Source: https://law.justia.com/cases/federal/appellate-courts/F2/838/426/281289/
Timestamp: 2019-07-19 20:46:10
Document Index: 465551311

Matched Legal Cases: ['§ 371', '§ 7206', '§ 2', '§ 7201', '§ 6531', '§ 371']

United States of America, Plaintiff-appellee, v. Arloha Mae Pinto, Defendant-appellant.united States of America, Plaintiff-appellee, v. Marcel Samuel Lambert, Defendant-appellant, 838 F.2d 426 (10th Cir. 1988) :: Justia
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United States of America, Plaintiff-appellee, v. Arloha Mae Pinto, Defendant-appellant.united States of America, Plaintiff-appellee, v. Marcel Samuel Lambert, Defendant-appellant, 838 F.2d 426 (10th Cir. 1988)
US Court of Appeals for the Tenth Circuit - 838 F.2d 426 (10th Cir. 1988)
On April 1, 1986, defendant-appellant Marcel Samuel Lambert (Lambert) and his wife, defendant-appellant Arloha Mae Pinto (Pinto), were named in a seven-count indictment. They were jointly charged with one count of conspiring to defraud the United States, in violation of 18 U.S.C. § 371, and one count of falsifying a tax return, in violation of 26 U.S.C. § 7206(1) and 18 U.S.C. § 2. Defendant Lambert also was charged with five counts of tax evasion, in violation of 26 U.S.C. § 7201.
Both defendants strenuously argue that the evidence was insufficient to support their convictions. Our standard for evaluating the sufficiency of the evidence is well established. We view all the evidence, both direct and circumstantial, together with the reasonable inferences to be drawn therefrom, in the light most favorable to the government. United States v. Hooks, 780 F.2d 1526, 1529 (10th Cir.), cert. denied, 475 U.S. 1128, 106 S. Ct. 1657, 90 L. Ed. 2d 199 (1986). We then must determine whether a reasonable jury could find the defendants guilty beyond a reasonable doubt. Id. at 1531.
"The essence of the crime of conspiracy is an agreement to violate the law." United States v. Troutman, 814 F.2d 1428, 1446 (10th Cir. 1987). In a conspiracy prosecution, the evidence must support a finding that the conspirators had a unity of purpose or a common design and understanding. United States v. Kendall, 766 F.2d 1426, 1431 (10th Cir. 1985), cert. denied, 474 U.S. 1081, 106 S. Ct. 848, 88 L. Ed. 2d 889 (1986). The existence of an agreement to accomplish an unlawful objective "may be inferred from a 'development and a collocation of circumstances.' " United States v. Pack, 773 F.2d 261, 265-66 (10th Cir. 1985) (quoting Glasser v. United States, 315 U.S. 60, 80, 62 S. Ct. 457, 469, 86 L. Ed. 680 (1942)).
The government employed the cash expenditure method of proof, which permits circumstantial proof of a defendant's taxable income in cases where the prosecution is unable to show directly specific items of such income. United States v. Bianco, 534 F.2d 501, 503 (2d Cir.), cert. denied, 429 U.S. 822, 97 S. Ct. 73, 50 L. Ed. 2d 84 (1976).
United States v. Citron, 783 F.2d 307, 310 (2d Cir. 1986). The relevant issue is whether expenditures in excess of reported income can be accounted for by assets available at the outset of the prosecution period or non-taxable receipts during the period. Taglianetti v. United States, 398 F.2d 558, 565-66 (1st Cir. 1968), aff'd, 394 U.S. 316, 89 S. Ct. 1099, 22 L. Ed. 2d 302 (1969); see also United States v. Pack, 773 F.2d at 264-65 (establishing unreported income by cash expenditure method of proof).
While the opening net worth of the taxpayer, including cash on hand, must be demonstrated "to a reasonable certainty," it need not be established by a formal net worth statement. United States v. Citron, 783 F.2d at 315. Here, the government compared defendants' cash expenditures during the years 1974 to 1978 with the amount of income reported on their tax returns, plus other funds they had available, resulting in a showing that cash expenditures exceeded reported income and other funds by $115,913.96. See United States v. Terrell, 754 F.2d 1139, 1146-47 (5th Cir.), cert. denied, 472 U.S. 1029, 105 S. Ct. 3505, 87 L. Ed. 2d 635 (1985). That comparison tended to show that defendant could not have had a significant amount of cash on hand and thus supports the jury's conclusion that Lambert had insufficient assets at the beginning of the prosecution period to have supported his expenditures in any of those years.2 United States v. Bianco, 534 F.2d at 505.
