Court Opinion

ID: 9445324
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:24:58.361203+00
Date Added: 2024-06-11T17:30:12.333299
License: Public Domain

*70FRANK, Circuit Judge
(dissenting).
Holland v. United States, 348 U.S. 121, 75 S.Ct. 127, 99 L.Ed. 150, and its companion decisions warn us that the net-worth method is a dangerous instrument, to be used with caution, lest it may have the effect of unconstitutionally putting on an accused the burden of proving his innocence.1 Because of that- warning, I have such doubts about affirming this conviction that I feel constrained to dissent.
The trial judge, in the plainest terms, told the jury that it could not find defendant guilty, unless it found (1) that he had a “probable source of income” (other than his salary or interest on his bank account and bonds) and (2) that this probable source was graft. His charge, in this respect, reads: “To justify the use by the Government of this net-worth-expenditure method you must be satisfied on all the evidence in the case that the defendant has a probable source of income other than his salary and the interest on his bank accounts and the bond interest. You must be satisfied that the probable source of his income was in some way connected with his duties as head of the Vice Squad, with receiving money or things of value either in exchange for services rendered to people whom he came in contact with as an officer of the Vice Squad, or exchange for forbearing to do something he was supposed to do as an officer of the Vice Squad.”
According, then, to the theory on which the case went to the jury, probable graft was an essential element of the government’s case; and Holland v. United States teaches that every essential element must be proved beyond a reasonable doubt. Of course, such proof of any essential may be by circumstantial (“indirect”) evidence. But I think that here the circumstantial evidence of probable graft — which Judge HlNCKS significantly calls proof of “the possibility of graft” — was much too meager to justify a jury finding of the existence of that element. For look at that evidence as Judge HlNCKS describes it:
(a) When defendant was on the vice squad, there was wide open illegal gambling.
(b) While on this squad, in 1948 defendant was told, by another policeman, of the sale of policy slips by one Passorelli, but “no action was taken” until two other officers, learning of this fact, made an arrest.
(c) The number of prosecutions for gambling increased when other policemen were assigned to the vice squad.
(d) Defendant was on “friendly terms” with O’Brien, a professional gambler; defendant and his wife patronized O’Brien’s restaurant ; twice, they visited at O’Brien’s house and once at O’Brien’s summer cottage. After defendant had left the police force, O’Brien phoned defendant two or three times to ask whether defendant was going back on the force.
(Another policeman, Irish, testified that while on the vice squad he (Irish) had “been offered bribes” several times. But this item of evidence was stricken.)
I think a jury could not reasonably infer from this evidence that defendant had probably received graft. Observe that defendant was but a subordinate of the Chief of Police. Even assuming that defendant allowed too much gambling to go on unmolested when he was on the squad, it may well be that he did so under orders from the Chief; judicial notice informs us that experience in many cities shows the great likelihood of such a situation. The statistics as to the number of arrests are misleading: Win-field, the government witness who supplied these figures, testified-that one single raid accounted for a very large number of arrests; that in a single raid in 1950 about 100 persons were arrested and that the figures did not show the *71number of raids as distinguished from the number of arrests.
The “Texas Ford case,” Ford v. United States, 5 Cir., 210 F.2d 313, 318 — cited by Judge HINCKS in another connection —was a pre-Holland decision. The defendant was ■'Chief of Police. On its face, the court’s opinion might seem to support Judge HINCKS as to the proof of probable graft. But, in the instant case, the government in its brief itself says of that case: “While it does not appear in the court’s opinion, the record in that case discloses that the defendant there had received gifts of clothing from the operators of some of the gambling establishments.”2
3 In the case at bar, there is not a syllable of such evidence.
It is this circuit’s doctrine that, in a criminal case, there is no difference, when it comes to granting a judgment of acquittal, between a “preponderance” and “beyond a reasonable doubt,” that the difference is for the jury only. I have recently said why I disagree'with that doctrine. United States v. Masiello, 2 Cir., 235 F.2d 279. But in the instant case, I think the difference unimportant because I think that, if probable grafting was an indispensable element of the government’s case, the government’s proof of that fact was so flimsy that it did not approach anything remotely like a preponderance.
