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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-11538
________________________
D.C. Docket No. 1:15-cr-00403-MHC-AJB-1
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
FRAZIER TODD, JR.
Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(October 11, 2019)
Before TJOFLAT and JORDAN, Circuit Judges, and SCHLESINGER,∗ District
Judge.
∗The Honorable Harvey E. Schlesinger, United States District Judge for the Middle District of
Florida, sitting by designation.
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PER CURIAM:
Frazier Todd, Jr. challenges his conviction for filing tax returns fraudulently
claiming that individuals were entitled to receive the American Opportunity Tax
Credit (“AOTC”) and the Fuel Tax Credit (“FTC”). He argues that two pieces of
evidence—his prior tax fraud conviction and his testimony before Congress
discussing the details of his previous tax fraud scheme—should not have been
admitted at trial. He also challenges the amount of loss and restitution determined
by the district court at sentencing. Because the district court did not abuse its
discretion in admitting the challenged evidence at trial and did not clearly err in
calculating the amount of loss and restitution at sentencing, we affirm.
I
After a four-day trial, a jury convicted Mr. Todd of one count of conspiring to
commit mail and wire fraud, in violation of 18 U.S.C. § 1349, one count of
obstructing and impeding the internal revenue laws, in violation of 26 U.S.C.
§ 7212(a) and 18 U.S.C. § 2, and 10 counts of making false claims to the Internal
Revenue Service (and aiding abetting others who made false claims), in violation of
18 U.S.C. §§ 287 and 2.
In short, Mr. Todd and his co-conspirators filed false tax returns on behalf of
clients claiming that they were entitled to receive the AOTC and the FTC. Those
returns were fraudulent because the taxpayers had not incurred the $4,000 in
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qualified educational expenses needed to qualify for the AOTC and did not have
businesses that bought gas for vehicles and heavy machinery for “off highway use”
required for the FTC. Based on the fraudulent returns, the IRS issued a $1,000
refund for each taxpayer who claimed the AOTC and between $10,000 to $15,000
for each taxpayer who claimed the FTC.
The district court sentenced Mr. Todd to 222 months in prison, to be followed
by a term of supervised release. The court found that the fraudulent tax credit
scheme resulted in a loss of $3,631,466 and ordered Mr. Todd to pay restitution
(jointly and severally with his co-defendants) in that amount.
Mr. Todd challenges his conviction on two grounds: the government’s
admission at trial of his prior tax fraud conviction, and the government’s admission
at trial of his testimony before Congress. He also contests his sentence and the
restitution order. He argues that his loss and restitution calculations were not
supported by the evidence.
II
We review the district court’s evidentiary rulings for abuse of discretion. See
United States v. Brown,
415 F.3d 1257, 1264–65 (11th Cir. 2005). “An abuse of
discretion can occur where the district court applies the wrong law, follows the
wrong procedure, bases its decision on clearly erroneous facts, or commits a clear
error in judgment.”
Id. at 1266. For the reasons which follow, we conclude that the
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district court did not abuse its discretion by admitting the evidence challenged by
Mr. Todd.
In a motion in limine, Mr. Todd objected to the admission of his prior
conviction in 1992 for conspiring to commit tax fraud and his 1994 testimony before
a Congressional subcommittee discussing the conduct that led to that conviction. He
argued that the evidence should be excluded because it was irrelevant or,
alternatively, because the risk of prejudice outweighed its probative value. The
government responded that the evidence was admissible under Federal Rule of
Evidence 404(b) because it could show that Mr. Todd knew how to prepare false tax
returns, use electronic filing numbers of other individuals to conceal his own
activity, and determine which tax credits could be claimed without alerting the
authorities. The evidence could also demonstrate his method of recruiting clients.
All of that information, the government said, was relevant to its burden of proving
knowledge, criminal intent, and absence of mistake.
The district court denied Mr. Todd’s motion in limine. The district court
explained that, although the conviction and testimony occurred more than 20 years
ago, the evidence was admissible to prove “motive, opportunity, intent, preparation,
plan, knowledge, identify, absence of mistake, or lack of accident.” Fed. R. Evid.
