U.S. v. Crooks

• Decision Date: 25 November 1986
• Docket Number: Nos. 84-5165,84-5166,84-5174 and 84-5182,s. 84-5165
• Citation: 804 F.2d 1441
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. John E. CROOKS, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Joseph R. LAIRD, Jr., Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. John E. CROOKS and Joseph R. Laird, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1441

804 F.2d 1441

UNITED STATES of America, Plaintiff-Appellee, v. John E. CROOKS, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Joseph R. LAIRD, Jr., Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. John E. CROOKS and Joseph R. Laird, Defendants-Appellants.

Nos. 84-5165, 84-5166, 84-5174 and 84-5182.

United States Court of Appeals Ninth Circuit.

Argued and Submitted July 11, 1986.

Decided Nov. 25, 1986.

Bruce G. Merritt, Asst. U.S. Atty., Los Angeles, Cal., for plaintiff-appellee.

John E. Crooks, Panorama City, Cal., pro se.

Joseph R. Laird, Jr., Sherman Oaks, Cal., pro se.

Appeal from the United States District Court for the Central District of California.

Before CANBY, REINHARDT and NOONAN, Circuit Judges.

CANBY, Circuit Judge:

Joseph R. Laird, Jr., appeals his conviction by a jury of conspiracy to defraud the United States (18 U.S.C. Sec. 371) and of aiding in the filing of false tax returns and of filing false tax returns (26 U.S.C. Sec. 7206(1), (2)). John E. Crooks appeals his conviction by a jury of conspiracy to defraud the United States. We affirm.

FACTS:

Laird was president of Cal Am Corporation (Cal Am), a tax shelter promoter in Encino, California. Crooks, a former law partner of Laird, was attorney for Cal Am. Cal Am sold tax shelter investments purporting to entitle investors to writeoffs on their individual tax returns for mineral royalty payments under a tax shelter scheme devised by Laird.

Under Laird's scheme, investors were solicited to purchase interests in limited partnerships organized by Cal Am. The limited partnerships owned coal leases. An investor was told that he or she could claim an income tax deduction of more than three times the investor's original investment because the partnership would make a tax deductible advance mineral royalty payment.

Because the partnerships did not have sufficient funds to make the royalty payments which exceeded the amounts being invested and the partnership assets, Laird devised what the government calls a "check cycle," but what might better be called a "check cyclone," to create canceled checks representing loans and tax deductible payments to be used to sustain the deductions in the event of an audit by the IRS. In simplified terms, the scheme consisted of creating a shell corporation to function as a lender. A bank account was opened for the lender at the same bank where the limited partnership and the payee of the tax deductible payment, which was also controlled by Cal Am, had their bank accounts. On the day that the limited partnership was to receive a loan to enable it to make its tax deductible payment, numerous checks from the lender to the partnership, from the partnership to the payee, and from the payee to the lender were simultaneously deposited at the bank. All of the checks cleared the bank because they offset each other. The actual scheme employed by Laird was very complex, involving Laird and Crooks were indicted, along with one other co-defendant, Turner, under a ninety-six count indictment arising out of the tax shelter scheme. Counts 1 through 44 were severed for purposes of trial, and are the only counts relevant to this appeal. Counts 1 through 14 ¹ charge Laird with mail fraud, 18 U.S.C. Sec. 1341, and Crooks and Turner with aiding and abetting, 18 U.S.C. Sec. 2. Count 15 charges all three defendants with conspiracy, 18 U.S.C. Sec. 371. The conspiracy charge alleges that Crooks, Laird and Turner conspired to commit securities fraud and to defraud the government. Counts 16 through 44 charge Laird with aiding in the filing of false tax returns and the filing of false tax returns, 26 U.S.C. Sec. 7206(1) and (2).

over 100 limited partnerships, several lenders, conduit accounts, approximately a thousand checks and millions of dollars.

On August 19, 1983, the jury returned verdicts acquitting all defendants on counts 1 through 14 and acquitting defendant Turner on count 15. The jury was deadlocked as to the remaining counts. On September 16, 1983, the district court declared a mistrial and ordered a new trial on count 15 and certain of counts 16 through 44.

Laird and Crooks filed an interlocutory appeal. We summarily affirmed. The retrial of Crooks and Laird began on April 25, 1984. During trial, the district court struck the securities fraud objective of the conspiracy alleged in Count 15 on the ground that it was barred by res judicata, and the trial proceeded with the sole objective of the conspiracy being fraud on the government. ² In addition to count 15, Laird was retried on counts 16, 22, 24, 35, 38 and 44. The jury returned verdicts of guilty against Laird on all counts and against Crooks on count 15. Laird and Crooks raise numerous issues on this appeal.

