Prosecutors with the United States Department of Justice told a jury in federal court on Tuesday that Orleans Parish District Attorney Jason Williams, along with his former law partner, Nicole Burdett, went out of their way to find a tax preparer who would file fraudulent returns for their law firm in order to get out of paying tens of thousands of dollars in taxes to the federal government.
“They were looking for someone that would do what they asked, who would do what they wanted,” U.S. Attorney Kelly Uebinger told the jury during opening arguments on Tuesday. “And what they wanted was to save thousands and thousands of dollars in taxes.”
Williams and Burdett have been accused of inflating business expenses for Williams’ law firm by over $700,000 during a 5 year period between 2013 and 2017, to avoid paying over $200,000 in taxes. Prosecutors say that Williams and Burdett did that by providing inaccurate information to their tax preparer, Henry Timothy, and instructing him to reduce their liability.
The arguments from Uebinger were the first put forward in what is expected to be a two week trial in front of U.S. District Court Judge Lance Africk to determine whether or not Williams or Burdett are guilty of any of the ten counts of tax fraud they are jointly charged with.
The result could have major implications on the criminal legal system in New Orleans. On Monday, Williams’ attorneys confirmed he had rejected a plea deal. If found guilty of any of the charges, Williams would likely have his law license suspended, and be forced to step down as DA.
But attorneys for Wiliams and Burdett say they were the victims of Timothy, a family friend of Burdett’s, who falsely told them he was a certified public accountant.
“This case is about trust, misplaced trust, but two individuals who did not know any better,” a defense attorney for Williams, Lisa Wayne, told the jury.
Timothy has since pleaded guilty to one count of tax fraud himself, and prosecutors say he will be called to testify against Williams and Burdett. That could happen as early as Wednesday.
While the trial began on Monday, the jury selection process took up all of Monday and most of the day on Tuesday, and primarily took place behind closed doors. At about 3 p.m., Judge Africk announced that a jury had been selected, and 12 jurors were seated, along with 4 alternates.
During her opening remarks, Uebinger told the jurors that Williams and Burdett were hardly “individuals who didn’t know any better,” but rather were highly involved in the tax preparation process every year, and instructed Timothy to continue to make fraudulent deductions until they were satisfied with the amount of taxes they would need to pay.
She said that while Timothy was in charge of the “how” in terms of what deductions to make, Burdett and Williams were the ones instructing him to do it.
“The defendants in this case knew exactly what was going on,” Uebinger said. “They knew exactly what Henry Timothy was doing all those years.”
Burdett and Williams are also facing several counts of failing to report cash payments over $10,000, and Uebinger told the jury that Williams liked to do business in cash in order to avoid paying taxes on it.
“There was cash floating all over that office,” she said. “They sometimes paid their attorneys in cash. They had safes and lock boxes. Nicole Burdett had a cash counting machine on her desk.”
But an attorney for Burdett, Michael Magner, told the jury that the IRS was looking at the case “through dirty lenses,” and that Timothy made up the story about being pressured to take deductions once he was cornered by the IRS related to his own tax fraud.
“When you look at things through dirty lenses, everything looks dirty,” Magner said.
For instance, Magner said that two of the cash payments that weren’t reported were actually cashier’s checks, and the failure to file the correct forms stemmed from ignorance, not conspiracy. Williams and Burdett, he said, hadn’t even heard of the required forms before they were indicted back in June of 2020.
He also noted that Timothy was filing around 1,500 other tax returns for clients every year, and that the deductions on those returns were often similarly inflated as the ones he filed for Williams’ law firm. And both Wayne and Magner told the jury that prosecutors have no evidence aside from the testimony of Timothy that Williams or Burdett ever pressured him to reduce their tax burden.
“There will be no evidence of that other than what comes out of the tax cheat’s mouth,” Magner said. “You will see all of the emails between them, all of the text messages between them.”
A “major issue”
Williams has claimed that the indictment, which came down in June of 2020, just weeks before qualifying began in the 2020 district attorney’s race, was politically motivated. At the time, he was New Orleans City Council President, but had announced his intention to run for the position of the city’s top prosecutor in late 2018, and accused then-District Attorney Leon Cannizzaro of being behind the investigation and subsequent charges. (Cannizzaro denied that he had anything to do with it.)
And early on in the case, Williams and Burdett asked that the charges should be thrown out because they were being subject to “selective and vindictive prosecution” due to the fact that Williams was a public official — specifically a Black man planning to run for DA on a progressive platform.
But after several hearings, their motions were denied, and it was subsequently ordered that those arguments related to the selective and vindictive prosecution claims would not be advanced at trial.
Still, during opening arguments on Tuesday, Magner told the jury that the IRS had shifted their investigation from Timothy to Williams because they “decided they’d rather have the scalp of a public official.”
Prosecutors quickly raised an objection, which was sustained by Judge Africk, who told the jury that they would need to disregard Magner’s statement.
Magner moved on with his argument, but after the jury was dismissed for the evening, Africk brought up the incident, and asked Magener to explain why he seemingly was making an argument about Williams being selectively prosecuted, when those arguments had been barred.
“If it wasn’t an express violation of my order, it was an inadvertent violation of my order,” Africk said.
Magner said he was only trying to illustrate the fact that the IRS had shifted from investigating Timothy to Williams.
Africk told Magner that he did not believe his explanation, and told him that if it happened again he would have a “major issue.”
The trial is set to resume at 8:30 a.m. on Wednesday.