United States v. Achilli, No. 11575.

CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)
Writing for the CourtMAJOR, LINDLEY, and SWAIM, Circuit
Citation234 F.2d 797
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Sam ACHILLI, Defendant-Appellant.
Decision Date31 July 1956
Docket NumberNo. 11575.

234 F.2d 797 (1956)

UNITED STATES of America, Plaintiff-Appellee,
v.
Sam ACHILLI, Defendant-Appellant.

No. 11575.

United States Court of Appeals Seventh Circuit.

June 5, 1956.

Rehearing Denied July 31, 1956.


234 F.2d 798
COPYRIGHT MATERIAL OMITTED
234 F.2d 799
COPYRIGHT MATERIAL OMITTED
234 F.2d 800
Carl J. Batter, Washington, D. C., Frank J. Gagen, Jr., Chicago, Ill., for appellant

Charles K. Rice, Asst. Atty. Gen., Dickinson Thatcher, Atty., Tax Division, U. S. Dept. of Justice, Washington, D. C., Robert Tieken, U. S. Atty., Chicago, Ill., Vincent P. Russo, Atty., Department of Justice, Washington, D. C., for appellee.

Before MAJOR, LINDLEY, and SWAIM, Circuit Judges.

LINDLEY, Circuit Judge.

Defendant appeals from a judgment entered on a jury verdict finding him guilty on three counts of an indictment charging willful evasion of income taxes for the taxable years 1946, 1947 and 1948, in violation of Section 145(b) of the Internal Revenue Code of 1939, 26 U.S.C.

The Government employed what is commonly referred to as the net worth method of establishing deficiencies, proceeding on the theory that increases in the taxpayer's net worth over that at the beginning of the taxable year, plus non-deductible expenditures, constituted income to the taxpayer during that period unless satisfactorily explained. Employing this procedure, the Government calculated the amount of defendant's net taxable unreported income during the indictment periods at $13,803.94 in 1946, $36,958.63 in 1947 and $20,623.18 in 1948. It offered evidence tending to prove that the income was derived from over-ceiling charges for automobiles sold by a co-partnership composed of defendant and one Gromer, doing business under the name and style of Highland Motor Sales, and Barney's Snooker Hall, owned by defendant until the latter part of 1946, and from interest on loans to various persons.

With respect to the operation of Highland, on the evidence, the jury was justified in finding the following pertinent facts. During the three years, defendant, or his agents, made sales of automobiles at premium prices of about $600 per car above the OPA maximum price. The ceiling price of each car was entered

234 F.2d 801
upon the partnership books, and only this amount was reflected in the partnership returns. The black market premium was not recorded or reported. These premium sales seem to have been concealed from defendant's co-partner, Gromer; they were not reported in his individual income tax returns

Defendant complains of some 19 remarks of counsel excerpted from the record, contending that misconduct of the United States Attorney requires a reversal of the judgment. The first was made during the course of reception of the Government's testimony. Defendant's attorney objected to the use of certain records in the examination of a Government witness, asserting that they were admittedly false. The Government's attorney remarked, "And we are going to show they are false because you made them false." On objection, this remark was stricken.

The other 18 instances occurred during the course of final argument to the jury. Of these, objection was made to only two. "Counsel for the defense cannot as a rule remain silent, interpose no objections and after a verdict has been returned seize for the first time on the point that the comments to the jury were improper and prejudicial." United States v. Socony Vacuum Oil Co., 310 U. S. 150, 238, 60 S.Ct. 811, 84 L.Ed. 1129. That principle must govern the sixteen asserted instances of misconduct, unless the remaining contentions disclose misconduct of a flagrant nature resulting in a pattern of prejudicial impropriety. We think no such pattern is shown.

We do not condone the prosecutor's unqualified statement that all defense witnesses were unwilling witnesses, responding only to subpoena. However, defendant's objection to the remark was sustained and the remark stricken. And in addition to such curative action, the court instructed the jury that oral summation was no part of the evidence and was not to be considered in arriving at a verdict.

The second remark to which objection was taken related to the terms of a purchase contract. The Government introduced evidence showing that defendant had bought the entire interest of one Turpin, including the realty, equipment and stock of goods in the Red Lion, a local restaurant and bar, in 1945. In his closing argument the United States Attorney, in summing up defendant's beginning net worth, referred to this transaction as including a transfer of the capital stock of Red Lion, Incorporated, when, in fact, the agreement between Turpin and defendant included no reference to capital stock. Defendant's objection to this statement was overruled.

