Thursday, May 2, 2019

Another Case Holding that Marinello's Pending or Expected Proceeding Requirement for Tax Obstruction Does Not Apply to the Defraud / Klein Conspiracy (5/2/19)

In United States v. Herman, 2019 U.S. Dist. LEXIS 70151 (W.D. Tex. No. AU-17-CR-301-XR 4/24/19) [no link available], the somewhat cryptically rejected the defendant's argument that the pending or expected proceeding reasoning of Marinello v. United States, 138 S. Ct. 1101 (2018) on the tax obstruction crime (§ 7212(a)) applied to the defraud / Klein conspiracy under 18 USC § 371(a).  The Court's holding on that issue is:
Defendants argue that Marinello v. United States, 138 S. Ct. 1101, 200 L. Ed. 2d 356 (2018) mandates the dismissal of count one. In Marinello, the Supreme Court interpreted 26 U.S.C. § 7212(a) and concluded that "to secure a conviction under the Omnibus Clause [of that statute], the Government must show (among other things) that there is a 'nexus' between the defendant's conduct and a particular administrative proceeding, such as an investigation, an audit, or other targeted administrative action." Id. at 1109. "In addition to satisfying this nexus requirement, the Government must show that the proceeding was pending at the time the defendant engaged in the obstructive conduct or, at the least, was then reasonably foreseeable by the defendant." Id. at 1110. Defendants argue that "it is now clear that with regard to 'obstruction conviction[s], the government would need to prove beyond a reasonable doubt that a person, acting with corrupt intent, engaged in obstructive conduct with a sufficient nexus to a pending or contemplated proceeding.'" Defendants further argue that the Indictment fails to include this essential element. This Court rejects Defendants' argument for the same reasons as stated by the Court in United States v. Flynn, No. CR 16-347 ADM/KMM, 2019 U.S. Dist. LEXIS 3317, 2019 WL 135701, at *7 (D. Minn. Jan. 8, 2019). The limitations on the substantive offense of 26 U.S.C. § 7212(a) do not apply to Klein conspiracies charged under the general conspiracy statute of 18 U.S.C. § 371. See also United States v. Parlato, No. 15-CR-149-FPG, 2019 U.S. Dist. LEXIS 33035, 2019 WL 988450, at *2 (W.D.N.Y. Mar. 1, 2019) (declining to apply Marinello to a statute the Supreme Court did not consider). The motions are denied (docket nos. 73 and 76).
I previously reported on Flynn: Two Cases Involving Marinello (Federal Tax Crimes Blog 1/15/19), here.  I also reported on Parlato. District Court Rejects Argument that Marinello Applies to Defraud / Klein Conspiracy (3/7/19), here.

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