Wednesday, July 13, 2005
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Doctor’s Conviction for Lying on Bankruptcy Forms Upheld
Ninth Circuit Panel Rejects Claim That Death of Co-Defendant Husband During Deliberations Affected Verdict
By Kenneth Ofgang, Staff Writer/Appellate Courts
The Ninth U.S. Circuit Court of Appeals yesterday affirmed the tax and bankruptcy-related convictions of a prominent Beverly Hills physician whose husband and co-defendant leaped or fell to his death the day before the jury returned its verdict.
The panel denied Letantia Bussell’s contention that she should have received a new trial because jurors improperly—as well as erroneously—speculated that John Bussell had made a deal to plead guilty.
Two attorneys who advised the couple on tax and bankruptcy matters, Jeffrey Sherman and former Southwestern University School of Law professor Robert Beaudry, had pled guilty earlier. Sherman resigned from the State Bar with charges pending and Beaudy remains on interim suspension.
Prosecutors said the lawyers helped the Bussells and others hide their wealth and then discharge the taxes they owed to the IRS and the state of California in fraudulent bankruptcies.
They accused the Bussells of defrauding creditors, including the IRS, out of $3 million. The verdict, finding Letantia Bussell guilty on six of nine counts, was delivered the day after John Bussell’s death outside the Embassy Suites hotel in Santa Ana.
Possible Suicide
The death was reported as an apparent suicide, although Letantia Bussell questioned that conclusion. After the death, U.S. District Judge Alicemarie H. Stotler ordered the jury sequestered, but several jurors later submitted declarations saying there had been discussions in the jury room about the possibility that John Bussell had negotiated a plea.
Jurors found that Bussell had lied about certain assets that were omitted from the bankruptcy filing, including the couple’s interest in two companies related to Bussell’s practice. Bussell’s patients included a number of prominent entertainers—she was reportedly the doctor who told actor Rock Hudson that he had AIDS—and she started a line of skin care products.
The judge sentenced Bussell to three years in prison and ordered her to pay more than $2.4 million in restitution and costs.
In rejecting the claim that jury speculation had deprived Bussell of a fair verdict, Judge Richard Clifton said the declarations were inadmissible, since they dealt with deliberations and did not involve claims that “extrinsic prejudicial material” was brought into the jury room.
In any event, he said, the declarations were ambiguous; none of the jurors indicated that they reached a firm conclusion that John Bussell had pled out or that the belief that he might have affected the verdict against his wife.
Jury Instructions
The court also rejected claims that the jury instructions failed to adequately inform the jury that it could acquit the defendant if it found that her omissions on the bankruptcy forms were a good-faith mistake resulting from a mistaken understanding of what was required. The district judge had rejected instructions that would have detailed the ambiguous nature of some of the questions on the forms.
Clifton wrote.
“In its lengthy instruction on the subject, the district court informed the jury that good faith was a ‘complete defense to each of [the bankruptcy-related] charges. The court explained that a person who acted in good faith — that is, based ‘on a belief or opinion honestly held’ — was ‘not punishable under these statutes merely because the belief or opinion turn[ed] out to be inaccurate, incorrect, or wrong.’ Criminal punishment was instead reserved for ‘those people who knowingly defraud or attempt to defraud.’
“Given these statements, which adequately presented Letantia’s good-faith defense, we cannot say that the district court abused its discretion in rejecting the additional instructions [requested by the defense.]”
Senior Judge John T. Noonan and Judge Jeremy Fogel, a U.S. district judge from San Jose sitting by designation, concurred in the opinion.
Attorneys on appeal were Shirley M. Hufstedler and Dan Marmalefsky for the defendant and Assistant U.S. Attorneys Ronald L. Cheng and Ranee A. Katzenstein for the government.
The case is United States v. Bussell, 02-50495.
Copyright 2005, Metropolitan News Company