Nor was the government required to offer an accurate cash on hand figure, as part of opening net worth, for the beginning of each taxable year in the indictment period. See United States v. Mastropieri, 685 F.2d 776, 784 (2d Cir.), cert. denied, 459 U.S. 945, 103 S. Ct. 260, 74 L. Ed. 2d 203 (1982). In a cash expenditure case, reasonable certainty may be established without presenting opening net worth positions for each of the taxable years so long as the proof "makes clear the extent of any contribution which beginning resources or a diminution of resources over time could have made to expenditures." Taglianetti v. United States, 398 F.2d at 565. Thus, there need not be any formal opening net worth statement, which would include cash on hand, so long as sources of available funds are identified and quantified. Id. at 565 n. 7. The purpose of including an accurate identification of any diminution of resources is to enable the jury to determine if expenditures were financed by a liquidation of assets, depletion of a cash hoard or unreported income. United States v. Citron, 783 F.2d at 315. For example, if an asset is sold, an accounting must be made of that fact because the proceeds could be used to finance expenditures during the year in question. See Taglianetti v. United States, 398 F.2d at 564. The government accounted for the sale or disposal of assets during the indictment period, and none of the assets acquired by Lambert during that time were income-producing. The evidence presented was sufficient to enable the jury to determine whether the expenditures in excess of reported income could be accounted for by assets available at the opening of the prosecution period or by non-taxable receipts during the period. Id. at 565-66.
At the outset of the trial, Ritschel and Bono testified about their marijuana dealings with Lambert. During the testimony of Sally Wells, defense counsel objected to the admission of any statements made by Lambert to Wells concerning Lambert's involvement in marijuana trafficking and his identification of boxes in defendants' basement as containing marijuana. In allowing the testimony, the court apparently agreed with the government's argument that the statements were admissible as admissions made by Lambert and therefore were not hearsay. Rec. vol. III at 81-88; see Fed.R.Evid. 801(d) (2). Wells then testified that during the meeting about the stolen marijuana, Pinto identified the lost $100,000 as hers. Upon the succeeding direct examination of Wells' ex-husband, Bruce Robinson, a question was asked about Robinson's discussions with Lambert concerning marijuana distribution. Counsel for Pinto again objected on grounds of hearsay. The court found that there was substantial evidence, independent of the statements at issue, that a conspiracy existed, that both defendants were members of the conspiracy and that the statements were made during the course and in furtherance of the conspiracy. Rec. vol. III at 101. The court subsequently restated its finding that the government had shown the existence of a conspiracy. Rec. vol. VII at 789.
Defendant apparently is arguing that the court failed to follow the "preferred order of proof"3 by admitting co-conspirator hearsay before finding the existence of a conspiracy. That argument fails, primarily because the hearsay statements offered in the course of direct examination of Wells were admitted as admissions by Lambert. Even assuming the statements were admitted as co-conspirator hearsay, they would have been conditionally admissible subject to being connected up. See United States v. Hernandez, 829 F.2d 988, 994 (10th Cir. 1987). The other statements which defendant now contends were improperly admitted were allowed after the trial court had found the existence of a conspiracy.
A variance occurs when the evidence presented at trial establishes facts different from those alleged in the indictment. Dunn v. United States, 442 U.S. 100, 105, 99 S. Ct. 2190, 2193, 60 L. Ed. 2d 743 (1979); United States v. Dickey, 736 F.2d 571, 581 (10th Cir. 1984), cert. denied, 469 U.S. 1188, 105 S. Ct. 957, 83 L. Ed. 2d 964 (1985). In assessing a claim of a fatal variance, the pivotal inquiry is whether there has been a variance in proof which affects the substantial rights of the accused. United States v. Morris, 623 F.2d 145, 149 (10th Cir.), cert. denied, 449 U.S. 1065, 101 S. Ct. 793, 66 L. Ed. 2d 609 (1980). This court has previously stated that such a variance occurs when the accused could not have anticipated from the indictment what evidence would be presented at trial. Id. "Another source of prejudice is the transference of guilt to an accused from incriminating evidence presented in connection with the prosecution of another in the same trial for a crime in which the accused did not participate." Id.
