United States v. Gutierrez, No. CR 15-3955 JB

CourtUnited States District Courts. 10th Circuit. District of New Mexico
Docket NumberNo. CR 15-3955 JB
Decision Date31 May 2018


No. CR 15-3955 JB


May 31, 2018


THIS MATTER come before the Court on: (i) the Defendant Darryl J. Gutierrez' Motion for Instruction on Willfulness and Good Faith Element and For Production of Grand Jury Transcript, filed February 17, 2017 (Doc. 57)("Motion"); (ii) the Plaintiff United States of America's Motion In Limine to Exclude Defendant's Self-Serving Declarations as Inadmissible Hearsay, filed March 8, 2017 (Doc. 61)("Motion in Limine"); and (iii) Defendant Darryl Gutierrez's Brief in Support of Objection to Deliberate Ignorance Jury Instruction, filed March 28, 2017 (Doc. 82)("Trial Brief"). The Court held a hearing on March 13, 2017 regarding the Motion, a hearing regarding the Motion in Limine on March 22, 2017, and heard oral argument regarding the Trial Brief during trial on March 28, 2017 and March 29, 2017. The primary issues are: (i) whether Gutierrez is entitled to willfulness and good-faith instructions for 26 U.S.C. § 7206(1) offenses that Counts Two through Eleven of the Indictment charge; (ii) whether the Court should instruct the jury that "corruptly" for purposes of 26 U.S.C. § 7212(a) means that the defendant acted knowingly and dishonestly with the specific intent to subvert or undermine the due administration of the revenue laws; (iii) whether the Court should give a deliberate-ignorance instruction for Count 1; (iv) whether the United States must provide,

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before trial, Grand Jury transcripts to Gutierrez, so that Gutierrez can challenge the Indictment before trial; and (v) whether the Court should exclude as inadmissible hearsay statements that Gutierrez made that express his disagreements with the United States' tax laws.

The Court concludes that, under United States Court of Appeals for the Tenth Circuit precedent, Gutierrez is entitled to a willfulness instruction and also a good faith instruction, but only the latter if Gutierrez testifies at trial. Similarly, Tenth Circuit caselaw indicates that corruptly is properly defined above. The Court concludes that a willful blindness instruction is inappropriate, because the evidence adduced at trial demonstrates that Gutierrez did not try to avoid learning that his tax-evasion strategies were criminal. Rather, Gutierrez knew that those strategies were criminal, but employed them anyway. The United States does not need to produce Grand Jury transcripts to Gutierrez expect as to what the Jencks Act, 18 U.S.C. § 3500, Brady v. Maryland, 373 U.S. 83 (1963), and Giglio v. United States, 405 U.S. 150 (1972), require, because Gutierrez has not shown that his transcript is anything more than a fishing expedition. Finally, the Court reserves the majority of its hearsay rulings, because Gutierrez has not identified specific statements for the Court to consider. It notes, however, that some of Gutierrez' statements about his tax beliefs may be admissible for purposes other than their truth, e.g., as circumstantial evidence regarding Gutierrez' mental state. The Court concludes, nevertheless, that statements Gutierrez made to Heather Howard -- a Department of Energy contractor -- during a security-clearance interview are not admissible under the rule of completeness. Accordingly, the Court: (i) grants the Motion in part and denies it in part; (ii) grants the Motion in Limine in part and denies it in part; and (iii) grants the requests in the Trial Brief.

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The Court takes its facts from the Indictment, filed November 5, 2015 (Doc. 2)("Indictment"). The Court does not set forth these facts as findings or the truth. The Court recognizes that the Indictment is largely the United States' version of events and that Gutierrez is presumed innocent.

From 2000 through 2009, Gutierrez filed federal income tax returns seeking tax refunds in the amount of $173,526.00. See Indictment ¶ 1, at 1. Gutierrez, however, was not entitled to that tax refund; instead, he owed $125,624.00 in federal taxes. See Indictment ¶ 1, at 1. Gutierrez also falsified his W-4 forms for many years seeking exemption from federal income tax withholding. See Indictment ¶¶ 11-15, at 2-3. He also falsified his 1040 forms from 2000 to 2009 by asserting that he had no wage income, whereas he had a wage income and knew of that wage income. See Indictment at 5-9. From 2011 through 2013, Gutierrez sent various notices to the Internal Revenue Service ("IRS") stating that he is not subject to federal income tax or liable for the penalties that the IRS assessed against him, because he is not a "taxpayer." Indictment ¶¶ 19-25, at 4-5.


