U.S. v. Pinto

Decision Date29 January 1988
Docket NumberNos. 87-1023,87-1045,s. 87-1023
Citation838 F.2d 426
Parties-647, 88-1 USTC P 9154, 24 Fed. R. Evid. Serv. 720 UNITED STATES of America, Plaintiff-Appellee, v. Arloha Mae PINTO, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Marcel Samuel LAMBERT, Defendant-Appellant.
CourtU.S. Court of Appeals — Tenth Circuit

Linda L. Sybrant, Sp. Asst. U.S. Atty., Kansas City, Mo. (Benjamin L. Burgess, Jr., U.S. Atty., Kansas City, Kan., with her on the brief), for plaintiff-appellee.

James L. Eisenbrandt, Morris, Larson, King and Stamper, Overland Park, Kan., for defendant-appellant Arloha Mae Pinto.

Bruce C. Houdek, James, Millert, Houdek, Tyrl & Sommers, Kansas City, Mo., for defendant-appellant Marcel Samuel Lambert.

Before MOORE, McWILLIAMS and BALDOCK, Circuit Judges.

BALDOCK, Circuit Judge.

On April 1, 1986, defendant-appellant Marcel Samuel Lambert (Lambert) and his wife, defendant-appellant Arloha Mae Pinto (Pinto), were named in a seven-count indictment. They were jointly charged with one count of conspiring to defraud the United States, in violation of 18 U.S.C. Sec. 371, and one count of falsifying a tax return, in violation of 26 U.S.C. Sec. 7206(1) and 18 U.S.C. Sec. 2. Defendant Lambert also was charged with five counts of tax evasion, in violation of 26 U.S.C. Sec. 7201.

A jury found defendants guilty on all counts. The court sentenced defendant Lambert to seven consecutive two-year terms of imprisonment and defendant Pinto to concurrent three-year terms of imprisonment. Both defendants appeal, contending that: 1) the evidence was insufficient to support the convictions; 2) the trial court erroneously admitted co-conspirator hearsay; 3) there was a fatal variance, as to the conspiracy count, between the indictment and the evidence presented at trial; 4) the trial court erred in denying severance; 5) the conspiracy count should have been dismissed because the statute of limitations had expired; and 6) the trial court failed to give defendants' instruction regarding their theory of defense and improperly instructed the jury regarding the cash expenditure method of proving tax evasion. We affirm.

The rather complex factual background of these cases will be briefly summarized, with additional facts discussed as they pertain to the issues raised by defendants. At trial, the government presented its case in two parts, initially introducing evidence pertaining to the joint charges of conspiring to conceal taxable income derived from the sale and distribution of marijuana in 1977 and of claiming a false home mortgage interest expense on Pinto's 1980 tax return. The essence of the government's theory was that defendants concealed $150,000 in marijuana income by using cash to purchase the first in a series of three homes and later obtaining sham mortgages to create the appearance that the purchase money came from loans.

Marty Ritschel and Michael Bono testified that they purchased substantial quantities of marijuana from Lambert over an approximately two-year period commencing in 1976. Sally Robinson Wells testified that in September of 1977, Lambert "fronted" 300 pounds of marijuana to her former husband, Bruce Robinson, and another man. Robinson testified that the bales were weighed in defendants' basement and transported in Lambert's car to a "stash" house. The marijuana was then stolen. Soon after the theft was discovered, the parties to the transaction held a meeting, at which time Pinto demanded payment for the stolen marijuana and identified the lost $100,000 as hers.

Regarding the series of real estate transactions, it was revealed that during the final two months of 1977, Pinto took $149,000 in cash and purchased eighteen cashier's checks from sixteen different banks in the Kansas City area. With the cashier's checks, $1,154.66 in cash and a mortgage in favor of the builder, Pinto bought a $190,500 home in Leawood, Kansas. Neither Pinto nor Lambert reported the $150,000 on their respective 1977 income tax returns. In November of the following year, defendants sold the house. With the proceeds from that sale, plus an additional $31,960.19 in cash, Pinto purchased outright a second home in Leawood for $220,050. On December 5, 1978, Pinto presented her realty company with a $150,000 note and mortgage, which had been executed in favor of a Cayman Islands corporation formed by Lambert, and requested that a lien be filed against the residence she had purchased outright the previous month.

