Berkovitz v. United States

• Decision Date: 31 May 1954
• Docket Number: No. 14493.,14493.
• Citation: 213 F.2d 468
• Parties: BERKOVITZ v. UNITED STATES.
• Court: U.S. Court of Appeals — Fifth Circuit

213 F.2d 468 (1954)

BERKOVITZ v. UNITED STATES.

No. 14493.

United States Court of Appeals Fifth Circuit.

May 31, 1954.

Walter G. Arnold, Jacksonville, Fla., Claude Pepper, Neal Rutledge, Philip T. Weinstein, Pepper & Faircloth, Miami, Fla., for appellant.

Mark Hulsey, Jr., Asst. U. S. Atty., Jacksonville, Fla., James L. Guilmartin, U. S. Atty., Miami, Fla., H. Brian, Holland, Asst. Atty. Gen., Ellis N. Slack, David L. Luce, Joseph M. Howard, Sp. Assts. to Atty. Gen., for appellee.

Before STRUM and RIVES, Circuit Judges, and DAWKINS, District Judge.

DAWKINS, District Judge.

Appellant was convicted and sentenced on a charge of "attempting to defeat and evade income taxes" for the year 1946, under Section 145(b), Title 26 United States Code, of the Internal Revenue Code.

Defendant's assignments of error are in substance as follows:

1. That the court erred in charging: "The presumption is that a person intends the natural consequences of his conscious acts, and a natural presumption would be if a person consciously, knowingly, or intentionally did not set up his income, and thereby the Government was cheated or defrauded of taxes, that he intended to defeat the tax.";

2. In refusing to give appellant's charges Nos. 8, 14 and 16, "or any one of them";

3. (1) In excluding evidence of the subsequent payment of the taxes or a considerable part thereof, and (2) then charging the jury that it could consider whether defendant had discharged his tax liability in determining his criminal intent;

4. "Is proof that the defendant failed to include certain items of income in his income tax return sufficient — standing alone — to sustain a verdict of guilty of the felony defined in Sec. 145(b) of the Internal Revenue Code?";

5. In further charging: "It is for you to determine from all of the evidence whether the defendant has knowledge of the falsity of this return, provided you also find that the return was false."; and

6. The court abused its discretion (1) in denying appellant's motion for a bill of particulars, and (2) in overruling his motion for a new trial, based upon alleged newly discovered evidence, which could only have been ascertained had the motion for particulars been granted.

The two principal alleged errors which we shall first consider are No. 1, dealing with the charge first quoted above, and No. 3, the excluding of evidence by defendant to show he had paid a substantial part of the taxes he was charged with attempting to evade and defeat, and later charging the jury they might consider the failure to pay as bearing upon his intent.

It was conceded by defendant that he had not reported all of his income for the calendar year 1946, and the sole issue was as to whether this had been done wilfully and intentionally, with knowledge of the relevant facts, for the purpose of defeating and evading the taxes, as denounced by the criminal provisions of the income tax law under which the indictment was laid. The government, of course, offered defendant's income tax return bearing his signature, which was also not denied, and followed this up with evidence to support the charge in the indictment that accused had returned only $5,098.68 as income upon which a tax of $822.38 had been paid; whereas, his true income had been $101,361.34, on which he owed the sum of $63,458.06 as taxes.

It is believed to be more logical to consider these alleged errors in reverse order, that is, the exclusion of evidence as to what had been paid, and then giving the charge hereafter quoted.

In his opening statement, counsel for the government told the jury:

"That the defendant was a large citrus fruit grower; had groves in counties, in several counties, Polk County and others around there; and he sold his fruit and received many thousands of dollars for his fruit that he did not account for.

"We will put in the cancelled checks that they paid him. The originals, or photostatic copies. And it will amount when we get through — it is not like one of these net worth cases; it is just a matter of addition and subtraction."

The first witness called by the prosecution was one Jack R. Davis, who testified he was the "Assistant Head of the Accounting Branch in the office of the Director of Internal Revenue * * *" but did not know defendant personally. The witness had produced in response to subpoena duces tecum "the original * * * income tax return" of defendant, to which were attached "certain schedules" which were offered and received in evidence as Government's Exhibit No. 1, without objection. Thereupon counsel for the Government stated in the presence of the jury:

"May it please the Court and Gentlemen of the Jury: This income tax return, the indictment is based on that, and you will have it to look at later on, and it shows the filing, and with respect to the question asked by defense counsel as to the wife of the defendant, the answers to this question is a question that is asked, `Is your wife making a separate return for 1946?\' and the answer is `No\'. So this is the separate return of Philip Berkovitz, as far as the facts appearing now are concerned."

