In Uncategorized on 07/21/2021 at 09:50

Judge Kathleen Kerrigan supplements the latest CLE from The Great Chieftain of The Jersey Boys (and thanks again, Frank), to go over some FREs that might could just possibly maybe so show up in November at the USTC Death March (a/k/a examination for admission to practice before the United States Tax Court).

It’s a reprise of yesterday’s blogpost “An Unerring Nose for Fraud – Part Deux,” 7/20/21. Y’all will remember that Frank Vennes lost his theft loss deduction. But there were some evidentiary holdovers that Judge Kerrigan rules on, in Frank E. Vennes, Jr. & Kimberly Vennes, Docket No. 23860-17, filed 7/21/21.

Frank’s counsel moved to strike the direct testimony of Mr. T. J. Petters, master-fraudster, Ponzi division, and loses.

“Pursuant to an agreement between the parties, Mr. Petters testified remotely via telephone from the U.S. Penitentiary in Leavenworth, Kansas. …Mr. Petters only provided direct testimony. The parties agreed that petitioner’s cross-examination would occur at a later date.” Order, at p. 1.

But when Frank’s counsel called Mr. T. J. for cross a couple days (hi, Judge Holmes) later, Mr. T. J. took the Fifth, claiming he might go down for perjury, based upon his testimony in this or other proceedings. So counsel moved to strike.

“Petitioners’ counsel still could have questioned Mr. Petters to determine his credibility. Instead, petitioners made an oral motion to have Mr. Petters’ direct testimony stricken from the record. The purpose of striking a witness’ testimony from the record is to prevent the Fifth Amendment privilege–intended for use as a shield against self-incrimination–from being used as an offensive sword. In this case Mr. Petters was not testifying on his own behalf or on a matter favorable to his cause. Therefore, the testimony of Mr. Petters is not stricken from the record.” Order, at p. 1. (Citation omitted, but get the case and read it.)

Note that Judge Kerrigan says she didn’t rely on Mr. T. J.’s testimony in deciding the case. If this stuff isn’t a question on the exam, it should be.

Next is the famous Baker Tilly-prepared tax files for Frank’s Sub. S. IRS claims hearsay, but the BT maintainer-corroborator runs the FRE 803(6)(A – E) slalom. Read the order at p. 1. It’s a good crib for the business document hearsay exception. I’d be surprised if that weren’t on the exam.

Finally, though I didn’t mention it in my blogpost above-cited, Frank had an expert witness testify as to the flow of funds from Frank’s Sub S into Petters’ scam platform, 2021 T. C. Memo. 93, at p. 43.

IRS objected, of course. Remember, if you have a basis to object, be it anything above frivolous, object.

Here’s Judge Kerrigan letting the expert in, via FRE 702: “The M expert report (exhibit 2147-P) included special knowledge to assist the trier of fact, was based on sufficient facts or data, was the product of reliable principles and methods, and applied those principles and methods to the fact of this case. See Fed. R. Evid. 702. The expert report of M is, therefore, admitted into evidence.” Order, at p. 2. (Name omitted).

Study hard, guys. And remember, a good advocate is always learning.


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