Court Opinion

ID: 815249
Source: CourtListenerOpinion
Date Created: 2013-01-11 21:17:55+00
Date Added: 2024-06-11T12:38:38.031033
License: Public Domain

United States Court of Appeals
                      For the First Circuit

No. 11-2150

                    UNITED STATES OF AMERICA,

                            Appellee,

                                v.

                         ALBANIA DELEON,

                      Defendant, Appellant.

           APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF MASSACHUSETTS
         [Hon. Nathaniel M. Gorton, U.S. District Judge]

                              Before

                    Boudin,* Selya, and Stahl,
                         Circuit Judges.

     Jessica Hedges, with whom Hedges & Tumposky, LLP was on brief,
for appellant.
     Lori J. Holik, Assistant United States Attorney, with whom
Carmen M. Ortiz, United States Attorney, was on brief, for
appellee.

                         January 11, 2013

     *
       Judge Boudin heard oral argument in this matter and
participated in the semble, but he did not participate in the
issuance of the panel's opinion in this case. The remaining two
panelists have issued the opinion pursuant to 28 U.S.C. § 46(d).
          STAHL, Circuit Judge.        In November 2008, a jury found

defendant-appellant Albania Deleon guilty of having, among other

things, engaged in a scheme to conceal and avoid her company's

employment tax liability. The district court concluded that Deleon

was responsible for just over $1.2 million in tax losses, and she

received a sentence of eighty-seven months.       On appeal, she raises

three challenges to her conviction and sentence, arguing that the

court erred by: (1) submitting a set of summary charts to the jury;

(2) adopting the government's loss calculation; and (3) failing to

inquire specifically as to whether she had reviewed the presentence

report (PSR) with her attorney.    We affirm.

                         I. Facts & Background

          The full scope of Deleon's criminal scheme was broader

than what we are about to describe; we recite only the facts that

are relevant to this appeal.

          Deleon owned and operated two businesses: Environmental

Compliance Training, an asbestos abatement training school, and

Methuen Staffing, Inc., a temporary employment agency that supplied

workers, generally to asbestos abatement businesses, for an hourly

fee.   Though   Deleon   represented    to   client   companies   and   the

Massachusetts Division of Occupational Safety that Methuen Staffing

would be responsible for all employee tax obligations, she in fact

concealed much of Methuen Staffing's tax liability by maintaining

two separate payrolls.     Methuen Staffing paid a minority of its

                                  -2-
employees     through   a   payroll    service;    for     those   employees,

compensation was reported and payroll taxes were withheld. We will

refer to this as the "reported payroll."               A majority of Methuen

Staffing's employees, however, were on what we will call the

"unreported    payroll."1     Methuen       Staffing    paid   these   workers

directly with checks and did not withhold payroll taxes from their

wages or report or remit such taxes to the Internal Revenue Service

(IRS).   Rather, Deleon told her tax preparers that the unreported

payroll workers were independent contractors for whom she was not

required to remit payroll taxes.            Thus, Deleon's tax preparers

recorded the checks to individuals on the unreported payroll as a

business expense and issued an IRS Form 1099 to each of those

workers.2

            State and federal investigators, alerted to potential

document fraud and immigration violations at both of Deleon's

companies, raided the companies' offices in November 2006.                  In

March 2008, Deleon was charged with: one count of conspiracy to

violate multiple federal criminal laws, in violation of 18 U.S.C.

§ 371; five counts of making false statements, in violation of 18

U.S.C. § 1001; sixteen counts of procuring false tax returns, in

     1
       The testimony at trial indicated that, within Methuen
Staffing, payments made to workers on the unreported payroll were
also referred to as "1099 checks" and "under the table" checks.
     2
       Methuen Staffing also concealed the unreported payroll from
its workers' compensation insurance provider.

                                      -3-
violation of 26 U.S.C. § 7206(2); and six counts of mail fraud, in

violation of 18 U.S.C. § 1341.     After an eleven-day jury trial, she

was convicted on all counts.

