United States v. Bland

• Decision Date: 05 April 1972
• Docket Number: No. 71-1407.,71-1407.
• Citation: 458 F.2d 1
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Marvin D. BLAND, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

458 F.2d 1 (1972)

UNITED STATES of America, Plaintiff-Appellee, v. Marvin D. BLAND, Defendant-Appellant.

No. 71-1407.

United States Court of Appeals, Fifth Circuit.

April 5, 1972.

Morris Harrell, Stan McMurry, Rain, Harrell, Emery, Young & Doke, Dallas, Tex., for defendant-appellant.

Eldon B. Mahon, U. S. Atty., Kenneth J. Mighell, Asst. U. S. Atty., Dallas, Tex., John P. Burke, Joseph H. Reiter, Attys., Dept. of Justice, Tax Div., Washington, D. C., Johnnie M. Walters, Asst. Atty. Gen., Crombie J. D. Garrett, Atty., Tax Div., Dept. of Justice, Washington, D. C., for plaintiff-appellee; Eldon B. Mahon, U. S. Atty., Kenneth J. Mighell, Asst. U. S. Atty., of counsel.

Before TUTTLE, INGRAHAM and RONEY, Circuit Judges.

INGRAHAM, Circuit Judge.

This is an appeal from a conviction of tax evasion in violation of 26 U.S.C. § 7201. Appellant Bland was a manufacturer's representative for World Carpet Mills of Dalton, Georgia. Appellant was charged with the substantive offense of tax evasion for the years 1962 through 1964, inclusive. While appellant does not seriously dispute that over $58,000 in taxes are due and owing to the United States, he volubly disputes the presence of any intent to evade taxes.

On appeal appellant's case rises or falls on two issues raised by preliminary motions and preserved for appeal.

I. A TIME-BARRED PROSECUTION

A complaint concerning calendar years 1962 through 1964 was filed on April 10, 1969, only five days before the six year statute of limitations in fraud cases, 26 U.S.C. § 6531, expired on his 1962 tax return.¹ The filing of the complaint triggered the proviso of § 6531 and permitted the Government to bring its case before a grand jury after April 15, 1969.²

The appellant's case was taken before a grand jury on June 2, 1969. The grand jury, however, declined to indict Bland and returned a "no-bill." Subsequently, after the initial grand jury was discharged in due course, the Government brought appellant's case before the succeeding grand jury. This grand jury returned a three count indictment on September 18, 1969.

As the indictment was returned more than six years after April 15, 1963, the date on which appellant filed his 1962 tax return, it is barred by the statute of limitations, 26 U.S.C. § 6531, unless saved by the proviso:

"* * * * Where a complaint is instituted before a commissioner of the United States within the period above limited, the time shall be extended until the date which is 9 months after the date of the making of the complaint before the commissioner of the United States. For the purpose of determining the periods of limitation on criminal prosecutions, the rules of section 6513 shall be applicable."

Appellant, unlike others who have previously asserted limitations against their prosecutions under § 6531, see, e. g., Jaben v. United States, 381 U.S. 214, 85 S.Ct. 1365, 14 L.Ed.2d 345 (1965); United States v. Meriwether, 440 F.2d 753 (5th Cir., 1971), does not contest the sufficiency of the complaint and accompanying procedures which triggered the nine-month proviso. Rather appellant asserts that the extension granted by the proviso expired when the first grand jury presented with the complaint elected not to indict. He argues that the grand jury's "no-bill" was the equivalent of a dismissal of the complaint and vitiated the time extension. The Government, however, contends that the extension is absolute upon the filing of a valid complaint. In its view the succeeding grand jury was not bound by its predecessor's decision not to indict. See United States v. Thompson, 251 U.S. 407, 40 S.Ct. 289, 64 L.Ed. 333 (1920).

A consideration of these arguments requires our examination of the proviso and its place in the statutory scheme. § 6531 is a general three year statute of limitations. An exception to the three year period is made in certain classes of cases, including fraud and willful tax evasion. The period of limitations for such cases is six years. The proviso we speak of is that in the event the Government has filed a complaint within the applicable period of limitations, the period of limitations is extended until a date which is nine months after the date the complaint was made.

A literal reading of the statute and proviso as the Government urges would make the applicable period of limitations in this case six years and nine months less five days. See United States v. Grayson, 416 F.2d 1073 (5th Cir., 1969).

