them related to the purchase of goods and services benefitting the defendant, her son and her sister; that none of the officers of the corporation knew of these checks until the micro-films were submitted by Union National Bank after the defendant had left their employ; that the total of these duplicate numbered checks amounted to $ 34,363.37 for the calendar year 1975 and $ 26,751.13 for the calendar year 1976; and that the defendant did not declare or return these amounts in those years as income to her, but additionally had requested refunds in the amount of $ 137.00 for 1975 and the amount of $ 430.58 for 1976.
The prosecution in presenting the micro-film copies of the duplicate numbered checks divulged the mechanics used in the making and negotiation. So the prosecution gave me full knowledge of practically every one of the duplicate numbered checks as made, drawn and negotiated by the defendant. She had a pattern of activities when she was authorized to draw a business check. As for example, after first using a check number for a legitimate business purpose and putting a number on it, she would then place that duplicate number on another check payable for her own purpose. One such check from approximately 200 duplicate numbered checks was payable to Canadian Fur Company in the sum of $ 600.00. (Exhibit No. G1, March 18, 1975). Since none of this testimony was contradicted and presented no inconsistencies, I made conclusions and findings of fact as presented. However, I did not finalize my findings of fact and conclusions of law until I received all of the evidence in the case as a whole.
The defendant took the stand in her own defense and admitted that practically all of the duplicate numbered checks were made and negotiated by her, and that they were not included in the records of Micro-T, Inc., but she said nothing about the duplicate numbered checks missing in the checking account statements returned by Union National Bank during the two years in question. However, she denied any criminal involvement.
Her defense was two-fold: (1) that the checks were gifts from Wood for services which she rendered in attempting to verify the expense accounts of Kester in previous years; and (2) that she had not been paid for those services and was entitled to be paid for them just as an accountant or investigator would be paid, and that she "was not working for nothing."
I did not disregard the testimony of the defendant and the defendant's witnesses. I attempted to reconcile all of it with that presented by the prosecution, but particularly as it related to all the exhibits in the case.
All the findings of fact and conclusions of law in my Opinion of April 1st, 1982, found the defendant guilty beyond any reasonable doubt of violating the charges contained in the two counts of the indictment.
I and III
It is appropriate then that I discuss here only each of the defendant's present contentions as made in her instant motion. Of the defendant's five-point attack on the verdict, I group number 1 and number 3 contentions for discussion first: (1) that this court erred in making various findings of fact and conclusions of law; and (3) that this court erred in determining that various items of evidence resulted in taxable income to the defendant where there was no credible evidence tying her in with the transactions in question.
The defendant in her instant motion singled out about 10 duplicate numbered checks from the almost 200 duplicate numbered checks admitted as exhibits in evidence and charged that all showed no connection with her as the defendant. As relates to the named mail order houses, Columbia Music Treasures, Exhibit K; Electronics International, Exhibits N1 and N2; Madison House Gifts, Exhibit T; Nerisk Industries, Exhibits V1 and V2; New Process Company, Exhibits Z1 and Z2; Spencer Gifts, Exhibit AA, and Sunset House, Exhibits B1, B2 and B3, this is correct but these are minimal in number and amount.
As for the rest, I take these separately as relates to the defendant's charges that "there was no identification of her in dealing with the company involved", and "there was no credible evidence tying her in with the transactions in question". To prove this contention as baseless, I need discuss only a few of the exhibits contained in this pointed-out group. First, Exhibit R was a duplicate numbered check for the amount of $ 4,332.00, made payable to Joseph Horne Music Center. The prosecution produced Walter Jacobs, a salesman for the Center. He testified that he personally sold four organs to the defendant Anderson, the last of which was paid for by Exhibit R on May 10, 1976, and the organ was then delivered to the defendant at her apartment in the Carlton House. (Tr. pages 136.10 to 136.12). This was not denied by the defendant and no evidence was presented by the defendant to contradict the testimony of salesman Jacobs.
In the matter of Exhibits S1 and S2, these matched up with the Klingensmith Hardware invoices, and these exhibits were made and negotiated on duplicate numbered checks by the defendant. The General Manager of Klingensmith, Trevor Young, testified that he sold the defendant a freezer for the purchase price of $ 242.72, and that this was paid for by a Micro-T check by the defendant, and that this freezer was delivered to the defendant's apartment at the Carlton House. (Tr. pages 136.47 to 136.50). This was direct testimony for which no defense was offered by the defendant.
Thus, she is incorrect in her charge that the court erred in determining from the evidence in this case that this testimony and the identified exhibits were not sufficiently connected with her; and that the court erred in its conclusions that these items resulted in taxable income to the defendant from all of the evidence as a whole.
The statute by which the defendant was indicted and charged and found guilty states:
"Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony ..." (7201, Internal Revenue Code).
Our courts have held that it is not necessary to prove every item charged in the indictment, but only that a substantial amount was withheld, and for which tax was evaded. Pursuant to the law, it will be seen, as I stated in my opinion, that there were approximately 70 groups of checks offered into evidence. To comply with the court's principle in this regard, I used approximately 10 of the more substantial amounts which were not returned to the Internal Revenue Service by the defendant as reflected in the above exhibits.
