United States v. Simkanin ( 2005 )

United States Court of Appeals
Fifth Circuit
F I L E D
REVISED AUGUST 25, 2005
August 5, 2005
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
No. 04-10531
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
RICHARD MICHAEL SIMKANIN
Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
Before KING, Chief Judge, DAVIS, Circuit Judge, and ROSENTHAL,*
District Judge.
KING, Chief Judge:
Defendant-Appellant Richard Michael Simkanin appeals his
conviction for ten counts of willfully failing to collect and pay
over employment taxes in violation of 26 U.S.C. § 7202, fifteen
counts of knowingly making and presenting false claims for refund
of employment taxes in violation of 18 U.S.C. §§ 287 and 2, and
four counts of failing to file federal income tax returns in
violation of 26 U.S.C. § 7203. He also appeals his sentence of
*
District Judge of the Southern District of Texas,
sitting by designation.
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eighty-four months imprisonment. For the following reasons, we
AFFIRM Simkanin’s conviction and sentence.
I. BACKGROUND
Defendant-Appellant Richard Simkanin owned Arrow Custom
Plastics, Inc. (“Arrow”) since its incorporation in 1982. In
1993, Simkanin met with an accountant, Jim Kelly, who advised him
that he would need to change Arrow’s accounting method and that
this change would result in an increase in Arrow’s corporate
income tax. Simkanin thereafter began to question the federal
tax system’s applicability to him and its validity in general.
On his 1994 and 1995 individual income tax returns, he made
notations (i.e., “UCC 1-207”) apparently in an attempt to
indicate that the returns were filed under protest. He did not
file individual tax returns for the years 1996-2001.
With respect to the 1996 and 1997 returns, Simkanin told
Kelly that he was not required to file returns because he did not
receive any income but rather lived entirely off of his savings.
However, this statement was false--Simkanin did in fact receive a
salary from Arrow during these years, and his salary was
sufficiently high such that Simkanin owed federal income taxes.
On Arrow’s books, Simkanin’s salary was initially identified as
“officer salary” and then later as “remuneration,” without any
reference to Simkanin being the recipient of the funds. During
these years, Simkanin also received payment from Arrow for his
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personal expenses, which were booked as “repair and maintenance.”
In 1996, Simkanin surrendered his Texas driver’s license,
and when stopped by the police while driving, he showed a card
styled “British West Indies International Motor Vehicle
Qualification Card,” which he had acquired from a mail order
business in Connecticut. He also mailed to the U.S. Treasury
Secretary a statement that he had expatriated himself from the
United States and repatriated to the Republic of Texas. He
posted the same statement on Arrow’s internet website, where he
also vowed to ignore the laws of the United States.
In 1997, Simkanin removed his name from Arrow’s checking and
credit card accounts, replacing his name with the name of Arrow’s
bookkeeper Dianne Clemonds. Simkanin told Clemonds that he did
not want his name to appear on documents requiring his social
security number. Simkanin then listed Clemonds as Arrow’s
president on various legal documents, although he retained
complete de facto responsibility for the company’s affairs and
continued to make all of the decisions regarding finances and
taxes.
By May 1999, Simkanin had become involved with an
organization called We The People Foundation for Constitutional
Education (“WTP”), which promotes the view that, despite common
misconceptions, there is actually no law that requires most
Americans to pay income taxes or most companies to withhold taxes
from employees’ paychecks. WTP also espouses the view that the
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Sixteenth Amendment was fraudulently declared to have been
ratified. In accordance with these views, Simkanin told
accountant Kelly and others that he was not required to pay taxes
and that filing returns was purely voluntary. Kelly advised
Simkanin that filing returns was not voluntary and that Simkanin
could get into trouble if he did not file. Simkanin rejected
this advice, and he began to pressure Arrow’s employees to attend
seminars sponsored by WTP.
In November 1999, Simkanin told Kelly that Arrow would no
longer withhold employment taxes from employees’ paychecks.
Kelly counseled against this course of action. In response to
Simkanin’s stated intentions, Clemonds consulted with an
attorney. She was advised that she could be personally liable if
she went along with Simkanin’s plan to stop collecting and paying
over taxes. Clemonds therefore resigned from her position at
Arrow, and Simkanin returned his name to the Arrow bank accounts
as sole signatory. He then stopped Arrow’s withholding of
federal taxes from the wages paid to its employees.
In January 2000, Simakanin filed with the IRS fifteen claims
for tax refunds. He claimed he was owed refunds for taxes paid
by Arrow in 1997-99 and also for the taxes collected from, and
paid by, Arrow’s employees. The IRS denied all of these claims,
and Simkanin did not seek further review.
In March 2000, Kelly and Fred Taylor, a named partner in
Kelly’s accounting firm, went to Simkanin’s office to discuss his
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refusal to withhold and pay federal taxes or file returns.
Simkanin reiterated that he had no intention of paying taxes.
Taylor advised Simkanin that he could be criminally prosecuted
for his actions and, by letter dated March 28, 2000, terminated
Simkanin and Arrow as clients.
On March 2, 2001, a full page advertisement by WTP appeared
in USA Today. The ad prominently displayed the photographs of
five men, including Simkanin. The advertisement stated, inter
alia, that Simkanin and the other men pictured had stopped
withholding taxes from their workers’ paychecks and that they
were part of a “growing number of people” who believe that:
1. There is no law that requires workers, as U.S.
citizens earning their money from domestic companies, to
pay income or employment taxes; nor to have those taxes
withheld;
2. The 16th Amendment (the “Income Tax Amendment”) was
fraudulently declared to be ratified by the Secretary of
State in 1913.
The ad concluded with a request for “donations” to WTP.
On March 14, 2001, Simkanin was advised that he was the
target of a criminal investigation regarding his failure to file
individual income taxes since 1995 and his failure to collect and
pay over employment taxes since January 2000. In July 2001,
Simkanin was served with a grand jury subpoena that sought the
corporate records of “Arrow Custom Plastics, Inc.” In response
to the subpoena, Simkanin dissolved the corporation and operated
Arrow as a sole proprietorship. Despite Simkanin’s refusal to
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produce Arrow’s corporate records, the government was able to
obtain information about the amount of wages paid to Arrow’s
employees from the Texas state agency that collected unemployment
taxes from Arrow.
On June 19, 2003, an indictment was returned, charging
Simkanin with twelve counts of willfully failing to collect and
pay over federal income taxes and Federal Insurance Contribution
(“FICA”) taxes from the total taxable wages of Arrow employees in
violation of 26 U.S.C. § 7202,1 and fifteen counts of filing
false claims for tax refunds in violation of 18 U.S.C. § 287. On
August 13, 2003, a superceding indictment was returned, charging
Simkanin with the same substantive crimes but stating the
applicable law more fully.
On September 3, 2003, the parties filed a plea agreement and
a factual resume in which Simkanin pled guilty to four counts of
the superceding indictment. However, the plea agreement
misstated the maximum penalty to be lower than the actual maximum
of five years imprisonment and three years supervised release.
The government notified the court that Simkanin had not actually
1
Section 7202 provides:
Any person required under this title to collect, account
for, and pay over any tax imposed by this title who
willfully fails to collect or truthfully account for and
pay over such tax shall, in addition to other penalties
provided by law, be guilty of a felony and, upon
conviction thereof, shall be fined not more than $10,000,
or imprisoned not more than 5 years, or both, together
with the costs of prosecution.
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agreed to plead to a count with the maximum penalty of five
years incarceration. The court ultimately ordered a deadline for
completing a plea agreement, and when the government and Simkanin
had not agreed to a new plea agreement by that date, the case
went to trial.
Simkanin’s first trial began on November 25, 2003. A number
of Simkanin’s supporters were present outside the courthouse
handing out pamphlets on jury nullification. The jury was unable
to reach a unanimous verdict, and the district court declared a
mistrial. One of the jurors subsequently contacted the court’s
staff and expressed concern about the behavior of Simkanin’s
supporters and one of the members of the jury. It was later
revealed that some of the jurors had been contacted by Simkanin’s
supporters.
