U.S. v. Laurins

• Decision Date: 08 September 1988
• Docket Number: No. 87-1251,87-1251
• Citation: 857 F.2d 529
• Parties: -767, 89-1 USTC P 9250, 26 Fed. R. Evid. Serv. 1346 UNITED STATES of America, Plaintiff-Appellee, v. Aleksandrs V. LAURINS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 529

857 F.2d 529

63 A.F.T.R.2d 89-767, 89-1 USTC P 9250,

26 Fed. R. Evid. Serv. 1346

UNITED STATES of America, Plaintiff-Appellee, v. Aleksandrs V. LAURINS, Defendant-Appellant.

No. 87-1251.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted April 14, 1988.

Decided Sept. 8, 1988.

Brian W. Shaughnessy, of Shaughnessy, Borowski & Gagner, Washington, D.C., for defendant-appellant.

Jay R. Weill, Asst. U.S. Atty., Tax Div., U.S. Dept. of Justice, San Francisco, Cal., for plaintiff-appellee.

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

Before BOOCHEVER and NORRIS ^*, Circuit Judges, and STEPHENS, Jr. ^** , District Judge.

BOOCHEVER, Circuit Judge:

Laurins appeals his conviction of obstruction of justice and aiding, abetting, and causing contempt of court, in connection with an Internal Revenue Service investigation of Gold Depository and Loan Company, Inc. He contends there was insufficient evidence to support his conviction, that he was denied a fair trial by judicial and prosecutorial misconduct, that evidence and testimony at trial were improperly admitted, and that the district court erred in imposing consecutive sentences. We affirm.

FACTS

In October 1983, the IRS selected for investigation Gold Depository and Loan Company, Inc. (GDL) for allegedly promoting and selling an abusive tax shelter. GDL was one of the Co-op Banking Group Companies, sharing offices on Union Street in San Francisco. The Companies' promotional materials listed Aleksandrs Laurins, a former IRS attorney, tax planner, and real estate developer, as managing director. The tax shelter under investigation was GDL's "Dry Cargo Marine Container Purchase Program," under which a typical investor might buy $100,000 worth of marine cargo containers with $4,000 down. GDL would arrange for financing of the unpaid balance. GDL advised the investor that he or she could then take an investment tax credit of 10% or $10,000, as well as a depreciation deduction of $15,000, on his or her tax return in the year of investment.

The IRS sent a letter to GDL in November 1983 informing it of the investigation and requesting certain documents. Attorney Bart Lee, whom Laurins had hired in January 1982 to represent both GDL and himself, requested more time to respond. No records were ever produced. On January 5, 1984, an IRS summons was served on GDL, requiring the production for inspection and copying of all books and records for 1982 and 1983 related to the investment scheme. Lee informed the IRS that GDL was no longer doing business in San Francisco and that its only office was in Maryland, and took the position that the summons therefore was not properly served. GDL allegedly did business in San Francisco until December 31, 1983, shortly after it learned of the IRS investigation, although evidence at trial disputed that date. Laurins also claimed at trial that GDL had been sold to another company in the Co-op Banking Group, Mortgage Guaranty Trust, although he could produce no documentation of the sale.

GDL produced no documents. In April or May of 1984, Union Street employees boxed company records at Laurins' request. He then removed the boxes from On July 12, 1984, the district court issued an order to enforce the summons, directed to Sandy Sandfort, GDL's vice president, and to GDL. A month later, GDL's purported president, Charlene Baden, met with the IRS but raised her fifth amendment privilege and again produced no records. The district court then issued an amended order requiring GDL to designate an agent to testify without invoking personal privileges against self incrimination. The agent GDL appointed, however, produced no records and could answer few questions.

the office and on several subsequent occasions produced copies of documents from the boxed records for at least one employee.

The district court entered an order of contempt against GDL on June 3, 1985 for willfully failing to comply with the summons. Despite a fine of $1,000 each day no documents were produced, GDL still did not comply.

On October 3, 1986, pursuant to a search warrant, the FBI seized approximately twenty-one boxes of business records (GEX 70) from Laurins' home on Clay Street in San Francisco. The records carried the GDL name on nearly every page. On March 6, 1987, a two-count indictment charged Laurins with obstruction of justice, 18 U.S.C. Sec. 1505 (1982), and aiding, abetting, and causing contempt of court, 18 U.S.C. Secs. 2 (1982) and 401(3) (1982). After a trial in June 1987, a jury convicted Laurins on both counts. The district court imposed consecutive sentences of five years on the obstruction count and three years on the contempt count, as well as a $250,000 fine on the obstruction count.

