United States v. Moran ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee, No. 05-30215
v.  D.C. No.
CR-02-00423-007-
JAMES MORAN, JCC
Defendant-Appellant.

UNITED STATES OF AMERICA,  No. 05-30226
Plaintiff-Appellee, D.C. No.
v.  CR-02-00423-006-
PAMELA MORAN, JCC
Defendant-Appellant.
 OPINION
Appeal from the United States District Court
for the Western District of Washington
John C. Coughenour, Chief District Judge, Presiding
Argued and Submitted
December 4, 2006—Seattle, Washington
Filed April 2, 2007
Before: Betty B. Fletcher and M. Margaret McKeown,
Circuit Judges, and William W Schwarzer,* District Judge.
Per Curiam Opinion
*The Honorable William W Schwarzer, Senior United States District
Judge for the Northern District of California, sitting by designation.
3749
UNITED STATES v. MORAN 3753
COUNSEL
Sheryl Gordon McCloud, Law Offices of Sheryl G. McCloud,
Seattle, Washington; Peter Mair, Seattle, Washington, Walter
G. Palmer, Seattle, Washington, for defendants-appellants
Grosnickle, James Moran and Pamela Moran; Ronald D.
Ness, CJA, Port Arthur, Washington, for defendant-appellant
Wayne S. Anderson.
Gregory Victor Davis and Alan Hechtkopf, Attorneys, Tax
Division, Department of Justice, Washington, D.C., for the
plaintiff-appellee.
OPINION
PER CURIAM:
Pamela and James Moran appeal their convictions of con-
spiracy to defraud the United States (18 U.S.C. § 371), con-
spiracy to commit wire and mail fraud (18 U.S.C. § 371),
aiding and assisting in the preparation and filing of false fed-
eral income tax returns (26 U.S.C. § 7206(2)), mail fraud (18
U.S.C. § 1341), and wire fraud (18 U.S.C. § 1343). They con-
tend that the district court erred in four ways: (1) by allowing
expert testimony that certain financial transactions were
“shams”; (2) by giving allegedly improper Pinkerton instruc-
tions to the jury; (3) by admitting codefendant Wayne Ander-
son’s computer records as coconspirator statements;1 and (4)
by excluding Mrs. Moran’s testimony regarding outside
expert opinions she had received about the legality of the
Morans’ tax schemes. We find no error in allowing the expert
testimony, admitting the computer records, or in the jury
instructions. However, because the district court erroneously
1
Karolyn Grosnickle, who filed joint briefs with the Morans in this
appeal, joined in the first three arguments. Mrs. Grosnickle has since with-
drawn her appeal, and so is not included in this opinion.
3754 UNITED STATES v. MORAN
excluded Mrs. Moran’s testimony as hearsay and did not pro-
vide a reasoned basis for excluding it under Federal Rule of
Evidence 403, and because this testimony would have com-
prised a critical element of the Morans’ good faith defense,
we reverse and remand for a new trial.
FACTUAL AND PROCEDURAL HISTORY
Anderson’s Ark and Associates (AAA) offered clients sev-
eral forms of “tax reduction plans” (according to the govern-
ment, offshore money laundering plans), and promoted these
plans in public seminars. Appellants Pamela and James
Moran were the “Executive Education Officers” who trained
the AAA sales force.
AAA offered several programs to customers who had paid
for and successfully completed the membership application
process. The “Sociedads Anonima” (SA) program allegedly
provided Costa Rican corporate entities through which to pass
United States funds. The “Look Forward Partnership” pro-
gram allegedly allowed clients to take tax deductions on
money invested in the SAs and subsequently repatriate the
money tax-free by paying for nonexistent services. The “Look
Back Joint Venture” program allegedly provided a tax shelter
by generating fictitious losses as part of fictitious loans to
Costa Rican corporations which were ostensibly going to
develop and market a “Tax Magic” program. Finally, the
“Loan 4” plan, while marketed as a way to earn tax-free
returns on the funds clients had transferred to Costa Rica,
allegedly was actually a Ponzi scheme.