As I read Judge HINCKS’ opinion, he is not willing to hold that, if graft were an essential element, the evidence on that issue would be sufficient. For otherwise he would surely have simplified his opinion by affirming on the quite simple theory presented by the judge to the jury (which Judge HINCKS mentions only in passing and then in a footnote). Judge HINCKS sedulously avoids affirmance on that ground. Instead, he elaborately, over several pages, works out a different theory which is as follows:
(1) There was no need whatever here for the government to prove a “likely source,” because the evidence was entirely adequate to support a finding that defendant had unreported receipts during the indictment years which must have derived from “some source” or other, without specifying any.
(2) Consequently, the government made a case for the jury without the evidence of probable graft, i.e., the jury could reasonably have found defendant guilty if no evidence of probable graft had been received.
(3) However, evidence of “possibility of graft” was properly received as “corroborative” of the evidence that the unreported taxable income derived from some unidentified source or other, corroborative in the sense that it added what was not essential, i. e., proof of a particular likely source.
I shall, for the moment, assume that Judge HINCKS correctly says that no proof of a “likely source” was needed here, that it sufficed to prove “some source” without proof of any particular prohable source.3 If so, the evidence of possible grafting was admissible only if it tended to show (although unnecessarily) a particular likely source. But, as noted above, that evidence was so exceedingly slim that it could not tend to prove that fact.
Therefore, the reception of that evidence should have led to a mistrial or, at the very least, that evidence should have been stricken from the record. For it was most prejudicial since, on the basis of that flimsy evidence, a jury of Rochester citizens were allowed to hear arguments by the prosecutor that the accused had been a grafting Rochester policeman, and the judge’s charge heavily underscored the importance of that evidence.
*72Judge HINCKS attempts to get rid of this error by relegating to a footnote that part of the trial judge’s charge which made probable graft a central issue, and by then saying in that footnote that that charge “was too favorable to the defendant." Surely the phrase “too favorable” is a quaint way of characterizing a charge centering on prejudicial evidence that should not have been in the case. Had the case gone to the jury without the evidence concerning graft and under a charge contrived in accord with Judge HINCKS’ theory, the jury might or might not have found defendant guilty. But I think we cannot properly affirm a conviction resulting from a conjectural verdict based on an imaginary charge with reference to an imaginary record, i. e., a record not containing the prejudicial evidence about graft. Judge HINCKS seems to regard this error as “harmless,” for he apparently seeks to exorcise it by stating that we must look to “the totality of proofs," their “overwhelming substantiality,” and must avoid “irrelevant abstractions.” I think the markedly prejudicial error in the reception of the graft evidence, emphasized by the judge’s charge, is no “irrelevant abstraction.” It is the very kind of error which could easily acedunt for the verdict. Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557, admonishes us that such an error is not “harmless,” that we may not affirm a conviction merely because, reading a cold record, we believe the defendant would have been convicted if the error had not occurred.
Moreover, I gravely doubt the validity of a basic postulate of Judge HINCKS’ theory. That is, I question whether Holland v. United States, 348 U.S. 121, 75 S.Ct. 127, 99 L.Ed. 150, ever permits á conviction in a net-worth case without proof of a “likely source,” which (to . quote Judge HINCKS) “the defendant had actually drawn upon.” Cf. United States v. Costello, 2 Cir., 221 F.2d 668, 670-671. True, in Holland, the Supreme Court said, 348 U.S. 137-138, 75 S.Ct. 136, that proof of such a source is “sufficient” ; and one can argue that there is a difference between what is an essential and what is “sufficient.”
