United States District Court, N.D. Georgia, Atlanta Division
HONORABLE STEVE C. JONES UNITED STATES DISTRICT JUDGE.
matter appears before the Court for consideration of a June
3, 2016 Report and Recommendation ("R&R") (Doc.
No. ), in which The Honorable Janet F. King, United
States Magistrate Judge, recommended that Defendants'
Motion to Suppress (Doc. No. )[1"
name="FN1" id="FN1">1] and their Motions to Dismiss
various counts (Docs. No. , ) be denied. Defendants
also object to Magistrate Judge King's decisions to deny
their Motion for Discovery (Doc. No. ) and Motion for a
Bill of Particulars (Doc. No. ). See Doc. No. , pp.
39-48, 90-94. Pursuant to 28 U.S.C. § 636(b)(1) and
Federal Rule of Criminal Procedure 59(b)(2), Defendants
timely filed their objections. Docs. No. [79');">79');">79');">79], [80');">80]. The
Court has read the transcript of the suppression hearing in
this case, as it is required to do, and this matter is now
ripe for consideration. See United States v.
Elsoffer, 644 F.2d 357, 358 (5th Cir. 1981)
are indicted on 12 counts. Doc. No. . The first count
charges that Defendants engaged in a conspiracy to (a)
defraud the United States by impeding the lawful government
functions of the Internal Revenue Service ("IRS")
through evasion of employment taxes and (b) knowingly and
willfully submit false certified payroll forms to the Centers
for Disease Control and Prevention ("CDC").
Id. pp. 1-2, ¶l. Defendants are officers of
IWES Drywall, Inc. ("IWES"), a company that
provides dry wall laborers to contractors and subcontractors.
Id. p. 2, ¶¶2-4. IWES entered into a
contract with M.E., a subcontractor on a federally funded
construction project with the CDC, and agreed to supply
drywall laborers for the project. Id. p. 3, ¶7.
indictment alleges that Defendants maintained a spreadsheet
with two categories of workers. Id. ¶8. One set
of workers -classified as "W2.REAL" -received one
paycheck per pay period, with employment taxes properly
withheld, and were reported on Defendants' quarterly
employment tax returns. Id. pp. 3-4,
¶¶8-9. The other set of workers -classified as
" W2.F.2CHK" - received a paycheck that purportedly
withheld employment taxes. Id. p. 4, ¶ 10.
However, these workers also simultaneously received a second
paycheck in an amount equal to the employment taxes allegedly
withheld. Id. The "W2.F.2CHK" workers were
not reported on IWES's quarterly employment tax returns
filed with the IRS. Id. The Government alleges that
"all of the I WES workers on the CDC construction
project... were employees of IWES and should have been
reported on IWES's quarterly employment tax
returns." Id. ¶ 11. IWES submitted
certified payroll forms to M.E., which were transmitted to
the CDC, containing the false representation that employment
taxes were withheld for all of the IWES workers on the CDC
project. Id. ¶12.
Counts 2 through 6 Defendants are charged with violations of
26 U.S.C. § 7202 by allegedly failing to collect and pay
over employment taxes for the "W2.F.2CHK" workers.
Id. pp. 6');">p. 6-7, ¶¶21-22. In Counts 7 through
12 Defendants are charged with violations of 18 U.S.C. §
1001(a)(3) by submitting allegedly false documents to the CDC
in the form of certified payrolls indicating that employment
taxes were withheld for all IWES workers on the CDC project.
Id. pp. 7-8, ¶¶23-24. Defendants'
Motions to Dismiss challenge the substantive counts - Counts
2 through 12.
Objections to an R&R
the R&R's recommendations that the Court deny the
Motions to Dismiss and the Motion to Suppress, the Court must
"make a de novo determination of those portions of the
report or specified proposed findings or recommendations to
which objection is made." 28 U.S.C. § 636(b)(1). As
to the R&R's denial of Defendants' Motion for
Discovery and Motion for a Bill of Particulars, Defendants
must demonstrate "that the magistrate judge's order
is clearly erroneous or contrary to law." 28 U.S.C.A.
Motions to Dismiss an Indictment
deciding a Motion to Dismiss charges in an indictment, the
Court must determine whether "the factual allegations in
the indictment, when viewed in the light most favorable to
the government, [are] sufficient to charge the offense[s] as
a matter of law." United States v. deVegter,
198 F.3d 1324');">198 F.3d 1324, 1327 (11th Cir. 1999). The focus is on the
facts alleged in the indictment itself, not outside facts
presented by Defendants or facts that need to be developed at
trial. See United States v. Sharpe, 1257');">438 F.3d 1257,
1263 (11th Cir. 2006); United States v. Plummer, 221
F.3d 1298, 1302 n.3 (11th Cir. 2000). An indictment
"must be sufficiently specific to inform the defendant
of the charge against him and to enable him to plead double
jeopardy in any future prosecution for the same
offense." United States v. Cole, 755 F.2d 748,
759 (11th Cir. 1985). To clear this bar, the indictment need
only include language "set[ting] forth the essential
elements of the crime." Id., III.
Motions to Dismiss the Indictment
Counts 2 through 6
noted above, Counts 2 through 6 charge Defendants with
violations of 26 U.S.C. § 7202. A conviction under
§ 7202 requires proof that the defendant: (1) had a duty
to collect, account for, or pay over a tax; (2) knew of the
duty; and (3) willfully failed to collect, account for, or
pay over the tax. United States v. Evangelista,122
F.3d 112, 121 (2d Cir. 1997). In support of their argument
that the Court should dismiss Counts 2 through 6, Defendants
raise three objections. First, they argue that the indictment
does not sufficiently alleged that Defendants had a duty to
withhold payroll taxes. Doc. No. [80');">80], pp. 4-6. Second, they
contend that their substantive and procedural due process
rights were violated because they were not given an
opportunity to contest reclassification of their workers in
the United States Tax Court ...