Before indicting a case, prosecutors prepare a prosecution memo (or “pros memo”) that lays out admissible evidence, possible charges, and legal issues. This document provides a basis for prosecutors and their supervisors to assess whether the case meets the standard set forth in the Federal Principles of Prosecution, which permit prosecution only when there is sufficient evidence to obtain and sustain a conviction. Before a decision is made about bringing charges against Trump (and co-conspirators, if any), prosecutors will prepare such a memo.

There is sufficient evidence to obtain and sustain a conviction here, if the information gleaned from government filings and statements and voluminous public reporting is accurate. Indeed, the DOJ is likely now, or shortly will be, internally circulating a pros memo of its own saying so. That DOJ memo will, however, be highly confidential, in part because it will contain information derived through the grand jury and attorney work product. Since it will not be publicly available, we offer this analysis. Ours is likely more detailed than what DOJ will prepare internally for explanatory purposes. But, given the gravity of the issues here, our memo provides a sense of how prosecutors will assemble and evaluate the considerations that they must assess before making a prosecution decision.

Our memo analyzes six federal crimes in depth:

Mishandling of Government Documents
1. Retention of National Defense Information (18 U.S.C. § 793(e))
2. Concealing Government Records (18 U.S.C. § 2071)
3. Conversion of Government Property (18 U.S.C. § 641)

Obstruction, Contempt, False Information

1. Obstruction of Justice (18 U.S.C. § 1519)
2. Criminal Contempt (18 U.S.C. § 402)
3. False Statements to Federal Investigators (18 U.S.C. § 1001)

In the course of discussing these statutes, we also touch upon others that may have been violated but where the factual predicate for applicability is less clear. For instance, additional charges could be appropriate–under 18 U.S.C. §§ 798 and 793(e) (dissemination)–if the public reporting regarding Trump’s having intentionally disseminated classified material to aides and others is accurate. Additional charges could also potentially be brought under 18 U.S.C. § 1924 if there is sufficient evidence that Trump unlawfully removed classified documents from the White House (see our discussion of DOJ precedents for past prosecutions under § 1924 in Part IV and in the Appendix). Based on the publicly available information to date, a powerful case exists for charging Trump under several federal criminal statutes, which we discuss in detail.

Methodology

In considering prosecution of a former president, we begin with the standard articulated by Attorney General Merrick Garland: “upholding the rule of law means applying the law evenly, without fear or favor.”^[1] In other words, this case must be evaluated for prosecution like any other case with similar evidence would be, without regard to the fact that the case is focused on the conduct of a former president of the United States. This memo accordingly includes a balanced assessment of this particular case, and a thorough review of past DOJ precedents for charging similar cases. Those past cases show that to decline to bring charges against Trump would be treating him far more favorably than other defendants, including those who were charged for less egregious conduct than his. “All Americans are entitled to the evenhanded application of the law,”^[2] Garland has stated, and we are guided by the values underlying those words as well.

This model prosecution memo is, however, limited in an important sense. Throughout the memo, we draw as much as possible on the unusual amount of factual information provided by the Government in its court filings. We do not, however, have visibility into the full volume of information the Justice Department has assembled. That means we could be missing important facts, including exculpatory evidence, that may inform the DOJ’s decision-making process. We may be unaware of admissibility issues with some of the evidence. And equally true, the evidence could be better or more extensive than what is available in the public record.

What’s more, by necessity, we at times rely on news reports from investigative journalists whereas the actual prosecution memo would instead rely on direct evidence the federal investigators have collected. For that reason, we do not reach an unqualified charging decision. Instead, we conclude that there is sufficient evidence to obtain a conviction here, if the Government filings and statements and voluminous public reporting we detail below are accurate. We also note that, based on the reported facts, charges would be strongly warranted based on Department precedent in similar cases.^[3]

The model prosecution memorandum is available below as a SCRIBD file and also as a separate PDF.

Also, to hear more about the memo from some of its co-authors check out the Just Security podcast. A conversation with Andrew Weissmann, Joyce Vance, and Ryan Goodman.

Model Prosecution Memo – Trump Classified Documents Second Edition June 2023 by Just Security on Scribd

– – – – – – –

^[1] Department of Justice, Attorney General Merrick Garland Delivers Remarks (Aug. 11, 2022), https://www.justice.gov/opa/speech/attorney-general-merrick-garland-delivers-remarks.

^[2] Id.

^[3] Two of the authors of this model prosecution memo, Norman Eisen and Fred Wertheimer, were among the counsel for amici supporting DOJ’s position in litigation before the U.S. District Court for the Southern District of Florida, and the U.S. Court of Appeals for the Eleventh Circuit, related to the criminal investigation mentioned in this report. For more information, see https://democracy21.org/category/news-press/press-releases.

 Photo credit: Coolcaesar from Wikimedia Commons

The post Model Prosecution Memo for Trump Classified Documents appeared first on Just Security.

Just last month, a former President Donald Trump was arraigned on an indictment for thirty-four felony false books and records charges in New York. Because those charges are felonies, Manhattan District Attorney Alvin Bragg is required to prove that the falsifications were made with the intent “to commit…aid or conceal” another crime. As expected, Bragg pointed to federal and state campaign finance violations as those possible other crimes.

But a surprise came when Bragg also suggested that tax violations may serve as a basis for this felony “bump-up.” His statement of facts declared that “The participants also took steps that mischaracterized, for tax purposes, the true nature of the payments made in furtherance of the scheme.”

Now that suggestion has been confirmed in his response on May 16 to Trump’s request for a bill of particulars: tax crimes are among the possible crimes Bragg will pursue as a predicate to bump up the charges against the former president.

Commentators have noted the potential power of the tax allegations to help Bragg bolster his case. But, the exact contours of the possible tax crimes were not clear—even with Bragg’s response to Trump’s request for a bill of particulars in hand. In this essay, we assess what potential tax-related crimes may be implicated by Trump’s alleged mischaracterization of the payments. While the campaign finance bases for the charges may well be sufficient, adding tax bases is important and offers advantages for the prosecutors. Tax-related charges could sidestep potential legal challenges related to campaign finance violations including, for example, issues of federal preemption and state statutory interpretation.

As we explain below, Bragg was wise to strengthen the case by also predicating the felony charges against Trump based on his intent to commit (or aid or conceal) crimes involving false statements to tax authorities. Perhaps the strongest case would involve statements to tax authorities falsely characterizing the payments to Michael Cohen as “legal fees,” rather than the payments’ true nature: a series of simple reimbursements for a hush money payment. Doing so caused the payments to be treated as income to Cohen, which in turn precipitated a tax gross-up so that Cohen would be relieved of any tax burden associated with the mischaracterization.Note that the DA would not have to prove that the tax crimes were actually committed, just that the parties intended them and falsified the business records with that initial intention. We explain these theories of the case below. We describe the law governing offenses involving false statements to tax authorities regardless of whether a defendant’s conduct includes an underpayment or other form of evasion of taxes.

We offer this preliminary assessment based on both Bragg’s response to Trump’s request for a bill of particulars and previously available public information. Additional information is likely to develop as the case progresses. We note below where further information would be helpful before reaching any firm conclusion on a matter.

Factual and Procedural Background

The main facts of the case have been known for some time (and are detailed and periodically updated in a Just Security chronology).

On April 4, 2023, former president Donald Trump was arraigned and pleaded not guilty in New York State Supreme Court to state felony charges that he “repeatedly and fraudulently falsified New York business records to conceal crimes that hid damaging information from the voting public during the 2016 presidential election.”

The indictment and its accompanying “statement of facts” accuse Trump of orchestrating a “catch and kill” scheme with his fixer Michael Cohen, American Media, Inc. (AMI)’s former CEO David Pecker, and others to influence the election by “identifying and purchasing negative information” about Trump “to suppress its publication and benefit” his “electoral prospects.”

DA Bragg alleges that, in October 2016, Trump had attorney Michael Cohen pay adult film actress Stormy Daniels (whose real name is Stephanie Clifford) a $130,000 payment to prevent her from publicizing an alleged sexual encounter she had with Trump. To conceal the hush money payment, it was agreed that Cohen would make the payment to Daniels via a shell company (Essential Consultants), on the agreement that Trump would later reimburse Cohen.

In 2017 Cohen was reimbursed, in eleven almost-monthly installments. The invoices Cohen submitted each stated that it was “pursuant to [a] retainer agreement” and each sought “payment for services rendered” for the relevant month of the invoice.

Some reimbursement payments were made from the Donald J. Trump Revocable Trust and others from Trump’s personal bank account. While the Trump Organization likely did not label the payments as “income” in its records, the inevitable corollary of characterizing them as legal fees was to cause the payments to be treated as “income” on Cohen’s tax returns. According to Bragg, the $130,000 payment was added “to a $50,000 payment for another expense for which” Cohen “also claimed reimbursement, for a total of $180,000.” That amount was to $360,000 so that Cohen “could characterize the payment as income on his tax returns, instead of a reimbursement,” and so that Cohen “would be left with $180,000 after paying approximately 50% in income taxes.” “An additional $60,000” was added “as a supplemental year-end bonus.” Together, these amounts totaled $420,000. These allegations are consistent with the Department of Justice’s court filings in Cohen’s federal criminal case.

The Manhattan DA’s indictment alleges that the Trump Organization’s business and organizational records included a series of invoices and ledger entries recording the arrangement, characterizing the 11 payments as legal fees for Cohen’s services. These entries form the basis of the 34 books and records counts.

DA Office Statements About the Tax Scheme

The district attorney’s office has made the following statements in relation to tax violations.

• “The participants also took steps that mischaracterized, for tax purposes, the true nature of the payments made in furtherance of the scheme.” Statement of facts, § 2 (emphasis added)
• Bragg: “Participants in the scheme took steps that mischaracterized, for tax purposes, the true nature of the reimbursements.” Press Release.
• Bragg: “In order to get Michael Cohen his money back, they planned one last false statement. In order to complete the scheme, they planned to mischaracterize the payments to Mr. Cohen as income to the New York State tax authorities.” Press Conference (emphasis added).
• Bragg: “We have charged falsifying business records for those who were seeking to cover up sex crimes and we have brought this charge for those who committed tax violations.” Press Conference.
• Assistant District Attorney Christopher Conroy: “After the election, defendant reimbursed the lawyer through a series of disguised monthly payments that hid the true nature of the payoff by causing a series of false business records in the records of the Trump Organization here in Manhattan, and even mischaracterized for tax purposes the true nature of the payment. Defendant falsified these New York business records with the intent to defraud, including the intent tocommit[sic] another crime, and to aid and conceal the commission of another crime.” Arraignment hearing (emphasis added).
• DA Office: “[T]he People further refer defendant to certain facts, among others, set forth in the Statement of Facts relating to … disguising reimbursement payments by doubling them and falsely characterizing them as income for tax reasons Court filing in response to defendant’s request for bill of particulars.

The SDNY’s Criminal Information and Sentencing Memorandum in Cohen’s case also discussed the reimbursement being “‘grossed up’ for tax purposes.”

It is worth noting that in his press conference Bragg also cited false statements to tax authorities as one of the “unlawful means” needed to prove a violation of New York Election Law, § 17-152: conspiracy to promote or prevent election. “I further indicated a number of unlawful means, including more additional false statements, including statements that were planned to be made to tax authorities.”

Bragg’s Response to Trump’s Request for Bill of Particulars

On April 27, Trump filed a Request for a Bill of Particulars seeking information concerning the other crime(s) Trump is “alleged to have committed or intended to commit or to aid or conceal the commission thereof by means of the allegedly false business record.”

Now, Bragg has responded, stating that “the crimes defendant intended to commit or to aid or conceal may include violations of … New York Tax Law §§ 1801(a)(3) and 1802,” in addition to various state and federal election crimes as well as other violations of the falsifying books and records statute. Notably, Bragg declined to state that the list of crimes included in his response as exclusive—suggesting that other crimes, including other state and federal tax crimes as described below, could also later be added to bolster the prosecution’s case.

Applicable Law

Because Bragg’s response to the request for a bill of particulars leaves open the door that other offenses than those listed might also serve as the “bump-up” predicates to the falsifying business records charges, in addition to New York state tax statutes, we also consider the possibility that prosecutors will attempt to leverage federal tax offenses for this purpose. Two statutes appear most relevant: Declaration under Penalties of Perjury (26 U.S.C. 7206(1)), and Willful Assistance in Preparation of False or Fraudulent Tax Documents (26 U.S.C. 7206(2)).

While New York State tax law is distinct from federal tax law, the two bodies of law, especially in respect of false filing statutes, share similar principles and concepts. As a result, New York State courts often look to federal law for guidance in interpreting and applying state provisions. See, e.g., People v. Essner, 124 Misc. 2d 830, 835-36 (N.Y. Sup. Ct. 1984) (court looked to federal securities laws for the applicable definition of materiality under § 175.45, issuing a false financial statement); State v. Rachmani, 71 N.Y.2d 718, 725-26 (1988) (for New York’s Martin Act, the court adopted the standard for materiality used by federal courts). Accordingly, we analyze the elements of potential charges under New York Tax Law §§ 1801(a)(3) and 1802 with reference mainly to federal law as well as state law (where available).

The two federal statutes are in many ways similar. Section 7206(1) focuses on those who cause false statements in their own tax documents—thus inclusion by Bragg of this statute would focus on Cohen’s criminal conduct of including false statements in his tax returns, which Trump sought to aid or conceal. Conversely, § 7206(2) criminalizes those who cause, assist or aid false statements in others’ tax documents—thus Bragg’s focus here would be on Trump’s intent to assist Cohen in making false statements in his tax returns.

Given their similarities, we discuss all four statutes together (the two state and the two federal tax offenses). First, we set out the elements of each offense, which are very similar. We then address the elements as follows: falsity, materiality, and intent.

Additionally, a variety of other statutes may be applicable depending on how the facts develop, and, by way of example, we also include a brief treatment of Conspiracy to Defraud the United States (18 U.S.C. 371) on the federal side, and on the state side, Offering a False instrument for Filing in the First Degree (N.Y. Penal Law, § 175.35) or Second Degree (N.Y. Penal Law, § 175.30).

Elements of the Offenses

1. New York Criminal Tax Fraud (New York Tax Law, Chapter 60, Article 37, Part 2)

New York Tax Law § 1801(a) defines a “tax fraud act” and is the basis of all New York criminal tax fraud offenses. For Bragg’s case, under § 1801, if a person willfully acts (or causes another to act) in any of the following ways, that person has perpetrated a tax fraud act:

1. knowing that a return, report, statement or other document under this chapter contains any materially false or fraudulent information, or omits any material information, files or submits that return, report, statement or document with the state or any political subdivision of the state, or with any public office or public officer of the state or any political subdivision of the state (§ 1801(a)(2))

2. knowingly supplies or submits materially false or fraudulent information in connection with any return, audit, investigation, or proceeding or fails to supply information within the time required by or under the provisions of this chapter or any regulation promulgated under this chapter (§ 1801(a)(3))

3. engages in any scheme to defraud the state or a political subdivision of the state or a government instrumentality within the state by false or fraudulent pretenses, representations or promises as to any material matter, in connection with any tax imposed under this chapter or any matter under this chapter (§ 1801(a)(4))(emphasis added)

All three of the above tax fraud acts include three elements: (1) falsity; (2) materiality; and (3) intent (willfulness). The first two provisions also require the tax document to be filed, submitted or supplied. The last provision, by its clear wording, also requires an intent to defraud the state.

Any person who commits any tax fraud act listed above is guilty, at minimum, of criminal tax fraud in the fifth degree, a Class A misdemeanor crime under § 1802. No additional mens rea is required. A misdemeanor is sufficient to serve as the predicate to make falsifying business records a felony. For felony criminal tax fraud in the first to fourth degrees under §§1803-1806, there are additional elements:

1. an intent to evade tax or defraud New York state (such intent to defraud is, as noted above, also required for 1801(a)(4) in the fifth degree); in
2. a payment to the state (whether by means of underpayment or receipt of refund or both) in a tax year; and
3. of a stated amount (the amount determining the degree of the offense).

2. Declaration under Penalties of Perjury (26 U.S.C. 7206(1))

It is a felony under § 7206(1) for any person who “[w]illfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter.”

The elements of a Section 7206(1) conviction have been addressed at length by the case law. See e.g., United States v. Bishop, 412 U.S. 346, 350 (1973); United States v. Pirro, 212 F.3d 86, 89 (2d Cir. 2000); United States v. Clayton, 506 F.3d 405, 410, 413 (5th Cir. 2007) (per curiam). Those elements are:

1. The defendant made and subscribed a return, statement, or other document which was false as to a material matter;
2. The return, statement, or other document contained a written declaration that it was made under the penalties of perjury;
3. The defendant did not believe the return, statement, or other document to be true and correct as to every material matter; and
4. The defendant falsely subscribed to the return, statement, or other document willfully, with the specific intent to violate the law.

