U.S. v. Koskerides

• Decision Date: 14 June 1989
• Docket Number: D,No. 868,868
• Citation: 877 F.2d 1129
• Parties: -5072, 89-1 USTC P 9381, 28 Fed. R. Evid. Serv. 393 UNITED STATES of America, Appellee, v. Antonios KOSKERIDES, Defendant-Appellant. ocket 88-1417.
• Court: U.S. Court of Appeals — Second Circuit

Page 1129

877 F.2d 1129

64 A.F.T.R.2d 89-5072, 89-1 USTC P 9381,

28 Fed. R. Evid. Serv. 393

UNITED STATES of America, Appellee, v. Antonios KOSKERIDES, Defendant-Appellant.

No. 868, Docket 88-1417.

United States Court of Appeals Second Circuit.

Argued March 3, 1989.

Decided June 14, 1989.

Barbara A. Bailey, New Haven, Conn., for appellee.

Robert M. Davidson, Norwalk, Conn., (Kurt F. Zimmerman, Davidson, Driscoll & Naylor, Norwalk, Conn., of counsel), for defendant-appellant.

Before PIERCE and ALTIMARI, Circuit Judges, and KELLEHER, District Judge. ^*

KELLEHER, District Judge.

INTRODUCTION

Defendant-appellant Antonios Koskerides appeals from the judgment of conviction on three counts of federal income tax evasion in violation of 26 U.S.C. Sec. 7201.

Appellant was sentenced on count one to a term of imprisonment of eighteen months and a fine of $10,000. On count two appellant received a term of imprisonment of eighteen months and a fine of $10,000., sentence to run concurrently with count one. On count three he was sentenced to a term of five years, execution suspended, and five years' probation, to run consecutively with the sentences imposed on counts one and two. The court also imposed on appellant costs of prosecution and special conditions of probation requiring appellant to pay back taxes for the years 1981-83 and to file lawful federal tax returns during the period of probation.

Appellant seeks reversal on the following grounds: (1) the IRS violated its own procedures in its interviews with appellant, and therefore any statements or documents resulting from such interviews should have been suppressed; (2) the district court erred in denying appellant access to handwritten notes of the agent's interviews with him and the unredacted special agent's report; (3) the district court erred in admitting three of the government's summary charts into evidence; (4) admission of the testimony of agent Gambino violated hearsay rules; (5) the district court improperly limited appellant's cross-examination of three government witnesses; and (6) the government's net worth computation and proof of willfulness were insufficient. We affirm.

Appellant came to the United States from Greece in 1966 and was naturalized as a United States citizen in 1977. Appellant's native tongue is Greek. Although appellant speaks English, appellant has some difficulty with the language and made some use of the interpreter provided for him at the suppression hearing and at trial.

In 1968, appellant purchased a restaurant in Norwalk, Connecticut which became known as Penny's I. Between the years 1977 and 1980, he purchased several investment real estate properties, including the cluster of shops where Penny's I is located and four residential rental properties in Norwalk. In 1982, appellant purchased a diner in Fairfield, which he remodeled and renamed Penny's II. Appellant then purchased a third diner located in Norwalk in 1983, which became known as Penny's III. The business of these diners was conducted on a strictly cash basis. Based on the net worth plus expenditures method of proof, the evidence established that appellant had unreported taxable income of $141,831.44 for 1981, $220,436.45 for 1982, and $300,219.47 for 1983. This understatement of income resulted in the payment of only $2,285 in income tax in 1981, payment of no tax in 1982, and none in 1983. The additional tax calculated by the government to be due and owing was $71,561.00 for 1981, $89,879.00 for 1982, and $121,909.68 for 1983.

Appellant's defense at trial was that he received non-taxable funds from relatives and other individuals in Greece. Because Greece has laws strictly limiting the amounts of money that can be taken out of the country, appellant contended that he employed a scheme with various friends and relatives whereby individuals planning to travel to Greece would give U.S. currency to appellant prior to their trips to Greece. Once in Greece, the travelers would receive a like amount in Greek drachmas from appellant's relatives.

The government presented evidence that IRS agents interviewed various individuals in Greece named by appellant as persons from whom he had received funds. In its calculations, the government credited appellant for having received funds from Greece. The government also presented evidence regarding the informal loans within the Greek community and how they would be treated in the net worth calculation. The government also presented evidence that many of the funds received by appellant from Greece were repaid by appellant in a short period of time.

