UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

TERRY A. MYR,

Defendant.

 /

Case No. 14-20633

Honorable Nancy G. Edmunds 

OPINION AND ORDER DENYING DEFENDANT'S 

MOTION FOR NEW TRIAL [35]

On April 29, 2015, following a jury trial that began on April 22, 2015, Defendant Terry

Myr (“Defendant”) was found guilty of tax evasion pursuant to 26 U.S.C. § 7201 (Count 1). 

In addition, Defendant was convicted of willful failure to file pursuant to 26 U.S.C. § 7203

for each year 2007 through 2010. (Counts 2 through 5 respectively).

Currently before the Court is Defendant's motion seeking a new trial under Federal

Rule of Criminal Procedure 33.1

 Specifically, Defendant argues that the Court should have

admitted at trial a civil complaint filed by the Department of Justice seeking a permanent

injunction against the business and individual who prepared a tax return that was evidence

in the trial. 

For the reasons stated more fully below and on the April 27, 2015 trial record, the

Court denies Defendant's motion.

1

Defendant cites Fed. R. Cr. P. 29 in his motion, yet the relief he seeks is a new

trial. (Def.'s Mot. New Trial 1, 5, 6.) 

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I. Background

 Defendant is a self-employed automotive mechanic who specializes in exotic foreign

cars. From approximately 1998 though 2001, Defendant filed individual tax returns. The

IRS audited his 2000 and 2001 returns. Defendant directed a certified public accountant

to prepare his 2002 and 2003 individual income tax returns, but did not file these returns. 

In November 2005, the IRS assessed Defendant approximately $195,163 in taxes, interest

and penalties for years 2000 through 2003. Defendant neither paid nor filed another federal

income tax return. In May 2007 the IRS issued a Notice of Federal Tax Lien against

Defendant's property. 

During 2009, Defendant negotiated to sell a rare 1954 Ferrari race car engine for

$610,000. Defendant established a corporation called On Track Group, Inc. The engine

purchaser wired the funds to On Track Group, Inc.'s bank account. The following year,

Defendant filed a 2009 tax return for On Track Group, Inc., which reported only $500,000

in gross receipts, falsely claimed expenses in the amount of $150,000 for employee

salaries, falsely claimed a "bad debt" in the amount of $330,174, and reported a loss in the

amount of $10,520. The tax preparer was Dr. Denise Miller with Uneek Business Solutions.

Although it was not a basis for a charge, this tax return was evidence at trial. Defendant

testified that he signed and filed the return without reading it. 

At trial, Defendant sought to introduce a Complaint for Permanent Injunction and

Other Relief dated March 31, 2015 (the "Pope Complaint"), filed by the Department of

Justice, seeking a permanent injunction against Denise Pope AKA Denise Miller, doing

business as Uneek Solutions, among other names, and others, to prevent them from

preparing false income tax returns. The Government objected to this evidence and the

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Court denied admission of the document. 

The following sidebar took place at trial when Defendant's attorney moved to admit

the Pope Complaint: 

Mr. Vert: My objection is this is just a allegation, it's not an injunction, and in

fact it has nothing to do with Mr. Myr's return. 

Mr. Becraft: Here's the original, Judge. 

Mr. Becraft: You read this complaint, this is filed March 31. You see the EZF

(sic) stuff at the top? This is the United States suing Uneek, this company,

that he did.

The Court: Yeah. 

Mr. Becraft: And the lady that prepared the returns. And, you know, while it's

true this is a complaint, it manifests the position of the United States that you

sit down, you can read through this. 

The Court: I've seen it. Over this – is this over anything related to this

corporate return? 

Mr. Vert: Not related to Mr. Myr as far as I can tell from the complaint.

Mr. Becraft: They may be. This is what the complaint says, that the IRS is

conducting a investigation. They go back to 2008, 2009, 2010, they've been

investigating these people who have been making a whole bunch of false

returns for a whole bunch of people, and– 

The Court: Unless it's specific to this return, I'm going to accept –

Mr. Becraft: Okay. 

