United States v. Campbell

• Citation: 426 F.2d 547
• Decision Date: 29 April 1970
• Docket Number: Dockets 34173,513,34174.,No. 512,512
• Parties: UNITED STATES of America, Appellee, v. Bernard J. CAMPBELL, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

426 F.2d 547 (1970)

UNITED STATES of America, Appellee, v. Bernard J. CAMPBELL, Appellant.

Nos. 512, 513, Dockets 34173, 34174.

United States Court of Appeals, Second Circuit.

Argued January 22, 1970.

Decided April 29, 1970.

William Quinlan, New York City, for appellant.

Thomas J. Fitzpatrick, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty. for Southern District of New York, William J. Gilbreth and Gary P. Naftalis, Asst. U. S. Attys., of counsel), for appellee.

Before MOORE, FRIENDLY and HAYS, Circuit Judges.

HAYS, Circuit Judge:

This is an appeal from judgments of conviction entered against appellant in the United States District Court for the Southern District of New York upon a jury verdict finding appellant guilty of conspiring with others to bribe an officer of the Internal Revenue Service and to defraud the United States of delinquent taxes owed by Peter R. Matthews, in violation of 18 U.S.C. § 371 (1964)¹ and of aiding and abetting a revenue officer in the receipt of an unlawful fee for the performance of his official duty, in violation of 26 U.S.C. § 7214 (1964) and 18 U.S.C. § 2 (1964).²

The convictions were based upon appellant's participation in an unsuccessful scheme to defraud the government of approximately $500,000 in delinquent taxes owed by Peter R. Matthews on behalf of himself, his wife, and The Matthews Industrial Piping Corporation. The plan was to "fix" the collection of the delinquent taxes by bribing the revenue officers charged with their collection.

Matthews, a co-conspirator, testified at appellant's trial as a government witness. On appeal, appellant contends that the trial court erred in excluding 68 pages of Internal Revenue Service records relating to Matthews' tax delinquency offered as relevant to Matthews' motives and bias as a witness, that the charge of aiding and abetting was barred by the applicable statute of limitations and that a recording of a conversation between appellant and Matthews, made with Matthews' consent, was improperly admitted into evidence. We find no merit in appellant's contentions and accordingly affirm the judgments of conviction.

I.

The testimony given by Matthews was an important part of the government's case against appellant, particularly with respect to appellant's participation in the conspiracy.³ On cross-examination, Matthews admitted that the Internal Revenue Service was pressing for the collection of his delinquent taxes at the time he went to them with the story of the scheme to fix their collection and that he still owed a substantial amount. He also stated that he had not yet been indicted for his part in the scheme. He denied, however, that he had ever discussed with Internal Revenue Service officials the possibility that in return for his cooperation they would not prosecute him or attempt to collect his delinquent taxes.

After Matthews had been cross-examined, appellant's counsel sought to introduce into evidence 68 pages of Internal Revenue Service files relating to the history of Matthews' tax delinquency account.⁴ These documents were offered as relevant to the motives and bias of Matthews as a government witness. Defense counsel represented that the documents would show that Matthews had been accorded lenient treatment by the Internal Revenue Service after going to them with the story of the bribery scheme. The trial judge, after ascertaining from defense counsel that the proffered documents did not reflect any agreement with Matthews or conferences with Matthews concerning lenient treatment in connection with his cooperation and testimony, refused either to read the documents or to allow them to be admitted into evidence on the grounds that evidence of unilateral action taken by the Internal Revenue Service without Matthews' knowledge was not only irrelevant but also involved an impermissible exploration into the motives behind an executive decision.

In attempting to establish the motives or bias of a witness against him, a defendant may not only elicit evidence showing that the government made explicit promises of leniency in return for cooperation, but may also show conduct which might have led a witness to believe that his prospects for lenient treatment by the government depended on the degree of his cooperation. Actions evidencing the intention of the government to trade leniency for cooperation are, however, irrelevant unless it can be established that the witness knew of these actions. See Gordon v. United States, 344 U.S. 414, 422, 73 S.Ct. 369, 97 L.Ed. 447 (1953), 3 Wigmore on Evidence §§ 948-49 (3d ed. 1940).

