United States v. Gorman
1987 U.S. Dist. LEXIS 12788, 674 F.Supp. 1401, 1987 WL 24407 (1987)
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Rule of Law:
Under 18 U.S.C. § 3143(b), a convicted defendant will be detained pending appeal unless the defendant proves by clear and convincing evidence that they are not a flight risk or danger, and proves by a preponderance of the evidence that the appeal raises a substantial question of law or fact likely to result in reversal or a new trial.
Facts:
- Multiple individuals, including Gorman, Hawley, and Emond, conspired to conceal income from the IRS.
- They promoted and operated so-called 'warehouse banks' in Minnesota, South Dakota, and Colorado as a way to conduct financial affairs without creating traditional records.
- Depositors were told their financial transactions would remain private and anonymous.
- The banks did not maintain records of depositors' names and regularly destroyed records of deposits and withdrawals, which were conducted using code numbers.
- These warehouse banks processed millions of dollars in transactions each month.
Procedural Posture:
- Defendants were charged by indictment with conspiring to defraud the IRS under 18 U.S.C. § 371.
- A four-week jury trial was conducted in the United States District Court.
- All six defendants were convicted of the charges.
- Following their conviction, all six defendants were ordered confined.
- Four of the convicted defendants then filed motions in the District Court for release pending appeal.
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Issue:
Do convicted defendants who conspired to defraud the IRS meet the statutory requirements for release pending appeal under 18 U.S.C. § 3143(b)?
Opinions:
Majority - Devitt, District Judge
No. The defendants failed to meet their burden to be granted release pending appeal. To secure release under 18 U.S.C. § 3143(b), a defendant must satisfy a two-part test. First, they must show by clear and convincing evidence that they are not likely to flee or pose a danger to others. Second, they must show by a preponderance of the evidence that the appeal is not for delay and raises a substantial question of law or fact likely to result in reversal or a new trial. The court found that the defendants failed to satisfy either prong. The court then examined the defendants' proposed issues for appeal—including suppression of evidence, denial of counsel of choice, severance, and jury instructions—and concluded that none of them presented a 'substantial question,' which is defined as a 'close question' under the controlling precedent of U.S. v. Powell. As the defendants failed to demonstrate that their appeals raised any meritorious issues likely to lead to reversal, their motions for release were denied.
Analysis:
This order provides a clear application of the stringent standards for post-conviction release under the Bail Reform Act of 1984. It demonstrates that the burden is entirely on the defendant to satisfy a demanding two-part test. The decision highlights that merely identifying potential grounds for appeal is insufficient; the defendant must persuade the court that these issues are 'substantial' or 'close' questions, meaning they have a genuine chance of success. This case serves as a practical guide for how district courts evaluate the merits of an appeal when deciding on bail, effectively requiring a preliminary assessment of the appeal's strength.
