United States v. Harary

• Decision Date: 28 February 1972
• Docket Number: Docket 71-1933.,No. 430,430
• Citation: 457 F.2d 471
• Parties: UNITED STATES of America, Appellee, v. Charles R. HARARY, Appellant.
• Court: U.S. Court of Appeals — Second Circuit

457 F.2d 471 (1972)

UNITED STATES of America, Appellee, v. Charles R. HARARY, Appellant.

No. 430, Docket 71-1933.

United States Court of Appeals, Second Circuit.

Argued January 13, 1972.

Decided February 28, 1972.

Michael S. Fawer, New Orleans, La. (Paul Bender, New York City, of counsel), for defendant-appellant.

Walter M. Phillips, Jr., Asst. U.S. Atty., New York City (Whitney North Seymour, Jr., U.S. Atty., S.D.N.Y., Richard J. Davis, Asst. U.S. Atty., New York City, of counsel), for appellee.

Before MEDINA, KAUFMAN and TIMBERS, Circuit Judges.

IRVING R. KAUFMAN, Circuit Judge:

We must decide whether under certain circumstances and upon timely motion, a defendant has the right to have a lesser-included offense, although charged as a separate count in the indictment, withheld from the jury's consideration when the jury rationally cannot return a verdict of not guilty of the greater offense but guilty of the lesser offense.

Charles Harary appeals from a judgment of conviction for giving a gratuity to an Internal Revenue Agent in violation of 18 U.S.C. § 201(f), after a second jury trial before Judge Metzner. Harary, who was charged in a three-count indictment with conspiracy, 18 U.S.C. § 371, bribery, 18 U.S.C. § 201(b)(2), and giving a gratuity, argues that the trial judge erred in submitting the gratuity count to the jury. Harary was acquitted on the bribery and conspiracy counts. For the reasons we shall set forth, we remand to the district court with instructions to dismiss the indictment.

A detailed statement of facts will aid in clarifying the difficult issue we are called upon to resolve. In early August, 1970, Harold Wenig, an Inspector with the security branch of the Internal Revenue Service, received information that two brothers, Meyer and Abraham Sutton, were so-called "payoff people." Thereupon, he arranged for Agent Lawrence Ostrow to audit the corporate tax returns for the years 1967 and 1968 of Sutton & Sutton, Ltd., an importer of ready-made wearing apparel owned by the Suttons. Ostrow, who previously had conducted audits for Wenig in instances where a bribery attempt was suspected, first met with defendant Harary, the Suttons' accountant, on September 1, 1970. At this initial meeting he questioned the source of the corporation's $199,000 capitalization.¹ Harary explained that the money came from the liquidation of a family estate in Syria, but was unable to produce any substantiation at that time. Accordingly, a second meeting was scheduled for September 22.

While at lunch on September 1, Harary casually asked Ostrow if he was interested in the prostitutes they had encountered on their way to lunch. Ostrow quickly expressed his disinterest, even when Harary stated he would pay the cost. Finally, over drinks at the termination of the meeting that day, Harary offered to give Ostrow a Yashica camera valued at more than $200. Although Ostrow declined this offer too, Harary unsuccessfully persisted, stating he would be ready to sell Ostrow the camera for $15 which, he added with a chuckle, was its cost.²

Ostrow immediately informed Wenig of these early overtures. When Ostrow returned for the September 22 meeting with Harary to continue what Wenig termed a "normal audit," he was outfitted with a concealed tape recorder. The capitalization figure continued to be the focus of their discussion. Ostrow stated that he was not satisfied with three letters Harary had produced which recounted the liquidation of the estate of the Suttons' father when he fled from Syria to Israel.³ Instead, Ostrow demanded either a cancelled check or an affidavit to substantiate the Suttons' contention. At this point Meyer Sutton was asked to join the conference. He explained how difficult it would be to obtain the corroboration requested and pleaded with Ostrow to reconsider his demand. Ostrow said it would "put him out on a limb" if he agreed to waive his demand. The conference with Sutton ended with a warning from Ostrow that he would have to look into the Suttons' personal returns if the substantiation was not forthcoming because the large cash transactions in the businesses operated by the Suttons might furnish some light on the source of the capital.

