U.S. v. Leveto
| Decision Date | 26 August 2008 |
| Docket Number | No. 05-4753.,05-4753. |
| Citation | 540 F.3d 200 |
| Parties | UNITED STATES of America v. Daniel J. LEVETO, Appellant. |
| Court | U.S. Court of Appeals — Third Circuit |
Victoria B. Eiger, Esq. (Argued), Dershowitz, Eiger & Adelson, P.C., New York, NY, for Appellant.
John Hinton, III, Esq. (Argued), Alan Hechtkopf, Esq., United States Department of Justice, Tax Division, Washington, DC, for Appellee.
Before: RENDELL, WEIS, and NYGAARD, Circuit Judges.
Daniel Leveto appeals the District Court's judgment of conviction for federal income tax fraud following a jury trial. He asserts a violation of his Sixth Amendment right to counsel, and he has made numerous challenges to evidentiary decisions made by the District Court. For the reasons that follow, we will affirm the judgment of the District Court.
Leveto operated a veterinary hospital in Meadville, Pennsylvania. Internal Revenue Service auditors detected fraud on Leveto's returns and they referred the matter to the I.R.S. Criminal Investigation Division. The I.R.S. initiated an undercover investigation that began in December of 1994. They obtained a mail cover, performed a public records check, conducted surveillance, and tasked an I.R.S. special agent to work undercover. The record provides the following facts.
Leveto joined an organization known as First American Research in the 1980's. The group promoted the establishment of sham offshore trusts for the purpose of evading liability for federal income taxes. Leveto became a promoter of a book authored by the founder of the organization, entitled "Tax Free: How the Super Rich Do It." He advertised the book in newspapers, listing his address for those who wished to make further inquiries. He received hundreds of responses.
In accord with the scheme promoted by the organization, Leveto "sold" his veterinary business to Center Company, a sham foreign trust purportedly located in the Turks and Caicos Islands. Center Company then distributed all of the veterinary clinic income to another sham foreign trust. This created an illusion that the veterinary clinic profits were distributed as foreign source income to foreign beneficiaries, eliminating federal income tax liability. Leveto and his wife then used debit cards and other means to spend or repatriate the funds, obscuring their control and ownership of these monies. In all, Leveto left $408,000 in unpaid taxes between 1991 through 2000.
Leveto promoted and sold the organization's book to a confidential informant and to the undercover agent. Leveto also admitted to these people that he was involved in nothing more than a "charade or sham." He admitted that he actually retained control of all of the gross receipts of the veterinary business, and that he paid only as much tax as he wanted to pay. Finally, he told both individuals where he kept a number of documents relating to the scam.
The I.R.S. undercover agent prepared a 27 page affidavit explaining Leveto's tax evasion scheme. The affidavit accompanied the application for a search warrant, but it was not incorporated into the application. The search warrant application did have a general list of items of interest attached as an exhibit. The agent accompanied a United States attorney who presented the request for a search warrant to the Magistrate Judge. The Magistrate Judge sealed the affidavit to protect the identity of confidential sources and authorized a search warrant for Leveto's residence and business. The undercover agent briefed other I.R.S. agents on the warrant and on the contents of the affidavit. They conducted the search the next day.
On February 15, 2001, a Grand Jury returned an indictment against Leveto and others, and an arrest warrant was issued on December 15, 2001. Leveto fled, evading arrest until March of 2004.
After Leveto's return to the Western District of Pennsylvania, the Magistrate Judge appointed counsel for him and ordered him to be detained. The District Court subsequently granted appointed counsel's motion to withdraw due to a conflict of interest. At that point, Leveto expressed an interest in pro se representation, but paradoxically indicated to the District Court "I am in no way waiving my right to counsel."
On June 7, 2004, the District Court conducted a hearing to determine Leveto's intent with regard to representation.1 At the hearing, the District Court instructed Leveto that he could not "have one foot in the counsel boat and one foot in the pro se boat." Moreover, the District Court noted that it would interpret any equivocation on the issue of representation by Leveto as a request for counsel. Leveto was given an opportunity to confer with stand-by counsel at this hearing.
