510 F.2d 69 (2nd Cir. 1975), 1179, United States v. Cirami

Docket Nº:1179, Docket 74--1492.
Citation:510 F.2d 69
Party Name:UNITED STATES of America, Appellee, v. Salvatore CIRAMI and James Cirami, Appellants.
Case Date:January 24, 1975
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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510 F.2d 69 (2nd Cir. 1975)

UNITED STATES of America, Appellee,


Salvatore CIRAMI and James Cirami, Appellants.

No. 1179, Docket 74--1492.

United States Court of Appeals, Second Circuit

January 24, 1975

Argued July 16, 1974.

Certiorari Denied May 12, 1975.

See 95 S.Ct. 1952.

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Robert E. Scher, New York City (Raphael, Searles, Vischi, Scher, Glover & D'Elia, New York City, on the brief), for appellants.

Richard B. Buhrman, Atty., Tax Div., U.S. Dept. of Justice, Washington, D.C. (Scott P. Crampton, Asst. Atty. Gen., Ernest J. Brown, Crombie J. D. Garrett, Attys., Tax Div., U.S. Dept. of Justice, Washington, D.C., and Edward J. Boyd, U.S. Atty. for the Eastern District of New York, on the brief), for appellee.

Before MULLIGAN and WINTER, [*] Circuit Judges, and NEWMAN, [**] District Judge.

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NEWMAN, District Judge:

Salvatore and James Cirami appeal from multi-count convictions for revenue law violations. The appellants are principal officers of Air Package Distribution Service Ltd. (hereinafter 'the corporation'), a trucking company that provides pickup and delivery service to airlines. The corporation sought to classify its truck drivers as independent contractors, rather than employees, thereby attempting to evade its obligation for paying taxes imposed by the Federal Insurance Contributions Act (social security) and the Federal Unemployment Tax Act.

A nineteen-count indictment charged the Ciramis with three sets of violations. Counts 1 through 14 alleged that they attempted to evade social security taxes due for fourteen calendar quarters in 1967 through 1970 by filing false and fraudulent employer's quarterly tax returns understating the amount of taxable wages paid, in violation of 26 U.S.C. § 7201 and 18 U.S.C. § 2. Counts 15 through 17 alleged similar violations with respect to attempted evasion of federal employment taxes for the years 1967, 1968, and 1969. Counts 18 and 19 alleged that the appellants, in violation of 26 U.S.C. § 7206(2), aided and assisted in the preparation of false United States Information Returns (form 1099) for the years 1968 and 1969, which stated that the recipients of payments from the corporation were independent contractors rather than employees. After a trial before Judge Mark A. Costantino and a jury, appellants were convicted on eighteen of the nineteen counts, Count 16 having been dismissed. Appellants were sentenced to pay fines on each of the eighteen counts resulting in conviction, and were also placed on probation.

Appellants' attack upon the sufficiency of the evidence is without merit, and no useful purpose would be served by detailing the circumstances from which the jury was abundantly justified in concluding, under unchallenged and proper instructions, that the truck drivers were regular employees of the corporation and that both appellants wilfully participated in the attempt to evade corporate taxes by filing false returns that concealed the employee status of the drivers.

The principal issue on appeal arises because of a mistake made by the Government in drafting for the Grand Jury's consideration the first seventeen counts of the indictment. Count 1, set out in full in the margin, 1 was drafted in an effort to follow the standard form for alleging attempted evasion of corporate taxes by responsible corporate officials. The manner of attempted evasion was alleged to be the filing by the appellants of false employer's quarterly returns. The falsity was alleged by comparing the wages reported to have been paid some employees and the taxes due thereon with the higher amount of wages actually paid to all employees and the corresponding higher amount of taxes due thereon. The mistake occurred when it was alleged that the higher amount of

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taxes was owed by the appellants, rather than by the corporation. After alleging the correct amount of wages to be $39,401.82, Count 1 continued: 'upon which wages the defendants owed to the United States of America federal income taxes withheld from wages and Federal Insurance Contributions Act taxes due in the total amount of $3,467.36.' The deletion of the quoted words, and of corresponding language from Counts 2 through 17, upon motion by the Government after it had rested, is challenged by appellants as...

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