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Wilson also drafted corporate documents for a new corporation, Symcor, Limited ("Symcor"), that would take over Victory's operations. Wilson testified that he drafted the corporate documents on December 3, 1986 and that two of Rogers 's employees, John Lockhart and Michael Stevenson, signed the documents as the shareholders, directors, and officers of Symcor on January 5, 1987 , before the January 30, 1987 meeting when Svecz told Rogers that he would begin attaching Victory's assets. Lockhart, however, testified that he and Stevenson signed backdated by-laws, board of directors minutes, and stock certificates around February 6, 1987 . Rogers testified that he told Wilson to use Lockhart and Stevenson on the Symcor documents so that the IRS would not discover his interest.

Wilson also testified that he prepared assignments on January 5, 1987 that transferred Victory's mining lease to Symcor. Paula Smith, a notary at Wilson 's law firm, testified that she notarized the assignments and watched the parties sign them on January 5, 1987 . However, the president of Robinson-Phillips Coal Company, which had originally leased its mining rights to Victory, testified that he signed the assignment document on February 9, 1987 and that he understood at the time he signed it that the document had been backdated to January 5, 1987 in order to avoid Victory's tax problems. On February 17, 1987 , Wilson told Svecz that Victory was trying to sell its mining lease, but he failed to disclose that Victory had already assigned its lease to Symcor. As a result, Svecz issued additional unsuccessful levies against Victory.

C.

The government also contends that Wilson drafted additional backdated documents for other corporations and placed "strawmen" in the positions of officers and directors pursuant to Rogers 's request in order to conceal Rogers 's ownership interests. First, Wilson undisputedly prepared the corporate documents for a new mining corporation, Pandex. The documents named Tony Frederick and Richard Johnson, two of Rogers 's employees, as the corporate officers. Frederick testified that in September or October 1987, Wilson told him how to funnel money out of Pandex to Rogers . Frederick testified that Wilson told him to write checks to Johnson, that Johnson would cash the checks, and that Johnson would then deliver the cash to Rogers . Frederick also testified that Wilson told him how to make it erroneously appear as if he had invested in Pandex.

In approximately November 1987, Rogers learned that Jasco Trucking Company ("Jasco"), another company that Rogers owned, had been used to pay some of Pandex's payroll and that Jasco there fore was liable for employment withholding taxes. Rogers became concerned that the IRS might assess his two sons, who were named on Jasco's corporate documents, for Jasco's tax liability. Rogers also wanted Johnson's name removed from Pandex's corporate documents because Johnson was also named on Jasco's corporate documents and he therefore was "tainted" by Jasco's tax liability. Frederick and Johnson testified that in October or November 1987, Wilson prepared, and had Frederick and Johnson sign, backdated Pandex board of directors minutes and stock certificates and had Johnson sign a backdated Pandex resignation. Rogers also testified that Wilson prepared backdated Jasco resignations for Rogers 's two sons to prevent the IRS from assessing them with Jasco's taxes. Rogers 's son also testified that he signed a backdated resignation.

In addition, Stevenson testified that Wilson prepared unidentified documents for him to sign in April 1988. Stevenson testified that Wilson told him that the documents would get the "alligators" off of Rogers and onto Stevenson. Stevenson explained that the term "alligators" referred to the IRS.

Rogers also owned and operated Meridan of Virginia ("Meridan"), a leasing company that held the equipment that Rogers used in his mining operations. Frederick 's name also appeared on Meridan's corporate documents. Frederick testified that in the spring of 1989, Wilson prepared, and had Frederick and others sign, backdated Meridan documents. Frederick testified that Wilson told him, " 'You're going to sign in and sign out, all at the same time, of these corporations.' "

D.

On June 8, 1995 , a federal grand jury returned an indictment against Wilson that charged him with one count of unlawfully and corruptly obstructing and impeding, and endeavoring to obstruct and impede, the administration of the tax laws, in violation of 26 U.S.C.A. §7212(a) ("Count one"), and one count of willfully attempting to evade and defeat, and aiding and abetting in the evasion of, the payment of income and penalty taxes, in violation of 26 U.S.C.A. §7201 and 18 U.S.C.A. §2 ("Count two"). The United States District Court for the Western District of Virginia held a jury trial on December 4-12, 1995. Wilson made a motion for a judgment of acquittal after the close of the government's case and again after the close of all of the evidence. On both occasions, the district court denied Wilson 's motion as to Count one and took the motion as to Count two under advisement.

On December 12, 1995 , the jury convicted Wilson on both counts. Wilson filed a renewed motion for a judgment of acquittal on insufficiency of the evidence and statute of limitations grounds. He also filed a motion for a new trial. On February 12, 1996 , the district court set aside the jury's verdict and granted Wilson 's renewed motion for a judgment of acquittal as to both counts of the indictment on the grounds of insufficiency of the evidence. The district court denied Wilson 's alternative motion for a judgment of acquittal on statute of limitations grounds and also denied Wilson 's motion for a new trial.

II.

The government argues that the district court erred in setting aside the jury's verdict and entering a judgment of acquittal. We review the district court's grant of a motion for a judgment of acquittal de novo. See United States v. Campbell , 977 F.2d 854, 856 (4th Cir. 1992). We must view the evidence in the light most favorable to the government and inquire whether any rational trier of fact could find the essential elements of the crime beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 319 (1979). We may not weigh the evidence or review the credibility of the witnesses. See United States v. Singh, 54 F.3d 1182, 1186 (4th Cir. 1995). Those functions are reserved for the jury, and "if the evidence supports different, reasonable interpretations, the jury decides which interpretation to believe." Id. (quoting United States v. Murphy, 35 F.3d 143, 148 (4th Cir. 1994)). We address, in turn, the sufficiency of the evidence as to each count of the indictment.

A.

In order to prove a violation of 26 U.S.C.A. §7212(a), the government must prove that the defendant: 1) corruptly; 2) endeavored; 3) to obstruct or impede the administration of the Internal Revenue Code. See United States v. Bostian [95-2 USTC ¶50,596], 59 F.3d 474, 477 (4th Cir. 1995), cert. denied, 116 S.Ct. 929 (1996); United States v. Williams [81-1 USTC ¶9268], 644 F.2d 696, 699 (8th Cir. 1981). Wilson contends that the government failed to prove the first element, namely, that he had a "corrupt" purpose. We have held that the term "corruptly," as used in the statute, forbids acts committed with the intent to secure an unlawful benefit either for oneself or for another. See Bostian [95-2 USTC ¶50,596], 59 F.3d at 479; United States v. Mitchell [93-1 USTC ¶50,171], 985 F.2d 1275, 1277-79 (4th Cir. 1993). The acts themselves need not be illegal. Even legal actions violate §7212(a) if the defendant commits them to secure an unlawful benefit for himself or others. See Bostian [95-2 USTC ¶50,596], 59 F.3d at 479.

The jury in the instant case heard ample evidence that Wilson acted with the intent to secure unlawful benefits for himself and for Rogers . We list only a few examples here. First, the jury could infer that Wilson acted with the intent to secure an unlawful benefit for Rogers when he prepared backdated notes to make the Windfall dividend payments to McKinney appear to be nontaxable loan payments. Both Rogers and McKinney testified that the payments were not loans. Rogers testified that he did not sign the two notes on the dates printed on the notes. McKinney testified that Wilson drafted the backdated notes only after they learned that the IRS had begun a criminal investigation of Rogers .

The jury also could infer from the evidence presented that Wilson acted with the intent to conceal Victory's assets in order to prevent the IRS from attaching them. IRS revenue officer Svecz testified that he told Wilson and Rogers on January 30, 1987 that he intended to enforce collection and to begin attaching Victory's assets. Rogers testified that he met with Wilson immediately after the meeting and that they discussed removing funds from Victory's bank accounts and secreting them in the Van Dyke account to prevent the IRS from attaching the money. Wilson 's intent to benefit both himself and Rogers was corroborated by the evidence that Van Dyke wrote a $4,000 personal check to Wilson from the Van Dyke account the day after he removed the funds from Victory's bank accounts.

The government also introduced substantial evidence that Wilson prepared corporate documents with the intent to conceal Rogers 's interest in Symcor in order to prevent the IRS from holding Rogers liable for Symcor's employment withholding taxes. Lockhart and Stevenson both testified that they went to Wilson 's office on February 6, 1987 and signed corporate documents as the Symcor shareholders, directors, and officers. Ample evidence existed for the jury to find that Wilson knew that Lockhart and Stevenson were "strawmen" and that Rogers really controlled Symcor. For example, Rogers testified as follows:

Q: Did you tell Doug Wilson, "My name cannot be on any paperwork at Symcor." That's the question.

. . . .

A: Well, I'm sure I did.

Q: And why did you tell Mr. Wilson that your name could not be on any paperwork for Symcor?

A: Well, I had the IRS tax problems. He knew that, too.

Ample testimony also existed for the jury to find that Wilson backdated the Symcor corporate documents to appear as though the parties incorporated Symcor before the January 30, 1987 meeting. Both Stevenson and Lockhart testified that they did not sign the papers on the dates printed on the documents. Moreover, Harsanyi testified that he understood that the mining lease assignment was backdated when he signed it because of Rogers 's tax problems.

Substantial evidence also existed for the jury to infer that Frederick and Johnson were merely strawmen to conceal Rogers 's interest in Pandex and that Wilson prepared Pandex's corporate documents with the intent to confer an unlawful benefit on Rogers . Frederick testified that Wilson knew that Rogers owned and controlled Pandex and that Frederick and Johnson were merely strawmen. Frederick further testified that Wilson told him how to evade the IRS. Specifically, Frederick testified as follows:

Q: What was said about capital investment?

A: I didn't have any money to start a corporation, and it had to appear as though I did.

Q: Who said it had to appear as though

A: [Financial Advisor Roy Debo] and [ Wilson ]. So, there fore, the term capital investment, I had to show some investment into the corporation to give the appearance that I did, in fact, own it.

Q: That's what you were told by Mr. Debo and Mr. Wilson?

A: Correct.

Q: What was your response to that?

A: "Where's the money going to come from?"

Q: Was there an answer?

A: Yes. The money would come from . . . the new corporation's general account. They'd give it to me, I would open a personal account at the same bank with the, where the general account was, write a check out of the personal account, and deposit it back into the regular account, and note on the check, "capital investment."

. . . .

Q: Now, who told you about that?

A: [Debo] and [Wilson].

Q: Now, you mentioned that also there was discussion about how Mr. Rogers was going to get his money out of the corporation?

A: Yes.

Q: What do you recall? Do you recall anything else about that discussion?

A: Not a lot other than it was going to be complicated, and I think--[Rogers's] wife was mentioned in the conversation, but I think generally in the outset that the money was going to, there would be a check written to Rick Johnson, and [Johnson] would cash a check and just take the money to [Rogers].

Thus, the jury clearly could infer from the testimony at trial that Wilson acted with the intent to secure unlawful benefits for himself and for Rogers by concealing Rogers 's business activities and sources of income from the IRS. Cf. United States v. Popkin [91-2 USTC ¶50,496], 943 F.2d 1535, 1540 (11th Cir. 1991) (holding that sufficient evidence supported an attorney's §7212(a) conviction where the evidence demonstrated that the attorney created a shell corporation to help his client conceal taxable income). Wilson 's testimony did refute most of the government's evidence, and his witnesses corroborated parts of his testimony. He also raised serious questions about the credibility of some of the government's witnesses and about conflicts between McKinney 's grand jury testimony and her trial testimony. However, "[w]here there are conflicts in the testimony, it is for the jury and not the appellate court to weigh the evidence and judge the credibility of the witnesses." United States v. Tresvant, 677 F.2d 1018, 1021 (4th Cir. 1982). We conclude that the government introduced sufficient evidence for a rational jury to find Wilson guilty beyond a reasonable doubt of violating §7212(a).

B.

In order to establish a violation of 26 U.S.C.A. §7201, the government must prove: 1) that the defendant acted willfully; 2) that the defendant committed an affirmative act that constituted an attempted evasion of tax payments; and 3) that a substantial tax deficiency existed. See United States v. Goodyear [81-1 USTC ¶9423], 649 F.2d 226, 227-28 (4th Cir. 1981). The jury may infer a "willful attempt" from "any conduct having the likely effect of misleading or concealing." Id. at 228. We have specifically held that a defendant violates §7201 if he makes false statements to the IRS for the purpose of concealing income. Id.

In the instant case, the government introduced substantial evidence that Wilson willfully committed affirmative acts that would likely mislead the IRS or conceal Rogers 's assets. Among other things, the government introduced evidence that Wilson: 1) prepared and executed false, backdated notes to make the Windfall dividend payments look like nontaxable income; 2) participated in a meeting where he discussed removing money from Victory's bank accounts in order to prevent the IRS from attaching the money; 3) told IRS revenue officer Svecz that Victory was trying to sell its mining rights when he knew that Symcor had taken over Victory's operations and that Victory had already transferred its mining rights to Symcor; 4) prepared numerous corporate documents for Symcor, Pandex, and Meridan that knowingly named "strawmen" as officers and directors; and 5) told Frederick how to funnel money from Pandex to Rogers and how to make it appear as though Frederick had invested in Pandex. The government also introduced sufficient evidence that a "substantial tax deficiency" existed. Rogers undisputedly owed over $400,000 in personal income taxes and over $700,000 in penalty taxes. Such amounts clearly constitute a substantial tax deficiency. See Goodyear [81-1 USTC ¶9423], 649 F.2d at 227-28 (holding tax deficiencies totaling less than $24,000 sufficient to uphold the defendants' §7201 convictions).

Thus, although Wilson 's testimony refuted the government's evidence, a rational jury could have found Wilson guilty beyond a reasonable doubt of violating §7201. We therefore reverse the district court's grant of Wilson 's motion for a judgment of acquittal as to both counts on insufficiency of the evidence grounds.

III.

Wilson also moved for a judgment of acquittal on the ground that the applicable statute of limitations barred the government's prosecution of both counts of the indictment. The district court denied Wilson 's motion on that ground and found that the government sufficiently proved that Wilson committed an unlawful act within the limitations period.

The government bears the burden of proving that it began its prosecution within the statute of limitations period. See United States v. Ferris [86-2 USTC ¶9844], 807 F.2d 269, 272 (1st Cir. 1986). The applicable statute of limitations for both counts of the indictment is six years. See 26 U.S.C.A. §6531(2),(6) (West 1989). The limitations period for a violation of §7201 begins to run on the date of the last affirmative act of tax evasion. See Ferris [86-2 USTC ¶9844], 807 F.2d at 271-72; United States v. Bartrug, 777 F.Supp. 1290, 1292 (E.D. Va. 1991), aff'd on other grounds, 976 F.2d 727 (4th Cir. 1992). The limitations period for a violation of §7212(a) similarly begins to run on the date of the last corrupt act. Cf. United States v. Workinger [96-2 USTC ¶50,402], 90 F.3d 1409, 1412-14 (9th Cir. 1996) (holding that the statute of limitations did not bar the defendant's §7212(a) prosecution where the defendant committed the last corrupt act within six years of the indictment). Thus, in the instant case, the government had to prove that Wilson committed an affirmative act in furtherance of the two charges in the indictment on or after April 1, 1989 . ²

The government introduced sufficient evidence at trial that Wilson committed an unlawful act within the limitations period. Rogers and McKinney testified that the two payments that Wilson made to McKinney in 1988 were for Rogers 's share of the Windfall dividends. Both also testified that neither payment was a loan. Rogers testified that he could not remember when he signed the two false notes. However, McKinney clearly testified that she, Rogers, and Wilson executed the false notes that Wilson prepared after October 24, 1989 when they first learned that the IRS was criminally investigating Rogers . As noted above, the jury could infer that Wilson 's action violated §7212(a) and §7201. Since the action occurred within the limitations period, the district court properly denied Wilson 's motion for a judgment of acquittal on statute of limitations grounds.

IV.

Wilson finally argues that the district court erred in denying his motion for a new trial. He argues that the district court should have granted a new trial on three grounds. We address each of his arguments in turn.

A.

Wilson first contends that the district court should have granted his motion for a new trial because the jury's verdict was against the weight of the evidence. We have held that a district court should exercise its discretion to grant a new trial "sparingly" and that the district court should grant a new trial based on the weight of the evidence "only when the evidence weighs heavily against the verdict." United States v. Arrington, 757 F.2d 1484, 1486 (4th Cir. 1985). We review the district court's denial of a motion for a new trial based on the weight of the evidence for abuse of discretion. Id.

The district court in the instant case did not abuse its discretion in denying Wilson 's motion for a new trial based on the weight of the evidence. As fully described above, abundant evidence supports the jury's verdict. Numerous witnesses testified regarding Wilson 's violations of §§7212(a) and 7201.

