United States v. Harvey J. Powers

1089 largely of appearing consist facts so

general are substantial assertions America, UNITED STATES counter-affidavits, by a ly controverted Plaintiff-Appellee, grant relief unless such not court should v. moving party show a further makes the ing Harvey POWERS, J. Defendant- that he to demonstrate sufficient Appellant. probably the merits. succeed on will Cf. 18454. No. Tapeprinter, Dymo Industries, v. Inc. Appeals, States Court 1964). (9th 141, Inc., F.2d 143 Cir. Circuit. Seventh is manifest Here the conclusion requirement. 27, April Argued 1972. court did Emphasizing observe disclaimer Head’s 12, Sept. Decided 1972. exploit K-2’s secure intention to Rehearing 1972. Denied Nov. wrongfully K-2 hire and to trade secrets employees, court declared that Head would

order should issue because not, injunction, suffer result loss.

financial expressed

The court the view unnecessary to consider it was

whether Head had committed or wrongful acts

commit charged against by K-2. It made

finding (nor could it in this state

record) in effect that Head Crocker, wrongfully otherwise,

duced

to come to se to work for Head in order exploit secrets;

cure and K-2 trade respect true

the same is concerning soliciting Head’s oth key right employees.

er K-2 K-2’s hinges upon ultimate relief Head’s com acts; prelimi mission to obtain those

nary relief, upon K-2 the burden rested probability

show the that Head had com not, Pro

mitted them. K-2 has to use phrase,

fessor “fairly Moore’s established pre reliable factual basis” f.2

liminary relie conclusion, of this we do not Because remaining assignments

reach error; Head’s opinion of course we intimate no concerning the merits of K-2’s claims. court, grant-

The order of the district

ing preliminary injunction, K-2 a is set

aside, and the cause remanded

district court. activities, Finding (quoted opin- XI normal business then the earlier Head’s ion) finding legally predi will not suffice. “the activities insufficient ns wrongful injunctive E. Bliss of Hoad” the court meant tivities, ac- cate for relief. Cf. W. Struthers-Dunn, Inc., finding F.2d then the is without evi- Co. support it; hand, dence referring “activities” the court and the of both Powers briefs differing

Government, presumably for provided purposes, us influential with a scenario of the trial showing the machinations of the defend- cor- ants with numerous individuals and porations. parade of names and nothing events, mostly having to with do appeal, points reads involved on inadequate of a Tolstoi like an translation novel. operations were at least Some modestly corporation

handled Mortgage Company. named World Wide o,f financing The extent as reflected appears the evidence have been securing of advance finder’s fees from capital high-risk persons for who desired following ventures, business which further efforts to secure the loan along pay- evaporated with the advance ment. specific count on which Powers loan to

