UNITED STATES OF AMERICA, -against- MICHAEL
LITTLE, Defendant.
S2 12-cr-647 (PKC)
UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK
2018 U.S. Dist. LEXIS 187643
November 1, 2018, Decided
November 1, 2018, Filed
SUBSEQUENT HISTORY: Reconsideration
denied by United States v. Little, 2018 U.S. Dist. LEXIS 193795 (S.D.N.Y., Nov.
14, 2018)
PRIOR HISTORY: United States
v. Little, 2014 U.S. Dist. LEXIS 60840 (S.D.N.Y., Apr. 23, 2014)
CORE TERMS: new trial,
conspiracy, newly, discovered evidence, tax returns, gift, indictment, email,
grand jury, perjury, reasonable doubt, honestly, infer, offshore, preparation,
willfulness, knowingly, obstruct, impede, inheritance, jury's verdict, judgment
of acquittal, advice of counsel, privileged communications, permanently,
accountant, assisting, corruptly, defraud, advice
COUNSEL: [*1] For Michael Little, also
known as Sealed Defendant 1, Defendant: Michael John Little, LEAD ATTORNEY,
Kings Bench Chambers, Christchurch, UK; Sean Michael Maher, The Law Offices of
Sean M. Maher, PPLC, New York, NY.
For USA, Plaintiff:
Sarah Kathleen Eddy, U.S. Attorney's Office, SDNY (St Andw's), New York, NY;
Sarah Elizabeth Paul, United States Attorney Office, SDNY, New York, NY;
Stanley John Okula, Jr., U.S. Attorney's Office, Sdny (White Plains), White
Plains, NY; Tino Martin Lisella, United States Attorney's Office - Sausa, New
York, NY.
JUDGES: P. Kevin
Castel, United States District Judge.
OPINION BY: P. Kevin
Castel
OPINION
OPINION AND ORDER
CASTEL,
U.S.D.J.
Defendant
Michael Little was charged with nineteen counts of tax crimes in a Superseding
Indictment S2 12 Cr. 647 (PKC) (the "Indictment"). These charges
related to Little's role in assisting the heirs to Harry Seggerman's multimillion-dollar
estate evade paying taxes on their inheritances from 2001 to 2010 and Little's
failure to file documents reporting his own income from 2005 to 2010.
For his
alleged involvement in assisting the Seggerman family evade taxes, Count One
charged the defendant with obstructing and impeding the due administration of
the internal revenue laws [*2]
in violation of 26 U.S.C. § 7212(a), Count Nine charged him with
conspiracy to defraud the United States in violation of 18 U.S.C. § 371, and
Counts Ten through Nineteen charged him with aiding and assisting the
preparation of false IRS Forms 3520 in violation of 26 U.S.C. § 7206(2) and 18
U.S.C. § 2. Counts Two through Seven charged him with failing to file
individual income tax returns from 2005 to 2010 in violation of 26 U.S.C. §
7203. Finally, Count Eight charged the defendant with failing to file reports
of foreign bank and financial accounts ("FBARs") in violation
of 31 U.S.C. §§ 5314, 5322(a); 18 U.S.C. § 2; and 31 C.F.R. §§ 103.24,
103.27(c)&(d), 103.59(b).
Following an
approximate three-week jury trial, defendant was convicted on all nineteen
counts of the Indictment. Defendant now moves for a judgment of acquittal on
all counts under Rule 29, Fed. R. Crim. P., or, in the alternative, for a new
trial under Rule 33, Fed R. Crim. P. For the following reasons, the motions are
denied.
I. Defendant's Rule 29
Motion for Judgment of Acquittal
Defendant
asserts that, based on the evidence presented at trial, no reasonable jury
could have found him guilty on any Count charged. Accordingly, he requests a
judgment of acquittal on all nineteen counts. Upon review and consideration of
all the evidence, this Court holds that the government's proof was sufficient
to sustain a conviction on all counts. [*3]
A. Legal Standard
Rule 29(a),
Fed. R. Crim. P., provides that "the court on the defendant's motion must
enter a judgment of acquittal of any offense for which the evidence is
insufficient to sustain a conviction." A defendant who wishes to challenge
the sufficiency of the evidence supporting his conviction under Rule 29
"bears a heavy burden." United States v. Abdulle, 564 F.3d 119, 125
(2d Cir. 2009) (citation omitted). In reviewing such a motion, the court must
view the evidence "in its totality and in the light most favorable to the
government." Id. at 125 (citation omitted). Moreover, the court must
"defer[] to the jury's evaluation of the credibility of the witnesses, its
choices between permissible inferences, and its assessment of the weight of the
evidence." United States v. Jones, 482 F.3d 60, 68 (2d Cir. 2006); see
also United States v. Florez, 447 F.3d 145, 156 (2d Cir. 2006) ("We will
not attempt to second-guess a jury's credibility determination on a sufficiency
challenge."). The court must deny the motion if "any rational trier
of fact could have found the essential elements of the crime beyond a
reasonable doubt." United States v. Aguilar, 585 F.3d 652, 656 (2d Cir.
