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United States v. John Musacchia and Joseph Gambino, 900 F.2d 493, 2d Cir. (1990)
United States v. John Musacchia and Joseph Gambino, 900 F.2d 493, 2d Cir. (1990)
2d 493
90-1 USTC P 70,001, 30 Fed. R. Evid. Serv. 71
Paula Schwartz Frome (James O. Druker, Kase & Druker, Garden City, N.Y.,
of counsel), for defendant-appellant John Musacchia.
Charles L. Weintraub (John L. Pollok, Hoffman & Pollok, New York City, of
counsel), for defendant-appellant Joseph Gambino.
Alan Hechtkopf, Tax Div., Dept. of Justice (James I.K. Knapp, Acting Asst.
Atty. Gen., Shirley D. Peterson, Asst. Atty. Gen., Washington, D.C., Robert E.
Lindsay, Atty., Tax Div., Dept. of Justice, Washington, D.C., and Andrew J.
Maloney, U.S. Atty., E.D.N.Y., of counsel), for appellee U.S.
John Musacchia and Joseph Gambino appeal their convictions on one count of
conspiracy to defraud the United States by willfully failing to pay gasoline
excise taxes in violation of 18 U.S.C. Sec. 371 (1988) and 26 U.S.C. Secs.
7201, 7202 and 7206(2) (1982). Musacchia appeals his conviction on six
additional counts of aiding and abetting evasion of such taxes.
Appellants contend that it was reversible error for the prosecution to bolster the
11 government has brought out testimony from several witnesses that I've decided
The
should not have been brought out concerning the possibility of being prosecuted for
testifying falsely. So the testimony concerning testifying falsely, I am instructing
you to disregard those statements.
12
Appellants now claim that, despite this curative instruction, the government's
deliberate and improper questioning of Williams, Cuomo and Ribando about
the truth-telling provisions of their agreements and the court's failure to sustain
appellants' timely objections constitute reversible error. 2 The government
concedes that the defense did not attack the credibility of Ribando, Cuomo and
Williams before they testified but argues that even if subject to review, the
error alleged by appellants was harmless because: 1) the judge gave a curative
jury instruction; 2) defense counsel conceded during their argument for a
mistrial that the entire testimony of Ribando and Williams was truthful, and
therefore any bolstering was not prejudicial; and 3) Williams' statement was
rendered harmless by a subsequent attack on his credibility by Musacchia's
counsel and by the peripheral nature of his testimony.
13
The government argues at the outset that appellants' claim of error resulting
from the admission of the cooperation agreement testimony is reversible only if
it was plain error, because appellants raised only general objections to the
testimony at trial. Appellants reply that their objections were "apparent from
the context" under Fed.R.Evid. 103(a)(1), which states that a specific ground
for objection need be raised only "if the specific ground was not apparent from
the context." Based on a review of the trial transcript, it is clear that appellants'
objections were apparent from the context. Defense counsel specifically
objected to questions about the truth-telling provisions of the agreements and
not to the testimony that the cooperation agreements were entered into by the
witnesses.3 Accordingly, the objections were preserved for review.
This court has consistently held that:
14
15
United States v. Cosentino, 844 F.2d 30, 33 (2d Cir.), cert. denied, --- U.S. ----,
109 S.Ct. 303, 102 L.Ed.2d 322 (1988) (footnote and citations omitted); see
United States v. Jones, 763 F.2d 518, 522 (2d Cir.), cert. denied, 474 U.S. 981,
106 S.Ct. 386, 88 L.Ed.2d 339 (1985). However, in United States v. ArroyoAngulo, 580 F.2d 1137, 1146-47 (2d Cir.), cert. denied, 439 U.S. 913, 99 S.Ct.
285, 58 L.Ed.2d 260 (1978), we held that because defense counsel challenged
the credibility of a government witness in the opening statement and later in
cross-examination and during summation, such challenge was inevitable, and
rendered harmless the error in admitting the witness's cooperation agreement
into evidence during direct examination.