3. Willful Assistance in Preparation of False or Fraudulent Tax Documents (26 U.S.C. 7206(2))

Under § 7206(2), it is a felony for any person who “[w]illfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with any matter arising under, the internal revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, affidavit, claim, or document.”

Although § 7206(2) appears calculated to apply primarily to official tax preparers, the statute has been used to prosecute criminal behavior far beyond that group of professionals (see e.g., 43 A.L.R. Fed. 128 (Originally published in 1979), §§ 10-13). It has been used to prosecute participants in any scheme which causes false statements to be made in others’ tax documents, whether or not the accused actually prepared the return. See e.g., United States v. Clark, 577 F.3d 273, 285 (5th Cir. 2009) (The statute “reaches all knowing participants in the fraud.”); United States v. Crum, 529 F.2d 1380, 1382 (9th Cir. 1976) (“The nub of the matter is that they aided and abetted if they consciously were parties to the concealment of [a taxable business] interest.”); United States v. Siegel, 472 F.Supp. 440, 444 (N.D.Ill.1979) (citing Crum, 529 F.2d 1380) (“[T]he scope of the statute extends to all participants of a scheme which results in the filing of a false return, whether or not those parties actually prepare it.”); United States v. Graham, 758 F.2d 879, 885 (3d Cir.1985) (1985) (quoting United States v. Buttorff, 572 F.2d 619, 623 (8th Cir.) (“[T]here must exist some affirmative participation which at least encourages the perpetrator.”); United States v. HooksUnited States v. Hook, 848 F.2d 785, 791, n.3 (7th Cir. 1988) (citing cases that found liability because of the defendant’s concealing actions); United States v. Hastings, 949 F.2d 400 (9th Cir. 1991) (preparing false corporate financial statements that served as the basis for preparing the corporation’s tax return); United States v. Aracri, 968 F.2d 1512 (2d Cir. 1992) (creating false invoices and shell companies used to prepare false excise tax returns); United States v. Foley, 73 F.3d 484, 493 (2d Cir. 1996) (a state legislator, accepted financial bribes from political contributors in exchange for agreeing to influence legislation and provided those contributors with fraudulent receipts to help disguise their payments as genuine business expenses). See also, IRS Tax Crimes Handbook (2009), pp.72-3; Justice Department, Criminal Tax Manual, Chapter 13, pp.5-8; Federal Tax Coordinator (2nd Ed.), ¶ V-3115.

The elements of a prosecution under Section 7206(2) are also clear and settled. See e.g., United States v. Perez, 565 F.2d 1227, 1233–34 (2d Cir. 1977); United States v. Klausner, 80 F.3d 55, 59 (2d Cir. 1996); United States v. Salerno, 902 F.2d 1429, 1432 (9th Cir. 1990); IRS Tax Crimes Handbook (2009), pp.71-2. Those elements are:

1. The defendant aided or assisted in, or procured, counseled, or advised the preparation or presentation of a return, affidavit, claim, or other document which involved a matter arising under the Internal Revenue laws;
2. The return, affidavit, claim, or other document was fraudulent or false as to a material matter; and
3. The defendant acted willfully.

Unlike with § 7206(1), under § 7206(2) there is no requirement that the document be signed under penalty of perjury. Id.

Although a plain reading of both § 7206(1) and § 7206(2) does not include a filing requirement, some courts have held that the return or statement must be filed. See e.g., United States v. Dahlstrom, 713 F.2d 1423, 1429 (9th Cir. 1983) (filing of a return is a necessary element of § 7206(2)); United States v. Boitano, 796 F.3d 1160 (9th Cir. 2015) (confirming a filing requirement under § 7206(1)); (United States v. Harvey, 869 F.2d 1439, 1448 (11th Cir. 1989) (en banc) (same). Cf. United States v. Feaster, 843 F.2d 1392 (6th Cir. 1988) (per curiam) (holding Dahlstrom as contrary to the plain reading of § 7206(2)). See also, Justice Department, Criminal Tax Manual, Chapter 13, p.2.

First Key Issue: Falsity. Bragg may argue that the representations made in Cohen’s tax returns were false statements and were false in at least two ways:(1) the mischaracterization of the funds as payment for legal services, and (2) the resulting treatment of the payments “income.”

a. False statement as to the mischaracterization of the funds as payment for legal services

According to Bragg, each of the eleven checks made out to Cohen was “issued for a phony purpose.” The checks, which were in fact simple repayments, were “illegally disguised” as payment for legal services rendered in 2017 pursuant to a “non-existent retainer agreement.” Cohen’s plea agreement said the same: “there was no such retainer agreement, and the monthly invoices COHEN submitted were not in connection with any legal services he had provided in 2017.” See also Department of Justice Sentencing Memorandum for Michael Cohen (“In fact, no such retainer agreement existed and these payments were not ‘legal expenses’ – Cohen in fact provided negligible legal services to Individual-1 or the Company in 2017 – but were reimbursement payments.”).

Trump “could not simply say that the payments were a reimbursement for Mr. Cohen’s payments to Stormy Daniels,” Bragg said during the press conference. “To do so, to make that true statement, would have been to admit a crime. So instead, Mr. Trump said that he was paying Mr. Cohen for fictitious legal services in 2017 to cover up an actual crime committed the prior year.”

b. False statement of “income”

By characterizing the reimbursement payments to Cohen as legal fees, the Trump Organization necessarily caused Cohen to report the amount as income, subject to tax on Cohen’s return. But, the repayment to Cohen of the funds paid to Daniels would simply not be regarded for tax purposes as “income.” The payment was a straight dollar-for-dollar reimbursement of a purely personal expense (whether related to Trump’s marriage or to his campaign).

It was therefore false for Cohen to then tell tax authorities that he received the $130,000 in “income.” Similarly, the Trump Organization was therefore not required to report the full $420,000 worth of payments to Cohen on Cohen’s Form W-2, as reimbursements are not “income” to be included on such a form.

However, an argument could be made that both the $130,000 reimbursement amount and the equal $130,000 “bump up” paid to cover Cohen’s taxes were income to Trump, as they represented payments by the Trump Organization for personal expenses of Trump. Such a payment is frequently referred to as a “constructive dividend,” where a business owner causes the business to pay for personal expenses. Here, it is unclear how the Donald J. Trump Revocable Trust and Trump’s personal account, the issuers of the checks, are integrated into the Trump Organization’s accounting system and tax reporting. Whether or not a payment is a dividend depends on whether the Trump Organization had earnings and profits, a matter we’re fairly certain is entirely too complicated to delve into for the purposes of Bragg’s criminal case. See e.g., Boulware v. United States, 552 U.S. 421 (2008). Moreover, it would likely also require analysis of Trump’s personal income tax returns – another quagmire.

But it’s even more likely that none of this really matters from a criminal prosecution perspective, since all of these issues arise from the same false statement: that the payments to Cohen were for legal services. In prosecuting a criminal case, simplicity is usually better; the focus is on the false statement itself, not its technical tax consequences.

Second Key Issue: Materiality. If Cohen erroneously claimed the repayments as part of his income in submitting tax returns, he would have effectively overstated his income, thus triggering an overpayment of tax. How, then, could Cohen’s tax returns form the basis of a tax violation? Indeed, some may argue that the statement was not material if it did not cause any financial loss. But the law does not require such a loss. It is a crime to submit intentionally false statements to tax authorities, even if the statement does not involve evasion of tax.

a. Materiality under federal tax law

We have not identified any New York tax case interpreting the meaning of materiality under state law. Accordingly, as noted above, we first look to federal law for guidance. In contrast to the crime of tax evasion, federal false statement tax statutes generally do not require proof of a tax deficiency, i.e. a difference between what was reported and the taxpayer’s correct tax liability. See e.g., United States v. Tsanas, 572 F.2d 340, 343 (2d Cir. 1978) (regarding § 7206(1)); Edwards v. United States, 375 F.2d 862 (9th Cir. 1967) (§ 7206(2) is directed not to evasion or defeat of tax but rather to falsification and counseling and procuring of deception as to any material matter); IRS Tax Crimes Handbook (2009), p.72 (regarding § 7206(2)); Justice Department, Criminal Tax Manual, Chapter 13, pp.12-14 (regarding § 7206(2)). Thus, a defendant may be convicted even where a tax refund is due. See e.g., United States vs. Witasick, W.D. Va., No. 4:07-CR-00030-001, 15-16 (Apr. 7, 2014).

What prosecutors must instead prove is whether the statements made were false as to a “material” matter. This is a question for the jury to decide. See e.g., Neder v. United States, 527 U.S. 1, 4 (1999); United States v. Jackson, 196 F.3d 383, 384-85 (2d Cir. 1999) (reaffirming Neder); United States v. Gaudin, 515 U.S. 506, 522-23 (1995) (holding that “materiality” is a question for the jury in prosecutions for false statements under 18 U.S.C. § 1001). It’s worth noting, as the Justice Department has in Chapter 12 of Criminal Tax Manual on § 7206(1), that “[w]hile courts still maintain that proof of a tax deficiency is not required in a section 7206(1) prosecution, … some post-Gaudin opinions indicate that the presence or lack of a tax deficiency may be relevant to a jury’s determination of materiality.”

The three questions Bragg will therefore need to consider are: (1) what “material” means; (2) is the nature of a payment considered material; and (3) does overreporting or overstating income negate materiality. One of the leading authorities on all three questions is United States v. DiVarco, 484 F.2d 670 (7th Cir. 1973), aff’g, 343 F. Supp. 101, (N.D. Ill. 1972).

Under the DiVarco definition—adopted by most circuits, including the U.S. Court of Appeals for the Second Circuit—a false statement is “material” if it has a natural tendency to influence or impede the IRS in ascertaining the correctness of reported tax or in verifying or auditing the returns of taxpayers. See, United States v. Bok, 156 F.3d 157, 164-65 (2d Cir. 1998) (regarding § 7206(1)); Neder, 527 U.S. at 16 (adopting for § 7206(1) the definition of materiality in Gaudin, 515 U.S. at 522-23 regarding 18 U.S.C. § 1001: “a natural tendency to influence, or [is] capable of influencing, the decision of the decisionmaking body to which it was addressed”); United States v. Klausner, 80 F.3d 55, 60, n.4 (2d Cir. 1996) (regarding § 7206(2)); United States v. Potstada, 206 F. Supp. 792, 794 (N.D. Cal. 1962) (Under § 7206(2) “it is sufficient to allege and prove obstruction, delay or impairment of governmental functions.”).

Importantly, the statement needs to have only the “potential” for influencing or impeding the IRS. United States v. Greenberg, 735 F.2d 29, 31 (2d Cir. 1984) (“The question is rather whether the statement had the potential for an obstructive or inhibitive effect. A consideration of this potential requires an analysis of the responsibilities of the public agency — responsibilities that are assigned by law — and analysis of the relevance of the statement to those responsibilities.”); United States v. Pirro, 212 F.3d 86, 89 (2d Cir. 2000); United States v. Moon, 532 F.Supp. 1360, 1366-67 (S.D.N.Y. 1982), aff’d, 718 F.2d 1210 (2d Cir. 1983)

Prosecutors in the DiVarco case proved that income reported by the defendant on his personal tax returns as commissions from a mortgage and investment business did not come from that business. The defendant had mischaracterized the source of his taxable income. (Note, there was no dispute in DiVarco as to whether the claimed income was, in fact, taxable income, just whether the source of the taxable income was mischaracterized). The court confirmed that “source of income” is to be considered a “material matter” for tax purposes, such that willfully and knowingly stating a false source of income on tax documents is prohibited under § 7206(1)—even in the rarer cases involving an overstatement of taxable income.

It is true … that most, if not all, of the cases involving misstatement of source of income also involved an understatement of taxable income. However, “[o]ne of the more basic tenets running through all the cases is that the purpose behind the statute is to prosecute those who intentionally falsify their tax returns regardless of the precise ultimate effect that such falsification may have.” 343 F.Supp. at 103.

… The plain language of the statute does not exclude the matter of the source of income from the definition of “material matter.” In light of the need for accurate information concerning the source of income so that the Internal Revenue Service can police and verify the reporting of individuals and corporations, a misstatement as to the source of income is a material matter.

DiVarco, 484 F.2d 670, 673 (emphasis added)

The purpose of the statute is, therefore, “not simply to ensure that the taxpayer pay the proper amount of taxes — though that is surely one of its goals.” Instead, the statute “is intended to ensure also that the taxpayer not make misstatements that could hinder” the IRS “in carrying out such functions as the verification of the accuracy of that return or a related tax return.” United States v. Greenberg, 735 F.2d 29, 31 (2d Cir. 1984). New York district courts of the Second Circuit have similarly held that merely mischaracterizing the source of an income or other matter on tax documents will be considered material. United States v. Goldman, 439 F. Supp. 337, 344 (S.D.N.Y. 1977); United States v. Kaczowski, 882 F. Supp. 304 (W.D.N.Y. 1994); Moon, 532 F.Supp. 1360 (misstating source of income on personal tax returns); United States v. Cole, 463 F. 2d 163 (2d Cir. 1972) (related to the mischaracterization of personal legal bills as business expenses); see also United States v. Helmsley, 941 F.2d 71, 93 (2d Cir. 1991) (The district court’s instruction that Section 7206(2) would be violated even if the deductions were allowable but mischaracterized was hardly complex. The alleged offense involved a single predicate act: entering a false statement on a tax form.”). See also, United States v. Mirelez, 496 F.2d 915 (5th Cir. 1974) (through fear of self-incrimination, taxpayer failed to report true source of income as illegal heroin sales); United States v. Diamond, 788 F.2d 1025 (4th Cir. 1986) (falsely listing losses from commodities transactions on Schedule C of Form 1040 as being from a trade or business and misstated occupation to conceal the source of losses).

Cases involving overstatement of income

The bottom line is that Bragg can establish materiality if he can show that Trump intended Cohen to report repayment of expenses or illicit campaign contributions as income, and so to overstate that line on his tax returns. Although unusual, there have been a number of prosecutions involving overstated income.

For instance, in 1975 former New York City Cultural Affairs Commissioner Irving Goldman was indicted by New York federal prosecutors for, among other things, filing false corporation returns on behalf of a shell company he created, Jola Candy Inc., in that the returns falsely stated gross income by including payments received for goods it had charged at unnecessarily “inflated and excessive prices.” In an attempt to have the indictment dismissed, Goldman argued that, as Jola’s returns included an “overstatement of income” which resulted in an “overpayment of taxes,” the materiality element under was not made out. The Court rejected the argument, citing DiVarco.

[T]he cited authorities do suggest that a statement is material if it is capable of influencing actions of the IRS in any matter within its jurisdiction. The question then is whether overstatement of income is a material matter. The accuracy of items of taxable income reported on the return of one individual or entity may affect the ability of the IRS to assess the tax liability of another taxpayer. Furthermore, overstated income may shield from scrutiny falsely inflated deductions. Thus, an overstatement of income impairs the ability of the IRS to determine if the correct amount of tax has been paid. United States v. DiVarco, 343 F.Supp. at 103. The conclusion that an overstatement of income may result in a prosecution is buttressed by the Congressional determination to make Section 7206(1) a crime separate and apart from income tax evasion, 26 U.S.C. § 7201.

United States v. Goldman, 439 F. Supp. 337, 342 (S.D.N.Y. 1977) (emphasis added)

In United States v. Barrow, the defendant underreported income on his personal tax returns and overreported income on an amended corporate return. The Sixth Circuit held that both underreporting and overreporting were material. “Under this section, false statements are material if they make it more difficult for the IRS to verify defendant’s tax returns.” United States v. Barrow, 118 F.3d 482, 493-94 (6th Cir. 1997).

Another example is United States v. Lamberti, in which the defendant, a parolee, was accused of overstating his hours of work and income on tax returns in order to trick his parole officer into believing that he had worked the minimum hours required under his parole conditions. United States v. Lamberti, 847 F.2d 1531 (11th Cir. 1988). The Eleventh Circuit held that the overstatement of income to the Parole Commission was material for the purposes of false statements under § 18 U.S.C. 1001, and, in respect of the federal tax statute, made its position clear: “As to the completely independent § 7206(1) tax charges, his assertion hinges on his untenable theory that an overstatement of income cannot be a material false statement for purposes of 26 U.S.C. § 7206(1), because it can lead only to overestimation and overpayment of tax liability.” Id. at 1536. As the indictment “did not rest solely upon” overstatements, but instead rested “primarily” upon false statements claiming that he had only one source of income, the court held it unnecessary to consider further Lamberti’s contention that an overstatement of income cannot violate § 7206(1). Id.

In United States v. Bouzanis, one of the defendants was accused of “aiding, counseling and causing the preparation and presentation of a false and fraudulent tax return” belonging to a co-defendant, in that the return included false, inflated income, which was submitted in support of a loan application. The Illinois district court, citing Divarco and the Second Circuit decision in Greenberg, rejected the defendant’s argument that overstated income was not “material.” United States v. Bouzanis, 00 CR 1065, 2003 WL 920717, at *2 (N.D. Ill. Mar. 7, 2003).

