Opinions on Motions in Limine Regarding Government Use of Defendant's Former Tax Lawyer as Witness Against Him (1/31/18)

I blogged earlier about opinions on motions in limine in the Scali prosecution.  See Opinion on Discovery in Tax Evasion Case of Reliance on Counsel Documents (Federal Tax Crimes 1/26/18), here.  I blog today on two more opinions on motions in limine regarding, in part, testimony of a tax attorney, Jared Scharf, that Scali had used before the criminal prosecution for certain civil tax matters.  The first is an opinion dated 1/23/18, here, and the second is an opinion dated 1/29/18, here.  And here is an updated docket report, here, showing a lot of commotion in the case.

• The 1/23/18 opinion, here:

The Court resolves several issues, but here I found only one particularly interesting.  Scali moved to preclude six Government witnesses.  One was Jared Scharf.  Here is the discussion:

Jared Sharf, the Defendant's former tax attorney, is expected to testify about information and documents provided to him by the Defendant for the purposes of drafting correspondence to the IRS with respect to Counts Three through Seven n5 of the Superseding Indictment. (Govt. Opp. to Def. Second Motion In Limine ("Govt. Second Opp.") 4-5, ECF No. 132.) The Defendant moves to bar the Government from compelling Sharf s testimony in their case-in-chief on the grounds that it may violate the attorney-client privilege. (Def. Second Mot. 5.) The Court denies the motion at this time. First, the Government submits that it intends to question Scharf on issues which do not include communications between the Defendant and Scharf protected by the attorney-client privilege. n6 (Govt. Second Opp. 5.) Second, it is still unclear if the Defendant will waive the attorney-client privilege as to these communications by appropriately raising an advice of counsel defense. See United States v. Wells Fargo Bank N.A., No. 12-CV-7527, 2015 U.S. Dist. LEXIS 84602, 2015 WL 3999074, at *2 (S.D.N.Y. June 30, 2015) (noting the "well-established principle that where a party asserts an advice-of-counsel defense, that party impliedly waives any privilege that would otherwise attach to communications between him and his counsel"). As a result, the Court is unable to ascertain the extent of the Defendant's waiver of the attorney-client privilege at this time. Accordingly, the Defendant's motion is denied.
   n5 Counts Three through Seven charge the Defendant with making false statements to IRS officers on two occasions, corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue Laws, and two counts of tax evasion.
   n6 Specifically, the Government argues that the Defendant relinquished the attorney-client privilege as to the documents that the Defendant intended to send to the IRS in connection with his taxes. See Schaeffler v. United States, 806 F.3d 34, 40 (2d Cir. 2015) (The privilege ... protects communications between a client and its attorney that are intended to be, and in fact were, kept confidential. A party that shares otherwise privileged communications with an outsider is deemed to waive the privilege by disabling itself from claiming that the communications were intended to be confidential.); see also Bradley v. C.I.R., 209 Fed. App'x 40 (2d Cir. 2006) (noting that it could be reasonably inferred that Defendant waived the attorney-client privilege after the Defendant's tax attorney disclosed documents to accountants, who then disclosed the documents to the IRS).

• The 1/29/18 opinon, here:

The portion of this opinion I find interesting also relates to Scharf:

Testimony Beyond the Scope of Government's Direct Examination 

The Government moves to preclude the Defendant from cross-examining the Government's witness, Jared Scharf, on matters beyond the scope of direct examination. (Govt. Third Mot. 5-6.) The Government intends to question Scharf for the purpose of eliciting non-privileged testimony as to the information and documents provided by the Defendant to Scharf for the purposes of drafting correspondence to the IRS with regards to Counts Three through Seven of the Second Superseding Indictment. n5 (Govt. Third Mot. 6.) The Government is concerned that defense counsel wishes to elicit testimony from Scharf that would go well beyond the scope of the Government's anticipated narrow direct examination, including the purported legal advice from Scharf upon which Defendant claims to have relied. (Govt. Third Mot. 6.) Consequently, the Government submits that the Defendant be required to call Scharf as a witness in his case in chief rather than delve into testimony that is beyond the scope of the Government's direct examination of Scharf.
   n5 These counts charge the Defendant with making false statements to an IRS agent on two occasions, tax evasion for the years 2011 and 2012, and corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue Laws (collectively the "tax related counts"). 

The Defendant argues that that he should be allowed to question Scharf and not be compelled to recall him because it would unduly and unnecessarily inconvenience the witness and detract from the truth-telling function. (Def. Third Opp. 6-7.) Further, since the issues the Defendant expects to raise with Scharf are not "far afield" from those the Government intends to pursue during their examination, Rule 611(b) should not be enforced as to confuse the jury and make the trial less efficient. (Def. Third Opp. 7.) 

The Government's motion is granted. Traditionally "counsel are entitled to considerable leeway in cross-examination," United States v. Birnbaum, 337 F.2d 490, 498 (2d Cir. 1964), however, "[c]ross-examination should not go beyond the subject matter of the direct examination and matters affecting the witness's credibility." Fed. R. Evid. 611(b); Baker v. Goldman Sachs & Co., 669 F.3d 105, 111 (2d Cir. 2012). This Court has broad discretion in determining the scope of cross-examination. United States v. Koskerides, 877 F.2d 1129, 1136 (2d Cir. 1989); United States v. Whitten, 610 F.3d 168, 183 (2d Cir. 2010). In this case, the Government will question Scharf about information and documents the Defendant provided to Scharf for the purposes of drafting correspondence to the IRS. These documents are relevant to Counts Three through Seven (collectively "the tax related counts"). Defense counsel intends to question Scharf on the legal advice he gave Defendant with respect to the underlying actions of the same tax related counts. The intended questioning falls outside of the scope of the Government's direct examination, First, the subject matters are patently different. The Government intends to elicit testimony concerning documents and information provided to the IRS while Defense counsel intends to question Scharf on legal advice he provided to the Defendant. Although both lines of questioning concern the tax related counts, the underlying subject matter (documents as opposed to legal advice) is different. Second, there is a serious risk of confusing the jury because not only will they hear testimony regarding unrelated subject matters, but they will also hear evidence regarding a defense theory for the first time during the Government's case in chief. Further, the Defendant has not provided a reason why Scharf cannot be recalled to testify during his case in chief. See United States v. Martinez-Montilla, 82 F. App'x 53, 55-56 (2d Cir. 2003). Thus, the Government's motion to preclude the Defendant from cross-examining Scharf beyond the scope of direct examination is granted.