United States v. DeSimone

United States Court of Appeals
For the First Circuit

No. 05-2314

UNITED STATES,

Appellee,

v.

ROCCO P. DESIMONE,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND

[Hon. William E. Smith, U.S. District Judge]

Before

Lynch, Circuit Judge,

Campbell, Senior Circuit Judge,

and Lipez, Circuit Judge.

John A. MacFadyen, III, with whom MacFayden, Gescheidt &
O'Brien was on brief, for appellant.
Kirby A. Heller, Attorney, Criminal Division, with whom
Robert Clark Corrente, United States Attorney, Luis M. Matos, and
Dulce Donovan, Assistant U.S. Attorneys, United States Department
of Justice, were on brief, for appellee.

June 7, 2007
 CAMPBELL, Senior Circuit Judge. Defendant-appellant

Rocco DeSimone appeals from his conviction after a jury trial for

filing a false tax return, in violation of 26 U.S.C. § 7206(1). He

contends that the district court committed prejudicial errors in

excluding and admitting evidence at his trial. We affirm

DeSimone's conviction.

Background and Facts

On August 18, 2004, a federal grand jury returned an

indictment charging DeSimone with wire fraud, in violation of 18

U.S.C. § 1343 (counts 1 and 2), and making and subscribing a false

tax return, in violation of 26 U.S.C. § 7206(1) (count 3). At the

ensuing trial, the jury acquitted him of wire fraud but found him

guilty on the false tax return count. The latter alleged that the

false return "reported long term capital gains in the amount of

$1,000,000, on Schedule D, Part II, line item 16, whereas

[DeSimone] then and there well knew and believed that he had not

earned such long term capital gains but had, instead, earned

ordinary income substantially in addition to the amount reported,

all in violation of 26 U.S.C. § 7206(1)."

The evidence at trial included the following. DeSimone

was an art broker. A mutual friend had introduced DeSimone to

Janet Salz, an art dealer. She agreed to let DeSimone sell two of

her paintings - "Canal at Zaandam" by Claude Monet and "Les

Mouettes" by Henri Matisse. According to her testimony, she told

-2-
DeSimone she wanted to sell the Monet for $3 million and would give

DeSimone a ten percent commission. While he was looking for a

buyer, DeSimone kept Salz's two paintings at his house. Although

Salz could not identify precisely when she handed DeSimone the

paintings, she testified to doing so "not long" before the sale and

"not more than a year."

DeSimone found a buyer for Salz's two paintings, as well

as for a third painting he had been asked to sell by another owner

- "Jeune Fille Blonde" by Pierre Auguste Renoir. James Dorcey

introduced the buyer, his neighbor Michael Joyce, to DeSimone, and

the three men met at DeSimone's house in August 1999 to view the

paintings and negotiate a deal. There was evidence DeSimone

originally told Joyce that he was selling the Monet for $5.5-6

million and the Renoir for $3.8-3.9 million, but that he could

arrange a lower price if Joyce bought all three paintings. Joyce

agreed to do so, and DeSimone reduced the asking price of the Monet

to $4.65 million and the Renoir to $3 million. Including the

Matisse, the package totaled $8.3 million.

According to Salz, DeSimone contacted her and told her

that his buyer would pay only $2.7 million for the Monet, and she

agreed to sell it at that price. Regarding DeSimone's commission,

-3-
Salz testified that DeSimone told her that "he wasn't going to take

any money, because he didn't give me enough money."1

Joyce first wired a down-payment of $430,000 to the

client escrow account maintained by Richard Corley, DeSimone's

attorney, and subsequently wired to Corley's same account the

second payment of $7,870,000. On DeSimone's instructions, attorney

Corley paid Salz $2.7 million for the Monet and $450,000 for the

Matisse. Corley also disbursed funds to the owner of the Renoir,

to another art broker as a commission for the sale of the Renoir

and the Matisse, and to Dorcey. Other checks written from the

Joyce deposits in Corley's escrow account included a total of

$1,109,000 to DeSimone, a payment of $10,000 to Corley for his

fees, and a payment of $658,000 to one Allen Williams to settle a

lawsuit that Williams had brought against DeSimone and another man,

alleging, inter alia, fraud in connection with an unrelated art

transaction. DeSimone signed over one of the checks that Corley

had written to him for $35,000 to Donald Morin as partial payment

towards the settlement of another lawsuit that arose from

DeSimone's sale of two Ferrari automobiles to Morin.

1
In defending successfully against the fraud counts, DeSimone
contended that the arrangement with Salz was one termed in the art
world as "consignment with a net price," allowing the broker to
retain whatever sum a buyer paid in excess of the owner's asking
price. According to DeSimone's expert, such an arrangement was
standard practice. The government argued that the arrangement
between Salz and DeSimone was actually a transaction called a
"consignment with a commission," whereby the broker receives only
an amount which may be a percentage of the sale or a flat fee.

-4-
 According to IRS agent Robert Ferraro, who testified

extensively at trial, DeSimone's net profit was $1,767,000, after

deducting certain offsetting expenses but without deducting the

$658,000 payment to Williams. Contrary to the defense's

suggestion, the agent did not believe the Williams settlement could

properly be deducted as a business expense for tax purposes from

DeSimone's income. According to Ferraro's testimony, DeSimone's

return should have reported a net profit from the sale of the

paintings of $1,767,000 and should have resulted in an additional

tax payment of $422,832.

DeSimone's accountant for about seventeen years was one

Michael Corrado. Corrado prepared DeSimone's tax returns based on

records that DeSimone turned over to him. These records included

bank statements, check stubs, and "one-write" checkbook sheets,

which recorded cash receipts and disbursements. Over the years,

Corrado had discussed income classifications with DeSimone, who

understood the difference between ordinary income earned from his

self-employment, which was to be reported on Schedule C of a

federal income tax return, and capital gains, which were to be

reported on Schedule D, as well as the classification and

implications of short-term versus long-term capital gains.

Some time before October 12, 2000, Corrado and DeSimone

discussed the sale of "some paintings," and, according to Corrado,

DeSimone told him that he expected to earn "[o]ne million dollars

-5-
or better." The two discussed the need to determine the "holding

period for purposes of properly classifying the gain." Corrado

explained to DeSimone that the holding period determined which tax

rates applied.

After obtaining two extensions for filing DeSimone's 1999

tax return, Corrado finally received the pertinent information from

DeSimone and reviewed the documents. The one-write checkbook

revealed that DeSimone had received a $45,000 down-payment towards

a "commission," which Corrado reported on Schedule C as self-

employment income. The same sheet also included an entry of the

receipt of a down-payment of $1.1 million. Because the paperwork

was unclear as to how to classify that income, Corrado telephoned

DeSimone on October 12, 2000, and asked him about it. According to

Corrado, DeSimone responded that he had sold three paintings from

his collection "that he owned," and, in response to Corrado's

question, stated that he had owned them for more than one year.

