Criminal Justice: You Have to Be Insane Not to Pay Taxes

As anybody knows, a classic defense in cases of murder, rape and aggravated assault is insanity. But what about white-collar crimes like tax dodging?

Two Manhattan defendants — who also happen to be lawyers — are now exploring that very point. And for the moment, Robert G. Sheller and Daniel G. Driscoll have beaten federal tax raps by pleading emotional upset.

When Lawyer Sheller, 59, was tried on tax-evasion charges a year ago, his psychiatrist testified that he was "suffering from a psychotic reactive depression" when he reported only $9,000 of his $43,000 income in 1959. In his instructions to the jury, the judge omitted insanity as a defense. New York federal judges then used the old M'Naghten test that a man is legally in sane only if he "did not know right from wrong", or did not understand the nature of his acts at the time of his crime. A supplement to the M'Naghten test added "irresistible impulse" but neither test seemed to fit Sheller.

Morbid Procrastination. The jury convicted Sheller for willful cheating. But while he was on bail appealing his six-month sentence, the U.S. Court of Appeals issued a key decision (U.S.

v. Freeman) ordering federal judges in New York, Connecticut and Vermont to use the American Law Institute's new insanity test. By that test, "a person is not responsible for criminal conduct if at the time of such conduct, as a result of men tal disease or defect, he lacks substantial capacity either to appreciate the wrongfulness of his conduct or to conform his conduct to the requirements of law." Last month the same appellate court reversed Shelter's conviction and ordered a new trial in which he can seek acquittal by reason of Freeman-style insanity.

Where this can lead is clear from the case of Lawyer Driscoll, 39, one of Roy Cohn's law partners, who was tried last month for having "willfully failed" to file any federal tax returns for three years in which he grossed $119,034.

In fighting a possible three-year sentence, Driscoll pleaded Freeman insanity. Though not psychotic, testified his psychiatrist, the lawyer had "morbid depressions" that inhibited him from finishing important work. Driscoll's defense also brought forward 15 impressive character witnesses, including Louis Nichols, the FBI's ex-No. 2 man and now executive vice president of Schenley Industries. They all testified to his good reputation. Driscoll got a hung jury: six jurors voted to convict, six to acquit for insanity. So he, too, may be retried.

What happens if Sheller and Driscoll are now actually acquitted under the Freeman standards? In many state courts, such acquittal has a grim result:

automatic commitment to a mental institution. In Massachusetts, for example, a manslaughter defendant acquitted for insanity faces indeterminate commitment, often for life. And in the federal District of Columbia, Congress has passed a special law that would certainly commit allegedly insane tax evaders.

Off they would go to St. Elizabeths Hospital—perhaps indefinitely.