United States v. Corry E. Pearson ( 2020 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-11840
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D.C. Docket No. 9:17-cr-80080-BB-1
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
CORRY E. PEARSON,
Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(October 14, 2020)
Before MARTIN, NEWSOM, and BALDOCK,∗ Circuit Judges.
BALDOCK, Circuit Judge:
∗ Honorable Bobby R. Baldock, United States Circuit Judge for the Tenth Circuit, sitting by
designation.
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Between 2012 and 2014, “Tax King” held itself out as an income tax
preparation business with its principal office located in West Palm Beach, Florida.
In May 2017, a grand jury indicted Tax King’s sole owner, director, officer, and
registered agent, Defendant Corry E. Pearson, on numerous counts of criminal
misconduct related to his role in a federal income tax fraud scheme. Following a
trial at which Defendant’s knowledge of and participation in the scheme were the
key foci, a petit jury convicted him on one count of conspiracy to commit wire fraud
in violation of 18 U.S.C. § 1349, sixteen counts of wire fraud in violation of 18
U.S.C. § 1343, eight counts of aggravated identity theft in violation of 18 U.S.C.
§ 1028A(a)(1), two counts of money laundering in violation of 18 U.S.C.
§ 1956(a)(1)(B)(i), and three counts of money laundering in violation of 18 U.S.C.
§ 1957. The district court sentenced Defendant to 100-months’ imprisonment on the
conspiracy, wire fraud, and money laundering counts, to be followed by 24-months’
imprisonment on the aggravated identity theft counts. Defendant now appeals his
convictions and sentence, raising myriad issues. Our jurisdiction arises under 28
U.S.C. § 1291 and 18 U.S.C. § 3742(a). We affirm. In so doing, we set forth the
facts only as necessary to our brief analyses of the issues.
On appeal, Defendant raises the following six issues related to his convictions:
(1) whether the district court erroneously denied Defendant’s motion for a mistrial;
(2) whether the district court erroneously denied Defendant’s motion to sever certain
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counts from the indictment; (3) whether the district court erroneously denied
Defendant’s two motions to suppress evidence; (4) whether the district court
erroneously denied Defendant’s three motions in limine; (5) whether the proof at
trial varied materially from the indictment resulting in an impermissible constructive
amendment to or variance from the indictment; and (6) whether the district court
erroneously denied Defendant’s motion for judgment of acquittal based on
insufficiency of the evidence. Defendant asks us to reverse and remand his case to
the district court with instructions to discharge him or, in the alternative, grant him
a new trial. Defendant also raises one issue related to his sentencing: whether, for
purposes of determining Defendant’s base offense level, the district court erred in
calculating the amount of loss attributable to Defendant. On this issue, Defendant
asks us to remand for resentencing.
1. Motion for Mistrial
Defendant’s trial commenced on Wednesday, August 30, 2017, with the
selection of a 15-member jury, comprised of twelve regular and three alternate
jurors. On the first three days of trial, August 31, September 1, and September 5,
the Government called nineteen witnesses, nine of whom testified to identity theft,
and introduced nearly 150 exhibits. On Wednesday, September 6, with Hurricane
Irma looming, defense counsel Stine asked the court to recess trial until after the
hurricane. Explaining the jurors would have difficulty focusing under current
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conditions, counsel commented: “I’m just asking that we just restart at some point
later whenever this ends, whatever this becomes. Because there’s no prejudice to
anybody.” Counsel further noted all of the Government’s civilian witnesses had
testified. Only Government agents had yet to testify and the defense did not intend
to call any witnesses. Co-defense counsel Hanna joined in the request as did the
Government, whereupon the court recessed for the day.
Federal courts in the Southern District of Florida were closed indefinitely
beginning on September 7 and remained closed until Monday, September 18. On
September 13, after the hurricane had passed, defense counsel Stine contacted the
court to advise of his limited availability due to the effects of the hurricane on his
home and farm. Counsel informed the court that his residence and farm were without
power or plumbing. Counsel represented that based on the storm damage to his
property, “his availability is exceptionally limited.” For this reason and due to the
court’s concerns about juror availability in the aftermath of the hurricane, the court
ordered the trial to resume on September 25, one week after the federal courts
reopened. Defendant did not object.
On Monday, September 25, the parties appeared. The court informed them
that two jurors were out of the country and would not be available until September
27. The court asked the parties if they wished to replace the two absent jurors with
alternates and proceed that day. Instead of agreeing to utilize the alternate jurors or
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delay the resumption of trial two additional days, Defendant moved for a mistrial
and arguments ensued. In an order delivered from the bench, the court observed that
the missing jurors were still under its admonition to discuss or speak about the case
with no one and that this admonition applied both within and without Miami-Dade
County. The court reasoned: “So in terms of the court’s concern that there was any
issue relating to the jurors’ travel and the effect on the Defendant’s right to a fair
trial, the court sees no argument that would have merit.”
