Of the District of New Hampshire, sitting by designation. *

United States Court of Appeals

For the First Circuit

No. 07-1670

UNITED STATES,

Appellee,

v.

JOHN J. ANTHONY,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. D. Brock Hornby, U.S. District Judge]

Before

 Lipez and Howard, Circuit Judges,

and DiClerico, Jr., Senior District Judge. *

Robert E. Barnes, with whom The Bernhoft Law Firm, S.C. was

on brief, for appellant.

Margaret D. McGaughey, Appellate Chief, with whom Paula D.

Silsby, United States Attorney, was on brief, for appellee.

October 22, 2008
Specifically, the indictment charged that Anthony "willfully 1

attempted to evade and defeat the assessment of the income tax due and

owing to him" in the years 1999, 2000, 2001 and 2002. 

Matters relating to the 1998 return were not charged in the 2

indictment. 

-2-

HOWARD, Circuit Judge. A jury convicted John Anthony of

four counts of evading federal income tax, in violation of 26

U.S.C. § 7201. He raises several challenges to his conviction and 1

his sentence. We affirm. 

I. Facts

John J. Anthony had twenty-one years of service in the

United States Coast Guard. For many years he paid federal income

tax without incident. Beginning in 1998, however, that changed.

For the tax year 1998, Anthony and his spouse filed a joint return

on which zeros had been entered for income and tax owed. The

return also claimed a refund due of all tax withheld for that

year. Attached to the return was a three-page statement. The 2

Anthonys wrote that they did not believe they had a duty to pay

federal income tax or to file a return, but that they had filed the

return only because others had been -- wrongfully, in their eyes --

punished for failure to do so. The statement also explained the

basis for the Anthonys' belief that they did not have the duty to

pay federal income tax.

Anthony subsequently filed, with his employer and with

the Coast Guard, W-4 forms that claimed exemption from federal
The record reflects that the Anthonys had $1,603 withheld in 3

1999, $0 in 2000, $71 in 2001, and $70 in 2002.

Pursuant to an agreement with the government, Rebuck testified 4

at Anthony's trial.

-3-

income tax withholding on the basis that he would not be liable for

any federal income tax. The Anthonys also filed a zero return for 3

1999 and did not file returns at all for 2000, 2001 and 2002 until

2004, when they learned a criminal investigation had commenced. 

During this time, Anthony met Wayne Rebuck, who worked

for a company called Commonwealth Trust Company selling trusts and

internationally based corporations. Anthony purchased trusts and 4

corporations from Rebuck, and with his help opened a bank account

for one of these entities at the Federal Bank of the Middle East in

Cyprus. Over time, Anthony transferred most of his assets into

these entities, including his primary residence and funds he

withdrew early from his IRA. In all, $870,778 was wired to the

bank in Cyprus.

In 2004, Anthony emailed Rebuck, informing him that the

Anthonys were going to "take a compliance position approach" due to

the criminal investigations. In November of that year, Anthony

began to file his overdue returns and to pay what he owed.

Throughout this course of events, Anthony continued to

represent to the IRS that he did not believe he had a duty to pay

taxes. He asserted a belief, relying on language from Supreme

Court opinions published many years ago, that wages were not
-4-

taxable as income, since they represented an even exchange, rather

than a gain. He also believed, based on his analysis of the tax

code, that there was no statute levying a federal income tax on

individuals, except those individuals under exclusive federal

jurisdiction, which he took to mean those living in the District of

Columbia and in the territories of the United States.

Despite Anthony's "compliance position approach," and

despite his eventual payment of back taxes, he was indicted and

brought to trial in the District of Maine. A jury convicted

Anthony on all counts. He was sentenced to thirty-three months of

imprisonment, with a period of supervised release to follow. This

appeal from both the conviction and the sentence ensued. 