was convicted an involved aborted Beaird, He a Peoria businessman. sought $100,000 buy stock borrow operation in a fast food franchise things.” pork Beaird sold “barbecued meetings had several testified 111., Bailey, Chicago, for de- Robert S. pos- Fidanzi as to the with and Powers fendant-appellant. loan; arranging sibility personal such a Thompson, Atty., Robert James R. U. S. always participated that Powers had Atty., Chicago, 111., Filpi, A. Asst. U. S. discussions, extensively often in the plaintiff-appellee. for referring to what substantial sums to; STEVENS, and Wide had access PELL Cir World Before and agreed LARAMORE,* negotiations Judges, they after and cuit Senior Judge. $112,000 ($100,000 principal on a loan fee, “12 e., and as a finder’s i. Judge. PELL, 12, 1964, Circuit points”). Beaird On December Shallenberger, partner, and his Lester Harvey Powers, attorney, an J. signed a met Fidanzi and Powers client, named in an agreement provided loan contract which charging eight-count indictment less $100 advance fee fraudulent acts first seven various counts obtain failed to eighth refunded World Wide cognizance óf federal count, conspiracy Shallenberger each loan. Beaird and concerning the fraudu- gave a certified check $1120 for pleaded guilty prior to lent acts. Fidanzi (totaling $112,000). $2240, or jury trial tried in a 2% Powers was trial. pocket checks in his coat only, guilty II and was found Count saw of ever and that was last Beaird alleged mail connection with fraud or either Powers Fidanzi. pursuant 1341, pertaining to 18 U.S.C. § fraud into the In order to tie Powers This primarily one Bennie Beaird. just as participant as an active appeal followed. designa- * sitting by Judge States Court of Claims of the United Don N. Laramore Senior tion. Q. you attorney MR. BY BAILEY: Were Fidanzi World for and/or you Wide, aware when testified the testi- there adduced trial, you mony nature of that sir Did know ? Donald Blazavier. what the was? Blazavier, displays whose guilelessness object excessively MR. to that. SKINNER: consistent willingness part continuing and a objection is THE COURT: The money in ex- mother’s his own sustained. unkept change promises, ap- employee parently Wide World * * * THE I don’t COURT: although December, 1964, clear is not ruling by my prevent' you mean from During payroll. ever on he was asking ques- questions, but period association with World of his objectionable you’ve tion that asked is gave Wide, the Beaird checks to objection, and I and I’m sustained nearby Blazavier to at a bank— cash on that was telling specifically him not mention asked, nothing further. checks, endorsing the World Wide. After you mind, questions in If that she Blazavier was told a teller proceed objections any and rule on I’ll could not cash then re- Blazavier them. may that be made. turned the to Fidanzi. checks MR. BAILEY: I no further testimony, At in this his reach questions. points appeal. one raised this on filing In earlier for Fidanzi Subsequently, before the witness was tax and fraudulent income return excused, question pend- but while (No. failure returns1 wilful to file 67 following colloquy ing, side oc- bar 561, aff’d, CR States curred : 1969), 411 F.2d denied, cert. Judge, 24 L. Well, U.S. MR. I BAILEY: what 227), testified, Ed.2d “Mr. your Blazavier doesn’t know is that think Honor Fidanzi ing both of those checks [follow the case Guido Fidanzi was unreported into his unsuccessful bank sortie] income tax ease for in- wallet and I of it.” that was all heard come. below, However, in he the trial testi- in Government testimony that case based fied with that conversations his wife witness, on the of this refreshed days recollection and that a few pocket, the checks went stuck given he later checks money Guido Fidanzi with this as un- again and take told to them reported to him income and used that up Kenosha, to his hometown bank in evidence as the basis of criminal con- Wisconsin, to cash This he did them. five-year viction and a I sentence. proceeds, and then turned over the don’t think the can Government stand services, less he had held for his $100 out up building in one court in this and driving through, to Powers who was got money then come and purportedly closing way to a up and stand another court this Milwaukee where the was to be building got and subjected used. Blazavier was to a money. searching cross-examination on

