Invisible Contracts (Social Security)

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Co. 22 F.2d 113 115, Social, Social Contract, social security, Social Security Administration, SocialSecurity, SocialSecurityAdministration, Society, SSA, States, States 155, States 155 F.2d, States 155 F.2d 823, States 155 F.2d 823 (4th Cir. 1946), States 155 F.2d 823 (4th Circuit 1946), States 155 F.2d 823 4th, States 155 F.2d 823 4th Cir., States 155 F.2d 823 4th Circuit, T P C S, Tax, that, that explained, that explained his, that explained his arguments, that explained his arguments about, the federal, the federal income, the federal income tax, the mid-80s, the mid-80s an, the mid-80s an author, the mid-80s an author named, theory, Thomas, Thomas Hobbes, TPCS, treatise, treatise he, treatise he described, treatise he described as, treatise he described as a, treatise he described as a letter, treatise he described as a letter that, U S v. Seaboard 22 F.2d 113, U.S. v. Seaboard Air Line Ry. Co., United StaRy. Co. 22 F.2d 113 (4th Cir. 1927), United States, United States 155, United States 155 F.2d, United States 155 F.2d 823, United States 155 F.2d 823 4th, United States 155 F.2d 823 4th Cir., United States 155 F.2d 823 4th Circuit, United States v. Seaboard, United States v. Seaboard Air, United States v. Seaboard Air Line, United States v. Seaboard Air Line Ry., United States v. Seaboard Air Line Ry. Co., US v. Seaboard 22 F.2d 113, US v. Seaboard Air Line Ry. Co., utm, utm edu, v. Seaboard Air Line Ry. Co. 22 K, v. United States, v. United States 155, v. United States 155 F.2d, v. United States 155 F.2d 823, v. United States 155 F.2d 823 4th, wrote, wrote a, wrote a long, wrote a long treatise, wrote a long treatise he, wrote a long treatise he described, wrote a long treatise he described as, wrote a long treatise he described as a, www.home.hiwaay.net/becraft, www.home.hiwaay.net/becraft/InvisibleContracts.html

_____________________________________________
Really ?  Invisible Contracts ?

(updated Sept. 24, 2009)
—————————————————————–
http://home.hiwaay.net/%7Ebecraft/InvisibleContracts.html
_____________________________________________
Back in the

mid-80s,

an

author

named

“George Mercier”

wrote a long

treatise

he described as a

letter

that explained his

arguments

about the

federal income tax
………………………………………………..
This

“book”

obtained a

wide circulation

back then,

but within a few years,

it died down after the

“Mercier legal theory”

was championed by the

Pilot Connection Society,

an

organization

created

and

operated

by

Phil Marsh,

and

went down in flames
………………………………………………..
But, this work is again being

popularized

by

“newbies”

in the

freedom movement

and I have concluded that I need to provide my

view

of this

argument,

which in essence is that this

“legal argument”

has no substance
………………………………………………..
Let me explain some of the

gross flaws

of this

argument
………………………………………………..
For centuries,

philosophers

have written about various forms of

governments,

and some of these like

Thomas Hobbes

and

John Locke

wrote about the

“Social Contract Theory”;

Locke

had an

impact

on the

founders

of our

country
………………………………………………..
A short explanation of this

theory

may be found on the Net here
_____________________________________________
http://www.iep.utm.edu/soc-cont/
_____________________________________________
From reading

Mercier’s Invisible Contracts,

it appears to me that he attempted to connect the

Social Contract Theory

to

modern American law
………………………………………………..
However,

American law

is not exclusively contract based,

yet

this is the precise contention asserted

by

Mercier
………………………………………………..
I know little about

Mercier,

and I have never met anyone who knew him
………………………………………………..
For all that is known about him,

“George Mercier”

may be somebody’s

nom de guerre
………………………………………………..
But from reading his work,

I have concluded that he probably lived in

New York
………………………………………………..
From the fact that he quoted very extensively from the works of

Mormon Church leaders,

I have concluded that he was a

Mormon
………………………………………………..
But then again, he was a

self confessed

pot-grower:
………………………………………………..
“For example, among other things, I am a

Marijuana Grower

[I am quite interested in Horticulture]”
………………………………………………..
I have never met a

pot-growing

Mormon
………………………………………………..
Mercier’s

legal theory

is that, here in

America,

the

relationship

between

citizens

and

government (Mercier’s “King”)

is

entirely commercial

and

based

on

implied

or

invisible

contracts
………………………………………………..
I could be wrong,

but I have concluded that

Mercier

first wrote some

treatise

of his

legal argument

that was

purely theoretical
………………………………………………..
Once this was done,

he simply added a

substantial amount

of other apparently relevant

(to him at least)

legal

and

other materials
………………………………………………..
It is only this

other material

that provides any shred of

legal support

for his

argument
………………………………………………..
I do not want to be

perceived

as

condemning everything he writes about

and there is much in

Invisible Contracts

with which I am in agreement
………………………………………………..
His work is easy to read,

is entertaining and interesting;

he chocks his

work

with lots of

stories

about the

Rockefellers

and

other elites

in our

society

and across the world
………………………………………………..
He condemns the

tyranny

of

present-day American government,

and such writing is popular,

both with me and other Americans
………………………………………………..
But, all of that is irrelevant regarding

his fundamental legal argument
………………………………………………..
Let me address

his contention

that

“everything is commercial”

in reference to the

“King”, government
………………………………………………..
It is a

well established legal principle

that

any American government

engaged

in

commercial endeavors

is

subject

to the

same rules of commerce

as are

private individuals
………………………………………………..
For example, in
_____________________________________________
Lynch v. United States,

292 U.S. 571, 579,

54 S.Ct. 840

(1934),
—————————————————————–
https://supreme.justia.com/cases/federal/us/292/571/case.html
—————————————————————–
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=292&invol=571
——————————————————————
https://bulk.resource.org/courts.gov/c/US/292/292.US.571.html
——————————————————————
http://www.law.cornell.edu/supremecourt/text/292/571
_____________________________________________
the

Supreme Court

stated:
………………………………………………..
“When the

United States

enters into

contract relations,

its

rights

and

duties

therein are

governed generally

by the

law applicable to contracts

between

private individuals”
………………………………………………..
See also
_____________________________________________
Franconia Associates v. United States,

536 U.S. 129, 141,

122 S.Ct. 1993

(2002);
—————————————————————–
https://supreme.justia.com/cases/federal/us/536/129/
—————————————————————–
https://supreme.justia.com/cases/federal/us/536/129/case.html
—————————————————————–
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=536&invol=129
—————————————————————–
http://ruralhome.org/storage/documents/franconia.pdf
—————————————————————–
http://www.oyez.org/cases/2000-2009/2001/2001_01_455
_____________________________________________
and
_____________________________________________
United States v. Seaboard Air Line Ry. Co.,

22 F.2d 113, 115

(4th Cir. 1927)
—————————————————————–
http://law.justia.com/cases/federal/appellate-courts/F2/22/113/1474997/
——————————————————————
6.

http://www.americanbar.org/publications/under_construction/2013/january_2013/update_from_courts_connecticut_supreme_court.html
——————————————————————
http://openjurist.org/216/f2d/855/seaboard-air-line-railroad-company-v-united-states
_____________________________________________
(“And the

rule

is

well settled

that, when the

‘government * * *

comes down from its

position

of

sovereignty,

and enters the

domain

of

commerce,

it

submits itself

to the

same laws

that

govern individuals

there‘”),
………………………………………………..
among many others
………………………………………………..
Presuming that

our relationship

with

Uncle Sam

is

commercial,

what are these

contract rules

that apply to this

commercial government,

Mercier’s King?
………………………………………………..
The

“statute of frauds”

originates from the

common law

and

every state

today has a general

“statute of frauds,”

if not several
………………………………………………..
Generally,

statutes of frauds

require

that

certain contracts

are only

valid

if

evidenced

by a

written contract
——————————————————————
Typically,

contracts for the sale of land,

contracts for the sale of goods over 500 bux,

all other contracts in excess of 5000 bux,

agreements to answer for the debts of others,

contracts that have a life in excess of one year,

etc.,

must be

memorialized

by a

written contract
——————————————————————
Two such

Alabama laws

appear below:
——————————————————————
§ 7-2-201

Formal requirements; statute of frauds

(1) Except as otherwise provided in this section

a contract for the sale of goods

for the price of $500 or more

is not enforceable by way of

action

or

defense

unless there is

some writing

sufficient to indicate

that a

contract for sale

has been made between the

parties

and

signed

by the

party

against whom

enforcement

is sought

or by his

authorized agent

or

broker
——————————————————————
A

writing

is not

insufficient

because it

omits

or

incorrectly states

a term agreed upon,

but the

contract

is not

enforceable

under this

paragraph

beyond the

quantity of goods

shown in such writing
——————————————————————
§ 8-9-2

Certain agreements void unless in writing

In the following cases,

every agreement

is

void

unless such

agreement

or

some note

or

memorandum thereof

expressing the

consideration

is in

writing

and

subscribed

by the

party

to be

charged therewith

or

some other person

by him thereunto

lawfully authorized

in

writing:
——————————————————————
(1) Every agreement

which, by its

terms,

is not to be

performed

within

one year

from the

making thereof;
——————————————————————
(2) Every special promise

by an

executor

or

administrator

to

answer damages

out of his own estate;
——————————————————————
(3) Every special promise

to

answer for the

debt,

default

or

miscarriage

of another;
——————————————————————
(4) Every

agreement,

promise

or

undertaking

made upon

consideration

of

marriage,

except mutual promises to marry;
——————————————————————
(5) Every contract

for the sale of

lands,

tenements

or

hereditaments,

or of

any interest therein,

except

leases

for a term not longer than

one year,

unless the

purchase money,

or a portion thereof is

paid

and the

purchaser

is put in

possession

of the

land

by the

seller;
——————————————————————
(6)  Every

agreement,

contract

or

promise

to make a will

or

to

devise

or

bequeath

any

real

or

personal

property

or

right,

title

or

interest

therein;
——————————————————————
(7) Every

agreement

or

commitment

to

lend money,

delay

or

forebear repayment thereof

or

to modify the provisions

of such

an agreement

or

commitment

except for

consumer loans

with a

principal amount

financed less than $25,000;
——————————————————————
(8) Notwithstanding

Section 7-8-113,

every agreement

for the

sale

or

purchase

of securities

other than through the

facilities

of a

national stock exchange

or of the

over-the-counter securities market
——————————————————————
With the

statute of frauds

in mind,

look at your

birth certificate,

driver’s license

and

SSN card
——————————————————————
What

promises to pay

appear

on any of these

documents?
——————————————————————
Did you

sign

any of these

documents

promising to

pay anything?
——————————————————————
Can

King government

sue you

for

breach of contract

based on your

birth certificate,

driver’s license

or

SSN?
——————————————————————
In truth and

as a matter of law,

these

documents

are

not contracts,

nor do they

evidence contracts
——————————————————————
Finally, there are no

“invisible contracts”