Although counsel's reference to the capital stock was unwarranted, it was an invited response to defense counsel's assertion and argument to the jury that the value of the corporate stock had been omitted from defendant's opening net worth statement. The record discloses the existence of a corporation known as Red Lion, Inc., of which defendant was an officer, and shows that the board of directors, in February, 1948, authorized and directed the officers of the corporation to enter into a lease with defendant of the premises on which Red Lion was located. We are directed to nothing of record which indicates when or by whom Red Lion, Inc., was incorporated, or who owned its corporate stock.

The Red Lion transactions are silent in this respect. Defendant's purchase agreement of the property recited that the seller, Turpin, agreed to convey the real estate, fixtures and stocks of liquors and goods to defendant in consideration of $18,400. In 1948, defendant transferred to one Fritzel an undivided ½ interest in all the chattels, fixtures, liquor and licenses. An attached schedule showed that the value of the stock of merchandise was $10,796.71 and that the sale price of ½ thereof was $5,398.30. Neither transaction alluded to corporate ownership of any of the property and each item was fully reflected in the Government's net worth computation.

Upon the capital gains schedule of defendant's 1948 tax return, notations as

234 F.2d 802
follows were entered with respect to an item listed as "Sales of stock in Red Lion": acquired 1945, at a cost basis of $4,673.18; sold 1948 at a sales price of $5,894.85. In cross-examination of Government's witness Weber, defense counsel interpolated "capital" into this entry immediately preceding the word "stock", and questioned him as to where the value of the "capital stock" was reflected upon the Government's computation of net worth at the beginning of the taxable periods. Counsel took the same approach in his summation to the jury, arguing that the cost base of this item, $4,673.18, should be set up as an asset omitted from the opening net worth computation. The context of the United States Attorney's argument shows conclusively that his reference to the value of the corporate stock as included in the $18,400 purchase price paid to Turpin was in response to the argument by defense counsel

Each party was arguing for an inference not supported by the record. The accountant who prepared the 1948 return testified that the capital gains entries thereon were based upon the transaction between defendant and Fritzel. The word "stock" in that entry, therefore, takes its meaning from the contract of the parties to the transaction, which, in this respect, purports to convey only a stock of merchandise in inventory. If counsel for the Government went outside the record in the respect noted, the excursion was in response to an opposing venture de hors the record by the defense. The error, in overruling the objection was inconsequential, especially in view of the instructions to which allusion has previously been made that oral summation is no part of the evidence.

Government counsel may, at times, have been an overzealous advocate. In most of these instances, his remarks went in without objection, as we have noted. When his argument to the jury is considered as a whole, we think that the excerpts extracted from context for our attention present for the most part nothing more than zealous advocacy, see Di Carlo v. United States, 2 Cir., 6 F.2d 364, certiorari denied 268 U.S. 706, 45 S.Ct. 640, 69 L.Ed. 1168, and, in any event, that they can not be classified as misconduct requiring reversal. As we said in United States v. Doyle, No. 11528, 7 Cir., 234 F.2d 788, 796, quoting from Malone v. United States, 7 Cir., 94 F.2d 281, 288, certiorari denied 304 U.S. 562, 58 S.Ct. 944, 82 L.Ed. 1529; "`Counsel have a right to make any argument based upon evidence proven in the case, or which may be reasonably inferred therefrom, and to make reply to that made by opposing counsel, and, in doing so, statements may be made which otherwise would be improper. Defendant's trial counsel evidently did not regard the argument as vicious or unfair as objection was made to one statement only * * *.'" We think the situation wholly unlike the instances of misconduct appearing in the cases relied upon by defendant. Berger v. United States, 295 U.S. 78, 55 S.Ct. 629, 79 L.Ed. 1314; N. Y. Central R. Co. v. Johnson, 279 U. S. 310, 49 S.Ct. 300, 73 L.Ed. 706; Pierce v. United States, 6 Cir., 86 F.2d 949; Volkmor v. United States, 6 Cir., 13 F.2d 594.

