Case 1:16-cr RJL Document 111 Filed 09/21/18 Page 1 of 7 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

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1 Case 1:16-cr RJL Document 111 Filed 09/21/18 Page 1 of 7 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA : : Case No (RJL) v. : : PATRICIA DRISCOLL, : : Defendant. : GOVERNMENT S NOTICE OF EXPERT TESTIMONY The United States, by and through its attorney, the United States Attorney for the District of Columbia, hereby provides written notice of its intent to introduce expert testimony and provides the following pursuant to Federal Rule of Criminal Procedure 16(a)(1)(G). Additionally, pursuant to Federal Rules of Evidence 702, 703 and 704, the government intends to give notice regarding three expert witnesses two from the Internal Revenue Service, and one from the Federal Bureau of Investigation as more fully set forth below: INTRODUCTION Patricia Driscoll ( the defendant ), faces a seven-count indictment charging Wire Fraud (18 U.S.C. 1343); Mail Fraud (18 U.S.C. 1341); a D.C. Code charge of First Degree Fraud (22 D.C. Code 3221(a) and 3222(a)(1)); and two counts of Tax Evasion for tax years 2012 and 2013 (26 U.S.C. 7201). The indictment also contains a forfeiture allegation. BACKGROUND I. Background Information Relevant to Expert Dawn Goldberg Armed Forces Foundation ( AFF ) was a Section 501(c)(3) charity with the stated mission of helping military veterans. The defendant was its president / executive director for the years in question, that is from 2010 to July 15,

2 Case 1:16-cr RJL Document 111 Filed 09/21/18 Page 2 of 7 As a tax-exempt organization, AFF was required to file informational returns with the Internal Revenue Service ( IRS ) often referred to as IRS Forms 990. These forms consist of twelve pages of the initial form, and schedules labeled from A - R. According to the government s evidence, the defendant made material misrepresentations on the IRS Forms 2011, 2012, and 2013, including in the initial forms, the amended forms, and the attachments. Because the forms themselves are densely packed with information, and because materiality is a jury issue, the government intends to call Dawn Goldberg, IRS Exempt Organization Revenue Agent to discuss the purpose of the IRS Forms 990, the importance of truthfulness in reporting, and the type of information contained on the forms, with special attention to: Page 4 (Loan to/by officers and business transactions with officers); Page 6 (Process to Determine Compensation of Executive Director); Page 7 (Compensation of Officers); Schedule B (noncash donations) Schedule J (Executive Director s salary); Schedule L (related party transactions); and Schedule O Supplemental Information. Specifically, Revenue Agent Goldberg will be proffered as an expert in Exempt Organizations and the reporting requirements contained in IRS Form 990. The basis of Revenue Agent Goldberg s opinion is her years of experience in the Exempt Organization section and in general with the IRS conducting examination and audits. Revenue Agent Goldberg s Curriculum Vitae is attached. II. Background Information Relevant to Expert Jeffrey Ralston FBI The IRS Forms 990, Schedule J reported that the defendant was compensated by AFF, 2

3 Case 1:16-cr RJL Document 111 Filed 09/21/18 Page 3 of 7 including base compensation, bonus and incentive compensation, non-taxable benefits, as follows: $144, $194, $171,027 However, the defendant took more in compensation from AFF than merely her annual salary. Each year, the defendant took additional funds from AFF, and when questioned, she claimed that it was due to her as commissions for raising money for the charity, and proffered various versions of an AFF Human Resource manual, purportedly allowing 5% or 10% commissions. As a member of the FBI s Computer Analysis Response Team, Forensic Examiner Ralston analyzed media seized pursuant to court-authorized search warrants on both the premises of the AFF and an provider. Examiner Ralston will provide testimony about this examination process, as described in greater detail in his Examination Notes and Report of Examination, copies of which are being provided along with this Notice. Examiner Ralston will testify that one of the media seized from AFF premises that he examined was a Dell Optiplex 990 desktop computer, Service Tag: 1B83KQ1, which was labeled by the FBI upon seizure as Item 1B3, and which Examiner Ralston labeled and referred to as QWF3. Examiner Ralston will testify that when he examined QWF3, he determined that it contained a hard drive: one Seagate 320GB HDD, Model: ST AS, S/N: Z3TABNTN, which he labeled and referred to as QWF3_1. Examiner Ralston will testify that he connected the hard drive, QWF3_1, to an exam machine and used a program called FTK Imager to create an image of the data on the hard drive and then verified that this image matched the original. Examiner Ralston will explain this process in greater detail during his testimony, consistent with 3

