U.S. v. Shelton

• Decision Date: 27 October 1978
• Docket Number: No. 77-1575,77-1575
• Citation: 588 F.2d 1242
• Parties: 79-1 USTC P 9189 UNITED STATES of America, Plaintiff-Appellee, v. Darrel E. SHELTON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1242

588 F.2d 1242

79-1 USTC P 9189

UNITED STATES of America, Plaintiff-Appellee, v. Darrel E. SHELTON, Defendant-Appellant.

No. 77-1575.

United States Court of Appeals Ninth Circuit.

Oct. 27, 1978.

Thomas R. Sheridan (argued), of Simon & Sheridan, Los Angeles, Cal., for defendant-appellant.

Ernest J. Brown, Asst. U. S. Atty. (argued), M. Carr Ferguson, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., for plaintiff-appellee.

Appeal from the United States District Court For the Central District of California.

Before DUNIWAY, Senior Circuit Judge, ELY, Circuit Judge, and EAST, Senior District Judge. ^*

EAST, District Judge:

THE APPEAL

Darrel E. Shelton (Shelton) appeals his judgment of conviction and suspended sentence entered upon a jury verdict of guilty on one count of violating 26 U.S.C. § 7206(1) (willfully filing a false income tax return. ¹ We note jurisdiction under 28 U.S.C. § 1291 and affirm.

ISSUES ON APPEAL

Shelton urges these issues for review:

1. The evidence was insufficient to support the jury's verdict;

2. Various forms of Government misconduct deprived him of a fair trial;

3. The District Court erred in refusing to submit Shelton's requested special verdict form; and

4. The District Court improperly instructed the jury.

FACTS

Shelton was charged with under reporting his income for the year 1972. At that time, he was the Business Manager for Iron Workers Union, Shopmen's Local 509. The essence of the Government's case was that Shelton received and failed to report as income payments in property and cash from Joseph Hauser in return for getting the Union to shift its prepaid health insurance plan from Aetna to National Prepaid Health Plan (NPHP), one of several companies run by Hauser.

While the Government elected to proceed on the omission of specific items theory, rather than the net worth expenditure theory, the indictment did not spell out the amount of unreported income and the defendant was not initially made aware of the allegedly unreported items. However, the District Court denied Shelton's pretrial motion for a bill of particulars after the Government stated that the amount of unreported income charged was approximately $8,000. The District Court further ordered that the Government would be precluded from proving amounts in excess of the $8,000. Nevertheless, in its opening statement, the Government mentioned and tendered exhibits for items exceeding the $8,000 limit. On objection, the Government repeated its intention to offer evidence as to items exceeding the $8,000 limit. After colloquy, the Court reaffirmed the limit and required the Government to choose from its pretrial memorandum which items it would attempt to prove. ² The excessive exhibits were then withdrawn and the District Court immediately instructed the jury on which alleged items of income it would consider. During the course of the trial, Shelton admitted receiving four of the six items but contended they were not reportable as income because they were gifts from his long-time friend Hauser. He denied receiving the $5,000 cash payment or the clothing.

The Government's key witness, Ronald Prohaska, the Union's former Business Agent working under and with Shelton, testified that the Union's health insurance plan was up for renegotiation in 1972 and in late 1971 Shelton told him that Hauser would pay them a large amount if they could swing the Union's health insurance business to Hauser's company. He further testified that he and Shelton successfully accomplished the shift to NPHP in May or June of 1972. Prohaska also testified that he, Shelton and Hauser were present at a Mr. Big's clothing store when Hauser paid for several hundred dollars worth of clothing for the two of them. He also stated that he and Shelton each received a $5,000 cash payment from Hauser in June, 1972. ³

Prohaska also testified that in May, 1973, after the Government began its investigation of their activities, he, Shelton, Hauser and Sidney Krems attended a meeting in which they discussed which of Hauser's payments to them could "haunt" them.

Defense counsel vigorously cross-examined Prohaska. First, Prohaska admitted that he had been given immunity for the very same acts for which Shelton was being tried; second, he admitted receiving more than $3,000 in witness or informant's fees from the Government approximately $2,400 of this amount was related to his testimony in the instant case; and third, Prohaska admitted that he had perjured himself before the grand jury on at least two occasions with respect to the overall investigation which encompassed Shelton's case. Prohaska's testimony that he bore no animosity toward and made no threats against Shelton because Shelton fired him from his union job was directly contradicted by the testimony of two defense impeachment witnesses.

