcible assault upon an Internal Revenue

Service employee in both felony provisions of §7212(a) and 18

U.S.C. §111. It should also be noted that the government itself

made this identical argument in the case of United States v.

Henderson, 386 F.Supp. 1048 (S.D.N.Y. 1974); the government

11

argued there that §7212 applied only toconduct involving force

or threats of force. Henderson, supra at 1055-1056.

Thus, it is clear what type of conduct §7212 (a) prohibits. The

language and legislative history are very specific. §7212(a)

encompasses two different types of obstructions to the effective

operation of the Internal Revenue laws: “interference with

officers or employees of the Internal Revenue Service who are

acting in an official capacity” and interference in “any other

way” with “the due administration of the Internal Revenue

laws, a broader range of prohibited behavior, with different

penalties creating different classes of offenses depending on

whether the defendant acted through corrupt solicitation or

with force, on the one hand, or merely through the use of

a threat of force, on the other hand. United States v. Walker, 514

F.Supp. 294 (E.D. La. 1981).

The court in Walker specifically noted that "this Section [7212

(a)] of the Internal Revenue Code is designated to protect the

Internal Revenue Service, and its officers and employees, from

three different types of harms: (1) corrupt solicitation; (2) force-

ful interference with the operation of the Internal Revenue

laws; and (3) the threat of forceful interference with the opera-

tion of those laws... A felony violation of §7212(a) requires proof

of corrupt solication or the use of force while a misdemeanor

violation of this statute requires proof of the threat of force."

Walker, supra at 298.

By dividing the conduct envisioned by §7212 into a felony

class and a misdemeanor class, the Walker court arguably

described all conduct which it considered to be included within

the statute. Interference with the operation of the IRS as an

agency was not included, nor contemplated. See also, United

States v. Sciolino, 505 F.2d 586, 588 n.3 (2d Cir. 1974) (discussing

elements necessary for conviction under 18 U.S.C. §111 and

§7212(a). )

12

_

Considered in light of the statutory language of §7212(a), its

legislative history and the Congressional purpose behind the

act, §7212(a) is not ambiguous, and "[w]here Congress has

manifested its intention, we [courts] may not manufacture

ambiguity in order to defeat that intent.” Bifulco v. United

States, 447 U.S. 381, 387 (1980). Moreover, a review of caselaw

will demonstrate that the courts have not construed §7212(a) so

as to "manufacture ambiguity," but instead have recognized the

factual circumstances as fitting within the exact type of conduct

which Congress sought to prohibit through §7212(a).

The courts have consistently applied §7212 (a) to factual set-

tings in which the defendant assaults, interferes with, ob-

structs, or in any other fashion impedes a particular Internal

Revenue agent in his official capacity in administering the

Internal Revenue laws. In most cases, the Internal Revenue

Service has had some prior contact with the defendant and it is

usually as a result of that prior contact that the defendant feels

that it necessary to act. In most cases, it is entirely retaliatory. In

addition, the courts appear to be construing the first part of

§7212(a) as describing the “victim” [ie. an Internal Revenue

Agent acting in his/her official capacity], and the second part

as describing what the particular agent is doing at the time of

the defendant's actions [ie. administering the Internal Revenue

laws]. Such an interpretation is entirely consistent with the

spirit of §7212(a) and Congress’ intent.

Not only is the legislative intent behind 7212(a) clear in its

purpose, but cases construing or applying 7212 (a) have consis-

tently and exclusivelv done so only in cases of threats or force

directed against an IRS agent.

The following cases involved prosecutions under §7212(a) :

United States v. Guthrie, 385 F.2d 410 (7th Cir. 1967) : The

defendant, whose income tax returns had been under investi-

as

13

gation by the Internal Revenue Service, declared to his account-

ant that “he might shoot any government agents who ap-

proached him in connection with the investigation.” The ac-

countant informed the Internal Revenue Service about the

threats and about seeing a gun in the defendant’s truck. During

their investigation, two Internal Revenue agents, acting on the

basis of the information from the accountant, observed the gun

in the defendant’s vehicle, and stopped the defendant on the

street to question him. The offenses were committed when,

after they showed him their credentials and informed him of his

constitutional rights, the defendant told the agents that he

would not talk to them and that he was going home and struck

one of the officers as he walked toward his truck. The other

officer then informed the defendant that he was under arrest;

the defendant refused to stop; and he used force to resist the

officer.

United States v. Rybicki, 403 F.2d 599 (6th Cir. 1968) : The

court reversed the defendant’s conviction under §7212 (a) be-

cause ofan erroneous instruction but held that a jury could find

that the defendant knew that the men who were in the act of

moving his truck were officers of the Internal Revenue Service

and were then acting in their official capacity. After the agents

knocked at the defendant’s door and received no response,

they began to remove the vehicle, during which time the

defendant appeared in his doorway, holding a double-barreled

shotgun.

