Amicus Curiae Brief — In re Goulding

eme Court, US

991369 JAN0 3200

No.

aati OFFICE QE IHE CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

IN RE: RANDALL S. GOULDING

On Petition For Issuance of a Writ of Mandamus

To The Court of Appeals For The Seventh Circuit

Since The Conviction Resulted From:

(4) IRS Agent Evidence Tampering,

(2) Third-party Contacts Made by Justice Cummings,

(3) Seventh Circuit’s Cover-up of Doctored Evidence And IRS

Agent Fraud,

(4) Seventh Circuit’s Opinions Imbued With Patently False

Factual Conclusions, Designed to Preclude Review.

Randall S. Goulding, Pro se

3000 Dundee Rd.

Suite 105

Northbrook, IL 60062

(847) 291-4200

INTRODUCTORY STATEMENT

Petitioner’s defense included good faith and invidious initiation of

an undercover sting operation - that the criminal investigation and

consequent prosecution would not have occurred but for his

speaking out against IRS agents and his civil rights suit. Since the

trial and the conviction, Petitioner:

uncovered IRS agent evidence-tampering concerning the

very undercover audio and video tapes which were the sine

qua non of the conviction (Appendix E).

discovered that the senior panel member in the original

appeal made third party, extra-judicial, off-the-record

contacts (Appendix F).

secured from the government previously withheld,

exculpatory evidence, including evidence:

that Goulding was unaware of the very

reporting requirement for which he was

convicted of not observing,

that the IRS had admittedly engaged in

illegal secret surveillance of Goulding, prior

to any criminal investigation, and

that the mysteriously missing yellow sheet

of paper which the IRS alleges to have lost,

the cornerstone of the government’s case, in

fact, never existed.

uncovered a previously concealed under oath admission to

surreptitious contacts of Goulding’s clients with special

inducements to fire Goulding as their lawyer (June 2, 1994

Order Taking Judicial Notice of Feinglass’s statement) -

while IRS Agent Feinglass rendered a contrary Affidavit in

order to cause the dismissal of Goulding’s Civil Rights Suit

and to facilitate the denial of Goulding’s Motion for

Discovery in this criminal matter. (Appendix G).

QUESTION PRESENTED FOR REVIEW

Whether the Court of Appeals for the Seventh Circuit abused its

discretion when it engaged in the following conduct, and if so,

whether such abuse of discretion warrants this Court’s rarely

exercised mandamus powers:

a. The Seventh Circuit’s opinions conspicuously omit the fact

that the conviction resulted from evidence tampering by IRS

Agents (An Audio Engineer examined the tapes with a newly

discovered audio analysis, concluding that tampering occurred.

Appendix E);

b. Justice Cummings’ made secret third-party, extra-judicial,

contacts (Appendix F);

c. The Seventh Circuit ignored and covered-up doctored

evidence, causing the erosion of important legal doctrines

effectively eradicated by the Seventh Circuit’s implementation

of what may be termed “rug immunity.” - “Rug immunity” is the

judiciary’s cover-up of illegal government activities (including

here, a sinister government plot, admitted to, under oath, by IRS

Agent Feinglass, and courageously disclosed by a government

official - IRS agents and attorneys made special offers to

Goulding’s clients: tax incentives to induce his clients to fire

him as their attorney and to alter their testimony (Appendix G)),

thus immunizing government officials from the burdens of their

illegality, while simultaneously destroying fundamental and

long-standing traditional constitutional protections (including

here, the First, Fifth and Sixth Amendments to the United States

Constitution, and concealment of IRS misconduct and

vindictiveness in violation of Brady v. Maryland, 373 U.S. 83

(1963)), and undermining more liberal and constitutionally

friendly pronouncements of this Court; and

d. The Seventh Circuit’s opinions were so imbued with patently

false factual conclusions and gross factual inaccuracies, that the

only rational explanation is a design to preclude any review by

certiorari, obscuring significant legal issues through such false

factual portrayals?

ill

PARTIES

Randall S. Goulding is the only party seeking relief.

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TABLE OF CONTENTS

Introductory Statement

Question Presented for Review

Parties

Table of Contents

Table of Authorities

Prayer for Relief

Statement of Jurisdiction and Opinions Below

Reasons for Granting the Writ

Summary of the Arguments

Statement of the Case

a. Procedural History.

b. History of Proceedings.

c. Excluded Evidence.

Facts - Precipitating The Sting Operation:

the Appearance of Retaliation for Goulding’s

Exercise of First Amendment and Other

Statutory Rights.

d. Evidence at Trial - The Sting Operation.

ARGUMENT

1. Circuit Court Rule 22.2(a)(1)(B) Compliance -

Il.

Goulding Exercised Due Diligence in Discovering the

Frauds on the Court, e.g. the Newly Discovered

Evidence -- Withheld, Concealed and Compromised

by Government Agents.

The Newly Discovered Evidence Is Substantial and

Warrants the Issuance of Mandamus.

A. IRS Employees Tampered with the Tape

Recordings of the Undercover Operation, Destroying

Exculpatory Evidence.

B. Prejudice Resulted from the Tampering.

C. In addition to Evidence Tampering, the

Government Withheld Critical Evidence:

1. The Withheld Criminal Investigation

Referral Report Discloses an Interview of

Goulding, Strongly Suggesting That Goulding

Was Not Aware of the Filing Requirement.

The Government Withheld Evidence That

Goulding Lacked the Requisite Knowledge

for Conviction Pursuant to 31 U.S.C. §§ 5316

and 5322 (Counts 17 and 18)

2. Abuse of the Criminal Process - Even More

Egregious Than the Withholding of Critical

Evidence - the IRS Specifically Designed the

Undercover Operation to Exploit Goulding’s Lack

of Such Knowledge.

3. Additional Withheld Critical Evidence

included IRS Agents’ Vindictive and Illegal

Acts; Making Illegal “Electronic Surveillance

of Goulding’s Conversations,” Even Before

Any Criminal Investigation.

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10

13

14

14

14

14

15

Ill.

4. Additional Withheld Critical

Evidence included That the Mysteriously

Missing Yellow Sheet of Paper Which the

Government Alleges to Have Lost, in Fact

Never Existed; it Was Merely a

Prosecutorial Creation.

Previously Known Information and Analysis of the

15

Prejudicial Effect of Withheld, Concealed and Destroyed

Evidence Given the Trial Court’s Prohibition of

Evidence Concerning Bias of Agents Who Testified,

Cumulatively, Clearly Demonstrate the Wrongfulness of

the Conviction.

Goulding’: Conduct for Which He Was

Prosecuted Was Not Clearly Wrongful - His

Activities Were Consistent with That of an

Attorney Properly Preserving the Confidentiality

of His Client.

Justice Cummings’ third-party, extra-judicial,

off-the-record contacts.

A. Rug Immunity

B. Gross Factual Inaccuracies comprise the Seventh

Circuit’s Opinion.

C. The Seventh Circuit’s Attitude Underwent a

Mysteriously Marked Transformation Between the

Time of the Oral Argument and the Opinion.

D. The Opinion is in Disharmony with Ratz/af.

E. The Seventh Circuit’s Opinions Were Arbitrary

and Capricious.

17

26

CONCLUSION 27

Appendices:

Opinion of the United States Court of Appeals for the

Seventh Circuit (Denying Second 28 U.S.C. § 2255

Petition) App. A

Order of the United States Court of Appeals for the Seventh

Circuit Denying Rehearing App. B

Opinion of the United States Court of Appeals for the

Seventh Circuit (Denying Original 28 U.S.C. § 2255

Petition) App. C

Opinion of the United States District Court (Denying

Original 28 U.S.C. § 2255 Petition) App. D

Acoustical Engineer Thomas Danley’s Report on Randall S.

Goulding Tape Acoustical Analysis App. E

Letter from Justice Walter J. Cummings to Sheldon Drobny

Re: United States v. Goulding App. F

Declaration of IRS Office of Chief Counsel Attorney Robert

Ratchford - re January 18, 1985 interview of IRS Agent

Feinglass, filed by the National Association of Criminal

Defense Lawyers, amicus curiae App. G

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TABLE OF AUTHORITIES

Cases Page

Adams v. United States ex. rel. McCann, 317 U.S. 269 (1942) 19

Brady v. Maryland, 373 U.S. 83 (1963) ii,2,3,10,13,20,25

Drobny v. Commissioner, 86 TC 1326 (1986) 1]

Elkins v. United States, 364 U.S. 206 (1960) 18

Goulding v. Feinglass, 811 F.2d 1099 (7th Cir. 1987) 11,12

Jacobson v. United States, 503 U.S. 540 (1992) 6,13,16

Mapp v. Ohio, supra, 367 U.S. 643 (1961) 19

Offutt v. United States, 348 U.S. 11 (1954) 19

Olmstead v United States, 277 US 438 (1928) 19

People v. Defore, 242 NY 12 (1926) 18

Ratzlaf v. United States, 510 U.S. 135 (1994) 15,21,23,26,27

United States v. Boyd, et al., No. 89 CR 908, N.D. Ill., E.D.,

Sept. 21, 1993 19

United States v. Burnside, et al., No. 89 CR 909, N.D. Ill, E.D..,

June 4, 1993 19

United States v. Cortina, 630 F.2d 1207 (7 Cir. 1980) 19

United States v. Freymuller, 571 F.Supp. 61 (N.D. Ill. 1983) 19

United States v. DeGerratto, 876 F.2d 576 (7th Cir. 1989) 17

United States v. Goulding, 26 F.3d 656 (7 Cir. 1994)

l

United States v. Granda, 565 F.2d 922 at 924 (Sth Cir. 1978) 15,26

Constitutional Provisions

First Amendment to the United States Constitution

Fifth Amendment to the United States Constitution

Sixth Amendment to the United States Constitution

Statutes & Rules

5 U.S.C. § 552, Freedom of Information Act

18 U.S.C. § 371

18 U.S.C. § +341

28 U.S.C. § 1651

28 U.S.C. § 2241

28 U.S.C. § 2255

31 U.S.C. § 5316

31 U.S.C. § 5322

Circuit Court Rule 22.2(a)

Federal Rule of Criminal Procedure 16(a)(2)

4,13,28

11,3,13,28

11,3,13,17,28

13,16

9

1,4,9,10,20

3,14

14

1,9,27

25

PRAYER FOR RELIEF

Petitioner Randall S. Goulding, pro se, respectfully prays that a writ

of mandamus issue to review the judgments and opinions of the

United States Court of Appeals for the Seventh Circuit.

STATEMENT OF JURISDICTION AND OPINIONS BELOW

Jurisdiction for this matter arises under 28 U.S.C. §1651. The Court

of Appeals order for which mandamus is sought (denying

Petitioner’s Motion for Leave to file a second 28 U.S.C. § 2255

Petition) is unpublished, attached as Appendix A. The Court of

Appeals’ order denying the motion for Rehearing is attached as

Appendix B. The Court of Appeals’ opinion affirming the denial of

Petitioner’s first 28 U.S.C. § 2255 Petition, also unpublished, is

attached as Appendix C. The District Court opinion denying

Petitioner’s first 28 U.S.C. § 2255 Petition, also unpublished, is

attached to this petition as Appendix D. The opinion denying

Petitioner relief on direct appeal is published at 26 F.3d 656.

REASONS FOR GRANTING THE WRIT

Now evident is a clear pattern of abuse - IRS illegality and potential

for vindictive and retaliatory criminal investigation and prosecution,

due to Goulding’s civil rights suit. Also now uncovered - IRS agent

evidence-tampering. But, IRS agents presented false affidavits to

avoid implications of their illegal conduct. Perpetrators of frauds

should not be entitled to benefit therefrom merely because their

frauds were not previously susceptible to discovery. The Seventh

Circuit’s interpretation of Circuit Court Rule 22.2(a)(1) to the

contrary, effectively precluding relief unless the victim fortuitously

discovers the fraud earlier', offends and undermines Fifth

'For example: conspicuously absent from the Seventh Circuit's opinion: IRS agents

and attorneys made special offers to Goulding’s clients: tax incentives to induce his

clients to fire him as their attorney and to alter their testimony. On April 19, 1994,

IRS attorney Ratchford courageously disclosed (after which he was immediately

removed from the case) excerpts of an internal, secret IRS memorandum of an

interview, under oath, of IRS Agent Feinglass (a defendant in Goulding’s Civil

Rights Action), admitting to this practice, originally denied by the IRS in order to

fraudulently secure favorable rulings, including on its motion in imine in this case.