Finally, the core of Prohaska's testimony was directly contradicted by Shelton, Hauser, and Herrera.

DISCUSSION

Issue 1, Sufficiency of the Evidence.

The only disputed elements in this case were whether Shelton's return was materially false (I. e., whether he had even received the unreported items or, if so, whether they were gifts and hence not reportable) ⁴ and whether he acted willfully in failing to report them (I. e., whether he reasonably believed the items were gifts).

Shelton claims that the evidence was insufficient because "Prohaska was so thoroughly impeached that as a matter of law his testimony should not be considered or in the alternative, that even with his testimony the evidence is still insufficient . . .."

"On appeal from a criminal conviction, this court must construe the evidence direct and circumstantial in a manner consistent with the jury's verdict, resolving all conflicts in the evidence in favor of the prosecution. . . . We cannot weigh conflicting evidence, nor consider the credibility of witnesses." United States v. Rodriguez, 546 F.2d 302, 306 (9th Cir. 1976). Citations omitted. In United States v. Rojas, 554 F.2d 938 (9th Cir. 1977), this Court reversed a decision in which the District Court, accepting an argument identical to that made here, granted the defendant's motion for a judgment of acquittal following the return of a guilty verdict by the jury. In reversing, this Court reiterated that " 'it is the exclusive function of the jury to determine the credibility of witnesses, resolve evidentiary conflicts, and draw reasonable inferences from proven facts.' " Id. at 943, quoting United States v. Nelson, 419 F.2d 1237, 1241 (9th Cir. 1969).

The uncorroborated testimony of an accomplice, although suspect, can support a conviction. United States v. Hibler, 463 F.2d 455, 458 (9th Cir. 1972). This is "the rule even though the accomplice is in a position to gain favors from the government by his testimony . . . and even though there are inconsistencies in his story . . . so long as it is not 'incredible or unsubstantial on its face.' " Lyda v. United States, 321 F.2d 788, 794-95 (9th Cir. 1963). (Citations omitted). Before an appellate court may disregard a witness' testimony, it must be "inherently implausible." Rojas, 554 F.2d at 943. Accord, United States v. Cravero, 530 F.2d 666 (5th Cir. 1976). We cannot say that Prohaska's testimony was inherently implausible.

Accordingly we believe the evidence, viewed in the light most favorable to the Government, is sufficient to support the jury's verdict.

Issue 2, Alleged Government Misconduct.

Shelton's next argument is that the combined effect of various forms of Government misconduct deprived him of a fair trial. The conduct complained of by Shelton covers three categories: First, he argues that the Government illegally paid Prohaska informant fees under the guise of a federal statute providing only for the payment of witness fees under conditions not here met. Second, Shelton claims he was prejudiced when the Government violated the District Court's order limiting proof when it submitted and the jury viewed exhibits detailing allegedly unreported items exceeding the District Court's $8,000 limitation. And third, Shelton contends that he was prejudiced by the Government's delay with respect to some evidence and failure with respect to other evidence to turn over exculpatory evidence as required under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), and its progeny, and to a lesser extent the Jencks Act, 18 U.S.C. § 3500. These complaints are considered seriatim.

During the preparation of this case for trial, the Government paid Prohaska substantial sums of money ostensibly as witness fees pursuant to 28 U.S.C. § 1821. This statute provides for the payment of $20 per day plus travel expenses to "(a) witness attending in any court of the United States, or before a United States commissioner (magistrate), or before any person authorized to take his deposition . . . ." Shelton argues that under the facts here, these payments were made in violation of § 1821 and constituted disguised informant fees which misled the jury about Prohaska's credibility. On this basis, Shelton invites us to use this Court's supervisory power to strike Prohaska's testimony.

Assuming, Arguendo, that the payments violated the witness fee statute, it would not justify the remedy sought. The use of the Court's supervisory power is properly limited to those situations in which the Government's misconduct, though falling short of a constitutional violation, threatens " 'the integrity of the judicial process' . . .." United States v. Chanen, 549 F.2d 1306, 1309 (9th Cir.), Cert. denied, 434 U.S. 825, 98 S.Ct. 72, 54 L.Ed.2d 83 (U.S.1977). (Citation omitted). United States v. Basurto, 497 F.2d 781, 793 (9th Cir. 1974) (Hufstedler, J., concurring specially).

The issue of payments to Prohaska was fully aired to the jury. ⁵ Moreover, the District Court cautioned the jury about carefully weighing the credibility of "an informer who provides evidence against a defendant for...