In determining whether the trial judge has abused his discretion in limiting the introduction of such evidence, the issue is whether the jury was otherwise in possession of sufficient information concerning formative events to make a "discriminating appraisal" of a witness' motives and bias. See Gordon v. United States, supra at 417, 73 S.Ct. 369. We have read the excluded 68 pages and find that they do not contain sufficient evidence in addition to that already before the jury relevant to Matthews' motives and bias as a witness to justify a finding that the trial judge erred in refusing to admit any or all of the documents into evidence.

The 68 pages refer only to the history of collection attempts with regard to a penalty assessment made against Matthews and his wife on account of delinquent taxes owed by The Matthews Industrial Piping Corporation which was wholly owned by them.⁵ The amount of the penalty assessment was $34,197.06.

The assessment was made on March 4, 1966 and collection attempts began on March 8, 1966 when the account was received by the Manhattan district office of the Internal Revenue Service. The revenue officer to whom the account was initially assigned, recommended that since past experience with the taxpayers indicated that the assessment was uncollectible, it should be "53'd," that is, taken out of the collection process. This proposal was disapproved by the Collection Manager, who stated that the case required "extensive and qualitative investigation for location of income and/or assets. Supervisor is instructed to review and follow up closely on this case." The account was subsequently assigned to Revenue Officer Lawrence Batt.

Three series of events are revealed in the subsequent pages of the file which merit discussion as to their possible bearing on Matthews' motives and bias as a witness.

The first of the series occurred before Matthews went to the Internal Revenue Service with the story of the attempt to fix the collection of his delinquent taxes. Matthews revealed the scheme to Revenue Officer Batt on July 25, 1966 and discussed it with the Inspection Division sometime in September, 1966. On June 22, 1966, upon discovering that Matthews had borrowed some $99,000 from Industrial Piping between 1959 and 1965 without either repaying it or reporting it as income, Batt had prepared a "Referral Report of Potential Fraud Case," setting forth these facts and stating "Taxpayer has extensive history of not paying tax. It is believed taxpayer was previously convicted of Income Tax Evasion."⁶ The fraud referral had been rejected on June 23, 1966 by the Intelligence Division before preliminary investigation on the ground that, for various technical reasons,⁷ it had no criminal potential.

Cross-examination of Matthews at the trial of the present case elicited the information that Matthews had had some discussions with Internal Revenue Service officials concerning these loans prior to the time he reported the bribery scheme to them. From this the jury might have inferred that he was in some difficulty with the Service in regard to the tax implications of the loans. However, even assuming that Matthews had some knowledge of the fraud referral and its rejection, of which the jury should have been apprised, the incident could show only that Matthews' position with regard to potential criminal liability was, at the time he came forward with the story of the bribery scheme, not so bad as the evidence already before the jury would indicate. The situation is thus quite different from that presented in United States v. Persico, 305 F.2d 534, 537-540 (2d Cir. 1962, where this court held that the trial court erred in excluding cumulative evidence of a witness' criminal history, on the ground that the worse the witness' history, the more likely it was that he faced heavy sentences and thus the greater his motive to aid the government in return for leniency. Since here the evidence of the fraud referral and its rejection would have shown only that Matthews' potential liabilities were not quite so serious as might otherwise have been inferred from the evidence already before the jury, we do not believe appellant was substantially prejudiced by the exclusion of the documents relating to the incident.

The second series of events relates to fraudulent financial statements prepared by Matthews. Between June 28, 1966 and February 27, 1967, Matthews appeared before Revenue Officer Batt and prepared under oath four financial statements. These statements reported total assets ranging from $400 to $1100, but omitted reference to a house in Pelham Manor which Matthews had bought in 1964 and in which he had a $12,000 equity and to a $19,000 life insurance policy with a cash surrender value of $1764.19. On March 3, 1967, Batt, having discovered Matthews' ownership of the house, the insurance policy and another matter not specified, prepared another "Referral Report of Potential Fraud Case," based on the omissions from the four financial statements. This referral was rejected on March 16, 1967 by the Intelligence Division which ruled that there was no criminal potential because there was no indication that the omission of the real estate was intentional, the insurance policy did not appear to be owned by Matthews according to insurance company records and the referring officer had...