United States v. Vernon A. Roberts , 464 F. App'x 796 ( 2012 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 11-10773 ELEVENTH CIRCUIT
FEB 15, 2012
Non-Argument Calendar
JOHN LEY
________________________
CLERK
D.C. Docket No. 1:10-cr-00138-ODE-GGB-1
UNITED STATES OF AMERICA,
llllllllllllllllllllllllllllllllllllllll Plaintiff - Appellee,
versus
VERNON A. ROBERTS,
llllllllllllllllllllllllllllllllllllllll Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(February 15, 2012)
Before EDMONDSON, WILSON and PRYOR, Circuit Judges.
PER CURIAM:
Vernon Roberts appeals his convictions and sentences for one count of
conspiring to commit tax fraud, in violation of 18 U.S.C. § 371, and eight counts
of aiding and assisting the preparation and filing of false personal income tax
returns, in violation of I.R.C. § 7206(2) and 18 U.S.C. § 2. Roberts (a former
professional income tax preparer) and two co-conspirators (employees of
Roberts’s tax preparation company) solicited business from United States Virgin
Islands (“USVI”) residents, then filed fraudulent returns with the United States
Internal Revenue Service (“IRS”) on behalf of these USVI residents. The returns
listed fake Georgia addresses, included false personal data, and claimed the earned
income tax credit (EIC).1
Roberts argues that the district court (1) gave an erroneous jury instruction,
erred in denying Roberts’s motion for judgment of acquittal and motion for a new
trial, and abused its discretion in denying his proposed jury instructions; (2)
abused its discretion in admitting testimony under Federal Rule of Evidence
404(b) concerning Roberts’s false statements and prior convictions; and (3) clearly
erred in calculating the tax loss amount. As an initial matter, the government has
moved to file a corrected brief, and that motion is GRANTED. The corrected brief
1
The EIC is available to USVI residents who claim the EIC on their USVI tax returns.
However, it can take years to receive tax refunds in the USVI, whereas refunds are often
available within one or two days in the United States if the e-filing system is used.
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has been considered in deciding this appeal. After careful review of the briefs and
the record, we affirm the district court.
I.
Roberts argues that the district court’s jury instructions—that only
individuals who live in the United States, defined as the fifty states and the
District of Columbia, may file tax returns with the IRS claiming the EIC—were in
error, and he appeals the district court’s denial of his motions for acquittal and a
new trial that were based on this argument. We review the legal correctness of a
jury instruction de novo. United States v. Prather, 205 F.3d 1265, 1270 (11th Cir.
2000). However, as long as jury instructions accurately reflect the law, district
courts have broad discretion in formulating them; we will not reverse a conviction
on the basis of a jury instruction “unless the issues of law were presented
inaccurately, or the charge improperly guided the jury in such a substantial way as
to violate due process.” Id. (quotation omitted). We review the denial of a
motion for acquittal de novo, United States v. Evans, 473 F.3d 1115, 1118 (11th
Cir. 2006), and the denial of a motion for a new trial for abuse of discretion,
United States v. Perez-Oliveros, 479 F.3d 779, 782 (11th Cir. 2007).
The district court instructed the jury that under the U.S. Internal Revenue
Code, “a person is only eligible to claim the Earned Income Tax Credit . . . if that
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person’s principal place of abode was in the United States, and when I say United
States here, I mean the 50 states and the District of Columbia.” He explained that
a principal place of abode is a place where a person resides “for more than half of
the year.” Roberts contends that this is a misstatement of the law because USVI
residents may (1) file in the United States and (2) claim the EIC on their U.S.
returns.
Roberts’s first argument relies on a convoluted reading of I.R.C. § 932. The
text of Section 932 states that bona fide residents of the Virgin Islands “shall file
an income tax return for the taxable year with the Virgin Islands” and successful
payment to the USVI of all taxes owed will excuse USVI residents from U.S. tax
liability. I.R.C. § 932(c)(2), (4) (emphasis added). Roberts argues that this
language about residual liability to the United States indicates that USVI residents
may select whether to pay taxes to the USVI or the United States. However,
Roberts points to no authority to explain why a statute stating a conjunctive
liability (USVI residents shall pay taxes to the USVI and also remain liable to the
United States if this is not done), in which the liability to the USVI is primary,
should be treated as disjunctive (USVI residents may choose whether to pay the
USVI or the United States). The clear mandate of I.R.C. § 932(c) is that USVI
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residents shall pay taxes to the USVI; there is no language about electing one’s
country of preference in which to pay.
Roberts then argues that USVI residents may claim the EIC in the United
States. The EIC is a tax credit that was enacted “to reduce the disincentive to
work caused by the imposition of Social Security taxes on earned income, to
stimulate the economy by funneling funds to persons likely to spend the money
immediately, and to provide relief for low-income families hurt by rising food and
energy prices.” In re James, 406 F.3d 1340, 1344 (11th Cir. 2005) (alteration,
emphasis, and quotation omitted). It is available to individuals who have a
principal place of abode in the United States for more than six months of the year.
