Conford v. United States, 7601.

• Court: U.S. Court of Appeals — Tenth Circuit
• Writing for the Court: BREITENSTEIN, HILL and SETH, Circuit
• Citation: Conford v. United States, 336 F.2d 285 (10th Cir. 1964)
• Decision Date: 11 September 1964
• Docket Number: No. 7601.,7601.
• Parties: Ben B. CONFORD, Appellant, v. UNITED STATES of America, Appellee.

336 F.2d 285 (1964)

Ben B. CONFORD, Appellant, v. UNITED STATES of America, Appellee.

No. 7601.

United States Court of Appeals Tenth Circuit.

September 11, 1964.

Verl C. Ritchie, Salt Lake City, Utah (Harden A. Whitney, Jr., Salt Lake City, Utah, on the brief), for appellant.

William T. Thurman, U. S. Atty., for appellee.

Before BREITENSTEIN, HILL and SETH, Circuit Judges.

HILL, Circuit Judge.

Appellant was tried before a jury and convicted on two counts, each charging him with willfully subscribing to and filing a false income tax return.¹ The two counts covered the tax years of 1956 and 1957. The appeal is from that judgment of conviction entered pursuant to the jury verdict.

The two counts of the indictment alleged in substance: That taxpayer omitted from his 1956 return income received from the sale of Mayday Uranium Company stock and Sundown Petroleum Company stock; that he omitted from his 1957 return income received from the sale of Sundown Petroleum Company stock and claimed a long term capital loss for 1957 in the amount of $8,000, which loss had not occurred.

At the outset, we must frankly state that we find little substance to any of the points raised by appellant on this appeal. We reach that conclusion only after a careful reading and consideration of the entire record below, including the many items of documentary evidence. This is simply a factual case, which was well and carefully presented to the jury by the government, with wholly adequate and legally correct instructions given by the trial judge.

During 1956 and 1957 Conford was president of Mayday Uranium Company and vice president of Sundown Petroleum Company. Both corporations were engaged in uranium and oil promotion and development. Closely associated with taxpayer in both corporations was one Robert Crail, who is frequently referred to throughout the testimony in the case but who could not be located by the government prior to trial for the service of a subpoena. As his defense, Conford contended that he was acting only as a nominee or fiduciary for Crail and others in the various stock transactions reflected by the government's evidence; that the proceeds from the many stock sales did not constitute personal income to him for that reason; and that he claimed the long term capital loss alleged in count two of the indictment in good faith and upon advice from his tax consultant.

The government's evidence shows beyond any doubt that many sales of stock were made through stock brokers in the name of Conford. In a few instances Conford clearly did pay the stock sales proceeds to someone else. But, the stockbroker, through whom Conford sold the stock in question, testified on behalf of the government and from his testimony and books and records there is no question about the sale of stock as contended by the government. Conford does contend that the proceeds from these sales went to others and the government admits that some of it did, but only a small portion. Conford's contention in this regard made his bank records important evidence in the case. An examination of those records shows clearly the flow of most of the stock sale receipts into his bank account and they fail to corroborate his assertion that he paid the proceeds out to others. Rather, those proceeds, or at least the greater part of them, were used by Conford personally and constituted taxable income.

During 1956 the evidence shows fourteen sales of Mayday stock by taxpayer, totaling $10,221. The check for one sale in the amount of $874.75 was endorsed by appellant to Crail, one check in the amount of $149.95 was endorsed to Guss Securities Co., one check in the amount of $300 was endorsed to the Mint Cafe and the others in the total amount of $8,896.30 were either deposited to Conford's personal bank account or cashed by him at the bank upon which they were drawn. Another check for the sale of Mayday stock during that year in the amount of $562.25 was made payable to Floyd Golson, taxpayer's brother-in-law. This check was deposited in taxpayer's personal bank account. The evidence further shows seven sales of Sundown stock by Conford through the Guss Securities Co. in 1956. The total of these sales amounted to $5,622.90. One of the checks in the amount of $499.75 was endorsed by Conford to Crail, one in the amount of $224.95 was endorsed by Conford to George Haney, one in the amount of $499.75 was deposited by taxpayer in his personal bank account and the other four checks totaling $4,398.45 were cashed by Conford at the bank upon which they were drawn.

During 1957, there is evidence to show sixteen sales of Sundown stock by Conford totaling $13,774.17. Of this amount, $11,049.47 was deposited by Conford in his personal bank account. The balance, $2,724.60, is shown as cash received during that year. Checks made payable to Crail in the total amount of $2,425 were drawn upon the account during the year. There is also evidence showing payment in the amount of $490 during that year to Floyd Golson from these stock sales. Thus, there was deposited in Conford's bank account or received in cash the net sum of $10,859.17. The claimed long-term capital loss for 1957 pertained to a lease on property in Wyoming for uranium exploration and production. The evidence is clear that such a lease was acquired and held by Conford, but it was not sold and it was not forfeited during 1957. No valid claims for such a loss existed during that year. Conford testified that the loss was claimed for that year upon the advice of his tax consultant, but the latter denied that he gave any such advice to appellant. This conflict merely created a question of fact for the jury and such question was resolved against appellant.

Viewed in the light most favorable to the government² we believe there is substantial competent evidence in the record from which the jury could well find, as it did, that Conford falsified his tax returns for the two years in question.

The government's evidence was presented on the theory of a "specific items" case, which was consistent with the allegations of the indictment. As pointed out by appellant, the government did present evidence to show the receipts and expenditures of...