United States v. Meredith Lawrence

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0170n.06
No. 12-6450 FILED
Mar 03, 2014
UNITED STATES COURT OF APPEALS DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
)
Plaintiff-Appellee, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE EASTERN
) DISTRICT OF KENTUCKY
MEREDITH LYNN LAWRENCE, )
)
Defendant-Appellant. )
)
BEFORE: BATCHELDER, Chief Judge, and GRIFFIN, Circuit Judges; and BELL, District Judge.*
GRIFFIN, Circuit Judge.
Defendant Meredith Lawrence appeals his conviction and sentence for willfully filing false
tax returns for 2004, 2005, and 2006 in violation of 26 U.S.C. § 7206(1). The district court
sentenced Lawrence to twenty-seven months of imprisonment and ordered him to pay $128,253 in
restitution to the IRS. Lawrence raises six arguments on appeal: (1) the indictment was
constitutionally deficient because it lacked specificity and was duplicitous; (2) he was subjected to
a prejudicial variance; (3) the indictment was constructively amended; (4) the district court erred
in denying his motion for judgment of acquittal; (5) the district court erred in ordering restitution;
and (6) trial counsel was ineffective. For the reasons that follow, the first five arguments are
meritless and the sixth is premature. Accordingly, we affirm.
*
The Honorable Robert Holmes Bell, United States District Judge for the Western District of
Michigan, sitting by designation.
No. 12-6450
United States v. Lawrence
I.
Defendant Meredith Lawrence was a personal injury lawyer who owned Racers, a strip club,
held a number of residential and commercial office properties, which he leased, and lived on over
3,000 acres of land, which he farmed. He earned income from these businesses and operated them
with the assistance of several employees, including bookkeepers. In 2003, Lawrence hired CPA
Robert Ryan to prepare tax returns for all of the entities in which Lawrence was involved. Ryan also
prepared and electronically filed Lawrence’s personal tax returns for 2004, 2005, and 2006. Ryan
included Lawrence’s unique PIN (Personal Identification Number) on each return.
In August of 2011, a grand jury indicted Lawrence for filing three false tax returns in
violation of 26 U.S.C. § 7206(1). The three-count indictment alleged that during the 2004 (count
one), 2005 (count two), and 2006 (count three) tax years, Lawrence willfully signed his personal
income tax returns, under penalties of perjury, when he knew and believed that his adjusted gross
income (AGI) was greater than what he reported on the Form 1040s for these years.
During a two-week jury trial, the government introduced proof that Lawrence failed to report
income from five different sources: (1) “house fees” from the exotic dancers who worked at
Racers;1 (2) withdrawals from his client trust accounts; (3) rental income from attorneys who leased
office space from him; (4) reimbursements from those same attorneys for office expenses; and (5)
rental income from residential tenants.
1
The exotic dancers at Racers had to pay several different fees to the “house.” These included
a daily right-to-work fee, a percentage of their earnings from their dances, and a parking fee.
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At the close of the government’s case, Lawrence moved for a judgment of acquittal on counts
two and three based on the government’s failure to enter Forms 8879 into evidence for the 2005 and
2006 tax years. Lawrence argued that without these forms, there was no proof that he actually
signed those returns (and thus not subject to their jurat) because a PIN functions as a signature on
e-filed returns only if the taxpayer completes a Form 8879 for the year in question. The district
court denied the motion. Lawrence raised the issue again in his renewed motion for a judgment of
acquittal at the close of his defense, which the court denied.
The jury convicted Lawrence on all three counts. The district court sentenced him to twenty-
seven months on each count, to be served concurrently, and one year of supervised release. The
court also ordered Lawrence to pay $128,253 in restitution to the IRS as a special condition of his
supervised release. Lawrence timely appealed.
II.
Lawrence begins by arguing that the indictment is constitutionally deficient for two reasons.
First, he contends that the indictment is insufficiently specific because, although it charges that he
made willfully false income statements in his personal returns, it does not indicate with sufficient
particularity which specific income statements in those returns were false. Second, Lawrence argues
that the indictment is duplicitous. He claims that five separate offenses are “effectively” charged
in each one of the indictment’s three counts because the government presented five sources of
allegedly unreported income at trial, each of which amount to a separate violation of 26 U.S.C. §
7206(1).
