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UNITED STATES v. DEMARCO

April 16, 1975

UNITED STATES OF AMERICA
v.
FRANK DeMARCO, JR., and RALPH G. NEWMAN



The opinion of the court was delivered by: GASCH

This matter came on for consideration on defendants' motion to transfer this cause to the district of defendants' residence, namely, in the case of Mr. DeMarco, Los Angeles (Central District of California), and Chicago, in the case of Mr. Newman (Northern District of Illinois).

 Both defendants rely upon 18 U.S.C. § 3237(b), which reads as follows:

 
(b) Notwithstanding subsection (a), where an offense is described in section 7203 of the Internal Revenue Code of 1954, or where an offense involves use of the mails and is an offense described in section 7201 or 7206(1), (2), or (5) of such Code (whether or not the offense is also described in another provision of law), and prosecution is begun in a judicial district other than the judicial district in which the defendant resides, he may upon motion filed in the district in which the prosecution is begun, elect to be tried in the district in which he was residing at the time the alleged offense was committed: Provided, That the motion is filed within twenty days after arraignment of the defendant upon indictment or information.

 Eligibility for transfer thus depends on four conditions: (1) It must appear that the offense involves use of the mails; (2) and is an offense described in § 7201 or § 7206(1), (2), or (5) of the Internal Revenue Code of 1954 (Title 26, United States Code); (3) that prosecution was commenced in a district other than the district of defendant's residence; and (4) that the transfer motion was filed within twenty days after arraignment. As to conditions (3) and (4) there is no issue.

 In an 18-page four-count indictment filed in this district by the Special Prosecutor of the Watergate Special Prosecution Force on the 19th of February, 1975, these defendants are charged with assisting former President Nixon and Mrs. Nixon in the preparation of certain false and fraudulent income tax returns, in that certain deductions claimed were based upon deductions allowable prior but not subsequent to July 26, 1969, and in an effort to claim such deductions, the date of the charitable contribution by Mr. Nixon of his papers was claimed to have been prior to that date. Mr. DeMarco was alleged to have been Mr. Nixon's tax attorney and Mr. Newman is alleged to have appraised the pre-Presidential papers which were the subject of the contribution.

 Focusing, as we must, on Section 3237 of Title 18, it appears, insofar as Mr. Newman is concerned, that the offense described in Count One of the indictment involves use of the mails as follows. Overt acts 6 and 7 pertaining to Mr. Newman alleged

 
6. On or about April 6, 1970, RALPH G. NEWMAN had a telephone conversation with Mary Walton Livingston, who was then at the National Archives Building in the District of Columbia, in which RALPH G. NEWMAN stated that his March 27, 1970, letter to her would be the only deed of gift reflecting Richard M. Nixon's alleged 1969 gift of pre-Presidential papers which GSA would receive.
 
7. On or about April 6, 1970, RALPH G. NEWMAN caused an affidavit to be mailed to FRANK DEMARCO, JR. in which RALPH G. NEWMAN stated he had examined the pre-Presidential papers, described as "The Papers of Richard M. Nixon, Part II," from April 6 to April 8, 1969.

 Other overt acts, in the conspiracy count, 3, 8, 12, 14 and 23 refer to the use of the mails.

 The charging paragraph, numbered 12 of Count One of the indictment, alleges that Mr. Newman, Mr. DeMarco and another "did combine, conspire, confederate, and agree together and with each other to defraud the United States and an agency thereof by impairing, impeding, defeating, and obstructing the proper and lawful governmental functions and rights of the IRS to ascertain, compute, levy, assess, and collect Federal income taxes due and owing from Richard M. and Patricia R. Nixon."

 The next charging paragraph, numbered 13, alleges in substance that the conspirators would cause to be made and transmitted false and fraudulent verbal and written statements and documents to IRS for the purpose of representing that prior to July 26, 1969, the effective date of legislation which reduced and restricted charitable tax deductions, that the gift of Mr. Nixon had occurred prior to the effective date of the act, whereas the gift occurred subsequent to the effective date of the act.

 Paragraph 14, in substance, charges the conspirators with aiding, assisting, and counselling in matters arising under the Internal Revenue laws and advising in the preparation of documents, affidavits and returns which were fraudulent and false as to material matters. As the government concedes, this language charges a violation of 26 U.S.C. § 7206(2).

 Thus it is plain that the thrust of the conspiracy count of the indictment is that these defendants are charged with aiding, assisting and counselling in the making of false and fraudulent income tax returns which had the effect of defrauding ...


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