Among other things, Goulding was prevented from demonstrating to the jury, bias of

1

Amendment due process, Sixth Amendment right to confrontation

and Brady v. Maryland.

The Seventh Circuit’s opinions and ex-parte activities collectively, if

left alone, would undermine public confidence in the outcome and in

the appellate process. Such exceptional circumstances warrant the

relief here sought. Relief is not available from any other court or

from any other source. A kinder gentler government would be good,

but honest government is essential to a free society.

Any reluctance to exercise mandamus powers should be tempered

with the recognition that Goulding is innocent! It is a particularly

sad commentary on a judicial system which here refused opportunity

after opportunity to determine guilt or innocence; refusing on each

occasion to expose IRS corruption. It is most unfortunate that the

Seventh Circuit consistently adopts the government’s position and

avoids disclosing IRS wrongdoing in the face of proven and even

admitted, withheld evidence of IRS corruption. So much for the

proposition, long lost in the archives of the Seventh Circuit, that “It

is better that a guilty man go free than to convict an innocent man.”

SUMMARY OF THE ARGUMENTS

The Seventh Circuit abused its discretion, refusing to grant a hearing

upon uncovering of IRS agent evidence-tampering of the very

undercover audio and video tapes resulting in the conviction; these

tapes were the sine qua non of the conviction. -- An Audio Engineer

identified three distinct patterns or indicia of tampering in the very

tapes which IRS agents characterized in their testimony as involving

“accidental” erasures and failure to turn on the tape recorder’. Any

reasonably prudent judicial body would permit an examination of the

original tapes, still in the IRS’s carefully guarded possession.

Additionally, the Seventh Circuit’s senior panel member in the

agents, fellow employees of those who testified at trial. Appendix G.

Conceptually, this is not dissimilar to the DNA testing which resulted in the recent

freeing of so many wrongfully convicted of rape.

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original appeal made third party, extra-judicial, off-the-record

contacts in a matter marred with an abundance of IRS misconduct,

some of which was even admitted. Newly discovered, withheld,

exculpatory evidence, includes evidence:

that Goulding was unaware of the very reporting

requirement for which he was convicted of not observing,

that the IRS admitted to an illegal secret surveillance of

Goulding, prior to any criminal investigation, and

that the mysteriously missing yellow sheet of paper which

the government alleges to have lost, the cornerstone of the

government’s case, never existed.

This withheld evidence, previously denied by IRS agents, should

have been available for cross examination. Its absence prevented

Goulding from cross-examining or developing the bias of the agents

who testified at trial, thus infringing upon his Sixth Amendment

right to confrontation, as well as Fifth Amendment due process and

Brady v. Maryland. The IRS’s failure to turn over this evidence and

its false denial of its existence also facilitated the trial court’s denial

of Goulding’s Motion to Dismiss for Governmental Vindictiveness.

Finally, the overwhelming evidence now clearly establishes an IRS

agent conspiracy, including the illegal coverup using false affidavits

defrauding Congress, the Seventh Circuit and the trial court.

’

STATEMENT OF THE CASE

a. Procedural History. Petitioner Randall Goulding and co-

defendant Michael Ushijima, both Illinois practicing attorneys, were

charged in an eighteen-count indictment: one count of conspiracy to

defraud (18 U.S.C. § 371), two counts of failure to report the

transportation of monetary instruments (31 U.S.C. § 5316) and 15

counts of mail fraud (18 U.S.C. § 1341). They were convicted in a

jury trial before the Hon. James B. Moran, Chief Judge of the

District Court for the Northern District of Illinois. Goulding was

sentenced to six months imprisonment, restitution, community

service, and a five-year term of probation. The Seventh Circuit

affirmed on May 25, 1994 and denied Petitions for rehearing, June

20, 1994. Certiorari was denied. Goulding’s first 28 U.S.C. § 2255

petition was denied December 5, 1994, affirmed on appeal and

certiorari denied. In December 1999, the Seventh Circuit denied

Goulding’s petition to file a second 28 U.S.C. § 2255 petition. The

instant Petition For Issuance of a Writ of Mandamus, seeks relief

from that and/or other Seventh Circuit actions in this case.

b. History of Proceedings. The IRS investigation included a 1986

and 1987 undercover sting operation. Years later, in May 1991,

Goulding was indicted. In June 1992, he was convicted of all

eighteen counts. Michael Ushijima, an attorney specializing in

international transactions, who Goulding hired, was also convicted.

c. Excluded Evidence. Responding to IRS Agent abuses, Goulding,

filed a Civil Rights Suit. Immediately thereafter, the defendant

Agents initiated the criminal investigation which prompted the

undercover sting, the indictment and the conviction. The trial court

granted the government’s motion in /imine, prohibiting any reference

to the Civil Rights Suit. The jury was not aware of agent animosity

and witnesses’ bias against Goulding.

FACTS - PRECIPITATING THE STING OPERATION:

THE APPEARANCE OF RETALIATION FOR

GOULDING’S EXERCISE OF FIRST AMENDMENT AND

OTHER STATUTORY RIGHTS.

The criminal investigation, as well as several additional penal

measures, followed soon after Goulding filed his civil rights suit.

Both of Goulding’s civil rights lawyers were also targeted for a

Grand Jury Investigation after filing the civil rights suit (Doc. 143,

Ex. C’). According to the unrebutted affidavit of Howard

Emirhanian, retired IRS Special Agent, insufficient investigative

reasons existed to commence an undercover sting operation. He

further opined that investigative reasons to continue the undercover

*Such references pertain to the criminal trial document number. “CR” refers to the

transcript page number in the criminal trial.

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sting operation beyond the initial, December 18, 1986 undercover

meeting were insufficient (Doc. 89). No charges were brought as a

result of any activity by Goulding or his associates, other than from

the undercover sting operation (Doc. 143, Ex. C). No evidence exists

that Goulding ever before participated in any effort to aid a client’s

overseas cash transfer, either before or after the undercover sting

operation (Doc. 89 4 8-12). The charges were obscure, mala

prohibitum, not mala in se.

Dietz and Feinglass, the IRS Agents Goulding sued, have a

reputation for vindictiveness (Doc. 143, App. C, Affidavits). While

IRS Agent Feinglass rendered a contrary affidavit in order to cause

the dismissal of Goulding’s Civil Rights Suit and to facilitate the

denial of Goulding’s Motion for Discovery, the IRS concealed

Feinglass’s under oath admission to surreptitious contacts of

Goulding’s clients with special inducements to fire Goulding as their

lawyer (June 2, 1994 Order Taking Judicial Notice of Feinglass’s

statement - Appendix G). The IRS continued to cover-up and refuse

to divulge or disclose the Criminal Investigation Referral Reports,

despite the foregoing indicia of vindictiveness and two (2) court

orders which required production (which were thereafter vacated,

despite finding the requisite “colorable basis” for the defense).

The prosecution, during closing argument, made numerous false

Statements, many going to the very heart of the defense. At least one

was repeated even following defense objection (Doc. 143, Ex. B and

Doc. 161). Twice, the prosecutors falsely told the jury that Goulding

actually admitted that Goulding was “breaking the law.”

The criminal investigation and therefore the sting and the

prosecution would not have occurred but for Goulding’s civil rights

suit. Nor has the government ever denied that the suit prompted the

referral, the criminal investigation and thus, the prosecution.

d. Evidence at Trial - The Sting Operation. The undercover agent

(UCA), introduced to Goulding by a former client (Evegelatos),

expressly sought Goulding’s confidential advice and legal assistance

in investing his past “gambling” money and other past “unreported

5

income.” The UCA indicated a business need for a corporation in

the Cayman Islands (12/18/86, pp.1 1-14; 2/24/87, pp.28,29,50,66;

5/19/87, p.42) and that his monetary accumulations were from prior

years - some from a past crime. None involved ongoing or

contemplated future criminal activity (CR 494-692). Except for the

prosecution’s closing argument, there is very little dispute as to the

facts, nearly all of which is on audio or video tape’.

In the government’s attempt to establish intent and/or predisposition,

James Evegelatos, an admitted life long - “cheat and a con man”

(CR.178), testified that years earlier Goulding prepared a flow chart

on yellow paper, which was among the several boxes of documents

the IRS took from his possession. Agent Hejza testified that he saw

the “missing” yellow sheet of paper, but never photocopied or took

such paper, among the documents he obtained.

The only “hard evidence” of predisposition, this yellow sheet of

paper, was the cornerstone of the government’s case. Yet, it was

never produced at trial; the IRS claims it was lost. This document

also was never before mentioned in any document or testimony, until

trial, just two months after the decision in U.S. v. Jacobson, 503 U.S.

540 (1992), holding that the government must have evidence of

predisposition toward criminality before first subjecting one to a

sting. It was not mentioned in any statement by Evegelatos. It was

not mentioned in Agent Hejza’s memorandum of interview of

Evegelatos. It was not mentioned in Hejza’s grand jury testimony.

It was not mentioned in Hejza’s affidavit in opposition to Goulding’s

Motion to Dismiss. It was not mentioned in any of the numerous

briefs in opposition to Goulding’s Motion to Dismiss, for Discovery

or for reconsideration of the Discovery. It was not mentioned in

response to the unrebutted Emirhanian Affidavit (Doc. 89),

concluding that there were insufficient investigative reasons to

imitate the sting operation or to continue it beyond the first meeting.

It appeared only once its need became evident, shortly after

Jacobson was argued before this Court, clarifying the need for

“It was only recently discovered that this evidence was compromised, per the report

of an audio engineer, using technology invented since the trial.

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evidence of predisposition.

Since this was not Goulding’s area of expertise, he hired Ushijima,

paying him 4 of the $5,000 retainer. Both billed only at their normal

billing rates. Ushijima testified that his responsibilities included

foreign transactions and that Goulding twice told him to make sure

everything was done legally. He testified that before boarding the

airplane on February 7, 1987, he divided up the UCA’s $30,000

among the five individuals with whom he traveled, so that no one

person carried more than $10,000, so as to legally avoid the

declaration requirement (Form 6059-B). Several of the people

traveling with Ushijima corroborated his testimony. There was no

evidence that either defendant knew of the separate reporting

requirement (Form 4790) for which they were prosecuted. Nor did

the government make any attempt to bring it to their attention before

prosecuting. Throughout the undercover operation the UCA referred

only to “the form on the plane,” which is the customs declaration

form, not the Form 4790 for which the penal provisions apply and

for which defendants were prosecuted.

The UCA wanted to make investments with cash, some of which was

excluded from prior tax returns (12/18/86, pp. 12, 14). Goulding

advised -- file an amended return and pay the tax. The UCA

countered with his desire to avoid his ex-wife’s discovery of his cash

horde and to avoid incrimination. Defendants recommended

incorporation to insulate the UCA from personal liability for the

UCA’s intended acquisition of a “bowling alley ... restaurant [and]

liquor license” (2/24/87, pp. 50, 58, 66; 5/19/87, p. 42). At 2/24/87,

pp. 28, 29, Ushijima stated:

a business operation like a bowling alley ... a restaurant have a

lot of liabilities ... you want to isolate that in a company.... You

don’t want that real estate subjected to a guy slipping ina

bowling alley or eating bad food ... advising a client who wanted

to, ah, buy and own and operate a bowling alley/restaurant,

wouldn’t you incorporate the bowling alley and the restaurant

separately? [Y]ou’d have two separate corporations ... there

may be three.... That’s only good business practice.

Only after Evegelatos’ suggestion and following the first two of six

different admonitions that the UCA file amended returns (12/18/86,

p. 13, 15, 26, 35; 02/06/87, p. 11; 03/05/87, p. 12), and after the

UCA expressed investment desires requiring a corporation, did

Goulding advise him to incorporate, but that a domestic

incorporation would incriminate him. Only then did Goulding

suggest that the UCA himself could bring the money to the Cayman

Islands and form his corporation there (12/18/86, pp. 11-15).

