Court Opinion

ID: 4244454
Source: CourtListenerOpinion
Date Created: 2018-02-12 21:00:27.84848+00
Date Added: 2024-06-11T14:16:22.805430
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        FEB 12 2018
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                       No.    16-10185

                Plaintiff-Appellee,             D.C. No.
                                                2:14-cr-00168-WBS-1
 v.

JACQULINE HOEGEL,                               MEMORANDUM*

                Defendant-Appellant.

                   Appeal from the United States District Court
                      for the Eastern District of California
                   William B. Shubb, District Judge, Presiding

                    Argued and Submitted November 14, 2017
                            San Francisco, California

Before: GOULD and MURGUIA, Circuit Judges, and GRITZNER,** District
Judge.

      Defendant Jacquline Hoegel was convicted of four counts of making and

subscribing false tax returns for the tax years 2005 through 2008, in violation of 26

U.S.C. § 7206(1). The district court sentenced Hoegel to concurrent terms of 36

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable James E. Gritzner, United States District Judge for the
Southern District of Iowa, sitting by designation.
months imprisonment and 12 months of supervised release. On appeal, Hoegel

challenges two of the district court’s evidentiary rulings and its application of a

two-level enhancement under U.S.S.G. § 2T1.1(b)(1). Having jurisdiction

pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742, we affirm.

      From 2000 until March of 2009, Hoegel sold certificates of deposit (CDs)

out of the Napa, California, office for a group of interrelated financial institutions

owned by William Wise (Wise), referred to as the Millennium entities. In March

2009, with Hoegel present, a court-appointed receiver took control of property at

the Millennium entities’ Napa office as part of a Securities and Exchange

Commission (SEC) investigation into a Ponzi scheme involving the Millennium

entities. Hoegel’s personal property and assets, including homes and bank

accounts, were also seized.

      On August 13, 2009, as the SEC investigation continued, Hoegel went to a

tax preparer to file her delinquent tax returns for 2005 through 2008. Hoegel

presented the tax preparer with handwritten notes as proof of her income and

expenses. Hoegel represented annual income of $130,000, $183,040, $221,000,

and $260,000, for the tax years 2005, 2006, 2007, and 2008, respectively, and

indicated that she earned the income working as a self-employed graphic designer.

The tax returns were filed in accordance with the information Hoegel provided.

      In February 2012, Hoegel and Wise were indicted in the Northern District of

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California on charges of conspiracy, wire fraud, and mail fraud for their alleged

roles in the Ponzi scheme. Hoegel was also charged with obstruction of justice,

making false statements, and four counts of filing false tax returns. In September

2012, Wise pleaded guilty, and the Government later voluntarily dismissed the

charges against Hoegel in the 2012 indictment without prejudice. In June 2014,

Hoegel was indicted in the Eastern District of California and charged with four

counts of filing false tax returns.

      Prior to trial, Hoegel moved in limine to exclude evidence relating to the

Ponzi scheme as prejudicial and irrelevant to the false tax return charges. The

district court denied the motion in limine and advised defense counsel to raise

objections during the course of trial as necessary.

      At trial, the Government called several witnesses, including Katherine Fung

(Fung), who purchased CDs from Hoegel in 2007 and 2008. During Fung’s

testimony, while reviewing several emails she had exchanged with Hoegel relating

to Fung’s CD purchases, Fung began to cry. After a brief recess, Fung continued

her testimony, detailing that Hoegel was the only person she dealt with from the

Millennium entities and that she purchased several CDs from Hoegel. Fung also

testified that none of the dealings she had with Hoegel involved graphic design.

      The Government also called the Internal Revenue Service (IRS) agent who

audited Hoegel’s 2005 through 2008 tax returns. The IRS agent testified that there

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were discrepancies between the income and expense amounts Hoegel reported in

the tax years 2005 through 2008. The IRS agent further testified that Hoegel’s

bank records showed that from 2005 through 2008, Hoegel (and her husband)

received $1,690,526 in unreported income from the Millennium entities.

      Hoegel called Joyce Emerson (Emerson), Hoegel’s mother, as a witness.

Over the Government’s objection, Emerson stated that during the summer of 2009,

Hoegel was barely able to function and had suffered a nervous breakdown. Out of

the presence of the jury, the Government argued that Emerson’s testimony

regarding Hoegel’s mental state in the summer of 2009 opened the door to the

Ponzi scheme, and thus the Government should be allowed to offer evidence to

explain that Hoegel’s distraught state was due to Hoegel being under investigation

for her alleged role in the Ponzi scheme. The district court reasoned that the entire

case rested on whether Hoegel acted willfully in falsifying her tax returns, and

therefore it would be unfair to prevent the Government from countering Emerson’s

testimony with evidence of what else was going on in Hoegel’s life at the time,

namely the criminal investigation. The court then presented Hoegel with the

choice of striking Emerson’s testimony about Hoegel having a nervous breakdown

or allowing the Government to ask about the Ponzi scheme. Hoegel chose to strike

the testimony regarding the nervous breakdown. The jury was told to disregard

Emerson’s testimony about Hoegel having a nervous breakdown.

