United States v. DeNiro

• Decision Date: 15 April 1968
• Docket Number: No. 17053-17055.,17053-17055.
• Citation: 392 F.2d 753
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Frank DeNIRO, Jr., Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Michael DeNIRO, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Louis DeNIRO, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

392 F.2d 753 (1968)

UNITED STATES of America, Plaintiff-Appellee, v. Frank DeNIRO, Jr., Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Michael DeNIRO, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Louis DeNIRO, Defendant-Appellant.

Nos. 17053-17055.

United States Court of Appeals Sixth Circuit.

April 15, 1968.

James J. Carroll, Cleveland, Ohio, for appellants; Samuel E. Karam, Youngstown, Ohio, on brief.

John P. Burke, Atty., Dept. of Justice, Washington, D. C., for appellee; Mitchell Rogovin, Asst. Atty. Gen., Lee A. Jackson, Atty., Dept. of Justice, Washington, D. C., on brief; Merle M. McCurdy, U. S. Atty., Cleveland, Ohio, of counsel.

Before WEICK, Chief Judge, and PECK and COMBS, Circuit Judges.

WEICK, Chief Judge.

The three DeNiro brothers, appellants here, waived a jury and were tried in the District Court on a five-count indictment charging them with (1) conspiracy; (2) attempted evasion of federal estate taxes; and (3), (4) and (5) making false statements to Internal Revenue Agents, in violation of 18 U.S.C. § 371, 26 U.S.C. (1964 ed.) § 7201, and 18 U.S.C. § 1001. At the close of the Government's case the DeNiros moved for judgments of acquittal. The court reserved ruling thereon, and they elected not to proceed further, and rested. They renewed their motion for judgment of acquittal. The court adopted findings of fact and conclusions of law, and found them guilty on counts 1 and 2, which charged conspiracy and the substantive offense of attempted evasion of federal estate taxes. The court dismissed counts 3, 4 and 5 of the indictment, which charged them with the substantive offenses of making false statements.

Frank and Michael were each fined one thousand dollars on count 1, and were placed on two years' probation on count 2. Louis was fined three thousand dollars on count 2 and sentenced to three years' imprisonment on count 1, the first ninety days of which sentence were to be spent in a jail type institution, and the remainder of the sentence was to be served on probation.

The charges arose out of the death of appellants' older brother, James Vincent DeNiro, known as Vince DeNiro, who had accumulated wealth in the numbers business in Youngstown, Ohio. Vince met his death when he endeavored to start his automobile, thereby detonating a bomb which someone had attached to the ignition switch. The court found that Vince died intestate, leaving a gross estate of $311,047.08 and a net taxable estate of $215,816.43, upon which the federal estate tax liability amounted to $55,444.93. Vince's estate was never probated.¹ His lawful heirs were his two children by his former wife, Mary DeNiro.

The Government's theory was that after Vince's death the three brothers, acting in concert, took possession of and appropriated all of the assets of Vince's estate, to the exclusion of his children who were his lawful heirs; that they concealed the assets and obstructed an investigation of Internal Revenue Agents by giving to them false statements to the effect that Vince left no estate and that they had none of his assets; and that one of their purposes was to evade payment of the federal estate tax.²

Although Vince had been quite successful in amassing wealth during his lifetime, he had always been careful to keep record title of his property in the names of others. This practice was graphically illustrated by the fact that not one of the assets of his substantial estate was actually recorded in his name. At least three persons, other than the brothers, discovered after Vince's death that they held title of record to property belonging to Vince.

The investigation by the Internal Revenue Agents originated as an inquiry into the failure of Louis DeNiro to file federal income tax returns for the years 1957, 1958 and 1959. It commenced on April 19, 1962, when Louis was interviewed by Special Agent John B. Relic. During the interview Louis denied that he received anything from Vince's estate, denied that Vince left an estate, and denied that he had received any substantial gifts from Vince during the latter's lifetime. Louis asserted that he was the owner of Cicero's; that he borrowed all of the money with which to purchase it; and that Vince had never owned any part of Cicero's. Subsequent interviews with Frank and Michael produced equally emphatic denials that Vince had left an estate. In a meeting on November 20, 1962, Louis told Relic that Vince had no interest in Cicero's or National Cigarette Service, and that he doubted whether Vince had any interest in Valley Land at the time of his death. He said that his brothers bought their interest in National Cigarette from Vince. Relic told Louis that the Government was interested in collecting taxes if there was any tax liability due.³ Louis was also informed by Relic that there were criminal penalties for conspiring to evade estate tax liability, but Louis maintained that Vince had no interest in these companies.