B.

Wilson also moved for a new trial on the ground that the district court's conduct throughout the trial unfairly and negatively influenced the jury. He contends that the district court's "persistent intervention" in the direct and cross-examination of witnesses prejudiced him and required the district court to grant a new trial. We review the district court's denial of a motion for a new trial based on partiality or bias for abuse of discretion. See United States v. Castner, 50 F.3d 1267, 1272 (4th Cir. 1995).

The district court must "conduct a jury trial 'in a general atmosphere of impartiality.' " Castner, 50 F.3d at 1272 (quoting United States v. Cassiagnol, 420 F.2d 868, 878 (4th Cir. 1970)). Moreover, "the court 'must not create "an appearance of partiality by continued intervention on the side of one of the parties or undermine[ ] the effective functioning of counsel through repeated interruption of the examination of witnesses." ' " Id. (alteration in original) (quoting United States v. Norris, 873 F.2d 1519, 1526 (D.C. Cir. 1989) (quoting United States v. Liddy, 509 F.2d 428, 439-39 (D.C. Cir. 1974) (en banc))). However, Federal Rule of Evidence 611(a) provides that the district court must exercise reasonable control over the presentation of evidence and the interrogation of witnesses in order to "ensure the effective determination of the truth, to avoid needless waste of time in the presentation of a case, and to circumvent undue witness intimidation and embarrassment." Id. Moreover, Federal Rule of Evidence 614(b) permits the court to interrogate witnesses directly. Id. Especially in a complex case that involves numerous witnesses, such as the instant one, the district court must ensure that the facts are properly developed and that the jury clearly understands their bearing on the questions at issue. Id.

Wilson points to many examples throughout the trial where the district court questioned witnesses. After reviewing the transcript, however, we conclude that the district court merely clarified witness testimony and did not impose its own view of the evidence on the jury. The court questioned defense and government witnesses, and the questions did not indicate partiality for either side. The record reveals that the district court "was simply fulfilling its obligation to clarify confused factual issues or misunderstandings, to correct inadequacies of examination or cross-examination, and to " 'otherwise insure that the trial proceed[ed] efficiently and fairly." ' " Castner, 50 F.3d at 1273 (alteration in original) (quoting United States v. Morrow, 925 F.2d 779, 781 (4th Cir. 1991) (quoting United States v. Cole, 491 F.2d 1276, 1278 (4th Cir. 1974)). Thus, the district court did not abuse its discretion in denying Wilson 's motion for a new trial based on partiality or bias.

C.

Wilson finally contends that the district court should have granted a new trial because it erroneously admitted irrelevant evidence at the trial. Prior to the trial, Wilson made a motion to strike several paragraphs of the indictment from the jury's consideration and to prevent the government from admitting evidence based on the allegations in those paragraphs. The paragraphs at issue relate to the §7212(a) charge and refer to: 1) false financial forms that Wilson prepared and transmitted to the IRS; 2) Wilson's participation in the discussion regarding the removal of funds from Victory's bank accounts; 3) the $4,000 check that Wilson gave to Charter Federal to prevent the foreclosure of Rogers's house and its repayment; 4) Wilson's backdating of Rogers's sons' resignations; 5) the corporate document that Stevenson signed to get the "alligators" off of Rogers and onto Stevenson; 6) the Pandex sublease; 7) the backdating of Meridan corporate documents; and 8) Wilson's delivery of fraudulent documents to the IRS. The district court denied Wilson 's motion. Although Wilson objected to the district court's denial of his motion to strike, he did not contemporaneously object to the evidence related to the disputed paragraphs of the indictment when the government offered it at trial.

Since Wilson failed to object at trial to the admission of the evidence, the government contends that we may review the district court's admission of the evidence only for plain error pursuant to Federal Rule of Evidence 103(d). ³ However, we have clearly held that motions in limine will "preserve issues that they raise without any need for renewed objections at trial, just so long as the movant has clearly identified the ruling sought and the trial court has ruled upon it." United States v. Williams, 81 F.3d 1321, 1325 (4th Cir. 1996). In the instant case, Wilson based his pretrial motion to strike on the precise issue he now seeks to raise, and the district court expressly denied the motion. Therefore, Wilson 's motion to strike adequately preserved the issue, and we review the district court's admission of the evidence for harmless error rather than for plain error. Thus, we inquire whether the district court erred in admitting the evidence and whether the error affected Wilson 's substantial rights. See United States v. Lamarr, 75 F.3d 964, 970 (4th Cir. 1996), cert. denied, 117 S.Ct. 358 (1996).

The district court's admission of the evidence was not error. Wilson contends that the evidence was irrelevant. However, the Federal Rules of Evidence define relevant evidence as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Fed. R. Evid. 401. As discussed throughout our opinion, the evidence that Wilson objects to was clearly relevant to the §7212(a) charge. The evidence made Wilson 's intent to secure an unlawful benefit for himself and Rogers more probable than it would have been without the evidence. Therefore, the district court did not err in admitting the evidence, and it consequently did not abuse its discretion in denying Wilson 's motion for a new trial on that ground. Thus, we conclude that the district court properly denied all three of Wilson 's asserted grounds for a new trial.

V.

Accordingly, we reverse the district court's grant of Wilson 's motion for a judgment of acquittal on insufficiency of the evidence grounds. We affirm the district court's denial of Wilson 's motion for an acquittal on statute of limitations grounds. We also affirm the district court's denial of Wilson 's motion for a new trial. We therefore reinstate the jury's verdict and remand the case to the district court for sentencing.

REVERSED IN PART, AFFIRMED IN PART, AND REMANDED.

¹ The deposit program required Victory to open a bank account in trust for the United States and to deposit employee withholdings into the account within two days of the withholding.

² The government filed the indictment against Wilson on June 12, 1995 . However, Wilson waived the statute of limitations for the period between April 1, 1995 and July 1, 1995 .

³ Rule 103(d) allows us to "tak[e] notice of plain errors affecting substantial rights although they were not brought to the attention of the court." Fed. R. Evid. 103(d).

 

 

 

[97-2 USTC ¶50,629] United States of America , Plaintiff-Appellee, Cross-Appellant v. Raymond A. Valenti, Defendant-Appellant, Cross-Appellee

(CA-7), U.S. Court of Appeals, 7th Circuit, 96-2517, 96-2726, 8/14/97, 121 F3d 327, 121 F3d 327. Affirming in part, reversing in part and remanding an unreported District Court decision

[Code Sec. 7201 ]

Penalties, criminal: Tax evasion: Failure to file return: Jury verdict: Sufficiency of evidence: Sentencing guidelines: Statute of limitations: Tax evasion: Due process.--A carpentry subcontractor who conducted most of his transactions in cash to keep his financial information hidden from the IRS was properly convicted and sentenced on charges of tax evasion and failure to file tax returns. The jury's determination that he committed an affirmative act constituting an evasion was reasonable since he paid his employees in cash and did not report their wages to the IRS. The trial court did not violate the subcontractor's right to due process when it considered gross income for closed tax years in computing his sentence because the statute of limitations does not limit what actions a court may consider as relevant conduct when sentencing a defendant.

[Code Sec. 7212 ]

Penalties, criminal: Obstruction of administration of tax laws: Jury verdict: Sufficiency of evidence.--A carpentry subcontractor who had threatened several witnesses who were called to testify at his trial was properly charged and convicted of obstructing the administration of tax laws. Although the subcontractor was not specifically charged with using threats of force in his indictment, the government properly used evidence of such threats to prove that he corruptly interfered with the administration of tax laws. The term "corruptly" can include threats of force and nothing within the relevant code provision prevented the use of such evidence. Moreover, regardless of whether the statements were threats, the jury reasonably concluded that the defendant acted corruptly because his statements were designed to convince witnesses not to testify at trial and were intended to unlawfully secure a benefit for himself.

Before: WOOD, JR., COFFEY and EASTERBROOK, Circuit Judges.

WOOD, JR., Circuit Judge:

Raymond Valenti, as he himself admits, was a good carpenter but a bad record-keeper. He kept no records of expenses, deductions or income from his carpentry business. He did not have a bank account and he dealt exclusively in cash. Beginning as early as 1970, Valenti also failed to pay his federal income taxes. After several years of assisting him in preparing late returns and negotiating settlements for unpaid taxes, the IRS lost its patience and went after Valenti with criminal charges. A jury convicted Valenti of most of the charges, and he now appeals those convictions and several aspects of his sentence. The government cross-appeals the district court's decision to vacate the jury's verdict and enter judgment of acquittal on one count.

I. Facts

Between 1988 and 1993, the tax years at issue in this case, Valenti worked as a carpentry subcontractor on the construction of new houses in the Rockford , Illinois area. Valenti made a point of structuring his finances so as to keep the IRS ignorant of much of his income. He used cash for everything from paying his employees to paying for expensive gambling vacations to Las Vegas . When he received checks as payment for a job, he cashed them at the banks on which they were drawn. Sometimes his friend Eugene Ray, a general contractor for whom Valenti worked, cashed checks for Valenti. Ray would also deposit Valenti's checks into his account and then withdraw the money in cash for Valenti.

Valenti's reason for not having a bank account and using only cash was not just an eccentric aversion to banks. The IRS was his reason, and he went to great lengths to keep his financial information from the IRS. In 1987, Valenti was cashing a check for $10,100.00 when he learned of the new federal requirement for filling out a Currency Transaction Report (CTR) for cash transactions exceeding ten thousand dollars. The next time Valenti was issued a check for more than ten thousand dollars, the company issuing the check at his request voided it and instead issued three separate checks, each for less than ten thousand dollars. Valenti cashed two checks one day and the third check the next day, thus avoiding filling out a CTR, which the IRS would have received. Valenti used similar methods to avoid the CTR in later transactions.

Naturally, Valenti paid his employees in cash. He also did not keep records of their pay or withhold income taxes from it. He did not send W-2 or 1099 forms to his employees or to the IRS. Valenti told one employee that because he was not withholding taxes, the effect was that the worker made three dollars more per hour. He also gave them additional compensation in the form of meals, paid for in cash. Valenti indicated to his employees that they should not worry about paying income taxes because their wages were not being "claimed." Consequently, most of them did not report the wages they received from Valenti, and several of them did not file tax returns while they worked for Valenti. Valenti felt no responsibility for any tax problems his employees might face as a consequence, however; Valenti stated at trial that they were obligated to pay their own taxes and should have filed their returns.

Valenti took in and handed out cash without keeping any records of where the money came from or where it was going. Every five to seven years, the IRS would locate him and initiate the process of collecting back taxes and levying on his home. With the help of accountants and attorneys, the IRS, being unusually patient, would help Valenti piece together his income and expenses. In 1979, the IRS recovered $31,772.56 in back taxes from Valenti in exchange for a release of a levy on his home.

Not only did Valenti structure his transactions to keep the IRS from discovering his income, but he bragged to others about not paying taxes. He would laugh and say he could always find a loophole to get around the IRS. This bravado did not mean he was entirely confident, however. After Valenti learned the IRS was investigating him for criminal tax evasion charges, he told employee James Childress that if Childress talked to the IRS, he (Childress) would disappear. When Kenneth DeVlieger, another of Valenti's employees and his son-in-law, received a summons to testify about Valenti before the IRS, Valenti told him that he could assert his Fifth Amendment privilege, because DeVleiger had not reported the income he received from Valenti. DeVlieger took this statement to be both advice and a warning; Valenti had told him in the past how a person had tried to turn Valenti in and had gotten into tax trouble while Valenti did not. Valenti told DeVlieger that after he testified, Valenti would be waiting for him outside the IRS office. Valenti also approached Ada Ricker, his ex-wife, from whom he had had a bitter divorce and whom he had not seen in years. He told her that he belonged to the Mafia. Valenti poked Ricker in the chest and warned her that if she talked to the IRS, she would be in trouble, too, because the investigation was going back to the years when they were married.

In spite of Valenti's attempts to scare potential witnesses, the government succeeded in indicting him for tax evasion. The superseding indictment charged Valenti with four counts of income tax evasion for tax years 1988 through 1991, six counts of failure to file income tax returns for tax years 1988 through 1993, one count of endeavoring to obstruct and impede the due administration of income tax laws, and one count of intimidation of a witness. The government dropped the intimidation of a witness count, and a jury convicted Valenti on the remaining eleven counts. Before sentencing, however, the district court vacated the jury's verdict on Count 11 (endeavoring to obstruct or impede the due administration of income tax laws) and entered a judgment of acquittal. The court, having found that Valenti attempted to perjure himself and obstruct justice, then sentenced Valenti to concurrent terms of 26 months' imprisonment on the tax evasion counts, followed by 3 years of supervised release, and concurrent terms of 12 months' imprisonment on the failure to file counts, followed by 1 year of supervised release for each count.

On appeal, Valenti claims the evidence was insufficient to convict him. He also appeals the court's use of his earlier relevant conduct in calculating his sentence and its refusal when calculating the total tax loss to credit his evidence estimating deductions and exemptions. The government appeals the district court's decision to vacate the jury's verdict and enter judgment of acquittal on Count 11. For the following reasons, we affirm the district court on the sufficiency of the evidence and sentencing issues, and reverse and remand for sentencing on Count 11.

II.

We begin with the government's cross-appeal. Count 11 specifically alleged that Valenti "corruptly endeavored to obstruct and impede the due administration of Title 26, United States Code, by causing and attempting to cause others not to talk to or cooperate with Internal Revenue Service employees in the tax-related investigations of defendant. . . ."

The statute on which Count 11 was based states:

(a) Corrupt or forcible interference.--Whoever corruptly or by force or threats of force (including any threatening letter or communication) endeavors to intimidate or impede any officer or employee of the United States acting in an official capacity under this title, or in any other way corruptly or by force or threats of force (including any threatening letter or communication) obstructs or impedes, or endeavors to obstruct or impede, the due administration of this title, shall, upon conviction thereof, be fined not more than $5,000, or imprisoned not more than 3 years, or both, except that if the offense is committed only by threats of force, the person convicted thereof shall be fined not more than $3,000, or imprisoned not more than 1 year, or both. The term "threats of force," as used in this subsection, means threats of bodily harm to the officer or employee of the United States or to a member of his family.

26 U.S.C. sec. 7212(a) (emphasis added). Count 11 charged Valenti only with "corruptly" obstructing or impeding, and not with obstructing or impeding "by force or threats of force," as the statute also allows. At trial, the government presented evidence of Valenti's conversations with Childress, DeVlieger and Ricker, in which he tried to dissuade them from cooperating with the IRS, to prove Valenti's guilt on Count 11. During deliberations, the jury sent the district court a question, which stated:

Would you please come and explain and clarify Title 26, Section 7212. We are unclear as to whether it means to include just the physical threats that Mr. Valenti was accused of or could also include other ways of impediment in Count 11.

After consulting with the attorneys, the district court, relying on United States v. Popkin [91-2 USTC ¶50,496], 943 F.2d 1535 (11th Cir. 1991), and United States v. Reeves [85-1 USTC ¶9190], 752 F.2d 995 (5th Cir. 1985), gave this response:

Corruptly as set forth in the statute is used for the purpose of forbidding those acts done with the intent to secure an unlawful benefit either for oneself or for another.

Not long after receiving this instruction, the jury returned verdicts of guilty on all eleven counts.

Valenti filed a Motion to Reconsider and to Dismiss Count 11, arguing that the response to the jury question during deliberations constituted a constructive judicial amendment of the indictment which prejudiced him because it amounted to more than a mere variance between the charge and the proof. The court granted this motion. It held that "corruptly" could not include within its definition "by force or threats of force," because those were other methods of committing the offense, set forth in the statute disjunctively. In the district court's view, the government did not prove what it alleged in the indictment because it focused its proof on Valenti's alleged threats, instead of on any "corrupt" actions.

We review the district court's construction of the relevant statute de novo. United States v. Montoya, 827 F.2d 143, 146-47 (7th Cir. 1987). However, we review a sufficiency of the evidence argument in the light most favorable to the government to determine whether "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Theodosopoulos, 48 F.3d 1438, 1449 (7th Cir. 1995) (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979)). "A jury conviction should be taken away 'only when the record contains no evidence, regardless of how it is weighed, from which the jury could find guilt beyond a reasonable doubt.' " Theodosopoulos, 48 F.3d at 1449 (quoting United States v. Rosalez-Cortez, 19 F.3d 1210, 1215 (7th Cir. 1994)).

