Appeals from judgments of the United States District Court for the Southern District of New York (Goettel, J.) convicting appellant Moon of conspiracy and filing false tax returns and appellant Kamiyama of aiding and abetting the filing of false returns, obstruction of justice, and perjury. Affirmed in part, reversed in part.
Oakes, Cardamone and Winter, Circuit Judges. Oakes, Circuit Judge (dissenting).
CARDAMONE, Circuit Judge:
Reverend Sun Myung Moon and Takeru Kamiyama appeal from judgments of conviction entered on July 16, 1982 in the United States District Court for the Southern District of New York following a six-week jury trial before Judge Gerard L. Goettel. Moon was charged basically with filing false income tax returns and Kamiyama with obstructing the investigation of those returns.
Paying income taxes is not America's most popular national pastime. But, most accept the certainty of taxes as part of the price of modern life. Tax fraud prosecutions usually do not present the myriad of constitutional problems involved here. Yet in this case the defense raises troubling issues of religious persecution and abridgment of free speech that are interwoven with other grounds for objection to the judgments below. In reducing this huge record and the veritable avalanche of arguments presented to what we hope is comprehensible form, we have divided this opinion into five major sections -- Denial of Bench Trial, Sufficiency of the Evidence, Jury Instructions, Miscellaneous Issues, and Kamiyama's Claims. Most of the issues raised have been addressed. Those not discussed are minor points that we consider wholly without merit.
We commend the manner in which Judge Goettel presided in this especially lengthy trial. Such errors as inevitably crept in were skillfully unearthed by counsel. Of course, defendants are only entitled to "a fair trial but not a perfect one." Lutwak v. United States, 344 U.S. 604, 619, 97 L. Ed. 593, 73 S. Ct. 481 (1953). Defendants did receive a fair trial and we affirm their convictions on all counts, except Kamiyama's conviction on Count Seven which is reversed.
The main indictment upon which Reverend Moon and Mr. Kamiyama were tried charged them in Count One with conspiracy, 18 U.S.C. § 371, to file false federal income tax returns, 26 U.S.C. § 7206(1), to obstruct justice, 18 U.S.C. § 1503, and to make false statements to government agencies, 18 U.S.C. § 1001, and to a federal grand jury, 18 U.S.C. § 1623. Counts Two, Three and Four charged Moon with filing false tax returns for 1973, 1974 and 1975, in violation of 26 U.S.C. § 7206(1). Counts Five and Six charged Kamiyama with aiding and abetting the filing of the false 1974 and 1975 returns, 26 U.S.C. § 7206(2). The remaining counts (Seven through Thirteen) charged Kamiyama with the substantive offenses of obstruction of justice through the submission of false documents to the grand jury, 18 U.S.C. § 1503, submitting false documents to the Department of Justice, 18 U.S.C. § 1001, and five counts of perjury, 18 U.S.C. § 1623. A separate indictment charged Kamiyama with an additional count of perjury.
At the conclusion of the trial on May 18, 1982 the jury returned guilty verdicts against both defendants on all counts. Moon was sentenced to concurrent terms of 18 months in prison on Counts One through Four and fined $25,000 plus costs. Kamiyama was sentenced to concurrent terms of six months in prison on all counts of which he was convicted and fined $5,000. Both sentences have been stayed pending this appeal.
Defendants moved in September 1982 for a new trial, alleging juror misconduct. After holding hearings on this issue, Judge Goettel denied the motion by order dated October 13, 1982 and issued an order on November 5, 1982 restraining all parties and their agents from communicating with the trial jurors without prior consent of the court. Defendants appeal from these two post-trial orders as well as from their convictions.
