Case 2:16-cr-00007-KS-MTP Document 119 Filed 09/29/16 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
UNITED STATES OF AMERICA
v.

No. 2:16cr7-KS-MTP

CHARLES BOLTON and
LINDA BOLTON

MOTION FOR A JUDGMENT OF ACQUITTAL
OR, IN THE ALTERNATIVE, FOR A NEW TRIAL
Oral Argument Requested
Pursuant to Rules 29 and 33 of the Federal Rules of Criminal Procedure, and
the Fifth and Sixth Amendments to the United States Constitution, Defendant
Linda Bolton hereby moves for a judgment of acquittal on Counts 2 through 10, or
in the alternative, a judgment of acquittal on Counts 6 through 10, or in the
alternative, a new trial on Counts 6 through 10.
Linda Bolton was found not guilty on Count 1. The jury could not reach
agreement on Counts 2-5 and a mistrial was declared. She was convicted on
Counts 6-10. Counts 1-5 charged the Defendants with willfully evading federal
income tax in violation of 26 U.S.C. 7201. Counts 6-10 charged them with
willfully making a false material statement on a federal income tax return in
violation of 26 U.S.C. 7206(1).
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I.

THE GOVERNMENT HAS NOT PROVEN BEYOND A
REASONABLE DOUBT THAT LINDA BOLTON IS GUILTY OF
WILLFULLY MAKING A FALSE STATEMENT ON HER TAX
RETURNS.
Because the Government has not proven Linda Bolton guilty beyond a

reasonable doubt, Rule 29 and the Fifth and Sixth Amendments to the Constitution
require that a judgment of acquittal be entered for Linda Bolton on all counts.
Alternatively, a judgment of acquittal should be entered on Counts 6 through 10.1
Alternatively, the convictions on Counts 6 through 10 should be vacated and a new
trial should be granted to Linda Bolton on those counts in the interests of justice.
The Government’s claim regarding tax evasion and false statements on tax
returns stems from two sources of allegedly unreported income: the John Lee
cashed checks and the various deposited checks that were marked as “loans.”
The John Lee Cashed Checks
John Lee wrote off the cashed checks in the amount of $273,520.00 over a
five-year period as business expenses --- labeling many of them as “supplies.” He
did the same with the additional $66,419.79 in deposited checks. The
Government has invoked a double standard, presuming that Charles and Bolton
willfully violated the tax laws, while at the same apparently accepting John Lee’s
1

Because Linda Bolton was convicted of making a false statement as alleged in counts 6-10, this
section focuses on the elements regarding that particular crime. However, the arguments
regarding willfulness and taxable income also apply to the tax evasion charges in counts 2-5.
Thus, a judgment of acquittal should be granted on counts 2-10. However, if the Court believes
the arguments apply only to Counts 6-10, it should enter a judgment of acquittal on those counts.
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fantastical claim that this approximately $340,000 was spent over five years for
catering and alcohol at office-related social functions. Despite invoking this
double standard and endorsing John Lee’s deceit, the Government has not carried
its burden of demonstrating that these checks were for goods and services from
Hall’s Package Store and Sports 22 restaurant and catering service, and has not
proven they were taxable income.
The listing of the checks as being for “supplies” by John Lee is not credible
evidence, particularly in light of the fact that he included as “supplies” items such
as expensive purchases from Adler’s jewelry store in New Orleans, payments to
his children, and payments to his former daughter-in-law who lives in Meridian, all
in an obvious attempt to evade taxes himself.
The only other evidence is Special Agent Luker’s testimony that John Lee
told him that these payments were for liquor and food. That hearsay evidence,
however, is as unreliable as Lee’s designation of the payments as “supplies.” John
Lee’s long-time assistant, Helen Moreland, testified that she was unaware of any
office-related functions being held in the office or at his house other than a holiday
event where hams and turkeys were given away, and she confirmed that those were
purchased from a company called Honey Baked Hams. Given her position as his
assistant of several decades, Ms. Moreland likely would have had some role in
planning office-related functions such as arranging food and sending invitations
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and would been involved in discussions with John Lee about them. That fact that
she didn’t, and that she had no knowledge of any events beyond the holiday
gathering, undermines the Government’s contention that this money was spent on
liquor and food.
Exhibits G-74, G-76, G-79, G-81,and G-83 list a total of 54 checks over 5
years, which averages out to nearly one check a month. If these alleged events
were held once a month or once every two months, surely Helen Moreland would
have heard something about them.
Moreover, the Government has presented no evidence to corroborate John
Lee’s self-serving claim that these checks were written for food and liquor to be
served at these frequent social events. No one in John Lee’s law office has
testified about any such events, and neither has anyone involved in his business
ventures. Apparently no one has been found who attended these alleged events
and who could testify about them.
In sum, the Government’s proof relies solely upon the discredited word of
John Lee, and that is not enough to sustain its burden of proving beyond a
reasonable doubt that these checks were taxable income.
While there were a handful of invoices to John Lee that were paid by check,
approximately $66,000 of his checks was deposited into the Hall’s and Sports 22
accounts. Approximately $42,000 was marked as loans, and the remaining
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$24,000 was included as income on the tax returns. That was more than enough to
cover the handful of actual purchases that John Lee made from Hall’s and Sports
22 and to pay the taxes owed for actual goods and services that were purchased by
John Lee.
Furthermore, of the 54 John Lee checks that were cashed over a five-year
period, only five were cashed by Linda Bolton, and they account for only a small
portion of the overall amount. See Exhibits G-74, G-76, G-79, G-81, and G-83.
There is insufficient evidence to prove beyond a reasonable doubt that she
personally knew this money was for goods and services and therefore was taxable
income.
The Items Marked as Loans
Renee Moore from the former Nicholson & Co. testified that the earmarking
of certain bank deposits as “loans” was the equivalent of capital contributions for a
small business like this. She found nothing unusual about Ms. Bolton’s practice of
marking certain deposits as loans, or at least nothing sufficiently unusual to cause
her to contact Linda Bolton regarding the practice or to discuss with Ms. Bolton
the guidelines regarding what could and couldn’t be designated as a loan or a
capital contribution. In the complicated world of tax law, the Government
presented no evidence that Ms. Bolton knew that she could not designate those

