Tuesday, August 3, 2010

Seventh Circuit Sounds the Death Knell for Inextricable Intertwinement as End-Run Around Rule 404 and 403 (8/3/10)

Courts have developed the notion that evidence inextricably intertwined with the criminal offense charged may be introduced free of the constraints of FRCrP Rule 404(b) and perhaps even of CRCrP Rule 403 (excluding certain types of evidence including evidence otherwise admissible under Rule 404(b) if unfairly prejudicial). In United States v. Gorman, 613 F.3d 711 (7th Cir. 2010), here, the Seventh Circuit sounded the death knell of the inextricable intertwinement doctrine. Although Gorman is not a tax case, Rule 404(b) does loom large in many criminal tax cases (both at trial and in consideration of whether a plea is advisable). Accordingly, I excerpt there the guts of the Seventh Circuit's holding and reasoning (some case citations omitted):
This circuit has also traditionally allowed the admission of evidence under the "inextricable intertwinement" or "intricately related" doctrine. See United States v. Conner, 583 F.3d 1011, 1018 (7th Cir. 2009). The inextricable intertwinement doctrine is based on the notion that evidence inextricably intertwined with charged conduct is, by its very terms, not other bad acts and therefore, does not implicate Rule 404(b) at all. "In other words, evidence admitted under this doctrine lie[s] outside the purview of the Rule 404(b) character/propensity prohibition, and is not subject to its constraints regarding the manner in which the evidence may be used." Conner, 583 F.3d at 1019 (internal quotation marks and citations omitted) (alteration in original).

Even if evidence is initially deemed admissible under any of these three doctrines, however, that evidence must still pass muster under Rule 403's balancing test to actually be admitted against a defendant. To make this determination, a court must weigh whether the evidence's probative value is substantially outweighed by the danger of unfair prejudice to the defendant. Only if the court determines that Rule 403's balancing test weighs in favor of admission is the disputed evidence then placed before the jury.

* * * *

We have recently cast doubt on the continuing viability of the inextricable intertwinement doctrine, finding that "[b]ecause almost all evidence admitted under this doctrine is also admissible under Rule 404(b), there is often 'no need to spread the fog of "inextricably intertwined" over [it].'" Conner, 583 F.3d at 1019. We again reiterate our doubts about the usefulness of the inextricable intertwinement doctrine, and again emphasize that direct evidence need not be admitted under this doctrine. If evidence is not direct evidence of the crime itself, it is usually propensity evidence simply disguised as inextricable intertwinement evidence, and is therefore improper, at least if not admitted under the constraints of Rule 404(b).

We recognize, however, that we do not write on a clean slate. There traditionally have been subtle distinctions between direct evidence of a charged crime, inextricable intertwinement evidence, and Rule 404(b) evidence, but our case law has not often focused on these fine distinctions. We have often lumped together these types of evidence, and this has only served to further cloud the already murky waters of the inextricable intertwinement doctrine.

There is now so much overlap between the theories of admissibility that the inextricable intertwinement doctrine often serves as the basis for admission even when it is unnecessary. Thus, although this fine distinction has traditionally existed, the inextricable intertwinement doctrine has since become overused, vague, and quite unhelpful. To ensure that there are no more doubts about the court's position on this issue -- the inextricable intertwinement doctrine has outlived its usefulness. Henceforth, resort to inextricable intertwinement is unavailable when determining a theory of admissibility.
Addendum 8/3/2010:
After posting the foregoing, I read United States v. Jewell, 614 F.3d 911 (8th Cir. 2010), here, decided July 30, 2010, which has a good, short discussion of Rule 404(b) evidence in a tax case.  The defendant there was a tax lawyer who had assisted a client evade tax through a one-off tax evasion scheme. The Court's discussion relevant to the Rule 404(b) issue is as follows:
The district court allowed the government to introduce evidence of a separate tax evasion scheme in which Jewell participated to establish his intent to engage in the Evans tax evasion scheme. Moser created a nonprofit corporation called the Christian Missionary Fund (CMF), to which both he and Jewell made contributions, claiming the contributions were charitable for tax purposes. In reality, the payments made to CMF were tuition payments for the two men's children, who attended private schools. After the so-called charitable contributions were made to CMF, CMF would in turn award "scholarships" for donors' children at the schools they attended. The government argued this tax evasion scheme, which occurred during the same time Jewell engaged in the Evans tax evasion scheme, was admissible as evidence of Jewell's criminal intent to evade taxes.
Other acts evidence is admissible under Rule 404(b) if it is 1) relevant to a material issue raised at trial, 2) similar in kind and close in time to the crime charged, 3) supported by sufficient evidence to support a jury finding the defendant committed the other act, and 4) its probative value is not substantially outweighed by its prejudicial value.
United States v. Johnson, 439 F.3d 884, 887 (8th Cir. 2006).

The CMF evidence was relevant to Jewell's intent to engage in a tax evasion scheme, was arguably similar to the Evans tax evasion scheme, and occurred during the same time. Finally, there was sufficient evidence to show Jewell engaged in this separate tax scheme, and the district court was within its discretion to determine the probative value of the evidence was not outweighed by its prejudicial effect under Rule 403. We therefore find no abuse of discretion in the district court's decision to admit evidence of the CMF tax evasion scheme.

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