United States v. Richard H. Maclean, Jr. , 227 F. App'x 844 ( 2007 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JUNE 4, 2007
No. 06-14298 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 05-00169-CR-ORL-19-JGG
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
RICHARD H. MACLEAN, JR.,
MARY ANN MACLEAN,
Defendants-Appellants.
________________________
Appeals from the United States District Court
for the Middle District of Florida
_________________________
(June 4, 2007)
Before BIRCH, DUBINA and CARNES, Circuit Judges.
PER CURIAM:
Richard H. MacLean, Jr., (“MacLean”) and Mary Ann MacLean (“Mary
Ann”) (collectively referred to as “the MacLeans”) appeal their convictions for tax
evasion under 26 U.S.C. § 7201. Upon review, we conclude: (1) the district court
did not abuse its discretion by admitting evidence of MacLean’s prior conviction
under Rule 404(b) of the Federal Rules of Evidence, because the conviction was
relevant to his intent and was not unduly prejudicial; (2) the district court correctly
denied the MacLeans’ motion for judgment of acquittal, because a formal
assessment is not a requirement of establishing tax evasion and there was sufficient
evidence of the MacLeans’ income tax deficit and affirmative acts of evasion; and
(3) it was not plain error for the district court to fail to find that the Internal
Revenue Code, or parts of it, was unconstitutionally vague. For these reasons, we
AFFIRM the MacLeans’ convictions.
I. BACKGROUND
The MacLeans were jointly indicted on five counts of evading income tax on
the income they earned in the 1999, 2000, 2001, 2002, and 2003 tax years, in
violation of 26 U.S.C. § 7201. In every count, the indictment charged that the
MacLeans had
utiliz[ed] a bogus trust for the purpose of concealing the ownership of
the income; [made] withdrawals from the trust in the form of checks
to cash; [paid] all personal living expenses by cash or money orders;
titl[ed] personal assets in the names of bogus nominee trusts to
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conceal the ownership of the assets; and endors[ed] checks using the
language “Foreign Trust Proceeds” to conceal the source of their
income and assets.
R1-1 at 1-2.
Prior to trial, the government filed a motion in limine, explaining that it
expected the MacLeans to assert a number of “tax protestor” arguments–including
the argument that an assessment by the Internal Revenue Service (“IRS”) was a
condition precedent to prosecuting criminal tax charges, and asking the court to
order the MacLeans and any defense witnesses not to mention or allude to or
submit evidence regarding any of these arguments. The MacLeans filed a motion
in response and opposition to the government’s motion in limine. The MacLeans
stipulated that they would not raise a number of the arguments cited by the
government.
In an order entered directly into the docket, the court deferred ruling on the
government’s motion in part, and denied the motion as moot with regard to the
arguments the MacLeans had agreed to abstain from raising. The court granted the
government’s motion with regard to the MacLeans’ argument that an assessment
was a condition precedent to tax evasion, a proposition which the court rejected.
The MacLeans then filed a motion in limine, arising from certain
convictions of MacLean and others who had coached an adult daughter, Kristina
3
MacLean, regarding what to say in her testimony to the grand jury. The MacLeans
indicated that their appeal of these convictions and sentences was pending.1 They
also argued that these convictions were not relevant and did not fall under one of
the permitted uses under Federal Rule of Evidence 404(b). Further, they
contended that any probative value of this evidence was outweighed by the
prejudice it would cause.
At trial, the government presented 14 different witnesses and submitted
numerous documents into evidence. Gloria Jackson, an investigator for the IRS,
testified that, according to IRS records, the MacLeans filed no tax returns in any
year from 1993 through 2003, and the IRS sent the MacLeans tax delinquency
notices.
Jeffrey Sailor was a friend of the MacLeans for many years and was their
accountant. R12 at 90, 92. Sailor testified that while he had prepared tax returns
for them, he had stopped doing so in the early 1990s because MacLean had told
him “that he was essentially not planning on filing, because he didn’t feel that he
had a reason to.” Id. at 96. He explained that MacLean told him “that he did not
have a legal responsibility to file income taxes due to certain aspects of the code
never being ratified . . . that most people [were] not privy to that knowledge, and
1
We have since affirmed these convictions. United States v. Baker, No. 05-10994 (May
15, 2006).