On February 7, 1987, the UCA informed Goulding that some of the

funds were illegal gambling proceeds which he had not reported on

his income tax returns. He assured Goulding that no portion was

from drugs and that he was no longer involved in gambling;

Goulding advised the UCA as to the wisdom of abandoning his

purported illegal activities (2/6/87, p. 4).°

Given the likelihood of an incriminating disclosure arising out of a

domestic incorporation and capitalization for the UCA’s

contemplated business acquisitions, coupled with the UCA’s other

articulated secrecy needs (including as to his ex-wife), Ushijima

formed the corporation in Grand Cayman (12/18/88, pp. 11-15;

2/24/87, pp. 28, 29). To account for the UCA’s transfer of funds

from the Cayman corporation to the Minnesota subsidiary, Goulding

prepared promissory notes, requiring repayment.

Goulding also advised the UCA that tax returns should be filed

where required (12/18/86, pp26, 27, 39; 2/24/87, pp 30, 32, 51;

5/19/87, pp 32, 43); and to pay taxes on money brought into the

United States (2/6/87, p 11; 5/19/87, pp37, 38, 40, 42, 43). Goulding

advised the UCA not to stop filing Income Tax returns, despite the

UCA’s contrary suggestion (5/19/87, p34). Goulding advised him

that current income, even if earned abroad, was taxable and should

be included on his tax return (12/18/86, pp 26, 27, 39; 2/6/87, p 11;

5/19/87, pp 32, 37, 38, 40, 42). Goulding advised that tax shelters

*Both defendants queried the UCA as to the possibility of the cash being drug-

related. However, the UCA consistently denied drug activities (12/18/86, pp. 37,

62; 2/6/87, p. 8; 5/8/87, p. 3).

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(Goulding’s area of expertise) would not provide the UCA with any

substantial tax benefit in 1986, being so late in the year (12/18/86,

pp 54-55), refusing to facilitate an erroneous tax benefit.

Ushijima testified that at all times during this transaction, he

believed their actions to be legal. No current funds on which taxes

were due were involved; no contemplated current or ongoing

criminal activities were stated by the UCA. Ushijima was aware of a

specific Supreme Court case which held the prior filing of a false tax

return was not an ongoing crime. Any crime which had occurred in

the past by failing to declare the income was completed at the time

the false return was filed in the prior year. Any further dealing with

undeclared funds on which taxes were not paid was not another

crime (CR. 719). Ushijima was unaware of a “declaration”

requirement if no more than $10,000 in cash was taken from the

United States by any one person. He was not aware of any

“declaration” or “reporting” requirement in connection with his

mailing of bearer bonds outside of the United States. He was not

aware of any “reporting” requirement until he was indicted.

ARGUMENT

For purposes of 28 U.S.C. §2255, Goulding remains in federal

custody, under district court sentence and his freedom is

substantially impaired. 28 U.S.C. §2241(3)(A) requires that before

“a second ... application [is filed], the applicant shall move in the

appropriate court of appeals for an order authorizing the district

court to consider the application.” Goulding petitioned the Seventh

Circuit, seeking an order authorizing the district court to consider the

application. Except as otherwise specified, the information and

evidentiary materials described therein were learned or secured since

the denial of the original petition.

I. Circuit Court Rule 22.2(a)(1)(B) Compliance -

Goulding Exercised Due Diligence in Discovering the Frauds on

the Court, e.g. the Newly Discovered Evidence -- Withheld,

Concealed and Compromised by Government Agents.

Pursuant to Circuit Court Rule 22.2(a)1)(B), Goulding petitioned

the Seventh Circuit to set aside the judgment due to the frauds on the

court or, in the alternative, for authorization to file a second 28

U.S.C. §2255 Petition. The petition’s factual predicate and claims

included newly discovered evidence (Brady v. Maryland materials,

373 U.S. 83 (1963)), learned or secured since the denial of the

original petition, were not then known or reasonably susceptible to

discovery; they were withheld, secreted and compromised by IRS

agents. Such matters were proved by reference to exhibits in the

petition, and by independent analysis of the undercover tapes. Due

diligence was exercised in securing and presenting this newly

discovered evidence. Viewed in light of the evidence as a whole,

such facts suffice to establish by clear and convincing evidence that

no reasonable factfinder would have found Goulding guilty.° Yet,

the Seventh Circuit denied relief, refusing to even investigate the

IRS compromising of the undercover operation tape recordings.

Il. The Newly Discovered Evidence Is Substantial and

Warrants the Issuance of Mandamus.

Fabrications, withholding, secreting and compromising evidence

undermined the verdict, made a farce of the proceedings, denied due

process, warranting relief. Among the more blatant incidents

prompted the National Association of Criminal Defense Lawyers,

amicus curiae,’ to file a motion on May 27, 1994, for the Seventh

Circuit to take judicial notice of a then recent IRS filing of a

previously concealed document in an unrelated case. Therein, an

*While this standard is here satisfied, we seriously question the constitutional

viability of any rule which precludes an innocent person from reversing an

erroneous guilty verdict cultivated by government improprieties, where the evidence

is less than “clear and convincing that no reasonable factfinder would have found

the defendant guilty.” When government impropriety deprives one of a fair trial,

entitlement to a new trial should not be so burdensome. Otherwise, it would be rare

to ever overcome the effects of government illegality. This is particularly true given

certain court’s propensity to avoid embarrassing the government.

’Two amici curiae filed briefs before the Seventh Circuit in the original appeal.

Both concluded that evidence existed supporting Goulding’s contention of IRS

vindictiveness, entitling him to discovery. After initially granting discovery, the

trial court reversed its position. The Court of Appeals upheld the denial of =

discovery, igncring the abundant IRS misconduct. Since that time, much more

evidence, previously concealed by the IRS, has been uncovered.

10

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IRS agent (a defendant in Goulding’s civil rights suit) admitted that

he and other agents surreptitiously contacted Goulding’s clients,

making special offers to induce them to terminate Goulding as their

attorney. Appendix G. The amicus curiae thus brought to the

Appellate Court’s attention the IRS concealment facilitating the

Appellate Court’s erroneous conclusion in the civil rights action:

Goulding v. Feinglass, 811 F.2d 1099, 1104 (7th Cir.1987), cited in

US v. Goulding, 26 F 3d 656, at 662:

“that the agents [sued by Goulding] were merely fulfilling their

duties in investigating potentially abusive tax schemes [and that]

that the evidence of Goulding’s claim of vindictive and outrageous

government conduct was flimsy and meager.”

By contrast, the Feinglass interview (Appendix G, paragraph 8):

Agent Feinglass told . .. Ben Rosenberg, that the IRS would

accept a cash settlement from him, but only if he supplied the IRS

with information and discharged Randall Goulding as his attorney.

This was done per the instructions of IRS legal council [sic],

Lauren Gore and Bill Sabin.*

The IRS concealed this interview (and perhaps others), which

corroborates Goulding’s allegations of misconduct and

vindictiveness on the part of the agents, who apparently instigated

the criminal investigation. This evidence could have been used as a

fertile ground for cross examination of government witnesses.

Evidence of a co-worker’s bias is relevant.

Twelve days following this admission, on January 30, 1985, IRS

District Director J.R. Starkey falsely asserted:

*The Seventh Circuit took judicial notice this document, filed by the IRS in the case

of Drobny v. Commissioner, 86 TC 1326 (1986), wherein Drobny attempted,

unsuccessfully, to reopen such case due to IRS frauds on the court, including by the

same IRS Agent, Irving Feinglass, who Goulding sued and who was instrumental in

referring Goulding for criminal investigation.

11

(a) that Goulding’s “allegations are not supported”; (b) that after a

“thorough” investigation it was “determined that the Revenue

Agents involved were acting in an appropriate manner and that

there was no reason for reassignment of the cases”; (c) there was

“no indication of a lack of professionalism”; (d) that “after

considering the facts presented [the District Director found that]

no conflict or misconduct on the part of the Revenue Agents Dietz

and Feinglass exist[ed].”

Besides being false, this IRS District Director letter, was used in

Goulding v. Feinglass, supra, to falsely demonstrate the IRS’s good

faith. This letter and the concealment of the Feinglass interview

(and perhaps others) were the sine qua non of the grant of summary

judgment in Goulding v. Feinglass, supra, and in granting the

government’s motion in /imine in this case. The combination

perpetrated a fraud on the court in both cases.

Other more recently discovered IRS misconduct includes:

(a) IRS agents tampered with the undercover operation tape

recordings. These tapes were the sine qua non of the conviction.

IRS agents selectively eliminated exculpatory evidence from the

tapes resulting in Goulding’s wrongful conviction. Appendix E.

(b) The IRS improperly withheld at least one interview of

Goulding. The interview evidences his lack of the requisite

knowledge to convict on Counts 17 and 18. Even more egregious

- the IRS then specifically designed the undercover operation to

exploit Goulding’s lack of such knowledge. By design, the

undercover operation became a trap for the unwary innocent.

(c) IRS Agents conducted illegal “electronic surveillance[s] of

Goulding’s conversations,” before any criminal investigation;

further evidencing government vindictiveness.

Tnere is now more evidence that the mysteriously missing yellow

sheet of paper which the IRS alleges to have lost, never existed. In

all the IRS’s documents (since disclosed in partial compliance with

12

the Freedom of Information Act suit, 94 C 5113), the very first

reference to this critical document occurred shortly before trial, long

after all the interviews, document reviews, memoranda, affidavits,

etc. by government personnel. It is now more evident that this

document never existed but was a mere figment of the prosecution’s

imagination; its creation occurred only once needed, only shortly

after the Jacobson case was argued, 503 U.S. 540 (1992), clarifying

the government’s need for such evidence of predisposition.

The issues raised herein, are constitutional -- Sixth Amendment right

to have and to present defense evidence (withheld and secreted by

the government), Fifth Amendment due process and Brady v.

Maryland, 373 U.S. 83 (1963) and First Amendment right to speak

out against illegality without fear of IRS reprisal. Actual prejudice

resulted from the IRS’s concealment and selective compromising

evidence favorable to the defense.

A, IRS Employees Tampered with the Tape Recordings of the

Undercover Operation, Destroying Exculpatory Evidence. Thomas

Danley, Audio Engineer, determined that the tapes used to secure the

conviction, were apparently the subject of tampering. He examined

the video and audio tapes, with a Digital Signal Processing (DSP)

card and Hyperception, a sophisticated sound analysis program.

This technology was developed only within the past few years -

since the trial. The examination uncovered several anomalies in the

very tapes which the IRS agents characterized in their testimony as

involving “accidental” erasures and an “accidental” failure to turn on

the tape recorder. Mr. Danley identified three distinct patterns or

indicia of tampering on those tapes, however, including: background

noise level changes, instances of “dropouts,” and instances of

fundamental output characteristic pattern or feature changes.” Mr.

*According to Mr. Danley’s Report, “every audio recording device and acoustic

environment has its own unique features or ‘fingerpriffts.’” Mr. Danley identified

several instances in which “such features or ‘fingerprints,’ changed during the

course of what purported to be a single taping . . . strongly suggest[ing] the tape was

made with two different setups, under different circumstances (probably at different

locations) and at different times.”

13

Danley’s Report (Appendix E) further provides: “Any one of such

anomalies would suggest the possibility of ‘editing,’ ‘altering’... in

my opinion, with the available information, it does appear that

editing and altering occurred.”

B. Prejudice Resulted from the Tampering. At least once during

the undercover operation, Goulding informed the UCA of his desire

that everything be done legally (consistent with Mr. Ushijima’s

testimony). This exculpatory statement, however, was excluded

from the tapes submitted into evidence.

C. In addition to Evidence Tampering, the Government Withheld

Critical Evidence: 1. The Withheld Criminal Investigation

Referral Report Discloses an Interview of Goulding, Strongly

Suggesting That Goulding Was Not Aware of the Filing

Requirement. Goulding Lacked the Requisite Knowledge for

Conviction under 31 U.S.C. §§ 5316 and 5322 (Counts 17 and 18).

The criminal investigation referral reports an interview of Goulding

candidly “stat[ing] that he [had once deposited] amounts to a ...

Cayman Island Account in currency.” Yet, no form 4970 was filed.