In an interview on March 11, 1963, Special Agent Relic first told Frank, and then both Frank and Michael, that the Government was going to prosecute the brothers for attempted evasion of the estate tax liability of Vince, and might even charge them with conspiracy; that it was the position of the Government that Vince had an estate and that the brothers knew it and took over all the assets and divided the assets among themselves and wilfully tried to evade the estate tax. Special Agent Relic went over with them each of the items of the estate, but they persisted in their denials that Vince left any estate.

The District Judge found that the brothers were aware of Vince's practice of utilizing nominees and straws to conceal his ownership of property; that they were aware that Frank and Michael were serving as mere nominees in their ownership of National Cigarette stock, with beneficial ownership residing in Vince; and that they knew that at the time of his death Vince owned Cicero's (subject to a further payment of $32,000 to a former stockholder). The trial judge also found:

"On the date of Vince\'s death, the defendants * * * summoned Edward Cochran to Cicero\'s * * * and there they agree to gather together and secure permanent possession of these and all other properties which had belonged to their deceased brother to the exclusion of his rightful heirs."

The trial judge further found that the defendants knew that the investigation being conducted by Special Agent Relic could jeopardize the scheme to convert Vince's assets to their own use, and that, realizing this, the defendants —

"* * * agreed among themselves to lie to and mislead Agent Relic and the Internal Revenue Service about the true facts concerning the properties owned by their deceased brother. This they did well knowing that such a course of conduct would necessarily impede, impair, obstruct and defeat the lawful governmental function of the Revenue Service in the ascertainment, computation, assessment and collection of the revenue."

In the appeal appellants have urged three grounds for reversal. They are: First, that the District Judge erred in overruling the defendants' motions for judgments of acquittal; Second, that the evidence was insufficient to sustain the verdict; and Third, that there was insufficient evidence of willfulness.

In United States v. Carter, 311 F.2d 934, 940 (6th Cir.) cert. denied, Felice v. United States, 373 U.S. 915, 83 S.Ct. 1301, 10 L.Ed.2d 415 (1963), this court said:

"In determining whether the evidence was sufficient to withstand a motion for acquittal, the evidence must be viewed in the light most favorable to the prosecution. This rule applies to a case tried to a District Judge as well as to a case tried to a jury."

Even under a standard less stringent than that enunciated above, the defendants on the record here would not have been entitled to the relief which they sought. The trial judge properly overruled the motions for judgments of acquittal.

Going one step further, the appellants' contention that there is insufficient evidence to sustain the convictions, is likewise without merit. In our opinion, there was abundant evidence from which the trial judge could have found the defendants guilty of the crimes with which they were charged in counts 1 and 2 of the indictment. We will point out only the most damaging of this evidence.

Prior to its incorporation in 1955, National Cigarette was a partnership, in which Vince held a 51% interest. Following incorporation, Vince was not listed as a stockholder, but instead Frank was shown as owner of 38% and Louis the owner of 17% of the total authorized shares.⁴ Although Frank was the president of National Cigarette, he did not actually start to work for the company until early 1961, when business became "bad" in his used car lot. Michael began working for the company subsequent to Vince's death.

In August, 1961, Louis collected a $25,000-loan which had been made by Vince to Jules Aron, and which was evidenced by Aron's personal check, with Vince shown as payee. In October, 1961, the appellants collected the $25,000 which Vince had left with a bank official for safekeeping, by giving to the bank a surety bond to indemnify it against liability. After appellants gave the bond to the bank, the money was turned over to Frank.

The testimony of Edward Cochran shed considerable light on Vince's affairs. Mr. Cochran had been a business associate of Vince in both Valley Land and Cicero's. At one time Cochran had been the sole stockholder in Valley Land, but prior to his death Vince acquired complete ownership of that corporation. Shortly after its incorporation, Cochran and Vince each held a one-half interest in Cicero's, but in April or May of 1961 Vince agreed to and did purchase Cochran's share for $42,000, $10,000 of which had been paid at the time of Vince's death.

On the date of Vince's death, the brothers procured the services of an attorney to...