U.S. v. Ross

• Decision Date: 21 April 1975
• Docket Number: No. 74--2969,74--2969
• Parties: 75-1 USTC P 9428 UNITED STATES of America, Plaintiff-Appellee, v. Deloy C. ROSS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 757

511 F.2d 757

75-1 USTC P 9428

UNITED STATES of America, Plaintiff-Appellee, v. Deloy C. ROSS, Defendant-Appellant.

No. 74--2969.

United States Court of Appeals, Fifth Circuit.

April 21, 1975.

Rehearing and Rehearing En Banc

Denied May 16, 1975.

Joe J. Tritico, Lake Charles, La., for defendant-appellant.

Donald E. Walter, U.S. Atty., L. Edwin Greer, Asst. U.S. Atty., Shreveport, La., for plaintiff-appellee.

Appeal from the United States District Court for the Western District of Louisiana.

Before AINSWORTH, GODBOLD and SIMPSON, Circuit Judges.

AINSWORTH, Circuit Judge:

Defendant Deloy C. Ross appeals from a judgment of conviction entered after a jury trial on five counts of evasion of federal income tax. He raises three issues on this appeal: that the trial court improperly denied in part his motion for discovery under Fed.R.Crim.P. 16; that the prosecution failed to fulfill its obligation to disclose evidence favorable to the defense under Brady v. State of Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963); and that the Government denied him due process and violated his Fourth Amendment rights in acquiring from a third party certain papers and records allegedly belonging to him. We affirm the conviction.

I. Factual Background of the Investigation and Trial

In May 1969, two Internal Revenue Service agents interviewed Deloy Ross and told him that they were undertaking an investigation of his tax returns that might lead to criminal charges. After conferring with his accountant and attorney, Ross agreed to permit the agents to inspect and hand copy business records to be provided by him at his accountant's office. These records included accounting books and corporate records of a motel owned by Ross, of Ross Investments, Inc., and of W. C. Ross & Son, a general store partnership between Ross and his father (W. C. Ross) which was dissolved in January 1968. These records were for tax years 1965 through 1969. It was agreed that none of the records thus provided was to be Xeroxed or removed by the IRS agents.

As part of their investigation the IRS agents interviewed defendant's stepbrother, William Taylor. Defendant had sold the store operated under the W. C. Ross & Son partnership to Taylor in 1968, and several boxes containing financial records of the partnership remained there. In September 1970, Taylor took these records to attorneys looking into his claims against his mother's estate. In March 1971, Taylor retrieved some of these records and turned them over to the IRS agents, in response to their request. The agents received the remaining records directly from the attorneys, with Taylor's permission. This investigation culminated in indictments against Deloy Ross for evasion of income tax owed by himself and his wife for 1966, 1967, and 1968, and for evasion of income tax owed by Ross Investments, Inc. for 1968 and 1969.

The Government's case at trial was proved by the 'net worth' method, which is used to establish a taxpayer's true income when there is no direct proof of the unreported income. The net worth method involves calculating the taxpayer's assets and liabilities at the beginning of the relevant tax period to establish an initial net worth. The same calculation is performed as to assets and liabilities at the end of the tax period. If the taxpayer's increase in net worth plus his living expenses for that tax period exceed his reported income and cannot be explained by receipt of nontaxable income, the existence of unreported income may be inferred.

Before trial defendant filed a written motion seeking discovery from the Government of

A. All books, records, papers, documents, photographs, tangible objects

and material obtained from or belonging to the accused;

B. Copies of all books, records, papers, documents, photographs, tangible objects and material obtained from or belonging to the accused;

C. All books, records, papers, documents, tangible objects and material from whomsoever obtained which are favorable to the accused on the issue of his guilt or punishment and which will aid him in the preparation of his defense;

D. All books, records, papers, documents and physical material which the Government intends to offer as evidence in this case.

This motion was granted, and the Government provided defendant with a set of computations and data sheets it developed in attempting to establish the amount of unreported income attributable to defendant and his enterprises during the years in question.