II. Discussion

Anthony was vigorously defended at trial and zealously

represented on appeal. He marshals a host of challenges to both

his conviction and sentence. First, he challenges on three fronts

the willful blindness instruction given to the jury. Second,

Anthony claims that evidentiary errors prejudiced him. And third,
We reject without further discussion Anthony's claim that the 5

district court compromised his defense by interrupting counsel during

closing argument. Our review of the record finds no impropriety, at

least on the part of the district court. We likewise find no merit

in the contention that the district court abused its discretion when

it refused to ask the venire particularized questions about jury

nullification of Anthony's good faith defense. This claim is based

on nothing more than the bare declaration of Anthony's counsel that

a "survey data report" -- known to counsel but never produced --

provided evidence that some in Maine might be reluctant to entertain

the defense.

-5-

he challenges his sentence. Unpersuaded by any of these claims, 5

we affirm. 

A. Willful Blindness

"A willful blindness instruction informs jurors that they

may impose criminal liability on people who, recognizing the

likelihood of wrongdoing, nonetheless consciously refuse to take

basic investigatory steps." United States v. Griffin, 524 F.3d 71,

77 n.4 (1st Cir. 2008) (citation and internal quotation marks

omitted). "'A willful blindness instruction is appropriate if (1)

a defendant claims a lack of knowledge, (2) the facts suggest a

conscious course of deliberate ignorance, and (3) the instruction,

taken as a whole, cannot be misunderstood as mandating an inference

of knowledge.'" Id. at 78 (quoting United States v. Coviello, 225

F.3d 54, 70 (1st Cir. 2000)).

Anthony argues that the district court's willful

blindness instruction was erroneous for three reasons. First, he

claims that after United States v. Cheek, 498 U.S. 192 (1991), the

heightened knowledge requirement in tax cases renders this
-6-

instruction all but forbidden in such cases. Second, he argues

that no such instruction should have been given because the facts

did not suggest a conscious course of deliberate ignorance, as the

government's evidence tended to show actual knowledge of the duty

rather than deliberate ignorance of it. And third, he attacks the

specific instruction given at his trial, claiming that it would

lead a jury to convict based on "reckless" ignorance rather than

deliberate ignorance. He is mistaken. 

We have not definitively resolved what standard of review

we apply to the district court's decision to give a willful

blindness instruction. United States v. Lizardo, 445 F.3d 73, 85

(1st Cir. 2006) ("[O]ur precedent is unclear."); see also United

States v. Heredia, 483 F.3d 913, 921 n.11 (9th Cir. 2007) (en banc)

(discussing circuit split on standard of review). This question

need not detain us. As was true in Lizardo, "[o]ur outcome is the

same whether we apply a de novo or deferential standard of review,

so we do not decide this issue today." Lizardo, 445 F.3d at 85. 

First, Anthony attacks the general propriety of willful

blindness instructions in the context of tax evasion. We have

recently upheld the use of a willful blindness instruction in a tax

case. Griffin, 524 F.3d at 78-79 (1st Cir. 2008). That

instruction concerned not whether the defendant was willfully blind

to a duty, but whether she was willfully blind to the falsity of

the statements on her tax returns. Nonetheless, the case is
More accurately, to convict Cheek, it appears that the jury would 6

have had to find beyond a reasonable doubt that Cheek did not have a

good-faith belief that he had no duty. 

-7-

instructive. Griffin argued, inter alia, "that willful blindness

instructions are per se unconstitutional in cases involving a

specific intent crime." Id. at 79. We dismissed this argument as

"merit[ing] little discussion." Id. at 79 n.6.

In tax cases, "the standard for the statutory willfulness

requirement is the voluntary, intentional violation of a known

legal duty." Cheek, 498 U.S. at 201 (internal quotation marks and

citation omitted). The government must prove "that the law imposed

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

that he voluntarily and intentionally violated that duty." Id. In

Cheek, the Court held that the district court had committed error

when it instructed the jury that Cheek's beliefs about the nontaxability of his wages were objectively unreasonable. "[I]f Cheek

asserted that he truly believed that the Internal Revenue Code did

not purport to treat wages as income, and the jury believed him,

the Government would not have carried its burden to prove

willfulness, however unreasonable a court might deem such a

belief." Id. at 202.

