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7212- Interference with Administration of Internal Revenue Laws: Jury Instructions

 

[97-1 USTC ¶50,398] United States of America, Plaintiff-Appellee v. Johnny Swanson III, Defendant-Appellant

(CA-4), U.S. Court of Appeals, 4th Circuit, 96-4213, 5/5/97 , Affirming an unreported District Court decision

[Code Secs. 6531 , 7206 and 7212 ]

Criminal prosecution: Interference with administration: Filing false returns: Limitations period: Multiplicitous indictment: Jury instructions: District Court findings.--An individual was properly convicted of corruptly endeavoring to obstruct and impede the due administration of the tax laws and of filing false employment tax returns. The statute of limitations began to run when the false returns were filed, not when the individual signed them. A six-year limitations period applied to the obstruction charge, and the individual's offense was not completed until a date that fell within that period. Thus, his prosecution was not time barred. In addition, his indictment was not multiplicitous and it presented no double jeopardy problems because each offense required proof of facts that the other did not. Jury instructions regarding the definition of "corruptly" were not plainly erroneous, and there was no clear error in the trial court's determination of the tax loss caused by the individual for sentencing purposes.

Helen F. Fahey, United States Attorney, David Glenn Barger, Assistant United States Attorney, Scott W. Putney, Special United States Attorney, Alexandria, Va. 22314, for plaintiff-appellee. Michael S. Lieberman, Andrew R. Gordon, DiMuro, Ginsberg & Lieberman, P.C., 908 King St., Alexandria, Va. 22314, for defendant-appellant.

Before: WILKINSON, Chief Judge, MICHAEL and MOTZ, Circuit Judges.

è Caution: This court has designated this opinion as NOT FOR PUBLICATION. Consult the Rules of the Court before citing this case.ç

OPINION

PER CURIAM:

A"EC JURY CONVICTED JOHNNY SWANSON, III, OF ONE COUNT OF CORRUPTLY ENDEAVORING TO OBSTRUCT AND IMPEDE THE DUE ADMINISTRATION OF INTERNAL REVENUE LAWS, IN VIOLATION OF 26 U.S.C. §7212(A) (1994), AND FOUR COUNTS OF FILING FALSE 1988 EMPLOYMENT TAX RETURNS, IN VIOLATION OF 26 U.S.C. §7206(1) (1994). THE DISTRICT COURT ORDERED THE PREPARATION OF A PRESENTENCE REPORT, WHICH INDICATED THAT SWANSON WAS RESPONSIBLE FOR TAX LOSSES IN EXCESS OF $5.4 MILLION AND SUGGESTED A GUIDELINE RANGE OF 51 TO 63 MONTHS. THE DISTRICT COURT SENTENCED SWANSON TO 60 MONTHS IMPRISONMENT AND THREE YEARS SUPERVISED RELEASE. SWANSON APPEALS, CHALLENGING HIS CONVICTIONS AND SENTENCES. FINDING NO REVERSIBLE ERROR, WE AFFIRM.

I.

Swanson's initial and principal challenge is that the applicable statute of limitations barred prosecution of all counts. Swanson presents separate arguments concerning Counts Two through Five and Count One. We address these contentions in order. ¹

A.

Counts Two through Five allege that Swanson made, signed, and filed four false Employer's Quarterly Federal Tax Returns in violation of 26 U.S.C. §7206(1). The parties agree that §7206(1) is governed by a six-year statute of limitations. See 26 U.S.C. §6531.

Swanson claims that the statute of limitations began to run when he prepared and signed the 1988 tax forms--June 28, 1989. The Government argues that the statute did not begin to run until the forms were filed--October and November 1990. This is a question of law that we review de novo.

Section 7206 provides:

Any person who--

(1) Declaration under penalties of perjury

Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter . . .

. . .

shall be guilty of a felony . . . .

26 U.S.C. §7206. The statute itself does not require the filing of a return, only willful making and subscribing under the penalty of per-jury. Swanson argues that the statute is therefore violated at the time of signing, and that the statute of limitations begins to run at that time.

Every court to confront the question has held to the contrary. Some have concluded that "[a] violation of 26 U.S.C. §7206(1) is complete when a taxpayer files a return . . . ." United States v. Marashi [90-2 USTC ¶50,482], 913 F.2d 724, 736 (9th Cir. 1990); see also United States v. Habig [68-1 USTC ¶9243], 390 U.S. 222, 223 (1968) ("The offenses involved in Counts 4 [violation of §7201] and 6 [violation of §7206(2)] are committed at the time the return is filed."). Others have reasoned that in order to "make" a return, as required by §7206(1), the return must be filed. See United States v. Gilkey [73-2 USTC ¶9779], 362 F. Supp. 1069, 1071 (E.D. Pa. 1973); United States v. Horwitz [66-1 USTC ¶9112], 247 F. Supp. 412, 413-14 (N.D. Ill. 1965); see also United States v. Aramony, 88 F.3d 1369, 1382 (4th Cir. 1996) (listing "ma[king] and subscrib[ing]" as an element of a §7206(1) offense).

We agree with these courts. Whether filing is viewed as a separate implicit, but necessary, element of a §7206(1) offense or as incorporated in the statutory "making" requirement, there can be no §7206(1) offense without filing. "Were it otherwise, the individual making the return could substantially shorten the length of the statutory period by subscribing the return months before it was filed and then retain it so the statute of limitations would be running long before the government had any notice of the offense." Horwitz [66-1 USTC ¶9112], 247 F. Supp. at 414-15. Furthermore, if the signing alone were illegal,"a person [could] be prosecuted for (1) signing a return he never intends to file, or (2) signing a false return but then changing his mind about breaking the law and sending in a correct return instead." Gilkey [73-2 USTC ¶9779], 362 F. Supp. at 1071.

B.

Swanson's remaining limitations claim involves his conviction under Count One for "corruptly endeavor[ing] to obstruct and impede the due administration of the internal revenue laws" in violation of 26 U.S.C. §7212(a).

