United States v. Patterson
| Decision Date | 28 May 2019 |
| Docket Number | CRIMINAL DOCKET No. 19-27 SECTION: "J"(3) |
| Parties | UNITED STATES OF AMERICA v. BRITTANY RIQUEL PATTERSON |
| Court | U.S. District Court — Eastern District of Louisiana |
Before the Court are a Motion to Dismiss Superseding Indictment (Rec. Doc. 46) and a Motion for an In Camera Inspection of the Grand Jury Minutes (Rec. Doc. 47) filed by Defendant, Brittany Patterson. The Government filed a consolidated opposition (Rec. Doc. 48) to which Patterson replied (Rec. Doc. 49). The Court heard oral argument on the motion to inspect on May 20, 2019. Considering the motions, the memoranda, the record, and the law, the Court finds the motions should be DENIED.
In 2012, Brittany Patterson was employed at a tax preparation business, Crown Tax Services, owned by Michegel Butler. The nature of Patterson's work at Crown is a matter of dispute. In May of 2015, Patterson was interviewed by IRS special agents regarding her work at several tax preparation entities, one of which was Crown.1 According to a memorandum of the interview2 Patterson told the agents she (inadvertently or not) gave Butler the idea to create his tax preparation business.3 She told the agents she performed clerical work at Crown, answering the phone, handing out intake sheets, and transporting customers—she was still learning how to prepare returns at the time.4 However, after Patterson connected Butler with her acquaintance, Dana Alverez, Alverez began working for Butler, and Patterson began to only provide referrals to Crown. Patterson said she received a commission for her referrals, at least at first. She said she referred over 60 people to Butler's tax preparation business. Patterson admitted to the agents that Butler allowed people to falsely state their income in their returns.
On February 15, 2019, a federal grand jury indicted Butler and Patterson for tax fraud.5 A few months later, on March 29, 2019, the Grand Jury returned a 14-count superseding indictment. Count 1 of the superseding indictment charges Butler and Patterson, with others, conspired together to defraud the United States for the purpose of impeding the IRS's lawful function as the assessor and collector of federal income taxes. The indictment alleges the conspirators perpetuated their scheme in part by falsely reporting clients' dependents, their income, and their expenses, by encouraging clients to buy or sell personal identification in order to falsely reportthose individuals as dependents, and by charging rates as high as $600 for tax returns, with their fee coming out of the return. See 18 U.S.C. § 371.6 Counts 2-10 of the superseding indictment are allegations that Butler willfully assisted in the fraudulent filing of U.S. Individual Income Tax Returns for the year 2012 for nine individuals. See 26 U.S.C. § 7206(2). Counts 11-14 charge Patterson similarly aided four individuals in filing false returns in 2012. See id. Not long after the superseding indictment was filed, Patterson filed her motions to dismiss the superseding indictment and to inspect grand-jury minutes.
The Federal Rules of Criminal Procedure allow a defendant to object that the indictment is defective because of its "failure to state an offense." Fed. R. Crim. Proc. 12(b)(3)(B)(v). "[A] pretrial motion to dismiss an indictment is not a permissible vehicle for addressing the sufficiency of the government's evidence." United States v. DeLaurentis, 230 F.3d 659, 660 (3d Cir. 2000). Thus, the Court "accepts as true the factual allegations set forth in the indictment." United States v. Besmajian, 910 F.2d 1153, 1154 (3d Cir. 1990) (citing Boyce Motor Lines v. United States, 342 U.S. 337, 343 n. 16 (1952)). Courts recognize that a defendant's untimely delay in raising this objection will result in a liberal construction of the indictment.7 United States v. Hathaway, 318 F.3d 1001, 1010 (10th Cir. 2003). Patterson's objection is timelythough, so the Court will use a "common sense construction." United States v. Hodge, 211 F.3d 74, 76 (3d Cir. 2000).
An indictment is a plain and concise written statement of the essential facts constituting the offense charged. Fed. R. Crim. Proc. 7(c)(1).