4 Case 1:16-cr RJL Document 111 Filed 09/21/18 Page 4 of 7 the enclosed Examination Notes and Report of Examination. Examiner Ralston will explain that the documents labeled Government s Exhibits 18 and 67 (copies of which are enclosed with this Notice and which were previously provided to you in discovery) are printed copies of files he located and analyzed during his examination of the image of hard drive QWF3_1. Examiner Ralston will testify that he wrote on the first page of each of these files the MD5 hash value associated with that file. Examiner Ralston will explain that an MD5 hash value is a unique numerical identifier that can be assigned to a file, a group of files, or a portion of a file, based on a standard mathematical algorithm applied to the characteristics of the data set. The MD5 hash is sometimes referred to as the digital fingerprint of a file. Examiner Ralston will explain that if files have different MD5 hash values, then they are not the same file. For example, he will explain that the AFF Human Resources Manual that is labeled Exhibit 18/020-18/035 (which was attached as Office Policies 13 pager.docx to an sent by Tanya Finch s account to Patricia Driscoll s account on 7/16/2012 at 1947 hours UTC (Exhibit 18/019)), is a different file with a different MD5 hash value than the AFF Human Resources Manual that is labeled Exhibit 18/038-18/053 (which was attached as Office Policies 13 pager.pdf to an sent by Patricia Driscoll s account to Tanya Finch s account on 7/16/2012 at 2010 hours UTC (Exhibit 18/037)), even though the files both have the same name Office Policies 13 pager. Examiner Ralston will point out that there are actually differences between the files, such as the fact that the second manual makes reference to a Commissions policy (see Exhibit 18/050), whereas the corresponding page in the first manual does not (see Exhibit 18/034). Examiner Ralston will provide similar testimony about the other versions of the AFF HR manual contained within Exhibit 18. With respect to Exhibit 67, Examiner Ralston will explain that this exhibit contains print- 4

5 Case 1:16-cr RJL Document 111 Filed 09/21/18 Page 5 of 7 outs of the spreadsheet files that he determined to be attached to the s that are contained within the exhibit. Examiner Ralston will testify that he wrote on the first page of each of these files the MD5 hash value associated with that file. Later in the trial, FBI Special Agent Alexis Brown will testify that she used these spreadsheets in her commission s analysis, an updated copy of which was provided to the defense on September 4, 2018, as Bates Nos A summary witness, Special Agent Alexis Brown, will explain that she knows that these are the files she used as the starting point for her commissions analysis because the MD5 hash value is the same as the files that she used as the starting point for her analysis. Mr. Ralston bases his opinions on his years of experience working in the computer forensics field. The qualifications of Mr. Ralston are contained in his Curriculum Vitae, which is attached. III. Background Information Relevant to Expert Devora Gordy IRS The defendant failed to inform her personal accountant that she took more money from AFF than the amounts reported on the IRS Form W-2. The accountant was not aware of the commission payments or the money paying the defendant s personal expenses with AFF funds, as well as other income unrelated to the AFF. In addition to the income side, the defendant falsely claimed personal payments as business expenses reducing her income from her for-profit side business, Frontline Defense Systems. IRS Revenue Agent Devora Gordy has computed the outstanding tax due and owing for the prosecution years and those noticed in the government s Notice of Intent to Introduce Evidence pursuant to Fed. R. Evid. 404(b) [ECF # 103] by identifying unreported items of income, analyzing claimed business expenses, and calculating the correct amount of taxes the defendant should have reported and paid. Ms. Gordy will explain and summarize the Internal 5

6 Case 1:16-cr RJL Document 111 Filed 09/21/18 Page 6 of 7 Revenue Code as it relates to obligations of citizens to file federal Individual Income Tax Returns. The tax computations will be based upon, among other things, the evidence presented during trial, including summaries of the bank records, business records, and witness testimony, as well as stipulations and other records kept in the ordinary course of business by for-profit and non-profit entities. Ms. Gordy s conclusions of the tax due and owing from the defendant are outlined in her Income Tax Examination Changes, which has previously been provided to the defense. The qualifications of Ms. Gordy are contained in her Curriculum Vitae, which is attached. CONCLUSION The government respectfully provides notice of its intent to introduce expert testimony as proffered above. Respectfully submitted, JESSIE K. LIU United States Attorney By: /s/ Virginia Cheatham Assistant United States Attorney D.C. Bar No Fourth Street, N.W., Room 5836 Washington, DC Virginia.cheatham@usdoj.gov (202) KATHRYN L. RAKOCZY Assistant United States Attorney D.C. Bar No Fourth Street, N.W., Room 5239 Washington, DC Kathryn.Rakoczy@usdoj.gov (202)

7 Case 1:16-cr RJL Document 111 Filed 09/21/18 Page 7 of 7 CERTIFICATE OF SERVICE I hereby certify that on September 21, 2018, a copy of the foregoing Notice has been sent via electronic case filing to counsel for the defendant. /s/ Virginia Cheatham Assistant U.S. Attorney 7