First, Swanson asserts that the length of the statute of limitations governing §7212(a) is three years while the Government maintains it is six years. The Internal Revenue Code provides a six-year period "for the offense described in section 7212(a) (relating to intimidation of officers and employees of the United States )." 26 U.S.C. §6531(6) (1994). Swanson argues that this parenthetical limits the reach of §6531(6) to violations that include "intimidation of officers and employees of the United States ." The Government counters that the parenthetical is descriptive and explains what §7212(a) is, but does not mean that only "intimidation" prosecutions under §7212(a) enjoy the six-year limitation period. We agree with the Government. As the Ninth Circuit recently concluded after examining the structure of §6531, "the parenthetical language in §6531(6) is descriptive, not limiting." United States v. Workinger [96-2 USTC ¶50,402], 90 F.3d 1409, 1414 (9th Cir. 1996); see also United States v. Brennick, 908 F. Supp. 1004, 1017-18 (D. Mass. 1995).

Alternatively, Swanson argues that, even if the limitations period is six years, his indictment and the evidence at his trial rested on acts that occurred more than six years prior to his October 11, 1995 indictment, i.e., prior to October 11, 1989 . The indictment includes the following facts that occurred before October 11, 1989 : (1) Swanson changed the name of his business in July 1984 and December 1986 to get new employer identification numbers to avoid paying back taxes; (2) on or about April 13, 1988 , Swanson lied to the IRS about whether the Swanson Group had employees and whether it had been sold; (3) on or about July 26, 1989 , Swanson prepared false income tax returns for the years 1987 and 1988 for the Swanson Group; (4) on or about August 21, 1989 , Swanson prepared false Employer's Quarterly Federal Tax Returns for 1987; and (5) sometime after June 28, 1989 , Swanson prepared the false 1988 returns.

However, the indictment also alleges one crucial fact that did occur during the limitation period: On or about November 29, 1990 , Swanson filed the false 1988 returns. Additionally, the indictment notes that at some time prior to March 2, 1994 , Swanson falsely stated that he had mailed and filed some of the 1987 and 1988 tax returns; he also created and submitted falsified documents purporting to be copies of those returns. The indictment further states that between 1987 and the filing date of the indictment (October, 1995) Swanson had destroyed the payroll records for 1987 and 1988. This conduct could have occurred either before or after limitations ran or during both periods.

"[T]he purpose of the criminal statute of limitations is to protect individuals from having to defend conduct of the 'far-distant past.' " United States v. Blizzard, 27 F.3d 100, 102 (4th Cir. 1994) (quoting Toussie v. United States, 397 U.S. 112, 115 (1970)). For this reason, " 'criminal limitations statutes are to be liberally interpreted in favor of repose.' " Id. However, "[s]tatutes of limitations normally begin to run when the crime is complete." Toussie, 397 U.S. at 115 (citing Pendergast v. United States, 317 U.S. 412, 418 (1943)) (alteration in original); see also Blizzard, 27 F.3d at 102 ("[A] statute of limitations normally will begin to run when the crime is complete.").

Because Swanson's offense under §7212(a) was not completed until he filed his 1988 returns--in November, 1990--well within the limitations period, we reject his claim that his prosecution was barred by the statute of limitations. See United States v. Ferris [86-2 USTC ¶9844], 807 F.2d 269, 271 (1st Cir. 1986) (finding that for the similar violation of tax evasion under 26 U.S.C. §7201, "it is the date of the latest act of evasion . . . that triggers the statute of limitations."); see also United States v. DiPetto [91-2 USTC ¶50,407], 936 F.2d 96, 98 (2d Cir. 1991) (concluding that "a section 7201 prosecution involving the failure to file income taxes is timely if commenced within six years of the day of the last act of evasion."); United States v. Williams [91-1 USTC ¶50,197], 928 F.2d 145, 149 (5th Cir. 1991) (same).

II.

Swanson next asserts that Count One was multiplicitous with Counts Two through Five. We have defined multiplicity as "the charging of a single offense in several counts. [1 Charles A. Wright, Federal Practice & Procedure §142, at 469 (2d ed. 1982).] The signal danger in multiplicitous indictments is that the defendant may be given multiple sentences for the same offense . . . ." United States v. Burns, 990 F.2d 1426, 1438 (4th Cir. 1993). Absent clearly contrary legislative intent, " 'where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one, is whether each provision requires proof of a fact which the other does not.' " United States v. Allen, 13 F.3d 105, 108 (4th Cir. 1993) (citing Blockburger v. United States, 284 U.S. 299, 304 (1932)).

Under this test, Swanson's conviction under §7212(a) was not multiplicitous with his convictions under §7206(1). The elements of a §7206(1) violation are: "(1) the defendant made and subscribed [which includes filing] to a tax return containing a written declaration; (2) the tax return was made under penalties of perjury; (3) the defendant did not believe the return to be true and correct as to every material matter; and (4) the defendant acted willfully." Aramony, 88 F.3d at 1382. In contrast, the elements of a §7212(a) violation are that the defendant: (1) corruptly, (2) endeavored, (3) to obstruct or impede the administration of the Internal Revenue Code. See 26 U.S.C. §7212(a); United States v. Williams [81-1 USTC ¶9268], 644 F.2d 696, 699 (8th Cir. 1981).

Obviously, each of these offenses requires proof of facts that the other does not. ² Accordingly, the indictment is not multiplicitous and presents no possible Double Jeopardy problem.

III.

Swanson also claims that the district court improperly instructed the jury on the definition of "corruptly" under §7212(a). Swanson did not object to the instruction at trial, and we therefore review for plain error. See Fed. R. Crim. P. 52(b). Read as a whole the court's instructions were not plainly erroneous. Indeed, the court correctly defined "corruptly." See United States v. Mitchell [93-1 USTC ¶50,171], 985 F.2d 1275, 1278 (4th Cir. 1993).

IV.