regarding these matters
——————————————————————
Furthermore, having an

association

with some

regulated entity

like a

bank

does not supply some

nexus

to

King government,

absent

some express law
——————————————————————
Mercier

also

asserts

that

social security

is an

invisible contract
——————————————————————
For many years, I have posted the following in another file on my website:
—————————————————————–
http://home.hiwaay.net/%7Ebecraft/ssn.html
_____________________________________________
SOCIAL SECURITY IS NOT A CONTRACT
………………………………………………..
Art. 1, § 9, cl. 7

of the

U.S. Constitution

provides that
………………………………………………..
“No Money

shall be

drawn

from the

Treasury,

but in

Consequence of Appropriations

made by

Law”
………………………………………………..
While this

constitutional provision

does not of itself

place a maximum ceiling

on the

amount of debt

which can be

created

by

Congress,

it does

require

that

appropriating legislation

be

enacted

in order to

incur debts
………………………………………………..
This is aptly demonstrated by the

federal cases

which have

construed

this part of the

Constitution
………………………………………………..
In
_____________________________________________
Cummings v. Hardee,

102 F.2d 622

(D.C.Cir. 1939),
—————————————————————–
http://www.vivienkellems.org/security.html
_____________________________________________
and
_____________________________________________
Maryland Casualty Co. v. United States,

155 F.2d 823

(4th Cir. 1946),
—————————————————————–
https://casetext.com/case/maryland-casualty-co-v-united-states-8
_____________________________________________
it was held that

officers of the United States

lacked

all power

to

pay any claim

against the

United States

in the

absence

of an

appropriation from Congress

to

pay such claim
………………………………………………..
This principle was more fully explained in
_____________________________________________
Hughes Aircraft Co. v. United States,

534 F.2d 889, 906

(Ct.Cl. 1976),
—————————————————————–
https://casetext.com/case/hughes-aircraft-co-v-united-states-3
_____________________________________________
where that

Court

declared:
——————————————————————
“The

second principle

is that

before

any expenditure

of

public funds

can be made,

there must be an

act of Congress

appropriating the funds

and

defining the purpose

for such appropriation
——————————————————————
Thus,

no officer

of the

Federal Government

is

authorized

to

pay a debt due from the U.S.,

whether or not reduced to a

judgment,

unless an

appropriation

has been made for that purpose”
——————————————————————
See also
_____________________________________________
Reeside v. Walker,

52 U.S. (11 How.) 272

(1850);
—————————————————————–
https://supreme.justia.com/cases/federal/us/52/272/case.html
—————————————————————–
https://bulk.resource.org/courts.gov/c/US/52/52.US.272.html
—————————————————————–
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=52&invol=272
_____________________________________________
Cincinnati Soap Co. v. United States,

301 U.S. 308,

57 S.Ct. 764

(1937);
—————————————————————–
https://supreme.justia.com/cases/federal/us/301/308/case.html
—————————————————————–
https://bulk.resource.org/courts.gov/c/US/301/301.US.308.659.687.html
—————————————————————–
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=301&invol=308
_____________________________________________
and
_____________________________________________
Office of Personnel Management v. Richmond,

496 U.S. 414,

110 S.Ct. 2465, 2471

(1990)
—————————————————————–
https://supreme.justia.com/cases/federal/us/496/414/case.html
—————————————————————–
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=496&invol=414
—————————————————————–
http://laws.findlaw.com/us/496/414.html
_____________________________________________
LAW REVIEW 1104
—————————————————————–
http://lawcenter.org/LAW_REVIEW_1104.html
_____________________________________________
In
_____________________________________________
National Association of Regional Councils v. Costle,

564 F.2d 583, 586

(D.C.Cir. 1977),
—————————————————————–
http://openjurist.org/564/f2d/583/national-association-of-regional-councils-v-m-costle-u-s
—————————————————————–
https://casetext.com/case/national-assn-of-regional-councils-v-costle
—————————————————————–
http://elr.info/litigation/%5Bfield_article_volume-raw%5D/20737/national-assn-regional-councils-v-costle
_____________________________________________
that

Court

elucidated this principle by stating:
………………………………………………..
“Government agencies

may only enter into

obligations to pay money

if they have been

granted such authority

by

Congress
—————————————————————–
Amounts so

authorized

by

Congress

are termed collectively

‘budget authority’

and can be

subdivided

into

three conceptually distinct categories —

appropriations,

contract authority,

and

borrowing authority
——————————————————————
Appropriations permit an

agency

to

incur obligations

and to

make payments

on

obligations
——————————————————————
Contract authority

is

legislative authorization

for an

agency

to

create obligations

in advance

of an

appropriation
——————————————————————
It

requires

a

subsequent appropriation

or

some other source of funds

before the

obligation incurred

may actually be

liquidated

by the

outlay of monies
——————————————————————
Borrowing authority

permits an

agency

to

spend debt receipts”
——————————————————————
Thus, it is quite apparent that in order for the

federal government

to

incur debt,

it

must adopt legislation

authorizing

a

specific amount

of

federal obligations

to be

incurred
——————————————————————
It is easy to

demonstrate

the

operation

of

this provision

of the

Constitution

and its

application

to

government contracts
——————————————————————
Suppose the

feds

desired to build a

new courthouse

at a

cost of $200 million
——————————————————————
An

agency

in charge

of such a

project

could theoretically

“contract”

with a

construction company

to build this structure
——————————————————————
However, until

Congress

actually appropriates money

to

pay for construction,

there is no contract
——————————————————————
Even if the

contractor

in this example

incurred lots of costs

preparing to build this courthouse

which ultimately does not get built

because of

lack of funds,

he has no claim against Uncle Sam

for

breach of contract
——————————————————————
The

same principle

applies

to

every other government contractor,

whether

aerospace,

military,

et cet.
——————————————————————
Government contracts

are unique

and different

from

private sector contracts

due to this

constitutional limitation

upon the

power to contract
——————————————————————
Is

Social Security

a

contract?
——————————————————————
A

private insurance policy

is clearly a

contract

because the

policyholder

makes a

promise

to

pay money

to the

insurance company,

which in turn

agrees to likewise pay the policyholder

if certain contingencies arise
——————————————————————
These

“promise to pay”

elements

are essential

for a

contract,

but they simply

are not present

with

Social Security
——————————————————————
First,

Social Security

“payments”

are not premium payments,

but are

taxes instead
——————————————————————
Secondly,

there is no corresponding

and

enforceable

“promise to pay”

from the

Social Security Administration

to its

“beneficiaries”
——————————————————————
As noted above,

government contracts

are

very special

and

require

an

appropriation from Congress

before

money can be expended

and a

contract made
——————————————————————
Regarding

Social Security,

the only

“beneficiaries”

who have

any claim

against the

public treasury

are those for whom

Congress

has already made an

appropriation,

which can last no longer than a year
——————————————————————
The rest of the

Social Security claimants in America

have no enforceable claim on public funds,

and all they possess is a

“political promise,”

upon which

Congress

can renege at any moment
——————————————————————
If

Congress

decided tomorrow

to cut off all

Social Security benefits,

nobody

would have any claim for payment
——————————————————————
Thus,

Social Security

has never been

and

is not now

a

contract
——————————————————————
See
_____________________________________________
Fleming v. Nestor,

363 U.S. 603, 610,

80 S.Ct. 1367

(1960)
—————————————————————–
https://supreme.justia.com/cases/federal/us/363/603/case.html
—————————————————————–
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=363&invol=603
—————————————————————–
http://www.ssa.gov/history/nestor.html
—————————————————————–
http://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=1591&context=facpubs&sei-redir=1&referer=http%3A%2F%2Fwww.google.com%2Fcse%3Fcx%3Dpartner-pub-5347803559129172%253A5886277248%26ie%3DISO-8859-1%26q%3DFlemming%2Bv.%2BNestor%2B363%2BU.S.%2B603%2B1960%26sa%3DSearch#search=%22Flemming%20v.%20Nestor%20363%20U.S.%20603%201960%22
—————————————————————–
http://www.supremelaw.org/authors/mcdonald/vol1-8.htm
—————————————————————–
http://www.cato.org/publications/commentary/is-there-right-social-security
—————————————————————–
http://www.intellectualtakeout.org/library/primary-sources/flemming-v-nestor-1960
_____________________________________________
(“It is apparent that the

noncontractual interest

of an

employee

covered by the Act

cannot be soundly analogized

to that of the

holder

of an

annuity,

whose

right

to

benefits

is

bottomed

on

his contractual premium payments”);
_____________________________________________
Richardson v. Belcher,

404 U.S. 78, 80,

92 S.Ct. 254, 257

(1971)
—————————————————————–
https://supreme.justia.com/cases/federal/us/404/78/case.html
—————————————————————–
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=404&invol=78
—————————————————————–
https://bulk.resource.org/courts.gov/c/US/404/404.US.78.70-53.html
_____________________________________________
(“The fact that

social security benefits

are

financed

in part by

taxes

on an

employee’s wages

does not in itself

limit

the

power of Congress

to fix the levels of

benefits

under the Act

or the conditions

upon which they may be paid”);
_____________________________________________
Califano v. Goldfarb,