Another case involving inflated income is United States v. Barshov, where the defendants, who had formed limited partnerships to purchase motion picture films for distribution and exhibition, inflated the purchase prices and the income generated by the films in order to maximize depreciation costs and investment credits, and caused returns to be filed based on the inflated figures. United States v. Barshov, 733 F.2d 842, 845-46 (11th Cir. 1984).

b. Materiality under New York non-tax law

As noted above, our research turned up no New York State criminal cases specifically addressing the concept of “materiality” for the purposes of New York Tax Law. Nevertheless, the general principles of materiality under federal law offer helpful guidance. Given the similarities in wording and purpose between N.Y. Tax Law § 1801(a)(2) and federal § 7206(1) and (2), it is likely that the New York state courts would adopt the federal definition of materiality as set forth in DiVarco.

The case of People v. De Leo, a decision by the Appellate Division of the Supreme Court of New York, Third Department, offers a glimpse into how New York state courts would likely define materiality under false tax filing laws. People v. De Leo, 185 A.D.2d 374, 585 N.Y.S.2d 629 (N.Y. App. Div. 1992). The defendant was convicted of second degree perjury (as well as second degree forgery and attempted grand larceny) for two false statements he made in a real property transfer gains tax affidavit. First, he falsely claimed to be acting in the capacity of attorney-in-fact for the seller of the property. Second, he significantly understated the amount of consideration he received on transfer for his role as purported attorney. The defendant argued on appeal that the false statements were not “material to the action, proceeding or matter involved” within the meaning of the perjury statute (§ 210.10). Rejecting the defendant’s contention and affirming the conviction, the Third Department court stated:

The gravamen of his claim in this regard is that the misstatement of one’s authority to act and the amount of consideration received in a transfer gains tax affidavit are not “material to the action, proceeding or matter involved” within the meaning of Penal Law § 210.10. We disagree. The purpose of the affidavit is to assess the amount of tax due, if any, upon the transfer of realty and to identify those responsible therefor (see, Tax Law art. 31–B). Because calculation of taxes owed is dependent upon the consideration recited in the affidavit, any misrepresentation regarding the consideration is indeed material to the proper assessment of tax. The materiality of a misrepresentation of one’s authority to act on behalf of a purported principal, inasmuch as it has the effect of potentially casting the principal in liability for taxes assessed, cannot be doubted. Upon review, we find the prosecution’s evidence that defendant was not an attorney-in-fact for the Colony at the time he executed the affidavit, combined with evidence that defendant effected the transfer as a means of payment for services rendered to the Colony and for which he had not been paid, thus indicating that the transfer was for consideration in excess of the $1 recited in the affidavit, satisfies both the legal sufficiency and weight of the evidence challenges.

Id. at 375. (emphasis added)

Courts have often said that false tax filing statutes are similar to perjury statutes. See e.g., United States v. Scholl, 166 F.3d 964, 980 (9th Cir. 1999) (describing §7206(1) as a perjury statute); Gaunt v. United States, 184 F.2d 284, 288 (1st Cir. 1950) (“purpose is to impose the penalties for perjury upon those who wilfully falsify their returns regardless of the tax consequences of the falsehood”); United States v. Taylor, 574 F.2d 232, 236 (5th Cir. 1978) (noting that to require the government to prove additional tax liability would “seriously jeopardize the effectiveness of section 7206(1) as a perjury statute and would imperil the self-assessment nature of our tax system”); United States v. Fawaz, 881 F.2d 259, 263 (6th Cir. 1989) (The court saw no reason to frame a different rule in the § 7206(1) context than the one applied under § 1623(a) false statement made to federal grand juries.)

The New York Criminal Jury Instruction for perjury also states that, “[d]epending on the facts of the case, it may be appropriate to adapt the language of materiality utilized by the Court of Appeals in the context of a Grand Jury proceeding; namely, that a false statement is material if it has ‘the natural effect or tendency to impede, influence or dissuade’ the public servant in the performance of his or her official functions in an action, proceeding or matter involved. People v. Davis, 53 N.Y.2d 164, 171 (1981).” (hyperlink added). This language reflects the federal position on false statement statutes, including § 7206.

Third Key Issue: Intent (Willfulness). When it comes to intent, potential criminal liability under New York State tax law is broader than federal tax law.

N.Y. Tax Law defines willfulness as “acting with either intent to defraud, intent to evade the payment of taxes or intent to avoid a requirement of [New York Tax Law], a lawful requirement of the [tax] commissioner or a known legal duty.” Section 1801(c).

Under federal law, willfulness refers to a voluntary, intentional violation of a known legal duty, including the duty to report accurate information on a tax return or other tax related documents. This means that an individual or entity must have acted with a specific intent to provide false or misleading information on their tax documents, and knew or should have known that their conduct was generally unlawful. See e.g., Cheek v. United States, 498 U.S. 192 (1991); United States v. Pomponio, 429 U.S. 10 (1976); United States v. Bishop, 412 U.S. at 412 U. S. 360. Knowledge of the specific statute is not required, so long as the individual knows the information submitted was false.

Willfulness is a question of fact. Direct proof of intent is not necessary, and instead can be inferred from a broad range conduct and evidence (including circumstantial) relating to attempts to conceal or misrepresent income, assets and other material tax matters. United States v. Libous, 645 F. App’x 78, 81 (2d Cir. 2016). The government will often seek to prove willful intent with reference to “affirmative acts” and “acts of commission.” See e.g., United States v. Smith, 206 F.2d 905 (3d Cir. 1953) (discussing U.S. Supreme Court authorities); Maxfield v. United States, 152 F.2d 593 (9th Cir. 1945); Battjes v. United States, 172 F.2d 1, 5 (6th Cir. 1949) (“Direct proof of willful intent is not necessary. It may be inferred from the acts of the parties, and such inference may arise from a combination of acts, although each act standing by itself may seem unimportant. It is a question of fact to be determined from all the circumstances.”); Katz v United States, 321 F.2d 7, 10 (1st Cir. 1993).

Potential Other Offenses

1. Additional Applicable Federal Statute: Conspiracy to Defraud the United States (18 U.S.C. 371)

As noted earlier, a wide variety of other tax-related statutes may be applicable depending on how the facts develop. One example is Conspiracy to Defraud the United States (18 U.S.C. 371).

That statute makes it a crime for two or more people to “conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy.”

The statute can be violated in two ways: (1) conspiring to commit other federal offenses; and (2) conspiring to “defraud the United States.” The two offenses can overlap in circumstances where the purpose of the conspiracy to defraud the United States involved conduct that violated federal criminal law. See e.g., United States v. Helmsley, 941 F.2d 71, 90 (2d Cir. 1991) (citing United States v. Rosenblatt, 554 F.2d 36, 40 (2d Cir. 1977).

The statute is regularly used to prosecute a broad array of criminal conspiracies to defraud the government. The case law is clear—to “defraud” the government does not require any financial or pecuniary loss. Instead, interfering with, impairing, or obstructing one of the government’s functions by deceit or dishonesty is enough. See e.g., Hass v. Henkel, 216 U.S. 462 (1910); Hammerschmidt v. United States, 265 U.S. 182 (1924); Tanner v. United States, 483 U.S. 107 (1987); United States v. Del Toro, 513 F.2d 656 (2d Cir.), cert. denied, 423 U.S. 826 (1975); United States v. Coplan 703 F. 3d 46 (2d Cir. 2012); United States v. Jacobs, 475 F.2d 270 (2d Cir.); United States v. Sprecher, 783 F. Supp. 133, 156 (S.D.N.Y. 1992), modified on other grounds, 988 F.2d 318 (2d Cir. 1993).

The statute has often been used to prosecute those who make false statements to federal tax authorities. See, e.g., United States v. Helmsley, 941 F.2d 71, 93 (2d Cir. 1991) (mischaracterization of deductions was prosecuted under §§ 371, 7206, 7201 (evasion)); United States v. Goldberg, 105 F.3d 770, 772 (1st Cir. 1997) (convicted of §§ 371 and 7206(1) for a scheme to conceal payments to individuals through use of “straw employees” and benefits to third parties); Coplan, 703 F. 3d 46, (conspiracy to deceive IRS about the purpose of transactions engineered to generate tax losses). A conspiracy to defraud the IRS charged under § 371’s defraud clause is commonly referred to as a “Klein conspiracy” after a Second Circuit decision where the defendants were convicted of conspiring to defraud the United States by impeding and obstructing the Treasury Department in collection of income taxes. United States v. Klein, 247 F.2d 908, 915 (2d Cir. 1957).

To succeed in prosecuting conspiracies to defraud the United States, the government must prove: (1) there was an illegal agreement between at least two people; (2) that the defendant voluntarily entered; (3) with specific, willful intent to achieve the objective of the conspiracy; and (4) an overt act occurred in pursuance of the objective. See e.g., United States v. Pinckney, 85 F.3d 4 (2d Cir. 1996); United States v. Nall, 949 F.2d 301, 305 (10th Cir. 1991).

Here, the conspiracy might consist of (1) an agreement between Trump and Cohen or Allen Weisselberg; (2) that Trump voluntarily entered; (3) with the specific, willful intent to defraud the IRS by mischaracterizing the reimbursement of the hush money payment as legal fees, resulting in it being reported as income; and (4) proof of overt acts by Trump such as his personal signature on a number of the checks issued to Cohen.

2. Additional Applicable State Statute: New York Filing a False Instrument (N.Y. Penal Law, § 175.30; N.Y. Penal Law, § 175.35).

Just as on the federal side, a wide variety of other statutes may be applicable depending on how the facts develop. One example is Offering a False instrument for Filing, either in the Second Degree (N.Y. Penal Law, § 175.30) or First Degree (N.Y. Penal Law, § 175.35).

“The elements of offering a false instrument for filing in the second degree are (1) knowledge that the written instrument contains a false statement or false information, and (2) offering or presenting such an instrument to a public office or public servant (3) with the knowledge or belief that it will become a permanent record of the public office to which it was submitted. To make out offering a false instrument for filing in the first degree, the People are also required to prove (4) the defendant’s intent to defraud the state, one of its political subdivisions, a public authority or public benefit corporation.” § 17:10. Offering a false instrument for filing—Elements of offense, 6 N.Y. Prac., Criminal Law § 17:10 (4th ed.).

The statute has been used many times to successfully prosecute those who file false tax returns or related documents. See e.g., People v. Lacay, 115 A.D.2d 450, 496 N.Y.S.2d 337 (N.Y. App. Div., 1st Dept. 1985) (Prosecutors had discretion to prosecute the defendant’s filing of false sales tax returns under broader statute of offering false instrument for filing, rather than N.Y. Tax Law § 1145(b), which provides for criminal penalties for filing false sales and use tax returns.); People v. DeRue, 179 A.D.2d 1027, 579 N.Y.S.2d 799 (N.Y. App. Div., 4th Dept. 1992) (Invoices were capable of being used to defendant’s advantage, to avoid paying sales tax, to show tax exemption or that sales tax ​​has been paid, thus “written instruments” for the purposes of the statute.). See also, 6 N.Y. Prac., Criminal Law § 17:12 (4th ed.), § 17:12. Offering a false instrument for filing—Tax returns as “written instruments” under false filing statute.

Conclusion

We have argued that DA Bragg has strengthened his case against Trump by bumping up the charges to a felony based on Trump’s intent to commit (or aid or conceal) crimes involving false statements to tax authorities. Whatever the effectiveness of such a bump-up based on the alleged primary campaign finance violations, pursuing an approach based upon state tax violations is wise and well grounded. The strongest case involves statements to tax authorities falsely characterizing the payments to Michael Cohen as “legal fees,” rather than their true nature (reimbursements for a hush money payment). A strong case could also involve other variations on state criminal tax violations, as well as possible federal ones. The DA has not precluded asserting additional tax or other bases for the bump up. His response to the defendant’s request for a bill of particulars notably includes (but is not limited to) a set of specified offenses. We hope the additional analysis we have offered here is useful to the press, the public and all other stakeholders in understanding the strength of the DA’s position.

Photo credit: Manhattan District Attorney Alvin Bragg speaks during a press conference to discuss his indictment of former President Donald Trump, outside the Manhattan Federal Court in New York, April 4, 2023 (Angela Weiss/AFP via Getty Images)

The post The Untold Strength of Tax Crimes in Manhattan DA’s Case Against Former President Trump appeared first on Just Security.

A curated weekday guide to major national security news and developments over the past 24 hours. Here’s today’s news.

RUSSIA-UKRAINE DEVELOPMENTS

Ukraine’s military released drone footage this weekend that appeared to show the city of Bakhmut being attacked by Russian phosphorus munitions, the use of which in civilian areas is considered a war crime. It is unclear when the attack took place, but a post on Twitter by Ukraine’s defense ministry showed high-rise buildings engulfed in flames, and accused Russia of using “incendiary ammunition,” a type of ammunition containing chemicals that, upon impact with obstacles, causes blazes to ignite and rapidly spread. Other videos posted to social media showed the ground on fire and plumes of smoke. BBC analysis located the military’s footage to an area just west of Bakhmut’s city center and close to a children’s hospital. “While the analysis confirmed the attack used some kind of incendiary munitions, it could not verify the use of phosphorus,” BBC reports.

Russia carried out drone, missile, and air strikes on the Ukrainian capital of Kyiv and other cities through the night. Ukraine said its air defenses destroyed all 35 Iranian-made Shahed drones launched by Russia. Sixteen rockets hit the Kharkiv, Kherson, Mykolaiv, and Odessa regions in the last 24 hours, as well as 61 strikes and 52 rocket salvos on Ukrainian positions and populated areas. Reuters reports. 

Yevgeny Prigozhin, leader of the Russian paramilitary Wagner Group, has signaled plans to cancel his announced withdrawal from Bakhmut after receiving promises of extra ammunition. On Friday, Prigozhin announced in a post on Telegram that his group was withdrawing from the region after his men had been starved and suffered “useless and unjustified” losses as a result. However, in an audio message posted on Telegram on Sunday, Prigozhin said: “Overnight we received a combat order, for the first time in all this time. We have been promised as much ammunition and weapons as we need to continue further operations. We have been promised that everything needed to prevent the enemy from cutting us off [from supplies] will be deployed on the flank.” Reuters reports. 

On Saturday, International Atomic Energy Agency Director General Rafael Grossi voiced growing concerns about the safety of Ukraine’s Zaporizhzhia Nuclear Power Plant, now under control by Russian forces in the occupied city of Enerhodar. Grossi warned the situation was “becoming increasingly unpredictable and potentially dangerous.” Due to the war, none of the plant’s six reactors are active, but the station nonetheless needs a reliable power supply for cooling systems critical to “preventing a potentially catastrophic radiation disaster.” Grossi’s comments came a day before Ukrainian authorities “said that a 72-year-old woman was killed and three others were wounded when Russian forces fired more than 30 shells at the city of Nikopol, which is almost directly opposite the plant,” David Rising reports for AP.

Turkey has rejected a U.S. proposal to send its Russian-made S-400 defense system to Ukraine, Turkish media reported Sunday. Yahoo News reports.

DOMESTIC DEVELOPMENTS

Criminal immunity deals have been accepted by at least eight of the Republican “false electors” in Georgia alleged to have conspired with former President Donald Trump in 2020 to overturn the election result in the state, according to a court filing Friday by Kimberly Debrow, the lawyer representing the eight electors offered deals. Those familiar with the investigation said that at least one additional elector, not represented by Debrow, also has a deal in place. Debrow’s filing also revealed that two of her clients were not offered deals and so now had new representation. Danny Hakim reports for the New York Times.

On Friday, a January 6th Capitol rioter who attacked police officers with a chair and then chemical spray received the longest sentence so far in connection to the insurrection. Peter Schwartz was sentenced to 14 years and two months in prison followed by three years’ supervised release after being convicted in December of assault and other felony charges. The sentence surpassed the 10-year sentence of retired New York Police Department officer Thomas Webster in September for swinging a metal flagpole at an officer at the Capitol, although the Justice Department had sought 24 years and six months in prison for Schwartz. In a separate case on Friday, prosecutors recommended in a sentencing brief 25 years’ imprisonment for Stewart Rhodes, leader of the Oath Keepers, who was convicted in November of seditious conspiracy along with one of his lieutenants. Alan Feuer and Zach Montague report for the New York Times. 

Fox News lawyers on Friday asked Dominion Voting Systems officials to conduct an internal investigation into leaked text messages from ousted Fox host Tucker Carlson that formed the basis of evidence in the recent defamation lawsuit between Dominion and Fox. “The requests, which were made in letters released by Fox, came after multiple news outlets published racist and sexist remarks by Carlson contained in leaked internal messages and recordings,” Reuters reports.

