USA v. Latosha Shuron Madison

FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
NOVEMBER 14, 2011
JOHN LEY
CLERK
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 11-10415
Non-Argument Calendar
________________________
D.C. Docket No. 2:10-cr-00054-KOB-PWG-1
UNITED STATES OF AMERICA,
llllllllllllllllllllllllllllllllllllllll Plaintiff-Appellee,
versus
LATOSHA SHURON MADISON,
llllllllllllllllllllllllllllllllllllllll Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
________________________
(November 14, 2011)
Before MARCUS, MARTIN and FAY, Circuit Judges.
PER CURIAM:
Latosha Madison appeals her conviction for assisting in the preparation of a
false tax return, in violation of 26 U.S.C. § 7206(2). On appeal, Madison argues
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that the government violated her due process rights by destroying the 2001 and
2002 tax returns of her former clients, whose 2003 and 2004 returns she was
charged with falsifying. She contends that the 2001/2002 returns were material to
her defense, that no comparable evidence was available, and that the government
acted in bad faith by destroying those documents. For the reasons stated below,
we affirm.
I.
In 2005, the IRS commenced a tax fraud investigation into Madison and her
tax preparation business. As part of the investigation, IRS agents interviewed
Madison and many of her clients. One of the clients, T.W., told the agents that he
had no knowledge about several deductions and exemptions contained in his 2004
tax return. In 2007, Madison retained an attorney to represent her, and in
September 2009, before any indictment had been issued, Madison and her lawyer
met with an Assistant U.S. Attorney and the investigating agents to discuss a
possible plea agreement. During the meeting, Madison was allowed to review the
memoranda of interviews conducted by the IRS agents with her former clients.
Madison told the government that it would be difficult to prove that she had
falsified her clients’ returns, given that they had been filing the same way in the
past. However, Madison did not request her clients’ pre-2003 tax returns and did
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not ask to preserve those returns, either at the meeting or at any time prior to the
meeting.
In February 2010, a federal grand jury issued a 28-count indictment against
Madison, charging her with entering false information on the 2003 or 2004 tax
returns of her clients. The indictment listed a total of 17 taxpayers whose 2003 or
2004 returns were allegedly falsified. Count 21 of the indictment charged that
Madison falsified the 2004 tax return of T.W. by claiming false charitable
contributions, employee business expenses, and education credits.
Subsequently, Madison requested from the government, among other things,
the 2001 and 2002 tax returns of the taxpayers listed in the indictment. The
government responded that the 2001/2002 returns had been destroyed by the IRS
in accordance with its record-keeping policy, which mandated destruction of tax
returns six years after the end of the processing year. The government stated that
only “transcripts” or summaries of these returns were currently available and that
such transcripts contained some, but not all, of the information typically found in
tax returns.
Madison filed a motion to dismiss the indictment, arguing that the
government violated her due process rights by destroying the 2001/2002 returns,
as those returns constituted exculpatory and impeachment evidence. She
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contended, among other things, that the 2001/2002 returns would have shown that
her clients had filed the same deductions and exemptions in 2001 and 2002 as they
had in 2003 and 2004. At the hearing on the motion, the government stated that
the 2001 tax returns were probably destroyed in January 2009, while the 2002
returns were likely destroyed in January 2010, approximately one month before
Madison was indicted. The government also stated that it had not looked at the
2001/2002 returns of the taxpayers listed in the indictment. The government
submitted a declaration of the lead investigating agent in Madison’s case, who
stated that, if he had reviewed any 2001/2002 returns during the investigation, he
would have made these returns available to Madison.
The district court denied Madison’s motion to dismiss. It found, in
pertinent part, that the 2001/2002 returns had no apparent exculpatory value and
that the government did not act in bad faith by destroying them. Afterwards,
Madison entered into a plea agreement with the government and pleaded guilty to
Count 21 of the indictment in return for the dismissal of all other counts. As part
of the plea agreement, Madison expressly reserved her right to appeal the district
court’s denial of her motion to dismiss.
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II.
Whether the government’s destruction of evidence resulted in a due process
violation is a mixed question of law and fact. United States v. Revolorio-Ramo,
468 F.3d 771, 774 (11th Cir. 2006). We review the district court’s legal
conclusions de novo and its factual findings for clear error. Id.