In my Opinion I stated that it was only after considering all of the evidence as a whole that I found "more than sufficient evidence and hold beyond a reasonable doubt that the defendant's failure to report those thousands of dollars of income in 1975 and 1976 was willful, knowing and intentional ..." (Opinion, page 19). I also stated, "... the evidence proved that substantial amounts of those charges in the indictment were withheld from the returns in those years" and "the government was not obliged to prove the exact amount of tax evaded in each of said years". (Opinion, page 18). I stated, "The evidence is uncontradicted that practically all of the duplicate checks were self-benefitting to the defendant, or her son or sister". (Opinion, page 16). I also stated that the existence of the first element, "a tax deficiency was proved beyond a reasonable doubt by the government by overwhelming evidence of the accumulation of thousands of dollars of undeclared income to the defendant as a result of the duplicate numbered corporate checks which she made and negotiated for her benefit and which she admitted taking to the extent of thousands of Micro-T funds ..." (Opinion, pages 14 and 15).
I remarked that it was unnecessary to detail each of these checks in order that the government might sustain its burden of proof and for that reason I said only a few of the payees of the cancelled duplicate numbered checks, which had been admitted into evidence, were set forth as an example. Before I enumerated a partial list of checks I said,
"Set forth here are a few of the payees of these cancelled duplicate checks, which the defendant admitted were for her benefit, or that of her family. These show a factual situation as a foundation upon which a determination must depend. While the checks pertain to the interest of the defendant and as some of them bear the defendant's name, and while the evidence connects her personal interest in the bulk of them, ... it is sufficient to detail only a few to exemplify the general character of all payees, amounts and purchases." (Footnote omitted).
I considered all the evidence as a whole and stated: "After considering all of the evidence as a whole, I find more than sufficient evidence and hold beyond a reasonable doubt that the defendant's failure to report those thousands of dollars of income in 1975 and 1976 was willful, knowing and intentional ..." (Opinion, page 19).
However, since the defendant did infer that I did not consider the evidence in the case as a whole, contrary to my statement to that effect, I now show much of the testimony which I did not detail, but which I did consider, for the purpose of determining credibility and persuasiveness, and not to negate the defendant's assertion that the government did not prove the defendant's connection with any of the evidence. The duplicate numbered checks were not used as a basis for establishing the defendant's tax liability or to establish the tax evasion violation. An avalanche of other duplicate numbered checks were admitted in evidence and discussed in my findings of fact, conclusions of law and Opinion of April 1st, 1982 as this evidence established the defendant's covert use of thousands of dollars of the corporate funds which she diverted to her own personal use.
Since there were almost 200 checks, all duplicate numbered corporate checks, issued and the vast bulk of which were established as being made and negotiated by the defendant and channeled into her own use and benefit, it was not incumbent upon this court in its findings of fact and conclusions of law and Opinion to detail each of them, or all of them, since the opinion was already voluminous and the economy of judicial time required more judicious application and preparation of the whole opinion.
A sufficient number of these duplicate numbered Micro-T checks were specifically set forth in the Opinion of this court upon which the court had ample basis under the law to find that the defendant had failed to make returns for substantial amounts of income for tax purposes in both years, 1975 and 1976, as charged in the two counts of the indictment.
Since the defendant has seen fit to bring in other matters in an effort to show a lack of application by the court in determining the nexus between the duplicate numbered checks and the defendant, and of the amounts of money involved as would provide any possible breach of the Internal Revenue Service statute, I deem it appropriate to add additional exhibits and evidence upon which I relied from all of the evidence in this case as a whole to arrive at a determination of the defendant's guilt or innocence of the charges made in the indictment.
One example is Government Exhibit B2, a corporate duplicate numbered check in the amount of $ 750.00, payable to Ruth M. Anderson and endorsed over by the defendant to Ralph's Discount City. Another example, Exhibit B1 is a Micro-T check in the amount of $ 211.88, payable to cash and dated December 11, 1975, with the endorsement "Payable to Ralph's Ruth M. Anderson".
As relates to Exhibits E1 through E6, payable to Associates Finance Services in variable amounts totalling $ 896.21, commencing with April 8, 1975 through October 16, 1975, the defendant contends that she borrowed this money from the Associates for meeting the payroll by Kester's authority on behalf of Micro-T, Inc. (Tr. page 537). It is inconceivable that this company, being the large business that it was, would be short of funds and forced to borrow small amounts of money through the personal credit of its bookkeeper. However, the defendant's assertions were denied by all of the Micro-T officers in rebuttal and the credibility is weightier without doubt on the side of these officers.
It will be seen that all 20 duplicate numbered checks in Exhibit F1 are endorsed by the payee, Ruth M. Anderson, and total $ 3,538.37. Before arriving at my final determination, I had searched the transcript in an effort to find a defense to these checks, but none was presented by the defendant. Also, it will be seen that one of these checks was endorsed by Ruth M. Anderson to the order of David Weis, of whom this court takes judicial notice as being a discount jeweler on Smithfield Street in the Mellon Square park area, as well as being located in other places in the city. Thus, the weight of the testimony does not stand in favor of the defendant here in any way and points without a doubt to the illicit use of these duplicate numbered checks by the defendant.
