Opposition Brief — Sturman v. United States

— {fs supreme Court, US.

;? 3 ies FiLED

Nos. 911367, 91-1533 and 91-1496

£4 99

In the Supreme Court of the Wn Stata |

OCTOBER TERM, 1991

DAVID A. STURMAN, PETITIONER

Vv.

UNITED STATES OF AMERICA

RALPH LEVINE AND MELVIN KAMINSKY.

PETITIONERS

Vv.

UNITED STATES OF AMERICA

REUBEN STURMAN, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

KENNETH W. STARR

Solicitor General

ROBERT S. MUELLER, III

Assistant Attorney General

SEAN CONNELLY

Atiorney

Department of Justic

Washington, D.C. 2052

202) 514-2217

QUESTIONS PRESENTED

1. Whether petitioners were properly convicted of

conspiracy to defraud the United States, in violation

of 18 U.S.C. 371, by impeding the lawful functions

of the Internal Revenue Service (Nos. 91-1533 and

91-1596 only).

2. Whether testimony of foreign witnesses from

court-ordered depositions conducted in Switzerland

with the participation of all interested parties and

counsel was properly admitted at petitioners’ crim-

inal trial.

3. Whether 18 U.S.C. 3505, which governs the ad-

missibility of foreign business records, violates the

Confrontation Clause (Nos. 91-1533 and 91-1596

only).

4, Whether petitioner Reuben Sturman was en-

titled to challenge factual assertions made by the

United States to the Swiss government in obtaining

Swiss bank records pursuant to a mutual assistance

treaty (No. 91-1596 only).

5. Whether the trial judge was required to recuse

himself (No. 91-1596 only).

6. Whether separate fines could be imposed on pe-

titioner Reuben Sturman for filing a false income tax

return (26 U.S.C. 7206(1)) and attempted tax eva-

sion (26 U.S.C. 7201) (No. 91-1596 only).

7. Whether the reporting requirements of the

Bank Secrecy Act violate the Fifth Amendment privi-

lege against compelled self-incrimination (No. 91-

1596 only).

(1)

TABLE OF CONTENTS

Page

Opinion below... nas 2

ai acai ee anes 2

Se ee 2

a 9

te . 29

TABLE OF AUTHORITIES

Cases:

Barber v. Page, 390 U.S. 719 (1968) 29

California v. Byers, 402 U.S. 424 (1971) 28

California Vv. Green, 399 U.S. 149 (1970) 20

Cardenas y. Smith, 733 F.2d 909 (D.C. Cir.

Coy V. Iowa, 487 U.S. 1012 (1988) 20

Dennis v. United States, 384 U.S. 855 (1966) 9,10

Gomez Vv. United States, 490 U.S. 858 (1989) 17

Grosso V. United States, 390 U.S. 62 (1968) 28

Idaho Vv. Wright, 110 S. Ct. 3139 (1990) 19, 24

Kirby Vv. Illinois, 406 U.S. 682 (1972) 17

Manson Vv. Brathwaite, 482 U.S. 98 (1977) 18

Marchetti v. United States, 390 U.S. 39 (1968) 28

Mattox v. United States, 156 U.S. 237 (1895) 19

Ohio Vv. Roberts, 448 U.S. 56 (1980) 12, 20, 24

Peretz v. United States, 111 S. Ct. 2661 (1991) 16-17, 18

Ruch v. Rock Island, 97 U.S. 693 (1878) 21

Selective Service System v. Minnesota Public In-

terest Research Group, 468 U.S. 841 (1984) 28

Spies v. United States, 317 U.S. 492 (1943) _. 27

Tanner v. United States, 483 U.S. 107 (1987) 9

United States v. Bilzerian, 926 F.2d 1285 (2d

Cir.), cert. denied, 112 S. Ct. 63 i> 3) as 11

United States v. Davis, 767 F.2d 1025 (2d Cir.

I ne CE ASD vn 24, 25

United States v. Franks, 723 F.2a 1482 (10th Cir.

1983), cert. denied, 469 U.S. 817 (1984) 27

United States v. Gifford, 892 F.2d 263 (3d Cir.

1989), cert. denied, 110 S. Ct. 3243 (1990) 16, 17

(IIT)

IV

Cases—Continued: Page

United States v. Hing Shair Chan, 680 F. Supp.

= I ee a ae 24

United States v. Inadi, 475 U.S. 387 (1986) Apa 19

United States v. Johnpoll, 739 F.2d 702 (2d Cir.),

cert. denied, 469 U.S. 1075 (1984) —....0000 25

United States v. Kelly, 892 F.2d 255 (3d Cir.

1989), cert. denied, 110 S. Ct. 3243 (1990) ....... 16

United States v. Lovasco, 431 U.S. 783 (1977) 17

United States v. Miller, 380 F.2d 1073 (9th Cir.

1987), cert. denied, 485 U.S. 1033 (1988)... 23-24

United States v. Miller, 425 U.S. 435 (1976) ........

United States v. Minarik, 875 F.2d 1186 (6th Cir.

SUED ceies hides deccnistabuhaisidih csnesselaihes hacia hearin decile dee oo 7,10, 11

United States v. Raddatz, 447 U. S. 667 (1980) . 18

United States v. Reynolds, 919 F.2d 435 (7th Cir.

1990), cert. denied, 111 S. Ct. 1402 (1991)... 11

United States v. Salim, 855 F.2d 944 (2d Cir.

STI iecaictcnasheabeiaed. ca eocahi ts adebantieaabemcbieescte.cee ...14, 16, 22

United States v. Sullivan, 274 U.S. 259 (1927) ....... 28

United States v. Tedder, 801 F.2d 1437 (4th Cir.

1986), cert. denied, 480 U.S. 938 (1987) ......... 24

White v. Illinois, 112 S. Ct. 736 (1992) ............ ... 19, 20

Wisniewski v. United States, 353 U.S. 901 (1957) 10

Constitution, treaty, statutes, regulation and rules:

U.S. Const. :

PI edt tndehicLZedecderentinnsoktcsesauntinices _....16, 17, 18

I AP cad ticisen coptecicetacabedstaeciakecses ks ead 17, 19, 28

PY, Fe eroy men ec er ee 17, 19 i

Confrontation Clause ................................8, 20, 22, 24

Mutual Assistance Treaty, U.S. Suite: 27 U:S.T. !

| ieee cree 13, 25

Bank Secrecy Act, 31 U.S.C. 5311 et seq. 0... =—8, 27

Court Reporters Act, 28 U.S.C. 753(b) 22

Internal Revenue Code (26 U.S.C.) :

