MLR

IRS agent allowed to testify about tax fraud indicators

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Cliffort Variste is appealing a 75-month conviction on identity theft charges.

Variste feels that the U.S. District Court for the Southern District of Florida made an error when it:

1. Allowed IRS agent Karyn Calabrese’s testimony about fraud indicators on his tax returns as lay opinion testimony and

2. Concluded that his offense involved more than 50 people.

Calabrese was a special agent with the IRS’s Criminal Investigations unit. She had participated in the investigation of Variste and reviewed the tax returns filed under Variste’s electronic filer identification number (EFIN). She prepared a summary of the returns pointing out several indicators of fraud.

Federal Rule of Evidence 701 allows a lay witness to offer opinion testimony if all of the following facts apply:

A. The testimony is “rationally based on the witness’s perception.”

B. It is “helpful to clearly understanding the witness’s testimony or to determining a fact in issue.”

C. It is “not based on scientific, technical, or other specialized knowledge within the scope of Rule 702,” which provides the qualifications of an expert witness.

Calabrese’s testimony satisfied Rule 701’s requirements for lay opinion testimony. She satisfied Part A because her testimony was based on her personal review of the tax returns filed under Variste’s EFIN. Part B applied because her testimony about the fraud indicators helped the jury better understand the significance of the commonalities in the tax returns. Regarding Part C, her testimony was not the type of specialized testimony that needed to be admitted under Rule 702 because it was based on a summary of documents related to the case. The jury members could have reviewed the same documents themselves and come up with similar conclusions.

So Variste lost on the IRS agent testimony issue.

In regard to the number of people involved in the identity theft, Variste is not including his friends and relatives in his head count. He feels they should not be included because they did not suffer any losses and they voluntarily provided him with their confidential information. He felt that the number of victims was 44.

Court case law has clearly established that, when calculating the number of victims for fraud offenses involving the unlawful use of others’ means of identification, a victim is either a person who suffered an actual loss from the offense or a person “whose means of identification was used unlawfully or without authority.”

Substantial evidence supported the district court’s finding that Variste used means of identification from more than 50 victims without their authority.

Therefore the U.S. Court of Appeals agreed with the district court that the number of victims was over 50. This issue is significant because this finding increases the amount of jail time given to Variste (United States of America v. Cliffort Variste, U.S. Court of Appeals, Eleventh Circuit, 14-12722, Aug. 31, 2015).