During that same conversation, DeSimone told Corrado that Dorcey

was entitled to a $100,000 commission on "this painting," which

entitled DeSimone to a deduction on his capital gain.

Corrado then completed DeSimone's tax return. He

reported on Schedule D a $1.1 million long-term capital gain,

offset by the $100,000 payment to Dorcey, based on the information

that DeSimone had provided, and listed the acquisition date of the

assets as August 1, 1998, which he supplied as an "arbitrar[y]"

-6-
date on his own. Although Corrado had records for business

expenses that were properly listed on Schedule C (showing a net

income of $51,509), he had none in connection with the sale of the

three paintings, and DeSimone never told him of any (with the

exception of the single Dorcey payment). Corrado did not know that

DeSimone had personally received a net of more than $1.1 million

from the proceeds of the art sale and was unaware that DeSimone had

paid $658,000 to Williams from those proceeds to settle an

unrelated lawsuit. DeSimone and his wife signed the return on

October 14, 2000, and it was filed with the IRS.

The total tax shown and paid was $299,456. After

learning that a federal investigation of his tax return was taking

place, and that Corrado had testified before a grand jury, DeSimone

filed an amended return on April 10, 2003. In this return, he

reported $1.1 million on Schedule C as a part of his gross income

rather than as a capital gain. The amended return indicated an

additional tax due of $125,521, for a total tax owed for the year

of $423,618.2

2
The Williams settlement sum was not itemized as a deductible
business expense either in the original or the amended tax return
filed by DeSimone. DeSimone argues, however, that the settlement
would have been a legitimate business expense offsetting the sale
of the paintings, the proceeds from which sale he had intended to
claim as business income. He further suggests at p. 4 of his
appellate brief that the $1 million capital gain in the original
return reflected "the net of the profit realized from the art sale
less the payments to settle the two lawsuits." He makes this
contention notwithstanding his further statement, on p. 8, that
"whatever the viability of the settlement payments as business

-7-
 IRS agents, including Ferraro, first approached Corrado

about DeSimone's initial tax return on March 9, 2001, five months

after Corrado had prepared it. They discussed the October 2000

telephone conversation in which DeSimone had allegedly told Corrado

that he had owned the paintings for more than one year, and the

agents served Corrado with a grand jury subpoena. Corrado had "no

idea whatsoever" that the agents were looking into Schedule C

versus Schedule D income or DeSimone's itemized deductions.

Corrado's first grand jury appearance was in August 2001.

He told the grand jury, as he had the agents in March, that

DeSimone had advised him that he had owned the three paintings for

more than a year. More than a year after that grand jury

appearance, Corrado testified that he had entered upon a period of

uncertainty, during which he questioned the classification of the

profits from the sale of the paintings. Those doubts stemmed from

DeSimone's frequent telephone calls to Corrado about Corrado's

grand jury testimony and the status of the investigation, and a

meeting between Corrado and DeSimone's lawyer, Corley. In

preparation for that meeting, Corrado prepared some handwritten

notes in which he again reiterated that DeSimone had told him that

he "had the paintings for more than one year," but that Corrado

never asked DeSimone whether he "owned" the paintings. He

expenses, they could not be treated as part of the basis for the
sale of art."

-8-
concluded in his notes that "Rocco was in no way attempting to

misrepresent this transaction, and that the issue that has arisen

has arisen from nothing more than a miscommunication."

On March 27, 2003, DeSimone's lawyer faxed an affidavit

to Corrado for his signature, in which he would attribute the

misclassification of the profit to his own "mistake and error."

Corrado changed those words to "this misunderstanding as to

ownership of the art," but the attorney never incorporated

Corrado's changes. At the same time, DeSimone told Corrado that,

based upon their longstanding relationship, he "didn't want to have

to take legal action against me," which Corrado interpreted as a

threat of a malpractice suit. Corrado then signed the unedited

affidavit on April 29, 2003, and DeSimone signed, on the same day,

a document releasing Corrado from liability for his role in

preparing the 1999 tax return. The signed affidavit still

incorporated Corrado's statement that DeSimone has told him that he

"had the artwork for more than one year."

Agent Ferraro reinterviewed Corrado on September 22,

2003, armed with the affidavit and Corrado's grand jury testimony

from August 2001. In a "stern" and "raised" voice and "very

assertive" manner, Ferraro told Corrado that it was a crime to lie

to a grand jury and a federal agent. In response, Corrado claimed

that he did not read the affidavit closely, was guilty of no more

than a "failure to read," and had signed the affidavit to "make the

-9-
whole thing go away." On cross-examination during trial, Corrado

conceded that he never asked DeSimone what he had paid for the

paintings or when he had purchased them. He admitted that he

simply made up the acquisition date which he entered on Schedule D.

He did not ask for any documentation. On redirect, Corrado was

permitted to describe his prior testimony to the grand jury that

DeSimone had told him he had owned the paintings for more than a

year.

Discussion

DeSimone concedes that his initial tax return for 1999,

which he signed, should not have categorized the proceeds he

received from the sale of the paintings as a long-term capital gain

on Schedule D3 but should have instead reported them on Schedule C

as business income. He also concedes, see note 2, supra, that

"whatever the viability of the settlement payments as business

expenses, they could not be treated as part of the basis for the

sale of art." He denies, however, that the mistakes made in his

return were willful, contending instead that they stemmed from his

innocent misunderstanding and from mistakes attributable to his

accountant Corrado, who prepared the return.

3
On Part II of Schedule D of the return under the heading,
"Long-Term Capital Gains and Losses--Assets Held More Than One
Year," the property was described as "3 PAINTINGS." Under "(b)
Date Acquired," was "08/01/98" and "(c) Date Sold" was "09/07/99."
The "Sale Price" was listed as "1,100,000" and the "(e) Cost or
other basis" was "100,000," for a "(f) Gain (or Loss)" of
$1,000,000.

-10-
 In this appeal, DeSimone argues that the district court

committed reversible error by excluding testimony that would have

been probative of his lack of willful intent to make a false tax

return. Additionally, DeSimone contests the district court's

admission of (1) evidence he says wrongfully bolstered Corrado's

credibility and (2) a summary chart showing DeSimone's net profit

from the sale of the paintings, accompanied by testimony that the

Williams lawsuit had alleged fraud. We turn to these contentions.

I. Exclusion of Evidence of Corley's Testimony Concerning
DeSimone's Request That He Call Corrado

We first consider whether the district court erred in

refusing to admit testimony by attorney Richard Corley regarding

DeSimone's request that he call DeSimone's accountant, Corrado, in

connection with whether the payment of $658,000 to Williams in

settlement of an unrelated lawsuit should be made from Corley's

client account or from DeSimone's personal account. This request

occurred, Corley said, just before he remitted to Williams the

$658,000 settlement check from the art sale proceeds held in the

client's escrow account.

