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United States v. Moran


decided: August 15, 1956.


Author: Hincks

Before CLARK, Chief Judge, and HINCKS and WATERMAN, Circuit Judges.

HINCKS, Circuit Judge.

This is an appeal from a judgment of conviction in the Eastern District of New York, on three counts of federal income tax evasion for the calendar years 1948, 1949, and 1950, in violation of § 145(b), I.R.C. of 1939, 26 U.S.C. § 145(b). The defendant was sentenced to imprisonment for a term of two years on each count, to run concurrently, and to a fine of $7500 on each count.

The evidence showed that the defendant was a First Deputy Fire Commissioner of New York City who received and failed to report a portion of extortion payments collected by members of the Division of Combustibles from contractors who needed permits for installing oil burners. An extensive review of the evidence is not necessary since there is no claim that the evidence was insufficient to support proof of the corpus delicti . The defendant assigns error for denial of his pre-trial motion for change of venue under Rule 21(a), Federal Rules of Criminal Procedure 18 U.S.C.A; for the court's charge that extortion receipts are taxable income; for failure of proof on the issue of willfulness; and for improper sentencing under the felony provisions of § 145(b), I.R.C. of 1939, rather than under the overlapping misdemeanor provisions of § 3616(a), I.R.C. of 1939, 26 U.S.C. § 3616(a).We will consider these contentions seriatim.

1. At the time of trial in this case (June 1955), the defendant was already serving a 121/2 to 25 year New York State sentence for extortion and conspiracy to extort, and was under an additional 5 year federal sentence for perjury arising out of the Kefauver crime investigation. From the end of 1950 until after the close of the trial the defendant was continually exposed to unfavorable newspaper publicity. In the months immediately preceding the trial the publicity was especially inflammatory. On April 18, 1955, the defendant moved for a change of venue under Rule 21(a). This motion was denied in an unreported opinion by Rayfiel, J., on May 4, 1955. On impaneling the jury on June 13, 1955 only two jurors were excused for cause (one at the Government's request), and the defendant exercised only eight of his ten peremptory challenges.

We think the publicity in this case was more inflammatory than that in the cases cited by the Government, United States v. Moran, 2 Cir., 194 F.2d 623, certiorari denied 343 U.S. 965, 72 S. Ct. 1058, 96 L. Ed. 1362; Bianchi v. United States, 8 Cir., 219 F.2d 182, 191, certiorari denied 349 U.S. 915, 75 S. Ct. 604, 99 L. Ed. 1249; and Dennis v. United States, 84 U.S.App.D.C. 31, 171 F.2d 986, 992, affirmed 339 U.S. 162, 70 S. Ct. 519, 94 L. Ed. 734. Nevertheless, the background of the trial here differed materially from that in Shepherd v. Florida, 341 U.S. 50, 71 S. Ct. 549, 95 L. Ed. 740, and United States v. Florio, D.C.S.D.N.Y., 13 F.R.D. 296 - cases relied on by the defendant in which it was held that changes of venue should be granted. Rule 21(a) of the Federal Rules of Criminal Procedure provides that the trial court shall transfer the proceeding to another district if it is satisfied that the prejudice in its district is so great that the defendant cannot there obtain a fair and impartial trial. In determining whether unfavorable publicity renders a fair trial impossible the court necessarily exercises a wide discretion which should be overturned only upon a clear showing of abuse. Here, especially in view of the lack of difficulty in impaneling a jury satisfactory to the defendant, we cannot say that the discretion was improperly exercised.

2. The extortion receipts were clearly taxable. Rutkin v. United States, 343 U.S. 130, 72 S. Ct. 571, 96 L. Ed. 833. See United States v. Bruswitz, 2 Cir., 218 F.2d 59, certiorari denied 349 U.S. 913, 75 S. Ct. 600, 99 L. Ed. 1247.

3. There was sufficient evidence of willfulness in "a consistent pattern of underreporting large amounts of income." See Holland v. United States, 349 U.S. 121, 75 S. Ct. 127, 99 L. Ed. 150. It is asserted in defendant's brief on appeal that the defendant might have relied in good faith during the indictment years (prior to the opinion in Rutkin, supra) on the applicability of C.I.R. v. Wilcox, 327 U.S. 404, 66 S. Ct. 546, 90 L. Ed. 752 (holding embezzled funds non-taxable) to extorted funds, and therefore did not willfully evade his income taxes. As to this, it is enough to say that there was no evidence that the defendant had actually relied on the Wilcox case. The evidence was sufficient to support the finding of willfulness which was implicit in the verdict.

4. The defendant also claims that he was improperly sentenced under 26 U.S.C. § 145(b), under which the indictment was drawn, rather than under 26 U.S.C. § 3616(a). This issue is raised by the defendant for the first time on appeal as a result of the recent Supreme Court decision in Berra v. United States, 351 U.S. 131, 76 S. Ct. 685. That we may consider the question so raised is settled by United States v. Chiarella, 2 Cir., 184 F.2d 903, 911; Rule 52(b), Federal Rules of Criminal Procedure.

