United States v. Dean W. Loney

719 F.2d 1435 83-2 USTC P 9673 UNITED STATES of America, Plaintiff-Appellee, v. Dean W. LONEY, Defendant-Appellant. No. 82-1676. United States Court of Appeals, Ninth Circuit. Argued and Submitted Sept. 9, 1983. Decided Nov. 8, 1983. Carroll D. Gray, Asst. U.S. Atty., Spokane, Wash., for plaintiff-appellee. Robert H. Whaley, Winston & Cashatt, Spokane, Wash., for defendant-appellant. Appeal from the United States District Court for the Eastern District of Washington. Before WRIGHT, PREGERSON, and FERGUSON, Circuit Judges. PREGERSON, Circuit Judge: 1 A fourteen-count indictment charged Loney with violating 26 U.S.C. Sec. 7206 (1)-(2) (1976). He was acquitted on thirteen counts and appeals his conviction on one count, Count V, for subscribing his own false income tax return in violation of Sec. 7206. He contends, among other things, that the evidence was insufficient to prove guilt beyond a reasonable doubt, and that the district court abused its discretion in denying his post-trial motions, including a motion for judgment of acquittal. 2 The crucial issue is whether Loney willfully violated the law against subscribing false returns by signing his individual return culpably,…

dissenting:

Our duty on appeal is to determine whether the facts, considered most favorably to the government, could rationally lead the fact finder to conclude that the defendant was guilty. The majority point to a lack of evidence that defendant Loney had any change in mental state in the three months between signing the partnership return and signing his personal return.

The question is, however, not whether his mental state regarding two identical situations changed over time, but whether his mental state in the first situation differed from that in the second. The circumstances in the two situations were not identical. The trial court rationally found that the differences were significant enough to sup *1437 port his finding gross negligence in the first situation and willfulness in the second.

In the colloquy at sentencing, the trial judge indicated at several points his basis for differentiating between the signing in April of the faulty partnership return and the July signing of the fraudulent personal return.

As to the earlier partnership return, the court noted that the last minute tax season rush and possible accountant error were sufficient to raise a doubt as to…

A fourteen-count indictment charged Loney with violating 26 U.S.C. § 7206 (l)-(2) (1976). He was acquitted on thirteen counts and appeals his conviction on one count, Count V, for subscribing his own false income tax return in violation of § 7206. He contends, among other things, that the evidence was insufficient to prove *1436 guilt beyond a reasonable doubt, and that the district court abused its discretion in denying his post-trial motions, including a motion for judgment of acquittal.

The crucial issue is whether Loney willfully violated the law against subscribing false returns by signing his individual return culpably, knowing it falsely claimed a deduction for losses that his partnership, Montana Pacific Oil & Gas (MPOG Nos. 1-4), sustained in calendar year 1975. There can be no doubt that the term “willful” in 26 U.S.C. § 7206 (1) requires proof of specific intent to do something that the law forbids; more than a showing of careless disregard for the truth is required. United States v. Brooksby, 668 F.2d 1102, 1104 (9th Cir.1982).

This case was tried to the court. The court found that Loney’s tax return was wrong. He was the central figure and had set up all of the MPOG…