U.S. v. Conlin, 648

• Citation: 551 F.2d 534
• Decision Date: 17 March 1977
• Docket Number: D,No. 648,648
• Parties: 77-1 USTC P 9291 UNITED STATES of America, Plaintiff-Appellee, v. Walter R. CONLIN, Defendant-Appellant. ocket 76-1346.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 534

551 F.2d 534

77-1 USTC P 9291

UNITED STATES of America, Plaintiff-Appellee, v. Walter R. CONLIN, Defendant-Appellant.

No. 648, Docket 76-1346.

United States Court of Appeals, Second Circuit.

Argued Jan. 10, 1977.

Decided March 17, 1977.

Michael R. Wolford, Rochester, N.Y. (Nixon, Hargrave, Devans & Doyle, Rochester, N.Y., of counsel), for defendant-appellant.

Eugene Welch, Rochester, N.Y. (Richard J. Arcara, U.S. Atty. W. D. Buffalo, N.Y., Gerald J. Houlihan, Asst. U.S. Atty., Rochester, N.Y., of counsel), for plaintiff-appellee.

Before MANSFIELD and VAN GRAAFEILAND, Circuit Judges, and OWEN, District Judge. ^*

VAN GRAAFEILAND, Circuit Judge:

Following a jury trial in the United States District Court for the Western District of New York, Walter R. Conlin was convicted on eight counts of willfully preparing false and fraudulent Federal income tax returns in violation of 26 U.S.C. § 7206(2). He was also convicted of destroying tax returns filed with the Small Business Administration (18 U.S.C. § 2071(a)) and of submitting to the SBA a copy of an income tax return which contained false and fraudulent statements. (18 U.S.C. § 1001). We affirm appellant's convictions on all counts.

Appellant is a licensed public accountant and the sole proprietor of the Southern Tier Accounting and Tax Bureau in Corning, New York. Between 1972 and 1974, he assisted various clients in the preparation of their Federal income tax returns. The information for these returns was secured from worksheets prepared by the clients, personal interviews and returns from previous years. The Government's proof relative to § 7206(2) consisted largely of the testimony of appellant's clients that they had submitted accurate information to him and that this had not been incorporated in the returns; that false deductions had been claimed and legitimate deductions padded. Although Conlin gave detailed explanations for the discrepancies, he was convicted on eight of the thirteen counts with which he was charged.

Challenging the sufficiency of the evidence to support his conviction, appellant contends that the Government's proof disclosed only "errors made by an overworked and understaffed taxpreparer". This argument is completely without merit. The trial judge instructed the jury that appellant could not be convicted unless he acted "with criminal or evil intent" and that his conduct was not willful if he acted with "negligence or carelessness, or mistake, or innocently, or even with gross negligence or gross carelessness. . . ." This charge comported with the willfulness standard prescribed in United States v. Pomponio, 429 U.S. 10, 11, 97 S.Ct. 22, 50 L.Ed.2d 12 (1976) and adequately informed the jury of the quality of evidence needed to convict. Such evidence was present in abundant quantity. That appellant was more than simply careless is indicated by both the frequency and similarity of his misstatements. See United States v. Herskovitz, 209 F.2d 881, 884 (2d Cir. 1954); United States v. McKee, 456 F.2d 1049, 1050 (6th Cir.), cert. denied, 407 U.S. 910, 92 S.Ct. 2436, 32 L.Ed.2d 684 (1972). The proof established a pattern of overstated medical expenses, interest expenses and casualty losses, see United States v. Tager, 479 F.2d 120, 122 (10th Cir. 1973), cert. denied, 414 U.S. 1162, 94 S.Ct. 924, 39 L.Ed.2d 115 (1974), and unusually high service fees based on the excessive refunds which followed. It was sufficient to support appellant's conviction on all eight counts.

