NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted May 26, 2010
Decided June 21, 2010
Before
FRANK H. EASTERBROOK, Chief Judge
RICHARD A. POSNER, Circuit Judge
DIANE P. WOOD, Circuit Judge
No. 09‐3308
UNITED STATES OF AMERICA, Appeal from the United States District
Plaintiff‐Appellee, Court for the Northern District
of Illinois, Eastern Division.
v.
No. 07 CR 788‐1
MANILEN MENDOZA,
Defendant‐Appellant. David H. Coar, Judge.
O R D E R
Manilen Mendoza was convicted after a jury trial of three counts of filing a false
income tax return. See
26 U.S.C. § 7206(1). The district court sentenced her to a total of 30
months’ imprisonment, and Mendoza filed a notice of appeal. Her appointed counsel,
however, now moves to withdraw because he has concluded that any appellate argument
would be frivolous. See Anders v. California,
386 U.S. 738 (1967). Mendoza has not
No. 09‐3308 Page 2
responded to counsel’s motion. See CIR. R. 51(b). We limit our review to the potential issues
identified by counsel in his facially adequate brief. See United States v. King,
506 F.3d 532,
534 (7th Cir. 2007).
In November 2007 a grand jury returned an indictment charging that Mendoza had
omitted more than $400,000 from the total income reported on line 22 of her Form 1040
individual returns for tax years 2004, 2005, and 2006. Mendoza claimed to be a concert
promoter, and in 2005 she had incorporated Prestige Entertainment. She used Prestige to
defraud people who invested in concerts by big‐name artists, such as Stevie Wonder,
Kenny Rogers, Lionel Richie, and Olivia Newton‐John. In fact, Mendoza was converting
those funds to her personal use. The California authorities caught up with her and charged
her with theft. Before her federal trial began, she moved in limine to exclude this damaging
evidence. The district court denied Mendoza’s motion, and at trial the government called
four witnesses who testified that Mendoza had lied to them when she persuaded them to
invest in her concerts.
The government also called Steven Gambill, the certified public accountant who
prepared Mendoza’s returns for 2004 and 2005. Gambill testified that the information
Mendoza gave him for her 2004 return was incomplete. Notably, it did not include the
income that she purportedly received from her concert businesses. Gambill also testified
that he helped Mendoza incorporate three companies, including Prestige, in November
2005, and he gave her a lecture on good accounting practices. She must not have listened
carefully: when it came time to file tax returns for 2005, Mendoza told Gambill that Prestige
and her other two companies had not been in operation and had not generated income.
Throughout 2006, Gambill repeatedly reminded Mendoza that he would need income and
expense records to prepare her individual and corporate tax returns for that year, but he
never got them. Instead, Mendoza took her business to H&R Block and hired Danuta
Kozlowski to prepare her 2006 individual return. Kozlowski testified that Mendoza
reported receiving $20,000 in wages from Prestige, but she did not reveal that she was the
only stockholder and had spent substantial amounts of its money on personal expenses.
The IRS revenue agent who analyzed Mendoza’s bank records testified that
Mendoza deposited checks totaling approximately $66,000 in 2004, $77,500 in 2005, and
$275,000 in 2006. None of those funds were used in her concert business. Instead, Mendoza
transferred the funds to relatives and spent lavishly on personal items. Other than her
wages for 2006, Mendoza did not report any income from Prestige or other concert
No. 09‐3308 Page 3
promotion businesses for tax years 2004, 2005, or 2006, nor did Prestige or her other
companies file income tax returns for these years.
Mendoza testified. She conceded that she had lied to her investors, that she kept
their money, and that she did not report those funds on her tax returns. Her only defense
was that she did not know that she was required to report the money. She testified that
Gambill had instructed her that an individual return is distinct from a corporate return.
Somehow she transformed that unexceptional piece of information into the idea that a
corporation that is unprofitable does not have to file a return. Mendoza further contended
that she did not defraud her investors because, she believed, they had provided money not
for specific concerts but for the concert‐promotion business as a whole. That business, she
asserted, had incurred significant expenses during the years 2004 through 2006. To support
her defense, she produced invoices, copies of checks, and several receipts dating from 2005
and 2006 that total about $100,000. These documents did not, however, account for the rest
of the money Mendoza accepted from her investors, and she conceded that she used the
Prestige debit card for personal purchases and did not segregate business and personal
funds. The jury found Mendoza guilty on all three counts.
Counsel first considers whether Mendoza could argue that the government failed
to prove that she willfully lied about her income. A conviction under § 7206(1) requires
proof that the defendant willfully filed under penalty of perjury a return that she did “not
believe to be true and correct as to every material matter.”
26 U.S.C. § 7206(1); see United
States v. Pansier,
576 F.3d 726, 736 (7th Cir. 2009). Counsel concludes that the evidence of
willfulness is more than sufficient, and we agree. Mendoza never told either of her return
preparers that she had used a substantial amount of her investors’ money for personal
expenses. Those funds—whether characterized as the proceeds of fraud or as money
skimmed from a legitimate business—were income to Mendoza. See United States v.