The case focused principally on bank accounts held in Reverend Moon's name in the Park Avenue office of the Chase Manhattan Bank. On March 27, 1973 Reverend Moon walked into the Chase branch and opened a personal checking account and a savings account. During the next nearly three years over 1.7 million dollars was deposited in these accounts in Moon's name, all but $200,000 of which was in cash. A substantial portion of the funds were transferred to high-yielding Chase time deposits held in Moon's name. During the years 1973-1975 these investments earned more than $100,000 in interest, not reported as income on Moon's tax returns for the years in question. Also at issue was $50,000 worth of stock issued to Moon in 1973 in Tong I1 Enterprises, Inc., a corporation organized in New York in 1973 by Moon and Kamiyama which was engaged in the business of importing products from Korea. The receipt of this stock, which the government apparently views as a dividend, also was not reflected as income on Moon's tax return.
The critical issue is whether, as the government claims, Moon owned these assets and was therefore required to pay income taxes on the bank interest and the value of the stock or, as the defense urges, Moon held these assets merely beneficially or as a trustee for the Unification Church. Before entering upon a discussion of this central issue, we first address contentions raised by the defendants as a result of the government's refusal to consent to defendants' request for a bench trial.
A. As a Denial of the First Amendment Right to Free Speech
It is the view of the defense that the government's reason for opposing the defendants' request for a bench trial is unconstitutional, so that the judge's acceptance of it was error of constitutional dimension mandating reversal. The factual background may be simply stated. At a rally in New York City's Foley Square on October 22, 1981 following his arraignment, Moon made a speech which was partially reprinted as a full page advertisement in the New York Times of November 5, 1981. He stated:
I would not be standing here today if my skin were white or my religion were Presbyterian. I am here today only because my skin is yellow and my religion is Unification Church. The ugliest things in this beautiful country of America are religious bigotry and racism.
In response to defense efforts to waive a trial by jury, the prosecutor wrote a letter to Judge Goettel dated March 11, 1982 stating her opposition and, referring to the excerpt quoted above, adding that defendants had raised -- and circulated worldwide -- questions about "the integrity and motives of this prosecution." It was the prosecutor's conclusion that a single factfinder would be placed in an "untenable" position and that there was an overriding public interest in the appearance as well as the fact of a fair trial, which could be achieved only by a jury. The government insisted that employing this normal and preferable mode of disposing of fact issues in a criminal trial would defuse the public criticism that had been leveled by Moon.
The defense argues that, on the contrary, insistence upon a jury trial had the effect of punishing Moon for exercising his First Amendment right of free speech. The punishment, so the argument runs, took the form of denying Moon a benefit, i.e., a nonjury trial, that he would otherwise have been entitled to. The underlying rationale for this argument is that Moon and his followers had received such negative press that, regardless of the government's protestations, it was impossible to obtain a fair trial with a jury and that this state of affairs was only exacerbated by Moon's speech.
Trial by jury is a constitutional right provided in Article III Section 2 of the Constitution. The Sixth Amendment guarantees that "in all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed." Nothing in the Constitution guarantees one the right to select his own tribunal or the right to a speedy and public trial by a fair and impartial judge. The right to trial by jury is a benefit granted an accused, see Gannett Co., Inc. v. DePasquale, 443 U.S. 368, 380, 61 L. Ed. 2d 608, 99 S. Ct. 2898 (1979), which a defendant has the power to waive. But before a waiver can be effective, the consent of the prosecutor and the sanction of the court must be obtained. See Patton v. United States, 281 U.S. 276, 312, 74 L. Ed. 854, 50 S. Ct. 253 (1930); Fed. R. Crim. P. 23(a). The ability to waive the benefit does not import a right to claim its opposite. And the Supreme Court has stated that because of "confidence in the integrity of the federal prosecutor, Rule 23(a) does not require that the Government articulate its reasons for demanding a jury trial at the time it refuses to consent to a defendant's proffered waiver." Singer v. United States, 380 U.S. 24, 37, 13 L. Ed. 2d 630, 85 S. Ct. 783 (1965).
