Kostelanetz & Fink Publication on Criminal Tax Topics (3/3/15)

Kostelanetz & Fink has published its Semi-Annual Publication, here.  Readers of this blog will know that the firm and its practitioners are at the forefront of tax controversy practice, including criminal tax practice and OVDP related practice.  Their publications are worth notice.  The key articles for the subject of this blog are:

Tax Planning on the Edge Part II: Ethical Standards in the International Tax Arena, by Bryan C. Skarlatos.  Bryan's bio is here.

Be sure and go to page 16 which appears to be a continuation of the article and discusses United States practitioners evading foreign taxes and foreign practitioners evading U.S. taxes.

Déjà vu All Over Again: Re-Trial After Conviction,  by Sharon L. McCarthy.  Sharon's bio is here.

I particularly found Sharon's article interesting.  The article recounts her representation of Dinis Field, a co-defendant in the Daugerdas case which involved tax shelters of the bullshit category.  Readers of this blog will recall that the Daugerdas defendants were convicted in what proved to be the first trial of Daugerdas and related defendants,  including Field.  But, because of jury misconduct, the case was re-tried.  On the re-trial, Mr. Field was acquitted.  Sharon recounts particular stratgies that she believes contributed to the successful representation of Mr. Field.   The reason I found all of the major tax shelter criminal cases in NYC particularly interesting was that I represented one of the defendants in the first of those cases brought against 19 KPMG related defendants.  We did not have a first or second trial for my client and 12 others who were dismissed for prosecutorial abuse.  Still, every lawyer who has a first trial end in conviction would always love the opportunity for a re-do.  Sometimes the outcome is the same, but sometimes not.  It was not for Mr. Field and his lawyer, Sharon.

The subtopics in Sharon's article should give an idea of the article.

Motion Practice and Subpoenas

[As an aside, I just read today in Bryan Garner's periodic email that the word subpoena has an alternative spelling, subpena.  See LawProse Lesson #201: "Subpoena" vs. "subpena" [which I think will  appear shortly on his blog, here].  Bottom-line, spellings sometimes come into fashion and go out.  There was a time when subpena was fashionable and was oft-used, for example, in federal statutes.  It is less popular nowadays, with the spelling subpoena being the preferred spelling.]

Limiting Instructions.

Although it is not said specifically, apparently at Sharon and her co-counsel moved early and often that limiting instructions be given to the jury that certain potentially negative evidence about certain acronymed tax shelters was irrelevant to the cases involving their clients.  Then, "in summation, [] we were able to explain to the jury that significant portions of the government’s case, and the testimony of 14 witnesses, were completely irrelevant to Denis Field."

Defense Case

In the first trial, we did not put on an affirmative defense case. Rather, we used cross-examination to elicit testimony in support of Denis’s good faith defense. As often happens in criminal cases, potential witnesses rarely want to cooperate with the defense. Witnesses with ties to BDO often expressed sympathy for Denis but refused to meet with us for fear of reprisal. As a result, we had very little hope that anyone would be willing to testify for Denis.   

In the re-trial, however, we were able to secure the cooperation of two former BDO employees: Denis’s secretaries throughout the time of the alleged conspiracy. Those witnesses were able to humanize Denis for the jury. In addition, while the government’s cooperating witnesses testified that Denis Field attended every meeting and was on every call concerning the tax shelter business, these witnesses were able to provide insight into Mr. Field’s daily schedule, which was packed with meetings, calls and extensive travel. Their testimony solidified the points we tried to make on cross-examination of the government’s cooperating witnesses, to whom Denis, when he became CEO of BDO in January 2000, had delegated the day-today responsibility for BDO’s tax shelter business.

Argument

In my opening statement to the jury, I talked about the passage of time and the fact that witnesses’ memories, like everyone’s, fade over time. The key events in this case had taken place between 11 and 15 years before the re-trial began. Many of the chinks in the witnesses’ stories upon which we were able to capitalize in the re-trial were, I argued in summation,attributable to the failure of human memory, not any venal purpose of the witnesses to hurt Denis Field. In the end, the jury, which had been incredibly attentive during the eight-week trial, believed and embraced Denis’s good faith defense. 

She did not mention whether Field took the stand in order to flesh out his good faith defense.

In all events, congratulations to Sharon and her team and to Mr. Field.

Also, I could not resist finding a little levity in an otherwise weighty and serious tome.  Go to the last page which has a staged picture of Robert S. Fink and Michael Sardar "reviewing an existing case."  I guess that they needed the "existing" adjective to let readers know that they either have an existing case or were not discussing a nonexisting case (which they may or may not have).  I don't know Mr. Sardar, but Mr. Fink is a superb lawyer bringing the highest level of skill to his existing and nonexisting cases (and clients).

By the way, Bob Fink's bio is here.  One off bio item is that he has in his possession Michael Louis Minns' tome How to Survive the IRS: My Battles Against Goliath (2001), here, which might be particularly handy for his nonexisting cases and, once he masters the lessons, perhaps even for the existing cases.