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United States v. Gross

decided: April 6, 1960.


Author: Friendly

Before LUMBARD, Chief Judge, and MOORE and FRIENDLY, Circuit Judges.

FRIENDLY, Circuit Judge.

Harold Gross appeals from a judgment of conviction on a six-count indictment entered in the District Court for the Southern District of New York after a jury trial. The indictment charged Gross with attempting to evade his income taxes for each of the years 1953 through 1958 by preparing and causing to be prepared and by filing and causing to be filed returns which understated his true income, in violation of § 145(b) of the Internal Revenue Code of 1939, as to 1953 and of § 7201 of the Internal Revenue Code of 1954, 26 U.S.C.A. § 7201, as to the later years.

Gross was employed during this period as the shipping foreman of the Neo-Gravure Printing Company, in Wee-hawken, New Jersey. His salary was paid by check; these payments were recorded on W-2 forms filed by Neo-Gravure with the government and were reported by Gross in his tax returns. However, the government claimed, and two officers of Neo-Gravure, Chenicek and Hillbrant, testified, that Gross had received an additional $29,000 in cash. This consisted of six annual payments of $4,000 for activities in preventing a feared work stoppage in connection with deliveries of the American Weekly to the New York Journal American, as a result of rivalry between the Teamsters' Union to which Neo-Gravure's drivers belonged and the Newspapers & Mail Deliverers' Union which represented the Journal American's, and two payments of $2,500 each in 1954 and 1955 for assisting Neo-Gravure in collective bargaining negotiations with Local 1730, International Longshoremen's Association, which represented its platform workers. Gross denied receipt of these payments; none were included in his tax returns. These same payments had been the subject of inquiry by a Committee of the United States Senate chaired by Senator McClellan, Hearings Before the Select Committee on Improper Activities in the Labor or Management Field, 86th Cong., 1st Sess., pp. 18214-240, 18296-304.

Because of the issue of venue raised by Gross on this appeal, it becomes necessary to state how his tax returns were prepared and filed. In 1952 Gross requested Michael Pinto, an accountant having an office in the Southern District of New York, to prepare his income tax returns for 1951. Pinto asked for documentary evidence of Gross' income. Gross submitted his W-2 forms. Pinto could not recall whether Gross had submitted any other documents but "was satisfied that he submitted to me all the income that he had to report." For each of the years here in question, Pinto received similar information from Gross in Pinto's office in the Southern District. Pinto there prepared the returns in his own handwriting, signed them under the rubric "Preparer" (except for the 1953 return), and mailed them to Gross, who signed and filed them without change. Until the fall of 1958 Gross lived in Forest Hills, L.I., and the returns for 1953-1957 were filed in the Eastern District of New York; in October, 1958, he moved to Miami Beach and his 1958 return was filed in Florida. After Pinto had prepared the returns and sent them to Gross, "a truckdriver or somebody who seemed to look like a truckdriver" would come to Pinto's office with Pinto's fee. The government does not claim Pinto knew of Gross' alleged tax evasion.

After both sides had rested, defendant moved for a directed verdict of acquittal under Fed.R.Crim.Proc. 29, 18 U.S.C.A. The Court reserved decision. The jury found defendant guilty on all counts. Thereafter defendant renewed his motion for acquittal "on the ground that the evidence is insufficient to sustain a conviction of the offenses charged," for arrest of judgment under Fed.R.Crim.Proc. 34 "on the ground that the court is without jurisdiction of the offense in that the offenses, and each of them, if any, were not committed in this district," and for a new trial under Fed.R.Crim.Proc. 33. All motions were denied. The court sentenced Gross to five years' imprisonment on each count, the sentences to run concurrently.

Gross contends the District Court erred in not granting his motions for acquittal and for arrest of judgment on the ground of improper venue; the government answers, first, that Gross waived any objection to venue and, second, that venue was properly laid in the Southern District in any event. We overrule the government's answer as to waiver but sustain its answer on the merits. Gross contends in the alternative that a new trial should be directed because of certain questions allowed to be asked him on cross-examination, and also because of what he claims to have been an improper answer by the Court to a question from the jury after the jury had begun its deliberations. We uphold the former contention and therefore do not reach the second.

We shall deal first with the government's claim that Gross waived any objection to venue in the Southern District by his delay in making this.

The claim would be well founded if this were a civil case, where the privilege as to venue "is of such a nature that it must be asserted at latest before the expiration of the period allotted for entering a general appearance and challenging the merits." Commercial Casualty Ins. Co. v. Consolidated Stone Co., 1929, 278 U.S. 177, 179-180, 49 S. Ct. 98, 99, 73 L. Ed. 252. However, no similar time limitation on the making of the objection exists in criminal cases where questions of venue "are not merely matters of formal legal procedure," United States v. Johnson, 1944, 323 U.S. 273, 276, 65 S. Ct. 249, 251, 89 L. Ed. 236, but of constitutional right. As said by Judge Minton, as he then was, in United States v. Jones, 7 Cir., 1949, 174 F.2d 746, 748, "One of the things the Government has the burden of proving is venue. It is an essential part of the Government's case. Without it, there can be no conviction. U.S.Const. Amend. VI * * *," and further a "motion for acquittal made at the conclusion of all the evidence properly raised the question of venue." Accord, United States v. Browne, 7 Cir., 1955, 225 F.2d 751, 755.

