Court Opinion

ID: 4547870
Source: CourtListenerOpinion
Date Created: 2020-07-13 19:00:20.778534+00
Date Added: 2024-06-11T08:59:28.207243
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 19-2508
UNITED STATES OF AMERICA,
                                                  Plaintiff-Appellee,
                                v.

AIRRION S. BLAKE,
                                              Defendant-Appellant.
                    ____________________

        Appeal from the United States District Court for the
         Northern District of Indiana, Hammond Division
        No. 2:16-cr-00074 — Joseph S. Van Bokkelen, Judge.
                    ____________________

       ARGUED MAY 13, 2020 — DECIDED JULY 13, 2020
                ____________________

   Before RIPPLE, BARRETT, and BRENNAN, Circuit Judges.
   BRENNAN, Circuit Judge. A defendant convicted of tax
fraud challenges his sentence, disputing the loss amount
which set the applicable range for his case under the Sentenc-
ing Guidelines. The district court did not commit reversible
error, so we aﬃrm the defendant’s sentence.
    The defendant also appeals the denial of his claim of inef-
fective assistance of trial counsel. Because on direct appeal
2                                                   No. 19-2508

such a claim is limited to the original trial record, it is often
better raised on collateral review. The defendant agrees, so we
dismiss that claim without prejudice.
                          I. Background
    A. Factual and Procedural
    Airrion Blake engaged in a fraudulent tax scheme. He is a
college graduate with a master’s degree in business admin-
istration. Even so, he claims unnamed users in internet chat
rooms persuaded him that the federal government holds hid-
den bank accounts for its citizens—“legacy trusts”—that can
be accessed through various legal maneuvers. According to
this ploy the government allows anyone to cash out their life-
time social security earnings at any time. Under this pretense
Blake filed eight different individual tax returns using fraud-
ulent information. The details of those returns are described
below, as they impact the Sentencing Guidelines calculations
that Blake challenges.
   In 2009, Blake filed a return for the 2006 tax year, claiming
he was entitled to a $297,886 refund based on $334,565 in
gross income and $303,063 in income tax withheld. As sup-
port for those figures, Blake attached pages of bogus forms,
purporting to show that he withheld income on various com-
panies’ behalf. Blake would not have paid those companies
any income, though, let alone withheld their income tax. For
example, one company was his mortgage lender.
    In 2011, Blake filed a return for the 2008 tax year. He
claimed $900,000 in income, alleged $300,000 was withheld on
his behalf, and sought a $300,000 refund. He also filed returns
for the 2009 and 2010 tax years with the same figures. Each
return included Blake’s South Holland, Illinois post oﬃce box
No. 19-2508                                                    3

and was filed using an employee identification number set up
in 2011 for the “Airrion S. Blake Cesti Que Tr.”
    In 2012, Blake filed a return for the 2011 tax year, leading
to his criminal indictment. On this return he obtained and
used a diﬀerent employee identification number for the “Air-
rion Socrates Blake Estate.” He also represented that that es-
tate earned $298,716 for the 2011 tax year, paid fiduciary fees
in the same amount, and withheld $149,358 (half of the previ-
ous figure) in taxes. Blake sought a refund of $149,358.35, and
his gambit paid oﬀ: the Internal Revenue Service issued the
refund requested.
   In 2013, Blake filed a return for the 2012 tax year seeking a
$149,358 refund. That form listed the same fraudulent infor-
mation as the 2011 return. The next year, in 2014, Blake filed a
return for the 2013 tax year seeking a $139,358 refund based
on the same fraudulent information as the 2011 and 2012 re-
turns, less $10,000 in the withholding and refund figures.
Later in 2014, Blake filed a second return for the 2012 tax year,
using the same fraudulent information and seeking the same
$149,358 refund as the first 2012 return. The following table
summarizes Blake’s eight false tax returns, the refunds he re-
quested, and the IRS’s responses:

       Tax Year           Refund Sought         IRS Paid Out

          2006                $297,886               No

          2008                $300,000               No

          2009                $300,000               No

          2010                $300,000               No
4                                                   No. 19-2508