430 U.S. 199, 210,

97 S.Ct. 1021, 1028

(1977)
—————————————————————–
https://supreme.justia.com/cases/federal/us/430/199/case.html
—————————————————————–
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=430&invol=199
—————————————————————–
http://www.law.cornell.edu/supremecourt/text/430/199
—————————————————————–
http://www.oyez.org/cases/1970-1979/1976/1976_75_699
_____________________________________________
(Brennan J.) (plurality opinion)

(“Congress

has

wide latitude

to

create classifications

that

allocate non-contractual benefits

under a

social welfare program”);

and
_____________________________________________
United States Railroad Retirement Board v. Fritz,

449 U.S. 166, 174,

101 S.Ct. 453, 459

(1980)
—————————————————————–
https://supreme.justia.com/cases/federal/us/449/166/case.html
—————————————————————–
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=449&invol=166
—————————————————————–
https://bulk.resource.org/courts.gov/c/US/449/449.US.166.79-870.html
—————————————————————–
http://www.law.cornell.edu/supremecourt/text/449/166
_____________________________________________
(“railroad benefits,

like

social security benefits,

are

not contractual

and

may be altered

or

even eliminated at any time”)
………………………………………………..
In

1953,

a

subcommittee

of the

House Ways and Means Committee

conducted hearings

for the

express purpose

of

settling the question

of whether

social security

was

contractual in nature;

see
………………………………………………..
Hearings

of

November 27, 1953

entitled

“The Legal Status of OASI Benefits,”

(Part 6)
………………………………………………..
The

witness

at the

hearing

was

Dr. Arthur J. Altmeyer,

who held several offices in the

Roosevelt administration
………………………………………………..
He was a

member

of the

first Social Security Board,

and by

1946

became the

Social Security Commissioner,

retiring

in

1953
………………………………………………..
During this

hearing,

various parties stated that

social security

was not a contract:
………………………………………………..
At page 918:
………………………………………………..
“Mr. Altmeyer:

* * * There is no individual contract

between the

beneficiary

and the

Government
………………………………………………..
“Mr. Dingell:

Congress

knew that,

did it not?
………………………………………………..
“Mr. Altmeyer:

Yes,

of course

I am sure it did

* * *
………………………………………………..
“Chairman Curtis:

The

individual * * * has no contract?

Is that your position?
………………………………………………..
“Mr. Altmeyer:

That is right
………………………………………………..
“Chairman Curtis:

And

he has no insurance contract?
………………………………………………..
“Mr. Altmeyer:

That is right”
………………………………………………..
At page 937:
………………………………………………..
“Chairman Curtis:

We came to an

agreement

on one of our

major premises,

that

this was no insurance contract,

and

the words did not come from me
………………………………………………..
They were

volunteered

by

Mr. Altmeyer”
………………………………………………..
At page 968:
………………………………………………..
“Mr. Winn:

* * * Mr. Altmeyer,

there being no contractual obligation

between the

Government

and the

worker,

it follows,

does it not,

that the

benefit payments

under

title II

of the

Social Security Act

are

merely statutory benefits

which

Congress

may

withdraw

or

alter

at any time?”
………………………………………………..
At page 969:
………………………………………………..
“Mr. Winn (reading):

‘These are

gratuities,

not based on contract * * *
………………………………………………..
Moreover, the

act

creates no contractual obligation

with respect to the

payment of benefits
………………………………………………..
This

Court

has pointed out the difference

between

insurance

which

creates vested rights,

and

pensions

and

other gratuities,

involving

no contractual obligations,

in

Lynch v. United States,

(292 U.S. 571, 576-577)”
………………………………………………..
At page 994:
………………………………………………..
“Mr. Altmeyer:

I have answered your question, sir
………………………………………………..
If you will refer to

section 1101,

you will find,

as you

read into the record,

that

there are no vested rights,

that

Congress may create different rights * * *”
………………………………………………..
At page 996:
………………………………………………..
“Mr. Winn:

We have also established

that

there is no insurance contract

between the

Government

and the

worker

within a

covered wage

whereby the

rights

and

obligations

of a

party

are set;

that is correct,

is it not?
………………………………………………..
“Mr. Altmeyer:

No
………………………………………………..
You did not establish that
………………………………………………..
That has been

self-evident

since the law was passed in 1935”
………………………………………………..
At pages 1013-14

(the Chair’s concluding remarks):
………………………………………………..
“Chairman Curtis:

Mr. Altmeyer,

it is

apparent

that the

people of the country

have no insurance contract
………………………………………………..
That

does not mean

that

I do not want to do my full part

to

do justice to them

and to

carry out

and

make good

on the

moral commitment

that has been made to them
………………………………………………..
Yet,

notwithstanding the fact

that

they had no insurance contract,

it remains true

that the agency

under your direction

repeatedly in public statements,

by pamphlets,

radio addresses,

and

by other means,

told the people of the country

that

they had insurance
………………………………………………..
I think

a number of people

were misled by that”
………………………………………………..
The position asserted by

Mercier

that

social security

is a

contract,

visible

or

invisible,

thus

does not manifest itself

in the

decisions

of

federal courts
………………………………………………..
See also
_____________________________________________
McLughlin v. CIR,

832 F.2d 986, 987

(7th Cir. 1987)
—————————————————————–
http://openjurist.org/832/f2d/986/mclaughlin-v-commissioner-of-internal-revenue
—————————————————————–
http://famguardian.org/publishedauthors/LawReviews/WiscLawRvw/UsurpOctJurAuth.htm
—————————————————————–
http://www.justice.gov/tax/CooperMemo.pdf
_____________________________________________
(“The

notion

that the

federal income tax

is contractual

or

otherwise consensual in nature

is not only utterly without foundation

but…

has been repeatedly rejected

by the

courts”);
………………………………………………..
and
_____________________________________________
United States v. Drefke,

707 F.2d 978, 981

(8th Cir. 1983)
—————————————————————–
http://www.irs.gov/Tax-Professionals/The-Truth-About-Frivolous-Tax-Arguments-Section-I-A-to-C
—————————————————————–
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Anti-Tax-Law-Evasion-Schemes-Law-and-Arguments-Section-I
—————————————————————–
http://www.justice.gov/tax/CooperMemo.pdf
—————————————————————–
http://www.fraudsandscams.com/voluntary_compliance.htm
—————————————————————–
http://www.taxprophet.com/tax_scams_articles/QFTPArguments.pdf
—————————————————————–
http://devvyconklin.tripod.com/fakery.html
_____________________________________________
Contentions that

driver licenses

are

contracts

are baseless;
………………………………………………..
see
_____________________________________________
Hershey v. Commonwealth Dep’t. of Transportation,

669 A.2d 517, 520

(Pa.Cmwlth. 1996);
_____________________________________________
and
_____________________________________________
State v. Gibson,

697 P.2d 1216

(Idaho 1985)
—————————————————————–
http://archive.adl.org/mwd/sussman.doc
_____________________________________________
Mercier

also had a

chapter

of his

work

making some

vague contention

about

admiralty
………………………………………………..
There are lots of

phony admiralty arguments

being

promoted

in the

freedom movement,

all

asserting essentially

an

argument

that

admiralty

has invaded

“inland”,

and

“everything is admiralty”
………………………………………………..
I address that groundless argument here
——————————————————————
http://home.hiwaay.net/%7Ebecraft/AdmiraltyJuris.html
_________________________________________________
Mercier

also made snide remarks that the

money argument

relating to

gold,

silver

and

Federal Reserve Notes

that is

popular

with many

is baseless,

but I demonstrate otherwise here
——————————————————————
http://home.hiwaay.net/%7Ebecraft/MONEYbrief.html
_________________________________________________
There are lots of other flaws in

Mercier’s legal argument

about

Invisible Contracts,

but

I will not address them here
………………………………………………..
What is important is that

Phil Marsh

started an

organization

named the

Pilot Connection Society

back at the

end of the 1980s,

and the

central legal argument

that he

promoted

was

based entirely

on

Invisible Contracts
………………………………………………..
Mercier’s

“book”

advocated

that a

citizen

should give

King government

a

wide variety

of

notices

rescinding

the

“Invisible Contracts”,

and

Marsh’s organization

did precisely this

for hundreds of people
………………………………………………..
Marsh

was

prosecuted

and

convicted

and

his appeal appears below:
………………………………………………..
UNITED STATES v. MARSH, 144 F.3d 1229 (9th Cir. 1998)
——————————————————————
http://www.google.com/cse?cx=partner-pub-5347803559129172%3A5886277248&ie=ISO-8859-1&q=UNITED+STATES+v.+MARSH+144+F.3d+122+9th+Circuit++1998&sa=Search#gsc.tab=0&gsc.q=UNITED%20STATES%20v.%20MARSH%20144%20F.3d%201229%201998
——————————————————————
http://law.justia.com/cases/federal/appellate-courts/F3/144/1229/589561/
………………………………………………..
UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

PHILLIP MARSH,

Defendant-Appellant
………………………………………………..
OPINION

NOONAN, Circuit Judge:
………………………………………………..
Phillip Marsh and his five co-defendants appeal their convictions of conspiring to defraud the United States by impeding the collection of federal income taxes and their convictions of related crimes
………………………………………………..
They also appeal their sentences, which, as to Phillip Marsh total a term of imprisonment of 17 1/2 years, as to his wife Marlene a term of 14 years, and as to the other defendants lesser but still substantial periods of prison
………………………………………………..
FACTS AND PROCEEDINGS
………………………………………………..
Phillip Marsh was the founder in 1990 of

The Pilot Connection Society,

often self-identified by its acronym

TPCS
………………………………………………..
Marsh’s enterprise offered its customers the elusive and enchanting prospect of

untaxing themselves
………………………………………………..
The verb

“untax”

entered the language in

political conflict

in

England

over a

formidable tariff

on

foreign grain

and denoted

political action

by the

government
………………………………………………..
(“Who will untax our bread?”

