On its face, United States v. Marinello is about mens rea: Can one be convicted of obstructing the IRS if they are unaware that the IRS is conducting an investigation? In practice, though, this case is really about prosecutorial abuse of power, which is attracted when a criminal statute reaches innocent conduct. The dissenting judges in the Second Circuit recognized this danger: “Prosecutorial power is not just the power to convict those we are sure have guilty minds; it is also the power to destroy people.”
The statute, 26 USC § 7212(a), allows prosecution of one who “in any . . . way corruptly or by force . . . endeavors to obstruct or impede the due administration” of the IRS. The Second Circuit, where this case originated, does not require that the defendant know of an IRS investigation. It does not require contemporaneity of the obstructive act and IRS investigation. It does not even require that the act obstruct a particular investigation. As Mr. Marinello argues, the statute is “a general prohibition on conduct that hinders the IRS in any way."
The facts are that Mr. Marinello ran a rather sketchy business in upstate New York: he was a poor bookkeeper, paid employees cash, did not keep bank statements or business records, and, well, didn’t always file tax returns. These activities spanned 1992 to 2010. The IRS investigation began, unbeknownst to him, in 2009. Eventually he was prosecuted for his bad business style, and convicted for obstructing an IRS investigation when he did not know there was an IRS investigation.
SCOTUS granted cert on this question:
Whether § 7212(a)’s residual clause requires that there was a pending IRS action or proceeding, such as an investigation or audit, of which the defendant was aware when he engaged in the purportedly obstructive conduct.
A circuit split arises from the more reasonable Sixth Circuit, which reads into the statute a saving mens rea requirement. The First, Second, Ninth and, yes, Tenth fall on the wrong side of this divide. See United States v. Sorensen, 801 F.3d 1217 (10th Cir. 2015).
Two Second Circuit judges issued a powerful dissent from the denial of en banc review, with a scathing indictment of the panel opinion. Some choice quotes:
The panel “cleared a garden path for prosecutorial abuse.”
“How easy it is under the panel's opinion for an overzealous or partisan prosecutor to investigate, to threaten, to force into pleading, or perhaps (with luck) to convict anybody.”
The statute “affords the sort of capacious, unbounded, and oppressive opportunity for prosecutorial abuse that the Supreme Court has repeatedly curtailed.”
The panel had misconstrued the statute as “a prosecutor’s hammer that can be brought
down upon any citizen,” rather than as a “specialized tool” to prevent obstruction of “active IRS investigations.”
The dissent, “decline[d] to defer to the Department of Justice’s views to determine the scope of a criminal statute.”
And, “If this is the law, no one is safe.”
The case will be argued this Wednesday, December 6, 2017.