Source: https://law.justia.com/cases/federal/appellate-courts/F2/575/32/372085/
Timestamp: 2020-05-30 03:34:15
Document Index: 556025821

Matched Legal Cases: ['§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 2534', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 7217', '§ 6103', '§ 7201', '§ 7206', '§ 2111', '§ 6103', '§ 6103', '§ 6103', '§ 6103', '§ 301', '§ 404', '§ 6103', '§ 278']

United States of America, Appellee, v. Frank Mangan and Kevin Mangan, Defendants-appellants, 575 F.2d 32 (2d Cir. 1978) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 1978 › United States of America, Appellee, v. Frank Mangan and Kevin Mangan, Defendants-appellants
United States of America, Appellee, v. Frank Mangan and Kevin Mangan, Defendants-appellants, 575 F.2d 32 (2d Cir. 1978)
US Court of Appeals for the Second Circuit - 575 F.2d 32 (2d Cir. 1978) Argued Jan. 10, 1978. Decided April 3, 1978
While § 6103 stretches over 20 pages of the Internal Revenue Code, only a few provisions require mention here. A basic point is the distinction drawn in the statute between the disclosure of returns in matters relating to "tax administration" and other matters. Section 6103(b) (4) (A) defines "tax administration" as follows:
Section 6103(h) (2) says that:
Under subsection (h) (3), if "the Secretary"5 has referred a case to the Department of Justice, he may make such disclosure to it on his own motion. Otherwise he may do this only on the basis of a written request from the Attorney General, the Deputy Attorney General, or an Assistant Attorney General. Section 6103(h) (4) deals separately with disclosure in a judicial or administrative proceeding pertaining to tax administration. There disclosure is permitted if the case falls within one of the three conditions listed in § 6103(h) (2) or another not here pertinent; nothing is said with respect to the need for any "request."
Section 6103(i) lays down a more severe procedure in judicial or administrative proceedings not involving tax administration. Here the linchpin as regards taxpayer returns is a provision, § 6103(i) (1) (B), whereby the head of any Federal agency which is or may be a party to a proceeding to enforce a Federal criminal statute or, in the case of the Department of Justice, the Attorney General, the Deputy Attorney General, or an Assistant Attorney General may apply ex parte to a federal district judge for an order which is to be granted if the judge determines that:
Although counsel for Frank Mangan had been advised well in advance of trial of the Government's intention to introduce his tax returns, he made no motion to suppress under F.R.Cr.P. 12(b) (3).6 Because of the lack of a suppression hearing, the record as to how Frank Mangan's tax returns got into the prosecutor's hands is not altogether clear. In answer to a question from the judge the Assistant United States Attorney stated that he had made no request for them, but that an IRS inspector had "pulled" the returns before the case was referred to the United States Attorney and "brought them over." He added that "the Inspection Service brought the case to our office without our request."
Proceeding to the merits of defendant's claim despite the untimeliness of his motion, the district judge ruled the proceeding to be one " pertaining to tax administration," although the indictment included false claim and mail fraud counts. Apparently he considered disclosure to the United States Attorney to have been proper under § 6103(h) (2) and (3), since "the Secretary" had referred the case to the Department, and consequently found no bar to disclosure in court under § 6103(h) (4). Alternatively, if the matter was not one of tax administration, he was prepared to enter an order under § 6103(i) (1) (B).
