U.S. v. Fontenot

• Decision Date: 24 October 1980
• Docket Number: No. 79-5512,79-5512
• Citation: 628 F.2d 921
• Parties: 80-2 USTC P 9751 UNITED STATES of America, Plaintiff-Appellee, v. Joseph D. FONTENOT, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 921

628 F.2d 921

80-2 USTC P 9751

UNITED STATES of America, Plaintiff-Appellee, v. Joseph D. FONTENOT, Defendant-Appellant.

No. 79-5512.

United States Court of Appeals Fifth Circuit.

Oct. 24, 1980.

Stephen R. Wolfson, William J. Zeutzius, Pasadena, Cal., for defendant-appellant.

M. Carr Ferguson, Asst. Atty. Gen., Gilbert E. Andrews, Chief, Appellate Section, Thomas M. Preston, Jr., Robert E. Lindsay, Attys., Tax Div., U. S. Dept. of Justice, Washington, D. C., for the United States.

Appeal from the United States District Court for the Northern District of Florida.

Before RONEY, HILL and FAY, Circuit Judges.

FAY, Circuit Judge:

Appellant seeks reversal of his conviction for violating Section 7206(1) of the Internal Revenue Code, which makes it unlawful to willfully make false statements in connection with the filing of a tax return. Appellant was found guilty on two counts of violating this section, one count with respect to a 1972 corporate tax return and the other with respect to the 1973 tax return for that corporation. Appellant was sentenced to six months imprisonment on the first count and three years probation on the second count. We affirm.

Appellant owned and operated Playground Optical Co., Inc., a corporation whose business was the manufacture and sale of eyeglasses and hearing aids. The corporation had a store in Fort Walton Beach, Florida and one in Pensacola, Florida. The sales invoices for the Fort Walton Beach store, at which appellant worked, were registered on two separate machines. The first machine was used each day until invoices totalling approximately two-hundred and twenty dollars had been recorded. At that point, all other invoices were recorded on the second machine. Only the money received with respect to the invoices from the first machine, however, were recorded on the corporation's books and deposited in the bank account of the Fort Walton Beach store. It is the disposition of the proceeds from the transactions recorded on the invoices from the second machine around which this case revolves. Appellant removed these invoices daily. A government witness, one of appellant's employees, testified that they were thrown in the trash, from which he removed them each day. ¹ Appellant denied throwing the invoices away, asserting that they were kept in the store. Regardless, it is undisputed that some of the money received with respect to sales covered by those invoices was transferred for accounting purposes to the Pensacola store and recorded on the corporation's books as originating there. Appellant contends that all of the monies received with respect to those invoices were reported on the corporation's tax return. The government argues that only a portion of the proceeds from those invoices were transferred and reported; the remainder, in the form of cash, going unreported. The corporation's books reflect the total amount of the invoices for the Pensacola store, that is those which originated there and those which were transferred there from the Fort Walton Beach store, as a figure substantially less than it would have been had all of the second machine invoices from the Fort Walton Beach store been transferred and recorded as they were to have been. Simply put, the corporation's books did not reflect the full amount invoiced at both stores. By transferring the funds between the stores some was "lost."

On appeal, appellant asserts the following errors.

1. Sufficiency of the Evidence

Appellant contends that the government failed to establish a prima facie case and, therefore, it was error for the trial court to deny his motions for acquittal. We find no merit in this argument.

