Reply Brief — Pollen v. United States

No. 92-1331

ae

In The

Supreme Court of the Hnited States

+

October Term, 1992

WILLIAM POLLEN,

Petitioner,

VS.

UNITED STATES OF AMERICA,

Respondent.

On Petition for Writ of Certiorari to the United States Court

of Appeals for the Third Circuit

REPLY BRIEF FOR PETITIONER

STEPHEN M. ORLOFSKY

Counsel of Record

IAN M. COMISKY

ANNE C. SINGER

BLANK, ROME, COMISKY &

McCAULEY

Attorneys for Petitioner

Woodland Falls Corporate Park

210 Lake Drive East, Suite 200

Cherry Hill, New Jersey 08002

(609) 779-3600

3255

be late (800) 3 APPEAL « (800) 5 APPEAL « (800) BRIEF 21

ervices, inc.

TABLE OF CONTENTS

I ET ra ne Be la tg ap

MII TI nn noc esc visaenencastenancs

Reply to Briefin Opposition ....................08.

I.

Il.

Ill.

IV.

The Opposition Brief confuses the issue of

multiplicity with the issue of double jeopardy;

although the former was waived by Defendant’s

guilty plea, the latterwasnot. ................

The Petition for Certiorari is supported by

Respondent’s acknowledgment that no case has

decided the precise question presented here, that of

the appropriate unit of prosecution under 26 U.S.C.

ONS. wipe needs 59456005504 he 6 bka SE aoe

The proper unit of prosecution is governed by

congressional intent; whether each additional

attempt increases the likelihood of successful tax

SVASION IG MTOISVOME. onus ccc cece cccccsencs

The unit of prosecution will continue to have an

impact on sentences for offenses occurring after

November 1, 1987, the effective date of the

Sentencing Guidelines. .... 2... cece cece eeenn

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Contents

TABLE OF CITATIONS

Cases Cited:

Menna v. New York, 423 U.S.61 (1975) ..............

Ray v. United States, 481 U.S. 736(1987) .............

United States v. Barel, 939 F.2d 26 (3d Cir. 1991) .......

United States v. Blocker, 802 F.2d 1102 (9th Cir. 1986) ..

United States v. Bonavia, 927 F.2d 565 (11th Cir. 1991) ..

United States v. Bough, 787 F.2d 1131 (7th Cir. 1986) ...

United States v. Broce, 488 U.S. 563(1989) ...........

United States v. Dashney, 937 F.2d 532 (10th Cir.), cert.

Gonind, FASS. Ce. SEE CER) 5 ok es vs vee se dueness

United States v. Davenport, 929 F.2d 1169 (7th Cir. 1991),

cert. denied, 112 S. Ct. 871 (1992) .................

United States v. Davis, 799 F.2d 1490 (11th Cir. 1986) ..

United States v. Heath, 970 F.2d 1397 (Sth Cir. 1992) ....

United States v. Marino, 682 F.2d 449 (3d Cir. 1982) ..

United States v. Mastrangelo, 733 F.2d 793 (11th Cir. 1°84)

SO REDPDEAD SAAS HA HEHEHE RSS HCLAAWA SEC EADEAE HOOT SOE BESS aT

Page

iil

Contents

Page

United States v. McCarty, 611 F.2d 220 (8th Cir. 1979) 5

United States v. Osunegbu, 822 F.2d 472 (Sth Cir. 1987)

Ee Pe eee eee ee 2

United States v. Podell, 869 F.2d 328 (7th Cir. 1989) }

United States v. Pollen, 978 F.2d 78 (3d Cir. 1992)

United States v. Rosenbarger, 536 F.2d 715 (6th Cir. 1976),

cert. denied, 431 U.S.965(1977) .......565- 55055 3

United States v. Stovall, 825 F.2d 817 (Sth Cir. 1987) .... 2

United States v. Universal C.1.T. Credit Corp., 344 U.S

ee eer es x ge 5

Statutes Cited:

8 Tot 2 Ee ae ir 5

| LOR fom i!) & ¢ ) Ree Toye Age Ae Rea 7

8 ae >) oe » ieee 1,4,6,7

008 Dek b+ 6) Seno ae Paton 5

l

INTRODUCTORY STATEMENT

Petitioner files this Reply to theBrief in Opposition in order to

correct certain fundamental errors contained in the Brief for the

United States in Opposition (“Opposition Brief”) and to highlight

the fact, stated in the Opposition Brief, that this Court has never

decided the important issue of the proper unit of prosecution under

the federal tax evasion statute, 26 U.S.C. § 7201.