The Court: No, sorry, I don't think it's relevant to the defense. 

Mr. Becraft: Okay. 

The Court: I mean, he's testified how he came to her and what he thought. If

this were related to his return, the On Track return I would admit it, but since

it's not. 

Mr. Becraft: Okay, all right. 

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The Court: I won't. 

Mr. Becraft: Fair enough. 

(End of discussion at side bar.) 

The Court: I've sustained the objection to this exhibit. 

(Transcript p. 117-18.) 

The Pope Complaint contains specific allegations that Pope (AKA Denise Miller) and

co-defendant Jones falsely claimed and/or falsely reported such items as expenses,

mortgage interest, and charitable contributions.2 (Def.'s Ex. 24, Complaint for Permanent

Injunction and Other Relief, ¶ 17.) The Pope Complaint identified a sampling of individuals,

by initials only, for whom tax returns were prepared. For those individuals identified in the

Pope Complaint, the allegations also contain assertions that the taxpayer(s) was not the

source of the false information. For example, 

Pope and Jones falsely reported that the Bs made $6,000 in cash charitable

contributions in both 2010 and 2011, and $5,035 in non-cash charitable

contributions in 2010, and $5,000 in non-cash charitable contributions in

2011. In fact, the Bs did not make charitable contributions in those amounts,

and they did not tell Pope or Jones that they had done so. 

 

(Def.'s Ex. 24, Compl. ¶ 18; see also ¶ 20, "N.T. did not tell Pope to report those amounts,

nor did N.T. furnish or offer to furnish receipts or information supporting those amounts.")

Defendant now argues that there are obvious "similarities between what the United

2

 The complaint alleges that the IRS examined 87 individual income tax returns

and "[o]f these 87 returns, 85 were found to have false claims, and the total tax

deficiency for these returns was $461,463.63." (Def.'s Ex. 24, Compl. ¶ 15.) "The IRS

examinations revealed that the individual income tax returns that Pope and Jones

prepare frequently claim fabricated or inflated Schedule A deductions, fabricated

Schedule C income and expenses, and other fabricated deductions and credits, such as

the Earned Income Tax Credit and the American Opportunity Tax Credit." (Def.'s Ex. 24,

Compl. ¶ 16.) 

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States complains about in that lawsuit and the 2009 tax return of On Track . . . ." (Def.'s

Mot. For New Trial 3.) Defendant argues that "[r]easonable people, including jurors, could

easily conclude from reading this complaint that "Dr. Miller" had prepared a false tax return

for [Defendant] and that she had duped [Defendant]." (Def.'s Mot. For New Trial 3.) 

II. Rule 33 Motion for a New Trial

A. Standard of Review

Defendant argues that he is entitled to a new trial pursuant to Rule 29 of the Federal

Rules of Criminal Procedure. However, a motion for new trial is governed by Rule 33 of the

Federal Rules of Criminal Procedure. Rule 33 provides that “[u]pon the defendant's motion,

the court may vacate any judgment and grant a new trial if the interest of justice so

requires.” Fed. R. Crim. P. 33(a). “The rule does not define interest of justice and the courts

have had little success in trying to generalize its meaning.” United States v. Munoz, 605

F.3d 359, 373 (6th Cir. 2010) (internal quotation marks and citation omitted). It is, however,

“widely agreed that Rule 33's ‘interest of justice’ standard allows the grant of a new trial

where substantial legal error has occurred.” Id. This would include “reversible error or

violation of the defendant's substantial rights.” Id. at 374.

B. Analysis 

1. Statement By A Party Opponent

Defendant argues that the denial of the admission of the Pope Complaint as an exhibit

hampered his defense. He argues that the "allegations made by the United States in the

. . . complaint, initiated via the U.S. Attorney for this district, constitute statements made by

a party opponent via Fed. R. Evid. 801(d)(2)(A)." (Def.'s Mot. For New Trial 4.) The

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Government does not argue the Pope Complaint's admissibility pursuant to Fed. R. Evid.

