U.S. v. Bridges

• Decision Date: 14 April 1999
• Docket Number: No. 99-11-A.,99-11-A.
• Citation: 46 F.Supp.2d 462
• Parties: UNITED STATES of America v. Gregory BRIDGES, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

46 F.Supp.2d 462

UNITED STATES of America v. Gregory BRIDGES, Defendant.

No. 99-11-A.

United States District Court, E.D. Virginia, Alexandria Division.

April 14, 1999.

Helen Fahey, United States Attorney, Daniel Bell, AUSA, Alexandria, VA, Bruce Morton, Trial Attorney, Tax Division, U.S. Department of Justice, Washington, D.C., for plaintiff.

Thomas J. Foltz, Alexandria, VA, for defendant.

MEMORANDUM OPINION

ELLIS, District Judge.

Presented here on a motion in limine is the question whether admissions made by defendant's attorney to the Internal Revenue Service (IRS) agent investigating possible criminal tax fraud by defendant are inadmissible as statements "made in the course of plea discussions" pursuant to Rule 410, Fed.R.Evid., and Rule 11(e)(6), Fed.R.Crim.P.

I.

Defendant Gregory Bridges is charged in an indictment with 31 counts of preparing false tax returns for third parties in violation of 26 U.S.C. § 7206(2). In essence, the indictment alleges that Bridges knowingly prepared tax returns for third parties that i) overstated Schedule A itemized deductions and ii) claimed illegitimate credits. More specifically, the government contends that Bridges knowingly overstated deductions by using a so-called "AGI [adjusted gross income] percentage" method of determining itemized deductions. Under this method, an arbitrary percentage of a taxpayer's adjusted gross income, sometimes close to 50%, is allocated among medical, mortgage, charitable contribution and employee business expense deductions without regard to whether there actually were any expenditures on these items. The government further contends that in the case of four taxpayer returns, Bridges knowingly claimed a credit for a non-existent "Black Tax Credit."

Bridges pled not guilty to the indictment, contending that he thought that the AGI percentage method was legitimate as he learned it from one Nathaniel Thomas, a person he thought was an experienced tax preparer whose wife, in addition, worked for the IRS. Bridges also contends that he thought the "Black Tax Credit" was a legitimate tax credit African Americans could claim as reparations for slavery and other oppressive treatment suffered by African Americans.¹ Bridges further contends that he suffers from learning disabilities and a low sense of self worth, and that this prevents him from forming the requisite criminal intent.

The investigation into Bridges' alleged criminal conduct began with IRS Special Agent Karen Henderson's review of an individual's return. This review, coupled with an interview of the individual whose return was at issue, triggered an examination of other returns prepared by Bridges. This examination disclosed 61 additional returns with itemized deductions that were an unusually high percentage of adjusted gross income.² Based on this information, and on the interview with the individual, Agent Henderson, with the assistance of an Assistant United States Attorney (AUSA), obtained a search warrant for Bridges' home, which was executed on June 26, 1996.

Less than a week later, David G. Brickley, an experienced criminal attorney, appeared with Bridges as his counsel at a meeting at the IRS on July 2, 1996.³ At that meeting, Brickley stated that Bridges was "more than willing to cooperate," including acting as an informant in the investigation of Nathaniel Thomas, the individual who allegedly taught defendant the AGI tax method he used. At the July 2, 1996 interview, Brickley was also given the standard IRS power of attorney form, which was thereafter executed by Bridges and then filed with the IRS by a letter from Brickley dated September 4, 1996. This power of attorney authorized Brickley to represent Bridges in "all matters relating to the on-going criminal investigation of Gregory Antonio Bridges by the Internal Revenue Service."

Approximately one week after the filing of the power of attorney, Agent Henderson sent Brickley a letter that, inter alia, described in detail a "simulataneous plea program" and suggested that the investigation could be streamlined if Bridges elected to participate in the program.⁴ Also included in Agent Henderson's letter was the applicable section of the Internal Revenue Manual stating that "plea negotiation authority rests solely with the Department of Justice."

