United States v. Barash

• Decision Date: 03 August 1966
• Docket Number: Docket 30432.,No. 459,459
• Parties: UNITED STATES of America, Appellee, v. David Bernard BARASH, Appellant.
• Court: U.S. Court of Appeals — Second Circuit

365 F.2d 395 (1966)

UNITED STATES of America, Appellee, v. David Bernard BARASH, Appellant.

No. 459, Docket 30432.

United States Court of Appeals Second Circuit.

Argued June 24, 1966.

Decided August 3, 1966.

COPYRIGHT MATERIAL OMITTED

Louis Bender, New York City, Lloyd A. Hale, New York City, of counsel, for appellant.

Robert L. King, New York City (Robert M. Morgenthau, U. S. Atty. for Southern District of New York; Neal J. Hurwitz, John E. Sprizzo, Asst. U. S. Attys., of counsel), for appellee.

Before MOORE, FRIENDLY and FEINBERG, Circuit Judges.

FRIENDLY, Circuit Judge:

A grand jury in the District Court for the Southern District of New York returned a rather confusing 32 count indictment against David Bernard Barash, a certified public accountant and attorney, relating to improper payments to internal revenue agents in connection with their office audit examinations of income tax returns of Barash's clients. Counts 1-12 charged him with giving money to Agents Clyne, Montello and DeSibio in 1960, 1961, 1962 and on January 18, 1963, with intent to influence their official acts in violation of 18 U.S. C. § 201, and counts 13-16 charged him with gifts to Agents Clyne, Montello, Wolf and an agent subsequently identified as Coady for a similar purpose later in 1963 in violation of 18 U.S.C. § 201 (b) as the statute now stands.¹ Counts 17-20 charged him with making the same gifts alleged in counts 13-16 for and because of the agents' official duties, in violation of 18 U.S.C. § 201(f), added in the amendment of October 23, 1962, which became effective 90 days after passage. Finally counts 21-32, which related to the same payments alleged in counts 1-12, charged him with aiding and abetting Clyne, Montello and DeSibio in receiving illegal fees for the performance of their duties in violation of 26 U.S.C. § 7214(a) (2). After trial before Judge MacMahon and a jury, Barash was acquitted on the six counts relating to Montello and Wolf but found guilty on the twenty-six (involving thirteen transactions) which concerned Clyne, DeSibio and Coady. He was sentenced to imprisonment of a year and a day on each count, the sentences to run concurrently.

The Government's case was presented through the agents. Clyne and DeSibio had pleaded guilty to offenses charged in the instant indictment and to others; Coady had been operating in an undercover capacity. Clyne, who was the receiving party in ten of the thirteen incidents resulting in convictions, testified to a pattern of conduct substantially as follows: Barash would inform Clyne of clients who had received "call-in" letters instructing them to appear for audit of their returns before the group of agents that included Clyne. In violation of office procedures Clyne would obtain the returns and related papers from his supervisor's file and assign the audits to himself. Barash would suggest relatively small disallowances in unsubstantiated deductions for travel and entertainment expenses, and would offer Clyne compensation for thus passing the returns. When Clyne obliged, Barash would make payments ranging from $20 to $50 per return. DeSibio, who figured in two incidents in 1961, gave similar testimony except that he did not say Barash had taken the initiative in getting the audits assigned to him. Coady testified that in July 1963 Barash, after being introduced to him by a fellow-employee, Jeanne Lupescu, asked if Coady could get a tax return from the files and assign it to himself; when Coady answered in the affirmative, Barash furnished him the details, requested a "no-change" report the next day and, on Coady's assent, said he had an envelope for him and shortly returned with one containing $50.

The theory of the defense was that Clyne and DeSibio had implicated Barash in order to get favorable consideration as to their sentences for other crimes, and that Coady had distorted an incident that was wholly innocent. Barash denied offering anything to the agents in connection with the audits, although he admitted having given Christmas presents of $25 or $50 to Clyne in 1960, 1961 and 1962 and making a $50 payment in January 1963, having DeSibio to lunch, and having made a $50 gift to Coady in appreciation of the latter's expediting the audit and in response to a remark, admittedly made by Coady, that he was soon going off to Marine Corps summer camp. Barash also testified as to pressure from Clyne, beginning with a mild suggestion on an audit in the spring of 1961 and mounting in intensity thereafter,² all of which Clyne had denied on cross-examination, and was again to deny on rebuttal.