Ross sought to rebut the Government's case by asserting that he had a substantial cash accumulation from years prior to the tax years in question, and that he received large cash gifts (several hundred thousand dollars) from his father, W. C. Ross, who died in 1969. The Government sought to refute this assertion by offering the testimony of an IRS agent who had analyzed W. C. Ross' personal income tax returns and the monthly accounting statements of the W. C. Ross & Son partnership from 1952 through 1968. The tax returns for 1952 through 1968 were introduced into evidence, ¹ as were the accounting statements of W. C. Ross & Son for 1952 through 1964, except for 1956. Although a few monthly statements for this period were not introduced, the vast majority were. Defendant made no objection to the introduction of this evidence.

The jury returned a verdict of guilty on all counts. Defendant filed several motions for a new trial, arguing that the Government had seized the records of the W. C. Ross & Son partnership from Taylor in violation of defendant's Fourth Amendment rights and in violation of the Government's agreement with him; also, that the government had failed to produce materials described in defendant's pretrial motion for discovery, which had been granted by the court, as well as other evidence required to be disclosed under Brady v. State of Maryland, supra. These post-trial motions were denied, and defendant brought this appeal.

II. The Adequacy of Pretrial Discovery

A. Failure to Raise This Alleged Error at Trial

Defendant argues on this appeal that the trial court partially denied his discovery motion. The record shows, however, that the motion was granted by the trial judge without qualification. Whether an error was committed is, of course, affected by the extent of defendant's efforts, under Fed.R.Crim.P. 16(g), ² to bring to the court's attention any alleged noncompliance by the Government with his discovery requests.

The records of W. C. Ross & Son were introduced during the prosecution's case. Defendant was aware that the boxes of records stored at his stepbrother's business contained the financial statements introduced into evidence, yet no motion to suppress this evidence was offered until defendant's motion for a new trial, made after the jury's verdict was received and 43 witnesses and 1,300 pages of transcript later. ³ Moreover, during the prosecution's case an IRS agent testified (and defense counsel stipulated) that the stepbrother Taylor was the source of the records. ⁴

This Court and others have criticized failure to raise alleged discovery errors promptly. See United States v. Fink, 5 Cir., 1974, 502 F.2d 1, 7; United States v. James, 5 Cir., 1974, 495 F.2d 434, 436--437; United States v. Baxter, supra. ⁵ Defendant's ample opportunity to ask the trial court to order the Government to comply with his request for documents must be taken into account in determining whether error was committed in denying the motions for a new trial.

B. The Provisions of Fed.R.Crim.P. 16(b) and the Standard of Review

Fed.R.Crim.P. 16(b) provides, in relevant part:

(b) Other Books, Papers, Documents, Tanbigle Objects or Places. Upon motion of a defendant the court may order the attorney for the government to permit the defendant to inspect and copy or photograph books, papers, documents, tangible objects, buildings or places, or copies or portions thereof, which are within the possession, custody or control of the government, upon a showing of materiality to the preparation of his defense and that the request is reasonable.

The operative terms of the rule are 'materiality' and 'reasonable.' The phrase 'the court may order' in the text of Rule 16(b) clearly indicates that the granting of discovery motions is a matter of the trial court's discretion. In judging the correctness of the trial court's conclusion that the evidence not tendered by the Government was not material and that defendant's request for such materials (as clarified and renewed in his motion for a new trial) was not reasonable, we will not interfere with the trial court's ruling in the absence of a clear abuse of discretion. United States v. Stone, 5 Cir., 1973, 472 F.2d 909, 916. ⁶ We find no abuse of discretion in this regard.

C. Materiality of the Disputed Documents

As a matter of general construction '(t)he measure of discovery permitted by the Rules of Criminal Procedure is not intended to be as broad as in a civil case. Clay v. United States, 5 Cir., 1968, 397 F.2d 901, 915, vac. on other grounds sub nom. Giordano v. United States, 394 U.S. 310, 89 S.Ct. 1163, 22 L.Ed.2d 297 (1969). Materiality means more than that the evidence in question bears some abstract logical relationship to the issues in the case. See United States v. Schembari, 4 Cir., 1973, 484 F.2d 931, 935 (fact that photographs in Government's possession were of demonstration during which defendant was arrested held insufficient to show materiality). There must be some indication that the pretrial disclosure of the disputed evidence would have enabled the defendant significantly to alter the quantum of proof in his favor. The extensiveness of the material which the Government did produce, United States v. Hildebrand, 5 Cir., 1974, 506 F.2d 406, 409, and the availability of the disputed material from other sources, including the defendant's own knowledge, must also be considered. See United States v. Felts, 5 Cir., 1974, 497...