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UNITED STATES v. ANDERSON

June 22, 1982

UNITED STATES of America
v.
Ruth M. ANDERSON



The opinion of the court was delivered by: ROSENBERG

The defendant, Ruth M. Anderson, a bench trial convicted defendant, filed a Motion for Judgment of Acquittal and Motion for New Trial. By this pleading she charges (1) that she could not remember "of anyone telling her of her right to a jury trial until after the trial when the First Assistant Public Defender gave her that information"; and (2) that she was denied a constitutional right of a speedy trial because thirteen months elapsed between the beginning of the trial and of this court's filing of the Findings of Fact, Conclusions of Law and Opinion and verdict.

She was found guilty after a 7 day trial on two counts of the indictment charging her with wilfully and knowingly attempting to evade and defeat a large part of the income tax due and owing by her to the United States of America, for the calendar year 1975 as set forth in Count 1, and for the calendar year 1976 as set forth in Count 2. It also charged her with preparing, mailing and the like, of false and fraudulent income tax returns with the Internal Revenue Service for each of those years. The counts charged that in the calendar year 1975, she evaded paying the sum of $ 7,854.02, and in the calendar year 1976, she evaded paying the sum of $ 8,689.54.

 Immediately following the filing on April 8, 1982 of the instant motion for judgment of acquittal and for a new trial, this court scheduled the matter for argument on April 28. Counsel in his brief made the statement that "she desires to present testimony before this Court at the time of the argument on April 28, 1982 that she did not waive her right to a jury trial ...", That request in the brief was allowed and the court heard not only the argument of counsel but heard all the witnesses who might have given any evidence which would clarify and settle the issues raised by the defendant.

 Because the defendant's counsel had a nose bleed on April 28th, the argument-hearing was postponed to May 4th. On May 4th this court heard the argument and the witnesses who were offered. Since the hearing had not been fully exhausted at that time, additional time was given on May 10th, when I heard further testimony from counsel and from the reporter who had recorded the trial of this case, and again on May 26th by the defendant's calling as her witness, the First Assistant Public Defender.

 In the instant motion, the defendant's attack on the verdict is:

 
(1) that this court erred in making various findings of fact and conclusions of law;
 
(2) that this court erred in finding that the defendant intentionally and wilfully evaded the law as set forth in the indictment;
 
(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;
 
(4) that the defendant did not knowingly and intelligently waive her right to a jury trial; and
 
(5) that the period from the beginning of the trial to the verdict was overlong and denied her Sixth Amendment right to a speedy trial.

 To bring the processing of the case up to date and as well to supplement such testimony as is required to meet or support the challenge of the defendant in the instant motion, a partial review and some repetition are required of that already stated in the Findings of Fact, Conclusions of Law and Opinion of this court filed on April 1st, 1982. 535 F. Supp. 1230.

 As a matter of basic information, the defendant had been the trusted bookkeeper of Micro-T, Inc., in a borough immediately outside the City of Pittsburgh limits. The corporation was engaged in contracting for and constructing radio antennas and microwave towers for industries requiring these throughout the country. The executive officer who took care of the sales' portions of this phase of the business was vice-president Alton Kester, and the office and administrative functions of the corporation were administered by vice-president Donald Wood. However, it appears both spent considerable time on the inside of the office and authorized the bookkeeper, the defendant who had become a trusted employee, with not only keeping accounts and retaining withholdings for tax purposes and making tax returns for these, but also with the drawing of corporate checks, that is, those authorized by either Kester or Wood as applied to their respective functions.

 Other officers in the corporation, Robert Fay, the president, was primarily the financial backer and seldom interfered with the administration of the business. The secretary, the corporation's lawyer, Donald Lee, was very seldom present in the business.

 The defendant was employed by president Fay for the corporation as a bookkeeper in December, 1973. She continued in that employment, and as I now repeat, became a trusted employee, so much so that she was entrusted with not only the writing of checks authorized by either Kester or Wood, but also with the numbering of the checks in the checkwriting machine and with the use of the signature slug containing the names of the authorized drawers of the checks, Alton A. Kester and Robert B. Fay, available only to the officers and to the defendant Anderson. The authorized checks were then written by the defendant and the slug inserted into the machine, making them negotiable instruments.

 Although no dissention occurred in the Micro-T, Inc. setup, the defendant made the charge to Wood that Kester included personal expenses in his travels for the company. This matter was referred to the Board of Directors of the company, and the charge was dismissed. As to what happened thereafter will presently appear in the testimony of the defendant as she took the stand in her own defense.

 The prosecution in support of the charges contained in the two counts of the indictment presented various witnesses: (a) an Internal Revenue Service representative who testified to what the defendant did file and what she was required to file in the years 1975 and 1976; (b) an accountant who sat in court throughout the trial and after hearing all the evidence made calculations from the evidence and presented testimony on the amounts which should have been returned for income tax purposes in the calendars years 1975 and 1976; (c) the president of Micro-T corporation, Robert B. Fay, employe of the defendant, and the two vice-presidents-directors and executives Kester and Wood-who had authority to approve corporate checks and who testified that the large list of check exhibits introduced into evidence and referred to throughout the trial as duplicate numbered checks which the defendant made and negotiated during the calendar years 1975 and 1976, were unauthorized, invalid and not connected with any company business; and (d) a number of merchants and sales representatives who testified to the fact that the defendant, Ruth M. Anderson, presented the Micro-T, Inc. checks and negotiated them for her personal purposes, and further testified that they had no business with Micro-T corporation.

 The testimony of all these witnesses was to the effect that the defendant was a bookkeeper who had been entrusted with the making and negotiating of checks authorized by either Wood or Kester; that when the defendant resigned in August, 1976 the successor bookkeeper was met with shortages and missing records relating to the bank checking account; that the successor bookkeeper discovered that a large deficit existed in the calendar years 1975 and 1976, and that the books could not be balanced; that Union National Bank, the checking depository made micro-film copies of approximately 200 duplicate numbered checks for those years; *fn1" that none of these duplicate numbered checks were in the record of or disclosed by the books of the Micro-T corporation; that practically all of 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.

 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 *fn2" 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.

 II

 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.

  IV

 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 *fn3" 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?
 
A. I am a graduate of Perry High School and I went to three years, three nights a week at five hours a night, to Pitt.
 
Q. When?
 
A. 1950 to 1954.
 
Q. What courses did you ...

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