United States v. Picardi

Decision Date13 February 2014
Docket NumberNo. 13–2041.,13–2041.
Citation739 F.3d 1118
PartiesUNITED STATES of America, Plaintiff–Appellee v. Edward J.S. PICARDI, MD, Defendant–Appellant.
CourtU.S. Court of Appeals — Eighth Circuit

739 F.3d 1118

UNITED STATES of America, Plaintiff–Appellee
v.
Edward J.S. PICARDI, MD, Defendant–Appellant.

No. 13–2041.

United States Court of Appeals,
Eighth Circuit.

Submitted: Oct. 24, 2013.
Filed: Jan. 10, 2014.

Rehearing and Rehearing En Banc Denied Feb. 13, 2014.


[739 F.3d 1120]


John R. Murphy, Rapid City, SD, for Appellant.

Kevin Koliner, AUSA, Sioux Falls, SD, for Appellee.


Before LOKEN, GRUENDER, and SHEPHERD, Circuit Judges.

GRUENDER, Circuit Judge.

A jury found Edward J.S. Picardi guilty of thirteen counts of federal tax related offenses. On appeal, Picardi challenges the district court's 1 (1) replacement of two

[739 F.3d 1121]

jurors with alternate jurors; (2) exclusion of a defense exhibit; (3) limitation of a defense witness's testimony; and (4) refusal to give a proffered theory-of-defense instruction. We affirm.

I. Background

Picardi was a surgeon in western South Dakota. In the mid–1990s, Picardi became a client of Anthony Kritt, an attorney and a certified public accountant. From 1997 until 2003, Picardi participated in an “employee leasing program” promoted and run by Kritt that required Picardi to enter a contract with Montrain Services, Ltd., an Irish corporation, to lease his services as a physician. Montrain Services contracted with Professional Leasing Services, Inc., a Nevada corporation that was operated by Kritt, to provide Picardi's services to Professional Leasing Services. In turn, Professional Leasing Services contracted with Picardi's medical group to “lease” Picardi's services to it.

Picardi's income from this program was distributed in a manner designed to avoid taxes. Picardi's medical group paid Professional Leasing Services a “leasing fee” for Picardi's medical services. Professional Leasing Services then paid Picardi a small portion of this “leasing fee” as wages, which Picardi reported as income on his tax returns. In a series of complex transactions, the other, larger portion of the “leasing fee” was transferred into foreign financial accounts set up for Picardi. Picardi did not report this portion as income on his federal income tax returns from 1999 until 2003. On paper, the unreported portion of Picardi's income was “deferred compensation” inasmuch as he was supposed to be unable to access it until he retired or turned seventy years old. Picardi did, however, access and use the funds through another series of complex transactions made to look like loans. Picardi further reduced his taxes by categorizing the portion of his income sent overseas as “professional leasing services” expenses on his medical practice's corporate income tax returns. In April 2003, Picardi withdrew from the “employee leasing program,” but he continued to maintain his interest in the foreign accounts containing his “deferred compensation.” For the 2004 to 2008 tax years, Picardi failed to disclose to the Internal Revenue Service (“IRS”) his financial interest in the foreign accounts.

A federal grand jury returned a superseding indictment charging Picardi with five counts of income tax evasion, in violation of 26 U.S.C. § 7201; five counts of filing a false return, in violation of 26 U.S.C. § 7606(1); and three counts of failing to file with the IRS a required form regarding his interests in foreign accounts, in violation of 31 U.S.C. §§ 5314 and 5322 and 31 C.F.R. §§ 103.24 and 103.27(c). Picardi proceeded to a jury trial. At trial, Picardi claimed that he had a good faith belief that the “deferred compensation” component of the “employee leasing program” was legal and that he relied upon the expert and legal advice of Kritt. The jury found Picardi guilty of all thirteen counts, and he was sentenced to 60 months' imprisonment. Picardi then timely filed this appeal.

II. DiscussionA. Replacement of Two Jurors

Twelve jurors and three alternate jurors were selected to serve on Picardi's jury. On the third day of trial, the district court announced that it had dismissed juror S.R. the previous night because S.R. “had a change in life circumstance.” The court replaced S.R. with one of the alternate jurors. At the beginning of the ninth day of trial, the district court notified the parties that it had excused juror M.K. because M.K. “was finding the rigors of serving on this jury to be too burdensome.... [b]y

[739 F.3d 1122]

virtue of age and the strain of trial.” The court replaced M.K. with an alternate juror. Picardi did not object to the district court's decisions to replace either S.R. or M.K. Instead, in the case of S.R., Picardi stated that he had no issues to raise with the court before trial recommenced, and in the case of M.K., Picardi volunteered that M.K. was eighty years' old in order to “complete[ ] that issue for record purposes.”

Picardi first argues that the district court abused its discretion by dismissing jurors S.R. and M.K. because the record does not provide a legitimate basis for the court's decision. We generally review a district court's decision to replace a juror for abuse of discretion. United States v. Cannon, 475 F.3d 1013, 1023 (8th Cir.2007). However, because Picardi did not object, we review the district court's decision for plain error. See United States v. Thompson, 866 F.2d 268, 272 (8th Cir.1989). To show plain error, Picardi must establish that there is “(1) ‘error,’ (2) that is ‘plain,’ and (3) that it ‘affect[s] substantial rights.’ ” Johnson v. United States, 520 U.S. 461, 466–67, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997) (alteration in original) (quoting United States v. Olano, 507 U.S. 725, 732, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993)). If Picardi establishes all three conditions, we may exercise our “discretion to notice a forfeited error, but only if ... the error ‘seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings.’ ” Id. at 467, 117 S.Ct. 1544 (alteration in original) (quoting Olano, 507 U.S. at 732, 113 S.Ct. 1770).

