Before FRANK, HINCKS and WATERMAN, Circuit Judges.
Nine indictments and one information were consolidated for trial, and are consolidated for this appeal. In each of the first eight indictments, Jeanne Ansell, Irving Rosenblum and one of the several corporate defendants were charged in numerous counts with wilfully attempting to defeat and evade the payment of admissions taxes due the United States during the period May 1946 through March 1949 by filing false and fraudulent returns in violation of 26 U.S.C. § 1718(b).*fn1 The ninth indictment charged Ansell and the J.A. Theatre Corporation with wilfully failing to account and pay over admissions taxes due the United States, in violation of 26 U.S.C. § 1718(b). Both offenses charged under Section 1718(b) are felonies. The sole information charged Ansell and the J.A. Theatre Corporation with wilfully failing to file an admission tax return in violation of 26 U.S.C. § 1718(a),*fn2 a misdemeanor.
Defendant Ansell was the president and apparently the owner of the corporate defendants. Rosenblum was the corporations' accountant and, at various times, was the treasurer of many of them. The corporations owned the leases of several motion picture theatres in which foreign films were exhibited. Defendants concede that the monthly admissions tax returns were false. But, at the trial, Ansell and Rosenblum each sought to place the blame for the filing of the fraudulent returns on the other.
There was evidence from which the jury could reasonably find the following: Ansell owned and operated the chain of theatres whose leases were owned by the corporate defendants; daily work sheets showing the amounts of taxes due the Government were prepared; from these, monthly summaries were made up; both Ansell and Rosenblum attempted to conceal the existence of the monthly summaries from the Government agents; during part of the indictment period, the tax monies that were collected were deposited in a special bank account, but Ansell drew checks on this account for purposes other than the payment of taxes; Rosenblum had an interest in a corporation which had made loans to some of the corporate defendants; the tax returns were prepared by Rosenblum each month and signed by either him or Ansell; the J.A. Theatre Corporation never filed any return; all the filed returns substantially understated the total tax actually collected.
The jury found all the defendants guilty on all of the counts in which they were named. The trial judge fined each of the theatre corporations $500 on each count in which they were named, for a total of $106,000. The individual defendants, Ansell and Rosenblum, were each fined $100 for each count, for a total of $21,200 for Ansell and $21,000 for Rosenblum. In addition, Ansell was sentenced to a 2 year prison term on all the felony counts and to a 1 year term on each of the misdemeanor counts, sentence on all counts to run concurrently. Rosenblum received an 18 month concurrent prison sentence on each count. All the defendants appeal and present a variety of grounds for reversal.
1. All defendants raise two objections which we shall consider first.
(1) Defendants, relying on Berra v. United States, 351 U.S. 131, 76 S. Ct. 685, contend that we should remand for resentencing under 26 U.S.C. § 3616(a). They also suggest that the Berra case may require dismissal of the indictments. We reject defendants' contention for reasons stated in United States v. Moran, 2 Cir., 236 F.2d 361.
The writer of this opinion has some doubt about that reasoning. The question considered by the Supreme Court in Berra was confined to the rejected request for an instruction to the jury. The Court did not discuss Spies v. United States, 317 U.S. 492, 63 S. Ct. 364, 87 L. Ed. 418 or United States v. Beacon Brass Co., 344 U.S. 43, 73 S. Ct. 77, 97 L. Ed. 61. If those cases were pertinent, it would seem that the Court would have affirmed, merely citing those cases. There is language in Berra which can be read as holding that the coverage of the two statutes is in all respects identical, and that the question as to which statute applied was not for the jury but solely for the judge whn he came to sentencing. Berra can then perhaps be construed to mean that the judge improperly imposed the sentence for conviction of a felony. On that interpretation, we should, in the instant case, remand for resentencing under the misdemeanor statute. However, the writer is not sure enough about the above interpretation of Berra to justify his dissenting here.
(2) Defendants further contend that, even if they were properly indicted for felonies under Section 1718(b), yet the evidence was insufficient to prove a "wilful" violation under the rule of Spies v. United States, 317 U.S. 492, 63 S. Ct. 364, 368, 87 L. Ed. 418. In Spies, the defendant was indicted under a subsection of the Internal Revenue Code, similar to Section 1718(b), which made it a felony to wilfully attempt, "'in any manner'", to evade or defeat any tax. Another subsection made it a misdemeanor to wilfully fail to pay a tax or fail to make a return. Defendant was indicted for wilfully attempting to evade the income tax by failing to file a return or to pay a tax. The Supreme Court held that mere proof of a knowing failure to file a return or to pay a tax, without proof of any affirmative act of evasion on the part of the taxpayer, was insufficient to establish "wilfulness" under the felony provision. We think the Spies case is distinguishhable from the case at bar for here there was evidence from which the jury could reasonably have found beyond a reasonable doubt not only the willful and knowing filing of false returns but also that both Rosenblum and Ansell had concealed the existence of the monthly summaries of the admission taxes from the Government. Also there was evidence from which the jury could reasonably have found beyond a reasonable doubt that both Rosenblum and Ansell had concealed the existence of the monthly summaries of the admissions taxes from the Government. Rosenblum lied to a Government agent concerning these summaries, telling the agent that they did not exist. Ansell failed to reveal their existence when questioned by a Government agent concerning the method by which she obtained the figures for making up the tax returns. She stated that she obtained the figures from the employees in her office. These monthly summaries were never turned over to the Government. Consequently, many hours were spent assembling the information which the defendants had in summary form.
2. Ansell raises several additional points which we think are without merit:
We think the trial judge did not "abuse" his discretion in refusing separate trials. Rules 8(b) and 13 of the Federal Rules of Criminal Procedure, 18 U.S.C.A.; United States v. Lebron, 2 Cir., 222 F.2d 531, 535.
Ansell alleges that certain corporate checks and other records were obtained illegally by the Government, and claims the trial judge erred in denying her motion to suppress. These records were voluntarily turned over to the Government by Rosenblum, a corporate officer. As to the corporate records, we think Rosenblum had apparent and actual authority to give them to the Government and that there was no unlawful seizure. Zap v. United States, 328 U.S. 624, 66 S. Ct. 1277, 90 L. Ed. 1477; United States v. Wolrich, D.C., 119 F.Supp. 538. In any event, Ansell may not assert the constitutional rights of the corporations in her own behalf. Lagow v. United States, 2 Cir., 159 F.2d 245. As to Miss Ansell's personal checks, assuming arguendo that they were illegally obtained, we think their reception in evidence was harmless. Their use as evidence was indeed beneficial to her, since they tended to establish that she had spent personal funds for corporate purposes, thereby reimbursing the corporation for funds withdrawn by her.
The trial judge did not err in refusing Ansell's requested charge that the Government agents acting as witnesses were interested witnesses. The ...