The indictment charged that " [t]he object of the defendants' conspiracy was to knowingly and willfully hide substantial income from the sale and distribution of marijuana and to evade the payment of taxes on that and other income," which was accomplished by creating the appearance that funds used to purchase the series of residences came from loans when, as defendants knew, the funds came from the sale and distribution of marijuana. Rec. vol. I, doc. 1, at 2. In setting out the overt acts committed in furtherance of the conspiracy, the indictment alleged that during 1977, defendants possessed, sold and distributed, and aided and abetted in the possession, sale and distribution, of marijuana. Id. at 3. Although Pinto was not charged with conspiring to sell drugs, she could anticipate from the indictment what evidence would be presented at trial, in particular her involvement in the alleged overt act of possessing, selling and distributing marijuana. United States v. Morris, 623 F.2d at 149.
Further, we cannot agree with Pinto's claim that her right to a fair trial was undermined by the disparity in the evidence against Lambert as compared to the alleged dearth of evidence implicating her. In a conspiracy case, a quantitative disparity in the evidence, without more, provides no justification for severance. United States v. Hack, 782 F.2d 862, 871 (10th Cir.), cert. denied, 476 U.S. 1184, 106 S. Ct. 2921, 91 L. Ed. 2d 549 (1986). Given the government's order of proof, the trial court's continuous admonitions and the fact that the interests of judicial economy were served by the avoidance of duplicitous separate trials, the trial court did not abuse its discretion in denying the motion for severance.
Under the Internal Revenue Code, the statute of limitations for a conspiracy to defraud the United States is six years. 26 U.S.C. § 6531;4 United States v. Brunetti, 615 F.2d 899, 901-02 (10th Cir. 1980). It therefore was incumbent upon the government to prove that the conspiracy was still in existence on April 1, 1980, and that at least one overt act in furtherance of the conspiracy was performed after that date. Grunewald v. United States, 353 U.S. 391, 396, 77 S. Ct. 963, 969, 1 L. Ed. 2d 931 (1957); United States v. Brunetti, 615 F.2d at 901.
Defendants' theory, that the central purpose of the conspiracy was accomplished with the filing of the tax returns, ignores both the object of their conspiracy as charged in the indictment and the evidence presented at trial to establish the conspiracy. They were charged with conspiring to defraud the United States, in violation of 18 U.S.C. § 371,5 "by impeding, impairing, obstructing, and defeating the lawful governmental functions" of the IRS "in the ascertainment, computation, assessment, and collection of income taxes...." Rec. vol. I, doc. 1, at 1. The indictment was based on one continuing conspiracy, the central object of which was not merely to evade taxes on marijuana income in 1978, but rather to immunize defendants from prosecution for tax evasion. Forman v. United States, 361 U.S. 416, 422-23, 80 S. Ct. 481, 485-86, 4 L. Ed. 2d 412 (1960); see Grunewald v. United States, 353 U.S. at 405, 77 S. Ct. at 974 (distinguishing between acts of concealment done in furtherance of the main criminal objectives of the conspiracy and acts of concealment done solely for the purpose of covering up the crime).
The object of defendants' conspiracy, the concealment of income derived from the sale and distribution of marijuana in 1977, did not end with the filing of their income tax returns in 1978. The filing of the returns was but the first step in the process of evading taxes on that income, with additional overt acts subsequently undertaken to conceal the marijuana income in an attempt to make the evasion succeed. Forman v. United States, 361 U.S. at 423-24, 80 S. Ct. at 485-86. Because at least one overt act was committed within six years prior to the filing of the indictment, the trial court properly denied defendants' motion to dismiss the conspiracy count. United States v. Brunetti, 615 F.2d at 901.
This court recently clarified the meaning of the term "preferred order of proof" as it pertains to the admission of co-conspirator hearsay. In United States v. Hernandez, 829 F.2d 988 (10th Cir. 1987), we stated that the "preferred order of proof" simply refers to the requirement that the trial court make the requisite factual determination of the existence of a conspiracy prior to allowing co-conspirator hearsay statements to be heard by the jury. Id. at 994 n. 6. We further stated that "this order of proof does not involve a right to a pretrial hearing on admissibility, and in no way precludes the trial judge from exercising his considerable discretion and conditionally admitting the statements subject to later being connected up." Id