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United States v. Nardozzi

United States District Court, D. Massachusetts

February 20, 2019

UNITED STATES OF AMERICA,
v.
JOHN H. NARDOZZI, Defendant.

          ORDER

          George A. O'Toole, Jr. United States District Judge.

         The defendant, John Nardozzi, moved to discover records from Brian Joyce's IRS appeal. Nardozzi argued that the appeal documents might be exculpatory if they revealed a disagreement within the IRS concerning whether certain transactions should be treated for tax purposes as a taxable withdrawal of funds from an IRA or as a nontaxable rollover. The magistrate judge issued an Order denying the motion for discovery (dkt. no. 84), to which Nardozzi timely objected (dkt. no. 86).

         Nardozzi argues that the magistrate judge erred in determining that the documents were not exculpatory and therefore not material, and in refusing to consider certain documents as part of that ruling.

         I agree with the magistrate judge that the premise of the defendant's request-that the discovery would yield exculpatory information-is at best speculative. The government represented to the magistrate judge that it had reviewed the appeal file and found no information that would be responsive to the discovery request. The magistrate judge apparently accepted that representation, as he was entitled to do. Accordingly, there was no reason to believe that anything in the file would enable the defendant to shift the quantum of proof in his favor. See United States v. Goris, 876 F.3d 40, 44-46 (1st Cir. 2017), cert. denied, 138 S.Ct. 2011 (2018).

         In ruling on the motion, the magistrate judge declined to review the IRS documents in camera, or consider a supplemental, ex parte filing from the defendant. I find no error in either of these decisions. Absent some specific reason to doubt the government's representation about the absence of material exculpatory information in the appeal record, the magistrate judge was entitled to rely on it. It was also well within the magistrate judge's discretion to refuse the defendant's late submission as untimely.

         Having reviewed the objection and underlying motion papers, I OVERRULE the defendant's objection and AFFIRM the order of the magistrate judge.

         It is SO ORDERED.

         January 3, 2019

         ORDER ON DEFENDANT'S MOTION FOR DISCOVERY

         Defendant has moved to discover documents generated in connection with an appeal to the Office of Appeals of the Internal Revenue Service (“IRS”) by his former tax client, Brian A. Joyce. According to the motion, Joyce appealed an IRS assessment of taxes and penalties for a distribution of IRA assets that the IRS determined was unlawfully reported on Joyce's tax return as a qualified IRS rollover. For the reasons stated below, the motion is DENIED.

         I. Background

         In an indictment filed on January 18, 2018, Defendant John H. Nardozzi was charged with Conspiracy to Defraud the United States (Klein Conspiracy), and eight counts of Aiding in the Filing of False Tax Returns. See Doc. 3. Nardozzi's conduct involved preparing tax returns for former State Senator Brian A. Joyce, his wife, and business entities associated with one or both of them.

         According to the original discovery request, Nardozzi's motion, and the Government's opposition, in 2014, Joyce withdrew $400, 000 from a Simplified Employee Pension - Individual Retirement Account (“IRA”) and used those and other funds to purchase $471, 250 in stock in a privately-held insurance brokerage company. The stock was issued in the name of Brian A. Joyce SEP-IRA and Mary Joyce SEP-IRA. Nardozzi prepared the tax return reflecting this event, treating the stock purchase as a rollover of IRA assets, and filed the return in September 2015. (The lawfulness of the tax treatment of these IRA assets is the basis of charges in the indictment.)

         Thereafter, the IRS issued a notice to Joyce of an assessment of tax and penalty, finding that the transaction did not qualify as a rollover, but rather constituted a distribution to the taxpayer, triggering a penalty for early withdrawal of IRA assets, and a tax on the distribution. Joyce initiated an appeal or review of the IRS determination in the Boston IRS Office of Appeals (“Joyce ...


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