(tee a ee ee oe 27

| Sere sas padaaihaaacemiae 10

Vv

Statutes, regulation and rules—Continued : Page

RE ee ree a

18 U.S.C. 1508 ................ Cenncetirar es MEGS 2

pi RT ee Wier nerae _.8, 23, 24

18 U.S.C. 3505 (b) -................... ON EP aS > 24

28 U.S.C. 455 _........... oo tees 26

/ Bik Ce |) Oe rn ae 26

31 U.S.C. 1059 _.__.. eae i ate —_ 2

RE Ty | | cease ae eeN ee BO Te Sn 27

31 U.S.C. 5322 ...... PNET RUT RA oy on mt Hie ee 2

a II Sckicccscctrcrsencescenmsidescdecenducoecomnmanorenammedaas 27

Fed. R. Civ. P.:

BN I ie scin woccvnce case MR SIE court se eae 13

| | een 7 13

| Rae Se een eae eliceeeis 13

Fed. R. Crim. P.:

| | ene MS ey

BU ID bossa: cnndenscnccesscncsraciedadaceeosaantieeniataaenemnae 12

| eae ea ae eae 12

RN ND csc sac csudoeenecateeuatecreesine melanie 12

BN IID eSicciaicc daasscaccossundoavinex trace genaeaaesie em 12, 14

BI MO dec sikacntncvnnensatacnascnasndcciicndecetanielanemeae 11, 12

Fed. R. Evid.:

MY BIRO 6.26 coos. ce-eateecss Renae vee Mee cE 24

ss & | Reine cee mnCnnare nant iicas |

Miscellaneous: .

4 D. Louisell & C. Mueller, Federal Evidence

(1980) Spun eda cuehaeeececdsoeduciewesntinatceiareaeaee 21

1 J. Stephen, A History of the Criminal Law of )

England (1883) . is; 20

Advisory Committee Notes on 1963 Amendment,

28 U.S.C. at 625 ....... a . ne Mato S 14

Iu the Supreme Court of the United States

OCTOBER TERM, 1991

No. 91-1367

DAVID A. STURMAN, PETITIONER

Vv.

UNITED STATES OF AMERICA

No. 91-1533

RALPH LEVINE AND MELVIN KAMINSKY,

PETITIONERS

Vv.

UNITED STATES OF AMERICA

No. 91-1596

REUBEN STURMAN, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

(1)

2

OPINION BELOW

The opinion of the court of appeals (Pet. App. la-

42a) is reported at 951 F.2d 1466.

JURISDICTION

The judgment of the court of appeals was entered

on October 24, 1991. Petitions for rehearing were

denied on January 8, 1992. The petition for a writ

of certiorari in No. 91-1367 was filed on February

26, 1992; the petition in No. 91-1533 was filed on

March 24, 1992; and the petition in No. 91-1596 was

filed on April 3, 1992. The jurisdiction of this Court

is invoked under 28 U.S.C. 1254(1).

STATEMENT

After a jury trial in the United States District

Court for the Northern District of Ohio, petitioners

were convicted of conspiracy to defraud the United

States, in violation of 18 U.S.C. 371, by impeding the

lawful functions of the Internal Revenue Service.’

Petitioner Reuben Sturman was convicted of several

additional offenses: five counts of attempted income

tax evasion (26 U.S.C. 7201); five counts of making

and subscribing a false income“tax return (26 U.S.C.

7206(1)); four counts of willfully failing to main-

tain records and file reports of transactions and re-

lationships with a foreign financial institution (31

U.S.C. 1059, as recodified at 31 U.S.C. 5322, effec-

tive September 13, 1982); and one count of obstruct-

ing justice (18 U.S.C. 1503). The district court sen-

1 Unless otherwise noted, references are to the petition ap-

pendix in No. 91-1367.

* Petitioner Kaminsky entered a conditional guilty plea and

joined in the appeal in this case.

3

tenced petitioner David Sturman to a four-year

prison term; in addition, he was fined $16,000 and

ordered to pay $73,651.55 in costs of prosecution

equally with petitioner Reuben Sturman. Petitioner

Ralph Levine was sentenced to a three-year prison

term and a $10,000 fine. Petitioner Melvin Kaminsky

was sentenced to a one-year prison term, to be fol-

lowed by two years’ probation and a $50,000 fine.

Petitioner Reuben Sturman was sentenced to a total

of ten years’ imprisonment, was fined $2,460,000, and

was ordered to pay $73,651.55 in costs of the prose-

cution equally with petitioner David Sturman. The

court of appeals affirmed. Pet. App. la-42a.

1. The evidence at trial showed that, from 1968

through 1987, petitioners conspired among them-

selves and with others to obstruct the lawful func-

tions of the IRS in the assessment and collection of

taxes owed by Reuben Sturman. Reuben Sturman

engaged in the production, distribution, and sale of

sexually explicit books and other materials. David

Sturman was responsible for his father Reuben’s

businesses in the San Francisco area. Levine ran

the Nevada businesses, while Kaminsky ran Reuben

Sturman’s principal business, Sovereign News Com-

pany. Pet. App. 2a-3a.

Reuben Sturman skimmed cash profits from his

adult bookstores, peep shows, and other businesses.

He concealed his ownership of those businesses by

establishing more than 150 domestic corporations and

five foreign corporations in countries with strict

secrecy policies. The domestic companies were owned

by nominees and run by fictitious officers. Reuben

Sturman also opened several Swiss bank accounts

with the stated goal of ‘‘conceal[ing] his money”’

and “avoid[ing] taxes.’”’ Money was transferred to

4

the Swiss accounts through a series of transfers in-

volving the domestic and foreign companies. Pet.

App. 2a-8a; Gov’t C.A. Br. 3-35.

Reuben Sturman did not report all of his income

and corporate transactions to the IRS; indeed, he re-

ported less than 11 percent of his income between

1978 and 1982. His unreported income for those

years was $2,735,713, creating a tax liability of

$1,442,945. Moreover, he improperly failed to dis-

close on tax forms his various foreign accounts. Pet.

App. 3a; Gov’t C.A. Br. 31-35.

2. David Sturman, Levine, and Kaminsky, in addi-

tion to running various of Reuben Sturman’s busi-

nesses, helped conceal Reuben’s overall assets and

income in several ways. For example, David Stur-

man was the director and nominee shareholder of

Societe Financiere, a Liberian shell company used

by Reuben Sturman to receive and funnel proceeds

from his adult entertainment businesses. David

Sturman also had signature authority over Societe

Financiere’s Swiss bank account, as well as more

than 20 other Swiss accounts that were used to con-

ceal assets and income. David and Reuben Sturman

signed the names of fictitious persons to most of the

accounts. For example, in 1974, Reuben Sturman

used a false Dutch passport to open two Swiss ac-

counts under the alias of Paul Bekker. When Reuben

Sturman was later arrested by Swiss authorities for

falsifying identification papers, the authorities seized

a document signed by Sturman in which “Paul Bek-

ker” granted power of attorney for those two ac-

counts to David Sturman. Reuben Sturman admitted

to Swiss authorities that he used the account to re-

ceive proceeds funneled from his American busi-

nesses. Pet. App. 2a, 9a; Gov’t C.A. Br. 12-13, 15,

57-58.