Such a statement to an IRS agent, is compelling evidence that

Goulding was unaware of this form 4970 filing requirement. This

interview, which the IRS concealed until long after the trial, was

incongruous with the prosecution’s trial theory, its briefs, and the

requisite knowledge element for conviction. With this evidence, a

reasonable juror would have concluded that Goulding was unaware

of the requisite filing requirement."°

2. Abuse of the Criminal Process - Even More Egregious

‘It is improper after interviewing Goulding and learning of his lack of knowledge,

to not inform him of this filing requirement (consistent with the law enforcement

objective of assuring compliance). To instead conduct a sting operation to exploit

Goulding’s ignorance of this reporting requirement is an abuse of process. And to so

enlist the aid and assistance of the US Attorney’s office and the federal courts

should be condemned. This evidences agent bias. Such evidence could have

explained why agents lied at trial, and why IRS agents manufactured the

mysteriously missing yellow sheet of paper which the agents allege to have lost, but

which in fact never existed.

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Than the Withholding of Critical Evidence - the IRS Specifically

Designed the Undercover Operation to Exploit Goulding’s Lack

of Such Knowledge.

Not only did the IRS conceal Goulding’s lack of knowledge of this

reporting requirement, but far more egregious - agents specifically

designed the undercover operation to exploit his lack of knowledge.

This misconduct is a particularly egregious form of entrapment. Ata

minimum, the prosecution unjustly precluded Goulding from arguing

to the jury this evidence of his lack of requisite knowledge. The

investigation was not designed to expose existing criminal activity,

but to induce Goulding to engage in conduct which, with the

selective introduction of evidence, was made to appear as a

violation, by illegally preventing the jury from knowing that he was

unaware of this reporting requirement."

kA Additional Withheld Critical Evidence included IRS

Agents’ Vindictive and Illegal Acts; Making Illegal “Electronic

Surveillance of Goulding’s Conversations,” Even Before Any

Criminal Investigation.

Far from being “flimsy and meager” (26 F 3d 656, 662), as the IRS

misled the Seventh Circuit, the withheld criminal investigation

referral report admits to illegal “electronic surveillance of

Goulding’s conversations,” before any criminal investigation."

4. Additional Withheld Critical Evidence included That the

Mysteriously Missing Yellow Sheet of Paper Which the

Government Alleges to Have Lost, in Fact Never Existed; it Was

''The original §2255 petition urged that Goulding had no knowledge of the requisite

Reporting Requirement. In October 1992, O'Hare Airport Commissioner, James

Chronnis, stated that in March 1987 (the time of the transportation), O’Hare Airport,

including in the Eastern Airlines terminals from which Goulding departed, had no

signs advising a traveler what to do if carrying or mailing monetary instruments.

The IRS breached its duty to bring the reporting requirements to Goulding’s

attention before prosecuting. U.S. v. Granda, 565 F.2d 922 at 924 (Sth Cir. 1978),

cited with approval in Ratzlafv. U.S., 510 U.S. 135 (1994).

"Acknowledging the wrongfulness of their conduct in secretly recording Goulding’s

conversations, the previously concealed IRS Report of this matter refers to the

resultant “evidentiary problems” from such activities.

15

Merely a Prosecutorial Creation.

Evidence now abounds that the mysteriously missing yellow paper

which the IRS alleges it lost, never existed. This flow chart, the

cornerstone of the government’s theory of predisposition and intent,

served as the basis for initiating the sting operation. We now know,

however, among all the IRS documents (disclosed in a recent

Freedom of Information Act suit), the very first reference to this

document occurred long after the sting operation, all the interviews,

document reviews, memoranda, notes, affidavits, etc., by IRS

personnel. It was created years later, only once it was needed, after

the Jacobson case was argued before the Supreme Court, clarifying

the need for such evidence of predisposition. It was not previously

mentioned: to the grand jury, in the case agent’s affidavit opposing,

or otherwise in response to the Motion to Dismiss, in justification of

the sting operation, in response to the Howard Emirhanian Affidavit,

contesting any justification for a sting operation, in the case agent’s

notes of his interview of Evegelatos (the informant, who had

allegedly secured from Goulding, this non-existent document), in

any of the memoranda of the interviews of, or in any statement from

Evegelatos (at least until December 16, 1991, in preparation for

trial), years after the document was allegedly secured.

Mysteriously, this alleged flow chart “disappeared” before trial. The

agents claim they “lost” it; Goulding vehemently denies it ever

existed. But why would agents lie? The answer wouid have been

obvious to the jury -- if the defense had been allowed to make the

jury aware of the continuing IRS vindictiveness, much of which

evidence was concealed and some even destroyed by IRS agents, and

the existence of which they falsely denied.

Knowing that the UCA’s comments were being secretly recorded to

be played for the jury, the UCA asked Goulding on seven separate

occasions, about his “problems with the IRS.” Thus, the government

purposely, falsely portrayed him before the jury as someone whom

the IRS had investigated, or charged with prior wrongdoing; unfairly

suggesting to the jury non-existent prior bad acts or other crimes,

where it was really the government itself that should have borne the

adverse taint. The prejudicial effect was enhanced by denying

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Goulding an opportunity for rebuttal or even explanation, granting

the prosecution’s motion in limine. This was central to the IRS’

position that Goulding knew he was acting illegally (mens rea).

“Evidence of other bad acts can be very prejudicial” and was

determined to be “plain error” in U.S. v. DeGerratto, 876 F.2d 576

(7th Cir. 1989), where the court failed to give a limiting instruction.

Moreover, the trial court gave its imprimatur via. Gov. Inst. No. 49,

43, falsely instructing the jury that the investigation was proper.

Given the newly discovered evidence, Gov. Inst. No. 49, was

inaccurate and improper. Even worse, the prosecution fostered this

erroneous instruction by withholding evidence of its inaccuracy and

impropriety. This prevented a fair trial and was a fraud on the court.

It is now clear that the defense was highly prejudiced by this denial

of an opportunity to explain: (1) witness bias; (2) that the IRS and its

agents acted vindictively and illegally toward Goulding, including by

conducting illegal “electronic surveillance of Goulding’s

conversations,” even before any criminal investigation; (3) that IRS

employees tampered with the tape recordings of the undercover

operation, destroying the exculpatory evidence; (4) that the IRS

withheld evidence; (5) the IRS’ mischaracterizations of Goulding;

(6) that his “problems with the IRS” did not exist, and certainly were

not evidence of predisposition. Clearly now, given the newly

discovered, previously concealed and destroyed evidence, Goulding

was denied his Sixth Amendment right to confrontation and his

concomitant due process/fair trial right."”

Il. Previously Known Information and Analysis of the

Prejudicial Effect of Withheld, Concealed and Destroyed

Evidence, Given the Trial Court’s Prohibition of Evidence

Concerning Bias of Agents Who Testified, Cumulatively, Clearly

Demonstrate the Wrongfulness of the Conviction.

To place in perspective the new evidence of IRS misconduct, This

Honorable Court should consider the evidence previously disclosed

in the original §2255 petition and the related Petition for Certiorari.

"In addition, the foregoing evidence of government misconduct, if available to the

defense, would have facilitated pursuit of the entrapment defense.

17

IRS abuses following Goulding’s Civil Rights Action, include: (1)

the vindictive instigation of a criminal investigation, undercover

operation and prosecution against Goulding, and a criminal

investigation against several of his relatives, business associates, and

civil rights attorneys, (2) offers of special inducements to Goulding’s

clients to terminate him, as their attorney (Appendix G), (3) filing

false affidavits and obstruction of Congress by the IRS District

Director, and (4) a series of cover-ups of illegal IRS activities."

Agents thus secured erroneous conclusions from the District Court,

the Seventh Circuit and the jury. As gleaned from recent

congressional hearings on IRS abuse, these are not isolated instances

of over-zealous IRS conduct. Retaliatory practices are commonly

perpetrated against other members of the community who zealously

practice their profession on behalf of clients. Far from “flimsy and

meager” (US v. Goulding, 26 F 3d 656, at 662), there is now “some

evidence” and a “colorable basis” for the claim of vindictiveness, as

found by the trial court. At stake is Goulding’s freedom and no

rational basis has been demonstrated for withholding such evidence.

Discovery previously ordered by the Magistrate should now be

permitted, as well as an analysis of the tapes.

“There are those who say, as did Justice (then Judge) Cardozo, that

under our constitutional exclusionary doctrine ‘[t]he criminal is to

go free because the constable has blundered.’ People v. Defore, 242

NY [12], at 21, 150 NE [585], at 587 [(1926)]. In some cases this

will undoubtedly be the result. But, as was said in Elkins [v. United

States, 364 U.S. 206, 4 L.Ed.2d 1669 (1960)], ‘there is another

consideration--the imperative of judicial integrity.’ 364 US, at 222.

{Emphasis added.] The criminal goes free, if he must, but it is the

law that sets him free. Nothing can destroy a government more

In 1985, IRS District Director J.R. Starkey lied to Congressman Porter, thus

defrauding congress, in his cover up of illegal IRS activities. On April 19, 1994, an

IRS attorney courageously disclosed a portion of an internal secret IRS

memorandum, revealing an excerpt of a January 18, 1985 interview of IRS Agent

Feinglass. See page 11. Similar settlement offers to Goulding's clients were made

directly by IRS District Counsel Loren Gore.

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quickly than its failure to observe its own laws, or worse, its

disregard of the charter of its own existence. As Mr. Justice

Brandeis, dissenting, said in Olmstead v United States, 277 US 438,

485, 72 L Ed 944, 959... (1928): ‘Our Government is the potent, the

omnipresent teacher. For good or for ill, it teaches the whole people

by its example.... IF THE GOVERNMENT BECOMES A

LAWBREAKER; IT BREEDS CONTEMPT FOR LAW; IT INVITES

EVERY MAN TO BECOME A LAW UNTO HIMSELF; IT INVITES

ANARCHY. '” Justice Clark, in Mapp v. Ohio, 367 U.S. 643 at 659, 6

L.Ed.2d at 1092 (1961). (Emphasis added.)

In evaluating the merits of these claims and the importance, I

beseech Your Honors to keep an open mind to the harsh realities of

life, including that government officials, in all their zeal, sometimes

lie and break the law they are sworn to uphold.'* This Court

emphasizes that among the most important functions of the judicial

system is to make plain to litigants and society at large that justice is

done in our courts. Offutt v. United States, 348 U.S. 11, 14, 99 L.Ed.

11 (1954) (“Justice must satisfy the appearance of justice.”),; Adams

v. United States ex rel McCann, 317 U.S. 269, 63 S.Ct. 236, 87

L.Ed. 268 (1942) (“The public conscience must be satisfied that

fairness dominates the administration of justice.”)

IV. Goulding’s Conduct for Which He Was Prosecuted Was Not

Clearly Wrongful - His Activities Were Consistent with That of

'SUnited States v. Cortina, 630 F.2d 1207 (7 Cir. 1980) (affirming a District Court's

ruling resting on outright disbelief of a law enforcement officer), United States v.

Freymuller, 571 F.Supp. 61, 67 (N.D. Ill. 1983) (District Judge disbelieving police

officers, allowing a motion to suppress); the infamous E/ Rukn cases - United States

v. Boyd, et al., No. 89 CR 908, N.D. Ill, E.D., Sept. 21, 1993 and the lack of any

prosecution of Hogan, and United States v. Burnside, et al., No. 89 CR 909, N.D.

ll., E.D., June 4, 1993; the apparent perjury [and demonstration of past illegal

evidence planting by Mark Fuhrman, the reputation of whom may have saved O.J.

Simpson, regardless of guilt or innocence]; the proof (not speculation, but proof) of

the Philadelphia police department, leading to judicial remedies for injured parties.

the Waco hearings; hearings on the Ruby Ridge incident and the Orlando Cruz

incident; the radiation experiments on unwitting US citizens; the sterilizations in the

Lynchburg Colony; the LSD experiments; the Tuskegee Syphilis Experiment, using

human beings as laboratory animals.

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an Attorney Properly Preserving His Client’s Confidentiality.

