U.S. v. Horowitz

• Decision Date: 02 April 1985
• Docket Number: No. 84-1214,84-1214
• Citation: 756 F.2d 1400
• Parties: -1267, 85-1 USTC P 9373 UNITED STATES of America, Plaintiff-Appellee, v. Barry Noel HOROWITZ, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1400

756 F.2d 1400

55 A.F.T.R.2d 85-1267, 85-1 USTC P 9373

UNITED STATES of America, Plaintiff-Appellee, v. Barry Noel HOROWITZ, Defendant-Appellant.

No. 84-1214.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 12, 1985.

Decided April 2, 1985.

Gregory C. Diamond, Asst. U.S. Atty., Las Vegas, Nev., for plaintiff-appellee.

William B. Terry, Goodman, Terry, Stein & Quintana, Las Vegas, Nev., for defendant-appellant.

Appeal from the United States District Court for the District of Nevada, Las Vegas.

Before KENNEDY, ALARCON, and NELSON, Circuit Judges.

ALARCON, Circuit Judge:

Barry Noel Horowitz (hereinafter Horowitz) appeals from the judgment entered following his conviction for subscribing to a false income tax return in violation of 26 U.S.C. Sec. 7206(1) (1982).

We must decide whether an indictment may be refiled within six months after the expiration of the statute of limitations under

18 U.S.C. Sec. 3288 (1982) where the earlier accusatory pleading was dismissed for a nonintentional failure to present exculpatory evidence to the grand jury. We have concluded that section 3288 covers a defect in the proceedings before the grand jury such as the nonintentional failure to present exculpatory evidence. We do not reach Horowitz's contention that section 3288 does not apply to intentional prosecutorial misconduct because that issue is not before us on this record.

I ISSUES ON APPEAL

Horowitz raises the following issues on appeal:

One. The district court erred in failing to dismiss the second indictment as outside the statute of limitations.

Two. The district court erred in refusing to dismiss this matter because of preindictment delay.

Three. The district court erred in denying his motion for a new trial because the jury returned inconsistent verdicts.

Four. This court must reverse because of the insufficiency of the evidence.

II PERTINENT FACTS

Appellant Horowitz operated a business known as Cactus Mountain Cleaners (hereinafter Cactus Mountain) in Las Vegas, Nevada. Cactus Mountain was a janitorial service specializing in kitchen clean-up for hotels in the Las Vegas area.

An audit was conducted by the Internal Revenue Service (hereinafter the IRS) as a result of discrepancies between the gross income reported on Cactus Mountain's 1975 corporate tax return, its gross receipts, and the amount of income reported by Horowitz on his 1975 individual return. The audit disclosed a total of $36,590 of unreported income for the 1975 tax year. This unreported income resulted from the cashing of eight checks from the Stardust Hotel, and two checks from the Hacienda Hotel which were not reflected on Cactus Mountain's corporate return or on Horowitz's personal return.

Horowitz was charged with subscribing to a false income tax return in violation of 26 U.S.C. Sec. 7206(1) (Count I), and with aiding and abetting in the preparation and presentation of a false and fraudulent return in violation of 26 U.S.C. Sec. 7206(2) (Count II), in an indictment returned by a federal grand jury on April 17, 1982. ¹ This indictment was dismissed prior to trial on Horowitz's motion, however, because the court found that the government failed to present exculpatory evidence to the grand jury. A second indictment, identical to the April 7 indictment, was returned on October 14, 1982. Because the applicable statute of limitations had in fact expired on April 15, 1982, the second indictment was filed pursuant to 18 U.S.C. Sec. 3288.

Horowitz immediately filed a number of pretrial motions, including a motion to dismiss because the indictment was outside the statute of limitations and a motion to dismiss due to preindictment delay. Both motions were denied. The jury found Horowitz guilty of subscribing to a false income tax return, but acquitted him of aiding and abetting in the preparation and presentation of a false and fraudulent return. Horowitz's post trial motion for the entry of a judgment of acquittal was denied.

III DISCUSSION

A. Application of Section 3288 to a Nonintentional Failure to Present Exculpatory Evidence

Horowitz argues that the second indictment should have been dismissed because section 3288's savings clause was never intended to apply to indictments which Statutory interpretation is a question of law and therefore subject to de novo review. Dumdeang v. C.I.R., 739 F.2d 452, 453 (9th Cir.1984).

were dismissed for legal defects. He contends that section 3288 only applies to indictments which were dismissed because of technical irregularities concerning the grand jury. We disagree.

