Court Opinion

ID: 6913114
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:31:08.527709+00
Date Added: 2024-06-11T16:06:34.365642
License: Public Domain

FRANK, Circuit. Judge Dissenting
as to the petitions for rehearing as to all the defendants:
When we uttered our original opinion, I dissented (for reasons I then stated) solely as to the defendant Halperin. The rehearing petitions, however, have led me to reconsider our decision with regard to the statute of limitations. I now think that because of a serious error in the trial judge’s charge on that issue— printed in the Appendix to this opinion —we should order a new trial for all the defendants.
1. When I concurred in affirmance of the conviction of the defendants other than Halperin, I understood we were-holding that the three year statute barred conviction unless, after October-25, 1951 (i.e., three years before the date-of indictment), one or more of the defendants committed an overt act for (a) the purpose of preventing criminal prosecution of the taxpayers for tax evasion, as distinguished from (b) the purpose of preventing prosecution of the conspirators for conspiracy.
For the opinion, in discussing the statute of limitations, made that nice distinction as follows: “What the fixers had to sell was freedom from criminal prosecution for tax frauds. What the taxpayers bargained for was protection from a. tax evasion prosecution. * * * This, conspiracy is wholly unlike the ordinary-illegal scheme in that the jury may well have inferred that the official announcement that there would be no criminal, prosecution of the taxpayers was merely-the delivery of a substantial installment, of what appellants agreed to deliver for-the huge sums paid. The six-year Statute of Limitations, 26 U.S.C. (1940 Ed.) § 3748, did not run in favor of the taxpayers until some time after the commission of the overt acts relied upon. In the-interval there was no assurance, other-than continuing efforts by Grünewald,. Bolich and the others, that the whole nefarious business might not be brought to» light, followed by the revocation of the-decision not to criminally prosecute the-taxpayers. This is a significant element, in the proofs adduced by the government,, as concealment of the conspiratorial acts'was necessary not only to protect the-conspirators from a conspiracy prosecution but also to protect the taxpayers, from a tax evasion prosecution.”
Certain overt acts, intended to conceal! facts from the King Committee, occurred, in 1951, but more than three years prior to the indictment date.1 There was,, *593however, evidence of other overt acts occurring after October 1951.2 Properly instructed by the trial judge, the jury could reasonably have inferred that these acts were done, at least in part, to prevent the taxpayers’ prosecution for tax evasion; but that inference was not irresistible.
2. The trouble is that the charge, in failing to distinguish between
(1) acts of concealment intended (at least in part) to block prosecution of the taxpayers for tax evasion, and
(2) acts of concealment intended solely to block prosecution of the conspirators for conspiracy,
made it unnecessary for the jury, in order to convict the defendants, to find that “the official announcement that there should be no criminal prosecution of the taxpayers was merely a substantial installment of what appellants agreed to deliver for the huge sums paid.”
3. All would have been well if, in addition to what the judge told the jury, the charge had contained something like the following:
“If you find that the objective of the conspiracy was achieved when, in January 1949, there was obtained the assurance of immunity of the taxpayers from prosecution for tax evasion, then you must acquit the defendants, unless you find that, before that date, the conspiracy included an actual agreement—not merely an implied one—to conceal the conspiracy after that date. This is so, *594because then the three year statute of limitations, as to the conspiracy had run in January 1952, before the indictment of the defendants.
“However, the six year statute of limitations, against prosecution of the taxpayers for tax evasion, did not run until December 31,1952. If, then, you find that an objective of the conspiracy was to prevent prosecution of the taxpayers for tax evasion, then the three year statute of limitations, against prosecution of the defendants for conspiracy had not run in January 1952, provided you find any overt act, by any conspirator, between October 25, 1951 and December 31, 1952, committed for the purpose, at least in part, of preventing the prosecution of the taxpayers for tax evasion; but even if you find that an objective of the conspiracy was to prevent such prosecution for tax evasion, nevertheless, if you find that all such overt acts were done solely to prevent the prosecution of the conspirators, or any of them, for conspiracy, then you must acquit the defendants, unless you find that, before December 31, 1952, the scope of the conspiracy was enlarged to include such concealment of the conspiracy.”