2009) (quoting Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 61 L. Ed.
2d 560 (1979)). Furthermore, the government is not required to "negate
every theory of innocence." United States v. Autuori, 212 F.3d 105, 114
(2d Cir. 2000). Where the court "concludes that either of the two results,
a reasonable doubt or no reasonable doubt, is fairly possible, [the court] must
let the jury decide the matter." [*4] Id. (alteration in original).
B. Discussion
i. Count One, Count
Nine, and Counts Ten Through Nineteen
1. The Government's
Evidence
The evidence
put forth by the government with respect to Counts One, Nine, and Ten through
Nineteen is summarized as follows. Harry Seggerman died in May of 2001, leaving
behind a multimillion-dollar inheritance--much of it in offshore accounts--to
his wife, Anne Seggerman, and his five children. Of these children, Yvonne,
Henry, Suzanne, and John Seggerman testified at trial. Anne was an executor for
Harry's estate, but did not report the undeclared offshore assets to the IRS as
required by Unites States law. (Tr. 187-90). The Seggerman children testified that
Little and Dr. Walter Müllhaupt, a Swiss attorney, assisted the family in
funneling these assets into the United States in a manner that avoided IRS
detection. (Tr. 172, 221-23, 491, 535, 761-62, 1634-35, 1666-67).
This
assistance began in 2001. Yvonne testified that on August 8, 2001, she, Henry,
Suzanne, and Anne met with Little and Müllhaupt at the Four Seasons hotel in
Manhattan to discuss the offshore assets (the "Four Seasons
meeting"). (Tr. at 194-95). Yvonne also testified regarding a handout used
[*5] at the meeting that
discussed the two funds that were part of the Seggermans' inheritance, what the
Court will refer to as the "Cetura Funds" and "Gulworthy
Holdings." (Tr. 202, GX-102). Anne and the children divided the Cetura
Funds, while Anne alone inherited Gulworthy Holdings. (Tr. 204, GX-105,
DX-103). According to Yvonne, Müllhaupt explained at the meeting that Anne's
portion of both funds would be moved to a trust in Switzerland, that Anne would
be named beneficiary, and that Müllhaupt and Little would act as trustees. (Tr.
at 208-10).
Bank records
and Little's own testimony show that a trust, Lixam Provisio
("Lixam"), was thereafter established in Switzerland, naming Anne as
the beneficiary, and Little and Müllhaupt as trustees. (Tr. 1866, GX-1506T).
The records showed that the balance in the trust was $6.6 million as of October
16, 2001. (GX-1506T at 144). Two Seggerman children testified that Anne's share
of the inheritance was about $6.5 million. (Tr. at 204, 224, 1636). The bank
records also showed that funds from Lixam flowed into Steiner Productions
("Steiner"), a corporate entity in the United States, controlled by
Anne. (GXs-1500, 1502A-B, 1503A-C, 1504, 1505, 1506). [*6]
Yvonne also
testified that in January 2002, Little asked her to become a one-percent owner
in Steiner because he needed someone to file tax returns on Steiner's behalf,
who was unlikely to "draw any attention to themselves because they're
gainfully employed and least likely to draw IRS scrutiny." (GX-111, Tr.
249-50; Tr. 252). This testimony was corroborated by contemporaneous notes that
she took during that conversation. (GX-111). In recruiting Yvonne, defendant
explained to her that money coming into Steiner from Lixam would be documented
as loans and assured her that his accountant Bob Gordon would make the tax
returns look legitimate. (GX-111, Tr. at 286-87). From 2001 to 2010, over $3
million flowed from Lixam to Steiner in this manner. (Tr. 1397-98, 2036).
Little charged fees in excess of half-a-million dollars for his services
managing Lixam. (See GX-112; GX-402).
In July 2010,
the IRS began investigating Anne's foreign bank and financial accounts.
(GX-554, Tr. 1040-41). Thereafter, Little began working with attorneys Doug
Stein and Joseph Bainton to provide legal assistance to Anne. Stein's testimony
revealed that Little contacted Bainton to help him represent Anne with respect [*7] to the IRS investigation. (Tr. 1036-37).
Shortly thereafter, Bainton contacted Stein. (Id.)
