FAY, Circuit Judge:
Appellant was convicted on two counts of tax evasion. Finding that the government was prohibited by collateral estoppel from presenting some of the factual evidence used to convict the appellant, we reverse.
Count I of the indictment charged a violation of 26 U.S.C. § 7203 (1976). The indictment alleged that the appellant failed to make an income tax return for gross income received during the calendar year 1972. Count II charged the appellant with wilfully and knowingly attempting to evade income tax due for income received during the calendar year 1972 by failing to make an income tax return and by making false statements to treasury agents in an attempt to conceal his taxable income. The indictment charged that these alleged actions violated 26 U.S.C. § 7201 (1976). Count III of the indictment charged that the appellant filed a false and fraudulent income tax return for income received during the calendar year 1973, a violation of 26 U.S.C. § 7201. Appellant entered a plea of not guilty. The jury returned a verdict of guilty as to counts I and II and not guilty as to count III. On appeal, appellant raises several claims in addition to his collateral estoppel claim, but none of these have merit.
In order to consider the impact of the collateral estoppel doctrine on this case, it is of course necessary to relate in detail the nature of the charge in the first trial and the evidence adduced in support thereof. The prior prosecution which gives rise to the collateral estoppel question was a one-count indictment charging appellant with conspiracy to import, possess, and distribute marijuana in the United States. The indictment charged that the conspirators imported large quantities of marijuana from Colombia, South America into Zephyrillis, Florida aboard a DC-3 aircraft. The marijuana was then taken to parts of Florida and New York, where it was sold. As overt acts in furtherance of the conspiracy, the indictment alleged that appellant's co-conspirators imported marijuana into this country on April 9, 1972 from Colombia and that large amounts of money changed hands. The other individuals named in the indictment were Pedro Alvarez, Michael Sarga, Derril Lee, Jerold Martin Massler, Paul Rice, John Leslie Wells, Pedro Davilla, and Raoul Alberto Davillo.
The government's primary witness at both trials was William Rand Kilgore. The following facts were introduced through Kilgore in the first trial to show a conspiracy to import and distribute marijuana and in the second trial to show that appellant received income from that same scheme: Kilgore testified to the effect that appellant and Alvarez were in the marijuana business together. First trial transcript ["First trial"] at 181-83, 564; Second transcript ["Second trial"] at vol. V, p. 78-79, 82. Alvarez hired Kilgore to guard the "stash house," where the marijuana was stored. First trial at 9; second trial at vol. V, p. 59-60. Appellant and Alvarez took Kilgore to the "stash house" in February, 1972. First trial at 11; second trial at vol. V, p. 61. Kilgore received money in exchange for marijuana at the "stash house." First trial at 13; second trial at vol. V, p. 62-63. In February of 1972, appellant and another person visited the "stash house." First trial at 22-24; second trial at vol. V, p. 62. At Alvarez' direction, Kilgore, along with pilots John Wells and Paul Rice, flew a DC-3 aircraft to Colombia and returned to Zephyrillis, Florida with a substantial quantity of marijuana. First trial at 150-77; second trial at vol. V, p. 72-77. Appellant, Lee and Alvarez unloaded the marijuana from the aircraft into a Winnebago motor
After all the evidence had been presented at the first trial, the jury was unable to arrive at a verdict and the trial court declared a mistrial. Pursuant to Fed.R.Crim.P. 29, the court then acquitted the appellant, stating: "[T]he Court is persuaded as to Defendant Mock (and for the reasons articulated in counsel's post-trial memorandum in his behalf) that a reasonable-minded jury would necessarily have to have a reasonable doubt as to his guilt."
In principle, the law of collateral estoppel is clear; in application, it can be a slippery concept indeed. According to Ashe v. Swenson, 397 U.S. 436, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970), collateral estoppel "means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit." Id. at 443, 90 S.Ct. at 1194. Thus, Ashe mandates two inquiries: First, what facts were necessarily determined in the first law suit? See United States v. Ballard, 586 F.2d 1060 (5th Cir. 1978); Adams v. United States, 287 F.2d 701 (5th Cir. 1961). Second, has the government in a subsequent trial tried to relitigate facts necessarily established against it in the first trial? Facts so established in the first trial may not be used in the second trial either as ultimate or as evidentiary facts. Blackburn v. Cross, 510 F.2d 1014 (5th Cir. 1975); Wingate v. Wainwright, 464 F.2d 209 (5th Cir. 1972). Thus, while the parent doctrine of double jeopardy bars a subsequent prosecution based on a different section of the criminal code when "the evidence required to support a conviction upon one of them [the indictments] would have been sufficient to warrant a conviction upon the other,"
The problem here is that the government urged in the tax evasion case that appellant received income from the very conspiracy operation of which he had been acquitted in the first trial. In addition, the government elicited essentially identical testimony from Kilgore to prove that he received income from the marijuana conspiracy.