Picardi has failed to demonstrate that the district court committed error, much less plain error. A district court may impanel alternate jurors to replace original jurors “who are unable to perform or who are disqualified from performing their duties.” Fed.R.Crim.P. 24(c)(1). “The substitution of an alternate for a juror for reasonable cause is within the prerogative of the trial court and does not require the consent of any party.” United States v. Bad Cob, 560 F.2d 877, 879 (8th Cir.1977) (quoting United States v. Ellenbogen, 365 F.2d 982, 989 (2d Cir.1966)). While the record here may not be developed fully because Picardi did not object and seek further explanation, it sufficiently discloses the district court's reason for replacing each juror. With respect to S.R., the court found that S.R. could not continue because of a “change in life circumstance.” With respect to M.K., the court found M.K. “was finding the rigors of serving on this jury to be too burdensome.... [b]y virtue of age and the strain of trial.” Picardi does not dispute that these are reasonable grounds for replacing a juror, and he has not presented any evidence that these grounds were not present. Accordingly, “we cannot say that [Picardi's] claim amounts to plain error.” Thompson, 866 F.2d at 272 (quoting United States v. Udey, 748 F.2d 1231, 1240 (8th Cir.1984)).

Picardi next argues that by dismissing the two jurors outside of his presence and that of his attorney, the district court violated his right to be present at a critical stage of the proceedings against him as guaranteed by the Sixth Amendment, the Fifth Amendment's Due Process Clause, and Federal Rule of Criminal Procedure 43.2 Again, since neither Picardi nor his attorney objected to their absence when the jurors were dismissed, we review for plain error. See id.; see also

[739 F.3d 1123]

United States v. Runyon, 707 F.3d 475, 517–18 (4th Cir.2013). “[T]he right to personal presence at all critical stages of the trial ... [is a] fundamental right[ ] of each criminal defendant.” Rushen v. Spain, 464 U.S. 114, 117, 104 S.Ct. 453, 78 L.Ed.2d 267 (1983). “A criminal defendant's right to be present at every stage of a criminal trial is rooted, to a large extent, in the Confrontation Clause of the Sixth Amendment and is protected to some extent by the Due Process Clause of the Fifth and Fourteenth Amendments.” United States v. Smith, 230 F.3d 300, 309 (7th Cir.2000) (internal citation omitted). Rule 43 codified this right; the codified right expressed in Rule 43, however, “is broader than the constitutional right, and includes the right of the criminal defendant to be present during all stages of his or her trial.” Id. at 309–10;see also United States v. Gunter, 631 F.2d 583, 589 (8th Cir.1980).

First, Picardi's Sixth Amendment rights have not been implicated, “as no witness or evidence against the defendant was presented” when the district court dismissed the jurors. Smith, 230 F.3d at 310;see also Olszewski v. Spencer, 466 F.3d 47, 64 (1st Cir.2006) (“We see no basis for Olszewski's claim that the judge's action in excusing the juror violated his Sixth Amendment rights.”). Second, even if we were to assume that the district court violated Picardi's due process rights or Rule 43, Picardi “has failed to show that the district court's error satisfies the third prong of Olano—to wit, that the error affected [Picardi's] ‘substantial rights.’ ” Runyon, 707 F.3d at 517 (quoting Olano, 507 U.S. at 732, 113 S.Ct. 1770). The district court notified Picardi of the court's dismissal of each juror, and in each instance, the court provided him with an opportunity to object or make a record. At no point did Picardi object, and in the case of M.K., Picardi even volunteered her age in order to “complete[ ] that issue for record purposes.” The district court replaced M.K. and S.R. with alternate...

To continue reading

Request your trial
30 cases
  • Kornhardt v. United States
    • United States
    • U.S. District Court — Eastern District of Missouri
    • March 9, 2016
  • Manning v. Caldwell for City of Roanoke
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • July 16, 2019
    ...the question of a statute’s vagueness is a purely legal issue that does not require additional fact-finding. See United States v. Picardi , 739 F.3d 1118, 1126 (8th Cir. 2014) ; United States v. Paradies , 98 F.3d 1266, 1284 (11th Cir. 1996) ; United States v. Mallas , 762 F.2d 361, 364 n.4......
  • Williams v. United States, C13-4025-MWB
    • United States
    • U.S. District Court — Northern District of Iowa
    • August 13, 2014
    ...Amendment and is protected to some extent by the Due Process Clause of the Fifth and Fourteenth Amendments.'" United States v. Picardi, 739 F.3d 1118, 1123 (8th Cir. 2014) (quoting United States v. Smith, 230 F.3d 300, 309 (7th Cir. 2000) (internal citationomitted)). Williams bases his argu......
  • United States v. Benton
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • May 11, 2018
    ...show that the law was "vague or highly debatable" so as to warrant the issuance of his proposed instruction. See United States v. Picardi, 739 F.3d 1118, 1126-27 (8th Cir. 2014) (holding that district court did not abuse its discretion in refusing to issue "debatable law" instruction becaus......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT