is all too often happens in federal criminal procedure federal criminal cases a case that is extraordinarily factually complex and relatively legally complex discovery was tens of thousands of issues and present in peril way the wheat from the chaff so to speak and force the litigants present to the jury what issues were truly in dispute as a result of that consistent ruling and  systematic procedure by judge ludington the parties were forced to do things for example like file trial memorandum file theory of the case file a proposed jury instructions that in tempted to narrow the issues that were going to be presented to the jury in doing that the government clearly adopted a position that started with the indictment and went through the not just the charge acts and the overt acts of the conspiracy but continued on into those documents the theory of the case the the trial memorandum the proposed jury instructions that clearly said some of these defendants at issue were going to be there under reporting of personal taxes bradley were not the the idea that it towards the end of trial and quite honestly the eve of the end a trial with the government's last witness in its case of chief the government presented a revenue agent from the i r s who testified as to calculations he made for both revenue and expenses from that from a document he created as well as a ten forty he created is february twenty seventh page fifty two of that date question by me have you prepared an amended return for mr bradley his answer was i would not call an amended return i would call it more of a trial exhibit that led to the objection by the defense as to both well if it was a trial exhibit why wasn't provided in rule sixteen discovery it was prepared a week or two before trial it was not  and there was also continuous argument or excuse me extensive argument on the issue of whether or not this constituted a change in the indictment and whether mr bradley had received adequate notice that this was  charge at which he had to defend himself to get there with an objection so with there i mean i'm hearing that the document was first of all in accurate it attributed to the bradleys conduct that was not basically charged in the had your honor is one hundred percent correct as to what happened now having been the lawyer trying the case i can tell you that you know he was reading from it it was clearly a ten forty i mean when you read the record i make that objection i put that on the record  judge even says with these are his notes and i said well your honor with all due respect to his notes in the form of a ten forty i it's the jury wasn't stupid the jury saw what he was doing everyone saw what he was doing and in the problem is that when when this change and i would absolutely argue with that it was a change as to issue one in our brief when this change happened in the defense attempted to cross examine revenue agent on this issue in this there was some talk about this defense proposed exhibit number four which was simply a series of eighteen checks taken from a government exhibit that had already been admitted to the jury which was my client's bank records there was eighteen checks as a related to one vendor let's just call it vendor a b c vendor a b c was had eighteen checks written to it that totaled almost two hundred thousand dollars while this revenue agent had a credit credited approximately one hundred seventy seven thousand dollars in expenses to that so given this what i would consider to be relatively trial by surprise situation the defense attempted to cross examine the revenue agent by saying look here is what you say now are the bradleys revenue and expenses and therefore the under reported income will you attributed  brief did not allow their cross examination ruling that it was it suffered from foundational and authentication issues big basically saying and for that to come in that mr bradley would have had to have testified so again  this is the exact reason why what happened in this case is the exact reason why our criminal procedure is struct struct it is structured excuse me in such a way as to prevent this kind of thing from happening that's why we have these indictments that's why you are  my argument to judge brad judge ludington where i said that there is a legal maximum the latin one the x the mentioning of one or two x is by definition exclusion of the rest and i couldn't think of it and i looked it up last night actually found it in the latin and i would try to pronounce it but i can't even pronounce the latin to your honor's but the point being is that there were three to excuse me two co defendants that whose underreporting of personal income was specifically charged in alleged in the indictment both both both as a as an act as a charged and not charged as a charge act as well as an overt act of the conspiracy gail ingersoll and stephen ingersoll were charged with having one of their over of participation and conspiracy was under reporting two thousand and eleven ten forty personal income but the government doesn't have to charge every item or list every overt act clearly clearly however i would answer your honor respectfully by saying this when i started my argument i pointed out this is the problem when you have an extraordinarily factually legally complex case where the judge attempts to narrow the issues and by narrowing the issues you get the parties focused on what they say the disputes of the dispute the dispute is really about and i would argue that the the idea of the due process right mr bradley has to adequate notice is is then affected by saying ok we are going to force the government to file an extensive bill of particulars that the that because the original trial date to be joined by several months because it was so detailed and then file a a theory of brief and then file a proposed jury instruction where they consistently say mr bradley participated in this conspiracy by way of paying