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items as loans or capital contributions, and there is no evidence that anyone ever
explained that to her.
As indicated by Jury Instruction No. 15, a person cannot be convicted of
making a false statement on a tax return without proof that she knew the statement
was false and that she made it willfully with the intent to violate a known legal
duty. In other words, Linda Bolton would have to have known that the accounting
firm was deducting the items marked as loans from the gross income of the
businesses on the Schedule C, and would have to have known that this was
unlawful. The evidence in this case demonstrates that for the 2009 tax year, the
accounting firm Nicholson & Co. did not deduct the items marked as loans from
the gross income of the businesses. However, there is no evidence that Linda
Bolton ever contacted the firm to complain that the loans were not deducted.
Although the firm did start deducting them for the 2010 tax year, this change was
not prompted by anything Linda Bolton did.
Linda Bolton’s failure to take any action regarding the non-deduction in
2009 indicates that she did not know how the firm was treating the items marked as
“loans,” that she did not examine the tax returns they prepared to see how they
treated those items, and that she was not trying to deceive the firm into preparing a
return that was unlawful. The Government has not proven beyond a reasonable
doubt that Linda Bolton had any particular expectation on how the items marked as
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loans would be treated during the years in question, and certainly has not proven
that she knew the tax returns from 2010 to 2013 actually deducted those items
from the gross income of the businesses. Absent such proof beyond a reasonable
doubt, she cannot be convicted of a violation of 26 U.S.C. 7206(1).
In this connection, it is important to note that Linda Bolton did not have any
degree or background in accounting and there was no evidence that she had any
understanding of accounting concepts. The bookkeeping that she provided the
accounting firm was limited to the handwritten sheets she provided every month.
Thus, she cannot be presumed to know what deposits can and cannot be listed as
loans or capital contributions in a list provided to an accounting firm. Absent some
proof that she did know, the Government has not carried its burden to prove false
statements stemming from the items marked as loans.
II.

THE FAILURE TO GRANT LINDA BOLTON’S PROPOSED JURY
INSTRUCTIONS 4, 5 AND 7 REQUIRES A NEW TRIAL.
Linda Bolton’s proposed Jury Instruction No. 7 read as follows:
The Government’s contention is that the John Lee checks were written to
purchase food and alcohol. In order for you to consider this as taxable
income, the Government must prove beyond a reasonable doubt that the
checks were written to purchase food and alcohol. If the Government fails
to prove that beyond a reasonable doubt, you may not consider those checks
as taxable income.

