Wednesday, February 12, 2020

D.C. Circuit Rejects Claim that Admissions were Coerced (2/12/2020)

In United States v. Cooper, ___ F.3d ___, 2020 U.S. App. LEXIS 4153 (D.C. Cir. 2020), here, two defendants, along with another (described as the hub in the wheel in this conspiracy), orchestrated a tax refund scheme and were convicted of theft of public money and conspiracy to defraud the United States. See 18 U.S.C. §§ 641, 371.  One was also convicted of aggravated identity theft, 18 U.S.C. § 1028A.  On appeal, they urged: (i) one asserted a Miranda failure from an interview at the time of executing a search warrant; (ii) that the court erred in allowing IRS agent summary witness testimony and (iii) miscellaneous other arguments that the court deemed insubstantial warranting only summary discussion.

I don’t think there is anything exceptional in the case.  But the first issue (the Miranda issue) is a reminder because it does come up often.

First, the particular fraud involved was tax fraud via erroneous refunds.  The Court describes the fraud as follows:
Several individuals in the District of Columbia acted together to steal millions of dollars from the Federal Treasury. Their method of operation was this. First beg, steal, purchase or borrow other people’s identities including, most importantly, their Social Security numbers. Then file false income tax returns seeking refunds in their names. Keep the refund requests relatively small. List on the tax returns the addresses, not of the purported filers, but of one or another co-conspirator. Then, when the refund checks from the Treasury arrive, compromise bank tellers, negotiate the checks, and deposit the proceeds in the conspirators’ personal accounts. This multi-year conspiracy netted a total of nearly $5 million in tax refunds from the Treasury.
Second, Notwithstanding the tax focus of the fraud, the investigation was started by a Postal Inspector “after detecting what appeared to be fraudulent tax returns being sent through the mail.”

Third, later in the year after the investigation was started, “twelve law enforcement officers – eleven federal agents and one from the local police – arrived at the door of Cooper’s home in a “multi unit residential complex” in the District of Columbia. The officers were there to execute a search warrant.”  (Really, 12 agents to search an apartment?)  The opinion does not state which agencies the law enforcement officers were associated with, other than one from the local police.  I would have thought that IRS CI would have been involved by then, but the opinion does not say that.

Fourth, two of the agents interviewed the person living in the apartment, Takara Cooper ("Cooper").  Again, the opinion does not state the agency the two interviewing agents were affiliated with.  As tax crimes fans know, IRS CI agents routinely give modified Miranda warnings in noncustodial settings.  See IRM (02-01-2005), Duty to Inform Individual of Constitutional Rights, here; IRM (05-15-2008), Informing of Constitutional Rights in Non-Custodial Interviews, here; IRM (02-01-2005), Subject of Investigation.  The noncustody (and custody) statements of rights are here (the custodial rights are presented first, so scroll down to the noncustodial rights); also the noncustody statements are both at the end of this blog and in (02-01-2005)
Subject of Investigation.

Fifth, in any event, whether a noncustodial statement of rights was given, a custodial statement (the more robust Miranda warning) was not given.  So, the case turned upon whether the custodial, full Miranda warnings needed to be given.  That turned upon whether Cooper was “in custody” or its equivalent (circumstances indicating a serious danger of coercion).

Sixth, the Court examined the circumstances noting that (i) the interview was in Cooper’s living room, (ii) the agents asked for her agreement to the interview (no compulsion), (iii) no weapons were brandished, (iv) the agents employed a professional and cordial tone; and (v) Cooper cooperated.  Those factors indicated no coercion.

Seventh, the Court rejected coercion in a particular event where Cooper needed to take her daughter to school.  The agents stopped the interview and took Cooper and her daughter to the school and then returned with Cooper.  Under the circumstances, the Court held that this event did not supply an element of coercion.

As I said, nothing new here in the test for when the more robust Miranda warning is needed and the facts are fairly typical of situations found not to be sufficiently coercive the require the more robust Miranda warnings.

Noncustodial Warning (from IRM image but also in (02-01-2005), Subject of Investigation):

Non-Custody Statement of Rights

(At the outset of your first official meeting with the subject of an investigation, identify yourself as a special agent of the IRS and produce authorized credentials.  THEN STATE:)

“As a special agent, one of my functions is to investigate the possibility of criminal violations of the Internal Revenue laws, and related offenses.

“In connection with my investigation of your tax liability (or other matter), I would like to ask you some questions.  However, first I advise you that under the 5th [Fifth in IRM] Amendment to the Constitution of the U.S. [United States in IRM], I cannot compel you to answer any questions or to submit any information if such answers or information might tend to incriminate you in any way.  I also advise you that anything which you say and any documents which you submit may be used against you in any criminal proceeding which may be undertaken.  I advise you further that you may, if you wish, seek the assistance of any attorney before responding.

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