Conclusive as that statement might appear, it does not end the matter. For the Supreme Court has also held that even though one has no right to a government benefit, such benefit may not be denied and when granted may not be conditioned or later revoked for a reason that infringes an individual's constitutional rights, especially First Amendment freedoms. See, e.g., Perry v. Sindermann, 408 U.S. 593, 597, 33 L. Ed. 2d 570, 92 S. Ct. 2694 (1972); Sherbert v. Verner, 374 U.S. 398, 405, 10 L. Ed. 2d 965, 83 S. Ct. 1790 (1963). But the defendant has presented no facts on this record that convince us that the government's reason for refusing to consent to a bench trial was impermissibly to punish Moon for exercising his First Amendment rights. Instead, it appears that the public prosecutor elected, as was her right and based upon the reasons she gave, to have this case tried in the constitutionally preferred manner. Without the factual predicate to support his argument, the defendant's claim of error evaporates.
B. As the Denial of the Right to a Fair Trial
Moon also contends that prior to the voir dire there was an unacceptable risk that a fair jury could not be selected and therefore that the denial of a bench trial violated his right to a fair trial.*fn1 This argument, like the previous one, urges that there was a reasonable likelihood in advance that public animosity toward Moon and his religion would prevent a fair trial. In our view this debatable contention could be satisfactorily resolved only upon the voir dire of prospective jurors. See Application of Cohn, 332 F.2d 976, 977 (2d Cir. 1964). Ordinarily, insisting that a defendant undergo a jury trial against his will does not run afoul of a defendant's right to due process and a fair trial. Singer v. United States, 380 U.S. at slip op. 34-36. Certainly we recognize, though, that there might be cases where the circumstances are so compelling that for the court to countenance the government's insistence on a jury trial over the defendant's request to be tried by a judge alone would deny the defendant a fair trial. See Singer v. United States, 380 U.S. at 37. This is not such a case. Compelling circumstances are not demonstrated simply by claims of an atmosphere poisoned by a negative press. The validity of such claims is properly shown upon a voir dire of prospective jurors. The trial court, wisely recognizing that this was a safer avenue to follow in order to ascertain whether a fair jury could be obtained, properly reserved until after the voir dire its option to overrule the government's refusal to waive a jury trial.
Additionally, review of the transcript of the seven painstaking days of jury selection, involving the interrogation of 63 out of 200 veniremen for the panel and 17 for the six alternate positions, convinces us of the accuracy of the trial court's finding after selection was completed that "we have gotten a jury which is, if not totally free from bias, by and large capable of putting aside the bias they have and deciding the case on the merits of the charges." Jurors need not be totally ignorant of a defendant in order to be fair and unbiased. See Dobbert v. Florida, 432 U.S. 282, 302, 53 L. Ed. 2d 344, 97 S. Ct. 2290 (1977); Murphy v. Florida, 421 U.S. 794, 798-800, 44 L. Ed. 2d 589, 95 S. Ct. 2031 (1975). Even where a prospective juror has formed some preconceived opinion as to the guilt of the accused in the case on trial the juror is sufficiently impartial if he or she can set aside that opinion and render a verdict based on the evidence in the case. Murphy v. Florida, 421 U.S. at 799-800; Irvin v. Dowd, 366 U.S. 717, 722-23, 6 L. Ed. 2d 751, 81 S. Ct. 1639 (1961); United States v. Murray, 618 F.2d 892, 899 (2d Cir. 1980). Significantly, defense counsel only challenged one of the 12 jurors for cause, and the denial of that challenge is not raised on appeal. See Beck v. Washington, 369 U.S. 541, 557-58, 8 L. Ed. 2d 98, 82 S. Ct. 955 (1962) (failure to challenge for cause prospective jurors is strong evidence defendant considered jurors not biased). Absent a clear abuse of the trial court's discretion, one that results in manifest prejudice to defendants, the finding made by the trial judge that the jury was fair and unbiased must be upheld. See United States v. Brown, 644 F.2d 101, 104 (2d Cir.), cert. denied, 454 U.S. 881, 70 L. Ed. 2d 195, 102 S. Ct. 369 (1981).
SUFFICIENCY OF THE EVIDENCE
A. Counts Two Through Six
Defendants argue that the evidence presented was insufficient to find them guilty beyond a reasonable doubt on the substantive tax offenses charged in Counts Two through Six. To find defendants guilty of fraud in the filing of Moon's income tax returns, the jury had to find that statements contained in the returns which were verified as true were in fact false, and that these false statements were willfully made. Viewing the evidence in the light most favorable to the government and considering that all questions of credibility are within the exclusive province of the jury, there was ample evidence to find that Moon willfully filed false tax returns for the years 1973-75 and that Kamiyama willfully aided and abetted in the false 1974 and 1975 filings.
