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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.

 

 

 

 

[98-1 USTC ¶50,275] United States of America , Appellant v. John A. Brennick, Defendant, Appellee

(CA-1), U.S. Court of Appeals, 1st Circuit, 96-1969, 1/20/98 , 134 F3d 10, Vacating and remanding an unreported District Court decision

[Code Secs. 7202 and 7212 ]

Penalties, criminal: Sentencing guidelines: Downward departure: Basis for: Multiple causation of ultimate losses: Intent to pay.--A decision imposing a criminal sentence on an individual convicted of obstructing the IRS, failing to pay over withheld taxes, and various currency structuring activities was vacated and remanded because the sentence was substantially less than that called for in the sentencing guidelines for tax evasion, which was the offense most analogous to the taxpayer's conduct. Multiple causation of the government's ultimate losses was not a sufficient basis for departure from the sentencing guidelines. Moreover, the record suggested serious and conscious wrongdoing by the taxpayer that cast doubt on the sentencing court's belief that the taxpayer would have paid the amounts due if his business had not failed. Finally, the structuring offenses alone should have produced a longer sentence than the one imposed. Thus, the case was remanded for the sentencing court to reconsider the taxpayer's intent and more fully explain any departure from the sentencing guidelines.

Donald K. Stern, United States Attorney, Stephen G. Huggard, Special Assistant United States Attorney, Boston, Mass. 02109, for appellant. Scott P. Lopez, Terry Philip Segal, Burns & Levinson, 125 Summer St., Boston, Mass. 02110-1624, for defendant, appellee.

Before: BOUDIN, Circuit Judge, GODBOLD and CYR, Senior Circuit Judges.

BOUDIN, Circuit Judge:

John Brennick was convicted of various offenses centered around his failure to pay over to the Treasury income and social security taxes withheld from his employees' paychecks. The district court calculated the range of imprisonment fixed by the sentencing guidelines at 41 to 51 months but then departed downward and imposed a sentence of 13 months' imprisonment. The government now appeals, arguing that the downward departure was error.

I.

John Brennick was the president and sole proprietor of a number of head injury treatment centers in Massachusetts , Pennsylvania , Delaware and Maryland . He also operated one head trauma center in New Jersey as a limited partnership, Brennick being the general partner. Some of the centers provided sophisticated medical treatment; others appear to have been supported living centers for head injured patients. Taken as a whole, the companies were a large and successful business venture.

Employers like Brennick are required to withhold income taxes and social security taxes from employee paychecks on a periodic basis and to pay those amounts over to the Treasury. The Internal Revenue Service specifies the periods for which such withholding is required. Employers are required by law to deposit the withheld taxes into the Treasury within three days after the end of each such period. Regular returns, specifying the amounts withheld and paid over, are also required on a quarterly basis.

From 1986 to 1992, Brennick followed a regular pattern of withholding the taxes from his employees' pay but delaying payment of the monies into the Treasury for a substantial period beyond the time due. Normally his payments to the government were between two and six months after the due dates. Brennick routinely filed returns accurately describing the amounts withheld, and when he ultimately made the delayed payments to the Treasury, he also paid the interest and penalties prescribed by law for late payments.

During this period, Brennick frequently withdrew money from his businesses by means that avoided bank reports to the IRS that are required when a person withdraws more than $10,000 from an individual bank on a single banking day. Brennick told various of his employees and family members to cash checks drawn on Brennick's various business accounts and to turn the money over to him. The individual checks were for less than $10,000 each; but the total withdrawn from his company accounts was often well over $10,000 a day.

There is no claim that Brennick was forbidden to withdraw the monies from the companies' accounts; in fact, for most of them he was the sole proprietor, and for the remaining one he was the general partner. The charge later brought against him was that the withdrawals were structured to avoid the filing of currency transaction reports and to deflect the attention of the tax authorities. It is said that Brennick took much or all the money he withdrew and lost it in gambling: he claims to have lost more than $1 million a year.

