Lott v. United States

• Citation: 309 F.2d 115
• Decision Date: 07 January 1963
• Docket Number: No. 17888.,17888.
• Parties: H. A. LOTT, Lee Blocker and Lorn D. Frazier, Appellants, v. UNITED STATES of America, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

309 F.2d 115 (1962)

H. A. LOTT, Lee Blocker and Lorn D. Frazier, Appellants, v. UNITED STATES of America, Appellee.

No. 17888.

United States Court of Appeals Fifth Circuit.

September 25, 1962.

Certiorari Denied January 7, 1963.

C. W. Wellen, Leroy Denman Moody, W. V. Ballew, Jr., C. Anthony Friloux, Jr., John H. Crooker, Joe S. Moss, William M. Ryan, Walter E. Workman, Houston, Tex., for appellants, Fulbright, Crooker, Freeman, Bates & Jaworski, Baker, Botts, Andrews & Shepherd, Houston, Tex., of counsel.

Joseph M. Howard, Atty. Dept. of Justice, Washington, D. C., Myron M. Sheinfield, Asst. U. S. Atty., Houston, Tex., Woodrow B. Seals, U. S. Atty., William B. Butler, Asst. U. S. Atty., Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, Meyer Rothwacks, David O. Walter, Attys., Dept. of Justice, Washington, D. C., Fred L. Hartman, Asst. U. S. Atty., for appellee.

Before TUTTLE, Chief Judge, and POPE^* and GEWIN, Circuit Judges.

Certiorari Denied January 7, 1963. See 83 S.Ct. 504.

GEWIN, Circuit Judge.

The three appellants and two others were charged in a five count indictment with attempting to evade and defeat income taxes of a named corporation. The first four counts are substantive and relate to the years 1951, 1952, 1953 and 1954 respectively. The fifth count charged a conspiracy to evade and defeat the same corporation's income tax for the years 1951 to 1954 inclusive. After entering pleas of not guilty, and after careful and cautious consideration by the court, each of the appellants was permitted to withdraw his plea of not guilty and enter a plea of nolo contendere. Following the pronouncement of sentence and the entry of formal written judgments, motions in arrest of judgment were filed by each appellant. The motions were denied and thereupon the appellants appealed.

Sentencing of the appellants was deferred after they were allowed to enter pleas of nolo contendere. The Government strongly objected to the nolo contendere pleas. During the period of deferment, the trial judge who had accepted the nolo contendere pleas presided over a lengthy trial of the defendants Farnsworth, the two others who had been jointly indicted with the appellants. One of the two was acquitted and the jury was unable to agree on a verdict as to the other. Thereafter, on June 19, 1959, the same trial judge sentenced the appellants. The appellant Blocker was sentenced to 3 years to be served; and appellants Frazier and Lott were each sentenced to 2 years to be served, under each count, the sentences to run concurrently. Each appellant was fined the total sum of $20,000.00. The appellants owned a total of 7% of the stock of the company. Blocker was Treasurer and both Frazier and Lott were Vice Presidents.

Although their contentions are separately presented, the alleged errors relied on by Blocker and those relied on by Lott and Frazier are essentially the same and may be summarized as follows:

1. The indictment is insufficient.

2. Delay in sentencing resulted in a denial of due process.

3. The court was without jurisdiction to impose sentences on the pleas of nolo contendere after hearing the evidence presented at the trial of the other two jointly indicted defendants.

4. Defects in the formal written judgment of the court.

We will deal with each of these contentions separately. As part of the history of this case, reference is made to Lott et als. v. United States, 5 Cir., 1960, 280 F.2d 24; Id., 367 U.S. 421, 81 S.Ct. 1563, 6 L.Ed.2d 940 (1961).

I The Indictment

It is contended that the indictment does not apprise the appellants of "the nature and cause of the accusation" within the meaning of the Sixth Amendment to the United States Constitution and does not charge all the basic elements of the offense of attempting to evade and defeat corporate income taxes. The first 4 counts are substantive and are essentially the same except as to the amounts therein mentioned and the years involved. Each of these counts relates to a separate year. The fifth count charges conspiracy and relates to all of the years involved. While it is admitted that the indictment is framed in the words of the statute, it is contended that the statute is so vague that the appellants cannot determine the nature of the charge against them with sufficient certainty to enable them to make a defense or to avoid further prosecution for the same offense.

