United States v. Lipton

• Decision Date: 19 September 1972
• Docket Number: Docket 72-1198.,No. 773,773
• Citation: 467 F.2d 1161
• Parties: UNITED STATES of America, Appellee, v. Joseph LIPTON, Appellant.
• Court: U.S. Court of Appeals — Second Circuit

467 F.2d 1161 (1972)

UNITED STATES of America, Appellee, v. Joseph LIPTON, Appellant.

No. 773, Docket 72-1198.

United States Court of Appeals, Second Circuit.

Argued May 12, 1972.

Decided September 19, 1972.

Irving Anolik, New York City, for appellant.

Thomas J. Fitzpatrick, Asst. U.S. Atty., New York City (Whitney North Seymour, Jr., U.S. Atty., Howard Wilson and Peter F. Rient, Asst. U.S. Attys., New York City, on the brief), for appellee.

Before FRIENDLY, Chief Judge, McGOWAN^* and TIMBERS, Circuit Judges.

TIMBERS, Circuit Judge:

Appellant Lipton appeals from a judgment of conviction entered upon a jury verdict after a five day trial in the Southern District of New York, Richard H. Levet, District Judge, finding him guilty of accepting a bribe as an IRS agent, in violation of 18 U.S.C. § 201(c) (1970).¹ On appeal Lipton claims error in the limitation of cross-examination of a codefendant, in the admission of hearsay evidence, in the prosecutor's reference in summation to the failure of the defense to call witnesses, and in the failure of the prosecutor to produce material claimed to be required by the Jencks Act or Brady v. Maryland, 373 U.S. 83, 87 (1963). Finding no error, we affirm.

I.

This prosecution, like several others involving corruption among IRS agents in the New York City area, developed from evidence given to federal authorities by William Williams, a corrupt Westchester County taxpayers' representative.² When arrested by agents of the IRS Inspection Division on January 22, 1970, after an 18 month undercover investigation, Williams confessed to the bribing of various IRS agents and provided authorities with the names of agents involved. Lipton was one of the agents implicated by Williams. He testified as the chief government witness at Lipton's trial.³

The bribe here involved arose as the result of an examination by the IRS of the 1960-64 corporate tax returns of a family-owned chain of grocery and meat markets controlled by five Shallo brothers, as well as the brothers' individual returns. In June 1966, after two years of investigation, Walter Haber, the revenue agent who conducted the field audit, disallowed all deductions claimed by the corporations for purchases allegedly made for cash from wholesale suppliers on the ground that such deductions were insufficiently supported. In addition, he rejected the brothers' explanation as to the source of approximately $10,000 in their bank accounts and attributed that sum as income to the corporations and the brothers. After recomputing the corporations' and the brothers' individual returns, Haber assessed deficiencies (hereinafter, "the deficiency" or "the deficiency assessment") totalling $275,000, plus penalties of $4,000, against the corporations and the Shallos.

In August 1966, the Shallos were introduced by a mutual friend to Williams. At that time he was representing taxpayers before the IRS. The Shallos had become dissatisfied with the accountant who had represented them during the field audit. They retained Williams to represent them in administrative proceedings to reduce the deficiency assessment.

Williams first filed a protest with respect to the field audit. He claimed that the revenue agent had not allowed deductions for the wholesale purchase of produce by the corporations, but had permitted the corporations to be taxed for income derived from the retail sale of produce. In addition, acting pursuant to IRS regulations, Williams by-passed a hearing in the conference section and filed a protest with the Appellate Division. Under this procedure the assessment made by the field agent would be reviewed by an Appellate Conferee who had authority to increase or decrease the taxpayers' deficiency assessment. Sometime thereafter, Williams was informed by the Appellate Division that Joseph Lipton, appellant herein, had been assigned as Appellate Conferee. Although Williams and Lipton had been colleagues for 8 to 10 years while Williams was with the IRS, the record does not indicate that Lipton's assignment to this case was pre-arranged by Williams or was other than fortuitous.

In January 1967, Williams first met with Lipton to discuss the Shallo case. Williams informed Lipton that the Shallos were gathering letters from their suppliers to substantiate the deductions for cash payments. There is no evidence that at this first session there was any suggestion of a bribe.

