United States v. Dolleris

• Decision Date: 09 June 1969
• Docket Number: No. 18431.,18431.
• Citation: 408 F.2d 918
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Kenneth H. DOLLERIS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

408 F.2d 918 (1969)

UNITED STATES of America, Plaintiff-Appellee, v. Kenneth H. DOLLERIS, Defendant-Appellant.

No. 18431.

United States Court of Appeals Sixth Circuit.

March 20, 1969.

Certiorari Denied June 9, 1969.

Lee S. Jones, Louisville, Ky., for appellant.

John P. Burke, Atty., Dept. of Justice, Washington, D. C., for appellee; Mitchell Rogovin, Asst. Atty. Gen., Joseph M. Howard, Atty., Dept. of Justice, Washington, D. C., on brief; Ernest W. Rivers, U. S. Atty., John L. Smith, Asst. U. S. Atty., Louisville, Ky., of counsel.

Before O'SULLIVAN, EDWARDS, and McCREE, Circuit Judges.

Certiorari Denied June 9, 1969. See 89 S.Ct. 2014.

McCREE, Circuit Judge.

Appellant was convicted by a jury on all counts of a nineteen count indictment charging wilful evasion of income taxes by the filing of false tax returns and wilful signing of false returns, in violation of Sections 7201 and 7206 of the Internal Revenue Code of 1954.

He is the principal officer and majority stockholder of D. & W. Sales and Service, Inc., hereinafter referred to as "D. & W.", a corporation located in Louisville, Kentucky and engaged in rebuilding and selling used automobile parts. The indictment charged him with making certain sales of scrap materials to Brodey & Brodey, Inc., hereinafter referred to as "Brodey", a corporation located in Indianapolis, Indiana, and to Louisville Scrap Material Co., Inc., hereinafter, "Louisville Scrap Co.", a corporation also located in Louisville, and with deliberately failing to report a part or all of the proceeds of these sales. The amounts alleged to have been unreported total approximately $43,000. Counts 1-5 and 11-14 of the indictment concern the tax returns of D. & W. for the fiscal years ending on January 31, from 1961 to 1965. Counts 6-10 and 15-19 concern taxpayer's personal returns for the same years.

The first question presented on appeal is whether the District Court erred in receiving certain testimony which appellant contends conveyed to the jury the fact that appellant had asserted his right to remain silent during the investigation of his alleged tax evasion.¹ Although appellant cites several portions of testimony in support of this contention, he relies primarily on that of Internal Revenue Agent Bernard Morgan concerning a meeting attended by agents of the Internal Revenue Service, taxpayer and his attorney.²

It is true that "the prosecution may not * * * use at trial the fact that * * * the defendant stood mute or claimed his privilege in the face of accusation." Miranda v. Arizona, 384 U.S. 436, 468, 86 S.Ct. 1602, 1625, 16 L.Ed.2d 694, 10 A.L.R.3d 974 (1966) (n. 37). Accord, United States v. McKinney, 379 F.2d 259 (6th Cir. 1967); United States v. Pearson, 344 F.2d 430 (6th Cir. 1965). It is also clear that testimony which is elicited to establish that a defendant claimed the privilege against self-incrimination before a grand jury or at a former trial is inadmissible. Grunewald v. United States, 353 U.S. 391, 77 S. Ct. 963, 1 L.Ed.2d 931, 62 A.L.R.2d 1344 (1957); Stewart v. United States, 366 U.S. 1, 81 S.Ct. 941, 6 L.Ed.2d 84 (1961). We do not think, however, that Morgan's testimony falls within the scope of these prohibitions. It was not deliberately elicited and conveyed only the fact that appellant's attorney had advised him of his constitutional right to remain silent. Moreover, other testimony which the jury heard, and which is discussed infra, reveals that appellant cooperated with the agents after he had received this advice, and that he authorized his attorney to participate in conferences with them in order to explain the apparent inaccuracy of his returns. The other testimony relied upon by taxpayer only remotely lends itself to the contention he advances and does not merit further discussion.

