Court Opinion

ID: 3059101
Source: CourtListenerOpinion
Date Created: 2015-10-14 00:30:51.363563+00
Date Added: 2024-06-11T07:38:15.560394
License: Public Domain

[DO NOT PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT
                    ________________________            FILED
                                               U.S. COURT OF APPEALS
                                                 ELEVENTH CIRCUIT
                          No. 10-12885
                                                   OCTOBER 26, 2011
                      Non-Argument Calendar
                                                      JOHN LEY
                    ________________________           CLERK

             D.C. Docket No. 8:08-cr-00381-SCB-EAJ-2

UNITED STATES OF AMERICA,

                                                       Plaintiff-Appellee,

                             versus

JACK LEE MALONE,

                                                 Defendant-Appellant.

                    ________________________

                          No. 10-15069
                      Non-Argument Calendar
                    ________________________

             D.C. Docket No. 8:08-cr-00381-SCB-EAJ-1

UNITED STATES OF AMERICA,
                                                                Plaintiff-Appellee,

                                      versus

JOSEPH NELSON SWEET,

                                                             Defendant-Appellant.

                          ________________________

                   Appeals from the United States District Court
                        for the Middle District of Florida
                          ________________________

                                (October 26, 2011)

Before HULL, WILSON and BLACK, Circuit Judges.

PER CURIAM:

      Defendants Joseph Sweet and James Malone were involved in a scheme to

sell tax-avoidance manuals and trust documents to individuals who wanted to hide

their income from the Internal Revenue Service (“IRS”). After a jury trial,

Defendants Sweet and Malone were convicted of conspiracy to defraud the United

States by advocating the intentional disruption of the assessment, ascertainment

and collection of federal income tax, in violation of 18 U.S.C. § 371. Defendant

Sweet was also convicted of corrupt interference with internal revenue laws, in

violation of 26 U.S.C. § 7212(a), and two counts of criminal contempt, in violation

of 18 U.S.C. § 401(3).

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       In this consolidated appeal, Defendant Sweet appeals his convictions and

total 120-month sentence, and Defendant Malone appeals his 60-month sentence.

After review, we affirm.

                I. REASONABLE DOUBT JURY INSTRUCTION

       As to his convictions, Defendant Sweet contends that the district court erred

when it gave the Eleventh Circuit Pattern Jury Instruction defining reasonable

doubt.1 Specifically, Sweet argues that the following language is unnecessarily

confusing and lowered the government’s burden of proof: “Proof beyond a

reasonable doubt is proof of such a convincing character that you would be willing

to rely and act upon it without hesitation in the most important of your own

affairs.”

       This Court has repeatedly upheld the reasonable doubt instruction Sweet

challenges. See, e.g., United States v. James, 642 F.3d 1333, 1337-38 (11th Cir.

2011), cert. denied, 2011 WL 4049497 (U.S. Oct. 11, 2011) (No. 11-6276) (“[W]e

have repeatedly approved of the definition of reasonable doubt provided in the

Eleventh Circuit Pattern Jury Instructions.”); United States v. Hansen, 262 F.3d

1217, 1249-50 (11th Cir. 2001); United States v. Daniels, 986 F.2d 451, 457-58,

       1
        We review jury instructions de novo to determine whether they misstate the law or
mislead the jury to the prejudice of the objecting party. United States v. Hansen, 262 F.3d 1217,
1248 (11th Cir. 2001).

                                                3
readopted in relevant part on reh’g, 5 F.3d 495, 496 (11th Cir. 1993). Although

Sweet cites opinions in other circuits questioning the utility of similar reasonable

doubt instructions, he does not explain how the Eleventh Circuit’s Pattern Jury

Instruction misstated the law or misled the jury in his case. As Sweet

acknowledges, we are bound by our precedent upholding the Eleventh Circuit’s

Pattern Jury Instruction on reasonable doubt “unless and until it is overruled by

this court en banc or by the Supreme Court.” United States v. Brown, 342 F.3d

1245, 1246 (11th Cir. 2003). Therefore, Sweet has not shown error in the district

court’s reasonable doubt jury instruction.