workers cash by not filing wus by not filing to ninety nine and by engaging in a series of what the government like to refer to as shell game financial transactions but never say he participated by way of underreporting income then the government five calls an expert witness who then o starts testifying as to the and the in the in i am your honour's her answer may be the same as just letting tis which is all the information necessary to have seen what judge and sees me what the witness was doing was available in discovery but again that goes back to certain of that were both provide what were at least even eager souls lawyers were provided a summary of the document that that revenue agent used to summarize the underreporting of under rule sixteen of the under reporting of of income tax by by stephen ingersoll so that the same document that do it revenue agent used to testify about stephen imbeciles under reporting of income  tax was provided to mr ingersoll's lawyer doctoring herself lawyers by way of rule sixteen discovery you did but i think it was not done there was the document relating to mr bradley the identical document to pervade prepared by guess it makes sense to your honor i again not not if not from what the government had filed in the indictment in the bill of particulars in the theory of the case the proposed jury instructions in the trial brief i just the idea that mr bradley under reported his own personal income and that was going to be subject to expert testimony and and a report slash notes depending on how you want to characterize it were used the witnesses own words a trial exhibit that had been prepared that had been provided for one defendant but not to the other defendant i i disagree with your honor that that's proper thank red lights and thank you very much afternoon may it please the court my name is sheldon lite i'm appearing on behalf of the united states in this matter first thing i want to do is to respond specifically to counsel's claim that he received no notice and did not receive a copy of the document that revenue agent was news crew used in the course of his examination on this record he did receive it what he received on the friday before the revenue agent's testimony or at the latest on the monday before the revenue agent's testimony by email following up on the letter that was mailed on friday was a letter transmitting the very document that michael was news used in the course of his examination and that is in the record as part of document one ninety nine dash five on page id twenty three twenty two and the following page numbers he received only if you say it's a letter transmitting the document and then what day was the testimony on the testimony was on been sent by mail the previous friday because there was concern i suppose that the letter might not have reached him it was followed up by an e mail on monday morning the revenue agent  following day tuesday now and this is just one aspect of how it is that there was notice of the likelihood and the possibility that the revenue agent would testify with regard to provided as to mr was new ski that included the language during the trial in this matter michael was new screen will testify regarding the tax returns filed by the defendants in relationship to the evidence presented during the government's case in chief he will explain the federal income tax consequences for each defendant based on that evidence he will also explain the impact of various deductions credits etc this was part of the information provided prior to trial to the defendants in this case including mr bradley but i don't whether that that the indictment had overt acts for other co defendants that involve their personal taxes but not these to be mr bradley is that correct that's correct that's absolutely true or so but the u s his position is that you don't need to list all over x in the indictment is that right absolutely our position is that you don't have to list all of the overt acts or all of the all of the events that are going to be proved as elements or aspects of the conspiracy and there is ample case law to support that proposition i filing of an individual's own income tax return part of the conspiracy that was alleged i believe it was the conspiracy that was alleged was a broad conspiracy defraud the united states the exact language of the indictment charged a conspiracy to defraud the united states and the internal revenue service and the department of the treasury by impeding in obstructing the functions of the i and evading payment of taxes so that encompasses those kinds of behaviors those kinds of events with regard to each of the three defendants charged  have to back up a little and look at the the basis of the claim being made on appeal which is that there was a constructive amendment because of this evidence was introduced or that there was a prejudicial variance because this evidence was introduced for there to be a constructive amendment there would actually have to be also a jury instruction that was contrary to the very charge in count two and i the court looks to the jury instructions given by judgment ludington the court will find that they were strictly limited to a conspiracy to defraud the united states the internal revenue service and the department of treasury in the language of the superseding indictment so we get to the question of whether there was a variance and whether it was a prejudicial variance and there is case law out there plenty of case law that indicates that the government is not limited to the overt acts in a conspiracy indictment and that as long as the the defendant is not misled and not prejudiced by the evidence this introduced it is not a prejudice prejudicial variance in the case i would do you thing that if if we find that there was a period that that really does not affect the government's position you don't lose if we find that it was a varian that's correct because it if you believe