Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-14-03636/USCOURTS-ca8-14-03636-0/pdf.json

Parties Involved:
Brenda S. Laws
Appellant
United States of America
Appellee

Document Text:

United States Court of Appeals

For the Eighth Circuit

___________________________

No. 14-3636

___________________________

United States of America

lllllllllllllllllllll Plaintiff - Appellee

v.

Brenda S. Laws

lllllllllllllllllllll Defendant - Appellant

___________________________

No. 14-3639

___________________________

United States of America

lllllllllllllllllllll Plaintiff - Appellee

v.

Lareka S. Laws

lllllllllllllllllllll Defendant - Appellant

___________________________

No. 14-3640

___________________________

United States of America

lllllllllllllllllllll Plaintiff - Appellee

Appellate Case: 14-3636 Page: 1 Date Filed: 03/15/2016 Entry ID: 4377754 
v.

Milton L. Laws, Jr.

lllllllllllllllllllll Defendant - Appellant

___________________________

No. 14-3642

___________________________

United States of America

lllllllllllllllllllll Plaintiff - Appellee

v.

Jameel L. Laws

lllllllllllllllllllll Defendant - Appellant

____________

Appeals from United States District Court 

for the Eastern District of Arkansas - Little Rock

____________

 Submitted: December 15, 2015

 Filed: March 15, 2016

____________

Before MURPHY, BENTON, and KELLY, Circuit Judges.

____________

KELLY, Circuit Judge.

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Appellate Case: 14-3636 Page: 2 Date Filed: 03/15/2016 Entry ID: 4377754 
Brenda Laws, Lareka Laws, Milton Laws, and Jameel Laws were charged with

conspiracy to defraud the United States by falsely claiming tax refunds in violation

of 18 U.S.C. § 286, and making false claims to the IRS in violation of 18 U.S.C.

§ 287. These charges arose from a scheme in which the defendants filed more than

200 tax returns claiming first-time homebuyer tax credits to which the named

taxpayer was not entitled. The tax refunds, including the falsely-claimed credit, were

then deposited into one of 17 bank accounts owned or controlled by a member of the

Laws family. The total amount of the refunds fraudulently claimed was $1,730,086,

and the total amount of the refunds issued was $1,364,171.

Following a jury trial, the four defendants were found guilty on all counts. On 1

November 6, 2014, the district court entered judgment and sentenced the defendants

to terms of imprisonment ranging between 30 and 64 months. On appeal, Brenda

Laws challenges the district court’s calculation of the applicable Guidelines

sentencing range; Milton Laws challenges the court’s denial of his motion to

suppress; Lareka Laws challenges the denial of her motion for acquittal; and Jameel

Laws challenges the sufficiency of the evidence to support his conviction. We

address each argument in turn.

I. Brenda Laws

In sentencing Brenda Laws, the district court overruled her objection to three

sentencing enhancements, which collectively raised her total offense level from 22

to 32. Based on the total offense level of 32, the court sentenced Laws to 64 months

on the conspiracy count and 30 months on the false claims count, to run concurrently. 

The indictment alleged one count of conspiracy against all four defendants

1

(Count 1), and six separate counts of making false claims to the IRS (Counts 2–7). 

Brenda Laws was found guilty on Counts 1 and 7; Milton Laws was found guilty on

Counts 1 and 7; Lareka Laws was found guilty on Counts 1, 2, and 5; and Jameel

Laws was found guilty on Counts 1 and 4.

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Laws appeals the application of the three enhancements, arguing that they were

erroneously applied given the facts and circumstances of her offense. We review the

district court’s interpretation and application of the Sentencing Guidelines de novo,

and review findings of fact for clear error. United States v. Ault, 598 F.3d 1039,

1040 (8th Cir. 2010).

The firstsentencing enhancement Laws challengesisthe 2-level sophisticated

means enhancement under USSG § 2B1.1(b)(10)(C). That enhancement applies

when the offense involved “especially complex or especially intricate . . . conduct.” 

USSG § 2B1.1(b)(10)(C), Application Note 9(B) (2013). The relative sophistication

of a scheme of fraudulent conduct is “viewed in light of the fraudulent conduct and

differentiated, by assessing the intricacy or planning of the conduct, from similar

offenses conducted by different defendants.” United States v. Hance, 501 F.3d 900,

909 (8th Cir. 2007). Thus, for the enhancement to apply, the government must show

that the offense conduct at issue was notably more complex or intricate than the

garden-variety version of that offense. Id. The question is not whether the offense

is generally considered a sophisticated one—for instance, securities fraud as

compared to simple assault. Rather, the question is whether the particular offense

conduct was more than usually sophisticated when compared to the offense in its

basic form. Id. at 909–11 (holding that renting a post office box under an assumed

name and using that box to carry out a fraud scheme was not distinguishable “from

the multitude of other mail fraud cases”).