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The government responds that Lawrence has waived his right to challenge the technical
specificity of the indictment by failing to raise this claim before trial. And even if he had preserved
the issue, the indictment is facially sufficient. The government also responds that, to the extent that
Lawrence’s duplicity challenge alleges a substantive rights violation, which he may raise for the first
time on appeal, the indictment is not duplicitous because the source of unreported income is not an
essential element of a § 7206(1) offense.
If the issue has been preserved, we review the sufficiency of an indictment de novo. United
States v. DeZarn, 157 F.3d 1042, 1046 (6th Cir. 1998). An indictment is sufficient if it fully,
directly, and expressly sets forth all the elements necessary to constitute the offense intended to be
punished. United States v. Douglas, 398 F.3d 407, 411 (6th Cir. 2005). “In particular, the
indictment must: (1) set out all of the elements of the charged offense and must give notice to the
defendant of the charges he faces, and (2) be sufficiently specific to enable the defendant to plead
double jeopardy in a subsequent proceeding, if charged with the same crime based on the same
facts.” United States v. McAuliffe, 490 F.3d 526, 531 (6th Cir. 2007) (internal brackets, citation, and
quotation marks omitted). “An indictment will usually be sufficient if it states the offense using the
words of the statute itself, as long as the statute fully and unambiguously states all the elements of
the offense.” United States v. Superior Growers Supply, Inc., 982 F.2d 173, 176 (6th Cir. 1992).
The recitation of statutory language “must be accompanied with such a statement of the facts and
circumstances as will inform the accused of the specific offense, coming under the general
description with which he is charged.” Id. (internal quotation marks and citation omitted).
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A defendant properly preserves a challenge to the sufficiency of an indictment by raising
objections before trial. See Fed. R. Crim. P. 12(b)(3)(B) (stating that “a motion alleging a defect in
the indictment or information” “must be raised before trial”). Failure to do so constitutes waiver
under Rule 12(e) of the Federal Rules of Criminal Procedure unless a defendant can show good
cause to excuse the waiver. See Fed. R. Crim. P. 12(e) (“A party waives any Rule 12(b)(3) defense,
objection, or request not raised by the deadline the court sets under Rule 12(c) or by any extension
the court provides. For good cause, the court may grant relief from the waiver.”); see also United
States v. Kakos, 483 F.3d 441, 444 (6th Cir. 2007) (a defendant waives technical errors to an
indictment by his failure to object before trial). However, Rule 12(b)(3)(B) provides an exception:
a court may consider “a claim that the indictment or information fails to invoke the court’s
jurisdiction or to state an offense” at any time while the case is pending. See also United States v.
Gatewood, 173 F.3d 983, 986 (6th Cir. 1999) (“[A] defendant who contends that the indictment fails
to establish jurisdiction or to charge an offense may raise that challenge at any time.”). “This court
‘strictly applies Rule 12(b), and has repeatedly held that failure to raise 12(b) motions in a timely
fashion precludes appellate review.’” United States v. Hackworth, 483 F. App’x 972, 979 (6th Cir.
2012) (quoting United States v. Brown, 498 F.3d 523, 528 (6th Cir. 2007)).
In this case, Lawrence has waived his right to challenge whether the indictment was
sufficiently specific. He never argued below—either before trial or after—that the indictment did
not provide sufficient details regarding the five sources of income that he allegedly under-reported.
Thus, the waiver rule in Rule 12(e) applies, and Lawrence does not identify any “good cause” to
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excuse the waiver. Rule 12(b)(3)(B)’s exception does not apply here because Lawrence’s specificity
argument contains no suggestion that the district court lacked jurisdiction or that the indictment
failed to state an offense. Further, Lawrence offers no response to the government’s waiver analysis
and openly admits in his brief that he did not preserve his sufficiency challenge. Under these
circumstances, we have no trouble concluding that Lawrence has waived his right to challenge
whether the indictment was sufficiently specific. Cf. United States v. Rodriguez-Marrero, 390 F.3d
1, 11–12 (1st Cir. 2004) (failure to challenge indictment on specificity grounds before trial
constituted waiver of right to raise such challenge on appeal); United States v. Spero, 331 F.3d 57,
61–62 (2d Cir. 2003) (same).
