The principal conspiracy evidence against Nissenbaum was that he participated in the development of a template for a shelter called PICO Amnesty. But here, Cabranes said, Dougherty testified that Nissenbaum only reviewed template letters Dougherty had prepared and had done nothing more than make "non-substantive comments" such as "take out the bold" and "correct a typo."
Other evidence that Nissenbaum was involved in keeping a trade account open on one shelter and reviewing documents on a solicitation letter for a third shelter was also scant, Cabranes said.
As with Shapiro, the court found the evidence insufficient as to all three objects of the conspiracy as related to Nissenbaum, and then found the evidence insufficient as well for the two counts of tax evasion.
And it vacated Nissenbaum's conviction for violating §7212(a) in making four misleading statements to the IRS in an IRS Information Document Request (IDR) regarding another shelter—Tradehill— with Cabranes citing the "equivocal testimony" of two witnesses as to whether tax avoidance was the only objective of the Tradehill transaction, and the primary role of another attorney in drafting the response to the IDR.
The panel rejected several arguments offered by Coplan, including that Stein gave an unwarranted instruction to the jury on conscious avoidance.
It also held that Stein accurately stated the law when telling the jury to examine whether a tax transaction lacks "economic substance." A tax transaction lacks economic substance, Stein had said, where "there was no reasonable possibility that the transaction would result in a profit."
The dissent by Kearse came on the conspiracy counts and tax evasion counts. In both crimes, she said, the prosecution had produced sufficient evidence to support the convictions.
Assistant U.S. Attorney Richard Tarlowe argued for the government.
Denis P. Riordan of Riordan & Hogan in San Francisco argued for Coplan.
Nathan Lewin of Lewin & Lewin in Washington D.C. argued for Nissenbaum.
Subscribe to New York Law Journal
