England and Wales High Court (Administrative Court) Decisions

IN THE SUPREME COURT OF JUDICATURE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		04/02/2009

Lord Justice Maurice Kay :

1. The appellant is a citizen of the United States of America. He is the subject of an extradition request from that country relating to alleged failures on his part to comply with his obligations to the federal tax authorities. At the material times, he was a commercial airline pilot employed by American Airlines. The indictment against him contains four charges which relate, respectively, to the years 1998, 1999, 2000 and 2001. The allegation in relation to 1998 is one of failure to file a tax return in violation of Title 26, United States Code, section 7203, a misdemeanour carrying a maximum penalty of imprisonment for one year. The allegations in relation to 1999, 2000 and 2001 are of attempting to evade income tax which, by section 7201 of Title 26, is a felony carrying a maximum penalty of five years' imprisonment.
2. Following an extradition hearing on 15 August 2008, District Judge Anthony Evans sent the case to the Secretary of State pursuant to section 87(3) of the Extradition Act 2003. The appellant now appeals to this court pursuant to section 103 of the Act. Although, before the District Judge, a number of bars to extradition were advanced on behalf of the appellant, the present appeal is limited to a single issue, namely whether the alleged offences are "extradition offences" within the meaning of section 137. The relevant provisions of section 137 are as follows:

"(1) This section applies in relation to the conduct of a person if -

(a)he is accused in a category 2 territory of the commission of an offence constituted by the conduct …

(2) The conduct constitutes an extradition offence in relation to the category 2 territory if these conditions are satisfied –

(a) the conduct occurs in the category 2 territory;

(b) the conduct would constitute an offence under the law of the relevant part of the United Kingdom punishable with imprisonment or another form of detention for a term of 12 months or a greater punishment if it occurred in that part of the United Kingdom;

(c) the conduct is so punishable under the law of the category 2 territory (however it is described in that law)."

3. The United States of America is a category 2 territory and no issue arises as to the 12 months requirement. The sole question before us is whether "the conduct" would constitute an offence under the law of this country. The case for the US Government is that the conduct alleged against the appellant would constitute the common law offence of cheating the public revenue and/or the offence of fraudulent evasion of income tax under section 144 of the Finance Act 2000 in this jurisdiction. However, it is common ground that, whereas the offences in this jurisdiction require proof of dishonesty, the American offences do not. This is the foundation for Mr Watson's submission that the extradition request does not relate to extradition offences.
4. It is plain that the question that arises under section 137(2)(b) is not whether the American offence is on all fours with a comparable offence in this jurisdiction but whether the conduct alleged to give rise to the American offence would constitute an offence in this country. This was made clear in relation to the similar provision applicable to Part 1 cases in Cando Armas [2005] UKHL 67. The same analysis was applied to Part 2 cases in Norris v Government of the USA [2007] EWHC 71 (Admin). Mr Watson does not dispute the principle as I have described it, although he seeks to take issue with the language in which Auld LJ articulated it in Norris. Before dealing with that, it is necessary to set out the description of the conduct upon which the US Government relies in the present case.
5. In the original request, the American prosecutor stated:

"4. …[the appellant] did not file his federal income tax returns for tax years 1998-2001 in a timely fashion, nor did he pay his federal income taxes for those years – taxes which totalled more than $49,000.

5. While investigating this case, IRS agents discovered that between 1998 and 2001, Mauro made false representations on several IRS forms. Specifically, IRS agents discovered (a) that Mauro filed three applications for an extension of time within which to file his federal income tax returns, and falsely claimed on those forms that he did not owe any taxes for tax years 1998, 1999 and 2000; (b) Mauro twice provided American Airlines with an IRS form (IRS Form W-4) captioned, 'Employee's Withholding Allowance Certificate', and falsely claimed on those forms that he was exempt from withholding because he had no tax liability in 1999 and 2001; and (c) that Mauro signed an IRS form, captioned 'Notice of Election/Change of Election', and falsely claimed on that form that he was not a US citizen and had no 'effectively connected' gross income from within the United States.

6. In December 2003, IRS agents notified Mauro that he was the subject of a criminal investigation. Shortly thereafter, Mauro filed federal income tax returns for the tax years 1998-2000. On those returns, Mauro reported (1) that he had earned $179.768 in 1998, $182,141 in 1999 and $184,678, and (2) that he owed more than $100,000 in federal income taxes. To date, Mauro has not filed federal income tax returns for tax year 2001, nor has he paid his federal income taxes for tax years 1998-2001."