Turning to concerns about the jurors’ recollections due to the delay, the court
explained it had permitted the jurors to take notes and had observed all the jurors,
regular and alternate, taking notes throughout the course of trial. The court further
explained that the parties would have the opportunity to remind the jury of the
evidence in their closing arguments. And with this the court issued its ruling:
So addressing each of the arguments that have been made for a
mistrial—that is, the delay, the mismanagement, the fact that two jurors
are in foreign countries, and the fact that the jurors may have not
recalled all of the testimony—the court certainly does not believe that
there has been any effect on the Defendant’s right to a fair trial, and the
motion for mistrial is denied.
The court scheduled trial to resume on Wednesday, September 27.
On direct appeal, we review the denial of a motion for a mistrial for an abuse
of discretion. Renico v. Lett, 559 U.S. 766, 772–73 (2010). “The decision whether
to grant a mistrial is reserved to the ‘broad discretion’ of the trial judge.” Id. at 774.
The district court may declare a mistrial when, “taking all the circumstances into
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consideration,” there is a “high degree” of necessity, sometimes referred to as
“manifest necessity.” Id. at 773–74 (emphasis added) (internal quotation marks
omitted). District courts “are to exercise a sound discretion on the subject; and it is
impossible to define all the circumstances which would render it proper to interfere.”
United States v. Perez, 22 U.S. 579, 579 (1824) (Story, J.). We can say however,
that the power to declare a mistrial “ought to be used with the greatest of caution,
under urgent circumstances, and for very plain and obvious [reasons].” Renico, 559
U.S. at 774 (quoting Perez, 22 U.S. at 579).
Considering all the circumstances surrounding the 22-day delay of the trial in
this case, from September 6 until September 27, as well as the extent and nature of
the evidence presented by the Government prior to the delay, we hold the district
court did not abuse its discretion in denying Defendant’s motion for a mistrial. Cf.
United States v. Hay, 122 F.3d 1233, 1235–36 (9th Cir. 1997) (where jury heard
complex, technical evidence against defendants over the course of nearly four
months, forty-eight day delay between the close of evidence and jury deliberations
deemed prejudicial). After Hurricane Irma had passed through Florida, the earliest
the court could have resumed trial would have been Monday, September 18, the day
the federal courthouse reopened. The court waited without objection until the
following Monday, September 25, in part because of defense counsel Stine’s limited
availability. On September 25, after unsuccessfully moving for a mistrial, Defendant
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agreed to an additional two-day delay because he believed the missing jurors would
be more favorable to him than the alternates. Defendant’s suggestion that the trauma
of the hurricane and the jurors’ “inevitable” memory lapses rendered them incapable
of fairly deciding his case has absolutely no support in the record. Upon
reconvening, the district court properly instructed the jury to consider all the
evidence. And the record, most notably the jury’s acquittal verdict on two wire fraud
counts, Counts 4 and 20 of the indictment, suggests this is exactly what the jury did.
We see nothing even remotely akin to an abuse of discretion in the trial judge’s
decision to deny Defendant’s motion for a mistrial.
2. Motion for Severance
Defendant has consistently claimed throughout these proceedings that while
a “significant amount” of tax fraud occurred at Tax King between 2012 and 2014,
the evidence established the fraud “could have easily occurred” without his personal
knowledge or involvement. Presumably to bolster his defense, Defendant moved
the district court to sever Count 17 and Counts 34 through 38, which he refers to as
the “Wilson Counts,” from the indictment. According to Defendant, the crimes
alleged in these counts had nothing to do with Tax King or the wire fraud conspiracy
alleged in Count 1. Count 17 alleged Defendant committed wire fraud by filing a
fraudulent, purportedly self-prepared tax return in the name of Jarez Wilson for the
2012 tax year. Counts 34 through 38 alleged Defendant laundered money procured
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from a similarly fraudulent 2011 tax-year return in Wilson’s name. Unlike the wire
fraud alleged in Count 17, the Government could not charge this fraud as a stand-
alone execution of the scheme due to the statute of limitations. The district court
denied the motion to sever based on improper joinder, as well as Defendant’s motion
for a new trial based on its failure to sever. The court reasoned the criminal act
alleged in Count 17 was “part and parcel” of the fraudulent scheme, in particular its
wire fraud and conspiracy aspects. The court further explained Counts 34 through
38 were likewise part of the tax fraud scheme because the funds that were part of the
money laundering counts arose from monies Defendant received from his execution
of the scheme in its early stages.
Defendant refers us to Federal Rules of Criminal Procedure 8(a) and 14(a) in
support of his argument. The former permits the joinder of offenses where they “are
of the same or similar character . . . , or are connected with or constitute parts of a
common scheme or plan.” Fed. R. Civ. P. 8(a) The latter provides relief from
prejudicial joinder by permitting the district court to order separate trials of counts
“[i]f the joinder of offenses . . . in an indictment . . . appears to prejudice a
defendant.” Fed. R. Civ. P. 14(a). We undertake a two-step analysis to determine
whether separate charges were properly tried together. Looking to the face of the
indictment, we first review de novo whether counts were properly joined at the outset
under Rule 8(a). United States v. Barsoum, 763 F.3d 1321, 1336–37 (11th Cir.
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2014). We then review the denial of a post-trial motion for a new trial based on the
denial of a pre-trial motion to sever for an abuse of discretion. Id. at 1336. We will
reverse the denial of a motion for a new trial only if Defendant can meet the “heavy
burden” of demonstrating he received an unfair trial due to “compelling prejudice”
as a result of the joinder. Id. at 1337.