Exhibit F2 is a series of 22 duplicate numbered checks totalling $ 2,650.00, made payable to Ruth M. Anderson. It will be seen again as with Exhibit F1 that these duplicate numbered checks in Exhibit F2 were all cashed by Ruth M. Anderson. And especially it will be seen that 7 of these duplicate numbered checks were endorsed to the Carlton House for a total of $ 970.00.
Exhibit I1 is of a similar character and is a group of duplicate numbered checks which require no details. They were made out for the year 1975, payable to cash and all of which, with one exception were endorsed and the signature identified as Ruth M. Anderson for a total of $ 896.94. Exhibit I2 is a similar group of duplicate numbered checks for the year 1976, made payable to cash and endorsed by Ruth M. Anderson for a total of $ 620.00.
Exhibit Y1 comprises a group of duplicate numbered checks for the year 1975, payable to Charles J. Nebel, the defendant's son, and endorsed by him in the sum of $ 4,705.00, with no business connection with Micro-T, Inc. There was evidence by the defendant that he was repaying some money, but whether it was for the home improvement
or for the series of checks in Exhibit Y1, was not made clear. The important thing here is that the defendant made these duplicate numbered checks payable to her son.
Exhibit Y2 is a similar group of duplicate numbered checks, totalling $ 8,100.00, made payable to the defendant's son and endorsed by him, with no business connection with Micro-T, Inc. The total of this group of checks in Y2 is not quite double those in 1975.
I did not particularly omit any duplicate numbered checks including such exhibits as GG1 which is a duplicate numbered check in the amount of $ 30.00 to the William Penn Association for the account of Ruth Anderson, and a duplicate numbered check, Exhibit GG2, payable to the order of William Penn Association in the sum of $ 60.00.
As for the defendant's attack upon the verdict as set forth in point 2, that the court erred in finding the defendant intentionally and wilfully evaded the law as set forth in the indictment, the foregoing, as included in all the evidence as a whole, shows that the defendant knowingly made these duplicate numbered checks, withheld them from the records of Micro-T, Inc.; and knew sufficiently of income tax requirements by the handling of the corporation's income tax withholdings and in making her own returns and in making applications for refunds for 1975 and 1976. In any event, the covert handling of all matters pertaining to the duplicate numbered checks by the defendant is fully set forth in my findings of fact, conclusions of law and Opinion filed April 1, 1982, and needs no further discussion to show that this point of attack on the verdict is baseless of no showing of intentional and willful evasion of taxes.
The point 4 attack on the verdict relates to the averment of the defendant in paragraph 13 of her instant motion that "she did not knowingly and intelligently waive her right to a jury trial".
Reference is first made to the pleading itself entitled "Waiver of Jury Trial" which was dated February 9, 1981. It was filed on February 11, 1981. It was signed by "Ruth M. Anderson" and witnessed by "W. Penn Hackney for George E. Schumacher". Mr. Hackney is an assistant public defender and witnessed the defendant's signing of the waiver. Assistant United States Attorney Sandra D. Jordan, consented by her signature on February 11th and it was approved by this court on February 12th.
Mr. Hackney testified at the hearing on May 4, 1982, that Mrs. Anderson did read the document before affixing her signature. And this is what she read in plain words:
"And now, February 9, 1981, I, RUTH M. ANDERSON, having been fully informed of my Constitutional right to a trial by jury in the above-stated case, do hereby waive said right and consent to be tried without a jury by the United States Court for the Western District of Pennsylvania.
Ruth M. Anderson".
She thus acknowledged
that she had "been fully informed of (her) constitutional right to a trial by jury ...... (and did) waive said right and consent(ed) to be tried without a jury by the United States Court for the Western District of Pennsylvania". That she had had conversations in this regard and was told to go home and think it over before making her choice will also presently appear in the testimonial evidence which is excerpted from the transcribed records of hearings had on the instant motion.
During the many days in which the bench trial proceeded, I had ample opportunities to observe the defendant and her demeanor in the courtroom. And in fact, I had further opportunity to observe her in the post-trial hearing-arguments. I observed and concluded that Mrs. Anderson was an intelligent and a cultured woman, alert and perceptive. During the trial of the case itself, she was simply yet neatly dressed. At the post hearing-arguments she presented herself more noticeably and tastefully attired.
It is inconceivable to me that a woman of Mrs. Anderson's intelligence, education and perspicacity, as shown during the trial of this case, would not have known that she was not sitting in a trial where there was no jury from February 17th to March 3rd, or that she did not know of her constitutional right to have a jury trial, especially after she had read the words in the "Waiver of Jury Trial", as she signed it, and as it was witnessed by Mr. Hackney.
Oddly enough, it is only now for the first time as of April 28th, 1982 that she professes ignorance of her right to a jury trial and of her waiver of that right. During the time the defendant sat in court during the trial of this case and as she testified, she proved that she was alert and a woman of intelligence and discernment. She was an educated person as she herself testified (Tr. page 485, Trial):
"Q. (Mr. Schumacher): What is your educational background?