Opinion ID: 601431
Heading Depth: 1
Heading Rank: 5

Heading: claim of insufficiency of the evidence

Text: 85 The narrow focus of appellant's contentions here is that there was insufficient evidence that he had the required criminal intent, one of the elements of each of the crimes for which he has been convicted. 86 Appellant argues his lack of education (only high school) and that he relied entirely upon the advice of tax professionals, both attorneys and accountants, to guide him in this complex area of the tax law. He contends that he did not conceal any information from the accountants or tax attorneys who helped him set up the shelters. 87 On review of a claim of insufficient evidence the appellate court must determine whether a rational jury, viewing the evidence in the light most favorable to the government, could have found the defendant guilty beyond a reasonable doubt. United States v. Boure, 892 F.2d, 1494, 1497 (10th Cir.1990). After a careful review of the evidence the court concludes that a rational jury could find the defendant guilty beyond a reasonable doubt on the evidence presented. 88 It is not necessary to detail all of the evidence. In short, Thomas had a tax-shelter scheme in which he controlled one corporation and five limited partnerships. He would buy certain assets at fair market value from outside third parties and, through a series of paper transactions between the related companies, resell the assets at grossly inflated prices. The assets would then be carried on the limited partnership books at the inflated values, and investors would receive depreciation deductions and investment tax credits based on investments in the limited partnerships. Thomas' business entities prepared false Schedule K-1's that reflected the deductions and credits. 89 For example, Thomas bought a VCR and wide screen television for $5,130; by the time the units reached the final limited partnership, they were carried on the books at 307,800. He bought twenty horses for a total of $12,400; the horses were eventually carried on the books at $3 million. 90 The jury could have found the necessary willfulness and criminal intent on the basis of such evidence alone. The obviously sham nature of these transactions could lead to such an inference. But there was more evidence relating to defendant's intent. 91 Mr. Thomas did not sign the tax returns filed by the 5 partnerships and Wyoming Leasing. Instead he paid someone who personally had little information about his business to sign as the general partner of the partnerships and the appropriate officer of Wyoming Leasing. This raises an inference of guilty knowledge. More directly, the evidence of the defendant's instructions to his daughter on how to describe the resold equipment (lengthy and flowery) and his instructions not to keep records showing the inflation of assets because it would destroy him support the jury's verdicts. And this evidence negates his position that he relied solely on the advice of professionals. Furthermore, the manner in which the defendant used professionals, and his attitude toward them, could further undermine his reliance defense. According to Mr. Preston, a salesman for some of Mr. Thomas' companies, Mr. Thomas stated: 92 ... you need to decide what you want to have happen and then supply the professional with the proper documentation and figures, statistics, in order to get back the predetermined idea what you wanted. 93 While there was much evidence from which a rational jury could have found for the appellant in the issue of willfulness, there was also ample evidence to support its finding of criminal intent. 94 VII. THE CLAIM THAT THE COURT IMPROPERLY INSTRUCTED THE JURY ON THE STANDARD FOR DETERMINING INTENT 95 Mr. Thomas argues that the instructions given by the trial court in this case to the jury, individually and in their overall effect, were given under an impermissible objective standard. He therefore urges that the jury's verdict should be vacated and the matter returned for a new trial. 96 Specifically, Mr. Thomas objects to Jury Instructions # 18 3 , 27 4 , 32 5 , 38 6 , 39 7 , 42 8 , 44 9 , 45 10 , and 49 11 . Mr. Thomas also objects to the Court's refusal to give certain instructions requested by defendant. Specifically, Mr. Thomas objects to the refusal to use the second paragraphs of defendant's proposed instructions # 3 12 and 9 13 , as well as defendant's proposed instructions 20 14 and 21 15 . 97 First, the Court notes the standard of review for jury instructions. Jury instructions are reviewed as a whole. United States v. Pinto, 838 F.2d 426, 435 (10th Cir.1988). That is, the overall impact must be examined, rather than merely focusing on the specific language of an individual instruction. Furthermore, (t)he trial court is given substantial discretion in tailoring and formulating its instructions, so long as they correctly state the law and fairly and adequately cover the issues presented. Id. at 436 (citing United States v. Pack, 773 F.2d 261, 267 (10th Cir.1985). This Court concludes that the trial court did not abuse its discretion in formulating the jury instructions for this case. 98 Defendant bases his argument in large part on the case of Cheek v. United States, 111 S.Ct. 604 (1991). Cheek held that a good-misunderstanding of the law or a good-faith belief that one is not violating the law negates willfulness, whether or not the claimed belief or misunderstanding is objectively reasonable. Prior to Cheek, the Seventh Circuit had held that good-faith misunderstanding of the law negates willfulness only if the defendant's beliefs are objectively reasonable; in the Seventh Circuit, even actual ignorance was not a defense unless the defendant's ignorance was itself objectively reasonable. See, e.g., United States v. Buckner, 830 F.2d 102 (1987). The objected to instruction in Cheek provided in part that an honest but reasonable belief is not a defense and does not negate willfulness. Cheek, 111 S.Ct. at 608. 