                                II. LOSS CALCULATION

       Defendant Malone argues that the district court improperly calculated the

tax loss attributed to him for purposes of determining his base offense level under

the Sentencing Guidelines.2

       When tax evasion results in a tax loss to the government, a defendant’s base

offense level is determined using the tax table in U.S.S.G. § 2T4.1. See U.S.S.G.

§ 2T1.1(a)(1). Tax loss is defined as “the total amount of loss that was the object

of the offense.” U.S.S.G. § 2T1.1(c)(1). In calculating the tax loss, “all conduct

       2
         We review a district court’s calculation of the amount of tax loss for clear error. United
States v. Patti, 337 F.3d 1317, 1323 (11th Cir. 2003).

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violating the tax laws should be considered as part of the same course of conduct

or common scheme or plan unless the evidence demonstrates that the conduct is

clearly unrelated.” U.S.S.G. § 2T1.1, cmt. n.2.

      At sentencing, over Defendant Malone’s objection, the district court

calculated a tax loss of $2,882,200, which resulted in a base offense level of 24,

pursuant to the tax table. See U.S.S.G. § 2T4.1(J) (designating a base offense

level of 24 for a tax loss of more than $2.5 million but less than $7 million). The

district court’s loss calculation included the government’s losses from fourteen

clients of the JoY Foundation, the multi-level marketing tax scheme created by

Defendants Malone and Sweet.

      The district court’s finding that the tax losses from JoY Foundation clients

were attributable to Defendant Malone is not clearly erroneous. Malone does not

dispute that he sold the JoY Foundation’s tax program to the fourteen JoY

Foundation clients or the tax loss amount assigned to each client. The JoY

Foundation provided clients with program materials, such as books and form

letters, that instructed clients not to file federal income tax returns under the theory

that wages earned were not subject to taxation. In addition, the JoY Foundation

sold clients trust documents developed by Sweet to purportedly shelter clients’

assets from taxation and advised clients on how to respond to IRS inquiries and

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levies.

       Defendant Malone was found guilty of a conspiracy that used the marketing

of sham trusts to help individuals conceal income and assets and prevent the

assessment, ascertainment and collection of taxes. Although some of the JoY

Foundation’s clients already had ceased paying taxes before becoming clients, the

district court found that Malone encouraged these clients to continue their tax

evasion. Thus, part of the object of the conspiracy was the continued tax evasion

by the JoY Foundation clients, and the clients’ continued failure to pay their taxes

was part of “the same course of conduct or common scheme or plan.” See

U.S.S.G. § 2T1.1, cmt. n.2. Accordingly, the district court properly attributed

these clients’ tax losses to Malone.

             III. OBSTRUCTION OF JUSTICE ENHANCEMENTS

       Both defendants challenge the district court’s imposition of a 2-level

obstruction of justice enhancement.3

       A defendant’s offense level is increased by 2 levels if he “willfully

obstructed or impeded, or attempted to obstruct or impede, the administration of

       3
         With respect to an obstruction of justice enhancement, we review a district court’s
factual findings for clear error and its application of those facts to the guidelines de novo. United
States v. Bradberry, 466 F.3d 1249, 1253 (11th Cir. 2006). For factual findings to be clearly
erroneous, we “must be left with a definite and firm conviction that a mistake has been
committed.” United States v. Rodriguez-Lopez, 363 F.3d 1134, 1137 (11th Cir. 2004) (quotation
mark omitted).

                                                 6
justice with respect to the investigation, prosecution, or sentencing of the instant

offense of conviction” and “the obstructive conduct related to” the defendant’s

offense of conviction, his relevant conduct or a closely related offense. U.S.S.G.

§ 3C1.1. A defendant obstructs justice by “committing, suborning, or attempting

to suborn perjury, including during the course of a civil proceeding if such perjury

pertains to conduct that forms the basis of the offense of conviction.” U.S.S.G.

§ 3C1.1, cmt. n.4(B). Perjury occurs when a defendant offers “false testimony

concerning a material matter with the willful intent to provide false testimony,

rather than as a result of confusion, mistake, or faulty memory.” United States v.

Dunnigan, 507 U.S. 87, 94, 113 S. Ct. 1111, 1116 (1993).

