United States v. Melillo

• Decision Date: 01 November 1967
• Docket Number: No. 64-CR-77.,64-CR-77.
• Citation: 275 F. Supp. 314
• Parties: UNITED STATES of America, Plaintiff, v. Nicholas MELILLO, Defendant.
• Court: U.S. District Court — Eastern District of New York

275 F. Supp. 314

UNITED STATES of America, Plaintiff, v. Nicholas MELILLO, Defendant.

No. 64-CR-77.

United States District Court E. D. New York.

November 1, 1967.

Joseph P. Hoey, U. S. Atty. for E. D. New York, Brooklyn, N. Y., for plaintiff, United States. Michael J. Gillen, Asst. U. S. Atty., of counsel.

Robert S. Kreindler, New York City, for defendant.

OPINION

WEINSTEIN, District Judge.

Charged with wilfully attempting to evade the payment of income taxes (26 U.S.C. § 7201), defendant was tried before a jury. After both sides rested, the Court determined that while a reasonable juror could conclude that it was more probable than not that the defendant had filed his tax returns with knowledge that they were false, such a juror would have a reasonable doubt on this issue. The question posed is whether, under such circumstances, the Court should grant a motion for judgment of acquittal.

FACTS

Defendant, a laborer, began a garbage and rubbish collection service in his own name in the late 1940's. His first four Brooklyn customers, referred to by him as "stops", were "donated" by a relative, one Gallo.

The new entrepreneur worked from early morning until late at night on a truck loading heavy barrels of refuse and as he drove about he kept his eyes open for new stops. His father answered telephones and helped with truck repairs. His married sister kept the books. Service was reliable. The business prospered.

Central to the success of the business was defendant's mother, a matriarch of the old school. (The defendant, a bachelor nearing fifty, lived in her one-family attached home and received a weekly allowance from her.) Shortly after World War II she became depressed. One of her sons had been killed in battle and other relatives had died. A psychiatrist suggested that she be kept occupied and the idea of a business was seized upon by the family partly because of its therapeutic value. She helped answer the business telephone from home, sent out the bills and scanned the papers for word of new refuse-creating ventures that could be solicited by her son.

Trucks and new stops were purchased from money advanced by the mother. She used some dozen substantial bank accounts in her name, individually and as co-owner. These assets were said by her to have come from cash received from her father and other relatives.

The mother also hired an "accountant" to help with the books. He was without formal training in this country and his main vocation was as a customer's man in a brokerage office. Experts for both the government and the defense agreed that the accounting techniques used were not satisfactory. For example, tens of thousands of dollars in income each year from major customers, including Fort Totten Army Base in Brooklyn, were deposited directly in the mother's many bank accounts, by-passing the business records completely. This income was not reflected in the tax returns prepared by the accountant. Cash, claimed to have amounted to more than twenty thousand dollars each year, was used to "purchase stops". The recipients of these disbursements were not shown on the books and defendant refused on and off the witness stand to tell who any of them were.

Whether the mother followed the accountant's directions—as she testified— or he hers—as appears possible from her forceful personality—is impossible to determine. He died a natural death after the government began its tax investigation. Some of the papers relating to the business perished with him.

The crucial issue in the case was whether the defendant filed his returns with knowledge that they were false. The government conceded that defendant's name was signed to the business returns by some one else. (The mother testified that she did it.) To support the conclusion that defendant was aware that false returns were filed it relies upon the inferences naturally arising from the facts that defendant was a high school graduate, that the family was closely knit and would be likely to talk about the business's fiscal affairs, and that he is being paid $15,000 a year by an association of rubbish cartmen to take care of its members' problems with labor and others—a position which appears to require some acumen.

Defendant's evidence indicated that if there was a crime, the wrong person had been charged with it. When he needed money to buy trucks or stops, the defendant, according to the testimony of mother and son, went to her and got it without making inquiry as to source. Although the mother regularly served defendant his supper, the occasion furnished no opportunity to talk of financial matters. As she described it, during the years in question he came home tired from working on the truck, ate his supper in silence, and went to his room to sleep in preparation for the morrow's hard labor.