During the second half of 1992, Brennick's businesses began to suffer financial problems. Changes were occurring in the health care industry adversely affecting providers like Brennick. Insurance reimbursements came more slowly and for lower amounts, while the costs of providing service increased. In December 1992, one of the banks that had been lending money to Brennick failed and Brennick could not find another lender to replace it.

At the same time, the IRS began to investigate Brennick's pattern of chronically late payments. In a meeting with an IRS agent on October 30, 1992 , Brennick agreed to a payment plan, including a commitment to keep current on future payments. He promised that his businesses would seek to expedite payments to the IRS and would cut his own pay and the pay of other executives in order to pay back taxes. Instead, Brennick removed another $80,000 cash from the businesses in November 1992 and almost twice that amount in December.

In addition, Brennick now began to file false quarterly withholding tax returns for many of the companies. Returns filed in the third and fourth quarter of 1992 incorrectly stated that Brennick had paid over to the government virtually all of the withheld taxes; in truth, the companies in question had paid none of the taxes over to the IRS. In two cases Brennick signed the false returns himself; in other cases they were signed by employees, but Brennick was the person responsible for the withholding of the taxes.

In February 1993, Brennick filed for reorganization of his businesses under chapter 11 of the Bankruptcy Code, and later the case was transformed into a chapter 7 liquidation. At the initial filing, Brennick owed the Treasury over $1.4 million in withheld taxes that should have been, but had not been, paid over to the government. During reorganization, Brennick took additional funds out of the businesses for himself while failing to pay over the full amount of taxes withheld during the same period.

In 1995, a grand jury indicted Brennick. In a superseding indictment, Brennick was charged with 22 counts of willful failure to account for, and pay over quarterly, specified withholding taxes, 26 U.S.C. §7202; nine counts of structuring currency transactions, 31 U.S.C. §§5313, 5322 and 5324; and one count of corruptly endeavoring to obstruct and impede the IRS, 26 U.S.C. §7212(a). There was an additional single charge of bankruptcy fraud, 18 U.S.C. §152, but the jury later deadlocked on that issue.

In December 1995, Brennick went on trial. The government, in addition to offering evidence of the events already described, called several of Brennick's former employees who testified that Brennick had known the deadlines for paying over the withheld taxes but had deliberately chosen to ignore them even though his employees had sought to get him to pay over the taxes on a timely basis. The bankruptcy fraud count aside, the jury convicted Brennick on all remaining counts.

The district court held a two-day proceeding to determine Brennick's sentence and after sentencing, issued a memorandum and order explaining the court's analysis. United States v. Brennick, 949 F. Supp. 32 (D. Mass 1996). After briefly setting out the background facts, the memorandum calculated the normal guideline range, referring (as we do) to the 1992 version of the guidelines. Then, at length, it set out the framework for departures and the court's reasons for departing in this case.

Brennick was convicted of violating three different statutes--failure to pay over withheld taxes, structuring, and obstructing the IRS--but the conduct was arguably related. In any event, the district court chose to treat the offenses as closely related counts to be grouped under U.S.S.G. §3D1.2, and its choice is not disputed on this appeal. ¹ Where counts are so grouped, the court selects the offense level for the violation among the group that had the highest offense level. U.S.S.G. §3D1.3(b).

The district court ruled that the highest offense level was generated by the offense of corruptly impeding tax officials under 26 U.S.C. §7212(a). Although no specific guideline exists for this offense (unless force is used), see U.S.S.G., appendix A, the court is directed to use the guideline for the offense most analogous to the criminal conduct of which the defendant was convicted. U.S.S.G. §1B1.2. Here, the district court concluded that the closest analogy for the obstructive conduct was the offense of tax evasion, a violation of 26 U.S.C. §7201, for which a specific tax evasion guideline is set forth, U.S.S.G. §2T1.1.

