U.S., In re

• Decision Date: 22 October 1979
• Docket Number: No. 1422,D,1422
• Citation: 608 F.2d 76
• Parties: In re UNITED STATES of America, Petitioner. UNITED STATES of America, v. Michael CLEMENTE, Defendant. ocket 79-3051.
• Court: U.S. Court of Appeals — Second Circuit

Page 76

608 F.2d 76

In re UNITED STATES of America, Petitioner UNITED STATES of America, v. Michael CLEMENTE, Defendant.

No. 1422, Docket 79-3051.

United States Court of Appeals Second Circuit.

Argued July 18, 1979.

Decided Oct. 22, 1979.

Michael S. Devorkin, Asst. U. S. Atty., New York City (Robert B. Fiske, Jr., U. S. Atty., Richard D. Weinberg, Asst. U. S. Atty., New York City, on brief), for petitioner.

Theodore E. Teah, New York City (Paul A. Victor, Dublirer, Haydon, Straci & Victor, New York City, on brief), for defendant.

Before VAN GRAAFEILAND, NEWMAN and KEARSE, Circuit Judges.

NEWMAN, Circuit Judge:

The United States seeks a writ of mandamus in advance of trial in this criminal case to challenge the trial court's interpretation of 18 U.S.C. § 3237(b) concerning venue for prosecution of certain internal revenue offenses.

The original indictment charged defendant Michael Clemente and ten others with racketeering, extortion, labor pay-offs, and tax evasion. Ten counts charged Clemente with income tax offenses in violation of 26 U.S.C. §§ 7201 and 7206(2) for the years 1973-1977. Each of the § 7201 counts alleged an attempt to evade taxes by signing and mailing a false income tax return, and the making of these returns was also alleged to be in violation of § 7206(2). The indictment alleged venue in the Southern District of New York. Relying on 18 U.S.C. § 3237(b), ¹ Clemente moved to have the tax counts transferred to his district of residence, the Eastern District of New York. He submitted an affidavit stating that his tax returns for the years in question had been transmitted to the Internal Revenue Service by mail. Clemente's affidavit indicated that the returns were mailed from his residence within the Eastern District of New York to an I.R.S. Office also located in the Eastern District.

The Government resisted the motion, contending that it would establish venue for the tax counts in the Southern District of New York on the basis of the preparation of the tax returns and other acts of evasion in that District. ² Though the Government contended that Clemente's accounting firm prepared the returns in the Southern District and mailed them to his residence in the Eastern District for signing, it represented that neither the mailing of the returns nor of any other items will be used to establish venue in the Southern District. The Government read § 3237(b) to permit the defendant to elect trial of tax counts in his district of residence only when a mailing is used to establish venue elsewhere.

The District Court (Hon. Leonard B. Sand, Judge) granted Clemente's motion to transfer venue for the tax counts to the Eastern District of New York. Judge Sand concluded that the tax counts fall within the statutory definition of an offense that "involves use of the mails" because in fact the mails were used in the course of activity alleged to be unlawful. This broad, though arguably literal, reading of the statute has been accepted by other district courts, United States v. DeMarco, 394 F.Supp. 611 (D.D.C.1975); United States v. Youse, 387 F.Supp. 132 (E.D.Wis.1975); see also United States v. Turkish, 458 F.Supp. 874, 878 n.5 (S.D.N.Y.1978); United States v. Dalitz, 248 F.Supp. 238 (S.D.Cal.1965), though the issue does not appear to have been considered by any appellate court. ³ The Government responded with a superseding indictment, which charged Clemente with all of the same offenses, including, in Counts 200-209, the income tax offenses; as redrafted, however, the tax counts omitted any reference to the mailing of a tax return. Clemente again moved to transfer the tax counts. Judge Sand granted the motion, having previously indicated that § 3237(b) was applicable even if a mailing was not alleged in the indictment. The Government seeks a writ of mandamus to test the trial court's construction.

Section 3237(b) was added to the Criminal Code in 1958, P.L. 85-595, 72 Stat. 512 (1958). It is an exception to § 3237(a), which permits prosecution of continuing offenses in any district in which the offense was begun, continued, or completed. Section 3237(a) also specifically provides that any offense involving use of the mails is within the category of continuing offenses and may be prosecuted in any district from, through, or into which the mail moves.

