United States v. Goldberg
105 F.3d 770 (1997)
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Rule of Law:
For a conspiracy to defraud the United States by interfering with the functions of the IRS under 18 U.S.C. § 371, the requisite purpose to defraud can be inferred from an agreement to file false tax documents as an integral part of the scheme, even if interfering with the IRS is not the conspirators' primary motive.
Facts:
- Richard Goldberg, a businessman, engaged in an intense lobbying effort to oppose the Commonwealth of Massachusetts's plan to take his company's land for a tunnel project.
- From 1990 to 1995, Goldberg employed Robert A. Scopa to organize community opposition, but paid him indirectly.
- Goldberg's company, Liverpool Lumber, issued paychecks to three 'straw' employees who performed no work and gave the money to Scopa, which helped Scopa appear unemployed to collect disability benefits.
- Goldberg's bookkeeper prepared false W-2, W-3, and W-4 forms for the straw employees, which were filed with the IRS.
- To pay a separate debt to lobbyist Vernon Clark, Goldberg arranged for his Park 'N Fly company to pay $20,000 to John Lango's landscaping company for fictitious services in 1991 and 1992.
- The payments to Lango were used to fund an expansion on a beach house for Clark and his mistress, Patricia McNally.
- Goldberg's company filed false 1099-MISC forms with the IRS reporting payments to Lango, which Lango then included on his tax returns, while Clark did not report the income.
Procedural Posture:
- A federal grand jury indicted Richard Goldberg on April 6, 1995, on charges of conspiracy to defraud the United States, aiding the filing of false tax returns, and mail fraud.
- Goldberg moved to dismiss the indictment on grounds of selective prosecution, but the district court denied the motion without an evidentiary hearing.
- Goldberg waived his right to a jury trial and proceeded with a bench trial in the United States District Court.
- The district court found Goldberg guilty of the conspiracy and false tax return charges but acquitted him of the mail fraud charges.
- The district court sentenced Goldberg to a ten-month sentence, departing downward from the sentencing guidelines.
- Goldberg, the appellant, appealed his convictions and sentence to the United States Court of Appeals for the First Circuit.
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Issue:
Does an agreement to file false tax documents as an integral part of a scheme, by itself, suffice to establish the requisite 'purpose' to interfere with IRS functions for a conviction of conspiracy to defraud the United States under 18 U.S.C. § 371?
Opinions:
Majority - Boudin, Circuit Judge
Yes. An agreement between conspirators to file false tax documents to misstate or misattribute income can be so clearly and proximately an interference with IRS functions that a factfinder may infer a purpose to defraud the government. The court reasoned that while conspiracy to defraud requires a 'purpose' to interfere with a government function, and not just a foreseeable consequence, this purpose need not be the primary objective of the scheme. The court rejected Goldberg's argument that the purpose must be either to primarily evade taxes or to conceal another crime. Instead, where the very acts agreed upon include the filing of false income-related tax documents, a factfinder can equate the purpose to file such documents with the purpose to interfere with the IRS. Here, the creation and filing of false W-2s and 1099s were integral and self-evident parts of both the Scopa and Clark schemes, allowing the inference that Goldberg and his co-conspirators shared a common purpose to interfere with IRS functions.
Analysis:
This decision clarifies the 'purpose' element for a conspiracy to defraud the United States under 18 U.S.C. § 371, often called a 'Klein' conspiracy. By allowing a factfinder to infer a purpose to defraud the IRS from the act of agreeing to file false tax documents, the court lowers the evidentiary bar for the government. Prosecutors no longer need to prove a defendant's subjective primary intent was to impede the IRS, but can instead point to the mechanics of the scheme itself. This broadens the statute's reach to encompass many financial crimes where false tax reporting is a necessary component but not the ultimate goal, blurring the doctrinal line between a purpose and a foreseeable effect in this context.
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