Applying the Rule 8 standard, the Government properly joined both Counts
17 and 34 through 38 in the indictment. Count 17 is indisputably of the “same or
similar character” as the other wire fraud counts. Counts 2 through 22 all charged
Defendant with wire fraud based on the filing of fraudulent income tax returns.
Moreover, Counts 2 through 17 alleged instances of wire fraud for which Defendant
was responsible, all occurring within a two-month period in early 2013. Counts 34
through 38 were also properly joined because the allegations of money laundering
were a part of the tax fraud scheme. As the complaint alleged, the monies laundered
were “proceeds of specified unlawful activity,” i.e., wire fraud. Money laundering
was the alleged manner by which Defendant and others intended to enjoy the fruits
of their scheme. Accordingly, the Government properly joined Counts 17 and 34
through 38 to the remaining counts of the indictment consistent with Rule 8, and the
district court did not err in denying Defendant’s pre-trial motion to sever them.
Moving to the Rule 14 inquiry, our careful review of the trial transcript
confirms Defendant did not suffer “compelling prejudice” as a result of the district
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court’s decision to try the Wilson Counts with the remaining counts of the
indictment. Defendant says the Wilson Counts were not sufficiently related to the
“Tax King” Counts. In particular, Defendant is concerned the jury may have used
evidence of the former crimes, which “his fingerprints were all over,” to infer his
criminal disposition to commit the latter crimes under the Tax King facade. We are
not so concerned. Suffice to say a jury, based on the voluminous and overwhelming
evidence at trial, could easily conclude Defendant and Tax King were effectively
one and the same. The Wilson Counts were sufficiently related to the Tax King
Counts because the Government’s proof on the former tended to bear directly upon
Defendant’s knowledge of and involvement in the tax fraud scheme operated out of
Tax King’s offices.
To be sure, the Wilson Counts, in particular Counts 34 through 38, represent
the commencement of the fraudulent scheme, the complexity of which evolved over
time in an effort to conceal the identities of those involved. The plot began to form
when the IRS issued Defendant a preparer’s tax identification number (PTIN) in
January 2012. The same month, Defendant registered the fictitious name “Tax
King” with the Florida Division of Corporations. In February 2012, before Tax King
became fully operational, Defendant “tested the waters” by filing a federal income
tax return for the tax year 2011 in the name of Jarez Wilson. Defendant had
previously obtained Jarez’s information from Jarez’s mother, Irene Wilson, whom
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he informed of his intended fraud. The return represented that Jarez had prepared
and filed it himself without the assistance of a tax preparer. Like some other returns
constituting part of the scheme, the return claimed a refund based on false gambling
winnings. And like many other returns, the return claimed a refund for false wages.
Defendant, with Irene Wilson’s assistance (she later pled guilty to conspiracy to
defraud the United States by false claims), laundered the monies the two received
from Jarez’s return, which exceeded $100,000. We need not belabor the point. A
jury was entitled to find based on the evidence the Government presented that Jarez’s
false 2011 return was part of the conspiratorial scheme underlying the indictment’s
wire fraud counts. The district court did not abuse its discretion in denying
Defendant’s motion for a new trial based on its failure to sever the Wilson Counts.
3. Motions to Suppress
Before trial, Defendant also filed two motions to suppress evidence seized
pursuant to a search warrant from Tax King’s principal office located in a two-story
building at 3600 Broadway, West Palm Beach, Florida 33407. According to
Defendant’s first motion, the search warrant was unlawfully issued because the
affidavit in support thereof failed to articulate facts sufficient to establish probable
cause for the search. In his second motion, Defendant claimed the warrant did not
authorize examiners to access password-protected computer hard drives seized
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during the search. Following a hearing, the district court denied both motions from
the bench.
A district court’s ruling on a motion to suppress presents a mixed question of
law and fact. We review findings of fact for clear error and the application of the
law to the facts de novo. United States v. Shabazz, 887 F.3d 1204, 1213 (11th Cir.
2018). We construe all facts in the light most favorable to the party that prevailed
below, in this case the Government. Id. The law requires us to give great deference
to a district courts’ determination of probable cause. Id. at 1214. Specifically, an
affidavit in support of a search warrant only need contain information sufficient to
establish (1) a connection between the defendant and the place to be searched and
(2) a fair probability evidence of the suspected crime will be found. Id.
Defendant’s claim that the affidavit in support of the warrant failed to
establish probable cause is meritless. The eleven page affidavit set forth in great
detail the basis for probable cause. To summarize, a large number of federal income
tax returns, resulting in tax refund claims, had been electronically submitted within
the conspiracy’s applicable time frame using the Electronic Filing Identification
Number (EFIN) belonging to Tax King. The July 2012 EFIN application listed
Defendant as the responsible official and primary contact for Tax King. The returns
were filed from an IP address assigned to the building in which Tax King’s principal
office was located at 3600 Broadway in West Palm Beach. The affidavit specifically
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referenced three returns for the 2013 tax year submitted under Tax King’s EFIN.