Carlson has told those close to him that he wants to return to television somewhere soon, but he must firstly negotiate an early end to his contract expiring in January 2025. Lawyers for Carlson “have been in touch with Fox to negotiate an agreement to set the terms of his departure. And he has been the subject of unofficial courting by right-wing media outlets who’ve let it be known they would hire him if they could. Jeremy W. Peters and Benjamin Mullin report for the New York Times. 

Jack Teixeira, the Air National Guardsman recently charged with leaking classified documents, was obsessed with weapons, mass shootings, and debunked conspiracy theories, and set on “proving he was in the right, and in the know,” a review by the New York Times of over 9,500 of his messages reveal, filling in important gaps lefts by court filings. “Even as he relished the respectability and access to intelligence he gained through his military service and top secret clearance, he seethed with contempt about the government, accusing the United States of a host of secret, nefarious activities: making biological and chemical weapons in Ukrainian labs, creating the Islamic State, even orchestrating mass shootings…He seems to have seen himself, in a sense, as the author of an insider newsletter founded to educate his online friends — not a whistle-blower plotting a grand exposé of government secrets,” Aric Toler, Robin Stein, Glenn Thrush, Riley Mellen and Ishaan Jhaveri report for the New York Times. 

Mauricio Garcia, the gunman who killed at least eight people at an outlet mall in Dallas, Texas, may have had white supremacist or neo-Nazi beliefs. People familiar with the investigation said a tattoo on his chest said “RWDS,” an acronym thought to stand for Right Wing Death Squad that is popular among right wing extremists, neo-Nazis and white supremacists. “In addition to the weapons found on his body, investigators found another five guns inside his car nearby,” Jack Douglas, Marisa Iati, Brittany Shammas, Devlin Barrett, Justin Wm. Moyer, Molly Hennessy-Fiske and Perry Stein report for the Washington Post. 

A preliminary review of Garcia’s social media accounts reveals “hundreds of posts that include racially or ethnically motivated violent extremist rhetoric, including neo-Nazi material and material espousing white supremacy,” Deon J. Hampton, Jonathan Dienst, Ken Dilanian and Corky Siemaszko report for NBC News.

At least eight people were killed after a man drove into a crowd of migrants in Brownsville, Texas, on Sunday. Seven individuals died on the scene and at least 10 others were injured after a Range Rover plowed into a group standing outside a center that serves homeless people. The driver, whose name has not yet been released, was charged with reckless driving. It remains unclear whether the driver’s actions were deliberate or an accident. Edgar Sandoval and Verónica G. Cárdenas report for the New York Times. 

Georgia Gov. Brian Kemp signed a bill on Friday that would create the Prosecuting Attorneys Qualifications Commission, an eight-member commission empowered to discipline and remove district attorneys and solicitors general. The Commission, which would start accepting complaints from October, plans to focus on “willful misconduct in office” or “willful and persistent failure to carry out statutory duties,” according to an Office of Governor press release. Fulton County DA Willis “has been one of the most outspoken opponents of the legislation, suggesting she is among those being targeted by its Republican sponsors,” John Wagner and Matthew Brown report for the Washington Post. 

The Foreign Affairs Committee has threatened Sec. of State Antony Blinken with contempt of Congress if he does not comply with a March subpoena to release a classified “dissent channel” cable on the August 2021 U.S. withdrawal from Afghanistan. The letter, sent by committee chair Michael McCaul (T-RX), gave the State Department until May 11 to comply or assert a legal basis to withhold the documents. Reuters reporting.

Former President Donald Trump missed a deadline yesterday to inform the judge in the E. Jean Carroll civil battery and defamation lawsuit whether he intended to testify before the case ends. Trump’s attorney Joseph Tacopina said in a statement that the court was told on Thursday that Trump would not testify, with the trial now set to end today after closing arguments. Reuters reports. 

Trump’s 48-minute videotaped deposition in the Carroll lawsuit was released Friday. Parts of the edited deposition, recorded in October, were played for jurors earlier last week, and a transcript of the deposition was revealed in December in court filings—but the footage, requested by two journalists, had not been released publicly before Friday. Zach Schonfeld reports for The Hill.

SUDAN DEVELOPMENTS

Amid continuing clashes in the Sudanese capital of Khartoum, the first face-to-face “pre-negotiation talks” between the Sudanese army and the paramilitary Rapid Support Forces took place on Saturday in Saudi Arabia. “Both sides have said they will discuss a humanitarian truce but not an end to the conflict. There has been no word so far about whether the meeting has taken place or who the representatives from both sides are,” BBC reports. 

Turkey will move its embassy from Sudan’s capital to Port Sudan, on the recommendation of the transitional government and Sudan army, after the Turkish ambassador’s car was hit by gunfire, Turkey’s foreign minister, Mevlut Cavusoglu, told reporters in Antalya on Saturday. “No casualties were reported and the source of the gunfire that hit Ismail Cobanoglu’s vehicle was unclear, said Turkish diplomatic sources quoted by Anadolu Agancy,” Al Jazeera reports.

IRAN DEVELOPMENTS

Iran on Saturday executed Swedish-Iranian dissident Habib Farajollah Chaab the alleged leader of the separatist group, the Arab Struggle Movement for the Liberation of Ahwaz. In the sentencing, Tehran accused Chaab of “numerous bombings and terrorist operations,” including a 2018 attack on a military parade that killed dozens. The execution has been criticized by Sweden and human rights groups. Jon Gambrell reports for AP.

Two oil tankers recently seized by Iran’s paramilitary Islamic Revolutionary Guard Corps were spotted on Saturday anchored south of Bandar Abbas near a naval base in the port city in Iran’s Hormozgan province, according to satellite photos from Planet Labs PBC analyzed by The Associated Press. The first tanker, Marshall Islands-flagged Advantage Sweet, was seized on April 27 as it traveled through the Gulf of Oman carrying Kuwaiti crude oil for American energy firm Chevron Corp. of San Ramon, California. The second ship, Panama-flagged tanker the Niovi, was seized on Wednesday leaving a dry dock in Dubai, UAE, bound for Fujairah on the UAE’s eastern coast. Jon Gambrell reports for AP.

OTHER GLOBAL DEVELOPMENTS

The United States and China acknowledged the need to stabilize Sino-U.S. relations after a series of “erroneous words and deeds” deepened tensions. China’s Foreign Minister Qin Gang Beijing met with U.S. ambassador Nicholas Burns in Beijing, where Qin reportedly “stressed in particular that the United States must correct its handling of the Taiwan issue and stop the hollowing out of the ‘one China’ principle,” Reuters reports. 

The leaders of South Korea and Japan on Sunday agreed to deepen efforts to address security challenges from North Korea and China. Japanese Prime Minister Fumio Kishida met with his South Korean counterpart, President Yoon Suk Yeol, in Seoul. The two leaders emphasized the growing nuclear and missile threat from North Korea and the deepening rivalry between the United States and China. Kishida’s two-day trip follows on the heels of Yoon’s trip to Tokyo in March. The shuttle diplomacy is a welcome sign for Washington after regular exchanges between Tokyo and Seoul ended in 2011 over historical differences. Choe Sang-Hun and Motoko Rich report for the New York Times.

Arab League member states have agreed to reinstate Syria’s membership after over twelve years of suspension. The vote was cast on Sunday in Cairo, Egypt, during an emergency meeting of Arab League foreign ministers in Cairo, Egypt. Arab League Secretary-General Ahmed Aboul Gheit said on Sunday that Syria President Bashar al-Assad was permitted to attend the Arab League summit in Saudi Arabia on May 19 “if he wishes to.” Al Jazeera reports. 

On Sunday, a criminal court in Baghdad sentenced Iraqi police officer, Ahmed Hamdawi al-Kinani to death for his alleged role in the July 2020 killing of prominent Iraqi academic and security analyst Hisham al-Hashimi, according to a statement from Iraq’s Supreme Judicial Council. After Sunday’s ruling, the case will be referred to the Court of Cassation, which is a judicial body that considers the ruling. Qassim Abdul-Zahra and Yasmine Mosimann report for the Independent. 

The post Early Edition: May 8, 2023 appeared first on Just Security.

A curated weekday guide to major national security news and developments over the weekend.

RUSSIA-UKRAINE DEVELOPMENTS 

In its second major airstrike in three days, Russia fired missiles at targets across Ukraine, hitting a railway hub in eastern Ukraine. The Russian strikes set a huge blaze in a southeastern district, Pavlohrad, a railway hub behind the southern and eastern fronts, where officials reported on Monday that 34 people were wounded, including children, and dozens of homes damaged. Ukraine officials said that 15 of 18 Russian cruise missiles were shot down, shielding the capital, Kyiv, and other major cities. The strikes follow 23 civilian deaths three days ago, where a Russian missile hit a high-rise apartment building in Uman, central Ukraine. “Ukrainian officials also released images of a scorched wasteland, and said an industrial enterprise was hit, which they did not identify. Mykola Lukashuk, head of the Dnipropetrovsk region council, said the attack had damaged 19 apartment blocks, 25 houses, three schools, three kindergartens and several shops,” Reuters reports.

A Crimean oil depot erupted in fire after it was hit by two Ukrainian drones. Mikhail Razvozhayev, the Kremlin-installed governor of the Crimean port city Sevastopol, posted footage of the blaze on his Telegram channel. He said the fire caused no casualties and would not reduce the supply of fuel for Sevastopol. Ukraine did not openly claim responsibility, but emphasized its right to strike any target in response to aggression by Russia, which has controlled Crimea since its 2014 invasion of Ukraine. David Rising reports for AP. 

As Russia toughens penalties for men avoiding military service, more than 1,000 face criminal charges for offenses such as abandoning their units, and more than 1,100 have been convicted of evading military service. Penalties are harsh, such as 3 to 10 years for refusing an order to participate in combat, or sentences of years in a penal colony for trying to escape conscription. Neil MacFarquhar reports for the New York Times.

Pope Francis met with European leaders during a three-day visit to Budapest as part of a “mission” to end the war between Russia and Ukraine. Francis said he discussed the situation with Hungarian Prime Minister Viktor Orban, who has been on the outs with European Union leaders in Brussels and opposed military aid to Ukraine, and with Metropolitan Hilarion, a representative of the Russian Orthodox Church in Budapest. Before his trip, the Pope met with Ukrainian Prime Minister Denys Shmyhal to discuss a “peace formula.” Jason Horowitz reports for the New York Times. 

DOMESTIC DEVELOPMENTS 

JPMorgan Chase & Co is set to buy “the substantial majority of assets” of First Republic Bank and assume all of the lender’s deposits, insured and uninsured, in a deal arranged by the U.S. Federal Deposit Insurance Corporation, the independent government agency that insures deposits for bank customers. “The banking giant will take $173 billion of loans and about $30 billion of securities of First Republic Bank including $92 billion of deposits, JPMorgan said in a statement. It is not assuming the bank’s corporate debt or preferred stock,” Reuters reports. 

Former President Trump has asked the judge in the E. Jean Carroll defamation and battery case to declare a mistrial, arguing in a letter filed early this morning that the judge, Judge Lewis Kaplan, had made “pervasive unfair and prejudicial rulings” against Trump. Alternatively, said Trump attorney Joe Tacopina, lawyers would ask Judge Kaplan to “correct the record for each and every instance in which the Court has mischaracterized the facts of this case to the jury” or offer Tacopina greater leeway in cross examining Carroll. “Here, despite the fact trial testimony has been underway for only two days, the proceedings are already replete with numerous explanations of Defendant’s unfair treatment by the Court, most of which has been witnessed by the Jury,” the letter read. “Among the issues raised by Tacopina are the judge’s ruling restricting Tacopina from asking Carroll additional questions about any efforts Carroll made to try to obtain security camera footage from the department store, ‘expressing a corroborative view’ that there was no one on the sixth floor of the department store at the time of the alleged assault, and calling certain lines of the defense attorney’s questioning ‘argumentative’ in front of the jury,” Kara Scannell reports for CNN. 

Local and federal authorities were using tracking dogs and cell phone signals in a widening manhunt for Francisco Oropeza, who allegedly fatally shot five people in Cleveland, Texas. Officers found his cell phone abandoned and believe Oropeza is no longer in the area. Before the shooting, neighbors had asked Oropeza to stop firing a rifle in his yard because a baby was trying to sleep. Raja Razek, Andy Rose, and Ray Sanchez report for CNN. 

The FBI issued a statement Sunday night saying Oropeza was considered armed and dangerous and should not be approached by members of the public. Authorities were widening their search to as far as 20 miles from the location of the shooting. Andrea Blanco reports for The Independent, via Yahoo News.

The U.S. Army released the names of three soldiers killed in a mid-air collision between two military helicopters over Alaska. “The battalion is devastated and mourning the loss of three of our best,” said Lt. Col. Matthew C. Carlsen, commander of Alaska-based 1st Attack Battalion, 25th Aviation. The cause of the collision is under investigation by a team from the Alabama-based U.S. Army Combat Readiness Center. Dennis Romero reports for NBC. 

The Justice Department is investigating whether former President Donald Trump and his allies raised more than $250 million to press his allegations of election fraud in 2020 that they knew to be false. “The Justice Department, with its ability to bring criminal charges, has been able to prompt more extensive cooperation from a number of witnesses. And prosecutors have developed more information than the House committee did.” Maggie Haberman, Alan Feuer, and Jonathan Swan report for the New York Times.

Historic snowmelts in California are raising flooding risks. As temperatures warm after record snowfall in the Sierra Nevada, parts of California’s Central Valley – which includes Sacramanto and Fresno – face the risk of damaging floods. More than 500 inches of snow fell in some areas during a historic winter season. Evan Bush, Jiachuan Wu, and Kathryn Prociv report for NBC News. 

Regulators on the California Air Resources Board approved a ban on the sale of new big rigs and buses running on diesel by 2036, and new carbon dioxide-emitting trucks by 2045. “This rule provides manufacturers, truck owners and fueling providers the assurance that there will be a market and the demand for zero-emissions vehicles, while providing a flexible path to making the transition toward clean air,” said Liane Randolph, chair of the board. California now awaits a waiver from the Environmental Protection Agency to legally enforce the rule. Neelam Bohra and Coral Davenport report for the New York Times. 

U.S. RELATIONS

The United States has facilitated the departure of almost 1,000 American citizens from Sudan, as a second convoy from Khartoum arrived at Port Sudan.  The convoy of eight buses on Sunday followed another the previous day of 18 buses carrying several hundred American evacuees. “The death toll from the crisis in Sudan has climbed over 500, according to the World Health Organization, with thousands more wounded.” CBS News reports 

President Joe Biden meets with President Ferdinand Marcos Jr. of the Philippines at the White House on Monday. The talks are scheduled amid growing concerns over China’s increasingly aggressive actions in the South China Sea, including harassing Philippine navy and coast guard patrols. Biden and Marcos also are due to discuss new economic, education, and climate initiatives during the four-day visit, the first in more than a decade by a president of the Philippines. Aamer Madhani and Jim Gomez report for AP. 

The U.N. working group on arbitrary detention has called for the immediate release of Guantánamo “forever prisoner” Abu Zubaydah, saying his detention has no basis in law. The U.N. body’s decision, the first issued against the United States regarding Zubaydah’s detention, urged the U.S. government to close the facility and expressed “grave concern about the pattern that all” cases at Guantánamo follow and recalled that, “under certain circumstances, widespread or systematic imprisonment or other severe deprivation of liberty in violation of fundamental rules of international law may constitute crimes against humanity.” The opinion marks the first international decision against multiple states for their distinct contributions and “joint responsibility.” “Thailand, Poland, Morocco, Lithuania, Afghanistan and the United Kingdom played a role in the extraordinary rendition programme, whether through directly detaining persons subjected to it, or through knowingly assisting the implementation of the programme through transport access and the provision of locations for unregistered detention sites. These States are all jointly responsible for the arrest, rendition and arbitrary detention of Mr. Zubaydah,” the decision stated. Julian Borger reports for The Guardian. 

Newly released government photographs reveal key moments inside the White House during the 2011 raid on Osama bin Laden’s compound. Through Freedom of Information Act and Presidential Records Act requests, the Washington Post obtained more than 900 photos of the event, including images of former President Barack Obama watching the video feed of the raid and shaking hands with top officials. Nate Jones reports for the Washington Post. 

North Korea has criticized the recent U.S.-South Korea agreement to strengthen Seoul’s defenses and regularly deploy U.S. strategic assets to the region, warning  it would escalate tension to the “brink of a nuclear war.” State media KCNA reported on Monday that a summit held last week between President Joe Biden and South Korean President Yoon Suk Yeol, during which Biden promised to furnish Seoul with more insight into American nuclear planning over any conflict with North Korea, had put the peninsula in a “quagmire of instability.” A U.S. Navy nuclear-armed ballistic missile submarine will also visit South Korea for the first time since the 1980s. “KCNA said the agreement stipulated the allies’ willingness to take ‘the most hostile and aggressive action’ against North Korea, citing Choe Ju Hyon, whom it described as an international security analyst,” Reuters reports.

