In a tax fraud case, expert testimony that a pathological gambler's denial and distortions in thinking impair his ability to keep records is properly excluded when irrelevant and potentially confusing, inconsistent and misleading to the jury.

Judge William L. Scholl was a compulsive Las Vegas gambler. A cash player, Scholl deposited his winnings at the bank in amounts of less than $10,000 each to avoid Treasury reporting requirements. He also concealed or underreported gambling income on his tax returns, contrary to his accountant's advice.

Convicted in federal district court of filing false returns and structuring currency transactions, Scholl appealed to the Ninth Circuit. He argued that the district court should have allowed Dr. Robert Hunter, his psychological expert on compulsive gambling, to testify that 1) pathological gamblers have denial and distortions in thinking that impact their ability and emotional wherewithal to keep records; 2) compulsive gamblers do not want to engage in record keeping for fear of confronting the reality of losses; and 3) pathological gamblers are motivated not by money, but by the belief that the next "big win" will fix their lives. The lower court restricted Hunter's testimony to the 10 diagnostic criteria for pathological gambling listed in DSM-IV, finding the proffered evidence nonprobative and posing a substantial risk of prejudice.

The Ninth Circuit affirmed. At best, Hunter's opinion would have been that a compulsive gambling disorder makes one believe he has lost more money than he has won, not that it renders a person unable to remember what occurred or incapable of entering both winnings and losses on a Form 1040.

Prepared to testify that Scholl could have misevaluated his winnings and losses while believing he was telling the truth, the expert nevertheless acknowledged that the literature did not support this opinion. Neither did the literature-or Hunter-support the idea that pathological gamblers cannot truthfully report gambling income.