16
The government concedes that it was error to question the witnesses about the
truth-telling provisions prior to defense challenges to credibility but contends
that such error was harmless. Appellants argue that because the prosecutor
intentionally bolstered the testimony of its witnesses the error cannot be
deemed harmless under United States v. Borello, 766 F.2d 46, 56 (2d
Cir.1985), in which the court held that the admission of and reading from the
truth-telling portions of a cooperation agreement on direct examination were
not harmless error even though the defense subsequently challenged part of
Borello's testimony. The Borello court did not find it necessary to engage in
harmless error analysis, id. at 58, stating:
Id. at 57-58. Appellants argue that because the prosecutor in this case
deliberately questioned the witnesses regarding the truth-telling provisions of
the agreements knowing such questioning was improper under the case law of
this Circuit, the error in this case cannot be harmless and no harmless error
analysis is required under Borello. As evidence of the intentional nature of the
error appellants note that, during argument in the robing room on Musacchia's
motion for a mistrial, a member of the prosecution team offered to withdraw the
questions about the truth-telling provisions of DeJonge's agreement.
19
20
The government contends that, because defense counsel argued during the trial
that Ribando and Cuomo were telling the truth, any bolstering of their
testimony was irrelevant to the outcome of the trial. During argument on the
mistrial motion, Musacchia's counsel stated:
21 fact the defense has been that Williams, Cuomo and Ribando are all telling the
In
truth but that we have an explanation for why they were used in this fashion. Their
credibility was not attacked, and at least two of them I didn't ask questions of....
They weren't attacked or questioned in any fashion, and as a matter of fact as I've
stated we adopt their testimony.
22
Based on this statement the government asserts that the defense conceded the
truthfulness of Cuomo's and Ribando's testimony and, accordingly, there was
no significant chance that the outcome of the trial was affected by the error.
Moreover, according to the government, counsel for Musacchia subsequently
attacked Williams' credibility by arguing in summation that Williams had
"lied," thereby rendering his earlier testimony about the truth-telling portions of
the agreement admissible under Arroyo-Angulo.
23
24
However, appellants have not specified how they were prejudiced by the error.
Appellants do not dispute that Williams' testimony was peripheral.4 Their
admission during trial that their strategy involved characterizing the testimony
of Cuomo and Ribando as truthful lessens the effect of the error with respect to
those witnesses. Most importantly, Judge Wexler gave a clear curative
instruction to the jury not to consider the challenged testimony regarding the
truth-telling portions of the cooperation agreements. Given the good faith belief
by the prosecutor that the credibility of all the witnesses had been put into
question by Musacchia's opening statement and for the reasons discussed
above, we conclude that the admission of testimony regarding the truth-telling
requirements of the cooperation agreements on direct examination was
harmless error.
26
The statute of limitations for criminal prosecutions arising under the internal
revenue laws is found in 26 U.S.C. Sec. 6531 (1982), which states in relevant
part:
27 person shall be prosecuted, tried, or punished for any of the various offenses
No
arising under the internal revenue laws unless the indictment is found or the
information instituted within 3 years next after the commission of the offense,
except that a period of limitation shall be 6 years-28
(1) for offenses involving the defrauding or attempting to defraud the United
States or any agency thereof, whether by conspiracy or not, and in any manner;
29
(2) for the offense of willfully attempting in any manner to evade or defeat any
tax or the payment thereof;
30
(3) for the offense of willfully aiding or assisting in, or procuring, counseling,
or advising, the preparation or presentation under, or in connection with any
matter arising under, the internal revenue laws, of a false or fraudulent return,
affidavit, claim, or document (whether or not such falsity or fraud is with the
knowledge or consent of the person authorized or required to present such
return, affidavit, claim, or document).
