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United States v. Mortimer

March 23, 1965


Author: Schnackenberg

Before SCHNACKENBERG and CASTLE, Circuit Judges and MERCER, District Judge.


Bernard Mortimer, defendant, has appealed from a judgment of the district court finding him guilty on a four-count indictment, charging him with willfully and knowingly attempting to evade a large part of income tax due and owing by him and his wife to the United States of America for the years 1957 to 1960 inclusive, under which judgment he was committed for imprisonment for a period of six months on each count, the sentences to run consecutively, and he was fined $1250 on each of said counts, cumulatively, and costs.

There was evidence tending to prove the facts which we now state.

Defendant is a physician and surgeon, who, during the taxable years, practiced from an office in Joliet, Illinois. His office work was done by Miss Shea, a nurse. Defendant showed her his records, which consisted of a daily log book and patients' account cards, referred to in the record also as ledger cards. The log book was designed to show for each day a list of the patients, the amount charged each patient, and the amount paid by each patient on that day. The purpose of a patient's account card was to show the charges due and the amounts paid by each patient, posted from the log book. Miss Shea kept these records during the years involved. The defendant instructed her to enter all receipts in the daily log book and to post from the daily log book to the patients' account cards.

Defendant testified that the receipts in the log book were totaled and he used the amounts so determined as the receipts from his practice as shown on his income tax returns. He further testified that he made a rough computation based on the number of deliveries he made since that was the primary source of his fees.

With defendant's consent, revenue agents Smith and Chau examined the log book for 1958. He was not able to find the log books for the other years. The agents were also shown a drawer containing patients' account cards. Defendant instructed his nurse to make the records available to the agents. They were unable to find account cards for some of the names written in the log book. They also noted that there were account cards on which there were entries of payments during the year 1958 that did not appear in the log book. Moreover, there was evidence showing defendant's course of conduct which resulted in some payments of $100 or over being omitted from the 1958 log book.

Smith prepared lists of names of patients for whom he had not observed account cards and gave them to the defendant or his nurse. Additional account cards were given to the agents as the doctor or his nurse found them. Smith testified that defendant told him that he never got around to systematically destroying old cards, that all the cards that he had were in the file, that there were no other records anywhere, and that those that were not in the file were destroyed as obsolete or were lost.

There was evidence that on March 27, 1962, Mrs. Lega, who had replaced Miss Shea, stated to Smith that she had found some cards in a file cabinet in the closet. This "bundle of cards" she gave to Smith and on March 30, 1962, when he telephoned defendant, he was told that defendant had found more cards, 309 of which cards defendant gave to Smith by April 12, 1962.

On May 3, 1962, Smith told defendant that he had found many cards since defendant showed the agents "this supposedly inactive file" and defendant said "What do you mean, supposedly inactive file?" Defendant stated he had given the agents all the cards he had and that he had no other file. On May 11, 1962, defendant told Smith that he had not found any more cards in his office. Smith then told defendant he "had found 862 cards in his hidden file" and defendant told Smith he resented the agent's implication that he was dishonest.

On May 14, 1962, Smith called defendant and asked if he had found the cards which Smith had asked about. Defendant said he had some cards and that Smith could come in and observe them. Smith went to defendant's office and found 42 cards on defendant's desk, 33 of which had entries on them for the years 1957 through 1960. Smith testified that these were the last cards he received from defendant's office.

The agents during their examination transcribed payments from 1590 patients' account cards to individual sheets for each patient. These transcriptions were separated into two groups, first, account cards obtained from the file drawer in defendant's private office, and cards given to him by defendant or his nurse from lists prepared by Smith, during the period from September 5, 1961 to March 30, 1962, and, second, transcriptions of account cards given to Smith after March 30, 1962.

The total amounts derived as patient receipts by the agents from their examination of defendant's account cards, as compared with the receipts reported on defendant's income tax returns for the years ...

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