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United States v. Pilarinos

decided: December 21, 1988.


Appeal from a judgment of conviction entered in the United States District Court for the Southern District of New York (Stanton, J.) after a jury found defendant guilty of conspiring to violate the federal bribery laws and bribing an employee of the Internal Revenue Service. Affirmed.

Oakes, Miner and Altimari, Circuit Judges.

Author: Miner

MINER, Circuit Judge:

Defendant-appellant Timothy Pilarinos appeals from a judgment of conviction entered after a five-day jury trial in the United States District Court for the Southern District of New York (Stanton, J.). Arrested for his participation in an undercover operation designed to identify taxpayers who bribe officials of the Internal Revenue Service ("IRS"), Pilarinos was charged with and convicted of (1) conspiring to violate the federal bribery laws, in violation of 18 U.S.C. §§ 201(b) (1982 & Supp. IV 1986) and 371 (1982) (Count One), and (2) bribing an employee of the IRS, in violation of 18 U.S.C. § 201(b)(1) (1982 & Supp. IV 1986) and 18 U.S.C. § 2 (1982) (Count Two). He was sentenced to imprisonment for eighteen months and fined $20,000 on the conspiracy count; he received a suspended sentence, with a three year period of probation, on the substantive count. As a special condition of probation, the district court ordered Pilarinos to resolve any outstanding tax liabilities. Special assessments totalling $100 also were imposed.

On appeal, Pilarinos challenges the district court's instruction on entrapment, arguing that because the court foreclosed the jury from finding that the two middlemen in the undercover operation were government agents, he was denied a derivative entrapment defense. Pilarinos also contends that the district court erred in admitting into evidence a telephone conversation he claims occurred after the termination of the charged conspiracy. Because we find that neither the government nor the middlemen induced the defendant to pay the bribe, and that a statement made during the telephone conversation by defendant's agent was admissible, we affirm the conviction.


From August 1984 to November 1986, the IRS conducted an undercover operation, in which IRS Inspector Harry Norman posed as a corrupt IRS employee who took bribes from taxpayers seeking to avoid tax liabilities. At the outset of the operation, Inspector Norman was introduced to co-conspirators Eleftherios Stavrakis, a Greek Orthodox priest and businessman, and Vasilios Apostolatos, an accountant. These two co-conspirators acted as middlemen in the operation: For each person they brought to Norman to have his or her taxes "fixed," Norman would share with Stavrakis one-half the bribe for federal tax matters and one-third the bribe for state tax matters, and would negotiate separately with Apostolatos a suitable arrangement.

On August 28, 1986, Stavrakis telephoned Norman and told him that he had a client, Pilarinos, who was willing to pay approximately four thousand dollars to stop a federal audit on a gas station owned by Pilarinos in Queens. The audit was limited to the year 1984 and involved potential tax liability initially thought to be only three-thousand to four-thousand dollars. On September 4, 1986, Norman met with Apostolatos, who told him that Pilarinos' father-in-law, who previously had bribed Norman on a tax matter of his own, had referred Pilarinos to Apostolatos.

Later that day, Norman met with Stavrakis and Pilarinos; this meeting was videotaped by the government. Pilarinos asserts that he is poorly educated and speaks only rudimentary English, and that his English rapidly deteriorated during the meeting. Pilarinos testified, however, that he understands English "80 percent." In any event, much of the conversation during the meeting took place in Greek and was translated, without objection by Pilarinos, into English for the benefit of Norman.

The transcripts of the meeting reveal that when Norman introduced himself to Pilarinos and mentioned that he was with the IRS, Pilarinos interrupted him, noting that his father-in-law already had familiarized him with the scheme, and that Norman did not have to explain anything further to him. Pilarinos thereafter turned the conversation to the amount of money that would be required as a bribe to stop the federal audit. Noting that he could stop it, Norman cautioned Pilarinos that to do so would be illegal and that Pilarinos would have to "take care of" him. Pilarinos responded approvingly, stating that "[n]obody works for nothing."

Concerned that the IRS might expand the scope of the audit to include other years and, perhaps, other matters, Pilarinos explained that, although his present excise tax liability was approximately $7,000, he wished to stop the audit even if it would cost him "a little more." He therefore agreed to pay $6,000 to "get it over with." Significantly, Pilarinos concedes on appeal that he was not induced by Norman to pay the bribe.

The other matters with which Pilarinos was concerned included both personal and state sales taxes. For example, after estimating his excise tax liability, Pilarinos acknowledged his fear that the IRS would "dig up the other personal" matters, and that they surely would "find something," perhaps even "another seven thousand dollars." He also observed, regarding the bribe at issue, "[t]hat this one's for the federal," as distinguished from the state, taxes. Indeed, Pilarinos indicated to Stavrakis that he had a separate sales tax matter that could pose problems. As a result, Stavrakis told Norman during the meeting that Pilarinos had "other things that he want[ed] to take care [off in the future," and that, after the federal audit was resolved, Pilarinos intended to return with more business. Pilarinos did not object to, but rather voiced approval of, the proposed future dealings with Norman.

At the district court, Pilarinos testified that when he met with Norman on September 4th, he thought that Norman was an accountant, despite the latter's assertion that he worked for the IRS; that Norman merely was to assist him in determining his tax liability, for a $6,000 fee, so that Pilarinos could pay the government what was due; and that he never heard Norman say that any payment made to stop the audit would be illegal. The government introduced evidence, in its rebuttal case, that on November 14, 1986, Stavrakis telephoned Norman and told him that earlier that day Pilarinos had called, stating that he had a state sales tax matter that he was willing to pay $20,000 to resolve.

The district court admitted into evidence Norman's testimony concerning the November 14th telephone call, pursuant to Fed. R. Evid. 801(d)(2)(E), as a statement made in furtherance of the charged conspiracy, finding that there was "ample evidence in the transcript and tape of the September conversation to show that the parties to the conversation specifically contemplated that there might be future transactions, falling within the ambit of the same arrangement 'The court also concluded that this evidence was admissible under Fed. R. Evid. 404(b), because it ...

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