TARGETED Chapter 63 "The Codner Trial" (A True Story)

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                                              The Codner Trial

The next few weeks were consumed by preparations for the John Codner trial.  It was to be a full blown federal jury trial.  I tried to get the Koskella episode behind him. I needed to focus on my client.

I kept remembering back to the case of Dr. Sherod and I did not want a repeat. The government had offered to require Codner to only have to do a short time, perhaps a couple of years, in federal prison if he would withdraw his defense and plead guilty to one count. No way. Nothing in who I was or what I had become would allow me to fall into that trap again.  I still felt the sting of betrayal and would never forget how quickly the prosecutor forgot our deal.

            The prosecution, failing to get a quick rush to prison, then tried to put the scare on Codner by telling him the outcome of the trial would be sixteen years in prison and millions in fines and penalties. They were deadly serious.  They were dedicated to aggressively targeting him so they could destroy him.

The defense was pretty simple.  He had no criminal intent. He was innocent of any wrong doing and the only reason it had gone this far was because he had got into a fight with the prosecutors and IRS agents by filing against them personally and publically in the Utah State District court. It was an unheard of move that threatened the government agents and attorneys in what they considered a brash and outrageous attack where they had for so long been held immune.  The fire storm it had created had pushed the government beyond the point of reasonableness and they wanted blood.

John was the answer to the government’s search for an example to show anyone out there who even had a thought of pursuing legally after individual agents that they would be first doomed to fail and then be summarily dealt with. There would have to be no doubt that if you mess with the feds you are going to be made an example of and that it was not worth the risk. It was important that everyone was paying close attention to just how involved you would become as a target for even daring to take on the federal bureaucracy.

            After some pretrial motions in an attempt to stop the prosecution I prepared Codner for the worst. In the pretrial I had offered the Court to have my client get all of his taxes up to date and all of his interest and penalties paid. I thought of Bobbie Benson and the success in Tax Court.  It was difficult but John dutifully paid them all. The forms and payments were accepted by the government who then held them up in court and in complete surprise instead of commending John for doing the right thing they held up the forms and said there was proof of John's criminal intent to damage the IRS and Codner had even supplied the amount of the taxes that had been at risk.

            I was both outraged and dumb founded. The whole point of the exercise was to make sure John paid his taxes, penalties and interest, which he did!  Now in the greatest of ironies they were going to punish him based on the taxes that he had paid! The only comparison I could come up with I threw in front of the Court.

            “You would have this man build his own gallows and then hang him?”

            “Counsel is being melodramatic.” The prosecution actually later told me that they thought the line was clever. “This is our only way to measure what he has done.”

            “Your Honor, my client in good faith has tried to make amends by paying his taxes, fines and penalties even before he has finished his dispute with the IRS over the accuracy of them.”

“It is so noted Mr. Young and I am glad that he has taken that positive step.” I knew the judge had a “but” in there that was not going to go well.  “But, he did so after the fact.”

The Prosecutor saw his opening. “It’s not that we do not appreciate the fact that Mr. Codner has paid his lawful share, it’s just that the crime had already been committed before he paid it. Paying it does not erase the crime.”

Suddenly I was reminded of silencers in another case.  I had to come to the defense of my client or this was going downhill in a hurry. I took my best shot.

“John Codner did not commit a crime. He did not intentionally break the law. He did not know that the deduction he took was illegal. He relied on the advice of others who he believed were knowledgeable and credible.”

“Mr. Young.” The Court addressed me as counsel in such a way it was nick named the “stop sign”.  It was a sudden call to attention because the Court was about to say something that was tantamount to a decision.

“May I remind you that your client admittedly did not pay his taxes or file his forms on time during two of the years in question. “Mr. Codner did with criminal intent attempt to deceive the IRS by taking deductions he knew were wrong, that he knew would give him a deduction that was not allowed, and he did it to cheat the system.           Why? Because he just didn't want to pay his fair share of taxes. So please spare me with any oration about your client being innocent.”

“He did not have criminal intent.”

“It does not matter Mr. Young.” The Court was now responding forcefully.

“It does if all you are talking about is a fine and a penalty, and not deprivation of liberty.”

“Motion to dismiss denied.”

I had run into the stone wall of judicial predisposition to favor the prosecution.

The trial itself lasted four days. There was a constant battle back forth, calling of witnesses, rebuttal witnesses, and finally closing argument.           By my count both sides were about dead even going into the final arguments.

The prosecution went on to explain to the jury that Codner had trusts he had set up and that was proof that he was trying to hide his money from taxation because why else would you set up trusts?        

I could think of several reasons,  Codner himself on the witness stand had admitted that most of the trusts he had set up due to his contact with his “friends” who had lead him astray.             Most of the trusts were in fact never even used. The ones that were used had nothing to do with the hiding of tax dollars.  In the end it didn't matter. The jury found him guilty.  I was devastated. I believed John. He had become a good friend. I fought my heart out for him, as any good attorney should.

At times the prosecution had become extremely anxious at the arguments that had flown back and forth across the room. I had grown a lot since my encounter at the Sherod trial. Now a parting shot etched in my mind was the sight of the prosecutors as they exited down the same hallway as used by the judge and just before the door was fully closed they could he heard cheering and giving each other high fives. This was a game to them. People's lives turned inside out and they celebrated. How incredibly sad it was.

A short time later was the sentencing hearing.  I amassed most of the employees from the shop and their families.  They filled the court room.  I had an idea.

