U.S. v. Harrold, 84-2612

Citation796 F.2d 1275
Decision Date14 July 1986
Docket NumberNo. 84-2612,84-2612
Parties-5384, 86-2 USTC P 9543, 21 Fed. R. Evid. Serv. 387 UNITED STATES of America, Plaintiff-Appellee, v. James L. HARROLD, Sr., Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

John E. Dowdell of Norman, Wohlgemuth & Thompson, Tulsa, Okl., for defendant-appellant.

John S. Morgan, Asst. U.S. Atty. (Layn R. Phillips, U.S. Atty., with him on brief), Tulsa, Okl., for plaintiff-appellee.

Before LOGAN, MOORE and BALDOCK, Circuit Judges.

LOGAN, Circuit Judge.

Defendant, James L. Harrold, Sr., appeals his conviction for income tax evasion, in violation of 26 U.S.C. Sec. 7201.

On appeal defendant claims that: (1) his indictment was insufficient; (2) the government and its witnesses improperly referred at trial to his assertion during pretrial investigations of his Fifth Amendment right to silence; (3) the court inadequately instructed the jury on his good-faith defense; (4) the court wrongly excluded evidence relevant to his good-faith defense; and (5) he was denied his right under 28 U.S.C. Sec. 1867(f) to inspect the jury records. We reject all these claims except the last. On that issue we remand on a limited basis.

Defendant was indicted for income tax evasion for the years 1979 through 1981. During this time, defendant worked as an engineer for Consultants and Designers, Inc. His earnings from this company were as follows: 1979--$31,762.37; 1980--$35,208.42; 1981--$36,687.91. After filing his 1975 return, defendant decided to stop paying income taxes because, he contends, he had determined from his own research that wages did not constitute taxable income. Defendant consequently filed W-4 withholding forms declaring himself exempt from income taxes and paid no income taxes during any of the years at issue.

Defendant created the Zident Educational Trust (Zident) on February 6, 1980. The alleged purpose of this trust was to create an "educational facility that could pass on Christian beliefs and patriotic themes." R.X., 679. The evidence suggested, however, that defendant placed most of his personal propery in the trust and used it as a vehicle for his personal investments. Although defendant was not a trustee of Zident, he was its executive secretary, exercised substantial control over its investments, and had signatory power for the trust.

Extensive evidence was presented concerning the Zibiz Research Trust (Zibiz), which was created by the Zident trustees and whose beneficiary was Zident. Defendant was manager of Zibiz and in that capacity offered advice on investments. He also had signatory power for Zibiz. There was evidence that Zibiz purchased items such as a waterbed and a motorboat and occasionally "traded" them to Zident. Defendant lived in a trailer that Zibiz owned.

Both of these trusts had assets worth several thousand dollars and were active in the stock market. They paid a negligible amount of income taxes in 1980 and 1981. Zibiz, for example, paid $1449.08 in taxes in 1981. Zident paid no taxes in 1980 and 1981. An expert government witness testified that all of the income of these trusts should be attributed to defendant because of the control he exercised over them. That expert concluded the trusts had been used to conceal defendant's income.

I

Defendant asserts that his indictment was insufficient. He argues that "there are no factual allegations as to the amount of taxable income received or tax liability due" and that it is not "clear what the alleged evasion may be." Brief of Appellant at 15.

In United States v. Radetsky, 535 F.2d 556 (10th Cir.), cert. denied, 429 U.S. 820, 97 S.Ct. 68, 50 L.Ed.2d 81 (1976), we set out the requirements of an indictment:

"First, the indictment must contain the elements of the offense and sufficiently apprise the defendant of what he must be prepared to meet; second, it must be such as to show to what extent he may plead a former acquittal or conviction as a bar to further prosecution for the same cause."

Id. at 562; see also United States v. Salazar, 720 F.2d 1482, 1486 (10th Cir.1983), cert. denied, --- U.S. ---- 105 S.Ct. 789, 83 L.Ed.2d 783 (1985); Rose v. United States, 128 F.2d 622, 624 (10th Cir.1942).

The indictment here meets those requirements. 1 The focus of the government's case was on defendant's filing of fraudulent W-4 withholding forms and his creation of fraudulent trusts to hide his income and assets. The indictment specifically referred to the W-4 forms and to attempts to "conceal" ownership of assets. Although it would have been better for the indictment to have referred to the challenged trusts with greater specificity, if the government had detailed knowledge then of the precise methods defendant used to conceal his income, the reference to the concealment of asset ownership gave defendant notice that the trusts were likely to be questioned at trial. See Salazar, 720 F.2d at 1487 ("sufficiency of an indictment, however, 'is not a question of whether it could have been more definite and certain' ") (quoting United States v. Debrow, 346 U.S. 374, 378, 74 S.Ct. 113, 115, 98 L.Ed. 92 (1953)).

