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United States v. Khubani

May 27, 1986

UNITED STATES OF AMERICA, APPELLEE,
v.
VICTOR KHUBANI, DEFENDANT-APPELLANT



Appeal from a judgment of conviction entered in the United States District Court of New York, after a jury trial before Robert L. Carter, Judge, for bribery, in violation of 18 U.S.C. § 201(b). Affirmed.

Author: Lumbard

Before: LUMBARD, PIERCE and ALTIMARI, Circuit Judges.

LUMBARD, Circuit Judge:

Victor Khubani, appeals from a judgment entered on November 4, 1985, in the District Court for the Southern District after a six-day jury trial before Robert L. Carter, Judge, convicting him of one count of bribery in violation of 18 U.S.C. § 201(b). Khubani was sentenced to two years' imprisonment, with all but four months of his period of confinement to be served in a half-way house. Judge Carter also imposed a $20,000 fine and a one-year term of probation, during which time Khubani is to perform 250 hours of community service. Khubani asks that his conviction be reversed arguing that Judge Carter improperly instructed the jury on entrapment. We affirm.

In the spring of 1983, Richard Warren, an Internal Revenue Service ("IRS") field auditor, was assigned to conduct an audit of the Tandoor Restaurant, located in New York City at 40 East 49th Street and owned by Ranju Bhawnani and appellant Khubani. On October 11, 1983, Warren notified Khubani by telephone that the audit was being expanded to include audits of the personal income tax returns of Khubani and Bhawnani for the years 1980, 1981, and 1982. Warren testified at trial that Khubani asked if Warren would first come to Khubani's office of Azad International, an electronics importing firm owned by Khubani, before Khubani spoke to his accountant. Warren agreed and a meeting was arranged for October 18, 1983. Khubani testified at trial that during the October 11, 1983 telephone conversation he and Warren arranged a meeting for October 18, 1983, but that, contrary to Warren's testimony, Khubani did not mention a private meeting and, in fact, he specifically told Warren that he wanted his accountant to be there.

After this conversation, Warren reported to his supervisor that he believed "Khubani was making a bribe overture." Warren then conferred with the Inspection Division ("Inspection"), the IRS's internal security division, and was told not to accept any bribe offer but to stall Khubani, indicate that whatever was being offered would be picked up a later time, and report back to Inspection immediately.

Warren testified that, at the October 18, 1983 meeting, Khubani asked Warren to forget about the personal audit and Warren refused. Khubani responded by offering to "take care" of Warren an then pointed to various items of electronic equipment. Warren did not take anything, explaining that he did not want people to see him carrying large boxes out of Khubani's office. he left saying he would be back in the late afternoon. Khubani testified that Warren arrived late at the October 18, 1983 meeting, approximately five or ten minutes after Khubani's accountant had left, and that it was Warren who solicited the bribe.

Warren immediately reported the incident to Inspection which instructed him to pose as a corrupt IRS agent. Warren then placed a recorded telephone call to Khubani in which they discussed Warren's difficulty with being seen carrying boxes out of Khubani's office. The two agreed to meet again on October 21, 1983 to discuss the matter further.

At the October 21, 1983 meeting at Azad International, Warren wore a concealed recording device. Khubani renewed his offer to Warren of electronic goods if Warren would forget about the audit. Warren, however, reiterated his concern with being seen leaving Khubani's office with large boxes and refused to accept the merchandise. Khubani inquired as to what he could do and Warren responded that it was up to Khubani. Khubani then suggested, "Suppose I open my wallet?" Khubani gave Warren $400 and some electronic items and Warren agreed not to audit Khubani's 1980, 1981, and 1982 personal income tax returns.

Although Warren had ostensibly agreed not to audit Khubani, he continued to pursue the other audits. Warren telephoned Bhawnani on November 7, 1983, and arranged a meeting for November 15, 1983, to begin the audit of Bhawnani's personal returns. On November 10, 1983, Bhawnani called Warren and asked him to speak with Khubani regarding the audit of Bhawnani's returns. In a conversation recorded that same day, Khubani asked Warren whether there was any way Warren could help out Bhawnani. Khubani continued, "One hand washes the other, right?" They then agreed to meet at Azad International on November 14, 1983.

At the recorded November 14, 1983 meeting, Khubani asked Warren (1) to dispense with the audit of Bhawnani; (2) to dispense with the audit of the Tandoor Restaurant; and (3) to issue a false "no change" report on Khubani's personal returns. The "no change" report Khubani sought for himself is more favorable than no audit because it indicates that an audit was in fact conducted and everything on the return was determined to be accurate. Most significantly, once a "no change" report is issued, the return is normally never audited may be reviewed later. Khubani gave Warren $700 in cash and Warren agreed to Khubani's three requests.

On November 23, 1983, Warren met with Bhawnani at the Tandoor Restaurant. During the recorded conversation, Bhawnani stated that he had paid $200 of the $700 November 14, 1983 bribe. Warren indicated that more was necessary for him to forget the audit of Bhawnani's personal returns and Bhawnani gave Warren an additional $200.

On July 23, 1985, a four-count superseding indictment was filed*fn1 charging: (1) Khubani and Bhawnani with conspiracy to defraud the United States Government and to bribe an IRS agent (count 1); (2) Khubani with the October 21, 1983 bribe of $400 (count 2); (3) Khubani and Bhawnani with the November 14, 1983 bribe of $700 (count 3); and (4) Bhawnani with the November 23, 1983 bribe of $200 (count 4).

The trial of both defendants began on July 26, 1985. At the end of the Government's case, Judge Carter dismissed Count One, the conspiracy count. The remaining three substantive ...


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