Source: https://law.justia.com/cases/federal/appellate-courts/F2/860/521/465637/
Timestamp: 2019-10-24 03:26:25
Document Index: 608447210

Matched Legal Cases: ['§ 371', '§ 5313', '§ 3161', '§ 371', '§ 7206', '§ 7206', '§ 7206', '§ 371', '§ 371', '§ 7201', '§ 3713', '§ 72014', '§ 7206', '§ 371', '§ 3161', '§ 3161', '§ 3161', '§ 3161', '§ 3161', '§ 3161', '§ 7201']

United States of America, Appellee, v. Schnejer Zalman Gurary, Nochum Sternberg and Esthersternberg, Defendants-appellants, 860 F.2d 521 (2d Cir. 1988) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 1988 › United States of America, Appellee, v. Schnejer Zalman Gurary, Nochum Sternberg and Esthersternberg,...
United States of America, Appellee, v. Schnejer Zalman Gurary, Nochum Sternberg and Esthersternberg, Defendants-appellants, 860 F.2d 521 (2d Cir. 1988)
US Court of Appeals for the Second Circuit - 860 F.2d 521 (2d Cir. 1988) Argued Sept. 7, 1988. Decided Oct. 24, 1988
The Government filed a complaint against Gurary and Nochum Sternberg (Gurary's son-in-law) on April 2, 1986, charging them with one count of a conspiracy to defraud the United States in violation of 18 U.S.C. § 371, and three counts of currency reporting violations under 31 U.S.C. §§ 5313 and 5322 in connection with tax returns filed by Irwin Feiner and his companies. Fifteen days later the Government applied for a sixty-day continuance of the time in which to return an indictment or hold a preliminary hearing pursuant to the Speedy Trial Act, 18 U.S.C. § 3161(h) (8) (A). Judge Kevin T. Duffy, sitting in Part I, granted the continuance, finding delay of the preliminary hearing was "indispensable to the interests of justice." This Court rejected defendants' interlocutory appeal from Judge Duffy's order.1
On June 18, 1986, a grand jury returned an indictment2 charging that all three defendants conspired to defraud the United States in violation of 18 U.S.C. § 371; aided and assisted the presentation of false corporate income tax returns in violation of 26 U.S.C. § 7206(2); and aided and assisted the principals of certain corporations in the presentation of false individual income tax returns, in violation of 26 U.S.C. § 7206(2).
Defendants contend the evidence presented by the Government was insufficient to support a finding that Gurary and the Sternbergs intended to violate the tax laws. Both the 26 U.S.C. § 7206(2) substantive counts and the 18 U.S.C. § 371 conspiracy count require a showing of specific intent. The specific standards for each, however, vary.
In the context of this statute, "willfully" means an intentional violation of a known legal duty. See, e.g., United States v. Bishop, 412 U.S. 346, 93 S. Ct. 2008, 36 L. Ed. 2d 941 (1973); United States v. Pomponio, 429 U.S. 10, 97 S. Ct. 22, 50 L. Ed. 2d 12 (1976).
In considering whether the jury's verdict should be overturned, we must view the evidence and make all permissible inferences in the light most favorable to the Government. United States v. Carson, 702 F.2d 351 (2d Cir.), cert. denied, 462 U.S. 1108, 103 S. Ct. 2456, 77 L. Ed. 2d 1335 (1983); United States v. Ciambrone, 787 F.2d 799 (2d Cir.), cert. denied, 479 U.S. 1017, 107 S. Ct. 668, 93 L. Ed. 2d 720 (1986); United States v. Heinemann, 801 F.2d 86 (2d Cir. 1986), cert. denied, 479 U.S. 1094, 107 S. Ct. 1308, 94 L. Ed. 2d 163 (1987). The question presented here is whether the Government presented any evidence from which the jury could infer that defendants knew their scheme would result in the filing of false corporate and individual tax returns, and deliberately proceeded with their scheme in the face of that knowledge. We hold the Government presented such evidence.
On the conspiracy count, defendants contest the sufficiency of evidence only on the question of intent, not the agreement and overt-act elements of conspiracy. A conviction for conspiracy under 18 U.S.C. § 371 requires a showing of intent; "conspiracy to commit a particular substantive offense cannot exist without at least the degree of criminal intent necessary for the substantive offense itself." Ingram v. United States, 360 U.S. 672, 678, 79 S. Ct. 1314, 1319, 3 L. Ed. 2d 1503 (1959), quoting Developments in the Law--Criminal Conspiracy, 72 Harv. L. Rev. 920, 939 (1959).
The conspiracy count specified the following as illegal objects of the conspiracy: (i) defrauding United States of income taxes and of truthful and accurate information relating to tax liability, by impeding, obstructing and defeating the lawful functions of the IRS in the ascertainment, evaluation, assessment, and collection of taxes and the auditing and review of income tax returns and documentation relating to those returns; (ii) attempting to evade and defeat corporate and personal income taxes of the invoice purchasers and their principals in violation of 26 U.S.C. § 7201; and (iii) aiding and assisting in the filing of false returns. The intent requirement for each object requires separate analysis.
18 U.S.C. § 3713 encompasses not only conspiracies that involve loss of Government funds, but also conspiracies for the purpose of impairing, obstructing or defeating the lawful function of any department of Government. United States v. Johnson, 383 U.S. 169, 172, 86 S. Ct. 749, 751, 15 L. Ed. 2d 681 (1966). Furthermore, intent to defraud the United States may be incidental to another primary motivation or purpose. United States v. Southland Corp., 760 F.2d 1366, 1373 (2d Cir.), cert. denied, 474 U.S. 825, 106 S. Ct. 82, 88 L. Ed. 2d 67 (1985).