REPLY TO BRIEF IN OPPOSITION

I.

THE OPPOSITION BRIEF CONFUSES THE ISSUE

OF MULTIPLICITY WITH THE ISSUE OF DOUBLE

JEOPARDY; ALTHOUGH THE FORMER WAS WAIVED

BY DEFENDANT’S GUILTY PLEA, THE LATTER WAS

NOT.

Respondent states that Petitioner “waived his multiplicity

claim when he pleaded guilty to four of the offenses charged in the

indictment” (Opposition Brief, at 7), implying that this waiver

should bar Petitioner’s double jeopardy claim on appeal. The

Court of Appeals for the Third Circuit rejected this waiver

argument in this case, United States v. Pollen, 978 F.2d 78, 84 (3d

Cir. 1992), and considered the merits of Defendant’s double

jeopardy argument. The Government’s waiver argument is wrong

for the reasons stated by the Third Circuit in this case.

Failure to raise the issue of multiplicity of the indictment

below does not constitute a waiver of Defendant’s claim of illegal

multiplicity of sentences. Courts of appeals which have

considered this issue have rejected such claims by the

Government. In United States v. Mastrangelo, 733 F.2d 793, 800

(11th Cir. 1984), the Eleventh Circuit stated that although a failure

to raise below the issue of multiplicity of the indictment does bar a

2

defendant on appeal from asserting that he cannot be indicted or

convicted twice for the same crime, nonetheless, “he may

challenge the imposition of multiple sentences for the alleged

commission of one crime.” See also, United States v. Bonavia, 927

F.2d 565, 571 (11th Cir. 1991); United States v. Davis, 799 F.2d

1490, 1494 (11th Cir. 1986). Likewise, the Fifth Circuit has held

that:

The Government asserts that [the defendant]

has waived any opportunity to complain about

multiplicity .... We note however, that

[defendant’s] complaint on appeal goes to the

multiplicity of sentences imposed and does not

directly challenge the multiplicity in the

indictment. This distinction has _ been

recognized by the courts. Multiplicity of an

indictment must be raised as a defense pursuant

to Fed. R. Crim. P. 12(b) to be preserved for

appeal. A complaint about multiplicity of

sentences however can be raised for the first

time on appeal.

United States v. Stovall, 825 F.2d 817, 821 (Sth Cir. 1987)

(citations omitted); see also, United States v. Osunegbu, 822 F.2d

472, 481 n. 26 (Sth Cir. 1987).

Similarly, the Sixth Circuit has stated that:

The argument that one waives his right to

object to the imposition of multiple sentences

by his failure to object to the multiplicious

nature of an indictment is a non sequitur. Rule

12 applies only to objections with regard to

error in the indictment itself; the effect of Rule

12 is that dismissal of a multiplicitous

3

indictment is not required [if not raised below},

however, if sentences are imposed on each

count of that multiplicitous indictment the

defendant is not forced to serve the erroneous

sentence because of any waiver.

United States v. Rosenbarger, 536 F.2d715, 721-22 (6th Cir. 1976),

cert. denied, 431 U.S. 965 (1977); see also, United States v.

Blocker, 802 F.2d 1102, 1103 (9th Cir. 1986) (same holding, where

defendant entered a guilty plea and appealed his sentence); United

States v. Bough, 787 F.2d 1131, 1132 (7th Cir. 1986) (guilty plea

does not waive double jeopardy challenge to indictment judged

deficient on its face); United States v. Marino, 682 F.2d 449, 454

n. 3 (3d Cir. 1982).

