United States v. Velda Mapelli

Velda Mapelli was convicted of income tax evasion. She appeals on two grounds, arguing that the district court erroneously gave a deliberate ignorance instruction to the jury, and that the court erred in denying her motion to disqualify prosecutors who had been exposed to testimony she gave in another proceeding subject to a grant of use immunity. We agree with both contentions and reverse.

I. Procedural Background

Defendant Velda Mapelli and her husband Eugene Mapelli owned ninety percent of the stock of Mapelli Meat Company of Las Vegas, Ltd. during the tax years at issue. Mr. Mapelli served as president, and Mrs. Mapelli as secretary-treasurer. Their former son-in-law, John Beuchat, owned the remaining ten percent and served as vice president. An Internal Revenue Service investigation revealed that cash income was being skimmed from the corporation without being reported on the corporate records or tax returns.

In June 1988, a federal grand jury indicted the Mapellis and Beuchat for attempting to evade or defeat tax, in violation of 26 U.S.C. § 7201 . In October 1989, the Mapel-lis each pleaded guilty to one count of attempting to evade or defeat income tax. While awaiting…