In United States v. Donald Turner (a/k/a Don L.Wood), No. 12-1420, (May 1, 2013), the Third Circuit affirmed a sentence of 60 months’ imprisonment and three years of supervised release, in addition to affirming the order for restitution in the amount of $408,043 to the Government.
Turner was convinced by a jury under 18 U.S.C. § 371 for one count of conspiracy to defraud the United States, and was ordered to pay restitution under 18 U.S.C. § 3663 in addition to his sentencing. Turner is the author of Tax Free! How the Super Rich Do It!, an instruction manual for “escaping federal and state income taxation” by using common law trust organizations (“colatos”). Turner was also the former director of First American Research (FAR), a membership organization that was designed to assist members in executing the colato program outlined in Tax Free!. In 1991 FAR created “Center Company,” a foreign colato, and FAR member Daniel Leveto “sold” his veterinary clinic to Center Company. Center Company then hired Leveto as general manager to the clinic and Turner as a consultant. Leveto continued to operate his veterinary clinic as he did when he was owner, but paid no taxes on the clinic and had full access to its finances.
In 1993, Turner and Leveto contracted an agreement for Leveto to market and sell copies of Tax Free!. Two years later, the IRS began a criminal investigation to determine if the “sale” of the veterinary clinic to Center Company and the colato program were valid. Under this investigation, Manuel Gonzalez, an IRS agent, purchased a copy of Tax Free! from Leveto and spoke both in person and over the phone with him. Leveto later submitted Gonzalez’s name to Turner for membership into FAR, and Turner sent Gonzalez a letter explaining the benefits of joining the organization and spoke with Turner on the phone. The recordings obtained by Gonzalez during these interactions and documents later seized from Leveto’s residence were the points of contest in this appeal.
Turner appeals the District Court’s decision alleging the Court erred in admitting (1) recorded conversations between his co-conspirator and an undercover Internal Revenue Service agent and (2) foreign bank documents that the IRS took possession of from his co-conspirator’s residence and office. In addition, Turner argues that the Court also erred in requiring him to pay $408,043 without first investigating his ability to pay that sum.
The Court of Appeals found that the District Court committed no error in allowing the recordings of conversations between Leveto and Gonzalez because a conspiracy clearly existed between Turner and Leveto, making the recordings admissible under Federal Rule of Evidence 801(d)(2)(E). Second, the Court found that the District Court clearly met its slight burden of proving the authenticity and exceptional guarantees of trustworthiness because Turner has, in no way, identified that the documents, which appear official and contain personal account information, are forged or inaccurate. These documents were also found in Leveto’s personal office and safe in his house, adding to their credibility. Accordingly, the foreign bank statements can be permitted under the residual hearsay exception. Lastly, with regard to the restitution ordered by the District Court, the Court of Appeals found it appropriate to apply the Mandatory Victims Restitution Act (MVRA), which requires that the full amount of restitution be paid without consideration of the defendant’s economic circumstances.
Prepared by Law Clerk Brittany Quinn