            2011              $149,358              Yes

    2012 (Filed Oct. 2013)    $149,358               No

    2012 (Filed May 2014)     $149,358               No

            2013              $139,358               No

    Blake’s actions came to the attention of the IRS in 2015.
During a consensual interview with two agents, Blake made
several admissions about these returns. He told the agents
that he had control of the post office box used on the
2008-2010 returns, but he denied ever seeing those filings. He
also told them that the 2008 and 2009 returns contained hand-
written signatures that resembled his signature, but he denied
any such resemblances on the 2010 return. Blake also admit-
ted that he prepared and filed a 2011 tax year return, resulting
in the IRS refund.
   About one month later, Blake sent the IRS a “Notice of
Mistake & Notice to Rescind 1041 filing.” In “response to the
ongoing criminal investigation” Blake sought to “rescind the
[Form] 1041 returns … submitted for the tax period
2008-2015.” Blake also sent what he claimed was a $200,000
promissory note to “offset/discharge” his accounts for “years
2009-2013.” Then in February 2016, Blake sent a return to the
IRS faking his own death, stating that he and his wife had
died in May 2012 and May 2013, respectively.
    A grand jury indicted Blake for presenting a false or ficti-
tious claim to a United States agency, here the IRS, in violation
of 18 U.S.C. § 287, and theft of government money in violation
of 18 U.S.C. § 641. At trial one of the IRS agents testified to
Blake’s admissions during his 2015 interview. Blake took the
No. 19-2508                                                      5

stand and told the jury that he prepared and filed the 2011 tax
year return. He also testified that the estates listed in the re-
turns neither earned the income represented nor paid any fi-
duciary fees. But he claimed his filings were valid because he
filed his returns with a “disclaimer” that read “void where
prohibited by law.” When the government sent him the check
for his 2011 return, he thought his plan was validated. The
jury did not buy Blake’s defense and, after a four-day trial,
convicted him of both charges.
   B. Sentencing Guidelines Calculation
    The district court calculated Blake’s guidelines range as
follows: the base oﬀense level was 6 (under U.S.S.G. § 2B1.1);
16 levels were added for an intended loss in excess of $1.5 mil-
lion (under U.S.S.G. § 2B1.1(b)(1)(I)); and 2 more levels were
added for obstruction of justice (under U.S.S.G. § 3C1.1). The
total oﬀense level was 24, and with a criminal history category
of I, Blake’s advisory sentencing guidelines range was 51–63
months.
    Blake objected to the district court including in its loss cal-
culation $900,000 in claimed refunds in the 2008–2010 filings,
arguing he was not responsible for those filings. He also
claimed $300,000 should be the intended loss amount because
he intended to obtain only his “legacy trust” funds which he
believed were about that amount. Under U.S.S.G.
§ 2B1.1(b)(1), a $300,000 loss amount results in a 12-level in-
crease rather than a 16-level increase. Under Blake’s calcula-
tions, his offense level should have been 20, not 24, resulting
in a guidelines range of 33–41 months’ imprisonment.
U.S.S.G. § 5A.
6                                                  No. 19-2508

    The district court overruled Blake’s objection and sen-
tenced him to 36 months in prison and ordered $149,358 in
restitution. Blake has appealed the district court’s conclusion
that his intended loss exceeded $1.5 million, resulting in a
16-level increase in the guidelines offense level.
              II. Calculation of Intended Loss
    A. Standard of Review
    The calculation of intended loss by a district court is re-
viewed for clear error, and a reversal is appropriate “only if
we are left with the definite and firm conviction that a mistake
was made.” United States v. Brown, 880 F.3d 399, 409 (7th Cir.),
cert. denied, 139 S. Ct. 110 (2018) (citation omitted); United
States v. Riley, 493 F.3d 803, 810 (7th Cir. 2007) (defendant
must show loss calculation was not only inaccurate but out-
side realm of permissible computations) (quotation marks
and citation omitted).
    B. Discussion
    The offense level of a defendant convicted of fraud in-
creases proportional to the loss amount. U.S.S.G. § 2B1.1(b)(1).
Subject to an exclusion inapplicable here, the loss amount is
“the greater of actual loss or intended loss.” U.S.S.G. § 2B1.1
n. 3(A). Intended loss means “the pecuniary harm that the de-
fendant purposefully sought to inflict. U.S.S.G. § 2B1.1 n.
3(A)(ii). “Actual loss is the reasonably foreseeable pecuniary
harm that resulted from the offense.” United States v. Moose,
893 F.3d 951, 955 (7th Cir. 2018) (citation and internal quota-
tion marks omitted).
   Under Federal Rule of Criminal Procedure 32(i)(3)(B), the
court “must—for any disputed portion of the presentence re-
port or other controverted matter—rule on [a] dispute” that
No. 19-2508                                                     7

