United States v. Richard Jaensch , 552 F. App'x 206 ( 2013 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-4358
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
RICHARD JAENSCH,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:11-cr-00158-GBL-1)
Argued: September 20, 2013 Decided: November 14, 2013
Before GREGORY and DUNCAN, Circuit Judges, and Samuel G. WILSON,
United States District Judge for the Western District of
Virginia, sitting by designation.
Vacated in part, affirmed in part, and remanded with
instructions by unpublished opinion. Judge Duncan wrote the
opinion, in which Judge Gregory and Judge Wilson joined.
ARGUED: Alan J. Cilman, Fairfax, Virginia; Marvin David Miller,
LAW OFFICE OF MARVIN D. MILLER, Alexandria, Virginia, for
Appellant. Gregory Victor Davis, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Kathryn
Keneally, Assistant Attorney General, Frank P. Cihlar, Chief,
Criminal Appeals & Tax Enforcement Policy Section, Elissa Hart-
Mahan, Tax Division, Washington, D.C., Alexander R. Effendi, Tax
Division, UNITED STATES DEPARTMENT OF JUSTICE, Alexandria,
Virginia; Neil H. MacBride, United States Attorney, OFFICE OF
THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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DUNCAN, Circuit Judge:
Richard Earl Jaensch was convicted by a federal jury of one
count of corruptly endeavoring to impede the due administration
of the tax laws under 18 U.S.C. § 7212(a), (“Count 1”), one
count of filing a false claim for a refund under 18 U.S.C. §
287, (“Count 2”), and four counts of willful failure to file a
tax return under 26 U.S.C. § 7203, (“Counts 3-6”). He was
sentenced to thirty-six months’ imprisonment and two years’
supervised release for Count 1, thirty-six months’ imprisonment
and two years’ supervised release for Count 2, and twelve
months’ imprisonment and one year’s supervised release for each
of Counts 3, 4, 5, and 6. All sentences were to run
concurrently for a total term of thirty-six months’ imprisonment
and two years’ supervised release.
Jaensch appeals Counts 1 and 2 on substantive grounds and
appeals all of his convictions on the basis of evidentiary and
instructional errors. For the reasons that follow, we vacate
Jaensch’s conviction under Count 1, affirm as to all other
counts and remand for rehearing of Count 1 and resentencing of
all counts.
3
I.
A.
Beginning in 2001, Jaensch stopped paying federal income
taxes. Although he earned income as a self-employed plumber,
Jaensch did not file federal income tax returns for the taxable
years of 2002 through 2008. Jaensch prevented the individuals
who hired him for plumbing projects from filing tax documents by
withholding his social security number. He joined a tax-
protestor organization and attended tax-protest seminars.
Although Jaensch consulted a professional accountant who
informed him that his beliefs concerning his liability for
federal income taxes were meritless, he did not resume paying
his taxes.
Based on his tax theories, Jaensch filed or caused his wife
to file a number of documents purporting to support his and her
tax-exempt statuses with state and federal agencies from 2005 to
2009. Among other documents, on April 15, 2009, Jaensch filed a
tax return for the 2008 taxable year claiming a refund of
$774,052.00. On July 22, 2009, the IRS sent Jaensch a letter
informing him that his refund claim was frivolous and that he
was required to submit a corrected tax return within 30 days to
avoid a civil penalty. Jaensch submitted a second 2008 tax
return in August of 2009 reporting $113.00 in taxable income.
Jaensch was indicted on March 23, 2011.
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B.
Jaensch filed numerous pretrial motions seeking to dismiss
the indictment in whole and in part, to strike surplusage in the
indictment, and to admit witnesses as experts. The district
court denied Jaensch’s motions to dismiss, granted his motion to
strike surplusage from Count 1, and disallowed his proposed
expert testimony.