We do not agree that action of the latter type would have been proper. The statute requires that an application for an order under the cited section, in the case of the Department of Justice, shall be made by the Attorney General, the Deputy Attorney General, or an Assistant Attorney General. When Congress chooses to speak with such specificity, courts must heed its language. United States v. Giordano, 416 U.S. 505, 94 S. Ct. 1820, 40 L. Ed. 2d 1341 (1974). Since § 6103(i) (4), in contrast to § 6103(h) (4), keys admissibility of returns in judicial or administrative proceedings to compliance with one of the procedures prescribed in the earlier subdivisions with respect to disclosure to a Federal agency, we could support admission of the returns if the case were not one of tax administration only by accepting the Government's argument in regard to the failure to comply with F.R.Cr.P. 12(c), see note 6 supra, or possibly by relying on the Delphic final sentence of subsection (i) (4).7
S.Rep.No.94-938, 94th Cong., 2d Sess. 324-25 (1976), U.S.Code Cong. & Admin.News 1976, p. 3754. We do not find this persuasive. While defendant focuses on the first part of the quotation with its reference to taxpayers "whose civil and criminal tax liability is at issue," the passage in its entirety attempts merely to draw the distinction between these taxpayers and others whose liability was not at issue. This language does not evidence an intention to adopt a restrictive interpretation of "tax administration."9 Furthermore, the definition of "tax administration" in § 6103(b) (4) is so sweeping as to compel rejection of a restrictive interpretation. Clearly this case involved "the administration, management, (and) conduct . . . of the execution and application of the internal revenue laws" and "assessment, collection, enforcement (and) litigation . . . functions under such laws." Even if the Senate Report was more restrictive than we think it to have been, this would be a case in which to apply "the canon of construction of the wag who said, when the legislative history is doubtful, go to the statute." Greenwood v. United States, 350 U.S. 366, 374, 76 S. Ct. 410, 415, 100 L. Ed. 412 (1956) (Frankfurter, J.). It follows that under § 6103(b) (4) and (h) (4) the United States Attorney could properly have obtained a subpoena for the returns for use before the grand jury or at trial. See F.R.Cr.P. 17(c).
Appellant argues, however, that this was not what was done; that his returns were sent to the Assistant United States Attorney pursuant to § 6103(h) (3); that there was no written request from the Attorney General, the Deputy Attorney General, or an Assistant Attorney General under § 6103(h) (3) (B); and that there is no evidence that the referral of the case by the Treasury or the disclosure of the returns was made by "the Secretary," see footnote 5 supra. As previously recounted, due to the failure of appellant's counsel either to make a pretrial motion to suppress or to ask the court to interrupt the trial to enable him to make a proper record, we simply do not know what procedures occurred in the Treasury. Appellant should not profit from his own failure to develop a proper record. Although, like the trial judge, see footnote 6 supra, we do not choose to rely on F.R.Cr.P. 12(c) as an absolute bar to consideration of Frank Mangan's claim for suppression, he still had the burden of making out a case for his motion. In the absence of contrary evidence the presumption of regularity, United States v. Chemical Foundation, Inc., 272 U.S. 1, 14-15, 47 S. Ct. 1, 71 L. Ed. 131 (1926); Lewis v. United States, 279 U.S. 63, 73, 49 S. Ct. 257, 73 L. Ed. 615 (1929); United States v. Hulphers, 421 F.2d 1291 (9 Cir. 1969); IX Wigmore, Evidence § 2534 (3d ed. 1940 & 1972 Supp.), is applicable. Moreover, we are not at all convinced that Congress intended that disclosure of a return to a United States Attorney in violation of a formal requirement of § 6103(h) (3) should "poison" its subsequent disclosure in a judicial proceeding that was permissible under § 6103(h) (4). As noted earlier, § 6103(i) (4) specifically conditions admissibility on compliance with provisions governing disclosure to Federal agencies, while § 6103(h) (4) has no such specific requirement. The final sentence of § 6103(i) (4), although not directly applicable, see note 7 supra, and the provision of civil penalties (including allowance for punitive damages for grossly negligent violations) as well as criminal sanctions, §§ 7217 and 7213, afford some evidence that Congress did not desire the courts to apply the exclusionary rule mechanically to every violation of § 6103.
(a) General provision. The requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims . . .,
Weinstein & Berger's Commentary on the Federal Rules states, P 901(b) (4) (01) at 901-47, that "Wigmore's conclusion that mere contents will not suffice unless only the author would have known the details is contrary to the federal rules and unsound" (footnote omitted) and that "(T)he common law prejudice against self-authenticating documents is not carried over into the Federal Rules." Against this appellant points to the fact that the body of income tax returns is often written by someone other than the taxpayer. However, appellant advances no explanation as to who else could have written the material in his personnel files and the handwriting expert later testified, as the judge was aware he would, that the lettering on these was penned by the same person as penned that in the income tax returns. We hold the exemplars were sufficiently authenticated, cf. Scharfenberger v. Wingo, 542 F.2d 328, 336-37 (6 Cir. 1976).