Under the charge as given, however, it was not essential that an objective of the original conspiracy was to prevent prosecution of the taxpayers for tax evasion until the six year statute of limitations had run against such prosecution, but it sufficed under the charge if the jury found (1) that the conspiracy included an implied agreement or understanding to conceal the conspiracy for any purpose, plus (2) an overt act of concealment committed by any of the defendants at any time—even an overt attempt by one of the defendants to save himself from prosecution.
True, the trial judge charged that such an agreement or understanding to conceal could not be “implied” or be an “afterthought.” But a distinction must be made between (1) an agreement to conceal an ordinary conspiracy, implied in the mere existence of that conspiracy, and (2) such an agreement to conceal which is reasonably inferred from other acts. As I shall try to show below, overt acts of concealment, without more, cannot suffice to prove that an ordinary conspiracy included an agreement to conceal.3 And here if—as the jury may well have found—the conspiracy ended in 1949 (when Bolich promised the taxpayers immunity from tax evasion prosecution if they confessed and when they then confessed), the record contains no evidence, other than overt acts of concealment, reasonably warranting an inference of an agreement to conceal as part of the conspiracy. Therefore, any such agreement could only have been implied from the mere existence of the conspiracy itself; and any jury is very likely to conclude that when men enter into an illegal agreement, for which they can be prosecuted, they implicitly understand, as part of that agreement, that they will do those acts necessary to conceal their crime from the prosecuting authorities. If the charge here is sustained, then the statute of limitations in conspiracy cases could be suspended indefinitely by an act of concealment by any of the conspirators at any time, so long as the jury found that the mere existence of a conspiracy implied an agreement to conceal it.
4. This will not do, in the light of Krulewitch v. United States, 336 U.S. 440, 444, 69 S.Ct. 716, 718, 93 L.Ed. 790. There the Supreme Court held that, after the objective of a conspiracy had been achieved, the duration of that conspiracy could not be extended by the device of finding an implied subsidiary conspiracy “aimed at preventing detection and punishment.” In the case at bar, the government concedes in its brief that the action of the defendants had estopped the United States from prosecuting the taxpayers for tax evasion after their confessions had been secured in January *5951949—pursuant to the promise of immunity secured for them by Bolich—unless the illegal or fraudulent methods by which this promise had been obtained came to light before the six year statute had run against such prosecution. Now the jury might reasonably have found that the conspiracy was limited to creating such an estoppel in 1949, and that it did not include a continuing conspiracy to protect the taxpayers from a tax evasion prosecution throughout the six year period. Had the jury so found, it would have had to find that the conspiracy terminated in January, 1949. By allowing the jury to find a continuation of the conspiracy, even if its purpose was thus limited, provided only there was an implied agreement or understanding among the conspirators to conceal the conspiracy, the charge, I believe, runs afoul of Krulewitch. I think the Supreme Court’s decision in Krulewitch may not be avoided by the device of instructing the jury that the conspiracy is continued by any act of concealment by any conspirator at any time, if only the jury finds, as part of the original conspiracy, an agreement among the conspirators, implied in the mere existence of the conspiracy, to conceal their crime from the government, even after the purpose of the conspiracy had been attained. For one of the reasons underlying the Krulewitch decision was the fear that the conspiracy doctrine could be used to postpone indefinitely the operation of the statute of limitations. See the opinion of Jackson, J. (dissenting on another point) in Lutwak v. United States, 1953, 344 U.S. 604, 622, 73 S.Ct. 481, 97 L.Ed. 593.
To be sure, in Lutwak, the Court said, not only that acts of concealment occurring after the conspiracy ended might be relevant to prove the conspiracy, but also added, in a dictum, that there might be a conspiracy which included an agreement among the conspirators to conceal the existence of the conspiracy. But this is very far from saying that overt acts of concealment, without more, suffice to prove that a conspiracy included an implied agreement to conceal the conspiracy. I think the Supreme Court did not intend, by its dictum in Lutwak, to permit its Krulewitch ruling to be circumvented by proof merely that a conspirator committed an overt act of attempted concealment in order to prevent disclosure of the conspiracy.4 In the instant case—-absent a finding that the purpose of the conspiracy was to prevent a tax evasion prosecution of the taxpayers -—there was no evidence, except the overt acts of attempted concealment, that the conspiracy originally included an agreement to conceal the conspiracy; and I repeat, the charge did not require the jury, as essential to a conviction of the defendants to find that the conspiracy’s purpose was prevention of a tax evasion prosecution.