After examining the indictment and the evidence presented to prove Count 11, we conclude that the district court, though not without some reasons, was nevertheless incorrect in holding that the evidence proved something different than what the indictment alleged. Count 11 charged that Valenti violated sec. 7212(a) by "causing and attempting to cause others not to talk to or cooperate with" the IRS, and that he did this "corruptly." The government conclusively proved that Valenti's actions were designed to cause his ex-employees and ex-wife not to talk to or cooperate with the IRS. There are no details in the indictment to which the proof did not conform. See United States v. Willoughby , 27 F.3d 263, 265-66 (7th Cir. 1994). The more difficult issues are whether Valenti attempted to cause the witnesses not to testify "corruptly" or with threats of force, and whether "corruptly" can include "threats of force" within its definition.

Valenti spoke to Childress, DeVlieger and Ricker all with the specific purpose of convincing them not to cooperate with the IRS. This attempt to silence witnesses clearly satisfies the definition of "corruptly." Valenti did it intending to secure an unlawful benefit for himself, that is, he attempted to silence them for no other reason than to obstruct the IRS investigation. He also used threats of force to accomplish this goal; for example, he told Childress that if Childress testified about Valenti, Childress would disappear, and he told Ricker that he was in the Mafia, implying that she might suffer retaliation if she testified. But Valenti also used more subtle methods to convince these witnesses not to testify. He insinuated that if they testified, they might also get into trouble with the IRS, but as he had no power directly to make them targets of an IRS investigation, these were empty "threats of force" at best. His conversations with DeVlieger did not involve direct threats of force, either. Knowing that DeVlieger had not reported the income he received from Valenti, he told DeVleiger to plead the Fifth and that he would be waiting outside after DeVlieger testified. But though Valenti had told DeVlieger in the past that another person who tried to turn him in had gotten into trouble, he did not repeat that story when he talked to DeVlieger about his summons, nor did he imply that he would harm DeVlieger if DeVlieger testified. He may have counted on DeVlieger's remembering the story, but his suggestion that DeVlieger take the Fifth was, on its face, just that--a suggestion which, if taken, would have benefited Valenti by keeping important information from the IRS. It was not a threat of force.

That Valenti tried to secure an unlawful benefit for himself partly through the use of threats does not diminish the fact that his actions were also corrupt within the definition given by the court. "Corruptly" refers to the mental state with which the actions are performed, see United States v. Hanson [94-1 USTC ¶50,075], 2 F.3d 942, 946-47 (9th Cir. 1993), and the wording of sec. 7212(a) certainly does not preclude the government from proving that mental state with evidence of threats, even if the government has not specifically charged the defendant with making threats in the indictment. The jury reasonably concluded that Valenti's acts were corrupt: his statements, whether threats or not, were designed to convince Childress, DeVlieger and Ricker not to testify, and so to unlawfully secure a benefit for himself. We find the evidence was clearly sufficient to sustain the jury's verdict of guilty on Count 11.

III.

A.

We turn now to Valenti's appeals. First, Valenti claims the evidence presented at trial was insufficient to support his convictions for tax evasion and failure to file tax returns. When evaluating a sufficiency of the evidence claim, we must determine "whether after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson, 443 U.S. at 319 (emphasis in original). Furthermore, "[o]nly when the record contains no evidence, regardless of how it is weighed, from which the [trier of fact] could find guilt beyond a reasonable doubt, may an appellate court overturn the verdict." United States v. Marren, 890 F.2d 924, 933 (7th Cir. 1989). Valenti argues that he has met this substantial burden on two fronts: the evidence did not prove that he acted willfully, nor did it prove he made an affirmative act constituting an evasion or attempted evasion of tax.

"Willfulness" is defined for the purposes of the crimes of tax evasion and the failure to file tax returns as "a voluntary, intentional violation of a known legal duty." Cheek v. United States [91-1 USTC ¶50,012], 498 U.S. 192, 201 (1991) (citing United States v. Bishop [73-1 USTC ¶9459], 412 U.S. 346 (1973) and United States v. Pomponio [76-2 USTC ¶9695], 429 U.S. 10 (1976)). To prove that Valenti acted willfully, the government had to prove that the law imposed a duty on him, that he knew of the duty, and that he voluntarily and intentionally violated that duty. Cheek [91-1 USTC ¶50,012], 498 U.S. at 201.

Valenti does not dispute that the law imposed a duty on him or that he knew of this duty. He had filed tax returns in the past and he had an accountant to assist him in preparing his taxes. Valenti also had many dealings with the IRS, which for many years attempted to collect Valenti's unpaid taxes without filing criminal charges. Valenti claims, however, that none of the evidence proved that he voluntarily and intentionally violated his duty to pay taxes. He claims that by coming every few years to settle his tax debt but never bringing him current on his taxes, the IRS actually misled him into thinking that he did not have to file his tax returns. He came to believe, he states, that this was the IRS' procedure for "people like him," and that he did not have to file his tax returns himself because in a few years the IRS would be back to "settle up." The jury rejected this argument, as do we. There is evidence directly contradicting Valenti's portrayal of himself as an unwitting innocent who naively trusted the IRS to take care of him. At the top of the list is certainly Valenti's habit of bragging to others about not paying taxes and always finding a loophole to get around the IRS. Furthermore, the evidence also revealed that Valenti did not open a bank account specifically because he did not want to pay taxes. He also deliberately structured his financial transactions to avoid filling out CTR forms, which would have alerted the IRS to unreported income. We hold there was clearly sufficient evidence of Valenti's willfulness.

Valenti next claims that the evidence was insufficient to prove he acted affirmatively in evading tax. A key part of proving tax evasion is demonstrating that the defendant committed an affirmative act constituting an evasion or an attempted evasion of tax. Sansone v. United States [65-1 USTC ¶9307], 380 U.S. 343, 351 (1965). The government must prove more than merely that the defendant willfully failed to file a tax return. Spies v. United States [43-1 USTC ¶9243], 317 U.S. 492, 499 (1943). However, any conduct that is likely to have a misleading or concealing effect can constitute an affirmative act. Id. An act, "even though a lawful activity inand-of-itself, can serve as an 'affirmative act' . . . if it is done with the intent to evade income tax." United States v. Jungles [90-1 USTC ¶50,289], 903 F.2d 468, 474 (7th Cir. 1990). Many such acts were proven here.

First, the government clearly established Valenti's penchant for using cash. He paid for everything in cash. As we have already stated, part of the reason he used cash all the time was that he did not have a bank account, and he didn't have a bank account because he wanted to conceal his financial condition. He directed his friend, Eugene Ray, to deposit Valenti's checks into Ray's bank account and then withdraw the money in cash and give it to Valenti. When done with the intent to evade, the extensive use of cash can be an affirmative act, even though the use of cash alone is far from being criminal. See id.; United States v. Holovachka [63-1 USTC ¶9291], 314 F.2d 345, 358 (7th Cir. 1963). Valenti's extensive use of cash was not innocuous; rather, it was an integral part of his plans to avoid paying taxes. The jury also could have considered Valenti's method of running his business to be an affirmative act. He refused to keep records of any kind, whether relating to his income, his expenses, or his employees. Valenti paid his employees in cash and deliberately did not report their wages to the IRS; he advised them that they also did not have to pay their income taxes. Because an affirmative act can be the "handling of one's affairs to avoid making records usual in transactions of the kind," Spies [43-1 USTC ¶9243], 317 U.S. at 499, and because that is what Valenti was doing, we hold the evidence was clearly sufficient to establish that Valenti committed an affirmative act constituting an evasion or attempted evasion of tax.

B.

Next, Valenti argues that the district court erred when it calculated the total tax loss for which Valenti was responsible, because it refused to give weight to Valenti's testimony that he was entitled to certain deductions and exemptions from income during tax years 1988 to 1993. We review a district court's factual findings under the Sentencing Guidelines for clear error, United States v. Jackson, 95 F.3d 500, 505 (7th Cir.), cert. denied,--U.S.--, 117 S. Ct. 404 (1996); United States v. Benitez, 92 F.3d 528, 536 (7th Cir. 1996), and we will not reverse unless, after reviewing the record, we are firmly convinced that the district court has made a mistake. See United States v. Carmack, 100 F.3d 1271, 1276 (7th Cir. 1996).

In cases involving tax evasion and failure to file tax returns, the sentencing court may use the government's evidence of the total tax loss to determine a defendant's base offense level. U.S.S.G. sec. 2T1.1(a)(1). For tax years 1988 through 1991, the years for which Valenti was convicted of tax evasion, the district court used the tax loss amounts that the government proved at trial. For tax years 1986, 1987, 1992 and 1993, however, the court used U.S.S.G. sec. 2T1.1(c)(2) to measure the tax loss at twenty percent of Valenti's gross income. The total tax loss came to $103,210, resulting in a base offense level of 14.

Valenti claims the court's use of sec. 2T1.1(c)(2) was in error; he argues this was not the most accurate way of determining total tax loss, and that instead, the court should have credited his testimony and exhibits which demonstrated certain business and personal deductions. He claims the government measured his annual gross income for the years 1988 through 1993 at over $600,000 without giving him any credit for legitimate business expenses such as the purchase of tools, scaffolding, gasoline, ladders, etc. Using the exhibits he presented demonstrating these expenses, he asserts, would have offered a more reasonable and credible way of estimating his gross income for those tax years.

The district court, however, rejected Valenti's testimony as speculative and incredible, and noted that by contrast, the government had tried to accurately measure his expenses. The court also noted that Valenti likely got off easy under the government's method because additional unreported income probably existed. Because the district court was in the best position to judge Valenti's credibility, and because a fact-finder's choice between two permissible options cannot be clearly erroneous, United States v. Yusuff, 96 F.3d 982, 989 (7th Cir. 1996), cert. denied,--U.S.--, 117 S. Ct. 999 (1997), we affirm the court's decision to use the Guideline method of determining tax loss instead of Valenti's method.

C.

Finally, Valenti claims that at sentencing, the district court violated his right to due process when it considered his gross income for tax years 1986 and 1987 as relevant conduct. Because those tax years fell outside the statute of limitations, the government could not prosecute him for his failure to pay those taxes, and Valenti claims the court should not have included that income when it computed his sentence. We review statutory interpretations of the Sentencing Guidelines de novo. Carmack, 100 F.3d at 1278-79; Jackson, 95 F.3d at 505.

It is well established that in determining a defendant's sentence a court may consider a broad range of information, including uncharged crimes, crimes where charges have been dismissed, and crimes for which the defendant has been acquitted. See United States v. Ritsema, 31 F.3d 559, 557 (7th Cir. 1994); United States v. Tucker, 20 F.3d 242, 245 (7th Cir. 1994); United States v. Smith, 5 F.3d 259, 262 (7th Cir. 1993); United States v. Smith, 953 F.2d 1060, 1066 (7th Cir. 1992); U.S.S.G. sec. 1B1.3(a)(2). The Application Notes to sec. 1B1.3 "illustrate that relevant conduct does not focus on acts for which the defendant is criminally accountable." United States v. Matthews, 116 F.3d 305, 307 (7th Cir. 1997), citing U.S.S.G. sec. 1B1.3, n.1.

This court has recently joined six other circuits in holding that the statute of limitations does not limit what actions a court may consider as relevant conduct when sentencing a defendant. Matthews, 116 F.3d at 307; see also United States v. Behr, 93 F.3d 764 (11th Cir. 1996); United States v. Silkowski, 32 F.3d 682, 687 (2d Cir. 1994); United States v. Pierce, 17 F.3d 146, 150 (6th Cir. 1994); United States v. Neighbors, 23 F.3d 306, 310-11 (10th Cir. 1994); United States v. Wishnefsky, 7 F.3d 254, 256-57 (D.C. Cir. 1993); United States v. Lokey, 945 F.2d 825, 840 (5th Cir. 1991). A criminal defendant is entitled to due process at sentencing; it is clear, however, that due process does not extend so far as to grant him full trial rights with regard to other crimes he has committed. United States v. Radix Lab., Inc., 963 F.2d 1034, 1039 (7th Cir. 1992). Due process at sentencing requires only that Valenti be given a fair sentencing hearing and that his sentence be based on fair and accurate information. Id. Valenti has contested neither the procedural fairness of the hearing nor the accuracy of the district court's determination of his gross income for tax years 1986 and 1987. The district court properly considered that income as relevant conduct when calculating Valenti's sentence.

IV.

In conclusion, we affirm Valenti's conviction and sentence for Counts 1 through 10 for his egregious tax conduct, but we reverse the district court's judgment of acquittal on Count 11. We therefore remand Count 11 for reinstatement of the jury's verdict of conviction and for sentencing.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

 

 

 

[97-2 USTC ¶50,890] United States of America , Plaintiff-Appellee v. Kenneth H. Winchell, Defendant-Appellant

(CA-10), U.S. Court of Appeals, 10th Circuit, 96-1513, 11/3/97 , Affirming an unreported District Court decision

[Code Sec. 7206 ]

Penalties, criminal: Willfully filing false tax forms: Jury instructions: False forms.--An individual was properly convicted of willfully filing false income tax forms. The trial court correctly instructed the jury on the definition of willfulness and was not required to provide a separate instruction on specific intent. Further, the individual issued false Forms 1099 to several IRS employees with respect to amounts that he knew he had never paid in an effort to punish them for collecting his outstanding tax liabilities. Thus, it was reasonable for a jury to conclude that he voluntarily and intentionally violated the law. In addition, the false statements were material since the IRS was forced to implement special procedures to intercept the counterfeit filings.
[Code Sec. 7212 ]

Penalties, criminal: Obstructing administration of tax laws: False return: Harassment of IRS employees: Draining IRS resources.--The government presented sufficient evidence to support an individual's conviction on charges of corruptly obstructing and impeding the administration of the tax laws. The individual filed a false return, mailed false bills and IRS forms to IRS employees, and sent accusatory and threatening letters to IRS employees. Two employees who received his false mailings testified that they felt threatened and harassed, and the IRS established that it expended limited resources in dealing with the mailings.

Meghan S. Skelton, Robert E. Lindsay, Alan Hechtkopf, Department of Justice, Washington, D.C. 20530, for plaintiff-appellee. Michael G. Katz, Federal Public Defender, Charles S. Szekely, Assistant Federal Public Defender, 1099 18th St., Denver, Colo., for defendant-appellant.

Before: ANDERSON, HENRY, and BRISCOE, Circuit Judges.

ANDERSON, Circuit Judge:

Kenneth Harlan Winchell appeals his jury conviction on six counts of willfully filing false income tax forms in violation of 26 U.S.C. §7206(1), and on one count of corruptly obstructing and impeding the administration of the internal revenue laws in violation of 26 U.S.C. §7212(a). He contends that the district court erred in refusing to instruct the jury regarding specific intent under §7206(1), and, alternatively, that the evidence was insufficient to support his conviction on the six counts related to that section. Additionally, he contends that the evidence was insufficient to establish that he acted corruptly within the meaning of §7212(a). We affirm.

I. BACKGROUND

The relevant facts are undisputed. In 1983 the Internal Revenue Service ("IRS") obtained a judgment against Winchell for unpaid taxes for the year 1975. Subsequently, the IRS attempted to collect the judgment by garnishing Winchell's Marine Corps and social security retirement payments and by filing liens against property he owned in Park County , Colorado . However, through a clerical error, the IRS released its lien against the Park County property. ¹

After the IRS obtained its judgment and attempted collection, Winchell wrote numerous letters to the IRS in which he disputed its jurisdiction and its legal standing, and in which he stated that he was not a person subject to taxes. R. Vol. VI at 185, 226-27, 232-33. Except for the 1989 return at issue in this case, Winchell filed no tax returns after 1977. ² Id. at 185. Finally, in 1990 Winchell sent "Notice of Bills Due" to IRS and governmental employees involved in his case and also to various individuals who had been involved in the foreclosure of his Park County property. These notices charged that the recipients owed Winchell substantial sums of money, and warned that failure to "pay or otherwise satisfy this bill . . . may result in loss of your property or garnishment, etc., of your wages/salary . . . to satisfy this lien." ³ See, e.g., R. Vol. VI at 186. Winchell also sent numerous false Forms 1099 ("1099s") to those individuals. Winchell then filed the original 1099s along with the accompanying Forms 1096 (1096s) with the IRS. The 1096s reported payments of several billion dollars on almost two hundred 1099s. Appellant's Br. at 5-6. In fact, Winchell had never paid those sums.

Winchell also filed an income tax return for 1989 in which he stated that he earned over $7.5 billion and had paid $7.5 billion in withholding taxes. Thus, he indicated a refund due of almost $5.5 billion. Id. at 6. Again, Winchell had neither earned nor paid in the stated sums. Furthermore, in addition to sending a false 1099, Winchell sent one of the IRS employees involved in his case a letter stating that he "was going to rearrange [the employee's] face," R. Vol. VI at 186, and he sent another a letter which stated, "I strongly suggest you very seriously contemplate in your mind before you proceed one step further in your unlawful action against me. . . . I am coming after you, Linda, and the other IRS scumbags who have been stealing my money. . . . This is known as treason and you all will pay the price." ⁴ Id. at 227-28.