James
Cosgrove, an accountant at the Dworken Hillman accounting firm
("Dworken") testified that Little contacted his firm in August 2010
seeking assistance in preparing Forms 3520 on behalf of Anne. (Tr. at 1282-88,
1362-66, GXs-1200, 1204). These forms are used to report transactions with foreign
trusts and receipts of foreign gifts to the IRS. Together, Stein and Cosgrove
testified about the representations that Little and Bainton made regarding
Anne's unreported funds during this period. The government presented numerous
letters, emails, and notes from phone calls to corroborate their testimony.
(e.g. GX-535). Specifically, they testified that Little and Bainton told them
and their associates on numerous occasions that the funds flowing from Lixam to
Anne were "pure gift[s]" from Müllhaupt. (Tr. 1108, 1401, 1036-1038,
1044-45, 1056-57, 1062-63, 1067-73, 1362-65, 1369, 1391-94; GXs-325, 1230).
Bainton also informed them that the funds were not previously reported because
of the incompetence of Anne's accountant, Bob Gordon. (Tr. 1053). Based on the
representations, Cosgrove and his associates [*8] prepared Forms 3520 on behalf of Anne
for the years 2001 through 2010, stating that the funds transferred from
Steiner to Anne were gifts. (Tr. at 1400-01). These forms were thereafter filed
with the IRS. (Tr. at 125-34; GXs-1608-1627).
2. Count One:
Obstruction
Count One
charged the defendant with a violation of 26 U.S.C. § 7212(a). Section 7212(a)
makes it unlawful to "corruptly . . . obstruct[] or impede[] the due
administration" of the Internal Revenue Code. 26 U.S.C. § 7212(a). On this
Count, the defendant argues in general terms that the government failed to
present "any evidence [he] acted corruptly to secure an unlawful advantage
for [him]self, and failed to prove [he] knowingly and deliberately engaged in
an affirmative act to obstruct a foreseeable tax-related proceeding."
A defendant
violates § 7212(a) if he (1) endeavors to obstruct or impede the due
administration of a pending or reasonably foreseeable tax-related proceeding
and (2) acts corruptly in doing so. See Marinello v. United States, 138 S. Ct.
1101, 1109-10, 200 L. Ed. 2d 356 (2018); United States v. Parse, 789 F.3d 83,
121 (2d Cir. 2015). To "endeavor" to obstruct or impede the due
administration of a proceeding is to knowingly and deliberately act or make an
effort that has a reasonable tendency to obstruct or impede a proceeding. See
United States v. Kelly, 147 F.3d 172, 176-77 (2d Cir. 1998). Examples of
qualifying proceedings include investigations, audits, [*9] or "other targeted administrative
action." Marinello, 138 S. Ct. at 1109. To act "corruptly" is to
act with the "intent to secure an unlawful advantage or benefit either for
one's self or for another." Parse, 789 F.3d at 121 (quoting Kelly, 147
F.3d at 177).
The
government presented sufficient evidence of each element of this offense.
First, the evidence was sufficient to establish that Little
"endeavored" to obstruct or impede a pending tax-related proceeding,
namely the IRS investigation into Anne Seggerman. See Marinello, 138 S. Ct. at
1109 (listing an "investigation" as a qualifying
"proceeding" under § 7212(a)). It was reasonable to infer that
Little, as a trustee of Lixam, knew that the payments from Lixam to Anne
constituted trust payments, not gifts. Nonetheless, corroborated testimony from
Stein and Cosgrove showed that, after Little learned of the IRS investigation,
he repeatedly informed Stein and the accountants at Dworken that the unreported
funds Anne received from Steiner were "gifts" from Müllhaupt. Based
on this evidence, the jury was free to infer that, by seeking to secure false
Forms 3520, the defendant "knowingly and deliberately" attempted to
impede the pending IRS investigation. Additionally, the jury was free to infer
that Little acted "corruptly" in securing these Forms [*10] 3520. Specifically, the jury could
reasonably conclude that Little's motive for misrepresenting Anne's funds as
"gifts" was to evade criminal penalty for his and Anne's unlawful tax
activities. Such evasion surely constitutes an "unlawful advantage or
benefit" for both himself and Anne.
3. Count Nine:
Conspiracy
Count Nine
charged the defendant with conspiracy to defraud the United States in violation
of 18 U.S.C. § 371. Specifically, it alleged that the defendant conspired to
defraud the IRS by impeding its ability to ascertain and collect income and
estate taxes.1 Defendant Little argues that a judgment of acquittal
is warranted on Count Nine because the government "improperly conflated
distinct and separate funds detailed in the Cetura Agreement and Gullworthy
[sic] Agreement."