Attorney Corley was called initially as a prosecution

witness. During cross-examination, DeSimone's counsel asked him

about such a conversation. The government objected that Corley's

response would be hearsay. The court overruled the objection and

permitted DeSimone's counsel to elicit from Corley that he "had a

consultation with [my client]. He asked me to call his attorney

-11-
[sic] concerning the tax ramifications" of the Williams settlement.

Defense counsel then sought unsuccessfully to inquire if the heart

of the conversation between Corley and DeSimone had gone to whether

Corley could write the Williams check directly from Corley's

client's account or whether it needed to be written from DeSimone's

checking account. The government persisted in its hearsay

objection, and after counsel failed to rephrase the question in a

manner satisfactory to the court, the court called for a sidebar

conference.

Counsel for DeSimone asserted at the sidebar that Corley

would testify that, as the sale of the paintings was winding up,

DeSimone asked Corley whether he thought the settlement was a

business-related expense and whether he could pay Williams directly

from Corley's account "because the money was there and Mr. Corley

was writing checks, or whether the money needed to go

into . . . his personal checking account so that he could pay it

from there." Defense counsel represented "[t]he

allegation . . . by the government . . . is incredibly

important . . . that this was used to pay a personal debt, and it

was paid out of here so that there would be no record of it and no

one would ever see it. And . . . Corrado told Mr. Corley, this was

in consultation with my client, which I'll never get into, that it

was a wash." Counsel continued: "This was money he [DeSimone] had

earned as a result of his business enterprises, and this was money

-12-
that he was paying to settle a dispute in connection with his

business affairs and, therefore, the words used was 'a wash.'"

The government objected that the conversation was

hearsay, submitting that it did not qualify as party opponent

hearsay under Fed. R. Evid. 801(d)(2). Defense counsel responded,

"I am asking him not for the truth." When the district court

challenged this rationale, defense counsel argued instead that the

testimony could go to the receiver's state of mind. ("There could

be things, Judge, that would be relevant but go to the receiver of

the statement's state of mind as to why he did certain things.")

The district court sustained the government's hearsay objection

"for now" and granted its motion to strike. The court offered to

reconsider its ruling if DeSimone's counsel could come back to the

matter "at a break" and show the court "why I'm wrong on that."

DeSimone's counsel never did so.

A week later, Corley again took the stand, this time as

a witness for the defense. The defense again sought unsuccessfully

to introduce his testimony about the phone call to Corrado. The

government once more objected. By then, the accountant, Corrado,

had testified, "I don't recall ever speaking to Attorney Corley" in

response to questions that included specific reference to the

occasion of the Williams settlement. The government took vigorous

exception to an anticipated defense argument that Corley's

testimony about Corrado should be admitted as a prior inconsistent

-13-
statement, i.e., inconsistent with Corrado's testimony that he

didn't recall speaking to Corley about the Williams settlement.

The court ruled that Corley's testimony was not inconsistent with

that of Corrado, because the accountant did not deny that the

conversation took place but simply did not recall it.

a. Admissibility of DeSimone's Request That Corley Call
Corrado

We first consider whether the court erred in refusing to

admit Corley's testimony regarding DeSimone's request to call

Corrado. We reserve until later our consideration of the

admissibility of Corley's evidence of Corrado's alleged response

during the call.

The government concedes that evidence of DeSimone's

request to Corley to make a call to Corrado in order to determine

whether payment of the Williams settlement could be made from the

escrow account would have been admissible as nonhearsay

circumstantial evidence of DeSimone's state of mind at the time,

see, e.g., United States v. Murphy, 193 F.3d 1, 5-6 (1st Cir. 1999)

(instructions were not hearsay but offered simply to show that they

were given), or else under the hearsay exception for DeSimone's

then-existing state of mind, Fed. R. Evid. 803(3).4 But the

4
It is unclear from the record whether Corley's initial
testimony that he was asked by DeSimone to make the call was
stricken by the judge. Initially, the court overruled the
government's objection to a question leading to Corley's following
answer: "I had a consultation with my client. He asked me to call
his attorney concerning the tax ramifications of this particular

-14-
government points out that DeSimone never told the district judge

at any time during the trial that those were grounds for admitting

Corley's testimony. This was so even though the court invited the

defense to revisit the matter and show it why its exclusionary

ruling was wrong, and even though, after the first exclusionary

ruling, the defense had a week to research possible legal bases for

admitting the evidence before that issue was again discussed during

Corley's renewed testimony. Because the trial court was never

advised of the above viable grounds for admission, the government

contends we may review the court's exclusionary ruling for at most

plain error.5 We agree.

At trial, DeSimone's counsel initially provided the judge

with no specific basis for overruling the government's hearsay

objection. Thereafter, defense counsel said the proffer went to

negotiated settlement." Subsequently, after further questions and
objections, and the sidebar conference, the court told the jury:
"I'm going to sustain the last objection, and I'm going to
entertain your motion to strike the witness's prior answer to the
last question, which dealt with a statement of Mr. DeSimone to the
witness, Mr. Corley, about calling an accountant, I believe.
You're to disregard that testimony . . . ." If all that was struck
was the answer, "to the last question," the prior testimony that
DeSimone asked Corley to call Corrado about the ramifications
remained before the jury. For present purposes, however, we shall
assume the entire line of inquiry and answers was meant to be
excluded.
5
Compare Johnston v. Zerbst, 304 U.S. 458, 464 (1938) (waiver)
with United States v. Olano, 507 U.S. 725, 733 (1993) (forfeiture)
(waived issue ordinarily cannot be resurrected on appeal whereas
forfeited issue may be reviewed for plain error, see United States
v. Rodriguez, 311 F.3d 445, 437 (1st Cir. 2002)).

-15-
the "receiver's" state of mind, and, a week later, argued that it

would show specifically Corley's state of mind and that the

settlement payment was a valid business deduction. That the

evidence would show not Corley's but DeSimone's state of mind is a

proposition that seems first to have been advanced after the

conclusion of the trial, when the court heard argument on

DeSimone's motion for bail pending appeal. The district court

correctly noted then that the ground had not been presented at

trial.6

As the district court was not advised during the trial

that Corley's testimony that DeSimone asked him to call Corrado

would be admissible on the theories now proposed, we reject the

claim of error based on them. See United States v. Piva, 870 F.2d

753, 759-60 (1st Cir. 1989) (defense counsel's failure "to tell the

trial judge why an apparently on-point exception to the hearsay

rule arguably did not apply" precluded defendant from raising the

argument on appeal); 1 Broun et al., McCormick on Evidence § 51

(6th ed. 2006). Without timely knowledge of the relevant

6
To be sure, as DeSimone notes, the district court did ask
counsel at DeSimone's post-conviction bail hearing whether it was
possible to infer that the true "receiver" of the conversation was
DeSimone, not Corley. The court thus played devil's advocate after
the trial by inquiring about this potential inference. But the
fact remains that at no time during the course of the trial did the
defendant state that the proper ground for admission was DeSimone's
own state of mind, nor did the court itself mention such a theory,
nor was evidence presented that Corley ever transmitted Corrado's
telephone remarks to DeSimone. Insofar as state of mind was
alluded to, it was Corley's that was mentioned.