In Lutwak, the Supreme Court observed, 344 U.S. at pages 616-617, 73 S.Ct. at pages 488, 489, that the indictment alleged concealment as part of the conspiracy, and that there was evidence that one of the defendants had made a statement indicating a purpose to conceal the conspiracy. Nevertheless, since the conspiracy’s purpose had clearly been achieved before the utterance of that statement, the Court did not allow this factor to extend the duration of the conspiracy on the theory that it continued for the purpose of concealment. In Lutwak the indictment did not allege any overt act of concealment; but that seems to me an irrelevant consideration. And see Fiswick v. United States, 329 U.S. 211, 216, 67 S.Ct. 224, 227, 91 L.Ed. 196: “Though the result of a conspiracy may be continuing, the conspiracy does not thereby become a continuing one. See United States v. Irvine [98 U.S. 450, 25 L.Ed. 193]. Continuity of action to produce the unlawful result, or as stated in United States v. Kissel, supra [218 U.S. 601, 607, 31 S.Ct. 124, 54 L.Ed. 1168], ‘continuous co-operation of the conspirators to keep it up’ is necessary.”
*5965. As noted above, under the charge in the instant case, the jury may well have found—and, for all we know, did find—that the conspiracy ended in 1949,5 since the jury may have found that it was not a purpose of the conspiracy to prevent prosecution of the taxpayers for tax evasion after that date. It is perhaps arguable that, even if the jury found the conspiracy ended in 1949, nevertheless the evidence justified an inference by the jury that, after the end of the conspiracy in 1949, the defendants, in meetings they held, overtly agreed to conceal the conspiracy,6 and, subsequent to October 1951, committed overt acts pursuant to that post-1949 agreement. Even so, such an overt agreement to conceal, made after 1949, could not reasonably serve to prove that the conspiracy, if it otherwise ended in 1949, had, before 1949, included an agreement—other than by implication from the mere existence of the conspiracy—to conceal the conspiracy after' 1949. It could serve, at most, to prove a new conspiracy to conceal an older conspiracy. In that event (although such a new conspiracy would be evidence ;of the older conspiracy) the defendants could not, on such evidence, be convicted of the older conspiracy which ended in 1949, since the statute of limitations would have run against the older three years after 1949. See United States v. Siebricht, 2 Cir., 59 F.2d 976, 978, to the effect that an old conspiracy "could not be revived by the breath of a new and different conspiracy * * *” The defendants were not indicted for such a new conspiracy, and the judge’s charge precluded a conviction based thereon.7 See, e. g., United States v. Siebricht, supra.
It follows that, if. (1) the jury found —as it may have—that the conspiracy ended in 1949, it could not also reasonably have found (2) that the conspiracy included any understanding to conceal the conspiracy (in order to avoid detection and punishment for conspiracy) other than such an understanding implied in the mere fact of the conspiracy. The second of those findings would be bad, under Krulewitch. But the charge permitted the jury to render a verdict of guilty based on both such findings. I think the language in Lutwak cannot be stretched to sanction such a charge, and that therefore the charge was erroneous.
6. No matter how guilty the defendants may have been, they could not be convicted validly, if the statute had run against their crime before the indictment. Consequently, the harmless error doctrine (assuming, arguendo, it would otherwise apply) cannot insulate the conviction from the judge’s error in his charge, and the defendants, I think, should be granted a new trial.
APPENDIX
The judge’s charge, as to the statute of limitations, reads as follows:
“You will recall that the indictment states, among other things, that it was part of the conspiracy that the defendants and co-conspirators would make continuing efforts to avoid detection and .prosecution by any governmental body, .executive, legislative, and judicial, of tax frauds perpetrated by the defendants .and co-conspirators through the use of .any means whatsoever including but not limited to * * * the influencing, intimidating, and impeding of prospective witnesses to refrain from disclosing the true facts.
