Oral argument — United States v. Te

United States v. Terry Nice thing about being a senior Good morning and may it please the court my name is Dan Perez I represent the defendant appellant Gerard Terry this change of plea hearing was virtually without peer without parallel almost unique when it came to the district court's complete failure to inform the defendant of the nature of his offense and to ensure that he understood it in all of the cases that we have cited that the government has cited there has been some reason to conclude by a reviewing court that the defendant understood the nature of his offense so whether it was in Lloyd for example where there was a plea agreement and the district court asked the defendant did you discuss it with your lawyer and the defendant said yes and did you understand it and the defendant said yes or in this case didn't Terry weren't there several times where there were breaks where Terry discusses with his lawyer well there were several breaks during the plea colloquy we don't know what he discussed with his lawyer but there was never a moment that your client knows what he discussed with his lawyer I can only go on what's in the record your honor and what's in the record is no one not the district court well then the defendant didn't know what the charges involved the lawyer didn't set out the elements either and certainly the district court never ensure he's a lawyer as he's not Mr. Terry was a disbarred 60 was he a lawyer yes municipal and government yes yes all right whether it was in handy and in handy where the district court had the clerk of court read the indictment allowed appendix 20 to 21 that I knowingly and willfully evaded and failed to pay personal income tax due and owing to me by the United States of America and payment thereof for tax years 2000 to 2015 yes and that is not a sufficient allocution to tax evasion I agree I agree with the government's first first position which was that was not a sufficient allocution because that does not admit the affirmative acts of evasion he admitted seven affirmative acts of evasion well he he admitted some things he admitted to not paying taxes I mean this entire colloquy was over two of the nine affirmative acts right well the most of the colloquy revolved around the issue of whether he had cashed checks in order to avoid avoid levy and that was one of the affirmative acts yes but that wasn't necessary for an allocution right what's necessary for an allocution judge Sullivan is for the district court to ensure that the defendant understands the nature of his offense and that never happened here the defendant articulated in court the element he didn't mean to judge Wesley just read them and then he admitted to seven affirmative acts what judge Wesley one of which meets the criteria for an affirmative act under the statute my position is not that he did not provide a sufficient factual allocution that's not that's not what we're arguing but that reflects an understanding of the elements it may or it may not I would take issue with first of all whether failure to pay taxes or failure to file taxes constitutes tax evasion it does not that's failure to file that's failure to pay and failure to file which then became the basis for judge Seibert to withhold acceptance or responsibility points but that's different than saying your client didn't understand the nature of the charges that's him saying that's basically you're saying he didn't understand that there might be what I'm saying is that neither the district court nor the government nor anyone told him what the nature of the offense was or ensure that he understood it it could have been a usually in a guilty plea either the government or the court says these are the elements that wasn't done here correct but in the discussion of what happened in his admissions did he not admit to all of the elements of the crime no he did not what he did not what did he not let's let's look at that issue of levy enforcement because he was clear and his lawyer was clear that he did cash he did not admit to he admitted well he did at some point factually admit to all of the elements yes no that but that's not the inquiry the inquiry is whether isn't whether he factually allocated sufficiently rule 11 b1g requires the court to inform him of the nature of his offense and because it failed to do so here utterly and entirely didn't even come close by asking the government for example to summarize let's assume there was an error we're on plain error review yes we are is what's the miscarriage of justice when this former lawyer admits factually to all the elements of the crime well the the the facts that he lost were when the district court relied on this muddled plea proceeding and his and his inability to offer a a a clear factual allegation allocution and sentenced him this 62 year old first time offender on an income tax case to three years of prison against a five year statutory maximum and again I'll go back to Lloyd why wasn't there plain error in Lloyd because Lloyd received the statutory minimum sentence he couldn't have done any better there was no statutory minimum unreasonable sense that that's not we haven't made that argument judge that's why I asked you why why are you making that why are you saying that that's relevant to a substantial right because that is that is the way that in a trial is he aware of the fact that if he goes to trial and they prove that he did cash half a million dollars of checks to avoid levies and that he created a shell corporation to avoid uh identifying income that he'll get a sophisticated means enhancement he could face 60 months in