consistency. right, you’ve THE All COURT: laid impeachment the foundation for and following then occurred: proceed accordingly. That is all I can MR. have a few more anything BAILEY: rule on I can’t rule on here. questions, Judge, about that trial. else. swindling manipulations Some the income at least which the which were the subject present contended should have indictment. reported achieved yesterday. I want involved I wanted What BAILEY: MR. — n argue knows witness is whether know happening your ? state- what I heard THE COURT: sustaining yesterday, I am ment not concerned areWe THE COURT: objection. knows. what he jury evaluates MR. SKINNER: Q. ifWhat BAILEY: BY MR. the evidence. make, sir, in the you did determination question was Your THE COURT: wheth- Service, about Internal Revenue objectionable I sustained it. proceeds of 6—Govern- er or not the your MR. BAILEY: income, were 6 and 6A ment’s Exhibits ruling— Honor’s to whom? ruling. Well, my it is THE COURT: Objection. MR. SKINNER: your I want BAILEY:—but MR. THE Sustained. COURT: all the facts aware of Honor moment, your MR. BAILEY: One I am aware of. Honor. this witness THE Whether COURT: Q. Agent BAILEY: MR. BY things is anything these is aware of you previous sir, did Kurash, pertinent But the here. oath, building, under in this occasion objectionable you put testify Govern- objection. sustained that charge- Exhibits 6 and 6A ment’s part of a the direct As of Fidanzi? income to Guido able as Agent Special of the defense, Kurash Objection. MR. SKINNER: as a was called Revenue Internal Service objection is sus- The THE COURT: to the follow- Powers cites us witness. tained. ing transcript portions in connec- of the ques- Kurash: with of No further MR. BAILEY: * ** tions. you BAILEY: Would MR. Agent jury, tell the court and the foregoing are the matters basis The long assigned Kurash, you were significant how contention for most Powers’ investigate him, tax liabilities the district As stated reversal. refusing give Guido Fidanzi? effect erred in positions fundamentally inconsistent object. MR. I SKINNER: espoused. previously has the Government objection sus- THE COURT: agree. do not We tained. say, do not need we do not because have to be heard BAILEY: MR. Judge. question, Govern- this, that the to reach the prior position in criminal ment’s a Oh, THE don’t we have COURT: form may in some never be asserted objection. be heard. I will sustain the subsequent the Government Q. you BY BAILEY: Did MR. litigation. criminal eventually or not determine you proceeds of would Thus, had made if defendant 6 and 6-A Government’s Exhibits by appropriate offer record a him, sir?2 Guido Fidanzi as income to fact the Government of the successfully prosecuted Objection. for tax MR. SKINNER: receipt sole connection evasion objection is sus- THE COURT: o,fincome, specified items of certain being tained. in which in a case done prosecute attempting may, your Government MR. BAILEY: receipt identi- of the sole for his precise Honor, this is the totalling $2,240. Beaird checks 6 6-A were Exhibits 2. Government 1094 income, notwithstanding guilty