Barash raises many claims of trial error;³ the Government defends the judge's rulings and instructions and argues in the alternative that any error can be quarantined to particular counts and is immaterial in view of the concurrent sentences. See Lawn v. United States, 355 U.S. 339, 359, 362, 78 S.Ct. 311, 2 L.Ed.2d 321 (1958). However, as Judge Clark made clear for us, the doctrine of the one good count is not a fetish; we must inquire whether "the nature of the error committed below or other circumstances suggest that the accused might have received a longer sentence than otherwise would have been imposed, or that he has been prejudiced by the results of the proceedings." United States v. Hines, 256 F.2d 561, 563 (2 Cir. 1958).

We begin with the two counts relating to Coady, the single agent whose slate was clean and whose testimony may thus have carried particular weight. Cross-examination had emphasized that Barash had given him $50 only after the audit had been concluded and therefore could not have intended the payment to influence any action on his part. The Government sought to counter this by asking Coady on redirect whether prior acts had led him to believe he would be paid. He mentioned three — the suggestion that he pull the return and assign it to himself, the request for a no-change without substantiation, and, over objection, the introduction of Barash to him by Jeanne Lupescu "because Miss Lupescu had never introduced me to anyone except someone who was going to pay me off." Granted that a promise to pay can be conveyed only by a wink of the eye, it is questionable whether even if all this evidence were properly received, the Government made out enough to go to the jury on the bribery count with respect to Coady. But the testimony as to Lupescu should not have been admitted. Its hearsay nature, which would have been obvious if Coady had said Lupescu had told him that Barash had previously paid her or other agents and thus was an accountant of the paying kind, was not removed because she conveyed her meaning without the use of words. The guiding principle was stated long ago by Baron Parke in the leading case of Wright v. Tatham, 7 Ad. & E. 313, 388-389, 112 Eng.Rep. 488, 516-17 (1837):

"* * * proof of a particular fact which is not of itself a matter in issue, but which is relevant only as implying a statement or opinion of a third person on the matter in issue, is inadmissible in all cases where such a statement or opinion not on oath would be of itself inadmissible."

See Morgan, Hearsay Dangers and the Application of the Hearsay Concept, 62 Harv.L.Rev. 177, 190-192 (1948); McCormick, Evidence § 229 (1954), and cases cited. The Government, not seriously challenging this, argues that the evidence was nevertheless admissible since, without regard to the truth of the implicit assertion, it showed that when Coady dealt with Barash, he expected to be paid. It is true enough that evidence admissible for one purpose is not rendered inadmissible "because it does not satisfy the rules applicable to it in some other capacity and because the jury might improperly consider it in the latter capacity," and that under such circumstances the opponent of the evidence will not prevail by interposing a general objection and is entitled only to a limiting instruction on timely request. 1 Wigmore, Evidence § 13, at 300 (3d ed. 1940); Malatkofski v. United States, 179 F.2d 905, 914 (1 Cir. 1950); United States v. Smith, 283 F.2d 760, 764 (2 Cir. 1960), cert. denied, 365 U.S. 851, 81 S.Ct. 815, 5 L.Ed.2d 815 (1961); United States v. Mont, 306 F.2d 412, 415-416 (2 Cir.), cert. denied, 371 U.S. 935, 83 S.Ct. 310, 9 L.Ed.2d 272 (1962). But here Coady's state of mind was irrelevant unless induced by Barash, a fact as to which the Lupescu story was hearsay; it was thus inadmissible for any purpose. Since the evidence was highly material and the jury cannot realistically be supposed to have considered it only in relation to the bribery count, the convictions on both Coady counts would have to be reversed if they stood alone.⁴

Another error occurred in the course of cross-examination of Clyne. When defense counsel asked if he had ever threatened Barash, Clyne answered in the negative. Counsel then proceeded to cross-examine on the basis of tape recordings, furnished to him by the Government, which Coady had made of a "bull-session" at a hotel between himself, Clyne and another corrupt agent, wherein Clyne frankly revealed his practice of putting pressure on accountants to pay off. In sharp contradiction of what Clyne had just testified and in support of what Barash was later to testify, counsel developed, without objection, that Clyne boasted of having told Barash he was "getting away with murder"; that on discovering Barash was trying to have some audits done without paying off, Clyne told him he had cut his throat in Clyne's group; that he complained of how in another case Barash had beaten him out of fifty dollars,⁵ and on this or another occasion Clyne had asked $150 but got only $100; and that he had compared Barash unfavorably with Eugene Kenner, see 354 F.2d 780, who "when he comes in on a case, you never have to ask him." Inexplicably a question whether Clyne remembered having told Coady "you get your money's worth with Gene Kenner; you'll get robbed * *," triggered an...