Halberstam v. Welch

705 F.2d 472 (D.C.Cir. 1983)

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Nature of the Case

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Facts

D first met Welch in October 1975, when Welch walked up to her in an apartment parking lot and asked her for a date. D stated that this was the first and only time she saw Welch with a gun. D was a twenty-five-year-old high school graduate, worked as a secretary. Welch told P that he bought estates and invested in coins, jewelry stores, and real estate. Welch moved into D's apartment a few weeks after their first meeting. Welch had a new Monte Carlo automobile, some clothing, a watch, pocket change, and some gold coins. They lived together until Welch shot P during the course of a burglary of P's home on December 5, 1980. D gave P her salary in cash to invest for her in gold coins. Welch had no outside employment and spent most days at home managing investments. He would leave the house four or five times each week between 5:00 p.m. and 5:30 p.m., and return between 9:00 p.m. and 9:30 p.m. D stated that she never accompanied Welch on these evening expeditions. D assumed Welch was checking on his investments or meeting with coin and jewelry dealers. Now and then D picked up coins for Welch from dealers, paying for the coins with cash Welch supplied. In April 1978, after D gave birth to the first of their three children, Welch and D purchased a house in Minnesota for $102,000. Welch contributed about $55,000 in cash, and D put up about $20,000. The house was titled in D's name. In 1979, the couple built a home in Great Falls, Virginia, valued at $1,000,000. They lived in Great Falls from November 1979 until December 1980, when Welch was arrested for killing P. D's niece and the niece's child moved in with them. Welch and D bought two 1980 Mercedes-Benz cars and a station wagon and hired a housekeeper. With D's knowledge, Welch installed a smelting furnace in the garage and used it to melt gold and silver into bars. He then sold the ingots to refiners in other states. D typed transmittal letters for these sales. She also kept inventories of antiques sold, and in general, did the secretarial work for Welch's 'business.' The buyers of Welch's goods made their checks payable to her, and she deposited them in her own bank accounts. She kept the records on these asymmetrical transactions -- which included payments coming in from buyers, but no money going out to the sellers from whom Welch had supposedly bought the goods. Not surprisingly, given the 'low' cost of Welch's materials, his business was a profitable one. By 1978 D and Welch had a gross annual income in excess of $1,000,000. D's individual tax returns for 1978 and 1979 reported gross earnings of $647,569.21 and $491,762.16, respectively, from the sale of gold and silver. D took deductions, per Welch's instructions, for 'cost of goods sold and/or operations' in 1978 and 1979 of $498,770.87 and $360,000 despite the absence of any evidence of payouts for such goods. D assumed that Welch filed a separate tax return. Police obtained a search warrant for the Great Falls house and discovered Welch's basement 'inventory': some fifty boxes containing approximately three thousand stolen items -- antiques, furs, jewelry, silverware, and various household and personal effects. D admitted having seen the boxes but claimed not to have seen their contents. P said she did not go down to the basement often, although she had free access to it. D provided policemen the key to Welch's locked basement study. D appealed from a verdict for P based on civil conspiracy and aiding and abetting.