United States v. Varani, 435 F.2d 758 (6th Cir. 1970) : Portions

of a letter which the defendant sent to an Internal Revenue

Service agent who had attempted to collect income taxes due

from the defendant, stated that any force used to seize his

property would be “met witha superior force;” that he had “an

itchy trigger finger more deadly than when he was fighting in

World War II;” and, that “for the agent’s own well being, he

14

must not become personally involved in an effort to seize the

defendant’s property or the defendant would hold him person-

ally responsible." Other evidence cited by the court included

the defendant’s statements to the agent that he was an expert

rifleman and would "blow the agent’s head off."

United States v. Johnson, 462 F.2d 423 (2nd Cir. 1972) :

Officers arrived at the premises occupied by the defendant's

tenant to remove the tenant’s property, which had been posted

with notices of seizure for nonpayment of taxes; defendant

informed them that he would bar their entrance into the

building and that they could enter only over his dead body.

When the defendant refused to move, he was placed under

arrest,and when he refused tosubmitand theagents attempted

to remove him, a scuffle ensued and one of the agents was

assaulted.

United States v. Sciolino, 505 F.2d 586 (2nd Cir. 1974) : This

case involved proof of a flash photograph of the agent taken at

close range by the defendant “for posterity”, in his words, “so

I can show it around and say this is the guy, “ and defendant's

ostentatious display of a cartridge box bearing the label “Smith

and Wesson, .38 Chief Special”, accompanied by his discourse

on the nature of men as “uncivilized beings who delight in

violence and killing.” The last incident occurred at a time when

the defendant possessed a pistol permit and was refusing the

Internal Revenue Service agent’s request for production of

evidence directly relevant to the audit the agent was conduct-

ing.

United States v. Hylton, 710 F.2d 1106, 1108 (5th Cir. 1982) :

The Fifth Circuit affirmed setting aside the tax protestor’s con-

viction of a "charge, under §7212(a), for corruptly endeavoring

to impede Internal Revenue agents in their official capacity by

filing nonfraudulent criminal trespass claims against them."

The court ruled that the defendant’s conduct in filing the

15

trespass claims represented a protected exercise of her consti-

tutional right to petition for redress of grievances, notwith-

standing that the complaints may have been motivated by a

desire to impede the agent's investigation.

United States v. Reeves, 752 F.2d 995 (5th Cir. 1985): Thiscase

involved a defendant's filing of a “common law lien” in the

deed records office against the residence of a criminal investi-

gator with the Criminal Investigation Division of the Internal

Revenue Service, who had been investigating the defendant ‘s

income tax returns for the years 1979, 1980, and 1981. The 5th

Circuit reversed the defendant’s conviction under §7212 (a) for

“corruptly endeavoring to obstruct the due administration of

the Internal Revenue Code. ” The court held that the district

court had erred in adopting “with improper motive or bad or

evil purpose” as the definition of “corruptly”; instead the court

defined it as “intent to give some advantage inconsistent with

the official duty and rights of others under the tax laws”.

Reeves, supra at 1000, (citing United States v. Ogle, 613 F.2d

233, 238 (9th Cir. 1979). In dicta, the court indicated: “In the

present case, it may be that Reeves meant to impede or intimi-

date officers or agents of the Internal Revenue Service from col-

lecting his just debt of taxes due or from scrutinizing his tax

accounts; or it may be that he engaged in this conduct to secure

an improper advantage or benefit for other unnamed persons,

or groups of persons. If this is the case, his actions constituted

a corrupt endeavor under §7212(a). “ Id. This is the only case in

which the Internal Revenue Service, as an entity, could serve

the role of the “victim” of a defendant’s conduct under §7212

(a). There is nothing to indicate that the court was announcing

any new interpretation of the statute to be carried forth in sub-

sequent cases, where the “person” to be impeded or obstructed

is the Internal Revenue Service as a collective entity. Nonethe-

less, this passage is dicta and its dominance should be con-

strued accordingly. In hisconcurrence, Circuit Court Judge Gee

OE

16

stressed that "the essence of §7212(a) seems to be the attempt to

influence or impede the government's agent’s official actions..."

Reeves, supra at 1002.

United States v. Ratcliff, 806 F.2d 1253 (Sth Cir. 1986) : The

Houston branch of the Internal Revenue Service instituted

proceedings against the defendant in order to collect money he

owed in personal income tax. A Revenue officer administra-

tively seized one of the defendant’s bank accounts and placed

liens on several pieces of the defendant’s property. Soon after,

the defendant made threatening phone calls to the Internal

Revenue agent and was charged with interfering with the

administration of the Internal Revenue laws in violation of

§7212(a). The defendant was convicted of endeavoring to in-

timidate and interfere with Internal Revenue Service employ-

ees by threats of force and bodily harm.