801(d)(2)(A). Instead, the Government argues both that the evidence is not admissible

under Rule 404(a)(1) and that it is not relevant. As an initial matter, Defendant's attorney's

proffer to the Court was adequate to inform the Court of the contents of the document and

the alleged relevance to the defense. Defendant preserved his objection to the exclusion. 

Federal Rule of Evidence 801(d)(2)(A) provides that: "(d) A statement that meets the

following conditions is not hearsay: . . . (2) An Opposing Party's Statement. The statement

is offered against an opposing party and: (A) was made by the party in an individual or

representative capacity; . . . . " "It is the general rule that 'statements made by an attorney

concerning a matter within his employment may be admissible against the party retaining

the attorney.'" Williams v. Union Carbide Corp., 790 F.2d 552, 555-56 (6th Cir. 1986) (citing

United States v. Margiotta, 662 F.2d 131, 142 (2d Cir. 1981)) (The trial court "prohibited the

defendant from using the allegations made in plaintiff's complaint in the first lawsuit as past

inconsistent statements." The Sixth Circuit noted that the "statements made in the previous

lawsuit were proper for impeachment under Federal Rule of Evidence 613. As party

admissions, the allegations would also be available as substantive evidence under Federal

Rule of Evidence 801(d)(2)."). Defendant provided a list of case citations that generally

apply this principal to the federal government as a party opponent. 

"The Justice Department's various offices ordinarily should be treated as an entity,

the left hand of which is presumed to know what the right hand is doing." U.S. v. Kattar, 840

F.2d 118, 127 (1st Cir. 1988) (where appellant argued "that he should have been permitted

to introduce into evidence the government's statements" in a memo and brief in other

cases. Id. at 130.). 

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While Defendant cited cases from several circuits, he provided no Sixth Circuit law on

the issue with respect to the federal government being deemed a party opponent in a

criminal case and whether or not the prosecutors' statements should be held as party

admissions. As one state court of appeals noted, in specifically considering the

"admissibility of prosecutors' statements in related cases as admissions of a party

opponent, . . . . [i]t is an area of law that has been significantly fractured and historically

such statements were rarely admissible . . . ", yet also pointed out that "relatively recently

several federal courts have endorsed generally the use of inconsistent prosecutorial

statements in concluding they are not per se inadmissible." State v. Pearce, 2007 WL

1544152, at *11 (Ct. App. Id. May 30, 2007) (giving several examples of cases from the

Second and Seventh Circuits where the court admitted such statements as an admission

of a party opponent and where the court refused to admit such statements on that basis). 

 The Pope Complaint is a pleading filed in court "by a federal prosecutor who spoke

for the same Justice Department that was prosecuting" Defendant. See generally Freeland

v. U.S., 631 A.2d 1186, 1193 (D.C. Ct. Apps. Sept. 10, 1993). The statements made in the

Pope Complaint are an opposing party's statements and are not hearsay. 

2. Relevance

However, just because something is not hearsay does not mean that it is automatically

admissible. Although Defendant provides minimal analysis, the core of his argument is that

reasonable people, including jurors, "could conclude from reading this complaint that 'Dr.

Miller' had prepared a false tax return for [Defendant] and that she had duped [Defendant]."

(Def.'s Mot. For New Trial 3.) Defendant does not cite specific statements from the Pope

Complaint that show a contradictory position or statement made by the Government, nor

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statements that support a defense that he was "duped." The Government characterizes

Defendant's argument as follows: "that since the Department of Justice has alleged that

Ms. Pope has prepared other false returns that she is likely to have also knowingly falsified

On Track Group's return." (Gov't's Resp. 4.)

The Government argues that the civil complaint against Pope was properly excluded

because it was not relevant to an issue at trial. Fed. R. Evid. 401 provides that "Evidence

is relevant if: (a) it has any tendency to make a fact more or less probable than it would be

without the evidence; and (b) the fact is of consequence in determining the action." Fed.