4
that he had become aware of that knowledge, and with that now he knew that he
did not need to file anymore.” Id. at 98. Sailor told MacLean that he did not agree
with this theory, and that he needed to file tax returns, but MacLean told him he
was wrong.
Three different witnesses testified that they had sold cars to the one of the
MacLeans. The first witness testified that in 2001 May Ann MacLean had paid
$23,700 cash from a trust for a Buick Park Avenue. Notably, on the forms
associated with the transaction, the purchaser listed three different names and
addresses. The vehicle was ultimately titled in the name of “SY number one
holding trust.” Id. at 111. The witness testified that the driver’s license Mary Ann
produced as identification had an address different from any on the forms. He also
testified that she refused to give him her social security number.
The second such witness testified that in 2001 Mary Ann purchased an
Infiniti G20 for $20,576.58 in cash, and that the vehicle was titled to “SY holding
number 3 holding trust.” R13 at 69-70. Finally, a third witness testified that in
2000 MacLean purchased a 1998 Ford Expedition for $26,822.08 in cash.
Although at one point the vehicle was to be titled in MacLean’s name, it was
ultimately titled to “SY number one holding trust.” Id. at 80-81. Notably, the
witness testified that when he told MacLean that he was going to deposit the cash,
5
MacLean told the witness not to deposit more than $10,000 at once in order to
avoid attracting attention, and the witness testified that he complied with this
advice.
A State Farm insurance agent testified that MacLean was his client. He
testified that MacLean insured three vehicles with State Farm, though he could not
remember what kind of vehicles they were. He did not remember MacLean ever
telling him that “the ownership of these cars was in a trust.” Id. at 61. Finally, he
testified that his records seemed to show that MacLean had paid with a check or
money order.
Another witness testified that she had leased a house to the MacLeans during
this period, and they had always paid with a money order or with cash. She also
testified that the MacLeans used a general delivery address for their mailings from
her.
Bobbi Joyce, a vice president assistant banking center manager with Bank of
America, testified that MacLean was a frequent customer of hers for an account he
had in the name of Apente Management Group. She testified that their records
showed MacLean and Richard Allen Shiarla as signatories to the account, and that
MacLean was the company’s managing director. She testified that she had never
met Shiarla. Reading from documentary records, she testified that MacLean
6
endorsed checks that he deposited into the account with the words “foreign trust
proceeds per Title 26, USC/IRC 7701[(a)(31)] without prejudice, without
recourse.” Id. at 43. She also testified that the address on the account changed
from an address in the British West Indies to an address in Florida. She testified
that it appeared that all of the checks MacLean wrote on the account were checks
for cash that he drew at the bank. Finally, she testified that after the MacLeans
tried to have Mary MacLean added to the account, the bank’s legal department
determined that the account was improper and closed it.
Brenda Horton testified that she had worked as a bookkeeper for a Dr.
Milton Mcllwain during a period when the MacLeans also worked for him. She
testified that for a time, Mary Ann’s paychecks were made out to Richard
MacLean, and that later, they were made out to Apente Management Group. She
testified that the MacLeans worked for Dr. Mcllwain as independent contractors,
and that Mary Ann had told her this was “because they were not using their social
security numbers.” Id. at 106-08. She also testified that the cancelled paychecks
bore an endorsement, and that Mary Ann told her the endorsement allowed them to
cash the checks through the Apente Management Group and “very honestly” told
her that this was done “in avoidance of taxes.” Id. at 114-15.
7
By way of a stipulation read into evidence, Richard Allen Shiarla stated that
he met the MacLeans in the 1990s and that he “created Apente Management Group
as a foreign trust and had a mailing address in Charlestown Nevis, British West
Indies.” Id. at 117. He stated that he created a number of documents creating a
trust, sold the documents to MacLean, and was present at a meeting where
MacLean was made the managing director of the Apente Management Group trust.
Further, he stated that he and MacLean opened a bank account for the Apente
Management Group.
Dr. Mcllwain testified that he had been included in the trust creation
documents drafted by Shiarla, but that he never received anything from the trust,
and that he understood the trust to have been created to help the MacLeans avoid
paying taxes. He testified that while he couldn’t remember, he assumed the checks
he wrote to Apente Management Group were for the services proved by the
MacLeans.
