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United States v. Nicholson

United States District Court, S.D. Mississippi, Eastern Division

May 16, 2019

UNITED STATES OF AMERICA
v.
CARL NICHOLSON

          MEMORANDUM OPINION AND ORDER

          KEITH STARRETT UNITED STATES DISTRICT JUDGE

         For the reasons provided below, the Court denies Defendant's Motion for a New Trial [70].

         I. Background

         On December 12, 2018, the Government charged Defendant in an 11-count Superseding Indictment. Count One alleged that Defendant conspired to defraud the Government by impeding, impairing, or obstructing the collection of taxes, in violation of 18 U.S.C. § 371. Counts Two through Five alleged that Defendant prepared and filed false tax returns, in violation of 26 U.S.C. § 7206(1). Counts Six through Eleven alleged that Defendant assisted in the preparation of false tax returns, in violation of 26 U.S.C. § 7206(2). The Court held a jury trial on February 4-8, 2019, and the jury convicted Defendant on all counts. Defendant later filed a Motion for a New Trial [70].

         II. Discussion

         Rule 33 permits the Court to “vacate any judgment and grant a new trial if the interest of justice so requires.” Fed. R. Crim. P. 33(a). Rule 33 “goes to the fairness of the trial rather than the question of guilt or innocence.” United States v. McRae, 795 F.3d 471, 481 (5th Cir. 2015). “Rule 33 motions are disfavored and reviewed with great caution.” United States v. Pratt, 807 F.3d 641, 645 (5th Cir. 2015). The Court has “wide discretion, ” United States v. Mahmood, 820 F.3d 177, 190 (5th Cir. 2016), but it must exercise its discretion “with caution” because “the power to grant a new trial . . . should be invoked only in exceptional cases.” United States v. Scroggins, 485 F.3d 824, 831 (5th Cir. 2007). “Generally, . . . the trial court should not grant a motion for new trial unless there would be a miscarriage of justice or the weight of the evidence preponderates against the verdict.” United States v. Wall, 389 F.3d 457, 466 (5th Cir. 2004).

         A. Summary Witness and Charts

         Defendant argues that the Court erred by permitting the Government to introduce the summary witness testimony of IRS Special Agent Bradley Luker. Defendant contends that Luker improperly summarized the testimony of other witnesses, and that Luker provided expert opinions, despite not being designated as an expert.[1]

         “There is an established tradition, both within this circuit and in other circuits, that permits a summary of evidence to be put before the jury with proper limiting instructions.” United States v. Griffin, 324 F.3d 330, 349 (5th Cir. 2003). Such testimony is allowed in “limited circumstances in complex cases, ” United States v. Baker, - F.3d -, 2019 WL 1873306, at *4 (5th Cir. Apr. 26, 2019), to “aid the jury in its examination of the evidence already admitted.” Griffin, 324 F.3d at 349. For example, summary witnesses “may be appropriate for summarizing voluminous records, ” but they are “not to be used as a substitute for, or a supplement to, closing argument.” Baker, 2019 WL 1873306 at *4. “To minimize the danger of abuse, summary testimony must have an adequate foundation in evidence that is already admitted, and should be accompanied by a cautionary jury instruction. Moreover, full cross-examination and admonitions to the jury minimize the risk of prejudice.” Id. at *5.

         This was a complex case meriting the introduction of summary evidence. The Superseding Indictment included eleven different counts. In Count 1, the Government charged Defendant with conspiring to defraud the United States by impeding, impairing, obstructing, or defeating the Internal Revenue Service's ability to collect taxes, in violation of 18 U.S.C. § 371. In Counts 2-6, the Government charged Defendant with willfully submitting tax returns with false information, in violation of 26 U.S.C. § 7206(1). In Counts 7-11, the Government charged Defendant with aiding or assisting in the preparation or presentation of tax returns containing false information, in violation of 26 U.S.C. § 7206(2). Tax cases are generally tedious, document-intensive affairs. This one was no different. The case involved accounting concepts, nuances of tax law, and business arrangements outside the experience of most jurors. There were dozens of exhibits consisting of hundreds of pages. Even the Court had trouble following the evidence at some points during the trial.

