United States v. Schechter, 72-2822.

• Decision Date: 20 April 1973
• Docket Number: No. 72-2822.,72-2822.
• Citation: 475 F.2d 1099
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. M. Murray SCHECHTER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

475 F.2d 1099 (1973)

UNITED STATES of America, Plaintiff-Appellee, v. M. Murray SCHECHTER, Defendant-Appellant.

No. 72-2822.

United States Court of Appeals, Fifth Circuit.

March 23, 1973.

Rehearing Denied April 20, 1973.

E. David Rosen, Richard M. Gale, Miami, Fla., for defendant-appellant.

Robert W. Rust, U. S. Atty., Charles O. Farrar, Asst. U. S. Atty., Miami, Fla., Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Joseph M. Jabar, Attys., Tax Div., Dept. of Justice, Washington, D. C., for plaintiff-appellee.

Before BELL and THORNBERRY, Circuit Judges, and GROOMS, District Judge.

GROOMS, District Judge:

This appeal is to review a judgment of conviction by the court after a nonjury trial on a two count indictment which charged appellant with knowingly and wilfully evading and defeating his income tax for the years 1967 and 1968 in violation of 26 U.S.C. § 7201.¹

Appellant insists that the evidence was insufficient to sustain the conviction, and that the court erred in two particulars in its rulings upon evidence. Appellee upholds the sufficiency of the evidence, and the correctness of the rulings.

Appellant, a physician, for the year 1967 reported gross receipts of $203,496.00 and taxable income of $165,100.00. For 1968 gross receipts of $213,633.00 and taxable income of $167,162.00. He omitted taxable income for the year 1967 in the amount of $21,958.15 and for 1968 in the amount of $43,910.74. An additional tax liability of $14,054.00 for 1967 and $31,953.00 for 1968 resulted from these omissions of income.

Appellant's secretary kept a daily record showing: (1) "charges," (2) "cash," and (3) "Rec'd on account." All the entries on the daily record book were correctly entered. Generally at the end of the month appellant would personally transpose the totals of each day's business to monthly summary sheets. Discrepancies arose when the totaled figures in the daybooks were transcribed to the summary sheets. These discrepancies were of two types. One type was the transposition of an understated number to the summary sheets occasioned by the omission of the initial digit or some other digit in the number. The other type was "underfooting," or the adding of a column of figures and entering an amount for a total which was less than a true addition of that column of figures.

For the year 1967 there were twenty transposition discrepancies in the amount of $14,813.40 and eleven underfooting discrepancies in the amount of $7,144.76. All of the former and all but one of the latter, amounting to forty cents, were in favor of appellant.

For the year 1968 there were twenty-five transposition discrepancies in the amount of $32,265.94 and ten underfooting discrepancies in the amount of $11,644.80. All but one of the former, amounting to $2.76, and all of the latter were in appellant's favor.

When the time arrived for the preparation of his return appellant took his monthly and annual summaries and his daily record books to an accountant. He would sit next to the accountant and would read the figures from his recap sheets. The accountant would write the figures as they were called out to him on his own recap sheets, occasionally checking to see if they were the same figures as those appearing on appellant's sheets.

The books were made available to the accountant, but he never checked the figures other than totaling the amounts read to him to see if they were the same as the totals on appellant's summary sheets. This procedure was followed from 1957 forward. The accountant was not employed to audit appellant's books.

To counter the evidence as to the discrepancies in the particulars detailed, appellant offered evidence that the adding machine used by him was defective, and that appellant, who reported on a cash basis, made non-taxable errors of a similar nature when he transposed the totals in the daily charge columns to the charge columns on the monthly summary sheets for both years.

The adding machine appears to have been used for only a couple of months after it was found to be out of order and was then exchanged for a new machine.

There were seven discrepancies in the charge column summaries for 1967, fourteen for 1968, and with one day in each year entirely omitted.

The rule is now well established that in considering the sufficiency of the evidence this court does not determine whether it establishes guilt beyond a reasonable doubt, but only whether the evidence would permit the trier of fact to find the defendant guilty beyond a reasonable doubt, Gordon v. United States, 438 F.2d 858, 867 (5 Cir.)....