In sum, the cases are few but very clear as to the proper

interpretation of §7212(a). In each case, there appears to be a

retaliatory element. That did not exist in the instant case, where

there was no prior investigation, audit or proceeding being

conducted by an agent whom the Petitioner was attempting to

impede. Indeed, this was not a case where Mr. Musick came to

the Petitioner and said, “The IRS is investigating me. See what

you can do to get them off my back”; Petitioner had no reason

to thinkand did not know that the IRS was involved. He had no

reason to retaliate against any particular Internal Revenue

agent, nor did he have any motive to obstruct any particular

agent’s administration of the Internal Revenue laws. In fact,

there was no evidence whatsoever which would indicate that

the Petitioner was dealing directly with a particular IRS agent

whose job he was attempting to thwart. Petitioner’s only act

was to set up a corporation, arguably to disguise or launder

drug money. As such, the 11th Circuit misconstrued §7212(a) in

applying it to the facts of this case, or in extending its reach to

17

include non-forcible, non-retaliatory conduct. Petitioner re-

spectfully submits this is a bonafide basis for the granting of

certiorari.

CONCLUSION

Petitioner respectfully requests that the petition for writ of

certiorari be granted and that the judgment of the 11th Circuit

Court of Appeals be reversed.

Respectfully submitted,

LAW OFFICES OF

DONALD L. WOLFF

<t

onald L. Wolff (#180

Attorney for Petitioner

8019 Forsyth

St. Louis, Mo. 63105

(314) 725-8019

(314) 725-8443 (Facsimile)

18

APPENDIX

U.S. v. POPKIN

UNITED STATES of America,

Plantiff-Appellee.

Vv.

Gerald M. POPKIN, Defendant-

Appellant.

No. 90-8961.

United States Court of Appeals,

Eleventh Circuit.

Oct. 9, 1991.

Defendant was convicted in the United States District Court

for the Northern District of Georgia, No. 1:90-CR-7-1, J. Owen

Forrester, J., of corrupt interference with due administration of

Internal Revenue Code, and he appealed. The Court of Ap-

peals, Lively, Senior Circuit Judge, sitting by designation, held

that: (1) governing statute did not require force or threats of

force directed at specific agent or employee, and (2) evidence

was sufficient to support conviction.

Affirmed.

Roney, Senior Circuit Judge, filed dissenting opinion.

1. Internal Revenue §5264

Statute making it unlawful “in any other way corruptly or by

force or threats of force” to obstruct or impede or endeavor to

obstruct or impede due administration of Internal Revenue

Code does not require force or threat of force directed at specific

agent or employee. 26 U.S.C.A. §7212(a).

*See Rule 34-2(b), Rules of the U.S. Court or Appeals, for the

Eleventh Circuit.

19

2. Internal Revenue §5264

Word "corruptly" in statute making it unlawful "in any other

way corruptly or by force or threats of force" to obstruct or

impede or endeavor to obstruct or impede due administration

of Internal Revenue Code forbids those acts done with intent to

secure unlawful benefit either for oneself or for another. 26

U.S.C.A. §7212(a).

See publication Words and Phrases for other judicial con-

structions and definitions.

3. Internal Revenue §5295

Conviction of attorney for corrupt interference with admini-

stration of Internal Revenue Code was supported by evidence

that attorney created corporation to enable client to disguise

character of income earned on drug deals and repatriate it,

while avoiding reporting income in taxable year earned. 26

U.S.C.A. §7212(a).

Appeal from the United States District Court for the North-

ern District of Georgia.

ANDERSON, Circuit Judge, RONEY* and LIVELY**, Senior

Circuit Judges.

LIVELY, Senior Circuit Judge:

The defendent, Gerald M. Popkin appeals from his jury con-

viction for violating 26 U.S.C. §7212(a), one of the provisions of

Chapter 75 of the Internal Revenue Code, whichcreates a num-

ber of tax crimes. Specifically, §7212 criminalizes attempts to

interfere with administration of internal revenue laws, and sub-

section (a) prohibits corrupt or forcible inteference.

The defendant contends that neither the activities referred to in

the indictment nor those revealed by the evidence constitutes a

crime under §7212(a).

“Honorable Pierce Lively, Senior Circuit Judge of the Sixth

Circuit, sitting by designation.

The criminal charges against the defendant stem from a gov-

ernment sting operation conducted by Stephen Musick. Mu-

sick earned approximately $250,000 in 1977 through his in-

volvement in drug transactions. In 1978, Musick requested and

received assistance from the defendant, who was then a prac-

ticing attorney, in preparing 1977 tax returns which misrepre-

sented the source and amount of Musick’s 1977 income. The

defendant had no further contact with Musick until 1985.

Musick was arrested in 1982 for selling approximately 12

kilograms of cocaine. While serving his prison term, Musick

provided information to federal agents regarding his 1978 deal-

ings with the defendant. After acquiring this information,

government agents requested and Musick agreed to partici-

pate in a sting operation directed at the defendant.

Musick contacted the defendant in March 1985 and re-

quested a meeting at the defendant's law office in Atlanta.

Unaware that Musick was now acting in cooperation with the

government, the defendant agreed to the meeting, which was

recorded by Musick with a concealed audio recording device.