E. Elliott,

Corn-Law Rhymes,

1833)
………………………………………………..
“Untax,”

as used in the present context,

means

freeing oneself from any legal obligation

to pay any

income tax,

federal

or

state
………………………………………………..
To achieve this exceptional state,

TPCS

offered an

“Untax Package”
………………………………………………..
The package

included

Phillip Marsh’s

The Compleat Patriot,

the Constitution of the United States,

Psalm 91,

and

a photograph of Phillip and his wife suitable for framing
………………………………………………..
It also included

“Very basic untax documents and their instructions”
………………………………………………..
Among them were a form letter to be sent to the

District Director of the Internal Revenue Service

stating that the quondam taxpayer had recently found out that the director had been

“attempting to extort money”

from him and demanding that he

justify his jurisdiction

by a

certified copy

of the

director’s designation of authority

from the

Secretary of the Treasury
………………………………………………..
The letter was not to be xeroxed and was to be handwritten because
………………………………………………..
“[i]t takes 3 to 5 times as long to read hand written material as it does to read typed material — anything to slow the IRS down!”
………………………………………………..
Another form letter, to be similarly copied by hand, informed the

the district director

that the

taxpayer

was not a person

under the

director’s jurisdiction
………………………………………………..
The Untax Package

included

another form by which the

taxpayer

revoked

income tax returns

previously signed by him

and

“cancelled”

his signature

on such returns
………………………………………………..
This form was to be retyped by the

taxpayer,

eliminating the

Pilot Connection letterhead,

and to be notarized
………………………………………………..
The

theory

of the

revocation

and

cancellation,

as explained in the

Untax Package,

was that the

IRS

would use

earlier returns

to prove

that the

taxpayer

was aware

of

his obligation

to

file

and

pay
………………………………………………..
The

revocation

and

cancellation

would, so the

Untax Package

suggested,

eliminate this easy evidence of the

taxpayer’s willfulness

in now refusing to file and pay
………………………………………………..
The reason that the

taxpayer

could so readily remove himself from the

taxpaying rolls

was, according to

TPCS,

that

“income tax is voluntary”
………………………………………………..
(SER 32)

If you didn’t want to pay it,

you didn’t have to
………………………………………………..
TPCS

also advised its members

to resort to

“alternative banking,”

that is,

to pay everything by

cash

or

postal money order,

or

to join something called the

National Commodity and Barter Association

and use

“warehouse banking,”

or to have some trusted associate open an account for one in the associate’s name, or to establish, with TPCS’s help, an

“offshore trust”
………………………………………………..
The reason for adopting one of these

alternative styles

of

money management

was that if you

opened a checking or savings account

you agreed

“that the money belongs to the bank from that moment on,”

with the implication that the

bank

would surrender the money

on levy

by the

IRS

(SER 36)
………………………………………………..
Members

were provided with

forms,

to be

recopied

and

notarized,

of

revocation

of

bank signature cards

(SER 35)
………………………………………………..
Another practical precaution the

TPCS member

was advised to take, in order to assure that

his emancipation

from

taxation

was effective,

was to

file W-4s

with his employers

claiming as many exemptions

as he had thousands of dollars of

income
………………………………………………..
For example,

if he earned $30,000,

he was to

file a W-4

claiming 30 exemptions
………………………………………………..
The member was assured by

TPCS

that there was

no limit

to the number of exemptions

he could lawfully claim

(SER 342)
………………………………………………..
No mention was made of

any duty

to have a reason

for

claiming an exemption
………………………………………………..
Untax Packages,

the contents sometimes different in unessential detail,

were sold by

TPCS

for a price that varied for the occasion
………………………………………………..
At the start the price was over $6,000.

(SER 8)
………………………………………………..
The price announced in

January 1993

was

“$2,100 or 10% of your existing tax problem (if any), whichever is higher.”

(SER 380)
………………………………………………..
As of

January 31, 1990,

TPCS

had only three purchasers

of the

Untax Package
………………………………………………..
By

December 31, 1993,

TPCS

recorded 3,848 purchasers

and

income from them of

$7,638,625.

(SER 19)
………………………………………………..
TPCS

had ordinary members who did not purchase the

Untax Package

but who did pay $45 for membership
………………………………………………..
By the end of 1993 there were 12,617 in this category

(SER 19)
………………………………………………..
They received

TPCS’s magazine,

The Connector
………………………………………………..
The magazine carried the subtitle

“The Voice of Freedom”

and ran a facsimile of an

American flag

as its logo
………………………………………………..
Its pages repeated at their foot the mantra of the Society,

“Income Tax Is Voluntary!”
………………………………………………..
The Connector

informed its readers that there was

no law

making anyone liable

for

income tax
………………………………………………..
TPCS

had a cadre superior to that of mere members, constituted by those admitted to the status of

Associate Member
………………………………………………..
An

Associate Member

had the right

to sell the publications

of

TPCS
………………………………………………..
He paid

$10,000

to acquire the franchise and the

confidential instructions

on marketing that accompanied the franchise
………………………………………………..
By

December 31, 1993,

there were

730 persons

who had been admitted to this

advanced status
………………………………………………..
Apparently some associates got a discount, for the total paid by them recorded in the Society’s book was

$5,281,010.

(SER 19)
………………………………………………..
Phillip Marsh

conceived the idea of

TPCS
………………………………………………..
His wife Marlene joined him in marketing it
………………………………………………..
Together they traveled the

United States

soliciting the purchase of memberships and

Untax Packages

and speaking at

seminars

and

conferences

intended to promote

TPCS
………………………………………………..
Marlene’s daughter,

Jill Spencer,

was an

Associate Member

and the

office manager,

in the latter capacity opening and distributing mail sent to

TPCS,

logging cash received and responding to some customer complaints
………………………………………………..
Her husband

Darrell

was also an

Associate Member
………………………………………………..
He became

TPCS’s

General Manager,

overseeing staff and publications,

revising the

Untax Package,

and writing in his own name in

The Connector,

to explain why paying

income tax

was optional
………………………………………………..
A family operation,

TPCS

was aided by

Joseph Coltrane, alias John Campion,

and by

Douglas Carpa
………………………………………………..
Coltrane

was the

National Coordinator

of the

TPCS sales force
………………………………………………..
Carpa

was not a TPCS member

but from approximately

May 1991

to

June 1992

assisted the marketing of memberships in

TPCS

by putting together trusts in which

TPCS members

might hope to hide their assets from the

IRS
………………………………………………..
He offered his drafts of

trust instruments

only to those who purchased the

Untax Package
………………………………………………..
He assured

members

that

his trusts

were

“old and cold”

and would work to cure even pre-existing problems with the

IRS

because the

trusts

would be predated to a time

before an

IRS lien
………………………………………………..
In its publications

TPCS

asserted that it was

not a tax protester movement,

that it

did not deny the constitutionality

of the

Internal Revenue Code,

and that

it did not maintain

that

Congress lacked the power

to

tax income
………………………………………………..
TPCS

simply taught that

Congress

had not exerted that power

and that the

IRS

was

“a private corporation”

engaged in lawless efforts to extract money from Americans not obliged to pay
………………………………………………..
TPCS

characterized its own teachings as

educational

and added that they were the

exercise of free speech,

protected by the

First Amendment

from prosecution
………………………………………………..
TPCS

was aware that the

IRS

challenged its view of the law,

an awareness reinforced by the rejection that

TPCS’s Untax Package

received when put into practice by members
………………………………………………..
The

IRS

by

1991

was aware of

TPCS

and alert to its raison d’etre
………………………………………………..
In

February 1992

an

affidavit

filed by

IRS Special Agent Diane Messer

characterized

TPCS

as an

“illegal tax protester organization”

and sought a

search warrant

authorizing the seizure of documents pertaining to

TPCS

and to

Phillip and Marlene Marsh
………………………………………………..
The search was to be carried out at the Marshes’ home, which they used as the Society’s headquarters
………………………………………………..
Pursuant to the

warrant,

a comprehensive seizure

was made of the

correspondence,

computers,

and

file cabinets

of the

Society
………………………………………………..
Apparently as a response to the search, on

August 12, 1992,

in

Stockton, California,

Phillip and Marlene Marsh

and

Jill Spencer

signed two papers

alleging

that

certain persons

were

indebted to them

in the amount of

$350,000 each and seeking to place a

commercial lien

on the

property

of the

debtors
………………………………………………..
These persons were

Agent Messer

and

three other IRS agents

involved in the search;

the

United States Magistrates

who had authorized the search;

three United States attorneys

in the

Eastern District of California

and

one United States attorney

in the

Northern District;

Lawrence Karlton,

Senior District Judge

of the

Eastern District;

and

California Superior Court Judge

Jeremy Fogel
………………………………………………..
The liens were filed in

Nevada

and

Washington
………………………………………………..
A year later, in

February 1993,

a

second affidavit

executed by

Agent Messer

asserted that

TPCS

was

“so permeated with involvement with illegal activities”

that a comprehensive search could not separate the few innocent items

“from the vast amount of material which will be relevant evidence of the criminal violations”
………………………………………………..
The Marshes then moved from

California

to

Colorado

and from their home there continued their enterprise under the name the

Liberty Foundation
………………………………………………..
A

third affidavit

executed by

Messer

led to the

comprehensive search

of the

Colorado office

in

December 1993
………………………………………………..
A

grand jury

had already, on

November 29, 1993,

indicted the defendants for

conspiracy to defraud the United States
………………………………………………..
The defendants moved unsuccessfully to suppress the material seized by the government from their files
………………………………………………..
Phillip Marsh

sought with equal unsuccess to introduce a report by a psychiatrist who evaluated him and found him to suffer from delusions; the psychiatrist’s proffered testimony was excluded in limine on the government’s motion
………………………………………………..
Trial followed in the district court for Northern California running slightly over three months, from

August 29, 1994

to

November 30, 1994
………………………………………………..
The jury was unable to agree on the principal counts
………………………………………………..
The

