*1 UNITED STATES v. JOHNSON.* Argued Reargued 1942. April 10, 13, 12, 4. 1942. No. October 7,
Decided June 1943. al., et States Sommers United *Together 5, also with No. v. certiorari, Appeals to the 315 U. S. Circuit Court of writ of Seventh Circuit. *2 Fahy, General Raum, whom Solicitor Arnold with
Mr. Clark, Jr., and O. Attorney General Samuel Assistant *3 Crouter, Slack, J. Earl C. Key, Ellis N. Messrs. Sewall briefs, Tweedy on the Monarch, B. were Louis and Gordon for the United States. original cause on the Floyd Thompson argued
Mr. E. was Dempsey J. Mr. William argument respondents. for Poppen- and Mr. Conrad H. reargument, with him the on respondent for briefs, was with them on husen No. 4. sub- Hess and Edward J. Harold R. Schradzke
Messrs. 5. Mr. No. reargument respondents for mitted on the on on the brief Byrne with Mr. Hess John Elliott original argument. of the opinion delivered Justice Frankfurter
Mr. Court. charge in five counts. Four
This is an indictment John- the income tax for each of attempts son with to defraud 1939, inclusive, charge from 1936 and years dozen aiding abetting Johnson’s efforts. The others with charges conspir- Johnson and the others with fifth count 506
acy to during defraud the income tax years. those The substantive charge counts penal violations of the provi- sions the Revenue 1938, Acts of 1936 and now embodied in general form in § (b) 145 of the Internal Code, Revenue 63, 53 Stat. (b). § 26 U. C. S. 145 count conspiracy is based on the § old 5440 of Statutes, the Revised later became 37 1096, § of the Criminal Code, Stat. U. S. C. 88.
toAs foúr defendants, the cause was dismissed upon motion of the United States three Attorney; others were acquitted by jury. Of the remaining six defend- ants, brought guilty a verdict of on all five against counts Johnson, Sommers, Hartigan, Flanagan, and Kelly, against Brown four, on counts three and the substantive years counts 1938 and and on the conspiracy count. The district court imposed on years a sentence of five on each of the first four counts years and of two the conspiracy count, as well as $10,000 fine of on each of the five counts. The terms of imprisonment were to run concurrently payment and the of $10,000 would discharge all fines. Lesser concurrent sentences and fines were imposed on the other defendants.
The Circuit
of Appeals
judgments.
Court
reversed the
holding
Its
undermined
the entire
prosecution
found the indictment
void
because it was returned
illegally
grand jury.
constituted
But
beyond
it went
*4
major ruling.
It found the four substantive
counts of the
indictment,
far
they charged
so
as
defendants
as aiders
and abettors,
fatally
Proceeding
merits,
defective.
to the
the court held that
the case properly
jury
went
to the
against Johnson on the last four counts and that
the evi-
dence sustained
against
the verdict
all the defendants on
conspiracy
the
count, but that a verdict should have been
directed for Johnson on the first count and for the other
defendants
on all but
the conspiracy count.
Finally,
it
testimony
found that
expert
the
of an
accountant
government
the
and that
its ad-
jury’s province
invaded
Judge
prejudicial
mission was
error. 123F. 2d 111.
Evans
dissented on all
found
infirmities
the
points. He
no
thought
trial
and
rulings by
judge,
indictment or
the
the
Id.,
jury.
tire
the
properly
that
case was
committed to
adhered
rehearing,
128. On
the
Court of Appeals
Circuit
grounds
its
to its
but
an erroneous
of
part
withdrew
views,
the
testi-
deeming
expert
for
admission of
accountant’s
brought
mony to be
Inasmuch as the initiation of criminal system a feature of federal of juries forms vital justice, governing procedures appro- the law its and determining legality for of its priate considerations Therefore, in of de- importance. actions are matters -first ciding defendants were held to answer for an that merely paper of and scrap infamous on what was crime Jury” required by not “the indictment Grand Amendment, beyond Fifth the lower court went case. special particular relates to the circumstances court here rulings below, of the other Unlike most concern to the administration deep with a matter dealt law. At root of the court’s decision federal criminal extending the grand the life of finding that an order therefore re- void, was and the indictment was jury A lawfully empowered not to act. brief body turned filing of which led to the history proceedings 29, 1940, March is therefore open court on indictment essential. Eastern District Court for the
Terms court are, by the Northern District Illinois stat- Division of March, Monday February, April, fixed the first ute, November, July, September, October, May, June, in December. 28 U. C. Monday third S. impaneled at the December grand 152. This *5 508
1939 em- term of court, the district and was therefore powered through January By order, sit 1940. validity of which its life continued undisputed, is into the 1940, term. February February 28, And on district this court authorized continuance of a further grand jury is the during March term. This order 1940 gives upon legality rise to the its controversy, depends re- validity thereafter of the indictment by turned grand jury. disputed order reads follows:
“Now comes Term the Second December 1939 Grand Jury for Illinois, the Northern Eastern Divi- District of sion, by Forewoman, open Dorothy Binder, W. them, requests Court that an authorizing order be entered the said December, Jury, Second 1939 Grand heretofore during February authorized to Term this sit 1940 Court, to continue to Term suc- during sit tile of Court ceeding the February Court, to-wit, said Term of begun March investigations 1940 Term of Court, to finish but not Jury during finished said Grand De- the said cember Court, February 1939 said 1940 Terms of finished investigations
and which said cannot be during February the said 1940 Term of and the Court; being Court fully advised in premises, “It Is Ordered Therefore That the Second December District, Jury, sitting 1939 Grand now in this Division and be, and it is hereby authorized to continue to during sit March finishing 1940 Term Court purpose said investigations.”
