Fischer v. United States

• Decision Date: 26 May 1954
• Docket Number: No. 4747.,4747.
• Citation: 212 F.2d 441
• Parties: FISCHER v. UNITED STATES.
• Court: U.S. Court of Appeals — Tenth Circuit

212 F.2d 441 (1954)

FISCHER v. UNITED STATES.

No. 4747.

United States Court of Appeals, Tenth Circuit.

April 29, 1954.

Rehearing Denied May 26, 1954.

Isaac Mellman, Denver, Colo. (Gerald N. Mellman, Denver, Colo., on the brief), for appellant.

Clifford C. Chittim, Asst. U. S. Atty., for the Dist. of Colorado, Boulder, Colo. (Donald E. Kelley, U. S. Atty., for the Dist. of Colorado, Denver, Colo., on the brief), for appellee.

Before PHILLIPS, Chief Judge, and BRATTON and PICKETT, Circuit Judges.

PICKETT, Circuit Judge.

The appellant, George Fischer, was convicted on two counts of an indictment which charged him with a willful attempt to defeat and evade a large part of income tax due and owing by him and his wife for the years 1949 and 1950, by filing false and fraudulent joint income tax returns in violation of 26 U.S.C.A. § 145(b).¹ He appeals from a two-year sentence of imprisonment on the first count, and five years' probation on the second count.

The first count of the indictment charges that Fischer filed a joint return for the year 1949, showing a net income of $6,315.64, upon which there was due a tax of $650.00, when he knew that the joint net income for that year was $9,159.94, upon which there was due a tax of $1,198.32. In the second count it was charged that for the year 1950 a joint return was filed showing a net income of $9,104.20, upon which there was due a tax of $1,237.38, when he knew that the joint net income for that year was $21,203.75, upon which there was due a tax of $4,402.68.

Fischer had been a practicing attorney in Brighton, Colorado, for almost twenty years. He had served as County Attorney for Adams County, and as a State District Judge for two years. During the years in question, in addition to practicing law, he acted as Assistant District Attorney for the First Judicial District of Colorado which was comprised of Adams, Arapahoe, Jefferson, Clear Creek and Gilpin Counties. Most of his work, both in the practice of law and as Assistant District Attorney, was in Adams County.

The basis of the government case is that Fischer failed to report items of income from his law practice and understated others, and that he failed to report income received by him from operators of slot machines in Adams County, Colorado. For the year 1949, Fischer admitted the failure to return fifty-four separate items of income from his law practice which totaled $1,365.85. Most of these items were small, but they included amounts of $50, $60, $75, $100, $110, and $250. In addition, there were fourteen understatements of amounts received which totaled $612.65. An operator of slot machines testified that he had entered into an agreement with Fischer whereby one-third of the income from slot machines was to be delivered to Fischer in return for certain protection from prosecution for the operation of the machines. He stated that each week Fischer's share of this income was placed in an envelope by a bookkeeper and that he delivered the envelope and contents to Fischer personally. The bookkeeper testified that one-third of the income from the slot machines was carried on the books as "legal fees" or "legal expenses" and cash representing that amount was placed in separate envelopes. There was evidence that in 1949 Fischer received from this source the sum of $1,022.73. For the year 1950, Fischer admitted receiving from his law practice seventy-seven items of unreported income, which totaled $7,097.93. One of these items was a $4,000 fee paid to him on April 3, 1950, and deposited in his savings account with a Denver bank. In the same year there were also twelve understated items which totaled $663.18. The evidence shows that for the year 1950 Fischer received $3,790.93 as protection money. Fischer denied receiving any of the slot machine payments, and testified that his failure to report the other items of income was the result of oversight, neglect and sloppy bookkeeping, and was not done willfully.