Here, the district court concluded that the “repetitive and coordinated conduct”

involved in the offense made its means sophisticated. Even if any single part of the

offense was not particularly complicated, “repetitive and coordinated conduct can

amount to a sophisticated scheme.” United States v. Sethi, 702 F.3d 1076, 1079 (8th

Cir. 2013) (quoting United States v. Fiorito, 640 F.3d 338, 351 (8th Cir. 2011)). 

Importantly, however, mere repetition is not sufficient to make an offense

sophisticated. Instead, the sophistication ofthe offense conduct is associated with the

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means of repetition, the coordination required to carry out the repeated conduct, and

the number of repetitions or length of time over which the scheme took place. See,

e.g., Fiorito, 640 F.3d at 351 (scheme required coordinating sale or refinancing of

multiple homes, took place over the course of three years, and involved at least 11

victims); United States v. Bistrup, 449 F.3d 873, 883 (8th Cir. 2006) (scheme

required repeatedly lying to victims, was maintained by using later-acquired funds to

make partial payments to earlier victims, required the use of multiple financial

accounts, and took place over almost five years); United States v. Finck, 407 F.3d

908, 915 (8th Cir. 2005) (scheme to obtain vehicles required obtaining multiple false

confirmations that money had been transferred and coordinating sale of multiple

vehicles in different states).

The government argued, in support of the enhancement, that the offense in this

case involved opening and closing over 20 bank accountsfor the purpose ofreceiving

fraudulent refunds; filing tax returns without a preparer name listed; filing tax returns

listing false addresses, “which made it difficult to verify information with the

victims”; using P.O. boxes to receive tax refunds and correspondence; and filing over

200 fraudulentreturns. See USSG § 2B1.1(b)(10)(C), Application Note 9(B); Hance,

501 F.3d at 910; Fiorito, 640 F.3d at 351; United States v. Huston, 744 F.3d 589, 592

(8th Cir. 2014). Tax fraud is generally a sophisticated offense, and any single one of

the aggravating factors here may not be sufficient to elevate the offense conduct

beyond the ordinary version of the offense. Moreover, we are not convinced that the

mere repetitive conduct as it played out in this particular case rendered it

sophisticated. But in combination, the multiple bank accounts, the use of multiple

P.O. boxes, the filing of returns with no preparer listed, and the filing of returns

listing false addresses demonstrates a carefully-considered attempt to conceal the

nature of the scheme, to make identifying its multiple perpetrators more difficult, and

to partially obscure the identity of the victims. See USSG § 2B1.1(b)(10)(C),

Application Note 9(B). This, combined with the fact that at least six people were

involved in executing the scheme and collectively managed to file more than 200

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fraudulent returns claiming over $1.7 million in refunds, makes the offense conduct

in this case “notablymore intricate” than the garden-variety conspiracy to defraud the

United States or false claim to the IRS. See Hance, 501 F.3d at 910. Accordingly, we

conclude that the district court did not err in applying the sophisticated means

sentencing enhancement to Brenda Laws.

The second sentencing enhancement Laws challenges is the 4-level organizer

or leader enhancement under USSG § 3B1.1(a). The organizer/leader enhancement

applies when the defendant was “an organizer or leader of a criminal activity that

involved five or more participants or was otherwise extensive.” USSG § 3B1.1(a)

(2013). In determining whether to apply the enhancement, the court 

should consider . . . the exercise of decision making authority, the nature

of participation in the commission of the offense, the recruitment of

accomplices, the claimed right to a larger share of the fruits of the crime,

the degree of participation in planning or organizing the offense, the

nature and scope of the illegal activity, and the degree of control and

authority exercised over others.

USSG § 3B1.1(a), Application Note 4. Though all these factors are relevant, the

primary requirement isthat the defendant “directed or procured the aid of underlings”

in committing the offense. United States v. Adejumo, 772 F.3d 513, 532 (8th Cir.

2014), cert. denied sub nom. Okeayainneh v. United States, 135 S. Ct. 1869 (2015)

(“[W]e have always required evidence that the defendant directed or procured the aid

of underlings.”) (quoting United States v. Irlmeier, 750 F.3d 759, 764 (8th Cir.

2014)).

