United States v. Joyce Simmons , 420 F. App'x 414 ( 2011 )

Case: 09-11031 Document: 00511432204 Page: 1 Date Filed: 04/01/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
April 1, 2011
No. 09-11031 Lyle W. Cayce
Summary Calendar Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JOYCE M. SIMMONS, doing business as Diamond Notary and Tax Service,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:08–CR–131-1
Before KING, BENAVIDES, and ELROD, Circuit Judges.
PER CURIAM:*
Joyce M. Simmons appeals the sentence imposed following her guilty plea
conviction for six counts of preparation of false tax returns. The district court
sentenced Simmons to the statutory maximum sentence of three years of
imprisonment on each count, and it ordered that the sentences would run
consecutively for a total of 216 months. It also ordered Simmons to pay
*
Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
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$28,261,295.08 in restitution to the Internal Revenue Service (IRS). We
AFFIRM.
I.
Simmons argues that the district court erred by finding that the amount
of tax loss for her offense was over $28 million. She maintains that the district
court erred because the $28 million estimation was not conservative and
reasonable, because the sample of forty-one tax returns investigated by the IRS
was not a random sample, and because she was not given enough time to
prepare a defense to the allegation that the estimated loss was $28 million prior
to the hearing regarding her initial plea agreement. She further contends that
the loss calculation was incorrect because it included tax returns filed for the
2002 tax year, for which the statute of limitations expired before her indictment,
and the 2006 tax year, when she alleges she leased her business to others and
did not participate in preparing tax returns. She also asserts that the loss
amount calculation was unconstitutional under United States v. Booker, because
it was based on facts not admitted by her or proved to a jury beyond a reasonable
doubt. 543 U.S. 220 (2005).
While Simmons objected to the amount of loss calculation in the district
court, she argued only that the amount of loss should be lower for equitable
reasons and that she did not operate the business in tax year 2006. She did not
raise any of the arguments that she raises on appeal except for her argument
that she leased her business to others in tax year 2006. Thus, Simmons’
argument regarding tax year 2006 is reviewed for clear error, while her
remaining arguments are reviewed for plain error. See United States v. Neal,
578 F.3d 270, 272-73 (5th Cir. 2009).
The guidelines commentary specifically states that reasonable estimation
of tax loss is allowed, and other courts have approved of the use of roughly the
same method of estimation used by the district court. See U.S.S.G. § 2T1.1, cmt.
n.1 (2008); United States v. Bryant, 128 F.3d 74, 75-76 (2d Cir. 1997); United
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States v. Maye, No. 99-4556, 2000 WL 223344 at *1 (4th Cir. 2000)
(unpublished). The evidence in the pre-sentence report (PSR) and the testimony
of IRS Agent Shannon Dawson established the method by which the estimated
tax loss was calculated. While Simmons correctly states that the forty-one tax
returns investigated by Agent Dawson were not a completely random sample,
the record does not indicate that those returns would have a higher falsity rate
than any other returns prepared by Simmons. Moreover, the PSR correctly
noted that Agent Dawson’s calculation was conservative because she used the
lower of two reasonable falsity percentages that she calculated from the
investigated sample, and she did not include any tax loss from approximately
3,000 tax returns prepared by Simmons that did not include a Schedule C. As
the method of estimating the tax loss was reasonable and Simmons did not
produce evidence contradicting it, the district court did not commit error, plain
or otherwise, in its tax loss calculation. See United States v. Clark, 139 F.3d 485,
490 (5th Cir. 1998).
Although Simmons’ counsel received Agent Dawson’s calculation of
estimated loss the day before the hearing at which Simmons’ first plea
agreement was rejected, the calculation was fully explained at that hearing,
which occurred over five months before sentencing, giving Simmons more than
ample time to prepare any defense she desired. Also, her contention that the
district court improperly included tax returns filed in tax year 2002 in the
estimated loss calculation is refuted by the record as it shows that only tax
returns filed in tax years 2003-2007 were included.
Though Simmons argued at sentencing that she did not run her tax
preparation business in tax year 2006, she did not present any evidence
supporting her claim, and the PSR indicated that she ran the business from 2002
until 2008. At sentencing, the government stated that its investigation revealed
that Simmons executed a lease agreement with another person to manage the
tax preparation business at the end of 2006, but that Simmons maintained
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control of the business despite the lease. Because Simmons did not present
evidence contradicting the evidence set forth in the PSR, the district court did
not err by accepting it. See Clark, 139 F.3d at 490.