GLOBAL DEVELOPMENTS

Islamic State (IS) leader Abu Hussein al-Qurashi was killed in Syria by Turkish forces this weekend, Turkish President Tayyip Erdogan said Sunday. IS selected al-Qurashi as its leader in November after its previous leader was killed in an operation in southern Syria. “Syrian local and security sources said the raid took place in the northern Syrian town of Jandaris, which is controlled by Turkey-backed rebel groups…One resident said clashes started on the edge of Jandaris overnight from Saturday into Sunday, lasting for about an hour before residents heard a large explosion,” Reuters reports. 

Eight tons of medical aid from the International Committee of the Red Cross landed in Sudan on Sunday. While many foreign nationals have been evacuated and thousands of local families fled for the city of Shendi, those remaining in Khartoum face shortages of food, water, medicine, and electricity. Mitchell McCluskey, Eyad Kourdi, Heather Chen and journalists in Sudan report for CNN. 

Sudan’s health care system is facing the risk of total collapse. Health care services continue to deteriorate in the capital Khartoum, as fighting enters its third week. The Sudan Doctors’ Trade Union warned that the system could completely collapse within days. Lynsey Chutel reports for the New York Times. 

Russia vowed retaliation after Polish authorities seized the Russian Embassy School in Warsaw, asking employees to leave the campus premises. Russia’s Foreign Ministry described the action as “controversial, illegal and provocative,” while Polish Foreign Ministry spokesperson Lukasz Jasina said the property “belongs to the Polish state and was taken by Russia illegally.” The school will continue operating from a different part of the Russian embassy. Xiaofei Xu and Darya Tarasova report for CNN.

The post Early Edition: May 1, 2023 appeared first on Just Security.

As many greet the Manhattan District Attorney’s indictment of a former president as a step toward accountability and the equal application of the rule of law, that thesis will be tested by the strength of the case itself. It is accordingly proper, indeed necessary, to evaluate whether the criminal statute at issue is a close match for the alleged conduct in the case. In that regard, an important question is whether maintaining false business records to conceal hush money payments in a political campaign meets the “intent to defraud” element of the Falsifying Business Records statute, New York Penal Law § 175.05 and 175.10. 

As we explain in this essay, the law is firmly on the side of the DA, and we do not think this question will give the DA’s office or Justice Juan Merchan much pause. Indeed, the jurisdiction in which this case will be brought – the First Department of New York – has settled law on the issue that defines “intent to defraud” in broad terms that cover the allegations in the Trump case. The most important expression of a contrary view was issued by a lower court in a different jurisdiction and on a basis that is demonstrably flawed. 

We should note at the outset that some legal experts might assume “intent to defraud” has a narrow construction – limited to deprivation of money or property, or other pecuniary loss – given U.S. Supreme Court decisions to that effect in recent years. But that is a category mistake. The U.S. Supreme Court was interpreting federal fraud statutes, and this case is about New York courts interpreting New York state statutes. 

What’s more, the U.S. Supreme Court has not only expressly noted the distinction between the federal and state level, but also recognized states’ prerogative to fill in the gap. In a 2020 opinion, the Justices explained that due to their narrow construction of the federal criminal statutes, “federal fraud law leaves much public corruption to the States (or their electorates) to rectify.” Kelly v. United States, 140 S. Ct. 1565, 1571-73 (2020). 

So, how does New York State law define the “intent to defraud” for the criminal offense of falsifying business records? A long line of New York state court cases supports an expansive conception with respect to § 175.00 crimes – namely, that intent can be established when a defendant acts “for the purpose of frustrating the State’s power” to “faithfully carry out its own law.” People v. Kase, 76 A.D.2d 532, 537–538, 431 N.Y.S.2d 531, 534 (N.Y. App. Div., 1st Dept. 1980), aff’d, 53 N.Y.2d 989, 441 N.Y.S.2d 671, 424 N.E.2d 558 (1981). 

On this standard, the law does not require prosecutors to show “pecuniary or potential pecuniary loss” to the government or otherwise. Id. Indeed, New York Jurisprudence (Second Edition 2023) in a section titled, “Indictment or information charging falsification of business records,” states: “In an indictment for first degree falsification of business records, the grand jury presentation is not required to establish commercial or property loss.”

Applying this broad concept of “intent to defraud” in false business records cases, New York state courts have found such intent in a wide range of cases including when a defendant: made covert contributions to a political campaign, covered up an alleged rape, misled the relatives of a patient about the individual’s treatment, operated a motor vehicle without a license, obtained credit cards through false documents but with no proof of intention to miss payments, frustrated the regulatory authorities of the New York City Transit Authority, and much more. We detail all these judicial opinions below. 

If as expected the DA charges former President Donald Trump with falsifying business records to conceal hush money payments as campaign finance or election law violations, that will fit the test, with government authorities being frustrated in their ability to regulate elections. Nor is the harm limited to them. 

Falsifying hush money payments as legal services frustrated New York State authorities’ more broadly. New York firms are required to “keep correct and complete books and records of account” for the purposes of state regulators and tax authorities, N.Y. Bus. Corp. Law § 624 (McKinney). Indeed, New York Tax Law allows for tax commissioners “to examine or to cause to have examined…any books, papers, records or memoranda” of a corporation “bearing upon the matters to be required in the return.” N.Y. Tax Law § 1096(b)(1) (McKinney). Thus any book or record kept by a private corporation is subject to public exposure, and New York law requires these books to be accurate. 

In short, the Manhattan DA’s case rests on firm legal footing.

I. “Intent to Defraud”

“Intent to defraud” is an element of both the misdemeanor (second degree) and felony (first degree) violations of Falsifying Business Records in New York. 

Under New York Penal Law § 175.05 (the misdemeanor offense), 

“A person is guilty of falsifying business records in the second degree when, with intent to defraud, he: 

1. 1. Makes or causes a false entry in the business records of an enterprise; or 

1. 2. Alters, erases, obliterates, deletes, removes or destroys a true entry in the business records of an enterprise; or

1. 3. Omits to make a true entry in the business records of an enterprise in violation of a duty to do so which he knows to be imposed upon him by law or by the nature of his position; or

1. 4. Prevents the making of a true entry or causes the omission thereof in the business records of an enterprise.

New York Penal Law § 175.10 (the felony offense), adds to the language of an “intent to defraud” the following requirement:

A person is guilty of falsifying business records in the first degree when he commits the crime of falsifying business records in the second degree, and when his intent to defraud includes an intent to commit another crime or to aid or conceal the commission thereof.

As noted by McKinney’s Penal Law §175.05, “there is no Penal Law definition of ‘intent to defraud.’” Instead, McKinney’s refers to McKinney’s Penal Law § 15.00 for further practice commentary on “intent to defraud,” which, in so far is relevant, states:

Although a significant number of penal statutes require an “intent to defraud,” there is no Penal Law definition of that culpable mental state. It has been suggested that an intent to defraud should be “for the purpose of leading another into error or to disadvantage.” People v. Briggins, 50 N.Y.2d 302, 309, 428 N.Y.S.2d 909, 406 N.E.2d 766 (1980) (concurring opinion) (Jones, J.). See also Black’s Law Dictionary (6th ed. 1990) (“Intent to defraud means an intention to deceive another person, and to induce such other person, in reliance upon such deception, to assume, create, transfer, alter or terminate a right, obligation or power …”); Carpenter v. United States, 484 U.S. 19, 27, 108 S.Ct. 316, 321, 98 L.Ed.2d 275 (1987) (finding that the words “to defraud” meant “wronging one in his property rights by dishonest methods or schemes, and usually signifying the deprivation of something of value by trick, deceit, chicane or overreacting”).

While an “intent to defraud” is often directed at gaining property or a pecuniary benefit, it need not be so limited. See People v. Kase, 53 N.Y.2d 989, 441 N.Y.S.2d 671, 424 N.E.2d 558 (1981), affirming for reasons stated at 76 A.D.2d 532. In Kase, a prosecution for the filing of a false instrument, an intent to defraud was found where a person intentionally filed a false statement with a public office for the purpose of frustrating the State’s power to fulfill its responsibility to faithfully carry out its own law.

(emphasis added; unless otherwise indicated, bolded text throughout this essay signifies the same). 

Absent a definition of “intent to defraud” in the New York penal code, case law has developed to define its parameters.

II. The Case Law

The First Department decision in Kase established the broad conception of “intent to defraud” – that it does not require an intent to deprive another person of money, property rights or a pecuniary interest – in a matter concerning the crime of Offering a False Instrument for Filing in the First Degree (§ 175.35). The defendant was charged with filing a false statement in an application for a liquor license. According to the court, an intent to “frustrat[e] the State’s power to fulfill [its obligation to carry out the law] violates the statute.” 76 A.D.2d at 537–538, 431 N.Y.S.2d at 534. The decision was affirmed by the highest New York court, the New York Court of Appeals.

There is no need to guess how Justice Merchan would rule as to whether that standard applies in the falsification of business records statutes. The First Department has long said the Kase test applies to §§ 175.05 and 175.10, most recently in 2018 in People v. Sosa-Campana, 167 A.D.3d 464, 89 N.Y.S.3d 75, (N.Y. App. Div., 1st Dept. 2018), leave to appeal denied, 2019 N.Y. Slip Op. 97967, 33 N.Y.3d 981, 101 N.Y.S.3d 257, 124 N.E.3d 746 (N.Y. 2019); see also Morgenthau v. Khalil, 73 A.D.3d 509, 902 N.Y.S.2d 501 (N.Y. App. Div., 1st Dept. 2010). 

In Sosa-Campana, the First Department reaffirmed that “intent to defraud” under §175.05-10 is much broader than deprivation of money or property — or indeed causing any financial harm. The defendant in the case had provided a fraudulent driver’s license, in the name of another real person, when stopped for a traffic violation. His intent was to deceive the state authorities to escape government sanctions. He was charged with falsifying business records in the first and second degree, identity theft in the second degree, and aggravated unlicensed operation of a motor vehicle in the third degree. The court found: 

The evidence was legally sufficient to establish the element of intent to defraud, as required for the convictions of identity theft and falsifying business records. When defendant was stopped for a traffic violation and presented a fraudulent driver’s license in the name of another actual person, defendant acted with at least two forms of fraudulent intent, each falling within the plain meaning of “defraud.” Defendant intended to escape responsibility for the violation by causing the officer to issue a summons to the wrong person, and also intended to conceal his additional offense of unlicensed driving. In order to prove intent to defraud, the People did not need to make a showing of an intent to cause financial harm (see People v. Kase, 76 A.D.2d 532, 537–38, 431 N.Y.S.2d 531 [1st Dept. 1980] (construing intent-to-defraud element of analogous statute), affd 53 N.Y.2d 989, 991, 441 N.Y.S.2d 671, 424 N.E.2d 558[1981]; see also Morgenthau v. Khalil, 73 A.D.3d 509, 510, 902 N.Y.S.2d 501 [1st Dept. 2010]).

The First Department in another decision, People v. Reyes, demonstrated that an intent to conceal a crime could be a sufficient basis to establish the requisite “generalized ‘intent to defraud.’” Reyes involved a corrections officer charged with first- and second-degree falsifying business records, both based on the same conduct. The court held that, given the “exclusive theory” of prosecutors that the defendant had “falsely indicated in the logbook that he was off-post during the inmates’ mealtime, in order to hide the fact that he had raped the complainant during that time frame,” 

[T]here would be no way for the jury to acquit defendant of first-degree falsifying business records—entailing a rejection of an intent to conceal a rape—but still convict him of the second-degree count. The People simply did not afford the jury any basis, other than intent to conceal the alleged rape, to support any finding of the generalized “intent to defraud.” 

Under the facts, either defendant’s intent was to conceal the alleged rape, or he had no fraudulent intent at all. As such, only the higher count of first-degree falsifying business records should have been submitted to the jury. 

69 A.D.3d 537, 538–539, 894 N.Y.S.2d 43, 44–45 (N.Y. App. Div., 1st Dept. 2010). 

In a similar case also decided by the First Department, a nurse was charged with falsifying business records by omitting information in her nursing notes recording mistreatment which preceded the death of her patient. People v. Coe, 131 Misc.2d 807, 812, 501 N.Y.S.2d 997 (N.Y. Sup. Ct. 1986). The court explained that the target of the intent to defraud need not be the geriatric center, but “might just as well have been [the patient’s] relatives, defendant’s supervisors or others. Intent to defraud anyone is sufficient.” The opinion was affirmed on appeal, with the the Court of Appeals simply stating that the “remaining contention pertaining to her conviction for falsifying business records (see, Penal Law § 175.05) is without merit.” 126 A.D.2d 436, 510 N.Y.S.2d 470 (N.Y. App. Div., 1st Dept. 1987), aff’d, 71 N.Y.2d 852, 522 N.E.2d 1039 (1988).

The 2010 First Department decision in Morgenthau v. Khalil, 73 A.D.3d at 510, 902 N.Y.S.2d at 502, is also consistent with this line of cases. In that instance, the defendant challenged a civil forfeiture action in an underlying criminal action arising out of an illegal check scheme, arguing that the prosecutors could not prove there was a substantial likelihood of securing a conviction for falsifying business records in the first degree because the indictment did not allege the intent to defraud a particular person or business entity out of money, property, or pecuniary value. The First Department rejected the defendant’s claim. Citing Ramirez (from the Fourth Department) and Elliassen (a lower court in the Second Department), the court in Morgenthau v. Khalil ruled:

Defendant argues that because the underlying indictment does not allege, and the People cannot prove, that he acted with intent to defraud a particular person or business entity—as opposed to the government or the public at large—out of money, property, or something of pecuniary value, plaintiff fails to demonstrate the requisite substantial likelihood of securing a conviction for falsifying business records in the first degree (see Morgenthau v. Citisource, Inc., 68 N.Y.2d 211, 222, 508 N.Y.S.2d 152, 500 N.E.2d 850 [1986] ). We do not view the meaning of “intent to defraud” in Penal Law § 175.10 to be so limited (see People v. Ramirez, 168 A.D.2d 908, 909, 565 N.Y.S.2d 659 [1990], lv. denied 77 N.Y.2d 965, 570 N.Y.S.2d 499, 573 N.E.2d 587 [1991]; People v. Elliassen, 20 Misc.3d 1143[A], 2008 N.Y. Slip Op. 51841[U], *2–3, 2008 WL 4193166 [2008]).

Morgenthau v. Khalil dismissed the argument that intent under §175.10 required either (1) a person or business as the intended victim, or (2) that the intent must be to defraud someone or something out of money or something else of pecuniary value. 

This understanding of the law – from Kase through to false business records jurisprudence – has also been adopted elsewhere throughout the state in cases arising under §§ 175.05 and 175.10. People v. Ramirez, 168 A.D.2d 908, 909, 565 N.Y.S.2d 659, 660 (N.Y. Sup. Ct., 4th Dept. 1990), leave to appeal denied, 77 N.Y.2d 965, 573 N.E.2d 587 (N.Y. Ct. App. 1991); People v. Schrag, 147 Misc.2d 517, 558 N.Y.S.2d 451 (Rockland County Ct. 1990); People v. Elliassen, 20 Misc.3d 1143(A), 873 N.Y.S.2d 236 (N.Y. Sup. Ct., Richmond County 2008); People v. Headley, 37 Misc. 3d 815, 951 N.Y.S.2d 317 (N.Y. Sup. Ct., Kings County 2012), opinion adhered to on reargument, 36 Misc. 3d 1240(A), 960 N.Y.S.2d 51 (N.Y. Sup. Ct., Kings County 2012). See also, McKinney’s on §175.05; N.Y. Penal Law § 15.00 (McKinney). 

The 1990 Fourth Department case of People v. Ramirez, for example, also approved the trial court’s jury direction on this definition of “intent to defraud.” The defendant allegedly used false information to apply for credit cards to purchase store merchandise. The court held that the defendant could not be prosecuted for petit larceny because there was no proof that she did not intend to pay. Despite there being no proof that the defendant caused or intended to cause any financial loss, the court upheld her conviction for falsifying business records. The Fourth Department held:

We reject defendant’s argument that the evidence was insufficient to convict her of the crimes of falsifying business records and issuing a false financial statement. Citing People v. Saporita (132 A.D.2d 713, 715, lv. denied 70 N.Y.2d 937), defendant contends that an element of those crimes, “intent to defraud”, requires that a person “be deprived of property or a thing of value or a right” and no person was deprived of property or a thing of value or right. In People v. Saporita (supra), the court charged a definition of “intent to defraud” which was not met by the evidence offered by the People. Here, however, the court, in its charge, gave a different definition of intent to defraud, which was met by the evidence produced. The evidence shows that defendant intended to defraud various store owners by applying for and obtaining credit cards in the name of another person when she could not get credit in her own name and that she intended to deceive those stores and induce them to extend credit to her, which, but for her misrepresentation, they would not have done. That evidence proved defendant’s “intent to defraud” as defined by the court’s charge. 