1 The
Indictment also alleged two other possible objects of the conspiracy:
subscribing to tax returns that were materially false, and aiding and assisting
in the preparation of materially false tax returns. This Court will only
address the alleged conspiracy to defraud the IRS because defendant's Rule 29
motion raises an issue that relates only to that object, and this Court holds
that the evidence was sufficient with respect to that object. See United States
v. Coplan, 703 F.3d 46, 62-63 (2d Cir. 2012) (quoting Griffin v. United States,
502 U.S. 46, 56-57, 112 S. Ct. 466, 116 L. Ed. 2d 371 (1991)) ("[When] a
jury returns a guilty verdict on an indictment charging several acts in the
conjunctive, . . . the verdict stands if the evidence is sufficient with
respect to any one of the acts charged.").
"To
sustain a conspiracy conviction, the Government must present some evidence from
which it can reasonably be inferred that the person charged with conspiracy
knew of the existence of the scheme alleged in the indictment and knowingly
joined and participated in it." United States v. Coplan, 703 F.3d 46, 62
(2d Cir. 2012) (quoting United States v. Rodriguez, 392 F.3d 539, 545 (2d Cir.
2004)). As discussed, in deciding a Rule 29 motion, courts must avoid usurping
the jury's role as the ultimate judge of the evidence. This deference is
"especially [*11]
important" in the conspiracy context "because a conspiracy by
its very nature is a secretive operation, and it is a rare case where all
aspects of a conspiracy can be laid bare in court with the precision of a
surgeon's scalpel." United States v. Anderson, 747 F.3d 51, 72-73 (2d Cir.
2014) (quoting United States v. Pitre, 960 F.2d 1112, 1121 (2d Cir. 1992)). A
"defendant's mere presence at the scene of a crime, his general knowledge
of criminal activity, or his simple association with others engaged in a
crime" do not alone establish conspiracy liability. Id. at 61. However, a
defendant's "presence may establish his membership in the conspiracy if
all of the circumstances considered together show that by his presence he meant
to advance the goals of that conspiracy." United States v. Abelis, 146
F.3d 73, 80 (2d Cir. 1998). If a conspiracy is shown to exist, "it does
not take overwhelming proof to link additional defendants to it." United
States v. Desimone, 119 F.3d 217, 223 (2d Cir. 1997).
The
government's evidence at trial was sufficient to sustain a finding that Little
conspired to defraud the IRS by impeding its ability to ascertain and collect
income and estate taxes. Specifically, based on Yvonne Seggerman's testimony,
the jury could reasonably infer that Little knew of a plan to funnel Anne
Seggerman's inherited offshore assets into the United States without properly
reporting it to the IRS or paying taxes on it. [*12] That testimony established that Little
was present at the Four Seasons meeting, during which Müllhaupt described a
plan to establish a Swiss trust for Anne's benefit and appoint himself and
Little as trustees. The government's evidence also showed that the Lixam trust
was eventually established in Switzerland and that Little agreed to be a
trustee, which supports the inference that Little knowingly participated in the
plan discussed at the meeting. Yvonne's corroborated testimony regarding a
conversation she had with Little about the significance of Steiner Productions
is further evidence that Little knowingly participated. She testified that
Little asked her to become a one-percent owner in Steiner because she was
"least likely to draw IRS scrutiny" and assured her that his
accountant would make the Steiner's tax returns look "legitimate" by
documenting the money flowing from Lixam into Steiner as "loans."
Defendant's
argument that the government "improperly conflated" the Cetura Funds
and Gulworthy Holdings is without merit. Defendant essentially argues that the
jury should have accepted his version of the events rather than the government's.
His argument at trial and in his Rule 29 motion [*13] was that the funds in Gulworthy Holdings
were a pre-death gift from Harry to Anne, and as such, they were not taxable as
part of Harry's estate. Though the Cetura Funds were taxable, he argues that he
played no role in hiding those funds from the IRS. The jury was free to reject
this version of events because there was sufficient evidence to find that the
funds in Gulworthy Holdings were part of Harry's estate. This evidence included
testimony from Yvonne and Henry Seggerman as well as notations on the Gulworthy
agreement itself and the account opening records for the Lixam trust.2
(Tr. at 228, 735, DX-103 at 2, GX-1506T at 92).
2 The
Gulworthy agreement, signed by Little, stated that Harry Seggerman "one
day prior to his death, conveyed to Michael J. Little his last will and
intention that Gulworthy and its assets should be exclusively for the benefit
of Anne during her lifetime." (DX-103 at 2). The Lixam account documents
noted that the source of the funds in Lixam was "Inheritance to wife
(housewife)." (GX-1506T at 92).
