U.S. v. Stierhoff, CR No. 06-042-ML.

CourtUnited States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island
Writing for the CourtLisi
PartiesUNITED STATES of America v. Neil STIERHOFF, Defendant.
Docket NumberCR No. 06-042-ML.
Decision Date03 August 2007
500 F.Supp.2d 55
UNITED STATES of America
v.
Neil STIERHOFF, Defendant.
CR No. 06-042-ML.
United States District Court, D. Rhode Island.
August 3, 2007.

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Thomas G. Voracek, John N. Kane, U.S. Dept. of Justice-Tax Division, Washington, DC, for Plaintiff.

Alan S. Richey, Port Hadlock, WA, Scott A. Lutes, Providence, RI, for Defendant.

MEMORANDUM AND ORDER

LISI, Chief Judge.


Following a seven-day jury trial, Defendant Neil Stierhoff ("Defendant") was found guilty on four counts of tax evasion pursuant to 26 U.S.C. § 7201. Prior to trial, Defendant moved to dismiss his indictment under Fed.R.Crim.P. 12(b)(3)(B). At the close of evidence offered by the government at trial, Defendant also moved for a judgment of acquittal pursuant to Fed.R.Crim.P. 29, a new trial pursuant to Fed.R.Crim.P. 33, and a mistrial.1 For the reasons set forth below, Defendant's motions are denied.

I. Motion to Dismiss the Indictment

The Federal Rules of Criminal Procedure provide that an indictment "shall be a plain, concise and definite written statement of the essential facts constituting the offense charged." Fed.R.Crim.P. 7(c)(1). The Supreme Court has "identified two constitutional requirements for an indictment: `first, [that it] contains the elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and, second, [that it] enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense.'" United States v. Resendiz-Ponce, ___ U.S. ___, ___, 127 S.Ct. 782, 788, 166 L.Ed.2d 591 (2007) (quoting Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974)). "It is generally sufficient that an indictment set forth the offense in the words of the statute itself, as long as `those words of themselves fully, directly, and expressly, without any uncertainty or ambiguity, set forth all the elements necessary to constitute the offence intended to be punished.'" Hamling, 418 U.S. at 117, 94 S.Ct. 2887 (quoting United States v. Carll, 105 U.S. 611, 612, 15 Otto 611, 26 L.Ed. 1135 (1882)); see United States v. Cianci, 378 F.3d 71, 81 (1st Cir.2004). Simply put, "[t]he indictment should be specific enough to notify the defendant of the nature of the accusation against him and to apprise the court of the facts alleged." United States v. Brown, 295 F.3d 152, 154 (1st Cir.2002) (citing Russell v. United States, 369 U.S. 749, 766-68, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962)).

Defendant was charged with four counts of tax evasion pursuant to 26 U.S.C. § 7201. Section 7201 provides that "[a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony.... 26 U.S.C. § 7201". Count One of the indictment alleges:

That during the calendar year 1999, the defendant, NEIL STIERHOFF, a resident of Providence, Rhode Island, had and received taxable income in the sum of approximately $193,246; that upon said taxable income there was owing to the United States of America a substantial income tax; that well knowing and believing the foregoing facts, the defendant NEIL STIERHOFF, on or about April 17, 2000, in the District of Rhode Island, did willfully attempt to evade

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and defeat the said income tax due and owing by him to the United States of America for said calendar year by failing to make an income tax return on or before April 17, 2000, as required by law, to any proper officer of the Internal Revenue Service, by failing to pay the Internal Revenue Service said income tax, and by committing the following acts: conducting business under the name of Joseph Adams, using a post office box in the name of Universal Audio to receive business receipts, utilizing a bank account in the name of Joseph Adams in order to deposit his business receipts, and using extensive cash.

In violation of Title 26, United States Code, Section 7201.

Counts Two, Three, and Four are virtually identical to Count One, but charge Defendant with receiving taxable income of $422,620, $345,967, and $145,006 for the years 2000, 2001, and 2002, respectively.

