Monroe v. United States, 14615.

• Decision Date: 11 October 1954
• Docket Number: No. 14615.,14615.
• Citation: 215 F.2d 81
• Parties: MONROE v. UNITED STATES.
• Court: U.S. Court of Appeals — Fifth Circuit

215 F.2d 81 (1954)

MONROE v. UNITED STATES.

No. 14615.

United States Court of Appeals, Fifth Circuit.

August 5, 1954.

Rehearing Denied October 11, 1954.

Henry Klepak and John P. Koons, Dallas, Tex., for appellant.

William O. Braecklein, Cavett Binion, Asst. U. S. Attys., Heard L. Floore, Frank B. Potter, U. S. Attys., Fort Worth, Tex., for appellee.

Before HUTCHESON, Chief Judge, RIVES, Circuit Judge, and RICE, District Judge.

RICE, District Judge.

Tried to a jury and found guilty on each count of a five count indictment charging him with knowingly and wilfully attempting to evade a large part of the income taxes owing by himself and his wife for the years 1946, 1947, and 1948, in violation of Section 145(b) of the Internal Revenue Code, 26 U.S.C.A. § 145(b), the defendant has appealed.

Defendant graduated from Baylor University and thereupon engaged for a time in the occupation of singing professionally. He was later employed as a field representative of General Motors Acceptance Corporation, making collections and repossessing automobiles. In May, 1942, he became a Special Agent for the Federal Bureau of Investigation and served in that capacity substantially three and one-half years. He thereafter was employed by the Buick Motor Division of General Motors Corporation, in the capacity of district manager for Northeast Texas. He supervised the operations of some forty dealers in his territory. While so employed, and without the knowledge of his superiors, he engaged in certain lucrative extra curricular activities. Included among these was receiving money under a kickback agreement for allotting additional automobiles. For this service one dealer paid defendant $1,000.00 per month. These were cash transactions, and defendant kept cash in a safety deposit vault. He also made use of cashier's checks issued in fictitious names. He kept no books or records in reference to these outside activities.

Defendant testified that he did not report the income which accrued to him by reason of these activities because they formed no part of the business in which he was engaged; and did not realize that he should have reported this income for the years 1946, 1947, and 1948, until his superior brought it to defendant's attention while reprimanding him in April of 1948 for some of these activities which defendant's superior had just discovered.

Defendant testified that thereafter his conscience began hurting him, and that in November or December, 1948, he confided in his bookkeeper that he had not been reporting his full income for the years 1946 and 1947, and that the latter advised him to procure an accountant. In January, 1948, he did employ a firm of certified public accountants, and disclosed his problem and sought their advice. Due to his failure to keep books and records the making of a corrected amended return was impossible, and he was advised to compile from memory a list of his unreported income and said accountants would put it in his 1948 return for the purpose of notifying the government that such amount was previously unreported income. Defendant relied on and followed this advice. Defendant further testified that said accountants advised him that the filing of his 1948 return would cause an investigation of the income thus reported and that when representatives of the government came to check his returns he was to explain his situation to them and to cooperate to the fullest extent; that by so doing he would be protected by the immunity granted those making a voluntary disclosure. He further testified that on receiving this advice he finally remembered $13,000 of unreported income; and that this sum was reported as income in his 1948 return. From the record and the briefs of the parties it would appear that no explanation was incorporated in the 1948 return showing the source of this income or that it was previously unreported. There the matter lay, from the filing of the 1948 return in March 1949, with nothing further being done by defendant, until August 7, 1950, when Messrs. Klein and Robertson, Agents of the Bureau of Internal Revenue, called at defendant's place of business and requested to see the 1948 return for Monroe Buick Agency.

During the month of May, 1950, Mr. Robert W. Klein, an Agent of the Intelligence Division of the Bureau of Internal Revenue, was ordered to investigate the returns of defendant for the tax years 1946, 1947 and 1948; and on June 1, 1950, defendant's 1946 and 1947 tax returns were "physically" handed over to Mr. Klein. The latter testified that in May, 1950, in his official capacity, he had information defendant had unreported income not disclosed by his return.

Defendant further testified that on the first visit of Mr. Klein he told him that the lump sum of money ($13,000) was put in the 1948 return to cover unreported income for 1946, 1947 and 1948, under instructions of his accountant, for the purpose of notifying the government he had made unreported income. That his accountant had informed him that if he made a voluntary disclosure he would not suffer any penalty or prosecution, except for not having kept books and records; that Mr. Klein did not tell him he would not be prosecuted; that he voluntarily gave the agents all the information he had and cooperated with them fully.

Agent Klein testified that during...