In any event, this issue is not properly before us on appeal. During his trial, appellant made specific objections to some of this testimony, but made no objection at any time based on the constitutional grounds he now asserts. As this court stated in United States v. Miller, 316 F.2d 81 (6th Cir. 1963), cert. denied, 375 U.S. 935, 84 S.Ct. 335, 11 L.Ed. 2d 267 (1963), reh. denied, 375 U.S. 989, 84 S.Ct. 520, 11 L.Ed.2d 476 (1964):

The Supreme Court has held that an objection to evidence predicated upon a specific constitutional claim is not properly presented for review if the only objection made in the trial court was based on other grounds. On Lee v. United States, 343 U.S. 747, 749-750, n. 3, 72 S.Ct. 967, 96 L.Ed. 1270. Under such circumstances, the Court of Appeals may decline to consider the constitutional claim in the exercise of its discretion under Rule 52(b), F.R. Cr.P. 316 F.2d at 84.

Furthermore, even if receipt of this testimony were constitutional error and if, despite appellant's failure to make an appropriate objection to its receipt, we were disposed to consider this issue on appeal, we would hold that the error was harmless beyond a reasonable doubt. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967), reh. denied, 386 U.S. 987, 87 S.Ct. 1283, 18 L. Ed.2d 241 (1967).

The next question presented is whether statements made by Dolleris' attorney, Mr. Jones, during conferences held for the purpose of investigating the accuracy of appellant's returns were properly received by the District Court as admissions, even though Dolleris was not present at the conferences. Whether such statements constituted admissions by Dolleris depends on the scope of Jones' authority at the time they were made. Laird v. Air Carrier Engine Service, Inc., 263 F.2d 948 (5th Cir. 1959). As appellant observes, an attorney, merely because of his employment in connection with litigation, does not have the authority to make out-of-court admissions for his client, except those which are directly related to the management of that litigation. 7 Am.Jur.2d, Attorneys at Law § 122 (1963). However, on October 25, 1965, Dolleris executed a power of attorney³ which provided in part:

KNOW ALL MEN BY THESE PRESENTS:

That I, Kenneth H. Dolleris, hereby make, constitute and appoint Lee S. Jones, my true and lawful attorney, hereby revoking any and all powers of attorney heretofore executed in the premises, for me and in my name, place and stead before the Internal Revenue Service, United States Treasury Department, to defend me against proposed income tax deficiency or income tax evasion or failure to file returns for all taxable years 1959, 1960, 1961, 1962, 1963, 1964, and 1965, to do and perform any and all other lawful acts as shall be deemed necessary or proper to protect my interest; to request of and receive from the Treasury Department such documents or copies thereof as I may be entitled under the law and the regulations; to demand and receive, giving and granting unto said attorney full power and authority to do and perform all and every act or thing whatsoever requisite or necessary in and about the premises as fully to all intents and purposes as I might or could do if personally present at the doing thereof; thereby ratifying and confirming all action my said attorney may have taken in this matter.

We hold that this instrument authorized Jones to participate in conferences with treasury agents and to attempt to explain to them the apparent inaccuracy of appellant's returns. Since the statements in question were made by Jones for this purpose, they were within the scope of his authority and testimony concerning them was properly admitted by the District Court.⁴

Any doubt about the intended legal effect of the power of attorney is dispelled by consideration of the circumstances under which it was executed and the subsequent acts of the parties. 3 Am.Jur.2d, Agency § 33 (1962). Appellant was aware of the purpose for which the conferences were held and obviously knew that his refusal or failure to provide a satisfactory explanation of his returns would be likely to result in criminal prosecution. On March 17, 1965, he and Jones attended the first conference and he allowed Jones to answer many of the questions posed by the agents and to receive a list of allegedly unreported items. At a second conference held on October 18, 1965, he allowed Jones to respond to all questions asked by the agents. One week later he executed the power of attorney. Thereafter, Jones, unaccompanied by Dolleris, participated in four more conferences held during 1965 and 1966. One of these conferences was held in the D. & W. offices, and appellant was invited to attend at least one of these meetings but declined to do so.

In Epstein v. United States, 246 F.2d 563 (6th Cir. 1957), cert. denied, 355 U.S. 868, 78 S.Ct. 116, 2 L.Ed.2d 74 (1957), this court determined that two letters written by the appellant's accountant during an investigation of income tax evasion were admissible into evidence, stating:

The contention that the court committed reversible error in permitting the admission of two letters signed by Eugene Bernstein in explanation of one of the charts used by the government during the trial has no merit. Bernstein was an accountant employed to represent defendant. During the course of the investigation he wrote one letter (dated February 3, 1955), on the letterhead of his accountant\'s firm, with reference to the holdings of defendant and his wife. He wrote a similar letter on the letterhead of defenda

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