Each return claimed taxpayer wages of around $25,000 and consequent refunds for
unemployed individuals incarcerated by the State of Florida during the applicable
time period, all the victims of identity theft. As of early February 2014, 283 returns
for the 2013 tax year had been electronically submitted to the IRS under Tax King’s
EFIN. All 283 submitted returns requested tax refunds. Agents had observed
Defendant and Stephane Anor, a tax preparer ostensibly employed by Tax King
(who subsequently pled guilty to conspiracy to commit wire fraud associated with
the scheme), outside Tax King’s office building. Some tax returns submitted under
Tax King’s EFIN listed Anor’s PTIN. The affidavit in support of the search warrant
undoubtedly established a fair probability agents would find evidence of criminal
tax fraud associated with Defendant at Tax King’s West Palm Beach office.
Defendant’s claim that the Government needed an additional warrant to
search the contents of the computers seized from Tax King because they were
password protected is similarly without merit. Defendant cites no authority to
support his proposition, and we have found none. The warrant authorized the seizure
of “[c]omputers, electronic devices, or digital or electronic storage media” that might
contain items whose seizure the warrant authorized. The warrant further authorized
the seizure of “passwords, encryption keys, and other access devices that may be
necessary to access the computers.” This language indicates officials were
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authorized under the warrant to access the computers by necessary means.
Moreover, the warrant’s language is consistent with Federal Rule of Criminal
Procedure 41(e)(2)(B), which authorizes the review of information stored on
computers seized pursuant to a warrant: “A warrant . . . may authorize the seizure
of electronic storage media or the seizure or copying of electronically stored
information. Unless otherwise specified, the warrant authorizes a later review of the
media or information consistent with the warrant.” Fed. R. Civ. P. 41(e)(2)(B). The
district court committed no legal error in denying Defendant’s motions to suppress.
4. Motions in Limine
Defendant next claims the district court committed three evidentiary errors
that rendered his trial fundamentally unfair, thus entitling him to a new trial. His
first two claims are meritless. Defendant says both the introduction of and reference
to statements of his co-conspirator Anor at trial violated his constitutional rights to
confrontation and fundamental fairness. But Defendant does not point out where
such evidence was introduced during trial, and the Government represents the court
admitted no such evidence. Our review of the trial transcript confirms the
Government’s representation, and Defendant does not suggest otherwise in his reply
brief. Defendant also says the Government improperly called IRS expert
“witness(es)” to testify at trial that the tax returns alleged in the indictment were
fraudulent. Again, Defendant does not tell us what this expert testimony was or
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point out in the record where we can find such testimony. The Government responds
that prior to trial the district court precluded any of its experts from proffering an
opinion as to fraudulent activity and, therefore, the Government did not seek to
introduce such evidence. Defendant makes no effort to rehabilitate his argument in
his reply brief.
Defendant lastly claims he suffered “severe prejudice” when the district court
permitted the Government to introduce evidence of uncharged, allegedly false tax
returns at trial contrary to Federal Rule of Evidence 404(b) and the rules of intrinsic
evidence. According to Defendant, the Government intended such evidence to give
the impression that Defendant personally filed these returns when these returns did
not contain Defendant’s PTIN. But Defendant does not discuss any particular
uncharged return or cite us to the record, so we are left to ponder how the evidence
about a particular return unfairly prejudiced his defense.
In any event, regardless to what specific evidence Defendant refers, this Court
“repeatedly has held that evidence of uncharged conduct that is part of the same
scheme or series of transactions and uses the same modus operandi as the charged
offenses is admissible as intrinsic evidence outside the scope of Rule 404(b).”
United States v. Ford, 784 F.3d 1386, 1394 (11th Cir. 2015). We review the
admission of such evidence only for an abuse of discretion. Id. Our record review
reveals that all evidence of returns not referred to in the indictment—well in excess
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of 1,000, maybe closer to 2,000, were submitted to the IRS over the course of the
conspiracy—were filed within the time frame of the conspiracy using the same
sundry methods as those returns referenced in the indictment. These uncharged
returns formed an integral part of the conspiracy, whether (1) filed as self-prepared,
(2) filed in the name of conspirators or sham tax preparers ostensibly employed by
Tax King, or (3) filed through another company controlled by Defendant known as
NPN Multiservices. The evidence of uncharged fraudulent returns undoubtedly was
probative evidence “inextricably intertwined” with the scheme charged in the
indictment. Id. As such, the district court did not abuse its discretion in admitting
evidence of such returns.
5. Constructive Amendment / Material Variance
Continuing on, Defendant cursorily argues that he is entitled to a judgment of
acquittal because a constructive amendment to the indictment occurred as a result of
evidence the Government presented at trial relating to a number of the wire fraud
counts. A constructive amendment, which constitutes per se reversible error,
“occurs when the essential elements of the offense contained in the indictment are
altered to broaden the possible bases for conviction beyond what is contained in the
indictment.” United States v. Holt, 777 F.3d 1234, 1261 (11th Cir. 2015). The
totality of Defendant’s argument is just this: The indictment alleged Defendant
“transmitted or caused to be transmitted” the returns that were the subject of the wire
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fraud counts when the evidence showed it was someone else who prepared these
returns. Defendant, however, fails to enlighten us as to why he, under the auspices
of Tax King or any related entity with which he was closely involved, could not
cause the transmission of a tax return that did not name him as its preparer. The
perfunctory nature of Defendant’s argument constitutes a waiver of such argument.