In addition to being improperly motivated, the government's theory

of the alleged crime ts frightening. Goulding’s “crime” was

depriving the IRS of confidential information, information relating

to a client - the UCA, information which he had no duty to disclose,

but a duty to safeguard - information about the c/ient’s past criminal

act which the UCA confessed to Goulding. When the UCA

indicated a legitimate business activity in the future, Goulding

advised him (on six separate occasions, on tape) to file amended

returns and to pay the tax. He refused. Goulding then recommended

incorporation and capitalization in a jurisdiction which would

preserve his confidentiality. Goulding consistently advised the UCA

to file returns where required and to comply with the law.

his was, at least arguably, a proper measure of a lawyer, to preserve

client confidentiality and to facilitate the client's ability to operate in

a manner which preserved the confidentiality of his past criminal

act. And so was the belief of the lawyer who Goulding hired as a

precaution. The government’s theory - by designing a client's

affairs ina manner which lessens the likelihood of detection as to his

past criminal act, without any misrepresentations or other criminal

act, Goulding “detrauded” the IRS (out of confidential and even

privileged information), violating 18 USC §§371 and 1341."°

Most importantly, Goulding is innocent! The Seventh Circuit should

have granted the 28 U.S.C. §2255 Petition, or at least a hearing. Yet,

the Seventh Circuit continues to permit the government to withhold

Brady materials, evidence of IRS misconduct and of agents

tampering with evidence, resulting in the wrongful conviction.

V. Justice Cummings’ third-party, extra-judicial, extra-record

contacts, The Senior Panel member in the original appeal, engaged

"*That this could be construed as a crime, given the conflicts Goulding faced,

prompted a National Association of Criminal Defense Lawyers Amicus Curiae briet,

on direct appeal, before the Seventh Circuit and in the United States Supreme Court

Such an undercover operation is too susceptible to ensnaring one who intended to

act in good faith

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in a series of secret ex-parte communications with a non-attorney,

third party, regarding this matter. On or about May 26, 1994, Mr.

Sheldon Drobny attempted to contact the Seventh Circuit's clerk,

having learned of the issuance of the opinion in this case. Mr.

Drobny sought information as to how to bring these inaccuracies to

the court’s attention. Justice Cummings, and not his clerk, answered

the telephone and proceeded to discuss with Droodny this new IRS

disclosure and the consequent inaccuracies of the Seventh Circuit's

opinion, During the conversation, Justice Cummings requested

Drobny’s copy of this document. The same court had taken judicial

notice of this document by virtue of the amicus curiae motion.

Justice Cummings later recontacted Drobny securing additional

information. Appendix F. No record was ever made of these, or of

any other third party contacts. The prospect of extra-judicial

influences prompt concern, given the following disparities:

(a) between the Seventh Circuit’s factual conclusions and the

actual facts as derived from the record on appeal,

(b) between the statements of the justices during the February 17,

1994 oral arguments and the May 25, 1994 opinion, and

(c) between the May 25, 1994 Seventh Circuit’s opinion (on direct

appeal) and the Ratzlaf v. U.S., 510 U.S. 135 (1994) opinion.

A. Rug Immunity

Phe Seventh Circuit's opinions ignore the doctoring of evidence and

other illegal IRS activities - “rug immunity,” a design to cover-up

illegal IRS activities and immunize government officials from the

burdens of their illegality. Important legal doctrines are effectively

eradicated by this illicit practice. Faced with clear, unequivocal

evidence of an IRS conspiracy perpetrating numerous, sinister,

illegal acts, the Seventh Circuit punishes not the perpetrators of

those acts (IRS agents), but the victims. With the advent of such a

corrupt practice, the Seventh Circuit effectively joins the conspiracy.

Indeed, its opinions are so imbued with patently false factual

conclusions and gross factual inaccuracies, that the only rational

explanation is a design to preclude any review by certiorari. (See

Appendix F.)

B. Gross Factual Inaccuracies comprise the Seventh Circuit’s

Opinion.

a. At US v. Goulding, 26 F 3d 656, 664, that the “corporations

[formed by the defendants] had no purpose except to ‘clean’ [the

UCA]’s money.” The evidence blatantly contradicts this assertion

(also made in the government’s brief); the UCA repeatedly

expressed a desire to use his cash accumulation “for investments”,

the purchase of “a bowling alley/bar/restaurant” and “apartments.”

(1) At 12/18/86 page 14 of the transcript: “I wanted to buy into a

bowling alley/bar/restaurant up in Duluth [or] apartment

complexes.”

(2) At 12/18/86 page 12: “I’ve also accumulated some cash over the

last couple years that uh, I want to use for investments.”

(3) At 2/6/87 p.48,49: “In Duluth...1 was looking at some property...

It’s a bar, restaurant, bowling facility].”

(4) At 2/24/87 p. 27, 28: “[I want to buy] a bowling alley. It’s

income-producing. We talked about that,...a restaurant/bar/ bowling

alley.... I'd own it.”

(5) At 5/19/87 p. 42: “We had talked about me getting in to this

restaurant up in Duluth. [Discussion continues with the “liquor

license”™.]”

(6) At 5/19/87 p. 43: “Just have the corporation make investments,

right?” [to which Goulding responded “it has to pay taxes on its

investments.” ]

Both defendants expressly determined that incorporation was

necessary to protect the UCA from personal liability; the UCA

expressed legitimate business needs for corporations.'’ This

'’Ushijima tells Goulding, at 2/24/87 p. 28, 29:

A business operation like a bowling alley and, and/or a restaurant have a

lot of liabilities connected. You want to isolate that in a company...you

don’t want that real estate subjected to a guy slipping in a bowling alley or

eating bad food.... [To] own and operate a bowling alley/restaurant,

wouldn’t you incorporate [them] separately? And lease the real estate...to

the operations?... You have two separate corporations [Goulding agreeing]

maybe three.... That’s only good business practice.

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erroneous conclusion as to the lack of legitimacy of the corporations

and the alleged lack of any business purpose cuts into the heart of

the defense and the legitimacy of defendants’ actions. As argued

before the Seventh Circuit, the IRS sting operation required the

defendants to form corporations and to do so in a manner which

safeguarded incriminating information as to a past crime by their

client, the UCA. The fortuitous consequence of any detriment to the

IRS, in the form of lessening its likelihood of detecting the UCA’s

past crime and perhaps past unreported income, does not transform

otherwise legitimate legal services into mail fraud and a conspiracy

to defraud the IRS out of information. The defendants had no duty to

disclose this information; they had a duty, by virtue of the attorney-

client relationship (created by the IRS), to safeguard such

information from IRS discovery.

b. That there is “overwhelming evidence” of guilt. The evidence

instead demonstrates that both defendants performed otherwise

legitimate legal services in order to prevent incriminating

disclosures as to their client; they properly protected the client’s

confidences, albeit in derogation of the IRS’s ability to detect a past

crime. Observing such confidences does not defraud the IRS. Such

conduct is not “inevitably nefarious.”'"* The overwhelming evidence

At 2/24/87 p. 50, Goulding tells the UCA that the business could be “owned by the

Cayman corporat[ion which] is actually going to then expend the funds, be it either

as a loan to you or a direct acquisition of the property... Goulding suggested a direct

acquisition.” The Defendants even took offense to the UCA’s suggestions that the

corporations were “phony” (2/24/87 p. 49). Ushijima stated at 2/24/87 p. 11:

“creating these...instruments or entities [in Grand Cayman] is...perfectly legal and

above the table.” The bank accounts were obviously needed for such business as

well. The promissory notes properly documented the loans. The notes had a

repayment obligation, discussed at 2/6/87 p. 46, 48, 49; 2/24/87 p. 20, 27. All were

legitimate. Each had a valid business purpose.

''The Seventh Circuit Pattern Jury Instruction given in this case, defines

“wilfulness” as “an act... done voluntarily and intentionally with the purpose of

‘avoiding’ a known legal duty.” This simply fails to comport with Ratzlaf, despite

the Opinion’s contrary assertion at US v. Goulding, 26 F 3d, 662. It simply does not

suffice for the Seventh Circuit to feel that the defendants “knew the[ir] conduct to

be unlawful.” This question is instead delegated by the United States Constitution

to a properly instructed jury.

23

demonstrated good faith. See pages 19-20, above.

c. That the defense “fail[ed] to ... object” to the denial of the

Reliance on Counsel, Instruction No. 20. US v. Goulding, 26 F 3d

656, 664. The objection clearly exhibited disagreement with the trial

court’s ruling (TR p.1003). Refusing the instruction was plain error.

d. That “there is no evidence that Goulding consulted two other

lawyers, Ushijima and Fred Harbecke, before initiating this scheme,

or that he made a full report ... of all the facts” to the persons on

whom he relied. The record is replete with Goulding’s receiving

advice from Ushijima and him following that advice. At TR 2/24/87

(p. 4), Goulding tells the UCA: “J told [Ushijima] the whole

scenario.” At 2/24/87 (p. 6) Goulding tells the UCA “we'll propose

it to [Ushijima],” and 2/24/87 (p. 8): “[Ushijima]’s had a lot more

experience.... | don’t remember that form well enough.” Ushijima

testified that Goulding twice asked that everything be done legally

and that Ushijima said that it would be and that their actions were

legal. Goulding took no action before hiring Ushijima."”

While the Seventh Circuit determined that a jury could have found

that Goulding was not acting in good faith, a properly instructed jury

also could have found that he understood his actions to be legal and

that he was acting in good faith. Good faith negates wilfulness.

Since the jury was not so charged, Goulding was deprived of his

defense. U.S. v. Cheek, 498 U.S. 192 (1993).

e. That Goulding offered no proof of IRS agent misconduct in

support of his Motion to Dismiss and/or for Discovery. Evidence of

retaliation is substantial and evidence of agent misconduct is now

overwhelming. See pages 10-18 above.

f. That there was no evidence of “a lack of predisposition or

"Despite the Seventh Circuit's contrary assertion, reliance on counsel defense is not

restricted to hiring an attorney for one’s own purposes. Nor must the full disclosure

be made by the defendant himself. Suffice it to say that Ushijima had all the facts;

Goulding acted in accordance with his advice.

24

government inducement.” US v. Goulding, 26 F 3d 656, 665. In fact,

the government first suggested “moving money” (October 29, 1986,

p.5). Great reluctance was exhibited to engaging in the IRS induced

conduct, particularly, without Goulding first obtaining independent

counsel to assure himself of the legality; there was no evidence of

any intent to knowingly engage in illegality. The only predisposition

was to perform legal services in a manner which avoided improper

disclosures. Query, why would the IRS design a sting operation with

no clear i!legality and no violation of any duty to the IRS, upon a

subject who had just sued IRS Agents? This is too susceptible to

constituting a device to squelch free speech. The gross disparities

between the record and the unfounded, unsupportable factual

‘ conclusions made a mockery out of the appellate process and, if left

alone, would undermine public confidence in the outcome.”

ye

¥

d

i

§

:

)

3

a

C. The Seventh Circuit’s Attitude Underwent a Mysteriously

Marked Transformation Between the Time of the Oral

Argument and the Opinion.

Distressing are the following disparities between the panel’s

comments during the February 17, 1994 oral argument and its May

25, 1994 opinion:

a. During the oral argument, Justice Rovner accurately stated that

Federal Rule of Criminal Procedure 16(a)(2) does not preclude the

discovery of the Criminal Investigation Referral Reports sought by

| Goulding. Yet, the opinion asserts that Rule “16(a)(2) precluded the

production of the IRS’s Criminal Referral Documents.” 26 F 3d 656,

662. Effectively, the Seventh Circuit has ruled that Rule 16

supersedes Brady v. Maryland, 373 U.S. 83 (1963), after first

properly recognizing otherwise during oral argument.

*°The outcome of most criminal matters and the likelihood of review are fact driven.

We fear that the Seventh Circuit, by misstating the facts, makes matters less

appealable, lessens the likelihood of review and thus lessens the possibility of a

reversal. Apparently, the court repeatedly reached unsupportable factual conclusions

in order to avoid review for incorrect legal conclusions, e.g., criminalizing the

performance of legitimate legal services in a manner which properiy prevents

incriminating disclosures as to a client's past crime.

25

b. Next, while the May 25, 1994 opinion does not once mention the

government's failure to call an expert witness, both Justices Rovner

and Kanne thoroughly questioned the prosecution, stating more than

once that they were “deeply troubled” by its failure to call an expert

witness as to the proper conduct of an attorney faced with the

ambiguous circumstances into which the defendants were thrust.

