When Must a Summary Witness Testify as an Expert?

Written on Friday, June 18th, 2021 by T.C. Kelly
Filed under: ExpertWitness, General, Working with Experts

Federal courts may allow a summary witness to explain how documents and testimony fit together. The Court of Appeals for the Fifth Circuit recently rejected the argument that a summary witness needed to testify as an expert to explain the government’s case.

Facts of the Case

Carl Nicholson is a certified public accountant. He was charged with eleven tax crimes, including filing false tax returns for himself and assisting clients in the preparation of false tax returns. A jury found Nicholson guilty on all counts. A judge sentenced him to five years in prison.

Nicholson was a partner in an accounting firm. Pursuant to firm policy, Nicholson was entitled to use his personal credit card for business expenses and to request reimbursement from the firm. Nicholson was reimbursed for charges to his American Express (“Amex”) account that were incurred for personal reasons, including family travel.

Nicholson did not report the improper reimbursements as income on his personal tax returns. Some of the criminal charges related to his failure to disclose taxable income.

Nicholson’s partners bought out his interest in the firm in 2015. To calculate the amount of profit Nicholson earned from that sale, Nicholson claimed to have paid $150,000 for his interest in the company and an additional $300,000 that he paid overtime on the firm’s behalf. The firm’s managing partner testified that the additional payments of $300,000 were never made. Although the managing partner recalled that Nicholson made an initial investment of $150,000, financial statements showed that he actually paid $100,000. Nicholson was thus accused of inflating his investment in the firm by $350,000 to reduce the amount of taxable profit he made when he sold that interest.

Summary Witness

The government relied in part on testimony given by IRS Agent Bradley Luker. Through Luker, the government introduced summary charts of Nicholson’s tax returns. The charts also summarized Nicholson’s Amex reimbursement requests.

The Federal Rules of Evidence allow summaries to be introduced into evidence “to prove the content of voluminous writings, recordings, or photographs that cannot be conveniently examined in court.” However, the summaries may not introduce evidence that the jury has not already heard.

All of the information in Luker’s charts was taken from earlier testimony and documents that had been received into evidence, including tax returns and bank statements. The jury was instructed that “summary charts and witnesses are no better than the underlying testimony and the documents upon which they are based and are not themselves independent evidence.”

In the Fifth Circuit, at least, a summary witness is entitled to “sort through the evidence” to show how the documents that were introduced into evidence “related to each other and to the charges in the indictment.” However, summary evidence may not be used to “fill in holes” in the party’s case by assuming the existence of facts that have not been independently established.

Was Lurker an Expert Witness?

Nicholson argued that Lurker should not have been allowed “to state his conclusions about whether Nicholson’s income tax returns were ‘false’ and what the ‘correct’ amounts should have been.” Lurker was not an accountant and did not testify as an expert. Nicholson argued that only an expert should be allowed to state opinions about tax matters.

The court of appeals concluded that Lurker was merely summarizing other testimony and therefore did not testify as an expert. Since the court did not quote Lurker’s testimony, it is difficult to evaluate whether he offered his own opinion about how income should have been reported.

Nicholson also contended that Lurker’s testimony was not summative but was in conflict with other testimony. Lurker testified that a $66,000 payment from one of Nicholson’s clients was not for accounting services. The client testified that he was billed for accounting services and, while he disputed whether the money was owed, he paid the bill. Since the client had an agreement with Nicholson’s firm that he would not be charged for accounting services, there was evidence to support the conclusion that the $66,000 was not for accounting services. The court found no conflict in the testimony despite evidence that the client told Nicholson to record the funds as a payment for accounting services.

Nicholson also complained that Lurker contradicted the managing partner, who testified that he recalled Nicholson making an initial investment of $150,000 in the firm. The court of appeals noted that Lurker did not characterize the managing partner’s testimony as false but did testify about the $100,000 investment shown on financial statements. Since those statements were in evidence, there was no conflict between Lurker’s testimony and facts in evidence.

Finally, the managing partner testified that he did not authorize reimbursement of funds for family vacations and other expenses for which Nicholson charged the firm. The managing partner did testify that whether some of those expenses were legitimate might be a matter of opinion, but in his opinion they were not. Lurker testified that he based his chart of improper expense reimbursements on the managing partner’s testimony.

The court of appeals rejected the claim that Lurker essentially testified as an expert who agreed with the manager’s opinion as to the legitimacy of the expense reimbursements. The court also rejected the argument that Lurker improperly bolstered the managing partner’s testimony. It was up to the jury to decide whether to believe that Nicholson improperly reimbursed himself for nonexistent business expenses and failed to claim those reimbursements as income.

The court of appeals nevertheless recognized that the case involved issues of accounting, business arrangements, and tax preparation that went beyond the knowledge of average jurors. Given the thin line between showing how documents relate to each other and explaining the documents, perhaps the government should have relied on an expert witness to help prove its case. Since Lurker merely summarized testimony and documents that were already in evidence, however, he did not testify as an expert. To the extent that an expert might have been in a better position to give that testimony, the court regarded any error as harmless.

About T.C. Kelly

Prior to his retirement, T.C. Kelly handled litigation and appeals in state and federal courts across the Midwest. He focused his practice on criminal defense, personal injury, and employment law. He now writes about legal issues for a variety of publications.

About T.C. Kelly

Prior to his retirement, T.C. Kelly handled litigation and appeals in state and federal courts across the Midwest. He focused his practice on criminal defense, personal injury, and employment law. He now writes about legal issues for a variety of publications.