U.S. v. Gurtunca

• Citation: 836 F.2d 283
• Decision Date: 16 December 1987
• Docket Number: No. 86-2891,86-2891
• Parties: -504, 88-1 USTC P 9108 UNITED STATES of America, Plaintiff-Appellee, v. Ali Erdogan GURTUNCA, a/k/a "Ali Turk", Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 283

836 F.2d 283

61 A.F.T.R.2d 88-504, 88-1 USTC P 9108

UNITED STATES of America, Plaintiff-Appellee, v. Ali Erdogan GURTUNCA, a/k/a "Ali Turk", Defendant-Appellant.

No. 86-2891.

United States Court of Appeals Seventh Circuit.

Argued March 31, 1987.

Decided Dec. 16, 1987.

Robert E. Meldman, Meldman, Case & Weine, Ltd., Milwaukee, Wis., for defendant-appellant.

Nathan A. Fishbach, Asst. U.S. Atty., Patricia A. Gorence, Milwaukee, Wis., for plaintiff-appellee.

Before RIPPLE and MANION, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

MANION, Circuit Judge.

Ali Erdogan Gurtunca, also known as Ali Turk, worked during the years 1978-1981 as a self-employed consultant-loan broker. Gurtunca would tell potential clients that he had connections with foreign sources (usually Middle Eastern) who had large amounts of money available to loan at low interest rates. Gurtunca would tell the clients that before he could arrange a loan, the client would have to pay him in advance to cover items such as fees and expenses. Gurtunca's "services" did not come cheaply--his daily charges generally ranged from $400 to $1,000.

A lot of people paid Gurtunca a lot of money in hopes of obtaining low-interest loans. In most cases, these clients received nothing. Testifying at trial were over thirty people who had paid Gurtunca money but had obtained no loans.

Gurtunca failed to report most of the money he received from clients on his income tax returns. During 1978-1981, Gurtunca filed, along with his Forms 1040, Schedules C ("Profit or (Loss) From Business or Profession") that stated his main business activity as "consultant." On the Schedules C for those years, Gurtunca reported total income of $183,550. The government asserted that Gurtunca should have reported total income of $437,063.97 on his Schedules C for 1978-1981. As a result of his false reporting, the government contended that Gurtunca avoided approximately $97,000 in income taxes.

A federal grand jury in Milwaukee agreed with the government that Gurtunca had willfully underreported his income. The grand jury indicted Gurtunca, charging him with violating 26 U.S.C. Sec. 7206(1), which provides:

Any person who--

(1) Declaration under penalties of perjury.--Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter;

* * *

* * *

shall be guilty of a felony....

The indictment charged that for 1978, 1979, and 1980, Gurtunca willfully underreported gross receipts on line 1(a) of his Schedules C, and that for 1981, Gurtunca willfully underreported total income on line 5 of his Schedules C. ¹

After a three-day bench trial, the district court found Gurtunca guilty on all four counts. United States v. Gurtunca, 638 F.Supp. 296, 297-98 (E.D.Wis.1986). The district court found that the funds Gurtunca received were reportable on his consulting business Schedules C, even though he may have obtained the funds by fraud. Id. at 299. The district court sentenced Gurtunca to eighteen months in prison on Count 1, and fined Gurtunca $5,000 on Counts 2 and 3. The court also placed Gurtunca on three years probation on Counts 2, 3, and 4. As conditions of probation on count 4, the court ordered Gurtunca to pay the costs of prosecution ($13,000) and to reimburse the government for the costs of his court-appointed attorneys. The district court reserved determining the amount Gurtunca must reimburse the government until after Gurtunca's court-appointed attorneys filed a request for fees; the district court has not yet determined the amount of fees that Gurtunca must pay. Gurtunca appeals both his conviction and the probation condition that he reimburse the government for his court-appointed attorneys' fees. For the reasons that follow, we affirm the district court.

I.

Because the district court has not determined the amount of attorneys' fees for which Gurtunca must reimburse the government, we must first consider whether we have jurisdiction over this appeal. 28 U.S.C. Sec. 1291 grants courts of appeals jurisdiction over "final decisions of the district courts...." The Supreme Court long ago stated that a judgment is final "when it terminates the litigation between the parties on the merits of the case and leaves nothing to be done but to enforce by execution what has been determined." St. Louis, Iron Mountain & Southern R.R. v. Southern Express Co., 108 U.S. 24, 28-29, 2 S.Ct. 6, 8, 27 L.Ed. 638 (1883). In a criminal case, "[f]inal judgment means ... sentence. The sentence is the judgment." Berman v. United States, 302 U.S. 211, 212, 58 S.Ct. 164, 165, 82 L.Ed. 204 (1937).

