Court Opinion

ID: 181746
Source: CourtListenerOpinion
Date Created: 2010-12-27 15:27:27+00
Date Added: 2024-06-11T09:04:52.945695
License: Public Domain

[PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS

                  FOR THE ELEVENTH CIRCUIT             FILED
                  ___________________________ U.S. COURT OF APPEALS
                                                      ELEVENTH CIRCUIT
                                                      DECEMBER 22, 2010
                          No. 08-13740
                                                          JOHN LEY
                  ____________________________             CLERK

               D. C. Docket No. 07-00107-CR-TCB-3-1

UNITED STATES OF AMERICA,

                                                         Plaintiff-Appellee,

                                versus

THERESA L. KOTTWITZ,
GERARD MARCHELLETTA, JR.,
GERARD MARCHELLETTA, SR.,

                                                     Defendants-Appellants.

                  ____________________________

             Appeals from the United States District Court
                 for the Northern District of Georgia
                _____________________________

                         (December 22, 2010)

                 ON PETITION FOR REHEARING
Before EDMONDSON, Circuit Judge, and HODGES,* District Judge.1

PER CURIAM:

       Defendants/Appellants have petitioned for rehearing. We have considered

Defendants’ arguments and the Government’s reply. And we have looked at the

record again. We stand by our decision, United States v. Kottwitz, 614 F.3d 1241

(11th Cir. 2010), except on the issue of the accountant-reliance jury instruction for

Count One.

       Defendants contend that the district court erred in refusing to give

Defendants their requested jury instruction about reliance on an accountant’s

advice. In our original decision, we concluded that this refusal constituted

reversible error on Counts Three, Four, and Five. Then, we remanded the case to

the district court for retrial with the requested instruction on those counts only.

Now, we conclude that the district court was also similarly incorrect to deny

Defendants’ accountant-reliance jury instruction on the Count One conspiracy

charges.

       *
          Wm. Terrell Hodges, United States District Judge for the Middle District of Florida,
sitting by designation.
       1
           This order is being entered by quorum pursuant to 28 U.S.C. § 46(d).

                                                 2
         To receive a requested jury instruction in this Circuit, a defendant’s burden

is light: “any foundation in the evidence” is sufficient. United States v. Opdahl,

930 F.2d 1530, 1535 (11th Cir. 1991). On reflection, we accept that Defendants

met this burden. Sufficient evidence was introduced to allow the conviction of

Defendants on Count One on the basis of several alternative interpretations of the

facts.

         Even though no evidence directly showed that Defendants’ accountant was

involved in initially entering/hiding transactions on the corporate books (for

example, the personal-expense transactions), Defendants introduced enough

circumstantial evidence to warrant an instruction that -- at some pertinent point --

Defendants may have relied on the accountant’s advice.

         Virtually all of the suspect transactions occurred after Defendants’

accountant was hired in mid-1999; and the accountant had authority to (and in fact

did) review and reclassify some entries in the corporate books. In addition, the

accountant prepared the tax returns that resulted in underpayment of taxes. Even

if it was not the only and not the most likely explanation of events leading to the

guilty verdicts on Count One, an evidentiary basis existed for conviction under

Count One that could have involved Defendants, in fact, relying on the advice of

                                            3
their accountant. For example, the jury might have believed that Defendants acted

with the accountant’s tacit approval of Defendants’ accounting methods.2

       For these reasons, we vacate Kottwitz’s, Junior’s, and Senior’s convictions

for conspiracy to defraud the IRS (Count One) and remand the case to the district

court for a new trial with an accountant-reliance jury instruction. We withdraw all

language in our opinion, United States v. Kottwitz, 614 F.3d 1241 (11th Cir.

2010), inconsistent with this present order.3

       Otherwise, Defendants’ petitions for rehearing are DENIED. And, no judge

of the Court having requested a poll, Defendant Kottwitz’s suggestion for

rehearing en banc is DENIED.

       Petitions DENIED, except Defendants’ convictions and sentences on Count

One are VACATED; the case is REMANDED.

       2
          The correct test in this Circuit for the “act” element in an 18 U.S.C. section 371
conspiracy (including the subset of Section 371 conspiracies against the Internal Revenue Service
known as Klein conspiracies) is “the commission of an act in furtherance of the agreement.”
United States v. Adkinson, 158 F.3d 1147, 1153 (11th Cir. 1998). A “failure to properly report
income,” id. at 1154, is one example of conduct that could satisfy the act element of a Klein
conspiracy. But it is not the only possible act that could do so: for example, intentionally making
false entries in corporate books could be an act in furtherance of the agreement. Because we
cannot know the precise act(s) on which the jury relied for the Count One conspiracy
convictions, we cannot rule out that the jury relied on an act that involved -- in a material way --
advice from Defendants’ accountant.
       3
         To be clear, as a result of our original decision and this present order, we have vacated
or reversed each of Defendants’ convictions and sentences at issue on appeal.

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