Opinion ID: 510033
Heading Depth: 3
Heading Rank: 3

Heading: Application of 8(b)

Text: 27 As the district court recognized,  'tax counts can properly be joined with non-tax counts where it is shown that the tax offenses arose directly from the other offenses charged.'  652 F.Supp. at 711 (quoting United States v. Kopituk, 690 F.2d 1289, 1313 (11th Cir.1982), cert. denied, 461 U.S. 928, 103 S.Ct. 2089, 77 L.Ed.2d 300 (1983)). The most direct link possible between non-tax crimes and tax fraud is that funds derived from non-tax violations either are or produce the unreported income. See United States v. Kenny, 645 F.2d 1323, 1344 (9th Cir.) ([T]he tax evasion charges ... arose directly and solely out of unreported income flowing from the illicit contracting activities.), cert. denied, 452 U.S. 920, 101 S.Ct. 3059, 69 L.Ed.2d 425 (1981). However, if the character of the funds derived do not convince us of the benefit of joining these two schemes in one indictment, other overlapping facts or issues may. 28 In this case, the funds that formed the basis of the unreported income, with one exception, were not derived directly from the Compumeter scheme. The only evidence of a direct connection is that Turoff accepted two $15,000 payments from Lee in 1984 for his role in the Compumeter scheme. These funds were part of the 1984 closing balance in his Hyfin account that earned $4,695.19 of unreported interest. As for the Silvers, the government conceded before trial that they were charged with failing to report interest income derived from sources other than the scheme charged in the mail fraud counts. United States v. Turoff, No. 86 Cr. 00422, supra. For this reason, identity of funds derived from the Compumeter conspiracy and those funds unreported in the tax fraud schemes does not provide the essential connection for joinder under 8(b). 29 Yet, there is a key link between the two offenses--one scheme stemmed from the other--and that link provides a sound basis for joinder under Rule 8(b). Appellants and their cohorts manipulated the Hyfin accounts simultaneously to advance the Compumeter scheme and to accumulate unreported income. The acts involved in each scheme have more than a temporal and spatial relationship. See United States v. Jackson, 562 F.2d 789, 796 (D.C.Cir.1977). Significantly, the tax fraud hinged on the fraudulent activities taken to advance the Compumeter conspiracy. Consequently, the proof of one scheme is indispensable for a full understanding of the other. 30 A quid pro quo was exchanged between these participants, each giving something of value to enhance the Compumeter mail fraud scheme with the expectation of some financial benefit in return. And these financial benefits were part and parcel of the tax fraud. Cf. United States v. Korfant, 771 F.2d 660, 663 (2d Cir.1985) (distinct unrelated conspiracies for double jeopardy purposes where success or failure of one is independent of the corresponding success or failure of the other). From the inception of his relationship with Lee, Turoff's budding misuse of his position as Taxi Commission Chairman and his unreported Hyfin account income went hand in hand. For instance, Lee reduced the interest rate on several of Turoff's loans in exchange for a promise from Turoff that Hyfin would handle exclusively the financing of Compumeter purchases. Again, for example, Harriet Silver opened eight Hyfin accounts for the express purpose of allowing Lee to funnel into them loan proceeds involved in the Compumeter scheme. And, at the same time, the Silvers opened the Hyfin accounts used to commit the tax fraud. Thus, the Hyfin accounts were used to facilitate the personal and financial relationships that enabled the Compumeter scheme to proceed. Although the actual unreported income was largely (in Turoff's case) or wholly (in the Silvers' case) earned from deposits unrelated to the Compumeter scheme, these accounts served in some measure as a tie connecting appellants to each other, to Lee, and to both schemes. Lee, of course, was the crucial figure overseeing the manipulation of the Hyfin bank accounts, and it was these accounts that served as the channels for illegal activity. 31 In sum, applying a commonsense rule to these facts, we conclude that a reasonable person would easily recognize the common factual elements that permit joinder of the mail fraud charges and the tax fraud charges in one indictment. Therefore, the charges were properly joined under Rule 8(b).