United States v. Anthony Monteiro, A/K/A ToyUnited States v. Anthony Monteiro, A/K/A Toy
Defendant-appellant Anthony Monteiro appeals from his jury conviction in the United States District Court for the District of Rhode Island for conspiracy to defraud the United States,
THE APPLICABLE INTERNAL REVENUE LAW
The Internal Revenue Code (“the Code”) defines gross income as “all income from whatever source derived.”
Two provisions of the Code, applicable to gambling proceeds, are relevant to this case. First, in order to verify whether a taxpayer has reported all of his income (including gambling winnings) in a particular year, the IRS requires certain information from those who pay others. The Code requires that persons engaged in a trade or business and making payments to another person of $600 or more in any taxable year “shall render a true and accurate return to the Secretary, ... setting forth the amount of such gains, profits, and income, and the name and address of the recipient of such payment.”
The Code requires that the income tax on certain kinds of income, including certain gambling winnings, be collected at its source.
In order to comply with these statutory requirements, Lincoln Greyhound Park has established a special window to be used for cashing tickets worth more than $600. This window is referred to in track parlance as “the IRS window” although there is no sign that so indicates. To cash a ticket paying more than $600, the holder must go to the IRS window and sign an IRS form, Form W-2G, listing his name and address. For a ticket paying more than $1,000 which has proceeds at least 300 times as large as the amount wagered, the recipient must complete the Form W-2G and the racetrack withholds 20% of the proceeds as income tax on the spot.
“TEN PERCENTING”
“Ten percenting” is a practice by which actual winners of gambling proceeds avoid the reporting requirements of the Code, set forth above, and the tax liability for the amounts won. The result is accomplished in this way: the actual winner meets up with a person who is agreeable to cashing a winning ticket. This meeting might be solicited by either party or arranged by a third person. The winner passes the ticket to the other person who then presents the ticket at the IRS window. This person signs the IRS Form W-2G in his name, not reporting the identity of the actual winner. In this way, the IRS is not able to attribute the wagering income to the actual winner, who avoids the tax consequences of having won the money. The person who cashed the ticket then gives the proceeds to the actual winner and is given a fee for his efforts, often 10% of the amount won.
THE FACTS
The indictment charged appellant with illegal acts on four specific dates: October
On October 30, 1986, IRS Special Agent John L. Toti, Jr., acting in an undercover capacity, obtained a winning ticket worth $649 at Lincoln Greyhound park. As Toti walked toward the IRS window, he was met by appellant, who asked Toti if he had “hit the trifecta” and how much it was worth. Toti told appellant that the ticket was worth $649. Appellant then asked whether Toti wanted someone to cash the ticket for him. When the agent said yes, the appellant motioned to a third person, later identified as James Rogers. Toti then gave the ticket to Rogers.
The appellant remained with Toti while Rogers went to cash the ticket. Toti asked if there would be 20% taken out of the winnings. Appellant answered “No, the only time they take out 20% it’s got to pay over $1,000” and then “For 649, you’ve just got to sign your name.” Appendix I, Transcript No. 1, p. 11. When Rogers returned he gave $649 to Toti. Rogers then left, telling appellant that he would see him upstairs. Agent Toti then gave appellant $64 and the appellant told him, “I’m usually right upstairs if, uh, you know, you get lucky.” Transcript No. 1, p. 13.
Agent Toti was again at the race track on November 5,1986, this time with Special Agent Fortune who had a winning ticket worth $610. The agents approached appellant and told him that they had a $610 ticket. Appellant asked “What day was that?” and Fortune stated that the ticket was from the previous week. Appellant asked Fortune if he could wait a few minutes. After a minute or so, Rogers approached the IRS agents. He and Fortune spoke, but Rogers refused to cash the ticket because he had already cashed a ticket for that race. He said that these winnings would be added to other winnings, putting Roger’s total over $1000 and therefore 20% would be taken out. But Rogers found a replacement, Tony Calió, to cash the ticket for a fee of $60.
On November 10, 1986, Agent Fortune again approached appellant and asked for his help in cashing a ticket. The agent informed appellant that the ticket was worth $720. Appellant replied, “See him. See him.” Fortune asked “Tony?” and appellant responded “Ya, he’s alright.” Fortune followed appellant’s directions and Tony Calió cashed the ticket for him for a $70 fee.
Finally, on November 19, 1986, Agent Fortune and Agent Towne approached appellant at the race track with an $800 ticket. According to the transcript, the two agents and appellant spoke briefly. Although several recorded statements are unintelligible, it is clear that appellant called for Tony, who arrived and agreed to cash the ticket for Agent Towne.