E.g., United States v. Woods, 684 F.3d 1045, 1064 n.23 (11th Cir. 2012); see also
Fed. R. App. P. 28(a)(8)(A) (Arguments contained in an appellant’s opening brief
must include “appellant’s contentions and the reasons for them, with citations to the
authorities and parts of the record on which the appellant relies.”).
Defendant makes the related argument that a variance occurred when the
Government presented evidence of fraudulent returns submitted to the IRS by way
of a tax preparation business known as NPN Multiservices (NPN). According to
Defendant, the Government attributed all the fraudulent filings related to NPN to
Defendant even though the indictment did not allege those filings were attributable
to him. A variance occurs when the facts proved at trial deviate from the facts stated
in the indictment but the essential elements of the offense are the same. Holt, 777
F.3d at 1261. The two sets of facts must correspond to ensure the defendant receives
proper notice of the charges against which he must defend and is protected against a
later prosecution for the same offense. Id. A variance requires reversal only when
the defendant can establish his rights were substantially prejudiced. Id.
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The Government points out, and Defendant does not assert otherwise, that he
did not present his variance claim in the district court, so our review is for plain error.
To demonstrate plain error, Defendant must show (1) an error, (2) that is plain, and
(3) that affects his substantial rights. United States v. Deason, 965 F.3d 1252, 1265
(11th Cir. 2020). If these three conditions are met, we may then exercise our
discretion to notice a forfeited error, but only if the error seriously affects the
fairness, integrity, or public reputation of judicial proceedings. Id. As an exception
to the contemporaneous objection rule, the plain error rule places a demanding
standard before Defendant which he does not even argue he can meet. Id.
At trial, the Government presented evidence that numerous fraudulent returns
were filed by NPN. NPN was a fictitious company name registered to an individual
known as Napoly St. Fleurant, with its principal place of business listed as 902 West
7th Street in West Palm Beach. The IRS issued St. Fleurant an EFIN in January
2014. Shortly thereafter, fraudulent tax returns for the 2013 tax year were filed using
this EFIN and an internet connection registered to NPN. One of those returns was
charged in Count 22 (on which the Government agreed to a judgment of acquittal
following trial) as part of the wire fraud scheme. The district court also admitted
evidence of similarly fraudulent NPN returns not identified in the indictment.
The evidence at trial linked these fraudulent returns to Tax King and, in turn,
Defendant. For instance, Kyle Dye, a victim of identity theft, purportedly prepared
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the returns filed through NPN. Kyle is the late husband of Linda Dye, also a victim
of identity theft and an individual listed as preparing fraudulent returns for Tax King.
Perhaps even more injurious to Defendant is the fact that during the search of Tax
King’s principal office, agents located a Comcast modem together with a work order
stating the modem belonged to NPN. The work order stated NPN was located in a
suite next to Tax King in the same building at 3600 Broadway in West Palm Beach.
But the evidence showed NPN had never been located anywhere in the building.
Thus, the Government reasonably posited that Defendant knew about and was
responsible for causing the transmissions of fraudulent returns filed through NPN.
Defendant asserts the Government never alleged or indicated in the indictment
that it would attribute the returns associated with NPN to him. But Defendant does
not dispute that the indictment charged him with a count of wire fraud based on a
fraudulent return filed by way of NPN. Nor does he dispute the Government’s
statement that he received pretrial discovery and notice about NPN and its tax
returns, evidence which he now says prejudiced him. Defendant was neither
unjustifiably nor substantially prejudiced by evidence of the NPN returns because
the Government established the fraud associated with such returns was part of the
tax fraud scheme in which Defendant played a significant part. The district court
thus did not err by denying Defendant any relief based on his claim of variance.
VI. Sufficiency of the Evidence
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As a final challenge to his convictions, Defendant broadly posits that a jury
could not find him guilty beyond a reasonable doubt of any criminal conduct—not
wire fraud, conspiracy to commit wire fraud, aggravated identity theft, or money
laundering—based on the evidence the Government presented at trial. Therefore,
Defendant says the district court erred in denying him a judgment of acquittal on all
thirty counts of conviction. We review challenges to the sufficiency of the evidence
in criminal cases de novo, viewing the evidence in the light most favorable to the
Government. United States v. Estrada, 969 F.3d 1245, 1265 (11th Cir. 2020). If a
reasonable trier of fact could find the defendant guilty beyond a reasonable doubt
based on the evidence presented at trial, then the evidence is sufficient. Id. at 1265–
66. We assume the jury made all credibility choices in support of the verdict and
accept all reasonable inferences tending to support the Government’s case. Id. at
1266. Putting forth a hypothesis of innocence does not establish the Government’s
evidence was insufficient. Id. The question is not whether a jury could have
acquitted Defendant, but rather, whether a reasonable jury could have found
Defendant guilty beyond a reasonable doubt on the charges presented. Id.
