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August 17, 1967

United States of America
Jack Gisehaltz, Joseph Missone, David Schwartz and Sam Yoselowitz, Defendants

Cannella, District Judge.

The opinion of the court was delivered by: CANNELLA


CANNELLA, District Judge:

 This case was tried non-jury, upon the application of the defendants and the consent of the U.S. Attorney.

 The indictment comprised 13 counts and charges a conspiracy together with 12 substantive counts in violation of the Internal Revenue Law. *fn1"

 There was no serious question during the trial as to the appropriate law either as to the conspiracy or as to the substantive counts. The question was in essence the credibility of the witnesses. The defendants Gisehaltz and Schwartz took the stand, Missone did not. The court drew no inference of guilt from the defendant Missone's failure to testify. The defendant Gisehaltz in addition to his own testimony produced the character testimony and alibi testimony.

 Definition of the Conspiracy in the Indictment

 A criminal conspiracy is one in the nature of a criminal partnership. The conspiracy alleged must be established beyond a reasonable doubt, by credible evidence of the acts, declarations and conduct of the person charged. The individual defendant's connection with the conspiracy must be proven by his own acts, declarations and conduct. Once the conspiracy is established, then all members of the conspiracy are bound by the action of all the other members of the conspiracy, provided that they are done in furtherance of the purpose of the conspiracy, during the life of the conspiracy. The importance of the role of the conspirator does not control the question of whether or not the individual is or is not a member of the conspiracy. Some defendants in a conspiracy are more important than others. Of course, there must be at least two conspirators, since one cannot conspire with oneself. In addition, since our jurisprudence does not punish for mere thought, there must be the commission of at least one pleaded overt act, by one of the conspirators during the life of the conspiracy in furtherance of the aims and purposes of the conspiracy. The overt act may be legal or illegal in nature. Statements made by any conspirator after the conspiracy has ended, cannot establish the conspiracy, they are merely narrative in nature and serve no purpose other than to implicate the speaker. If the statement is in the nature of an admission or confession, it may be used as against him.

 The essence of this conspiracy was the unlawful agreement or combination to deprive the U.S. Government of essential tax information to which it was entitled under congressional action. Its successful accomplishment was immaterial to the question of guilt or innocence.

 Once the conspiracy is established beyond a reasonable doubt from all the credible evidence, it must be determined whether the defendant unlawfully, knowingly and wilfully entered into it. Each defendant is entitled to an individual judgment as to him on this point. His individual knowledge of the unlawful nature of the enterprise must be established by the government. He must know that he is violating a federal Internal Revenue statute. He need not know the particular statute involved by number or other designation, but he must know that he is violating the federal Internal Revenue Law. He need not know all the other conspirators, yet if he knows that there is a conspiracy and if he has knowledge of its basic objections and aims, and he joins it, then he adopts it as his own. A person becomes a member of the conspiracy by associating himself, however informally, with the common plan or scheme and knowing the central aim or principal reason for the overall plan and intending to aid in some significant manner, although it may be a minor way, to bring about the success of the unlawful enterprise.

 The Substantive Charges

 Counts 2 to 13 apply only to the defendants Gisehaltz and Schwartz. They in substance state that on specific dates the defendants caused the preparation and presentation of false Information Returns, Forms 1099 Internal Revenue Service. It is alleged that the name, address and social security number of the recipient of the payment of the winning twin double tickets were false, in that the actual winner was someone other than the casher. Under the Internal Revenue Code, whoever aids and abets in a violation of the Code is guilty of a crime. *fn2" It makes no difference whether the falsity is with the knowledge and consent of the person authorized or required to present such return. Another Internal Revenue Code section provides in substance that the winner of over $600 shall report to the Internal Revenue Service the name and address of the recipient. *fn3" The essential elements of the substantive offenses are:

 1. That on or about the dates alleged in each particular count, each defendant either assisted or procured or counselled or advised or caused the preparation or presentation of a return in connection with the matter arising under the Internal Revenue Laws;

 2. That the said return was false or fraudulent as to a material matter, namely, the name, address and social ...

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