                               II. Analysis

A.   The chalks

            Deleon's   first   argument   is   that   the   district   court

improperly submitted to the jury three summary charts that the

government had used as "chalks," or demonstrative jury aids, at

trial.3     Because her trial counsel explicitly consented to the

submission of the chalks, however, Deleon's claim is waived, and we

need not address its merits.

            On November 19, 2008, after the jury had begun its

deliberations, the district court alerted the parties that the jury

had submitted the following question to the court: "Would it be

possible to have the exhibit numbers indicated on the verdict form.

Given the number of counts and amount of evidence, it would be

helpful."    The district court noted that the exhibit numbers were

listed on the chalks, which were not in evidence and thus not in

the jury room, and asked the parties for their input.

     3
       The chalks were labeled "False Statement Counts," "False Tax
Return Counts," and "Mail Fraud Counts." They largely duplicated
charts included in the superseding indictment, which listed each
group of counts against Deleon and relevant information related to
those counts. The chalks did, however, have one additional column
listing the trial evidence admitted in support of each count.

                                   -4-
          The government suggested that the court give the chalks

to the jury.   Defense counsel responded, "I don't have a problem

with that," but indicated that he wanted to review the copies of

the chalks in his file to confirm that (as the government had

indicated) the chalks did not reflect anything more than the counts

in the indictment and the exhibits that related to each count.4

The record is unclear as to whether defense counsel in fact

examined the chalks, but he did proceed to say, "Your Honor, I'm

fine with that.   We were just talking about it."    The court then

had a brief discussion with the government about obtaining the

original chalks and bringing them to the courtroom.    Finally, the

court had the following exchange with the parties:

          The Court: All right.    Is there any reason
          that the Court just simply can't submit those
          chalks in response without calling the jury
          back in and doing it on --

          Government counsel:    I don't think so.

          The Court: What I will do then, as soon as you
          get the chalks and run them by [defense
          counsel] that he agrees –-

          Defense counsel: I'm satisfied, your Honor.

          The Court: Give me those three chalks. I will
          give them to the deputy, who will turn them
          over to the marshal, who will give them to the
          jury.

     4
       The "False Tax Return Counts" chalk actually included not
exhibit numbers but calculations that an IRS revenue agent had made
and testified to at trial.

                                -5-
           Deleon's     trial    counsel       thus   made    three    statements

indicating his acquiescence: "I don't have a problem with that"

when the government initially proposed the plan, and then, after

either   looking   at   the     chalks    or   simply   conferring        with   the

government, "Your Honor, I'm fine with that" and "I'm satisfied,

your   Honor."     That    is    a   quintessential          example   of   "[t]he

intentional relinquishment of a known right," which "results in a

waiver" and makes Deleon's claim unreviewable on appeal.                    United

States v. Carrasco-De-Jesús, 589 F.3d 22, 26 (1st Cir. 2009).

Though we may, on rare occasions, forgive waivers solely as a

matter of discretion, United States v. Walker, 665 F.3d 212, 227

(1st Cir. 2011), we see no reason to do so here.

B.   The loss calculation

           Deleon's     second    broad    challenge    is     to   the   district

court's calculation of the tax losses for which she should be held

responsible as a result of her fraudulent payroll scheme.                        We

review for clear error the factual findings upon which a district

court has based its loss calculation.             United States v. Stergios,

659 F.3d 127, 135 (1st Cir. 2011).             Calculating loss "is more an

art than a science," United States v. Rostoff, 53 F.3d 398, 407

(1st Cir. 1995), and the district court need only make a reasonable

estimate, United States v. Mitrano, 658 F.3d 117, 124 (1st Cir.

2011); U.S.S.G. § 2T1.1, Application Note 1.