On cross examination, the witness stated that the return showed on its face that it had been made by a "Certified Public Accountant". This was later verified by the accountant, Frank L. Cowles, who stated that the return had been prepared in his office (as a Public Accountant) in Tampa, Florida, under Cowles' supervision, entirely from data furnished by defendant's bookkeeper. However, in response to questions by Government's counsel, he further stated that he had not examined any books of Berkovitz.¹

The prosecution then introduced testimony of Walter G. Howard, the bookkeeper who had kept defendant's books for the period involved, to show where he had gotten the data for entry in the books. Howard was asked by the court:

"Q. Are you a bookkeeper? A. Supposedly, yes, sir.

"The Court: And you kept books for Mr. Berkovitz during the period in question, 1946? A. Part of the time, yes, sir."

The witness was presented by Government's counsel with a document he had produced at their instance and identified it as a "record of checks recorded by Mr. Berkovitz and given to me, which was transferred to the journal sheets on the books."

"By Mr. Hill (counsel for defendant): Q. Mr. Howard, are these figures in your handwriting? A. Yes, sir.

"Q. This isn\'t on the books you kept for Mr. Berkovitz? A. No.

"Mr. Hill: Are you through with the witness?

"The Court: He has offered the document in evidence, as I understand, and you are permitted to cross examine for the purpose of objection.

"Mr. Hill: I understand.

"By Mr. Hill: Q. And these figures are in your handwriting? A. Yes, sir.

"Q. But these are not the only books you kept? A. No, these were taken from the journal or ledger, as I remember — I don\'t recall definitely which.

"Q. You don\'t remember whether it was taken from the journal or the ledger? A. I don\'t recall definitely, no, sir. Those checks were recorded in the journal sheets and posted in the ledger.

"Mr. Hill: Your Honor, I don\'t see the relevancy of these figures, these are not his books, that\'s just something he copied from books.

"The Court: When did you make this list, Mr. Howard? A. I don\'t remember — is it dated at the top?"

The Court then took over and examined the witness, objection was made to the document by counsel for the defendant and the Court stated, "I am going to mark this paper No. 2 for identification for the Government, and it may be connected up later on."

When the witness was finally taken on cross examination by counsel for the defendant, he testified as indicated in footnote.²

Further on in his testimony on cross examination, he admitted that the document from which he was testifying was made up after he left defendant's employ. Counsel for defendant then had him identify another paper and when it was attempted to interrogate the witness about it, the court intervened, ruling that, although the witness admitted it was in his handwriting and dealt with the same subject matter, the court said, "This isn't anything in cross. You don't need to answer that."

"By Mr. Hill: Q. Mr. Howard, when you made up the figures on that piece of paper that I showed you, were they made about December 27th, as noted on that paper? The Court: This isn\'t anything in cross. You don\'t need to answer that. You will have to call this man as your witness to bring out what he did about that statement."

Other witnesses were introduced to prove purchases of fruit from defendant and to show deposits of funds in banks, et cetera, the purpose being to establish the quantity and value of sales as bearing upon defendant's income.

Thereafter a Special Agent of the Bureau of Internal Revenue was called by the Government to testify generally about his investigation, talks with defendant, sources of information, et cetera. He stated that the tax actually due for the calendar year 1946 was, as charged in the indictment, $63,458.06 (R. 247). Counsel for defendant then questioned him about how much taxes the defendant had actually paid and after considerable exchanges between them, the witness insisting he had not actually collected any money, counsel for defendant asked:

"Q. You are thoroughly familiar with the fact, though, aren\'t you?"

Thereupon the Court intervened:

"The Court: Listen, please don\'t argue with this witness. Just ask him about factual matters. He hasn\'t testified Mr. Hollingsworth came to Winter Haven and did anything. You can\'t assume something that he hasn\'t already testified to. Now if you want to make a showing, you can make it by a witness that says he knows something about it.

"Mr. Hill: I thought this man knew something about it. I am sorry.

"The Court: Well, you have asked him a great deal that he hasn\'t testified to, which is unfair to the witness. All right, proceed with the examination."

Thereafter counsel questioned the witness at...