On November 5, 2015, a Grand Jury returned an eleven-count indictment against Gutierrez. See Indictment at 1-9. On December 2, 2015, Gutierrez was arrested and arraigned before the Honorable Steven C. Yarbrough, United States Magistrate Judge for the United States District Court for the District of New Mexico. See Clerk's Minutes before Magistrate Judge Steven C. Yarbrough at 1, filed December 2, 2015 (Doc. 5). He pled not guilty. See Clerk's

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Minutes before Magistrate Judge Steven C. Yarbrough: Arraignment/Detention as to Darryl J Gutierrez at 1, filed December 3, 2015 (Doc. 9).

1. The Motion.

Gutierrez argues that he is entitled to a jury instruction on willfulness and on good faith vis-à-vis the 26 U.S.C. § 7206(1) violations that Counts 2-11 charge. See Motion at 1. According to Gutierrez, "as one of the specific elements of the crime," the United States must demonstrate "the specific intent of willfulness." Motion at 2 (citing Cheek v. United States, 498 U.S. 192, 200-01 (1991)("Willfulness is a voluntary, intentional violation of a known legal duty.")). He argues that, accordingly, he is also entitled to a "good faith" instruction, which "defeats the willfulness intent element." Motion at 2. Gutierrez contends that he will testify, "and present his good faith and genuinely held belief" that, for a variety of reasons, the United States cannot tax him. Motion at 2-3.

Gutierrez also requests that the Court order the United States to produce Grand Jury transcripts, "so that Mr. Gutierrez may determine whether the government instructed the [grand] jury on the elements of willfulness and its corollary, good faith." Motion at 6. He also argues that the Court should order the United States to produce the Grand Jury transcripts "as early Jencks material," so that Gutierrez can challenge the indictment pre-trial. Motion at 6. Gutierrez contends that he "establishes a particularized need" for pretrial access to these transcripts, because, if he does not receive them before trial he will not be able to challenge the indictment on the ground that the United States improperly instructed the grand jurors on willfulness and on good faith, nor will Gutierrez be able to mount a statute of limitations defense for Count 1. See Motion at 6-7 n.1.

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2. The Response.

The United States responds that it does not object to a willfulness instruction, nor does it object to a good faith instruction, "should the evidence at trial and the law support such an instruction." United States' Response to Defendant's Motion for Instruction on Willfulness and Good Faith Element and for Production of Grand Jury Transcript at 1, 3, filed March 3, 2017 (Doc. 58)("Response"). The United States notes that the Tenth Circuit pattern jury instruction for 26 U.S.C. § 7206(1) contains the willfulness instruction from Cheek v. United States, and that it would not object to that instruction. See Response at 4. See also Cheek v. United States, 498 U.S. at 200-01 (defining willfulness as a "voluntary, intentional violation of a known legal duty."). The United States mentions that the Supreme Court of the United States and the Tenth Circuit "have long recognized" that good faith negates the willful element in tax offenses. See Response at 4 (citing United States v. Collins, 920 F.2d 619, 622 (10th Cir, 1990)("[A] good faith misunderstanding of the duty to pay income taxes can negate the willfulness element.")). The United States remarks that it and Gutierrez appear to be in general agreement "as to the applicable legal principles," but it argues that the Motion should be denied as premature or held in abeyance until trial, because "if the defendant elects not testify, as is his constitutional right," the good faith instruction "becomes moot." Response at 5.

The United States also responds that Gutierrez is not entitled to the Grand Jury transcripts, for two reasons. See Response at 11. First, the United States contends that Gutierrez has not established a particularized need for those transcripts, because that Gutierrez alleges that he needs the transcripts to know if the United States properly instructed the Grand Jury on willfulness and on good faith, but does not provide evidence indicating that the Grand Jury's

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instructions were improper. See Response at 11-13 (citing Fed. R. Crim. P. 6(e)). The United States adds that, even if there is an error in instructing the Grand Jury, that would not "necessarily support a challenge to the indictment." Response at 13 (citing United States v. Buchanan, 787 F.2d 477, 487 (10th Cir. 1986)). See United States v. Buchanan, 787 F.2d at 487 ("Challenges only to the instructions given to the grand jury as to the elements of the offense are not grounds for dismissal of an indictment that is valid on its face.").

Second, the United States argues that the Court should reject the other ground upon which Gutierrez requests the transcripts -- as early Jencks material -- because the Jencks Act requires disclosure only after a witness testifies on direct examination. See Response at 14-15. The United States asserts that a stunning amount of caselaw supports its position. See Response at 15. The United States concludes, however, that it anticipates...

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