168 A.D.2d at 909, 565 N.Y.S.2d at 660 (NY. App. Div., 4th Dept. 1990). The defendant tried to appeal the Fourth Department decision, but leave to appeal was denied by the Court of Appeals.

In the 2008 decision People v Elliassen, the Richmond County Supreme Court (within the Second Department) held that the intent to defraud required no pecuniary loss, and that interference with the legitimate public administration of the NYPD sufficed. The court stated:

Counts Two through Thirteen, Falsifying Business Records in the First and Second Degrees, charge the defendants with not preparing and filing the juvenile log report or the UF 250 stop and frisk report relating to their interaction with Rayshawn Moreno. These statutes require defendants to have an “intent to defraud”. It is not necessary to show a property or pecuniary loss from the fraud, and, in this case, it is sufficient to show that the NYPD’s legitimate official actions and purposes were impeded. See, People v Schrag, 147 Misc 2d 517 (County Court, Rockland County, 1990); People v Coe, 131 Misc 2d 807, 812 (Supreme Court, New York County, 1986) (“…. the target of the intent to defraud could have been defendant’s supervisors, defendant’s employer or the victim ….”).
…
Defendants contend that Counts Fourteen through Twenty-Five, Falsifying Business Records in the First and Second Degrees (involving defendants’ failure to properly follow NYPD Communications Division radio procedures), likewise are legally insufficient because there is no evidence of defendants’ “intent to defraud”.
…
The inaccuracy of the records has ramifications beyond general business practices. Likewise, the failure of police personnel to promptly notify the Communications Division dispatcher of their whereabouts and current status vis a vis handcuffed prisoners, adversely affects the agency’s ability to carry out its mission. It meets the standard of “intent to defraud”, since defendants’ actions “intentionally defrauded” or deprived the Police Department of valuable information and knowledge that were critical to its public safety mission. 

20 Misc. 3d 1143(A), 873 N.Y.S.2d 236 (N.Y. Sup. Ct., Richmond County 2008). The Kings County Supreme Court’s 2012 decision in People v. Headley provides a useful account of the broad intent to defraud standard under the falsifying business records statute. 37 Misc. 3d 815, 951 N.Y.S.2d 317 (N.Y. Sup. Ct., Kings County 2012). Headley was a case about ambulance chasing. The defendant, who served as outside counsel for the New York City Transit Authority [NYCTA] in pursuit of personal injury lawsuits, used a fictitious name for his company in order to fraudulently obtain paid assignments from NYCTA to procure independent medical examinations of personal injury claimants who had sued NYCTA. He was charged with first-degree falsifying business records and first-degree offering a false instrument for filing, among other crimes.

The court reviewed relevant precedent–including Kase, Schrag, and Elliassen–and held that “the term ‘intent to defraud’ does not require an intent to deprive the state of money or property, but rather intent to frustrate legitimate state interests and processes. Maintaining a fair vendor selection process free of any potential conflicts of interest is a legitimate function of the NYCTA.” Id. (internal citations omitted).  

The court in Headley usefully outlined the law in New York regarding the intent to defraud:

The lesser included charge of Falsifying Business Records in the Second Degree requires simply “intent to defraud.” The term “intent to defraud” in article 175.00 crimes has been held to be broader than an intent to deprive another of property or money. See Donnino, Practice Commentary, McKinney’s Cons. Laws of N.Y., Book 39, PL § 175.05, pp.408-409. In People v. Schrag, 147 Misc.2d 517, 558 N.Y.S.2d 451 (Rockland Co.1990), defendant was a police officer charged with Falsifying Business Records in the First Degree for filing a false police report. He argued that no intent to defraud was proved before the grand jury. The court found that Penal Law article 175 did not limit the term “intent to defraud” to property or pecuniary loss, and noted that the interests of an entity in keeping accurate business records goes beyond economic concerns and extends to rights of others which may be infringed by false records. The court in Schrag cited People v. Kase, 76 A.D.2d 532, 431 N.Y.S.2d 531 (1st Dept. 1980), in which the defendant was charged with Offering a False Instrument in the First Degree, in support of its conclusion that it was sufficient to show that the Government’s legitimate official action and purpose were impeded.

In Kase, the defendant argued that there was no intent to defraud because the instrument in question, an application to transfer a liquor license in connection with the sale of a tavern, did not have the potential to cause pecuniary loss to the State or political subdivisions thereof. The Appellate Division disagreed. “Whoever intentionally files a false statement with a public offense or public servant for the purpose of frustrating the State’s power to fulfill [its obligation to carry out the law] violates the statute.” Kase at 537-538, 431 N.Y.S.2d 531.

In People v. Elliassen, 20 Misc.3d 1143(A), 2008 WL 4193166 (Sup. Ct. Richmond Co. 2008), the defendants, police officers, were charged with falsifying business records in the first and second degrees for failing to prepare and fill required reports and for failing to follow NYPD procedures. The defendants argued that the evidence was insufficient to establish an “intent to defraud.” The court held that, “[I]t is not necessary to show a property or pecuniary loss from the fraud, and, in this case, it is sufficient to show that the NYPD’s legitimate official actions and purposes were impeded.” The defendants’ conduct inhibited the Police Department’s ability to perform its duties and carry out its mission. The court noted that the inaccuracy of the records had ramifications beyond general business practices.

Given this precedent, this court does not agree with the view that defendant was not proved to have an “intent to defraud” sufficient to justify trial on the lesser second degree offense under Counts 13 and 14. 

37 Misc. 3d at 829–830, 951 N.Y.S.2d at 329. The 1990 Rockland County Court decision in Schrag also noted, “When the Legislature intended to limit the scope of a fraud statute it has done so (i.e., Penal Law §§ 195.20, 190.60). While several Penal Law fraud statutes are directed specifically to preventing property or pecuniary loss, the fraud crimes in article 175 of the Penal Law are not so delimited and therefore the ‘intent to defraud’ terminology must be interpreted so as to effectuate their object, spirit and intent.” 147 Misc. 2d 517, 518, 558 N.Y.S.2d 451 (Rockland County Ct. 1990).

A case of election law violations and false business records is also instructive here. In People v. Norman, 6 Misc. 3d 1035(A), 800 N.Y.S.2d 353 (N.Y. Sup. Ct., Kings County 2004), the  Supreme Court of Kings County held that a defendant causing false information to be entered by a campaign committee and the Board of elections was sufficient to satisfy intent for falsifying business records. The court explained: 

Since it is a crime indeed a felony for a person ‘acting on behalf of a candidate or political committee [to] knowingly and willfully … solicit any person to make [expenditures in connection with the nomination for election or election of any candidate] for the purpose of evading the contribution limitations of [article 14 of the Election Law],’ Election Law § 14-126(4), this evidence is also sufficient to establish that the defendant concealed these solicitations and contributions from the treasurer and thus prevented the making of a true entry, and caused the omission of a true entry in the records of both the [campaign] Committee and the Board of elections with ‘intent to defraud includ[ing] an intent to commit another crime or to aid or conceal the commission thereof.’ Penal Law § 175.10.

Our discussion here focuses on the jurisprudence interpreting the scope of the falsification of business records statute. We should note the practice of district attorneys prosecuting cases under these statutes may also be instructive. See, for example, the 2017 indictment of Richard Brega for falsification of business records in creating a scheme of covert payments to benefit a political campaign. 

Of course, the intent to defraud must involve an intent to deceive that is material to another’s interest. In People v. Keller, the trial court held that the creation of false documentation did not amount to deception because it was immaterial. Defendants who ran an escort service did not intend to defraud a credit card company by falsely billing clients for “limousine service” instead of escort services on charge slips. 176 Misc. 2d 466, 673 N.Y.S.2d 563 (N.Y. Sup. Ct. 1998). The judge explained: “The defendants did not intend for American Express to be deceived by the writing. They knew and expected that the particular falsity of this writing would be of no moment to American Express.” Id. at 469; see also id. at 469 (“Their intention was for American Express to obtain their usual remuneration for a credit card transaction, and there is no evidence that they did not.”). While the recipient of the false document suffered no financial loss, that fact was incidental. 

Contrary cases

Two cases have been cited for the proposition that the intent to defraud is limited to depriving a person of money or property, but there are significant flaws in relying on these cases. The two cases are: a Second Department decision in People v. Saporita (1987) and a Kings County Criminal Court one in People v. Hankin (1997). In Saporita, the court explained that the prosecutors had not objected to a jury instruction on this element of the crime and – whether that instruction was flawed or not – the government was stuck with it on appeal. 132 A.D.2d 713, 715, 518 N.Y.S.2d 625, 627 (N.Y. App. Div., 2nd Dept. 1987) (“No objection was taken by the People to this part of the court’s charge and they became bound by it.”). Notably, Saporita was focused on the element of depriving “another person,” not necessarily on the issue of deprivation of money or property. Indeed, the jury instruction read: “The term defraud means to cheat or deprive another person of property or a thing of value or a right.” 132 A.D.2d at 715; id. (“in the instant record, there is no evidence that ‘another person’ was deprived of any property or right as a result of the defendants’ conduct regarding the public records”). 

The Hankin trial court misconstrued Saporita, citing it for the proposition of law described in the jury instruction, thus failing to recognize the highly limited reason for the Second Department’s decision. 

Other courts in the Second Department have not misconstrued Saporita. For example, in the 1990 decision of People v. Schrag, the Rockland County Court emphasized the peculiarity of the Saporita decision having been predicated on the government’s failure to oppose the jury instructions and explained that those jury instructions were, in fact, erroneous. The Schrag court emphasized the broad definition of “intent to defraud” set forth by Kase and others. It is worth quoting the Schrag court’s analysis at length:

The court found that conduct [in Saporita] to be insufficient to establish an “intent to defraud” as charged since there was no evidence that “another person” was deprived of any property or right as a result of the defendant’s actions. A review of the Article 175 crimes illustrates that the use of the term “intent to defraud” is not qualified by any language which limits their applicability to property or pecuniary loss.
…
Although CJI [Criminal Jury Instructions] refers to the object of the intent to defraud as being “another person,” there seems to be no basis in law to require the defrauded entity to be a person. In fact, because the crime involves the false entry or omission of information from business records, the defrauded party is most likely to be a business entity rather than a person. (See, Penal Law § 175.00 [1].) The decision in People v Saporita (supra) appears to rely heavily upon the fact that the trial court gave the CJI instruction without objective by the People, so that the People were then limited to showing that another person was intended to be defrauded. Since the instant matter has not yet proceeded to trial, and this court does not believe the CJI instruction at issue correctly defines the statutory language, a dismissal of count 1 on this ground is not warranted.

Similarly, the language in the CJI instruction which refers to depriving another of “property or a thing of value or a right” is language which should be given more than just a commercial meaning. The enterprises which can be the victims of the falsification of business records include “any entity of one or more persons, corporate or otherwise, public or private, engaged in business, commercial, professional, industrial, eleemosynary, social, political or governmental activity.” Penal Law § 175.00(1). The interest of these various entities in keeping accurate business records goes far beyond their economic concerns and certainly extends to the rights of the entities and others which may be infringed by false records. In People v. Kase, 76 A.D.2d532, 537, 431 N.Y.S.2d 531 (1st Dept., 198); aff’d 53 N.Y.2d 989, 441 N.Y.S.2d 671, 424 N.E.2d 558, the Court favorably cited the federal rule that, in a prosecution for filing a false instrument, it is not necessary to show that the government suffered a property or pecuniary loss from the fraud citing Hammerschmidt v. United States, 265 U.S. 182, 188, 44 S.Ct. 511, 512, 68 L.Ed. 968. It was sufficient to show that the government’s legitimate official action and purpose were impeded. Accordingly, this Court will impose no requirement that the Grand Jury presentation establish a commercial or property loss. 

147 Misc. 2d at 518–519, 558 N.Y.S.2d at 452–453 (Rockland County Ct. 1990). Subsequent case law in the Second Department has adopted the broad definition of intent to defraud in line with the Kase test and Schrag. See People v. Elliassen (Richmond County Sup. Ct. 2008), which we discussed at length above. See also People v. D. H. Blair & Co., Inc. (New York County Sup. Ct. 2002) (rejecting Hankin and stating that “prior cases which have defined the statutory scope of a falsifying business records charge have not limited the statute to encompass only the intention to defraud the entity, whose business records were falsified. Rather, the reach of the statute includes the falsification of records, which are designed to thwart possible regulatory scrutiny”). 

Conclusion

In sum, the New York case law offers clear guidance on the broad scope of the “intent to defraud” for the offense of falsifying business records. While there are other legal hurdles for the Manhattan DA to cross in the indictment of the former president, this element of the relevant offenses poses no obstacle based on the known facts in the case.

IMAGE: Manhattan Criminal Courthouse with increased presence of NYPD officers and media crew on March 31, 2023, the day after former President Donald Trump was indicted. Photo credit: Melissa Bender

The post The Broad Scope of “Intent to Defraud” in the New York Crime of Falsifying Business Records appeared first on Just Security.

The post Survey of Past Criminal Prosecutions for Covert Payments to Benefit a Political Campaign appeared first on Just Security.

Here it appears they are. Prosecution of falsifying business records in the first degree is commonplace and has been used by New York district attorneys’ offices to hold to account a breadth of criminal behavior from the more petty and simple to the more serious and highly organized. We reach this conclusion after surveying the past decade and a half of criminal cases across all the New York district attorneys’ offices.

The Table below provides full details of many examples of cases we identified in the survey. A sample of representative precedents includes:

• The People of the State of New York v. Josue Aguilar Dubon, AKA Saady Dubon, AKA Alejandro Ortiz (October 2022) — Bronx business owner indicted for failing to report over $1 million in income, avoiding paying $60,000 in taxes.

• The People of the State of New York v. Scott Kirtland (February 2022) — Insurance broker indicted for allegedly creating/filing fraudulent certificates of liability insurance to further scheme to defraud.

• The People of the State of New York v. James Garner (November 2021) — Mental health therapy aide indicted for allegedly defrauding over $35,000 in workers’ compensation benefits.

• The People of the State of New York v. Jose Palmer (November 2016) — Pleaded guilty to petit larceny for unemployment benefits fraud of over $3,000, having initially been indicted for grand larceny and falsifying business records in the first degree.

• The People of the State of New York v. Jason Holley (November 2016) — Convicted by jury of falsifying business records in the first degree but acquitted of the predicate crime, insurance fraud.

• The People of the State of New York v. Christina Murray (May 2015) & People v. Terrel Murray (May 2014) — Married couple convicted of house fire insurance claim, attempting to recover the cash value of various items of property that were ostensibly lost in the fire.

• The People of the State of New York v. Barbara A. Freeland (June 2013) — Convicted for falsely claiming on a food stamps application that a young adult lived with her.

• The People of the State of New York v. Maria F. Ramirez (August 2010) — Convicted for returning unpurchased items to a store in exchange for store credit, thus causing a false entry in a business record of an enterprise, and using the store credit to purchase additional items one day.

Before turning to the full Table listing these and many other cases, we offer a brief description of the applicable law. In New York, the criminal law on falsifying business records is found at Article 175 of New York’s penal code. The crime of falsifying business records can be committed in the second degree, which is a class A misdemeanor (N.Y. Penal Code § 175.05), or in the first degree, which is a class E felony (N.Y. Penal Code § 175.10).

An individual is “guilty of falsifying business records in the second degree when, with intent to defraud, he:

1. makes or causes a false entry in the business records of an enterprise; or
2. alters, erases, obliterates, deletes, removes or destroys a true entry in the business records of an enterprise; or
3. omits to make a true entry in the business records of an enterprise in violation of a duty to do so which he knows to be imposed upon him by law or by the nature of his position; or
4. prevents the making of a true entry or causes the omission thereof in the business records of an enterprise.” N.Y. Penal Code § 175.05

An individual “is guilty of falsifying business records in the first degree when he commits the crime of falsifying business records in the second degree, and when his intent to defraud includes an intent to commit another crime or to aid or conceal the commission thereof.” N.Y. Penal Code § 175.10.

For Trump to be prosecuted for felony violation of falsifying business records, the statute requires the DA to prove not only that Trump is guilty of falsifying business records (a misdemeanor), but that he did so with the intent to commit “another crime,” or aiding or concealing the commission of “another crime.”

The Table of dozens of cases is provided in the 24-page Scribd file below as well as a separate online PDF.

Survey of New York Prosecutions for Felony Falsification of Business Records on Scribd

The post Survey of Past New York Felony Prosecutions for Falsifying Business Records appeared first on Just Security.

We begin with a discussion of who Scott Perry is and his role in the effort to overturn the election because the legal analysis turns on those facts and because it illuminates the larger stakes here. They are momentous.

I. Background on Rep. Scott Perry and the Assault on the 2020 Election

Perry’s interference in the 2020 presidential election is well documented – including in media reporting, a Senate Judiciary Committee report in October 2021, and the Jan. 6 Select Committee’s final report. Perry has been exposed as a “key congressional” ally of President Donald Trump in his effort to steal the presidential election and subvert our nation’s democratic process, and as the “chief conduit for the House GOP Conference to the White House.”