Generally, the individuals who received the false 1099s contacted the IRS or other appropriate authorities. R. Vol. V at 35, 52, 70, 80, 93, 107; R. Vol. VI at 162-63, 187-88, 221. Consequently, the IRS assigned five agents and three tax examiners to manually locate any false forms which Winchell might have submitted to the IRS to assure that the recipients would not be sent the standard discrepancy inquiry. R. Vol. V at 11-12, 36. The search took about one week to complete. Id. at 12. The IRS neither issued any refund nor audited any individuals as a result of Winchell's filings.

II. DISCUSSION

A. SPECIFIC INTENT UNDER 26 U.S.C. §7206(1)--JURY INSTRUCTION

The district court's instructions set forth the four elements which the government was required to prove in order to establish a violation of 26 U.S.C. §7206(1):

One: The defendant made and subscribed a return;

Two: The return contained a written declaration that it was being signed subject to the penalties of perjury;

Three: The defendant did not believe the return to be true and correct as to every material matter detailed in the indictment; and

Four: In filing the false tax return, the defendant acted willfully. ⁵

R. Vol. I, Tab 8, Instruction No. 21. Additionally, the court further instructed the jury that "[t]o act 'willfully' means to voluntarily and intentionally violate a known legal duty," and that "[n]egligent conduct is not sufficient to constitute willfulness." Id. , Instruction No. 22.

Although Winchell ultimately accepted the above two instructions, R. Vol. VI at 289-90, he argued that he was also entitled to a separate instruction on "specific intent." Id. at 300-05. On appeal Winchell contends that the district court erred in refusing to instruct the jury that the government must prove that he possessed the "specific intent" to violate 26 U.S.C. §7206(1). ⁶

We review de novo a timely challenge to a jury instruction to determine whether, considering the instructions as a whole, the jury was misled. United States v. Smith, 13 F.3d 1421, 1424 (10th Cir. 1994). If, as a whole, the instructions correctly state the law and provide the jury with an "intelligent, meaningful understanding of the applicable issues and standards," we will not reverse. United States v. Laughlin, 26 F.3d 1523, 1528 (10th Cir. 1994). In other words, reversal is not appropriate unless we have "substantial doubt that the jury was fairly guided." United States v. Mullins, 4 F.3d 898, 900 (10th Cir. 1993).

In the context of criminal violations of federal tax statutes, the Supreme Court has recognized the "pervasive intent of Congress to construct penalties that separate the purposeful tax violator from the well meaning, but easily confused, mass of taxpayers." United States v. Bishop [73-1 USTC ¶9459], 412 U.S. 346, 360 (1973). Thus, as applied in the Internal Revenue Code, the Supreme Court has "consistent[ly] interpret[ed] the word 'willfully' to require an element of mens rea." Id. Defining that mens rea, the Supreme Court has explained, for purposes of establishing violations of tax laws, its cases "conclusively establish that the standard for the statutory willfulness requirement is the 'voluntary, intentional violation of a known legal duty.' " ⁷ Cheek v. United States [91-1 USTC ¶50,012], 498 U.S. 192, 201 (1991) (quoting Bishop [73-1 USTC ¶9459], 412 U.S. at 361, and United States v. Pomponio [76-2 USTC ¶9695], 429 U.S. 10, 12 (1976) (per curiam)).

Accordingly, Winchell is correct insofar as he asserts that §7206(1) establishes a "specific intent" crime. See United States v. Erickson [82-1 USTC ¶9175], 676 F.2d 408, 410 n.4 (10th Cir. 1982) (listing §7206, among other Internal Revenue Code sections, and stating that "[a]ll of these statutory provisions are specific intent crimes, i.e., willfulness is an element of each"). However, as we have previously noted, "instructing in terms of 'specific intent' has been disfavored by the courts because of the confusing and ambiguous nature of such an instruction." Laughlin, 26 F.3d at 1527 (citing Liparota v. United States, 471 U.S. 419, 433 n.16 (1985)). ⁸ Instead, we have endorsed instructions which adequately "apprise the jury of the mens rea element of the offense," id. at 1527, and which "define each element of the offense clearly and accurately." Id. at 1528. In this case, the word "willfully" describes the requisite mens rea. Accordingly, the court adequately instructed the jury when it defined "willfully" using the conclusively established standard, and we find no error in its refusal to give a separate specific intent instruction.

B. SUFFICIENCY OF THE EVIDENCE

Winchell further contends that, as to all counts, the evidence was insufficient to support his conviction. Whether the evidence is sufficient to support a conviction is a question of law which we review de novo. United States v. Dashney, 117 F.3d 1197, 1202 (10th Cir. 1997). Viewing the record in the light most favorable to the government, we must determine whether "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. In answering this question, we may neither weigh conflicting evidence nor consider the credibility of witnesses." United States v. Johnson, 120 F.3d 1107, 1108 (10th Cir. 1997) (citations and internal quotations omitted).

1. 26 U.S.C. §7206(1)--Requirements of Willfulness and Materiality

In order to establish a violation of 26 U.S.C. §7206(1), the government had to prove that Winchell did not believe that the return which he signed under penalty of perjury was true and correct as to every material matter, and it also had to prove that Winchell acted willfully. See United States v. Owen [94-1 USTC ¶50,281], 15 F.3d 1528, 1532 (10th Cir. 1994). Winchell contends that, even if the district court did not err in its instructions, the evidence was insufficient to prove either the willfulness or the materiality elements of the offense.

a. Willfulness

"Willfulness, as construed by [Supreme Court] decisions in criminal tax cases, requires the government to prove that the law imposed a duty on the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty." ⁹ Cheek [91-1 USTC ¶50,012], 498 U.S. at 201.

In this case, Winchell does not argue that he did not know the relevant tax law, or that he otherwise had a good faith misunderstanding of the duties it imposed. Rather, Winchell argues simply that "[t]he government failed to introduce any evidence that [he] intended his scheme to have adverse consequences for anyone, including himself, or that he acted with the purpose of violating the law." Appellant's Br. at 22. We disagree. Our review of the record reveals ample evidence that Winchell desired to make the victims of his filings "pay the price" for "stealing" his money. Moreover, the evidence clearly shows that he never paid any of the sums he claimed on the false forms.

"[A] jury is permitted to draw inferences of subjective intent from a defendant's objective acts." Wingfield v. Massie, 122 F.3d 1329, --, 1997 WL 471125, at *5 (10th Cir. 1997) (citing 1 Wayne R. LaFave and Austin W. Scott, Jr., Substantive Criminal Law §3.5 at 316-17 (1986)). Additionally, a jury is also "permitted to find that a defendant intends those consequences which he announces a desire to accomplish." Id. at *5. Viewing the evidence in the light most favorable to the government, we conclude that the jury could reasonably conclude that Winchell voluntarily and intentionally violated the law when he filed the false documents, and thus acted willfully. ¹⁰

b. Materiality

Winchell also contends that his false statements were not material. As we have recently stated, information is material under §7206(1) if it is "necessary 'in order that the taxpayer . . . compute his tax correctly.' " United States v. Clifton [97-2 USTC ¶50,832], No. 96-5018, -- F.3d --, slip op. at 3 (10th Cir. Oct. 17, 1997 ) (quoting United States v. Strand [80-1 USTC ¶9309], 617 F.2d 571, 574 (10th Cir. 1980) (internal citations and quotations omitted)); accord United States v. Uchimura [97-2 USTC ¶50,671], No. 94-10579, -- F.3d --, 1997 WL 573130, at *3 (9th Cir. Sept. 17, 1997 ); United States v. Klausner [96-1 USTC ¶50,173], 80 F.3d 55, 60 (2d Cir. 1996).

Nonetheless, Winchell argues that, in this case, his filings were not material since they were "objectively incapable of influencing the IRS because of [his] well-known tax protestor status and the preposterous monetary figures provided." ¹¹ Appellant's Br. at 18. In other words, Winchell argues that he is not liable for his false statements because of their patent absurdity. We have previously rejected such arguments. "The large amounts involved do not reduce the forms to scraps of blank paper. If anything, the reverse is the case. They cry out for attention and it would be blameworthy administration to ignore them." United States v. Parsons [92-2 USTC ¶50,442], 967 F.2d 452, 455 (10th Cir. 1992) (applying the analogous provision of 18 U.S.C. §1001); ¹² see also United States v. Meuli, 8 F.3d 1481, 1485 (10th Cir. 1993) (also applying 18 U.S.C. §1001--"to simply accept Defendant's argument would turn §1001 on its head--i.e. Defendant would be ultimately relieved from liability for making a false statement because of the falsity itself").

In this case, Winchell's false statements concerned income. Moreover, the IRS was forced to implement special procedures to intercept the false filings. Accordingly, viewing the record in the light most favorable to the government, we conclude that a reasonable juror could have found that Winchell's false statements concerned a matter necessary to the correct computation of taxes owed, and that the statements also had a natural tendency to influence, or were capable of influencing, required IRS decisions and determinations.

2. 26 U.S.C. §7212(a)--Requirement That a Defendant Act Corruptly

In order to establish a violation of 26 U.S.C. §7212(a), the government must prove that a defendant "corruptly" endeavored to obstruct and impede the due administration of the internal revenue laws. As used in this section, to act corruptly means to act with the intent to secure an unlawful benefit either for oneself or for another. See United States v. Valenti [97-2 USTC ¶50,629], 121 F.3d 327, 331 (7th Cir. 1997); United States v. Wilson [97-2 USTC ¶50,618], 118 F.3d 228, 234 (4th Cir. 1997); United States v. Workinger [96-2 USTC ¶50,402], 90 F.3d 1409, 1414 (9th Cir. 1996); United States v. Reeves [85-1 USTC ¶9190], 752 F.2d 995, 998 (5th Cir. 1985) ("Reeves I"); cf. United States v. Ogle, 613 F.2d 233, 238 (10th Cir. 1979) (quoting Bouvier's Law Dictionary and noting, in the context of 18 U.S.C. §1503, that "corruptly" ordinarily describes "an act done with an intent to give some advantage inconsistent with official duty and the rights of others"). Moreover, a taxpayer's filing of frivolous documents against IRS agents constitutes a corrupt endeavor if the taxpayer "meant to . . . intimidate officers or agents of the [IRS] from collecting his just debt of taxes due." Reeves I [85-1 USTC ¶9190], 752 F.2d at 1002; see also United States v. Reeves [86-1 USTC ¶9292], 782 F.2d 1323, 1326 (5th Cir. 1986) ("Reeves II").

On appeal Winchell contends that the evidence was insufficient to support a conviction because there was no evidence that he sought to secure a "financial gain." Winchell contends that, at best, the evidence indicates that he attempted merely to annoy the recipients of his mailings, Appellant's Br. at 15, and that the sums he claimed were so preposterous as to "negate[] any rational conclusion that he actually expected to achieve any financial benefit." Appellant's Reply Br. at 5. Additionally, Winchell contends that because he did not testify, there is no evidence of his actual intent. Appellant's Br. at 16. In response, the government points out that two of the IRS employees who received his mailings testified they felt threatened and harassed, and, moreover, the evidence demonstrates that the false mailings actually did drain IRS resources. The government further emphasizes the refund Winchell sought on his false income tax return.

The fact that the taxpayer may claim sums which are rationally "preposterous" does not obviate a corrupt intent. See, e.g., United States v. Kuball [92-2 USTC ¶50,501], 976 F.2d 529, 530-31 (9th Cir. 1992); United States v. Yagow [92-1 USTC ¶50,167], 953 F.2d 423, 425-27 (8th Cir. 1992). Moreover, as we have already noted, a "jury is permitted to draw inferences of subjective intent from a defendant's objective acts." Wingfield, 122 F.3d at --, 1997 WL 471125, at *5.

In this case, the evidence shows that, in addition to filing a false tax return seeking a refund, Winchell mailed false bills and false IRS forms to the IRS and its employees, and he sent letters which accused the employees of stealing his money and which otherwise threatened them. Taking the evidence in the light most favorable to the government, a juror could reasonably infer that Winchell sought to secure an unlawful advantage or benefit. See Reeves II [86-1 USTC ¶9292], 782 F.2d at 1326. Accordingly, we conclude that Winchell's conviction for corruptly endeavoring to impede the due administration of the internal revenue laws is supported by sufficient evidence.

Therefore, for the reasons stated, we AFFIRM the judgment of the district court.

¹ In 1987, the lessee of the property, who had obtained a default judgment against Winchell for breaching the lease, purchased the property at a sheriff's sale conducted to foreclose his judgment lien. Two years later, in 1989, that lessee-purchaser sold to a third party. Thereupon, the IRS filed an action to foreclose its allegedly superior lien. See generally R. Vol. VI at 151-154. However, the federal district judge concluded that the IRS had released its lien and, consequently, no longer held any interest in the property. See United States v. Winchell [92-2 USTC ¶50,394], 793 F. Supp. 994 (D. Colo. 1992). Had the IRS prevailed, the proceeds of the second sale would have fully satisfied its judgment against Winchell.

² Two persons involved in business dealings with Winchell also testified that Winchell was using off-shore trusts, aliases, and partnerships to hold various properties after the IRS obtained its judgment. R. Vol. VI at 132-33, 147, 151-53, 250-52.

³ Apparently Winchell did not actually file liens or attempt to garnish any wages after he sent these mailings. However, one of the IRS recipients testified that he was attempting to purchase a house at the time, and he was concerned because Winchell had previously filed false liens against others. R. Vol. VI at 182, 189.

⁴ We note that Winchell apparently wrote the letter to "Linda" after he filed the false tax forms. Nonetheless, defense counsel requested that it be read in full for the jury. R. Vol. VI at 227. Throughout the trial, defense counsel contended that events through mid-1992, when the IRS lost its foreclosure action, were relevant as "part and parcel of the entire presentation," and "showing the context within which it happened." Id. at 123, 126; see supra note 1.

⁵ Winchell stipulated to the proof of elements one and two. R. Vol. V. at 292-294.

⁶ Winchell tendered the following instruction:

The crimes charges [sic] in counts II through VII are serious crimes which require proof of specific intent before the Defendant can be convicted. Specific intent, as the term implies, means more than the general intent to commit the act. To establish specific intent the Government must prove that the Defendant . . . knowingly did an act which the law forbids, purposely intending to violate the law. Such intent may be determined from all the facts and circumstances surrounding the case. Accordingly, it is not enough if the Government establishes, beyond a reasonable doubt, that the income tax return was false in some material matter. In order to convict the Defendant . . . you must find beyond a reasonable doubt, that he subscribed to a return, knowing the same to be false in a material respect, and did so purposely intending to violate the income tax law regarding false statements on a return. Unless you so find beyond a reasonable doubt, you must acquit.

R. Vol. I., Tab 3, Defendant's Proposed Jury Instruction No. 5.

⁷ As we observed in United States v. Hollis, 971 F.2d 1441, 1451 (10th Cir. 1992), this definition of willfulness, which differs from that term's traditional connotation, has been imposed only in limited contexts.

⁸ In Liparota, the defendant proffered an instruction identical to the first four sentences of the instruction which Winchell proffered. Compare supra note 6, with Liparota v. United States , 471 U.S. 419, 422 n.3 (1985). Referring to that instruction, the Court observed that a "more useful instruction might relate specifically to the mental state required under [the statute at issue] and eschew use of difficult legal concepts like 'specific intent' and 'general intent.' " Liparota, 471 U.S. at 433 n. 16 (1985).

⁹ With regard to our preceding discussion in section II.A., supra, we observe that an instruction on willfulness which incorporates this more fully elaborated statement from Cheek would also be acceptable.

¹⁰ We are unconvinced by Winchell's argument that, at most, the evidence merely indicates an intent to "annoy" his victims. Even if annoyance were his primary intent, a reasonable juror could have concluded that his means of accomplishing the desired end necessarily involved an intentional violation of the law.

¹¹ In making this argument, Winchell utilizes our definition of materiality in the analogous context of 18 U.S.C. §1001, which prohibits the knowing and willful making of a false statement regarding a material fact that is within the jurisdiction of a federal agency. In that context, we have stated that a " 'false statement is material if it has a natural tendency to influence, or is capable of influencing, the decision of the tribunal in making a determination required to be made.' " United States v. Meuli, 8 F.3d 1481, 1485 (10th Cir. 1993) (quoting United States v. Brittain, 931 F.2d 1413, 1415 (10th Cir. 1991)).