In early 1980, defendants bought yet another residence, again in Leawood. The mortgage on the second home was rolled over into a new note in favor of the offshore corporation. On March 25, 1981, Pinto filed her 1980 income tax return and reported a deductible home mortgage interest expense of $20,424.00, an amount arrived at by computing interest on the $150,000 note. Defendants sold the third residence in November of 1985. On November 8, 1985, they gave the title insurance company a Deed of Release, dated November 20, 1984, which stated that the second mortgage was released "in consideration of the full payment" of the debt.

Following a summary of the evidence admitted on the joint charges, the government, employing the cash expenditure method of proof, endeavored to prove the tax evasion charges filed against Lambert. An analysis of defendants' financial activities for the years 1974 through 1978 established that they spent $115,913.96 more cash than they had available, signifying that Lambert did not have an appreciable amount of cash on hand in 1979, the beginning of the indictment period. The government then analyzed the tax years 1979 through 1983 and established that Lambert's cash expenditures far exceeded his reported income.

Additional evidence was presented to show that Lambert took steps to conceal income and thereby evade the payment of taxes. The government established that Lambert dealt almost exclusively in cash, and that among his sizeable cash expenditures were the purchases a number of automobiles, none of which were registered in his name or titled in the state of Kansas. In 1980, Lambert directed his brother, who was preparing their parents' estate tax returns, to report a non-interest bearing loan of $50,000, which Lambert represented their father had made to him in 1976, and also to report $60,000 cash on hand, an amount which Lambert represented had been given to him by their parents.

I.

Both defendants strenuously argue that the evidence was insufficient to support their convictions. Our standard for evaluating the sufficiency of the evidence is well established. We view all the evidence, both direct and circumstantial, together with the reasonable inferences to be drawn therefrom, in the light most favorable to the government. United States v. Hooks, 780 F.2d 1526, 1529 (10th Cir.), cert. denied, 475 U.S. 1128, 106 S.Ct. 1657, 90 L.Ed.2d 199 (1986). We then must determine whether a reasonable jury could find the defendants guilty beyond a reasonable doubt. Id. at 1531.

A.

Defendant Lambert claims that the evidence was insufficient to show that he had substantial income from the sale and distribution of marijuana. In a related argument, defendant Pinto asserts that the evidence was insufficient to show that she intended to join a conspiracy to evade taxes on that income.

It is true, as defendants point out, that the Internal Revenue Service (IRS) agents who testified were unable to state the amount of defendants' income from drug trafficking. Nevertheless, there was substantial evidence to support the jury's conclusion that defendants derived a significant amount of income from the sale and distribution of marijuana. At one time, Lambert described himself as the "main man" for supplying marijuana in Kansas City. Ritschel testified that he had paid Lambert more than $200,000 for the marijuana that he had purchased between 1976 and 1978. Bono testified that he had purchased marijuana from Lambert on six occasions, each time buying quantities of twenty-five to fifty pounds at a price of $285 per pound. That testimony, along with other evidence indicating that defendants dealt almost exclusively in cash and failed to report the $150,000 used to purchase the first residence, supports a reasonable inference that the funds used by Pinto to purchase the residence were derived from the sale of marijuana.

In arguing that the government failed to show that she had the requisite intent to join the conspiracy, defendant Pinto similarly alleges that there was no evidence of marijuana income, and in addition asserts that there was no evidence to show that she had knowledge of marijuana profits realized by Lambert or of the illegitimate nature of the two mortgages. We cannot agree. Contrary to Pinto's assertion, she does not stand convicted without proof of her knowledge of the conspiracy's objective or solely because of her relationship with Lambert. See, e.g., United States v. Jones, 808 F.2d 754, 756 (10th Cir.1987); United States v. McMahon, 562 F.2d 1192, 1196-97 (10th Cir.1977).

"The essence of the crime of conspiracy is an agreement to violate the law." United States v. Troutman, 814 F.2d 1428, 1446 (10th Cir.1987). In a conspiracy prosecution, the evidence must support a finding that the conspirators had a unity of purpose or a common design and understanding. United States v. Kendall, 766 F.2d 1426, 1431 (10th Cir.1985), cert. denied, 474 U.S. 1081, 106 S.Ct. 848, 88 L.Ed.2d 889 (1986). The existence of an agreement to accomplish an unlawful objective "may be inferred from a 'development and a collocation of circumstances.' " United States v. Pack, 773 F.2d 261, 265-66 (10th Cir.1985) (quoting Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942)).

The government was required to show that Pinto knew of the conspiracy to evade taxes on marijuana profits and knowingly participated in the conspiracy. United States v....

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