would aﬀect sentencing. Here, the amount of actual loss is un-
disputed as $149,358.35. Blake disputes the amount of in-
tended loss. The district court faced two options: did Blake
intend to stop his fraud at or around $300,000, or did he in-
tend to collect all the refunds he requested? The court chose
the latter.
    Blake argues the district court made insuﬃcient findings
and erred in holding him responsible for the 2008–2010 re-
turns. He also claims the court should have found, or did find,
that he intended to defraud the IRS of $300,000, not more than
$1.5 million. We disagree for the following reasons.
    First, we conclude that the district court did not err in in-
cluding the 2008–2010 returns in its intended loss calculation.
Ample evidence supports the court’s calculation. Blake ad-
mitted the 2008 and 2009 returns contained his signature.
Those returns, like his 2006 return, included the words “au-
thorized rep” next to his signature. They also directed the re-
funds be paid to Blake at his South Holland Post Office box,
and repeated the same numbers for exemption, total deduc-
tion, and taxable income as all the other returns Blake filed
after that. After his IRS interview, Blake also filed documents
purporting to pay off obligations for tax years 2009–2015. In
other words, Blake took credit for the three returns he insists
he never filed. These facts were presented by the government,
included in Blake’s presentence investigation report, and re-
lied upon properly by the court.
    The district court rejected Blake’s position on the
2008-2010 returns for “the reasons stated in the government
and probation’s responses.” That is enough to satisfy the
court’s obligations under Federal Rule of Criminal Procedure
32(i)(3). See United States v. Herman, 930 F.3d 872, 874 (7th Cir.
8                                                   No. 19-2508

2019) (“The court was entitled to adopt the government’s ver-
sion of events, as set forth in the PSR, to explain its ruling on
a disputed point that had been thoroughly explored.”). The
district court was under no obligation to accept Blake’s denial,
and the record does not support his denial. So Blake’s claim
of insufficient findings fails, as does his claim that the court
erred in finding him responsible for the 2008–2010 returns.
    Second, we conclude that the district court did not err in
finding that the intended loss amount exceeded $1.5 million.
Blake requested refunds totaling $1,785,318 in eight false tax
return filings. Responding to Blake’s intended-loss objection
(that he intended to keep only $300,000) the court commented
that “Blake was hiding behind outlandish theories and was
fishing for whatever he could get.” The court explained that
Blake was well-educated, experienced, and “knew what he
was doing … knew the money he was seeking wasn’t his to
have” and “didn’t send a request to the government for his
supposed birthright share” but instead “made up a narrative
of an estate earning income and paying it out to Mr. Blake.”
Notably, as the government points out, if Blake truly sought
only $298,716.69, he would not have sent three returns for
$300,000 on the same day in the same envelope. On this evi-
dence and these findings, the district court did not clearly err
in its intended loss calculation.
    Blake’s strongest argument is that the court actually relied
on his proposed $300,000 loss figure but erred in the guide-
lines calculation. He bases this contention on a remark by the
district court after pronouncing sentence:
    Prosecutor: Judge, one question along the lines of Ms.
                Connor. Given the Court is inclined to lean
                toward the actual loss, I was just wondering
No. 19-2508                                                        9

               if the Court’s determination on intended
               loss affected the sentence, or would you
               have reached the same sentence regardless
               of the intended loss objection?
  Court:       It’s a guideline calculation that I have to
               make. But in terms of sentencing itself for
               restitution purposes, I look at actual loss is
               what I tend to look at.
  Prosecutor: Great. Thank you.
  Court:       There are two different figures running
               around for two different purposes. One is a
               guideline purpose, and I did find that the
               $300,000 was the figure I worked off of. But
               for the actual loss, it is the figure I gave sub-
               ject to firming that up. At this point, I found
               that’s not determined but it will be.
  Prosecutor: So, just to clarify, the Court would reach the
              same sentence regardless of how it ruled on
              the intended loss calculation?
  Court:       Yes, it would have.
Based on this colloquy, Blake argues that even if the district
court said it was using the $1.7 million figure and calculated
the guidelines range based on that amount, the court actually
“intended” to use Blake’s proposed $300,000 loss figure, so
the guidelines range was miscalculated.
   The district court’s references in this colloquy, during a
hearing which lasted a full hour, were less than fully clear.
But the entirety of the court’s sentencing remarks help us re-
solve this issue.
10                                                              No. 19-2508