¹² Parsons concerned the filing of false income tax forms, although the case was brought pursuant to 18 U.S.C. §1001. See supra note 11. Applying that section to our evaluation of the materiality of the false statements, we held that the "determination required to be made . . . [is] whether the forms depict[] truth." United States v. Parsons [92-2 USTC ¶50,442], 967 F.2d 452, 455 (10th Cir. 1992). In any event, Winchell attempts to factually distinguish Parsons by noting that those false statements involved only $55 million, whereas his case involved billions. We are not persuaded.

 

 

 

 

[2002-2 USTC ¶50,486] United States of America , Plaintiff-Appellee v. William Michael Lovern,"CR a/k/a Michael Lovern, Sr., Defendant-Appellant

(CA-4), U.S. Court of Appeals, 4th Circuit, 01-4728, 6/14/2002, 2002 U.S. App. LEXIS 11747. Affirming an unreported District Court decision

[Code Secs. 7212 and 7804 ]

Crimes: IRS personnel: Interference with tax administration.--Sufficient evidence existed to sustain an individual's conviction for impeding, intimidating or obstructing tax administration pursuant to Code Sec. 7212 in connection with threats he made against a special agent of the Inspector General for Tax Administration (TIGTA). While the TIGTA special agent admittedly took phone calls from the taxpayer to protect IRS employees from his threatening phone calls, he was simultaneously providing the taxpayer with an opportunity to register complaints regarding IRS misconduct. Thus, the mere fact that he was protecting IRS employees from the taxpayer's threats under Title 5 of the United States Code, did not mean that the agent was not acting within the scope of authority provided under Title 26.
[Code Secs. 7212 and 7804 ]

Crimes: IRS personnel: Interference with tax administration: Jury instructions.--Sufficient evidence existed to sustain an individual's conviction for impeding, intimidating or obstructing tax administration pursuant to Code Sec. 7212 in connection with threats he made against a special agent of the Inspector General for Tax Administration (TIGTA). Although the trial court erred in instructing the jury as a matter of law that the agent was acting in the scope of his official duties under Title 26, under the harmless error standard, that error did not contribute to the verdict obtained. The undisputed evidence showed that the agent was performing an official duty under Title 26 of the United States Code and acting within the scope of the scope of the authority granted to TIGTA under Code Sec. 7803(d)(3)(B) by receiving taxpayer complaints.

Paul J. McNulty, United States Attorney, Sara Elizabeth Flannery, Special Assistant United States Attorney, Kenneth Lee Westnedge, Jr., Student Counsel, Richmond, Va., for plaintiff-appellee. Frank W. Dunham, Federal Public Defender, Robert James Wagner, Assistant Federal Public Defender, Richmond , Va. , for defendant-appellant.

Before: WIDENER and WILLIAMS, Circuit Judges, and STAPLETON, Senior Circuit Judge.

WILLIAMS, Circuit Judge:

William Lovern appeals his conviction under 26 U.S.C.A. §7212(a) (West 1989), for impeding, intimidating, or obstructing an employee of the United States acting in an official capacity under Title 26 of the United States Code. Lovern claims that he did not make a "threat" satisfying §7212's requirements and that the employee he was charged with threatening was not acting pursuant to any authority granted under Title 26. Because we conclude that Lovern's statements were attempts to intimidate a United States employee within the scope of §7212(a) and that the employee in question was performing a duty under Title 26, we affirm.

I.

Beginning in 1998, Lovern repeatedly called the Richmond , Virginia office of the Internal Revenue Service (IRS) to complain about his taxes. Lovern voiced a variety of complaints in his calls, including his belief that a tax levy of over $300,000 had been wrongly placed by the IRS on certain of his assets. Eventually, IRS officials in the Richmond office instructed Lovern not to call there anymore, referring him instead to the Richmond office of the Treasury Inspector General for Tax Administration (TIGTA). Thereafter, Lovern regularly called TIGTA. Because of the perceived threatening nature of some of Lovern's calls, TIGTA made the decision in June of 1999 to record incoming calls from him.

During a call Lovern made to the Richmond office of TIGTA on July 15, 1999 , Lovern spoke to Special Agent Charles Venini of TIGTA. The Government entered a recording of the call into evidence at trial and played the call for the jury. The following exchanges occurred during the conversation between Lovern and Venini:

Venini: You are to write a letter to [the Deputy Director of the IRS for Virginia ] in reference to all IRS tax issues that you have. The IRS will not accept any phone calls from you.

Lovern: Oh, you don't have a choice, because I'm going to shove it right up you [sic] ass.

Venini: Ok.

Lovern: And the day you lay down your badge, I'm going to be standing there.

Venini: Ok.

Lovern: Thank God you have a badge, son.

. . . .

Lovern: Now, Chuck, you take your quote instructions and stick 'em where the sun don't shine.

Venini: Ok.

Lovern: Because you have no authority.

Venini: All right. You are aware of what I just told you, right.

Lovern: No, I am aware of nothing.

Venini: Ok.

Lovern: I am aware of nothing, because you have no authority.

Venini: Would you like for me to repeat it again?

Lovern: No, because you have no authority. When it comes to my personal taxes, you have no authority.

Venini: I didn't say anything about your personal taxes.

Lovern: That's exactly what this is all about my personal taxes.

Venini: Ok.

Lovern: That's the only [thing] about [it] Chuck and if you tortuously interfere with my personal business again I am going to forget you are wearing a badge.

J.A. at 312-14.

Lovern was first indicted on February 23, 2000 in the Eastern District of Virginia. He was charged initially with three misdemeanor counts of violating §7212(a), which generally prohibits impeding, intimidating, or obstructing a United States employee in the performance of official duties under Title 26. The Government subsequently filed three superseding indictments, the last of which charged nine counts, including bank fraud, conspiracy to commit bank fraud and wire fraud in addition to the §7212(a) violations. Lovern moved to dismiss the counts charging §7212(a) violations on the ground that the government employees identified in the indictment were not acting in an official capacity under Title 26, as §7212(a) requires. The trial court denied Lovern's motion but severed the counts charging §7212(a) violations from the remainder of the indictment. A trial proceeded on those counts. ¹

The jury found Lovern not guilty of all counts save one, the count charging him with a §7212(a) violation in connection with the conversation referenced above. Lovern was sentenced to time served ² and a special assessment of $25. He timely noted this appeal.

II.

Lovern raises two principal arguments on appeal. First, he claims the district court erred in denying his motions to dismiss the indictment and at the close of trial for a directed verdict in his favor on the ground that Venini was not acting in an official capacity under Title 26 at the time of the exchange in question. Second, he claims the district court erred in instructing the jury that Venini was acting in an official capacity under Title 26 because that is an element of a §7212(a) offense, and therefore, is to be found by the jury. ³ We address these arguments in turn.

A.

Section 7212(a) states that "whoever corruptly or by force or threat of force (including any threatening letter or communication) endeavors to intimidate or impede any officer or employee of the United States acting in an official capacity under this title . . ." shall be guilty of a crime. 26 U.S.C.A. §7212(a) (West 1989). Lovern asserts that Venini, a Special Agent in TIGTA's Richmond office, was not and indeed could not have been "acting in an official capacity under [Title 26]" when Lovern threatened him. He points out that the primary source of TIGTA's authority is Title 5, which gives TIGTA agents the authority to protect IRS employees from threats and investigate any such threats. See 5 U.S.C.A. app. 3 §8D(k)(1)(C) (West Supp. 2001) (stating that TIGTA "shall be responsible for protecting the Internal Revenue Service against external attempts to corrupt or threaten employees of the Internal Revenue Service"). Thus, Lovern contends, Venini was acting in an official capacity during the July 15 conversation, but not an official capacity under Title 26.

Lovern is correct that much of TIGTA's authority is derived from Title 5. Under 26 U.S.C.A. §7803(d)(3)(B), however, TIGTA is required to "establish and maintain a toll-free telephone number for taxpayers to use to confidentially register complaints of misconduct by Internal Revenue Service employees. . . ." 26 U.S.C.A. §7803(d)(3)(B) (West Supp. 2001). This section plainly authorizes TIGTA agents to receive complaints, via telephone, from taxpayers regarding wrongful conduct by IRS employees. It is beyond question that Agent Venini was receiving complaints registered by Lovern during the conversation on July 15. See J.A. at 311 (statement by Lovern that "I'm a victim of tax fraud . . . so far as my tax lien."). Lovern himself stated that the conversation was "all about my personal taxes." J.A. at 314.

While it is no doubt true that Venini was talking to Lovern during the July 15 conversation to protect the employees of the IRS's Richmond office from Lovern's apparently threatening phone calls to them, he was also providing Lovern an opportunity to register complaints of IRS misconduct. It is apparent that Congress was aware that perceived misconduct by the IRS will in some cases be a source of significant agitation and distress to the complaining party. TIGTA, as the organization with the responsibility for investigating fraud, abuse, and misconduct within the IRS, see 5 U.S.C.A. app. 1 §8D(h) (requiring TIGTA to "exercise all duties and responsibilities of an Inspector General of an establishment with respect to the Department of the Treasury and the Secretary of the Treasury on all matters relating to the Internal Revenue Service"), has been designated as the proper recipient of such complaints under 26 U.S.C.A. §7803(d)(3)(B). That an employee of TIGTA listening to such complaints may be simultaneously protecting IRS employees from threats under Title 5 does not mean the employee is not acting under Title 26. Accordingly, we conclude that during the July 15 conversation Venini was acting within the scope of the authority granted TIGTA under Title 26, specifically §7803(d)(3)(B). ⁴

B.

Lovern next argues that the district court erred in instructing the jury that Venini was acting in the scope of his official duties under Title 26 during the July 15 conversation with Lovern because official action under Title 26 is an element of the charged offense, and accordingly it had to be proven to the jury beyond a reasonable doubt. Count Six of the indictment, on which Lovern was found guilty, alleged that Lovern "did by threats of force endeavor to intimidate and impede Special Agent Charles Venini of the Treasury Inspector General for Tax Administration, Washington Field Division, while acting in his official capacity under Title 26, United States Code. . . ." J.A. at 42-43. In its charge to the jury, the district court said "you are instructed as a matter of law that . . . Charles Venini [was] acting in [his] official capacity under Title 26 at the times alleged in this indictment." Supp. J.A. at 32.

"The Constitution gives a criminal defendant the right to have a jury determine, beyond a reasonable doubt, his guilt of every element of the crime with which he is charged." United States v. Gaudin, 515 U.S. 506, 522-23, 132 L.Ed.2d 444, 115 S.Ct. 2310 (1995). "In determining what facts must be proved beyond a reasonable doubt the . . . legislature's definition of the elements of the offense is usually dispositive." McMillan v. Pennsylvania , 477 U.S. 79, 85, 91 L.Ed.2d 67, 106 S.Ct. 2411 (1986). A trial judge therefore "commits error of constitutional magnitude when he instructs the jury as a matter of law that a fact essential to conviction has been established by the evidence, thus depriving the jury of the opportunity to make this finding." United States v. Johnson, 71 F.3d 139, 142-43 (4th Cir. 1995) (concluding that a district court's charge to the jury that a credit union robbed by the defendant was a federal credit union, as required by the statute of conviction, constituted error of constitutional dimension because that fact was an element of the offense that the defendant was entitled to have the jury find).

Section 7212(a) states that a person must "endeavor[] to intimidate or impede an[] officer or employee of the United States acting in an official capacity under [Title 26]. . . ." 26 U.S.C.A. §7212(a). With this language, Congress has made the victim's status as an officer or employee acting in an official capacity under Title 26 an element of at least some §7212(a) offenses. ⁵ Cf., e.g., United States v. Linn, 438 F.2d 456, 458 (10th Cir. 1971) (noting that "one of the elements of the offense proscribed by [18 U.S.C.A.] §111 [criminalizing assault of federal employees while engaged in official duties] is that the federal officer assaulted be engaged in the performance of his official duties and not on a frolic of his own"). As in Johnson, the court here took from the jury the responsibility of determining an element of the offense in question. See Johnson, 71 F.3d at 141. The district court thus erred in instructing the jury as a matter of law that Venini was acting in the scope of his official duties under Title 26. See Gaudin, 515 U.S. at 522-23.

The conclusion that the district court erred, however, does not end our inquiry. Rule 52(a) of the Federal Rules of Criminal Procedure provides that "any error, defect, irregularity or variance which does not affect substantial rights shall be disregarded." While this Rule by its terms applies to all errors where a proper objection is made at trial, the Supreme Court has recognized a limited class of fundamental constitutional errors that "defy analysis by §harmless error' standards." Arizona v. Fulminante, 499 U.S. 279, 309, 113 L.Ed.2d 302, 111 S.Ct. 1246 (1991). For all other constitutional errors, however, "reviewing courts must apply Rule 52(a)'s harmless-error analysis and must disregard errors that are harmless beyond a reasonable doubt." ⁶ Neder v. United States, 527 U.S. 1, 7, 144 L.Ed.2d 35, 119 S.Ct. 1827 (1999) (internal quotation marks omitted).

The Supreme Court held in Neder that failure to instruct the jury on an element of the charged offense is an error subject to harmless error review. Id. at 9 (noting that "an instruction that omits an element of the offense does not necessarily render a criminal trial fundamentally unfair or an unreliable vehicle for determining guilt or innocence" (emphasis in original)). We thus consider below whether the error affected Lovern's substantial rights.

In conducting our review under the harmless error standard, we ask "whether it appears beyond a reasonable doubt that the error complained of did not contribute to the verdict obtained.' " Id. at 15 (quoting Chapman v. California, 386 U.S. 18, 24, 17 L.Ed.2d 705, 87 S.Ct. 824 (1967)). The government bears the burden of demonstrating that the error was harmless. United States v. General, 278 F.3d 389, 395 n.2 (4th Cir. 2002). The Government argues here that the unrebutted evidence adduced at trial demonstrated that Venini was performing an official duty under Title 26 when Lovern threatened him. ⁷ In light of our conclusion in Part II.A, supra, and the evidence at trial, we conclude that this contention is correct. Venini plainly was acting within the scope of 26 U.S.C.A. §7803(d)(3)(B) when he spoke to Lovern on July 15; Lovern was voicing complaints about the conduct of IRS officials, and Venini was receiving them. Cf. J.A. at 311 (statement by Lovern that "I'm a victim of tax fraud . . . so far as my tax lien"). Although Lovern contested the element's not being submitted to the jury, he did not "raise[] evidence sufficient to support a contrary finding . . ." to that reached by the judge. Neder, 527 U.S. at 19. Indeed, Lovern's entire argument at trial on this element was premised on the erroneous legal supposition that nothing in Title 26 granted Venini authority to act in any capacity. Thus, the error in this case did not contribute to the verdict obtained.

III.

For the reasons set forth above, the judgment of the district court is affirmed.

AFFIRMED

¹ The Government subsequently superseded the remaining (non §7212(a)) charges in the nine-count indictment with an eighteen-count indictment, which included charges of bank fraud, conspiracy to commit bank fraud, wire fraud, and money laundering. All of these counts were eventually dismissed.

² Lovern was released on bond after being indicted initially, but violated the terms of his bond by calling TIGTA. The district court thereafter ordered him detained until trial.

³ Lovern also argues that his conviction should be reversed because he did not attempt to impede, intimidate, or obstruct Venini within the meaning of §7212(a). Any "threats" he made during the conversation in question were, he asserts, not "true threats," but rather hyperbole not amounting to an attempt to intimidate Venini. In light of the jury's conclusion that Lovern did attempt to intimidate or impede Venini in the performance of his official duties, and given that several of Lovern's statements were plainly threatening (e.g., "if you tortuously interfere with my personal business again I'm going to forget you're wearing a badge," J.A. at 314), we conclude that this contention has no merit.

⁴ Judge Stapleton also concludes that the undisputed evidence indicates that Venini was exercising authority conferred by Title 26 as well as authority conferred by Title 5. Lovern repeatedly called numerous IRS employees to argue and complain about the position the IRS was taking with respect to his own taxes and those of others. He called so frequently and talked so long that it interfered with the IRS employees' ability to do their jobs. As a result, Venini was assigned to take calls that would otherwise have gone to these employees and to advise Lovern that all future communication between himself and the IRS would have to be in writing. The purpose of Lovern's calls was no different after the designation of Venini as the receiver of those calls, and Venini was performing the responsibilities of an IRS employee when he took them.