The court below construed this order as authorizing the grand jury during to sit March to enable it to finish inves- tigations begun in February, governing while under the statute, Code, of the Judicial 28 U. S. §C. it could be only investigations begun authorized “to finish but not grand jury” finished such during original e., i. term, the December 1939 So order, term. to read the however, language dissociate from its appropriate disregard function and to the historic role of grand *6 permits the law system. Since judicial in jury our federal investigations” finish grand jury “to a continuance the re- elementary term, the most begun original during should, judicial action legality to attributing quirement of a read- English lead to speech, to is done unless violence grand to restrict the February 28 so as ing the order of could do instead to legally it which jury to that making illegality. for reading expansive holding extending the that the order foundation give the term to purported into March jury grand is the in the phrase the statute in authority defiance it jury’s author- request reciting grand order fin- during term sitting the March “to ized continue its to begun grand not but finished said investigations ish February 1939 and the said December jury during the said investigations said Court, 1940 Terms during February 1940 Term of be finished the said cannot to Appeals The Circuit Court of read this mean Court.” a grand jury requested continuance into that the in investigations begun to finish the Febru- March term original surely December But well term. ary as as investigations begun but not finished the recital “to finish during grand jury said December 1939 and said Terms,” is, worst, at the February 1940 dubious as said begun Judge and what was finished. Evans what was reading ambiguity by resolved the rightly disputed language “during the December 1939 and the said said February qualifying Terms” “finished” rather than meaning grand therefore that the “begun,” jury during the February to finish December and terms unable begun being when that which it had first came into rendering good Eng- December term. Such a makes good sense. To read it well as as the court lish as below go way finding judge out of one’s it is to read ir- granted the order of either wilfully who extension or did responsibly legally act, a forbidden namely, allow grand jury beyond a in- up sit the term and take new stead finishing legal old business. For the limitations governing grand extension of the life of do not lie in a recondite field of law judge which a federal district may easily slip. Certainly every judge great district metropolitan center Chicago like knows that in authoriz- ing grand jury to continue to sit “for fin- the purpose of ishing” their “investigations,” “investigations” must begun been during grand jury’s original have term and that new inquiry may domains of not thereafter be entered *7 by grand jury.
