A little over a year after issuing a 69-page sealed Order Finding Government Misconduct in a tax evasion prosecution, the Court unsealed an Order calling out prosecutors and IRS employees for willfully withholding evidence and making misrepresentations to the defense and to the Court.
The case centered on allegations that the defendant, a physician, evaded the payment of taxes to the IRS by claiming improper deductions on his tax returns. In the course of preparing its defense, B | K attorneys scoured IRS records and made discovery requests regarding several matters, including a one-line reference in an IRS record stating that an IRS agent was removed from working on the defendant’s file due to an unexplained “conflict.” Despite B|K’s repeated requests for materials related to that agent, DOJ prosecutors refused to provide information, even after being ordered to do so by the Court. Instead, the lead prosecutor schemed to provide misinformation to the defense and the Court.
Among other things, the government withheld the fact that the agent had previously broken into the defendant’s airplane hangar and snuck into an apartment owned by the defendant to snoop on the agent’s ex-girlfriend, who the agent believed had an intimate relationship with the defendant. The Order leads off with a discussion of this love “triangle” and its taint on the government’s case.
The defense only learned about the break-in when a former IRS employee who witnessed the break-in disclosed it to the defense when subpoenaed to testify at a hearing. The former IRS employee also testified that she had previously reported the incident to the Treasury Inspector General for Tax Administration (“TIGTA”).
The Court found that lead IRS prosecutor Lori Hendrickson made misleading and untruthful statements to the Court in order to lull the Court “into the belief that the prosecution was appropriately exercising its constitutional duties.” In fact, the Court found, the prosecutor chose to ignore the law, ignore two specific Court orders and make significant misrepresentations to the Court and defense. The judge labeled Hendrickson’s conduct “willful and intentional” and found that the two other prosecutors assigned to the case “exercised reckless disregard of their constitutional duties.”
The Court criticized not only all three prosecutors assigned to the case but also the IRS agent and an investigator from TIGTA, whose “investigation” she found was spartan and one-sided.
The Court also found that the prosecution failed to turn over exculpatory information regarding another ex-IRS employee involved in the case, who had previously been disciplined for using restricted government databases to obtain private information about 43 co-workers, family members, and “numerous women he met or rode the commuter train with,” on over 400 occasions.
The Court found that the Order should be unsealed because “[p]ublic access to court records is particularly important where a case has the potential to bring to light failures of the justice system.” A copy of the opinion on unsealing the Order on Government Misconduct is available here.