5

Similarly, Levine aided Reuben Sturman in con-

cealing assets from the IRS. Jack Marcum, who was

employed by Levine and Reuben Sturman, testified

that at least $70,000 per month from the Nevada

businesses went unrecorded. Levine also had signa-

ture authority (under various aliases) over several

Swiss bank accounts, which were never reported to

the IRS. Finally, Kaminsky, the manager of Reuben

Sturman’s principal business, provided substantial

assistance to Reuben Sturman’s efforts to conceal his

financial interests from the IRS. Pet. App. 9a-10a;

Govt’s C.A. Br. 5-6.

3. In 1985, the district court issued a pretrial or-

der authorizing overseas depositions of Swiss bank

officials pursuant to Fed. R. Crim. P. 15. Pet. App.

43a. Those depositions, and the trial itself, were de-

layed several years as petitioners raised various ob-

jections both in this country and in Switzerland.

See id. at 44a. In an order dated May 4, 1989, the

district court noted that “fo]n April 11, 1989, the

Swiss Supreme Court denied all oppositions filed con-

cerning the Swiss depositions previously ordered by

this Court.” Jd. at 48a. The order noted that the

depositions would be held before Swiss Magistrate

Benedikt Holdener in Zurich during the week of June

5-9, 1989. Ibid. The court ordered that “direct exam-

ination (as opposed to cross-examination)” questions

for the five Swiss witnesses be submitted in writing

to Magistrate Holdener no later than May 22, 1989.

Id. at 48a-49a. The government was ordered to pay

the travel expenses for petitioners and their attor-

neys. Jd. at 45a, 49a.

Petitioners were represented at the depositions by

eight American attorneys and six Swiss attorneys.‘

* Although petitioners all had the right to be present,

Reuben Sturman was the only petitioner who personally at-

tended the depositions,

6

At the outset of each deposition, Magistrate Holdener

warned the witness of the penalties under Swiss law

for giving false testimony. Holdener then posed to

each witness the questions submitted by the govern-

ment. The proceedings were conducted in the German

language, but English translations were provided by

an official Swiss interpreter. In addition, the six bi-

lingual Swiss attorneys provided the defense team

with a virtually verbatim translation of the German

questions and answers. After direct examination, de-

fense counsel submitted oral questions to Holdener,

who again posed them to the witness. All questions

posed by defense counsel, except one relating to the

compensation of one witness, were asked of the wit-

ness. Although an American court reporter was

present, Holdener contemporaneously dictated the

official, substantially verbatim summary version of

the testimony. At the conclusion of each deposition,

the witness read Holdener’s summary, was permitted

to correct any inaccuracies, and then signed it. Pet.

App. 21a; Gov’t C.A. Br. 91-92.

4. The trial of this case lasted three months. The

written summaries of the Swiss depositions that were

read into the record at trial in question and answer

form occupied fewer than 60 of the 5000 pages of

transcript. See C.A. Jt. App. 2003-2059. The deposi-

tions concerned some of the Swiss bank accounts that

petitioners had opened under various names. J/bid.

The district court admitted the depositions after

reviewing them and considering defense objections.

The court found that “the defendants were entitled to

be present there, they were entitled to have counsel

there, counsel for the government was entitled to have

questions read, and it appears to me that counsel for

the defendants were entitled to submit questions to

<<

7

the magistrate for answers by the witnesses.’’ Pet.

App. 21a.

5. The court of appeals affirmed petitioners’ con-

victions. Pet. App. la-42a. The court first held that

petitioners properly were convicted of conspiring to

defraud the United States, in violation of 18 U.S.C.

371. Pet. App. 3a-7a. The court distinguished its

prior decision in United States v. Minarik, 875 F.2d

1186 (6th Cir. 1989). Pet. App. 5a-7a. In addition,

the court rejected challenges by petitioners David

Sturman and Levine to the factual sufficiency of the

evidence and to the factual support for the existence

of a single conspiracy. /d. at 8a-12a.

The court of appeals next held that the Swiss depo-

sitions had properly been admitted. Pet. App. 20a-

24a. The court held that there had been substantial

compliance with Fed. R. Crim. P. 15 and that peti-

tioners’ constitutional rights had been protected. Pet.

App. 22a-23a. The court explained that ‘[d]eposi-

tions taken in foreign countries cannot at all times

completely emulate the United States’ method of ob-

taining testimony” but that “[h]ere, all steps were

taken to ensure [petitioners’] rights while respecting

the legal rules established in a different country.” Jd.

at 22a. Addressing petitioners’ specific challenges to

the Swiss procedures, the court noted that “[a]ll de-

fense questions, with just one exception, were sub-

mitted to the witnesses so that objections and deter-

minations on admissibility could be litigated later.”

Ibid. (footnote omitted). The court also noted that,

“Ta]lthough the witnesses were not given an oath,

[the] defense conceded that each witness was told

the penalties for giving false testimony.” Jbid. The

court found that petitioners “failed to point to any

way in which they were prejudiced by the procedures

used.” Jd. at 23.

8

The court also rejected claims that Swiss Magis-

trate Holdener should not have been allowed to pre-

side over the depositions because he was not impartial.

Pet. App. 23a. The court noted that, although Swiss

law “permits a person to serve as both magistrate

and prosecuting attorney,” petitioners “failed to

establish evidence that Magistrate Holdener’s hand-

ling of the deposition unfairly prejudiced [petition-

ers] or that the testimony could be considered un-

reliable.” Ibid. Finally, the court rejected challenges

to the manner in which one Swiss deponent had iden-

tified Reuben Sturman as a former customer. /d.

at 23a-24a.

The court further held that “fv]olumes of business

records from seven foreign banks” had properly been

admitted at trial pursuant to 18 U.S.C. 3505. Pet.

App. 39a-42a. The court explained that the statutory

prerequisites to admission of foreign business records

had been satisfied, and that the statute did not violate

the Confrontation Clause. Jbid.

Finally, in addition to other claims not renewed by

petitioners in this Court, the court of appeals rejected

several claims that only petitioner Reuben Sturman

renews. The court held that Reuben Sturman was not

entitled to challenge factual assertions made by the

United States in obtaining Swiss bank records pursu-

ant to a mutual assistance treaty (Pet. App. 26a-

31a); that the district court was not required to

recuse itself (id. at 24a-26a); that the district court

permissibly imposed consecutive fines for filing a false

income tax return and for attempted tax evasion

(i?. at 36a-37a); and that the reporting require-

ments of the Bank Secrecy Act do not violate the

Fifth Amendment privilege against compelled self-

incrimination (id. at 34a-36a).

9

ARGUMENT

1. Petitioners Levine and Kaminsky (91-1533 Pet.

4-12) and petitioner Reuben Sturman (91-1596 Pet.