To show a due process violation stemming from the government’s
destruction or loss of evidence, “the defendant must show that the evidence was
likely to significantly contribute to [her] defense.” Id. (quotation omitted). “To
meet this standard of constitutional materiality, evidence must both possess an
exculpatory value that was apparent before the evidence was destroyed, and be of
such a nature that the defendant would be unable to obtain comparable evidence
by other reasonably available means.” United States v. Brown, 9 F.3d 907, 910
(11th Cir. 1993) (quoting California v. Trombetta, 467 U.S. 479, 489, 104 S.Ct.
2528, 2534, 81 L.Ed.2d 413 (1984)). If the destroyed evidence was not clearly
exculpatory but only “potentially useful,” a defendant must show that the
government acted in bad faith. Arizona v. Youngblood, 488 U.S. 51, 57-58, 109
S.Ct. 333, 337, 102 L.Ed.2d 281 (1988); Illinois v. Fisher, 540 U.S. 544, 547-49,
124 S.Ct. 1200, 1202-03, 157 L.Ed.2d 1060 (2004).
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As an initial matter, Madison was convicted only on Count 21 of the
indictment, which charged her with falsifying the 2004 tax return of T.W.
Accordingly, we review the alleged due process violation only with regard to that
count.
Because, aside from Madison’s allegations, nothing in the record indicates
what T.W.’s 2001/2002 tax returns actually contained, those returns were not
materially exculpatory, but at most “potentially useful.” See Youngblood, 488
U.S. at 56 n.*, 109 S.Ct. at 336 n.* (stating that, where the government had failed
to preserve or test semen samples found on the victim’s clothing, the “possibility
that the semen samples could have exculpated respondent if preserved or tested is
not enough to satisfy the standard of constitutional materiality”). Therefore,
Madison could only establish a due process violation if she showed that the
government acted in bad faith in destroying the 2001/2002 tax returns. See id.
at 57-58, 109 S.Ct. at 337.
Madison has failed to establish bad faith. Notwithstanding her arguments to
the contrary, the destruction of the 2001/2002 returns conformed to the IRS’s
routine practice. See Internal Revenue Manual (“IRM”) 1.15.29-1 ¶¶ 55(1)(a),
56(1)(b) (2005) (providing that tax returns should be destroyed “6 years after the
end of the processing year unless needed for the Collection Statute Expiration
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Date (CSED) Extract”); see also IRM 1.15.2.3(1)(a) (2010) (stating that individual
tax returns are temporary records which become eligible for destruction after
6 years). Moreover, as stated above, there is no indication that the 2001/2002
returns actually contained any exculpatory information that could have been
apparent to the government. See Youngblood, 488 U.S. at 56 n.*, 109 S.Ct. at 336
n.* (“The presence or absence of bad faith by the police for purposes of the Due
Process Clause must necessarily turn on the police’s knowledge of the exculpatory
value of the evidence at the time it was lost or destroyed.”).
At the September 2009 meeting, before the destruction of the 2002 returns,
Madison may have signaled to the government that she would rely on her clients’
pre-2003 returns to establish her defense. However, Madison did not request the
documents and did not ask to preserve them, either then or at any time prior to the
meeting. Absent such requests, the government could have reasonably believed
that the 2001/2002 returns did not actually contain anything of value or that
Madison already possessed the relevant information from those returns, making it
unnecessary to take any affirmative steps to prevent the routine destruction of
these documents. Even if the government acted negligently in failing to heed
Madison’s assertions and to immediately retrieve the 2002 returns, such negligent
or incompetent behavior does not, by itself, establish bad faith. See Revolorio-
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Ramo, 468 F.3d at 775 (concluding that no bad faith existed, even though
government agents acted incompetently in trying unsuccessfully to preserve
evidence); Brown, 9 F.3d at 910 (stating that the loss of evidence resulted at most
from negligence, not bad faith).
Madison also cannot establish bad faith by the fact that the government filed
the indictment several years after completing the investigation and shortly after the
2002 returns had been destroyed. Madison retained an attorney to represent her in
2007, long before the destruction of the 2001/2002 tax returns. Moreover, at the
September 2009 meeting, the government gave Madison an opportunity to
examine the statements of her former clients, which should have alerted Madison
to the alleged importance of the 2002 returns. Thus, it is highly unlikely that the
government wanted to prevent Madison from obtaining the 2001/2002 returns and
for this purpose waited several years to file the indictment. In this light, the
district court did not clearly err in finding that the government did not act in bad
faith by destroying the 2001/2002 returns. Accordingly, Madison has failed to
establish a due process violation, and we affirm the district court’s denial of her
motion to dismiss.
AFFIRMED.
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