United States v. Goldberg

• Decision Date: 26 June 1962
• Docket Number: Cr. No. 20663.
• Citation: 206 F. Supp. 394
• Parties: UNITED STATES of America v. Morris C. GOLDBERG, a/k/a Moe Goldberg and M. C. Goldberg.
• Court: U.S. District Court — Eastern District of Pennsylvania

206 F. Supp. 394

UNITED STATES of America v. Morris C. GOLDBERG, a/k/a Moe Goldberg and M. C. Goldberg.

Cr. No. 20663.

United States District Court E. D. Pennsylvania.

June 26, 1962.

COPYRIGHT MATERIAL OMITTED

Drew J. T. O'Keefe, U. S. Atty., James McGirr Kelly, Asst. U. S. Atty., Philadelphia, Pa., for plaintiff.

Thomas D. McBride, Raymond J. Bradley, Philadelphia, Pa., for defendant.

KRAFT, District Judge.

Defendant was tried to a jury and found guilty on eight counts of an indictment charging conspiracy and attempted evasion of income taxes due from defendant personally and from several corporations under defendant's control. His post-trial motions challenge the sufficiency of the indictment and the evidence, and assert various trial and procedural errors.

The facts, though somewhat complicated in the proof, are comparatively simple in the telling. Defendant, at all material times, was president and virtually sole owner of thirteen corporations, engaged for the most part in the laundry and linen supply business. These enterprises included Pennsylvania Coat & Apron Supply Co. (New Jersey); Pennsylvania Laundry Co.; Pennsylvania Coat & Apron Supply Co. (Pennsylvania); and Anderson's Empire Coat, Apron and Towel Supply, Inc.

Throughout 1955 and 1956, defendant was indebted to various of his corporations for money borrowed by him on open account, and those accounts appeared as assets on the respective corporate books under the caption "loan and exchange accounts." The oral and documentary evidence established that defendant caused the records of the four above-named corporations to be rewritten so that the cash sales of those corporations for 1955 or 1956, or for both years, would be understated in very substantial amounts. These reductions in sales were in turn offset by the entry of credits to defendant's loan and exchange account, which, of course, reduced defendant's indebtedness to his corporations.

Count 1 of the indictment charges defendant with conspiring willfully to attempt to evade and defeat taxes due by defendant individually for 1955 and 1956. Counts 2 and 3, respectively, charge attempted evasion of taxes due by defendant individually for 1955 and 1956. Counts 4, 5, 7, 8 and 9, respectively, charge attempted evasion of taxes due by the four above-named corporations, as follows: Pennsylvania Coat & Apron Supply Co. (New Jersey) for the period January 1, 1955, to September 1, 1955; Pennsylvania Laundry Co. for 1955; Pennsylvania Coat & Apron Supply Co. (Pennsylvania) for 1956; Anderson's Empire Coat, Apron & Towel Supply, Inc., for 1955; Anderson's Empire Coat, Apron, & Towel Supply, Inc. for 1956.

Defendant's first complaint is that Count 1 does not sufficiently or properly charge an offense against the United States. Count 1, as already noted, charges a conspiracy willfully to attempt to evade defendant's individual income taxes "for the calendar years 1955 and 1956." Defendant has maintained throughout this case that there cannot be a single conspiracy pertaining to two separate taxable years. We denied defendant's motions to require the Government to elect between the two years, and submitted Count 1 to the jury with instructions that it could find defendant guilty thereon if it found a conspiracy to evade his taxes only for the year 1955, or only for the year 1956, or for both years. After mature consideration, we think this was error.

It is, of course, true as a general proposition that a single conspiracy may have as its purpose the commission of more than one offense. The conspiracy is the crime, and it is but one, however diverse its objects. Frohwerk v. United States, 249 U.S. 204, 210, 39 S.Ct. 249, 63 L.Ed. 561 (1919). However, because of the criminal intent necessary for the substantive offense of attempted tax evasion, we conclude that a single conspiracy embracing two separate taxable years is impossible. That criminal intent has been stated by our Court of Appeals in United States v. Martell, 199 F.2d 670, 672 (3d Cir. 1952):

"The rule concerning the state of mind required for conviction for this offense is discussed in United States v. Murdock, 1933, 290 U.S. 389, 394-396, 54 S.Ct. 223, 78 L.Ed. 381, and Hargrove v. United States, 5 Cir., 1933, 67 F.2d 820, 823, 90 A.L.R. 1276. Willfulness is an essential element of the crime proscribed by § 145(b). It is best defined as a state of mind of the taxpayer wherein he is fully aware of the existence of a tax obligation to the government which he seeks to conceal. A willful evasion of the tax requires an intentional act or omission as compared to an accidental or inadvertent one. It also requires a specific wrongful intent to conceal an obligation known to exist, as compared to a genuine misunderstanding of what the law requires or a bona fide belief that certain receipts are not taxable."