The Court, however, was careful to note that the jury

would still have to find that Cheek held a "good-faith belief" that

he had no duty to pay taxes. Id. at 203. While such a belief 6

need not be objectively reasonable, it must be one that is held in
-8-

good faith. Thus, the defense that the accused did not know of his

duty fails if he came by his ignorance through deliberate avoidance

of materials that would have apprised him of his duty, as such

avoidance undermines the claim of good faith. Other circuits share

our conclusion that Cheek does not foreclose the use of a willful

blindness instruction in tax-avoidance cases in general. See

United States v. Dean, 487 F.3d 840, 851 (11th Cir. 2007) (per

curiam) (willful blindness appropriate in post-Cheek tax evasion

case); United States v. Bussey, 942 F.2d 1241, 1249 (8th Cir. 1991)

(same); United States v. Bissel, 954 F. Supp. 903, 927 (D.N.J.

1997) ("[D]eliberate ignorance is a subjective state of mind that

may satisfy the element of willfulness." (internal quotation marks

and citation omitted)). Accordingly, because deliberate ignorance

of a duty to pay taxes is contrary to a good-faith belief, the

willful blindness instruction may be given in appropriate tax

evasion cases.

Anthony also claims the willful blindness instruction was

unwarranted in his particular case because the government did not

introduce evidence that would support a finding that he was

willfully blind to his duty. We have said that "[a]s long as

separate and distinct evidence supports a defendant's deliberate

avoidance of knowledge and the possibility exists that the jury

does not credit the evidence of direct knowledge, a willful

blindness instruction may be appropriate." United States v. Bilis,
Anthony takes too narrow a view of the "separate and distinct" 7

requirement, as there is always some overlap between the evidence that

a defendant knew a fact and the evidence that, if he did not know it,

he ought to have known it. See Bilis, 170 F.3d at 93 (finding no

error in willful blindness instruction because prevalence of drug

dealing at bar supported both claim that proprietor knew of the drugdealing and claim that if he did not know it was because he "purposely

contrived to avoid learning all of the facts"); see also Coviello, 225

F.3d at 70-71.

-9-

170 F.3d 88, 93 (1st Cir. 1999) (quoting United States v. Brandon,

17 F.3d 409, 452 n.74 (1st Cir. 1994)). Anthony asserts on appeal

that there was no "separate and distinct" evidence that supported

the claim he had willfully blinded himself to his duty to pay his

taxes. We do not agree.7

The government attempted to prove that Anthony actually

knew of his duty to pay taxes. It pointed to his previous payment

of taxes, his use of elaborate financial entities to conceal his

assets, his refusal to use other channels to challenge the IRS's

demands for payment, and his eventual payment when he learned of an

impending criminal investigation. Separate and distinct from this

body of evidence, there was evidence of his willful blindness.

Anthony testified that he based his view of his tax obligations on

old Supreme Court cases and old versions of the tax code. On

cross-examination, however, Anthony admitted he had not read more

recent cases (including Cheek) that address the subject, nor had he

consulted the current version of the tax code and regulations.

Based on this, the jury could reasonably infer that, even if

Anthony's claim that he did not know of his duty was credible, his
-10-

lack of knowledge depended on his deliberate refusal to extend his

research to more current, authoritative sources. In other words,

if Anthony did not know that the current law was that he had to pay

taxes, it was because he had willfully blinded himself to that

fact.

Finally, Anthony argues that even if an instruction were

warranted in his case, the instruction as given was fatally flawed.

He is mistaken.

Anthony claims that a willful blindness instruction must

contain an actual belief caveat. "An actual belief caveat informs

the jury that a showing of mistake, negligence, carelessness, or

recklessness could not support a finding of willfulness and that,

although knowledge may be inferred from willful blindness to the

existence of a fact, the jury must find the defendant had actual

knowledge." Griffin, 524 F.3d at 79 (internal quotation marks and

citation omitted). Anthony does not cite to any authority within

this circuit to support his contention that an actual belief caveat

must be given. See id. at 80 ("We have never required that willful

blindness instructions contain such a statement."). Instead, we

examine the jury instructions as whole to determine error. Id.

