United States v. Blumberg, Crim. No. 1763.

• Decision Date: 20 September 1966
• Docket Number: Crim. No. 1763.
• Citation: 258 F. Supp. 885
• Parties: UNITED STATES of America, Plaintiff, v. Joel A. BLUMBERG, Defendant.
• Court: U.S. District Court — District of Delaware

258 F. Supp. 885

UNITED STATES of America, Plaintiff, v. Joel A. BLUMBERG, Defendant.

Crim. No. 1763.

United States District Court D. Delaware.

September 20, 1966.

Alfred J. Lindh, First Asst. U. S. Atty., Wilmington, Del., for plaintiff.

Dennis A. Reardon of Becker & Kipp, Wilmington, Del., for defendant.

OPINION

LAYTON, District Judge.

Defendant Joel A. Blumberg was tried and convicted on June 14, 1966, in a trial by jury, under an indictment charging him with knowingly and wilfully falsifying, concealing, and covering up material facts by encashing for an unknown person a $2,891.00 "twin double" pari-mutuel ticket, with the intention of enabling the unknown person to avoid the necessity of disclosing his identity as recipient of the income of the ticket to the Brandywine Raceway, thereby preventing the Brandywine Raceway from reporting the identity of the unknown person to the Internal Revenue Service as required in 26 U.S.C. § 6041, in violation of 18 U.S.C. § 1001.

Defendant has moved for a verdict of acquittal or in the alternative for new trial. Defendant's principal grounds involve the theory that 26 U.S.C. § 6041 in connection with other circumstances is so vaguely worded that a criminal prosecution under that statute is offensive to defendant's right to due process of law. M. Kraus Bros., Inc. v. United States, 327 U.S. 614, 66 S.Ct. 705, 90 L.Ed. 894 (1946).

The facts of the case are as follows:

On August 16, 1965, at Brandywine Raceway, Wilmington, Delaware, the defendant was under the observation of two special agents of the Internal Revenue Service. An unknown man had attempted to cash a pari-mutuel ticket, but did not produce proper identification, and was unsuccessful. Defendant was observed to hold a short conversation with the unknown person, and the unknown person passed something to defendant. Defendant then proceeded to the cashier's window, produced proper identification (his own), and cashed a pari-mutuel ticket for $2,891.00. Defendant and the unknown man then walked away together, and as they walked away, they exchanged what appeared to be a $100.00 bill. Defendant was arrested at his home in Camden, New Jersey, on September 9, 1965.

At the close of the Government's case, defendant moved for a verdict of acquittal, on the ground that the Government had not established a prima facie case under the indictment. That motion was taken under advisement, and was renewed after the jury returned a guilty verdict, except that the post-trial motion also covered a number of other grounds, including the Court's instructions to the jury, and the admission of certain documents into evidence.

Title 18 U.S.C. § 1001, under which defendant was tried, provides as follows:

"Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme or device a material fact * * * shall be guilty of an offense against the laws of the United States."

The contention of the Government is that defendant Blumberg wilfully concealed the name of the actual recipient of of the income from the twin-double ticket through the trick or scheme of placing his own name on the identification form provided by the Brandywine Raceway pursuant to the requirements of 26 U.S.C. § 6041.

The identification form used by Brandywine Raceway and approved by the Internal Revenue Service is entitled "INTERNAL REVENUE D.D. IDENTIFICATION", and provides spaces for identification information, including name, address, Social Security Number, driver's license number, etc. Across the bottom of the form, the following legend appears, in small black type:

"The U. S. Government now requires that we report the name and address of all winners of $600. or more on a $2.00 Daily Double and all winners of $3000. or more on a $10.00 Daily Double ticket.

"Payment cannot be made on a winning double ticket without proper identification, Social Security, License, etc." (Emphasis supplied.)

In the regular course of business, Brandywine Raceway transfers the information given on the identification form to a 1099 form, and forwards copies to the taxpayer and to the Internal Revenue Service.

Evidence that the defendant had cashed nearly a quarter of a million dollars in twin and daily double tickets at a number of racetracks was introduced for the purpose of demonstrating defendant's familiarity with the identification form itself, and with the ensuing procedures.¹

The I.R.S.D.D. Identification forms, together with the procedures followed by the racetracks, were the result of agreements between the racetracks and the Internal Revenue Service, pursuant to 26 U.S.C. § 6041, the pertinent sections of which are as follows:

"Subsection (a). All persons engaged in * * * business and making payment in the course of such * * * business to another person of * * * fixed * * * gains, profits, or income * * *, of $600. or more in any taxable year, shall render a true and accurate return to the Secretary or his delegate * * * setting forth the amount of such gains, profits, and income, and the name and address of the recipient of such payment." (Emphasis supplied.)

"Subsection (d). * * *. when necessary to make effective the provisions of this section, the name and address of the recipient of income shall be furnished on demand of the person paying the income." (Emphasis supplied.)

A close reading of the two subsections discloses that...