On December 10, 2002, December 4, 2003, and August 11,
2004, the United States filed initial, first, and second super-
seding indictments against Pamela Moran, James Moran, and
eight other defendants. The Morans were indicted on numer-
ous counts of conspiracy, wire and mail fraud, aiding and
assisting in the preparation and filing of false federal income
UNITED STATES v. MORAN 3755
tax returns, and other substantive offenses related to the con-
spiracies.
At trial, the court sustained the government’s hearsay
objection to Mrs. Moran’s testimony about what her CPA had
told her concerning filing statements in place of Form 1040
with the IRS; in sustaining the objection, the court also cited
Federal Rule of Evidence 403. On a later occasion, after the
government had cross-examined Mrs. Moran about a letter
she had seen from an outside lawyer expressing concerns
about the AAA tax program, defense counsel on redirect
asked Mrs. Moran whether anybody else had given her a legal
opinion about the tax program. Again, the court sustained the
government’s objection on hearsay and Rule 403 grounds.
As part of the government’s case, an expert testified that
the AAA programs involved “sham” transactions. The term
“sham” was also used as part of the jury instructions on the
counts involving assistance in filing false tax returns. The
judge also gave the jury Pinkerton instructions, stating that
they could convict one defendant of the substantive crime of
a coconspirator if the crime was committed in furtherance of
that conspiracy. Finally, over objection, Wayne Anderson’s
computer records were admitted under Federal Rule of Evi-
dence 801, which exempts co-conspirator statements from the
hearsay rule.
On December 27, 2004, following a thirty-seven day jury
trial, Pamela and James Moran were convicted on thirty-six
counts each, including the conspiracy counts. This timely
appeal followed.
DISCUSSION
I. “SHAM” TRANSACTION TESTIMONY
Appellants contend that by testifying that the Look Forward
program was “a sham,” Professor Sherman offered an imper-
3756 UNITED STATES v. MORAN
missible legal conclusion and vouched for the credibility of
certain witnesses. They also argue that the “sham” transaction
instruction improperly provided a nonstatutory basis for con-
viction. Neither of these arguments has merit.
[1] Generally, an expert can testify on an ultimate issue in
a case, except regarding the requisite mental state of the
defendant or a condition constituting an element of or defense
to the crime. Fed. R. Evid. 704. However, “an expert witness
cannot give an opinion as to her legal conclusion, i.e., an
opinion on an ultimate issue of law. Similarly, instructing the
jury as to the applicable law is the distinct and exclusive prov-
ince of the court.” Hangarter v. Provident Life and Accident
Ins. Co., 373 F.3d 998, 1016 (9th Cir. 2004) (internal quota-
tion and citation omitted). As appellant objected to the testi-
mony before and during trial, “[w]e review a district court’s
decision to admit expert testimony for abuse of discretion.”
United States v. Perlaza, 439 F.3d 1149, 1175 n.29 (9th Cir.
2006).
[2] The “sham” testimony related to the second element of
the offense: that “the return was false as to something that
was necessary to a determination of whether income tax was
owed.” Thus, the word “sham” does not address a legal con-
clusion. Under the judge’s instructions, even if the transac-
tions were a sham, “the jury would still have had to draw its
own inference from that predicate testimony to answer the
ultimate factual question,” of whether income tax was owed.
See United States v. Morales, 108 F.3d 1031, 1037 (9th Cir.
1997). While use of an expert’s term in the jury instructions
may not have been ideal, it was not erroneous.
Appellants also argue that by testifying that the Look For-
ward program was fraudulent, contrary to the testimony of
some clients who believed that the transactions were real, Pro-
fessor Sherman improperly vouched for the veracity of gov-
ernment witnesses.
