The opinion of the court was delivered by: BROTMAN
Defendant James F. Crispino is charged in the present indictment with four counts of tax evasion. Specifically, the indictment charges that Crispino knowingly and willingly under-reported his taxable income for calendar years 1977 through 1980, in violation of 26 U.S.C. § 7201. Presently before the court are pretrial motions by the United States and by the defendant which require the court to apply principles of double jeopardy and collateral estoppel to determine whether certain evidence which was the subject of defendant's acquittal in a prior criminal proceeding may be relitigated in the present trial.
In 1980, defendant Crispino was indicted along with fourteen codefendants in the Eastern District of New York on narcotics charges. He and his codefendants were charged with conspiring and participating in a criminal enterprise to import and distribute marijuana and methaqualone. A jury trial was conducted in early 1981 before United States District Judge Henry Bramwell of the Eastern District of New York. Although several of his codefendants were found guilty, Crispino was acquitted of all charges by a unanimous jury.
The present indictment for tax evasion does not charge violations of the narcotics laws, nor does it explicitly mention the drug transactions which were the subject of defendant's prior acquittal. The government has moved in limine, however, for an order permitting it "to introduce evidence of defendant's involvement in the drug transportation business to establish a likely source of defendant's unreported taxable income." Government's Notice of Motion, April 17, 1984. Defendant has cross-moved for an order dismissing the indictment "on the ground that it effectively is barred by the double jeopardy provision of the fifth amendment of the United States Constitution." Defendant's Notice of Motion, April 19, 1984. Defendant's arguments and submissions reveal that his double jeopardy argument proceeds on two levels. He argues, first, that the indictment and pending prosecution are barred in their entirety by the double jeopardy clause. In the alternative, he contends that the government is collaterally estopped from re-introducing evidence at this trial which was the subject of defendant's prior acquittal, thereby forcing him to relitigate against allegations of which he has already been acquitted.
The government has chosen to pursue this tax evasion prosecution using the "net worth" theory outlined in Holland v. United States, 348 U.S. 121, 75 S. Ct. 127, 99 L. Ed. 150 (1954). In Holland, the Court outlined a two-step showing as one means of satisfying the government's burden of proof in this type of case. First, the government must show that the taxpayer's net worth increased during the taxable period. 348 U.S. at 121. The Court recognized that "increases in net worth, standing alone, cannot be assumed to be attributable to currently taxable income." 348 U.S. at 137-38. The court therefore required as a second step in a "net worth" case that the government show to the jury's satisfaction the "likely source from which the net worth sprang." Id. at 138.
The controversy presently before the court arises from the government's intention to use as evidence of a "likely source" of defendant's income money earned from the drug trafficking enterprise of which he was acquitted in 1981. The government has conceded that it seeks to present to the jury the evidence and fact patterns which have previously been litigated with the resulting verdicts favorable to Crispino. It urges that it is not barred from relitigating these matters because qualitatively different showings are required in the two proceedings.
Under the government's theory, in the original trial federal prosecutors in the Eastern District of New York failed to prove beyond a reasonable doubt that the defendant was guilty of the narcotics offenses with which he was charged. In the instant case a different, lower showing is required, in that the government must only demonstrate a "likely" source of income beyond a reasonable doubt. Government's May 16, 1984, Letter Memorandum at 3. Because a "likely" source is a "qualified" rather than a "definite" showing, relitigation of the underlying evidence is not barred. Id. In support of its argument, the government relies on the series of United States Supreme Court opinions holding that a defendant's acquittal on criminal charges does not bar a subsequent civil action against the same defendant, "even though based on identical facts." United States v. One Assortment of 89 Firearms, 465 U.S. 354, 104 S. Ct. 1099, 79 L. Ed. 2d 361 (1984); One Lot Emerald Cut Stones v. United States, 409 U.S. 232, 237, 34 L. Ed. 2d 438, 93 S. Ct. 489 (1972) (per curiam); Helvering v. Mitchell, 303 U.S. 391, 82 L. Ed. 917, 58 S. Ct. 630 (1938).
Before turning to the relevant caselaw, the court will briefly summarize the previous prosecution, in which defendant was acquitted by a jury of all charges. At the request of the court, the parties have supplied it with the indictment, evidence, summations, charge and verdict from the prior proceeding. See Ashe v. Swenson, 397 U.S. 436, 444, 25 L. Ed. 2d 469, 90 S. Ct. 1189 (1970), discussed infra pp. slip op. 7-9.