Bertsch testified to statements by Kevin Mangan that implicated Frank. In a number of conversations in late 1971, Kevin gave a general description of the conspiracy which was to begin operations in early January. He described Frank's role as picking out the names of taxpayers and filing returns to "beat these legitimate taxpayers to their own money"; Kevin's role was to rent apartments in the taxpayers' names, open phony bank accounts and pick up the refund checks. Later Kevin stated that since he would be doing most of the work, he intended to cheat Frank out of the latter's agreed half share by advising that one of the refund checks had not been received and keeping it himself. Frank's counsel objected to the receipt of these statements on the basis of this court's decision in United States v. Puco,476 F.2d 1099 (2 Cir.), cert. denied, 414 U.S. 844, 94 S. Ct. 106, 38 L. Ed. 2d 82 (1973).11 Later he moved to strike the testimony on the ground of insufficiency of the independent evidence to show that Frank was a member of the conspiracy under the test laid down in United States v. Geaney, 417 F.2d 1116 (2 Cir. 1969), cert. denied sub nom., Lynch v. United States, 397 U.S. 1028, 90 S. Ct. 1276, 25 L. Ed. 2d 539 (1970). On appeal counsel seeks to add the ground that the statements were not shown to have been in furtherance of the conspiracy, long made a requirement for admissibility by this court and now embodied in Rule 801(d) (2) (E).
The question whether the statements were in furtherance of the conspiracy is much closer. It has been said that the decision of the framers of the Federal Rules of Evidence to retain this requirement despite its previous abandonment in the ALI Model Code of Evidence (1942), Rule 508(b), and Uniform Rule of Evidence 63(1) (b) (1953), "should be viewed as mandating a construction of the 'in furtherance' requirement protective of defendants," that "(n)arrative declarations should not be admitted as a matter of course" and that "statements of confession should be carefully scrutinized." 4 Weinstein & Berger, supra, P 801(d) (2) (E) (01) at 801-147. However, the authors recognize the limited usefulness of such generalities; they agree that "(w)hether a particular statement tends to advance the objectives of the conspiracy can only be determined by examination of the context in which it is made." Id. at 801-148.
Kevin's statements were surely not "confessions" and were not narrative in the usual sense of describing past or contemporaneous events, cf. United States v. Birnbaum, 337 F.2d 490 (2 Cir. 1964); Salazar v. United States, 405 F.2d 74 (9 Cir. 1968). They looked rather to the future.12 The Government argues that they were in furtherance of the conspiracy since they were made to induce Bertsch to join it or to prepare him for his intended role. See United States v. Jackson, 549 F.2d 517, 533-34 (8 Cir.), cert. denied sub nom. Muhammad v. United States, 430 U.S. 985, 97 S. Ct. 1682, 52 L. Ed. 2d 379 (1977). The declarations are somewhat removed in this aspect from the statement by one conspirator to another in Geaney, 417 F.2d at 1118, that a new recruit "was going to take Dennis (Geaney's) place" a statement needed to reassure the listener that despite Geaney's defection everything was still proceeding according to plan. Bertsch, who was already in Kevin's employ, did not say in so many words that during the conversations in which the conspiracy was explained Kevin was preparing him or soliciting him to participate. On the other hand Bertsch did become an active participant shortly thereafter and it is hard to see what purpose Kevin could have had in making either statement to Bertsch if it was not to enlist his aid or, his aid having been proffered, to brief him on the scheme. In any event, so far as Rule 801(b) (2) (E) is concerned the failure to object at trial on the ground of furtherance is dispositive, see United States v. Indiviglio, 352 F.2d 276 (2 Cir. 1965), cert. denied, 383 U.S. 907, 86 S. Ct. 887, 15 L. Ed. 2d 663 (1966); United States v. Bennett, 409 F.2d 888, 893 (2 Cir.), cert. denied, 396 U.S. 852, 90 S. Ct. 113, 24 L. Ed. 2d 101 (1969); F.R.Evid. 103(a) (1). If objection had been taken, the Government might have been able to elicit further testimony from Bertsch showing that the statements were indeed made to brief him or to induce him to enter the conspiracy; in the absence of such testimony, the judge might have excluded the statements and we would not now be asked to reverse convictions rendered after a three week trial because they were admitted without objection on this score. Cf. United States v. Marchand, 564 F.2d 983, 998 (2 Cir. 1977), cert. denied, --- U.S. ----, 98 S. Ct. 732, 54 L. Ed. 2d 760 (1978).
