United States v. Del Hardy

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 21 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 18-10174
Plaintiff-Appellee, D.C. No.
3:16-cr-00006-MMD-VPC-1
v.
DEL HARDY, Esquire, AKA Delmar L. MEMORANDUM*
Hardy,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Nevada
Miranda M. Du, District Judge, Presiding
Argued and Submitted March 13, 2019
San Francisco, California
Before: M. SMITH, WATFORD, and HURWITZ, Circuit Judges.
Delmar Hardy was convicted under 26 U.S.C. § 7206(1) of three counts of
willfully filing false tax returns. We have jurisdiction of this appeal under 28 U.S.C.
§ 1291 and affirm.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
1. “Good faith reliance on a qualified accountant has long been a defense to
willfulness in cases of tax fraud and evasion.” United States v. Bishop, 291 F.3d
1100, 1106 (9th Cir. 2002). We have made clear, however, that if “the trial court
adequately instructs on specific intent, the failure to give an additional instruction
on good faith reliance upon expert advice is not reversible error.” United States v.
Dorotich, 900 F.2d 192, 194 (9th Cir. 1990) (internal quotation marks and citation
omitted). The district court adequately instructed the jury on specific intent, telling
it that the government was required to prove both specific intent and that Hardy did
not have a good faith belief that he was complying with the law. The district court
therefore did not abuse its discretion by declining to give Hardy’s requested
instruction about reliance on the advice of an accountant.
2. The district court did not abuse its discretion in giving a deliberate
ignorance instruction. See United States v. Jewell, 532 F.2d 697, 700 (9th Cir. 1976)
(en banc). The instruction was appropriate in light of evidence that Hardy instructed
his office manager to account for cash receipts in a different manner than other
payments and did not direct her to send cash receipt records to his accountant.
Moreover, although Hardy claimed not to pay attention to his tax returns, his
accountant testified that he closely monitored his return’s description of a closely
held corporation.
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3. The court did not abuse its discretion in admitting evidence of Hardy’s
expenditures and claimed income during the tax years at issue as evidence of his
awareness of underreporting of income. See United States v. Marabelles, 724 F.2d
1374, 1379 (9th Cir. 1984) (“Although direct proof of a taxpayer’s intent to evade
taxes is rarely available, willfulness may be inferred by the trier of fact from all the
facts and circumstances of the attempted understatement of tax.”).
4. The district court also did not abuse its discretion in excluding expert
evidence that accurate tax returns would still have resulted in relatively low liability
for Hardy. An absence of tax liability is not a defense to false reporting. See United
States v. Marashi, 913 F.2d 724, 736 (9th Cir. 1990) (“A violation of 26 U.S.C.
§ 7206(1) is complete when a taxpayer files a return which he does not believe to be
true and correct as to every material matter.”) (internal quotation marks omitted).
5. The district court did not abuse its discretion in denying a new trial after its
post-verdict dismissal, at the government’s request, of Hardy’s conviction for one
count of corruptly endeavoring to obstruct the due administration of the internal
revenue laws, in violation of 26 U.S.C. § 7212(a). The court appropriately rejected
Hardy’s argument that “spillover” evidence from the dismissed count tainted the
convictions on the false tax return counts. See United States v. Lazarenko, 564 F.3d
1026, 1043–44 (9th Cir. 2009) (listing relevant factors). The court’s instructions—
a “critical factor,” id. at 1043—delineated the different elements of each charged
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offense. And, the jury, although returning guilty verdicts on four of the counts in
the indictment, acquitted on the remaining count. “The fact that the jury rendered
selective verdicts is highly indicative of its ability to compartmentalize the
evidence.” United States v. Cuozzo, 962 F.2d 945, 950 (9th Cir. 1992).
AFFIRMED.
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