United States v. White

• Decision Date: 10 October 1969
• Docket Number: Dockets 33446,133,33447.,No. 132,132
• Citation: 417 F.2d 89
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Francis D. WHITE and Gertrude W. White, Defendants-Appellants.
• Court: U.S. Court of Appeals — Second Circuit

417 F.2d 89 (1969)

UNITED STATES of America, Plaintiff-Appellee, v. Francis D. WHITE and Gertrude W. White, Defendants-Appellants.

Nos. 132, 133, Dockets 33446, 33447.

United States Court of Appeals Second Circuit.

Argued September 16, 1969.

Decided October 10, 1969.

Charles K. Rice, Buffalo, N. Y. (Albert R. Mugel, Buffalo, N. Y., and J. F. Henry DeLange, Lockport, N. Y., on the brief), for defendants-appellants.

Richard B. Buhrman, Atty., Dept. of Justice, Washington, D. C. (Johnnie M. Walters, Asst. Atty. Gen., Dept. of Justice, and Joseph M. Howard, Atty., Dept. of Justice, Washington, D. C., on the brief), for plaintiff-appellee.

Before MOORE, HAYS and ANDERSON, Circuit Judges.

MOORE, Circuit Judge:

I.

The primary point urged by appellants upon this appeal relates to the voluntariness with which they produced, during the investigation of their affairs by a Special Agent of the Internal Revenue Service Intelligence Division, the great bulk of the evidence used against them at trial. During the investigative sessions at which the incriminating evidence came out, appellants were not told that a possibility then existed of criminal prosecution for tax evasion. The Special Agent admonished Francis White (referred to as "Francis")¹ that he was not required to answer any questions or turn over any personal records, but did not state specifically that anything he said might be used against him in a criminal prosecution. He was not advised of his right to counsel, nor was he advised that counsel would be furnished him in the event he qualified as an indigent. Thus appellant argues that he was not given the full Miranda warnings at the point when investigation of his affairs became essentially accusatory, see Escobedo v. State of Illinois, 378 U.S. 478, 84 S.Ct. 1758, 12 L.Ed.2d 977 (1964), and that his Fourth and Fifth Amendment rights were therefore abridged by the admission of evidence garnered through the investigative interviews.

The case presented by appellants does not differ in any essential from the situation confronting this Court in United States v. Mackiewicz, 401 F.2d 219 (2d Cir. 1968) and in United States v. Squeri, 398 F.2d 785 (2d Cir. 1968). In Mackiewicz we held that questioning by a Special Agent under circumstances almost identical to these here presented did not create an atmosphere sufficiently coercive to generate the necessity for the full range of warnings contemplated by the Miranda decision for essentially "custodial" interrogations. Francis was interviewed by the Special Agent at his own place of business, in the presence of his accountant, and was interviewed once more in the office of his accountant, who was again present throughout the interview. Under these circumstances, Francis's confrontations with the Service's Intelligence Division was not inherently coercive, and he and his wife were not entitled to suppress evidence against them garnered from that confrontation on the basis of Miranda. In accord with this view are decisions in seven other Circuits: Morgan v. United States, 377 F.2d 507 (1st Cir. 1967); United States v. Mancuso, 378 F.2d 612 (4th Cir. 1967); Agoranos v. United States, 409 F.2d 833 (5th Cir. 1969); United States v. Maius, 378 F.2d 716 (6th Cir. 1967); Cohen v. United States, 405 F.2d 34 (8th Cir. 1969); Feichtmeir v. United States, 389 F.2d 498 (9th Cir. 1968); and Hensley v. United States, 406 F.2d 481 (10th Cir. 1969). Contra, United States v. Dickerson, 413 F.2d 1111 (7th Cir., July 28, 1969).

Aside from the Miranda-based decisions, appellant asserts the novel proposition that the government's right to introduce evidence obtained from Francis is even more narrowly circumscribed by the requirements for voluntariness of "confessions" under 18 U.S.C. § 3501. That section lists five factors which a Judge should consider in his determination of voluntariness before submission of the evidence to the jury. From this appellant argues that disclosures and evidence sufficiently voluntary to be admissible under Miranda nevertheless may be involuntary as a matter of law under the Omnibus Crime Control and Safe Streets Act of 1968.