Although Brennick was not charged with tax evasion, this choice of analogy is not challenged by either side, and we accept it as reasonable for purposes of this appeal. The government's obstruction charge embraced all of Brennick's behavior (deliberate underpayments, structuring, and other acts of falsity or concealment) and that conduct includes withholding revenues from the government combined with elements of conscious wrongdoing and personal gain.

The base offense level for the tax evasion guideline is driven by the tax loss inflicted on the government, and in this case the undisputed level of the government's loss--"more than $1,500,000"--corresponds to offense level 18. U.S.S.G. §§2T1.1(a), 2T4.1(M). The district court added two levels on the ground that Brennick had used "sophisticated means" to impede discovery of the offense, see U.S.S.G. §2T1.1(b)(2), and two more levels for obstruction of justice because of untruthful testimony by Brennick at trial, see U.S.S.G. §3C1.1.

Given a total offense level of 22 (and a criminal history category I), the guideline range for Brennick was a term of imprisonment of 41 to 51 months. From this range, the district court departed downward to level 13, for which the prescribed range for a defendant in criminal history category I is 12 to 18 months' imprisonment. The court imposed a sentence of 13 months, as well as a fine of $6,000 and the statutory special assessment, noting that Brennick remained personally liable to the government for tax losses he had caused, 26 U.S.C. §6672.

The court's reasons for the departure were set forth in some detail but reflect two central themes: first, that Brennick's intent was not as wicked as that of the typical tax evader because, despite some conscious wrongdoing, he did not intend permanently to deprive the government of the funds he failed to pay over; and second, the ultimate losses to the government were due not merely to Brennick's conduct but to contributing causes as well, including failure of his business's main bank and adverse developments in the health care market.

The government has now appealed to challenge the sentence. It argues that the departure was based on a misconstruction of the guidelines and that even if a ground for departure exists in theory (which the government denies), the district court's decision to depart and degree of departure were unreasonable on the present facts. We take the issues in that order.

II.

Departures from the guideline range are allowed where "the court finds that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described." 18 U.S.C. §3553(b). Sometimes, the guidelines identify a "circumstance" that is a permissible or forbidden basis for departure, sometimes further indicating that departure is encouraged or discouraged.

Absent such explicit guidance, the Commission itself has told courts that they should treat each guideline as carving out a "heartland" representing "a set of typical cases embodying the conduct that each guideline describes." U.S.S.G. ch. 1, pt. A intro. comment 4(b). "When a court finds an atypical case, one to which a particular guideline linguistically applies but where conduct significantly differs from the norm, the court may consider whether a departure is warranted." Id. If the characteristic is "atypical" and aggravates or mitigates the typical conduct, it may provide a basis for departure.

Where a district court does depart, an aggrieved party may appeal from both the decision to depart and the extent of the departure. 18 U.S.C. §3742. The standard of review varies with the nature of the issue involved, deference being limited or absent on abstract issues of law but more generous as to questions of law application and factfinding. United States v. Black, 78 F.3d 1, 8 (1st Cir.), cert. denied, 117 S. Ct. 254 (1996). The present case presents issues of all three kinds.

We start with the district court's determination that Brennick, although he had deliberately failed to pay the government the withheld wages and social security taxes at the time they were due, genuinely intended to pay them in due course. In the district court's view, Brennick's main aim was to use the IRS as a bank. It is not clear that the government directly challenges this finding, but in any case we think the finding is not clearly erroneous, the standard ordinarily applied to determinations of fact made at sentencing. United States v. Pineda, 981 F.2d 569, 572 (1st Cir. 1992).

Brennick's pattern before financial difficulties engulfed him was to retain the use of the funds in question for periods of four to six months and then to pay over the funds, adding penalties and interests. The likelihood that he would be able to make this repayment obviously declined as troubles loomed in late 1992, but he continued to scramble for resources to continue payment. Whether an intent to repay can be ascribed to all of the delays in payment is a more difficult issue. See part III below.