29-30) seek further review of their claim that they

were improperly convicted of conspiring to defraud

the United States, in violation of 18 U.S.C. 371.

There was overwhelming evidence that petitioners

conspired to conceal Reuben Sturman’s assets from

the Internal Revenue Service. Petitioners claim, how-

ever, that such a conspiracy should not be actionable

under 18 U.S.C. 371 as a conspiracy to defraud the

United States. That claim is meritless.

The federal conspiracy statute, 18 U.S.C. 371, pro-

hibits conspiracies “either to commit any offense

against the United States, or to defraud the United

States, or any agency thereof in any manner or for

any purpose.” This Court has broadly interpreted

the “defraud” clause of the conspiracy statute, hold-

ing that it “reaches any conspiracy for the purpose

of impairing, obstructing, or defeating the lawful

function of any department of Government.” Tanner

v. United States, 483 U.S. 107, 128 (1987) (quota-

tion omitted). Accordingly, the Court has rejected

any suggestion that the “offense” and “defraud”

clauses are mutually exclusive, such that a prosecu-

tion under the latter clause turns on whether defend-

ants conspired to commit a specific substantive of-

fense. For example, in Dennis vy. United States, 384

U.S. 855 (1966), the defendants were convicted of

conspiring to defraud the United States by filing

false affidavits with the National Labor Relations

Board. They argued that the case involved “a con-

spiracy to commit the substantive offense of filing

false statements in violation of 18 U.S.C. 1001” and

that their misconduct ‘‘may not properly be laid under

10

the conspiracy-to-defraud clause of § 371.” 384 USS.

at 862-863. This Court held that “[t]he fact that

the events [charged] include the filing of false state-

ments does not, in and of itself, make the conspiracy-

to-defraud clause of § 371 unavailable to the prose-

cution.” Jd. at 863-864.

Petitioners claim (91-1533 Pet. 5-12) that the

Sixth Circuit’s decision in this case conflicts with its

prior decision in United States v. Minarik, 875 F.2d

1186 (1989). Even if petitioners were correct, fur-

ther review by this Court would not be warranted to

resolve an intra-circuit conflict. Wisniewski v. United

States, 353 U.S. 901, 902 (1957) (per curiam).

In any event, the court of appeals in this case care-

fully distinguished its prior holding in Minarik. See

Pet. App. 4a-7a. Minarik held that the offense and

defraud clauses of the conspiracy statute were mu-

tually exclusive “as applied to the facts of [that]

case.” 875 F.2d at 1187. The facts in Minarik, which

involved the concealment of assets after a taxpayer

had received assessment notices, fell squarely within

the prohibition contained in 26 U.S.C. 7206(4) relat-

ing to post-assessment concealment. See 875 F.2d at

1187, 1194-1195. Although the government could.

have brought a straightforward charge of conspiracy

to violate 26 U.S.C. 7206(4), it instead proceeded

under the defraud clause while changing its theory

of the case several times without further specifying

the charge. See 875 F.2d at 1187, 1190. Notwith-

standing broader dicta in the opinion, the Minarik

court’s actual holding was very narrow: “[WJhere

the duties of a citizen are as technical and difficult

to discern as they are when a taxpayer, before levy,

engages in otherwise legitimate activities that may

make ultimate collection more difficult, we hold that

11

a Congressional statute closely defining those duties

takes a conspiracy to avoid them out of the defraud

clause and places it in the offense clause.” Jd. at

1196. The court took pains ‘‘to emphasize the limits

of our holding.” Jd. at 1195-1196.

We believe that Minarik was wrongly decided even

on its own facts. The decision finds no support in

the language of the statute; it conflicts with Dennis

and TJanner; and its interpretation of the conspiracy

statute is unworkable in practice. But even assum-

ing that Minarik was correcily decided, the court of

appeals correctly declined to extend it to the very

different factual setting of this case. Unlike Minarzk,

the conspiracy here was far broader than the viola-

tion of a single substantive statute. As the court of

appeals explained (Pet. App. 7a), “[o]nly the de-

fraud clause can adequately cover all the nuances of

a conspiracy of the magnitude this case addresses.”

As the court of appeals also explained (ibid.), the

“chief concern” in Minarik “was that the govern-

ment, by constantly changing the prosecution theory,

never adequately informed the defendant of the

charges against him.” Here, in ‘contrast, “[t]he

prosecution has presented the case clearly and no

confusion as to the charges is evident.” Jbid.*

2. The Swiss deposition testimony was properly

admitted under Fed. R. Evid. 804(b)(1) and Fed.

R. Crim. P. 15(e). Rule 804(b)(1) allows the ad-

4Other courts have declined to give Minarik the broad

reading petitioners seek to accord it, and this Court has de-

nied certiorari notwithstanding claims that those decisions

conflict with Minarik. See, e.g., United States v. Bilzerian,

926 F.2d 1285 (2d Cir.), cert. denied, 112 S. Ct. 63 (1991);

United States v. Reynolds, 919 F.2d 435, 439 (7th Cir. 1990),

cert. denied, 111 S. Ct. 1402 (1991).

12

mission of testimony given by unavailable witnesses

at ‘“‘a deposition taken in compliance with law in the

course of the same or another proceeding, if the party

against whom the testimony is now offered * * * had

an opportunity and similar motive to develop the

testimony by direct, cross, or redict examination.”

Rule 15(e) likewise provides that “‘[a]t the trial or

upon any hearing, a part or all of a deposition, so

far as otherwise admissible under the rules of evi-

dence, may be used as substantive evidence if the

witness is unavailable.”

The procedures followed in ordering and taking

the Swiss depositions complied with Fed. R. Crim. P.

15. Subsection (a) of that Rule allows depositions

“Tw ]henever due to exceptional circumstances of the

case it is in the interest of justice that the testimony

of a prospective witness of a party be taken and

preserved for use at trial.” Petitioners do not chal-

lenge the district court finding that this case satisfied

the prerequisites of subsection (a). Subsection (b)

of the Rule requires adequate advance notice, and sub-

section (c) requires government payment of defense

travel and subsistence expenses. Again, petitioners

do not suggest that the Swiss deposition proceedings

failed to satisfy these provisions.

Petitioners claim that the Swiss depositions failed

to comply with subsection (d) of Rule 15. That pro-

vision, in pertinent part, reads as follows:

(d) How Taken. Subject to such additional con-

ditions as the court shall provide, a deposition

shall be taken and filed in the manner provided

in civil actions except as otherwise provided in

these rules, provided that (1) in no event shall

a deposition be taken of a party defendant with-

out that defendant’s consent, and (2) the scope

13

and manner of examination and cross-examina-

tion shall be such as would be allowed in the trial

itself.

The depositions in this case were “taken” in the

manner provided in civil actions. Although cyoss-

examination was not done “directly by counsel” (91-

1367 Pet. 22), the civil rules expressly provide for

“depositions upon written questions” (Fed. R. Civ. P.