DISCUSSION

I. MOTION TO SUPPRESS

Appellant contends that the district court erred in denying his motion to suppress his written or oral statements, admissions, confessions or documents obtained in the course of the IRS investigation, along with any other evidence derived therefrom. Appellant argues that the IRS violated its own regulations by its conduct of the initial interrogation of defendant and its failure to inform appellant's accountant, George Aretakis, that it was engaged in a criminal investigation. The district court's findings of fact in ruling on a motion to suppress may not be disturbed unless the findings are clearly erroneous. United States v. Mast, 735 F.2d 745, 749 (2d Cir.1984).

The Criminal Investigation Division of the IRS targeted appellant for investigation in 1984. Thereafter, on several occasions in 1984 and 1985, special agents Donald Kramer and Anthony Pavlich interviewed and had other contacts with appellant. The first interview took place on October 24, 1984. On that day, Kramer and Pavlich went to Penny's II, one of the diners operated by appellant. Upon meeting appellant, Kramer introduced himself as a special agent of the IRS Criminal Investigation Division and presented his credentials to appellant, which appellant viewed. After appellant led Kramer and Pavlich to a booth in the restaurant, Kramer again introduced himself and Pavlich as special agents of the Criminal Investigation Division. Kramer read to appellant the statement of rights from a card known as Document 5661. ¹ Appellant responded that he understood and wished to cooperate with the agents. Appellant appeared to comprehend the agent's questions and provided responsive answers to their inquiries in English. Neither at the initial interview nor during any later interview or contact did appellant ask for clarification of his rights or for an interpreter to be present. However, appellant testified that, because his English was "not too good" and he did not understand Kramer's questions, he referred Kramer to his accountant, Aretakis. That afternoon, the agents met a second time with the appellant, who permitted Kramer and Pavlich to inventory the contents of his safe deposit box.

On the same day, Kramer and Pavlich went to the office of appellant's accountant, George Aretakis. They testified that they displayed their credentials and identified themselves as IRS special agents from the Criminal Investigation Division. Pavlich also gave Aretakis a business card which identified him as a special agent with the Criminal Investigation Division. Appellant contends that the agents never informed Aretakis of the true nature of the investigation which had targeted appellant for potential criminal tax charges. Aretakis testified that if he had known of the true nature of the proceedings, he would have called an attorney. The district court found that any misunderstanding on the part of Aretakis as to the nature of the investigation was not a result of any misrepresentation or deception by the agents.

The IRS regulations relied upon by appellant are set forth in the IRS Handbook for Special Agents Sec. 342.132. The regulations provide that at the beginning of the first official interview with the subject of an investigation, the special agent will identify himself as a special agent of the IRS, produce his credentials, and inform the subject that one of the functions of a special agent is to investigate the possibility of criminal violations. The agent must then advise the subject that he cannot be compelled to answer any question or submit any information if the answer might tend to incriminate the subject. The subject must also be advised that any statement he makes or any information he turns over may be used against him in a criminal proceeding and that he may seek the assistance of an attorney. If the subject indicates that he wishes to withhold his testimony or records or consult with an attorney, the agent must terminate the interview. If the subject requests clarification of these rights or the purpose of the investigation at any time, the agent must provide an explanation. The regulations also require that the agent may not use trickery, misrepresentation or deception in obtaining any evidence or information.

The district court, in denying appellant's motion to suppress, found that the IRS followed its regulations and that no due process violation occurred. We agree. As noted above, appellant was advised of his rights from the outset by the reading of Document 5661, and he appeared to understand. The record discloses no misrepresentations or deception on the part of the agents. The district court's denial of appellant's motion to suppress was proper.

II. ACCESS TO HANDWRITTEN NOTES OF INTERVIEWS AND SPECIAL AGENT'S REPORt

Appellant contends that the district court erred in denying access to agent Kramer's handwritten notes of interviews with him and in denying access to the full Special Agent's Report ("SAR"). By pretrial motion, pursuant to Fed.R.Crim.P. 16(a)(1)(A), appellant requested all of his statements obtained by the government during the investigation. After agent Kramer's testimony at the hearing on the motion to suppress and after his testimony on direct examination at trial, the defense requested agent Kramer's handwritten notes of the interviews with appellant and...