In the district judge's sentencing memorandum and order, she relied heavily upon this intention to repay to carve the present case out of the "heartland" of typical tax evasion cases. The government says this rationale was a belated attempt to bolster a departure earlier premised on a different ground, namely, that there were multiple causes for the loss to the government. Our own reading of the sentencing transcript suggests that the benign view of Brennick's intent was always an element in the district court's reasoning.

The nature of the scienter element in a tax evasion case is complicated to summarize given that different requirements may apply on different issues. Still, the taxpayer usually is attempting to deprive the government permanently of taxes owed to it. Typically, the instruction requires the government to prove that the defendant "willfully evaded, or attempted to evade, income taxes with the intention of defrauding the government of taxes owed." Leonard B. Sand, et al., Modern Federal Jury Instructions: Criminal ¶59.01, Instruction 59-8 (1992) (emphasis added). See, e.g., United States v. Aitken [85-1 USTC ¶9209], 755 F.2d 188 (1st Cir. 1985).

Admittedly, it would do a defendant no good to say that he deliberately understated his income but sincerely intended to pay the money back to the government in five years' time. But neither is it easy to imagine a fraud conviction where a defendant files an accurate return, intends shortly to pay in full, but remits the funds with interest shortly after the April 15 deadline. Indeed, the guideline covering the failure to pay over payroll taxes notes in the commentary that "[t]he offense is a felony that is infrequently prosecuted." U.S.S.G. §2T1.6, commentary.

In all events, we are inclined on the basis of the information we have and our common sense to think that such a temporary delay in payment--where the defendant expected to pay--is not a "typical" or "heartland" case of tax evasion. Thus, even if the evasion statute and guideline might "linguistically" be extended to embrace such temporary delay cases, the intent to delay payment only briefly could take the case out of the heartland. And, as already noted, the district court made such a finding in this case, sustainable at least as to much of the losses driving the guideline sentence.

The district court had another theme in its departure analysis. It said that the $1.5 million loss suffered by the government overstated the seriousness of Brennick's offense, partly because the losses were due to multiple causes, some of which were not Brennick's fault or within his control (failure of his bank, the changes in health care reimbursement). The government says that these concepts are part of the fraud guidelines and applying them to the tax crime guidelines is an error of law.

The fraud guidelines, like the tax guidelines, set offense levels primarily based upon loss. But the fraud guidelines alone refer in comment to the possibility of a departure where computed losses under- or overstate the seriousness of the offense; likewise, the fraud guidelines alone at one time referred to multiple causes as a possible example of an overstatement and while that language has been deleted, they retain that concept in one of the examples. Compare U.S.S.G. §2F1.1, application note 11 (1990) with application note 10 (1991). See generally United States v. Rostoff, 53 F.3d 398, 406 (1st Cir. 1995).

We agree with the government that provisions in one set of guidelines cannot normally be transferred to another separate set of guidelines. See United States v. Smallwood, 920 F.2d 1231, 1238 (5th Cir. 1991); United States v. Anders, 899 F.2d 570, 580 (6th Cir. 1990). The guidelines for each offense or set of offenses tend to function as an integrated unit, containing their own tradeoffs and specifications. Thus, without laying down an iron rule, we view skeptically any importation of language from another offense guideline, absent an explicit cross-reference.

Yet this does not take the government very far. The notion in the fraud guideline that the loss table may under- or overstate the seriousness of the offense is little more than another way of saying that departures from the loss table may be warranted for good cause. Even if we treat the fraud guideline's language as generously inviting a search for such causes, the fact remains that the all-purpose departure provision remains available for tax cases whenever the case falls outside the heartland. See 18 U.S.C. §3553(b); U.S.S.G. §5K2.0.

The fraud guidelines' multiple-cause language is a more complicated matter. The government says that the fraud guidelines may need such flexibility because of the diverse situations to which they must apply. By contrast, it says, "loss" for tax purposes is based on calculations, set forth in the guidelines, that (in words of the brief) "focus upon the amount due and owing at the time of the offense." If a tax evader repays what was stolen, says the government, he merely deserves a few levels off for acceptance of responsibility.