Justice Kanne commented that this “left the jury out to sea.”

¢. During oral argument, the court questioned the proximity between

the civil rights suit and the subsequent initiation of the criminal

investigation. Yet, the opinion fails to reflect the court’s own

inquiry and discredits the notion, concluding that there was no IRS

misconduct (26 F 3d at 662). The misconduct is now indisputable.

d. The court, during oral argument, also thoroughly discredited the

prosecution's theory as to several mailings and the applicability of

the mail fraud statute, several occasions, expressing utter dismay at

the prosecution's contention that an attorney's invoice, as well as

certain other mailings, could be “in furtherance” of any scheme to

defraud. Yet, again, the opinion fails to comport with the judicial

remarks and questioning during oral arguments.

D. The Opinion is in Disharmony with Ratz/af.

The trial court gave Government Instruction No. 38: “an act is done

wilfully if done voluntarily and intentionally with the purpose of

avoiding a know([n] legal duty.” The Seventh Circuit determined

that this “use of ‘avoiding’ ... comported with Ratz/af (510 U.S. 135

(1994)) and also with the Seventh Circuit’s Pattern Jury Instruction.”

This is in stark contrast with this Honorable Court's specific

wilfulness requirement that the defendant know of the illegality of

his conduct and harbor a specific intent to commit the crime or a

purpose to disobey the law. See also U.S. v. Rogers, 18 F 3d 421

(4th Cir. 1994); and U.S. v. Curran, 20 F.3d 560 (3d Cir. 1994).”'

*'The court effectively suggested that another jury instruction (No. 22) cured any

defect in the instruction. However, that instruction required conviction for what was

clearly not a violation per U.S. v. Granda, $65 F.2d 922 (Sth Cir. 1978), cited in

Ratzlaf with approval.

26

Pan Get I I eS ee

a!

E. The Seventh Circuit’s Opinions Were Arbitrary and

Capricious. The Seventh Circuit clearly failed to give fair and

appropriate consideration of either appeal, or the Circuit Court Rule

22.2(a)(1) petition. We are aware of only one series of third party

contacts by Justice Cummings. Yet, the process was marred by

irregularities, the total divergence between the Justices’ statements

during closing arguments on February 17, 1994 and the May 25,

1994 opinion, the gross disparities between the evidence and many

of the conclusions, a total divergence with the Ratz/af decision and

an utter failure to even inquire into the apparent IRS evidence

tampering. These factors prompt us to seek discovery as to other

possible third-party contacts and irregularities in the Seventh

Circuit's conduct.

CONCLUSION

The issue should not be whether a panel of three feels that the

evidence introduced at trial is overwhelming as to guilt, but whether

the wrongfully withheld evidence may be sufficient to alter the

outcome, particularly when the underlying judgment was the product

of multiple frauds.

The Seventh Circuit has permitted itself to be the proverbial rug

under which the government may freely sweep its dirt. Such refusal

to address this clear evidence of IRS misconduct is what we term

“rug immunity,” whereby the Seventh Circuit protects illicit

government conduct by sweeping it under the rug, not dissimilar to

how the agents have handled the evidence. It stands as perhaps the

most astounding phenomenon in this entire case that despite how

outrageous the IRS conduct and despite the fact that much of the

foregoing has been overwhelmingly demonstrated and in many cases

admitted by agents - there is not one mention of any of these

outrageous abuses in any of the Seventh Circuit’s opinions. Instead

of its conscience being shocked, capriciously, these matters have

been swept under the rug, never to be considered.”

Any law abiding, self-respecting law enforcement official faced with

the prospects of such IRS illegality as here occurred, given the

evidence, would, at the very least, investigate. Indeed, the very fact

that no one has even investigated, instead content to cover-up the

apparent illegality, including doctoring of evidence, is itself yet

further proof of the IRS’s modus operandi in the instant case; not to

investigate real crime (the criminality of which here rests exclusively

in the conduct of IRS agents). Instead of pursuing real crime, the IRS

has endeavored to manufacture the appearance of crime, to retaliate

for Goulding having been so bold as to sue IRS agents for his

exercise of First Amendment rights.

Such an abdication of its responsibilities cheats the public out of

fair, honest and responsible government. The Seventh Circuit’s

refusal to deal with the issues of this case and refusal to correctly

portray the facts of this case not only threatens the integrity of its

actions but threatens to undermine the entire judicial process and to

emasculate the federal criminal system.

The criminal investigation (the sting) and the prosecution would not

have occurred but for defendant’s civil rights suit; nor does the

government contended otherwise. The Seventh Circuit adopted a

shallow and unreasoned limitation to the Fifth Amendment’s

prohibition against government vindictiveness, limiting the

constitutional protection (if any remains in this Circuit), to

prosecutorial vindictiveness. Yet, the purpose of such a rule is

avoid governmental undermining of the constitutional protection. If

a prosecution would not have occurred but for such retaliation, at

whatever level the retaliation occurred, citizens will feel constrained

to avoid such constitutional exercise. The constitutional right thus

loses its efficacy. With the new evidence, particularly coupled with

“2Worse yet, the jury was deprived of this information, secreted by the IRS, not

furnished to the defense. Additionally, the outrageous government conduct became

the subject matter of a motion /imine, precluding any defense reference to

government illegality in any defense argument or questioning.

28

Det EY, Male nicer espe BOS SALA NOE OEE

the other indicia of good faith, including the numerous admonitions

by Goulding that the undercover agent comply with the law,

Goulding would not have been convicted. He was denied a fair trial.

For the reasons stated herein, it is respectively requested that this

Court issue a writ of mandamus for the lower courts to determine

that the trial was a nullity, and vacate the sentence and judgment and

dismiss the indictment or order a new trial, and/or require that the

district court conduct an evidentiary hearing on defendant’s

substantial allegations of constitutional deprivation, and/or issue an

order or a mandamus requiring the government to turn over:

complete copies of all criminal investigation referral reports

pertaining to Goulding, all memoranda of interviews of IRS Agents

Dietz and Feinglass and any other documents generated by either

IRS Agents Dietz and Feinglass pertaining to Goulding, the originals

of the tapes of the undercover operations for independent

examination and all documents and materials pertaining to

“electronic surveillance of Goulding’s conversations.”

Kt aN C Respectfully submitted,

NDALL S. GOULDING, pro se

3000 Dundee Rd. Suite 105, Northbrook, IL 60062

(847) 291-4200

29

APPENDICES

Appendix A Page 1 of 25

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Chicago, Illinois 60604

Submitted September 16, 1998

Decided October 13, 1998

Before

Hon. FRANK H.

EASTERBROOK, Circuit Judge

Hon. ILANA DIAMOND

ROVNER, Circuit Judge

Hon. DIANE P. WOOD, Circuit

Judge

, RANDALL S. GOULDING, On Motion for an

2 | Order

4 Authorizing the

District Court to

Entertain a

Successive

Petition for

Collateral Review

Petitioner,

No.98.9104 v.

UNITED STATES OF AMERICA,

Respondent.

ORDER

Randall S. Goulding has filed an application for leave to file a

successive 28 U.S.C. § 2255 motion. He claims that he has evidence,

Appendix A Page 2 of 25

discovered after the denial of his first § 2255 motion, that is

sufficient to establish by clear and convincing evidence that no

reasonable factfinder would have found him guilty. Goulding’s

“newly discovered evidence” is simply another attempt to support

his general claims that the government’s prosecution of him was

vindictive and in retaliation for a prior conflict with the Internal

Revenue Service and that the government withheld exculpatory

evidence from him. Goulding made similar claims on both direct

appeal and in his first § 2255 motion. Goulding’s present claims are

merely the repetition of old rejected claims that he attempts to

support with new-evidence. See Bennett v. United States, 119 F.3d

470, 471 - 72 (7th Cir. 1997); 28 USC § 2244(b)(1). Even if we

were to consider the claims that Goulding seeks to raise as new

claims, the “newly discovered evidence” Goulding seeks to present

does not establish by clear and convincing evidence that no

reasonable factfinder would have found him guilty. Instead, as this

court noted on direct appeal, the evidence against Goulding was

“overwhelming.” United States v. Goulding, 26 F.3d 656, 663 (7th

Cir. 1994).

Accordingly, Goulding’s application for leave to file a successive §

2255 motion is DENIED.

Appendix B Page 3 of 25

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Chicago, Illinois 60604

Submitted November 30, 1998

Decided December 11, 1998

By the Court:

RANDALL S. GOULDING, On Motion for

Reconsideration

Petitioner,

No.98.9104 Vv.

UNITED STATES OF AMERICA,

Respondent.

ORDER

Randall S. Goulding has filed a petition for rehearing. Goulding

seeks reconsideration of the court’s decision denying his motion for

leave to file a second or successive motion pursuant to 28 U.S.C. §

2255. 28 U.S.C. § 2244(b)(3), however, provides that “the grant or

denial of an authorization by the court of appeals to file second or

successive application shall not be appealable and shall not be the

subject of a petition for rehearing or for a writ of certiorari.”

Accordingly, this court is not authorized to consider Goulding’s

petition for rehearing, which shall be filed in without further action

by the court.

Appendix C Page 4 of 25

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Chicago, Illinois 60604

(Argued March 29, 1996)

Decided August 2, 1996

Before

Hon. FRANK H. EASTERBROOK, Circuit Judge

Hon. ILANA DIAMOND ROVNER, Circuit Judge

Hon. DIANE P. WOOD, Circuit Judge

RANDALL S. GOULDING, ] Appeal from the United

States

] District Court for the

Petitioner-Appellant, ] Northern District of

Illinois,

] Eastern Division,

No. 95-1368 _v. ] No. 93 C 2637

J

UNITED STATES OF AMERICA, } James B. Moran, Judge

J

Respondent-Appellee. ]

ORDER

Randall Goulding was charged in 1991 in an 18-count indictment

with conspiracy to defraud the United States, mail fraud, and illegal

Appendix C Page 5 of 25

transportation of currency and monetary instruments, in violation of

18 U.S.C. §§ 371 and 1341, and 31 U.S.C. §§ 5316(a) and 5322(a).

After a jury found him guilty, on all counts. Goulding was

sentenced on October 15, 1992 to six months’ incarceration on

Count | and five years’ probation on Counts 2 through 18. He was

also sentenced to make restitution of $8,000 to the United States and

to perform 500 hours of community service.

This court decided Goulding’s direct appeal on March 25, 1994.

See United States v. Goulding, 26 F.3d 656 (7th Cir. 1994), It held,

in pertinent part, that (1) Goulding failed to demonstrate that the

government had acted selectively or vindictively in prosecuting him,

(2) the district court correctly held that Federal Rule of Criminal

Procedure 16(a)(2) precluded the production of the IRS’s criminal

referral documents, and thus that the court did not err in denying

Goulding’s discovery request for the production of those documents,

and (3) Goulding waived his objection to the failure of the district

court to give a particular instruction to the jury both because he

failed to object below and because the instruction in question was

not supported by the evidence.

On September 14, 1994, Goulding filed a motion to vacate his

sentence pursuant to 28 U.S.C. § 2255. His petition asserted five

basic grounds for relief: ineffective assistance of counsel,

deprivation of his constitutional right to testify, improper denial of

access to criminal investigation reports, lack of evidence for Counts

17 and 18 that he had the requisite knowledge to support a

conviction, and the invalidity of the conviction because the

prosecution was vindictive. Without holding an evidential hearing,

the district court denied the petition in an order dated December 5,

Appendix C Page 6 of 25

1995. It held that there was no basis for a conclusion that the

prosecution was vindictive, that the government did not

impermissibly limit discovery by refusing to provide Goulding with

a copy of the criminal referral, and that Goulding was not denied

effective assistance of counsel (either because of a failure to object

to a jury instruction or because of a failure to recommend that

Goulding testify). On appeal to this court, Goulding raises a host of

issues, some of which relate to the merits of his § 2255 petition and

others of which relate to the district court’s refusal to hold an

evidentiary hearing. Some of these issues, as we note below, were

resolved against Goulding in his direct appeal to this court, and may

therefore not be re-litigated in the guise of a motion under § 2255

absent a showing of good cause for and prejudice from his failure to

appeal. Melvin v. United States, 78 F.3d 327,329 (7th Cir. 1996);

Patel v. United States, 19 F.3d 1231, 1237 (7th Cir. 1994). In broad

terms, Goulding claims that he has new evidence of vindictive

prosecution, which shows that his constitutional right to due process

has been violated both by outrageous government misconduct and

violations of Brady v. Maryland, 373 U.S. 83 (1963). Second, he

reiterates his claim that he was denied effective assistance of counsel

in a variety of respects, principally by counsel’s improper “refusal”

to allow him to testify and by counsel’s decisions on jury

instructions. Finally, he claims that he should have been granted an

evidentiary hearing, because disputed issues of fact existed on his

allegations. We consider these points in turn.