If Kevin's statements to Bertsch were in furtherance of the conspiracy, this would end the matter. Even if they were not but were nevertheless properly received under the co-conspirator exception because of lack of objection on the furtherance ground, they pass Puco muster. Outlining a criminal design of this sort is not the kind of statement likely to be made as a boast or as idle gossip, cf. Rule 804(b) (3).14 The declarations also meet the test which the Ninth Circuit has developed in an effort to implement the plurality opinion in Dutton v. Evans. See United States v. Snow, 521 F.2d 730, 734-35 (1975), cert. denied, 423 U.S. 1090, 96 S. Ct. 883, 47 L. Ed. 2d 101 (1976), and United States v. King, 552 F.2d 833, 844-46 (1976). At least the trial judge was entitled so to find.
Recognizing that "(e)vidence of sudden acquisition of large amounts of money is . . . admissible to prove criminal misconduct when pecuniary gain . . . is the basic motive," (emphasis in original), United States v. Tramunti, 513 F.2d 1087, 1105 (2 Cir.), cert. denied, 423 U.S. 832, 96 S. Ct. 54, 46 L. Ed. 2d 50 (1975), and that United States v. Falley, 489 F.2d 33, 39 (2 Cir. 1973), held that "the establishment of a defendant's opening net worth is not necessary to permit admission of such evidence," Frank Mangan contends that the Government laid no sufficient predicate to show that the amounts used for stock purchases were either suddenly acquired or large. We doubt whether we would have allowed the evidence to be received, especially in view of the rather small amount involved and evidence in the record of a pattern of rather substantial purchases since 1970, and the trial judge's action in doing so indeed goes to the verge. As against this trial counsel fully developed Frank's explanation on cross-examination of the revenue agent and, in light of the other evidence against Frank, we cannot believe that receipt of this evidence had any effect on the verdict.15 (5) Alleged impairment of Kevin Mangan's right of cross-examination of fingerprint expert.
Defendants' final point is based on United States v. Henderson, 386 F. Supp. 1048 (S.D.N.Y. 1974). Judge Weinfeld there dismissed mail fraud counts of an indictment where the scheme as charged in other counts was to defraud the United States by evading and defeating the payment of income taxes in violation of I.R.C. § 7201 and to file false and fraudulent income tax returns in violation of I.R.C. § 7206(1). He held that, in light of the history of the mail fraud statute, it was not intended to include cases where a taxpayer violated provisions of I.R.C. chapter 75 with respect to his own tax liability. We also have expressed misgivings over the Government's use of the mail fraud statute as a basis for additional counts in an indictment the gravamen of which was the violation of other federal criminal statutes, United States v. Dixon, 536 F.2d 1388, 1398-1401 (2 Cir. 1976).