Section 3288 provides:

Whenever an indictment is dismissed for any error, defect, or irregularity with respect to the grand jury, or an indictment or information filed after the defendant waives in open court prosecution by indictment is found otherwise defective or insufficient for any cause, after the period prescribed by the applicable statute of limitations has expired, a new indictment may be returned in the appropriate jurisdiction within six calendar months of the date of the dismissal of the indictment or information, or if no regular grand jury is in session in the appropriate jurisdiction when the indictment or information is dismissed, within six calendar months of the date when the next regular grand jury is convened, which new indictment shall not be barred by any statute of limitations.

18 U.S.C. Sec. 3288 (1982) (emphasis added).

While the first clause of section 3288 appears to be aimed at dismissals resulting from technical irregularities concerning the grand jury, the second clause is much more general. It expressly brings indictments dismissed for any cause within the scope of section 3288's savings clause. The legislative history of section 3288 supports this broad interpretation of the statute. "The sections [sections 3288 and 3289] concern cases where a new indictment is returned after a prior indictment has been dismissed, because of an error, defect, or irregularity with respect to the grand jury, or because it has been found otherwise defective." S.Rep. No. 1414, 88th Cong., 2d Sess. 1 (1964), Reprinted in 1964 U.S.Code Cong. & Ad.News 3257, 3258 (emphasis added).

Contrary to Horowitz's contention, the phrase "for any cause" does not bar reindictment when the original indictment was dismissed for a legal defect or defects. In United States v. Charnay, 537 F.2d 341 (9th Cir.), cert. denied, 429 U.S. 1000, 97 S.Ct. 528, 50 L.Ed.2d 610 (1976), we held that the statutory provision for reindictment after dismissals "for any cause" allows reindictment after dismissal due to legal defects in the original indictment. "[A] second indictment may properly be returned within the prescribed six-month period where the dismissal of the first indictment is due to a legal defect, as well as in those cases where the dismissal results from defects or irregularities in the grand jury." Id. at 355. This interpretation is in keeping with the purpose of the statute, which is "to prevent the escape of those who had been seasonably indicted, but whose indictment was bad because of some corrigible mistake." Id. (citing United States v. Strewl, 99 F.2d 474 (2d Cir.1938), cert. denied, 306 U.S. 638, 59 S.Ct. 489, 83 L.Ed. 1039 (1939)). See also United States v. Macklin, 535 F.2d 191, 193 (2d Cir.1976) ("Sec. 3288 was meant to apply whenever the first charging paper was vacated for any reason whatever"). We believe Charnay was correctly decided and is fully applicable under these facts.

Horowitz argues that section 3288 should not be applied where the first indictment has been dismissed for intentional prosecutorial misconduct. We cannot decide this question because there is no evidence of intentional prosecutorial misconduct in the record.

It is undisputed that the Assistant United States Attorney (hereinafter AUSA) who originally handled the case promised Horowitz's counsel that certain allegedly exculpatory medical evidence would be presented to the grand jury. Shortly thereafter, the case was reassigned to a second AUSA, who was informed of the agreement concerning the aforementioned medical evidence. When the case was presented to the grand jury, the prosecutor did not present all of the exculpatory evidence in The magistrate expressly found that although the prosecutor failed to present all of the exculpatory evidence to the grand jury as agreed, this failure "was neither flagrant conduct in the sense of its being malicious," nor "intentionally designed to deceive the grand jury's ability to exercise independent judgment." ² He also expressly found that the prosecutor's conduct was negligent and not intentional. The magistrate concluded that the prosecutor's conduct was "corrigible" but fell short of prosecutorial "misconduct." These findings and conclusions were reviewed and then adopted by the district court judge in dismissing the first indictment.

the agreement between the first AUSA and Horowitz's attorney.

The finding that the prosecutor's failure to present exculpatory evidence to the grand jury was negligent but neither malicious nor intentional is factual, and cannot be disturbed unless clearly erroneous. See United States v. McConney, 728 F.2d 1195, 1200 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984); Bohemia, Inc. v. Home Ins. Co., 725 F.2d 506, 508-09 (9th Cir.1984). No evidence was offered by Horowitz to prove that the prosecutor acted intentionally. The record supports the court's finding that the second prosecutor did not intentionally fail to present all exculpatory evidence to the grand jury.

Horowitz also asserts that the failure of the prosecutor to present exculpatory evidence is an abuse of the grand jury system which compels a per se reversal, a dismissal of the indictment, and is a bar to further prosecution.

Although this court has held that "the '[d]ismissal of an indictment is required ... in flagrant cases in which...