During the first week of trial in the tax fraud case against Orleans Parish District Attorney Jason Williams, federal prosecutors have attempted to make their case that Williams and his former law partner, Nicole Burdett, pressured his tax preparer into filing fraudulent returns, and knowingly failed to file necessary documents related to cash payments.
But defense attorneys for Williams and Burdett say that prosecutors have no evidence that their clients knowingly did anything illegal, aside from the word of their tax preparer, Henry Timothy — who has admitted to lying to everyone from federal investigators to a grand jury, and has sentencing in his own tax fraud case pending in front of a different federal judge.
Timothy, 72, admitted on Thursday that he is in a “tough spot” and is looking for leniency from the government.
Williams and Burdett are charged with inflating Williams’ firm’s business expenses by over $700,000 between 2013 and 2017, reducing Williams’ tax burden by about $200,0000, according to prosecutors.
Special Agent Tim Moore, who was the lead IRS investigator in the Williams case, testified on Thursday and into Friday that Williams’ allegedly fraudulent business expenses included things like clothing, gym memberships, rental payments on residential properties, and purchases from iTunes.
But Williams and Burdett have argued that they put their trust in Timothy, who they say lied to them about being a CPA, and filed returns with similarly inflated expenses for other clients as well. While they say they wanted to pay as little in taxes as possible, they never instructed or pressured Timothy to take illegal deductions.
Burdett, who was indicted as a co-defendant in Williams’ case, is also facing four separate tax fraud counts related to her legal consulting firm, allegedly reducing her own personal income tax burden by about $130,000. Those charges are being tried simultaneously.
On Friday, U.S. District Court Judge Lance Africk said he was confident the case would wrap up next week. If convicted, he could face more than two years in prison under federal sentencing guidelines. Even if he is able to remain free during a likely appeal, he could still face the suspension of his law license and, potentially, his position as DA.
‘So we have to rely solely on what you say?’
In testimony on Thursday, Timothy alleged that Burdett and Williams, who he met for the first time in 2010, pressured him to file fraudulent returns in order to reduce their tax liability.
But Timothy has not been able to produce any corroboration that he was pressured by Burdett or Williams to take illegal deductions — and testified that he did not have any.
Defense attorneys for Williams and Burdett say they asked Timothy for any correspondence between himself and Burdett where she told him to take illegal deductions.
“You have no letters or any other correspondence where they asked you to lower their taxes?” asked Mike Magner, who is representing Burdett.
“No sir,” Timothy replied.
“So we have to rely solely on what you say?” Magner asked.
“Yes sir,” Timothy said.
“No witnesses to these conversations?” Magner asked.
“No sir,” Timothy said.
Timothy said he originally prepared returns with only legitimate deductions for Williams and Burdett. But they rejected them, pressuring him to reduce the amounts they owed. However, during cross-examination, he said he could not produce those returns — nor any computer metadata that proves they ever existed.
On Wednesday, Timothy told prosecutors during his testimony that he was “relieved” when, in 2017, Burdett and Williams told him they no longer wanted him to prepare their returns because it meant he no longer had to falsify them.
But on cross-examination, defense attorney pointed out that Timothy continued to inflate expenses on his own tax returns even after he no longer prepared taxes for Williams or Burdett — and even after he had been questioned by the IRS.
“Nicole Burdett didn’t make you lie on your own tax returns,” Magner said. “Jason Williams didn’t make you lie on your own tax returns.”
Timothy said that they had not.
Former employees testify
Two former employees at Williams law firm also testified as witnesses for the government this week. John Bowker, who worked as an administrative assistant for the firm, took the stand on Thursday. He said he had an office directly across from Burdett, and said he would frequently overhear her phone calls.
At times, he said, he sensed that money was tight around the office. But on questioning from defense attorneys, Bowker said that he never overheard anything about pressuring Timothy to inflate expenses to reduce tax liability.
“You didn’t hear anyone say, ‘We’re going to make Timothy inflate expenses so we can pay less taxes?’ ” Wayne asked.
Bowker said he had not.
Timothy prepared Bowker’s taxes as well, and he said that he gave his information to Burdett, who would then take them to Timothy in order to prepare the returns.
But he said he never suspected there were any issues with his taxes prior to the investigation into Williams, at which point he “questioned whether there was something wrong with my returns.”
It turns out there was, and Bowker was also paying less in taxes than he should have been. But, defense attorneys pointed out, Bowker was not charged with a crime. Rather, he was allowed to file amended returns.
Another attorney who worked for the firm, Gregory Sauzer, who has been charged with misdemeanor counts of willfully failing to file tax returns over a four-year period, also testified for the prosecution.
Sauzer didn’t use Timothy to file his own taxes, and when asked by prosecutors why he didn’t, Sauzer said the way Timothy conducted business gave him pause.
“I thought it was strange that there was an accountant out in Westwego who did taxes out of his house and his nickname was Bubby,” Sauzer said.
On cross-examination, however, Sauzer acknowledged that when he was initially asked by IRS agents why he did not use Timothy, he said it was because he had his own tax preparer — not because he was suspicious of Timothy.
Williams’ ex-wife testifies
Prosecutors also called Williams’ ex-wife, Bridget Barthelemy. The two were married between 2008 and 2016. They separated in 2014, and Barthelemy filed for divorce late that year. She was also recently charged with a misdemeanor tax crime.
Barthelemy testified that Williams handled the finances when they were married, and said that she had never heard of Henry Timothy before she became aware of the investigation into Williams.
She added that Williams tended to pay for things in cash, and that she would frequently go to Williams’ office to get cash out of the safe for her own expenses. She said the safe often contained large amounts of cash — mostly in hundred-dollar bills.
Defense attorneys asked Bathelemy if federal investigators, who first contacted her in 2019, had asked for any corroboration as to her assertion that she frequently took money out of the office.
She said they had not, but maintained that she was telling the truth about it.
At one point prosecutors showed an individual tax return Willimas filed in 2011 that had what appeared to be Barthelemy’s signature on it in the spouse line. But Barthelmy said she hadn’t actually signed it.
The trial will continue next week with more from the prosecution. Prosecutors said earlier this week that they will call Robert Hjortsberg, another lawyer who previously worked at Williams’ firm. Hjortsberg has also been charged with tax fraud.