United States v. Murray

• Decision Date: 10 January 1962
• Docket Number: Docket 26741.,No. 37,37
• Citation: 297 F.2d 812
• Parties: UNITED STATES of America, Appellee, v. Edwin MURRAY, Appellant.
• Court: U.S. Court of Appeals — Second Circuit

297 F.2d 812 (1962)

UNITED STATES of America, Appellee, v. Edwin MURRAY, Appellant.

No. 37, Docket 26741.

United States Court of Appeals Second Circuit.

Argued September 27, 1961.

Decided January 10, 1962.

Certiorari Denied March 26, 1962.

Louis Bender, New York City, for appellant.

Edward Brodsky, Asst. U. S. Atty., Southern Dist. of New York, New York City (Robert M. Morgenthau, U. S. Atty., and Arthur I. Rosett, Asst. U. S. Atty., New York City, on the brief), for appellee.

Before LUMBARD, Chief Judge, and FRIENDLY and SMITH, Circuit Judges.

Certiorari Denied March 26, 1962. See 82 S.Ct. 845.

LUMBARD, Chief Judge.

Edwin Murray appeals from his conviction on two counts of income tax evasion for the years 1952 and 1953 in violation of § 145(b) of the Internal Revenue Code of 1939.¹ He was charged with reporting net income of only $6,504.45 and $4,038.09 for 1952 and 1953 respectively, whereas his net income for those two years calculated from increases in his net worth was allegedly $24,017.60 and $19,838.82, respectively. The government claimed that the difference in net income came from gambling activities; the defense was that the apparent increases in net worth came from a loan of $32,000 by one John Lamb. Murray was sentenced to imprisonment for one year and one day on each count, the sentences to run concurrently, and was fined a total of $5,000.

Murray's appeal alleges that the government's evidence was insufficient to take the question of his guilt to the jury, that there were errors in the admission and exclusion of evidence, and that the trial judge erred in permitting the government to contradict its bill of particulars in summation. He also claims error in the denial of his pretrial demand for inspection of the transcripts of statements given by him to the Intelligence Division of the Internal Revenue Service. We affirm the conviction.

I. The Sufficiency of the Evidence

Murray attacks Judge Dawson's denial of his motion for acquittal at the close of all the evidence, claiming that the government did not adduce sufficient proof to permit the jury to find beyond a reasonable doubt that the essential element in the alleged increase in net worth — the purchase and remodeling of a house in New Rochelle, New York, for a total of approximately $32,000 — was not explained by the loan claimed to have been made by John Lamb. Murray does not attack the government's marshalling of evidence in other respects, and we see no reason to raise any other question as to its sufficiency.

The evidence supports the inference that Murray's gambling operations in 1952 and 1953 were "capable of producing much more income than was reported and in a quantity sufficient to account for the net worth increases." Holland v. United States, 348 U.S. 121, 138, 75 S. Ct. 127, 137, 99 L.Ed. 150 (1954). And no attack is made upon the proposition that if the $32,000 expenditure was made out of income during the two tax years under consideration the statute was violated. Thus the question before us is whether the government satisfied its burden of producing sufficient evidence for the jury to find beyond a reasonable doubt, as Judge Dawson properly charged, "that the expenditure was not financed by a loan from John Lamb." We hold that on this question "taking the evidence in the view most favorable to the government, there is substantial evidence to support the verdict." United States v. Tutino, 269 F.2d 488, 490, (2 Cir. 1959).

The government's disproof of Murray's claim that the New Rochelle house was purchased and remodeled with funds lent him by John Lamb consisted largely of testimony tending to show that at the time of Lamb's death in 1955 and prior thereto he was in such financial straits that it was highly unlikely that during the period in question he had the resources to lend anyone $32,000. Murray, in his last statement to the Internal Revenue Service, had said that he had paid off his debt to Lamb in 1954 or 1955; the government's evidence as to Lamb's financial condition also supported an inference that during those years Lamb had not received such repayment.