At trial, Jaensch objected to the district court’s decision
to admit evidence of his prior conviction for production of a
false identification document under 18 U.S.C. § 1028(a) and its
decision to exclude, in part, the lay testimony of witness
Brandon Eggleston, one of Jaensch’s employers. Jaensch also
objected to the jury instructions on a number of grounds. The
district court overruled all of Jaensch’s objections, and this
appeal followed.
II.
Jaensch raises a number of arguments on appeal. He
challenges the district court’s refusal to dismiss Count 1 on
facial and as-applied constitutional grounds. He also
challenges the district court’s refusal to dismiss Count 2 on
the ground that the Government was estopped from prosecuting him
on that charge. He argues that the district court’s evidentiary
rulings concerning his prior conviction and the exclusion of his
5
lay and expert witness testimony constituted abuses of
discretion. Finally, he contends that the district court’s jury
instructions improperly stated and defined the elements of Count
1, improperly failed to give a good faith instruction on Count
2, and incorrectly defined good faith as it applied to Counts 1,
3, 4, 5, and 6.
We review a challenge to the constitutionality of a statute
de novo. United States v. Sun, 278 F.3d 302, 308 (4th Cir.
2002). We review the district court's ruling on a motion to
dismiss an indictment de novo. United States v. Al Sabahi, 719
F.3d 305, 309 (4th Cir. 2013). We review evidentiary rulings
for abuse of discretion and “‘will only overturn an evidentiary
ruling that is arbitrary and irrational.’” United States v.
Cone, 714 F.3d 197, 219 (4th Cir. 2013) (quoting United States
v. Cloud, 680 F.3d 396, 401 (4th Cir. 2012)). “[We] review a
district court's refusal to give a jury instruction for abuse of
discretion ... [however] we conduct a de novo review of any
claim that jury instructions incorrectly stated the law.”
United States v. Mouzone, 687 F.3d 207, 217 (4th Cir. 2012)
(internal citations omitted).
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III.
A.
We turn first to Jaensch’s conviction under Count 1 of the
indictment, charging a violation of 18 U.S.C. § 7212(a). Count
1 alleges Jaensch “did corruptly endeavor to obstruct and impede
the due administration of the internal revenue laws by
committing acts including but not limited to” those listed. The
indictment then lists thirteen acts that Jaensch allegedly
committed in an attempt to obstruct or impede administration of
the Internal Revenue Code. Jaensch assigns a number of
substantive and procedural errors to this Count. Because we
conclude that Jaensch’s Count 1 conviction must be vacated on
the ground that the district court misstated the law in its jury
instructions, we need not address Jaensch’s remaining arguments.
We review jury instructions “holistically”; a “‘single
instruction to a jury may not be judged in artificial isolation,
but must be viewed in the context of the overall charge.’” Noel
v. Artson, 641 F.3d 580, 586 (4th Cir. 2011) (quoting Henderson
v. Kibbe, 431 U.S. 145, 152 n.10 (1977)). We must determine
“‘whether the instructions construed as a whole, and in light of
the whole record, adequately informed the jury of the
controlling legal principles without misleading or confusing the
jury to the prejudice of the objecting party.’” Id. (quoting
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Bailey v. Cnty. of Georgetown, 94 F.3d 152, 156 (4th Cir.
1996)).
A “failure to properly instruct on an element of the
offense is a constitutional error subject to harmlessness
review.” Bereano v. United States, 706 F.3d 568, 578 (4th Cir.
2013). “We find an error in instructing the jury harmless if it
is ‘clear beyond a reasonable doubt that a rational jury would
have found the defendant guilty absent the error.’” United
States v. Ramos-Cruz, 667 F.3d 487, 496 (4th Cir. 2012) (quoting
Neder v. United States, 527 U.S. 1, 18 (1999)).
In this case, the district court’s instruction on Count 1
misled the jury as to the controlling law and we cannot say that
the error was harmless. To prove a violation of § 7212(a), “the
government must prove that the defendant: 1) corruptly; 2)
endeavored; 3) to obstruct or impede the administration of the
Internal Revenue Code.” United States v. Wilson, 118 F.3d 228,
234 (4th Cir. 1997). To act corruptly is to act “with the
intent to secure an unlawful benefit either for oneself or for
another.” Id.
