U.S. v. Stahl

• Decision Date: 22 January 1980
• Docket Number: No. 262,D,262
• Citation: 616 F.2d 30
• Parties: 80-1 USTC P 9165 UNITED STATES of America, Appellee, v. Stanley STAHL, Defendant-Appellant. ocket 79-1218.
• Court: U.S. Court of Appeals — Second Circuit

Page 30

616 F.2d 30

80-1 USTC P 9165

UNITED STATES of America, Appellee, v. Stanley STAHL, Defendant-Appellant.

No. 262, Docket 79-1218.

United States Court of Appeals Second Circuit.

Argued Oct. 2, 1979.

Decided Jan. 22, 1980.

Milton S. Gould, New York City (Saul S. Streit, Ralph L. Ellis, Richard F. Czaja, George O. Guldi, Shea, Gould, Climenko & Casey, New York City, on the brief), for defendant-appellant.

Frederico E. Virella, Jr., Asst. U. S. Atty., New York City (Robert B. Fiske, Jr., U. S. Atty. and Gregory L. Diskant, Asst. U. S. Atty., New York City, on the brief), for appellee.

Before GURFEIN, ^* VAN GRAAFEILAND, and KEARSE, Circuit Judges.

VAN GRAAFEILAND, Circuit Judge:

This is an appeal from a judgment following a jury trial in the United States District Court for the Southern District of New York, in which appellant was convicted of conspiring and aiding and abetting in the bribery of a government employee (26 U.S.C. § 7214(a)(2)). Appellant's principal contention is that prejudicial prosecutorial misconduct deprived him of a fair trial. Because the record amply supports that contention, we reverse the judgment of the district court and remand for a new trial.

THE FACTS

In 1970, Max Stahl died and his son, Stanley Stahl, the defendant herein, became the executor of his estate. At the time of his death, Max Stahl owned or had an interest in at least twelve parcels of real estate, and defendant retained Henry Brooks, president of a local appraisal firm, to appraise this property for estate tax purposes. Brooks evaluated the total equity in the properties at $1,275,541 and determined decedent's interest to be $658,455. Abraham Brody, the attorney for the estate, used these figures in preparing the estate tax return, which was filed in April 1972.

At that time, Mario Triolo was the chief supervisor of the IRS Valuation Group, which had the duty of reviewing appraisals submitted for estate tax purposes. The review of the Stahl estate appraisals was performed by Harold Broadman, an IRS appraiser and a subordinate of Triolo. In 1973, Broadman met with attorney Brody and informed him that there was going to be a significant increase in the appraised value of some of the Stahl properties. Brody apparently conveyed this information to the defendant who in turn contacted Brooks about the matter. According to Brooks, who testified for the Government as an unindicted coconspirator, Brooks then had a conversation with Triolo during which Triolo suggested a bribe. Brooks testified that Triolo demanded $7,000 or $8,000 and that Brooks in turn demanded $10,000 from Stahl, planning to keep the excess for himself. Allegedly, the payoff was made by Brooks to Triolo in the early fall of 1973 with money provided by Stahl.

Ultimately, the appraisals on the Stahl properties were raised by approximately $450,000, resulting in the levy of an additional $88,000 in estate taxes. The Government theorized, without presenting any evidence to support its theory, that, but for the bribe, the increase in appraised value would have been larger than it was. However, because neither the Government nor Stahl called Broadman as a witness, the record is unclear as to whether the increase in appraised value was in fact any less than Broadman had initially proposed. ¹

An investigation into IRS Valuation Group corruption conducted in 1977 and 1978 revealed the complicity of Brooks in several alleged bribes. When confronted with the evidence against him, Brooks entered into a cooperation agreement with the Government in November 1978. Subsequently, Brooks participated in a video-taped conversation with Triolo and two audio-taped conversations with Stahl. Portions of these conversations were introduced into evidence. After a nine-day trial, the jury returned a verdict of guilty.

PROSECUTORIAL MISCONDUCT

Appellant contends that the prosecutor engaged in a continuous course of conduct designed to equate wealth with wrongdoing and to appeal to the potential bias of not-so-wealthy jurors against a very wealthy real estate entrepreneur. That this was the prosecutor's trial strategy, appellant suggests, is readily apparent from the Government's Memorandum of Law in Response to Defendant's Motion for a New Trial. In that memorandum, the Government sought to defend the tenor of remarks made in summation by stating that it "properly argued to the jury the logical inference that a man whose total life is geared to make money in real estate would also, in all likelihood, be driven by greed to pay the $10,000 bribe in order not to pay substantial monies in taxes." (emphasis in original).

Although the district court denied defendant's motion for a new trial, it strongly denounced the Government's argument on this point, commenting that "it impermissibly equates success, affluence and a single minded occupation with one's business affairs with greed and corruption." The court concluded, however, that the Government had not really gone that far in its argument on summation and that, in any event, the jury had been given curative instructions against drawing adverse inferences from the defendant's wealth or social status. ²

Our own review of the record and our questioning of the Assistant United States Attorney during oral argument lead us to conclude that this young prosecutor did in fact intend to arouse prejudice against the defendant because of his wealth and engaged in calculated and persistent efforts to arouse such prejudice throughout the trial. In addition, the prosecutor made several statements during the trial that were not supported by the evidence and may, in some instances, have been intentionally misleading.

By way of example, the prosecutor stated in his opening that "this case is also about money, tremendous amounts of money", and then continued:

The proof in this case will not deal with small time bribe-givers. It will deal, however, with the basic roots of corruption both within and without or outside the IRS. . . . (Y)ou are going to hear proof, members of the jury, about the unchecked flow of corruption in various Park Avenue offices, in the IRS, and in the executive offices of a major real estate company in this city. . . . (I)t will deal with the man whose illegal conduct in business made him a major corrupt bribe-giver in the City of New York.

Actually, the Government sought to connect Stahl with one bribe only, and this had nothing to do with the conduct of Stahl's business but instead arose out of the administration of his father's estate.

Time and again during interrogation of witnesses, the prosecuting attorney went out of his way to refer, or have witnesses refer, to the "Park Avenue offices" of the various participants in this drama, an emphasis that had nothing whatever to do with defendant's guilt or innocence. When questioning Attorney Brody, the prosecutor persistently tried to get Brody to characterize the Stahl estate as a "substantial estate" of some "$13.5 million dollars", when in fact the prosecutor had the estate tax forms in front of him and knew that the total estate was approximately one million dollars and the taxable estate, after legitimate deductions, was approximately $300,000. ³ When the defendant took the stand, the prosecutor made a point of delving into his estimated net worth (over $20 million) and how he had managed to build up such a fortune.

Finally, in summation, the prosecutor referred to Stahl as "a multi-millionaire businessman in real estate, who his whole life is geared to buy property, buy property" and whose "office, his suite office, has just dollar signs, dollar signs all over. That's all he cares about." In discussing Stahl's motivation, the prosecutor said, "But because Mr. Stahl is a man whose life is geared to make money in real estate, money, money, money, this is a chance he saw to have the fix in . . . ." In the prosecutor's words:

The decision was, "Do I have a choice...