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United States v. O'Connor

decided: December 21, 1959.


Author: Smith

Before CLARK, Chief Judge, MOORE, Circuit Judge, and SMITH, District Judge.

J. JOSEPH SMITH, District Judge.

Defendant, Raymond A. O'Connor, appeals from a judgment entered June 10, 1957 upon a jury verdict finding him guilty on all four counts of an indictment filed February 24, 1953 charging him with wilfully attempting to evade and defeat his income taxes for the years 1946, 1947, 1948 and 1949, by filing for each of those years an income tax return understating the amount of his taxable income. Judge Morgan imposed a sentence of five years on each of the four counts (the sentences on Counts 1, 3 and 4 to be served concurrently), and a fine of $5,000 on each of the four counts. Execution of the sentence of imprisonment on Count Two was suspended and defendant placed on probation for five years after completion of the sentence to be served on Count One.

This was the second trial of this defendant on this indictment, an earlier judgment of conviction on February 1, 1954 having been reversed by this court October 18, 1956 and a new trial ordered. United States v. O'Connor, 2 Cir., 237 F.2d 466.

The errors claimed are as follows: (1) the court's refusal to order the production of the reports of government witnesses, Agents Montz and Wetzel, (2) the court's refusal to allow the use of the agents' prior Tax Court reports and schedule for the purpose of impeachment on cross-examination, (3) inadequacy of the charge, (4) impossibility of a fair trial due to the government's loss of some of defendant's records in the period between the first and second trials, (5) refusal of the court to permit oral testimony by defendant as to opening net worth without the support of documentary evidence, (6) exclusion of defendant's oral testimony as to transactions and conversations with others since deceased, (7) restriction of proof as to defendant's opening net worth investment in Burt Cold Storage Co., (8) rejection by government witnesses of accounts receivable as opening assets, and accounts payable as closing liabilities, (9) the court's refusal to allow use of charts used by the government at the first trial to impeach charts used at the second trial, (10) government notices to produce served on the defense at trial as violative of the Fifth Amendment.

The indictment alleged an understatement of income for

1946 of $112,297.24

1947 27,935.47

1948 54,608.90

1949 35,07 2.56

On the second trial, the government claimed defendant's opening net worth on December 31, 1945 was $361,077.86, defendant, that it was $526,204.61. Defendant was a certified public accountant with a large accounting practice, and many outside business interests, including two farms and a canning plant, interests in real estate, a cold storage business and a theatre company. The government's case was built mainly on the testimony of the agents and their computations to establish the net worth changes, although there was substantial evidence of attempts to conceal underlying records by defendant, and testimony by the defendant as to a claimed currency hoard which strains credulity.

In this setting, it is quite plain that the agents' reports relating to O'Connor's asset, income and expenditure position during the entire tax period in question, whether prepared for criminal or civil tax purposes, were necessary to defendant's preparation and conduct of his defense in two respects, to determine were inconsistent with or contradictory to testimony on the stand of the makers of the reports, and to test their expertness in preparation of the charts and computations used by them respectively on the stand. Point one, as to production, so far as it concerns the agents' reports, is well taken under the Jencks rule, Jencks v. United States, 353 U.S. 657, 77 S. Ct. 1007, 1 L. Ed. 2d 1103, decided after the rulings before and in the trial of the instant case, but before the ruling on the motion for new trial. The so-called Jencks statute, Pub. L. 85-269, Sept. 2, 1957, 71 Stat. 595, 18 U.S.C. § 3500, would now require their production on trial in the circumstances of this case. 18 U.S.C. § 3500(b) provides: "After a witness called by the United States has testified on direct examination, the court shall, on motion of the defendant, order the United States to produce any statement (as hereinafter defined) of the witness in the possession of the United States which relates to the subject matter as to which the witness has testified." Since statement is defined by subsection (e) to include "a written statement made by said witness," the reports herein involved would clearly seem to fall within the plain language of the statute.

While the government correctly asserts that the statute was intended to proscribe production of investigative reports as such (emphasis added), here the government has chosen to base its case on the testimony of the agents as to the results of their investigations. Where such agents have testified, it would seem clear that their reports relating to the same investigation may be obtained by the defendant. See United States v. Prince, 3 Cir., 264 F.2d 850; United States v. De Lucia, 7 Cir., 262 F.2d 610.

If the government chooses to depend on the expertise of a witness for proof of the essentials of a criminal charge, it cannot insulate him from a thorough cross-examination by any claim of a sovereign ...

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