UNITED STATES v. MORAN 3757
It is misconduct for a prosecutor to elicit comments on the
veracity of witnesses or the guilt of the defendant. See, e.g.,
United States v. Combs, 379 F.3d 564, 572 (9th Cir. 2004)
(finding error where prosecutor asked defendant to testify that
government agent was lying); United States v. Henke, 222
F.3d 633, 642 (9th Cir. 2000) (finding that admission of testi-
mony that defendants “must have known” of misconduct was
erroneous). Nothing of the sort occurred here; Sherman never
referred to a single witness or discussed the veracity of wit-
nesses generally. That an expert reaches a conclusion that
either agrees with or conflicts with that of a witness whose
testimony he incorporated into his conclusions, does not with-
out more constitute vouching. There was no error.
[3] Finally, appellants argue that the instruction defining
“sham” transactions was untethered to any element or particu-
lar crime, and allowed the jury to convict defendants without
finding the elements of a crime. When assessing jury instruc-
tions, we examine them “as a whole, and in context.” United
States v. Stapleton, 293 F.3d 1111, 1114 (9th Cir. 2002). The
instruction complained of merely defined a sham transaction;
it did not state that such a transaction standing alone is a basis
for conviction. Read in context with the instructions as a
whole, it provided guidance to the jury in determining
whether the AAA program could provide a valid tax deduc-
tion which, in turn, led to the determination whether the
income tax returns were false. There was no error.
II. Pinkerton INSTRUCTIONS
[4] The Morans argue that the district court’s conspiracy
instructions, based on Pinkerton v. United States, 328 U.S.
640 (1946), allowed the jury to convict one defendant of a
substantive crime committed by another defendant, even
when that crime was not part of a conspiracy in which both
defendants took part. Under Pinkerton, a defendant may be
found guilty of a substantive crime committed by a cocon-
spirator in furtherance of their conspiracy. Id. at 646-47. In
3758 UNITED STATES v. MORAN
the absence of a timely objection to the jury instructions, we
review for plain error. See United States v. Sanders, 421 F.3d
1044, 1050 (9th Cir. 2005). In evaluating jury instructions,
“[w]e consider how the jury would have reasonably under-
stood the challenged instruction in the context of the instruc-
tions as a whole.” United States v. Warren, 25 F.3d 890, 897
(9th Cir. 1994) (citing Francis v. Franklin, 471 U.S. 307, 315
(1985)).
The jury instructions in question (as read by the district
judge) were as follows:
Each member of the conspiracy is responsible for the
actions of the other conspirators performed during
the course and in furtherance of the conspiracy. If
one member of a conspiracy commits a crime in fur-
therance of the conspiracy, the other members have
also, under the law, committed the crime.
...
Therefore, you may find a defendant guilty of one or
more of the substantive counts alleged in the indict-
ment if the government has proved each of the fol-
lowing elements beyond a reasonable doubt:
A person named in a substantive count of the indict-
ment committed the crime alleged in that count.
The same person was a member of the conspiracy
charged in counts 1, 2 or 98.
The person committed the substantive crime in fur-
therance of the conspiracy charged in counts 1, 2 or
98.
The defendant was a member of the conspiracy
charged in counts 12 [sic] or 98 at the time the
UNITED STATES v. MORAN 3759
offense charged in the substantive count was com-
mitted by the other person.
And the conduct constituting the substantive count
fell within the scope of the unlawful agreement and
could reasonably have been foreseen to have been a
necessary or natural consequence of the unlawful
agreement.
Appellants contend that, using only the elements listed, one
defendant could be convicted of a second defendant’s sub-
stantive crime if the two were involved in a separate conspir-
acy which did not involve that particular crime.
[5] While a careful picking apart of the instructions’ word-
ing does reveal minor ambiguity, when read in its entirety, the
instructions were clear and did not permit such an improper
conviction. The first paragraph lays out the point of the
instruction: that if one member of a conspiracy commits a
crime in furtherance of the conspiracy, the other members can
be found liable of that crime. Thus, while the wording of the
individual instructions may not have been perfect when exam-
ined under a microscope, when read as a whole it would have
been clear to a jury that before it could convict a defendant
of a substantive count committed by a codefendant, it had to
find that the conduct underlying that count fell within the
scope of a conspiracy of which both defendants were mem-
bers and was reasonably foreseeable under the conspiracy.