On December 17, 2003, a second superceding indictment was
returned, charging Simkanin with the same offenses in the first
superceding indictment plus four additional counts of failure to
file individual income tax returns. Counts One through Twelve
charged Simkanin with willfully failing to collect and pay over
federal income taxes and FICA taxes from the total taxable wages
of Arrow employees in violation of 26 U.S.C. § 7202 (with each
count pertaining to a different tax quarter). Counts Thirteen
through Twenty-Seven charged Simkanin with knowingly making and
presenting fifteen false claims for the payment of refunds of the
employer’s share of FICA taxes paid by Arrow and of the
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employees’ share of FICA taxes and income taxes collected from
Arrow’s employees in violation of 18 U.S.C. §§ 287 and 2.
Finally, Counts Twenty-Eight through Thirty-One charged Simkanin
with failing to file federal income tax returns in violation of
26 U.S.C. § 7203.
The second trial began on January 5, 2004.2 Simkanin
primarily attempted to establish that he did not willfully
violate the tax laws because he held a good-faith belief that he
was not obligated to pay individual income taxes or to withhold
employment taxes from the wages paid to Arrow’s employees.
Simkanin took the stand and testified that, inter alia, according
to his own research: (1) the Constitution provides for two types
of taxes--a direct tax and an indirect tax; (2) the income tax is
an indirect tax; (3) a man’s labor is his own property and cannot
be subject to an indirect tax; and (4) the wages that a person
receives for his labor are not subject to the income tax.
Simkanin further testified that he stopped paying his income
taxes and stopped withholding employment taxes from the wages of
Arrow’s employees because he “could not find out what the tax was
on.”
To support his defense, a number of other witnesses
testified that they had informed Simkanin that the federal income
2
Simkanin’s supporters were again outside the courthouse
and inside the courtroom. However, security measures were taken
to prevent the supporters from contacting members of the jury
pool or the selected jurors.
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tax laws, as written, did not require Simkanin to pay taxes and
that the income tax was constitutionally invalid. Joseph
Banister, a supporter of WTP, testified that he met Simkanin at a
conference entitled “Citizens’ Summit to End the Unlawful
Operations of the Internal Revenue Service,” at which Banister
was a speaker. Robert Schultz, founder and CEO of WTP, testified
that he advised Simkanin that his research showed that the
Sixteenth Amendment had been fraudulently declared to have been
ratified and that the constitutional definition of the word
“income” is different than the common understanding of income.
Larken Rose testified that, through phone conversations with and
emails to Simkanin, he explained that the income of the average
American is not subject to the federal income tax and that the
law merely applies to people engaged in certain types of
international trade. Banister, Schultz, and Rose all testified
that they did not advise Simkanin to stop withholding taxes or to
stop filing tax returns. Eduardo Rivera, an attorney from
California, testified that he had consulted with Simkanin in
1999, that Simkanin had paid him over $10,000, and that he told
Simkanin that his employees had no legal duty to pay a tax and
that Simkanin only had a duty to send money on their behalf to
the government if he contracted with them to do so.3
3
Rivera admitted on cross-examination that in 2003 a
permanent injunction had been entered against him, barring him
from making such statements.
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A government witness, a district director for Congressman
Joe Barton, testified that Simkanin had corresponded with
Barton’s office regarding taxes and the IRS. Barton’s office had
received, and forwarded to the IRS, letters written by Simkanin
expressing his view that he was not required to withhold taxes
from his workers’ paychecks and that wages are not a source of
income subject to federal taxation. The district director
testified that Barton’s office responded with a letter stating
that Simkanin’s stated opinions were based on a flawed
interpretation of the Internal Revenue Code (the “IRC”), that
wages are indeed taxable under federal laws and regulations, and
that Simkanin’s interpretation had been rejected by the courts.
The jury began its deliberations on January 6, 2004, and on
January 7, it returned a verdict of guilty as to Counts Three
through Thirty-One. The jury was unable to reach a verdict as to
Counts One and Two, and the government moved to dismiss those
counts, which the district court did.
At sentencing, the district court applied the 2003 version
of the United States Sentencing Guidelines, and it determined
Simkanin’s criminal history category to be I and his offense
level to be Twenty-Two, with a corresponding sentencing range of
forty-one to fifty-five months imprisonment. The court decided
to depart upwardly from that range, concluding that a range of
eighty-four to 105 months more appropriately reflected the
likelihood that Simkanin would re-offend. The court then imposed
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a sentence of eighty-four months. Simkanin appeals both his
conviction and his sentence.
II. DISCUSSION
A. The District Court’s Response to the Jury Note
Simkanin argues that the district court, when providing a
supplemental jury instruction in response to a note from the
jury, directed a verdict in favor of the prosecution with respect
to one or more essential elements of the offense. We review de
novo whether a jury instruction directed a verdict on an element
of the offense. See United States v. Bass, 784 F.2d 1282, 1284
(5th Cir. 1986). In light of the particular circumstances
involved in this case, we conclude that the district court did
not direct a verdict for the government on an element of the
offense.
In Cheek v. United States, 498 U.S. 192, 201-03 (1991), the
Supreme Court defined “willfulness” for prosecutions under the
IRC as requiring a “voluntary, intentional violation of a known
legal duty.” The Court reasoned that because of the complexity
of the tax laws, willful criminal tax offenses must be treated as
an exception to the general rule that ignorance of the law or a
mistake of law is no defense to criminal prosecution. Id.
Moreover, the Court found that a defendant’s good-faith belief
that he was not violating the law need not be objectively
reasonable to negate willfulness. Id. However, the Court
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distinguished a defense based on the defendant’s good-faith
belief that he was acting within the law from a defense based on
the defendant’s views that the tax laws are unconstitutional or
otherwise invalid. Id. at 204-06. The Court held that the
latter belief, regardless of how genuinely held by the defendant,
does not negate the willfulness element. Thus, the Court
concluded that evidence pertaining to a defendant’s beliefs that
the tax laws are invalid is irrelevant to establishing a
legitimate good-faith defense. Id.; see also FIFTH CIRCUIT PATTERN
JURY INSTRUCTIONS: CRIMINAL § 1.38 (West 2001).
The availability of the good-faith defense, while undeniably
sound,4 creates a number of complications and challenges for a
district court beyond those arising in the usual criminal trial,
in which the defendant’s beliefs about what the law requires are
not at issue. The defendant in a criminal tax trial, unlike most
other defendants, must be permitted to present evidence to show
what he purportedly believed the law to be at the time of his
allegedly criminal conduct. At the same time, however, the
district court must be permitted to prevent the defendant’s
alleged view of the law from confusing the jury as to the actual
state of the law, especially when the defendant has constructed
4
See, e.g., United States v. Burton, 737 F.2d 439, 441
(5th Cir. 1984) (noting “the pervasive intent of Congress to
construct penalties that separate the purposeful tax violator
from the well-meaning, but easily confused, mass of taxpayers.”
(internal quotation marks omitted)).
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an elaborate, but incorrect, view of the law based on a
misinterpretation of numerous IRC provisions taken out of proper
context. See, e.g., United States v. Barnett, 945 F.2d 1296,
1300 (5th Cir. 1991) (stating that “[t]he jury must know the law
as it actually is respecting a taxpayer’s duty to file before it
can determine the guilt or innocence of the accused for failing
to file as required”). The district court in this case, like
other courts in similar cases, struggled to balance these two
competing concerns when it answered the jury’s confusion as to
the correct interpretation of the law, which unsurprisingly
resulted from Simkanin’s testimony about his own erroneous
beliefs about the law. Thus, it is with this set of
circumstances in mind that we consider Simkanin’s arguments on
appeal.