The Court, however, has not always interpreted finality as strictly as the quote from Southern Express Co. might indicate. In Corey v. United States, 375 U.S. 169, 84 S.Ct. 298, 11 L.Ed.2d 229 (1963), the district court, pursuant to the procedure set out at that time in 18 U.S.C. Sec. 4208(b), committed the defendant to the Attorney General's custody but delayed pronouncing final sentence until receiving a report about the defendant from the Bureau of Prisons. Id. at 169-70, 84 S.Ct. at 300. The Supreme Court stated that a final, appealable judgment existed when the district court entered its order committing the defendant to the Attorney General's custody, despite the fact that the district court had not imposed its final sentence. Id. at 174, 84 S.Ct. at 302.

Corey is instructive here. As in Corey, Gurtunca's sentence "sufficiently satisfies conventional requirements of finality for purposes of appeal." Id. The district court has fully tried the merits, has found Gurtunca guilty, has imposed punishment on Gurtunca, and has entered judgment. Gurtunca's sentence is definite; all that remains for the district court to do is determine the exact amount of fees. Compare Corey, 375 U.S. at 174, 84 S.Ct. at 302; see also id. at 176, 84 S.Ct. at 303 (Harlan, J., dissenting).

A criminal defendant, and the public generally, have strong interests in speedily resolving criminal charges. Flanagan v. United States, 465 U.S. 259, 264, 104 S.Ct. 1051, 1054, 79 L.Ed.2d 288 (1984). These interests also extend to the criminal appeal process; the rules governing criminal appeals reflect the concern that courts dispose of criminal appeals "as expeditiously as possible." Corey, 375 U.S. at 172, 84 S.Ct. at 301. The final judgment rule is meant to serve the defendant's and public's interests in speedily resolving criminal cases by preventing "a succession of costly and time-consuming appeals" of interlocutory trial court decisions (such as pretrial disqualification of defense counsel, the issue in Flanagan ). See Flanagan, 465 U.S. at 264-65, 104 S.Ct. at 1054. Here, however, where trial is complete and the sentence "sufficiently satisfies conventional requirements of finality," Corey, 375 U.S. at 174, 84 S.Ct. at 302, holding that the district court's judgment is not final would merely delay review of the merits and defeat Gurtunca's and the public's interest in resolving the charges against him. Based on this consideration, and on the Supreme Court's reasoning in Corey, we hold that we have jurisdiction over this appeal. Cf. United States v. McKnight, 771 F.2d 388, 390 (8th Cir.1985) (in a case where the district court ordered restitution as a condition of probation but left the amount to be determined later, the court of appeals stated that the probation sentence was a "final decision for purposes of appellate review"), cert. denied, 475 U.S. 1014, 106 S.Ct. 1194, 89 L.Ed.2d 309 (1986).

II.

On the merits, Gurtunca, while conceding that the funds he received from clients were taxable income, argues that he had no obligation to report those funds on his consulting business Schedules C as the indictment charged. According to Gurtunca, the funds were either reportable on different Schedules C (because he obtained the funds from a "business"--obtaining money by false pretenses--different from his consulting business) or not reportable on any Schedules C (because Schedules C is for receipts from a trade or business and obtaining money by false pretenses is not a trade or business). Gurtunca asserts that since the government charged him with understating receipts and income on his consulting business Schedules C, and since he had no obligation to report the funds on those Schedules C, the government did not prove what it charged. Therefore, says Gurtunca, this court must reverse his conviction.

Gurtunca's argument is not frivolous. The government, by charging Gurtunca with specifically failing to report the funds on his Schedules C, has made this a more difficult case than it had to be--especially given Gurtunca's admission that the funds were taxable income. The government could have foreclosed the argument Gurtunca makes here simply by charging Gurtunca with failing to report the funds "on his Schedule C or otherwise " (see United States v. Edwards, 777 F.2d 644, 652 (11th Cir.1985), cert. denied, 475 U.S. 1123, 106 S.Ct. 1644, 1645, 90 L.Ed.2d 89 (1986) which upheld a similarly-worded indictment) or by charging Gurtunca with underreporting gross income or taxable income. As charged this case is unnecessarily close.

Be that as it may, we agree with the district court that "[b]ecause those funds were received by Gurtunca as a loan broker-consultant, and because they were related to that business even though Gurtunca may have been a fraud, a crook or a thief, they were reportable on the Schedule C's as charged." 638 F.Supp. at 299. As the district court noted

If Gurtunca had been a baker and, on the side, had sold marijuana from the back door of his bakery, Gurtunca's argument might have more appeal. Then, with a straighter face, one could say that his marijuana income does not belong on his bakery business Schedule C. If,...