United States v. Kottwitz , 614 F.3d 1241 ( 2010 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
___________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
DECEMBER 22, 2010
No. 08-13740
JOHN LEY
____________________________ CLERK
D. C. Docket No. 07-00107-CR-TCB-3-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
THERESA L. KOTTWITZ,
GERARD MARCHELLETTA, JR.,
GERARD MARCHELLETTA, SR.,
Defendants-Appellants.
____________________________
Appeals from the United States District Court
for the Northern District of Georgia
_____________________________
(December 22, 2010)
ON PETITION FOR REHEARING
Before EDMONDSON, Circuit Judge, and HODGES,* District Judge.1
PER CURIAM:
Defendants/Appellants have petitioned for rehearing. We have considered
Defendants’ arguments and the Government’s reply. And we have looked at the
record again. We stand by our decision, United States v. Kottwitz, 614 F.3d 1241(11th Cir. 2010), except on the issue of the accountant-reliance jury instruction for
Count One.
Defendants contend that the district court erred in refusing to give
Defendants their requested jury instruction about reliance on an accountant’s
advice. In our original decision, we concluded that this refusal constituted
reversible error on Counts Three, Four, and Five. Then, we remanded the case to
the district court for retrial with the requested instruction on those counts only.
Now, we conclude that the district court was also similarly incorrect to deny
*
Wm. Terrell Hodges, United States District Judge for the Middle District
of Florida, sitting by designation.
1
This order is being entered by quorum pursuant to 28 U.S.C. § 46(d).
2
Defendants’ accountant-reliance jury instruction on the Count One conspiracy
charges.
To receive a requested jury instruction in this Circuit, a defendant’s burden
is light: “any foundation in the evidence” is sufficient. United States v. Opdahl,
930 F.2d 1530, 1535 (11th Cir. 1991). On reflection, we accept that Defendants
met this burden. Sufficient evidence was introduced to allow the conviction of
Defendants on Count One on the basis of several alternative interpretations of the
facts.
Even though no evidence directly showed that Defendants’ accountant was
involved in initially entering/hiding transactions on the corporate books (for
example, the personal-expense transactions), Defendants introduced enough
circumstantial evidence to warrant an instruction that -- at some pertinent point --
Defendants may have relied on the accountant’s advice.
Virtually all of the suspect transactions occurred after Defendants’
accountant was hired in mid-1999; and the accountant had authority to (and in fact
did) review and reclassify some entries in the corporate books. In addition, the
accountant prepared the tax returns that resulted in underpayment of taxes. Even
if it was not the only and not the most likely explanation of events leading to the
guilty verdicts on Count One, an evidentiary basis existed for conviction under
3
Count One that could have involved Defendants, in fact, relying on the advice of
their accountant. For example, the jury might have believed that Defendants acted
with the accountant’s tacit approval of Defendants’ accounting methods.2
For these reasons, we vacate Kottwitz’s, Junior’s, and Senior’s convictions
for conspiracy to defraud the IRS (Count One) and remand the case to the district
court for a new trial with an accountant-reliance jury instruction. We withdraw all
language in our opinion, United States v. Kottwitz, 614 F.3d 1241 (11th Cir.
2010), inconsistent with this present order.3
Otherwise, Defendants’ petitions for rehearing are DENIED. And, no judge
of the Court having requested a poll, Defendant Kottwitz’s suggestion for
rehearing en banc is DENIED.
2
The correct test in this Circuit for the “act” element in an 18 U.S.C. section
371 conspiracy (including the subset of Section 371 conspiracies against the
Internal Revenue Service known as Klein conspiracies) is “the commission of an
act in furtherance of the agreement.” United States v. Adkinson, 158 F.3d 1147,
1153 (11th Cir. 1998). A “failure to properly report income,” id. at 1154, is one
example of conduct that could satisfy the act element of a Klein conspiracy. But it
is not the only possible act that could do so: for example, intentionally making
false entries in corporate books could be an act in furtherance of the agreement.
Because we cannot know the precise act(s) on which the jury relied for the Count
One conspiracy convictions, we cannot rule out that the jury relied on an act that
involved -- in a material way -- advice from Defendants’ accountant.
3
To be clear, as a result of our original decision and this present order, we
have vacated or reversed each of Defendants’ convictions and sentences at issue
on appeal.
4
Petitions DENIED, except Defendants’ convictions and sentences on Count
One are VACATED; the case is REMANDED.
5