Musick informed the defendant that he had earned approxi-

mately $200,000 on cocaine deals while he was in prison and

that he now wanted to resurface and start showing income by

filing tax returns for 1983 and 1984 and by getting into the con-

struction and real estate business in California. Musick in-

formed the defendant that his money from the drug deals was

being held by an entity called Mid-American Financial in an

offshore account and that he desired assistance in repatriating

the money ina transaction that would disguise the source of the

funds and require paying less than full income taxes.

The defendant recommended that he form a California cor-

poration for Musick, that Musick sell stock in the new corpora-

tion to Mid-America Financial for $200,000, report heavy losses

in the new corporation and then repurchase the stock for $3,000

to $10,000. The defendant cautioned Musick to comply with the

i

formal requirements for running a corporation in order to

maintain the proper corporate appearance. Later that same

day, Musick arranged to meet with the defendant and two

undercover agents posing as representatives of Mid-America

Financial. The parties discussed formation of Musick’s new

corporation and methods of repatriating Musick’s offshore

funds.

In April 1985 the defendant met again with Musick and the

two undercover agents in a video taped meeting at Mid-

America’s offices in St. Louis. At this meeting, the defendant

delivered to Musick tax returns for the years 1983 and 1984 that

the defendant had prepared. The defendant had reported

$50,000 as gross income on Schedule C of the tax returns for

each year. This sum was reported only as gross receipt or sales

without any further indication of its source. These tax returns

were never filed.

21

Subsequent to these meetings, the defendant set up the S.

Musick Corporation in California, obtained a corporate seal

which he mailed to Musick, and filed a statement of domestic

stock corporation with the State of California. The defendent

billed Musick a total of $1,755 for costs associated with forma-

tion of the corporation. This bill was paid by Mid-America

Financial. The defendant also received $5,000 for preparation of

the two income tax returns.

B.

The defendent was charged in a three count indictment in

January 1990. Counts I and II of the indictment related to

defendant's actions in preparing Musick’s tax returns for 1983

and 1984. The defendant was acquitted on these counts but was

convicted on count III, which charged the defendant under 26

U.S.C. §7212(a) by alleging that Popkin

did corruptly obstruct and impede and endeavored to ob-

struct and impede the due administration of Title 26,

United States Code, by preparing the tax returns de-

scribed in Counts One and Two above and by creating a

California corporation for Stephen Musick expressly for

22

the purpose of enabling the said Stephen Musick to dis-

guise the character of illegally earned income and repatri-

ate it from a foreign bank.

At trial, count III of the indictment was amended to delete

references to the tax returns described in counts I and II of the

indictment, and the jury considered it as redacted. The charge

against the defendant in count III of the indictment was thus

based solely on the allegation that defendant corruptly ob-

structed and impeded and endeavored to obstruct and impede

the due administration of Title 26 by creating the S. Musick

Corporation.

In a pretrial motion, the defendant moved the district court

to dismiss count III of the indictment for failure to state an

offense within the statute. The defendant argued that §7212(a)

requires the exercise of force, intimidation or other menacing

conduct directed against the person of a specific federal agent

and that no such conduct was involved in the defendant's

assistance in forming the S. Musick Corporation. The district

court denied this motion at the commencement of the trial in

July 1990.

At trial, the defendant moved for a judgment of acquittal on

count III at the close of the government's evidence and at the

close of all evidence, in each instance contending that count III

failed to state an offense within §7212(a). These motions were

denied. On July 13, 1990, the jury returned a verdict of guilty on

count III of the indictment. The defendant filed a motion to set

aside the jury verdict, which was denied by the district court.

The defendant was sentenced to one year and one day in prison

and ordered to pay restitution to the government of $6,755, and

this appeal followed.

II.

Decision of this case hinges on our construction of 26 U.S.C.

§7212(a), which provides:

§7212. Attempts to interfere with administration of inter-

nal revenue laws

23

(a) Corrupt or forcible interference

Whoever corruptly or by force or threats of force (in-

cluding any threatening letter or communication) endeavors to

intimidate or impede any officer or employee of the United

States acting in an official capacity under this title, or in any

other way corruptly or by force or threats of force (including

any threaten- ing letter or communication) obstructs or im-

pedes, or endeavors to obstruct or impede, the due administra-

tion of this title, shall, upon conviction thereof, be fined not

more than $5,000, or imprisoned not more than 3 years, or both,

except that if the offense is committed only by threats of force,

the person convicted thereof shall be fined not more than

$3,000, or imprisoned not more than 1 year, or both. The term

‘threats of force", as used in this subsection, means threats of

bodily harm to the officer or employee of the United States or

to a member of his family.

A.

In his opening brief the defendant made but one argument—

that it is an essential element ot §7212(a) that the act or conduct

of the accused involve the use of force or threats of force against

the person of a particular government agent. Thus, he argued,

“[a]s the government failed in this case to prove any type of

assaultive conduct or force, or any type of conduct whatsoever

directed at or against a specific employee,” he was entitled toa

judgment of acquittal under count III. The defendant recog-

nized that he was charged under "the latter half" of the statute,

but contended that this portion of §7212(a) requires the same

element of force or threats of force as the first clause. He also

repeated his assertion at trial that the statute requires that the

force or threats be directed at an individual agent: "Interference

with the operation of the IRS as an agency was not included, nor

contemplated." (emphasis in brief).