However, Lawrence has not waived the argument that the indictment is duplicitous. “An
indictment is duplicitous if it sets forth separate and distinct crimes in one count.” United States v.
Davis, 306 F.3d 398, 415 (6th Cir. 2002). If the issue has been preserved, we employ de novo
review to determine whether an indictment is duplicitous. United States v. Anderson, 605 F.3d 404,
411 (6th Cir. 2010). “The overall vice of duplicity is that the jury cannot in a general verdict render
its finding on each offense, making it difficult to determine whether a conviction rests on only one
of the offenses or on both.” Davis, 306 F.3d at 415 (internal quotation marks and citation omitted).
The primary concern is that a defendant may be deprived of his right to a unanimous jury verdict
in that “a jury might return a guilty verdict on the single count submitted to them without all twelve
jurors agreeing that the defendant committed either of the offenses charged within that count.”
Kakos, 483 F.3d at 443.
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In our circuit, a defendant who fails to object to a duplicitous indictment before trial waives
his challenge as to the technical error in the indictment but not to the substantive error with respect
to his right to a unanimous jury verdict for each crime. Id. at 444; United States v. Adesida, 129
F.3d 846, 849 (6th Cir.1997); see also United States v. Boyd, 640 F.3d 657, 666 (6th Cir. 2011)
(“The failure to raise the question of duplicity prior to trial and verdict waives the argument, at least
with respect to technical errors in the indictment.”). We have reasoned that “a defendant’s
objections to the indictment made after trial has begun are properly addressed not to the indictment
itself but to the harm stemming from the duplicitous indictment.” Kakos, 483 F.3d at 444.
Although a defendant does not waive a duplicity challenge by failing to raise the objection
before trial, our review is limited to plain error unless the defendant raises the duplicity issue in
objections to the jury instructions. Boyd, 640 F.3d at 666; Kakos, 483 F.3d at 445; see also United
States v. Lloyd, 462 F.3d 510, 514 (6th Cir. 2006) (“[Defendant] did not seek to dismiss the
duplicitous count of the indictment before trial or challenge the jury instructions. Consequently, this
court may overturn the conviction on count two only if there was plain error which affected
[defendant’s] substantial rights.”). The rationale here is that “the case proceeds under the
presumption that the court’s [jury] instructions . . . will clear up any ambiguity created by the
duplicitous indictment [because] [p]roper jury instructions can mitigate the risk of jury confusion
and alleviate the doubt that would otherwise exist as to whether all members of the jury had found
the defendant guilty of the same offense.” Kakos, 483 F.3d at 444 (internal quotation marks and
citations omitted).
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In this case, Lawrence did not raise a duplicity challenge before trial, nor did he raise the
issue with respect to the jury instructions. Accordingly, our review would normally be limited to
plain error. Plain error is “(1) error (2) that was obvious or clear, (3) that affected [the] defendant’s
substantial rights and (4) that affected the fairness, integrity, or public reputation of the judicial
proceedings.” United States v. Vonner, 516 F.3d 382, 386 (6th Cir. 2008) (en banc) (internal
quotation marks and citation omitted). “The plain error doctrine mandates reversal only in
exceptional circumstances and only where the error is so plain that the trial judge and prosecutor
were derelict in countenancing it.” United States v. Gardiner, 463 F.3d 445, 459 (6th Cir. 2006)
(internal quotation marks and citation omitted).
However, there is authority that “we will not apply the plain-error standard unless requested
to do so by one of the parties.” United States v. Williams, 641 F.3d 758, 763 (6th Cir. 2011); see
also United States v. Hogg, 723 F.3d 730, 737 (6th Cir. 2013). Here, the government did not request
plain error review, nor did it challenge Lawrence’s assertion that de novo review applied. In fact,
the government agrees that we “generally” review the sufficiency of an indictment de novo. And
notably, the government argued that Lawrence’s other unpreserved claims should be reviewed only
for plain error, thereby suggesting an intention not to invoke plain error review regarding the
duplicitous indictment claim. See Williams, 641 F.3d at 764 (government forfeited plain error
review of unpreserved claims by invoking plain error for some of those claims but not for others).
