Massei v. United States, 5132.

• Decision Date: 27 February 1957
• Docket Number: No. 5132.,5132.
• Citation: 241 F.2d 895
• Parties: William V. MASSEI, Defendant, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — First Circuit

241 F.2d 895 (1957)

William V. MASSEI, Defendant, Appellant, v.UNITED STATES of America, Appellee.

No. 5132.

United States Court of Appeals First Circuit.

February 27, 1957.

Richard Maguire, Boston, Mass., Thomas J. Carens, Boston, Mass., on the brief, for appellant.

Daniel Needham, Jr., Asst. U. S. Atty., Boston, Mass., Anthony Julian, U. S. Atty., Boston, Mass., on the brief, for appellee.

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

HARTIGAN, Circuit Judge.

This is an appeal from a judgment entered in the United States District Court for the District of Massachusetts upon the verdict of a jury finding the appellant guilty on each of five counts of an indictment charging him with willfully and knowingly attempting to defeat and evade a large part of the income tax due and owing by him and his wife to the United States for the calendar years 1946, 1947, 1948, 1949 and 1950, in violation of § 145(b) of the Internal Revenue Code,26 U.S.C. § 145(b).¹The appellant was sentenced to concurrent terms of imprisonment of two years on each count and fined $5,000.Execution of sentence was stayed pending appeal.Although the nearly 800 page record before us contains voluminous facts that concern the many contentions made by appellant, as is the usual situation in such cases, we shall set forth only those facts that we believe pertinent to the disposition of this case.

The appellant was a member of the Police Department of Worcester, Massachusetts, from January 1923 to December 1951.The appellant's assignments as a police officer can be best presented by the chart below:

  Jan. 2, 1923 to June 1, 1923     Night patrolman
                  June 1, 1923 to Feb. 15, 1924    Plainclothesman on vice and liquor
                                                       squad
                  Feb. 15, 1924 to Dec. 4, 1931    Precinct 1 — night duty
                  Dec. 4, 1931 to April 20, 1932   Injured
                  April 20, 1932 to Mar. 1, 1933   Plainclothesman on headquarters
                                                     squad.2
                  Mar. 1, 1933 to Jan. 15, 1934    Precinct 1 — night duty.
                  Jan. 15, 1934 to Jan. 20, 1936   Plainclothesman on headquarters
                                                     squad.
                  Jan. 20, 1936 to Jan. 10, 1938   Precinct 1 — night duty.
                  Jan. 10, 1938 to Sept. 11, 1939  Plainclothesman on headquarters
                                                     squad.
                  Sept. 11, 1939 to Jan. 6, 1940   Precinct 1 — night duty (promoted
                                                     to sergeant).
                  Jan. 6, 1940 to June 1, 1943     Headquarters squad, sergeant in
                                                     charge.
                  June 1, 1943 to June 1, 1947     Personnel officer.3
                  June 1, 1947 to Oct. 1, 1949     License Board investigator.4
                  Sept. 8, 1947                    Promoted to lieutenant.
                  Oct. 1, 1949 to Dec. 31, 1951    Personnel officer.
                

Appellant's salary for the years 1946, 1947, 1948, 1949 and 1950 was $2,850, $3,300, $3,300, $4,080, $4,080, respectively.From 1937 to 1945he earned from $2,100 to $2,850 a year.Although the payroll records for the years prior to 1937 had been destroyed and could not be produced, presumably he did not earn more than $2,100 a year during that period.Appellant's wife from 1933 to 1951 was a housewife with no source of money except that which the appellant gave to her.She has never at any time inherited or received as a gift any money or other valuables.

The Government established the above facts at the trial in attempting to prove that appellant had filed false and fraudulent joint tax returns, for himself and his wife, for the years 1946 to 1950, inclusive.The theory of the Government's case was that the joint net worth of the appellant and his wife was greater at the end than at the beginning of each year in issue, and that the source of their increased net worth was taxable income which exceeded that reported in their joint tax returns.

