BILLY J. WILLIAMS, OSB #901366

United States Attorney

District of Oregon

STUART A. WEXLER

Trial Attorney, Tax Division

Stuart.A.Wexler@usdoj.gov

RYAN R. RAYBOULD

Trial Attorney, Tax Division

Ryan.R.Raybould@usdoj.gov

1000 SW Third Ave, Suite 600

Portland, OR 97204-2902

Telephone: (503) 727-1000

Facsimile: (503) 727-1117

Attorneys for United States of America

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

PORTLAND DIVISION

UNITED STATES OF AMERICA, Case No. 3:15-CR-00438-JO

v. GOVERNMENT’S MOTION FOR

ORDER AUTHORIZING DISCLOSURE

PURSUANT TO 26 U.S.C. § 6103 and

WINSTON SHROUT, FED.R.CRIM.P., and PROTECTIVE

ORDER PERTAINING TO DISCOVERY

Defendant.

The United States of America, by and through Billy J. Williams, United States 

Attorney for the District of Oregon, and Stuart A. Wexler and Ryan R. Raybould, Trial 

Attorneys, Tax Division, hereby moves this Court for an order authorizing the disclosure 

of taxpayer returns and return information pursuant to 26 U.S.C. § 6103; the disclosure of 

transcripts of testimony of witnesses and documents obtained by federal grand jury 

subpoenas in the District of Oregon pursuant to Fed. R. Crim. P. 6(e)(3)(E)(i); and 

preventing the dissemination or misuse of discovery material containing sensitive 

information pursuant to Rule 16(d)(1) of the Federal Rules of Criminal Procedure.

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I. BACKGROUND

The defendant in this case has been charged with six counts of willful failure to 

file a tax return, in violation of 26 U.S.C. § 7203; he is proceeding pro se with the 

assistance of standby counsel. The grand jury alleges that the defendant received gross 

taxable income from payments for services as a presenter at seminars, consultation fees, 

and licensing fees associated with the sale of products, as well as regular pension 

payments. As a tax case against the defendant, the government’s evidence necessarily 

contains taxpayer information associated with the defendant. The government’s evidence 

also includes, however, taxpayer information related to entities and/or individuals who 

may have paid the defendant. The disclosure of taxpayer information is broadly 

protected under 26 U.S.C. § 6103, although there are exceptions authorizing disclosure. 

Additionally, the government’s evidence in this case includes documents and testimony 

obtained by grand jury subpoenas and otherwise. Disclosure of this information is also 

broadly protected, under Fed.R.Crim.P. 6(e), although there are exceptions authorizing 

disclosure. Finally, in addition to sensitive taxpayer information, the government’s 

evidence includes sensitive information concerning the identity of government employees 

and third party bank account information.

II. DISCUSSION

A. Order Authorizing Disclosure of Taxpayer Returns and Return Information

“Section 6103 of the Internal Revenue Code prohibits disclosure of returns and 

return information except as permitted therein.” Beresford v. United States, 123 F.R.D. 

232, 232 (E.D. Mich. 1988). Paragraph (h)(4) of § 6103 “allows for disclosure of tax 

return information in judicial proceedings and administrative tax proceedings.” United 

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States v. Prokop, 2012 WL 2375001, at *5 (D. Nev. June 22, 2012) (unpublished). 

Specifically, that paragraph authorizes disclosure of a return or return information “to the 

extent required by order of a court pursuant to . . . rule 16 of the Federal Rules of 

Criminal Procedure,” while directing the Court “to give due consideration to 

congressional policy favoring the confidentiality of returns and return information as set 

forth in [the Internal Revenue Code].” 26 U.S.C. § 6103(h)(4)(D).

For at least two reasons, the “congressional policy favoring the confidentiality of 

returns and return information,” id., is of limited force in relation to defendant’s review 

of the tax returns and return information at issue in this case. First, the majority of the 

personal identifying information from tax records contained in the government’s 

discovery pertains directly to the defendant. Second, the taxpayer information related to 

third parties has likely already been disclosed to the defendant through the issuance of 

IRS Forms 1099 and similar tax forms. The government’s disclosure of the tax returns 

and related return information would thus be wholly consistent with the policies 

underlying 26 U.S.C. § 6103. This Court should thus authorize the United States to 

produce complete and unredacted copies of the relevant tax documents to the defendant

pursuant to 26 U.S.C. § 6103(h)(4)(C). 

