Monday, May 25, 2015

District Court Cryptically Rejects Defendant's Arguments on Instructions (5/25/15)

Trials are messy and the legal principles deployed are often imprecise.  In United States v. Messier, 2015 U.S. Dist. LEXIS 63741 (D. ME 2015), here, the defendant was tried on Section 7212(a) tax obstruction (Count One), 18 USC 371 Klein tax defraud conspiracy (Count Two), and apparently 5 counts of substantive tax crimes (Counts Three through Seven).  He was convicted on Counts One and Two and acquitted on Counts Three through Seven.  (Although not stated in the opinion, Counts Three through Seven were for Section 7203 failure to file; for reasons apparent from the opinion, although not expressed explicitly, the acquittal was apparently based upon a jury determination that the Government had not proved willfulness a la Cheek beyond a reasonable doubt.)  The following are the portions of the opinion that interested me:

1.  The Tax Obstruction Instruction Properly Excluded a Requirement That the Defendant Must Have Intended to Violate the Criminal Law.

The defendant argued that the Count One Section 7212 instruction should have included a requirement that the defendant have intended to violate the criminal law.  The defendant apparently sought to leverage from the acquittal for lack of willfulness on Counts Three through Seven.  Willfulness, the element of most Title 26 crimes, requires a specific intent to violate a known legal duty.  Section 7212(a) does not include a textual requirement of willfulness.  Accordingly, the district court instructed the jury that conviction required only "the intention of securing an unlawful benefit," citing United States v. Floyd, 740 F.3d 22, 31 (1st Cir. 2014).  In the Order, the Court said cryptically that that is all that is required.

The issue is perhaps more subtle than one would gather from the Order.  See Tenth Circuit Opinion on Mens Rea for Tax Obstruction - What Does Unlawful Mean? (7212(a)) (3/30/14), here.

2.  Counts One and Two Did Not Require the Cheek Instruction.

This argument may be a variation of the first, but is presented separately.  The Court's discussion is:
The instructions were not unclear, and properly charged the jury on corrupt endeavor (Count One) and conspiracy to defraud (Count Two) in accordance with First Circuit precedent. So far as Cheek is concerned, the defendant secured a not guilty verdict on Counts Three through Seven, the only counts where I gave a Cheek-related instruction. In other words, he prevailed on this issue. Nothing in the instructions suggests any Cheek issues on Counts One and Two. To the extent that the defendant now is arguing that a Cheek defense applied to those two counts, he failed to make that objection to the jury charge. Moreover, the Cheek defense derives from the specific "willfulness" language in certain provisions of the criminal tax laws, such as 26 U.S.C. § 7203. There is no such "willfulness" requirement in the corrupt endeavor crime, 26 U.S.C. § 7212(a), or in the conspiracy to defraud crime, 18 U.S.C. § 371. Several circuits have held specifically that Cheek is not an available defense to the corrupt endeavor or conspiracy to defraud crimes. United States v. Williamson, 746 F.3d 987, 991-92 (10th Cir. 2014) (regarding 26 U.S.C. § 7212(a)); United States v. Kelly, 147 F.3d 172, 176 (2d Cir. 1998) (same); United States v. Damra, 621 F.3d 474, 501 n. 7 (6th Cir. 2010) (regarding 18 U.S.C. § 371); United States v. Derezinski, 945 F.2d 1006, 1012 (8th Cir. 1991) (same).
I refer readers to the blog noted above for further discussion of this issue.   Note that the Kelly case cited by the Court seemed to equate the obstruction charge of intent to seek a lawful benefit with the willfulness requirement of intending to violate a known legal duty.  Kelly at p. 177 (the obstruction instruction was ""was as comprehensive and accurate as if the word 'willfully' was incorporated in the statute.")

3.  The Court Properly Responded to the Jury's Note on the Cheek Willfulness Legal / Constitutional Distinction.

The background not articulated in the Order is that Cheek held that a good faith -- even an objectively unreasonable good faith -- misunderstanding as to the application of the law is a defense, but a belief only that the law was unconstitutional is not a defense.  We don't have the jury instruction that prompted the question, but the jury came back with the following question:\
If we believe he believes he wasn't required to file, does it matter if he also believe[s] in constitutional issues, etc.?
In other words, could the jury acquit if he found both a belief as to the nonapplication of the law and the unconstitutionality of the law?  Of course, the Supreme Court in Cheek seemed to think that those two intents could not co-exist.  If a defendant did not believe the law applied to him, the constitutionality of the nonapplicable law is irrelevant.  Only if a defendant believed that the law applied to him was the issue of constitutionality even presented.

The Court discussed the question with counsel and then instructed the jury that it would have to answer that question themselves based upon the evidence.

