A Deliberate or Willful Blindness Jury Instruction Is Rarely a Good Sign for a Criminal Tax Defendant

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A Deliberate or Willful Blindness Jury Instruction Is Rarely a Good Sign for a Criminal Tax Defendant

defendant with lawyer speaking to a judge in the courtroom trial

defendant with lawyer speaking to a judge in the courtroom

Recently on the Federal Tax Crimes blog, the tax fraud case of Happy Asker was analyzed in the context of the willful blindness jury instruction given at trial. On this tax law blog, we have previously written about the case of Happy Asker, the former owner of Happy’s Pizza. The last time we assessed Mr. Asker’s case, he was convicted on 32 counts of tax and related criminal charges including allegations that he engaged in a conspiracy to defraud the government, filed false income tax returns, and obstructed the administration of the U.S. Tax Code.

While the situation originally faced by Mr. Asker was fraught with legal danger, the path that his trial took revealed the danger that taxpayers who face a willful blindness jury instruction must contend with. That is, individuals who face a willful or deliberate blindness instruction as part of their matter’s jury instructions face an uphill battle when attempting to clear their name.

The Scenario that Led to Criminal Tax Charges Faced by Happy Asker

Happy Asker was one of the owners of a successful pizza chain known as Happy’s Pizza.  At some point, a credible tip alleging drug activity in the organization was made to the DEA. The DEA began an investigation which ultimately culminated in the issuance of a wiretap and search warrant which revealed an array of improper tax actions including income tax fraud and payroll tax fraud. Fraudulent and improper actions revealed by the investigation included keeping multiple sets of books, under-reporting gross sales receipts, and understating payroll. The tax charges Mr. Asker was convicted of were:

  • 28 counts of aiding and assisting the filing of false tax returns
  • 3 counts of filing false returns
  • 1 count of obstructing the administration of the U.S. Tax Code

In all, Mr. Asker was sentenced to serve 50 months in prison, three years of supervised release, and additional penalties.

The Danger of Willful Blindness Jury Instructions at Trial and at Appeal

At trial, Mr. Asker faced jury instructions that included instructions regarding the defendant’s alleged willful blindness. The jury instructions contained language stating that:

No one can avoid responsibility for a crime by deliberately ignoring the obvious. If you are convinced that the defendant deliberately ignored a high probability that the returns at issue that the defendant filed or aided or assisted in filing were false, then you may find that the defendant knew that they were false. 

Generally, a jury must be convinced beyond a reasonable doubt that the defendant’s willful blindness or other acts were to preserve ignorance of the law. Despite the apparent preservation of a “beyond a reasonable doubt” standard, the willful blindness standard does introduce certain problems for a tax defendant.

As identified by Judge Posner, the willful blindness instruction can serve to “allow juries to convict upon a finding of negligence for crimes that require intent.”  U.S. v. Giovannetti, 919 F.2d 1223, 1230 (7th Cir. 1990). However, there is a significant question regarding whether a person merely does not have knowledge of criminal endeavors or whether they expend resources and take steps intended to avoid learning about the crime. These issues are often fraught with confusion and in the context of allegations of criminal conduct, it can be easy for the charges and allegations to color a jury’s interpretations of an individual’s actions or inactions.

Beyond the difficulties that can exist at trial, the presence of deliberate blindness instructions can also pose problems at appeal. In Mr. Asker’s appeal, he challenges the propriety of the willful blindness instruction. Asker raised a number of issues including that fact that the jury instruction diluted the government’s burden of proof and that the factual scenario could not constitute willful blindness. The court dismissed this argument and further found that the harmless error doctrine applied. Under the harmless error doctrine, “a deliberate ignorance instruction that properly states the law is harmless error.” United States v. Rayborn, 491 F.3d 513, 520-21 (6th Cir. 2007). Furthermore, courts will affirm convictions provided that “sufficient evidence supports one of the grounds for conviction” on each count.” Ibid.

Facing Accusations of Willful Blindness?

If you failed to review tax returns before submitting them to the IRS or otherwise are facing allegations that you intentionally avoided learning about improper or illegal conduct, the tax lawyers of The Tax Law Offices of David W. Klasing may be able to fight for you. To schedule a reduced rate initial consultation, call our Orange County or Los Angeles law offices.