DISCUSSION:

I. Speedy Trial Act, 18 U.S.C. Sec. 3161 et seq.

Laird and Crooks claim that their rights under the Speedy Trial Act, 18 U.S.C. Sec. 3161, were violated.

18 U.S.C. Sec. 3161(e) governs speedy trial considerations for retrial situations.

If the defendant is to be tried again following a declaration by the trial judge of a mistrial or following an order of such judge for a new trial, the trial shall commence within seventy days from the date the action occasioning the retrial becomes final. If the defendant is to be tried again following an appeal or a collateral attack, the trial shall commence within seventy days from the date the action occasioning 18 U.S.C. Sec. 3161(e). Laird and Crooks argue that more than seventy days elapsed between the date on which the action occasioning retrial became final and the commencement of their retrial.

the retrial becomes final, except that the court retrying the case may extend the period for retrial not to exceed one hundred and eighty days from the date of the action occasioning the retrial becomes final if unavailability of witnesses or other factors resulting from passage of time shall make trial within seventy days impractical. The periods of delay enumerated in section 3161(h) are excluded in computing the time limitations specified in this section. The sanctions of section 3162 apply to this subsection.

We review the district court's determination of factual issues under the Speedy Trial Act for clear error. United States v. Feldman, 788 F.2d 544, 547-48 (9th Cir.1986). Questions of law are reviewed de novo. Id.

Appellants argue that the twenty-eight day period between the dismissal of the jury in the first trial and the entry on October 24, 1983, of the order setting their retrial should be included in calculating the speedy trial period. This argument is meritless. The district court's order, not the dismissal of the jury, constituted the action occasioning the new trial. Thus, the first day of the seventy day period prescribed by 18 U.S.C. Sec. 3161(e) would have been October 25, 1983, except that appellants filed a notice of interlocutory appeal on that day.

The filing of the interlocutory appeal triggered a period of excludable delay. 18 U.S.C. Sec. 3161(h)(1)(E). There is a dispute over when this period of excludable delay ended. Appellants contend that it ended on February 10, 1984, when this court summarily affirmed the district court's ruling, and ordered that the mandate issue forthwith. The government contends that the period did not end until February 15, 1984, when this court amended its order of February 10 to insert an erroneously omitted word. The district court entered an order ruling that the excludable period did not end until February 24, 1984, when the mandate of this court was formally spread upon the records of the district court. We conclude that none of these proposed dates is the correct one.

Section 3161(h)(1)(E) simply provides for exclusion of any period of "delay resulting from any interlocutory appeal." It does not set the boundaries of the excludable period. The parties refer to section 3161(e), which provides that if a defendant is to be "tried again following an appeal ..., the trial shall commence within seventy days from the date the action occasioning the retrial becomes final" unless the trial judge extends the period for reasons not relevant here. Section 3161(e) is not literally applicable to interlocutory appeals; it refers to appeals requiring a retrial. Interlocutory appeals interrupt the seventy day period; they do not start it running. Nevertheless, it appears to us appropriate to apply the rule of section 3161(e) by analogy to interlocutory appeals, in order to determine when the time begins to run again. We therefore must determine what was the "action occasioning" further proceedings in the trial court following the interlocutory appeal, and when that action became final.

We conclude that the action which occasions the trial following an unsuccessful interlocutory appeal is the receipt of the appellate court's mandate by the district court, as reflected in the records of the district court. ³ It is that event which causes the district court to move the case forward toward trial. The records of the district court reflect that this court's mandate in the interlocutory appeal was lodged with the district court on February 14, 1984. The technical amendment that this court made to its order on February 15 did not lead to a recall or otherwise affect the finality of the mandate already issued. Nor should the district court's delay in formally spreading the mandate on its records serve to extend the excludable period The defendants were brought to trial on April 25, 1984, seventy one days later. The seventy day limit was not violated, however, because on April 23, the government made a motion in limine that was denied on April 24. On April 24, the defendants moved to recuse the trial judge, and the motion was referred to another judge, who denied it on the same day. April 23 and 24 are therefore excludable under Sec. 3161(h)(1)(F) (delay resulting from a pretrial motion). After the exclusion of...