Gleckman v. United States
| Decision Date | 26 November 1935 |
| Docket Number | No. 10203,10302.,10203 |
| Citation | 80 F.2d 394 |
| Parties | GLECKMAN v. UNITED STATES (two cases). |
| Court | U.S. Court of Appeals — Eighth Circuit |
Patrick J. Ryan, of St. Paul, Minn., for appellant.
Linus J. Hammond, Asst. U. S. Atty., of St. Paul, Minn. (George F. Sullivan, U. S. Atty., of St. Paul, Minn., and Earl C. Crouter, of Washington, D. C., Atty., Department of Justice, on the brief), for the United States.
Before GARDNER, WOODROUGH, and FARIS, Circuit Judges.
Appellant was convicted for willfully attempting to evade and defeat a large part of his income taxes for the year 1929 (under the first count of the indictment) and for the year 1930 (under the second count), by making false returns of his income for those years and paying thereon less than the amount of income tax due from him to the government, in violation of 26 U.S.C.A. § 2146 (b) now 26 U.S.C.A. § 145 and note. He contends that the evidence was insufficient to sustain a conviction on either of the first two counts of the indictment upon which he was found guilty and sentenced to eighteen months imprisonment and $5,000 fine and costs, the sentences to run concurrently and not consecutively.
It appears that for many years prior to and during the calendar year 1929, Leon M. Gleckman was a citizen of the United States and was a resident of and had his principal place of business at St. Paul, Minn. Prior to 1926, he had never made any returns for income tax purposes, but in 1928 he made returns for the years 1925, 1926, and 1927, showing a lump sum net income without details of $15,000 for each year and paid tax thereon. During 1929 he was a married man, living with his wife, and had three dependents, and his regular annual accounting period for income tax purposes was on the basis of the calendar year and not on the basis of the fiscal year. He was the president of and a stockholder in the Republic Finance Company, a corporation, and drew a salary from that corporation during the year. He also received a profit from sales of stocks and bonds and received rents from property owned by him. These items of salary, stock sales profits, and rents totaled something over $11,000, from which he was entitled to deductions on account of expenses, interest, taxes, and charitable contributions. He made a sworn joint return for himself and his wife of gross income $11,167.78, and deductions of $992.09, leaving net income $10,175.69, calling for $49.02 total tax, which he paid.
In the year 1930 he drew a salary from the Republic Finance Company, received rents from property owned by him, and derived profits from the sale of stocks and bonds; the three items of income amounting to $9,236.56. During this year, however, before any return for tax was made, a tabulation was obtained from the banks where Mr. Gleckman did business, reflecting that many deposits had been entered to his credit during the year, amounting in the aggregate to a large sum of money, and on account of such bank deposits Mr. Gleckman added to the sworn joint return of himself and his wife for the year "income from business, $5,286.53." This sum added to the above $9,236.56 made the return for the year 1930 $14,523.09, from which he took deductions on account of interest, taxes, and contributions in the sum of $2,091.25, leaving taxable net income $12,431.84, producing a total tax of $185.57, which he paid.