Defendant tells us he opened Tax King “to prepare returns for individuals and
to help them obtain fast tax refunds when applicable. He did not open the business
knowing other unscrupulous people would use him as a conduit for tax fraud.”
Carefully avoiding any discussion of the record facts or the reasonable inferences a
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jury could draw in the Government’s favor, Defendant’s story is that he was merely
“the officer of a company that failed to exercise ‘ordinary prudence’ over the control,
maintenance, and operation of his business.” The voluminous trial transcript
consisting of over 1,000 pages which we have carefully read and studied, paints a
different picture. The district court concluded the evidence in support of the jury’s
verdict was “overwhelming” on all counts. The court was correct. As the
Government pointed out to the jury, this case is not about a legitimate tax preparation
business where some fraud was occurring. This case is about “a massive fraudulent
scheme masquerading as a tax preparation business.” Anyone who has read the trial
transcript would be hard-pressed to disagree.
The evidence showed that early in 2012 Defendant registered himself as
owner of Tax King, later incorporated Tax King, and served as its sole officer and
director. Defendant was Tax King’s sole registered agent and signatory on its bank
account. He rented Tax King’s principal office space in West Palm Beach. The rent
included an IP address from which fraudulent tax returns were filed. Defendant
applied for Tax King’s EFINs and his own PTIN. Tax King had EFINs assigned to
its principal office and later to two Florida satellite offices, one of which was located
at Defendant’s home in Riviera Beach and the other in Orlando. By all record
appearances, Defendant was in charge of Tax King’s operations.
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Defendant and at least one other individual commenced the criminal phase of
the scheme for the tax year 2011 in early 2012. We have already mentioned in our
discussion of Defendant’s severance claim how he and Irene Wilson agreed to
defraud the IRS by filing a fraudulent 2011 tax return in the name of her son, Jarez,
from an IP address assigned to 3600 Broadway in West Palm Beach. And how they
then laundered the six-figure proceeds—over $80,000 of which ended up in
Defendant’s bank account—beginning with a deposit into Irene’s PBC Credit Union
checking account. Next, one day after submission of Wilson’s return, the IRS
received the purported 2011 return of Reshon Mathis. Like Wilson’s return,
Mathis’s return was filed from Tax King’s IP address and reported gambling
winnings based on a false Form W-2G. This return claimed a refund of over
$86,000. The IRS rejected Mathis’s return and did not pay the requested refund.
Shortly thereafter, a 2011 return in the name of Sharon Moore requesting a refund
of nearly $41,000 was submitted to the IRS through the same IP address. The return
requested Moore’s refund be deposited into an account at TD Bank in the name of
Cessaley Pearson, notably an individual who shared Defendant’s surname. The
address listed on the account was Defendant’s home address in Riviera Beach,
Florida. Someone had opened the TD Bank account just one day before submission
of Moore’s tax return to the IRS. Again, the IRS refused to pay the requested refund.
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The same bank account, which was opened with a $20 deposit, was closed six days
later with a $20 withdrawal.
The scheme progressed in 2013 to where fraudulent 2012 tax year returns
would identify Tax King as their source. Some of the returns, around ninety that the
IRS initially accepted, identified Defendant as the preparer. Others identified
Stephane Anor as preparing them. (Recall Anor was a so-called Tax King employee
who was charged in this case with conspiracy to commit wire fraud before pleading
guilty.) Still other returns identified victims of identity theft, namely Linda Dye and
Febe Barthe, as return preparers. In December 2012, Tax King opened an account
with Drake Software. Tax King used Drake’s tax preparation software and services
to file tax returns for the 2012 and 2013 tax years. The IRS rejected over half of
those returns outright. Defendant was Tax King’s sole point of contact for Drake
and spoke frequently with its representatives for assistance. Tax King also opened
accounts with Advent Financial Services and EPS Financial, both of which provided
a means for a taxpayer to pay a tax preparation fee from a tax refund with the
remaining balance then issued on a debit card—ideal for “clients” whose identities
were stolen. These two accounts listed Defendant as the sole contact for Tax King
and his home address as Tax King’s mailing address. An EPS representative
testified that Tax King’s funding ratio during the latter part of the scheme was 15%.
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This meant the IRS was issuing refunds in only 15% of Tax King’s returns with
which EPS was involved. A funding ratio lower than 60% raised a “red flag.”
For the 2012 tax year, Tax King filed over 1,000 tax returns with the IRS
seeking refunds totaling over $4 million. No Tax King return showed federal tax
owing. The IRS paid a refund on 292 of those returns totaling just under $1 million.
For the 2013 tax year, Tax King filed over 500 federal returns seeking refunds
totaling just under $2 million. Once again, no Tax King return showed federal tax
owing. The IRS paid a refund on 99 of those returns totaling just under $400,000.
Many Tax King returns for this tax year were fraudulent in one or more respects.
