E-137668
Decided by the Board May 27, 1954
Crime involving moral turpitude — Evasion of taxes in violation of 26 U.S.C. 145(b) — Denaturalization — Deportability under the Immigration and Nationality Act — Nolo contendere.
(1) Since moral turpitude inheres in the intent, the offense defined in 26 U.S.C. 145(b) is a crime involving moral turpitude.
(2) The relation back doctrine with respect to denaturalization applies to criminal grounds of deportation but not to documentary charges.
(3) A plea of nolo contendere is an admission of guilt or in effect a plea of guilty, but only for the purposes of the case. Since respondent entered this plea on advice of counsel and with the consent of the court and because the plea is equivalent to an admission of guilt, the plea is definitely final and completely binding upon respondent.
CHARGES:
Warrant: Act of 1952 —
Section 212(a)(20) — No immigrant visa.
Section 212(a)(9) — Convicted of crime prior to entry — Income tax evasion ( 26 U.S.C. 145(b)).
BEFORE THE BOARD
Discussion: This case is before us on appeal from a decision of a special inquiry officer dated September 23, 1953, directing deportation as a person who was excludable at time of entry under section 212(a)(9) of the act of 1952, as an alien convicted of a crime involving moral turpitude ( 26 U.S.C. 145(b); sec. 241(a)(1)).
Respondent, a 61-year-old native and citizen of Poland, last entered the United States at Miami, Fla., on December 30, 1952, after spending 2 days in Cuba in search of employment. On that occasion, he was admitted as a naturalized citizen upon presentation of a certificate to that effect. His first entry occurred in 1912 and he remained in this country until 1915 when he left to enlist in the Canadian army. He served in the military forces of Canada for 3 years and returned to the United States in 1918. From 1918 to 1938, respondent continuously resided in this country except for an absence of 1 day. In 1946, a record of his entry for permanent residence was created through registry under section 328(b) of the Nationality Act of 1940.
On July 24, 1947, respondent was naturalized in the District Court for the Southern District of New York. In May 1947, he was indicted for two counts of violating 26 U.S.C. 145(b), occurring in 1943 and 1944 in connection with taxes allegedly due in 1942 and 1943. On October 13, 1948, respondent was convicted on a plea of nolo contendere in the United States District Court for the Southern District of Florida. He was sentenced to 3 years' imprisonment and $5,000 fine, with the sentence being suspended and respondent being placed on 5 years' probation.
According to count I of the indictment, respondent alleged that he sustained a net loss in 1942, although he actually had a net income of $40,000. Count II charged that he understated his income by approximately $78,000.
Since respondent stated in his application for naturalization in 1947 that he had not been arrested or convicted, he was denaturalized on May 7, 1953, in the United States District Court for the Southern District of New York for making false statements and concealment of arrests or convictions. He was later convicted and sentenced for making these false statements to serve 6 months in jail, with the imprisonment being suspended and probation granted. The special inquiry officer determined that the crime for which respondent was convicted in 1947 (violation of 26 U.S.C. 145(b)) was a crime involving moral turpitude, citing Matter of A----, 56041/710, 1 IN Dec. 436 (B.I.A., 1943).
26 U.S.C. 145(b) provides as follows:
Failure to collect and pay over tax, or attempt to defeat or evade tax. Any person required under this chapter to collect, account for, and pay over any tax imposed by this chapter, who willfully fails to collect or truthfully account for and pay over such tax, and any person who willfully attempts in any manner to evade or defeat any tax imposed by this chapter or the payment thereof, shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, be fined not more than $10,000, or imprisoned for not more than 5 years, or both, together with the costs of prosecution. ( 53 Stat. 62, as amended October 21, 1942.)
