866 F.2d 28 (2nd Cir. 1989), 321, United States v. Rooney

Docket Nº:321, Docket 88-1250.
Citation:866 F.2d 28
Party Name:UNITED STATES of America, Appellee, v. Patrick ROONEY, Appellant.
Case Date:January 10, 1989
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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866 F.2d 28 (2nd Cir. 1989)

UNITED STATES of America, Appellee,


Patrick ROONEY, Appellant.

No. 321, Docket 88-1250.

United States Court of Appeals, Second Circuit

January 10, 1989

Argued Nov. 4, 1988.

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Judd Burstein, New York City (Michael R. Gavenchak, Ruth M. Liebesman, Ilisa T. Fleischer, Law Student, of counsel), for appellant.

Baruch Weiss, Asst. U.S. Atty. (Rudolph W. Giuliani, U.S. Atty., S.D.N.Y., Celia Goldwag Barenholtz, Asst. U.S. Atty., of counsel), for appellee.

Before OAKES and NEWMAN, Circuit Judges, and MUKASEY, District Judge. [*]

OAKES, Circuit Judge:

This case involves a tawdry, though profitable, tax fraud scheme involving gifts to charity. The charity accepted checks from "contributors" and returned to them cash equal to 90% of the face amount of each check. The contributors then claimed a charitable deduction for the full amount of the check, and the charity kept its 10% cut. The charity profited by 10% of the face amount of the gifts, and the contributors profited by taking unlawful tax deductions for the other 90%.

Patrick Rooney contributed to this scheme through his corporation in 1980 and personally in 1983, and he profited at the expense of the internal revenue. He was convicted of two counts in a three-count superseding indictment. The first count charged conspiracy with a branch of the charity, the second count (on which he was acquitted 1) charged tax evasion, and the third count charged the filing of a false statement (regarding his charitable contributions) on his 1983 joint tax return. Rooney was sentenced in the United States District Court for the Southern District of New York, Louis L. Stanton, Judge, to four

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months' imprisonment on the false statement count. Judge Stanton suspended imposition of sentence on the conspiracy count, placed Rooney on probation for a term of three years, and ordered him to pay a $50,000 fine and to perform 300 hours of community service.

On appeal, Rooney argues that the evidence was insufficient to prove venue on the false statement count and that the trial court erred in taking the issue of venue away from the jury; that there was a fatal variance between the single conspiracy alleged in the indictment and the proof, which he claims demonstrated the existence of multiple conspiracies, and that prejudice resulting from evidence introduced on the conspiracy count required a new trial on the false statement count; that the Government obtained the superseding indictment, which added the conspiracy count, solely to gain the admission of prejudicial evidence, thereby abusing prosecutorial responsibility and necessitating a new trial on both counts; and that his prison sentence unconstitutionally punished him for demanding a trial. We affirm.

The Bernice Leavitt-Joseph Toonkel Memorial Branch of the American Cancer Society New York Division, Inc. ("Leavitt-Toonkel") raised money for several years by holding casino night dinner dances at hotels in Manhattan. Approximately two weeks before the annual autumn dinner dances, contributors would write checks to the Society. With the connivance of Leavitt-Toonkel fundraising personnel, contributors could pick up cash in an amount equal to 90% of the face value of each check the day before or the day of the dinner dance. Thus, the supposed contributor would donate 10% of the amount of the check, but retain a check to substantiate a claim for a charitable deduction in the check's full amount. The scheme worked so well, with so many contributors contributing such large amounts, that for the 1983 dinner dance $1,450,000 in cash was shipped by armored car to the Pierre Hotel for distribution to the contributors, one of whom was appellant Rooney.

Rooney, an accountant, was then a principal in the brokerage firm of Rooney, Pace, Inc., and he had learned about the scheme in 1980 from his partner, Randolph Pace. Pace advised Rooney that he was writing a personal check and thought they should write a corporate check as well. Pace did so, with Rooney's approval, in an amount of $10,000. After Leavitt-Toonkel returned $9,000 in cash, Pace and Rooney apparently shared the cash by adjusting their respective expense account allowances, and their corporation took a $10,000 deduction.

In 1983 Rooney wrote a $50,000 personal check to the American Cancer Society. The day before the dance, Rooney's chauffeur picked up $45,000 in cash at the Pierre Hotel, where the dance was to be held. On Rooney's 1983 personal income tax return he deducted...

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