404(b)(2). Citing our decision in United States v. Matthews,
431 F.3d 1296, 1310–
11 (11th Cir. 2005), the court ruled that the evidence was relevant to whether Mr.
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Todd had the intent and knowledge to commit the acts charged in the present case,
and thus did not amount to inadmissible character evidence. Moreover, the evidence
was neither too remote to be probative nor too prejudicial given that Mr. Todd could
present contrary evidence and request a limiting jury instruction.
At trial, Mr. Todd additionally argued that the transcript of his Congressional
testimony was inadmissible because it was not certified and thus lacked a proper
foundation. Although the government had obtained a certified copy of the transcript
from the Library of Congress, the transcript did not “contain an affirmation from the
court reporter that the testimony that was taken down is a true and accurate
recordation of the testimony that was given at the hearing.” D.E. 194 at 165. The
district court overruled this objection, agreeing with the government that “whether
it’s an accurate transcript gets to the weight rather than the admissibility” of the
transcript.
Id. at 166.
The district court did not err by admitting Mr. Todd’s 1992 conviction. The
conviction was over 20 years old, and “temporal remoteness is an important factor
to be considered as it ‘depreciates the probity of the extrinsic offense.’”
Matthews,
431 F.3d at 1311 (quoting United States v. Beechum,
582 F.2d 898, 915 (5th Cir.
1978) (en banc)). But the district court addressed this concern and found that the
conduct Mr. Todd had committed was similar enough to the present charges to be
relevant. Specifically, he “(1) filed false and fraudulent tax returns on behalf of both
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corporate and individual clients; (2) used a variety of fraudulent methods to inflate
the tax refunds claims on the returns; and (3) overstated his clients’ claimed income
on false Forms W-2.” D.E. 134 at 7–8.
Mr. Todd “bears a heavy burden in demonstrating an abuse of the court’s
broad discretion in determining if an extrinsic offense is too remote to be probative.”
Id. Given the similarity between the two offenses, Mr. Todd has not met that burden
here. He has also failed to demonstrate that any prejudicial effects so outweighed
the probative value of the evidence that admission of the evidence was “a clear error
of judgment as to amount to an abuse of discretion,” especially in light of the district
court’s three separate limiting instructions to the jury.
Id. at 1312. See also United
States v. Church,
955 F.2d 688, 700 (11th Cir. 1992) (describing Rule 403 as “an
extraordinary remedy which should be used sparingly, since it permits the trial court
to exclude concededly probative evidence”) (quoting United States v. Norton,
867
F.2d 1354, 1361 (11th Cir. 1989)).
The district court also did not abuse its discretion by admitting Mr. Todd’s
Congressional testimony. The transcript was admissible as a self-authenticating
document that contained “a seal purporting to be that of the United States . . . or a
department, agency, or officer of an entity named above.” Fed. R. Evid. 902(1)(A).
The exhibit was submitted with a United States seal and a signature from the Section
Head of the Duplication Services of the Office of Business Enterprises of the Library
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of Congress. The Section Head certified that the attached photocopies were “true
representations” of the contents of the “IRS Filing Systems Vulnerable to Tax
Refund Fraud” publication at the Library of Congress, which contained hearing
transcripts before the House of Representatives Committee on Ways and Means. See
Supp. App. at 83, Gov’t Ex. 1. These features of the document were sufficient for
self-authentication under Rule 902(1). Any error in the transcript went to the
transcript’s weight, not to whether it was an authentic document. And, as already
explained, the district court did not err by finding that the congressional testimony
was relevant because it addressed a similar crime he had committed in a similar way.
Therefore, Mr. Todd did not suffer unfair prejudice due to the district court’s
admission of the transcript.
III
We review the district court’s loss calculation for clear error. See United
States v. Machado,
333 F.3d 1225, 1227 (11th Cir. 2003). We conclude that the
district court did not err in calculating the loss resulting from Mr. Todd’s offenses.
Under the 2016 Sentencing Guidelines, Mr. Todd’s base offense level was
increased based on the amount of the loss involved in the offense. See U.S.S.G.
