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U.S. v. HOLLIER

April 19, 2004.

UNITED STATES OF AMERICA, -against- KIMBERLY HOLLIER, Defendant


The opinion of the court was delivered by: VICTOR MARRERO, District Judge

DECISION AND ORDER

A jury convicted the defendant in this action of three counts tax evasion, and he now moves the Court to set aside the verdict and enter a judgment of acquittal. The Court finds that the evidence supporting the conviction was more than sufficient and that were no legal errors to justify entering a judgment of acquittal. The motion is denied.

I. BACKGROUND

  A grand jury indicted defendant Kimberly Hollier ("Hollier") on three counts of tax evasion, in violation of 26 U.S.C. § 7201, one count for each of the years 1996, 1997, and 1998. The indictment charges that Hollier earned wages as a carpenter for the New York City Housing Authority ("NYCHA"), but that he attempted to avoid paying taxes on those wages by, among other means, not filing proper income tax returns and by filing fraudulent Internal Revenue Service ("IRS") documents.

  In two days of trial testimony, the Government presented substantial and compelling evidence against Hollier. The evidence showed that Hollier fraudulently sought to be considered "exempt" from having NYCHA withhold a portion of his wages. Under applicable IRS regulations, an individual is exempt from withholding only if he had no tax liability in the previous year and expects to have no tax liability for the current year. In each of the relevant years, Hollier declared on IRS Form W-4 that he was exempt from withholding, even though he was earning a substantial amount of taxable income — almost $60,000 in 1997. Based on those false W-4s, Hollier was initially considered "exempt" and presumably received full paychecks, without federal tax withholdings. The IRS noticed the obvious discrepancy and sent letters to NYCHA directing it to begin withholding federal taxes from Hollier's paycheck. The IRS also sent letters notifying Hollier of the change in his withholding status.

  NYCHA then received a series of letters, purportedly from the IRS, directing NYCHA to ignore the IRS's previous letters and to consider Hollier exempt. The evidence overwhelmingly suggested that those letters were fake. The Government introduced evidence of what actual IRS letters — computer-generated form letters — would look like. The wording on the fake letters did not match the IRS's form letters, and the fake letters contained the wrong identification code. In fact, the identification code on the fake letters corresponded to the type of form letter which the IRS sends to notify employees (not employers) of a change in withholding statis. As stated, Hollier had received such a letter.

  Even beyond the common sense observation that only Hollier stood to benefit from the fake letters, the evidenre overwhelmingly suggested that Hollier created the frauduleit documents. One letter was faxed to NYCHA along with a cover sheet containing Hollier's phone number and stating that it was from "Kimberly Hollier." Another letter arrived at NYOA in an IRS envelope with a postal sorting stamp and bar ccie for zip code "11218." A NYCHA employee testified that NYCHA as located in zip code 10007 and that all of its mail typically includes the sorting stamp and bar code for "10007." Hollier lived in Brooklyn in zip code 11218, suggesting that he had "recycled" an envelope he had received from the IRS to mae his fake IRS letters appear authentic.

  IRS Agent Robert Doran testified that he interviewed Hollier in July 1998 and told Hollier that he was under criminal investigation for tax evasion. In August 1998, Hollier filed, for the first time, his 1996 tax return. In that return, Hollier states that he had zero taxable income for the year 1996, and he sought a refund of all the funds which the Government had withheld. In October 2000, Hollis: filed, also for the first time, his 1997 and 1998 tax returns Each continued the same pattern as 1996: Hollier claimed have no taxable income and sought a refund of all withheld taxes.

  Hollier did not testify nor did he present any witnesses in his defense. The Court instructed the jury that, for each count, it could enter a guilty verdict only if the Government proved each of the following three elements of tax evasion beyond a reasonable doubt: (1) that Hollier owed taxes for the relevant year; (2) that Hollier committed an affirmative act attempting to evade, or evading those taxes owed; and (3) that Hollier acted wilfully. See Tr. at 275-76; see also Sansone v. United States, 380 U.S. 343, 351 (1965) (listing elements of tax evasion). After about two hours of deliberations, the jury reached a guilty verdict on all three counts.

  II. STANDARD OF REVIEW

  Where a jury has returned a guilty verdict, Federal Rule of Criminal Procedure 29 permits a court to set aside the verdict and enter an acquittal "of any offense for which the evidence is insufficient to sustain a conviction." Fed.R.Crim.P. 29(a). However, the Court must deny the motion if the Court concludes that, "viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319 (1979) (emphasis in original). III. DISCUSSION

  Hollier first argues that no rational juror could have convicted him because he fully disclosed to the IRS all the information necessary to compute his proper tax liability. Hollier points out that he submitted autheiric IRS Forms W-2 with each of his 1996, 1997, and 1998 tax returns, and that those forms clearly showed his earnings. Becaise Hollier fully volunteered this information to the IRS, the argument goes, he could not have intended to hide anything from the IRS.

  The Court is unpersuaded. Hollier filedthose tax returns years after they were due and after he had already committed independent acts of tax evasion which would suffice to uphold the conviction — e.g., submitting fraudulmt W-4s to NYCHA and creating fake IRS correspondence. Moreover, Hollier's tax returns falsely stated that Hollier had zerr taxable income, and actually sought a refund from the Government for all taxes withheld. Hollier sought that refund even after knowing he was under criminal investigation for tax evasim. The fact that Hollier also included his W-2s (which the IRS no doubt could obtain from NYCHA, in any case) in his submissions to the IRS does not in any way suggest that Hollier was not committing tax evasion. Rather, it indicates that Hollier's attempts to avoid his tax obligations were especially bazen.

  Hollier next argues that he was denier his right to a summation. At several points during closing remarks, Hollier's attorney attempted to argue that Hollier actually believed that the Government did not have the hight or authority to impose taxes on him. This line of argument was apparently intended to show that Hollier's actions were not willful. The Court sustained the Government's objections because there was absolutely no evidence on the record regarding Hollier's beliefs in this respect. The Court issued a short, written decision explaining its reasoning on this point. See United States v. Hollier, No. 03 Cr. 144, 2004 IL 34394450 (S.D.N.Y. Feb. 25, 2004). Hollier re-argues that same point, but now suggests that there exists evidence baring upon Hollier's willfulness. Specifically, Hollier states that he submitted letters with each of his tax ...


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