Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-14-03515/USCOURTS-ca7-14-03515-0/pdf.json

Parties Involved:
Eugene Clarke
Appellant
United States of America
Appellee

Document Text:

In the

United States Court of Appeals

For the Seventh Circuit

No. 14-3515

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

EUGENE CLARKE, also known as

Imhotep Bey, also known as Eugene

Clark, Jr.,

Defendant-Appellant.

Appeal from the United States District Court for the 

Northern District of Indiana, Hammond Division.

No. 2:13-cr-00139-RL-JEM-1 — Rudy Lozano, Judge.

ARGUED MAY 28, 2015 — DECIDED SEPTEMBER 8, 2015

Before BAUER, EASTERBROOK, and RIPPLE, Circuit Judges.

BAUER, Circuit Judge. On June 2 and 3, 2014, defendantappellant, Eugene Clarke, stood trial for seven counts of filing

a false claim with the United States in violation of 18 U.S.C.

§ 287. At the close of the government’s evidence, Clarke moved

for judgment of acquittal under Federal Rule of Criminal

Procedure 29, arguing that the government failed to present

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any evidence that he knew the claims he presented were false.

The district court denied the motion. Clarke also requested a

jury instruction on good faith, which the district court also

denied. The jury ultimately convicted him on all counts. Clarke

now appeals his conviction, as well as the district court’s ruling

on the jury instruction.

I. BACKGROUND

InAugust 2009, Clarke submitted federal tax returns for the

“Eugene Clarke Trust” for tax years 2006, 2007, and 2008. Each

return claimed that the trust had received $900,000 in income

and expended $900,000 in fiduciary fees, but did not identify

a particular source for the income. Each return further reported

that $300,000 of federal tax had been withheld and paid over

to the Internal Revenue Service (“IRS”), and each therefore

requested $300,000 in refunds. Clarke identified the trust’s

fiduciary as “Timothy F. Geither” (an apparent misspelling of

the name of then-Secretary of the Treasury, Timothy Geithner),

which raised a red flag at the IRS regarding the legitimacy

of the returns. As a result, the IRS notified Clarke that the

returns were considered frivolous and would not be processed.

Undeterred, Clarke resubmitted the returns for years 2006,

2007, and 2008 in December 2009. The returns again asked that

the “Eugene Clarke Trust” be refunded $300,000 for each year,

but did not name “Geither” as the fiduciary of the trust.

Astonishingly, the IRS processed all three returns and mailed

Clarke three $300,000 checks on January 5, 2010.

Four days after receiving the checks, Clarke attempted to

cash one of them at PLS Check Cashers in Gary, Indiana.

Suspicious of the validity of the check, district manager

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No. 14-3515 3

Stephen Eyabi questioned Clarke about how he obtained it.

Clarke explained that the check was given to him out of a trust

fund from his deceased father. Eyabi then gave Clarke a partial

payment of $2,500 with the understanding that Clarke would

receive the remaining amount after the check cleared (less the

5-10% check cashing fee). 

Before the check cleared, Clarke returned the $2,500 and

took the check back. On January 12, 2010, Clarke opened a

bank account with Harris Bank and deposited one of the

$300,000 checks. He deposited the second check into the

account on January 13, 2010, and the third on February 24,

2010. Within months of depositing the checks, Clarke spent all

of the funds.

It was not until 2013 that Clarke was indicted in connection

with the three fraudulent refunds. On November 21, 2013,

Clarke was charged with a total of seven counts of presenting

false claims to the United States through the IRS.

Clarke pleaded not guilty to the charges against him and

the case proceeded to trial. The government put on three

witnesses. Kristy Morgan, a Court Witness Coordinatorfor the

IRS, testified regarding the IRS’s process for examining tax

returns. She also testified that whoever signed a tax return

form was declaring that the return contained information that

was true and correct. Gerard Hatagan, a Revenue Agent for the

IRS, testified that although a trust could be drawn up and not

funded, as was Clarke’s alleged fund, Clarke’s return lacked

some degree of economic reality. Lastly, Stephen Eyabi, the

district manager of the check cashing company where Clarke

tried to cash his first $300,000 check, testified that Clarke told

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him that he came to possess the check because of “a trust fund

because his dad had passed.”

At the close of the government’s evidence, Clarke moved

for acquittal pursuant to Rule 29, arguing that the government

had not proven one of the elements of the offense—that the

defendant knew the claim was false. The district court denied

Clarke’s motion for acquittal, on the ground that there was

sufficient evidence from which a jury could reasonably find

Clarke guilty on all counts.

After the parties rested, the district court distributed the

proposed jury instructions, which did not include a good faith

instruction that Clarke had requested prior to trial. Objecting 1

to the omission, Clarke argued that the instruction complemented the instruction on the elements of an 18 U.S.C. § 287

offense. When asked whether he presented any evidence of

good faith, Clarke responded that it was the government’s

burden to prove there was no good faith. The government

disagreedandargued that the good faith instruction submitted

related to willfulness, which is not an element of a § 287

offense. The district court denied the instruction and gave the

following instruction instead:

A person acts knowingly if he realizes what he is

doing and is aware of the nature of his conduct, and

 Clarke had argued that the instruction was appropriate because he had 1

a good faith belief that the government owed him the money he received.

