Cooper v. United States

• Citation: 321 F.2d 274
• Decision Date: 12 September 1963
• Docket Number: No. 19691.,19691.
• Parties: Jack B. COOPER, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

321 F.2d 274 (1963)

Jack B. COOPER, Appellant, v. UNITED STATES of America, Appellee.

No. 19691.

United States Court of Appeals Fifth Circuit.

August 8, 1963.

Rehearing Denied September 12, 1963.

Vincent C. Giblin, Miami Beach, Fla., E. David Rosen, Miami, Fla., Marion E. Sibley, Sibley, Grusmark, Giblin, King & Levenson, Miami Beach, Fla., for appellant.

Daniel S. Pearson, Asst. U. S. Atty., Miami, Fla., Edith House, U. S. Atty., Southern Dist. of Florida, for appellee.

Before TUTTLE, Chief Judge, and JONES and BELL, Circuit Judges.

GRIFFIN B. BELL, Circuit Judge.

Appellant was convicted in 1962 after a non-jury trial in 1961 on a two count indictment charging him with unlawfully attempting to evade the payment of income taxes by the filing of false returns for fiscal years ending in 1953 and 1954.¹ The indictment was returned in 1959.

The case comes here after protracted post trial proceedings seeking in the alternative a judgment of acquittal, or a new trial, or the vacation of the findings of fact, conclusions of law, and the adjudication of guilt to allow the introduction of surrebuttal evidence.

The additional proof was to be offered for the purpose of bolstering a contention that the funds on which appellant failed to pay taxes were embezzled, and thus to afford escape under the umbrella of Commissioner v. Wilcox, 1946, 327 U.S. 404, 66 S.Ct. 546, 90 L.Ed. 752. The theory was that the funds were acquired before Wilcox was overruled in James v. United States, 1961, 366 U. S. 213, 81 S.Ct. 1052, 6 L.Ed.2d 246, and that James reserved a form of residual protection to those embezzling in the interim. The application of the teaching of Wilcox in the first instance to the facts of this case makes one of the issues on this appeal. We do not reach the validity of the residual protection theory of James. Another issue centers on the failure of the trial court to rule on the motion to dismiss or for entry of judgment of acquittal when the government rested its case. Under our view this involves the question of sufficiency of the evidence at that point in the case. Insufficiency of the whole of the evidence makes the other issue in the case.

The case in chief for the government showed that in 1952 the Dominican Republic made $1,504,000 available to appellant through a Chase Manhattan Bank letter of credit with which to purchase planes for its air force. He owned no planes, but acted either as a purchasing representative, or as a dealer who purchased and resold them at a profit to the Dominican Republic. Whether one of the other is immaterial to the result reached by the District Court or here. The total was to include planes at $45,000 each together with $2,000 each for freight.

Appellant contacted a Washington acquaintance in an effort to locate the planes. It was suggested that they could be obtained from the United States Government through the State and Defense Departments. Appellant advised them that he wished to purchase them from other sources because he had more leeway for a profit in following that course.

This acquaintance located thirty two planes in Sweden and they were purchased at a price of $30,500 each or a total of $976,000 with payments being made out of the letter of credit. An additional $64,000 was remitted to the Dominican Republic to cover freight charges. The balance of $464,000 was transmitted to the Miami Beach First National Bank in the tax year 1953, and deposited in a special account in the name of and under control of appellant. The sales invoices were from the Swedish seller to appellant at the lower price, and were delivered to him. He, in turn, invoiced them on his bill-head to the Dominican air force at $45,000 each. The new invoices were substituted with the bank for the old invoices. The partial assignments and substitution was under the terms of the letter of credit, and the new invoices were forwarded to the Dominican Republic by the bank. Appellant reported only $46,000 of the $464,000 balance received by him as income on the tax return for the fiscal year ended in 1953. He listed it simply as income received as "purchasing agent".

Two additional transactions, falling in fiscal year 1954, and following the same pattern, involved the purchase of ten additional planes and spare parts for the Dominican Republic air force where-under a total of $1,182,142.30 was entrusted to appellant through letters of credit with similar results. This time the excess over prices paid totalled $281,045.37. This was deposited in the account of Dominican Import & Export Company, an inactive corporation, at Miami Beach First National Bank. Appellant exercised exclusive control over this bank account. His tax return for the fiscal year ending in 1954 showed only income of $15,000 from this corporation.

The sums deposited in these bank accounts were claimed and used by appellant as his own. He used the funds to pay for, among other things, a personal residence, automobiles, furniture, and even disbursed some of it in the form of loans to friends and relatives.

He gave sworn financial statements to a surety company in connection with another matter as of January 12, 1953 in which he claimed the funds then in the special account as his own with no liabilities outstanding. In the meantime, the next transaction had occurred with the resultant deposit in the corporate account under his control. He gave another financial statement and claimed those funds as his own with no liabilities outstanding.

The net income of appellant for each of the years involved was established on the net worth plus non-deductible expenditure accounting method, and there was abundant proof that the most likely source of the additional income established was the receipt directly, and indirectly through the corporation, of the unexpended amounts of these letters of credit. There was evidence that members of a group headed by General Rafael Trujillo, Jr., in the Dominican Republic owned part or all of these sums, but there was no writing to prove it and no member of the group testified.

Appellant represented to his Washington acquaintance who located the planes, and who was to receive one half of all profit, that his profit on the first transaction was $64,000, and paid him $32,000 under their arrangement. On the other hand there was evidence that his profit was $69,000 of which $23,000 went to his brother for services rendered leaving the amount of $46,000 which he returned for taxes. There was other evidence that appellant was to draw $25,000 per year salary from the corporation plus $2,000 per plane purchased.

This was the state of the evidence when the government rested. The case was tried on the apparent defense that the unexpended sums belonged to the so-called "Dominican group", with appellant having full authority to make personal use of the funds on a loan basis, and that they were so used. On the post trial motions the defense was amplified to assert the embezzlement basis; i. e., that appellant and the Dominican group embezzled the funds from the Dominican Republic under a graft or kick-back...