                                     -6-
            One of the government's witnesses at trial was IRS

Revenue Agent Joseph Guidoboni, who was tasked with calculating the

payroll taxes that Methuen Staffing owed for tax years 2002 through

2005.      Agent   Guidoboni    reviewed    Methuen        Staffing's     quarterly

payroll tax returns, the records of the two payroll services that

Methuen    Staffing     used,   the   checks      issued    to   workers    on   the

unreported payroll, and Methuen Staffing's bank statements.                       He

determined that Methuen Staffing's gross unreported payroll totaled

$4,560,965.67 but that the company had reported only $1,772,619.07

in gross payroll.          Agent Guidoboni then applied calculations

discussed at more length below to determine the taxes due and

owing. He reached a total tax loss figure of $1,074,858.70 for the

years     2002   through     2005.      That      figure     was   increased      to

$1,200,939.45 after trial, when the government obtained additional

information for tax year 2001.

            In advance of her sentencing hearing, Deleon submitted an

expert report that challenged two of the assumptions underlying

Agent     Guidoboni's      calculations     and     suggested      that    he    had

overestimated the tax losses. Deleon did not, however, put forward

an alternate calculation.        After continuing an initial sentencing

hearing to have the government file a response to Deleon's expert's

criticisms, the district court ultimately adopted the government's

estimate.    The court found by a preponderance of the evidence that

"[n]otwithstanding defense counsel's . . . vigorous arguments and

                                      -7-
submissions," Deleon should be held responsible for just over $1.2

million in tax losses.       The court emphasized that Application Note

1 to U.S.S.G. § 2T1.1 directs a sentencing court to "make a

reasonable estimate based on the available facts" when the loss

amount is uncertain.         With a total offense level of 29 and a

criminal history category of I, Deleon's guideline sentencing range

was 87 to 108 months; the court imposed a sentence of 87 months.

            Deleon   finds    three    flaws    in    the   government's      loss

calculation and thus alleges that it was clear error for the

district court to adopt it.

            First, she challenges the government's assumption that

all individuals who were paid through Methuen Staffing's unreported

payroll should be treated as W-2 employees for the purpose of

calculating tax liability.           Some, she claims, may have actually

been properly characterized as 1099 workers, and the IRS should

therefore have located and interviewed a "representative sample" of

Methuen     Staffing's    unreported        payroll    workers.       But    Agent

Guidoboni's    assumption     that    the    payments    from   the   unreported

payroll were made to employees and not independent contractors was

supported by evidence at trial indicating that: the decision to put

an individual on the unreported payroll had nothing to do with the

type   of   work   that   person     performed;       workers   determined     for

themselves how they wanted to be paid; and workers regularly

alternated between the reported and unreported payrolls.                    Deleon

                                       -8-
has, on the other hand, pointed to no evidence in the record of

properly characterized 1099 employees at Methuen Staffing.

            Deleon's   sentencing   counsel    was   apparently   able   to

identify numerous instances in which individuals on the unreported

payroll made relatively small sums and received only one or a few

checks.     But Deleon again fails to account for the fact that

workers moved between the reported and unreported payrolls, and

those who received relatively little in unreported wages may well

have received more in reported wages.        Absent a competent basis to

conclude that any of Deleon's workers were bona fide independent

contractors, we find no clear error.          See Stergios, 659 F.3d at

135.

            Second, Deleon takes issue with the government's method

of calculating the income tax withholding losses that resulted from

her misclassification of workers.         She claims that the government

failed to account for potential low-income workers who may not have

had any tax liability.

            As Agent Guidoboni testified at trial, there are three

components of a payroll tax: the Social Security portion (taxed at

12.4 percent), the Medicare portion (taxed at 2.9 percent) and the

federal income tax withheld, which is based upon an individual

worker's designated allowances, as reported to the employer on IRS

Form W-4.    For the unreported payroll workers, of course, there

were no W-4 forms, so Agent Guidoboni had to calculate the federal

                                    -9-
income tax withholdings in some other way. Agent Guidoboni derived

an average rate to apply to the unreported payroll by using Methuen

Staffing's own data from the reported payroll.    For each quarterly

reported payroll tax return, Agent Guidoboni divided the federal

income tax withholdings by the total compensation reported and

derived a tax rate that he then applied to the unreported payroll.

His rates, which he described as "conservative," generally ranged

from six to ten percent.5

          Agent Guidoboni's technique strikes us as having resulted

in "a reasonable estimate based on the available facts."   U.S.S.G.

