United States v. Amos P. Brown, Sr.
1 Fed. R. Serv. 847, 39 A.F.T.R.2d (RIA) 1138, 548 F.2d 1194 (1977)
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Rule of Law:
An expert witness's summary testimony regarding the results of an investigation is inadmissible hearsay if the expert's conclusions are necessarily based on the substance of out-of-court statements from non-testifying third parties. Evidence of other crimes or wrongs is not admissible under F.R.E. 404(b) unless the underlying acts are proven by competent, non-hearsay evidence.
Facts:
- Amos P. Brown, Sr., a school teacher who had taken an H&R Block course, began preparing income tax returns for friends and neighbors in 1970.
- His clients were generally individuals with low incomes and limited formal education.
- In preparing the returns, Brown relied on written and oral information provided by the taxpayers and rarely, if ever, independently verified this information.
- In 1973, the Internal Revenue Service (IRS) conducted an audit of approximately 163 tax returns prepared by Brown.
- The audit revealed that a significant number of these returns contained substantially overstated deductions.
- The government selected 17 of these audited returns to serve as the basis for a criminal prosecution against Brown for preparing fraudulent returns.
Procedural Posture:
- The United States filed a 17-count indictment against Amos P. Brown, Sr. in federal district court for willfully aiding the preparation of fraudulent tax returns.
- At trial, after the government presented its case, the district court directed a verdict of acquittal on five of the counts.
- A jury convicted Brown on the remaining 12 counts.
- The district court sentenced Brown to concurrent prison terms followed by probation.
- Brown filed post-trial motions for a judgment of acquittal and for a new trial, both of which the district court denied.
- Brown (Appellant) appealed his conviction to the United States Court of Appeals for the Fifth Circuit.
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Issue:
Does the admission of an IRS agent's summary testimony, which states that 90-95% of other tax returns prepared by the defendant were fraudulent, constitute inadmissible hearsay when the agent's conclusion is necessarily based on out-of-court statements from the non-testifying taxpayers whose returns were audited?
Opinions:
Majority - Chief Judge John R. Brown
Yes, the admission of the IRS agent's summary testimony constitutes inadmissible hearsay. The agent's testimony, offered to prove the defendant's willful intent, was fundamentally based on the out-of-court statements of non-testifying taxpayers. Agent Peacock testified that 90-95% of some 160 returns prepared by Brown contained overstated deductions. Her conclusion that the deductions were overstated could not have come from the face of the returns themselves; it must have been derived from conversations with the individual taxpayers about their actual expenses. Because her testimony's value depended on the truth of these out-of-court statements, and the defendant had no opportunity to cross-examine those taxpayers, the testimony was inadmissible hearsay under F.R.E. 801. Furthermore, the testimony was inadmissible as 'other crimes' evidence under F.R.E. 404(b) because the underlying 'crimes'—the fraudulent nature of the other returns—were not proven by competent, admissible evidence, but only by this hearsay. The admission of this highly prejudicial testimony was a plain error affecting the defendant's substantial rights, thus requiring a reversal of the conviction and a new trial.
Dissenting - Judge Gee
No, the agent's testimony was not inadmissible hearsay. Agent Peacock was an expert witness testifying from her personal knowledge about the results of tax audits she herself conducted, not merely repeating out-of-court statements. Under F.R.E. 703, an expert is permitted to base an opinion on facts or data, including conversations with taxpayers, that are 'of a type reasonably relied upon by experts in the particular field,' even if the data itself is not admissible. Moreover, defense counsel opened the door to this testimony and failed to object, meaning it cannot be considered 'plain error.' The testimony was highly probative of the defendant's intent and admissible under F.R.E. 404(b), and its probative value was not substantially outweighed by prejudice under F.R.E. 403. The majority's holding improperly creates a new category of 'implied hearsay' and threatens the ability of auditors and other professionals to provide expert testimony about their findings.
Analysis:
This case establishes an important limitation on the use of expert and summary testimony, particularly in criminal cases. It clarifies that an expert witness cannot be used as a conduit to introduce the substance of testimonial hearsay from numerous out-of-court declarants, thereby circumventing the defendant's right to confrontation. The decision reinforces the principle that evidence of 'other crimes' under F.R.E. 404(b) must be established by competent proof, not by conclusory statements founded on inadmissible hearsay. The dissent highlights a key tension with F.R.E. 703, which allows experts to rely on inadmissible data, creating an ongoing debate about the boundary between an expert's permissible opinion and the improper introduction of underlying hearsay.