§ 2B1.1(b)(1)(J). As a general matter, “[w]hen calculating loss to victims according
to the sentencing guidelines, the district court need only make a reasonable estimate
of the loss.” United States v. Masferrer,
514 F.3d 1158, 1164 (11th Cir. 2008). In
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other words, the sentencing court does not always need to calculate an exact
amount—only a “reasonable estimate of the loss, given the available information.”
United States v. Barrington,
648 F.3d 1178, 1197 (11th Cir. 2011) (quoting United
States v. Lee,
427 F.3d 881, 893 (11th Cir. 2005)). The government, if challenged,
“must support its loss calculation with reliable and specific evidence” that exceeds
the threshold of preponderance.
Id. (internal quotation omitted). See also United
States v. Washington,
714 F.3d 1358, 1361 (11th Cir. 2013) (“When the government
seeks to apply an enhancement under the Sentencing Guidelines over a defendant’s
factual objection, it has the burden of introducing sufficient and reliable evidence to
prove the necessary facts by a preponderance of the evidence.”) (internal quotation
omitted).
The presentence investigation report explained that Mr. Todd was responsible
for 393 false returns totaling $3,787,935 in refunds paid by the IRS. The report also
concluded that Mr. Todd was accountable for an additional $4,444,884 based on the
convictions for conspiracy to commit mail and wire fraud. Mr. Todd challenged the
report, arguing that there was insufficient evidence at trial to support those
calculations.
At sentencing, the government called Special Agent Lauren Neal to discuss
the loss calculation. During Agent Neal’s testimony, the government introduced two
exhibits—summary charts that listed the names and addresses of the clients, the
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amount of the AOTC and FTC Mr. Todd claimed on their behalf, and the amount of
the refunds received from the IRS. Agent Neal testified that the charts did not
contain every tax return that was prepared as part of the tax fraud scheme, but only
those that the government was able to tie to Mr. Todd or his co-conspirators. The
charts showed that the total amounts of fraudulent refunds were $3,631,466 for the
AOTC and $2,254,828 for the FTC. The charts did not include tax returns that were
filed by mail or in person, which were more difficult to connect to the conspiracy
without a traceable IP address. In addition to identifying tax returns that were
traceable to the defendants’ IP addresses, Agent Neal identified tax returns filed by
Mr. Todd and his associates based on the “preparer’s name on the return” and “the
bank accounts that the refund was going to.” D.E. 196 at 23. Mr. Todd did not
object to either of these exhibits and did not challenge the government’s calculation
in either of the charts.
The district court concluded that the government “proved by a preponderance
of the evidence that . . . the loss exceeded $3.5 million,” an amount well below the
report’s total loss amount calculation of $8,232,819. D.E. 196 at 42. In addition,
the court noted: “I’m not sure what the exact loss amount is and I’m not sure anybody
can tell me what it is, but I think the preponderance of the evidence shows it is
certainly well in excess of $3.5 million.”
Id. Thus, the advisory guidelines placed
Mr. Todd in a loss range between $3,500,000 and $9,500,000.
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On appeal, Mr. Todd argues that the district court incorrectly adopted the
government’s calculations, which were based on “speculative” and “unreliable”
inferences. See Appellant’s Br. at 25. In particular, Mr. Todd argues that the
government did not specify how many taxpayers had been interviewed about the
legitimacy of their returns, or how much of each refund was legitimate.
Id. at 26–
27. He also argues that the district court acted arbitrarily by fixing the loss amount
at over $3,500,000 based on the guideline ranges.
We disagree. Under the clear error standard, we must affirm the district
court’s loss amount finding if it is “plausible in light of the record viewed in its
entirety.” United States v. Siegelman,
786 F.3d 1322, 1333 (11th Cir. 2015). The
district court’s findings here meet that standard. The government presented evidence
that Mr. Todd and his co-conspirators filed numerous tax credits that his clients did
not apply for and were not qualified to receive. It narrowed the amount of those
fraudulent tax credits to those that could be directly traced to Mr. Todd’s business
and filing numbers. Although Agent Neal spoke with only a few victims, those
interviews displayed a pattern that Agent Neal described at sentencing. Mr. Todd
did not challenge either Agent Neal’s testimony or the calculations presented in the
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charts. As such, the government met its burden to prove the loss amount by
preponderance of the evidence.1
Moreover, the district court did not act arbitrarily by declining to calculate a
precise loss amount above the $3,500,000 minimum. The record contained
sufficient evidence that Mr. Todd was likely responsible for significantly more loss
than $3,500,000 and potentially up to the report’s calculation of $8,232,819.