In this case, there is insufficient evidence to show that Brenda Laws was an

organizer or leader. The only evidence in support of this conclusion is the fact that

Laws owned the house where the IRS searched and seized relevant evidence and was

the “owner and subscriber” for the internet access used to submit the fraudulent tax

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returns. There was no evidence that Laws planned the fraudulent scheme, organized

or directed her co-conspirators in carrying out the scheme, or otherwise controlled the

commission of the offense. The facts that Laws’ co-conspirators were her adult

children and that the offense was apparently committed in her home may give rise to

a generalsuspicion thatshe waslikely in control of the family’s conspiracy—but this

gut feeling is insufficient to support a conclusion, by a preponderance of the

evidence, that Laws was an organizer or leader of the offense for purposes of this

enhancement. While the district court found that Laws “exercised decision-making

authority over other participants,” neither the court nor the government identified any

specific evidence to support this conclusion. The evidence in the record is simply

insufficient to support a finding that Laws was an organizer or leader, and application

of this sentencing enhancement was erroneous.

Third and finally, Laws challenges the 4-level sentencing enhancement for an

offense involving 50 or more victims, under USSG § 2B1.1(b)(2)(B) (2013). For

purposes of the enhancement, a victim is defined as a person who “sustained any part

of the actual loss,” and actual loss means “the reasonably foreseeable pecuniary harm

thatresulted fromthe offense.” USSG § 2B1.1(b)(2)(B), Application Notes 1, 3(A)(i)

(2013). Taxpayers who have false tax returns filed in their name may be considered

victims of tax fraud—rather than unindicted co-conspirators, as Laws

urges —because they will be held responsible for the fraud until they can prove their

2

innocence and because the “adverse effect of battling the bureaucracy is a reasonably

foreseeable pecuniary harm.” United States v. Quevedo, 654 F.3d 819, 825 (8th Cir.

2011).

Such taxpayers who benefited from the fraudulent scheme may of course be

2

unindicted co-conspirators, rather than victims, but Laws has presented no evidence

that this was the case here.

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Here, the district court found that the government identified 245 people whose

names were used to submit fraudulent tax returns. All of those 245 people were

audited, many were required to spend time in interviews or filling out questionnaires

to prove that they were not responsible for the fraud, and any who received money to

which they were not entitled will lose future refund payments from the IRS. These

facts are sufficient to support the finding that Laws’ offense involved 50 or more

victims, and the district court did not err in applying the corresponding sentencing

enhancement.

A non-harmless procedural error in calculating the applicable Guidelines

sentencing range “requires a remand for resentencing.” United States v. Spikes, 543

F.3d 1021, 1023 (8th Cir. 2008) (citing United States v. Vickers, 528 F.3d 1116, 1120

(8th Cir. 2008)). Because the district court improperly imposed the organizer/leader

sentencing enhancement, increasing Brenda Laws’ total offense level by four levels,

we reverse and remand for resentencing.

II. Milton Laws

On the fourth day of trial, Milton Laws moved to suppress statements he made

to an IRS agent at his mother’s home, while a search of the home was being executed. 

Specifically, Laws asserted that he was handcuffed, and therefore in custody, at the

time he was interviewed by the IRS agent. After a hearing, which began that same

day, the district court granted Laws’ motion to suppress. Two days later, the

government moved for reconsideration and, at a second hearing, presented the

testimony of nine additional witnesses. After this hearing, the district court issued a

thorough written decision discussing the evidence presented and applying the

appropriate legal test to determine whether Laws was in custody at the time of his

interview. The district court found that while Laws had been handcuffed when his

pockets were searched, he was subsequently uncuffed and told that he was free to

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leave before he was interviewed by the IRS agent. The court concluded that Laws 3

had not been in custody at the time he made the statements and, this time, denied his

motion to suppress. Laws argues that the district court abused its discretion in

granting the government’s motion to reconsider, and clearly erred in finding that he

was not in custody when he made the statements to the IRS agent.

We review the district court’s decision to reconsider its ruling on the

suppression issue for abuse of discretion. United States v. Hayden, 759 F.3d 842, 845

(8th Cir.), cert. denied, 135 S. Ct. 691 (2014). The standard that the district court is

required to apply in making that decision, however, is not established in this circuit. 

See id. at 846. There are two basic standards in use in other circuits: while some

require the government to justify its failure to present relevant evidence at the original

suppression hearing, others have declined to impose a justification requirement and

have instead prioritized the introduction of lawfully obtained evidence. Compare

United States v. Allen, 573 F.3d 42, 53 (1st Cir. 2009); United States v. Kithcart, 218

F.3d 213, 219–20 (3d Cir. 2000); United States v. Dickerson, 166 F.3d 667, 678–79

(4th Cir. 1999), rev’d on other grounds, 530 U.S. 428 (2000); United States v.