We are, however, unconcerned with the terminal date of the proviso extension. We are concerned with whether the refusal to indict by the grand jury in session at the time the complaint was filed cuts off further extension of the applicable period of limitations. In Jaben v. United States, supra, the Supreme Court articulated the purpose of the § 6531 proviso. The Court there stated:

"More basically, the evident statutory purpose of the nine-month extension provision is to afford the Government an opportunity to indict criminal tax offenders in the event that a grand jury is not in session at the end of the normal limitation period. This is confirmed by the immediate precursor of the present section which provided for an extension `until the discharge of the grand jury at its next session within the district.\' I.R.C. 1939, § 3748(a). Clearly the statute was not meant to grant the Government greater time in which to make its case (a result which could have been accomplished simply by making the normal period of limitations six years and nine months), but rather was intended to deal with the situation in which the Government has its case made within the normal limitations period but cannot obtain an indictment because of the grand jury schedule. The Government\'s interpretation does not reflect this statutory intention, for it provides no safeguard whatever to prevent the Government from filing a complaint at a time when it does not have its case made, and then using the nine-month period to make it.

"The better view of § 6531 is that the complaint, to initiate the time extension, must be adequate to begin effectively the criminal process prescribed by the Federal Criminal Rules. It must be sufficient to justify the next steps in the process—those of notifying the defendant and bringing him before the Commissioner for a preliminary hearing. To do so the complaint must satisfy the probable cause requirement of Rule 4. Furthermore, we think that the Government must proceed through the further steps of the complaint procedure by affording the defendant a preliminary hearing as required by Rule 5, unless before the preliminary hearing is held, the grand jury supersedes the complaint procedure by returning an indictment. This interpretation of the statute reflects its purpose by insuring that within a reasonable time following the filing of the complaint, either the Commissioner will decide whether there is sufficient cause to bind the defendant over for grand jury action, or the grand jury itself will have decided whether or not to indict. A dismissal of the complaint before the indictment is returned would vitiate the time extension."

In addition to the Supreme Court's formulation of the purpose and effect of the § 6531 proviso, two other considerations are urged which it is asserted compel a decision in favor of appellant. First, this is not a case in which the Government needed the entire six years from the filing of appellant's return to build its case against him. The prosecution in argument before the district court conceded that its case was completed by the end of February of 1966. The election to defer filing of a complaint or obtaining an indictment until five days before the period of limitations expired on the 1962 count was and remains unexplained.

The delay incident in this case leads to the second consideration; that is, whether the appellant's right to a fair and speedy trial has been violated. Recently the Supreme Court in United States v. Marion, 404 U.S. 307, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971), adopted the view of this and several other circuits and held in the usual case³ that the protection of the Sixth Amendment was inapplicable to the period prior to arrest.⁴

The delay which most often occurs, as in the case at bar, is from the commission of the alleged offense (here on April 15, 1963, when the return was filed) until the indictment is returned. The Supreme Court noted, however, that the individual is not left remediless for excessive pre-arrest delay.

"The law has provided other mechanisms to guard against possible as distinguished from actual prejudice resulting from the passage of time between crime and arrest or charge. As we said in United States v. Ewell supra, 386 U.S. 116, at 122, 86 S.Ct. 773, at 777, 15 L.Ed.2d 627 `the applicable statute of limitations . . . is . . . the primary guarantee against bringing overly stale criminal charges.\' Such statutes represent legislative assessments of relative interests of the State and the defendant in administering and receiving justice; they `are made for the respose (sic) of society and the protection of those who may during the limitation . . . have lost their means of defense.\' Public Schools v. Walker, 76 U.S. (9 Wall.) 282, 288, 19 L.Ed. 576 (1869). These statutes provide predictability by specifying a limit beyond which there is an irrebutable assumption that a defendant\'s right to a fair trial would be prejudiced."

But, as the Supreme Court in its Marion opinion also points out, it is Congress which, in the first instance, must establish what is a facially reasonable time for the bringing of prosecutions. Even the liberal policy in favor of repose, United States v. Marion, supra; United States v. Habig, 390 U.S. 222, 227, 88 S.Ct. 926, 19 L.Ed.2d 1055 (1967), can not overcome the plain meaning of an unambiguous statute. The extension provided by the Congress in the proviso to § 6531 is by its terms absolute. A sufficient complaint having been filed...