United States v. Miller

Decision Date19 April 1974
Docket NumberNo. 73-1509.,73-1509.
Citation491 F.2d 638
PartiesUNITED STATES of America, Plaintiff-Appellant, v. Irving E. MILLER and Frederick T. Hyman, Defendants-Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

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William L. McCulley, Dept. of Justice, Miami, Fla., Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Willard McBride, Attys., Tax Div., Dept. of Justice, Washington, D. C., for plaintiff-appellant.

Daniel S. Pearson, Miami, Fla., John M. Robertson, Orlando, Fla., for defendants-appellees.

Before TUTTLE, GEWIN and RONEY, Circuit Judges.

Rehearing and Rehearing En Banc Denied April 19, 1974.

GEWIN, Circuit Judge:

Pursuant to the Criminal Justice Act,1 the Government appeals from an order dismissing 9 counts of a 12 count indictment returned against taxpayer Irving E. Miller and his tax preparer Frederick T. Hyman. In an abbreviated order issued on February 2, 1973, the district court granted a motion to dismiss counts I-IX of the indictment. In a second order rendered the same day, the district court granted defendants' motion to suppress evidence allegedly seized by agents of the Internal Revenue Service (IRS) in violation of the fourth amendment. Unlike the suppression order, the order granting the motion to dismiss the indictment failed to articulate the reasoning upon which it was predicated. Nevertheless, relying upon the grounds advanced in the various motions filed below and reiterated on appeal and the reasoning adverted to in the court's suppression order, we reverse.

I

On August 25, 1972 a grand jury returned a 12 count indictment against Miller and Hyman, charging them in count I with conspiracy to obstruct the lawful functions of the IRS2 and in counts II-IX with making, under penalty of perjury, income tax returns for the years 1962-69 which they did not believe to be true and correct as to every material matter.3 Counts X-XII charged Hyman alone with knowingly and willfully proffering materially false and fraudulent representations with respect to corporate income tax statements filed with the IRS in 1968.4

In response, defendants filed several motions to dismiss the indictment. Count I, the conspiracy charge, was claimed to be vitiated by the failure to enumerate any overt acts which were in themselves unlawful or involved any conduct other than that required by law to be performed. Counts II-V, it was asserted, were time-barred by the 6 year statute of limitations, see 26 U.S.C. § 6531 (1970).5 Defendants maintained that counts VI-IX should be dismissed and portions of count I struck on account of alleged prosecutorial misconduct in attempting, albeit abortively, to subpoena two critical defense witnesses to appear before a New York grand jury investigating a related potential delinquency in an estate tax return the two witnesses had helped to prepare and file.6 This motion was prompted by the fact that at a hearing on a motion to quash the subpoenas before the federal district court in New York, the prosecution attempted to legitimatize its issuance of the subpoenas with the observation that the two witnesses, Louis Feil and Irving Kaye, might be amenable to prosecution under section 7206(1) for preparation of a false return.

Dismissal of counts II-IX was also sought for three additional reasons. Both defendants assigned as fatally defective first, inclusion of the allegation that defendants "caused to be made and subscribed" a return which was false as to a material matter as well as "making and subscribing" such a return, the latter of which alone is expressly proscribed by section 7206(1), and second, inclusion of an allegation in each count that income was reported as gross income while there is no line on the return designated gross income. Third, Hyman alone contended that the counts were fatally defective as to him because he, as a tax preparer, could only be prosecuted under 26 U.S.C. § 7206(2)7 for aiding in the preparation of a false return and could not be prosecuted under section 7206(1) as a "maker" of a return. In addition both defendants maintained that count IV, in omitting an allegation that Miller's 1964 tax return "substantially understated gross income," was insufficient.

Finally, defendants also filed a motion to suppress evidence purportedly seized in violation of the fourth amendment. In response to a summons issued pursuant to 26 U.S.C. § 7602 (1970),8 defendants and IRS agents had agreed by letter that the latter could inspect certain records on premises provided by defendants. Defendants claimed and the district court agreed that by removing some of these records and retaining them for inspection, the IRS agents exceeded the scope of consent granted in the accommodation worked out between defendants and the IRS.

