United States District Court, D. Arizona
G. MURRAY SNOW, District Judge.
Pending before the Court is Defendant Adrienne Marta Frazer's Motion for New Trial. (Doc. 106.) For the following reasons, the Motion is denied.
On April 15, 2009 Defendant filed false amended tax returns for the 2005, 2006, and 2007 tax years. (Doc. 115 at 63.) On that same date Defendant also filed a false original tax return for the 2008 tax year. ( Id. ) In all of these returns Defendant made false claims that entitled her to large tax refund amounts. ( Id. at 65.) On June 3, 2009, the IRS erroneously paid her a tax return of $593, 651.00 for the 2008 tax return. ( Id. at 77.) The following month, the IRS sent, and the Defendant received, frivolous filer letters for the 2005 through 2007 amended tax returns. ( Id. at 91.) Nevertheless, the next year she again filed an additional false tax return for the 2009 tax year. ( Id. at 109.) The United States charged the Defendant with five counts of Filing False and Fictitious Claims in violation of 18 U.S.C. § 287-one count for each of the five tax years listed above.
At trial, Defendant admitted that the returns were false. (Doc. 115 at 65.) Her main defense was that she did not knowingly file the false tax returns because she legitimately believed the tax instruction she had received from Thomas McFadden-a charlatan who offered false tax advice in seminars that she paid to attend. She began attending these seminars in early 2009. (Doc. 112 at 63.)
The evidence at trial demonstrated that after she received the erroneous refund check for her false 2008 return, and after she had received the frivolous filing letters from the IRS, she began to recruit others to attend Mr. McFadden's seminars, showing a copy of her refund check during his instruction to demonstrate the legitimacy of his method. (Doc. 115 at 90-94.) The next year, on April 16, 2010, she again filed her tax returns for the 2009 tax year, using Mr. McFadden's fraudulent method. ( Id. at 109.)
A month later the IRS, which had unsuccessfully been trying to obtain repayment of the erroneously-issued refund check for the 2008 tax year, levied her personal financial accounts. (Doc. 112 at 36.) The levy only recouped about $14, 000 of the $593, 651.00 the IRS had erroneously paid to the Defendant, and the Defendant's bank account statements showed that most of the money had been spent by the date of the levies. ( Id. at 40.) The government also demonstrated that shortly after receiving the refund almost a year earlier the Defendant spent large sums at Saks Fifth Avenue, on home improvements, on personal care and other personal items, and that she made large gifts to family members. (Doc. 115 at 76-83.)
The IRS sent and the Defendant received several letters and forms in early June 2010, stating that she owed the government $621, 062.00. (Doc. 112 at 28-29.) Defendant testified that upon the advice of Thomas McFadden, she mailed these forms back to the IRS after she signed them back over to the IRS apparently as an assertion of some form of payment. (Doc. 115 at 114-15.) On September 9, 2010 Special Agent Neri met with Defendant and informed her that she was under investigation for criminal violations of the tax code. (Doc. 95 at 8.)
After all of these events, Defendant consulted a tax attorney, Mr. Becker. (Doc. 115 at 34-35.) At trial, the Defendant testified that as a result of a conversation she had with Mr. Becker she felt no immediate need to return to the IRS her erroneous refund:
Q: And after that conversation, did you - what did you do with regard to trying to repay this money?
A: Based on his advice, I was waiting to see how this would be resolved with the IRS.
(Doc. 115 at 36.). At this point the Government objected to this testimony as hearsay, and the Court, after discussions with the Parties, sustained the objection, struck the testimony, and instructed the jury to disregard Defendant's comments. ( Id. at 37.) The Court later allowed the Defendant to testify that she was "under the impression" that she was not required to return the money until after the criminal matter had been decided. ( Id. at 136.) After a five-day trial, a jury found Defendant guilty of all five counts on November 13, 2014. (Doc. 98.)
Defendant has since filed a motion for new trial in which she asserts four grounds supporting her request. First is the Court's erroneous exclusion of the Defendant's testimony regarding the advice she received from Mr. Becker concerning repayment of the erroneous refund to the IRS. Second is the admission into evidence of the draft tax return for the 2008 tax year that was prepared for the Defendant by her tax accountant but which was different from the return the Defendant filed with the IRS. The Defendant nevertheless subsequently claimed this draft return from her accountant and faxed it to a California corporation by the name of Taskrow (hereafter "the Taskrow fax"). (Doc. 115 at 9.) Defendant claims that admission of such evidence was error. Third, the Defendant claims the Prosecutor committed misconduct by objecting to ...