However, the instruction was denied. This denial was not in keeping with the
requirement that the Government prove the Defendants evaded taxes or made a
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false statement regarding taxes that were owed, and was not in keeping with the
requirements of the Fifth and Sixth Amendments that the Government prove all
essential elements of the crime beyond a reasonable doubt.
The primary defense regarding the John Lee checks was that they were not
for goods and services and therefore were not taxable income. The Government
made clear during the trial its position that the John Lee checks were written to
purchase food and alcohol. The Defendants were entitled to an instruction
containing their theory of defense light of the Government’s specific allegations.
Otherwise, the jury had no way of knowing the law regarding what is and is not
taxable income. For example, a juror could believe that the income was taxable
simply because the Boltons received it from John Lee, even if it was a gift or even
if the checks were being cashed for John Lee and the money was returned to him.
To put it another way, a juror could have a reasonable doubt that the John Lee
money was for goods and services, but still could conclude that it was taxable
income simply because John Lee wrote the checks to the Bolton’s businesses.
While it is true that, theoretically, goods and services could encompass
something beyond catering and alcohol, the Government’s theory in this case was
that the money was spent for catering and alcohol regarding various businessrelated functions that John Lee allegedly held. Thus, this instruction was tailored
to the case as it was presented to the jury.
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Because the jury was not properly instructed on what does and does not
constitute taxable income with respect to the John Lee checks, a new trial is
required.
Linda Bolton’s Proposed Jury Instruction No. 4 read as follows:
Title 26 United States Code, Section 102(a) provides: “Gross income does
not include the value of property acquired by gift, bequest, devise, or
inheritance.” Thus, a gift of money need not be reported as income on the tax
return of the person who received the gift.
Linda Bolton’s Proposed Jury Instruction No. 5 read as follows:
Title 26 United States Code, Sections 2501 and 2502, provides that gifts
above a certain amount are taxable, but the tax “shall be paid by the donor.”
26 USC 2502(c). In other words, the recipient of a monetary gift does not
owe taxes on it and is not required to report the gift on his tax return.
The denial of these jury instructions created the same problem as the denial of Jury
Instruction 7 and violated the same legal principles. A juror who had a reasonable
doubt that the John Lee checks were for goods and services, and thought they
could be gifts, might still convict because of an erroneous belief that gifts are
taxable income to the recipient.
In response to this proposed instruction, the Government argued that there
was no evidence that the checks were gifts, and the Court agreed, denying the
instruction on that basis. But there was testimony from Helen Moreland that John
Lee was a wealthy man who was generous with his friends, and that he and Charles
Bolton were good friends. And there was certainly a dispute about whether the

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money was for goods and services. If a juror had a reasonable doubt about
whether the checks were for goods and service, one of the possibilities that would
naturally arise is that it could have been a gift from a wealthy man to his good
friend. The Defense was entitled for the jury to be instructed that gifts are not
taxable to the recipient. The failure to grant these instructions requires a new trial.
______________________________
Further, Linda Bolton adopts the substantive arguments contained in
Sections VII and X from the post-trial motion of Charles Bolton (doc. 118).2 She
reasserts the arguments her counsel made at the close of the Government’s case, as
well as all objections and other claims made on her behalf during the trial of this
case. She also raises and objects to any failure by the Government to disclose all
information that should have been disclosed pursuant to the Constitution, the rules
regarding discovery, and the orders of the Court regarding discovery.
CONCLUSION
In light of the foregoing, the Court should enter a judgment of acquittal on
all counts, or in the alternative, grant a judgment of acquittal on Counts 6 through
10, or in the alternative, grant a new trial on Counts 6 through 10.

Linda Bolton does not dispute the other arguments and points made in Charles Bolton’s motion,
but VII and X are the only ones applicable to her.
2

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Respectfully Submitted,
s/Robert B. McDuff
ROBERT B. McDUFF
Miss. Bar #2532
MCDUFF & BYRD
767 North Congress Street
Jackson, MS 39202
(601) 969-0802
(601) 969-0804 (fax)
rbm@mcdufflaw.com
September 29, 2016

Counsel for Linda Bolton

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CERTIFICATE OF SERVICE
I certify that I have electronically filed the foregoing through the Court’s
ECF system, which will send notification to, and electronically serve a copy on, all
counsel of record in this case. This 29th day of September, 2016.
s/ Robert B. McDuff
Counsel for Linda Bolton

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