United States v. Shorter, Crim. No. 84-00421.

• Court: United States District Courts. United States District Court (Columbia)
• Writing for the Court: Plato Cacheris, Larry S. Gondelman, Hundley & Cacheris, Washington, D.C., for defense
• Citation: 608 F. Supp. 871
• Parties: UNITED STATES of America v. John A. SHORTER, Jr.
• Decision Date: 26 March 1985
• Docket Number: Crim. No. 84-00421.

608 F. Supp. 871

UNITED STATES of America
v.
John A. SHORTER, Jr.

Crim. No. 84-00421.

United States District Court, District of Columbia.

March 26, 1985.

608 F. Supp. 872

COPYRIGHT MATERIAL OMITTED

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Joseph E. diGenova, U.S. Atty., Carol E. Bruce, Darryl W. Jackson, Asst. U.S. Attys., Washington, D.C., for prosecution

Plato Cacheris, Larry S. Gondelman, Hundley & Cacheris, Washington, D.C., for defense.

OPINION

HAROLD H. GREENE, District Judge.

Defendant was indicted in one felony count of willful attempt to evade the payment of income taxes due for the years 1972 through 1983, in violation of 26 U.S.C. § 7201, and in six misdemeanor counts of willful failure to pay income tax for each of the years 1978 through 1983, in violation of 26 U.S.C. § 7203. Presently pending before the Court is defendant's motion to dismiss the tax evasion count. The motion claims (1) that defendant is being charged with acts which are barred by the statute of limitations, and (2) that this count is impermissibily duplicitous because it incorporates twelve separate offenses. The Court has carefully reviewed the grounds advanced by defendant, and it has concluded that the motion must be denied.

I

Statute of Limitations

The statute of limitations for tax evasion is six years. 26 U.S.C. § 6531.

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Since the indictment in this case was returned in 1984, it bars prosecution for offenses committed before 1978. However, the statute of limitations does not ipso facto rule out prosecution with respect to taxes owing prior to 1978, for the offense of tax evasion is not necessarily committed only in the year when the tax was due and payable. That is so because the existence of a tax deficiency is but one of the two essential elements of the crime, the other being an affirmative act of willful evasion. Sansone v. United States, 380 U.S. 343, 351, 85 S.Ct. 1004, 1010, 13 L.Ed.2d 882 (1965); Spies v. United States, 317 U.S. 492, 63 S.Ct. 364, 87 L.Ed. 418 (1943).¹ An act constituting evasion which occurs during the limitations period brings the prosecution within the statute of limitations even if the taxes being evaded were due and payable prior thereto. United States v. Trownsell, 367 F.2d 815 (7th Cir.1966); United States v. Mousley, 194 F.Supp. 119 (E.D.Pa.1961), aff'd without opinion, 311 F.2d 795 (3d Cir.1963); United States v. Sclafani, 126 F.Supp. 654 (E.D.N.Y.1954), aff'd on other grounds, 265 F.2d 408 (2d Cir.1959); see also, United States v. Malnik, 348 F.Supp. 1273 (S.D.Fla.1972), aff'd on other grounds, 489 F.2d 682 (5th Cir. 1974)

It follows that the indictment in this case is not subject to dismissal even with respect to the evasion of taxes due prior to 1978 if it is supported by proof of one or more affirmative acts of evasion committed by the defendant within the past six years if these acts relate to taxes due in earlier years.

The government claims that it will prove acts of evasion occurring within the limitations period which relate to the nonpayment of taxes during the years prior to that period.² It is clear that, on this

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basis, the statute of limitations as such³ is not a bar

II

Duplicity

More substantial is defendant's contention that the indictment is impermissibly duplicitous in that it charges twelve separate offenses — evasion of taxes due for twelve separate years — as a single offense.⁴ For purposes of analysis, this argument requires consideration of two questions: first, whether the defendant's alleged actions may legitimately be regarded as a single, continuous course of conduct and hence as a single offense, and second, whether the defendant would be prejudiced by his prosecution on a single-count basis.

A. Tax Evasion Charges

As a general matter, an indictment is not impermissibly duplicitous even though it alleges more than one offense in a single count if the offenses being charged bear such a relationship to one another that they constitute a continuing course of conduct. See, e.g., United States v. Mangieri, 694 F.2d 1270, 1282 (D.C.Cir. 1982); United States v. Robin, 693 F.2d 376 (5th Cir.1982); United States v. Berardi, 675 F.2d 894 (7th Cir.1982); United States v. Margiotta, 646 F.2d 729 (2d Cir. 1981); United States v. Alsobrook, 620 F.2d 139 (6th Cir.1980); United States v. Canas, 595 F.2d 73 (1st Cir.1979); United States v. Girard, 601 F.2d 69 (2d Cir.1979); United States v. Zeidman, 540 F.2d 314 (7th Cir.1976); United States v. Daley, 454 F.2d 505 (1st Cir.1972); United States v. Pavloski, 574 F.2d 933 (7th Cir.1968). That much is conceded by the defendant. However, he argues that, whatever may be true with respect to other types of offenses, this rule does not apply to the evasion of income taxes. That offense, it is said, is time-specific, that is, each offense is tied to a particular year,⁵ and the charging of tax evasion in a single count with respect to more than one year is therefore per se impermissibly duplicitous.

