United States v. Smith

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-4825
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
LEANDRA SMITH, a/k/a Leanra Smith, a/k/a Rhonda L. Barber,
Defendant – Appellant.
No. 09-4838
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
ANEWA TIARI-EL, a/k/a Annie B. Williams,
Defendant – Appellant.
No. 09-4893
UNITED STATES OF AMERICA,
Plaintiff – Appellant,
v.
LEANDRA SMITH, a/k/a Leanra Smith, a/k/a Rhonda L. Barber;
ANEWA TIARI-EL, a/k/a Annie B. Williams,
Defendants – Appellees.
Appeals from the United States District Court for the Western
District of North Carolina, at Charlotte. Graham C. Mullen,
Senior District Judge. (3:03-cr-00219-GCM-DCK-2; 3:03-cr-00219-
GCM-DCK-1)
Submitted: September 17, 2010 Decided: October 21, 2010
Before GREGORY, SHEDD, and DAVIS, Circuit Judges.
Affirmed in part; vacated and remanded in part by unpublished
per curiam opinion.
James S. Weidner, Jr., JAMES S. WEIDNER, JR., Charlotte, North
Carolina, for Leandra Smith; Claire J. Rauscher, Ross H.
Richardson, FEDERAL DEFENDERS OF WESTERN NORTH CAROLINA, INC.,
Charlotte, North Carolina, for Anewa Tiari-El. Edward R. Ryan,
United States Attorney, Charlotte, North Carolina; John A.
DiCicco, Acting Assistant Attorney General, Alan Hechtkopf,
Karen M. Quesnel, Katie Bagley, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for the United States.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Anewa Tiari-El and Leandra Smith were convicted, after
a jury trial, of conspiracy to file false claims for tax
refunds, filing false claims for tax refunds, and aiding and
abetting others in violation of 18 U.S.C. §§ 286, 287, and 2
(2006). The district court sentenced Tiari-El to 60 months
imprisonment and Smith to 42 months imprisonment and ordered
both Defendants to pay restitution in the amount of $244,287.86
to clients who paid them to file the false refund claims.
Tiari-El and Smith appeal, contending that the district court
erred by allowing the introduction of evidence of a non-
testifying codefendant’s guilty plea and by denying their motion
for a new trial based on the Government’s failure to turn over
exculpatory evidence. The Government cross-appeals, arguing
that the district court erred by failing to order restitution to
the Internal Revenue Service. We affirm Tiari-El’s and Smith’s
convictions, but vacate the sentences and remand with
instructions for the district court to imposed restitution in
favor of the Internal Revenue Service.
The Government’s evidence showed that the Defendants
engaged in a scheme conducted through Tiari-El and Associates
(“TEA”), a law firm that provided credit counseling services,
loan approval and education on home ownership. They offered to
recoup from the Internal Revenue Service interest accrued on tax
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payments made by individuals. TEA falsely informed its clients
that the IRS maintains a master file on each taxpayer. The tax
payments made into this master file accrue interest, and
according to TEA, the taxpayer can obtain the interest earned on
this account by filing amended returns.
TEA directed their clients to provide their completed
prior year tax returns, sign the cover page of a Form 1040X, and
sign a limited power of attorney. TEA would then, unbeknownst
to the taxpayer, complete a Form 2439 “Notice to Shareholder of
Undistributed Long-Term Capital Gains,” and submit it to the
IRS, along with the amended return, claiming a refund in amounts
ranging from $33,000 to $89,000. The Government presented
evidence that the individuals named in the amended returns filed
by TEA did not have the undistributed gains to support the
requested refund. TEA provided that the refund checks from the
IRS were to be sent directly to the TEA offices. TEA charged
clients $150 to $305 for each tax year in which they filed an
amended return claiming this fictitious refund. TEA clients
also agreed to pay TEA fifteen to twenty-five percent of the
refunds they received.
