Third Circuit Decision in Staudtmauer - Willful Blindness (Conscious Avoidance)

The Third Circuit issued a very interesting opinion yesterday in a tax crimes case. The opinion is United States v. Stadtmauer, 620 F.3d 238 (3rd Cir. 2010). The opinion is 88 pages long and covers several important issues. I plan to discuss the issues in separate blogs, but first I start the Court's introduction to the opinion:

Following a two-month jury trial in the District Court for the District of New Jersey, Richard Stadtmauer was convicted of one count of conspiracy to defraud the United States (in violation of 18 U.S.C. § 371), and nine counts of willfully aiding in the filing of materially false or fraudulent tax returns (in violation of 26 U.S.C. § 7206(2)). On appeal, Stadtmauer raises many challenges to these convictions. We deal principally with the issue Stadtmauer raises last: whether the District Court erred in giving a willful blindness instruction in this case, including whether the Supreme Court's decision in Cheek v. United States, 498 U.S. 192 (1991), forecloses the possibility that willful blindness may satisfy the legal knowledge component of the "willfulness" element of criminal tax offenses. We join our sister circuit courts in concluding that Cheek does not prohibit a willful blindness instruction that applies to a defendant's knowledge of relevant tax law. We reject also Stadtmauer's other claims of error, and thus affirm.

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