of Criminal Procedure. In the alternative, defendants ask that the court use its discretion under Rule 14 of the Federal Rules of Criminal Procedure to sever the counts because of the possibility of prejudice to defendants.
A. Rule 8(b)
As recognized by defendants, but not by the government, it has long been held in this circuit that "'the propriety of joinder in cases where there are multiple defendants must be tested by Rule 8(b) alone and . . . Rule 8(a) has no application.' . . . Thus in this case of multiple defendants, even where the joinder of counts is at issue, Rule 8(b) applies." United States v. Brown, 305 U.S. App. D.C. 1, 16 F.3d 423, 427 (D.C. Cir. 1994)(citing United States v. Jackson, 183 U.S. App. D.C. 270, 562 F.2d 789, 794 (D.C. Cir. 1977). See also United States v. Halliman, 287 U.S. App. D.C. 380, 923 F.2d 873, 883 (D.C. Cir. 1991). Therefore, for offenses to be properly joined the offenses must belong to the same act or transaction or in the same series of acts or transactions." Fed. R. Crim. P. 8(b).
The court has no trouble concluding that all of the charged offenses are in the same series of acts or transactions. Counts twenty-three and twenty-four charge the defendants with conspiracy to defraud financial institutions and with bank fraud. Despite the attempts of defendants to characterize these charges as unrelated, the very same conduct forms the basis of these two charges and the tax conspiracy and substantive charges. Taking the case as a whole, the government has alleged that defendants ran a tax preparation business where the activity centered around the filing of false tax returns with both the IRS and different mortgage lenders. For these allegedly illegal activities, defendants were able to charge their clients higher fees for their services. Hence, the alleged overall scheme involved the preparing of false tax returns for financial reward.
Because of this, the court has no problem concluding that there exists a "logical relationship between the acts or transactions," United States v. Perry, 235 U.S. App. D.C. 283, 731 F.2d 985, 989 (D.C. Cir. 1984), evidenced by "a consistent, logically interlocked set of goals." United States v. Hubbard, 474 F. Supp. 64, 86 (D.D.C. 1979). The consistent goal of the alleged scheme was financial reward through the preparation of false tax returns, without question a logically connected enterprise.
Similarly, counts twenty-five through twenty-eight charge Singh with filing of false tax returns for himself and his wife and counts twenty-nine and thirty charge Washington with failure to file tax returns. As recognized even by defendants, the charges involve the income earned by each defendant as a result of the alleged criminal activities at Protax. Courts have recognized that counts charging individual defendants with tax evasion can be properly joined under Rule 8(b) when the revenue on which the tax was evaded resulted from the criminal conduct charged in the non-tax counts. United States v. Biaggi, 909 F.2d 662, 676 (2nd Cir. 1990). Therefore, defendants' joint motion is denied.
B. Rule 14
The court will not exercise its discretion to sever any of the counts from the tax conspiracy and substantive charges. Rule 14 provides that "if it appears that a defendant or the government is prejudiced by a joinder of offenses or of defendants in an indictment or information or by such joinder for trial together, the court may order an election or separate trials of counts, grant a severance of defendants or provide whatever other relief justice requires." Fed. R. Crim. P. 14.
The Supreme Court has recognized a preference in the federal system for joint trials of defendants indicted together for reasons of efficiency and the promotion of consistent verdicts. Zafiro v. United States, 506 U.S. 534, 537, 122 L. Ed. 2d 317, 113 S. Ct. 933 (1993). Thus, the Supreme Court held that a district court should grant a severance "only if there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence." 113 S. Ct. at 938. Often, even if there is a chance of prejudice, other options besides severance, for example limiting instructions, will cure any problems. Id.
Defendants focus their request for a severance under Rule 14 on the assertion that the jurors may cumulate and corroborate the evidence from the tax conspiracy and substantive charges with the bank fraud and conspiracy to defraud financial institutions charges. The court rejects this assertion for several reasons. First, the court believes that defendants failed to demonstrate why the evidence will confuse a jury. While many counts are involved, this alone is not sufficient to reach the conclusion that the jurors will cumulate the evidence. The fact that the counts are related, and the underlying conduct the same, does not mean that cumulation will necessarily occur. Here, the counts are distinct, and the court believes the government's evidence will be both simple and distinct. Baker v. United States, 131 U.S. App. D.C. 7, 401 F.2d 958, 974 (D.C. Cir. 1968). Furthermore, defendants have completely failed to demonstrate why limiting instructions to the jury will not cure any potential problems. Jurors are presumed to follow the instructions of the court, and as stated above, the Supreme Court has recognized that in most cases, instructions will cure any possible harm. Defendants fall far short of establishing that this is not a case in which instructions will suffice.
Additionally, defendants' argument is necessarily premised upon a belief that the evidence of the different charges would not be allowed in at separate trials. Although a definitive ruling on 404(b) evidence is not appropriately made at this time, the court finds it most likely that the evidence of the different offenses would be admissible at the separate trials for the purposes of proving intent, plan, and knowledge. Fed. Rule of Evid. 404(b).
Finally, defendants state very briefly that they may wish to testify regarding only certain allegations and not others. This hesitant assertion is not adequate to demonstrate that lack of a severance will compromise a specific trial right of either defendant. In order to receive a severance because of a desire to testify, a defendant must present the trial court with "enough information--regarding the nature of the testimony he wishes to give on one count and his reasons for not wishing to testify on the other--to satisfy the court that the claim of prejudice is genuine." Baker, 401 F.2d at 977. Defendant Washington has been provided a copy of his redacted statement, and has been in a position to make a decision on whether or not to testify.
Therefore, the court finds that defendants have failed to carry their burden of showing why the court should exercise its discretion under Rule 14. For this reason, the motions to sever are denied.
VIII. Defendant Washington's Motion for a Change in Venue
Washington has moved this court to dismiss counts twenty-nine and thirty for lack of venue. Counts twenty-nine and thirty charge Washington with failure to file individual federal income taxes in violation of 28 U.S.C. § 7203. According to defendant, Washington resides in the District of Columbia and was required to file tax returns in either Baltimore, Maryland or at the Philadelphia, Pennsylvania Service Center. Thus, any resulting crime from failing to file was committed in either the judicial district for Baltimore, Maryland or Philadelphia, Pennsylvania.
Defendant Washington, however, is wrong. The case law since the Treasury regulations were amended to provide for filing by hand-carrying of returns to a "local office constituting a permanent post of duty within the internal revenue district of such director," Treas. Reg. § 1.6091-2(d); T.D. 7495 (Jun. 29, 1977), consistently holds that venue is proper in the residence of the taxpayer. United States v. Hicks, 947 F.2d 1356, 1360-61 (9th Cir. 1991); United States v. Garman, 748 F.2d 218, 219-221 (4th Cir. 1984), cert. denied, 470 U.S. 1005, 84 L. Ed. 2d 382, 105 S. Ct. 1361 (1985). As pointed out by the government, three of the cases relied upon by Washington predate the 1977 amendments. The fourth case affirms the conclusion of this court by observing that "failure to file a tax return is an offense either at the defendant's place of residence, or at the collection point where the return should have been filed." United States v. Clinton, 574 F.2d 464, 464 (9th Cir. 1978). Thus, defendant Washington's motion is denied.
For the stated reasons, each of defendants' motions is denied. A separate order shall issue today.
Royce C. Lamberth
United States District Judge