Villabona-Garnica, 63 F.3d 1051, 1055 (11th Cir. 1995); McRae v. UnitedStates, 420

F.2d 1283, 1286–88 (D.C. Cir. 1969) with United States v. Rabb, 752 F.2d 1320,

1323 (9th Cir. 1984), abrogated on other grounds by Bourjaily v. United States, 483

U.S. 171, 181 (1987). Under either standard, we conclude that the district court did

not abuse its discretion in reopening the suppression issue.

The district court’s findings suggested that some of the confusion stemmed 3

from a difference in policy between the IRS, whose agent testified that use of

handcuffs was very uncommon during the execution of IRS search warrants, and the

PineBluff Police Department, who assisted in the execution ofthe warrant and whose

officer testified that use of handcuffs wastheir standard procedure in executing drugrelated warrants. For some reason, many of the police officers who assisted in the

execution of the warrant were officers from the Vice and Narcotics Unit.

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Laws’ initial motion to suppress was untimely, raised on the fourth day of trial. 

The initial suppression hearing began that same day, giving the government little or

no time to prepare its response to Laws’ allegations. The government filed its motion

to reconsider only two days after the court’s initial ruling, and cited specific evidence

bearing directly on the question of custody that had not been presented to the court

at the first hearing. A time period of two days to gather and interview nine witnesses,

while trial was ongoing, is not excessive, and the government may not reasonably

have been able to gather that evidence in the time between the filing of Laws’

suppression motion and the court’s ruling. Even under the more stringent standard,

the government provided sufficient justification for its failure to present all relevant

evidence at the first hearing on Laws’ belated motion to suppress. Under these

circumstances, the district court did not abuse its discretion in granting the

government’s motion to reconsider its prior ruling and reopen the suppression issue. 

Cf. United States v. Chavez Loya, 528 F.3d 546, 555 (8th Cir. 2008).

We now proceed to our substantive review of the court’s denial of Laws’

motion to suppress. We review the district court’s factual findings for clear error, and

its legal conclusions de novo. Chavez Loya, 528 F.3d at 552. Laws does not identify

any clear error in the factual findings underlying the district court’s ruling. In fact,

the court resolved the bulk of the disputed factual issues in Laws’ favor,

finding—contrary to the testimony presented by the government—that he wasin fact

handcuffed at some point during the execution of the search warrant. Rather, Laws

argues that the district court erred in concluding that, given the facts and

circumstances of his interview with the IRS agent, a reasonable person would not

have understood himself to be in custody.

“In determining whether a suspect is ‘in custody’ at a particular time we

examine the extent of the physical or psychological restraints placed on the suspect

during interrogation in light of whether a ‘reasonable person in the suspect’s position

would have understood his situation’ to be one of custody.” United States v. Griffin,

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922 F.2d 1343, 1347 (8th Cir. 1990) (quoting Berkemer v. McCarty, 468 U.S. 420,

442 (1984)). Indicia of custody include:

(1) whether the suspect was informed at the time of questioning that the

questioning was voluntary, that the suspect was free to leave or request

the officers to do so, or that the suspect was not considered under arrest;

(2) whether the suspect possessed unrestrained freedom of movement

during questioning; (3) whether the suspect initiated contact with

authorities or voluntarily acquiesced to official requests to respond to

questions; (4) whether strong arm tactics or deceptive stratagems were

employed during questioning; (5) whether the atmosphere of the

questioning was police dominated; or, (6) whether the suspect was

placed under arrest at the termination of the questioning.

Id. at 1349. The district court found that Laws had been handcuffed before his

interview, that he did not initiate the interview, that the atmosphere of the house was

dominated by law enforcement, and that the occupants of the house were not free to

move around without being accompanied by police. The district court also found that

Laws was not arrested at the end of the interview, and that the interview lasted only

ten minutes. Most importantly, the district court found that an IRS agent advised all

occupants of the house, including Laws, that they were free to leave after Laws was

uncuffed and before he made any statements to one of the agents.

