Tenth Circuit affirms tax evasion conviction arising out of New Mexico SOS scandal

In 2010 a scandal involving the New Mexico Secretary of State’s office broke into the news. Several consultants for the office — Armando Gutierrez, Joseph Kupfer, and Elizabeth Kupfer — were indicted in federal court for misusing voter education funds provided under the Help America Vote Act, with tax evasion, or both.

Gutierrez and Mr. Kupfer were each sentenced to ten years in prison. Mrs. Kupfer was convicted and sentenced to three years for tax evasion for failing to report $790,000 in income.

(The New Mexico Attorney General’s office also brought charges against former Secretary of State Rebecca Vigil-Giron, but these were dismissed on speedy trial grounds.)

In any event, yesterday the Tenth Circuit affirmed Mrs. Kupfer’s conviction for tax evasion, but has remanded the case due to an error in her sentence. See United States v. Kupfer.

Mrs. Kupfer’s primary argument was that the jury was not properly instructed on how to determine whether she “willfully” evaded income taxes. To be sure, the trial court instructed the jury that she could only be convicted if she acted “willfully,” and it correctly defined what “willfully” meant.

But Mrs. Kupfer complained that the trial court should also have told the jury what “willfully” does not mean. She contended that the jury should have been told that it should acquit her if she acted negligently, inadvertently, or by accident or mistake. Judge Bacharach’s opinion correctly rejected this argument; the trial court’s instruction was sufficient, because by defining the term “willfully,” it “implicitly told the jury that any mental state short of willfulness would not have sufficed for a finding of guilt.”

The Tenth Circuit also reversed Mrs. Kupfer’s sentence. The trial court increased her offense level for willfully obstructing the investigation, but Mrs. Kupfer did no such thing. She simply failed to tell the government’s investigators about her unreported income, and under the law that’s not obstruction.

The case will now go back to the trial court, and Mrs. Kupfer will be resentenced, and presumably her sentence will be reduced. (But if any readers think they know the most likely outcome, please e-mail me or leave a comment!)

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