United States v. Timothy Jackson , 805 F.3d 200 ( 2015 )

Case: 14-60928 Document: 00513258540 Page: 1 Date Filed: 11/04/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-60928 United States Court of Appeals
Fifth Circuit
FILED
UNITED STATES OF AMERICA, November 4, 2015
Lyle W. Cayce
Plaintiff - Appellee Clerk
v.
TIMOTHY DALE JACKSON,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Mississippi
Before OWEN, GRAVES, and HIGGINSON, Circuit Judges.
JAMES E. GRAVES, JR., Circuit Judge:
Timothy Dale Jackson appeals his conviction for income tax evasion and
corrupt interference with the administration of Internal Revenue laws
claiming deprivation of the Sixth Amendment right to counsel of choice.
Because the district court did not abuse its discretion when it disqualified
Jackson’s counsel of choice for non-waivable conflicts of interest, we AFFIRM.
FACTS AND PROCEDURAL BACKGROUND
Timothy Dale Jackson engaged in a tax-avoidance scheme promoted by
the Church of Compassionate Service and its senior minister, Kevin
Hartshorn. As part of the scheme, Jackson became a minister of the Church,
held himself out to have taken a vow-of-poverty, and transferred all assets and
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assigned future income to the Church. Jackson then claimed, according to
Hartshorn’s interpretation of the IRS’s vow-of-poverty regulations, exemption
from federal income taxation. Despite the vow of poverty, Jackson maintained
possession of his assets and received 90% of his income back from the Church
to pay for personal expenses such as mortgages, vehicles, food, horses, school
tuition, and clothing. Hartshorn and the other ministers of the Church did the
same.
After coming under IRS investigation, Jackson retained John J.E.
Markham, II as counsel. Jackson retained Markham because he was at the
time, or had previously, represented Hartshorn, the Church as an entity, and
other ministers of the Church in similar investigations. 1 Markham
represented Jackson throughout the investigation and, upon Jackson’s
indictment, was admitted pro hac vice to represent him during trial.
The government moved to disqualify Markham as Jackson’s counsel
because of two situations creating conflicts of interest. First, Markham’s
representation of Hartshorn and other participants of the tax-avoidance
scheme, whom the government intended to call as witnesses during trial,
would require Markham to cross-examine current or former clients, resulting
in divided loyalties. Second, Markham’s borrowing of money from the Church,
which was later repaid, and his fee to represent Jackson was to be paid with
Church funds controlled by Hartshorn (meaning Hartshorn would have
ultimate control over whether or how much Jackson’s attorney was paid). This
1At the time of Jackson’s indictment, Markham was actively representing Hartshorn
in an IRS investigation and civil proceedings in the United States District Court for the
District of Utah and the United States Court of Appeals for the Tenth Circuit initiated
because of his promotion of the tax-avoidance scheme. Markham had also made a
presentation to federal prosecutors on behalf of Church ministers Karen and Tom Goode
because of their participation in the same scheme.
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created, according to the government, actual conflicts of interest or, at a
minimum, the potential for conflicts of interest to arise during trial.
Jackson opposed disqualification, stating that Jackson and Hartshorn
were aware of the conflicts, retained separate counsel to review issues that
may arise because of the conflicts, and knowingly and voluntarily waived all
conflicts. Jackson further asserted that Hartshorn’s interests were completely
aligned with his own, even if Hartshorn was called as a government witness,
because Hartshorn’s testimony would be that he advised Jackson that IRS
regulations exempted Jackson from federal income taxes because of his role as
a minister for the Church. 2
The district court assumed the waivers were valid, but found the
conflicts of interest to be non-waivable and disqualified Markham. Following
trial, Jackson was convicted of four counts of income tax evasion and one count
of corrupt interference with the administration of Internal Revenue laws.
Jackson now requests his conviction be vacated and the case be remanded for
retrial because the disqualification of Markham deprived him of the Sixth
Amendment’s right to counsel of choice.
DISCUSSION
We review the disqualification of counsel because of conflict of interest
for abuse of discretion. United States v. Sanchez Guerrero, 546 F.3d 328, 332-
33 (5th Cir. 2008). Review for abuse of discretion is deferential. United States
v. Anderson, 755 F.3d 782, 800 (5th Cir. 2014). An abuse of discretion occurs
if the district court: “(1) relies on clearly erroneous factual findings; (2) relies
on erroneous conclusions of law; or (3) misapplies the law to the facts.” Love v.
