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
