Source: http://ny.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19831128_0040053.C02.htm/qx
Timestamp: 2017-03-27 18:40:02
Document Index: 45558289

Matched Legal Cases: ['§ 371', '§ 7201', '§ 7206', '§ 1001', '§ 1001', '§ 1623', '§ 371', '§ 1001', '§ 371', '§ 7201', '§ 7206', '§ 1001', '§ 1001', '§ 1623', '§ 371', '§ 1623', '§ 1001']

decided: November 28, 1983.
UNITED STATES OF AMERICA, APPELLEE-CROSS-APPELLANT,v.PATRICK J. CUNNINGHAM, DEFENDANT-APPELLANT-CROSS-APPELLEE, AND JOHN J. SWEENEY, DEFENDANT-APPELLANT
Appeal by defendants from judgments of the Southern District of New York entered by Judge Charles L. Brieant, Jr. after a jury found Cunningham guilty of conspiracy, 18 U.S.C. § 371, income tax evasion, 26 U.S.C. § 7201, filing false income tax returns, 26 U.S.C. § 7206(1), inducing another to make false statements to Internal Revenue Service agents, 18 U.S.C. §§ 1001 and 2, making false statements to the agents and to the U.S. Attorney, 18 U.S.C. § 1001, and giving false testimony before a United States district court, 18 U.S.C. § 1623. Sweeney was found guilty of conspiracy, 18 U.S.C. § 371, giving false testimony before a federal grand jury, 18 Revenue Service agents and to the U.S. Attorney, 18 U.S.C. § 1001. The government cross-appeals from an order of the district court granting Cunningham's post-trial motion for a judgment vacating the jury's verdict on three counts (2, 4 and 5) and acquitting him on those counts.
Experience teaches that unlawful cover-up offenses are often more heinous than the crime sought to be concealed. This case falls squarely within that maxim. Patrick J. Cunningham and John J. Sweeney appeal from judgments of the Southern District of New York entered by Judge Charles L. Brieant, Jr. after a jury convicted them of offenses related to income tax evasion, obstruction of investigations by the Internal Revenue Service (IRS) and a grand jury, and making false statements to the IRS, the U.S. Attorney, a grand jury and a federal district court.*fn1 The jury found Cunningham guilty of conspiracy, 18 U.S.C. § 371 (Count 1), tax evasion for the years 1974 and 1975, 26 U.S.C. § 7201 (Counts 2 and 4), filing false returns for 1974 and 1975, 26 U.S.C. § 7206(1) (Counts 3 and 5), inducing John Spain to make false statements to IRS agents, 18 U.S.C. §§ 1001 and 2 (Counts 6 and 7), making false statements to agents of the IRS and the U.S. Attorney, 18 U.S.C. § 1001 (Count 11), and giving false testimony before a United States district court, 18 U.S.C. § 1623 (Count 13). Sweeney was found guilty of conspiracy, 18 U.S.C. § 371 (Count 1), making false statements in testimony before a federal grand jury on July 10, 1980, and July 17, 1980, 18 U.S.C. § 1623 (Counts 9 and 10), and making false statements to agents of the IRS and the U.S. Attorney, 18 U.S.C. § 1001 (Count 12).*fn2
The record, viewed as it must be in the light most favorable to the government, Glasser v. United States, 315 U.S. 60, 80, 86 L. Ed. 680, 62 S. Ct. 457 (1942), reveals the following. From 1964 to September 1971 Cunningham and Sweeney, his brother-in-law, practiced law under a loose partnership arrangement in New York City with James F. O'Donoghue. Thereafter until 1978 they ceased to be partners but practiced separately in the same office suite. From September 30, 1978 through September 1981 they resumed law practice together with Marc Krieg in a professional corporation.
