United States v. Retherford

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES CO URT O F APPEALS
November 2, 2006
TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
U N ITED STA TES O F A M ER ICA,
Plaintiff-Appellee,
No. 06-1008
v. (D. Colorado)
(D.C. No. 02-CR-541-W DM )
LESTER R. R ETH ER FO RD ,
Defendant-Appellant.
OR D ER AND JUDGM ENT *
Before H E N RY, BR ISC OE, and O’BRIEN, Circuit Judges. **
Lester R. Retherford was convicted after a jury trial of (1) conspiring to
defraud the United States by impairing and impeding the functions of the Internal
Revenue Service, in violation of 18 U.S.C. § 371, and (2) causing the preparation
and presentation of false tax returns, in violation of 26 U.S.C. § 7206(2).
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10 TH C IR . R. 36.3.
**
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
Treating the United States Sentencing Guidelines as advisory, the court imposed
concurrent sentences of imprisonment of forty-eight months respectively.
In this appeal, M r. Retherford challenges the district court’s application of
the G uidelines in determining that the amount of tax loss under USSG § 2T4.1(D )
was $3,132,259. He contends that because it made no special findings as to the
scope of the conspiracy, the jury may have convicted him of participating in a
much narrow er conspiracy— one involving only a single tax return and a tax loss
of only $28,000. W e are not persuaded by M r. Retherford’s argument and
therefore affirm his sentence.
I. BACKGROUND
From October 1992 until September 2001, M r. Retherford and his
codefendant Paul D. Harris w orked together to assist federal taxpayers in
concealing their income in offshore bank accounts by either not reporting the
income on federal tax returns or misrepresenting the funds in the offshore
accounts as deductible business expenses. The defendants used several business
entities to carry out this plan, including Tow er Executive Resources and First
America Research.
The record indicates that M r. Retherford and M r. Harris were advised that
their plan was illegal. In 1994, an attorney wrote a letter to M r. Harris informing
him that the plan violated provisions of the Internal Revenue Code that carried
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criminal penalties. In 1997, a second attorney reviewed the tax returns of some of
the taxpayers who had participated in the defendants’ plan, and he told the
defendants that the plan was “a sham.” Rec. vol. XXIX, at 8 ¶ 33 (presentence
report).
In a superceding indictment filed in August 2004, a federal grand jury
charged M r. R etherford, M r. H arris, and a third defendant— Robert N.
Bedford— with: (1) one count of conspiring to defraud the United States by
assisting in the preparation of false and fraudulent tax returns, in violation of 18
U.S.C. § 371; (2) twenty-six counts of aiding and assisting in the preparation of
particular false and fraudulent tax returns for 1997-2000, in violation of 26 U.S.C.
§ 7206(2); (3) one count of filing a false report with the Secretary of the
Treasury, in violation of 31 U.S.C. §§ 5314 and 5322; and (4) one count of failing
to provide financial information to the Internal Revenue Service, in violation of
31 U.S.C. § 5322.
A jury convicted M r. Retherford of the § 371 conspiracy count and one of
the § 7206(2) counts for assisting in the preparation of a false or fraudulent tax
return— one that involved the tax return of John M ikutowicz for 1998 (as charged
in count 23 of the superceding indictment). The jury acquitted M r. Retherford on
eleven of the § 7206(2) counts. As to the remaining counts, the jury was unable
to reach a verdict.
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The presentence report noted that Guidelines are now advisory. See Rec.
vol. XXIX, at 9 ¶ 38 (stating that the court, “while not bound to apply the
Guidelines, must consult the advisory guidelines and take them into account with
the sentencing factors identified at 18 U.S.C. § 3553(a) when determining the
sentence”). Applying the 2000 addition of the Guidelines, the report calculated
the base offense level to be twenty-one. That level was based upon a tax loss of
$3,132,259. See id. at 8 & ¶ 34 (explaining that, (a) pursuant to USSG §
2T1.1(c)(1)(A), “[if] the offense involved filing a tax return in w hich gross
income w as underreported, the tax loss shall be treated as equal to 28% of the
unreported gross income[,]” (b) the amount of underreported gross income in this
case w as $11,186,641, and (c) 28% of $11,186,641 is $3,132,259).
The presentence report then recommended the following upward
adjustm ents in the offense level: (a) a two-level increase pursuant to USSG §
2T.1.4(b)(1)(A) because M r. Retherford committed the offenses as part of a
scheme from which he derived a substantial portion of his income; (2) a two-level
increase pursuant to USSG § 2T1.4(b)(2) because the offenses involved
sophisticated concealment; (3) a four-level increase pursuant to USSG § 3B1.1(a)
because the M r. Retherford was an organizer or leader of a criminal activity that
involved five or more participants or was otherwise extensive; (4) a two-level
increase pursuant to USSG § 3C1.1 for obstruction of justice.