Finally, Swanson argues that the district court overstated the tax "loss" he caused for sentencing purposes. This is a factual finding, which we review for clear error. United States v. Williams, 977 F.2d 866, 869 (4th Cir. 1992). There was no clear error here. The district court adopted the findings in the pre-sentence report that Swanson caused a tax loss of almost $5.5 million. The calculations in the report do not appear to be faulty and the district court was entitled to rely on them. See United States v. Terry, 916 F.2d 157, 160-162 (4th Cir. 1990). Indeed, as the Government pointed out at sentencing, Swanson also evaded payment of corporate taxes and failed to pay taxes on embezzled income and none of these amounts were included in the loss calculation. In view of this, the district court properly noted that the pre-sentence report's loss figure "is probably a conservative estimate." Accordingly, the district court did not err in sentencing Swanson based on a loss of almost $5.5 million.

V.

For the foregoing reasons, Swanson's convictions and sentences are hereby

AFFIRMED.

¹ The Government argues that Swanson has waived his limitations defenses because he did not attempt to present them to the jury. Swanson did, however, file a pre-trial motion to dismiss based on the statute of limitations and raised the limitations defense again immediately before trial and at the close of the Government's case. Accordingly, we refuse to find Swanson has waived these claims.

² Swanson's claim that "willfully" and "corruptly" constitute the same element is meritless. "Willfulness" is a "voluntary, intentional violation of a known legal duty." Cheek v. United States [91-1 USTC ¶50,232], 498 U.S. 192, 201 (1991). " 'Corruptly,' " by contrast, " 'describes an act done with an intent to give some advantage inconsistent with the official duty and rights of others' . . .. Misrepresentation and fraud. . . are paradigm examples of activities done with an intent to gain an improper benefit or advantage." United States v. Mitchell [93-1 USTC ¶50,171], 985 F.2d 1275, 1278 (4th Cir. 1993) (citing United States v. Reeves [85-1 USTC ¶9190], 752 F.2d 995, 998 (5th Cir. 1985)).

 

 

 

 

[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).

 

 

 

 

[98-2 USTC ¶50,501] United States of America, Appellee v. Richard H. Kelly, Defendant-Appellant

(CA-2), U.S. Court of Appeals, 2nd Circuit, 97-1307, 6/18/98 , 147 F3d 172, 147 F3d 172. Affirming an unreported District Court decision

[Code Sec. 7212 ]

Penalties, criminal: Interference with administration: Evidence: Jury instructions: Statute of limitations: Constitutionality.--A financial consultant and attorney was properly convicted of endeavoring to obstruct and impede the due administration of the Internal Revenue laws arising in connection with his sham assignment of income to his financial consulting business. Since he corruptly deducted advances received by a former employer from his gross income and never transferred the advances to the business, force or threat of force did not have to be proven. Moreover, the taxpayer's delivery of the sham assignment agreement to the investigating IRS agent was designed to impede disclosure of a tax evasion scheme that had already been effected. Accordingly, his actions were accurately characterized as obstruction rather than evasion. In addition, the taxpayer's constitutional claims of overbreadth and vagueness were rejected as meritless; his contention that "willfulness" was a necessary element of the offense was rejected since the jury instructions were comprehensive and accurate; and his contention that the statute of limitations barred his prosecution was deemed waived since it was not raised in the trial court. Nevertheless, the court concluded that the trial court's selection of the six-year limitation period did not constitute plain error.
[Code Sec. 7212 ]

Penalties, criminal: Sentence: Enhancements.--The enhancement of an attorney's sentence based on the tax loss resulting from his criminal activities, his legal expertise, and perjured testimony was not clearly erroneous.

Loretta C. Argrett, Assistant Attorney General, Zachary W. Carter, United States Attorney, Meghan S. Skelton, Alan Hechtkopf, Robert E. Lindsay, Department of Justice, Washington, D.C. 20530, for appellee. Stuart E. Abrams, Frankel, Sandor, P.C., 230 Park Ave., New York, N.Y. 10169, for defendant-appellant.

Before: VAN GRAAFEILAND, JACOBS and LAY, ^* Circuit Judges.

VAN GRAAFEILAND, Circuit Judge:

Richard H. Kelly appeals from a judgment of the United States District Court for the Eastern District of New York (Hurley, J.) convicting him of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, in violation of 26 U.S.C. §7212(a). The district court sentenced Kelly to eighteen months in prison. We affirm.

From 1984 to 1988, Kelly, an experienced attorney and businessman, served as vice-president and general counsel of Intercontinental Monetary Corporation ("IMC"), a financial services company. Kelly left IMC in 1988 and, with an associate, organized a financial consulting business called D.M. Condor & Company, Inc. Prior to his departure, Kelly executed an agreement under which he agreed to provide consulting services to IMC from June 1, 1988 to June 30, 1990 . In return, IMC agreed to pay him a consulting fee of $244,200.

The agreement specified that IMC would pay Kelly in two equal installments of $122,100, the first of which would cover services rendered from June 1, 1988 to June 30, 1989 , and the second of which would cover services rendered from July 1, 1989 to June 30, 1990 . In fact, however, IMC paid Kelly his entire fee before the beginning of the prescribed period of service, issuing him checks on November 5, 1987 , February 16, 1988 , and March 9, 1988 . The parties agreed that these payments would be treated as advances on Kelly's fee and that IMC would consider the fee "earned" as of the dates specified in the original agreement.

Thereafter, in 1988, Kelly agreed with his associate to assign to Condor all of his rights and obligations under the IMC agreement. In a letter dated December 28, 1989 , Kelly informed IMC of the agreement and requested that IMC issue to Condor any tax reporting forms stemming from the company's payment of Kelly's consulting fee. IMC acknowledged Kelly's request, but refused to honor it. Instead, in early 1990, IMC prepared and sent to Kelly an IRS Form 1099 indicating its payment to him of $122,100 as compensation for services rendered during the 1989 fiscal year.

