United States v. Costello

The defendant, Costello, appeals from a judgment entered upon the verdict of a jury, finding him guilty upon three of four counts in an indictment under § 145 (b) of the Internal Revenue Code, Title 26, U.S.Code: i. e., of wilful attempts "to evade or defeat a large part of the income tax" for the years 1947, 1948 and 1949, "due and owing by him and his wife," by understating their joint net income tax. (The jury acquitted him on the first count - 1946 -, which was for understating his separate net income tax.) Judge McGohey imposed a sentence of five years upon each of the three counts for 1947, 1948 and 1949 (to be served concurrently), and a fine of $10,000 on each count cumulatively, together with the costs of the prosecution - $4,111.38. On the appeal Costello raises six points, which we shall consider seriatim. First, he challenges the sufficiency of the evidence to prove that he and his wife had received more taxable income in the three years in question than he included in their joint tax returns for those years.Second, he asserts that it was error to refuse his offer in evidence of tax assessments against him for the years 1941-1945, which showed a higher net income received by him than the prosecution computed as his gross income for those years; and which were therefore relevant to show that he might have laid up a cash reserve on January 1, 1946. Third, that it was error to include his wifes expenditures as part of his own. Fourth, that the court erred in the admission of various pieces of evidence offered by the prosecution. Fifth, that the judges charge to the jury was insufficient. Sixth, that the indictment should have been dismissed because no competent evidence was before the grand jury at the inquest.