Presbitero,
569 F.3d 691, 700‐01 (7th Cir. 2009); United States v. Peters,
153 F.3d 445, 460‐62
(7th Cir. 1998). And her failure to disclose that income to Gambill or Kozlowski is evidence
of willfulness. See United States v. Powell,
576 F.3d 482, 495 (7th Cir. 2009); United States v.
Useni,
516 F.3d 634, 650 & n.10 (7th Cir. 2008). Mendoza’s testimony that she spent the
investors’ money for business purposes cannot be squared with the IRS agent’s analysis of
her personal spending, and the illicit source of the unreported income is further evidence
that Mendoza’s omission was willful. See Powell,
576 F.3d at 495. Any challenge to the
sufficiency of the evidence would be frivolous.
No. 09‐3308 Page 4
Counsel next evaluates a potential challenge under FED. R. EVID. 404(b) to the
admission of evidence that Mendoza derived the unreported income through fraud. Rule
404(b) bars evidence of a defendant’s other, uncharged bad acts to establish a propensity
to commit crime. United States v. Conner,
583 F.3d 1011, 1021 (7th Cir. 2009). But the rule
permits the admission of such evidence to establish a material issue like motive, intent, or
knowledge, so long as the evidence pertains to events that were similar and close in time
to the charged conduct, is sufficient to support a jury finding that the defendant committed
the other bad act, and sufficiently probative to outweigh its possible prejudicial effect.
United States v. Johnson,
584 F.3d 731, 736 (7th Cir. 2009); United States v. Moore,
531 F.3d 496,
499 (7th Cir. 2008).
We agree with counsel that it would be frivolous to challenge the admission of
evidence about the source of Mendoza’s unreported income. Four of her victims testified
about her misrepresentations and their combined investments of more than $400,000
during 2004 through 2006. This evidence was relevant to show Mendoza’s wilfulness. See
Powell,
576 F.3d at 495; United States v. Zizzo,
120 F.3d 1338, 1355 (7th Cir. 1997); United
States v. Birkenstock,
823 F.2d 1026, 1027‐28 (7th Cir. 1987). The victims’ testimony,
combined with the testimony of the IRS revenue agent, was sufficient to support the jury’s
finding that Mendoza committed fraud. Finally, the district court instructed the jury that
it could use the evidence “only to determine whether Manilen Mendoza willfully failed to
include reportable income on her 2004, 2005, and 2006 tax returns,” thereby alleviating any
risk of undue prejudice. See Moore,
531 F.3d at 500. We would presume that the jury
followed its instructions. See United States v. Puckett,
405 F.3d 589, 599 (7th Cir. 2005).
Counsel also considers a challenge based on the district court’s warning that it
would add a “missing witness” instruction to its jury charge if defense counsel continued
to assert during his closing argument that the government had not refuted Mendoza’s
testimony that she used the investors’ money to pay business expenses. The court warned
counsel that it would instruct the jury that, “where witnesses are available to both parties,
failure to call a witness is of no particular moment.” See FEDERAL CRIMINAL JURY
INSTRUCTIONS OF THE SEVENTH CIRCUIT § 3.24 (1999). Counsel suggests that this threat of a
revision to the previously announced jury charge was contrary to FED. R. CRIM. P. 30(b),
which provides that a trial judge must inform the parties before closing arguments how it
intends to rule on requested jury instructions. But Rule 30 does not require the district
court to inform counsel of every instruction before closing arguments, nor does the rule
prohibit the court from supplementing the jury instructions to prevent the jury from
No. 09‐3308 Page 5
becoming confused or issuing a verdict on an improper basis. United States v. Buishas,
791
F.2d 1310, 1316 (7th Cir. 1986); United States v. Shirley,
435 F.2d 1076, 1078 (7th Cir. 1970).
Moreover, the court ultimately did not give the instruction, and counsel has not identified
any possible prejudice that the warning could have caused.
As for Mendoza’s sentence, counsel evaluates and rejects as frivolous two potential
challenges. The first is whether Mendoza could argue that under U.S.S.G. § 3D1.2 and
§ 5G1.3(b) the district court should have “grouped” her pending state charge for the fraud
with the tax convictions to determine the guidelines range and then reduced the federal
sentence by the 13 months that she had spent in state pretrial detention at the time of her
federal sentencing. That argument would go nowhere. The grouping rules found in § 3D1.2
of the guidelines apply only to multiple counts of conviction within the same federal
prosecution. See U.S.S.G. ch. 3 pt. D, introductory cmt. (2009); see also United States v.
Mahalick,
498 F.3d 475, 481‐82 (7th Cir. 2007). And § 5G1.3(b), which permits a sentencing
court to adjust a federal sentence to account for any period of incarceration served on an
“undischarged term of imprisonment” for a related crime, was likewise inapplicable:
Mendoza had not been convicted in the California case and was not serving an
undischarged term of imprisonment.
The second potential argument is whether the overall prison sentence is
unreasonable. Mendoza’s 30‐month term falls squarely within the properly calculated
guidelines range of 27 to 33 months and is presumptively reasonable. See Rita v. United
States,
551 U.S. 338, 350‐51 (2007); United States v. Cooper,
591 F.3d 582, 590 (7th Cir. 2010).
Counsel cannot identify any factor that would overcome that presumption, nor can we.
Accordingly, we GRANT counsel’s motion to withdraw and DISMISS the appeal.
