Former New York Knick and Atlanta Hawks center Randolph Morris failed to convince a federal judge to delete statements he made in a FaceTime conversation with two IRS special agents then that he was in China and that they were in the kitchen of his Kentucky home.
In a ruling from the U.S. District Court in Lexington, Ky., On Friday, Chief Justice Danny Reeves dismissed Morris’s request to suppress evidence gathered during the September 12, 2018 intercontinental conversation. The main reason: it was Morris’s idea to use FaceTime, and he was free to end the call.
Morris’s legal problems stem from allegations he did not pay taxes on income earned playing for the Beijing Ducks of the Chinese Basketball Association. According to an indictment, the former University of Kentucky star earned $ 13.3 million in salary and bonuses from the Ducks between 2010 and 2017. During that time, Morris was a teammate with Stephon Marbury and won the final MVP award. Morris, who played in the NBA between 2007 and 2010, bought a house in Lexington, Ky., In 2010 and established his residence there. Morris has pleaded not guilty and denies any wrongdoing.
Like other states, Kentucky taxes the income of its residents regardless of where that income is earned. The state, the indictment notes, “does not provide compensation or credit for foreign taxes paid by a resident of Kentucky in respect of that resident’s tax liability incurred as a result of his or her income in a country. foreigner”.
Morris faces 11 felony charges, three for wire fraud and eight for willfully misrepresenting tax returns. If found guilty on all counts, he faces a maximum prison sentence of over 80 years. However, Judge Reeves would not sentence a first offender to such a long sentence. More likely, the judge would execute the sentences simultaneously. Yet Morris could spend several years behind bars.
According to prosecutors, Morris prepared his own tax returns using H&R Block’s online tax preparation program. The use of this program, coupled with the (allegedly) non-reporting of foreign income, resulted in interstate wire fraud: the program’s server was in Kansas and Morris forwarded his returns to the Kentucky Department of Revenue. The fraud charges relate to Morris’ tax returns in 2015, 2016, and 2017. During that time, he reported $ 0 in foreign income while earning $ 6.7 million gambling in China. He should have paid $ 402,760 in Kentucky tax.
Robert Raiola, sports and entertainment group director at PKF O’Connor Davies, said Morris’s case serves as a warning to US players overseas. “Players should be careful not to assume that just because their foreign team pays taxes to another country relieves them of the burden of reporting that same income to their state and the United States.”
Morris’s troubles began, according to court documents, when special agents visited the player’s Kentucky home hoping to interview him, but no one answered the doorbell. They left a business card at the front door. Morris says officers also interviewed landscapers about his whereabouts.
After driving to a local restaurant, one of the agents called Morris’s cell phone and left a voicemail message. Morris called the agent back and explained that he was in a hotel in China for basketball reasons. Morris suggested that officers go home, where his wife, Andrea, would use her cell phone to call her on FaceTime.
When the officers returned, Andrea Morris was waiting on the porch. The three went into the kitchen where the officers were on one side of a counter while Andrea was on the other. An 80-minute interview was then carried out. It was around midnight in China.
About halfway through, Morris’s image froze and the sound continued to cut off. According to court documents filed on Morris’ behalf, he was unable to see officers due to continuing technical difficulties. The group then continued to use Talkatone, an audio application. Morris says the app was “sharp” as well.
Sportico got the interview memorandum from the FBI agents.
Morris explained to agents that the Ducks pay his taxes to China. Each year, Morris said, he signed two contracts with the Ducks. One showed a higher amount that included the tax amount paid by the team, while the other showed the lower amount after Chinese tax transferred to their bank account.
Morris admitted to being “aware of the fact that US citizens are required to report all income from all sources in the world.” Morris also thought that “he reports[ed] a correct figure for his Chinese income on his US tax returns. “
Morris was asked why, if he knew he had to report his Chinese income, he had not done so. According to the memo, Morris replied “that he did not know that income earned in China would have to be reported here because it would be double taxed.” Officers noted the inconsistency in Morris’s explanation since earlier “he said he knew US citizens had to report worldwide income from all sources.” Morris, the memo says, “then responded that he did not know that income received in China was his responsibility to report to the United States.”
The interview, as summarized by an IRS agent, provides important evidence for prosecutors: Morris (1) admitted he was aware of the need to report income from China and (2) a provided conflicting and conflicting answers as to why he did not do so.
Patrick Mullin and other Morris lawyers argue that officers violated his Fifth Amendment right against self-incrimination. They describe the interview as an “interrogation” and claim Morris was unable to see the officer’s credentials. The officers also failed to mention that they were carrying out a criminal investigation to the end.
Additionally, Morris did not receive a Miranda warning, which meant he had the right to remain silent, the right to consult a lawyer before questioning, and the right to have a lawyer appointed. Miranda’s warnings are required during interrogations in custody, unless the accused waives them.
Morris’s lawyers said their client was in custody because a reasonable person in the same situation would not have felt free to end the questioning.
“While Mr. Morris was working in China at the time,” Morris attorneys say, “it was nonetheless a frightening and worrying situation for him, as he was concerned with the conduct and communications of the agents with his wife and its landscapers. “
Additionally, although Morris invited the agents, the invitation came at the behest of the agents, who went so far as to visit his home to find him. Agents, Morris’s attorneys insist, also knew they were likely to get incriminating answers as they asked questions about his bank accounts, tax returns, knowledge of tax requirements and income. “The average citizen,” Morris attorneys point out, “doesn’t know that IRS special agents are part of the IRS criminal division.”
Finally, lawyers say Morris suffered from jet lag “after crossing 12 time zones less than a week before.” They also noted the late hour and that “the contact of the officers was totally unexpected and that the officers were alone in Mr. Morris’ secluded home with his wife while he was overseas.”
Justice Reeves rejected Morris’ arguments. He explained that “Morris was not in a detention environment but was in a hotel room thousands of miles from the officers he was talking to.” The judge also concluded that Morris was free to end the appeal. He further noted that “it was Morris’ idea to conduct the interview in this way” – the interview was therefore voluntary – and that “at no time did the officers block [Andrea Morris’s] way out of the room.
The judge added that the discussion was “cordial” and that, while Morris now claims to have suffered from jet lag, one of the officers “testified that Morris’s memory did not seem hazy and he gave answers. that answered questions that contained very specific details, such as names of people, dates and dollar amounts.
The case continues in litigation. No trial date has yet been set. Morris, 35, recently played for Sporting Al Riyadi Beirut of the Lebanese Basketball League.