Alker, In re

CourtUnited States State Supreme Court of Pennsylvania
Writing for the CourtBefore CHARLES ALVIN JONES; PER CURIAM
Citation157 A.2d 749,398 Pa. 188
PartiesIn re Harry J. ALKER, Jr. Appeal of Harry J. Alker, Jr.,
Decision Date19 January 1960

Page 749

157 A.2d 749
398 Pa. 188
In re Harry J. ALKER, Jr.
Appeal of Harry J. Alker, Jr.,
Supreme Court of Pennsylvania.
Jan. 19, 1960.

The opinion of President Judge Klein follows:

We always undertake with grave concern and great reluctance the matter of deciding whether we shall strike the name of an attorney from the roll of the members of our Bar. This is especially true when, as in the present case, the lawyer is a man of advanced age and has practiced his profession for a great many years. Fortunately, we are rarely compelled to perform this unpleasant duty.

In the present case, however, the proof of the misconduct of Harry J. Alker, Jr., the respondent, is clear, preponderant and convincing. The facts are uncontradicted. He manifestly used the experience he acquired as an attorney not only to debase his profession but also to deceive the courts, of which he was an officer, and to betray the interests of his clients. He has been convicted twice of criminal charges by juries in the United States District Court for the Eastern District of Pennsylvania, and is now confined in prison at Lewisburg, Pennsylvania, for these offenses.

Harry J. Alker, Jr., was indicted by a Federal Grand Jury on April 11, 1955, on four counts under 26 U. S. C. ((1939) Ed.) Section 145(b) for willfully and knowingly attempting to evade and defeat income taxes due by him for the calendar years 1947 to 1950, inclusive, by filing false and fraudulent tax returns, thereby violating the Internal Revenue Code, and was found guilty on all four counts on September 26, 1956, by a jury before the Honorable Francis L. Van Dusen after a trial which lasted twenty-one days.

The Trial Judge imposed a sentence of one year and one day and a fine of $10,000 on each of the first three counts, the sentences of imprisonment to run concurrently. On the fourth count the court imposed

Page 750

a sentence of three years to run consecutively with the sentence on the first three counts. On this count sentence was suspented and defendant placed on probation. An appeal was taken to the United States Court of Appeals for the Third Circuit, United States v. Alker, 260 F.2d 135 which affirmed the action of the District Court on September 10, 1958. A petition for writ of certiorari was denied by the Supreme Court of the United States on February 24, 1959, 359 U.S. 906, 79 S.Ct. 579, 3 L.Ed.2d 571.

The following facts were developed at the trial: During the years 1947, 1948, 1949 and 1950, respondent had received income vastly in excess of what he reported on his Federal Income Tax Return. This income was realized from legal fees, director's fees, dividends and interest. In 1949 and 1950 he also had small capital gains. Except for 1947, small losses from certain rental properties were claimed and allowed. Taking all these items into account, and subtracting therefrom all the deductions and exemptions claimed by respondent, it was shown that he had evaded $178,998.57 in taxes over the course of four years on unreported income of $341,784.95. The following chart, found in the opinion of the Court of Appeals (United States v. Alker, 3 Cir., 260 F.2d 135, 141), gives a breakdown by years of respondent's unreported income and tax evasion:

 Net Income
                Year Reported Corrected Additional
                1947 ($11,238.54)* $ 79,450.88 $ 90,689.42
                1948 ($10,204.29) 46,968.85 57,173.14
                1949 $14,975.77 20,171.37 5,195.60
                1950 ($27,512.02) 161,224.77 188,736.79
                 ------------- ----------- -----------
                Totals ($33,979.08) $307,815.87 $341,794.95
                 ------------- ----------- -----------
                 Tax Liability
                Year Reported Corrected Additional
                1947 --0-- $ 46,131.71 $ 46,131.71
                1948 --0-- 20,900.71 20,900.71
                1949 $ 3,643.11 5,888.57 2,245.46
                1950 --0-- 109,720.69 109,720.69
                 ------------- ----------- -----------
                Totals $ 3,643.11 $182,641.68 $178,998.57
                 ------------- ----------- -----------
                

---------------

* ( ) indicates loss.

The component figures from which the income chart was prepared were obtained from respondent's own books, from statements and schedules prepared by respondent in the handling of various estates, and from testimony of clients who had paid respondent legal fees. Indeed, in his brief filed in support of his appeal, he conceded that the income figures which appear above are substantially correct.

In his 1947 return, he declared that he had filed a return for 1946, when, in fact, he had not done so. He did not file returns for 1949 and 1950 until he knew an investigation of his returns was under way. Alker's own books clearly reflected the undisclosed amounts and established that he consistently understated his income in substantial amounts. That he intentionally and willfully understated his income for the express purpose of defrauding the United States of income taxes which he owed can hardly be doubted by any reasonable person.

The respondent was again indicted by a Federal Grand Jury on March 8, 1956, on three counts, charging him with:

'1. Willfully and knowingly attempting to evade and defeat a large part of the estate taxes imposed upon the Estate of Winfred S. Hurst, deceased, by filing a false and fraudulent estate tax return, wherein the cash on hand was grossly understated--in violation of 26 U.S.C. § 894(b)(2)(c) (I.R.C.1939).

'2. Of presenting to representatives of the Secretary of the Treasury, on April 7, 1955, certain documents known by Alker to be false and fraudulent as to material matters relating to said Estate--in violation of 26 U.S.C. § 7207 (I.R.C.1954).

'3. Of presenting to representatives of the Secretary of the Treasury, on April 29, 1955, certain documents known by Alker to be false and fraudulent as to material matters relating to said Estate--in violation of 26 U.S.C. § 7207 (I.R.C.1954).'

Page 751

Alker was found guilty on all three counts on April 8, 1957, by a jury before Honorable C. William Kraft, Jr., after a trial which lasted eleven days. On September 19, 1957, he was sentenced to imprisonment for six months, on each of the three counts, all sentences to run concurrently, and fines of $8,000, on count one, and $1,000, on each of counts by two and three were imposed.

An appeal was taken to the United States Court of Appeals for the Third Circuit, which on May 15, 1958, confirmed the judgment and commitment of the District Court as to count one. After the appeal was filed, but before argument was heard, the Government agreed to dismiss counts two and three for policy reasons which had no bearing on the underlying facts of the case.

A petition for a writ of certiorari was denied by the Supreme Court of the United States. At present a motion for a new trial, based upon alleged newly discovered evidence, is pending in the United States District Court.

The following facts were developed at the trial of this case: Alker acted as executor and trustee, as well as counsel, for the estate of Winfred S. Hurst, who died November 7, 1949. On November 8, 1949, respondent and four of the beneficiaries under decedent's will met in decedent's office. Respondent opened decedent's safe and removed therefrom seven packages of money totalling $35,000, which he took with him. This fact was verified by three of the beneficiaries present at the time.

On February 5, 1951, respondent filed a Federal Estate Tax return for the estate in which the $35,000 was not included as an asset of the estate and a fictitious debt of $3,000 was listed.

Alker thereupon embarked upon a persistent course of lies and deceit to cover up his fraudulent failure to include the $35,000 as an asset of the estate in his tax return. He...

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