A panel of the 9th U.S. Circuit Court of Appeals by a 2-1 vote overturned businessman Garth Kloehn’s 2005 conviction in federal court in Los Angeles on four counts of tax evasion.
The court majority said the trial was unfair because the denial of Kloehn’s request impaired his ability to prepare a defense.
Kloehn, the owner of a medical devices company, was accused of evading nearly $1.2 million in income taxes by moving money through offshore accounts.
During his trial, he learned that his son, a cancer patient, was near death in a Las Vegas hospital and was expected to die within days.
Kloehn asked for a two-day delay in the trial so that he could say goodbye to his son, but the trial judge, U.S. District Judge Dale Fischer, refused. Kloehn made the request near the end of several days of testifying in his own defense.
After completing his testimony and hearing part of the testimony of a prosecution rebuttal witness, Kloehn waived his right to be present at the trial and flew to Las Vegas, arriving at his son’s bedside one hour before he died.
The next day, while Kloehn was still absent, the jury found him guilty of the tax evasion charges. The judge did not explain to the jury why he was absent. Kloehn was later sentenced to three years and 10 months in prison.
Circuit Judge Stephen Reinhardt said in the majority opinion that the denial of a delay in the trial unfairly put “immense pressure” on Kloehn during his defense testimony.
Reinhardt wrote, “We find it self-evident that an individual’s demeanor would be affected by the knowledge that his son was on the brink of death.”
The court majority also said the jury could have been misled by Kloehn’s unexplained absence into believing he didn’t care about the outcome of the trial.
Circuit Judge Stephen Trott said in a dissent that he believed the conviction should stand because the judge’s error would not have affected the outcome. Trott said Kloehn would have been convicted in any case because the evidence showed he had engaged in a “transparent scam” to evade taxes.