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United States District Court For the Eastern District of Michigan Southern Division

Criminal No.08-CR-20585

United States of America, Plaintiff,

Judge Gerald E.

v.

Rosen

Peter

Hendrickson

Michael C. Leibson (P-24092) United States Attorneys Office Attorney for Plaintiff 211 W. Fort St. #2001 Detroit, Michigan Telephone: 313 226-9615

Reply Brief in Support of Motion to Dismiss Indictment for Defendant. Violation of Rule 7 and Rule 129(b), Federal Rules of Criminal Procedure and the Fifth and Sixth Amendments to the Constitution of the United States Ellen Dennis (P-24400) Law Office of Ellen Dennis Attorney for Defendant 101 S. Ann Arbor St., Ste. 203A Saline, Michigan 48176 Telephone: 734 944-5819

Mark F. Daly, MA Bar No. 640581 United States Department of Justice, Tax Division Attorney for Plaintiff P.O. Box 972 Washington, D.C. 20530 Telephone: 202 616-1786

Lyle D. Russell, Jr. (P-27039) Russell & Stoychoff, P.C. Attorney for Defendant 4468 W. Walton Blvd. Waterford, MI 48239 Telephone: 248 618-0300

Reply Brief in Support of Motion to Dismiss Indictment for Violation of Rule 7and Rule 12(b), Federal Rules of Criminal Procedure and the Fifth and Sixth Amendments to the Constitution of the United States Contrary to the second section of the government’s brief, Defendant is NOT arguing that this

court should review the sufficiency of the evidence presented to the Grand Jury. However, Defendant IS arguing that the Grand Jury must have found probable cause as to each and every element of the offense charged and that it should be apparent from the indictment itself that it did so. In other words, while this court cannot be asked to determine whether there was, in fact, sufficient evidence upon which the Grand Jury could have found probable cause as to each and

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every element, this court must determine (1) whether the Grand Jury was properly instructed as to each and every element and (2) whether the properly instructed Grand Jury did, in fact, find probable cause as to each and every element. The Grand Jury is charged with doing justice generally, and, more specifically, to act as a protection of the citizen from improper exercise of governmental power. Unless this court assures that the Grand Jury was properly instructed as to each and every element and did find probable cause as to each and every element, the Grand Jury will be unable to effectively exercise its intended function as a check on government power. The government concedes that among the elements of the charged offense is the element that the defendant made and subscribed a tax return that was false as to a material matter. Thus, it has conceded that it must prove the material falsity of the defendant’s tax return. The indictment alleges that the defendant reported zero wages when in fact he had received wages. Whether the defendant received “wages” as that term is defined in the relevant portions of the tax code is dependent upon the meaning of “person”, “employee”, and “in employment”, as those terms are used in the relevant portions of the tax code. It would be wholly improper and a denial of the defendant’s rights if the Grand Jury found probable cause on the element of falsity while thinking that those terms (“person”, “employee”, “in employment” and “wages”) had the meaning accorded them in every day speech or failed to recognize, for instance, that the tax code actually listed many specific types of receipts for work that are exceptions to “wages” under the tax code. In other contexts, the government recognizes and takes advantage of the difference between statutory definitions and ordinary speech. For example, 18 U.S.C. §924 defines “brandish” as “to display all or part of the firearm, or otherwise make the presence of the firearm known to another person, in order to intimidate that person, regardless of whether the firearm is

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directly visible to that person.”(emphasis added). That statutory definition is very different from the common understanding of brandish.1 Obviously, the government would instruct the Grand Jury concerning the statutory definition of “brandish”, lest it refuse to indict for the brandish enhancements unless the firearm was waved around by the defendant and visible to the victim. Here too, the government should be required to properly instruct on the statutory meaning of “wages”, “employee”, “person”, and “in employment”, and the Grand Jury should be asked to find probable cause as to these elements. The government cites to United States v. Latham, 754 F. 2d 747 (7th Cir. 1985), a Seventh Circuit case nearly 25 years old. In Latham the Seventh Circuit seems to summarily conclude, without conducting an iota of legal analysis, that “person” and “employee” have the same meaning in the tax code as they would have in ordinary speech. However, this is refuted by the tax code itself, and, significantly, the government has not cited to any more recent case or to any case in which the court has conducted any legal analysis of the issue. Mr. Hendrickson’s book does conduct a thorough analysis of these definitions, and it is that analysis that the government refuses to engage. The government and the Latham court seem to believe that all that is required is to disparage any contrary viewpoint without explaining why it is incorrect. In fact, there are many court decisions that recognize and discuss the significance of statutory definitions in the context of the tax laws. In Office Max v. United States, 428 F. 3d 583 (6th Cir. 2005), the United States Court of Appeals for the Sixth Circuit devoted 21 pages to the meaning of “and” in a statute pertaining to the telephone tax, before interpreting it adversely to

1

Here is the Webster’s Revised Unabridged, 1913 Edition, definition: To move or wave as a weapon, to shake or flourish.