Kelly filed his 1989 personal income tax return on April 16, 1990 . On Schedule C of the return, Kelly reported as part of his gross receipts the $122,100 he received from IMC but indicated in an accompanying note that he had assigned this income to Condor. Based on this alleged assignment, Kelly deducted the $122,100 from his gross receipts and paid no tax on the IMC income.

In October 1991, Internal Revenue Agent Vincent Marcantonio began an audit of Kelly's 1989 tax return. In the course of this audit, Marcantonio met with Kelly on two occasions. During their first meeting, Kelly provided Marcantonio with copies of the two aforementioned agreements and explained that he had deducted the IMC income from his gross receipts because he had assigned the income to Condor. Kelly also informed Marcantonio that Condor did not file a tax return in 1989. During their second meeting, Kelly reiterated his explanation of his treatment of the IMC income. Contrary to his earlier statements, however, Kelly told Marcantonio that Condor "picked up" the IMC income in 1989, a statement which Marcantonio took to mean that Condor had reported the income to the IRS for tax purposes. Following the second meeting, Marcantonio verified that Condor had not reported the IMC income in 1989. He also determined that Kelly had not transferred any of the IMC income to Condor. Marcantonio concluded that Kelly's deduction of the IMC income was improper and that his purported assignment of that income to Condor was a sham.

Based on Marcantonio's findings, the Government indicted Kelly. In Count One of the indictment, the Government charged Kelly with obstructing the due administration of the revenue laws by providing Marcantonio with a copy of the allegedly false and fraudulent assignment agreement in an effort to substantiate his deduction of the IMC income on his 1989 tax return. In Count Two, the Government charged Kelly with filing a false tax return. The jury convicted Kelly of obstruction, but acquitted him of filing a false return.

At the time Kelly was sentenced, the federal sentencing guidelines did not specify a particular guideline to be used in cases arising under section 7212(a). Over Kelly's objection, the district court applied section 2T1.1 of the guidelines, a section customarily applied in cases of tax evasion. Pursuant to that guideline, the court determined that Kelly's criminal activities resulted in a tax loss of approximately $68,000 (the amount he would have paid had he reported the entire $244,200 he received from IMC as income), warranting a base offense level of eleven. The court then added two levels for each of its findings that Kelly had used special skills to facilitate his crime and that he gave perjured testimony at trial. These findings yielded a potential sentence range of eighteen to twenty-four months. The court sentenced Kelly to the minimum term of eighteen months.

Kelly contends on appeal that he should not have been charged with violating section 7212(a) because Congress intended that statute to proscribe only threatening or harassing conduct directed toward IRS agents. In support of this contention, he asserts that a majority of the cases prosecuted under section 7212(a) have involved threatening or harassing conduct. However, even the complete absence of a reported decision involving similar factual circumstances does not determine per se the proper scope of a particular statute. See United States v. Popkin [91-2 USTC ¶50,496], 943 F.2d 1535, 1539 (11th Cir. 1991) (citing Parr v. United States, 363 U.S. 370, 391 (1960)).

The appropriate starting point for the interpretation of any statute is its language. O'Connell v. Hove, 22 F.3d 463, 468 (2d Cir. 1994). See United States v. Trapilo, 130 F.3d 547, 551 (2d Cir. 1997) (quoting United States v. Wiltberger, 18 U.S. 76, 95-96 (1820) (Marshall, C.J.) ("The intention of the legislature is to be collected from the words they employ. Where there is no ambiguity in the words, there is no room for construction.")).

Section 7212(a) provides in part that any individual who: 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 [be guilty of a felony].

26 U.S.C. §7212(a) (emphasis added). As the emphasized language makes clear, a defendant need not resort to force or the threat of force in order to be convicted of obstruction. Moreover, although the first clause pertains only to conduct directed against a government official, the second or "omnibus" clause is not so limited, and renders criminal "any other" action which serves to obstruct or impede the due administration of the revenue laws. In short, the plain language of section 7212(a) does not support Kelly's narrow interpretation of the statute.

Kelly next contends that the district court's decision to charge him under section 7212(a) violated a policy statement issued by the Tax Division of the Department of Justice. That directive instructs officers of the Department not to utilize the omnibus clause of section 7212(a) "where other more specific charges are available and adequately reflect the gravamen of the offense." Kelly argues that there was a more specific and appropriate charge available to the Government in his case, namely tax evasion under section 7201, and that the Government should have prosecuted him under that statute rather than section 7212(a). We are not persuaded by this contention. As a general rule, "non-compliance with internal departmental guidelines is not, of itself, a ground of which defendants can complain." United States v. Ivic, 700 F.2d 51, 64 (2d Cir. 1983) (citing United States v. Caceres [79-1 USTC ¶9294], 440 U.S. 741 (1979)), rev'd on other grounds, National Org. for Woman, Inc. v. Scheidler, 510 U.S. 249 (1994). Cf. Crandon v. United States, 494 U.S. 152, 177 (1990) (Scalia, J., concurring in judgment). Such guidelines provide no substantive rights to criminal defendants. United States v. Piervinanzi, 23 F.3d 670, 682 (2d Cir. 1994). Moreover, the record does not support Kelly's claim of non-compliance.

Kelly characterizes his actions as "garden variety" tax evasion rather than obstruction. We disagree. Kelly's delivery of the Condor assignment agreement to Marcantonio did more than merely further a tax evasion scheme--it was designed to impede Marcantonio from uncovering a tax evasion scheme that already had been effectuated. It expanded and delayed the progress of Marcantonio's audit and investigation and thus can be characterized accurately as obstruction, rather than evasion.

Kelly suggests the district court's broad interpretation of the statute potentially could run afoul of the constitutional doctrines of overbreadth and vagueness. In support of his position, Kelly cites United States v. Poindexter, 951 F.2d 369, 377-386 (D.C. Cir. 1991), cert. denied, 506 U.S. 1021 (1992), in which the court held, over the strong dissent of Judge Mikva, that use of the term "corrupt" in the more general obstruction-of-proceedings statute, 18 U.S.C. §1505, rendered that statute unconstitutionally vague as applied. However, five other circuits have upheld the constitutionality of section 7212(a) in the face of claims similar to that presently posed by Kelly. These decisions are cited and discussed in the well-reasoned opinion of District Judge Gertner in United States v. Brennick [97-1 USTC ¶50,390], 908 F. Supp. 1004, 1010-13 (D. Mass. 1995). Finding the analyses in these opinions both pertinent and persuasive, we reach the same result.