(a) Moon's Financial Picture
We examine first the evidence regarding falsity. In order to do so we sketch briefly defendants' financial picture. In November 1972 when Reverend Moon visited the United States he was already a successful businessman, being founder and chairman of the boards of eight publishing and manufacturing companies in his native Korea. The Unification Church of New York had begun purchasing and importing ginseng tea and marble vases from some of Moon's Korean companies. In June 1973 Kamiyama incorporated Tong I1 Enterprises in New York which purchased and sold these items. Moon subscribed to 500 shares for $50,000 which, according to some of the corporation's records, he paid for. His wife subscribed to 200 shares for $20,000 and Kamiyama subscribed to 100 shares for $10,000, all from an original issue of 1005 shares. Thus, Moon and his wife had 70 percent control of the company and Moon was elected chairman of its board. Although 500 shares were issued to Moon, he did not actually pay for them, as he had originally obligated himself to do. Instead the stock was issued to him without payment in 1973, apparently in exchange for various assets transferred to Tong I1 by other corporations which Moon controlled. In the spring of 1974 Moon began drawing a salary from this enterprise as a "business consultant" and at the same time opened a checking account, known as the "household account," in the Chase Manhattan Bank into which his salary was deposited.
As noted, about a year earlier, Moon had opened a different personal checking account ("checking account") and an individual savings account at the Chase Manhattan Bank. Subsequently, on April 9, 1973, Moon personally deposited $100,000 into the checking account. During the three-year course of his relationship with the bank approximately $1,724,774 was deposited into Moon's various accounts. Commencing in late 1973 he transferred from the checking and savings accounts, and directly deposited, a substantial portion of the $1.7 million in high-yielding Chase time deposits. These time deposits were also held in Moon's name, and on his instructions they, together with the interest earned on them, were rolled-over. The total interest earned on all the Chase accounts in the relevant years, 1973-75, was approximately $106,650.
With respect to living expenses, the household account at Chase was used by Moon primarily to pay the private school expenses of his children. Ordinary personal and household expenses were paid for by the Holy Spirit Association for Unification World Christianity (HSA-UWC), incorporated in California in 1961 as the American branch of the Unification Church.
Having outlined the Tong I1 stock and Chase accounts transactions, we complete Moon's financial picture by describing the real estate dealings pertinent to this case. A month before Moon's November 1972 arrival in the United States HSA-UWC purchased "Belvedere," the 20 acre Bronfman estate in Tarrytown, New York, for $750,000. The seller took back a $550,000 mortgage and the $200,000 balance was paid by HSA-UWC. When Moon came in 1972 he occupied the main house on this estate. In the fall of 1973 an adjoining estate became available. It was purchased that October in the name of HSA-UWC for $631,827. To complete the purchase Moon loaned HSA-UWC $361,827 from the checking account at Chase. He also issued his personal check to Sotheby Park Bernet for $51,160 to pay for furnishings in the estate, which he named "East Garden." In late 1973 Moon's family came from Korea. He and his staff moved out of Belvedere and, together with his family, took up residence in East Garden.
Under the government's theory of the case, Moon failed to report interest income earned on the Chase Manhattan Bank accounts that he purportedly owned and income recognized as a result of a distribution of Tong I1 stock to him at no cost.*fn2 Appellants' principal contentions at trial were that the Chase accounts and Tong I1 stock belonged to the Church, that Moon merely held these assets as the nominee, agent, and/or trustee of the Church, and that therefore he was not taxable on either the Chase interest or Tong I1 stock distribution.