The district court’s instructions do not properly explain
the Government’s burden to the jury. Violation of § 7212(a) is
a crime of specific intent. A defendant must not only endeavor
to impede due administration but must do so with the specific
intent to secure an unlawful benefit. See Wilson, 118 F.3d at
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234. Although the district court correctly defined “due
administration,” “obstruct or impede,” and “corruptly,” it
instructed the jury that it could convict Jaensch by finding
that he committed acts listed in the indictment without finding
that he committed those acts with the requisite intent to secure
an unlawful benefit.
The jury instructions state, in relevant part, that:
If the jury concludes that the government did prove
beyond a reasonable doubt that one, the defendant
employed at least one act set forth in Section 1-M
through U of the indictment and that the defendant did
commit an act identified in Section 1-V through Y of
the indictment, and two, that the defendant acted
knowingly and intentionally, then the jury must find
the government [sic] guilty of the offenses in Count 1
of the indictment.
J.A. 608.
This instruction improperly transforms violation of §
7212(a) into a crime of general intent. The import of the
instruction as given is that the jury should convict if it finds
that Jaensch committed acts listed in the indictment knowingly
and intentionally, not that he committed them for a specific
purpose or to achieve a specific result.
The Count 1 instruction, when viewed in light of the entire
record, misled the jury as to the controlling legal principles
necessary to make its determination. Because Jaensch argued
that he acted in good faith, we cannot say beyond a reasonable
doubt that a rational jury would have convicted Jaensch under
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the stringent specific intent standard required by § 7212(a)
merely because it convicted him under a lesser general intent
standard. Jaensch’s conviction under Count 1 of the indictment
will be VACATED and remanded for further proceedings. 1
B.
We turn next to Count 2 of the indictment. Jaensch argues
that the district court erred by refusing to dismiss Count 2 on
the ground of promissory estoppel and by failing to give a good
faith instruction as to that count.
i.
Jaensch contends that the district court erred by refusing
to dismiss Count 2. He argues that the Government was estopped
from prosecuting him for filing a false refund claim because the
letter he received from the IRS was an offer not to pursue
criminal penalties that became a binding contract when Jaensch
accepted it by abandoning his false claim and filing a corrected
return. We disagree.
The IRS letter makes no mention of any possible criminal
sanctions. Contrary to Jaensch's arguments, it also does not
state that Jaensch's misconduct subjected him to exclusively
1
We have considered whether the erroneous instruction in
Count 1 could have affected the remaining counts and have
concluded that it could not. Jaensch has not argued that it
could have, nor could he convincingly do so on these facts.
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civil sanctions or that he would be relieved from all possible
sanctions of any kind by filing a corrected tax return.
Therefore, the IRS letter cannot reasonably be read as an offer
or promise to forgo criminal prosecution, and the district court
did not err by refusing to dismiss Count 2 of the indictment on
the ground of promissory estoppel.
ii.
Jaensch also argues that the district court’s refusal to
give a good faith instruction on Count 2 constituted an abuse of
discretion.
Jaensch’s argument is precluded by our precedent. Pursuant
to Count 2, the district court instructed the jury that the
Government was required to prove Jaensch submitted a claim “with
a knowledge that it was false and with a consciousness that he
was either doing something which was wrong or which violated the
law.” J.A. 611. In United States v. Maher, we held that § 287
includes a specific intent element, 2 and that an essentially
identical instruction was adequate to instruct the jury on
specific intent. 582 F.2d 842, 847 (4th Cir. 1978). “If the
2
As we recognized in United States v. Daughtry, the Maher
court adopted the specific intent requirement that the district
court read into the statute. 43 F.3d 829, 832 n.1 (4th Cir.
1995) (vacated on other grounds by Daughtry v. United States,
519 U.S. 984 (1995)). Section 287 is silent on the intent
necessary to commit a violation, but we are bound by our
precedent to require proof of specific intent.