A bank teller testified that MacLean regularly made deposits and cashed
checks–written “from the business itself”–from the Apente Management Group
bank account. Id. at 154-55. When she questioned MacLean about the “weird”
endorsement on the back of the checks he deposited, he told her “it had something
to do with him being a [N]ative American, which [she] assumed meant . . . he was
8
either of Indian descent or someone who was from Alaska, that type thing.” Id.
at 156.
Bruce Baker testified that he had employed the MacLeans at his electronics
company, and that their paychecks were made out to Apente Management Group.
He also testified that he had been convicted of failing to file a tax return and
sentenced to two years’ imprisonment. He testified that he had “consulted” with
MacLean regarding the issues in his tax trial in 2002 both before and during the
trial.
Scott Emerson, the trust technical advisor for the IRS who was qualified to
give expert testimony with regard to trust taxation, testified that the Apente
Management Group documents in evidence showed that a trust was established and
then the Apente Management Group was hired to manage the trust and MacLean
was made the trustee. R14 at 30-31. Emerson testified that in his opinion this trust
was “a sham trust or at best a grantor trust” (which the IRS would ignore for
taxation purposes). Id. at 30-32. Whether a sham or a grantor trust, the income
“would be taxed to the individual.” Id. at 34. Emerson also testified that one of
the documents’ use of the term “declaration of a pure contract trust organization”
was a particular kind of sham that he had seen before and that was normally used
to evade taxes or hide assets. Id. He also opined that the trust was not a foreign
9
trust, because it had a beneficiary in the United States and the United States courts
would have jurisdiction over it. Reviewing additional documents in evidence,
Emerson testified that the trust in question had never filed any of the appropriate
forms with the IRS to report its income.
Robert Combs, a revenue agent for the IRS who was qualified to give expert
testimony regarding “the computation of gross and adjusted gross income, taxable
income and tax liability, including the liability for filing a federal income tax
return,” id. at 53, testified that, after having observed the entire trial up to that
point, and having examined all of the documents in evidence, he had computed the
MacLeans’ taxable income for the tax years 1999 through 2003. He testified that
they had the following taxable income: (1) in 1999, $77,884.32; (2) in 2000,
$111,318.91; (3) in 2001,$128,356.17; (4) in 2002, $95,928.095; and (5) in 2003,
$92,878.38. Based on this same calculation, Combs testified that the MacLeans
owed taxes in the following amounts: (1) in 2000, $25,630; (2) in 2001, $29,630;
(3) in 2002, $19,696; and (4) in 2003, $16,839.2 He testified that the MacLeans
had withdrawn close to $600,000 from the trust between 1999 and 2003, and that
this was attributable to them as taxable income.
2
Combs omitted the tax liability for 1999, though the transcript suggests it was visible to
the jury in a chart he had prepared that was displayed during his testimony.
10
Harry Joseph Brister, an IRS special agent, testified that when he went to
serve subpoenas on the MacLeans, MacLean told Brister that “he did not have
anything to do with [Apente Management Group].” Id. at 99-100.
At various points during the trial, the parties and the court discussed the
admission of MacLean’s prior conviction. At the beginning of the third day of the
trial, the court found that intent was an issue raised by the MacLeans and that the
government’s case was not “strong” on the issue of intent. R14 at 4. The court
then found that the conviction for obstruction was evidence of intent, and
“although [it] could not find any case that allow[ed] a conviction in[to evidence]
without a [Rule 404(b)] analysis . . . [it did] not think a [Rule 404(b)] analysis
[was] appropriate, mainly because the extrinsic act and conviction and charged
offenses are two different offenses.” Id. at 5. The court then stated:
So, I don’t know that a [Rule 404(b)] analysis is the correct analysis
here. The appellate court may disagree, but that’s just how I feel
about it. I do feel that this shows intent from the government’s point
of view and that under the balancing test it would survive the [Rule]
403 objection that was made by [MacLean’s counsel] at the beginning
of the case.
Id. at 5-6. The court then asked counsel to develop a limiting instruction,
particularly noting that it was looking to an instruction used in another case. After
further discussion regarding laying a foundation for the evidence, the parties
agreed to admit the conviction by way of a stipulation.
11
Later that day, the court made the following statement to the jury:
Ladies and gentlemen, Government’s Exhibit 12 is being admitted
over objection. And I have ruled on this out of the presence of the
jury. It consists of a conviction as to [MacLean].