31
32
33
In United States v. Campbell, 426 F.2d 547, 553 (2d Cir.1970), this court held
that the applicable statute of limitations for the offense of aiding and abetting
under 18 U.S.C. Sec. 2 is the statute for the substantive offense charged. The
court observed:
34 U.S.C. Sec. 2 does not define a crime; rather it makes punishable as a principal
18
one who aids or abets the commission of a substantive crime.... Clearly one can
violate [26 U.S.C.] Sec. 7214(a) as an aider and abettor, and the offense, not the
persons involved, determines the applicability of the six-year period of limitation.
35
Id. Musacchia fails to address Campbell but its analysis controls in this case.
Accordingly, the statute of limitations for the substantive counts charged in the
indictment apply in this case. Counts 2, 4, and 6 charge aiding and abetting
violations under 26 U.S.C. Sec. 7201, which carries a six-year limitations
period as explicitly provided in 26 U.S.C. Sec. 6531(2). It follows that the
statute of limitations does not bar prosecution of these counts.
36
Counts 3, 5, and 7 charge aiding and abetting under 26 U.S.C. Sec. 7202-willful failure to account for and pay over gasoline excise taxes. Musacchia
argues for the first time on appeal that Sec. 7202 carries a three-year rather than
a six-year statute of limitations. Section 6531(4) mandates a six-year statute of
limitations "for the offense of willfully failing to pay any tax."5 In United States
v. Porth, 426 F.2d 519, 521-22 (10th Cir.), cert. denied, 400 U.S. 824, 91 S.Ct.
47, 27 L.Ed.2d 53 (1970), the court held, without analysis, that Sec. 7202 falls
within the six-year statute of limitations exception of Sec. 6531(4). Musacchia
relies on a more recent district court decision which held to the contrary, United
States v. Block, 497 F.Supp. 629 (N.D.Ga.), aff'd, 660 F.2d 1086 (5th
Cir.1980). Block held that the language of Sec. 6531(4) does not track the
language of Sec. 7202:
37seems unlikely to the Court that Congress would have used the language of so
It
many of the Sec. 7201 et seq. code sections when drafting the subsections of Sec.
6531 but omit use of the key words of Sec. 7202 if it had intended to make failure to
"pay over" third party taxes subject to the six-year statute of limitations.
38
497 F.Supp. at 632. A second factor in the Block court's determination was that
39
[Section]
6531(4) is directed at "the offense of willfully failing to pay any tax...."
(emphasis added), not a class of offenses. It is quite clear that failure to "pay over"
third party taxes [under Sec. 7202] is substantively different from failure to pay
taxes. See Slodov v. United States, 436 U.S. 238, 248-50, 98 S.Ct. 1778, 1785-1787,
56 L.Ed.2d 251 (1978).
40
41
The Block court's analysis is not convincing. Although Sec. 6531(4) does not
track the language of Sec. 7202 precisely, in the Supreme Court's decision in
Slodov v. United States, 436 U.S. 238, 249, 98 S.Ct. 1778, 1786, 56 L.Ed.2d
251 (1978), the terms "pay" and "pay over" were used interchangeably. In
Slodov, the Court interpreted 26 U.S.C. Sec. 6672, which applies to "[a]ny
person required to collect, truthfully account for, and pay over any tax," as
applying "only to failure to pay taxes...." 436 U.S. at 249, 98 S.Ct. at 1786.
Although the Court was analyzing a different provision of the code--the
significance of the word "any" modifying the word "person" under Sec. 6672-and did not focus on the distinction argued by appellants in this case, it is still
significant that the Court used the terms "pay over" and "pay" synonymously.
42
43
46
Since the Supreme Court's holding there have been a number of circuit court
opinions addressing the issues of (1) whether Gomez established a
jurisdictional bar to magistrates presiding over voir dire, and (2) whether
reversal is mandated where a defendant prior to Gomez either consented or
failed to object to empanelment before a magistrate. In two cases handed down
subsequent to Gomez, we held that Gomez did not create a jurisdictional bar to
a magistrate conducting voir dire, and that reversal is not mandated when a
defendant, prior to that decision, consented or failed to object to empanelment
by a magistrate. See United States v. Vanwort, 887 F.2d 375, 382-83 (2d Cir.)