(citing United States v. Bailey, 405 F.3d 102, 110 (1st Cir.

2005)).

The district court instructed the jury as follows: "You

may not find that John Anthony acted willfully if you find that he
-11-

actually believed that he had no duty . . . ." Similarly, although

the district court did not specifically mention recklessness, it

did say, "Mere negligence or mistake . . . is not sufficient." See

Bilis, 170 F.3d at 92 (finding no error in an instruction that

omitted the word "recklessness"). The risk of the jury

instructions as a whole being materially misunderstood was minimal

and offers Anthony no basis for relief.

B. Evidentiary errors

Anthony argues that the district court abused its

discretion when it refused to admit into evidence legal materials

on which Anthony claimed to have relied in forming his good-faith

belief that he did not have a duty to pay taxes. Relying on Fed.

R. Evid. 403, the district court excluded the materials because the

risk of confusion substantially outweighed the probative value of

the evidence. "We accord district courts considerable latitude in

this exercise and review the exclusion of evidence under Rule 403

for abuse of discretion." Galarneau v. Merrill Lynch, Pierce,

Fenner & Smith Inc., 504 F.3d 189, 206 (1st Cir. 2007) (internal

quotation marks and citation omitted). In this case, the probative

value of the evidence was slight and the risk of confusion was

great. 

Anthony was permitted to read from and summarize the

disputed materials when he testified in order to explain what his

good-faith belief was, as well as how he had come to that belief.
-12-

We have noted that "testimony by the defendant as to what he was

told the decisions held" bears less of a risk of confusing the jury

on the law, and is in any event more probative of the subjective

belief of the defendant. United States v. Bonneau, 970 F.2d 929,

933 (1st Cir. 1992). And so it is here. The probative value of

the documents themselves was limited because Anthony's testimony

listing, summarizing and reading from these documents was more

probative of his beliefs. As the district court pointed out in

excluding the materials, Anthony was permitted to read extensively,

and no challenge was raised that the materials were not as Anthony

had read them. There was thus no reason to admit the materials to

supplement or corroborate Anthony's testimony.

At the same time, the risk of confusion in admitting

legal materials as evidence is high. We have noted that "courts

often exclude from evidence copies of statutes, constitutional

provisions, and decisions, which might invite the jury to

substitute its own view of the law." 970 F.2d at 932. "'In the

orderly trial of a case, the law is given to the jury by the court

and not introduced as evidence.'" Getty Petroleum Mktg., Inc. v.

Capital Terminal Co., 391 F.3d 312, 332 n.26 (1st Cir. 2004) (per

curiam) (Lipez, J., concurring) (quoting United States v.

Bernhardt, 642 F.2d 251, 253 (8th Cir. 1981)). This is because "it

would be most confusing to the jury to have legal material

introduced as evidence." Id. That is all the more true in this
-13-

case. First, many of the materials were old or outdated. But more

importantly, Anthony, by his own account, had relied on them in

forming a good-faith belief at odds with the law as given by the

district court. Anthony claims that his careful study of these

materials over a period of years was the basis for his belief that

the law was otherwise than the district court was instructing the

jury in this case. The risk of confusion in providing them to the

jury is virtually undeniable.

"The District Court retains considerable latitude even

with admittedly relevant evidence in rejecting that which is

cumulative, and in requiring that which is to be brought to the

jury's attention to be done so in a manner least likely to confuse

that body." Hamling v. United States, 418 U.S. 87, 127 (1974).

Here, the district court did not abuse its discretion when it ruled

that the slight probative value of these materials was

substantially outweighed by the confusion inherent in giving the

jury voluminous legal materials. See United States v. Sampson, 486

F.3d 13, 45 (1st Cir. 2007) ("Having supportably found that the

evidence was of limited probative value and that its introduction

would create a high risk of juror confusion, the district court had

ample reason to exclude it.").