Here is a stipulation of the parties as to this document that I’m going
to read to you, so this can be taken as evidence without proof. And
after I read this stipulation of the parties as to Exhibit 12, I’m going to
give you a limiting instruction. That means that you must consider
this evidence in accordance with the limiting instruction I am giving
you, so first let me read the stipulation of the parties.
The conviction in Government’s Exhibit 12 relates to actions taken by
[MacLean] during the course of the investigation by a grand jury of
[the MacLeans’] income taxes. That investigation led to the
indictment in this case. The conviction in Exhibit 12 is presently
being appealed.
Id. at 101-02. At the government’s request, the court then read each count of the
judgment into the record, namely, two counts of “obstructing the administration of
justice of a federal grand jury,” one count of tampering with a witness, and one
count of tampering with evidence. Id. at 102. The court then continued:
Now, I want to give you a limiting instruction. The evidence of the
conviction, as to [MacLean] in Government’s exhibit 12, is admitted
only for your consideration of whether it shows that [] MacLean had
the intent to commit the offense, income tax evasion, for which he is
now on trial.
It is not to be considered by you as evincing bad character or a
criminal propensity on his part, but only for the purpose which I have
indicated that it was admitted into evidence, namely for your
consideration of whether [MacLean] had knowledge of and whether
there was illegal activity occurring in connection with the case, which
12
is on trial here before you. This conviction, as to [MacLean], is not to
be considered in any way as to [Mary Ann].
Id. at 102-03. The court then asked the parties if they objected to the limiting
instruction “or the manner it which [it had] stated it,” to which both parties
responded that they did not. Id. at 103.
Immediately thereafter, the government rested its case. Out of the presence
of the jury, the MacLeans moved for a judgment of acquittal, essentially arguing
that the government had failed to establish a willful attempt to evade income taxes
by either of the MacLeans, and reasserting its argument that the government was
required to show that a formal assessment had been completed for the payment of
taxes prior to establishing the evasion of those taxes. After the government
offered argument in opposition, the court denied the motion. The court found that
“there [was] sufficient evidence viewed in the light most favorable to the
government for the matter to be presented to the jury with a standard of beyond [a]
reasonable doubt.” Id. at 109-10. The court also specifically reaffirmed its early
ruling on the issue of the formal assessment.
While half of the jury was being brought back to the jury room after a break,
they crossed a hallway where MacLean was also approaching the courtroom,
handcuffed with his hands behind his back, and in the presence of two United
States marshals. According to the court officer, when he saw the approaching
13
marshals, he motioned to them to stop and then positioned himself to block the
jurors’ view. One of the marshals also blocked the jurors’ view of MacLean, and
they could not see his handcuffs. Nevertheless, he explained that the jurors were
only “[t]en feet or more” from MacLean. Id. at 203. As a result of this incident,
the MacLeans’ counsel moved for a mistrial, arguing that seeing MacLean with his
hands behind his back, escorted by United States marshals, “clearly prejudic[e]d
the jury.” Id. at 136. The court denied the motion, stating that it was “completely
speculative.” Id. at 136-37. Although the court offered to question the jurors
individually or give them an instruction, the MacLeans’ counsel declined to do
anything out of the concern that it would only make the situation worse.
In their defense, the MacLeans presented three witnesses: MacLean and
Mary Ann both testified in their own defense, and then the MacLeans called an
IRS agent who testified regarding the IRS’s document retention policies, pursuant
to which it appeared most of the MacLeans’ files had been destroyed. On cross-
examination, MacLean testified, among other things, that: (1) he had been paid for
work he performed; (2) he had not filed a single tax return; and (3) he had not paid
any income taxes. He also admitted that he had not filed any tax return for Apente
Management Group. When asked if he had told Mcllwain that was to avoid taxes,
14
MacLean replied: “[i]f you use the term avoid, yes, I had the right to avoid any
taxes I’m not liable for.” R14 at 199.
In her direct testimony, Mary Ann testified that her “husband [had been]
taken away from [her].” Id. at 254. On cross examination, Mary Ann denied
stating that the purpose of their pay arrangement at work was to avoid paying
income taxes. She also stated that she had not paid for the vehicles with cash, but
with travelers’ checks. She stated that she did not work until 1996, and that after
that point she relied on her husband, who told her not to file a tax return.
Thereafter, the defense rested, and, out of the presence of the jury, renewed
its motion for a judgment of acquittal, reasserting that the evidence was insufficient
to convict either of the MacLeans, and also reasserting that the government’s
failure to prepare formal assessments of the tax years at issue was a basis for a
judgment of acquittal. The court denied the motion.