United States v. Broce, 488 U.S. 563 (1989), relied on by the

Government (Opposition Brief, at 7), does not overrule the

holdings of these cases when the defect in the indictment is

apparent on its face, as itis here. Broce held that “a plea of guilty to

a charge does not waive a claim that — judged on its face — the

charge is one which the [Government] may not constitutionally

prosecute.” 488 U.S. at 575 (emphasis in original), quoting Menna

v. New York, 423 U.S. 61, 63 n. 2 (1975). Thus, Broce emphasized

that where the existing record may be relied on to determine

legality of punishment, a challenge to the punishment will not be

waived by entry of a guilty plea. The deficiency in the instant

indictment is apparent on its face, and hence this appellate

challenge is not precluded by Broce.'

1. The “plain error” doctrine would also require review of Petitioner's

sentence here. E.g., United States v. Podell, 869 F.2d 328, 332 (7th Cir. 1989). In

Podell, the Seventh Circuit found plain error in a situation such as that here,

stating that: “Convictions and sentences that expose a defendant to double

jeopardy are illegal, and result in miscarriages of justice. Therefore, we hold that

the district court committed plain error in allowing the defendant to be convicted

on [2 counts) of the indictment. . . A

4

Il.

THE PETITION FOR CERTIORARI IS SUPPORTED

BY RESPONDENT’S ACKNOWLEDGMENT THAT NO

CASE HAS DECIDED THE PRECISE QUESTION

PRESENTED HERE, THAT OF THE APPROPRIATE

UNIT OF PROSECUTION UNDER 26 U.S.C. § 7201.

Respondent argues that the decision in this case does not

conflict with that of any other court of appeals because no other

court of appeals has decided the precise question presented here

(Opposition Brief, at 9). Even if true (but see discussion in Petition,

at 7-8), this statement highlights the fact that the issue presented

herein is an important one, yet undecided, which should be decided

by this Court.

Il.

THE PROPER UNIT OF PROSECUTION IS

GOVERNED BY CONGRESSIONAL _ INTENT;

WHETHER EACH ADDITIONAL ATTEMPT

INCREASES THE LIKELIHOOD OF SUCCESSFUL TAX

EVASION IS IRRELEVANT.

Respondent agrees that it is congressional intent which

establishes the appropriate unit of prosecution under a criminal

statute (Opposition Brief, at 7). However, the Opposition Brief

makes the inconsistent argument that: “Each time a taxpayer

engages in an act of evasion, he increases the likelihood of his

success, increases the amount of tax that may ultimately be evaded

. .. and increases the potential cost of IRS’s enforcement efforts,”

suggesting that this fact somehow supports the position that the

proper unit of prosecution under 26 U.S.C. § 7201 is each separate

attempt to evade a tax.

5

If this were true, then the unit of prosecution for any crime

would be each attempt to commit it or each act to further it. For

most federal crimes, this is not so. For example, this Court has

found that it was the course of conduct which Congress meant to

criminalize under the Fair Labor Standards Act (“FLSA”) and not

each act of failing to pay the minimum wage. United States v.

Universal C.LT. Credit Corp., 344 U.S. 218 ( 1952). FLSA treats as

one offense all acts that “arise from that singleness of thought,

purpose or action, which may be deemed a single ‘impulse.’ ” 344

U.S. at 224. A similar analysis applies here, where all actions taken

by Petitioner were taken with the single intent to avoid payment of

the specific tax(es) in question.

Similarly, 31 U.S.C. § 5324(3) makes it a crime to structure a

transaction to avoid currency reporting requirements. Despite the

Government’s argument that each act in furtherance of the

“structure” (i.e., each deposit of under $10,000) may be charged as

a separate violation (the same argument made here), both the

Seventh and the Tenth Circuits have recently rejected this position

and held that the structured transaction and not its components iS

the proper unit of prosecution. United States v. Dashney, 937 F.2d

§32, 541-42 (10th Cir.), cert. denied, 1125. Ct. 402 (1991); United

States v. Davenport, 929 F.2d 1169 (7th Cir. 1991), cert. denied,

112 S. Ct. 871 (1992).

Likewise, each subsequent overt act does not constitute a

separate conspiracy or crime if each such act advances only one

scheme or agreement. See, ¢.g.., United States v. McCarty, 611 F.2d

220, 223 (8th Cir. 1979). Similarly, in a bank fraud case brought

under 18 U.S.C. § 1334, it is the scheme which is punishable, not

each act in furtherance of it. E.g., United States v. Heath, 970 F.2d

1397 (Sth Cir. 1992) (indictment was multiplicitous, which

charged two fraudulent acts as separate crimes).