In this connection the Government produced in evidence the joint returns of the appellant and his wife for the prosecution years which reflected total income of $3,232.62, $3,539.66, $4,549.28, $5,004.91 and $6,701.75 for the years 1946 to 1950, respectively.In contrast to the reported income the Government presented evidence tending to establish that on December 31, 1945appellant had a net worth of $61,080.73 and that on December 31, 1950appellant had an accumulated net worth of $149,504.Appellant's net worth increases and receipts during the prosecution years, based on records of purchases of annuities, automobiles, land and securities by appellant and his wife, were $27,265.38, $9,991.64, $5,533.22, $9,599.72 and $36,033.31 for the years 1946 through 1950, respectively.Moreover, the Government established that prior to the indictment years there was evidence of receipts by appellant far in excess of the salary paid him.There was no evidence that appellant had ever received any gifts or devises other than an one-half interest in a house which will be discussed below.Since, after a careful study of the record, we believe that the figures concerning opening net worth and increases in net worth during the prosecution years were sufficiently grounded in the evidence, it is not necessary to set forth in detail the many items of proof with respect to them.

As to the likely source of the appellant's net worth increases during the indictment years, the Government stated in its bill of particulars as follows:

"1.The likely source of unreported income of the defendant is moneys received by the defendant as an individual from many persons engaged in various illegal activities for the performance by the defendant of his official duties as a member of the Worcester Police Department, for the non-performance by the defendant of his official duties as a member of the Worcester Police Department, and for the performance by the defendant as a member of the Worcester Police Department, of services rendered to such persons in connection with such illegal activities."

The Government's theory, plainly stated, was that appellant throughout his career as a police officer had taken graft.The only evidence in support of this theory was that, during the period when the case was under investigation by the Treasury Department, the appellant, through an attorney who represented him only prior to trial, on four instances admitted to Government agents that appellant had taken graft during the pre-indictment years.This evidence was admitted over the appellant's objections and was relied upon by the prosecution to establish the source from which it was likely that the appellant derived his unreported income during the prosecution years.

The record discloses that on November 27, 1951appellant's attorney arranged for the opening by the appellant of his safe deposit box in a Westerly, Rhode Island bank, so that agents Hurst and Calatrello might examine its contents.The agents testified in substance that while Hurst was dictating an inventory of the contents to Calatrello, Hurst turned to the appellant and asked him "the source of the funds that were used to acquire the various assets."The appellant replied that "it came from many different people at different times * * many years ago," whereupon appellant's attorney interrupted and stated that the appellant got the funds during prohibition days "from letting liquor trucks roll" through Worcester.The appellant then "picked up the conversation again and said he got the funds in the nature of a gift and therefore he didn't report it or he didn't think it was taxable."

Moreover, prosecution witnesses testified that on three occasions appellant's attorney, in the absence of the appellant, told them that the money spent by the appellant from 1946 to 1950 came from graft taken by appellant during prohibition days and while he was on the vice squad between 1933 and 1943.These occasions were as follows: (a) on an unspecified date in November or December 1951 to Hurst in his office; (b) on January 24, 1952 to Hurst in his office; and (c) on May 20, 1952 to Hurst and attorney Isber of the Treasury's District Counsel's office in Isber's office at a conference during which appellant's attorney was endeavoring to persuade Isber to recommend against criminal prosecution of the appellant.

Government witnesses also testified that during the conference of May 20, 1952 with Isber, appellant's attorney stated that in February 1949the appellant obtained "X dollars, after the death of his father, who had saved a lot of cash" from a partnership interest in a tavern which was engaged in the illegal sales of liquor.F. Joseph Donohue, Register of Probate for Worcester County, testified that the petition for probate of the will and the will itself of Pilade Massei, appellant's father, had been duly filed and allowed but no inventory or account had ever been filed.John Bianchi, executor of the will, testified that he had filed no inventory and that the only asset of the estate which he could find was a three tenement house in Worcester.It was established that the appellant in 1949 had received only an one-half interest in the three tenement house from his father's estate.

The trial judge, before admitting the agents' testimony concerning admissions made by appellant's attorney, held voir dire hearings on the attorney's authority to make such admissions for appellant.At these hearings testimony concerning the Treasury Regulations governing powers of attorney and appellant's attorney's statements was heard.Specifically, the Government presented evidence of many letters between appellant's attorney and agent Hurst showing that the attorney had acquired from appellant and had produced whatever information concerning appellant's finances that Hurst requested during the period of investigation before criminal prosecution was decided upon.The evidence revealed that the appellant through his attorney had cooperated fully with the investigating agents.However, the power of attorney that...