In concluding that the jury properly found the Chase accounts and Tong I1 stock to be Moon's personal property, we start first with the fact that the Chase accounts and Tong I1 securities were maintained in Moon's name and controlled by him. Second, some funds clearly destined for Church entities were put in existing Church bank accounts which were owned and controlled by church corporations. Third, from his handling of the Chase accounts and Tong I1 stock Moon seemingly regarded them as his own, not as belonging to the Church. Fourth, high ranking members of the Church were told that the Chase funds belonged to "Father," not to the Church.
The government introduced evidence that Moon actually considered the Chase accounts to be his own property rather than the Church's, and that he used funds from the accounts for expenditures which the jury could have concluded were personal in nature. Several examples will suffice. In September 1975 Moon and Kamiyama purchased shares in a new bank, Diplomat National Bank in Washington, D.C., $80,000 worth of stock for Moon and $75,000 for Kamiyama. The funds used to pay for the stock were derived from one of Moon's time deposits at Chase and transferred into the household account, and later a check drawn on that account was made payable to the Diplomat National Bank.
In 1973, when HSA-UWC purchased East Garden, Moon loaned HSA-UWC $361,827 from the checking account to complete the $631,827 purchase. This transfer was carried on HSA-UWC's books as a personal loan from Moon. Later, when HSA-UWC was unable to meet mortgage payments on the $500,000 mortgage on "Belvedere," Moon broke a Chase time deposit and loaned $175,000 to the Church organization. HSA-UWC repaid Moon $70,000 of this loan, writing off the $105,000 balance as a personal contribution from Moon. The jury might well have inferred from the bookkeeping entries concerning these transactions that HSA-UWC considered the Chase funds Moon's exclusive property.
In November 1973 Moon directed that title to East Garden be transferred to him because he had supplied most of its purchase price from his personal funds, i.e., the Chase accounts. But before Moon's subordinates could complete this transfer they were informed by Church lawyers that Moon would have to pay the estate's fair market value of $700,000 in order to avoid adverse tax consequences for himself and the Church. To create this $700,000 consideration, loans to HSA-UWC from Moon amounting to $361,827 were falsely increased on the Church books to $700,000. Moon then signed a Release and Cancellation of Indebtedness Agreement covering the $700,000 purchase price for East Garden. Even though this document was never actually used, by signing it Moon implicitly acknowledged that the $361,827 used to pay for the property, which had come from the Chase accounts, was his own.
Finally, the documents given by the defendants to the Justice Department to support their theory that Moon held the Chase funds and Tong I1 stock other than individually were revealed to be fraudulently backdated. To understand how this came about it is helpful to capsulize Moon's finances at the beginning of 1974. At that time Moon had $556,000 in Chase time deposits, an outstanding loan of $361,827 to HSA-UWC made in connection with the purchase of East Garden, $50,000 and $4,000 in his Chase checking and savings accounts respectively and $50,000 worth of Tong I1 stock. East Garden had $51,160 worth of furnishings purchased from Sothebys. These assets had a value in excess of a million dollars. At this point the leaders of HSA-UWC consulted a Washington law firm regarding a number of business and financial matters, including the transfer of East Garden into Moon's own name. The leaders were advised by counsel to keep Moon's assets separate from those of the Church, that Moon had to file a personal income tax return, that as a resident alien he was taxable on all income to him from whatever source, and that the custom of providing substantial gifts to Reverend Moon in kind or cash should be terminated.
After meeting with lawyers and accountants on January 3 and 4, 1974 it was decided not to have these professionals handle Moon's 1973 tax return. Instead, Kamiyama was to be in charge, preparing the return under Moon's instructions. Records were produced to account for the nearly 1.8 million dollars deposited into the Chase Manhattan Bank and to show these as the Church's assets rather than Moon's. Three hundred and fifty thousand dollars was accounted for as "loans" from leaders of Unification organizations in England, France, Germany, Italy and the Netherlands. Each loan, signed by Kamiyama, bore a date and amount which matched, or in combination matched, a deposit into the Chase account in 1973. Another 1.2 million of cash deposited into Chase was accounted for by Japanese church members who, it was said, carried this money into the United States in amounts of three or four thousand dollars each. A ledger was kept -- the Japanese Family Fund Ledger -- with hundreds of entries showing a name, date of contribution and amount. The ledger also showed disbursements labelled "donations" which matched precisely the deposits into the Chase accounts.