The failure of recognize the court to the essential below grand function of the jury system jus- our of criminal tice is revealed by subsidiary argument its in regard to the fourth count. charges Since that an attempted evasion of Johnson’s year 1939, taxes and since such an could attempt not have become manifest to prior filing of his return on March 15, 1940, the court reasoned “investigation” charge into this necessarily could not begun have been prior to the March term and that it there- fore investigation. constituted a “new” Such a view mis- workings conceives the duties and a grand It jury. investigatorial invested with broad powers may into what be against found to be offenses federal criminal law. Its work by requirements is not circumscribed the technical governing the guilt ascertainment once has made the charges inquiries. grand culminate its A jury that begins investigation may of what be found to be justice to passport obstructions or frauds or tax evasions opens up all the ramifications of the particular field of inquiry. investigation Its in such may cases be into a continuing course conduct during, perhaps even Congress its inquiry. And after, certainly did not restrict grand jury dealing a with all crimes disclosed investigation. very purpose The of the Act of February 25, 1931, 28 U. 1417, allowing grand 46 Stat. S. 421, C. arbitrary juries beyond investigations to continue fed- of court in various periods that constitute terms continu- eral a more districts, grand jury was to make the of what competent ous and therefore more instrument inquiries have complicated become more into increasingly violations law. enlarged domain of federal criminal Congress That “in- did not view the have a restrictive vestigations” grand which to jury pursue a was authorized completion original emphasized by term is beyond its amending the Act of Act 17, Stat. April 1940, 110, 1931, original grand jury was supra. Under the Act terms.” But permitted “during not to sit more than three duration, fact to varying since terms of court are of Congress expe- which the attention directed York, New rience District of particularly the Southern grand life from Congress potential jury extended the of a might only “three districts three which some terms,” months, “eighteen months.” considerations already ample further the Congress enlarge induced still grand investigations and the manner which scope work, of grand jury’s report spoke House committee Sess., but Rep. Cong., H. 76th 3d are confir- No. see *8 grand jury may continue for which a mation that that subject-matter origi- on which it sitting general its is inquire into It is not forbidden began its labors. nally scope inquiry of its but general within the new matters new, dissociated, subject- in the sense of truly into a only matter. of a of a clearer case continu- hardly conceive
One can subject-matter pre- than that investigation of an old ing began grand jury December 1939 sented here. tax Johnson. It investigation alleged by into evasions sitting during the February continue its was allowed to authority permit was further extended and term, its found grand jury syste- March. The during it to sit courge of tax practice of evasion over matic years, urged, to ferret out so we are it could not continue yet, course of fraudulent phase one more of this continuous offense ripen separate conduct because that did not into a grand sitting. jury’s until the term of the So to hold last grand game pawn is to make of the a technical respecting great instead of it as a historic instrument of See Hale Hen- into lay inquiry wrongdoing. criminal v. States, kel, Blair United 43, 273, 201 U. 250 U. 65; S. v. S. States, Cobbledick v. United U. 282; S. 327. By way invalidating of its main basis for reinsurance indictment, the Circuit Appeals Court of relied on a wholly argument different line of from that which we just rejected. have It held preliminary motions, that the by sought which the quash defendants the indictment grand jury’s because of the illegality, raised issues of fact. It court, therefore found that district instead grant- ing government’s motion pleas to strike the in abate- ment, government should have put the to answer. The alleged grand indictment itself jury “having that be- gun during but not finished said December Term . . . investigation charged of the matters indictment, having continued to sit order of this Court . . . during February Terms and March ... pur- pose of finishing investigations begun but not finished during said December . . .” Term. The court below was apparently of the view that a mere denial of such a allegation solemn grand jury puts issue, its truth the burden upon government “to support it with proof,” and that failure to vindicate the authority of the grand jury is Assuming “fatal.” that under any grand circumstances a allegation jury’s the indict- ment returns was the outcome of an investiga- tion “begun” during original term and was not a for- investigation bidden new “begun” during an extended *9 term, within meaning the of 284 of the Judicial Code, § 28 U. C. presented S. issue, a traversable the cir- would indeed an that raise such issue cumstances could have, establishing of extraordinary the burden to be Roche v. Compare on defendants. heavily it would rest Assn., ante, Evaporated Milk 21. p. stand, the to
Were the court below allowed ruling the of grand regularity the of challenge, effect, mere in of the government the jury’s proceedings upon cast would Nothing regularity. such duty proving affirmative of workings grand the of could more of our destructive That system to its historic status. jury or more hostile in of many states, part the situation institution, unlike system. intrusion, allow the federal constitutional To into attitude, indispen- court’s implied by lower secrecy grand jury proceedings important sable —as pursuit as for the protection of innocent grand guilty subvert the functions of federal —would juries some states have seen by all sorts devices which ready in local as resort permit procedure, fit to their such inspection grand jury minutes. The district court right striking within mo- quite preliminary challenged legality grand tions which To construe these the indictment. as pleadings returned would be to the court below did resuscitate seventeenth interpreting century pleadings notions of and to do so aggravated by applying form them the administra- century. law the twentieth Protec- tion of the criminal safeguard rights which now of substance tions invention of such require do not new refine- accused pleading. ments criminal general importance ruling of the law of
Another was made Circuit Court of Ap- pleading criminal that the charge It will be recalled first four counts peals. attempts revenue, defraud the and that with charged are the same counts defendants the other of Johnson. The court below ruled and abettors aiders than the defendants other Johnson to a demurrer *10 514
those four counts should have been It found sustained. that these in- were, co-defendants, counts as to the both duplicitous. consistent and They were deemed incon- in against charged sistent that the offenses Johnson were as of March year, of each 15th whereas co-defendants charged “as aiders and abettors are with an offense which period extended over a of years.” They were deemed in duplicitous in the co-defendants were each count charged with that aided and conduct abetted Johnson both before and after March 15th of the relevant year, therefore, and were court’s view, charged the same count as accessories both before and after the fact. are to say