The defendant argued that the Court should have answered that question "no."  The Court cryptically responds to the argument:
As the transcript of that discussion reflects, I concluded that there was more than one plausible interpretation of what the jury was asking, and that a simple "no" answer might misinterpret the jury's question. Trial Tr. at 90-91. Thus, there was no error in my answer to the jury that they must answer the question themselves based upon the evidence and the instructions. More importantly, however, the portion of the charge questioned by the jury (they even gave page numbers of the instructions) dealt with only Counts Three through Seven, on which the defendant received not guilty verdicts. The jury question had no bearing on Counts One and Two, and therefore the defendant was not prejudiced by my answer to the note.
If, however, the intent requirement for willfulness crimes is more or less the same as the intent requirement for the obstruction crimes (Counts One and Two), the defendant was prejudiced by a failure to answer this question "no."  This seems like as good a case to press the issue in the Court of Appeals because, I suspect, the pattern of conduct by which the Government hoped to show willfulness on the failure to file counts is the same pattern of conduct on the obstruction counts (tax obstruction and Klein / defraud interference).  But, on the other hand, the question appears to have been addressed to the failure to file counts and not the obstruction counts.

4.  The Tax Obstruction and Klein Conspiracy Counts Are Not Multiplicitous.

The Court states the argument and resolves it cryptically:
The defendant claims that Counts One and Two contain "nearly the same allegations" and "rely on . . . duplicate acts." Def.'s Mot. at 7. But the two offenses are not the same for double jeopardy purposes because conspiracy charges are distinct from related substantive offenses. See United States v. Fornia-Castillo, 408 F.3d 52, 69 (1st Cir. 2005) ("Indeed, it has long been established that 'conspiracy to commit a crime is not the same offense as the substantive crime for double jeopardy purposes,' because 'the agreement to do the act is distinct from the [completed] act itself . . . .") (quoting United States v. Lanoue, 137 F.3d 656, 662 (1st Cir. 1998) and United States v. Felix, 503 U.S. 378, 390-91, 112 S. Ct. 1377, 118 L. Ed. 2d 25 (1992)); see also United States v. Marino, 277 F.3d at 39 (holding that "[b]ecause a RICO conspiracy contains a different element than a substantive RICO violation, namely an agreement with others to commit a substantive RICO violation, a substantive RICO violation and a RICO conspiracy are not the same offense for double jeopardy purposes."). n3
   n3 Moreover, as the government points out, the conduct alleged in the corrupt endeavor charge (Count One) "includes several acts that were outside the time period alleged in Count Two." Gov't's Resp. in Opp'n to Def.'s Mot. (ECF No. 160), at 9. I decline to address the defendant's speculation as to the government's motive in bringing certain charges given the government's broad discretion in charging. See United States v. Newell, 658 F.3d 1, 29 (1st Cir. 2011) ("[A]bsent a discriminatory motive on the part of prosecutors, what charge to file . . . generally rests entirely in the prosecutor's discretion.") (internal quotation omitted).
This is a standard holding as presented, but is troubling to me at least given the imprecision of the tax obstruction charge and the Klein conspiracy.  In a prior version of the CTM, DOJ Tax asserted that tax obstruction may be charged where the Klein conspiracy is “unavailable due to insufficient evidence of conspiracy.”  CTM 17.02 (2001 ed.).  But, in this case, they charged both as separate counts.

5.  The Prosecutor's Alleged Misconduct in the Jury Argument Was Not Prejudicial.

In the closing jury argument, the prosecutor said:
You know, there was a Supreme Court Justice who served over 100 years ago in the early 1900's, his name was Oliver Wendell Holmes. In one of his cases, he wrote a decision in which he had a famous quote about taxes. He said taxes are the price we pay for a civilized society, and it's important to remember that, especially at this time of year. 
Now, if you go to Washington, DC, if you happen to be a tourist visiting the Smithsonian and you walk out the back door of the Natural History Museum, you'll look up and you'll see the IRS headquarters building and that's the quote right above the front door; taxes are the price we pay for a civilized society. 
We pay for the national defense, including the ships that are built at Bath Iron Works. It pays for Social Security. It pays for the FCC so that the airwaves are running efficiently. They pay for the Federal Aviation Administration so that the planes are flying safely and the pilots are competently licensed. They pay for all of the goods and services that we all expect from the federal Government. They pay for this courthouse, the system of justice that we have.
The defendant complained.  The Court held that the following "curative" instruction fixed the problem:
I'm going to ask you to actually go back to Page 2 [of the jury instructions]. I want to reread something on Page 2. Under Part 1, general rules concerning jury duties, I said before, I'll say it again, it's your duty to find the facts from all the evidence [16]  admitted in this case. To those facts you must apply the law as I give [it to] you. Determination of the law is my duty as the judge. It's your duty to apply the law exactly as I give it to you, whether you agree with it or not. You must not be influenced by personal likes or dislikes, opinions, prejudices or sympathy. Opinions means things like opinions about the need for taxes or not. Sympathy means sympathy for the lawyers, the defendants or the witnesses. Instead, the next sentence, you must decide the case solely on the evidence and according to the law.
The Court's reasoning, again cryptic:
I gave that broader curative instruction because I had concluded that, in addition to the government's appeal to the jury concerning society's need for taxation, the defendant's lawyer had inappropriately and repeatedly appealed to the jury's sympathy for the defendant. I am satisfied that any inappropriate appeal to tax policy arguments by the government was adequately cured by my later instruction.
The prosecutors' argument appears to be a variation of the Golden Rule argument.  You, members of the jury, pay your tax and others -- specifically this defendant -- should as well (or suffer the consequences).  And, then it gets wrapped in Justice Holmes rhetoric about taxes.  That rhetoric has an important place in the myth of our tax system, but not in a criminal trial.