United States

obtained a

superseding indictment

charging all six defendants

with

conspiracy to defraud

the

United States

by

obstructing the lawful functions

of the

IRS,

in particular by their operation and promotion of

TPCS

and the

Untax Package
………………………………………………..
The two Marshes and the two Spencers were personally charged with

tax evasion

and

failure to file a return
………………………………………………..
The indictment also charged all defendants except Carpa with numerous counts of

mail fraud

in the sale of the

Untax Package

to over 3,000 persons
………………………………………………..
The two Marshes and Jill Spencer were charged with

endeavoring to impede the administration of the tax laws

by filing the

commercial liens

in

Nevada

and

Washington

against the

government officials

named in them
………………………………………………..
The

government

announced in its

Status Conference Statement

that it intended to introduce

“as much of its evidence as possible through `summary witnesses'”
………………………………………………..
The defendants filed a

joint motion in limine

opposing this procedure:

“it appears that the government intends to avoid cross-examination of the alleged mail fraud victims by hearsay summaries”
………………………………………………..
The

government

had proposed that

IRS agents

read excerpts from the

TPCS files
………………………………………………..
The defendants objected that the material from

TPCS files — complaint letters from persons saying that they had been deceived by TPCS — fell within no exception to the hearsay rule
………………………………………………..
The defendants asserted that the procedure would violate their

Sixth Amendment right

to confront their accusers
………………………………………………..
Citing

Coy v. Iowa,

487 U.S. 1012

(1988),
——————————————————————
U.S. Supreme Court
No. 86-6757
APPEAL FROM THE SUPREME COURT OF IOWA
——————————————————————
https://supreme.justia.com/cases/federal/us/487/1012/case.html
————
APPEAL FROM THE SUPREME COURT OF IOWA No. 86-6757
Iowa District Court for Clinton
County
——————————————————————
http://laws.findlaw.com/us/487/1012.html
——————————————————————
http://www.oyez.org/cases/1980-1989/1987/1987_86_6757
_________________________________________________
where the

Supreme Court

held it

unconstitutional

to place a screen shielding the accusers from the defendant,

the defendants here said:

“Agent Durrette would be the screen between the defendants and their alleged victims”
………………………………………………..
A hearing was held the following week before the judge who had presided at the first trial in order to schedule the time allowed for trial
………………………………………………..
The court expressed dissatisfaction with the amount of time

“wasted”

by both sides in the first trial
………………………………………………..
The court stated that the jury had heard the details of the untaxing scheme

“ad nauseam.”
………………………………………………..
The government argued that the first jury had been

“affected by the government’s inability to present the case in a way that educated them as to what our theory of the case was, what our evidence meant, during the presentation of the evidence.”
………………………………………………..
The court asked,

“What stopped you?”
………………………………………………..
The government replied that the court had stopped it from having a witness read from the material seized in the searches
………………………………………………..
The government went on to say that it had to prove the defendants’ state of mind as to both the mail fraud counts and the tax evasion counts
………………………………………………..
The court:

“It seems to me that is proved by the quality of the evidence as opposed to the quantity of the evidence.”
………………………………………………..
The court went on to say:

“I thought the victims were a disaster for the government . . . .

[T]he victims were particularly unsympathetic

They were people who were already in serious trouble with the Internal Revenue Service, were essentially tax cheats themselves; and were put on the witness stand with the representation that they were somehow victimized by the defendants . . . . And I’m convinced that your case ran aground with that first group of witnesses.”
………………………………………………..
The district court never formally ruled on the defendants’ in limine motion to exclude the complaint letters; the government concluded that it had a green light
………………………………………………..
On

November 9,

the government offered

Agent Durrette

to summarize material taken from the files of TPCS
………………………………………………..
The defendants stipulated that the material came from the files — the government would not have to prove where each piece of correspondence came from
………………………………………………..
The court described the stipulation
………………………………………………..
It was

“that these TPCS client file documents would simply be stipulated as to their admission into evidence without the necessity of putting a witness on the stand to lay any foundation as to these documents

And the stipulation would be that these documents were found in one or the other of the facilities associated with the Pilot Connection Society.”
………………………………………………..
The government answered, “Yes.”
………………………………………………..
Agreeing, the defendants again vigorously objected to the government’s presentation of the files through testimony about their contents by Durrette
………………………………………………..
The government replied that proof of the defendants’ state of mind was

“the heart and soul”

of its case
………………………………………………..
Durrette took the stand
………………………………………………..
The government had prepared an extensive file of material taken from TPCS with duplicates of a number of letters to be given as handouts to the jury
………………………………………………..
The material consisted substantially in statements of government officials as to what the income tax law was, statements of other persons including officers of the Church of Jesus Christ of Latter Day Saints on the obligation to pay income taxes, and letters from purchasers of the Untax Package complaining that the Package did not work or, worse, that they had been fraudulently induced to buy it
………………………………………………..
The defendants objected repeatedly to the procedure — to Durrette’s reading of views on the law as argument by the government, to Durrette’s reading of selected passages from the correspondence as not summarizing but highlighting, and to the reading of the complaints as violative of the Confrontation Clause
………………………………………………..
Every objection was overruled by the trial court
………………………………………………..
The second trial was two months shorter than the first
………………………………………………..
On

December 13, 1995

the jury found all six defendants guilty of violating

18 U.S.C. § 371
——————————————————————
http://www.law.cornell.edu/uscode/text/18/371
_________________________________________________
by conspiring to defraud the

United States

in the collection of income taxes
………………………………………………..
Phillip and Marlene Marsh and Jill Spencer were convicted of two counts of violation of

26 U.S.C. § 7212(a)
——————————————————————
http://www.law.cornell.edu/uscode/text/26/7212
_________________________________________________
by corruptly endeavoring to obstruct the administration of the income tax laws by filing the liens
………………………………………………..
Both the Marshes and both the Spencers were convicted of violating

26 U.S.C. § 7201
——————————————————————
http://www.law.cornell.edu/uscode/text/26/7201
_________________________________________________
by tax evasion and violating

26 U.S.C. § 7203
——————————————————————
http://www.law.cornell.edu/uscode/text/26/7203
_________________________________________________
by failing to file tax returns
………………………………………………..
Both Marshes were acquitted of ten counts of mail fraud and convicted of ten counts of mail fraud in violation of

18 U.S.C. § 1341
——————————————————————
http://www.law.cornell.edu/uscode/text/18/1341
………………………………………………..
Both Spencers were similarly acquitted, Darrell of five, Jill of nine counts, and similarly convicted of nine mail fraud counts; and Coltrane was convicted of six mail fraud counts
………………………………………………..
The court denied

Rule 29 motions,

including motions by the Marshes and Jill Spencer to dismiss the obstruction charges on the ground of lack of venue
………………………………………………..
On

June 26, 1996

the court pronounced sentence
………………………………………………..
Phillip Marsh was sentenced to 5 years imprisonment for conspiracy to defraud the United States; 5 years imprisonment for each of his ten mail fraud convictions; 5 years imprisonment on each of two convictions of tax evasion; 3 years imprisonment for each his two endeavors to impede the administration of the tax laws; and 1 year imprisonment for each conviction of willful failure to file tax returns
………………………………………………..
The sentences for conspiracy, tax evasion and 9 of the 10 mail fraud counts were to be served concurrently with each other
………………………………………………..
The 3 year sentences for the endeavor to impede were to be were to be served consecutively to the other counts and to each other
………………………………………………..
The 1 year sentences for the two failures to file counts served consecutively to each other and the other counts
………………………………………………..
The sentence on the two tax evasion counts and two failure to file counts totals 7 years
………………………………………………..
The 5 year sentence for the tenth mail fraud charge was to be served consecutively to the extent necessary to produce a total sentence of 17 1/2 years
………………………………………………..
Marlene Marsh was sentenced to 5 years imprisonment for conspiracy to defraud the United States; 5 years each for the 10 mail fraud counts, 5 years each for the two tax evasion counts, 3 years on each of the 2 counts of endeavor to impede, 1 year on each of the 2 convictions of willful failure to file
………………………………………………..
The 3 year sentences for endeavor to impede were to be served concurrently with each other and consecutively to the other sentences, the 1 year sentences for failure to file were to be served consecutively to each other and to the other sentences, and the 5 years for the two tax evasion counts and 10 mail counts were to be served concurrently to each other and consecutively to the other sentences to the extent necessary to produce a total sentence of 14 years
………………………………………………..
The sentence on the two tax evasion counts and two failure to file counts totals 7 years
………………………………………………..
Darrell Spencer was sentenced to 5 years imprisonment for conspiracy to defraud the United States, 5 years on each of 9 mail fraud convictions, 5 years on each of 2 tax evasion convictions, and 1 year on each of 2 failure to file convictions
………………………………………………..
The sentence for conspiracy, the 2 tax evasion sentences, and 8 of the 9 mail fraud sentences were to be served concurrently, as were the sentences for failure to file
………………………………………………..
The sentence on the two tax evasion counts and two failure to file counts totals 5 years
………………………………………………..
The ninth mail fraud sentence was to be served consecutively to the other sentences to the extent necessary to produce a total of 7 1/4 years
………………………………………………..
Jill Spencer was sentenced to 5 years of imprisonment for conspiracy to defraud the United States, 5 years on each of 9 mail fraud convictions, 5 years on each of 2 tax evasion convictions, 1 year on each of 2 failure to file convictions, and 3 years on each of 2 convictions to impede
………………………………………………..
The sentences for conspiracy, tax evasion and the 9 mail fraud counts were to be served concurrently, as were the sentences for failure to file
………………………………………………..
The sentence on the two tax evasion counts and the two failure to file counts totals 5 years
………………………………………………..
The two 3 year sentences for corrupt endeavor to impede were to be served concurrently to each other but consecutively to the other sentences to the extent necessary to produce a total sentence of 7 1/4 years
………………………………………………..
Coltrane was sentenced to 5 years for a conspiracy to defraud the United States and 1/4 year imprisonment on one count of mail fraud, the sentences on the other counts of mail fraud to be served concurrently
………………………………………………..
Carpa was sentenced to 4 3/4 years on conviction of conspiracy to defraud the United States
………………………………………………..
The defendants appeal
………………………………………………..
ANALYSIS
………………………………………………..
All defendants contend that they were denied the right to confront the witnesses against them when Agent Durrette read to the jury excerpts from material found in the defendants’ files
………………………………………………..
The following are from the excerpts read aloud to the jury by Agent Durrette:

(The excerpts are exact, but not given in full; the authorships and dates are as read)
………………………………………………..
1. “Some

so-called tax protesters

are

making speeches

and

offering seminars

around the country

at which

serious misrepresentations

about the

tax laws

are

being presented

to the

public

as

fact”

Fact Sheet
………………………………………………..
2. “Indeed, it is strange how the mind justifies things

For example, the way you

justify `untaxing’ people

by

blatantly misrepresenting the truth

about

your so-called `untaxing’ program

for the

sole purpose

of

lining your pockets

with

unsuspecting victim’s hard earned money

while

you sit idly by and watch

the

Franchise Tax Board

and

Internal Revenue Service

come in and

steal everything they have — knowing full well

that

this will be the outcome”

Letter from

Shawn O’Connor,

7/6/92
………………………………………………..
3. “Why would I sent you a

check

for

$8,745

when

you have not

got the lien off my home?”