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United States v. Lawrence
In any event, regardless of whether the indictment is reviewed de novo or for plain error, it
is not duplicitous. Lawrence’s unorthodox duplicity argument confusingly blends with his variance
argument. He does not attack the language of the indictment and claim that more than one offense
is charged in the text of each count. Rather, he argues that because the government presented five
sources of allegedly under-reported income at trial, this proof “effectively” created or “equates to”
a duplicitous indictment because each source of under-reported income essentially becomes a
separate charge. In reviewing an indictment for duplicity, however, we consider the language of the
charging document, not whether the trial proofs “effectively” created a duplicitous indictment. See
Boyd, 640 F.3d at 665–67; Kakos, 483 F.3d at 444; Lloyd, 462 F.3d at 514. And on its face, each
count in the indictment charges only one 26 U.S.C. § 7206(1) offense, whose three essential
elements are that a defendant (1) made and subscribed a return, statement, or document containing
a written declaration that it was made under penalties of perjury, (2) when he knew it was false as
to any material matter, and (3) which he did with the specific, willful intent to violate the law.
United States v. Bishop, 412 U.S. 346, 350 (1973). Accordingly, the indictment is not duplicitous.
III.
Lawrence next argues that he was subjected to a variance on counts one and two. He
contends that while the grand jury charged him with falsely stating his AGI in those counts, at trial,
the government introduced evidence of five separate sources of allegedly under-reported income,
each of which could have been separately charged. Thus, a variance occurred because the
government presented evidence of five offenses at trial but the grand jury charged only one in the
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indictment. This led to a substantial likelihood that Lawrence was convicted of an offense other than
that charged by the grand jury. The government responds that the trial evidence did not differ
materially from the facts alleged in the indictment, much less create a substantial likelihood that he
may have been convicted of an offense other than that charged by the grand jury.
This court generally reviews the record de novo to determine whether a variance has
occurred. United States v. Kuehne, 547 F.3d 667, 682 (6th Cir. 2008). However, where the issue
is raised for the first time on appeal—as is the case here—we are limited to plain-error review. Id.;
see also Vonner, 516 F.3d at 386; Gardiner, 463 F.3d at 459. A variance is a violation of a criminal
defendant’s Sixth Amendment right “‘to be informed of the nature and cause of the accusation.’”
United States v. Nixon, 694 F.3d 623, 637 (6th Cir. 2012) (quoting U.S. Const. amend. VI.). “[It]
occurs when ‘the charging terms of the indictment are unchanged, but the evidence at trial proves
facts materially different from those alleged in the indictment.’” United States v. Beals, 698 F.3d
248, 258 (6th Cir. 2012) (quoting United States v. Swafford, 512 F.3d 833, 841 (6th Cir. 2008)). A
variance between the allegations in the indictment and trial proofs is not reversible error unless “the
defendant shows prejudice to his ability to defend himself at trial, to the general fairness of the trial,
or to the indictment’s sufficiency to bar subsequent prosecutions.” United States v. Beasley, 583
F.3d 384, 392 (6th Cir. 2009) (internal quotation marks and citation omitted). To obtain a reversal
of a conviction based on a variance, the defendant carries the burden of proving both that a variance
occurred and that it was prejudicial. United States v. Hynes, 467 F.3d 951, 962 (6th Cir. 2006). In
this case, Lawrence has not carried his burden of satisfying either condition.
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Counts one and two charged Lawrence with willfully filing false tax returns for 2004 and
2005 in violation of 26 U.S.C. § 7206(1). Section 7206(1) provides that any person who “[w]illfully
makes and subscribes any return, statement, or other document, which contains or is verified by a
written declaration that it is made under the penalties of perjury, and which he does not believe to
be true and correct as to every material matter” shall be guilty of a felony. 26 U.S.C. § 7206(1).