prison is he aware of that yes he is in fact he gave me an email specifically saying that I actually anticipated that question he is prep he understands the risks of what he is asking for he does but if he goes to trial and he loses he because your brief in its analysis says he was guaranteed that you know he he would get the 36 months anyhow and I don't see how that's guaranteed in the slightest well he'd get at least 36 months because he wouldn't get credit for acceptance of responsibility if he went to trial he didn't get acceptance responsibility here well that's right and that wasn't and he wasn't guaranteed that anyhow it couldn't be understood I have I don't I don't understand how the acceptance of responsibility is relevant in any way shape or form because of the fact that he was not informed of the nature of the offense and also I don't want to wait how is is not getting the acceptance of responsibility somehow relevant to his knowing and voluntary plea oh that that goes to the plain error that the fact that he didn't get acceptance of responsibility goes to satisfying plain error because again for the same reason that there wasn't plain error in Lloyd because he goes he didn't plead to all the all the factual allegations of the complaint he he didn't reasonable for a judge to conclude that he didn't judge judge he didn't plead to one that even the government said he didn't commit the government itself said that he yes he cashed checks but the government said that he didn't cash checks to avoid levy enhancement and that was the reason that everything ran off the rails what did he not understand what he didn't understand was that there had to be a willful that there were the elements of tax evasion it has to be willful willfulness yes he did but he didn't he wasn't told you have to have affirmative acts of evasion went at the time he pled guilty but he wasn't told that that was what was required and he could have for example asked for a break or he could have known with respect to the tax levy he could have said look I I'm not disputing he did say I'm not disputing that I cashed the checks he could have said I cashed the checks to hide it from the IRS but that's not what was asked what was charged was you cashed the checks to avoid levy enhancement and as a factual matter he could not truthfully allocate to that and the government so stated thank you have some time for the court at the district court level your honor there was no error in the plea proceeding certainly no plain error and anything that did not a model of clarity though right certainly were you there yes this this was my case I was I would represent why don't you just to avoid all of this ask the judge to remind the defendant of what the certainly in retrospect your honor that would have been the the appropriate thing to do you know reading the elements some of the the non exhaustive examples of things that the government and the court can do to make sure that rule 11 is satisfied could have been done however the the rule by its text and by the case law from this court is not a a a rule of form over substance the the court has been very clear that there is no particular formula or script that that the district court would have taken about 30 seconds in that proceeding has now spawned briefs and judges time and clerks time and court time and all of that and certainly and certainly judge in retrospect if if the if the question could have been put to the defendant have you gone over the indictment with with defense counsel I agree that would have been best practice however the issue before the court today can really be resolved by looking at the four corners of the plea transcript on about a page and a half at 834 the defendant Mr. Terry is asked to explain what he did with respect to count two and he gives a verbatim recitation of the statutory language all three elements are spelled out almost to the the letter the court then ask how did you do that referring to the quote specific acts alleged here in the indictment and the defendant allocutes to at least four acts of evasion right right there in in that in that piece if the allocution and the plea proceeding had stopped right then I don't think that there would be any reason to question what what had what had transpired because I mean the transcript maybe it's cherry picking but in the transcript you seem to be saying that it wasn't sufficient right your honor we when the when the judge judge cyber went beyond that point and started inquiring into additional relevant conduct and additional acts of evasion the interjections from defense counsel were troubling to me however I don't think that that that should impugn or call into question anything that happened before that point certainly you know my concern was having a clean record and and I will admit that the the way that the colloquy was going was was of some concern to me but when you have the benefit of the transcript as we do here today it's quite clear that the defendant knew the elements of the the offense he gave them to the court almost verbatim I think to have asked the the court or the government to then you know ask the defendant if he was aware the elements of the offense would have been redundant and unnecessary again the the court as as Lloyd dictates or suggests I should say ask the defendant to explain in his own words what he did on several occasions the defendant allocated succinctly to several acts of evasion really only disputing the last two which formed the basis for the guidelines enhancement during sentencing litigation and I think your honor when you when you look at the portion of the the transcript