U.S. v. Briscoe

• Decision Date: 05 September 1995
• Docket Number: No. 94-1414,94-1414
• Citation: 65 F.3d 576
• Parties: 150 L.R.R.M. (BNA) 2226, 76 A.F.T.R.2d 95-6293, 130 Lab.Cas. P 11,417 UNITED STATES of America, Plaintiff-Appellee, v. Tommy BRISCOE, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 576

65 F.3d 576

150 L.R.R.M. (BNA) 2226, 76 A.F.T.R.2d 95-6293,

130 Lab.Cas. P 11,417

UNITED STATES of America, Plaintiff-Appellee, v. Tommy BRISCOE, Defendant-Appellant.

No. 94-1414.

United States Court of Appeals Seventh Circuit.

Argued Feb. 22, 1995.

Decided Sept. 5, 1995.

Barry Rand Elden, Asst. U.S. Atty., John Podliska (argued), Office of the United States Attorney, Criminal Receiving, Appellate Div., Chicago, IL, for plaintiff-appellee.

Clarence L. Burch, Burch & Delgado, Chicago, IL, Julius L. Echeles (argued), Chicago, IL, for defendant-appellant.

Before EASTERBROOK, RIPPLE and ROVNER, Circuit Judges.

RIPPLE, Circuit Judge.

Tommy Briscoe, the former president of the Chicago Local of the American Postal Workers Union, AFL-CIO, was charged and convicted of two counts of mail fraud, six counts of wire fraud, theft and embezzlement of union funds, causing the issuance of an illegal union loan, destruction of financial records required to be kept by a labor union, income tax evasion, failure to file a federal income tax return, and filing a false federal income tax return. Mr. Briscoe was sentenced to forty-six months of incarceration and three years of supervised release on four of the counts and a concurrent twelve months of incarceration and one year of supervised release on the ten other counts. Mr. Briscoe was also ordered to make $50,000 restitution to the Chicago Local Union, and to pay a special assessment of $625. Mr. Briscoe appeals. We affirm the judgment of the district court.

I BACKGROUND

A. Facts

In August 1982, Tommy Briscoe, president of the 3,000 member Chicago Local of the American Postal Workers Union (hereinafter "Union" or "APWU") met with Abram Shy Glass, president of Sir Finance Corporation, to discuss a proposal to operate a loan program for postal employees. Under the proposal, Chicago APWU members would be eligible for loans and would repay Sir Finance through direct payroll deductions. After a series of negotiations, Briscoe and Glass agreed that Sir Finance would be allowed to use union office space and union administrative personnel to operate the loan program and that Sir Finance would pay fifty cents to Briscoe for every loan repayment made by each borrower. Mr. Briscoe was also given the sole authority to approve the loan applications.

Pursuant to this agreement, Glass made fifty-nine payments, totaling $120,000, to Mr. Briscoe or third parties (at Briscoe's direction) between December 1982 and June 1987. Many checks given to Mr. Briscoe were made payable to an inactive business that possessed a dormant checking account on which Mr. Briscoe was a signatory.

All of the loan payments made by the employees, including a $15 application fee, were collected by payroll deduction. The deductions were made by the Postal Service at the Postal Data Center in Minneapolis, Minnesota. Those deductions, from 1984 until 1988, were sent by mail or wire transfer to Sir Finance's bank in Evanston, Illinois. The effective annual percentage rate of the loans was sixty-seven and one-half percent. The applications were processed exclusively by union administrative personnel who estimated that they spent, at minimum, ninety percent of their time processing loan applications. Mr. Briscoe was the only party who supervised the union personnel.

From the inception of the Sir Finance loan program, postal employees who were not members of the Union were permitted to procure loans through the program. Every employee seeking a loan, whether union member or not, would be responsible for the $15 service fee on each loan. In November 1984, this practice was stopped after an investigator for the Illinois Department of Finance questioned Mr. Glass about the fee. ¹ However, by April 1985, Mr. Briscoe instituted a program, by issuing, on Chicago APWU letterhead, a signed notice that required each loan applicant who was not a member of the Union to "become an associate member of Chicago-APWU." The notice also stated that the "associate membership yearly fee [was] $12 payable prior to loan pick up." Gov.Ex. 119; see Tr. II at 242-47.

The administrative staff was instructed by Briscoe to tell loan applicants who complained about the $12 fee that nonmembers of the Chicago APWU had to become associate members of the Union to qualify for a loan. At Briscoe's direction, the union personnel were to collect the associate member fees in cash only. Loan applicants who paid the fee were given a receipt by the union staff. A duplicate receipt was retained in an associate membership fee book. These collected fees and the receipt book were then turned over to Briscoe personally at the end of the day. If Briscoe was absent from the office, the cash was placed in a drawer in Briscoe's office desk.