Conspiracy to commit such a substantive offense cannot exist without at least the degree of criminal intent necessary for the substantive offense itself. Ingram v. United States, 360 U.S. 672, 678, 79 S.Ct. 1314, 3 L.Ed.2d 1503 (1959). It follows that persons can conspire to evade a tax only if they are fully aware of the existence of a tax obligation to the Government which they seek to conceal. Since income taxes become due and payable on an annual basis, it seems manifest that persons cannot at one and the same time conspire to evade more than one year's taxes.

A willful attempt to evade the tax for one year is a separate offense from a like attempt to evade for another year. United States v. Sullivan, 98 F.2d 79, 80 (2d Cir. 1938). We think the same holds true as respects a conspiracy to commit the substantive offense. Accordingly, defendant's motion in arrest of judgment upon Count 1 will be granted.

Defendant contends that the evidence was insufficient to prove that the offense charged in Counts 8 and 9 occurred within the territorial jurisdiction of this Court. These Counts deal with the attempted evasion of taxes for the years 1955 and 1956, respectively, of Anderson's Empire, a New Jersey corporation, with its place of business in Atlantic City, New Jersey. Each of the Counts lays venue as follows:

"* * * in the Eastern District of Pennsylvania, Morris C. Goldberg * * * did willfully and knowingly attempt to evade and defeat a large part of the taxes due and owing by the corporation to the United States of America * * * by causing to be prepared and causing to be filed with the Director of Internal Revenue for the Internal Revenue Collection District of Camden, at Camden, New Jersey, a false and fraudulent tax return * * *."

Each of these returns was filed in Camden, New Jersey. On that basis, venue would lie in the District of New Jersey. Holbrook v. United States, 216 F.2d 238, 239 (5th Cir. 1954); Kowalsky v. United States, 290 F.2d 161, 163 (5th Cir. 1961). On the other hand, if the returns were prepared in this District, this Court would have jurisdiction. United States v. Gross, 276 F.2d 816, 820 (2d Cir. 1960); Kowalsky v. United States, supra. We think the evidence was sufficient to establish that both of the returns were prepared in this District.

Rudolph Csicsek, one of the Government's principal witnesses, was controller and administrative assistant, exercising supervision over all of defendant's companies, during 1955 and 1956. His office adjoined the defendant's, in the headquarters or "main office" of all the companies, on North 12th Street, Philadelphia. Csicsek testified that, to the best of his recollection, the general ledgers for all 13 of defendant's corporations were kept at the 12th Street office; that all the books and records were under his supervision and control during 1955 and 1956; that "changes" made in the records at defendant's direction were made at the main office.

Mrs. Myers, bookkeeper for Anderson's Empire, Atlantic City, in 1955 and 1956, stated that after she prepared the cash receipts and sales journals, they were sent to the main office in Philadelphia and that was "the last I saw of them."

The tax returns of Anderson's Empire for 1955 and 1956 were prepared by a firm of accountants, one of whose offices was located in Philadelphia. Robert Ferst, a partner in the firm, testified that the returns were prepared from Anderson's books and records.

Venue need not be proved by direct and positive evidence. If, upon the whole evidence, it may reasonably be inferred that the crime was committed where the venue was laid, that is sufficient. United States v. Jones, 174 F.2d 746, 748-749 (7th Cir. 1949). We think the jury could reasonably infer from all the evidence that Anderson's tax returns were prepared in this District. Defendant's motions with respect to Counts 8 and 9, therefore, will be denied.

The substance of defendant's next complaint is that the jury was not properly constituted. The facts disclose an unusual situation. The panel of jurors which had been summoned included a Mrs. Ida B. Robinson, a saleslady and No. 85 on the list, and a Mrs. Lottie P. Robinson, a housewife and No. 86 on the list. When the entire panel of jurors convened in the jury assembly room, Mrs. Lottie P. Robinson was excused because of a physical indisposition. However, no immediate record of this was made by the jury clerk, and consequently her number remained in the panel from which the jurors were to be drawn for this trial.

When the jury was selected for this case, the Clerk drew No. 86 from the box and called the name of Mrs. Lottie P. Robinson. Mrs. Ida B. Robinson responded and took her place in the group from which the jury of twelve was ultimately selected.

Mrs. Ida B. Robinson was among the jurors examined on voir dire and was one of the twelve jurors remaining after the Government and the defendant had exercised their respective challenges. The Clerk then assigned these twelve to their proper places in the jury box, and, in doing so, he again announced the name of Mrs. Lottie P. Robinson....