United States District Court, D. Massachusetts
MEMORANDUM & ORDER
TALWANI UNITED STATES DISTRICT JUDGE
the court is Defendant Daniel Gibson's Motion to
Dismiss[, ] or in the Alternative[, ] to Limit Count
Five [#159] of the Indictment [#1], which
charges that Gibson and Mark Kesner conspired to engage in a
tax-fraud scheme. Gibson argues that Count 5 impermissibly
groups separate alleged unlawful acts relating to the 2005,
2006, 2008, and 2010 tax years, into a single multi-year
scheme for the purpose of circumventing the statute of
limitations. For the reasons set forth below, the motion is
the ordinary course of events, a technically sufficient
indictment handed down by a duly empaneled grand jury
‘is enough to call for trial of the charge on the
merits.'” United States v. Guerrier, 669
F.3d 1, 4 (1st Cir. 2011) (quoting Costello v. United
States, 350 U.S. 359, 363 (1956)). However, pursuant to
Rule 12(b)(1) of the Federal Rules of Criminal Procedure,
“[a] party may raise by pretrial motion any defense . .
. that the court can determine without a trial on the
merits.” The court must cautiously exercise its
authority to dismiss because dismissing an indictment
“directly encroaches upon the fundamental role of the
grand jury.” Whitehouse v. U.S. Dist. Court,
53 F.3d 1349, 1360 (1st Cir. 1995).
a defendant seeks dismissal of an indictment, courts take the
facts alleged in the indictment as true, mindful that the
question is not whether the government has presented enough
evidence to support the charge, but solely whether the
allegations in the indictment are sufficient to apprise the
defendant of the charged offense.” United States v.
Ngige, 780 F.3d 497, 502 (1st Cir. 2015) (internal
quotation marks omitted). “At the indictment stage, the
government need not ‘show, ' but merely must
allege, the required elements.” United States v.
Stewart, 744 F.3d 17, 21 (1st Cir. 2014).
of the Indictment charges that, from June 2006 to October
2010, Gibson and Mark Kesner engaged in a conspiracy to
defraud the United States in violation of 18 U.S.C. §
371. Indictment ¶¶ 15-16 [#1]. According to the
the purpose of the conspiracy was to impede, impair, obstruct
and defeat the lawful government functions of the Internal
Revenue Service . . . in the ascertainment, computation,
assessment, and collection of income taxes, and thereby to
permit [Gibson] to retain more of his income through the
underpayment of taxes he owed.
¶ 8. The Indictment alleges that Gibson (the president
and managing director of a law firm) retained Kesner (a
certified public accountant) to perform accounting services
for the law firm and for Gibson individually. Id.
¶¶ 1, 2. As alleged, for the tax years 2005, 2006,
2008, and 2009, tax returns prepared by Kesner and filed by
Gibson intentionally underreported the law firm's income
by more than $3.7 million, enabling Gibson to underreport his
personal income by more than $2.4 million. Id.
to the Indictment, “[i]n every year except one between
2005 and 2009, ” Kesner allegedly directed his staff to
alter electronic accounting records so that he and Gibson
could underreport Gibson's personal tax obligations.
Id. ¶ 9. The Indictment alleges the following
six overt acts in furtherance of this conspiracy.
Id. ¶ 10. First, in June 2006, Kesner met with
his staff to review the electronic accounting records for the
2005 tax year, prompting staff to alter the amount of
professional fees reported by Gibson's law firm.
Id. ¶ 10(a). Second, in September 2007, at
Gibson's request, Kesner directed his staff to alter the
professional fees reported for the 2006 tax year.
Id. ¶ 10(b). Third, in July 2009, following a
meeting with Gibson about the 2008 tax year, Kesner directed
his staff to lower the amount of professional fees reported
by the law firm. Id. ¶ 10(c). Fourth, in
November 2009, Gibson filed an individual income tax return
which underreported his income. Id. ¶ 10(d).
Fifth, in September 2010, Gibson falsely reported to Kesner
in an email the amount of funds he loaned his law firm.
Id. ¶ 10(e). Despite knowing Gibson's
statement to be false, Kesner directed his staff to alter the
amount of professional fees reported by the law firm.
Id. Sixth, in October 2010, Gibson filed an
individual income tax return that underreported his income.
Id. ¶ 10(f).
of the Indictment charges Gibson with violation of 18 U.S.C.
§ 371, which imposes criminal penalties “[i]f two
or more persons conspire either to commit any offense against
the United States, or to defraud the United States, or any
agency thereof in any manner or for any purpose, and one or
more of such persons do any act to effect the object of the
grounds for his Motion to Dismiss, Gibson argues that Count 5
is insufficient under the applicable six-year statute of
limitations, see 26 U.S.C. § 6531(8), because
the overt acts alleged with respect to the 2005 and 2006 tax
years (which would be time barred if charged as stand-alone
substantive acts) do not comprise part of a single conspiracy
with the overt acts alleged with respect to the 2008 and 2009
tax years. Because no act in furtherance of the conspiracy is
alleged to have occurred with respect to the 2007 tax year,
Gibson argues that, if taken as true, the Indictment supports
either two conspiracies (with the first conspiracy
encompassing the 2005 to 2006 tax years, and the second
including the 2008 and 2009 tax years) or four conspiracies
(a separate and distinct conspiracy for each tax year
charged), but not a single conspiracy.
scope of the conspiratorial agreement is critical to whether
the statute of limitations has run, because the scope is what
“determines both the duration of the conspiracy, and
whether the act relied on as an overt act may be properly
regarded as in furtherance of the conspiracy.”
Stewart, 744 F.3d at 21 (quoting Grunewald v.
United States, 353 U.S. 391, 397 (1957)). However,
“at the motion-to-dismiss stage, the allegations are
taken as true, leaving for the jury the questions of the
actual scope of the conspiratorial agreement, whether the
acts alleged actually occurred, and, if so, whether they
furthered the conspiracy's objectives.”
Id. at 22. Stewart illuminates this point.
In that case, the defendant argued that the indictment was
time barred because the only overt act that fell within the
statute-of-limitations period-signing a United States
Citizenship and Immigration Service petition to remove
conditions on her co-conspirator's Lawful Permanent