Saturday, June 25, 2011

Cross Examination on Tax Non-Compliance for Credibility Purposes and FRE Rule 608 (6/25/11)

Federal Rules of Evidence Rule 608 provides in relevant part:
Rule 608. Evidence of Character and Conduct of Witness

(a) Opinion and reputation evidence of character. The credibility of a witness may be attacked or supported by evidence in the form of opinion or reputation, but subject to these limitations: (1) the evidence may refer only to character for truthfulness or untruthfulness, and (2) evidence of truthful character is admissible only after the character of the witness for truthfulness has been attacked by opinion or reputation evidence or otherwise.

(b) Specific instances of conduct. Specific instances of the conduct of a witness, for the purpose of attacking or supporting the witness' character for truthfulness, other than conviction of crime as provided in rule 609, may not be proved by extrinsic evidence. They may, however, in the discretion of the court, if probative of truthfulness or untruthfulness, be inquired into on cross-examination of the witness (1) concerning the witness' character for truthfulness or untruthfulness, or (2) concerning the character for truthfulness or untruthfulness of another witness as to which character the witness being cross-examined has testified.

* * * *
See also the Notes to the Rule.

In United States v. Moore, 2011 U.S. Dist. LEXIS 66257 (ED VA 2011), here, the court applied this rule in a criminal tax case. The defendant, Moore, was indicted for alleged tax crimes related to his income and reporting from a so-called "gentlemen's club." Three former club employees testified
to Moore's control of all the money that came into the club by way of door charges, cash advance fees, lap dance fees, fines, and other sources. They then estimated, based on their experience of working at the club, sometimes for several years, the average payments to the house for these revenues on a nightly basis. The witnesses' estimates were substantially more than the amounts reported on the daily sheets.
For example, one witness, who had been a waitress/door-watcher/dancewatcher during her years at the club, testified about specific high-traffic days during the year, specifically recalling that NASCAR race weekends in Richmond were extremely busy at the club. After comparing her experience on those weekends with the amounts reported by Moore on the corresponding daily sheets for those days, she testified that the amounts on the daily sheets were too low and were not possible for the volume of business she remembered.
The defendant was convicted and filed the more or less obligatory motion for acquittal or new trial. One of the grounds asserted was the court's restriction on his ability cross-examine the six employee witnesses about their tax compliance with regard to the income from the club, an issue that, defendant claimed, bore on their credibility as witnesses. The Court rejects the argument as follows:
Three former employees had failed to file tax returns during their periods of employment at Club Velvet, while three others had filed tax returns, but failed to report all cash received through tips. In considering the admissibility of this testimony, the Court reviewed two decisions presented by defense counsel; however, neither case addressed the probative value, if any, of a witness's failure to file a tax return on that witness's credibility. Thus, after reviewing the decisions and the Federal Rules of Evidence and listening to the parties' arguments, the Court concluded that, under Rule 608(b), the three former employees who had filed tax returns that did not reflect all of their income could be cross-examined about the potentially false statements on their returns. The Court, however, denied Moore's request to cross-examine the three other employees who failed to file returns because, having filed no returns at all, they did not make potentially false statements under penalty of perjury. In other words, in not filing returns, the witnesses did not put their credibility at issue. Moore maintains that the Court erred in this ruling, and urges the Court to exercise its discretion and grant a new trial on this basis.

A defendant has a right under the Sixth Amendment's Confrontation Clause to cross-examine government witnesses on matters bearing on credibility or potential bias. Crawford v. Washington, 541 U.S. 36, 59-61 (2004); United States v. Turner, 198 F.3d 425, 429 (4th Cir. 1999), cert. denied, 529 U.S. 1061 (2000). This encompasses the right "to expose to the jury the facts from which jurors, as the sole triers of fact and credibility, could appropriately draw inferences relating to the reliability of the witness." Davis v. Alaska, 415 U.S. 308, 318 (1974); Turner, 198 F.3d at 429 ("[P]rohibiting a criminal defendant from cross-examining a witness on relevant evidence of bias and motive may violate the Confrontation Clause, if the jury is precluded from hearing evidence from which it could appropriately draw adverse inferences on the witness's credibility."). However, a defendant's right to cross-examination has its limits, and "trial judges retain wide latitude insofar as the Confrontation Clause is concerned to impose reasonable limits on . . . cross-examination based on concerns about, among other things, harassment, prejudice, confusion of the issues, the witness' safety, or interrogation that is repetitive or only marginally relevant." Delaware v. Van Arsdall, 475 U.S. 673, 679 (1986); United States v. Smith, 441 F.3d 254, 266 (4th Cir. 2006). Accordingly, under Rule 608(b), it is within the district court's discretion whether to allow specific instances of the conduct of a witness, for the purpose of attacking the witness' character for truthfulness, to be inquired into on cross-examination of the witness. Fed. R. Evid. 608(b). Moreover, the Advisory Committee Notes following the text of Rule 608(b) state that "the overriding protection of Rule 403 requires that probative value not be outweighed by danger of unfair prejudice, confusion of issues, or misleading the jury, and that of Rule 611 bars harassment and undue embarrassment." Id. Advisory Comm. Note (b)(2).

During trial, the Court ruled that filing a false return —in this context, failing to report tips received while working at Club Velvet — fell within the general rubric of character for untruthfulness because the tax return is filed under penalty of perjury. Thus, making a false statement about income on a tax return is probative of character for untruthfulness. However, Moore offered no authority, nor could this Court locate any case or treatise, that supported his position that failing to file a return was probative of character for untruthfulness under Rule 608(b).

Further troubling to the Court was that, if it allowed counsel to pursue that line of questioning under Rule 608(b), it opened the door to testimony about the reasons why the former employees failed to file returns, thereby potentially confusing the jury about the issues and delaying the trial. The Court, therefore, found that failing to file a tax return was not probative of character for untruthfulness, and, to the extent that it might be minimally relevant, the marginal relevance was substantially outweighed by the danger of confusion of the issues, misleading the jury, and considerations of delay and waste of time under Rule 403. In his motion for a new trial, Moore has cited no authority, let alone any new authority, to support his argument. Accordingly, the Court finds that a new trial is not warranted on this ground.
The question I ask readers is whether a witness's tax compliance history be a standard discovery request to the Government or perhaps a mandatory Government disclosure obligation under BradyGiglio or Jencks, particularly as to situations where the defense is aware that there might be some failure to report, particularly if the income was somehow related to the facts in issue in the case.

Addendum 6/25/11 5:25pm:  Readers interested in this general area might also like White Collar Crime Prof's blog titled The Prosecutor’s Duty to Investigate His Own Witness (6/24/11), here, which discusses the recent Seventh Circuit decision in United States v. Freeman, 09-cr-4043, 2011 WL 2417091 (7th Cir., June 17, 2011), here, which imposes a duty on the Government to investigate leads that its witness' testimony is false.

1 comment:

  1. Given that it appears that it is much safer for a potential witness to refrain from filing as opposed to filing a false or misleading tax return, does this mean that, when it comes to impeachment, such a witness is likely to get a pass?

    Here is a something: Under what circumstances is "non filing" in the nature of an "inconsistent statement"?


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