cal then items of of mail case fraud without having implications proceeds as of cases such United ever received Santos, 177, (2d of States v. F.2d 180 have to 372 check. One does not share might give guilty 1967), serious of a crime to be Cir. to whether offer to the crime. consideration prove not have should been sustained on necessary inconsistency There is no be- very basis, least, that at the it con money being person tween to one handed judicial cerned admission of liability paying for not tax on that proof, The offered Government. money being chargeable per- to another go beyond course, have to mere recipient. son who ultimate fact an indictment. Falter v. Cf. fatal, however, More to Powers’ con- (2d States, 23 F.2d 420 tention, estoppel either on a collateral denied, 590, 1928), 277 U.S. cert. secondary basis or on his basis that evi- 528, 72 L.Ed. S.Ct. governmental dence claimed gone But not the us this is situation consistent before should have be- although argument weight fore in his Powers would it whatever might substantially judicial admission, have us consider his case as have as a is the legal postured similar in state effect to that of the record us. The before appeal above. on this Government concedes underlying facts Powers’ fact, a matter of As judge counsel told at a side about bar first contends might significant conference collaterally estopped in case because reflecting negation of a motive of part prosecution Fidanzi. Even personal gain of Powers we were hold that the doctrine of col derived, fact, if was a from the non- estoppel applied lateral could to a receipt as his own income. situation there where lack Turning to the record which we have mutuality parties, Ashe Swen cf. quoted hereinbefore, we look at first son, 25 L.Ed. U.S. Blazavier’s cross-examination. (1970), 2d if the and even matter questions bring point asked to in here litigation prior properly of the been asserted were whether the was witness presented below, the record doc aware of the nature of the trial or what estoppel trine of not collateral would be charge was. appropriate here not as Powers’ did objection properly could have relitigation involve the of ultimate particular ques been sustained as to the fact. duplicitous tion because of its nature. estoppel, Collateral as defined in Ashe may The witness aware of the been v. Swenson, simply “means that when an nature the trial not have of but known issue of ultimate fact been deter- has once charge what was and therefore by judgment, mined a valid and final respond would have unable to either again litigated that issue cannot be be- negative-. in the or affirmative parties any tween the same in future greater However, significance of to the lawsuit.” 397 U.S. at at present contention is double inconsistency 1194. is There no such be- question simply significance. had no We tween Fidanzi’s conviction tax materiality can find no in whether the guilt case and Powers’ in claimed or witness did not of did know the nature present First, clear it is that the case. previous or of the of the in case jury in Fidanzi’s tax case could have which he had We cannot as- testified. found that his income in excess of was sume that a other witness tells than the attributing without $600 the two checks response questions, irrespec- truth in to question in to him since there was an- litigation. tive of the nature of the charged other in income him to But, equally important prohibit, Government. The district court did not pursuit chill, proper fact that Powers indeed not even could have did Kurash, subject. however, stated he was as had not He witness. nothing asked, case, indeed, question testified was “on the that was not, such, if he had other Powers’ own witness and as further.” He told counsel subject impeachment by proceed. no questions Counsel Powers. questions. further Santos would to- in seem subsequently a side It is true that at consistent statements agent aof Government conference, bar judge Powers’ counsel told made the course of the exercise charged that Fidanzi had been only authority of admissible receipt of that the tax case with the impeachment purpose for- the of Again, he informed come. question was agent as an witness. Reasons individual objectionable. he had policy differentiating are advanced for pursued and as we The matter was not agent ordinary the agent. from the already observed F.2d at testimony here, aspect of Blazavier’s here, however, were to Even trials, inconsistency between the two question initial that the fourth step was an brought by way impeachment. out testamentary development bring attempt The cited proof opposed Government, as Agent by testimony Special matter agent thereof, had taken individual equally nonproductive on Kurash was with re- inconsistent earlier appeal con- that Powers gard checks, questiona- while questions put is involved. tends Kurash, really opens question that the fourth ble objections to which were sus- all, that door fact remains that at tained, do not tend to after the no further was asked Government, opposed to its as one attempt to follow was made whatsoever employees, had taken an inconsistent up pursue proof. line do position. rulings here were conceive that the ques The first in the as to chill reasonable effort series of such some making Instead, long no further how Kurash at interrogation occurred, record. tions had been as signed investigation and there Fidanzi tax only isagogic apparently proof offer what the and while whatsoever as to prohibition the witness innocuous also did not in the answers would have been if give ques- permitted its answer had been to answer rise to error. No effort was ask tions. made questions per- The second and third concerning agent questions overall agent’s tained to the determination as to prosecution the Govern- Fidanzi whether the Beaird checks keyed questions were ment. At best the were taxable income to personal to Kurash’s evaluations they whether were income and to whom. opinions in them- which would not be agent The determination of the binding selves on the Government. squarely falls within rule enunciated the posture the of the cannot on Santos, supra, in United States v. which plain record there was before us that adopt. objections ques we to these 52(b), requiring Rule error reversal. properly tions were sustained. Fed.R.Crim.P. question The fourth asked the agent day subsequent previous Finally, in a whether a on on occasion he trial, to strike the had moved proceeds testified the the that of the chargeable testimony Beaird to the of Blazavier effect checks as income agent proceeds to two paid the checks Fidanzi. the had testi had the might testimony fied in the to Powers trial as an adverse Powers. This subject impeachment im contrary and the witness the of that which he presented peaching had case, testified in matter the Fidanzi the then question Inconsistency jury. in propor the would assumed the given earlier statements impeaching tions of a in a trial with foundation for him ordinarily mony serving” not or out of court as “self seem to court striking questionable (see, and it the for exclusion basis for basis g., States, e. 252, 385 F.2d was not here. Smith United (8th 1967)), Cir. we cannot however, presentation, that exclusion of the statements made as supported by a motion strike