But in Holland, the Court, 348 U.S. at page 137, 75 S.Ct. at page 136, carefully pointed out that there was a “likely source” in the income from -the hotel. In discussing (348 U.S. at page 138, 75 S.Ct. at page 137) United States v. Johnson, 319 U.S. 503, 63 S.Ct. 1233, 87 L.Ed. 1546, the court said that there “the taxpayer was the owner of an undisclosed business capable of producing taxable income”, and that in Holland there was such a “disclosed business” (i. e., the hotel). Also, 348 U.S. at page 126, 75 S.Ct. at page 131, the Court said: “In each of the four cases decided today the allegedly unreported income comes from the same disclosed sources as produced the taxpayer’s reported income * *
Judge HINCKS, I think, misinterprets Smith v. United States, 348 U.S. 147, 75 S.Ct. 194, 99 L.Ed. 192. I think it makes clear (1) that proof of a “likely source” is necessary and (2) that even a defendant’s affirmative admissions, during a pre-indictment investigation, must be corroborated. In the Smith case, the evidence showed the following: The year before the indictment years, defendant had acquired a racing-news service, described by the Court as “a business, producing unrecorded amounts of income.” See 348 U.S. at pages 149, 159, 75 S.Ct. at page 200. In the course of a preindictment investigation, defendant had made a written statement affirmatively admitting what hé called his “true net worth.” The government relied, in large part, on this written admission. The Court said that, “whether we consider the statement an admission of one of the formal ‘elements’ of the crime or of a fact subsidiary to the proof of these ‘elements' ", it was “crucial” to, “an element vital to,” the government’s case. As the admission was made after the commission of the alleged crime, the Court held it required corroboration because, though not “involuntary,” still “its reliability” was “suspect,” since it was “extracted from one * * * under presure of” an *73investigation, “whose words may reflect the strain and confusion attending his predicament rather than a clear reflection of his past.” In discussing, 348 U.S. at pages 156-157, 75 S.Ct. at pages 198, 199, the “quantum of corroboration,” the Court said, “all elements of the offense must be established by independent evidence or corroborated admissions,” adding at once, “but one available mode of corroboration is for the independent evidence to bolster the confession itself and thereby prove the offense ‘through’ the statements of the accused. * * * Under the above standard the Government may provide the necessary corroboration by introducing substantial evidence, apart from petitioner’s admissions, tending to show that petitioner willfully understated his taxable income.” This entire discussion is, in its context, concerned exclusively with proof of corroboration of an affirmative admission. The same is true of the court’s subsequent discussion, 348 U.S. at pages 158-159, 75 S.Ct. at page 200. There the Court said, “But substantiating the opening net worth is just one method of corroborating these extrajudicial statements”, and went on to state that the “admissions may also be corroborated by an entirely different line of proof' — by independent evidence concerning petitioner’s conduct during the prosecution period, which tends to establish the crime of tax evasion without resort to the net worth computations.” The Court then summarized the evidence of his conduct “coincident with petitioner's opening of the racing-news service.” This conduct, the Court concluded, “does corroborate the net worth statement by tending to show that the petitioner was understating his income during the prosecution years.” Here, again, the Court spoke of the necessity, in one way or another, of corroborating the defendant’s admissions, and again referred to a business which was a “likely source.”
However, let us assume, arguendo, that in an appropriate case, it is not essential to prove a “likely source.” Even so, I have these doubts about Judge HINCKS’ reasoning, which, as I understand it runs thus:
For proof of a likely source, the’ government could substitute evidence, in the form of statements emanating from the defendant, which negated the possible existence of enough non-taxable sources to account for the apparently unreported taxable income. This substituted essential element of the government’s case was not proved by defendant’s testimony, since he did not take the stand. It was, says Judge HINCKS, sufficiently proved by evidence of defendant’s lies during the course of the pre-indictment investigation.
