United States v. Robert C. Thetford

676 F.2d 170, 10 Fed. R. Serv. 1522, 50 A.F.T.R.2d (RIA) 5418, 1982 U.S. App. LEXIS 19078
CourtCourt of Appeals for the Fifth Circuit
DecidedMay 20, 1982
Docket80-2211
StatusPublished
Cited by85 cases

This text of 676 F.2d 170 (United States v. Robert C. Thetford) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Robert C. Thetford, 676 F.2d 170, 10 Fed. R. Serv. 1522, 50 A.F.T.R.2d (RIA) 5418, 1982 U.S. App. LEXIS 19078 (5th Cir. 1982).

Opinion

SAM D. JOHNSON, Circuit Judge:

This is an appeal of a conviction for tax evasion and for obstructing justice by threatening persons cooperating with Internal Revenue Service (IRS) investigators. The conviction arises out of Robert Thetford’s ownership and operation of adult movie theaters in Texas, Florida, and Ohio from 1972 to 1974. He has been sentenced to confinement for forty-four years. Thetford here asserts a variety of errors: insufficiency of evidence, double jeopardy, improper jury instructions, variance between the indictment and jury charge, refusal to reopen testimony at trial, admission of prejudicial evidence, and failure to include the Government’s Bill of Particulars in the jury charge.

I. Background

Through his solely owned corporation, Artex Theaters, Inc. (Artex), Robert Thetford operated “X-rated” movie theaters on a cash basis in Texas, Ohio, and Florida from 1972 until 1974. During these years, Thetford not only failed to file the corporate income tax returns for these theaters, but also failed to file his joint personal tax return for 1973 and his and his wife’s separate tax returns for 1974. These were not prepared and filed until 1976.

In the latter part of 1974, Thetford’s lawyer and accountants began preparing his tax returns, based upon boxes of daily receipts and expense records which Thetford provided from the theaters. Thetford’s corporate tax returns reflected gross receipts from the theater operations which totaled approximately $626,000 in 1972, $468,000 in 1973, and $477,000 in 1974, with the taxable income for these same years reported as approximately $48,000, $31,000, and $66,000. On their joint income tax return for 1973, Thetford and his wife reported gross income as $29,500 and taxable income as $24,-950. On each of their separate income tax returns for 1974, Thetford reported gross income of $15,000 and taxable income of $12,500.

The IRS began an investigation of Artex in October 1975, just before Thetford filed these tax returns. As that investigation progressed, the IRS became aware of several irregularities in Thetford’s tax returns. For example, many daily theater receipt reports were missing, coinciding for the most part with the periods that the lucrative movie Deep Throat was playing at several of Thetford’s theaters. Using the sequential ticket numbers reflected on the daily reports before and after the days for which no reports were provided, IRS agents determined that at least $65,000 in corporate receipts from Texas theaters were not reported in 1973 and at least $45,000 in corporate receipts were not reported in 1974.

The investigation also revealed that Thetford had failed to report about $73,000 in *173 receipts from the Livingston Arts Theater (Livingston Theater) which he had opened in Columbus, Ohio, through a “dummy” corporation named “Thrush.” This was established by the records and testimony of Artex employee Wayne Sharp who managed that theater in 1972 and testified that he had transmitted approximately $20,000 in profits from Livingston Theater to Thetford. In addition, the IRS uncovered evidence that Thetford received at least $8600 in 1973 and approximately $40,000 in 1974 from the Palms Theater in St. Petersburg, Florida. None of the income from the Palms Theater was reported on Artex’s corporate tax return or on Thetford’s individual tax return. In fact, Robert Moore, the nominal president of Artex, testified that Thetford instructed him not to turn over Thetford’s records on his out-of-town theaters to his accountants. Thetford indicated he would take care of the records for those theaters himself.

On the basis of this investigation, a thirteen-count indictment was returned against Thetford, who was then arrested and held on a $1,000,000 bond. The first six counts of the indictment focus on Thetford’s individual income tax returns. Counts One and Two allege the willful and knowing subscription to individual income tax returns which underreported gross income for calendar years 1973 and 1974, in violation of 26 U.S.C. § 7206(1). Count Three alleges the willful and knowing underreporting of the gross income of Thetford’s wife, Sharon, for calendar year 1974, in violation of 26 U.S.C. § 7206(2). Counts Four and Five allege the willful and knowing evasion of personal income taxes for 1973 and 1974 in violation of 26 U.S.C. § 7201. Count Six alleges the willful and knowing evasion of taxes filed in the name of Thetford’s wife, Sharon, for calendar year 1974, in violation of 26 U.S.C. § 7201. Counts Seven through Nine focus on the corporate tax returns, and allege the willful and knowing subscription to the false corporate tax return of Artex for the calendar years 1972, 1973, and 1974. 1

The last four counts, Counts Ten through Thirteen, focus on Thetford’s efforts to obstruct an IRS investigation of the described violations. Count Ten alleges the willful and knowing conspiracy of Thetford and Charles L. Musick to delay and prevent communication of information to the IRS by Robert Moore and Larry Jones, two former Artex employees, in violation of 26 *174 U.S.C. §§ 7201 and 7206. Several overt acts are listed as evidence of the conspiracy, including a request by Thetford to Musick that Robert Moore, former nominal president of Artex, be “hit” because he was talking too much to Special Agents of the IRS. There was also evidence that Robert Thetford gave Musick $2,000 in cash to pay Larry Gerard to kill Larry Jones, a theater operator employed by Thetford. This was an apparent response to Thetford’s conclusion that Larry Jones could not “stand the heat” of the Artex investigation. Jones was later murdered. Counts Eleven, Twelve, and Thirteen allege attempts by means of intimidation and threats of force to obstruct, delay, and prevent communication of information by Jim Sharp, Wayne Sharp, Robert Moore, and Larry Jones to IRS investigators, in violation of 26 U.S.C. §§ 7201 and 7206. Thetford had become aware of the IRS investigation at an early date and according to testimony from several of his employees, sought to obstruct the IRS investigation by means of intimidation and threats of force.

The district court vacated the convictions on Counts One, Two, and Three. 2 The Government concedes error as to Count Thirteen.

II. Individual Tax Return Violations

Thetford was convicted on Counts Four, Five, and Six, which allege knowing and willful tax evasion, in violation of 26 U.S.C. § 7201. 3

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676 F.2d 170, 10 Fed. R. Serv. 1522, 50 A.F.T.R.2d (RIA) 5418, 1982 U.S. App. LEXIS 19078, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-robert-c-thetford-ca5-1982.