Opinion ID: 3003170
Heading Depth: 3
Heading Rank: 2

Heading: sufficiency of the evidence

Text: Presbitero also argues that insufficient evidence supports the jury’s decision to find him guilty of violating 26 U.S.C. § 7206(1). A defendant seeking to reverse a conviction based on insufficient evidence faces a heavy burden, with our inquiry being whether “any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” United States v. Brandt, 546 F.3d 912, 915 (7th Cir. 2008) (quoting United States v. Farris, 532 F.3d 615, 618 (7th Cir. 2008)). Sufficient evidence supported Presbitero’s conviction. A conviction under section 7206(1) requires proof that: (1) a person made or subscribed to a federal tax return which he verified as true; (2) the return was false as to a material matter; (3) the defendant signed the return willfully and knowing it was false; and (4) the return contained a written declaration that it was made under the penalty of perjury. United States v. Peters, 153 F.3d 445, 461 (7th Cir. 1998). Presbitero contests the second and third requirements. “[A] false statement is ‘material’ when it has ‘the potential for hindering the IRS’s efforts to monitor and verify the tax liability’ of the corporation and the taxpayer.” Peters, 153 F.3d at 461 (quoting United States v. Greenberg, Nos. 07-1129, 07-1610, & 07-1712 13 735 F.2d 29, 32 (2d Cir. 1984)). “The focus of 7206(1) is clearly on the taxpayer’s intent.” Id. Presbitero maintains on appeal that the tax returns were not false as to a material matter because, he says, the deductions on the returns were for payments made to independent contractors. Payments to independent contractors, he points out, would not carry with them the tax obligations imposed upon a company when it pays employees. Presbitero never argued his independent contractor theory at trial, however, and instead repeatedly referred to the workers as employees. He also did not ask for a jury instruction on his current independent contractor theory. Alternative explanations are generally not enough to win a challenge to the sufficiency of the evidence. United States v. Humphreys, 468 F.3d 1051, 1054 (7th Cir. 2006). Here, there was plenty of evidence from which the jury could have concluded that Presbitero helped make up six purported subcontractors. Witnesses testified that drywall businesses did not operate out of the listed addresses and none of the entities ever filed a tax return. Presbitero’s own assistant made out the invoices that purportedly came from the six entities, on invoices that Presbitero had ordered himself. Taking millions of dollars in deductions for payments to subcontractors that did not exist would impede the IRS’s ability to determine the company’s tax liability. Moreover, if the jurors thought that the proceeds from the checks went to employees, taking deductions for payments to “subcontractors” meant that the company was not fulfilling the tax obligations it would have for employees. 14 Nos. 07-1129, 07-1610, & 07-1712 Even if the deductions were for payments to inde- pendent contractors, as he now asserts, Presbitero still signed false tax returns because the deductions at issue were taken for payments to subcontractors. The “purpose behind [section 7206(1)] is to prosecute those who intentionally falsify their tax returns regardless of the precise ultimate effect such falsification may have.” United States v. DiVarco, 484 F.2d 670, 673 (7th Cir. 1973). Therefore, it is not a defense to a charge of willfully and knowingly filing a fraudulent tax return that the amount fraudulently deducted could have been deducted for some other reason. United States v. Helmsley, 941 F.2d 71, 92-93 (2d Cir. 1991); United States v. Bliss, 735 F.2d 294, 301 (8th Cir. 1984). We also disagree with Presbitero’s contention that no rational jury could have found the drywall installers were employees instead of independent contractors. Velasquez hired and fired the workers, gave out the work assignments and schedules, and set the rate of pay. Foremen employed by PDC supervised the work at the site, and PDC purchased and provided the drywall. In addition, no worker received a Form 1099 from PDC. See Bennett v. Dep’t Employment Sec., 530 N.E.2d 541, 544 (Ill. App. Ct. 1988) (finding drywall installers were employees where plaintiff set wages, provided materials, imposed deadlines, and could discharge if work unsatisfactory). Also, from the testimony regarding a lack of seasonal fluctuation in the checks cashed at the currency exchange, the jury could have concluded that all the proceeds from the checks were not used to pay workers of any sort for installing drywall, meaning that costs were less than the sums reported on the returns as the indictment had alleged. Nos. 07-1129, 07-1610, & 07-1712 15 Presbitero also contests the sufficiency of the proof that he signed the return willfully and knowing that it was false. Again, he faces a steep uphill battle, as our only question is whether there was sufficient evidence to support the jury’s conclusion that he did. See Brandt, 546 F.3d at 915. As we discussed, the jury had plenty of evidence from which it could conclude that Presbitero, the owner of the company, went to great lengths to make it seem that his company was paying millions of dollars to subcontractors. That evidence bears on his knowledge of the falsity of the returns he signed that took deductions for subcontractors, as does the fact that he brought the canceled checks to his accountant specifically so that the accountant could prepare the company’s tax returns and other reports. Moreover, the jury heard that employee wages carry with them additional consequences that matter to the IRS, including withholding requirements and Social Security taxes. From all the evidence it heard, the jury could have believed that one reason Presbitero wanted to take deductions for “subcontractors” was to defraud the IRS and that doing so would have impeded the IRS had it attempted to look into his pay scheme. The jury therefore could have found that he signed the returns willfully and knowing that they were false, and sufficient evidence supported the jury’s verdict.