Similar predecessor statutes are the following: Act of October 3, 1913, c. 16, sec. II, subdivision F.G. 38 Stat. 171, 177; act of September 8, 1916, c. 463, secs. 14, 18, 39 Stat. 772, 775 (sec. 18 amended by act of October 3, 1917, c. 63, sec. 1209, 40 Stat. 1085); act of February 24, 1919, c. 18, sec. 253, 40 Stat. 1085; act of November 23, 1921, c. 136, sec. 253, 42 Stat. 268; act of June 2, 1924, c. 234, sec. 1017, 43 Stat. 343; act of February 26, 1926, c. 27, sec. 1114, 44 Stat. 116; act of May 29, 1928, c. 852, sec. 146, 45 Stat. 835; act of June 6, 1932, c. 209, sec. 145, 47 Stat. 217; act of May 10, 1934, c. 277, sec. 145, 48 Stat. 724; act of June 22, 1936, c. 690, sec. 145, 49 Stat. 1703, as amended by the act of August 26, 1937, c. 815, title II, sec. 207(e), 50 Stat. 826.
Since the issue before us is whether the offense defined in section 145(b) is a crime involving moral turpitude, it is necessary to determine the judicial interpretation placed on the statutory language of this section. Counsel for the Immigration Service contends that the word "evade" is equivalent to fraud and, on the basis of Jordan v. DeGeorge, 341 U.S. 223 (1951), the crime necessarily involves moral turpitude. Counsel for respondent disputes this interpretation of section 145(b), since the court cases arising under this statute have not interpreted "evade" in such fashion.
The special inquiry officer mentioned Matter of A---- ( supra), which involved "intent to evade" a Canadian sales tax. This decision held that a violation of section 112(3) of the Special War Revenue Act of Canada was an offense involving moral turpitude. However, since we presently are considering a completely different type of tax statute and one that is not of foreign orgin, the A---- case is not controlling. In the instant situation, the courts have had an opportunity to pass on section 145(b) on numerous occasions and they must serve as our primary source of enlightment. Also, it is noted that Guarneri v. Kessler, 98 F.(2d) 580 (C.C.A. 5, 1938), was the chief authority in the A---- case and turned on a conviction for smuggling "with intent to defraud," which is an offense of quite different import from section 145(b).
Although many judicial decisions under section 145(b) are not helpful in the instant situation, some are of course relevant here. In Spies v. United States, 317 U.S. 492 (1943), the Supreme Court was called on to determine whether section 145(a) or section 145(b) applied to a person who failed to file an income tax return for a given year or to pay any tax, although his income for that year was sufficient to require him to do both. On that occasion, the court determined that there was evidence to support an inference of a willful attempt to evade taxes sufficient to support a conviction under section 145(b).
See also, Norwitt v. United States, 195 F. (2d) 127, 132 (C.A. 9, 1952); United States v. Troy, 293 U.S. 58, 62 (1934).
In United States v. Croessant, 84 F.Supp. 514 (E.D.Pa., 1949), the question before the court was Croessant's failure to include certain business income in his tax returns and whether this failure constituted a deliberate attempt to evade income taxes. In its decision, the district court stated: "A combination of willful omission and deliberate attempt to evade the tax constitutes the positive attempt that lifts the offense to the degree of (the) felony" which is censured in section 145(b). On appeal, 178 F.(2d) 96 (C.A. 3, 1949), the Court of Appeals said that there is a distinct difference between the failure to file any return (which was held to be no misrepresentation in Spies case) and the filing of a willfully false return, which endeavors to mislead the Government and is an affirmative act in violation of section 145(b). Since the court did not draw the inference that fraud is inherent in tax evasion, this judicial omission must be respected as binding upon us. The drawing of such an inference, we feel, would in fact be gratuitous and unwarranted on our part.
While United States v. Ragen, 314 U.S. 513 (1942), arose under section 145(b), the issue there turned on the deductability of commissions in a corporate income tax return and is of no assistance in solving the instant question. Although section 145(b) was involved in United States v. Johnson, 123 F.(2d) 111, 124 (C.C.A. 7, 1941); 319 U.S. 503 (1943), the Court of Appeals was concerned with questions so dissimilar to the present one that the decision is of no special help to us here. In addition, the decision was reversed later by the Supreme Court on grounds equally of little interest to us in the instant case.