Sometime during the spring of 1967, however, Williams' efforts to reduce the deficiency shifted to illegal means. While there is a conflict between the testimony of James Shallo, the only one of the five brothers who testified, and Williams as to the details of the negotiations,⁴ it is clear that by August 10, Shallo had agreed to pay a bribe of approximately $15,000 to "someone downtown in the Appellate Division". While Lipton agreed to accept this sum, it appears that Williams never divulged the corrupt agent's name to Shallo. Sometime between August 10 and August 15, Williams obtained from Shallo a paper bag containing $13,000. On the afternoon of the same day, Williams met with Lipton at a downtown restaurant and gave Lipton the $13,000.

On August 16, Lipton gave Williams a set of forms by which the IRS offered to reduce the deficiency from $279,000 to approximately $20,000, plus $4,000 in interest and penalties. On August 18, Williams returned to Lipton the forms which had been signed by the taxpayers to indicate their acceptance of the IRS offer. The reduced assessment was paid and the case was closed.⁵

Following Williams' arrest in January 1970, the indictment against him and Lipton was returned May 13, 1970. The trial of Lipton began December 7, 1971 and was concluded December 13, 1971 when the jury found Lipton guilty on the bribery count. Lipton did not testify at his trial and did not present any evidence. He was sentenced January 14, 1972 and has been enlarged on bail pending appeal.

II.

Lipton contends that the district judge unduly limited his trial counsel's scope of cross-examination of Williams.⁶ We disagree. Our careful examination of the entire record leaves us with the firm conviction that Lipton's counsel was given ample opportunity to cross-examine Williams and that Judge Levet's rulings were well within his discretion as the trial judge.

Brief reference to certain of the testimony preceding the cross-examination of Williams will place in context Lipton's claim that his cross of Williams was unduly curtailed.

James Shallo, the government's first witness, testified on direct regarding the amount of the deficiency assessment and the payment of the bribe.⁷ On cross, Shallo admitted that Williams never named Lipton as the corrupt agent, that he never met Lipton and that he did not see Williams give the $13,000 to Lipton.

The government next called Williams. On direct, he testified to his version of the bribe negotiations⁸ and the reduction of the deficiency assessment from $279,000 to $24,000. He further testified that for his services the Shallos paid him a fee of $3500—one $500 check, a second $1,000 check, and $2,000 in cash. He insisted that this fee constituted the sole payment to him in the case, and that the full $13,000 from the Shallos was given to Lipton. On cross, defense counsel sought to establish that Williams retained the $13,000.

It was at this point that the first challenged ruling was made. Defense counsel asked Williams if the cash "you received from James Shallo was not paid to Mr. Lipton but was retained by you?" Williams answered in the negative, volunteering that he would not lie because it would subject him to a charge of perjury. Defense counsel then asked him who would decide whether a perjury charge was to be brought. The government objected. Judge Levet sustained the objection as to form and relevancy.⁹

Lipton contends that the judge erred in sustaining the objection. He argues that the jury could have inferred from Williams' answer that he might seek to ingratiate himself with the federal authorities in the hope of leniency, in the six pending bribery cases in which he had pleaded guilty, by testifying falsely against Lipton without risk of prosecution for perjury.

We appreciate the force of Lipton's argument that with a witness such as Williams considerable latitude on cross should be permitted to show motive, bias and interest. And we note that the government with commendable candor concedes, Government Brief 7, that "the answer might have added support for the argument that Williams was beholden to the Government". But we completely agree with the government's further observation that "Lipton had already made this point ad nauseum". Id. Cross-examination of Williams covers 68 pages of the trial transcript—more than a quarter of the total testimony. Lipton's counsel established over and over again Williams' interest and motive in cooperating with the government. To have permitted him to testify in substance that it was the United States Attorney who would determine whether he should be prosecuted for perjury, all else aside, would at best have been cumulative on the issue of bias. See United States v. Russo, 442 F.2d 498, 503 (2 Cir. 1971), cert. denied, 404 U.S. 1023 (1972); cf. United States v. Campbell, 426 F.2d 547 (2 Cir. 1970). In a slightly different context (withholding a portion of an IRS report claimed to be relevant on the issue of the motive and bias of a government witness), Judge Hays in Campbell stated the criteria for the trial judge's exercise of discretion as follows:

"In determining whether the trial judge has abused his discretion in limiting the introduction of such impeaching evidence, the issue is whether the jury was otherwise in possession of sufficient information concerning formative events to make a `discriminating appraisal\' of a witness\' motives and bias." 426 F.2d at 550.

We hold here that the jury was otherwise in possession of more than sufficient information on the...