Court of Appeals Rejects Arguments as to Improper Admission of Evidence (1/6/18)

In United States v. Wrubleski, 2017 U.S. App. LEXIS 17168 (11th Cir. 2017) (unpublished), here, two issues interested me.  First, testimony from an IRS attorney who had handled a prior Tax Court case brought by Wrubleski.  Second, a holding on admission of co-conspirator testimony under FRE 801(d)(2)(E).

IRS Attorney Testimony

The Court describes the testimony and curative instruction:

At trial, the government called Ken Hochman, an attorney at the IRS, as one of its witnesses. Hochman testified that he represented the IRS in United States Tax Court, including in a case filed by Wrubleski in 2004 in which Wrubleski challenged the validity of an IRS collection action. Outside the presence of the jury, the district court expressed concern about Hochman's testimony. The court said it was "concerned that [] the government is attempting to take a taxpayer's participation in [the IRS] review process . . . as activity that can be looked at for the basis of a criminal charge" because "the government thinks the taxpayer was so baseless" in bringing the Tax Court action. The government explained that although Wrubleski's litigation in Tax Court could not itself constitute the crime of interference with the administration of the Internal Revenue laws, Wrubleksi's previous experience in Tax Court showed his "overall willfulness" to commit other acts that constitute the crime. 

When the jury returned, the district court gave a curative instruction. The court said:

I want to be clear that the fact that [Wrubleski] went to tax court, and the fact that, for instance, the government may not be happy with how [he] acted in the tax court . . . that can't be the basis of a charge of corruptly trying to impede the proper administration of the Internal Revenue Service. 

If you tell somebody they can take an appeal [to the Tax Court] and they take an appeal and they lose the appeal, that's not the basis of the charge here.

The court then explained that information about Wrubleski's Tax Court litigation was "relevant only to the question of whether the government can prove that Mr. Wrubleski acted willfully." Before resuming Hochman's testimony, the court reiterated: "I want to make sure that everybody understands that how Mr. Wrubleski conducted himself in the litigation, that cannot serve as the basis for the first charge, which is the charge of corruptly impeding the administration of justice." Despite the court's instruction, Wrubleski moved for a mistrial on the ground that his "use of judicial [*4]  process . . . has been portrayed as being something improperly done toward the IRS." The district court denied his motion.

The Court of Appeals held:

Wrubleski appears to argue that using a defendant's previous legal proceedings against the IRS to prove the offense of interfering with the administration of the Internal Revenue laws, 26 U.S.C. § 7212(a), is an improper "theory of culpability." He says the evidence of his Tax Court proceedings showed only that "[h]e took advantage of the legal avenues offered to him," and did not prove he was "corruptly trying to obstruct or impede the IRS." 

Even assuming it was error to admit the evidence of Wrubleski's litigation history—a question we need not decide—the admission of this evidence did not mandate a mistrial here [*9]  because the court gave an adequate curative instruction. The district court agreed with Wrubleski that a person's litigation in Tax Court could not constitute a violation of § 7212(a). As we described above, this prompted the district court to give an extensive curative instruction. The court instructed the jury that any actions Wrubleski filed in Tax Court "can't be the basis of a charge of corruptly trying to impede the proper administration of the Internal Revenue Service. . . . [H]ow Mr. Wrubleski conducted himself in the litigation, that cannot serve as the basis for the first charge, which is the charge of corruptly impeding the administration of justice." "When a curative instruction is given, this court reverses only if the evidence is so highly prejudicial as to be incurable by the trial court's admonition." United States v. Garcia, 405 F.3d 1260, 1272 (11th Cir. 2005) (per curiam) (quotation omitted). Here, the evidence that Wrubleski challenged his tax liability in Tax Court was not so prejudicial as to be beyond the cure offered by the district court's prompt and thorough instruction. Because the district court cured the error Wrubleski complains of, the court did not abuse its discretion in denying his motion for a mistrial. See Newsome, 475 F.3d at 1227.

Rule 801(d)(2)(E) Holding.

Although Wrubleski had not been charged with conspiracy, the testimony of his return preparer was ad,otted under Rule 801(d)(2)(E), permitting the admission of co-conspirator statements.    That rule, as quoted by the Court, requires that the Government "prove by a preponderance of the evidence: (1) that a conspiracy existed; (2) that the conspiracy included the declarant and the defendant against whom the statement is offered; and (3) that the statement was made during the course and in furtherance of the conspiracy."  The Court's holding as to the proof of the conspiracy:

The evidence also showed that Marty and Wrubleski communicated about his tax filings and that Wrubleski paid Marty for preparing the false return. This is sufficient to establish a conspiracy between Wrubleski and Marty to file a false claim with the IRS. See United States v. Cagnina, 697 F.2d 915, 922 (11th Cir. 1983) ("Co-conspirators' statements are admissible even when no conspiracy is charged if there is independent evidence of a concert of action in which the defendant was a participant."). The evidence also established that the statement was made "in furtherance of the conspiracy." See Miles, 290 F.3d at 1351. Agents discovered the note in Marty's office, in a file that was marked with Wrubleski's name and that contained a copy of the fraudulent 2007 tax return. Beyond that, the message on the note—which discussed not "aggravat[ing] officials" and "not includ[ing]" Wrubleski's wages from his job at MC-2—appears to be a plan for accomplishing the tax fraud. Therefore, it was not an abuse of discretion for the district court to conclude that the note was a statement made between co-conspirators, admissible under Rule 801(d)(2)(E).

JAT Comment:

1.  The Government's explanation of the use of the IRS attorney testimony is, I think, weak.  The explanation was:  "The government explained that although Wrubleski's litigation in Tax Court could not itself constitute the crime of interference with the administration of the Internal Revenue laws, Wrubleksi's previous experience in Tax Court showed his "overall willfulness" to commit other acts that constitute the crime."  My gut tells me that this is a stretch.  How about undergoing an audit or appealing to IRS Appeals?  I just think that the danger of misunderstanding the testimony is greater than any fair benefit to be derived.  And, I don't think the curative instruction really fixes the issue.  Once the cat was out of the bag, however, the curative instruction was necessary, but that raises the question of whether it was really curative.

2. A quibble.  The Court of Appeals opens with the following:  "A trial jury convicted Paul F. Wrubleski of charges related to tax fraud and tax evasion. "  The court later explains that the conviction was for one count of tax obstruction, § 7212(a), and four counts of filing false claims, 18 U.S.C. § 287.  Those actual counts do not include tax evasion, which is a term of art meaning the crime described in § 7201.