“Your Honor, my client is a good and honest man who has no criminal history, no other reason to punish him. The events that took place happened years ago. The record shows that he has paid all of his taxes since then for the past four years, and that he has taken the initiative and raised the money and paid all of the taxes, fines and penalties that were demanded by the IRS in this case.  If the purpose of the law is to encourage compliance then the purpose has been fulfilled.”

I paused a minute and looked back at the others in the court room. As I did they instinctively began to stand. No plan.  No prior preparation. They just stood.

“Your Honor I want you to look at all of the people in this court room. They are the employees and their families of John Codner's business. They rely on that business for their livelihood. They pay their taxes and contribute to the system. Without John there is no business. Sending John to prison will hurt the system, not help it.”

“Please remember, that although John paid his taxes and that does not excuse the untimeliness of the situation, he did pay. He does pay and he will pay. John is not a tax protester. He just wanted to cut his legitimate taxes by every deduction that was his to take. He was wrong. He has paid dearly for that mistake already. Please don't cause the end of his business and the jobs of those who depend on him by sending him away to prison.”

I presented for the Court’s consideration a few more legal materials to insert, but they did not nearly have the impact of the simple logic and the standing people in the courtroom. The prosecution had their turn. The chief prosecutor was not present nor his co-counsel. They had other cases to attend to. They had thought this one was in the bag. The alternate prosecutor had his demand to make and had not been prepared to do anything but deliver his line.

“May it please the Court. Your Honor, the government must insist that Mr. Codner be made an example. He has not only defied the law but he has actively pursued lawsuits against agents to cover up his criminal behavior, so it is the recommendation of the prosecution that Mr. Codner be confined to a federal prison for not more than sixteen years. We believe in this way it will act as a visible deterrent to such behavior by others. We also suggest that an additional fine should be imposed in keeping with the statute and the severity of the amount of tax dollars that were put at risk due to Mr. Codner’s actions.”

I have always been a very religious man. I had spent many an hour on my knees praying about John Codner’s fate. My heart felt supplication was that the judge would soften his heart and lighten up on John and see him for what he was. Many of his family and employees had offered similar prayers.  I had no doubt they were praying even at that very moment when the judge was about to make his decision.

The judge sat for what seemed like a very long time. It was by then evening. Most of the building was empty. It seemed as though he was thinking hard about his decision. I was hoping that somehow the sixteen years could be reduced dramatically. Any prison time however would have been a disaster.

“Mr. Young what do you think I should do?”

I was shocked. Now I was on the spot. If I asked for a reduction in time it would still be time. If I asked for too much the judge would be forced to throw it out and could likely go for more. If I gave away time I would be doing a terrible disservice to my client and would end up beating myself up over it. There had to be a solution.

Then it came to me in a flash of inspiration. I looked back at the rest of the “congregation”.

“Your Honor. I believe these good people should not have to lose their jobs and it makes more sense to keep the business going so Mr. Codner can continue to contribute to the tax system. I say sentence him to a halfway house in the closest location so that he can run his business during the day. That way both objectives will have be met. He did pay his taxes and shows no signs of not being willing to do so now and in the future. In the interest of justice.''

I knew that the last line was a bit of a shot because it was like slapping the judge with a reminder of his ultimate goal, justice.

“I object your honor.” Jumped up the second string prosecutor.

“Of that I am sure.   Mr. Young I think I prefer your solution. Since the fines and penalties have already been paid I will limit the court's order to those. As far as sentence I impose upon you Mr. Codner a period of fourteen months in a half way facility here in the southern region of the Salt Lake County which I believe is the closest to your place of business. Each and every night you will report back to the facility. Failure to report will result in your immediate imprisonment. Do you understand?”

“Yes, sir.” Codner was extremely nervous.

“Now you understand that there are rules attached to living in such a facility. You will have to pay 25% of your income to the facility. I would suggest that is your own personal salary. You will also have to make a report each week to your probation officer. I will see that you are assigned one out of the federal office in Provo if that is possible. Please Mr. Codner do follow the rules. I don't want to see you in here again.”

“You don't have to worry about me.”

The prosecutor was visibly furious over the conclusion. When the information about what had happened was conveyed to the original prosecutors they felt as though they had been robbed of their victory. The IRS targeted Codner for years in reprisals. Even after finishing his time in the half way house the IRS was waiting to hit him again, over the same years, with more penalties and interest for the very same taxes, even though they had been paid once and then twice.  No logic. No reason. All Codner could do was survive.  I on the other hand I had just reached my limit of indulgences. From that time on I was officially the target.

Years later John Codner’s business that he had built was finally buried in a sea of red tape and ever increasing taxes.  It didn’t matter how much he paid, it was never enough.  Finally in the end one IRS agent summed it up.  She told me, without reservation, that it was never about the money.  Codner could not be allowed to stand.  He was far too tempting a target and his message far too powerful.  John Codner lives on.  At an age when he should be retiring he is driving a truck and hoping to make ends meet paycheck to paycheck.   Though they were able to take from him his livelihood, his dream business, they did not break him.

[Note: at the time of the conclusion of this writing in May of 2015 John Codner, my dear friend and respected client, had a heart attack at age 67 and died. At his viewing I embraced his wife Nancy in support and she paid me an unforgettable tribute when she whispered in my ear: “You know you were his best friend.”  John had visited me a few days before his death.  He was exhausted, frustrated, and deeply hurt by what the IRS had taken from him and how the whole family had suffered. John was a good and honest man who deserved better.]