Court Opinion

ID: 9457944
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:39:01.911046+00
Date Added: 2024-06-11T17:35:35.310555
License: Public Domain

MEDINA, Circuit Judge
(dissenting):
Charles R. Harary, a Certified Public Accountant, appeals from a judgment entered upon the verdict of a jury, after a trial before Judge Metzner, convicting him of giving a gratuity to an Internal Revenue Agent in violation of 18 U.S.C., Section 201(f). The indictment charged Harary: in Count 1 with conspiracy to give a bribe; in Count 2 with giving a bribe with the specific corrupt intent to influence the Revenue Agent's audit of the income tax returns of Sutton & Sutton, Ltd., in violation of 18 U.S.C., Section 201(b); and in Count 3 with giving the Internal Revenue Agent a gratuity in violation of 18 U.S.C., Section 201(f). The jury acquitted Harary of conspiracy to bribe and of bribery but found him guilty of giving a gratuity. He was sentenced to a term of imprisonment for 1 year and is at large on bail pending the determination of this appeal.
I
The sole point raised is that the trial judge erred in denying defendant’s motion to withdraw the gratuity count from the consideration of the jury. As this is a lesser-included offense and, as the jury was instructed, there could have been no verdict of guilty on both the bribery and the gratuity counts, and as the evidence was sufficient to support a verdict of guilty of bribery-, Harary argues that the submission of the gratuity count was error because: “the evidence could only support a verdict of guilty of bribery or an acquittal by reason of entrapment”; the submission of the gratuity count was an invitation to bring in a compromise verdict, and “to invade that province traditionally left to the court — the imposition of punishment.” If this argument prevails Ha-rary, whose counsel admitted in his opening to the jury that Harary had paid $1250 to the Revenue Agent, will be a free man, protected by the verdict of acquittal on the conspiracy and bribery counts from further prosecution.
It is clear to me that there is no merit whatever in any of the arguments proffered on Harary’s behalf. In this simple case the Government chose to allege in the indictment each of the three counts above referred to, the defendant pleaded not guilty to each count. This put in issue each and every material allegation set forth in each count. There was no occasion to sift the proofs to discover any dispute. This inquiry was pursued in Sansone v. United States, 380 U.S. 343, 85 S.Ct. 1004, 13 L.Ed.2d 882 (1965), and United States v. Markis, 352 F.2d 860 (2d Cir. 1965) so heavily relied upon by Harary, because the indictment in each of these cases did not allege or charge the commission of the lesser offense. In each of these cases it' was found that the record showed no dispute, and hence no issue. The requested charge on the lesser-included of*481fense was accordingly denied. The lesser offense literally was not in the case. In our case the pleas of not guilty put in issue the allegations of the gratuity count as well as the others. Harary did not testify in his own defense. His proofs consisted of a few character witnesses. The vital difference between the bribery count and the gratuity count was that a verdict of guilty of bribery had to be based on a finding of a specific intent to influence an official act of the Revenue Agent, whereas no such finding was necessary to establish the payment of a gratuity. It was the sole function of the jury to find or not to find that Harary entertained the requisite specific intent alleged in the bribery count. And there was ample proof to support the verdict of guilty on the gratuity count.
The claim that Harary conceded and then “again conceded the factual elements supporting the bribery charge” is pure nonsense. This would have meant that he conceded he paid the money with the specific intent to influence a Revenue Agent in the performance of his duty. Counsel for Harary made no such concession, nor any concession other than that he paid the $1250 to the Revenue Agent. What counsel refers to is the testimony adduced by the prosecution of questions and answers of Harary in his statement to an Assistant United States Attorney shortly after his arrest.
II
I think what has already been said is sufficient to demonstrate that the judgment should be affirmed. I shall review and discuss the evidence, however, because I am convinced that the jurors reached a proper and thoroughly sensible and rational conclusion with respect to every one of the three counts submitted to them. The instructions of the trial judge were in every respect accurate and free from confusion, ambiguity or repetition.
Sometime in August 1970 Inspector Harold Wenig, in charge of investigations of corruption on the part of Revenue Agents and taxpayers, received a tip from an informant that Sutton & Sutton, Ltd., which operated a series of retail cash discount stores, was making pay-offs to municipal employees. Consequently, he ordered the corporate tax returns sent to him ai; once and caused Revenue Agent Lawrence Ostrow, with whom the Inspector had worked before, to be assigned to make a “routine audit,” although no such audit had been contemplated. The Inspector gave Ostrow the most explicit directions. He was free to eat and drink at the taxpayer’s expense. He was, however, under no circumstances to initiate any discussion about making gifts or paying money. But if any “overtures” were made, he was to report them at once and then play for time until arrangements could be made to get the approval of the Attorney General to wire Ostrow for sound in order to record any offer that might be made following the “overtures.” When it came down to money, if any was offered, he could bargain and induce the taxpayer to increase the offer so long as he was not the first one to bring up the subject.
