Opinion
Criminal No. C2-98-28-01.
January 16, 1999.
MEMORANDUM AND ORDER
I. INTRODUCTION
Before the Court is the defendant, Lawrence A. Grube's, a/k/a Larry Grube, Motion for Judgment of Acquittal or, in the Alternative, for a New Trial, (docket # 97). Defendant asserts that he is entitled to a judgment of acquittal under Federal Rule of Criminal Procedure 29(c) because there was insufficient evidence from which a jury could find the defendant guilty beyond a reasonable doubt. Defendant further asserts that he is entitled to a new trial under Rule 33 because (1) again, insufficiency of the evidence, (2) improper jury instructions, and (3) prosecutorial misconduct after jury selection.
The government responds that the defendant has raised no new issues that have not already been properly addressed by the Court and thus the Motion should be denied. Further, the government argues that the defendant's motion and brief were untimely and warrant dismissal. The government does not specifically address the improper jury instructions and prosecutorial misconduct issues.
Preliminarily, the Court considers the defendant's brief as timely filed, as it was filed within five days after the filing of the motion. See Local Rule 7.1(A). The Court signed an order on November 25, 1998, granting an extension of time for the filing of the motion. There is some technical argument that the motion itself should have been filed earlier than it was, but in any event it has been accepted and is now considered by the Court.
II. MOTION FOR JUDGMENT OF ACQUITTAL UNDER RULE 29 — INSUFFICIENT EVIDENCE
The insufficient evidence issue raised by the defendant does not entitle the defendant to a judgment of acquittal under Federal Rule of Criminal Procedure 29. "A motion for judgment of acquittal should only be granted where the evidence, viewed in the light most favorable to the government, is such that a reasonably minded jury must have a reasonable doubt as to the existence of any essential elements of the crime charged." United States v. Pardue, 983 F.2d 843, 847 (8th Cir. 1993) (citations omitted). In other words, the test is whether "a reasonable fact finder could have found guilt beyond a reasonable doubt." Id. (citation omitted). "The evidence need not exclude every other hypothesis except that of guilt so long as it is sufficient to convince the jury beyond a reasonable doubt that the defendant is guilty." United States v. Thirion, 813 F.2d 146, 157 (8th Cir. 1987) (citations omitted); see also United States v. Charroux, 3 F.3d 827, 831 (5th Cir. 1993) (noting that the evidence need not exclude every rational hypothesis of innocence or be wholly inconsistent with every conclusion except guilt). The district court has "very limited latitude," and can "neither weigh the evidence nor assess the credibility of the witnesses." Pardue, 983 F.2d at 847 (citations omitted).
Here, the defendant in his brief simply reargues the defense theory which was previously presented to and rejected by the jury. Upon careful review of the case, and viewing the evidence in the light most favorable to the government, there is sufficient evidence in the record to support the jury's verdicts of guilty. Therefore, defendant's Motion for Judgment of Acquittal, (docket # 97), is hereby DENIED.
III. MOTION FOR NEW TRIAL UNDER RULE 33
None of the issues raised by the defendant entitle the defendant to a new trial under Federal Rule of Criminal Procedure 33. Under Rule 33, the Court may grant a new trial "in the interest of justice," and this standard "requires the district court to balance the alleged errors against the record as a whole and evaluate the fairness of the trial." United States v. McBride, 862 F.2d 1316, 1319 (8th Cir. 1988). It is noted that the defendant does not allege newly discovered evidence, nor argue that a new trial should be granted on that basis. See generally United States v. Offutt, 736 F.2d 1199, 1202 (8th Cir. 1984) (setting out criteria for granting of new trial on basis of newly discovered evidence).
A. Improper Jury Instruction
Defendant does assert, in addition to insufficiency of the evidence as addressed above, that he is entitled to a new trial under Rule 33 because of improper jury instructions. Specifically, defendant suggests that the Court erred by (1) not instructing that "the test of materiality in a false return case is whether a particular item must be reported in order that the taxpayer estimate and compute his tax correctly," United States v. Warden, 545 F.2d 32, 37 (7th Cir. 1976), and (2) not instructing at all with respect to a defense of reliance on the advice of a tax preparer.
1. Test of Materiality
Defendant's prevaricated focus on the select quote from United States v. Warden, 545 F.2d 32, 37 (7th Cir. 1976), is unpersuasive. The Court instructed on the elements of the false income tax return offense under the guidance of the Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit, see Final Instruction # 30, and the Court is hesitant to attempt to improve on the standard instructions. Defendant here argues that the Court should have added, to the provided definition of materiality, the Warden language as noted above.
During trial, the Court concluded that this proposed amendment was superfluous and potentially misleading to the jury. The government was under no obligation to prove that the defendant owed an additional tax for the years in issue or that the government suffered a monetary loss as a result of the false return. Thus, the suggestion that correct estimation and computation of tax as the test for materiality is misleading in this context. See Manual of Model Criminal Jury Instructions for the District Courts of the Eighth Circuit § 6.26.7206. The Seventh Circuit itself has refined its definition of materiality in false return cases since Warden.See, e.g., United States v. Peters, 153 F.3d 445, 461 (7th Cir. 1998) ("A false statement is `material' when it has `the potential for hindering the IRS's efforts to monitor and verify the tax liability' of the . . . taxpayer." (internal citation omitted)). Other courts also define materiality differently than the language suggested by the defendant; and, as in the Seventh Circuit, the emphasis is on monitoring, evaluating, verifying and the like.See, e.g., United States v. Bok, 156 F.3d 157, 164-65 (2d Cir. 1998) (approving the instruction that "the test of materiality in this case is whether the information required to be reported on the tax return in question was necessary for the proper evaluation of the accuracy of the tax return"); see also United States v. Barrow, 118 F.3d 482, 493-94 (6th Cir. 1997) (providing "false statements are material if they make it more difficult for the IRS to verify defendant's tax returns").
