Opinion ID: 617707
Heading Depth: 2
Heading Rank: 2

Heading: Assertion of Good Faith

Text: Kokenis next argues that the district court erred in ruling that he could not assert a good-faith theory of defense unless he testified. He also claims that he was entitled to a jury instruction on good faith. We review the district court's determination of the proper legal standard and its refusal of a theory-of-defense instruction de novo, United States v. Martin, 618 F.3d 705, 735 (7th Cir.2010); United States v. Seals, 419 F.3d 600, 606 (7th Cir.2005). A defendant is entitled to an instruction on his theory of defense only if `(1) the instruction provides a correct statement of the law; (2) the theory of defense is supported by the evidence; (3) the theory of the defense is not part of the government's charge; and (4) the failure to include the instruction would deprive the defendant of a fair trial.' United States v. Campos, 541 F.3d 735, 744 (7th Cir.2008) (quoting United States v. Millet, 510 F.3d 668, 675 (7th Cir.2007)). A defendant only needs to demonstrate a foundation in evidence, `however tenuous,' to support his theory, but a `mere scintilla of evidence . . . is not sufficient to warrant a defense instruction.' United States v. Canady, 578 F.3d 665, 672-73 (7th Cir. 2009) (quoting United States v. Buchmeier, 255 F.3d 415, 427 (7th Cir.2001)). Viewing the instructions as a whole, a defendant is not entitled to a specific instruction if a jury was adequately instructed on [his] theory of defense. United States v. Reed, 539 F.3d 595, 599 (7th Cir.2008). The district court's rulings can be reasonably understood as requiring Kokenis to testify (and waive his Fifth Amendment rights) in order to assert good faith. For example, in ruling on the government's motion in limine to exclude certain statements under Rule 702, the court said: [I]n a criminal case the defendant has no obligation to introduce evidence. . . . When it comes, however, to [a] good faith defense of the kind that I understand to be asserted here, that is an obvious exception . . . because good faith . . . has to do with intent. The court added that Cheek v. United States, 498 U.S. 192, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991), taught that if somebody really had a subjective belief and it was an honest belief, that that could constitute a good faith defense. But by definition that is something that has to come from the defendant. And in denying the motion for a new trial, the court wrote that in order to advance . . . any assertion of a good faith defense and thus to bring Cheek into play, Kokenis had to take the stand, for no one else could demonstrate his good faith belief.  The court erred in thinking that evidence of Kokenis's state of mind had to come from Kokenis's own testimony. See, e.g., United States v. Lindo, 18 F.3d 353, 356 (6th Cir.1994) (`[T]he standard of evidence necessary to warrant a [good-faith reliance] instruction cannot include an absolute requirement that the taxpayer must testify, for that would burden the taxpayer's own Fifth Amendment right against self-incrimination.') (quoting United States v. Duncan, 850 F.2d 1104, 1115 n. 9 (6th Cir.1988)); United States v. Phillips, 217 F.2d 435, 442 (7th Cir.1954) (noting that evidence of defendant's good-faith reliance on advice of counsel can come from the government's witnesses or the defendant's witnesses). Although a defendant's own testimony might be the best evidence of that defendant's good faith, a defendant can offer evidence of good faith in other ways. For example, circumstantial evidence may tend to show good faith and hearsay statements of the defendant may suggest a defendant's belief. Nonetheless, Kokenis was not entitled to a good-faith instruction. First, the evidence did not support this theory of good faith. Kokenis's claim that the district court wouldn't allow him to present evidence of good faith unless he testified is wrong. He simply didn't offer any evidence relevant to his good faith. For example, Kokenis wanted to present evidence of the pool of capital theory and Delta Energy's obligations to landowners and working interest owners. He argues that this evidence would have provided a layer of credibility to [his] argument that he did not act willfully when he proposed to Mondero that the sales transactions not be reported as income[.] But Kokenis made no effort to tie such evidence to his state of mind. He offers nothing but speculation to suggest that he relied on such