The bundle of legal principles grouped under the term "waiver" thus has an exceedingly narrow application when a criminal defendant claims the government has failed to prove proper venue. Indeed, our opinions show rather that this is limited to what would be more accurately described as election, i. e., to cases where the conduct of a defendant who has been put on notice that the government will not prove proper venue in the district of the indictment indicates that he is nevertheless willing to be tried there. We have found such an indication where lack of proper venue appeared on the face of the indictment (United States v. Jones, 2 Cir., 1947, 162 F.2d 72), and have said we might find it where lack of intention to prove proper venue appeared from statements by the government during the trial, see United States v. Michelson, 2 Cir., 165 F.2d 732, 734, affirmed 1948, 335 U.S. 469, 69 S. Ct. 213, 93 L. Ed. 168, or where defendant specified the grounds for a motion for acquittal but omitted mention of improper venue, see United States v. Brothman, 2 Cir., 1951, 191 F.2d 70, 73.

This was not such a case. The various counts of the indictment charged that "in the Southern District of New York, Harold Gross * * * did wilfully and knowingly attempt to evade and defeat a large part of the income tax due and owing by him and his wife to the United States of America * * * by preparing and causing to be prepared and by filing and causing to be filed with the District Director of Internal Revenue at Brooklyn, New York [or in Count VI, at Jacksonville, Florida], a false and fraudulent joint income tax return * * *" Since the indictment alleged that the returns had not only been prepared in but filed from the Southern District, there was no basis for Gross' moving against it for improper venue, United States v. Albanese, 2 Cir., 224 F.2d 879, certiorari denied, 1955, 350 U.S. 845, 76 S. Ct. 87, 100 L. Ed. 753; he was entitled to await the government's case and to move when the government failed to prove that all the elements charged to have taken place in the Southern District in fact occurred there. United States v. Michelson, supra; United States v. Brothman, supra.

The government supports venue in the Southern District under 18 U.S.C. § 3237, providing that "Except as otherwise expressly provided by enactment of Congress, any offense against the United States begun in one district and completed in another, or committed in more than one district, may be inquired of and prosecuted in any district in which such offense was begun, continued or completed." It relies on United States v. Albanese, supra, and United States v. Miller, 2 Cir., 246 F.2d 486, certiorari denied 1957, 355 U.S. 905, 78 S. Ct. 332, 2 L. Ed. 2d 261, where venue was sustained under that section. Neither is decisive here. In Albanese, an income tax evasion case, everything save the actual receipt of the returns took place in the district where the defendants were charged; and in Miller, a false statement prosecution, the statements were made up and mailed in the district of the indictment, and only the receipt was elsewhere. Here, on the contrary, there was no evidence that Gross filed the returns from a place in the Southern District.

Nevertheless we believe venue was properly laid in that district. "By utilizing the doctrine of a continuing offense, Congress may * * * provide that the locality of a crime shall extend over the whole area through which force propelled by an offender operates." United States v. Johnson, supra, 323 U.S. at page 275, 65 S. Ct. at page 250.The intent of Congress to avail itself of this prerogative was emphasized when, in the 1948 revision of the Criminal Code, four years after the Johnson decision, it altered the language of what is now 18 U.S.C. § 3237, from that of the Judicial Code of 1911, ch. 231, § 42, 36 Stat. 1100, "begun in one district and completed in another," by adding the words "or committed in more than one district." The return is basic to Federal income taxation. As stated in § 601.602 of the Treasury Regulations, "All internal revenue taxes which are not collected by stamps are assessed and collected through the self-determination and selfapplication of the law and the regulations by taxpayers. The tax return forms are the instruments through which this is accomplished." The forms, prescribed in accordance with § 6011 of the Internal Revenue Code of 1954, 26 U.S.C.A. § 6011, include a declaration by the preparer, if other than the taxpayer, under the penalties of perjury, that to the best of his knowledge the return is true, correct and complete based on all the information that he has.

The government's proof was that Gross sent incomplete and therefore untrue and incorrect information to the preparer in the Southern District; that the preparer thereupon prepared and attested returns in that district, which, while true on the basis of the information given him, were in fact false; and that he mailed them in the Southern District to Gross who then used them without change. This was enough to make the Southern District an "area through which force propelled by an offender operates." True no crime was "completed" in the Southern District. But it cannot be said the crime was neither "begun" nor ...

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