U.S. v. Popkin, 90-8961

• Decision Date: 09 October 1991
• Docket Number: No. 90-8961,90-8961
• Citation: 943 F.2d 1535
• Parties: -5823, 91-2 USTC P 50,496 UNITED STATES of America, Plaintiff-Appellee, v. Gerald M. POPKIN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1535

943 F.2d 1535

68 A.F.T.R.2d 91-5823, 91-2 USTC P 50,496

UNITED STATES of America, Plaintiff-Appellee, v. Gerald M. POPKIN, Defendant-Appellant.

No. 90-8961.

United States Court of Appeals,

Eleventh Circuit.

Oct. 9, 1991.

Donald L. Wolff, St. Louis, Mo., Barry A. Karp, Atlanta, Ga., for defendant-appellant.

Robert E. Lindsay, Chief, Karen Quesnel, Alan Hechtkopf, Crim. Appeals and Tax Enforcement Policy Section, Tax Div., U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellee.

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

Before ANDERSON, Circuit Judge, RONEY ^* and LIVELY ^**, Senior Circuit Judges.

LIVELY, Senior Circuit Judge:

The defendant, Gerald M. Popkin, appeals from his jury conviction for violating 26 U.S.C. § 7212(a), one of the provisions of Chapter 75 of the Internal Revenue Code, which creates a number of tax crimes. Specifically, § 7212 criminalizes attempts to interfere with administration of internal revenue laws, and subsection (a) prohibits corrupt or forcible interference. The defendant contends that neither the activities referred to in the indictment nor those revealed by the evidence constitutes a crime under § 7212(a).

I.

A.

The criminal charges against the defendant stem from a government sting operation conducted with the assistance of Stephen Musick. Musick earned approximately $250,000 in 1977 through his involvement in drug transactions. In 1978, Musick requested and received assistance from the defendant, who was then a practicing attorney, in preparing 1977 tax returns which misrepresented the source and amount of Musick's 1977 income. The defendant had no further contact with Musick until 1985.

Musick was arrested in 1982 for selling approximately 12 kilograms of cocaine. While serving his prison term, Musick provided information to federal agents regarding his 1978 dealings with the defendant. After acquiring this information, government agents requested and Musick agreed to participate in a sting operation directed at the defendant.

Musick contacted the defendant in March 1985 and requested a meeting at the defendant's law office in Atlanta. Unaware that Musick was now acting in cooperation with the government, the defendant agreed to the meeting, which was recorded by Musick with a concealed audio recording device. Musick informed the defendant that he had earned approximately $200,000 on cocaine deals while he was in prison and that he now wanted to resurface and start showing income by filing tax returns for 1983 and 1984 and by getting into the construction and real estate business in California. Musick informed the defendant that his money from the drug deals was being held by an entity called Mid-American Financial in an offshore account and that he desired assistance in repatriating the money in a transaction that would disguise the source of the funds and require paying less than full income taxes.

The defendant recommended that he form a California corporation for Musick, that Musick sell stock in the new corporation to Mid-America Financial for $200,000, report heavy losses in the new corporation and then repurchase the stock for $3,000 to $10,000. The defendant cautioned Musick to comply with the formal requirements for running a corporation in order to maintain the proper corporate appearance. Later that same day, Musick arranged to meet with the defendant and two undercover agents posing as representatives of Mid-America Financial. The parties discussed formation of Musick's new corporation and methods of repatriating Musick's offshore funds.

In April 1985 the defendant met again with Musick and the two undercover agents in a video taped meeting at Mid-America's offices in St. Louis. At this meeting, the defendant delivered to Musick tax returns for the years 1983 and 1984 that the defendant had prepared. The defendant had reported $50,000 as gross income on Schedule C of the tax returns for each year. This sum was reported only as gross receipts or sales without any further indication of its source. These tax returns were never filed.

Subsequent to these meetings, the defendant set up the S. Musick Corporation in California, obtained a corporate seal which he mailed to Musick, and filed a statement of domestic stock corporation with the State of California. The defendant billed Musick a total of $1,755 for costs associated with formation of the corporation. This bill was paid by Mid-America Financial. The defendant also received $5,000 for preparation of the two income tax returns.