The defendant sought to buttress this argument by stating

that no reported case has involved a §7212(a) prosecution

where there was notan allegation that the defendant used force

or threats of force to intimidate or otherwise prevent orattempt

to prevent a particular IRS agent from performing his or her

24

official duties. He then listed eight cases from four circuits in

which the element of force against a particular agent was

charged. Although he conceded that §7212(a) is not ambigu-

ous, the defendant argued that the text of previous similar

statutes and the legislative history of the present statute, adopted

as part of the Revenue Act of 1954, reinforce his interpretation.

In his reply brief, for the first time, the defendant argued that

there was no evidence that the only act charged in the redacted

indictment—creating a California corporation for Musick to

disguise the character of illegally earned income and repatriate

it—either obstructed or was intended to obstruct or impede the

due administration of the Internal Revenue Code.

B.

The government’s straightforward response to the defen-

dant’s principal argument was that the plain language of the

second clause of §7212(a) makes it clear that force and threats of

force are not required. That clause, under which the defendant

admits he was charged, makes it unlawful "in any other way

corruptly or by force or threats of force" to obstruct or impede

or endeavor to obstruct or impede the due administration of the

tax laws. (emphasis added). The first clause does require force

or threats of force, but the second clause is joined to the first by

the disjunctive "or," indicating a broad range of other activities

that may obstruct or impede administration of the tax laws.

The government also asserted that other courts had rejected

the contention that §7212(a) requires acts aimed at a particular

agent and identified one prosecution under the section that

only charged an obstruction or impediment to the agency’s

administration of the Code where no particular agent was

involved.

In arguing that the second clause of §7212(a) contemplates

and condemns a broad and inclusive range of conduct the gov-

ernment cited cases interpreting similar "omnibus clauses" in

parallel obstruction of justice statutes. See 18 U.S.C. §§ 1503,

1505. The courts have held, according to the government, that

similarly inclusive language in the general obstruction of jus-

25

tice statutes has been held to give notice of the range of acts that

are prohibited and criminalized by those statutes. Thus, the

broad language does not create a due process problem.

Noting that the defendant admits that §7212(a) is not am-

biguous, the government argued that resort to the scant legis-

lative history of §7212(a) is not required and, indeed, would be

improper. The government also contended that the litany of

cases in which force or threats of force were alleged does not

alter the plain meaning of the statute.

S.

Much of the discussion at oral argument centered on the

word “corruptly.” The question raised was whether the ob-

structing or impeding act charged in an indictment must be, in

and of itself corrupt, or whether an otherwise lawful act could

violate the statute by being carried out fora corrupt purpose or

in a corrupt manner. It is clear that §7212(a) does not prohibit

and punish money laundering, as such. It was suggested that

unless "corruptly" has some meaning that transforms an other-

wise legal actlinto forbidden action, the mere formation of a

corporation to repatriate allegedly tainted money could not be

considered a violation of this particularstatute. This discussion

related to the defendant's claim that neither count III nor the

evidence supported a conviction for violating §7212(a).

III.

A.

[1] Turning first to the defendant's principal argument—

that §7212(a) requires anallegation and proof of force or threats

of force directed at a specific agent employee—we find little

support for this contention. The first clause does require an

endeavor to intimidate or impede an officer or employee by

force or threats of force, or corruptly. The second clause,

however, while retaining the requirement that the accused act

1 At the time of the defendant's actions, there was no federal statute that made money

laundering a crime. In 1986, Congress enacted such a statute. See 18 U.S.C. §1956 (1982

ed. Supp. IV).

26

corruptly, greatly expands the reach of the statute by providing

that it is violated ifa person "in any other way,’ either corruptly

or by force or threats of force does the prohibited act. And here,

the prohibited act need not be an effort to intimidate or impede

an individual officer or employee. Instead, this clause prohibits

any act that either obstructs or impedes or endeavors to ob-

struct or impede, the "due administration" of the Internal

Revenue Code.

The defendant's interpretation would render the insertion of

"inany other way" and the use of "the due administration of this

title” in place of "any officer or employee of the United States"

in the second clause meaningless. The defendant argues that

the government has never used §7212(a) for prosecutions in

which there was not a claim of the use of force or threats of force

against an individual agent or employee. This proves nothing.

The defendant cited eight court of appeals decisions under

§7212(a), all of which involved force or threats of force against

government representatives. The government cited United States

v. Hatchett, 918 F.2d 631 (6th Cir. 1990). Among other charges in

Hatchett, one count sought conviction fora violation of §7212(a)

based on a scheme for obstruction of tax collections that was

aimed only at the Internal Revenue Service, not at an individual

agent.

As the Supreme Court stated in Parr v. United States, 363 U.S.

