By Jeff Lehr
jlehr@joplinglobe.com
A federal judge has denied defense motions seeking either acquittal or a new trial for a Carthage surgeon and his brother who were convicted last year of tax evasion.
U.S. District Judge Greg Kays upheld federal jury verdicts that convicted orthopedic surgeon Brian K. Ellefsen, 46, and Mark E. Ellefsen, 40, of conspiring to evade taxes on $1.6 million of Brian Ellefsen’s income between 1997 and 2003, and of filing false tax returns in three of those years.
Kays, who was the presiding judge in the May 2009 trial in federal court in Springfield, on Monday denied the two post-trial motions filed by the Ellefsens’ attorneys.
The Ellefsens face up to five years in prison for the conspiracy convictions and up to three years on each of three convictions for filing false income tax returns. Each count also carries a possible fine of up to $250,000, and restitution to the government for lost taxes is mandatory.
Trial testimony established that the Ellefsens were clients of Aegis Co., an Illinois firm that marketed trust packages to wealthy clients nationwide for several years. The founders and principals of the company were indicted in 2004 in connection with an alleged conspiracy to peddle illegal trusts as a supposed means for sheltering income from taxes.
Federal prosecutors focused at the Ellefsens’ trial on showing jurors how supposed “management fees” paid by Brian Ellefsen’s medical practice, Southwest Missouri Bone and Joint Inc., were diverted through financial institutions and sham trusts to an account in Antigua that the doctor controlled with a credit card. Taxes were never paid on those “fees,” and the diverted income was used by the doctor to make payments on personal expenses and loans, to cover the construction costs of his family home, and to purchase another home on Table Rock Lake, according to the Internal Revenue Service.
Mark Ellefsen served as his brother’s office manager and assisted in preparation of his tax returns.
The Ellefsens’ motions for a new trial claimed that the Sixth Amendment was violated when the defense’s cross-examination of an IRS agent was restricted at trial. The defense argued that the agent had based certain tax calculations on amended tax returns filed on behalf of Dr. Ellefsen, but the court prevented defense attorneys from cross-examining her about those amended returns.
The judge pointed out in his ruling Monday that he did not prohibit the defense from questioning the agent about the materials on which she relied to make her calculations. Kays wrote that the defense was restricted only from inquiring “how the civil side of the IRS treated the amended returns, a subject that was not discussed on direct examination” by federal prosecutors.
The judge wrote that the agent had testified that she did not rely upon the amended returns in making her calculations.
The judge also overruled defense arguments that the court had erred by not treating the agent’s testimony as expert testimony and by not allowing proposed expert testimony of a defense witness.
Kays wrote that the agent’s testimony and exhibits were properly classified by the court as a whole, and that the defense was not unfairly prejudiced by her testimony. He also defended the decision not to allow the defense’s expert witness because “the probative value” of her testimony “was substantially outweighed by the danger of confusion of the issues, misleading of the jury and undue delay of the trial.”
Report still out
A sentencing date has not been set for the defendants. A pre-sentence investigation ordered after the trial has yet to be completed.
