Court Opinion

ID: 9469488
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:41:43.652928+00
Date Added: 2024-06-11T17:41:24.676271
License: Public Domain

GARWOOD, Circuit Judge,
concurring in part and dissenting in part.
I concur in the dismissal of the Hajecates’ cross-appeal, and join in all of the majority opinion related thereto.
I likewise agree with the majority’s holdings as to counts six through eleven and join in so much of the opinion as deals with those counts.
However, the majority, having held counts six through eleven valid in part and invalid in part, nevertheless holds the related portions (the second and fourth sets of object offenses) of the conspiracy count (count one) entirely valid. I respectfully dissent from this holding. I would hold these object offense allegations invalid to the extent they seek to charge that the violations of 31 U.S.C. §§ 1101 and 1121 were “in furtherance of the commission of violations of” 18 U.S.C. §§ 371 and 1001.
The “in furtherance” allegations are obviously designed to convert these object offenses from a 31 U.S.C. § 1058 misdemean- or into a section 1059(1) felony. Although count one expressly incorporates the remaining counts, nowhere in the entire indictment is the conduct allegedly constituting the “in furtherance” offenses identified in even the most general way. Neither on brief nor on argument does the government favor us with any such identification. The majority suggests that the conduct constituting the “in furtherance” offenses is concealment of the foreign bank account from the Customs Service. So far as I am aware, the only obligations to disclose such accounts are those imposed under section 1121, or at least under other sections of the 1970 Bank Secrecy Act, Pub.L.91-508, of which sections 1058, 1059, 1101, and 1121 are a part. Accordingly, such an offense *903would not be an “other violation of Federal law” as required by section 1059(1). Nor does dragging the same conduct in through the back door by labeling it a violation of 18 U.S.C. §§ 371 and 1001 enhance the government’s position in this regard. So far as I am aware, the offense of conspiring to commit a conspiracy is unknown to the federal criminal law. Moreover, “defrauding” the government with respect to performance of its functions under the Bank Secrecy Act, or concealing (or conspiring to conceal) something within the jurisdiction of the Treasury Department under such Act, cannot properly constitute an “enhancing” offense under section 1059(1). The contrast between subsections (1) and (2) of section 1059 makes it plain that the former applies only to “activity not involving violations of the Bank Secrecy Act.” See United States v. Beusch, 596 F.2d 871, 878 (9th Cir. 1979). Accordingly, I would hold the second and fourth sets of object offenses under count one valid to the extent of charging section 1058 misdemeanor violations of sections 1101 and 1121, and invalid to the extent of charging section 1059(1) felonies.
The majority upholds the validity of the first object offense of the conspiracy count, defrauding the United States by impeding the Internal Revenue Service in the “assessment, and collection of income taxes.” I respectfully disagree and would hold this portion of count one invalid as being excessively vague and general by reason of its failure to give any indication of whose income taxes are involved. Although the remaining counts charge the substantive violations which form the second and subsequent sets of object offenses in the conspiracy count, and are expressly incorporated in it, none of the remaining counts supports the first object offense in count one. The government in its brief on appeal took the position that the relevant taxes are those of Tom and Mick Hajecate, and the majority adopts this construction of the indictment. However, in its bill of particulars the government took the position that this portion of count one also related to the income taxes of Uni Oil, Inc., Hajecate Oil and Gas, Inc., MAPCO, and H. C. Iran, Ltd. On oral argument government counsel, when questioned about this discrepancy, disavowed the position taken in the brief, and said the bill of particulars was correct, except that the count did not relate to MAPCO’s income taxes.
As reproduced (and apparently slightly reduced in size) in the government’s brief, count one is approximately nine and a half pages in length, and is extremely complex and confusing. While certainly it should be read as a whole, nevertheless, when so read it fails to state, or even clearly infer, whose income taxes are involved. One of the means alleged to effectuate the conspiracy is “engaging in a ‘silver straddle’ in June 1977 in order to create an apparent paper loss to offset the profits of MAPCO” (emphasis added) in the event the government discovered the Hajecates’ interest in and control over MAPCO’s secret bank account. This suggests a concealment of MAPCO income; yet, the government has twice told us, and the majority agrees, that MAPCO’s taxes are not involved. Another alleged means of the conspiracy was a sham bank loan to Hajecate Oil and Gas, Inc. and Tom and Mick Hajecate, which suggests that the former’s taxes may be included. However, the government’s intermediate position, with which the majority agrees, is that such corporation’s taxes are not in issue.
The conspiracy alleged in the indictment covers a three-year period, and it seems to me to be vital for double jeopardy purposes to know whose taxes the indictment charges that defendants conspired to defraud the government of. If, for example, the indictment does not charge a conspiracy during that time to defraud the government of MAPCO’s or Uni Oil’s taxes, does it protect defendants against a subsequent charge for such offense? The government has taken three different positions regarding the meaning of the indictment in this connection, and on each occasion the government’s action appears to have been deliberate and considered and taken in full awareness of its significance. Under the circumstances, count one fails to adequately identify the first object offense of the con*904spiracy. Accordingly, I would hold this portion of count one invalid.