99 This Circuit has long held that a subjective standard rather than an objective standard must be applied when assessing defendant's claimed belief that he was acting in good faith in a criminal tax prosecution. See, e.g., United States v. Phillips, 775 F.2d 262 (10th Cir.1985). The trial court's instructions in this case were consistent with the subjective standard requirement. 100 Instruction 18 (footnote 1, supra ) is correct as a matter of law and has been addressed by this Court before. This Court specifically approved the first paragraph of that instruction, while specifically recommending the second paragraph. United States v. Glick, 710 F.2d 639, 642-644 (10th Cir.1983), cert. denied, 465 U.S. 1005 (1984). 101 Instruction 27 (footnote 2, supra ), informed the jurors of the elements of the offense and explained that the Government had to prove each element beyond a reasonable doubt. There is no objective standard imposed on the defendant's state of mind in this instruction. 102 Instruction 32 (footnote 3, supra ) recognizes what this Court has long held regarding proof of intent: The issue of criminal intent is a factual question seldom provable by direct evidence but may be inferred from all the facts and circumstances of the case which reasonable tend to show a mental attitude. United States v. Fleming, 479 F.2d 56, 57 (10th Cir.1973). The instruction at issue specifically focuses on the defendant's state of mind, a properly subjective standard. 103 Instructions 38 and 39 were requested by the defendant. Instruction 38 (footnote 4, supra ) describes the law, not the state of mind. It explains that the transaction must be arms-length to be acceptable for tax purposes; it does not state that a non-arms-length, and hence unacceptable for tax purposes, transaction would be sufficient to supply the requisite willfulness in this criminal matter. Instruction 39 (footnote 5, supra ) also merely describes the law and does not impose an objective state of mind standard. 104 Defendant objected to Instruction 42 (footnote 6, supra ) because he claimed that reliance of the advice of counsel was an absolute defense fully negating willfulness. Defendant misstates the law, which was correctly stated by the trial court's instruction. If a client goes to an attorney and provides the attorney with incomplete information, receives advice based upon that incomplete information, and then acts in reliance on advice of counsel, he has not necessarily acted in good faith, and willfulness may still be found by the jury. This is the point which the trial court attempted to clarify by adding the last sentence to a stock instruction. There was no need for clarification, and the repetitious focus on the defendant's duty was also unnecessary. The last sentence, taken alone, might leave a question as to the standard. And of course, had the trial court instructed the jury that it could consider the defendant's reliance on legal advice as a defense only if that reliance was reasonable, Cheek concerns would be implicated. That was not the case here. Furthermore, the remote possibility of jury confusion in light of this one added sentence is more than offset and compensated for by the instructions as a whole. 105 Mr. Thomas's objections to Instructions 44, 45, and 49 are also unfounded. Instruction 44 (footnote 7, supra ) specifically reminds the jury that the government must prove specific criminal intent ..., and is clearly proper. Instruction 45 (footnote 8, supra ) and 49 (footnote 9, supra ) are also correct statements of law, with no impermissible inferences. 106 The defendant, of course, has no right to have his proposed instructions utilized by the Court. He has the right to have the jury properly and adequately instructed as to the law. If the jury is so instructed, the defendant has no cause to complain. In this case, the District Court repeatedly instructed the jury to determine the issue of willfulness based on defendant's state of mind, and to acquit unless the government proved beyond a reasonable doubt that Mr. Thomas had voluntarily and intentionally violated a known legal duty not to aid or assist others in the filing of false returns. The jury was told that an act is done willfully if done voluntarily and intentionally and with the specific intent to do something the law forbids and that an act is not willful if the result of negligence, or reckless disregard for the requirements of the law, or due to a good faith misunderstanding of the requirements of the law. The jury was further advised that: 107 Under our system of laws, individuals are not punished criminally for mere mistakes, mere mismanagement, mere carelessness, or mere errors of judgment. Nor are they punished for greed. They are punished only for intentional wrongdoing. The defendant is not on trial for errors of judgment, being greedy, making mistakes, or mismanagement. He is on trial for acting with a criminal intent, which is incumbent upon the government to prove to your satisfaction and beyond a reasonable doubt ... 108 These are but some examples of the many times that the District Court emphasized the need for specific, subjective, criminal intent. Viewing these instructions as a whole, this Court concludes that the instructions properly and adequately instructed the jury, and that the District Court did not abuse its discretion in formulating the instructions used in this case. 109