PROCEDURAL HISTORY
A grand jury indicted appellant for offenses involving his participation in the events related above. Count I charged that the appellant conspired with others to defraud the United States by impeding and defeating the lawful governmental function of the IRS in the ascertainment and collection of taxes. The four other counts charged the appellant with aiding and assisting in the preparation and presentation to the IRS of fraudulent documents on the four occasions outlined above. After trial by jury, appellant was convicted on all five counts. On May 2, 1988, the appellant was sentenced to a term of 6 months imprisonment on Counts I through IV inclusive, all four sentences to run concurrently, and a term of 18 months probation on Count V. A special assessment in the amount of $250 was imposed. The District Court released the defendant on bail pending this appeal.
ISSUES RAISED
The Jury Instructions
Appellant claims that the jury instructions given at his trial were erroneous because they did not require a determination of “whether the defendant knew he was
The defendant had requested a jury instruction defining “willfulness” as requiring “a voluntary, intentional violation of a known legal duty”, in accordance with
United States v. Drape,
The trial judge refused to give the requested instruction. On the offense of conspiracy, he instructed the jury that:
Before you may find that a Defendant, or any other person, has become a member of a conspiracy, the evidence in the case must show beyond a reasonable doubt that the conspiracy was knowingly formed, and that the Defendant, or other person who is claimed to have been a member, willfully participated in the unlawful plan with the intent to advance or further some object or purpose of the conspiracy.
To act or participate willfully means to act or participate voluntarily and intentionally, and with specific intent to do something the law forbids, or with the specific intent to fail to do something the law requires to be done; that is to say, to act or participate with the bad purpose either to disobey or to disregard the law. So if a Defendant, or any other person, with an understanding of the unlawful character of a plan, knowingly encourages, advises or assists, for the purpose of furthering the undertaking or scheme, he thereby becomes a willful participant — a conspirator.
The trial judge instructed the jury on the substantive offense of aiding or assisting in the filing of a false return thusly:
Section 7206(2) of Title 26 provides in part that: “Any person who willfully aids or assists in the preparation or presentation under the Internal Revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to a material matter” shall be guilty of an offense against the United States.
Three essential elements are required to be proved in order to establish the offenses charged in Counts II, III, IV and V of the Indictment:
First: The act or acts of aiding, or assisting in, or procuring, or counseling, or advising, the preparation, or the presentation of a false or fraudulent income tax document as charged;
Second: Doing such act or acts with knowledge that the income tax document in question was false or fraudulent, as charged; and third: Doing such act or acts willfully.
An act is done willfully if done voluntarily and intentionally, and with the specific intent to do something the law forbids; that is to say, with bad purpose either to disobey or to disregard the law.
Defendant’s objections to the jury instructions were repeated after the instructions were given, as required by this Circuit.
Carrillo v. Sameit Westbulk,
With regard to the jury charge on conspiracy, defendant’s preferred instruction, that “willfulness” required “a voluntary, intentional violation of a known legal duty” was not given verbatim. However, the instruction given did state the same elements, albeit in a different format. We find that the charge adequately explained the law.
The explanation of “willfulness” given by the trial judge in relation to the conspiracy and criminal tax offense charges is identical to the jury instruction reviewed by the Supreme Court in
United States v. Pomponio,
A willful act was defined in the instructions as one done “voluntarily and intentionally and with the specific intent to do something which the law forbids, that is to say with [the] bad purpose either to disobey or to disregard the law.”
The First Circuit in
United States v. Drape,
Filing of the Tax Documents
Appellant also challenges his conviction on the ground that “the evidence adduced at trial amply demonstrates that the filing requirement of [26 U.S.C.]