The Court maintains that it is was correct in its conclusion that the suggested amendment to the materiality instruction was not required in this case. Certainly the failure to so instruct the jury does not require the Court grant a new trial under Rule 33.
2. Reliance on Advice of a Tax Preparer
"A defendant in a criminal case is entitled to an instruction that informs the jury of his theory of defense if it contains a correct statement of the applicable law, and if the evidence supports the proffered instruction." United States v. White, 671 F.2d 1126, 1131 (8th Cir. 1982) (citation omitted, emphasis added). Reliance on expert advice can be an exonerating defense in criminal tax cases, but the defendant must show he actually relied on expert advice and that his reliance was in good faith. United States v. Segal, 867 F.2d 1173, 1179 (8th Cir. 1989); see also United States v. Farber, 630 F.2d 569, 572 (8th Cir. 1980) (suggesting reliance defense not available in every case). Mere contact with a tax preparer does not necessarily indicate reliance on professional advice; to establish reliance as a defense, the defendant must show (1) he relied in good faith on expert advice, and (2) complete disclosure of all the relevant facts was made to the expert. United States v. Masat, 948 F.2d 923, 930 (5th Cir. 1991). Here, there is no evidence that the defendant disclosed all the facts regarding his financial transactions at issue here with his tax preparer, that the preparer reached an independent conclusion after being fully informed of the circumstances of those transactions, or that he relied in good faith on the preparer's advice. See id. (concluding district court did not abuse its discretion by not giving the reliance instruction); see also Chakales v. Commissioner of Internal Revenue, 79 F.3d 726, 730 (8th Cir. 1996) (citations omitted) (taxpayer must show preparer decided independently after full disclosure of transaction's circumstances).
Throughout the entire case, the defendant did not assert that he did not have income from grain sales. He testified that he structured the transactions as he did (calling the income machine hire, rather than income from grain sales) was because Tom Gowan did not have a commercial license to haul grain. The defendant asserted that he properly reported his total income, and argued that any misreporting was not "material" with regard to the false income tax return offense.
The Court will not presume that a dead man improperly advised the defendant to report income from grain sales as machine hire. Even assuming that the defendant made full disclosure to the preparer, and that the preparer did so advise, it can not be said that reliance in these circumstances would be in good faith when the reporting was not accurate or truthful, notwithstanding an apparent wash in the final tax obligation. The Court continues in its conclusion that the reliance instruction is not applicable in this case. Certainly failure to so instruct the jury does not require the Court grant a new trial under Rule 33.
3. Prosecutorial Misconduct
Finally, the defendant asserts that he is entitled to a new trial under Rule 33 because of prosecutorial misconduct in that Deputy U.S. Marshals, in full presence of the jury, served defendant with a civil complaint in the courtroom. The Court denied the ensuing defense motions to dismiss and for sanctions but did order the civil case sealed until the trial was completed.
"To obtain a new trial based on prosecutorial misconduct, a defendant must show not just that misconduct occurred, but that it `fatally infected' the trial." United States v. LaFuente, 54 F.3d 457, 462 (8th Cir. 1995) (citation omitted). The focus is not just on the alleged misconduct, but the effect on the fairness of the trial as a whole must be considered. Id.; see also United States v. Bussey, 942 F.2d 1241, 1253 (8th Cir. 1991) (defendant must show that the prosecutor's conduct was improper, and that such conduct prejudicially affected defendant's right to a fair trial).
It is of some interest here that the conduct complained of is not that of the prosecution, but that of the Deputy U.S. Marshals. The Court has no reason to attribute the actions of the Deputy U.S. Marshals to the prosecutors in this case as there has been no serious assertion that the timing of the service of process was somehow orchestrated or intended by the prosecutors. See e.g., United States v. Ford, 17 F.3d 1100, 1103 (8th Cir. 1994) (declining to attribute arresting officer's conduct to prosecutor). Even though the timing of the service of process may be suspect, it is "the fairness of the trial, not the culpability of the prosecutor" which is at issue. United States v. Thirion, 813 F.2d 146, 157 (8th Cir. 1987) (finding no prejudice where government had delivered target letter on the morning defendant testified where court considered whether or not the grand jury scrutiny would become public during trial). Here, even assuming the action of the Deputy U.S. Marshals as fairly attributable to the prosecutors, there is simply no indication that the defendant suffered any actual prejudice as a result of the conduct. Absent a showing of actual prejudice, the Court is not compelled to grant a new trial under Rule 33. Thus, defendant's alternative Motion for New Trial, (docket # 97), is hereby DENIED.
IV. SUMMARY
Defendant's Motion for Judgment of Acquittal, (docket # 97), is DENIED; and defendant's alternative Motion for New Trial, (docket # 97), is DENIED.
IT IS SO ORDERED.
RODNEY S. WEBB, CHIEF JUDGE UNITED STATES DISTRICT COURT