Some constituted outright taxpayer identify theft as established by the trial testimony
of numerous victims of the scheme. Other returns overstated the amount of a
taxpayer’s earned income. Fake W-2s exaggerating the amount of tax withheld often
accompanied these returns. Or, as in the case of multiple returns Defendant
personally prepared, the returns outright lied about the taxpayer’s place of
employment. Tax King even filed fraudulent returns in the names of unemployed
incarcerated individuals. In other instances, Tax King returns sought refunds using
the American Opportunity Tax Credit (AOTC). The AOTC is an education credit
of up to $2,500 that allows an eligible taxpayer incurring educational expenses to
claim a $1000 refund even if the taxpayer owes no tax. Tax King filed hundreds of
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returns claiming this credit for both the 2012 and 2013 tax years. In most instances,
the credit had no basis in fact whatsoever.
The 2013 tax year was Tax King’s last. NPN, the fictitious tax preparation
business we addressed in our discussion of Defendant’s variance claim, appeared as
part of the scheme in January 2014. Over the course of two days that same month,
NPN filed 146 federal returns claiming about $450,000 in refunds. Two months
later, on March 12, 2014, agents executed a search warrant for Tax King’s West
Palm Beach office on a weekday afternoon during tax season. Notably, no one was
present at the small one room office. Taped on the inside of the office building’s
front door was a sign that read: “Please call Stephane at (561) 260-8778 or Corry at
(561) 255-7840.” A placard inside the building also identified Stephane Anor and
Defendant Corry Pearson and listed their phone numbers. The placard advertised:
“Tax King. Get the most out of your refund. . . . Fast, affordable, reliable tax pros.
W-2 and last check accepted. Mobile services.” Somewhat more detailed flyers to
the same effect were found on a table in the building’s hallway.
Inside Tax King’s office, agents seized a large quantity of incriminating
evidence. We have already noted that inside the office agents located a Comcast
modem and work order stating the modem belonged to NPN. Among other items,
agents also found (1) records of three supposedly self-prepared returns that would
have no reason to be in the files of a tax preparation service; (2) numerous copies of
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fraudulent tax returns, some of which listed Defendant as the preparer; and (3) a
number of fake driver’s licenses. Forensic analysis of two computers seized from
the office revealed someone had used the computers to search businesses and
educational institutions and even “dead people.” The computers contained no
financial data, accounting records, or payroll information for Tax King despite the
fact it had “earned” $165,000 in tax preparation fees over the course of two years.
After agents executed the search warrant on March 12, Defendant’s landlord, Keith
Miller, never saw or heard from Defendant again. As of March 19, 2014, Tax King’s
bank account, on which Defendant was the sole signatory, contained $67,178.80.
After one cash withdrawal on March 21 and three withdrawals on March 26, the
account’s remaining balance was $178.80.
Despite all the foregoing evidence and much more we have not recited in the
interest of time and space, Defendant asserts a reasonable jury could not find he had
any knowledge of the criminal wrongdoing alleged in the indictment. Regarding the
sixteen counts of wire fraud and one count of conspiracy to commit the same,
Defendant says the Government presented no direct evidence that he prepared or
filed any tax returns on behalf of those individuals described in the wire fraud counts,
or that he knowingly and voluntarily agreed with anyone to achieve the unlawful
objective of a wire fraud scheme. Evidence supporting Defendant’s convictions,
however, may be direct or circumstantial, and we do not distinguish between the
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weight given either sort of evidence. United States v. Guevara, 894 F.3d 1301, 1307
(11th Cir. 2018).
To prove wire fraud, the Government was not required to prove Defendant
personally prepared those fraudulent returns identified in the wire fraud counts or
personally transmitted them over wire. The Government could prove wire fraud by
establishing Defendant knowingly devised a scheme to defraud and caused a writing
to be transmitted over wire for the purpose of executing such scheme. United States
v. Feldman, 931 F.3d 1245, 1257 (11th Cir. 2019). The Government could prove a
conspiracy to commit wire fraud by establishing Defendant agreed with another to
pursue the scheme’s unlawful objective. Id. at 1257–58. The jury heard evidence
about Defendant’s knowledge of and participation in the scheme in its early stages,
most notably the testimony of Irene Wilson. The jury also heard a voluminous
amount of evidence, outlined above, giving rise to reasonable inferences bearing on
Defendant’s guilt, namely that he was significantly involved in all of Tax King’s
operations and that he agreed with others such as Irene Wilson and Stephane Anor
to carry out the scheme.
A reasonable jury could readily find based on the evidence presented that
Defendant knowingly devised a scheme to defraud the Government of money and
participated in a conspiracy to achieve the same. See United States v. Langford, 647
F.3d 1309, 1320 (11th Cir. 2011) (wire fraud encompasses a defendant’s intentional
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participation in a scheme to defraud another of money). Assuming, as the law
requires, that the jury made all credibility choices in support of the verdict and
accepted all reasonable inferences tending to support the Government’s case,
Estrada, 969 F.3d at 1265, the record evidence establishes beyond a reasonable
doubt that Defendant was aware of and understood the nature of the wire fraud
scheme and was instrumental in perpetrating it in agreement with others.
With this analysis upholding his wire fraud convictions, Defendant’s
argument regarding the sufficiency of the evidence on the five counts of money
laundering necessarily falters. His argument on those counts is simply “inasmuch
as there was insufficient evidence to prove the offenses concerning wire fraud, these
money laundering counts must fall as well.” This leaves us with Defendant’s
challenge to the eight counts of aggravated identity theft. Again, Defendant
concedes the commission of these crimes, each of which was tied to a wire fraud
count, but insists he was not involved. And again, just like the wire fraud counts,
the Government’s evidence permitted the jury, albeit through reasonable inferences
drawn from circumstantial evidence, to conclude otherwise.