In its initial instructions, the district court instructed
the jury that, in order to convict Simkanin on Counts One through
Twelve (willfully failing to collect and pay over federal taxes
from the total taxable wages of Arrow employees in violation of
26 U.S.C. § 7202), the jury must find beyond a reasonable doubt
that: (1) Arrow was an employer that paid wages to its employees;
(2) Simkanin was an official of Arrow who had responsibility for
its decisions regarding the withholding from its employees’ wages
of Medicare, social security, and federal income taxes, the
accounting for such taxes, and the payment of such taxes over to
the IRS; (3) Simkanin caused Arrow not to withhold and not to
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account truthfully for and pay over such taxes; and (4)
Simkanin’s conduct in causing Arrow not to withhold, account for,
and pay over such taxes was willful. The court further
instructed the jury that:
Within the meaning of [26 U.S.C. § 7202], during the
years 2000, 2001, and 2002, [Arrow], through its
responsible officials, had a legal duty to collect, by
withholding from the wages of its employees, the
employees’ share of social security taxes, Medicare
taxes, and federal income taxes, and to account for those
taxes and to pay withheld amounts to the United States of
America.
Simkanin did not object to these instructions at the time they
were given.
At trial, Simkanin testified that one reason behind his
decision not to withhold taxes from Arrow’s employees was his
belief that the IRC, which is over 7,000 pages long, contains an
extensive (and exclusive) list of industries and activities.
Simkanin stated that because Arrow did not operate in any of the
listed industries or perform any of the listed activities, he
concluded that Arrow’s workers were not employees under the IRC
and that he therefore was not required by law to withhold taxes.
He further stated that he believed that the definition of an
“employee” under the IRC was limited only to persons who worked
for a governmental entity including the state or a political
subdivision thereof.5
5
Simkanin’s position, as defense counsel concedes, was
based on an incorrect view of the law. See, e.g., 26 U.S.C.
§§ 3121(a)-(d), 3306(a)-(c), 3401(a)-(d); 26 C.F.R.
§§ 31.3121(a)-(d), 31.3306(a)-(c), 31.3401(a)-(d); Breaux &
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During its deliberations, the jury sent a note to the
district judge asking the following question:
Since no proof has been made that the defendant and his
employees are in an occupation listed in those 7,000
[pages], are we to conclude that they are, in fact, not
in that 7,000, or do we need to read all 7,000 to see
what the defendant was referring to, and in fact, wasn’t
listed in the 7,000[?]
The court responded to the jury’s question by stating:
Now, in answer to your note: You are instructed that you
do not need to concern yourself with whether defendant’s
employees are in an occupation “listed in those 7,000.”
The Court has made a legal determination that within the
meaning of Title 26, United States Code, Section 7202,
during the years 1997, 1998, 1999, 2000, 2001, and 2002,
[Arrow], through its responsible officials, had a legal
duty to collect, by withholding from the wages of its
employees, the employees’ share of the social security
taxes, Medicare taxes, and federal income taxes, and to
account for those taxes and pay the withheld amounts to
the United States of America. You are to follow that
legal instruction without being concerned whether there
are certain employers who are not required to collect and
withhold taxes from the wages of their employees.
Of course, you will bear in mind in your
deliberations all other instructions the Court has given
you concerning the law applicable to this case.
Defense counsel objected to the court’s response on the ground
that, inter alia, the response “amount[ed] to an instructed
verdict of guilty by instructing [the jury] on that point since
Daigle, Inc. v. United States, 900 F.2d 49, 51-53 (5th Cir.
1990); see also Otte v. United States, 419 U.S. 43, 50-51 (1974).
This fact is undisputed on appeal, and it is abundantly clear
that Simkanin’s testimony on his views regarding the definition
of an “employer” and “employees” was elicited to support his
defense of a good-faith belief, not to show that Arrow was not an
employer under the IRC.
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that is the disputed issue and the basis for his defense.”6
The trial transcript, as well as Simkanin’s initial brief,
make perfectly clear that the disputed issue at trial was whether
Simkanin willfully violated the federal tax laws. The basis for
his defense was that he did not willfully fail to collect and pay
over taxes in violation of § 7202 (and that he did not knowingly
present false claims for refund) because he believed in good
faith that he was not required by law to withhold such taxes.
Simkanin argues on appeal that the district court’s response
to the jury note constituted a directed verdict on an essential
element of the offense, and therefore reversible error, for two
reasons. First, Simkanin argues that the court’s response
erroneously instructed the jury to disregard Simkanin’s good-
faith defense. Second, he asserts that the court directed a
verdict for the prosecution on the first element of the § 7202
offense--that Arrow was an employer that paid wages to its
employees. He contends that the district court’s error in this
regard warrants the vacatur of his conviction as to Counts 3-12
(willful failure to withhold) and Counts 13-27 (false claims of
refund for taxes withheld).
As we stated in United States v. Cantu, 185 F.3d 298, 305-06
6
We assume, without deciding, that Simkanin’s objection
to the district court’s response to the jury note preserved the
alleged error, even though he did not object to the district
court’s original instruction containing the same language. Thus,
we do not review the alleged error under the considerably less
defendant-friendly plain-error standard under FED. R. CRIM. P.
52(b).
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(5th Cir. 1999):
The district court enjoys wide latitude in deciding how
to respond to questions from a jury . . . . Overall,
we seek to determine whether the court’s answer was
reasonably responsive to the jury’s questions and
whether the original and supplemental instructions as a
whole allowed the jury to understand the issue
presented to it.
(internal citation and quotation marks omitted). “It is well
established that the instruction may not be judged in artificial
isolation, but must be considered in the context of the
instructions as a whole and the trial record.” Estelle v.
McGuire, 502 U.S. 62, 72 (1991) (internal quotation marks
omitted).
In arguing that the district court’s response directed the
jury to disregard his good-faith defense, Simkanin relies on
United States v. Burton, 737 F.2d 439 (5th Cir. 1984), a case
involving a defendant’s failure to file income tax returns. In
Burton, the district court instructed the jury that “[t]he court
has ruled as a matter of law that a good faith belief that wages
are not income is not a defense to the charges in this case.”
737 F.2d at 440. We reversed, holding that a defendant’s good-
faith belief that the tax laws did not require him to file
returns (as opposed to a belief that the tax laws are invalid or
unconstitutional) would have negated the willful element of the
charged offense and therefore constituted a valid defense.7 Id.
7
Similarly, Simkanin cites Cheek, 498 U.S. at 192, for
the proposition that a district court errs when it instructs a
jury to disregard the defendant’s evidence of a good-faith
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at 441-42. Burton is easily distinguishable, however, because
unlike the district court in Burton, the district court in the
present case did not explicitly instruct the jury to disregard
the defendant’s beliefs about the applicability of the tax laws.
Rather, the court instructed the jury that the defendant’s
purported view of the law--that the fact that the IRC did not
list his business activities alleviated him from a legal duty to
withhold taxes--was incorrect. Thus, the district court acted
properly under the circumstances. See Barnett, 945 F.2d at 1300.
We see nothing in the district court’s instruction that would
have led the jury to believe that it must disregard Simkanin’s
good-faith defense on the willfulness element, especially because
the court specifically instructed the jury to keep in mind the
other instructions, which included its instruction on
willfulness.8 Thus, the jury remained free to decide the
contested issue in the trial, i.e., whether Simkanin’s violations
of the tax laws were willful as that term was properly defined in
the jury instructions.
Second, in a clever reconstruction of the district court’s
response to the jury note, Simkanin argues that the court’s
response constituted a directed verdict on another element of the
offense, which was uncontested at trial--namely, the requirement
misunderstanding of the tax laws.
8
As we discuss below, the district court adequately
instructed the jury on the willfulness element to allow Simkanin
to advance his good-faith defense.
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that Arrow was an employer that paid wages to its employees.
Counsel contends that, after the court informed the jury of its
legal determination that Arrow had a legal duty to withhold, the
jury logically could no longer find that Arrow was not an
employer that paid wages to its employees--for if the jury found
that Arrow was not an employer that paid wages to its employees,
then it would mean that Arrow, in effect, did not have a legal
duty to withhold taxes. This reading of the court’s response,
while plausible in a literal sense, is entirely divorced from a
reading of the instructions as a whole, as well as from the
context in which the jury asked its question and the court
responded.
Simkanin relies heavily on this court’s decision in Bass,
784 F.2d at 1282. In Bass, the defendant was charged with
willfully submitting false or fraudulent income tax withholding
exemption statements to employers in violation of 26 U.S.C.