Because the record supports the district court’s conclusion that Mr. Todd committed
at least $3,500,000 worth of fraud, the district court was not required to calculate a
more precise amount. See e.g.,
Masferrer, 514 F.3d at 1164–65 (holding that the
“district court’s calculation of total loss between $20 and $40 million was not clearly
erroneous” because it was a “reasonable estimate” given the evidence presented at
trial and at sentencing).
IV
Finally, Mr. Todd argues that the district court clearly erred by ordering him
to pay $3,631,466 in restitution to the IRS because that sum was not supported by
the evidence. But Mr. Todd did not object to the district court’s restitution
calculation at sentencing, so we may review only for plain error. See United States
1
Because the district court’s loss calculation was supported by a preponderance of the evidence
admitted at sentencing, Mr. Todd’s Fourteenth Amendment due process rights were not violated.
See United States v. Perez,
960 F.2d 1569, 1575 (11th Cir. 1992) (“Due process requires that
factual determinations at sentencing be supported by a preponderance of the evidence . . . and that
the defendant be on notice that such an amount is involved as may trigger enhancement.”).
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v. Odom,
252 F.3d 1289, 1299 (11th Cir. 2001) (“If a defendant fails to challenge a
restitution order at sentencing, she waives that objection . . . In such a case, this Court
reviews for plain error.”). Under plain error, “[w]e will only entertain this issue
where the failure to address a perceived error will result in manifest injustice.”
United States v. Dabbs,
134 F.3d 1071, 1084 (11th Cir. 1998). “We will find plain
error only where (1) there is an error in the district court’s determination; (2) the
error is plain or obvious; (3) the error affects the defendant’s substantial rights in
that it was prejudicial and not harmless; and (4) the error seriously affects the
fairness, integrity, or public reputation of judicial proceedings.” United States v.
Clark,
274 F.3d 1325, 1326 (11th Cir. 2001).
In his initial brief, Mr. Todd did not argue that there was plain error (only
clear error) and he did not file a reply brief. Therefore, he waived the issue of
whether the district court committed plain error in its restitution calculation. See,
e.g., United States v. Gupta,
463 F.3d 1182, 1195 (11th Cir. 2006) (“We may decline
to address an argument where a party fails to provide arguments on the merits of an
issue in its initial or reply brief. Without such argument the issue is deemed
waived.”).
In any event, there is nothing in the record that leads us to believe that the
restitution calculation was plainly incorrect. Mr. Todd’s argument on appeal is not
that the calculation was mathematically inaccurate, but that it was not supported by
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evidence because the district court “merely assumed that the amount of restitution
and the amount of loss for guideline purposes would be the same.” Appellant’s Br.
at 33. It is true that “the amount of loss does not necessarily equal the amount of
restitution to be paid because a defendant’s culpability will not always equal the
victim’s injury,” United States v. Huff,
609 F.3d 1240, 1247 (11th Cir. 2010), and
that unlike loss, “a restitution award must be based on the amount of loss actually
caused by the defendant’s conduct.” United States v. Liss,
265 F.3d 1220, 1231
(11th Cir. 2001). But that is beside the point here because the district court did not
merely equate loss with restitution. Rather, it relied on the detailed summary chart
submitted by the government and explicated by Agent Neal. That chart listed the
amount that the IRS refunded to each taxpayer, which here is “the amount of loss
actually caused by the defendant’s conduct.”
Id. Mr. Todd does not otherwise
contest the factual accuracy of the exhibit, so we cannot say that there was plain
error in the district court’s restitution calculation.
V
For the foregoing reasons, Mr. Todd’s conviction and sentence are affirmed.
AFFIRMED.
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