Giving Fake Documents to USAO Supports GJ Obstruction Charge

US v. Sutherland: Sutherland “owned or operated several insurance businesses. He was alleged to have structured the flow of funds from the insurance businesses in a way as to avoid paying taxes, to the tune of unreported income of more than $2 million. After being served with a subpoena by the US Attorney’s Office, Sutherland’s attorney sent the USAO a letter explaining that the funds in question were actually loans and that there were “contemporaneously document by written and fully-executed loan agreements” that were attached to the letter. Sutherland was later indicted on three counts of filing false tax returns and one count of obstructing a grand jury investigation. Evidence at trial showed that the loan documents had been fabricated. Sutherland was convicted on all counts and sentenced to 33 months in prison.

On appeal, Sutherland’s main challenge was to his obstruction conviction. Specifically, he argued that Government had failed to prove the necessary nexus between the fake loan documents and an official proceeding, contending that he was only attempting to influence the US Attorney’s Office, not the grand jury. The court rejected that argument and affirmed the conviction. While an investigation by the USAO is not an “official proceeding” as required for an obstruction charge, it was still reasonably foreseeable that a grand jury proceeding would occur. That proceeding was “not some far-off possibility,” as the grand jury had convened at the time the fake documents were provided to the USAO. The court agreed with the Second Circuit that the “discretionary actions of a third person . . . can form the nexus to an official proceeding.”