U.S. v. Tempesta, 78-1016

Decision Date28 December 1978
Docket NumberNo. 78-1016,78-1016
Parties78-2 USTC P 9844, 3 Fed. R. Evid. Serv. 1658 UNITED STATES of America, Appellee, v. Frank A. TEMPESTA, III, Appellant.
CourtU.S. Court of Appeals — Eighth Circuit

Randall D. B. Tigue, Minneapolis, Minn., for appellant.

Donald F. Paar, Asst. U. S. Atty., Minneapolis, Minn., for appellee; Andrew W. Danielson, U. S. Atty., Minneapolis, Minn., on the brief.

Before GIBSON, Chief Judge, LAY, Circuit Judge, and VAN PELT, Senior District Judge. *

VAN PELT, Senior District Judge.

Appellant was convicted on two counts of a three count indictment alleging that he willfully and knowingly filed false income tax returns for the years 1971 and 1972 in violation of 26 U.S.C. § 7206(1). He appeals claiming error in various trial and post-trial rulings by the district court. We affirm.

Defendant-appellant admitted that he was a gambler-bookmaker in the Minneapolis-St. Paul area. The government alleged defendant failed to report income from his gambling activity for the years 1971, 1972 and 1973. Since the defendant had destroyed the records of his gambling activities, the government reconstructed his income through the use of the bank deposit-currency expenditure method. This method analyzes the deposits to both checking and savings accounts to determine whether they are income or non-income, then looks for indications of gambling receipts or moneys not deposited in such accounts but used to purchase various goods, and finally subtracts out cash withdrawals where there is no indication how the withdrawn money was spent. Using this method, the government alleged that defendant's taxable income for 1971 should have been $15,523.57 instead of the $6,520.77 reported by him, for 1972 should have been $25,848.82 instead of $12,462.00, and for 1973 should have been $41,004.17 instead of $10,367.00. The defendant alleged that he had accurately reported his gambling income on Schedule C of his tax return as miscellaneous income, that certain deposits to his parents' bank account represented repayments of loans, and that the $25,000 paid by his parents in cash to purchase a Dairy Queen in 1973 was not financed by him but was saved by his father from income never reported to the Internal Revenue Service. The jury was unable to reach a verdict at the first trial. A second trial was held and the jury found defendant guilty of filing a false return for the years 1971 and 1972, but was unable to reach a verdict with regard to Count III alleging unreported income for the year 1973.

On appeal, appellant alleges the trial court erred in the following respects:

1. Denying a post-trial motion for arrest of judgment based on prejudicial preindictment delay;

2. Denying defendant's motions for judgment of acquittal;

3. Allowing the government to cross-examine a defense character witness as to whether he was aware of defendant's 19 year old felony conviction after the witness had already testified on direct that defendant had always kept his word and all dealings with him were honorable;

4. Refusing to give a requested instruction; and

5. Denying a motion for new trial on the basis of newly discovered evidence.

I. PREINDICTMENT DELAY

The indictment related to tax returns filed for the years 1971 through 1973. During the trial, a special agent for the Internal Revenue Service testified that he had begun his investigation of the defendant in February of 1974 and completed it in October of 1975. He indicated that his report was then reviewed and there might have been additional work done after that. An indictment was not returned until June 13, 1977. Appellant alleges that under Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972), prejudice has been shown because:

1. There is no evidence justifying a three-year delay, or the twenty months between completion of the agent's report and the return of the indictment;

2. During the preindictment delay the only two witnesses who could have testified from direct knowledge as to defendant's father's financial status died.

There must be proof of actual prejudice before an indictment will be dismissed. United States v. Stacey, 571 F.2d 440, 443 (8th Cir. 1978). Proof of prejudice alone is not sufficient for dismissal of an indictment without consideration of the reasons for the delay. United States v. Lovasco, 431 U.S. 783, 790, 97 S.Ct. 2044, 52 L.Ed.2d 752 (1977).

It is questionable how much, if any, prejudice actually accrued to the defendant by the loss of these two witnesses. Defendant's father was an upholsterer who worked for a company during regular business hours and had a shop in his garage where he worked evenings and weekends. Appellant alleges that these witnesses were the only persons who had direct knowledge of how much money the shop in the garage brought in. Since part of defendant's defense was that deposits to his parents' account were the repayments of loans and that the $25,000 in cash paid by his father to purchase a Dairy Queen did not come from him, it was necessary to show that his parents could afford such expenditures. This was difficult where the father's Social Security earnings showed he had never reported more than $6,500 in any one year from his regular occupation. The first alleged material witness was Nicholas DeGidio. An affidavit from his wife indicated that DeGidio worked off and on for defendant's father for two years, primarily around holidays, for as long as a week at a time. The second alleged material witness was Leonard Schwartz. An affidavit from an acquaintance established that Schwartz did sewing work for defendant's father. Defendant produced approximately eighteen witnesses who testified concerning defendant's father's occupation, the long hours he worked, how fast he could work, the number of pieces they saw delivered per week, the number of frames sitting in his shop, the quality of his work, and the approximate price per piece which he might receive. In addition to this testimony, there were also witnesses who testified as to the type of furniture in the father's house, the meals which were served, and the toys which the children had as indicative of the family's wealth. It is difficult to conclude that these two witnesses would have been other than cumulative. Even the defendant's mother did not know their financial situation and was aware only that her husband kept a money box with cash in it which was found empty upon his death. Any prejudice to defendant was speculative at best. Further, the government presented the lower court with additional information regarding the delay. Judge Larson's Memorandum Order indicated that although the initial report was completed in October of 1975, further investigation occurred apparently during the first half of 1976 and the file was reviewed by regional counsel and by the Tax Division in Washington, D.C. before the government officially decided to prosecute the case. Lovasco, supra, drew a distinction between allowing the prosecutor leeway in deciding whether there is sufficient evidence to proceed and governmental delay which is undertaken to gain a tactical advantage. There is no indication here that the government intentionally sought to prejudice defendant's case. The fact that the defendant kept no records of his gambling activity and after an initial interview refused to talk with investigators upon the advice of his attorney, only served to lengthen the investigation and make the presentment of the case more difficult. We see nothing to indicate that this is the type of case which should be dismissed for preindictment delay.