Both mother and son testified that he had not dealt at all with the accountant and had not seen or had any notion of the books or of the tax returns. The mother testified that only she and her daughter talked to the accountant. This testimony was partially confirmed by that of the government investigators who had to obtain details from the accountant rather than from the defendant.

Whatever uncertainty may have existed as to whether there could be a reasonable doubt about defendant's knowledge was dispelled by the government. It rigorously cross-examined the business's recently retained Certified Public Accountant—a man of conceded reputation and skill, whose direct testimony tracked that of government experts. He had been called by the defense to show the inadequacy of the books previously kept by the business in an effort to demonstrate that the deceased accountant's advice had been bad. Pressed by the Assistant United States Attorney, he testified that the prior accountant had declared that all of his dealings were with the mother and sister. The record reads as follows:

Q You didn't ask Mr. Melillo the defendant during the entire indictment years, which he is being tried for right now, '57, '58, '59, if he discussed these books and records with Mr. Lo Castro the dead accountant? Is that your testimony?

A The only thing Mr. Lo Castro told me was that he had all his dealings with Mrs. Melillo and Mrs. Vivian Magliano defendant's sister.

Q I am asking you now in the preparation of the defense of this case. Did you ask Mr. Melillo, the defendant, whether he ever discussed during the indictment years the books and records of Melillo Carting with Mr. Lo Castro?

A No, sir.

(Emphasis supplied.)

There was no motion to strike the answer as non-responsive.

The declaration of the former, now deceased, accountant was, of course, hearsay. But it had considerable probative force. There was no obvious reason for the former accountant—the hearsay declarant—to lie about the matter in dealing with his successor. The witness, a Certified Public Accountant, had no substantial reason to falsify. All his testimony was straightforward and the manner of his responses belied guile. Moreover, the witness had a clear recollection and his memory for details was good. Taken with all the other evidence in the case and with the lack of evidence of defendant's knowledge, this uncontested testimony could not help but create a reasonable doubt.

TEST OF SUFFICIENCY OF EVIDENCE

The question of how much evidence is required to allow a criminal case to go to the jury "is not entirely free from doubt" in this circuit. United States v. Leitner, 202, F.Supp. 688, 693 (S.D. N.Y.1962), aff'd per curiam, 312 F.2d 107 (2d Cir. 1963). The uncertainty has resulted from a dispute about whether there is a greater burden of production in criminal cases than in civil cases.

The view that there is no difference has been stated by Judge Learned Hand, speaking for the Court of Appeals. The basis of his decision was the difficulty of deciding when a case fell within the range between "more probable than not" —the civil standard—and "beyond a reasonable doubt"—the criminal measure. He declared in the Feinberg case:

The accused do not argue that the evidence would not have supported a verdict in a civil case, but they do say that it was not cogent enough to exclude all reasonable doubt of their guilt. Evidence upon an issue which merely preponderates is indeed different from evidence which excludes all doubt; * * *. It is probable, whatever they say, that in their actual judgments the added gravity of the consequences often makes them more exacting. But courts—at least federal courts—have generally declared that the standard of evidence necessary to send a case to the jury is the same in both civil and criminal cases; and that, given evidence from which a reasonable person might conclude that the charge in an indictment was proved, the court will look no further, the jury must decide, and the accused must be content with the instruction that before finding him guilty they must exclude all reasonable doubt. * * * We agree with Judge Amedon * * * who refused to distinguish between the evidence which should satisfy reasonable men, and the evidence which would satisfy reasonable men beyond a reasonable doubt. While at times it may be practicable to deal with these as separate without unreal refinements, in the long run the line between them is too thin for day to day use. United States v. Feinberg, 140 F.2d 592, 594, 154 A.L.R. 272 (2d Cir.), cert. denied, 322 U.S. 726, 64 S.Ct. 943, 88 L.Ed. 1562 (1944) (emphasis supplied).

The opposing view that a different burden of production is required in criminal cases has been advocated in this circuit most forcefully by Judge Frank. He saw no practical difficulty in requiring trial courts to apply a more stringent rule in criminal than in civil cases, noting that,

* * * the criminal standard requires that the judge direct a verdict for the accused if the judge reasonably thinks that the evidence for conviction is such that it might persuade a reasonable jury to find that

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