Tiari-El’s daughter, Tajah Yesher-El, testified on
behalf of the Defendants. During the cross-examination of
Tajah, the Government sought to elicit testimony that her
husband, Malik Yesher-El, was charged with the same offenses as
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Smith and Tiari-El, and that he pled guilty. The district court
initially prohibited this questioning, but upon request by the
Government, reconsidered the ruling, and over the Defendants’
objections, allowed the Government to question Tajah about the
guilty plea. The Defendants assert that this ruling violated
their rights under the Confrontation Clause.
“[E]vidence of a non-testifying co-defendant’s guilty
plea should not be put before the jury.” United States v.
Blevins, 960 F.2d 1252, 1260 (4th Cir. 1992) (citations
omitted). The reasons for this restriction are that the
codefendant is not present to be cross-examined about his
motives for pleading guilty and the concern that the jury will
consider the codefendant’s guilty plea as evidence of the
defendant’s guilt. Id. Admission of such evidence is reviewed
de novo, and a mistrial must be declared unless the court is
satisfied beyond a reasonable doubt that the error was harmless.
Id. at 1262.
“If for whatever reason the jury does learn that co-
defendants have pled guilty, the court upon request should issue
a limiting instruction to jurors.” Blevins, 960 F.2d at 1260(emphasis added). However, the Defendants did not request a
limiting instruction and failed to object to the absence of one
in the jury charge. The district court was not required, sua
sponte, to give a limiting instruction.
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Moreover, our review of the record leads to the
conclusion that the admission of this evidence was harmless when
“measured against the other evidence presented at trial.” Id.at 1263 (citing Arizona v. Fulminante, 499 U.S. 279 (1991)).
The Defendants asserted that they merely gathered the relevant
taxpayer information and sent it to Jo El Bey in Atlanta,
Georgia, who added the Forms 2439 and prepared the amended
returns and submitted them to the IRS. They asserted that they
did not know the actual basis upon which the refunds were
requested and did not know that the refund claims were
fraudulent. However, contrary to this stance, the Government
presented testimony that Smith and Tiari-El personally informed
clients of the ability to receive from the IRS the interest
accumulated in their “master file” with the IRS. Several
witnesses testified that the signatures on the filed amended tax
returns, the Forms 2439, and the powers of attorney were forged.
The clients were not aware of the actual basis for the refunds
as stated in the amended returns. Additionally, upon executing
a search warrant of TEA’s offices, officials discovered hundreds
of partially completed Forms 2439 and numerous computer files
containing Forms 2439 which were completed and able to be
attached to the refund claims.
Additionally, in March 2003, the Defendants were
specifically told by an IRS criminal investigator that the tax
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refund scheme was fraudulent. Two separate state court
injunctions were imposed prohibiting Defendants from continuing
to prepare amended tax returns on behalf of clients because of
the fraudulent nature of the claims, and more than 400 letters
were received by TEA clients rejecting the refund claims as
false. Despite these events, Tiari-El and Smith continued to
file false claims for tax refunds on the same basis.
When faced with this overwhelming evidence of Smith
and Tiari-El’s knowledge of the fraudulent nature of the refund
requests and their continued conduct of the scheme after being
informed that the claims were false, we conclude that the
isolated reference to Malik Yesher-El’s guilty plea during the
five-day jury trial was harmless beyond a reasonable doubt. See
Blevins, 960 F.2d at 1262.
Next, the Defendants contend that the Government
failed to disclose exculpatory evidence in violation of Brady v.
Maryland, 373 U.S. 83 (1963). They contend that, at the time of
their trial, the Government was preparing to arrest Jo El Bey in
Georgia after a three-year investigation into his conducting the
same type of tax refund scheme as that with which the Defendants
were charged. They assert that the Government failed to
disclose this information, and in fact, claimed that Jo El Bey
did not exist and “crippl[ed] Appellants’ defense.”