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      On appeal Hoegel contends Fung’s testimony was cumulative and

prejudicial and the district court’s failure to strike or exclude that testimony was

error, mandating reversal of Hoegel’s convictions. Hoegel also argues the district

court abused its discretion in striking Emerson’s testimony that Hoegel had a

nervous breakdown in the summer of 2009.

      “We review the district court’s evidentiary rulings for abuse of discretion

and its underlying factual determinations for clear error.” United States v.

Lukashov, 694 F.3d 1107, 1114 (9th Cir. 2012). Evidentiary rulings not objected

to at trial are reviewed for plain error. United States v. Graf, 610 F.3d 1148, 1164

(9th Cir. 2010). Plain error review “is even more deferential than review for abuse

of discretion.” United States v. Rizk, 660 F.3d 1125, 1132 (9th Cir. 2011). “Under

plain-error review, reversal is permitted only when there is (1) error that is (2)

plain, (3) affects substantial rights, and (4) seriously affects the fairness, integrity,

or public reputation of judicial proceedings.” Id. (citation and internal quotation

marks omitted).

      Hoegel did not make a contemporaneous objection to Fung’s testimony nor

did she request a curative instruction. Rather, during a subsequent recess, well

after Fung had been excused, Hoegel said she wanted to preserve the objection she

made in limine prior to trial to exclude the testimony of any Ponzi scheme victim.

Hoegel argued that if Fung had not testified, the emails would not have come into

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evidence. The court ordered the redaction of an email that had not already been

shown to the jury. No other objection was raised in regard to Fung’s testimony.

      Although on appeal Hoegel argues Fung’s testimony should have been

struck, she failed to make that specific objection at trial, mandating a plain error

review. See United States v. Del Toro-Barboza, 673 F.3d 1136, 1152 (9th Cir.

2012). Whether the issue was preserved notwithstanding, we conclude the district

court did not commit error under either a plain error or an abuse of discretion

standard of review. Fung’s testimony was relevant, probative, not unfairly

prejudicial, noncumulative, and was offered to prove that during the relevant time

period, Hoegel sold CDs for the Millennium entities and did not work as a graphic

designer as she declared on her taxes. See United States v. Sepulveda-Barraza,

645 F.3d 1066, 1072 (9th Cir. 2011).

      Nor do we find the district court abused its discretion in striking Emerson’s

testimony that Hoegel suffered a nervous breakdown in the summer of 2009. As

the district court reasoned, Hoegel’s state of mind in the summer of 2009 was

relevant to whether she acted willfully in falsifying her tax returns, and the

Government had a right to put on its own evidence of events affecting Hoegel’s

state of mind at that time. In ruling on the Government’s objection to Emerson’s

testimony, the court was within its discretion to either strike Emerson’s testimony

about the nervous breakdown or to allow the Government to present evidence that

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Hoegel’s own conduct played a role in her state of mind. See United States v.

Osazuwa, 564 F.3d 1169, 1175-76 (9th Cir. 2009). We note that the district court’s

curative option followed warnings to Hoegel that her examination of witnesses was

potentially opening the door to evidence of the other criminal investigation. We

cannot conclude that the district court abused its discretion by asking Hoegel to

choose between those two options. See United States v. Robertson, 875 F.3d 1281,

1296 (9th Cir. 2017) (giving the trial court wide latitude in making evidentiary

rulings because it is in the best position to assess the impact and effect of trial).

Moreover, in view of the overwhelming evidence of guilt, any error the district

court committed in making either of those evidentiary rulings was harmless beyond

a reasonable doubt. See United States v. Ubaldo, 859 F.3d 690, 705 (9th Cir.

2017).

      Finally, Hoegel argues that the district court erred by imposing a two-level

enhancement in her sentencing guidelines calculation pursuant to U.S.S.G. §

2T1.1(b)(1). Hoegel argues the Government failed to produce evidence that the

unreported income was derived from the Ponzi scheme or that Hoegel knew about

the Ponzi scheme or any criminal activity. “We review a district court’s

construction and interpretation of the [Guidelines] de novo and its application of

the Guidelines to the facts for abuse of discretion.” United States v. Simon, 858
F.3d 1289, 1293 (9th Cir. 2017) (en banc) (alteration in original) (quoting United

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States v. Popov, 742 F.3d 911, 914 (9th Cir. 2014)).

      Section 2T1.1(b)(1) provides: “If the defendant failed to report or to

correctly identify the source of income exceeding $10,000 in any year from

criminal activity, increase by 2 levels.” Hoegel’s presentence investigation report

stated that approximately $1.7 million of the income Hoegel failed to report was

derived from a $130 million Ponzi scheme set up by Wise. Hoegel did not object

to this statement. Evidence presented at trial demonstrated that by the time Hoegel

filed her taxes in 2009, she knew the Millennium entities were under an SEC

investigation. The district court found, by a preponderance of the evidence, the

income Hoegel failed to report was derived from criminal activity; and that at the

time Hoegel filed her tax returns in 2009, she had been in some way involved in

criminal activity. These conclusions are supported by the record. The district

court did not abuse its discretion by applying the two-level sentencing

enhancement under U.S.S.G. § 2T1.1(b)(1).

      AFFIRMED.

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