§ 7205. 784 F.2d at 1283. The defendant asserted as one of his
defenses that he could not be held criminally liable under § 7205
because he was not an “employee” for the purpose of supplying
withholding information on a W-4 to his employer. Despite this
defense, the district court in Bass instructed the jury that “as
a matter of law the defendant . . . was an employee of” the
company in question. Id. at 1284. We found this instruction to
be constitutionally erroneous because, “by instructing the jury
that Bass was an employee, the district court relieved the
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prosecution of its duty of proving, beyond a reasonable doubt,
Bass’s guilt of every element of the offense charged.” Id. at
1284-85.
Unlike in Bass, however, the district court in the present
case did not explicitly direct a verdict on an essential element
of the offense. At most, the court’s response, when viewed in
isolation, could be interpreted as implicitly requiring the jury
to find that Arrow was an employer that paid wages to its
employees, lest the jury’s finding on that element logically
conflict with the district court’s instruction. However, the
district court also expressly instructed the jury at least twice
that, in order to convict Simkanin under § 7202, it must
determine beyond a reasonable doubt that Arrow was an employer
that paid wages to its employees. Furthermore, when the court
answered the jury’s question, it reminded the jury to consider
all the other instructions that had been given. Thus, when
viewed in the context of the entire jury charge, the district
court’s response merely instructed the jury that Simkanin’s
belief that he was not required to withhold taxes because Arrow’s
activities were not listed in the 7,000 pages of the IRC was an
incorrect view of the law, and that, if the jury found that Arrow
was an employer that paid wages to its employees, Simkanin had a
legal duty to withhold despite his professed belief to the
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contrary.9 Hence, the district court’s answer was reasonably
responsive to the jury’s question and was a correct statement of
the law--it instructed the jury that whether or not Arrow’s
business activity appears on a list in the IRC is irrelevant to
whether Simkanin had a legal duty to withhold. See Cantu, 185
F.3d at 305-06. The original and supplemental instructions as a
whole allowed the jury to understand the issue presented to it
and required the jury to decide whether the government had proven
each essential element beyond a reasonable doubt. See id.
Accordingly, we conclude that, when the district court’s response
is viewed in the context of the instructions in their entirety,
there was not a reasonable likelihood that the jury applied the
instruction as if it were a directed verdict on that element of
the offense. See United States v. Phipps, 319 F.3d 177, 189-90
(5th Cir. 2003) (“The question is . . . whether this single
misstatement makes the instruction defective as a whole. . . .
[T]he proper inquiry is not whether the instruction could have
been applied in an unconstitutional manner, but whether there is
a reasonable likelihood that the jury did so apply it.” (internal
citation and quotation marks omitted)); United States v.
Musgrave, 483 F.2d 327, 335 (5th Cir. 1973). Accordingly, we
find no error in the district court’s response to the jury note.
Moreover, even if we were to conclude that the district
9
Moreover, it is of no event that the district court
used the term “employees” in its response because the jury’s own
question referred to Arrow’s “employees.”
-21-
court’s response to the jury note was erroneous, which we do not,
we still would not reverse on this ground. In this case, both
parties agree that we should affirm if the government proves that
the alleged error was harmless beyond a reasonable doubt.10 See
Neder v. United States, 527 U.S. 1 (1999); Chapman v. California,
386 U.S. 18, 23 (1967). Therefore, we would proceed under that
assumption, and we would conclude that the government has met its
burden to establish that any error here was harmless. In Bass,
784 F.2d at 1285, we stated that we could not deem the court’s
explicit directed verdict on the “employee” element harmless
“[b]ecause one of Bass’s defenses was that he was not an
‘employee[]’ . . . .” Here, however, one of Simkanin’s defenses
was not that Arrow was not an employer that paid wages to its
employees under the IRC (although one of his defenses was that he
did not willfully violate the law because he erroneously believed
that Arrow was not an employer that paid wages to its employees
under the IRC). During the course of the trial, defense counsel
introduced no evidence that Arrow was not an employer that paid
wages to its employees, and defense counsel did not argue or
otherwise suggest during the trial that the prosecution had not
10
Although at oral argument Simkanin’s defense counsel
argued that the type of error alleged here is not subject to
harmless-error review, defense counsel, in supplemental briefing
submitted after oral argument, reverted to the position taken in
its initial briefs--i.e., that if the district court’s response
directed a verdict on an essential element of the offense, the
error is subject to harmless-error analysis and that we may
affirm only if the government establishes that the error was
harmless beyond a reasonable doubt.
-22-
established this element beyond a reasonable doubt. On appeal,
Simkanin does not point to any evidence introduced supporting the
notion (or any conceivable basis upon which a rational juror
could conclude) that Arrow was not an employer that paid wages to
its employees under a legally accurate interpretation of the
relevant sections of the IRC. Rather, Simkanin falls back on the
argument that it is possible that the jury could have decided
that the government’s evidence, although uncontradicted, did not
establish that element beyond a reasonable doubt. However, we
believe that it would have been irrational for the jury to do so,
and Simkanin’s argument does not suffice to raise a reasonable
doubt in our minds that the jury might have concluded that Arrow
was not an employer that paid wages to its employees. This is an
instance in which the relevant element was “supported by
uncontroverted evidence” and in which the “defendant did not, and
apparently could not, bring forth facts contesting the omitted
element.” Neder, 527 U.S. at 18-19. Accordingly, applying the
harmless-error standard agreed upon by the parties, we would find
any error here to be harmless beyond a reasonable doubt.
B. Instruction on Good-Faith
Simkanin next argues that the district court erred by
refusing to include a specific jury instruction on his good-faith
defense. As noted above, the district court’s instructions with
respect to Counts 1-12 (failure to withhold) stated that the jury
must find beyond a reasonable doubt that Simkanin’s conduct in
-23-
causing Arrow not to withhold and not to account truthfully for
and pay over such taxes was willful. In elaborating on the
meaning of the term “willful,” the court instructed the jury
that:
To act willfully means to act voluntarily and
deliberately and intending to violate a known legal duty.
For the government to establish willfulness as to Counts
1-12 of the indictment, it must prove beyond a reasonable
doubt as to the count in consideration that defendant
knew of the requirements of federal law that [Arrow]
collect, by withholding from its employees’ wages,
Medicare taxes, social security taxes, and federal income
taxes, and to account for such taxes and pay them over to
the [IRS], and that he voluntarily and intentionally
caused [Arrow] to fail to comply with these requirements.
With respect to Counts 13-27 (false or fraudulent refund
claims), the court instructed that the government must prove
beyond a reasonable doubt that: (1) Simkanin “knowingly presented
to an agency of the United States a false or fraudulent claim
against the United States;” (2) Simkanin “knew that the claim was
false or fraudulent;” and (3) the false or fraudulent claim was
material. The court instructed that “knowingly, as that term has
been used in these instructions, means that the act was done
voluntarily and intentionally, not because of a mistake or
accident.”
Finally, with respect to Counts 28-31 (failure to file
returns), the court instructed the jury that it must find beyond
a reasonable doubt that: (1) Simkanin received gross income in
the amounts stated in the indictment for the year in question
(this element was satisfied by a stipulation); (2) Simkanin
-24-
failed to file an income tax return, as required, by the date
stated in the indictment; (3) Simkanin knew he was required to
file a return; and (4) Simkanin’s failure to file was willful.
The court then reminded the jury “that to act willfully means to
act voluntarily and deliberately and intending to violate a known
legal duty.” The court further stated that “[f]or the government
to establish willfulness as to Counts 28-31 of the indictment, it
must prove beyond a reasonable doubt as to the count under
consideration that the defendant knew of the requirement of
federal law that he file an income tax return, and that he
voluntarily and intentionally failed to do so.”
Defense counsel objected to these instructions on the ground
that they did not include a specific instruction on good faith
under Cheek, 498 U.S. at 192. Counsel argued that, for this
reason, the district court failed to instruct the jury on the
defense’s theory of the case. Defense counsel also objected to
the use of the phrase “known legal duty,” rather than “known to
the defendant.” The district court overruled these objections.