In his motion to dismiss, Defendant claims that the indictment fails to adequately apprise him of the elements of tax evasion, including willfulness, a tax deficiency, and an affirmative act of evasion. Defendant also argues that the indictment is deficient because it fails to set forth the statutory authority that imposes the legal duty to file an income tax return or pay an income tax. Finally, Defendant contends that the indictment is duplicitous because it charges Defendant with evading both the "assessment" and the "payment" of a tax. Accordingly, Defendant asks this Court to dismiss the indictment with prejudice.

1. Elements of the Offense

The government argues that the indictment is sufficient because it tracks the language of the statute and includes all of the elements of the offense. In order to convict a defendant for tax evasion, the government must show (1) willfulness, (2) the existence of a tax deficiency, and (3) an affirmative act constituting an evasion or attempted evasion of the tax. Sansone v. United States, 380 U.S. 343, 351, 85 S.Ct. 1004, 13 L.Ed.2d 882 (1965); see United States v. George, 448 F.3d 96, 98 n. 2 (1st Cir.2006) (same); United States v. Lavoie, 433 F.3d 95, 97 (1st Cir.2005) (same); 26 U.S.C. § 7201.

A. Willfulness

Defendant argues that the indictment fails to properly allege the statutory element of willfulness. Although the indictment states that Defendant "willfully attempt[ed] to evade and defeat" his income taxes, Defendant maintains that the government was required to allege, inter alia, that he had actual knowledge of "the specific provision of the tax code that he was charged with violating." Bryan v. United States, 524 U.S. 184, 194, 118 S.Ct. 1939, 141 L.Ed.2d 197 (1998).

The general rule is that ignorance of the law or a mistake of law is no defense to criminal prosecution. Cheek v. United States, 498 U.S. 192, 199, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991) ("Based on the notion that the law is definite and knowable, the common law presumed that every person knew the law."). The Supreme Court has explained, however, that:

[t]he proliferation of statutes and regulations has sometimes made it difficult for the average citizen to know and comprehend the extent of the duties and obligations imposed by the tax laws. Congress has accordingly softened the impact of the common-law presumption by making specific intent to violate the law an element of certain federal criminal tax offenses.

Cheek, 498 U.S. at 199-200, 111 S.Ct. 604. Thus, the term "willfully" has been construed

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as "a voluntary, intentional violation of a known legal duty." United States v. Bishop, 412 U.S. 346, 360, 93 S.Ct. 2008, 36 L.Ed.2d 941 (1973); see Cheek, 498 U.S. at 200, 111 S.Ct. 604; United States v. Pomponio, 429 U.S. 10, 12, 97 S.Ct. 22, 50 L.Ed.2d 12 (1976); Lavoie, 433 F.3d at 98. More specifically, willfulness "requires the [g]overnment to prove that the law imposed a duty en the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty." Cheek, 498 U.S. at 201, 111 S.Ct. 604.

According to Defendant, therefore, the term "willful," as it is used in the indictment, is too vague to allege that he intended to violate, a known legal duty. The Court, however, disagrees. The term "willfulness" is not vague, but is a term of art with a known meaning for tax defendants, i.e., the intentional violation of a known legal duty. See United States v. Whistler, 139 Fed.Appx. 1, 1 (9th Cir.2005) (unpublished). Defendant's argument is flawed because it fails to distinguish between what the government must allege in an indictment and what it must prove at trial. Defendant is correct in asserting that the government must prove at trial that he voluntarily and intentionally violated a known legal duty; Defendant, however, points this Court to no authority that requires the government to allege every component of the willfulness requirement in an indictment. Because the term "willfulness" has a known meaning, therefore, the indictment sufficiently apprised Defendant of the charges lodged against him.