While discussing the jury instructions, the court stated:
Also, in the analysis on the conviction, I gave you a reference to a
case, United States v. Sutton, which contained a [Rule 404(b)]
analysis. And I told you that I really didn’t feel the [Rule 404(b)]
analysis was appropriate in this case. But to the extent it is, I followed
the reasoning of that case, and I wanted to make sure that was clear on
the record.
R17 at 49. Later, during its instructions to the jury, the court stated:
15
Now, as I advised you during the course of the trial, government’s
Exhibit 12 is a judgment of conviction as to [MacLean] and may be
considered by you only as to the issue of intent as to that defendant. It
is not to be considered in any way as to [Mary Ann] or for any other
purpose. The judgment of conviction is presently the subject of an
appeal. Defendants are on trial only for the charges contained in the
indictment. They are not on trial for any other charge.
Id. at 104.
After deliberation, the jury found MacLean guilty on all five counts, but
found Mary Ann not guilty on one count of income tax evasion (Count 1) and
guilty on all four remaining counts. The court later sentenced Mary Ann to 24
months of imprisonment, followed by 2 years of supervised release. The court
sentenced MacLean to 33 months of imprisonment, to be served consecutive “by
eight months” to his prior undischarged federal sentence, followed by three years
of supervised release. R20 at 91-92. The MacLeans timely appealed.
II. DISCUSSION
A. Whether the district court erred by admitting evidence of MacLean’s prior
conviction either as intrinsic evidence or under Federal Rule of Evidence 404(b)
The MacLeans argue, first, that MacLean’s prior conviction was not relevant
to this case. Further, they argue that it did not go toward any of the uses permitted
by Federal Rule of Evidence 404(b), such as motive, intent, or knowledge. Even
assuming that it did serve one of these uses, the MacLeans argue that it still should
not have been admitted, as its probative value was outweighed by the prejudice it
16
caused, especially with regard to Mary Ann. They argue that this harm was
aggravated by the jury seeing MacLean in handcuffs in the custody of marshals.
They contend that the admission of the evidence, taken with the sight of MacLean
in handcuffs, deprived them of a fair trial.
We review properly preserved challenges to the district court’s rulings on
admission of evidence for an abuse of discretion. United States v. Jiminez, 224
F.3d 1243, 1249 (11th Cir. 2000) (citation omitted). A court abuses its discretion
when its decision “rests upon a clearly erroneous finding of fact, an errant
conclusion of law, or an improper application of law to fact.” United States v.
Baker, 432 F.3d 1189, 1202 (11th Cir. 2005) (citation omitted), cert. denied, 126 S.
Ct. 1809 (2006).
Federal Rule of Evidence 404(b) specifically bars the admission of
“[e]vidence of other crimes, wrongs, or acts” to prove a defendant’s character or
action in conformity therewith. However, this kind of evidence may be admitted
for other purposes, such as to show “proof of motive, opportunity, intent,
preparation, plan, knowledge, identity, or absence of mistake or accident.” Fed. R.
Evid. 404(b). If (1) the evidence is relevant to one of these issues, (2) there is
“sufficient proof that the defendant committed the prior act, and [(3) the
government] can show that the probative value of the evidence is not substantially
17
outweighed by its undue prejudice, and [it] meets the other requirements of [Rule]
403,” then evidence of other crimes may be admissible under Rule 404(b). Baker,
432 F.3d at 1205 (citation omitted).
That said, “other crimes evidence may be admissible [free from Rule 404(b)
limitations] if it is inextricably intertwined with the evidence regarding the charged
offense.” United States v. Fortenberry, 971 F.2d 717, 721 (11th Cir. 1992)
(citation omitted). “‘Evidence, not part of the crime charged but pertaining to the
chain of events explaining the context, motive and set-up of the crime, is properly
admitted if linked in time and circumstances with the charged crime, or forms an
integral and natural part of an account of the crime, or is necessary to complete the
story of the crime for the jury.’” United States v. McLean, 138 F.3d 1398, 1403
(11th Cir. 1998) (quoting United States v. Williford, 764 F.2d 1493, 1499 (11th
Cir. 1985)).
Here, although some of the court’s analysis suggests that it admitted this
evidence outside of Rule 404(b)–in other words, as inextricably intertwined with
the charged crime, the court justified its decision, in part, by noting that the
“extrinsic act and conviction and charged offenses are two different offenses.”