370,391,805S.Ct. 1171, 1183, 4 L.Ed.2d 1277 (1960),"We agree...

that the fact there is no reported decision involving similar

factual circumstances or legal theories is not determinative."

What is determinative is the clear language of the statute. The

second clause conspicuously omits the requirement that con-

duct be directed at “an officer or employee of the United States

government.” The defendant concedes that §7212(a) is not

ambiguous, and the different language used in the second

clause indicates an intent to sweep more broadly than the

language of the first clause.

B.

The remaining question with respect to the proper construc-

tion of §7212(a) concerns the twice-used word "corruptly." In

27

United States v. Martin, 747 F.2d 1404 (11th Cir. 1984), this court

dealt with a defendant's attempt to limit the meaning of §7212(a)'s

second clause. After reviewing the text and legislative history

of the statute, the court found that the legislative history does

not purport to limit the broad language of the statute. "Con-

§ress was not required to list in the legislative history every

conceivable corrupt endeavor toavoid waiving thestatute’s ap-

plication to one type of corrupt endeavor.” Id. at 1409.

The court then considered caselaw under the general ob-

Struction of justice statute, 18 U.S.C. §§ 1503, 1505, which

contain similar "corruptly endeavors" language. Quoting United

States v. Griffin, 589 F.2d 200, 206-07 (5th Cir.), cert. denied, 444

U.S. 825, 100S.Ct. 48, 62 L.Ed.2d 32 (1979), whichin turn quoted

Anderson v. United States, 215 F.2d 84, 88 (6th Cir.) cert. denied,

348 U.S. 888,75S.Ct. 208,99 L. Ed. 698 (1954), thecourtin Martin

stated:

The obstruction of justice statute was drafted with aneye

to "the variety of corrupt methods by which the proper

administration of justice may be impeded or thwarted, a

variety limited only by the imagination of the criminally

inclined."

747 F.2d at 1409.

[2] The meaning of “corruptly” as used in §7212(a) and in the

general obstruction of justice statute was explained more re-

cently in United States v. Reeves, 752 F2d 995 (5th Cir. ) cert.

denied, 474 U.S. 834, 106 S.Ct. 107, 88 L.Ed.2d 87 (1985). In Reeves

the district court had defined ‘corruptly" as meaning done

“with improper motive or bad or evil purpose.” Id. at 997. The

court of appeals disagreed, and reversed on this ground.

Reasoning that to define “corruptly” in this way would render

the "key word" redundantand could potentially raise questions

of overbreadth and vagueness, the court concluded that "cor-

ruptly" is used for the purpose of "forbidding those acts done

with the intent to secure an unlawful benefit either for oneself

or for another." Id. at 1001. The court made this determination

after considering cases under the general obstruction of justice

statute as well as the legislative history of §7212(a). In adopting

28

this definition, the Reeves court declined to follow an earlier

Fifth Circuit case decided under the "plain error" standard. See

United States v. Partin, 552 F.2d 621 (5th Cir. 1977). Partin was

one of the cass cited by this court in Martin and by which the

Court was "guided" in construing "corruptly" as used in §7212(a).

We agree with the definition adopted in Reeves. It comports

with our view that "corruptly" was used in §7212(a), as in the

general obstruction of justice statute, to prohibit all activities

that seek to thwart the efforts of government officers and

employees in executing the laws enacted by Congress. In a

system of taxation such as ours, which relies principally upon

self-reporting, it is necessary to have in place a comprehensive

statute in order to prevent taxpayers and their helpers from

gaining unlawful benefits by employing that "variety of cor-

rupt methods" that is "limited only by the imagination of the

criminally inclined.” Martin, 747 F.2d at 1409. We believe that

§7212(a) is such a statute and that the use of "in any other way

corruptly" in the second clause gives clear notice of the breadth

of activities that are proscribed.

IV.

[3] The question remains whether the evidence in this case

established a violation of §7212(a), even under the reading we

have given the statute. After examining the trial record, and

particularly the tapes of conversations between the defendant

and Musick, we find that the evidence is sufficient to support

the defendant’s conviction for violating §7212(a). Thus, the

district court correctly denied his motion for a judgment of

acquittal.

The record reveals that the defendant did create the Califor-

nia corporation for the purpose of enabling Musick to disguise

the character of illegally earned income and to repatriate it.

Popkin acted corruptly, moreover, becauseat least one intent in

creating the corporation was to secure an unlawful benefit for

his client. The purpose of the corporation went beyond repa-

triating money held ina foreign bank. It provided a means, in

creating a paper loss from inter-corporate transactions, by

which the funds held abroad and repatriated appeared to be

29

less than the actual amount of untaxed money that Musick

should have reported for 1983 and 1984.

At the first monitored meeting on March 26, 1985, Musick

Stated three objectives for which he was seeking the defen-

dant’s help:

1. He wanted to retrieve approximately $220,000 that he

had made on two cocaine deals in 1983 and 1984, froma

foreign account controlled by Mid-America Financial:

2. He wanted to "surface and start making a living, show-

ing a living" by getting into building and real estate in Cali-

fornia;

3. He wanted to avoid paying full income taxes on the

$220,000. As Musick said to the defendant, "I wanna pay

taxes a little bit, but, you know, I don’t wanna get raped

again, you know." He also wanted to avoid acknowledg-

ing an interest bearing foreign account.