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district court gives adequate instruction on specific intent, a
separate instruction on good faith is not necessary.” United
States v. Mancuso, 42 F.3d 836, 847 (4th Cir. 1994). The
district court’s specific intent instruction was adequate and no
additional good faith instruction was required. The district
court, therefore, did not abuse its discretion by declining to
give the requested instruction. 3
C.
Jaensch next argues that the district court abused its
discretion in evidentiary rulings affecting the entire trial.
He contends that evidence of his prior conviction was improperly
admitted and that opinion testimony of a lay witness regarding
Jaensch’s good faith defense was improperly excluded. 4 We
address each argument in turn.
i.
Jaensch contends that the district court abused its
discretion by admitting evidence of his prior conviction under
Federal Rule of Evidence 608 to impeach the testimony of his
wife. Jaensch also contends that the evidence violated Rule 403
3
We have examined Jaensch’s remaining instructional
challenges as they relate to Counts 3-6 and find them to be
without merit.
4
We have examined Jaensch’s other evidentiary challenges
and find them to be without merit.
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because it was so prejudicial that it forced him to testify to
mitigate its impact.
It is not clear from the record what Rule the district
court relied on to permit evidence of Jaensch’s previous
conviction to be entered. However, we may affirm on any ground
supported by the record. United States v. Moore, 709 F.3d 287,
293 (4th Cir. 2013). Contrary to Jaensch’s contention that
evidence of the conviction was improper character evidence under
Rule 404(a)(1), it was properly admitted under the exception in
Rule 404(a)(2)(A). Jaensch elicited testimony concerning his
trait of honesty, it was admitted, and the Government offered
evidence to rebut that testimony. See United States v. Moore,
27 F.3d 969, 974 (4th Cir. 1994) (holding that when a defendant
“‘opened the door’ by soliciting favorable opinions about his
character, the district court properly allowed the government to
rebut the offered testimony”).
The manner of proof was also permissible. Rule 405(a)
allows an admissible trait of character to be proven “by
testimony about the person’s reputation.” On “cross-examination
of the character witness, the court may allow an inquiry into
relevant specific instances of the person’s conduct.” Id. Here
the district court permitted Jaensch to elicit reputation
testimony on cross-examination and the Government to challenge
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that testimony using Jaensch’s conviction on redirect. 5 Although
405(a) speaks of “cross-examination,” courts that have addressed
this issue have permitted evidence of specific acts to be
admitted on redirect in service of the Rule’s intent. See
United States v. Powell, 124 F.3d 655, 661 n.4 (5th Cir. 1997);
Gov't of V.I. v. Roldan, 612 F.2d 775, 778 n.2 (3d Cir. 1979)
(“Character evidence was introduced for the first time on cross-
examination. For the purpose of rebuttal of this evidence,
therefore, the Government's redirect examination was the
functional equivalent of the ‘cross-examination’ referred to in
rule 405(a).”); United States v. Grose, 461 F. App’x 786, 795-96
(10th Cir. 2012) (unpublished).
Finally, the district court did not abuse its discretion
under Rule 403 by admitting Jaensch’s conviction. Rule 403
prevents the admission of evidence only when its probative value
is “substantially outweighed by its prejudicial impact ‘in the
5
Jaensch also argues that his previous conviction should
not have been admitted because it was not for a specific intent
crime of dishonesty. It is unclear what argument Jaensch is
making, but to the extent that he is arguing that the relevant
trait of character must be an essential element of the charge,
claim, or defense, this restriction applies only to evidence
admitted under Rule 405(b). Moreover, in the past we have
permitted the Government to admit evidence of criminal acts
unrelated to dishonesty as such to rebut testimony that a
defendant’s “reputation is for being a man of honesty [and] law
abidingness.” United States v. Wellons, 32 F.3d 117, 120 n.3
(4th Cir. 1994) (internal citations omitted).