Generally, it is true that a defendant may be acquitted of conspiracy without collaterally estopping the government from later presenting the evidence necessary to convict him of the substantive crime which was the object of the conspiracy. See United States v. Ballard, 586 F.2d 1060 (5th Cir. 1978). In addition, since the charges require different elements of proof, double jeopardy would pose no bar to the subsequent prosecution. See Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 90 L.Ed. 1489 (1946); Wingate v. Wainwright, 464 F.2d 209, 214 (5th Cir. 1972). Ashe teaches, however, that we must "`examine the record of a prior proceeding, taking into account the pleadings, evidence, charge, and other relevant matter,'" 397 U.S. at 444, 90 S.Ct. at 1194 (footnote omitted), in order to assess the applicability of collateral estoppel. "The inquiry `must be set in a practical frame and viewed with an eye to all the circumstances of the proceedings.'" Id., quoting Sealfon v. United States, 332 U.S. 575, 579, 68 S.Ct. 237, 92 L.Ed. 180 (1947). In taking this pragmatic approach, the court in Sealfon, while recognizing that conspiracy and the substantive offense are different for double jeopardy purposes, nevertheless held that an acquittal on the charge of conspiracy to defraud the United States prohibited the government from later trying to prove that the defendant committed the substantive offense of defrauding the United States, since "the core of the prosecutor's case was in each case the same . . . ." 332 U.S. at 580, 68 S.Ct. at 240; accord, United States v. Kramer, 289 F.2d 909, 919 (2d Cir. 1961). Likewise, in Yawn v. United States, 244 F.2d 235 (5th Cir. 1957), a case notably similar to the instant case, the defendant was first tried and acquitted of possession of a still at a certain time and place; he was subsequently charged with a conspiracy to engage in the business of a distiller without paying taxes thereon. As an overt act in the conspiracy indictment, the government alleged and proved that the defendant jointly possessed "the identical still at the identical time and place charged in the earlier trial." Id. at 237. This Court stated:
Id. at 237 (citations omitted).
Theoretically it is true that appellant might be found not guilty of the conspiracy charge and yet have committed the substantive crimes of importation and distribution of marijuana; and it therefore might also be theoretically true that even though the first trial established as a fact that appellant was not a member of the Alvarez conspiracy, appellant might nevertheless have derived taxable income from the distribution or sale of marijuana in 1972, (from sources other than the Alvarez group). The first trial established at least that the appellant was not involved in a conspiracy to import, possess, and distribute marijuana with the people described in the indictment
The critical issue at trial was where and when appellant received income resulting in an increase in his net worth. Appellant did not seriously dispute that his net worth had increased; in closing argument, appellant's counsel argued, however, that the increase was a result of interest charged on loans made while he was in the Navy, many years before. Appellant claimed that his only connection with Alvarez was through a used typewriter business they were starting.
Just as it did in Yawn, Kramer and Sealfon, the government in this case attempted to prove events which were in "unity of time and place," Douthit v. Estelle, 540 F.2d 800, 805 (5th Cir. 1976), with events which were established against it at the first trial. Legally, appellant simply could not have derived income from the Alvarez conspiracy, when he was acquitted at the first trial in the face of Kilgore's testimony that appellant and Alvarez were the kingpins of the marijuana operation.
It matters not that appellant's acquittal on the conspiracy charge does not negate the possibility that he may otherwise have derived income from the sale or distribution of marijuana. The fundamental error here is that the government reintroduced the identical facts and theory of the facts which were rejected at the first trial. For purposes of any subsequent prosecution of appellant, appellant's acquittal has conclusively established that appellant did not participate in a marijuana conspiracy with Alvarez and the others mentioned by Kilgore during the time frame of the first indictment — January to June, 1972. Consequently, the government is barred
There remains the question of whether the introduction of this testimony and the arguments made by the prosecutor were merely harmless error.
Applying this standard, we find the error was prejudicial.
As noted, both the government and the appellant agreed that the source of appellant's increased net worth was the critical issue in the case. Kilgore's testimony, which covered only the period of January to June, 1972, was immeasurably important in supporting the government's contention on this point. In terms of sheer quantity, it spans some 300 pages. It is a highly detailed first hand account of transactions in which Kilgore himself purportedly took part.
Sandra Scott was the only other witness at the second trial to support the government's contention that appellant received income from marijuana transactions in 1972. Scott's testimony related to events which occurred in December of 1972, a period not covered by the first trial. From a careful comparison of Kilgore's and Scott's testimony, it is apparent that Scott's testimony was basically corroborative of Kilgore's and not nearly as damaging. In contrast to Kilgore's detailed account of the actual smuggling, transportation, and distribution of marijuana, Scott's testimony was almost totally confined to recounting conversations among appellant and others concerning marijuana transactions. The only overt act which Scott claims to have witnessed was the payment of money by appellant and Alvarez to Scott's husband as part of a marijuana deal.
This is not a case where we might conclude that Scott's testimony was sufficient to support the conviction, since her testimony, by itself, shows a likely source of income.
Moreover, the government's opening and closing arguments relied heavily on facts which had been foreclosed to it by the first trial. As noted above, the government argued on more than six occasions that appellant received his income from the Alvarez conspiracy transactions. Three of these arguments were coupled with direct references to Kilgore's testimony.
REVERSED and REMANDED for Retrial.
Second trial at supp. vol. 2, p. 177-78.
Id. at 255.
Id. at 265.