We constrained the court was led into by error misreading a statutes which underlie these allegations counts and the which laid offenses. The counts, of each of the four noted, basis we have is penal generalized by sanction successive revenue now laws, in the Internal provision Code, Revenue 53 Stat. 26 (b), any U. S. C. 145 felony § makes subject person being who, tax, to the income “willfully attempts any any manner to or defeat im- evade tax by posed chapter or the payment thereof.” Section 332 (18 of the Criminal U. 550) § Code S. C. every makes person “directly any who commits act of- constituting an law any fense defined of the United States, aids, or counsels, abets, procures commands, induces, or its com- mission” a vice “principal.” The lower court’s is its ruling misconception of nature offense 145 with by defined which Johnson § (b) charged, well as that of relation of aiders abettors, made 332 of the Criminal principals § Code such an offense. In short, Appeals Circuit Court of read the substantive though they charged counts as merely with the filing of false returns March 15th. may That only (a) § a misdemeanor under 145 of the Internal Revenue not the with Code, but that is offense which Johnson was so charged felony with a made He was charged. of at- violation comprehensive the much more (b), any pay- “in manner to defeat and evade” tempting return filed on March tax. false ment of income of tax only process of what was aspect 15th was one *11 to further- consciously And who contributed evasion. all its commission enterprise illicit aided and abetted ing that Code, the Criminal became thereby, and under non- Therefore, in enterprise. the common principals attempted merely phase one of Johnson’s participation of a false return March namely, filing evasion, irrelevant equally and it is 15th, irrelevant, is itself gave which the co-defendants Johnson continued the aid The crime 15th it. preceded March as well after attempt to evade four counts is the wilful each of first All who of what was due to the revenue. payment to the attempt in that were contributors participated only There offense each enterprise. one illicit re- equal in its have all who shared execution count, and may have been sponsibility law, before the whatever among leadership roles of and subordination different nor inconsistency duplicity neither There is themselves. to were prop- and the demurrers them counts in these four erly overruled. only pertinent to this questions case,
There remain leaving evidence warranted whether the particularly more trial of which jury. This was six weeks’ case on appeal, in the abbreviated form used record, even have printed pages. painstak- We a thousand runs over give all, unprofitable examined it but would be ingly jury. went to the outline what than the barest more opinions from the two appear sufficiently The details below. magnificent on a scale. The gambler was a winnings reported he from which himself one
income quarter of a million years question exceeded reported dollars. The lowest annual income so $100,000. were period more than His co-defendants Their plainly fry gambling smaller world. Chicago’s reported during period the same gambling annual income ranged from $3,600 $19,000. Concededly Johnson frequented gambling houses, ostensibly some half-dozen separately excepting owned found guilty, the others only Brown a so-called who was the nominal owner of currency exchange banking private furnished facili- gambling ties for these houses. also, John- Indisputably, gambling son had continuous and close relation to these houses. The decisive issue of fact was whether Johnson’s relation to these or patron pro- resorts was that of a of a prietor. testimony both for government and for the defendants question. During focussed on that course of his testimony, extensive put Johnson himself simply completely only real problem before *12 jury when any he swore that he “never had financial any interest gambling operated Club of the by any defendants.” jury
The against decided central issue this Johnson. argument And enough the that there not was evidence on jury which was finding a entitled to make a such does not call for extended In making discussion. this ultimate finding jury the must found that the string gam- have bling houses with which Johnson was associated over a period years, while ostensibly conducted separate as enterprises by separate his ownership, co-defendants in fact single gambling was a unified A enterprise. volu- body minous through of lurid and tedious testimony, often obviously witnesses, justified unwilling amply the jury in finding that these pretended separate houses were under single a domination. testimony amply justified also cpnclusion that owned proprietary Johnson interest in this gambling network of houses and merely was not patron or an occasional accommodating dealer other when beyond conventional desired to stakes patrons play individual finding that the Having justified in been limit. operated, Johnson behind were screens defendants win- were there finding that justified jury was also to attempted Johnson on which nings from these houses were Even records as such tax payments. income evade gam- But that these destroyed. were in these houses kept scale was over- on enormous transactions were bling that the expected It not is whelmingly established. illicit business of such vast financial transactions actual Compare United States v. direct appear by proof. would gambling long duration Wexler, 79 F. 2d 526. The of the operation evidence the substantial business, houses, records such favor probability law of and banking facilities pertaining private there were of these exchanges which were at service currency speculation tenuous but houses, it not a matter of made winnings of a substantial there were proof solid that report. not amount which Johnson did income unreported was reinforced large, That he had certainly in finding warranted the that proof which expenditures 1937,1938, 1939, years private It exceeded his declared resources. available that ground namely, presumably on this latter Johnson’s — justified finding he unre- expenditures had some ported properly income which was attributable to his earn- ings gambling houses —that the court below from thought evidence three substantive go counts, 1937,1938, those for sufficient *13 to jury. enough judgment to the That is sustain on were against Johnson, for the sentences all counts imposed concurrently. to run
Of government prove course the not did have to To unreported exact of by amounts income Johnson. require record proof more or more meticulous than this discloses that there elab- unreported profits were from an
orately illegal concealed would business, be tantamount holding to that skilful concealment is barrier an invincible proof. “. probative sufficiency . . the of the testi- mony has the support (in of the District is Court which included the verdict of jury) and of the Circuit Court of Appeals. It would something ingen- take more than ious bring criticism question into even that concur- rence or to strength something detract from assuring its — this, more than record presents.” Delaney United v. States, U. S. 589-90. And this consideration— the concurrence of both courts sufficiency below the jury’s verdict —renders further discus- unnecessary sion of against the verdict defendants, including all the Brown, on the conspiracy count. For Brown was while also convicted conspiracy on two substantive counts, the charge is sufficient to absorb his sentence.