⁵ There is an offense defined under §7212(a) that does not require that the victim of the threat be an officer or employee of the United States or that he be acting in an official capacity, but Lovern was not charged in the count of conviction with that offense. See 26 U.S.C.A. §7212(a) (stating, in the "omnibus clause" that one who "by force or threats of force . . . obstructs or impedes, or endeavors to obstruct or impede, the due administration of [Title 26]" shall be guilty of an offense). The Government does not argue that the evidence adduced at trial was sufficient to convict Lovern under the "omnibus clause" of §7212(a); the Government thus rests on the proposition that Lovern was properly convicted under the "intimidating or impeding an officer" clause of §7212(a).

⁶ Lovern properly objected at trial to the district court's instruction to the jury on the issue of whether Venini was acting in an official capacity under Title 26 during the July 15 phone conversation.

⁷ The Government argued in its brief that the district court's jury instruction was not error, but it noted at oral argument that harmless error review would apply to any error that occurred.

 

 

 

[2005-2 USTC ¶50,526] United States of America , Plaintiff-Appellee v. Samuel Saldana, Jr., Defendant-Appellant. United States of America , Plaintiff-Appellee v. Saul Saldana, Defendant-Appellant.

U.S. Court of Appeals, 5th Circuit; 04-50527, 04-50591, August 18, 2005 .

Affirming an unreported DC Texas decision.

[ Code Sec. 7212]

Interference with administration of internal revenue laws: Jury instructions: Criminal procedure: Sentencing. --

The convictions and sentencing of two brothers for corruptly endeavoring to impede the administration of tax laws by filing false tax reports (Forms 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business) regarding certain public officials to trigger IRS audits against such individuals were affirmed. The convictions were supported by sufficient evidence. The district court's instruction to the jury that "corruptly" means "to act knowingly and dishonestly with the specific intent to secure an unlawful benefit for oneself or another" was not plainly erroneous. The taxpayers did not object to the instruction during the trial. Also, the district's court's decision to impose enhanced sentencing due to aggravating circumstances was acceptable.

Before: Jones, Wiener and Clement, Circuit Judges.

WIENER, Circuit Judge: Defendants-Appellants, twin brothers Samuel and Saul Saldana, challenge their respective convictions for corruptly endeavoring to impede the administration of Internal Revenue laws and for filing false statements. They also contend that the district court sentenced them in violation of their Sixth Amendment rights in light of the Supreme Court's recent United States v. Booker decision or, in the alternative, that the sentences imposed by the district court were unreasonable. Although the brothers were tried and sentenced separately, they moved successfully to have their cases consolidated on appeal. Following oral argument, we issued an order of limited remand regarding Samuel's sentence to allow the district court to provide written reasons for its upward departure in that sentence. ¹ Having received and reviewed such written reasons from the district court, we now affirm both defendants' convictions and sentences.

I. FACTS AND PROCEEDINGS

Samuel and Saul were indicted by a Grand Jury on one count each for corruptly endeavoring to obstruct and impede the due administration of Internal Revenue Laws in violation of 26 U.S.C. §7212(a)("§7212"). Saul was indicted on twelve, and Samuel on sixteen, additional counts for filing false statements in violation of 18 U.S.C. §1001(a)(3)("§1001"). The government charged the brothers with filing false tax reports regarding several individuals for the purpose of triggering Internal Revenue Service ("IRS") audits and thereby harassing and intimidating these individuals. Different juries convicted each brother on all counts at separate trials before the same district judge.

The brothers were convicted for sending IRS Forms 8300 ("8300s"), "Report of Cash Payments over $10,000 Received in a Trade or Business," ² to the IRS, falsely stating that the defendants had paid or received cash payments to or from a number of individuals identified in such forms. On the portion of the 8300s that request information regarding the amount of money exchanged by the filer with another party, the defendants either left the space blank or wrote $10,000 or filled in some astronomical figure such as $213 quintillion or $1,955,000,000,000,000. None of the persons identified in these forms had ever received any money from, or given any money to, either defendant. No one disputes that each brother engaged in the acts with which he was charged. Rather, each trial centered on whether the defendant harbored the requisite intent "corruptly" to obstruct the administration of Internal Revenue laws.

Each of the individuals with whom, on the 8300s, Saul and Samuel claimed to have transacted was in some way connected with state or local government. Most of the individuals targeted by Saul had never met him but (1) had written to him letters about his tax obligations, (2) had otherwise assessed fines or penalties for the government, or (3) were lawyers representing governmental entities that were seeking to assess fines, penalties or taxes against him. Samuel targeted judges and attorneys involved in proceedings against him or other public officials against whom he bore grudges.

Saul argues that he filed these 8300s in good faith, having learned about this tactic in a "tax course" that he attended with his fiancee, which course purported to inform those in attendance about a so-called "redemption" or "charge-back" process. This process purportedly permits individuals to redeem money from the government for a variety of nonsensical reasons, including that the government has an account for each citizen that is linked to the citizen's birth certificate.

Saul attempted to introduce into evidence "black manuals" that he claims to have received in this class and that explain this process. The trial court refused to allow the manuals into evidence, ruling that they were, alternatively, inadmissible hearsay, cumulative evidence, and would confuse the jury. Nevertheless, Saul testified to the jury that he relied on these manuals and generally described the "redemption process." An acquaintance of Saul's, Rick Garcia, testified that Saul advised him to file false 8300s against a judge presiding over Garcia's narcotics trafficking trial, as doing so would intimidate the judge and cause him to "back off" from Garcia's case.

At each trial, IRS Special Agent Jeff Allen testified that the defendants' actions cost the IRS several hundred hours of investigative manpower, requiring numerous levels of administrative review. At Samuel's trial, Allen testified additionally that Samuel was an anti-government tax protester who did not believe the IRS had jurisdiction over him and that, in filing the 8300s, Samuel sought to retaliate, intimidate, and harass the persons named in these forms. Allen stated that this is a common scheme used by anti-government protestors against public officials with whom the protestors have come into contact.

The targets of the false report forms testified at trial, stating that they had experienced various levels of concern, primarily about the possibility of an audit or, for many of the public officials, about their reputations if the public were to believe that they had received large sums of unreported income. None of the targeted persons was audited by the IRS or employed an attorney to defend them.

June Collerd, the mother of Samuel's children, testified that Samuel sent her an e-mail during a custody battle, advising that he would report her to the IRS, the Treasury Department, and six other federal agencies. Collerd stated that Samuel also told her that public officials involved in the custody case would "get theirs," that he was "going to get them," or that they would "pay for what they did to him."

The trial court sentenced Saul to a six month term of imprisonment on each count, ordering (1) that he serve counts one through four consecutively with counts five through thirteen to run concurrently, for a total incarceration of twenty-four months, (2) that he remain on supervised release for three years, and (3) that he pay a $1,300 mandatory assessment. The court sentenced Samuel to consecutive ten-month terms of imprisonment on six counts, and concurrent terms of imprisonment on the remaining eleven counts, for a total of sixty months imprisonment. In addition, the court ordered Samuel to be placed on supervised release for a term of one year on count one and three years on counts two through seventeen, to run concurrently, for a total of three years supervised release. The court also imposed a mandatory assessment of $1,700.

In directly appealing his conviction, each defendant challenges the district court's interpretation of §7212 and also challenges his sentence. Saul also appeals the court's refusal to allow his tax manuals into evidence.

II. ANALYSIS

A. 26 U.S.C. §7212: Defining "Corruptly"

1. Standard of Review

As each brother makes an identical argument with respect to the first issue on appeal, we discuss their cases together. All parties characterize the defendants' first argument as a challenge to the sufficiency of the evidence, but it actually implicates the proper interpretation of §7212(a), which prohibits

corruptly or by force or threats of force ... endeavor[ing] to intimidate or impede any officer or employee of the United States acting in an official capacity under this title, or in any other way corruptly or by force or threats of force ...obstruct[ing] or imped[ing], or endeavor[ing] to obstruct or impede, the due administration of this title.

The brothers argue that the evidence did not support the jury's finding that either acted "corruptly" within the meaning of §7212(a). They insist that our case law requires the government to show that the defendant sought an unfair benefit or advantage under the tax laws to prove that he acted with the requisite intent.

Although the government in its response frames the defendants' challenges as going to the sufficiency of the evidence to show that the brothers sought an unfair advantage or benefit without reference to the tax laws, the prosecution points out that, at Samuel's trial, the court instructed the jury --without defense objection --on the meaning of "corruptly:" "To act 'corruptly' means to act knowingly and dishonestly with the specific intent to secure an unlawful benefit either for oneself or for another." The record shows that an identical instruction was given to the jury in Saul's case, also without objection by the defendant.

Ordinarily, we review issues of statutory interpretation de novo. ³ In this case, however, neither defendant objected to the trial court's instructions to the jury defining "corruptly," so we review that instruction for plain error. ⁴ To prevail under this standard of review, a defendant must demonstrate "(1) that an error occurred; (2) that the error was plain, which means clear or obvious; (3) the plain error must affect substantial rights; and (4) not correcting the error would seriously affect the fairness, integrity, or public reputation of judicial proceedings." ⁵

2. Jury Instructions

At the outset, we must determine whether the district court's instructions to the jury were erroneous. ⁶ Defendants attempt to argue that the district court should have instructed the jury that "corruptly," as used in §7212, means intentionally endeavoring to gain an advantage or benefit inconsistent with a person's rights and duties under the tax laws. The Internal Revenue Code's criminal section does not define "corruptly," ⁷ yet defendants assert that we have defined "corruptly" with this reference to the tax laws when evaluating §7212. ⁸ In so doing, defendants rely on United States v. Reeves ⁹ --in actuality, two cases.

In Reeves I, we reversed the defendant's conviction for violating §7212, holding that the district court had wrongly interpreted "corruptly" to mean "with improper motive or bad or evil purpose." ¹⁰ Defendants are correct in noting that we stated in Reeves I that "[t]he legislative history supports an interpretation of §7212(a) as forbidding endeavors intended to give some advantage inconsistent with the rights and duties of others under the tax laws." ¹¹ Defendants fail to mention, however, that, without any reference to the tax laws, we went on to state in the same paragraph that "[a]ccordingly, the legislative history of section 7212(a) supports interpreting its prohibition against 'corruptly' endeavoring to impede or obstruct Title 26 as forbidding those acts done with the intent to secure an unlawful benefit either for oneself or for another." ¹² Even more significantly, our actual holding in Reeves I made no mention of benefits or advantages obtained under the tax laws: "We hold that the filing of frivolous common law liens with the intention of securing improper benefits or advantages for one's self or for others constitutes a prohibited corrupt endeavor under section 7212(a)." ¹³ We remanded Reeves's case for a determination whether he had acted "corruptly" under this new definition.

When, in Reeves II, we heard the defendant's second appeal from conviction, we reiterated our earlier holding without reference to an improper benefit or advantage under the tax laws. Defendants' argument therefore rests on one statement in Reeves I that was not the holding and was not repeated anywhere else in either opinion. ¹⁴

Other circuits, many citing Reeves, have also defined "corruptly" under §7212 as meaning "to act with the intent to secure an unlawful advantage or benefit either for one's self or for another" without addressing whether the advantage or benefit is confined to benefits under the tax laws. ¹⁵ Although the advantages or benefits sought by the defendants in those cases were often related to manipulation of the tax laws, none of the decisions listed has relied on or emphasized this fact or included "under the tax laws" in their holdings. In fact, the Eighth and Sixth Circuits have upheld convictions under §7212 when the defendants had not sought any advantage under the tax laws. The Eighth Circuit in United States v. Yagow noted only that the defendant sought a financial advantage, not an advantage under the tax laws, by filing fraudulent IRS forms. ¹⁶ In a case very similar to the instant one, United States v. Bowman, the Sixth Circuit affirmed a defendant's conviction for violation of §7212(a) when the defendant had filed false 1099 and 1096 forms for the sole purpose of intimidating and harassing his creditors. ¹⁷ The Bowman court held that the defendant's conduct fell within the ambit of §7212(a)'s proscribed conduct even though he sought no financial advantage or benefit for himself under the tax laws. ¹⁸

In the context of these holdings by other circuits, the facts that (1) the Reeves holdings did not include under the tax laws, and (2) the language of the statute itself does not require that an individual intend to procure a benefit for himself under the tax laws to have formed the requisite mens rea, we hold that the district court did not err --certainly not plainly --in its jury instructions. We do not address whether a defendant must be seeking a financial advantage, as in Yagow, ¹⁹ or whether §7212 is aimed at any behavior that seeks to thwart government efforts to execute tax laws, as the Eleventh Circuit has held, ²⁰ because the defendants in this case sought to do both. ²¹

B. Admission of Saul Saldana's "Tax Manuals" ²²

1. Standard of Review

We review the admission or exclusion of evidence for abuse of discretion. ²³ If we conclude that a district court has abused its discretion, we apply the harmless error doctrine. ²⁴ Accordingly, unless the trial court has abused its discretion and a substantial right of the defendant has been affected, we will not reverse on the basis of the evidentiary ruling in question. ²⁵

The government advances that we should review Saul's challenge to the district court's exclusion of the manuals for plain error, because he did not counter the government's hearsay objection at trial and raises his non-hearsay argument for the first time on appeal. ²⁶ Even if we assume arguendo that the district court plainly erred when it excluded the manuals as hearsay, we conclude that the court did not abuse its discretion when it decided to exclude the manuals as cumulative and as potentially confusing to the jury.

2. Rule 403

Saul challenges the district court's decision to exclude the "black manuals" that he claims to have received in a tax class at which he purports to have learned about the "charge-back" or "redemption" process. Saul contends that his receipt of and reliance on these manuals demonstrate his good-faith belief and intent to use a valid legal process to discharge his property taxes and other public debts. The government counters that Saul and his girlfriend, Peggy Briggs, were allowed to testify without contradiction about the charge-back scheme, and that Saul also testified about his reliance on the manuals and their contents. The government states that the district court properly excluded the manuals both as hearsay and because the manuals' probative value was not outweighed by their potential to confuse the jury.

The manuals at issue are plastic three-ring binders containing a random assortment of Xerox copies of statutes, cases, printed-out e-mails, banking and credit card instructions, and various bizarre papers, such as a chart illustrating the "Diogenes Historical Society" contrast of "Our Creator's Law" and "Man's Legal System," a copy of the Communist Manifesto, a comic strip, and a description of the movie, The Matrix. There is no summary or obvious organization of the contents, but the binders do contain copies of IRS Forms 8300, suspicious activity reports, and instructions on something that looks similar to what Saul described as the charge-back process. The binders are labeled with a piece of paper on which "Redemption Process" is hand-written in felt-tip marker.

Rule 403 of the Federal Rules of Evidence ("FRE 403") permits a trial court to exclude evidence if "its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." In this case, the manuals' probative value is slight: They are cumulative of Saul's unchallenged testimony that he relied on the tax class and these binders in implementing the redemption process. ²⁷ Their appearance is so unprofessional and random that, if anything, they undermine Saul's arguments that he truly believed that he engaged in a legitimate legal process. The manuals' potential to confuse the jury, in contrast, was quite high. They contain inaccurate legal advice and an assortment of strange and unrelated documents that have nothing to do with taxes or with this case. ²⁸

The trial court did not abuse its discretion in excluding the manuals on the basis of FRE 403's balancing. Even if the manuals were not inadmissible hearsay, because their admittance was sought not for the truth of the matter asserted but to show the defendant's belief in the "redemption process," ²⁹ the district court exercised appropriate discretion when it decided that the probative value of the manuals did not outweigh their potential to confuse the jury.

C. Sentencing Challenges

Samuel and Saul raise objections to their sentences under the Supreme Court's recent opinion in United States v. Booker, ³⁰ contending that the district court increased their sentences beyond that authorized by the jury verdict. They argue that the court based their sentences on facts not proved to a jury or admitted by defendants, and did so while proceeding under a mandatory Guidelines regime, thereby violating defendants' Sixth Amendment rights. Additionally, Saul argues that the district court based its decisions to depart upwardly on impermissible factors. And, both defendants insist that the sentences imposed were unreasonable.