B. Order Authorizing Disclosure of Fed.R.Crim.P. 6(e) Information

In addition to tax returns and taxpayer information, the government also seeks to 

disclose to the defendant documents and testimony obtained by grand jury subpoenas and 

otherwise. Rule 6(e)(3)(E)(i) permits the Court to order disclosure “preliminary to or in 

connection with a judicial proceeding.” To obtain disclosure, the government must show 

that the grand jury was used in good faith and that the disclosure is rationally related to 

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the subject matter of the contemplated judicial proceeding. In Re Grand Jury, 583 F.2d 

128, 131 (5th Cir. 1978). In addition, the government must show a “particularized need” 

for the disclosure, namely that the disclosure is necessary to avoid possible injustice, that 

the need for it outweighs the need for secrecy, and that the disclosure is structured to 

cover only the material needed. Douglas Oil c. Petrol Stops Northwest, 441 U.S. 221, 222 

(1978).

Disclosure is necessary to avoid possible injustice. Rule 16(a)(1)(E) of the 

Federal Rules of Criminal Procedure states that upon the defendant’s request, the 

government “must permit the defendant to inspect and to copy” documents and objects 

that are either material to preparing the defense, intended as part of the government’s 

case-in-chief, or obtained from or belonging to the defendant. While Rule 16 does not 

include transcripts of grand jury testimony, Rule 26.2 of the Federal Rules of Criminal 

Procedure states that the government must provide to the defendant any statement of a 

testifying government witness, including those made before a grand jury, once that 

witness has testified for the government. Additional statutes and case law, such as the 

Jencks Act and Brady v. Maryland, 373 U.S. 83 (1963), require the government to 

disclose various information to the defendant for preparation of his defense.

The government has caused the issuance of numerous grand jury subpoenas and 

the testimony of numerous witnesses before the grand jury. Much of the materials sought 

to be disclosed to the defendant in this case derive from those grand jury proceedings. To 

the extent that it assists the defendant in the preparation of his defense and facilitates a 

possible pre-trial resolution of this case, the government now asks this Court to affirm, by 

order, both the government’s discovery obligations under various rules, statutes, and case 

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law, as well as authorize the government, pursuant to Rule 6(e)(3)(E)(i), to promptly 

make all necessary disclosures.

C. Order of Protection Pursuant to Fed.R.Crim.P. 16(d)

The discovery material in this case includes highly sensitive information relating 

to the defendant, third party taxpayers, and government employees, including: (a) tax 

returns or return information; (b) personal identifying information of individuals, 

including, without limitation, dates of birth, social security numbers, financial account 

numbers, and addresses; and (c) investigative reports produced by government employees 

acting in an undercover capacity.

In light of the sensitivity of the discovery material, the United States respectfully 

requests that the Court order that the defendant and his standby counsel not copy or 

disseminate that material to anyone other than members of the defense team. If, after 

review of the discovery material, the defendant or his standby counsel identifies specific 

discovery material that does not include Personal Identifying Information or otherwise 

sensitive information and, as a result, should be exempt from the proposed protective 

order, the parties shall meet and confer and, if necessary, seek guidance from this Court. 

The parties shall advise the Court by letter of any exceptions to the protective order on 

which they have agreed.

Similar protective orders have been sought and entered in the District of Oregon. 

See generally United States v. Fischer, 137 F.3d 1158 (9th Cir. 1998); United States v. 

Calcagno, 3:15-CR-00460-JO; United States v. Maier, 08-CR-00183-MO.

The requested protective order would maximize the defendant’s access to the 

sensitive material while also maximizing the rights of and protections afforded to other 

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individuals under applicable authorities, including 26 U.S.C. § 6103 and the Privacy Act, 

5 U.S.C. § 522a(b) (prohibiting federal agencies from “disclos[ing] any record which is 

contained in a system of records by any means of communication to any person, or to 

another agency, except pursuant to a written request by, or with the prior written consent 

of, the individual to whom the record pertains,” except as order by a court of competent 

jurisdiction).

III. CONCLUSION

Based on the foregoing, the government respectfully requests this Court issue an 

order authorizing disclosure of various government evidence in this case and, also, a 

protective order controlling the dissemination of sensitive information contained in that 

evidence. A proposed order is filed herewith.

Dated this 9th day of February 2016.

Respectfully submitted,

BILLY J. WILLIAMS

United States Attorney

/s/ Stuart A. Wexler

STUART A. WEXLER

RYAN R. RAYBOULD

Trial Attorneys, Tax Division

(202) 514-5496

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on February 9, 2016, I electronically filed the 

foregoing with the Clerk of the Court using the CM/ECF system, which will send 

notification of such filing to the attorney(s) of record for the defendant. Additionally, a 

copy of the foregoing was mailed and emailed to the defendant at the following 

addresses:

4230 NE Azalea Street

Hillsboro, OR 97124

1574 N. Dixie Downs Rd.

Trailer 51

St. George, UT 84770

wshrout@infowest.com

/s/ Stuart A. Wexler

STUART A. WEXLER 

Trial Attorney, Tax Division

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