Harary v. Blumenthal, No. 682

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Writing for the CourtBefore OAKES; OAKES
Citation555 F.2d 1113
Decision Date19 May 1977
Docket NumberNo. 682,D
Parties, 77-2 USTC P 9472 Charles R. HARARY, Plaintiff-Appellant, v. W. Michael BLUMENTHAL, Secretary of the Treasury of the United States of America, Defendant-Appellee. * ocket 76-6151.

Page 1113

555 F.2d 1113
50 A.L.R.Fed. 809, 77-2 USTC P 9472
Charles R. HARARY, Plaintiff-Appellant,
v.
W. Michael BLUMENTHAL, Secretary of the Treasury of the
United States of America, Defendant-Appellee.
*
No. 682, Docket 76-6151.
United States Court of Appeals,
Second Circuit.
Argued April 5, 1977.
Decided May 19, 1977.

Page 1115

Michael S. Fawer, New Orleans, La., for appellant.

Frederick P. Schaffer, Asst. U. S. Atty., New York City (Robert B. Fiske, Jr., U. S. Atty., S. D. N. Y., Samuel J. Wilson, Asst. U. S. Atty., New York City, of counsel), for appellee.

Before OAKES, Circuit Judge, and WYZANSKI ** and HOLDEN, *** District Judges.

OAKES, Circuit Judge:

Appellant, a certified public accountant, seeks by this appeal to avoid "disbarment" from practice before the Internal Revenue Service (IRS). He was disbarred in an administrative disciplinary proceeding before the Secretary of the Treasury, pursuant to 31 U.S.C. § 1026 and regulations thereunder, and sought review of the administrative decision in the United States District Court for the Southern District of New York, Thomas P. Griesa, Judge. Assuming jurisdiction, 1 the district court granted summary judgment for the Secretary. We affirm.

I.

Appellant's disbarment arose out of a prior criminal proceeding in which he was charged with bribing and conspiring to bribe a special agent of the IRS in violation of 18 U.S.C. §§ 201(b), 371, and with paying the agent a gratuity in violation of 18 U.S.C. § 201(f). He admitted that he had paid the agent the sum of $1,250 on behalf of his client, that he had told the client that the agent wanted $2,000 and that he (appellant) had kept the $750 difference.

Page 1116

Appellant was tried before a jury and was acquitted of the conspiracy and bribery charges, but was convicted of the gratuity charge. On appeal this court reversed the conviction on the gratuity charge and ordered that count of the indictment dismissed. United States v. Harary, 457 F.2d 471 (2d Cir. 1972). The court held that the district court had erred in submitting the lesser included gratuity offense to the jury, because there was no disputed factual element that would have allowed the jury rationally to conclude that appellant was guilty of the lesser offense but not of the greater offense of bribery. Id. at 477-78.

Subsequently, Treasury Department officials filed an administrative complaint, pursuant to 31 C.F.R. § 10.54, seeking appellant's disbarment from practice before the IRS. The grounds alleged included appellant's attempt to influence an agent in the conduct of an audit of appellant's client and appellant's overstating to his client the amount of the payment that the agent had agreed to accept. Following a hearing, at which the parties jointly offered in evidence the transcript from appellant's criminal trial, an administrative law judge (ALJ) found that appellant had committed the acts charged and ordered appellant disbarred. Appellant's appeal to the Secretary of the Treasury resulted in an opinion by the Department's General Counsel, acting on behalf of the Secretary, affirming the ALJ's decision in all respects. Appellant then sought relief in the district court and from that court's order took the instant appeal.

II.

In support of appellant's contention that the disbarment decision should be overturned, the principal argument is that collateral estoppel prevents his being disbarred for bribery and conspiracy to bribe, since he was acquitted of those charges at his prior criminal trial. This acquittal, appellant reasons, "definitively" establishes that he was entrapped by the IRS into paying the bribe, because at his trial appellant admitted the payment and relied wholly on an entrapment defense. Appellant's legal premise, however, is clearly wrong. The standard of proof in a criminal trial is guilt beyond a reasonable doubt. In re Winship, 397 U.S. 358, 364, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970). An acquittal in such a trial, under such a standard, cannot control a subsequent disbarment proceeding, in which a lower standard of proof is required, see In re Echeles, 430 F.2d 347, 352-53 (7th Cir. 1970); In re Doe, 95 F.2d 386, 387 (2d Cir. 1938) (per curiam). See generally One Lot Emerald Cut Stones and One Ring v. United States, 409 U.S. 232, 235, 93 S.Ct. 489, 34 L.Ed.2d 438 (1972) (per curiam); United States v. National Association of Real Estate Boards, 339 U.S. 485, 492-94, 70 S.Ct. 711, 94 L.Ed. 1007 (1950); Helvering v. Mitchell, 303 U.S. 391, 397-98, 58 S.Ct. 630, 82 L.Ed. 917 (1938); Neaderland v. Commissioner, 424 F.2d 639, 642-43 (2d Cir.), cert. denied, 400 U.S. 827, 91 S.Ct. 53, 27 L.Ed.2d 56 (1970). Moreover, the issue in a disbarment proceeding is essentially fitness to practice, rather than the criminality of the acts involved. See Bar Association v. Anonymous Attorneys, 41 N.Y.2d 506, 393 N.Y.S.2d 961, 362 N.E.2d 592 (1977) (per curiam).