This court reviews a district court’s refusal to include a
defendant’s proposed jury instruction in the charge under an
abuse of discretion standard. United States v. Rochester, 898
F.2d 971, 978 (5th Cir. 1990). The district court abuses its
discretion by refusing to include a requested instruction only if
that instruction: (1) is substantively correct; (2) is not
substantially covered in the charge given to the jury; and (3)
-25-
concerns an important point in the trial so that the failure to
give it seriously impairs the defendant’s ability to present
effectively a particular defense. United States v. St. Gelais,
952 F.2d 90, 93 (5th Cir. 1992). Under this test, this court
will not find an abuse of discretion where the instructions
actually given fairly and adequately cover the issues presented
by the case.11 Rochester, 898 F.2d at 978.
As we discussed above, in Cheek, 498 U.S. at 201-04, the
Supreme Court defined “willfulness” for prosecutions under the
IRC as requiring a “voluntary, intentional violation of a known
legal duty.” The Court further found that, because of the
complexity of the federal tax laws, criminal tax offenses with
willfulness as an element must be treated as an exception to the
general rule that a mistake of law is not a valid defense. Id.
Thus, a defendant’s good-faith belief that he is acting within
the law negates the willfulness element. On the other hand, a
defendant’s good-faith belief that the tax laws are
unconstitutional or otherwise invalid does not negate the
willfulness requirement, and such evidence is therefore
irrelevant to a good-faith defense. Id.; see also FIFTH CIRCUIT
11
Relying on language from Mathews v. United States, 485
U.S. 58, 63 (1988), Simkanin argues that he was entitled to an
instruction on any defense supported by the evidence. However,
Mathews addresses whether a defendant can simultaneously raise
contradictory defenses, and the broader language from Mathews has
no bearing on the issue presented here because the district court
did not deny Simkanin’s requested instruction on the basis that
it was not supported by sufficient evidence. See Mathews, 485
U.S. at 63.
-26-
PATTERN JURY INSTRUCTIONS: CRIMINAL § 1.38.
The Supreme Court in Cheek derived its definition of
willfulness from United States v. Pomponio, 429 U.S. 10 (1976)
(per curiam). In Pomponio, a case involving criminal charges of
falsifying tax returns, the district court instructed the jury
that a willful act meant “one done voluntarily and intentionally
and with the specific intent to do something which the law
forbids, that is to say with [the] bad purpose either to disobey
or to disregard the law.” 429 U.S. at 11 (internal quotation
marks omitted) (alterations in original). The district court
also instructed the jury that “‘[g]ood motive alone is never a
defense where the act done or omitted is a crime,’ and that
consequently motive was irrelevant except as it bore on intent.”
Id. (alteration in original). The court of appeals held that the
final instruction was improper because the relevant statute
required a finding of bad purpose or evil motive. Id. The
Supreme Court reversed, noting that the court of appeals
incorrectly assumed that the reference to “evil motive” in an
earlier Supreme Court case meant something more than specific
intent to violate the law. Id. The Court stated that “willful,”
as the term is used in the tax statutes, means “a voluntary,
intentional violation of a known legal duty.” Id. The Court
determined that because the district court had instructed the
jury as to that definition, the jury had been adequately
instructed on willfulness, and an additional instruction on good
-27-
faith was thus unnecessary. Id.
Accordingly, the district court in the present case was not
required to include a specific instruction on good-faith because
it adequately instructed the jury on the meaning of willfulness
under Cheek and Pomponio. In other words, Simkanin’s requested
instruction was “substantially covered in the charge given to the
jury” regarding willfulness. See St. Gelais, 952 F.2d at 93. In
addition, taken together, the trial, charge, and closing argument
laid the theory of the defense squarely before the jury, and the
lack of the requested instruction did not seriously impair
Simkanin’s ability to present effectively his good-faith
defense.12 Id.; United States v. Proctor, No. 03-20309, 118 Fed.
12
As discussed more fully below, Simkanin argues that the
district court restricted his ability to present his good-faith
defense at trial. However, we address here Simkanin’s argument
concerning closing argument. Simkanin notes that the district
court limited defense counsel to only fifteen minutes for closing
argument. However, he concedes that he did not object below on
this basis, and he explicitly states that he does not challenge
on appeal the district court’s limitation of closing argument.
At the same time, however, Simkanin argues that the limitation on
closing argument should shade our analysis of the issues that he
actually raises on appeal. In light of the particular
circumstances of this case, we do not agree that the limitation
on closing argument somehow rendered the instruction on
willfulness erroneous. Defense counsel was entirely free to
argue, and did in fact argue, the good-faith defense to the jury
during the allotted time period, and, as discussed below, the
district court did not unfairly restrict Simkanin’s presentation
of evidence to establish that defense. The restriction on
closing was applied evenhandedly to both the defense and the
prosecution. The trial lasted only two days and involved
relatively few witnesses. It involved a single theory of the
defense, which was based on Simkanin’s beliefs about the
requirements of the federal tax laws (not the validity of those
laws, which are irrelevant to willfulness under Cheek). Thus, we
are not persuaded that the limitation on closing unfairly
-28-
Appx. 862, 863 (5th Cir. Dec. 30, 2004) (per curiam)
(unpublished) (quoting United States v. Gray, 751 F.2d 733,
735-36 (5th Cir. 1985)).
Finally, Simkanin complains that the phrase “known legal
duty” in the instructions did not make it clear that the legal
duty must have been known to the defendant. This claim ignores
the next sentence of the instructions, which stated: “For the
government to establish willfulness as to Counts 1-12 of the
indictment, it must prove beyond a reasonable doubt as to the
count in consideration that defendant knew of the requirements of
federal law . . . and that he voluntarily and intentionally
caused [Arrow] to fail to comply with these requirements.”
Similarly, Simkanin ignores the actual language of the district
court’s instructions when, citing FIFTH CIRCUIT PATTERN JURY
INSTRUCTIONS: CRIMINAL § 1.37, he asserts that the district court did
not instruct the jury that a defendant did not “knowingly” commit
a tax offense if he acted by mistake. In fact, as noted above,
the district court explicitly instructed the jury that
“knowingly, as that term has been used in these instructions,
means that the act was done voluntarily and intentionally, not
because of a mistake or accident.” Thus, Simkanin’s argument
fails.
C. Evidentiary Rulings
curtailed defense counsel’s ability to present Simkanin’s good-
faith defense.
-29-
Simkanin’s last argument with respect to his conviction is
that the district court unfairly and arbitrarily excluded defense
evidence and restricted the scope of cross-examination, thus
hampering the presentation of his good-faith defense. We review
a district court’s rulings on the admission or exclusion of
evidence for an abuse of discretion. United States v. Flitcraft,
803 F.2d 184, 186 (5th Cir. 1986).
Simkanin argues that the district court erred because it
allowed him only briefly to say what he knew, believed, and
understood, but that it did not allow him to corroborate his
sincerity in these assertions because it excluded from evidence
certain documents on which Simkanin allegedly relied for his
beliefs about the tax laws.13 The district court, however,
explained that it did so because the documents would tend only to
confuse the jury about the relevant issues in the case and were
cumulative of Simkanin’s testimony about what the documents said
and how he relied upon them in forming his beliefs about what the
tax laws required of him. Rule 403 of the Federal Rules of
Evidence states that “[a]lthough relevant, evidence may be
excluded 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
13
Simkanin does not specifically identify all of the
evidentiary rulings that he claims were erroneous; rather, he
advances a broader contention that the district court’s
evidentiary rulings as a whole prejudiced his ability to assert
his defense.
-30-
of time, or needless presentation of cumulative evidence.” In
this instance, the district court did not abuse its discretion in
concluding that the probative value of this evidence was far
outweighed by its tendency to confuse the jury as to the correct
state of the law and by its cumulative nature.
In Flitcraft, 803 F.2d at 185-86, we addressed the
defendants’ claim that the district court had erred in excluding
the documents upon which they allegedly relied in forming their
beliefs about the tax laws; the defendants argued that such
documents would increase the likelihood that the jury would
credit the sincerity of the defendants’ purported beliefs. This
court held that the district court did not abuse its discretion
in excluding the evidence under FED. R. EVID. 403 because the
documents had little probative value, as they were largely
cumulative of the defendants’ testimony as to their contents and
the defendants’ reliance on them. Flitcraft, 803 F.2d at 186.