that there is a variance and i submit there is no variance this evidence is absolutely within the scope of the conspiracy that was charge but if the court were to believe that there were a variance then the court move on to an analysis of the degree of the prejudice to the defendant to misleading the defendant and whether that prejudice is sufficient to make this essential to an unfair trial proceeding and i'd submit there was variance and even if there was the defendant had ample in for the ample notice that this evidence was going to come in i've already talked about a couple of aspects of the notice but i'd also point to the fact that earlier in the trial a witness named sondra harrington testified she was the agent or block tax preparer who prefer paired returns for the bradleys for two thousand  two thousand and ten and two thousand and eleven and in her testimony she covered in detail the varying numbers that were being provided to her by roy bradley and his wife tammy bradley regarding receipts of bradley's business thunder builders that would go into that tax return and a change from three hundred thousand dollars to nine hundred thousand dollars to one point four million dollars and there were tax tax returns based prepared based on each of these numbers and ultimately there there was a tax return filed in april of two thousand and twelve with one of these numbers and then there was an amended tax return prepare filed later in september or october of two thousand and twelve with an even higher number one point four million dollars or two point four million dollars as grows in of funder builders and that was the document th the revenue agent started from him saying even that document understated the income and the tax to an owing from the bradleys so one tied into this is the alternative argument that your opponent makes that the lesser included offense instruction should have been given for this personal income tax problem why is that not a good argument for them to be making actually the argument that he is making is that the lesser included offense of a conspiracy different to do fraud the united states would be a misdemeanor violation of the failure to file returns regarding  tax withholding relating to mr bradley's employees and the analysis of that is to is to look to the elements of the offense that was charged and the elements of the offense that the defense seeks a lesser included offense instruction for the elements of a conspiracy to defraud are that there was a conspiracy of two or more persons that the defendant jointed  that the purpose of the conspiracy was to defraud the united states in the way specified in the indictment in no way is a simple failure to file a nine forty or nine forty one quarterly return regarding withholding from employees a lesser included offense of that is it because of the difference between conspiracy and the substantive fact is that the reason that's one reason but i thought it one point his argument has morphed into the lesser included offense would be conspiracy to fail to pay federal income taxes fees of these techniques and there he is looking to the second paragraph of eighteen u s c three seventy one which describes a lesser conspiracy a misdemeanor conspiracy if it's a conspiracy to commit a substantive offense that is itself a misdemeanor but the charge in this case was under the first paragraph and it was not a charge of a conspiracy to vote violate a specific substantive statute it was the conspiracy defraud aspect of three seventy one so this was not a conspiracy to violate any provision of title twenty six for example or title eighteen it was the broad conspiracy to defraud  isn't it the taxes or is it via other mechanisms it includes both the what so the basic conspiracy charge that was in the indictment that he was convicted that is conspiracy t deceive the government for lack of a better term isn't it via tax matters or is it broader than taxes or some other substantive area that's why here here it was a conspiracy to defraud the united states the internal revenue service and the department of treasury and the focus was on the tax consequences of the transactions that were taking place or the effect that those transactions had in concealing information that would be necessary to do a proper evaluation of the tax status of each of these defendants but in addition to defraud by evading the payment of taxes which would happen through the filing of false  income tax returns and the evasion of taxes but that's ten forty income tax returns with regard to the income of the individuals it would also include the failure to pay withholding taxes on the employee i'm still a little confused i'm sorry about why it isn't a lesser included offense to hypothetically conspire to  under report income to fail to file w tuesday failed to do the right thing b z your employer's employee because the last i again let's go back to the black letter law with regard to lesser in offenses and that's in the case of schmucks vs the united states the supreme court case that says is a categorical approach essentially you look at the elements of the broader offense and you look at the elements of the claim lesser included offense and see if those elements are are totally subsumed within the elements of the broader of feds and there is really no connection between the elements you don't look really to the facts you look to the elements of the over under seventy two o three or seventy two and four does not require fraud it simply requires an obligation to file a return a failure to file the return and sometimes it can be under certain facts something that they have in common but it's not an element of both and you in fact were thinking that they were incoming because you were introducing evidence o principally directed toward showing that this series of transactions was done in such a way as to conceal what was actually happening in terms of the business activities