Though barred from trial pursuant to the government’s motion in limine,

a pretrial psychiatric report explained that Clarke was of the belief that the

United States is a business front designed to regulate commerce and has

established bank accounts in the names of its citizens. 

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does not act throughignorance, mistake, or accident.

In deciding whether the defendant acted knowingly,

you may consider all of the evidence, including

what the defendant did or said.

Thereafter, the jury convicted Clarke on all counts.

II. DISCUSSION

Clarke raises two challenges on appeal. First, he argues that

the district court erred in denying his motion for judgment of

acquittal because the government failed to present any

evidence of an essential element of the charges against him.

Second, he argues that the district court erred in rejecting his

good faith jury instruction. We review each argument in turn. 

A. Sufficiency of the Evidence

Clarke first argues that the district court erred when it

denied his motion for judgment of acquittal. We review a

district court’s decision to deny a motion for judgment of

acquittal de novo. United States v. Westerfield, 714 F.3d 480, 484

(7th Cir. 2013). “In considering challenges to the sufficiency of

the evidence, we ‘view the evidence in the light most favorable

to the prosecution,’ and then ‘ask whether any rational trier of

fact could have found the essential elements of a crime beyond

a reasonable doubt.’” United States v. Foley, 740 F.3d 1079,

1082–83 (7th Cir. 2014) (quoting United States v. Boender, 649

F.3d 650, 654 (7th Cir. 2011)). We will overturn a guilty verdict

only if the record is devoid of evidence from which a reasonable jury could find guilt beyond a reasonable doubt. United

States v. Groves, 470 F.3d 311, 323 (7th Cir. 2006). 

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The indictment charged Clarke with violating 18 U.S.C.

§ 287. The statute provides in pertinent part: 

Whoever makes or presents to any person or

officer in the ... service of the United States, or

to any department or agency thereof, any claim

upon or against the United States, or any department or agency thereof, knowing such claim to

be false, fictitious, orfraudulent, shall be imprisoned not more than five years and shall be

subject to a fine ... . 

Thus, to convict Clarke, the government bore the burden of

proving that (1) Clarke presented claims to the IRS; (2) those

claims were false, fictitious, orfraudulent, and (3) Clarke knew

the claims were false, fictitious, or fraudulent. See United States

v. Haddon, 927 F.2d 942, 950–51 (7th Cir. 1991). 

Only the third element is in dispute. According to Clarke,

the government did not prove that he knew his claim was false

because it failed to put forth evidence that Clarke willfully

presented false claims. Clarke claims that he had a good faith

belief that the money he requested from the IRS belonged to

him, and without evidence of willfulness negating that belief,

the government cannot meet its burden of proof. 

Contrary to Clarke’s contention, the government need not

prove willfulness in a § 287 case. United States v. Catton, 89 F.3d

387, 392 (7th Cir. 1996); see also United States v. Ferguson, 793

F.2d 828, 831 (7th Cir. 1986). In Catton, we stated “[i]t is implicit

in the filing of a knowingly false claim that the claimant

intends to defraud the government, and hence unnecessary to

charge willfulness separately.” 89 F.3d at 392. The government

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need only prove that Clarke made a claim upon the United

States knowing that the claim was false. Ferguson, 793 F.2d at

831. 

The government has presented sufficient proof that Clarke

knew his claims were false; Clarke’s tax returns demonstrate

that knowledge on their face. The returns listed $900,000 in

income, without identifying how this income was obtained.

The fiduciary fees listed on the returns were also in the amount

of $900,000, but with no explanation for why a fiduciary, in

this case “Timothy F. Geither,” would take such a fee. Finally,

the returns claimed withholding of $300,000, but no such funds

were ever withheld. We have held before that “patently false

and utterly groundless” tax return forms were sufficient to

demonstrate the defendant’s knowledge of the falsity of her

claims in violation of 18 U.S.C. § 287. Ferguson, 793 F.2d at 831.

In Ferguson, the defendant filed several forms to the IRS

seeking tax refunds for taxes she paid, as well as taxes withheld by her employer. 793 F.2d at 831. We concluded that the

“forms on their face demonstrate [the defendant’s] knowledge

of the falsity of her claims,” where the name on one form

reflected her efforts to gain a refund through her baseless

interpretation of tax laws and where some of the forms

reflected a refund for a tax that the defendant was never

required to pay. Id. Clarke’s claims are similarly groundless.

Because the information on Clarke’s tax returns was “patently

false and utterly groundless, id., Clarke’s forms provide

sufficient evidence for a jury to conclude Clarke knew the

falsity of his claims.

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B. Jury Instruction

Clarke also contends that the district court erred in declining to give his proposed good faith jury instruction. We review

a district court’s refusal to give a jury instruction for an abuse

of discretion. United States v. Morris, 576 F.3d 661 (7th Cir.

2009). 

A good faith theory is “essentially a claim that the defendant did not act willfully.” United States v. Kokenis, 662 F.3d

919, 930 (7th Cir. 2011) (citations omitted). An instruction on

such a theory is therefore unnecessary where willfulness is not

an element of the offense charged. As discussed above,

willfulness is not an element of a § 287 claim. See Catton, 89

F.3d at 392; Ferguson, 793 F.2d at 831. Therefore, Clarke was not

entitled to an instruction on good faith and the district court

did not abuse its discretion in denying it.

III. CONCLUSION

Forthe aforementioned reasons, we AFFIRM the judgment

of the district court and Clarke’s conviction.

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