4. Counts Ten Through
Nineteen: False Filing of Forms 3520
Counts Ten
through Nineteen charged the defendant with aiding and assisting in the
preparation of false IRS Forms 3520 in violation of 26 U.S.C. § 7206(2) and 18
U.S.C. § 2. Under Section 7206(2), it is unlawful to "[w]illfully aid[] or
assist[] in, or procure[], counsel[] or advise[] the preparation or
presentation under, or in connection with any matter arising under, the
internal revenue laws, of a return . . ., which is fraudulent or is false as to
any material matter[.]" A defendant violates this provision when (1) the
defendant aids, assists, [*14]
procures, counsels, advises, or causes the preparation and presentation
of a tax return, (2) the return is fraudulent or false as to a material matter,
and (3) the act of the defendant is willful. United States v. Klausner, 80 F.3d
55, 59 (2d Cir. 1996) (citing United States v. Perez, 565 F.2d 1227, 1233-34
(2d Cir. 1977)).
Defendant
argues that no reasonable jury could have found him guilty of Counts Ten
through Nineteen because the government "failed to prove that [he] did not
honestly and in good faith seek the advice of competent lawyers" in
preparing Forms 3520, which ultimately reported the funds received by Anne
Seggerman from Lixam as foreign "gifts." Essentially, he argues that
the evidence was insufficient with respect to the third
element--willfullness--because the government failed to disprove his advice of
counsel defense. This claim is meritless. An advice of counsel defense is an
affirmative defense. As such, the burden is on the defendant to prove the
elements of the defense, not on the government to disprove the defense. A
successful advice of counsel defense requires the defendant to prove that he
(1) honestly and in good faith sought the advice of counsel, (2) fully and
honestly laid all the facts before his counsel, and (3) honestly and in good
faith followed his counsel's advice, [*15] believing it to be correct and intending
that his acts be lawful. United States v. Colasuonno, 697 F.3d 164, 181 (2d
Cir. 2012).
The
government's evidence was sufficient to support the jury's rejection of this
defense. As discussed, the government presented evidence to show that the funds
distributed to Anne from Lixam constituted Anne's inheritance from her late
husband, that Lixam constituted a trust for the benefit of Anne, and that
Little was a trustee of Lixam. Further, Doug Stein testified that when Little
sought advice from Joseph Bainton and Stein regarding the preparation of Forms
3520, Little represented to them that the funds flowing from Lixam to Anne
constituted a "gift" from Müllhaupt. From this evidence, the jury was
free to infer that the funds flowing from Lixam were not a gift from Müllhaupt,
that Little knew these funds were not a gift, and that Little lied to his
attorneys about the nature of the funds in Lixam in order to obtain their help
in preparing false Forms 3520, unlawfully reporting Anne's assets as
"gifts," rather than trust payments. As such, the jury was well
within reason in determining that Little (1) did not seek advice from counsel
honestly and in good faith, (2) did not fully and honestly disclose to his
attorneys [*16] all of the
facts, and (3) did not honestly and in good faith follow his counsel's advice
intending that his acts be lawful. The jury's rejection of Little's advice of
counsel defense and its finding of guilt on these Counts is, therefore,
properly supported by the evidence.
ii. Counts Two Through
Seven: Failure to File Tax Returns from 2005 Through 2010
Counts Two
through Seven charged the defendant with willfully failing to file individual
income tax returns from 2005 through 2010 in violation of 26 U.S.C. § 7203.
Defendant does not dispute that he failed to file the required returns in these
years. He disputes only the sufficiency of the government's evidence that his
failure to file was willful.
"In the
tax fraud context, willfulness is established when the government shows (1)
'the law imposed a duty on the defendant'; (2) 'the defendant knew of [that]
duty'; and (3) '[the defendant] voluntarily and intentionally violated that
duty.'" United States v. Gilmartin, 684 F. App'x 8, 11 (2d Cir. 2017)
(summary order). The government bears the burden of showing that a failure to
file is willful, but may meet that burden solely with circumstantial evidence.
See id. For instance, the law permits a jury to infer willfulness based on
"the defendant's prior taxpaying [*17] record" or "educational
background." Id. (listing the defendant's "advanced education
level" and "history of filing valid tax returns" as support for
an inference of willfulness).
