Burger v. United States, 16000.

• Decision Date: 26 February 1959
• Docket Number: No. 16000.,16000.
• Citation: 262 F.2d 946
• Parties: Adolph C. BURGER, also known as A. C. Burger and Andy Burger, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

262 F.2d 946 (1959)

Adolph C. BURGER, also known as A. C. Burger and Andy Burger, Appellant, v. UNITED STATES of America, Appellee.

No. 16000.

United States Court of Appeals Eighth Circuit.

February 2, 1959.

Rehearing Denied February 26, 1959.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Don O. Russell, St. Louis, Mo. (William A. Ens, St. Louis, Mo., was with him on the brief), for appellant.

Murry L. Randall, Asst. U. S. Atty., St. Louis, Mo. (Harry Richards, U. S. Atty., St. Louis, Mo., and W. Francis Murrell, Asst. U. S. Atty., Jefferson City, Mo., were with him on the brief), for appellee.

Before GARDNER, Chief Judge, and WOODROUGH and VAN OOSTERHOUT, Circuit Judges.

WOODROUGH, Circuit Judge.

Adolph C. Burger and Carlisle Cooper were indicted on December 18, 1953, in two counts for wilfully and knowingly attempting to defeat and evade a large part of the taxes due and owing by Andy Burger Motors, Inc., a corporation, for the fiscal years ending June 30, 1947, and June 30, 1948, respectively, by filing false and fraudulent tax returns of the corporation for those years, all in violation of 26 U.S.C. § 145(b), Internal Revenue Code, 1939. The indictment charged that the net income returned by the corporation for the first period was $472,672.26, whereas it was $614,744.59, and that the tax returned was $179,615.46 and it was $233,602.94; that the net income returned for the second period was $312,636.82, whereas it was $351,607.19, and that the tax returned was $118,334.38, whereas it was $133,143.07.

Prior to the trial the indictment was dismissed as to defendant Cooper who was called to testify by the government. Defendant Burger had a jury trial on his plea of not guilty, was convicted on both counts of the indictment, and sentenced to four years imprisonment. He appeals.

There was substantial evidence from which it could be fairly inferred that:

Andy Burger Motors, Inc., was incorporated on July 1, 1946, and at all relevant times was engaged in the business of selling and servicing automobiles. Its capital stock belonged to defendant Burger and his wife; one share was issued to Carlisle Cooper, but it was endorsed back to Burger. Burger was president and closely supervised and controlled the operation of the corporation business. Acting for the corporation, he employed Carlisle Cooper as its general manager in charge of sales and service at its plant on South Grand Street in St. Louis, and Munson Raymond Crocker as its general manager of Community Motors, operated as part of the capital structure of Andy Burger Motors, Inc., for the first four months of the indictment period, on Natural Bridge Avenue in that city. Cooper also became vice president of the corporation though he had no financial interest in it. Both Cooper and Crocker worked a long time under Burger in the enterprises he controlled. Crocker was so employed some twenty-four years and Cooper at least eight.

Late in 1945 and early in 1946, when OPA ceiling regulations were in effect, Cooper was employed in an automobile sales and service business controlled by Burger. Sometime during that period Burger discussed with Cooper the practice of making out false invoices to evidence the sale of cars, and of falsifying the entries in the corporation's books that were derived from the invoices, by showing smaller prices for the cars sold than were actually obtained for them from the purchasers on the sale. It was said that others were doing it and Burger instructed Cooper to follow the practice in their business and agreed that Cooper would be paid ten per cent of the excess money so obtained over the false price stated in the invoice. Burger instructed Cooper to deliver the money received from sales of cars in excess of the price stated in the invoice to him and to keep an account of the sales made on that basis so that Burger "* * * would know what the transactions were and what they covered". The books of the corporation based the amounts of its receipts from the sales of cars upon the amounts stated in the invoices, so that the false invoices produced false amounts, shown as received, from sales of cars on the corporation books.