Furthermore, we stated that “the documents presented a danger of
confusing the jury by suggesting that the law is unsettled and
that it should resolve such doubtful questions of law.” Id.
In Barnett, 945 F.2d at 1301, we once again addressed the
problem confronting a district court called upon to engage in
“the delicate balancing required by Rule 403” when determining
the admissibility of evidence to support a defendant’s good-faith
beliefs in a tax evasion case. We noted “the need to allow the
defendant to establish his beliefs through reference to tax law
-31-
sources and the need to avoid unnecessarily confusing the jury as
to the actual state of the law.” Id. Relying on Flitcraft, we
determined that the district court did not abuse its discretion
in excluding documentary evidence because the district court had
allowed the defendant to explain his understanding of the
documents while excluding the documents themselves to avoid
unnecessarily confusing the jury. Id. Thus, as in Flitcraft and
Barnett, we conclude that the district court in the present case
did not abuse its discretion in making the evidentiary rulings of
which Simkanin complains.14
With respect to the more specific evidentiary errors alleged
by Simkanin, we similarly conclude that the district court did
not abuse its discretion. Simkanin claims that the district
court erred by admitting a document entitled “Proclamation of
Warning,” which Simkanin had posted on his website. In summary,
the document declared that Simkanin is a servant of God and that
public officials should be warned not to harm him or his
household, lest they wish to enter “into a state of war against
Almighty God” and to suffer “the fury of a fire which will
consume [them].” The government responds that Simkanin opened
the door to this evidence when defense counsel questioned
14
Simkanin avers that the district court’s evidentiary
rulings were not evenhanded because it permitted the government
to introduce § 3402 as proof that Simkanin had been shown, and
therefore actually was aware of, the correct law concerning
withholding. However, we do not find this disparity dispositive
because the admission of § 3402 did not raise the possibility of
confusing the jury in the same manner as the defense exhibits.
-32-
Simkanin about how his religious beliefs told him not to withhold
taxes from the paychecks of his employees. When defense counsel
requested that he be able to question Simkanin on his religious
beliefs, the government replied that it would open the door to
the admission of the Proclamation. The district court
acknowledged that it probably would, but it allowed defense
counsel the option to proceed with the testimony on Simkanin’s
religious views. Simkanin testified that the Bible told him that
God is entitled to the first fruits of a person’s labor and that
if he withheld taxes from his employees, then he was stealing the
first fruits of their labor. It is not clear why defense counsel
introduced Simkanin’s own testimony on this issue because his
statements that the tax laws contradicted his religious views
were irrelevant to his good-faith defense under Cheek. It is
perhaps less clear what probative value the Proclamation had on
the relevant issues, but defense counsel was warned that
testimony concerning Simkanin’s religious views about the tax
laws might open the door to other evidence concerning his
religious views. In any event, even if the district court did
abuse its discretion in admitting the Proclamation, we are
convinced that it was harmless in the overall scheme of the
trial. At most, the Proclamation showed that Simkanin held
certain beliefs, which would tend to support his good-faith
defense rather than refute it.
Next, Simkanin complains that the district court erred by
-33-
admitting IRS press releases warning taxpayers about various
“scams” and “schemes” (including employers who claim that they
need not withhold taxes). However, we do not agree that the
potentially prejudicial nature of the documents outweighed the
probative value of these documents, which showed that Simkanin
had been explicitly warned about the illegality of his
activities. Thus, the district court did not abuse its
discretion.
Simkanin also argues that, in an in limine ruling, the
district court unfairly restrained defense counsel from
introducing any documentary evidence without first approaching
the bench. The government responds that the district court’s
ruling was justified by the nature of the documents on the
defense exhibit list, which included the Communist Manifesto,
multiple versions of the Bible, and various publications
translating Greek and Hebrew. We agree with the government that
the district court did not abuse its discretion given this
exhibit list. Moreover, the documents actually excluded on the
basis of the in limine ruling would have been properly excluded
under Rule 403 for the reasons stated above (i.e., they were
cumulative and potentially confusing).
Next, Simkanin claims that the district court unfairly
restricted the cross-examination of government witnesses, such as
IRS agents Cooper and Eastman. The district court prohibited
certain questions by defense counsel because the questions were
-34-
beyond the scope of direct and because, in the court’s opinion,
the questions attempted to show that the IRS agent’s views of the
law were incorrect and that Simkanin’s views were actually
correct. Simkanin argues that defense counsel’s questions merely
attempted to demonstrate the reasonableness of Simkanin’s
beliefs. Citing Olden v. Kentucky, 488 U.S. 227 (1988) (per
curiam), Simkanin claims that these rulings violated the
Confrontation Clause of the Sixth Amendment. However, the
district court did not abuse its discretion in determining that
the questions were beyond the scope of direct, see FED. R. EVID.
611(b), and Simkanin was free to recall the witnesses during his
presentation of evidence, although he did not attempt to do so.
Thus, his Confrontation Clause rights were not implicated.
Moreover, the district court did not abuse its discretion because
Simkanin was permitted to testify (and present the testimony of
other witnesses) about his beliefs and because this line of
questioning may have served to confuse the jury unnecessarily.
D. Upward Departure
With respect to his sentence, Simkanin argues that the
district court erred by upwardly departing from the sentencing
range established by the Guidelines. Prior to the upward
departure, the sentencing range established by the Guidelines was
forty-one to fifty-one months imprisonment (for a criminal
history category of I and an offense level of Twenty-Two).
Simkanin does not contend that the district court erred in
-35-
calculating this range. However, the district court decided to
depart upwardly, and it imposed a sentence of eighty-four months
imprisonment. At the sentencing hearing, the district court
stated that U.S.S.G. § 5K2.0(a)(2)(B)15 justified an upward
departure because: (1) Simkanin “has displayed contempt and
disrespect for the laws of the United States of America, the
State of Texas, and the city of Bedford,” and he has further
confirmed that contempt in his conduct since his bail was
revoked; (2) he and those who share his views have a cult-like
belief that the laws of the United States do not apply to them;
(3) Simkanin has entrenched himself in anti-government groups and
is part of a movement whose members question the power of the
federal government and its instrumentalities, including the
federal courts, to exercise jurisdiction and authority over them;
(4) his beliefs have led him to act in a manner inconsistent with
the laws of the United States (ranging from giving up his
15
U.S.S.G. § 5K2.0(a)(2)(B) (2003) provides:
(a) Upward Departures in General and Downward Departures
in Criminal Cases Other Than Child Crimes and Sexual
Offenses. . . .
(2) Departures Based on Circumstances of a Kind not
Adequately Taken into Consideration. . . .
(B) Unidentified Circumstances.--A departure
may be warranted in the exceptional case in
which there is present a circumstance that the
Commission has not identified in the
guidelines but that nevertheless is relevant
to determining the appropriate sentence.
-36-
driver’s license, threatening to kill federal judges,16 and
failure to comply with the federal tax laws); and (5) the court
was satisfied that Simkanin would continue to act on those
beliefs in the future. In addition, the district court stated
that U.S.S.G. § 4A1.3(a)(1)17 further justified the departure
because, despite Simkanin’s lack of a prior criminal record,
“based on defendant’s radical beliefs relative to the laws of the
United States, it is likely that he will commit future tax-
related crimes.”
The district court explained that in determining the extent
of the departure in accordance with U.S.S.G. § 4A1.3(a)(4),18 the
court used “as a reference, the criminal history category
16
A person present at a meeting at Simkanin’s place of
business reported that Simkanin stated “I think we need to knock
off a couple of federal judges. That will get their attention.”
17
U.S.S.G. § 4A1.3(a)(1) provides:
(a) Upward Departures.--
(1) Standard for Upward Departure.--If reliable
information indicates that the defendant’s criminal
history category substantially under-represents the
seriousness of the defendant’s criminal history or
the likelihood that the defendant will commit other
crimes, an upward departure may be warranted.