-16-
evidentiary purpose, the trial court cannot be held accountable on

appeal for not applying the unreferenced grounds. Cf. United

States v. Whiting, 28 F.3d 1296, 1302 (1st Cir.) ("[E]xplaining the

purpose for which disputed evidence is offered is normally required

to preserve the issue on appeal . . . . A general reference to

'fighting fire with fire' is hardly much help to a district judge

trying to make on-the-spot rulings in the middle of a hectic

trial.") (citation omitted), cert. denied, 513 U.S. 956 (1994).

The failure of counsel to have informed the trial court

of the correct evidentiary theory under which evidence is sought to

be admitted is ordinarily a waiver of the right to argue that

theory on appeal. 1 McCormick on Evidence § 51. In exceptional

circumstances, such a failure might conceivably amount to a

forfeiture rather than a waiver, reviewable on appeal for plain

error. See Jack B. Weinstein & Margaret A. Berger, Weinstein's

Federal Evidence § 103.42 (2d ed. 1997). But here the exclusion of

Corley's testimony did not rise to the level of a "plain error,"

i.e., what may be described as a "blockbuster" exclusionary ruling

that was not only wrong but went to the fairness, integrity and

public reputation of the trial. United States v. Ortiz-Torres, 449

F.3d 61, 75 (1st Cir. 2006); United States v. Griffin, 818 F.2d 97,

100 (1st Cir.), cert. denied, 494 U.S. 844 (1987). While

DeSimone's request that Corley speak to Corrado on the matter

presented, had it been admitted, might have provided a further

-17-
talking point for the defense, it was not a matter of such

fundamental importance.

DeSimone overstates the purport of his counsel's proffer

and the persuasiveness of the argument he says he would have made

based thereon. The proffer said nothing about whether and what

Corrado was told of the source of the sums on deposit in Corley's

client account. While counsel initially said DeSimone wished him

to ask Corrado about the tax ramifications of the Williams

settlement, the heart of the inquiry, as it was portrayed, was not

taxes per se but whether Corley could write the Williams settlement

check directly from Corley's client's account, as would be most

convenient because the money was there and Corley was writing

checks, or whether the Williams check needed to be written from

DeSimone's personal checking account. DeSimone would have the jury

infer from this that Corley was investigating whether the art sale

proceeds were themselves business income,7 that he was obtaining

tax advice relevant to that question, and that this would help

convince the jury that DeSimone had acted in good faith more than

a year later when he signed the erroneous tax return

mischaracterizing the sale of the paintings as a capital gain. But

7
That the Williams check itself was a business-related expense
was an available argument on the record as it now stands, quite
apart from the purported Corley-Corrado conversation. Corley
testified the check settled a business dispute with Williams and
that it was written after he consulted Corrado about its tax
implications. Ferraro testified Corley wrote the check at
DeSimone's direction.

-18-
this argument, assuming arguendo it were supported by the thin

evidence in the proffer, seems as likely to imply bad faith as it

does good faith: the more DeSimone had personally looked into the

tax situation and learned the 1999 art transactions involved only

business income, the less credible his claim of innocent mistake

when he later signed the tax return showing a capital gain.

The excluded evidence lacked fundamental probative value

for other reasons. The alleged conversation between DeSimone and

Corley took place in August or September of 1999, and DeSimone made

the alleged misrepresentation to Corrado about holding the

paintings for more than a year and signed the fraudulent return

more than a year later in October 2000. Any link between

DeSimone's state of mind at the time he asked Corley to make the

call to Corrado and the time he committed the alleged crime was

tenuous. Cf. United States v. Cianci, 378 F.3d 71, 106 (1st Cir.

2004) ("To be admissible under this exception [Fed. R. Evid.

803(3)], a declaration, among other things, must 'mirror a state of

mind, which, in light of all the circumstances, including proximity

in time, is reasonably likely to have been the same condition

existing at the material time.'" (quoting United States v.

Colasanto, 100 F.3d 203, 212 (1st Cir. 1996)). Even had DeSimone

been thinking of reporting the profit as ordinary business income

in August or September 1999, further reflection could easily have

led him to a different cast of thought a year later as he meditated

-19-
upon the difference between the tax rates for ordinary income and

capital gains and the fact that his taxes were coming due.

Further, the offers of proof never linked DeSimone's inquiry to his

receipt of the monies from Joyce or suggested that his question was

somehow premised on the fact that the income was unrelated to the

expense.

We do not find plain error in the district court's

exclusion of DeSimone's alleged request for Corley to call Corrado.

b. Corrado's Replies to Corley

DeSimone also contends, separately, that the evidence of

Corrado's replies to Corley (in which Corrado supposedly said that

the defendant's income and the Williams settlement were a "wash")

was admissible (1) to show DeSimone's good faith reliance on his

accountant's advice and (2) as a prior inconsistent statement

impeaching Corrado's testimony. The first ground, however, depends

upon the exceptions for DeSimone's state of mind already discussed,

see supra, section a. That basis was not preserved at the trial

because it was never presented to the court. Nor was omission of

the testimony for that purpose plain error, again for reasons

already mentioned.

We add that insofar as Corrado's reference to a "wash"

was supposed to show DeSimone's good faith (by indicating the

seeking and receipt of correct advice from his accountant), the

argument suffers from a further weakness. To be used defensively

-20-
in a tax case, the advice of an accountant calls for a showing that

the information necessary to the accountant's advice was known to

the accountant before rendering the advice. Compare United States

v. Bishop, 291 F.3d 1100, 1106-08 (9th Cir. 2002), cert. denied,

537 U.S. 1176 (2003). But here there was no evidence in the

proffer or elsewhere in the record that DeSimone or Corley at this

time provided Corrado with information about the sources of the

client funds, viz. the sale of the paintings and who had owned

them, or about the nature and deductibility of the sum paid in

settlement of the unrelated Williams lawsuit. Nor was Corrado

asked at this time for advice as to how DeSimone's proceeds from

the sale of the paintings would be reportable, either as business

income, a capital gain or otherwise. We see little strength in the

good faith reliance argument as now described.