The charge of destroying government documents stems from an incident which took place on January 18, 1974 at the Elmira office of the SBA. In the aftermath of Hurricane Agnes, Conlin assisted many of his clients in obtaining disaster relief loans from the SBA; and, for this purpose, he accompanied one Thomas Gill to a meeting in Elmira with SBA official James Cristofero. Cristofero testified that he showed Conlin and Gill copies of Gill's income tax returns which had been submitted to the SBA on January 4, 1974 in support of Gill's application for a disaster relief loan and requested assurance that the originals had been filed with the IRS. He then asked them to sign the copies Gill as the taxpayer and Conlin as the preparer. When both had signed, Cristofero gave Conlin a memorandum stating that the SBA would be verifying the information on the returns with the IRS, whereupon Conlin grabbed the signed copies and put them in his briefcase. He ignored Cristofero's demand for their return, and, despite a warning that he was destroying government property, began to tear them up and stuff the pieces in his clothing.

At this point, two FBI agents, summoned by Cristofero, arrived and witnessed Conlin destroying the documents. When they asked Conlin what he was doing, he did not respond. He was then arrested and given appropriate Miranda warnings. FBI Agent Bucher testified that, about an hour later, Conlin, suddenly and without solicitation, broke his silence. He told Bucher that the documents he had destroyed were not submitted to the SBA on January 4 but that he had brought them with him that same day. When the torn pieces were recovered and pieced together, it was discovered that they overstated the amount of Mr. Gill's disaster loss by more than $100,000.

Relying upon Doyle v. Ohio, 426 U.S. 610, 96 S.Ct. 2240, 49 L.Ed.2d 91 (1976), Conlin contends that the Government erred in introducing testimony concerning his silence. We disagree. The first mention of Conlin's silence came during the Government's direct examination of Mr. Cristofero, when he was recounting the events surrounding Conlin's seizure of the tax returns. He testified that he asked Conlin what he was doing, told him that destroying government documents was a crime, and that Conlin said nothing. Cristofero further testified that he then called Mr. McDevitt, another SBA official, into his office. When asked whether Conlin said anything to Mr. McDevitt, Cristofero replied, "(H)e may have said something, but nothing that I can recall." During the cross-examination of Mr. Cristofero, Conlin's counsel went squarely to the issue of what was said by Conlin to the witness or to the FBI, seeking an admission that Conlin had from the outset told Cristofero that he had brought the documents with him to the office that day and that he intended merely to leave with what he had brought. This was the version later testified to by Conlin himself.

When it became apparent that Conlin was adopting the position that he had spoken throughout the episode and had told both SBA and FBI officials that he had brought the documents with him on January 18, the U.S. Attorney brought out what he understood to be the facts. FBI Agent Rudy testified that, when he and his partner, Agent Bucher, arrived at the SBA offices, they asked Conlin what he was doing and he did not respond. Rudy testified that Conlin was then arrested, given his Miranda rights, and continued to remain silent. Bucher corroborated Rudy's testimony concerning Conlin's silence but stated that, about an hour after his arrest, Conlin voluntarily broke his silence and offered his exculpatory version of the events.

Appellant's contentions concerning the making of exculpatory statements raised an issue which the Government was entitled to meet. It was Conlin's counsel who propounded the theory that Conlin had spoken throughout the incident and had maintained from the outset that he had brought the items with him that day. "Having thus raised the question . . ., (appellant) opened the door to a full and not just selective development of that subject." United States v. Fairchild, 505 F.2d 1378, 1383 (5th Cir. 1975). The better course for the trial judge would have been to caution the jury that the evidence of Conlin's silence after receiving his Miranda warnings was being received solely to rebut Conlin's version of the incident, and to instruct that a defendant's decision to remain silent, in reliance on his constitutional rights, is not in itself indicative of guilt and could not be considered for that purpose. However, the admission of this evidence under the circumstances here did not deprive Conlin of a fair trial.

Appellant was also convicted of making false representations to the SBA in connection with his own application for a disaster relief loan. The Government's proof showed that in January 1973 appellant submitted a loan application, attached to which was a copy of an income tax return dated April 2, 1972. This return substantially overstated the amount of appellant's estimated tax payments. Moreover,...