(failure to object), petition for cert. filed (Dec. 21, 1989); United States v. Mang
Sun Wong, 884 F.2d 1537, 1546 (2d Cir.1989) (explicit consent), cert. denied, -- U.S. ----, 110 S.Ct. 1140, 107 L.Ed.2d 1045 (1990).
47
Here appellants, who were tried before Gomez was filed, neither consented nor
objected to voir dire by a magistrate. Under Vanwort, there is no question that
we do not find reversal warranted in these circumstances. Appellants contend-and the dissenting opinion concludes--that we may distinguish the instant case
from Vanwort because in this case the jury was selected after our holding in
United States v. Garcia, 848 F.2d 1324, 1332 (2d Cir.1988), rev'd sub nom.
Gomez v. United States, --- U.S. ----, 109 S.Ct. 2237, 104 L.Ed.2d 923 (1989),
which stated that "even absent a defendant's consent [and where a defendant
explicitly objects] the Federal Magistrates Act permits district courts to
delegate the task of jury selection in felony cases to a magistrate." We think the
distinction irrelevant.
48
In making this argument, appellants rely upon United States v. France, 886
F.2d 223 (9th Cir.1989). There, faced with a factual situation identical to that
now before us, the court held that failure to object would not amount to a
waiver because two earlier circuit cases "presented [the defendant] with a 'solid
wall of circuit authority' ... [that] had already decided, erroneously, that
magistrates could conduct voir dire in felony trials. Any objection to the
magistrate performing voir dire ... would, therefore, clearly have been futile."
Id. at 228. France was predicated on two Ninth Circuit en banc opinions
establishing that a defendant was excused from making a contemporaneous
objection when there was a "solid wall of authority" that would have prevented
a district court from upholding the defendant's objection. Id. at 227-28.
49
50
Nor did Garcia itself create authority sufficient to cause defense counsel to
believe any objection to jury empanelment before a magistrate would be futile.
The decision in Garcia was promptly appealed to the Supreme Court and
reversed a year later. In contrast, the Ninth Circuit already had ruled in two
cases decided four years prior to Gomez--certiorari had been denied in both-that magistrates were empowered to conduct voir dire under the Federal
Magistrates Act. See United States v. Peacock, 761 F.2d 1313 (9th Cir.), cert.
denied, 474 U.S. 847, 106 S.Ct. 139, 88 L.Ed.2d 114 (1985); United States v.
Bezold, 760 F.2d 999 (9th Cir.1985), cert. denied, 474 U.S. 1063, 106 S.Ct.
811, 88 L.Ed.2d 786 (1986). Thus, the posture of the issue in our Circuit is
more akin to that existing in the First Circuit where "[t]here was no binding
rule ... such as necessarily foredoomed an objection to magistrates'
empaneling." United States v. Lopez-Pena, 890 F.2d 490, 497 (1st Cir.1989)
(rehearing en banc filed Dec. 20, 1989).
51
We think that the magistrate had subject matter jurisdiction to conduct the voir
dire in this case. Federal courts are courts of limited jurisdiction empowered to
hear only those cases within the judicial power of the United States, as set forth
in Article III of the Constitution, and those over which Congress has conferred
to them a jurisdictional grant. See, e.g., Marbury v. Madison, 5 U.S. (1 Cranch)
137, 173-80, 2 L.Ed. 60 (1803). From this principle, it has been a
commandment etched into the edifice of federal jurisprudence for over 150
years that parties cannot confer subject matter jurisdiction on a federal court,
not granted it by the Constitution and Congress, although they may be willing
and even anxious for the court to hear and determine the case. See Jackson v.