§ 2T1.1, Application Note 1.   Furthermore, as the district court

noted, the debate is largely academic, because even without the

income tax losses, which comprised $423,000 of the total $1.2

million loss calculation, Deleon's offense level and sentencing

range would have been the same, given how the sentencing guideline

grouping principles operate with respect to the multiple offenses

of conviction at issue here.   See id. § 3D1.4.

          Deleon's final challenge to the loss calculation relates

to the inclusion of data that she claims was unreliable.    As part

of his process of determining the payroll taxes due and owing,

Agent Guidoboni reviewed a spreadsheet listing approximately 13,000

     5
       It is worth mentioning that Note A to U.S.S.G. § 2T1.1(c)
prescribes a tax rate of twenty-eight percent of unreported gross
income in situations in which gross income has been underreported,
unless a more accurate determination of the tax loss can be made.

                               -10-
handwritten checks drawn on the Methuen Staffing bank account. The

spreadsheet reflected the account number of each check, the check

number, the check amount, the payee, the date of the check, and any

remarks written on the memo line of the check.              Agent Guidoboni

testified that he only included in his calculations checks that had

an hourly wage rate and a number of hours worked noted in the check

memo line, except where he had identified another check to the same

worker that included either an hourly rate or hours worked.               At

sentencing, Deleon identified at least thirty-three checks without

notations in the memo line that she claimed Agent Guidoboni should

not have included in his calculations.

            The government argues, and Deleon does not contest on

appeal, that twenty-nine of those were checks to payees for whom

Agent Guidoboni had identified another check that did have a proper

wage or hour notation on the memo line.           That leaves four checks

issued to entities that clearly were not employees.           We agree with

Deleon that it was error for the government to include those checks

in   its   calculation,     but   the    checks   totaled   $1,807   of   the

$4,560,965.67 unreported employee payroll calculation.           Deleon has

made no argument that the inclusion of that $1,807 affected her

sentence, and such an insignificant error does not undermine the

entire loss calculation.

            The government's loss calculation may not have been

perfect,   but   it   was   the   kind   of   rough   estimate   with   which

                                    -11-
sentencing courts routinely deal, see Rostoff, 53 F.3d at 407, and

the court here carefully deliberated before determining that it was

reasonable.      We   find   no   clear   error   in   that   conclusion,

particularly given that Deleon did not put forward an alternate

calculation.    "[A] party dissatisfied with the sentencing court's

quantification of the amount of loss in a particular case must go

a long way to demonstrate that the finding is clearly erroneous."

Id.    Deleon has not cleared that high bar.

C.    The alleged Rule 32 violation

            Deleon's final claim is that we should remand her case

for resentencing because the district court failed to ask, at her

sentencing hearing, whether she and her attorney had read and

discussed the PSR and its addenda.          Because Deleon failed to

challenge the district court's compliance with Federal Rule of

Criminal Procedure 32 at the sentencing hearing itself, we review

her claim for plain error.    United States v. Espinola, 242 F. App'x

709, 711 (1st Cir. 2007), vacated on other grounds, 552 U.S. 1240

(2008); see also United States v. Jeross, 521 F.3d 562, 586 (6th

Cir. 2008); United States v. Stevens, 223 F.3d 239, 242 (3d Cir.

2000); United States v. Lockhart, 58 F.3d 86, 88 (4th Cir. 1995).6

      6
       Deleon attempts to bypass the plain error standard by
invoking United States v. Mitchell, 243 F.3d 953 (6th Cir. 2001),
which she describes as having adopted a "bright-line policy"
requiring resentencing whenever a Rule 32 violation occurs,
regardless of whether the defendant objected to the error below.
But while the Sixth Circuit did remand for resentencing without a
showing of prejudice in Mitchell, id. at 955, it did not hold that

                                  -12-
            Rule 32(i)(1)(A) requires a sentencing court to "verify

that the defendant and the defendant's attorney have read and

discussed the presentence report and any addendum to the report."