Letter from

Curtis Howard

5/29/91
………………………………………………..
4. “To date, the

Pilot Connection System

has not given any relief

and

has only compounded my tax problems

On the basis of fraud,

I herewith

demand the return

of my

$2,000 plus $499.”

Letter,

6/3/91
………………………………………………..
5. “[The

failure to succeed

in

not paying taxes]

makes our statement,

`stop paying taxes permanently and legally’

far from being the truth”

Letter from

Hugh Bodey

7/6/91
………………………………………………..
6. “You

did not `untax me legally and permanently’

as promised — and,

I am confident,

that and

if and when I have to go to court,

you would drop me

as you have others

that I am hearing about”

Letter from

Hugh Bodey,

8/10/91
………………………………………………..
7. “The

program

was

sold to me

under,

what I now consider

false pretenses

In fact,

I would go so far as to say

it was out and outright

fraud”

Letter from

Roger Hawks,

8/12/91
………………………………………………..
8. “Due to the

facts

provided to us by you,

some of which we now know

to be

out and out lies,

we signed on with your

organization”

Letter from

Arthur and Donna Fuller,

8/15/91
………………………………………………..
9. “Bob Kane [a lawyer]

told

our company attorney

(see memo)

that I had a

zero percent chance

of

ever eventually winning

against the

IRS”

Letter

8/16/91
………………………………………………..
10. “Despite all the

Pilot Connection’s

and

Greg Galaski’s

efforts,

I was

given two options

by a

federal judge:

I could

comply with the court’s order in person

or

at the IRS office,

or

I could comply

from the

adult detention center

in

downtown Los Angeles”

“I am asking nothing of the

Pilot Connection

now,

Darrell,

because

I don’t believe in it anymore

The only thing I have asked

is that

Don Held

make good on his promise

to

give me back

the

money I paid him

if the

untax program didn’t work”

Letter from

Dan Barwick,

8/3/91
………………………………………………..
11. “When I joined the

Connection

I thought they had found that

simple key

to

avoid taxes

and a

`voluntary’

part of the

IRS system,

if people qualified

As it appears now

it doesn’t work

so

I have decided

to look for work elsewhere”

Letter from

Ogden Kraut,

8/15/91
………………………………………………..
12. “When I joined the

Pilot Connection,

I believed what I was

told

and

being naive

about

patriot issues

didn’t have

the

knowledge

to

spot defects and lies

in your program”

Letter,

10/14/91
………………………………………………..
13. “I am in a situation now

that

I have no income

and

I had to borrow

the

$4,000

that

I paid

to the

Pilot Connection

and

I’ve received nothing

but broken promises and lies”

Letter,

11/1/91
………………………………………………..
14. “When I first became involved

with your group

I believed what you were saying

was true and factual

But the longer I used the

Pilot Connection’s system

the more it becomes evident

the

system does not work”

“You have been dishonest

in your allegations

and

letter process

and

I feel

that

I cannot do business with

anyone

or

any company

or

group

that is deceitful”

“You have

fraudulently taken money from me

and at this time

I wish to have all monies

returned to me”

Letter,

11/29/91,
………………………………………………..
15. “I cannot sell a bill of goods

to someone

that

I can’t even deliver

for

myself and my wife

We did not have a problem

when we started this program,

but

we seem to be developing one

and

my wife is really scared,

because

she is afraid of going to jail

and

losing her job

where she has 26 years service

and has

only 4 years to go

before retirement”

Letter from

Darrell Hoover,

12/18/91
………………………………………………..
16. “We have found,

in doing further research,

at the law library,

that

your organization

is

teaching incorrect principles

dealing with

some very serious legal matters”

Letter from

Robert and Leah Aycock,

12/18/91
………………………………………………..
17. “I don’t think

you realize

the

sad situations

a lot of us are in

You talk a good line over the phone,

but

where’s the beef?”

Letter to

Pilot Connection/Phil Marsh
………………………………………………..
18. “We have done everything

in the pamphlet

plus every step

Jim Caler said

and still problems

Federal and state

has

attached both of our wages again,

but

this time

the

interest and penalties

are even higher . . .

Take us off

the

Pilot Connection”

Letter,

1/22/92
………………………………………………..
19. “This is

our letter of resignation

due

to the

fact

that I believe

your material and system

of

removing people

from

state and federal taxes

is fraudulent”

Letter,

3/2/92
………………………………………………..
20. “I paid you

$15,000

to take care of

my liens and levies

and

I expect to see this accomplished

I have become very insecure

with the

lack of performance”

Letter,

2/5/92
………………………………………………..
21. “Now I don’t know what I have to do

I still have

a lien against me

They still

did not remove the lien”

Letter,

2/25/92
………………………………………………..
22. “Everything we have been told

has been wrong

and

we no longer

have any confidence

with you

and

your organization”

Letter

5/16/92
………………………………………………..
23. “I learned

that

the rest of your stupid arguments

are

`frivolous’ arguments

I call them

`stupid’

because

the courts

are

getting pissed off

They told us [patriots]

over and over

that these are

frivolous arguments

that

they don’t want to hear any more

They take the attitude,

and rightly so,

that

we are wasting their time,

and

the taxpayers’ money,

with arguments

that

have repeatedly lost

They have no patience

with people

using

these stupid arguments”

Letter from

Roy Buchanan
………………………………………………..
24. “I am writing

to

express my disappointment

in

your `untaxing’ program . . . .

I also followed

your lien and levy procedures,

but

to no avail

I still have

a

tax lien on file

and

levy notices

still follow me”

Letter from

Les Johnson

8/11/92
………………………………………………..
25. “[My attorney said]

that

the package

was

not legally sound

for me”

Letter from

Michael Hutton

9/9/92
………………………………………………..
26. “According to this

final notice,

I do not believe

that I have

been untaxed

by the

Pilot Connection”

Letter

dated 9/28/92
………………………………………………..
27. Your untax program

costs me

$1,100

and

was absolutely worthless . . . .

Thanks a lot

for

wasting my hard-earned

retirement savings”

Letter from

David Mayo
………………………………………………..
28. “Upon further

investigation and study

I have found

your information

to be

incomplete and misleading

The damage done

as a result

of

placing my hope and trust in you

has

created a complexity

of

criminal violations

that

could cost me my

family,

home,

business

and, most importantly,

my personal freedom”

Letter from

Ina Gregory

10/1/92
………………………………………………..
29. “He inferred that the

IRS

does not pay attention to the

notice of revocation

and

other strategies used

by the

Pilot Connection

That I might end up paying

the

IRS

and the

P.C.,

that the

Pilot Connection

was a scam

and

Phil

is mainly out to get

people’s money”

Letter

10/28/92
………………………………………………..
30. “What kind of people are you anyway?

You take my money

and

your organization

does not perform

what you promise

and

then become abusive

and

threatening to me? . . .

I also want my

$3,500

back A.S.A.P.”

Letter

dated November 1992
………………………………………………..
31. “I have talked at length

with people in my town

about all that I read

in your book

And most of the response

I have gotten is — `sure,

I know someone honest tried this

and

they are serving time in Leavenworth'”

Letter

11/1/92
………………………………………………..
32. “Pilot Connection Society

has

made false claims

to its

untaxed members,

which

has misled them

and

also places them

and

their families

in

jeopardy

of

being convicted

of

tax evasion”

Letter

dated 11/18/92
………………………………………………..
33. “They levied my wages anyway

What kind of bull is this?

I would like my

$1,500 refunded

How can you folks

in

good conscience

keep on with this crap?

Like I said,

I do

want a refund

Because

you did nothing at all to earn

the

$1,500

It

seems to be a big joke”

Letter from

Chris Yost
………………………………………………..
34. “This letter will serve

as

my formal resignation

from the

Pilot Connection Society;

effective upon receipt

My decision

to

enter into an agreement

with

your organization

was based on

misrepresentations

made by

you

and

your employees

The

assistance

and

services

I was led to believe

I would receive

was never provided

I have witnesses

and

proof of this fraud”

Letter from

Ed Maxim
………………………………………………..
35. “In today’s trial,

the

judge

looked at the

P.C. material I had included

in my brief. . . .

The judge ridiculed it;

said that

all of those types of approaches

had long since

been tried

and

rejected”

Letter from

Albert Baxter

12/8/92
………………………………………………..
36. “You

have claimed

to

have `untaxed’

in excess

of

17,000

people

of which surely

1 percent

would have received

the

letters

from the

IRS . . . .

