Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca4-06-04703/USCOURTS-ca4-06-04703-0/pdf.json

Parties Involved:
United States of America
Appellee
Charles E. Vaughn
Appellant

Document Text:

UNPUBLISHED
 

UNITED STATES COURT OF APPEALS
 

FOR THE FOURTH CIRCUIT
 

No. 06-4703 

UNITED STATES OF AMERICA,
 

Plaintiff - Appellee, 

versus 

CHARLES E. VAUGHN, 

Defendant - Appellant. 

Appeal from the 

District of West 

District Judge. 

United States District 

virginia, at Elkins. 

(2:04-cr-00014-IMK-JS) 

Court 

Irene 

for the Northern 

M. Keeley, Chief 

Submitted: October 17, 2007 Decided: November 15, 2007
 

Before NIEMEYER, KING, and DUNCAN, Circuit Judges.
 

Affirmed by unpublished per curiam opinion.
 

Joel F. Hansen, HANSEN & HANSEN, L.L.C., Las Vegas, Nevada, for
 

Appellant. Sharon L. Potter, United States Attorney, Robert H. 

McWilliams, Jr., Sherry L. Muncy, Assistant United States 

Attorneys, Wheeling, West virginia, for Appellee. 

Unpublished opinions are not binding precedent in this circuit. 

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PER CURIAM: 

Charles E. Vaughn was convicted by a jury of criminal tax 

evasion, 26 U.S.C. § 7201 (2000), and sentenced to fifty-one months 

imprisonment. He appeals, claiming that the district court denied 

him the opportunity to present a "good faith" defense and the right 

to challenge the accuracy of the underlying deficiency. He also 

challenges the district court's ruling that a formal assessment is 

not an element of tax evasion. Finally, Vaughn alleges that the 

prosecution engaged in overreaching and misconduct by indicting or 

threatening to indict two defense witnesses. For the reasons that 

follow, we affirm. 

After reaching a settlement with the Internal Revenue 

Service in tax court, Vaughn owes approximately $30,248.00 in 

federal incomes taxes for the 1993 tax year. Shortly after 

agreeing to settle, Vaughn submitted an offer in compromise, 

offering to settle his outstanding tax liability for $400. On the 

accompanying form Vaughn listed two businesses he had previously 

operated, his income as "commission," and one bank account 

containing $125. He also wrote "NA" on the question regarding 

ownership or interest in any type of real property, and answered 

"No" to the question asking if he was a participant or beneficiary 

of any trust, estate, or profit sharing venture. 

Vaughn was subsequently indicted for willfully attempting 

to evade payment of his income tax when it was discovered that he 

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had substantial assets he had failed to disclose to the IRS. At 

trial, the Government introduced evidence establishing that, 

beginning in 1999, Vaughn had transferred his income and assets to 

two companies ("Lifestyles, LLC," and "Falcon Asset Management 

Company"), neither of which were disclosed on the forms submitted 

to the IRS, and which had a combined net worth of $332,013. 

Between April 1999 and October 2004, Vaughn received a total of 

$588,759 in cash on sales of real property through Lifestyles, LLC. 

From 1999 through 2002, $314,607.77 of Vaughn's personal living 

expenses were paid by the two companies he fully owned. At the 

time of trial, Vaughn, through his companies, controlled at least 

eight properties, three of which were on the market for a total of 

$950,000. Finally, the government introduced evidence to show 

that, contrary to the $125 that Vaughn claimed he had in the bank, 

the companies he controlled had accounts containing approximately 

$32,000 in cash. Based on this evidence, the jury found Vaughn 

guilty. The district court sentenced him to fifty-one months 

imprisonment. Vaughn timely appeals. 

Vaughn argues, first, that the district court denied him 

the ability to present his good fai th defense. Vaughn's "good 

faith" argument rested on his assertion that the underlying tax 

court decision was inaccurate. Our review of the record discloses 

that the district court did allow defense counsel to introduce 

evidence concerning Vaughn's audit history and to argue the facts 

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about those audits in his closing argument in order to attack the 

willfulness element. Moreover, Vaughn testified extensively and 

was allowed to explain his doubts as to his liability for the tax 

at issue. Although he argues that he was nevertheless prevented 

from introducing evidence with respect to his good faith defense, 

Vaughn failed to identify what specific evidence was allegedly 

improperly excluded nor did he make a proffer in the district court 

after given the opportunity to do so. 

Next, Vaughn argues that the district court erred in 

preventing him from attacking the "accuracy" of the tax court 

decision. The tax court's decision was based on the agreement of 

the parties. We agree with the district court that Vaughn may not 

challenge that decision in a later criminal proceeding. 

Vaughn also argues that the district court erred in 

ruling that a valid assessment is not a necessary element of 

criminal tax evasion. Section 7201 states that "any person who 

willfully attempts in any manner to evade or defeat any tax imposed 

by this title or the payment thereof shall, in addition to other 

penalties provided by law, be guilty of a felony." 26 U.S.C. 

§ 7201. The statute does not limit its application to taxes that 

have been assessed. Here, the district court properly instructed 

the jury that, to find Vaughn guilty of tax evasion, the government 

was required to prove three elements beyond a reasonable doubt: 

(1) that Vaughn owed a substantial income tax liability; (2) that 

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he attempted in any manner to evade or defeat the paYment of that 

tax; and (3) that he did so willfully. united States v. Wilkins, 

385 F.2d 465, 472 (4th Cir. 1967). Because a formal assessment is 

not required to prove tax evasion, see, ~, United States v. 

Silkman, 156 F.3d 833, 835 (8th Cir.1998), the district court 

properly ruled that the Government did not need to prove that a 

valid assessment had been issued. 

Finally, Vaughn asserts that he was "denied any wi tnesses 

to support his defense" because, on the day before trial, the 

prosecution informed him that one of his witnesses was about to be 

indicted. That witness, Booker Walton, then invoked his Fifth 

Amendment privilege and refused to testify on Vaughn's behalf. 

Vaughn argues that the district court erred in refusing to grant 

him immunity. 

A district court is without authority to confer immunity 

on a witness sua sponte. See United States v. Klauber, 611 F.2d 

512, 517 (4th Cir. 1979). Rather, the decision of whether to grant 

immunity is within the sole discretion of the prosecution. See, 

~, 18 U.S.C. § 6003(b) ("A United States attorney may, with 

approval of the Attorney General request an order [of 

immunity from the district court] ."); United States v. Karas, 624 

F.2d 500, 505 (4th Cir. 1980). While a district court may, in very 

limited circumstances, compel the prosecution to grant such 

immunity, a "'defendant bears a heavy burden when seeking to have 

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the district court compel the grant of immuni ty. ' II United 

States v. Mitchell, 886 F.2d 667, 669 (4th Cir. 1989) (quoting 

United States v. Gravely, 840 F.2d 1156, 1160 (4th Cir. 1988)). 

This court has held that ~a district court is without authority to 

issue such an order unless a defendant has made (1) 'a decisive 

showing of prosecutorial misconduct or overreaching and (2) the 

proffered evidence would be material, exculpatory and unavailable 

from all other sources. '11 United States v. Washington, 398 F.3d 

306 (4th Cir. 2005) (quoting United States v. Abbas, 74 F.3d 506, 

512 (4th Cir. 1996)). We agree with the district court's 

conclusion that Vaughn failed to make the requisite showing. 

We therefore affirm Vaughn's conviction. We dispense 

with oral argument because the facts and legal contentions are 

adequately presented in the materials before the court and argument 

would not aid the decisional process. 

AFFIRMED 

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