U.S. v. Peister, 78-1961

• Decision Date: 04 August 1980
• Docket Number: No. 78-1961,78-1961
• Citation: 631 F.2d 658
• Parties: 80-2 USTC P 9592 UNITED STATES of America, Plaintiff-Appellee, v. Stephen L. PEISTER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 658

631 F.2d 658

80-2 USTC P 9592

UNITED STATES of America, Plaintiff-Appellee, v. Stephen L. PEISTER, Defendant-Appellant.

No. 78-1961.

United States Court of Appeals Tenth Circuit.

Argued Sept. 11, 1979.

Decided Aug. 4, 1980.

Steven L. Peister, pro se.

Carole C. Dominguin, Asst. U. S. Atty., Denver, Colo. (Joseph Dolan, U. S. Atty., Denver, Colo., with her on the brief), for plaintiff-appellee.

Before DOYLE, BREITENSTEIN and LOGAN, Circuit Judges.

LOGAN, Circuit Judge.

Steven L. Peister was found guilty by a jury of violating I.R.C. § 7205, 26 U.S.C. § 7205, for willfully supplying false or fraudulent information to his employer on a withholding exemption certificate form W-4. Peister raises a number of issues on appeal which we treat under the following categories: (1) infringement upon right to counsel; (2) prosecutorial misconduct; (3) admissibility of certain testimony; (4) sufficiency of the evidence to sustain the verdict; (5) the judge's interpretation of willfulness and a good faith defense; (6) failure of the judge to rule on whether defendant was exempt from withholding under I.R.C. § 3401(a)(9); and (7) the prosecution as a violation of Peister's First Amendment rights.

In the latter part of 1976, Peister formed a church called the Life Science Church of Friendly Hills using materials he purchased from William Drexler. Peister became the minister of the church, and his wife and parents became its trustees. The church held services on Wednesday nights with prayers and sermons.

In connection with organizing the church, Peister took a vow of poverty and purportedly made an irrevocable gift of all his worldly possessions to the church as a requirement of his admission to the Order of Almighty God. Pursuant to the vow, the Peisters executed a quitclaim deed conveying their home to the church. According to the testimony, members of the Order of Almighty God were required to hold assigned outside jobs to raise funds for the church. Frederick Meyer, a bishop in the Order, assigned Peister to continue working as a pressman at Rocky Mountain Bank Note Company, the job he held prior to admission to the Order.

Peister maintained checking accounts in the church name at a succession of banks, and he deposited all but one of his paychecks received during this period in a church bank account. Peister and his wife were the only authorized signators on these accounts. There was substantially no difference between the expenditures made with checks drawn on the Peisters' individual accounts prior to this time and the expenditures from the church accounts, which included payment of personal living expenses of the Peisters.

In December 1976 Peister attempted to stop tax withholding from his wages by submitting a statutory notice to his employer stating he had taken a vow of poverty and so was not subject to withholding. The employer refused to comply with the request directly, but told him he could contact the Internal Revenue Service (IRS). Peister corresponded with the IRS, which informed him he was not exempt from withholding under I.R.C. § 3401(a)(9). ¹ On January 25, 1977, Peister submitted a W-4 form to the employer on which he claimed 99 exemptions. This submission was the basis for his indictment.

I.R.C. § 3402(f) lists the exemptions an employee can claim on the withholding certificate. These are limited to a personal exemption and exemptions for a spouse, dependents, old age, blindness and for excess itemized deductions. The government's expert testified at trial that under this provision Peister at most would be entitled to three exemptions. Peister did not contest this calculation, but raised a good faith defense based on I.R.C. § 3401(a)(9), which exempts from the withholding requirements remuneration received "by a member of a religious order in the exercise of duties required by such order." Peister maintains he is required by his order to work at Rocky Mountain Bank Note Company. He also claims that he used "99" on his W-4 form because he believed it was a computer code used to signify no withholding.

I

Peister represented himself at the arraignment and pretrial hearings he attended. In a pretrial motion for continuance he declared that he was seeking "effective and competent counsel . . . who can be expected to exercise loyalty to his client's interests," counsel with whom he was comfortable, agreeable, and compatible. In a pretrial hearing he made the following statement to the judge concerning his attempts to find a lawyer:

Your Honor, I am still actively seeking counsel, your Honor, and I have the problem that the attorneys who I contacted who I felt would be able to represent me and who felt that they would be willing to take the case are simply beyond my means now.