Defendant's contention that the net worth evidence was incompetent and inadmissible misconceives the purpose of the provisions of Section 41 of the Internal Revenue Code of 1939, 26 U.S.C. (1952) § 41. He insists that, before the net worth method may be employed in any income tax case, Section 41 requires a determination by the Commissioner of Internal Revenue that use of that method "does clearly reflect the income" of the accused taxpayer; that the Commissioner did determine defendant's income for the indictment years by adjustments to the income reported, and that therefore,...

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31 practice notes
  • Austin v. United States, No. 8317.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • November 21, 1961
    ...F.2d 745 (3rd Cir., 1958). Cf., Smith v. United States, 348 U.S. 147, 151, 75 S.Ct. 194, 99 L.Ed. 192 (1954); United States v. Achilli, 234 F.2d 797, 806 (7th Cir., 1956); United States v. Martin, 176 F.Supp. 409 (D.C.S.D.N.Y., The Government, however, argues that even if Mrs. Austin has al......
  • Hutcherson v. United States, No. 18375.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 18, 1965
    ...can be no doubt that the vehement dissent of Justice Black called the question to the Court's attention. Accord, United States v. Achilli, 234 F.2d 797, 809 (7th Cir. 4 D.C.CODE ANN. § 33-402 (1961) punishes possession of narcotics; 21 U.S.C. § 174 and 26 U.S.C. § 4704(a), on the other hand......
  • United States v. Clancy, No. 12815.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • April 14, 1960
    ..."resting upon mere speculative assertions manufactured wholly from thin air." United States v. Achilli, 7 Cir., 1956, 234 F.2d 797, 808, certiorari denied, 352 U.S. 916, 77 S.Ct. 214, 1 L.Ed.2d 122, vacated 352 U.S. 1023, 77 S.Ct. 588, 1 L.Ed.2d 595, affirmed 353 U.S. 373, 77 S.Ct......
  • Stewart v. United States, No. 12944.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 18, 1957
    ...v. United States, 16 App.D.C. 478, certiorari denied, 1900, 179 U.S. 683, 21 S.Ct. 916, 45 L.Ed. 385; United States v. Achilli, 7 Cir., 234 F.2d 797, certiorari denied, 1956, 352 U.S. 916, 77 S.Ct. 214, 1 L.Ed.2d 122, upon reconsideration, certiorari granted on question not pertinent here, ......
  • Request a trial to view additional results
31 cases
  • United States v. Clancy, No. 12815.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • April 14, 1960
    ...to instructions "resting upon mere speculative assertions manufactured wholly from thin air." United States v. Achilli, 7 Cir., 1956, 234 F.2d 797, 808, certiorari denied, 352 U.S. 916, 77 S.Ct. 214, 1 L.Ed.2d 122, vacated 352 U.S. 1023, 77 S.Ct. 588, 1 L.Ed.2d 595, affirmed 353 U.S. 373, 7......
  • Hutcherson v. United States, No. 18375.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 18, 1965
    ...can be no doubt that the vehement dissent of Justice Black called the question to the Court's attention. Accord, United States v. Achilli, 234 F.2d 797, 809 (7th Cir. 4 D.C.CODE ANN. § 33-402 (1961) punishes possession of narcotics; 21 U.S.C. § 174 and 26 U.S.C. § 4704(a), on the other hand......
  • Austin v. United States, No. 8317.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • November 21, 1961
    ...F.2d 745 (3rd Cir., 1958). Cf., Smith v. United States, 348 U.S. 147, 151, 75 S.Ct. 194, 99 L.Ed. 192 (1954); United States v. Achilli, 234 F.2d 797, 806 (7th Cir., 1956); United States v. Martin, 176 F.Supp. 409 (D.C.S.D.N.Y., The Government, however, argues that even if Mrs. Austin has al......
  • United States v. Pipefitters Local Union No. 562, No. 19466.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • December 17, 1970
    ...appellate review is contrary to the view taken not only by this circuit, but by all other courts of appeals. In United States v. Achilli, 234 F.2d 797, 809 (7 Cir. 1956), aff'd 353 U.S. 373, 77 S.Ct. 995, 1 L.Ed.2d 918 (1957), the court said: "Rule 52(b) was designed to reach errors of such......
  • Request a trial to view additional results

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