We also reject Kelly's contention that "willfulness" is a necessary element of section 7212(a) and that the district court should have instructed the jury accordingly. In making this argument, Kelly relies upon Cheek v. United States [91-1 USTC ¶50,012], 498 U.S. 192 (1991), which involved 26 U.S.C. §§7201 and 7203. Unlike section 7212(a), both of these sections specifically require proof of willfulness. There is no single, universal definition of the word "willfully." See, e.g., United States v. Pomponio [76-2 USTC ¶9695], 429 U.S. 10, 12 (1976); United States v. Murdock [3 USTC ¶1194], 290 U.S. 389, 394 (1933), overruled in part by Murphy v. Waterfront Commission of New York Harbor, 378 U.S. 52, 70 (1964). Usually, however, the varying definitions contain certain common general elements. When, as here, a court properly instructs a jury concerning these elements, it need not usurp the function of Congress by inserting the term "willfully" in a statute where Congress saw fit to omit it.

The key words in section 7212(a) are "corruptly" and "endeavors." See United States v. Cioffi, 493 F.2d 1111, 1118-19 (2d Cir. 1974) (analyzing similar language in Obstruction of Justice Act, 18 U.S.C. §1503). The district court instructed the jury that

To act corruptly is to act with the intent to secure an unlawful advantage or benefit either for one's self or for another.

This is a well-accepted definition of the term "corruptly" when used in this context. See United States v. Hanson [94-1 USTC ¶50,075], 2 F.3d 942, 946-47 (9th Cir. 1993) and cases cited therein; see also BLACK'S LAW DICTIONARY 414 (4th ed. rev. 1968).

The district court then defined "endeavors" as follows:

It means to knowingly and intentionally act or to knowingly and intentionally make any effort which has a reasonable tendency to bring about the desired result.

*****

A person acts knowingly if he acts intentionally and voluntarily and not because of ignorance, mistake, accident or carelessness.

*****

Before you can find that the defendant acted intentionally, you must be satisfied beyond a reasonable doubt that the defendant acted deliberately and purposefully, that is, defendant's acts must have been the product of the defendant's conscious objective rather than the product of mistake or accident.

The district court's definition of the proof required for the section 7212(a) violation was as comprehensive and accurate as if the word "willfully" was incorporated in the statute. See United States v. Barfield, 999 F.2d 1520, 1524-25 (11th Cir. 1993) (quoting United States v. Haas, 583 F.2d 216, 220 (5th Cir. 1978), cert. denied, 440 U.S. 981 (1979)); United States v. McLennan, 672 F.2d 239, 243 (1st Cir. 1982). We are reluctant, therefore, to add the word "willfully" to section 7212(a), where Congress has seen fit to omit it. Cf. Piervinanzi, supra, 23 F.3d at 680.

Moreover, in view of the district court's correct charge concerning corrupt knowledge and intent, we find no error in the district court's failure to instruct on the irreconcilable theory of good faith.

Kelly contends for the first time on appeal that the Government's prosecution was barred by the statute of limitations. Because Kelly did not raise this claim in district court, we deem it waived. See United States v. Walsh, 700 F.2d 846, 855 (2d Cir.), cert. denied, 464 U.S. 825 (1983); United States v. Arky, 938 F.2d 579, 581-82 (5th Cir. 1991), cert. denied, 503 U.S. 908 (1992). Even if we assume that the plain error standard enunciated in United States v. Olano, 507 U.S. 725 (1993), is applicable to Kelly's limitation defense, we nonetheless hold the defense to be without merit. The periods of limitation for offenses arising under the revenue laws are codified at 26 U.S.C. §6531. For most such offenses, the period of limitation is three years. However, a longer, six-year period of limitation applies to certain offenses listed separately in the statute. Among these is "the offense described in section 7212(a) (relating to intimidation of officers and employees of the United States)." 26 U.S.C. §6531(6). Kelly contends that the parenthetical explanation which follows the reference in section 6531(6) to the obstruction statute reveals that Congress intended for the six-year limitation period to apply only to cases prosecuted under the first clause of section 7212(a), and that cases brought pursuant to the omnibus clause therefore remain subject to the shorter, three-year period. Both parties agree that under the three-year limitations period, Kelly's prosecution would have been barred.

This circuit has yet to determine the appropriate limitation period to be applied to cases brought pursuant to the omnibus clause of section 7212(a). However, at least two other circuits have concluded that the six-year period of limitation applies. See United States v. Wilson, 118 F.3d 228, 236 (4th Cir. 1997); United States v. Workinger [96-2 USTC ¶50,402], 90 F.3d 1409, 1413-14 (9th Cir. 1996). We hold that the district court's well-reasoned and unchallenged selection of the six-year limitation period did not constitute plain error.

Moving on to the matter of his sentence, Kelly contends that the district court erred when it utilized section 2T1.1 of the federal sentencing guidelines to calculate it. Kelly contends that the court should have looked to former section 2T1.5, which prescribed the punishment for filing a fraudulent tax return. At the time of Kelly's sentencing, no specific guideline applied to cases involving convictions under section 7212(a). Generally, when no specific sentencing guideline is designated, the sentencing court must determine a defendant's sentence using the guideline it deems most applicable to the offense of conviction. See U.S.S.G. §1B1.2(a) & comment. (n. 1). Upon review, we are required to give due deference to the sentencing court's choice of guidelines, and may reverse only where we find that choice plainly unreasonable. See United States v. Miller, 116 F.3d 641, 677-78 (2d Cir. 1997). The district court felt that Kelly's conduct involved more than simply filing a fraudulent return. Because this was not an unreasonable determination, we conclude that the district court did not err when it relied on section 2T1.1 to determine Kelly's sentence.