Defendant Crispino was charged as one of fifteen codefendants with violations of various narcotics laws in contravention of Title 21 United States Code. Specifically, he was charged in Count One with taking part in a conspiracy between November 10, 1977, and November 11, 1978. The goal of the conspiracy, according to the indictment, was the importation and distribution of marijuana. Count Three of the indictment charged that in or about August, 1978, Crispino and the other defendants imported marijuana from outside the United States into Queens, New York. Count Five charged that in or about November, 1978, Crispino and the other defendants imported marijuana and methaqualone into Queens, New York, aboard the vessel "Terry's Dream." Three other counts of the indictment were dropped after it was returned.
When the case was ultimately tried to the point of verdict, only ten of the original fifteen defendants remained in the case. Of these all ten were charged with Count One. Seven were charged with Count Three, and six were charged with Count Five. Crispino was named in all three counts.
The prosecution's theory at trial was that the defendants were all part of a criminal conspiracy to distribute drugs after importing them by boat. Each of the defendants allegedly played a role in the group effort. A major component of Crispino's role in the alleged enterprise was as a mechanic, to keep the vessel which was to carry the drugs in good working order.
The prosecution introduced evidence that Crispino received and handled large sums of cash and questioned Crispino at length about his finances. Crispino denied all involvement in and knowledge of the alleged drug trafficking operation, and explained in detail the sources of his income during the time period in question.
At the conclusion of the trial, the jury reached unanimous verdicts as to all of the defendants. On Count One, five defendants were found guilty and five defendants were acquitted. On Count Three, two defendants were found guilty and five were acquitted. On Count Five, two were found guilty and four were acquitted. In each case, Crispino was among those acquitted.
The motions presently before the court involve the related doctrines of double jeopardy and collateral estoppel as applied to successive criminal proceedings. The court will discuss each of these doctrines and then apply them to the situation at bar.
The Fifth Amendment provides in relevant part: "nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb." At least three separate guarantees are embodied in the Double Jeopardy Clause: It prohibits against a second prosecution after acquittal, against a second prosecution after conviction, and against multiple punishment for the same offense. Illinois v. Vitale, 447 U.S. 410, 415, 65 L. Ed. 2d 228, 100 S. Ct. 2260 (1980). Of these guarantees the one relevant to the case at bar is the first -- a second prosecution after acquittal.
The underlying idea, one that is deeply ingrained in at least the Anglo-American system of jurisprudence, is that the State with all its resources and power should not be allowed to make repeated attempts to convict an individual for the same offense, thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity, as well as enhancing the possibility that even though innocent he may be found guilty.
Lydon, supra, 52 U.S.L.W. at 4463-64, quoting Green v. United States, 355 U.S. 184, 187-88, 2 L. Ed. 2d 199, 78 S. Ct. 221 (1957). The Supreme Court has ruled that the Double Jeopardy Clause attaches "great weight" to judgments of acquittal. Tibbs v. Florida, 457 U.S. 31, 41, 72 L. Ed. 2d 652, 102 S. Ct. 2211 (1982); United States v. DiFrancesco, 449 U.S. 117, 129, 66 L. Ed. 2d 328, 101 S. Ct. 426 (1980).
The fact of acquittal on one set of charges does not, of course, automatically bar all future criminal indictments and prosecutions of a particular defendant. Where the criminal charges brought in a second proceeding following acquittal are for different offenses or require different elements of proof, double jeopardy poses no total bar to the subsequent prosecution. Illinois v. Vitale, supra, 447 U.S. at 416; United States v. Dinitz, 424 U.S. 600, 606, 47 L. Ed. 2d 267, 96 S. Ct. 1075 (1976); Pinkerton v. United States, 328 U.S. 640, 90 L. Ed. 1489, 66 S. Ct. 1180 (1946).
It is thus immediately clear that defendant's argument that this prosecution is barred in its entirety must fail. Income tax evasion and the previous narcotics offenses with which defendant was charged are simply not the "same offenses." United States v. Dinitz, supra, 424 U.S. at 606. Moreover, the instant prosecution for tax evasion will require proof of facts not required in the earlier prosecution, e.g., that the defendant had a tax liability exceeding that which he reported to the Internal Revenue Service. Sansone v. United States, 380 U.S. 343, 351, 13 L. Ed. 2d 882, 85 S. Ct. 1004 ...