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sense that it tend[s] to subordinate reason to emotion in the
factfinding process.’” United States v. Gray, 405 F.3d 227, 240
(4th Cir. 2005) (quoting United States v. Queen, 132 F.3d 991,
997 (4th Cir. 1997)). Jaensch’s prior crime is not of the
character to inflame the passions of jurors or to cause them to
disregard the facts of the case before them. See, e.g., United
States v. Basham, 561 F.3d 302, 331 (4th Cir. 2009).
ii.
Jaensch argues that the district court abused its
discretion by excluding, in part, the lay testimony of Brandon
Eggleston. Jaensch contends that he sought to introduce this
testimony to support his good faith defense and that by
excluding it the court deprived him of his Sixth Amendment right
to present a defense.
Rule 701 allows a lay witness to testify to an opinion that
is “rationally based on the witness’s perception,” is “not based
on ... specialized knowledge within the scope of Rule 702,” and
is “helpful to clearly understanding the witness’s testimony or
to determining a fact in issue.” Fed. R. Evid. 701(a)-(c).
“[U]nlike the expert testimony rule, [Rule 701] permits lay
testimony relating to a defendant's hypothetical mental state.”
United States v. Offill, 666 F.3d 168, 177 (4th Cir. 2011).
Jaensch attempted to elicit testimony from Eggleston
concerning Eggleston’s perception of Jaensch’s sincerity with
15
regard to his beliefs about the tax laws. The district court
deemed Eggleston’s testimony inadmissible and excluded it,
stating that “I think the jury is going to have to decide
whether or not they thought the witness is believable. And I
don’t know that this witness can tell us what he thinks about
Mr. Jaensch. He’s already told us he thought he was an honest
man.” J.A. 292.
The district court applied an overly restrictive
interpretation of Rule 701. Under Offill, Eggleston was not
prohibited from giving his opinion, based on his perceptions, of
Jaensch’s sincerity if his testimony satisfied the three
conditions of Rule 701. Because the district court held that
Rule 701 did not permit this kind of testimony, it did not
address whether Eggleston’s opinion would have been helpful to
the jury.
Although the district court’s error of law constitutes an
abuse of discretion, reversal is unwarranted on this ground
because the error was harmless. To find an erroneous
evidentiary ruling harmless, “‘we need only be able to say with
fair assurance, after pondering all that happened without
stripping the erroneous action from the whole, that the judgment
was not substantially swayed by the error.’” United States v.
Johnson, 617 F.3d 286, 292 (4th Cir. 2010) (quoting United
States v. Brooks, 111 F.3d 365, 371 (4th Cir. 1997)).
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Even if we assume that Eggleston’s testimony would have
been helpful to the jury in determining the subjective good
faith of Jaensch’s beliefs, excluding that testimony had no
substantial effect on the judgment. Eggleston was permitted to
testify to all of the statements Jaensch made to him about
Jaensch’s beliefs and to his general perceptions of Jaensch’s
character. Jaensch himself testified, 6 and both his wife and his
accountant testified that they believed he held his beliefs
sincerely. Based on all of the information available to the
jury concerning the sincerity of Jaensch’s beliefs, it is clear
that the exclusion of Eggleston’s opinion was harmless.
IV.
For the foregoing reasons, we vacate Jaensch’s conviction
as to Count 1. Finding no other prejudicial error, we affirm as
to all other counts. The case is remanded for rehearing on
6
Jaensch also argues that the exclusion of Eggleston’s
testimony forced him to testify in order to establish his good
faith defense in violation of his Fifth Amendment right against
self-incrimination. This claim is unavailing. Jaensch also
argued that he was forced to testify because the district court
admitted his previous conviction. The conviction was properly
admitted so following Jaensch’s own logic he would have
testified regardless of the court’s decision concerning
Eggleston’s testimony.
17
Count 1 and for resentencing on all counts following the
disposition of Count 1.
VACATED IN PART,
AFFIRMED IN PART, AND
REMANDED WITH INSTRUCTIONS
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