With respect to the loans from the European leaders ostensibly made and entered into a loan ledger in 1973, a watermark expert established at trial that the paper on which these 1973 transactions occurred had not been manufactured until 1974. The Japanese Family Fund Ledger was also shown to be manufactured after the fact. Because some of the bank deposits consisted not of cash but of checks from sources other than Japanese donors, the government was able to demonstrate the falsity of the ledger. A comparison of Chase deposit slips, which included checks not reflected in the ledger, with the Japanese Family Fund Ledger revealed "donation" disbursements on the same date in the exact amount of each Chase deposit. A discrepancy appeared because the ledger disbursement indicated that the entire deposit in the same amount as the deposit slip was cash, while the proof at trial demonstrated that the deposit was partly in checks. Thus unravelled it appeared that Kamiyama's aide, Yukiko Matsumura, had constructed the ledger simply by working backwards from Moon's bank statements and deposit slips to create fictitious cash sources to account for all of the deposits at Chase. Since she mistakenly thought each deposit was all cash the ledger entries and the total amount deposited into the bank accounts matched perfectly. When checks were included in the totals, however, the fraudulently backdated nature of the ledger was clearly revealed.
In sum the government presented evidence at trial that Moon controlled the Chase accounts and Tong I1 stock, held them in his own name, considered the Chase accounts his own, used the accounts in a seemingly personal manner, and was regarded by other Church figures as owning the assets personally. Additionally, the documents produced by the defendants to show that the assets were in fact Church property proved to be backdated and false. Viewing this evidence in the light most favorable to the government, it is sufficient to establish that Moon owned the Chase accounts and Tong I1 stock in a personal capacity. Because he owned the assets, he should have reported the interest and stock distribution income on his tax returns. Since he failed to do so, his 1973-75 returns were false.
We turn to the evidence that Moon willfully filed income tax returns for the 1973-75 tax years knowing that these returns contained false information and that Kamiyama willfully aided and abetted the 1974 and 1975 filings. Willfulness in tax fraud cases has become equated with bad faith, want of justification or knowledge that the taxpayer should have reported more income than he did. See United States v. Bishop, 412 U.S. 346, 360, 36 L. Ed. 2d 941, 93 S. Ct. 2008 (1973). The Supreme Court collected the formulations cited in Bishop and reduced them to the statement that willfulness in the context of filing a false income tax return "simply means a voluntary, intentional violation of a known legal duty." United States v. Pomponio, 429 U.S. 10, 12, 50 L. Ed. 2d 12, 97 S. Ct. 22 (1976).
The evidence presented on this issue, although circumstantial, was sufficient to sustain the jury's verdict. The salient points follow. Moon signed his 1974 and 1975 returns, acknowledging that he had read them and that they were accurate, and he signed an RSC-12 form giving similar assurances as to his 1973 return; Moon and Kamiyama both knew of Moon's interest income at Chase and income from the distribution of Tong I1 stock; Moon actively supervised all of his personal financial matters and never signed anything until he understood it; Moon's 1973 "personal income tax matters [were] being handled under his instructions by Mr. Kamiyama" (quoting from a wire communication sent by a Unification Church official); Kamiyama participated in the completion of Moon's 1973 returns directly; and the public accounting firm that prepared Moon's 1974 and 1975 returns was provided with false information and fraudulently backdated documents. As an example of this last point, the preparers of the 1974 return were shown the "loans" ledger of transactions from the European Church leaders to Kamiyama. These "loans" amounted to $200,000. The ledger then reflected that Kamiyama made a loan to Moon (backdated and signed by both defendants) for the $200,000. The accountants were advised that these loan agreements evidenced the fact that the funds on deposit in the Chase Manhattan Bank earning interest in Moon's name were not his funds, but were held by him only as nominee for the Church. Noteworthy is the fact that appellants' initial tax attorneys informed HSA-UWC leaders prior to the filing of Moon's 1973 return that he would have to pay taxes on all of his United States income, from whatever source it was derived. No interest income was declared on the 1973 return, and only small amounts the two succeeding years. For example, Moon's 1973 return declared $14,458 income from the Unification Church of New York and no interest earned, although there was earned interest of $3,208 on the Chase accounts. On the 1974 return, reported income was $20,520 from Tong I1 and $254 interest earned, although the deposits at Chase earned $59,079. On the 1975 return Tong I1 income was reported at $37,080 and interest of $267, although the accounts at Chase earned $43,841. Moon apparently knew that the interest he reported in 1974 and 1975 on the small savings account at Chase was income to him; thus it seems reasonable for the jury to conclude that he also knew that the interest on his time deposits at the same bank, which came from withdrawals from the checking and savings accounts, was also income to him. We are unable to accept defendants' argument that as new residents of the United States they were unfamiliar with tax law. Not only are both defendants sophisticated businessmen, but they had at their disposal a small army of tax attorneys and accountants whose advice, unfortunately, was not sufficiently heeded.