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The Government points out that the person who was
being investigated in Georgia was Joseph Jordan. Although the
Defendants assert that Jordan and Jo El Bey are the same person,
there was no evidence of this. Notably, during the
investigation of the Defendants, several cancelled checks
written to Joseph Jordan were discovered, but none made payable
to Jo El Bey.
Additionally, the investigation of Jordan was
conducted by the United States Attorney’s Office for Middle
District of Georgia, whereas the Defendants were prosecuted in
the Western District of North Carolina. There is no requirement
that prosecutors in one district be aware of and disclose
information in the possession of other governmental offices.
See United States v. Pellullo, 399 F.3d 197, 216 (3d Cir. 2005);
Kyles v. Whitley, 514 U.S. 419, 438 (1995); see also United
States v. Mero, 866 F.2d 1304, 1309 (11th Cir. 1989) (holding
that prosecutor in Florida not in possession of and therefore
not obligated to disclose information known to prosecutors in
Georgia and Pennsylvania). Because the prosecutor in the
Defendants’ case is not imputed with knowledge of the
investigation in Georgia, no Brady violation can be shown by the
Government not disclosing to the Defendants details of the
investigation of Joseph Jordan.
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The final issue in these appeals is the Government’s
contention that the district court’s failure to order
restitution in favor of the Internal Revenue Service was error.
Although it is clear from our review of the record that the
district court intended that restitution be made to the IRS in
the amount of $1,394,474.67 — the amount paid on the false
claims submitted by clients of TEA — the court failed to order
restitution in the Judgment and Commitment Orders. Rather, the
court ordered restitution in the amount of $244,287.86 for the
individual victims who were clients of Tiari-El and Smith.
Based on its concern over the IRS recouping the money paid to
taxpayers under this fraudulent scheme, the court decided to
wait for an accounting of monies recovered before imposing the
restitution award. While this is a legitimate concern, the
failure to award restitution to the IRS, a victim of the
Defendants’ fraudulent scheme, violates the Mandatory Victims
Restitution Act of 1996. 18 U.S.C.A. § 3663A(a)(1) (West 2000 &
Supp. 2010); United States v. Roper, 462 F.3d 336, 338 (4th Cir.
2006); see also United States v. Ekanem, 383 F.3d 40, 42-44 (2d
Cir. 2004) (holding that government may be an eligible victim).
Further, the Act provides, “In no case shall the fact
that a victim has received or is entitled to receive
compensation with respect to a loss from insurance or any other
source be considered in determining the amount of restitution.”
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18 U.S.C. § 3664(f)(1)(B) (2006) (emphasis added). Rather, the
Act provides that “[a]ny amount paid to a victim under an order
of restitution shall be reduced by any amount later recovered as
compensatory damages for the same loss by the victim” in any
Federal or State civil proceeding.” See 18 U.S.C. § 3664(j)(2)
(2006). Thus, despite the fact that the IRS may recoup some of
its losses from the taxpayers who received refunds under TEA’s
scheme, the district court erred by failing to order restitution
to the IRS in the full amount of its losses, with the amount to
later be reduced by amounts recouped from taxpayers. See United
States v. Ruff, 420 F.3d 772, 775 (8th Cir. 2005) (discussing
mandatory nature of restitution award and the bar against double
recovery); United States v. Scott, 270 F.3d 30, 52 (1st Cir.
2001) (interpreting restitution order entered in fraudulent tax
return case as allowing government to recover the total amount
of restitution from any of several individual defendants, but
restricting total recovery to amount of loss).
Accordingly, while we affirm Tiari-El’s and Smith’s
convictions, we vacate the judgments in part and remand the
cases to the district court for the limited purpose of ordering
restitution in favor of the IRS. We dispense with oral argument
because the facts and legal contentions are adequately presented
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in the materials before the court and argument would not aid the
decisional process.
AFFIRMED IN PART;
VACATED AND REMANDED IN PART
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