Perry’s involvement in Trump’s effort to overturn the election was extensive. He was “involved in early post-election messaging strategy” and an “early supporter” of the “Stop the Steal” campaign. The Congressman also “often teamed up” with Rep. Jim Jordan to spread lies about the election, both speaking at a “Stop the Steal” rally outside the Pennsylvania State capitol in Harrisburg, on Nov. 5, 2020, just days after the November election. On Nov. 10, Perry texted Meadows with advice from a “cyber forensic team” he was in touch with after the 2020 election. The message included a link to a conspiracy theory about the vote count in Pennsylvania posted by the far-right newspaper Epoch Times. It was one of many text messages that would follow.

He was involved in “discussions with White House officials about Vice President Pence’s role on January 6th as early as November 2020,” according to the Select Committee’s final report.

Perry also joined 26 other Republican Congressmen in co-signing a Dec. 9 letter requesting that Trump “direct Attorney General Barr to appoint a Special Counsel to investigate irregularities in the 2020 election.” The letter came more than one week after Barr had already told the press that there was zero evidence of significant fraud which could affect the outcome of the election. And Perry also supported Texas’s fatally flawed lawsuit against Pennsylvania, his own home state, and three other states. He also on Dec. 21, along with 10 other House Republicans, met with Trump at the White House to discuss their plan to object to the certification of the electoral college vote on Jan. 6. In the early hours on Jan. 6, Perry spearheaded Republicans’ objection to certifying the results in Pennsylvania, and he persists in making clear his skepticism in the 2020 election results.

Despite Perry’s trite public “condemnation” on Jan. 9, 2021 of the “unacceptable and criminal” behavior of those that attacked the Capitol building, he had initially advocated to Meadows that Trump speak at the Capitol during the joint session. He also joined a call on Jan. 2, where Rep. Jim Jordan (R-Ohio), Trump, and others discussed taking to social media to encourage Trump supporters to march to the Capitol on Jan. 6.

But “perhaps most pivotally,” as the Jan. 6 Select Committee noted, was Perry’s role in the plan to supplant the acting Attorney General with Trump loyalist Jeffrey Clark, in an effort to enact the “fake electors” plan. Perry introduced Clark to Trump, and together they had a shared goal: “to enlist Clark to reverse the Department of Justice’s findings regarding the election and help overturn the election outcome” (Jan. 6th final report). Evidence by the Senate Judiciary Committee and the January 6th Select Committee both show that following Perry introducing Clark to Trump, Perry sent several text messages to Meadows between Dec. 26, 2020, and Jan. 2, 2021, pressing that the DOJ official be speedily promoted to the very top of the Department to effectively carry out the plan. “Mark, you should call Jeff. I just got off the phone with him and he explained to me why the principal deputy won’t work, especially with the FBI. They will view it as [sic] not having the authority to enforce what needs to be done,” Perry wrote in a text to Meadows on Dec. 26.

Perry himself called Acting Deputy Attorney General Donoghue on Dec. 27. “Perry explained that President Trump asked him to call and that he, Representative Perry, did not think the DOJ had been doing its job on the election,” the final report states, relying on Donoghue’s testimony. Perry also spoke highly of Clark on the call, saying that he believed Clark “‘would do something about this,’” Donaghue testified. Perry also raised other unrelated qualms he had with the DOJ and argued that the “FBI doesn’t always do the right thing in all instances.”

That evening, Perry emailed Donoghue “a set of documents” which alleged significant voting fraud in Pennsylvania.  One document claimed that election authorities had counted 205,000 more votes than had been cast, a claim which Perry also shared on Twitter the following day. President Trump consistently asserted the same. But the claim was false; a simple delay in Pennsylvania’s election site to update explained the discrepancy in reported public votes cast.

Perry’s plan appeared to be succeeding, as Trump offered Clark the position of Acting Attorney General, Clark said he would accept, and the White House call logs referred to Clark under that new title. Perry and Trump’s plan failed only after DOJ officials warned Trump in the Oval Office on Jan. 3 of mass resignations if Clark were to replace Rosen.

II. Procedural History of the Criminal Investigation and the Perry Litigation

Perry has been of interest to Justice Department prosecutors since at least June 2022 for his involvement in efforts to overturn the 2020 election. That is when District Court Chief Judge Beryl Howell issued an order giving prosecutors access to 37 emails between Perry and Jeffrey Clark, Ken Klukowski, and John Eastman.

On Aug. 9, 2022, FBI agents executed a court-authorized warrant to seize Congressman Perry’s personal cell phone while he was on vacation with his family in New Jersey. Soon after the seizure, Perry shared news of it with Fox News in an official statement. “And this is my personal cell phone, Brian,” Perry said during his first exclusive interview on the matter with Fox News. “I have a [sic] official cell phone. They don’t want that. So, this is my personal cell phone that I talk to my wife on, that I talk to my children on, my constituents. None of the government’s business.”

As media outlets reported at the time, the seizure was the third major step “taken [in recent months] in connection with an escalating federal investigation into efforts by several close allies of former President Donald J. Trump to overturn the 2020 election[.]” In addition to seizing Perry’s phone, agents had in June seized the phones and other electronic devices of Clark and Eastman, all originally in relation to activities of the Justice Department’s Office of the Inspector General, which was at the time “taking the lead on the election subversion investigation.”

The warrant was issued on Aug. 2 by Magistrate Judge Susan E. Schwab of the U.S. District Court for the Middle District of Pennsylvania. After seizing the congressman’s phone, its data was copied, and the phone was given back the same day. DOJ then asked the U.S. District Court for the District of Columbia for “a necessary second level of judicial permission to begin combing through the records.” Perry immediately filed a lawsuit following the seizure, raising Speech or Debate Clause claims. Following Perry’s lawsuit, the dispute went under seal, with Perry’s legal team and DOJ investigators appearing in mid-October before Judge Howell during a secret hearing. Perry then dropped his suit in October, leaving unknown the status of the behind-closed-doors case.

On Dec. 28, 2022, Judge Howell ruled in favor of the DOJ’s request to start the second stage of its review, allowing prosecutors to comb through the electronic information on Perry’s phone. Last month, however, a three-judge appeals court panel in DC – two Trump appointees, Judges Gregory Katsas and Neomi Rao, and H.W. Bush appointee Judge Karen Henderson – put a temporary stay on Howell’s ruling. The Reporters Committee for Freedom of the Press then filed a motion to “unseal the appeals court’s order and all briefing in the case, including filings submitted by the government, Perry, and the U.S. House of Representatives.” Further, they requested oral arguments in the case be open to the press and public. On Feb. 16, 2023, the D.C. Circuit granted the latter request in part with a public hearing to be immediately followed by one closed to the public.

Notably, the House has made a move in the case, with the five-member “Bipartisan Legal Advisory Group,” – including House Minority Leader Hakeem Jeffries and Republican House Speaker Kevin McCarthy – voting unanimously to intervene in the case.

Thursday’s Hearings

During the public part, oral arguments were made on two issues relevant to the Speech or Debate Clause:

1. Whether the Speech or Debate Clause of the Constitution protects informal legislative fact-finding by individual members of Congress in the absence of official authorization; and
2. Whether the Speech or Debate Clause’s non-disclosure privilege extends to communications between members of Congress and either private parties or members of the Executive Branch.

We address these two questions specifically in our analysis below, with reference to the available facts, and taking account of what we learned at the argument. But first we offer some threshold analysis of Speech and Debate Clause law and precedent. Some areas are more settled than others, some issues the Supreme Court has never dealt with, and some matters the Circuits disagree on.

III. The General Constitutional Framework

The Constitution’s Speech or Debate Clause provides that “for any Speech or Debate in either House,” Senators and Representatives “shall not be questioned in any other Place.” U.S. Const., art. I, § 6, cl. 1. As recognized in the Justice Department’s manual, the Clause’s “purpose is to assure the Congress a wide and unfettered latitude of freedom of speech in the deliberative process surrounding enacting legislation, and to shield that process from potential intimidation from the Executive and Judicial Branches.”

The privilege(s) offered by the Clause are relatively broad: it “protects ‘against inquiry into acts that occur in the regular course of the legislative process and into the motivation for those acts’” and “precludes any showing of how [a legislator] acted, voted, or decided.” United States v. Helstoski, 442 U.S. 489, 500 (1979) (quoting United States v. Brewster, 408 U.S. 501, 525, 527 (1972)). The legislative process includes not only “words spoken in debate,” but also “[c]ommittee reports, resolutions, and the act of voting” and “things generally done” during a legislature’s session “by one of its members in relation to the business before it.” Gravel v. United States, 408 U.S. 606, 617 92 S. Ct. 2614 (1972).

The Clause can be best thought of as composing the general principle of immunity (from prosecution or suit), “complemented” and “effectuated” by two component privileges – evidentiary and testimonial – which Members may invoke to protect against the introduction of specific “legislative act” evidence. As such, a Member of Congress cannot be compelled to testify about matters covered by the privilege, nor have evidence of such acts used against them at least at trial and potentially during investigations (depending on which Circuit you ask).

Limitations to the Clause

“The scope of [any] privilege is limited by its underlying purpose.” Roviaro v. United States, 353 U.S. 53, 60 (1957). The “central importance” of the immunity created by the Speech or Debate Clause is to “prevent [] intrusion by [the] Executive and Judiciary into the legislative sphere.” Helstoski, 442 U.S. 477, 491. The privilege was “designed to preserve legislative independence, not supremacy.” Brewster, 408 U.S. at 508, and, as such, the Clause’s protections do not apply to “everything a Member of Congress may regularly do.” Doe v. McMillan, 412 U.S. 306, 311, 313 (1973).

Importantly, the Clause does not provide members of Congress with carte blanche to carry out any action in the name of official duty and escape complete scrutiny and accountability. As the Supreme Court has repeatedly stressed, the purpose of the Clause was not “to make Members of Congress super-citizens, immune from criminal responsibility,” Brewster, 408 U.S. at 516. nor to offer privileges to those that “violate an otherwise valid criminal law in preparing for or implementing legislative acts.” Id. at 626. Essentially, as noted in a Congressional Research Service report on the Clause, it “does not immunize criminal conduct that is clearly no part of the ‘due functioning’ of the legislative process.” For example, the Clause has accordingly been expressly held not to protect Senators or Representatives against bribery charges. Johnson v. United States, 383 U.S. 169 (1964).

The privilege extends only to those acts that are an “integral part of the deliberative and communicative processes” through which members of Congress engage either in “the consideration and passage or rejection of proposed legislation” or “other matters which the Constitution places within the jurisdiction of either House.” Gravel, 408 U.S. at 625.

Is the Conduct a “Legislative Act”?

Often the key question in Speech or Debate Clause cases is whether the relevant conduct, or on which evidence or testimony is sought, properly constitutes a “legislative act.” Johnson, 383 U.S. at 185; Brewster, 408 U.S. at 512; Gravel, 408 U.S. at 625. See also, U.S. v. Renzi, 651 F.3d 1012, 1021.,

If legislative, the Member is – and rightly so – immune from any criminal or civil liability that may otherwise have attached to that act, and evidence of the act shall not be introduced in any subsequent trial, or testimony by the Member compelled, for example, by subpoena. McMillan, 412 U.S. at 312-13. However, acts determined by the court to be non-legislative will not receive the privilege.

The Supreme Court has consistently emphasized that “legislative acts are not all-encompassing.” Gravel at 625. The courts have never “treated the Clause as protecting all conduct relating to the legislative process.” Brewster, 408 U.S. at 515. The privilege is limited solely to legislative acts “generally done in a session of the House by one of its members in relation to the business before it,” Kilbourn v. Thompson, 103 U.S. 168, 204 (1881); see also Gravel 408 U.S. at 617-18. Merely performing certain duties in an official capacity as a Member of Congress does not ipso facto make those duties legislative. Fowler-Nash v. Dem. Caucus of Pa. House of Rep., 469 F.3d 328, 336-37 (3d Cir. 2006). In fact, Members “engage in many activities other than the purely legislative activities protected by the Speech or Debate Clause.” Brewster, 408 U.S. at 512; accord Doe v. McMillan, 412 U.S. 306, 313 (1973). When Members of Congress engage in categories of conduct which are not legislative but instead, for example, political, such conduct does not enjoy privilege protection. Id. Thus, as the D.C. Circuit noted, the Clause “protects conduct that is integral to the legislative process, not a Member’s legislative goals.” Fields v. Off. of Eddie Bernice Johnson, 459 F.3d 1, 12 (D.C. Cir. 2006).

IV. Analysis of the Perry Case

As part of our analysis below, we now turn to the two issues argued before the court of appeals, and further address the law on matters which do not fall within the protection of the Speech or Debate Clause.

Unauthorized informal legislative fact-finding

In response to the first question, we take the view that informal legislative fact-finding in the absence of official authorization should not be protected under the Clause. In the alternative, even if privilege protection would extend to informal legislative fact-finding, much of Perry’s conduct (that prosecutors will likely be concerned with) could not properly be categorized as such. Instead, the evidence suggests that a lot of what Perry did to support Trump’s efforts could only properly be categorized as non-legislative acts.

The court in McSurely v. McClellan, 553 F.2d 1277 (D.C.Cir. 1976) (en banc) offers a helpful rebuttal to the contention that privilege should attach to informal legislative fact-finding by individual members of Congress in the absence of official authorization.

The court said that it had “no doubt that information gathering, whether by issuance of subpoenas or field work by a Senator or his staff, is essential to informed deliberation over proposed legislation.” Id, at 1286. However, it underlined that there are ““finite limits”” to the Clause, including the “requirement of congressional authorization” Id. at 1286-87, citing Eastland v. United States Servicemen’s Fund, 421 U.S. 491 (1975) (emphasis added).

In Thursday’s hearing, speaking of Supreme Court and DC Circuit case law, Judge Rao said, “There are no cases specifically about individual member fact-finding. … So actions that come from a committee or a subcommittee are really by definition legislative acts. They are acts of Congress or a subcomponent of Congress” (time stamp 11:15).

The Supreme Court went even further, adding even where there is “broad authorization” for a member to carry out an investigation, they are:

“not free to use every conceivable means to obtain investigatory materials, without fear of criminal prosecution or civil suit. The Court has taken “a decidedly jaundiced view towards extending the Clause so as to privilege illegal or unconstitutional conduct beyond that essential to foreclose executive control of legislative speech or debate and associated matters such as voting and committee reports and proceedings.” Gravel v. United States,408 U.S. at 620, 92 S.Ct. at 2625. In Gravel the Court held the Senator and his aide immune from questioning with respect to conduct that transpired at a committee hearing, but refused to extend immunity to grand jury questioning concerning third-party crime or criminal conduct by the Senator or his aide related to preparation for the hearing. Thus, the grand jury was permitted to “trac[e] the source of obviously highly classified documents that came into the Senator’s possession,” provided “no legislative act is implicated by the questions,” id. at 628, 92 S.Ct. at 2628, notwithstanding the fact that those documents were an integral part of the preparation for the committee proceeding that was held protected conduct.” Id. at 1287.

Perry may seek to argue that his communications with Trump officials, election officials, and Justice Department officials were all informal fact-finding with the view to informing his position when it came to passing his vote on Jan. 6. Admittedly, the act of voting is a legislative act and thus some fact-finding inquiries taken to better inform that voting decisions could be protected by the Clause.

However, as emphasized by the McSurely court, authorization to carry out investigative activity is required in order to have a chance of asserting privilege. As we know, Perry’s conduct was not authorized. Even if Perry somehow did have the authorization to carry out informal investigations, including field work, into his alleged concerns around the 2020 election result, the large majority of the communications Perry undertook fall squarely outside the ambit of Speech or Debate immunity. We address each of these below.

Perry’s actions, including those in late December and early January, cannot be properly characterized as informal fact-finding. His actions were not taken with the view to informing his voting decision on January 6th. He had already made up his mind months before. Perry did not seek to acquire knowledge through informal sources in order to discharge his constitutional duties. Quite the opposite. He sought to impress his idea of valid information, that the election result was wrong, on top DOJ officials in an effort to use their powers and influence, for example, to push state legislators into changing the election results. He did not seek to better inform his position, but instead influence the Executive branch to reverse its assessment that there was no evidence of substantial voter fraud.

