United States v. Ford

• Decision Date: 06 August 1956
• Docket Number: No. 174,Docket 23754.,174
• Citation: 237 F.2d 57
• Parties: UNITED STATES of America, Appellee, v. Bryan E. FORD, Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

237 F.2d 57 (1956)

UNITED STATES of America, Appellee, v. Bryan E. FORD, Defendant-Appellant.

No. 174, Docket 23754.

United States Court of Appeals Second Circuit.

Argued February 14, 1956.

Decided August 6, 1956.

COPYRIGHT MATERIAL OMITTED

Sydney R. Rubin, Rochester, N. Y., Lomenzo, Salzman & Witt, Rochester, N. Y., for defendant-appellant.

Donald F. Potter, Asst. U. S. Atty., Western Dist. of N. Y., Rochester, N. Y., John O. Henderson, U. S. Atty., Western Dist. of N. Y., Buffalo, N. Y., for appellee.

Before CLARK, Chief Judge, and FRANK and HINCKS, Circuit Judges.

HINCKS, Circuit Judge.

This is an appeal from a judgment of conviction of income tax evasion on three counts of a five-count indictment which charged the defendant with evasion of his income tax for the calendar years 1947 through 1951, respectively. After a trial, in which the Government relied upon the so-called "net worth" theory of proof, he was convicted on the counts for the years 1948, 1949 and 1950, and acquitted on the count for 1951. The jury was unable to agree upon a verdict on the first count, for 1947, and following its stalemate the trial judge directed a verdict of acquittal on that count. Subsequently, on the defendant's motion for acquittal on all counts or, in the alternative, for a new trial, but prior to any imposition of sentence, the judge vacated his previous directed verdict of acquittal as to Count 1.

The defendant was a Rochester policeman who had joined the Police Department in 1921 as a patrolman and was thereafter continually employed on the force throughout the pre-indictment and indictment years. His annual gross salary ranged from a low of $1125 in 1921 to a high of $4400 in 1951. The defendant was assigned to special duty investigating vice at various times beginning about 1934. He was so assigned throughout 1947 and thereafter until about July 16, 1948. On the latter date he was transferred to the detective bureau where he remained until about May 1949 when he was returned to the vice squad. There was no evidence that he was engaged specifically in vice investigation during 1950 but he was restored to his vice investigation duties on about December 15, 1951.

Prior to trial the Government conducted a thorough investigation of the defendant's financial status and manner of life from the close of the calendar year 1941 through the close of the final indictment year 1951. The Government's investigation was exhaustive. Every bank in Rochester was checked for accounts of the defendant. The Surrogate's records in Monroe County were checked for possible legacies from relatives of the defendant and his wife, and a claimed legacy from the defendant's sister was negated; the United States Treasury records pertaining to the issuance of United States Savings Bonds were checked for bond purchases year by year; the various contractors who worked on the defendant's residence were interviewed to verify the cost figures given by the defendant; the department stores in Rochester were checked for purchases; the automobile dealers where the defendant had purchased cars were checked for the date of the purchase and the amount involved; the Rochester Gas and Electric Company was checked for payments by the defendant; the Clerk's office of the Monroe County Court House was checked for the date that his old house was sold, the amount for which it was sold, and the date he purchased the property on which his new house was located. This list is by no means inclusive. It is set forth here only as some indication of the meticulousness of the Government's investigation and to show that the specific items reflected in its net worth chart were based on undisputedly sufficient evidence.

In addition, Government agents questioned the defendant concerning his sources of income, inheritances, gifts, borrowed funds and the sources of his wife's income and funds. The Government treated the defendant and his family as an economic unit and calculated the defendant's assets, liabilities and expenditures on that basis. The Government purported to show the net worth (assets minus liabilities) of the defendant at the close of each calendar year beginning with 1941. Exhibit 80.¹ It credited the defendant with an opening net worth of $57,490.40 as of January 1, 1947, which figure included no allowance for cash on hand. To the increase (or decrease) in the defendant's net worth for each subsequent year in the indictment period, it added the defendant's personal (nondeductible) expenditures for that year thus determining his gross income. It calculated the defendant's taxable income for each year by subtracting from his gross income all known nontaxable income receipts and allowable nonbusiness deductions during that year. By subtracting his reported income from his taxable income figures thus arrived at, the Government calculated unreported taxable income during the indictment years 1947 through 1950 of $15,455.61, $7,892.20, $2,976.17, and $1,103.22, respectively. For 1951 the Government calculated an overestimation of taxable income of $180.62.

