Saturday, April 20, 2013

Two trial errors not reversible error in tax fraud case

US v. WoodsA grand jury charged Michael Woods with multiple counts of preparing and presenting false and fraudulent tax returns, wire fraud, identity theft and aggravated identity theft, in connection with his side business of preparing tax returns for private individuals (Woods worked full-time for the U.S. Department of Veterans’ Affairs  as a data warehouse manager). 

The government alleged that Woods added false information to his private customers’ tax returns in order to qualify them for substantial refunds.  Woods also allegedly listed non-existent dependents for some customers, for which he charged $500 in extra fees, by stealing names of false dependents from the VA computer system.   Woods represented himself at trial with stand-by counsel; after a four-day trial, a jury convicted him on all counts. 
Woods appealed several trial issues, two of which the Fourth Circuit determined to be errors:  1) that the government made an improper statement in closing argument, by stating that Woods lied under oath at trial about part of his fraud scheme; and 2) the district court improperly declined to issue a jury instruction about Woods’ good character.   Despite a finding that the government’s statement in closing was improper and that plain error results when the government statutes that a defendant has lied under oath at trial, the Fourth Circuit determined that the trial was not impacted by the improper statement, because a considerable portion of the government’s evidence directly contradicted Woods’ theory of defense.  Further, the government’s line of questioning a defense witness, in which Woods’ guilt was assumed for the purpose of influencing the content of the witness’s character testimony, and the district court’s decision not to give a good character jury instruction based on the tainted line of questioning, was similarly improper.  The Fourth Circuit concluded that the jury would have concluded that Woods was guilty with or without the jury instruction.  Ultimately, the two errors were not reversible error, and the Fourth Circuit affirmed the convictions. 

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