In Battjes v. United States, 172 F.(2d) 1 (C.A. 6, 1949), the only question was whether the acts were "willful," as distinguished from a bona fide misconception of the law which resulted in an erroneous tax return, not whether the acts involved were tainted with fraud. United States v. Capone, 93 F. (2d) 840 (C.C.A. 7, 1937); cert. den., 303 U.S. 651 (1938), was concerned with 26 U.S.C. 145(a) and (b) and determined only that a failure to make a return under subsection (a) and a willful evasion under subsection (b) are in fact separate and distinct offenses. It is interesting to note that in the various cases discussed above the courts have attempted to correlate an intent to defraud with the statutory term "willful" in section 145(b).
Although numerous cases have been cited by the special inquiry officer, respondent's counsel, and the Immigration Service attorney, United States v. Scharton, 285 U.S. 518 (1932), is the controlling decision. Scharton was indicted under an identically worded statute for attempting to evade taxes during 1926 and 1927 by falsely understating his taxable income. The Supreme Court determined that the word "evade" did not involve defrauding or attempting to defraud, within the meaning of 18 U.S.C. 585 (Supp. V). This latter section stated that the statute of limitations on tax violations was 3 years, unless the offenses involved "defrauding or attempting to defraud," in which situation the statute of limitations was 6 years. Hence, under the Supreme Court's interpretation of the word "evade," only the 3-year statute of limitations applied and the action against Scharton was not timely.
It is noted in passing that numerous other cases have been considered and found inapplicable here. Among others are: United States v. Noveck, 273 U.S. 202 (1927); Braverman v. United States, 317 U.S. 49 (1942); Bridges v. United States, 346 U.S. 216, 231 (1953); United States v. Grainger, 346 U.S. 235 (1953); Wiggins v. United States, 64 F.(2d) 950 (C.C.A. 9, 1933); United States v. Tuffanelli, 131 F.(2d) 890 (C.C.A. 7, 1942); Marzani v. United States, 168 F.(2d) 133 (C.A.D.C., 1948); Dawley v. United States, 186 F.(2d) 978 (C.A. 4, 1951); United States v. Franklin, 188 F.(2d) 182 (C.A. 7, 1951); Bridges v. United States, 199 F.(2d) 811 (C.A. 9, 1952).
Sec. 1114(b) of the Internal Revenue Act of 1926; 44 Stat. 116; 26 U.S.C. 1266 (Supp. V).
Therefore, since the word "evade" in section 145(b) does not signify an intent to defraud, the DeGeorge test cannot be invoked. The moral turpitude question then turns on the crucial statutory word "willfully." According to Hargrove v. United States, 67 F.(2d) 820 (C.C.A. 5, 1933), "willful" in section 145(b) means actual knowledge of the existence of the obligation and specific wrongful intent.
In United States v. Carrollo, 30 F.Supp. 3 (W.D.Mo., 1939), the court determined that perjury under 18 U.S.C. 231 was a crime involving moral turpitude, although income tax evasion under sec. 145(b) did not constitute such an offense.
Although counsel for the Immigration Service has stated that the DeGeorge decision overruled the Carrollo case by implication, we feel that this is a misstatement since the two cases involved quite different types of revenue statutes. Our present decision is not based on this case.
It is noted in passing that the alien Carrollo has more recently been held deportable as one sentenced more than once under sec. 19(a) of the act of 1917. In United States ex rel. Carrollo v. Bode, 204 F.(2d) 220 (C.A. 8, 1953), the court determined that a conviction for conspiracy to commit an offense against and to defraud the United States by carrying on the business of a wholesale liquor dealer while willfully failing to pay a special tax required by 26 U.S.C. 3253 was in fact one involving moral turpitude. The second crime necessary for deportation was the perjury offense, mentioned in the earlier judicial proceeding. While there is a similarity between DeGeorge's offense under 26 U.S.C. 3321 and Carrollo's mere recent offense under 26 U.S.C. 3253, there is no parallel between the offense involved in Carrollo's most recent conviction and the offense defined in sec. 145(b).