31). Similarly without merit are complaints (91-

1367 Pet. 16-17, 22-24) that the Swiss witnesses were

not placed under oath and there was no “verbatim

transcript.” The federal civil discovery rules incorpo-

rated by Criminal Rule 15(d) recognize that, as the

court of appeals explained (Pet. App. 22a), “[d]epo-

sitions taken in foreign countries cannot at all times

completely emulate the United States’ method of ob-

taining testimony.” Thus, Fed. R. Civ. P. 28(b) pro-

vides: “Evidence obtained in response to a letter

rogatory need not be excluded merely for the reason

that it is not a verbatim transcript or that the testi-

mony was not taken under oath or for any similar

deparure from the requirements for depositions taken

within the United States under these rules.” * The

Advisory Committee notes to Rule 28 explain:

[T]he courts of other countries may be ex-

pected to follow their customary procedure for

*The Mutual Assistance Treaty, U.S.-Switz., 27 U.S.T.

2019, T.I.A.S. No. 8302 (1973) (reprinted in part at Pet.

App. 76a-83a), allows a request for assistance to be made

by the “Central Authority” (defined as “the Attorney Gen-

eral or his designee’) and thus obviates the need for an

American court to issue a letter rogatory. No substantive

difference flows from the fact that a letter rogatory was

not issued in this case, however, and the clear intent of

the federal rules is that foreign depositions need not follow

the precise form of depositions taken in this country.

14

taking testimony. In many non-common-law

countries the judge questions the witness, some-

times without first administering an oath, the at-

torneys put any supplemental questions either to

the witness or through the judge, and the judge

dictates a summary of the testimony, which the

witness acknowledges as correct. The last sen-

tence of [Rule 28(b)] provides, contrary to the

implications of some authority, that evidence re-

corded in such a fashion need not be excluded on

that account. The specific reference to the lack

of an oath or a verbatim transcript is intended to

be illustrative.

Notes of Advisory Committee on Rules—1963

Amendment (citations omitted), 28 U.S.C. at 625.

Nor is there merit to the claim (91-1367 Pet. 16-

17, 22-24) that clause (2) of Fed. R. Crim. P. 15(d)

disallows foreign depositions unless witnesses are

placed under oath, there is a verbatim transcript, and

the examination and cross-examination are done di-

rectly by counsel. While that clause requires that ‘‘the

scope and manner of examination and cross-examina-

tion shall be such as would be allowed in the trial

itself,” it plainly addresses the method of “examina-

tion” rather than the method in which depositions are

“taken.” As the court explained in United States v.

Salim, 855 F.2d 944, 950-951 (2d Cir. 1988) (em-

phasis in original; some citations omitted) :

Rule 15(d) begins incorporating the manner of

taking a deposition in a civil case. It then dis-

tinguishes the manner of examining a witness,

and imposes some additional limitations with re-

spect to the scope and manner of the latter. * * *

Restrictions on the manner in which the deposi-

tion is taken concern such issues as the person

15

before whom the deposition should be taken, how

the deposition should be recorded, and how tran-

scripts should be certified and filed. By contrast,

the limitation on the scope and manner of exam-

ination concerns the permissible subject matter

and form of the questions, respectively, that may

be asked of the witness. This latter provision of

the rule appears to require only that the exam-

ination and cross-examination be conducted by

properly formulated questions in a manner rea-

sonably calculated to elicit admissible testimony.

Thus, the additional restriction on scope found

in Rule 15(d) limits questioning to those matters

permitted under Fed. R. Evid. 401, whereas the

rule applicable to civil cases permits a much

broader inquiry, see Fed. R. Civ. P. 26(b). The

restriction on the manner of examination limits

the form of the questions, and concerns such

matters as the entitlement to ask leading ques-

tions of a hostile witness, see Fed. R. Crim.

P. 15(d) (2) advisory committee note (1974).

Contrary to petitioner David Sturman’s claim

(91-1367 Pet. 22-24), there is no conflict among the

federal courts of appeals concerning the application

of Rule 15. None of the decisions he cites found that

a deposition was properly excluded or improperly ad-

mitted in evidence, nor has any court held that pro-

cedures such as those followed here do not satisfy

Rule 15. Indeed, courts have upheld foreign deposi-

tion procedures far less protective of defendants’

rights than those followed here. For example, Salim

not only involved the same procedures that petitioner

complains about here (e.@., questioning by a French

magistrate rather than the attorneys directly, partial

summaries by the magistrate rather than a complete

verbatim transcription, lack of forma] oath) but, in

addition, neither defendant nor his counsel were al-

16

lowed to attend the deposition. See 855 F.2d at 946-

952 (describing and upholding procedures). Simi-

larly, in other cases, defendants were not personally

allowed to confront the foreign deponents. £.g.,

United States v. Gifford, 892 F.2d 263, 264-265 (38d

Cir. 1989), cert. denied, 110 S. Ct. 32438 (1990)

(absence of incarcerated defendant from Belgian

depositions did not violate Rule 15); United States v.

Kelly, 892 F.2d 225, 260-263 (8d Cir. 1989), cert.

denied, 110 S. Ct. 3243 (1990) (companion case to

Gifford).® While the exact procedures vary from case

to case and from country to country, the federal

courts of appeals consistently have interpreted Rule

15 as flexible enough to accommodate those procedural

differences.

Nor is there merit to petitioners’ claims that taking

the Swiss depositions and admitting the deposition

testimony were unconstitutional.

a. Petitioner David Sturman argues, for the first

time in this Court, that the taking of the Swiss depo-

sitions violated his Article III right to have a federal

judge preside at all critical stages of his criminal

“trial.” 91-1367 Pet. 19-21 (citing Peretz v. United

6 Petitioner David Sturman claims that “[t]he Third Cir-

cuit has emphasized that the procedures the Third Circuit

approves ‘are in stark contrast to those approved [by the

Second Circuit] in United States v. Salim’ ” (91-1367 Pet. 24,

quoting Kelly, 892 F.2d at 262 n.6). But no Third Circuit

(or other federal) case suggests, let alone holds, that the

procedures followed in Salim are legally inadequate. On the

contrary, the Third Circuit in both Kelly and the companion

case of Gifford, like the Sixth Circuit in the present case,

cited Salim with full approval. The Kelly footnote cited by

petitioner, far from condemning the Salim procedures, simply

illustrated that the claim raised in Kelly was factually even

weaker than the claim rejected in Salim.

17

States, 111 S. Ct. 2661, 2665 (1991)); see Gomez v.

United States, 490 U.S. 858, 876 (1989)). Since no

party raised that claim either in the district court or

on appeal,’ this Court should not review it. United

States v. Lovasco, 431 U.S. 783, 788 n.7 (1977).