R14 at 5. This seems to suggest that the court actually thought the conviction was
not inextricably intertwined with the charged offense. The court went on to note
18
the weakness of the government’s case with regard to intent, and that the
conviction was less prejudicial than probative. Finally, the court limited the use of
the conviction to intent, and gave an instruction that it adopted from another case
regarding Rule 404(b) evidence. Thus, despite the fact that some of the court’s
language may suggest otherwise, it appears that it admitted MacLean’s prior
conviction under Rule 404(b), for the purpose of establishing his intent.
MacLean’s prior conviction for obstruction of justice and witness and
evidence tampering was probative of his intent to evade taxes, as it arose out of his
attempt to prepare himself and others for testimony before a grand jury
investigating the MacLeans for tax evasion. See Baker, 432 F.3d at 1205. None of
the parties argue that there is insufficient proof that MacLean was convicted of
obstruction of justice, id., and, in fact, the MacLeans stipulated to this fact at trial.
Thus, as long as the evidence’s probative value was not substantially outweighed
by undue prejudice, then it was properly admitted. Id.The evidence of MacLean’s prior conviction is probative of his intention to
evade taxes because it showed that when confronted with an investigation into his
actions, he interfered with witnesses and evidence, suggesting that he was
attempting to prevent the grand jury from discovering what he had done. The
evidence also suggested, as the court’s instruction allowed the jury to consider, that
19
MacLean knew his actions had been illegal. While this strong evidence was
obviously prejudicial to MacLean’s defense, it was not unduly so, especially
considering the court’s two limiting instructions that very clearly instructed the
jury on the use of the evidence. United States v. Calderon, 127 F.3d 1314, 1333
(11th Cir. 1997) (“Furthermore, any unfair prejudice that may have existed was
mitigated by the district judge’s limiting instruction.”).
While MacLean argues that the jury’s accidental observation of him in the
marshals’ custody aggravated the prejudice caused by the evidence of his prior
conviction, it is not clear that the jury saw him or the handcuffs. See, e.g.,
Marquard v. Secretary for Dept. of Corrections, 429 F.3d 1278, 1309 (11th Cir.
2005), cert. denied, 126 S. Ct. 2356 (2006) (holding that due process claim based
on shackling in front of the jury was meritless, because there was no evidence in
the record the defendant had been shackled in front of the jury). Moreover, his
defense counsel declined the cautionary instruction offered by the court.
Finally, the MacLeans allege that the evidence was especially prejudicial to
Mary Ann. However, the court specifically instructed the jury not to consider the
evidence with regard to her, and “we assume that juries follow their instructions.”
United States v. Kennard, 472 F.3d 851, 858 (11th Cir. 2006) (citation omitted),
petition for cert. filed, No. 06-10149 (March 14, 2007). In this case, the nature of
20
the evidence was such that it would not have been difficult for the jury to separate
it from consideration of Mary Ann’s guilt. Further, as discussed below, the
evidence was sufficient to support her conviction, even without this evidence.
For all these reasons, we conclude that the district court did not abuse its
discretion when it admitted Maclean’s prior conviction into evidence.
B. Whether the district court erred in denying the MacLeans’ motion for a
judgment of acquittal based on insufficient evidence
The MacLeans also argue that the district erred in denying their motion for a
judgment of acquittal based on insufficient evidence. Specifically, they argue that:
(1) the government had to establish the existence of an assessment of the taxes
owed as a condition precedent to establishing tax evasion; and (2) the government
failed to establish that they had taken any affirmative act of evasion. Notably, the
MacLeans do not argue that the evidence was insufficient to show that their tax
evasion was willful.
We generally review de novo the disposition of a defendant’s properly
preserved motion for judgment of acquittal. United States v. Perez-Tosta, 36 F.3d
1552, 1556 (11th Cir. 1994) (citation omitted). “The district court’s decision on
sufficiency of the evidence is entitled to no deference by this court.” United States
v. Taylor, 972 F.2d 1247, 1250 (11th Cir. 1992). “The district court’s denial of []
motions for a judgment of acquittal will be upheld if a reasonable trier of fact could
21
conclude that the evidence establishes the defendant’s guilt beyond a reasonable
doubt.” United States v. Rodriguez, 218 F.3d 1243, 1244 (11th Cir. 2000) (per
curiam) (citation omitted).