DeSimone's argument that the evidence was admissible as

a prior inconsistent statement to impeach Corrado's testimony

likewise fails. Corrado's testimony was that he did not recall

whether Corley had called him about the Williams payment. Such

testimony was not necessarily inconsistent with Corley's proffered

testimony about the conversation. See United States v.

Winchenbach, 197 F.3d 548, 558 (1st Cir. 1999) ("Rule 613(b) [of

the Federal Rules of Evidence] applies when two statements, one

made at trial and one made previously, are irreconcilably at

odds"). Although "[s]tatements need not be directly contradictory

-21-
in order to be deemed inconsistent within the purview of Rule

613(b)," Udemba v. Nicoli, 237 F.3d 8, 18 (1st Cir. 2001), the

decision whether an inconsistency exists "lies within the sound

discretion of the district court." Id.8 The district court did

not abuse its discretion here. Corrado never denied that the

conversation took place. Rather, he stated that he did not recall

it. His asserted inability to recollect it was not implausible

given the five-year lapse between the time the conversation

allegedly took place and Corrado's trial testimony. His purported

lack of recollection also finds some support in Corrado's telephone

call to DeSimone in October 2000, more than a year after the Corley

conversation, seeking to determine the source of the $1.1 million

in income.

DeSimone argues that Corrado's "wash" statement to Corley

was inconsistent with Corrado's testimony that DeSimone never told

him that he used the proceeds from the art sale to make the

Williams settlement payment. But as it was Corley, not DeSimone,

who spoke to Corrado, and as it was not indicated that Corley

informed Corrado about the source of the escrow account funds, the

8
The Second Circuit has noted that:

To be sure there may be circumstances where the witness
in good faith asserts that he cannot remember the
relevant events. In such circumstances, the trial court
may, in its discretion, exclude the prior
testimony . . . .

United States v. Insana, 423 F.2d 1165, 1170 (2d Cir. 1970).

-22-
proffer did not indicate that DeSimone told Corrado that the

proceeds from the art sale were being used to make the Williams

settlement. Corrado's purported reference to a "wash" was

therefore not inconsistent with DeSimone's not having told Corrado

about the use of the art sale proceeds.

DeSimone's additional argument that Corrado's alleged

conversation with Corley was inconsistent with the substance of

Corrado's testimony that DeSimone told him to treat the proceeds as

a capital gain also reads too much into the Corley offer of proof.

The proffer, even when interpreted in the light most favorable to

DeSimone, said nothing about the source of the business income

against which the deduction could be taken and was, therefore, not

at variance with Corrado's testimony that DeSimone told him that he

sold the paintings from his collection and had owned them for more

than a year. DeSimone argues that this interpretation of the

proffer is too literal because the only account with sufficient

funds was the business account, thus implying that DeSimone must

have believed in good faith that the profit from the paintings was

business income (and hence signed the return through oversight or

for some reason other than willfulness). But the record indicates

little more than that DeSimone wanted Corley to write a check to

Williams's attorney "because the money was there and Mr. Corley was

writing checks."

-23-
 In the circumstances, we find no breach of discretion in

the court's exclusion of Corrado's alleged response to Corley

during the Corley-Corrado conversation.

II. Admission of Grand Jury Testimony as Prior Consistent
Statement

DeSimone contends that the district court erred in

admitting Corrado's grand jury testimony given in August 2001 as a

prior consistent statement during his testimony at trial. DeSimone

insists that the testimony did not meet the foundational

requirements of Fed. R. Evid. 801(d)(1)(B) (evidence offered to

rebut an express or implied charge of recent fabrication or

improper influence or motive). DeSimone argued at trial, inter

alia, that Corrado had a motive to lie when he testified before the

grand jury in August 2001, as well as later, and that the claim of

fabrication was insufficiently "recent" to justify admission of the

prior consistent statement. We find no merit in any of these

arguments.

A major flaw with DeSimone's argument is that his own

counsel, during cross-examination, elicited from Corrado the

substance of the very same 2001 grand jury testimony that DeSimone

now claims was later improperly admitted as a prior consistent

statement.9 Thus even if the court were to have erred in allowing

9
The fact that Corrado had given this same testimony before the
grand jury in 2001 was also emphasized in DeSimone's jury
summation, infra. DeSimone highlighted the 2001 testimony because
it demonstrated, in DeSimone's view, the basis of the government's

-24-
the evidence as a prior consistent statement, we see no harm. But,

in fact, the court's evidentiary ruling was not a breach of its

discretion.

To start at the beginning: During cross-examination of

Corrado, defense counsel attempted to discredit Corrado's direct

testimony that DeSimone had told him during their October 2000

telephone conversation that he had sold three paintings that he had

owned for more than a year. To show that Corrado's testimony was

false, defense counsel pointed to Corrado's signing on April 29,

2003, of the affidavit in which he took personal responsibility for

making a "mistake and error" in preparing the tax return. Defense

counsel also elicited from Corrado that in 2001, before the federal

grand jury, he had testified along the same lines as he had just

done on direct.

Q: You testified under oath before a federal grand jury
in 2001; is that correct?

A: Correct.

Q: And at that time, is it accurate to say you testified
consistent with the testimony you've given today on
direct examination; is that correct?

[Government counsel]: Objection, your Honor. It's
overbroad.

Court: Overruled.

A: Correct.

hold over Corrado, enabling Agent Ferraro to use effective threats
to force Corrado to recant the affidavit he had later executed
taking responsibility for the incorrect tax return.

-25-
The jury was thus apprised, then and there, by the questioning of

the defense, that in 2001 Corrado had testified consistently with

the direct testimony they had just heard. As noted, this was the

very testimony DeSimone later objected to as inadmissible under the

prior consistent statement rubric.

The court's contested ruling followed vigorous cross-

examination of Corrado on the subject of Agent Ferraro's 2003 visit

to Corrado's office. The visit took place several months after

April 29, 2003, when Corrado had signed the affidavit taking

greater responsibility for the faulty tax return. Ferraro brought

along the affidavit and Corrado's prior grand jury testimony.

DeSimone's attorney elicited testimony that Ferraro warned Corrado

that "it was a federal crime to lie to a grand jury," and that "it

was a federal crime to lie to a federal agent in the course of his

conducting his duties." Corrado acknowledged that Ferraro was

"very assertive," "stern in his voice," and spoke with a raised

voice at times.

During the government's redirect examination, Corrado

testified, without any objection, that he told Ferraro during a

first interview in March 2001 that "the taxpayer informed me that

he had owned those paintings and had owned them for greater than

one year." But when the prosecutor subsequently returned to the

topic of Corrado's August 2001 grand jury testimony, defense

counsel objected to Corrado's being allowed to answer the

-26-
prosecutor's question about the substance of the 2001 testimony,

claiming that there was no allegation of a recent fabrication ("My

understanding, respectfully, Judge, of what a recent fabrication is

is when you are alleging that the witness [sic], I mean, recent, as

in very recent, we're talking about 2003. This is 2005."). The

court observed that defense counsel had "essentially alleged that

his [Corrado's] testimony in this trial was a fabrication."