      A defendant also obstructs justice by “providing materially false

information to a judge or magistrate.” U.S.S.G. § 3C1.1, cmt. n.4(F). A statement

is “material” where it, “if believed, would tend to influence or affect the issue

under determination.” U.S.S.G. § 3C1.1, cmt. n.6. A defendant’s material false

statement, when made to a judge or magistrate, does not have to interfere with the

investigation or prosecution for the obstruction of justice enhancement to apply.

United States v. Ruff, 79 F.3d 123, 125-26 (11th Cir. 1996).

      Here, the district court did not err in imposing the 2-level obstruction of

justice enhancement as to either defendant, albeit on different grounds. With

                                          7
regard to Defendant Sweet, the record indicates that he provided false information

to a district court in a civil lawsuit filed against him by the Tax Division of the

Department of Justice. On January 30, 2002, the district court granted a default

judgment and permanent injunction against Sweet and ordered Sweet to provide

copies of the order to all individuals and entities who had purchased Sweet’s tax-

avoidance manuals and trust documents and to produce records identifying those

individuals and entities. In response, on March 20, 2002, Sweet filed a document

entitled “Compliance with Court Order” in which he denied possessing the names

and addresses of anyone who had purchased his manual or trust documents or any

records related to those sales.

      Defendant Sweet does not dispute that his statements in his filing were

false. Indeed, at trial, an IRS agent testified that during a search of Sweet’s home,

agents found numerous boxes containing, among other things, documents relating

to Sweet’s promotion of the tax-avoidance program and his selling of trust

documents, including client lists and order forms.

      The IRS’s criminal investigation of Sweet began in early 2001. Sweet

ultimately was charged with a fraud conspiracy in which his sale of his manual

and trust documents to clients to aid their evasion of internal revenue laws was an

integral element of the scheme. Under the circumstances, the existence of records

                                           8
demonstrating that such sales had taken place was material to both the district

court’s efforts to enforce its civil injunction and the IRS’s ongoing criminal

investigation of Sweet for tax fraud. See United States v. Dedeker, 961 F.2d 164,

167 (11th Cir. 1992) (“Under the commentary to section 3C1.1, the threshold for

materiality is conspicuously low.”). Moreover, Defendant Sweet’s materially

false statements to the district court in the government’s civil tax proceedings

related to Sweet’s offenses of conviction given that it was reasonably foreseeable

that further government investigation might result in criminal charges for a tax

fraud conspiracy. See United States v. Amedeo, 370 F.3d 1305, 1320 (11th Cir.

2004) (concluding that defendant’s obstructive conduct during police investigation

of a drug overdose was “related directly and foreseeably” to defendant’s

subsequent conviction for cocaine distribution). Accordingly, Sweet’s conduct

falls within § 3C1.1’s obstruction of justice enhancement.

      As for Defendant Malone, the record shows that he testified at his criminal

trial that he did not know about the civil injunction issued against Sweet or recall

receiving correspondence from the IRS informing him that he was covered by the

injunction. Although Malone admitted he had signed a response form to the IRS’s

letter, he said he did not remember doing so. At sentencing, the district court

found that Malone “conveniently didn’t remember a number of things,” about the

                                          9
correspondence with the IRS and the Sweet injunction, that Malone was not

honest about what he had received from the government and that his purported

failure to remember was an attempt to sway the jury and obstruct justice.

      The district court’s finding that Defendant Malone perjured himself was not

clearly erroneous. Malone contends his testimony about receiving the IRS’s letter

was the result of a faulty memory and not willful. However, the district court

found that Malone feigned his faulty memory, a credibility determination to which

we owe considerable deference. See Amedeo, 370 F.3d at 1318 (explaining that

we accord “special deference” to a district court’s determination that a defendant

obstructed justice if it involves a credibility assessment). Moreover, Malone’s

perjury was material given that the district court found it represented an attempt to

sway the jury as to his guilt for the offense of conviction.

      For these reasons, the district court did not err in imposing the 2-level

obstruction of justice enhancement when calculating the advisory guidelines

ranges for Defendants Sweet and Malone.

      AFFIRMED.

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