U.S. v. Lorenzo

Decision Date14 December 1992
Docket NumberNos. 91-10506,s. 91-10506
Citation995 F.2d 1448
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Windyceslau D. LORENZO, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Roger ELVICK, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Nathan K. BROWN, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Ron KNUTT, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Thomas PORTER, Defendant-Appellant. to 91-10509 and 91-10513.
CourtU.S. Court of Appeals — Ninth Circuit

Richard T. Pafundi, Honolulu, HI, for defendant-appellant Lorenzo.

Lane Y. Takahashi, Honolulu, HI, for defendant-appellant Elvick.

Thomas D. Collins, III, Honolulu, HI, for defendant-appellant Brown.

Wayne H. Tashima, Honolulu, HI, for defendant-appellant Knutt.

Robert Finlay, Honolulu, HI, for defendant-appellant Porter.

Lawrence L. Tong, Asst. U.S. Atty., Honolulu, HI, for plaintiff-appellee.

Appeal from the United States District Court for the District of Hawaii.

Before GOODWIN, O'SCANNLAIN, and RYMER, Circuit Judges.

O'SCANNLAIN, Circuit Judge:

This appeal raises a number of issues concerning the use of a tax protest scheme designed to harass public officials and private individuals against whom some of the appellants had grievances.

I

On October 18, 1990, a grand jury sitting in the District of Hawaii returned a seventy-nine count indictment charging fifteen individuals with various violations arising out of their use of a tax protest method known as the "redemption" scheme. Eleven of the defendants are residents of Hawaii (the "Hawaiian defendants"), including appellants Nathan Brown and Windyceslau Lorenzo. The four other defendants, including appellants Roger Elvick, Ron Knutt, and Thomas Porter, are from North Dakota and Minnesota (the "North Dakota defendants"). The indictment charged that the defendants conspired, in violation of 18 U.S.C. § 371, to file false documents with the IRS and to impede the administration of justice. The substantive offenses underlying the conspiracy included making false statements in forms filed with the IRS in violation of 18 U.S.C. § 1001, endeavoring to impede a judicial officer in violation of 18 U.S.C. § 1503, mail fraud under 18 U.S.C. § 1341, and filing false tax claims under 18 U.S.C. § 641.

According to the appellants, redemption theory promotes the use of federal income tax forms by an "injured party" as a means of retaliating against those deemed responsible for wrongs to that person. If the government, or a business, institutes an "unjustified" legal action against that person, the person seeks "redemption" by harassing the individuals responsible and attempting to impede them in their official duties. The individual victim receives an IRS 1099-MISC form from the "injured party" stating that the victim had received an amount of miscellaneous income from the sender. In addition, the "injured party" seeks to collect, as "money damages," a tax refund from the government.

One of the appellants, Roger Elvick, put together instructional materials consisting of videotapes, audiotapes, and printed material that explain how to implement the redemption scheme. The materials were available for purchase by mail-order from another appellant, Ronald Knutt. Appellant Thomas Porter and Juanita Dewey acted as consultants, helping to explain to purchasers how to use the redemption scheme. In 1990, Elvick, Knutt, and Porter were convicted of conspiracy in federal district court in North Dakota, and Dewey in Minnesota, based on their promotion of the redemption scheme and their personal efforts to use it to receive tax refunds. All three North Dakota appellants are currently incarcerated due to those convictions. A conspiracy indictment against Elvick in the Western District of Texas was apparently dismissed because of his North Dakota conviction.

In this case, a group of "native Hawaiian activists" happened upon the redemption scheme. With guidance from the North Dakota defendants, the Hawaiian defendants used the scheme against a number of state and federal officials against whom they had grievances. For example, appellant Nathan Brown obtained a rural housing loan through the Farmers Home Administration, an agency of the Department of Agriculture, to finance the purchase of his house. Brown later refused to continue making payments on his loan, arguing that he was a citizen of the Sovereign Kingdom of Hawaii and that the land had been illegally sold to him. After the government, represented by the U.S. Attorney's Office, instituted a civil foreclosure action against him, Brown employed the redemption scheme against District Court Judge Ezra, U.S. Attorney Daniel Bent, the Assistant U.S. Attorney who handled the case, officials of the city and county, and individuals at the Farmers Home Administration. Brown filed a tax return seeking a refund of $1,344,834.79.

Brown also was involved, along with Lorenzo, in a dispute with the State of Hawaii Department of Land and Natural Resources ("DLNR"). Lorenzo and his family squatted on land leased by the DLNR to flower growers. Lorenzo told the DLNR that he was a "sovereign heir" entitled to occupy and possess Hawaiian crown lands. After the state evicted Lorenzo, he employed the redemption scheme against various individuals involved in the eviction, filing false 1099 forms showing payment of compensation to twelve individuals including the governor of Hawaii, the State Attorney General, the chairman of the DLNR, and other DLNR employees. Lorenzo filed a tax return seeking a refund of $748,960. The IRS issued a refund check for $458,348 which was intercepted from Lorenzo's mailbox after the IRS realized Lorenzo's return was fraudulent.

The district court divided the case into three trials. Appellants Brown and Lorenzo were tried as part of the second trial group. After trial, Brown was convicted by the jury of eighteen counts, and the jury was unable to reach a verdict as to one count. He was sentenced to seventy-eight months in prison. Lorenzo was convicted by the jury of fifteen counts. He was sentenced to thirty-three months imprisonment and three years supervised release.