This court considered Goulding’s claim of “invidious, retaliatory

prosecution” in the direct appeal from his conviction and rejected it.

It is true that the Fifth Amendment prohibits the government from

prosecuting a defendant because of some specific animus or ill will

Appendix C Page 7 of 25

on the prosecutor’s part or to punish the defendant for exercising a

legally protected statutory, or constitutional right. See United States

v. Goodwin, 457 U.S. 368, 372 (1992). Nevertheless, in Goulding,

we held that Goulding failed to demonstrate that the government

acted selectively or vindictively in its actions. In order to prevail on

a claim of selective prosecution, he would have had to show that the

Internal Revenue Service’s criminal investigation of him had both a

discriminatory purpose and a discriminatory effect. 26 F.3d at 662.

In order to show, vindictive prosecution, he would have had to show

that he was prosecuted to punish him for exercising a protected right.

Id. This court carefully considered and rejected both claims, writing:

even if Goulding could convince this Court that Agents Dietz and

Feinglass harbored ill will towards Goulding, Goulding failed to

demonstrate that these agents had any influence on the bringing of

this prosecution. In fact, it is clear the agents were not involved in

the decisions to begin a criminal prosecution or to prosecute--

Goulding, however, makes no claim that the prosecutors who

actually made the decision to bring charges against him acted

vindictively. Furthermore, Goulding made no showing of

discriminatory effect (he failed to show, for example, that other

similarly situated persons were not prosecuted). Id.

The alleged “new evidence” of vindictiveness that Goulding has

brought forward in his § 2255 petition suffers from the same flaw: it

does not demonstrate any link between the alleged ill will and

vindictiveness of the [RS agents in charge of the criminal tax

investigation against Goulding and the prosecutors who initiated and

litigated the fraud, currency, and monetary instrument claims here.

We reject Goulding’s suggestion that we should adopt a theory of

8 Te, -

Appendix C Page 8 of 25

“imputed vindictiveness,” pursuant to which the U.S. attorneys

should be held responsible for the state of mind of the IRS agents.

This is not a case where an investigator working for the U.S.

Attorney’s office knows of crucial exculpatory information and fails

to turn it over, where courts have held that the prosecutor must be

held responsible for the acts of its agent. See Kyles v. Whitley, 115

S.Ct. 1555, 1567-1568 (1995); United States v. Morris, 80 F.3d

1151, 1169 (7th Cir. 1996). There is nothing to indicate that the IRS

was acting as an agent of the prosecutors in an unrelated case. and

thus we cannot impute its motivations to the prosecuting authority.

As for his allegation of outrageous Government conduct, it is enough

to note that this court rejected that theory as an independent ground

of recovery in United States v. Boyd, 55 F.3d 239 (7th Cir. 1995). In

any event, the “new evidence” is at best cumulative to that already

considered by this court. We decline to give Goulding a second bite

at the apple on this claim.

Goulding’s claim that he was denied effective assistance of

counsel by his lawyer’s alleged “refusal” to allow him to testify is

similarly unpersuasive. Goulding, himself a lawyer, attempts to

portray himself as a susceptible individual whose will was somehow

overborne by his attorney. He states in his brief that he was not

“permitted to testify,” and that his attorney made a unilateral

decision not to permit [him] to take the stand.” Putting the rhetoric

to one side, however, the trial record before Judge Moran speaks for

itself:

Judge Moran: Mr. Goulding, you understand that you have a

right to testify, or not testify.

Goulding: Absolutely. Your Honor.

Appendix C Page 9 of 25

Judge Moran: And you can get all sorts of advice from your

counsel as to whether you should or you

shouldn’t.

Goulding: And I certainly have.

Judge Moran: But the final decision is up to you.

~

Goulding: I understand.

Judge Moran: And it is your choice not to testify.

Goulding: I understand.

Judge Moran: And that is your choice.

Goulding: That is my choice, correct.

Judge Moran: Okay.

Goulding offers no evidence to show that he was somehow incapable

of responding honestly and knowledgeably to the judge’s questions.

The general rule is that parties are held to their responses, both in these

kinds of exchanges and in Rule || coiloquies. even if then, later have

second thoughts. See United States v Messino, 55 F.3d 1241, 1248 (7th

Cir. 1995); United States v. Malave, 22 F.3d 145, 148 (7th Cir. 1994);

United States v. Cirrincione, 780 F.2d 620, 624 (7th Cir. 1996) (“A

truly knowing and intelligent waiver accepted by the court will insulate

a conviction from later attack.”)

Goulding’s other assertions of ineffective assistance of counsel are

equally, unavailing. in order to prevail on this kind of claim, he must

present evidence that his counsel’s conduct fell below an objective

standard of reasonableness and that his case was prejudiced by his

counsel’s conduct. Strickland vy. Washington, 466 U.S. 668 (1984).

Here, in addition to the claim about counsel’s advice on his right to

testify, Goulding asserts that his counsel did not perform a thorough

enough investigation, that he failed to submit proper “theory of the

Appendix C Page 10 of 25

defense” jury instructions (in the face of this court’s earlier holding that

the evidence in the record did not support the instruction Goulding is

still claiming should have been given, see 26 F.3d at 668), and that

counsel failed to pay attention at a critical point in the trial, when

certain incriminating tapes were being played. Even if we assumed for

the sake of argument that the lawyer’s decisions were unreasonable

(and we see nothing to support such an assumption), Goulding’s

argument fails on the “prejudice” part of the test. As the panel on

direct review has already observed, the evidence against Goulding “was

overwhelming.” Id. at 663-64. He therefore has not raised a credible

ineffective assistance of counsel claim.

In light of the nature of Goulding’s claims in the § 2255 petition, the

district court did not abuse its discretion in deciding not to hold an

evidentiary hearing. A hearing is not required if “the motion and the

files and records of the case conclusively show that the prisoner is not

entitled to relief.” 28 U.S.C. § 2255, 93. We agree with Judge Moran

that this standard was met.

We therefore AFFIRM the judgment of the district court.

Appendix D Page 11 of 25

Minute Order Form (rev. 12/90)

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA, )

)

)

v. ) No. 93 C 2637

) No. 91 CR 370-1

RANDALL S. GOULDING, )

) Judge Moran

Defendant. )

Memorandum and Order

DOCKET ENTRY:

Enter Memorandum and Order. Defendant, by a Section 2255 petition,

seeks to raise constitutional issues attacking the validity of his convic-

tion. While the reasons advanced are many, they are mostly prior

arguments in new packages. The petition is denied.

“e/ mr

JAMES B. MORAN,

Chief Judge, U.S. District Court

DEC 8 1994

Appendix D Page 12 of 25

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA, )

)

)

V. ) No. 93 C 2637

) No. 91 CR 370-1

RANDALL S. GOULDING, )

) Judge Moran

Defendant. )

MEMORANDUM AND ORDER

Defendant, by a §2255 petition, seeks to raise constitutional issues

attacking the validity of his conviction. while the reasons advanced are

many, they are mostly prior arguments in new packages. The petition

is denied.

The petition alleges that defendant was denied effective assistance of

counsel, denied his constitutional right to testify, was improperly

denied access to criminal investigation reports, was convicted of counts

17 and 18 despite an absence of evidence that he had the requisite

knowledge for conviction, and that additional evidence shows that the

prosecution was vindictive. We consider that petition from the

perspective of having been the trial judge, of having reviewed the

arguments and exhibits of the petitioner and the government, including

petitioner’s 45-page handwritten reply brief, and being mindful that the

Court of Appeals considered and decided numerous issues on appeal.

We are also well aware that, as petitioner concedes, in this case

“[y]irtually everything is on tape.”

We deal with the last issue first. Petitioner contended both in the

trial court and the Court of Appeals that the prosecution was vindictive

because the conduct of two IRS agents back in the mid-1980s was

vindictive and the government would not give him a copy of the

Appendix D Page 13 of 25

criminal referral. Neither this court nor the Court of Appeals found the

argument persuasive and, besides, the Court of Appeals specifically

ruled that the production was precluded by Fed.R.Cr.P. 16(a) (2).

United States v. Goulding, 26 F.3d 656, 662 (7th Cir. 1993). Petitioner

now adds in a hearsay opinion of a former IRS agent, whom he

solicited to be (and who could have been, if he had had anything

relevant to say) a retained expert, who opined that referral reports are

not normally withheld and might be Brady material. He also adds some

additional material indicating that one of the IRS agents may have

acted improperly in the mid-1980S. Petitioner does not, however,

establish any connection between that agent and this prosecution, as

pointed out by the Court of Appeals; the government had no obligation

to furnish the report unless it was Brady material; and we do not

assume that government attorneys disregarded their obligations to

furnish Brady material solely because of their resistance to production

of the report.

Petitioner also contends that he was denied effective assistance of

counsel. Establishing that is a daunting task -- the counsel was of his

choosing; that counsel is recognized as one of the most competent

criminal defense lawyers in the community; the standard of proof

petitioner must meet is high; this court observed that representation

throughout the trial; and, given the tapes, petitioner did not give his

counsel much to work with. Nevertheless, we will consider petitioner’s

principal contentions. He argues that his counsel should have objected

to this court’s failure to give tendered instruction No. 20, while failing

to note that the Court of Appeals has ruled that the instruction was not

supported by the evidence in the record. Id. at 668. That court has also

ruled that the instructions pertaining to reporting requirements were

“entirely adequate.” Id. at 666. The government’s closing argument

was permissible. Id. at 667-668. Most of the remaining arguments are

little more than nitpicking -counsel did not talk with petitioner as often

as petitioner would have liked, he on occasion rejected petitioner’s

views as to trial tactics, he sometimes did not pursue some line of

inquiry as vigorously as petitioner would have preferred.

The last significant bone of contention concerns the petitioner’s

failure to testify. Petitioner, an attorney (which undoubtedly explains

Appendix D Page 14 of 25

the extent of his now second-guessing his counsel) , was expressly

advised that he had a right to testify or not testify and that the decision

was his, and he expressly represented that he did not wish to testify.

He now claims that he should be relieved of that waiver because,

although he wished to take the stand, he could not because his counsel

was unprepared for his testimony. Although his counsel ascribes other

reasons, we accept for the purposes of this petition the representation

that counsel said he did not have time to prepare adequately to examine

petitioner. What he also said, according to petitioner’s affidavits, is

that petitioner provided too much detail; that “if you ask him what time

it is, he will tell you how to build a clock”; that he would not be a good

witness; and that counsel could get in what he needed to get in through

the co-defendant and argument.

This court has spent a considerable time on this case: pretrial, trial

and post-trial We have observed the petitioner in various

circumstances, listened to him, and read whatever he has presented.

This court has no question but that preparation of petitioner to testify

would have required an incredible effort, and he still would have been

a poor witness. As this petition demonstrates, he has his own

perception of what is important and his own selective perception of the

facts. We need look no further than the argument here that his

representation was constitutionally ineffective because his counsel did

not push positions that the Court of Appeals had previously ruled are

unsupported by the evidence in the record. Four judges (which

includes this court) have concluded that proof of guilt was

overwhelming. Petitioner has yet to concede he did anything wrong.

One with that capacity for rationalizing would be a loose cannon on the

witness stand, and an inviting target. We have no reason to disagree

with counsels conclusion, much less to term it ineffective assistance.

Counsel did the best he could, but he could not surmount the difficulty

that petitioner had, on the tapes, convicted himself.

“*o/ gh

JAMES B. MORAN,

Chief Judge, U.S. District Court

Appendix D Page 15 of 25

Dec. 5, 1994.