Simmons’ Booker argument is without merit. By rendering the guidelines
advisory only, Booker eliminated the Sixth Amendment concerns that prohibited
a sentencing judge from finding all facts relevant to sentencing. United States
v. Mares, 402 F.3d 511, 519 (5th Cir. 2005). Hence, the district court’s finding
“by a preponderance of the evidence all the facts relevant to the determination
of a [g]uideline sentencing range” was not error. Id.
II.
Simmons next argues that the district court erred by applying an
enhancement for her utilizing sophisticated means during the offense. She
contends that the means she utilized were not sophisticated and that an
enhancement for use of a special skill pursuant to U.S.S.G. § 3B1.3 should not
have applied because she received an enhancement for being in the business of
preparing tax returns. She asserts that the enhancement was not appropriate
because a sophisticated means enhancement was not applied in United States
v. Poltonowicz, 353 F. App’x 690 (3d Cir. 2009), even though the defendant in
that tax preparation fraud case had previously worked as an analyst for the IRS
criminal investigation division.
While Simmons was not a tax attorney or an accountant, special training
is not necessary for the application of a sophisticated means enhancement. See
United States v. Charroux, 3 F.3d 827, 837 (5th Cir. 1993). The evidence
presented in the PSR showed that Simmons operated a tax return preparation
business, trained and instructed employees on preparing false tax returns and
creating fraudulent supporting documentation, and purchased personal
information used to claim false dependents from clients and the homeless. Her
argument that she could not receive an enhancement under § 3B1.3 and an
enhancement for being in the business of preparing tax returns is irrelevant as
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she did not receive an enhancement under § 3B1.3. In addition, her reliance
under Poltonowicz is misplaced as that case did not address the issue of a
sophisticated means enhancement, and that opinion does not indicate whether
a sophisticated means enhancement was applied or not. See Poltonowicz, 353
F. App’x at 691-95. Given the complex nature of Simmons’ tax preparation fraud
scheme, the district court’s finding that she used sophisticated means was
plausible in light of the record as a whole, and, therefore, not clearly erroneous.
See United States v. Mata, 624 F.3d 170, 173 (5th Cir. 2010).
III.
Simmons then argues that the district court erred by applying a four-level
enhancement for her being an organizer or leader of a criminal activity that
involved five or more participants or was otherwise extensive. She asserts that
there were not five participants of the criminal activity because her employees
were not involved in the preparation of false tax returns and that the criminal
activity was not otherwise extensive because she acted alone. She bases her
argument on a statement in the PSR prepared after her initial guilty plea in
which Agent Dawson stated that Simmons’ employees had asserted that, in
preparing a tax return, they did not include a Schedule C unless the taxpayer
legitimately had a need for one.
The information in the PSR indicated that Simmons employed at least
twelve people during the operation of her tax return preparation fraud scheme.
The PSR also showed that Simmons directed her employees to prepare false tax
returns, got upset if they did not attach a Schedule C to a return, instructed
them as to what types of businesses to include on a Schedule C, and instructed
them to create false receipts to justify the information on Schedule C’s that were
challenged by the IRS. This information indicated that all of the elements for
the application of the enhancement were met as it showed that Simmons
organized or led the criminal activity, that there was at least one other
criminally responsible participant, and that the criminal activity included more
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than five participants. See United States v. Ho, 311 F.3d 589, 610 (5th Cir.
2002). While the original PSR may have indicated that Simmons’ employees
denied participating in the criminal activity, the information in the updated PSR
showed that the enhancement was proper. Because Simmons did not present
any evidence at sentencing to contradict the evidence in the updated PSR, the
district court did not clearly err by accepting the evidence as set forth in it and
applying the enhancement. See Clark, 139 F.3d at 490.
IV.
Simmons argues that the district court erred by applying an enhancement
for obstruction of justice. She asserts that she transferred all of the property
that she did not report on her financial affidavit to her brother before her
indictment and arrest, and that she eventually provided the district court with
documentation showing the transfer. She maintains that her transfer of the
property was legitimate because she suffered from Hepatitis C and was
concerned for the care of her daughter, and because her brother agreed to care
for her daughter. She contends that her testimony regarding her financial
condition and the transfer of the property was truthful and that the district
court’s finding that she committed perjury was incorrect. In a related argument,
she asserts that the district court erred by denying her a reduction for
acceptance of responsibility because its conclusion that she committed perjury
was false.