6. In the course of the present proceedings and in circumstances to which I shall return, the US Government provided further information in respect of the alleged conduct of the appellant. It was provided in a letter of 8 May 2008 in the following terms:

"Count 1 of the indictment charges [Robert Mauro] with Failure to File, in violation of Title USC 7203. The government is required to prove that Mr Mauro wilfully failed to file the tax return in question. According to at least one federal circuit court, this requires proof that the defendant acted voluntarily and with the deliberate intent to violate the law.

Counts 2 through 4 of the indictment charge Mr Mauro with Tax Evasion, in violation of 26 USC 7201. The government is required to prove a wilful attempt to defeat and evade payment. This requirement protects the average citizen from criminal prosecution for innocent mistakes in filing tax forms. In Cheek v US, 111 S. Ct. 604 (1991), the Supreme Court held that 'wilfulness' requires the voluntary, intentional violation of a known legal duty as a condition precedent to criminal liability.

Do we accept any of the assertions made by Mr Mauro? No.

Although the prosecutor does not need to prove that Mr Mauro engaged in 'dishonesty' in order to convict him of the offences with which he is charged, Mr Mauro did, as the extradition request reflects, engage in 'dishonesty' by making false representations on several IRS forms. Specifically, he (1) filed three applications for an extension of time within which to file his federal income tax returns, and falsely claimed on those forms that he did not owe any taxes for tax years 1998, 1999 and 2000; (2) twice provided American Airlines with an IRS form (IRS Form W-4) captioned 'Employee's Withholding Allowance Certificate' and falsely claimed on those forms that he was exempt from withholding because he had no tax liability in 1998 and 2000, and did not expect to have any tax liability in 1999 and 2001; and (3) signed an IRS form captioned, 'Notice of Election/Change of Election' and falsely claimed on that form that he was not a US citizen and had no 'effectively connected' gross income from within the United States."

7. On behalf of the US Government, Miss Davidson submits that (1) an allegation of dishonesty can be inferred from what was set out in the original request and that (2) in any event it is plain on the face of the letter of 8 May 2008. Mr Watson does not accept either of these submissions. Moreover, in his skeleton argument (but less obviously in his oral submissions), he contends that the letter of 8 May is inadmissible on this issue.

Norris v Government of the USA

8. Much of the hearing before us was taken up with a debate about a passage in the judgment of Auld LJ in Norris. He said (at paragraph 124):

"… it is immaterial whether dishonesty was a necessary constituent of the offence in the United States constituted by the conduct there, if the conduct alleged included acts or omissions capable of amounting to dishonesty here." (My emphasis).

9. Mr Watson takes issue with the words "capable of". He suggests that they dilute what is required and claims to derive support from the subsequent decision of the House of Lords in Norris [2008] UKHL. I am bound to say that I find this to be a somewhat sterile debate. It is the language of the statute that matters. The court has to be satisfied (to the criminal standard: section 206) that "the conduct would constitute an offence" under the law of England and Wales: section 137(2)(b). This does not mean that the requesting state must prove the guilt of the person in English law. That would be absurd and would be a higher test than the prima facie case which had to be established under earlier legislation. The words "would constitute an offence" simply mean "would, if proved, constitute" the English offence. I have no doubt that that is what Auld LJ meant. It is also what he actually said at an earlier stage of his lengthy judgment: paragraph 31. Because the appeal to the House of Lords was on a different point, none of this received direct consideration there but, to my mind, the position is clear.
10. The next question is as to the means whereby the court may be satisfied. In Zak v Regional Court of Bydgoszcz, Poland [2008] EWHC 470 (Admin), Richards LJ said (at paragraph 16):

"… I would reject the submission that the requesting authority has to identify or specify in terms the relevant mens rea of the English offence. In my view, it is sufficient if it can be inferred by the court from the conduct that is spelled out in the warrant and further information."

11. Zak was decided after the decision of the Divisional Court but before the decision of the House of Lords in Norris. I do not consider the words of Richards LJ to have been undermined by the House of Lords. Although Zak was a Part 1 case, the position regarding permissible inferences must be the same in a Part 2 case. I shall come back to the question of "the further information".

The conduct as described in the extradition request documents

12. I have set out in paragraph 5, above, the way in which the appellant's conduct was described in the extradition request. The question is whether, on the basis of that description, it is established that the conduct would, if proved, constitute one or other of the English offences and, in particular, whether the description of the conduct supports an inference of dishonesty. As it happens, the appellant has a colourful explanation for his omission to file returns and to pay taxes and for the representations that he made. For present purposes, however, that explanation is not a material consideration. In my judgment, an allegation of conduct that embraces (1) failure to file tax returns for four years whilst earning substantial sums of money, (2) failure to pay a substantial amount of tax, and (3) the making of a series of false representations to the IRS, including but not limited to a representation that he was not a US citizen, would, without more and if proved, support the inference that the appellant's conduct was dishonest.