I am not asking for even

1 percent

of

documented proof

of

these letters

but

only of 1/2 percent

of

documented proof

which would be

85 letters

(I don’t even believe

that

you can provide

10 percent

of that)”

Letter

1/13/93
………………………………………………..
37. “We trusted

Liberty Foundation (Pilot Connection)

only

to realize

that our

3 and a half year battle

with the

IRS

was

all for nothing

It disrupted our lives

During wage garnishments

we

had no money

Try explaining

to the

children

why there won’t be

any Christmas

Sob stories to you,

real life to us

We lost a lot

of

money

by trusting

in the

Liberty Foundation

Worse than that,

we lost our liberty,

the very thing your company offers”

Letter

11/3/93
………………………………………………..
The government

argues vigorously

that

this mass of accusations

was admissible

because

the jury was instructed

that

the accusations were admitted

not for the truth of the statements

but to show

the

state of mind of the defendants

That was certainly

the

government’s rationale

The difficulty

with

the government’s position

is that

the jury was not instructed

to

limit its consideration

to the

defendants’ state of mind

In its brief on appeal

the

government points

to

a statement of the court

made on

November 20

in reference to

a document then read to the jury

This instruction

has

no apparent relevance

to

the documents read to the jury

on

November 9

An examination

of

the record

on

November 9

shows that,

after being reminded

of

the defendants’ in limine motion,

the trial court

told the government

to proceed

At this time,

at the start

of

Durrette’s reading,

the jury

was

given no instruction whatsoever

as

to its purpose or limits
………………………………………………..
Both the

prosecution

and

defense

counsel

stated that they had

“cautionary instructions”

to offer

The government

said its

was

the instruction

that

the court

had given during

the

initial jury instructions

The court,

in fact,

gave no instruction,

so we

are

uncertain what was offered

on

November 9

However,

we have reviewed

the

preliminary jury instructions

to see

if they did contain relevant cautionary words

The

most relevant

of

these instructions

are

as follows:
………………………………………………..
Evidence

may

be introduced

for

the limited purpose

of

establishing

that

the defendants were aware

of

materials that expressed opinions

in conflict

with

those expressed

by the

Pilot Connection Society

regarding

the success

of

a tax-related program

marketed by the tax — by the

Pilot Connection Society

Before you may consider

any such evidence

against a particular defendant,

you must find

that

the defendant knew

of

the existence

of

these materials

or

their contents

(Tr. 11/2/95, vol. 2, at 143)
………………………………………………..
An intent to defraud

may

be demonstrated

by

the scheme itself

Similarly,

the defendant’s knowledge

of

a false statement

or

his

or

her

reckless indifference

to

the truth

or

falsity

of

that statement

can demonstrate

an

intent to defraud

(Id. at 149)
………………………………………………..
In determining

whether or not

the

government proves

that

a defendant acted

with

an intent to defraud

and

to obtain

money

or

property

by

means

of

false promises

or

statements

or

whether defendant acted in good faith,

you must consider all

of

the evidence

in

the case bearing on defendant’s statement

(Id. at 150)
………………………………………………..
None

of

these instructions limit

the

jury’s consideration

of

material

from

the files

for

the truth

of

what is contained in them
………………………………………………..
The

first time

that

the court

told

the jury

why

the documents

were

being read — sometime into the reading — the court said,

“And it’s clear

from

the court’s instructions

to

the jury — and,

ladies and gentlemen,

if any of you

have

any questions,

please let me know

But

it’s clear

that

the documents themselves

are

the evidence

And they

are

being introduced

to

show what documents

were

at the various locations

at

the various times

that

the witness testified about”

A little later in response

to

another objection

from

the defendants,

the court said:

“This is a document

in

the files

of the

Pilot Connection Society

found

on the date indicated,

and

that’s what the document

is

being offered for

Again,

is there any question

that

any juror has

that

that is the evidence

which

is being offered?”

Neither of these instructions

tells the jury

not to consider

the

truth of the matters read
………………………………………………..
The

first time

an instruction

on

the defendants’ state of mind

was given

was in reference

not to accusations against TPCS

but

to an objection

to

Durrette reading

from

an IRS tax manual

found in the files:

“The court is permitting

the government to argue cases

that

have been overruled

as

a matter of law

and

citing legal principles

that

are no longer valid

as if that’s notice of anything,

and

to that I most strenuously object

and

move to strike”

The

court responded:

“Well,

the objection is overruled

This is clear

this

is an IRS tax manual

The

exact current status

of

the propositions

of

law referred to in the manual

are

not issues

for

the jury to decide

They

are not necessarily part

of

the instructions

What this is being offered for

is

a document

that

was in the files

at

the place

and

at the time indicated

by

Mr. Durrette

And

that bears on it being offered

with respect

to

the intent issues

in

this case vis-a-vis

the

present defendants

But

we are not here to argue the law”

(Tr. 11/9/95 at 78-79)

This instruction only indicates

the purpose

of

the reading of material

on

the tax laws
………………………………………………..
To the next objection by defendants

the court said:

“Counsel,

I have been very patient this morning

Perhaps

that’s

a change in my attitude,

but

I am beginning to lose patience

You

have made a number of objections

to

this evidence

I have ruled on these

It’s clear

what

the evidence is being offered for

The jury

has

been repeatedly instructed on this

The jury

has

been told

that

what they are receiving

are

excerpts of documents

that

are being admitted into evidence,

and

for illustrative purposes

Ms. Teters

and

the witness

are

going through

and

pointing out certain things

that

the government

contends are of significance

Now,

it’s quite clear

what

is going on,

and

it need not be a process

that

is periodically punctuated

by

speechifying by lawyers

Your objections are preserved,

and

so there isn’t any need

for

undue interruption

and

prolongation of this process”
………………………………………………..
The

first time

any instruction

regarding

complaint letters

or

similar materials

was given

was

much later

in

Durrette’s testimony

when

he read

from

a Clarion Ledger,

Jackson, Mississippi,

editorial

dated March 28, 1990,

which stated:

“Tax protesters

become

a part

of

the con job

that

is played

on

the American people”

Counsel

for

the defendants objected:

“I am at a loss

as

to exactly what these editorial comments

are

providing notice of

except

the opinion

of

someone who wrote an editorial”

The court responded:

“This is simply being offered

for

the state of mind

of

the defendants”

(Id. at 111-12)

Much later

in

Durette’s reading,

a

letter

of

Rudy and Gloria Medina

resigning from TPCS

was

read

followed

by

a complaint letter

dated September 3, 1991

The defense again objected

to

these letters as hearsay

The court stated again:

“Well,

as we

discussed in the past,

this

is being offered

for

the state of mind

of

the defendants”

(Id. at 185)
………………………………………………..
It is apparent

from

this review

that

on three occasions

the jury

was told

that

particular documents

being read

related

to the defendants’

“intent”

or the defendants’

“state of mind”

At no time

was

the jury instructed

that

they were not to consider

the accusations

as conveying truth

about the facts alleged in them

At no point

was

the jury told

that

these were limiting instructions

which

confined the way

they must look at the evidence
………………………………………………..
In the

first of the rulings

that

responded to defense objections,

twice repeated,

the court

told the jury merely

that

the documents being read

had

been found at TPCS headquarters

The court assumed

that

instructing the jury

that

what was being established

by

the reading

was

that the documents were found

at TPCS headquarters

operated as a restraint

on

the jury’s use of the documents

But

for all the jury was instructed,

it could do whatever it wanted

with

what was found at TPCS headquarters
………………………………………………..
If these accusations

were

to be admitted,

it

was incumbent

on

the court

to

give clear instruction

to

the jury

distinguishing

what they could treat

as

showing the knowledge of defendants

and

what they could not treat

as evidence of crime

Aside from

the three brief

and

particular references cited above,

no instructions at all

were

given on this vital point

The

three brief references

were

entirely insufficient

to clarify a concept

that

even for lawyers

is not an easy one — the difference between

taking a statement for its truth value

and

limiting it simply

to

the effect

of

the statement

on

the mind

of

the person exposed to it

Even to

a person trained in the law

it takes a mental effort

of

some magnitude

to

hear a letter strongly manifesting

the mind of the letter-writer

as

to the truth of events

the letter-writer says

have happened

and

to distinguish

between

the asserted truth

and

the effect of the communication

on

the mind of the recipient

of the letter

There are cases

in which such letters

have

been admitted to show

the knowledge of the recipient,

See e.g.

United States v. Lasky,

600 F.2d 765, 769

(9th Cir. 1979);
——————————————————————
http://openjurist.org/600/f2d/765/united-states-v-lasky
_________________________________________________
United States v. Farkas,

935 F.2d 962, 965

(8th Cir. 1991),
——————————————————————
http://openjurist.org/935/f2d/962/united-states-v-farkas
_________________________________________________
but always

with

a clear instruction

that

the letters should not be considered

for

the truth

of

the matters contained therein

Without such limitation

the accusations act

as testimony against the defendants
………………………………………………..
The instructions

ultimately given

the jury

as it retired

did not cure the omission

The jury

was told

that

only defendants who

knew

or

“should have known”

of

the documents

should be charged

with notice

of

their contents

This instruction

in no way limited

the jury

in

considering the truth

of

the contents

The jury

was also told

that

it should observe

any limiting instructions

that

had been given

in

the course of the trial

No instructions

had been given

telling the jury

that

it could not take the truth

of

the 37 accusations enumerated above

into account
………………………………………………..
The government

does not argue

that

the defendants

waived their Confrontation Clause objection

by

not raising it again

when

the final instructions were prepared

The defendants

were

not obliged to object again

when they had made

their in limine motion

and

formally presented

it

to the court

which disregarded it

and

which rebuked the defendants

with some asperity

when

they raised the objection again

during Durrette’s testimony

The defendants

did not have

to

perform a vain act
………………………………………………..
As Durrette

read material into the record

unlimited in its bearing,

abundant hearsay

was presented

to

the jury

The right secured

to

the defendants

by

the Sixth Amendment

was violated

The right

to

cross-examine one’s accusers

is fundamental

in our system of justice

Olden v. Kentucky,

488 U.S. 227, 231

(1988)
——————————————————————
https://supreme.justia.com/cases/federal/us/488/227/
——————————————————————
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=488&invol=227
——————————————————————
http://www.invispress.com/law/evidence/olden.html
_________________________________________________
Cross-examination

is

“the principal means

by

which the believability

of

a witness

and

the truth

of

his testimony

are tested”

