United States v. Bartone

• Decision Date: 13 January 1969
• Docket Number: No. 18132.,18132.
• Citation: 400 F.2d 459
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Dominick E. BARTONE, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

400 F.2d 459 (1968)

UNITED STATES of America, Plaintiff-Appellee, v. Dominick E. BARTONE, Defendant-Appellant.

No. 18132.

United States Court of Appeals Sixth Circuit.

September 6, 1968.

Certiorari Denied January 13, 1969.

Arlene B. Steuer, Cleveland, Ohio, for appellant; Cozza & Steuer, Cleveland, Ohio, on brief.

Philip R. Michael, Atty., Dept. of Justice, Washington, D. C., for appellee; Fred M. Vinson, Jr., Asst. Atty. Gen., William Lynch, Robert D. Gary, Attys., Dept. of Justice, Washington, D. C., on brief.

Before PHILLIPS, CELEBREZZE, and COMBS, Circuit Judges.

Certiorari Denied January 13, 1969. See 89 S.Ct. 631.

COMBS, Circuit Judge.

Appellant, Dominick E. Bartone, was found guilty by a jury on two counts of willful evasion of federal income taxes in violation of 26 U.S.C. § 7201. It was charged in Count I that he should have reported $202,693.25 taxable income in 1959, but reported only $7,167. It was charged in Count II that he should have reported $19,190.63 in 1961, but reported $10,400. He was sentenced to three years on Count I and to eighteen months on Count II, the sentences to run concurrently. Several grounds of error are assigned.

The facts relating to Bartone's 1959 income are not susceptible to easy summarization. The evidence reveals a complicated web of financial dealings between Bartone, representatives of the Dominican Republic, and other individuals who were partners with or agents of Bartone in various enterprises. The general pattern of the evidence reveals that Bartone was engaged in selling munitions and airplane parts to the Dominican Republic. Involved in these transactions was a Panamanian corporation, Servicios Internacionales, S. A. There is considerable evidence that Servicios was a corporate shell, engaged in no business and wholly owned by Bartone. Much of the money Bartone received and expended in 1959 went into or came out of bank accounts in the name of Servicios.

We will not attempt a chronological recital of receipts and disbursements. Two specific instances will serve as examples. On July 23, 1959, Bartone purchased, with cash, a $150,000 cashier's check in Miami. In late August, this check was used to open a checking account in Servicios' name in the Royal Bank of Canada. In July, 1959, Bartone, through agents, purchased arms in North Carolina for $12,000. The individual who obtained these arms for him testified that Bartone said they were worth $307,000. On July 24, 1959, Bartone accompanied a member of the Dominican consulate in Miami, Emanuel Perez Sosa, to a Miami bank. There, $300,000 was obtained on a check to Sosa from the Dominican Consul in Miami. The money was counted and apparently turned over to Bartone. The evidence supports the conclusion that Bartone received from these and other transactions in 1959 income in at least the amount charged in Count I of the indictment.

The principal item of 1961 income was $25,000 Bartone borrowed from Robert Meissner. The money was loaned to him for use as a deposit on a bid for the purchase of a bankrupt Canadian corporation, Niagara Crushed Stone. Meissner was told that the money was to be used only in making the bid and that it would be returned to him after it had served that purpose. However, after the bid was unsuccessful and the money returned to Bartone, he used it for his own purposes without Meissner's knowledge. There was evidence of other financial deals in 1961 from which Bartone received income in the amount claimed by the Government. No evidence was offered by appellant.

Much of the Government's evidence as to Bartone's financial deals and his connection with Internacionales Servicios is based on the testimony of three attorneys. This testimony was admitted over the strenuous objections of appellant who contends it falls within the attorney-client privilege since the attorneys represented him and the corporations involved.

It is true, as appellant contends, that the attorney-client privilege extends to corporations. Radiant Burners, Inc. v. American Gas Association, 320 F.2d 314 (7th Cir. 1963). But, the privilege is not all inclusive. Here, the...