18
U.S.S.G. § 4A1.3(a)(4) provides:
(4) Determination of Extent of Upward Departure.--
(A) In General.--Except as provided in subdivision
(B), the court shall determine the extent of a
departure under this subsection by using, as a
reference, the criminal history category applicable
to defendants whose criminal history or likelihood
to recidivate most closely resembles that of the
defendant’s.
-37-
applicable to defendants whose likelihood to recidivate most
closely resembles that of the defendant’s.” The court concluded
that, for the reasons already discussed, Simkanin’s likelihood to
recidivate most closely resembles that of defendants whose
criminal history category is VI. This produced a total offense
level of Twenty-Two and a criminal history category of VI,
resulting in a sentencing range of 84-105 months. The district
court then sentenced at the bottom of that range and imposed an
eighty-four month sentence.
Simkanin argues that the district court erred in imposing an
upward departure on the grounds articulated at the sentencing
hearing because: (1) it did not include a written statement of
reasons in the judgment as required by 18 U.S.C. § 3553(c)(2);19
(2) the district court impermissibly based its departure on
grounds involving Simkanin’s associations and beliefs, in
violation of the First Amendment; and (3) the district court’s
belief that Simkanin posed a danger of recidivism was not
supported by evidence.
19
Section 3553(c) provides:
(c) Statement of reasons for imposing a sentence.--The
court, at the time of sentencing, shall state in open
court the reasons for its imposition of the particular
sentence, and, if the sentence--
(2) is not of the kind, or is outside the range,
described in subsection (a)(4), the specific reason
for the imposition of a sentence different from
that described, which reasons must also be stated
with specificity in the written order of judgment
and commitment . . . .
-38-
We recently discussed the appropriate standard of review to
employ when reviewing a district court’s decision to depart
upwardly from the sentencing range established by the Guidelines.
See United States v. Smith, --- F.3d ----, 2005 WL 1663784, *4-6
(5th Cir. July 18, 2005). There, we explained that the Supreme
Court’s decision in United States v. Booker, 125 S. Ct. 738
(2005), directed us to return essentially to the abuse-of-
discretion standard employed prior to 2003:
Prior to 2003, our review of departure decisions was for
abuse of discretion, pursuant to § 3742(e). In April
2003, Congress amended § 3742(e), altering our standard
of review with respect to the departure decision to de
novo. Under this scheme, while the decision to depart
was reviewed de novo, the degree of departure was still
reviewed for abuse of discretion. Then, in January 2005,
the Supreme Court in Booker excised § 3742(e), leaving
the appellate courts to review sentences for
reasonableness. The Court explained that it was
essentially returning to the standard of review provided
by the pre-2003 text, which directs us to determine
whether the sentence is unreasonable with regard to
§ 3553(a). Section 3553(a) remains in effect, and its
factors guide us in determining whether a sentence is
unreasonable.
Smith, 2005 WL 1663784 at *4 (footnotes and internal quotation
marks omitted);20 see also id. at *4 n.24; United States v.
20
As the Smith court noted, 18 U.S.C. 3553(a) states:
(a) Factors to be considered in imposing a sentence.--The
court shall impose a sentence sufficient, but not greater
than necessary, to comply with the purposes set forth in
paragraph (2) of this subsection. The court, in
determining the particular sentence to be imposed, shall
consider--
(1) the nature and circumstances of the offense and
the history and characteristics of the defendant;
(2) the need for the sentence imposed--
(A) to reflect the seriousness of the offense,
-39-
Harris, 293 F.3d 863, 871 (5th Cir. 2002).21 Applying this
standard, we conclude that Simkanin is not entitled to
resentencing.
to promote respect for the law, and to provide
just punishment for the offense;
(B) to afford adequate deterrence to criminal
conduct;
(C) to protect the public from further crimes
of the defendant; and
(D) to provide the defendant with needed
educational or vocational training, medical
care, or other correctional treatment in the
most effective manner;
(3) the kinds of sentences available;
(4) the kinds of sentence and the sentencing range
established for ... the applicable category of
offense committed by the applicable category of
defendant as set forth in the guidelines ...;
(5) any pertinent [sentencing guidelines] policy
statement ... [;]
(6) the need to avoid unwarranted sentence
disparities among defendants with similar records
who have been found guilty of similar conduct; and
(7) the need to provide restitution to any victims
of the offense.
21
In Harris, 293 F.3d at 871, the court stated:
We review a district court’s departure from the range
established by the Guidelines for abuse of discretion.
The district court’s decision is accorded substantial
deference because it is a fact intensive assessment and
the district court’s findings of fact are reviewed for
clear error. However, the district court’s
interpretation of the Guidelines is a question of law,
reviewed de novo; a district court abuses its discretion
by definition when it makes an error of law. Determining
whether a factor is permissible to take into account when
considering a departure is one of these questions of law.
A district court abuses its discretion if it departs on
the basis of legally unacceptable reasons or if the
degree of the departure is unreasonable.
(internal citations omitted).
-40-
First, Simkanin argues that the district court did not
include its written statement of reasons in its judgment of
conviction and sentence as required by 18 U.S.C. § 3553(c)(2).
We disagree. The judgment clearly states that the Statement of
Reasons and personal information about the defendant are set
forth in an attachment to the judgment. Although Simkanin argued
in his principal brief that the district court never drafted a
written statement of reasons, he concedes in his reply brief that
the court did so and that the written statement is virtually
identical to the oral reasons given by the district court at
sentencing. He also concedes that, after he filed his initial
brief, he received a copy of the written statement, which was in
the sealed part of the appellate record, as is the common
practice in this circuit, and was available to defense counsel.
Thus, Simkanin’s argument that the district court did not author
and include in the record a written statement of reasons is
wrong. Furthermore, we find no merit in Simkanin’s unsupported
argument in his supplemental brief that he is entitled to
resentencing simply because the written reasons were attached to
the judgment and referenced after the judge’s signature, as
opposed to appearing before the judge’s signature.
Second, Simkanin argues that the district court erred
because it upwardly departed on an impermissible basis--namely,
because of his associations and beliefs. Given the particular
facts of this case, however, his argument fails. In Dawson v.
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Delaware, 503 U.S. 159 (1992), the Supreme Court held that it was
constitutional error to admit a stipulation of the defendant’s
membership in a racist prison gang, The Aryan Brotherhood, as an
aggravating factor for consideration in sentencing. Dawson, 503
U.S. at 164-67. The Court reasoned that the defendant’s
membership had no relevance whatsoever to the crime in question,
which was not racially motivated or otherwise connected to the
beliefs of the gang, and it noted that the prosecution had
introduced (via a stipulation) evidence establishing only that
defendant was a member and that the gang held white supremacist
views, not any evidence showing the gang’s violent and unlawful
tendencies. Id. The Court explicitly recognized, however, that
consideration of a defendant’s beliefs and associations might be
appropriate in some instances in making sentencing decisions
about the likelihood that the defendant will engage in future
criminal activity. Id. at 165-66. The Court stated that “the
Constitution does not erect a per se barrier to the admission of
evidence concerning one’s beliefs and associations at sentencing
simply because those beliefs and associations are protected by
the First Amendment.” Id. at 165. Moreover, the Court explained
that “[i]n many cases, for example, associational evidence might
serve a legitimate purpose in showing that a defendant represents
a future danger to society[;] [a] defendant’s membership in an
organization that endorses the killing of any identifiable group,
for example, might be relevant to a jury’s inquiry into whether
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the defendant will be dangerous in the future.” Id. at 166.
Simkanin’s beliefs and associations may be considered if
they were “sufficiently related to the issues at sentencing.”
