al capone and aderhold and habeas corpus petition

RC Marlen's three historical questions on p. 291 of her engaging and wise book Inside the Hatboxes were answered in the previous three essays. This essay takes us one step further--to understand the 1933 decision of the US District Court for the Northern District of Georgia on the claims in Capone's habeas corpus petition. As mentioned in the previous essay, Capone's lawyers argued that a June 1931 indictment of Capone for violating the Revenue Act of 1926 by not filing returns for 1925, 1926 and 1927 was not permitted because it violated the three-year statute of limitations for bringing such a claim. The government argued, in contrast, that the statute at issue, the former 18 USC 585, had a proviso allowing a prosecution up to six years after the event, in the case of fraud. The burden of this essay is to argue that Capone's lawyers were basically correct, that he should have been allowed to go free, but he got caught up in a technicality of habeas corpus law and so lost his case.

The Supreme Court Construes 15 USC 585

After Capone was sentenced in November 1931 but before Capone's attorneys brought his habeas corpus petition in the Fall of 1932, the US Supreme Court handed down a decision construing the statute of limitations provision at issue in this case. One again, that statute provided:

"No person shall be prosecuted, tried, or punished for any of the various offenses arising under the internal revenue laws of the United States unless the indictment is found or the information instituted within three years next after the commission of the offense. For offenses involving the defrauding or attempting to defraud the United States or any agency thereof, whether by conspiracy or not, and in any manner, the period of limitation shall be six years..." (former 18 USC 585).

At issue in the Supreme Court case of US v. Scharton, 285 US 518 (April 11, 1932) was whether an indictment under 1114(b) of the Revenue Act of 1926 (the provisions under which Capone was indicted for his felony charges) could be brought within six years or whether three years was the required statute of limitations. The Supreme Court will decide that only the three-year limitation period applies to a violation of 1114(b).

Sec. 1114(b) of the Revenue Act of 1926 provided:

"‘Any.. person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof, shall ... be guilty of a felony..."

Section 1114(b) says nothing about defrauding the government. It simply is an "evade or defeat" statute. If you evade or defeat any tax willfully, you have committed a felony. If the government brought an indictment under this section, the proper way to do it was to say that "X" "willfully attempted to evade or defeat" a tax by doing "Y." If the government could prove the allegations in the indictment, the person would be guilty of a felony.

But several other revenue statutes required that fraud be alleged and shown because the word "fraud" was used in the underlying (and not simply the penalty) section. In the words of the Court:

"as the section has to do with statutory crimes, it is to be liberally interpreted in favor of repose, and ought not to be extended by construction to embrace so-called frauds not so denominated by the statutes creating offenses," US v. Scharton, 285 US at 522.

That is, the statute which created the offense has to "denominate" the activity as fraudulent in order for the longer statute of limitations to be applied. Or, in other words:

"The purpose of the proviso [i.e., the six year statute of limitation] is to apply the six-year period to cases ‘in which defrauding or an attempt to defraud the United States is an ingredient under the statute defining the offense'" (quoting US v. Noveck 271 US 201 (1926)).

Thus, in the case at bar, where Mr. Scharton was indicted by a bill that on the face of it showed that the offenses were committed more than three years prior to a return of the indictment, the District Court dismissed the bill and the US Supreme Court affirmed the dismissal.

The Meaning of the Scharton Precedent

Therefore, by April 1932, the US Supreme Court was saying that any indictment brought under Sec. 1114(b) of the Revenue Act of 1926 could only be brought within the three-year provision of the statute of limitations (18 USC 585) because the word "fraud" wasn't in the "statute defining the offense." Why didn't this new Supreme Court decision apply to Capone since his indictment was precisely under the same section of the Revenue Act of 1926 and the indictment was returned more than three years (but less than six) after the actions alleged?

The US District Court got out of the issue in a rather neat way. It first recognized the Supreme Court's precedent, but said:

"The fact that the Supreme Court later, in the case of US v. Scharton, decided that the three-year and not the six-year limitation was applicable in cases of this kind, does not affect this proceeding on habeas corpus" (Capone v. Aderhold, 2 FSupp. 280, 283 (DC GA, 1933).

Thus, the court would point to the narrowness of the remedy of habeas corpus as not allowing Capone to challenge his sentence. The court said that the only issue to which habeas corpus law applied at the time was to question the jurisdiction of the original court in the original case. In the court's words:

"It has been so often and so definitely held by the United States Supreme Court that, on habeas corpus, only the jurisdiction of the court whose judgment is challenged can be called in question, that the rule has become elementary," Id.

Because it was unquestionably the case that the original district court in Illinois had jurisdiction over the allegations, habeas corpus didn't apply. Hence, Capone was out of luck because he chose the wrong remedy. But, was there another remedy he could have chosen? No. The court did say that the judgment was "subject to correction" through a "writ of error." but, since the petitioners hadn't submitted such a writ within the appropriate time, "that gave no right to resort to habeas corpus as a substitute."

Conclusion

But I am left scratching my head on this one. If the Supreme Court handed down the decision in April 1932 and Capone was transferred in May 1932 and his lawyers brought the habeas petition in the Summer of 1932 (hearing in November), when did the period elapse? The court doesn't tell us, but it is no doubt answerable by knowing some of the intricacies of common law pleading that no longer are with us--intricacies that I do not know at the present.

So, Capone's appeal was thrown out on a technicality. Within a generation the habeas corpus statute would be vastly expanded in its reach, but for now, the reach was narrow indeed. And, because of that, a perfectly good precedent of the US Supreme Court could not be applied to his situation. But maybe Capone's lawyers did make a mistake--by not bringing a writ of error in the proper court within the proper time. It is just as well that they didn't. Could you imagine the camera bulbs flashing if the courts had let Capone out in 1933?

Thus closes a fascinating legal tale, one for which I thank RC Marlen for provoking me to clarify.

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