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United States v. Benson

October 6, 1995

UNITED STATES OF AMERICA,

PLAINTIFF-APPELLEE,

v.

WILLIAM J. BENSON,

DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 87 CR 278 -- John F. Grady, Judge.

Before CUDAHY, RIPPLE and KANNE, Circuit Judges.

CUDAHY, Circuit Judge.

ARGUED MAY 19, 1995

DECIDED OCTOBER 6, 1995

William J. Benson was charged with two counts of the willful failure to file tax returns for 1980 and 1981, and a third charge of tax evasion for 1981. We reversed his original conviction on these charges in United States v. Benson, 941 F.2d 598 (7th Cir. 1991). A jury again convicted Benson after a second trial on the same counts. Benson again appeals. He challenges both the sufficiency of the evidence supporting his conviction and a number of the jury instructions chosen by the district court. We believe that the evidence was sufficient to support the jury's determination and that the jury instructions were not problematic. We therefore affirm.

I.

The following chronology documents William Benson's work activities over the last twentysomething years -- a history integral to understanding both Benson's alleged tax evasion and his defense to the charge. Additional facts are contained in our previous opinion in Benson's case, Benson, 941 F.2d 598 (7th Cir. 1991).

Originally employed by Bethlehem Steel Corporation, Benson developed a seizure disorder from a bout of encephalitis during the late 1960's. He soon began receiving disability benefits from the Social Security Administration. He continued to accept these benefits until March 1983.

Beginning in the early 1970's, however, Benson returned to work. He apparently first began working as a bartender at a bowling alley and cocktail lounge. Next, he started assisting the Illinois Department of Revenue (IDOR) with its investigative work. In 1971, he joined forces with IDOR as an informant. He then eventually began to perform most, or all, of the tasks that IDOR's regular investigators performed. In 1974, he entered into a formal employment contract with IDOR. The employment relationship lasted until 1976, when IDOR fired him.

A fair amount of litigation eventually arose out of Benson's employment relationship with IDOR. During 1975 and 1976, individuals filed a number of lawsuits against IDOR agents generally alleging false arrests arising from an IDOR investigation of violations of Illinois's cigarette tax laws (the cigarette tax cases). Benson was among the IDOR defendants being sued. Benson himself soon began making allegations of corruption in a number of IDOR's affairs. Because his termination from IDOR occurred around the time he began making these allegations, Benson also filed suit against IDOR, claiming that the state agency violated his First Amendment rights in a retaliatory termination.

Representation of the state defendants (including Benson) in these cases was initially undertaken by the Illinois Attorney General. However, in June 1976, the Attorney General withdrew from representation because of Benson's allegations of corruption against his codefendants. The defense of IDOR employees was thereafter undertaken by an insurance company.

During this time period, IDOR was covered by a liability insurance policy issued by Continental Insurance Company. Continental's adjuster was Underwriters Adjusting Company. Underwriters assumed the defense of IDOR employees in the cigarette tax cases. It did not, however, immediately defend Benson, waiting instead approximately two years to begin accepting responsibility for his defense. Underwriters was apparently under the impression, created by IDOR, that Benson was not an "employee" covered by the policy, but was instead an independent contractor responsible for his own defense.

Benson thus undertook his own defense for approximately one year. Then, in September 1977, attorney Andrew Spiegel began to represent him in the cigarette tax cases. In September 1978, Benson and Spiegel contacted Underwriters with documentation of Benson's employment status, and Underwriters agreed to undertake his defense. At that point, Benson had not paid any money to Spiegel for the representation rendered. By mid-November, Underwriters had paid Spiegel for all work done beginning with his entry into the case in September 1977.

Benson and Spiegel soon contacted Underwriters about work Benson had done on his own defense. They apparently prepared two different bills reflecting Benson's work. The first covered work done from November 1976 to October 1977 (when Benson was unrepresented). The second covered work from October 1977 to January 1979. They also agreed that Benson would continue to do the investigative work on his own cases.

In late 1979 or early 1980, Benson met with Charles Rhodes, Underwriters' Chicago branch manager, and asked whether Underwriters would reimburse him for the investigative work he had done defending his own case. Rhodes agreed to the requested reimbursement and told Benson to have Spiegel verify that Benson's work was necessary to his own defense. Spiegel wrote Rhodes a letter suggesting that he had employed Benson as an investigator and that he was billing Benson's time at $15 per hour. Rhodes agreed to this fee, and Speigel's periodic bills to Underwriters began to include regular charges for Benson's investigative work.

In July 1980, Underwriters paid Spiegel the first bill, which included a fee for Benson's investigative work. Thereafter, Underwriters paid the periodic bills that Spiegel would submit, each including amounts for Benson's investigative work. In March 1981, Benson was dismissed as a defendant in the cigarette tax cases, no damages having been assessed against him. In June 1981, Spiegel submitted two statements to Underwriters. The first was the final bill for the last two months of litigation, including Benson's investigative services for that time period. The second was the set of ...


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