See also, Potter v. United States, 155 U.S. 438 (1894); Spurr v. United States, 174 U.S. 728 (1899).
In Morissette v. United States, 342 U.S. 246 (1952), the Supreme Court made comments pertinent to the present question. The Court stated at pages 264, 265:
Congress has been alert to what often is a decisive function of some mental element in crime. It has seen fit to prescribe that an evil state of mind, described variously in one or more such terms as "intentional," "willful," "knowing," "fraudulent" or "malicious," will make criminal an otherwise indifferent act, or increase the degree of the offense or its punishment. Also, it has at times required a specific intent or purpose which will require some specialized knowledge or design for some evil beyond the common-law intent to do injury. The law under some circumstances recognizes good faith or blameless intent as a defense, partial defense, or as an element to be considered in mitigation of punishment. (Citing 26 U.S.C. 14(a), (b) as construed in Spies v. United States, 317 U.S. 492.)
We feel that the courts in passing on section 145(b), as well as in other cases like Morissette v. United States, have determined "willfully" connotes an evil intent, since it differentiates between conscious or deliberate acts and accidental or unintentional infractions. In addition, section 145(b) imposes a duty on the taxpayer to pay the amount he justly owes and failure to do so, through a willful attempt to evade, constitutes unjust enrichment of the taxpayer and an intent to deprive the Government of this tax money ( Spies v. United States, supra); United States v. Skidmore, 123 F.(2d) 604 (C.C.A. 7, 1941.)
Hence, since moral turpitude inheres in the intent the offense defined in 26 U.S.C. 145(b) is a crime involving moral turpitude.
U.S. ex rel. Mongiovi v. Karnuth, 30 F.(2d) 825 (W.D.N.Y., 1929); U.S. ex rel. Meyer v. Day, 54 F.(2d) 336 (C.C.A. 2, 1931); U.S. ex rel. Shladzien v. Warden, 45 F.(2d) 204 (E.D.Pa., 1930).
Counsel for respondent also argues that respondent is not deportable as a person who was in fact an alien at the time of entry, since respondent was a United States citizen when he last arrived in this country. Counsel disputes the applicability of the so-called relation back doctrine upon denaturalization in connection with this doctrine's effect on a prior entry as a United States citizen and possible deportation of the former citizen.
Respondent's denaturalization occurred on May 7, 1953, because respondent had made false statements in his naturalization application to conceal his indictment for attempted income tax evasion.
Respondent's last entry was on December 30, 1952, when he was admitted as a United States citizen at Miami, Fla., after an absence of 2 days in Cuba.
In support of this contention, counsel cites Matter of C----, A-5982828, 3 IN Dec. 275 (Atty.Gen., January 6, 1950). In that instance, the alien arrived in 1923; he was naturalized in March 1930; he left this country in August 1930; he reentered the United States on June 5, 1931, and was admitted as a citizen; and on March 28, 1944, his naturalization was canceled for actual fraud. Thereafter, a warrant of arrest was issued, charging that C---- had entered the United States in 1931 without the required visa. The Immigration Service contended that, since C----'s naturalization was canceled for actual fraud, he was never legally and really a United States citizen and was actually an alien at the time of reentry, required to present a reentry permit or visa in 1931. The Board held, and the Attorney General affirmed the view, that C---- was not deportable on documentary grounds; the relation back doctrine was rejected as a legal fiction based on the performance of an impossible act — the obtaining of a reentry permit in 1930, while C---- was still a citizen.
The Board stated on that occasion: "When respondent left the United States in August 1930 to visit in Europe and when he returned in June 1931, he was, both from a legal and from a factual point of view, an American citizen. He was free to cross our borders without restraint and without regard to any of the documentary requirements of the Immigration Act of 1924. In fact, even if he had wanted to, he could not have obtained, prior to departing, a reentry permit from the immigration authorities or, prior to returning, a returning resident's visa from the consular authorities abroad. Under the facts as they existed in June 1931, he was entitled to admission as a citizen and he was so admitted. The theory of the Service, adopted by us in our last decision, can be supported only through the use of the doctrine of relation back, a legal fiction at best ***. To us it seems unfair to seize upon a fiction to require respondent to have done that which was impossible of performance, namely, to present an immigration document at the time of his 1931 entry."