The third trial group consisted of appellants Elvick, Knutt, and Porter, as well as Dewey. Elvick, Knutt, and Porter contested the jurisdiction of the court and refused to identify themselves at the beginning of the proceedings. The district court allowed them to proceed pro se but appointed standby counsel to act as their legal advisors. The appellants then brought a pro se motion to dismiss based on lack of venue and jurisdiction. The district court denied their motion. Elvick and Knutt instructed their legal advisors not to participate at trial. As Porter's mandate to his counsel was more ambiguous, his counsel participated at trial. Consistent with their belief that the court had no jurisdiction, Elvick, Knutt, and Porter refused to attend the trial after jury selection.

Elvick, Knutt, and Porter were each convicted by the jury of one count of conspiracy. Elvick was sentenced to sixty months in prison; Knutt also received sixty months; Porter received fifty-seven months. Their sentences are to run consecutively to their North Dakota sentences.

II

Appellants Brown and Lorenzo argue that, because the U.S. Attorney and several assistants were "victims" and testified as witnesses at trial, the U.S. Attorney's Office should have recused itself from prosecuting the case. Brown and Lorenzo contend that the district court's refusal to disqualify the entire U.S. Attorney's Office for the District of Hawaii was error.

This court has already rejected this contention in a related appeal. See United States v. Hoapili, No. 91-10448, 1992 WL 379398 (9th Cir. Dec. 17, 1992). A federal prosecutor may testify at a trial in which he is participating only if there is a compelling need. United States v. Tamura, 694 F.2d 591, 601 (9th Cir.1982). Here, none of the members of the U.S. Attorney's Office who testified participated in the prosecution; rather, the case was prosecuted by an Assistant U.S. Attorney who was not a member of the office at the time the crimes were committed and who had not received false 1099 forms. Moreover, the testimony of the members of the office who did testify was necessary to show that they had not received the income reported by the appellants.

The appellants also contend that recusal was mandated by the guidelines promulgated in the U.S. Attorneys' Manual. See U.S. Attorneys' Manual, § 1-3.170 (conflict of interest exists when a member of a U.S. Attorney's Office has a personal interest in the outcome of a matter). The appellants assert that the testimony of the U.S. Attorney makes this an "exceptional case," requiring "the recusation of all the members of [the] office." U.S. Attorneys' Manual, § 1-3.170. However, the U.S. Attorneys' Manual "is not intended to, does not, and may not be relied upon to create any rights, substantive or procedural, enforceable at law by any party in any matter civil or criminal." U.S. Attorneys' Manual, § 1-1.100. Moreover, the U.S. Attorney's Office followed the appropriate procedures as set out in the Manual.

Finally, the appellants contend that this prosecution created the appearance of conflict. See Model Code of Professional Responsibility DR 5-102. However, even were we to hold that the vicarious disqualification rules apply to a U.S. Attorney's Office, 1 the appellants have not demonstrated prejudice. The D.C. Circuit has held that "[w]ith regard to an appearance of conflict on the part of the prosecution, on appeal a defendant has cause to complain only if he was prejudiced." United States v. Heldt, 668 F.2d 1238, 1277 (D.C.Cir.1981), cert. denied, 456 U.S. 926, 102 S.Ct. 1971, 72 L.Ed.2d 440 (1982). That court recognized that, "[w]hile the prosecutor's duty 'to seek justice' cannot be...

To continue reading

Request your trial
125 cases
  • Denis v. Ige
    • United States
    • U.S. District Court — District of Hawaii
    • May 12, 2021
    ... ... 43, PageID # 247. The Apology Resolution is not "tantamount to a recognition that the [Hawaiian] Kingdom continues to exist." State v. Lorenzo , 77 Haw. 219, 221, 883 P.2d 641, 643 (1994) ; cf. Hawaii v. Off. of Hawaiian Affs. , 556 U.S. 163, 172, 129 S.Ct. 1436, 173 L.Ed.2d 333 (2009) ... ...
  • U.S. v. Fernandez
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • October 27, 2004
    ... ... The Olsen affidavits were therefore neither false nor misleading on this point. Appellants have pointed to nothing in the record that would lead us to conclude that the district court's finding was clearly erroneous ...         Finally, Appellants argue that the Olsen affidavits failed ... appeal, we review for plain error the district court's failure to order a competency hearing sua sponte. Cf. United States v. Lorenzo, 995 F.2d 1448, 1456 (9th Cir.1993). "The substantive standard for determining competence to stand trial is whether [Fernandez] had sufficient ... ...
  • Sifuentes v. Brazelton
    • United States
    • U.S. District Court — Eastern District of California
    • December 3, 2013
    ... ... Page, 182 F.3d 677 (9th Cir.1999) (en banc); United States v. Lorenzo, 995 F.2d 1448, 1453–54 (9th Cir.1993) (33 percent strike rate); United States v. Bishop, 959 F.2d 820, 826 (9th Cir.1992) (50 percent strike ... us to obey the laws of the land. What I mean by not judge people, the Bible says that you are not to judge one another, but at the same time it tells ... ...
  • U.S. v. Myers
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • August 6, 1997
    ... ... Goodwin, 57 F.3d 815, 818 (9th Cir.1995) (quoting United States v. Lorenzo, 995 F.2d 1448, 1453 (9th Cir.1993) (in turn quoting U.S. Dep't of Justice Manual § 1-1.100)). Additionally, any interest a target or subject may ... ...
  • 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