I am attempting to raise the necessary funds so that I can go forward with them. The other attorneys simply were unwilling or were unable to take the case, so at this point I am not represented by counsel.

The judge then informed Peister of his right to have counsel appointed upon showing his inability to pay for one by the required financial affidavit. Asserting he could not fill out the affidavit disclosing his assets without incriminating himself on matters at issue in this criminal prosecution, Peister asked the judge to guarantee him immunity on the answers. The court refused to do so, ruling that it could not grant immunity and that any "choice" between right to counsel and right against self-incrimination did not violate Peister's constitutional rights. Peister then proceeded pro se throughout the trial and this appeal. We decide that Peister's constitutional rights were not violated.

Arguably, defendant never represented here that he could hire no lawyer, but only that he could not find a lawyer compatible with his views who would represent him for a charge he was willing to pay. There is no absolute right to counsel of one's choice. See United States v. Weninger, 624 F.2d 163 (10th Cir. 1980). Nevertheless, for purposes of this case we assume that Peister desired appointed counsel because he could not afford any lawyer.

In Simmons v. United States, 390 U.S. 377, 88 S.Ct. 967, 19 L.Ed.2d 1247 (1968), the Supreme Court held that testimony given by a criminal defendant in support of a motion to suppress cannot be used against that defendant at trial; otherwise defendant would be

obliged either to give up what he believed, with advice of counsel, to be a valid Fourth Amendment claim or, in legal effect, to waive his Fifth Amendment privilege against self-incrimination. In these circumstances, we find it intolerable that one constitutional right should have to be surrendered in order to assert another. We therefore hold that when a defendant testifies in support of a motion to suppress evidence on Fourth Amendment grounds, his testimony may not thereafter be admitted against him at trial on the issue of guilt unless he makes no objection.

Id. at 394, 88 S.Ct. at 976. In United States v. Salvucci, --- U.S. ----, ----, 100 S.Ct. 2547, ----, 65 L.Ed.2d --- (1980), the court referred to, with approval, the "use immunity" granted by Simmons. The Supreme Court has not yet decided whether this principle should be applied to Sixth Amendment claims for counsel, see United States v. Kahan, 415 U.S. 239, 243, 94 S.Ct. 1179, 1181, 39 L.Ed.2d 297 (1974), but several circuit courts have so applied it. See United States v. Anderson, 567 F.2d 839 (8th Cir. 1977); United States v. Ellsworth, 547 F.2d 1096 (9th Cir.), cert. denied, 431 U.S. 931, 97 S.Ct. 2636, 53 L.Ed.2d 247 (1977); United States v. Branker, 418 F.2d 378 (2d Cir. 1969).

Peister's claim of Fifth Amendment protection against self-incrimination is based on the assumption that execution of the financial disclosure form would incriminate him. On the record presented, we do not know whether it would or not. We know neither the financial ability of the defendant nor what use, if any, might ever be made by the government of defendant's statements with regard to financial ability. The burden is on the defendant to demonstrate financial inability in order to obtain counsel. United States v. Ellsworth, 547 F.2d 1096 (9th Cir.), cert. denied, 431 U.S. 931, 97 S.Ct. 2636, 53 L.Ed.2d 247 (1977). We hold defendant should not be relieved of this burden when any conflict with the Fifth Amendment right is speculative and prospective only. The time for protection will come when, if ever, the government attempts to use the information against the defendant at trial. We are not willing to assume that the government will make such use, or if it does, that a court will allow it to do so.

II

Peister claims it was error for the prosecutor to cross-examine him on the identity of the other members of his church. Because Peister claimed First Amendment protection from answering, it is argued the jury could have inferred that the members of the church had something to hide. Peister objected to the prosecutor's question when it was asked, and the court sustained the objection. The court later informed the jury that the reason for the ruling was to protect the members' rights to freedom of association and religion. We do not believe this exchange requires reversal. Any negative inference that arose was only indirectly connected with Peister. Also, the judge's explanation legitimized defendant's objection.

The second alleged error concerns the following statement made by the prosecuting attorney in closing argument:

You'll be instructed that it is anybody's right to agree to disagree with the IRS, and revenue rulings are not the law in the sense they are not statutory law passed by Congress.

They are the official position, the interpretation of the Internal Revenue Service on the law.

So, you can disagree with it, but ladies and gentlemen, the fact that you can disagree with the Internal Revenue Service doesn't preclude you from finding Mr. Peister willfully disagreeing with...