However, on the basis of United States ex rel. Eichenlaub v. Shaughnessy, 338 U.S. 521 (1950), the decision in the Matter of C---- ( supra), has been held by the Board to be limited to documentary charges and inapplicable to criminal grounds of deportation, Matter of P----, A-4068102, 4 IN Dec. 373, (B.I.A., 1951). In addition, the Board has determined that cancellation of an illegal naturalization, as in the present case, is the revocation of citizenship as a result of affirmative and willful conduct akin to fraud. For that reason, the relation back doctrine would apply and deportation is possible for a crime involving moral turpitude committed within five years of entry, Matter of B----, A-2544646, Int.Dec. No. 499 (B.I.A., 1953).
See appendix B for pertinent portions of the Supreme Court's decision.
The criminal charge in the P---- case was admission of commission of crime of perjury, prior to entry. P---- was admitted as a United States citizen in 1936 and denaturalized in 1938.
In the instant case, even though respondent was indicted in May 1947 for violating 26 U.S.C. 145(b), he was naturalized in the Southern District of New York in July 1947. His conviction occurred in October 1948 on a plea of nolo contendere in the United States District Court for the Southern District of Florida. Because respondent had stated in his naturalization application that he had not been arrested or convicted, cancellation of his citizenship followed in 1953, with a conviction for making false statements in the naturalization application also resulting.
Thus, since respondent last entered the United States on December 30, 1952, as a citizen and because respondent is now subject to deportation on a criminal ground, the relation back doctrine is applicable here. On the basis of Matter of P---- ( supra), and Matter of B---- ( supra), respondent did in fact make an entry within the meaning of sections 101(a)(13) and 241(a) of the Act of 1952. Matter of S----, A-8017222, Int.Dec. No. 563 (B.I.A., 1954). Consequently, he is deportable as an alien convicted of a crime prior to entry (section 212(a)(9)). On the other hand, respondent is not deportable on a no visa charge (section 212(a)(20)), Matter of C---- ( supra).
Cf., U.S. ex rel. Volpe v. Smith, 289 U.S. 422 (1933); U.S. ex rel. Pappageanakis v. Shaughnessy, 114 F.Supp. 371 (S.D.N.Y., 1933).
It is noted that Chew v. Colding, 344 U.S. 590 (1953), cited by counsel, is not responsive to the present problem.
It is noted in passing that respondent was convicted of violating 26 U.S.C. 145(b) on a plea of nolo contendere. Under the Federal Rules of Criminal Procedure, rule 11, the right to such a plea is clearly discretionary with the court. A plea of nolo contendere is an admission of guilt or in effect a plea of guilty, but only for the purposes of the case. Such a plea leaves open for review solely the question of the sufficiency of the indictment ( United Brotherhood of Carpenters Joiners v. United States, 330 U.S. 395 (1947); United States v. Frankfort Distilleries, 324 U.S. 293 (1945); United States v. Norris, 281 U.S. 619 (1930); Singleton v. Clemmer, 166 F.(2d) 963 (C.A.D.C., 1948); United States v. Cosentino, 191 F. (2d) 574 (C.A. 7, 1951)). Since respondent entered this plea on advice of counsel and with the consent of the court and because this plea is equivalent to an admission of guilt, the plea is definitely final and completely binding upon respondent.
Rule 11. Pleas. — A defendant may plead not guilty, guilty, or, with the consent of the court, nolo contendere. The court may refuse to accept a plea of guilty, and shall not accept the plea without first determining that the plea is made voluntarily with understanding of the nature of the charge. If a defendant refuses to plead or if the court refuses to accept a plea of guilty or if a defendant corporation fails to appear, the court shall enter a plea of not guilty. (See also Rules 12(a), 20, 32(a).)