Not many dispose words are needed to question of the of the sufficiency the evidence to warrant submission to the against counts substantive the other aiders and abettors, Sommers, Hartigan, Flanagan, and Kelly. In holding that the motion for directed verdicts on the counts charging aiding abetting should have granted, been the court below largely misled erroneous with which conception, we have already dealt, aiding abetting crime the circumstances of this In words, case. other a matter as evidence as a pleading, well matter court was dominated notion the co-defendants did not aid and abet if they actually did not share making his false return each March 15th. The nub of the they matter aided and abetted if they consciously parties were to the concealment of his interest these gambling they clubs of pretended themselves proprietors. conduct, Evidence of admissions, acts and warranted the trial court amply to send the substantive against the aiders and counts abettors to the jury.
519 us, must upon A evidence, pressed much ruling that the ad- held be noticed. The court below finally regarding witness testimony expert the an mission of disputed during income and expenditures Johnson’s gave The witness jury’s province. invaded period substantially the entire evidence computations based on Court in income. The Circuit record as to Johnson’s “a undoubtedly proper hypo- that while Appeals held have framed and pro- thetical could been question giving was not answers fact the witness pounded,” but as testi- any assumption hypothesis on the basis of or F. case. mony on “controverted issue” meaning of 2d at 128. do not so read the this testi- We jury. from the The withdrawn mony. No issue was underlying no materials credibility or correctness remotely by foreclosed ex- was even expert’s answers from testimony proper independent or withdrawn pert’s judge’s charge The by jury. was so determination objection though, was made, that clear and correct no to the exceptions grant there were refusal to course, charges were either requests for that redundant the usual testimony. items The worth unduly particularized or constantly system properly extolled, but jury of our rejecting tacitly that which we are argument such as see evi- stupid are too the drift of juries assumes case could not jury possibly have dence. accept they into the notion that must misled been any than government expert more calculations the calculations made bound they were assumptions based on the defendants’ expert defense’s trial long proper guidance by a court So the case. exercise its untrammeled judgment free to leaves the nothing weight testimony, worth and upon bring in its freedom verdict and impair its is done too or ought finicky not be fear- else’s we not someone judges trial discretion to the con- allowing some ful *15 of in of a trial and the submission appropriate duct general exclu- within the framework of familiar evidence sionary rules.
The decision below must therefore be reversed and Appeals proper remanded the Circuit cause Court in opinion.1 with this disposition accordance
Reversed. that portion concurs Mr. Roberts Justice validity with opinion which deals of the indictment. opinion judgment is of He that the Circuit Court Appeals because, be affirmed in the should case Johnson, trial substantial errors admission evi- operated and, dence to his case prejudice, defendants, other because there no evidence what- they to prove any ever aided or abetted to commit fraud upon effort the revenue and none to prove they parties were to a with him conspiracy object. having the same Murphy,
Mr. Justice Mr. Justice Jackson and Mr. Rutledge took no part Justice the consideration or of this case. decision 1 After the here, case came petition Government asked that Flanagan, died, who had Accordingly, dismissed. we dismiss writ as Flanagan disposition and leave the of the fine that was
imposed on him to Appeals. Circuit Court of See United States Pomeroy, v. 152 F. reversed in 164 324. F.