Katz v. United States, 6082-6085.

• Citation: 321 F.2d 7
• Decision Date: 12 November 1963
• Docket Number: No. 6082-6085.,6082-6085.
• Parties: Abraham M. KATZ, Defendant, Appellant, v. UNITED STATES of America, Appellee. Harry A. KATZ, Defendant, Appellant, v. UNITED STATES of America, Appellee. Samuel KATZ, Defendant, Appellant, v. UNITED STATES of America, Appellee. Max KATZ, Defendant, Appellant, v. UNITED STATES of America, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

321 F.2d 7 (1963)

Abraham M. KATZ, Defendant, Appellant, v. UNITED STATES of America, Appellee.

Harry A. KATZ, Defendant, Appellant, v. UNITED STATES of America, Appellee.

Samuel KATZ, Defendant, Appellant, v. UNITED STATES of America, Appellee.

Max KATZ, Defendant, Appellant, v. UNITED STATES of America, Appellee.

Nos. 6082-6085.

United States Court of Appeals First Circuit.

July 12, 1963.

Certiorari Denied November 12, 1963.

Manuel Katz, Boston, Mass., with whom Paul T. Smith, Boston, Mass., was on brief, for appellants.

Paul J. Redmond, Asst. U. S. Atty., with whom W. Arthur Garrity, Jr., U. S. Atty., and Daniel B. Bickford, William F. Looney, Jr., and John J. Curtin, Jr., Asst. U. S. Attys., were on brief, for appellee.

Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.

Certiorari Denied November 12, 1963. See 84 S.Ct. 193.

ALDRICH, Circuit Judge.

These are appeals by four defendants, convicted at a joint trial on a total of twelve counts for attempting to evade income taxes by filing false and fraudulent personal returns for one or more of the years 1955 to 1958. The defendants, three brothers and a brother-in-law, were the officers, directors and stockholders of State Line Potato Chip Company, Inc. Defendant Max Katz, the principal and managing officer of the company, will hereinafter be referred to as Max, and the rest, collectively, as the other defendants. The other defendants sought trial separately from Max, alleging that their cases were essentially different, and, further, that they would be prejudiced by certain extrajudicial admissions allegedly made by Max and concededly not binding upon them. On the government's representation that "basically the evidence would be the same" against all four (it did not deny individual differences, or that Max had made personal admissions) the court refused to sever. It added, "If at the end I find there has been prejudice, I won't hesitate to act." Thereafter the court did, in fact, act. Initially there had been included four counts against Max for causing falsification of the corporate returns. After the trial began, apparently feeling that in that matter the basic evidence was different, with Max's permission the court granted a mistrial on those counts and postponed them to a later date. It took no subsequent action with respect to separating the other counts, nor was it asked to. The mere fact that all the evidence is not admissible against all defendants does not necessitate separate trials. Opper v. United States, 1954, 348 U.S. 84, 75 S.Ct. 158, 99 L.Ed. 101; Malatkofski v. United States, 1 Cir., 1950, 179 F.2d 905. Having read the full record we are well satisfied that it was appropriate to try the remaining cases together.

The defendants moved to quash the indictment, and to strike the petit jury panel, because of the manner of drawing the grand and petit juries. One of their grounds we have since disposed of in Gorin v. United States, 1 Cir., 1963, 313 F.2d 641, cert. den. 374 U.S. 829, 83 S.Ct. 1870, 10 L.Ed.2d 1052. The other is an alleged discrimination in that no jurors were drawn from that part of the district which lies west of Worcester County. 28 U.S.C.A. § 1865(a) provides,

"(a) Grand and petit jurors shall from time to time be selected from such parts of the district as the court directs so as to be most favorable to an impartial trial, and not to incur unnecessary expense or unduly burden the citizens of any part of the district with jury service. To this end the court may direct the maintenance of separate jury boxes for some or all of the places for holding court in the district and may appoint a jury commissioner for each such place."

The clerk stated in open court that when the court was sitting in Boston it was standard procedure not to call jurors from west of Worcester County. We take judicial notice that this has been so for many years. In the light of this statute there can certainly be no abuse in not calling jurors who live over 60 miles from the courthouse. The defendants' point is groundless. United States v. Gottfried, 2 Cir., 1948, 165 F.2d 360, cert. den., 333 U.S. 860, 68 S.Ct. 738, 92 L.Ed. 1139.¹

Prior to trial the defendants moved for the suppression of a certain "black book" and the "fruits thereof."² The court properly found, on adequate testimony, that this book was a corporate record, and had been taken by the government after it had been tendered to the agent by Max (albeit that Max misrepresented its content, causing the tender to be initially refused) and that no constitutional rights had been infringed. The point pressed on this appeal, except for arguments based upon testimony properly discredited by the district court, is that subsequently, at the trial, the revenue agent testified that he had not stated his exact purpose when asking for the book. We will assume, without deciding, that this testimony may be related back to the motion. Even so, the present contention is both late and specious. It is too late because even when the motion was reargued to the district court the point was not made. It is specious because even if it be assumed that to request a document by stating that it is wanted for one reason when another reason is the one primarily in mind may be a misrepresentation, there is no evidence that Max was misled. Analysis, not necessary to articulate, indicates that he could not have been.

Coming to the merits, there are only two substantial questions;³ the court's permitting the jury to find that certain corporate distributions constituted income wilfully concealed by individual defendants, and the marking of the corporate books as exhibits. These questions require a brief summary of the evidence.

On the testimony of Max and the two other defendants who took the stand, which we may largely accept in this particular, the general management and all of the fiscal affairs, including making all the entries in the books of the company were, with the acquiescence of the other defendants, handled by Max alone. The other defendants took no action in their several capacities of officers and directors, attended no meetings, and signed "minutes" and other papers without reading. Max's authority extended even to a single-handed "big-brother" decision as to all corporate distributions to all defendants, whether by way of salary, bonus, or otherwise.

The evidence warranted a finding that payments pursuant to Max's determination were made continually, not only by the common device of having the company satisfy personal bills, in some instances under the guise of having them appear to be corporate expenses, but also by deposits into over two hundred savings bank accounts, and into a war savings bond account from which bonds were bought which were subsequently redeemed by individual defendants. Many of these savings accounts were in joint names, to include a child of the defendant, but in most instances the children testified that they had no knowledge that the accounts existed. This warranted an inference that the individual defendants retained full ownership, and that not merely the deposits, but accrued interest, constituted personal income. Testimony was introduced, also, as to the payment of bills and the purchase of property, tangible and intangible, for defendants' children. On the government's evidence the resulting direct and attributable income greatly exceeded that stated on the returns.

A primary defense of the other defendants to this showing was that they were unaware that Max had made many of these distributions. In support thereof Max testified that he did not disclose the bank accounts to the others and that he made the deposits, and various other payments, surreptitiously for his own private purposes, planning their subsequent recapture; in short, that this was a...