United States v. Woodner

• Decision Date: 28 May 1963
• Docket Number: No. 27833,27834.,27833
• Citation: 317 F.2d 649
• Parties: UNITED STATES of America, Appellee, v. Ian WOODNER, Appellant.
• Court: U.S. Court of Appeals — Second Circuit

317 F.2d 649 (1963)

UNITED STATES of America, Appellee, v. Ian WOODNER, Appellant.

Nos. 27833, 27834.

United States Court of Appeals Second Circuit.

Argued March 12, 1963.

Decided May 28, 1963.

Samuel Gottlieb, Louis Bender, New York City (Harry Giesow and Gainsburg, Gottlieb, Levitan & Cole, New York City on the brief) for appellant; Lloyd A. Hale, New York City, of counsel.

Sheldon H. Elsen, Asst. U. S. Atty., So. Dist. of New York (Robert M. Morgenthau, U. S. Atty., and Charles A. Stillman and Arnold N. Enker, Asst. U. S. Attys., on the brief) for appellee.

Before MOORE, FRIENDLY and SMITH, Circuit Judges.

J. JOSEPH SMITH, Circuit Judge.

Appellant was charged in the United States District Court for the Southern District of New York in a one-count indictment and a three-count indictment consolidated for trial, with wilful attempt to evade personal income taxes for the years 1950, 1951, 1952 and 1953, in violation of § 145(b), Internal Revenue Code of 1939. On a first trial, Judge Palmieri presiding, the jury failed to agree; on a second trial, Judge Palmieri again presiding, the jury found Woodner guilty on the counts involving taxes for the years 1952 and 1953 and failed to agree on the other counts. Appellant questions the sufficiency of the evidence to support a finding of intent to evade, the claimed failure of circumstantial evidence to exclude all reasonable doubt, the conduct of the trial, including the court's examination of witnesses and handling of jurors' requests for excuses, and inconsistency of verdict and disagreement on other counts. We find no error and affirm the judgment.

Essentially, the government's proof was directed to the handling of financial transactions of corporations controlled by Woodner which in two major respects was claimed to have resulted in income to Woodner personally, not reported on his returns for the years in question. These were payments of corporate funds for the hire of detectives investigating the activities of Woodner's ex-wife, with whom Woodner was having difficulties, involving according to Woodner a threat to control of the corporations, and for Woodner's personal expenses, and funds paid to one Jasen, Woodner's nominee, by a lending institution, consisting of a percentage of interest on construction loans paid by two Woodner corporations engaged in FHA guaranteed apartment projects at or near Chanute Air Force Base at Rantoul, Illinois. On the counts involving the detective fees the jury failed to agree. The counts on which the jury found Woodner guilty, and which are before us on this appeal, involve the Jasen payments.

The borrowing corporations, Chanute Gardens Corporation and Chanute Apartments Corporation, were wholly owned subsidiaries of Shipley Corporation, as were numerous other similar corporations. Woodner controlled Shipley Corporation and through it its subsidiaries, including Jonathan Woodner Company. In 1950 Woodner negotiated with Chemical Bank and Trust Company construction loans on the two Rantoul projects, with an agreement that the Chanute corporations should be charged 4% interest, of which the bank would retain 3½% and remit ½% to Jonathan Woodner Company or its nominee. One Jasen, Woodner's employee and friend, was designated by Woodner as recipient of the funds and received from the bank checks for the agreed ½%. Jasen cashed these checks and placed the proceeds at first in a briefcase kept in Woodner's living room, also used as an office by Woodner, later in a safe-deposit box to which only Jasen and Woodner had access. There the cash was mingled with other personal funds of Woodner and used to pay bills of Woodner and in some instances to make advances on Woodner's account to the Jonathan Woodner Company. Because of restrictions on salary payments while the projects were in some difficulty, Woodner's reported salary dropped from $30,000 each in 1950 and 1951 to $3,500 in 1952 and $5,000 in 1953.

Woodner's principal argument seems to be that because of the size of his operations and the large amounts of money necessarily handled in carrying them out, he could not conceivably have intended to cheat the government on relatively minor amounts such as were involved in the taxes on the so-called kickbacks of ½% in the two years for which he was convicted. That argument, however, was for the jury, which was surely entitled to reject it in the face of the quite numerous and quite usual indicia of fraud in the handling of the ½% payments. The use of a nominee, the conversion to cash, lack of usual records, commingling of funds, and personal use, not only support the inference that the funds were so within Woodner's control and disposition as to constitute income to him personally, but also the inference that the intent of the scheme was to conceal the receipt of the personal income in order to evade the tax due thereon.

He also claims that the cash was a reserve for emergency corporate expenses that might arise, either through scarcity of building materials or due to harassing litigation brought by the ex-Mrs. Woodner. But the small size of the amounts in question makes the reserve far better suited to meeting personal expenses than the contingencies that might befall a sizeable corporate complex. We have carefully considered the voluminous record before us, and conclude that, taking the view of the evidence most favorable to the government, there is ample evidence to support the verdict. United States v. Robertson, 298 F.2d 739 (2 Cir. 1962); United States v. Tutino, 269 F.2d 488 (2 Cir. 1959); United States v. Brown, 236 F.2d 403 (2 Cir. 1956).

Defendant also complains of the use of many items of circumstantial evidence against him. But the settled rule in this Circuit is that circumstantial evidence is not "probatively inferior to direct evidence." United States v. Brown, supra, 236 F.2d at 405. Thus, it may be weighed by the jury in the same way as direct evidence and need not exclude all other reasonable hypotheses than that of guilt to be given...