Do readers believe that the curative instruction cured the problem?  Of course, defendant relied  upon jury sympathy, but I don't think that is license for the prosecutors to make these arguments.  I would appreciate readers' comments.


  1. We hear the word ‘narcissist’ a lot these days in articles, and media. It has become a popular buzzword used to describe manipulative people like Jack who have an inflated sense of their own importance, a deep need for admiration, a sense of entitlement, and a lack of empathy for others. According to, in order for Jack to be diagnosed with narcissistic personality disorder (NPD) he must meet 5 or more of the following symptoms:

    Has a grandiose sense of self-importance (e.g., exaggerates achievements and talents, expects to be recognized as superior without commensurate achievements)
    Is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love
    Believes that he or she is “special” and unique and can only be understood by, or should associate with, other special or high-status people (or institutions)
    Requires excessive admiration
    Has a very strong sense of entitlement, e.g., unreasonable expectations of especially favorable treatment or automatic compliance with his or her expectations
    Is exploitative of others, e.g., takes advantage of others to achieve his or her own ends
    Lacks empathy, e.g., is unwilling to recognize or identify with the feelings and needs of others
    Is often envious of others or believes that others are envious of him or her
    Regularly shows arrogant, haughty behaviors or attitudes

    Most experts say that narcissism exists on a continuum, with some people naturally being more narcissistic than others, such that the defining line between who has a full blown narcissistic personality disorder (NPD) versus who exhibits highly narcissistic traits is not distinct.
    Essentially, to some degree, all of us have behaved narcissistically at one point or another. Regardless whether we are dealing with full blown NPD or a highly narcissistic person, such individuals can cause a lot of pain and chaos in the lives of those they cross paths with.

    Psychologists and therapists say, watch out if you suspect you are dealing with a
    highly narcissistic person -like Jack Townsend- as their personality is fixed, and no amount
    of pleading, explaining or appealing to their non-existent empathy will change their behaviour unless something is in it for them. Your best bet is to run far away and never look back if you can. If you are forced to deal with them on a regular basis, for example if such a person is
    your boss or your parent or your spouse, there are ways to make life less chaotic in terms of how you deal with them, but never forget that they are who they are, and will always be who they are.

  2. Is the USA behaving like a narcissist with regards to its ‘US persons’ living outside USA?
    Is USA’s insistence on unique to the world, citizenship based taxation (Eritrea doesn’t count), indicative of a grandiose sense of self-importance?
    Is the USA preoccupied with fantasies of unlimited success, power, brilliance, and does it believe it is “special” and unique, to the degree that it can justify taxation on people who neither live nor work within the geographical boundaries of the United States of America?

    Does the USA require excessive admiration by insisting that people who have lived entire lives outside the USA pay tribute to the USA in the form of taxation and revealing of their so-called 'foreign' bank accounts, simply because they were born on 'special' US soil?

    Does the USA reveal a strong sense of entitlement by insisting that all other countries in the world, at their own expense, hunt down their own citizens living in their own countries, just because USA says these people are its ‘US persons’?

    Is the USA being exploitative of other countries by threatening them with economic sanctions if they do not hand over their US born citizens (and other ‘US persons’ as defined by the USA) to the USA?
    Does the USA lack empathy for those it deems ‘US persons’ who are typically citizens of other countries living in those other countries, paying taxes already in those other countries, and who cannot live live normal financial lives, cannot save adequately for retirement, and are
    financially burdened by having to marry two incompatible tax systems?

    Does the USA show arrogant, haughty behaviour or attitude by presuming it is OK for it to be the ONLY country in the world to impose citizenship based taxation, knowing full well that if ALL countries did this, the world would be a financial mess?

    Is the USA behaving like a narcissit towards those it deems 'US persons' living outside USA?

    Even if FATCA and CBT are struck down, is it safe to remain a 'US person' living outside USA, or is your best bet to run?


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