United States v. Patricia S. Caldwell

We consider whether conspiring to make the government’s job harder is, without more, a federal crime.

I

Patricia Caldwell was a bookkeeper for the Northwest Community Exchange. The Exchange was a “warehouse bank,” a device people use to keep their financial transactions secret. It used numbered accounts, promised to keep no records of clients’ transactions and vowed not to disclose information about the accounts to third parties. The Exchange’s ostensible goal was maintaining client privacy, but this privacy also helped the Exchange’s customers avoid paying taxes.

When you mess with the IRS, the IRS messes back. The government eventually shut down NCE and arrested several of its customers and employees, including Caldwell. Caldwell was convicted by a jury of conspiring to defraud the United States in violation of 18 U.S.C. § 371 , and she now appeals.

II

The “defraud clause” of 18 U.S.C. § 371 prohibits all conspiracies “to defraud the United States, or any agency thereof in any manner or for any purpose.” While this seems to cover only defrauding in the normal sense of the word — acquiring another’s property by intentional misrepresentations — the word “defraud” has been…