Page 2 - Lessons Learned from Getting to Not Guilty_FORTHEDEFENSE_vol4_issue4_2019

expense deduction, charging him with conspiring office required and that the $50,575 price was so
with his wife to defraud the United States by
impairing and impeding the lawful functions of
the Internal Revenue Service. To that end, the
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government produced evidence that his wife was
an avid investor in gold. The evidence showed
what appeared to be a circular transaction: 1) on
December 16, 2010, a gold seller issued his wife an
invoice for 35 gold coins for $50,575; 2) four days
later, his wife wrote a check to Mr. Doe’s company
for $50,575 for maintenance work that he was to
complete at her clinic; 3) three days after that, Mr.
Doe wrote a check for $50,575 to the gold seller in
payment for the 35 gold coins as described in the
December 16th invoice to his wife; 4) his wife then
deducted the $50,575 on the clinic’s tax returns as
a business expense for maintenance.
The Government viewed this activity as a
thinly veiled effort by his wife to buy herself gold
while also creating a fictitious business expense
deduction with the help of Mr. Nanavati’s client,
John Doe. The Government argued that Mr. Doe
was not the true buyer of the gold coins and was
merely conducting the transaction on his wife’s
behalf. Luckily, Mr. Doe kept the receipt from when
he sold the gold coins to a local coin dealer five
years after he bought them. Equally important,
Mr. Doe raised this fact with Mr. Nanavati. Upon
learning of the receipt, Mr. Nanavati told the
prosecutors about it and suggested that it greatly
Sharon L. McCarthy and Jay Nanavati weakened their case. The prosecutors declined to
hear about or look at the document, essentially
saying, “We’ll see you in court.”
Two facts made the Government’s job at trial
difficult. First, the receipt allowed the jury to infer
that Mr. Doe indeed was the true buyer of the
gold coins, that he had held them for some years,
and that he later sold them. The Government was
forced to argue that Mr. Doe must have bought
the coins for his wife and then, without knowing
about any Government investigation, got them
back from his wife, sold them, and deposited
the sales proceeds into his own bank account.
Needless to say, the Government’s theory was
not the most elegant conclusion to draw from
the evidence. In addition, Mr. Doe helped Mr.
Nanavati marshal proof that showed that Mr.
Doe actually did maintenance work at his wife’s
office. This forced the Government to argue at trial
that Mr. Doe was not competent to do the kind
of maintenance work that a medical aesthetics
high compared with the work that he performed
as to be a sham. Mr. Nanavati elicited evidence,
through both cross examination and the defense’s
case, that Mr. Doe was exceptionally skilled at the
repair and maintenance of machines and buildings,
that employees of the clinic regularly saw him
doing maintenance there, and that the clinic had
previously paid more for similar maintenance work
than it had paid to Mr. Doe. After four weeks of
trial and over 100 governments witnesses (the vast
majority of whom testified about other allegations
against his wife), the jury deliberated for one week
before finding Mr. Doe not guilty.
The key lesson from this case is how important
it is that defense counsel not overplay his or
her hand with the jury. The receipt for the gold
sale was not irrefutable evidence of Mr. Doe’s
innocence, and it would have been a mistake to
attempt to sell it that way to the jury. Instead,
Mr. Nanavati argued that the receipt, along with
some other favorable evidence, showed that
the Government had simply, albeit with benign
motivations, settled on a flawed theory of the case
and was a victim of the same confirmation bias
that all humans have. Mr. Nanavati was able to
argue successfully to the jury that the government,
hewing to its flawed theory, had failed to take
into account evidence of Mr. Doe’s innocence. His
argument did not require the jury to think ill of the
prosecution; rather, it humanized the prosecutors
and allowed the jury to reach the right decision
without malice.
In U.S. v. Brent Jackson, which was defended
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by Mr. Nanavati in the Northern District of West
Virginia, Mr. Jackson was charged as the lead
codefendant in a 53-count indictment charging
seven people with mail fraud and money
laundering and seeking forfeiture of over $7
million. Mr. Jackson was alleged to have deceived
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local charities that sponsored bingo nights at
his bingo hall by taking for himself an outsized
portion of bingo proceeds to which the charities
allegedly were entitled. After extensive pretrial
litigation, the Court dismissed this case pretrial.
The Jackson case had many problems, not the
least of which was the fact that the Government,
in claiming that the charities received only a small
percentage of the gaming proceeds and that the
rest went to Mr. Jackson’s bingo hall, neglected
to consider that the vast majority of the gaming
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