Musick asked the defendant for suggestions because his

associates at Mid-America Financial were not tax specialists

and did not want any problems with the IRS while "doin a

service.” He also told the defendant that he was "very vulner-

able to IRS" and didn’t want to be tied into the foreign account

that was in Mid-America Financial’s name. With this back-

ground, the defendant advised Musick, "the best thing youcan

do is go into your own business" because capital infusion is

different from loans and other cash transactions. Ultimately the °

defendant advised Musick to issue stock in his new corporation

to Mid- America Financial for $200,000, then report "bad busi-

ness" and buy the stock back for $3,000 to $10,000. The people

at Mid- America could not get hurt—they were just providing

a service all along. Once the stock was repurchased for $3,000

to $10,000 Musick would again own 100% of the new corpora-

tion, and the corporation would have the $200,000. At the end

of these various steps, the defendant advised that this money

would be "just plain old money that you sold stock for."

The effect of all these maneuvers would be more than just to

disguise the source of the money thus repatriated. It would also

place in Musick’s wholly owned corporation the power to

30

determine when, if ever, the $200,000 earned in 1983 and 1984

would be reported for income tax purposes. The income tax

laws require annual reporting of all income in the year earned.

The entire system is built on the basis of annual reporting, and

any arrangement that permits a taxable entity to avoid report-

ing income in the taxable year when earned has the effect of

skewing the system and thus impeding or obstructing the due

administration of the tax laws.

A review of the entire record leaves no doubt that the defen-

dant endeavored to impede or obstruct the due administration

of the tax laws in the advice he gave Musick. He was clearly

aware that one of Musick's three purposes was to avoid paying

the full tax on his 1983 and 1984 drug-related earnings. Through-

out the conversation of March 26 the defendant referred to the

tax issue as well as the need to disguise the illegal source of the

money and repatriate it. While it involved "laundering" $200,000,

the plan the defendant proposed involved more than money

laundering. It was designed also to secure an unlawful tax

benefit for Musick, an endeavor that §7212(a) prohibits.

The judgment of the district court is AFFIRMED.

RONEY, senior circuit Judge, dissenting:

I respectfully dissent.

Although the indictment as originally written may have

made sufficient allegations to state a crime under this statute,

the amended indictment, which deletes the allegations con-

cerning the preparation of false returns, fails to do so. The

Government, by insisting upon prosecuting the defendant

under this statute distorts the meaning and purpose of the

statute. That the defendant committed acts in violation of the

criminal laws of the United States is not the question. If the acts

charged did not violate this statute, then the indictment should

have been dismissed and the Government should be forced to

proceed under the statutes which Congress intended for prose-

cution of defendant’s transgressions.

The indictment against Popkin alleged that he "did corruptly

obstruct and impede and endeavor to obstruct and impede the

due administration of Title 26, United States Code, by creating

31

a California corporation for Stephen Musick to disguise the

character of illegally earned income and repatriate it from a

foreign bank."

The purpose of forming this corporation was to repatriate

funds located in an offshore account back into this country. This

is a consummate example of money laundering which would

have been punishable under 18 U.S.C. §1956 had the acts been

committed after its passage in 1986. It is clear that the primary

purpose in forming the corporation was to get the money back

into thecountry. Nothing concerning taxes or much of Popkin’s

activity relied upon by the court was alleged in the indictment

in itself. After striking the accusations concerning filing false

returns, the indictment alleges only that the defendant created

a corporate entity for the purpose of disguising illegal income

in violation of Title 26. The indictment does not allege and the

Government even now does not satisfactorily explain how this

without more violates the tax laws. Although the illegal nature

of the funds would have been successfully concealed, Musick

still could have paid any tax obligations owed on the money

without violating the tax laws at all.

Itisimportant to bear in mind that the defendant has not been

convicted of aiding and abetting or assisting in the violation of

the tax laws under either 18 U.S.C. §7206 or under the general

federal aiding and abetting statute, 18 U.S.C. §2, but has instead

been charged with the substantive offense of corruptly imped-

ing or endeavoring to impede the due administration of the tax

laws. The record in this case does not establish that he has done

this.

The statute under which this indictment was brought is set

forth under "Sec. 7212 Attempts to interfere with the admini-

stration of internal revenue laws. (a) Corrupt or forcible inter-

ference.”

The defendant’s major argument is that an essentia! element

of Sec. 7212(a) of Title 26 is that the act or conduct of the accused

involve the use of force or threats against the person of a

particular government agent. Although this argument was

properly rejected by the court in this case, the word "corruptly"

should not be so easily written out of the statute. The court’s

3a

interpretation of this section of the tax law has the effect of

virtually eliminating the word "corruptly" from thestatute. The

statute requires that the defendant must "corruptly" obstruct or

endeavor to obstruct the execution of the tax laws. This should

mean something more than just obstructing the execution of

the laws as a matter of fact. There is nothing inherently "cor-

rupt" about the formation of a corporation.

