United States v. David Kalai
696 F. App'x 228
| 9th Cir. | 2017Background
- David Kalai and his son Nadav were convicted by a jury: David of conspiracy to defraud the United States (18 U.S.C. § 371) and two FBAR counts; Nadav of two FBAR counts. Both appealed.
- David challenged the district court's competency finding, pointing to cognitive impairment, memory lapses, and four experts with differing opinions.
- Nadav challenged the FBAR jury instructions as allegedly inadequate and argued insufficient evidence supported his FBAR convictions.
- The district court found David competent after weighing expert testimony and observing David’s courtroom behavior and ability to confer with counsel.
- The district court instructed the jury that willfulness for FBAR requires knowledge of the legal duty to file and intentional violation; jurors were also shown the blank FBAR form on request.
- The government relied on circumstantial evidence (Nadav’s methods for wealthy clients, his role with the account, signatory authority, transfers, and concealment steps) to prove knowledge and willfulness for the FBAR counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether David was competent to stand trial | David: his cognitive impairment and memory problems prevented reasonable assistance to counsel | Government: experts and courtroom observations showed he could understand proceedings and assist counsel | Court: Competency finding affirmed; district court’s weighing of experts was permissible and record supported competency |
| Whether FBAR jury instructions were adequate for Nadav | Nadav: instructions were inadequate and should have included additional language to clarify willfulness and knowledge of the $10,000 threshold | Government: instructions already required proof of knowledge of duty; jury was told willfulness means knowing the filing duty and intentionally violating it; jury saw FBAR form and defense argued threshold | Court: Instructions were correct and adequate when read as a whole; no reversible error |
| Whether evidence was sufficient to convict Nadav of willful FBAR violations | Nadav: insufficient direct evidence that he knew account exceeded $10,000 or knew duty to file | Government: circumstantial evidence (pattern of tax-evasion methods for wealthy clients, use of those methods here, signatory authority, transfers, concealment) proved knowledge and willfulness | Court: Circumstantial evidence permitted reasonable inference of knowledge and willfulness; convictions affirmed |
Key Cases Cited
- United States v. Frank, 956 F.2d 872 (9th Cir. 1991) (district court may credit government experts over defense experts when assessing competency)
- United States v. Hofus, 598 F.3d 1171 (9th Cir. 2010) (standard for evaluating adequacy of jury instructions)
- Ratzlaf v. United States, 510 U.S. 135 (1994) (willfulness requires knowledge of a legal duty)
- Beardslee v. Woodford, 358 F.3d 560 (9th Cir. 2004) (written responses to juror notes may be treated as jury instructions)
- Jackson v. Virginia, 443 U.S. 307 (1979) (standard for sufficiency of the evidence: reasonable jury could find guilt beyond a reasonable doubt)
- Karme v. Comm’r, 673 F.2d 1062 (9th Cir. 1982) (evidence of a pattern or practice is admissible to show tax-motivated conduct)
- United States v. Johnson, 680 F.3d 1140 (9th Cir. 2012) (contextual sufficiency of instructions when defense highlights alleged errors to jury)
- Hawkins v. Franchise Tax Bd. of Cal., 769 F.3d 662 (9th Cir. 2014) (willfulness may be shown by conduct intended to mislead or conceal)
- Spies v. United States, 317 U.S. 492 (1943) (conduct meant to mislead or conceal can support willfulness)