A number of decisions are cited in support of this contention; however, none of them is conclusive or even persuasive. Those decisions that involved construction of the Internal Revenue Code at all,⁶ by

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and large⁷ merely upheld grand jury decisions to charge evasion in as many counts as there were years;⁸ they do not stand for the opposite proposition: that an indictment which charges tax evasion for more than one year is impermissibly duplicitous. The cited decisions would buttress defendant's argument in this case only if the rule were that conduct which may be charged in several counts must be so charged or be subject to dismissal on duplicity grounds. But that is not the law. To the contrary, it is well established that two or more acts, each of which would constitute an offense standing alone and which therefore could be charged as separate counts of an indictment, may instead be charged in a single count if those acts could be characterized as part of a single, continuing scheme. United States v. Mangieri, supra, 694 F.2d at 1281-82; United States v. Robin, supra, 693 F.2d at 378; United States v. Elam, 678 F.2d 1234, 1250 (5th Cir.1982); United States v. Berardi, supra, 675 F.2d at 898; United States v. Margiotta, supra, 646 F.2d at 733; United States v. Alsobrook, supra, 620 F.2d at 142-43; United States v. Girard, supra, 601 F.2d at 72

The grand jury, presumably under the guidance of the prosecutor, may charge few or many counts depending upon a variety of factors, and, absent oppression or impermissible duplicity, the decision with respect thereto is within the realm of grand jury and prosecutorial discretion. United States v. Alsobrook, supra, 620 F.2d at 142; United States v. Berardi, supra, 675 F.2d at 898; United States v. Pavlovski, supra, 574 F.2d at 936; United States v. Margiotta, supra, 646 F.2d at 733.⁹

The few cases in which the issue of duplicity has been directly decided, or even discussed, in the context of income tax evasion support this conclusion. At least three courts have found it permissible to charge conspiracy to evade several years' taxes as one count. United States v. Baker, supra, 262 F.Supp. 657; Lott v. United States, supra, 309 F.2d 115; United States v. Haskell, supra, 327 F.2d 281. And in what is apparently the only decision to have considered directly the issue whether tax evasion itself could be charged in a single count covering more than one year's taxes, the court held this practice to be proper. United States v. England, 229 F.Supp. 493 (E.D.Ill.1964).¹⁰

For these reasons, the Court concludes that defendant's duplicity argument stands or falls not on the narrow basis of tax evasion law but on how it measures up

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against more general principles. These will now be considered.

B. Continuing Offense Principles

Case law suggests that two factors are critical to the determination whether particular conduct may be charged as a continuing offense in a single count: (1) the language and legislative history of the statute, and (2) the nature of the proscribed conduct. See United States v. UCO Oil Co., 546 F.2d 833 (9th Cir.1976).¹¹

Neither the language of the tax evasion statute nor its legislative history shed much light on the question whether it is proper to charge a continuing scheme to evade taxes for several years. The statute makes it a felony for any person to "willfully attempt in any manner to evade or defeat any tax imposed by this title or the payment thereof." The Supreme Court has recognized that this language defines a very broad spectrum of conduct, holding that

Congress did not define or limit the methods by which a willful attempt to defeat and evade might be accomplished and perhaps did not define lest its efforts to do so result in some unexpected limitation. Nor would we by definition constrict the scope of the Congressional provision that it may be accomplished `in any manner'. By way of illustration, and not by way of limitation, we would think affirmative willful attempt may be inferred from conduct such as keeping a double set of books, making false entries or alterations, or false invoices or documents, destruction of books or records, concealment of assets or covering up sources of income, handling of one's affairs to avoid making the records usual in transactions of the kind, and any conduct, the likely effect of which would be to mislead or to conceal.

Spies v. United States, supra, 317 U.S. at 499, 63 S.Ct. at 368. While this language is certainly not conclusive upon the question under consideration here, it does seem to contemplate with respect to this offense the kinds of acts which typically would be committed on a multi-year, continuing-course-of-conduct basis.¹²

Pointing toward the same conclusion is the other principal factor referred to by the UCO Oil Co. court — the nature of the conduct involved.¹³ Briefly stated, the government charges the following.¹⁴

Since at least 1973, the defendant, a...