If, then, I understand Judge HINCKS, these out-of-court lies became an essential part of the government’s case. Judge HINCKS’ reasoning therefore disturbs me: Assuming arguendo, that proof of a likely source was not necessary, then, if defendant, out of court, had made affirmative admissions of facts tending to show unreported taxable income (or lack of a sufficient “cash hoard” or the like), such admissions, if corroborated, would have sufficed. But defendant’s out-of-court statements were, at most, lies, by way of denying such affirmative facts. Do such negative statements measure up to admissions? To put it differently, assuming again that proof of a likely source was not needed, do these negative statements (falsehoods) suffice, even if corroborated, to support the verdict?
I think not. As above noted, the Smith case calls for corroboration of even an affirmative admission. The reason for such a requirement is also stated, in Holland v. United States, 348 U.S. 121, at pages 128-129, 75 S.Ct. 127, at page 132, where the Court observed that, in the course of a pre-indictment investigation, the taxpayer “may be more concerned with a quick settlement than an honest search for the truth”, and said, “The problem of corroboration, dealt with in the companion case of Smith v. United States, 348 U.S. 147, 75 S.Ct. 194 [99 L.*74Ed. 192], and United States v. Calderon, 348 U.S. 160, 75 S.Ct. 186 [99 L.Ed. 202], therefore becomes crucial.” Note, then that (as in Smith) in United States v. Calderon, 348 U.S. at page 164, 75 S.Ct. at page 188, the defendant had made pre-indictment affirmative admissions, and that, 348 U.S. at page 165ff, 75 S.Ct. at page 188, there was evidence corroborating these admissions.
To be sure, if there were enough independent evidence, aside from pre-indictment lies (negative statements), then, of course, evidence of those lies would be admissible as cumulative evidence. Like flight, or a false alibi, or spoliation of documents, such lies are proof of a guilty mind. But, absent independent evidence otherwise sufficient to prove facts essential to a verdict of guilt, I doubt whether evidence of lies, flight, false alibis or spoliation will support such a verdict, especially in a net-worth case. The reason for not accepting such evidence as proof of an essential element was stated by Judge Shaw in Com. v. Webster, 5 Cush., Mass., 295, 316: An “innocent man, when placed in a condition of suspicion and danger, may resort to deception.” See also, Ayala v. United States, 1 Cir., 268 F. 296, 300; Vick v. United States, 5 Cir., 216 F.2d 228, 232.
Judge HINCKS apparently disagrees with what I said in the preceding paragraph. He cites, inter alia, Holland v. United States, 348 U.S. 121, 75 S.Ct. 127, 99 L.Ed. 150; Friedberg v. United States, 348 U.S. 142, 75 S.Ct. 138, 99 L.Ed. 188, and United States v. Calderon, 348 U.S. 160, 167, 75 S.Ct. 186, 99 L.Ed. 202. I think my discussion of Holland and Smith, supra, shows that they do not bear him out. I see nothing on the subject in Friedberg: there the defendant took the stand and “vacillated” in his testimony, see 348 U.S. at page 143, 75 S.Ct. at page 139. Speaking of the defendant’s “false and misleading extrajudicial statements”, Judge HINCKS surprisingly remarks that the Supreme Court, “with regard to similar evidence”, stated in United States v. Calderon, 348 U.S. 160, 167, 75 S.Ct. 186, 190, “There could hardly be more conclusive independent evidence of the crime.” Judge HINCKS has overlooked the fact that this statement of the Supreme Court refers to “respondent’s testimony at the trial” conflicting with his “testimony at a former trial.” 4
Judge HINCKS also cites several circuit court cases. All but one (i. e., United States v. Adonis, 3 Cir., 221 F.2d 717) are (1) unrelated to a net-worth problem and/or (2) ante-date the Supreme Court decision in Holland and its companion decisions:
(a) Sasser v. United States, 5 Cir., 208 F.2d 535 was pre-Holland. Moreover, the evidence of the out-of-court lies was but one among several factors enumerated by the court, and not a factor essential to support the verdict.