An internal revenue auditor, Mr. Schall, was subsequently assigned to make an audit of the returns for the years 1929 and 1930 and called upon Mr. Gleckman for his books and papers. Mr. Gleckman had kept no records of account of his business reflecting his true income or affording means for the computation thereof, but as he had done business with the Foshay State Bank and the Commercial State Bank, he directed Mr. Tankenoff, a public accountant, and the supervising bookkeeper of the Republic Finance Company, to assist the government's agent to get the bank records and to aid in checking the taxable income. They did not obtain the deposit slips from the Foshay State Bank covering all of the year 1929, but had the record of deposits in that bank for the period from August 23, 1929, to November 1, 1929. The Foshay Bank having failed about that time, Mr. Gleckman's account in the Commercial State Bank became more active and they had the record of numerous deposits in his account at that bank during November and December, 1929. Mr. Tankenoff and the government agent worked together for a period of several weeks attempting to trace to their source the many items which Mr. Gleckman had deposited in the banks in order to eliminate all items which were receipts from capital or other nontaxable transactions. By the production of checks and otherwise, many items shown to have been deposited in the bank account of Mr. Gleckman were explained as arising out of capital or nontaxable transactions and were eliminated. Mr. Tankenoff and the government agent each made up a work sheet covering the numerous items considered by them and arrived at a balance of $18,036 additional net income for the year 1929 over the amount which had been returned for that year by Mr. Gleckman. The agent proposed excess assessment in that amount, and although Mr. Gleckman said that if he had more time and wanted to go to a great deal more expense he could remember more of the bank deposits, and his attorney declared, in his presence, that Mr. Gleckman did not owe the additional tax; Mr. Gleckman paid the proposed deficiency tax assessment, together with added negligence penalty of 5 per cent. before final assessment, was made. Before the auditor Schall had completed his audit of Mr. Gleckman's return for the year 1930, he was succeeded by another auditor, Mr. Sullivan, and the subsequent investigations revealed very numerous receipts of money by Mr. Gleckman and deposits made by him during each of the years 1929 and 1930, aggregating large sums which had not been disclosed by him. This prosecution followed.
In the first count of the indictment, which charges the willful attempt to evade the income tax for the year 1929, it is alleged that the "defendant had and received gross income" for that year "amounting to more than $5,000.00, towit: $164,924.38, derived as follows:
Salary $ 7,475.00
Income from business 153,539.79
Unidentifiable income deposited
in banks (eliminating
transfers of funds, loan
transactions, salary and
rent items)
Foshay State Bank $ 71,838.04
Commercial State Bank 21,068.54
Received under false, fictitious
and assumed name
of Abraham Wynehouse 15,000.00
Collected through Journal
Square National Bank
Jersey City, New Jersey 7,500.00
Unidentifiable income not
deposited in banks and
disbursed through
Havana, Cuba 5,000.00
Bennett & Co. 5,800.00
Sam Fink 15,175.00
Republic Finance Company 13,000.00
___________
Total $154,381.58
Less business expenses 841.79
___________
$153,539.79
Income from partnership — University
Cleaners & Dyers 680.87
Rents 1,160.94
Sale of Stocks and Bonds 2,067.78
___________
Total Income $164,924.38."
In the figures so set out there is included a charge that he had understated his salary income in his return for 1929 in the amount of $975 and that he had received the sum of $680.87 from University Cleaners & Dyers, a partnership of which he was a member, and had not included the item in his return.
In response to an order for bill of particulars, the District Attorney presented in great detail an itemized list of all the deposits made in Gleckman's accounts at the two banks during the years 1929 and 1930 and explained that the government had been able to ascertain that some deposits made by Mr. Gleckman during these years did not represent income and were, therefore, eliminated. He also specifically described many other items of deposit and identified them by their source so far as known to the government. As to the four items of "unidentifiable income" referred to in this count as "not deposited in banks" aggregating $38,975, it was stated in the bill of particulars that the income "consists of moneys received by the defendant as evidenced by the fact that he used the same for his own use and benefit" and the manner in which he so used them was set forth in detail. But it was repeated throughout the bill of particulars that "the nature of the transactions whereby they (the various items of receipts and deposits) were received are more peculiarly within the knowledge of the defendant than the government, and, cannot, therefore, now be stated." No objection was made to the bill of particulars so presented.
It appeared on the trial that there had been deposits made to the credit of Mr. and Mrs. Gleckman in the two banks during 1929 amounting to $156,822.06, of which the auditor was able to trace and eliminate $63,915.48 as nontaxable loans, stock and bond transactions, and rents and salary items, leaving a balance of untraceable cash and unexplained deposits of $92,906.58.
It also appeared that Mr. Gleckman had received the two items of $15,000 and $7,500, respectively, referred to in the first count of the indictment, and as to three of the other items "not deposited in banks" identified as Havana, Cuba, $5,000, Bennett & Co., $5,800, Republic Finance Company $13,000, it appeared that Mr. Gleckman had...
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