Wednesday, December 13, 2006

US v. Boulware, No. 05-10752 (12-13-06). This a white-collar tax case. The 9th had remanded the previous conviction and this was the appeal from the retrial. The interesting issue is the contours of the "return of capital" defense. Defendant argued that he be permitted to argue that the money he took from the firm could have been returns of capital; the district court ruled that it had to show that they were in fact returns of capital. The district court precluded the defense. The 9th, using the Miller test, agreed with the district court. The defendant had to show that t here was a trial. The 9th also held that a previous state judgment, excluded from evidence in the first trial, and favorable to the defendant, was properly admitted in the second and there was no error in instructing the jury that it was not binding on the issue of "return of capital." Thomas, concurring, would adopt the 2nd Circuit's approach in a "return of capital" defense, that would apply in both civil and criminal cases so long as the diversion itself was not illegal. The Miller approach requires a clear distinction of return of capital rather than asking whether the return was legal in the first place.


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