There was no error.
III. ADMISSION OF COMPUTER RECORDS
Over objection, the district court admitted as coconspirator
statements testimony and related exhibits regarding the
Quickbooks financial data recovered from Wayne Anderson’s
computer. Appellants contend that the admission of these
records against them was error because the records were not
kept in furtherance of the conspiracy.
3760 UNITED STATES v. MORAN
[6] “We review for an abuse of discretion the district
court’s decision to admit coconspirators’ statements, and
review for clear error the district court’s underlying factual
determinations that a conspiracy existed and that the state-
ments were made in furtherance of that conspiracy.” United
States v. Shryock, 342 F.3d 948, 981 (9th Cir. 2003) (citing
United States v. Bowman, 215 F.3d 951, 960 (9th Cir. 2000)).
When offered against a party, “a statement by a coconspirator
of a party during the course and in furtherance of the conspir-
acy” is not barred by the hearsay rule. Fed. R. Evid.
801(d)(2)(E); Bowman, 215 F.3d at 960-61 (citing Bourjaily
v. United States, 483 U.S. 171, 175 (1987)).
[7] Appellants argue that Anderson was keeping the books
for his own purposes, not in furtherance of a conspiracy.
Statements made for personal objectives outside the conspir-
acy or as part of idle conversation are not admissible under
Rule 801(d)(2)(E). See, e.g., United States v. Bibbero, 749
F.2d 581, 584 (9th Cir. 1984) (holding statements in idle con-
versation inadmissible). However, “statements made to keep
coconspirators abreast of an ongoing conspiracy’s activities
satisfy the ‘in furtherance’ of requirement.” United States v.
Yarbrough, 852 F.2d 1522, 1536 (9th Cir. 1988).
[8] The district court determined that the government had
shown by a preponderance of the evidence that the computer
records were statements by Wayne Anderson in furtherance of
the conspiracy. The computer was seized from a home
belonging to Anderson. Access to the computer was protected
with a password. At least one account was in Anderson’s
name. The computer contained numerous documents relating
to AAA, including a Quickbooks database reflecting financial
data about the various AAA principals, clients and programs.
Taken together, these facts tend to show that the computer
records were used to keep track of transactions which were a
part of AAA’s fraudulent schemes; as the district court
observed, “[I]n any conspiracy that involves complex finan-
UNITED STATES v. MORAN 3761
cial transactions, it is in furtherance of the conspiracy to
maintain a record of those transactions.”
[9] While appellants offered evidence that the records were
inaccurate, suggesting that they were meant to deceive, not
inform Anderson’s coconspirators, which would render them
inadmissible, they have not demonstrated clear error in find-
ing them to be coconspirators’ statements.
[10] Finally, the alleged evidence of inaccuracies in the
computer records does not affect their admissibility, but
merely goes to their weight. See Bourjaily, 483 U.S. at 183
(“[A] court need not independently inquire into the reliability
of [coconspirator] statements.”). The district court did not err
in admitting the Quickbooks data.
IV. MRS. MORAN’S TESTIMONY
The Morans argue that by excluding Mrs. Moran’s testi-
mony about advice she received from outside financial and
legal experts, the district court committed reversible error.
Mrs. Moran’s principal defense was that she held a good faith
belief that the tax programs in which she participated were
legal. She contends that her belief was based, among other
things, on opinions from a CPA and outside experts. The dis-
trict court sustained objections to her testimony about what
she had been told on grounds of hearsay and Rule 403.2
On two occasions during the trial, the district court
excluded testimony by Mrs. Moran about what she had
learned from outside experts. On the first occasion, she started
to testify what the CPA preparing her statements to the IRS
2
Rule 403 states: “Although relevant, evidence may be excluded if its
probative value is substantially outweighed by the danger of unfair preju-
dice, confusion of the issues, or misleading the jury, or by considerations
of undue delay, waste of time, or needless presentation of cumulative evi-
dence.”
