White House Letter to Charles R. Evers on Joey Naples Case (1970)

Transcription
Accession: WMRN-2026-042
Document: White House Letter to Charles R. Evers on Joey Naples Case
Date: December 23, 1970

THE WHITE HOUSE
WASHINGTON

December 23, 1970

Dear Mr. Evers:

The President asked me to thank you for your letter about the AP story on the tax settlement in the Joey Naples case. I agree with your concern and I checked with the Justice Department about it.

Having more information on it now, I can understand that one could be mislead by the brief story into thinking that our Government had not pursued the case vigorously. This is not the case at all, and the background is fairly complex. I will attempt to fill you in as completely and briefly as possible.

In July 1962 members of the Youngstown Police Department found at the home of Joseph Naples records of a numbers operation which covered seven days of business. They averaged $1700 gross wagers per day, and he was convicted of banking a numbers game and sentenced to 1-10 years in the penitentiary. Federal law requires a tax of 10 percent of gross wagers accepted. Joseph Naples did register, but on July 1, 1962 (the day his older brother Billy was bombed to death). He only reported an average of $50 per day. In setting up his liability to the day he began serving, the IRS revised his wagers to reflect the $1700 per day average, producing a deficiency of about $85,000. To this a 50 percent fraud penalty was added and interest of $10,000 for a total of $137,500.

Joey's eldest brother, Sandy (who was shotgunned to death in March 1960) was probably the leader of the Naples' operation. The IRS figured Joey had interest in the operation from the date of Sandy's death, and projected the $1700 figure back to then, producing a tax deficiency of $120,000, a fraud penalty of $60,000 and interest of $23,500 resulting in the grand total of $341,000.

The trial was a difficult one for the Government. Because of the 1968 Supreme Court decision, we could not pursue the fraud penalty for the early period, since the right not to incriminate one's self prevented the Government from proving that failure to file was willful. This is the case because the Government could not base its case on nonreporting for the earlier period. In addition, the tax for the first period was in jeopardy because possibly Joey did not have control over the operation until Billy's death. At the time of Sandy's death, Joey was 27 while Billy was 37. The jury could reduce the amount of tax due as a compromise of any doubts they might have on the liability issue, as juries are prone to do. Finally, there was a major consideration of the possibility of collecting on any judgment. Chances are that the Government would not have been able to collect any more than the $100,000 had the judgment been more than that. During the trial three days of testimony were taken outside of the jury's hearing. After considering all the evidence, the judge recommended to both sides that they accept a figure of $100,000. While the Government did want more, both sides decided to accept the judge's recommendation after much deliberation.

I hope this will explain the matter to your satisfaction.

With best wishes,

Sincerely,

[signed] Herbert G. Klein

Herbert G. Klein
Director of Communications
for the Executive Branch

Mr. Charles R. Evers
Production Director
WMRN
The Marion Broadcasting Company
Post Office Box 518
Marion, Ohio 43302

Envelope Visible Text
THE WHITE HOUSE

Postmark: Washington, D.C., PM, 24 Dec 1970.

Mr. Charles R. Evers
Production Director
WMRN
The Marion Broadcasting Company
Post Office Box 518
Marion, Ohio 43302