Based on these factual findings, the district court did not err in finding that

Laws was not in custody when he made the statements he seeks to suppress. Though

here the second, third, and fifth Griffin factors weigh in favor of custody, an explicit

advisory that an individual is free to leave generally “weigh[s] heavily toward a

finding of non-custodial status.” United States v. Elzahabi, 557 F.3d 879, 884 (8th

Cir. 2009). Laws was handcuffed for a period of time before being told that he was

free to leave. He was not personally advised of his right to leave, but rather was

generally advised along with all other occupants of the house that they were free to

go. These factors make this a closer case for custody than those situations where a

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suspect is specifically, personally, and repeatedly advised of their right to end the

encounter with law enforcement. See id.; United States v. Czichray, 378 F.3d 822,

826 (8th Cir. 2004). Nevertheless, we have held more than once that an “explicit

assertion that the defendant may end the encounter . . . . generally removes any

custodial trappingsfromthe questioning.” Elzahabi, 557 F.3d at 884 (quoting United

States v. Ollie, 442 F.3d 1135, 1138 (8th Cir. 2006)). Here, the district court found

that Laws was so advised. The court’s finding was not clearly erroneous, and we

accordingly conclude that Milton Laws was not in custody at the time of his interview

with the IRS agent. The district court properly denied Laws’ motion to suppress.

III. Lareka Laws

Lareka Laws challengesthe district court’s denial of her motion for a judgment

of acquittal. She asserts that the government’s evidence was insufficient to establish

who in fact owned the real estate identified on the tax returns, or that the properties

could not properly qualify for the homebuyer tax credit. She also argues that the

government failed to prove that she had sufficient intent to defraud, or that any

fraudulent claims she made were material. We review the denial of a motion for

judgment of acquittal de novo. United States v. Ford, 726 F.3d 1028, 1033 (8th Cir.

2013), cert. denied, 135 S. Ct. 131 (2014) (citing United States v. Lewis, 557 F.3d

601, 612 (8th Cir. 2009)). When a motion for judgment of acquittal is based on

insufficiency of the evidence, we view all evidence in the light most favorable to the

verdict, accept all reasonable inferences in support of the verdict, and reverse only if

no reasonable jury could have found the defendant guilty beyond a reasonable doubt. 

Id.

We conclude that the evidence against Laws wassufficient to support the jury’s

guilty verdict. The evidence included more than 200 tax returns that improperly

claimed a first-time homebuyer tax credit, a significant number of which Laws

personally prepared; deposit of the credits into one of 17 accounts owned by a

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member of the Laws family, including two accounts owned or co-owned by Lareka

Laws; an admission by Laws that she had filed some of the relevant tax returns;

testimony that Laws knew that the individuals she was filing returns for were not

entitled to the homebuyer credit; and testimony that Laws had fabricated information

on the tax returns she filed. Viewing this evidence in the light most favorable to the

jury’s verdict and accepting all reasonable inferences in favor of the verdict, we

cannot say that no reasonable jury could have found Laws guilty beyond a reasonable

doubt. Though the jury could alternatively have accepted the arguments Laws

advances on appeal, it was not required to do so. See United States v. Hively, 437

F.3d 752, 761 (8th Cir. 2006). Because the evidence was sufficient to support a

verdict of guilty, the district court did not err in denying Laws’ motion for a judgment

of acquittal.

IV. Jameel Laws

Like Lareka Laws, Jameel Laws challenges the sufficiency of the evidence to

support his convictions for conspiracy to defraud the United States and for making

false claims to the IRS. Jameel Laws asserts that there was insufficient evidence of

an agreement to commit an illegal act, insufficient evidence of an unlawful objective

on his part, and insufficient evidence of an act done in furtherance of the alleged

conspiracy. We review the sufficiency of the evidence to support a conviction de

novo, viewing the evidence in the light most favorable to the jury’s verdict and

accepting all reasonable inferences in support of the verdict. United States v.

Armstrong, 782 F.3d 1028, 1035 (8th Cir. 2015).

The evidence against Laws included a tax return filed in his name and prepared

by his sister Lareka Laws claiming a first-time homebuyer credit; the deposit of the

associated tax refund into an account owned by Jameel Laws; testimony that Jameel

Laws had never purchased a home and did not qualify for the tax credit; evidence that

tax refunds of other individuals who received credits to which they were not entitled

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were deposited into bank accounts controlled by Jameel Laws; and evidence that

Jameel Laws had withdrawn the money deposited into these accounts. Viewing this

evidence in the light most favorable to the jury’s verdict and accepting all reasonable

inferencesin support of the verdict, we cannot conclude that no reasonable jury could

have found Laws guilty beyond a reasonable doubt. Armstrong, 782 F.3d at 1035. 

Based on the evidence presented, a reasonable jury could have found that Laws

knowingly presented a tax return falsely claiming a tax credit to which he was not

entitled, and that Laws conspired to defraud the United States by obtaining this

fraudulent credit. Accordingly, we conclude that the evidence was sufficient to

support Laws’ conviction.

V. Conclusion

For the foregoing reasons, we reverse the district court’s application of the

organizer/leader sentencing enhancement asto Brenda Laws and remand her case for

resentencing. We affirm the judgment of the district court in all other respects.

______________________________

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