In order to be sufficient, the evidence need not “exclude every reasonable
hypothesis of innocence or be wholly inconsistent with every conclusion except
that of guilt, provided a reasonable trier of fact could find that the evidence
establishes guilt beyond a reasonable doubt.” United States v. Young, 906 F.2d
615, 618 (11th Cir. 1990) (citation omitted). This is so because “[a] jury is free to
choose among reasonable constructions of the evidence.” United States v. Vera,
701 F.2d 1349, 1357 (11th Cir. 1983) (citation omitted). We must view the facts,
and draw all reasonable inferences therefrom, in the light most favorable to the
government. United States v. Hansen, 262 F.3d 1217, 1236 (11th Cir. 2001) (per
curiam) (citation omitted).
Under section 7201, “[a]ny person who willfully attempts in any manner to
evade or defeat any tax imposed by this title or the payment thereof shall . . . be
guilty of a felony.” 26 U.S.C. § 7201. “To convict a person for criminal tax
evasion under [this section], the government must prove three elements:
‘willfulness; the existence of a tax deficiency, . . . and an affirmative act
constituting an evasion or attempted evasion of the tax.’” United States v.
22
Callahan, 588 F.2d 1078, 1081 (5th Cir. 1979) (citing Sansone v. United States,
380 U.S. 343, 351, 85 S. Ct. 1004, 1010 (1965)).
The MacLeans do not challenge on appeal the element of willfulness.
Accordingly, this argument is abandoned. See United States v. Ford, 270 F.3d
1346, 1347 (11th Cir. 2001) (per curiam) (“[I]ssues and contentions not timely
raised in the briefs are deemed abandoned”).
As to the tax deficiency element, an IRS agent testified regarding the
MacLeans’ income and tax liabilities for each of the tax years in the indictment.
Rather than attacking this testimony as itself insufficient to support the charge, the
MacLeans assert that the government was required to establish that the IRS had
completed a formal assessment of their tax deficiency. In support of this argument
they point to 26 U.S.C. §§ 6201 (establishing the government’s authority to make
assessments); 6203 (establishing the method of assessment); and 6303 (governing
notice and demand for tax following an assessment). While we have not addressed
this issue, other circuit courts have held that a formal assessment is not required to
prove tax evasion. See United States v. Silkman, 156 F.3d 833, 835 (8th Cir.
1998) (holding that an IRS assessment is “only prima facie proof of a deficiency”
that still leaves the issue for the jury); contra. United States v. England, 347 F.2d
425, 430 (7th Cir. 1965) (“There is no doubt that a valid assessment, and proof
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thereof, was an essential element of the case against appellants.”) (citation
omitted). Further, it is well-established in our court that a deficiency may be
proven with circumstantial evidence through a number of methods. United States
v. Carter, 721 F.2d 1514, 1538 (11th Cir. 1984), vacated in part on other grounds,
United States v. Lightsey, 886 F.2d 304, 305 (11th Cir. 1989). Accordingly, the
evidence was sufficient on this point.
As to the affirmative act element, “[w]hile there are indeed two elements of
affirmative act and willfulness, they are related, and evidence which goes to prove
willfulness may also go to the question of doing an affirmative act.” United States
v. Stone, 702 F.2d 1333, 1339 n.4 (11th Cir. 1983) (per curiam) (citation omitted).
Thus, the Supreme Court’s words could arguably be applied to either factor, when
it stated that
affirmative willful attempt [to defeat and evade taxes] may be inferred
from conduct such as keeping a double set of books, making false
entries of alterations, or false invoices or documents, destruction of
books or records, concealment of assets or covering up sources of
income, handling of one’s affairs to avoid making the records usual in
transactions of the kind, and any conduct, the likely effect of which
would be to mislead or to conceal.
Spies v. United States, 317 U.S. 492, 499, 63 S. Ct. 364, 368, 87 L.Ed. 418 (1943)
(emphasis added). Alleging that the defendant was “concealing or attempting to
conceal income” fulfills the affirmative act requirement. United States v. Edwards,
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777 F.2d 644, 650 (11th Cir. 1985) (held in the context of the sufficiency of an
indictment).
Here, the testimony at trial established a number of affirmative acts on the
part of both of the MacLeans that could be construed as acts of evasion. Most
significant with regard to MacLean was the acquisition of the Apente Management
Group trust, which testimony at trial showed fit the description of a “sham” trust.