where the defense attorney is interjecting this is this is good lawyering frankly on his part this was a a litigation strategy that was being employed where Mr. Terry would allocute and admit to only the bare minimum of conduct to preserve all possible sentencing arguments which they did during several rounds of briefing during the sentencing litigation phase there was never a point where the defendant you know through multiple rounds of briefing or even during the sentence proceeding said oh tax evasion I had no idea because that's not what occurred he he evinced a clear understanding throughout the plea proceeding and I would argue that the arguments over the relevant conduct that he disputed at that proceeding shows that he understood down to the down to the letter I mean you have a defendant who no he was not asked did you go over the indictment but he's actively referring to it at the court's direction throughout the plea proceeding and he's he's arguing about particular clauses down to the word I mean there was one instance where he asked can I can I read he had gone over the indictment it was it was more than apparent he was I mean it would it have been best practice for the court to turn to me and say you know government can you please outline the nature of the government's proof if this case had proceeded to trial certainly we we wouldn't we do follow a script most judges in the in the southern district I guess it's not so common in the eastern it is common I but I again judge I think that the reason why we went off script in this case was because the defendant and his counsel were executing a litigation strategy that was designed to admit the bare minimum at the plea proceeding but that's you're allowed to admit the bare minimum you certainly are that you seem to take issue with that at the at the plea proceeding you seem to suggest that unless he was prepared to admit to all the affirmative acts that it wasn't a sufficient allocution you have been wrong about that I think you probably were wrong about that yes that was what you said right I I was wrong about it I think again my concern was a clean record I was concerned with the amount of interjection by the defense attorney certainly looking back at the at the at the complete record which is which the court is entitled to do there's no question however that the defendant knew exactly what he was doing tax evasion is not a complicated crime he admitted to it he gave the statutory language himself without prompting he admitted to multiple acts of evasion when the court asked him to describe his own conduct so so my comments at the plea proceeding notwithstanding the issue and analysis whether the defendant was adequately informed and aware of the nature of the offense and he certainly was I don't believe that anything that occurred during the plea proceeding impacted his his decision whether or not to to plead guilty I think this is a clear case where a high risk high reward litigation strategy vis-a-vis the guidelines was employed it backfired it didn't work and there's some buyer's remorse with the sentence although I do think it's worth pointing out that even if the court had given the defendant acceptance of responsibility points and his base his total offense level was lowered from 24 to 21 the guidelines which of course are advisory still would have been 37 to 46 months so he's still under the guidelines if he got what he wanted so I don't think that there's any error here much less plain error so anything that that occurred it during the plea proceeding was certainly harmless and certainly didn't affect the fairness or the integrity of the proceedings themselves and unless there are any other questions I'll yield the balance of my time thank you we'll hear the rebuttal thank you you know it was in McCarthy 50 years ago that the Supreme Court said that in order for a plea to be voluntary the defendant has to have in relation to the facts and that is why we have rule 11 and that is why we have that core requirement of informing a defendant at the time of his plea of the nature of the offense and why a district court is responsible for ensuring that he understands it and that did not happen here and no appellate wait so he recited all the elements in his allocution which appears to have been written out and the judge should have said do you really understand what you just said and do you can you explain it for me and define terms are you talking about the initial allocution of pages 20 the entire colloquy is about two affirmative acts which are unnecessary it seems to me that you could have agreed to disagree on that and the judge would have been free to take the plea and then you would have fought it out at sentencing as you did right you can't commit tax evasion by He admitted to affirmative acts. He said in the appendix the judge asked him he asked if you filed tax returns were false and so far as they failed to report income including non-employee compensation that you derived from law firm number one to respond with respect to those two tax years yes. Yes. So he admits that he filed false income tax numbers. Yes he does admit that he No appellate court has ever done what what it sounds like is happening here today which is to comb through the record find the factual allegations the allegations not the elements but the factual allegations that the defendant admitted to and say see he admitted to enough allegations therefore we have reason to conclude that he understood the nature of the offense. Well if we disagree Thank you very much. Unless the court has any further questions for me. Thank you. We'll reserve decision. Thank you.