In any event, David Sturman’s Article III claim is

without merit. United States District Judge George

W. White presided at every stage of trial. The deci-

sion whether to admit into evidence part or all of the

depositions was made at trial solely by Judge White,

and the pretrial depositions were not part of the

“trial” for Article III purposes. While a Rule 15 pre-

trial deposition may be a critical stage of the “prose-

cution” (91-1367 Pet. 19, quoting Gifford, 892 F.2d

at 265)—in the same sense that a post-indictment

police lineup is a critical stage of a prosecution for

Fifth and Sixth Amendment purposes (see generally

Kirby v. Illinois, 406 U.S. 682 (1972))—it is not,

any more than a post-indictment lineup, a stage of

“trial” requiring the presence of an Article III judge.

This Court’s recent decision in Peretz, rather than

supporting the Article III claim, actually undercuts it.

The Court in Peretz held that “no [Article III] struc-

tural protections are implicated” by allowing a magis-

™The trial objections, which were argued and/or adopted

by petitioner David Sturman on appeal, were “based upon

failure to comply with Rule 15, as well as deprivation of the

confrontation clause (Sixth Amendment), a deprivation of

due process (Fifth Amendment), a denial of assistance of

counsel (Sixth Amendment), and a denial of a fair trial

(Fifth and Sixth Amendments).” David Sturman C.A. Br. 49

(citing trial transcript). In addition, David Sturman claimed

that the Swiss Supreme Court had barred deposition testi-

mony from being used against him. See id. at 49-50. No-

where, however, did any petitioner claim an Article III vio-

lation.

18

trate to conduct jury selection. 111 S. Ct. at 2669.

The Court observed, as it had in a prior decision up-

holding a magistrate’s power to make factual findings

and legal recommendations on pretrial motions to sup-

press evidence, that the “ultimate decision” whether

to empanel a jury is made by the district court. /bid.

(quoting United States v. Raddatz, 447 U.S. 667, 683

(1980)). The Article III claim in this case is even

weaker than those rejected in Peretz and Raddatz,

because Judge White delegated none of his judicial

power to Swiss Magistrate Holdener. Instead, the

Swiss magistrate’s role in the pretrial collection of

evidence was no different for Article III purposes

than a police officer’s supervision and direction of a

critical pretrial lineup.

For similar reasons, there is no merit to petitioner

David Sturman’s claim (91-1367 Pet. 21-22) that the

court of appeals’ decision “ignores this Court’s hold-

ings that due process requires a disinterested judge.”

The “disinterested judge” in this case was District

Judge White, who presided over all aspects of the

trial. Petitioners’ due process rights were not violated

unless the participation of Swiss Magistrate Holdener,

whose alleged conflict of interest was his Swiss-

authorized role as both prosecutor and magistrate,

rendered the depositions themselves fundamentally

unfair and unreliable. Cf. Manson v. Brathwaite, 432

U.S. 98 (1977) (discussing when procedures under-

lying pretrial identification may be so unreliable as to

violate due process). The courts below properly found,

in a factbound determination not warranting further

review, that petitioners “failed to establish evidence

that Magistrate Holdener’s handling of the deposi-

tion[s] unfairly prejudiced the defendants or that the

testimony could be considered unreliable.” Pet. App.

19

23a; see also C.A. Jt. App. 1984 (district court find-

ing that defense has not “made a case of bias’).

b. Petitioner David Sturman also claims, as do

petitioners Levine and Kaminsky (91-1533 Pet. 13-18)

and petitioner Reuben Sturman (91-1596 Pet. 23-25),

that admitting the deposition testimony violated their

Fifth and Sixth Amendment rights to examine and

confront witnesses. This Court, however, has never

interpreted the Constitution to prohibit all out-of-

court statements from being admitted at trial. See

White v. Illinois, 112 S. Ct. 736, 744 (1992) (“the

admissibility of hearsay statements raises concerns

lying at the periphery of those that the Confrontation

Clause is designed to address”). On the contrary,

hearsay evidence may be admitted without violating

the Constitution as long as it bears adequate indicia

of reliability. Idaho v. Wright, 110 S. Ct. 3139, 3146

(1990) (quoting Ohio v. Roberts, 448 U.S. 56, 66

(1980) ).*° Where the evidence falls within a “firmly

rooted” hearsay exception, no further showing of re-

liability is required. Jbid.

The hearsay exception under which the deposition

testimony was admitted—the ruling allowing “for-

mer testimony” of an unavailable witness (Fed. R.

Evid. 804(b) (1) )—undeniably is firmly rooted. This

Court traced the history of the former testimony ex-

ception in Mattox v. United States, 156 U.S. 287

(1895), and more recent cases consistently have held

8A further showing of witness unavailability is necessary

where “the challenged out-of-court statements were made in

the course of a prior judicial proceeding.” White v. Illinois,

112 S. Ct. 736, 741 (1992) (citing United States v. Inadi,

475 U.S. 387, 394 (1986)). Petitioners do not dispute that

the Swiss witnesses were unavailable to testify at trial.

ae

20

that hearsay testimony admitted under the former tes-

timony exception satisfies the Confrontation Clause.

Ohio vy. Roberts, 448 U.S. at 68-73; California v.

Green, 399 U.S. 149, 165-166 (1970).

Nor is there force to petitioners’ suggestion that

the Swiss depositions were equivalent to the affidavits

that this Court’s Confrontation Clause cases con-

demn. This Court has recognized that “the particular

vice that gave impetus to the confrontation claim

was the practice of trying defendants on ‘evidence’

which consisted solely of ex parte affidavits or deposi-

tions secured by the examining magistrates.” Cali-

fornia v. Green, 399 U.S. at 156; see also White v.

Illinois, 112 S. Ct. at 745 (Thomas, J., concurring)

(common law right of confrontation originated to

curtail evidence obtained through magistrates’ in-

terrogation of witnesses at pretrial proceedings in

which “ ‘[t]he prisoner had no right to be, and prob-

ably never was, present’’’) (quoting 1 J. Stephen,

A History of the Criminal Law of England 221

(1883) ). Thus, this Court has never required that

former testimony be taken under procedures that ex-

actly mirror the trial setting. See, e.g., Ohio v. Rob-

erts, 448 U.S. at 72-73; California v. Green, 399 U.S.

at 165-168; Barber v. Page, 390 U.S. 719, 725

(1968). The fact that petitioners and their counsel

were allowed to be present at the deposition means

that, unlike most admissions at trial of out-of-court

statements under a hearsay exception, petitioners had

the opportunity for a “face-to-face encounter” (Coy

v. lowa, 487 U.S. 1012, 1017 (1988) ) with the depo-

nents. In addition, petitioners were permitted, through

Magistrate Holdener, to pose whatever questions they

wished to the witnesses. Unlike parties against whom

hearsay is admitted under other exceptions, petition-

21

ers thus had the opportunity to cross-examine the

deponents.°

Petitioners’ specific objections to the procedures fol-

lowed in the Swiss depositions also lack merit. Par-

ticularly unavailing is petitioners’ objection to the

lack of a verbatim transcript, because it was peti-

tioner David Sturman’s own Swiss attorneys who

objected to the government’s Suggestion that video-

tape be used and an American court reporter be pres-

ent. See Gov’t C.A. Br. 93 & n.94. In any event,

evidence admitted under the former testimony excep-

tion traditionally was introduced by a witness re-

counting the substance of the prior testimony in cases

in which a stenographic transcript was unavailable."