It is amazing how quickly the business was done. Ostrow’s first conference with Harary, and one or both of the Sutton Brothers, was on September 1, 1970 at the Suttons’ place of business. The first of the two corporate tax returns was for an initial period of July 21 to August 31, 1967 for the purpose of establishing an accounting period. The second corporate tax return was for the period September 1, 1967 to August 31, 1968. After a few perfunctory inquiries concerning income items, expenses and inventory, Ostrow zeroed in on an item of $199,000 representing capitalization. Where did that money come from ? By lunch time Ostrow and Harary were very chummy. They had lunch together. Harary offered Ostrow the services of a prostitute, free of charge, but Ostrow says he declined the offer. Nevertheless they went around to the place frequented by these prostitutes to look them over, but none was there. Harary also of*482fered a camera, free or at a large discount. Nothing came of this.
Most of the afternoon was spent discussing the item of $199,000. The Sut-tons said their father had very large holdings in Syria and Lebanon, that the $199,000 item represented what they were able to salvage, at great sacrifice, through the cooperation of certain Arabs. They produced letters, the most recent of which stated “we have succeeded in liquidating the estate and you are getting a small sum of the overall estate.” But Ostrow said anyone might have written these letters. What he needed were affidavits, notarized in Syria or Lebanon. For an Arab to do this to help a Jew to get money of the country would be like committing suicide, Os-trow was told. Nothing satisfied him. The deposit slips showed the moneys came from abroad. But Ostrow had to see the cancelled checks, which were not obtainable.
So, after about 4 hours of so-called audit on September 1, 1970, Ostrow returned to Inspector Wenig with the good news that Harary had made the anticipated “overtures,” meaning the offer of the services of a prostitute and the camera. Ostrow had arranged to have Harary bring him, on September 4, the individual tax returns of the two Sut-tons. This had to be called off so that arrangements for wiring Ostrow for sound could be completed before the meeting at which it was expected Harary would make an offer of money. A new conference for a continuance of the “audit” was set for September 22, 1970, also at the place of business of the Sut-tons. When the time came, the approval of the Attorney General having been obtained, Ostrow was “wired up” by placing a KEL transmitter about the size of a king-sized cigarette case on his person, so Inspector Wenig could listen to what occurred, and by placing a Miniform recorder in his briefcase to make a permanent record that could be played back. Ostrow was searched and found to have $19. Then the Inspector and Ostrow, and perhaps others, drove over to the Suttons’. It turned out later that the recording was so full of inaudibles that it was not received in evidence at the trial. It was, however, used extensively on the cross-examination of Ostrow, which consumed the greater part of the trial.
On the morning of September 22 Ostrow pulled out all the stops. He doubted whether even the cancelled checks or affidavits by the Arabs would satisfy him. He told Harary and one of the Suttons that he had to be able to trace the flow of the funds from their source into the corporation. And he said twice that if they could not substantiate the item of $199,000 to his satisfaction, he would have to assess a tax of $60,000 against the two Suttons individually. The predictable result was that, after another lunch at the expense of the Suttons, Harary began to talk money. It was he who brought the subject up. True to his instructions, Os-trow told Harary to “keep talking.” Starting at $250, Harary was soon up to $1000. At this point he told Ostrow confidentially that of the $1000, $750 would go to Ostrow and Harary would keep the other $250 himself. Finally, Ostrow was to get $1250. Harary told the Suttons that Ostrow wanted $2000. And when one of the Suttons brought $2000 in a brown paper bag, Harary gave $1250 to Ostrow and kept the other $750 for himself. It is a revolting story.
A few days later Harary was arrested. After being photographed and fingerprinted, he was taken to the office of the United States Attorney, given the Miranda warnings and interviewed. His attorney came over. Inspector Wenig and at least two Assistant United States Attorneys were there. One of them explained to Harary the advantage of cooperation. Inspector Wenig also told him that they had a good solid case against him and that “when somebody comes in and cooperates they certainly are given some sort of consideration by the court.” Accordingly, after private discussion with his attorney, Harary gave the statement in question and an*483swer form that is so strongly relied on by counsel here as a “concession” that he was guilty of bribery as alleged in Count 2 of the indictment. This is supposed to leave only the issue of entrapment for the consideration of the jury in connection with the bribery count, despite the fact that the statute and the judge’s instructions required a finding that the money was paid with a specific intent to influence Ostrow’s audit of the income tax returns of Sutton & Sutton, Ltd.