II

We proceed now to a consideration of the issues presented on appeal. As was noted earlier, the order granting the motion to suppress evidence outlines the reasons for the district court's disposition. In contrast, the order dismissing counts I-IX of the indictment is bereft of such reasoning. Consequently, adequate review of the propriety of the district court's action compels an examination of each of the abovementioned grounds proffered in the various motions to dismiss the indictment. We consider them seriatim.

A. Count I — Overt Acts

Count I alleges that from April 15, 1958 until the date of the indictment, defendants conspired to defraud the United States by impeding, impairing, obstructing, and defeating the lawful functions of the IRS. Among other allegedly infirm actions of the defendants, paragraphs 2 through 6 of count I list the following: first, failing to file corporate income tax returns for Egyptian, Inc., as well as for other corporations for which the defendants had the responsibility of filing returns;9 second, falsely representing to IRS agents that such returns had been filed; third, falsely representing that certain payments made by Palm Beach Development Sales Corporation (Palm Beach) inured to the benefit of a second corporation, Concord International, Inc., as opposed to that of Irving E. Miller; fourth, falsely representing that certain payments made by Palm Beach to Creative Realty Corporation were properly reported as income to Concord International, Inc.; and finally, falsely representing that numerous documents submitted to the IRS for inspection came into existence on dates in advance of those upon which the documents were actually prepared. Each of the 12 overt acts enumerated in count I, however, while chronicling the course of conduct pursued by defendants failed to allege that such conduct was unlawful. Representative of those listed is overt act number one: "On or about July 18, 1966, the defendants prepared and filed, and caused to be filed, with Internal Revenue Service an individual income tax return of Irving E. and Shirley L. Miller for the calendar year 1962." The omission of an allegation of unlawful preparation in each of the designated overt acts prompted defendants to move to dismiss count I.

Mindful of the principle that the sufficiency of an indictment is to be tested by practical not technical considerations, see Robbins v. United States, 476 F.2d 26, 30 (10th Cir. 1973); United States ex rel. Harris v. State of Illinois, 457 F.2d 191, 197 (7th Cir.), cert. denied, 409 U.S. 860, 93 S.Ct. 147, 34 L. Ed.2d 106 (1972); United States v. Missler, 414 F.2d 1293, 1297 (4th Cir. 1969), cert. denied, 397 U.S. 913, 90 S.Ct. 912, 25 L.Ed.2d 93 (1970), we conclude that count I is not insufficient for the reasons assigned by defendants. The overt acts alleged, when read in conjunction with paragraphs 2 through 6 of count I, sufficiently apprise the defendants of the unlawful conduct with which they are charged.

B. Counts II-V — Statute of Limitations

Counts II-V allege that on or about July 18, 1966, defendants filed, under penalty of perjury, income tax returns for the years 1962-66 inclusive, which returns they did not believe to be true and correct as to every material matter. Although as to these counts, the indictment returned on August 25, 1972 was ostensibly time-barred by the 6 year statute of limitations set forth in 26 U. S.C. § 6531 (1970), the Government had invoked that section's 9 month extension provision which stipulates that the filing of a complaint before a Commissioner within the 6 year period extends the time within which an indictment may be obtained after the complaint is filed for an additional 9 months. Defendants seek to vitiate the effect of the extension provision on two grounds. First, construing section 6531 to read that the grace period can be availed of only when a complaint is obtained at a time when an empaneled grand jury is not or cannot be brought into session, defendants point to the fact that at several times before the Government filed its complaint, an empaneled grand jury could have been called into session.10 Second, they claim that the complaint, in failing to set forth the precise amount of taxes unreported, was not sufficiently specific to establish probable cause. Under Jaben v. United States, 381 U.S. 214, 85 S.Ct. 1365, 14 L.Ed.2d 345 (1965), it is argued that this latter deficiency would defeat the triggering of the extension of the limitations period.

Defendants' construction of section 6531 is untenable. In Jaben v. United States, 381 U.S. 214, 219, 85 S. Ct. 1365, 1368, 14 L.Ed.2d 345, 350 (1965), the Supreme Court announced that the statute was "intended to deal with the situation in which the Government has its case made within the normal limitations period but cannot obtain an indictment because of the grand jury schedule." And in adumbrating the meaning of this language, Justice Goldberg noted in a concurring opinion that the purpose of the extension provision "is to avoid penalizing the Government when a criminal defendant cannot...

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