United States v. James, No. 12719.

CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)
Writing for the CourtSCHNACKENBERG and KNOCH, Circuit , and PLATT
Citation273 F.2d 5
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Eugene C. JAMES, Defendant-Appellant.
Docket NumberNo. 12719.
Decision Date29 December 1959

273 F.2d 5 (1959)

UNITED STATES of America, Plaintiff-Appellee,
v.
Eugene C. JAMES, Defendant-Appellant.

No. 12719.

United States Court of Appeals Seventh Circuit.

December 29, 1959.


Joseph E. Green and Richard E. Gorman, Chicago, Ill., for appellant.

Charles K. Rice, Lee A. Jackson, John J. McGarvey, Meyer Rothwacks, Dept. of Justice, Washington, D. C., R. Tieken, John Peter Lulinski, William A. Barnett, Chicago, Ill., for appellee.

Before SCHNACKENBERG and KNOCH, Circuit Judges, and PLATT, District Judge.

SCHNACKENBERG, Circuit Judge.

After a trial without a jury, the district court found defendant Eugene C. James guilty of wilfully attempting to defeat and evade a large part of income tax due and owing by him and his wife for each of the years 1951 to 1954 inclusive, as alleged in a four count indictment. From judgment entered on the said findings, defendant has appealed.

The facts are not in dispute. The monies obtained by defendant amounting to over $700,000, which were not included in his returns for the taxable years, were misappropriated by him, partly from a union entity and partly from an insurance company, by means which made him guilty of the crime of embezzlement of such funds as a principal, under applicable laws of New Jersey. Defendant and one Saperstein were indicted for said embezzlement in New Jersey and an order of extradition of defendant from Illinois to New Jersey was affirmed

273 F.2d 6
by the Illinois Supreme Court, People ex rel. James v. Lynch, 1959, 16 Ill.2d 380, 158 N.E.2d 60, and a petition for rehearing denied May 19, 1959

Defendant argues that the receipt of embezzled funds, where the embezzlement has been made the subject of criminal prosecution, and when the fact that the funds were obtained by the crime of embezzlement has been specifically found by the trial court, does not constitute taxable income to the embezzler. He relies on Commissioner of Internal Revenue v. Wilcox, 1946, 327 U.S. 404, 66 S.Ct. 546, 90 L.Ed. 752. However, plaintiff contends that, as applied to the facts in this case, the Wilcox interpretation of section 22(a)1 was rejected by Rutkin v. United States, 1952, 343 U.S. 130, 72 S. Ct. 571, 96 L.Ed. 833. In Rutkin, it was held that money obtained by extortion constitutes taxable income to the extortioner. The court applied this test, 343 U.S. at page 137, 72 S.Ct. at page 575:

"An unlawful gain, as well as a lawful one, constitutes taxable income when its recipient has such control
...

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7 practice notes
  • James v. United States, No. 63
    • United States
    • United States Supreme Court
    • May 15, 1961
    ...of the Internal Rev- Page 215 enue Code of 1954.5 He was sentenced to a total of three years' imprisonment. The Court of Appeals affirmed. 273 F.2d 5. Because of a conflict with this Court's decision in Commissioner of Internal Revenue v. Wilcox, 327 U.S. 404, 66 S.Ct. 546, 90 L.Ed. 752, a ......
  • United States v. Pitoscia, Cr. No. 10-64.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • January 26, 1965
    ...confronted with the opportunity to consider and evaluate the decisions rendered in the Wilcox and Rutkin cases. In James v. United States, 273 F.2d 5 (C.A. 7th Cir., 1959), the Court of Appeals for the Seventh Circuit had before it a factual situation on "all fours" with that of the Wilcox ......
  • Buff v. Comm'r of Internal Revenue , Docket No. 3573-68.
    • United States
    • United States Tax Court
    • May 8, 1972
    ...to evade the Federal income tax on such funds. His conviction was affirmed on appeal by the U.S. Court of Appeals for the Seventh Circuit (273 F.2d 5). On certiorari, the Supreme Court reversed that decision and remanded the case with direction to dismiss. In so doing, however, a majority o......
  • United States v. Camara, No. 71-1222.
    • United States
    • U.S. Court of Appeals — First Circuit
    • December 2, 1971
    ...as to wilfulness would be a charade since the taxpayer's obvious defense would continue to be, as it had been, United States v. James, 273 F.2d 5 (7th Cir. 1959), the entirely reasonable reliance on Wilcox as having stated the final national law on the taxability of embezzled funds. In the ......
  • Request a trial to view additional results
7 cases
  • James v. United States, No. 63
    • United States
    • United States Supreme Court
    • May 15, 1961
    ...of the Internal Rev- Page 215 enue Code of 1954.5 He was sentenced to a total of three years' imprisonment. The Court of Appeals affirmed. 273 F.2d 5. Because of a conflict with this Court's decision in Commissioner of Internal Revenue v. Wilcox, 327 U.S. 404, 66 S.Ct. 546, 90 L.Ed. 752, a ......
  • United States v. Pitoscia, Cr. No. 10-64.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • January 26, 1965
    ...confronted with the opportunity to consider and evaluate the decisions rendered in the Wilcox and Rutkin cases. In James v. United States, 273 F.2d 5 (C.A. 7th Cir., 1959), the Court of Appeals for the Seventh Circuit had before it a factual situation on "all fours" with that of the Wilcox ......
  • Buff v. Comm'r of Internal Revenue , Docket No. 3573-68.
    • United States
    • United States Tax Court
    • May 8, 1972
    ...to evade the Federal income tax on such funds. His conviction was affirmed on appeal by the U.S. Court of Appeals for the Seventh Circuit (273 F.2d 5). On certiorari, the Supreme Court reversed that decision and remanded the case with direction to dismiss. In so doing, however, a majority o......
  • United States v. Camara, No. 71-1222.
    • United States
    • U.S. Court of Appeals — First Circuit
    • December 2, 1971
    ...as to wilfulness would be a charade since the taxpayer's obvious defense would continue to be, as it had been, United States v. James, 273 F.2d 5 (7th Cir. 1959), the entirely reasonable reliance on Wilcox as having stated the final national law on the taxability of embezzled funds. In the ......
  • Request a trial to view additional results

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