However, this case differs from Henderson in that the fraud here did not relate to defendants' own tax liabilities. The scheme here was to swindle the Government by causing it to pay out money to persons having no entitlement to it, in a fashion similar to those embraced within the historic purpose of the mail fraud statute, see United States v. Maze, supra, 414 U.S. at 405-06, 94 S. Ct. 643 (Chief Justice Burger, dissenting). Decisions cited in fn. 18 of Judge Weinfeld's Henderson opinion, supra, 386 F. Supp. at 1053, have upheld applications of the mail fraud statute when public bodies have been led through use of the mails to lose property by fraudulent schemes. It is of no moment here that the means used were fictitious tax returns rather than fraudulent statements of other sorts. We can therefore leave the question whether this court would follow Henderson on its facts to another day.21
Stressing the words "as such," appellant argues that the sentence does not apply when the admission of the returns was "prejudicial" in the sense of having a significant tendency to promote a verdict of guilty. Since, apart from the special provision in a particular statute or perhaps when the error is of constitutional proportions, a court would not reverse because of the admission of evidence not having that effect, 28 U.S.C. § 2111; F.R.Cr.P. 52(a), the final sentence of § 6103(i) (4) under appellant's construction would have accomplished nothing. However, this still leaves us wondering what Congress meant by the "as such" phrase. It is also to be noted that literally the sentence applies only to action "contrary to the provisions of this paragraph" and thus leaves arguable the question whether it includes error in an underlying proceeding under § 6103(i) (1) (B). See Senate Comm. on Finance, Compilation of Decisions Reached in Executive Session, 94th Cong., 2d Sess. 63 (Comm. Print 1976):
See also S.Rep.No.94-938, 94th Cong., 2d Sess. 329-330 (1976), U.S.Code Cong. & Admin.News 1976, pp. 2827, 3759. A further curiosity is the absence of a counterpart for the final sentence of § 6103(i) (4) in the corresponding "tax administration" paragraph § 6103(h) (4).
C.F.R. § 301.6103(a)-1(h). This case fits that description. See 26 C.F.R. § 404.6103(a)-1 (permitting disclosure of returns obtained before January 1, 1977 in proceedings described in § 6103(i) (4) if the requirements of that section are met)
Indeed, the Government argues that Frank's statements were admissible as declarations of intention under the principle of Mutual Life Ins. Co. of New York v. Hillmon, 145 U.S. 285, 295-300, 12 S. Ct. 909, 36 L. Ed. 2d 706 (1892), see United States v. Annunziato, 293 F.2d 373, 377-78 (2 Cir.), cert. denied, 368 U.S. 919, 82 S. Ct. 240, 7 L. Ed. 2d 134 (1961), and Judge Renfrew's illuminating discussion in United States v. Pheaster, 544 F.2d 353, 374-80 (9 Cir. 1976). The argument is not without force. As pointed out in these opinions, the Hillmon opinion had directed, whether rightly or wrongly, admission of Walters' letter to prove not only what Walters was going to do but also what Hillmon was going to do ("he (Walters) had the intention of going, and of going with Hillmon, which made it more probable both that he did go and that he went with Hillmon . . . ." 145 U.S. at 296, 12 S. Ct. at 913); on a parity of reasoning, Kevin's declarations (or at least the first one) might be admissible to show Frank's plans as well as his own. Because of confusion generated by the Federal Rules of Evidence, we prefer not to rely on this ground. Rule 803(3) creates a hearsay exception for "(a) statement of the declarant's then existing state of mind, emotion, sensation, or physical condition (such as intent, plan, motive, design . . .) . . ., " and the Advisory Committee's comment on this exception stated that the rule of Hillmon "allowing evidence of intention as tending to prove the doing of the act intended, is, of course, left undisturbed." In contrast the Report of the House Judiciary Committee on Rule 803(3) stated:
It should be made clear that we are not relying on Rule 804(b) (3) as the relevant hearsay exception an office which was here served by Rule 803(3) and which Rule 804(b) (3) could not perform because Kevin, although in fact "unavailable" was not so within the definition of Rule 804(a) (1) which requires a ruling from the court that the desired testimony is privileged. We cite it only for its recognition that a statement exposing a declarant to criminal liability helps to justify a finding of veracity. See also United States v. Harris, 403 U.S. 573, 595, 91 S. Ct. 2075, 29 L. Ed. 723 (1971) (Harlan, J., dissenting); McCormick, Evidence § 278 (2d ed. 1972)