The majority holds counts two, three, four, and five invalid under the “exculpatory no” doctrine. The offenses charged in these counts also constitute the third set of object offenses under count one, and the majority, for the same reason, also holds this portion of count one invalid. I respectfully disagree with these holdings, as I would not extend the “exculpatory no” doctrine to answering this or similar questions on income tax returns. I fully agree with the majority that the question is investigatory and has nothing to do with the calculation or determination of income taxes. Nevertheless, the question appears on virtually all tax returns, and. is not directed at any selected group or groups thought more likely than others to include those engaging in illegal activities. Moreover, while the question is asked for an investigatory purpose, the manner and setting in which the question is both asked and answered is distinctly not investigatory, intimidating, or confrontational. The respondent is free to take his or her time and to consult legal or tax advisors, all without any knowledge on the part of thé government, before answering (or declining to answer), and of course the answer need not be given in person. The “exculpatory no” doctrine is a judicially created exception to the statutory law, and I do not think it should be extended so as to exculpate, under these circumstances, the making of a deliberately false statement on such an official document filed with the government.
One matter remains to be considered respecting counts two through five and the related portion of the conspiracy count. The defendants maintain that these offenses should have been charged under 26 U.S.C. § 7206, which denounces the willful making of a tax return known to contain a false statement as to a material matter. As defendants correctly point out, this section of the Internal Revenue Code of 1954 was enacted subsequently to 18 U.S.C. § 1001, the latest version of which was enacted in 1948. Section 7206 forms a part of chapter 75 of the 1954 Code which was designed to incorporate in one place the previously scattered criminal provisions dealing with violations of the Internal Revenue Code. See H.R.Rep.No.1337, 83d Cong., 2d Sess. reprinted in [1954] U.S.Code Cong. & Ad. News 4017, 4135, 4573. In the Internal Revenue Code Congress has provided a carefully graduated scheme of criminal penalties. For example, willful tax evasion is punishable by imprisonment of up to five years, 26 U.S.C. § 7201, while willfully failing to file a return or pay the tax due is punishable by imprisonment for up to only one year, 26 U.S.C. § 7203. Making an intentional misstatement of material fact on a return — regardless of any intention to evade taxes — is an offense of intermediate severity, the maximum prison term being three years, 26 U.S.C. § 7206. Significantly, the House version of section 7206 provided for a penalty of up to five years’ imprisonment and a $10,000 fine, while the Senate version, which was ultimately adopted, reduced the maximum to three years and $5,000. Compare H.R.Rep.No.1337, supra at 4573 with S.Rep.No.1622, 83d Cong., 2d Sess., reprinted in [1954] U.S.Code Cong. & Ad.News 4621, 5252 and H.R.Rep.No.2543 (Conference Rep.), 83d Cong., 2d Sess., reprinted in [1954] U.S.Code Cong. & Ad. News 5280, 5344.
Proof of a violation of 26 U.S.C. § 7206(1) necessarily encompasses all elements required to establish a violation of 18 U.S.C. § 1001 (although, of course, the converse is not true). Yet the maximum penalty for violation of section 1001 is confinement for five years and a $10,000 fine, the very penalty which Congress rejected as excessive for a violation of section, 7206, the later and more specific statute.
In these circumstances, I believe there is a substantial question as to whether section 1001 can properly be used to procure a higher penalty for what is in fact a violation of section 7206. See Busic v. United States, 446 U.S. 398, 405-07, 100 S.Ct. 1747, 1752-53, 64 L.Ed.2d 381, 388-90 (1980); Simpson v. United States, 435 U.S. 6, 15, 98 S.Ct. 909, 914, 55 L.Ed.2d 70, 78 (1978); United States v. Meacham, 626 F.2d 503, *905508 n. 6 (5th Cir. 1980); United States v. Beer, 518 F.2d 168 (5th Cir. 1975).1 One is indeed reluctant to hold that Congress simply wasted its time by reducing the maximum penalty under section 7206.
Nevertheless, I do not believe that this problem goes to the sufficiency of the indictment. Counts two through five sufficiently allege facts constituting a violation of 26 U.S.C. § 7206. Defendants do not claim otherwise — indeed they claim that an offense is alleged under section 7206.2 Under the express provisions of Rule 7(c)(3), Fed.R.Cr.P., citation of the wrong statutory provision is not grounds for dismissal of the indictment “if the error ... did not mislead the defendant to his prejudice.” Here there is no assertion that any of the defendants were prejudicially misled, nor does the record suggest such. See United States v. Welch, 656 F.2d 1039, 1059 n. 26 (5th Cir. 1981), cert. denied,-U.S.-, 102 S.Ct. 1768, 72 L.Ed.2d 173 (1982); United States v. Duncan, 598 F.2d 839, 848 n. 4, 854 n. 11 (4th Cir.), cert. denied, 444 U.S. 871, 100 S.Ct. 148, 62 L.Ed.2d 96 (1979).3
Accordingly, I would not dismiss any of counts two through five, nor that part of count one relating to these substantive counts.