Appellant correctly points out that in order to establish its case the government must prove both falsity as to a material matter in the tax return and knowledge of such falsity by the accused at the time the return was signed. United States v. Miller, 545 F.2d 1204, 1212 (9th Cir. 1976), cert. denied, 430 U.S. 930, 97 S.Ct. 1549, 51 L.Ed.2d 774 (1977); United States v. Cashio, 420 F.2d 1132 (5th Cir.), cert. denied, 397 U.S. 1007, 90 S.Ct. 1234, 25 L.Ed.2d 420 (1970). The role of this Court is to determine whether the evidence, when viewed in a light most favorable to the government's position, see Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942), is such that the trier of fact could reasonably conclude that appellant was guilty beyond a reasonable doubt. ² United States v. Fox, 613 F.2d 99, 101 (5th Cir. 1980). We hold that there was more than enough evidence from which the jury could reach that conclusion. Several witnesses testified, and appellant admitted, that the corporate books reflected an invoice amount for the Pensacola store substantially less than that amount which would have been reflected had all invoices which were to have been "transferred" actually been recorded. The record also indicates that the amount of income reported on the corporation's tax return was substantially less than the invoice amount, after that amount was corrected to reflect the invoices not previously recorded. On that basis alone, the jury could have reasonably concluded that the appellant under-reported the corporation's income. The jury was not required to accept appellant's assertion that the total amount of money actually received was, for some unexplained reason, substantially less than the corrected invoice amount. There was also substantial evidence from which the jury could have concluded that appellant was aware of the falsity of the tax return when he signed it and that he did so willfully. Appellant admitted that the signature on the tax return was his. He admitted that he had reviewed the information contained therein before signing it. Moreover, the scheme for diverting funds from one store to another, with the unrecorded invoices as its central feature, was accomplished by appellant's own acts. ³ This is sufficient evidence that appellant acted willfully and knowingly when he filed the false tax return. ⁴

2. Abuse of Judicial Discretion

Appellant presents a laundry list of complaints against rulings and remarks of the trial court, each of which it is asserted constitutes error. For the reasons set forth herein, we disagree. Appellant's most substantial complaint ⁵ is that the trial court unduly limited his right to recross-examine the government's chief witness, Mr. Harry Williams, Jr. Particularly, appellant asserts error in the trial court's refusal to allow the fact of inconsistent statements, as to promises made by the government regarding future prosecution of that witness, to be pointed out to the jury on recross-examination.

On direct examination the witness was asked if he had received rewards or promises of rewards from the government in exchange for his testimony. He responded in the negative. On cross-examination that witness was asked specifically, several different times, if he had received promises of immunity or an understanding that "as a practical matter you would not be prosecuted." Again he responded in the negative. On redirect examination the government elicited from the witness the fact that he had been told that as a practical matter he would not be prosecuted. At the end of redirect, the trial court denied appellant's request to recross-examine the witness for the purpose of pointing out the inconsistency in his statements. The court denied this request on the grounds that no new area of questioning had been raised on redirect that would justify such recross-examination, and that the inconsistent statements spoke for themselves without further discussion. We find no error in that ruling.

The conduct of a fair trial is vested within the sound discretion of the trial court, and it will not be reversed absent proof of abuse of that discretion. United States v. Johnson, 585 F.2d 119, 125 (5th Cir. 1978); Wright v. Hartford Accident & Indemnity Co., 580 F.2d 809, 810 (5th Cir. 1978). While the presumption favors free corss-examination, United States v. Alford, 282 U.S. 687, 692, 51 S.Ct. 218, 219, 75 L.Ed. 624, 628 (1931), the purpose of recross-examination is more limited. It is properly allowed when new matters are raised on redirect or, in the court's discretion, it is determined to be necessary to a full and fair adjudication of the case. Neither justification was present here. The government simply elicited from the witness the truth as to the understanding it had with him regarding his prospects of later prosecution. Not only was it permissible for the government to do this, it was under an affirmative duty to correct the false statements made by its witness. See, Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 1196, 10 L.Ed.2d 215, 218 (1962); Mooney v. Holohan, 294 U.S. 103, 112, 55 S.Ct. 340, 341, 79 L.Ed. 791, 794 (1935). While the government could have brought this matter to the court's attention in several ways, it was quite proper to do so through redirect examination. Though the trial court could have allowed further examination by defense counsel, it was not an abuse of discretion to refuse to do so. United States v. Alonzo, 571 F.2d 1384, 1387 (5th Cir.), cert. denied, 439 U.S. 847, 99 S.Ct. 147, 58 L.Ed.2d 149 (1978). Finally, given the fact that defense counsel thoroughly discussed the inconsistent statements during closing argument, we conclude that appellant was not prejudiced by the trial court's refusal to allow recross-examination.

3. Failure to Give Miranda Warnings

Appellant asserts that the trial court erred by refusing to suppress certain statements and documents given by appellant to the Internal Revenue Service investigating agent when that agent failed to give appellant the full Miranda warnings. Appellant is incorrect. Internal Revenue Service agents are not required to give Miranda warnings in non-custodial interview situations. ⁶ Beckwith v. United States, 425 U.S 341, 347, 96 S.Ct. 1612, 1616, 48 L.Ed.2d 1 ...