Grunewald v. United States Halperin v. United States Bolich v. United States, s. 183

• Court: United States Supreme Court
• Writing for the Court: HARLAN
• Citation: 1 L.Ed.2d 931,353 U.S. 391,77 S.Ct. 963
• Parties: Henry W. GRUNEWALD, Petitioner, v. UNITED STATES of America. Max HALPERIN, Petitioner, v. UNITED STATES of America. Daniel A. BOLICH, Petitioner, v. UNITED STATES of America
• Docket Number: 186,184,Nos. 183,s. 183
• Decision Date: 27 May 1957

353 U.S. 391 77 S.Ct. 963 1 L.Ed.2d 931 Henry W. GRUNEWALD, Petitioner,

v.

UNITED STATES of America. Max HALPERIN, Petitioner, v. UNITED STATES of America. Daniel A. BOLICH, Petitioner, v. UNITED STATES of America.

Nos. 183, 184, 186. Argued April 3 and 4, 1957. Decided May 27, 1957.

[Syllabus from pages 391-392 intentionally omitted]

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Mr. Edward J. Bennett, New York City, for petitioner grunewald.

Mr. Henry G. Singer, Brooklyn, N.Y., for petitioner Halperin.

Mr. Rudolph Stand, New York City, for petitioner Bolich.

Mr. John F. Davis, Washington, D.C., for the respondent in all three cases.

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Mr. Justice HARLAN delivered the opinion of the Court.

The three petitioners were convicted on Count 1 of an indictment brought under 18 U.S.C. § 371, 18 U.S.C.A. § 371¹ for conspiracy to defraud the United States with reference to certain tax matters. Petitioner Halperin was also convicted on Counts 5, 6, and 7 of the same indictment, charging him with violating 18 U.S.C. § 1503, 18 U.S.C.A. § 1503² by endeavoring corruptly to influence certain witnesses before a grand jury which was investigating matters involved in the conspiracy charged in Count 1 of the indictment. Each petitioner was sentenced to five years' imprisonment and fined under Count 1. On each of Counts 5, 6, and 7, Halperin was sentenced to two years' imprisonment and a fine of $1,000, the prison sentences on these Counts and that on Count 1 to run concurrently. The Court of Appeals for the Second Circuit affirmed, with the late Judge Frank dissenting. 233 F.2d 556. We granted certiorari, 352 U.S. 866, 77 S.Ct. 91, 1 L.Ed.2d 74, in order to resolve important questions relating to (a) the statute of limitations in conspiracy

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prosecutions, as to which the decision below was alleged to be in conflict with this Court's decisions in Krulewitch v. United States, 336 U.S. 440, 69 S.Ct. 716, 93 L.Ed. 790, and Lutwak v. United States, 344 U.S. 604, 73 S.Ct. 481, 97 L.Ed. 593; and (b) the use on Halperin's cross-examination of his prior claim of the Fifth Amendment's privilege against self-incrimination before a grand jury. For the reasons discussed hereafter, we conclude that these convictions must be reversed, and the petitioners granted a new trial.

On October 25, 1954, a grand jury returned an indictment, Count 1 of which charged petitioners and others with conspiring among themselves and with others 'to defraud the United States in the exercise of its governmental functions of administering the internal revenue laws and of detecting and prosecuting violations of the internal revenue laws free from bribery, unlawful impairment, obstruction, improper influence, dishonesty, fraud and corruption * * *.' The indictment further charged that a part of the conspiracy was an agreement to conceal the acts of the conspirators.³ Overt acts within three years of the date of the indictment were charged. Counts 5, 6, and 7 of the indictment charged petitioners with violating 18 U.S.C. § 1503, 18 U.S.C.A. § 1503, in the manner already indicated.

The proofs at the trial presented a sordid picture of a ring engaged in the business of 'fixing' tax fraud cases

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by the use of bribes and improper influence. In general outline, the petitioners' scheme, which is set forth in more detail in the Court of Appeals' opinion,⁴ was as follows:

In 1947 and 1948 two New York business firms, Patullo Modes and Gotham Beef Co., were under investigation by the Bureau of Internal Revenue for suspected fraudulent tax evasion. Through intermediaries, both firms established contact with Halperin, a New York attorney, and his associates in law practice. Halperin in turn conducted negotiations on behalf of these firms with Grunewald, an 'influential' friend in Washington, and reported that Grunewald, for a large cash fee, would undertake to prevent criminal prosecution of the taxpayers. Grunewald then used his influence with Bolich, an official in the Bureau, to obtain 'no prosecution' rulings⁵ in the two tax cases. These rulings were handed down in 1948 and 1949. Grunewald, through Halperin, was subsequently paid $60,000 by Gotham and $100,000 by Patullo.⁶