B.

The defendant was charged in a three count indictment in January 1990. Counts I and II of the indictment related to defendant's actions in preparing Musick's tax returns for 1983 and 1984. The defendant was acquitted on these counts but was convicted on count III, which charged the defendant under 26 U.S.C. § 7212(a) by alleging that Popkin

did corruptly obstruct and impede and endeavored to obstruct and impede the due administration of Title 26, United States Code, by preparing the tax returns described in Counts One and Two above and by creating a California corporation for Stephen Musick expressly for the purpose of enabling the said Stephen Musick to disguise the character of illegally earned income and repatriate it from a foreign bank.

At trial, count III of the indictment was amended to delete references to the tax returns described in counts I and II of the indictment, and the jury considered it as redacted. The charge against the defendant in count III of the indictment was thus based solely on the allegation that defendant corruptly obstructed and impeded and endeavored to obstruct and impede the due administration of Title 26 by creating the S. Musick Corporation.

In a pretrial motion, the defendant moved the district court to dismiss count III of the indictment for failure to state an offense within the statute. The defendant argued that § 7212(a) requires the exercise of force, intimidation or other menacing conduct directed against the person of a specific federal agent and that no such conduct was involved in the defendant's assistance in forming the S. Musick Corporation. The district court denied this motion at the commencement of the trial in July 1990.

At trial, the defendant moved for a judgment of acquittal on count III at the close of the government's evidence and at the close of all evidence, in each instance contending that count III failed to state an offense within § 7212(a). These motions were denied. On July 13, 1990, the jury returned a verdict of guilty on count III of the indictment. The defendant filed a motion to set aside the jury verdict, which was denied by the district court. The defendant was sentenced to one year and one day in prison and ordered to pay restitution to the government of $6,755, and this appeal followed.

II.

Decision of this case hinges on our construction of 26 U.S.C. § 7212(a), which provides:

§ 7212. Attempts to interfere with administration of internal revenue laws

(a) Corrupt or forcible interference

Whoever corruptly or by force or threats of force (including any threatening letter or communication) endeavors to intimidate or impede any officer or employee of the United States acting in an official capacity under this title, or in any other way corruptly or by force or threats of force (including any threatening letter or communication) obstructs or impedes, or endeavors to obstruct or impede, the due administration of this title, shall, upon conviction thereof, be fined not more than $5,000, or imprisoned not more than 3 years, or both, except that if the offense is committed only by threats of force, the person convicted thereof shall be fined not more than $3,000, or imprisoned not more than 1 year, or both. The term "threats of force", as used in this subsection, means threats of bodily harm to the officer or employee of the United States or to a member of his family.

A.

In his opening brief the defendant made but one argument--that it is an essential element of § 7212(a) that the act or conduct of the accused involve the use of force or threats of force against the person of a particular government agent. Thus, he argued, "[a]s the government failed in this case to prove any type of assaultive conduct or force, or any type of conduct whatsoever directed at or against a specific employee," he was entitled to a judgment of acquittal under count III. The defendant recognized that he was charged under "the latter half" of the statute, but contended that this portion of § 7212(a) requires the same element of force or threats of force as the first clause. He also repeated his assertion at trial that the statute requires that the force or threats be directed at an individual agent: "Interference with the operation of the IRS as an agency was not included, nor contemplated." (emphasis in brief).

The defendant sought to buttress this argument by stating that no reported case has involved a § 7212(a) prosecution where there was not an allegation that the defendant used force or threats of force to intimidate or otherwise prevent or attempt to prevent a particular IRS agent from performing his or her official duties. He then listed eight cases from four circuits in which the element of force against a particular agent was charged. Although he conceded that § 7212(a) is not ambiguous, the defendant argued that the text of previous similar statutes and the legislative history of the present statute, adopted as part of the Revenue Act of 1954, reinforce his interpretation.

In his reply brief, for the first time, the defendant argued that there was no evidence that the only act charged in the redacted indictment--creating a California corporation for Musick to disguise the character of illegally earned money and repatriate it--either obstructed or was intended to obstruct or impede the due administration of the Internal Revenue Code.

B.

The...