Simmons’ sole challenge to the denial of a reduction for acceptance of
responsibility is her argument that the district court should not have found that
she committed perjury and applied the obstruction of justice enhancement; she
does not argue that this is one of the rare cases in which both adjustments
should apply. So, the only issue presented is whether the district court clearly
erred by denying a reduction for acceptance of responsibility. See U.S.S.G. §
3E1.1, cmt. n.4 (2008).
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At the hearing regarding her financial status, Simmons testified that she
legitimately sold the property worth nearly $1,000,000 to her brother for
$80,000, and that the sale was completed on July 15, 2008, before her
indictment. She averred that her brother paid her in cash; she did not produce,
however, any evidence of payment from him, and could not remember what
happened to the money that he paid her. Furthermore, on September 3, 2008,
after the alleged transfer of the property and after she filed the financial
affidavit that did not include the property at her initial appearance, Simmons
– not her brother – filed a lawsuit challenging the tax appraisal of one of the
pieces of property she allegedly sold to her brother. While she stated that the
lawsuit was filed in her name because she was working for her brother at the
time, this does not explain the allegation in the lawsuit that she was the owner
of the property at all relevant times. As Simmons’ testimony was not believable
and was contradicted by court records, the district court’s determination that she
committed perjury, its application of the enhancement for obstruction of justice,
and its corresponding denial of a reduction for acceptance of responsibility were
plausible in light of the record as a whole, and, therefore, not clearly erroneous.
See United States v. Gonzales, 436 F.3d 560, 586 (5th Cir. 2006).
V.
For the first time on appeal, Simmons argues that the district court erred
by applying two criminal history points for her committing the offense while on
deferred adjudication probation. She asserts that her probation was extended
in her prior case because she was indigent and could not pay $5,547 in
restitution that she had been ordered to pay. She maintains that the district
court erred by applying the criminal history points because criminal history
points should not be attributed solely because of a defendant’s indigence.
Because Simmons did not object to the application of the criminal history
points in the district court, we review this issue for plain error only. See United
States v. John, 597 F.3d 263, 282 (5th Cir. 2010).
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The record shows Simmons’ probation for one of her prior convictions was
extended because she failed to pay ordered restitution, but that her probation in
that case expired before the commission of the present offense. Simmons,
however, was still on deferred adjudication probation for a different prior
conviction during the commission of the present offense, and that probation was
not extended due to her failure to pay restitution. Thus, Simmons’ argument is
refuted by the record, and she has not shown that the district court committed
error, plain or otherwise, by applying the two criminal history points.
Simmons next argues that the district court erred by ordering her to pay
$28,261,295.08 in restitution to the IRS, and she requests that this court set
aside the provision in the plea agreement calling for full restitution to be
ordered. She asserts that the restitution amount was not authorized because
neither the Mandatory Victim Restitution Act (MVRA), 18 U.S.C. § 3663A, nor
the Victim Witness Protection Act (VWPA), 18 U.S.C. § 3663, are applicable in
tax fraud cases brought under Title 26. She further maintains that the
restitution amount was erroneous because a restitution calculation, unlike an
amount of loss calculation under the guidelines, can be based only on conduct for
which the defendant was convicted, not relevant conduct. She contends that the
tax loss amount on which the restitution award was based was grossly
overstated and that the large amount of restitution is beyond her means and
detracts from the possibility of her rehabilitation.
While Simmons challenged the restitution amount at sentencing, she
merely asked for leniency, and she did not raise any of the arguments that she
raises on appeal. We thus review her arguments for plain error only. See United
States v. Miller, 406 F.3d 323, 327 (5th Cir. 2005).
While neither the MVRA nor the VWPA automatically applies in a tax
fraud case under Title 26, the VWPA states that a district court “may also order
restitution in any criminal case to the extent agreed to by the parties in a plea
agreement.” § 3663(a)(3). In the plea agreement, Simmons agreed “to pay
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restitution for all amounts found by the Court to be due and owing by the
defendant to the IRS” and further agreed “that restitution [was] not limited to
the amounts charged in the Indictment.” As discussed above, the district court’s
tax loss calculation was not erroneous. Because the restitution order was only
to the extent agreed in the plea agreement, it, therefore, was authorized under
the VWPA. See § 3663(a)(3). The district court did not commit error, plain or
otherwise, by ordering Simmons to pay $28,261,295.08 in restitution to the IRS.