Fed. R. Crim. P. 32(i)(1)(A).          There is no doubt "that it is the

better practice for trial courts to address the defendant directly

in order to establish that he or she has had the opportunity to

read the [PSR] and to discuss it with his/her counsel.           This simple

practice will avoid unnecessary challenges and help ensure fairness

in the sentencing procedure."         United States v. Manrique, 959 F.2d

1155, 1157-58 (1st Cir. 1992) (quoting United States v. Mays, 798

F.2d 78, 80 (3d Cir. 1986) (internal quotation marks omitted)).

But   we   have   held   that   "if   it   is   abundantly   clear   from   the

sentencing hearing that both defendant and his counsel are familiar

with the report, a new sentencing hearing will not be mandated,

even if the court failed to directly inquire whether the defendant

had an opportunity to review the report."            Id. at 1157;7 see also

the plain error standard does not apply to a forfeited Rule
32(i)(1)(A) claim. Indeed, the Sixth Circuit has held just the
opposite. See Jeross, 521 F.3d at 586. Furthermore, what occurred
here would not qualify as a Rule 32 violation under Mitchell. See
243 F.3d at 955 ("The district court need not make an affirmative
inquiry, so long as it can somehow determine that defendant and
counsel have read and discussed the report.").
      7
       Deleon is correct that Manrique addressed a prior iteration
of Rule 32(i)(1)(A), which required the district court to
"determine that the defendant and the defendant's counsel have had
the opportunity to read and discuss the presentence investigation
report."   Fed. R. Crim. P. 32(a)(1)(A) (1992).      The Rule was
amended in 1994 and now requires the court to "verify" (as opposed
to "determine") that the defendant and her attorney have not only

                                      -13-
Espinola, 242 F. App'x at 711 (holding that, where it is clear from

the record that defense counsel "was thoroughly familiar with the

PSR, 'we will not assume that defense counsel did not discuss so

critically important a document with his client, especially since

appellant claims no such dereliction'" (quoting    United States v.

Cruz, 981 F.2d 613, 620 (1st Cir. 1992))).

          Here, it was "abundantly clear" from the record that

Deleon had reviewed the PSR and its addenda with her attorney.

Manrique, 959 F.2d at 1157.    We note just a few of the salient

facts.   Shortly after she was appointed to replace Deleon's trial

counsel, Deleon's sentencing counsel moved for a continuance of the

original sentencing hearing, noting that Deleon's prior counsel had

not reviewed the PSR with her and that sentencing counsel had begun

to do so but needed more time to complete that process.    Deleon's

sentencing counsel later submitted seventy-seven objections to the

PSR and filed two sealed submissions with the court.   Many of those

objections began with the phrase, "Ms. Deleon advises" and included

information that could only have been obtained from Deleon herself.

One objection, for example, provided explanations for Deleon's

had the opportunity to read and discuss the PSR but have actually
"read and discussed" it. Fed. R. Crim. P. 32(i)(1)(A) (2012). We
see no reason why those changes to the Rule, however, should alter
Manrique's holding that Rule 32 does not require an explicit,
specific inquiry on the record.    See United States v. Esparza-
Gonzalez, 268 F.3d 272, 274 (5th Cir. 2001); Mitchell, 243 F.3d at
955; Stevens, 223 F.3d at 241. But see United States v. Rone, 743
F.2d 1169, 1174 (7th Cir. 1984).

                               -14-
decision to flee the country before her sentencing hearing. Others

offered details to amend or correct the "Personal and Family Data"

section of the PSR, including the correct spelling of Deleon's

grandfather's name, Deleon's height and weight, the fact that a

family   parakeet   had   died   while   she   was   incarcerated,   and

information about her medical history.

          Given the myriad indicators that Deleon reviewed the PSR

with her sentencing counsel, and the fact that she has not made any

claim to the contrary on appeal, we find no plain error and no need

for a new sentencing hearing.       See Manrique, 959 F.2d at 1157;

Espinola, 242 F. App'x at 711.

                           III. Conclusion

          For the foregoing reasons, we affirm.

                                 -15-