Reaffirming the Breadth of § 371: United States v. Lingat and the Continued Vitality of the Klein Conspiracy Doctrine

1. Introduction

United States v. Lingat, No. 24-2328-cr (2d Cir. Jul. 8, 2025), is a Second Circuit summary order that nevertheless delivers a forceful affirmation of the so-called Klein conspiracy doctrine under 18 U.S.C. § 371. The case arose out of a tax-evasion scheme at Moishe’s Moving Systems, LLC, in which the company’s head bookkeeper, Joel Lingat, helped pay workers “off-the-books” through sham labor companies, thereby avoiding payroll taxes. After a jury conviction for conspiring to defraud the IRS, Lingat appealed on three fronts:

That modern Supreme Court “narrowing” decisions (e.g., Kelly, McDonnell, Fischer) implicitly restrict § 371 and render Klein conspiracies invalid for mere obstruction of IRS functions;
That admitting evidence predating the indictment period constructively amended the indictment and was unduly prejudicial under Fed. R. Evid. 403; and
That certain out-of-court statements were inadmissible under the co-conspirator exception in Fed. R. Evid. 801(d)(2)(E).

Judge Bianco, writing for a unanimous panel, rejected each argument and affirmed the conviction, thereby restating—in emphatic terms—the traditional, expansive reading of § 371’s “defraud clause.”

2. Summary of the Judgment

Scope of § 371: The court held that conspiracies “to impair, obstruct or defeat” IRS functions remain squarely within § 371, citing long-standing Second Circuit and Supreme Court precedent (Hammerschmidt, Haas, Klein). Modern cases narrowing other statutes do not undermine that doctrine.
Pre-2010 Evidence: Background evidence predating the charged period did not constructively amend the indictment. It was properly admitted to explain the origins and continuity of the tax-evasion scheme and survived Rule 403 balancing.
Co-Conspirator Statements: Statements by accountant Yaron Hister to operations manager Nissim Fadida about Lingat’s hidden payments were admissible under Rule 801(d)(2)(E). The district court correctly found, by a preponderance, both (i) membership in the conspiracy and (ii) that the statements furthered the scheme.
Result: Judgment of conviction and 24-month sentence affirmed.

3. Analysis

3.1 Precedents Cited and Their Influence

The court’s reasoning is steeped in a century of jurisprudence:

Hammerschmidt v. United States, 265 U.S. 182 (1924) – Defined “defraud” to include obstructing a lawful governmental function “by deceit, craft or trickery.”
Haas v. Henkel, 216 U.S. 462 (1910) – Recognized § 371’s breadth over “any conspiracy” impairing a government department’s lawful function.
United States v. Klein, 247 F.2d 908 (2d Cir. 1957) – Gave name to “Klein conspiracy,” applying § 371 to obstruction of IRS revenue collection.
United States v. Coplan, 703 F.3d 46 (2d Cir. 2012) and United States v. Atilla, 966 F.3d 118 (2d Cir. 2020) – Reaffirmed Klein’s vitality despite policy critiques.
Recent Supreme Court cases (Kelly, McDonnell, Cleveland, Fischer, Trump v. United States) – Cited by the appellant but found inapposite. In fact, Trump reiterates § 371’s broad language.

3.2 The Court’s Legal Reasoning

Binding Precedent Controls – Second-Circuit panels cannot depart from earlier circuit precedent absent an intervening Supreme Court decision directly on point. No such decision narrows § 371.
Separate Nature of Conspiracy – The panel stressed that conspiracy is an independent offense; Congress’s more specific tax-obstruction statute (§ 7212(a)) does not impliedly displace § 371 conspiracies.
No Constructive Amendment – Background evidence may exceed the indictment timeframe so long as the “core of criminality” (2010-2016 Klein conspiracy) remains intact and jury instructions anchor the temporal element.
Rule 403 Balancing – The pre-2010 evidence was probative of intent, knowledge, and modus operandi; any prejudice was limited because the conduct was the same as the charged conduct.
Rule 801(d)(2)(E) – The district court made specific findings: (a) Hister was part of the scheme (tasked with “cleaning up” the sham labor structure); (b) his statements kept co-conspirators informed, fostering cohesion. Under Second-Circuit standards, such statements further the conspiracy.

3.3 Potential Impact

Stability of the Klein Doctrine – Lingat provides a timely answer to practitioners arguing that Kelly and Fischer signal a retrenchment of broad fraud or obstruction theories. The Second Circuit declares openly that Klein remains undisturbed.
Charging Strategy – Prosecutors can continue to rely on § 371 alone, without pleading substantive tax offenses, when the gravamen is obstruction of IRS functions through deceit.
Evidentiary Latitude – The decision emphasizes that lengthy “historical background” of a conspiracy is admissible to show design and continuity, so long as it does not shift the “core of criminality.”
Co-Conspirator Statements – The court underscores a generous interpretation of the “in-furtherance” requirement, especially where statements update or reassure fellow conspirators.
Precedential vs. Persuasive Weight – Even though designated a “summary order,” Lingat’s comprehensive reasoning will likely be cited for its persuasive power, especially within the Second Circuit.

4. Complex Concepts Simplified

§ 371 Defraud Clause vs. Offense Clause – The “offense clause” targets conspiracies to commit a separate substantive federal crime; the “defraud clause” (at issue here) criminalizes agreements to obstruct lawful government functions by dishonest means—even if no separate offense is charged.
Klein Conspiracy – Shorthand for a § 371 defraud-clause conspiracy aimed specifically at impairing the IRS’s ability to assess or collect taxes.
Constructive Amendment – Occurs when trial proof or jury instructions alter an element of the charged offense, leaving uncertainty whether the jury convicted on a theory not presented to the grand jury.
Rule 403 Balancing – Courts may exclude evidence if its probative value is “substantially outweighed” by unfair prejudice, confusion, or waste of time.
Rule 801(d)(2)(E) Co-Conspirator Exception – A statement is non-hearsay if made by a conspirator during and in furtherance of the conspiracy. The judge, not the jury, decides admissibility by a “preponderance” of evidence.

5. Conclusion

United States v. Lingat reinforces the doctrinal bedrock that a conspiracy to obstruct the IRS—even without an underlying tax-evasion count—falls within the defraud clause of 18 U.S.C. § 371. The Second Circuit’s analysis dismisses recent defense arguments seeking to import the Supreme Court’s statutory-narrowing trend into § 371 jurisprudence. Additionally, the decision confirms generous evidentiary principles for background acts and co-conspirator statements, providing prosecutors and trial courts with a clear roadmap. While a summary order, Lingat is poised to shape federal tax-fraud prosecutions and conspiracy doctrine for the foreseeable future.