Wednesday, August 22, 2018

Paul Manafort Verdict - On Relevant Conduct

Donald Trump slams Michael Cohen, lauds Paul Manafort after twin legal blows

David R. Tillinghast, distinguished international tax lawyer of New York City, died on August 15, 2018. He was 88 years of age. Survived by his wife, Lisa Sewell Tillinghast (nee Mellion), step-son, Greg Sewell, daughter, Lauren Sewell Tillinghast, son-in-law, Stephen Wessley, and, grandson, Barrett Sewell. He was the first Special Treasury Assistant for International Affairs from 1962-1965. From 1999 until 2012 he was Partner, later Of Counsel, at Baker & McKenzie's New York office. In 1996, the New York University International Law School established an annual lecture series in his name. David will be missed by his family, friends, colleagues, and, many mentees.

Exempt: how Defence dodges the taxman Michael West Biz
‘Foreign military contractors have been awarded a staggering $73 billion in contracts, apparently tax-free, because successive governments have struck contracts directly with offshore companies’. See alsoDefence giants: the “Valley of Death” is really a Mountain of Moneyand Defence responds on weapons-grade tax leak

A whistleblower made this shocking allegation to me last week: the IRS was tipping off members of Congress to corporate takeovers so the elected officials could profit from insider trading.
My snitch also charged that higher-level employees of the IRS also used that information to enrich themselves.
This may sound crazy but remember: Up until a few years ago members of Congress were allowed to trade stock based on information they got while performing their public duties.
It wasn’t until 2012, during President Obama’s tenure, that the practice was banned.

Paul Manafort Verdict - On Relevant Conduct 

Paul Manafort has been found guilty of eight counts and could not reach a verdict on the remaining 10 counts.  The judge has declared a mistrial on those 10 counts.  The case will now proceed to sentencing on the 8 counts of conviction.  Before sentencing, there may be post-trial motions, including a motion for new trial on the counts of conviction.  The Government now has choice whether to re-try on the counts that were subject to mistrial.  

Focusing on the count of conviction.  I understand that the counts of conviction and their maximumsentences (by "stacking" the sentences for the counts of conviction) are:

Most readers of this blog will know that the maximum sentence amount is maximum possible.  The actual sentence is determined under the Sentencing Guidelines and the sentencing court's Booker discretion.   The Guidelines calculations generally (certainly in most tax cases even with nontax crimes of conviction), produces an indicated sentencing range much less than the maximum.  Readers should also recall that the judge should consider "relevant conduct" -- conduct other than the counts of conviction -- in calculating the Sentencing Guidelines range.  Thus, the judge can consider relevant conduct even if the conduct is: (i) uncharged, (ii) charged and dismissed (usually by plea agreement), (iii) charged but acquitted, or (iv) charged but subject to mistrial.  All the Government has to do to establish relevant conduct is prove the conduct by a preponderance of the evidence.  Thus, specifically, if Judge Ellis is convinced by a preponderance of the evidence that Manafort was guilty of the charges for which he declared a mistrial, the Sentencing Guidelines range will be exactly the same as if Manafort had been convicted of all counts (i.e., no counts were subject to mistrial).  (Some readers may want more on this so, I cut and text below some discussion on this.) 

For this reason, if the judge includes some or all of the mistried counts in the relevant conduct calculation, I can't see what the advantage would be for re-trying the mistried counts. 

The Manafort Trial - Judging the Judge's Conduct 

While there have been any number of pundits pontificating on the Manafort trial, I have not offered those pundits pontifications because I am not sure whether they really contribute much to the readers of this blog.  I do, however, offer this one by Nancy Gertner (Wikipedia here), who has been a private practitioner and federal judge and is now Harvard Law School professor.  She is quite accomplished.  And, she is well known to students of tax procedure for a leading case -- United States v. Gertner, 65 F.3d 963 (1st Cir. 1995), here -- I had tax procedure students read.  In that case, the IRS attempted to end-run the requirements for a John Doe Summons procedure by issuing a regular summons to her law firm.  I provide a discussion of that case at the end of this blog.  

I first offer her WAPO Opinion piece:  The extraordinary bias of the judge in the Manafort trial (WAPO 8/16/18), here

 Key excerpts 

The performance of U.S. District Court Judge T.S. Ellis III in the trial of Paul Manafort on bank fraud and tax evasion charges has been decidedly unusual.  

During the trial, Ellis intervened regularly, and mainly against one side: the prosecution. The judge's interruptions occurred in the presence of the jury and on matters of substance, not courtroom conduct. He disparaged the prosecution's evidence, misstated its legal theories, even implied that prosecutors had disobeyed his orders when they had not.  

Under the Code of Conduct for U.S. judges, a judge is supposed to be fair and impartial, as well as "patient, dignified, respectful and courteous" to those in his courtroom. The rule's concern is as much about the appearance of justice as its reality. If the judge violates that rule and a defendant is convicted, there may be a trial remedy — an appeal