Tyson Foods, Inc., 677 F.3d 258, 262 (5th Cir. 2012) (internal quotation marks
and citation omitted). The district court is therefore “allowed substantial
2 Jackson planned to illicit this testimony in support of a state-of-mind defense.
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latitude in refusing waivers of conflicts of interest” for an actual conflict of
interest or a serious potential conflict that may arise during trial. Wheat v.
United States, 486 U.S. 153, 163 (1988).
I.
The Sixth Amendment grants criminal defendants the right to
“assistance of counsel for [their] defense.” U.S. CONST. amend VI. Assistance
of counsel includes the right to select an attorney of one’s choosing. United
States v. Gharbi, 510 F.3d 550, 553 (5th Cir. 2007) (citing Powell v. Alabama,
287 U.S. 45, 53 (1932)). This right, however, is not absolute. Wheat, 486 U.S.
at 159. Rather, the right to counsel of choice is limited if that counsel has an
actual conflict of interest or a serious potential conflict of interest that may
arise during trial. United States v. Sotelo, 97 F.3d 782, 791 (5th Cir. 1996).
Therefore, while we recognize a presumption that a defendant is entitled to
counsel of choice, that presumption may be rebutted by a showing of actual or
potential conflicts of interest. Wheat, 486 U.S. at 164; Gharbi, 510 F.3d at 553.
This is so even if valid waivers are acquired by defense counsel. Gharbi,
510 F.3d at 553. A waiver is not sufficient to remedy constitutional infirmity
because the courts are obligated to conduct proceedings “within the ethical
standards of the profession and . . . appear fair” to the public. Wheat, 486 U.S.
at 160. Therefore, “[w]hen a defendant’s selection of counsel . . . gravely
imperils the prospect of a fair trial, a trial court may justifiably refuse to accede
to the choice.” Id. at 166 (Marshall, J. dissenting).
II.
The district court did not abuse its discretion when it disqualified
Markham because he held actual and potential conflicts of interest. The
district court properly acknowledged the presumption to counsel of choice, but
also properly decided that the presumption was overcome. The court found
that Markham currently represented or had represented Jackson, Hartshorn,
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and other Church ministers in similar or related proceedings. The
representation of potential government witnesses presented, in the district
court’s view, three problems: first, Markham’s cross-examination may be
“tempered by [his] obligation or need to protect” Hartshorn and the Goodes, or
adversely, extensive cross-examination by Markham could damage his other
clients. Second, the court found that Jackson and Hartshorn’s interests were
not completely aligned since cross-examination of Hartshorn while under
criminal investigation and subject to a civil injunction 3 could endanger
Hartshorn’s legal interests. 4 And third, Hartshorn’s control of Jackson’s
attorney’s fees created further divided loyalties, possibly requiring Markham
to choose between vigorously representing his client or pleasing the person
paying that client’s fees. These factors, taken together, were the basis for the
district court’s holding that Markham’s actual and potential conflicts of
interest could not be overcome by waiver.
This conclusion is supported by our precedent. We have affirmed the
disqualification of a defense attorney who also represented a proposed
government witness. United States v. Millsaps, 157 F.3d 989, 995-96 (5th Cir.
1998). We have also held that the cross-examination of a current or former
client can be a conflict of interest. Perillo v. Johnson, 205 F.3d 775, 802 (5th
Cir. 2000). And the Supreme Court has noted “the inherent dangers that arise
3 The civil proceedings, discussed above, resulted in Hartshorn being subject to a civil
injunction preventing him from giving further tax advice regarding the vow of poverty
exemptions.
4 Indeed, Jackson acknowledged the conflict in both his pre-conviction Motion to
Suppress Dr. Timothy Jackson’s Statement Due to Actual Conflict of Interest of His Former
Trial Counsel (“It is quite obvious that this ‘serious conflict’ existed with attorney Markham
from the moment he began providing advice to Dr. Jackson”) and his post-conviction Motion
for Downward Variance (“Dr. Jackson rationalized the nonsensical advice obtained from
these charlatans because he believed that their arguments were consistent with his strong
religious beliefs.”).
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when a criminal defendant is represented by a lawyer . . . paid by a third party.”
Wood v. Georgia, 450 U.S. 261, 268-69 (1981).
Jackson argues that Markham would not have been disqualified if the
district court engaged in a different analysis, and lists seven additional steps
the district court could have taken. See Brief of Appellant at 15. But, a court
does not abuse its discretion by failing to engage in a defendant’s preferred
analysis of the issues. The district court’s findings of actual and potential
conflicts of interest are supported by the record and our precedent. Jackson’s
counsel of choice was properly disqualified.
CONCLUSION
The conviction is AFFIRMED.
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