3762 UNITED STATES v. MORAN
had told her. When the prosecution objected to “hearsay,” the
court sustained the objection and added, “That’s a 403 analy-
sis . . . that the probative value is outweighed by the potential
for prejudice.”3
The second exchange occurred following the cross-
examination of Mrs. Moran, during which the government
3
The first exchange was as follows:
Q. (By Ms. Costello [defense counsel for Mrs. Moran]) Did you
at some point file statements with the IRS? Could you just
tell the jury what you did?
A. Yes, we did. After we had realized that this is not helping
us at all not to be filing tax returns at all, we did receive fur-
ther information that to file a statement according to code
section 601(12), I believe, that that is what you should do
rather than filing a form 1040. And just declare that you are
someone who is not required to pay the income tax. And
attach to that statement all the authorities cited stating why
you believe that you sincerely are not someone who would
be eligible to file a tax.
Q. And what years did you do that?
A. We did that for 19 — I did that for 1995, ’96 and ’97. And
then 2001, 2002.
...
Q. And you mentioned receiving income from your SA?
A. Yes.
Q. Why didn’t you put that on the statement in lieu of a tax
return?
A. The CPA preparing those statements for us told us —
MS. TONGRING [counsel for the government]: Objection. Hear-
say.
THE COURT: Sustained.
Q. (By Ms. Costello) Why didn’t you file — okay, I’ll move
on.
THE COURT: That’s a 403 analysis, counsel, that the probative
value is outweighed by the potential for prejudice.
UNITED STATES v. MORAN 3763
questioned Mrs. Moran regarding a letter she had received
from an outside attorney in which that attorney had ques-
tioned the legality of AAA’s programs.4 On redirect, Mrs.
Moran attempted to testify about legal opinions she had
4
On cross-examination, the following occurred:
Q. Now, I want to turn to what’s been admitted into evidence
as government’s exhibit 2016, please, starting at the bottom.
Actually if we can turn to the second page, please. This is
a letter that was sent from Mr. Hayes, Stephen Hayes to your
husband and Ms. La Grand. You’ve seen this letter before,
haven’t you, Mrs. Moran?
A. Yes.
...
Q. (By Ms. Tongring) In this letter, Mr. Hayes indicates that he
had serious concerns regarding the Anderson’s Ark pro-
gram, the Look Back program, doesn’t he?
MR. ENGELHARD [counsel for defendant Tara La Grand]:
Your Honor, I’m going to object. This letter speaks for itself.
THE COURT: Sustained.
...
Q. And you knew that Mr. Hayes had these serious concerns,
did you not, in April of 1999?
A. Well, Mr. Hayes must have been the information officer for
Mr. And non [sic] and that was his job to take care of any
issues that would come up. So, I can see that he would be
just following through there.
...
Q. (By Ms. Tongring) Sure. You knew that Stephen Hayes, the
man who wrote this letter, had no connection to Anderson’s
Ark. Isn’t that correct?
A. Well, we didn’t really understand much about this at all. We
did receive the letter from a Mr. Hayes. And that’s about all
I can tell you. Obviously he was not a part of Anderson’s
Ark.
Q. But in it he said that he had concerns about this program?
A. Yes.
3764 UNITED STATES v. MORAN
received from outside experts; the government objected (with-
out specifying grounds), and the court sustained the objection,
referring to both Rule 403 and the hearsay rule.5
A. Whether the District Court Committed Error
A district court’s ruling excluding testimony is reviewed
for abuse of discretion. United States v. Sure Chief, 438 F.3d
920, 925 (9th Cir. 2006). However, when the court excludes
evidence under Rule 403 but does not engage in explicit bal-
5
The second exchange concluded as follows:
Q. Were you aware — did anybody else give you their legal
opinion about the program, the CBO program?
A. We had had several give us their —
MS. TONGRING: Objection.
THE COURT: I’m going to sustain the objection on 403 grounds.
I’m going to exclude the testimony.
MS. COSTELLO: Your Honor, I believe I was — may I be heard
briefly on this?
