United States v. Abuhawwas

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-4540
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
ISMAIL SALEEM ABUHAWWAS,
Defendant - Appellant.
Appeal from the United States District Court for the Western
District of Virginia, at Roanoke. Samuel G. Wilson, District
Judge. (7:05-cr-00056-sgw)
Submitted: December 4, 2006 Decided: February 1, 2007
Before NIEMEYER, GREGORY, and DUNCAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
John S. Edwards, LAW OFFICES OF JOHN S. EDWARDS, Roanoke, Virginia,
for Appellant. John L. Brownlee, United States Attorney, C.
Patrick Hogeboom, III, Roanoke, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Ismail Saleem Abuhawwas appeals his convictions and
sentence for eight counts of aiding or assisting the preparation of
a materially false tax return, in violation of 26 U.S.C. § 7206(2)
(2000), and one count of willfully making a material false
statement to a federal government agent, in violation of 18 U.S.C.
§ 1001 (2000). Abuhawwas raises three issues on appeal. He argues
that: (1) the evidence was insufficient to establish that he
willfully filed false employer quarterly tax forms; (2) there was
insufficient evidence to establish that he willfully made a
materially false statement to an agent of the Federal Bureau of
Investigation; and (3) the district court miscalculated the tax
loss for purposes of determining the Sentencing Guideline range.
Finding no error, we affirm.
We review the district court’s denial of a motion for
judgment of acquittal de novo. United States v. United Med. &
Surgical Supply Corp., 989 F.2d 1390, 1401 (4th Cir. 1993). The
standard of review for a denial of a motion for judgment of
acquittal is “whether there is substantial evidence (direct or
circumstantial) which, when taken in the light most favorable to
the prosecution, would warrant a jury finding that the defendant
was guilty beyond a reasonable doubt.” United States v.
MacCloskey, 682 F.2d 468, 473 (4th Cir. 1982). In evaluating the
sufficiency of the evidence, we do not weigh the evidence or review
- 2 -
the credibility of witnesses. United States v. Wilson, 118 F.3d
228, 234 (4th Cir. 1997). Where the evidence supports differing
reasonable interpretations, the jury decides which interpretation
to believe. Id. Furthermore, “[t]he Supreme Court has admonished
that we not examine evidence in a piecemeal fashion, but consider
it in cumulative context.” United States v. Burgos, 94 F.3d 849,
863 (4th Cir. 1996) (en banc) (citations omitted).
To obtain a conviction under § 7206(2), the Government
must prove that: (1) the defendant aided, assisted, or otherwise
caused the preparation and presentation of a return; (2) the return
was fraudulent or false as to a material matter; and (3) the act of
the defendant was willful. United States v. Aramony, 88 F.3d 1369,
1382 (4th Cir. 1996) (internal citations and quotations omitted).
Willfulness is defined as the voluntary and intentional violation
of a known legal duty. Cheek v. United States, 498 U.S. 192, 201
(1991).
The evidence in this case demonstrated that Abuhawwas
hired a number of employees who did not have social security
numbers and who were not paid through the normal course of
business, but rather were placed on “Ismail’s payroll.” While
Abuhawwas contends that the reason these employees were not
reported on the quarterly 941 tax returns is simply that his
payroll service could not process them without social security
numbers, this fact does not absolve him of responsibility to report
- 3 -
these payments to the Internal Revenue Service. The evidence thus
established that Abuhawwas was directly involved in hiring a subset
of employees whose income was not reported to the IRS. Although
Abuhawwas claims that he was a “hands-off” owner who left tax
matters to his accountant, his repeated failure to provide his
accountant with necessary documentation provides ample evidence of
“willfulness.”
Abuhawwas also challenges the sufficiency of the evidence
supporting his conviction for willfully making a material false
statement to a federal government agent. To prove a violation of
18 U.S.C. § 1001, the Government must establish that: (1) the
defendant made a false statement to a governmental agency or
concealed a fact from it, (2) the defendant acted “knowingly and
willfully,” and (3) the false statement or concealed fact was
material to a matter within the jurisdiction of the agency. United
States v. Arch Trading Co., 987 F.2d 1087, 1095 (4th Cir. 1993)
(internal citations omitted). A material fact about a matter
within the jurisdiction of an agency is one that has a “natural
tendency to influence agency action or is capable of influencing
agency action.” Id.According to the testimony of FBI Agent Buckley,
Abuhawwas made the statements at issue in the course of an
investigation by the FBI and the Immigration and Naturalization
Service into possible visa violations by one of Abuhawwas’
- 4 -
employees, Mohammed Abudan. Abuhawwas told Buckley that Abudan was
a contract employee who received a 1099 tax form at the end of the
year and that appropriate withholdings were made from his pay. The
Government established at trial that this statement was false
because Abudan did not receive a 1099 tax form nor were any
withholdings made from his pay.
Although Abuhawwas claims to have been confused about
these tax-related matters when he spoke to Buckley, when viewing
the evidence in the light most favorable to the Government, the
jury was entitled to conclude that Abuhawwas’ statements that
Abudan and other contract employees were being properly reported to
the IRS were knowingly and willfully false. Further, we conclude
that these statements were material to the FBI’s legitimate law
enforcement activities.
Finally, Abuhawwas contends that the district court
miscalculated the tax loss for purposes of determining the
Sentencing Guideline range. When reviewing the district court’s
application of the Sentencing Guidelines, this court reviews
findings of fact for clear error and questions of law de novo.
United States v. Green, 436 F.3d 449, 456 (4th Cir.), cert. denied,
126 S. Ct. 2309 (2006). Determinations as to sentencing factors
must be supported by a preponderance of the evidence. United
States v. Morris, 429 F.3d 65, 72 (4th Cir. 2005). According to
Application Note 1 to U.S. Sentencing Guidelines Manual § 2T1.1
- 5 -
(2005),* “when indirect methods of proof are used, the amount of
the tax loss may be uncertain.” In these cases, “the guidelines
contemplate that the court will simply make a reasonable estimate
based on the available facts.” Id.; see also United States v.
Bryant, 128 F.3d 74, 75-76 (2d Cir. 1997) (district court may
estimate amount of tax loss in § 7206(2) case).
At trial, IRS Special Agent Vance testified at length
about the methodology used to determine the amount of tax loss.
According to the “percentage method” routinely employed by the IRS
to compute what should have been withheld by an employer for
federal income tax, 27.5% is applied to the total amount of
unreported wages paid to employees. The calculation assumes the
employees are “single” with no exemptions. Abuhawwas did not
present any alternative testimony as to how this loss should be
calculated, and does not provide any support on appeal for his
proposition that tax loss calculations must include the employees’
possible dependants, deductions, or the Earned Income Tax Credit.
Therefore, we find that the district court did not err in
calculating the tax loss for purposes of determining Abuhawwas’
base offense level.
Accordingly, we affirm Abuhawwas’ conviction and
sentence. We dispense with oral argument because the facts and
*
Application Note 1 to § 2T1.1 is incorporated into
Application Note 1 to § 2T1.4, which is the guideline applicable to
Counts 1-8.
- 6 -
legal contentions are adequately presented in the materials before
the court and argument would not aid the decisional process.
AFFIRMED
- 7 -