Approximately three months later, on December 17, 1996, Agent Henderson and Brickley engaged in a telephone conversation that included the disputed statements. Brickley and Agent Henderson agree that during this conversation Brickley stated that his client was willing to cooperate. Agent Henderson contends that she then asked Brickley if Bridges was interested in pleading guilty, and that Brickley responded "yes."⁵ For his part, Brickley flatly denies that he was asked such a question or gave such an answer, and he further testified without equivocation that he was not authorized by his client to make such a statement. Brickley and Agent Henderson also disagree as to the conclusion of the conversation. Agent Henderson contends that she explained that tax confidentiality laws prevented the IRS from sharing the information obtained during its investigation with the U.S. Attorney's office, but stated that if Bridges elected to participate in the simultaneous plea program, Brickley might expedite matters by writing a letter to the U.S. Attorney's office requesting that the IRS disclose the tax information to the U.S. Attorney. In this regard, she claims she offered to send Brickley samples of such letters, and that Brickley accepted.⁶ For his part, Brickley denies that this exchange occurred; he testified, instead, that he received such sample letters from Agent Henderson months earlier along with the September 13 letter describing the simultaneous plea program. In any event, just over a week later, on December 26, 1996, Agent Henderson sent Brickley, by facsimile, the name and telephone number of the AUSA to contact should Bridges wish to participate in the simultaneous plea program. Ultimately, Brickley did not contact the AUSA and Bridges pled not guilty. In January 1998, Brickley informed the U.S. Attorney's office that he no longer represented Bridges. The indictment followed a year later.

II.

The precise question presented is whether Agent Henderson may testify at trial that Brickley responded affirmatively when asked whether his client, Bridges, was interested in pleading guilty. The government contends that because Agent Henderson had no authority to negotiate a plea, the statement was not made in the course of plea negotiations and thus is admissible. Bridges counters by claiming that, notwithstanding Agent Henderson's actual lack of authority to negotiate a plea, the statement, assuming that it was made, is inadmissible as Brickley, in the circumstances, would have been reasonable in believing that his discussion with Agent Henderson occurred in the course of plea discussions.

While there appears to be no controlling circuit authority on this question, there are well-established general principles that are instructive. First, in haec verba, Rule 410, Fed.R.Evid., and Rule 11(e)(6), Fed.R.Crim.P., render inadmissible "any statement made in the course of plea discussions with an attorney for the prosecuting authority which do not result in a plea of guilty or which result in a plea of guilty later withdrawn."⁷ And this is true whether the statement is made by the defendant or an attorney of the defendant authorized to do so,⁸ and whether the statement is made to a government attorney, or to an individual with authority from a government attorney to negotiate a plea.⁹ Importantly it is also clear that statements made in an effort to initiate plea bargaining fall within the definition of plea discussions under the rules. See United States v. Brooks, 536 F.2d 1137, 1139 (6th Cir.1976) ("`[E]ven an attempt to open plea bargaining [is] covered under the same rule of inadmissibility.'").¹⁰ And finally, it is generally true that whether the discussions between an accused and law enforcement are plea negotiations protected by Rule 11(e)(6) and Rule 410 is "a decision driven by the specific facts and circumstances surrounding the interchange at issue."¹¹

These general principles are not dispositive of the question whether the statement at issue occurred in the course of plea discussions. What is needed is a more sharply focused test to distinguish between statements made in the course of plea negotiations and those that are not. Although no such test has been adopted in this circuit, other courts have applied a two-tiered test that focuses on the speaker's state of mind, and asks whether his subjective expectation that a statement is being made in the course of plea discussions was objectively reasonable given the totality of the circumstances.¹² This test focuses not on whether the government agent had actual authority to negotiate a plea, but rather on the state of mind of the attorney dealing with the government agent. This focus is both sensible and fair given that the Rules invite and encourage attorneys to make statements in the course of plea discussions that would otherwise not be made. To have the scope of Rules 410 and 11(e)(6) turn simply on whether the government agent had actual authority to negotiate a plea, as the government argues, would create an unfair trap for the unwary defendant or defense attorney and perhaps invite government agents to set or spring unfair traps by calculated questions or remarks.¹³

This test, applied here, compels the conclusion that Brickley's statement is protected by Rule 410 and Rule 11(e)(6). The subjective and objective prongs of the test, given the instant facts, collapse into one inquiry because the factors indicating Brickley's subjective belief are the same factors that demonstrate that such a belief was objectively reasonable. First, Brickley's testimony that he believed that Agent Henderson was working hand and hand...