The three essential elements of a § 7206(1) offense are that the defendant (1) made and subscribed
a return, statement, or document containing a written declaration that it was made under penalties
of perjury, (2) when he knew it was false as to any material matter, and (3) which he did with the
specific, willful intent to violate the law. Bishop, 412 U.S. at 350.
In accord with § 7206(1) and the Supreme Court’s construction of its essential elements,
count one charged:
On or about April 13, 2005, in Gallatin County, in the Eastern District of Kentucky,
MEREDITH L. LAWRENCE, a resident of Sparta, Kentucky, did willfully make
and subscribe an IRS Form 1040, which was verified by a written declaration that it
was made under the penalties of perjury and which he did not believe to be true and
correct as to every material matter. That Form 1040, which was prepared and signed
in the Eastern District of Kentucky and was filed with the Internal Revenue Service,
stated that Lawrence’s adjusted gross income was $1,011,380, whereas, as he then
and there knew and believed his adjusted gross income was greater than $1,011,380,
all in violation of 26 U.S.C. § 7206(1).
Count two mirrored count one but for a change in the date and AGI amount. The trial proofs did not
materially differ from these charges.
The government presented evidence of five different sources of income that Lawrence failed
to include in his AGI from: (1) Racers’ house fees; (2) his law firm’s IOLTA account; (3) rent for
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attorneys’ offices; (4) rent from residential renters; and (5) income from farming. Counts one and
two alleged that Lawrence knowingly understated AGI on his 2004 and 2005 returns, and the
evidence regarding the types of income that were under-reported directly proved those allegations.
See United States v. Tandon, 111 F.3d 482, 487 (6th Cir. 1997) (no variance where government used
proof of an improper deduction to establish how defendant understated total income on tax returns
as alleged in indictment). Evidence on how Lawrence under-reported his AGI is entirely consistent
with the allegation that he knowingly under-reported his AGI.
Contrary to Lawrence’s repeated insistence otherwise, evidence of the five sources of under-
reported income is not proof of five separate uncharged offenses. These are simply the means that
Lawrence used to commit the crime or the “brute facts” that the jury considered in deciding whether
the government had proved all essential elements of a § 7206(1) offense beyond a reasonable doubt.
Richardson v. United States, 526 U.S. 813, 817 (1999). This conclusion is buttressed by the fact that
“the source of unreported income is not an essential element of an offense under 26 U.S.C. §
7206(1).” United States v. LaSpina, 299 F.3d 165, 179 (2d Cir. 2002).
Further, even if we assume that a variance had occurred, Lawrence fails to establish that it
caused him any prejudice. He had a comprehensive defense to each source of allegedly understated
income. Lawrence testified that the “house fees” received from Racers represented the repayment
of loans he had made to the business and, therefore, were not income. As for the other sources, he
testified that he relied in good faith on his accountant and bookkeepers to prepare accurate tax
returns for these tax years. And Lawrence’s expert witness retained for trial, CPA Gary Stephens,
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exhaustively disputed the “specific items” identified by the government as unreported income for
the tax years in question. In light of the trial record, Lawrence cannot demonstrate a prejudice to
his ability to defend or that the trial was generally unfair. Beasley, 583 F.3d at 392. Nor can he
object on double jeopardy grounds because the record is sufficiently detailed to protect him against
a subsequent prosecution for the same offense. Id. Accordingly, Lawrence’s variance argument is
meritless.
IV.
Next, Lawrence argues count three was constructively amended. He maintains that count
three charged him with falsely reporting his taxable income but the applicable jury instruction
erroneously stated that he was charged with falsely reporting his AGI. This error, plus the trial
evidence of five additional uncharged offenses, resulted in a constructive amendment. The
government responds by admitting that count three inadvertently stated that Lawrence’s “taxable
income [as opposed to AGI] was $371,151, whereas, as he then and there knew and believed that
his adjusted gross income was greater than $371,151.” However, given the evidence presented at
trial, and jury instruction which required the jury to consider Lawrence’s belief concerning only his
AGI, not taxable income, he cannot show that such a typographical error in the indictment affected
his substantial rights.