R. Evid. 401. 

The court may properly condition the admission of evidence upon a showing of its

relevance. See U.S. v. Beavers, 756 F.3d 1044, 1052 (7th Cir. 2014). In U.S. v. Beavers,

the defendant was convicted of several counts of tax fraud. See Beavers, 756 F.3d at 1048.

Several of the defendant's tax returns "exhibited various inaccuracies" and the parties

disagreed "as to whether these inaccuracies were honest mistakes or deliberate

misrepresentations." Id. at 1048. One of the defendant's arguments on appeal was that "the

district court erred by excluding evidence of his conduct after federal agents approached

him– namely his amended tax returns and payments to reimburse his campaign

committees." Id. at 1049. At trial, the government moved in limine to exclude the evidence

arguing that it was not probative of the defendant's "state of mind at the time he filed the

original returns and that the jury would be confused by the admission of evidence of

remedial actions." Id. at 1049-50. The defendant argued that the "evidence was probative

of his good faith and lack of intent to file fraudulent returns in the first place." Id. at 1050. 

"[T]he district court conditioned the admission of evidence of [the defendant's]

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corrective actions upon a showing that these actions had a connection to [the defendant's]

state of mind at the time he filed his incorrect returns. The logic of the ruling was that, in the

absence of a foundation establishing this link, the amended tax returns (and evidence of

other remedial actions) did not make it more likely that [the defendant] believed his original

returns were accurate when he filed them." Id. at 1050. The appeals court found that "the

district court's sensible approach to the remedial evidence was within its discretion." Id. at

1051. "[T]he district court did not exclude the evidence entirely– it simply conditioned the

evidence's admission on some kind of showing of its relevance to [the defendant's] state

of mind at the time he filed his original returns several years earlier." Id. at 1050. Although

unlike the case at bar in that Beavers involved subsequent remedial action, it is worth

noting that the Beavers' court also pointed out that the actions for which the defendant

sought to admit evidence were not probative because they were "equally consistent" with

different states of mind: "(1) promptly correcting a genuine mistake and (2) trying to cover

up a purposeful lie in the hope of avoiding prosecution." Id. at 1050.

Defendant argues that "[a]t trial, the prosecution used this tax return signed by Myr

[Defendant] as substantive proof that Myr engaged in tax evasion even though Myr

asserted that he had been duped by 'Dr. Miller' and Uneek Business Solutions." (Def.'s Mot.

For New Trial 2-3.) He argues that he offered the Pope Complaint "[t]o buttress his

contention that he was innocent regarding the obviously false 2009 tax return for On Track,

. . . ." (Def.'s Mot. For New Trial 3.)

 As the Court pointed out during the original motion, there is no evidence that

Defendant's On Track Group, Inc.'s tax return was one of those mentioned in the Pope

Complaint. Defendant cites no statements from the complaint that evidence a contrary

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position taken by the Government with respect to the Defendant and tax years at issue.

There is simply no evidence or statement in the Pope Complaint that makes facts in this

case more or less probable to the issue of whether Defendant engaged in tax evasion and

willfully failed to file his own taxes for years 2007, 2008, 2009 and 2010. 

Evidence that the Government takes a position that Uneek and Pope filed false tax

returns for multiple individuals, including several individuals identified in the complaint as

not having provided false information, does not provide a link to Defendant's state of mind.

It does not make any particular scenario, for example, that Defendant was "duped", more

or less probable than another, for example, that Defendant purposefully found his way to

a tax preparer miles away from his hometown, who could essentially make his tax liabilities

disappear on paper.3 The evidence does not meet the relevancy requirement of Fed. R.

Evid. 401. Like Beavers, the Court asked the parties to identify the relevance of the

evidence. During trial the Court asked whether there was "anything related to this corporate

return" in the Pope Complaint, and the question was posed again during the post-trial

hearing on the instant motion. Neither party was able to identify anything related to

Defendant, the On Track Group, Inc., or its tax return in the Pope Complaint. (Trial Tr. 117-

18.) 

