IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF INDIANA

HAMMOND DIVISION

UNITED STATES OF AMERICA, )

)

Plaintiff, )

)

vs. ) NO. 2:13-cr-81

) 

STEVEN BORCHERT, )

)

Defendant. )

OPINION AND ORDER

This matter is before the Court on the Motion for Acquittal,

filed by pro se Defendant, Steven Borchert, on January 24, 2014 (DE

#61). For the reasons set forth below, the Motion for Acquittal

(DE #61), is DENIED.

BACKGROUND

During trial, after the close of the Government’s case, the

Defendant orally made a motion for judgment of acquittal pursuant

to Federal Rule of Criminal Procedure 29(a). This Court denied the

motion for acquittal. (DE #54.) 

On January 13, 2014, a jury verdict was returned against

Borchert, finding him guilty of Counts 1-9 of the Indictment for

making and subscribing a false document with the IRS, in violation

of 26 U.S.C. § 7206(1).
Defendant timely filed the instant Motion for Acquittal on

January 24, 2014, the Government filed a response on February 18,

2014 (DE #65), and Defendant filed a reply on February 28, 2014 (DE

#67). Thus, the motion is fully briefed and ripe for adjudication.

DISCUSSION

Federal Rule of Criminal Procedure 29(c) provides that a

defendant may renew a motion for judgment of acquittal after a

guilty verdict, and “the court may set aside the verdict and enter

an acquittal.” Fed. R. Crim. P. 29(c)(1), (2). Thus, Borchert may

renew his motion even though this Court already denied a previous

motion (made during trial at the end of the Government’s case). In

ruling on a motion for acquittal, the Court must determine whether,

at the time of the motion, there is relevant evidence from which a

jury could reasonably find the defendant guilty beyond a reasonable

doubt, viewing the evidence in the light most favorable to the

Government. See United States v. Studley, 892 F.2d 518, 526 (7th

Cir. 1989). The Court must “bear in mind that it is the exclusive

function of the jury to determine the credibility of witnesses,

resolve evidentiary conflicts and draw reasonable inferences.” 

United States v. Hagan, 913 F.2d 1278, 1281 (7th Cir. 1990)

(quotation omitted). The inference of guilt of a criminal offense

may be created by either direct or circumstantial evidence, and

circumstantial evidence is of equal probative value to direct

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evidence. Studley, 892 F.2d at 526. All reasonable inferences

that can be drawn from the evidence are viewed in the light most

favorable to the Government. Id. In other words, a motion for

judgment of acquittal must be granted when the evidence, viewed in

the light most favorable to the government, is so scant that the

jury could only speculate as to the defendant’s guilt, and is such

that a reasonably-minded jury must have a reasonable doubt as to

the defendant’s guilt. See United States v. Heberman, 583 F.2d

222, 231 (5th Cir. 1978).

Defendant states the basis for his Motion for Acquittal, in

pertinent part, as follows:

1. I believe the jury did not understand the willfulness

element of this crime.

2. I believe the jury did not understand that I owe no tax. 

The government never established any item to be false on

my returns. The assessment procedure must be followed to

create an assessment and therefore establish a tax loss. 

When no assessment is created, there is no tax loss. 

There is no assessment.

3. I believe the jury did not understand that my tax returns

agree with the IRS’s records. 

4. The executive branch of the government seeks a judicial

bypass to the treasury regulations required for

assessment.

(DE #61, pp 1-2.) Instead of being a true challenge to the

sufficiency of the evidence, which is the essence of a motion for

acquittal, Borchert criticizes the jury’s understanding and

interpretation of evidence. This is procedurally improper. 

Borchert also argues that because he could not show that the IRS

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never assessed him, the jury did not understand the wilfulness

element of his offense. (DE #61, pp. 3-4.) However, this is an

evidentiary challenge, not a claim of insufficient evidence. He

also claims the Government used the judiciary to bypass treasury

regulations. Again, this is not a proper argument made pursuant to

Rule 29. 

Aside from the procedural flaws in Borchert’s motion, the

Government presented sufficient, relevant evidence from which a

jury could reasonably find the defendant was guilty beyond a

reasonable doubt. As this Court recited in its jury instructions, 

in order to find the defendant guilty on each of the charges, the

Government had to prove each of the following elements beyond a

reasonable doubt: (1) the defendant prepared a Form 1040; (2) the

Form 1040 was false as to a material matter, as charged in the

Count; (3) the defendant signed the Form 1040, which contained a

written declaration that it was made under penalties of perjury;

(4) the defendant acted willfully, that is, he knew that he had a

legal duty to file a truthful and complete Form 1040, but when he

signed the Form 1040, he did not believe that it was truthful or

complete as to a material matter; and (5) the defendant filed the

Form 1040 with the Internal Revenue Service. (DE #58, Court’s

Instruction No. 21; see also United States v. Powell, 576 F.3d 482,

495 (7th Cir. 2009) (discussing required proof for conviction under

section 7206(1).). 

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At trial, the Government showed that Borchert prepared and

signed each Form 1040 under penalty of perjury; that each form was

filed with the IRS, that Borchert knew each form was false because

he omitted his business’ gross receipts and sales figures, and the

false statements were material. Regarding willfulness, in Cheek v.

United States, 498 U.S. 192, 201 (1991), the Supreme Court held

that “[w]illfulness, as construed by our prior decisions in

criminal tax cases, requires the government to prove that the law

imposed a duty on the defendant, that defendant knew of this duty,

and that he voluntarily and intentionally violated that duty.” As

summed up by the Government in its response to the motion for

acquittal (DE #65), both direct and circumstantial evidence was

presented to the jury of Borchert’s wilfullness, including:

Borchert previously filed income tax returns listing the business’

gross receipts and sales figures; (2) Borchert stopped filing

income tax returns for a period of years; (3) the federal court and

IRS told Borchert that his arguments were incorrect; (4) in late

2007, Borchert changed his banking activities and diverted customer

receipts from his back accounts; (5) in January 2008, he considered

moving his banking activities to the Cayman Islands; (6) Borchert

paid his employees in cash; and (7) he did not keep expense

records. The Court again finds that this evidence is sufficient to

show Borchert willfully filed materially false tax returns. See,

e.g., United States v. Grumka, 728 F.2d 794, 797 (6th Cir. 1984)

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(circumstantial evidence plus defendant’s prior tax-paying history

and advice concerning the need to file proper tax returns

constitutes evidence of willfulness). 

Borchert also argues that because he was not assessed by the

IRS, there was no tax loss. However, tax loss is not an element of

the crime under 26 U.S.C. § 7206(1). See, e.g., Boulware v. United

States, 552 U.S. 421, 432 n.9 (2008) (noting Courts of Appeals

unanimously hold that § 7206(1) does not require proof of tax

deficiency); United States v. Presbitero, 569 F.3d 691, 699 (7th

Cir. 2009) (government not required to show actual tax deficiency

in § 7206(1) prosecution); Pattern Crim. Jury Instr. 7th Cir. 26

U.S.C. § 7206(1) (2012) Committee Comment (“A charge of filing a

false tax return does not, unlike a charge of evasion, require

proof of a tax deficiency.”). Because it is not an element of the

crime, the Government did not need to show that the IRS formally

assessed Borchert. 

CONCLUSION

For the aforementioned reasons, the Motion for Acquittal (DE

#61), is DENIED.

DATED: March 17, 2014 /s/ RUDY LOZANO, Judge

United States District Court

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