Pursuant to Burger's instructions, Cooper made sales of cars and issued false invoices which were delivered to the purchasers and to the corporation bookkeeper showing the sale price to be less than the money obtained on the sale. The OPA ceiling prices were removed in November, 1946, some four months after the incorporation of the Andy Burger Motors, Inc., and thereafter Burger directed Cooper to continue the practice of making sales at prices above the prices stated in the sales invoices. He told Cooper: "It was the way we set up our books and if we change now we will disclose what we have done before". The selling of cars by the corporation at prices in excess of the prices shown on the false invoices was accordingly continued consistently throughout the two year indictment period. The amounts of the payments that were in excess of the amounts shown on the invoices were always collected in cash money. Cooper was provided with small books containing perforated detachable sheets arranged so that the entries made on a page of the book would be copied with carbon onto the next sheet. In the regular course of sales made at prices above invoice prices, Cooper would enter a memorandum of the real transaction in the small book, sufficient to identify it with the corresponding corporation stock number and sale records and also the amount of cash money in excess of the invoice price received from the sale. He made these entries at the time of the transactions, in his office at the place of business of Andy Burger Motors, Inc., and in many cases in the presence of the purchasers, some of whom swore to seeing him do it. The entries fill nearly eleven books. They show cash received over the false invoice price during the two indictment years on 941 cars; such cash overage received during the first year amounting to $161,602.69 and during the second year to $60,651.00 — both amounts being greater than the amounts of insufficiency in the tax returns of the corporation for the respective years covered in the indictment.

In obedience to Burger's instructions, Cooper turned over to Burger all of the money received on account of excess charged for the cars over the invoice price. Burger then paid him ten per cent of such money as he had agreed to do. With the delivery of the cash to Burger, Cooper detached from the books and delivered the original entries, which contained the account of the sales producing the money, to Burger in compliance with Burger's request. Cooper retained the copy sheets in the books in his own possession. They were identified and the entries therein were fully explained by Cooper on the witness stand. They were received in evidence and are included by reference in the record here.

Munson Raymond Crocker was general manager of another automobile sales and service agency, called Community Motors Company, which was part of and operated within the capital structure of Andy Burger Motors under the supervision and control of defendant Burger. Crocker received the same directions from Burger as Cooper had received; to follow the practice of charging an additional cash amount over a false invoice price in the sale of cars. The direction was given in late 1945 or early 1946 and the practice was followed under Crocker's management until the Community Motors Company was taken out of the capital structure of Andy Burger Motors, Inc., in November, 1946. Crocker continued the practice until 1948. The agreement between Burger and Crocker was that Crocker should be paid ten per cent of the excess cash received over invoice price of cars sold and Crocker was to give the remaining ninety per cent to Burger. Copies of the false invoices were turned over to the bookkeeper and the books were kept in accord with them. Crocker did not keep a record of the sales made under his management or the cash received from them in that manner. He had been longer in responsible employment under Burger than Cooper and Burger did not require him to keep account of the excess moneys he received. He was constrained to testify from memory. Crocker accounted to Burger from time to time throughout the indictment period for all the cash received on the sale of cars above the invoice price and paid over ninety per cent of it to Burger and kept ten per cent. He swore that to the best of his recollection about 75 per cent of the corporation's new cars sold under his management had "trade-ins", and that cash over and above invoice price was obtained on the sale of about seventy-five per cent of the used cars. The estimates given by Crocker on the witness stand and the estimates of customers, who had bought from the agency under his management in accordance with the described practice, established that large amounts of cash consideration for cars were not disclosed by the corporation's books, or invoices, or included in the corporation income tax returns, but were effectually concealed.

In consequence of the practice carried on under Burger's directions, the tax returns of Andy Burger Motors, Inc., were made up in each of the indictment years from the false invoices and wrongfully omitted that portion of the price that was received over invoice prices.

Each of those tax returns was signed and filed by defendant Burger, president of the corporation.

Carlisle Cooper, Munson Raymond Crocker, and defendant Burger were questioned by Internal Revenue agents concerning the practice of falsifying the invoices and the corporate books and the tax returns. They made denials of having engaged in the practice and made detailed statements exculpating themselves. Cooper and Crocker were prosecuted in federal court for their perjury.

Cooper plead not guilty and stood trial. Burger's attorney was employed to defend him and Cooper was given to...