United States v. Walter Prezioso ( 2019 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 25 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 18-50056
Plaintiff-Appellee, D.C. No.
2:16-cr-00712-JFW-1
v.
WALTER DANIEL PREZIOSO, MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
John F. Walter, District Judge, Presiding
Argued and Submitted April 11, 2019
Pasadena, California
Before: RAWLINSON and MURGUIA, Circuit Judges, and GILSTRAP, ** District
Judge.
Appellant Walter Prezioso was convicted of tax fraud and sentenced to 24
months imprisonment. Prezioso appeals his conviction and requests a retrial. He
also objects to the District Court’s use of acquitted and uncharged conduct in
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable James Rodney Gilstrap, United States District Judge
for the Eastern District of Texas, sitting by designation.
sentencing on Sixth Amendment grounds. We have jurisdiction under 28 U.S.C. §
1291 and affirm.1
I. Jury Instructions
Whether a jury instruction should have been given in the first place is
reviewed for abuse of discretion. United States v. Heredia, 483 F.3d 913, 921 (9th
Cir. 2007). “We review de novo whether the . . . instructions misstated or omitted
an element of the charged offense.” United States v. Chi Mak, 683 F.3d 1126, 1133
(9th Cir. 2012). A district court’s specific formulation of the instructions is reviewed
for abuse of discretion. Id. If a party fails to object to jury instructions in accordance
with Federal Rule of Criminal Procedure 30(d), we review for plain error. United
States v. Anderson, 741 F.3d 938, 945 (9th Cir. 2013).
“[T]he relevant inquiry is whether the instructions as a whole are misleading
or inadequate to guide the jury’s deliberation.” Anderson, 741 F.3d at 947. The
instructions are viewed “in context, not in isolation.” United States v. Pierre, 254
F.3d 872, 876 (9th Cir. 2001).
Prezioso was charged with tax fraud, which requires a showing of willfulness.
Cheek v. United States, 498 U.S. 192, 200 (1991). The District Court gave two
instructions on willfulness. The first instruction was agreed to by the parties and
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We assume the parties’ familiarity with the facts and procedural history of this
case.
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defined willful intent. The second was an advice-of-accountant instruction
requested by the Government and objected to by defense counsel, which stated:
One element that the government must prove beyond a reasonable doubt is
that the defendant had the unlawful intent to subscribe to income tax returns
that were false as to a material matter. Evidence that the defendant in good
faith followed the advice of an accountant would be inconsistent with such an
unlawful intent. Unlawful intent has not been proved if the defendant, before
acting, made full disclosure of all material facts to an accountant, received the
accountant’s advice as to the specific course of conduct that was followed,
and reasonably relied on that advice in good faith.
In the context of criminal tax cases, a defendant has not acted willfully if he
operates in good faith on a mistaken understanding of the law, no matter how
unreasonable it may be. Cheek, 498 U.S. at 201–03. Prezioso argues that the advice-
of-accountant instruction should have included this “good faith” caveat and by
omitting such, the instruction sent mixed messages to the jury.
Based on the record, the District Court did not err in giving the advice-of-
accountant instruction in the first instance. Prezioso’s primary defense at trial was
that he did not willfully violate the tax laws because he relied on the advice of his
accountants. See United States v. Walter-Eze, 869 F.3d 891, 909 (9th Cir. 2017).
The instruction was also a correct statement of law. This Circuit has explicitly
rejected the contention that such an instruction must include a caveat that an
incomplete disclosure to an accountant is sufficient if made in good faith. United
States v. Bishop, 291 F.3d 1100, 1107 (9th Cir. 2002).
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II. Exclusion of Expert
We review a district court’s decision to admit or exclude expert testimony for
abuse of discretion. United States v. Christian, 749 F.3d 806, 810 (9th Cir. 2014).
Expert testimony is admitted only if it will “assist the trier of fact to understand the
evidence or to determine a fact in issue.” Fed. R. Evid. 702; Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579, 589 (1993).
We find that the District Court did not err in excluding defense expert, Martin
Laffer, whose intended testimony addressed the duties of accountants and their
conformity with those standards. Under the specific facts of this case, the conduct
of Prezioso’s accountants has no bearing on whether Prezioso acted willfully.
III. Admission of Prior Testimony
“We review the district court’s decision on the Rule of Completeness for an
abuse of discretion.” United States v. Vallejos, 742 F.3d 902, 905 (9th Cir. 2014).
“[W]hether a district court’s evidentiary rulings violated a defendant’s constitutional
rights” is reviewed de novo. United States v. Waters, 627 F.3d 345, 352 (9th Cir.
2010).
The Government moved to introduce parts of Prezioso’s cross-examination
from the first trial in its case-in-chief at the second trial. Prezioso argued that the
selections were misleading and objected on the basis of Federal Rule of Evidence
106, the Fifth Amendment, and due process. The District Court overruled the
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objections.
The District Court did not err in finding that Rule 106 did not apply. Notably,
the Government read into the record those portions of Prezioso’s prior testimony
from the parallel civil suit that set forth his complete defense, thereby making any
possible error harmless. The court also did not err in excluding Prezioso’s prior
exculpatory statements and such did not ipso facto equate to a contravention of his
Fifth Amendment rights against self-incrimination. Neither was there evidence of a
due process violation.
IV. Sentencing
This Circuit’s precedent permits the use of acquitted and uncharged conduct
in sentencing. See, e.g., United States v. Barragan, 871 F.3d 689, 716 (9th Cir.
2017). Any three-judge panel of this Court is bound by that precedent to reject
Prezioso’s objection.
AFFIRMED.
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