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September 24, 2020

Honorable Loretta A. Preska

Senior United States District Judge

Southern District of New York

United States Courthouse

500 Pearl Street

New York, New York 10007

Re: United States v. James Cutler, 02 Cr. 441 (LAP)

Dear Judge Preska:

The United States respectfully submits this letter in connection with the Order issued by 

Your Honor on August 25, 2020 directing the Government to file a response to defendant James 

Cutler’s letter of January 7, 2018. In particular, we write to provide the Court with an update 

regarding resolution of the core issue raised by Mr. Cutler --- viz., the amount of taxes, interest, 

and other amounts due by Erika Cutler (the defendant’s wife) to the IRS for the 2005 and 2005 tax 

years. We also write to request, with the consent of the defendant, a further extension of time, 

until October 26, 2020, to file our response. As explained below, such an extension is essential in 

order to gather additional records essential to our reply. 

First, we wish to report to the Court that the Government and the defendant have engaged 

in a productive series of discussions in an attempt to narrow and possibly resolve the defendant’s 

claims. One of the issues that has emerged is whether and when certain of the IRS tax payments 

(described in the report submitted to this Court by Trustee John Murtha) were transmitted to the 

IRS, what instructions accompanied those transmissions, and whether and how the IRS applied 

those payments to Erika Cutler’s 2005 and 2006 tax liabilities. In order to make those 

determinations, however, the Government and Mr. Cutler need un-redacted copies of the tax 

payments made by Mr. Murtha. (Recall that Mr. Murtha, consistent with this Court’s ECF 

redaction rules, submitted a small group of redacted checks when he filed his accounting.) 

Towards that end, we have contacted Mr. Murtha seeking copies of those checks, and fervently 

hope to receive them shortly. In addition, because certain of the payment checks were apparently 

given by Mr. Murtha to Erika Cutler’s attorney (Sally Armstrong) in order to transmit to the IRS, 

we will need to get the pertinent documents from her. Once these documents are obtained, the 

parties can determine the true and correct amounts that are currently due by Erika Cutler to the 

IRS. In particular, the checks and other transmittal documents will help resolve why certain of the 

payments failed to show up on IRS transcripts of payment, and why certain payments were applied 

by the IRS to the 2003 tax year rather than 2005. If the payments were not applied correctly by the 

IRS, then a recalculation of the 2005 liabilities would be appropriate, leading to a reduction of the 

The Silvio J. Mollo Building

One Saint Andrew’s Plaza

New York, New York 10007

U.S. Department of Justice

United States Attorney

Southern District of New York

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outstanding liabilities for that year. A determination of the current, correct liabilities will shape 

the parties’ positions going forward, and could lead to resolution of the current dispute.

Given the foregoing, the Government requests (with Mr. Cutler’s consent) an extension of 

time until October 26, 2020 to submit its response. This time frame is premised on our ability to

obtain the pertinent records from Mr. Murtha (who was responsible for issuing the checks) and, if 

necessary, Sally Armstrong (Erika Cutler’s attorney, who, according to Mr. Murtha, had been sent 

certain of the payments, in order to transmit them to the IRS). In the event we are unable to obtain 

voluntarily the pertinent documents from Mr. Murtha and, if necessary, Ms. Armstrong, we may 

revert to the Court to obtain an order directing them to comply. 

Thank you for considering this request.

Respectfully submitted,

AUDREY STRAUSS

Acting United States Attorney

By: //s//

Stanley J. Okula, Jr.

Senior Litigation Counsel—DOJ Tax

(202) 514-2839

cc: James Cutler, Pro Se

AUSA Mitzi Steiner

John Murtha, Trustee

Case 1:02-cr-00441-LAP Document 423 Filed 09/24/20 Page 2 of 2

The extension request is approved.

SO ORDERED.

Dated: September 25, 2020

________________________________

LORETTA A. PRESKA, U.S.D.J.

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