In addition, inadequacy of an indictment requires reversal only if it prejudiced the defendant. See United States v. Fitzgibbon, 576 F.2d 279, 283 (10th Cir.), cert. denied, 439 U.S. 910, 99 S.Ct. 279, 58 L.Ed.2d 256 (1978). Here defendant presented detailed evidence concerning the challenged trusts and seemed prepared to meet the government's case. Accordingly, there was no prejudice to him from any lack of specificity in the indictment.

Defendant's claim that the indictment should have included the amount of taxes owed is meritless. In a Sec. 7201 prosecution the government is not obligated to prove the precise amount owed. See Graves v. United States, 191 F.2d 579, 582 (10th Cir.1951); United States v. Newman, 468 F.2d 791, 795 (5th Cir.1972); United States v. Stein, 437 F.2d 775, 779 (7th Cir.1971). Thus there is no requirement that an indictment under Sec. 7201 specify the exact amount owed.

Defendant claims that the indictment is too vague to protect him from subsequent prosecutions for the same offenses. But in Radetsky we noted that "the record evidence of exhibits and testimony" is available to protect against a defendant being placed twice in jeopardy. Radetsky, 535 F.2d at 563; see also United States v. Smith, 692 F.2d 693, 696-97 (10th Cir.1982). The trial record clearly indicates that this prosecution involved violations concerning the Zident and Zibiz trusts from 1979 through 1981. There is little danger that defendant will be prosecuted again for the same trust violations.

II

Defendant next claims that the government violated his due process rights by intentionally eliciting testimony from two IRS officers that defendant refused to answer certain questions during pre-indictment investigations in reliance on his Fifth Amendment privilege against self-incrimination.

First, IRS Officer Robert Randolph testified that defendant invoked his right to remain silent at a meeting with IRS officers on November 13, 1979. The second incident arose during the testimony of IRS Officer Larry Garner. Garner, who was conducting a criminal investigation of defendant, testified that defendant refused to reply to certain questions after receiving a Miranda warning. 2

The government states in its brief that it regrets this questioning of both IRS officers with respect to defendant's silence but asserts that "such error was harmless." Brief of Appellee at 14. We are surprised that the government in effect concedes that reference to defendant's silence by Officer Randolph was error. Officer Randolph was conducting a civil investigation and there is no indication in the record that he gave defendant a Miranda warning. In United States v. Massey, 687 F.2d 1348 (10th Cir.1982), we stated that a comment on a defendant's silence is error only when the defendant remained silent in reliance on government action, i.e., a Miranda warning. Id. at 1353; see also Wainwright v. Greenfield, --- U.S. ----, 106 S.Ct. 634, 637, 88 L.Ed.2d 623 (1986); Fletcher v. Weir, 455 U.S. 603, 605-07, 102 S.Ct. 1309, 1311-12, 71 L.Ed.2d 490 (1982); Jenkins v. Anderson, 447 U.S. 231, 240, 100 S.Ct. 2124, 2130, 65 L.Ed.2d 86 (1980); Doyle v. Ohio, 426 U.S. 610, 618, 96 S.Ct. 2240, 2245, 46 L.Ed.2d 91 (1976); United States v. Davis, 780 F.2d 838, 844-45 (10th Cir.1985). Because defendant's refusal to respond to certain of Randolph's questions was not based on a Miranda warning or any other government action, the testimony concerning defendant's pre-Miranda reliance on the Fifth Amendment was proper and will not be considered in determining if defendant was prejudiced. 3 We agree that the government's questioning of Officer Garner about defendant's invocation of the Fifth Amendment was error. Nevertheless, if we find beyond a reasonable doubt that defendant was not prejudiced by the error, his conviction will stand. 4 See United States v. Schmitt, 794 F.2d 555 at 557 (10th Cir.1986); Massey, 687 F.2d at 1353. In Massey we considered the following factors relevant in determining whether an error was harmless:

"1. The use to which the prosecution puts the post-arrest silence.

2. Who elected to pursue the line of questioning.

3. The quantum of other evidence indicative of guilt.

4. The intensity and frequency of the reference.

5. The availability to the trial judge of an opportunity to grant a motion for mistrial or to give curative instructions."

Id. (quoting Williams v. Zahradnick, 632 F.2d 353, 361-62 (4th Cir.1980)); see also Schmitt, at 559; United States v. Remigio, 767 F.2d 730, 735 (10th Cir.), cert. denied, --- U.S. ----, 106 S.Ct. 535, 88 L.Ed.2d 465 (1985).

In determining whether defendant was prejudiced, the key factors often will be the purpose for which the government used defendant's silence and the quantum of other evidence of defendant's guilt. The government...

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