was remotely after the fact as here was copy ap on the of the Government’s brief permitted abuse of the wide discretion peal to this of the Fidanzi tax case court. judge Hayes this situation. See which This brief contained statements States, v. United F.2d coming only were the matters at all close asserting point to the Powers is final con Powers’ contention present appeal. However, the brief was cerns the cross-examination of James as an before exhibit Doherty, first nine of the defendant’s properly which over the motion was character On direct examina witnesses. colloquy entire ruled. The the motion Doherty testified that Powers had a presence jury was out of good reputation community “in the the brief not into evidence offered yourself part” he and are a both in the trial. honesty integrity, for truth We conclude therefore that the matter veracity. appear fulness and It would urged presented here was not in such a legal that reference was to rather bring question manner as to before community. than the residence On cross- us. not We do consider matter as sought prosecutor examination to test being plain one of error under Rule 52 asking credibility by the witness’ (b), holding Fed.R.Crim.P. is not Our he “had heard [the defendant] might on the case that have been but on pending complaints three before Consequently, before the record us. Chicago Bar witness Association?” necessary have not found it to consider denying question, knowl answered the arguments Government, of the ir- edge complaints, defense before respective they may have, merit objected. sustained the counsel The court determination of tax objection. No motion mistrial was for a cidence of the of the Beaird There, course, made. no motion checks could be used anas admission anything to strike the answer for if they because were not inconsistent with was There favorable defendant. present Government’s was no motion that be ad fraud case. disregard question. monished to No The other contentions of complaints further reference these merit less extended during consideration. Powers’ examination of made eight or at character witnesses One of these concerned excluded ap The defendant trial. testimony of a assistant former state’s asking very peal claims “[t]he attorney years that at a some two time requiring plain error after the last date established judge mistrial.” the trial declare proof years Government’s and almost two agree. We do not Powers, according after own testi mony, district discovered We note Fidanzi’s fraud and arguably questionable. him, In severed all is connection with 469, Powers torney told States, the v. U.S. assistant state’s at Michelson United 483, 213, 222, that Fidanzi L.Ed. 168 had used his name dealing perpetration (1948), Supreme in the the Court of various frauds. analogous Powers asserts that with an matter stated: the should good have been admitted to his show inquiry as an arrest “The faith. permissible prosecu- the also because right qualifica- the While the test district court's announced has bespeak the com- proposed tions of the witness to characterization of testi- government guilty, munity opinion. If one never heard found Powers tending speculations that even introduced evidence rumors which indulge arrest, personally proceeds upon he received one’s friends his amounting $2,240. jury may two checks whether doubt giving capable any very con- reliable prior proceeding, Fidanzi In a criminal reputation.” clusions to his failing wilfully to file an was convicted of year complaint In A income tax return for the before bar associa- charged legal tion, publicly government that known to the com- that trial the o,f munity, would, arrest, unreported $11,- like an an ac- income be Fidanzi had although including misconduct, cusation of which of the two $2,240 untested would an event be about which checks for were offered which lawyers normally Thus, comment. Powers in this case. complaints government formally Furthermore, before bar Fidanzi trial directly association would seem to be contended that the entire benefit $2,240 reputation Fidanzi’s; relevant to the defendant’s in the Powers trial honesty integrity government formally for those traits of contended that expressly put which were in issue. of the same benefit successfully government Powers’. given jury also note bringing prevented this in- Powers from customary jury instruction that the consistency jury. to the attention of the should not consider to which objection parties, had been sustained. Because of the difference neither the inconsistent because judge’s We need not decide verdict, positions to either was essential proper, how- agree estoppel the second that no barred ever, for under the lack circumstances of change government’s or, indeed, mistrial, motion for no motion to ad- position. mere I also assume that the disregard jury question, monish the government agent placed fact that a any showing signifi- and lack of past particular interpretation being particular cance attached gave testimony transaction, or and either question during the remainder of the setting executed an affidavit forth trial, prepared we are not it was interpretation, would not be admissible plain requiring error reversal. Rule 52 except agent. impeach United (b), Fed.R.Crim.P. Cf. Santos, 180-181 States 372 F.2d For the reasons hereinbefore set out (2d however, believe, judgment of the district court is af- a more is raised when basic issue firmed. sovereign posi- takes inconsistent itself Affirmed. separate proceed- in two criminal tions ings against two its citizens.1 STEVENS, Judge (dissent- Circuit ing). inconsistency may justified or be Powers, explained by newly attorney, discovered evidence client, analysis were of facts named as more accurate codefendants in my eight always each count of an But count available. indictment. inconsistency may plea opinion Fidanzi eight guilty entered a the fact of the all brought properly the attention counts. Powers’ defense was participation government put jury lawyer, and the was as a not a principal. argue explaining burden of how it could defense was successful eight prove, on seven of the same transaction can counts. With re- spect mutually beyond doubt, to the one count on a reasonable two which the States, prosecution 1. The of a crim- formal like other does the inanimate persons, agents. must, course, inal trial establish act its merely just However, the views and not United States as formal action by participate agents may clearly therein. of of its who board directors evi position corporation, dence of a so purpose government proving of propositions. I think Powers that a exclusive agent govern- had made an was entitled admission which was formally contended, binding principal, in the ment his for but rather resulting purpose explaining position in the the principal course a criminal trial of his o.f Fidanzi, formally the entire of conviction asserted proffered trial of con- I believe the for Fidanzi. of the checks testimony stituted incometo Fidanzi.2 of Kurash should have been received.5 question my There is no mind bring inability respectfully I Powers’ this fact therefore dissent. I jury may attention of the well and would reverse remand for a new trial. the critical his convic- difference between possible acquittal. de- his “affecting sub-