That contention does not require extended discussion. It is sufficient to note that neither the language of § 3501 nor its legislative history indicate that Congress intended to expand the protection of potential criminal defendants beyond the scope of protection established by the Miranda line of cases.

II.

Special Agent Martin, whose investigation in 1962 formed the basis of the prosecution against the Whites in this case, testified at trial concerning his investigation. Martin also had testified for the Government before the grand jury in 1965 but no record of his grand jury testimony was kept. However, minutes were kept and a record made of the testimony of all defense witnesses at the grand jury hearing.

Appellant argues, on authority of our decision in United States v. Youngblood, 379 F.2d 365 (2d Cir. 1967), that a defendant in a criminal case is entitled to a transcript of all testimony against him given before the grand jury. We noted in Youngblood that transcripts of testimony at grand jury hearings in this Circuit are now regularly kept and filed away, but that this "may not always have been the practice, and where it has not been we do not imply that a defendant is entitled as of right to minutes that do not exist." 379 F.2d at 370, fn. 4.

Had this failure occurred subsequent to our decision in Youngblood, supra, very possibly a different question would have been presented. However, Youngblood was given prospective application only, and the indictment against the Whites was returned two years prior to that decision. Minutes of Agent Martin's testimony were not made at the grand jury hearing in 1965. Since they did not exist at the date of decision in Youngblood, his trial testimony cannot now be held improperly admitted on that basis.

III.

The Government adduced evidence at trial showing that Francis maintained a separate personal bank account in a neighboring town in which he deposited large amounts of currency from unidentified sources. The evidence was offered to show the wilfulness of his conduct in seeking to conceal his financial activities or mislead others who had an interest in his financial affairs. Spies v. United States, 317 U.S. 492, 499, 63 S.Ct. 364, 87 L.Ed. 418 (1943). White's accountant, who prepared his tax returns, was unaware of the separate account and the large cash deposits. Appellant contends that this evidence was prejudicial and improperly admitted, suggesting that the jury may have erroneously inferred that these cash deposits represented still other unreported income, unrelated to the specific items upon which the evasion indictments were based.

In cases involving income tax evasion, evidence purporting to show the wilfulness of misconduct through extensive dealings in cash is properly admissible. E. g., Gariepy v. United States, 189 F.2d 459, 463 (6th Cir. 1951); Schuermann v. United States, 174 F.2d 397, 398 (8th Cir. 1949). The Government's proof showed that a large number of checks were cashed by the Whites throughout the period covered by the indictment instead of being deposited to the proper business accounts. Cash deposits in the separate bank account thus had a substantial tendency to prove their intent in converting unreported income received in check form into cash. The value of this evidence as proof of a material element in the case overcame whatever prejudice might have operated against appellants through improper inferences made by the jury on the evidence, and the evidence was therefore properly admitted.

IV.

Several items charged in the indictment as unreported income were in the form of checks from a corporation controlled by Francis. The Government introduced evidence that those payments were entered on the paying corporation's books as expense items. This evidence was offered for the purpose of showing that the payments were not repayments of loans or other items which would not represent reportable income to the Whites. Appellants argue that this evidence was improperly admitted because it may have raised the inference of misdealing by the corporations, which was not charged in the indictment. However, as was the case with the cash deposits, any prejudicial inference was overbalanced by the positive value of the evidence in showing a material element of the case; i. e., the income nature of the Whites' receipts, and its admission was not reversible error.

V.

The indictment brought by the Government against the Whites charged each defendant with (a) four counts (for the years 1958, 1959, 1960, 1961) of wilful attempts to evade or defeat income taxation under 26 U.S.C. § 7201, and (b) four separate counts (for the same years) under 26 U.S.C. § 7206(1) for making and subscribing documents which contain "a written declaration that it is made under the penalties of perjury, and which he the taxpayer does not believe to be true and correct as to every material matter." The documents were signed joint tax returns for the four years of the indictment period. The prosecutions under §...