For all of the foregoing reasons, respondent is definitely deportable as an alien convicted of a crime involving moral turpitude, committed prior to entry (sec. 212 (a)(9), act of 1952).
Counsel also suggests that some form of discretionary relief might be appropriate in the instant case. However, respondent is unable to establish good moral character during the past 5 years under section 101(f)(3), because he is deportable under section 212(a)(9). Consequently, he is ineligible for relief under section 244(a) and section 244(e). The appeal is accordingly dismissed.
Order: It is hereby ordered that the appeal be dismissed.
APPENDIX A
In the case of Morissette v. United States, 342 U.S. 246, the court stated in part:
A relation between some mental element and punishment for a harmful act is almost as instinctive *** Unqualified acceptance of this doctrine by English common law in the eighteenth century was indicated by Blackstone's sweeping statement that to constitute any crime there must first be a "vicious will." ***
Crime, as a compound concept, generally constituted only from concurrence of an evil-meaning mind with an evil-doing hand, was congenial to an intense individualism and took deep and early root in American soil. As the states codified the common law of crimes, even if their enactments were silent on the subject, their courts assumed that the omission did not signify disapproval of the principles but merely recognized that intent was so inherent in the idea of the offense that it required no statutory affirmation. Courts, with little hesitation or division, found an implication of the requirement as to offenses that were taken over from the common law. The unanimity with which they have adhered to the central thought that wrongdoing must be conscious to be criminal is emphasized by the variety, disparity and confusion of their definitions of the requisite but elusive mental element. However, courts of various jurisdictions, and for the purposes of different offenses, have devised working formulae, if not scientific ones, for the instruction of juries around such terms as "felonious intent," "criminal intent," "malice aforethought," "guilty knowledge," "fraudulent intent," "willfulness," "scienter," to denote guilty knowledge, or "mens rea," to culpability. By use or combination of these various tokens, they have sought to protect those who were not blameworthy in mind from conviction of infamous common-law crimes. ***
Neither this court nor, so far as we are aware, any other has undertaken to delineate a precise line or set forth comprehensive criteria for distinguishing between crimes that require a mental element and crimes that do not. We attempt no closed definition, for the law on the subject is neither settled nor static.
APPENDIX B
Pertinent portions of the Supreme Court's decision in United States ex rel. Eichenlaub v. Shaughnessy read as follows:
The above words require that all persons to be deported under this Act shall be "aliens." They do not limit its scope to aliens who never have been naturalized. They do not exempt those who have secured certificates of naturalization, but then have lost them by court order on the ground of fraud in their procurement. They do not suggest that such persons are not as clearly "aliens" as they were before their fraudulent naturalization. ***
In our opinion, it is not necessary, for the purposes of these cases, to give a retroactive effect to the denaturalization orders. A simpler and equally complete solution lies in the view that the act does not require that the offenders reached by it must have had the status of aliens at the time they were convicted. As the act does not state that necessity, it is applicable to all such offenders, including those denaturalized before or after their convictions as well as those who never have been naturalized. The convictions of the relators for designated offenses are important conditions precedent to their being found to be undesirable residents. Their status as aliens is a necessary further condition of their deportability. When both conditions are met and, after hearing, the Attorney General finds them to be undesirable residents of the United States, the act is satisfied. ***
If there were to be a distinction made in favor of any aliens because they were at one time naturalized citizens, the logical time at which that status would be important would be the time of the commission of the crimes, rather than conviction of those crimes. Not even such a distinction finds support in the statute.
The failure of Congress to give expression to the distinction between aliens who never have been naturalized and those who have been denaturalized, was not due to unfamiliarity with such matters. In 1920, Congress *** had had experience with the deportation of undesirable aliens under section 19 of the Immigration Act of February 5, 1917, 39 Stat. 889, chapter 29, see 8 U.S.C.A., section 155, F.C.A. title 8, section 155, as well as under other wartime acts and proclamations. These acts did not distinguish between aliens who never had been naturalized, and those who had obtained naturalization by fraud only to lose it by court decree.