Tax loss seems to be a somewhat more protean concept than the government implies, ² but we think that the argument is beside the point. We are here concerned not with computing the loss--the parties have agreed that it should be treated as "more than 1.5 million"--but rather with whether a departure is proper. And we are dealing not with a tax evader who stole the government's money and later had a change of heart but with someone who (accepting the district court's finding) never intended to steal the money at all (or at least most of it).

Further, regardless of the fraud guideline, the facts mentioned by the district court in its causation analysis are obviously relevant even if the analysis is not. To distinguish Brennick from the ordinary tax evader, it is essential to show that he did intend to pay over what was owed and was merely deferring payment. This premise would be hard to sustain unless some other cause had contributed to his later failure to pay over the funds.

This said, we think that it merely invites confusion to treat "multiple causation" as an independent basis for a departure. And we think that to do so would be inconsistent with the normal presumption that provisions in one guideline are not to be read into the guideline for a different offense--absent an explicit cross reference or some other reason to believe that the Commission so intended. We doubt that this emendation would alter the district court's desire to depart, but as a remand is required for other reasons, it is free to decide the point for itself.

III.

While a departure could be justified in theory in this case, we do not think that either the decision to depart or the amount of the departure has been adequately explained. Our reasons are not the usual ones--that the departure is based on an impermissible ground or that there has been no effort to explain the degree of departure. Rather, we think that factors weighing against any departure, and certainly one of this degree, received inadequate attention.

In this case the guideline range for Brennick was 41 to 51 months; and the 13-month sentence imposed was less than a third of the minimum and just over a quarter of the maximum. A 13-month sentence would be the midpoint in the range for a first time offender who evaded or sought to evade $40,000 or more in taxes but had no other adjustment. Brennick, of course, caused the government a tax loss of over $1,500,000.

It would be easy enough to understand the sentence if Brennick had merely withheld a large payment, reasonably expecting to pay the money shortly but using it in the meantime for business purposes which then unexpectedly collapsed. Absent loss to the government, there would probably not even be a prosecution in such a case; and certainly the intent would be less culpable than in ordinary tax evasion. But Brennick's actions and intentions were more serious than this abstraction allows.

First, Brennick may in some sense have intended repayment, but the reasonableness, and perhaps even the possibility, of such a belief must have lessened over time. To the eve of bankruptcy and apparently beyond, Brennick appears to have deferred payment to the government while withdrawing very substantial sums for his own use. Without more findings, it would be hard to give Brennick the benefit of a bona fide intention to repay the entire loss, even if much of it may be encompassed.

Second, even apart from an intention to repay, Brennick's good faith is marred by dishonesty in at least two respects, (even apart from his falsehoods at trial which were the subject of a separate adjustment). On a number of the later returns, Brennick falsely stated or had others misstate that the amounts due to the government had been paid when he knew that they had not. And his elaborate structuring of withdrawals was effectively an effort to mislead and conceal, as perhaps also was his use of multiple employer identification numbers.

Third, Brennick committed the crime of structuring and the government points out that the structure counts alone, if no other offense had been committed, could easily have produced an adjusted offense level of 17, ³ and a guideline sentence of 24 to 30 months. The minimum is almost twice the amount of Brennick's actual sentence after departure. The government has not argued that this makes a departure impermissible as a matter of law, but it certainly bears on the reasonableness and degree of departure.

We appreciate that where a ground for departure exists, the district court's discretion is at its zenith deciding both whether and how far to depart. United States v. Diaz-Villafane, 874 F.2d 43, 49-50 (1st cir. 1989). But the quid pro quo for departures is reviewability, including review for abuse of discretion, 18 U.S.C. §3742(b)(3); and even if review is hedged by deference, Koon v. United States, 116 S. Ct. 2035, 2046 (1996), it has to mean something.