Finally, Moon's signing of the aborted Release of Indebtedness on the East Garden transfer, discussed earlier, was an acknowledgment by him that the Chase accounts in his name were actually his funds and at the same time evinced his willingness to sign a false document to escape personal income tax liability.
B. The Conspiracy Count (Count One)
Moon next argues that the government presented no evidence that he personally entered into or participated in a conspiratorial agreement to file false tax returns or obstruct the tax fraud investigation against him. The facts adduced at trial contained ample evidence that several subordinates of Moon engaged in a continuing and agreed upon course of conduct amounting to a conspiracy to file false returns and obstruct justice. Included among these was Kamiyama, whose participation in the preparation of the 1973 return and whose part in the false and backdated "loan" agreements submitted to the accountants for preparation of the 1974 and 1975 returns has already been recounted. Viewed in the light most favorable to the government, Moon's argument of lack of involvement is unpersuasive. Not only was Moon the person with the greatest personal stake in the success of the acts in question, but there was proof that he exerted close scrutiny over his own personal affairs and was aware of the information contained in his tax returns. He signed one of the postdated loan agreements (the $200,000 loan from Kamiyama to Moon) which was later submitted to the IRS in connection with the audit of his returns. Finally, Moon and his associates, through Moon's personal lawyers, submitted to the Justice Department in 1981 the same falsely backdated documents that had earlier been submitted to the IRS and to Moon's accountants. In short, there was ample evidence for the jury to find that Moon participated in a conspiracy to file false tax returns and/or obstruct justice.
Moon objects to the trial court's instructions to the jury in three particular areas. First he contends that the instructions on the law of trusts were erroneous and incomplete. Second, he argues that certain instructions violated the First Amendment's Religion Clauses. And third he questions the instructions on intent. Although specific objections overlap to some extent, we will deal with them separately.
Perhaps the most crucial area concerns the trial judge's charge on the law of trusts. Despite the fact that Moon did not, until late in the trial, clearly raise the claim that he was holding the assets in question in trust for the International Unification Church movement, the district court saw fit to instruct the jury on this defense theory. The defendant now objects to what he claims are errors and omissions in this charge. We believe that defendant's contentions fail, first, because the trial court was not required to charge the jury on the trust issue and, in any event, because the trust instructions were neither erroneous nor prejudicial.
As a preliminary matter, it is essential to inquire as to who had the burden of proof on the trust issue. Of course, the government must prove every element of the offense charged beyond a reasonable doubt. One of those elements is that Moon had income from the Chase accounts and the Tong I1 stock distribution that he failed to report. Defendant may then present an "affirmative defense," one which does not rebut an element of the crime, or some other defense which rebuts an element of crime. If defendant asserts an affirmative defense he bears the burden of proof on it. Here, since the defense theory that Moon was acting only as a trustee rebuts the "ownership" element of the crime charged, it was not an affirmative defense. Hence, the only burden on Moon was to present a prima facie case that he held the assets in trust. If the defense had successfully introduced into evidence this prima facie rebuttal of the element of ownership, the trial court would have been obliged to instruct the jury on the law of trusts and the government would still have had to prove beyond a reasonable doubt that Moon "owned" the assets.