Defense counsel countered: "Right. Respectfully, Judge, the

recent fabrication as it relates to this type of rehabilitation

with a prior consistent statement has a very specific meaning. And

the meaning is that I have to be alleging that the witness is

changing his testimony at the moment, I mean, as in inconsistent

with all of his prior statements."

The government argued in response that the prior

testimony rebutted a claim of "recent fabrication," and "improper

influence and motive," because defense counsel suggested that

Corrado changed his "story back after a visit from Robert Ferraro"

in 2003. The district court agreed.

Corrado then testified that he previously had testified

before the grand jury in 2001, under oath and under penalty of

perjury, that "the paintings were owned by Mr. DeSimone" and that

"he owned the paintings and owned them for a period of greater than

one year." Defense counsel returned to the topic during re-cross.

In response to questioning, Corrado testified that he had

-27-
previously testified twice to the grand jury that DeSimone owned

the paintings for more than one year, that he told the same facts

to a federal agent, and that lying to either is a federal crime.

As we have already indicated, any error in admitting

Corrado's 2001 grand jury testimony under Fed. R. Evid.

801(d)(1)(B) would be harmless given that defense counsel had

himself earlier brought out the substance of that testimony. But

even were that not so, the court's ruling was plainly proper. The

district court's decision to admit a prior consistent statement is

reviewed for abuse of discretion. United States v. Washington, 434

F.3d 7, 14 (1st Cir. 2006). Whether, in particular, the prior

statement rebuts a charge of recent fabrication or improper motive

or influence is reviewed for clear error. Piva, 870 F.2d at 758.

There was neither abuse of discretion nor clear error here.

A prior consistent statement is not hearsay if it is

"consistent with the declarant's testimony and is offered to rebut

an express or implied charge against the declarant of recent

fabrication or improper influence or motive." Fed. R. Evid.

801(d)(1)(B). In interpreting the rule, the Supreme Court has held

that "the prior consistent statement must have been made before the

alleged influence, or motive to fabricate, arose." Tome v. United

States, 513 U.S. 150, 158 (1995).

Corrado's grand jury testimony in August, 2001 predated

one of the main events defendant asserts constituted an influence

-28-
or motive to fabricate, namely, Ferraro's September 2003 interview

with Corrado at which he pressured Corrado to retract his affidavit

accepting blame for the erroneous tax return. During cross-

examination, defense counsel attempted to establish that the

version of events recounted in Corrado's affidavit (that the

erroneous tax return was the result of Corrado's error) was

correct, and that Corrado's different testimony in 2004 before the

grand jury and at trial had resulted from Agent Ferraro's "threats"

during the September 2003 interview. DeSimone's attorney

emphasized the stern warning Ferraro had given to Corrado of the

criminal penalties for lying to the grand jury and to federal

agents. Corrado said he felt so intimidated during the interview

that he offered the rationale that he had not read the affidavit

very carefully before signing it and that he was merely guilty of

a "failure to read." During summation, defense counsel later

discussed at length the issue of Corrado's rejection of the

contents of his affidavit. Counsel contended that Ferraro had read

Corrado the riot act. He asserted that Corrado's direct testimony

at trial was the result of his need to "preserve himself,"

especially given his earlier statements along the same lines in

2001.

Corrado did not have a comparable motive to lie in August

2001 when he first testified before the grand jury, doing so in a

manner consistent with his later grand jury and trial testimony.

-29-
Corrado testified that he was unaware of the nature of the

investigation when Ferraro first approached him in the months

before his 2001 grand jury appearance. There was no suggestion

that at that time Ferraro pressured him to implicate DeSimone or to

shape his testimony to a version of events.

DeSimone argues that Corrado acquired a different motive

to lie early on. This motive arose, DeSimone says, as soon as

Corrado learned the IRS agents were investigating the incorrect

return he had prepared, since the mistakes in the return would open

him to a malpractice suit. But it was not a clearly erroneous

factual finding for the court to conclude that the improper

influence particularly emphasized by the defense, i.e., Agent

Ferraro's threats made in September 2003, did not exist at the

earlier time. Piva, 870 F.2d at 758. The possible existence of an

earlier and different motive to lie would not prevent the admission

of a prior consistent statement designed to rebut a subsequent

different claim of fabrication. Nor do we see anything in the

lengths of time between 2001 and 2003 and 2004 that would call the

ruling into question.

We conclude, therefore, that the court's ruling of

admissibility under Fed. R. Evid. 801(d)(1)(B) was not clearly

erroneous. And as earlier noted, the fact defense counsel himself

elicited the same information makes the issue largely academic.

-30-
III. Admission of Summary Chart

DeSimone argues that the district court abused its

discretion in admitting into evidence a summary chart prepared by

Agent Ferraro itemizing DeSimone's receipt of payments and net

profits relative to the sale of the paintings. We find no abuse of

discretion.

a. Background

Agent Ferraro was the main government witness testifying

to DeSimone's 1999 tax obligations. Ferraro began his testimony by

describing his own qualifications and expertise, developed during

twenty-two years as a special agent with the Criminal Investigation

Division of the IRS and eleven years as a revenue officer and

revenue agent. He testified to having investigated DeSimone to

determine if his 1999 tax return, especially Schedules C and D, was

accurate. He said he had analyzed relevant documents in the case

and had observed the trial.

Ferraro testified to having prepared a worksheet - the

chart - to determine DeSimone's total net profit from the sale of

the paintings. Marked as government exhibit 74, the one-page

document had twenty-eight line-item entries comprising the total

deposits in Corley's client account, expenses, and disbursed net

profit. The prosecutor asked Ferraro whether the worksheet "fairly

and accurately summarize[d] your analysis of the transaction

regarding the sale of the Monet, the Matisse, and the Renoir," and

-31-
Ferraro responded that it did. The district court admitted the

document over defense objection, observing that "It's a summary.

Everything listed here has been admitted." Defense counsel argued

that he was not objecting on the ground that the underlying

documents were not in evidence, but that the exhibit was a

worksheet and not a summary. He conceded that "[i]f counsel wants

to call it something else, then it may be admissible." The court

overruled the objection. Defense counsel did not seek any

instruction limiting the jury's use of the document.

b. Discussion

We review the admission of an exhibit like the summary

chart for abuse of discretion. United States v. Sawyer, 85 F.3d

713, 740 (1st Cir. 1996). "It is hard to imagine an issue on which

a trial judge enjoys more discretion than as to whether summary

exhibits will be helpful." Fraser v. Major League Soccer, L.L.C.,

284 F.3d 47, 67 (1st Cir.), cert. denied, 537 U.S. 885 (2002).

The court here did not identify the particular rule under

which it admitted the summary chart. In its pre-trial submission,

the government had advocated the chart's admission under Fed. R.