Ashton, 33 U.S. (8 Pet.) 148, 149, 8 L.Ed. 898 (1834); cf. American Fire &
Casualty Co. v. Finn, 341 U.S. 6, 17-18 & n. 17, 71 S.Ct. 534, 542 & n. 17, 95
L.Ed. 702 (1951). Thus, when the Supreme Court stated that "[a] critical
limitation on [the magistrate's] jurisdiction is consent," it plainly was not
referring to the subject matter jurisdiction of the district court over a felony
criminal trial. Gomez, 109 S.Ct. at 2244.
53
included among these waivable objections, and may be raised at any time.
Fed.R.Crim.P. 12(b)(2). Subdivision (1) of Rule 12(b) provides for an objection
based on defects in the institution of the prosecution. It is in this category of
objectionable matters that the improper selection of the jury by a magistrate
falls. It is a "fair trial" right to have an Article III judge conduct voir dire of the
jury, see Gomez, 109 S.Ct. at 2248, and for the district court to direct the
magistrate to perform it is a defect in the institution of the prosecution.
54
Unable to square the Supreme Court's use of the word "jurisdiction" with
traditional notions of subject matter jurisdiction, see Gomez, 109 S.Ct. at 224445 (magistrate's present expanded criminal trial jurisdiction depends on
consent), we believe that what Gomez intended was that--absent Congress'
grant of authority in the magistrate to perform jury selection in a felony case-the improper reference to a magistrate is a waivable defect that must be raised
within the time permitted by Fed.R.Crim.P. 12(c) or it is waived under Rule
12(b). Thus, a magistrate's lack of jurisdiction to act absent consent is
analogous to a district court's lack of jurisdiction over the person, which is also
a defense that is waived unless promptly asserted. See United States v. Grote,
632 F.2d 387, 388-89 (5th Cir.1980) (failure to object to personal jurisdiction of
trial court because of faulty arrest warrant waived objection); 1 Wright, Federal
Practice and Procedure: Criminal 2d Sec. 193 (1982) (collecting cases). We
conclude that the defendant's failure to make a contemporaneous objection to
the delegation of jury selection to a magistrate thereby waives the objection.
Like our sister circuits, we do not find empanelment before a magistrate
reversible on appeal as "plain error." See Fed.R.Crim.P. 52(b).
55
In any event, we are constrained by our panel holdings in Vanwort and Wong
to rule that appellants, not having raised objection to the magistrate's selection
of the jury, waived their right to reversal on appeal. Hence, the judgments of
conviction must be affirmed.
56
Judgments affirmed.
LASKER, District Judge, dissenting:
57
58
59
60
In United States v. Mang Sun Wong, 884 F.2d 1537, 1546 (2d Cir.), cert.
denied, --- U.S. ----, 110 S.Ct. 1140, 107 L.Ed.2d 1045 (1990) the court denied
a post-Gomez petition for rehearing and affirmed its earlier ruling that reversal
is not required where "there was not only a failure to object, but explicit
consent, to the magistrate's selection of a jury." Wong is distinguishable
because of the absence of express consent in the case at hand.
61
However, the majority and the government rely on United States v. Vanwort,
61
However, the majority and the government rely on United States v. Vanwort,
887 F.2d 375, 382-83 (2d Cir.), petition for cert. filed, No. 89-6313 (Dec. 21,
1989), in which the court relied on Wong and held that where there was no
objection to the magistrate's selection of a jury, reversal was not required. The
Vanwort court did not recognize or analyze the distinction between the facts
before it (failure to object but no express consent) and the facts in Wong
(failure to object but express consent).1 The Wong court focused on express
consent, which was missing in Vanwort, as it is in the case at hand.