Even were appellant's legal premise correct, however, his factual premise that the jury's verdict constituted a finding of entrapment is clearly incorrect in the circumstances of this case. As noted above, the jury at appellant's trial, while acquitting him of the bribery charges, found him guilty of giving the IRS agent a gratuity. This court later stated that the jury's verdict amounted to "a compromise." United States v. Harary, supra, 457...

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36 practice notes
  • Practice and procedure: Patent and trademark cases rules of practice; representation of others before Patent and Trademark Office,
    • United States
    • Federal Register December 12, 2003
    • December 12, 2003
    ...1953); and Attorney General's [[Page 69455]] Manual on the Administrative Procedure Act, pp.65-66 (1947). See also Harary v. Blumenthal, 555 F.2d 1113 (2nd Cir. 1977) (certified public accountant disbarred from practice before IRS), and Koden v. U.S. Department of Justice, 564 F.2d 228 (7th......
  • Part II
    • United States
    • Federal Register December 12, 2003
    • December 12, 2003
    ...1953); and Attorney General's [[Page 69455]] Manual on the Administrative Procedure Act, pp.65-66 (1947). See also Harary v. Blumenthal, 555 F.2d 1113 (2nd Cir. 1977) (certified public accountant disbarred from practice before IRS), and Koden v. U.S. Department of Justice, 564 F.2d 228 (7th......
  • U.S. v. Standefer, No. 78-1909
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • October 11, 1979
    ...confusion, however, such inconsistent verdicts cannot serve as the basis for collateral estoppel. See, e. g., Harary v. Blumenthal, 555 F.2d 1113, 1116-17 (2d Cir. The Pompano Beach violation in Count 1, however, cannot be similarly dispatched. Niederberger was acquitted under both statutes......
  • Raus v. Brotherhood of Ry. Carmen of U.S. and Canada, No. 93
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • November 10, 1981
    ...has not relied upon that basis. Vukonich v. Civil Service Commission, 589 F.2d 494, 496 n.1 (10th Cir. 1978); Harary v. Blumenthal, 555 F.2d 1113, 1115 n.1 (2d Cir. 1977); Mumford v. Glover, 503 F.2d 878, 882 (5th Cir. 1974); Rock v. Bryant, 459 F.Supp. 64, 67 (E.D.Ark.), aff'd, 590 F.2d 34......
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34 cases
  • U.S. v. Standefer, No. 78-1909
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • October 11, 1979
    ...confusion, however, such inconsistent verdicts cannot serve as the basis for collateral estoppel. See, e. g., Harary v. Blumenthal, 555 F.2d 1113, 1116-17 (2d Cir. The Pompano Beach violation in Count 1, however, cannot be similarly dispatched. Niederberger was acquitted under both statutes......
  • Raus v. Brotherhood of Ry. Carmen of U.S. and Canada, No. 93
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • November 10, 1981
    ...has not relied upon that basis. Vukonich v. Civil Service Commission, 589 F.2d 494, 496 n.1 (10th Cir. 1978); Harary v. Blumenthal, 555 F.2d 1113, 1115 n.1 (2d Cir. 1977); Mumford v. Glover, 503 F.2d 878, 882 (5th Cir. 1974); Rock v. Bryant, 459 F.Supp. 64, 67 (E.D.Ark.), aff'd, 590 F.2d 34......
  • Andrus v. Charlestone Stone Products Co Inc, No. 77-380
    • United States
    • United States Supreme Court
    • May 31, 1978
    ...jurisdictionally correct when filed. See Fort Sumter Tours, Inc. v. Andrus, 564 F.2d 1119, 1123 n. 4 (CA4 1977); Harary v. Blumenthal, 555 F.2d 1113, 1115 n. 1 (CA2 1977); Fitzgerald v. United States Civil Service Comm'n, 180 U.S.App.D.C. 327, 329 n. 1, 554 F.2d 1186, 1188 n. 1 (1977). 7. I......
  • Ostrer v. Aronwald, No. 76 Civ. 3701.
    • United States
    • U.S. District Court — Southern District of New York
    • June 21, 1977
    ...in their official capacities, Act of Oct. 21, 1976, Pub.L.No. 94-574, § 2, 90 Stat. 2721. Harary v. Blumenthal, Docket No. 76-6151, 555 F.2d 1113 (2d Cir. 1977). Jurisdiction lies in this action under 28 U.S.C. § Furthermore, this suit is of unique concern to the federal courts. A non-statu......
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