zeekrewardsThe “Paul Burks filing everything he can in order to delay proceedings” circus continues.

The latest sees Burks’ request an evidentiary hearing, pertaining to ‘the government’s seizure and handling of confidential and privileged communications‘.

Before we get into that though, a decision on Burks’ request for a jury questionnaire has been made…

Judge Cogburn’s brief 14th of June order on the request states that

the court does not find the proposed questionnaire helpful as the undersigned will ask initial questions and counsel will have an opportunity to ask their own questions, subject to oversight by the court.

Burks’ aforementioned motion for an evidentiary hearing alleges

the government sought and obtained Mr. Burks’ emails from two Google accounts by way of search warrants.

At the time the search warrants were sought and executed, the government knew that Mr. Burks had counsel and that his email accounts contained confidential and privileged communications with his attorneys.

Rather than employ a “taint team,” work with undersigned counsel to segregate confidential and privileged communications, or employ some other meaningful screening process to handle these communications and protect Mr. Burks’ Sixth Amendment rights, the government had the U.S. Secret Service conducted a self-directed and unilaterally defined search of the emails.

The irregular process employed exposed case agents to confidential and privileged communications.

These case agents—the same ones charged with seizing, handling, and reviewing these confidential and privileged communications—subsequently engaged in dozens of witness interviews.

Burks’ attorney claims to have thus far identified some ‘148 confidential and privileged communications that have been in the possession of the prosecution team since before Mr. Burks was indicted.‘

The DOJ has previously addressed this issue, stating that ‘it “took a very conservative approach with regard to the potentially privileged emails within the search materials.”‘

Burks asserts ‘there is good cause to question this claim based on the circumstances of the search and seizure of (his) communications‘.

A sealed memorandum has been filed in support of Burks’ request for an evidentiary hearing.

With Burks’ criminal trial now just over two weeks away (July 5th), it’s likely an evidentiary hearing would cause a delay. Something Burks and his attorney’s are no doubt acutely aware of.

As to the merits of Burks’ filing, if the court has previously been satisfied with the DOJ’s approach to Burks’ potentially privileged emails, I’m not seeing what the problem is.

Sounds little more than a bid to get an eleventh-hour hearing in, during which Burks’ attorney would no doubt throw copious amounts of mud in the hope that some sticks, resulting in the criminal trial being delayed.

Stay tuned for a decision on the matter.

In related news, the DOJ filed a response to Burks’ earlier filing requesting a tax fraud related indictment count be struck.

Burks argues that count four should be dismissed because:

(1) the doctrine of constructive receipt of income – upon which these Forms 1099 were based – is valid and that

(2) Zeek affiliates believed that they had a right to receive the payment of the funds appearing as their earnings, whether they had actually took out those earnings as cash or not.

The United States agrees with both of these propositions; however, rather than support Defendant’s argument for dismissal they actually buttress the Government’s position that the Defendant and his co-conspirators engaged in a conspiracy to defraud the IRS.

The reason that the Forms 1099 were false is because they reported to the affiliates “income” that was in truth and in fact phantom money.

The numbers reported were just that numbers on a page: there was no cash on deposit or actual value behind the amounts listed for the affiliates named on each 1099.

Defendant Burks and Rex Venture Group issued Forms 1099 reporting miscellaneous income, mostly to affiliates, for the 2011 tax year totaling $96 million.

Burks led affiliates to believe this was their actual earnings (whether they had taken them out in cash or not).

In truth and in fact, the total revenue of Defendant Burks’s businesses for 2011 was only $37 million.

Therefore, it is impossible that the affiliates received, actually or constructively, the income reported to the IRS on their Forms 1099.

The affiliates certainly did not have control over the receipt of the money not subject to substantial limitations or restrictions as required for constructive receipt of income; their ability to receive the funds was limited and restricted by the facts that the funds did not exist.

The Government alleges that the Forms 1099 are false, not because of confusion of the constructive receipt of income theory, but because the Forms 1099 related to money that simply did not exist – the value on them had not been received by the affiliates, constructively or otherwise.

Because Count Four of the Indictment alleges the elements of the offense and because whether or not the Forms 1099 were false will be a factual issue to be determined at trial, Defendant’s motion must fail.

Sounds about right to me; a wonderful own goal from team Burks.

Stay tuned for a decision on that motion too…

 

Footnote: Our thanks to Don@ASDUpdates for providing a copy of Paul Burks “Motion for Hearing and Appropriate Relief” (June 12th), Judge Cogburn’s Order (June 14th) and the DOJ’s “Response in Opposition to Paul Burks Memorandum in Support and Motion to Dismiss Count Four of the Indictment” (June 14th).