United States v. Gross, Crim. No. 13042.

• Citation: 159 F. Supp. 316
• Decision Date: 31 January 1958
• Docket Number: Crim. No. 13042.
• Parties: UNITED STATES of America, Plaintiff, v. Harvey A. GROSS and Llewellyn Gross, Defendants.
• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Nevada

159 F. Supp. 316

UNITED STATES of America, Plaintiff, v. Harvey A. GROSS and Llewellyn Gross, Defendants.

Crim. No. 13042.

United States District Court D. Nevada.

January 31, 1958.

Franklin P. R. Rittenhouse, U. S. Atty., Las Vegas, Nev., and Clyde R. Maxwell, Jr., Internal Revenue Service, San Francisco, Cal., for plaintiff.

Spurgeon Avakian, Oakland, Cal., and Paul D. Laxalt, Carson City, Nev., for defendants.

HALBERT, District Judge.

This action was initiated on June 20, 1957, by the return and filing of an indictment wherein the defendants were charged in the first two counts with violating § 145(b) of the Internal Revenue Code of 1939, 26 U.S.C. § 145(b), on or about March 15, 1951. Defendants have filed a motion to dismiss these counts on the ground that prosecution under them is barred by the six year statute of limitations contained in § 3748(a) of the Internal Revenue Code of 1939, 26 U.S.C. § 3748(a).¹ Plaintiff asserts, in opposition to defendants' motion, that the time for prosecution was extended by the institution of a complaint before a Justice of the Peace of Reno Township, County of Washoe, State of Nevada, on March 14, 1957. Plaintiff further asserts that, in any event, defendants were "absent from the district" a sufficient number of days between March 15, 1951, and March 15, 1957, to toll the running of the statute for a long enough period of time to make the indictment on June 20, 1957, timely.

Under § 3748(a), supra, the institution of a complaint within the period of limitation before a commissioner of the United States will extend the period "until the discharge of the grand jury at its next session within the district." The issue is, thus, presented: Did the bringing of the complaint in this case before a Justice of the Peace of Reno Township, County of Washoe, State of Nevada, satisfy the requirements of the extension proviso in § 3748(a)?² If this issue is resolved in favor of defendants, I must then reach the issue of whether the sporadic business and pleasure trips³ taken by defendants between March 15, 1951, and March 15, 1957, were the kind of "absences" from the district that would bring into application the tolling provision of § 3748(a).

I.

It is a basic rule of construction that statutes of limitation applicable to criminal prosecutions are to be interpreted in favor of repose (United States v. Scharton, 285 U.S. 518, 522, 52 S.Ct. 416, 76 L.Ed. 917). I am unable to perceive any latent or patent ambiguity or any flexibility in the phrase, "commissioner of the United States". In order to avail itself of the extension provision in § 3748(a), the Government was explicitly required to institute the complaint before such an officer. A Justice of the Peace for Reno Township, County of Washoe, State of Nevada, is simply not synonymous with "commissioner of the United States".

The Government contends that since it might proceed before a qualified magistrate (not necessarily a United States Commissioner) in other criminal prosecutions under Rule 3, Federal Rules of Criminal Procedure, 18 U.S.C., and Title 18 U.S.C. §§ 3041 and 3043, it should not be deprived of that latitude in the instant case. Here, the Government seeks to obtain the extension benefits of § 3748(a), and, in so doing, it is asking to be relieved from the bar of the statute of limitations without satisfying the prerequisites to enjoying such a grace period. Moreover, it is fundamental in criminal law that where two statutory provisions cover the same subject matter, but one is general, and may apply to similar, but unrelated situations, and the other is specific and limited to the situation in question, the specific alone will control (United States v. Lamb, D.C.N.D.Cal.N.D., 150 F.Supp. 310, 312). The Government's argument on this point lacks legal foundation.