In this case, we fail to see how a departure to 13 months can be justified as reasonable on this record in light of the three considerations set forth above, all of which appear to us relevant. We have put to one side Brennick's gambling, the significance of which is a matter of reasonable dispute, and the government's claim that he deprived his employees of health care, which was neither a charged offense nor clearly relevant conduct.

Possibly, even after these factors are considered and weighed in full, there is still warrant for a substantial departure, but we think that some further explanation is essential. Indeed, while the district court takes note of Brennick's false filings, the government says that the discussion understates them; ⁴ and the district court's decision does not squarely address our concerns about Brennick's good faith on the later losses or the import of the structuring guideline.

The sentence was not imposed casually: the district court conducted a lengthy sentencing and wrote at length, addressing itself primarily to the government's objections--which we think are overstated. The area is complicated; there is little helpful precedent; and Brennick's circumstances are unusual. If it takes one more round to fine-tune the sentence, this is a price worth paying.

On remand, the district court is free to consider whether its inclination to depart is affected by our conclusion that the fraud guideline should be put to one side. Assuming not, we expect that in resentencing the district court will address the considerations that we have outlined. While expressing doubt that a sentence of 13 months is justified, we impose no mechanical downward limit. What procedure to follow on remand is entirely for the district court to decide.

The sentence imposed by the district court is vacated in its entirety and the case is remanded to the district court for further proceedings consistent with this opinion.

IT IS SO ORDERED.

¹ The government says for the record that the structuring counts should have been grouped separately from the tax counts, which would have resulted in a one-level increase. U.S.S.G. §3D1.4. But this caveat was not raised in the district court and is not pursued here.

² Tax loss is defined somewhat differently for the different tax offenses, compare U.S.S.G. §§2T1.1(a), 2T1.2(a), 2T1.3(a), and 2T1.6(a), and the tax table at 2T4.1 has changed over time.

³ That level might have been anywhere between 15 and 21. Under the 1992 guidelines, the structuring counts generated a base offense level of 13. U.S.S.G. §2S1.3(a)(1), and would have been adjusted upward two levels for the amount of money involved. U.S.S.G. §2S1.3(b)(2). Brennick's two-level adjustment for obstruction of justice would presumably also have applied, generating a level of 17. A further increase of four levels would have resulted if the court determined that "the defendant knew or believed that the funds were criminally derived property." U.S.S.G. §2S1.3(b)(1).

⁴ The district court mentioned two returns filed by Brennick falsely claiming that the amount indicated was paid in full. The government notes that although two false returns were actually signed by Brennick, an additional fourteen false returns were signed by his employees.

 

 

 

[98-2 USTC ¶50,904] United States of America , Plaintiff-Appellee v. Harry J. Boyer, Defendant-Appellant

(CA-4), U.S. Court of Appeals, 4th Circuit, 98-4284, 12/2/98 , Affirming an unreported District Court decision

[Code Sec. 7212 ]

Penalties, criminal: Interference with administration of tax laws: Sentencing Guidelines.--The sentence of a taxpayer who pled guilty to impeding the administration of the tax laws was affirmed. His base level offense of 13 was appropriate because he intended to inflict a loss greater than $40,000 and less than $70,000. Further, the sentence was properly enhanced for the taxpayer's use of sophisticated means to impede discovery of his offense because, through a series of transactions, he attempted to hide assets from the IRS in order to avoid paying the assessment. The trial court appropriately denied a reduction in the taxpayer's offense level for acceptance of responsibility because his refusal to disclose financial information was inconsistent with his acceptance of responsibility and demonstrated his continuous effort to hide certain information. Finally, the court's refusal to order a downward departure from the U.S. Sentencing Guidelines based upon the taxpayer's age, family responsibilities and aberrant behavior was not reviewable.

