Opinion ID: 202631
Heading Depth: 2
Heading Rank: 3

Heading: Burden-Shifting by the Government

Text: 26 Pesaturo argues that the government impermissibly shifted the burden of proof to him through a summary witness, Gary Lindahl, an IRS revenue agent who was unconnected to the case but who was present in the courtroom during most of the trial. 17 Since Covenant's records indicated no sales of kerosene, Lindahl used evidence from the trial to calculate the amount of kerosene Covenant could have sold for on-road use. Lindahl began with the amount of kerosene purchased by Covenant and subtracted kerosene sales to MDT (Covenant's largest customer, who used all of the fuel it purchased from Covenant in off-road applications). Because sales of kerosene to MDT were also not recorded, the amount of kerosene sold to MDT was imputed based on the total fuel sales to MDT and the testimony of several witnesses that Covenant blended kerosene into the fuel sold to MDT at a ratio of 30% kerosene to 70% No. 2 diesel. Kerosene, which has a lower viscosity than either No. 1 or No. 2 diesel, was added to the fuel to prevent the fuel from gelling in the fuel lines in cold temperatures. Although the witnesses agreed on this ratio, they disagreed as to whether or not Covenant sold blended fuel to MDT exclusively during the winter months. Those who testified that blended fuel was sold to MDT outside of the winter months noted that railcars were often sent through cold climates — across the Rocky Mountains, for instance — before they reached their destinations. As a result, the government assumed the 30:70 ratio for sales throughout the year. Since this would overestimate the gallons of kerosene sold to MDT if the fuel sold to MDT outside of winter was not blended, this approach resulted in a conservative estimate of the gallons of kerosene unaccounted for by sales to MDT and therefore available for sale in taxable uses. 27 Pesaturo argues that, by subtracting non-taxable kerosene sales to MDT from Covenant's kerosene purchases to arrive at a figure of 358,740 gallons available for sale in taxable uses, the government impermissibly shifted the burden of proof to defendant to account for the legitimate sale of that fuel. 18 In response, the government characterizes its approach as the normal process of establishing a fact through the use of circumstantial evidence, and notes further that its estimate was necessitated by Pesaturo's own lack of accurate record-keeping. Indeed, Covenant's bookkeeper testified that Pesaturo instructed her to record all kerosene sales as sales of home heating oil, leading to the absurd accounting result that Covenant's records showed purchases — but no sales — of kerosene, notwithstanding that Covenant had no fuel storage facilities save the storage tanks of its three trucks. 28 The prosecution never argued to the jury that it had to find that the unaccounted-for kerosene was sold for taxable use because of the absence of records otherwise accounting for its sale. Instead, the prosecution noted the amount of unaccounted-for kerosene, asked the rhetorical question where did the rest go?, and answered the question by pointing to the evidence. 19 Furthermore, the judge carefully instructed the jury: The burden of proof rests with the government. A defendant has no burden to prove that he is not guilty of what is charged. The burden is always with the government to prove that he is guilty of what the government charges him with. . . . The government must establish each element of the offense charged by proof that convinces you and leaves you with no reasonable doubt. 29 We agree with the government that there was no impermissible burden shifting in this case. 30