THE COURT: Yes.
(At sidebar, out of the hearing of the jury:)
MS. COSTELLO: I believe that the prosecutor opened the door
by asking the question about Steve Hayes.
THE COURT: No.
MS. COSTELLO: And leaving it unanswered —
THE COURT: No.
MS. COSTELLO — the inference is that’s the only opinion she
ever got.
THE COURT: The objection is sustained.
(Within the hearing of the jury:)
THE COURT: Counsel, let me add for the record any testimony
of that type will have to come from the person who gave the
advice and who will be subject to cross-examination. I’m not
going to permit it in through hearsay. Through 403.
UNITED STATES v. MORAN 3765
ancing, we review such a determination de novo. United
States v. Boulware, 384 F.3d 794, 808 n.6 (9th Cir. 2004).
[11] “[W]illfulness is an element in all criminal tax cases.”
United States v. Bishop, 291 F.3d 1100, 1106 (9th Cir. 2002).
“Willfulness . . . requires the Government to prove that the
law imposed a duty on the defendant, that the defendant knew
of this duty, and that he voluntarily and intentionally violated
that duty.” Id. The burden is on the government to negate the
defendant’s claim that he had a good faith belief that he was
not violating the tax law. Id. “Good faith reliance on a quali-
fied accountant has long been a defense to willfulness in cases
of tax fraud.” Id. The defendant is entitled to testify about the
tax advice he received—subject, of course, to cross-
examination—and exclusion of this testimony is error. Id. at
1111. Not only is testimony about the reliance on qualified
experts relevant to establishing this defense, but the defendant
“[has] the right to tell the court his own version of the tax
advice on which he claim[s] to have relied.” Id. Such testi-
mony does not constitute hearsay when not offered for the
truth of the matter stated. Id. Because there is an intent ele-
ment in fraud cases, good faith belief in legality also provides
a defense to the fraud counts. See, e.g., United States v.
Amlani, 111 F.3d 705, 717-18 (9th Cir. 1997) (wire fraud);
United States v. Beecroft, 608 F.2d 753, 757 (9th Cir. 1979)
(mail fraud). The government’s brief concedes that Mrs.
Moran was entitled to testify about what outside experts told
her but argues that she did not do so. The record makes clear
that she did try—twice—but was stopped by the court’s sus-
taining the government’s objections.
[12] To the extent the court excluded the disputed testi-
mony from Mrs. Moran’s redirect as hearsay, it was error
since the testimony was not offered for the truth of the matter
asserted and thus its exclusion was an abuse of discretion. See
Bishop, 291 F.3d at 1112. To the extent the ruling was based
on Rule 403, we review it de novo because the court did not
engage in explicit balancing of the Rule 403 factors. See Sure
3766 UNITED STATES v. MORAN
Chief, 438 F.3d at 925. The government defends the exclusion
on the ground that the cross-examination exceeded the scope
of direct. However, the government in its brief takes an unrea-
sonably narrow view of the permissible scope of redirect, lim-
iting it to what the defendants did or could have done in
response to the concerns expressed in the Hayes letter. The
government’s questioning of Mrs. Moran raised the implica-
tion, as her counsel explained at trial, that the Hayes letter
was the only opinion the Morans ever received, thus opening
the door to redirect about what other legal opinions they had
received.
[13] The government further argues that this testimony
would have been cumulative because Mrs. Moran had previ-
ously testified to other opinions she had received. Those opin-
ions, however, came from insiders, the principals and
architects of the AAA plan, and not qualified outside profes-
sionals, and thus could be expected to carry significantly less
weight with the jury. Thus, because the testimony was not
hearsay, fell within the scope of redirect, and was not cumula-
tive or otherwise in violation of Rule 403, the district court
erred in excluding it.