Harry J. Boyer, Jr., Barker & Boyer, 201 St. Charles Ave. , New Orleans , La. 70130 , for defendant-appellant. Rebecca A. Betts, United States Attorney, Susan M. Arnold, Assistant United States Attorney, Charleston, W.Va., for plaintiff-appellee.

Before: MURNAGHAN, LUTTIG and MICHAEL, 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"

EC: Harry J. Boyer, Sr., pled guilty to one count of interference with administration of internal revenue laws in violation of 26 U.S.C. §7212(a) (1994). He was sentenced to an eighteen-month term of imprisonment and ordered to pay a $5000 fine. On appeal, Boyer contends that the sentencing court improperly: (1) computed the amount of loss for purposes of determining his base offense level; (2) found that Boyer used sophisticated means to evade detection; (3) denied an adjustment in offense level for acceptance of responsibility; and (4) refused a downward departure in sentencing. Finding no reversible error, we affirm.

Based upon an Internal Revenue Service ("IRS") audit for tax years 1986 and 1987, Boyer was found to have a tax liability of $50,459.47. In September 1992, Boyer submitted Form 656, Offer and Compromise, in which he proposed paying $5000 to settle the assessment, based upon his representation that he lacked financial ability to pay the entire amount.

However, Boyer had significant unreported assets available to pay the assessment. In 1989, Boyer settled a lawsuit against the State of Louisiana for $177,548.75. These funds were held in escrow by Boyer's attorney until he instructed the attorney in July 1992 to deposit the funds, totaling $93,000 after deduction of attorney's fees, into the saving accounts of two of Boyer's minor children. Boyer and his wife were custodians of these two accounts. In August 1992, Boyer received an additional $17,859 from Louisiana . On August 14, 1992 , Boyer used these funds and an additional $15,800 withdrawn from his children's accounts as a down payment on a house. The house, valued at $146,000, was titled solely in Boyer's wife's name. Using cashier checks, Boyer transferred the remaining funds in his children's accounts into accounts at Shearson Lehman with only his wife listed as custodian.

It was shortly thereafter that Boyer submitted to the IRS his initial $5000 settlement offer. He failed to disclose the funds received from the State of Louisiana or his interest in real estate. The IRS discovered that Boyer signed the Deed of Trust on the house. When confronted with this information, Boyer told the IRS that the funds used for the down payment came from his wife's parents.

In March 1993, Boyer increased his offer to settle to $10,000. Once again, he failed to disclose his interest in his house or the settlement. In April 1994, Boyer again offered to settle for $10,000. He then increased the offer to $20,000. At no time did Boyer disclose his assets. The IRS accepted Boyer's $20,000 offer. Boyer paid $15,000 and defaulted on the remaining $5000.

Boyer challenges his sentence on multiple grounds. In reviewing a district court's sentence under the Sentencing Guidelines, we accept the court's findings of fact unless they are clearly erroneous and give due deference to the court's application of the guidelines to the facts. See United States v. Cutler, 36 F.3d 406, 407 (4th Cir. 1994). The standard of review for the court's legal interpretation of the Guidelines is closer to de novo review. Id.

At sentencing, Boyer's base offense level was 13 based upon a tax loss of greater than $40,000 and less than $70,000. See U.S. Sentencing Guidelines Manual §2T4.1(H) (1997). Boyer contended that the base offense level should be 12 because the intended loss was only approximately $30,000, based upon his offer to pay $20,000, and the actual loss was approximately $35,000, based upon his payment of $15,000. The court rejected this argument.

Under USSG §2T1.1(c)(1), "tax loss is the total amount of loss that was the object of the offense (i.e., the loss that would have resulted had the offense been successfully completed)." The fact that Boyer paid $15,000 towards the assessment is of no consequence in computing his offense level under the Guidelines."The tax loss is not reduced by any payment of the tax subsequent to the commission of the offense." §2T1.1(c)(5). Furthermore, the Sentencing Guidelines clearly contemplate that the tax loss is the amount of loss that the defendant intended to inflict, not the Government's actual loss. See United States v. Kraig [96-2 USTC ¶50,616], 99 F.3d 1361, 1370-71 (6th Cir. 1996). Thus, Boyer's contention that the court should have used $35,000 as the tax loss is without merit.