This court generally reviews the record de novo to determine whether a constructive
amendment has occurred. Id. at 388. However, because the issue is raised for the first time on
appeal, we are limited to plain-error review. Id.; see also Vonner, 516 F.3d at 386; Gardiner, 463
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F.3d at 459. “A constructive amendment ‘results when the terms of an indictment are in effect
altered by the presentation of evidence and jury instructions which modify essential elements of the
offense charged such that there is a substantial likelihood that the defendant may have been
convicted of an offense other than the one charged in the indictment.” Kuehne, 547 F.3d at 683(quoting United States v. Martinez, 430 F.3d 317, 338 (6th Cir. 2005)). A constructive amendment
may also occur when the difference between the indictment and the jury instructions allowed the
defendant to be convicted on the basis of different behavior than that alleged in the original
indictment. Beasley, 583 F.3d at 390. “Constructive amendments are ‘per se prejudicial because
they infringe on the Fifth Amendment’s grand jury guarantee.’” Kuehne, 547 F.3d at 683 (quoting
Hynes, 467 F.3d at 962). A defendant is therefore entitled to a reversal of his conviction if he shows
that a constructive amendment had occurred. Id.
In this case, the jury instructions and trial proofs did not constructively amend count three.
That count charged:
On or about October 5, 2007, in Gallatin County, in the Eastern District of Kentucky,
MEREDITH L. LAWRENCE, a resident of Sparta, Kentucky, did willfully make
and subscribe an IRS Form 1040, which was verified by a written declaration that it
was made under the penalties of perjury and which he did not believe to be true and
correct as to every material matter. That Form 1040, which was prepared and signed
in the Eastern District of Kentucky and was filed with the Internal Revenue Service,
stated that Lawrence’s taxable income was $371,151, whereas, as he then and there
knew and believed that his adjusted gross income was greater than $371,151; all in
violation of 26 U.S.C. § 7206(1).
(Emphasis added.) A plain reading shows that Lawrence was charged with understating his AGI,
not his taxable income.
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The corresponding jury instruction is entirely consistent with this charge:
(1) Count Three of the Indictment accuses the Defendant of violating Title 26 of the
United States Code, section 7206(1). For you to find the Defendant guilty of Count
Three of the Indictment, you must be convinced that the government has proved each
and every one of the following elements beyond a reasonable doubt:
(a) The Defendant made and subscribed an IRS Form 1040 on or about October 5,
2007;
(b) The IRS Form 1040 contained a written declaration that it was made under the
penalties of perjury;
(c) The Defendant knew and believed that the IRS Form 1040 was not true and
correct as to every material matter, that is, he knew and believed that his adjusted
gross income was greater than $371,151, as reported on the IRS Form 1040; and
(d) The defendant falsely subscribed the IRS Form 1040, willfully and with the
specific intent to violate the law.
(2) An authorized electronic filing is sufficient to satisfy the first element of the
crimes charged even if the income tax return does not contain the Defendant’s actual
written signature.
Under these circumstances, the jury instruction did not modify the essential elements of the
offense charged, nor is there any difference between the indictment and the jury instruction which
allowed for Lawrence to be convicted on the basis of different behavior than that alleged in the
indictment. Beasley, 583 F.3d at 390. The indictment inadvertently alleged that Lawrence’s taxable
income in 2006 was $371,151 when it should have alleged that Lawrence’s AGI was $371,151. This
was an erroneous factual allegation, not the crime charged. The crime charged was that Lawrence
knew and believed that his AGI was greater than $371,151, and the trial evidence was consistent
with this theory. Moreover, the applicable jury instructions mirrored the indictment, specifically
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(1)(c). Thus, contrary to Lawrence’s position, this is not a situation where he was charged with
falsely stating his taxable income but the court instructed the jury that he was charged with falsely
stating his AGI. Accordingly, Lawrence’s constructive amendment argument falls flat.
V.
