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United States v. Sorensen

United States District Court, D. Colorado

February 14, 2014

UNITED STATES OF AMERICA, Plaintiff,
v.
1. JEROLD R. SORENSEN, Defendant.

ORDER DENYING MOTION (ECF NO. 4)

RAYMOND P. MOORE, District Judge.

THIS MATTER is before the Court on Defendant Jerold R. Sorensen's Motion to Dismiss for Improper Venue or, in the alternative, to Transfer the Case to the United States District Court for the Eastern District of California (ECF No. 4). The Court held a hearing on January 17, 2014, where counsel presented oral argument and additional facts for consideration which the parties represented are largely undisputed. In addition, as allowed by the Court, on January 24, 2014, Defendant submitted in camera a supplement identifying potential defense witnesses located in California. Upon consideration of the Motion and the Court's file, argument of counsel, and the applicable law, the Motion is denied for the reasons stated herein.

I. BACKGROUND

A two count indictment was returned against Defendant in Denver, Colorado but he resides in Fresno, California, thereby prompting the motion before this Court. Count 1 of the indictment charges that Defendant "in the State and District of Colorado and elsewhere" did "corruptly endeavor to obstruct and impede the due administration of the Internal Revenue laws, and did aid and abet the same, " in violation of 26 U.S.C. § 7212(a) and 18 U.S.C. § 2. Here, Defendant, a dentist and oral surgeon, is alleged to have retained the services of E.M.S., an attorney in Denver, Colorado, to assist with a tax avoidance scheme. Among other things, Defendant and E.M.S. opened an account at a Colorado bank under the name of Northside Management, an unincorporated business organization with a Colorado address, where both had signatory authority. Defendant is asserted to have used Northside, along with fictitious entities called Pure Trust Organizations ("PTOs"), to hide his income and assets by, for example, issuing checks from his dental practice's account payable to the PTOs (and deducting such payments on his business's federal income tax returns), and by having his renters issue checks payable to the PTOs (and avoid the appearance of income to him). The checks to the PTOs were mailed to Colorado and deposited into the Northside account, where the funds were then used to pay Defendant's personal expenses in California and Utah. Defendant paid for E.M.S.'s assistance through cash payments mailed to Colorado.

Count 2 of the indictment charges that Defendant "in the State and District of Colorado and elsewhere" "corruptly endeavored to influence, obstruct, and impeded the due administration of justice, " in violation of 18 U.S.C. § 1503. Essentially, Defendant is alleged to have attempted to obstruct a federal criminal investigation in Colorado by mailing, or causing to be mailed, various documents to Colorado. Defendant is also charged with locking his California office to prevent entry by IRS Special Agents who were attempting to serve Defendant with orders to compel production of documents requested in earlier grand jury subpoenas, and with failing to comply with such orders, which were issued by Judge John L. Kane of this District.

II. ANALYSIS

A. Venue in the District of Colorado.

"The defendant's right to proper venue has explicit constitutional roots in Article III, § 2, cl. 3, which requires that the trial of any crime be held in the state in which the crime was committed, ' and in the Sixth Amendment, which guarantees trial by a jury of the state and district in which the crime was committed.'" United States v. Miller, 111 F.3d 747, 749 (10th Cir. 1997) (citation omitted). Such requirements are addressed in Fed.R.Crim.P. 18, which provides that, unless a statute or the Federal Rules of Criminal Procedure provide otherwise, an offense must be prosecuted in "a district where the offense was committed." The burden is on the government to prove venue is proper by a preponderance of the evidence. United States v. Miller, supra at 749-750. That burden applies to each count in the indictment. United States v. Davis, 689 F.3d 179, 185 (2d Cir. 2012); United States v. Blechman, 782 F.Supp.2d 1238, 1245 (D.Kan. 2011).

1. Venue under Count 1.

Pursuant to 18 U.S.C. § 3237(a), except as otherwise provided by Congress, "any offense against the United States begun in one district and completed in another, or committed in more than one district, may be inquired of and prosecuted in any district in which such offense was begun, continued, or completed." Here, the charge is corruptly endeavoring to obstruct and impede the administration of the Internal Revenue laws by hiding income and assets. As charged, Defendant's endeavor to obstruct arguably began in California but then continued into Colorado with the engagement of E.M.S., the opening of the Northside bank account, and the subsequent transfers into and out of such account. Accordingly, the offense may be prosecuted in the District of Colorado.

Defendant argues there is a difference between endeavoring to obstruct justice and obstructing justice. This Court agrees a distinction exists but finds the cases Defendant relies on do not support the conclusion that his endeavor was one which was begun and completed - or occurred - solely in California.

For example, Defendant relies on the concurring opinion in United States v. Swann, 441 F.2d 1053 (D.C.Cir. 1971), which concurred with the reversal of defendant's conviction in the District of Columbia, because the offense was begun, carried out and completed in Maryland as that was where defendant injured and endeavored to influence the witness by shooting her, even though she was a witness in proceedings in the District of Columbia. Similarly, in United States v. Marsh, 144 F.3d 1229 (9th Cir. 1998), the Ninth Circuit set aside defendants' convictions in the Northern District of California for corruptly endeavoring to obstruct the administration of the income tax laws by filing liens in Nevada and Washington, against government officers located in the Northern and Eastern Districts of California. That court stated "the crime of endeavoring to impede the IRS is complete when the endeavor is made.... No effect need be proved. The filing of the lien is the crime." Id. at 1242.

Unlike Swann and Marsh, in this case the endeavor charged was not a single act, e.g., the shooting of a witness or the filing of liens, which began and was completed in one district. Instead, as stated in Count 1, Defendant's endeavor to obstruct consisted of an interrelated series of acts taken in California and Colorado. As stated by the court in United States v. Strawberry, 892 F.Supp. 519 (S.D.N.Y. 1995), upon which the government relies, the offense of "attempt to evade" tax can occur over time and in more than one judicial district and, therefore, be a "continuing offense" within the meaning of 18 U.S.C. § 3237(a). Id. at 521. This statement is equally true for the offense of "endeavoring" to obstruct.

Moreover, the government's potential reliance on 18 U.S.C. § 2 further supports the propriety of a determination that venue lies in this District. If, as the indictment alleges, Defendant aided and abetted the endeavor to obstruct the due administration of the Internal Revenue laws, then he is exposed to prosecution in this District on the basis of that relationship. "[A]n aider and abettor may be punished as a principal, and hence he may be punished in the same district as the principal." United States v. Jackson, 482 F.2d 1167, 1179 (10th Cir. 1973). Defendant does not contend that venue as against E.M.S. would be ...


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