Boyle v. Johnson, 93 F.3d 180, 183-85 (5th Cir. 1996). Here,
Simkanin’s sentence was not increased merely because of his
abstract beliefs or associations. Rather, Simkanin’s specific
beliefs that the tax laws are invalid and do not require him to
withhold taxes or file returns (and his association with an
organization that endorses the view that free persons are not
required to pay income taxes on their wages) are directly related
to the crimes in question and demonstrate a likelihood of
recidivism.22 Thus, the district court did not constitutionally
err in considering these factors. See id. at 183-85; see also
Fuller v. Johnson, 114 F.3d 491, 497-98 (5th Cir. 1997) (finding
that the defendant’s membership in a racist gang was properly
considered in sentencing because it went to future dangerousness
in light of the evidence showing the gang’s violent
22
This court reached a similar conclusion in an
unpublished opinion, United States v. Tampico, 297 F.3d 396 (5th
Cir. 2002) (per curiam) (unpublished), a child pornography case
in which the court upheld an upward departure that was based in
part on the defendant’s membership in the North American Man Boy
Love Association, which advocates sexual relationships between
men and underage boys. The court concluded that the defendant’s
membership in the organization was relevant to sentencing because
it may indicate the increased likelihood of recidivism. Tampico,
297 F.3d at 402-03. As Simkanin correctly points out, Tampico is
not binding precedent. Nonetheless, its reasoning is persuasive
in light of Dawson and Boyle.
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tendencies).23
Simkanin also briefly argues that the district court’s
finding that he held “contempt and disrespect for the law” was
not a proper basis for upward departure. Relying solely on
United States v. Andrews, 390 F.3d 840, 847-48 (5th Cir. 2004),
he claims that the appropriate action for the district court to
take in response to such contempt is the denial of a downward
adjustment for acceptance of responsibility. However, Andrews
involved a district court’s upward departure expressly based in
part on the defendant’s failure to take responsibility (i.e., his
lack of paid restitution, attempts to blame others for his
behavior, and insincerity in his proffered words of remorse).
The district court in the present case did not base its upward
departure on the defendant’s lack of acceptance of
responsibility, but rather on the likelihood that he would
23
The other Supreme Court cases cited by Simkanin on the
constitutional question are inapposite. See Wisconsin v.
Mitchell, 508 U.S. 476, 485 (1993) (upholding a statute that
increases punishment for crimes committed with a racially
motivated intent); McDonald v. Smith, 472 U.S. 479 (1985)
(holding that the First Amendment right to petition is no shield
against liability for libel); Watts v. United States, 394 U.S.705
(1969) (per curiam) (holding that a statute prohibiting threats
against the President did not constitutionally apply to
criminalize the defendant’s conditional and hyperbolic political
comment); Noto v. United States, 367 U.S. 290, 297-98, 299-300
(1961) (addressing a conviction under the membership clause of
the Smith Act and finding evidence insufficient to show a present
advocacy of overthrow); R.A.V. v. Minnesota, 505 U.S. 377 (1992)
(holding unconstitutional on First Amendment grounds a law
criminalizing conduct such as placing a burning cross or Nazi
swastika, which one knows to arouse anger, alarm, or resentment
on the basis of race, religion, etc.).
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recidivate. Andrews, therefore, is inapposite.24
At oral argument, defense counsel contended that the
district court erred because it departed upwardly on the basis of
Simkanin’s firmly held beliefs and that this reasoning
contradicted the government’s position, and the jury’s finding,
that Simkanin did not hold good-faith belief that he was not
obligated to file income returns or withhold taxes from the
paychecks of Arrow’s employees. However, as the government
correctly responded, the district court’s decision to depart
upwardly did not contradict the jury’s finding that Simkanin did
not have a valid good-faith defense under Cheek. As discussed
above, Simkanin’s avowed position was that he would not comply
with the tax laws, and the reason for his position was that the
tax laws were both inapplicable to him and invalid for a number
of reasons beyond the boundaries of a legitimate good-faith
defense under Cheek. At sentencing, Simkanin made clear to the
district court that he continued to hold these beliefs when he
stated that he still “firmly believed” that the Bible, the
Constitution, and the Declaration of Independence all agree that
24
Simkanin also challenges the district court’s ability
to predict the likelihood of recidivism, stating that even
trained scientists cannot accurately make such predictions. The
Guidelines, however, clearly permit a district court to depart
upwardly if it believes that reliable information suggests that
the defendant’s likelihood to recidivate is not adequately
represented by the range established. See U.S.S.G.
§ 4A1.3(a)(1). Obviously, nothing in the Guidelines or our case
law suggests that the district court must be able to predict
recidivism with scientific certainty.
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“the wages of a laborer are withheld through fraud.” Thus, the
district court was convinced that Simkanin’s likelihood to
recidivate was not adequately reflected by the Guidelines range,
and it did not abuse its discretion in upwardly departing from
that range.
Finally, Simkanin contends that the extent of the upward
departure was unreasonable. The district court upwardly departed
from a range of forty-one to fifty-one months imprisonment to
impose a sentence of eighty-four months. Simkanin argues that
the district court failed to articulate the reasons “why a
sentence commensurate with a bypassed criminal history category
was not selected.” United States v. Lambert, 984 F.2d 658, 663
(5th Cir. 1993) (en banc). Simkanin is correct that the district
court did not specifically state why it rejected each of the
preceding criminal history categories. However, as the
government correctly notes, this court does “not require the
district court to go through a ‘ritualistic exercise’ where . . .
it is evident from the stated grounds for departure why the
bypassed criminal history categories were inadequate.” United
States v. Ashburn, 38 F.3d 803, 809 (5th Cir. 1994) (en banc)
(quoting Lambert, 984 F.2d at 663). Simkanin correctly notes
that it was clearer in Ashburn why the district court had decided
that defendant’s criminal history category did not adequately
reflect his prior history--the district court in Ashburn noted
that the defendant had committed a series of robberies for which
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he was never convicted. Id. However, the district court in the
present case explained that it was convinced that Simkanin’s
membership in a group with radical views rejecting the laws of
the United States and his professed beliefs that he is not
required to abide by the tax laws would lead him to commit other
tax-related crimes. Moreover, the mere fact that the upward
departure nearly doubled the Guidelines range does not render it
unreasonable. See United States v. Daughenbaugh, 49 F.3d 171,
174-75 (5th Cir. 1995) (upholding departure from Guidelines range
of fifty-seven to seventy-one months to a sentence of 240
months); Ashburn, 38 F.3d at 809 (upholding departure from range
of sixty-three to seventy-eight months to sentence of 180
months). Therefore, we are persuaded, guided by the factors in
§ 3553(a), that the sentence imposed was reasonable for the
reasons given by the district court.
E. Booker Error
Simkanin argues that he is entitled to resentencing under
Booker. He concedes that he did not object on relevant grounds
in the district court and that our review is therefore for plain
error. See United States v. Mares, 402 F.3d 511, 520 (5th Cir.
2005). The basis of Simkanin’s Booker argument is that the
district court erred by enhancing his sentence based on facts not
admitted by the defendant nor found by the jury. He claims that
this court should focus solely on this alleged enhancement error
without considering the effect of the Guidelines’ mandatory
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nature at the time that he was sentenced. This argument fails
under Mares because the proper inquiry for Booker error under the
plain-error test is whether “the result would have likely been
different had the judge been sentencing under the Booker advisory
regime rather than the pre-Booker mandatory regime.”25 Mares,
402 F.3d at 522. Simkanin clearly has not met his burden because
he has pointed to nothing in the record suggesting that he would
have received a lower sentence had he been sentenced under the
post-Booker advisory Guidelines. His assertion that other
defendants with similar records who have committed similar
offenses have received shorter sentences does nothing to show
that he was prejudiced by the district court’s assumption that
the Guidelines were mandatory. Furthermore, Simkanin’s
suggestion that we should simply disregard the Supreme Court’s
remedial majority in Booker, including its explicit instruction
to apply its remedial interpretation of the Guidelines to all
cases pending on direct appeal, is obviously unconvincing. See,
e.g., Booker, 125 S. Ct. at 769; cf. United States v. Scroggins,
411 F.3d 572, 576-77 (5th Cir. 2005). Finally, because we
conclude that Simkanin is not entitled to resentencing, we need
not address his argument that the district court’s sentencing
25
Indeed, Simkanin explicitly recognizes that his
position is foreclosed by Mares, and it is therefore unavailing.
See Hogue v. Johnson, 131 F.3d 466, 491 (5th Cir. 1997) (noting
that one panel of this circuit may not overturn another panel
absent an intervening decision to the contrary by the Supreme
Court or this court en banc).
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options would be limited on remand.
III. CONCLUSION
For the foregoing reasons, we AFFIRM Simkanin’s conviction
and sentence.
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