that underlie all of this and we haven't talked about those business activities at all but essentially it related to the disposition of the proceeds of a construction loan that was given to  mr ingersoll to to finance the conversion of a church in bay city to turn it into a charter school but between ingersoll his brother  bradley there were a variety of things that were done to conceal the movement of money to move that money through what judge ludington called a ring around the rosie between numerous  numerous business entities to make it difficult or impossible to decipher what was happening if the i r s ever came to look and figure out the tax consequences to these three individuals thank you i know mr lay to i take his responsibility as an officer of the court very seriously so i will assume that what he argued initially was a result of a mistaken having not been at the trial but rather based on the information provided to him by government counsel at trial agent was new ski testified on friday feb twenty seventh before even the government claims they attempted to provide defense counsel notice the counsel did claim the following tuesday for some reason that i don't remember it may have been a federal holiday it may have just been the court had something else to do we were not session on monday when we reconvened on tuesday the government certainly claimed that they mailed in e mail that information to me if your honour's look starting at page fifty three of tuesday march third two thousand and fifteen testimony you can clearly stated you consider clearly see at the bottom of page fifty three where i state this was never mailed on friday or e mailed to me on monday this is and then i want to page fifty four of the court as this is not a document that has been off but then we discuss it whether it's been offered as  evidence and then on page fifty five and the balance of that there is clear discussion about where i said several times here is my laptop i never received the email here's the disc that you sent me what you claim is on there is not on there so again this is the agent and even if it was mailed friday night the agent had testified on direct already even if it was emailed on monday the agent had testified on direct the previous the previous friday and the record is clear again starting on page fifty two of the test my cross examination of agent was new ski on march the third that i had not seen that document before so you're saying that at the time the agent finished testifying on direct  that you had not been given nor were you given the time these documents about which you'd have to even the government's argument at trial was they had not provided it to me until mail friday night after the after the agent had testified very adequately recites the standard your honors are to decide that issue under i think his own argument supports the argument made by the defendant which is and i think judge moore your question was spot on well what does one of them  when mr light answered well there's there's an issue with one doesn't provide fraudulent behavior that one doesn't have the element of fraud well that's the whole point of the request for the lesser included if the government has proven every element except fraud the jury is supposed to be able to conclude that they've proven the lesser but not the added fraud element which would provide provide the basis for the conviction of the indicted offense which is exactly why that lesser should have been provided at trial but your honors in closing i simply want to say that much was made in the government brief which was not written by mr lay about whether or not some of these issues were preserved i will acknowledge that the rebuttal issue on closing may not have been preserved but every other issue was the basis of what was ahead was the significant objections both verbally a trial as well as by way of written pleadings federal rule of criminal procedure to i mean what did you preserve the opening  argument mr sas objected at the end of the government's opening as to in the government tries to argue that saying we start with a clean slate with the scales imagine the scales of justice balanced i mean that's the that's like the blue black letter law definition of preponderance of evidence mr sas objected to it and again your honor we had seven defendants we had acted in concert the entire time that the judge  presence of the jury as if the jury was right there and we were all talking in front of the product but the record is going through even at that bar you can and opposing objection can you know all i can say judges is that that is not the way the trial was conducted judge alito was not going to let six or seven lawyers say i join the objection i join the objection i join the objection and that didn't happen throughout the trial one i believe one other codefendant attempted to join mr sasser subject an objection and the judge allowed her to speak for very shortly then cut her off and move the conversation forward so no i did not object to that on my own but it was objected to by my co counsel and even the federal rules of criminal procedure rule two i mean if you were supposed to interpret these to provide for a fair determination of every criminal proceeding to secure simplicity and procedure and fairness and administration and to eliminate unjustifiable expense and delay and i would suggest that eight lawyers getting up and saying in addition to what that person just said i need to add this violates even the promise of the rules they have that that sort of set aside that kind of overreliance on from ellie found in the common law thank you thank you thank you both for your argument for sitara i see that you were been appointed pursuant to the criminal justice act and we thank you for your service to your client and we appreciate your arguments on both sides we will take the case under advisement and with a clear call the next case please