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United States of America v. Donald Turner

May 1, 2013

UNITED STATES OF AMERICA
v.
DONALD TURNER, A/K/A DON L. WOOD DONALD TURNER, APPELLANT.



Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Criminal No. 1-01-cr-00006-003) District Judge: Honorable Maurice B. Cohill

The opinion of the court was delivered by: Rendell, Circuit Judge.

PRECEDENTIAL

Argued January 8, 2013

Before: RENDELL, FISHER and JORDAN, Circuit Judges

OPINION OF THE COURT

Donald Turner, a.k.a. Don Wood, was convicted by a jury of one count of conspiracy to defraud the United States in violation of 18 U.S.C. § 371. The District Court sentenced Turner to 60 months‟ imprisonment and three years of supervised release. In addition, it ordered Turner to pay $408,043 in restitution to the Government under 18 U.S.C. § 3663. Turner appeals his conviction and sentence. He asserts that the District Court erred in admitting (1) recorded conversations between his co- conspirator and an undercover Internal Revenue Service ("IRS") agent and (2) foreign bank documents that the IRS seized from his co-conspirator‟s residence and office. Turner also argues that the District Court erred in requiring him to pay $408,043 in restitution because it did not make findings regarding his ability to pay. For the reasons discussed below, we will affirm.

I.

A. Factual Background

Turner is the author of Tax Free! How the Super Rich Do It!--a book that instructed readers how to "escape federal and state income taxation" through the use of common law trust organizations ("colatos"). (App. 384.)

He is also the former director of First American Research ("FAR"), a membership organization that he created to assist members in implementing the colato program described in his book.

In 1991, Turner enlisted Daniel Leveto, the owner of a veterinary clinic, as a new FAR member, and Turner then assisted Leveto in implementing the colato program. FAR created Center Company, a foreign colato, and appointed Leveto as the general manager and Turner as a consultant. Leveto then "sold" his clinic to Center Company, which in turn "hired" Leveto as the clinic‟s manager.

After the sale, Leveto continued to control and operate the clinic just as he did when he was the owner. But because the clinic was no longer in his name, Leveto stopped reporting the clinic‟s income on his individual tax returns, and consequently paid no taxes on the clinic. Center Company, which was now responsible for reporting the clinic‟s income, also did not pay the clinic‟s taxes because it distributed the clinic‟s income to other foreign colatos, which according to Turner, "transformed" it to untaxable foreign source income. Thus, no one paid the clinic‟s taxes.

Although the clinic‟s taxes went unpaid, Leveto had full access to the clinic‟s income through various sources, including foreign and domestic bank accounts, nominee foreign and domestic bank accounts, commodity accounts, loans from the colatos, and debit and credit cards opened under the colatos‟ names.

In 1993, Leveto and Turner executed a written agreement for Leveto to market and sell Tax Free!. Leveto purchased each book from Turner for $637.50 and agreed to sell the books for at least $1,275 each. In 1995, the IRS began a criminal investigation into Leveto to determine whether Leveto‟s sale of his veterinary clinic was legitimate, and whether the colato program was valid. As part of the investigation, Manuel Gonzalez, an undercover IRS agent, purchased Tax Free! from Leveto. After Gonzalez purchased the book, he and Leveto spoke about the program several times both in person and on the phone. Leveto informed Gonzalez about the benefits of the colato program and encouraged him to attend a FAR membership meeting to better understand how the program worked. Several of these conversations were recorded and introduced as evidence at Turner‟s trial.

In addition, Leveto submitted Gonzalez‟s name to Turner as a qualified FAR member, who, in response, sent Gonzalez a letter explaining the benefits of FAR and enclosing a membership application. Turner also spoke with Gonzalez on the phone about the colato program and FAR membership.

The investigation into Leveto‟s dealings with Turner also involved the search of Leveto‟s residence and office. IRS agents seized a large volume of documents and records from both locations, including from safes inside Leveto‟s office. The documents included Leveto‟s foreign and domestic bank records, his handwritten notes that referenced FAR, colatos, and Tax Free!, correspondence with Turner, evidence relating to Leveto‟s nominee accounts, and correspondence with banks, including wire transfer requests. Many of these documents were introduced at Turner‟s trial.

B. Procedural History

In 2001, a federal grand jury charged Turner, Leveto, and Leveto‟s wife, Margaret Leveto, with conspiracy to defraud the IRS by concealing the Levetos‟ assets, and thus, preventing the IRS from computing and collecting the Levetos‟ federal income taxes in violation of 18 U.S.C. § 371. Before trial, Turner filed a motion in limine to exclude several pieces of evidence, including (1) the recorded conversations between Leveto and Gonzalez, and (2) the foreign bank records that the IRS seized from Leveto‟s office and residence. Turner argued that both were inadmissible hearsay and that the Government failed to properly authenticate the foreign bank documents. The District Court disagreed and held them to be admissible.

The District Court admitted the recorded conversations under Federal Rule of Evidence 801(d)(2)(E), which states that a statement is not hearsay if it is offered against an opposing party and "was made by the party‟s coconspirator during and in furtherance of the conspiracy." It concluded that there was an unindicted conspiracy between Leveto and Turner to impede or impair the IRS‟s tax collection efforts by recruiting members to FAR, which worked with members in concealing their income from the IRS, and that Leveto‟s statements to Gonzalez furthered that conspiracy.*fn1 The District Court held that the Government properly authenticated the foreign bank documents and admitted documents bearing Leveto‟s signature or handwriting under Federal Rule of Evidence 801(d)(2)(E). It admitted the rest of the contested documents under the residual hearsay exception.

The jury convicted Turner of conspiracy. The District Court sentenced Turner to 60 months‟ imprisonment and three years of supervised release. In addition, applying 18 U.S.C. § 3663, the District Court ordered Turner to pay $408,043 in restitution, the full amount of the ...


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