See id.
VI.
Simmons also argues that her sentence was substantively unreasonable
because it created an unwarranted sentence disparity between her and other
defendants convicted of preparation of false tax returns. In support of this
argument, she cites to numerous cases where a defendant was convicted of
preparation of false tax returns and received a far lesser sentence. In a related
argument, she asserts that the sentence constituted cruel and unusual
punishment in violation of the Eight Amendment. In connection with this
argument she “suggests that the court based its sentencing determination on her
race, sex and socio-economic status rather than the merits of the case itself.”
Because Simmons did not object specifically to the reasonableness of the
sentence and did not argue that it constituted cruel and unusual punishment,
we review for plain error only. See United States v. Peltier, 505 F.3d 389, 391-92
(5th Cir. 2007). That standard “erects a more substantial hurdle to reversal of
a sentence than” does review for abuse of discretion. Id. at 391.
The district court sentenced Simmons to the only sentence within the
guidelines sentencing range. As a result, her sentence is entitled to a
presumption of reasonableness. See United States v. Alonzo, 435 F.3d 551, 554
(5th Cir. 2006). While she speculates that the district court based the sentence
upon her race, gender, or socio-economic status, the record does not so indicate
that the district court did. Because Simmons was sentenced within the
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guidelines range, concern about an unwarranted sentence disparity was
minimal, and although she lists tax fraud cases where defendants have received
lesser sentences, she has not shown that those cases were factually similar to
her case. See United States v. Willingham, 497 F.3d 541, 544-45 (5th Cir. 2007).
As Simmons has not shown that the district court failed to account for a factor
that should have received significant weight, relied upon an improper or
irrelevant factor, or clearly made an error in judgment in balancing factors, she
has not rebutted the presumption of reasonableness. Nor has she shown that
the sentence was plainly erroneous. See United States v. Cooks, 589 F.3d 173,
186 (5th Cir. 2009), cert. denied 130 S. Ct. 1930 (2010). Simmons has also failed
to show that her sentence constituted cruel and unusual punishment in violation
of the Eighth Amendment. See Rummel v. Estelle, 445 U.S. 263, 284-85 (1980);
United States v. Gonzales, 121 F.3d 928, 943 (5th Cir. 1997).
VII.
Simmons then argues that the district court violated her Sixth
Amendment right to counsel by discharging her appointed counsel and ordering
her to retain counsel. She maintains that going to trial would have allowed her
to eliminate the restitution that the district court imposed, but does not explain
what this has to do with the district court’s discharge of her appointed counsel.
She concludes that the district court’s discharge of her appointed counsel shows
that the district court was prejudiced against her.
Although Simmons contested the district court’s discharge of her
appointed counsel, she did not argue that the discharge of appointed counsel
violated her Sixth Amendment rights. We, therefore, review the issue for plain
error only. See United States v. Jackson, 549 F.3d 963, 977 (5th Cir. 2008).
Having found that Simmons had the financial means to retain counsel, the
district court discharged her appointed counsel. See 18 U.S.C. § 3006A(c); see
also United States v. Foster, 867 F.2d 838, 841 (5th Cir. 1989) (noting that the
Criminal Justice Act of 1964 requires only that a court appoint counsel to
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represent a defendant who has not waived his right to counsel and who is
financially unable to obtain counsel). The record shows that Simmons
subsequently retained counsel, and has at all relevant times during the
proceedings against her been represented by counsel.1 Accordingly, Simmons
has not shown that the district court plainly erred by violating her Sixth
Amendment right to counsel. See U.S. Const. amend. VI; Iowa v. Tovar, 541
U.S. 77, 87 (2004); Faretta v. California, 422 U.S. 806, 835-36 (1975).
For the foregoing reasons, the judgment of the district court is hereby
AFFIRMED.
1
Except for the present appeal, where she has chosen to exercise her right to self-
representation, the record shows Simmons was represented by counsel at all relevant times
during the proceedings against her.
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