II. MOTIONS FOR ACQUITTAL

Defendant made a motion for acquittal at the end of the government's presentation and at the close of all the evidence and renewed these motions after the jury's verdict. On appeal, he argues that the jury verdicts as to Counts I and II were not supported by the evidence and should be reversed. The evidence must be viewed in a light most favorable to the government, and we accept as established all reasonable inferences which support the conviction. United States v. Scholle, 553 F.2d 1109, 1118 (8th Cir.), Cert. denied, 434 U.S. 940, 98 S.Ct. 432, 54 L.Ed.2d 300 (1977); United States v. Frazier, 545 F.2d 71, 74 (8th Cir. 1976), Cert. denied, 429 U.S. 1078, 97 S.Ct. 823, 50 L.Ed.2d 798 (1977).

The bank deposit-currency expenditure method of showing unreported income has been approved in a number of cases. See United States v. Esser,520 F.2d 213, 217 (7th Cir. 1975), Cert. denied, 426 U.S. 947, 96 S.Ct. 3166, 49 L.Ed.2d 1184 (1976); United States v. Morse, 491 F.2d 149, 151 (1st Cir. 1974); United States v. Slutsky, 487 F.2d 832 (2d Cir. 1973), Cert. denied, 416 U.S. 937, 94 S.Ct. 1937, 40 L.Ed.2d 287 (1974). Appellant admits that this is in general an accurate method of computing income, but argues that it has no relevance

to the instant case, in which the prosecution's own expert conceded that the system would not be accurate, if the fact situations testified to by all witnesses at trial were in fact true. 1

Actually, all this amounts to is a credibility question which was resolved by the jury in favor of the government. As in United States v. Todwick, 410 F.2d 1202, 1204 (8th Cir.), Cert. denied, 396 U.S. 841, 90 S.Ct. 105, 24 L.Ed.2d 92 (1969), which also involved a violation of 26 U.S.C. § 7206(1), the government presented substantial evidence which, if believed by the jury, would support the conviction. The defendant offered testimony which, if believed, would preclude the conviction. We have examined the record thoroughly. Without detailing all of the witnesses and exhibits, the record in general shows the government presented evidence that checks from several different sources were deposited to defendant's account or that of his family, including his future wife. At trial, some makers of...

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8 cases
  • U.S. v. Bartlett
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • August 5, 1986
    ...of proving actual prejudice flowing from the pre-indictment delay. Lovasco, 431 U.S. at 789-90, 97 S.Ct. at 2048; United States v. Tempesta, 587 F.2d 931, 933 (8th Cir.1978), cert. denied, 441 U.S. 910, 99 S.Ct. 2005, 60 L.Ed.2d 380 (1979). To prove actual prejudice, a defendant must specif......
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    • U.S. Court of Appeals — Eighth Circuit
    • September 2, 1993
    ...that the district court exclude the statistical evidence, Martinez may not now complain about its exclusion. See United States v. Tempesta, 587 F.2d 931 (8th Cir.1978), cert. denied, 441 U.S. 910, 99 S.Ct. 2005, 60 L.Ed.2d 380 Martinez raises one additional, less complicated, issue, claimin......
  • U.S. v. Taylor
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    • U.S. Court of Appeals — Eighth Circuit
    • September 5, 1979
    ...against the prejudice shown by the accused. United States v. Lovasco, supra, 431 U.S. at 790, 97 S.Ct. 2044; United States v. Tempesta, 587 F.2d 931, 933 (8th Cir. 1978). Taylor specifically alleges prejudice on the grounds that: (1) government witnesses' memories faded; (2) a criminal inve......
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    • U.S. Court of Appeals — Eighth Circuit
    • February 27, 1980
    ...the evidence were made. Such evidence did not in our opinion, prejudice appellant's right to a fair trial. See, United States v. Tempesta, 587 F.2d 931, 936-937 (8th Cir. 1978). Ms. Jane Sweet was called as a summary witness by the Government. She is an I.R.S. agent, trained as a certified ......
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