The district court instructed the jury that to establish a violation of the identity
theft statute, 18 U.S.C. § 1028A(a)(1), the Government had to prove Defendant (1)
knowingly transferred, used, or possessed (2) the means of identification of another
person, (3) knowing the means of identification belonged to another, (4) without
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lawful authority (5) during and in relation to a felony enumerated in §1028A(c), one
of which is wire fraud. United States v. Hurtado, 508 F.3d 603, 606–07 (11th Cir.
2007), abrogated in part by Flores-Figueroa v. United States, 556 U.S. 646, 647
(2009) (recognizing the element that a defendant must know the means of
identification at issue belonged to another). Importantly, however, the court also
instructed the jury that Defendant could be found guilty of the substantive offense if
the jury found he aided and abetted such offense in violation of 18 U.S.C. § 2. Thus,
the jury could find Defendant guilty of aggravated identity theft even if Defendant
did not perform every act necessary to commit the crime. United States v. Sosa, 777
F.3d 1279, 1293 (11th Cir. 2015). Under subsection 2(b), Defendant was liable for
aggravated identity theft (as well as the other substantive crimes charged in the
indictment) if the evidence was sufficient for a reasonable jury to conclude he
“willfully cause[d] an act to be done which if directly performed by him or another
would be an offense against the United States.” 18 U.S.C. §2(b).
We have already explained that the evidence presented, both direct and
circumstantial, established Defendant’s knowing participation in a scheme to
defraud the Government of money. The evidence further established that the scheme
consisted in substantial part of misusing the identities of real taxpayers. Defendant’s
extensive involvement in Tax King’s operations—operations that appear almost if
not entirely illegitimate—coupled with the sizable cache of falsified personal
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documents located in its principal office and the evidence of identity theft associated
with its business, permitted the jury to infer that the aggravated identity theft alleged
in the indictment occurred with the oversight and under the direction of Defendant
in violation of 18 U.S.C. §§ 1028A(a)(1) & 2. Accordingly, the district court did
not err in denying Defendant’s motion for judgment of acquittal in its entirety.
VII. Amount of Loss Calculation
The final issue Defendant raises pertains to his sentence. At sentencing, the
district court adopted a revised pre-sentence investigation report (PSI) and found
Defendant intended to cause a loss of $5,173,274. The court applied an 18-level
upward adjustment to his base offense level because the loss was more than $3.5
million but not more than $9.5 million. U.S.S.G. § 2B1.1(b)(1)(J). Defendant’s
final adjusted offense level was 31. Coupled with a criminal history category of I,
Defendant’s guideline range was 108 to 135 months, plus a mandatory 24-month
consecutive sentence for the aggravated identity theft counts. The court granted
Defendant a slight variance from the guideline range and sentenced him to 124
months in prison.
Prior to sentencing, Defendant generally objected to “any and all purported
factual assertions contained with the [PSI] in its entirety.” Defendant’s only specific
objection to the PSI’s calculation of intended loss involved losses attributable to
three tax returns charged in counts on which the Government agreed to a judgment
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of acquittal following trial. The entire loss amount to which Defendant objected was
$11,609.00, which he acknowledged would not affect the upward adjustment. The
district court denied the specific objection and asked Defendant if he would make
any further arguments “other than a general objection.” New defense counsel (now
court-appointed as a result of Defendant’s indigency) informed the court that “[a]t
this point, we’re not in a position to argue anything specific to the court.” The court
commented that Defendant’s general objection was insufficient to allow it to make
a “full determination” of loss. Rather, “based on the [trial] testimony . . . , the court
overrule[d] the general objection to the loss amount.”
With nary a citation to the record, Defendant presents his opening appellate
argument challenging the court’s loss calculation in one sentence: “[T]he trial court
erred at the sentencing hearing by attributing the entire loss amount of the alleged
conspiracy to the Defendant without limiting the loss amount to the Defendant’s
specific relevant conduct, nor did the court make a finding as to what losses were
reasonably foreseeable.” Defendant neither identifies his relevant conduct nor tells
us what losses that the court attributed to him were not reasonably foreseeable. Once
again, the perfunctory nature of Defendant’s sentencing argument in his opening
brief constitutes a waiver of such argument. Woods, 684 F.3d at 1063 n.23; Fed. R.
App. P. 28(a)(8)(A). But even assuming otherwise, Defendant acknowledges we
would review the district court’s acceptance of the PSI’s loss calculation only for
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plain error. Yet Defendant make no argument to suggest the district court plainly
erred by doing so other than to say “[i]n this instance, the Defendant had
demonstrated clear and plain error.” Defendant needed to tell us with some
particularity how his own loss calculation amounts to less than $3,500,000, such that
he suffered any substantial prejudice from the 18-level enhancement to his base
offense level. This he has not done.
***
For all the foregoing reasons, the district court’s judgment of conviction and
sentence is AFFIRMED.
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