         Moreover, Counts 2-6 were predicated upon Defendant's failure to report income received from his accounting firm in the form of expense reimbursements. The Government presented voluminous evidence demonstrating that many of these payments were not, in fact, reimbursements. Rather, Defendant submitted fraudulent reimbursement requests, effectively stealing from his partners. The Government introduced several years' worth of Defendant's credit card statements, encompassing thousands of individual charges. The Government cross-referenced those statements with Defendant's reimbursement requests and demonstrated that he received “reimbursement” for charges made by his wife and son for goods and services unrelated to the firm's business. For example, Defendant received reimbursement for dating websites, iTunes charges, a medical concierge service, his son's legal fees related to a divorce, dental work, and veterinary services, among many others. While the general theory underlying this aspect of the Government's case was simple - Defendant stole from his partners and didn't declare the stolen funds as income - the evidence was voluminous and required connecting the dots among various documents and witnesses.

         In this respect, Agent Luker's testimony was necessary and helpful to the jury. It “consisted of reading the contents of exhibits and sorting through the evidence to show how the documents related to each other and to charges in the indictment.” Id. at *6. Luker “highlighted some key pieces of evidence, ” and his “testimony did not draw inferences for the jury, was not wholly argumentative, and did not serve as a substitute for closing argument.” Id. For these reasons, it was appropriate summary witness testimony.

         Defendant is correct that Luker restated the prior testimony of previous witnesses on numerous occasions, particularly the testimony of Frank McWhorter concerning the nature of Defendant's credit charges and whether they were reimbursable as business expenses. But “[a]s a summary witness, an IRS agent may testify as to the agent's analysis of the transaction which may necessarily stem from the testimony of other witnesses.” United States v. Moore, 997 F.2d 55, 58 (5th Cir. 1993). To an extent, an agent providing summary testimony can not avoid referring to prior witnesses' testimony. While it is impermissible for “one prosecution witness merely to repeat or paraphrase the in-court testimony of another as to ordinary, observable facts, ” this was not such a case. United States v. Castillo, 77 F.3d 1480, 1500 (5th Cir. 1996). Luker's investigation was built on information gleaned from interviews with witnesses such as McWhorter, and, therefore, it was necessary to refer to some prior testimony when explaining the Government's investigation and the source of figures in its summary charts.

         Defendant also contends that Luker provided expert testimony, despite not being designated as an expert witness. Defendant has not identified any specific opinions that were improper, and the Court declines to guess. However, the record demonstrates that Luker simply summarized the evidence which demonstrated that Defendant's tax returns were false. He did not express his opinion on a material element of the charged crimes. Rather, he recounted the timeline of his investigation and referred to previously admitted documents and testimony which supported the Government's charges.

         Even if the Court erred in admitting Luker's testimony, the error was harmless. The evidence of Defendant's guilt was overwhelming, and the Court doubts that Luker's testimony made a difference one way or the other. Defendant has not demonstrated that Luker's testimony “had a substantial and injurious effect or influence in determining the jury's verdict.” Baker, 2019 WL 1873306 at *4. Regardless, significant curatives were present: Luker's testimony had an adequate foundation in the evidence already admitted, Defendant's counsel had an opportunity to cross-examine Luker, and the Court gave a limiting instruction regarding summary evidence. Id. at *6. Additionally, Defendant has not demonstrated that any of Luker's testimony was misleading or erroneous. See Griffin, 324 F.3d at 350.

         Finally, despite Defendant's repeated assertions to the contrary in briefing, Luker was not presented as a rebuttal witness. The Government put him on as the final witness in its case-in-chief, and Defendant had an opportunity to present his own evidence regarding the topics covered in Luker's testimony. It was not a given that Defendant would rest without presenting any evidence. In fact, he provided a witness list and designated an expert. Therefore, Luker's testimony was not impermissible “rebuttal testimony ...


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