1. Standard of Review

Saul did not raise any Sixth Amendment argument or challenge the Sentencing Guidelines before the district court, so we review his Booker claim for plain error only. ³¹ Samuel did preserve this objection before the district court, so we review his sentence for harmless error. ³²

Post- Booker challenges to a district court's interpretation and application of the Guidelines when imposing a Guidelines sentence are reviewed de novo. ³³ We therefore review de novo a district court's decision to depart upwardly and the acceptability of the reasons on which it relied in making that decision, because this implicates that court's interpretation and application of the Guidelines. We review the extent of the departure, and the sentence as a whole, for reasonableness. ³⁴ We accept the district court's finding of facts unless clearly erroneous and accord due deference to that court's application of the Guidelines to the facts. ³⁵

2. Saul Saldana

a. Sixth Amendment Challenge: Plain Error Review

It is clear, after Booker, that the district court committed plain error when it departed upward on Saul's sentence and did so based on facts not admitted by the defendant or found by the jury. ³⁶ We hold, however, that Saul cannot show that such error affected his substantial rights. To meet the plain error standard, a defendant must show that a district court's error affected the outcome of the proceedings. ³⁷ Saul cannot meet his burden to show that, if the district court had sentenced him under an advisory rather than mandatory sentencing guidelines system, it would have sentenced him differently. There is simply nothing in the record to indicate that the court would have decided differently had it not been bound by the Guidelines. ³⁸ We therefore hold Saul's Booker argument to be unavailing.

b. Upward Departure

Saul also challenges the district court's upward departure, arguing that the court based its decision on impermissible factors and that the extent of the departure was unreasonable. Saul's Pre-Sentence Investigative Report ("PSR") grouped all thirteen counts together in accordance with the grouping requirements in United States Sentencing Guidelines ("U.S.S.G.") §3D1.2. His base offense level for this group was calculated to be eight, including a two-level enhancement for obstruction of justice, ³⁹ under U.S.S.G. §2T1.1. ⁴⁰ The 1998 edition of the Guidelines was used to avoid ex post facto problems; his criminal history category was I. Together with his base offense level, this yielded a prison sentence range of zero to six months, probation of one to five years, and supervised release for Count one of one year and counts two through thirteen of two to three years. The district court ordered that the sentences for counts one through four run consecutively, for a total term of imprisonment of 24 months, with the remaining counts to be served concurrently; three years supervised release; and a $1300 mandatory fee assessment. ⁴¹

Prior to Booker, a district court could upwardly depart under the Guidelines if "there exists an aggravating... circumstances of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the Guidelines." ⁴² The Sentencing Commission intended for sentencing courts "to treat each guideline as carving out a 'heartland,' a set of typical cases embodying the conduct that each guideline describes." ⁴³ If the court considered a factor in its decision to depart that the Guidelines either discouraged or had already included in some other way, the court could upwardly depart only "if the factor is present to an exceptional degree or in some other way makes the case different from the ordinary case where the factor is present." ⁴⁴

Although district courts are no longer bound by the Guidelines, they still must consider them, including the appropriate sentencing range, and state reasons for imposing a sentence outside that range. ⁴⁵ A sentencing court's reasons for an upward departure are permissible if they (1) advance the objectives set forth in 18 U.S.C. §3553(a)(2); (2) are authorized by 18 U.S.C. §3553(b); and (3) are justified by the facts of the case. ⁴⁶ A district court's reasons supporting its choice of a sentence must be included, with some specificity, in its written order of judgment or commitment under 18 U.S.C. §3553(c). ⁴⁷

At Saul's sentencing hearing, the district court orally explained its reasons for departing as the harm done by the defendant, his disrespect for the law, the fear he caused, and the number of times that he committed the crime. The court went on to say that Saul was "involved in legal processes in which he caused the stop of those legal processes, not just on one occasion, but on 13 separate occasions." In contrast, the court's written statement of reasons said only that it upwardly departed because the Sentencing Commission had not adequately addressed the harm caused when the offense occurs on multiple counts, and because Saul, by his conduct, caused "legal stoppage." ⁴⁸

Saul argues that a district court may not upwardly depart based on the number of counts of conviction, because the Guidelines specify a method for calculating an offense level for defendants convicted on several counts related to similar activity. ⁴⁹ He cites United States v. Miller, in which we held that "[t]he mere fact that defendant's commission of crimes in separate jurisdictions exposed him to separate prosecutions (and thus possibly a longer sentence) is not, in our view, a sufficient reason for a departure." ⁵⁰

Although, in Chapters 3 and 5, the Sentencing Guidelines do address how district courts should sentence defendants convicted for multiple counts, the comments to U.S.S.G. §3D1.4 also make clear that district courts may depart from those requirements in unusual circumstances: "Situations in which there will be inadequate scope for ensuring appropriate additional punishment for the additional crimes are likely to be unusual and can be handled by departure from the guidelines." Further, the Guidelines' Policy Statement explains the multiple counts grouping requirement as necessary to prevent arbitrary casting of a single transaction into several counts to produce a longer sentence: A defendant who engages in conduct or a single course of conduct that causes several harms does not necessarily merit punishment proportionately increased with each additional harm. ⁵¹ The Policy Statement describes two situations in which grouping is appropriate and describes how the offense level may be fairly calculated: "(1) when the conduct involves fungible items ( e.g., separate drug transactions or thefts of money), the amounts are added and the guidelines apply to the total amount; (2) when nonfungible harms are involved, the offense level for the most serious count is increased (according to a diminishing scale) to reflect the existence of other counts of conviction." ⁵²

In the ordinary case, a district court may adjust an offense level upward under U.S.S.G. §§3D1.3 and 3D1.4 for multiple count convictions, to account for the greater harm; however, no such adjustment was available in this case. ⁵³ An upward departure based on multiple counts in this case does not, moreover, subvert the Guidelines' policy reasons for the grouping rules, as such a result does not "arbitrarily" cast a single transaction into several counts. When a defendant like Saul has been convicted of as many as thirteen separate counts, and the grouping rules of the Guidelines do not permit for any sort of enhancement in a defendant's punishment based on the harm or number of counts included, it is permissible for a district court to depart upwardly on this basis. ⁵⁴

Saul also argues that the Guidelines have already taken into account the possibility that filing false tax forms could cause aggravation and harm. U.S.S.G. §2T1.1 --the section that contains the base offense level for §7212 and under which Saul was sentenced --is primarily concerned with tax evasion. It relies on the loss or intended loss caused by a defendant's conduct to establish the true base offense level to reflect the amount of harm. ⁵⁵ U.S.S.G. §2T1.1 plainly does not account for harm caused by a tax protestor who not only impedes the IRS's ability to function but also uses the IRS as an "attack dog" to harass other individuals; neither does it anticipate that the tax protestor will file false forms in an attempt to stop legal proceedings against him. ⁵⁶ Saul's victims suffered a greater degree of harm than is typically involved in a false tax form case, so this factor was an appropriate one for the sentencer to consider under §5K2.0.

We conclude that the district court's orally stated reasons for upwardly departing were acceptable, as they address §3553(a)'s directive to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense and represent aggravating circumstances that take Saul's conviction "out of the heartland" of §2T1.1. The district court properly relied on evidence presented at trial and in the PSR in making its factual determinations, namely, the number of counts and the fact that Saul's behavior caused greater aggravation and harm than the typical defendant sentenced under U.S.S.G. §2T1.1, were not clearly erroneous. ⁵⁷

We still must determine, however, whether the degree or extent of the departure or the sentence as a whole was unreasonable. ⁵⁸ The district court did not rely on any impermissible factors in making its decision to depart upwardly, and we have held that, in such cases, we owe great deference to the sentence imposed by the district court. ⁵⁹ The Supreme Court instructs us to measure the reasonableness of a sentence against the policy and justifications for the Guidelines as set forth in 18 U.S.C. §3553(a). ⁶⁰ It also likened our post- Booker reasonableness inquiry to the standard of review for upward departures that existed before enactment of the PROTECT Act in 2003. ⁶¹ To that end, we evaluate Saul's sentence, including his upward departure, for conformity with the factors listed in 18 U.S.C. §3553(a) and in accordance with our pre-2003 case law in which we evaluated the reasonableness of upward departures.

At the outset, we note that, by running four six-month sentences consecutively, the district court quadrupled the maximum sentence allowable for Saul under the Guidelines, the equivalent of a seven-level departure. "While the mere fact that a departure sentence exceeds by several times the guideline maximum is of no independent consequence in determining whether the sentence is reasonable, it may indicate the unreasonableness of the departure viewed against the court's justification for that departure." ⁶² Even though, in this case, we concur with the district court's decision to depart above the Guidelines, we conclude that the extent of that departure approaches the outer boundary of reasonableness.

First, the degree of departure appears to overstate the harm produced by Saul's acts. Several victims testified that they were inconvenienced by receipt of these forms, and some feared an audit by the IRS, yet none testified to experiencing any significant disruption to their daily lives or to having any audits actually initiated. ⁶³ As for the harm done to the IRS, i.e., having to investigate the accusations contained in the false forms sent by Saul, no evidence suggests that the number of hours spent by the agency on these probes exceeded the amount of time that it would normally spend investigating false forms. Further, Saul sent a total of only twelve forms, affecting a total of only six individuals. Although the number of counts in this case might also have justified a greater sentence, we are not convinced that this number justifies multiplying a sentence to a point four times beyond the maximum under the Guidelines range.

We also note that, even though the district court was required to consider whether "the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct" before upwardly departing, ⁶⁴ it did not do so. ⁶⁵ Saul cites numerous cases in which individuals convicted of sending false tax forms to the IRS under circumstances similar to those in his case, and in many instances sending far more forms and causing more trouble to the IRS and to their victims, received shorter sentences. ⁶⁶

Despite our misgivings about the length of this sentence, however, we are unwilling to hold that it is unreasonable. The sentence does overstate the degree of harm, does not appear to advance the goal of uniformity, and does over-compensate for the number of counts, but each of these was a permissible reason for the district court to depart from the Guidelines' range and, taken together, would likely justify a sentence at least within striking distance of that imposed by the district court. Given the deference we owe to a district court that has properly applied the Guidelines, we decline to hold the degree of the departure unreasonable. We therefore affirm Saul's sentence.

3. Samuel Saldana

a. Sixth Amendment Challenge

It is true that Samuel preserved his Booker challenge to the district court's decision to depart upward by citing Blakely at his sentencing hearing, mandating that we review his challenge for harmless error. ⁶⁷ This case presents one of those rare circumstances, however, in which we hold that a defendant who has preserved Booker error is nonetheless not entitled to vacatur and remand of his sentence on this ground. As we stated in Mares, we will ordinarily vacate a defendant's sentence when (1) he has preserved an objection to a Booker Sixth Amendment violation, and (2) we find error that is not harmless. ⁶⁸ Rule 52(a) of the Federal Rules of Criminal Procedure provides that a harmless error is "any error, defect, irregularity or variance that does not affect substantial rights" and such error "must be disregarded." Stated differently, before vacating a defendant's sentence, we must determine whether such an error is harmless beyond a reasonable doubt. ⁶⁹ Under our harmless error analysis, the government bears the burden of persuading us, beyond a reasonable doubt, that an error did not affect the defendant's substantial rights. ⁷⁰

When the district court departed upwardly under the Guidelines, based on facts not found by a jury or admitted by the defendant, it plainly erred. ⁷¹ Yet in this instance the government has demonstrated that this error is harmless. ⁷² During Samuel's sentencing hearing, the judge stated that, in the event that the Booker decision should hold the federal sentencing guidelines unconstitutional, the court would sentence him to the same amount of imprisonment and supervised release permitted under the substantive statutes. For an error to have affected substantial rights, "it means that the error must have been prejudicial: [i]t must have affected the outcome of the district court proceedings." ⁷³ It is obvious to us that the error committed by the district court in this case did not affect the outcome of the sentencing proceedings, so any error committed by the district court was harmless. ⁷⁴

b. Upward Departure ⁷⁵

The district court sentenced Samuel in the same manner that it sentenced Saul, the only difference being that Samuel's criminal history category was II, ⁷⁶ yielding a greater Guidelines range of four to ten months on the grouped counts. Count one, violation of §7212, carried a statutory maximum of three years imprisonment and one year supervised release; counts two through seventeen, violations of §1001(a)(3), each carried a statutory maximum of five years imprisonment and three years supervised release. As noted above, the district court sentenced Samuel to the statutory maximum of five years imprisonment.

The district court departed upwardly on Samuel's sentence because it found that there were aggravating circumstances of a kind and to a degree that were not adequately considered by the Sentencing Commission. Specifically, the district court explained in its written reasons that Samuel filed the false 8300s as a weapon against numerous public officials for daring to perform their public duties. As noted above, however, the Guideline under which Samuel was sentenced focuses primarily on filing false returns or claiming fraudulent deductions --not on using the IRS as a personal "attack dog." Moreover, the district court found that the Guideline did not adequately take the number of victims into account --in Samuel's case, there were seven. The court emphasized at the sentencing hearing, and confirmed in writing, that Samuel had committed the crime on sixteen separate occasions, and ultimately concluded that without "an adequate sentence, the Defendant will not be deterred and will continue his unlawful activities."

The district court's reasons for its upward departure were acceptable --indeed, deterrence, promoting respect for the law, and the seriousness of the offense were factors that the court was required to consider under 18 U.S.C. §3553(a). And, Samuel does not challenge the validity of the court's reasons for its upward departure. Rather, he contends that the extent of the departure is unreasonable, insisting that his sentence of 60 months' imprisonment is disproportionately long in comparison to sentences imposed in similar cases of defendants using fraudulent IRS forms to harass individuals. ⁷⁷ He also urges that the facts of his case do not support a sentence of five years, which is six times longer than the maximum sentence under the applicable sentencing range on any count of conviction if all are served concurrently.

At the outset, we again acknowledge that the extent of the departure here comes close to the outer limits of reasonableness. First, the degree of the departure overstates the harm done to the victims. Specifically, most victims testified to experiencing only some annoyance and trepidation at the thought of an IRS investigation, and their greatest inconveniences were contacting the IRS or FBI and filling out forms. Second, Samuel's sentence is significantly longer than those imposed in similar "tax protestor" cases. We note, however, that --as in Saul's case --the district court's reasons for upwardly departing are valid and, taken together, clearly justify a sentence of the length of the one actually imposed by the district court. Given the deference we owe to the district court, we will not overturn the extent of the upward departure here as unreasonable.

III. CONCLUSION

We affirm both defendants' convictions: (1) The district court did not err when it instructed the jury on the meaning of "corruptly;" (2) both defendants' convictions are supported by sufficient evidence; and (3) the court did not abuse its discretion when it refused to admit the tax manuals into evidence at Saul's trial, as these manuals were cumulative, confusing, and had little probative value. We also affirm both defendants' sentences: Neither has successfully stated a claim under United States v. Booker, and the district court did not exceed the limits of reasonableness in any aspect of its sentencing methodology. The Saldana brothers' convictions and sentences are, in all respects, AFFIRMED.

¹ See 18 U.S.C. §3553(c).

² The IRS monitors large payments between businesses with 8300 forms; if a filer believes that the payment may not have been reported, he may check a box labeled "suspicious transaction." If the box is checked, a form is sent to the individual named on the form requesting more information. 8300 forms are signed under penalty of perjury.

³ ADM/Growmark River Sys. v. Lowry, 234 F.3d 881, 886 (5th Cir. 2000)

⁴ Russell v. Plano Bank & Trust, 130 F.3d 715, 721 (5th Cir. 1997).

⁵ Id.

⁶ Id.

⁷ Black's Law Dictionary defines "corruptly" as used in criminal-law statutes as "indicates a wrongful desire for pecuniary gain or other advantage." Black's Law Dictionary 371 (8th ed. 2004).

⁸ See United States v. Reeves [ 85-1 USTC ¶9190], 752 F.2d 995, 1001-1002 (5th Cir. 1985) ( "Reeves I").

⁹ [ 86-1 USTC ¶9292], 782 F.2d 1323 (5th Cir.), cert denied, 479 U.S. 837 (1986) ( Reeves II), citing Reeves I [ 85-1 USTC ¶9190], 752 F.2d 995, 1001-02 (5th Cir.), cert. denied, 474 U.S. 834 (1985).

¹⁰ [ 85-1 USTC ¶9190], 752 F.2d 995, 998 (5th Cir. 1985).

¹¹ Reeves I [ 85-1 USTC ¶9190], 752 F.2d at 1000 (emphasis added).

¹² Id. at 1001.

¹³ Id. at 1001-02 (emphasis added).

¹⁴ One of our later opinions has re-stated the Reeves definition of "corruptly" without reference to the tax laws. See United States v. Andersen, 374 F.3d 281, 293-294 (5th Cir. 2004) (defining "corruptly" with respect to 18 U.S.C. §1512(b): "In United States v. Reeves, for example, we defined the term to be an intent to "secure improper benefits or advantages for one's self or for others.").