See, e.g., Ruch vy. Rock Island, 97 U.S. 693, 694

(1878)."* Nor did the procedures by which the ques-

® Magistrate Holdener excluded only one question, con-

cerning the salary of one of the witnesses, and petitioners

have not asserted that that single exclusion prejudiced them

in any way.

1 David Sturman’s Swiss attorney, in objecting to the

Swiss government’s order. that the deposition be held, stated:

[I]t should be noted that the use of a videotape, as asked

for in the request for judicial assistance, is not pro-

vided for by the Zurich Code of Penal Procedure and is,

therefore, illegal and that the presence of a US court

reporter is contrary to art. 271 of the Swiss Penal Code.

C.A. Jt. App. 958.

11 Given that former testimony may be proved by a witness

simply recounting what the declarant said, petitioners’ un-

supported contention (91-1367 Pet. 27) that the former testi-

mony exception requires a verbatim transcript is mistaken.

See 4 D. Louisell & C. Mueller, Federal Evidence § 487, at

1079 (1980).

2 Petitioner’s claim (91-1367 Pet. 27-28), raised for the

first time in this Court, that the lack of a verbatim transcript

22

tions were posed to and answered by the witnesses

render their testimony so “inherently unreliable”

that the Confrontation Clause was violated. See

United States v. Salim, 855 F.2d at 954-955 (reject-

ing Confrontation Clause challenge to foreign deposi-

tions taken in similar manner). The jury was en-

titled to weigh the procedural context in its consid-

eration of the depositions because the district court

instructed that the Swiss judicial system operates ‘‘a

lot differently” than our system (C.A. Jt. App. 2001)

and specifically pointed out that the deposition read-

ings would reflect that the witnesses were permitted

to correct and add to their answers (id. at 2006).

Equally without merit is petitioners’ challenge to

the absence of a formal oath. Each witness was ad-

monished by the Swiss magistrate that, while Switzer-

land does not recognize the oath, a witness who “‘in-

tentionally makes a false statement * * * will be

punished [under Swiss law] with a term of up to

five years in the penitentiary or imprisonment.”

See C.A. Jt. App. 2002. Like an oath administered

to American witnesses, that admonition was “in a

form calculated to awaken the witness’ conscience

and impress the witness’ mind with the duty to

[testify truthfully].” Fed. R. Evid. 603.

Finally, review of the Swiss deposition issue is not

warranted because any error, constitutional or other-

wise, was harmless beyond a reasonable doubt. See

Gov’t C.A. Br.295 n.98, 126-136. Although petition-

ers quote pre-d/sposition statements of the prosecutor

violated the Court Reporters Act (28 U.S.C. 753(b)) is con-

stitutionally irrelevant and statutorily wrong. That Act ap-

plies only to “session[s] of the court” and other specifically

designated court proceedings; it has never been interpreted

to extend to out-of-court proceedings such as depositions.

23

regarding the government’s need for the depositions

(91-1367 Pet. 3-8), those predictive statements do

not preclude a court from later reviewing the entire

record with the benefit of hindsight to determine

whether admission of the evidence can be said to have

been harmless. In this case, petitioners ultimately

were linked to the Swiss accounts by “[v]Jolumes of

business records from seven foreign banks” that in-

dependently were admitted pursuant to a statute au-

thorizing admission of foreign business records (18

U.S.C. 3505). See Pet. App. 39a-42a. Indeed, the

lead defense counsel at trial told the district court that

“for reasons which are a mystery to me, the goy-

ernment only asked [the Swiss deponents] to address

a handful of documents compared to the documents

which, once this trial began, the government offered

into evidence pursuant to 18 U.S.C. Section 3505.”

C.A. Jt. App. 1987. In light of that far more sub-

stantial evidence linking petitioners to the conspiracy,

any error in the admission of the deposition evidence

was clearly harmless.

3. Petitioners Levine and Kaminsky (91-1533 Pet.

18-22), as well as petitioner Reuben Sturman (91-

1596 Pet. 13-17), seek further review of their claim

that 18 U.S.C. 3505, which governs the admissibility

of foreign business records, violates the Confronta-

tion Clause. Section 3505 allows the admission of

foreign business records if a custodian certifies that

they are kept in the regular course of business and

if they meet other specified requirements “unless the

source of information or the method or circumstances

of preparation indicate lack of trustworthiness.” The

constitutionality of Section 3505 has been upheld by

other courts, and this Court has denied certiorari in

a case raising the issue. See United States y. Miller,

' |

24

830 F.2d 1073, 1076-1077 (9th Cir. 1987), cert. de-

nied, 485 U.S. 1033 (1988); United States v. Davis,

767 F.2d 1025, 1031-1032 (2d Cir. 1985); United

States v. Hing Shair Chan, 680 F. Supp. 521, 522-

526 (E.D.N.Y. 1988).

This Court has approved one commentator’s ob-

servation that ‘“[p]roperly administered the business

and public records exceptions would seem to be among

the safest of the hearsay exceptions.” Ohio v. Rob-

erts, 448 U.S. at 66 n.8. Petitioners claim that their

Confrontation Clause rights were nonetheless violated

because the records in this case were authenticated by

affidavits of foreign custodians. Authentication of

foreign business records, however, is a threshold mat-

ter for the court rather than the jury, and the normal

restrictions on hearsay evidence do not apply. 18

U.S.C. 3505(b); Fed. R. Evid. 104(a); see generally

United States vy. Tedder, 801 F.2d 1437, 1448 (4th

Cir. 1986), cert. denied, 480 U.S. 938 (1987). In

any event, hearsay statements of unavailable wit-

nesses may be admitted without violating the Con-

stitution, as long as they bear adequate indicia of

reliability. Jdaho v. Wright, 110 S. Ct. at 3146; Ohio

v. Roberts, 448 U.S. at 66. Section 3505 is cotermi-

nous with the Constitution in this regard, in that it

expressly excludes foreign records where “the source

of information or the method or circumstances of

preparation indicate lack of trustworthiness.” The

courts below correctly determined that the certificates

of the foreign custodians, which contained acknowl-

edgments that the makers were subject to penalties

under Swiss law for giving false testimony, contained

adequate indicia of reliability. To the extent peti-

tioners wished to challenge the authentications, more-

over, they were free to do so during the Swiss depo-

sitions of record custodians.