Appendix E Page 16 of 25

Report on Randall S. Goulding Tape Acoustical Analysis

I am an Acoustical Engineer. See the attached resume, exhibit 1.

On or about August 18, 1997, I met with Mr. Randall S. Goulding.

Mr. Goulding then explained to me that in 1986 and 1987, he was the

subject of a federal undercover sting operation. He further explained

to me that he had second generation video and audio tapes furnished to

him courtesy of the federal government and that he suspected that the

government had altered the tapes. Mr. Goulding furnished me with

those video and audio tapes for my examination, identified in the

attached exhibit 2.

In accordance with Mr. Goulding’s request, I have listened to all such

audio tapes, several times, with head phones (to aid in hearing acuity).

Additionally, I monitored the tapes using my computer, running a

Digital Signal Processing (DSP) card and Hyperception, a sophisticated

sound analysis program. This technology was invented and made

available to technicians only within the past three years. See the

attached exhibit 3 describing DSP and Hyperception.

In the course of my examination of the tapes, approximately 65

hours, I found a number of anomalies in two of the tapes: the one

labeled “4-16-87 attempts to contact Goulding” and the one labeled

“11/11/86 phone conversation with Goulding.” I found it interesting

that these were the very tapes which Mr. Goulding identified as

involving “accidental” erasures and “accidental” failure to turn on the

tape recorder. All other tapes appeared normal.

First, I found places in those tapes where the background noise le» |

changed. Second, I found in those same tapes instances of “dropor ».”

“Dropouts,” are instances on the tape where a certain audio process

inherent in that tape abruptly stops.

Finally, I identified instances of fundamental output characteristic

pattern or feature changes. Every audio recording device and acoustic

environment has its own unique features or “fingerprints.”

Significantly, in certain instances such features or “fingerprints,”

Appendix E Page 17 of 25

changed during the course of what purported to be a single taping. For

example, on the 11/11/86 tape (Spectrogram marked #1), one should

recognize a distinctly different sound spectra between the introduction

and the actual phone call and a rather abrupt start. The Spectrogram

marked #1 illustrates this well and strongly suggests the tape was made

with two different setups, under different circumstances (and

presumably at different locations) and at different times.

Approximately the first one-third of this Spectrogram is characterized

by significantly different features than the balance. Not surprisingly,

the different features start mid-sentence as Mr. Goulding’s

conversation begins with the undercover agent. This markedly

different pattern reveals a different setup. First, the average lateral

length of the lines in the first one-third of this Spectrogram is less than

one-half of those in the rest of the Spectrogram. More significantly,

moving horizontally across the bottom of the Spectrogram, another

rather abrupt change is evident; all four bands of bright patches

disappear at the same spot. Less dramatic, the overall degree of

brightness dissipates after the first one-third of this Spectrogram.

The Spectrogram marked #2 (tape from 1 1/11/86) similarly suggests

that the tape was made with two different setups under differing

circumstances, separated by the significantly darker area. It would

appear that many of the features noted with regard to the first one-third

of Spectrogram #1, reappear toward the end of Spectrogram #2

(following the significantly darker area), while the setup for the final

two-thirds of Spectrogram #1, appears to be similar to that for the

beginning of Spectrogram #2. Additionally, at the end of this

conversation, depicted in Spectrogram #2, is an additional voice, cutoff

in midstream, saying “memo to....” This also appears to have a

different spectra (see Spectrogram #2, I inserted the white line for

illustrative purposes), suggesting a different setup.”

On Spectrogram # 3, reflecting the April 16, 1987 tape, about 2 inch

starting from the left, one can see the normal sonic “tag” left by this

Appendix E Page 18 of 25

recording machine when it starts and stops. It appears as two spikes

with a dark gap in between. Now, locate the vertical white line |

inserted as a marker. The marker is actually about 1/8 inch before the

actual starting and stopping (due to my reflex time), where the

recording cuts into the conversation mid-sentence. One can notice that

there is no sonic “tag” here from starting and stopping. This

distinction, the presence of a sonic “tag” on the one occasion of starting

and stopping, but absent in the next, on what purports to be one

continuous tapin« on the same day with the same equipment, under the

same circumstances, in the same environment, is also consistent with

editing.

In other words, after the start and prior to the end of the taping

process in what purports to be a single taping event, and in the same

tapes, | have identified such anomalies as noise level changes,

“dropouts,” speed changes and fundamental output characteristic

pattern or feature changes. The foregoing incidents identified, are

typically indicative of a different taping setup, such as a different

recording device substituted at such moment, a different recording

environment, or both. Any one of such anomalies would suggest the

possibility of “editing,” “altering”or otherwise compromising the

original tape or a prior generation of such tape, from which such tape

was created. Without these original tapes, I cannot say with 100%

certainty, but in my opinion, with the available information, it does

appear that editing and altering occurred.

Finally, I think it is at least “curious” that these agents perform these

tasks routinely (in the one tape even calling inter-office each time to

confirm that the gear works) and then “forgets” to turn on the machine

the only time it is important to do so, when talking to the subject, Mr.

Goulding. Then, the very tape which the agent claims to have

“forgotten” to turn on the machine when commencing his undercover

task, is also the tape bearing these anomalies.

It remains at least a theoretical possibility, although unlikely, that

these anomalies could have occurred innocently, in the original

recording or in the process of copying to cassette. While each of these

sound change anomalies are suggestive of “editing,” as indicated

Appendix E Page 19 of 25

above, I cannot say definitively that at any particular point, it is the

result of what would appear to be the result of tampering/editing. On

the other hand, if the government is willing to supply me with the

original reel to reel tapes, even under their supervision and without

their losing control over the original tapes, I could, through the same

analysis, determine, with more certainty, whether these sound change

anomalies were the consequence of tampering.

This certainty is because there is an inaudible “bias” signal on the

original tape which we can extract with the computer. This process

would identify the source and confirm if those spots are edits (or for

example, the innocent consequence of the process of where the tape

recorder started and stopped). The “bias tone” is a high frequency

signal that is inaudible. It is recorded along with the “normal” audio

signal process while the audio signal is recorded on the tape. It aids in

the magnetization process. The signal is inaudible; it is above the range

of normal hearing (ultrasonic). When a tape is reproduced, this Bias

signal is not transferred as the playback head in the tape recorder

cannot normally pick up or record this signal.

With the original of a tape, by playing the tape at a reduced speed,

the bias becomes audible. The “normal” audio signal (in this case, the

voices) can be filtered out using a high pass filter, leaving only the bias

tone available for analysis. At this point, the bias tone, as it is normally

a continuous tone, can be used to find starts and stops as well as

pauses, as would occur in editing, recording over, etc. A discontinuous

bias signal should stand out quite distinctly, using the Hyperception

program.

If the government is willing to supply only some of the original tapes,

the ones in which I would have most interest would be the one labeled

“4-16-87 attempts to contact Goulding” and “11/11/86 phone

conversation with Goulding.” Unlike DNA testing, the entire process

is non-destructive; it would be performed without compromising the

original evidence.

Sincerely,

Appendix E Page 20 of 25

“e/ ~

Thomas Danley

~ HS Aeon ANA Meuron ea ol

Appendix F Page 21 of 25

UNITED STATES COURT OF APPEALS

SEVENTH CIRCUIT

CHAMBERS OF

WALTER J. CUMMINGS

CIRCUIT JUDGE

219 SOUTH DEARBORN STREET

CHICAGO, ILLINOIS 60604 May 31, 1994

Mr. Sheldon Drobny

Adler Drobny Fischer, Ltd.

95 Revere Drive - Suite A

Northbrook, Illinois 60062-1585

Re: United States v. Goulding

Dear Mr. Drobny:

Thank you for your helpful letter of May 27, together with its

attachments. You may be sure that this material will be considered by

the panel.

Sincerely,

“¢/ 9

Walter J. Cummings

i i Honorable S. Kanne

Honorable Ilana Diamond Rovner

Appendix G Page 22 of 25

UNITED STATES TAX COURT

SHELDON DROBNY AND

ANITA DROBNY ,

Petitioners,

)

)

)

)

)

v. ) Docket No.6985-83

)

COMMISSIONER OF INTERNAL REVENUE,)

)

)

Respondent.

DECLARATION OF ROBERT M. RATCHFORD

I, Robert M. Ratchford, hereby swear and affirm, under penalties of

perjury that:

1. | am an Attorney admitted to practice before the United

States Tax Court.

2. | am employed by the Office of Chief Counsel for the

Internal Revenue Service. I am presently a Special Trial

Attorney assigned to Regional Counsel, in Chicago, Illinois.

3. On March 8, 1994, the above-named case was assigned to

me for defense of the Commissioner of Internal Revenue with respect

to petitioners’ Rule 12 Motion for Leave to File Motion to Vacate

Decision (hereinafter "Motion for Leave").

4. Between March 11, 1994 and March 21, 1994, I interviewed

and discussed petitioners’ pleadings and respondent's response with

Revenue Agent Irving Feinglass, William C. Sabin, Lauren W. Gore,

and Harmon B. Dow. At that time of these discussions, our closed tiles

with respect to the previous trial in this matter had been requested but

not received. In my discussions with Mr. Feinglass, I learned that he

Appendix G Page 23 of 25

had previously been sued by Mr. Randall Goulding in U.S. District

Court. Upon learning that information, I requested that General Legal

Services retrieve their closed files with respect to that collateral matter

for my use in this case.

5. Subsequent to my discussions with William C. Sabin,

Harmon B. Dow, and Lauren W. Gore, I drafted and faxed or delivered

to them the Affidavits and Declaration which were subsequently

executed and filed as attachments to respondent's Notice of Objection

which was sent to the Court for filing on March 22, 1994.

6. At the time that I filed respondent’s Notice of Objection and

Motion to Strike in this case (March 22, 1994), none of the requested

files had been retrieved.

7. Some time around the middle of April 1994, I received a box

of closed files with respect to the collateral litigation involving Randall

Goulding and Irving Feinglass. This collateral litigation is reported at

Goulding v. Feinglass, et al, 811 F.2d 1099 (7th Cir. 1987, cert. denied,

482 U.S. 929 (1987).

8. On May 12,1994, I began to review the closed collateral files

involving the Goulding v. Feinglass litigation. On May 13, 1994, late

in the afternoon, I discovered a Report of Investigation by Regional

Inspector--Midwest Region. This Report of Investigation contained an

interview with Revenue Agent Feinglass by Inspectors Peter McCauley

and John Corcoran on January 18, 1985 in Chicago, Illinois. The

Memorandum of Interview, in relevant part, contains the following

statement:

"Inspector CORCORAN then asked

Revenue Agent FEINGLASS if he

ever approached a client of Mr.

GOULDING'S just before trial and

stated "If I were you, I would not

have GOULDING representing me".

He replied that he did not say that,

but did relate a situation involving a

Appendix G Page 24 of 25

tax shelter based on investments

research and development of products

that contained extracts from the Aloe

Vera plant. Prior to the trial, Revenue

Agent FEINGLASS told one of the

investors | BEN ROSENBERG, that

the I.R.S. would accept a cash

settlement from him but only if he

supplied the I.R.S. with information

and discharged RANDALL

GOULDING as his attorney. This

was done per the instructions of

I.R.S. Legal council, LOREN GORE

and BILL SABIN. Revenue Agent

FEINGLASS believed this occurred

sometime in September or October

1984. The offer was declined."

9. On May 13, 1994, my immediate supervisor, James C.

Lanning and the Regional Counsel John T. Lyons, were not in the

office.

10. First thing Monday morning on May 16, 1994, I brought

the above to the immediate attention of my supervisor James C.

Lanning.

1]. On May 17, 1994, pursuant to directions received from

Regional. Counsel John T. Lyons, this matter was referred to the

Regional Office of Inspection.

12. On May 17, 1994, Midwest Regional Office of Inspection

began their investigation with respect to the allegations made in the

1985 interview by Revenue Agent Feinglass and the statements made

in the Affidavits and Declaration submitted with respondent's Notice

of Objection in this case.

13. The investigation by the Regional Office of Inspection also

includes the Department of Treasury, Inspector General. This

Appendix G Page 25 of 25

investigation is still open.

Further declarant sayeth not.

*s/ 99

Date Robert M. Ratchford