Kelly next challenges the district court's enhancement of his sentence based on its finding that Kelly's criminal activities resulted in a tax loss. Kelly contends that this finding was inconsistent with the jury's verdict acquitting him on the charge of filing a false tax return. We disagree. The fact that Kelly was acquitted of one charge did not preclude the sentencing court from relying on evidence introduced in connection with that charge. See United States v. Watts, 519 U.S. 148, --, 117 S. Ct. 633, 636 (1997) (per curiam); United States v. Rodriguez-Gonzalez, 899 F.2d 177, 180-82 (2d Cir.), cert. denied, 498 U.S. 844 (1990).

Alternatively, Kelly contends that the evidence simply did not support the district court's finding of a tax loss. In support of this argument, Kelly directs our attention to the testimony of his expert tax accountant, who indicated that Kelly's treatment of his assignment to Condor on his tax return was fundamentally correct. In response, the Government contends that while Kelly's professed treatment of the IMC income might have been technically correct, the fact remains that Kelly did not transfer any of the IMC money to Condor, and that neither he nor Condor paid taxes on the income; Kelly, as the recipient of that income, was responsible for paying taxes on it, and his failure to do so resulted in a tax loss for which he properly was held liable.

Kelly next challenges the district court's enhancement of his sentence based on its finding that he utilized a special skill, namely his legal background, to facilitate his commission of obstruction. Kelly insists that he possesses no expertise in the area of tax law; quite to the contrary, he suggests that it was his lack of knowledge regarding the applicable tax laws that led him to commit the acts for which he ultimately was convicted. We are not persuaded. Kelly's obstruction conviction stemmed from his providing Marcantonio the assignment which Kelly himself had prepared. The district court did not err in finding that Kelly thus utilized his skill as a licensed and experienced attorney to facilitate his criminal activity.

Finally, Kelly challenges the district court's two-level enhancement of his sentence pursuant to section 3C1.1 for obstruction of justice by committing perjury during the trial. In order to enhance a defendant's sentence for obstruction of justice in this manner, the sentencing court must determine by clear and convincing evidence that the defendant "gave false testimony concerning a material matter with the willful intent to provide false testimony, rather than as a result of confusion, mistake, or faulty memory." United States v. Walsh, 119 F.3d 115, 121 (2d Cir. 1997) (internal quotations omitted) (quoting United States v. Dunnigan, 507 U.S. 87, 94 (1993)). See also U.S.S.G. §3C1.1 & comment. (n. 1). Moreover, the court must find that the defendant's statements unambiguously demonstrate an intent to obstruct. See United States v. Sisti, 91 F.3d 305, 313 (2d Cir. 1996); see also Walsh, supra, 119 F.3d at 121; United States v. Ruggiero, 100 F.3d 284, 294 (2d Cir. 1996), cert. denied, 118 S. Ct. 1102 (1998). The district judge repeatedly acknowledged his obligations in this respect:

I have to find that the defendant made deliberate or provided false information deliberately to the jury--to the Court on a material matter for the purpose of basically trying to prevent himself from being convicted or for whatever. There's a materiality. I have to make an independent finding. And I think it is appropriate that if the Court does so, that the Court do that with some type of specificity.

I think it would be unfair, if not contrary to Circuit precedent, to give an opinion in a conclusory nature. I think I'm required, if I find that obstruction of justice, to provide some specificity.

*****

Moreover, the Court does have an obligation, if it finds an obstruction of justice, to make an independent inquiry and determination.

Moreover, I believe there is authority in the Second Circuit that in making such a determination the standard of proof is heightened.

*****

Here, because of the impact that an obstruction determination has or a prospective determination has on the defendant's right to take the stand and testify, the appropriate standard is clear and convincing.

Also, it should be noted that in making this determination to the extent there's ambiguity, it should really be resolved in favor of the defendant.

*****

On the other item that I mentioned, the testimony that he provided to the jury in the Court's opinion concerning why he didn't file the DMC returns, I found that testimony to be clearly untruthful. It was done in an effort to explain that which was unexplainable.

It pertained to a very material matter, because if the jury was to believe him, they had to understand, or at least he so perceived, apparently, why the money that went into his pocket and went into his bank account and which supposedly became the obligation of DMC to report, given his contact with DMC, he had to explain why DMC never reported the income.

Now, we know that the investigation wasn't underway until 1991. Given when this information should have been reported, which would apparently be on the '89 tax return of DMC or the 1990, but certainly prior to 1991, his explanation makes no sense. That, in and of itself, is not enough.

This, in my judgment, represented a material matter testified to by the defendant falsely, with his knowledge of the falsity. I believe he deliberately provided that information to the jury for the purpose of obstructing the administration of justice. More particularly he was trying to confuse the jury. He was trying to prevent the jury from finding him guilty concerning the charges in the indictment.

In the light of the district judge's recognition of the applicable law and his emphatic finding of materially false testimony, we find no error in his conclusion "by clear and convincing or even beyond a reasonable doubt standard that [Kelly] obstructed justice or endeavored to do so." See Walsh, supra, 119 F.3d at 122.

The judgment of the district court is affirmed.

^* The Honorable Donald P. Lay of the United States Court of Appeals for the Eighth Circuit, sitting by designation.

 

 

 

[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.