Section 3237(b) provides that for certain offenses a defendant has an option to require prosecution in the district of his residence. The circumstances in which the option applies are "where an offense is described in section 7203 of the Internal Revenue Code of 1954, or where an offense involves use of the mails and is an offense described in section 7201 or 7206(1), (2), or (5) of such Code . . . ." Since the tax counts of the pending indictment charge Clemente with violations of §§ 7201 and 7206(2), the availability of the residence venue option depends upon whether these counts charge an offense that "involves use of the mails" within the meaning of § 3237(b).

There are at least three possible interpretations of the phrase "involves use of the mails." Most broadly, the phrase could apply to an offense in the course of which a mailing occurred. More narrowly, the phrase could apply to an offense in which a mailing not only occurred but is also an element of the crime charged. ⁴ Most narrowly, the phrase could apply to an offense in which a mailing not only occurred but is also the basis on which the prosecution seeks to establish venue.

Since the statutory language does not unambiguously require any one of these three interpretations, it is appropriate to resort to available indications of legislative intent. Chief among these is the "mischief to be corrected," an important guide to statutory interpretation and one that Justice Cardozo relied upon to avoid a reading that would "stick too closely to the letter" of a statute. Warner v. Goltra, 293 U.S. 155, 158-59, 55 S.Ct. 46, 48, 79 L.Ed. 254 (1934); see also In re Letters Rogatory, 385 F.2d 1017, 1020 (2d Cir. 1967) ("The amendment must be interpreted in terms of the mischief it was intended to rectify.").

The mischief to be corrected by § 3237(b) was the prosecution of a taxpayer at a great distance from his residence simply because his tax return had been mailed to an Internal Revenue Service office located in a district remote from the taxpayer's district of residence. Congressman Prince H. Preston, who introduced the bill, H.R. 8252, 85th Cong., 2d Sess. (1958), that became § 3237(b), told a House Judiciary Subcommittee hearing of the unfairness of requiring a defendant from Savannah, in the Southern District of Georgia, to defend in Atlanta, in the Northern District of Georgia, solely because the Collector's office was located in Atlanta. Hearings on H.R. 8252 Before Subcommittee No. 4 of the House Committee on the Judiciary, 85th Cong., 2d Sess. 7, 10-12 (Apr. 25, 1958) (unpublished). The Subcommittee also heard similar complaints on behalf of District of Columbia taxpayers required to defend in the District of Maryland because their returns were mailed to Baltimore. Id. at 27. Reading the statute to apply only when the prosecution uses a mailing to establish venue in a district other than the district of the defendant's residence fully meets the problem that concerned the Congress.

There are additional indications that Congress did not intend the occurrence of any mailing in the course of an offense to provide the defendant with the option to transfer venue to his district of residence. Congressman Preston told the subcommittee hearing, "The bill would not cover situations where the use of the mails is not an ingredient of the offense charged." ⁵ Id. at 6. Moreover, both the House and Senate reports observed that "in the type of case covered by this bill, the acts for which the defendant is really being tried are generally committed in the district in which he resides and certainly bear little or no relationship to the place where his tax return is received." H.R.Rep.No. 1890, 85th Cong., 2d Sess. (1958); S.Rep.No. 1952, 85th Cong., 2d Sess. 2 (1958), Reprinted in (1958) U.S.Code Cong. & Admin.News, pp. 3261, 3262. That observation surely excludes a prosecution like Clemente's since the Government is undertaking to prove that his criminal conduct, not the receipt of any mailed item, occurred in the Southern District of New York. There is no indication that Congress intended to give a taxpayer the option to be tried in his district of residence when it is his criminal conduct and not the use of the mails that the Government relies upon to establish venue elsewhere.

Furthermore, when Congress selected subsections of § 7206 of the Internal Revenue Code to which § 3237(b) would apply, it included only subsections (1), (2) and (5), which are the ones where the mailing of a return might otherwise be used to force a taxpayer to defend far from his district of residence. Omitted were subsections (3) and (4); these subsections cover offenses in which some use of the mails might occur, but not a mailing to some distant I.R.S. office where a return is to be filed.

Finally, a construction of § 3237(b) that relies upon any mailing in the course of an offense should be rejected because it leads to bizarre results unlikely to have been intended by Congress. In a multi-defendant case such as this, where the Government alleges that the evidence of defendant's racketeering is also evidence of his receipt of unreported income, a transfer of the tax counts to the district of residence would mean that the witnesses would bear the inconvenience and the public would bear the cost of two substantially similar trials, in the event that either all counts against Clemente or only the tax counts against him were transferred. A broad reading of the statute also leads to unintended results in cases involving only one defendant. Consider the defendant who earns unreported income in District A, has his tax...