information in directing Mondero to change records and tax returns. Kokenis seems to be asserting that just because there may be evidence to show that someone could have had a good-faith belief that he wasn't violating the law, then he should be able to present such evidence to the jury. Not so. Without any connection to his state of mind, such evidence is irrelevant. Furthermore, as the government points out, the evidence of the pool of capital theory has no bearing on Kokenis's claims of personal expenses as business expenses. The government was required to prove only that he filed a return that he did not believe was true and correct to every material matter. United States v. Pansier, 576 F.3d 726, 736 (7th Cir.2009). Kokenis doesn't offer any explanation as to how claiming his personal expenses as business expenses could have comported with good faith. His suggestion that Mondero was responsible for the false statements regarding personal deductions and fraudulent documents such as the fake Santefort invoices and fallacious Rosin signature is absurd. Thus, a finding of good faith with respect to the sales transactions would not have precluded his convictions. Another reason Kokenis was not entitled to an instruction on good faith: the theory was already part of the charge. Willfulness is an essential element of the tax evasion offenses charged under 26 U.S.C. § 7206(1). United States v. Hills, 618 F.3d 619, 634, 638-39 (7th Cir.2010), cert. denied, ___ U.S. ___, 132 S.Ct. 130, ___ L.Ed.2d ___. The good-faith theory is essentially a claim that [the defendant] did not act willfully. United States v. Brimberry, 961 F.2d 1286, 1291 (7th Cir. 1992) (quotation omitted); see also Cheek, 498 U.S. at 202, 111 S.Ct. 604 (government's burden of proving willfulness requires negating a defendant's claim of ignorance of the law or a claim that because of a misunderstanding of the law, he had a good-faith belief that he was not violating any law). The district court properly instructed the jury on the elements of the offenses under § 7206(1), including that the government had to prove that when defendant made and signed the tax return he did so willfully and didn't believe that the tax return was true, correct and complete as to every material matter. The court properly defined willfully as the voluntary and intentional violation of a known legal duty or the purposeful omission to do what the law requires. The court further instructed that defendant acted willfully if he knew it was his legal duty to file truthful income tax returns and he intentionally filed false returns. We note, too, that the court also instructed the jury that the government had the burden of proving the propositions (elements) beyond a reasonable doubt and that the burden of proof stays with the government throughout the case. The district court's instructions on willfulness necessarily encompassed the defense theory of good faith. See Brimberry, 961 F.2d at 1291; see also United States v. Pomponio, 429 U.S. 10, 13, 97 S.Ct. 22, 50 L.Ed.2d 12 (1976) (per curiam) (The trial judge . . . adequately instructed the jury on willfulness. An additional instruction on good faith was unnecessary.). The jury could not find both that Kokenis acted willfully as defined in the instructions and that he acted in good faith. See United States v. Koster, 163 F.3d 1008, 1012 (7th Cir.1998) ([T]he jury could not have found that [the defendant] knowingly committed mail fraud and/or knowingly made false statements . . . and yet simultaneously have found that [he] acted in good faith. . . . Accordingly, [his] theory of defense was already part of the . . . charge.). Thus the district court did not err in refusing to give Kokenis's good-faith instruction. Moreover, the district court's mis-impression that Kokenis could not assert good faith unless he himself testified was harmless because it did not affect his substantial rights. Fed.R.Crim.P. 52(a). The evidence of his guilt, especially the phony documentation of personal deductions, was overwhelming. The good-faith argument was directed only to the income side of the false tax returns, not to the deduction of personal expenses. On the record before us, the district court's error did not affect Kokenis's substantial rights and does not require remand. See United States v. Benabe, 654 F.3d 753, 772 (7th Cir.2011) (Rule 52(a) means what it says: `Any error, defect, irregularity, or variance that does not affect substantial rights must be disregarded.').