U.S. v. Griffin, 86-1219

• Citation: 814 F.2d 806
• Decision Date: 26 March 1987
• Docket Number: No. 86-1219,86-1219
• Parties: -846, 87-1 USTC P 9299 UNITED STATES of America, Appellant, v. William F. GRIFFIN, Jr., Defendant, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 806

814 F.2d 806

59 A.F.T.R.2d 87-846, 87-1 USTC P 9299

UNITED STATES of America, Appellant, v. William F. GRIFFIN, Jr., Defendant, Appellee.

No. 86-1219.

United States Court of Appeals First Circuit.

Argued Oct. 10, 1986.

Decided March 26, 1987.

Donald W. Searles, Tax Div., Dept. of Justice, with whom Michael L. Paup and Robert E. Lindsay, Tax Div., Dept. of Justice, Roger M. Olsen, Asst. Atty. Gen., Washington, D.C., and William F. Weld, U.S. Atty., Boston, Mass., were on brief for appellant.

John Foskett with whom Steven J. Brooks and Deutsch Williams Brooks & DeRensis, P.C., Boston, Mass., were on brief, for appellee.

Before CAMPBELL, Chief Judge, BOWNES and TORRUELLA, Circuit Judges.

LEVIN H. CAMPBELL, Chief Judge.

The United States appeals from an order issued by the United States District Court for the District of Massachusetts dismissing 12 counts in a 13 count indictment. The indictment had been returned by a federal grand jury sitting in the Southern District of West Virginia. For the convenience of the parties, the case was transferred for trial to the District of Massachusetts. Fed.R.Crim.P. 21(b). The court dismissed the 12 counts upon the belief that the charged offenses were committed in Massachusetts and thus fell beyond the indictment power of the grand jury in West Virginia. ¹ We affirm.

I.

On April 15, 1985, a federal grand jury sitting in Charleston, West Virginia, returned a 13 count indictment against David Walsh, Robert Goldberg, Francis Percuoco, and William Griffin, Jr., all of whom the indictment alleged were Massachusetts residents.

Count 1 charged the four defendants with conspiracy to defraud the United States by, among other things, obstructing the Internal Revenue Service's efforts to ascertain, assess, and collect federal taxes. According to the indictment, the goal of the conspiracy was to syndicate and promote four fraudulent tax shelters related to coal property in West Virginia. The criminal scheme allegedly began in 1977, when entities owned by defendant Walsh purchased coal property located in the Southern District of West Virginia. Walsh and Goldberg then formed NRG Coal Corporation, which created at least four limited partnership tax shelters connected to the West Virginia properties. The indictment asserted that the partnerships mined no coal, nor ever intended to--they purportedly existed solely to allow investors to claim over $14,000,000 in fraudulent tax deductible losses.

Unlike Walsh and Goldberg, defendants Percuoco and Griffin were not members of NRG Coal Corporation or any of the partnerships involved with the tax shelters. Percuoco, an accountant, and Griffin, a lawyer, rendered services in Massachusetts to Walsh, Goldberg, and the corporations and partnerships involved in the West Virginia venture. These services allegedly were instrumental to the creation and marketing of the fraudulent tax shelters.

Counts 2-13, unlike Count 1, were not conspiracy counts. Rather, brought under 18 U.S.C. Sec. 2(a) (1982) and 26 U.S.C. Sec. 7206(2) (1982), each count charged that the four named defendants, "aided and abetted by each other, did willfully and knowingly cause and assist in the preparation and presentation" of a tax return that was fraudulent and false as to material matters. ² This appeal is concerned solely with Counts 2-13.

Walsh and Goldberg entered into plea agreements in the United States District Court for the Southern District of West Virginia. Shortly thereafter, Griffin and Percuoco sought and received a change of venue transferring the case, for the parties' convenience, from the Southern District of West Virginia to the District of Massachusetts. Griffin and Percuoco subsequently moved in the latter court for the dismissal of Counts 2-13, arguing that the return of those counts in West Virginia was improper because all their alleged criminal conduct had taken place exclusively in Massachusetts. ³ The district court granted the motion, and the government perfected this interlocutory appeal. See 18 U.S.C. Sec. 3731 (1982) (allowing United States immediately to appeal from a district court's order dismissing one or more counts in an indictment). ⁴

II.

