United States v. Procario
| Decision Date | 23 February 1966 |
| Docket Number | No. 164,Docket 29843.,164 |
| Citation | 356 F.2d 614 |
| Parties | UNITED STATES of America, Appellee, v. Angelo PROCARIO, Appellant. |
| Court | U.S. Court of Appeals — Second Circuit |
Peter K. Leisure, Asst. U. S. Atty. for Southern Dist. of New York (Robert M. Morgenthau, U. S. Atty. for Southern Dist. of New York, Bernard W. Nussbaum, Robert G. Morvillo, Otto G. Obermaier and John E. Sprizzo, Asst. U. S. Attys., on the brief), for appellee.
Louis Bender and Lloyd A. Hale, New York City, for appellant.
Before LUMBARD, Chief Judge, and FRIENDLY and SMITH, Circuit Judges.
Dr. Angelo Procario appeals from a conviction, on a jury verdict in the United States District Court for the Southern District of New York, Edmund L. Palmieri, Judge, on three counts of attempting to evade federal income tax, 26 U.S.C. § 7201, in 1956, 1957 and 1958. He was sentenced to imprisonment for a year and a day on each count, running concurrently, and to a $3,000 fine on each count, as well as one-third costs. We find no error and affirm the judgment.
Principally at issue was appellant's professional income for 1956-1958 and the extent to which apparent income was reduced by payments to assisting doctors. The government relied for proof partly on direct evidence from patients and their cancelled checks, and partly on the bank deposit method, modified so as to yield the rest of appellant's professional income. This resulted in computation on income from three sources: first, 249 checks deposited, from patients or medical services on account of patients; second, 82 checks not deposited; third, deposits not specifically identified as representing other income, yet inferentially income. The following table reflects the government's calculations:
1956 1957 1958
1) Total deposits $197,290.93 $140,421.37 $160,058.47
2) Outside receipts -173,903.77 -114,362.71 -137,158.80
___________ ___________ ___________
3) 1 less 2 $ 23,387.16 $ 26,058.66 $ 22,899.67
4) 249 checks - 7,338.00 - 13,203.78 - 11,493.50
___________ ___________ ___________
5) Net — 420
unidentified
deposits 16,049.16 12,854.88 11,406.17
6) 82 checks not
deposited 8,944.50 12,227.00 14,123.66
__________ _________ _________
7) 4, 5 and 6 —
total professional
receipts $ 32,331.66 $ 38,335.66 $ 37,023.33
8) Reported receipts - 21,260.00 - 22,055.00 - 21,964.10
___________ ___________ ___________
9) Reference fees
paid - 720.00 - 1,195.00 - 1,200.00
___________ ___________ ___________
10) Total unreported $ 10,351.66 $ 15,085.66 $ 13,859.23
11) Defendant's
claimed total
assisting and
reference fees
paid $ 12,102.00 $ 16,375.00 $ 15,269.00
Item 9 above represents reference fees which the government conceded were paid to doctors.
Six months prior to the filing of the indictment, which came within a few days of the time when Count One (1956) would have become time-barred, appellant's counsel sent a letter to the government alleging that "many thousands of dollars" received by appellant from patients were turned over to named assisting doctors; appellant included with his letter affidavits from ten doctors, which, however, did not specify the amounts so paid. Counsel for appellant, in his letter to the Attorney General dated December 3, 1962 stated as follows:
No further information as to specific amounts was furnished. The government did not act on the letter and affidavits until after the indictment was filed. At the trial appellant introduced doctors and their records to establish that the alleged unreported income was paid over to other doctors.
Appellant's first claim is grounded on Holland v. United States, 348 U.S. 121, 75 S.Ct. 127, 99 L.Ed. 150 (1954), requiring that where the government rests its case on circumstantial evidence under the net worth method of computation, it must follow up "leads" furnished by a taxpayer or the trial judge may take the lead as true and direct an acquittal on that basis. Appellant's argument is that the same requirements should apply in a case based on the bank deposit method, and that the District Court should have acquitted appellant or at least charged the jury that the failure to follow up leads should be construed against the government. Appellant claims that the bank deposit method sufficiently resembles the net worth computation in its speculative character that Holland should apply.
The lead, of course, was the letter and affidavits. The District Court concluded that Holland would apply to a bank deposit case, but that in view of the late date the lead was supplied, "on the eve of indictment," no judgment of acquittal was required.
The government contends that Holland should not apply to the use of the bank deposit method, since many of the dangers of the net worth method alluded to in Holland are non-existent in this case. We find that we need not determine the necessity for applying the "leads" doctrine to a bank deposit method case, however, for we agree with Judge Palmieri that the lateness and vagueness of the leads here supplied, coupled with counsel's unfulfilled promise to provide more definite information, justified the government's failure to follow them up more thoroughly prior to indictment.
Appellant argues that it was error to go to the jury in the light of the unrebutted evidence offered by the defense of assisting and reference fees paid greater than alleged unreported income. Appellant claims this evidence was unrebutted and relies on Dyer v. MacDougall, 201 F.2d 265 (2 Cir. 1952). The government claims that it does not have the burden of proof as to the issue presented by this defense, citing United States v. Bender, 218 F.2d 869 (7 Cir.), cert. den. 349 U.S. 920, 75...
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