Almost without exception, the reported cases concerning a

prosecution under this Act have involved some act that would

be either illegal under state or federal law or would tend to be

corrupt independently of its purpose. See United States v.

Ratcliff, 806 F.2d 1253 (5th Cir. 1986) (threatening telephone

calls to agent); United States v. Sciolino,, 505 F.2d 586 (2d Cir.

1974) (flash picture of agent and display of cartridge box);

United States v. Johnson, 462 F.2d 423 (2d Cir. 1972) (defendant

barred entry into building; said agents could enter over his

dead body; scuffle ensued and defendant assaulted arresting

agents); United States v. Varani, 435 F.2d 758 (6th Cir. 1970)

(letter threats of violence against agent); United States v. Rybick,

403 F.2d 599 (6th Cir. 1968) (defendant appeared in his doorway

holding a double-barreled shotgun); United States v. Guthrie,

385 F.2d 410 (7th Cir. 1967) (defendent threatened that "he

might shoot any government agents who approached him in

connection with the investigation"); United States v. Reeves, 752

F.2d 995 (5th Cir. 1985) (filing frivolous lien against residence of

IRS investigator). In each case, there was a retaliatory element

against the agent or the Internal Revenue Service.

Such is the case in the prosecutions under 18 U.S.C. §1503

cited in the Court's opinion. United States v. Griffin, 589 F.2d 200,

206-07 (5th Cir. 1979) (testifying falsely before a federal grand

jury); United States v. Partin, 552 F2d 621 (5th Cir. 1977) (induc-

ing witness not to appear and to testify falsely); Anderson v.

United States, 215 F.2d 84 (6th Cir. 1954) (effort toalter testimony

of witnesses).

In United States v. Hylton, 710 F.2d 1106 (Sth Cir. 1983), the

Court held that the filing of non-frivolous trespass complaints

against IRS agents did not violate §7212(a), even though the

action may have been motivated by a desire to impede the

33

agent's investigation. In other words, legal activity is not

proscribed by §7212(a), even though it is undertaken for the

purpose of impeding or obstructing the execution of the tax

laws.

The only case cited not dealing with actions interfering

directly with agents of the IRS is United States v. Williams, 644

F.2d 696 (8th Cir. 1981), in which the defendant was convicted

under §7212 for encouraging others to submit false W-4 forms.

In that case, the corrupt” action involved a direct interference

with and violation of IRS procedures and regulations.

In this case, the single allegationof activity is that the defen-

dant created a corporation, lawful act under the laws of Califor-

nia. Without the allegation of false tax returns, the defendant

is not charged with a corrupt act, but simply charged with

forming a corporation for the purpose of laundering money.

No other case under this section involves the setting up a

corporation for potential use as a tax shield. Every case cited

other than Williams in the statute's thirty-seven year history

involved actions which directly interfered with IRS agents

attempting to carry out their jobs. A reading of the statute itself

reveals why. Aside from the caption for the statute, virtually

the entire text is directed at either the direct or indirect use of

activity against agents of the IRS which have the effect of

obstructing or interfering with the enforcement of the tax law.

This is not a statute designed for that purpose. See, e.g., 18

U.S.C. §7201.

The legislative history reveals that Congress intended only to

prohibit interference with IRS agents, either through physical

or verbal threats or through other actions which impeded their

efforts to enforce the tax code. The court in United States v.

Walker, 514 F.Supp. 294, 304-05 (E.D.La. 1981), reviewed the

history of this provision and traced its origins to two previous

acts, Section 3601(c) of the Internal Revenue Code of 1939 and

Section 38 of the Internal Revenue Act of 1864, both of which

dealt solely with interference directed at agents of the IRS. The

Senate Report on §7212 also speaks only of acts which impeded

the ability of IRS agents to perform their function. S.Rep. No.

1622, 83rd Cong., 2d Sess. 1954, reprinted in [1954] U.S. Code

Cong. & Admin. News 4621, 5254.

The defendant was simply tried under the wrong statute. |

would reverse the conviction.

Te

Re he

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 90-8961

UNITED STATES OF AMERICA,

Plantitf-Appellee,

versus

GERALD M. POPKIN,

Defendant-A ppellant.

Appeal from the United States District Court for the

Northern District of Georgia

ON PETITION(S) FOR REHEARING

November 13, 199]

BEFORE: ANDERSON, Circuit Judge, RONEY*, and LIVELY**,

Senior Circuit Judges.

PER CURIAM:

The petition(s) for rehearing filed by appellant Gerald M.

Popkin is denied.

ENTERED FOR THE COURT:

United States Circuit Judge

*See Rule 34-2 (b), Rules of the U.S. Court of Appeals, for the Eleventh Circuit

**Honorable Pierce Lively, Senior Circuit Judge of the Sixth Circuit, sitting by designa

hion