Between 1984 and 1987, the union staff collected 7,044 associate membership fees totalling $84,528. These fees, given to Mr. Briscoe, were neither recorded in the Union's books, nor deposited in any of its bank accounts. James Thomas, a bookkeeper for the Union from February 1986 until August 1987, testified that he had observed Mr. Briscoe destroying associate membership fee records by tearing them up and placing them in a trash receptacle.

The trial record also contains evidence that Mr. Briscoe was responsible for taking other money earmarked for the Union. In 1986 and 1987, the Union sponsored a bowling tournament for its members. Cash entries of over $12,000 were collected for those years and delivered to Mr. Briscoe, but that cash was never recorded on union books or deposited in union bank accounts. Additionally, Mr. Briscoe arranged for the Union to pay out cash to himself and a personal friend, Doris Mayes. First, he entered into an agreement, as president of the APWU, with Mayes in which Mayes loaned the Union $15,000 and the Union in return paid Mayes ten percent interest per month ($1500). Ultimately, the Union paid Mayes $43,000, $28,000 of which represented interest. Second, Briscoe arranged for over $5,000 to be paid to the FDIC from union accounts in satisfaction of a personal obligation Briscoe owed to a bank now managed by the FDIC. Finally, in 1987, Briscoe arranged for the Chicago APWU to pay $13,593 of overdue taxes he personally owed to the Internal Revenue Service. Briscoe wrote and signed a letter requesting a $20,000 salary advance. Two union purchase vouchers, signed by Briscoe, authorized the disbursement of $13,593 to the IRS and $6,407 to Briscoe. The check to the IRS was recorded in the general ledger of the Union as penalties and interest expense, IRS; the Briscoe check, however, was recorded as an advance to Briscoe.

Mr. Briscoe's personal tax problems with the IRS were not resolved fully by the issuance of the union check. For the tax years 1980-82 and 1985 he filed late returns and in 1983, 1984 and 1987, he failed to file a return. For all of the deficient tax years, Mr. Briscoe owed taxes in addition to what had been withheld from his salary. In 1986, the only year in which Briscoe filed a timely tax return, he submitted the $13,593 check from the Union to cover his tax liabilities. Given the payments that Mr. Briscoe had the Union disburse, and the payments that Mr. Briscoe kept, there was income totalling approximately $98,000 that went unreported.

B. Prior Proceedings

On April 12, 1991, Mr. Briscoe was charged in a two count indictment for tax evasion and failure to file an individual federal income tax return in violation of 26 U.S.C. Secs. 7201 and 7203. Eventually, a third superseding indictment was returned in October 1992. This indictment charged Mr. Briscoe with seventeen counts of illegal activity. Counts one and two alleged mail fraud in violation of 18 U.S.C. Sec. 1341; ² counts three through eight alleged wire fraud in violation of 18 U.S.C. Sec. 1343; ³ count nine claimed theft and embezzlement of union funds in violation of 29 U.S.C. Sec. 501(c); count ten alleged causing the issuance of an illegal union loan in violation of 29 U.S.C. Sec. 503; count eleven claimed destruction of financial records required to be kept by a labor union in violation of 29 U.S.C. Sec. 439(c); counts twelve and sixteen alleged income tax evasion for years 1984 and 1987 under 26 U.S.C. Sec. 7201; counts thirteen and seventeen alleged failure to file federal income tax returns for years 1984 and 1987 under 26 U.S.C. Sec. 7203; and counts fourteen and fifteen claimed the filing of false income tax returns for years 1984 and 1986, in violation of 26 U.S.C. Sec. 7206(1).

Mr. Briscoe's case was tried before a jury from April 14, 1993 until May 24, 1993. After five days of deliberation, the jury returned a verdict of guilty on counts one through thirteen, and count fifteen, and not guilty on counts fourteen, sixteen and seventeen. In January 1994, Mr. Briscoe was sentenced to forty-six months of incarceration and three years of supervised release on counts six through nine and a concurrent term of twelve months of incarceration and one year of supervised release for counts one through five, ten through thirteen and fifteen. Mr. Briscoe was also ordered to pay restitution to the Union in the amount of $50,000 and to pay a special assessment of $625.

II ANALYSIS

Mr. Briscoe raises a number of issues on appeal. First, he contends that, under the holding of McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), the indictment and evidence fail to allege a mail and wire fraud scheme to defraud the Union of its property. Additionally, Mr. Briscoe submits that the evidence of record was insufficient to support his convictions: (1) for embezzlement of the associate membership fees (count nine) and destruction of records relating to the fees (count eleven); (2) for making an illegal loan (count ten); and (3) for tax evasion in 1984, willful failure to file a tax return for 1984 (counts twelve and thirteen), and filing a false tax return for 1986 (count fifteen). ...