I.R.C. § 32(c)(1)(A)(ii)(I). “United States” is not specifically defined within
Section 32. However, the general definitions section of the Internal Revenue
Code states that “where not otherwise distinctly expressed or manifestly
incompatible with the intent thereof . . . ‘United States’ when used in a
geographical sense includes only the States and the District of Columbia.” I.R.C.
§ 7701(a)(9). The district court correctly chose to apply this definition, as
confirmed by a later IRS regulation that “United States” does not include the
USVI for the purposes of the EIC residency requirement. See 26 C.F.R. § 1.932-
1(g)(2)(iii)(A).
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Roberts argues, however, that I.R.C. § 7651 (“Administration and
Collection of Taxes in Possessions”) should control the meaning of “United
States” in the context of EIC eligibility. We disagree. Section 7651 is intended to
facilitate collection of taxes in the U.S. possessions, and thus declares that “United
States” shall be defined to include the U.S. possessions for the purposes of tax
collection and enforcement. There is no reason to allow this limited-scope
definition to trump the general-purpose definition of “United States.”
Furthermore, the jury instruction stated not that USVI residents may not claim the
EIC—it is undisputed that they may claim it on USVI tax returns—but that USVI
residents may not claim the EIC on a U.S. tax return. This is a correct statement of
law, as the appropriate place for USVI residents to file returns and claim tax
credits on these returns is the USVI. Because the district court properly instructed
the jury in accordance with the law, we affirm the denial of Roberts’s motions for
a judgment of acquittal and for a new trial.
Roberts additionally argues that the district court improperly rejected his
proposed jury instructions. We review the district court’s refusal to give a
requested jury instruction for abuse of discretion. United States v. Klopf, 423 F.3d
1228, 1241 (11th Cir. 2005). A court’s refusal to give a defense instruction is
reversible error if “(1) the requested instruction was a correct statement of the law,
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(2) its subject matter was not substantially covered by other instructions, and (3)
its subject matter dealt with an issue in the trial court that was so important that
failure to give it seriously impaired the defendant’s ability to defend himself.”
United States v. Lanzon, 639 F.3d 1293, 1302 (11th Cir. 2011) (citation and
quotations omitted), cert. denied, 132 S. Ct. 333 (2011). We have reviewed
Roberts’s proposed jury instructions and find that some portions are incorrect
statements of law, and the remainder of the instructions are either cumulative or
unrelated to important issues at trial. The district court’s refusal to give the
proposed jury instructions was therefore not reversible error.
II.
Next, Roberts argues that the district court erred by admitting testimony
concerning his false statements on two applications to the IRS for an electronic
filing identification number (“EFIN”). The IRS granted both applications, and
Roberts later used his EFIN to file the tax returns at issue in this case. Because
Roberts had incorrectly stated on the EFIN applications that he had never been
convicted of a crime, the district court allowed the government to present evidence
of his four prior convictions in order to demonstrate the falsity of his statement.
Roberts contends that this was error because the false statements made on the
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EFIN applications were not inextricably intertwined with the conspiracy, nor were
they admissible under Federal Rule of Evidence 404(b).
When a defendant properly preserves his claim, we review the district
court’s rulings on the admission of evidence for an abuse of discretion. United
States v. Jimenez, 224 F.3d 1243, 1249 (11th Cir. 2000). Even if there is an abuse
of discretion, we will reverse an erroneous evidentiary ruling “only if the error was
not harmless.” United States v. Bradley, 644 F.3d 1213, 1270 (11th Cir. 2011)
(alteration and citation omitted). “An error is harmless unless there is a reasonable
likelihood that it affected the defendant’s substantial rights.” Id. (alteration and
quotation omitted). We need not reverse a conviction if the evidentiary error “had
no substantial influence on the outcome, and sufficient evidence uninfected by
error supports the verdict.” United States v. Hawkins, 905 F.2d 1489, 1493 (11th
Cir. 1990).
The admission of evidence concerning uncharged criminal conduct is
governed by Federal Rule of Evidence 404, which states that evidence of “other
crimes, wrongs or acts is not admissible to prove the character of a person,” but
“may, however, be admissible for other purposes, such as proof of motive,
opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake
or accident.” Fed. R. Evid. 404(b). The structure of the rule creates a two-step
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admissibility inquiry. First, an uncharged crime or bad act may be intrinsic to the
case, and therefore outside the scope of Rule 404(b), if it is: “(1) an uncharged
offense which arose out of the same transaction or series of transactions as the
charged offense, (2) necessary to complete the story of the crime, or (3)
inextricably intertwined with the evidence regarding the charged offense.” United
States v. McLean, 138 F.3d 1398, 1403 (11th Cir. 1998) (quotation omitted).
Second, evidence regarding acts not part of the charged crimes but pertaining to
the context, motive, and set-up of the crimes is properly admitted if it is “linked in
time and circumstances with the charged crime, or forms an integral and natural
part of an account of the crime, or is necessary to complete the story of the crime
for the jury.” Id. (quotation omitted).
If the prior bad act or conviction is not intrinsic to the charged crime,
Federal Rule of Evidence 404(b) will determine its admissibility. United States v.