Boyer's alternative argument that the intended loss was only $30,000 based upon his offer of $20,000 is equally without merit. Boyer first offered to pay only $5000, evincing an intention that the tax loss be about $45,000. Even with his subsequent $10,000 offer, the intended tax loss remained above $40,000. Thus, we agree with the district court and find that 13 is the appropriate base offense level.

Boyer also contends the court erred by imposing a two-level offense level enhancement for using sophisticated means to impede discovery of his offense. See USSG §2T1.1(b)(2). "Sophisticated means" includes "conduct that is more complex or demonstrates greater intricacy or planning than a routine tax-evasion case." USSG §2T1.1, Comment. (n.4). We review this claim for clear error. See United States v. Becker [92-2 USTC ¶50,314], 965 F.2d 383, 390 (7th Cir. 1992).

Boyer instructed his attorney to hold the amount awarded in the settlement with the State of Louisiana . He subsequently deposited the award into his children's accounts. He then withdrew some of the money as custodian of the accounts to buy a home with ownership listed solely in his wife's name. Finally, through a series of cashier checks, he moved the funds to new accounts. It is obvious that Boyer did much more than merely not report his income or assets. Through this series of transactions, Boyer attempted to hide assets from the IRS in order to avoid paying the assessment. Such conduct clearly supports the two-level enhancement. See United States v. Minneman [98-1 USTC ¶50,347], 143 F.3d 274, 283 (7th Cir. 1998) (placement of funds in trust account); United States v. Clements, 73 F.3d 1330, 1340 (5th Cir. 1996) (converting funds into cashier's checks and depositing into wife's account); Becker [92-2 USTC ¶50,314], 965 F.2d at 390 (two-level enhancement for closing personal bank accounts and depositing funds in son's account). We thus find that the court did not err by imposing this enhancement.

Boyer contends the court erred by denying a two-level reduction in his offense level for acceptance of responsibility. See USSG §3E1.1(a). The court found that Boyer was not entitled to the reduction because he refused to furnish financial information regarding a trust fund as requested by the probation officer. The court stated that "part of the candor expected by the Court in one who admits to a crime and accepts responsibility is openness and fully admitting the crime charged and in fully disclosing the assets that may or may not be available to satisfy the matters at issue." Boyer claims that the requested financial information was not necessary because it merely reflected information he already disclosed. Again, we review the court's factual determination for clear error. See United States v. Myers, 66 F.3d 1364, 1372 (4th Cir. 1995).

Entry of a guilty plea constitutes significant evidence of acceptance of responsibility, but such evidence may be outweighed by conduct inconsistent with acceptance of responsibility. See USSG §3E1.1, Comment. (n.3). We find that Boyer's refusal to disclose certain financial information is inconsistent with his acceptance of responsibility because it demonstrates a continued effort on his part to hide certain information. See United States v. Corral-Ibarra, 25 F.3d 430, 440 (7th Cir. 1994) (refusal to discuss circumstances of offense with probation office constitutes failure to accept responsibility); United States v. Cianscewski, 894 F.2d 74, 83 (3d Cir. 1990) (same). Thus, we conclude the court appropriately denied the reduction in offense level.

Boyer also contends the court erred in denying a downward departure from the Sentencing Guidelines based upon his age, family responsibilities, and aberrant behavior. Because the court understood it had the authority to order a downward departure, its refusal to order such a departure is not reviewable. See United States v. Lewis, 10 F.3d 1086, 1092 (4th Cir. 1993).

Based on the foregoing, we affirm Boyer's sentence. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the court and argument would not aid in the decisional process.

AFFIRMED

 

 

 

 

 

 

[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 ¶50,526] 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).