The level of intent required to show a conspiracy to evade taxes in violation of 26 U.S.C. § 72014 , or aid and assist the filing of false tax returns in violation of 26 U.S.C. § 7206, is one of willfulness. Defendants must have intentionally violated a known legal duty. See United States v. Pomponio, supra.
The Government presented sufficient evidence of intent to support the jury's verdict under 18 U.S.C. § 371. A jury could reasonably infer that defendants intentionally aided the filing of false returns. Similar grounds support the inference that defendants intended to impede or obstruct the IRS from carrying out its functions.
Comments to the Model Penal Code Sec. 2.02(7), from which the conscious avoidance instruction is derived, see United States v. Jacobs, 475 F.2d 270 (2d Cir.), cert. denied sub nom. Lavell v. United States, 414 U.S. 821, 94 S. Ct. 116, 38 L. Ed. 2d 53 (1973), suggest that in general, conscious avoidance instructions are only appropriate where knowledge of an existing fact, and not knowledge of the result of defendant's conduct, is in question. The comment states:
Defendants further contend that the conscious avoidance instruction permitted conviction without proof of specific intent to violate the tax laws. Decisions of this court indicate that in a conspiracy case, a conscious avoidance instruction may be given to show a defendant had some knowledge of the unlawful aims and objectives, but not to establish knowing participation or membership in the scheme charged. See, e.g., U.S. v. Heinemann, 801 F.2d at 93-94; United States v. Lanza, 790 F.2d 1015 (2d Cir.), cert. denied, 479 U.S. 861, 107 S. Ct. 211, 93 L. Ed. 2d 141 (1986); United States v. DiTommaso, 817 F.2d 201, 218-19 (2d Cir. 1987). In the present case, the judge limited his conscious avoidance instruction to whether defendants knew of the illegal object or purpose of the alleged conspiracy.6
Defendants object to the trial judge's questioning of witnesses during trial, claiming that it conveyed his hostility to the defendants' theory of the case and biased the jury. In reviewing a claim of judicial misconduct, "we must determine whether the judge's behavior was so prejudicial that it denied [defendants] a fair, as opposed to a perfect, trial." United States v. Pisani, 773 F.2d 397, 402 (2d Cir. 1985), citing United States v. Robinson, 635 F.2d 981 (2d Cir. 1980) cert. denied, 451 U.S. 992, 101 S. Ct. 2333, 68 L. Ed. 2d 852 (1981). Judge Walker's questioning did not deny defendants a fair trial. This trial was lengthy, and much of the evidence consisted of complicated, technical material. Our review of the transcript further indicates that trade lingo used by many of the witnesses might confuse a lay jury. Most of the Judge Walker's questions merely clarified testimony previously given. Any possible prejudicial effect was cured by the cautionary instruction.7
Defendants also contend their indictment on counts related to tax returns filed by Irwin Feiner and his company violated the Speedy Trial Act, 18 U.S.C. § 3161 et seq. Defendants Gurary and Nochum Sternberg were arrested on April 2, 1986, under a complaint charging them with crimes related to Feiner tax returns. Sixteen days later on April 18, 1986, Judge Duffy sitting in Part I granted a 60 day continuance pursuant to 18 U.S.C. § 3161(h) (8), extending the time in which defendants must receive a preliminary hearing or be indicted under the Speedy Trial Act. Pursuant to Rule 3 of the Rules for the Division of Business Among District Judges, Part I is the district court's Part for emergency and miscellaneous matters in civil and criminal cases, and for processing criminal actions and proceedings through the pleading stage. Defendants' appeal of that order was rejected by this court as interlocutory. After defendants filed a motion to dismiss the Feiner counts, but before Judge Walker's denial of that motion, Judge Duffy entered findings of fact supporting his previous order of continuance.
Defendants challenge the grant of the continuance, and the denial of their motion to dismiss, on the basis that the findings required by 18 U.S.C. § 3161(h) (8) were not made. Defendants' contentions lack merit. Esther Sternberg was arrested after indictment, so that section 3161(b)'s thirty-day time limit does not apply to her. As to Gurary and Nochum Sternberg, we find Judge Duffy's findings on the record sufficient to support a continuance under 18 U.S.C. § 3161(h) (8).8
Under the law of this circuit, a court excluding time based on an ends-of-justice continuance under 18 U.S.C. § 3161(h) (8), before granting the continuance, must balance the factors specified in that section; the court need not, however, place the precise reasons on the record at that time. United States v. Tunnessen, 763 F.2d 74 (2d Cir. 1985); United States v. Matsushita, 794 F.2d 46 (2d Cir. 1986). In the present case, the sixty-day continuance was granted prospectively. The record of the hearing on the motion and Judge Duffy's order indicate that he considered submissions from both sides before determining that a continuance best served the ends of justice. The findings supporting the grant of a continuance are sufficiently particularized and amply supported by the record in this case. They state in part:
(a) delay in the filing of the Indictment was caused because the arrest of the defendants occurred at a time such that it was unreasonable to expect return and filing of the Indictment within the period specified in 18 U.S.C. § 3161(b);
793 F.2d 468 (2d Cir. 1986)
26 U.S.C. § 7201 provides in part:
Defendants claim that incorporation by reference does not satisfy the Speedy Trial Act's requirement of specific findings justifying exclusion, citing United States v. Janik, 723 F.2d 537, 545 (7th Cir. 1983). That court's comment on incorporation by reference, however, pertains to a trial court's attempts to justify an exclusion under section 3161(h) (8) (A) based on analysis of a separate period. Other circuits, in determining whether a continuance is supported by reasons set forth in the record, have considered both the order of the court and the motions on which the order was based. See, e.g., United States v. Mitchell, 723 F.2d 1040 (1st Cir. 1983)