Evid. 1006, a rule addressing the summary admission of materials

too voluminous to be introduced individually. In its appellate

brief, the government argues the chart was properly allowed

pursuant to Fed. R. Evid. 611(a), which authorizes the court to

"exercise reasonable control over the mode . . . of . . .

-32-
presenting the evidence so as to (1) make the . . . presentation

effective for the ascertainment of the truth, [and] (2) avoid

needless consumption of time." DeSimone contests both grounds for

admission. In a letter submitted pursuant to Fed. R. App. P.

28(j), the government now suggests the chart was properly admitted

pursuant to Fed. R. Evid. 703, which provides for the admission of

materials on which expert testimony relies.

Our court has recently considered the interrelationship

of the foregoing three rules in United States v. Milkiewicz, 470

F.3d 390, 395-400 (1st Cir. 2006). Much of what was said there is

relevant here and need not be repeated. The rules are not mutually

exclusive and often may be read together in a common sense manner.

Id. DeSimone insists that the chart did not summarize underlying

documents that had been made available to the opposing party and

was not accurate and non-prejudicial as required under Rule 1006;

that it did not fit within Rule 611(a); and that as Ferraro was not

qualified as an expert, the chart could not be introduced under

Rule 703. Without necessarily discounting the relevance of Rules

1006 and 611(a), we find Rule 703 dispositive in validating

admission of the chart here.

Rule 703 allows a court to provide the jury, in

appropriate circumstances, with the "facts or data" underlying an

expert's opinion, and such material may be presented in the form of

a summary chart. Milkiewicz, 470 F.3d at 398. Contrary to

-33-
DeSimone's contention, Ferraro was qualified to testify as an

expert. At the outset of his testimony, Ferraro testified to his

special knowledge and long-time experience in the taxation field.

In comparable instances, we have said that an "IRS agent is

qualified to express an opinion on the tax consequences of a

transaction." Id. at 401 (citing United States v. Mikutowicz, 365

F.3d 65, 72 (1st Cir. 2002) (an IRS agent presumably is qualified

to testify as an expert regarding the amount of an outstanding tax

liability)).

DeSimone has not suggested the district court erred when

it found, "[i]t's a summary. Everything listed here has been

admitted [in evidence]." When asked by the trial court whether

there was any item not admitted, defense counsel responded "No."

The chart listed complicated transactions from many sources to

summarize the government's calculations concerning taxable income,

an essential part of the government's case. The district court did

not abuse its discretion in admitting the summary chart as an aid

to Ferraro's expert testimony as an IRS agent. The listed

information was, as conceded by the defense, data already admitted

into evidence, hence no problem arose under the Rule's limitations

concerning "otherwise inadmissible" evidence. See also United

States v. Marchini, 797 F.2d 759, 765-66 (9th Cir. 1986) (district

court did not abuse its discretion in admitting summary chart of

IRS agent because agent was qualified as expert, calculations were

-34-
based upon evidence adduced at trial, and he was cross-examined),

cert. denied, 479 U.S. 1085 (1987).

We, therefore, uphold the district court's allowance of

the chart.

IV. Admission of Testimony about the Williams Settlement

We turn now to the district court's allowance of

Ferraro's testimony about the details underlying the settled

Williams lawsuit, including its claim of fraud. While initially

the district court warned it would not allow underlying evidence of

what the Williams lawsuit was all about, it qualified its ruling by

saying that if DeSimone opened the door, "you can bring it up."

Thereafter, after the defense had cross-examined Ferraro, the

government argued, and the court agreed, that the defense had

opened the door to questions about the details of the Williams

lawsuit by its prior questioning implying that the sum DeSimone

paid Williams to settle the lawsuit was a deductible business

expense. DeSimone now contends, to the contrary, that his prior

questioning of Ferraro did not open the door. We hold that the

district court's ruling on this matter was well within its

discretion.

a. Background

The genesis of this issue extends back to before the

trial, when the government told the court and DeSimone it intended

to introduce evidence of the transactions that had resulted in

-35-
Williams's and Morin's settled lawsuits against DeSimone. This

evidence was said to be material either because it related directly

to the charged tax offense or was admissible pursuant to Fed. R.

Evid. 404(b). The court responded that "these items come in on the

facts of what they are, but I don't want a lot of testimony about

the underlying, for example, the underlying conduct of the

defendant and as to Mr. Williams and what their dispute was all

about." The court qualified that ruling by noting that if DeSimone

"opens the door to certain things, then you can bring it up, either

on cross-examination or on rebuttal."

At trial, both Williams and Morin testified in person

about the settlements as witnesses for the government, but neither

described the details of their disputes with DeSimone, nor the

specific charges in their complaints.

After Ferraro took the stand, his chart, supra, showed as

income to DeSimone, without deduction, amounts later paid out of

Corley's client escrow account to settle the two claims against

DeSimone - the $658,000 payment to Williams and the payment to

Morin. During cross-examination, defense counsel challenged

Ferraro's characterization as taxable income of amounts equal to

the settlement payments, suggesting they could be deductible

expenses:

Q: Is it accurate to say that an individual who runs
their own business might have deductible expenses?

A: Yes.

-36-
 Q: And is it accurate to say that monies that they have
to pay to resolve disputes related to their business
expenses could be deductible as a business expense on
Schedule C?

A: I think I'd have to know a little bit more about the
type of - I would need more information to determine
that.

. . . .

Q: And is it accurate to say that there are litigation
expenses that can be deductible if the litigation is
connected to the business?

A: I believe there are some. I cannot be sure if every
type of litigation expense would be deductible.

. . . .

Q: And you'd need to know what the facts were; is that
correct?

A: Yes

Defense counsel then questioned Ferraro about the Morin payment

specifically, including whether the agent knew "whether or not that

lawsuit was business-related," trying to challenge Ferraro's

classification of the amount of the check as income rather than as

a deductible expense. He then asked Ferraro about the Williams

settlement payment:

Q: Let me direct your attention, if I could, to item 21
[on government exhibit 74]. This is income that you
attribute to Mr. DeSimone as well; is that correct?

A: That's correct.

Q: That's a $658,000 payment to settle a lawsuit; is
that correct? You heard the testimony of Mr. Williams,
didn't you?

A: Yes.

-37-
Defense counsel further established that the settlement check was

cut from Corley's escrow account.