Subsequent activities of the conspirators were directed at concealing the irregularities in the disposition of the Patullo and Gotham cases. Bolich attempted to have the Bureau of Internal Revenue report on the Patullo case 'doctored,' and careful steps were taken to cover up the traces of the cash fees paid to Grunewald. In 1951 a congressional investigation was started by the King Committee of the House of Representatives; the conspirators felt themselves threatened and took steps to hide their traces. Thus Bolich caused the disappearance

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of certain records linking him to Grunewald, and the taxpayers were repeatedly warned to keep quiet. In 1952 the taxpayers and the conspirators were called before a Brooklyn grand jury. Halperin attempted to induce the taxpayers not to reveal the conspiracy, and Grunewald asked his secretary not to talk to the grand jury. These attempts at concealment were, however, in vain. The taxpayers and some of Halperin's associates revealed the entire scheme, and petitioners' indictment and conviction followed.⁷

The first question before us is whether the prosecution of these petitioners on Count 1 of the indictment was barred by the applicable three-year statute of limitations.⁸

The indictment in these cases was returned on October 25, 1954. It was therefore incumbent on the Government to prove that the conspiracy, as contemplated in the agreement as finally formulated, was still in existence on October 25, 1951, and that at least one overt act in furtherance of the conspiracy was performed after that date.⁹ For where substantiation of a conspiracy charge

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requires proof of an overt act, it must be shown both that the conspiracy still subsisted within the three years prior to the return of the indictment, and that at least one overt act in furtherance of the conspiratorial agreement was performed within that period. Hence, in both of these aspects, the crucial question in determining whether the statute of limitations has run is the scope of the conspiratorial agreement, for it is that which determines both the duration of the conspiracy, and whether the act relied on as an overt act may properly be regarded as in furtherance of the conspiracy.¹⁰

Petitioners, in contending that this prosecution was barred by limitations, state that the object of the conspiratorial agreement was a narrow one: to obtain 'no prosecution' rulings in the two tax cases. When these rulings were obtained, in October 1948 in the case of Gotham Beef, and in January 1949 in the case of Patullo Modes, the criminal object of the conspiracy, petitioners say, was attained and the conspirators' function ended. They argue, therefore, that the statute of limitations started running no later than January 1949, and that the

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prosecution was therefore barred by 1954, when the indictment was returned.¹¹

The Government counters with two principal contentions: First, it urges that even if the main object of the conspiracy was to obtain decisions from the Bureau of Internal Revenue not to institute criminal tax prosecutions—decisions obtained in 1948 and 1949—the indictment alleged,¹² and the proofs showed, that the conspiracy also included as a subsidiary element an agreement to conceal the conspiracy to 'fix' these tax cases, to the end that the conspirators would escape detection and punishment for their crime. Says the Government, 'from the very nature of the conspiracy * * * there had to be, and was, from the outset a conscious, deliberate, agreement to conceal * * * each and every aspect of the conspiracy * * *.' It is then argued that since the alleged conspiracy to conceal clearly continued long after the main criminal purpose of the conspiracy was accomplished, and since overt acts in furtherance of the agreement to conceal were performed well within the indictment period, the prosecution was timely.

Second, and alternatively, the Government contends that the central aim of the conspiracy was to obtain

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for these taxpayers, not merely a 'no prosecution' ruling, but absolute immunity from tax prosecution; in other words, that the objectives of the conspiracy were not attained until 1952, when the statute of limitations ran on the tax cases which these petitioners undertook to 'fix.' The argument then is that since the conspiracy did not end until 1952, and since the 1949—1952 acts of concealment may be regarded as, at least in part, in furtherance of the objective of the conspirators to immunize the taxpayers from tax prosecution, the indictment was timely.

For reasons hereafter given, we hold that the Government's first contention must be rejected, and that as to its second, which the Court of Appeals accepted, a new trial must be ordered.

I.

We think that the Government's first theory—that an agreement to conceal a conspiracy can, on facts such as these, be deemed part of the conspiracy and can extend its duration for the purposes of the statute of limitations—has already been rejected by this Court in Krulewitch v. United States, 336 U.S. 440, 69 S.Ct. 716, 718, 93 L.Ed. 790, and in Lutwak v. United States, 344 U.S. 604, 73 S.Ct. 481, 97 L.Ed. 593.

In Krulewitch the question before the Court was whether certain hearsay declarations could be introduced against one of the conspirators. The declarations in question were made by one named in the indictment as a co-conspirator after the main object of the conspiracy (transporting a woman to Florida for immoral purposes) had been accomplished. The Government argued that the conspiracy was not ended, however, since it included an implied subsidiary conspiracy to conceal the crime after its commission, and that the declarations were therefore still in furtherance of...