Harary’s statement, as testified by Wenig, was:
[Maloney] first asked Mr. Harary did he pay a $1250 bribe to Revenue Agent Lawrence Ostrow and Mr. Ha-rary said “Yes” and then Mr. Harary was asked who was instrumental in pushing this bribe and Mr. Harary stated that the Sutton Brothers were behind it and they had asked Mr. Harary * * * to close the deal and then he was asked why was the bribe paid and Mr. Harary stated that he was giving the Sutton Brothers a blow-by-blow description of what the Revenue Agent was doing during the examination and when the Revenue Agent told Mr. Harary that there could be a possible tax assessment of $60,000, he had communicated this fact to the Suttons and Mr. Harary said, since people don’t like trouble and if the agent looks long enough he is going to find something wrong, they had decided to pay him.
There is no doubt that the proofs would have supported a verdict of guilty of conspiracy to bribe as charged in Count 1, and a verdict of guilty of bribery as charged in Count 2. They could only have done this after rejecting the defense of entrapment, and such a rejection was justified by Ostrow’s testimony that in the case of the offer of the free services of a prostitute and the camera, as well as in the case of the money, it was Harary who took the initiative. But counsel tells us there was no rational basis for an acquittal on the bribery count, and a finding of guilt on the gratuity count. Jurors are smarter than some people think they are. I believe the verdicts on each of the three counts were not only consistent with the proofs, but that they represent a very sensible and rational disposition of all the issues in the case.
Even if the jury believed that Harary made the statement attributed to him by Inspector Wenig, the statement was made in an obvious attempt to aid the Government in the prosecution of the Suttons. The jury was not obliged to believe that the Suttons told Harary or Ha-rary told the Suttons that if the Agent looked long enough he would find something. The word “bribe” in the first question may have been thought by Ha-rary merely to refer to the payment of the money, and not to include such a technical matter as a specific intent to cause the Agent to do an official act.
Despite the fact that the burden of the prosecutor’s summation was to persuade the jury to find Harary guilty of bribery, and the burden of defense counsel’s summation was to persuade the jury to acquit Harary because of entrapment, there were overtones that could scarcely have escaped the attention of the jury. Sometimes an argument by way of indirection is the most effective. Here, every word spoken by defense counsel in support of the defense of entrapment served also to convince the jury that the whole affair of the $199,000 item was pure stage play, and that Ha-rary knew it was pure stage play to get the money. The way Ostrow acted from the first gave Harary the impression that he was looking for a hand-out. The rejection of the letters and the deposit slips, and the perfectly ridiculous statement by Ostrow that he would have to assess a tax of $60,000 against the Sut-tons individually unless he could be shown proof tracing the funds from their origin in Syria or Lebanon into the corporate bank account, was pure unadulterated hokum. Harary must have known that Ostrow had no authority to assess such a tax or to impose such impossible conditions. At least this might *484well have been the reaction of the jury to Ostrow’s fantastic procedure as he tried so hard to lay the trap for Harary. And, if the jury reasoned in this fashion, it seems not too much to suppose it also concluded that there was nothing wrong in the tax returns of Sutton & Sutton, Ltd., and no point in bribing Ostrow to do anything. On this theory, there was ample basis for a finding that the prosecution had not established, to the jury’s satisfaction, that the money was paid with the specific intent to influence an official act by Ostrow. On this same theory, a verdict of not guilty on the conspiracy count was also rationally justified. It must be recalled that while the word “gratuity” appears in the conspiracy count, the allegation is solely of a conspiracy to bribe with the specific intent above referred to; and this is the interpretation of the conspiracy count adopted by the trial judge in his instructions to the jury.
Another equally rational basis for the verdict of acquittal on the bribery count is that the jury may have concluded that, whatever may have been the intent of the Suttons, whose case had been severed prior to the trial, the specific purpose and intent of Harary was not to induce the Revenue Agent to do any official act but rather to get the $750 he put in his own pocket.
It was the jury’s function to decide whether the Government had proved, to its satisfaction beyond a reasonable doubt, that Harary, at the time he paid the $1250, entertained the specific intent to corruptly influence Ostrow to do an official act. As the trial judge instructed the jury:
It is obviously impossible to ascertain or prove directly what a man knew or intended. You cannot look into a person’s mind and see what his intentions were or what he knew. But a careful and intelligent consideration of the facts and circumstances shown by the evidence in any given case as to a person’s actions and statements enables us to infer with a reasonable degree of certainty and accuracy what his intentions were in doing or not doing certain things and the state of his knowledge.
I find nothing in the record to indicate that the jury, at any time, concerned itself with any compromise or with the subject of the punishment to be meted out to Harary.
The jury was instructed to decide the bribery count first, and told that it could not turn to the lesser-included charge of gratuity until it had decided guilty or not guilty on the bribery count. And so, just before bringing in its verdict, the jury asked that the instructions on the subject of the gratuity count be read to it, and this was done. On the state of this record the verdict of guilty on the gratuity count was inevitable.
I think justice has been done in this case and respectfully dissent from the reversal of the judgment of conviction.