“In other words, the indictment alleges that the conspiracy comprehended within it a conspiracy to conceal the true Tacts from investigation, should investigation thereafter eventuate. This is an *597important element of the first count of the indictment which you must take into consideration, inasmuch as the Statute of Limitations on the charge of criminal conspiracy is three years and unless the conspiracy was continuing to a period within three years prior to the date of the indictment, October 25, 1954, and some overt act was performed within that three-year period, the crime, if any alleged in the first count of the indictment would be outlawed. It is the contention of the government that the conspiracy did not end when the taxpayers were advised that there would be no criminal prosecution recommended by the Special Agent’s office, but that an integral part of the entire conspiracy was an agreement to conceal the acts of the conspirators and that when thereafter an investigation was started by Congress and by the Grand Jury in the Eastern District of New York, the conspirators performed overt acts in pursuance of the original conspiracy designed to conceal the true facts; and that these acts occurred within three years prior to the date of the indictment. On this issue, it will be necessary for you to determine whether, beyond a reasonable doubt, you can conclude that the conspiracy was of the nature described in the first count of the indictment and comprehended an agreement to conceal and whether some overt act took place in the period of three years prior to October 25, 1954 to carry out such purpose of the conspiracy * *.
“Were these overt acts in pursuance of the conspiracy? An overt act is defined, as a matter of law, as any act done to effect the object of the conspiracy. To be an overt act, it must be in furtherance of the object of the conspiracy, although standing by itself, it need not be a criminal act. The Statute of Limitations does not begin to run on a conspiracy indictment until after the last overt act done by a co-conspirator to carry out an objective of a continuing conspiracy.
“To determine whether certain of the alleged overt acts were in furtherance of the object of the conspiracy, you have to determine the duration of the conspiracy. Did it end when the Pattullo Modes people and the Gotham Beef people received an assurance of no prosecution from the Bureau of Internal Revenue, or was a part of the conspiracy a continuing agreement to conceal the acts done pursuant thereto? In determining whether a part of the conspiracy was an agreement to continue to conceal the illegal acts after their consummation, you may not imply that such an agreement was part of the conspiracy. You would have to find from the evidence of the acts and declarations of the co-conspirators that there was an understanding or agreement to conceal the conspiracy. If you find that such an agreement or understanding to conceal the conspiracy was not a part of the conspiracy to defraud the government, but no more than an afterthought brought to the surface when the co-conspirators were confronted with the Grand Jury and King Committee investigations, then you must find, as a matter of law, that the defendants are not guilty of the crime charged in the first count of the indictment. If you find that the evidence shows, beyond a reasonable doubt, that as a part of the conspiracy to defraud the government, there was an agreement or understanding to conceal the illegal acts and that this too was an objective or part of the conspiracy, then you may find that such understanding was a part of the conspiracy. However, you must additionally determine whether this objective of the conspiracy was known to the defendants. If this objective was known originally by only part of the conspirators but thereafter during the existence of the conspiracy, the scope of the conspiracy was extended so as to include such an agreement to conceal, and if you find that some of the defendants did not know of the expansion to include the agreement to conceal, you may not impute to them the knowledge of their co-conspirators and they could not be found guilty of the crime charged in Count one.
“Now, therefore, as to the defendants Halperin, Grünewald, and Bolich, you have the questions of fact, first, as to *598whether they became parties to a conspiracy to defraud the United States, and that part of this conspiracy was to make continuing efforts to avoid detection and prosecution by any governmental body; second, whether they knew the general objectives of the conspiracy; and third, whether any one of the conspirators took any overt act within three years prior to October 25, 1954 to accomplish the result of that conspiracy. If you can answer these questions all in the affirmative, beyond a reasonable doubt, then you. would be justified in returning a verdict of guilty on the first count of the indictment as against eaeh one of these three defendants. If you cannot find that you can answer these questions in the affirmative, beyond a reasonable doubt, as to these three defendants, then as to the one concerning whom you cannot so answer it, you should return a verdict of not guilty.”