After lunch on the 22nd, the capitalization item was discussed again. Although Ostrow repeatedly had set forth the substantiation he required, Harary pressed Ostrow with the Suttons' desire to have him conclude that the capitalization was satisfactory and suggested compensating Ostrow in return. It was then that Ostrow indicated his interest in a bribe by asking Harary: "What do you want me to do?" The two talked briefly about the capitalization and the requisite substantiation, and Harary became more explicit: "Maybe we can compensate you with some women or some money." "What do you want me to do," Ostrow repeated. When Harary proposed again that Ostrow should avoid questioning the capitalization item in his report, Ostrow responded: "Keep talking." Harary then made an initial offer of $250. Ostrow indicated that he was not satisfied with just this nibble and, by repeatedly responding "to keep talking as to anything else you want me to do," induced Harary to raise his offer to $1250 before Ostrow agreed to accept that sum. Ostrow was paid in cash that afternoon.⁴

Wenig arrested Harary one week later and brought him before two Assistant United States Attorneys for questioning. He was properly advised of his rights, initially declined to call his attorney and quickly admitted that he had paid the "bribe." Upon reconsidering, Harary decided to consult with his attorney. After conferring with counsel and in his presence, he again admitted to the Assistant United States Attorneys that he indeed had paid a "bribe" and added that he had made the initial overture. He and the Suttons, according to his statement, had decided after the September 1 meeting that Ostrow was "approachable."

The three-count indictment followed, based on payment of the $1250.⁵ As we already have indicated, Harary was tried twice, the first trial having resulted in a mistrial. Both trials followed virtually the same course. The government's case consisted solely of the uncontradicted testimony of Ostrow and Wenig establishing the facts to which we have alluded. Harary relied essentially on the cross-examination of the prosecution witnesses to establish his sole defense—entrapment—although three character witnesses testified on his behalf. The summation by both the prosecution and the defense centered on the issue of entrapment. At the first trial, denying Harary's motion to withhold the gratuity count from the jury, Judge Metzner instructed the jury on all three counts as well as on the defense of entrapment. In actuality, however, the gratuity count was considered as a lesser-included offense of bribery and not as a separate count since Judge Metzner instructed that the jury should consider the gratuity count only if it found Harary not guilty of bribery.⁶ After twice returning to have the charge on entrapment read (and finally taking a copy of the charge to the jury room), the foreman announced at the end of two days of deliberations that the jurors could not reach a verdict. At the second trial, Harary continued the strategy he had employed at the first trial and repeatedly moved to strike the gratuity count,⁷ but Judge Metzner denied those motions and instructed the jury on this issue as he had at the first trial. This time, however, the jury returned a verdict of not guilty on the conspiracy and bribery counts but guilty on the gratuity count.⁸

In the main, Harary argues that Sansone v. United States, 380 U.S. 343, 349-350, 85 S.Ct. 1004, 1009, 13 L.Ed.2d 882 (1965), requires reversal of the conviction. The Supreme Court instructed in Sansone that a defendant does not have an absolute right to a lesser-included offense charge unless there is a "disputed factual element" which would allow the jury rationally to conclude that the defendant is guilty of the lesser offense, but not the greater offense:

But a lesser-offense charge is not proper where, on the evidence presented, the factual issues to be resolved by the jury are the same as to both the lesser and greater offenses.... In other words, the lesser offense must be included within but not, on the facts of the case, be completely encompassed by the greater. A lesser-included offense instruction is only proper where the charged greater offense requires the jury to find a disputed factual element which is not required for conviction of the lesser-included offense. (Citations omitted.)

See also Berra v. United States, 351 U.S. 131, 76 S.Ct. 685, 100 L.Ed. 1013 (1956); Sparf v. United States, 156 U.S. 51, 15 S.Ct. 273, 39 L.Ed. 343 (1895). Harary urges that this principle binds the government as well as the defendant, and that it is of no significance that the lesser-included offense is charged as a separate count of the indictment.

I.

The threshold question, therefore, is whether the evidence adduced at trial presented the disputed factual element which Sansone decided would require a lesser-offense instruction. Bribery is defined by 18 U.S.C. § 201(b)(2) to include giving a public official anything of value with the intent to influence him to commit a fraud on the United States.⁹ The lesser offense, giving a gratuity, is defined in § 201(f) to include giving a public official anything of value "for or because of any official act performed or to be performed" by him.¹⁰ The only element which distinguishes bribery from giving a gratuity is the specific intent to influence which is required for conviction of bribery. See United States v. Umans, 368 F.2d 725, 728-730 (2d Cir.1966), cert. dismissed as improvidently granted, 389 U.S. 80, 88 S.Ct. 253, 19 L.Ed.2d 255 (1967). Based upon a careful examination of the record, it is clear that this issue was not disputed in this case.

Putting aside for the moment the defense of...