1) Conspiracy to Defraud the United States and
2) Aiding and Abetting in the Preparation of False and Fraudulent Returns.
The government alleged that Banister had impeded and impaired the ascertainment, assessment, and collection of tax, and that he had criminally conspired with Al Thompson in so doing.
The charges were related to Joe’s association with Redding businessman, Walter “Al” Thompson, where Joe, as a CPA, prepared amended Form 1040Xtax returns for three tax years. The returns were a calculated protest and every effort was made by Al and Joe to adhere to written and verbal guidance they sought and received from the IRS.
Key evidence in the trial were two video tapes. The first tape was about 2 hours in length had been filmed at Cencal Aviation, the business of Walter “Al” Thompson, in July of 2000.
Mr. Thompson had researched the law and concluded that he was not an “employer” as defined within Title 26, the income tax code, nor was he required to withhold money from the paychecks of those who worked for him. He called this meeting so as to inform his 25 employees of this decision to stop withholding from their paychecks, and invited Joe Banister, former IRS CID special agent, to assist him in communicating to the employees.
Also in attendance was Mr. David Cay Johnson, 30 year veteran of covering tax issues and writing articles for the New York Times, whom he had invited only the day before.
Of interest, was the fact that this tape was introduced into evidence by the government, not Mr. Banister. Viewing the content of the tape, which greatly favored Mr. Banister, one would question the judgment of the government.
What had happened in pre-trial wrangling was that the government had lost their bid to keep that piece of evidence out. In a strategy that is common for such circumstances, the government probably thought that they could do 2 things to try and minimize the evidence: be the one that introduced the evidence instead of the defense and do it early in the trial so that the jury might forget about it as the trial concluded.
Whatever it was, their strategy failed. The so-called “Cencal Aviation” tape was replayed for the jury during their deliberation after all evidence was in, and in post-verdict interviews, jurors who would consent to talk with us admitted that this evidence was extremelyimportant in persuading the jury’s decision for Mr. Banister.
The second viewing was key in swinging the remaining 4-5 jurors who still were not voting to acquit. The tape covered a lot of ground but a partial summary is as follows: Joe Banister explained how he came to be employed by the IRS and what caused him to have to resign nearly 6 years later. He emphasized that he was not there to tell people what to think or what to do but merely to tell them what he learned and what he was doing about his discovery. “What he was doing” included asking the government to demonstrate the error of his analysis which started with the 95-page report he submitted to his supervisor, Robert Gorini, with the request that it go to the “top” for a response. The response was administrative leave and inevitable resignation and the reply that the government would not address his questions.
The other tape was a deposition of Banister’s former manager, Robert Gorini, in Washington, D.C., who retired from the IRS in early 2000, less than a year after Mr. Banister resigned from the IRS by Banister’s attorney, Jeffrey Dickstein.
Mr. Gorini had nothing but good things to say about Joe’s character, his work as a criminal IRS investigator and many other areas. The very last question by Dickstein was to ask Gorini if he could name the law that required Mr. Banister to file income tax returns and pay income tax, to which Mr. Gorini replied that he could not. This tape was a huge credibility boost for Joe with the jury.
A key element in the charges was “willfulness” and the jury unanimously concurred that Joe, right or wrong in his beliefs about aspects of tax law administration, truly believed the things which caused him to resign.
A highly interesting item of a technical nature was concerning the discussion on the subject of Rule 29 of the Federal Rules of Criminal Procedure.
At the conclusion of the government’s presentation of their case, the defense moved for dismissal of all charges and effectively and persuasively convinced the judge that the government had failed to make it’s case, that is, it had failed to provide evidence to prove it’s case that matched the charges against Banister.
It appeared that the judge was very tempted to dismiss and might very well do so, however, he ultimately displayed his unwillingness to allow the government to be in a position of losing with no chance of appeal. The judge knew this was a very high-profile case with potentially serious adverse effects for the government should it lose. The government’s case was astoundingly weak and it was apparent that the proper thing to do was to dismiss charges. But that did not happen.
The defense began arguing early Friday morning and played the “Gorini” deposition to start. The judge gave a 15 minute recess and upon everyone’s return, directed Mr. Dickstein proceed. Mr. Dickstein shocked everyone by quietly announcing, “Your Honor, the defense rests”.
The judge stared at him for several seconds as if speechless. Finally, he inquired as to why Dickstein, knowing the calendar of events, had not given the court a “heads up” about this short defense and premature resting.
The judge knew that the defense was potentially going to present witnesses and expected Mr. Banister would probably testify on his own behalf. Now, with the defense suddenly and unexpected completed, there was a hole in the day’s schedule. No problem.
There were more “Rule 29? issues to discuss outside the presence of the jury and the all-important need to come to agreement on the subject of jury instructions. The jury had been dismissed until Tuesay morning so as to allow plenty of time to complete business before bringing the jury back.
Friday afternoon, June 17, had to be excruciatingly painful for the government attorney’s. The jury instructions they presented to Judge Shubb were so poor that he gave them a severe tongue-lashing and pleaded with them, “help me out”. While not in the presence of the jury, he said he would be embarrassed if he had to give those instructions to the jury. He also said, “I hope you have been humbled enough by my earlier comments to become motivated to do better.”
Judge Shubb said many interesting, perhaps curious things during the week. Once, he uttered, “the law is uncattorney Dickstein softly suggested to the judge that he should not be certain”. Another time he declared that no one reads the Internal Revenue Code from cover to cover and that anyone who claims to have done that should be in the “nuthouse”.
When so quick to believe that (implying that he has read the entire Code), the judge retorted that anyone claiming to have read the Code from cover to cover should be placed in an insane asylum. The judge, prone to temper tantrums and shouting when someone displeased him, all in all, was fair in the conduct of the trial, occasionally displaying a sense of humor. He saw two very skilled, well-prepared defense lawyers and his disappointment in the performance of the government attorneys was apparent at certain times.
Brilliant legal work by the law office of Robert Bernhoft was also key in Mr. Banister’s acquittal. The trial lawyers, Robert Bernhoft, a Constitution Party member from Wisconsin, and Mr. Jeffrey Dickstein, a seasoned lawyer well-versed in criminal tax defense, recognized the complete lack of evidence to support the government’s case and wisely decided that it would add nothing to have witnesses and Banister testify.
In any event, they felt they were well positioned should the need to appeal later come into play. I am certain that the government was counting on the opportunity to bolster their weak case by being able to fish around with Mr. Banister on the stand.
It didn’t happen and the two video tapes entered into evidence overwhelmingly portrayed Banister as credible, honest, intelligent, sincere, honorable, and believable.
Mr. Banister’s courtroom supporters were numerous. He enjoyed the comfort of many family members, as well as supporters who travelled from as far away as Georgia and Florida, and have come to see him as a patriot and hero for his courageous stand. Mr. Banister and his family have felt the stress of Joe having to prepare for his defense and found great joy and relief at the news of his aquittal.
Joseph Banister’s efforts to get the government to answer his concerns and questions about the income tax include several trips to the nation’s capital, where he has often been accompanied by many others who hold simiar views, including former IRS revenue agent Sherry Jackson and former IRS revenue officer John Turner. He is a plaintiff in a class-action lawsuit, which has been organized by Robert Schulz, founder of “We The People Foundation for Constitutional Education, Inc.”, of Queensbury, New York (www.givemeliberty.org).
“The care of human life and happiness, and not their destruction, is the first and and only legitimate object of good government.”– Thomas Jefferson