The government adduced testimony that John Lamb, who was a member of Father Divine's Mission in Harlem, lived in a Mission residence for a number of months prior to his death. Sunshine Bright, a housekeeper for the Mission, testified that on a number of occasions Lamb's checks in payment of his rent of four dollars a week were returned because of insufficient funds; she further testified that Lamb had been dispossessed from his real estate office for nonpayment of rent. A friend of Lamb's, Rev. William Aaron, testified that between 1953 and 1955 he had on several occasions lent Lamb small amounts of money which had never been repaid, and that during the same period, while Lamb was living in Lamb's office, he had without payment provided Lamb with food and a blanket. In addition, there was evidence that on his entry into Harlem Hospital in 1955 Lamb had said that he had no income and no bank account. The only significant evidence that Lamb had any money was the statement of an Internal Revenue agent that Lamb's account at the Manufacturers Trust Company contained an average balance of five or six hundred dollars, but this falls far short of any likelihood that Lamb ever had $32,000 to lend to Murray. Cf. United States v. Sclafani, 265 F.2d 408, 411-412 (2 Cir.), cert. denied 360 U.S. 918, 79 S.Ct. 1436, 3 L.Ed.2d 1534 (1959); United States v. Adonis, 221 F.2d 717, 720 (3 Cir.1955).

Murray did not take the stand at the trial, but the government read into evidence excerpts from several pretrial statements which he made to the Internal Revenue agents who investigated his case. His conflicting versions of the source of the money used to buy and repair the house further strengthen the government's case. On June 30, 1956 he stated that the transactions had been financed with accumulated savings; on January 3, 1957 he said that his savings had been supplemented with a loan of $12,000 from gambling friends whom he would not identify; on April 23, 1958 he said that $13,000 to $15,000 had come from Lamb; finally on May 28, 1958 he claimed — as did his counsel at trial — that the entire expenditure of $32,000 was financed by a loan of that amount from Lamb. There was no documentary evidence of such a loan.

Murray supported his defense with the testimony of the broker handling the sale of the house that at the closing Lamb had been present and had $20,000 to $22,000 in cash with him which he turned over to the seller; the broker also testified, without objection from the government, that later he had heard that Murray had borrowed the money from Lamb. Seymour Waterman, in whose name title to the house was taken and who was president of the holding company (wholly owned by Murray) to which it was subsequently transferred, also testified, again without objection, that Murray had told him that he was going to borrow money from Lamb to finance the house. This, together with the testimony of Mabel Hope to be considered below, constituted Murray's defense. We hold that there was ample basis for the jury's rejection of the defendant's explanation.

II. Objections to the Admissibility of Evidence

A. Testimony of Mabel Hope — To bolster its contention that the New Rochelle house had been financed by John Lamb, the defense called a Mrs. Mabel Hope, who testified that she had "followed" the Father Divine Mission, knew "Brother" Lamb well, and shortly after 1940 had borrowed $2,000 from him without any documents, to buy a house. She further stated that Lamb had told her "that Murray was a very nice fellow and he felt if sic he was his own son, and * * * he would help him in something. He said he would help him to do some kind of business. That is as much as he told me." This, together with Mrs. Hope's opinion that Lamb was "a wealthy man," does not, as we have indicated, detract materially from the substantiality of the evidence supporting the verdict, especially in the light of the fact that Mrs. Hope did not state when it was that Lamb professed his disposition to aid Murray.

More specific attack is made upon the refusal of Judge Dawson to allow Mrs. Hope to answer defense counsel's question, "Did he indicate that he ever lent Ed Murray money?" We agree with Judge Dawson that any answer to this question would have been inadmissible hearsay. Obviously appellant's contention that this testimony should have been allowed because certain of the government's evidence was allegedly hearsay as well is unpersuasive. Nor do we see any force in the argument that Mrs. Hope's testimony should have been admitted under the hearsay exception relating to statements reflecting the state of mind of the declarant, United States v. Annunziato, 293 F.2d 373, 378 (2 Cir. 1961), cert. den. 82 S.Ct. 240; 6 Wigmore, Evidence §§ 1725-31 (3d Ed. 1959). Clearly a statement by Lamb that he had on prior occasions lent money to the defendant, or even a statement that on this occasion he had lent him the $32,000 in question (the time reference of the question to Mrs. Hope being unclear) would tend primarily to show not Lamb's intention or state of mind toward Murray as he spoke but whether or not a loan had actually been made. Thus the out-of-court statement was offered for the forbidden purpose of proving the truth of its contents, and does not come within this or any other exception to the hearsay rule. Shepard v. United States, 290 U.S. 96, 54 S.Ct. 22, 78 L.Ed. 196 (1933); McCormick, Evidence, § 271 (1954).

B. Testimony of Lillian Smith — Lillian Smith, who was called by the government, testified on a variety of matters. She was secretary-treasurer of the holding company which held nominal title in the New Rochelle house, but her testimony about the payment at the closing of the sale (at which she was present) was totally inconclusive. She further testified that, "a few months before" the...