To be sufficient, an indictment must allege each material element of the offense; if it does not, it fails to charge that offense. This requirement stems directly from one of the central purposes of an indictment: to ensure that the grand jury finds probable cause that the defendant has committed each element of the offense, hence justifying a trial, as required by the Fifth Amendment. The starting place for any determination of whether the charged conduct is proscribed by a criminal statute is a reading of the language of the charging instrument and the statute itself.
United States v. White, 258 F.3d 374, 381 (5th Cir. 2001) (internal citations omitted). If the facts alleged do not constitute the elements of the charged offense, dismissal is appropriate. See id.
Patterson's second motion alleges the Government presented false information to the grand jury,8 asks the Court to inspect the grand-jury minutes in camera, and asks for dismissal of the entire superseding indictment with prejudice. Grand jury proceedings are kept secret with limited enumerated exceptions. Fed. R. Crim. Proc. 6(e)(2). Relevant here, Rule 6 provides, "The court may authorize disclosure . . . at the request of a defendant who shows that a ground may exist to dismiss the indictment because of a matter that occurred before the grand jury." Fed. R. Crim. Proc.6(e)(3)(E). The grounds for dismissing an indictment because of prosecutorial misconduct are extremely limited. "'Government misconduct does not mandate dismissal of an indictment unless it is so outrageous that it violates the principle of fundamental fairness under the due process clause'; such violations are found only in the rarest circumstances." United States v. Forte, 65 F. Appx 508 (5th Cir. 2003) (quoting United States v. Johnson, 68 F.3d 899, 902 (5th Cir. 1995)). To warrant dismissal of an indictment it is not enough that the Government presents false testimony to the grand jury; the defendant must show the Government presented false testimony knowing it to be false. Id. (citing United States v. Strouse, 286 F.3d 767, 773-74 (5th Cir. 2002).
Moreover, the burden on Patterson to show the alleged misconduct is severe. "[M]ere speculation that such improprieties may have occurred will not suffice to support that required showing." United States v. Budzanoski, 462 F.2d 443, 454 (3d Cir. 1972). The defendant bears a "heavy burden" to make a requisite showing necessary even for a hearing. 1 Charles Alan Wright & Andrew Leipold, Federal Practice and Procedure § 113 (4th ed. 2019); see, e.g., Beatrice Foods Co. v. United States, 312 F.2d 29, 37-39, (8th Cir. 1963) (). The "compelling necessity" to review grand-jury minutes must be "shown with particularity" by the defendant. United States v. Procter & Gamble Co., 356 U.S. 677, 682 (1958).
26 U.S.C. § 7206(2). Thus, under the fraudulent return statute, the Government must prove: "(1) each defendant aided, assisted, counseled, or advised another in the preparation of the tax return in question; (2) the tax return contained a statement falsely claiming income, deductions, or tax credits; (3) the defendant knew that the statement was false; (4) the false statement was material; and (5) [willfulness]." United States v. Morrison, 833 F.3d 491, 500 (5th Cir. 2016) (citing 26 U.S.C. § 7206(2)). Conspiracy to defraud the United States is codified under 18 U.S.C. § 371:
If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.
Courts break this conspiracy offense into three elements, requiring: (1) an agreement between the defendant and another person to pursue an unlawful objective; (2) the defendant's knowledge of the conspiracy's unlawful objective when she joined; and (3)an overt act in furtherance of the conspiracy committed by one of its members. United States v. Morrison, 833 F.3d 491, 499 (5th Cir. 2016).
Patterson claims she did not prepare or sign any fraudulent returns at Crown, train or supervise anyone at Crown, or own or operate Crown. Citing two Fifth Circuit cases considering the sufficiency of evidence used to convict individuals of conspiracy to defraud the IRS, Patterson argues that without allegations of this conduct, the superseding indictment must be dismissed.9 See United States v. Mendoza, 685 Fed. Appx. 345, 348 (5th Cir. 2017) (unpublished), Morrison, 833 F.3d at 500. In United States v. Morrison, the Fifth Circuit examined its precedents to determine what evidence is required to sustain a conviction under section 371 and section 7206(2). Morrison, 833 F.3d at 500-502. Considering the conspiracy charge first, the...
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