Efforts to Influence Executive Conduct

Most importantly, the courts are in general agreement that communications by legislators that include efforts to influence the conduct of the Executive Branch will not be considered legislative acts. See Hutchinson, 443 U.S. at 121 n.10; United States v. Johnson, 383 U.S. 169, 172 (1966); Chastain v. Sundquist, 833 F.2d 311, 314-15 (D.C. Cir. 1987); Payne v. District of Columbia, 859 F. Supp. 2d 125, 134 (D.D.C. 2012); Jewish War Veterans of the U.S. of Am., Inc. v. Gates, 506 F. Supp. 2d 30, 54 (D.D.C. 2007). As the Supreme Court explained in Gravel, Members of Congress “may cajole, and exhort with respect to the administration of a federal statute—but such conduct, though generally done, is not protected legislative activity.” 408 U.S. at 625. The Third Circuit in Menendez took a slightly different position, that “informal efforts to influence the Executive Branch are ambiguously legislative in nature and therefore may (or may not) be protected legislative acts depending on their content, purpose, and motive.” 831 F. 3d 155 at 168. See also McDade, 28 F.3d at 300. However, the court did agree with Gravel, and was clear that privilege would not be extended to “efforts to intervene in decisions pending before the Executive Branch that would mainly affect one particular party.” Id.

Public Statements

The Supreme Court in Hutchinson v. Proxmire held that public statements uttered outside the context of official congressional proceedings constitute another category of “non-legislative” activity, even when they are issued in furtherance of the “informing function” of Congress. 443 U.S. at 127-33.

Third-Party and Logistical Communications

A further category of communication not generally covered by privilege is third-party and logistical communications: For example, “communications between legislators and constituents, lobbyists, and interest groups are not entitled to protection under a legislative privilege.” Texas v. Holder, No. 12 Civ. 128, 2012 WL 13070060, at *2 (D.D.C. June 5, 2012) (Tatel, Collyer, Wilkins, JJ.); accord Bastien v. Off. of Senator Ben Nighthorse Campbell, 390 F.3d 1301, 1316 (10th Cir. 2004). Further, “meeting arrangements are only ‘casually or incidentally related to legislative affairs’ and are not part of the legislative process itself.” U.S. Merit Sys. Prot. Bd. v. McEntee, No. 07 Civ. 1936, 2007 WL 9780552, at *3 (D. Md. Dec. 13, 2007) (quoting Brewster, 408 U.S. at 528).

Irrespective of whether such conduct is criminal, it is, at minimum, “in no wise related to the due functioning of the legislative process.” Brewster, 408 U.S. 501, 525 (1972). Accordingly, when Members engage in the above categories of conduct, they do not enjoy the legislative privilege.

General “Non-Disclosure Privilege” of Documents and Other Records

There appears to be a fair degree of consensus that the Speech or Debate Clause provides three clear protections: immunity from direct liability for legislative activities; prohibition on the use of legislative-act evidence in litigation (evidentiary privilege); and protection of legislators from being compelled to respond to questioning regarding their legislative acts (testimonial or non-disclosure privilege). Renzi, 651 F.3d at 1035 n. 27; Howard v. Office of the Chief Administrative Officer of the United States House of Representatives, 720 F.3d 939, 946 (D.C. Cir. 2013).

However, as a Congressional Research Service report explains, there is “stark disagreement” between the Circuits as to whether the Clause provides for a general documentary “non-disclosure privilege” that applies irrespective of whether such documents are introduced into evidence. Essentially, the issue is whether a member of Congress is permitted to refuse to disclose any information on matters which fall within legislative activities including at the stage of a criminal investigation as well as at trial.

The D.C. Circuit has generally endorsed the additional privilege, viewing it as part of the testimonial component of the Clause, and found that it may apply in protecting Members from compelled compliance with administrative or civil subpoenas for legislative-act documents (see Comm. on Ways & Means, 161 F. Supp. 3d at 238-45; MINPECO, S.A. v. Conticommodity Services, Inc., 844 F.2d 856, 857-59 (D.C. Cir. 1988); Brown Williamson Tobacco v. Williams, 62 F.3d 408, 420).

The D.C. Circuit Court in United States v. Rayburn House Office Building extended the reach of this privilege even further, finding that it also applied to the criminal context, specifically where the government executes a search warrant as part of a criminal investigation of a Member. “[T]here is no reason to believe that the bar [in Brown & Williamson] does not apply in the criminal as well as the civil context.” 97 F.3d at 656, 660.

The issue in Rayburn focused on whether the FBI executed a search warrant of the Congressman’s office in violation of the Clause. In short, the court found that the search did violate the Clause because the government “denied the Congressman any opportunity to identify and assert the privilege with respect to legislative materials before their compelled disclosure to Executive agents.” Id. at 662. Despite the limited scope of the warrant (for non-legislative, unprotected documents only), the FBI’s initial review of the Member’s papers to distinguish between those protected and those not protected “must have resulted in the disclosure of legislative materials to agents of the executive.” Id. at 661. Thus the court found that the “compelled disclosure” was inconsistent with the protections of the Clause, specifically the testimonial privilege encompassing the nondisclosure right. Id. Unhelpfully, the court did not provide a clear acceptable procedure for avoiding a violation, except for stating that there appears to be “no reason why the Congressman’s privilege under the Speech or Debate Clause cannot be asserted at the outset of a search in a manner that also protects the interests of the Executive in law enforcement.” Id. at 662.

The position taken in Rayburn isn’t without its opposition. Notably, Judge Henderson—who sat on the Rayburn court and now sits on the panel deciding the Perry case, wrote a concurring opinion stating that the majority opinion “vastly over-read” the decision in Brown & Williamson. Henderson opined that with search warrants, unlike with subpoenas (like in the case of Brown & Williamson):

“[t]he property owner is not required to respond either orally or by physically producing the property, including records. Cf. Johnson v. United States, 228 U.S. 457, 458, 33 S.Ct. 572, 57 L.Ed. 919 (1913) (under Fifth Amendment ‘[a] party is privileged from producing the evidence, but not from its production’). The FBI agents’ execution of the warrant on Rep. Jefferson’s congressional office did not require the latter to do anything and accordingly falls far short of the question[ing]’ the court in Brown & Williamson found was required of a Member in response to a civil subpoena.”

As such, Henderson was of the view that Brown & Williamson’s non-disclosure rule “does not extend to criminal process.” Id. at 669-70.

The Third and Ninth Circuits have also broadly rejected the majority opinion in Rayburn House, holding instead that, at least in the criminal context, the Clause prohibits only the use of privileged documents as evidence in proceedings, not merely their disclosure to government investigators for review as part of an ongoing investigation. See Renzi, 651 F.3d at 1032-39; Fattah, 802 F.3d at 524-29; In re Grand Jury Investigation, 587 F.2d 589, 595-97 (3rd Cir. 1978).

As noted by the court in Rayburn, the matter has yet to be addressed by the Supreme Court.

Other Matters

Notably, the D.C. Circuit takes the view that “where it is not a Member who is subject to criminal proceedings, that the privilege might be less stringently applied when inconsistent with a sovereign interest.” Rayburn House, 497 F.3d at 663. So, for example, if DOJ is instead searching for evidence of crimes committed by third-parties such as Jeffrey Clark who is reportedly under investigation, a Member may have less success in claiming privilege.

According to Perry’s attorney, after receiving his phone back from agents, “The Justice Department informed us that Representative Perry is not a target of its investigation.”

During Thursday’s hearing, Judge Neomi Rao probed whether the non-disclosure immunity, in particular, could be waived like other immunities when communicating with individuals not covered by the privilege. The distinction discussed in Rayburn House may give even greater reason to finding such a waiver here.

Although the warrant in the Perry case is sealed, the warrant in the search of Clark’s home and seizure of his phone “ indicated that prosecutors are investigating Mr. Clark for charges that include conspiracy to obstruct the certification of the presidential election,” according to the New York Times.

V. Conclusion

To the extent the Justice Department seeks data from Rep. Perry’s phone concerning conduct that qualifies as non-legislative, the privilege does not apply. The Justice Department should have ample room to obtain the most relevant information from Rep. Perry’s phone. The Speech and Debate Clause has “finite limits” and the specific facts of the congressman’s communications fall outside those limits.

We thank Amalia Diamond, Simone Rothstein, Sasha Matsuki, Natalie Fulton, and Michael Nevett for assisting with research, fact-checking and proofreading.

Photo credit: U.S. Rep. Scott Perry (R-PA) walks back to the House Chamber during the third day of elections for Speaker of the House at the U.S. Capitol Building on Jan. 05, 2023 (Nathan Howard/Getty Images)

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Even critics of Garland’s decision should recognize that the optics would be less than ideal if he proceeded without a special counsel. Trump just this week formally announced that he will be running to return to the Oval Office. And President Joe Biden has said that his intention is to run for reelection. It was therefore a prudent decision, and within the DOJ’s regulations, for Garland to take this course of action, even if a special counsel appointment is typically used when investigating a political figure within the executive branch.

Those rules provide that if there is either “a conflict of interest for the Department or other extraordinary circumstances” and “it would be in the public interest,” the Attorney General will appoint a special counsel. For the political appointee of the president to investigate and perhaps prosecute Biden’s leading political opponent is, as Garland rightly noted, an “extraordinary circumstance.” And removing any risk of potential taint serves the public interest.

If the facts demonstrate Trump violated the law, we have no doubt that the Special Counsel will pursue indictment. As a veteran former federal prosecutor with more than 16 years of experience at the Department of Justice, Smith is well aware of the Department’s policy that suggests prosecution when, among other things, “the person’s conduct constitutes a federal offense,” and “the admissible evidence will probably be sufficient to obtain and sustain a conviction.”

Our pros memo supports the conclusion that Trump has committed a number of felonies, and that the facts will be sufficient to obtain and sustain a conviction. The pros memo outlines the strong case that could be brought against Trump in connection with his mishandling of classified and other government documents at Mar-a-Lago, as well as obstruction of the investigation by the National Archives and the Justice Department. Some of us have also been involved in carefully tracking the evidence against Trump related to the events of January 6, and the facts, while far more complicated, may well support prosecution in that case as well.

Of course, we surely do not have all the facts. There may or may not be additional exculpatory evidence out there—or proof of the inculpatory variety. In either event, Smith’s reputation for prosecutorial tenacity suggests he will fill those gaps.

An important question, however, is how long it will take to do so. Garland, in his statement appointing the Special Counsel, said, “I am confident that this appointment will not slow the completion of these investigations.” Smith also committed to acting with dispatch. It is badly needed.

Nearly two years have elapsed since January 2021, when the potentially criminal pattern of conduct under the Special Counsel’s purview culminated. For our pros memo, we reviewed every prior prosecution for mishandling classified information in the United States. Those precedents show that the DOJ usually brings charges within one to two years after the offense was committed, and sooner when discovery of the unlawful taking of the documents follows on the heels of the crime.

As our model pros memo details in its compilation of prior DOJ precedent, literally any other American who had concealed classified documents would likely have already been subject to prosecution—and where the former president concealed hundreds including some of the nation’s most sensitive secrets—the rule of law demands expeditious action.

Some are understandably skeptical whether justice will be timely obtained, or obtained at all, given Trump’s record of evading legal consequences. History elevates that concern. Of the many lawyers appointed as special counsel, dating back to Archibald Cox as “special prosecutor” related to Watergate, no indictment against a sitting or former president has ever been filed. But each of those cases had serious impediments to prosecution that simply do not appear to be present here.

Some of those cases involved a sitting president, preventing—at least according to DOJ policy—criminal prosecution. We know this policy motivated the lack of affirmative conclusions of criminal conduct in Special Counsel Robert Mueller’s 2019 report. Mueller said so. That hands-off approach to a sitting president also explains why Richard Nixon was not prosecuted prior to his resignation (though, but for President Ford’s pardon, he may well have been subject to a post-presidential indictment).

Importantly, there is simply not that much precedent for the times we are in (which is a fortunate thing). And none of the previous cases involved evidence of criminal conduct after leaving office. Whatever constitutional or prudential considerations might militate against pursuing criminal charges against a sitting president for conduct during their tenure, none apply once that person has returned to life as a private citizen.

On the contrary, ex-presidents should not be treated any differently than other Americans. Being elected president is not a lifelong grant of criminal immunity. That protection is something that applies only in monarchies and tyrannical regimes. The rule of law requires that its operation applies to each of us equally. Indeed, having been the leader of the free world, and the head of our law enforcement and intelligence communities, should mean a greater, not lesser, obligation to adhere to the law by a former president.

The ultimate responsibility for that accountability lies not only with Smith but also with the Attorney General. Under DOJ regulations, the Special Counsel will ultimately need to notify Garland if he determines to charge Trump. That gives the Attorney General the authority to stop the action (triggering reporting requirements to Congress) or to allow it to proceed.

Just as the voters of this country resoundingly pushed back in the 2022 election against candidates attempting to nudge our nation toward autocracy, we expect Smith will do his duty, and ensure the promise of equal justice under law. The analysis in our pros memo points to his recommending charges and Garland accepting that recommendation. We hope that will come sooner rather than later.

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This model prosecution memorandum (or “pros memo”) assesses the potential charges against former President Donald Trump emanating from his handling of classified documents and other government records since leaving office on January 20, 2021. It includes crimes related to the removal and retention of national security information and obstruction of the investigation into his handling of these documents. The authors have decades of experience as federal prosecutors and defense lawyers, as well as other legal expertise. Based upon this experience and the analysis that follows, we conclude that there is a strong basis to charge Trump.

Before indicting a case, prosecutors prepare a pros memo that lays out admissible evidence, possible charges, and legal issues. This document provides a basis for prosecutors and their supervisors to assess whether the case meets the standard set forth in the Federal Principles of Prosecution, which permit prosecution only when there is sufficient evidence to obtain and sustain a prosecution. Before a decision is made about this matter, prosecutors will prepare such a memo.

But such a DOJ memo will be confidential, in part because it will contain information derived through the grand jury and attorney work product. Since that document will not be publicly available, we offer this analysis. Ours is likely more detailed than what DOJ may prepare internally. But, given the gravity of the issues here, our memo provides a sense of how prosecutors will assemble and evaluate the considerations that they must assess before making a prosecution decision.

Our memo analyzes six federal crimes:

Mishandling of Government Documents
1. Retention of National Defense Information (18 U.S.C. § 793(e))
2. Concealing Government Records (18 U.S.C. § 2071)
3. Conversion of Government Property (18 U.S.C. § 641)

Obstruction, False Information, Contempt
1. Obstruction of Justice (18 U.S.C. § 1519)
2. Criminal Contempt (18 U.S.C. § 402)
3. False Statements to Federal Investigators (18 U.S.C. § 1001)

Based on the publicly available information to date, a powerful case exists for charging Trump under several of these federal criminal statutes.

Methodology

In considering prosecution of a former president, we begin with the standard articulated by Attorney General Merrick Garland: “upholding the rule of law means applying the law evenly, without fear or favor.”^[1] In other words, this case must be evaluated for prosecution like any other case with similar evidence would be, without regard to the fact that the case is focused on the conduct of a former president of the United States. This memo accordingly includes a balanced assessment of this particular case, and a thorough review of past DOJ precedents for charging similar cases. Those past cases show that to decline to bring charges against Trump would be treating him far more favorably than other defendants, including those who were charged for less egregious conduct than his. “All Americans are entitled to the evenhanded application of the law,”^[2] Garland has stated, and we are guided by the values underlying those words as well.

This model prosecution memo is, however, limited in an important sense. Throughout the memo, we draw as much as possible on the unusual amount of factual information provided by the government in its court filings. We do not, however, have visibility into the full volume of information the Justice Department has assembled. That means we could be missing important facts, including exculpatory evidence, that may inform DOJ’s decision-making process. We may be unaware of admissibility issues with some of the evidence. And equally true, the evidence could be better or more extensive than what is available in the public record.

What’s more, by necessity, we at times rely on news reports from investigative journalists whereas the actual prosecution memo would instead rely on direct evidence the federal investigators have collected. For that reason, we do not reach an ultimate charging decision. Instead, we stop at noting that there is a strong basis to charge based upon the public record, and that charges would be called for by Department precedent in like cases.^[3] 

The model prosecution memorandum is available below as a SCRIBD file and also as a separate PDF.

Also, to hear more about the memo from some of its co-authors check out the Just Security podcast. A conversation with Andrew Weissmann, Joyce Vance, and Ryan Goodman.

Just Security Mar a Lago Model Prosecution Memorandum November 2022 by Just Security on Scribd

– – – – – – –

1. Department of Justice, Attorney General Merrick Garland Delivers Remarks (Aug. 11, 2022), https://www.justice.gov/opa/speech/attorney-general-merrick-garland-delivers-remarks. ↑
2. Department of Justice, Attorney General Merrick Garland Delivers Remarks (Aug. 11, 2022), https://www.justice.gov/opa/speech/attorney-general-merrick-garland-delivers-remarks. ↑
3. Two of the authors of this model prosecution memo, Norman Eisen and Fred Wertheimer, were among the counsel for amici supporting DOJ’s position in litigation before the U.S. District Court for the Southern District of Florida, and the U.S. Court of Appeals for the Eleventh Circuit, related to the criminal investigation mentioned in this report. For more information, please see (https://democracy21.org/category/news-press/press-releases). ↑

Photo credit: Coolcaesar from Wikimedia Commons

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