Nor was there an abuse of discretion, contrary to

Anthony's contention, in the admission of evidence of payment

evasion in this assessment evasion case. The false W-4s and "zero
-14-

returns" may be used as evidence of either evasion of assessment or

evasion of payment, or both. United States v. Waldeck, 909 F.2d

555, 560 (1st Cir. 1990). Finally, evidence that Anthony was

shielding assets was probative of Anthony's knowledge of his duty

to pay the tax and was well within the district court's discretion

to admit for that purpose.

C. Sentencing Errors

Anthony raises four challenges to his sentence. None are

availing. We shall examine each briefly. In general, we review

the district court's construction of the Sentencing Guidelines de

novo, and the application of those Guidelines to the facts for

clear error. United States v. Stoupis, 530 F.3d 82, 84 (1st Cir.

2008). We review the sentence as a whole for reasonableness,

affording the district court broad discretion. United States v.

Ofray-Campos, 534 F.3d 1, 42 (1st Cir. 2008). "Assuming a

plausible explanation and a defensible overall result, sentencing

is the responsibility of the district court." Id. (quoting United

States v. Jimenez-Beltre, 440 F.3d 514, 519 (1st Cir. 2006) (en

banc)).

Anthony's first argument centers around the testimony of

a character witness, his pastor, who framed his comments as a plea

for mercy. Responding to this, in imposing sentence the district

court said that "there is not a basis for a federal judge to use

mercy." Anthony argues this is clear error, and that had the
-15-

district court properly understood its discretion to indulge in

mercy, it would likely have imposed a lower sentence. The

sentencing proceedings as a whole -- rather than this one statement

wrenched from context -- reveal that the district court was aware

of its discretion. The court did not mean the statement to

indicate a literal constraint, but rather as a response to those

who sought mercy for mercy's sake alone. Indeed, the district

court said in the next breath, "A federal judge is here to try to

impose a fair punishment." There was no error.

Second, Anthony argues, without citation, that the

district court erred in calculating the tax loss for Guidelines

calculation purposes. The district court ruled that the "penalty"

for early withdrawal of funds from an IRA is a tax, and as such

should be considered part of the total tax loss. The district

court explicitly grounded this ruling on the language of the

Guidelines; the IRS's practice of calling this payment a "penalty"

in some of its publications is not dispositive. In any case, the

statute itself calls this amount an "additional tax." 26 U.S.C. §

72(t). For the purposes of our review, that ends the matter.

Anthony next argues that the district court erred when it

applied a two-level enhancement for use of sophisticated means.

See U.S.S.G. §2T1.1. This enhancement was not improper. "Conduct

such as hiding assets or transactions, or both, through the use of

fictitious entities, corporate shells, or offshore financial bank
Anthony claims that the other sentences are short because tax 8

offenders generally repay what they owe, suffer disproportionately to

the loss they cause, and are easy to rehabilitate. But he cites no

authority for these propositions.

-16-

accounts ordinarily indicates sophisticated means." Id.,

application note 4. As the district court noted at sentencing,

trial evidence led to an inference that Anthony did exactly that.

There was no error.

Finally, Anthony argues that his within-Guidelines

sentence was unreasonable. He cites statistics that purport to

show that his sentence is longer than others convicted of similar

crimes. He also argues that he presents a very low risk of 8

recidivism, but that argument misses the point of the sentence. In

considering and ultimately rejecting Anthony's request for

imposition of a non-Guidelines sentence, the district court read

from the Introductory Commentary to the relevant Guidelines

section. This commentary emphasizes general deterrence and the

importance of cultivating respect for our tax system. The district

court also went through the sentencing factors enumerated in 18

U.S.C. § 3553(a), and supportably explained the sentence in this

case. We do not require more. Jimenez-Beltre, 440 F.3d at 519-20.

III. Conclusion

The conviction and sentence are affirmed.