    When the district court referred to $300,000 during this
colloquy, it had already rejected Blake’s claim that he in-
tended to stop at $300,000. In this rejection the court spoke at
length about Blake’s efforts to secure more than $1.5 million
in refunds. The court stated that Blake “was hiding behind
outlandish theories and was fishing for whatever he could
get.” The court declared “Blake was just seeing how far he
could push it” and “would have kept going as far as he could”
until someone said “you can’t go any further.” And on top of
the nearly $150,000 Blake had received, the court explained
that:
          He had filed similarly bogus returns for four
          years prior to the instant offense and for two
          years afterwards. … [H]uman experience tells
          me that the outlandish theories about the trust
          account upon one’s birth and the government
          owing everybody money are just a shield to
          hide behind in case one is caught.

          As I stated earlier, and it is worth repeating, he
          knew what he was doing. He knew the money
          he was seeking wasn’t his to have. Had it been
          otherwise, he would not have had to make up
          lies in the forms that he filed.1

   Taken together, these comments are inconsistent with
Blake’s claim that the district court found $300,000 as the in-
tended loss amount. The court’s reference to $300,000 in the

1   Transcript of Sentencing Hearing, pp. 33-34, ECF No. 151.
No. 19-2508                                                             11

colloquy reprinted above appears to have been a slip of the
tongue. That stray remark could be read as relying on the ac-
tual loss. But during the colloquy the prosecutor clarified the
circumstances by asking the district court about the reasoning
for the sentence, and the district court confirmed that the sen-
tence would have been the same either way.
    Like United States v. Fennell, 925 F.3d 358, 362 (7th Cir.
2019), “[t]he government responds, persuasively, that in con-
text, the reference to [$300,000] was surely a slip of the
tongue.” As in Fennell, the record renders immaterial any fail-
ure to mark the distinction between “intended” and “actual”
loss. See id. When asked if “the Court would reach the same
sentence regardless of how it ruled on the intended loss cal-
culation,” the district court said “Yes, it would have.” That
“unequivocal statement” shows the court “would have im-
posed the same sentence even if it improperly calculated” the
guidelines range, rendering any error harmless. United States
v. Shelton, 905 F.3d 1026, 1037 (7th Cir. 2018) (citations omit-
ted).2 For these reasons we affirm Blake’s sentence.
              III. Ineﬀective Assistance of Counsel
   After conviction Blake moved for a new trial under Fed-
eral Rule of Criminal Procedure 33, claiming his trial counsel
was ineﬀective. He alleged several deficiencies and requested
an evidentiary hearing to determine their impact on this case.
The district court declined Blake’s request for an evidentiary

2 We also note that the intended loss amount Blake seeks would reduce
his offense level from 24 to 20, resulting in a guidelines range of 33-41
months’ imprisonment. U.S.S.G. § 5A. Thus, even if the district court erred
in its calculation, Blake received a sentence (36 months) in the low-end of
the range he contends should apply.
12                                                    No. 19-2508

hearing and denied the motion. Blake appeals, arguing he was
entitled to a hearing on his motion.
    This court has often advised litigants of the downsides of
raising ineffective assistance of counsel claims on direct ap-
peal. See United States v. Flores, 739 F.3d 337, 341 (7th Cir. 2014)
(“[W]e have said many times that it is imprudent to present
an ineffective-assistance argument on direct appeal.”) (cita-
tions omitted). Because ineffective assistance of counsel
claims “usually fall[] short of finding support in the original
trial record,” these claims are best raised in collateral proceed-
ings. United States v. Hardamon, 188 F.3d 843, 847 (7th Cir.
1999). When such claims are instead raised on direct appeal,
“appellate review is limited by the plain-error standard of
Fed. R. Crim. P. 52(b).” Flores, 739 F.3d at 341. Because liti-
gants get “to argue ineffective assistance, and for that matter
any other contention, just once,” raising an ineffective assis-
tance claim on direct appeal may preclude litigants from rais-
ing the same claim on collateral review. Id.
    At oral argument we asked Blake’s appellate counsel
whether the defense would rather have these ineffective as-
sistance of counsel claims potentially considered on collateral
review rather than in this appeal. She responded affirma-
tively. Accordingly, we will dismiss that portion of Blake’s
appeal without prejudice, and Blake preserves for post-con-
viction review his ineffective assistance claim.
                           IV. Conclusion
    For these reasons we AFFIRM the defendant’s sentence and
DISMISS WITHOUT PREJUDICE the defendant’s claim of ineffec-
tive assistance of counsel.