B. Whether the Error Was Harmless
When testimony has been erroneously excluded, we apply
the harmless error standard for nonconstitutional error. “We
must reverse unless there is a ‘fair assurance’ of harmlessness
or, stated otherwise, unless it is more probable than not that
the error did not materially affect the verdict.” United States
v. Morales, 108 F.3d 1031, 1040 (9th Cir. 1997). “This stan-
dard requires that the Government show a ‘fair assurance’ that
the verdict was not substantially swayed by error.” United
States v. Seschillie, 310 F.3d 1208, 1214 (9th Cir. 2002).
[14] The government argues only that the district court’s
ruling did not deny Mrs. Moran’s right to present a defense.
We agree that her constitutional right was not violated. Mrs.
UNITED STATES v. MORAN 3767
Moran testified about advice she received from in-house
advisers. The government has failed, however, to address its
burden to show a “fair assurance” that the verdict was not
substantially swayed by the exclusion of evidence of opinions
from outside experts. That evidence went to the heart of Mrs.
Moran’s defense, which entitled her to “rebut the Govern-
ment’s proof of willfulness by establishing good faith reliance
on a qualified accountant after full disclosure of tax-related
information.” Bishop, 291 F.3d at 1106-07 (quoting United
States v. Claiborne, 765 F.2d 784, 798 (9th Cir. 1985), abro-
gated on other grounds, Ross v. Oklahoma, 487 U.S. 81
(1988)). We conclude the error was not harmless.
V. MR. MORAN
James Moran contends that since he also asserted a good
faith defense, he is entitled to the same relief as Mrs. Moran.
The government does not dispute that Mr. Moran raised a
good faith defense but argues that the defense is specific to
the individual: “Whether or not one person possesses a good
faith belief in the legality of her actions has no effect on
whether another person has a good faith belief.” That state-
ment is undoubtedly true, but it misconceives the issue. The
question is whether the district court’s ruling excluding evi-
dence of outside professional opinions prejudiced Mr.
Moran’s defense.
[15] In Bishop, the government had charged Mr. Bishop,
but not his wife, with violation of the tax laws. 291 F.3d at
1105. The defendant called Mrs. Bishop to testify about tax
advice she and her husband had received from an accountant
to show Bishop’s good faith reliance on professional advice.
Id. at 1111-12. The government’s objection was sustained. Id.
at 1112. On appeal, we held that it was error to exclude the
evidence, stating:
While Ms. Bishop’s own state of mind was not an
issue in the case, her testimony would have been rel-
3768 UNITED STATES v. MORAN
evant and would have qualified as circumstantial
evidence to prove [Mr.] Bishop’s state of mind.
[Mr.] Bishop’s state of mind is also relevant to Car-
denaz, as they were convicted of conspiring, and this
crime requires willfulness.
Bishop, 291 F.3d at 1112. Here, the Morans were charged as
coconspirators. The testimony sought from Mrs. Moran con-
cerning professional opinions about the tax scheme with
which they were jointly charged would have been relevant as
circumstantial evidence to prove the state of mind of her hus-
band and coconspirator, James Moran.
[16] The testimony at trial underlines the relevance of Mrs.
Moran’s testimony to Mr. Moran’s defense. In her testimony,
she often used the words “we” and “our,” referring to her hus-
band and herself when explaining their participation in AAA.
The letter from Mr. Hayes about which Mrs. Moran was
cross-examined was addressed in part to Mr. Moran. And
most notably, when asked on redirect about outside expert
opinions, Mrs. Moran stated that “we had had several give us
their . . .” (emphasis added) before she was cut off. The court
issued no limiting instructions regarding crossover of evi-
dence between the Morans, and it appears that no such
instructions were requested. Moreover, by the time Mr.
Moran testified—after Mrs. Moran—the court had already
made it clear that it was not going to permit testimony about
the opinions of outside experts. But for this error, Mr. Moran
would have had the opportunity to present evidence of the
advice he received.
[17] The convictions of defendants Pamela Moran and
James Moran are VACATED and the case is REMANDED
for a new trial.6
6
The district court entered a forfeiture order based on the convictions of
the Morans under 18 U.S.C. §§ 1341 and 1343. Because we vacate the
convictions, we also vacate the forfeiture order.