Craig v. United States, 11705.

• Citation: 217 F.2d 355
• Decision Date: 06 December 1954
• Docket Number: No. 11705.,11705.
• Parties: Gilbert M. CRAIG, Appellant, v. UNITED STATES of America, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

217 F.2d 355 (1954)

Gilbert M. CRAIG, Appellant, v. UNITED STATES of America, Appellee.

No. 11705.

United States Court of Appeals Sixth Circuit.

December 6, 1954.

Paul P. Cohen, Niagara Falls, N. Y., Cohen, Fleischmann, Augspurger, Henderson & Campbell, Niagara Falls, N. Y., Hertz & Kates, Cleveland, Ohio, on brief, for appellant.

Sumner Canary, U. S. Atty., Cleveland, Ohio, John J. Kane, Jr., U. S. Atty., Frank E. Steel, Asst. U. S. Atty., Cleveland, Ohio, for United States.

Before SIMONS, Chief Judge, and ALLEN and MILLER, Circuit Judges.

MILLER, Circuit Judge.

Separate indictments were returned against Lester E. Butzman, Sr., and the Appellant, Gilbert M. Craig, charging Butzman with the fraudulent execution of a document required by the provisions of the Internal Revenue law, and charging Craig for wilfully aiding and advising the preparation and presentation of such document to the Collector of Internal Revenue. Section 3793(a) (1), (b) (1), Title 26, U.S.C.A. The cases were consolidated in the District Court, and following a waiver of a trial by jury, the defendants were found guilty by the District Judge and sentenced to 3 years and 1 ½ years respectively. On appeal to this Court, the judgment against Butzman was affirmed. The contentions of Craig, insofar as they were similar to the contentions by Butzman, were also rejected. However, Craig also contended that in the trial below he had been deprived of the effective assistance of counsel in violation of his rights under the Sixth Amendment to the Constitution. This contention had not been raised in the trial court. Accordingly, the case against Craig was remanded to the District Court for further proceedings in which he would be given an opportunity to have such issue raised and heard. Butzman and Craig v. United States, 6 Cir., 205 F.2d 343, 351.

Following the remand, Craig moved in the District Court that a hearing be had upon the issue of whether he intelligently and voluntarily waived his right to representation by counsel of his own choosing separate from counsel for the defendant Butzman, and upon the related issues of whether he had intelligently and voluntarily consented to a consolidation of his case with the case against Butzman, and whether he had intelligently and voluntarily waived a jury trial in his own case. Following the hearing of evidence, the District Judge filed a comprehensive memorandum opinion containing a summary of the evidence with the Court's findings therefrom and the Court's conclusions based upon such findings. The Court held (1) that the evidence fell short of sustaining Craig's claim that he did not voluntarily and intelligently waive the right to counsel of his own choosing; (2) that the consolidation of the two cases was agreed to by Craig's counsel and that the order of consolidation was valid; (3) that Craig intelligently and voluntarily waived his right to trial by jury; and (4) that although a conflict of interest developed during the trial on the part of Craig's counsel towards Butzman and Craig it did not invalidate the judgment against Craig. The motion of the defendant Craig was overruled as to all issues raised therein, and the case has been returned to this Court for final determination of the appeal, including the issues raised by these supplemental proceedings.

We are in agreement with the District Judge's rulings, based on his findings which are fully sustained by the evidence, that the order of consolidation was validly entered, and that Craig intelligently and voluntarily waived his right to a trial by jury. The remaining two rulings that Craig intelligently and voluntarily waived his right to counsel of his own choosing and that the conflict of interest on the part of such counsel towards him and towards the defendant Butzman did not invalidate the trial are so closely interwoven we feel it is necessary that they be considered together.

In the trial of the consolidated cases, Butzman was represented by attorney Wasserman, who was the regularly employed attorney of the Ohio Tool Company, of which Butzman was the chief owner and officer. Craig had been employed by the Company as comptroller on a full-time basis about November 1, 1943. The indictments dealt with the alleged fraudulent execution on January 14, 1946 of an application by the Company for Tentative Adjustment with Respect to Amortization Deduction, which was executed by Butzman, in the preparation and presentation of which Craig was charged with aiding and advising. On the original appeal, we referred to the fact that Wasserman also undertook to represent Craig, and that it was Craig's contention that although no conflict of interest might have shown itself when this dual representation was undertaken, a review of the record as a whole showed that such a conflict developed, in that it was to the interest of Butzman to shift responsibility for the alleged false document to one or more of his employees. In the supplemental proceedings Craig's representation by counsel was more fully developed and found by the District Judge to be as follows:

In the summer of 1949, the Internal Revenue Bureau held a hearing in Washington with reference to the circumstances surrounding the Ohio Tool Company's application for the tax refund, at which Butzman and Craig appeared together with Wasserman acting as attorney for the Company and Butzman. The Examiner in Charge refused to permit Craig to testify until he obtained independent counsel to represent him. Following an adjournment, attorney W. P. Clyne was engaged to act as counsel for Craig. He served in that capacity but was paid for his services by Mrs. Butzman. Following the return of the indictments on January 10, 1952, efforts were made by Wasserman to secure Clyne's services for Craig in the trial of the criminal case, but Clyne notified Wasserman that he would not represent Craig in the action. Craig appeared at the arraignment without counsel. At the time he was unemployed and had earned nothing for more than a year prior thereto. He owned his home upon which there was a substantial mortgage.

After Clyne refused to serve as his counsel, Craig told Wasserman he would defend himself at the trial without a lawyer. Wasserman advised against such a course, and informed Craig that he would attempt to secure the services of M. L. Looney of Washington, D. C. Looney had represented Butzman in tax matters at hearings in Washington. His entrance into the case was in consideration of remuneration received by him from Butzman for past services. He was not to receive any compensation for his services in the trial of this case. Butzman, however, agreed to pay Looney's "out of pocket" expenses. Craig was not indigent but his financial status was such that he felt he could ill afford the expenses of independent counsel. He looked to the regular attorney of the Ohio Tool Company either to represent him or to obtain the services of another lawyer to do so. He did not know that he had the right to request the Court to appoint counsel for him, and when it appeared that Wasserman could not obtain the services of Clyne and he was informed that Looney would act for him, he acquiesced in the arrangement.

Looney acted for both Butzman and Craig during the trial. Although Craig contended that he expected Looney to devote his efforts solely to his defense...