Unpublished Disposition, 862 F.2d 318 (9th Cir. 1988)

MEMORANDUM^** 

James Day appeals his convictions under 26 U.S.C. § 7201 for wilfully evading income tax due by filing false and fraudulent income tax returns for the 1980, 1981 and 1982 tax years. Day was tried and convicted by jury.

We affirm.

FACTS

In 1978, the appellant joined the Universal Life Church (ULC). The ULC is a "church" in which every member is a "pastor" or "minister". Many people join the "church" thinking they may then take advantage of various deductions in the tax code available to ministers. Such was the appellant's plan.

In the tax years 1980, 1981 and 1982, the appellant took about 50% of his income as charitable deductions for "contributions" made to the ULC in Modesto, California or for "contributions" to his own "congregation". He also took a parsonage allowance for expenses related to the upkeep of his home and other personal expenses. The IRS investigated the appellant's deductions and he was subsequently indicted under section 7201.

One month prior to trial, the appellant made a motion for a Bill of Particulars. The trial court denied the motion but at the motion hearing both the court and appellant's counsel inquired of the government what its theory of the case was and what its method of proof would be. In response to a question from the court, the government stated that it did not intend to prove the deductions made were legally impermissible; rather, that contributions claimed on Day's returns were not in fact made. On the first day of trial at a suppression hearing, however, the government qualified its earlier statement. The prosecutor stated that:

Although we are conceding that the contributions were in fact made to the Universal Life Church in Modesto and were bona fide, that they're deductible. We are not conceding if they were made to some other organization that went under the name ULC that they are necessarily deductible.

The government later put on proof that deductions taken for contributions to Day's own "congregation" were not valid deductions and were a sham.¹  The appellant, at the suppression hearing, did not contemporaneously object to the government's alleged shift in its theory of the case. At the conference concerning jury instructions, however, the appellant argued that the government should not be allowed to argue that deductions were legally impermissible because it committed to another theory at the Bill of Particulars hearing. The court denied the appellant's motion to limit submission of the case to the jury to determine whether contributions were in fact made. The court found that the defendant, by raising the issue of whether his "church" was a bona fide church, and whether it was part of the ULC of Modesto, had raised the issue of whether contributions made to his own congregation were deductible. The court found that there was no prejudice to the appellant even if there were a variance. The court later instructed the jury that it had to decide whether:

Mr. Day's contribution to his own congregation [was] deductible. That is, are the contributions made by Mr. Day to his local congregation, assuming he made them, are they deductible?

The appellant later moved for a judgment of acquittal or for a new trial contending that the government had changed its theory of the case. The motion was denied.

As part of its investigation of Day, several IRS agents went to Day's home to interview him about his tax returns. At trial, one of the investigators testified, over the appellant's objection, that the defendant declined to sign a waiver form that would have allowed the investigators to obtain records from the ULC at Modesto and to obtain Day's bank records. He also testified that the appellant, after first answering some of the agents' questions, "expressed his reluctance to continue the interview" and he "wanted to seek the services of a tax adviser before we continued on." The agents then left Day's home.

The appellant timely appealed. We have jurisdiction under 28 U.S.C. § 1291.

DISCUSSION

I. Variance.

The appellant argues that the seeming shift in the government's trial theory deprived him of his right under the fifth amendment to be convicted only as charged under the grand jury indictment, and his sixth amendment right to be informed of the accusations against him. After an indictment has been returned, its charges may not be broadened except by the grand jury itself. Stirone v. United States, 361 U.S. 212, 215-16 (1960). An indictment may be "broadened" in two ways, either by amendment or by variance. An actual or constructive amendment to an indictment, not accomplished by a federal grand jury, constitutes per se error. Cole v. Arkansas, 333 U.S. 196, 201 (1948) (actual amendment); Gray v. Raines, 662 F.2d 569, 572 (9th Cir. 1981) (constructive amendment). An amendment occurs when the charging terms of an indictment are altered, either literally or effectively, by the prosecutor or court after the grand jury has last passed on them. Watson v. Jago, 558 F.2d 330, 334 (6th Cir. 1977). For example, in Cole the appellant was charged under one state statute and, on appeal, his conviction was affirmed based on a different uncharged statute. 333 U.S. at 200-01. In Gray, this circuit found error where the defendant was charged with first degree, premeditated rape and the judge gave a statutory rape charge to the jury. 662 F.2d at 572. There was no such amendment in the case at bar. The appellant can only point to a possible variance.

A variance occurs not when the charging terms of the indictment are altered, but when the evidence adduced at trial proves facts materially different from those alleged in the indictment. Watson, 558 F.2d at 334 (quoting Gaither v. United States, 413 F.2d 1061, 1071 (D.C. Cir. 1969). The record does not support a finding of a variance under this definition. The facts alleged in the indictment were only that Day intentionally signed his income tax return that contained false entries for tax due. The proof under either theory was not materially different from the alleged facts.