. On the other hand, a similar contention favoring prosecution under the 1939 Internal Revenue Code analogue to section 7206 was rejected in Cohen v. United States, 201 F.2d 386, 392-93 (9th Cir. 1953) (note, however, that under the 1939 Code the penalty for a willfully false return was five years and a $2,000 fine, and there was no indication of a specific congressional intention to reduce the maximum sentence). In United States v. Payner, 447 U.S. 727, 100 S.Ct. 2439, 65 L.Ed.2d 468 (1980), the prosecution was under section 1001 but the question of whether it should have been under section 7206(1) was neither raised nor discussed. In United States v. Knox, 396 U.S. 77, 90 S.Ct. 363, 24 L.Ed.2d 275 (1969), it does not appear whether the wagering tax return form was such as would be required for prosecution under section 7206(1). See also United States v. Carter, 526 F.2d 1276 (5th Cir. 1976) (however, the opinion seems to view each of the statutes involved as requiring proof of some element which the other did not).

. Eisenberg is charged in counts two and three with aiding and abetting Tom and Mick Hajecate in the offenses respecting their 1977 income tax returns. Since the requisite mental state is alleged as to the Hajecates respectively, as well as to Eisenberg, Eisenberg would be chargeable under 18 U.S.C. § 2(a) for aiding and abetting the Hajecates’ violation of 26 U.S.C. § 7206(1). Clearly 18 U.S.C. § 2(a) is not in terms restricted to offenses denounced in Title 18, and there is no reason to deny its application to the offenses denounced in Title 26. See, e.g., United States v. Johnson, 319 U.S. 503 , 514-15, 63 S.Ct. 1233, 1238-39, 87 L.Ed. 1546, 1555-56 (1943). Eisenberg could alternatively be charged under 26 U.S.C. § 7206(2). The penalty in each instance would be the same.
While it is not expressly alleged that the returns were signed under penalties of perjury, it is alleged that in each instance the return signed was the “Individual Income Tax Return, Form 1040” for the respective years 1976 and 1977. These official forms, of which judicial knowledge can be taken, contain a printed declaration that the return is made under the penalties of perjury, and hence satisfy the requirement in this regard of section 7206(1).

. There is no question of a guilty plea having been taken under a misapprehension of the maximum sentence, nor, of course, has the sentencing stage been reached.