B. Tax Deficiency

The indictment alleges that Defendant "had and received taxable income" and "that upon said taxable income there was owing to the United States of America a substantial income tax." The indictment also states that Defendant willfully attempted to evade and defeat the "income tax due and owing by him to the United States of America." Notwithstanding these express allegations, Defendant argues that the indictment fails to allege a "tax deficiency." Defendant maintains that in the absence of a signed return by a taxpayer, the government must show that the IRS has made a valid assessment of taxes owed before there can be a tax deficiency. This argument is simply incorrect.

"[A] tax deficiency ... exists from the date a return is to be filed and ... arises by operation of law when the return is not filed." United States v. Hogan, 861 F.2d 312, 316 (1st Cir.1988); see United States v. Daniel, 956 F.2d 540, 542 (6th Cir.1992); United States v. Back, 747 F.2d 1172, 1174 (7th Cir.1984); United States v. Voorhies, 658 F.2d 710, 714 (9th Cir.1981). "As long as the tax is `due and owing' in this manner, no formal assessment is necessary." United States v. Russell, 998 F.2d 1001, 1993 WL 279077, *1 (1st Cir.1993) (unpublished) (citing Hogan, 861 F.2d at 315); see United States v. Washington, 947 F.Supp. 87, 91-92 (S.D.N.Y.1996). Accordingly, because it alleges that Defendant did not file a return and had a substantial income tax "due and owing," the indictment properly alleges a tax deficiency.

Defendant...

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3 practice notes
  • United States v. Stierhoff, CR. No. 06-0042 ML
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island
    • November 30, 2011
    ...need not make an assessment of taxes owed and demand for payment in order to show a taxPage 20deficiency. United States v. Stierhoff, 500 F. Supp. 2d 55 (D.R.I. 2007) ("Stierhoff II"). aff'd, Stierhoff III, 549 F.3d 19. "[A] tax deficiency . . . exists from the date a return is to be filed ......
  • U.S. v. Stierhoff, No. 08-1183.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • December 1, 2008
    ...See Fed.R.Crim.P. 33. The district court denied all the motions in an erudite rescript. See United States v. Stierhoff (Stierhoff III), 500 F.Supp.2d 55, 72 (D.R.I.2007). For the most part, the details of those motions are unimportant; the majority of the legal theories on which they rested......
  • Maldonado-Torres v. United States, CIVIL NO. 14-1374(PG)
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • July 29, 2016
    ...must show that it is uncertain whether defendant was convicted of the conduct charged by a grand jury. See United States v. Stierhoff, 500 F. Supp. 2d 55, 69 (D.R.I. 2007), aff'd, 549 F.3d 19 (1st Cir. 2008). A constructive amendment is considered per se prejudicial, and, as such, warrants ......
3 cases
  • United States v. Stierhoff, CR. No. 06-0042 ML
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island
    • November 30, 2011
    ...need not make an assessment of taxes owed and demand for payment in order to show a taxPage 20deficiency. United States v. Stierhoff, 500 F. Supp. 2d 55 (D.R.I. 2007) ("Stierhoff II"). aff'd, Stierhoff III, 549 F.3d 19. "[A] tax deficiency . . . exists from the date a return is to be filed ......
  • U.S. v. Stierhoff, No. 08-1183.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • December 1, 2008
    ...See Fed.R.Crim.P. 33. The district court denied all the motions in an erudite rescript. See United States v. Stierhoff (Stierhoff III), 500 F.Supp.2d 55, 72 (D.R.I.2007). For the most part, the details of those motions are unimportant; the majority of the legal theories on which they rested......
  • Maldonado-Torres v. United States, CIVIL NO. 14-1374(PG)
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • July 29, 2016
    ...must show that it is uncertain whether defendant was convicted of the conduct charged by a grand jury. See United States v. Stierhoff, 500 F. Supp. 2d 55, 69 (D.R.I. 2007), aff'd, 549 F.3d 19 (1st Cir. 2008). A constructive amendment is considered per se prejudicial, and, as such, warrants ......

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