Veltmann, 6 F.3d 1483, 1498 (11th Cir. 1993). We apply a three-part test to
determine whether a district court abused its discretion in admitting extrinsic
evidence under Rule 404(b): (1) the evidence must be relevant to an issue other
than the defendant’s character; (2) the act must be established by sufficient proof
to permit a jury finding that the defendant committed the extrinsic act; and (3) the
probative value of the evidence must not be substantially outweighed by its undue
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prejudice and must meet the other requirements of Federal Rule of Evidence 403.
United States v. Matthews, 431 F.3d 1296, 1310–11 (11th Cir. 2005) (per curiam).
Evidence is excluded under Rule 403 “if its probative value is substantially
outweighed by the danger of unfair prejudice, confusion of the issues, or
misleading the jury.” Fed. R. Evid. 403. Rule 403 is an “extraordinary remedy,”
and its major function is to exclude “matter of scant or cumulative probative force,
dragged in by the heels for the sake of prejudicial effect.” United States v. Utter,
97 F.3d 509, 514–515 (11th Cir. 1996) (quotations omitted).
The false statements made on the EFIN applications were inextricably
intertwined as a necessary part of the conspiracy and offered to prove Roberts’s
intent, preparation, plan, and knowledge relevant to the charged crimes. “In every
conspiracy case . . . a not guilty plea renders the defendant’s intent a material issue
. . . . Evidence of such extrinsic evidence as may be probative of a defendant’s
state of mind is admissible unless he affirmatively takes the issue of intent out of
the case.” United States v. Roberts, 619 F.2d 379, 383 (5th Cir. 1980)2 (quotation
omitted). Roberts pled not guilty and denied any involvement with the conspiracy,
claiming that his e-filing of the false tax returns was by mistake or accident. The
2
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc) we
adopted as binding precedent all of the decisions of the Fifth Circuit handed down prior to
October 1, 1981.
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fact that he had previously submitted false information to the victim, the IRS, thus
was relevant to prove his intent to defraud the IRS. Additionally, the government
offered sufficient proof of the evidence, and the probative value of the evidence
was not outweighed by undue prejudice. We find no abuse of discretion by the
district court.
Moreover, any possible error by the district court was harmless, as the
testimony of Roberts’ co-conspirators, numerous taxpayers, and IRS agents
supported the jury’s guilty verdict. Accordingly, we affirm the district court’s
admission of evidence regarding Roberts’s false statements on his EFIN
applications and the corresponding misdemeanor convictions.
III.
Finally, Roberts argues that the district court incorrectly calculated the tax
loss used to determine his sentence and the restitution amount. He disputes the
use of an intended-loss measure and claims that some of the tax refunds he
submitted were not fraudulent and therefore should not have been included in the
loss calculation. We review for clear error the district court’s loss determination
for purposes of sentencing. United States v. Cabrera, 172 F.3d 1287, 1292 (11th
Cir. 1999). We also review for clear error the district court’s finding of the
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specific amount of restitution. United States v. Robertson, 493 F.3d 1322, 1330
(11th Cir. 2007).
Tax offenses sentenced pursuant to U.S.S.G. § 2T4 are calculated using a
base offense level resulting from the tax loss, as set out in the table contained in
U.S.S.G. § 2T4.1. U.S.S.G. § 2T1.4(a)(1). Tax loss is defined according to the
provisions of U.S.S.G. § 2T1.1. Id. § 2T1.4(a). U.S.S.G. § 2T1.1 states that “[i]f
the offense involved tax evasion or a fraudulent or false return, statement, or other
document, the 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).” Id. § 2T1.1(c)(1) (emphases added). “If the offense involved
improperly claiming a refund to which the claimant was not entitled, the tax loss is
the amount of the claimed refund to which the claimant was not entitled.” Id. §
2T1.1(c)(4).
Because Roberts filed fraudulent or false returns, the district court employed
an intended-loss measure, in accordance with U.S.S.G. § 2T1.1(c)(1). However,
Roberts argues that the use of the intended loss measure was clearly erroneous and
cites the language of U.S.S.G. § 2T1.1(c)(4) in support of his position. Roberts’s
argument simply amounts to a protestation that the district court did not make its
determinations in accord with U.S.S.G. § 2T1.1(c)(4). Roberts gives no
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explanation regarding why U.S.S.G. § 2T1.1(c)(4) more appropriately applies to
this case than U.S.S.G. § 2T1.1(c)(1), and offers no support for a finding of clear
error. Nor does Roberts offer any evidence of legitimate returns submitted and
properly refunded by the IRS. We therefore find no clear error in the district
court’s calculation of tax loss.
Roberts also argues that the restitution amount determined was in clear error
because it was based upon the clearly erroneous loss calculation made at
sentencing. The amount of restitution can be determined on the basis of evidence
heard during trial, undisputed statements in the Presentence Investigation Report,
or evidence presented at the sentencing hearing. United States v. Saunders, 318
F.3d 1257, 1271 n.22 (11th Cir. 2003). Because we find that the loss calculation
at sentencing was not clearly erroneous, we therefore find no merit in Roberts’s
argument that the district court clearly erred in calculating the restitution amount.
AFFIRMED.
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