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United States v. Schwartz

decided: November 27, 1963.

UNITED STATES OF AMERICA
v.
MILTON H. L. SCHWARTZ, APPELLANT.



Author: Ganey

Before MARIS, KALODNER and GANEY, Circuit Judges.

GANEY, Circuit Judge.

The defendant-appellant was indicted on November 8, 1960, for income tax evasion for the years 1954, 1955 and 1956. The indictment is in three counts, each covering one of the three years. The substance of the counts is that the appellant had wilfully attempted to defeat the payment of a large part of the income tax due and owing by him and his wife by reporting certain income received by him during the years involved as capital gains instead of as ordinary income, in violation of § 7201 of the Internal Revenue Code of 1954, 26 U.S.C.A. § 7201. The jury disagreed as to the first count, but found him guilty on the other two. His post-trial motions for judgments of acquittal and for a new trial were denied,*fn1 and sentence was imposed by the trial court.

His first claim on appeal is that the trial court erred in denying his motion for judgment of acquittal, since there was insufficient evidence to submit to the jury that defendant had wilfully evaded the payment of income taxes. We think there was sufficient evidence of a consistent pattern of his understating income from which the jury was reasonably justified in finding him guilty under the counts of the indictment. See Holland v. United States, 348 U.S. 121, 75 S. Ct. 127, 99 L. Ed. 731 (1954); United States v. Moran, 236 F.2d 361 (C.A. 2, 1956). The trial court did not err in denying his motion for judgment of acquittal.

In support of his contention that the trial court abused its discretion in denying his motion for a new trial, defendant vigorously protests the remarks made by the prosecuting attorney regarding the reason for the discharge of one Saul E. Silberstein from the Internal Revenue Service. He maintains that these remarks were so inflammatory and prejudicial as to require the granting of a new trial.

Silberstein had been an employee of the Internal Revenue Service from 1942 to 1959. His deposition had been taken to show that defendant's treating of certain items of income as capital gain in his income tax returns was not done for the purpose of evading a larger payment of income taxes. At the time of trial, because of his illness, he was not available as a witness. The trial court permitted parts of his deposition to be read to the jury. The direct examination of the deposition reveals that Silberstein had examined appellant's returns for the years 1953 to 1956 and found no evidence of evasion. A portion of the deposition on cross-examination, which was also read to the jury, is as follows:

"Q. And what were the circumstances of your leaving the Treasury Department?

"A. I was removed from the service.

"Q. And for what reason?

"A. Immoral conduct.

"Q. And what did that immoral conduct consist of?

"A. Falling in love with a woman.

"Q. Were you married at the time?

"A. I was; and allow me to say, and while you are bringing this up, there were several charges of immoral conduct at the same time. One individual received a raise and one got a ...


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