During the redirect examination, the prosecutor attempted

to counter DeSimone's claim that those checks were proper business

deductions. Ferraro testified that he considered the Williams

settlement a personal expense that could not be deducted from

DeSimone's business income. The prosecutor then asked a series of

questions concerning Ferraro's analysis of the Williams payment

settlement. The court ruled, over DeSimone's objection, that

defense counsel had "opened the door to this."

In response to the prosecutor's questions, Ferraro

briefly described the facts underlying the Williams lawsuit.

Williams, he said, had made a loan to an attorney named Kevin

O'Coin, who then gave the funds to DeSimone to buy paintings.

Williams's loan was never repaid. Ferraro stated that the lawsuit

alleged fraud but that Williams's claim of fraud was merely an

allegation. On re-cross, the defense tried to elicit testimony

from Ferraro that the Williams settlement was, in fact, a

deductible business expense. Ferraro hesitated over whether a

settlement in a case alleging fraud could ever be deducted as a

business expense, noting that he would need more information in

order to determine that question. DeSimone did not request a

limiting instruction on the use of the evidence, and none was

given. No expert evidence was introduced by the defense, nor was

-38-
legal precedent called to the court's attention, to suggest that

Ferraro was incorrect that settlement of a case alleging fraud

might not be deductible as a business expense, or otherwise

supporting the claim of deductibility of the $658,000 Williams

settlement. See Redwood Empire Sav. & Loan Assoc. v. Comm'r of

Internal Revenue, 628 F.2d 516, 520 (9th Cir. 1980) (legal expenses

and settlement costs incurred in defending against a claim of fraud

that would injure or destroy a business have been held to be

ordinary and necessary business expenses).

b. Discussion

DeSimone argues that opening up the details of the

Williams case, especially the fraud claim, was highly prejudicial

and unjustified. He contends that the prosecutor mischaracterized

certain of the defense's prior questions to Ferraro.10 DeSimone

10
DeSimone puts heavy emphasis on the fact that during redirect
examination, shortly before the court ruled the defense had "opened
the door" to further questioning of Ferraro concerning the nature
of the Williams lawsuit, Ferraro mistakenly acknowledged
remembering having been asked by defense counsel whether he had
"investigated or assessed" whether the $658,000 check to Allen
Williams was a "business or personal expense." In fact, while
Ferraro had been asked whether monies paid to resolve business-
related disputes can be deductible, and whether the Morin
settlement was business-related, he was not asked specifically
whether the Williams settlement was also business-related; however,
the questioning indicated much the same point. According to
DeSimone, Ferraro's misstatement of the precise question amounted
to a fatal error not only by him but by the trial judge (in not sua
sponte intervening). However, DeSimone's counsel never called the
court's attention to the discrepancy when it occurred during
Ferraro's redirect testimony. As the questions earlier put to
Ferraro on cross-examination were very like the one mistakenly
attributed, it was hardly plain error for the court not to

-39-
denies asking Ferraro any questions concerning whether the Williams

settlement was properly deductible or anything about the tax

consequences of that payment. He says his counsel asked only

whether the Williams settlement was the result of a "lawsuit," a

fact already in evidence through Williams himself during the

government's case. He says he did not actually ask whether the

lawsuit was business-related, nor about the nature of the Williams

lawsuit or the content of its allegations.

However, DeSimone's counsel asked Ferraro several times

whether monies self-employed individuals had to pay to resolve

disputes or litigation relating to their businesses were

deductible. After Ferraro demurred as to whether every type of

litigation expense would be deductible, counsel asked if he'd "need

to know what the facts were, is that correct?" Counsel then

questioned Ferraro about the Morin settlement, asking "whether or

not that lawsuit was business-related." Finally, he asked whether

the $658,000 Williams payment was attributable to DeSimone. After

Ferraro acknowledged it was, he was asked if the Williams payment

was indeed "to settle a lawsuit." Defense counsel thus sought to

establish that - contrary to Ferraro's opinion - the $658,000

Williams settlement payment could be properly have been viewed by

DeSimone as a business expense that he could deduct in computing

his income tax. The government's questions on re-direct concerning

intervene sua sponte.

-40-
the details of the Williams lawsuit could logically be seen by the

court to follow from that line of inquiry in order to counter the

defendant's attempt to present the Williams settlement as a

legitimate business expense. Ferraro in his later testimony

expressed doubt as to the deductibility of fraud claims and earlier

had made clear his need to know all the facts before passing on

deductibility. Having entered the quagmire of the deductibility of

the Williams settlement, the defense could not insist that the

court leave undisturbed only a selective version of the facts. See

United States v. Balthazard, 360 F.3d 309, 317 (1st Cir. 2004)

(trial court did not act inappropriately by permitting government

to follow up on relevant issue defendant himself had raised).

At a later sidebar, the district court emphasized the

relevance of the government's questions, in response to the

defense's argument that the issue of the accounting of the

settlements was a "collateral" one. The court asked, "Why is it

collateral? It goes directly to your defense and to their

allegation, that is, they allege these funds were personal income

to the defendant. You allege that they are--you defend that they

are business expenses of the defendant." The court later said,

"This distinction, personal versus business, is part and parcel of

your defense. And it's part and parcel of the allegations so it

has to be part of your defense. You can't separate the word

'fraud' or the nature of the allegations of these underlying

-41-
lawsuits to make it totally antiseptic." We find the court's

assessment of the situation reasonable, so as to fall within its

broad discretion. The testimony was properly allowed.11

Affirmed.

11
The focus of DeSimone's claim on appeal is on the fact that
the court erred in allowing Ferraro to testify when the defendant
had not opened the door to the testimony. To the extent DeSimone
also argues on appeal that the admission of Ferraro's testimony
about the fraud allegation was error because it was inadmissible
hearsay, hence not discloseable pursuant to Fed. R. Evid. 703
(facts or data otherwise inadmissible shall not be disclosed to the
jury by proponent of expert testimony), DeSimone waived that issue
by failing to raise it during trial. When defense counsel objected
to Ferraro's testimony that the Williams lawsuit involved a fraud
allegation, it is apparent from the context of the transcript that
he was objecting on the grounds that he did not believe he had
"opened the door" to the subject in his cross-examination. As
already discussed, the court and parties had addressed the issue of
"opening the door" previously, and the court's response to the
defense's objection during Ferraro's redirect, "Overruled. You
opened the door to this. Go ahead," indicates the court's focus on
that issue when ruling on the objection. Counsel for DeSimone did
not then, nor later at the lunch break, when he expanded on the
reasons for his objection, invoke hearsay as a ground for his
objection. "If a party makes a general objection when a specific
objection is needed and the objection is overruled, the party is
precluded from asserting the proper objection on appeal. The time
to have focused attention on the true objection was in the trial
court, when there might have been a chance to cure the objection."
Weinstein's Federal Evidence, § 103.12[4].

-42-