U.S. v. Cohen

• Decision Date: 11 March 1980
• Docket Number: No. 79-5108,79-5108
• Citation: 617 F.2d 56
• Parties: 80-1 USTC P 9288, 5 Fed. R. Evid. Serv. 762 UNITED STATES of America, Appellee, v. Michael H. COHEN, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 56

617 F.2d 56

80-1 USTC P 9288, 5 Fed. R. Evid. Serv. 762

UNITED STATES of America, Appellee, v. Michael H. COHEN, Appellant.

No. 79-5108.

United States Court of Appeals, Fourth Circuit.

Argued Dec. 6, 1979.

Decided March 11, 1980.

Richard G. White, Washington, D. C., for appellant.

Stephen G. Jory, U. S. Atty., Elkins, W. Va. (William A. Kolibash, Asst. U. S. Atty., Betsy C. Steinfield, Third Year Law Student, Wheeling, W. Va., on brief), for appellee.

Before BUTZNER and PHILLIPS, Circuit Judges and WALTER E. HOFFMAN, Sr., United States District Judge for the Eastern District of Virginia, sitting by designation.

PER CURIAM:

Cohen appeals his conviction after a jury trial for violation of 26 U.S.C. § 7206(2) urging that the evidence adduced at trial did not make out the offense charged, that certain evidence was erroneously admitted, that the jury was incorrectly instructed, and that the sentence was in excess of the statutory maximum. We affirm the judgment but remand to the district court for resentencing.

I

On March 17, 1978, a team of Internal Revenue Service agents conducted an undercover surveillance of defendant Cohen at Shenandoah Down racetrack. Cohen cashed four winning tickets in the Big Exacta, a bet that requires the bettor to select first and second place winners in two races. In accordance with 26 U.S.C. § 6041, winners of this bet are required to sign a W2-G form reporting the amount of their winnings to the IRS. On the theory that Cohen was a "ten percenter," one who fills out the form for the "true" winners of the bet in exchange for a percentage of the winnings, he was indicted under 26 U.S.C. § 7206(2), which provides in part:

Any person who

(2) Aid or assistance Willfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with any matter arising under, the internal revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, affidavit, claim or document.

shall be guilty of a felony . . . .

At trial, Workman, a racetrack patron, testified that he gave his winning ticket to Cohen to cash and that Cohen kept approximately $46 of the $846.80 proceeds. Over defendant's objection, the government introduced testimony about the number of winning tickets cashed by Cohen between January 1 and March 23, 1978. Cohen testified and admitted the transaction but characterized his actions as not willful or fraudulent. In rebuttal the government offered the testimony of an investigator from the Thoroughbred Racing Protective Board, who testified, based on business records of the Board, that Cohen had been ejected from several racetracks for ten percenting. Defendant was convicted, fined $2,000 and sentenced to three years imprisonment, 23 months suspended, and four years probation.

II

Cohen contends that the form he signed was not "false as to any material matter" because he listed his own name and was in fact the recipient of the winnings. This argument is unpersuasive because defendant was merely the conduit for the winnings. See United States v. Snyder, 549 F.2d 171 (10th Cir. 1977), United States v. Walsh, 544 F.2d 156, 160 (4th Cir. 1976) (citing cases). Cohen also argues that a loss of tax revenues must be shown before a conviction may be obtained. The statute does not require loss of revenue as an element of proof of violation of § 7206(2). See United States v. Perez, 565 F.2d 1227, 1233-34 (2d Cir. 1977).

Defendant urges that evidence of other winning tickets cashed by him and the testimony by the Board investigator were erroneously admitted. This evidence of "other acts" by defendant is admissible under Fed.R.Evid. 404(b). To obtain a conviction under § 7206(2) the government must prove that defendant's actions were willful. Use of character evidence of other acts by defendant to demonstrate intent or knowledge is explicitly sanctioned by rule 404. The record reflects the trial court's careful balancing of the prejudice to defendant against the government's need to introduce the evidence. See United States v. DiZenzo, 500 F.2d 263 (4th Cir. 1974). The decision to admit this evidence was within the discretion committed to the trial court. United States v. Mastrototaro, 455 F.2d 802 (4th Cir. 1972).

Defendant also challenges the instructions to the jury. No objection was made to the instructions as required by Fed.R.Crim.P. 30. The challenged instructions do not amount to "plain error" under Fed.R.Crim.P. 52(b). The jury was instructed that the statute prohibited "causing" the preparation or presentation of a false return. This instruction has been upheld in the prosecution under § 7206(2) of the person who actually prepared the false form. United States v. Perez, 565 F.2d at 1234. Cohen also challenges an instruction listing "preparing or presentation" of a false return as an element of the offense. Although this is not an element of the offense under § 7206(2), the district judge did correctly list the required elements of proof elsewhere in the charge and we conclude that the challenged portion of the instruction did not prejudice defendant.

III

Defendant, as noted, was given a sentence of three years imprisonment, with twenty-three months suspended, and four years probation, together with a $2,000 fine. Thus, if the sentence is valid, defendant would have thirteen months to serve without regard to parole or statutory credits.

The record does not disclose whether the district judge considered that he was acting under the "split-sentence" provision of 18 U.S.C. § 3651 ¹ or under an assumed inherent power to impose such a partially suspended sentence of imprisonment. Be that as it may, § 3651 provides the sole source of the district courts' power to suspend the execution of sentences; a federal court has no inherent power to suspend sentences or place defendants upon probation. ² See Ex parte United States, 242 U.S. 27, 37 S.Ct. 72, 61 L.Ed. 129 (1916); United States v....