It is true that offenses must be accurately described in an indictment; and if necessary to do so, the allegations must be expanded beyond the words of the statute in order to embrace all the ingredients necessary to the offense. U. S. v. Cruikshank, 92 U.S. 542, 23 L.Ed. 588 (1876); Babb v. U. S., 5 Cir., 1955, 218 F.2d 538; U. S. v. Debrow, 5 Cir., 1953, 203 F.2d 699.

As examples of the contention made, the appellants cite U. S. v. Strauss, 5 Cir., 1960, 285 F.2d 953, holding that in a prosecution against a corporate officer for alleged fraudulent transfer of corporate property in contemplation of bankruptcy, the indictment was defective because it did not set forth "* * * a plain, concise and definite statement of the offense * * *", failed to identify the property, and from aught appearing the transfer was made in the usual and regular conduct of the business; and Clay v. U. S., 5 Cir., 1955, 218 F.2d 483, in which it was held that an allegation of liability for tax coupled with a failure to pay was insufficient to constitute a felony violation, because there must be some affirmative act on the part of the defendant showing an attempt to evade the tax. The court observed that all that was alleged was that the defendants were engaged in the business of accepting wagers without having paid the occupational tax, which was only a conclusion unsupported by allegations of facts showing a willful attempt to evade, and therefore the indictment was insufficient.

The Clay case, supra, was discussed by this court in the later case of Reynolds v. U. S., 5 Cir., 1955, 225 F.2d 123:

"That indictment (Clay) alleged the quo modo, it charged the attempt to evade the occupational tax `by engaging in the business of accepting wagers * * * without having paid said occupational tax * * *\'.

On the other hand, the indictment in the present case pleads the offense substantially in the language of the statute, which is an approved mode of pleading with the single exception of an instance where the words of the statute do not contain all the essential elements of the offense. That exception can have no application here unless it be held that Spies v. United States, 317 U.S. 492, 63 S.Ct. 364, 87 L.Ed. 418 infra added a substantive element to those contained in the statute defining a similar offense; and that is not true, for the Spies case simply construed the statutory language, `willfully attempts in any manner to evade or defeat any tax * * *.\' 26 U.S. C.A. ß 145(b), I.R.C.1939. Indeed, in income tax cases, it has been stated that an indictment need not specify the means whereby the defendant attempted to evade and defeat the tax. Information as to the particular means employed may be obtained by a bill of particulars."

Also U. S. v. Simmons, 96 U.S. 360, 24 L.Ed. 819 (1878) in effect held that it was not necessary to state in the indictment the particular means by which the United States was defrauded of the tax. The defendant is entitled to a formal statement of the grounds upon which he is charged, but the Government is not held to such strictness of averments as might defeat the ends of justice. As there observed:

"Such intent may, however, be manifested by so many acts upon the part of the accused, covering such a long period of time, as to render it difficult, if not wholly impracticable, to aver, with any degree of certainty, all the essential facts from which it may be fairly inferred."

A similar question arose in Capone v. U. S., 7 Cir., 1932, 56 F.2d 927, and the court concluded:

"But it is contended by appellant that the indictment should have specified the means by which he attempted to evade or defeat the payment of the tax. Neither the Cruikshank Case nor any other case which we have been able to find supports this contention. In the Cruikshank Case it was stated that all rights are not guaranteed by the Federal Constitution, and that therefore, as a matter of law, a charge of conspiracy to defeat a citizen\'s constitutional right must show that the right threatened is one conferred by the Constitution. In other words, if a certain right is excepted in the definition of the crime, facts must be pleaded to avoid the exception.

"But in the instant case there are no exceptions, for the statute says that every attempt to evade or defeat the payment of income tax is a violation of law. What was a question of law in the Cruikshank Case, by reason of existing exceptions, is in the instant case a question of fact for the jury because of the absence of exceptions."

The indictment in the instant case goes further than merely charging the offense in the words of the statute. It expressly alleges various means by which the appellants attempted to evade the taxes such as falsifying invoices, concealing assets and diverting income. We cannot agree with the appellants that the means alleged are not adequate because of a failure to state in specific detail how these actions could result in underpayment of taxes of the corporation. Spies v. U. S., 317 U.S. 492, 63 S.Ct. 364, 87 L.Ed. 418 (1943) discusses the statute involved and points out distinctions between subsection (a) and (b) of ß 145; subsection (a) being a misdemeanor and subsection (b) a felony:

"Willful but passive neglect of the statutory duty may constitute the lesser offense, but to combine it with a willful and positive attempt to evade tax in any manner or to defeat it by any means lifts the offense to the degree of felony.

"* * * By way of illustration, and not by way of limitation, we would think affirmative willful attempt may be

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