The evidence in this case establishes that Fischer was experienced in the law; that he had substantial unreported income from illegal sources; and that unreported and understated items of income during the taxable periods were continuous and constituted a large portion of his income. These were circumstances from which the jury could properly conclude that Fischer willfully attempted to evade a large part of his income taxes for the periods in question. Graves v. United States, 10 Cir., 191 F.2d 579, 582; United States v. Venuto, 3 Cir., 182 F.2d 519, 521; United States v. Hornstein, 7 Cir., 176 F.2d 217, 220; Halle v. C. I. R., 2 Cir., 175 F.2d 500, 503, certiorari denied 338 U.S. 949, 70 S.Ct. 485, 94 L.Ed. 586; Stinnett v. United States, 4 Cir., 173 F.2d 129, 130, certiorari denied 337 U.S. 957, 69 S.Ct. 1531, 93 L.Ed. 1756; Gleckman v. United States, 8 Cir., 80 F.2d 394, 401, certiorari denied 297 U.S. 709, 56 S.Ct. 501, 80 L.Ed. 996; Cf. United States v. Murdock, 290 U.S. 389, 394, 54 S.Ct. 223, 78 L.Ed. 381. It is not necessary for the government to prove the exact amount of unreported income in cases of this kind. It is sufficient if the evidence shows that the unreported amounts were substantial, and that the failure to report was willful. Holland v. United States, 10 Cir., 209 F.2d 516, 522, and the cases there cited.

It is urged that the court committed error in its instructions to the jury by failing to properly define the term "willfully" as used in the statute, and in its instructions relating to reasonable doubt and circumstantial evidence. The court gave a rather extensive and careful definition of the word "willful". It did not state in so many words that to constitute a violation of the statute, the attempt to evade income taxes must be done "with a bad purpose". The instruction on reasonable doubt was in the language usually approved by the courts. After stating what constituted reasonable doubt, the court told the jury that if it did not believe the defendant to be guilty beyond a reasonable doubt, "it is your duty to acquit" him. The objection to the instruction is that it did not say that the jury "must" acquit the defendant if there was a reasonable doubt of his guilt. In determining whether Fischer acted willfully, the jury was told that it is difficult to determine what goes on in the mind of a man, and that this can be determined only from inferences fairly and reasonably to be drawn from proven facts and circumstances including "the kind of evasion, if any, you find the defendant committed". It is contended that this instruction was an attempt to instruct on circumstantial evidence and that it was insufficient.

No objection was taken to any part of the instructions and the defendant did not suggest or offer any additional instructions.² It is settled law that appellate courts will not consider instructions to which no objections were taken at the time of trial. Fed.Rules Cr.Proc. rule 30, 18 U.S.C.A.; Apodaca v. United States, 10 Cir., 188 F.2d 932; Ryles v. United States, 10 Cir., 172 F.2d 72, reversed on other grounds 336 U.S. 949, 69 S.Ct. 882, 93 L.Ed. 1104; Thayer v. United States, 10 Cir., 168 F.2d 247; Berenbeim v. United States, 10 Cir., 164 F.2d 679, certiorari denied 333 U.S. 827, 68 S.Ct. 454, 92 L.Ed. 1113. The foregoing rule is subject, however, to the exception that an appellate court has inherent power, upon its own motion, to inquire into the adequacy of a charge in cases where there is grave error which amounts to the denial of a fundamental right of the accused. Fed.Rules of Cr. Proc. rule 52(b), 18 U.S.C.A.; Apodaca v. United States, supra; Ryles v. United States, supra; Madsen v. United States, 10 Cir., 165 F.2d 507. We have carefully examined the record and find no error in the court's instructions which amount to a denial of any fundamental right of the appellant.

Appellant next assigns as error the admission in evidence of two exhibits and certain testimony. The slot machine operators who testified that Fischer received income, used the firm name of "American Amusement Company". The persons collecting money from the different machines prepared tickets as the collections were made showing the machines from which the money came. These tickets, together with the cash, were brought to the company office and the bookkeeper compiled summary sheets from the tickets which showed the total receipts from the various machines. These sheets were made in the regular course of business and constituted a part of the books of the company relating to its income and were the basis upon which the division was made with Fischer. They were admissible for this purpose. 28 U.S.C.A. § 1732.

The second exhibit was a printed booklet written and published by Fischer in 1943, entitled "Mind Your Own Business". One section of the book was captioned "Income Tax, Keeping Records". In this section the reader is cautioned to "Be sure to keep all dates, amounts and items with some degree of accuracy". It suggested a simple and practical method of keeping records to avoid difficulty in income tax matters. The author points out the pitfalls which he now asserts as a defense and upon which he relies to negative any willfulness on his part when he failed to return all of his income. The booklet was admissible upon the issue of willfulness.

During the direct examination of one of the partners in the American Amusement Company, the court directed the District Attorney to pursue a line of questioning to "find out where, and when, and under what circumstances" an incident occurred. It is contended that this direction transcended the bounds of an impartial presiding judge and tended to convey to the jury that...