3

 Defendant testified at trial that he did not review the On Track Group, Inc.'s

return before signing and filing it. The jury instructions included a deliberate ignorance

instruction, therefore, the jury was allowed to consider all of the evidence, including

Defendant's testimony, in the context of such an instruction. 

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3. Character Evidence Under Fed. R. Evid. 404 

In addition to relevance, the Government argues that Fed. R. Evid. 404(a) restricts

such character evidence (about Pope AKA Miller) as that which Defendant seeks to admit.

Rule 404(a)(1) provides that (1) "Evidence of a person's character or character trait is not

admissible to prove that on a particular occasion the person acted in accordance with the

character or trait." The Government correctly points out that Pope is not a witness,

defendant, nor victim of a crime in this trial. The Government argues that Rule 404(a)(1)

applies, yet Rule 404(b)(1) focuses on acts, as in the Pope Complaint, providing that

"[e]vidence of a crime, wrong or other act is not admissible to prove a person's character

in order to show that on a particular occasion the person acted in accordance with the

character." 

In U.S. v. Wright, a district court considered the admission of character evidence

related to a non-party. See U.S. v. Wright, 206 F. Supp. 2d 609 (D. Del. 2002). In Wright,

the defendant church minister was convicted on 19 counts alleging a scheme by which the

defendant and a State Representative conspired to steal project funds: the Representative

would allocate funds to qualifying projects in his district, the defendant minister drew that

money from the church's account and then deposited half in his own personal account and

half into the Representative's personal account. Id. at 611. The defendant argued that

evidence of the Representative's "character and reputation for honesty and integrity was

relevant and central to his defense in that '[e]vidence of [the Representative's] reputation

in the community is circumstantial evidence from which a juror may rely on to [conclude]

that [the Representative] would not have taken a bribe, if offered." Id. at 614. The court

cited Fed. R. Evid. 404(a), pointing out that because the Representative "was not the

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accused, an alleged victim, or a witness, evidence of his character, offered to show that he

acted in conformity therewith, is not admissible evidence. Moreover, as it is the acts of the

defendant . . . that were at issue in the case, an extended side-trip into the character of the

now-deceased Representative . . . would have been an irrelevant distraction." Id. at 614. 

Defendant argues that the Government used the 2009 On Track Group, Inc., tax

return to demonstrate that Defendant did not act in good faith and wilfully violated the tax

laws, yet his defense was that he acted in good faith. Defendant argues that necessary to

"rebut the obvious inferences arising from the filing of this blatantly false return, [Defendant]

needed to show the jury that the very U.S. Attorney who was prosecuting him had alleged

that the party who prepared his tax return, 'Dr. Miller', believed (sic) that 'Dr. Miller' had

prepared a huge number of false returns for other parties." (Def.'s Mot. For New Trial 6.)

As set forth above, missing from Defendant's argument is any explanation or citation to

relevant statements in the Pope Complaint related to Defendant or On Track Group, Inc.

Further, Pope is not a victim, witness or party in this action.

Finally, Defendant argued at the hearing that the excluded Pope Complaint is made

all the more relevant because he had little evidence in his defense. That argument does

not change the analysis above. Defendant's signing and filing of the On Track Group, Inc.'s

return was but one piece of evidence against Defendant to establish his intent, lack of

mistake and willfulness. Examples of other evidence include the timing of the establishment

of the corporation On Track Group, Inc. and the opening of a separate bank account in

relation to the selling of the Ferrari engine, the removal of money from that account in

smaller increments, and the purchase of gold coins with approximately half of that money,

which, at the time of trial, remained hidden from the IRS. 

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IV. Conclusion

For the above-stated reasons, Defendant’s motion for new trial is DENIED.

SO ORDERED.

s/Nancy G. Edmunds 

Nancy G. Edmunds

United States District Judge

Dated: August 26, 2015

I hereby certify that a copy of the foregoing document was served upon counsel of record

on August 26, 2015, by electronic and/or ordinary mail.

s/Carol J. Bethel 

Case Manager

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