25

4, Petitioner Reuben Sturman seeks further re-

view in No. 91-1596 of numerous additional claims.

a. First, petitioner claims (Pet. 18-22) that he

was entitled to review the government’s 1981 sub-

mission to Swiss authorities in order to determine

whether the government obtained Swiss bank rec-

ords by accusing petitioner of being an organized

crime figure. According to petitioner, such an ac-

cusation, which would have been false, allowed the

government to obtain bank records to which it other-

wise was not entitled under the Mutual Assistance

Treaty, U.S.-Switz., 27 U.S.T. 2019, T.I.A.S. No.

8202 (1973) (reprinted in part at 91-1596 Pet. App.

134a-142a). Both courts below reviewed the govern-

ment submission and concluded it was not false. See

Pet. App. 30a. But petitioner would have no standing

to challenge the transfer and admission of documents

even if the government’s 1981 submission was false.

Article 37 of the Treaty expressly provides, with cer-

tain exceptions not applicable here, that:

The existence of restrictions in this Treaty

shall not give rise to a right on the part of any

person to take any action in the United States

to suppress or exclude any evidence or to obtain

other judicial relief in connection with requests

under this Treaty.

See Pet. App. 27a. A defendant thus lacks standing

to suppress evidence obtained pursuant to the Treaty

or to obtain judicial relief for alleged violations of

the Treaty, or matters arising under it. United States

v. Davis, 767 F.2d 1025, 1029, 1030 (2d Cir. 1985);

United States y. Johnpoll, 739 F.2d 702, 714 (2d

Cir.), cert. denied, 469 U.S. 1075 (1984); Cardenas

v. Smith, 733 F.2d 909, 917-919 (D.C. Cir. 1984 ).™

18 Cardenas, which involved the seizure of Swiss bank ac-

counts in which the plaintiff had an interest, recognized that

26

b. Second, petitioner claims (Pet. 25-27) that the

district judge should have recused himself because,

after petitioner was sentenced, the judge acknowl-

edged his personal dislike of the pornography busi-

ness and stated, “I have gone out of my way, very

frankly, as a judge to separate in my mind the busi-

ness that the defendants are in from what they are

charged with.” See Pet. App. 24a n.6 (quoting dis-

trict court’s comments). There is no merit to pe-

titioner’s suggestion (Pet. 26-27) tnat the court of

appeals failed to apply the objective standard re-

quired under 28 U.S.C. 455 to determine whether a

judge should be recused. The court of appeals quoted

the statute as requiring a federal judge to recuse

himself ‘in any proceeding in which his impartiality

might reasonably be questioned” (28 U.S.C. 455(a) )

and quoted its own prior case law as requiring a

“determin[ation] whether a reasonable, objective per-

son, knowing all the circumstances, would not have

questioned [the judge’s] impartiality.” Pet. App. 25a

(internal quotations omitted). The court of appeals’

case-specific conclusion that the district judge’s brief

remarks at the close of a protracted proceeding would

not cause a reasonable person to question the judge’s

impartiality is correct and does not warrant further

review.

ce. Next, petitioner claims (Pet. 27-28) that it was

error for the court to impose consecutive fines on

the Treaty cannot deprive an individual of constitutional

rights. See 733 F.2d at 919. The court of appeals held (Pet.

App. 28a), however, that petitioner had no constitutional

right of privacy in his foreign accounts and that any privacy

right “and any remedy given for a violation of that right is

limited by the terms of the Treaty.” Cf. United States v.

Miller, 425 U.S. 435 (1976).

27

certain counts because the crime of filing a false in-

come tax return (26 U.S.C. 7206(1)) is a lesser-

included offense of attempted tax evasion (26 U.S.C.

7201). Filing a false income tax return is not a

lesser-included offense of attempted tax evasion in the

traditional sense, however, because tax evasion may

be committed without even filing a tax return, and

filing a false return may not result in evasion of any

tax properly owed. See generally Spies v. United

States, 317 U.S. 492, 499-500 (1943). Some courts

have nonetheless held that cumulative punishment

should not be imposed if proving the evasion of tax

proves the false statement (usually an understate-

ment of income) on the return. See Pet. 28 (citing

cases). The court of appeals in this case did not re-

ject the holdings in those cases, but instead distin-

guished them on the same ground as an earlier court

had under facts identical to this case. See Pet. App.

36a-37a (following United States v. Franks, 723 F.2d

1482, 1487 (10th Cir. 1983), cert. denied, 469 U.S.

817 (1984)). Franks held that, because proof that

a taxpayer evaded paying taxes does not prove that

he misrepresented his control over foreign bank ac-

counts, consecutive punishments may be imposed in

such a case. That holding is not inconsistent with

cases reaching a different result on different facts.

d. Finally, petitioner asks (Pet. 28-29) this Court

to consider whether the reporting requirements of the

Bank Secrecy Act, 31 U.S.C. 5311 et seq., and its

implementing regulations violate the Fifth Amend-

ment privilege against compulsory self-incrimination.

The specific statutes and regulations that petitioner

violated require taxpayers to report financial inter-

ests in, or signature authority over, foreign bank

accounts. See 31 U.S.C. 5314; 31 C.F.R. 103.24. The

a

28

court of appeals’ decision is consistent with decisions

of this Court and does not conflict with the decision

of any other court.

This Court has held that the Fifth Amendment

privilege against compulsory self-incrimination does

not allow taxpayers to refuse to answer questions on

tax forms merely because the responses may lead the

government to uncover illegal sources of income or

tax fraud. United States vy. Sullivan, 274 U.S. 259

(1927). Since the “Bank Secrecy Act applies to all

persons making foreign deposits, most of whom do so

with legally obtained funds” (Pet. App. 36a), the

court of appeals properly distinguished decisions of

this Court holding unconstitutional those statutes re-

quiring self-incrimination solely of a “selective group

inherently suspect of criminal activity.” Marchetti v.

United States, 390 U.S. 39, 47 (1968) (statute re-

quiring reporting and taxing of illegal gambling ac-

tivities) ; Grosso v. United States, 390 U.S. 62 (1968)

(similar). Here, as in Sullivan and more recent cases

of this Court rejecting Fifth Amendment challenges

to reporting requirements, the tax form questions

“were neutral on their face and directed at the public

at large.” California v. Byers, 402 U.S. 424, 429,

433-434 (1971); see also Selective Service System v.

Minnesota Public Interest Research Group, 468 U.S.

841, 858 n.16 (1984) (in rejecting Fifth Amendment

claim, Court distinguished Marchetti and Grosso on

ground that “anyone who asserted the privilege on a

wagering return did not merely call attention to him-

self; the very filing necessarily admitted illegal

gambling activity’’).

|

29

CONCLUSION

The petitions for a writ of certiorari should be

denied.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

ROBERT S. MUELLER, III

Assistant Attorney General

SEAN CONNELLY

Attorney

MAY 1992

TY U. S. GOVERNMENT PRINTING OFFICE; 1992 312324 45442