fect the record one rights” the defendant within stantial of Moreover, 52(b), Rule Fed.R.Crim.P. theory admissibility plain-

Powers’

ly explained to the trial court.3 The narrow which then remains issue questions propounded FIRST AMERICAN NATIONAL BANK by purpose counsel for the Powers’ NASHVILLE, Plaintiff-Appellant, OF proving position by taken government in the Fidanzi trial should America, UNITED STATES answered. Defendant-Appellee. Having concluded the ultimate No. 71-1491. sought proposition which relevant, establish was I also conclude Appeals, United States Court of bringing proper that one method Sixth Circuit. jury matter to the attention of the 4,Oct. 1972. government agent, Kurash, analyzed who not specific transaction but also testified proffered at the Fidanzi trial. Powers testimony,4

his not as in Santos for the argument 2. up In in the Fi- stand another in this court build- trial, government danzi ing got money.” counsel stated: charged $11,240 “For ’64 we and we Tr. 504. proved just gross that. He received a by 4. Kurash was the first witness called $11,240. supposed income of He was defense; thus, admissibility it, return, to file a he knew testimony, questions propound- unlike the didn’t, wilfully and he failed file.” Blazavier, ed was not limited Tr. United States v. scope government’s examination F.2d 1361 proper the court’s as discretion limits on cross-examination. Well, Judge, 3. “MR. BAILEY: what your think Moreover, Honor judge doesn’t know is that since the trial indicated inquiry case Guido was an that he considered line unreported income for having tax case income. irrelevant after been advised of theory (Tr. admissibility Government that case based on Powers’ 504- witness, 05, 575-76), of this I am satisfied pocket, checks purpose went in his stuck Guido useful would have been served money unreported by any attempts Fidanzi with this as further to make an ade- quate appeal. income Indeed, proper to him and used that evidence record for respect judge’s basis of a criminal conviction five-year and a sentence. don’t think should excuse trial counsel the ne- from up cessity correcting can stand in one minor deficien- building questions already in this cies in the form got put. and then come and

Case Details

Case Name: United States v. Harvey J. Powers

Court Name: Court of Appeals for the Seventh Circuit

Date Published: Nov 8, 1972

Citation: 467 F.2d 1089

Docket Number: 18454

Court Abbreviation: 7th Cir.