There is no filing requirement in the plain language of the text of
Appellant Monteiro relies on this statement and case law following it for the contention that the false or fraudulent tax document must be filed with the IRS in order to convict under
Further complicating the matter is the fact that the situation presented for our review is unusual: the defendant aided the preparation of a fraudulent tax document which was submitted, not to the IRS directly, but to an intermediary (the racetrack) which had a legal duty to forward the information set forth in the document to the Internal Revenue Service. The issue of what it means to “file” a document in this situation appears to be one of first impression in this Circuit. Assuming arguendo that conviction under
The evidence shows that appellant aided the preparation of a fraudulent tax document by arranging for certain people to cash winning tickets and sign the necessary Forms W-2G in place of the actual
Although, on the evidence provided, we do not know whether the IRS ever received the fraudulent information in the normal course, we find this lacuna irrelevant to our decision because we do not equate “filing” with “receipt by the IRS” in a situation involving an intermediary. Here, there were two actors each having a separate legal duty to provide certain information for use by the IRS. The first actor was the actual winner of $600 or more who was under a duty to provide his name to the racetrack, pursuant to
Appellant relies on
United States v. Dahlstrom,
Appellant attempts to bolster the argument that he is not guilty of a
We hold that the offense of aiding or assisting the preparation or presentation of a false or fraudulent tax document is certainly complete when the document has been presented to a person or entity which
Sufficiency of the Evidence
Appellant argues that the evidence presented was not sufficient in establishing first, that defendant acted “willfully” and second, that the returns were “filed” to sustain the conviction.
In reviewing a conviction challenged on the basis of the sufficiency of the evidence, the court must determine whether, “after viewing the evidence in the light most favorable to the prosecution,
any
rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.”
Jackson v. Virginia,
As to the first issue, we conclude that reasonable persons could find beyond a reasonable doubt, on the evidence presented at trial, that defendant’s actions were willful. Agent Toti testified that defendant explained the relevant tax law to him. The recording of the conversation between Toti and appellant verified that appellant described the various procedures accurately and in some detail, e.g., for winnings less than $1002, “you’ve just got to sign your name”, whereas for amounts over $1002, 20% is taken out.
1
Although no evidence was presented that appellant himself had signed a Form W-2G and, in fact, the prosecution admitted that investigation of the records for 1986 revealed no such evidence, the evidence clearly indicated that he was acting in concert with persons who did sign Forms W-2G, at his behest. The evidence of defendant’s knowledge that the law forbids aiding the preparation of false or fraudulent tax documents was circumstantial, as the prosecution admits. But circumstantial evidence of willfulness can be sufficient to sustain a jury verdict.
See United States v. Moon,
As to the second issue, we discussed, supra, the definition of “filing” to be applied in this situation. It is clear that the returns at issue were “filed” as we interpret that term in this particular context.
Disclosure of Exculpatory Evidence
Appellant asserts that the prosecution failed to disclose evidence that was material and favorable to him until after trial. Specifically, he alleges “the prosecutor did not disclose to the defense until after trial that it had reviewed the records of Lincoln Greyhound Park for the entire year of 1986. This governmental review disclosed that on not a single occasion did the defendant sign a form W-2G or otherwise cash a ticket with net winnings in excess of $600.”
In appellant’s view, this evidence is relevant to the issue of whether the appellant had sufficient knowledge of Internal Revenue law to satisfy the requirement of “willfulness” necessary to sustain a conviction under
The Supreme Court has held that due process does not require a prosecutor to
Consistent with “our overriding concern with the justice of the finding of guilt,” a constitutional error occurs, and the conviction must be reversed, only if the evidence is material in the sense that its suppression undermines confidence in the outcome of the trial” (citation omitted).
Appellant has not persuaded this court that the evidence in question here even remotely approaches the level of significance contemplated in Bagley. The prosecution’s contention that appellant knew the relevant law was not premised on defendant having actually cashed tickets and signed Form W-2G himself. In fact, the government stipulated before the jury that appellant’s name did not appear on any of the Forms W-2G or other documents in evidence. The fact that the government had conducted a survey of the track records for one year, 1986, and found that defendant never signed a Form W-2G shows more of the same. Using the modus operandi proven by the government, it was not necessary for appellant to sign the Form W-2G himself. The trial judge concluded:
I’m satisfied, Mr. Monteiro, that on the evidence that you were one of ... the general managers of this operation at the racetrack which would explain a number of things, not the least of which is that there was no record that you cashed a ticket there because you had other people do it for you.
In light of the evidence presented and the government’s stipulation that appellant’s name appeared on none of the documents, the fact that the review of the 1986 track records showed that appellant did not sign his name to a Form W-2G in that year is not significant, and suppression of that fact is not a fatal flaw in appellant’s conviction.
Jury Selection
Appellant withdrew the argument presented in his brief that a certain juror should have been excused for cause based on exposure to pre-trial publicity and gave notice that he would assert at oral argument an alternate basis on which the juror should have been excused for cause. Appellant did not address this issue in oral argument, so there is nothing for us to consider here.
CONCLUSION
In sum, we have considered each of appellant’s arguments challenging his conviction and find them without merit. Affirmed.
Notes
. This explanation is precisely correct in the circumstance of the typical $2 bet. The withholding requirement set forth in