For the pre-indictment years 1942 through 1946 the Government, through the same basic scheme, calculated unreported taxable income of $4,996.32, $6,167.55, $5,648.68, $9,009.12, and $17,122.00, respectively. These figures were included in the net worth chart, Exhibit 80, which went to the jury.

It was the Government's theory that the unreported taxable income as indicated by its net worth chart was graft received by the defendant for nonperformance of his duties as a policeman and as a member of the vice squad. Although there was no direct evidence that the defendant ever received a bribe, the evidence did disclose that he had "opportunities" flowing from his position in charge of the investigation of vice. There was evidence that there was wide open gambling in Rochester during the spring and early summer of 1948 when the defendant was on the vice squad; that on three or four occasions between April and June 1948 the defendant had been told by Officer Stanton about the sale of policy slips by one Passorelli, but no action was taken until Officers Faulkner and Van Auker were notified of similar sales and thereupon made an arrest; that statistics of gambling cases disposed of in the City Court of Rochester indicated an upswing in prosecution of gambling from 1948 to 1951 after other officers had been assigned to the squad; and that the defendant was on friendly terms with a professional gambler, Thomas L. O'Brien, whose restaurant he and his wife patronized and whose house he had visited on two occasions. There was evidence that O'Brien had called the defendant by telephone two or three times in 1954 to inquire about rumors that the defendant was going back to the police force, and that at an unidentified date the defendant and his wife had briefly visited O'Brien at his summer cottage. Police Lieutenant Irish testified that while he, Irish, was on the vice squad he had been offered bribes on several occasions. This evidence was first admitted and subsequently stricken out by the court with instructions to the jury to disregard it.

The Government introduced proof of inconsistencies and fabrications in the defendant's extrajudicial explanations of his finances. When the defendant was questioned by a superior in 1947 about the expensive home he was building on Gregory Hill Road, he claimed he could sell his Linden Street House for $10,000 and get a mortgage for the rest. Actually, the sale of the Linden Street residence netted him about $4800, and the new house, costing $37,800, with the land and all improvements, was not mortgaged. In April of 1952, when interrogated by Revenue Agents, the defendant stated that the construction of his new home cost him only $19,400. He claimed to have received in 1943 an inheritance from his brother, Clarence, of $500, with which the Government credited him, and a gift of $8800 from Clarence in 1937 which went into bond purchases in later years.² He stated that he had no source of income from any other source than his salary. When asked how he could deposit over $13,000 in banks during 1946 and 1947 on his salary of about $3,000, the defendant replied, "That is a lot of money. It looks bad, doesn't it?" At a conference with the Revenue Agents in July 1952 he stated that the house cost "around $25,000" and when confronted with his prior statement said, "I might have lied about that unwittingly. I have nothing to conceal." At that time the defendant claimed the $500 inheritance and a gift of $8900 from Clarence in 1939 as his only gifts and inheritance. He stated that he used the gift from Clarence to make bank deposits in 1946 or 1947 and explained his bond purchases and other bank deposits by systematic savings and accumulations,³ an explanation which was completely destroyed by his wife's testimony at the trial.⁴ In November 1952, at a meeting with Police Department officials, the defendant claimed for the first time that in 1940 he and Clarence had pooled some money for a joint business venture and that when the venture failed to materialize Clarence before his death in 1941 turned over the pooled funds to the defendant. He also mentioned then for the first time a legacy of his wife's from a Great Aunt Mary from the West which will be discussed later. The Government also presented evidence that the defendant had concealed bond purchases, expenditures, and bank accounts, and made misrepresentations relating to the purchase of a car for his daughter, Nancy, in his pre-indictment extrajudicial statements. In short, the evidence of fabrication, misrepresentation and concealment was strong and the jury may well have concluded that his constantly shifting explanations were incredible.

The defendant did not take the stand. The defense called several witnesses who were superiors and associates of the defendant on the police force. These witnesses testified to the defendant...