¹⁵ See e.g., United States v. Kelly [ 98-2 USTC ¶50,501], 147 F.3d 172, 177 (2d Cir. 1998); United States v. Wilson [ 97-2 USTC ¶50,618], 118 F.3d 228, 234 (4th Cir. 1997) ( "We have held that the term 'corruptly,' as used in [ §7212] forbids acts committed with the intent to secure an unlawful benefit either for oneself or for another."); United States v. Winchell [ 97-2 USTC ¶50,890], 129 F.3d 1093, 1098 (10th Cir. 1997) ( "As used in this section, to act corruptly means to act with the intent to secure an unlawful benefit either for oneself or for another."); United States v. Hanson [ 94-1 USTC ¶50,075], 2 F.3d 942, 946 (9th Cir. 1993) (citing Reeves I [ 85-1 USTC ¶9190], 752 F.2d at 998-99); United States v. Popkin [ 91-2 USTC ¶50,496], 943 F.2d 1535, 1540 (11th Cir. 1991) ( "We agree with the definition adopted in Reeves. It comports with our view that 'corruptly' was used in §7212(a), as in the general obstruction of justice statute, to prohibit all activities that seek to thwart the efforts of government officers and employees in executing the laws enacted by Congress.").

¹⁶ [ 92-1 USTC ¶50,167], 953 F.2d 423, 427 (8th Cir. 1992). The Yagow defendant sent fraudulent 1099 and 1096 forms to individuals involved in repossessing much of his property during a bankruptcy action and to individuals involved in a state prosecution against his son for alcohol possession; the defendant also submitted the forms to the IRS. Id. at 425-26.

¹⁷ United States v. Bowman [ 99-1 USTC ¶50,510], 173 F.3d 595, 596-97 (6th Cir. 1999).

¹⁸ Id. at 600.

¹⁹ [ 92-1 USTC ¶50,167], 953 F.2d at 427.

²⁰ See Popkin [ 91-2 USTC ¶50,496], 943 F.2d at 1540.

²¹ Defendants did not actually brief a colorable challenge to the sufficiency of the evidence but only challenged that the evidence did not support that they sought an unfair benefit or advantage under the tax laws --therefore we need not consider this argument on appeal. Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir. 1994) ( "A party who inadequately briefs an issue is considered to have abandoned the claim.") (citing Villanueva v. CNA Ins. Cos., 868 F.2d 684, 687 n. 5 (5th Cir. 1989)).

In any event, in light of our holding that "corruptly" does not include a requirement that the government prove that defendants sought such an advantage under the tax laws, there can be no doubt that defendants' convictions were supported by sufficient evidence, as a rational jury could have found the essential elements of the crime beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 319 (1979).

²² Samuel Saldana did not appeal this issue.

²³ United States v. Powers, 168 F.3d 741, 748 (5th Cir. 1999).

²⁴ Id.

²⁵ United States v. Asibor, 109 F.3d 1023, 1032 (5th Cir. 1997).

²⁶ See Johnson v. United States, 520 U.S. 461, 465-66 (1997).

²⁷ See United States v. Insaulgarat, 378 F.3d 456, 466 (5th Cir. 2004) (holding that, although the defendant argued that police reports would have boosted his credibility by demonstrating that he protested his innocence from the moment of arrest, the defendant himself testified to his statements at the time of his arrest and the police officer did not testify otherwise --thus the evidence was cumulative and the district court did not abuse its discretion by excluding it).

²⁸ See United States v. Flitcraft [ 86-2 USTC ¶9778], 803 F.2d 184, 186 (5th Cir. 1986) (holding that the district court did not abuse its discretion in excluding documents in a similar tax-protester case, in which the defendants claimed to have relied on case law and documents in making their decision not to pay federal income taxes, because the documents were needlessly cumulative and confusing to the jury, as the documents suggested that the law was unsettled).

²⁹ United States v. Cantu, 876 F.2d 1134, 1137 (5th Cir. 1989) (holding that statements made by out-of-court declarant were not hearsay, because the defendant offered them as proof of his own state of mind, not as proof of the truth of the matter asserted).

³⁰ 125 S.Ct. 738 (2005).

³¹ United States v. Mares, 402 F.3d 511, 520 (5th Cir. 2005).

³² See id. at 520 n.9.

³³ United States v. Villegas, 404 F.3d 355, 359 (5th Cir. 2005). See also United States v. Doe, 398 F.3d 1254, 1257 n.5, 1259 (10th Cir. 2005) (reviewing, post- Booker, a district court's legal conclusions in support of its decision not to downwardly depart de novo.).

³⁴ Booker, 125 S.Ct. at 765. Prior to enactment of the Prosecutorial Remedies and Tools Against the Exploitation of Children Today Act (the "PROTECT Act") in 2003, which changed the standard of review for upward departures to de novo, we also reviewed the extent of departures for reasonableness. See id. at 766; United States v. Andrews, 390 F.3d 840, 847 (5th Cir. 2004); United States v. Kay, 83 F.3d 98, 101 (5th Cir. 1996) (reviewing extent of departure for reasonableness).

³⁵ Kay, 83 F.3d at 101.

³⁶ See Mares, 402 F.3d at 520.

³⁷ Id. at 521.

³⁸ Id. In fact, we doubt whether a defendant could ever overcome plain error review of a claimed Booker violation in cases where the district court has upwardly departed. See United States v. Lee, 399 F.3d 864, 867 (7th Cir. 2005) ( "By moving up, the judge evinces not only a belief that discretion exists but also a disposition to exercise it adversely to the accused. Such a judge, knowing that Booker affords yet more latitude, might impose a sentence higher still; knowledge that freedom has increased would not induce the judge to reduce the sentence.").

³⁹ The PSR recommended, and the trial court adopted, a two-level enhancement under U.S.S.G. §3C1.1 n. 4(e) because he willfully failed to appear as ordered for a judicial proceeding, specifically, his trial.

⁴⁰ U.S. Sentencing Guideline §2T1.1 (1998) provides a base offense level for crimes involving tax evasion, willful failure to file returns, supply information or pay tax; or filing fraudulent or false returns, statements, or other documents.

⁴¹ The district court's decision to run sentences on four of Saul's 13 counts of conviction is an upward departure, as Saul's sentence of twenty-four months' imprisonment exceeded his total punishment authorized under the Guidelines, which was six months. A sentence exceeding the total punishment permitted under the Sentencing Guidelines, defined as the defendant's combined base offense level correlated with his appropriate criminal history category, includes an upward departure. United States v. Martinez , 274 F.3d 897, 903-04 (5th Cir. 2001). After it considers the factors listed under 18 U.S.C. §3553(a), a district court has discretion under 18 U.S.C. §3584 to depart upwardly by running sentences consecutively, even when U.S.S.G. §5G1.2 would otherwise mandate that the sentences run concurrently. See United States v. Candelario-Cajero, 134 F.3d 1246, 1249 (5th Cir. 1998). Section 3553(a) requires consideration of, inter alia, the nature and circumstances of the offense and the history and characteristics of the defendant; the need for the sentence to reflect the seriousness of the offense, promote respect for the law, and provide just punishment; the kinds of sentences and sentence ranges available under the guidelines; the Sentencing Guidelines' policy statements; and the need to avoid unwanted sentence disparities among defendants with similar records found guilty of similar conduct.

⁴² 18 U.S.C. §3553(b), excised by Booker, 125 S.Ct. at 764; Koon v. United States, 518 U.S. 81, 95-96 (1996); U.S. Sentencing Guideline §5K2.0 (1998 ed).

⁴³ Koon, 518 U.S. at 93 (quoting U.S. Sentencing Guidelines Ch. 1 Pt. A(4), The Guideline's Resolution of Major Issues (1998)). See also United States v. Winters, 174 F.3d 478, 482 (5th Cir. 1999) ( "The Guidelines Manual explains that it intends each guideline to create a heartland of typical cases" and departure is appropriate only if conduct in a given case differs significantly from the norm and such that the crime is "outside this heartland.").

⁴⁴ Koon, 518 U.S. at 96.

⁴⁵ Booker, 125 S.Ct. at 767; Mares, 402 F.3d at 519.

⁴⁶ 18 U.S.C. §3742(j)(1). Although Booker excised §3553(b), the directive to consider the heartland of an offense and enumerate particular reasons for a departure from the sentencing range lives on in U.S. Sentencing Guideline §5K2.0 and, implicitly, in §3553(a)'s requirement that the court consider the guidelines and the appropriate sentencing range and §3553(c)'s requirement that the court enumerate reasons for sentencing without the range.

⁴⁷ Mares, 402 F.3d at 519 n.8.

⁴⁸ We have expressed doubt whether, under 18 U.S.C. §3742, we could consider a district court's spoken reasons for making an upward departure when they differ from the court's written reasons, at least with respect to the reasonableness of the extent of the departure. United States v. Andrews, 390 F.3d 840, 847 (5th Cir. 2004). Booker excised subsection (e) of §3742, however, the requirement that a district court write down its reason for imposing a departure from the guidelines range remains binding. 18 U.S.C. §3553(c). In this case, the district court's written reasons for its departure, though terse, do not contradict its spoken reasons.

⁴⁹ See U.S. Sentencing Guidelines §3(D), intro., which provides that "convictions on multiple counts do not result in a sentence enhancement unless they represent additional conduct not otherwise accounted for by the guidelines."

⁵⁰ See 903 F.2d 341, 350-51 (5th Cir. 1990).

⁵¹ U.S. Sentencing Guidelines Ch. 1 P. A(4) (1998).

⁵² Id.

⁵³ U.S.S.G. §3D1.3(b), applicable to counts grouped together pursuant to §3D1.2(d), which includes counts of conviction under §2T1.1, provides that the offense level corresponds to the aggregated quantity determined in accordance with Chapter 2 (which includes aggregation for the amount of loss caused by the defendant) and Chapter 3 (which permits adjustments for a number of reasons that do not apply in this case). U.S. Sentencing Guideline §3D1.3(b)(1998).

⁵⁴ In fact, the Sixth Circuit has affirmed a district court's decision to depart upwardly based on the number of false 8300 forms filed by defendants in a case very similar to the instant one, in which the defendants had been convicted of sending approximately a dozen forms each to the IRS and government officials. United States v. Anderson, 353 F.3d 490, 509 (6th Cir. 2003).

⁵⁵ See U.S. Sentencing Guidelines §2T1.1, Background, 1998 ed. ( "This guideline relies most heavily on the amount of loss that was the object of the offense.")

⁵⁶ See United States v. Heckman, 30 F.3d 738, 741-42 (6th Cir. 1994) (upholding upward departure after defendant was sentenced in conformity with U.S.S.G. §2T1.3 (later consolidated with §2T1.1), which contemplated tax evasion, because the defendant also attempted to impede the IRS in its collection of revenue from other taxpayers and its measurement of taxpayer compliance, and to harass individuals whose accounts the IRS scrutinized).

⁵⁷ See United States v. Lara, 975 F.2d 1120, 1124 (5th Cir. 1992) ( "A sentencing court may rely upon relevant information contained in the PSI [Pre-Sentence Investigation Report] in fashioning its upward departure.") (citation omitted).

⁵⁸ Booker v. United States, 125 S.Ct. 738, 765 (2005); United States v. Kay, 83 F.3d 98, 101 (5th Cir. 1996).

⁵⁹ Mares, 402 F.3d at 520 ( "If the sentencing judge follows the principles set forth above, commits no legal error in the procedure followed in arriving at the sentence, and gives appropriate reasons for her sentence, we will give great deference to that sentence.").

⁶⁰ Booker, 125 S.Ct. at 765-66.

⁶¹ Id. at 765.

⁶² United States v. Campbell, 878 F.2d 164, 166 (5th Cir. 1989) (citation omitted).

⁶³ In comparison, when the Sixth Circuit approved a district court's upward departure on a defendant's sentence after the defendant filed false 1096 and 1099 forms for the purpose of harassing other individuals, as well as an outrageous refund claim for himself, the aggravation caused to the individuals was far worse. United States v. Heckman, 30 F.3d 738, 741-42 (6th Cir. 1994). For example, victims testified that the defendant had demanded payment from them based on false deeds of trust and other liens against their property and that they had been forced to hire lawyers or accountants to defend themselves against the IRS; additionally, the defendant had sent the victims harassing letters. Id. at 742.

⁶⁴ 18 U.S.C. §3553(a)(6).

⁶⁵ See also 28 U.S.C. §991(b)(1)(B) (stating that one purpose of the U.S. Sentencing Commission is to avoid unwarranted sentencing disparities among defendants with similar records found guilty of similar criminal conduct).

⁶⁶ See, e.g., United States v. Yagow [ 92-1 USTC ¶50,167], 953 F.2d 423 (8th Cir. 1992) (sentencing the defendant to six months' imprisonment for sending 180 false 1099 forms to more than 100 individuals and institutions); United States v. Kuball [ 92-2 USTC ¶50,501], 976 F.2d 529, 530 (9th Cir. 1992) (sentencing the defendant to six months' imprisonment for filing false 1099 information returns to eight persons and a false 1040 that fraudulently claimed a refund of over $600,000); United States v. Citrowske [ 92-1 USTC ¶50,014], 951 F.2d 899, 900 (8th Cir. 1991) (sentencing the defendant to four months' imprisonment for filing more than fifty false 1099 tax return forms).

⁶⁷ After the trial court had sentenced Samuel, his attorney stated: "I just need to make sure for purposes of the record that the Court is taking recognition of Mr. Saldana's objection to the departure under the guidelines under the reliance on Blakely." Although this objection is less than crystal clear, we hold that a defendant's invocation of Blakely without further explanation is sufficient to preserve Booker error on appeal. See United States v. Dowling, 403 F.3d 1242, 1245-47 (11th Cir. 2005) (holding that, in order to preserve a Booker objection, a defendant must make a "constitutional" objection at sentencing, which may include citing Apprendi, the Sixth Amendment, or the defendant's right to have facts found by a jury instead of a judge).

⁶⁸ Mares, 402 F.3d at 520 n.9.

⁶⁹ Neder v. United States [ 99-1 USTC ¶50,586], 527 U.S. 1, 15 (1999).

⁷⁰ Id.; United States v. Olano, 507 U.S. 725, 734 (1993) (noting that, unlike harmless error analysis, in which the government bears the burden of showing no prejudice to the defendant's rights, plain error analysis places this burden on the defendant); United States v. Wheeler, 322 F.3d 823, 828 (5th Cir. 2003) ( "Unlike the harmless error analysis, it is the defendant rather than the Government who bears the burden of persuasion with respect to prejudice.") (citing Olano, 507 U.S. at 734).

⁷¹ See Mares, 402 F.3d at 520-21.

⁷² Neither party included any arguments or specifics relating to this Booker issue in their briefs, as Booker had not yet been decided at the time of this appeal. Instead, Samuel stated merely that he wished to preserve any arguments he might make challenging the Guidelines under Blakely v. Washington, 124 S. Ct. 2531 (2004), and the government noted that such arguments were foreclosed by our decision in United States v. Pineiro, 377 F.3d 464 (5th Cir. 2004), vacated and remanded by Pineiro v. United States, 125 S.Ct. 1003 (2005). At oral argument, however, the government argued that any Booker error was harmless for the reasons that we adopt in this opinion.

⁷³ United States v. Olano, 507 U.S. 725, 734 (1993).

⁷⁴ See United States v. Thompson, 403 F.3d 533, 535-36 (8th Cir. 2005) (holding any Booker error to be harmless because the district court expressly sentenced the defendant to an alternate, statutory-based sentence in the event that Booker ruled the Guidelines unconstitutional).

⁷⁵ We will not repeat our discussion of the upward departure analysis here.

⁷⁶ Samuel also failed to appear for jury selection at his trial and received a two-level enhancement for obstruction of justice under U.S.S.G §3C1.1 n.4(e) (1998).

⁷⁷ See, infra note 64. See also United States v. Bowman [ 99-1 USTC ¶50,510], 173 F.3d 595, 596-97 (6th Cir. 1999) (upholding defendant's sentence of thirty-three months' imprisonment for sending 59 fraudulent 1099 and 1096 forms to individuals, institutions, and the IRS in retaliation for suits, foreclosures, and other judgments brought against him); United States v. Heckman, 30 F.3d 738, 743 (6th Cir. 1994) (upholding twenty-four month sentence, including a fourteen-month upward departure, when defendant filed at least seventy-nine false 1099 Forms in an attempt to harass victims, demanded payment from victims for false liens he had filed against their property, and caused the victims to hire attorneys and accountants to defend themselves against the IRS); United States v. Hanson [ 94-1 USTC ¶50,075], 2 F.3d 942, 944-46 (9th Cir. 1993) (vacating and remanding defendant's 12-month sentence for filing four false 1096 and 1099 forms claiming that he had received $46,996,669.41 from three FHA officials and $31,331,112.94 from two other FHA employees because the proper Guidelines range was one to six months, not twelve months); United States v. Parsons [ 92-2 USTC ¶50,442], 967 F.2d 452, 453 (10th Cir. 1992) (noting that defendant who had filed thirteen false 1099 forms and made demands to recipients that they pay him the amounts specified in the forms had received six months' incarceration).