(b) Gariepy v. United States, 6 Cir., 189 F.2d 459, 463 was preHolland. Moreover, the court said the defendant had made affirmative “admissions”; the court also said they were “admissible” because they “reinforced permissible inferences from evidence at the trial.”
(c) United States v. Simone, 2 Cir., 205 F.2d 480, 482, was not a net-worth case; also, it was pre*75Holland. It relied on Smolin, United States v. Smolin, 2 Cir., 182 F.2d 782, 786, “and cases there cited.” So turn to Smolin, 2 Cir., 182 F.2d 782, 786. It, too, was not a net-worth case, and was pre-Holland. It cited and relied on Tucker v. United States, 151 U.S. 164, 14 S.Ct. 299, 301, 38 L.Ed. 112. But in Tucker the defendant testified at the trial, and the Supreme Court said that his out-of-court statement was used to “contradict his testimony upon the stand.”
The one post-Holland net-worth case which seems to support Judge HINCKS is United States v. Adonis, 3 Cir., 221 F.2d 717. If it does, I think it wrong. See McCormick, Evidence (1954) 538-539. See also Morgan, 59 Harvard L. Rev. (1946) 480 at 557 to the effect that the “greater number of cases hold that spoliation does not amount”' to “evidence of necessary facts not otherwise appearing in the case”; and see Maguire and Vincent, Admissions from Spoliation or Related Conduct, 45 Yale L.J. (1935) 227.
So I think, that, even on Judge HINCKS’ theory, the judge should have granted defendant’s motion for a judgment of acquittal at the close of the government’s evidence. Defendant, however, did not stand on the denial of this motion, but introduced evidence in his defense. If this evidence had contained anything affirmative which supplied the missing essential of the government’s case, the jury’s verdict would have been proper, on Judge HINCKS’ theory. But there was no such evidence introduced by the defense. The testimony of Mrs. Ford, a witness for the defense, did not do the trick. To be sure, the jury may well have believed that she lied. However, as she was but a witness, not a defendant, her lies constituted a negative only. They cannot, I think, supply affirmative proof, for the government, of a missing essential. Even in a civil case in most jurisdictions, “disbelief of testimony is not the equivalent of proof of facts contrary to that testimony”; Boice-Perrine Co. v. Kelley, 243 Mass. 327, 137 N.E. 731, 733; Zarrillo. v. Stone, 317 Mass. 510, 58 N.E.2d 848, 849; Cruzan v. New York Cent. & H. R. R. Co., 227 Mass. 594, 116 N.E. 879, 880; Pariso v. Towse, 2 Cir., 45 F.2d 962, 964. Consequently, although the defense put in evidence, that evidence did not strengthen the government’s case. Wherefore, even on Judge HINCKS.’ theory, we should reverse.5

. See Holland v. United States, 348 U.S. at page 128, 75 S.Ct. at page 131.

. See also Davena v. United States, 9 Cir., 198 F.2d 230, 231.

. At one point, Judge HINCKS says no “direct proof” of a particular likely source was necessary. If he means that “indirect” or circumstantial evidence of a particular likely source would do, I agree. But there was lacking any but the flimsiest “indirect” evidence on that score.

. The complete passage reads as follows: “Even more conclusive corroboration, however, is respondent’s testimony at the trial that he had $16,000 or $17,000 cash on hand at the starting point. This conflicted with the statements being corroborated ($500) and respondent’s testimony at a prior trial ($2,000 to $9,000), but for the purpose of independently establishing the crime charged the jury could accept this testimony. Respondent further testified that he had $3,000 or $4,000 in cash at the end of the prosecution period. Taken together with the remainder of the net worth statement, which was stipulated or independently esblished, this testimony establishes a deficiency in reported income of more than $30,000. There could hardly be more conclusive independent evidence of the crime.”

. See Criminal Rule 29.