The further information contained in the letter of 8 May 2008

13. I have set out the material parts of the further information in paragraph 6, above. That information was provided and was produced before the District Judge after the appellant's solicitors had invited the US Government to make a large number of formal admissions which, essentially, was supportive of his explanation for his conduct. The proposed formal admissions were contained in a document which also stated:

"It is anticipated that the US authorities may be able to assist the Court by responding to the proposed admissions."

14. The letter of 8 May 2008 was, in terms, a response to the proposed admissions. No doubt to the disappointment of the appellant, it concluded with the words:

"I do not accept any of the assertions made by Mr Mauro."

15. The questions that now arise are (1) whether the further information is admissible on the issue of "extradition offence" and, if so, and if I am wrong about the sufficiency of the description of the conduct in the original request, (2) whether the further information is sufficient to establish that the conduct would, if proven, amount to one or other of the English offences.

(1) Admissibility

16. In Part 1 cases, difficulties can arise when certain of the information which must be contained in the warrant is absent therefrom and exists only in another document. In Dabas v High Court of Justice, Madrid [2007] UKHL 6, Lord Bingham stated (at paragraph 50):

"… the judge must first be satisfied that the warrant which he is dealing with is a Part 1 warrant within the meaning of section 2(2). A warrant which does not contain the statements referred to in that subsection cannot be eked out by extraneous information. The requirements of section 2(2) are mandatory. If they are not met, the warrant is not a Part 1 warrant and the remaining provisions of that Part of the Act will not apply to it."

17. Mr Watson seeks to rely on a passage from the opinion of the Appellate Committee in Norris (at paragraph 91):

"… the conduct that should be applied consistently throughout the 2003 Act, the conduct relevant under Part 2 of the Act being that described in the documents constituting the request (the equivalent of the arrest warrant under Part 1), ignoring in both cases mere narrative background but taking account of such allegations as are relevant to the description of the corresponding United Kingdom offence."

18. However, Norris was not primarily concerned with the permissible ambit of the relevant documentation. It was already apparent from Dabas that, in a Part 1 case, the District Judge can request, receive and consider further information from the requesting state in order to determine whether the offence alleged in the warrant is an extradition offence: per Lord Hope (paragraph 49). So far as the United States is concerned, Article 10 of the Extradition Treaty between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the United States of America, dated 31 March 2003, provides:

"If the Requested State requires additional information to enable a decision to be taken on the request for extradition, the Requesting State shall respond to the request within such time as the Requested State requires."

19. In the present case, no request was made by reference to Article 10 but no request was necessary. The letter had come into the picture as a result of the request from the appellant's solicitors to the American authorities to respond to the proposed admissions. The letter is duly authenticated within the meaning of section 202 and is therefore admissible under section 202(3):

"A document issued in a category 2 territory may be received in evidence in proceedings under this Act if it is duly authenticated."

20. Moreover, when requiring the District Judge to decide in a Part 2 case whether the offence specified in the request is an extradition offence, section 78(4)(b) does not limit him to the information contained in the originating request. For all these reasons, I consider it to be clear that the letter of 8 May was and is admissible. The contrary conclusion would fly in the face of the changes in policy that were behind the 2003 Act, in relation to both Part 1 and Part 2 cases, the purpose of which was to simplify and demystify extradition by reducing its technicality.

(2) Content

21. The letter of 8 May 2008 added to the information set out in the original request material in two main respects. First, it clarified the mental element that has to be established in relation to the American offences – essentially a voluntary intention to violate a known legal duty, which is expressed in the term "wilfully" as opposed to "dishonestly". Mr Watson likens this to knowingly failing to submit an English tax return by the required date. Secondly, the letter stated in terms that, although the American offences do not require proof of dishonesty, the allegations are indeed ones of dishonesty, as evidenced by the false representations described as such in the original request. I have already said that, in my judgment, the reference to the false representations in the original request was sufficient to sustain an inference of dishonesty. However, even if I am wrong about that, there can be no doubt that the clarification contained in the letter of 8 May amounted to an unequivocal allegation of dishonest conduct in the form of the false representations. On any basis, this satisfies the statutory test of "extradition offence" in the circumstances of this case.

Conclusion

22. It follows from what I have said that, in my judgment, the District Judge was right to hold that the request relates to "extradition offences" within the meaning of section 137(2)(b). I would dismiss the appeal.

Mr Justice Wyn Williams:

23. I agree.