The Government has further attempted to excuse itself from strict compliance with the extension provision, which it seeks to invoke, by pointing out that the United States Commissioner in Reno, Nevada, was out of the State during the month of March, 1957, and that, therefore, under such circumstances, the complaint could be brought before a Justice of the Peace with the same effect as instituting the complaint before a Commissioner. I can, and I do, take judicial notice of the fact that there are, and were, Commissioners at Boulder City, Fallon, Fernley, Goldfield and Las Vegas, all of which are within the State of Nevada and within the jurisdiction of this Court. The Government does not even seek to explain why the complaint was not instituted before one of these five other Commissioners of the United States serving the District of Nevada. To explain the course it has selected, the Government simply argues that the institution of the complaint is but a mere mechanical formality. Again, the Government has overlooked the fact that it is the party attempting to invoke the extension provision of § 3748(a); not the defendants, nor the Court. The Government is duty bound to bring itself within the terms of that which it seeks to invoke. Furthermore, the official duties of a Commissioner of the United States in connection with the institution of a complaint before him by the Government are not mere mechanical formalities; to the contrary, the Commissioner is required to safeguard the rights of the accused by, inter alia, enforcing such essentials of fairness as the requirements of probable cause and notice (See: United States v. Rully, D.C.D.Conn., 136 F.Supp. 881, 883; and United States v. Dolan, D.C. D.Conn., 113 F.Supp. 757, 761).

Neither the law, nor the equities, asserted by the Government can remedy the defective launching of this prosecution to the extent that the Government may avail itself of the grace period provided for in § 3748(a).

II.

It is conceded by all parties that if the tolling proviso of § 3748(a) is applicable, then the defendants were outside of the judicial District of Nevada (where they are alleged to have committed a violation of § 145(b)) for a sufficient number of days between March 15, 1951, and March 15, 1957, to toll the statute of limitations for a period of time sufficient to make the indictment found in this case timely.⁴ Furthermore, it is also clear that all of such sojourns outside of the State of Nevada were for business or pleasure purposes, were irregular and not systematic and were for relatively short periods of time.⁵ The only real issue presented by the controversy between the parties on this point then, is whether sporadic and limited trips outside the district constitute "absences from the district" within the meaning of the tolling proviso in § 3748(a). Other District Courts have had occasion to consider the meaning of this phrase, but there is no unanimity of viewpoint on the question. The fact is, the case law on this subject can best be described as an olla-podrida.

In the Southern District of New York, it has been held that taxpayers who make a permanent change of residence to a foreign country⁶ or to another state⁷ during the statutory period will toll the running of the statute of limitations. In 1939, in that same district, it was held that a taxpayer who made intermittent business or pleasure trips outside of the district would toll the statute of limitations during such trips,⁸ but whether or not that interpretation still obtains is not clear.⁹ In both the Northern District of New York¹⁰ and the Eastern District of New York¹¹ it has been held that a permanent change in residence during the statutory period would toll the statute of limitations. Furthermore, in the Northern District of New York it has been held that extensive sojourning outside of the United States will operate to toll the running of the statute of limitations.¹² In the District of Delaware it has also been held that a permanent change in residence would serve to toll the running of the statute of limitations.¹³ In the Middle District of Pennsylvania it has been held that a taxpayer who lives within the territorial confines of one revenue district and another judicial district at the same time¹⁴ may never avail himself of the benefits of the statute of limitations, because, according to that Court, he always has been "absent from the district".¹⁵

However, it has been held in the District of New Jersey that a taxpayer who makes periodic business and pleasure trips to points outside the district does not toll the statute of limitations during such trips.¹⁶ A taxpayer in that district might even live abroad for eleven years after committing the alleged tax offense in the district and still avail himself of the benefits of the statute of limitations, as long as he was not "fleeing from justice".¹⁷ And, as to that substantial minority of taxpayers who reside in the District of Columbia, but are required to file their income tax returns in the revenue collection district of Maryland, it has been held that the benefits of the statute of limitations are available even though they might never be present in the judicial district of Maryland.¹⁸ That Court, further placed itself with the District Court for the District of New Jersey on the question of whether sporadic business and pleasure trips are sufficient "absences" to toll the running of the statute of limitations.¹⁹

To arrive at any legal conclusion from the foregoing patchwork of case law is difficult, if not impossible. To attempt to bring the problem into a proper focus, it will be well to scrutinize the theories and reasons given in support of the various interpretations of the phrase, "absence from the district". Adherents to the restrictive interpretation theory would hold that the word, "absent", means "not present" and that there is no ambiguity in the phrase requiring further refinement. Theoretically, under this view, any absence, for any reason and no matter how short in duration, would toll the statute of limitations. Given as supporting reasons for applying this...