Davis v. Alaska,

415 U.S. 308, 316

(1974)
——————————————————————
https://supreme.justia.com/cases/federal/us/415/308/
——————————————————————
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=415&invol=308
——————————————————————
http://uscivilliberties.org/cases/3673-davis-v-alaska-415-us-308-1974.html
——————————————————————
http://www.casebriefs.com/blog/law/criminal-procedure/criminal-procedure-keyed-to-israel/the-trial/davis-v-alaska/
………………………………………………..
When a

constitutional right

is violated

by

trial rulings,

we are bound

to

determine whether the error

was harmless

beyond a reasonable doubt

Chapman v. California,

386 U.S. 18, 24

(1967)
——————————————————————
https://supreme.justia.com/cases/federal/us/386/18/case.html
——————————————————————
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=386&invol=18
——————————————————————
http://www.casebriefs.com/blog/law/criminal-procedure/criminal-procedure-keyed-to-saltzburg/post-conviction-challenges/chapman-v-california-2/
——————————————————————
http://legal-dictionary.thefreedictionary.com/_/dict.aspx?rd=1&word=Harmless+error+rule
_________________________________________________
The government

here

had a strong case

based on the contents

of

the Untax Packages

that

the defendants put together

and

promoted

The defendants

had

a not very plausible defense

that TPCS

was

an educational enterprise

exercising its right

to

free speech

If that defense

was to have any chance

of

creating a reasonable doubt

in

the jurors’ minds,

the jurors had to credit

the defendants with honesty

The

hearsay accusations

destroyed that chance

Taken as true,

as the jury was allowed to take them,

the accusations

established

that

the defendants were

hypocrites,

liars,

callous exploiters of their victims,

operators of a major scam
………………………………………………..
The

37 accusations

were

overwhelming evidence

of

the scheme

of

mail fraud

charged

in

the indictment

and

exemplified

in

the particular mail fraud counts

The

three live witnesses

to

mail fraud

that

the government produced

were

David Anderson,

who

admitted to having embezzled taxes

he withheld from his employees

before he had any contact

with TPCS;

Debbie Long,

whose disillusionment

with TPCS

came

when the State of California

levied on her wages;

and

Clifford Koeper,

who

believed that Untax Package

did not work

but

became an Associate Member

of

TPCS

and sold

the Untax Package

to

two others

The burden

of

the government’s mail fraud case

was

carried largely

by

the accusations

read into the record

When

the government

on appeal

states there was

“ample evidence

the TPCS members

did not get

what they paid for,”

(Appellee Br. at 46)

(italics in original),

and that

“there is

no better proof

of

the fact

that

TPCS members

did not get what they paid for

than

the testimony

of

the victims,”

(Id. at 47),

the government

does not cite the testimony

of

Anderson,

Longer,

and

Koeper,

but

appears to invoke

all the accusations

that

become part

of

what the jury had before it
………………………………………………..
The evidence

proving the existence

of

a scheme

to

commit mail fraud

was

linked to the evidence

proving the conspiracy

to

defraud the United States

Count One

of

the indictment

listed

the fraudulent recruitment

of

taxpayers

by

TPCS

as

overt acts

carrying out the conspiracy

Addressing the jury

in closing arguments,

the government specifically urged

that

the defendants’ deceitful recruiting

of

TPCS members

was proof

of

the conspiracy

to

defraud the United States

(“they lie

as to

how many people

have been successfully untaxed,

they lie

as to

the numbers of people in the organization,

and

the effectiveness

of

their methods”)

The government

immediately added:

“The instructions

that

the judge

has

given you

are

that you need only find

that

one overt act,

as listed

in

the indictment,

was committed in furtherance

of

the conspiracy that’s alleged there”
………………………………………………..
The

accusations of fraud

on

the TPCS members

proved,

or

could have been taken by the jury as proving,

both

the mail fraud counts

and

the conspiracy count

It is difficult for us

to determine

beyond a reasonable doubt

that

they did not function in this way

When you hear

that

defendants have told

out-and-out lies,

run a scam,

and

used false pretenses,

and

you are not limited

how

you can use this evidence,

it would be entirely natural

to

credit the accusations so vigorously advanced

as true

In confirmation

of

this conclusion

is

the difference

in

the outcome

of

the two trials

When the

government

had to produce

a number of live witnesses

who were themselves tax cheats,

the jury hung

With these inconvenient witnesses eliminated,

the jury convicted

The palpable difference

in result

makes likely

that

the change of evidence

to

the presentation of hearsay

tipped the scales

We cannot say

beyond a reasonable doubt

that

the violations

of

the Confrontation Clause

did not produce result

The convictions

of

the Marshes,

the Spencers

and

Coltrane

of

mail fraud

and

of conspiracy to defraud the United States

must be set aside
………………………………………………..
Carpa presents a different case

The jury was explicitly instructed

not to consider against him

the letters

read from the files

The jury

is presumed

to have obeyed this instruction

However,

the letters

went very far

to show

that

TPCS

was

a criminal conspiracy,

and

the existence

of

this conspiracy

had to be proved

in order

to

make Carpa a conspirator

The reversal

of

the convictions

of the

Marshes,

Spencers,

and

Coltrane

for conspiracy

leaves Carpa

without other convicted conspirators

and

with proof of his part

in

a conspiracy dependent

on

the evidence showing

TPCS

to be a conspiracy

Under these circumstances,

Carpa’s conviction of conspiracy

must also be reversed
………………………………………………..
The Commercial Liens

The filing

of

baseless liens

to

harass government officials

has

become a standard tax protestor ploy

The liens

are easy to file

and

not easy to remove

No judge

or

other officer

of the

government

would like to have them filed

on

his

or

her

property

They bear the mark of malice,

as they do in the case

where they appear

as

a mean response

to

a lawfully authorized search

Nonetheless,

the crime

can be punished only

in accordance with law
………………………………………………..
The indictment

charged

that

the Marshes

“did corruptly endeavor

to

intimidate

and

impede”

certain officers of the United States

by

the filing

of

the liens

in

Nevada

and

Washington

The officers

were located

in the

Eastern

and

Northern

Districts of California

None were in

Nevada

or

Washington

The liens

were

mailed for filing

from

the Eastern District of California

The question

was put to the jury

whether

venue for the crime

could be found

in

the Northern District

The jury’s verdict

of guilty

so found

The affected defendants

challenge the finding
………………………………………………..
The government’s argument

is

that an effect of the filing

of

the liens

was an impact

on

the IRS officers

in

San Jose, California,

who

were conducting a criminal investigation

of

the defendants

The government invokes

United States v. Angotti,

105 F.3d 539

(9th Cir. 1997)
——————————————————————
http://law.justia.com/cases/federal/appellate-courts/F3/105/539/599178/
_________________________________________________
(venue

for

the prosecution

of

the crime

of

making a false statement

in violation

of

18 U.S.C. § 1014

lies

where

the crime is completed

by

the statement having effect)

The problem

with Angotti

as analogy

is

that the crime

of

endeavoring to impede the IRS

is complete

when the endeavor is made

The government

did not have to show

that

its agents

abandoned their investigation

or

even that the agents were anxious

about the effect

of

the liens

on their credit

No effect need be proved

The filing

of

the lien

is

the crime

The government

itself presented

this exact description

of

the crime

to

the jury

in

its closing argument:
………………………………………………..
“All you have to find

is

that there was an attempt

Because that’s

what a corrupt endeavor is”

(Tr. 12/8/95 at 11)

The jury

could not find

that

any step to complete the crime

was taken

in

the Northern District of California

when

the criminal deeds

had already been committed

Venue

as

required

by

the Sixth Amendment

was lacking

The convictions

on

these counts

must be set aside
………………………………………………..
Waivers

Two issues

now raised

by

the defendants

were waived at trial

On the face

of

the indictments

the venue

of

the tax counts

was wrong:

the

Marshes

and

Spencers

had

been residents

of

the Eastern District of California,

but

they were being tried

in

the Northern District

The defendants

said not a word

about the venue

until they were convicted

They now contend

that the

government

might have proved

some act

in

the Northern District

that

would have related

to

the tax courts

and

justified the venue;

they could not know

till

the trial was over

The defendants

waited too long

They cannot sandbag

the government

after the verdict

is in

United States v. Powell,

498 F.2d 890, 891-92

(9th Cir. 1974)
——————————————————————
http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/crm00231.htm
——————————————————————
http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/crm00666.htm
——————————————————————
http://www.irs.gov/pub/irs-utl/tax_crimes_handbook.pdf
………………………………………………..
Phillip Marsh

earnestly urges

that

the exclusion

of

the evidence

of

his psychological state

was error

in

the light of our en banc decision

in

United States v. Morales,

108 F.3d 1031

(9th Cir. 1997),

——————————————————————
http://swansonmcnamara.com/wp-content/uploads/2012/04/Experts-I-Morales-article.pdf
——————————————————————
http://swansonmcnamara.com/wp-content/uploads/2012/04/Experts-II-article.pdf
_________________________________________________

which he characterizes as establishing a new constitutional rule that should be applied retroactively

Griffith v. Kentucky,

479 U.S. 314

(1987)

——————————————————————
https://supreme.justia.com/cases/federal/us/479/314/case.html
——————————————————————
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=479&invol=314
——————————————————————
http://www.oyez.org/cases/1980-1989/1986/1986_85_5221
——————————————————————
http://en.m.wikipedia.org/wiki/Griffith_v._Kentucky
_________________________________________________

Morales

did not announce

new constitutional doctrine

but

applied the Federal Rules of Evidence

Marsh cannot benefit

from the case retroactively

He waived his right

to

introduce the psychiatrist’s testimony

by

not seeking to introduce it

in

the second trial

We find no plain error

………………………………………………..

Other issues raised by the defendants

need not be considered

in view of our ruling

on

the principal counts

………………………………………………..

SUMMARY

………………………………………………..

The convictions

of

all six defendants

of

violation

of

18 U.S.C. § 371

——————————————————————
http://www.law.cornell.edu/uscode/text/18/371
_________________________________________________

are REVERSED

The convictions

of

the Marshes

and

Jill Spencer

of

endeavoring

to

obstruct the administration of the tax laws

are REVERSED

The convictions

of

the Marshes

and

the Spencers

and

Coltrane

of

mail fraud

are REVERSED

The convictions

of

the Marshes

and

the Spencers

of

failure to file

and to

tax evasion

and

the sentences

for

these offenses

are AFFIRMED

_____________________________________________

Lowell (Larry) H. Becraft, Jr.

—————————————————————–

http://fly.hiwaay.net/~becraft/deadissues.htm

_____________________________________________

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