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the government’s position.2 In United States v. Neal, 93 F. 3d 219 (6th Cir.1996), the United States Court of Appeals for the Sixth Circuit considered the meaning of “person” in 26 U.S.C.§7203. In Mobley v. Commissioner of Internal Revenue, 532 F.3d 491 (6th Cir. 2008), the United States Court of Appeals for the Sixth Circuit decided the meaning of “includes” and “courts” in 28 U.S.C. §610. All the defendant asks is that this court require the government to recognize that the words, “wages”, “employee”, “person”, and “in employment”, as used in the tax code, are terms of art that have different meanings from the common meanings, that this court require the government to properly instruct the Grand Jury that the code definitions are different from the common definitions, and that that this court assure that the Grand Jury indict only after finding probable cause that the defendant made false statements in light of its properly instructed understanding of the tax code definitions of these terms of art and its consequent understanding of the true character of the defendant’s filings. If the Grand Jury chooses to re-indict after being properly educated, whether the government can then prove beyond a reasonable doubt that the defendant was a “person” who earned “wages” as those terms are used in the tax code will be a subject for trial. For theses reasons as well as the reasons stated in the Motion to Dismiss Indictment for Violation of Rules 7 and 12(b), Federal Rules of Criminal Procedure and the Fifth and Sixth Amendments

2

It is worth noting that the government wrongly charged tax for decades and collected thousands of taxpayer dollars based on its misinterpretation of the word “and”. It took adverse decisions from six circuits before it abandoned its untenable position.

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to the Constitution of the United States, the other two Motions to Dismiss Indictment, and the Reply Briefs in Support of the other two Motions to Dismiss Indictment, Defendant asks this honorable court to dismiss this indictment.

Respectfully submitted, /s/Ellen Dennis (P-24400) Law Office of Ellen Dennis Attorney for Defendant Hendrickson 101 S. Ann Arbor St., Ste. 203A Saline, Michigan 48176 734 944-5819 [email protected]

/s/Lyle D. Russell, Jr. ((P-27039) Russell & Stoychoff, P.C. Attorney for Defendant Hendrickson 4468 W. Walton Blvd. Waterford, MI 48239 Telephone: 248 618-0300 [email protected] Dated: May 22, 2009

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Index of Authorities Cases: Mobley v. Commissioner of Internal Revenue 532 F.3d 491 (6th Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Office Max v. United States 428 F. 3d 583 (6th Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 United States v. Latham 754 F. 2d 747 (7th Cir. 1985). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 United States v. Neal 93 F. 3d 219 (6th Cir.1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Statutes: 18 U.S.C. §924. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4 Constitutional provisions: Fifth Amendment to the United States Constitution.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1, 4, 5 Sixth Amendment to the United States Constitution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 4, 5 Rules: Rule 7, Federal Rules of Criminal Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 4, 5 Rule 12(b), Federal Rules of Criminal Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 1, 4, 5 Books: Webster’s Revised Unabridged Dictionary, 1913 Edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

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Certificate of Service I hereby certify that on May 22, 2009, I electronically filed the foregoing paper with the Clerk of the Court using the ECF system which will send notification of such filing to the following: Michael C. Leibson Assistant U.S. Attorney 211 W. Fort St., Ste. 2001 Detroit, MI 48226 [email protected] and Mark F. Daly, MA Bar No. 640581 United States Department of Justice, Tax Division P.O. Box 972 Washington, D.C. 20530 [email protected]

/s/Ellen Dennis_(P-24400)______________ Law Office of Ellen Dennis Attorney for Defendant Arlee 101 S. Ann Arbor St., Ste. 203A Saline, Michigan 48176 734 944-5819 [email protected]

/s/Lyle D. Russell, Jr. ((P-27039) Russell & Stoychoff, P.C. Attorney for Defendant Hendrickson 4468 W. Walton Blvd. Waterford, MI 48239 Telephone: 248 618-0300 [email protected]

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