 

 

 

 

[2002-2 USTC ¶50,608] United States of America, Plaintiff-Appellee v. Ernest Patrick De Tomaso, Defendant-Appellant

(CA-9), U.S. Court of Appeals, 9th Circuit, 98-50624, 8/19/2002 , 2002 U.S. App. LEXIS 17202. Affirming an unreported District Court decision

[Code Sec. 7212 ]

Crimes: Interference with administration of Internal Revenue laws: Jury instructions.--The district court properly instructed the jury at an individual's trial for forcible rescue of seized property to determine whether an authorized IRS official had seized his property. The instruction was fairly given, accurately covered the issue, and was not misleading; thus, the court did not abuse its discretion in refusing the taxpayer's unlawful seizure instruction.
[Code Sec. 7212 ]

Crimes: Interference with administration of Internal Revenue laws: Rescue of seized property.--The government presented sufficient evidence at an individual's jury trial for forcible rescue of seized property to support his conviction and sentence. The taxpayer forcibly removed the seized property from the government's control although he was aware that doing so was unlawful. He did so by reentering his store, changing the locks and safe combinations, removing seizure tags, and opening for business.
[Code Sec. 7212 ]

Crimes: Interference with administration of Internal Revenue laws: Sentence.--The district court's discretionary denial of an individual's departure request regarding his sentencing for forcible rescue of seized property was not subject to the Ninth Circuit's review.

Miriam Krinksy, Los Angeles, Calif., for plaintiff-appellee. Emily S. Uhrig, Los Angeles, Calif., for defendant-appellant.

Before: SCHROEDER, Chief Judge, and TASHIMA and RAWLINSON, Circuit Judges. ^*

è Caution: This court has designated this opinion as NOT FOR PUBLICATION. Consult the Rules of the Court before citing this case.ç

MEMORANDUM ^**

Ernest Patrick De Tomaso appeals his conviction and sentence following a jury trial for one count of forcible rescue of seized property in violation of 26 U.S.C. §7212(b). Pursuant to Anders v. California, 386 U.S. 738, 18 L.Ed.2d 493, 87 S.Ct. 1396 (1967), De Tomaso's attorney has filed a motion to withdraw as counsel of record and De Tomaso has filed a supplemental brief.

Counsel has identified several potential issues and correctly determined that they are without merit. The trial court properly denied De Tomaso's motion to dismiss because 26 U.S.C. §7212(b), on its face, allows for the prosecution of individuals who forcibly rescue property seized by the IRS under title 26, and De Tomaso conceded that Revenue Officer Bettencourt was properly authorized under the Internal Revenue Code to conduct the seizure.

The district court also did not err in allowing evidence of other related bad acts with a proper limiting instruction. See United States v. Arambula-Ruiz, 987 F.2d 599, 602 (9th Cir. 1993); United States v. Winters, 729 F.2d 602, 604 (9th Cir. 1984) (upholding introduction of Rule 404(b) evidence with a proper limiting instruction).

The district court properly denied De Tomaso's Fed. R. Crim. P. 29 motion for judgment of acquittal because the government put on sufficient evidence that Officer Bettencourt was authorized to conduct the seizure of appellant's property; that appellant was aware that removal of the property from government control was unlawful; and that appellant forcibly removed the seized property from the control of the government. Jackson v. Virginia, 443 U.S. 307, 319, 61 L.Ed.2d 560, 99 S.Ct. 2781 (1979); United States v. Gasho, 39 F.3d 1420, 1429 (9th Cir. 1994) (interpreting forcible rescue under 18 U.S.C. §2233).

Counsel also correctly concluded that the jury instructions do not provide any basis for appeal. First, the district court properly instructed the jury that they had to determine whether the defendant's property was seized by a proper official authorized under the Internal Revenue Code. See id. As the instruction given fairly and adequately covered the issue presented, and was not misleading, the district court's refusal of defendant's "lawful seizure" instruction was not an abuse of discretion. See Chuman v. Wright, 76 F.3d 292, 294 (9th Cir. 1996). Second, the district court properly declined to give an instruction defining "rescue" as the actual taking away of an item. See Gasho, 39 F.3d at 1429 (defining rescue as removal of the property from the dominion and control of the government). Finally, the district court did not err by giving this circuit's model jury instruction defining reasonable doubt. United States v. Velasquez, 980 F.2d 1275, 1278 (9th Cir. 1992).

With regard to sentencing, counsel also correctly points out that the court's discretionary denial of De Tomaso's departure request is not subject to our review. See United States v. Lipman, 133 F.3d 726, 731-32 (9th Cir. 1998).

In his pro se supplemental brief, De Tomaso contends that his actions following the seizure of his business by Internal Revenue Agents were not sufficient to constitute a rescue under §7212(b) because he did not physically remove any of the seized items. This contention is without merit. Because rescue requires only the removal of seized items from the dominion and control of the government, rather than removal from a physical space, De Tomaso's actions of re-entering his store, changing the locks and safe combinations, removing the seizure tags and opening for business were sufficient to constitute rescue. See Gasho, 39 F.3d 1429.

Our independent review of the record pursuant to Penson v. Ohio, 488 U.S. 75, 83, 102 L.Ed.2d 300, 109 S.Ct. 346 (1988), discloses no issues for review. Counsel's motion to withdraw is GRANTED, and the district court's judgment is AFFIRMED.

^* This panel unanimously finds this case suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).

^** This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as may be provided by Ninth Circuit Rule 36-3.

 

 

 

 

[2005-2 USTC ¶50,482] United States of America, Plaintiff-Appellee v. Shane A. Massey, Defendant-Appellant.

U.S. Court of Appeals, 9th Circuit; 03-30434, June 30, 2005 .

Unpublished opinion affirming in part and reversing in part an unreported DC Alas. decision.

[ Code Sec. 7203]

Crimes: Instructions to jury: Willful failure to file return. --

A district court did not err in instructing a jury on an element of willfulness under Code Sec. 7203 for an individual who was convicted of corruptly endeavoring to impede the administration of the tax laws. He had threatened to sue the IRS and its agents, told the IRS that he planned to charge it $500,000 for each "unauthorized" use of his name, and demanded that the IRS cease efforts to subpoena his bank accounts. The court properly instructed the jury that a disagreement with the Internal Revenue Code or a belief that the Code is unconstitutional does not negate the element of willfulness.