ANALYSIS

I. Sufficient Evidence

There is sufficient evidence to support Laurins' conviction if, viewing the evidence in the light most favorable to the prosecution, any rational jury could have found the elements of the crime beyond a reasonable doubt. United States v. Vaccaro, 816 F.2d 443, 454 (9th Cir.), cert. denied, --- U.S. ----, 108 S.Ct. 262, 98 L.Ed.2d 220 (1987).

A. Aiding, Abetting, and Causing GDL's Contempt of Court

Laurins first argues that because criminal contempt requires the willful disobedience of a court order, and GDL did not act willfully in refusing to produce documents for the IRS, his conviction for aiding, abetting, and causing must fail for lack of a principal.

Title 18 U.S.C. Sec. 401(3) gives a federal court the power to punish "by fine or imprisonment, at its discretion ... [d]isobedience or resistance to its lawful writ, process, order, rule, decree, or command." Willfulness is an essential element of criminal contempt. United States v. Armstrong, 781 F.2d 700, 706 (9th Cir.1986). Although willfulness is not required for a finding of civil contempt, civil contempt may be based on willful behavior. "The same conduct may result in both civil and criminal contempt charges." United States v. Rose, 806 F.2d 931, 933 (9th Cir.1986) (per curiam).

Whether contempt is civil or criminal depends on the intended effect of the penalty imposed. If the intent is remedial, or if the penalty is conditional in that it is meant to compel the defendant to act, the contempt is civil. If the intent is punitive and the penalty is unconditional, the contempt is criminal. Hicks ex rel. Feiock v. Feiock, --- U.S. ----, 108 S.Ct. 1423, 1429-30, 99 L.Ed.2d 721 (1988).

The district court in the contempt action against GDL found that GDL's failure to comply with the order enforcing summons was willful, and imposed a fine of $1,000 per day until GDL produced the records. The fine was waived if GDL complied within 30 days. This penalty clearly was intended to coerce GDL to comply as GDL could avoid the fine by prompt compliance, and was therefore a civil contempt order. Id.

Laurins insists, despite the language in the contempt order, that no evidence of GDL's willfulness was ever produced. Even if no such evidence existed, this is irrelevant. The indictment charged Laurins also argues that he had disassociated himself from GDL by the time the summons issued, and because he was neither GDL's agent nor its representative, and because the company itself had been sold, he had no obligation to respond to the summons and cannot be held in contempt for willful failure to comply with the court order enforcing it.

                Laurins with a violation of 18 U.S.C. Sec. 2.  This "aiding and abetting" statute provides that one who "willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal."    18 U.S.C. Sec. 2(b).  This court has recently held that under section 2(b) "the government need not prove that someone other than the defendant was guilty of the substantive crime.  A person who causes the commission of an offense is punishable as a principal even though the person who completes the wrongful act violates no criminal statute because of lack of criminal intent or capacity."   United States v. Causey, 835 F.2d 1289, 1292 (9th Cir.1987).  The intent of the person actually performing the proscribed act is immaterial in a section 2(b) prosecution.  Id.  It therefore does not matter whether at Laurins' trial GDL was shown to have acted willfully. 1   The relevant issue was whether Laurins acted willfully in aiding, abetting, and causing the commission of contempt.  It is not disputed that the jury was properly instructed on the requirement of willfulness for Laurins' conduct
                

It is Laurins' failure to obey the court order, not the summons itself, that is at issue in his conviction for contempt. A court order binds parties and those in active concert with parties who have actual knowledge of the order. Fed.R.Civ.P. 65(d); United States v. Baker, 641 F.2d 1311, 1314 (9th Cir.1981). A nonparty may be held liable for contempt if he or she either abets or is legally identified with the named defendant. NLRB v. Sequoia Dist. Council of Carpenters, 568 F.2d 628, 633 (9th Cir.1977). Those not legally identified with a party but actively in concert with the party must have actual knowledge of the order to be bound. Id.

An order to a corporation binds those who are legally responsible for the conduct of its affairs. NLRB v. Maine Caterers, Inc., 732 F.2d 689, 691 (1st Cir.1984); see United States v. Wilson, 221 U.S. 361, 376, 31 S.Ct. 538, 542-43, 55 L.Ed. 771 (1911). De facto as well as de jure officers are responsible for enabling a corporation to comply with orders directed to it. United States v. Seetapun, 750 F.2d 601, 607 (7th Cir.1984).

Although Laurins insisted that he had no legal connection with GDL after its purported sale, there was ample evidence at trial that he continued to exercise at least de facto control over the company after the summons issued. Laurins authorized Lee to represent GDL before the IRS in late 19...