After consulting counsel, Leveto said: "I have decided to proceed pro se with [the attorney] as stand-by counsel." The District Court then began a colloquy with Leveto, confirming that: he understood the charges against him and the elements of each offense; he was aware of the maximum penalty for each charge; he was cognizant that rules of evidence and rules of criminal procedure govern the process for trying the case and the admission of evidence; and that he was aware that the judge could not advise him on the rules.
The District Court found Leveto competent to waive counsel, but advised: The District Court concluded: "I strongly urge you to proceed with counsel, but it is your constitutional right to a knowingly [sic] and voluntary waiver of counsel." At the end of this colloquy the District Court asked: ". . . do you still desire to represent yourself and give up your right to be represented by a lawyer." Leveto responded: "I do, your Honor." The District Court acknowledged his waiver and appointed the attorney as stand-by counsel.
Leveto aggressively pursued his defense, filing numerous motions, including: motions for clarification; motions to dismiss parts of or all of the charges; a motion to disclose evidence; and a motion to suppress evidence based upon an invalid search warrant. Leveto also appealed his detention order. Finally, Leveto undertook plea negotiations with the government.
The District Court notified the parties on April 27, 2005 that trial would commence on May 23, 2005. One week before trial was to begin, Leveto filed a 42 U.S.C. § 1983 action against Judge Cohill, the presiding judge, alleging bias in the handling of pre-trial motions.
On the evening before trial, Leveto mailed from jail a motion to recuse Judge Cohill, on the ground that the Judge was now a defendant in a lawsuit filed by Leveto. At the morning conference before jury selection, the District Court orally denied the motion, stating that such a maneuver would "open the door for any defendant any time to file an action against the Judge personally and then get him to recuse. . . ." Upon this denial, Leveto next expressed his desire to have a separate hearing on the matter, before a different judge. The District Court denied this request, declaring that jury selection would commence as scheduled. At that point, Leveto stated:
Moments later, as jury selection was about to commence, Leveto said at side-bar: "After some new issues had come up, I had additional due process concerns and I am asking to be represented by counsel." The District Court reminded him that counsel had been appointed early in the process, but that "you didn't want to take advantage of it." The following exchange then occurred:
Leveto: Well, due to some of the newer developments, Your Honor, I believe that I no longer feel comfortable pro se and I do need to be represented by an attorney.
Judge: Well, this is a bit late to be asking that, so the motion is denied.
During voir dire proceedings, Leveto repeatedly expressed his desire for an attorney. In each instance, the District Court denied the request and advised Leveto to consult with stand-by counsel, who was present throughout all of this time.
As the trial began, the District Court asked Leveto if he wanted to make an opening statement. He said:
You know, Your Honor, due to the sheer intimidation of all of this—I really believed that I could represent myself, but I seem to be having difficulties and mental blocks, and I am asking you again to have an attorney represent me."
At the close of the government's case, Leveto asked to make an opening statement. The District Court granted the request, but cautioned A discussion between Leveto and the District Court ensued.
Judge: Under the circumstances of this case, I can't imagine stopping now and appointing [the stand-by counsel] or anyone else to represent you and prepare to defend a case like this. You can't do it. You can't operate that way.
Leveto: I'm aware of that, Your Honor. That is, [sic] why before we started, I reasserted the right and I filed the action against you a week before the trial.
Finally, later in the trial the following exchange occurred at side-bar after Leveto raised the counsel issue again:
Leveto: I just was not aware that you couldn't relinquish [a waiver of the right to counsel]. I know that I did it. I am sure that everyone knows that I did it here.
Judge: But, you can't relinquish it the day of the trial. This has been pending for years and no lawyer could possibly go in and act as a lawyer the day of the trial in a case like this without preparation time. And in the interest of justice, the thing has to move along.2
The counsel issue did not arise in the remainder of the trial. On June 2, 2005, a...
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