There was evidence from which the jury could reasonably infer that the payments were made from the escrow account rather than from Sweeney's regular business account and not recorded on Cunningham's records in order to conceal the fact that Cunningham, who was at various times Chairman of the Bronx and New York State Democratic Committees and a member of the National Committee of the Democratic Party, was receiving a portion of fees resulting from state court appointments in probate and guardianship matters in which Cunningham did no work. Disclosure of the income or its source would have embarrassed him as a political leader by giving the appearance that the appointments were the result of his exercise of political influence with respect to the appointing judges and would also have required him to pay income taxes on the monies received.*fn3
Sweeney kept a careful private accounting of these payments through pencilled notations in his own handwriting on his copies of monthly escrow account statements received from Irving Trust Co. The pencilled notations showed that after deduction of certain expenses the amounts paid to or for the benefit of Cunningham represented roughly half of the sums Sweeney received from court-appointed matters. That Sweeney and Cunningham were trying to conceal these payments could further be inferred from Sweeney's efforts to avoid turning over his copies of the escrow account statements to a federal grand jury convened in January 1979 to investigate Cunningham's possible tax evasion. Sweeney initially advised the grand jury on April 5, 1979, that he was not producing the statements because IRS Agent Glenn Ripa had told him that they were not needed and he was later acquitted of the charge (Count 8) that this statement was perjurious. However, after it became clear that his copies of the statements were being subpoenaed he refused to comply. On July 10, 1980, when he appeared before the grand jury for a second time, he expressly refused to turn over the statements, now claiming that they were protected by the attorney-client privilege. After that hearing, when he was ordered to show cause why he should not be held in contempt, Sweeney agreed to produce the statements. Yet when he returned to the grand jury on July 17, he did not do so. The statements finally were turned over by his attorney while Sweeney was out of the country; by that time, the pencilled notations -- which were at the heart of the government's case -- had been erased. It was only through infrared enhancement that the FBI was able to restore the notations and uncover the secret accounting.
In the meantime Sweeney testified before the grand jury that he loaned Cunningham nearly $13,900 in 1975 whereas his obliterated notations together with other evidence showed that the payments represented a division of legal fees from 1974-75 court appointments.*fn4 In 1980 Sweeney also falsely advised the U.S. Attorney's office and testified before the grand jury that other payments made by him to or for Cunningham (e.g., tuition for the latter's children) were from legal fees due in connection with the 1971 dissolution of their former law firm whereas in fact they were from later state-court appointments.*fn5 Upon being interviewed by the U.S. Attorney's office in 1980 Cunningham conceded that the $9,436 received in 1974 from Sweeney (some directly and some to schools for his children) "probably" represented reportable income overlooked by him but that the $13,870 received in 1975 constituted non-taxable loans not yet repaid.
Following service of the subpoena by government agents at 4:30 P.M. on the afternoon of February 12, 1981, Marc Krieg, one of the three partners in the firm, asked the agents to leave. Krieg then ascertained that there were two typewriters of the kind subpoenaed, one of which was located on the office's reception desk. At 5:20 P.M. Krieg saw Sweeney carrying the typewriter from the reception desk to his office and closing the door behind him. When the typewriter was examined by government agents that night it was found to have a new, virtually unused ribbon on it.*fn6 That evening Krieg advised an Assistant U.S. Attorney that he had seen Sweeney remove the typewriter to his office that afternoon after the subpoena had been served but before the typewriter was turned over to the government. Krieg apparently confirmed this statement in testimony given the next day, February 13, before the grand jury.
On the same date, February 13, 1981, Judge Inzer B. Wyatt, who was presiding at the Spain trial, granted the government's motion for a hearing, which was then held by Judge Edmund Palmieri, to determine whether anyone had tampered with the subpoenaed typewriter before surrendering it to the government. At a continuation of the hearing on February 17, Gay McCreery, receptionist at the Cunningham-Sweeney firm, testified that she had used the subpoenaed typewriter on February 12, 1981, to type addresses on envelopes which Cunningham planned to use in a personal campaign mailing to members of the Democratic National Committee. However, the ribbon on the typewriter turned over by Cunningham and Sweeney in response to the subpoena did not show the imprints of this typing, as it would if it were the ribbon used by Ms. McCreery. When the typed envelopes were then subpoenaed and Krieg and McCreery were unable to find them, Cunningham testified on February 19, 1981, before Judge Palmieri that after deciding to withdraw from his political race on Monday, February 16, 1981, he stuffed the typed envelopes into his pocket and disposed of them in a street trash basket. This conduct indicated that the typed envelopes had been concealed or ...