[ Code Sec. 7212]

Crimes: Instructions to jury: Interference with administration of internal revenue laws. --

A district court did not err in instructing a jury on the omnibus clause of Code Sec. 7212(a) for an individual who was convicted of corruptly endeavoring to impede the administration of the tax laws. He had threatened to sue the IRS and its agents, told the IRS that he planned to charge it $500,000 for each "unauthorized" use of his name and demanded that the IRS cease efforts to subpoena his bank accounts. The court properly instructed the jury that "corruptly" means "performed with the intent to secure an unlawful benefit for oneself or another." The government was not required to prove that the defendant was aware of an ongoing tax investigation to obtain a conviction under Code Sec. 7212(a); it was sufficient that the defendant hoped to benefit financially from threatening letters or other conduct.

Before: Fletcher and Gould, Circuit Judges, and King ^* , District Judge.

¬ Caution: The court has designated this opinion as NOT FOR PUBLICATION. Consult the Rules of the Court before citing this case.®

MEMORANDUM ^**

Defendant-appellant Shane A. Massey was convicted of one count of corruptly endeavoring to impede the administration of the tax laws, in violation of I.R.C. §7212(a), and three counts of willful failure to file income tax returns, in violation of I.R.C. §7203. Massey challenges his conviction and sentence, arguing: 1) that he was deprived of his Sixth Amendment right to counsel; 2) that the district court erred in instructing the jury on the element of willfulness under §7203 and on the omnibus clause of §7212(a); and 3) that his sentence violated his Sixth Amendment right to have all facts used to enhance his sentence found by a jury beyond a reasonable doubt. We affirm his convictions and remand for resentencing in light of United States v. Booker, 125 S.Ct. 738, 769 (2005), and United States v. Ameline, No. 02-30326, 2005 WL 1291977, at *11 (9th Cir. June 1, 2005) ( en banc).

Massey did not file accurate federal income tax returns for tax years 1995 through 2001. When contacted by the Internal Revenue Service (IRS) regarding his non-compliance with the Internal Revenue Code, Massey threatened to sue the IRS and its agents, told the IRS that he planned to charge it $500,000 for each "unauthorized" use of his name, and demanded that the IRS cease efforts to subpoena his bank accounts. The United States charged Massey with one count of corruptly endeavoring to impede the administration of the tax laws, in violation of I.R.C. §7212(a), and three counts of willful failure to file income tax returns, in violation of I.R.C. §7203.

Before trial, the magistrate judge and the district court informed Massey of the charges against him, the maximum penalty for each charge, his right to counsel, including a court-appointed attorney, and the disadvantages of proceeding to trial pro se. Although Massey demanded his Sixth Amendment right to the "assistance of counsel," he repeatedly asserted, through letters and in-court statements, that he would not accept retained counsel, court-appointed counsel or standby counsel. Massey also thwarted the district court's attempts to provide him with standby counsel and court-appointed counsel. At trial, Massey represented himself, was convicted on all counts, and received a 41-month sentence in accord with the U.S. Sentencing Guidelines. Massey appeals on three grounds.

First, Massey argues that he did not validly waive his Sixth Amendment right to counsel. ¹ We disagree. The record as a whole indicates that Massey understood the charges against him, the statutory penalties associated with these charges, and the dangers and disadvantages of self-representation. Lopez v. Thompson, 202 F.3d 1110, 1117 (9th Cir. 2000) ( en banc); United States v. Balough, 820 F.2d 1485, 1487 (9th Cir. 1987). Massey attempted to hinder his trial by declining every constitutionally recognized form of counsel while simultaneously refusing to proceed pro se. A defendant may not abuse the Sixth Amendment in this way: tactics such as those employed by Massey amount to an unequivocal waiver of the right to counsel. United States v. Kienenberger, 13 F.3d 1354, 1356 (9th Cir. 1994); United States v. Hardy [ 92-1 USTC ¶50,047], 941 F.2d 893, 896-97 (9th Cir. 1991).

Second, Massey contends that the district court erred in instructing the jury on 1) the element of willfulness in §7203, and 2) the omnibus clause of §7212(a). ² We reject these arguments. With respect to §7203, the district court properly instructed the jury that a disagreement with the Internal Revenue Code or a belief that the Code is unconstitutional does not negate the element of willfulness. Cheek v. United States [ 91-1 USTC ¶50,012], 498 U.S. 192, 206-07 (1991). With respect to §7212(a), the district court correctly instructed the jury that "corruptly" means "performed with the intent to secure an unlawful benefit for oneself or another." See United States v. Workinger [ 96-2 USTC ¶50,402], 90 F.3d 1409, 1414 (9th Cir. 1996). The law of this circuit establishes that the government need not prove that the defendant was aware of an ongoing tax investigation to obtain a conviction under §7212(a); it is sufficient that the defendant hoped "to benefit financially" from threatening letters or other conduct. United States v. Kuball [ 92-2 USTC ¶50,501], 976 F.2d 529, 531 (9th Cir. 1992).

Third, Massey challenges his sentence on the ground that it was based upon facts, other than prior convictions, not found by a jury beyond a reasonable doubt in violation of the Sixth Amendment. Pursuant to United States v. Ameline, we remand to the district court to allow it to consider whether it would have imposed the same 41-month sentence on Massey if the U.S. Sentencing Guidelines system had been advisory, rather than mandatory. 2005 WL 1291977, at *11; Booker, 125 S.Ct. at 769.

AFFIRMED IN PART, REMANDED IN PART.

^* The Honorable Samuel P. King, Senior United States District Judge for the District of Hawaii, sitting by designation.

^** This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.

¹ Massey further argues that the magistrate judge did not have jurisdiction to conduct an inquiry pursuant to Faretta v. California, 422 U.S. 806 (1975). 28 U.S.C. §636; Peretz v. United States , 501 U.S. 923, 932-36 (1991); Gomez v. United States , 490 U.S. 858, 863-75 (1989). We need not reach this question because we conclude that the record as a whole demonstrates that Massey knowingly, intelligently and unequivocally waived his right to counsel.

² We review a district court's formulation of jury instructions for an abuse of discretion. United States v. Shipsey, 363 F.3d 962, 966 n.3 (9th Cir. 2004). We review de novo whether a jury instruction misstates a material element of a statute. Id.