Counts 2-13 charged the four defendants with aiding and assisting in the preparation and presentation of fraudulent tax returns, in violation of 18 U.S.C. Sec. 2(a) (1982) and 26 U.S.C. Sec. 7206(2) (1982). Section 2(a), the general aiding or abetting statute, provides that "[w]hoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal." Section 2(a) does not, by itself, criminalize any conduct; it simply makes one who aids or abets in the commission of some substantive offense punishable as a principal.

Section 7206(2), however, delineates a substantive offense. It imposes criminal penalties on any person who

[w]illfully 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.

In addressing defendants' motion to dismiss Counts 2-13, the district court framed the relevant inquiry as follows:

[i]t is undisputed that everything that Percuoco and Griffin are accused of doing took place in Massachusetts. It is also undisputed that defendants Walsh and Goldberg performed a number of acts in West Virginia. At issue is whether defendants Percuoco and Griffin may be indicted in West Virginia for violating Sec. 7206(2) solely because of the actions in that state of their codefendants Walsh and Goldberg.

United States v. Percuoco, 630 F.Supp. 784, 785 (D.Mass.1986). Ruling that an indictment is invalid if returned in a district other than where the crime was committed, the court concluded that Griffin and Percuoco, having never acted in West Virginia, could not be indicted in that state for violating section 7206(2).

The district court considered but rejected the government's argument that the doctrine of continuing offenses, embodied in 18 U.S.C. Sec. 3237(a) (Supp. II 1985), ⁵ would allow Griffin to be tried for a section 7206(2) violation not only where he acted (Massachusetts) but also where Walsh and Goldberg, whom the government labelled "principals," had acted (West Virginia). Although recognizing case law holding that accessories may generally be tried where the principal acted, the court refused to regard section 7206(2) as an "accessorial" statute. From the language of the statute it concluded that "a person who assists another in the filing of a fraudulent tax return acts as a principal" under section 7206(2) and thus may be indicted only where he acted. Id. at 786.

On appeal, the government contends that the district court erred in holding that Griffin could be indicted only in Massachusetts, and not in West Virginia. It does not, however, challenge the court's finding that "everything ... Griffin [is] accused of doing took place in Massachusetts." The government also concedes that a federal grand jury may return indictments only for crimes committed within the district in which it sits. Accordingly, we need not determine whether a grand jury that may properly indict an individual on one count (here, the conspiracy count) has the ancillary power to indict that individual on related crimes arising out of the same operative facts. Nor need we consider whether the West Virginia indictment, if returned in the wrong district, could constitute harmless error. We are presented only with the narrow task of determining where Griffin's alleged crime was committed, an issue of first impression under section 7206(2), and of examining the government's "aiding or abetting" analogs.

III.

Like most federal criminal statutes, section 7206(2) does not expressly identify where a violation is deemed to have occurred. The Supreme Court, when interpreting a statute that similarly failed to identify the situs of a crime, advised that "the locus delecti must be determined from the nature of the crime alleged and the location of the act or acts constituting it." United States v. Anderson, 328 U.S. 699, 703, 66 S.Ct. 1213, 1216, 90 L.Ed. 1529 (1946); accord Travis v. United States, 364 U.S. 631, 635, 81 S.Ct. 358, 361, 5 L.Ed.2d 340 (1961). ⁶ Courts often conduct this inquiry by examining the key verbs defining the criminal offense. See, e.g., United States v. Tedesco, 635 F.2d 902, 905 (1st Cir.1980), cert. denied, 452 U.S. 962, 101 S.Ct. 3112, 69 L.Ed.2d 974 (1981).

The key verbs in section 7206(2) are "aids," "assists in," "procures," "counsels," and "advises" in the preparation or presentation of a false return, affidavit, claim, or other document. Here, any advice or aid Griffin provided in the preparation of the return in question undisputably took place in Massachusetts. Furthermore, the tax returns themselves were filed in Massachusetts. ⁷ Thus, like the district court, we conclude that if Griffin violated section 7206(2), that violation occurred in Massachusetts. Given the government's concession that a grand jury may return indictments only for crimes committed within its district, we hold that Counts 2-13 were improperly returned in West Virginia.

The government advances two arguments against this position, neither of which is persuasive. It accurately notes that one accused under 18 U.S.C. Sec. 2(a) of aiding or abetting in the commission of some substantive crime may be prosecuted not only where he committed the accessorial acts, but also where the principal committed the substantive crime. United States v. Brantley, 733 F.2d 1429, 1434 (11th Cir.1984), cert. denied, 470 U.S. 1006, 105 S.Ct. 1362, 84 L.Ed.2d 383 (198...