Assuming, however, that the government was bound by its representation that it was not challenging the deductibility of Day's charitable contributions, but whether they were made, a variance is not subject to a per se error analysis. The correct inquiry is whether the variance in proof has affected the substantial rights of the accused. Berger v. United States, 295 U.S. 78, 81-82 (1935); see also Lincoln v. Sunn, 807 F.2d 805, 813 (9th Cir. 1987). The appellant must demonstrate that he was prejudiced by the variance such that he was denied sufficient notice of the offense to permit him to prepare adequately and present his defense. Lincoln, 807 F.2d at 813.

The appellant fails to demonstrate that the variance prejudiced his substantial rights. First, at the motion to suppress hearing on the first day of trial, where he claims that he first discovered the government's change in theory, the defendant failed to ask for a continuance to prepare to meet the government's proof. The failure to request a continuance constitutes a waiver of appeal on variance grounds. Ridgeway v. Hutto, 474 F.2d 22, 24 (8th Cir. 1973) (per curiam); United States v. Costello, 381 F.2d 698, 701 (2d Cir. 1967). Further, the appellant's failure to request a continuance in the case at bar demonstrates a lack of surprise due to the government's "alteration" of its intended proof. This is especially so given that the defendant put on a defense at trial that the amounts deducted on his returns were not actually transferred to ULC of Modesto. Rather, he claimed that he properly spent them for expenses related to his own "congregation". This defense is predicated on the assumption that contributions to his own "church" were deductible or at least not fraudulent. Thus, his very defense raised the issue which he claims surprised him at trial. Finally, the appellant's trial spanned a nine-day period. The government indicated on the first day of trial that it was not conceding that deductions made to the appellant's own "church" were deductible. The appellant, therefore, had adequate time to meet the government's proof on this matter. Cf. Lincoln, 807 F.2d at 813 ("a change in government's theory late in the case might constitute prejudicial variance); Gray, 662 F.2d at 570 (defendant presented with variance only at instructions conference). The trial court properly denied the appellant's motion for an acquittal or for a new trial based on his variance contention.

II. Fifth Amendment Claim.

The appellant also contends that the IRS agent's testimony that he refused to sign a waiver form and discontinued the interview until he could speak to a "tax adviser" was unconstitutional comment on his assertion of his fifth amendment right to not incriminate himself. Whether there has been a violation of a defendant's fifth amendment right is reviewed de novo. United States v. Sears, Roebuck & Co., Inc., 719 F.2d 1386, 1392 n. 9 (9th Cir. 1983), cert. denied, 465 U.S. 1079 (1984). The appellant's contention is without merit.² 

In Miranda v. Arizona, 384 U.S. 436, 444 (1966), the Supreme Court stated:

[T]he prosecution may not use statements, whether exculpatory or inculpatory, stemming from custodial interrogation of the defendant, unless it demonstrates the use of procedural safeguards ... By custodial interrogation, we mean questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way.

(citation omitted). Miranda also precludes use by the prosecution of evidence that the defendant stood mute or claimed his fifth amendment privilege in the face of accusation. Id. at 468 n. 37; United States v. Branson, 756 F.2d 752, 753-54 (9th Cir. 1985).

Miranda requires that the defendant undergo custodial interrogation before the fifth amendment precludes reference to his prior silence at trial. To determine whether a defendant has undergone custodial interrogation, the courts look to whether the defendant was actually under arrest or otherwise subject to coercive interrogation. Oregon v. Mathiason, 429 U.S. 492 (1977) (per curiam); Doyle v. Ohio, 426 U.S. 610, 617 (1976). Cf. Orozco v. Texas, 394 U.S. 324, 327 (1969) (defendant detained in his home, court held that he was no longer free to go where he chose and applied Miranda 's prophylactic protection).

The facts in the case at bar clearly demonstrate that the appellant was not subject to custodial interrogation at the time he was interviewed by the IRS agents. The agents came to the appellant's house. The agents then read the defendant some form of Miranda warning and asked him if they could speak to him. The appellant responded that he understood his constitutional rights. The appellant then invited the agents inside and they sat at his dining room table and discussed several of his income tax returns. They spoke for some minutes and after the agents asked the appellant if he would sign the waiver form the appellant got up and left the room to speak to his wife. After he came back and told them he wanted to speak to a "tax adviser", the agents immediately discontinued the interview and left the appellant's home. He was arrested some weeks later. These facts do not rise to the level of custodial interrogation. The statements he made were voluntary and not the product of coercion. The trial court properly admitted them and no Miranda violation occurred.

CONCLUSION

No prejudicial variance occurred at the defendant's trial. Also, there was no constitutional error in admitting testimony of the agent that the appellant refused to sign waiver forms and asked to speak to a "tax adviser".

AFFIRMED.