This Court
holds that the government presented sufficient evidence of willfulness at
trial. At trial, Little testified to his "prior taxpaying record,"
stating that he had previously filed nine or ten tax returns when he lived and
worked in New York in the 1970s and 80s. (Tr. 1920). An IRS employee testified
that Little submitted requests to the IRS for extensions to file tax returns in
2008 and 2009. (Tr. at 152-58). Further, the government presented evidence that
Little was both well-educated and financially sophisticated. Specifically, the
jury heard testimony that Little had a law degree from the United Kingdom, was
admitted to practice as a barrister in Britain and an attorney in New York, had
worked in the finance industry on Wall Street and in London for twenty-five
years, had run his own businesses, had worked closely with trust companies and
banks in a number of countries, and had previously claimed domicile in foreign
jurisdictions to obtain tax advantages. (Tr. 1915-21, 1952-57, 2055, 2062-65). [*18] Based on this evidence, the jury was
free to infer that the defendant knew of his tax obligations, but chose not to
file. Thus, there is sufficient evidence that defendant acted willfully in
failing to file returns from 2005 through 2010.
iii. Count Eight:
Failure to File FBARs from 2007 Through 2010
Count Eight
charged the defendant with willfully failing to file a Report of Foreign Bank
and Financial Accounts ("FBAR") with the IRS in violation of
31 U.S.C. §§ 5314, 5322(a); 18 U.S.C. § 2; and 31 C.F.R. §§ 103.24,
103.27(c)&(d), 103.59(b). On this Count, defendant again asserts that the
government failed to present sufficient evidence of willfulness. He also
asserts that the government did not establish that he was subject to FBAR
filing requirements because the government presented "no evidence that
[he] was living in the US and had not planned to permanently leave the US"
from "2008 onwards."
The
government's evidence was sufficient to sustain a guilty finding on Count
Eight. Regarding willfulness, for the same reasons discussed with respect to
Counts Two through Seven, this Court holds that the government presented
sufficient evidence to show that defendant's failure to file FBARs was
willful.
Regarding
defendant's claim that the government presented "no evidence [*19] that [he] was living in the US and had
not planned to permanently leave the US.," the defendant refers to the
2008 amendment to the FBAR definitions, which states "[t]he plain
meaning of the term 'resident' (in this context, someone who is living in the
U.S. and not planning to permanently leave the U.S.) should be used for FBAR
examination purposes." Internal Revenue Manual 4.26.16.3.1.1. As this
Court properly instructed, the jury was free to return a guilty verdict on
Count Eight if it found that the defendant willfully failed to file an FBAR
for any one of the years charged (2007, 2008, 2009, or 2010). Even assuming
that defendant's assertion is true--that the government presented no evidence
that he was a resident of the United States for FBAR purposes starting
in 2008--a reasonable jury could still have found him guilty on Count Eight if
it found that defendant lived in the United States without the intention to
permanently leave the United States in 2007 or 2008. At trial, Little admitted
that he was present in the United States for over 300 days in 2007 and 2008.
(Tr. at 1926). The jury also heard testimony that Little primarily lived and
worked in New York during 2007 and 2008. [*20] (Tr. at 927-34, 1885, 1925-26). Based on
this evidence, the jury could logically conclude that Little was "living
in the U.S. and not planning to permanently leave the U.S." in either 2007
or 2008 and thus subject to FBAR filing requirements for one of those
years.
II. Defendant's Rule 33
Motion for a New Trial
A. Legal Standard
Rule 33, Fed
R. Crim. P., provides that, "[u]pon the defendant's motion, the court may
vacate any judgment and grant a new trial if the interest of justice so requires."
The defendant bears the burden of showing that a new trial is warranted. United
States v. Sasso, 59 F.3d 341, 350 (2d Cir. 1995). Generally, a court "has
broader discretion to grant a new trial under Rule 33 than to grant a motion
for acquittal under Rule 29." United States v. Ferguson, 246 F.3d 129, 134
(2d Cir. 2001). For instance, "[i]n deciding whether to grant a motion for
a new trial, the judge is not required to view the evidence in the light most
favorable to the prosecution." United States v. Levy, 594 F. Supp. 2d 427,
435 (S.D.N.Y. 2009) (internal quotation marks omitted). Instead, "the
court is entitled to weigh the evidence and in so doing evaluate for itself the
credibility of the witnesses." United States v. Robinson, 430 F.3d 537,
543 (2d Cir. 2005) (internal quotation marks omitted). At the same time,
however, "the court may not wholly usurp the jury's role. It is only where
exceptional circumstances can be demonstrated that the trial judge may intrude [*21] upon the jury function of credibility
assessment." Id. (internal quotation marks omitted). Indeed, a court's
discretion to grant a new trial "should be exercised sparingly."