Lawrence next challenges the district court’s denial of his motion for a judgment of acquittal
on counts two and three. He argues that no rational jury could have found that he knowingly
“subscribed” to a false return because the government presented no evidence that he actually signed
the returns for tax years 2005 and 2006. Lawrence contends that his PIN is not the equivalent of his
actual signature because there is no proof that his accountant filed a Form 8879 for those years,
which must be filed before the IRS will treat a taxpayer’s PIN as his signature. The government
responds that Lawrence’s PIN is the equivalent of his signature and any argument to the contrary
is frivolous.
“For appeals from a denial of a judgment of acquittal based on the sufficiency of the
evidence, the standard of review is whether, after viewing the evidence in the light most favorable
to the prosecution, any rational trier of fact could have found [the] essential elements of the crime[.]”
United States v. Kernell, 667 F.3d 746, 750 (6th Cir. 2012) (internal quotation marks and citation
omitted). The single essential element in dispute here is whether Lawrence “made and subscribed”
returns for tax years 2005 and 2006. See Bishop, 412 U.S. at 350; 26 U.S.C. § 7206(1). Although
Lawrence does not dispute that he “made”— i.e., filed—returns for those years, he claims that he
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did not “subscribe” or sign them. See Black’s Law Dictionary (9th ed. 2009) (defining “subscribe”
as the “act of signing one’s name on a document; the signature so affixed.”).
Based upon the trial proofs in this case, a rational trier of fact could have found beyond a
reasonable doubt that Lawrence authorized the filing of the 2005 and 2006 returns with his name
“subscribed” to them. The subscription element can be established with proof that a taxpayer
authorized another person to sign his name on a return. United States v. Ponder, 444 F.2d 816, 822
(5th Cir. 1971). The IRS treats a PIN as an electronic signature. See 26 U.S.C. § 6061(b); see also
IRS Pub. 1345 (defining an “Electronic Signature” as a “[m]ethod of signing a return electronically
through use of a Personal Identification Number (PIN)”). Lawrence’s tax preparer, CPA Robert
Ryan, testified that in regards to the electronic filing of a tax return, a PIN serves as a taxpayer’s
signature and that Lawrence authorized him to e-file his personal tax returns, using his PIN, for
2004, 2005, and 2006. Lawrence does not dispute that his PIN is on those returns or that he
authorized Ryan to e-file his returns. Moreover, an IRS employee specifically confirmed that a PIN
functions as a signature for e-filed returns. This evidence provided a sufficient basis from which
the jury could find that Lawrence “subscribed” his name to the 2005 and 2006 returns.
Lawrence’s Form 8879 argument does not change this result. He claims that the IRS treats
a PIN as a signature on e-filed returns only if the taxpayer completes and signs a Form 8879 for the
year in question. And here, because the record does not contain a Form 8879 for tax years 2005 and
2006, these returns are unsigned.2 Lawrence’s reliance on the absence of these forms is misplaced.
2
Lawrence admits his PIN is the equivalent of his signature for his 2004 return because the
government introduced a Form 8879 for that year.
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First, although he contends that his returns for those years are unsigned, the IRS accepted both
returns as properly filed and apparently never questioned whether these returns were unsigned.
Second, a rational jury could treat the undisputed presence of Lawrence’s PIN—a unique personal
identifier, similar to a handwritten signature—on the e-filed returns for 2005 and 2006 as proof
beyond a reasonable doubt that he “subscribed” to these returns. Accordingly, the district court
properly denied Lawrence’s motion for a judgment of acquittal.
VI.
Lawrence further argues that the district court erred in ordering him to pay $128,253 in
restitution because district courts have no authority to order restitution for convictions of offenses
under Title 26.3 The government agrees that the district court could not include restitution as an
independent part of Lawrence’s sentence but responds that the court properly ordered restitution as
a special condition of supervised release under United States v. Blanchard, 618 F.3d 562, 576–77
(6th Cir. 2010), a case in which we observed that a district court may impose restitution as a special
condition of supervised release in a Title 26 criminal case.
Generally, we review de novo whether a restitution order is permitted under the law, and if
it is, we review the amount ordered for an abuse of discretion. United States v. Butler, 297 F.3d 505,
516 (6th Cir. 2002). In this case, however, we review the restitution order only for plain error
because Lawrence failed to raise the instant objection below. Id. at 518; see also Vonner, 516 F.3d
at 386; Gardiner, 463 F.3d at 459.