62
63
In United States v. France, 886 F.2d 223 (9th Cir.1989), one of three circuit
court decisions to have analyzed the question presented here, a unanimous
court held that Gomez applied retroactively to all cases pending on direct
review and required reversal even where appellants had not objected to jury
selection by a magistrate. The France court found "absolutely no indication in
the tenor or text of [Gomez ] to suggest that the Court relied on, or did more
than note--in the interest of providing a full and accurate description of the facts
before it--the fact the petitioners had objected to the magistrate's conducting
voir dire." Id. at 227. The France court concluded that any objection to the
magistrate's performing voir dire would have been futile and the appeal was
thus preserved. The court held that a party does not waive its right to challenge
a jury instruction if it fails to object at the time if there is a "solid wall of circuit
authority" which would have barred the district court from correcting the
alleged error. Id. at 227-28 (citing Guam v. Yang, 850 F.2d 507, 512 n. 8 (9th
Cir.1988) (en banc) and United States v. Scott, 425 F.2d 55, 57-58 (9th
Cir.1970) (en banc)). The court stated:
application, can be waived because a defendant did not guess that the law would
change some time after the error was committed.
886 F.2d at 228. 2
65
Most significant is the appellants' argument that their mere failure to object,
absent express consent, cannot constitute waiver because the magistrate had no
jurisdiction to preside. Such lack of jurisdiction requires reversal under Gomez.
The Gomez Court stated:
109 S.Ct. at 2244-45 (footnote omitted); see also United States v. Rubio, 722
F.Supp. 77, 82 n. 3 (D.Del.1989) ("after the Court's decision in Gomez, it
appears that the magistrate may not conduct jury voir dire in a felony trial
under the statute regardless of whether the parties consent").
68
Appellants argue persuasively that the Act's strict and explicit requirements of
consent for referring misdemeanor trials to magistrates mandate that such
consent must also be required to create jurisdiction in a felony case. See United
States v. Marcyes, 557 F.2d 1361, 1368 (9th Cir.1977) (requiring reversal
where Magistrate failed to advise defendant accused of minor offense of right to
jury trial, in violation of 18 U.S.C. Sec. 3401(b) (1988)); Hall v. Sharpe, 812
F.2d 644, 647 (11th Cir.1987) ("[e]xplicit, voluntary consent is crucial [to
provision of Act authorizing magistrates to conduct civil jury trials]"); Lovelace
v. Dall, 820 F.2d 223, 225 (7th Cir.1987) (unless party consents to have a
magistrate enter a final judgment pursuant to 28 U.S.C. Sec. 636(c)(1)(3)
magistrate lacks jurisdiction). Moreover, I find persuasive Judge Altimari's
dissent in Wong, 884 F.2d at 1546: ("In view of the principles expressed in
Gomez, ... a magistrate has no power to seat a jury in a felony case with or
without the defendant's consent.... Jurisdiction to preside at felony trials
remains the province of district judges."). See also Reale Int'l., Inc. v. Fed.
Republic of Nig., 647 F.2d 330, 331 (2d Cir.1981) ("parties cannot confer
jurisdiction on a federal court by consent or stipulation").
69
Honorable Morris E. Lasker, United States District Judge for the Southern
District of New York, sitting by designation
Although no objection was made when Cuomo was asked about the truthtelling provisions in his agreement, counsel for Musacchia had asked that his
objection to similar questioning of Ribando be deemed continuing
The evidence that Musacchia used the company he formed with Williams as
part of the illegal daisy chain scheme is not based on or affected by Williams'
testimony. Williams merely testified that he helped form CWM, established
certain bank accounts for the business and later helped dissolve the business.
Moreover, Williams testified that he never met or did business with Gambino
The Third Circuit has also equated failure to object with consent in holding that
Gomez does not require reversal in a case in which the appellant failed to
object. Government of the Virgin Islands v. Williams, 892 F.2d 305 (3d
Cir.1989)
In one of three other circuit courts to address this issue, United States v. LopezPena, 890 F.2d 490, 497 (1st Cir.1989) (rehearing en banc filed Dec. 20, 1989)
a divided panel concluded that "[b]ecause the precedential wall in this instance
was rather porous, there was no valid reason for defense counsel to believe that
timely objection to the magistrate's involvement would be futile," and that in
any event even in circuits in which courts had authorized magistrates' jury
selection the courts had not insisted that the practice be followed