United States v. Sanchez, 969 F.2d 1409, 1414 (2d Cir. 1992). Further, in the
Second Circuit, "[m]otions for a new trial are disfavored." United
States v. Gambino, 59 F.3d 353, 364 (2d Cir. 1995). Such motions should be
granted only "in the most extraordinary circumstances." United States
v. Locascio, 6 F.3d 924, 949 (2d Cir. 1993). "The ultimate test is whether
letting a guilty verdict stand would be a manifest injustice . . . . There must
be a real concern that an innocent person may have been convicted." United
States v. Canova, 412 F.3d 331, 349 (2d Cir. 2005) (internal quotation marks
omitted).
B. Discussion
The defendant
presents four reasons that a new trial is warranted. First, he requests a new
trial based on newly discovered evidence of perjury by two trial witnesses.
Second, he presents newly discovered evidence that the funds in Gulworthy
Holdings did not belong to Harry Seggerman. Third, he asserts that the
government presented privileged communications to the grand jury. Lastly, he
asserts that the jury's verdict was "contrary to the weight of the
evidence." On the last claim, the defendant incorporates the issues he
raised in his Rule 29 motion. Considering these reasons in totality, this Court
holds that defendant has not made the [*22] requisite showing of "extraordinary
circumstances" that would warrant a new trial. His request for a new trial
is, therefore, denied.
i. Newly Discovered
Evidence of Perjury
Defendant
takes issue with the trial testimony of two witnesses. First, he claims that
Yvonne Seggerman perjured herself at trial because "an Excel spreadsheet .
. . allegedly representing Harry Seggerman's combined offshore holdings[,] was
not passed out at the Four Seasons meeting by Dr. Müllhaupt or [the
defendant]" and Yvonne testified to the contrary. Second, the defendant
claims that Doug Stein committed perjury when Stein "den[ied]
sending" an email that Stein apparently sent to Saul Bienenfeld,
defendant's retained standby counsel at the time.3 Regarding Stein's
alleged perjury, defendant has presented to the court what he purports is
"newly discovered evidence" of an affidavit signed by Bienenfeld
confirming that Stein sent this email.
3 The email
read, in pertinent part, as follows: "[A]s it pertains to the 3520 I will
detail that based on the information given to me that there was [sic] trust
offshore for the benefit of Ann that a 3520 should have been filed. That a 3520
must be filed when a US beneficiary receives a distribution from an offshore
trust. I made that recommendation, reviewed 3520s prepared by an accounting
firm and suggested language for all parties to use." (DX-512).
A defendant
requesting a new trial based on newly discovered evidence must show that (1)
"the evidence could not with due diligence have been discovered before or
during trial," (2) "that the evidence is material, not
cumulative," and (3) "that admission of the evidence would [*23] probably lead to an acquittal."
United States v. Owen, 500 F.3d 83, 87 (2d Cir. 2007) (quoting United States v.
Alessi, 638 F.2d 466, 479 (2d Cir. 1980)). Evidence "known by the
defendant prior to trial, but [that] became newly available after trial"
does not constitute "newly discovered evidence." Id. at 89; see also
United States v. Muja, 365 F. App'x 245, 246 (2d Cir. 2010) (summary order)
(holding that an affidavit from a co-conspirator describing how the co-conspirator
met the defendant did not constitute "newly discovered evidence"
because the defendant was aware of how the two met during trial). If the newly
discovered evidence is evidence of perjury, the defendant must further show
that "the witness in fact committed perjury." United States v. White,
972 F.2d 16, 20 (2d Cir. 1992).
No new trial
is warranted based on Yvonne or Stein's testimony because Yvonne's testimony
does not constitute newly discovered evidence, and there is no evidence that
Stein's testimony was false. The defendant heard Yvonne testify at trial that
either the defendant or Müllhaupt distributed a handout at the Four Seasons
meeting, which discussed the Cetura Funds and Gulworthy Holdings. (Tr. at
201-02). If that testimony was false, defendant, like the defendant in Muja,
was aware of its falsity at the time of trial. See Muja, 365 F. App'x at 246.
As such, defendant's post-trial assertion that this testimony was perjured does
not constitute "newly discovered [*24] evidence."
Regarding
Stein's allegedly perjured testimony, even assuming that the Bienenfeld
affidavit constitutes "newly discovered evidence" under Owen, there
is no evidence that Stein "in fact committed perjury." See White, 972
F.2d at 20. At trial, Stein testified that he did not "recall" sending
the subject email, but he acknowledged that the email appeared to have been
sent from his email address. (Tr. at 1128-30). Thus, assuming Stein did send
the email, his statement that he did not "recall" sending the email
does not amount to a denial and thus cannot amount to perjury.
ii. Newly Discovered
Evidence Regarding the Source of the Funds in Gulworthy Holdings
Defendant
asserts that, after trial, he discovered the date of a fax sent by Harry
Seggerman relating to the origin of the funds in Gulworthy Holdings. This date,
he argues, creates "reasonable doubt as to the veracity of Henry
Seggerman's characterization of Gullworthy's [sic] balances being the product
of [Harry Seggerman's] hard work." Essentially, defendant argues, had the
jury known the date of this fax, it would have concluded that the funds in
Gulworthy Holdings did not wholly belong to Harry Seggerman.