3
Lawrence challenges only the district court’s authority to assess the award, not its amount.
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The district court did not plainly err by including restitution as a special condition of
supervised release. Federal courts have no inherent authority to award restitution but may order the
same to the extent authorized by statute. United States v. Evers, 669 F.3d 645, 655 (6th Cir. 2012).
In this case, the district court was powerless to award restitution under the two federal restitution
statutes—the Victim Witness Protection Act, see 18 U.S.C. § 3663, and the Mandatory Victim
Restitution Act, see id. § 3663A—because neither authorizes restitution as an independent part of
the sentence for offenses under Title 26. However, as we observed in Blanchard, if a defendant has
been convicted of a tax crime under Title 26, and a court finds that the government has suffered a
loss, the court may order the defendant to make restitution as a special condition of supervised
release. See 618 F.3d at 577; see also Butler, 297 F.3d at 518 (restitution properly included as a
special condition of supervised release in Title 26 criminal case); U.S.S.G. § 5E1.1(a)(2)
(recognizing district court’s authority to order restitution as a special condition of supervised release
for offenses not specifically included in the restitution statues). Such is the case here. Accordingly,
the district court did not plainly err by ordering Lawrence to pay $128,253 in restitution as a special
condition of supervised release.
VII.
Lawrence’s final argument is that trial counsel was constitutionally deficient because counsel
(1) failed to request a “bill of particulars” before trial; (2) failed to request a specific unanimity
verdict form; (3) failed to argue that Racers’ cash was not income at the appropriate time; (4) failed
to object to hearsay evidence during the government’s direct examination of one of Lawrence’s
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bookkeepers; and (5) failed to adequately cross-examine one of Lawrence’s bookkeepers. The
government responds that the record is not sufficiently developed to allow the court to properly
assess the merits of these claims on direct appeal.
“As a general rule, a defendant may not raise ineffective assistance of counsel claims for the
first time on direct appeal, since there has not been an opportunity to develop and include in the
record evidence bearing on the merits of the allegations.” Martinez, 430 F.3d at 338 (internal
quotation marks and citation omitted). However, as an exception to the general rule, we will review
an ineffective assistance of counsel claim on direct appeal if “the record is adequately developed to
allow the court to properly assess the merits of the issue.” United States v. Fortson, 194 F.3d 730,
736 (6th Cir. 1999)). The exception exists for “rare cases” in which the record is “completely
developed[.]” United States v. Williams, 527 F. App’x 457, 460 (6th Cir. 2013).
The general rule controls here, and we decline to review Lawrence’s premature ineffective
assistance of counsel claims. This is not the rare instance in which the record is adequately
developed so that we may adjudicate the merits of these claims on direct appeal. There is no
affidavit or testimony from Lawrence’s trial counsel explaining his defense strategy. Consequently,
“we have no way of knowing whether a seemingly unusual or misguided action by counsel had a
sound strategic motive or was taken because the counsel’s alternatives were even worse.” United
States v. Ferguson, 669 F.3d 756, 763 (6th Cir. 2012) (internal quotation marks and citation
omitted); see also United States v. McCarty, 628 F.3d 284, 295–96 (6th Cir. 2010) (holding that
when the appellate record “consists largely of unsubstantiated allegations without affidavits from
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defense counsel or [the defendant],” it is not adequately developed). Nor does the record permit a
thorough evaluation of the prejudice, if any, resulting from any alleged deficiencies. This is not
surprising because, as the Supreme Court has observed, “[w]hen an ineffective-assistance claim is
brought on direct appeal, appellate counsel and the court must proceed on a trial record not
developed precisely for the object of litigating or preserving the claim and thus often incomplete or
inadequate for this purpose.” Massaro v. United States, 538 U.S. 500, 504–05 (2003). Accordingly,
we will not address Lawrence’s ineffective assistance of counsel claims.
VIII.
For these reasons, we affirm the judgment of the district court.
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