The indictment charged the defendant in three counts with willful and knowing attempts to evade and defeat a large part of his income tax due by filing false and fraudulent returns with the Collector of Internal Revenue. It is clear that both the indictment and the proofs introduced at the trial were sufficient to support convictions under either § 145(b)*fn1 or § 3616(a).*fn2 The former is a felony and contains a maximum five year penalty. The latter is a misdemeanor with a maximum one year penalty. Both parties agree that where a general and a specific statute cover the same offense the specific statute controls.*fn3 The defendant contends that, since § 145(b) deals with "any manner" of evasion, whereas § 3616(a) concerns only the filing of a false return, the latter is more specific. The Government argues that, since § 145(b) deals solely with evasion of the income tax, whereas § 3616(a) deals with disclosure of false information under any chapter of the Internal Revenue Code, the former is more specific.

In this case, as in Berra, there are facts falling within an area defined by the overlapping ambits of these two sections. Nevertheless, each section requires an element of proof not required by the other.*fn4 This situation is directly controlled by United States v. Beacon Brass Co., 344 U.S. 43, 73 S. Ct. 77, 97 L. Ed. 61, wherein it was held that where two statutes, each of which proscribe some conduct not covered by the other, overlap, a single act or transaction may violate both, at least where some different proof is required for each offense. United States v. Gilliland, 312 U.S. 86, 61 S. Ct. 518, 85 L. Ed. 598; United States v. Lange, D.C.S.D.N.Y., 128 F.Supp. 797.

We need not now decide whether prosecution under one overlapping statute constitutes an election effective to bar prosecution under the other. It is sufficient for present purposes that the defendant was properly convicted and sentenced under § 145(b) of the Internal Revenue Code of 1939.

Affirmed. the issue outlined, appearing in the petition for habeas corpus of May 8, 1956, was "no new ground not heretofore presented and determined." Our search of the record does not disclose that it has heretofore been specifically presented to and passed upon by the federal court.

But it is clear that it does not present any grounds for the exercise of federal jurisdiction in habeas corpus. The petitioner is imprisoned under state authority, and the unlawfulness of his detention, now asserted by him, is rested entirely on the alleged illegality of the 43rd Iowa Legislative Assembly and consequent invalidity of its enactments. Petitioner exhausted all state remedies based on that claim, as required by 28 U.S.C.A. § 2254, by submitting petitions which set it forth to the highest court in Iowa and that court denied it without opinion.

But there is no showing or reason to believe that the Iowa Supreme Court based that denial upon any federal ground, rather than upon the readily available state ground obviously open to it. The only alleged defect in the organization of the 43rd Iowa Legislative Assembly, claimed to render its enactments void, was the failure of the Iowa legislature to carry out the designated mandates of the state constitution. But those mandates are directed to the legislature and not to the courts. Their language is that "The General Assembly shall pass laws" and "The General Assembly shall fix the ratio of representation" and it is elemental that such constitutional directions to the legislature are not self-executing. As stated in 16 C.J.S., Constitutional Law;

"Constitutional provisions are not self-executing * * * if the language of the constitution is directed to the legislature." § 48, p. 145.

"Although the legislature is bound or concluded by mandatory provisions of a constitution, and it is under an obligation to perform the duties and discharge the functions imposed on it by the constitution in accordance with its mandate, if the legislature fails to do so, and neglects or refuses to pass legislation as required by a mandatory constitutional provision, there is no remedy which can be invoked to compel performance." § 65, pp. 177, 178.

"A constitutional provision which is not self-executing remains inoperative until rendered effective by supplemental legislation." § 48, p. 146.

"Clauses in a constitution which are not self-executing, but which direct legislation to carry them into effect, have at most no more than moral force, even when mandatory in terms; and there is no remedy if the legislature fails to act in accordance with the directions of a mandatory provision." § 48, p. 146.

Many cases are cited in support of these texts. As to Iowa, the last citation is to Pierce v. Green, 229 Iowa 22, 294 N.W. 237, 243, 131 A.L.R. 335, where the court said:

"The provisions of the State Constitution, above noted, are not self-executing, but require legislative action to make them effective."

It is true the Iowa Supreme Court did not state the grounds on which it declined to hold the 43rd Iowa Legislative Assembly to be an illegal body or its acts to be void. But, where no federal ground is in any wise indicated as the basis of the state court's action and sufficient grounds afforded by state law are obvious, there can be no occasion or justification for federal interposition.

It is settled by the Supreme Court in Durley v. Mayo, 351 U.S. 277, 76 S. Ct. 806, that before an application for habeas corpus presented by a state prisoner may be entertained by a federal court, the prisoner must not only have exhausted state remedies, but it must appear that a federal issue relied on has been presented to and passed upon adversely to petitioner by the highest court of the state.

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