Whatever the
date of the fax shows, this [*25]
date does not constitute "newly discovered evidence"
warranting a new trial under Owen. As defendant concedes, the government
disclosed this fax to defendant during discovery. (Doc. 432). The date is
visible in the upper left hand corner of the fax. (Doc. 432-3, p. 14). Though
slightly cut off, the date is still readily discernable. Even if the defendant
were unable to immediately discern the date, it cannot be said that the date
"could not with due diligence have been discovered before or during
trial." See Owen, 500 F.3d at 87.
iii. Attorney-Client
Privileged Communications Presented During Grand Jury Proceedings
Defendant
claims that Joseph Bainton falsely testified before the grand jury that
defendant was not his client, thereby allowing the prosecutor to present
privileged communications to the grand jury, which resulted in defendant's
indictment on Counts Ten through Nineteen. Defendant sought dismissal of Counts
Ten through Nineteen on this ground on two previous occasions. Both requests
for dismissal were denied. (Docs. 78, 151). At trial, Bainton testified that
the defendant was, in fact, his client. (Tr. 1590). The defendant now seeks a
new trial on Counts Ten through Nineteen based on the presentation [*26] of the allegedly privileged
communications during the grand jury proceeding.
Generally,
once a jury finds a defendant guilty at trial, "any error in the grand
jury proceeding connected with the charging decision [is] harmless beyond a
reasonable doubt." United States v. Mechanik, 475 U.S. 66, 70, 106 S. Ct.
938, 89 L. Ed. 2d 50 (1986). Such error becomes harmless after a trial because
"a petit jury's verdict of guilty beyond a reasonable doubt demonstrates a
fortiori that there was probable cause to charge the defendants with the
offenses for which they were convicted." Id. at 67 (declining to grant a
new trial based on a violation of Rule 6(d), Fed. R. Crim. P., at the grand
jury proceeding); United States v. Warner, 498 F.3d 666, 702 (7th Cir. 2007)
(denying a new trial pursuant to Mechanik when the error during grand jury
proceedings was the introduction of attorney-client privileged information).
Under these circumstances, granting a new trial would "do nothing to correct
an error in the indictment." Warner, 498 F.3d at 702. An exception to this
rule exists when the trial does not "cure[] th[e] error." See Lafler
v. Cooper, 566 U.S. 156, 166, 132 S. Ct. 1376, 182 L. Ed. 2d 398 (2012)
(discussing, as examples, cases where either women or African Americans were
deliberately excluded from the grand jury that issued the indictment). In such
a case, a new trial may be warranted. Id.
In this case,
no new trial is warranted based on the government's presentation [*27] of alleged attorney-client privileged
communications to the grand jury. Even if the communications between Bainton
and defendant were privileged, any error in presenting that testimony to the
grand jury was cured by the subsequent trial, during which the jury found the
defendant guilty beyond a reasonable doubt on all counts. The Court sees no
reason to deviate from the general rule set forth in Mechanik, especially when,
as here, the defendant himself elicited testimony during trial regarding
communications between him and Bainton to support his advice-of-counsel
defense.
iv. Weight of the
Evidence
Defendant's
third ground for a new trial is that the jury's verdict was against the weight
of the evidence. He rests this claim on the same concerns raised in his Rule 29
motion. Though this Court has broader discretion to grant a Rule 33 motion than
a Rule 29 motion, this case is not so "extraordinary" that the Court
must step in to prevent "manifest injustice." As discussed above, the
evidence that the government presented at trial was sufficient to sustain a
jury verdict of Guilty on all nineteen Counts of the Indictment. This Court has
considered the concerns raised by defendant in his Rule 29 motion in the
context [*28] of his Rule 33
motion and sees no reason to disturb the jury's verdict.
CONCLUSION
The Court has
considered all of the defendant's arguments, including those not expressly
addressed herein, and find them to be without merit. For the reasons set forth
above, defendant Little's motions for a judgment of acquittal under Rule 29 and
for a new trial under Rule 33 are DENIED. The Clerk is respectfully directed to
terminate the following motions: Docs 388, 389 and 432.
SO ORDERED.
/s/ P. Kevin
Castel
P. Kevin
Castel
United States
District Judge
Dated: New
York, New York
November
1, 2018