A careful review of the evidence, however, reveals no proof that Moon actually held the subject funds in trust. In order to establish the defense of trusteeship, defendants would have had to produce evidence of the donors' intent to create a trust. Yet the only evidence even remotely touching on this issue was the testimony of Church members Matsumura and Porter and German Unification Church leader Werner who simply stated that they gave money to Moon, intending it as a donation to their church. They never mentioned the word "trust" or, more importantly, gave any indication that they intended to create a trust relationship. Accordingly, this evidence only demonstrated the charitable intent of the contributors, not the clear expression of intent necessary to create a trust.
Under New York law, which governs the issue of ownership, it is well settled that a donor's intent to create a trust must be clear and unequivocal. This rule is not limited to private trusts, as defendant claims, since the creation of a charitable trust also requires a clear expression of intent. See, County of Suffolk v. Greater New York Councils, Boy Scouts of America, 51 N.Y. 2d 830, 832-33, 433 N.Y.S.2d 424, 413 N.E.2d 363 (1980); Lefkowitz v. Cornell University, 35 A.D.2d 166, 173, 316 N.Y.S.2d 264 (4th Dep't 1970) (while no particular words are required to create a charitable trust, the words relied upon to create such a trust must be unequivocal), aff'd, 28 N.Y.2d 876, 322 N.Y.S.2d 717, 271 N.E.2d 552 (1971); 4 Scott on Trusts § 348, at 2769-70 (3d ed. 1967) (as with a private trust, person creating a charitable trust must manifest by his words or conduct an intention to create it); Restatement (Second of Trusts) § 351 (1959).
The dissenting opinion, unfortunately, obscures the intent requirement, focusing instead on a totally distinct and, for purposes of this analysis, inapposite issue -- the policy of upholding charitable trusts whenever possible by construing their terms liberally. For this proposition, the dissent cites In re Price's Will, 264 A.D. 29, 35 N.Y.S.2d 111 aff'd 289 N.Y. 751, 46 N.E.2d 354 (1942), and In re Durbrow's Estate, 245 N.Y. 469, 157 N.E. 747 (1927), neither of which controls here. Each of these cases involved a written will which plainly expressed the testator's intent to create a trust. More specifically, Price's Will applied the cy pres doctrine and held that a charitable trust already in existence survived even after its primary purpose had terminated. Similarly, Durbrow's Estate held that a charitable trust will not fail for want of a definite beneficiary. It is true, therefore, that both of these cases support the policy of upholding charitable trusts; however, neither stands for the proposition that a charitable trust comes into being absent the clearly expressed intent to create it. Since the intent to create such a trust was clearly indicated by the written wills in Price's Will and Durbrow's Estate, the question of intent to create a charitable trust was not in issue.
Contrast these cases with the present one. Here, there is no evidence of intent to create a trust, only the vague testimony of three witnesses establishing that a charitable gift had been made to the Church. Although we agree with the dissent's assertion that charitable trusts must be liberally upheld, there is no rule of law that presumes simply from a charitable gift the donor's intent to create a trust.
Thus, since defendants failed to make a prima facie case that Moon held the Chase accounts and Tong I1 stock in trust, the trust issue was one that need not have been charged to the jury in the first instance. Any purported errors or omissions in the instructions were therefore harmless.*fn3
In any event, we find that the defendant's objections to the trust instructions are without merit. Moon challenges the use of what he terms a "laundry list" of factors which the trial court instructed the jury to consider in determining whether a trust existed. He now asserts that important factors were omitted from this list, the vital issues of source of funds and donor's intent were buried in this extensive list, and some factors were misleading.
The claim of omissions is spurious, as all the factors alleged to be omitted were clearly charged. In connection with the first of these factors, i.e., whether the International Unification Church movement "had a specific organizational structure, written charter or constitution," the dissent believes that Judge Goettel should have said that a specific organizational structure was not a prerequisite to the existence of a charitable trust. But, the ...