MacLean used the Apente Management Group name to operate as an independent
contractor and receive his income through checks made out to the company
without using his social security number or having taxes withheld. Further, he then
paid for living expenses with cash drawn directly from the company’s checking
account. When he purchased a vehicle with cash, he also titled it in the name of a
trust. Finally, MacLean admitted to not filing any tax returns, and he admitted to
avoiding paying taxes. With regard to Mary Ann, she also operated as an
independent contractor, with the same benefits of doing so, and was paid first in
her husband’s name and then in the name of the Apente Management Group. She
purchased two vehicles in cash, using multiple addresses, and titled the vehicles in
the names of two different trusts.
As a whole, these were acts that the jury could have reasonably decided
showed beyond a reasonable doubt that the MacLeans intended to conceal their
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income or mislead the IRS. See Spies, 317 U.S. at 499, 63 S. Ct. at 368. Although
Mary Ann seemed to contradict some of the evidence in her testimony, the jury
was free not only to disbelieve her, but also to believe the opposite of what she
said. United States v. Turner, 474 F.3d 1265, 1280 (11th Cir. 2007) (“[T]he jury,
hearing [the defendant’s] words and seeing [her] demeanor, was entitled to
disbelieve [her] testimony and, in fact, to believe the opposite of what [she] said”)
(citation and quotations omitted). For all these reasons, the evidence was sufficient
to support the MacLeans’ convictions in this case.
C. Whether the district court plainly erred by failing to find that the Internal
Revenue Code, or parts of the code, are unconstitutionally vague
The MacLeans briefly argue that if an assessment is not a condition
precedent to proving tax evasion, then Title 26 of the United States Code, also
called the Internal Revenue Code (“IRC”), is void for vagueness. Specifically,
they assert that “[i]t is obvious that the government did not follow the plain
language of [26 U.S.C. §§ 6201, 6303, and 6331(a)] when it [indicted the
MacLeans].” Appellants’ Br. at 18.
We generally review the challenge of a statute as unconstitutionally vague
de novo. United States v. Paradies, 98 F.3d 1266, 1282 (11th Cir. 1996) (citation
omitted). However, because the MacLeans raise this argument for the first time on
appeal, “it is within our discretion to either address [it] or consider [it] waived.”
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United States v. Dupree, 258 F.3d 1258, 1259 (11th Cir. 2001). Accordingly, we
will only review this argument for plain error. United States v. Olano, 507 U.S.
725, 731-32, 113 S. Ct. 1770, 1776 (1993). Under this standard, the MacLeans
must establish that: (1) an error occurred; (2) it is plain; (3) it affected their
substantial rights; and (4) it seriously affected the fairness and integrity of the
proceedings. Id. at 731-32, 113 S. Ct. at 1776.
“Vagueness may invalidate a criminal statute if it either (1) fails to provide
the kind of notice that will enable ordinary people to understand what conduct it
prohibits or (2) authorizes or encourages arbitrary and discriminatory
enforcement.” United States v. Eckhardt, 466 F.3d 938, 944 (11th Cir. 2006)
(citation and quotations omitted), cert. denied, 127 S. Ct.1305 (2007). To the
extent that a statute requires showing “knowing and willful” conduct, any other
vagueness contained in the statute is mitigated. United States v. Starks, 157 F.3d
833, 840 (11th Cir. 1998).
The MacLeans argue that if a formal assessment is not required for a
conviction for tax evasion, then the IRC, and in particular, §§ 6201, 6203, and
6331, are unconstitutionally vague. Beyond alleging that “it is obvious” that the
prosecution did not follow the plain language of these sections, Appellants’ Br. at
18, presumably by not preparing a formal assessment in this case, the MacLeans do
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not explain what about these sections, or the rest of the IRC, is vague. We have
never held that any of these sections, let alone the entire IRC, is unconstitutionally
vague. Even if this issue is fully raised on appeal, and even if it was error, it was
not plain. United States v. Chau, 426 F.3d 1318, 1322 (11th Cir. 2005) (holding
that an error is not plain “if it is not clear under current law”) (citation and
quotations omitted).
III. CONCLUSION
After a thorough review of the record and consideration of the arguments by
the parties we find no reversible error on the part of the trial court. Accordingly,
we AFFIRM.
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