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UNITED STATES v. GLEASON

October 5, 1966

United States of America, Plaintiff
v.
Ann Gleason, Mollye Karp and Frank Pitkin, Defendants


Frankel, District Judge.


The opinion of the court was delivered by: FRANKEL

Memorandum

FRANKEL, District Judge.

 The three defendants are charged in a multi-count indictment with income tax evasion. Defendants Gleason and Karp were business partners during the years in question. Pitkin was their accountant. Karp has moved for a severance under Rule 14 and for discovery and inspection under Rule 16, Fed. R. Crim. P.

 1. In her motion for severance, defendant Karp asks that she be tried separately from defendant Pitkin. As grounds for such relief, she and her attorney have filed affidavits asserting that, as accountant for her and Gleason, Pitkin "handled all of their tax matters, * * * organized, maintained and prepared their business and tax records, * * * prepared the income tax returns in question, * * * had all of his client's relevant papers and records before him when he did so, and * * * handled the ensuing investigation by the Internal Revenue authorities." Further, she affirms on oath that Pitkin determined the business and record-keeping procedures; that he alone directed the drawing of checks, with his clients having only to sign their names; that he furnished the net worth statements on which the Government now proposes to rely; and that, after his discharge from the accountant's role, he turned over to the Government the books and records of Karp and Gleason. It is sworn, in short, that the movant placed herself trustingly in Pitkin's hands, and followed his instructions in all pertinent transactions without any reason to believe that her income tax obligations were not being faithfully discharged.

 The moving affidavits go on to show, and it is not disputed, that Pitkin has in the past made written and oral statements tending to exculpate his taxpayer-clients. Karp also undertook to exculpate herself by appearing and testifying before the grand jury. However, "Pitkin refused to do so," and Karp's counsel have since been unable to discuss the case with him.

 The Government has declared in a bill of particulars that it will proceed by the net worth and expenditures method of proof. The prosecution will thus undertake to establish that the records and returns prepared and allegedly controlled by Pitkin were false in material respects. Karp, on the other hand, in the affidavits now presented and in her grand jury testimony, has pleaded essentially her ignorance concerning those records and her reliance upon Pitkin - all with a view to establishing, as her counsel states, "the central defense * * * that the women taxpayers did not have any guilty knowledge or criminal intent."

 For the foregoing reasons, Karp says, it is essential that she be able to call Pitkin as a witness for her defense. Since she cannot do this if they are tried together, United States v. Housing Foundation of America, 176 F.2d 665 (3d Cir. 1949), or comment on his failure to testify in a joint trial, De Luna v. United States, 308 F.2d 140 (5th Cir. 1962), she urges that a severance be granted.

 In response to the motion, the Government agrees that Karp will be unable to call Pitkin or comment on his silence if they are tried together. It opposes the motion, however, on several grounds of varying substantiality:

 a. The prosecution notes that both Karp and Gleason have made prior motions. It stresses particularly that defendant Gleason "made a motion for severance pursuant to Rule 14 which was denied." Affidavit in Opposition, par. 4 (emphasis in original). It omits, however, that Gleason's motion was upon an entirely different ground. In the end, neither that motion nor any of the others presents any weighty reason for denying the present one. Indeed, the supplying of particulars and other developments as this case has moved, somewhat slowly, toward trial would seem to make the motion more appropriate and persuasive now than it might have been at some "relatively early stage of the proceedings * * *." United States v. Berman, 24 F.R.D. 26, 29 (S.D.N.Y. 1959).

 b. The Government points out that Rule 8(b) allows joinder in cases like this one and that there is a broad measure of discretion in deciding motions for severance under Rule 14. This helps to define the problem. It is not, nor is it claimed to be, sufficient ground for decision either way.

 c. The Assistant United States Attorney reports that he has spoken to Pitkin's attorney, who says "he would advise the defendant Pitkin to invoke his privilege under the Fifth Amendment" if Pitkin were called to testify "before a final disposition of his case * * *." Affidavit in Opposition, par. 9. Accordingly, the prosecutor adds (ibid):

 
"It is hard to believe that defendant Karp does not suspect this and hopes to confuse a petit jury by having a co-defendant invoke the Fifth Amendment during her trial, a tactic which would fail in any event. United States v. Maloney, 262 F.2d 535 (2d Cir. 1959)."

 This is the most interesting of the Government's contentions. It does not serve, upon analysis, to defeat the arguments for severance.

 It may be questioned, first of all, whether the prediction about another defendant's disposition to testify - even where the prediction rests upon the advice of that defendant's counsel, who may not have unqualified reasons for sharing confidences with the prosecution - is "properly the Government's to interpose." United States v. Echeles, 352 F.2d 892, 898 (7th Cir. 1965). Passing this, as the argument of the motion demonstrated, the matter is surely in the realm of speculation. If Pitkin is tried separately and first, he may plead, or be found, guilty. He may choose to testify in his own defense. He may, as the law presumes, be acquitted, whether or not he takes the stand. One way or another, ...


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