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At the sentencing hearing, the district court rejected M r. Retherford’s
argument that the base offense level should be calculated solely by determining
the tax loss arising out of §7206(2) count involving the 1998 tax return of M r.
M ikutowicz:
The issue here is that argued by the defendant that
the only specific conviction for [M r. Retherford] was
Count 23, and that should be the lim itation of the amount
which would place, in essence, the defendant at offense
level 12 rather than 21. I conclude that the Government is
correct in its argument. I agree that I am bound, as
defense also acknowledges, in this circuit to consider the
issue and apply my observation of the evidence.
I would conclude that [M r. Retherford] participated
in the Tow er scheme, which, in essence, was to take
income otherwise attributable to a taxpayer, create false
expenses, m ove the income to an offshore account, and
counsel that it could be, once moved, used to really pay
personal expenses.
It’s as simple as that in m y view . And I w ould
certainly conclude, as a matter of preponderance, which is
the standard as I understand it, that this defendant should
be considered to be responsible for all the relevant
conduct. A nd the law , as it stands, does not require that a
jury make this determination but that I make it.
And having been the trial judge, I certainly so
conclude clearly without any question in my mind or doubt
that this defendant was involved in creating false,
untruthful matters that were simply fiction and w ith the
intent that that would be used to keep the taxpayer from
paying what was otherwise due on account of income
attributable to the taxpayer.
That was the scheme, and it was one that, stripped
of everything else, was simply creating various entities
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and fictional expenses to purportedly keep income from
being income. That, therefore, means that I’m dealing
with the recommended offense level 21.
Rec. vol. XXVIII, at 53-54.
As to the other upward adjustments, the court noted:
Under the best case scenario, if I don’t include obstruction
of justice and deriving substantial portion of the income
and lessen the adjustment for role [in the offense] to 3, the
guidelines would have a 26 offense level and provide for
a sentence of 63 to 78 months. W ith obstruction of justice
it would be at 28, and a 78 to 97 [month] range.
Id. at 56. Stating that it was aware of M r. Retherford’s health problems, the
court sentenced M r. Retherford to a term of incarceration substantially below the
minimum of the lesser of these two Guideline ranges— forty-eight months.
II. D ISC USSIO N
M r. Retherford now argues that the district court erred in defining the scope
of the conspiracy. According to M r. Retherford, “the jury may have convicted
[him] of only conspiring with M r. Harris to help M r. M ikutowicz falsify his 1998
1040. In that case, the tax loss would have been only $28,000 [and] [t]he
resulting base offense level would have been 12 pursuant to U.S.S.G. §
2T4.1(D ).” Aplt’s Br. at 8.
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M r. Retherford’s argument is based on a misunderstanding of the role of
judge and jury in sentencing. Under the post-Booker sentencing scheme, “so long
as the district court applies the Guidelines in an advisory, rather than a
mandatory, fashion, it may rely on facts found by a judge.” United States v.
Bustamante, 454 F.3d 1200, 1202 (10th Cir. 2006); see also United States v.
Ferguson, 456 F.3d 660, 664 (6th Cir. 2006) (stating that “this court and others
have repeatedly held since Booker that district judges can find the facts necessary
to calculate the appropriate Guidelines range using the same
preponderance-of-the-evidence standard that governed prior to Booker”); United
States v. Bah, 439 F.3d 423, 426 n.1 (8th Cir. 2006) (“[J]udicial fact-finding
using a preponderance of the evidence standard is permitted provided that the
guidelines are applied in an advisory manner.”).
Here, the district court found by a preponderance of the evidence that the
presentence report’s calculation of the amount of the tax loss was correct and
that, as a result, the base offense level was twenty-one. The district court’s
finding is supported by § 1B1.3 of the Guidelines, which “recognizes that a
defendant can be held accountable for ‘relevant conduct’ for which he has not
been convicted.” U nited States v. Lindsay, 184 F.3d 1138, 1141 n.3 (10th Cir.
1999). In light of the court’s findings, the alleged ambiguity regarding the jury’s
conclusion as to the scope of the conspiracy is not determinative. Because the
court’s finding of the amount of tax loss is not clearly erroneous, see United
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States v. Rodriguez-Delma, 456 F.3d 1246 (10th Cir. 2006), we defer to its
decision.
III. CONCLUSION
Accordingly, we AFFIRM M r. Retherford’s sentence.
Entered for the Court,
Robert H. Henry
Circuit Judge
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