Steve Cook, Justin Weddle, and Daniel Day authored the Law360 article, 'Prosecutors Should Be Wary Of Overreach After Marinello.'

From the article:

"On March 21, the U.S. Supreme Court rejected the government’s broad interpretation of a criminal tax obstruction statute and overturned a courier freight service operator’s three-year prison sentence in a decision that may have implications for the government’s recent interpretation of omnibus criminal statutes, such as the “conspiracy to defraud the United States” clause of Section 371, in special counsel Robert Mueller’s indictments, and in the case involving alleged leaks from the Public Company Accounting Oversight Board. The Supreme Court’s Marinello decision is the latest warning about prosecutorial overreach where the government adopts broad interpretations of broad statutory language.

The government charged Carlo Marinello under the so-called “omnibus” clause of Internal Revenue Code Section 7212(a), which forbids “corruptly ... obstruct[ing] ... the due administration of [the Internal Revenue Code].” The government claimed that Marinello violated this omnibus clause by engaging in “at least one of eight different specified activities, including ‘failing to maintain corporate books and records,’ ‘failing to provide’ his tax accountant ‘with complete and accurate’ tax ‘information,’ ‘destroying ... business records,’ ‘hiding income,’ and ‘paying employees ... with cash.’”[1] A jury convicted Marinello and he was sentenced to three years’ imprisonment. The Second Circuit affirmed, holding that the omnibus charge did not require any “awareness of a particular [IRS] action or investigation.”[2] In a scathing dissent from the denial of en banc review, Judge Dennis Jacobs, joined by Judge José Cabranes, criticized Marinello’s criminal conviction “based on the most vague of residual clauses” that “cleared a garden path for prosecutorial abuse.”[3] Judge Jacobs’ dissent also highlighted the Supreme Court’s increasing tendency to cast a “cold eye” towards “broad residual criminal statutes” and the court’s preference “to cabin them.”[4] Indeed, Judge Jacobs stated that a series of well-known Supreme Court reversals were animated by “alarm about fair warning and overbreadth.”[5]

In a 7-2 decision, the Supreme Court reversed and remanded the Second Circuit’s affirmation of Marinello’s conviction, holding that to convict a defendant under the omnibus clause of Section 7212(a) of the Internal Revenue Code, the government must prove that the defendant was aware of a pending tax-related proceeding, such as a particular investigation or audit, or could reasonably foresee that such a proceeding would commence."

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