Thus, the Government’s argument that additional attempts

6

create greater harm begs the question and is a position which has

been rejected in other “unit of prosecution” cases. It is also wrong.

The true harm visited on the public by tax evasion, is the

defendant’s failure to pay the tax—not each attempt to avoid

payment of the one sum of money.’

IV.

THE UNIT OF PROSECUTION WILL CONTINUE TO

HAVE AN IMPACT ON SENTENCES FOR OFFENSES

OCCURRING AFTER NOVEMBER 1, 1987, THE

EFFECTIVE DATE OF THE SENTENCING

GUIDELINES.

Respondent states that: “[FJor offenses occurring after

November 1, 1987, the effective date of the Sentencing Guidelines,

the resolution of the unit of prosecution issue in the case will not

have any impact on the length of a defendant's sentence”

(Opposition Brief, at 11). Respondent attempts to explain this

faulty conclusion by stating that under the Guidelines, all counts

involving substantially the same harm are grouped for sentencing

purposes, and the total tax loss, not the number of violations,

governs the sentence (Opposition Brief, at 10-11).

However, the maximum sentence for conviction on one count

charging a violation of 26 U.S.C. § 7201 is five years. Therefore, in

cases where the Guidelines score would permit or require

imposition of a sentence of more than five years (or 60 months), it

2. If one defendant engaged in seven transactions to secrete $100,000 that

would otherwise be used to pay a tax due, and another defendant engaged in two

transactions to accomplish the same end, the harm to the public—the loss of

$100,000 in tax income—.is exactly the same. Both these defendants should face

the same single charge and be sentenced identically.

7

would make a difference whether a defendant were convicted of

one or more section 7201 violations.’

In addition, the number of counts of conviction determines the

amount of the special assessment which must be imposed on a

defendant, pursuant to 18 U.S.C. § 3013(a). See Ray v. United

States, 481 U.S. 736, 737 (1987); United States v. Barel, 939 F.2d

26, 36 (3d Cir. 1991) (special assessment imposed on each count of

conviction precludes application of concurrent sentence doctrine).

Thus, a defendant’s sentence will continue to be influenced by the

number of charges which the Government can bring against him

under 26 U.S.C. § 7201, a number dictated by the unit of

prosecution intended by Congress.

3. The original Guidelines calculation in the instant case provides a good

example of a Guidelines range of more than 60 months in a tax evasion case.

Defendant's Guidelines score was originally calculated to be 23; his criminal

offense category was 3. His resulting Guideline range of 57-71 months (App.

39a: 56a) would have allowed imposition of a Guidelines sentence of more than

five years only if more than one Guidelines count had been charged. However,

because Defendant was convicted on one Guidelines count, his Guidelines

sentence was limited to one within the statutory five-year maximum. Only if a

defendant were convicted of more than one Guidelines count and his Guidelines

score were more than 60 months, could the court impose consecutive Guidelines

sentences, resulting in a sentence of more than five years.

8

CONCLUSION

For the foregoing reasons, as well as those stated in the

Petition for Writ of Certiorari, it is respectfully submitted that a

Writ of Certiorari should be issued to the United States Court of

Appeals for the Third Circuit.

Respectfully submitted,

STEPHEN M. ORLOFSKY

Counsel of Record

IAN M. COMISKY

ANNEC. SINGER

BLANK, ROME, COMISKY &

McCAULEY

Attorneys for Petitioner

Woodland Falls Corporate Park 210

Lake Drive East, Suite 200

Cherry Hill, New Jersey 08002

(609) 779-3600