. E.g., in the summer of 1951, Davis and Halperin called in Marx and Mrs. Segel, the Pattullo taxpayers, and told them not, to talk to anyone about the ease.

. Testimony at the trial revealed the following acts which might be said to have been done with the purpose of concealment:
(a) In the summer of 1950, Bolich borrowed the records of his occupancy for the entire year from the Washington Hotel. In December 1951, when the King Committee subpoenaed these records, the hotel management asked Bolich to return them. He denied receiving them.
(b) Sometime after the Grand Jury was empaneled in February 1952, inquiries were made by a revenue agent concerning a $500 check made out to Deutsch by Smith. Schopick induced Smith to lie and say that the check was a loan made to Deutsch by his brother-in-law, Hoffman.
(c) In late 1951 or early 1952, Davis and Halperin saw Tobias to reassure him that no one had talked about the Gotham case and that if everyone was silent, the whole thing would blow over.
(d) In May, 1952, Nancy Hain, Grunewald’s private secretary, was subpoenaed by the Grand Jury. Grünewald immediately phoned her and offered to furnish her money for a trip to New York, which he did. He advised that she need not tell the Grand Jury anything about his personal business and that she should say that she didn’t remember.
(e) In March 1952, Halperin, Davis, Schopick and Hoffman met and decided that the Pattullo taxpayers should be persuaded to continue withholding information from the investigators. Davis met with Marx and was told by him that the Pattullo people had decided to cooperate with the Government. Davis said to Marx that he “ * * * would be crazy to talk,” and implored him “ * * * Morton, are you going to turn me in?” Davis also saw Mrs. Segel and urged her to lie before the Grand Jury.
(f) Halperin and Davis saw Tobias again in February, 1952 and told him that the Pattullo investigation was being continued and that if anyone came to speak with him or Berman, they should be referred to Davis as Berman’s attorney. Halperin said that he had done Berman a good turn in handling his tax case and did not want Berman to hurt Halperin by now talking in connection with the tax case.
(g) In March 1952, Davis saw Tobias again and advised him that the Pattullo people had gone to the Grand Jury and told them that he and Halperin had handled the tax case. He was afraid that the Gotham case would also be investigated and he asked Berman and Tobias not to say anything.
Some of these acts—e.g., (e) and perhaps (f) and (g)—were motivated solely by defendants’ concern for themselves, rather than by a desire to protect the taxpayers. And, although the jury could reasonably find that the other acts, or some of them, were done, at least in part, to prevent the taxpayers’ prosecution for tax evasion, such a finding was not inevitably compelled by the evidence: The jury could reasonably have found the sole purpose of these acts was to protect defendants. They were entitled to a charge which stated the issue clearly and precisely.

,. See point 4, infra.

. In Lutwak the Court’s dictum did not relate to the statute of limitations but to the admissibility of evidence.

. For the jury may well have found that the conspiracy’s purpose had been accomplished in 1949 when,, pursuant to Bolich’s promise, the taxpayers confessed.

. I refer to evidence that, after 1949, the defendants, or some of them, met and planned to prevent the taxpayers from ' revealing the truth.

. He charged that the jury could consider wllether “the scope .of the conspiracy was' extended” to include an agreement to :.i conceal, if this extension occurred “dur-.: ing the existence of the conspiracy.”